Cao v. FEC (Appeals court ruling)

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.

Background

Congressman Anh “Joseph” Cao is the U.S. Representative for the 2nd congressional district of Louisiana and the RNC is the national political party committee of the Republican Party (together, plaintiffs). On November 13, 2008, the plaintiffs filed a suit for declaratory judgment challenging various provisions of the Act as unconstitutional in the U.S. District Court for the Eastern District of Louisiana. Pursuant to 2 U.S.C. § 437h, the district court ultimately certified four constitutional challenges to the en banc Court of Appeals, while dismissing four additional challenges as frivolous. The certified challenges involved the plaintiffs’ standing to bring suit under Article III of the Constitution, the Act’s $5,000 contribution limitation for a political party’s in-kind and direct contributions to federal candidates, the fact that the $5,000 contribution limit is not indexed for inflation and the Act’s “coordinated party expenditure” limitations at 2 U.S.C. § 441a(d). See the March 2010 Record.

Court of Appeals decision

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 maybe 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.

Remand

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.