Challenge to Hawaii’s anti-Citizens United law likely to proceed
A federal judge said she’s inclined to reject the state’s bid to dismiss a free market think tank's challenge to Act 11.
by Jeremy Yurow, Court House News, October 13, 2026
HONOLULU (CN) — Before hearing arguments Tuesday, U.S. District Judge Leslie Kobayashi told lawyers she was inclined to rule a think tank has standing to challenge Hawaii’s first-in-the-nation ban on corporate election spending.
By the end of the hearing, she also indicated she would find the law restricts political speech, though she stopped short of ruling on either side’s motions.
“What Grassroot does is, of course, the very essence of political speech,” the Barack Obama appointee said.
The Grassroot Institute of Hawaii, a nonprofit that advocates for limited government, wants Kobayashi to block Act 11 before it takes effect on July 1, 2027. The state wants the lawsuit dismissed.
Supporters cast Act 11 as a response to Citizens United v. FEC, the 2010 U.S. Supreme Court ruling that struck down limits on independent corporate spending in elections.
Rather than directly regulating campaign spending, the law rewrites Hawaii’s corporate code, stripping corporations, nonprofits, unions and other entities of the power to spend money supporting or opposing candidates or certified ballot measures. Violations can carry penalties up to dissolution.
Deputy Solicitor General Ewan Rayner spent much of the hearing arguing Grassroot could not show the law would apply to its activities. Act 11 covers spending on ballot measures only after they are certified for the ballot, he said, while much of Grassroot’s work involves advocating for measures to appear on the ballot or against their inclusion.
The group’s examples of advocacy on certified measures include a 2008 letter to the Honolulu Star-Advertiser about a rail initiative and a 2010 blog post, Rayner said.
Both, he argued, fell under the law’s exemption for news and commentary. He also pointed to this November’s ballot, which he estimated would include about 30 questions.
“Apparently Grassroot has no interest in advocating on any of those questions,” he said.
Kobayashi was skeptical. The state’s test, she suggested, would favor single-issue groups whose future advocacy is easy to predict.
“Grassroot has shown that it has this history of community involvement, exercising its First Amendment rights, being involved in political questions,” she said. “I’m a little mystified as to why that’s not enough.”
Rayner also argued Grassroot had not shown it spent money or anything of value on activity Act 11 covers. The group receives donations, he said, but does not specifically connect those funds or any paid staff time to advocacy on certified ballot measures.
Kobayashi floated dismissing the lawsuit without prejudice, which would allow Grassroot to amend it to identify the relevant expenditures. Owen Yeates, an attorney with the Institute for Free Speech representing Grassroot, said the group’s descriptions of events, interviews and mailings made the spending obvious.
“We all know the price of stamps keeps going up,” Yeates said.
Kobayashi acknowledged the state’s point but said she was still weighing how specifically Grassroot had to identify its spending.
“I think, if you look at it, there’s a general inference that they raise money, that they hold events, that they do all of these things,” she said.
On the constitutional question, the state argues Hawaii has the authority to decide what powers the corporations it creates may exercise. Citing the Supreme Court’s 2014 Hobby Lobby decision, Rayner said the state is not restricting existing rights but declining to grant corporations certain powers.
“The state is not constitutionally required to approve certain corporate purposes or grant corporate powers,” he said.
Kobayashi questioned how that reasoning applied to Grassroot, whose stated mission is to educate the public about individual liberty, economic freedom and limited government. The organization has pursued that mission since its founding in 2001.
The state’s argument might make more sense for a veterinary hospital that suddenly wanted to enter political debates, she said. Grassroot’s work is political by design.
“Whether they’re providing white papers or what have you, it all revolves around political speech,” she said. “So that’s where I’m having difficulty sort of following your argument.”
Rayner said Act 11 leaves most of Grassroot’s speech untouched, including publishing research and lobbying lawmakers. The law, he said, withholds only a specific corporate power: spending money on candidate elections and certified ballot measures.
Yeates warned the state’s theory could apply to any organization formed to engage in advocacy.
“The government, as a requirement of getting corporate existence, could say that you can’t speak about politics,” he said. “That’s a terrifying idea.”
The U.S. Chamber of Commerce has filed a separate challenge to Act 11 in federal court.
Kobayashi took both motions under advisement and did not say when she would rule.