Shrink Missouri Government PAC v. Maupin , 71 F.3d 1422 ( 1995 )

___________
No. 95-2857
___________
Shrink Missouri Government PAC, *
a political action committee; *
W. Bevis Schock; Frederick T. *
Dyer, *
*
Appellees, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
John Maupin, in his official *
capacity as Chair of the *
Missouri Ethics Commission; *
Jeremiah W. Nixon, is his *
official capacity as Missouri *
Attorney General, *
*
Appellants. *
___________
Submitted: September 13, 1995
Filed: December 19, 1995
___________
Before BOWMAN, ROSS, and JOHN R. GIBSON, Circuit Judges.
___________
BOWMAN, Circuit Judge.
Missouri's Campaign Finance Disclosure Law, Mo. Rev. Stat. Ch. 130
(1994), was amended twice in 1994. In July the state legislature adopted
a measure commonly known as Senate Bill 650, and in November the citizens
of Missouri adopted a ballot initiative commonly known as Proposition A.
Both of these measures limit election campaign contributions and
expenditures and thus tend to limit the free exercise of political speech
that the First Amendment guarantees. W. Bevis Shock and Frederick T. Dyer,
prospective candidates for public office, and Shrink Missouri Government
PAC, a political action committee (PAC) planning to make campaign
contributions in future elections, sought a permanent injunction against
the implementation and enforcement of the following provisions of the
amended Campaign Finance Disclosure Law: (1) the Proposition A limits on
campaign contributions, Mo. Ann. Stat. § 130.100 (Vernon Supp. 1995), as
applied to contributions by candidates to their own campaigns; (2) the
limits on total expenditures by candidates, id. §§ 130.052, 130.053; (3)
the restrictions on carrying over campaign funds from one election to
another, id. § 130.130; and (4) the requirement that negative campaign
advertisements state that they were approved and authorized by the
candidate on whose behalf they were disseminated, id. § 130.031. On cross-
1
motions for summary judgment, the District Court held that each of these
provisions violated the First Amendment rights of candidates and their
contributors. The court enjoined the Attorney General of Missouri and the
Chair of the Missouri Ethics Commission (referred to herein jointly as "the
state") from implementing, enforcing, or acting in reliance on the
challenged provisions. Shrink Missouri Government PAC v. Maupin, 892 F.
Supp. 1246 (E.D. Mo. 1995). The state now timely appeals.2 After a de
novo review of the District Court's judgment, see Maitland v. University
of Minnesota, 43 F.3d 357, 360 (8th Cir. 1994), we conclude that the
challenged provisions violate the First Amendment. We therefore affirm the
well-reasoned decision of the District Court.
1
The Honorable Catherine D. Perry, United States District
Judge for the Eastern District of Missouri.
2
The state does not appeal the District Court's decision that
the "approved and authorized" requirement of Mo. Ann. Stat.
§ 130.031 is unconstitutional, so that issue is not before us.
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I.
As a preliminary matter, we must address the state's contention that
summary judgment should not have been granted because genuine issues of
material fact remain in dispute. See Fed. R. Civ. P. 56(c). The state did
not make this contention in the District Court. Moreover, as the state
notes, both sides agreed that the case could be decided on the cross
motions for summary judgment. The state thus has waived the issue. See
Empire State Bank v. Citizens State Bank, 932 F.2d 1250, 1253 (8th Cir.
1991). In any event, we are satisfied that no genuine issues of material
fact remain in dispute.
II.
The State argues that the District Court erred when it (1) addressed
the constitutionality of applying the Proposition A contribution limits to
the candidates themselves because no Article III case or controversy
existed between the parties with respect to that issue; (2) held that the
state's "voluntary" expenditure limits scheme is unconstitutional; and (3)
held that the restrictions on carrying over campaign funds from one
election to another is unconstitutional. We will address each of these
arguments in turn.
A.
The District Court held that the Proposition A campaign contribution
limits are unconstitutional to the extent that they limit a candidates's
ability to use his or her personal funds or property in support of the
candidate's own campaign for public office. See Mo. Ann. Stat.
§ 130.100 (Vernon Supp. 1995) (limiting "contributions"); Mo. Rev. Stat.
§ 130.011(12)(a) (1994) (defining "contributions" to include a "candidate's
own money"). The state argues that the District Court was without
jurisdiction to consider
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this question, there being no Article III case or controversy because state
officials have not threatened to prosecute candidates for making over-the-
limit contributions to their own campaigns. We need not consider the
jurisdictional point, however, because in a companion case this Court has
held that the Proposition A contribution limits are unconstitutional on
their face. Carver v. Nixon, No. 95-2608, slip op. at 25 (8th Cir. Dec.
19, 1995). Thus those limits necessarily are unconstitutional as applied
to candidates as well as to other contributors.
B.
The District Court held that Senate Bill 650's "program of voluntary
expenditure ceilings," State's Brief at 13, is coercive, restricts
protected speech, and fails to pass constitutional muster under the strict
scrutiny test. Shrink Missouri Gov't PAC, 892 F. Supp. at 1252. The state
argues that these voluntary spending limits are constitutional under
Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam), in which, inter alia, the
Supreme Court struck down spending limits imposed by the Federal Election
Campaign Act of 1971 as amended in 1974, 2 U.S.C. § 441a (1976).
The statute at issue in this case requires candidates for elected
public office in Missouri to file an affidavit stating whether they will
comply with spending limits that vary depending on the office sought. Mo.
Ann. Stat. § 130.052.1 (Vernon Supp. 1995). The affidavit must be filed
with the candidate's declaration of candidacy. Candidates who choose not
to comply with the spending limits may accept contributions from
individuals only and must refuse contributions from PACs, political
parties, labor unions, corporations, etc. Id. § 130.052.3. Non-complying
candidates also must submit daily disclosure reports once they exceed the
spending limits. See id. § 130.052.3. No such restrictions or
requirements are placed on candidates who swear to
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abide by the limits, though they are penalized if they spend more than the
applicable limit, see id. § 130.053.1.
When considering whether a campaign finance law unconstitutionally
infringes freedom of speech, this Court's task is to decide whether the
provision in question actually "burdens the exercise of political speech
and, if it does, whether it is narrowly tailored to serve a compelling
state interest." Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 657
(1990) (citing Buckley, 424 U.S. 1); see also Day v. Holahan, 34 F.3d 1356,
1361 (8th Cir. 1994), cert. denied, 115 S. Ct. 936 (1995).
Relying on a footnote in Buckley, the state argues that the
expenditure limits are clearly constitutional regardless of the level of
scrutiny applied because they are voluntary and merely provide an incentive
for compliance. In Buckley, the Supreme Court held that limitations on the
total expenditures by a candidate for federal office violated the First
Amendment. 424 U.S. at 54-58. The Court nonetheless noted that
Congress may engage in public financing of election campaigns
and may condition acceptance of public funds on an agreement by
the candidate to abide by specified expenditure limitations.
Just as a candidate may voluntarily limit the size of the
contributions he chooses to accept, he may decide to forgo
private fundraising and accept public funding.
Id. at 57 n.65. The spending limits adopted by the Missouri legislature
differ substantially from the scenario described in footnote 65 of Buckley
and are thus distinguishable.3 The Senate
3
Because the Missouri expenditure limits are distinguishable
from the scenario described in the Buckley footnote, we need not
and do not address the difficult question of the extent of the
state's power to condition the receipt of benefits on the
renunciation of constitutionally protected rights. See Rust v.
Sullivan, 500 U.S. 173, 197 (1991) (distinguishing constitutional
conditions placed on uses of government funds by benefit recipients
and unconstitutional conditions placed on recipients themselves);
compare Rodney A. Smolla, The Reemergence of the Right-Privilege
Distinction in Constitutional Law, 35 Stan. L. Rev. 69 (1982), with
William W. Van Alstyne, The Demise of the Right-Privilege
Distinction in Constitutional Law, 81 Harv. L. Rev. 1439 (1968).
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Bill 650 limits are not voluntary because they provide only penalties for
noncompliance rather than an incentive for voluntary compliance. Therefore
the state's reliance on the dicta in footnote 65 of Buckley is misplaced.
In the hypothetical set out in footnote 65, a candidate agreeing to
limit his or her expenditures receives the benefit of public funding.
Candidates who do not so agree do not receive public funding, but are not
penalized for their reliance on private funding. Under Senate Bill 650,
however, a candidate agreeing to abide by the spending limits receives no
benefit other than the state's blessing to seek the private funding he or
she would be free to seek in any event. At the same time, candidates who
do not agree to abide by the spending limits are penalized in two ways: (1)
the state makes it unlawful to seek important sources of private funding
that otherwise they would be free to seek; and (2) the state requires daily
reporting of expenditures. These penalties make the limits coercive, not
voluntary. The state, however, does not believe that it is withdrawing an
otherwise available source of funding; it characterizes the availability
of organizational funding as the incentive that it offers to candidates to
agree to abide by the spending limits. We disagree with the state's
characterization.
From the state's perspective, it is providing complying candidates
with a substantial benefit by "allowing" PACs, political parties, labor
unions, corporations, and other organizations to make campaign
contributions. The state's argument, however, assumes that it properly
could ban such organizations from making any contributions to candidates
running for state office. This assumption is incorrect. We believe it is
clear that a ban on
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campaign contributions by organizations would not survive a constitutional
challenge. See, e.g., Federal Election Comm'n v. Massachusetts Citizens
for Life, Inc., 479 U.S. 238, 263 (1986) (striking down federal limitation
on use of corporate funds in connection with federal elections as applied
to nonprofit corporation); Day v. Holahan, 34 F.3d at 1365-66 (invalidating
Minnesota's $100 limit on contributions from individuals and PACs). We
note that the Supreme Court has indicated that expenditure limits applied
to organizations "impinge on protected associational freedoms" as well as
freedom of speech. Buckley, 424 U.S. at 22. Thus the state's argument
that it offers an incentive by allowing candidates to accept such
contributions is disingenuous. Organizational contributions are
constitutionally protected irrespective of any agreement by a candidate to
abide by the state-imposed expenditure limits. No candidate would
voluntarily agree to comply with the expenditure limits in exchange for
access to sources of funding to which he or she already has a
constitutional right of access. Rather, Senate Bill 650 forces compliance
by imposing substantial penalties for non-compliance. The purported
benefit is illusory, and the statute is coercive.
We therefore conclude that Senate Bill 650 "impose[s] direct and
substantial restraints on the quantity of political speech," speech that
is "at the core of . . . the First Amendment freedoms." Buckley, 424 U.S.
at 39 (internal quotation marks and citation omitted); see also Day v.
Holahan, 34 F.3d at 1360 (holding that limits on independent expenditures
infringe protected speech). Even though the statute infringes protected
speech, the statute nonetheless will be upheld "if the state can show that
it is narrowly drawn to serve a compelling state interest." Day v.
Holahan, 34 F.3d at 1361; see also Austin, 494 U.S. at 657. In this case
the state has failed to meet its burden.
First the state argues that the "over-arching state interest" served
by Senate Bill 650 is the reduction of corruption and the
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appearance of corruption in the state's election process. State's Brief
at 15. The state also refers to its related concerns with "the integrity
of the [electoral] process," id. at 20, and public "confidence in the
system of representative government," id. at 30 (quotation marks and
citation omitted). While the state's interest in reducing corruption and
its related concerns constitute a compelling state interest, the state has
failed to explain how the campaign spending limits here in question are
narrowly tailored to serve this interest or address these concerns.
Indeed, we are hard-pressed to discern how the interests of good government
could possibly be served by campaign expenditure laws that necessarily have
the effect of limiting the quantity of political speech in which candidates
for public office are allowed to engage. See Buckley, 424 U.S. at 55-57.
The state also argues that the expenditure limits are justified by
its interests in (1) maintaining the individual citizen's participation in
and responsibility for the conduct of government and (2) discouraging "the
race toward hugely expensive campaigns, especially at the local level,"
State's Brief at 17-18. The state's interest in maintaining individual
participation is what the District Court correctly described as an effort
to "``level[] the playing field' between the rich and the poor." Shrink
Missouri Gov't PAC, 892 F. Supp. at 1253. The Supreme Court in Buckley,
however, specifically held that the government may not "restrict the speech
of some elements of our society in order to enhance the relative voice of
others," Buckley, 424 U.S. at 48-49, and no subsequent decision of the
Court has undermined that holding.4 With respect to the state's interest
in keeping down the
4
Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990),
is not to the contrary. While the Supreme Court upheld Michigan's
restriction on independent expenditures by corporations in support
of or in opposition to candidates for state office, the Court did
not overrule Buckley and "hinted" that its decision was limited by
the fact that the restriction applied only to independent
expenditures by corporate entities and did not apply to such
expenditures by individuals. See Lillian R. BeVier, Campaign
Finance Reform: Specious Arguments, Intractable Dilemmas, 94
Colum. L. Rev. 1258, 1270 (1994).
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costs of running for office, we note that the Buckley Court held that "the
mere growth in the cost of . . . election campaigns in and of itself
provides no basis for governmental restrictions on the quantity of campaign
spending." Buckley, 424 U.S. at 57. This Court is not at liberty to
disregard the explicit holdings of Buckley. We therefore hold that the
state, having failed to show that the expenditure limits here at issue are
narrowly drawn to serve a compelling state interest, has not justified the
substantial burden that these limits place on speech that is at the core
of the First Amendment.
Our analysis is not complete, however, because the state argues that
the District Court should not have enjoined enforcement and implementation
of sections 130.052 and 130.053 in their entirety. The state contends that
several provisions can be implemented constitutionally despite the
invalidity of the expenditure limits. These provisions include the
requirement that candidates declare whether they will keep their
expenditures within the unconstitutional limits, the unconstitutional
limits themselves (described by the state for purposes of its severability
argument as "the legislature's views as to the appropriate ceilings on
expenditures," State's Brief at 30), and the disclosure requirements that
are triggered by exceeding the unconstitutional limits. The state argues
that these provisions should have been severed from the invalid parts of
the statute. See Mo. Rev. Stat. § 1.140 (1994) (providing for general
severability of all Missouri statutes).
The District Court did not address the severability of any remaining
portions of Senate Bill 650 under Missouri law, see Kinley Corp. v. Iowa
Utilities Board, 999 F.2d 354, 359 (8th Cir.
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1993) (holding that questions regarding severability of state statutes are
controlled by state law), but we think the proper response to the state's
argument is clear: the remaining portions of sections 130.052 and 130.053
are not severable.
Once the unconstitutional portions of a statute are excised, the
remainder can be upheld under Missouri law if it "is in all respects
complete and susceptible of constitutional enforcement" and the court
concludes that it would have been adopted even if it had been known that
"the excluded portion was invalid." Millsap v. Quinn, 785 S.W.2d 82, 85
(Mo. 1990) (en banc). In Ryan v. Kirkpatrick, the Missouri Supreme Court
left intact the remainder of the Campaign Finance Disclosure Law after
invalidating one discrete provision. 669 S.W.2d 215, 219-20 (Mo. 1984) (en
banc). That court held that the unconstitutional portions "are not so
intertwined with [the law's] valid provisions as to leave it too enervated
to stand." Id. In this case, the District Court did not invalidate all
of Senate Bill 650; here the state asks us to leave intact portions of the
very same discrete provisions that impose unconstitutional restraints on
First Amendment rights. We cannot oblige the state. Every subsection of
sections 130.052 and 130.053 makes some reference to the expenditure limits
that we have held unconstitutional. The invalid portions are inextricably
intertwined with the remainder of the statute. Moreover, the statute
provides that "[c]ampaign expenditures shall be limited pursuant to this
section" and that "[t]o be in compliance with the expenditure limits . .
., the following expenditure limits . . . may not be exceeded by a
candidate committee." Mo. Ann. Stat. § 130.052 (Vernon Supp. 1995)
(emphasis added). The state proposes that we convert this mandatory
language into a non-binding legislative recommendation. The legislature,
however, did not enact a set of suggestions.
In sum, any remaining valid provisions of sections 130.052 and
130.053 are not complete and susceptible of constitutional
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enforcement and we cannot conclude that the legislature would have adopted
them had it known the expenditure limits were unconstitutional. The
District Court thus did not err when it enjoined the enforcement and
implementation of sections 130.052 and 130.053 in their entirety.
C.
In Proposition A the citizens of Missouri adopted a measure designed
to address the practice of carrying over "war chests" of campaign funds for
future elections.5 Under the ballot initiative measure, within ninety days
of an election a candidate must turn over any excess funds, "except for an
amount no greater than ten times the individual contribution limit" for the
office sought, to the Missouri Ethics Commission or to contributors. Mo.
Ann. Stat. § 130.130 (Vernon Supp. 1995). This is popularly known as a
"spend-down provision" because candidates will most likely choose to spend
all of their funds during the last days of the campaign rather than
returning funds to contributors or turning them over to the state. The
ability of a candidate to retain contributions for future elections is thus
substantially limited.
The District Court held that the spend-down provision imposes a
substantial burden on political speech by requiring that funds raised
during a particular campaign be spent during the campaign. The court
rejected the state's assumption that "blind support" in the form of a
contribution that can be used in the current campaign or any future
campaign "must constitute an impermissible attempt at improper quid pro quo
influence." Shrink Missouri Gov't PAC, 892 F. Supp. at 1254. The state,
on the other hand, argues that the spend-down provision does not limit
speech but encourages it by
5
The legislature, in Senate Bill 650, earlier adopted a
similar, but less restrictive, measure. See Mo. Ann. Stat.
§ 130.038 (Vernon Supp. 1995). Only the Proposition A "war chest"
limitation is challenged in this case.
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requiring candidates "to do precisely what the contributors intend: to
speak." State's Brief at 38. In our opinion, the state's argument makes
an unwarranted assumption about the intention of campaign contributors and
badly misrepresents reality. Some contributors undoubtedly do intend to
give a candidate "blind support," and they do so without any hope of
gaining improper influence with that candidate. Beyond that, we believe
the state's characterization of the provision confirms the District Court's
decision that it infringes the First Amendment. From the state's
perspective, the provision is intended to require the candidate to speak
in the current election. We note that "the right of freedom of thought
protected by the First Amendment against state action includes both the
right to speak freely and the right to refrain from speaking at all."
Wooley v. Maynard, 430 U.S. 705, 714 (1977). From the appellees'
perspective, the provision limits the quantity of a candidate's speech in
future elections. We note that this effect is identical to the effect of
the expenditure limits addressed earlier in this opinion except that the
impact of the provision is postponed to future elections. Whether we
accept the state's or the appellees' characterization of the spend-down
provision is irrelevant. Either way, we conclude that rights protected by
the First Amendment are implicated and that the provision must be subjected
to strict scrutiny.
While strict scrutiny may not always be fatal to a challenged
restriction on speech, it is in this case. The state has not demonstrated
that the spend-down provision is narrowly tailored to serve a compelling
government interest. The state argues that this provision serves three
interests.
First, it attacks corruption and its appearance by (1)
preventing the kinds of quids pro quo that occur when money is
given to candidates in uncontested races, and (2) ensuring that
the contributions limits of Proposition A . . . have a
measurable effect on the political system . . . . Second, it
preserves the integrity of the electoral process by (1)
counterbalancing any
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discriminatory effects against challengers and in favor of
incumbents that are created by Proposition A's contribution
limits, (2) ensuring the opportunity of all citizens, not just
those who have amassed large war chests in noncompetitive
races, to participate in the political process as candidates,
and (3) protecting the free speech interests of contributors.
Third, it promotes speech and fairness, thus sustaining the
active, alert responsibility of the individual citizen in our
democracy.
State's Brief at 38-39 (citations omitted). At the outset, we note that
any interest related to the effective operation of Proposition A's
contribution limits fails to qualify as compelling because we have held
that those limits are unconstitutional. See Carver v. Nixon, slip op. at
25. We further note that any interest defined by reference to funds raised
in "noncompetitive" or "uncontested races" is unhelpful because the spend-
down provision applies to funds raised in all campaigns; thus the provision
is not narrowly tailored to serve such an interest. The sole remaining
interests asserted by the state are that the provision "preserves the
integrity of the electoral process by . . . protecting the free speech
interests of contributors" and that it "promotes speech and fairness, thus
sustaining the active, alert responsibility of the individual citizen in
our democracy." Assuming that the state has articulated compelling
interests, we conclude that the state has failed to demonstrate that the
spend-down provision is narrowly tailored to do either of the things that
the state asserts it will do. Although the state asserts that the
provision protects the free speech interests of contributors, it is just
as likely that the provision infringes those interests. Surely the
contributor's political free speech interests are not well served if a
candidate is compelled (1) to waste campaign contributions on unnecessary
speech (in order to spend down the campaign's accumulated assets) or (2)
to turn over those contributions to the Missouri Ethics Commission or
return them to contributors. With respect to the provision's impact on the
"active, alert responsibility of the individual citizen," the state's
arguments are broad and
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conclusory. The state makes no attempt to show how the spend-down
provision is narrowly tailored to serve that interest, saying only that
"[c]itizens now may decline to participate in a particular race . . .
because of the overwhelming advantage carried over from another day" and
that the "carryover restriction may well be the difference between having
noncompetitive races, in which there is little or no speech, and having
active campaigns in which there is uninhibited, robust, and wide-open
debate on public issues," State's Brief at 45 (internal quotation marks and
citation omitted). These statements fall far short of a showing that the
spend-down provision is narrowly tailored to promote "the active, alert
responsibility of the individual citizen in our democracy." We conclude
that section 130.130 cannot withstand strict scrutiny and that it violates
freedoms that the First Amendment protects.
III.
In sum, we hold that the expenditure limits of Senate Bill 650 and
the spend-down provision of Proposition A restrict expression protected by
the First Amendment and that the state has not demonstrated that these
provisions are narrowly tailored to serve a compelling government interest.
Furthermore, based on this Court's decision in Carver v. Nixon, slip op.
at 25, which holds that Proposition A's contribution limits are facially
unconstitutional, we conclude that those limits are necessarily
unconstitutional insofar as they would limit contributions by candidates
to their own campaigns. The judgment of the District Court enjoining the
Attorney General of Missouri and the Chair of the Missouri Ethics
Commission from implementing, enforcing, or acting in reliance on the
challenged provisions is therefore affirmed.
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A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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