S.Ct.: Arizona Election Financing Law Violates 1st Am.

In a 5-4 decision pitting conservatives against liberals, the Supreme Court held that a provision in the Arizona Citizens Clean Elections Act that matches funding for publicly financed candidates to expenditures for privately financed candidates violates the First Amendment. Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, No. 10-238, 2011 WL 2518813 (June 27, 2011). Chief Justice Roberts wrote the opinion of the Court, joined by Justices Scalia, Kennedy, Thomas, and Alito. Justice Kagan filed a dissent, joined by Justices Ginsburg, Breyer, and Sotomayor.

The Arizona Citizens Clean Elections Act of 1998 grants public funds to candidates for state office who gather five-dollar contributions from a sufficient number of voters in the state. These candidates gain an initial sum of money from the state government. If expenditures for a privately funded candidate, either by the candidate’s campaign or independent group, exceed the initial amount, the state provides additional matching funding to all the publicly funded candidates in the race, up until they have received three times the initial allocation. Spending by independent groups against a publicly funded candidate also can lead to matching funds.

Five state officeholders and two independent groups challenged the matching funds provision on First Amendment grounds. The District Court for the District of Arizona found the provision unconstitutional, but the Ninth Circuit reversed. The Supreme Court, in turn, reversed the Ninth Circuit.

The Court first considered whether the Arizona law substantially burdens speech. It compared the instant case to Davis v. Federal Election Comm’n, 554 U.S. 724 (2008). In Davis, the Court struck down a federal election law provision allowing a candidate for the House to collect larger individual contributions if the opponent spent more than $350,000 of his or her own money. Chief Justice Roberts wrote that the Arizona law is “more constitutionally problematic” because (1) publicly financed candidates automatically receive additional money when expenditures for their privately funded opponents exceed the initial allotment, (2) more than one publicly financed candidate may receive extra money, producing a “multiplier effect,” and (3) a privately financed candidate may not be able to avoid exceeding the initial cap if independent groups intervene. Thus, the Court found that the matching funds provision substantially burdens privately financed candidates. It also found a substantial burden on independent groups, remarking that the law forces a choice to “trigger matching funds, change your message, or do not speak.”

The Court then countered Arizona’s arguments that there is no substantial burden. It found that, even if the law increases the speech of publicly financed candidates, it is “restrict[ing] the speech of some elements of our society in order to enhance the relative voice of others,” which is “wholly foreign to the First Amendment.” Buckley v. Valeo, 424 U.S. 1, 48-49 (1976). The majority decided that, even though no one is forced to act to bring about the campaign subsidies, the subsidies occur “in direct response to the political speech of another.” It disputed Arizona’s claim of lack of evidence of a burden, focusing instead on the choice facing candidates and independent groups and on the small number of instances of speech restrictions in the record. Returning to the “direct response” nature of the matching funds, the Court dispensed with Arizona’s (correct) assertion that a lump sum in the maximum possible amount would be constitutionally permissible.

Having established a substantial burden, the opinion examined whether it advances a compelling state interest. It interpreted the main purpose of the Arizona law as “leveling the playing field” and held that it is not a legitimate interest. The Court then found that, while combating corruption is a compelling interest, the matching funds provision does not advance it. Relying on Davis, 554 U.S., at 740-741, and Buckley, 424 U.S., at 53, it noted that the law discourages the use of personal funds, which it claimed helps prevent corruption. The majority was satisfied that the independent group expenditures inhibited by the law do not risk corruption. Then it concluded that, given contribution limitations, disclosure requirements, and the availability of public funding, the Arizona law did not have much “marginal corruption deterrence.” Also, the Court found insufficient arguments that the law reduces corruption by encouraging a greater number of publicly financed candidates and that the law achieves the aim of public financing at lower cost.

Justice Kagan’s dissent focused on the ineffectiveness of previous measures to curb corruption in elections, especially the concern that contribution limitations merely give power to “bundlers.” It found that the Arizona law’s “Goldilocks solution” appropriately ensures that the public funds are enough to induce candidates to accept public financing, while not costing the state too much. In the process of disputing every point of the majority opinion, Justice Kagan constructively commented on the “two great fault lines run through our First Amendment doctrine: one, between speech restrictions and speech subsidies, and the other, between discriminatory and neutral government action.” Since the Arizona law provided for viewpoint-neutral subsidies, she declared that it does not burden speech.

Even assuming such a burden exists, the dissent noted that the law advances the compelling interest of combating corruption since matching funds would be more effective than the traditional lump sum, and that, even if the law also sought to make elections more evenly competitive, the second purpose would not invalidate the law, given the first interest advanced.

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