Arizona Free Enterprise v. Bennett (10-238) and McComish v. Bennett (10-239) (consolidated)

Oral argument: Mar. 28, 2011

Appealed from: United States Court of Appeals for the Ninth Circuit (May 21, 2010)

FIRST AMENDMENT, FREE SPEECH, CITIZENS UNITED, CAMPAIGN FUNDRAISING, ELECTIONS

At issue in these consolidated cases is the constitutionality of Arizona’s Citizens Clean Elections Act. Petitioners—several past and present candidates for elected office, and two political action committees—claim that the matching public funding provision of the Act burdens the free speech of candidates who do not utilize public funding. Respondent, Ken Bennett, in his official capacity as Arizona Secretary of State, contends that the Act is designed to prevent corruption and does not impose any actual burden on protected political speech. The Ninth Circuit Court of Appeals held that the Act did not violate the First Amendment, because it furthered a compelling government interest in preventing corruption. In resolving this question, the Supreme Court must strike a balance between the First Amendment right to protected political speech and clean election measures implemented by a state. This decision will affect state and national elections that utilize matching public funding schemes.

Questions presented

Arizona Free Enterprise

In Davis v. FEC, 128 S. Ct. 2759 (2008), this Court held that the First Amendment forbids the government from attempting to level the playing field in elections by raising contribution limits for candidates who are outspent by self-financed opponents. Arizona's Citizens Clean Elections Act achieves a similar result by providing extra subsidies in the form of "matching funds" to publicly financed candidates who are outspent by independent expenditure groups and privately financed candidates. The questions presented are:

1. Whether the First Amendment forbids Arizona from providing additional government subsidies to publicly financed candidates that are triggered by independent expenditure groups' speech against such candidates?

2. Whether the First Amendment forbids Arizona from providing additional government subsidies to publicly financed candidates that are triggered by the fundraising or expenditures by these candidates' privately financed opponents?

McComish

1. Whether Citizens United v. Federal Election Comm'n, 130 S. Ct. 876 (2010), and Davis v. Federal Election Comm'n, 128 S. Ct. 2759 (2008), require this Court to strike down Arizona's matching funds trigger under the First and Fourteenth Amendments because it penalizes and deters free speech by forcing privately-financed candidates and their supporters to finance the dissemination of hostile political speech whenever they raise or spend private money, or when independent expenditures are made, above a "spending limit."

2. Whether Citizens United and Davis require this Court to strike down Arizona's matching funds trigger under the First and Fourteenth Amendments because it regulates campaign financing in order to equalize "influence" and financial resources among competing candidates and interest groups, rather than to advance directly a compelling state interest in the least restrictive manner.

top

Issues

1. Under Citizens United v. Federal Election Commission and Davis v. Federal Election Commission, does the matching public funding provision of Arizona’s Citizens Clean Elections Act violate the First Amendment protection of political speech?

2. Does the Citizens Clean Elections Act advance a compelling state interest in preventing corruption, or does it unconstitutionally burden protected political speech?

top

Facts

In 1998, the State of Arizona passed the Citizens Clean Election Act (“the Act”), which created a framework through which the state provides public financing to candidates for statewide political offices. See McComish v. Bennett , 611 F.3d 510, 513 (9th Cir. 2010) . Under the Citizens Clean Election Act, candidates that choose to receive public funding for their campaigns may not accept private campaign donations. See id. at 513. In this case, Petitioners – a group including six past and future Arizona political candidates and two political action committees (“PACs”), – challenge the provision of the Act that triggers matching public funding to participating candidates when their non-participating opponents’ private fundraising and donations exceed a statutorily prescribed amount. Id. Petitioners allege that the public funding trigger provision of the Act violates their rights under the First Amendment and the Equal Protection Clause of the Fourteenth Amendment. See id. The crux of the Petitioners’ suit is that the Act substantially burdens their exercise of protected political speech by effectively punishing them for raising enough funds to trigger the public funding matching provision of the Act. Id. Thus, Petitioners allege that the Act has a chilling effect on protected political speech by forcing Petitioners to forego fundraising in order to avoid triggering the matching funds provision of the Act. Id.

The Plaintiffs in the original suit—John McComish, Nancy McLain, Tony Bouie, and Robert Burns—are all past or future candidates for election to Arizona state offices or the House of Representatives. See McComish, 611 F.3d at 517. Joining the suit as plaintiff-intervenors are Dean Martin, Rick Murphy, the Arizona Free Enterprise Club’s Freedom Club PAC (“AFE PAC”), and the Arizona Taxpayers Action Committee (“Arizona Taxpayers”). Id.

In 2008, John McComish, Nancy McLain, and Tony Bouie each ran for seats in the Arizona House of Representatives. McComish , 611 F.3d at 518. McComish complained that the Act forced “self-censorship” upon him by delaying fundraising and promotional efforts until later in his campaign in order to avoid triggering matching funds for his opponent. See id. Similarly, McLain claimed that the matching funds provision imposed a “competitive disadvantage” on her campaign because she deliberately avoided raising enough money to trigger the matching funds provision. Id. Tony Bouie’s campaign triggered matching public funds for his opponent, and he argued that matching funds put him at a “continuous tactical disadvantage.” Id.

The AFE PAC claimed that the Act influenced its decisions as to when and where to spend money. See McComish, 611 F.3d at 519. Arizona Taxpayers claimed that the Act prevented the group from opposing a 2006 primary candidate out of fear that its speech would trigger matching funds. See id.

McComish and the other Petitioners sued the State of Arizona in United States District Court, which granted summary judgment in favor of McComish without a trial. See McComish, 611 F.3d at 510. On June 23, 2010, the Ninth Circuit Court of Appeals reversed the grant of summary judgment, concluding that the Act did not violate the Petitioners’ First Amendment rights. See id. The Ninth Circuit’s opinion diverged from decisions in the Eighth and Eleventh Circuits, which held that similar matching public funding schemes violated the First Amendment. See Scott v. Roberts, 612 F.3d 1279 (11th Cir. 2010); Day v. Halloran, 34 F.3d 1356 (8th Cir. 1994). On November 29, 2010, the Supreme Court granted a writ of certiorari to determine whether Arizona’s Citizens Clean Election Act violates the First Amendment and Fourteenth Amendment by failing to further a compelling state interest. See Arizona Free Enterprise v. Bennett, 131 S. Ct. 644 (2010).

top

Discussion

This case will allow the Supreme Court to settle a circuit split over the question of whether matching public funding laws violate the First Amendment right to free speech. This ruling will affect candidates for state and national political offices, because it will directly impact the way political campaigns fundraise and the way political action committees make campaign contributions.

Reducing Corruption in Public Elections

Petitioners McComish, McLain, Bouie, and Burns (collectively “McComish”) argue that the Citizens Clean Election Act (“the Act”) and its provision for matching public funding impose a substantial burden on protected political speech. See Brief for Petitioner McComish et al. at 62. According to McComish, the Act creates a significant disadvantage to “traditional” candidates who do not participate in the matching funds program, yet trigger the matching funds provision through traditional campaign fundraising and spending. See id. at 68. Furthermore, McComish claims that, by rewarding election opponents with matching funds, the Act does not protect against actual or apparent quid pro quo corruption – Arizona’s stated interest in passing the law. See id . at 75. Thus, McComish concludes that the matching funds provision punishes traditional candidates without serving an anti-corruption purpose. See id . at 84. According to the Center for Competitive Politics, empirical review of public funding schemes demonstrates that such schemes actually increase the public perception of corruption. See Brief of Amicus Curiae Center for Competitive Politics in Support of Petitioners at 15.

Respondent, the State of Arizona, claims that the Act will prevent corruption in public elections, and only creates potential, indirect burdens to protected speech under the First Amendment. See Brief for Respondents, Ken Bennett, et al. at 35. Arizona points out that, since the passage of the Act in 1998, campaign-funding expenditures have consistently increased, undermining any inference that the Act will decrease political speech in the future. See id . at 39 40. Furthermore, Arizona claims that the Act serves the interest of preventing actual and apparent corruption, minimizing the influence of PAC's arising from their financial support to particular candidates. See id . at 41 42. Arizona argues that elections themselves are systemic anticorruption measures, and that the prevention of corruption is paramount to democracy. See id . at 42. Lastly, Arizona notes that the Act was born from a long, undisputed history of corruption in the State of Arizona, and that the Act is an affirmative mechanism to restore the public's faith in the electoral process. See id . at 57 58.

Chilling Political Speech

McComish's central concern is that the Act unfairly influences the strategic campaign choices of non-participating candidates about when to spend money to disseminate their political message. See Brief for Petitioners McComish et al. at 62. The Justice and Freedom Fund argues that the Act creates a chilling effect on core, protected political speech by independent advocacy associations that support non-participating candidates, because the associations' financial contributions may trigger public funding to publicly funded opponents. See Brief of Amicus Curiae Justice and Freedom Fund in Support of Petitioners at 24 25. According to the Cato Institute, the Act discourages the unabridged discussion of relevant political issues by candidates and their supporters by attaching negative consequences to the expression, through campaign expenditures, of protected, political speech. See Brief of Amicus Curiae Cato Institute in Support of Petitioners at 14. Similarly, four former Chairmen and one former Commissioner of the Federal Election Commission argue that triggered public funding schemes result in government actors "micromanaging" the spending decisions of candidates and advocacy groups, thereby burdening protected speech. See Brief of Amicus Curiae Four Former Chairmen and One Former Commissioner of the Federal Election Commission in Support of Petitioners at 16. Thus, non-participating candidates are unable to freely fundraise and spend money, due to the fear that their campaign expenditures and political speech will be neutralized through the triggering of opponents' matching public funds. See id.

A group of self-financed Arizona candidates argue that the Act's primary purpose is not to "equalize electoral opportunities," but rather to ensure that participating candidates will be competitive against well-funded, non-participating opponents. See Brief of Amicus Curiae Self-Financing Candidates in Support of Respondents at 35–36. The Committee for Economic Development agrees, adding that the Act increases competition in elections, and as is true in the marketplace, increased competition invariably leads to better outcomes for the public. See Brief of Amicus Curiae Committee for Economic Development in Support of Petitioners at 4–5. Furthermore, the Campaign Legal Center points out that the public funding scheme actually encourages participation by ensuring that participating candidates will remain competitive with privately funded, high-spending opponents. See Brief of Amicus Curiae Campaign Legal Center, et al. in Support of Respondents at 30–31.

top

Analysis

In this case, the Supreme Court will decide whether Arizona’s Citizens Clean Elections Act (the “Act”) violates the First Amendment rights of individual state office candidates and independent expenditure groups. At the heart of the controversy is the Matching Funds Provision of the Act (the "Matching Funds Provision"), in which Arizona provides publicly financed candidates with additional funds beyond the initial disbursement if, in the aggregate, privately financed candidates and their independent financial supporters spend more than the initial disbursement in opposition to the publicly financed candidate. See Brief for Petitioner Arizona Free Enterprise Club’s Freedom Club PAC at 2–3; Brief for Petitioner John McComish at 24. The Arizona Free Enterprise Club’s Freedom Club PAC (“AFE PAC”), John McComish and others sued the state independently, and both appealed from the Ninth Circuit’s holding that the Matching Funds Provision is constitutional. See Brief for Petitioner AFE at 22; Brief for Petitioner McComish at 45. The State of Arizona maintains that the Matching Funds Provision is constitutional, and that any burden on speech is permissible under intermediate scrutiny. See Brief for Respondents, Ken Bennett, et al. at 25.

Level of Scrutiny

The AFE PAC and McComish both argue that the Matching Funds Provision triggers strict scrutiny—the highest level of judicial scrutiny—because it penalizes independent financial supporters and privately financed candidates for spending money above a trigger amount in an election. See Brief for Petitioner AFE at 43–44; Brief for Petitioner McComish at 46. To withstand strict scrutiny, the state must prove that a legislative provision is narrowly tailored to achieve a compelling governmental interest. See Brief for Petitioner AFE at 47. Petitioners liken the Matching Funds Provision to the Millionaire’s Amendment in Davis v. Federal Elections Commission, 554 U.S. 724 (2008), in that it imposes negative consequences on political spending beyond a certain point by candidates and individual groups. See Brief for Petitioner AFE at 24–25; Brief for Petitioner McComish at 42. In Davis, the Supreme Court held that a system in which political opponents received benefits when self-financed candidates spent their own money beyond a certain threshold created a “drag” on free speech, triggering strict scrutiny. See Brief for Petitioner McComish at 42. Petitioners contend that freedom of speech is impermissibly burdened when the State of Arizona forces candidates to choose between spending no money and guaranteeing that a proportional amount of spent money is given to their opponents. See Brief for Petitioner AFE at 27–28; Brief for Petitioner McComish at 47.

Petitioners also analogize the burden placed on their speech to the holding in Pacific Gas & Electric Co. v. Public Utilities Co., 475 U.S. 1 (1986). See Brief for Petitioner AFE at 33; Brief for Petitioner McComish at 51. In Pacific Gas, the Supreme Court held that the First Amendment is violated whenever the government forces private citizens “to help disseminate hostile views” in order to exercise their own right to free speech. See Brief for Petitioner AFE at 35. The Pacific Gas Court reasoned that when the government mandates the dissemination of opposing views, citizens will limit their own speech to prevent the dissemination of views they oppose. See id. at 35. Further, Petitioners argue that the regulation is content-based, in that it releases funds to publicly-financed candidates when independent groups support a privately-financed candidate, but matching funds will not be triggered if an independent group opposes a privately-financed candidate. See Brief for Petitioner AFE at 43–44; Brief for Petitioner McComish at 58–59. McComish argues that, in order for Arizona to enforce this law, it must analyze the content of independent expenditures and alter the funding available for publicly financed candidates based on which candidate the independent expenditure favored or disfavored. See Brief for Petitioner McComish at 59. McComish contends that, because of this content-based government action, strict scrutiny should apply. See id. at 60.

Arizona argues that the appropriate level of scrutiny is intermediate scrutiny. See Brief for Respondents at 24. For the Matching Funds Provision to survive intermediate scrutiny, it has to be shown that the Provision is substantially related to a sufficiently important governmental interest. See id. at 21. Arizona argues that the present case is different from Davis, because it does not involve discrimination against any one actor’s speech, but releases funds according to the total financial activity in the race without differentiating between self-funded and other privately-funded candidates. See id. at 26. The State continues that the provision also does not impact candidates asymmetrically, as in Davis. See id. at 27. Arizona argues that the Davis Court struck down the Millionaire’s Amendment because a candidate’s expenditure over a certain amount of personal funds would cause restraints to be removed only from his privately-financed opponents. See id. Arizona attempts to differentiate the present case from Pacific Gas on the basis that the privately-financed candidate is not forced to state things he disagrees with, nor is he forced to associate himself in any way with the message of his opponent. See id. at 32–33. Arizona also contends that the Matching Funds Provision is not content-based because public funds are available to all publicly-funded candidates, regardless of the message they disseminate with those funds, and funds are released based on financial reporting requirements upheld in prior cases. See id. at 33–34.

Governmental Interest and Relation of Means to that Interest

Petitioners argue that the governmental interest in enforcing the Act is not even a sufficiently important interest under intermediate scrutiny, let alone a compelling interest under strict scrutiny. See Brief for Petitioner AFE at 59; Brief for Petitioner McComish at 62. Petitioners argue that the main purpose of the law is to “level the playing field,” or ensure that a publicly-financed candidate can be competitive with a privately-financed candidate in opportunities, resources, and influence. See Brief for Petitioner AFE at 39–40; Brief for Petitioner McComish at 63–64. McComish argues that burdening free speech for this reason is unjustifiable at both levels of scrutiny because the government’s involvement in regulating speech is inherently suspect. See Brief for Petitioner McComish at 58. He also contends that the interest in reducing actual corruption, or the appearance of it, in state elections is only served indirectly by the Act. See id. at 81. McComish further argues that strict contribution limits, as well as public disclosure requirements, make the probability of illegal quid pro quo donations extremely unlikely, and further legislation, such as the Act in question, is only going to be cumulative in effect. See id. at 68. McComish also suggests a different form of corruption inherent in the public finance system: volunteers may “bundle” various five-dollar donations for the candidate, allowing the candidate to reach the required donation limit much more efficiently. See id. at 75. McComish argues that groups who volunteer to bundle for candidates exercise a coercive power similar to traditional campaign donors. See id. at 76.

Arizona responds that the interest in fighting corruption is the main purpose of the Act, and is both sufficiently important and compelling. See Brief for Respondents at 42. Arizona argues that the quid pro quo corruption is a real and widely-acknowledged problem, in light of the State's history of political scandal. See id. at 45. Arizona claims that the public financing option removes even the appearance of such corruption, and removes any coercive effect that dependence on private funds may put on a privately-financed candidate. See id. at 43. Arizona also stresses that the Matching Funds Provision is essential to making public financing a viable option for political candidates. See id. at 46. Without it, the State would have to provide a lump sum, resulting in dramatic underfunding or overfunding of races depending on the competitiveness of any one race. See id. at 9. Arizona claims this would result in an inefficient and wasteful system. See id. Finally, Arizona argues that the Act, unlike the law at issue in Davis, does not put a spending cap on any one party, and therefore does not seek to limit spending. See id. at 35–36.

top

Conclusion

The Court’s decision in this case will clarify whether a public funding scheme for elections impermissibly violates the First Amendment when it provides matching funds to a publicly-financed candidate without placing any cap on spending for the privately-financed candidate. Petitioners argue that this law is a violation of their First Amendment right to speak without supporting the speech of their political opponents. If the Act is found unconstitutional, several other states with similar campaign financing laws will be forced to amend or repeal the laws. Arizona argues that this law is a constitutional method of fighting actual and apparent political corruption. If this scheme is found to be constitutional, other states will be free to adopt it as a practical way to publicly fund their political candidates.

top

Authors

Prepared by: James McHale and Alexander Malahoff

Edited by: Eric Johnson

Additional Sources

The New York Times, Adam Liptak: Justices to Assess Arizona Campaign Financing (Nov. 29, 2010)

CNN, Bill Mears: High Court to Review Arizona Election Finance Law (Nov. 29, 2010)

Huffington Post, Paul Davenport: Supreme Court Blocks Public Financing in Arizona Elections (June 8, 2010)

top

Edited by