Wednesday, November 27, 2013
The Treasury Department yesterday announced that it will propose new guidance for social welfare organizations that will better define the requirements for tax-exempt status for those organizations engaged in candidate-related political activities.
The new proposed guidance is aimed at 501(c)(4) organizations, which are organized under the IRC for social welfare purposes, but nevertheless engage in significant political activities. The 501(c)(4) form allows these organizations to fly under the radar while still engaging in politics. For example, 501(c)(4) organizations need not disclose their donors to the FEC, and they need not disclose all of their political activities to the IRS. (The Center for Responsive Politics notes that "Americans for Tax Reform, for instance, told the FEC it spent $15.8 million on independent expenditures in 2012, while it told the IRS it spent just $9.8 million.) An organization can retain its 501(c)(4) status so long as less than half (up to 49%) of its activity is political.
These "dark money" organizations have exerted dramatically increased influence in elections: "While nonprofit organizations spent just $5.2 million on federal elections in 2006, that number rocketed to more than $300 million by 2012," according to The Daily Beast. These organizations include tea party groups and others that the IRS targeted, leading to an IG report earlier this year, which led to the proposed rules.
The proposed guidance is designed to make it easier for the IRS to determine whether a social welfare organization exceeds the threshold for candidate-related political activities by better defining those activities. "These proposed rules reduce the need to conduct fact-intensive inquiries, including inquiries into whether activities or communications are neutral and unbiased." The likely net result is that some or many of these organizations will find that their activities now increase the percentage of "candidate-related political activity" in which they're involved, forcing them either to reduce their political activities or to lose their non-profit status.
The proposed guidance "defines the term 'candidate-related political activity,' and would amend current regulations by indicating that the promotion of social welfare does not include this kind of activity." In particular, the guidance defines certain communications, grants and contributions, and activities closely related to elections or to candidates as "candidate-related political activity."
Citizens for Responsibility and Ethics in Washington has a statement here and a resource page here. The Center for Responsive Politics has a statement here and a resource page, with a nice graphic, here.
Friday, November 22, 2013
The Federal Election Commission split 2-2 and thus denied a request from the Tea Party Leadership Fund for an exemption from FEC disclosure requirements of names of individual contributors who contributed more than $200 to the group. The non-action means that the Tea Party Leadership Fund will have to disclose contributors like everybody else subject to the FEC's disclosure requirement. NPR reports here.
The Tea Party argued that its donors are subject to harassment and hostility from government officials and private actors--with over 1,400 pages of evidence. Two Commissioners reportedly agreed, and two disagreed. The two competing draft FEC opinions are here. The Commission, splitting 2-2, didn't accept either. That meant that the Tea Party's request was denied.
The Court upheld disclosure requirements against a facial challenge in Buckley v. Valeo. But it also said that the disclosure requirements might be unconstitutional as against a minor party that could show a "reasonable probability" that its contributors would be subjected to threats, harassment, and reprisals if their contributions were disclosed. Buckley at 69-74 (discussing NAACP v. Alabama).
Courts and the FEC have awarded an exemption under this standard only in very narrow cases, to the Communist Party and the Socialist Workers Party, minor parties that "rarely have firm financial foundation." On the other hand, a court in 2011 denied an exemption to ProtectMarriage.com, a group that raised $30 million and supported California's Prop 8 (banning same-sex marriage in the state). (Doe v. Reed, the Court's 2010 case, involved disclosure, but by way of a state's Public Records Act, not the FEC regs.)
Friday, October 25, 2013
A few days after hearing oral argument, a Second Circuit panel has reversed the district judge and entered an order enjoining the enforcement of New York Election Law §14-114(8) and §14-126(2) in its 14 page unanimous opinion in New York Progress and Protection PAC (NYPPP) v. Walsh.
NYPPP challenged New York's $150,000 individual contribution limit to a PAC alleging that it has a "donor waiting to contribute $200,00 to its cause" and that the contribution limit violates NYPPP's "core First Amendment right to advocate in favor of Joseph Lhota in the upcoming New York mayoral election." According to the NY Times, that "donor" is none other than Alabama businessman, Shaun McCutcheon - - - the plaintiff in the campaign finance challenge McCutcheon v. FEC heard by the United States Supreme Court earlier this month as we discussed here.
While stating that the court expressed "no opinion on the ultimate outcome," it did hold that there was a substantial likelihood on the merits, citing Citizens United v. FEC for the proposition that the government "has no anti-corruption interest in limiting independent expenditures." The panel rejected the district court's finding that the "so-called independent expenditure only committees" have "only one purpose - advancing a single candidacy at a single point in time - - - " and are thus "not truly independent as a matter of law." Instead, the panel concluded that NYCPP was independent and its choices "irrelevant." Thus, a donor to an independent expenditure PAC such as NYPCCC is "even further removed from the candidate and may not be limited in his ability to contribute to such committees." The panel noted that this issue has been resolved "consistently" by all the federal courts that have considered it.
Balancing the equities, the panel easily concluded that the hardship faced by NYPPP and its donors was significant: "Every sum that a donor is forbidden to contribute to NYPPP beacuse of this statute reduces constitutionally protected polictical speech."
The Second Circuit's injunction against the enforcement of the NY campaign finance statutes was criticized by the rival of Republican Joe Lhota: a spokesperson for Democrat Bill deBlasio, reportedly stated the ruling would "empower the right-wing billionaires, like the Koch Brothers, and Tea Party groups who support Joe Lhota to drown out the voices of New Yorkers."
The race between the mayoral candidates remains heated, if not especially close so far. The question is whether an influx of money can change the outcome on November 5.
Meanwhile, watch the most recent debate between the candidates:
Tuesday, October 8, 2013
The Supreme Court today heard oral arguments in McCutcheon v. FEC, the case testing whether aggregate campaign contribution limits violate the First Amendment.
Aggregate limits, established under the Bipartisan Campaign Reform Act, or BCRA, cap the total amount that a contributor can give to candidates, political parties, and political committees. Aggregate limits supplement base limits, also in the BCRA, which cap the amount that a contributor can give to a particular candidate. Aggregate limits are designed to prevent a contributor from circumventing the base limits (and thus to prevent corruption and the appearance of corruption) by funneling total contributions in excess of the base limits through a variety of different recipients and to a particular candidate.
Here's how it would work: Suppose Congress capped campaign contributions at $5,000 per candidate per cycle, so that a contributor could give only $5,000 to his or her preferred candidate. Without more, that contributor could easily bypass that base limit by simply contributing $5,000 to a number of different organizations that could, in turn, support or contribute to the contributor's preferred candidate. The contributor could thus effectively circumvent the base limit and corrupt his or her preferred candidate by funneling contributions through intermediaries.
Congress recognized this circumvention problem and imposed a cap on aggregate contributions in order to avoid it. The Court in Buckley v. Valeo (1976) upheld both the base contribution limit and an aggregate contribution limit, holding that they work to prevent actual and apparent corruption and circumvention. Later, in BCRA, Congress restructured and increased previous base and aggregate contribution limits and provided for automatic adjustments for inflation.
McCutcheon, a wealthy contributor, challenged the aggregate limits as violating the First Amendment. (For more on the background, my ABA Preview piece is here.)
The arguments today focused on whether the current aggregate contribution limits continue to do any work with regard to corruption or circumvention. The RNC and McCutcheon argued that they don't. They said that other features of the law already prevent circumvention and corruption, and that the aggregate limits therefore only serve to limit free speech and association. The FEC, on the other hand, said that they do--that they are necessary to close circumvention opportunities even with the other protective features of federal law, and that they prevent corruption.
The right answer, of course, turns on how money can flow in politics. There were plenty of hypotheticals today (and in the briefing) designed to illustrate how aggregate limits work to prevent corruption and circumvention (and counter-points on why they don't). Justices Breyer and Kagan led the charge with hypos showing why aggregate limits were necessary; Justice Kennedy expressed interest, as well. But for every hypo, the petitioners had an explanation why current law already solved the corruption and circumvention problem, even without aggregate limits. The lack of context and record on this point led Justices Breyer and Sotomayor to wonder whether the case might benefit from further development at the lower court. (Don't bet on this outcome.)
Justice Alito turned this line of questions on the government and asked SG Verrilli why other features of federal law don't already solve the corruption and circumvention problems. SG Verrilli seemed to back away from the circumvention interest and answered that a single contributor's very large contribution, dispersed across like-minded candidates and organizations, is itself a corruption problem, and that aggregate limits address this. The answer didn't seem to satisfy.
Chief Justice Roberts had a different concern: how the aggregate limits affect a contributor's ability to give the maximum amount to as many candidates as he or she wants--and how this limits a contributor's speech and association rights with regard to, say, the tenth candidate that the contributor wants to support. He also wondered whether there weren't less speech- and association-infringing ways to prevent corruption and circumvention.
In short, both the Chief Justice and Justice Alito, who together may well control the outcome of this case, seemed accutely concerned that the aggregate limits weren't the best-tailored way for the government to achieve its interests in preventing corruption and circumvention. At the same time, though, neither Chief Justice nor Justice Alito (nor anybody else today) directly took on Buckley's holding on base and aggregate contribution limits. (Justices Kennedy, Scalia, and Thomas are all on record against Buckley's holding that the government can regulate contributions in the interest of preventing corruption.) Instead, the arguments focused on whether the non-aggregate-limiting features of BCRA can do the work of preventing corruption and circumvention--and therefore whether the aggregate limits only serve to infringe the First Amendment. So if the arguments today are any indication, we may see a 5-4 Court striking the aggregate limits because they're not sufficiently tailored to prevent corruption or circumvention--and because they limit too much speech and association.
If so, we'll likely see more total money going directly to candidates, political parties, and committees. But remember that under Citizens United individuals can already spend as much as they want on "independent" electioneering. This case won't change that, even if it directs some of that "independent" money to candidates, political parties, and committees for better coordinated expenditures. (Justice Scalia argued today that the anti-corruption purpose of aggregate limits seems as weak as, or weaker than, an anti-corruption purpose for the independent expenditure restrictions that the Court struck in Citizens United.) At the same time, this case probably won't upset Buckley's holding that the government can cap base contributions in the interest of preventing actual or apparent corruption. Indeed, it may not even upset Buckley's holding on aggregate contributions. Instead, it may only say that under BCRA aggregate limits aren't doing the anti-corruption and anti-circumvention work that they were designed to do, and that they're unduly infringing on the First Amendment.
Friday, June 28, 2013
Tenth Circuit Recognizes For-Profit Corporations as Having Religious Freedom and Free Exercise Rights
In the contentious and closely-watched case of Hobby Lobby, Inc. v. Sebelius, the Tenth Circuit has rendered its opinion concluding that a for-profit corporation has free exercise of religion rights under the federal Religious Freedom Restoration Act (RFRA) and the First Amendment.
Hobby Lobby challenges the constitutionality of the so-called "contraception mandate" under the Affordable Care Act that require health insurance plans to provide contraception coverage to employees. We've previously discussed the issue and the circuit split here.
The federal district judge had rejected Hobby Lobby's claim, noting that it was a for-profit completely secular company - - - it is a corporation operating 514 arts and crafts stores in 41 states. The federal district judge also denied the injunction as to the for-profit corporation Mardel, a Christian supply and bookstore chain, and to the family owning both the corporations through a management trust. Hobby Lobby sought extraordinary relief from the United States Supreme Court after a Tenth Circuit panel declined to issue a stay; Justice Sotomayor in her role as Tenth Circuit Justice then rejected the claim, ruling that the privately held corporations did not "satisfy the demanding standard for the extraordinary relief they seek."
The Tenth Circuit granted the request for initial en banc review - - - thus, there is no Tenth Circuit panel opinion - - - and issued a lengthy set of opinions from the eight judges, one judge being recused. The majority opinion on pages 8-9 details the rationales of the individual judges. But the essential division is 5-3 over the issue of whether a corporation, even a for-profit secular corporation, has a right to free exercise of religion under RFRA and the First Amendment. The majority concluded there was such a right and that the corporations demonstrated a likelihood of success for prevailing on the merits.
Judge Timothy Tymkovich's more than 65 page opinion for the majority concluded that
Hobby Lobby and Mardel are entitled to bring claims under RFRA, have established a likelihood of success that their rights under this statute are substantially burdened by the contraceptive-coverage requirement, and have established an irreparable harm. But we remand the case to the district court for further proceedings on two of the remaining factors governing the grant or denial of a preliminary injunction.
Only a plurality of judges would have resolved the other two preliminary injunction factors - - - balance of equities and public interest - - - in Hobby Lobby and Mardel’s favor, thus the remand.
The majority, however, held
as a matter of statutory interpretation that Congress did not exclude for-profit corporations from RFRA’s protections. Such corporations can be “persons” exercising religion for purposes of the statute. Second, as a matter of constitutional law, Free Exercise rights may extend to some for-profit organizations.
(emphasis added). The opinion often conflates RFRA (which recall, is only applicable as to federal laws) and First Amendment. However, in specifically considering First Amendment doctrine, the majority's argument derived from two strands. First, it noted that individuals may incorporate for religious purposes and keep their Free Exercise rights - - - such as churches, citing Church of Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 525 (1993) (holding that a “not-for-profit corporation organized under Florida law” prevailed on its Free Exercise claim). Second, it then noted that "unincorporated individuals may pursue profit while keeping their Free Exercise rights," citing United States v. Lee, 455 U.S. 252 (1982) (considering a Free Exercise claim of an Amish employer); Braunfeld v. Brown, 366 U.S. 599 (1961) (plurality opinion) (considering a Free Exercise claim by Jewish merchants operating for-profit).
It then characterized the government's argument as being that these "Free Exercise rights somehow disappear" when "individuals incorporate and fail to satisfy Internal Revenue Code § 501(c)(3)." The majority found this distinction to be one that cannot be supported by First Amendment doctrine. It did, however, implicitly limit the facts under which for-profit corporations could be found to have free exercise rights:
The government nonetheless raises the specter of future cases in which, for example, a large publicly traded corporation tries to assert religious rights under RFRA. That would certainly seem to raise difficult questions of how to determine the corporation’s sincerity of belief. But that is not an issue here. Hobby Lobby and Mardel are not publicly traded corporations; they are closely held family businesses with an explicit Christian mission as defined in their governing principles. The Greens, moreover, have associated through Hobby Lobby and Mardel with the intent to provide goods and services while adhering to Christian standards as they see them, and they have made business decisions according to those standards. And the Greens are unanimous in their belief that the contraceptive-coverage requirement violates the religious values they attempt to follow in operating Hobby Lobby and Mardel. It is hard to compare them to a large, publicly traded corporation, and the difference seems obvious.
Thus, the majority stated that it did not share any concerns that its holding would prevent courts from distinguishing businesses that are not eligible for RFRA’s - - - and presumably the First Amendment's - - - protections.
While the analysis of substantial burden that follows is important, it is the holding that a secular for-profit corporation has a sincerely held religious belief that entitles it to assert a free exercise claim is the centerpiece of the controversy.
Indeed, Chief Judge Briscoe, joined by Judge Lucero, call the majority's opinion on this point
nothing short of a radical revision of First Amendment law, as well as the law of corporations. But whatever one might think of the majority’s views, the fact remains that they are wholly unsupported by the language of the Free Exercise Clause or the Supreme Court’s free exercise jurisprudence, and are thus, at best, “considerations for the legislative choice.”
The ability of for-profit corporations to have Free Exercise rights under the First Amendment - - - along with their Free Speech rights as articulated in the still-controversial Citizens United v. FEC, decided in 2010 and liberally cited in Hobby Lobby - - - is highly contested. This may certainly be going (back) to the United States Supreme Court.
June 28, 2013 in Campaign Finance, Congressional Authority, First Amendment, Free Exercise Clause, Gender, Opinion Analysis, Privacy, Religion, Reproductive Rights, Sexuality | Permalink | Comments (0) | TrackBack (0)
Sunday, June 23, 2013
The Ninth Circuit this week upheld in part a lower court permanent injunction against the enforcement of a Montana statute making it a criminal offense for any political party to "endorse, contribute to, or make an expenditure to support or oppose a judicial candidate" in a nonpartisan judicial election.
The ruling in Sanders County Republican Central Committee v. Fox is no surprise, after the Ninth Circuit ruled last fall that Montana's ban, at Mont. Code Ann. Sec. 13-35-231, insofar as it restricted endorsements and expenditures, violated the First Amendment.
But the court also reversed the lower court's injunction against enforcing the ban on contributions. It ruled that the earlier case didn't address the constitutionality of the state's ban on contributions and that the contribution ban wasn't before the court here.
This week's ruling means that Montana cannot enforce its ban against political parties endorsing or spending money in support of or in opposition to a judicial candidate in a nonpartisan judicial election. But the state can enforce its ban against political parties making contributions to those judicial candidates.
Wednesday, June 19, 2013
Common Cause this week pursued its case against the Senate filibuster at the D.C. Circuit when it filed its appellate brief, arguing that Judge Emmett G. Sullivan (D.D.C.) was wrong to dismiss the case last December and pressing its argument that the filibuster is unconstitutional. Common Cause's press release is here; the brief is here. We posted on Judge Sullivan's decision here.
Recall that Judge Sullivan dismissed the case, Common Cause v. Biden, for lack of standing and for raising a political question. In its brief, Common Cause takes on Judge Sullivan's ruling and argues that the filibuster is unconstitutional.
As to standing, Common Cause argues that House-member-plaintiffs have standing to challenge Senate Rule XXII, the cloture rule that allows a filibuster if the majority can't muster 60 votes to close debate, because the Rule allowed a minority in the Senate to effectively nullify their votes in favor of the DISCLOSE and DREAM Acts. Common Cause relies on language from Raines v. Byrd (1997), which says that "legislators whose votes . . . would have been sufficient to . . . enact a specific legislative Act have standing to sue if that legislative action . . . does not go into effect on the ground that their votes have been completely nullified" by a procedural violation of the Constitution. (In Raines, the Court held that Senator Byrd lacked standing when he mounted a facial challenge to the Line-Item Veto Act but failed to show that his vote on any specific appropriation bill had been nullified by the Act.)
Common Cause also argues that it has standing in its own right, because the filibuster of the DISCLOSE Act frustrated its core mission of campaign reform. It argues that it has standing based on its members, because they cannot learn the identities of certain campaign contributors. And it argues that the "dreamer"-plaintiffs have standing, because the filibuster of the DREAM Act denied them the benefits of that Act.
As to political question, Common Cause says that rules of Congress are justiciable, that they must be constitutional, and that "[t]here is nothing in the record of the Federal Convention indicating that the Framers intended to delegate to either house the authority to depart from the principle of majority rule . . . ." Brief at 15-16.
Finally, on the merits, Common Cause says,
Rule XXII's supermajority vote requirement is inconsistent with the rules of parliamentary practice that preceeded the adoption of the Constitution, the intent of the Framers as reflected in The Federalist Papers, the text of the Quorum and the Presentment Clauses, the exclusive list of exceptions to the principle of majority rule in the Constitution which specify when a supermajority vote is required, the provision of Article I, Sec. 3, cl. 4 that gives the Vice President the power to cast the tie-breaking majority vote when the Senate is "equally divided," and the first rules adopted by the Senate and the House immediately after ratification.
Brief at 56.
June 19, 2013 in Campaign Finance, Cases and Case Materials, Congressional Authority, Courts and Judging, Jurisdiction of Federal Courts, News, Separation of Powers | Permalink | Comments (0) | TrackBack (0)
Monday, May 6, 2013
The 2009 sharply divided Supreme Court opinion in Caperton v. Massey Coal is the centerpiece of the new book, The Price of Justice: A True Story of Greed and Corruption by Laurence Leamer. Recall that the Court in Caperton ruled that due process required judicial recusal of a West Virginia Supreme Court of Appeals judge, Justice Brent Benjamin, in a case involving Massey Coal because of the contributions by Massey Coal to Justice Benjamin's campaign.
The starred review from Publisher's Weekly describes the book as
the riveting and compulsively readable tale of the epic battle between Don Blankenship, the man who essentially ran the West Virginia coal industry through his company Massey Energy, and two seemingly ordinary attorneys: Bruce Stanley and David Fawcett. The centerpiece of the story is a West Virginia mine owner whom Blankenship purposefully bankrupted, and on whose behalf Stanley and Fawcett won (in 2002) a $50 million dollar verdict that is still unpaid. In hopes of having the ruling overturned by the West Virginia Supreme Court, Blankenship sought to “buy” a seat on the court by contributing over $3 million to the successful campaign of a conservative judicial candidate. However, the U.S. Supreme Court eventually found that Blankenship’s contributions were too much to allow the new West Virginia justice to hear the case. Leamer has produced a Shakespearean tale of greed, corporate irresponsibility, and personal hubris on the one hand, and idealism, commitment to justice, and personal sacrifice on the other. Blankenship is a villain for all time, and Stanley and Fawcett are lawyers who bring honor to their profession.
A good addition to that summer reading list for anyone interested in constitutional law and anyone who might like a reminder that lawyers can, indeed, be heroic.
Friday, April 26, 2013
In an interesting advisory opinion from the Federal Election Commission (FEC), the ability of same-sex couples married under state law to make political contributions similar to opposite-sex married couples is thwarted by the Defense of Marriage Act (DOMA). Recall that the United States Supreme Court is currently considering the constitutionality of DOMA in United States v. Windsor, argued last month.
The advisory opinion explained the underlying regulatory scheme:
Notwithstanding the prohibition on contributions in the name of another, a Commission regulation governing “[c]ontributions by spouses” provides that “limitations on contributions . . . shall apply separately to contributions made by each spouse even if only one spouse has income.” 11 C.F.R. 110.1(i). Thus, under Section 110.1(i), a spouse with no separate income may make a contribution in his or her own name “through the checking account of the other spouse.”
It concluded that "so long as the relevant provisions of DOMA remain in effect, the Committee may not apply 11 C.F.R. 110.1(i) to contributions from same-sex couples married under state law," although the Commission recognized that DOMA was currently under review.
In a separately issued concurring statement, FEC Chair Ellen Weintraub (pictured) emphasized that her "vote today was in no way intended to endorse the discriminatory, irrational burden that DOMA places on political participation by individuals in same sex."
If DOMA is not declared unconstitutional by the United States Supreme Court on the basis of equal protection, the FEC's opinion might be fertile ground on which to grow a First Amendment challenge.
[image of Ellen Weintraub via]
Tuesday, April 16, 2013
Now in print is the Fall 2012 Albany Law Review Symposium “What Are We Saying? Violence, Vulgarity, Lies . . . And The Importance Of 21st Century Free Speech."
-- Ronald K.L. Collins......Foreword: Exceptional Freedom—The Roberts Court, the First Amendment, and the New Absolutism
-- Robert M. O'Neil........Hate Speech, Fighting Words, and Beyond--Why American Law is Unique
-- Rodney A. Smolla........Categories, Tiers of Review, and the Roiling Sea of Free Speech Doctrine and Principle: A Methodological Critique of United States v. Alvarez
-- Jeffery C. Barnum.........Encouraging Congress to Encourage Speech: Reflections on United States v. Alvarez
-- Marjorie Heins..........The Supreme Court and Political Speech in the 21st Century: The Implications of Holder v. Humanitarian Law Project
-- R. George Wright.........Are There First Amendment “Vacuums?”: The Case of the Free Speech Challenge to Tobacco Package Labeling Requirement
-- Robert D. Richards & David J. Weinert.........Punting in the First Amendment’s Red Zone: The Supreme Court’s “Indecision” on the FCC’s Indecency Regulations Leaves Broadcasters Still Searching For Answers
-- Marvin Ammori & Luke Pelican.........Media Diversity and Online Advertising
-- Martin H. Redish & Michael J.T. Downey.........Criminal Conspiracy as Free Expression
-- Owen Fiss........The Democratic Mission of the University
-- Welcome & Opening Remarks.......Benjamin P. Pomerance
-- Debate on Citizens United v. Federal Election Commission.......Floyd Abrams and Alan B. Morrison, moderated by Ronald K.L. Collins
-- Panel Discussion on Recent U.S. Supreme Court Free Speech Cases and Their Implications......Adam Liptak (moderator), Ronald K.L. Collins, Susan N. Herman, Alan B. Morrison, Robert M. O'Neil, Robert D. Richards
Tuesday, March 12, 2013
We don't talk about economic inequality much these days in constitutional law--at least not as much as we should. And we certainly haven't heard enough about poverty, its causes, and its solutions in politics. ConLawProf Mike Zimmer (Loyola, Chicago) is out to do something about that in his excellent piece Inequality, Individualized Risk, and Insecurity, recently posted on SSRN and based on his Thomas E. Fairchild Lecture at the University of Wisconsin Law School last April.
Zimmer's core argument connects the dots between inequality in today's economy, government policy, and money in politics--in a way that we don't often hear, even in discussions about campaign finance reform. (Sure, there's plenty of talk about the vast amounts of money in politics, but we don't often connect that to poverty and economic inequality.) Here's Zimmer:
The thesis of this paper is that our extreme inequality in part results from government policy, that much government policy is the result of the undue influence of money in politics, and that, before any reform is likely, the dominance of money in politics must be substantially reduced. An important question is how that dominance can be reduced; however, the ansewr to that question is far from clear.
Zimmer takes us through the current state of economic inequality and connects that to government policy. He limits his focus to labor policy, but still he manages a wide-ranging discussion, tying federal labor policy to Supreme Court rulings (in Ricci v. DeStefano, Wal-Mart Stores, Inc. v. Dukes, AT&T Mobility LLC v. Concepcion, and even Ashcroft v. Iqbal) to show how the Court has aided and abetted Congress in tamping down labor rights at every turn. Again, Zimmer:
In sum, putting these decisions together, employers with collective bargaining agreements have a strong incentive to require an arbitration clause shifting all statutory claims to arbitration but at the same time precluding jury trials and class actions. That same incentive exists for employers without a union representing its workers.
If, somehow, an employee with a federal statutory claim is able to avoid having it shunted into arbitration, the Supreme Court has erected formidable procedural barriers to it reaching trial. Until recently, employment discrimination cases were not likely to be dismissed before the summary judgment stage, which was typically triggered once discovery was complete. In Ashcroft v. Iqbal, the Court moved up the possibility of dismissal to the earlier pleading stage before any discovery typically takes place.
Zimmer then persuasively ties federal policies that create inequalities to money in politics, again examining the Supreme Court's complicity (in Citizens United). He calls for campaign finance reform, but, recognizing that "the prospects . . . are not good," he alternatively suggests an economic equality social movement. Zimmer says the Occupy Movement is a start; so is popular culture (with, e.g., Steven Colbert's efforts to highlight the problems with super-PACs).
Zimmer's piece, with its tying-together of everything from poverty and extreme inequality to labor policy to campaign finance to social movements, is a joy to read. Highly recommended.
[Image: Vincent Van Gogh, The Potato Eaters, Google Art Project]
Tuesday, February 19, 2013
The Supreme Court today said it would take up McCutcheon v. FEC, a case testing federal biennial limits on contributions to candidates, PACs, parties, and committees. (The jurisdictional statement is here.) While the case directly challenges biennial limits under the Buckley framework, the petitioner also preserved the issue whether Buckley's contribution-expenditure scrutiny distinction violates free speech.
It's not clear how much the case could matter to the sheer amount of money in politics. That's because contributors already have ample and growing opportunities to contribute to proliferating super-PACs and 501(c)(4) organizations. But if the Court takes on Buckley's contribution-expenditure distinction, the ruling could be quite significant both for First Amendment doctrine and money in politics. (That distinction means that the government can regulate contributions to prevent political corruption, but expenditures get full First Amendment protection.) It could be the next step after Citizens United in further opening the money spigot.
The case directly attacks federal biennial expenditure limits under the Bipartisan Campaign Reform Act. BCRA limits an individual's contribution to a candidate, a national party, a local party, and a PAC in each calendar year. These are called "base limits." But BCRA also limits an individual's total contributions to all federal candidates, party committees, and PACs every two years. These are the "biennial limits."
McCutcheon argues that the biennial limits restrict his ability to contribute to as many candidates and parties as he'd like, thus restricting his First Amendment rights. In particular, he says that the biennial limits under BCRA have no justification and therefore must be struck.
To see why, start with the old biennial limit upheld by the Court in Buckley. Back then, there were no base limits for contributions to PACs or national or local parties. (There was a base limit on contributions to candidates, though--$1,000 per.) McClutcheon argues that the Court in Buckley upheld the biennial limit because it was designed to prevent a contributor from circumventing the base limit on candidates. How? By contributing massive amounts through political committees that would simply funnel the money to the candidate.
McClutcheon says that BCRA--with its base limits and biennial limits on candidates, committees, PACs, and parties--can't be designed to prevent circumvention in the same way. This is because BCRA's base limits themselves restrict circumvention. (BCRA's base limit on a party, e.g., prevents a contributor from funneling massive amounts of money through the party to the candidate). McClutcheon says that the only effects of BCRA's biennial limits are to restrict the total amount of cash he can spend and, with the base limits, to restrict the number of candidates, committees, PACs, and parties that he can spend on--thus violating his First Amendment rights. (E.g.: He would've liked to give $25,000 each to the RNC, the National Republican Senatorial Committee, and the National Republican Congressional Committee before the 2012 election, but that would have exceeded the biennial limit.) McClutcheon says his case against the biennial limit on contributions to candidates is even stronger, because even Buckley didn't hold that there's an anti-circumvention interest in that limit. He claims that that limit serves only to prevent him from contributing to as many people as he'd like.
McClutcheon also argues that the biennial limits are too low.
The Court could rule on the narrow issue whether the biennial limits violate Buckley's anti-circumvention interest (which supported the old biennial limit). This kind of ruling (if, as expected, it overturns the biennial limits) could give contributors another way to spend more money in politics, but it would retain Buckley's contribution-expenditure scrutiny distinction. Alternatively, the Court could take on BCRA's biennial limits and Buckley's contribution-expenditure distinction. This could fundamentally change how we approach campaign finance restrictions under the First Amendment (even if it's not obvious that it would necessarily result in a ton more money in politics).
Thursday, February 14, 2013
Writing in The New York Review of Books in 2011, the late Ronald Dworkin described two recently rendered United States Supreme Court cases as "embarrassingly bad." The cases were Arizona Christian School Tuition Organization v. Winn and the then-pending Arizona Free Enterprise Club PAC v. Bennett.
Both were 5-4 decisions and both continue to be controversial, although the Bennett is overshadowed by Citizens United.
Dworkin's article is worth a (re)read.
For those in a more reflective mood, the New York Review of Books has highlighted his 2011 essay "What is a Good Life?" Dworkin wrote:
We are charged to live well by the bare fact of our existence as self-conscious creatures with lives to lead. We are charged in the way we are charged by the value of anything entrusted to our care. It is important that we live well; not important just to us or to anyone else, but just important.
Dworkin's voice will be missed.
February 14, 2013 in Affirmative Action, Campaign Finance, Cases and Case Materials, Current Affairs, First Amendment, Religion, Speech, Standing, Supreme Court (US), Theory | Permalink | Comments (0) | TrackBack (0)
Wednesday, November 7, 2012
With the election of Elizabeth Warren to the United States Senate, today might a good time to reread her article Unsafe at Any Rate, published in Democracy: A Journal of Ideas in 2007.
Warren was arguing for the creation of a new federal agency, the Financial Product Safety Commission. In doing so, she not only argued in favor of regulation (using an originalist argument among others), but also argued that federal regulation was appropriate:
The credit industry is not without regulation; credit transactions have been regulated by statute or common law since the founding of the Republic. Traditionally, states bore the primary responsibility for protecting their citizens from unscrupulous lenders, imposing usury caps and other credit regulations on all companies doing business locally. While states still play some role, particularly in the regulation of real-estate transactions, their primary tool–interest rate regulation–has been effectively destroyed by federal legislation. Today, any lender that gets a federal bank charter can locate its operations in a state with high usury rates (e.g., South Dakota or Delaware), then export that states’ interest rate caps (or no caps at all) to customers located all over the country. As a result, and with no public debate, interest rates have been effectively deregulated across the country, leaving the states powerless to act. In April of this year, the Supreme Court took another step in the same direction in Watters v. Wachovia, giving federal regulators the power to shut down state efforts to regulate mortgage lenders without providing effective federal regulation to replace it.
Recall that in Watters, the Court found no merit in the Supremacy Clause (preemption) and Tenth Amendment arguments.
Warren also argued that a federal agency could intervene more successfully than Congress because "the financial services industry is routinely one of the top three contributors to national political campaigns, giving $133 million over the past five years" and thus "the likelihood of quick action to respond to specific problems and to engage in meaningful oversight is vanishingly slim."
Although Congress eventually passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, with a FPSC agency, Elizabeth Warren was not named as its head given strong opposition to her by the Senate - the legislative body she will now be joining.
[image: Elizabeth Warren via]
Monday, November 5, 2012
PBS's Frontline released a documentary last week on campaign finance in Montana that's well worth a look. The documentary provides background on American Tradition Partnership v. Bullock, the case challenging Montana's restriction on independent campaign expenditures. The Supreme Court summarily reversed a lower court ruling in that case upholding the restriction.
We covered the Supreme Court's recent rejection of an application to vacate the Ninth Circuit's stay of a lower court ruling that Montana's campaign contribution limits violated the First Amendment.
Tuesday, October 23, 2012
The Supreme Court today rejected an application to vacate the Ninth Circuit's stay of District Judge Lovell's earlier decision that Montana's low campaign contribution limits violated the First Amendment. (Thanks to Emily Phelps over at the Constitutional Accountability Center's Text and History Blog for the tip.) This latest ruling in Lair v. Bullock means that Montana's contribution limits will remain in place pending appeal to the Ninth Circuit and, in particular, through the election. All signs now point to a Ninth Circuit reversal of Judge Lovell's ruling that the contribution limits violated the First Amendment.
Wednesday, October 17, 2012
A three-judge motions panel of the Ninth Circuit in Lair v. Bullock granted Montana's motion to stay District Judge Lovell's earlier decision that Montana's low campaign contribution limits violated the First Amendment. (Recall that the panel previously granted a temporary stay. Here's some background.) The ruling means that Montana's campaign contribution limits remain in place pending appeal and sends a strong signal that the Ninth Circuit will reverse Judge Lovell's decision and uphold the limits.
The panel reaffirmed its own ruling in Montana Right to Life Ass'n v. Eddleman (upholding Montana's low campaign contribution limits against a First Amendment challenge) and rejected any notion that the Supreme Court's ruling in Randall v. Sorrell (overturning Vermont's low campaign contribution limits) abrogated Eddleman. Here's what the Ninth Circuit panel said:
We conclude that the State of Montana has made a strong showing that a merits panel of this Court will likely conclude that, absent en banc proceedings or an intervening decision of the Supreme Court, we remain bound by our decision in Eddleman. We also conclude that a merits panel is likely to hold that the analytical framework of the Supreme Court's decision in Randall does not alter the analysis of Buckley or Shrink Missouri in a way that affects our decision in Eddleman, for three reasons. First, there is no opinion of the Court in Randall. Second, even if we thought that Justice Breyer's plurality opinioin represented the narrowest view of a majority of the Court, it did not depart from the principles of Buckley and Shrink Missouri that we applied in Eddleman. Third, even if we applied Randall to [the Montana limits], we cannot find, on the basis of the district court's findings, reason to disagree with, much less overturn, Eddleman. In light of Montana's interest in regulating campaign contributions, the lack of evidence that other parties will be substantially injured, and the public's substantial interest in the stability of its electoral system in the final weeks leading to an election, we will stay the order pending the state's appeal.
Op. at 3-4.
Monday, October 15, 2012
Recall that District Judge Charles C. Lovell (Montana) ruled earlier this month in Lair v. Murry that Montana's low campaign contribution limits for individuals and political parties violated the First Amendment and permanently enjoined the state from enforcing those limits. Judge Lovell wrote that he'd issue more detailed findings and conclusions soon. (He did; see below.)
But late last week, before Judge Lovell issued his follow-up, the Ninth Circuit issued a temporary stay of Judge Lovell's ruling, putting the limits back into place pending further action by the Ninth Circuit. The three-judge panel wrote that Judge Lovell's original ruling contained no findings and conclusions, and thus "the court is severely constrained in its consideration of the underlying issues raised in the emergency motion [for a temporary stay], including whether, in light of Randall v. Sorrell . . . our decision in Montana Right to Life Ass'n v. Eddleman . . . must be revisited."
A little background. The Ninth Circuit previously upheld Montana's low limits against a First Amendment challenge in Montana Right to Life Ass'n in 2003. The Ninth Circuit in Montana Right to Life Ass'n relied on the Supreme Court's Nixon v. Shrink Missouri Government PAC (2000), which rejected a claimed constitutional minimum on campaign contributions and instead said the test was whether Missouri's contribution limit was so low as to impede the ability of the candidates to amass the resources necessary for effective advocacy. But since 2003, the Supreme Court overturned Vermont's ultra-low contribution limits in Randall v. Sorrell (2006). Thus, the Ninth Circuit panel wondered whether Judge Lovell thought that Randall v. Sorrell abrogated circuit law in Montana Right to Life Ass'n.
The Randall opinion is directly on point here. The Randall decision undeniably paints a new gloss on the law and provides important insight into the lower bound for contribution limits. Randall is intervening law that obviates Montana Right to Life's precedential value, particularly in light of the Randall plurality's expressed suspicion of Montana's contribution limits.
Op. at 28.
The case is now in the Ninth Circuit's court. While its temporary stay is still in effect, the court may revoke it in light of Judge Lovell's findings, or it may not. Whatever the court does with its temporary stay, it looks like the appeal will move forward. The Ninth Circuit established a page for the case here.
Thursday, October 4, 2012
District Judge Charles C. Lovell (Montana) ruled in Lair v. Murry that Montana's low campaign contribution limits for individuals and political parties violated the First Amendment and permanently enjoined the state from enforcing those limits.
The State says that it will seek an emergency stay in the Ninth Circuit. Barring a stay, however, or a quick appeal, the ruling means that Montana's limits on individual and political party contributions are unenforceable--this election cycle, and maybe beyond.
This is the second recent significant defeat for Montana in the area of campaign finance restrictions. Recall that the Supreme Court summarily reversed a Montana Supreme Court ruling upholding the state's restrictions on corporate electioneering expenditures. (The Montana court ruled that Montana's unique history of political corruption justified the restriction, even under Citizens United. The Supreme Court disagreed.)
The restrictions at issue cap individual and political party contributions to candidates at very low levels. For example, Montana Code Section 13-37-216(1)(a) caps contributions at $500 for candidates for governor and lieutenant governor, $250 for candidates for all other state-wide offices, and $130 for candidates to all other offices.
The plaintiffs argued that these limits violated the First Amendment. Judge Lovell agreed. In a very short order, he wrote that "[t]he contribution limits prevent candidates from 'amassing the resources necessary for effective campaign advocacy.'" (Quoting Randall v. Sorrell (2006) (overturning Vermont's low limits on campaign contributions)).
Judge Lovell wrote that he'd later issue findings of fact and conclusions of law in support of his order.