Supreme Court Strikes Down ‘Millionaire’s Amendment’ to Campaign Finance Law

For the second time in two terms, a 5 to 4 decision by the U.S. Supreme Court has struck down a provision of the Bipartisan Campaign Reform Act of 2002, better known as the McCain-Feingold Act, because it violated the First Amendment.

The Court’s decision in Davis v. Federal Election Commission, 128 S.Ct. 2759 (2008), decided June 26, 2008, struck down a provision of the law known as the “Millionaire’s Amendment,” at 2 U.S.C. section 441a–1(a), which requires candidates for the U.S. House of Representatives who substantially finance their own campaigns to disclose more information about their spending, while raising limits placed on how much money their opponents can accept.

The majority opinion by Justice Samuel A. Alito Jr. said that the law impermissibly burdened candidates’ First Amendment right to spend their own money for campaigning and advertising, and that the law’s attempt to “level electoral opportunities” among candidates has “ominous implications” for American voters’ abilities to freely evaluate and compare those running for office. Alito was joined by Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Antonin Scalia and Clarence Thomas. Justices David H. Souter, Ruth Bader Ginsburg, and Stephen G. Breyer joined in a dissent by Justice John Paul Stevens, who called the Millionaire’s Amendment “modest, sensible, and plainly constitutional.”

Federal law sets out various rules for candidates for federal office to receive campaign money at 2 U.S.C. section 441a et seq. The law limits candidates to taking no more than $2,300 from any one individual donor during a 2-year election cycle, and candidates cannot take money from anyone who has contributed an overall total of more than $42,700 to political campaigns during the election cycle. The law also places limits on how much money a candidate may accept from the general funds of national or state political parties. The limit is $40,900 for House seats in states with more than one seat.

Under section 319(a) of 2 U.S.C. section441a–1(a), the Millionaire’s Amendment, when one candidate spends more than $350,000 in personal money to support his or her campaign, the limits placed on the amount of money the opposing candidate can accept are raised. The limit on individual donations triple, to $6,900; the candidate may accept money from donors who have already met the $42,700 overall limit; and there is no limit on how much the candidate can accept from the general funds of national or state political parties.

Under section 319(b) of the act, upon entering the race, candidates who intend to exceed the $350,000 personal funds amount must inform the Federal Election Commission (FEC) and all other candidates for the seat how much more than $350,000 he or she plans to spend, file another notification within 24 hours of actually passing the $350,000 mark, and file additional notifications with each expenditure of $10,000 of personal funds after the first two notifications are made. The second notification and those declaring expenditures of $10,000 must provide the date and amount of each expenditure. By contrast, non-self-financing candidates need only declare no intention of spending personal funds at the outset of the race.

Jack Davis, a twice-unsuccessful congressional candidate from New York who spent $3.5 million of his own money on campaigns in 2004 and 2006, challenged the Millionaire’s Amendment in Davis v. Federal Election Commission, arguing that the law unconstitutionally awarded Davis’ opponents when he simply spent his own money on his campaign, effectively enabling them to raise more money to finance speech that counteracted and diminished the effectiveness of Davis’ speech.

The Court first addressed the FEC’s challenges to Davis’ standing to sue and its argument that, since the election has already been decided, the issue was moot. In a section of the majority opinion with which all nine justices joined, the court ruled that Davis had sufficiently shown that the “threatened injury” to his campaign via the disclosure and funding rules of section 319(a) and (b) were “real, immediate, and direct,” even though his opponent never actually made use of the higher contribution limits of section 319(a), and thus he had standing for the appeal.

On the issue of mootness, the Court said the Davis case “closely resembele[d]” its 2007 case Federal Election Commission v. Wisconsin Right To Life, Inc., 127 S. Ct. 2652 (2007) where the court ruled that case was not moot, even though the election at issue was over, because of the short duration of the controversy and the likelihood that a similar situation would arise in the future. It therefore found Davis’ case was not moot. (For more on the FEC v. Wisconsin Right to Life case, see “In FEC v. Wisconsin Right to Life, Court Upholds As-Applied Challenge to McCain-Feingold Act” in the Summer 2007 Silha Bulletin.)

On the merits, Justice Alito’s majority opinion said the Court has “never upheld the constitutionality of a law that imposes different contribution limits for candidates who are competing against each other, and we agree with Davis that this scheme impermissibly burdens his First Amendment right to spend his own money for campaign speech.”

The Court relied largely on reasoning it applied to its 1976 decision in Buckley v. Valeo, 424 U.S. 1 (1976), in which it struck down the Federal Election Campaign Act of 1971’s limits on the campaign expenditures of candidates, citizens, and associations. There the court ruled that the limits were unconstitutional because they placed substantial and direct restrictions on the ability to engage in political expression that was protected by the First Amendment.

Distinguishing the Davis case from Buckley, Alito wrote “while [the McCain-Feingold Act] does not impose a cap on a candidate’s expenditure of personal funds, it imposes an unprecedented penalty on any candidate who robustly exercises that First Amendment right … [requiring] a candidate to choose between the First Amendment right to engage in unfettered political speech and subjection to discriminatory fundraising limitations.”

The Court said the FEC failed to show that “level[ing] electoral opportunities” amounted to “a compelling state interest” which justified the burden section 319(a) places on candidates’ speech.

“Different candidates have different strengths,” Alito wrote. “Leveling electoral opportunities means making and implementing judgments about which strengths should be permitted to contribute to the outcome of an election. The Constitution, however, confers upon voters, not Congress, the power to choose the Members of the House of Representatives … and it is a dangerous business for Congress to use the election laws to influence the voters’ choices.”

The court ruled that because it found the limits provided for in section 319(a) unconstitutional, section 319(b)’s disclosure requirements, which are meant to implement the limits, must also be found unconstitutional.

In dissenting, Stevens wrote that Davis’ argument that the Millionaire’s Amendment punishes candidates who choose to self-fund by offering advantages to their opponents and limiting their ability to speak and participate was “unpersuasive,” and in fact, “[t]he Millionaire’s Amendment quiets no speech at all.”

“Enhancing the speech of the millionaire’s opponent, far from contravening the First Amendment, actually advances its core principles,” Stevens wrote. “If only one candidate can make himself heard, the voter’s ability to make an informed choice is impaired. And the self-funding candidate’s ability to engage meaningfully in the political process is in no way undermined by this provision.”

Stevens also disagreed with the majority’s reliance on Buckley to conclude that “‘governmental interest in eliminating corruption or the perception of corruption’ is the sole governmental interest sufficient to support campaign finance regulations,” a suggestion he said was “simply wrong.”

To the contrary, Stevens wrote that the Court had “long recognized” a strong governmental interest in “reducing both the influence of wealth on the outcomes of elections, and the appearance that wealth alone dictates those results,” citing several cases, including Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990) and Federal Election Comm’n v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986).

According to a June 30 First Amendment Center report, experts in election law and the First Amendment say the ruling could have broad effects on other restrictions on campaign spending. Rick Hasen, an election law expert at Loyola Law School in Los Angeles, said, “corporate and union spending limits are clearly on borrowed time.”

The report said that according to University of Chicago law professor Geoffrey Stone, the decision demonstrates that the Court now has a solid majority of five justices – Scalia, Thomas, Kennedy, Alito and Chief Justice Roberts – who are hostile to campaign-finance reform on First Amendment grounds. The shift is attributable to the arrival in 2006 of Alito as the successor to Justice Sandra Day O’Connor, who generally supported campaign-finance laws, the report said.

The First Amendment Center report is available online at http://www.firstamendmentcenter.org/analysis.aspx?id=20238. The First Amendment Center is a nonprofit organization focused on education and information about First Amendment issues based at Vanderbilt University in Nashville, Tenn. and Arlington, Va.

– Patrick File
Silha Fellow and Bulletin Editor

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This page contains a single entry by cla published on October 14, 2009 12:53 PM.

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