The Return of Spending Limits: Campaign Finance after Landell V. Sorrell

Briffault, Richard, Fordham Urban Law Journal

INTRODUCTION

On August 18, 2004, the United States Court of Appeals for the Second Circuit held that the First Amendment, as interpreted by the Supreme Court in Buckley v. Valeo, (1) does not preclude mandatory limitations on campaign expenditures. (2) In Landell v. Sorrell, (3) the court concluded that limitations imposed by the state of Vermont on candidate spending in state election campaigns are "supported by [the state's] compelling interests in safeguarding Vermont's democratic process from 1) the corruptive influence of excessive and unbridled fundraising and 2) the effect that perpetual fundraising has on the time of candidates and elected officials." (4) To be sure, the court declined to uphold the Vermont limits and, instead, remanded the case to the district court for a determination of whether the challenged spending limits are the "least restrictive means" of "furthering the State's compelling anti-corruption and time-protection interests." (5) Nevertheless, Landell is potentially one of the most important decisions in the evolution of modern campaign finance law as it marks the first time since Buckley that a court has held that a candidate expenditure limitation can be constitutional.

Although path-breaking, Landell is not entirely unprecedented. In recent years, several communities have sought to challenge Buckley by adopting spending limits for local or state judicial candidates. (7) These restrictions were invalidated on the authority of Buckley, but a number of the judges who heard the challenges to these laws displayed some restiveness with Buckley's rejection of spending limitations. (8) So too, although the Supreme Court has for nearly three decades continued to adhere to Buckley, aspects of the Court's recent campaign finance decisions suggest the Court might be open to rethinking Buckley's premises. (9) Landell could very well provide the Court with the opportunity to reconsider Buckley. (10)

The Landell opinion, while very significant, is also limited in several respects. The Second Circuit's suggestion that voluntary public funding with spending limits may be a less restrictive means of attaining the goals of spending limits is troubling, and threatens to pit these two complementary tenets of campaign finance reform against each other. Moreover, although Landell challenges Buckley's conclusion concerning spending limits, it still works largely within Buckley's basic conceptual framework. As a result, the Second Circuit's analysis does not reflect the full range of possible justifications for spending limitations.

Part I of this Article will analyze the Landell decision and situate it in the evolving judicial debate over campaign finance regulation. Part II will discuss the question, raised by the Second Circuit for the Landell district court on remand, whether spending limits are the least restrictive means of attaining the compelling interests relied on by the court. Part III will then examine those interests as well as other justifications for spending limits. As I will suggest, the constitutionality of spending limits in principle (11) would rest on a stronger foundation if other important interests directly relevant to the financing of democratic elections, particularly electoral competitiveness and voter equality, were taken into account.

I. LANDELL AND THE EVOLVING JUDICIAL CONSIDERATION OF CANDIDATE EXPENDITURE LIMITATIONS

A. Buckley v. Valeo

Modern campaign finance doctrine begins with the Supreme Court's holding in Buckley v. Valeo that campaign finance regulation directly implicates fundamental First Amendment freedoms of speech and association. (12) In so doing, Buckley sharply distinguished between limits on contributions and limits on expenditures. (13) The Court held that expenditures involve direct communications with the voters, and thus, expenditure ceilings "impose direct and substantial restraints on the quantity of political speech." (14) As a result, any restriction on expenditures must be subject to strict judicial scrutiny and narrowly tailored to promote a compelling state interest. (15) By contrast, the Court found that a contribution does not entail an expression of political views; rather, it "serves as a general expression of support for the candidate and his views, but does not communicate the underlying basis for the support." (16) Although contributions fund the communications of candidates, "the transformation of contributions into political debate involves speech by someone other than the contributor." (17) Thus, contribution restrictions do not trigger the same exacting judicial review as spending limits. Moreover, the Court found that contribution restrictions advance the compelling government interests of preventing corruption and the appearance of corruption. (18) As the Court noted, "[t]o the extent that large contributions are given to secure a political quid pro quo from current and potential office holders, the integrity of our system of representative democracy is undermined." (19) Based on the lower speech value of campaign contributions and the compelling interest of preventing corruption and the appearance of corruption, Buckley sustained the Federal Election Campaign Act ("FECA") limits on donations by individuals and political committees to federal candidates and on aggregate annual donations by individuals for federal election purposes. (20)

In Buckley, however, the Court found that "[n]o governmental interest that has been suggested is sufficient to justify" FECA's limitations on expenditures by federal candidates. (21) The Court considered three arguments for spending limits: 1) preventing corruption and the appearance of corruption; 2) promoting candidate equality; and 3) holding down the high and rising costs of campaigns. (22) Although the Court found that the prevention of corruption and the appearance of corruption were important government interests, it determined that FECA's contribution limits and disclosure requirements already took care of the corruption problem. The Court thus concluded that the goals of preventing corruption and the appearance of corruption could not justify the heavy burden on First Amendment rights posed by FECA's expenditure limits. (23) The Court also specifically rejected the argument that expenditure restrictions are necessary to reduce the incentive to circumvent contribution limits, finding instead that "[t]here is no indication that the substantial criminal penalties for violating the contribution ceilings combined with the political repercussions of such violations will be insufficient to police the contribution provisions." (24)

With respect to candidate equality, the Court found it was not clear that spending limitations would promote equality. Rather, such limits could operate "to handicap a candidate who lacked substantial name recognition or exposure of his views before the start of the campaign." (25) More generally, the Court found that, with contribution limitations, different levels of spending by candidates posed little concern: "[T]he financial resources available to a candidate's campaign, like the number of volunteers recruited, will normally vary with the size and intensity of the candidate's support. There is nothing invidious, improper, or unhealthy in permitting such funds to be spent to carry the candidate's message to the electorate." (26)

As for the third argument for spending limits--holding down campaign spending levels--the Court held that there was simply no governmental interest in limiting the amount of money spent on election campaigns. (27)

Buckley invalidated not only limitations on candidate spending but also FECA's limits on so-called independent spending, that is, expenditures by individuals and groups, acting independently of any candidate, to support or oppose a candidate. (28) The Court held that the anti-corruption rationale could not justify these restrictions because "It]he absence of prearrangement and coordination of an expenditure with the candidate ... alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate." (29) Nor could these limits be justified by the "governmental interest in equalizing the relative ability of individuals and groups to influence the outcome of elections" since the First Amendment precludes restricting the speech of some "to enhance the relative voice of others." (30)

B. Recent Judicial Stirrings

Although the contribution/expenditure dichotomy and strict judicial review of spending limits remain fundamental to the Supreme Court's campaign finance jurisprudence, (31) in recent years some lower federal courts have expressed discontent with Buckley's apparent constitutional preclusion of spending limits. These stirrings reflect grass-roots political resistance to Buckley and foreshadowed the Second Circuit's ruling in Landell. The beginnings of a new judicial debate over spending limits can be seen in Kruse v. City of Cincinnati (32) and Hornans v. City of Albuquerque. (33)

1. Kruse v. City of Cincinnati

In 1995, the Cincinnati City Council adopted an ordinance imposing campaign expenditure limitations on candidates for the council. (34) The action appears to have been motivated in part by a desire to challenge Buckley. (35) The city contended that the spending limit was justified by Buckley's concern with preventing corruption and the appearance of corruption. It presented evidence that wealthy donors dominated the financing of city elections, and that the overwhelming majority of local residents believed that large contributors wielded undue influence over the local political system. (36) The Sixth Circuit, however, held that Buckley "foreclose[d]... as a matter of law" the use of the anti-corruption argument to justify a spending limit. (37) The court went on to find that, as a matter of fact, the city had failed to prove spending limits were strictly necessary to prevent corruption since the city had not imposed contribution limits prior to its adoption of spending limits. (38) Thus, the Sixth Circuit held that the city had "no evidence that contribution limits are inadequate to prevent actual and perceived quid pro quo corruption." (39)

The court also dismissed a new justification for spending limits--reducing the time burden that fundraising poses for officeholders and candidates. Kruse found this was no more than a restatement of the argument, rejected in Buckley, that there is a compelling public interest in reducing campaign costs. (40) Finally, the court determined that arguments raised by the city that spending limits are necessary to enable candidates without access to wealth to participate in the electoral process, and to enable the voters to consider those candidates, were barred by Buckley's rejection of equality rationales for expenditure limitations. (41)

One member of the Kruse panel, however, took issue with the dismissal of the time-protection argument, and also raised the possibility that spending limitations could be justified by "the interest in preserving faith in democracy." (42) In his concurrence, Judge Cohn found that officeholder and candidate time-protection and the prevention of "public cynicism" about democracy attributable to unlimited spending are important interests that are conceptually distinct from the concern about campaign costs dismissed in Buckley. (43) Although Judge Cohn agreed with the majority that the city had "failed to develop a compelling factual record" and thus concurred in the result, he sought to leave an opening for future efforts to limit campaign spending by concluding that "Buckley ... is not a broad pronouncement declaring all campaign expenditure limits unconstitutional." (44) Rather, he suggested that

   [i]t may be possible to develop a factual record to establish that
   the interest in freeing officeholders from the pressures of
   fundraising so they can perform their duties, or the interest in
   preserving faith in our democracy, is compelling, and that campaign
   expenditure limits are a narrowly tailored means of serving such
   an interest. (45)

2. Homans v. City of Albuquerque

Three years later, Judge Cohn's suggestion was embraced by Judge Vazquez of the federal district court in New Mexico in a challenge to Albuquerque's spending limits for municipal elections. (46) Albuquerque had adopted spending limits in 1974 and, amazingly enough, despite Buckley those limits remained on the books and were apparently enforced through 1995. (47) The limits were temporarily enjoined in 1997, but restored and amended in 1999. (48) When a mayoral candidate sought to enjoin their enforcement in the 2001 race, Judge Vazquez denied the plaintiff's request for a preliminary injunction, concluding that the plaintiff had shown neither a likelihood of success on the merits nor that the public interest would benefit from an injunction. (49)

Rather, the court found on the record that for more than two decades the Albuquerque spending limits had promoted competitive elections, increased citizen confidence in government, led to increased voter turnout, reduced the role of large donors, created opportunities for lower-income and lower-middle-income candidates, and generally improved the quality of electoral campaigns without limiting the ability of candidates to campaign effectively. (50) Based on that record, the court found the city had demonstrated its spending limits were necessary to promote the compelling governmental interest in "preserving the public faith in democracy, and reducing the appearance of corruption." (51) The district court also concluded, based on the voter turnout data, that circumstances had changed in the quarter-century since Buckley so that "it is clear today that the public perception of Albuquerque citizens is that unlimited spending infects the political process." (52) The court echoed Judge Cohn's opinion in Kruse in citing the effect of the fundraising "arms race" in forcing candidates to "spend innumerable hours eliciting contributions rather than performing public duties or ascertaining the interests of those citizens unable to make large financial contributions." (53) The financial arms race, in turn, reinforced the public perception of special interest domination of elections. (54) By ending the arms race and reducing the role of money in elections, the Albuquerque spending limit was narrowly tailored to advance a compelling government interest. (55)

Less than a week later, the Tenth Circuit reversed and held that the interests identified by the district court were "really no different than the interests deemed insufficient to justify expenditure limitations in Buckley" and granted a preliminary injunction against enforcement of the Albuquerque limits. (56)

Subsequently, the district court conducted a full trial on the merits. The court again found that unlimited campaign spending interfered with competitive elections by giving incumbents an advantage. The court noted that all the mayors seeking reelection in Albuquerque since the adoption of spending limits had been defeated, compared with the eighty-eight percent reelection rate of incumbent mayors in other cities. (57) The court again found that turnout in municipal elections had been higher in Albuquerque under spending limits than in other cities without spending limits, and that Albuquerque voters considered their spending-limited elections to be less influenced by special interest money than federal elections, in which spending is not subject to limitation. (58) Looking at federal election practices, the court found that it is easy for large donors to circumvent contribution limitations by bundling. (59) Moreover, with unlimited spending, candidates are "under a great deal of pressure to engage in fundraising activities and to depend on the goodwill of their donors." (60) The court again concluded that the local spending limit did not interfere with effective campaigning; indeed, five of the eight candidates, including the winner and the second- and third-place finishers in the non-limited 2001 election, spent less than the enjoined spending limit would have allowed. (61) Ultimately, the district court determined, based on the Tenth Circuit's interpretation of Buckley, that it was "constrained to find" that the city's expenditure limits were unconstitutional. (62) If the court had been free to apply the analysis it had used in initially denying the preliminary injunction, however, the limits would have been upheld as:

   narrowly tailored to serve the compelling interests of deterring
   corruption and the appearance of corruption, promoting public
   confidence in government, permitting candidates and officeholders
   to spend less time fundraising and more time performing
   their duties as representatives and interacting with voters,
   increasing voter interest in and connection to the electoral system,
   and promoting an open and robust public debate by encouraging
   electoral competition. (63)

In the final decision in the Homans saga, (64) a Tenth Circuit panel affirmed the district court, but split over whether Buckley was an insurmountable barrier to all spending limits, and whether …

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Publication information: Article title: The Return of Spending Limits: Campaign Finance after Landell V. Sorrell. Contributors: Briffault, Richard - Author. Journal title: Fordham Urban Law Journal. Volume: 32. Issue: 3 Publication date: May 2005. Page number: 399+. © 2009 Fordham Urban Law Journal. COPYRIGHT 2005 Gale Group.

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