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UNITED STATES DISTRICT COURT DISTRICT OF MAINE

DENNIS BAILEY,

) ) Plaintiff ) ) v. ) ) STATE OF MAINE COMMISSION ON ) GOVERNMENTAL ETHICS ) AND ELECTION PRACTICES ) ) Defendant ) and ) ) ELIOT CUTLER ) ) Intervenor-Defendant ) )

Civil No.:1:11-cv-00179-NT

DEFENDANT-INTERVENORS MOTION FOR SUMMARY JUDGMENT AND INCORPORATED MEMORANDUM OF LAW MOTION Defendant-Intervenor Eliot Cutler moves this Court, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for summary judgment on all counts of Plaintiffs Complaint. The reason for this motion, as more fully set forth in the incorporated memorandum of law and accompanying Joint Statement of Material Facts, is that there is no disputed issue of material fact and the Defendant and Defendant Intervenor are entitled to judgment as a matter of law. INCORPORATED MEMORANDUM OF LAW INTRODUCTION Contrary to the efforts by Plaintiff Dennis Bailey to paint himself as a citizen journalist whose constitutional rights have been trampled on by the Defendant State of Maine Commission

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on Governmental Ethics and Election Practices (the Commission), the undisputed record in this case establishes that this is a case of political character assassination by political operatives working at the direction of one candidate against another candidate, accomplished via an anonymous political attack website known as the Cutler Files. Thus, the record establishes that Rosa Scarcellis husband, Thomas Rhoads, began the research that was ultimately used to create the Cutler Files website shortly after his wife entered the race for Governor in the State of Maine; that he did so specifically to strengthen her position with the Democratic Governors Association; that in addition to Scarcellis husband and senior political advisor (Bailey), others involved with the Scarcelli campaign, including a public relations firm and a campaign worker, offered suggestions as to content and research for the site; that Bailey and Rhoads had a keen interest in anonymity and a willingness to slither by questions posed to them about their role in the website in order to hide the connection between the website and the Scarcelli campaign; and that as early as November of 2009 (well before Scarcelli lost the primary in June, 2010), the candidate herself wrote to Rhoads and Bailey that I think its highly important to start a blog campaign against Cutler and then again in July of 2010 (shortly before the Cutler Files was posted) that we need to start blogging all the goods. The record further reflects that, contrary to the allegation in the complaint that the value of the website was de minimus, Bailey was paid over $68,000 by two gubernatorial campaigns running against Eliot Cutler while he worked on the Cutler Files; that the out-of-pocket expenditures on the website actually exceeded the statutory $100 financial reporting threshold for independent expenditures (contrary to what Bailey and Rhoads told the Commission during its investigation); that voter history information on Eliot and Melanie Cutler published on the Cutler Files was not available to the general public but was obtained by Bailey and Rhoads

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through State voter records purchased by the Scarcelli campaign at a cost of $10,000 with a requirement that use of the records be directly related to a campaign; and that candidate Scarcelli and her husband valued the opposition documents and research that were ultimately published on the Cutler Files at $30,000 and, after Scarcelli lost the primary, tried to sell those documents for that amount to other campaigns opposing Eliot Cutler. Finally, the undisputed record puts to rest one of the central underpinnings of the Plaintiffs position in this case that the Scarcelli campaign was over before the Cutler Files was published. To the contrary, it is undisputed here not only that the Rosa for Maine campaign was continuing to file reports with the State during the relevant time period, but that Scarcelliwith the advice of Rhoads and Baileywas making preparations for her next move, and in that regard, her team was particularly focused on defeating Cutler in the general election. Thus, emails generated in that time frame reveal Rhoads, Scarcelli and Bailey hoping that Independent candidate Shawn Moody (for whom Bailey was working at the time) would make a strong enough showing to take votes away from Cutler, suggesting that they start a prayer circle for Republican Paul LePage, and warning that they needed a plan if Cutler were to prevail. In short, the record establishes beyond dispute that the Cutler Files was not a news story, commentary or editorial, but was a negative campaign advertisement with no other reasonable interpretation than advocating the defeat of Eliot Cutler, the content and idea of which were created by Dennis Bailey and Thom Rhoads as part of a campaign strategy in their roles as members of Rosa Scarcellis political campaign. Furthermore, the web site was not distributed through the facilities of any periodical publication, but was instead financed and published by Dennis Bailey during a time when he was being paid tens of thousands of dollars to manage the press relations of the competing gubernatorial candidate Shawn Moody, and simultaneously

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providing strategic and public relations advise to Scarcelli with respect to her future political endeavors. The Cutler Files was therefore not subject to the statutory exemption in 21-A M.R.S. 1012(3)(B)(1), nor was it Constitutionally entitled to that or any other exemption from Maines campaign attribution and disclaimer laws. The Commission did not violate any statutory or Constitutional rights of Dennis Bailey in fining him $200 for this clear violation of Maines campaign finance laws. This Court should therefore enter judgment in favor of the Commission and Defendant-Intervenor on each of Baileys claims. STATEMENT OF FACTS The undisputed facts relevant to Intervenor Eliot Cutlers motion for summary judgment are set forth in full in the accompanying Statement of Material Facts. In brief, they are as follows. Plaintiff Dennis Bailey, through his public relations firm, Savvy, Inc., is in the

business of generating awareness [and] influence for his clients. JSMF 3-7. He was hired to promote Rosa Scarcelli for governor by the Rosa for Maine campaign in September, 2009, and was paid at least $33,000 for his work on the campaign. JSMF 21-22. His position was that of senior political advisor and within the campaign and he was responsible for campaign communications. JSMF 24-25. In that position, he had the authority to make decisions with respect to campaign communications on behalf of the campaign himself. JSMF 26. Although Savvy, Inc. did not go under contract with Rosa for Maine until September, 2009, the campaign was officially launched on July 15, 2009. JSMF 17-19. At or around that time, candidate Rosa Scarcelli signed a pledge in which she promised not to participate in, and to condemn negative attacks on other gubernatorial candidates. JSMF 20. That notwithstanding, her husband Thomas Rhoads, who was an active volunteer in his wifes campaign, began doing opposition research on Eliot Cutler, an independent candidate for governor, in the late summer of

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2009. JSMF 27-32, 36. Scarcelli was aware of this activity on the part of her husband. JSMF 41-42. In mid-October, 2009, Rhoads prepared, and sent to Bailey for editing, a document he called Top 10 Eliot Cutler Vulnerabilities, in which he detailed a number of negative charges against Cutler.1 JSMF 44-47. Scarcelli has testified that the purpose of her husbands research on Eliot Cutler was to put her in a strategic position to convince the Democratic Governors Association that she was the best Democratic candidate. JSMF 42. Thus, Scarcelli asked her husband to prepare a briefing book on Cutler as she prepared to make a trip to the DGA and Rhoads did so. JSMF 42-58. That memo reflects the thinking of the Rosa for Maine Campaign at the time. JSMF 49-61. It identifies Cutler as a serious threat, it suggests that there are problems with his background and it proposes that making him a pariah and putting him on the defensive early could kill Cutlers changes of ever achieving crucial momentum state-wide. JSMF 55-57. The sentiments expressed by Rhoads in the DGA Memo were echoed by others in the campaign at the time. JSMF 49-61. For example in a November 24, 2009 email, Bailey referenced discussing a strategy to take Cutler out now. JSMF 50. Scarcellis Campaign Manager Patsy Wiggins responded I agree. Lets talk Monday. JSMF 50-51 And Scarcelli added: I agree as well. There is enough skepticism now, that I feel we need to dislodge him before he develops roots. I think its highly important to start a blog campaign against him. . . JSMF 51. In addition to providing the Top 10 Vulnerabilities document to Bailey, Rhoads also provided it to a political consultant with a public relations firm called Link Strategies that was
1

This document was ultimately incorporated into the Cutler Files Website. JSMF 48,124,139-145.

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working for the Rosa for Maine campaign and to Wiggins, who, in turn, suggested forwarding it to DGA. JSMF 49,52, 58-60, 61-66. In an email string entitled How do you think this would look on a blog for starters, Bailey and Rhoads discussed not only content for a proposed website but also suggestions provided by the Link Strategies consultant for that website. JSMF 63-69. In another email, the Link Strategies consultant cautioned against releasing the information directly from the campaign because, he said, it would be kinda awkward. JSMF 66. Over the next couple of months, Bailey and Rhoads agonized over how to publicize what they had developed about Cutler without attribution. JSMF 67, 70-84,104-114. They tried to interest various reporters but made it clear that the reporters absolutely cant say where the information came from. JSMF 70, 74-75, 77-80. They also worried about timing, with Rhoads opining to one reporter that after the primary might be too late. JSMF 80. In June, 2010, Scarcelli lost the primary. After the loss, Scarcelli and her husband attempted to hawk the Cutler research to other campaigns in order to pay down the debt of the Rosa for Maine campaign. JSMF 95-103. Their asking price was $30,000, a price that was calculated in part because of the amount of work that had gone into preparing the information. JSMF 97-99. Not surprisingly, however, no other campaign showed an interest in the product. JSMF 103. After the Democratic primary, Bailey went to work for Shawn Moody, who was an independent candidate for governor in the general election. JSMF 88-89. Bailey was paid at least $35,000 for his work on the Moody campaign. JSMF 91. However, even while collecting a retainer from Moody, Bailey continued to work with Scarcelli and Rhoads as they began thinking about Scarcellis next political move. JSMF 85-86,92-94,100-102. They considered a potential win by Cutler in the election to be a major obstacle to Scarcellis future and were

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therefore focused intently on defeating Cutler. JSMF 92-94, 104-113, 154-156. And in that regard, the information Bailey and Rhoads had developed about Cutler before the primary played a major role. JSMF 104-118. Thus, communications between Rhoads, Scarcelli and Bailey during the beginning of July focused heavily on the Cutler research. JSMF 104-124. On July 1, 2010, Rhoads and Bailey met to discuss plans for publishing the material themselves. JSMF 104-108. Then, five days later, Scarcelli, referring to the Cutler material, wrote to the two men that we need to start blogging all the goods. We need to liven the party up! JSMF 109-110. Rhoads agreed, writing to Scarcelli and Bailey on July 10, 2010 I think it makes most sense to go out with it [the Cutler research] on our own independently on a website. JSMF 111-112. Scarcellis response to Rhoads suggestion -- and give it to Paul -- referring to gubernatorial candidate Paul LePage, demonstrates her assent as well as the lengths the group was willing to go to see Cutler defeated . JSMF 112-113. Bailey prepared a mock up of the site on July 15, 2010, using material he and Rhoads had drafted while working for the Rosa for Maine campaign in the primary. JSMF 114-116. They then enlisted the help of an attorney working for Scarcelli who had previously worked on the Rosa for Maine campaign to do some research. JSMF 119-122. Bailey and Rhoads also spent a considerable amount of time considering the issue of anonymity. JSMF 75-76,81-82,105108, 127. They worried about how the site might adversely affect Scarcelli, and also how it would look if they went to great lengths to hide their identities. JSMF 106-108 Shortly before going live with the website, Bailey wrote:

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The fewer who know the better. I would like someone else to actually upload this stuff so I dont have to lie when the press calls. One thing I learned from the Wikileaks story: he uploads files from different coffee shops so the IP a dress [sic] cant be traced. JSMF 127. The Cutler Files went live on August 30, 2010. JSMF 128. It included information

about its authors that was patently false. JSMF 131,135-36,186-87. It also included deceptive and defamatory charges against Cutler, so on September 3, 2010 the Cutler campaign filed a complaint about the website with the Commission. JSMF 129,133,138-145. The Rosa for Maine campaign had on-going financial activity through August, 2010 and the campaign did not officially terminate until it filed its last report on December 30, 2010. JSMF 87. Thus, the Rosa for Maine campaign existed for the entire period the website was publicly accessible on the internet. JSMF 19,87,128,136. In connection with the Commissions investigation and resulting public interest in that investigation, Bailey provided false information to the Commission about his participation, see e.g. JSMF 146-47 (Bailey to Wayne I have limited info [about Cutler Files] but Im certainly willing to share what I know); compare JSMF 148-49 (I think I said [to Wayne] I was not directly involved in the material. I didnt write the material) with JSMF 124,139-40,144-45 (Im going to finish the Thornburg piece today) as did Rhoads, compare JSMF 160 (The idea of a website did not emerge until the summer of 2010) with JSMF 67-73,76,124 (emails between Bailey and Rhoads on January 14, 2010 with subject line How do you think this would look on a blog for starters?). Scarcelli was not interviewed by the Commission, but what she said in her public statement about her participation was also false. Compare JSMF 161 (Let me be clear as I have said from the beginning, there was no involvement by me or my campaign in the Cutler Files website in any way, shape or form) with JSMF 51 Scarcelli

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writes: I feel we need to dislodge [Cutler] before he develops roots. I think its highly important to start a blog campaign against him), JSMF 52 (Scarcelli campaign manager asking Rhoads to send the Cutler research to a staff person at the DGA), JSMF 66 (Link Strategies consultant suggests having a blogger write about this stuff); JSMF 95-97,100 (Scarcelli offering to sell the Cutler research to Libby Mitchell); JSMF 109 (Scarcelli writes: Perfect. This is why we need to start blogging all the goods.); JSMF 38-40, 124,140 (Cutler Files website contained voter information not available to the general public that was purchased by the Rosa for Maine campaign for purposes and activities directly related to a campaign.). Furthermore, contrary to what Rhoads and Bailey told the Commission during its investigation, the out-of-pocket expenditures on the website actually exceeded the statutory $100 financial reporting threshold for independent expenditures. JSMF 172. The website also included voter history information on Eliot and Melanie Cutler that was not available to the general public but was obtained by Bailey and Rhoads through State voter records purchased by the Rosa for Maine campaign from the State of Maine for purposes and activities directly related to a campaign at a cost of $10,000. JSMF 38-40, 124,140. ARGUMENT I. THE STANDARD FOR SUMMARY JUDGMENT On a motion for summary judgment, the moving party bears the burden of showing that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Once the movant has made this preliminary showing the nonmoving party must produce specific facts, in suitable evidentiary form, to establish the presence of a trialworthy issue. Triangle Trading Co. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir.1999) see also Wilson v. Moulison N. Corp., 639 F.3d 1, 6 (1st Cir.2011) (A properly

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supported summary judgment motion cannot be defeated by conclusory allegations, improbable inferences, periphrastic circumlocutions, or rank speculation.) (citations omitted). In this case, Plaintiff asserts five claims against Maines Commission on Governmental Ethics: Count I is a claim pursuant to 42 U.S.C. 1983 that 21-A M.R.S. 1014 and 21-A M.R.S. 1012(3)(B)(1) as applied to Plaintiff constituted a violation of Plaintiffs rights under the First Amendment; Count II is a claim pursuant to 5 M.R.S. 11007(4)(C) that the same constituted a violation of Maines Administrative Procedures Act; Count III is a claim pursuant to 42 U.S.C. 1983 that the same constituted a violation of Plaintiffs Equal Protection rights; Count IV appears identical to Count I but grounded in different facts alleging a de minimus expenditure of money; and Count V is a claim pursuant to 5 M.R.S. 11007(4)(C) that the fine imposed by the Commission violated 21-A M.R.S. 1014(4). As discussed more fully below, the Commission is entitled to judgment as a matter of law on all five of these claims. II. THE ATTRIBUTION REQUIREMENTS OF 21-A M.R.S. 1014 ARE CONSISTENT WITH THE FIRST AMENDMENT AS APPLIED TO DENNIS BAILEY_(COUNTS I , AND IV) A. The Legal Standard The attribution requirements of the version of the Maine Campaign Finance laws in effect at the time the Cutler Files was posted on the internet require that [w]henever a person makes an expenditure to finance a communication expressly advocating the election or defeat of a clearly identified candidate through broadcasting stations, newspapers, magazines, campaign signs or other outdoor advertising facilities, publicly accessible sites on the Internet, direct mails or other similar types of general public political advertising or through flyers, handbills, bumper stickers and other nonperiodical publications, the communication must clearly state the name and address of the person who made or financed the expenditure for the communication.

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21-A M.R.S. 1014(1) and (2) (West 2010)2 (emphasis added). The same statutory provision requires a disclaimer as to whether the communication was authorized by any candidate. Id. Closer to the election, any communication that names or depicts a clearly identified candidate and is disseminated during the 35 days before a general election must also include an attribution and disclaimer. 21-A M.R.S. 1014(2-A). It is uncontested that the Cutler Files was a publicly accessible site[] on the Internet, that advocate[ed] the defeat of a clearly identified candidate, and that name[d] or depict[ed] a clearly identified candidate and was disseminated before and within the 35 days before a general election. JSMF 180. It is also uncontested that the website did not ever state the name and address of the person who made or financed the communication, JSMF 165, but instead contained false and misleading information about its authors. JSMF 131-32,135-37,185-87. The website was therefore in facial violation of 21-A M.R.S. 1014(2) and (2-A). In evaluating the as-applied First Amendment challenge brought by the Plaintiff in this case, the Court must determine whether enforcing the statute against Dennis Bailey has a substantial relation to the governmental interests that support the statute. Nat'l Org. for Marriage v. McKee, 649 F.3d 34, 57 (1st Cir. 2011) (NOM I)3. The First Circuit, in upholding the attribution and disclaimer provisions of 21-A M.R.S. 1014 as unquestionably constitutional under a First Amendment challenge, recognized three sufficiently important and/or compelling governmental interests. Id.

In 2011, the Maine Legislature amended certain portions of Section 1014. The above quoted language was amended in a manner not relevant here by adding the words cable television systems, between the words broadcasting stations and newspapers. The citations to statutes contained in this brief will be to the statutes in effect in 2010. 3 This memorandum adopts the case nomenclature of the First Circuit. See Natl Org. for Marriage v. McKee, --F.3d ---, 2012 WL 265843at *1 (Jan. 31, 2012) (NOM II) (referring to its earlier decision at 649 F.3d 34 as NOM I).

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The first was an informational interest in providing the electorate with information as to where political campaign money comes from and how it is spent. Id. (quoting Buckley v. Valeo, 424 U.S. 1, 66 (1976)). The First Circuit noted that this informational interest was sufficiently important because: It allows voters to place each candidate in the political spectrum more precisely than is often possible solely on the basis of party labels and campaign speeches. The sources of a candidate's financial support also alert the voter to the interests to which a candidate is most likely to be responsive and thus facilitate predictions of future performance in office. Id. (quoting Buckley, 424 U.S. at 67). The sources of a candidates financial opposition are equally important to a voter attempting to make such predictions. The second informational interest is highlighted by the recent Supreme Court case Citizens United v. Fed. Election Comm'n, 130 S. Ct. 876, (2010). In describing this interest, the First Circuit emphasized that the government has a particularly strong interest in identifying the speakers responsible for attacks on candidates in light of the rise of internet reporting: However, the informational interest is not limited to informing the choice between candidates for political office. As Citizens United recognized, there is an equally compelling interest in identifying the speakers behind politically oriented messages. In an age characterized by the rapid multiplication of media outlets and the rise of internet reporting, the marketplace of ideas has become flooded with a profusion of information and political messages. Citizens rely ever more on a message's source as a proxy for reliability and a barometer of political spin. Disclosing the identity and constituency of a speaker engaged in political speech thus enables the electorate to make informed decisions and give proper weight to different speakers and messages.[fn]33 Citizens United, 130 S.Ct. at 916; see also Cal. ProLife Council, Inc. v. Getman, 328 F.3d 1088, 1105 (9th Cir.2003) (recognizing that, in the cacophony of political communications through which ... voters must pick out meaningful and accurate messages [,] ... being able to evaluate who is doing the talking is of great importance). NOM I, 649 F.3d at 57. The First Circuit further stated: As the Court observed in First National Bank v. Bellotti, 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978), the people in our democracy are entrusted with the responsibility for judging and evaluating the relative merits of conflicting arguments.

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They may consider, in making their judgment, the source and credibility of the advocate. Id. at 79192, 98 S.Ct. 1407 (footnote omitted). Id. at 57 n. 33. Finally, in Natl Org. of Marriage, the First Circuit recognized (but did not rely on) a third governmental interest in gathering data necessary to enforce substantive election law restrictions. Id. at 57 n. 34. The First Circuit ultimately held that Citizens United has effectively disposed of any attack on Maine's attribution and disclaimer requirements. Nat'l Org. for Marriage, 723 F.Supp.2d at 267. The requirements are minimal, calling only for a statement of whether the message was authorized by a candidate and disclosure of the name and address of the person who made or financed the communication. Me.Rev.Stat. tit. 21A, 1014(1)(2). These are precisely the requirements approved in Citizens United, 130 S.Ct. at 91314 (citing 2 U.S.C. 441d), and they bear a close relation to Maine's interest in dissemination of information regarding the financing of political messages. The disclaimer and attribution requirements are, on their face, unquestionably constitutional. Id. at 61. B. Applying Section 1014 to Dennis Bailey and the Cutler Files is Constitutional Because Bailey Does Not Have Additional Constitutional Rights as a Citizen Journalist The pressincluding any bloggers or citizen journalists who style themselves as members thereof has no constitutional privilege beyond that of other speakers. Citizens United, 130 S.Ct. at 905 (majority opinion) (quoting Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 691 (1990) (Scalia, J., dissenting)). Bailey therefore has no basis for an asapplied constitutional challenge by virtue of labeling himself a blogger or a citizen journalist. Furthermore, the press exemption is not a constitutional mandate. Austin, 494 U.S. at 668 (the press unique societal role may not entitle the press to greater protection under the Constitution, but it does provide a justification for legislatively created exemptions to constitutionally permissible limitations). Although Citizens United overruled portions of McConnell and Austin, those earlier cases were not inconsistent with Citizens United on the point that the press

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exemption is not a constitutional mandate: McConnell was silent on the issue, Citizens United, 130 S. Ct. at 913; and Austin held only that a media exemption was constitutionally permissible, not that it was constitutionally mandatory. Austin is thus still binding precedent on this point. Indeed, a recent Federal District Court decision in Colorado rejected an as-applied challenge to municipal campaign finance attribution and disclosure ordinance that contained no press exemption at all: Ms. Olson has presented no case law, and the Court has found none, holding that the First Amendment requires that the press must be excluded from campaign funding disclosure requirements. Olson v. City of Golden, Colo., 07-CV-01851-MSK-KMT, --- F. Supp. 2d. ---, 2011 WL 3861433, at *9 (D. Colo. Sept. 1, 2011). Press entities (including bloggers and citizen journalists) are not entitled to any additional protection under the First Amendment than is an ordinary citizen. The government has just as strong an interest in applying campaign finance laws to citizen journalists as it does in applying such laws to ordinary citizens. See, e.g., Eugene Volokh, Freedom for the Press As an Industry, or for the Press As A Technology? From the Framing to Today, 160 U. Pa. L. Rev. 459, 506-521 (2012) (widely canvassing First Amendment jurisprudence, including campaign finance laws, and concluding that the Supreme Courts decisions since 1931 generally take the all-speakers-equal view and reject the idea that users of mass communication or members of the press have any heightened constitutional rights). Therefore, the Court need not determine whether Bailey was or was not a citizen journalist or a blogger in order to determine if the law was Constitutionally enforced against him; instead, the court must determine whether applying the attribution and disclaimer provisions of Section 1014 to Bailey furthers the governmental interests behind that statute. Olson, 2011 WL 3861433, at *9-10. Whether Bailey should be covered by Maines press exemption is not a

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matter of Constitutional law, but of statutory construction.4 The statutory construction aspect of Maines press exemption is more fully addressed in Section IV below. Furthermore, because Section 1014 does not contain a minimum financial threshold, the court need not separately analyze Baileys two as-applied First Amendment claims, but should instead focus on whether enforcing Section 1014 against Bailey furthers any of the governmental interests that support Section 1014. Bailey cannot succeed on an as-applied or a de minimus challenge to Section 1014 because, contrary to the allegations in the complaint that the value of the website was de minimus and that Bailey was not working for any candidate, the record reflects that Bailey was paid over $68,000 by two gubernatorial campaigns running against Eliot Cutler while he worked on the Cutler Files; that the out-of-pocket expenditures on the website actually exceeded the statutory $100 financial reporting threshold;5 that the voter history information on Eliot and Melanie Cutler contained on the website was not available to the general public but was obtained by Bailey and Rhoads through State voter records purchased by the Scarcelli campaign at a cost of $10,000; that time and effort was contributed by additional campaign professionals working for the Scarcelli campaign; and that candidate Scarcelli and her husband valued the opposition documents and research that was ultimately published on the Cutler Files at $30,000 and tried to sell it for that amount to other campaigns opposing Eliot Cutler after Scarcelli lost the primary.
4

It is worth noting, however, that this same media exemption has been upheld as Constitutional in several Supreme Court cases addressing federal and state expenditure laws. FEC v. Massachusetts Citizens for Life, 479 U.S. 238 (1986); Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 667 n.5, 110 S. Ct. 1391, 1401 n.5, (1990) overruled in part by Citizens United v. Fed. Election Comm'n, 130 S. Ct. 876, 175 L. Ed. 2d 753 (2010); McConnell v. Fed. Election Comm'n, 540 U.S. 93, 228, 124 S. Ct. 619, 709, (2003) overruled in part in part by Citizens United v. Fed. Election Comm'n, 130 S. Ct. 876, 175 L. Ed. 2d 753 (U.S. 2010). The Olson court also upheld a subsequently enacted ordinance that created a news story exemption identical to Maines. Olson, 2011 WL 3861433, at *2, *6. 5 As a matter of law, an expenditure of over $100 is not de minimus for purposes of Section 1019-B, and therefore could not be de minimus for purposes of 1014 which provides no financial minimum. NOM I, 649 F.3d at 59-61; see also Ctr. for Individual Freedom, Inc. v. Tennant, 1:08-CV-00190, --- F. Supp. 2d. ---, 2011 WL 2912735 *45 (S.D.W. Va. July 18, 2011) (upholding a statute, like Maines statute, with no monetary minimum for the attribution and disclaimer requirements).

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The amount of money involved, and Baileys financial ties to competing gubernatorial candidates demonstrate that all three governmental interests would be furthered by enforcement of Section 1014 against Bailey. The first interest is furthered because attributing the website to Bailey would have helped inform the electorate where and against whom campaign money was being spent, and allow[] voters to place each candidate in the political spectrum more precisely than [would be] possible solely on the basis of party labels and campaign speeches. NOM I, 649 F.3d at 57. The second interest is furthered because identifying Bailey as the speaker would have been a proxy for reliability and a barometer of political spin. Id. And the third interest in aiding the gathering data necessary to enforce substantive election law restrictions is furthered because enforcing the attribution provisions against Baileywho had known ties to the Scarcelli and Moody campaignswould have aided the government and the public in determining that the website contained non-public voter information that the Rosa for Maine campaign disclosures indicate had been purchased by her campaign at a cost of $10,000. This last interest is especially important in light of the fact that in this case false and misleading statements were made to the Commission and to the press by Bailey, Rhoads, and Scarcelli about their respective involvement. Had Bailey and Rhoads fully disclosed the costs that went into the website, Bailey would likely also have been fined by the Commission for his violation of Section 1019-B. C. Applying Section 1014 to Dennis Bailey Furthers the Governmental Interests Because He Was Paid to Handle the Press Communications of Two Competing Candidates, Each of Whom Had Signed The Maine Code of Fair Campaign Practices Pledge. One provision of Maines Campaign Finance Laws rests entirely on the Commission enforcing Section 1014 against individuals who are being paid (in Baileys case $68,000 in retainers) to manage the communications of competing gubernatorial campaigns: The Maine

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Code of Fair Campaign Practices. 21-A M.R.S. 1101 is meant to prevent negative campaign practices like anonymous political attack websites: The purpose of this bill is to provide a mechanism to identify and discourage the use of negative campaign practices which by distorting the truth, unfairly influence the voters and skew the election process.6 Statement of Fact to LD 2158, An Act to Discourage Negative Campaign Practices, (establishing the Maine Code of Fair Campaign Practices, codified at 21-A M.R.S. 1101 et seq). The pledge is not mandatory, but once a candidate voluntarily signs such a pledge, Maine has an increased informational interest in enforcing its attribution and disclaimer requirements of Section 1014 against any person involved in or acting in coordination with that candidates campaign, including, Dennis Bailey. Furthermore, because there is no penalty for a candidate violating the pledge, the only way a candidate is held accountable for a violation of the pledge is that the signed code forms are accepted by the Commission and retained as public records. This allows the public to determine for itself when the candidate has violated the pledge. Thus, in order for the signed pledge forms to have the governments intended effect, the attribution and disclaimer

At least two members of the Supreme Court have identified a compelling governmental interest in promoting a civil and dignified level of campaign debate. See McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 382 (1995) (Scalia, J. dissenting). Justice Scalia, joined by Justice Rehnquist presciently cautioned against any extension of a constitutional protection for anonymous negative campaign advertisements: Observers of the past few national elections have expressed concern about the increase of character assassination-mudslinging is the colloquial term-engaged in by political candidates and their supporters to the detriment of the democratic process. Not all of this, in fact not much of it, consists of actionable untruth; most is innuendo, or demeaning characterization, or mere disclosure of items of personal life that have no bearing upon suitability for office. Imagine how much all of this would increase if it could be done anonymously. The principal impediment against it is the reluctance of most individuals and organizations to be publicly associated with uncharitable and uncivil expression. McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 382-83 (1995) (Scalia, J. dissenting). Furthermore, in an 8-1 decision the majority in Citizens United effectively adopted this portion of the McIntyre dissent. Citizens United, 130 S. Ct. at 915 (for communications that refer[] to [a candidate] by name shortly before a primary and contained pejorative references to her candidacy [on-speech attributions and disclaimers] provide the electorate with information, and insure that the voters are fully informed about the person or group who is speaking. Identification of the source may be required as a means of disclosure, so that the people will be able to evaluate the arguments to which they are being subjected.) (internal quotations and citations omitted).

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requirement of Section 1014 must be enforced with respect to professional campaign consultants who are paid $68,000 to manage the press communications of two candidates for governor. A candidate for the office of governor who signs a pledge to follow the Maine Code of Fair Campaign Practicesincluding in this case both Rosa Scarcelli and Shawn Moodymakes the following pledges (among others): I shall not participate in and I shall condemn defamation of and other attacks on any opposing candidate or party that I do not believe to be truthful, provable and relevant to my campaign. I shall not use or authorize and I shall condemn material relating to my campaign that falsifies, misrepresents or distorts the facts, including, but not limited to, malicious or unfounded accusations creating or exploiting doubts as to the morality, patriotism or motivations of any party or candidate. I shall promptly and publicly repudiate the support of any individual or group that resorts, on behalf of my candidacy or in opposition to that of an opponent, to methods in violation of the letter or spirit of this code. 21-A M.R.S. 1101(2). The term any opposing candidate includes all candidate[s] for the office of Governor whether they are a primary candidate or a general election candidate for that office. 21-A M.R.S. 1101(2); 21-A M.R.S. 1(5). Both candidates for whom Bailey worked signed this pledge. JSMF 20,90. The existence of the signed pledges by the two candidates who were paying Bailey tens of thousands of dollars to manage the media communications for their campaign makes enforcement against Bailey particularly important. The facts suggest that Scarcelli was aware of the (if not directing) the work being done by Bailey and Rhoads, and that Shawn Moody had no idea that his only paid campaign staff (Bailey) was involved. In an interview with the Commission, Shawn Moody stated that, consistent with the pledge he signed, he would not have condoned a negative website like the Cutler Files if he had known about it. JSMF 163. In the absence of the Commission enforcing Section 1014 against a paid political consultant to 18

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the Shawn Moody campaign, Moody would have (and did have) no way to comply with his pledge. In the absence of enforcing Section 1014 against a paid consultant to the Scarcelli campaign, the public would have no way to hold Scarcelli accountable for her failure to comply with her pledge. Again, this is particularly true in this case because Bailey, Rhoads and Scarcelli all provided false or misleading statements about their involvement to the public.7 D. Applying Section 1014 to Dennis Bailey Is Constitutional Because Bailey Gave Up Any Interest in Anonymous Campaign Communication About Cutler By Accepting $68,000 to Manage The Communication of Two Competing Gubernatorial Candidates Although the governments interest in enforcing Section 1014 may decrease when the name and address of the author add little, if anything, to the reader's ability to evaluate the document's message, McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 348-49, 115 S. Ct. 1511, 1520 (1995), Bailey cannot maintain an as-applied or a de minimus challenge under McIntyre because he was being paid tens of thousands of dollars to handle the media communications of two competing gubernatorial campaigns. Both Bailey and the candidates for whom he worked were public figures within the gubernatorial campaign. Therefore, his name and address would have served as a barometer for political spin and added much to the reader's ability to evaluate the document's message. NOM I, 649 F.3d at 57; cf. McIntyre, 514 U.S. at 348-49.

Scalias warnings in McIntyre, about how much character assassination-mudslinging would increase if it could be done anonymously and how candidates might even engage in dirty tricks and anonymously attack themselves with the hope and expectation that it will be attributed to, and held against, the other side, McIntyre, 514 U.S. at 382-83 (Scalia, J. dissenting), becomes even more prescient when compared to the actual methodology used by Dennis Bailey and Thomas Rhoads in the Cutler Files. Scalias comments were made in contemplation of a two-candidate election. In this multi-candidate election, the Cutler Files authors (agents of a Democratic candidate and an Independent candidate) attempted to target those who might be swayed into believing the anonymous character assassination and mudslinging against Cutler and simultaneously mislead those who might be turned off by the really tasteless attack into believing that the authors of the website were from the Republican party. For example, part of the language of the site stated that Cutler calls himself an independent, even claims to have once been a Republican. But a lifetime of working for big name Democrats, at a Democratic law firm and supporting and contributing to Democratic causes and candidates including Barack Obama shows otherwise. JSMF 129, 138-145. This comment takes on additional meaning when it is apparent that its authors were Democrats.

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Any as-applied claim to an attribution requirement must take into account the character or strength of the author's interest in anonymity. McIntyre, 514 U.S. at 351. Dennis Bailey, as a member of the control group of both Rosa Scarcellis and Shawn Moodys gubernatorial campaigns, and as a paid consultant thereto, necessarily gives up his interest in anonymity in regard to any communication he disseminates attacking other candidates for the same public office. See Brown v Socialist Workers '74 Campaign Committee, 459 US 87, 111-12 (1982) (O'Connor, J., concurring in part and dissenting in part) (Once an individual has openly shown his close ties to the organization by campaigning for it, the individuals privacy and anonymity concerns are reduced and the governmental concerns are greatest precisely for the actions of campaign workers that might improperly influence voters.); State v. Petersilie, 432 S.E.2d 832, 842 (N.C.,1993) (In the context of a campaign it is necessary for accusers of candidates to identify themselves, even if they speak the truth, in order for the electorate to be able to assess the accusers' bias and interest.); Seegmiller v. KSL, Inc., 626 P.2d 968, 973-74 (Utah, 1981)(information concerning public officials and public figures is more likely to be relevant in the decision-making process of self-government, and it may be assumed that one who forsakes the anonymity of private life and enters the limelight of the public arena is prepared to engage in a full-blown discussion of public issues with the attendant personal risks. No such assumption is appropriate with respect to a private figure.); Buchanan v. Associated Press, 398 F Supp 1196 (1975, DC Dist Col) (paid consultant to a campaign is a public figure for issues relating to that campaign); See also, Time Inc. v. Hill, 38 US 374, 384 n. 8 (recognizing the rule that a public figure is subject to the often searching beam of publicity and that, in balance with the legitimate public interest, the law affords his privacy little protection.")

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For all of the above reasons, the Court should enter summary judgment against Bailey on his Counts I and IV, regarding his as-applied First Amendment claims. III. THE ATTRIBUTION REQUIREMENTS OF 21-A M.R.S. 1014 ARE CONSISTENT WITH THE EQUAL PROTECTION CLAUSE AS APPLIED TO DENNIS BAILEY_(COUNT III) The theory for Baileys Equal Protection Claim is not clear from the pleadings, but the Supreme Court has upheld an identical news story exemption under an equal protection challenge. Austin, 494 U.S. at 666-68 overruled in part by Citizens United, 130 S. Ct. 876. The Eight Circuit has noted that this equal protection holding is still controlling: In Citizens United, the Supreme Court did not explicitly overrule the Court's equal protection holding in Austin v. Mich. Chamber of Commerce, 494 U.S. 652, 110 S.Ct. 1391, 108 L.Ed.2d 652 (1990), overruled in part by Citizens United, 130 S.Ct. at 913. Because the Supreme Court has instructed courts to wait for it to overrule its own decisions, see Agostini v. Felton, 521 U.S. 203, 23738, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997), the district court did not abuse its discretion in determining Minnesota Citizens is unlikely to win on the merits of [the equal protection] claim. Minnesota Citizens Concerned for Life, Inc. v. Swanson, 640 F.3d 304, 323 (8th Cir. 2011) (Riley, J. concurring), reh'g en banc granted, opinion vacated (July 12, 2011). See also Citizens United, 130 S. Ct. at 923 (Roberts, J. concurring) (noting that as a matter of legislative grace the law currently grants a favored position to media corporations). Citizens United also rejected a claim that the law was underinclusive because it requires disclaimers for broadcast advertisements but not for print or Internet advertising. noting [w]e rejected these arguments in McConnell, supra, at 230-231, 124 S.Ct. 619. And we now adhere to that decision as it pertains to the disclosure provision). Citizens United, 130 S. Ct. at 915 (majority opinion). Because Maines law does not unduly burden a fundamental right to speech, NOM I, 649 F.3d at 61 (The requirements are minimal, calling only for a statement of whether the message was authorized by a candidate and disclosure of the name and address of the person who made or financed the communication), the Court must apply rational basis scrutiny. Such distinctions 21

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among media entities are routinely upheld by the courts. In re Grand Jury Proceedings, 810 F.2d 580, 586-87 (6th Cir. 1987) (statutory distinctions between types of media to which a reporters shield law applies does not violate equal protection). Medlock v. Leathers, 311 Ark. 175, 178, 842 S.W.2d 428, 430 (1992) (unequal taxation between different types of media entities does not violate equal protection). Furthermore, even if the Court applies the same heightened level of scrutiny as it applies to the First Amendment claims, the Commissions interpretation of the news story exemption as only reaching periodical publications is substantially related to the governmental interests because the periodicity of the publication provides a barometer for political spin and aids the reader's ability to evaluate the document's message. NOM I, 649 F.3d at 57. Indeed, Federal courts have already rejected the position put forth by the Plaintiff that essentially all communications published on the internet should be subject exempt from campaign finance laws. See Shays v. FEC, 337 F. Supp. 2d 28, 65 (D.D.C. 2004), affd. 414 F.3d 76 (D.C. Cir. 2005). The Court should therefore enter summary judgment against Bailey on his Count III. IV. THE COMMISSIONS INTERPRETATION OF AND APPLICATION OF MAINES CAMPAIGN FINANCE LAWS ARE CONSISTENT WITH THE PLAIN LANGUAGE OF THE STATUTE AND ENTTITLED TO DEFERENCE (COUNT II AND V) Determining whether Bailey is entitled to the press exemption is a matter of statutory interpretation. In a statutory challenge to agency action under Maines APA, this Court acts as an intermediate appellate tribunal reviewing an agency action. Me. R. Civ. P. 80-C.; 5 M.R.S.A. 11007. Appellate review is limited to whether the Commission abused its discretion, committed an error of law, or made findings not supported by substantial evidence on the whole record. Friends of Lincoln Lakes v. Bd. of Envtl. Prot., 2010 ME 18, 12-13, 989 A.2d 1128,

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1133; Questions of statutory interpretation are reviewed de novo. Id. The court upholds the plain meaning of a statute, but when statutory terms are ambiguous, the Court defers to the agencys interpretation of a statute that is within its area of expertise unless the interpretation is unreasonable. Allied Resources v. Dept of Public Safety, 2010 ME 64, 20-21, 999 A.2d 940. Particular deference is given when the legislature has expressly imposed upon an agency the duty to make a statute operative. Me. Assn of Health Plans v. Superintendent of Ins., 2007 ME 69, 42, 923 A.2d at 929-30. Maines definition of expenditure for purposes of all the Campaign Finance Laws, including Section 1014, [d]oes not include: [a]ny news story, commentary or editorial distributed through the facilities of any broadcasting station, newspaper, magazine or other periodical publication, unless the facilities are owned or controlled by any political party, political committee, candidate or candidate's immediate family. 21-A M.R.S. 1012(3)(B)(1). In order to qualify for this exception, Bailey would need to make three evidentiary showings: (1) The Cutler Files was distributed through the facilities of [a] periodical publication; (2) Those facilities were not owned or controlled by any candidate or candidates immediate family; and (3) The Cutler Files was a news story, commentary or editorial. Bailey did not make any of these showings before the Commission, nor can he on the undisputed facts in this case. It should be noted that neither of the first two showings can be made in the context of an anonymous website that does not disclose who owns or controls the distribution of the exempt news story, commentary or editorial. In other words, a press entity attempting to qualify for this exception cannot do so anonymously.8

At the federal level, FEC actually has separate administrative proceedings to determine whether a person or entity qualifies for the press exemption. [Consider citing to FEC opinions]

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1.

The Cutler Files was Not Distributed Through the Facilities of a Periodical Publication The plain language of the statue applies the attribution and disclaimer provisions to

publicly accessible sites on the internet unless they qualify as periodical publications, and there is substantial evidence in the administrative record to support the Commissions findings that [t]he Cutler Files website did not have any of the indicia of a periodical publication that may be exempted from the definition of expenditure in 21-A M.R.S. 1012(3)(B)(1). 2. Distribution of the Communication Disseminated through the Cutler Files Website was Owned or Controlled by the Candidate Rosa Scarcelli and/or Her Husband Thomas Rhoads Bailey cannot show that the distribution of the Cutler Files was not controlled by a candidate or her immediate family.9 Under Maines Campaign Finance law, the term Candidate means any person who has filed a petition under either sections 335 and 336 [petition for nomination by primary election] or sections 354 and 355 [general election petition] and has qualified as a candidate by either procedure. 21-A M.R.S. 1(5). Under either procedure each person becomes a candidate for Governor as defined by Maine law. Compare 21-A M.R.S. 335(5)(A) with 354(5)(B). See also. 21-A M.R.S. 1017 and 1101 (referring to each as a candidate for the office of Governor.). Although the financial reporting requirements for a candidate for the office of Governor may change after losing a primary, see 21-A M.R.S. 1017(2) (E) and (F), 1017(9), nothing in the law provides that a person ceases to be a candidate within the meaning of the press exemption. The undisputed facts show that the Rosa for Maine campaign did not officially terminate until December 2010, well after the period in which the Cutler Files was disseminated.

This issue was not reached by the Commission because it concluded that the periodical publication criterion had not been met. If the court determines that the Cutler Files is a periodical publication the court should consider whether a remand to the agency is necessary to determine whether the Cutler Files was owned or controlled by Scarcelli or Rhoads.

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The undisputed facts in this case show that candidate Scarcelli was sending Bailey emails stating that we need to start blogging all the goods. The undisputed record also shows that the candidates husband, Thom Rhoads worked closely with Bailey on all aspects of the websites dissemination, including its content, and the strategy and timing of its release. Therefore, even if the Cutler Files might otherwise be subject to a press exemption, the level of control of the candidate Scarcelli and/or her husband Thom Rhoads. 3. The Cutler Files Was Not a News Story, Commentary or Editorial. Even if Bailey could make the first two showings, the Supreme Court has held that communications similar to the Cutler Files do not qualify as a news story, commentary or editorial when the communications are not published as part of the organizations proper press function or when the communication has a similarity to the express advocacy of campaign advertising. So for example, in FEC v. Massachusetts Citizens for Life, 479 U.S. 238 (1986), the Court held that a special edition newsletter of a nonprofit pro-life corporation did not qualify as a proper press function, despite the organizations regular periodic publication of a newsletter. The court listed several criteria, or considerations of form that indicated that the non-periodic publication was not a proper press function: It was not published through the facilities of the regular newsletter, but by a staff which prepared no previous or subsequent newsletters. It was not distributed to the newsletters regular audience, but to a group 20 times the size of that audience, most of whom were members of the public who had never received the newsletter. No characteristic of the Edition associated it in any way with the normal MCFL publication. The MCFL masthead did not appear on the flier and, despite an apparent belated attempt to make it appear otherwise, the Edition contained no volume and issue number identifying it as one in a continuing series of issues. Id. at 250. Even assuming that the blog published by Bailey could meet the first two requirements of the news story exemption, the Cutler Files could not. The Cutler files was not distributed to Baileys regular audience, it did not contain any characteristic that associated it in 25

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any way with any normal publication that Bailey produced. It did not contain Saavy Inc.s or Baileys masthead, nor did it identify itself as one in a continuing series of issues. Indeed, it only appeared during the two months immediately before the gubernatorial election, and it has not published any content before or since that time. Under the Massachusetts Citizens for Life criteria, it was not part of Baileys proper press function- even assuming Bailey had a proper press function. Nor was it a news story: it was a negative political advertisement. The Supreme Court has rejected the idea that a communication dedicated to the electability of a particular candidate can be characterized as a news story. In Citizens United, the court found that a selfstyled documentary film was the functional equivalent of express advocacy, and therefore the equivalent of a political advertisement: The movie, in essence, is a feature-length negative advertisement that urges viewers to vote against Senator Clinton for President. In light of historical footage, interviews with persons critical of her, and voiceover narration, the film would be understood by most viewers as an extended criticism of Senator Clinton's character and her fitness for the office of the Presidency. The narrative may contain more suggestions and arguments than facts, but there is little doubt that the thesis of the film is that she is unfit for the Presidency. The movie concentrates on alleged wrongdoing during the Clinton administration, Senator Clinton's qualifications and fitness for office, and policies the commentators predict she would pursue if elected President. . Citizens United argues that Hillary is just a documentary film that examines certain historical events. Brief for Appellant 35. We disagree. The movie's consistent emphasis is on the relevance of these events to Senator Clinton's candidacy for President. . As the District Court found, there is no reasonable interpretation of Hillary other than as an appeal to vote against Senator Clinton. Under the standard stated in McConnell and further elaborated in [Federal Election Comm'n v. Wisconsin Right to Life, Inc., 551 U.S. 449, 127 S.Ct. 2652, 168 L.Ed.2d 329 (2007)], the film qualifies as the functional equivalent of express advocacy. Citizens United v. Fed. Election Comm'n, 130 S. Ct. 876, 890, 175 L. Ed. 2d 753 (2010). Just like the movie described above, the Cutler Files was understood by the Commission and would

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be understood by most views as an extended criticism of Eliot Cutlers character and [his] fitness for the office of the [Governor]. The Cutler Files consistent emphasis is on the relevance of the information and historical events to Eliot Cutlers candidacy for Governor. For all of the above reasons, the Court should enter judgment against the Plaintiff on Count II. In addition, the record shows that the Plaintiff was never fined solely for any violation that he corrected within ten days of receiving notice from the Commission. Therefore, the Court should enter judgment against the Plaintiff on Count V. CONCLUSION For all of the forgoing reasons, this Court should enter summary judgment in favor of the Commission and Defendant-Intervenor on Counts I, II, III, IV, and V of the Complaint.

Dated: February 8, 2011

/s/ Melissa A. Hewey Melissa A. Hewey, Bar No. 3587 David M. Kallin, Bar No. 4558 Drummond Woodsum 84 Marginal Way, Suite 600 Portland, ME 04101 207-772-1941

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CERTIFICATE OF SERVICE I hereby certify that on February 8, 2012, I electronically filed the Motion for Summary Judgment with Incorporated Memorandum of Law and the Joint Statement of Material Facts with attachment with the CM/ECF system, which will send notification to all counsel of record. /s/ Melissa A. Hewey

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