U.S. District Court Judge Catherine Eagles has denied N.C. Attorney General Josh Stein’s attempt to block prosecution against him in connection with a state law against campaign lies. The decision paves the way for the Wake County district attorney to take a charge against Stein to the grand jury.

“The plaintiffs are not likely to succeed on the merits of their facial constitutional claim,” Judge Catherine Eagles wrote Tuesday in explaining her decision. Eagles denied Stein’s request for a preliminary injunction against Wake D.A. Lorrin Freeman’s office. Eagles also ended the temporary restraining order she granted to Stein on July 25.

Stein had filed suit in federal court July 21, shortly before Freeman’s office was scheduled to present a charge to the Wake County grand jury. Stein’s suit seeks to have a 1931 state law declared unconstitutional.

N.C. Gen. Stat. § 163-274(a)(9), declares it unlawful, as a Class 2 misdemeanor, “For any person to publish or cause to be circulated derogatory reports with reference to any candidate in any primary or election, knowing such report to be false or in reckless disregard of its truth or falsity, when such report is calculated or intended to affect the chances of such candidate for nomination or election.”

“The statute criminalizes false defamatory speech about public officials made with actual malice; such a statute is constitutionally permissible,” Eagles wrote in her 17-page order. “Assuming a more exacting level of scrutiny applies because the statute is directed to political speech, the statute advances compelling state interests in protecting against fraud and libel in elections and
is narrowly tailored to serve those interests.”

That opinion marked a change for Eagles. In granting a temporary restraining order for Stein and fellow plaintiffs on July 25, Eagles had written that Stein had “shown a likelihood of prevailing on the merits.”

Now the judge agrees with Freeman’s argument that the law can withstand Stein’s legal challenge.

“Because § 163-274(a)(9) is a criminal libel law that prohibits false defamatory speech made with actual malice and withstands scrutiny appropriate for restrictions on false defamatory political speech, the plaintiffs are unlikely to succeed on the merits of their constitutional claim,” Eagles wrote Tuesday.

“The statute is narrowly tailored to promote compelling state interests in protecting candidates for office from false defamatory statements, protecting governmental processes from fraud, and protecting elections from being undermined by ‘those unscrupulous enough and skillful enough to use the deliberate or reckless falsehood as an effective political tool,’” Eagles added.

“False malicious defamatory speech can be ‘used as an effective political tool to unseat the public servant or even topple an administration’ and can lead to volatile, unstable, and even violent results ‘at odds with the premises of democratic government and with the orderly manner in which economic, social, or political change is to be effected,'” Eagles concluded. “Because § 163-274(a)(9) is a criminal libel law that falls within a category of speech long subject to appropriate content-based restrictions; … and is appropriately narrowed to address legitimate and substantial governmental and public interests and to provide breathing room for protected speech, the plaintiffs’ constitutional claim that § 163-274(a)(9) facially violates the First Amendment is not likely to succeed on the merits.”

The dispute dates back to Stein’s 2020 re-election campaign. Stein, a Democrat, faced a challenge from Forsyth County District Attorney Jim O’Neill, a Republican.

The two clashed during the campaign over rape kits used to help identify and prosecute offenders. Stein and O’Neill blamed each other for a backlog of untested kits.

Stein ran a TV ad, titled “Survivor,” featuring Juliette Grimmett, a sexual assault survivor who worked for Stein at the N.C. Department of Justice. At one point in the 30-second ad, Grimett criticized O’Neill.

“When I learned that Jim O’Neill left 1,500 rape kits on a shelf leaving rapists on the streets, I had to speak out,” Grimmett said in the ad. She is one of the plaintiffs in the federal case, along with the Stein campaign and the company that prepared the campaign ad.

O’Neill cited the state criminal libel law in a complaint to the N.C. State Board of Elections. The board investigated O’Neill’s complaints and turned over its findings to Freeman’s office in July 2021. The SBI also launched an investigation.

On July 7 this year, Freeman’s office alerted the Stein campaign that it planned to present a charge connected to the criminal libel law to the grand jury. Stein filed his suit two weeks later. Published reports suggest the attorney general secured his restraining order against Freeman less than an hour before the Wake grand jury could have heard the charge.

Misdemeanor charges in North Carolina face a two-year statute of limitations. Since the disputed TV ad stopped airing in October 2020, time is running out for Freeman’s office to proceed with charges against the Stein campaign, Grimmett, or any other parties.

Carolina Journal will update this developing story.