A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled in the EMILY’s List case today, striking down Federal Election Commission (FEC) regulations that limited donations to nonprofit groups that are used for campaign activity. The regulations are intended to limit how nonprofit organizations raise and spend money for political campaigns.

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

The regulations required nonprofits 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 the amount of money considered "soft money, " which "are unlimited donations by individuals, corporations, political action committees and unions, to nonprofit groups," according to the Washington Post.

Rick Hasen, a law professor at Loyola 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."

What does this ruling do for campaign finance reform? Is this just another nail in the coffin of the Bipartisan Campaign Reform Act (BCRA)? The Supreme Court is poised to rule on whether two previous rulings were justified in the Citizens United vs. FEC case.

"Even if the court restrains itself in Citizens United, 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," said Hasen.

Hasen further stated, "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."