Randall v. Sorrell (04-1528); Vermont Republican State Committee v. Sorrell (04-1530); Sorrell v. Randall (04-1697)


Appealed from: United States Court of Appeals, Second Circuit?

Oral argument: Feb 28, 2006

In 1997, the Vermont legislature passed Act 64, a broad and sweeping statute that slashed campaign contribution and expenditure limits to historically unprecedented levels. In passing the Act, the legislature sent a clear message to its constituency in Vermont: campaign reform was on the way, and it was beginning with a full-scale assault on campaign finance laws. The controversial Act was quickly challenged by a number of parties who sought to prevent the law from taking effect by claiming it violated one of the most sacred of all constitutional rights, the right to free speech guaranteed by the First Amendment. The Federal District Court, citing the Supreme Court precedent of Buckley v. Valeo, struck down the spending limits as unconstitutional, while upholding some of the contribution limitations. The Court of Appeals sent the case back to the District Court, expressing their view that Buckley did not forbid expenditure limits per se but that a final decision on the Act could not be reached without an in-depth examination of the relevant 'state interests' and the 'least restrictive means' of achieving those interests.? This appeal to the Supreme Court followed.

The parties on both sides of this controversial issue have strong arguments. Opponents of campaign finance limits, like the plaintiffs here, argue that upholding the constitutionality of these restrictions will stifle political speech, since the expenditure of money is one way that voters and candidates alike make statements about their political preferences. Such an argument clearly implicates First Amendment free speech concerns. The Defendants and other advocates of campaign finance reform essentially argue that our current electoral process is both broken and corrupt. They contend that money plays an unacceptably-indeed, unconstitutionally-important role in the modern political process, a role sufficient to override First Amendment concerns. Overall, this case invites the Supreme Court to revisit and clarify its holding in Buckley regarding campaign finance laws. As such, a decision for the Plaintiffs likely means more of the status quo; that is, the frenetic acquisition and almost unlimited use of campaign money continuing to play an important and constitutional role in the process of electing our public officials. A decision for the Defendants, on the other hand, would pave the way for drastic and dramatic campaign finance reform on a national level.

[Question(s) Presented] | [Issue] | [Facts] | [Discussion] | [Analysis]

Questions presented

All three cases are consolidated with one hour allotted for oral argument:

04-1528

  1. Whether Vermont's mandatory limits on candidate expenditures violate the First Amendment and the Supreme Court's decision in Buckley v. Valeo, 424 U.S. 1 (1976).
  2. Whether Vermont's treatment of independent expenditures by political parties and committees as presumptively coordinated if they benefit fewer than six candidates, and thereby subject to strict contribution and expenditure limits, is consistent with the First Amendment and the Supreme Court's decision in Colo. Republican Fed. Campaign Comm'n v. Fed. Election Comm'n 518 U.S. 604 (1996).
  3. Whether Vermont's contribution limits, which are the lowest in the country, which allow only a single maximum contribution in an entire two-year general election cycle, and which prohibit even state political parties from contributing more than $400 to their gubernatorial candidate, fall below an acceptable constitutional threshold and should be struck down.

04-1530

  1. Whether Vermont's mandatory candidate expenditure limits violate the freedom of political speech guaranteed by the First and Fourteenth Amendments to the United States Constitution.
  2. Whether Vermont's $200 - $400 limits per election cycle on campaign contributions to state candidates violate the freedoms of political speech and association guaranteed by the First and Fourteenth Amendments to the United States Constitution because they are unconstitutionally low.
  3. Whether Vermont's presumption of coordination, which provides that an expenditure made by a political party or political committee that primarily benefits six or fewer candidates is presumed to be a related expenditure subject to contribution limits, violates the freedoms of political speech and association guaranteed by the First and Fourteenth Amendments to the United States Constitution.

04-1697

  1. Whether Vermont's mandatory limits on campaign expenditures by candidates for public office are constitutional under the First and Fourteenth Amendments to the United States Constitution.

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Issue(s)

Whether the state of Vermont's campaign finance law, Act 64, which places very low mandatory limits on both candidate campaign spending and donor contributions, violates the freedoms of speech and association by restricting the ability of voters, candidates, and political parties to exercise their right to "political speech" as guaranteed by the First and Fourteenth Amendments?

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Facts

The following facts are taken from Landell et al. v. Sorrell et al., 382 F.3d 91 (2d Cir. 2004).

After Governor Howard Dean flatly stated that "money does buy access" during his 1997 inaugural address to the Vermont General Assembly, that body responded by holding over sixty-five hearings featuring 145 witnesses, eventually passing the 1997 Vermont Campaign Finance Reform Act, Vt. Stat. Ann. tit. 17, ?? 2801 - 2833 ("Act 64"). Act 64 regulates contributions, expenditures, and disclosures regarding candidates for Vermont state offices and political organizations participating in Vermont elections. A complex and comprehensive statute, Act 64 contains several contentious provisions that are now the subject of the Supreme Court's review.

These provisions include:

  • Maximum expenditure limits a candidate must follow during a two-year election cycle, independent of whether that cycle includes both a primary election and a general election or just a general election. Candidates for governor, for example, face a $300,000 limit. Candidates for state representative are limited to $2000 in expenditures.
  • Maximum contribution limits a candidate, political committee, or political party may receive from a single source during a two-year cycle. Candidates for statewide office may receive $400 from any single donor. Political action committees ("PACs") and political parties may not accept contributions greater than $2000. A party's state, county, and local branches all count as a single entity for calculating that total.?
  • Candidates, PACs, and parties may not receive more than twenty-five percent of their total contributions from out-of-state organizations and individuals.
  • Expenditures by third parties on behalf of a candidate are considered both contributions to the candidate and expenditures by the candidate.
  • Expenditures by PACs or parties that benefit six or fewer candidates are presumed to be expenditures related to those candidates, though that presumption is rebuttable by those candidates.?

The General Assembly issued specific findings based on its fact-gathering in support of Act 64. Some of the most significant findings include:

  • Candidates for statewide office are "spending inordinate amounts of time raising campaign funds."
  • Especially when their time is limited, some candidates and elected officials "give access to contributors who make large contributions in preference to those who make small or no contributions."
  • In Vermont, contributions in excess of those allowed by Act 64 would be considered "large contributions."
  • Confidence in the electoral process and public involvement among voters in Vermont has "decreased as campaign expenditures have increased."

Several parties, including Libertarian state representative (and named Petitioner) Neil Randall, brought suit to enjoin the state attorney general William Sorrell from bringing these new campaign finance laws into effect on the grounds that such restrictions violated the First Amendment. Eventually, all parties were consolidated into three lawsuits, which have since been combined by the Supreme Court for review in a single oral argument, since all three essentially focus on the very same issues regarding the constitutionality of Act 64.

The Federal District Court in Vermont originally heard these claims. It found all the expenditure limits to be unconstitutional, consistent with the famous Supreme Court case of Buckley v. Valeo, 424 U.S. 1 (1976). Unlike expenditure limits, Buckley did allow for select contribution limits, and the District Court upheld some of those created by Act 64 and enjoined the enforcement of some others.

All parties appealed, and the United States Court of Appeals, Second Circuit heard their arguments. After withdrawing its initial opinion in October 2002, the Court of Appeals held the following in an amended opinion issued August 18, 2004:

  • Buckley does not forbid expenditure limits per se; thus, spending limits that are narrowly tailored to protect compelling government interests that are properly identified and documented would be consistent with Buckley.
  • Vermont had demonstrated suitably compelling government interests in eliminating corruption and the appearance of corruption for the sake of restoring the public's confidence in the democratic process and in protecting the functions of state government by limiting the amount of time candidates would need to spend in fundraising activities.
  • Remand to the District Court was necessary for further inquiry into whether Vermont chose the "least restrictive alternative" for securing its compelling interests, and for determining whether Act 64 was narrowly tailored.
  • Most of the contribution limits, including the $2000 limitation on contributions to political parties or PACs held unconstitutional by the District Court, do not violate the First Amendment.
  • Classifying state and local parties as one entity subject to a single contribution limit is constitutional under the First Amendment.
  • Imposing a maximum of twenty-five percent for funds coming from entities not resident in Vermont violated both candidates' and contributors' First Amendment rights. (Vermont does not appear likely to challenge this holding vigorously before the Supreme Court.)

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Discussion

In recently released figures, news sources revealed that New York Mayor Michael Bloomberg spent a record $85 million dollars on his 2005 re-election campaign. See NY1 report. The only thing more astounding than that figure itself was the fact that Bloomberg achieved this record-breaking status by outspending himself: the previous record of $74 million dollars was set in his first mayoral bid in 2001. Id. Critics have argued that Bloomberg's vast financial fortune and personal access to wealthy donors gave him an unfair advantage in the political arena and directly led to his victories. They claimed that Bloomberg was "unwilling to run on a level-campaign spending playing field-an acknowledgment that without his money, Bloomberg might have an actual contest on his hands." Chris Smith, "The Mayor and His Money," NEW YORK MAGAZINE, Oct. 3, 2005. Bloomberg himself does not deny that he enjoys the benefits of his personal fortune when running against other less affluent candidates, but boldly declared that "the objective is to improve the schools, bring down crime, build affordable housing, clean the streets-not to have a fair fight." Id

The 2005 New York City mayoral contest is just one manifestation of the complicated relationship between wealth and the political process. Like Bloomberg’s detractors and the Defendants in this case, many advocates of campaign finance reform believe that the role of money has taken on an increasingly unacceptable level of importance in the modern election. Some say that candidates who are independently wealthy or have large campaign treasure chests have better access to media, transportation, and critical marketing tools which allow them to buy name recognition and better convey their political message to voters, ultimately leading to victory on election day.  The fact that such access is critical to success leads to both an increased emphasis on fund-raising, especially for candidates who are not independently wealthy, and an increased likelihood of corruption as candidates make untoward promises in order to gather critical campaign contributions. Overall, advocates of campaign finance reform argue that an unhealthy emphasis on wealth in the political process has led to increased influence by wealthy donors and special interests, less time devoted to voter issues as candidates spend more time fund-raising, and unfair disadvantages to challenger candidates who are not independently wealthy.

Opponents of reform, like the Plaintiffs here, argue that money itself is a way to distinguish between candidates. Candidates whose message strikes a chord with donors are better able to raise large sums of money through campaign contributions. As such, financial donations become a way for citizens to express their political preferences, thus implicating First Amendment concerns. Donating money to certain candidates becomes "political speech" within the meaning of the First Amendment, thus affording the action the highest level of Constitutional protection. In addition, access to wealth increases a candidate's ability to convey his or her message to voters. In this way, wealth and its derivative access contribute to creating an informed voting population. According to this logic, limiting campaign spending will ultimately result in a na?ve and uninformed citizenry voting for or against candidates they neither know nor understand. Lastly, opponents of campaign spending reform defend the access and influence independently wealthy candidates bring to the mix. Since these candidates do not rely heavily on outside sources of funding to conduct their campaigns, they are less likely to pander, less susceptible to political influence, and more free to "vote their conscience" instead of having to pay off political debts.

What does all of this mean for Randall v. Sorrell? Since this case directly implicates both campaign finance reform and the First Amendment, it represents a frontal challenge to the Supreme Court to articulate where the Constitution stands on the relationship between money and politics. In addition to directly affecting candidates in Vermont, the result of this case will have broad implications for national candidates, political parties, special interest groups, and the electorate at large.?

A victory for the Plaintiffs striking down Vermont's spending limits would both affirm the critical role money plays in the political process and implicitly suggest that the current electoral process, while imperfect, remains a sufficiently Constitutional and democratic method of electing public officials. On the other hand, a victory for Sorrell upholding Vermont's surprisingly low campaign spending limits would certainly mean campaign reform is on the way. The presence of such low campaign spending limits would, theoretically, free up candidates' time as less emphasis is placed on fund-raising activities. Therefore, a decision from the Supreme Court agreeing with the lower court that expenditure limits or strict contributions limits can be constitutional would likely force candidates to find new methods of distinguishing themselves from their rivals as expensive mass-marketing techniques become less accessible. Either way, all concerned citizens should be watching closely for the outcome of this case.

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Analysis

Though the decisions below raise several points of contention, the seven Questions Presented reflected in the cases consolidated before the Court reveal the three issues the Court will most likely decide: (1) whether Vermont's campaign expenditure limits violate the First and Fourteenth Amendments; (2) whether Vermont's campaign contribution limits are unconstitutionally low; and, (3) whether Vermont's statutory presumption that any party expenditure benefiting fewer than six candidates is a related expenditure to be counted against the expenditure and contribution limits violates the First and Fourteenth Amendments.

I. The Constitutionality of Vermont's Campaign Expenditure Limits

Before analyzing whether the expenditure limits contained in § 2805(a) of Act 64 are constitutional, the Court must re-visit its holding in Buckley v. Valeo, 424 U.S. 1 (1976). In the thirty years since Buckley, many courts have read the case to hold expenditure limits on candidates to be per se unconstitutional, as did the District Court here. See Landell et al. v. Sorrell et al., 382 F.3d 91, 107; see also Kruse v. Cincinnati, 142 F.3d 907, 916–17 (1998) (“. . . the government cannot constitutionally limit the cost of campaigns . . .”). However, the Second Circuit Court of Appeals read Buckley differently. Landell, 382 F.3d at 107-109. Noting a number of Supreme Court cases in tension with a “per se unconstitutional” reading of Buckley such as Nixon v. Shrink Missouri Government, 528 U.S. 377 (2000), and McConnell v. Federal Elections Commission, 540 U.S. 93 (2003), and a growing body of academic literature critical of such a restrictive reading, the court was unwilling to leave Vermont’s limits unexamined. Id. at 108-9.

Using the language of Buckley itself, the Court of Appeals stressed that the Buckley court “simply held that based on the record before it, ‘[n]o governmental interest that has been suggested is sufficient to justify’ the federal expenditure limits.” Id. at 107 (quoting 424 U.S. at 55) (emphasis added). Noting the specific findings of fact issued by the General Assembly in support of Act 64, the Court of Appeals found compelling interests identified by Vermont that were different from those articulated in the scant record supporting the Buckley litigation. Id. at 109, 115-24.

The Court of Appeals read Buckley as identifying the compelling government interest at stake as merely the goal of reducing the costs of political campaigns. Id. Thus, the Court held such restrictions unconstitutional because “large campaign expenditures, in and of themselves, are not inherently suspect.” Id. at 107. But Vermont identified two other interests which the Court of Appeals found sufficiently distinct to warrant further scrutiny: the elimination of corruption or the appearance of corruption, and the protection of candidates’ time and energy currently spent on “excessive” fundraising. Id. at 115-124. Though the District Court also thought these reasons were compelling, it nevertheless found the expenditure limits unconstitutional, consistent with the typical reading of Buckley. Id. at 125. Thus, the Court of Appeals remanded the question to the District Court for further inquiry as to whether § 2805(a) was narrowly tailored and, thus, consistent with the established test of strict scrutiny for considering statutes that impinge on important constitutional rights, Id. at 136-137, but not before providing lengthy guidance on how that inquiry should proceed. Id. at 125-136. 

Appellants here, like Judge Winter dissenting in the Second Circuit, continue to argue that Buckley held all campaign expenditure limits unconstitutional, and the Court would have to overrule Buckley to hold otherwise. See, e.g., Id. at 152 (Winter, J. dissenting) (stating “Buckley v. Valeo held, without qualification, that government may not limit campaign expenditures by candidates for electoral office.”)(citations omitted). Even if Buckley leaves room for the examination of new governmental interests, those fighting the limits (collectively “the Appellants”) claim Vermont’s stated interests are indistinguishable from that ruled constitutionally insufficient in Buckley. See, e.g., Brief for Petitioners Vermont Republican State Committee, et al., 2005 WL 3476618, 4–5 [hereinafter “Brief for Petitioners.”] The Sixth Circuit Court of Appeals felt similarly in Kruse v. Cincinnati, saying that “because the government cannot constitutionally limit the cost of campaigns, the need to spend time raising money, which admittedly detracts an officeholder from doing her job, cannot serve as a basis for limiting campaign spending.” 142 F.3d 907, 916–17. Though the language of Kruse applies directly to Vermont’s stated goal of reducing the time its politicians must spend campaigning, the same argument may arguably apply to Vermont’s other justification of the expenditure limits in Act 64—ending corruption or its appearance. See 328 F.3d at 115-119. Lastly, Appellants believe that the Court of Appeals erred in remanding the issue of whether or not § 2805(a) is narrowly tailored because such a question is suitable for determination at the appellate level as part of its de novo review. See Id. at 155.

II. The Constitutionality of Vermont's Campaign Contribution Limits

Of the myriad limitations imposed on campaigns by Act 64 that the District and Appellate Court considered, the most controversial arguably are all contained in § 2805(a) of Act 64 and concern stringent limits on campaign contributions.

Based on the Questions Presented on certiorari, the Court seems poised to deal with three elements of § 2805(a): (1) the low nature of the individual contribution limits in general; (2) the particular limit of $400 to gubernatorial candidates, especially as applied to state political parties; and (3) that limits are measured over a two-year general election cycle without regard for whether or not that cycle contains both a primary election and a general election, or just a general election. See Landell, 328 F.3d at 161 (Winter J., dissenting).

The Second Circuit flatly held, “Governmental interest in eliminating actual and apparent corruption is sufficient to support Vermont’s limits on contributions to candidates” and is consistent with Buckley. Id. at 138. But, Appellants argue that Vermont’s contribution limits ban more than the large contributions that “pose the danger of real or apparent corruption,” and Vermont has failed to prove its low limits are closely tied to real or apparent corruption. Brief for Petitioners at 8-9.

The District Court held that, while limits from political parties to candidates (such as the $400 limit applied to Vermont’s political parties with respect to their candidates for governor) are not per se unconstitutional, the limits imposed by § 2805(a) are unconstitutionally low. Landell, 328 F.3d at 139. The Court of Appeals, however, found that political parties “offered no evidence that Political Action Committees (PACs) and political parties have overriding features exempting them from the general findings about actual and apparent corruption in Vermont.” Id. at 142. Appellants counter that such limits on parties are only acceptable where “political parties [are] found to be conduits for some contributors who [seek] to support a specific candidate through contributions to a party.” Brief for Petitioners at 25 (interpreting Fed. Elections Comm’n v. Colo. Republican Fed. Campaign, 533 U.S. 431 (2001)). Appellants contend that Vermont presented no evidence that Vermont’s political parties serve as conduits for contributions from donors to candidates, thus parties are entitled to robust contribution limits to their candidates. Id. at 24–28. 

As for the potential inequities created by the mandated measurement of a two-year election cycle irrespective of the presence of a primary election, Judge Winter in dissent notes that the potential effects are “not inconsequential.” Landell, 328 F.3d at 161 (Winter J., dissenting). He notes that “Act 64 limits a candidate who must wage a serious primary fight to the same amount of total financing as his or her general election opponent who did not face a primary challenge.” Id.

III. The Constitutionality of Vermont's Statutory Presumption that Any Party Expenditure Benefiting Fewer than Six Candidates is a Related Expenditure Subject to the Expenditure and Contribution Limits.

Both the District and Appellate Courts held the particular provision, contained in ? 2809(d), constitutional. Id. at 146. The Second Circuit reasoned that only conclusive presumptions are unconstitutional in this context. Id. (interpreting Colo. Republican Fed. Campaign Comm'n v. Fed. Election Comm'n 518 U.S. 604, 619 (1996)). Since ? 2809(e) provides a procedure for challenging the presumption, it does not "eliminate[] the need for a finding that the expenditures were in fact coordinated and foreclose[] the possibility of a defense." Id. The court quickly dismissed the argument that the presumption was "functionally conclusive." Id. Appellants argue that rebuttable presumptions require private parties to bear the costs of litigation and the risk of an adverse finding which must necessarily chill speech in direct contravention to the First Amendment. Brief for Petitioners at 44-45 (citations omitted).

One additional factor potentially amplifying the effects of ? 2809(d) and many other provisions of Act 64 that did not expressly make its way into the Questions Presented but nevertheless bears mention is the statutory definition of state and local parties as one entity subject to a single contribution limit. Act 64 ? 2801(5). While the Second Circuit held that such a definition would be constitutional if meant to close a loophole that "would easily enable contributors to circumvent the $2000 limit on gifts to state parties," Landell, 328 F.3d at 145, the Appellate Court remanded the question for further examination by the District Court as to the effect on the relationship between state and national parties and whether the definition was effectuated for the purpose of closing a loophole. Id. Again, Judge Winter seemed incredulous, stating that "this revolutionary provision destroys the autonomy of local affiliates of political parties from each other and from the state party organization, and thereby violates both freedom of speech and freedom of association." Id. at 152-53 (Winter J., dissenting). Nevertheless, the majority noted the leeway the Supreme Court gave Congress to close loopholes such as with the restrictions on "soft money" in the Bipartisan Campaign Reform Act of 2002 ("BCRA" or "McCain-Feingold") in McConnell v. Fed. Elections Comm'n, 540 U.S. 93 (2003). Id. at 144-45.?

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Conclusion

Vermont apparently passed Act 64 with at least an eye toward challenging Buckley v. Valeo and the jurisprudence it generated. Now, the Supreme Court seems poised to make perhaps an equally profound statement about campaign finance reform and the First Amendment as that made in Buckley thirty years ago.

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Authors

Written by: Micaela McMurrough & Craig Newton

ADDITIONAL SOURCES