A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit issued an opinion in EMILY’s List v. Federal Election Commission in September, striking down regulations that limited donations to nonprofit political action committees that are used for campaign activity. The regulations were intended to limit how certain nonprofit organizations raise and spend money for political campaigns.

EMILY’s List, a non-connected political action committee (PAC) that seeks to elect pro-choice, Democratic women to office, challenged Federal Election Commission (FEC) regulations, which went into effect in 2005, as an unconstitutional violation of the group's First Amendment free speech rights. EMILY’s List, which maintains both federal and nonfederal accounts, filed a complaint on Jan. 12, 2005, challenging the regulations regarding the treatment of funds received in response to certain solicitations and amended rules regarding federal/nonfederal fund allocation ratios for PACs.

The regulations required tax-exempt organizations to use "hard money" for election and campaign activities. "Hard money" is limited to a $5,000 annual cap per contributor. The regulations enacted by the FEC were intended to limit "soft money," which is "unlimited donations by individuals, corporations, political action committees and unions, to nonprofit groups," according to The Washington Post.

The decision in the EMILY’s List case could greatly impact contribution limits for tax-exempt groups in the future. It may enable individuals to circumvent campaign finance regulations limiting the amount of money that they can give to a federal candidate by allowing them to give unlimited money to a nonprofit organization. The organization would then be able to spend the money to directly support or oppose a candidate’s campaign.

Rick Hasen, a law professor at Loyola Law School—Los Angeles and the moderator of the Election Law Blog, said that this decision "essentially will allow individuals (and, I predict, eventually corporations and unions) to make unlimited contributions to political committees to fund independent expenditure campaigns." Hasen further stated, "Even if the court restrains itself in Citizens United [a campaign finance case currently before the U.S. Supreme Court], the writing is on the wall: if the court's members remain the same, the corporate limits eventually will fall. After that, the court could strike down contribution limits to PACs and the ban on party soft money."

Judge Janice Rogers Brown also seemed to worry about going down this path in her concurring opinion in the EMILY’s List case. She said that the majority ruling would allow political action committees to say, "Just like you, we want [federal candidate] to win. You have already donated all the law allows to [federal candidate], but there is no limit on how much you can give to us to support [federal candidate]." She also noted that the majority opinion means that multicandidate political committees can "spend unlimited amounts of soft money to run ads attacking or supporting federal candidates and political parties" or "on get-out-the-vote activities that support federal candidates and political parties," and Congress cannot do anything to stop it.

Brown said the majority opinion overreached by deciding the constitutional question, instead of only deciding the statutory issue. Quoting language from a previous D.C. Circuit case, Brown said, "Federal courts should not decide constitutional questions unless it is necessary to do so. Before reaching a constitutional question, a federal court should therefore consider whether there is a non-constitutional ground for deciding the case, and if there is, dispose of the case on that ground."

The EMILY’s List case has also answered the constitutional question posed in the SpeechNow.org v. FEC case that the D.C. Circuit is scheduled to hear soon. In that case, "The plaintiff is challenging the contribution limits that apply to a group which makes only independent expenditures," according to Democracy 21. "The majority opinion in EMILY’s List attempts to resolve that question, even though it wasn’t presented in the case. The opinion says contribution limits cannot apply to such a group, thus serving to preempt the full Court of Appeals’ decision in the SpeechNow case before it even has reached the Court of Appeals, much less before it has been briefed and argued," said Democracy 21.

The FEC is still deciding if it will appeal the decision. If it moves forward, the commission can appeal to an en banc panel of the D.C. Circuit Court of Appeals, or it can appeal directly to the U.S. Supreme Court. According to Roll Call, "The Justice Department could choose to pursue the case on its own should the FEC take a pass or simply let the deadlines lapse."

The EMILY’s List case has already affected FEC enforcement proceedings. The FEC did not take a position on whether Black Rock Group, a political consulting group, could coordinate independent expenditure campaigns. The EMILY’s List decision "has left the FEC uncertain over how to proceed with some questions of campaign finance law," according to The Hill.

"We are moving toward a deregulated federal campaign finance system, where money flows freely and perhaps only disclosure laws remain. It is a world in which those with more money use their considerable funds to elect candidates of their choice and to have disproportionate influence over public policy. The unlevel playing field awaits," according to Hasen.