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Federal Election Commission | United States of America

Cao v. FEC

Summary

On January 27, 2010, the U.S. District Court for the Eastern District of Louisiana granted in part and denied in part the motion of Louisiana Congressman Anh “Joseph” Cao, the Republican National Committee (RNC) and the Republican Party of Louisiana (LA-GOP, formerly “RPL”) (collectively, the Plaintiffs) to certify to the Fifth Circuit Court of Appeals challenges to the constitutionality of the coordinated party expenditure limits and party contribution limits. The court certified questions regarding whether the Plaintiffs had sufficient injury to create a constitutional case, whether certain coordinated expenditure and contribution limits as applied to coordinated communications violate the Plaintiffs’ First Amendment rights and whether the $5,000 limit on contributions from political parties to candidate campaigns violates a political party’s First Amendment rights because it is the same limit as for political action committees and the limit is not adjusted for inflation. The district court denied certification and granted summary judgment in favor of the FEC on all of Plaintiffs’ other claims.

Background

Under the Act, a national party committee and state party committees may make expenditures in connection with the general election campaigns of federal candidates that are coordinated with these candidates. 11 CFR 109.30. Coordinated party expenditures do not count against the contribution limits, but are subject to a separate set of limits. 11 CFR 109.32.

The Act provides a formula for calculating coordinated party expenditure limits. For House candidates, the coordinated party expenditure limit is $10,000 increased by the Cost of Living Adjustment (COLA) or, in states with only one representative, the same as the Senate limit. For Senate candidates, the coordinated party expenditure limit is the greater of the number of the state voting age population multiplied by two cents and increased by the COLA, or $20,000 increased by the COLA. For Presidential candidates, the coordinated party expenditure limit is the number of the national voting age population multiplied by two cents and increased by the COLA. 11 CFR 109.32.

Court case

On December 4, 2008, Louisiana Congressional candidate Anh "Joseph" Cao, the Republican National Committee (RNC) and the Republican Party of Louisiana (LA-GOP, formerly "RPL") (collectively the Plaintiffs) filed an amended complaint in the U.S. District Court for the Eastern District of Louisiana challenging the constitutionality of the Party Expenditure provision limits at 2 U.S.C. §441a(d)(2)-(3) as applied to their planned coordinated party expenditures. The Plaintiffs allege that the Party Expenditure Provision of the Federal Election Campaign Act (the Act) and the $5,000 contribution limit at 2 U.S.C. §441a(a)(2)(A) are unconstitutional as applied to party coordinated expenditures that are not "unambiguously campaign related" (Buckley v Valeo, 424 U.S. 1, 81 (1976)) or "functionally identical to contributions" (FEC v. Colo. Rep. Fed. Campaign Comm., 533 U.S. 431, 468 n.2). In addition, the Plaintiffs argue that the application of multiple coordinated expenditure limits for the same office is unconstitutional because it is ineffectual in preventing corruption and that the base amounts are too low. The Plaintiffs also challenge the constitutionality of the $5,000 contribution limit on the grounds that the same limits apply to parties as to political action committees, and that the limit it is too low and not indexed for inflation. The original complaint was filed by the Plaintiffs on November 13, 2008.

The RNC and LA-GOP allege that they have spent or committed to spend their coordinated party expenditure limits for Mr. Cao. They state that they wish to continue to coordinate with federal candidates to engage in:

  • Issue advocacy (including ads that mention candidates);
  • Grassroots and direct lobbying on pending executive or legislative matters;
  • Grassroots lobbying or other public communications concerning state ballot initiatives;
  • Public communications involving support or opposition to state candidates, support or opposition to political parties or support or opposition to candidates generally of a political party; and
  • Voter registration, voter identification, get-out-the-vote and generic campaign activity that (as to each category) is "non-targeted."

RNC and LA-GOP also allege that they intended to engage in direct and grassroots lobbying responding to the legislative issues that will arise in Congress by lobbying incumbent U.S. Representative William Jefferson on those issues. The RNC and RPL allege that they wished to reference Representative Jefferson within 90 days of the general election on December 6, 2008, in which Representative Jefferson and Mr. Cao were both federal candidates. Moreover, the RNC and RPL allege that they would have liked to have the material involvement of, and substantial discussion with, Mr. Cao concerning the intended communications. The RNC and RPL claim that because they had already met their contribution and coordinated party expenditure limits, and they had already worked with and had substantial discussions with Mr. Cao concerning his plans and needs, they would have run the risk of an investigation by the FEC and being considered in violation of the Act.

In the amended complaint, the Plaintiffs challenge the constitutionality of the Party Expenditure Provision and the $5,000 party contribution limit. With regard to the coordinated party expenditure limits, they allege that the phrase "in connection with the general election campaign of a candidate," when used to limit party expenditures under 2 U.S.C. §441a(d)(2)-(3), is "unconstitutionally vague and overbroad, and beyond Congressional authority to regulate federal elections, unless it is limited to activity that is unambiguously campaign related." The Plaintiffs assert that the only party activities that are "unambiguously campaign related" are:

  • Express advocacy communications;
  • "Targeted" federal election activity (voter registration, voter identification, get-out-the-vote and generic campaign activity that is "targeted to elect the federal candidate involved");
  • Paying a candidate’s bills; and
  • Distributing a candidate’s campaign literature.

The Plaintiffs argue that the Party Expenditure Provision "is vague, overbroad, and beyond the authority of Congress to regulate elections, all in violation of the First and Fifth amendments."

In addition, the Plaintiffs argue that it is unconstitutional to treat an express advocacy communication as a coordinated party expenditure if it constitutes the party’s "own speech," as opposed to paying the candidate’s bills. Plaintiffs argue that restrictions on the party’s own speech are expenditure restrictions, rather than contribution restrictions, and expenditure restrictions have been found unconstitutional. Plaintiffs assert that, to the extent that the Provision is applied to restrict a party’s "own speech," it is subject to strict scrutiny and is in violation of the First Amendment.

The Plaintiffs further challenge the expenditure limits of the Party Expenditure Provision as they apply to House and Senate candidates on two main points: the use of multiple limits for the same office and the level of the base amount. They argue that in allowing multiple expenditure limits, the government acknowledges that candidates are not subject to corruption at lesser amounts, thus rendering the lower limits unconstitutional because they are not supported by an anti-corruption interest. They also argue that the rates are too low "to allow parties to fulfill their historic and important role in our democratic republic," thus violating the First Amendment guarantees of free speech and association.

In addition, the Plaintiffs challenge the application to parties of the $5,000 contribution limit in 2 U.S.C.§441a(a)(2)(A) for multicandidate political committees generally. The Plaintiffs assert that, as applied to coordinated or "in-kind" contributions, the limit is “unconstitutionally vague and overbroad, and beyond Congressional authority to regulate federal elections” to the extent that it is not restricted to expenditures that are "unambiguously campaign related." The Plaintiffs additionally challenge the $5,000 contribution limit for both in-kind and direct contributions because the same limit applies to both parties and political action committees. The Plaintiffs argue that "PACs and political parties must be treated differently to allow political parties to fulfill their historic and important role in our democratic republic." Finally, the Plaintiffs allege that the $5,000 limit is unconstitutional on its face because it is too low and is not adjusted for inflation. They argue that when Congress enacted the limit, $5,000 was considered sufficient to eliminate corruption. However, they allege that due to annual inflation, the value of the dollar amount is now lower than Congress originally intended.

The Plaintiffs ask the court for a Declaratory Judgment as to all challenged provisions and a permanent injunction enjoining the FEC from enforcing the challenged provision as applied to the Plaintiffs, their intended activities and all other entities similarly situated.

District court decision

On January 27, 2010, the district court granted in part the Plaintiffs’ Motion to Certify. Four questions were found nonfrivolous and certified to en banc Fifth Circuit Court of Appeals. The defendant’s Motion for Summary Judgment was granted for all issues not certified to the Fifth Circuit.

Standing. The court found nonfrivolous the question whether Plaintiffs had alleged sufficient injury to create a constitutional "case or controversy" within the judicial power of Article III. However, the court held that LA-GOP does not have standing to bring a Motion to Certify under §437h of the Act, as LA-GOP is neither a national committee of a political party nor an individual eligible to vote for President.

Unambiguously campaign related. The court found frivolous the Plaintiffs’ arguments that several provisions of the Act are vague, overbroad or beyond Congress’ authority to regulate because they allegedly restrict speech that is not "unambiguously campaign related." The provisions challenged under that theory were those that limit expenditures "in connection" with a candidate’s campaign (§§441a(d)(2-3)), limit to $5,000 contributions from multicandidate political committees to any candidate (§441a(a)(2)(A)) and define expenditures "made in cooperation, consultation or concert" with a candidate as contributions (§441a(a)(7)(B)(i)).

Own speech. The court found non-frivolous the Plaintiffs’ argument that coordinated expenditures cannot be constitutionally limited if they are the party’s "own speech." The court noted that in both Buckley, 424 U.S. at 47, and Colorado II, 533 U.S. at 457, 463-64, the Supreme Court reaffirmed that coordinated expenditures are comparable to contributions under First Amendment analysis. However, the district court stated that coordinated expenditures that explicitly convey an underlying basis for support arguably begin to look more like a "direct restraint . . . on political communication." Buckley, 424 U.S. at 21. Thus, the court found the argument non-frivolous.

Constitutionality of coordinated expenditure limits. The court found frivolous the Plaintiffs’ argument that Congressional discretion to set different coordinated expenditure limits in different races in different states violates Plaintiffs’ First Amendment rights. The court also held that the variable voting-age population formula is constitutional. The court noted that legislators should determine and assess limits, not judges. The court did not certify Plaintiffs’ argument that current coordinated expenditure limits are unconstitutionally low and violate First Amendment rights. The court found no evidence that the effect of then-candidate Cao’s speech was weakened by a lack of resources due to these limits.

The court granted the FEC’s Motion for Summary Judgment on these issues.

Constitutionality of $5,000 party contribution limit. The court found non-frivolous Plaintiffs’ question as to whether the $5,000 contribution limit in 2 U.S.C. §441a(2)(A) is unconstitutional because it imposes the same limits on parties as it does on political action committees (PACs). The district court stated that Colorado II had suggested that parties may warrant additional constitutional protections but had at the time declined to address this specific question. 533 U.S. at 448 n.10. The district court stated that this was sufficient for the court to find the Plaintiffs’ argument non-frivolous.

The court also found non-frivolous the Plaintiffs’ argument that the $5,000 contribution limit in §441(a)(2)(A) is unconstitutional because it is not adjusted for inflation. The court stated that inflation in the years after passage of the statute presents a valid basis for a facial challenge and that the $5,000 limit (which adjusted for inflation today would represent $19,000) might be unconstitutionally low.

Finally, the court found frivolous the Plaintiffs’ argument that the limit is too low to allow political parties to fulfill their historic and important role. The court determined that there was insufficient evidence presented to show that limits hindered the parties’ ability to support candidates in the most recent election cycle.

Constitutionality of additional party contribution limit for Senate races. The court found frivolous Plaintiffs’ argument that the provision in 2 U.S.C. §441a(h) that allows national party committees to contribute an additional $35,000 (adjusted for inflation to $39,900 in 2008) to candidates for Senate vitiates the anti-corruption interest of any lower limits for either Senators or Representatives. The court stated that these limits are best left to Congressional discretion.

The court certified the following questions to the Fifth Circuit:

  • Has each of the Plaintiffs alleged sufficient injury to constitutional rights enumerated in the following questions to create a constitutional "case or controversy" within the judicial powers of Article III?
  • Do the expenditure and contribution limits and contribution provision in 2 U.S.C. §§441a(d)(2-3), 441a(a)(2)(A) and 441a(a)(7)(B)(i) violate the First Amendment rights of one or more of Plaintiffs as applied to coordinated communications that convey the basis for the expressed support?
  • Does the $5,000 contribution limit at 2 U.S.C. §441a(a)(2)(A) violate the First Amendment rights of one or more Plaintiffs as applied to a political party’s in-kind and direct contributions because it imposes the same limits on parties as on political action committees?
  • Does the $5,000 contribution limit at 2 U.S.C. §441a(a)(2)(A) facially violate the First Amendment rights of one or more Plaintiffs because it is not adjusted for inflation?

Court of appeals decision

On September 10, 2010, the U.S. Court of Appeals for the Fifth Circuit upheld several provisions of the Federal Election Campaign Act (the Act) relating to political parties’ contribution limits to federal candidates and coordinated expenditure limits. The court held that these provisions of the Act did not violate the First Amendment, and that in light of previous Supreme Court rulings, each of the challenged provisions was a constitutionally permissible regulation of a political party committee’s campaign contributions and coordinated party expenditures.

Standing of plaintiffs. The court of appeals held that the plaintiffs had met their burden of establishing standing under Article III of the Constitution, since they had a personal stake in the outcome of the controversy and therefore had standing to bring constitutional claims. The FEC had not contested the plaintiffs’ standing in the case.  

$5,000 contribution limit. The Act provides that contributions from multicandidate political committees (including political party committees) to federal candidates are limited to $5,000 per candidate, per election. 2 U.S.C. §441a(a)(2)(A). The plaintiffs had challenged this provision as a violation of their First Amendment rights since it imposes the same contribution limits on political parties as on other multicandidate political committees. The plaintiffs argued that the speech of political parties deserves a higher degree of protection than that of other multicandidate political committees.

The court instead held that, while Supreme Court precedent acknowledged the important historic role that political parties have played, the Court has also acknowledged that it is precisely this role that political parties fill that gives rise to the government’s compelling interest in regulating their coordinated expenditures and contributions. The Supreme Court in FEC v. Colorado Republican Fed. Campaign Committee, 533 U.S. 431 (2001) (Colorado II) recognized a political party’s unique susceptibility to corruption.

In the present case, the Court of Appeals further held that the Act affords a “reasonable limitation” of $5,000, and as such does not seriously impair political parties’ ability to effectively participate in the political process, as had been the issue in the Supreme Court’s decision in Randall v. Sorrell, 548 U.S. 230 (2006) (Randall). Also, the court found that the Supreme Court’s decision in Citizens United v. FEC did not affect the validity of contribution limits on political party committees and other political committees.  

Inflation adjustment. The plaintiffs also argued that the $5,000 contribution limitation from political party committees to candidates is unconstitutional because it is not adjusted for inflation. The plaintiffs relied on the Supreme Court’s decision in Randall, in which the Court invalidated contribution limits to candidates in Vermont, holding that “[a] failure to index limits means that limits which are already suspiciously low…will almost inevitably become too low over time.” However, the Court of Appeals held that the Supreme Court’s statement “does not, in turn, mean that all contribution limits not indexed for inflation are automatically ‘suspiciously low’ and unconstitutional.” The court stated that, in the present case, the Act’s $5,000 limit is not comparable to Vermont’s $200-$400 limit at issue in Randall.  

Coordinated party expenditure limits. The plaintiffs’ challenge to the coordinated party expenditure limits of 2 U.S.C. §441a(d) arose out of the RNC’s desire to spend in excess of the amount allowed for Congressman Cao (which was $42,100 in 2008 for House candidates in Louisiana). Specifically, the RNC wanted to air a radio ad and to coordinate with the Cao campaign as to the “best timing” for the ad.

The RNC stated that its involvement with the Cao campaign amounted to coordination under FEC regulations, and that if they had aired the ad, it would have violated the amount limitations of the party expenditure provision because the RNC had already spent its limit under the Act. The RNC asserted that this provision of the Act violates its First Amendment rights because the provisions regulate the RNC’s “own speech,” and that its own speech may not be regulated, regardless of whether the speech is coordinated. “Own speech” is defined by the RNC as speech that is attributable to the RNC, even when candidate writes the speech and decides how it is to be disseminated.

The Court of Appeals held that the Supreme Court’s holding in Colorado II expressly recognized that Congress has the power to regulate coordinated expenditures in order to prevent circumvention of the contribution limits and political corruption, provided that the restriction is “closely drawn” to match a sufficiently important government interest in combating political corruption. Colorado II at 456. The Court of Appeals stated that if it was to accept the plaintiffs’ arguments, it would “effectively eviscerate the Supreme Court’s holding in Colorado II,” in which the Supreme Court held that coordinated expenditures may be restricted because contribution limits could be eroded if “inducement to circumvent them were enhanced by declaring parties’ coordinated spending wide open.” Id. at 457. The Court of Appeals also held that Citizens United v. FEC (2010) did not undermine Colorado II’s holding that Congress may regulate a party’s coordinated expenditures, since Citizens United dealt with restrictions on independent expenditures by corporations.

The court remanded the case to the district court for entry of judgment consistent with this opinion. U.S. Court of Appeals for the Fifth Circuit; No. 10-30080, No. 10-30146.  

Source:   FEC Record —October 2010; March 2010; February 2009

Documents

Supreme Court

Court decisions:

Related documents:

Appeals Court (5th Circuit) (10-30080 & 10-30146)

Court decisions:

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District Court (ED of LA) (08-4887)

Court decisions:

Related documents:

This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public.

The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.