Key Points

  • The Second Circuit, 2-1, dismissed as moot American Future Fund's appeal from the denial of a preliminary injunction against New York's independent expenditure disclosure law.
  • The majority held that the injury asserted in the injunction motion was tied to the 2025 New York City mayoral election, which has passed, so the court could grant no effectual relief.
  • Relying on Independence Party of Richmond County v. Graham, the majority held that the capable-of-repetition-yet-evading-review exception does not apply because the Fund's underlying action remains pending in the district court.
  • Judge Menashi dissented, arguing that the appeal is live, that the majority created a new rule and a circuit split, and that the ads are protected issue advocacy.
  • The panel directed that any appeal from a future preliminary-injunction ruling on the same or substantially similar ads, or related emergency motions, return to the same panel.

A divided federal appeals court on Friday threw out a political group's bid to run advertisements attacking the Democratic Socialists of America without registering under New York's campaign disclosure law. The court held that the passing of the 2025 New York City mayoral election had made the appeal moot, meaning it could no longer grant the group effective relief.

The 2-1 decision of the U.S. Court of Appeals for the Second Circuit, written by Circuit Judge Richard J. Sullivan and joined by Judge Wesley, leaves American Future Fund Inc. without an appellate ruling on whether the state may treat its ads as aimed at Zohran Mamdani, the DSA-affiliated candidate who won the race. Judge Menashi dissented, writing that the majority had announced a new rule at odds with other circuits.

The majority held that the doctrine for disputes "capable of repetition, yet evading review"—an exception that lets courts decide recurring controversies that end too quickly to be fully litigated—does not save an appeal from a denied preliminary injunction while the underlying lawsuit remains pending in the trial court. The Fund's First Amendment challenge now returns to U.S. District Judge Jennifer H. Rearden of the Southern District of New York.

New York's independent expenditure disclosure law requires groups that spend money on elections to register with the State Board of Elections and to make regular disclosures. It reaches spending that advocates for or against a "clearly identified candidate," one whose identity "is apparent by unambiguous reference." The Fund challenged a state regulation applying that test, arguing it sweeps in generic issue advocacy.

Five of the Fund's proposed ads criticize socialism and the DSA without naming any candidate or election. One says the group "seeks to control the future of NYC" and ends, "The only way to stop them is to vote." The state threatened enforcement because the only citywide DSA-affiliated candidate in 2025 was Mamdani. A state lawyer told the district court that the ads "can only be reasonably viewed in the lead-up to this mayoral election as advocating for voters to vote against candidate Mamdani," the dissent recounts.

Judge Rearden denied the Fund's motion for a preliminary injunction, an order that would have blocked enforcement during the case, finding the Fund unlikely to succeed. The Fund appealed, and later asked her to stay the case after the state moved to dismiss its complaint.

Writing for the majority, Judge Sullivan relied on the Fund's own filings. The group had told the district court it planned "to speak on these political issues in the coming weeks," and it emailed the court that a failure to rule before the election would be "a constructive denial of the motion." The injury the motion asserted was therefore tied to the 2025 race, the majority held. If the Fund faces a new harm in a different election, Judge Sullivan wrote, "the required course is a new motion addressing that harm, not appellate resuscitation of an old one."

The majority said it was bound by the Second Circuit's 2005 decision in Independence Party of Richmond County v. Graham, which held that issues raised in a preliminary-injunction appeal do not evade review when the same legal questions remain before the trial court. "Here the district court will reach it, in the ordinary course, as it would have had we never heard this appeal," Judge Sullivan wrote.

The majority also noted that the Fund never sought an injunction pending appeal under Federal Rule of Appellate Procedure 8, never filed a new injunction motion for the 2026 election, and never moved to lift the stay it had requested. "So the crisis of timing highlighted by the dissent was within the Fund's power to control," Judge Sullivan wrote. A preliminary injunction, he added, "is a scalpel to be used surgically, not a Swiss Army knife that can be switched up and altered to suit the shifting legal strategies of litigants."

Judge Menashi wrote that the majority "dismisses AFF's appeal as moot based on an argument that the state never made and to which AFF never had the opportunity to respond." He concluded that the Fund "sought relief for the pendency of the lawsuit rather than only for the 2025 election." Circuit precedent had refused the exception only when the underlying claims remained live, he wrote: "This is the first time our court has said that it does not matter whether the underlying claims are moot."

He cited a 2024 Ninth Circuit decision, Smith v. Helzer, which applied the exception in a similar appeal over Alaska's campaign-finance rules. The majority's conclusion "is wrong and creates a split with those circuits that have applied the exception to preliminary injunction appeals," he wrote. The majority answered in a footnote that the split claim was "even more far-fetched," because the Ninth Circuit had not identified the relevant issue.

Judge Menashi would also have ordered the injunction. The ads are issue advocacy, he wrote, because they "urge the audience to vote but do not tell the audience for whom to vote." The state had said the Fund had ample time to bring a new challenge before the 2026 elections, he wrote, but those "primary and general elections have already passed since the state made this representation, and this appeal has only now been resolved."

Lawyers for the Fund included Susan L. Greene of Holtzman Vogel Baran Torchinsky & Josefiak PLLC. The state was represented by Solicitor General Barbara D. Underwood of the New York Attorney General's office.

The majority said the Fund's arguments "deserve full consideration on the merits" in the district court, where the Fund may move to lift the stay. Citing "narrow and compelling circumstances," the panel directed that any appeal from a future preliminary-injunction ruling on the same or substantially similar ads, or any related request for emergency relief, return to the same three judges. Any appeal from a final judgment will go to a new panel in the ordinary course.