Location:
CAMPAIGNS - PUBLIC FINANCING;
Scope:
Connecticut laws/regulations; Court Cases; Background;

OLR Research Report


July 28, 2010

 

2010-R-0320

Revised

SECOND CIRCUIT'S DECISIONS IN GREEN PARTY OF CONNECTICUT V. GARFIELD

By: Kristin Sullivan, Principal Analyst

Terrance Adams, Legislative Analyst II

You asked for an analysis of Green Party of Connecticut, et al. v. Garfield, et al., 2010 U.S. App. LEXIS 14248 (2d Cir. Conn. July 13, 2010). You also want information on issues that the federal court of appeals remanded to the federal district court.

SUMMARY

In a consolidated action, the U.S. Court of Appeals for the Second Circuit considered appeals from Green Party of Conn. v. Garfield, 590 F. Supp. 2d 288 (D. Conn. 2008) (“Green Party I”) and Green Party of Conn. v. Garfield, 648 F. Supp. 2d 298 (D. Conn. 2009) (“Green Party II”). (For background on Green Party II, see OLR Report 2009-R-0332.) Plaintiffs include two minor parties operating in Connecticut—the Green and Libertarian parties—and several Connecticut-based lobbyists and state contractors. Defendants are state officials who administer Connecticut's Campaign Finance Reform Act (CFRA) and intervenor-defendants who support it (together “the state”).

On July 13, 2010, the appeals court issued two opinions, reversing in part and affirming in part, the decisions by the federal district court for the District of Connecticut in Green Party I and Green Party II. The federal district court had considered two separate constitutional challenges to the CFRA. Green Party I was a challenge to the CFRA's (1) contractor and lobbyist contribution and solicitation bans and (2) contractor disclosure requirements. (The plaintiffs did not pursue the disclosure requirements in their appeal, therefore the appeals court did not address it in its opinion.) Green Party II was a challenge to Citizens' Election Program (CEP), a part of the CFRA providing public campaign funding in the form of grants to statewide and legislative candidates for public office.

In its first decision, the appeals court considered the district court's ruling in Green Party II. In that case, the district court declared the entire CEP unconstitutional, finding that its (1) qualification and grant distribution provisions unconstitutionally burden minor party candidates' rights to political opportunity and (2) independent and excess expenditure provisions (“trigger provisions”) unconstitutionally burden the First Amendment speech rights of non-candidates, nonparticipating candidates, and their supporters (i.e., advocacy groups). The appeals court reversed the lower court's decision concerning minor party candidates and affirmed it concerning the trigger provisions.

In its second decision, the appeals court considered the district court's ruling in Green Party I. In that case, the district court upheld the CFRA's ban on certain contributions and solicitations by communicator lobbyists, state contractors, and their immediate family members. After considering the plaintiffs' arguments that these prohibitions violate their First and Fourteenth Amendment rights, the appeals court (1) upheld the ban on contributions by state contractors, principals, and their spouses and children; (2) struck down the ban on contributions by lobbyists, their spouses and children, and political committees (known as PACs) they establish or control; and (3) struck down, for both lobbyists and contractors, the ban on soliciting contributions.

Since it found only parts of the CFRA unconstitutional, the appeals court remanded to the district court the question of whether the unconstitutional provisions may be severed from the law under CGS 9-717, an issue the lower court had not considered (for information on CGS 9-717, see BACKGROUND). It indicated that the lower court should develop the record to determine how the statute applies to the split judgment.

Finally, the appeals court vacated the permanent injunction that the district court placed on the CEP in Green Party II. It instructed the lower court to “reconsider the scope of the injunctive relief necessary” in light of the decision and that court's resolution of the severability issue on remand.

CONSTITUTIONALITY OF THE CITIZENS' ELECTION PROGRAM

Under the CEP, candidates who meet one or more qualifying criteria, agree to limit their spending, and comply with other requirements are eligible to receive state grants to finance their campaigns. “Qualifying criteria” are somewhat dependent on party affiliation (i.e., major or minor party). Every candidate is required to raise a certain number of qualifying contributions from individual donors in increments of $100 or less. Minor party candidates have the additional requirement of either (1) having a member of their party receive a certain percentage of the vote in the previous general election for the same office or (2) gathering a certain number of signatures from qualified voters (i.e., the petitioning requirement).

The issues on appeal were whether the district court erred in holding the CEP unconstitutional on three counts. Specifically, the:

1. qualifying criteria and grant distribution formulae violate the First Amendment and Fourteenth Amendment rights of minor party candidates;

2. excess expenditure provisions violate the First Amendment rights of non-candidates, non-participating candidates, and their supporters (i.e., advocacy groups); and

3. independent expenditure provisions violate the First Amendment rights of non-candidates, non-participating candidates (candidates electing not to participate in the CEP), and their supporters.

The appeals court reversed the lower court's decision on count one and affirmed it on counts two and three.

Minor Party Candidates

Concerning the first count, the plaintiffs argued that the CEP's qualifying criteria and grant distribution formulae violate the constitution because they impermissibly burden the political opportunity of minor party candidates. Specifically, they argued that the:

1. “single-election qualifying criteria” (requirement that minor parties received a certain threshold vote during the last election for the same office) are so high that they effectively shut out minor party and petitioning candidates who enjoy public support;

2. “statewide qualifying criteria” (requirement that a major party's (a) candidate for governor in the last election received at least 20% of the vote or (b) membership consists of at least 20% of all registered voters in the state) substantially enhance the relative strength of major party candidates compared with minor party candidates by encouraging them to field candidates in uncompetitive, or “safe,” districts; and

3. distribution formulae, which establish the amount of money participating candidates receive, provide major party candidates financing in amounts much higher than typical past spending levels, thus slanting the playing field in their favor.

Applying strict scrutiny to the first count, the federal district court held that the CEP's qualifying criteria and grant distribution formulae violate the First Amendment and Equal Protection Clause of the Fourteenth Amendment as they relate to minor party candidates, both facially and as-applied. In its analysis, the appeals court instead applied “exacting scrutiny” and reversed the lower court's decision.

The appeals court reasoned that to determine whether a public campaign financing system unconstitutionally discriminates against minor party candidates, a court should apply the exacting scrutiny standard (i.e., intermediate scrutiny) set forth in Buckley v. Valejo, 424 U.S. 1 (1976). Exacting scrutiny requires the court to ask whether the system (1) was enacted in furtherance of a sufficiently important government interest and (2) unfairly or unnecessarily burdens a candidate's or party's political opportunity. If a system survives under this level of scrutiny, it should be upheld. If it does not, the court should “finish the line of reasoning that Buckley left unresolved and determine whether a less searching standard applies.” The party asserting the unconstitutionality bears the burden of proving it.

The appeals court held that (1) the Connecticut General Assembly enacted the CEP to further sufficiently important government interests, including eliminating improper influence on elected officials and (2) the plaintiffs failed to sufficiently show that the program reduced the strength of minor party candidates “below that attained without public financing.” Using 2008 election results, the court found that minor parties successfully reached the vote thresholds required to participate in the CEP and receive grants. It also found that minor party candidates, many running in safe districts, appeared to have faired better in 2008 than in previous years, and certainly no worse. It thus concluded that there was insufficient evidence to demonstrate that either the single- election or statewide qualifying criteria or distribution formulae unfairly or unnecessarily burden minor party candidates' political opportunity. However, the court acknowledged that the conclusions it reached may be affected by future elections.

Excess and Independent Expenditures

In counts two and three, the plaintiffs argued that the trigger provisions impose “a substantial burden on the exercise of the First Amendment Right to use personal funds for campaign speech.” Applying the strict scrutiny standard and reasoning in Davis v. Federal Election Commission, 128 S. Ct. 2759 (2008), the district court agreed. It also concluded that the state failed to show a compelling government interest to justify the burden. The appeals court affirmed the lower court's decision on both counts after first deciding that the plaintiffs had standing to raise issues regarding the trigger provisions.

With respect to standing, the appeals court found that although minor parties rarely raised enough money or ran candidates financially capable of triggering additional grants under the CEP for excess or independent expenditures, the parties sometimes cross-endorsed candidates with this capability. Thus, the court held that the parties had standing.

In its decision on the trigger provisions, the appeals court cited Davis, reasoning that the trigger provisions impose a burden “on the right of candidates and other individuals and organizations to spend personal funds for campaign speech.” Like the district court, it concluded that the state did not show a sufficiently compelling interest to justify the burden and thus, held the provisions unconstitutional. It rejected the state's argument that promoting participation in the CEP is compelling.

The appeals court noted that the Ninth Circuit recently upheld a matching funds provision of Arizona's public financing system that is similar to the CEP's excess expenditure provision, McComish v. Bennett, 605 F.3d 720 (9th Cir. 2010). However, the court indicated that it was not persuaded by the Ninth Circuit's opinion, emphasizing that it has been stayed by the U.S. Supreme Court pending a petition for a writ of certiorari.

Remand

In addition to reversing the lower court's decision on count one and affirming it on counts two and three, the appeals court remanded a portion of the case to the district court, asking that court to consider the severability of the trigger provisions from the remainder of the CEP and CFRA. The remand directs the district court to “develop the record” to determine the effect of CGS 9-717 in light the court's decision in the first challenge. It further directs the district court to “conduct any other proceedings,” consistent with the decision that may be “appropriate or necessary.”

Injunction

In Green Party II, the district court permanently enjoined the state from operating the CEP based on its decision concerning the program's constitutionality. But since both parties appealed and agreed on consent to an expedited process, the court stayed the injunction. It thus allowed the CFRA, including the CEP, to remain in effect pending resolution of the appeals.

The appeals court vacated the permanent injunction and instructed the district court to “reconsider the scope of the injunctive relief necessary” in light of the decision and that court's resolution of the severability issue on remand.

CONSTITUTIONALITY OF CONTRACTOR AND LOBBYIST SOLICITATION AND CONTRIBUTION BANS

CFRA's ban on contributions and solicitations by contractors covers state contractors, prospective state contractors, their principals, and their spouses and dependent children. For lobbyists, the contribution ban covers communicator lobbyists, their spouses and dependent children, and PACs they establish or control. The solicitation ban additionally covers agents of communicator lobbyist and their PACs (see OLR Report 2008-R-0366). The contractor ban is also branch-specific. For example, a contractor that does business with only the executive branch is allowed to make contributions to legislative candidates. However, prequalified contractors cannot contribute to any candidates for state office.

In Green Party I, the plaintiffs brought a First Amendment challenge to the CFRA's ban on contributions and solicitations by lobbyists and state contractors. Using the closely drawn standard, the district court found that the bans (1) served a sufficiently important government interest (the prevention of actual and perceived corruption) and (2) were closely drawn to that interest, meaning that they did not violate the plaintiffs' first amendment rights.

In its decision concerning Green Party I, the appeals court considered the district court ruling granting the state summary judgment and upholding the contribution and solicitation bans for both contractors and lobbyists. It (1) upheld the ban on contributions by contractors, principals, and their spouses and children; (2) struck down the ban on contributions by lobbyists, their spouses and children, and PACs they establish or control; and (3) struck down, for lobbyists and contractors, the ban on soliciting contributions.

Contribution Bans

The appeals court, like the district court, applied the closely drawn standard in addressing the constitutionality of the contribution bans. It reasoned that courts have consistently found contributions “closer to the edges than to the core of political expression” and thus, a law limiting contributions passes muster if it is closely drawn to match a “sufficiently important interest.” The court addressed contributions by contractors and lobbyists separately.

Concerning state contractors, prospective state contractors, their principals and immediate family members, the appeals court ruled the contribution ban is closely drawn to further sufficiently important government interests. It noted that the state designed the ban to combat both actual corruption and the appearance of corruption, and that the record shows sufficient evidence of actual corruption in Connecticut stemming from contractor contributions. Thus, it held the ban is closely drawn to further sufficiently important government interests—the prevention of actual or perceived corruption with respect to all exchanges of money between state contractors and candidates for state office.

Conversely, the court ruled that the ban on lobbyist contributions violates the First Amendment. It distinguished between the bans by noting that the recent corruption scandals in Connecticut did not involve lobbyists. Thus, there is insufficient evidence to infer that all lobbyist contributions give rise to the appearance of corruption. Moreover, any evidence showing that these contributions give rise to the appearance of influence has no bearing on whether the contribution ban is closely drawn to the state's anticorruption interest. The court concluded, however, that a limit on lobbyist contributions would adequately achieve the state's interest in preventing actual or perceived corruption.

Solicitation Bans

With respect to the solicitation bans, the appeals court did not apply the closely drawn standard as it had with the contribution bans and as the district court had. Instead, it applied strict scrutiny, noting that unlike laws limiting contributions, a “limit on the solicitation of otherwise permissible contributions prohibits exactly the kind of expressive activity that lies at the First Amendment's core.” To pass strict scrutiny, a law must (1) serve a compelling state interest and (2) be narrowly tailored to that interest.

In its decision, the appeals court noted that anticorruption may be a sufficient interest to justify restrictions on contributions, but the U.S. Supreme Court has consistently held that it is not a compelling government interest. It also noted that the district court upheld the solicitation bans based primarily upon its finding that contractors and lobbyists could exert improper influence over public officials by bundling campaign contributions made by their employees or clients. While the appeals court implied that bundling may not provide a compelling state interest, it did not specifically address the issue. Instead, it held that the state did not meet its burden to show that the solicitation bans are narrowly tailored to focus on bundling since they prohibit several activities unrelated to bundling. It found that the state could achieve its purpose with measures less restrictive than an outright ban on solicitations, such as a prohibition on bundling.

Remand

As with its ruling on CEP, the appeals court remanded the case to the district court to (1) determine whether the parts of CFRA found to be unconstitutional could be severed from the rest of the act and (2) enter appropriate injunctive relief.

BACKGROUND

CGS 9-717

Under CGS 9-717, if a court prohibits or limits, or continues to prohibit or limit, the expenditure of funds from the CEF for seven days or more between the 45th day before a special election scheduled to fill a General Assembly vacancy and the day after the special election (1) the CEP and (2) the remainder the CFRA and any amendments to it become inoperative with respect to any race subject to the court order until the day after the special election.

If the court takes these steps 30 days or more on or after April 15 during a state election year, or, for 15 days on or after the August primary during a state election year, or if the primary occurs during a period of 15 days or more in which the court continues to prohibit or limit expenditures, after the 30- or 15-day period (1) the CEP and (2) the remainder of the CFRA and any amendments to it become inoperative until December 31 of that year.

In the first case, the campaign finance provisions in effect before the CFRA become effective until the day after the special election with respect to any race in the special election subject to the court order. In the second and third cases, campaign finance law reverts to the law in effect prior to the CFRA until December 31 of that year. If the injunction is still in effect on April 15 of the second year succeeding the original prohibition, campaign finance law reverts to prior law without time limitation.

The law allows candidates who receive funds pursuant to the CEP to spend them, unless the court prohibits them from doing so.

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