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No one has been charged in the so-called John Doe probe, Wisconsin's version of a grand jury investigation in which information is tightly controlled, but questions about the investigation have dogged Walker for months.
Barring an appeal to the U.S. Supreme Court, the ruling makes Walker's campaign that much smoother as he courts voters in early primary states.
"Today's ruling confirmed no laws were broken, a ruling that was previously stated by both a state and federal judge," said Walker's spokeswoman Ashlee Strong. "It is time to move past this unwarranted investigation that has cost taxpayers hundreds of thousands of dollars."
The case centers on political activity conducted by Wisconsin Club for Growth and other conservative organizations during the 2012 recall, which was spurred by Democrats' anger over a Walker-authored law that effectively ending collective bargaining for most public workers.
The justices cited free speech in effectively tossing out the case, ruling state election law is overbroad and vague in defining what amounts to "political purposes."
Justice Michael Gableman, part of the court's conservative majority, praised the groups for challenging the investigation.
"It is fortunate, indeed, for every other citizen of this great State who is interested in the protection of fundamental liberties that the special prosecutor chose as his targets innocent citizens who had both the will and the means to fight the unlimited resources of an unjust prosecution," Gableman wrote in the majority opinion.
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