Petition for Writ of Certiorari — Arizona Free Enterprise Club's Freedom Club PAC v. Bennett
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Supreme Com Us
No. 19-230
= nw I Pon
In The OFFICE OF THE Ci ERK
Supreme Court of the Anited States
°
JOHN MCCOMISH. NANCY MCLAIN,
and TONY BOUTE,
\
KEN RBENNETE an has offheral capacity as
Secretary of State of the State of Arona, and GARY
SCARAMAZZO. ROYANN J PARKER, JR REREY |
FAIRMAN, LOUIS HOFFMAN and LORTDANIETS
in ther official capacities as members of the
ARIVONACTTIZENS CLEAN ELECTIONS COMMISSION
Respondents
o
On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Ninth Circuit
°
PETITION FOR WREE OF CERTIORARI
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QUESTIONS PRESENTED FOR REVIEW
Whether Crfizens United v0 Federal Election Comm'n.
130 S.Ct. S76 (2010), and Davis ¢& Federal Election
Common, L288. Ct 2759 ¢2008), require this Court to
stmke down Anvzona’s matching funds tngyger under
the First and Fourteenth Amendments because it
penalizes and deters free speech by forcing privately-
financed candidates and their supporters to finance
the dissemination of hostile political speech whenever
they raise or spend private money, or when independ
ent expenditures are made, above a “spending: limit”
)
Whether Crtrzens United and Dacrs require this
Court to strike down Arizona’s matching funds trigger
under the First and Fourteenth Amendments because
it regulates campaign financing in order to equalize
“influence” and financial resources among competing
candidates and interest groups, rather than to ad.
vance directly a compelling state interest in the least
restrictive manner
a
RULE 14.1(0b) STATEMENT
A lst of all parties to the proceeding in the court
whose yudgment ts the subject of the petition is as
follows:
Plaintiffs-Appellees and Petitroners’ dohn MeComuish,
Nancy MeLain; and Tony Boure
Plaintiy?-Intervcenors-Appellees and Respondents
Dean Martin; Robert Burns; Rick Murphy; Arizona
Free Enterprse Club’s) Freedom Club PAC, and
Anzona Taxpavers Action Committee, as agent of
Taxpayers Action Committee
Defendants Appellants and Respondents’ Ken Ben-
nett, in his official capacity as Secretary of State of
the State of Arizona, Gary Scaramazzo, in his officral
capacity as a member (Commissioner! of the Ariona
Citizens Clean Elections Commission; Rovann J
Parker, in her official capacity as a member (Commis.
sioner) of the Anzona Citizens Clean Elections Com.
mission, Jeffrey Lo Fairman, in his official capacity as
a member (Commissioner! of the Arvona Citizens
Clean Elections Commission, Lous Hoffman, in tis
oMcial capacity as a member (Commissioner) of the
Arizona Citizens Clean Elections Commission, and
Lorn S) Damels, in her official capacity as a member
‘Commissioner! of the Anzona Citizens Clean Elec:
trons Commission
Defendant Intervenor-Appellant and Respondent
Clean Elections Institute, Ine
This petition has not been filed by or on behalf of a
nongovernmental corporation
Mi
TABLE OF CONTENTS
QUESTIONS PRESENTED FOR REVIEW
RULE 14. 1b) STATEMENT
TABLE OF CONTENTS
TABLE OF AUTHORITIES
PETITION FOR WRIT OF CERTIORARI
OPINIONS BELOW,
JURISDICTION
CONSTITUTIONAL AND STATUTORY PRO-
VISIONS INVOLVED
STATEMENT OF THE CASE
Page
1 The Speech Burden of Arizona’s Matching
Funds Trigger
Il The Windfall EtYect of Amvona’s Matching
Funds Trigger
Hl The Disconnect Between Anticorruption
Purposes and Arizona’s Matching Funds
Trigger
IV. The Proceedings Below
st
REASONS FOR GRANTING THE PETITION
1 This case presents issues of great nation
wide umportance and the Ninth Circuit's
decision contradicts recent decisions of this
Court
lI
Vv
TABLE OF CONTENTS — Continued
There is a clear and irreconcilable split
among the circuits on the issues imph-
cated by this case, requiring resolution
oc ee os es,
A. The cireutts clash on the speech bur-
den of matching funds triggers
B. The circuits clash on the level of scru-
tiny appheable to matching funds
triggers
C. The cireuns clash as to whether pro-
moung participation in public financing
serves anticorruption purposes
D. There is a substantial risk that the
crreuit split will widen.
FE. This petition must be granted = to
avoid growing confusion over First
Amendment jurisprudence
The principles enforced by the Court in
Citizens United and Davis provide a clear
framework for harmonizing the split: be-
tween the circuits on the constitutional
tv of matching funds triggers...
A. Citizens United's prohibition on in
fluence and resource leveling cam.
pain finance regulations provides a
clear framework for harmonizing the
spht between the circuits |
)
29
TABLE OF CONTENTS ~- Continued
Page
Bo Davis also provides a framework for
harmonizing the split between the
circuits by isolating the Ninth Circuit
TRE ART: Tae PR Re eRe RARE CONES 32
lL. By tving the fate of contribution
limit triggers to matching funds
triggers, Davrs makes it possible
to harmonize the First, Second,
Fourth, Sixth, Eighth and FElev-
SE I ini csted sins teh en' Raed ae 3
te
This petition should be granted
because the Ninth Circuit's deci-
Sion Is A unmque impediment to the
harmomous development of First
Amendment jurisprudence under
to
AEE EIA CE CGE ED IO SOR
ei San hil SEES RE RET TDs UO er: ee Peet eee i ae se EEN 35
APPENDIX
Judgment Entered by the U.S. Court of Ap-
peals for the Ninth Circuit, entered May 21,
2010 ....... esha apiieeaseaiiccachenvacmalact tien App. 1
Order and Amended Opinion of the U.S. Court
of Appeals for the Ninth Circuit Reversing
Judgment in Favor of Plaintitfs, filed May
21, 2010, Amended June 23, 2010200000000... App. 2
Judgment Entered by the U.S. District Court
for the Distmet of Arizona in Favor of Plain-
tiffs, entered Jan. 21, 2010 ......................:0008 App. 46
vl
TABLE OF CONTENTS — Continued
Page
Order of the U.S. District Court for the District
of Arizona granting Plaintiffs’ Motion for
Summary Judgment and denying Defend-
ants’ Motion for Summary Judgment, filed
te BE iicceynec <td ucanntoeacenia acunibediaeepehpent App. 47
Order of the U.S. Supreme Court granting
Joint Second Renewed Emergency Applica-
tion to Vacate Stay, filed June 8, 2010.......... App. 81
Order of the U.S. Supreme Court denying
Renewed Emergency Application to Vacate
I, Ge UII Bg, BI eves sccccncs secs cups caviscesseset App. 82
Order of the U.S. Supreme Court denying
Emergency Application to Vacate Stay, Feb.
Se EE nceelunduccvssisinedada dian vascntensiubabatadsiadeimivetsurds App. 83
Order of the U.S. Court of Appeals for the
Ninth Circuit Motions Panel Extending Stay,
i Eee Aaa ae App. 84
Order of the U.S. Court of Appeals for the
Ninth Circuit denying Emergency Motion to
Vacate Stay Pending Appeal, Filed Jan. 29,
RA ARS Cele Ss a, helt BAR RM BS App. 90
Findings of Fact and Conclusions of Law of the
U.S. District Court for the District of Arizona
in support of denial of Plaintiffs’ Motion for
Preliminary injunction, filed Oct. 17, 2008 ..... App. 92
Order of the U.S. District Court ........0....0....... App. 120
Text of First Amendment to U.S. Constitution.... App. 134
V1l
TABLE OF CONTENTS -— Continued
Page
Text of Fourteenth Amendment to U.S. Consti-
ID idncrnsesinsevienndtmamenntpenieditinwerininianinasninds App.
We GE GE OU) E.. F BI ccc cncssnccccecsesccncesssssesseve App
Text of Arizona Citizens Clean Elections Act,
Ariz. Rev. Stat. Ann. $§ 16-940 to 16-961.... App
Excerpts from Transcript of Proceedings before
Arizona Citizens Clean Elections Commis-
sion on June 9, 2010 o.oo... eee ceeeeeeeeeeeee eens App.
Selections from Sept. 15, 2008 Deposition of
Plaintiff Nancy McLain
Selections from Sept. 18, 2008 Deposition of
Corporation Commission Candidate Paul B.
Newman (omitting exhibits 1 and 2)
Declaration of Plaintiffs’ Expert Dr. Marcus
Osborn (omitting Exhibits 1 through 14)....App
Declaration of Law Intern Jeffrey Ober in Oppo-
sition to Defendants/Defendant-Intervenor’s
Motions for Summary Judgment (omitting
exhibits 1 through 10)
Rebuttal Declaration of Plaintiff Tony Bouie in
Support of Second Motion for Preliminary
Injunction
Rebuttal Declaration of Tony Bouie in Support of
Plaintiffs’ Motion for Summary Judgment.... App
Declaration of Plaintiff Tony Bouie in Support
of Plaintiffs’ Motion for Summary Judgment
(omitting exhibits)...............0....cccccceeceeeeeeeeees App
invaenaphonnadionessenvuniinndians App.
Spaeainaeanidaaieapaianiomenneninsninianedaineniiin App.
134
. 137
. 138
. 190
. 198
. 223
277
295
. 298
. 304
vin
TABLE OF CONTENTS — Continued
Page
Declaration of PlaintutY John MeComish in
Support of Plaintiffs’ Motion for Summary
Judgment (omitting exhibits Land 4)... App. 321
TABLE OF AUTHORITIES
Page
CASES:
Bd. of County Comm'rs vo Umbehr. 518 US
668 (1996)............... SRR Ea | ee
Buckley v. Valeo, 424 US. 1 1976) ats 5) 16
Crttzens United vo Federal Election Comon'n,
bow ©. Ct. B76 (Z0I0)............ 6. cco. L PASsum
Daggett vo Comm'n on Goe't Ethics, 205 F.3d
445 (Ist Cir 2O00Q) Locce PASSION
Davis vo Federal Election Cori nm, 128 S. Ct.
27H9 (2008). ies | | nies PAISNTIM
Dav v, Hallonan, 34 FSd 1356 (Sth Cir, 1994). passim
Elrod v. Burns, 427 ULS. 347 (19768) ...... , 27
Federal Election Common vo Wisconsin Right to
LAfe, 551 U.S. 448 (2007)............cccccccccecs. ee
Grable v Patton, 142 F3d 940 (6th Cir 199s) Pass
Green Party of Conn. v. Garfield, Nos. 09-3760-
eviL), 09-394 L-eweC ON), ZOLO WL 2787153,
2010 US. App. LENIS 14286 (2nd Cir
2010)
PASI
Grosjean vo American Press Co., 297 U.S. 2838
fel Relea Pte Pane ec teee
laird v. Tatum, 408 US. 1 ULaT2) |” 27
N.C. Right to Life, Inc. vo Leake, 524 F.3d 427
Ce ee es tt SD PASSION
Pacific Gas & a Cone. Public Util Comior'n:
of Cal, ATS US. LUQS6) eA! | 16, 17
TABLE OF AUTHORITIES — Continued
Page
Rostker i’ Goldbers, 445 U Ss L306 (19S)... ih
Rutan vo Republican Party of Uiinors, AT US
62 (1Y9O)..... 26, 27
Scotti cv. Roberts, No LOTS21, ZO WL
2YTTSE14, BOLO US. App) LENIS 15897 (11th
Cir. 2010).... , DEO EY passin
Speiser vt. Randall, 357 US. 313 195s) 27
Wo Arrdines. Ineo co Intl Brotherhood of Team
sters, 480 US. 1801 CI9S7) oo... Is
Wilkinson oo Jones, ST6 F Supp. 916 (WD Ky
L195) 333
CONSTITUTIONAL PROVISIONS
First Amendment to the United States Constr:
tution... $i a seas , 6. PASSIM
Fourteenth Amendment to the United States
Constitution 2.8, 14
STATUTES
28U S.C. § 125401) 2
4A2 USC. S$ 1983 2.14
Anu. Revo Star. § 16-940 2.7. 11, 29. 30
Agi. Revo Svar. § 16-940) A) 8B) 17
Aki. REVO STAT. § 16-952 17
Ariz. Rev. Star. § 16-9482. A)-(C) Re
Nl
TABLE OF AUTHORITIES (Continued
Anriy) Rev Star. § 16 954(F)
Ani Rev Srav. § 16-961
CONN. GEN STAT. $$ TOO to B7TH9 POON)
FLA Srar. $$ 106 30-106 86 (2009)
Mass. GEN. Laws ANN. cho 55C, $$ 1-12 (D010)
Mr. Rev. Srar. ANN. tit. 2L-A, $$ 1121-1128
(2009)
~
N.C) GEN. Star $$ 163-278 61 to 163-278 To
(LOTO)
NM. Srar. $$ 1-19A-1 to 1 IMA-17 (2OTO)
RL. Gen. Laws $8 17-25-1 to 17-25-80 VOTO)
Wis. Star ANN. $$ LL SOLE S22 (2010)
2007 New Jersey Fair and Clean Elections
Pilot Project Act, Pub Lo No 2007. ¢. 60
(DOOT )
Ornek AUTHORITIES
Adam Doster, Public Financing on the Hor:
ron’, Progress Hlinos, July 23, 2010, http
www progressillinors com quick hits content
201008 23 pubhe-finaneing- horizon
Richard Epstein, The Supreme Court, 19s7
Term Forvword: Uneonstitutional Cond:
fions, State Power, and the Limits of Consent.
102 Hav TL Rev 4, 6-8, 738-102-1488)
Is
Is
> dees
TABLE OF AUTHORITIES — Continued
Page
National Conterence of State Legnslatures, http:
wwwoneslorg default aspx’ Tabld=20454 (last
visited Aug. 12, 2010) , is
Understanding Connecticut Campayn Finance
Laws: A Guide tor 2008S General Assembly
Candidates Participating ain the Citizens’
Election Program, at 2 (2008), available at
hitp. wwwect gov seec hh sees publications cep
wuide june ZOOS final auto pdt (last visited
August 12, 2010) : 30
Wis. Right to Life Political Action Comin
Bronnan, No OS-ey-7Ot-vis, VOTO WE a8sso9,
YOLO US. Dist. LENIS 22868 WD Wis) Mar
11, 2010) 25
PETITION FOR WRIT OF CERTIORARI
John MeComish, Nanev MeLain and Tony Bouie
respectfully petition for a writ of certiorar: to review
the judgment of the US) Court of Appeals for the
Ninth Crreuit
OPINIONS BELOW
The merits decision of the court of appeals was
orginally reported at 605 F8d 720. The orynnal
decision, however, was subsequently amended to
include a revised footnote 1, which corrected factual
misstatements concerning former Arizona Governor
John Fife Svmingten The amended merits decision is
not oMfeially reported, but ois available at YOLO WL
YaYS28SS and LOW US App LENIS 180382. and 1s
reproduced in the Appendix at 2-45) The decision of
the LoS) Dastmet Court for the District of Arizona is
not offferally reported, but is avanlable at 2OlO WI
LVI9L2218 and 2010 US. Dist) LENIS 4982, and is
reproduced in the Appendix at 47-80
o——,
JURISDICTION
Phe jpudgment of the court of appeals was entered
on May 21, 2010 (the amended merits deeision did not
result in the issuance of an amended judgment) Pet
App 1 This petition has been filed within 90 davs of
May 21, 2010) Accordingly, the Court's purisdictiote is
invoked under VS USC S oad)
~——_- @ —__—_——__-- ~
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
This case involves the First and Fourteenth
Amendments to the United States Constitution, 42
USC. §$ 1983, as well as Aniv Revo Star CARS”)
S$ 16-940 through 16 961 (full statements of each of
these constitutional and statutory provisions are
reproduced in the Appendix at 134-81)
The First Amendment to the United States
Constitution provides
Congress shall make no law respecting an establish
ment oof relygen, or prohibiting the free exercise
thereof; or abmdging the freedom of speech
ARS ¥§ 16-240 provides
Findings and declarations
A The people of Arizona declare our intent to
create a clean elections system that wall umprove the
iIntegmity of Anzona state government by dimiumshing
the influence of special-interest money, will encourage
ciiven partiopation in the political process, and will
promote freedom of speech under the US) and Arizo
na Constitutions. Campaigns will become more issue
omented and less negative because there wall be no
need to challenge the sources of campaurn moneys
B The people of Arvona find that our current
clection- financing system
1 Allews Anvona elected offlerals to accept
large campaign contmbutions from private interests
over Which they have governmental jurisdiction,
»)
2 Gives incumbents an unhealthy advantage
over challengers,
3. Hinders communication to voters by many
qualified candidates,
4. Effectively suppresses the voices and intlu-
ence of the vast majority of Anvona citizens in tavor
ofa small number of wealthy special interests,
S&S Undermines public contidence in the integr:
tv of pubhe officials,
G Costs average taxpavers millions of dollars in
the form of subsidies and special privileges for cam
paurn contributors,
7 Drives up the cost of running for state office,
discouraging otherwise qualified candidates who lack
personal wealth or access to speciualainterest funding,
and
S Requires that) elected officials spend too
much of their time raising funds rather than repre
senting the pubhe
ARS §$ 16-952 provides
Equal funding of candidates
A. Whenever during a primary election period a
report as filed, or other information comes to the
attention of the commission, indicating that a non.
participating candidate who is not unopposed in that
primary has made expenditures during the election
evele to date exceeding the oruanal primary election
spending limit. including any previous adjustments,
the commission shall immediately pay from the fund
to the campaign account of any participating cand.
date in the same party primary as the nonparticipat
ing candidate an amount equal to anv excess of the
reported amount over the primary election spending
limit as previously adjusted, less six per cent for a
nonparticipating candidate's fund raising expenses
and less the amount of early contributions raised for
that participating candidate ter that office as pre.
seribed by section 16-945 The primary. election
spending Limit for all such participating candidates
shall be adjusted by increasing ut by the amount that
the commussien is obhgated to pay to a participating
candidate
Bo Whenever during a general election period a
report has been filed, or other information comes to
the attention of the commission, indicating that the
amount a nonparticipating candidate who is not
unopposed has received in contributions during the
election evele to date less the amount of expenditures
the nonparticipating candidate made through the end
of the primary election period exceeds the orginal
general election spending limit, including any previ
ous adjustments, the commission shall immediately
pay from the fund to the campainrm account of any
participating candidate quahtied for the ballot: and
secking the same office as the nonparticipating
candidate an amount equal to any excess of the
reported difference over the general election spending
limit, as previously adjusted, less six per cent for a
nonparticipating candidate’s fund-ratsing expenses
The general election spending limit for all such
participating candidates shall be adjusted by increas-
ing it by the amount that the commission is obligated
to pay toa participating candidate
C. For the purposes of subsections A and B of
this section, the following expenditures reported
pursuant to this article shall be treated as follows
lL. Independent expenditures against a partie.
pating candidate shall be treated as expenditures of
each opposing candidate, for the purpose of subsee-
tion A of this section, or contributions to each oppos-
ing candidate, for the purpose of subsection B of this
section
2 Independent expenditures in taver of one or
more Nonparticipating opponents of a participating
candidate shall be treated as expenditures of those
nonparticipating candidates, for the purpose of sub-
section A of this section, or contributions to those
nonparticipating candidates, for the purpose of sub-
section B of this section
)
3. Independent expenditures ino favor of a
participating candidate shall be treated, tor every
opposing participating candidate, as though = the
independent expenditures were an expenditure of a
nonparticipating opponent, tor the purpose of subsec-
tion A of this section, or a contmbution to a nonpartic-
ipating opponent, for the purpose of subsection B of
this section
4. Expenditures made during the primary
election period by or on behalf of an independent
candidate or a nonparticipating candidate who is
unopposed in a party primary shall be deducted from
the total amount of momes raised for purposes of
determining the amount of equalizing funds, up to
the amount of primary tunds received by the partict-
pating candidate. Equalizing funds pursuant to
subsection B of this section shall then be calculated
and paid at the start of the general election period.
5. ExpenditureA made before the general elec-
tion pemod that consist of a contract, promise or
agreement to make an expenditure during the gen-
eral election period resulting in an extension of credit
shall be treated as though made during the general
election period, and equalizing funds pursuant to
subsection B of this section shall be paid at the start
of the general election period.
6. Expenditures for or against a participating
candidate promoting or opposing more than one
candidate who ts not running for the same office shall
be allocated by the commission among candidates for
ditferent offices based on the relative size or length
and relative prominence of the reference to candi-
dates for different offices. ...
STATEMENT OF THE CASE
This case seeks to vindicate the constitutional
principles applied in Citizens United v. Federal Elec
tion Comm'n, 180 S.Ct. 876 (2010), and Davis v.
Federal Election Comm'n, 128 8S. Ct. 2759 (2008). At
issue is the matching funds trigger, A.R.S. § 16-
952.A)-(C), of the so-called Anzona Citizens Clean
Elections Act, A.R.S. §$§ 16-940 ef seg. This provision
triggers government money grants that match every
dollar of private campaign contributions or expendi-
tures made in support of a “traditional” candidate
above a “spending limit” with nearly a dollar of
government subsidies to opposing candidates who are
“participating” in Arizona’s government campaign
financing system. See Artz. Rev. Stat. § 16-952; A)-
(C). The United States Court of Appeals for the Ninth
Cireuit defied Citizens United and Davis when it
upheld Arizona's matching funds trigger as imposing
only an insubstantial burden on the exercise of First
Amendment rights, reversing the district court's
permanent injunction on A.R.S. § 16-952, A)-(C).
On June 8, 2010, this Court entered an order
blocking the Ninth Circuit’s decision from taking
effect. Pet. App. 81. The order stayed the mandate
from the decision and lifted the appellate stay on the
8
district court’s permanent injunction on Arizona's
matching funds trigger. It thereby ensured that
matching funds would not be distributed in Arizona
during the pendency of this petition.
Subsequent decisions arising from the Second
and Eleventh Circuits have followed suit, enjoining
Connecticut and Florida’s equivalent matching funds
triggers. Green Party of Conn. v. Garfield, Nos.
09-3760-cev(L), 09-3941-ev(CON), 2010 WL 2737153,
*25-*28, 2010 U.S. App. LEXIS 14286, *77-*86 (2nd
Cir. 2010); Scott v. Roberts, No. 10-1321, 2010 WL
2977614, *10-*14, 2010 U.S. App. LEXIS 15897, *29-
*42 (11th Cir. 2010). This has resulted in a three-to-
four circuit split as to whether matching funds trig-
gers violate the First and Fourteenth Amendments.
Compare td.; Day v. Halloran, 34 F.3d 1356, 1359-60
(8th Cir. 1994); with N.C. Right to Life, Inc. v. Leake,
524 F.3d 427, 438 (4th Cir. 2008); Daggett v. Comm'n
on Gov't Ethics, 205 F.3d 445, 466-72 (1st Cir. 2000);
Gable v. Patton, 142 F.3d 940, 947 (6th Cir. 1998).
I. The Speech Burden of Arizona’s Matching
Funds Trigger.
1. The Ninth Circuit’s decision misstates the
facts when it asserts Petitioners did not identify a
single time when they refrained from making expend-
itures or contributions because of Arizona’s matching
funds trigger. Pet. App. 28-33. In fact, Petitioners
identified numerous specific examples of Arizona’s
matching funds trigger causing them to refrain from
9
making specific expenditures or receiving specific
contributions. Pet. App. 243-50. These were not
isolated occurrences, but rather they represent a
general course of conduct among traditional candi-
dates and their supporters as established by expert
testimony, a peer reviewed academic study, and
voluminous testimony from numerous party and non-
party witnesses. Pet. App. 230-55.
2. Vividly recalling her husband’s exclamation,
“[tJhat’s the craziest thing I’ve ever heard of,” Peti-
tioner Nancy McLain testified that she decided not to
self-finance her campaign during Arizona’s 2004
election cycle after she and her husband discussed
how Arizona’s matching funds trigger would give a
like amount to opposing participating candidates.
Pet. App. 192, 195. Petitioner McLain further testi-
fied that the threat of Arizona’s matching funds
trigger forced her to decide not to raise any more
contributions during the 2008 general election. Pet.
App. 195-97.
3. Petitioner Tony Bouie testified that he “made
a decision to minimize and delay campaign expendi-
tures after seeing the full impact of” triggering
matching funds to his opponents and “decided to wait
until the last possible minute . . . to spend money” on
his campaign. Pet. App. 300, 303, 311. Bouie’s fear of
Arizona’s matching funds trigger is so profound that,
for the 2010 election cycle, he chose to run for an
office in which he did not face competition from a
participating candidate. Pet. App. 296-97.
10
4. Reehng trom ai deluge of hostile speech
financed by his campaign expenditures and inde-
pendent expenditures through Arizena’s matching
funds trigger, MeComish decided not to spend money
on an “auto dialer” campaign marketing program for
fear of triggering matching funds to his opponents.
Pet. App. 247-48, 328-29. Spending $2.500 on the
auto-dialer program would have triggered matching
funds in the aggregate amount of nearly $7,500 to
MeComish’s participating opponents. Pet. App. 248.
). Petitioners are not alone in finding their
exereise of First Amendment rights penalized and
chilled. Expert witness Dr. Marcus Osborn reviewed
all of the evidence in the record and found that
“If first time candidates, veteran candidates, sophisti-
cated independent expenditure committees and even
a member of the Clean Elections Commission all
confirmed in their interviews or testimony that the
matching funds component of the Clean Elections’
Act created a drag or ‘chilling effect’ on their cam-
paign fundraising and expenditures that tended to
restrict and delay campaign fundraising and spend-
ing.” Pet. App. 231. As explained by Dr. Osborn, this
chilling effect amses because the “matching funds
component impose[s] a significant ‘cost. or competi-
tive disadvantage, on traditional candidates with
respect to raising and spending money that would not
exist ina world without matehing funds.” Pet. App.
258.
6. Consistent with Petitioners’ testimony and
Dr. Osborn’s expert opinion, average per capita
11
expenditures ino Arizona by traditional legislative
candidates of major parties declined 6° in real terms
between 1998 and 2006. Pet. App. 290. And per capita
growth of independent expenditure spending in
Arnvona has lagged per capita growth of PAC spend.
Ing nationally by af Jeast 33° between 1998 and
2006. Pet. App. 285-86.
ll. The Windfall Effect of Arizona's Matching
Funds Trigger
tL.) Arizona’s matching funds trigger is a compo-
nent of the Arizena Citizens Clean Elections Act,
ALRUS. $$ 16-940 ef seg., which is expressly premised
on the goal of equalizing resources and disproportion:
ate influence among competing candidates and inter-
est) groups. However, despite its) resource and
influence equahzing purpose, Arivona’s matching
tunds trigger typically generates a windfall of cam
paign resources for participating candidates
2 For example, because Petitioner MeComish
faced three participating opponents in the 2OOS
Anzona primary, every dollar he spent above his
“spending limit” triggered nearly three dollars to be
spent against his candidacy. Pet. App. 247-49. As a
result, Petitioner MeComish watched his three partic-
Ipating opponents collectively receive S140 227.98 in
publie finaneing, which included $82,081.98 in match-
ing funds triggered by campaign expenditures made
by MeComish and independent expenditure commit-
tees above a2 appleable $19,882.00 “spending hmit.”
Pet. App. 32
IZ
3. The same windfall effect for opposing partier
pating candidates arises trom matching funds trig:
gered by independent expenditures. For example, the
Arizona Realtors Association made an independent
expenditure mn the amount of $6,500 ostensibly to
support Petitioner MeConush, which triguered $18 830
in the aggsregate to his three competing participating
opponents. Pet. App. 327-28.
4. As a result of these and other windfall ef-
fects, during Amvona’s 2006 legislative election evele,
participating candidates, on average, received and
spent: a) nearly $5,000 more (nearly 30° more) than
traditional candidates during the primary election:
and b) nearly $12,000 more (nearly 136° more) than
traditional candidates during the general election
Pet. App. 291
o. For traditional candidates and their support
ers, the windfall effeet of Anvona’s matching funds
trigger generates the tear that the government will
finance overwhelming amounts of hostile speech
against them if they exercise their First Amendment
rights. Pet App 247-49, 326-29
Ill. The Disconnect between Anticorruption
Purposes and Arizona’s Matching Funds
Trigger.
1. Dr Osborn has opined that) Arona has
already established adequate regulations to prevent
the appearance and actuahty of corruption from
_ --
private contributions Pet. App. 109, 255-75. Arizona's
13
matching funds trigger does nothing that could further
enhance the prevention of actual or apparent corrup-
tion im Arnvona’s electoral system. Pet. App. 264
2 In fact, candidates, individuals and interest
groups manipulate Arizona’s matching funds trigger
to generate the functional equivalent: of unlimited
and undisclosed private contmbutions to participating
candidates. Pet. App. 270-75. Anmzona’s) matching
funds trigger thereby replicates and augments what
ever actual or apparent corruption may be associ
ated with completely unregulated private campaign
financing. Pet App 27
3. For example, wealthy individuals can bypass
contmbution limits and disclosure requirements by
running: as self financed candidates in the same race
as one or more favored participating: candidates in
order to trigger matching funds to those participating
candidates. Pet. App. 271-72. Sam George's self
financed traditional candidacy tor Arnivona Corpora
tion Commussioner, which triggered nearly a millon
dollars to participating candidates, with whom he
coordinated campayrn strategy, clearly had this
appearance. Pet. App. 200, 202-05, 211-12, 214-19,
“1S > > a ee)
~~ s ~~
4. Samilarly, individuals and special interests
ean directly fund traditional candidates with the ex
pectation that, by doing so, they will trigger matching
funds to favered) participating candidatecs), by
passing contribution limits and disclosure regulations
Pet App. 2Fl-?72. Corporation Commussioner Paul
14
Newman testified that this is what the energy indus
try appeared to do during the 2008 election evele
when he heard that Republheans were running a
“team” of traditional and participating candidates for
Corporation Commission. Pet) App 200 O02, 205-08
IV. The Proceedings Below.
lL. Based on federal question yurmsdiction, Four,
teenth Amendment incorporation dectrine and 42
USC. $1988, the distrnet court) previously ruled
three times that Arvona’s matching tunds triger
provision Violates the First Amendment under Jars
Pet. App. 67-72, 101-15, 124-29. Although the district
court initially refrained from issuing preliminary
munctive rehef due to ongorng elections, the court's
rulings were ultimately finahzved in the permanent
iunection entered by the distmet court on danuary
20, 2O1O, which barred enforcement of Arizona's
matching funds trigger, Pet. App. SOQ) But in a bare
decision entered on Februarv 1, 2010, the Ninth
Circuits motions panel staved enforcement of the
district court's permanent iunction pending unspec:
ified action by the merits panel Pet App 84-85
2. Crreuit Judge Bea dissented trom the bare
stay decision with a detailed explanation spanning
tive pages emphasizing that Arivona’s matching funds
triggers clearly violated the principles enforced in
Citizens United and Davis Pet App 86-87. Neverthe
less, the Ninth Cireuit’s merits decision liter reversed
the distret courts permanent ingunection on Arizona's
1S
matching funds trigger Pet. App 39) This petition
seeks review of that deeisien
REASONS FOR GRANTING THE PETITION
The Court should grant this petition for three
reasons: 1) as was implicitly recognized by the Court
in its dune S, 2OLO decision to restore the district
court's ingunection on Anvona’s matching funds triz
ger, this case presents issues of great nationwide
importance and the Ninth Crreumt’s decision contra
dicts recent decisions of this Court, 2) there is a clear
and irreconcilable split among the cireuits on these
Issues, requiring reselution by this Court; and 3) the
principles entorced by the Courtoin Cificens United
and Davis provide a perfect framework for harmony
ings the split between the cireuits
l. Vhis case presents issues of great nation-
wide importance and the Ninth Circuit's
decision contradicts recent decisions of
this Court.
The Ninth Cireunt’ Court of Appeals has refused
to recognize that the government may not single out,
punish and deter the exercise of First Amendment
nghts by causing the campaign financing efforts of
traditional candidates and their supporters to pro
duce fundraising advantages for their political oppo
nents. The Ninth Crreuit has thereby defied the core
lo
constitutional principles apphed ino Cifreens United
and Deacis
Specifically, in Davis, the Court embraced Pacific
Gas & Elee Co. vt. Public Util. Comin of Cal, ATS
US. 1, 14 (1986), and held that the government
violates the First Amendment when it devises a
regulatory scheme that punishes and deters the
exercise of First Amendment rights. Dacrs, LSS Ct
at 2772. The Court further held that campaign fi.
nance regulations cannot be rigged to equalize finan
cial resources by triggering competitive disadvan.
tages that will create a “drag” on the robust exercise
of First Amendment miahts. Jd And in Crfizens Unt
ed, the Court reaffirmed and reiterated Davis’ disap:
proval of resource equahzation among candidates as a
Justification for campaign finanee regulations by
underseormg that the government may not devise
campanum reyrulatory schemes that prohibit or burden
free speech by disfavored groups to “balance” dispro
portionate resources or influence Cificens United,
180 S Ct at 905-100 The Court emphasized, however,
that this was not really a new rule of law, but rather
was one that traced at least as far back as Buckley :
Valeo, 424 U.S. 1, 48 (1976), which rejected “the
premise that the Government has an interest ‘in
equahzing the relative ability of individuals and
groups to influence the outcome of electrons” Cr:
cens United, 1308. Ct at 904
Contrary to Crfrcens United and Davis, Arizona
matching funds trigger is expressly premused on the
goal of equahving resources and disproportionate
ly
Influence among competing candidates and interest
groups See Akiy) Rev STAT. $$ 16-840 Ae BE 16 852
“Equal funding of candidates”) Contrary to Dace
Anvona’s matching funds trigger ensures the robust
exercise of First Amendment rights will trigger
competitive disadvantages for traditional candidates
and their supporters, including independent expendi
ture committees Pet App 67-68, 105-06, 128-29, 234.
35, 242-54. And contrary to Dacrs’ embrace of Pacisn
Gas & Flee Co. by tying pubhe funding to an oppo
nent’s exercise of First Amendment ryshts, Arizona's
matching tunds truger effectively forces traditional
candidates and their) supporters to disseminate
hostile speech by opposing participating candidates
Pet. App. 105.06. Taken together, the Ninth Cireuit’s
merits decision clearly defies Cificens Unifed and
Davis Such deflance has nationwide importance
because its effects cannot be confined to the Ninth
Cireuit, much less Arizona
Anzona ts not alone in rigging its electoral svs
tem to truer government subsidies to participating
candidates based on the exercise of First Amendment
rights by traditional candidates and their supporters
Although labeled differently, similar trigger provi
sions exist (or have existed) ino pubhe financing
schemes throughout the United States, including in
Connecticut, Flomda, Maine, Massachusetts, New
Jersey, New Menico, North Carolina, Rhode Island,
and Wisconsin) See CONN GEN. Star. $$ 9-700) to
WM TAM LOOM) Fra Srave S$ L068 80-106 86 (Loe).
Mr Revo Srar ANN tit) 2LA, $$ 1121-1128 (2009),
IS
Mass. GEN. Laws ANN. ch. S5SC, S$ 1-12 (2010):
The 2007 New Jersey Fair and Clean Elections
Pilot _— Act, Pub lL) No 2007, ¢& 60 (2007), NM
STAT. $$ L-1TMA-1T to T-T9A-17 (2010), NLC) GEN. Star
ss IBGI-LTS GL to 13-278 70 ~LOLO RTE Grex Laws
$$ 17- 25. L to 17-25-30 (2010), Wis) Star ANN. $$ 1150
L1L.522 (West 2010) And while Caltornia recently re-
yected a ballot proposal to establish a similar scheme,
campaign finance regulation advocates in THhinois are
reportedly promoting a version of the matching funds
trigger. Compare National Conterence of State Legas
latures, http. wwwoneslorg default aspx Tabld=20454
last visited Aug. 12, 2010), erth Adam Doster, Pu dln
Frnanecrng on the Horizon’, Progress Hlmots, July 258,
2010, http. www progressillinors com quick-hits content
2OLO OF 23 pubhe-finanecing- horizon
It the Ninth Cireuit’s deflance were allowed to
stand, nationwide contusion over the constitutronalits
of matching funds triggers would spread and rein
supreme. Fortunately, on dune 8, 2010, this Court
took a strong step towards establishing uniformity in
the law by blocking the distmbutieon of matching
funds to parteipating candidates ino Anzona. Pet
App SL. By vacating the stay imposed by the Ninth
Cireunt on the distmet court's decision to enjoin Arizo
nas matching funds trigger, the Court implicitly
ruled that the Ninth Ciremt was “demonstrably
wrong” to allow the disbursement of matching funds
to government-subsidized candidates during Arizona's
2010 election evele. Quoting Wo Arrlimes. Imo Intl
Brotherhood of Teamsters, ASO US. 1801, 1305 (1987)
19
‘OYConner, J. in chambers) And by staying the
issuance of the mandate from the Ninth Circuit's
ments decision cafler requesting Petitioners to repre-
sent that they would timely tile this petition — see
Pet. App. S82), the Court imphicitly contirmed that 1
was lkely to grant certioran. Rostker o. Goldberg,
448 US. 1306, 1808 (1980) (Brennan, J. in cham-
bers) (observing grant of stay requires “a ‘reasonable
probability’ that four Justices will consider the issue
sufficiently meritorious to grant cerliorar: or to note
probable jurisdiction”) The Court thereby signaled
strong support for both granting this petition and
establishing a uniform rule tor the treatment. of
matching funds tmggers. This) petition should be
granted because, as discussed below, the need for the
Court to provide such guidance has only grown since
June 8S, 2010
Il. There is a clear and irreconcilable split
among the circuits on the issues implicat-
ed by this case, requiring resolution by
this Court.
Citing this Court's June 8, 2010 order, the Second
Circuit reyected the Ninth Circuit's analysis as “un-
persuasive.” Green Party of Conn, 2010 WL 2737153,
at *27 n- 19, 2010 US. App. LEXIS 14286, at *S3 n.19
The Eleventh Cireuit hkewise retused to follow the
Ninth Cireunt or the decisions of the First and Fourth
Cireuits, which upheld matching funds triggers prior
to this Court’s rulings in Decors and Citizens United
Scott, 2010 WL 2977614, at *10-"12, 2010 US. App
20
LEXIS 15897, at *29-*34. Instead, the Second and
Eleventh Circuits have enjoined Connecticut and
Florida’s versions of Arizona’s matching funds trigger.
In so doing, they have sided with the prescient Eighth
Cireuit decision of Day, 34 F.3d at 1359-60, which was
cited approvingly in Dacrs for striking down Minneso-
ta’s matching funds trigger. 128 8S. Ct. at 2272.
As a result, a stand-off exists between and among
a majority of the circuit courts that are responsible
for reviewing constitutional challenges to state law.
Specifically, three circuits have struck down matching
funds triggers and four circuits have upheld them,
with the post-Dacrs majority rule being that match-
ing funds triggers are unconstitutional. But the split
between the circuits goes much deeper than the
outcomes of their decisions. As discussed below, the
circuits clash on every level of constitutional analysis
impheated by matching funds triggers.
A. The circuits clash on the speech bur-
den of matching funds triggers.
The Second, Eighth and Eleventh Circuits hold
that matching funds triggers impose a substantial
burden that punishes and deters the exercise of First
Amendment rights by effectively coercing individuals
and groups to finance hostile speech by participating
candidates. Scott, 2010 WL 2977614, at *10-*12, 2010
US. App. LEXIS 15897, at *29-*34; Green Party of
Conn, 2010 WL 27387158, at *26-*28, 2010 ULS. App.
21
LEXIS 14286, at *80-*86; Day, 34 F.3d at 1359-60.
Both the Second and Eleventh Circuits emphasize
that matching funds triggers are “harsher than the
penalty in Davis,” as they leave “no doubt” that the
participating opponents of traditional candidates
“will receive additional money.” Scott, 2010 WL
2977614, at *12, 2010 U.S. App. LEXIS 15897, at *33
(citing Green Party of Conn., 2010 WL 2737153, at
*26, 2010 U.S. App. LEXIS 14286, at *82). The
Fighth Circuit further holds that matching funds
triggers amount to content-based speech regulations
because they are triggered only by campaign expendi-
tures and contributions that communicate support for
traditional candidates or opposition for participating
candidates. Day, 34 F.3d at 1360-61.
The Ninth Circuit rejects this analysis, contend-
ing that the burden imposed by matching funds
triggers is merely an insubstantial “strategic” choice.
Pet. App. 28-35. The First and Fourth Circuits appear
to have declared that matching funds triggers impose
no burden on First Amendment rights. Daggett, 205
F.3d at 464 (holding matching funds trigger did “not
create a burden on speakers’ First Amendment
rights”); Leake, 524 F.3d at 437 (holding “|wle con-
clude that the state’s provision of matching funds
does not burden the First Amendment rights of non-
participating candidates ... or independent entities
that seek to make expenditures on behalf of
nonparticipating candidates”). And the Sixth Circuit
simply sidesteps the issue, declaring bluntly that it
22
would “not second guess the Kentucky legislature by
applying a ‘scalpel.’” Gable, 142 F.3d at 947-49.
B. The circuits clash on the level of scru-
tiny applicable to matching funds
triggers.
The dispute over the burden imposed by match-
ing funds triggers has led to a split between the
circuits as to the level of scrutiny to apply and
whether matching funds triggers survive any level of
scrutiny. The Second, Eighth and Eleventh Circuits
each applied strict scrutiny and each struck down
matching funds triggers for not advancing anticor-
ruption purposes in a narrowly-tailored manner.
Scott, 2010 WL 2977614, at *10-*12, 2010 U.S. App.
LEXIS 15897, at *29-*34; Green Party of Conn., 2010
WL 2737153, at *26-*28, 2010 U.S. App. LEXIS
14286, at *80-*86; Day, 34 F.3d at 1359-62. The
Eighth Circuit even went so far as to declare that
“[tJhe statute’s burden on First Amendment rights
does not satisfy strict, intermediate, or even the most
cursory scrutiny.” Day, 34 F.3d at 1362.
By contrast, the First, Fourth and Sixth Circuits
simply upheld Kentucky, Maine and North Carolina’s
matching funds triggers without clearly articulating
any level of scrutiny. Daggett, 205 F.3d at 464; Leake,
524 F.3d at 437; Gable, 142 F.3d at 947-49. The Ninth
Circuit, however, preferred to apply intermediate
scrutiny, holding that Arizona’s matching funds
trigger is sufficiently well-tailored to important
23
governmental interests because it encourages partici-
pation in public campaign financing. Pet. App. 34-38.
C. The circuits clash as to whether pro-
moting participation in public financ-
ing serves anticorruption purposes.
The adoption of differing levels of scrutiny (or
none at all), however, has not avoided clashes be-
tween the circuits on discrete issues related to the
level of scrutiny. Significantly, the rulings of the
Second, Eighth and Eleventh Circuits clash with the
assertion of the Ninth Circuit that the encourage-
ment of participation in public campaign financing
advances anticorruption purposes. Compare Scott,
2010 WL 2977614, at *10-*12, 2010 U.S. App. LEXIS
15897, at *29-*34; Green Party of Conn., 2010 WL
2737153, at *26-*28, 2010 U.S. App. LEXIS 14286, at
*80-*86; Day, 34 F.3d at 1359-62, with Pet. App. 34-38.
In particular, contrary to the Ninth Circuit, the
Eleventh Circuit has ruled that matching funds
triggers are primarily aimed at equalizing resources
and influence among candidates and interest. Com-
pare Pet. App. 11-12 with Scott, 2010 WL 2977614, at
*13, 2010 U.S. App. LEXIS 15897, at *37 (observing
“[a]t bottom, the Florida public campaign financing
system appears primarily to advantage candidates
with little money or who exercise restraint in fund-
raising ... the system levels the electoral playing
field, and that purpose is constitutionally problemat-
ic”). The Eleventh Circuit also rejects the Ninth
24
Circuit's apparent notion that promoting participa-
tion in public campaign financing necessarily serves
anticorruption purposes when private campaign
financing is already stringently regulated. Scoff, 2010
WL 2977614, at *13-*14, 2010 U.S. App. LEXIS
15897, at *37-*40 (As we have explained, in Florida,
every candidate for public office, whether participat-
ing or not, is subject to a $500 limit on campaign
contributions.... And when contributions are so
limited, the Supreme Court has told us that a limit on
general campaign expenditures does not serve the
anticorruption interest... . Florida, in the light of the
election laws it has adopted, cannot impose a ‘special
and potentially significant burden, ... on the First
Amendment rights of nonparticipating candidates
who do not wish, for whatever reason, to accept public
money and its attendant limitations on the theory
that its public financing system reduces actual or
apparent corruption”) (citations omitted). Finally, the
Eleventh Circuit clashes with the Ninth Circuit as to
the existence of less-restrictive alternatives to the
matching funds trigger. Cornpare Pet. App. 37-38 with
Scott, 2010 WL 2977614, at *13-*14, 2010 U.S. App.
LEXIS 15897, at *39-*41 (Florida could encourage
participation to virtually the same degree that it
maintains it currently does by doing no more than
releasing participating candidates from the expend-
ture ceiling.”).
D. There is a substantial risk that the
circuit split will widen.
The stand-off between and among the First,
Second, Fourth, Sixth, Eighth, Ninth and Eleventh
Circuits is not likely to remain a detente. In an
ongoing challenge to the matching funds trigger
codified in Wisconsin law, the Seventh Cireuit will
soon be forced to choose which line of cases to follow
See Wis. Right to Life Political Action Comm. v
Brennan, No. O9-ev-764-vis, 2010 WL 933809, *1-*2,
2010 US. Dist. LEXIS 22863, *1-*4. WUD. Wis. Mar
11, 2010). Although the post-Crfizens United and
Davis majority rule is that matching funds triggers
are unconstitutional, the depth of the jurtsprudential
dispute between the circuits is so great that there is a
substantial risk that the cireuit spht will widen,
‘father than heal, over time. The Ninth Circuit's
defiance of Citizens United and Davis shows that the
lome of existing Supreme Court precedent will not
alone persuasively harmonize the circuits.
E. This petition must be granted to avoid
growing confusion over First Amend-
ment jurisprudence.
Under these circumstances, especially after the
entry of this Court's June 8, 2010 order, denying the
instant petition would only engender more confusion
among the cireuits as to the constitutionality. of
matching funds trigger provisions. And this confusion
will inevitably infect other critically important areas
of constitutional law.
6
For example, the Ninth Circuit has asserted that
the burden imposed on traditional candidates and
their supporters by Anvona’s matching funds trgyer
is insubstantial because it only requires a “strategie”
choice to be made. Pet. App. 28-35. Concededly, Ari-
zona’s matching funds trigger does present a choice to
traditional candidates and their supporters — either
stop raising and spendings money to project) your
political message to the public or do so and finance
your opponent's dissemination of hostile speech
against vou. But labeling such decisions “strategie.”
does not alter the fact that, for candidates competing
in the hurly-burly of electoral politics, the choice
presented by the matching funds trigger is often no
different than “vour money or vour (political) hte”
Pet. App. 230-54. Settled law stands against the
government imposing, through the threat of matching
funds, a burden on decision processes concerning the
exereise of core free speech rights that should be left
free and uninhibited under the First Amendment
It as well-established that “(wihat the First
Amendment precludes the government from) com-
manding directly, it also precludes the government
from accomplishing indirectly” Rutan oo Repudidican
Party of Ilinots, 497 US.) 62, 78 (199A), see alse
Crosjean vo American Press Co, 297 US. 2338, 249-50
(1836) (lthhe evils to be prevented [by the First
Amendment] were not the censorship of the press
merely, but any action of the government by means of
which it might prevent such free and general discus-
ston of public matters as seems absolutely essential to
prepare the people for an intelligent exercise of their
nghts as ciuizens”) (ettations omitted) One corollary
of this principle is the doctrine of unconstitutional
conditions, which generally prohibits the government
trom foreing individuals to choose between exercising
their First Amendment rights and receiving govern-
ment benefits. Sperser vo Randall, 8357 US. 513, Sis.
19, 526 (1958) (holding First Amendment bars condi
tioning of tax exemption on showing that taxpaver
had not engaged in subversive advocacy, observing to
hold otherwise would allow the government to “pro-
duce a result which [it] could not command directly”),
See also BF lrod w Burns, 427 U Ss 347. Ser (1976)
‘holding “(tlhe demial of a pubhe benefit may not be
used by the government for the purpose of creating an
incentive enabhng it to achieve what it may not
command directly”); see generaliy Richard Epstein,
The Supreme Court, 1987 Term — Foreword: Unconst
fuftronal Conditions, State Poweer, and the Lamiuts of
Consent, 102 Harv. Lo Revo 4. 6-8, 73-102 (198s)
Another corollary is that “constitutional violations
mav arise from the deterrent, or ‘chilling, effect. of
governmental regulations that tall short of a direct
prohibition against the exercise of First Amendment
nghts.” Laird v. Tatum, 408 US. 1, 11 (1972); see also
Ba. of County Commirs vo Umbehr, S18 US. 608, 674
7S (1996).
The “strateme” choice presented to traditional
candidates and their supporters by Arizona’s matching
funds trigger is not less burdensome than the bur
dens these settled constitutional doctrines generally
prohibit the government from imposing on the choices
of individuals and groups. See, ea, Rutan, 497 US
28
at 76 (observing, despite the choice te seek public
emplovment, “the First Amendment protects state
emplovees not only from patronage dismissals but
also from ‘even an act of retaliation as ftrivral as
faring to hold a birthday party tor a pubhe emplovee
when intended to punish her for exercising her
free speech mghts’”) (citation omitted) (emphasis
added). Consequently, the Ninth Cireuit’s declaration
that Anzona’s matching funds trigger imposes only
an “insubstantial” burden on the exercise of First
Amendment mghts, and the First and Fourth Cir.
cuits assertion that no burden is rmposed, threaten to
create confusion that could undermine the appheation
of well-settled First Amendment jumsprudence
Compare Pet. App. 28-35 with Daggett, 205 F.3d at
464; Leake, 524 F Sd at 437) As the ultimate guardian
of un:formity in constitutional law, Che Court should
grant this petition to heal the breach between the
circuits before thos can happen Fortunately, as
discussed below, the Court need not remnvent the
wheel to harmonize First Amendment jurisprudence
it needs only to enforce the principles apphed in
Crftteens United and Davis
lll. The principles enforced by the Court in
Citizens United and Davis provide a clear
framework for harmonizing the split be-
tween the circuits on the constitutionali-
tv of matching funds triggers.
The Court can bring harmony to the circuits on
the question of the constitutionality. of matching
funds trmagers bv enforeing Cifisens United and
”)
Davis) Matehing tunds triyzgers clearly run atoul of
Cruicens United’s requirement that campaign finance
regulations prevent actual or apparent qurd pro que
corruption, rather than) leveling disproportionate
resources and influence among candidates and inter
est groups. 130 S.Ct. at 909-11. Moreover, as dis
cussed below, the Ninth Cireuit’s merits decision is an
outher that uniquely impedes lower courts from
lamecally applying Dacrs to harmonize the spht among
the cireuits on the constitubenalty of matching
funds. Therefore, while enforcing Crficens United and
Davis can unity First Amendment jurisprudence on
the constitutionality of matching funds triggers, the
Court must first grant this petition
A. Citizens United's prohibition on influ-
ence and resource leveling campaign
finance regulations provides a clear
framework for harmonizing the split
between the circuits.
Under Citizens United, the Supreme Court
unequivocally declared that the purpose of diminish,
ing or leveling the disproportionate resources and
influence of certain factions cannot justifv. campaign
finance regulavion 130 S.Ct. at 909-11. In direct
opposition to Crficens United's holding, the Arona
Citizens Clean Elections Act unequivocally aims at
“dimimshing the influence of special interest money,”
protecting “the voices and influence of the vast major
ity of Amemean citizens.” and encouraging qualified
candidates to run for office “who lack personal wealth
30)
or access to special-interest funding 7 Anivo Revo Srar
$16 940) State agencies entoremng similar statutory
schemes throughout the United States also freely
admit the influence and resource leveling purpose of
matching funds triggers See. eg . Understanding
Connecticut Campaign Finance Laws: A Guide for
2008 General Assembly Candidates Participating in
the Citivens’ Election Program, at 2 (2008), available
at http. www ct gov seee hh sees publications cep yruide
yune 2008 final auto.pdt last visited August 12,
2010) The resource and influence leveling purpose of
matching funds tmagers is further evidenced by
Respondents’ admissions following this Court's June
S, 2010 order
After the issuance of this Court's June 8, 2O1O
order blocking: the issuance of matching funds, no
member of the Arvzona Citizens Clean Elections
Comnmussion articulated any concern about anticor
ruption purposes being frustrated by enjorning Arizo
nas matching funds trigger Pet. App. IS2-S9
Instead, the Commissioners discussed how the dect-
sion Was “unfair” to candidates because it prevented
the Clean Elections Act from “leveling the playing
field.” which it was “designed to do.” Pet. App. 186-87
Moreover, the drafter of the Clean Eleetions Act.
Respondent Clean) Elections Commissioner Louis
Hoffman, admitted that Arivona’s matching funds
trigger was designed to give participating candidates
access to private confriéutions m the event there were
insufficient publhie funds to finance their campaigns
Pet App 183-84 creferring to Aniy) Revo Srar. §$ 16
edi bY)
As the foregoing facts illustrate, matching funds
triggers are plainly meant to equalize resources and
influence among candidates and interest groups In
particular, when push comes to shove, Arizona’s
matching funds trigger os desiuzmed to elevate its
resouree and influence leveling purposes above any
purported purpose associated with shielding partie:
pating candidates from the influence of private con
tributions. Accordingly, by entoreing Crficens United's
requirement that campaign finance regulations serve
genuine anticorruption purposes, this court) could
immediately bring harmony to First: Amendment
jurisprudence.
(M course, the Ninth Circuit contends that the resource
and anfluence leveling: purpose of matching: funds trogcers
encourages the participation of candidates an publre financiuy
schemes, which, in turn, purportedly prevents actual or appar
emt quad pro guo ecerruption Pet App 34-38) But this cham
essentially concedes that matching funds triggers amount te
“prophy laxis-upon- prophylaxis.” which cannot wathstand stmet
scrutiny under Federal Blection Comin 'n co Wisconsin Right to
Life, SAL US) 449. 479 (2007) ven if intermediate scrutiny
were appheable to matching funds trygers, as held by the Ninth
Circuit, encouragnng participation in publr financing schemes
does not ipso facto serve anticorruptien purposes as required by
Citizens United Papert witness Dr Marcus Osborn and the
Fleventh Circuit have both emphasized that promoting partic:
pation in puble financing dees not advance any antioorruption
purpose when pnvate campayrn financing is already stringently
regulated, such as in Arivena and Florida Cor:panw Pet App
255-74 wrth Scott, 2010 WEL 2e7 G14, at *14-*14, 2010 US App
LENIS 15807, at "37." 40
to
B. Davis also provides a framework for
harmonizing the split between the cir-
cuits by isolating the Ninth Circuit as
an outlier.
Davis also provides a powerful tramework tor
harmonizing the spht between the cireuits on the
constitutionahty of matching funds tnggers. In Davis,
the Court struck down the “Milhonaire’s Amendment”
a federal campaign finance regulation that: trig
gered elevated contribution limits for one candidate
when an opposing self-financed candidate contributed
or spent his own money above a certain threshold. In
striking down the Millhionaire’s Amendment, Dacrs
directly rehed upon Day, 34 F3d 1356, 1359-60,
which struck down Moinnesota’s matching tunds
trigger. Davis, 128 S.Ct. at 2772. Davis’ reference to
Day was not a random space-filling citation The
Court clearly regarded the fates of contmbution limit
triggers and matching funds triggers to be linked
Dacis’ acceptance of this premise holds the key to
harmonizing First Amendment jurisprudence among
the circuits.
1. By tying the fate of contribution
limit triggers to matching funds
triggers, Davis makes it possible to
harmonize the First, Second, Fourth,
Sixth, Eighth and Eleventh Circuits.
The First, Fourth and Sixth Cireuit cases that
upheld matching funds triggers prior to Dacis were
each premised on the constitutionality of contribution
hmit tmggers. This is evidenced by the tact that the
Fourth Cireuit case of Leake, 524 F 3d at 437, which
upheld North Carolina’s matching funds trigger.
directly relied upon the First and Sixth Circuit cases
of Daggett and Gable to reach its holding. Daggett
and Gad/e, in turn, directly rehed upon Wilkinson v
Jones, S76 F.Supp. 916, 927-28 (WD. Ky. 1995),
which upheld contnmbution limit triggers. Daggett, 205
FE 3d at 469; Gable, 142 F.3d at 947 n.7.
By striking down contribution limit) triggers,
Dacts necessarily overruled Wilkinson. Because Davis
overrules the case upon which the First, Fourth and
Sixth Cireuits base their affirmation of matching
funds triggers, a logical appheation of Dacrs’ holding
could naturally heal their spht with the Second,
KMighth and Eleventh Circuits. Simply put, by overrul-
ing Wilkinson, Davis impheitly overruled Daggett and
Gable by undercutting their rehance upon Wilkinson.
And by implicitly overruling Deggett and Gable,
Davis also impheitly overruled the Fourth Cireuit
Case of Leake. Davis thus furnishes a powerful prece-
dential framework for harmonizing First Amendment
jurisprudence concerning matching funds triggers
among the First, Second, Fourth, Sixth, Eighth, and
Eleventh Cireuits. Unfortunately, the Ninth Circuit
has disrupted the harmonious development of the Law
under Darrs.
34
2. This petition should be granted be-
cause the Ninth Circuit's decision is
a unique impediment to the harmo-
nious development of First Amend-
ment jurisprudence under Davis.
The Ninth Cireuit is an outher even among
circuits that have upheld matching funds triggers.
Despite Davis’ direct reliance upon Day, the Ninth
Circuit is the only circuit that does not regard the
fate of matching funds triggers to be tied to the fate of
contribution limit triggers under the First Amend-
ment. Pet. App. 27-32 & 28-30 n.9. In this respect,
despite purporting to follow Daggett, the Ninth Cir-
cuit actually deviated from Daggett’s reasoning to
reach Daggett’s outcome.
In pursuit of a preferred outcome, the Ninth
Circuit has created a new split between the circuits
as to whether contmbution limit triggers and match-
ing funds triggers impose the same kind of burden on
free speech. By fomenting this new circuit split, the
Ninth Cireuit has disrupted the uniformity that
otherwise could have naturally arisen from lower
courts logically applying Davis to heal the split
between and among the First. Second, Fourth, Sixth,
Eighth and Eleventh Circuits. And because the Ninth
Circuit is a unique impediment to the harmonious
development of First Amendment jurisprudence
concerning matching funds triggers under Davts,
vranting this petition im particular is absolutely
essential to establishing uniformity in the law.
—
35
CONCLUSION
This case clearly involves matters of nationwide
importance. If the circuit split over the constitutional-
itv of matching funds triggers is not resolved, confu-
sion will soon envelope First Amendment jurispru-
dence. To restore and ensure uniformity in the law,
this Court shouid grant this petition. Citizens United
and Davis lead the way.
Respectfully submitted,
CLINT BoLick
NICHOLAS C. DRANIAS*
GUSTAVO E. SCHNEIDER
GOLDWATER INSTITUTE
SCHARF-NORTON CENTER
FOR CONSTITUTIONAL LITIGATION
500 East Coronado Road
Phoenix, AZ 85004
telephone: (602) 462-5000
facsimile: (602) 256-7045
ndranias@goldwaterinstitute.org
Counsel for Petitioners
*Counsel of Record
App. 1
United States Court of Appeals
for the Ninth Circuit
Notice of Docket Activity
The following transaction was entered on 05/21/2010
at 10:26:28 AM PDT and filed on 05/21/2010
Case Name: John McComish, et al v.
Ken Bennett, et al
Case Number: 10-15165
Document(s): Document(s)
Docket Text:
FILED OPINION (ANDREW J. KLEINFELD, A.
WALLACE TASHIMA and SIDNEY R. THOMAS)
REVERSED AND REMANDED. Judge: AJK Con-
curring, Judge: AWT Authoring, Judge: . FILED AND
ENTERED JUDGMENT. [7345699] [10-15165, 10-
15166] (RP)
App. 2
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOHN McComisH; NANcy MCLAIN;
Tony Boulter,
Plaintiffs-Appellees,
ROBERT BURNS,
Plaintiff-Intervenor-Appellee,
ARIZONA FREE ENTERPRISE CLUB’S
FREEDOM CLUB PAC; ARIZONA
TAXPAYERS ACTION COMMITTEE,
agent of Taxpayers Action
Committee; DEAN MARTIN;
RIcK MURPHY,
Plaintiffs-Intervenors-Appellees,
V.
KEN BENNETT, in his official
capacity as Secretary of State
of the State of Arizona; GARY
SCARAMAZZO; ROYANN J. PARKER;
JEFFREY L. FAIRMAN; DONALD
LINDHOLM; Lor! S. DANIELS,
in their official capacities as
members of the Arizona Citizens
Clean Elections Commission,
Defendants-Appellants,
and
CLEAN ELECTIONS INSTITUTE, INC.,
Defendant-Intervenor.
No. 10-15165
D.C. No.
CV-08-1550-ROS
App. 3
JOHN McCoMisti: NANCY McLAIN:
Tony Bouvier,
Plaintiffs-Appellees,
DEAN MARTIN: ROBERT BURNS:
RICK MURPHY; ARIZONA FREE
ENTERPRISE CLUB'S FREEDOM CLUB.
PAC: ARIZONA TAXPAYERS ACTION
COMMITTEE, agent of Taxpayers
Action Comniittee.
Plaintiffs-Intervenors- Appellees,
V.
KEN BENNETT. 1n his official No. 10-15166
capacity as Secretary of State | —
= . . : . D4 ‘ No.
of the State of Anzona; GARY RAS, Het ee
wees as ae, sancties ea CV 08-1550 ROS
SCARAMAZZO; ROYANN J. PARKER:
JEFFREY L.. FAIRMAN: DONALD ORDER AND
LINDHOLM: LoRI S. DANIELS. AMENDED
in their official capacities as OPINION
members of the Arizona Citizens
Clean Elections Commission,
Defendants,
and
CLEAN ELecrions INnstirure, INc.,
Defendant-Intervenor-Appelliant. |
Appeals from the United States District Court
for the District of Arizona
Roslyn O. Silver, District Judge. Presiding
: NS :
Argued and Submitted
April 12, 2010 - San Francisco, California
App. 4
Filed May 21, 2010
Amended June 23. 2010
Before: Andrew J. Kleinfeld, A. Wallace Tashima. and
Sidney R. Thomas, Circuit Judges.
Opinion by Judge Tashima:
Concurrence by Judge Kleinfeld
COUNSEL
Nicholas C. Dranias. Goldwater Institute, Phoeni:
iste], Arizona, for the plaintiffs-appellees.
Wilham R. Maurer, Institute for Justice. Seattle.
Washington, for the plaintiffs-intervenors-appellees.
Mary R. O'Graecy, Solicitor General of Arizona.
Phoenix, Arizona, for the defendants-appellants
Bradley S. Phillips, Munger. Tolles. & Olson. Los
Angeles, California, for the defendant-intervenor-
appellant.
Stephen) M. Hoersting, Center tor Competitive
Politics, Alexandria. Virginia, for amides euriae
Center for Competitive Politics.
ORDER
The opinion tiled May 21, 2010, shp op. 7319, is
amended by deleting footnote 1, slip op. at 7326, and
substituting the following footnote in its place:
1 Governor Symington was sentenced to a
380-month term of imprisonment, but his
conviction Was reversed and the case
App. 9
remanded for a new tral. See Unifed States
vu. Svmingion, 195 F.3d 1080 (Mth Cir, 1999).
He was then granted a presidential pardon
just as his retrial was set to commence.
OPINION
TASHIMA, Crreuit Judge:
This is a challenge to the constitutionahty of the
“matching funds” provision of Arizona's Citizens
Clean Elections Act, Ariz. Rev. Stat. § 16-952. The Act
establishes a legal frame work within which the State
of Arizona may provide puble financing to candidates
tor state political oMces. A candidate who chooses to
participate in the Act’s voluntary public financing
scheme relinquishes her or his rught to raise private
campaign contributions. Instead, she or he receives
an initial grant of funds from the state to spend on
her or his campaign. The challenged provision
ensures that if the participating candidate has an
opponent who is not participating in the pubhe
financing system and whose campaign expenditures
or contributions exceed a threshold set by the Act, she
or he receives additional matching funds from the
State
Six past and future candidates for Arizona
political office who have, or plan to, run privately
financed campaigns, as well as two political action
committees Who fund such candidates, brought suit to
enjoin the Act’s matehing funds provision, alleging
that it violates their mghts under the First
App 0
Amendment and the Fqual Protection Clause of the
Fourteenth Amendment of the US. Constitution,
These Plaintiffs claim that the matching funds
provision severely burdens their exercise of protected
political speech by pumshing them = for making,
receiving, or spending campaign contmbuthons. As
nonparticipating candidates, uf they exceed the Act's
matching funds threshold, they will trigger the
disbursement of matching funds to their opponents
They allege that their fear of triggering matching
funds to their opponent causes them to curb their
campaign fundraising or spending, thereby chilling
their speech. They also claim that because the Act
treats candidates ditferently based on whether or not
they participate in the publhe financing scheme. it
demes them the equal protection of the law
The district court held that the matching funds
provision of the Act violated the First Amendment. It
did not reach PlaintiYs’ equal protection claim. After
determining that the matching funds provision of the
Act could not be severed from the Act as a whole, the
district court granted Plaintitls’ motion tor summary
judgment, issued a declaratory judgment that the Act
violates the First Amendment. and enjoined its
enforcement
Applying Supreme Court) precedent) analyzing
campaign finance laws under the First Amendment,
see Citizens United v. FEC, 130 8. Ct. 876 (2010);
Davis v. FEC, 128 S.Ct. 2759 (2008); Buckley v. Valeo,
424 US. 1 (1976) (per curiam), we conclude that the
matching funds provision of the Act imposes only a
App. 7
nunimal burden on First Amendment rights. It
survives intermediate scrutiny because it bears a
substantial relation to the State's important interest
in reducing guid pro quo political corruption. Because
the Act conforms to the requirements of the First
Amendment and must be upheld, we reverse. We
decline to address Plaintifls’ equal protection claim in
the first instance; instead, we remand to the district
court so that it may consider the issue
l. Statutory Background
Prnor to the passage of the Citizens Clean
Flections Act (the “Act™), Arizona had already adopted
campaign contribution limits. Ariz. Rev. Stat. § 16-
905 chisterical and statutorv note! In 1986, the
State's voters passed an initiative measure estab
lishing individual contmbution hmits of $200) for
lemslative candidates and S500 for statewide cand
dates, per election. See rd Even with these campaign
contribution limits in place, Arizona experienced a
senes of massive political corruption scandals
In 1988, Governor Evan Mecham was indicted on
multiple criminal charges, including perjury and
fraud for allegedly hiding a campaign loan. He was
later impeached on charges of misuse of public funds
and obstruction of justice, and ousted from. office
Next, the “Savings and Loan Scandal” led to a United
States Senate Ethics Committee investigation of
certain activities of both US) Senators from Arizona,
App. s
who had received contmbutions and favors from
Arizona savings and loan tycoon Charles Keating
Then, in 1991, AzScam erupted. A sting operation
caught state legislators on videotape accepting
campaign contributions and brmbes in exchange for
agreeing: to support gambling legislation. The video
footage Was generally seen as outrageous For
example, Representative Don Kenny was seen
stuffing a $55,000 cash bribe into a gym bag after
poking, “are vou sure there are no hidden cameras up
there” AzScam resulted in the indictment of twenty,
one individuals, including lobbyists, polioeal acti
ists, and seven state lemslators. TWwo additional state
lesnslaters Were named in a cwil racketeering suit. In
total, nearly ten percent of the Amzona Lemslature at
the time faced civil or criminal charges related to
AzSeam. Former Anvona Governor J. Fife Symington
testified that the scandal was highly pubheied
around the state
In the late nineties, Governor Symington himself
was embroiled im scandal and indicted on twenty-
three counts, including using the power of his office to
extort concessions from a pension fund to which he
owed $10 milhon. He became Arizona's second
governor in a row to leave his office in disgrace when
he resigned in 1997, after being convicted on seven
counts of filing talse financial statements
Governor Syvmingten was sentenced to a 0 month term ef
imprisonment. but his conviction was reversed and the case
‘Continued on following page!
App 0
In the wake of these scandals, the voters of
Arizona passed the Citizens Clean Elections Act, Ariz
Rev Stat. $$ 16-940 - 16 961. an imtiative measure, in
the 1998 statewide election. Ariz, Rev. Stat. § 16-940
thistorical and statutory note! There is no evidence
that the Act was intended solely to remedy Arizona's
apparent susceptibility to political corruption. Plain-
ufYs, however, introduced ample evidence indicating
that when the Act was adopted, voters were aware of,
and concerned about, continuing and repeated
political corruption in Arizona
The voter information pamphlet for the 1998
election argued that the Act: should) be approved
because i would free politicians “to represent the
best interests of all the citizens, not just the large
financial contmbutors who can trade their cash for
political support.” Ballot) Propositions Pubheity
Pamphlet for the 1998 Anzona General Election, at
*S7, avarlable at http: wwweazsos gov election 1998
info pubpamphlet. prop200 pdf, One justification for
the Act was that at would change Arizona's
“reputation [as] a state rife with corruption and the
abuse of money ino polities... [and] restore confi-
dence in our political system” Jd at *SSs. The
pamphlet further noted that under the existing
remanded for a new tmal See United States © Syriuington, 15
F 8d 1080 (Oth Cir 1999) He was then granted a presidential
: t
pardon just as his retrial was set to commence
App. 10
election law regime, “jojur elected officials are going
to jail and this evele of abuse seems endless.” Jd
The Act's findings state that the State's previous
election financing system, “lu’ndermine{d| publhe
confidence in the integrity of public officials,” because
it “La llowled) Arizona elected officials to accept large
campaign contributions from private interests over
which they have governmental jurisdiction.” Ariz
Rev. Stat. §$ 16-940. The Act’s stated purpose is to
“create a clean elections system that will improve the
integrity of Anzona state government by diminishing
the influence of special-interest money, will encourage
citizen participation in the political process, and will
promote freedom of speech.” ld
Plaintiffs argue that the Act was not aimed at
reducing corruption, and that) legislative reforms
designed to prevent another AzScam = had already
been adopted at the time the Act was passed. Instead,
Plaintitts contend that the Act's true purposes were to
level the political playing field and reduce campaign
spending. Voters are motivated by varmed and
—_— ee
" One of the Act's orunnal supporters testified that another
one of its goals was to “promote freedom of speech because
lunder the Act.) more candidates would have more opportunity
to speak ~
' We recently recognized in Long Beach Anoa Chamber of
Commence o City of Long Beach, that in light of Supreme Court
precedent, “‘preventing corruption or the appearance of corrup
tion are the only legrtumate and compelling povernment
interests thus far identified for restricting campaizn finances”
Long Beach, No O7-55691, Food . 2010 WL V729710 at °7
Continued on following page!
App. 11
contheting motivations. Generally, a diverse elector-
ate cannot be said to share one true intent in
adopting an initiative measure. More specifically, the
extent to which Arizona’s various corruption scandals
led to the passage of the Act cannot be precisely
determined. Based on the record before us, however,
(Mh Cir, Apnml 30, 2010) (quoting FEC v Natl Conservatiov
Political Action Comm, 470 US. 480, 496-97 ©1985) In
particular, we observed that the so-called) “anti-distertion
rationale.” under which the government claims an “interest im
Combating “the corrosive and distorting effects of immense
aggregations of wealth, "is not a legitimate basis for campaign
finance restrictions after the Supreme Court partially overruled
Austin ¢ Mich State Chamber of Commerce, 494 US. 652
(1990), in its Citizens United decision Jad at *6 (quoting Austin,
494 US) at 660 and discussing Cifizens United, 130 S.Ct. at
904, 912-13) Likewise, the “time pretection rationale.” under
which the government clams an interest in “‘protectling
candidates trom spending too much time raising money rather
than devoting that time to campaigning among ordinary voters’ ”
may not serve as the basis tor restricting campaign finance
activity. Jd at *7 quoting Randall co. Sorre?d], 548 US. 230, 243-
45 (2008))
We need not, however, address the potential legiuimacy of
arguments that the State has not raised before us in defense of
the Act. Further, even if the State had raised these arguments,
“ijt is unnecessary to look beyond the Act's primary purpose to
himuit the actuahty and appearance of corruption resulting from
large individual financmal contributions ino order to find a
constitutionally sufficient justification” for the matching funds
provision. Buckley, 424 US. at 26. Because the Act is justified
by the State's legatimate and non-illusery interest in reducing
quid pro quo corruption, we need not consider the constitutional
legitimacy of other potential rationales that might support it
See id. at 24-27
App. 12
we conclude that one of the principal purposes of the
Act was to reduce quid pro quo corruption.
The Act created a system of public financing for
political campaigns. A candidate who chooses not to
participate in this system may raise unlimited funds
from private donations, subject to contribution limits
and disclosure requirements, which existed before the
Act. If a candidate opts to participate in the public
financing system, she or he agrees to forfeit her or his
right to fund her or his campaign with private contri-
butions. Instead, she or he must collect a required
number of five-dollar “qualfving contributions”
during a specified time period to demonstrate that
she or he has the voter support to be a viable
candidate. Ariz. Rev. Stat. § 16-946. The number of
required qualifying contnbutions vanes between two
hundred and four thousand, depending on the office
that the candidate is seeking. Ariz. Rev. Stat. § 16-
950 1)).
If the candidate qualifies for public financing, she
or he will then receive a lump-sum grant for her or
his primary campaign, which varies depending on
whether she or he is running opposed or unopposed
in a party primary, or whether she or he ts an
independent candidate. Ariz. Rev. Stat. § 16-951. If
the participating candidate has a nonparticipating
opponent in the primary who spends more than her
or his initial grant, or whose expenditures, combined
with the value of independent expenditures in
App. 13
opposition to her or his candidacy or in support of her
or his nonparticipating opponent,’ exceed the amount
of her or his initial grant, the participating candidate
will receive “matching funds” in the amount of the
combined spending of her or his nonparticipating
opponent, plus the value of independent expenditures
against her or him or in support of her or his non-
participating opponent, reduced by six percent and
reduced by the amount of “early contributions” raised
by the nonparticipating opponent during the pre-
primary fundraising period.” Ariz. Rev. Stat. § 16-952,
16-945.
If the participating candidate wins her or his
primary and continues on to the general election, she
or he receives a second initial lump-sum grant. Ariz.
“ An independent expenditure is a campaign expenditure
made by a third party that “expressly advocates the election or
defeat of a clearly identified candidate, that is made without
cooperation or consultation with any candidate or committee or
agent of the candidate and that is not made in concert with or at
the request or suggestion of a candidate, or any committee or
agent of the candidate.” Ariz. Rev. Stat. § 16-901; 14).
* The matching funds that the participating candidate
receives are reduced by six percent to take into account the fact
that nonparticipating candidates incur expenses in order to
raise money. The assumption under-lying this provision is that a
nonparticipating candidate must spend six dollars (on postage,
event costs, etc.) in order to raise one hundred dollars, while a
participating candidate has no fundraising costs. Therefore, in
order for both candidates to have the same net amount available
to spend on non-fundraising campaign expenses, the matching
funds that the participating candidate receives are reduced by
SIX percent
App. 14
Rev. Stat. § 16-952. If she or he has a_non-
participating opponent in the primary” whose
contributions received, combined with the value of
independent expenditures in supporting him or her
and opposing the participating candidate, less his or
her expenditures during the primary campaign,
exceed the amount of the participating candidate's
second initial grant, the participating candidate will
receive matching funds, calculated in the same
manner as in the primary campaign. Ariz. Rev. Stat.
§ 16-952(B). During both elections, matching funds,
combined with the initial grant, may not exceed three
times the amount of the initial grant. Ariz. Rev. Stat.
$ 16-952(E). This means that a _ nonparticipating
candidate who ts able to raise funds in excess of three
times the amount of his or her participating
candidate's initial grant gains a potentially unlimited
financial advantage in the campaigns.
Il. Factual Background
Plaintiffs are John McComish and Nancy
McLain, current members of the Arizona House of
Representatives who are seeking reelection in 2010,
Tony Bouie, a non-incumbent candidate for the
Arizona House of Representatives, and Robert Burns,
an Arizona State Senator seeking reelection in 2010.
Joining them in this challenge to the Act are
plaintiffs-intervenors, Dean Martin, a former Arizona
State Senator, current State Treasurer, and candidate
for Governor in 2010, Rick Murphy a member of the
Arizona House of Representatives seeking reelection
App. 15
in 2010, the Arizona Free Enterprise Club’s Freedom
Club PAC (“Freedom Club PAC”), a political action
committee (“PAC”) which makes contributions to
Arizonans for a Sound Economy, an independent
expenditure committee that funds independent
expenditures in races subject to the Act, and the
Arizona Taxpayers Action Committee (“Arizona
Taxpayers’), an independent expenditure committee
that makes independent expenditures in races subject
to the Act. All candidate-plaintiffs have declined to
participate in the Act’s public funding program and
will be running in the 2010 election as privately-
financed candidates.
Plaintiffs sued Jan Brewer, in her official
capacity as Arizona Secretary of State,” and Gary
Scaramazzo, Royann Parker, Jeffrey Fairman,
Donald Lindholm, and Lori Daniels, in their official
capacities as members of the Arizona Citizens Clean
Elections Commission (collectively, the “State”). The
Clean Elections Institute, Inc., a nonprofit organiza-
tion formed to continue the work of Arizonans for
Clean Elections, the campaign committee that
sponsored the initiative that created the Act,
intervened as a defendant.
Since 2002, between fifty-two percent and sixty-
seven percent of candidates for state office during
general elections have chosen to participate in the
* Ken Bennett has succeeded Jan Brewer as Secretary of
State since the commencement of this action.
App. 16
Act’s public funding program. Plaintiffs contend that
matching funds have dampened overall campaign
spending in Arizona. It is undisputed, however, that
overall campaign spending in Arizona has increased
since the Act’s passage.
Plaintiffs also allege that matching funds have
specifically deterred them from engaging in political
expression through monetary expenditures. They
argue that the fear of triggering matching funds
‘auses privately-funded candidates to refrain from or
delay raising and spending money in support of their
campaigns. They contend that matching funds
burden the speech of independent expenditure
committees by causing them to delay making
independent expenditures in order to avoid triggering
matching funds until later in the campaign, when the
publicly-financed candidate will have less time to use
them, in an attempt to minimize the competitive
benefit of the matching funds to the publicly-financed
candidate.
We agree with the district court’s observation
that “Plaintiffs’ testimony is somewhat scattered and
shows only a vague interpretation of the burden of
the Act.” John McComish testified that in his 2008
campaign for the House of Representatives, he
triggered matching funds to his opponents. In order
to avoid triggering additional matching funds to his
opponents until later in the campaign, he “decilded|
to wait and not make any substantial expenditures
until September 2, 2008.” McComish describes this
as an act of “self-censorship” in order to avoid the
App. 17
consequence of “disseminat(ing) Viewpoints hostile to
my campaign.”
Nanev McLain testified that during her 2008
campaign for House of Representatives she “made a
conscious decision to not raise or spend a significant
amount because it could not be spent without
resulting in ‘equalizing funds.” Although she avoided
triggering matching funds in the general election, she
triggered matching funds in the primary. She claims
that her “reluctance to fundraise and spend money
during the primary election meant that [she] was not
able to broadcast [her] message either on air or in
newspapers as often as (she) thought necessary to
win the election.” although she was victorious. She
describes matching funds as imposing a “competitive
disadvantage” on her campaign, which her tund-
raising and spending choices “seek to minimize.”
Tony Bouie also triggered matching funds during
his 2008 campaign for House of Representatives. He
testified that because he had “no control over inde-
pendent expenditures that the Commission deems
(to] benefit him” he “fejlt] compelled to conserve
money for damage-control in anticipation of poorly-
conceived independent expenditures backfiring after
they trigger matching funds” to his opponents. As a
result he “change|d his] campaign strategy” by
“holding [his] campaign speech until [his] expen-
ditures could be timed to minimize the impact of the
matching funds.” He believes that matching funds
thereby “placed .him] at a continuous tactical dis-
advantage ~
App. 1s
Robert Burns “beheve(s) that the enistence of
matching tunds coerces traditionally funded candi-
dates into changing their message and the timing of
getting out their message, even if ultimately the
amount of messaging a traditional candidate chooses
to engage in does not change.” His deposition
testimony indicated that matching funds had not
actually chilled his speech during his most recent
2008 election for State Senate. He admitted that he
was willing to tmgger matching funds. Further, he
also indicated that despite the matching funds
provision, he simply communicated his message to
the extent he felt was necessary to win, stating “[ilf
1 had to spend X number of dollars to get out a- a
mailer, and | had that amount of monev, I would go
ahead and do the mailer.”
Dean Martin stated that “the matching funds
provision of the Act forced [him] to self-censer™ in his
most recent race for State Treasurer in 2006. He
reasoned that the “only way [he] could avond being
massively outspent by [his| opponent was to prevent
the triggering of additional matching funds to her
campaign” and “was thus coerced into accepting the
same limits as [his) government-funded opponent
lwithout) receiviing] anv of the benefits of being a
government-funded candidate, such as the receipt of
matching funds tor independent expenditures that
opposed [his] candidacy and the label ‘participating’
or ‘clean’ candidate.” Despite Martin's testimony that
he telt matching funds severely burdened his speech,
he curiously could not even recall whether he had
App. 19
ever triggered matching funds to an opponent. The
record indicates that Martin is) fundamentally
opposed to the pohey of publicly financing political
campaigns, regardless of whether ao given) public
financing scheme includes a provision for matching
funds
Rick Murphy ran. successfully tor House of
Representatives as a participating candidate in 2004
He later ran for reelection in 2006 and 2008S as a
nenparticipating candidate. He testified that he
attempted to not trigger matching funds during his
2006 campaign because, since his opponent would
receive additional matching funds once he surpassed
the threshold amount, “[1]t didn’t seem like it made a
lot of sense for me to do that, so ] curtailed my speech
and curtailed my fundraising in order to prevent it.”
Sull, Murphy testified that matching funds have
never prevented him from accepting a politica’
contribution. Murphy's testimony that he curtailed
his fundraising for fear of triggering matching funds
was directly contradicted by his own campaign
consultant, who testified that he advised Murphy to
“raise as much monev” as he could trom “everv-
where.” that he never advised Murphy to stop raising
money, and that Murphy never curtailed or stopped
his tundraising efforts.
The treasurer of the Freedom Club PAC testified
that the PAC has never been prevented from making
an independent expenditure for fear of tmggenng
matching funds. He further stated that he takes
into account vamous campaign finance “reporting
App. 20
requirements, notifications and filings” upen which
matching funds disbursement determinations by the
Ciazens Clean Elections Commission are based, in
determining when to spend money.
Arizona Taxpayers stated that it “decided not to
speak 1n opposition to (al participating candidate | .
in the 2006 primary election because such speech
would have triggered matching funds.” However, the
groupss founder admitted that it had never decided
against making an expenditure because it would
trigger matching funds. Further, the evidence demon-
strates that Anzona Taxpayers could not afford to
make expenditures during the 2006 primary election,
because it had only $52.72 in cash on hand.
lll. Standard and Scope of Review
We review the distret court's grant of summary
judgment to Plaintiffs and denial of summary judg
ment to the State de novo. See Block vo City of LA.
253 F.3d 410, 416 (9th Cir 2001). This means that we
will look at the case “anew, the same as if it had not
been heard before, and as if no decision previously
had been rendered.” and “mving no deference to the
district judge's determinations.” Freeman co DirecTV.
Unrdinanly a denial of a motion for summary judgment ts
net a final order and thus not appealable YS USC $1291
However, the distmet court’s grant of summary pudgment was a
final decision giving us jurisdiction te review its demal of ithe
State's} motion for summary pudgment " Adend o MCA, Inc , 863
Fold 1465. 1482 n 20 (9th Cir, 198s
App. 21
Ine, 457 FSd 1001, 1004 (Sth Cir 2006): Ditto v.
McCurdy, 510 F.3d 1070, 1075 (9th Cir. 2007)" We
apply the same legal standard that the district court
did, “[vhewing the evidence in the light) most
favorable to the nonmoeving party.” and granting
summary judgment “only if mo genuine issues of
material fact remain tor trial and the moving party is
entitled to judgment as a matter of law” Block, 253
F.8d at 416 We “may affirm on any ground supported
bv the record.” N. Mariana Islands v. United States.
399 FS3d 1057, 1060 (9th Cir, 2005). Because the
district court did not rule on the parties’ evidentiary
objections and did not stmke anv evidence from the
record, al) of the evidence adduced below remains a
part of the record before us on appeal. See Vinson v
Thomas, 288 F.3d 1145, 1152 & nos (9th Cir, 2002)
~ We rect Plaintils’ argument that Brown Cal Dept of
Transp, 321 F Sd 1217, 1227 (oth Cir 20038), requires us to
review the distmet court's findings of tact for clear error because
its opimien was one which struck down a restmetion on speech
Rrown, and the line of cases that it follows, apply to this Court's
review of cases in which the distmet court made findings of fact
in the process of issuing a preliminary ingunetion or holding a
bench tnal, or when questions of tact were submitted to a jury
See Planned Parenthaad vo Am. Coalition of Life Activists, 290
F Sd 1OQA8, 1066.1070 (9th Cir DOOD) cen bane) This case,
amsing from a grant of summary judgment. is in an entirely
different procedural posture to which these cases de not apply
>.)
App. 22
IV. Analysis
birst, we must determine what level of consti-
tutional scrutueny apphes to the Act’s matching funds
provision. The level of scrutiny that apphes to a law
which implicates First Amendment concerns 1s
“dictated by both the intrinsic strength of. and the
magnitude of the burden placed on, the speech and
associational freedoms at issue.” Lincoln Club vo Crty
of Irvine, 292 F.3d 934, 938 (9th Cir, 2002) We must.
therefore, engage in a two-step inquiry. First, we
determine whether the type of speech the law affects
is fully protected by the First Amendment. Neat, we
determine the type of burden, if any, that the law
places on that speech. Laws that) place severe
burdens on fully protected speech are subject to strict
scrutiny. Laws that “place! ! only a minimal burden
on fully protected ... freedoms” or that apply to
“speech and associational freedoms [that] are not
fully protected by the First Amendment” receive
intermediate serutiny. lie
(1]) Buckley, the Supreme Court's landmark
case on the constitutionality of campaign finance laws
under the First Amendment, provides guidance in
determining whether the Act affects fully protected
speech. Buckley held that campaign contributions are
not tully protected political speech. 424 US. at 21-22:
see also’ Lincoln Club, 292 F3d at 988-39. The
Supreme Court reasoned that a “contribution serves
as a general expression of support for the candidate
and his views, but does not communicate the under-
lying basis for the support {The transtormation
App. 23
of contributions into political debate involves speech
by someone other than the contmbutor” Buckley, 424
US. at 21. By contrast, campaign expenditures are
fully protected speech because a “restmction on the
amount of money a person can spend on political com-
munication during a campaign necessarily reduces
the quantity of expression by restricting the number
of issues discussed, the depth of their exploration,
and the sive of the audience reached.” Jd. at 19.
[2] Following Buck/ey, a law that has a hybrid
effect on both contmbutions and eopenditures is inter-
preted as though it affects fully protected speech. See
Lincoln Club, 292 F.3d at 939. The matching funds
provision of the Act affects both contributions and
expenditures. During primary elections, the Act
oxpheitly Ges participating candidate's matching fund
disbursements to nonparticipating candidates’ expen-
ditures. Ariz. Rev Stat. §$ 16-952. Durning a general
election, the Act bases matching fund calculations on
contributions received by nonparticipatuung cand-
dates. Jd) This includes contnbutions that come from
a nonparticipating candidate's personal funds, which,
under Buckley's framework, are considered expend-
tures, and fully protected speech. See 424 ULS. at 51-
55. Beeause the Act affects both contributions and
expenditures, we analyze itoas though it affects fully
protected speech.
Next, we determine what level of burden, if any,
the Act imposes on that speech. PlaintifYs argue that
the Supreme Court’s recent decision in Davis, 128
S.Ct. 2759, controls this case, and compels the
App. 24
conelusion that the Act places a severe burden on
their speech triggering the application of strict
serutiny. The State and Defendant-Intervenor counter
that the Act places only a minimal or indirect burden
on Plaintiffs’ speech and that the Supreme Court's
latest campaign finance decision, Crfizens United, 130
S.Ct. S76, reaffirmed that intermediate scrutiny
apples to such laws.
[3] In Buckley, the Supreme Court evaluated the
constitutionality of provisions of the Federal Election
Campaign Act of 1971, and related provisions of the
Internal Revenue Code of 1954, as amended, which
allowed for the pubhe tinanecing of presidential elec:
tions. See 424 US. at 6, 85-109. The Court found that
the public financing scheme in that case was “a con
gressional effort, not to abridge, restrict. or censor
speech, but rather to use public money to facilitate
and enlarge puble discussion and participation in the
electoral process, goals vital to a_ self-governing
people. Thus [it] furthers, not abridges, pertinent
First Amendment values.” Jd. at 92-93) (footnote
omitted). Therefore, the public financing of elections
itself does not create any burden on speech.
In Davis, the Court struck down the Milhonaire’s
Amendment to the Bipartisan Campaign Retorm Act
of 2002 (““BCRA”), 2 U.S.C. § 44.a-lta)d. The Milhon-
ares Amendment applhed to campaigns for the
United States House of Representatives, in which all
candidates are privately financed and there is no
public funding. But if one candidate financed his
campaign with personal tunds in excess of a threshold
App. 25
amount, “a new, asymmetrical regulatory scheme
clame] into play.” 128 S.Ct. at 2766. While the self-
financing candidate continued to be subject to the
normal contribution limits, his opponent, the ‘non-
self-financing’ candidate became elinble to “
individual contributions at treble the normal limit...
receive
even from individuals who may have reached the
normal aggregate contributions cap, and [could]
accept coordinated party expenditures without limit.”
ld. The Davis Court held that this “scheme of dis-
criminatory contnbution limits,” “imposes sa
substantial burden on the exercise of the First
Amendment right to use personal funds for campaign
speech.” Jd. at 2772. Having found the Millionaire's
Amendment to be a substantial burden on fully
protected speech, the Court apphed strict scrutiny. Jd.
Plaintitls urge us to adopt the rationale of the
district court and conclude that, under the logic of
Davis, they have “established a cognizable burden”
under the First Amendment. The district court
reasoned that “lij/f the mere potential for your
opponent to raise additional funds is a substantial
burden, the granting of additional funds to your
opponent must also be a burden.” We disagree. As
discussed below, we conclude that Davis is easily and
properly distinguished from the case at bench.
The regulatory framework the Supreme Court
examined in Davis is different from the one we
confront under the Act. Davis says nothing about
public “funding schemes and therefore says nothing
about their constitutionality.” Comment, 122 Harv. L.
App. 26
Rev. 375, 383 (Nov. 2008). All of the candidates in
Davis were subject to the same scheme regulating
privately financed candidates. “Under the usual cir-
cumstances, the same restrictions apply to all the
competitors for a seat and their authorized
committees.” Davis, 128 S.Ct. at 2765. But if one
candidate heavily self-funded his campaign, it
triggered an entirely new “asymmetrical regulatory
scheme” that required him to file three additional
types of campaign finance disclosures not required of
his opponents. 7d. at 2766-67. “Failure to comply with
the reporting requirements may [have] result{ed] in
civil and criminal penalties.” /d. at 2767. It also
triggered new, more generous campaign contribution
limits, but only for the self-financing candidate's
opponents. /d. at 2771.
In striking down the Millionaire’s Amendment,
the Supreme Court noted that had the law “simply
raised the contribution limits for all candidates,
Davis’ argument would plainly fail.” Jd. at 2770; see
also id. at 2771 “Consequently, if § 319(a)’s elevated
contribution limits applied across the board, Davis
would not have any basis for challenging those
limits.”). Instead, the law constituted a burden on
Davis’ speech only because it treated candidates run-
ning against each other under the same regulatory
framework differently based on a candidate's decision
to self-finance his or her campaign, which is a man-
ner of engaging in fully protected speech. Jd. at 2771.
In contrast, the Supreme Court has held that it is
constitutional to subject candidates running against
App. 27
each other for the same office to entirely different
regulatory schemes when some candidates volun-
tanily choose to participate in a public financing
system. Buckley, 424 U.S. at 97. “|T]he Constitution
does not require Congress to treat all declared can-
didates the same for public financing purposes.” /d.
“Sometimes the grossest discrimination can lie in
treating things that are different as though they were
exactly alike.” /d. at 97-98.
In Davis, the Millionaire's Amendment was an
attempt to “level electoral opportunities for candi-
dates of different personal wealth.” 128 S.Ct. at
2773. This was problematic because Buckley had held
that “the First Amendment simply cannot tolerate |a|
restriction upon the freedom of a candidate to speak
without legislative limit on behalf of his own can-
didacy.” 424 U.S. at 54. In Citizens United, the
Supreme Court elaborated on its decision in Davts,
indicating that the Millionaire's Amendment was
unconstitutional because it specifically sought to
disadvantage the rich. “The rule that political speech
cannot be limited based on a speaker’s wealth is a
necessary consequence of the premise that the First
Amendment generally prohibits the suppression of
political speech based on the speaker's identity.”
Citizens United, 130 S. Ct. at 905. Under the Act,
while matching funds are calculated based on the
total contributions received and expenditures made
by a nonparticipating opponent, they are not dis-
tributed specifically to the opponents of wealthy can-
didates. Matching funds do not distinguish between
App. 28
different sources of nonparticipating candidates’
financing at all. The law in Davis was problematic
because it singled out the speakers to whom it
applied based on their identity. The Act’s matching
funds provision makes no such _identity-based
distinctions.
(4) Plaintiffs, perhaps recognizing that they
have not demonstrated any actual chilling of their
speech by the Act, argue that under Davis, we could
strike down the matching funds provision without
any proof that their speech has been deterred or
punished. But Davis does not require this Court to
recognize mere metaphysical threats to political
speech as severe burdens. We will only conclude that
the Act burdens speech to the extent that Plaintiffs
have proven that the specter of matching funds has
actually chilled or deterred them from accepting
campaign contributions or making expenditures.
15] Based on the record before us, we conclude
that any burden the Act imposes on Plaintiffs’ speech
is indirect or minimal.” Since the Act’s adoption,
* Prior to, and without the benefit of, the Supreme Court's
recent decisions in Citizens United and Davis, three of our sister
circuits considered the constitutionality of state public financing
schemes with matching funds provisions similar to the one we
now confront See N.C. Right to Life Comm. Fund for Indep.
Political Expenditures v. Leake, 524 F. 3d 427 (4th Cir. 2008),
Daggett v. Comm ‘n on Govtal Ethics and Election Practices, 205
F.3d 445 (1st Cir. 2000); Day v. Holahan, 34 F.3d 1356 (8th Cir.
1994). The Fourth and First Circuits concluded that the
respective statutes imposed no First Amendment burden at all.
(Continued on following page)
App. 29
See N.C. Right to Life, 524 F.3d at 437-49; Daggett, 205 F.3d at
464-65. The Eighth Circuit, however, concluded that the
Minnesota law at issue imposed a substantial burden on fully
protected political speech and, because it could not survive strict
scrutiny, struck it down. See Day, 34 F.3d at 1360, 1363.
Plaintiffs argue that because the Supreme Court’s decision
in Davis cites Day, Davis somehow transformed the decision of
one of our sister circuits into controlling precedent. Davis cites
Day only once for a single, limited proposition. See Davis, 128
S. Ct. at 2772 (“Many candidates who can afford to make large
personal expenditures to support their campaigns may choose to
do so despite [the Millionaire’s Amendment], but they must
shoulder a special and potentially significant burden if they
make that choice. See Day v. Holahan, 34 F.3d 1536, 1359-60
(C.A.8 1994) (concluding that a Minnesota law that increased a
candidate's expenditure limits and eligibility for public funds
based on independent expenditures against her candidacy
burdened the speech of those making the independent expen-
ditures)”). In so citing Day, Davis did not affirm or adopt the
Eighth Circuit's approach, nor did it overturn sub silento the
decisions of the First and Fourth Circuits. It merely cited Day
for what it is — a decision in which our sister circuit found that a
law chilled protected speech and held that such a burden could
not survive strict scrutiny. Our decision is not controlled by Day,
nor are we persuaded by it.
In Day, plaintiffs demonstrated that the Minnesota statute
they were challenging had a “chilling effect” on political speech
and that its “mere enactment ... hald] prevented many if not
most potential political expenditures from ever being made.” 34
F.3d at 1360. As discussed infra, Plaintiffs have not established
the existence of such a chilling effect in the instant case. Having
found that the Minnesota law imposed a substantial burden on
fully protected political speech, the Eighth Circuit proceeded to
apply strict scrutiny. Jd. at 1361. The court concluded that the
law could not survive that test because it found that the state’s
professed interest supporting the law, that of encouraging par-
ticipation in the public financing program, was “not legitimate,”
“no matter how compelling in the abstract,” because it was not
(Continued on following page)
App. 30
campaign spending in Arizona has increased. Several
Plaintiffs testified that they would have made
increased expenditures or undertaken increased
fundraising but for the matching funds provision. No
Plaintiff, however, has pointed to any _ specific
instance in which she or he has declined a contri-
bution or failed to make an expenditure for fear of
triggering matching funds. The record as a whole
contradicts many of Plaintiffs’ unsupported assertions
that their speech has been chilled. Robert Burns
admitted he was willing to trigger matching funds
and spent as much money as he needed to in order to
communicate his message. Dean Martin claimed his
speech was chilled by matching funds, but could not
even recall whether he had triggered them in the
past. Rick Murphy admitted he had never turned a
based in fact, but was rather “contrived for purposes of [ |
litigation.” Jd. The record there demonstrated that the chal-
lenged provision was “not necessary to encourage candidates’
involvement in public campaign financing, as participation was
approaching 100% before the new campaign finance laws were
passed.” Id.
Two years after it decided Day, the Eighth Circuit, recog-
nizing the unusual factual background of that case, declined to
extend its reasoning and upheld other provisions of Minnesota's
campaign finance law under strict scrutiny. See Rosenstiel v.
Rodriguez, 101 F.3d 1544, 1555 (8th Cir. 1996). In the case at
bench, because the interest Arizona asserts in support of the Act
is not “contrived for purposes of this litigation,” Day, 34 F.3d at
1361, even under current Eighth Circuit law “the circumstances
surrounding the enactment of the [Act] make Day inapposite.”
Rosenstiel, 101 F.3d at 1555. We decline to follow the Eighth
Circuit down a road that even it refused to follow.
App. 31
contnbution away, and his political consultant testi-
fied that he never slowed his fundraising. The
Freedom Club PAC’s treasurer testified that he has
never been dissuaded from making an independent
expenditure by the possibility of triggering matching
funds. Arizona Taxpayers’s claim that it declined to
speak in the 2006 pmmary for fear of tmggering
matching funds seems disingenuous in lhght of the
fact that it only had $52.72 cash on hand. Plaintiffs
have not demonstrated that any chilling effect enists.
Their own experiences campaigning under the Act
highlight that it “in no way limits the quantity of
speech one can engage in or the amount of money one
can spend engaging in political speech, nor does it
threaten censure or penalty for such expenditures.”
Daggett. 205 F.3d at 464.
Plaintiffs bemoan that matching funds deny
them a competitive advantage in elections. The
essence of this claim is not that they have been
silenced, but that the speech of their opponents has
been enabled. We agree with the Firsi Circuit that
the First Amendment includes “no right to speak free
from response the purpose of the First Amendment is
to secure the widest possible dissemination of infor-
mation from diverse and antagonistic sources.” Ja.
(internal quotations omitted).
Plaintiffs’ assertions that they have delaved
making certain expenditures in order to avoid trig-
gering matching funds to their opponents until later
in the campaign cycle is evidence that they continue
to seek strategic advantages under the Act, but does
“vs
App. 32
not support the argument that their speech has been
chilled. Many campaign finance regulations. parti-
cularly disclosure requirements, lead candidates to
engage in such strateme behavior, but this does not
make them unconstitutional. As the Court has
observed, “the public begins to concentrate on elee-
tions only in the weeks immediately before they are
held.” Crtrzens United, 1380 S.Ct. at S895. Con-
sequently, waiting until that time to make campaign
expenditures would not necessamly be evidence of
coerced behavior. Rather, such decisions likelv reflect
a rational strategy of maxinuzing the impact of one’s
campaign furds
(6] Although Plaintiffs cannot point to any
specifie instances in which their speech has been
chilled because of the Act. we recognize that under
the Supreme Court's jurisprudence, even laws that
create only potential chilling effects impose some
First Amendment burden. For example. the Supreme
Court has held that campaign contmbution disclosure
requirements and campaign advertisement funding
disclosure and disclaimer requirements impose a
minimal burden on speech and are therefore subject
to intermediate scrutiny. See Bucklev, 424 U.S. at 64
(disclosure requirements); Ciftrzens United, 130 8. Ct.
at 914 (disclosure and disclaimer requirements). In
Buckley, the law at issue required candidates and
PACs, as well as some other individuals or groups
making pohtical contmbutions or expenditures, to file
disclosure reports with the FEC. 424 U.S. at 63. The
Court recognized that these reporting requirements
A pp 33
“can sermously intringe on privacy of association and
behef guaranteed by the First Amendment.” Jd. at 64
The Court also realized that the public disclosure of
political contmbutions “will deter some individuals
who otherwise might contnbute. In some instances,
disclosure may even expose contributors to haras-
sment or retahation.” Jd. at 6S. Even though these
Were “not insignificant burdens on individual mghts.”
the Court analyzed them under intermediate scrutiny
rather than strict scrutiny because the disclosure
laws “impose no ceiling on campaign-related
activities.” Ja. at 64, BS.
Recently, in Crtizens United. the Court applied
the same type of analysis to the BCRA’s requirement
that political advertisements must state who “is
responsible for the content of (certain) advertising.”
130 S.Ct. at 913-14. The Court reaffirmed Buckley's
reasoning that such requirements may impose a
cognizable burden under the First Amendment even
though they “do not prevent anyone from speaking.”
ld. at 914.
The Court rejected the plaintiffs’ arguments that
the requirement “decreases both the quantity and
effectiveness of the group's speech by forcing it to
devote four seconds of each advertisement to the
spoken disclaimer.” Jd. at 915. Notably, in the absence
of any evidence “of harassment or retaliation,” the
Court also dismissed the plaintiffs’ arguments that
the disclosure requirements would “chill donations to
an organization.” Jd. at 916.
’
App. 34
[7] In this ease, as in Buckley and Citizens
United, the burden that Plaintiffs allege is merely a
theoretical chilling effect on donors who might dishke
the statutory result of making a contmbution or
candidates who may seek a tactical advantage related
to the release or timing of matching funds. The
matching funds provision does not actually prevent
anyone from speaking in the first place or cap
campaign expenditures. Also. as ino Buckley and
Citizens United, there is no evidence that any Plain-
tiff has actually suffered the consequence they allege
the Act imposes. We conclude that the burden created
by the Act is most analogous to the burden of dis-
closure and disclaimer requirements in Buckley and
Citizens United. Following the Supreme Court's pre-
cedents in those cases, because the Act imposes only a
nunimal burden on fully protected speech. inter-
mediate scrutiny apples.
{8} Examining the matching funds provision
under intermediate scrutiny, because there is a *‘sub-
stantial relauion’” between the Act's matching funds
provision and a “‘sufficiently important’ governmen-
tal interest.” we conclude that it does not violate the
First Amendment. See Citizens United. 180 8. Ct. at
914 (quoting Bucklev The State has a sufficiently
important interest in preventing corruption and the
appearance of corruption. See Cifticens United, 130
S.Ct. at 909. The record demonstrates that Arizona
has a long history of guid pr quo. corruption.
AzSeam, in which legislators literally sold their votes
tor cash bribes. was just one of many substantial,
App. 35
wide-spread, and highly-pubheized political scandals
that Arizona experienced in the late 1980s and 1990s
These incidents occurred despite the contributions
limits in place prior to the Act. Regardless of whether
Quid pro guo corruption continued to be a problem at
the time of the Act’s passage, the appearance of Quid
pro quo corruption to the electorate was undeniable
Arizona voters were justified tn concluding that con
tribution limits alone were not sufficient to combat
corruption and its appearance. As the Supreme Court
has recognized, the State's interest in eradicating the
appearance of quid pro quo corruption to restore the
electorates confidence in its system of government is
not “tllusery.” it is substantial and compelling. Sce
Buckley, 424 U.S. at 26-27
Furthermore, the State has an interest in pro-
viding matching funds to encourage participation in
its public funding scheme. Because Buck/ev held that
pubhe financing of elections furthers First: Amend-
ment values, federal courts have found that states
may structure them in a manner which wall encour-
age candidate participation ino them. See, e.g.
Rosenstiel, 101 F.3d at 1553 (the State has a compel.
ling interest in stimulating candidate participation in
its public financing scheme”). The Eighth and First
Circuits have found this interest to be so compelling
as to withstand even the strictest scrutinv. See id..
Because we hold that the Act as) sutyect) only to
intermediate scrutiny, we need not decade whether the Act would
survive stmet scrutiny, as the First and Fourth Cireuits have
held with respect to public financing schemes similar to the Act
App. 36
Vote Chotce, Inc. v DiStefano, 4 F.8d 26. 39-40 cst
Cir. 1993) (finding that the state has a “compelling”
interest in “having candidates accept public finan-
cing”).
The distrmet court misapprehended how the Act
functions to reduce corruption. It assumed that the
Act works by reducing nonparticipating candidates’
incentive to fundraise private contmbutions, thereby
reducing the appearance of corruption among nonpar-
ticipating candidates. Thus, it concluded that the Act
did not further an anticorrpution interest by pro-
viding matching funds to participating candidates
triggered by non-participating candidates making
contributions to their own campaigns from their own
private funds. In doing so, it relied on the Court's
holding that “discouramng use of personal funds| |
disserves the anticorruption interest.” Davis, 128
S.Ct at 27738
The tact is, however, that the Act is armed at
reducing corruption among participating candidates.
The relevant inquiry thus is whether matching funds
bear a substantial relation to reducing corruption
among participating candidates. In exchange tor
pubhe funding, participating candidates relinquish
their right to raise campaign contnbutions from
private donors. They therefore have both reduced
opportunities and reduced incentives to trade legis-
lative favors for financial favors. The Supreme Court
has held “{ilt cannot be gainsaid that pubhe financing
as a means of eliminating the improper influence of
App. 37
large private contmbutions furthers a significant gov-
ernmental interest.” Buckley, 424 US. at 96.
Viewing the Act from this perspective, it is clear
that the Act’s anticorruption interest is further pro-
moted by high participation in the program. The more
candidates that run with public funding, the smaller
the appearance among Arizona elected officials of
being susceptible to guid pro quo corruption, because
fewer of those elected officials will have accepted a
private campaign contribution and thus be viewed as
beholden to their campaign contributors or as sus-
ceptible to such influence
It is not relevant under this analysis what the
source of a nonparticipating candidates campaign
contributions is when he or she triggers matching
funds. In order to promote participation in the pro-
gram, and reduce the appearance of quid pro quo
corruption, the State must be able to ensure that
participating candidates will be able to mount com.
petitive campaigns, no matter what the source of their
opponent's funding. If matching funds were not
triggered by independent expenditures or expen-
ditures from ao nonparticipating candidate's own
funds, the Act’s public funding plan would not attract
participants. It would be an enormous political risk to
participate in such a system
In this way, matching funds bear a substantial
relation to the State's anticorruption interest. A pub-
he financing system with no. participants does
nothing fo reduce the existence or appearance of quid
App. 38
pro quo corruption. If participants were not given
matching funds, they would not join the program
because they would not be viable candidates in their
elections. If the State were to adopt the district
courts recommendation of structuring matching
funds by tying them “solely to contributions made by
third parties to a candidate,” 1t would have the effect
of deterring the participation of any candidate who
feared she or he might have an opponent who was
able to self-finance or would be the beneficiary of
large independent expenditures. This would substan
tially diminish the Act's ability to attract) parti-
cipants, thereby undermining its ability to prevent
corruption,
19} In contrast, if the Act were to raise the
amount of its lump-sum grants and do away with
matching funds altogether, it would make the Act
prohibitively expensive and spell its doom. By linking
the amount of public funding in individual races to
the amount of money being spent in these races, the
State is able to allocate its funding among races of
varying levels of competitiveness without having to
make qualitative evaluations of which candidates are
more “deserving” of funding beyond the base amounts
provided to all) publically-funded candidates. The
State must walk a fine line between providing too
much and too little funding to participating can.
didates, and we cannot conclude that the Act's
matching funds provision has failed in this effort.
App. 39
Vv. Conclusion
(10) For the reasons set forth above, we
conclude that the matching funds provision of the Act
does not violate the First Amendment. We decline to
reach the equal protection claim, and reverse and
remand to the district court for further proceedings
consistent with this opimon.
REVERSED and REMANDED.
KLEINFELD, Circuit Judge, concurring:
l concur. My reasoning is slightly different. In my
view, the historical and policy considerations do not
matter to the outcome. Although the complaint
asserts both a facial and an as applied challenge, the
district court injunction and the arguments amount
to a facial rejection of the statute.
The fact that matters is that the Arizona public
financing scheme imposes no limitations whatsoever
on a candidate’s speech. Davis v. Federal Election
Commission’ is easily distinguished because there the
scheme did indeed impose a limit on the candidate's
speech, at least indirectly. If the candidate spent too
much of his own money promoting his political
position, then his opponent would benefit from a
tripled contribution limit per donor” The Arizona
scheme does not manipulate the limits on private
“=
* T2RS Ct V7AM POOS)
App. 40
donors’ contributions according to whether a com-
peting candidate is participating in the government
funding scheme. Had it done so, Davis would apply by
analogy.
Other circuits have divided on whether schemes
like Arizona’s violate the First Amendment. The
Supreme Court cited with apparent approval the
Eighth Circuit decision,” which may be contrary to
the view we take today. But as the majority correctly
says, it is not clear that the Supreme Court meant to
adopt the Eighth Circuit view, and Davis did not
require the Court to address a scheme like the one
addressed by the Eighth Circuit.
I doubt that the level of scrutiny or risk of
corruption matter in this case. The Arizona public
financing scheme’s matching funds provision imposes
no limit at all on contributions or expenditures for
one’s own campaign. The limits are separate from the
* Compare N.C. Right to Life Comm. Fund for Indep
Political Expenditures v. Leake, 524 F.3d 427, 437 (4th Cir. 2008)
(holding that matching funds to publicly funded candidates that
trigger based on contributions and expenditures for privately
funded candidates do not impose any burden on First Amend-
ment nghts) and Daggett v. Comm ‘n on Gor'tal Ethics and
Election Practices, 205 F.3d 445, 464 (1st Cur. 2000) (same) with
Day v. Holahan, 34 F.3d 1356, 1360-62 (Sth Cir, 1994) Cholding
that providing additional pubhe funds in response to inde-
pendent expenditures advocating for a privately financed can-
didate burdens the speech of the independent advocacy groups,
subjecting the law to stmet scrutiny, and striking it down)
* Davis, 128 S.Ct. at 2772
App. 41
public financing scheme and not challenged. The
plaintiffs do not challenge the contribution limits.”
Contribution limits are what invoke corruption and
level of scrutiny considerations.
Plaintiffs challenge not contribution limits, but
the benefits that the public financing scheme gives to
participating candidates running against privately
financed candidates and the strategic concerns the
scheme creates for privately financed candidates.
Because the challenged scheme imposes no contri-
bution or spending limits, it does not restrict speech
at all, so 1 cannot see why heightened scrutiny would
apply. All that the evidence shows is that candidates
who forego public funding make strategic decisions in
response to the public funding scheme. That is not a
restriction on speech. Intelligent, ambitious people
seeking political office, or any other goal, are lkely
to study the rules and develop strategies taking
‘ Contribution limits are imposed by Arizona Revised
Statutes § 16-905. Part of the referendum that created Arizona's
public funding scheme alters the contribution limits by pro-
viding new rules for participating candidates, § 16-941(A), and
uniformly decreasing the contribution limits for non-
participating candidates, § 16-941(B) The complaint does not
allege that either § 16-905 or § 16-941 is unconstitutional. It
alleges that § 16-952, the matching funds provision of the
referendum, is unconstitutional Section 16-952 does not impose
contribution limits.
* Accord N.C. Right to Life, 524 F.3d at 437; Daggett, 205
Fd at 464.
* NC. Right to Life, 524 F.3d at 438; Daggett, 205 F.3d at
464.
App. 42
maximum advantage of the rules. The kinds of
strategic choices generated by the Arizona rules do
not differ in kind from the choices presented to
candidates by other election laws. For example,
candidates will run their campaigns differently
according to whether there is a fixed election day or
an extended period for mail-in ballots, at large
elections of multiple candidates in one district or
single winner elections in multiple smaller districts,
or partisan or nonpartisan elections. That different
laws generate different strategies does not make
them restrictions on speech.
The only speech-related concern I can see to the
Arizona scheme is that a privately funded candidate
has to raise a lot more money to swamp a publicly
funded candidate. Someone not serious about politics,
but serious about traveling, eating meals, and seeing
his picture on billboards and in the newspapers for
months, all at taxpayer expense, might pose a
genuine challenge to a privately funded candidate,
unless that candidate could raise funds well beyond
the ceiling in the public funding scheme. If the notion
is that campaign contributions amount to disguised
bribery, I suppose this might mean the Arizona
scheme would promote rather than inhibit corruption.
But it is hard to see the materiality of that because
contribution limits have not been challenged, and all
the corruption theory has been used to justify in First
Amendment law is contribution limits. As for the
privately funded candidate, his or her speech is not
limited by this increased burden of fundraising.
App. 43
Rather, his chances of winning are inhibited if he
makes an incorrect judgment about whether he is
going to be able to raise enough money to swamp the
publicly funded candidate. But the First Amendment
does not protect the candidate's interest in winning,
just his interest in being heard. There is no First
Amendment right to make one’s opponent speak less,”
nor is there a First Amendment right to prohibit the
government from subsidizing one’s opponent,’ espe-
cially when the same subsidy is available to the
challenger if the challenger accepts the same terms
as his opponent."
As for the practical effects of the Arizona scheme,
I have no idea whether they are good or bad, and
nothing in the record throws any light on whether the
good outweighs the bad or vice versa. Intent and
motivation do not show effect, because the unin-
tended effects of reform frequently outweigh the
intended effects. Nor does it matter whether the
scheme is a good or bad one, for First Amendment
purposes. Arizona is entitled to make good or bad
* See Daggett, 205 F.3d at 464.
* Cf. Natl Endowment for the Arts v. Finley, 524 U.S. 569,
587-88 (1998) (holding that the National Endowment for the
Arts may decide who to subsidize based on aesthetic value of
artworks because a subsidy is not a regulation on who can
speak).
" Cf. Rosenberger v. Rector and Visitors of the Univ. of Va.,
515 U.S. 819, 829-30 (1995) (holding that a public university
must make its printing facilities available to all qualifying
student publications regardless of viewpoint).
App. 44
laws so long as they do not violate the Constitution.
Since this law does not limit speech, it does not
violate the First Amendment.
Perhaps public funding is good because it helps
candidates run for office without relying on
contributions from people who will want something in
return. Perhaps it is bad because in a state with a
large electorate and mass media, large contributors
are the only people involved who know a candidate,
and their money gives the public the benefit of what
amounts to quality screening by people who actually
know the candidate. As for the notion that contri-
butions amount to bribery, at least when they are
large, that may be so, or it may be that large
contributions amount to protection money that those
especially vulnerable to government power pay to
those they fear will wield it. Perhaps both, or neither,
is true. Doubtless many contributions result from
contributors’ beliefs about who will provide good
government, and gratitude to those willing to accept
elected office and competent to discharge it well.
None of this matters to this case. The only sig-
nificance of the corruption concern to First Amend-
ment law is that in Buckley v. Valeo, the concern was
used to justify a limit on contributions to campaigns."
Since the case before us does not involve a contri-
bution limit or any other burden on speech, the con-
cern is immaterial.
' 424 U.S. 1, 25-26 (1976) (per curiam), see also Citizens
United v. Fed. Election Comm'n, 130 S.Ct. 876, 901 (2010).
App. to
In sum, the Anzona pubhe financing scheme does
not limat speech directly or indirectly. The only
Supreme Court case touching at all closely upon the
issues is Daows, and Darrs has to be distinguished
because the scheme in that case affected contribution
lamits and this scheme does not. No Ninth Cireuit
case speaks to the constitutionality of the Arizona
scheme or anything lke it. Qur sister circuits are
divided. Accordingly, | conclude that Arizona is not
constitutionally barred from using the scheme before
us
App. 46
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
John MeComuish, et al, ' JUDGQMENTINA
) CIVIL CASE
CV 08-1550 PHX-ROS
Plaintitts,
\
Jan Brewer, et al..
Detendants.
Pursuant to the Court's order tiled on danuary
20, 2010 and upon the Court’s instruction there,
judgment is entered for the Plaintitls and against
Defendants.
JUDGMENT ENTERED this Vist dav of
danuary, 2010
RICHARD Ho WEARE
Dhistmet Court Executive Clerk
s LindaS Patton
By: Deputy Clerk
ec: (all counsel)
App. 47
IN THE UNTPED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
John MeComuish, et al, , No CV-0OS8S-1550- PRIN
tOS
PlaintitYs, ROS
se | ORDER
Jan Brewer. et al.
Defendants.)
This case involves claims by Phuntits that the
campaign finance reg~me adopted by the State of
Arizona violates their tree speech and equal protec
tron rights) In short, Planti¥s beheve the campaign
finance regime violates therr mahts because the state
provides additional funds to publely funded candi
dates ino the event: non-publiely-tunded candidates
exceed certain campaizn expenditure and fundraising
limits. As set forth below, the regime burdens Plain-
tis’ First Amendment mghts, is not supported bv a
compelling state interest, is not narrowly tailored,
and is not the least restrictive alternative
The tour cross motions for summary judgment
were filed in dune 2009. The parties filed responses
and rephes in duly 2009) Beginning in late July, and
continuing through September 2O0Q9, the parties
made various filings regarding supplementing: the
record and submission of supplemental authority. In
October the Court directed additional brmeting on
crucial issues not addressed in the parties’ oruanal
App. 48
submissions. The additional bmeting was not com
plete until mid November In) December 2009 the
parties continued to submut additional lings, and in
January 2OLO Plaintits filed a second motion tor
preliminary ingunetion The Court ordered expedited
briefing on that motion as well as supplemental
bnefing on the appropriate scope of available
remedies
The record in this case is unusually large and
compheated. The summary judgment bnefing con
sists of more than one hundred separate docket en-
tres, many of which consist of multiple documents
and hundreds of pages. Given the compheated nature
of this ease, the Court deemed it prudent to review in
great detiul the parties’ submuisstons before issuing its
ruling This ruling is issued less than two months
after the parties submitted the supplemental bret
nist
.
BACKGROUND
l. Passage of Clean Elections Act
The November L99S election contamed the mtiative
measure Known as the Citizens Clean Flections Act
Act)” According to the tindings and declarations
The Distmet Court hearing: the Docs matter took
approrammately ten months to wsue its opinion, and nm took the
Supreme Court pust under one vear fo issue its opinien
Defendants’ briefing recounts vamous episedes of oot
ruption in Arizena’s state gevernment allegedly leading up to
(Continued on following page)
App. 49
contamed in that initiative, the intent of the Act was
“to create a clean elections system that wall improve
the integrityw of Arizona state government by db
mumshing the influence of special-interest money,
will encourage citizen participation ino the political
Process, and will promote freedom of speech” The
proponents of the Act beheved the election-finaneing
system in effect at that (ime suffered from the eight
flaws that follow
| Allowed “elected officials to accept large cam
paurn contmbutions from private interests over
which they have governmental yurisdiction’;
2 Gave “incumbents an unhealthy advantage
over challengers”;
3 Hindered “communication te voters by many
qualified candidates”,
4. Suppressed “the voices and intluence of the
vast majority of Arivona citizens in favor of a
small number of wealthy special interests’,
S& Undermined *pubhe confidence in the inte
srmitv of pubhe officials”:
G6. Cost “average taxpavers millions of dollars in
the form of subsidies and special privileges for
campaign contributors”,
—~.— -_———.
passage of the Act Plaintiffs conoede the episodes oocurmed, but
disagree that they were the driving foroe fer passage of the Act
From the record presented in the context of what constitutes
admissible evidenoe. itoars impossible to determine the extent to
which the various corruption scandals led to passage of the Act
App. 50
7. Drove “up the cost of running for state office,
discouraging otherwise qualified candidates who
lack personal wealth or access to special-interest
funding”, and
S. Required “elected officials spend too much of
their time raising funds rather than representing
the public”
The voter information pamphlet contained var
lous arguments “for” and “against” passage of the Act
According to the arguments in favor of the Aei, “it’s
money that talks in political campaigns and ou
threatens the principles of our democracy” Also, “lal
thriving svstem depends upon solid governance and
pohewes that benefit all of Arizonans, not pust a tew
who can afford to ‘pay to play’ ” And “[plolls reveal
that a lack of confidence in government is a major
factor” whv individuals choose not to vote. Voting im
favor of the Act would “end the money chase, halt
corruption, limat) campaurm spending and reduce
special interest influence.” Voting in favor of the Act
would also “make sure that no lobbyist or special
Interest can again “buy a candidate as thev are doing
now i
The arguments against the Act in the voter
information pamphlet chamed ia would levy “a host
of new tanes, create!) ao new level of bureaucracy,
' This information as taken from the Ballot: Propositions
Pubhety Pamphlet for the 19988 General Fleetion Available at
http wrew azsos grov cloction 188s Info PubPamphiet Cover html
App 51
provide! | taxpaver funds for fmnge candidates,
punish| | candidates who don't want to use taxpayer
funds, and limuat) |] free speech” The opponents
beheved tax dollars should be saved “tor education
and the safety of [their] children” instead of wasted
on “wacky candidates ~ The Act) passed wath = ap-
proxaumately S1° of the vote
2. Operation of Act
The Act, as currently constituted, provides a
voluntary system of campaign financing in which all
candidates for pubhe office must decide whether to be
a “participating candidate” or ao “non-partreipating
candidate.” Participating candidates must collect a
certain number of five-dollar “qualifving contmbu-
tions.” Onee a partiopating candidate collects the
minimum number of “quahtving contmbutions,” he or
she receives ano initial grant for the primary. During
the primary campaign, the participating candidate
will receive additional funds in the form of “matching
funds” af the participating candidate has ao non.
parhicipating opponent that spends more than the
imtial grant’ The participating: candidate wall also
—_ = — a. -
“Matching funds” are a dellar-tor-dollar match manus oF
meant to compensate for the fundraising expenses muncurnead by
traditional candidates ARS 2 le 9S2A) The parties use the
terms “matching: centmbutrons” and “matching: funds” inter
changeably This opinien wall use matching funds
App. 52
receive matching contributions af there are “indepen
dent expenditures” against the participating can.
didate or in favor of the non-participating opponent
Participating candidates cannot raise or spend money
in addition to the grant
In the general election, a participating candidate
receives a second initial grant. Matching funds are
awarded if the non-partiopating candidate's receipts
(ne. contmbutions), less expenditures made during
the prmarv campaign, exceed the second initial
grant. Independent expendiures trigger matching
funds in the general campaign the same way they
triggered matching funds in the pmmarv campaign
Matching funds cap out at three times the appheable
spending hit Independent expenditures by Political
Action Committees) PACS") made on behalf of a
candidate | non-participating or participating orn
opposition to the participating opponent also count
towards the spending limit
Based on this structure, a candidate is taced with
the initial choree of whether to participate in public
“Independent expenditures” are defined as “expenditures
by a person or political oommittee, other than a candidate's cam
pain committee, that eapressly advocates the election or defeat
of a clearly identified candidate, that is made without ooop
eration or ocensultation with any candidate or committee or
agent of the candidate and that is not made in cencert with or at
the request or suggestion of a candidate, or anv committee ot
agent of the candidate "A RS § 16901 14)
Political Action Committees are groups oenganized “for the
purpose of influencinp: the mesult of any election “ARS 16-901
App. 53
funding. If the candidate decides not to participate in
publie funding, he or she must determine how much
money to spend on the race and how much time to
engaged [sic] in seeking fundraising. Assuming the
candidate has a pubhely funded opponent, the can-
didate’s expenditures and fundraising: may result on
addivional funds granted to that opponent Those
additional funds, however, are limited) Once a non-
participating candidate has raised or spent more than
three times the initial grant, no additional matching
funds will be given to the participating opponent
Simply, there are no Consequences onee a Tone par
tioapating candidate has raised or spent more than
three times the mnitial grant
3. Participation in and Consequences of Act
The Act has been in place for the past five
elections Since 2002, candidate participation has
varied between S250 and 67°C. (Doe. 298 at 3) The
parties disagree on whether the Act has had an
Impact on total campaign spending. It is undisputed
that campaign spending has increased since the Act's
passage, but itis unclear whether that increase can
be traced to the Act) The parties also disagree on
whether candidates’ spending patterns show the Act
has any effect on candidate behavior Defendants
assert the spending patterns of candidates prove the
Act has no chilling effect. According to Defendants, if
The Act applies toe ections for statew nde offic *s
App. 4
the Act truly is chilling speech, one would expect to
find candidates spend just up to but no more than the
spending limit In other words, candidates would
attempt to spend the maximum amount they are able
to spend without triggering matching funds Agyre-
gate statistics show candidates do not do so. But this
evidence does not dispose of Plaintiffs’ claims that
their speech was chilled and will be chilled. For
example, some of the Phuntifls triggered matching
funds. Those individuals now claim they would have
spent more or spent ata different time if matching
funds were not a possitihty” Accordingly, the evi
dence regarding candidate spending does not
definitively establish a chilling effect. or lack thereof
4. Plaintiffs’ Statements Regarding Bur-
den of Act
Plaintrt¥s and Plaintiff! ntervenors are incum.
bents, past or future candidates for office, and Pohl
tical Action Committees (CPACS™) Plaintiffs were
asked during discovery to explain how the Act bur
dens their mghts. Plaintiffs’ testimony is somewhat
scattered and shows only a vague interpretation of
the burden of the Act. Evidence regarding each
Plaintit?:s recounted below
* Other Phontitls did not spend enough to trymer matching
funds, and it does net appear that they stopped spending just
short of the pant where matehing tunds would be awarded
App oa)
a. John McComish
Plaintut? John MeComish is a member of the
Arizona State House of Representatives who plans on
running for reelecuion in) 2010) In 2008, Mr
MecComush ran as a non-participating candidate. (Doe
316) In the 2008 election, Mr. MeComish had at least
three participating opponents. Those opponents
received matching funds based on Mr. MeComush’s
expenditures as well as expenditures by third parties
Mr MeComish claims the Act requires him to take
steps to minimize the impact of matching funds. Mr
MeComush does this “by refraining from making cam.
payrn expenditures that [he] would otherwise make
oor by adopting a tactic of delaying [his!
expenditures in such a manner as to minimize the
benefit anv participating candidate may receive from
matching funds.” This, according to Mr. MeComish,
“amounts to self-censorship because {he} wall refrain
from engaging mm communication at times and in
manners that [he] would otherwise choose in order to
avoid disseminating viewpoints that are hostile to
thas} candidacy.” Ud. at 5)
Mr. MecComish also beheves matching funds
“discriminate against traditional candidates.” (Doe
316 at 5). This “discrimination” allegedly occurs when
a non-partioopating candidate triggers matching funds
to his opponents. The Court is unable to conceive of
how an award of matching funds “discriminates”
against McComish. Discrimination in a general sense
requires that two individuals or groups be treated
differently by the government. Mr. MeComush and the
App. 56
other Plaintiffs mentioned below have not explained
how they have been legally disfavored bv the
government ino comparison to — participating
candidates
b. Nancy McLain
Plaintif!? Nanevy MeLain is a member of the
Arizona House of Representatives and plans on run
ning tor reelection in 2010) During the 2008 primary
election, Ms. McLain triggered the award of matching
funds to an opponent. (Doe. 317 at 4). Independent
expenditures, allegedly aiding Ms. MeLain, triggered
additional matching funds. During the most recent
general election, Ms. MeLain had two participating
opponents. The presence of these opponents made her
“reluctant to fundraise. . or personally contribute or
loan money to [her] campaign.” Ms. MeLain did not
trigger matching funds for the general election. In the
future, Ms. McLain plans on minimizing her fund-
raising and spending, or altering the mode of her
fundraising and spending, to lessen the impact of any
matching funds. Thus, matching funds allegedly
require that Ms. McLain engage in “self-censorship.”
Like Mr. MeComish, Ms. MeLain claims match-
ing funds constitute a “discmmuinatory legal frame
work.” Again, it is unclear what type of diserim-
ination Ms. McLain believes is at issue.
App. 57
c. Tony Bouie
Tony Bowe is a non-participating candidate for
the Arizona House of Representatives. During the
2008 primary campaign, Mr. Bouie had participating
and non-participating opponents. Mr. Bowie and his
non-participating opponent both exceeded the spend-
ing limit during the primary campaign. Thus, the
participating opponent received matching funds. Mr.
Boure claims his “speech was chilled from the
moment [he] understood the general idea of matching
funds.” (Doc. 318). Mr. Boule ceased “the promotion of
[his] campaign and [held his] campaign speech until
[his] expenditures could be timed” to minimize the
impact of matching funds provisions.” The Act caused
Mr. Bouie to “self-censor until the last days of the
election rather than sending out mailers, making
auto calls, and passing out information door-to-door.”
d. Dean Martin
Dean Martin is the current Arizona State
Treasurer and was elected to the State Senate in
2000, 2002, and 2004. (Doc. 288-2 at 4). In each of his
campaigns, Mr. Martin ran as a non-participating
candidate. Mr. Martin claims during his most recent
campaign he “was forced to limit [his] speech and
abide by the Act’s expenditure limits or risk being
* Delaying expenditures as much as possible minimizes the
impact of matching funds because the participating opponent
will not have time to spend the matching funds
App. 58
further outspent by [his] government-funded oppon-
ent because of the operation of the Act.” (Doc. 288-6 at
113). Mr. Martin states “|tJhe only way [he] could
avoid being massively outspent by [his] opponent was
to prevent the triggering of additional matching
funds to [his opponent's] campaign.” (Jd. at 114).
Thus, Mr. Martin “stopped accepting contributions to
[his] campaign.” Ud.). Mr. Martin triggered a
relatively small amount of matching funds in the
2006 State Treasurer race. (Doc. 362-1 at 22).
Despite Mr. Martin’s statement that matching
funds forced him to limit his speech, and the fact that
Mr. Martin triggered matching funds in 2006, Mr.
Martin was unable during his deposition to recall
whether he had ever triggered matching funds. (Doc.
309-8 at 3). It follows that if matching funds were a
serious concern, Mr. Martin would know whether he
had triggered such funds. Mr. Martin also testified he
has supported legislation to repeal the Act, and his
opposition to matching funds is based, at least in
part, on the provision that if you accept government
funding “you're not allowed ... to support your own
campaign over a certain amount.” Ud. at 9). Thus, it
appears that Mr. Martin’s real focus has been on
public funding of elections in general, and not
matching funds in particular.
e. Robert Burns
Robert Burns is an Arizona State Senator. Mr.
Burns was first elected in 2002, was reelected in
App. 59
2008, and plans on running in the 2010 election. (Doe.
28s-6 at 91). During the 2008S campaign, Mr. Burns, a
non-participating candidate, exceeded the matching
funds threshold. (Doe. 354 at 7) He claims “the
existence of matching tunds coerces traditionally
funded candidates into changing their message and
the timing of getting out their message, even if
ultimately the amount of messaging a traditional
candidate chooses to engage in does not change.”
But Mr. Burns’ deposition seems to indicate that
matching funds have had little to no umpact on his
campaign activities. For example, Mr. Burns was
unable to state whether he had reduced his campaign
communications because of the possibthty of trig
gering matching funds. (Doc. 309-11). In fact, some of
his testimony seems to indicate Mr. Burns simply
communicated his message to the extent he felt
necessary to win, (Doe. 309-11 at 5 “If T had to spend
X number of dollars to get out a— a maaler, and | had
that amount of money, | would go ahead and do the
mailer”),
f. Rick Murphy
Rick Murphy ts an Arizona State Representative
Mr. Murphy was elected to the Arizona House in 2004
and was reelected in 2006 and 2008. Mr Murphy
accepted pubhe funds in 2004 but ran as a non-
participating candidate ino the 2006) and 2008
campaigns. Mr. Murphy now clams he was coerced
into accepting public funding for the 2004 campaign,
App. 60
but the record does not provide an explanation of this
coercion.” During the 2006 campaign, Mr) Murphy
claims he “curtatled [his] speech and curtailed [his]
fundraising in order to prevent [matching tunds|].”
(Doe. 862-1 at 79)
g. Arizona Free Enterprise Club's Free-
dom Club PAC
The Arvzona Free Enterprise Club's) Freedom
Club PAC (Freedom Club PAC") “is a Candidate Sup
port or Opposition Committee.” (Doe. 288-2 at 6). The
Act allegedly harms the Freedom Club PAC because
matching funds are triggered when i speaks out in
favor of certain candidates. (Doc. 288-2 at 21) But
the Freedom Club PAC does not make independent
expenditures. (Doc. 862-1 at 83). The Freedom Club
PAC contributes to Arizonans for a Sound Economy,
another PAC, and uwois this entity which actually
expends funds. The Freedom Club PAC’s treasurer
stated matching funds have never prevented it from
spending money, but matching funds allegedly have
altered the timing of certain expenditures. (Doe 362
Lat SS).
Acoording te one of Mr Murphy's campanin consultants,
Mr Murphy was not owerced inte accepted publre tanding in
tact, the consultant believes Mr Murphy “would not have been
elected [in 2OO4) 1f Clean Elections did not exist 7 The consultant
reached this opimon because Mr Murphy was not an incumbent
and did net having [sie) the contacts necessary to independently
raise funds (Doe S09-9 at 8)
App. 61
h. Arizona Taxpayers Action Committee
The Amzona Taxpavers Action Committee
CATAC™) is an Independent Expenditures Committee
that was organized in 2006. It chamms ut “did not speak
In opposition to a publiely funded candidate in the
Mistmet Ll Senate primary race to avoid triggering
matching funds to that candidate.” (Doc. 28SS-2 at 7)
Defendants counter that the evidence shows no such
abstention occurred. Instead, the decision net to
spend money was based on the tact ATAC had no
money to spend. (Doc. 354 at 9) Based on the
unrehable and conflicting evidence, the Court cannot
determine which side is presenting the more accurate
pret? re
ANALYSIS
l. Procedural History
The Court) previousiv demed Plaintitts’ apph
cations for a temporary restraining order and a pre
hminary ingunction. (Doe 80, 185) In the ruling
denying the preliminary injunction, the Court found
that the Clean Elections Act “imposes a substantial
burden on the First Amendment right to use personal
funds for campaign speech” (Doe) ISS at 10) The
Court also found Defendants had not established a
The poor rulings did not address the precise nature of
the burden allegedly imposed upon Plaintiffs As explored below
identifving the burden is more diffeult than that alluded to by
the prior ruliunyes
App. 62
compelling state interest pustitving that burden (Doe
ISS at 14) The prehminary injunction was denied,
however, because of the “extraordinary balance of the
harms required in the context of an ongoing election ”
(Doe. ISS at 18) The parties have now completed
discovery and have filed motions for summary judy
ment
ll. Standard For Summary Judgment
A court must grant summary judgment uo the
pleadings and supporting documents, viewed in the
light most favorable to the non-moving party, “show
that there is no genuine tssue as to anv material tact
and that the moving party is entitled to a judgment
as a matter of law” Fed Ro Cin Po S6te) The parts
opposing: summary judgment “may not rest upon the
mere allegations or demials of [the party's! pleading,
but must set forth specitic tacts showing that
there is a genuine issue for trial” Fed) RoCiv BP deve!
lll. Proper Standard of Review
The first disagreement between the parties is the
proper standard of review According to the Ninth
Cireuit, if the Act “places a severe burden on fully
protected speech and associational freedoms.” the
court must apply street scrutiny, lanco’n Clad of
Orange County oo Crtv of Trvine, 292 F38d 934, 938
(Mth Cir VOOR) But af the Act “places only a minimal
burden on fully protected speech and assomational
freedoms, or if the speech and associational freedoms
App 638
are not fully protected under the First Amendment,
\courts| apply a lower level of constitutional scrutiny ”
fd) Thus, the proper standard of review depends upon
two inquimes. First, what type of speech is at issue”
And second, us that speech bering burdened”
A. Type of Speech
Based on longstanding Supreme Court precedent,
there is an important distinction between contribu
tions and expenditures Contmbutions are not con
sidered “to be fully” protected) political speech”
Lincoln Club of Orange County, 292 F3d at 938
Instead, “contmbutions are merely speech by proxy.”
and do not merit full protection Jd Expenditures,
however, are recognized as fully” protected speech
Candidates have a “First Amendment raght to engage
in unfettered political speech.” such as the expen
diture of their) personal funds . oe tv. Bederal
Blection Comm'n, 128 8S Ct. 2759, 2NV1 (2008). Thus,
if the Act is seen as burdening contmbutions, it wall be
subject to a lower level of SCTULINA, uothe Act is seen
as burdening expenditures, it will be subject to a
higher level of scrutiny; and if the Act is seen as a
burden on both expenditures and contributions, the
higher level of serutiny is appropriate. Lincoln Claud
of Orange County, 292 F3d at 988 Capplving strict
scrutiny to provision reyrulating both contributions
and expenditures |
Defendants argue the Act “is fundamentally a
restmetion on contributions ” (Doe S82 at 6) This is
App 64
an oversimplification. For a primary campairn, mat
ching contributions are expheitiy tied to a candidate's
“expenditures ” While those expenditures might con
sist of a candidate spending contmbutions from third
parties, iors possible for ao candidate to) trigger
matching funds during the primary based on his or
her expenditure of personal tunds) For the general
campaign, matching tunds are dependent on “eontm
butions,” but the expenditure of personal funds is also
defined as a “contmbution.” Accordingly, the Act has
the ability, if not alwavs the effect, of regulating
expenditures ain both the prmarv and general
campaigns The Act's burden must be evaluated in
terms of potentially affecting “fully protected speech.”
Lincoln Club of Orange County, 292 F.8d at 93s
B. Level of Burden
According to Phuntitfs, matching funds place a
“drag on campaign speech.” (Doe 297 at 19) That
drag is present because “Matching Funds cause the
Vigorous exereise of First Amendment ryrhts by Plain
Uitls, political action committees and their supporters
to produce fundraising advantages for their opposing
yovernment-subsidized candidates ™ (Jd) In other
words, Plaintiffs allege they will refrain from raising
funds or spending their personal momes to prevent
participating candidates from. receiving matching
tunds This, according to Plarntifts, is a severe burden
on therr free speech myhts Plainutls’ argument relies
in large part on the Supreme Court's recent decision
, . . J . .
Flection Cormimission, TS Sct
in Davis > Federu!
App 6o
9759 OOS) While Daors is unstructive, it does not
answer the precise question now before the Court
In Daces, the Supreme Court addressed the so
called “Milhonaire’s Amendment” contained in the
tederal Bipartisan Campaign Reform Act of 2e0L
According: to that amendment, when a candidate's
expenditure of personal funds exceeded $350,000, the
candidate's opponent became eligible to accept contr.
butions from individuals at treble the normal limit
The opponent also became elygible to accept unlimited
“coordinated party expenditures.” oe expenditures by
national or state political party committees. The
Supreme Court concluded the amendment “requires a
candidate to choose between the First Amendment
right to engage in unfettered political speech and
subjection to discriminatory fundratsing Limitations ~
The discriminatory fundraising limitations const.
tuted the “special and potentially significant burden”
of confermng aio “fundraising advantage | fer op:
ponents im the competitive context of clectoral
ld at a i
politics
In some respects the burden PlaintitYs allegedly
suffer in this case is analogous to the burden in
Dares PlaintatYs submit evidence that they have felt
“chilled” and that but for the matching provisions
they would have spent or will spend more money on
campaigns Thus, it appears that in Plaintiffs’ view,
the “burden” is that an exercise of theur First Amend,
ment ratht to spend as much as they wish wall re:
sult in Anvona confermng an additional benefit: on
App Oo
pubhely-financed candidates. Those candidates pre
sumably will spend the matching funds, 2 e¢ generate
more speech. In other words, the “burden” created by
the Act is that Plaintiffs’ speech wall lead directly to
more speech. Given that the purpose of the First
Amendment is to “secure the widest possible dissem
ination of information from diverse and antagonistic
sources,” it seems illogieal to conclude that the Act
creating more speech is a constitutionally prohibited
“burden” on Plaintitts Buckley oo Valeo, 424 US) 1,
49
Another strange aspect of the alleged burden ts
that pubhe finanemngy of elections is permitted by the
Constitution If the Act provided tor a single lump
sum award, instead of incremental awards, the haw
would fall squarely within the reguime blessed in
Buckley and reatirmed in Docis) Presumably the Act
would also be permissible if the incremental awards
were linked to some occurrence other than a non
pubhiely financed candidate's speech. Thus, Plaiuntitts
are Jeff to argue their First Amendment rights are
violated not by the fact of pubhe financing, or the
level of that financing, but by the fact that Arnivona
provides incremental grants linked to their activities
If a single lump sum award” would not) burden
Based en the practical realitres, thas entire case only
makes sense under the assumption that single lump sum
awards are not fiscally possible No rational candidate would
preter a system whenon his opponents receme the maximam
awand in a siygle lump sam instead of rncremental awands
App 6;
Plaintitls’ free speech mahts min anv cognizable way,
finding a burden solely because of the incremental
nature of the awards seems difficult to establish
Despite the unsetthng nat
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