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Davis v. FEC

Summary

On June 26, 2008, the Supreme Court ruled that provisions of the Bipartisan Campaign Reform Act (BCRA) known as the Millionaires’ Amendment (2 U.S.C. §319(a) and (b)) unconstitutionally burden the First Amendment rights of self-financed candidates. The decision overturned an earlier ruling by the U.S. District Court for the District of Columbia that the Millionaires’ Amendment posed no threat to self-financed candidates’ First Amendment or Equal Protection rights.

Background

On March 30, 2006, the plaintiff, Jack Davis, declared his candidacy for the House seat in New York’s 26th District. Mr. Davis intends to spend over $350,000 of his own funds on his campaign, expenditures which will trigger the requirements of the Millionaires’ Amendment, and may result in increased contribution limits for his opponent.

Under the Millionaires’ Amendment, candidates who spend more than certain threshold amounts of their own personal funds on their campaigns might render their opponents eligible to receive contributions from individuals at an increased limit. 2 U.S.C. 441a-1. For House candidates, the threshold amount is $350,000. This level of personal campaign spending could trigger increased limits for the self-financed candidate’s opponent depending upon the opponent’s own campaign expenditures from personal funds and the amount of funds the candidate has raised from other sources. If increased limits are triggered, then the eligible candidate may receive contributions from individuals at three times the usual limit of $2,100 per election (individual limit for 2005-06 cycle) and may benefit from party coordinated expenditures in excess of the usual limit.

Complaint

Mr. Davis contends that the Millionaires’ Amendment infringes upon his First Amendment right to free speech and his Fifth Amendment right to equal protection. Mr. Davis also alleges that the additional disclosure requirements for self-financed candidates required by the Millionaires’ Amendment impose an unfair burden on his right to speak in support of his own candidacy. He also asserts that the Millionaires provisions "dramatically tilt the field" in favor of incumbents by allowing larger contributions and by not adequately factoring in large "war chests" of campaign funds raised in previous elections in determining whether a candidate is eligible to receive contributions at an increased limit.

On June 6, 2006, Davis asked the U.S. District Court for the District of Columbia to declare the Millionaires’ Amendment provisions unconstitutional on their face, and to issue an injunction barring the FEC from enforcing those provisions. Mr. Davis argued that the Millionaires’ Amendment violates the First Amendment by chilling and violates the Equal Protection Clause of the Fifth Amendment by giving a competitive advantage to self-financed candidates’ opponents.

On July 11, 2006, the district court granted the plaintiff’s request that the case be heard by a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, as required by 2 U.S.C. 437h.

District court decision

The district court held that Mr. Davis’s First Amendment challenge failed at the outset because the Millionaires’ Amendment did not "burden the exercise of political speech."

According to the district court, the Millionaires’ Amendment "places no restrictions on a candidate’s ability to spend unlimited amounts of his personal wealth to communicate his message to voters, nor does it reduce the amount of money he is able to raise from contributors. Rather, the Millionaires’ Amendment accomplishes its sponsors’ aim to preserve core First Amendment values by protecting the candidate’s ability to enhance his participation in the political marketplace." In particular, the court cited the fact that Mr. Davis himself has twice chosen to self-finance his campaign. The court found that Mr. Davis failed to show how his speech had been limited by the benefits his opponents receive under the statute.

Mr. Davis additionally alleged that the disclosure requirements for self-financed candidates under the Millionaires’ Amendment imposed an unfair burden on his right to speak in support of his own candidacy. The district court found that the Millionaires’ Amendment reporting requirements are no more burdensome than other BCRA reporting requirements that the Supreme Court has already upheld.

The court also rejected the second prong of Mr. Davis’s facial challenge, regarding the Equal Protection provision of the Fifth Amendment. In order to argue that a statute violates the Equal Protection Clause of the Fifth Amendment, a plaintiff must show that the statute treats similarly situated entities differently. The district court found that the Millionaires’ Amendment did not violate the Equal Protection Clause of the Fifth Amendment because Mr. Davis could not show that the statute treated similarly situated entities differently. The district court held that self-funded candidates, who can choose to use unlimited amounts of their personal funds for their campaigns, and candidates who raise their funds from limited contributions are not similarly situated. According to the court, "the reasonable premise of the Millionaires’ Amendment is that self-financed candidates are situated differently from those who lack the resources to fund their own campaigns and that this difference creates adverse consequences dangerous to the perception of electoral fairness." Thus, the court found no violation of the Fifth Amendment.

The District court granted the FEC’s request for summary judgment in this case and denied Mr. Davis’s request for summary judgment.

Supreme Court decision

On June 26, 2008, the Supreme Court issued an opinion reversing the district court’s decision. The Court held that the Millionaires’ Amendment unconstitutionally violated self-financed candidates’ First Amendment or Equal Protection rights. The Court also rejected the FEC’s arguments that Davis lacked standing and that the case was moot.

Standing. The FEC argued that Davis lacked standing to challenge the unequal contribution limits of the Millionaires’ Amendment, 2 U.S.C. §319(a), because Davis’ opponent never received contributions at the increased limit and therefore, Davis had suffered no injury. The Court rejected this argument, noting that a party facing prospective injury has standing whenever the threat of injury is real, immediate and direct. The Court further noted that Davis faced such a prospect of injury from increased contribution limits at the time he filed his suit.

Mootness. The FEC also argued that Davis’ argument was moot because the 2006 election had passed and Davis’ claim would be capable of repetition only if Davis planned to self-finance another election for the U.S. House of Representatives. The FEC also argued that Davis’ claim would not evade review as he could challenge the Amendment in court should the Commission file an enforcement action regarding his failure to file personal expenditure reports. Considering that Davis had subsequently made a public statement expressing his intent to run for a House seat and trigger the Millionaires’ Amendment again, the Court concluded that Davis’ challenge is not moot.

First Amendment and Equal Protection. In considering Davis’ claim that imposing different fundraising limits on candidates running against one another impermissibly burdens his First Amendment right to free speech, the Court noted that it has never upheld the constitutionality of such a law. The Court referred to Buckley v. Valeo, in which it rejected a cap on a candidate’s expenditure of personal funds for campaign speech and upheld the right of a candidate to "vigorously and tirelessly" advocate his or her own election. While the Millionaires’ Amendment did not impose a spending cap on candidates, it effectively penalized candidates who spent large amounts of their own funds on their campaigns by increasing their opponents’ contribution limits. The Court determined that the burden thus placed on wealthy candidates is not justified by any governmental interest in preventing corruption or the appearance of corruption, and that equalizing electoral opportunities for candidates of different personal wealth was not a permissible Congressional purpose. The Court remanded the matter for action consistent with its decision.

On June 26, 2008, the Commission issued a public statement outlining the general principles the Commission will apply to conform to the Court’s decision.

Source:   FEC RecordAugust 2008; August 2006.