Petition for Writ of Certiorari — Citizens for Clean Government v. Russell

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No. 98 399 SEP 2-1

OFFICE OF -PHE-CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1997

TROY BURRIS, in his official capacity as chairperson

of the Arkansas Ethics Commission and

JACK KEARNEY, TOM ALEXANDER,

RITA LOONEY, and BEN ALLEN, in their official

capacities as members of the Arkansas Ethics

eee Petitioners

and CITIZENS FOR CLEAN GOVERNMENT... /ntervenor

Vs.

RON RUSSELL, KFNT INGRAM, WILLIAM R.

AUSTIN, and ASSOCIATED INDUSTRIES OF

ARKANSAS POLITICAL ACTION

COMBINTTER ... oc ceccvscsusindesnsccmeneueel Respondents

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

J. WINSTON BRYANT

Attorney General*

SHIRLEY E. GUNTHARP

Deputy Attorney General

BRIAN G. BROOKS

Assistant Attorney General —

323 Center Street, Suite 200

Little Rock, AR 72201-2610

(501) 682-2007

Attorneys for Petitioners

*Counsel of Record \ NV

QUESTION PRESENTED FOR REVIEW

__ WHETHER ARKANSAS’ $100 AND $300 PER ELEC-

TION PER CANDIDATE CONTRIBUTION LIMITS —

TO CANDIDATES, ITS $200 ANNUAL CONTRIBU-

TION LIMIT TO APPROVED POLITICAL ACTION

COMMITTEES, AND ITS $2,500 PER CANDIDATE

PER ELECTION CONTRIBUTION LIMIT FROM

SMALL DONOR POLITICAL ACTION COMMIT-

TEES TO CANDIDATES VIOLATE THE FIRST

AMENDMENT OR THE FOURTEENTH AMEND-

MENT TO THE UNITED STATES CONSTITUTION.

LIST OF PARTIES

_ The parties to this case are as follows. The petitioners

are Troy Burris, Chairman of the Arkansas Ethics Commis-

sion, Rita Looney, Tom Alexander, Ben Allen, and Jack

Kearney, Arkansas Ethics Commissioners. The respon-

dents are three individuals and a political action committee,

Ron Russell, Kent Ingram, William R. Austin, and the As-

sociated Industries of Arkansas Political Action Committee.

The intervenor below was an organization known as Citizens

for Clean Government.

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW ............ i

EL Dalkis UDG CGU84 Covbdesdb'esescceess ii

— . oo) eer iii

EE iT SERED «nc cnccccccrcccaceconss V

OPINIONS DELIVERED BELOW .................. 2

GROUNDS UPON WHICH

JURISDICTION IS INVOKED.................. 2

STATUTORY PROVISIONS INVOLVED........... 3

APR RMIMBEEIN EE COE EREES CASE. 2... ncccccrcccsvcsees 6

REASONS FOR GRANTING THE WRIT........... 11

I. This Court should grant the writ because

the Eighth Circuit decided an important

federal question in a way that conflicts

with relevant decisions of this Court............ 11

1. The Eighth Circuit’s holding regarding

the $100 and $300 limits on contribu-

tions to candidates conflicts with Buckley ...... 11

2. The Eighth Circuit’s holding regarding

the $200 limit on contributions to PACs

conflicts with this Court’s holding in

EO Gee 17

TABLE OF CONTENTS

3. The Eighth Circuit’s holding regarding

the small donor PAC limit conflicts with

this Court’s precedent in Cal-Med.......... 19

II. The Court should issue the writ to

determine the important federal

question whether additional interests

can support campaign finance reform........... 21

1. Protecting the equal protection

rights of voters and candidates............. 21

2. Protecting the first amendment

rights of voters and candidates............. 24

3. The PAC limit ensures that aggre-

gation of wealth indicates popular

RG a 05a 0's CeO bRe dN aed a SeRLG sa Kabah 26

SAIS bo 0535 oe Suck SANSA DRESS Oe SU KKES REA 28

APPENDIX A Opinion of the Eighth

Circuit Court of Appeals.................. A-1-A-21

APPENDIX B Opinion of the United States

District Court for the Eastern District

Saha ianabtgenates ti Rates EP ek gan piace, eran B-1-—B-38

TABLE OF AUTHORITIES

CASES Page |

Austin v. Michigan Chamber of Commerce,

ee ess ce naan 0s 0:0 endl 26

Buckley v. Valeo, 424 U.S. 1 (1976) .............45. passim }

Bullock v. Carter, 405 U.S. 134 (1972) .........ccee0ee. 22

California Medical Association v. Federal

Election Commission, 453 U.S. 182 (1981)...... passim

Carver v. Nixon, 72 F.3d 633 (8th Cir. 1995),

cert. denied, 116 S. Ct. 2579 (1996) ................ 14

eS ee ee “ ee

Day v. Holohan, 34 F.3d 1356 (8th Cir. 1994),

cert. denied, 513 U.S. 1127 (1995) ................ 19

Eu v. San Francisco Democratic Committee,

ES os heap cn cobb owees dens ve 25

NE ed a eee Pee

Federal Election Commission v. Massachusetts

Citizens for Life, 479 U.S. 238 (1986) ............. 26

First National Bank v. Belotti, 435 U.S. 765 (1978) ...... 25

Flagg Brothers v. Brooks, 436 U.S. 149 (1978) .......... 21

Morse v. Republican Party of Virginia,

ee rrr 22

New York Times v. Sullivan, 376 U.S. 254 (1974) ....... 25

TABLE OF AUTHORITIES

CASES Page

Nixon v. Condon, 286 U.S. 73 (1932) .....0..eesseeeee 22

Nixon v. Herndon, 273 U.S. 536 (1927) ....... 2.00005. 22

Renton v. Playtime Theatres, Inc., 475 U.S. 41 (1986) . . . 16

Reynolds v. Sims, 377 U.S. 533 (1964) ......0..00se0e- 24

Rosentiel v. Rodriguez, 101 F.3d 1544

(8th Cir. 1996), cert. denied,

eye , reer reer er eee 16

Russell v. Burris, 146 F.3d 563 (8th Cir. 1998) ........... 2

Russell v. Burris, 978 F. Supp. 1211 (E.D. Ark. 1997) ..... 2

Smith v. Allright, 321 U.S. 649 (1944) .............006- 22

Tashjian v. Republican Party of Connecticut,

wie gi | BREE od ae ee 25

Terry v. Adams, 345 U.S. 461 (1953) .............005- 21

CONSTITUTIONS AND STATUTES

Oe. ent, PA, 8k passim

US. Comet Assos: 446 1.0.3 aes A IT AS 2

Se ee US TE i ob ck. oo b's ce ba 0 ba bees teen 24

OR is BO eR A 5 aa vclecudceauaaacaseavubpesune 6

———oe

vii

TABLE OF AUTHORITIES

STATUTES Page

PE, TE PPE cc cov evcovsesucacesesecsces 4 |

Ark. Code Ann. § 7-6-201(9)(B) ............... ce eee 5

Ark, Code Am. § T-G-BOICIZ) oo cc cccccccvcccecccs 4

TE PE a ns 00 seccbeccavsebesieseses 7

Ark. Code Ann. § 7-6-203(a)(1) & (2) ......ceeeeeeees 3

Ark. Code Ann. § 7-6-203(b)(1) & (2) ...........4.. 3,4

sb | ene 4

EE Sb ee 7 —

FE PUNE TOMER « sycccckacisdsaccsecteecees 7

OTHER SOURCES

Institute for Southern Studies, Press Release,

New Study Names "Dismal Dozen" for a

Poor Voter Turnout, Poor Laws, Feb. 4, 1993...... 23

Jamin Raskin and John Bonifaz, Equal

Protection and The Wealth Primary,

11 Yale L. & Pol’y Rev. 273 (1993) ............... 22

No.

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1997

TROY BURRIS, in his official capacity as chairperson

of the Arkansas Ethics Commission and

JACK KEARNEY, TOM ALEXANDER, .

RITA LOONEY, and BEN ALLEN, in their official

capacities as members of the Arkansas Ethics

Ere cata eee ete ery ae ek ree Petitioners

and CITIZENS FOR CLEAN GOVERNMENT ..... Intervenor

VS.

RON RUSSELL, KENT INGRAM, WILLIAM R.

AUSTIN, and ASSOCIATED INDUSTRIES OF

ARKANSAS POLITICAL ACTION

IN CASS Guiana ccnskeed Condcecavis Respondents

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Petitioners Troy Burris, in his official capacity as chair-

man of the Arkansas Ethics Commission, and Jack Kearney,

Tom Alexander, Rita Looney, and Ben Allen, in their offi-

cial capacities as members of the Arkansas Ethics Commis-

sion, respectfully petition for a writ of certiorari to review

the decision of the United States Court of Appeals for the

Eighth Circuit in this case.

)

;

OPINIONS DELIVERED BELOW

The opinion of the Eighth Circuit Court of Appeals is

reported at 146 F.3d 563 (8th Cir. 1998) and is printed in its

entirety in Appendix A. The opinion of the United States

District Court for the Eastern District of Arkansas, Western

Division, is reported at 978 F. Supp. 1211 (E.D. Ark. 1997)

and is printed in its entirety in Appendix B.

GROUNDS UPON WHICH

JURISDICTION IS INVOKED

The opinion of the Eighth Circuit Court of Appeals was

delivered on June 4, 1998 (See Appendix A). This petition

is filed within the time allowed by law. The jurisdiction of

this Court is invoked pursuant to 28 U.S.C. $1254 (1).

CONSTITUTIONAL PROVISIONS INVOLVED

The First Amendment to the United States Constitution

reads:

Congress shall make no law respecting an establishment

of religion, or prohibiting the free exercise thereof; or

abridging the freedom of speech, or of the press; or of

the right of the people peaceably to assemble, and to

petition the government for a redress of grievances.

Section one of the Fourteenth Amendment to the

United States Constitution reads:

All persons born or naturalized in the United States, and

subject to the jurisdiction thereof, are citizens of the

United States and of the state wherein they reside. No

state shall make or enforce any law which shall abridge

the privileges or immunities of citizens of the United

States; nor shall any state deprive any person of life,

liberty, or property, without due process of law; nor deny

to any person within its jurisdiction the equal protection

of the laws.

STATUTORY PROVISIONS INVOLVED

Arkansas Code Annotated §§ 7-6-203(a) and (b) read as

follows:

(a)(1) It shall be unlawful for any candidate for any

public office, except the office of Governor, Lieutenant

Governor, Secretary of State, Treasurer of State, Audi-

tor of State, Attorney General, and Commissioner of

State Lands, or for any person acting on the candidate’s

behalf, to accept campaign contributions in excess of one

hundred dollars ($100) per election from any person. )

(a)(2) It shall be unlawful for any candidate for the office

of Governor, Lieutenant Governor, Secretary of State,

Treasurer of State, Auditor of State, Attorney General,

and Commissioner of State Lands, or for any person

acting on the candidate’s behalf, to accept campaign

contributions in excess of three hundred dollars ($300)

per election from any person.

(b)(1) It shall be unlawful for any person to make a

contribution to a candidate for any public office, except it

the office of Governor, Lieutenant Governor, Secretary

of State, Treasurer of State, Auditor of State, Attorney

General, and Commissioner of State Lands, or to any

person acting on the candidate’s behalf, which, in the

aggregate, exceeds one hundred dollars ($100) per elec-

tion.

IS aD SEMIN Bis RNS aa ee aca

(b)(2) It shall be unlawful for any person to make a

contribution to a candidate for the office of Governor,

Lieutenant Governor, Secretary of State, Treasurer of

State, Auditor of State, Attorney General, and Commis-

sioner of State Lands, or to any person acting on the

candidate’s behalf, which, in the aggregate, exceeds

three hundred dollars ($300) per election.

Arkansas Code Annotated § 7-6-203(d) reads as follows:

(d) However, an organized political party as defined in

Arkansas Code 7-1-101(1) and a small donor political

action committee may contribute up to two thousand five

hundred dollars ($2500) to each candidate per election.

Arkansas Code Annotated § 7-6-201 reads in pertinent

part:

12) A "small donor political action committee" means

any person who: (A) Receives contributions from one

or more individuals in order to make contributions to

candidates; (B) Does not accept any contribution or

cumulative contributions in excess of twenty-five dollars

($25) from any individual in any calendar year; and (C)

Is registered pursuant to Arkansas Code 7-6-215 prior to

making contributions to candidates. "Small donor politi-

cal action committee" shall not include an organized

political party, the candidate’s own committee, or an

exploratory committee.

Arkansas Code Annotated § 7-6-201(9) reads in perti-

nent part:

"Approved political action committee" means any per-

son who:

(B) Does not accept any contribution or cumulative

contributions in excess of two hundred dollars ($200)

from any person in any calendar year. ...

}

;

STATEMENT OF THE CASE

This case presents a challenge to elements of Arkansas’

campaign finance and ethics laws. The petitioners (Com-

mission) are the Arkansas Ethics Commissioners in their

official capacities. The Commission is charged with admin-

istering and enforcing Arkansas’ campaign finance and dis-

closure laws. It also investigates alleged violations of these

laws. The defendant-intervenors below (intervenors or

Citizens) are the Citizens for Clean Government. See Ap-

pendix B. The issues and arguments advanced here were

raised by the Commission in the district and circuit courts.

The respondents are three individuals and an approved

Arkansas political action committee (PAC). Ron Russell is

Executive Vice-President of the Arkansas State Chamber of

Commerce and the Associated Industries of Arkansas, Kent

Ingram is a businessman and former state senator, and

William R. Austin is a businessman. Mr. Russell and Mr.

Ingram are officers of the State Chamber PAC; Mr. Russell

and Mr. Austin are officers of the Associated Industries of

Arkansas Political Action Committee (AIAPAC). The

AIAPAC, the PAC plaintiff, is an approved PAC. Appendix

The respondents filed suit in the United States District

Court for the Eastern District of Arkansas, Western

Division, pursuant to 42 U.S.C. § 1983. They alleged that

provisions in Arkansas’ law violate either the First Amend-

ment or the Equal Protection Clause of the Fourteenth

Amendment to the United States Constitution. Principally,

the plaintiffs challenged select portions of Arkansas’ In-

itiated Act I of 1996. Act I holds that contributions to

candidates for political office shall not exceed $300 for

constitutional offices’, and $100 for all other offices per

candidate per election. Ark. Code Ann. § 7-6-203. The

previous limit was $1,000 per candidate per election.

Act I also established public subsidies for campaigns by

allowing individuals a $50 per year tax credit and married

couples a $100 per year tax credit for contributions to politi-

cal campaigns, parties or PACs. Ark. Code Ann. § 7-6-222.

It in addition created small donor PACs that are funded by

contributions of no more than $25 per year per contributor

with contributions limited to individuals only, but that may

contribute up to $2,500 per election per candidate. Ark.

Code Ann. § 7-6-201, 203(d)*.

The respondents attacked each of these measures except

for the tax credit. They alleged that Act I’s contribution

limits offend the First Amendment. They also alleged that

the equal protection clause of the Fourteenth Amendment

is violated by allowing Small Donor PACs to contribute

$2,500 per candidate per election while limiting approved

PACs to $100 and $300 contributions. The respondents also

attacked one provision that is outside the measures enacted

in 1996. Since 1991, Arkansas has limited contributions to

approved PACs to $200 per person per year. Ark. Code

Ann. § 7-6-201(9)(B). The respondents challenged this limit

as a violation of their First Amendment rights.

Those offices are Governor, Lieutenant Governor, Secretary of

State, State Treasurer, State Auditor, Attorney General, and Commis-

sioner of State Lands.

2Act I also created independent expenditure committees and limited

the amount that may be contributed to them to $500 per person per year.

Ark. Code Ann. § 7-6-220(a). The respondents lacked Article III standing

to pursue their challenge to this measure.

This case was tried to the bench in a seven-day trial. In

its October 3, 1997, opinion, the trial court enjoined the

$300 limit on contributions to constitutional officers. Ap-

pendix B The trial court also enjoined enforcement of the

Act as applied to Justices of the Arkansas Supreme Court

and Judges of the Arkansas Court of Appeals who are

elected by popular vote. Those offices were subject to the

$100 limit under Act I.

The trial court upheld the $100 limit on contributions to

all other candidates. It also upheld Act I’s small donor PAC

provision holding that Act I does not discriminate against

approved PACs to any greater degree than it does small

donor PACs. Finally the trial court upheld Arkansas’ long-

standing limitation on contributions to approved PACs.

The respondents appealed the trial court’s decisions on

the $100 limits, small donor PACs, and approved PACs. The

petitioners and intervenors cross-appealed the court’s hold-

ings regarding the $300 limit and the $100 limit as applied

to Justices and Judges of the Court of Appeals. On June 4,

1998, the Eighth Circuit Court of Appeals issued its opinion

striking down Act I’s candidate contribution limits in their

entirety as well as the small donor PAC limit and the limit

on contributions to approved PACs.

In its opinion, the Eighth Circuit first held that Arkansas

contribution limits must survive the strictest level of judicial

scrutiny. Thus, the limits would only pass muster if they were

supported by a compelling state interest and were narrowly

tailored to meet that interest. Appendix A at A-7. The

Eighth Circuit then held that only one interest is compelling

in this context: "the prevention of corruption and the ap-

pearance of corruption spawned by the real or imagined

coercive influence of large financial contributions on

candidates’ positions and on their actions if elected to of-

fice." Appendix A at A-9 [quoting Buckley v. Valeo, 424 U.S.

1, 25 (1976)]. The Eighth Circuit applied this basic reason-

ing to all three contribution limits at issue; candidate con-

tribution limits, approved-PAC contribution limits and

small donor PAC contribution limits.

The Eighth Circuit found that the Commission failed to

meet this standard. It did so first with respect to the $300

and $100 limit on contributions to candidates. While the

Commission had argued that evidence of perceived corrup-

tion was present, the Court rejected those arguments. It

reasoned that the Commission’s evidence did not show that

any office holder or candidate had changed his position

following a contribution or had sought to conceal a contribu-

tion, and there were no exorbitant multi-million dollar con-

tributions in evidence. Thus, a reasonable person would not

perceive any undue influence or corruption. The court also

rejected the Commission’s argument that corruption or its

appearance could be inferred from contributions in excess

of the $300 and $100 limits given Arkansas’ low level of

campaign finance. The Eighth Circuit also held that the

limits at issue were not narrowly tailored. According to the

court, given inflation, the limits at issue were simply too low

to allow for meaningful participation in the elective process

and vigorous advocacy.

The court next addressed the $200 limit on contributions

to approved PACs. Ii held that the limit was so low, as a

matter of law, to be different in kind from the limits ap-

proved in Buckley. Furthermore, contributions to PACs

present far less potential for quid pro quo corruption than do

contributions to candidates. Thus, the limit was not narrow-

ly tailored to meet a compelling state interest.

Finally, the Eighth Circuit addressed the $2,500 limit on

contributions from small donor PACs to candidates. Once

again, the Eighth Circuit applied strict scrutiny to this limit.

Here the court held that the higher limit was not justified

because the law focused on the source of the contributions

io the PAC not on the potential that the PAC itself would

attempt to corrupt a candidate.

REASONS FOR GRANTING THE WRIT

THIS COURT SHOULD GRANT THE WRIT

BECAUSE THE EIGHTH CIRCUIT DECIDED AN

IMPORTANT FEDERAL QUESTION IN A WAY

THAT CONFLICTS WITH RELEVANT DECISIONS

OF THIS COURT

This Court has previously addressed when and under

what circumstances political contributions may be limited.

In Buckley v. Valeo, 424 U.S. 1 (1976), this Court approved

of limitations on contributions to candidates for office and

announced the standard for measuring when such limita-

tions are allowed. In California Medical Association v.

Federal Election Commission, 453 U.S. 182 (1981) (Cal-

Med), this Court addressed limitations on contributions to

PACs and differing limitations on contributions by entities.

The Eighth Circuit departed from the standards announced

in these cases in striking down the contribution limits at issue

here.

1. THEEIGHTH CIRCUIT'S HOLDING REGARD-

ING THE $100 AND $300 LIMITS ON CONTRIBU-

TIONS TO CANDIDATES CONFLICTS WITH

BUCKLEY.

In Buckley v. Valeo, 424 U.S. 1, 26 (1976), this Court

reviewed the Federal Election Campaign Act’s provision

limiting individual contributions to candidates for federal

offices to $1,000 per election, with an overall annual limit of

$25,000 by any contributor. /d. at 7. Those limits were

upheld. An examination of this Court’s reasoning and

various holdings is necessary to see the error in the Eighth

Circuit’s holding. First, this Court determined that limita-

tions on contributions to candidates implicated First

Amendment values. The impact, however, on both free

expression and the freedom to associate was minimal. This

holding was necessary because

[a] contribution serves as a general expression of support

for the candidate and his views, but does not communi-

cate the underlying basis for the support. The quantity

of communication by the contributor does not increase

perceptibly with the size of his contribution, since ex-

pression rests solely on the undifferentiated, symbolic

act of contributing. ... A limitation on the amount of

money a person may give to a candidate or campaign

organization thus involves little direct restraint on his

political communication. . . .

Id. at21. Only when contribution limits are so low that they

prevent "candidates from amassing the resources for effec-

tive advocacy" will freedom of expression be severely impli-

cated. /bid.

Likewise, with respect to free association,

[t]he Act’s contribution ceilings... limit one important

means of associating with a candidate or committee, but

leave the contributor free to become a member of any

political association and to assist personally in efforts on

behalf of candidates.

Id. at 22.

Second, this Court addressed the level of judicial

scrutiny given to contribution limits to candidates. In this

regard, a limitation is justified upon a demonstration of "a

sufficiently important interest" and when a State "employs

means closely drawn to avoid unnecessary abridgment of

associational freedoms." Jd. at 25 However, this Court

noted that "a court has no scalpel to probe, whether, say a

$2,000 ceiling might not serve as well as $1,000. . . . Such

distinctions in degree become significant only when they can

be said to be differences in kind." /d. at 30 (internal quota-

tions and citations omitted). Thus, while heightened

scrutiny is appropriate, strict judicial scrutiny is not.

Finally, this Court addressed whether the FECA limits

passed muster. Limits on campaign contributions are jus-

tified, this Court held, by a state’s interest in preventing

corruption or the appearance of corruption stemming from

large campaign contributions. Buckley v. Valeo, 424 US. 1,

26 (1976). Those simple words, corruption or the ap-

pearance of corruption, were then given context. Actual

corruption occurs when contributions are given to "secure a

political guid pro quo." Id. at 26. Such activity undermines

the "integrity of our system of representative democracy."

Id. at 26-27.

Actual quid pro quo is not the end of the equation. "Of

almost equal concern .. . is the impact of the appearance of

corruption stemming from public awareness of the oppor-

tunities for abuse inherent in a regime of large individual

contributions." Jd. at 27. Thus, it was legitimate for Con-

gress to conclude that "the avoidance of improper influence"

is necessary in order to prevent "the confidence in our

representative Government" from being "eroded to a dis-

astrous extent." J/bid. (internal citations and quotations

omitted).

A basic analysis emerges from Buckley. First, it must be

determined whether a contribution limit "focuses precisely

on the problem of large campaign contributions — the

narrow aspect of political association where actuality and

potential for corruption have been identified." Buckley, 424

U.S. at 30. In other words, the inquiry is whether particular

legislation addresses “large” contributions. If so, the limits

are acceptable as long as ample room remains for political

association. Associational rights remain when the limita-

tions leave "persons free to engage in independent political

expression, to associate actively through volunteering their

services, and to assist to a limited nonetheless substantial

extent" through contributions, and ample avenues remain to

raise sufficient funds to allow effective advocacy on the part

of candidates. Jd. at 30. Limits may not "undermine to [a]

material degree the potential for robust and effective discus-

sion of candidates and campaign issues by individual

citizens, associations, the institutional press, candidates, and

political parties." Jd. at 29. Stated otherwise, so long as

contributors are allowed substantial participation and can-

didates are able to amass sufficient funds for effective ad-

vocacy, then, a contribution limit is merely different in

"degree" from the limits approved by this Court and not

subject to fine tuning. Buckley, 424 U.S. at 30.

With respect, the Eighth Circuit departed dramatically

from this analysis. See also, Carver v. Nixon, 72 F.3d 633 (8th

Cir. 1995S), cert. denied, 116 S. Ct. 2579 (1996). First, the

Eighth Circuit erred in holding that contribution limits to

candidates must survive strict judicial scrutiny. This error is

clearly seen through this Court’s disposition of two over-

breadth arguments advanced against FECA. In Buckley, the

challengers first asserted that the limits at issue were overly

broad because not all or even most large contributors seek

improper influence. This Court rejected that argument be-

cause it is difficult to isolate suspect contributions and be-

cause "the interest in safeguarding against the appearance of

impropriety requires that the opportunity for abuse inherent

in the process of raising large monetary contributions be

eliminated." Buckley 424 US. at 30.

Second, they asserted that the level itself was unrealisti-

cally low because "much more than that amount would still

not be enough to enable an unscrupulous contributor to

exercise improper influence over a candidate or of-

ficeholder." Buckley, 424 U.S. at 29-30. This argument was

rejected with the now-famous phrase that “a court has no

scalpel to probe, whether, say a $2,000 ceiling might not

serve as well as $1,000. . . . Such distinctions in degree

become significant only when they can be said to be differen-

ces in kind." Jd. at 30 (internal quotations and citations

omitted).

The level of scrutiny imposed by the Eighth Circuit is

precisely the same as the overbreadth arguments advanced

in Buckley. The essence of the Eighth Circuit’s holding is

that the State must somehow locate the perfect limit then

surgically draft a statute to reflect that limit. That is what

Strict scrutiny requires. Under its holding limits may not be

enacted if the limit plus $1.00 would not suffice as well or if

the limit sweeps within its breadth contributors who do not

intend to exert improper influence. It is an invitation to

courts to utilize "a scalpel to probe, whether, say a" $400 limit

might serve just as well as a $300 limit.

The second analytical error committed by the Eighth

Circuit is in the evidentiary standard imposed on the State

in order to establish the existence of its interest. The Eighth

Circuit held that the Commission had the burden of proving

"that there is real or perceived undue influence or corrup-

tion attributable to large political contributions in Arkan-

sas." Appendix A at A-10. In order to meet this burden, the

Commission had to prove that a candidate or officeholder

“changed his position . .. due to an intervening contribution,"

that there was an attempt to "conceal his contributions" from

some sources, or that there had been some exorbitantly

large, indeed in Arkansas illegal, contribution. Appendix A

at A-12, 4-13, A-14. In other words, the Commission had

to show a bribe or the appearance of a bribe or an illegal

contribution. Without such evidence, no "reasonable per-

son could perceive" undue influence. Appendix A at A-11.

This evidentiary standard does not appear in Buckley and

is clearly contra to its language. What is required of the

Commission is simply to show that the limitations "focus

precisely on the problem of large campaign contributions —

the narrow aspect of political association where the actuality

and potential for corruption have been identified." Buckley,

424 US. at 28. There is no requirement to point to some

specific instance of corruption or apparent corruption under

the previous limits before Act I can be justified. Contribu-

tion limits are justified in order to meet the interest in

preventing corruption or the appearance of corruption stem-

ming from large campaign contributions. That interest is

accomplished, once again, by removing "the opportunity for

abuse inherent in the process of raising large monetary

contributions." /d. at 30. The State need not wait until some

scandal surfaces to impose a reduction in limits. Cf. Renton

v. Playtime Theatres, Inc., 475 U.S. 41, 52 (1986). Rather, it

may take preemptive steps to alleviate "the possibility for

corruption that may arise from large campaign contribu-

tions. ..." Rosentiel v. Rodriguez, 101 F.3d 1544, 1553 (8th

Cir. 1996), cert. denied, 117 S. Ct. 1820 (1997).

Even if, however, some showing of corruption or its

appearance is needed, the showing required by the Eighth

Circuit is erroneous. The Eighth Circuit essentially held

that a state must present evidence of a bribe, an apparent

bribe or an illegal contribution. Conversely, this Court

rejected the notion that illegality was the standard of proof

in Buckley. See Buckley 424 U.S. at 27-28; 29-30. Rather,

the correct inquiry, if any inquiry is required, is whether

actions of candidates or office holders create "the ap-

pearance of improper influence" such that "confidence in the

system of representative government is .. . eroded." Jd. at

27 (internal citations and quotations omitted).

In summary, the Eighth Circuit has established a stand-

ard for reviewing campaign finance reform measures that

runs counter to the mandate of this Court. The writ should

issue to correct that error.

2. THE EIGHTH CIRCUIT’S HOLDING REGARD-

ING THE $200 LIMIT ON CONTRIBUTIONS TO PACs

CONFLICTS WITH THIS COURT’S PRECEDENT IN

CAL-MED.

This Court has also addressed limitations on contribu-

tions to PACs. Cal-Med, 453 U.S. at 200. There, a statute

limited contributions to multi-candidate political commit-

tees to $5,000 annually. The California Medical Association

(CMA) challenged the statute arguing that its ability to

contribute to a PAC known as CALPAC should not be

limited. Such contributions, it was argued, were akin to

direct expenditures by candidates and committees which this

Court held could not be limited in Buckley. This Court

disagreed.

In upholding the statute, this Court determined the level

of First Amendment protection such contributions merit.

While they were not totally devoid of First Amendment

protection they also were "not the sort of political advocacy

... entitled to full First Amendment protection." Cal-Med,

453 U.S. at 196. The contributions at issue would not be

speech by the contributor. /d. at 197. Rather they involved

"speech by proxy." CMA and its members were fully able to

expend independently "in order to advocate political views."

Id. at 195. This conclusion was mandated by Buckley:

While contributions may result in political expression if

spent by a candidate or an association to present views

to the voters, the transformation of a contribution into

political debate involves speech by someone other than the

contributor.

Cal-Med, 453 U.S. at 197 (quoting Buckley, 424 U.S. 1, 21

(1976) (emphasis added by Court in Cal-Med). Thus, like

contributions to candidates, contributions to PACs are not

examined under strict judicial scrutiny. Such scrutiny is

limited to direct expenditures by candidates and commit-

tees.

The limitations were, thus, justified on two bases.” So

long as the limits in question would not violate the rights of

a contributor to give to a candidate, they likewise would not

violate his right to contribute to a PAC. /d. at 197. The same

analytical framework established in Buckley would apply.

Second, the limits were justified in order to prevent the

circumvention of the limits imposed on individual contribu-

tions to candidates. /d. at 198. CMA had argued that limits

on contributions did not further the interest in preventing

sThis portion of the opinion is a plurality.

real or apparent corruption. /d. at 197. This Court rejected

that notion, holding that the limit was "an appropriate means

by which Congress could seek to protect the integrity of the

contribution restrictions" addressed in Buckley. Id. at 198.

The Eighth Circuit did not apply this analysis in striking

down Arkansas’ $200 limit on contributions to PACs. First,

it held that "limits on contributions to political action com-

mittees ... are reviewed according to a strict scrutiny stand-

ard." Appendix A at A-16 (citing Day v. Holohan, 34 F.3d

1356, 1365 (8th Cir. 1994). This holding is clearly con-

tradicted by Cal-Med. The Eighth Circuit then held that the

limit at issue was not narrowly tailored because it was too

low. It based this holding on the value of a dollar today as

compared to the value of a dollar in 1976 when Buckley was

decided. No such analysis emanates from either Buckley or

Cal-Med.

Finally, the Eighth Circuit held that the interest in

preventing corruption or its appearance was lessened in this

context. According to the Eighth Circuit, "[t]here is also less

of a danger of quid pro quo corruption . .. when a contribu-

tion is given to a PAC that does not itself wield legislative

power." Appendix A at A-17. Once again, this holding is in

clear conflict with Cal-Med. This Court should issue the writ

to correct this erroneous legal standard.

3. THE EIGHTH CIRCUITS HOLDING REGARD-

ING THE SMALL DONOR PAC LIMIT CONFLICTS

WITH THIS COURT’S PRECEDENT IN CAL-MED.

The Eighth Circuit finally struck down the provision

allowing Small Donor PACs to contribute $2,500 while

limiting approved PACs to $100 and $300 per election per

candidate. A Small Donor PAC, must limit itself to receiv-

ing contributions of $25 or less per year from individuals.

These PACs are allowed to contribute up to $2,500 per

election per candidate.

According to this Court’s precedent, the PAC challeng-

ing Act I’s differing limits had to prove that Act I "burdens

[its] First Amendment rights . . . to a greater extent than it

burdens the rights" of small donor PACs, "and that such

differential treatment is not justified." Cal-Med, 453 U.S. at

200. In Cal-Med, this Court also reviewed an equal protec-

tion challenge to Federal Election Campaign Act provisions

that placed no limit on contributions of corporations and

labor unions to segregated political funds while placing

limits on the same types of contributions from the chal-

lengers, unincorporated associations and individuals. /d. at

200-01. The Court found it unnecessary to address "the

second question — whether the discrimination alleged . . . is

justified — because [it] found no such discrimination." /d.

at 200.

The Eighth Circuit clearly did not apply this analysis.

Rather, it held that "such differential treatment must be

evaluated according to strict scrutiny." Appendix A at A-18.

It then identified the prevention of corruption or its ap-

pearance as the only possible interests advanced by such

limits.

The Eighth Circuit rejected the argument that the en-

tities could not be examined under Cal-Med’s framework in

curious fashion. It held that the such reasoning was

"manifestly flawed" because it focused on the sources of

‘This portion of the opinion is an opinion for the Court.

contributions to small donor PACs instead of on the poten-

tial that the PACs themselves would attempt to exert control

over a candidate. Appendix A at A-19. Thus, the provision

was not narrowly tailored to meet the asserted interest. Yet,

the rejected analysis was formulated by this Court and the

Eighth Circuit failed to foliow it. The writ should be issued

to correct this error.

II.

THE COURT SHOULD ISSUE THE WRIT TO DETER-

MINE THE IMPORTANT FEDERAL QUESTION

WHETHER ADDITIONAL INTERESTS CAN SUP-

PORT CAMPAIGN FINANCE REFORM.

The Eighth Circuit held that only the interest in prevent-

ing corruption or its appearance stemming from large cam-

paign contributions justifies the campaign finance reforms

at issue. The Commission asserted additional interests in

support of its case. Each interest is important enough, in-

deed compelling if such weight is required, to support the

measures.

1. PROTECTING THE EQUAL PROTECTION

RIGHTS OF VOTERS AND CANDIDATES

The State’s interest in protecting the Equal Protection

rights of voters and candidates justifies contribution limits.

The process of raising money for campaigns is an "integral

part... of the elective process that determines who shall rule

and govern" that must be open to all. Terry v. Adams, 345

U.S. 461, 469 (1953). The public election process "is an

exclusively public function." Flagg Brothers v. Brooks, 436

U.S. 149, 158 (1978). It is "part of the machinery for choos-

ing officials" and thus "becomes subject to the Constitution’s

restraints" even if it is conducted by a private association.

Terry, 345 U.S. at 481 (Clark, J., concurring) [quoting Smith

v. Allright, 321 U.S. 649, 664 (1944)]. Exclusion from an

"integral part" of the elective process "does not merely cur-

tail [citizens’}] voting power, but abridges their right to vote

itself." Morse v. Republican Party of Virginia, 116 S. Ct. 1186,

1200 (1996).

Simply put, a "wealth primary" precedes every election

for office. Voters and candidates were denied participation

in this wealth primary under the prior system. They were

denied the right, guaranteed by the Fourteenth Amend-

ment, to participate in the elective process on an equal and

meaningful basis. See, Morse, supra; Terry, supra; Nixon v,

Herndon, 273 U.S. 536 (1927); Nixon v. Condon, 286 U.S. 73

(1932); Jamin Raskin and John Bonifaz, Equal Protection

and The Wealth Primary, 11 Yale L. & Pol’y Rev. 273 (1993).

The wealth primary disadvantages voters "in their oppor-

tunity to influence the political process effectively.", Davis v.

Bandemer, 478 U.S. 109, 133 (1986). It undermines and

debases the constitutionally guaranteed value of votes, and

presents a "real and appreciable impact on the exercise of

the franchise." Bullock v. Carter, 405 U.S. 134, 144 (1972).

In Bullock, this Court struck down the system of filing

fees required by Texas for candidates in primary elections

on equal protection grounds. The Texas system created

"barriers to candidate access to the primary ballot, thereby

tending to limit the field of candidates from which voters

might choose." /d. at 143. Analyzed from the point of view

of voters of modest economic means, the size of these fees

gave the system “a patently exclusionary character" that

confronted candidates first by precluding them from "seek-

ing the nomination of their chosen party" due to their lack

of personal wealth or access to it "no matter how qualified

they might be, and no matter how enthusiastic their popular

support." Jbid. This “exclusionary mechanism" also

produced an effect on voters. With less affluent candidates

excluded from running, voters were "substantially limited in

their choice of candidates." Jd. at 144. This reduction of

electoral choice fell "more heavily on the less affluent seg-

ment of the community, whose favorites" could not pay the

filing fees. Conversely, the exclusion of those candidates

gave "the affluent power to place on the ballot their own

names or the names of persons they favor." [bid. It would

"ignore reality," the Court held, "not to recognize that this

system falls with unequal weight on voters, as well as can-

didates, according to their economic status." /bid.

The system erected by Texas used one criterion, wealth

or access to it, as a condition to being on the ballot. It

excluded otherwise serious and qualified candidates and

denied vast numbers of voters the opportunity to vote for

candidates of their choice, a violation of their equal protec-

tion rights. Jd. at 149. This Court established a basic prin-

ciple of Equal Protection law: wealth, or the lack of it, may

not "be used to block meaningful participation by a group of

citizens in the electoral process." Raskin and Bonifaz, supra,

at 287. The same exclusionary mechanism exists with the

wealth primary.

One natural outcome of this exclusion is that these voters

are disenfranchised. Their favored candidates never even

reach the ballot. Rather than voting, they stay home on

election day. See, Institute for Southern Studies, Press

Release, New Study Names "Dismal Dozen" for Poor Voter

Turnout, Poor Laws, Feb. 4, 1993.

Protecting these rights is weighty, indeed compelling.

"The right to vote freely for a candidate of one’s choice is of

the essence of a democratic society, and any restrictions on

that right strike at the heart of representative government."

Reynolds v. Sims, 377 U.S. 533, 555 (1964). The framers of

the Fourteenth Amendment condemned actions that "in any

way abridged" a citizen’s "right to vote" for candidates of her

choice. U. S. Const., amend. 14 § 2. What state interest

could be more compelling than protection of these rights so

explicitly defined in this nation’s laws?

In the words of the respondents in this case "contri-

butions to political campaigns make better listeners of can-

didates.". Heretofore, only those with the financial

wherewithal to contribute large amounts of money had such

access. Arkansas’ law changed that landscape and created a

system where all could participate in the elective process in

a meaningful way and enjoy access to their elected repre-

sentatives. The writ should issue so that it can be reviewed

with this interest in mind.

2. PROTECTING THE FIRST AMENDMENT

RIGHTS OF VOTERS AND CANDIDATES.

The Commission also has an interest in protecting the

First Amendment rights of voters and potential candidates

to full participation in the political marketplace of ideas.

This argument calls for the Court to balance First Amend-

ment concerns against one another. On the one hand are

the interests of contributors to give financial support to

campaigns. On the other are the rights of voters to hear

voices in the political marketplace and of potential can-

didates to be heard.

Whenever a system excludes candidates from the ballot

it affects the First Amendment rights of others in two ways.

First, by preventing potential candidates from becoming

players on the political scene, a system prevents those can-

didates from joining in the debate. Thus, this nation’s

"profound national commitment to the principle that the

debate on public issues should be uninhibited, robust and

wide-open ..." is undermined. New York Times v. Sullivan,

376 U.S. 254, 271 (1974). The State has a compelling inter-

est in ensuring that all voices have access to the ballot for a

full airing of debate on public issues.

Second, this exclusion of candidates of marginal wealth

deprives voters of their First Amendment right to receive

information on public issues. This Court has recognized the

importance "in fostering an informed electorate." Eu v. San

Francisco Democratic Comm., 489 U.S. 214, 228 (1989)

(citing Tashjian v. Republican Party of Connecticut, 479 U.S.

208, 220 (1986)). Voters have the First Amendment right to

hear political speech. This Court relied on this right in

holding that corporations should be allowed to present op-

position to a referendum. First National Bank v. Bellotti, 435

U.S. 765 (1978). In Bellotti, the Court focused on the fact

that the "First Amendment protects interests broader than

those of a party seeking their vindication" and includes the

interests of society in learning the position of the corpora-

tion. Id. at 776. If candidates are excluded from the ballot

because of the campaign finance scheme in place, voters are

deprived of these rights. The State has a compelling interest

in preventing such exclusion.

Broader limits on contributions to political campaigns

do not translate into more speech. They have an exclusionary

effect. The inability to access money acts as a filter to the

ballot. Those candidates without access to wealth or wealthy

contributors are prevented from ever becoming candidates,

regardless of their popular support. Their voices are ex-

cluded from the political marketplace of ideas and the result

is less speech, not more. Once again, Arkansas’ campaign

finance laws merit review with this interest in mind.

a THE PAC LIMIT ENSURES THAT AGGRE-

GATION OF WEALTH INDICATES POPULAR SUP-

PORT.

The "relative availability of funds" to a political group or

association "is after all a rough barometer of public support."

Federal Election Commission v. Massachusetts Citizens For

Life, 479 U.S. 238, 258 (1986). In the corporate form, how-

ever, the aggregation of wealth from the corporate treasury

undermines that notion. /bid. It reflects not the "power of

its ideas" but the economically-motivated decisions of its

investors and customers. bid. For this reason, along with

the ability of corporations to aggregate vast amounts of

wealth through the corporate form under which they receive

various state-granted advantages, corporations may be

severely limited in their ability to use corporate funds for

political purposes. See, Austin v. Michigan Chamber of

Commerce, 494 U.S. 652 (1990). This Court very jealously

guards the ability of political associations and committees to

aggregate funds and speak in acommon voice whenever that

aggregation reflects "popular support for the political posi-

tions of the committee" or association. Massachusetts

Citizens for Life, 479 U.S. at 258. Whenever this evidence of

popular support is absent, protection for such committees

and associations is diminished.

Limits on contributions to PACs have the same effect.

Without reasonable limits, a PAC could receive large,

exorbitant contributions from very few contributors. There

would be a vast accumulation of wealth that in no way

reflected the "power of the ideas" of the contributors. Ibid.

Other committees or PACs could have vast popular support

from those who are only able to contribute nominal

amounts. Their ideas would face the danger of being

drowned out by the mere power of money over ideas.

Act I offers a narrowly-drawn compromise. A limit is

placed on contributions to PACs so that whenever they

accumulate vast sums of money it reflects popular support.

This limit is high enough, however, to allow the aggregation

of sufficient sums of money to place the ideas of the common

speakers into the political marketplace of ideas. The writ

should issue in order to review Arkansas’ PAC limit with this

interest in mind.

CONCLUSION

For the foregoing reasons, certiorari should issue to the

United States Court of Appeals for the Eighth Circuit so that

this Court may review and correct the decision below, and

resolve whether interests other than the prevention of

corruption or its appearance justify campaign finance

reform.

Respectfully Submitted,

J. WINSTON BRYANT

Attorney General*

SHIRLEY E. GUNTHARP

Deputy Attorney General

BRIAN G. BROOKS

Assistant Attorney General

323 Center Street

Catlett-Prien Bldg., Suite 200

Little Rock, AR 72201-2610

(501) 682-2007

Attorneys for Petitioners

*Counsel of Record

APPENDIX A

A-1

United States Court of Appeals,

Eighth Circuit.

Ron Russell, Kent Ingram, William R.

Austin, and Associated Industries of Arkansas

Political Action Committee, Appellants,

Troy Burris, In His Official Capacity as Chair-

person of the Arkansas Ethics Commission;

Rita Looney, In Her Official Capacity as a

Member of the Arkansas Ethics Com-

mission; Tom Alexander, In His Official

Capacity as a Member of the Arkansas Ethics

Commission; Ben Allen, In His Official

Capacity as a Member of the Arkansas Ethics

Commission; Jack Kearney, In His Official

Capacity as a Member of the Arkansas Ethics

Commission; and Citizens for Clean

Government, Appellees.

American Civil Liberties Union of Arkansas,

James Madison Center for Free Speech, Shrink

Missouri Government PAC, and Zev

David Fredman, Amici Curiae on Behalf of Appellants.

Connecticut, lowa, Kansas, Kentucky,

Massachusetts, Minnesota, Missouri,

Montana, New Mexico, North Dakota,

Utah, and Vermont, Amici Curiae on Behalf of Appellees.

Ron Russell, Kent Ingram, William R.

Austin, and Associated Industries of

Arkansas Political Action Committee, Appellees,

Vv.

Troy Burris, In His Official Capacity as Chair-

person of the Arkansas Ethics Commission;

A-2

Rita Looney, In Her Official Capacity as a

Member of the Arkansas Ethics Com-

mission; Tom Alexander, In His Official

Capacity as a Member of the Arkansas Ethics

Commission; Ben Allen, In His Official

Capacity as a Member of the Arkansas Ethics

Commission; and Jack Kearney, In His Official

Capacity as a Member of the Arkansas Ethics

Commission, Appellants,

Citizens for Clean Government, Intervenor as Defendant.

James Madison Center for Free Speech, Shrink

Missouri Government PAC, and Zev David

Fredman, Amici Curiae on Behalf of Appellees.

Connecticut, Iowa, Kansas, Kentucky,

Massachusetts, Minnesota, Missouri,

Montana, New Mexico, North Dakota,

Utah, and Vermont, Amici Curiae on

Behalf of Appellants.

Ron Russell, Kent Ingram, William R.

Austin, and Associated Industries of

Arkansas Political Action Committee, Appellees,

Troy Burris, In His Official Capacity as Chair-

person of the Arkansas Ethics Commission;

Candi Sue Russell, In Her Official Capacity

as a Member ofthe Arkansas Ethics Com-

mission; Marvin Delph, In His Official Capacity

as a Member of the Arkansas Ethics Com-

mission; Rita Looney, In Her Official

Capacity as a Member of the Arkansas Ethics

Commission; and Norton Wilson, In His Official

Capacity as a Member of the Arkansas Ethics

Commission, Defendants,

A-3

Citizens for Clean Government, Appellant.

James Madison Center for Free Speech,

Shrink Missouri Government PAC, and Zev

David Fredman, Amici Curiae on Behalf of Appellees.

Nos. 97-3922, 97-4033 and 97-4038.

Submitted April 13, 1998.

Decided June 4, 1998.

Before WOLLMAN, BEAM, and MORRIS SHEPPARD

ARNOLD, Circuit Judges.

MORRIS SHEPPARD ARNOLD, Circuit Judge.

In 1996, the people of Arkansas, by voter initiative,

approved a campaign finance reform measure entitled

Initiated Act I. Prior to Act I, Arkansas law limited in-

dividuals and political action committees to contributions

of $1,000 per candidate during each election cycle. Act I

reduced the contribution limit to $300 for the offices of

governor, lieutenant governor, secretary of state, trea-

surer, auditor, attorney general, and commissioner of state

lands, see Ark.Code Ann. § 7-6-203(a), § 7-6-203(b), and

to $100 for all other state public offices, see Ark.Code Ann.

§ 7-6-203(a)(1), § 7-6-203(b)(1).

Act I also created a special category of political action

committee (PAC), see Ark.Code Ann. § 7-6-201(9), § 7-6-

201(10), known as a small-donor PAC. See Ark.Code Ann.

§ 7-6-201(12). Under Act I, a small-donor PAC may accept

no contribution larger than $25, see Ark.Code Ann. § 7-6-

201(12)(B), and it may contribute no more than $2,500 per

election to any candidate, see Ark.Code Ann. § 7-6-203(d).

Act I authorized as well the creation of a campaign fund-

A-4

raising entity known as an independent expenditure com-

mittee. See Ark.Code Ann. § 7-6-201(14). An independent

expenditure committee may, like any person, make un-

limited independent expenditures (that is, ones not coor-

dinated with a candidate) to advocate the election or defeat

of a clearly identified candidate for office. See Ark.Code

Ann. § 7-6-201(13), § 7-6- 201(14). Such a committee,

however, may accept no more than $500 from any person

annually. See Ark.Code Ann. § 7-6-203(k). Finally, Act I

authorized local governments to set reasonable limitations

on fund-raising for campaigns for local offices. See Ark.

Code Ann. § 7-6-224. Ron Russell, Kent Ingram, William

Austin, and the Associated Industries of Arkansas Political

Action Committee challenged each of these Act I pro-

visions in the district court, as well as a pre-Act I provision

limiting contributions to any one PAC to $200 annually, see

Ark. Code Ann. § 7-6-201(9)(B).

Following a bench trial, the district court held that the

contribution limits of $300 for certain statewide offices and

of $100 for state judicial offices were unconstitutional

because they violated the First Amendment’s prohibition

against limitations on the freedom of speech. See Russell v.

Burmis, 978 F.Supp. 1211, 1222, 1224, 1229 (E.D.Ark.1997).

The trial court, however, upheld the $100 contribution

limit as to all other offices and the $200 contribution limit

to PACs. Id. at 1223, 1225, 1229. The trial court also held

that the differential treatment for ordinary PACs and

small-donor PACs did not violate the Fourteenth Amend-

ment’s equal protection clause. /d. at 1227, 1229. The trial

court declined to reach the merits on the other two issues,

finding that the plaintiffs did not have standing to contest

the limit on contributions to independent expenditure

committees, Jd. at 1217, 1229, and that the provision

authorizing relevant actions by local governments was not

ripe for a constitutional challenge. /d. at 1217-18, 1229.

A-5

All parties appeal the rulings unfavorable to their

litigating positions. We affirm in part and reverse in part.

Standing is, of course, a threshold issue in every case

before a federal court: If a plaintiff lacks standing, he or

she cannot invoke the court’s jurisdiction. See Boyle v.

Anderson, 68 F.3d 1093, 1100 (8th Cir.1995), cert. denied,

516 U.S. 1173, 116 S.Ct. 1266, 134 L.Ed.2d 214 (1996). In

order to invoke the jurisdiction of a federal court, one must

meet three requirements. First, a plaintiff must have suf-

fered an "injury in fact," and such an injury must be con-

crete, particularized, and either actual or imminent. /d. at

1100-01. Second, a would-be litigant must make out a

causal connection between the alleged injury and the con-

duct challenged. /d. at 1100. Third, he or she must show

that the injury is likely to be redressed by a favorable

decision. Id.

The trial court determined that each of the plaintiffs

had Article III standing as to all but one of their challenges,

see Russell, 978 F.Supp. at 1217, and the defendants do not

contest that determination here. The plaintiffs maintain,

however, that the trial court erred in finding that they did

not have Article III standing to challenge the provisions of

Act I relating to independent expenditure committees.

The trial court found that the plaintiffs did not face a

credible threat of present or future prosecution with

respect to this part of their claim, and thus could show no

actual or imminent "injury in fact," because none of them

"could think of an independent expenditure committee to

which they had contributed in the past or to which they

planned to contribute." /d. Indeed, one plaintiff testified,

"Well, in all honesty, I’d have to tell you it would take a

A-6

stretch of my imagination to figure out why I’d want to

contribute anything to an independent committee."

Another simply testified that he did not know if he would

ever contribute to such a committee.

We are mindful that where "plaintiffs allege an inten-

tion to engage in a course of conduct arguably affected with

a constitutional interest which is clearly proscribed by

statute, courts have found standing to challenge the statute,

even absent a specific threat of enforcement." United Food

& Commercial Workers International Union v. IBP, Inc., 857

F.2d 422, 428 (8th Cir.1988). But the plaintiffs have not

demonstrated any such intention: They have indicated

neither that they would contribute to a specific inde-

pendent expenditure committee nor that, but for the

limitations of Act I, they would form an independent ex-

penditure committee. Standing may not be predicated

merely upon a conjectural or hypothetical injury or, as one

of the plaintiffs here would have it, upon a stretch of the

imagination. See Lujan v. Defenders of Wildlife, 504 U.S.

555, 564, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). We

therefore affirm the trial court’s determination that the

plaintiffs lacked standing to challenge the provisions

relevant to independent expenditure committees.

Il.

"Where at all possible, government must curtail speech

only to the degree necessary to meet the particular prob-

lem at hand, and must avoid infringing on speech that does

not pose the danger that has prompted regulation." Federal

Election Commission v. Massachusetts Citizens for Life, 479

U.S. 238, 265, 107 S.Ct. 616, 93 L.Ed.2d 539 (1986). Gov-

ernment attempts to limit campaign contributions, there-

fore, are " ‘ "subject to the closest scrutiny." ’ " Carver v.

Nixon, 72 F.3d 633, 636 (8th Cir.1995), cert. denied, 518

A-7

U.S. 1033, 116 S.Ct. 2579, 135 L.Ed.2d 1094 (1996), quot-

ing Buckley v. Valeo, 424 U.S. 1, 25, 96 S.Ct. 612, 46 L.Ed.2d

659 (1976) (per curiam ), itself quoting NAACP v.

Alabama, 357 U.S. 449, 461, 78 S.Ct. 1163, 2 L.Ed.2d 1488

(1958). Under this standard, a significant interference with

protected rights of political association may be sustained

only when the state demonstrates a compelling interest and

means closely drawn to avoid unnecessary abridgement of

associational freedoms. Carver, 72 F.3d at 636.

Intervenor (as a defendant) Citizens for Clean Govern-

ment (CCG) argues that we should apply a more lenient

standard of review to the legislation in this case because

Act I included not only contribution limits but also a public

subsidy scheme. For this proposition, CCG relies upon the

Supreme Court’s ruling in Buckley that upheld a ban on

general election campaign contributions to, and a limita-

tion on general election campaign expenditures by, a

presidential canc: ‘ste who elected to receive a public

subsidy. See Buckley, 424 U.S. at 85-109, 96 S.Ct. 612.

But the Buckley Court was clear that it was the optional

nature of the contribution and expenditure limit scheme,

not the subsidy, that rendered the scheme constitutionally

permissible: "Just as a candidate may voluntarily limit the

size of the contributions he chooses to accept, he may

decide to forgo private fundraising and accept public fund-

ing." Id. at 57 n. 65, 96 S.Ct. 612. Similarly, we recently

upheld a voluntary campaign subsidy and limitation

scheme in Minnesota because the scheme "presents can-

didates with an additional, optional campaign funding

choice, the participation in which is voluntary." Rosenstiel

v. Rodriguez, 101 F.3d 1544, 1552 (8th Cir.1996), cert.

denied, US. _, 117 S.Ct. 1820, 137 L.Ed.2d 1028

(1997). It is true that Act I provided a subsidy and limitation

scheme, but unlike the schemes upheld in Buckley and

A-8

Rosenstiel, Act I was imposed upon all candidates: Can-

didates do not have the power to opt out. We therefore

decline this invitation to apply a standard of scrutiny to this

case that is different from the one that we adopted in

Carver.

CCG argues for a more lenient standard of review on

the basis of two recent Supreme Court decisions as well,

but neither of these authorities modifies the standard of

review appropriate to this case. In Colorado Republican

Federal Campaign Committee v. Federal Election Commis-

sion, 518 U.S. 604, 609, 116 S.Ct. 2309, 135 L.Ed.2d 795

(1996) (opinion of Breyer, J.), a case involving the applica-

tion of federal campaign expenditure limits, three justices

resorted to what CCG calls a weighing test, rather than

Strict scrutiny, to decide the case. See id. at 616, 618, 116

S.Ct. 2309. These justices described their approach as con-

sistent with cases in which the Court “essentially weighed

the First Amendment interest in permitting candidates

(and their supporters) to spend money to advance their

political views against a ‘compelling’ governmental inter-

est in assuring the electoral system’s legitimacy, protecting

it from the appearance and reality of corruption." /d. at 609,

116 S.Ct. 2309. This adjudicatory approach appears to us

to be a restatement or reformulation, not a modification,

of the Court’s familiar strict scrutiny analysis.

We are aware that during the last term, in Timmons v.

Twin Cities Area New Party, 520 U.S. 351, 117 S.Ct. 1364,

1370, 137 L.Ed.2d 589 (1997), the Supreme Court upheld

an election regulation that barred a political party from

choosing as its nominee a candidate already appearing on

another party’s ballot. The Court held that while regula-

tions "imposing severe burdens on plaintiffs’ rights must be

narrowly tailored and [must] advance a compelling state

interest," lesser burdens "trigger [a] less exacting review."

A-9

Id. We believe, however, that restrictions on individual

contributions to candidates and on candidates’ amassing

sufficient resources to run for office are more severe than

the restrictions at issue in Timmons. Where the regulations

impose severe burdens on First Amendment rights, as

here, Timmons reiterates the Court’s position that strict

scrutiny applies.

We must therefore first determine what interest can be

sufficiently compelling to permit the state to restrict First

Amendment freedoms. The compelling state interest iden-

tified in Buckley was "the prevention of corruption and the

appearance of corruption spawned by the real or imagined

coercive influence of large financial contributions on

candidates’ positions and on their actions if elected to

office." Buckley, 424 U.S. at 25, 96 S.Ct. 612. The Court

reiterated this position five years later, holding that "Buck-

ley identified a single narrow exception to the rule that

limits on political activity were contrary to the First

Amendment. The exception relates to the perception of

undue influence of large contributors to a candidate."

Citizens Against Rent Control v. Berkeley, 454 U.S. 290,

296-97, 102 S.Ct. 434, 70 L.Ed.2d 492 (1981) (emphasis

omitted). Subsequently, the Court stated flatly that

"[p]reventing corruption or the appearance of corruption

are the only legitimate and compelling government inter-

ests thus far identified for restricting campaign finances."

Federal Election Commission v. National Conservative

Political Action Committee, 470 U.S. 480, 496-97, 105 S.Ct.

1459, 84 L.Ed.2d 455 (1985).

Only three years ago, we emphasized in Carver, 72 F.3d

at 638-39, that the state may abridge political speech in the

form of campaign contributions only to address the reality

or perception of undue influence or corruption attri-

butable to large contributions. We turn, then, to a con-

A-10

sideration of whether the challenged provisions can pass

muster under this standard.

iil.

We consider first the provisions of Act I that limited

direct contributions to candidates to $300 per election for

certain statewide offices, see Ark.Code Ann. § 7-6-203(a),

§ 7-6-203(b), and to $100 per election for all other state

offices, see Ark.Code Ann. § 7-6-203(a)(1), § 7-6-

203(b)(1). The defendants must prove first that there is

real or perceived undue influence or corruption at-

tributable to large political contributions in Arkansas, and

then that these challenged provisions of Act I are narrowly

tailored to address that reality or perception. We find that

the defendants failed to carry their burden before the trial

court.

We note that our review of the trial court’s judgment

may involve the review of some of the factual determina-

tions that it made. The Supreme Court has instructed that,

in cases involving the First Amendment, appellate courts

are to make an independent examination of the whole

record to ensure that their judgments do not constitute a

forbidden intrusion on the right of free expression. See New

York Times Co. v. Sullivan, 376 U.S. 254, 285, 84 S.Ct. 710,

11 L.Ed.2d 686 (1964). But we are also mindful of

Fed.R.Civ.P. 52(a), which provides that a trial court’s fac-

tual findings are typically reviewed for clear error.

To reconcile these two legal propositions, we held last

year that, in cases involving the First Amendment, we

would review findings of noncritical facts for clear error,

but would conduct an independent review of critical facts.

See Families Achieving Independence and Respect v.

Nebraska Department of Social Services, 111 F.3d 1408,

A-11

1411 (8th Cir.1997) (en banc ). Accordingly, in the discus-

sion that follows, we give due deference to the trial court’s

determination of noncritical facts, while we review inde-

pendently those facts that we believe to be critical.

We begin with the observation that no defendant

provided any credible evidence to the trial court of actual

undue influence or corruption stemming from large con-

tributions. We are left, then, to determine whether the

defendants proved that a reasonable person could per-

ceive, on the basis of the evidence presented at trial, that

such contributions make for undue influence or spawn

corruption.

CCG presented proof at trial that was intended tg «°°

demonstrate specific instances in which large contributions ~

had given rise to the appearance of undue influence or

corruption. Much of this proof focused on the introduction

in the Arkansas legislature of a bill that would have

prohibited local governments from regulating tobacco.

- The bill’s sponsor, State Representative James Dietz, had

received as much as $2,700 in contributions the previous

year from various sources related to the tobacco industry,

such as the Tobacco Institute. Many other supporters of the

bill had apparently also received contributions from pro-

tobacco sources. An opponent of the bill, State Repre-

sentative Ted Thomas, testified that there was a "uniform"

public perception of corruption associated with the bill’s

having been introduced and supported by legislators who

had received contributions from tobacco interests.

Even assuming that Mr. Thomas was correct that there

was a public perception of corruption, we must determine

whether that public perception was reasonable, and

whether that perception of corruption derived from the

magnitude of the contributions to Mr. Dietz and other

a ee el

A-12

supporters of the bill. We believe, after an independent

review of the facts presented to the trial court, that the

defendants did not prove that the perception of corruption

to which Mr. Thomas alluded was objectively reasonable.

A newspaper article admitted into evidence quoted Mr.

Dietz as saying that he supported the preemption measure

because he believed that one "ought to have the right to say

what goes on inside his building as long as it’s legal." That

Mr. Dietz received political contributions from those

whose interests he tended to support hardly indicates, on

its Own, any corruption.

The defendants provided no evidence at trial, for in-

stance, that Mr. Dietz changed his position on the tobacco

bill due to an intervening contribution. Nor did the defen-

dants provide evidence that Mr. Dietz sought to conceal

his contributions from tobacco-related sources. If it were

reasonable to presume corruption from the fact that a

public official voted in a way that pleased his contributors,

legislatures could constitutionally ban all contributions

except those from the public official’s opponents, a patent

absurdity. That would spell the end to the political right,

protected by the First Amendment, to support a candidate

of one’s choice.

The defendants’ objections to Mr. Dietz’s activities are

also, we believe, essentially unrelated to the size of the

individual contributions that he received. The defendants

did not provide evidence, such as that produced by the

government in Buckley, of multi-million-dollar contribu-

tions to Mr. Dietz. Indeed, our review of the evidence

presented to the trial court indicates that Mr. Dietz

reported no individual contribution larger than $1,000

from any source, tobacco-related or otherwise. We believe

that $1,000 is simply not a Jarge enough sum of money to

A-13

yield, of its own accord and without further evidence, a

reasonable perception of undue influence or corruption.

The defendants essentially criticize Mr. Dietz for offer-

ing a bill favorable to interests from whom he had already

accepted campaign contributions. The difficulty pointed

to, then, seems to be the identity of the contributors and

their subsequent interest in legislation rather than the size

of their contributions. We note that even if Mr. Dietz had

received twenty-seven individual contributions of $100

from various tobacco-related sources instead of a few

somewhat larger contributions, the defendants could make

the same criticism of his activities as they made here. We

therefore conclude that the evidence that the defendants

presented regarding the tobacco legislation does not per-

mit a finding of a reasonable perception of corruption or

undue influence due to large contributions.

The defendants also produced proof at trial that was

related to contributions by lobbyists to State Repre-

sentative Ode Maddox. In April, 1996, a group of lobbyists

held a fund-raiser for Mr. Maddox at the Arkansas Poultry

Federation in Little Rock. According to the trial court; at

that event Mr. Maddox raised a total of more than $22,000

from various lobbyists, PACs, and corporations. Our inde-

pendent review of the record shows that Mr. Maddox

received no contribution in excess of $1,000 from any single

source.

The record does not indicate any change in Mr.

Maddox’s political behavior following these donations, nor

does it indicate that Mr. Maddox sought to conceal his

contributions or their sources. Indeed, the defendants did

not even demonstrate that Mr. Maddox voted in any par-

ticular fashion with respect to any relevant issues following

the receipt of these donations. At bottom, the defendants’

A-14

complaint about Mr. Maddox’s contributions is that they

came from lobbyists who live outside his district and have

business before his committee from time to time. But this

complaint is not related to the size of the contributions

made to Mr. Maddox, and thus does not satisfy the com-

pelling state interest standard established in Buckley and

Carver. We conclude, then, that the evidence that the

defendants offered regarding Mr. Maddox’s fund-raising

practices does not permit a finding of a reasonable percep-

tion of corruption or undue influence stemming from large

contributions.

The defendants also adduced proof at trial of contribu-

tions by "real estate interests" to members of the Little

Rock municipal government. But, again, the defendants’

declared interest in regulating these has to do with the

identity of the contributor and that contributor’s interests

rather than with the size of individual contributions. Ac-

cording to records provided to the trial court, no member

of the Little Rock municipal government received more

than $1,000 from any so-called "real estate interest." The

record does not indicate any change in any official’s be-

havior following such contributions, nor did the defendants

demonstrate that any official attempted to conceal the

source of the contributions. The evidence instead shows

that the "real estate interests" contributed to candidates

who supported initiatives with which the contributors

agreed--that is, the "real estate interests" appear to have

chosen well which candidates to support.

We cannot say that this evidence is sufficient to estab-

lish that there could be a reasonable perception of corrup-

tion or undue influence due to large contributions. The

defendants identify, instead, a concern that "real estate

interests" gave money to officials of a municipal govern-

ment, and that those officials then voted on issues relevant

A-15

to real estate. This concern, as we have said above, is not

related specifically to the size of the contributions, and thus

is outside the scope of the compelling state interest as

defined by Buckley and Carver.

We also believe that the candidate contribution limits

set forth in Act I are too low to allow meaningful participa-

tion in protected speech and association. See Carver, 72

F.3d at 641-42. In Buckley, 424 U.S. at 20- 35, 96 S.Ct. 612,

the Supreme Court approved a $1,000 contribution limit

as a narrowly tailored means to address the problem of

large campaign contributions. As we noted in Day v.

Holahan, 34 F.3d 1356, 1366 (8th Cir.1994), cert. denied,

513 U.S. 1127, 115 S.Ct. 936, 130 L.Ed.2d 881 (1995),

inflation has eroded approximately 60 percent of the value

of a dollar since 1976. A $1,000 contribution in 1976 would

thus be worth about the same as a $2,500 contribution

today. We recognize that the contribution limit upheld in

Buckley does not constitute a constitutional minimum and

that we may not fine-tune the contribution limits estab-

lished by Act I. See Carver, 72 F.3d at 641. We must,

however, invalidate the contribution limitations if they are

different in kind from those that Buckley upheld. See id.

The provisions of Act I challenged here limited con-

tributions to a candidate to only $100 or $300, depending

upon the office. See Ark.Code Ann. § 7-6-203(a), § 7-6-

203(b). The limits prescribed by Act I, then, are (adjusted

for inflation) approximately 4 percent or 12 percent,

respectively, of the limit upheld in Buckley. In Day, 34 F.3d

at 1366, we concluded that a limitation of $100, or 4 percent

of the inflation-adjusted limit upheld in Buckley, con-

stituted a difference in kind from the limit upheld in Buck-

ley. In Carver, 72 F.3d at 641-42, we held that contribution

limitations of $100 or $300 per election cycle (2 percent or

6 percent, respectively, of the limit approved in Buckley )

A-16

were "dramatically lower," and thus different in kind, from

the limit upheld in Buckley. We believe that the limitations

in question here are similarly dramatically lower than, and

different in kind from, the limits approved in Buckley, and

thus are unconstitutionally low.

We note, finally, that even if there were a compelling

State interest to prevent the perception of corruption or

undue influence due to any of the various concerns iden-

tified here by the defendants — that is, supporting tobacco

legislation, accepting contributions from those appearing

before or having interests before one’s legislative commit-

tee, accepting contributions from supporters outside one’s

district, or the like — Act I was not narrowly tailored to

address them. As we have already noted, “[w]Jhere at all

possible, government must curtail speech only to the de-

gree necessary to meet the particular problem at hand, and

must avoid infringing on speech that does not pose the

danger that has prompted regulation." Massachusetts

Citizens for Life, 479 U.S. at 265, 107 S.Ct. 616. Act I,

however, is at once both overinclusive and underinclusive,

by limiting the free speech of all who would contribute

without addressing the specific concerns identified.

IV.

The plaintiffs challenged two provisions relating to the

activities of political action committees. The first of these

was a provision, enacted in 1990, that prohibited persons

from giving more than $200 each year to any one political

action committee. See Ark.Code Ann. § 7-6-201(9)(B).

State-enforced limits on contributions to political-ac-

tion committees stifle "not only free political speech, but

also free political association," and are reviewed according

to a strict scrutiny standard. Day, 34 F.3d at 1365. We must

A-17

therefore determine whether the defendants dem-

onstrated that the provision was narrowly tailored to ad-

dress the compelling state interest in avoiding corruption

or the appearance of corruption that stems from large

contributions.

We hold that this provision, like the provision that we

invalidated in Day, is not narrowly tailored to serve a

compelling state interest, because the annual limit is so low

as to be different in kind from the limit approved in Buck-

ley. See id. at 1366. In Day, we noted that a $100 limit (in

1994 dollars) for contributions to political action commit-

tees was, adjusted for inflation, equal to approximately 4

percent of the contribution limit upheld in Buckley. Id.

Thus, a $200 limit (in 1998 dollars) is equal to no more than

8 percent of the centribution limit approved in Buckley.

That limit is also less than 5 percent, even before any

adjustment for inflation, of the $5,000 limitation on con-

tributions to PACs approved by the Supreme Court in

California Medical Association v. Federal Election Commis-

ston, 423 U.S. 182, 195-99, 101 S.Ct. 2712, 69 L.Ed.2d 567

(1981) (plurality opinion).

There is also less of a danger of quid pro quo corruption,

such as the sort that one might presume from large con-

tributions given directly to candidates, when a contribution

is given to a PAC that does not itself wield legislative

power. Cf. Day, 34 F.3d at 1365. We believe that a $200

limit (in 1998 dollars) will significantly impair the ability of

individuals to exercise their political rights. The limit is

simply too low to allow for appropriately robust participa-

tion in protected political speech and association, and thus

violates the protections for free political speech and free

association that the First Amendment affords.

A-18

The plaintiffs also challenged the provision in Act I that

permitted small-donor political action committees to give

as much as $2,500 to a candidate (in contrast to the lower

limits applicable to contributions by ordinary political ac-

tion committees). See Ark.Code Ann. § 7-6-203(d); see

also Ark.Code Ann. § 7-6-201(a), § 7-6-201(b). We believe

that such differential treatment must be evaluated accord-

ing to a strict scrutiny standard. "Because the right to

engage in political expression is fundamental to our con-

stitutional system, statutory classifications impinging upon

that right must be narrowly tailored to serve a compelling

governmental interest." Austin v. Michigan Chamber of

Commerce, 494 U.S. 652, 666, 110 S.Ct. 1391, 108 L.Ed.2d

652 (1990).

The defendants argue that the differential treatment of

ordinary and small-donor PACs is justified because of the

difference in regulations as to their method of raising

money. The only compelling government interest that

might permit this infringement of First Amendment rights,

as: we have said, is preventing the reality or perception of

undue influence or corruption that might arise from large

contributions. As the Supreme Court has held, "To the

extent that large contributions are given to secure a politi-

cal quid pro quo from current and potential office holders,

the integrity of our system of representative democracy is

undermined." Buckley, 424 U.S. at 26, 96 S.Ct. 612. Osten-

sibly to alleviate this potential for corruption, Act I limited

individuals and ordinary PACs to giving $300 to certain

candidates and $100 to others (although we note that our

holding above returns these limits to their pre-Act I limits

of $1,000). See Ark.Code Ann. § 7-6-201(a), § 7-6-201(b).

Act I allowed small-donor PACs, however, to give $2,500

to any candidate. See Ark.Code Ann. § 7-6-203(d). This

differential treatment is said to be acceptable because

small-donor PACs themselves receive that money in con-

A-19

tributions of $25 or less, see Ark.Code Ann. § 7-6-

201(12)(B).

This explanation, however, is manifestly flawed, because

it focuses on the source of the funds given to a PAC rather

than on the entity from which the candidate receives the

funds. Because asmall-donor PAC receives small donations,

it is true that it is unlikely that any one contributor to a small-

donor PAC will be able to control that PAC. Act I, however,

ignored the possibility that the small-donor PAC itself will

seek to control a given candidate. A $2,500 contribution

would be even more likely to exacerbate this difficulty than

the $1,000 contribution limit applicable to most other con-

tributors. Indeed, if any contribution is likely to give rise to

a reasonable perception of undue influence or corruption, it

would be one from an entity permitted to contribute two-

and-a-half times the amount that most others are allowed to

contribute. The small-donor PAC provision is not, then,

narrowly tailored to serve the compelling government inter-

est of combating the reality or perception of undue influence

or corruption.

We reject the defendants’ argument that the plaintiffs

(namely, three individuals and a political action committee)

may not assert this equal protection argument because they

are not burdened to a greater extent by this provision than

small-donor PACs are. Ordinary PACs may, it is true, raise

more money per contribution than a small-donor PAC, but

the issue is their ability to speak freely by contributing

money to candidates for office. Insofar as that freedom is at

issue, the ordinary PACs are burdened more than the small-

donor PACs, because ordinary PACs may donate only the

amount that individuals may donate, while small-donor

PACs may donate $2,500. We believe, then, that the plain-

tiffs here meet the requirements set forth in California

A-20

Medical Association, 453 U.S. at 200, 101 S.Ct. 2712.

The plaintiffs also challenged the constitutionality of

Ark.Code Ann. § 7-6-224. This provision states only that

local governments "shall have the authority to establish

reasonable limitations" on campaign contributions and ex-

penditures, and appears to be simply an allocation by the

state of Arkansas of certain of its plenary powers to local

governments: It does not set any specific limits on campaign

contributions or expenditures, and thus cannot restrict the

First Amendment freedoms of any person or entity seeking

to contribute to or spend the revenues of a political cam-

paign. Were a local government to exercise the power

granted it by § 7-6-224, its action might then be challenged

in the same manner as the actions of the defendants were

challenged in this suit. But no such action has yet been taken

and brought to the attention of a court. Ark.Code Ann.

§ 7-6-224 thus does not present a federal constitutional con-

troversy that is ripe for adjudication at this time.

VI.

Those provisions of the Arkansas statutes in conflict with

our analysis above are unconstitutional and unenforceable.

We must now determine whether the invalid provisions of

Act I may be severed from the remainder of its provisions.

Severability is a matter of state law. Leavitt v. Jane L.,518

U.S. 137, 139, 116 S.Ct. 2068, 135 L.Ed.2d 443 (1996) (per

curiam ). The Supreme Court of Arkansas looks to two

considerations to determine severability: "(1) whether a

A-21

single purpose is meant to be accomplished by the act; and

(2) whether the sections of the act are interrelated and

dependent upon each other." U.S. Term Limits, Inc. v. Hill,

316 Ark. 251, 872 S.W.2d 349, 357 (1994). The court

provided further guidance, moreover, in its observation that

"it is important whether the portion of the act remaining is

complete in itself and capable of being executed wholly

independent of that which was rejected." Jd. at 358. A

severability clause, such as the one provided in Act I, is

relevant but not determinative of whether individual

provisions of the act will be considered severabie. /d.

Applying the principles set forth in U.S. Term Limits, we

find no single purpose behind Act I with which our ruling

could interfere. Act I provided for a series of campaign

finance reforms, including the independent expenditure

committee and certain tax provisions, that remain unaf-

fected by the outcome of this case. We can find no reason

not to honor the intent of the drafters of Act I that, to the

extent possible, its various provisions should stand on their

own.

Vil.

We therefore affirm in part and reverse in part the

judgment of the trial court. We remand the case to the

district court for the entry of declaratory and injunctive relief

consistent with this opinion.

APPENDIX B

B-1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

No. LR-C-97-0089.

Ron Russell, Kent Ingram, William R. Austin,

and Associated Industries of

Arkansas Political Action Committee,

Plaintiffs,

Troy Burris, in his official capacity

as chairperson of the Arkansas Ethics

Commission, and Candi Sue Russell,

Marvin Delph, Rita Looney, and Norton

Wilson, in their official capacities

as members of the Arkansas Ethics

Commission,

Defendants,

and

Citizens for Clean Government,

Defendant-Intervenor.

MEMORANDUM & ORDER

The plaintiffs seek a declaratory judgment that Arkansas

Initiated Act I of 1996 (Act I) violates their First Amend-

ment rights to freedom of political speech and association, |

‘First Amendment protections are made applicable to the states by

the Fourteenth Amendment. See McIntyre v. Ohio Elections Comm’n,

514 US. 334, 336 n. 1, 115 S.Ct. 1511, 1514 n. 1, 131 L.Ed.2d 426 (1995).

B-2

and their Fourteenth Amendment right of equal protection

of the laws. They seek to enjoin the enforcement of both Act

I and Arkansas Code 7-6-201(9)(B), a law that pre-dated Act

I. The plaintiffs’ motion is granted in part and denied in part:

A. Enforcement of Arkansas Code section 7-6-203(a)(2)

and (b)(2), which imposes a $300 per election contribu-

tion limit applicable to enumerated statewide offices, is

enjoined.

B. Arkansas Code section 7-6-203(a)(1) and (b)(1),

which imposes a $100 per election contribution limit

applicable to all other offices, is upheld, except as to the

offices of Supreme Court Justice and Court of Appeals

Judge. Application of this section to the offices of

Supreme Court Justice and Court of Appeals Judge, is

enjoined.

C. Arkansas Code section 7-6-201(9)(B), which imposes

a $200 per year limit on contributions to approved politi-

.cal action committees, is upheld.

D. Arkansas Code sections 7-6-201 and -203(d), pertain-

ing to small donor political action committees, are

upheld against the plaintiffs’ challenge on equal protec-

tion grounds.

E. The plaintiffs lack standing to challenge Arkansas

Code sections 7-6- 201(13) and (14), and 7-6-203(k),

which address contributions to an independent expendi-

ture committee.

F. The plaintiffs’ challenge to Arkansas Code section

7-6-224, concerning the authority of local jurisdictions to

B-3

enact more restrictive campaign contribution regula-

tions than state law, is dismissed because it is not ripe.

I. Background

A. Actl

Act I, which amended Arkansas’ existing campaign

contribution laws, was approved by voters on November 5,

1996, by a two-to-one margin. Before Act I, a candidate

could receive up to $1000 in contributions per election from

individuals, corporations, unions, political action commit-

tees (PACs) and other groups. Ark.Code Ann. 7-6-201(1),

-203(a) (Michie Supp.1995). In addition, a state political

party could contribute up to $2509 per election to that

party’s candidate. Jd. 7-6-203(d). Since 1990, approved

PACs have been limited to contributions of no more than

$200 per year from any person. /d. 7-6-201(9). While not

established by Act I, this limitation is attacked by the plain-

tiffs in this action.

Act I made substantial changes to Arkansas’ campaign

contribution law. Under the Act I amendments, candidates

for the offices of Governor, Lieutenant Governor, Secretary

of State, State Treasurer, State Auditor, Attorney General,

and Commissioner of State Lands ("statewide candidates")

may not accept campaign contributions exceeding $300 per

election from any person.” Candidates for all other offices,

*Section 2 of Act I states in part:

Arkansas Code 7-6-203(a) [and] (b) . .. are hereby amended to read

as follows:

(a)(2) It shall be unlawful for any candidate for the office of Gover-

nor, Lieutenant Governor, Secretary of State, Treasurer of State, Auditor

B-4

including Arkansas Supreme Court Justices and Court of

Appeals Judges, are limited to contributions of no more than

$100 per election from any person.> Although state

Supreme Court Justices run statewide, they are not included

in the category of "statewide candidates" under the Act I

limitations. Arkansas Court of Appeals Judges are elected

from districts of approximately 400,000 persons. By way of

comparison, Arkansas Senate districts include approxi-

mately 68,000 persons; Arkansas House of Representatives

districts include a population of approximately 24,000.

of State, Attorney General, and Commissioner of State Lands, or for any

person acting on the candidate’s behalf, to accept campaign contributions

in excess of three hundred dollars ($300) per election from any person.

(b)(2) It shall be unlawful for any person to make a contribution to

a candidate for the office of Governor, Lieutenant Governor, Secretary

of State, Treasurer of State, Auditor of State, Attorney General, and

Commissioner of State Lands, or to any person acting on the candidate’s

behalf, which, in the aggregate, exceeds three hundred dollars ($300) per

election.

3Section 2 of Act I provides in part:

Arkansas Code 7-6-203(a) [and] (b) . .. are hereby amended to read

as follows:

(a)(1) It shall be unlawful for any candidate for any public office,

except the office of Governor, Lieutenant Governor, Secretary of State,

Treasurer of State, Auditor of State, Attorney General, and Commis-

sioner of State Lands, or for any person acting on the candidate’s behalf,

to accept campaign contributions in excess of one hundred dollars ($100)

per election from any person.

(b)(1) It shall be unlawful for any person to make a contribution to

a candidate for any public office, except the office of Governor, Licu-

tenant Governor, Secretary of State, Treasurer of State, Auditor of State,

Attorney General, and Commissioner of State Lands, or to any person

acting on the candidate’s behalf, which, in the aggregate, exceeds one

hundred dollars ($100) per election.

B-5

Act I did not disturb the right of political parties to

contribute up to $2500 to a candidate per election,’ and it

creates a small donor PAC subject to the same $2500 limit.

Neither did the Act alter the definition of "persons," which

remains: "any individual, proprietorship, firm, partnership,

joint venture, syndicate, labor union, business trust, com-

pany, corporation, association, committee, or any other or-

ganization or group of persons acting in concert. It shall also

include organized political parties. . . ." Id. § 7-6-201(1).

Because approved PACs are persons by definition, Act I

limits their contributions to statewide candidates to $300 per

election and contributions to other candidates to $100 per

election. Act I also limits aggregate contributions by any

person to independent expenditure committees to $500 per

‘Section 2 of Act I requires in part:

Arkansas Code 7-6-203 .. . (d) [is] hereby amended to read as follows:

(d) However, an organized political party as defined in Arkansas

Code 7-1-101(1) and a small donor political action committee may con-

tribute up to two thousand five hundred dollars ($2500) to each candidate

per election.

‘Section 1 of Act I requires in part:

Arkansas Code 7-6-201 is hereby amended to add the following new

subdivision| }:

(12) A "small donor political action committee" means any person

who: (A) Receives contributions from one or more individuals in order

to make contributions to candidates; (B) Does not accept any contribu-

tion or cumulative contributions in excess of twenty-five doilars ($25)

from any individual in any calendar year; and (C) Is registered pursuant

to Arkansas Code 7-6-215 prior to making contributions to candidates.

"Small donor political action committee” shall not include an organized

political party, the candidate’s own committee, or an exploratory commit-

tee.

®Section 1 of Act I provides in part:

Arkansas Code 7-6-201 is hereby amended to add the following new

subdivisions:

(13) An independent expenditure is any expenditure which is not a

calendar year.’ Introducing a public subsidy element, Act

I provides for state tax credits for campaign contributions of

$50 per year on an individual return and $100 on a joint

return. Additionally, Act I allows municipalities, counties

contribution and: (A) expressly advocates the election or defeat of a

clearly identified candidate for office; and (B) is made without arrange-

ment, cooperation, or consultation between any candidate, or any

authorized committee or agent of such candidate, and the person making

the expenditure or any authorized agent of that person; and (C) is not

made in concert with, or at the request or suggestion of, any candidate,

or any authorized committee or agent of the candidate.

(14) "Independent expenditure committee" means any person who

receives contributions from one or more persons in order to make an

independent expenditure and is registered pursuant to Arkansas Code

7-6-215 prior to making expenditures.

7Section 3 of Act I declares:

Arkansas Code 7-6-203 is hereby amended to add the following new

subsection:

(k) An independent expenditure committee may not accept any

contribution or cumulative contributions in excess of five hundred dollars

($500) in value from any person in any calendar year.

8Section 10 of Act I provides the following:

Arkansas Code Title 7, Chapter 6, Subchapter 2 is amended by

adding the following new section: 7-6-222. Tax Credits for Certain In-

dividual Political Contributions.

(a) Pursuant to regulations to be adopted by the Arkansas Depart-

ment of Finance and Administration, a single credit against individual

Arkansas income taxes shall be allowed for money contributions made by

the taxpayer in a taxable year to one or more of the following:

(1) A candidate seeking nomination or election to a public office at

an election, or to the candidate’s campaign committee; or

(2) A small donor political action committee as defined in Arkansas

Code 7-6-201; or

(3) An approved political action committee as defined in Arkansas

Code 7-6-201; or

(4) An organized political party as defined in Arkansas Code 7-1-

101(1).

B-7

and townships to set contribution limits lower than those set

by state law.

B. The Parties

The plaintiffs are three individuals and a registered

Arkansas PAC. Plaintiff Kent Ingram is a businessman,

former state senator, and frequent campaign contributor,

who had made numerous campaign contributions at levels

that would exceed the Act I limits, and who desires to

continue to contribute at the higher levels. Plaintiff William

R. Austin is a businessman who wishes to contribute in

amounts exceeding the Act I limits. Plaintiff Ron Russell is

the Executive Vice-President of the Arkansas Chamber of

Commerce, a former mayor, and campaign contributor in

amounts that would exceed current Act I limits. Mr. Russell

also wishes to contribute at the higher levels. Plaintiff As-

sociated Industries of Arkansas Political Action Committee

(AIAPAC) is an approved PAC favoring business interests,

that asserts the right to contribute $2500 per election to

candidates, just as asmall donor PAC may do. Plaintiffs

(b) The credit allowed by subsection (a) of this section shall be the

aggregate contribtions, not to exceed fifty dollars ($50) on an individual

tax return, or the aggregate contributions, not to exceed one hundred

dollars ($100) on a joint return.

*Section 12 of Act I provides:

Arkansas Code Title 7, Chapter 6, Subchapter 2 is amended by

adding the following new section:

7-6-224. Authority of Local Jurisdictions

Municipalities, counties and townships shall have the authority to

establish: reasonable limitations on the time periods candidates for local

office shall be allowed to solicit contributions; limits on contributions to

local candidates at amounts lower than those set by state law; and

voluntary campaign expenditure limits for candidates seeking election to

their respective governing bodies.

B-8

Ingram and Russell are officers of the State Chamber PAC.

Plaintiffs Austin and Russell are officers of AIAPAC.

The defendants are the individual members of the

Arkansas Ethics Commission, sued in their official capa-

cities. The Commission administers Arkansas campaign

finance and disclosure laws and investigates alleged viola-

tions of these laws. Defendant-Intervenor Citizens for

Clean Government (Citizens), is a coalition of organizations

including the Association of Community Organizations for

Reform Now (ACORN), Common Cause, the New Party,

and a local union. Citizens was the principal proponent of

Act I.

C. The Issues

The plaintiffs claim that the following provisions of Act

I violate their rights to freedom of political expression

(speech) and association under the First Amendment: (1)

the $100 and $300 limits on campaign contributions to can-

didates; (2) Act I’s authorization for local jurisdictions to

set even lower contribution limits; and (3) the $500 limit to

annual contributions a person may give to an independent

expenditure committee. The plaintiffs challenge, on the

same grounds, Arkansas’ $200 per person limit on annual

contributions to an approved PAC. As noted earlier, this

latter limit was approve. i by a ballot initiative in 1990, and

thus pre-dated Act I. ‘be plaintiffs claim further that in

allowing small donor PACs to contribute $2500 per election

to a candidate, Arkansas denies equal protection of the laws

to approved PACs, which are subject to the $100 and $300

individual contribution limits. The defendants and Citizens

argue that plaintiffs lack standing to assert these claims.

B-9

II. Discussion

A. Standing

This Court’s jurisdiction is restricted by the U.S. Con-

stitution, which allows federal courts to hear only "cases" and _ |

"controversies." U.S. Const. art. III, 2, cl. 1. The Court

cannot render advisory opinions. Whether a plaintiff has

standing to invoke the jurisdiction of the federal courts is a

threshold question in any case. To establish standing a

plaintiff must show: (1) that she suffered an injury in fact--

"an invasion of a legally protected interest" that is both

"concrete and particularized," and "actual or imminent, not

‘conjectural’ or ‘hypothetical’ "; (2) a causal connection

between the injury and the challenged action; and (3) that

a favorable decision is likely to redress her injury. Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130,

2136, 119 L.Ed.2d 351 (1992) (citations omitted). When a

party brings "a pre-enforcement challenge to a statute that

both provides for criminal penalties and abridges First

Amendment rights, ‘a credible threat of present or future

prosecution itself works an injury that is sufficient to confer

standing.’ " Minnesota Citizens Concemed for Life v. FEC,

113 F.3d 129, 131 (8th Cir.1997) (quoting New Hampshire

Right to Life Political Action Comm. v. Gardner, 99 F.3d 8,

13 (ist Cir.1996)). The Honorable H. Franklin Waters dis-

cusses this precise issue in a case challenging the con-

Stitutionality of Act I. Arkansas Right to Life State Political

Action Comm. v. Butler, 972 F.Supp. 1187 (W.D.Ark.1997).

In Arkansas Right to Life, the defendants argued that the

plaintiffs lacked standing to raise a claim against Defendant

Butler, a State Attorney for Benton County, Arkansas. The

defendants contended that there was no real and immediate

threat that Butler would prosecute the plaintiffs, because

B-10

prosecutors had not brought criminal charges for violations

of state contribution limits since the limits were enacted in

1975. The court rejected this reasoning, concluding instead

that this time span was not sufficient to show that failure to

prosecute under the Act was a "deeply embedded way that

Arkansas carries out state policy. The fact that Arkansas has

recently chosen to address the issue through passage of the

Act provides ample grounds for believing that a credible

threat of prosecution exists under the Act." /d. at 1192.

Finding that the defendants had failed to introduce compell-

ing evidence that the plaintiffs did not face a credible threat

of prosecution, Judge Waters concluded. "the Act has been

recently enacted, it facially restricts the plaintiffs, and viola-

tion of the statute can subject the plaintiffs to criminal

prosecution." /d. at 1192.

Here, the plaintiffs testified that they want to contribute

more to candidates, PACs, and independent expenditure

committees than is allowed by the limits established by

Arkansas law as amended by Act I. The defendants and

Citizens counter that these assertions are largely speculative

and unsupported by the facts. I find that the Act I amend-

ments present a credible threat of present or future prosecu-

tion with respect to each of the plaintiffs’ claims. Arkansas

Right to Life, 972 F.Supp. at 1192. Therefore, the Plaintiffs

have standing, except in their challenge to the $500 limit to

annual contributions a person may give to an independent

expenditure committee. This exception arises because none

of the plaintiffs could think of an independent expenditure

committee to which they had contributed in the past or to

which they planned to contribute, although they stated they

may wish someday to contribute to such a committee. The

plaintiffs’ stated desire to contribute to independent expen-

diture committees is too conjectural to support a finding of

B-11

a credible threat of present or future prosecution. There-

fore, on this issue, I find that the plaintiffs lack standing.

B. Ripeness

One other claim fails to meet a threshold requirement.

The plaintiffs allege a violation of their First Amendment

rights because Act I authorizes local jurisdictions to set even

lower contribution limits than the state imposes. This issue

is not ripe for consideration, because no local jurisdiction

has yet set a lower contribution level. I can "only hypothesize

that such an event will come to pass, and it is only on this

basis that the constitutional claim could be adjudicated at

this time." Babbitt v. United Farm Workers Nat’l Union, 442

U.S. 289, 304, 99 S.Ct. 2301, 2312, 60 L.Ed.2d 895 (1979).

See also Abbott Laboratories v. Gardner, 387 U.S. 136, 148-

49, 87 S.Ct. 1507, 1515-16, 18 L.Ed.2d 681 (1967).

C. Limits on Contributions

1. Contributions to candidates

Any analysis of the constitutionality of limited contribu-

tions to candidates under Act I must begin with Buckley v.

Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976). In

Buckley, the Supreme Court upheld as constitutional

provisions of the Federal Election Campaign Act of 1971

(FECA) limiting campaign contributions in federal elec-

tions. The Court upheld FECA’s $1000 per election con-

tribution limit to single candidates by an individual

contributor or group, and a $5000 limit to candidates by a

political committee. 424 U.S. at 23-24, 35-36, 96 S.Ct. at 637,

642-43. After recognizing that the freedoms of speech and

association "lie[ ] at the foundation of a free society," the

Court warned that "[nJeither the right to associate nor the

right to participate in political activities is absolute." Jd. at

B-12

25, 96 S.Ct. at 637-38 (citations omitted). The Court in-

structed that these rights may be limited if the limitation is

"closely drawn to avoid unnecessary abridgment of associa-

tional freedoms" and if the state "demonstrates a sufficiently

important interest." /d., at 25, 96 S.Ct. at 637-38.

In a decision directly applicable here, the Eighth Circuit,

only two years ago, decided the constitutionality of a Mis-

souri initiative on campaign contribution limits. The court

found the initiative’s limits too low to pass constitutional

muster, in spite of the fact that the initiative passed by a

three-fourths majority. Carver v. Nixon, 72 F.3d 633 (8th

Cir.1995), cert. denied, US. _, 116 $.Ct. 2579, 135

L.Ed.2d 1094 (1996). ° This Missouri law limited campaign

contributions by a person or committee to a candidate or

candidate committee to: (1) $100 for candidates in districts

with populations of less than 100,000; (2) $200 for non-

statewide candidates in districts with a population of 100,000

or more; and (3) $300 for statewide candidates. Jd. at 635.

Statewide candidates were defined by the Missouri statute

as ‘Governor, Lieutenant Governor, Attorney General,

Auditor, Treasurer, and Secretary of State. The Missouri

limits applied to an “election cycle," defined by Missouri

statute as "the period of time from general election for an

office until the next general election for the same office." /d.

at 635 & n. 3 [citing Mo.Ann.Stat. 130.100 (Vernon

Supp.1995)]. An election cycle included both the primary

and the general election. /d. Thus, a candidate for statewide

office in Missouri could receive a total of $300 for both the

primary and general elections. Conversely, Arkansas’ limit

Fora thoughtful discussion of Carver, see William J. Connolly, How

Low Can You Go? State Campaign Contribution Limits and the First

Amendment, 76 B.U.L.Rev. 483 (1996).

B-13

is $300 per election. In Arkansas, a candidate for one of the

enumerated statewide races could receive a total of $900,

assuming a primary race, a run off, and then a general

election.

In Carver, the plaintiff argued, as the plaintiffs do here,

that the contribution limits unconstitutionally infringed on

his First Amendment rights to political expression and

freedom of association. After noting that individual Justices

of the U.S. Supreme Court had voiced differing opinions on

the level of scrutiny applicable to contribution limits, the

Carver court concluded that, "[t]he Court has not ruled that

anything other than strict scrutiny applies" in cases involving

such limits. Jd. at 637.'' The court thus applied strict

‘In his partial concurrence and dissent in Buckley, Justice White

argued that while campaign contributions help produce speech, they are

not themselves speech protected by the First Amendment. Justice White

reasoned that "[FECA] regulates . . . giving and spending money, acts that

have First Amendment significance not because they are themselves

communicative with respect to the qualifications of the candidate, but

because money may be used to defray the expenses of speaking or

otherwise communicating about the merits or demerits of federal can-

didates for election." 424 U.S. at 259, 96 S.Ct. at 745. Justice White would

not have decided the challenge to contribution limits on First Amendment

speech grounds. Rather, he saw the issue as one depending on whether

the government’s nonspecch interests in regulating "the use of money in

political campaigns are sufficiently urgent to justify the incidental effects"

that limits have on the First Amendment rights of candidates. /d. at 260,

96 S.Ct. at 746. Justice White reiterated this view almost 10 years after

Buckley:

The First Amendment protects the right to speak, not the right to

spend, and limitations on the amount of money that can be spent are

not the same as restrictions on speaking. I agree with the majority

that the expenditures in this case "produce" core First Amendment

speech. But that is precisely the point: they produce such speech; they

are not speech itself. ... Such a house-that-Jack-built approach could

B-14

scrutiny and required the state to prove that the statute’s

limitations were "narrowly tailored to meet a compelling

state interest." /d. at 638. The court emphasized that when

government defends a regulation on speech it must dem-

onstrate that the regulation will "alleviate these harms in a

direct and material way." /d. at 644 [citing Turner Broad. Sys.,

Inc. v. FCC, 512 U.S. 622, 664, 114 S.Ct. 2445, 2470, 129

L.Ed.2d 497 (1994) (Kennedy, J., plurality)]. Where First

Amendment freedom of association concerns are threat-

ened, the court found that, under Buckley, the regulation

must be "closely drawn to avoid unnecessary abridgment" of

these freedoms. /d. at 644 (quoting Buckley, 424 U.S. at 25,

96 S.Ct. at 637-38).

Addressing the state’s compelling interest, the Eighth

Circuit declared that the Buckley Court "identified the com-

pelling interest as ‘the prevention of corruption and the

appearance of corruption spawned by the real or imagined

coercive influence of large financial contributions on

candidates’ positions and on their actions if elected to of-

fice.’" Id. at 638 (quoting Buckley, 424 U.S. at 25, 96 S.Ct.

equally be used to find a First Amendment right to a job or to a

minimum wage to "produce" the money to "produce" the speech.

FEC v. National Conservative Political Action Comm., 470 U.S. 480, 508,

105 S.Ct. 1459, 1474, 84 L.Ed.2d 455 (1985) (internal citation omitted).

It has been suggested, in jest, that if "spending money in politics is

really speech, then the laws against bribery should be unconstitutional."

Robert Peck, et al., Constitutional Implications of Campaign Finance

Reform, 8 Admin.L.J.Am.U. 161, 186 (1994) (comments of Professor

Jamin B. Raskin). I think the point is that limiting campaign contributions

should not be equated with limiting protected speech. If I were writing

on a clean slate, I might well be persuaded that Justice White’s view is

correct; but his opinion has remained a minority view.

B-15

at 638) (emphasis in original).'* The Eighth Circuit con-

cluded that the district court, which had upheld the Missouri

statute as constitutional, had erred in extending Buckley to

limit ali contributions, not just large ones. /d. at 639. In

other words, under the explicit holding in Carver, if $1000 is

not large, the analysis ends and the plaintiffs win. This leaves

me the difficult task of determining what a "large" contribu-

tion is in the context of Arkansas elections.

The Carver court concluded that the district court had

posed, but had not answered, the question of whether the

Missouri limits were unconstitutionally low. Jd. at 640. The

court noted that the district court’s conclusions extended

only to the question of whether the limits were narrowly

tailored. /d. ("The fact that [the Missouri initiative] sets forth

graduated limits has nothing to do with whether the limits

are so low as to be unconstitutional.") Turning once more

to Buckley, the court observed that, "[a]lthough we certainly

are not free to fine tune the limits established by [the Mis-

souri statutes], and we generally accept the limits established

by the legislature, Buckley instructs that we must invalidate

that judgment when the ‘distinctions in degree’ become

‘differences in kind.’" /d. at 641 (quoting Buckley, 424 U.S.

at 30, 96 S.Ct. at 640). After independently reviewing the

facts, the Eighth Circuit held that the contribution limita-

tions did, in fact, amount to a "difference in kind" compared

to the $1000 limits upheld in Buckley. Id. at 645. At first

blush, it might appear that Carver requires an out-of-hand

ruling for the plaintiffs. However, I believe that a close in-

2This portion ui Duckley quoted in Carver is actually the Supreme

Court’s characterization of the parties’ definition of the state interest, and

was not an explicit holding of the Supreme Court.

B-16

spection reveals constitutionally important differences be-

tween the Carver case and the claims in this case.

As noted, the Carver court held that the state’s compell-

ing interest in burdening political activity protected by the

First Amendment was that of limiting "the reality or percep-

tion of undue influence and corruption from large contribu-

tions." /d. at 639. Prior to the passage of the law challenged

in Carver, Missouri had no contribution limits. The court

noted two extreme examples of corruption presented at

trial: a $420,000 contribution from a corporation’s PAC to

various local races, and the "Keating Five" scandal. /d. at

642. In finding that the Missouri law was not narrowly-

tailored to avoid corruption, the court declared that "[a]

$420,000 contribution is a far cry from the [Missouri] limits."

Id. In contrast, Arkansas has limited individual contributions

to $1000 since 1975, and there was no evidence at trial of

campaign contributions exceeding $1000. I believe that the

contribution limits in place prior to Act I were intended to

address Arkansas’ interest in limiting real or perceived

undue influence or corruption from extremely "large" con-

tributions, such as the $420,000 contribution mentioned by

the Eighth Circuit in Carver, and the $2 million contribution

to the 1972 Presidential campaign from dairy interests

referred to in Buckley. 424 U.S. at 27 n. 28, 96 S.Ct. at 638

n. 28 [citing the D.C. Circuit’s discussion of contribution

abuses in the same case, Buckley v. Valeo, 519 F.2d 821, 840

n. 36 (D.C.Cir. 1975) (per curiam)]. However, I conclude

that Arkansas, having initially established contribution

The Arkansas Legislature first established a $1000 per election

contribution limit in 1975, which it increased to $1500 per election in 1981.

In 1990, the voters passed Initiative Measure No. 1, returning the limit to

$1000. Ark. Code Ann. § 7-6-203 (historical notes).

B-17

limits intended to avoid corruption associated with large

contributions, may subsequently lower the level of such

limits, if the limits have not adequately addressed that harm,

and the lower limits are not so low as to render them a

difference in kind rather than a difference in degree. So,

what is "large," and what is "too low"? "Ay, there’s the rub."

I find that, at least regarding the non-statewide offices,

the defendants and Citizens have shown that Arkansas’

campaign contribution laws prior to Act I have not ade-

quately addressed the harm of real or perceived undue

influence or corruption arising from large contributions.

For example, the defendants and Citizens introduced

evidence of an April 1996 fundraiser organized by registered

business interest lobbyists for Representative Ode Maddox,

the Chairman of the Arkansas General Assembly’s House

Insurance and Commerce Committee. The event was held

at the Arkansas Poultry Federation office in Little Rock.

Representative Maddox’s district is in the Ouachita Moun-

tains in the western part of the state. None of the con-

tributors resided in Representative Maddox’s district, and

most if not all of these contributors had lobbied before

members of the Insurance and Commerce Committee. Sig-

nificantly, of the more than $30,000 Representative Maddox

raised for his campaign, over $22,000 came from various

lobbyists, business related PACs, and corporations, includ-

ing several contributions of $1000.

I hasten to point out that no evidence of actual undue

influence was introduced, and the defendants and Citizens

did not contend there was any such evidence. Repre-

14 William Shakespeare, Hamlet, act 3, sc. 1, 1. 56.

B-18

sentative Maddox’s uncontradicted testimony was that he

had never solicited "a dime" in contributions in any race

during his more than forty years of service in the Arkansas

General Assembly. Furthermore, Representative Maddox

testified that he gave all interested parties an equal oppor-

.unity to be heard before his committee, regardless of contri-

butions. I credit this testimony. Nonetheless, the question

of appearances remains.

Defendants and Citizens introduced evidence concern-

ing the sponsoring of a “tobacco bill" sponsored by State

Representative James Dietz. This bill, if enacted, would

have kept local governments from passing ordinances

regulating tobacco, leaving all such regulation to the state.

The evidence reflected that Representative Dietz received

contributions totaling $2700 from tobacco interests in one

election cycle. The evidence also revealed that tobacco

interests had made several contributions to the members of

the House Committee who voted for the bill. While Repre-

sentative Dietz publicly defended this bill on the merits

(according to a newspaper article introduced into evidence),

it received widespread media attention, and was roundly

condemned as "bad," "special interest" legislation. It would

be hard to argue that the media, and presumably, therefore,

the public, did not in this instance perceive undue influence

from "large" contributions.

Citizens also introduced an August 1997 report compiled

by ACORN of the 1994 election cycle for the Arkansas

House and Senate races. The report examined contribu-

tions in excess of $100, and found that special interest group

contributions made up seventy percent of the total. After

subtracting contributions from non-business related interest

groups, the report noted that business related interest

groups still accounted for between sixty-two and sixty-five

B-19

percent of contributions in excess of $100. Defendants’

witness Robert Stern testified concerning a study conducted

by the Center for Governmental Studies that listed cam-

paign contribution patterns over the past three election

cycles in Arkansas. Mr. Stern’s testimony echoed the find-

ings of the ACORN report. He explained that business

interest contributions had provided the major part of cam-

paign contributions.

The evidence presented here convinces me that a "large"

contribution depends — at least in part — onits size relative

to total campaign expenses. The Supreme Court has in-

structed that the compelling interest at issue "relates to the

perception of undue influence of large contributions to a

candidate: ‘[t]o the extent that large contributions are given

to secure a political quid pro quo from current and potential

office holders, the integrity of our system of representative

government is undermined. . . .’ " Citizens Against Rent

Control/Coalition for Fair Housing v. City of Berkeley, 454

US. 290, 297, 102 S.Ct. 434, 437-38, 70 L.Ed.2d 492 (1981)

(citations and quotations omitted). I take this to mean that

a contribution large enough to support at least the ap-

pearance of a political quid pro quo is "large." This inter-

pretation is, of necessity, fact-specific. The record here,

unlike the meager record available to the court in Carver

makes such a determination possible.

In the case of Representative Maddox, for example,

approximately seventy percent of his campaign funds came

from business interests in individual contributions ranging

between $200 and $1000. Assuming Representative Mad-

dox spent everything he raised, a single $1000 contribution

accounted for more than three percent of his total expenses.

It is both the large size of these contributions relative to

Representative Maddox’s total campaign expenditures and

B-20

the nature of the contributors that could give rise to a

reasonable perception of undue influence. Similarly, of his

total campaign expenses, Representative Dietz raised

roughly twenty percent from tobacco interests, which con-

tributed in amounts between $200 and $1000. Considered

in the light of Representative Dietz’s subsequent support for

the tobacco bill, these contributions are large enough to

support a reasonable perception of undue influence.

According to Mr. Stern’s study, in the general election

races for the Arkansas State Senate in 1992, 1994, and 1996,

candidates raised an average of $22,500 including the

candidates’ own money and loans. During the same election

years, candidates for the Arkansas House of Repre-

sentatives raised, on average, $7550, also including personal

contributions and loans. Of these averages, a single $1000

contribution equates to over four percent in the Senate

races, and over thirteen percent in the House races. Clearly,

a single $1000 contribution in these elections is significant.

Therefore, I find that, for these non- statewide races, a $1000

contribution is sufficiently large to support a reasonable

perception of undue influence.

In contrast, in Arkansas’ 1994 gubernatorial general

election, each candidate spent over $900,000. Of this total,

$1000 is only about one-tenth of one percent. I conclude

that under these facts, a $1000 contribution in a statewide

race is not large enough to readily support a reasonable!»

perception of undue influence. This conclusion finds sup-

port in the fact that the Buckley Court did not consider a

'S] use the word "reasonable" because I assume that any contribution

would cause some supersensitive souls to perceive undue influence.

B-21

$1000 contribution to be large. The FECA contribution

limits considered in Buckley applied to races for both houses

of Congress as well as the Presidential race. Of course, U.S.

Senators are elected in each state on a statewide basis, and

U.S. Representatives on a district basis. As of the 1990

census, Arkansas has four congressional districts, each with

a population of roughly 590,000. While Buckley did not hold

that $1000 is a “constitutional minimum," it seems clear that

a $1000 contribution in 1997 dollars is not "large" in a

statewide race when it was not large in 1976 dollars (when

Buckley was decided), or in 1971 dollars (when FECA was

enacted).!

Having decided that a $1000 contribution is not large for

statewide races in Arkansas, I find that the State lacks the

compelling interest necessary to justify further limiting con-

tributions in the "statewide races," as well as elections for the

offices of state Supreme Court Justices and Judges of the

Court of Appeals.

But what of non-statewide races? Because I have con-

cluded that a $1000 contribution to candidates for non-

statewide races in Arkansas is large, I must consider whether

the $100 limit imposed by Act I is too small to be constitu-

tional. In Buckley, the Supreme Court observed that the

FECA limits were not structured to take into account the

widely ranging financial needs of the congressional and

presidential campaigns. The Court declared, " ‘[i]f it is

1The Eighth Circuit, in Day v. Holahan, 34 F.3d 1356, 1366 (8th Cir.

1994) noted that a $100 contribution in 1976 dollars was worth $40.60 in

1994. Dr. Herbert Alexander, a witness for the plaintiffs, testified that a

$1000 contribution when FECA went into effect (1971) would be worth

from $300 to $325 in 1997.

B-22

satisfied that some limit on contributions is necessary, a

court has no scalpel to probe, whether, say, a $2,000 ceiling

might not serve as well as $1,000.’ Such distinctions in

degree become significant only when they can be said to

amount to differences in kind." Buckley, 424 U.S. at 30, 96

S.Ct. at 640 (quoting Buckley v. Valeo, 519 F.2d at 842).

As noted, the Carver court found the Missouri contribu-

tion limits to be a difference in kind compared to the FECA

limits considered in Buckley. Carver, 72 F.3d at 644. In its

degree-versus-kind analysis, the Carver court emphasized:

(1) the Missouri limits were per election cycle as opposed to

per election in Buckley; (2) after adjusting for inflation, the

Missouri iimits were an even smaller fraction of the FECA

limits upheld in Buckley than the bare numbers would indi-

cate; (3) the state’s evidence concerning corrupting con-

tributions involved amounts in the hundreds of thousands of

dollars, whereas the contribution limits imposed by the chal-

lenged statute ranged only from $100 to $300 dollars; (4)

the state adduced no evidence that the particular limits

chosen were narrowly tailored to address corruption or the

appearance of corruption associated with large campaign

contributions; and (5) a much higher percentage of con-

tributors would be affected by the Missouri limits than were

affected by the FECA iimits at issue in Buckley. Carver, 72

F.3d at 641-44.

In deciding whether the $100 limit represents a dif-

ference in kind, I begin by addressing the factors upon which

the Eighth Circuit relied in Carver. First, Act I’s contribution

limits apply ona per election basis. This means that the Act’s

limits apply anew in each election within an election cycle

— primary, general election, and any run-off. In contrast,

the Missouri law applied to the election cycle as a single unit.

Second, the Carver court discussed the erosive effects of

inflation in comparing FECA limits at issue in Buckley to the

Missouri limits. This discussion applies here as well. In

1976 dollars, Act I’s $100 limit shrinks to less than forty

percent of its face value, and only four percent of the federal

$1000 limit upheld in Buckley. See Carver, 72 F.3d at 641

[citing Day v. Holahan, 34 F.3d 1356, 1366 (8th Cir.1994)].

Third, in contrast to Carver, where state contribution

limits were imposed for the first time, here the perceived

undue influence argued by the defendants and Citizens

occurred in spite of the $1000 limit already established by

Arkansas. As to statewide races, a $1000 contribution is not

large, and Act I’s $300 limit is unconstitutionally low. How-

ever, as to non-statewide races, I do find a $1000 contribu-

tion to be "large." The defendants’ argument that the $100

limit has been narrowly tailored is convincing, particularly

in light of Carver. I see this as a close call.

Fourth, in contrast to the Carver case, the defendants and

Citizens introduced substantial evidence of the need for the

reduced limits found in Act I. For example, the Stern study,

as well as reports compiled by ACORN, indicate that large

contributions, as defined by this Court, have led to the

perception of undue influence in non-statewide races.

Fifth, in Carver, the Eighth Circuit noted that a sizable

percentage of contributors would be affected by the new

limits. An even higher percentage of contributors will ap-

parently be affected by the Act I limits here. Mr. Stern’s

study indicates that the $100 limit will affect as much as

eighty percent of contributions in Arkansas Senate and

House races.

I find persuasive the Citizens’ argument that contribu-

tion limits amount to a difference in kind, when compared

B-24

to the limits upheld in Buckley, because the limits do not

permit the same quality of political expression and associa-

tion that the FECA limits allowed. In upholding FECA’s

$1000 contribution limit, the Buckley Court concluded that

the limit:

focuses precisely on the problem of large campaign con-

tributions the narrow aspect of political association

where the actuality and potential for corruption have

been identified while leaving persons free to engage in

independent political expression, to associate actively

through volunteering their services, and to assist to a

limited but nonetheless substantial extent in supporting

candidates and committees with financial resources.

Significantly, [FECA’s] contribution limitations in them-

selves do not undermine to any material degree the

potential for robust and effective discussion of can-

didates and campaign issues by individual citizens, as-

sociations, the institutional press, candidates, and

political parties.

424 US. at 28-29, 96 S.Ct. at 639-40. See also id. at 21, 96

S.Ct. at 636 ("contribution restrictions could have a severe

impact on political dialogue if the limitations prevented

candidates and political committees from amassing the

resources necessary for effective advocacy"). Thus for Act

I’s limits to impermissibly affect First Amendment rights,

the limits must "undermine to [a] material degree the poten-

tial for robust and effective discussion of candidates and

campaign issues by individual citizens, associations, the in-

stitutional press, candidates, and political parties." Jd. at 29,

96 S.Ct. at 639-40.

I conclude that Act I’s $100 contribution limits ap-

plicable to candidates in non-statewide races (excepting —

B-25

races for the offices of Arkansas Supreme Court Justice, and

Arkansas Court of Appeals Judge) do not burden the poten-

tial for effective political dialogue to the extent that the

_ limits can be said to represent a difference in kind. Applied

in this case, the factors on which the Carver court relied do

not alone provide a clear answer as to the degree-versus-

kind question. However, this Court has had the benefit of

evidence presented during a seven-day trial, including

evidence derived from special elections conducted under

the Act I limits.

The defendants and Citizens introduced evidence show-

ing that the cost of running Arkansas House of Repre-

sentatives and Senate raccs in the past three election cycles

averaged between $7000 and $16,000 per election for the

Arkansas House and between $23,000 and $39,000 per elec-

tion for an Arkansas Senate seat. If a candidate for each of

these positions raised all of her funds from $50 contributions

(half of the Act I limit), a House candidate would need 320

contributors, and a Senate candidate would need 780 con-

tributors to meet the highest of these historical cost levels.

This hypothetical does not include contributions from politi-

cal parties, small donor PACs, or candidates’ personal con-

tributions. Evidence admitted at trial showed that the

population of an Arkansas House district is roughly 24,000

and that of a senate district is approximately 68,000. Thus

I find credible the testimony of state legislators, including

former Arkansas Representative Mark Pryor and Arkansas

Senator Phil Wyrick (also a former Representative), that

they will be_able to raise adequate funds to run effective

campaigns. !’ I consider it significant that no officeholder

17s a candidate for State Representative in two successful races

prior to Act I, Mr. Pryor testified he raised sufficient funds to run effective

campaigns under a self-imposed contribution limit of $250. Mr. Pryor

B-26

testified that she would be unable to run an effective cam-

paign with the $100 limit, although two professional

fundraisers did so testify. In the two special elections held

in January 1997 under Act I, the evidence shows that the

candidates were able to raise contributions exceeding the

average amount raised by open-seat candidates in primary

elections during the past three election cycles. Senator

Wyrick, for example, testified that he raised approximately

$24,000 for his successful Arkansas Senate race under the

Act I limits, while his opponent raised about $40,000.

There are two exceptions to the finding that the $100

limit is constitutional. Act I omits from its definition of

statewide offices the office of state Supreme Court Justice,

even though these judges are elected in statewide races. Act

I sets a $100 per election limit on the twelve judges of the

Court of Appeals, who are elected from districts of equal

populations. 8 In Arkansas, judicial candidates and judicial

races are subject to more stringent restrictions in solicitation

than other candidates. Under Canon 5C(2) of the Arkansas

Code of Judicial Conduct, a judge or candidate for judicial

office subject to a public election may neither personally

solicit nor accept campaign contributions. Canon 5C(2) also

restricts candidate committees acting on behalf of judges or

candidates from soliciting earlier than 180 days prior to a

primary election, or later than forty-five days after the last

contested election in which the candidate participates.

The defendant’s witness, Mr. Stern, testified that the

$100 limit on contributions to Arkansas Supreme Court

Justices was the most troubling aspect of Act I, although he

18 ark. Code Ann. § 16-12-101. Prior to July 1, 1995, the Arkansas

Court of Appeals was composed of six members. After that date, the

membership was increased to twelve. /d.

B-27

suggested that this requirement was justifiable. I am also

troubled by the limit, and do not think it justifiable. Several

witnesses explained that a candidate is typically her own best

fundraiser. Yet a judge cannot personally solicit funds. A

Supreme Court Justice must nevertheless mount a statewide

campaign, and Court of Appeals Judges must run in districts

much larger than state senate districts.!” I conclude that this

combination of obstacles prevents candidates for these judi-

cial positions from "amassing the resources necessary for

effective advocacy." Therefore, I find that Act I’s $100 limit,

as applied to Arkansas Supreme Court Justices and Arkan-

sas Court of Appeals Judges, amounts to a difference in

degree when compared to those upheld in Buckley. It is,

thus, unconstitutionally iow.

2. Contributions to PACs

The plaintiffs also complain that the $200 limitation on

contributions to approved PACs is so low that it unconstitu-

tionally infringes on their First and Fourteenth Amendment

rights to free speech and association. Each party cites

California Medical Ass’n v. FEC, 453 U.S. 182, 101 S.Ct.

2712, 69 L.Ed.2d 567 (1981) as controlling on this issue: In

California Medical, a federal PAC complained of FECA’s

$5000 per year limit on contributions to multicandidate

federal PACs. Upholding the challenged provision of

FECA, a plurality of the Court concluded that the limita-

tions on contributions to PACs was justified by the

government’s interest in "preventing the actual or apparent

corruption of the political process." /d. at 197, 101 S.Ct. at

2722. The plurality feared that actual or perceived corrup-

tion would arise if individuals and unincorporated associa-

'9 arkansas currently has 35 senate districts.

B-28

tions were able to channel unlimited funds through PACs to

candidates, thereby circumventing the $1000 limit on con-

tributions to individual candidates. Jd. at 198, 101 S.Ct. at

2722-23. Further, the Court reasoned that when a con-

tributor’s First Amendment rights are not infringed by limits

on his contributions to a candidate’s campaign, those rights

“are similarly not impaired by limits on the amount he may

give to a multicandidate political committee. . . ." Jd. at 197,

101 S.Ct. at 2722.

The plaintiffs point out that FECA limited contributions

to candidates to $1000 per election, and contributions to

PACs to $5000 per year. They then suggest that it would be

irrational for Arkansas to limit contributions to PACs to only

$200 per year while allowing $300 contributions to in-

dividuals per election. The defendants counter that the 1990

limit allows substantial participation in Arkansas’ elective

process while serving to prevent circumvention of the limits

imposed on individual contributions. Citizens add that a

limit on contributions to PACs is even more warranted in

Arkansas than under the federal scheme. They note that the

\ federal PACs in California Medical were required to enlist

at least fifty contributors and contribute to no fewer than five

‘candidates. Jd. at 185 n. 1, 101 S.Ct. at 2716 n. 1. Arkansas

imposes no such requirements. Similarly, Citizens argue,

Arkansas has no corollary to FECA’s $25,000 annual limita-

tion on total contributions by an individual. See Buckley, 424

USS. at 38, 96 S.Ct. at 644.

Having determined that Act I’s $300 per election limit

on contributions to candidates for statewide race are uncon-

stitutionally low, this Court is sympathetic to the argument

that a $200 limit on annual contributions to PACs is similarly

infirm. This view finds support in Day v. Holahan, 34 F.3d

1356 (8th Cir.1994). In Day, the court deemed unconstitu-

B-29

tional a Minnesota law limiting contributions to a political

committee or political fund to no more than $100 per year.

The Day court recognized the state’s compelling interest in

avoiding "corruption or the appearance of corruption in the

political process that could result from large amounts of

special interest money circulating in the system. .. ." /d. at

1365. However, it declared that "the fighting issue" pre-

sented was whether the $100 limit had been narrowly

tailored to serve that interest, in the light of the burden it

placed on political speech. /d. The court based its finding

that the limit was too low to allow meaningful participation

in protected political speech and association on: the

reduced danger of actual or perceived corruption when

contributions are to a political committee rather than a

candidate; the fact that $100 in 1994 dollars was a scant four

percent of the $1000 limit upheld in Buckley; and the fact

that one-fourth to one-third of the Appellant political fund’s

contributions in the previous election cycle had exceeded

$100. Id. at 1365-66.

I find Day distinguishable and conclude that the $200

limit is constitutional. I am impressed by the fact that even

though the limit has been in place since 1990, the plaintiffs

do not contend that this limit has significantly infringed thei

First Amendment rights. In fact, much of the evidence in

this case supports the conclusion that PAC contributions to

candidates in Arkansas have been robust and that the $200

limit has not prevented "political committees from amassing

the resources necessary for effective advocacy." Buckley,

424 US. at 21, 96 S.Ct. at 636. Thus, unlike Day where the

court was left to speculate on the effect of the challenged

amendments to Minnesota’s campaign finance laws, this

Court is able to consider the impact of a law that has been

in effect for a number of years, and the evidence reflects no

appreciable infringement.

B-30

D. Deference to Initiated Acts

Citizens urges the Court to accord substantial deference

to the voters’ judgment in approving Act I, which they con-

tend is an essentially legislative determination. They cite

Turner Broadcasting System, Inc. v. FCC, 512 U.S. i: 665-66,

114 S.Ct. at 2470-71: "[C]jourts must accord substantial

deference to the predictive judgments of Congress." The

proponents of the challenged act in Carver advanced the

same argument. The Carver court rejected this argument:

"First, ... the voters may no more violate the Constitution

than the legislature[,]" and "[s]econd, the deference to legis-

lative enactments recognized in Turner Broadcasting System

requires that courts ascertain that the legislative body ‘has

drawn reasonable inferences based on substantial evi-

dence.” 72 F.3d at 644 (internal citations omitted). The

court explained: "here is simply no evidence in the record

identifying the source of Proposition A, whether it was an

individual o* a group, the process of its development, nor the

reasons for the particular dollar limits. Further, there is no

evidence of the details of the campaign waged in support of

the initiative." Jd. The court continued:

Whether the deference Turner Broadcasting System re-

quires for acts of Congress extends to the acts of the state

legislative body is an issue not before us to decide.

Legislative bodies consist of elected representatives

sworn to be bound by the United States Constitution,

and their legislative product is subject to veto by the

elective executive, either President or Governor. The

process of enactment, while perhaps not always perfect,

includes deliberation and an opportunity for com-

promise and amendment, and usually committee studies

and hearings. These are substantial reasons for accord-

ing deference to legislative enactmenis that do not exist

B-31

with respect to proposals adopted by initiative. On the

evidentiary showing before us, there is no justification to

accord Proposition A the deference that [Turner] re-

quires for congressional action.

Id. at 644-45 (internal citation omitted). In this case there

was some evidence regarding the drafting of the Act, and the

campaign (as will be discussed in the next section, some of

the supporting campaign literature contained a constitution-

ally impermissible reason for supporting Act I). Nonethe-

less, neither the Supreme Court nor the Eighth Circuit has

held that special deference should be given to state laws.

Regardless of the force of the argument one might make, in

+h” abstract, for deference to a direct vote of the electorate,

tlic above quoted language from Carver clearly suggests that

no such deference may be given.

Still, I understand that federal courts must be careful to

not unnecessarily declare state laws invalid, whether

eiiacted by legislature or by the voters themselves. In the

interest of comity, although I have found Act I constitution-

ally infirm in part, I have done so with "considerable pause

and deliberation." National Black Police Ass’n v. District of

Columbia Bd. of Elections & Ethics, 924 F.Supp. 270, 285

(D.D.C.1996), vacated, 108 F.3d 346 (D.C.Cir.1997).

E. Equal Protection Claim

Plaintiff AIAPAC argues that limiting approved PAC

“ontributions to $100 and $300 per election, yet allowing

small donor PACs to contribute $2500, treats similarly

situated entities unequally and violates the Fourteenth

Amendment. The Defendants and Citizens respond that this

plaintiffs rights are unimpaired because its members are

free to form a small donor PAC separate from AIAPAC.

B-32

As stated above, the Supreme Court has held that

“statutory classifications impinging upon [the right to engage

in political expression] must be narrowly tailored to serve a

compelling governmental interest." Austin v. Michigan

Chamber of Commerce, 494 U.S. 652, 666, 110 S.Ct. 1391,

1401, 108 L.Ed.2d 652 (1990). In Austin, the Court was faced

with an equal protection claim involving a Michigan statute

prohibiting corporations from spending treasury funds for

independent expenditures on behalf of political candidates.

The Chamber of Commerce complained that unincor-

porated associations and media corporations were not

similarly burdened. The Court upheld the statute because

it was "precisely tailored" to serve the compelling state inter-

est of preventing corporations from exploiting legal ad-

vantages to amass political "war chests." Jd.

In California Medical, the Court decided an equal

protection claim where FECA permitted labor unions and

corporations to contribute to a separate segregated fund for

political purposes, but restricted contributions by in-

dividuals and unincorporated associations to multicandidate

political committees. The Court determined that to prevail

in its claim the plaintiff would need to satisfy a two-part

analysis. First, the plaintiff would have to show the act

burdened the First Amendment rights of individuals and

unincorporated individuals to a greater extent than those of

labor unions and corporations. Second, it would have to

prove that this differential treatment was not justified. 453

U.S. 182, 200, 101 S.Ct. 2712, 2724, 69 L.Ed.2d 567 (1981).

Because the Court found no discrimination, its analysis

ended without considering the issue of justifiability. The

Court noted that FECA was far less restrictive to individuals

and unincorporated associations than to corporations and

unions. To illustrate, the Court observed that individuals

and unincorporated associations were able to contribute to

B-33

candidates, to candidates’ committees, and to national party

and other committees, while corporations and unions could

not. Moreover, multicandidate political committees could

generally solicit as they pleased, while the manner and scope

of solicitation by corporations and unions were "carefully

limited" by FECA. /d. at 201, 101 S.Ct. at 2724. FECA’s

differing restrictions, reasoned the Court, "reflect a judg-

ment by Congress that these entities have differing struc-

tures and purposes, and that they therefore may require

different forms of regulation in order to protect the integrity

of the electoral process." /d.

The question of discrimination is a close one. I recognize

that the ability to raise money from a single contribution

strongly favors approved PACs over small donor PACs —

$200 compared to $25, an eight-to-one ratio. Yet the ability

to contribute to a single candidate may be seen as even more

strongly favoring the small donor PAC over approved PACs

— $2500 compared to $100, a twenty-five-to-one ratio. I

conclude that this substantial disparity is balanced by the fact

that small donor PACs can only receive contributions from

individuals, while approved PACs may count among their

donors other PACs, corporations, or unions. Furthermore,

approved PACs are not limited in the total amount they can

contribute overall, but only as to a single candidate. The Act

I amendments do not burden the First Amendment rights of

approved PACs to a more constitutionally significant extent

than it burdens such rights of small donor PACs.

Moreover, even if the balance tipped in favor of small

donor PACs, a heavier burden on approved PACs’ First

Amendment rights would be justified by the state’s compell-

ing interest in avoiding actual or apparent corruption. Act

I’s restricting small donor PACs to receiving no more than

$25 in annual contributions from only individuals greatly

B-34

diminishes the potential for actual or perceived corruption

that can accompany contributions from approved PACs. Just

as in California Medical, these restrictions reflect the judg-

ment of the voters that these two types of PACs have "dif-

fering structures and purposes," and that different forms of

regulation are permitted. Jd.

F. State Interest in Leveling the Playing Field

Some of Citizens’ campaign literature for Act I raises a

nettlesome question. It urged, among other things, the

adoption of Act I "to level the playing field" for candidates

with modest financial resources. Many would think that this

is a perfectly proper, or even a laudable, goal. However, in

Buckley, the Supreme Court stated, "the concept that

government may restrict the speech of some elements of our

society in order to enhance the relative voice of others is

wholly foreign to the First Amendment. . . ." 424 U.S. at

48-49, 96 S.Ct. at 649. Scholars have challenged this lan-

guage as "perhaps the most controversial and dubious state-

ment" ~ in Buckley; however, neither the Supreme Court

nor the Eighth Circuit has flinched since this passage was

written in 1976. In Shrink Missouri Government PAC v.

Maupin, the Eighth Circuit declared that "no subsequent

decision of the [Buckley ] Court has undermined that hold-

ing." 71 F.3d 1422, 1426 (8th Cir.1995). In Carver, the court

warned that an amicus’s suggestion that the state has a

compelling interest in equalizing all citizens’ ability to affect

the outcome of elections was "close to running afoul of the

Court’s [above-quoted] statement in Buckley .. . ." 72 F.3d

at 639 n. 6.

20Jamin Raskin & John Bonifaz, Equal Protection and the Wealth

Primary, 11 Yale L. & Pol’y Rev. 273, 320 (1993).

B-35

It is hard to understand how any law restricting the size

of contributions (including the federal restrictions upheld

in Buckley) would not have at least some tendency to level

the playing field. Indeed, in a press release, Citizens noted

that Act I would "help to level the political playing field by

placing strict limits on campaign contributions and increas-

ing the power of small donors through tax credits and the

creation of smail donor political action committees." How-

ever, the bulk of the Act [ campaign literature appears to

focus on the purpose of curbing the influence of special

interests through large contributions, and "ending the cozy

relationship of big money political contributions and incum-

bent politicians." Thus, the aim of leveling was apparently

not the primary element of the campaign for Act I, and, on

its face, the Act does not reveal leveling as its purpose.

In a similar vein, the plaintiffs warn that implementation

of Act I’s limits will increase the advantage enjoyed by

wealthy candidates over their less affluent opponents: can-

didates with personal wealth and the inclination to spend it

on campaigns will not be hampered by having to raise money

at even more limited levels or by having to worry about their

opponent’s greater access to costly media outlets. In fact,

some of the defendants’ and Citizens’ witnesses conceded

that Act I would likely increase this advantage, one that is

apparently inherent to our electoral system. I believe that

additional limits on campaign contributions will add to the

wealthy candidate’s edge. However, in Buckley the Supreme

Court addressed the issue of limiting the amount of money

a candidate could contribute to her own campaign. The

Court held that "the First Amendment simply cannot

tolerate [FECA’s] restriction upon the freedom of a can-

didate to speak without legislative limit on behalf of his own

candidacy." 424 U.S. at 54, 96 S.Ct. at 651. The Court

reasoned that the government’s interest in preventing actual

B-36

or perceived corruption did not support such a limitation

when the funds involved come from the candidate or the

candidate’s immediate family. /d. at 53, 96 S.Ct. at 651.

While Buckley’s reasoning has been questioned by some

commentators,” it is the law that the state cannot limit a

candidate’s contributions of her own money to her cam-

paign. Just as the poor will apparently always be with us,”

it appears that, in politics, so will the wealthy. Any limits on

contributions will tend to favor the wealthy, but, under

Buckley, this cannot be avoided, and this fact will not void

otherwise valid limits.”°

G. Severability

Severability is a matter of state law. Leavitt v. Jane L.,

518 U.S. 137, __, 116 S.Ct. 2068, 2069, 135 L.Ed.2d 443

(1996). The Arkansas Supreme Court has instructed, "[i}n

determining whether the invalidity of part of the act is fatal

to the entire legislation, we have looked to (1) whether a

single purpose is meant to be accomplished by the act; and

(2) whether the sections of the act are interrelated and

dependent upon each other." U.S. Term Limits, Inc. v. Hill,

316 Ark. 251, 872 S.W.2d 349, 357 (1994). The court further

explained that “it is important whether the portion of the act

2ISee e.g., Raskin & Bonifaz, supra, at 31531.

72S. John 12:8.

231n Justice White’s view, a long-time minority view, as noted earlier,

reasonable restrictions could be placed on a candidate’s personal con-

tributions to her own campaign. Buckley, 424 U.S. at 266, 96 S.Ct. at

748-49. Also, the Eighth Circuit has upheld election laws that encourage

"voluntary" expenditure limits by candidates. Rosenstiel v. Rodriguez, 101

F.3d 1544 (8th Cir. 1996). Still, nothing is clearer in Buckley than the

prohibition against government limits on personal spending. Buckley, 424

US. at 52-54, 96 S.Ct. at 651.

B-37

remaining is complete in itself and capable of being ex-

ecuted wholly independent of that which was rejected.

Clearly, when portions of an act are mutually connected and

interwoven, severance is not appropriate." /d. 872 S.W.2d at

358. Courts will consider the presence of a severability

clause in an act, but this may not be determinative of itself.

Id. Act I contains the following severability clause:

Section 15. If any provision or section of this act or the

application thereof to any person or circumstance is held

invalid, such invalidity shall not affect other provisions

or applications of the act which can be given effect

without the invalid provisions or applications, and to this

end the provisions of the act are declared to be severable.

The Court’s ruling here has: upheld Act I’s $100 per

election contribution limit for elections involving non-

statewide races (with the exception of the positions of

Supreme Court Justice and Court of Appeals Judge); ruled

unconstitutional the Act’s $300 per election contribution

limit on statewide races; upheld the preexisting $200 per

annum contribution limit to PACs; and upheld the small

donor PACs against the plaintiffs’ challenge on equal

protection grounds. Additionally, the Court has found the

plaintiffs’ challenge of Act I’s provision for lower local con-

tribution limits nonjusticiable for lack of ripeness. Finally,

the Court has held that the plaintiffs lack standing to chal-

lenge Act I’s provision for independent expenditure com-

mittees. The effect of this ruling leaves Act I intact, with the

exception of the contribution limit for statewide races, and

the application of the $100 limit to contributions to can-

didates for Supreme Court Justice and for Judge of the

Court of Appeals.

Applying the U.S. Term Limits test, I find no single

purpose behind Act I with which this Court’s ruling will

B-38

unduly interfere. Similarly, I see no fatal interrelation or

interdependency between the stricken and upheld portions

of the Act. In other words, I see no reason not to honor the

intent of the drafters of Act I that, to the extent possible, the

various provisions of the Act should stand on their own. As

to elections for Governor, Lieutenant Governor, Secretary

of State, Treasurer of State, Auditor of State, Attorney

General, Commissioner of State Lands, Court of Appeals

Judge and Supreme Court Justice, the $1000 contribution

limit applicable prior to Act I will continue to apply.

Conclusion ,

In summary, the Court finds the following sections of the

Arkansas Code constitu‘ional: section 7-6-203(a)(1) and

(b)(1), except as it applies to the offices of Supreme Court

Justice and Court of Appeals Judge; section 7- 6-201(9)(B);

and sections 7-6-201 and 7-6-203(d). The Court declares

unconstitutional, and thus enjoins the'enforcement of, the

following sections of the Arkansas Code: section 7-6-

203(a)(2) and (b)(2); and section 7-6-203(a)(1) and (b)(1)

as it applies to the offices of Supreme Court Justice and

Court of Appeals Judge. Further, the Court finds that the

plaintiffs lack standing to challenge Arkansas Code sections

7-6-201(13) and (14), and 7- 6-203(k). The plaintiffs’ chal-

lenge to Arkansas Code section 7-6-224 is dismissed because

it is not ripe.

IT ISSO ORDERED.

WILSON, District Judge.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.