The Eighth U.S. Circuit Court of Appeals struck down a 101-year-old law Tuesday that makes it a crime to make false political statements about a ballot question.

The court overturned a decision by U.S. District Judge Ann Montgomery, who dismissed the case, and the ruling could have wide implications.

"It is a huge victory because ordinary citizens can now support or oppose ballot questions, including school bond levies, without fear of being subjected to expensive litigation regarding their campaign speech," said Bill Mohrman, a Minneapolis attorney who brought the appeals court case.

The appeals court did not rule on an even older section of the Minnesota Fair Campaign Practices Act that prohibits false statements against candidates. Under Tuesday's ruling, that portion probably wouldn't survive a constitutional challenge, said Mohrman.

But Dan Rogan, an assistant Hennepin County attorney, said it was premature to conclude that the law as it deals with candidates will also be struck down.

"The implications beyond the ballot initiative are yet to be determined," he said, while also expressing dismay at the ruling.

"We are disappointed in today's decision which strikes down a Minnesota law that has been in place for more than 100 years," he said. "This law has been effective in ensuring that Minnesota has fair and honest elections and prevents fraud on citizens by prohibiting intentional lies in paid campaign material."

The defendants in the case were Blue Earth County Attorney Ross Arneson and Hennepin County Attorney Mike Freeman, who are responsible for enforcing the law. The appeals court dismissed Attorney General Lori Swanson as a defendant after her office said she would not attempt to enforce the law.

The three-judge appeals panel was composed of Lavenski Smith, of Little Rock, Ark., Duane Benton, of Kansas City, Mo., and C. Arlen Beam of Lincoln, Neb., who wrote the decision.

The panel said it was "hypocrisy" that a newspaper opinion section would be allowed to print a false statement, while a paid advertisement in the same newspaper would not be exempt from the law.

It also said it was "disingenuous" for the county attorneys and district court to say that greater leeway should be allowed for false statements in an unscripted speech, while making similar statements in a published campaign pamphlet would be illegal.

The lawsuit was brought in 2008 by two activists, Joel Brude and Ron Stoffel, and campaign committees with which they were involved, the 281 Care Committee and Citizens for Quality Education. They were working to defeat school bond levies.

Supporters of the levies claimed the activists made false statements and threatened to sue under the Fair Campaign Practices Act, according to Mohrman. Rather than wait to be sued in state court, they sued in federal court to have the statute declared unconstitutional, he said.

The statements of the 281 Committee, which defeated the levy, caused a heated response in Robbinsdale. The district superintendent called the group's comments "racist, without conscience and untruthful."

The purpose of the referendum was to raise money to maintain programs and allow more teachers to be hired to reduce class sizes. The anti-levy campaign argued that the district's problems were brought on by nonresident students.

Two levies were defeated in the Howard Lake-Waverly-Winstead district, with the help of the W.I.S.E. Citizens Committee, where money was sought for operations such as supplies and staff positions.

Bohrman said the two groups were taking a position "that goes back to the founding of this country. They opposed tax increases."

It its ruling, the appeals court said the law causes "real potential damage" by allowing a complaint to be filed during a levy campaign, "no matter the criminal prosecution down the line." Even if the allegation was false, it "likely makes the news circuit and creates a stir in the ongoing political discourse," the appeals court said.

Rogan said he did not know whether the county attorneys will appeal to the U.S. Supreme Court. "We felt like the statute struck the proper balance between the First Amendment and regulating fraudulent speech," he said.

The case has been remanded to district court by the appellate court for disposition.

"We are going to ask the court to enter a judgment in our favor and grant an injunction prohibiting the county attorneys from enforcing the statute," Mohrman said.

Erick Kaardal, who brought the case with Mohrman to the appeals court, said he knows of two previous prosecutions brought by county attorneys about 10 years ago. They were against John Knight in Hennepin County, based on Knight's alleged statement he was the only Republican in race; and Greg Copeland who allegedly made a statement in Ramsey County that he was the only abortion opponent in race.

Since 2004, such complaints have been placed under the jurisdiction of the state's administrative law judges who conduct hearings. There have been no prosecutions since then, both sides said in interviews.

Teresa Collett, a law professor at the University of St. Thomas, said she was the target of a complaint of making a false statement by another Republican, when she was running for Congress in the Fourth District's Republican primary in 2010.

She said she won her case, won the primary, but lost in the general election to incumbent Betty McCollum, the DFLer.

She called the appeals court action a good decision. "Litigation around campaign speech is not different from other types of litigation, and it can easily be used to harass an opponent," she said. "The claims were made against my campaign, were unfounded and cost me time and money that we could ill afford."

Her legal bill was $7,000, she said, "which could have spent on campaign literature."