Davis v. FEC

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Authorship: Lyle Denniston

Contents

[edit] Briefs and Documents

Docket: 07-320

Issue: Whether BCRA’s so-called “Millionaire’s Amendment,” which relaxes campaign finance limits for opponents of congressional candidates spending more than $350,000 of their own money, violates either the First or Fifth Amendments.

Argument Transcript

[edit] Certiorari stage

[edit] Merits stage

Merits briefs [via ABA]

Amicus briefs

[edit] Argument Preview

Returning to constitutional issues surrounding federal campaign money laws, the Supreme Court will be considering – in Davis v. Federal Election Commission (07-320) – a 2002 law that seeks to offset somewhat the advantage that candidates have when they are wealthy enough to pay for their own campaigns. At issue is the so-called “Millionaire’s Amendment.” The case, however, also includes an issue of whether the Court has jurisdiction to hear the appeal, thus raising the possibility that the Amendment’s validity would not be resolved.

[edit] Background

As part of a massive political spending law – the Bipartisan Campaign Reform Act of 2002 – Congress inserted Section 319 as a way to correct what was believed to be an inequity that grew out of a 1971 Supreme Court decision (Buckley v. Valeo). In that ruling, the Court struck down an earlier law’s cap on the amount of personal funds that a candidate could spend on his campaign – leaving wealthy candidates free to spend as much as they wanted to try to get elected. At the same time, the Court left intact strict limits on the amount of campaign contributions that a candidate could accept from others. That made it very difficult for candidates who had to raise money from others to compete with “millionaire” opponents. In Section 319, Congress relaxed the limits on contributions that a candidate could use if he or she was running against an opponent whose personal fortune was available for the campaign.

The Buckley decision struck down earlier provisions that put ceilings on spending of personal wealth: presidential and vice presidential candidates could only spend up to $50,000 of their own money, Senate candidates $35,000 and House candidates $25,000. The Court found those limited candidates’ political speech rights in favor of his or her own candidacy. Buckley, however, upheld annual donation limits of $25,000 to candidates who depended on others for financing.

In a move to try to even up the competition, Congress in 2002 adopted what has come to be known as the “Millionaire’s Amendment.” A candidate planning to use personal funds during the campaign must publicly disclose, 15 days after becoming a candidate, if he or she plans to spend more than $350,000 of personal money. If the candidate exceeds that amount in actual spending, periodic reports are due with the Federal Election Commission, the opposing candidate(s), and with each opponent’s national political party.

Any spending by that candidate of more than $350,000 operates to lift the law’s contribution limits for candidates using other people’s money. Each such opponent can gather up to three times the limit per donor that otherwise would be in place. (For the 2008 election cycle, that ceiling is $2,300.) An opponent also may seek and use money from donors who have already reached their ceiling (in 2008, $37,500) on donations, and may coordinate their spending plans with their political party so that the party can finance more of that candidate’s campaign.

The constitutionality of the “Millionaire’s Amendment” was challenged as part of the wide-ranging challenge to all of the 2002 campaign finance law, resulting in the Supreme Court’s 2003 decision in McConnell v. FEC. The Court ruled there, however, that the challengers to this particular provision lacked the right to sue to bring their challenge, so it did not rule on the merits.

Before the Court in the new Davis case is a challenge that is limited in two ways: first, it is a challenge to the constitutionality of Section 319 as it was written (a “facial challenge”) not as it actually worked in practice in a real campaign; and, second, it is a challenge only to the Amendment as it applies to wealthy candidates and their opponents running for seats in the U.S. House of Representatives. Comparable provisions of the Amendment as applied to the Senate are not at issue in the case.

The challenge here was filed by Jack Davis, a defeated Democratic nominee for a House seat from New York’s 26th District – all or parts of seven counties in north western New York close to Lake Ontario. Davis ran unsuccessfully in the 2004 and 2006 general elections. After he filed for the race in 2006, planning to run again – as he did in 2004 – as a self-financed candidate, Davis filed his lawsuit challenging the Amendment. He contended that it violated his First Amendment political speech rights and his rights under the Fifth Amendment to equal protection. The case, as required by campaign finance law, went to a three-judge U.S. District Court in Washington, D.C. That Court rejected all of Davis’ challenge. Under the law, Davis’ appeal then had to go directly to the Supreme Court, bypassing a federal Court of Appeals. (Davis, while suing, went ahead with his campaign in 2006, and lost to Republican Rep. Thomas M. Reynolds in the general election.).

[edit] Jurisdictional Statement

Because Jack Davis’ appeal to the Supreme Court is a direct appeal from a District Court, the appeal is in the form of a Jurisdictional Statement, rather than a petition for certiorari. In that form, the appeal requires the Court to hear the case unless it finds that it has no jurisdiction to do so, or it finds that it can dispose of it without full briefing an argument – that is, summarily.

Davis’ appeal raised two questions: whether the “Millionaire’s Amendment” violates the First or Fifth Amendment in attempting to “equalize resources” between House candidates, and whether, if that goal is a valid one, the specific financing provisions achieve that goal. In responding to the appeal, the Federal Election Commission told the Court that the case involves a third critical issue: did Davis have “standing” to bring his lawsuit? FEC contended that he did not, because he had identified no actual or imminent harm to his candidacy. Rep. Reynolds, it noted, did not receive any increased contributions or coordinated party spending under the Amendment, so there was no injury to Davis’ campaign. The FEC also suggested that the case may be moot – another factor that could deny the Court jurisdiction.

The Supreme Court on Jan. 11 took on the case, but noted explicitly that it would not decide whether it had jurisdiction until it held a hearing on the merits. Thus, it will review the District Court ruling, but first must resolve the question of Davis’ standing; if it finds that he had a right to sue, it would then move on to the merits, but not otherwise. (The District Court had ruled that David did have standing, saying that he would be harmed by Section 319’s disclosure requirements and that would be corrected if the Amendment were struck down.

On the merits, Davis’ basic point in the Jurisdictional Statement was that an attempt to equalize political resources among candidates is not aimed at reducing corruption in the federal election process, and, without that, Congress had no authority to pass Section 319. While contribution limits on candidates in general do help to head off the corrupting influence of money in politics, the appeal argued, there is no reason to believe that relaxing those limits would deal with any corruption problem. And, it added, personal funds for campaign are not corrupting in any sense, and, in fact, may offset the influence that moneyed groups have on national politics.

The FEC, in discussing the merits, argued that Davis’ challenge raised “no substantial federal question,” so the Court should dispose of it summarily, either by dismissing it for lack of such a question or by simply upholding the District Court ruling in favor of Section 319 on its face.

[edit] Analysis

The current Supreme Court is generally reluctant to strike down Congress’ work on campaign finance when those laws are under review in facial challenges – that is, a challenge based solely on the language of the statutes. It has shown a tendency to believe that money in politics is something that Congress knows much better than the courts could, so the legislators’ judgment generally is acceptable. It has, however, been less reluctant about nullifying a law once it has gone into effect, if it can see – in real world terms – that a campaign finance regulation inhibits political speech, or fails to deal with an identifiable problem of corruption in politics.

One major difficulty that Davis may encounter – both on his right to sue and on the merits of his claim – is trying to convince the Court that it is beyond Congress’ authority to try to level the political playing field through campaign finance regulation. Most provisions in campaign finance laws, though aimed at supposed corrupting influences in politics, are intended to try to make money less the decisive factor in federal elections. Moreover, Section 319 put no limits on what Davis was allowed to spend; the provisions were intended, rather, to make it easier for him to be challenged when he uses his personal fortune. On the standing aspect of that issue, Davis must convince the Court that he is being penalized for spending his own money. And, on the merits, he must prove the same thing. Similarly, he has to shown that he was harmed by the disclosure requirements in Section 319; the Court is generally sympathetic with campaign laws that give voters more, not less, information about the candidates.

[edit] Merits Briefs

Lawyers for candidate Jack Davis, in their brief on the merits, open with a defense of his right to bring his challenge to the “Millionaire’s Amendment.” They argued that it is beside the point, in terms of judging whether Davis was harmed by the Amendment, that his successful opponent did not raise any extra funds to buttress his campaign for the House seat. He was injured, the brief contended, the moment he was required to disclose “sensitive, strategic information” about his campaign plans. Without the information that a self-financed candidate is obliged to make public, Davis contended, opponents would not be able to take advantage of the fund-raising allowances made by Section 319. The mere fact that the Amendment exists, he contended, means that he is less free to make personal expenditures without helping out an opponent. The brief also argued that the case is not moot, because the FEC still has pending an enforcement action against him for a failure to obey the law during the 2004 campaign.

On the merits, Davis’ principal challenge is that Section 319 (which he contended is not properly called a “Millionaire’s” provision because it is triggered well below that sum) was crafted in a way that favors incumbents and discourages new challengers. Self-financed candidates are discouraged from running and, if they run anyway, are punished by giving rewards to their opponents. On this point, he also argued that it does nothing to inhibit incumbent’s use of “war chest” funds left over from earlier campaigns. In his own case, he said, the provision gave his opponent the option of raising an additional $1.4 million beyond normal limits, even though his opponent had already outspent Davis by more than $3 million dollars. That, he contended, is not leveling the playing field, even if that were a proper reason for campaign finance laws.

The Federal Election Commission, in its merits brief, again conceded that Davis did suffer an injury during the 2006 campaign because of the disclosure requirements of the Amendment, but it renewed its argument that the case has become moot nevertheless. He has not indicated any plan to run again, the FEC asserted, he cannot show he will again be injured. Moreover, it argued, he can raise his constitutional complaints during the ongoing FEC proceeding, and, besides, that proceeding may come to nothing in the end. He could bring an as-applied challenge later, the Commission noted. It also renewed its argument that Davis lacked standing to challenge to contribution provisions in Section 319, because his opponent in 2006 did not seek added money beyond the limits.

On the substantive issues Davis sought to raise, the FEC argued that Section 310 does not inhibit his political speech in any way, and allowed him to spend whatever he wished of his own money. Moreover, it added, “nothing in this Court’s decisions supports [Davis’] contention that reducing wealth-based disparities inopportunity is an invalid government objective.” Congress did not intend to abandon its basic purpose in campaign finance laws – inhibiting the corrupting influence of money in politics. “The perception that House and Senate seats may be bought and are the exclusive province of the rich are corrosive perceptions that Congress can seek to address,” it contended.

The agency also dismissed as lacking in merit Davis’ arguments that his right to legal equality had been compromised, and his argument that the disclosure requirements – on their face – are invalid. Any opponent, too, faces disclosure requirements under the law, FEC said.

The lineup of amici was quite predictable – foes of limits on campaign spending joined in supporting Davis’ appeal, while organizations long associated with campaign finance reform advocacy – like Common Cause and Democracy 21 – entered the case to support Section 319 against Davis’ challenge.

Amici on his side of the case suggest, among other arguments, that the Justices should apply strict scrutiny to the Amendment, because, they contend, it severely inhibits political speech. One organization on that side – the Center for Competitive Politics – suggested that, even though a self-financed candidate can spend at will, those who would like to contribute to his campaign and his party are subject to the regular contribution and coordinated spending limits that are lifted for his opponent’s backers.

On the FEC’s side, one of the amici briefs suggested that Section 319 has not worked in practice to discourage self-financed candidates. The available data, the brief said, is that the number of candidates who used more than $1 million of their own money rose from 2002 to 2006. In addition, it said, self-finance candidate appear not to be facing heavy spending from their opponents. In the 2004 congressional election, it recounted, 93 candidates were allowed to raise added funds for their campaigns, but 37 of them did not raise more than $2,000 in any single contribution.

An amicus that does not support either party – the Cato Institute – basically mounted arguments on the merits that closely parallel some of Davis’ contentions.

[edit] Oral Argument Recap

The Supreme Court on Tuesday, April 22 had some difficulty mustering sympathy for candidates for Congress who are so wealthy that they can pay for their entire campaigns, but, perhaps more important, there was not much sympathy, either, for the way Congress has chosen to bolster the chances of those candidates’ opponents. In fact, so much doubt had been expressed about the so-called “Millionaire’s Amendment” that the Justices seriously explored what, if any parts, of it could be salvaged.

The part of the law that seemed most in jeopardy gives opponents of self-financing candidates a chance to call on a political party for a lot more financial support — even though that is denied to the wealtheir candidates themselves. Also, a provision compelling self-financed candidates to make repeated public disclosures about their spending seemed to be in some trouble, too.

The reason for the pervasive skepticism during the hour-long argument in Davis v. Federal Election Commission (07-320) was that several of the Justices voiced concern that Congress might have been trying to influence the content of the political messages that get conveyed during a congressional campaign — a potential First Amendment problem. A move by Congress to “level the playing field” appeared to be interpreted as a reach to control those messages. Most tellingly, Justice Samuel A. Alito, Jr., questioned whether Congress in enacting the Amendment genuinely intended to stop the corrupting influence of money in politics — the only rationale the Court has accepted for campaign finance regulation.

The argument presented a recurring difficulty for observers trying to read the Court’s reaction: once again, Justice Antonin Scalia was such a dominant figure (and such a hostile opponent of the Amendment) that one might get the impression that he was in control. This time, however, as the hearing moved along, the Amendment drew more and more adversaries on the bench — in particular, Justice Anthony M. Kennedy.

The Millionaire’s Amendment, passed as part of the massive overhaul of federal campaign finance law in 2002, goes into operation if, in a given congressional race, a wealthy candidate signals that he or she is going to spend more than $350,000 of personal funds to finance that candidacy. That triggers a right for the opponent to raise money beyond the usual contribution ceilings, and to coordinate financing with a political party, again exceeding limits. It also triggers heavy disclosure requirements on the wealthy candidates, some perhaps due on a daily basis.

The case was taken to the Court by Jack Davis, an unsuccessful candidate for Congress from upstate New York, who financed his own campaigns in 2004 and 2006.

Gong into Tuesday’s argument, the impression among observers was that Davis’ challenge was, at best, a long shot. He was allowed to spend as he wished, so his argument that he was “chilled” in his political speech was found wanting (and, indeed, had been flatly rejected by a lower federal court).

For the first part of the oral argument, that impression held sway. Davis’ lawyer, Washington, D.C., attorney Andrew D. Herman, was only a few seconds into his argument when Chief Justice John G. Roberts, Jr., told him: “There is no restriction whatsoever on the wealthier candidate. He can spend as much of his money as he wants.” And Justice Ruth Bader Ginsburg suggested that “the end result of this schme is that there will be more, not less, speech.” Justice David H. Souter soon joined in to say that experience under the Amendment lacked any evidence that anyone was deterred by its requirements.

Throughout those exchanges, Justice Scalia interjected to help Herman’s argument, several times directly refuting comments by other Justices as soon as they had made them. And, well into Herman’s presentation, Scalia got directly into his critique of Congress’ reason. “Do you think,” he asked, ” that’s a valid constitutional objective, to level the playing field? Do you think we should trust our incumbent senators and representatives to level the playing field for us?” Herman, of course, said no.

When Justice Kennedy got involved, he went right to the question of whether it was constitutional for Congress to give challengers to wealthy candidates “more access and more support” from political parties. “That concerns me,” Kennedy said. “And it seems to me that that distinction is somewhat questionable….It seems to me that that’s a particular vice of the statute.”

The woe that the Amendment seemed to be encountering became most vivid, though, during the argument in support of that provision by U.S. Solicitor General Paul D. Clement (making what may be his last Court argument as the SG — unless he resists the strong lure of private practice).

Perhaps the most revealing exchange was with Justice Alito. The Justice, during Herman’s argument, had seemed to be somewhat sympathetic to Congress’ desire to “rectify” the effect of tight limits on contributions, by allowing less-well-heeled candidates to raise more to compete with self-financed candidates.

But, with Clement at the lectern, Alito suggested that there was “something very strange about having different contribution limits for candidates in an election.”

And, later, after other Justices had begun questioning whether Congress had found any problem of corruption in self-financed candidacies, Alito joined in. “How is it,” he said, with some sarcasm, “that there is a serious corruption problem in most instances if a contributor gives more than $2,300 to a candidate [the limit on contributions to a self-financed candidate] but presumably Congress doesn’t think there is a serious corruption problem when this statute kicks in and somebody gives $6,900 to a [less-wealthy] candidate…So why would Mr. Davis be subject to potential corruption if he got $2,301 from a contributor, but his opponent in exactly the same race would not be exposed to corruption if he got $6,900?” That, Clement replied, without answering directly, is the result of candidate choice.

In the meantime, Justice Kennedy had recharacterized the core issue in the case as one dealing not with “just money,” but with “the quality and kind of speech.” Again, the Justice was referring to the role that the less-wealthy candidate could summon from a political party, suggesting that it was the party’s speech that was being made available unequally, with a differential impact on campaign strategy. “The content of he speech…that’s exactly what this is,” Kennedy suggested. ”It puts this statute in the position of preferring one kind of speech over another. And we simply do not do that.”

Somewhat later, the Chief Justice brought up the disclosure requirements, saying “it strikes me as very problematic that the government requires you to disclose in a differential way how you intend — when you’re spending a particular amount of money and on such precise day-by-day requirements.” Justice Ginsburg expressed concern about that, too.

Not long afterward, Justice Stephen G. Breyer brought up the question of whether invalid parts of the Millionaire’s Amendment were struck down, the rest could be preserved. Yes, said Clement. And Justice Scalia soon talked about fashioning a remedy that would eliminate the differential between the candidates in gathering contributions and joining efforts with a party, either by “leveling up” or “leveling down.”


[edit] Opinion Analysis

Eighteen years ago, Justice Antonin Scalia complained that a Supreme Court decision he did not join carried an Orwellian message, abhorrent to the Constitution. He wrote, sarcastically: “Attention all citizens. To assure the fairness of elections by preventing disproportionate expression of the views of any single powerful group, your Government has decided that the following associations of persons shall be prohibited from speaking or writing in support of any candidate: ___.” Such a proclamation, he said, violated the “absolutely central truth of the First Amendment: that government cannot be trusted to assure, through censorship, the ‘fairness’ of political debate.”

With Justice Scalia now in the majority, the Court has just provided someting of an echo of that 1990 sentiment. “It is a dangerous business,” Justice Samuel A. Alito, Jr., wrote for a majority on Thursday, “for Congress to use the election laws to influence the voters’ choices….The Constitution…confers upon voters, not Congress, the power to choose the Members of the House of Representatives.” Thus, Congress may not legislate to “level electoral opportunities.”

What Scalia denounced — in a colorful dissent — in Austin v. Michigan Chamber of Commerce in 1990, Alito has now led a majority to condemn in dispassionate terms in Davis v. Federal Election Commission. In Davis, the Court said in the clearest terms yet that it is unconstitutional for Congress to try to level the playing field in campaign finance.

If Congress passes campaign finance controls, and can show clearly that it did so to stop corruption or the appearance of corruption, that is all that it can do, the Court made clear. Whenever Congress seeks to go beyond corruption-correction, in order to promote “fairness” in politics, or equal political opportunity for the candidates, it exceeds its constitutional reach, it now seems plain.

It is difficult to say, at this point, just how far that limiting principle will go to undo campaign finance laws and regulations from here on.

There is no doubt that Congress has believed, for years, that it can constitutionally adjust the campaign money system to try to reduce the influence of wealth — individual wealth, the treasure in corporate or union coffers, the wealth of activist organizations.

And, in passing what is called the “Millionaire’s Amendment” in 2002 to govern races for Congress, the lawmakers definitely believed they had the authority to promote equality of spending by giving some opponents of wealthy candidates a chance to raise money up to the level where they could compete, equally or close to that. This was the reverse of putting caps on campaign outlays: it lifted the caps for one side, to promote equality.

But both of those assumptions may not have survived the Davis decision, striking down the “Millionaire’s Amendment” on First Amendment grounds. For the first time, the Court has said explicitly that, even if wealth imbalances candidate competition, Congress cannot cure that by authorizing what amounts to a subsidy for the lesser-financed candidate.

Its explanation for why that is a First Amendment violation is an argument never before advanced: that a candidate with the “natural advantage” of access to more money has a constitutional right to bar Congress from intervening to enable a would-be rival to mount tougher competition. Shifting the “advantage” that way, the Court appeared to indicate, is a kind of forbidden tax or penalty levied on the political speech of the better-financed contender.

Some election-law experts immediately detected in those notions a threat to long-standing federal curbs on spending by Big Business or Big Labor. The theory those experts offered was that, if wealth-equalization is not a valid basis for restricting campaign finance activity, corporations and labor unions perhaps could not validly be restricted from engaging in political speech through their unequal assets. Does it not diminish their political speech, it was suggested, for Congress to say they can buy too much speech? Justice Alito did say, explicitly, that spending large sums on politics is the constitutional equivalent of “robustly” exercising First Amendment rights.

And, some of those experts added, does it not substitute legislative choices for those of voters if Congress or state legislatures doled out public funds to finance campaigns in lieu of private wealth?

The Alito opinion in Davis provides no more than hints, some only between the lines, that such major shifts in constitutional understandings about campaign finance restrictions will follow from this new opinion. The opinion and its internal logic were crafted to hew rather closely to the vices the majority found in the “Millionaire’s Amendment.”

But it was enough of a departure from conventional wisdom that lawyers looking for new ways to lift financial restraints on political utterances have reason to think it worth a try to extend that logic.

[edit] Links and further information

[edit] Press

Decision Related Press

[edit] Blogosphere

Decision Related Links

  • American Constitution Society Blog: The Latest Attack on McCain-Feingold: Davis v. FEC and the Millionaires' Amendment [1]
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