Republican mayoral hopeful Joseph Lhota could receive a huge boost in support for his campaign against Democratic rival, Bill de Blasio.

The U.S. Court of Appeals for the Second Circuit Thursday ordered a preliminary injunction blocking enforcement of New York’s $150,000 limit on individual donations to independent political action committees.

The order, a reversal of a decision made last week by Southern District Judge Paul Crotty (See Profile), is a win for Republican fundraisers who claim they are ready to pour money into the fight to succeed Mayor Michael Bloomberg on Nov. 5. Lhota is trailing Democrat Bill de Blasio by a large margin, according to recent polls.

Fundraiser Crag Engle of Arent Fox in Washington D.C. had filed the lawsuit on Sept. 25 on behalf of the newly formed New York Progress and Protection PAC (NYPPP), claiming it was an “independent, expenditure-only” political committee eligible to receive contributions from individuals in excess of $150,000—the limitation set by N.Y. Election Law §§14-114(8) and 14-126.

The NYPPP submitted an affidavit from a Republican donor in Alabama, Shaun McCutcheon, who said he was ready to donate $200,000 to the committee if an injunction was issued on the basis of the NYPPP claim that the restriction violate the First Amendment.

Attorney Michael Carvin of Jones Day in Washington argued for NYPPP that the $150,000 limit violates the First and Fourteenth amendments to the U.S. Constitution as interpreted by the Supreme Court’s groundbreaking decision in Citizens United v. FEC, 558 U.S. 310 (2010).

But on Oct. 17, Crotty said he would not entertain what he termed a last-minute challenge to the restriction, saying it would sow confusion and be unfair to those who have had to abide by the limit.

Crotty also said there was a real possibility that the Republican Super PAC would not meet the definition of an “independent” political action committee because it was formed to funnel money to a single candidate (NYLJ, Oct. 18).

Carvin, convinced that Crotty’s decision was an outlier because 27 federal judges around the country had ruled that restrictions like the one in New York violate the Constitution, filed an emergency appeal with the Second Circuit.

On Thursday morning, Second Circuit Judges Dennis Jacobs (See Profile) and Raymond Lohier (See Profile), and Southern District Judge John Koeltl (See Profile), sitting by designation, reversed Crotty in New York Progress and Protection PAC v. Walsh, 13-3889.

Writing for the court, Jacobs said NYPPP has “a substantial likelihood of success on the merits,” because the U.S. Supreme Court held in Citizens United “that the government has no anti-corruption interest in limited independent expenditures.”

“It follows that a donor to an independent expenditure committee such as NYPPP is even further removed from political candidates and may not be limited in his ability to contribute to such committees,” Jacobs said. “All federal circuit courts that have addressed this issue have so held.”

Jacobs said that “Few contested legal questions are answered so consistently by so many courts and judges,” so the lower court erred in not analyzing NYPPP’s likelihood of success on the merits.

The NYPPP had a mandamus petition teed up at the circuit seeking to order Crotty to act when Crotty issued his decision last week, setting the stage for the emergency appeal.

Jacobs disagreed with the lower court’s concern over “rushing to judgment.”

Crotty had said the NYPPP waited to bring the challenge and then created “artificial urgency” by demanding an injunction against a law that had been on the books for three decades.

Jacobs said, “Much of the district court’s analysis of hardship focuses on the hardship to the election system arising from the timing of this suit and this motion for a preliminary injunction.”

“But as the Supreme Court has emphasized, the value of political speech is at its zenith at election time,” he said, and he quoted Citizens United as saying “A speaker’s ability to engage in political speech that could have a chance of persuading voters is stifled if the speaker must first commence a protracted lawsuit.”

As for urgency, Jacobs cited the case of Tunick v. Safir, 209 F.3d 67 (2d Cir. 2000), where the circuit upheld a judge’s injunction blocking the city from interfering with a mass nude photo shoot by artist Spencer Tunick.

Tunick treated as pressing a public display of nudity,” Jacobs said. “Political speech is not a lesser order of expression.”

Jacobs acknowledged it was true that the injunction only frees NYPPP but the concerns expressed by Crotty “are neither sufficiently severe disruptions to the election processitself nor sufficiently particularized to outweigh the irreparable harm that stems from restrictions on political speech.”

The circuit ordered Crotty to impose the injunction immediately.

Assistant Solicitor General Judith Vale argued for the state.

“Attorney General Schneiderman believes that every voter should have an equal voice in our democracy, and that New York’s campaign finance laws are essential to protecting the integrity and fairness of our elections,” said Damien LaVera, a spokesman for the attorney general. “We are deeply disappointed with this decision.”

With the election only 12 days away, the de Blasio campaign blasted the decision.

“Today’s decision will empower the right-wing billionaires, like the Koch Brothers, and Tea Party groups who support Joe Lhota to drown out the voices of New Yorkers,” Lis Smith, de Blasio’s spokeswoman, said in a statement.

Carvin said in an interview, “We’re obviously gratified the Second Circuit has joined every other circuit court in the country and recognized the facial unconstitutionality of statutes like New York’s.”

He said he was not in a position to say how much money was at stake.

“This gives us an opportunity to exercise our First Amendment rights in the mayoral election,” he said. “It’s quite late in the day but NYPPP will be making what effort it can in this limited time frame to engage in fundraising for more speech.”