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Second Circuit Strikes Down Portions of Connecticut's Campaign Finance Law

July 19, 2010

In a decision released last week, the Second Circuit Court of Appeals struck a blow to Connecticut's campaign financing system, as well as to third-party candidates seeking access to public campaign funds. In Green Party of Connecticut v. Garfield (09-3760-cv)
("Green Party I"), the court found unconstitutional the "trigger provisions" in the Citizen's Election Program ("CEP") section of Connecticut's Campaign Finance Reform Act ("CEFRA"), which automatically provide additional funds to candidates who participate in the state's public funds program when the expenditures of privately-funded opponents or independent third parties exceed a certain threshold.1 Alternatively, the court ruled that CEP's qualification criteria and distribution formulae, which determine what candidates qualify to receive matching funds and in what amounts, were not unconstitutional as they did not discriminate against minor party candidates.

CEFRA was first enacted in 2006 in response to various corruption scandals involving Connecticut politicians. The Second Circuit acknowledged that, pursuant to the seminal Supreme Court case of Buckley v. Valeo, the public financing of candidates is constitutional. However, the court sided with the plaintiffs, which included the Green Party of Connecticut and the Libertarian Party of Connecticut, who argued that the trigger provisions were tantamount to unconstitutional penalties.

In reaching this conclusion, the court analogized the trigger provisions to the "Millionaire's Amendment" to the McCain-Feingold law at issue in Davis v. Federal Election Commission,
128 S. Ct. 2759 (2008). The Supreme Court found the Millionaire's Amendment a substantial burden on the exercise of free speech because it raised contribution limits only for publicly-financed candidates while imposing lower limits on candidates not participating in the program. Such a distinction, the Court explained, amounted to a penalty on self-financed candidates. 

Similarly, the Second Circuit, here, found that the trigger provisions would force non-participating candidates, who chose to exercise their First Amendment right to spend personal funds on the campaign, to "shoulder a special and potentially significant burden" as they were forced to spend more and more money while the public-financed candidate received more and more public funds.  This substantial burden, the court decided, was not justified by the state's interest in promoting participation in CEP, an interest the court found uncompelling. The court further suggested that, to the extent the provisions were intended to level the playing field, they were unconstitutional under Davis.

The Second Circuit's decision stands in stark contrast to the Ninth Circuit's ruling in McComish v. Bennett, decided a little over a month ago. There, faced with a similar provision in Arizona campaign finance law, the Ninth Circuit decided that it was constitutional to provide additional public funds to participating candidates who faced self-financed opponents that crossed the triggering threshold. Still, the Supreme Court has stayed implementation of the Arizona campaign finance law, and with similar trigger provisions currently before the courts in Wisconsin and Florida, the Court appears poised to take up the issue.

Connecticut's trigger provisions are also strikingly similar to ones found in New York City's public finance plan. The City automatically awards $1,050 for every qualified $175 donation received by candidates participating in the public financing program. However, when a non-participating opponent raises or spends more than limits imposed on participating candidates, the City awards the participating candidate an additional bonus of up $450, representing an almost 43% increase in public funding. Additionally, when that threshold is breached, the City may also raise or waive the spending limits that are otherwise imposed on publicly-financed campaigns. Moreover, the City program contains other options that provide participating candidates with additional funding based upon the opposing candidate's conduct, such as when the candidate has high name recognition due to recent media exposure or holding some other public office. The Green Party I decision calls into question the constitutionality of these triggering events.

Also in Green Party I, the Second Circuit found constitutional CEP's higher thresholds for third-party candidates attempting to qualify for public funds. The court, applying the Buckley standard found, first, that the CEP's goal of eliminating improper influence on elected officials was a sufficiently important government interest, and, second, that the burden on minor party candidates was not unfair or unnecessary, especially where the limited data from the 2006 and 2008 election evidenced that a substantial number of minor party candidates would be eligible for public funding.

In a companion case issued the same day, also captioned Green Party of Connecticut v. Garfield (09-0599-cv) ("Green Party II"), the Second Circuit upheld the CFRA "pay-to-play" ban on political contributions from state contractors and their immediate family, explaining that the ban was narrowly drawn to further the sufficiently important government interest of quelling the actuality and appearance of corruption involving state contractors. However, the court found a similar ban on contributions from lobbyists to violate the First Amendment where the recent corruption scandals in Connecticut did not involve lobbyists and, thus, there was insufficient evidence that lobbyist contributions gave rise to an appearance of influence. The court opined that a constitutional alternative would be a limit on lobbyist contributions. Finally, the Second Circuit struck down the CFRA ban on contractors and lobbyists collecting or advocating contributions made by others – known as "bundling" – because the ban, as drawn, would prohibit constitutionally-protected speech and associational activity, such as a contractor advising her mother about contributions. The court suggested that a less restrictive ban, such as a ban on state contractors organizing fundraising events of a certain size, would be permissible.

The Green Party II decision appears to support New York City's limits on allowable contributions from certain classes of donors such as lobbyists and city contractors, as well as their lack of eligibility for matching funds. In addition, the decision does not call into question the viability of reporting requirements imposed on bundled lobbyist contributions: Federal election rules require various committees, including candidate committees, party committees, and PACs, to report bundled contributions received from lobbyists while New York City requires the lobbyists to report such bundled contributions.


1 On the same day, a Connecticut Superior Court denied a request by self-financed Republican gubernatorial candidate Tom Foley to stop public-financed opponent Michael Fedele from receiving more than $2 million in public funds. Foley has appealed that decision to Connecticut Supreme Court, which is slated to hear arguments on July 20, 2010. Certainly, the Green Party I decision will impact the decision.