WinRed, Inc. v. Ellison

Background

WinRed, Inc. sued Keith Ellison, Letitia James, William Tong, and Brian Frosh in their official capacities as the attorneys general of Minnesota, New York, Connecticut, and Maryland. The attorneys general were investigating whether WinRed violated state consumer-protection laws by using pre-checked boxes that enrolled some donors in recurring contributions. WinRed sought a declaration that the Federal Election Campaign Act (FECA) and related federal regulations preempted the state laws and investigations, as well as an injunction stopping the investigations and any enforcement action.

After the attorneys general issued subpoenas and civil investigative demands, WinRed moved for a preliminary injunction blocking their enforcement. The attorneys general agreed to stay enforcement while the motions were pending. The attorneys general from Connecticut, Maryland, and New York moved to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). The defendants also moved under Rule 12(b)(6), which addresses whether a complaint states a legally sufficient claim. WinRed requested jurisdictional discovery concerning coordination among the attorneys general.

Personal Jurisdiction

The court held that it had personal jurisdiction over Minnesota’s attorney general, and that jurisdiction was undisputed. The other three attorneys general argued that they lacked sufficient contacts with Minnesota. WinRed relied only on Minnesota’s conspiracy-based personal-jurisdiction theory rather than disputing those arguments directly.

The court explained that this theory requires, among other things, an overt act in Minnesota and harm from that act directly felt in Minnesota or by Minnesotans. The court concluded that WinRed had not made the required initial showing. The complaint did not allege that WinRed’s efforts to respond to the information requests would occur in Minnesota or directly harm Minnesotans, and the court noted that WinRed was a citizen of Delaware and Virginia, not Minnesota.

The court therefore granted the motion to dismiss the claims against James, Tong, and Frosh for lack of personal jurisdiction. It also denied WinRed’s request for jurisdictional discovery because the jurisdictional theory failed as a matter of law even assuming extensive coordination, and because WinRed had not offered other evidence suggesting discovery would establish a jurisdictional basis.

FECA Preemption

As to Ellison, the court considered WinRed’s argument that FECA preempted Minnesota’s consumer-protection laws and investigation. Preemption means that federal law displaces state law. WinRed asserted express preemption, field preemption, and conflict preemption.

The court rejected all three theories. It held that FECA’s express preemption provision is narrowly focused on matters directly related to federal campaign finance, including political-committee registration, disclosure of receipts and expenditures, and contribution and expenditure limits. The state consumer-protection laws at issue were generally applicable laws addressing deceptive trade practices, not laws specifically regulating federal elections or campaign-finance limits.

The court also rejected field preemption because Congress had not occupied the field of consumer protection. FECA’s regulation of some fundraising and disclosure issues did not place all conduct by a federally registered political committee within an exclusively federal field.

The court rejected conflict preemption as well. WinRed did not argue that it was impossible to comply with both federal and state law. The court also concluded that applying state consumer-protection laws to deceptive recurring-donation practices did not obstruct Congress’s goal of creating uniform federal rules for campaign contributions, expenditures, and reporting. The court emphasized that FECA does not generally exempt federal political committees from state consumer-protection laws.

Because FECA did not preempt the relevant state laws or investigations, the court held that WinRed failed to state a claim against Ellison. The court dismissed that claim with prejudice.

Preliminary Injunction and Disposition

The court denied WinRed’s motion for a preliminary injunction as moot. Because the court dismissed the claims against all four defendants, it concluded that WinRed could not succeed on the merits and no injunction ruling was necessary.

The order granted the defendants’ motion to dismiss as follows: WinRed’s claims against James, Tong, and Frosh were dismissed without prejudice, while WinRed’s claim against Ellison was dismissed with prejudice. The preliminary-injunction motion was denied as moot. Judge John R. Tunheim directed that judgment be entered accordingly.