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Media Alerts - Republican Party of New Mexico v. King - 10th Circuit
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January 2, 2014
  Republican Party of New Mexico v. King - 10th Circuit
Case Name: Republican Party of New Mexico v. Gary King

Headline: Tenth Circuit, in keeping with five other circuits, holds that contribution limits to independent expenditure groups cannot be reconciled with the holding in Citizens United

Area(s) of Law: Constitutional Law; Campaign Finance Law

Issue(s) Presented:
1. Can states limit contributions to independent expenditure groups in light of the Supreme Court's holding in Citizens United?
2. How much "coordination" is allowed between an independent expenditure group and a political party before the contributions to the independent expenditure group may be regulated as contributions to a political party under McConnell v. FEC?

Brief Summary:

In Citizens United, the Supreme Court clarified that all campaign finance regulations must be justified by the government's interest in preventing corruption or the appearance of corruption in representative politics. Over the past three years, the holding from Citizens United has been applied in a number of cases in a number of circuits, each finding that independent expenditures by PACs do not implicate the anti-corruption interest and thus cannot be regulated. Similarly, these circuits have found that private contributions to PACs engaged in independent expenditure do not implicate the anti-corruption interest and thus cannot be regulated.

In Republican Party of New Mexico v. King, the Tenth Circuit joins that list of circuit courts holding that private contributions to PACs engaged in independent expenditure do not implicate the anti-corruption interest and cannot be regulated. However, the facts of the case involve political action committees (PACs) with leadership, organization, and purpose overlapping the Republican Party of New Mexico (NM-GOP). Since the regulation of contributions to political parties is viewed as a valid anti-corruption exercise under McConnell v. FEC, and since "coordination" between PACs and political parties brings McConnell into play, the case raises (but does not answer) interesting questions about the fine line between "independent" and "coordinated" campaign finance expenditures.

Extended Summary:

In 2010, New Mexico introduced campaign finance laws that imposed a number of limitations on contributions to and by political parties, political action committees, and private donors. Specifically, the state limited the amount of money an individual could contribute to a political action committee engaged in independent political expenditures. Later in 2010, the Supreme Court issued its opinion in Citizens United, which held that restrictions on the independent political expenditures of corporate entities violated the First Amendment. After Citizens United, the NM-GOP and a number of PACs made an as-applied challenge to the New Mexico campaign finance laws; the lower court issued a preliminary injunction prohibiting the attorney general of New Mexico from enforcing the laws.

The Tenth Circuit began its opinion with a discussion of Buckley v. Valeo. In that case, the Supreme Court held that politically-motivated monetary donations were a form of political speech. As a form of political speech, political donations cannot be burdened by campaign finance regulations unless those regulations are narrowly tailored to advance a compelling government interest.

The one compelling government interest recognized by the Court in Buckley was the interest in preventing corruption or the appearance of corruption. As such, the Court drew a distinction between independent political expenditures and contributions to candidates for political office - allowing regulation of the latter where regulation of the former would be impermissible. In the Court's view, the risk of quid pro quo corruption was greater in cases of contribution to candidates than it was in cases of independent political expenditure - provided, of course, that the expenditure was truly independent (i.e., not coordinated with the offices of any political candidate).

In Citizens United, the Court clarified that the anti-corruption interest was the only valid interest for the restriction of political speech. In doing so, the Court overruled the holding in Austin v. Michigan Chamber of Commerce, which had recognized a broader permissible interest in "reducing the distorting financial influence of business corporations on the political process." Citizens United effectively placed corporate entities in the position of individual citizens for purposes of political speech analysis, allowing corporate entities to make unlimited independent expenditures on behalf of (or in opposition to) candidates for political office, so long as the expenditures were not coordinated with that candidate or any other.

There remained a question, after Citizens United, as to the constitutionality of regulating contributions to entities devoted to independent political expenditure (distinct from contributions to political candidates themselves, which remain subject to regulation). In subsequent decisions, five circuit courts have struck down regulations limiting contributions to independent expenditure groups. The question in Republican Party of New Mexico v. King was whether or not the Tenth Circuit would follow suit.

For its part, New Mexico offered two arguments that Citizens United did not govern the case at hand: first, that Supreme Court opinions prior to Citizens United held that regulation of contributions to independent expenditure groups was permissible in some instances; and second, that New Mexico retained a compelling interest in preventing the circumvention of valid contribution limits (i.e., limits on contributions to political candidates).

In support of its first argument, New Mexico pointed to McConnell v. FEC. In that case, the Supreme Court held that the government could regulate contributions to political parties because "contributions to a federal candidate's party in aid of that candidate's campaign threaten to create - no less than would a direct contribution to the candidate - a sense of obligation" implicating the anti-corruption interest recognized in Buckley. New Mexico argued that because there was overlap between the leadership of the plaintiff PACs and the leadership of the state and local branches of the NM-GOP, that the PACs served as stand-ins for the party itself and were thus subject to the permissible party-contribution limitations from McConnell.

In support of its second argument - really an implied extension of its first - New Mexico argued that the Supreme Court's holding in FEC v. Colo. Republican Fed. Campaign Comm. (Colorado I) made allowance not only for anti-corruption regulation but also for regulation designed to prevent the circumvention of anti-corruption regulation. New Mexico argued that the campaign finance laws were intended to prevent circumvention of its permissible restrictions on direct contributions to political candidates and parties - in this case, by making unlimited contributions to "independent expenditure groups" that were really state and local NM-GOP branches otherwise subject to regulation under McConnell.

The Tenth Circuit held that Citizens United governed the outcome in Republican Party of New Mexico v. King, stating that "because there is no corruption interest in limiting independent expenditures, there can also be no interest in limiting contributions to non-party entities that make independent expenditures." Addressing New Mexico's first argument - that the plaintiff PACs were not really "non-party entities" due to their shared membership with the NM-GOP leadership - the court stated that the question on the existing record was limited to formal affiliation between the PACs and political parties. Since there was no formal affiliation between the plaintiff PACs and the NM-GOP, the state could not avail itself of the party-contribution holding in McConnell.

The court acknowledged that an inquiry into "coordination" of PAC and political candidate spending was important, insofar as "expenditures coordinated with a candidate are seen as indirect contributions." The court added that since "political parties are so affiliated with candidates [as] to justify a presumption that money a contributor might give to a party will be spent on that candidate," separate factual inquiry into coordination was appropriate where there was allegation of indirect control of PACs by political parties. The court stated that "there must be some attendant coordination with [a] candidate or political party to make corruption real or apparent," and admitted that "if a PAC were making expenditures that were coordinated with a political party, then such expenditures could be deemed contributions to a political party" subject to regulation under the framework of Buckley and McConnell. While this seemed to be New Mexico's allegation in the case, the court did not remand for additional factfinding on this point, although it noted - in addition to joint membership of the plaintiff PACs and NM-GOP leadership - that one of the plaintiff PACs was "organized" by NM-GOP.

Addressing New Mexico's related second argument - that the permissible anti-circumvention interest from Colorado I justified the regulation of "independent expenditures" that were really indirect contributions to political parties by virtue of coordination - the court noted that "there can be no freestanding anti-circumvention interest" and then reiterated its earlier logic: that only corruption or the appearance of corruption could justify regulation of political speech; that independent expenditures carried no risk of corruption or the appearance of corruption; that non-contribution expenditures by PACs were independent unless they were coordinated with a candidate or political party; and that the question of coordination, on the record at hand, was limited to one of formal affiliation (of which there was none).

To read the full opinion, please visit: http://www.ca10.uscourts.gov/o.../12/12-2015.pdf


Panel: Circuit Judges McKay, O'Brien, and Tymkovich

Date of Issued Opinion: December 18, 2013

Docket Number: 12-2015

Decided: Preliminary injunction against New Mexico District Attorney affirmed.

Counsel:

Phillip Baca, Assistant Attorney General (Gary K. King, Attorney General, with
him on the briefs) Office of the Attorney General, Albuquerque, New Mexico, for
Appellants.

Randy Elf, James Madison Center for Free Speech, Terre Haute, Indiana (James
Bopp, Jr., James Madison Center for Free Speech, Terre Haute, Indiana, and Paul
M. Kienzle III, Scott & Kienzle, P.A., Albuquerque, New Mexico, with him on
the brief) for Appellees.

William H. Sorrell, Attorney General of Vermont, and Eve Jacobs-Carnahan,
Assistant Attorney General of Vermont, Montpelier, Vermont, David M. Louie,
Attorney General of Hawaii, Honolulu, Hawaii, Steve Bullock, Attorney General
of Montana, Helena, Montana, Darrell V. McGraw, Jr., West Virginia Attorney
General, Office of the Attorney General, Charleston, West Virginia, Tom Miller,
Attorney General of Iowa, Des Moines, Iowa, and Peter F. Kilmartin, Attorney
General, State of Rhode Island, Providence, Rhode Island, filed an Amici brief on
behalf of Appellants.

Author: Tymkovich

Case Alert Author: Levi Monagle, UNM School of Law, Class of 2014

Case Alert Circuit Supervisor: Professor Barbara Bergman, UNM School of Law

    Posted By: Dawinder Sidhu @ 01/02/2014 09:21 AM     10th Circuit  

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