Montana Lawsuit Targets Limits on Corporate Election Spending

Several groups filed a federal lawsuit to block Montana Initiative 194 on the same day voters approved it, challenging a measure that would bar incorporated entities from spending money to influence elections. The suit landed at 11:15 p.m. Tuesday, 18 minutes before The Associated Press called the race. Voters had spoken. The legal apparatus was already moving.

Jeff Mangan, founder and president of the Transparent Election Initiative, the group behind The Montana Plan, said the lawsuit was expected. “We expected a lawsuit from day one, and we've been waiting for this moment,” he said in a statement. “Montana voters overwhelmingly made their voices heard, we're confident in the legal foundation of this initiative and ready for the fight ahead.”

A vote meets a lawsuit

Initiative 194 passed 65% to 34%, with 97% of the vote counted as of Nov. 5, according to the Associated Press. Unless a court intervenes, the measure will take effect Jan. 1, 2027, barring any incorporated entity in Montana from spending money to influence state, local and federal elections.

The lawsuit asks the court to block the law. Its plaintiffs include Montana-based Frontier Institute, Montana-based Frontier Action Fund, Montana Family Institute, Montana Family Foundation and the Montana Republican State Central Committee. The suit names Montana Attorney General Austin Knudsen and Secretary of State Christi Jacobsen as defendants.

The complaint alleges that the initiative violates First Amendment protections for speech, assembly and the press. “I-194 harms everyone,” it says, arguing that the measure “silences organizations, preventing them from sharing information essential to their purposes.” The complaint also says the law would restrict the plaintiffs’ ability to communicate about ballot measures and advocate for candidates.

A spokesperson for Knudsen declined to comment, saying the attorney general had not been served as of 11:30 a.m. Thursday. Jacobsen's office hadn't responded to a request for comment.

Who gets to spend in politics

The Montana GOP's role in the suit puts the money question plainly on the record. The complaint says the party “relies on contributions to its independent-expenditure account by corporations and other entities” to support candidates. It argues that Initiative 194 “will significantly reduce the funds the Montana GOP needs to make independent expenditures, and thus harm its ability to fulfill its mission.”

The complaint invokes Citizens United, the 2010 U.S. Supreme Court ruling recognizing that First Amendment protections extend to corporations. The ruling appears 11 times in the 57-page filing. “A law like I-194 is a ban on an organization's speech,” the complaint says. It also claims “vague terms” leave unclear which actions are prohibited and says the law would deprive plaintiffs, donors and audiences of rights to speech, assembly, petition and association.

Mangan and the Transparent Election Initiative argue that the measure doesn't conflict with Citizens United, but “takes a different legal approach.” Tom Moore, a senior fellow at the Center for American Progress whose white paper partly inspired Mangan to promote the initiative in Montana, said the plan draws on a centuries-old legal framework defining corporations as “creatures of state law.” He told Montana Free Press that states can change the powers corporations have.

The fight moves to court

Moore said voters had watched corporations get “too long a leash” and said states had authority to “pull (corporations) back in, refashion their powers and then send them back out.” Of Citizens United, he said: “Nowhere in that case, nowhere in any case did it ever say that a state has to give the capacity to spend in politics.”

Moore said no one has challenged the specific question of whether a state can decline to extend certain powers to corporations. He could envision the Montana lawsuit eventually reaching the U.S. Supreme Court, though resolving it could take months or years. Hawaii's Legislature passed a similar law through a legislative bill in May, and that law is being litigated. Moore said leaders from dozens of other states had approached his organization about similar initiatives.

Former U.S. Transportation Secretary Pete Buttigieg visited Butte in support of the measure. Opposition came mostly through op-eds from groups arguing it would prevent local businesses from participating in the political process. Several people involved in organizing Initiative 194 said the lawsuit was no surprise. The vote's limits, and the limits on corporate political spending, will now be argued in court.