Appeals panel blocks Wake DA's office from potentially prosecuting Attorney General Josh Stein

RALEIGH, N.C. -- A federal appeals court on Tuesday blocked the potential prosecution of North Carolina Attorney General Josh Stein or anyone else for his controversial 2020 campaign ad through a criminal libel law.

The majority of a three-judge panel of the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, granted the request by Stein's campaign committee and others associated with his campaign to prevent enforcement of the law while they sue to attempt to have the law overturned as unconstitutional.

The 2-1 decision came the day after a Wake County grand jury formally asked the district attorney's office to submit an indictment against Stein for jurors to consider. Wake County DA Lorrin Freeman said Monday that could have happened as soon as next month.

Any formal charges could harm the political future of Stein, a Democrat and possible 2024 gubernatorial candidate.

The 1931 law makes it a misdemeanor to circulate "derogatory reports" about a candidate with the intent of hurting that candidate's chances in the election.

Earlier this month, U.S. District Judge Catherine Eagles rejected a Stein campaign lawsuit seeking to have the law declared unconstitutional, saying the law was constitutionally permissible because it criminalized "false defamatory speech about public officials made with actual malice."

But Tuesday's order from the majority - U.S. Circuit Judges Toby Heytens and Albert Diaz, both appointed by Democratic presidents - argued that Stein's campaign and other lawsuit plaintiffs are likely to succeed on their challenge that the law violates First Amendment free-speech protections.

The law's language says a violation occurs when a person knows a derogatory report "to be false or in reckless disregard of its truth or falsity," the order said. So the law could actually criminalize someone who makes a true statement, according to the judges.

"Candidates running for office in North Carolina might well be chilled in their campaign speech by the sudden reexamination of a criminal libel law that has been dormant for nearly a decade - harming the public's interest in a robust campaign," the order read. Heytens was nominated to the 4th Circuit by President Joe Biden, while Diaz was the choice of President Barack Obama.

The probe stems from a complaint that Stein's Republican opponent in 2020, Forsyth County District Attorney Jim O'Neill, filed with the State Board of Elections against Stein's campaign.

O'Neill's complaint cited the law while demanding that the board investigate a political ad that accused the Republican of letting more than 1,000 rape kits go untested. O'Neill said the ad was false because police agencies, not prosecutors, are responsible for testing the kits.

Stein and his allies have claimed the ad is truthful and was designed to counter what they characterized as false statements that O'Neill made during the campaign that Stein had failed to act on more than 15,000 untested rape kits since becoming attorney general in 2017.

An attorney for Freeman, whose office took over the campaign ad investigation in 2021, has said blocking enforcement of the law could scuttle any prosecution because the statute of limitations on the misdemeanor is two years.

But the majority's order said that such an issue is at least to some extent "self-inflicted" because Freeman hasn't adequately explained why it's taken so long to bring charges.

The prevailing order directed that oral arguments on the appeal be held in December, which would likely be after the two-year prosecution window expires. It's possible, however, that the window could be extended.

Circuit Judge Allison Rushing, a President Donald Trump nominee, wrote a dissenting opinion, saying Stein's campaign, the ad production company and the woman who appeared in the ad haven't shown they are entitled to this "extraordinary relief."

"The state will forever lose its opportunity to enforce the law" if the grand jury proceedings are stopped, wrote Rushing.

Freeman said late Tuesday that she hadn't yet read the opinion. The Stein campaign said in a statement that it was pleased with the delay.

"This law is 90 years old, has never been used against any candidate, and undermines free speech in our state," the campaign said.

Freeman, also a Democrat, recused herself from the campaign ad investigation, leaving in to a senior assistant prosecutor.

Earlier Tuesday, Democratic Gov. Roy Cooper criticized the investigation and the potential prosecution as "an unprecedented repression of free speech." Stein succeeded Cooper as attorney general in 2017.