The city dismissed a citation Wednesday morning against former Craig City Council candidate Francisco Reina.
Reina, who ran for the April council election, was cited for violating the city's charter by spending more than $500 of his own money on his failed campaign.
He appeared Wednesday morning in municipal court. However, the city decided to dismiss the citation.
In another twist, the American Civil Liberties Union of Colorado filed suit against the city late Monday afternoon in Moffat County District Court, according to a news release from the ACLU.
The suit asks the court to declare the city's spending provision a violation of the First Amendment that cannot be enforced.
The ACLU filed the legal action on behalf of Reina.
"The First Amendment right of free expression protects the right of candidates for public office to spend their own money to promote their views and inform the public about their candidacy," said Ed Ramey, an ACLU Cooperating Attorney who filed the legal challenge.