DAVIS v. FEDERAL ELECTION COMMISSION
Jack Davis, a wealthy Democratic candidate for Congress from New York’s 26th Congressional District, brought this claim challenging the constitutionality of the so-called ‘Millionaire’s Amendment’ to the 2002 campaign finance law. Davis argued in the district court that the law, which basically raises the contribution cap for individuals running against self-financed candidates, violated the First Amendment and the Equal Protection principle implicit in the Fifth Amendment. The district court rejected both of these claims, stating first that the law did not implicate the First Amendment because it did not impede Davis’ ability to spend money in support of his message, noting that it actually led to a higher level of speech in the race overall. The district court similarly rejected Davis’ Fifth Amendment claim, reasoning that although Davis may have been held to higher reporting standards than his opponent, his disproportionate wealth meant that the two candidates were not similarly situated and, therefore, the Equal Protection Clause did not apply. The campaign finance law allows direct appeal to the Court, which will consider whether Davis has standing to bring the First Amendment claim before deciding the case on the merits.
Does the Millionaire’s Amendment to the 2002 campaign finance law, which raises the contribution limit for those running against a self-financed candidate, violate free speech clause of the First Amendment and the equal protection principle of the Fifth Amendment?
Legal provision: 2 U.S.C. 441
Yes. Although all nine Justices agreed that Davis had standing to argue his case before the Court, only a 5-4 majority held that the contribution limits violated the First Amendment. In his majority opinion, Justice Samuel Alito noted that the Court had never upheld the constitutionality of a law imposing different contribution limits for candidates competing against one another. Because the Court found the laws in violation of the First Amendment, it did not reach the question of whether the Fifth Amendment was also violated. Justice John Paul Stevens, joined by Justices David Souter, Ruth Bader Ginsburg, and Stephen Breyer, filed an opinion concurring in part and dissenting in part, agreeing with the majority that Davis had standing but citing the reasoning of the district court to argue that the contribution cap did not violate the First or Fifth Amendment. Justice Ginsburg, joined by Justice Breyer, wrote a separate opinion concurring in part and dissenting in part, agreeing with Justice Stevens's argument but basing it on slightly different grounds.
Argument of Andrew D. Herman
Chief Justice Roberts: We'll hear argument first today in Case 07-320, Davis v. The Federal Election Commission.
Mr. Herman: Mr. Chief Justice and may it please the Court: This case involves the constitutional question of whether the government may regulate the personal spending of a candidate on behalf of his own campaign.
This is an activity that constitutes political expression at the core of the First Amendment, yet BCRA Section 319 seeks to deter and, failing that, penalizes such protected political expression.
Even if this Court finds that the harms upon speech of Section 319 are modest, the provision still fails to satisfy any constitutional standard.
It furthers no legitimate governmental purpose and conversely increases the undue influence of contributions upon Federal candidates.
Chief Justice Roberts: There is no restriction whatsoever on the wealthier candidate.
He can spend as much of his money as he wants.
Mr. Herman: That's correct, Your Honor.
The harm from Section 319 is that he is burdened from the beginning of his campaign throughout every step with the knowledge that any time he spends money he is going to be providing his opponent with an advantage; he is going to be enhancing his opponent's speech.
Chief Justice Roberts: Well, what if, for example, somebody takes out a television ad that says smoking this type of cigarette is actually, is not harmful to you.
The government is free to take out a contrary ad saying, no, it is and so you shouldn't do it, right?
Mr. Herman: Of course, Mr. Chief Justice.
Chief Justice Roberts: So governmental responses to the exercise of free speech are not automatically... don't automatically burden the exercise of that speech.
Mr. Herman: That is absolutely correct, Mr. Chief Justice.
Chief Justice Roberts: Well then, why does it burden it for the government to make it easier for private citizens to respond to that speech.
Mr. Herman: Well, Mr. Chief Justice, it's making it easier for a self-financed candidate's opponent to respond to that speech.
In essence, what Section 319 says is, we are going to make it easier for your opponent to beat you.
Justice Scalia: Mr. Herman, can the government respond to political speech?
The government can have a position on smoking cigarettes, it can have a position on a lot of things, but can it have a position on whether the Republican Party or the Democratic Party should win the next election?
Mr. Herman: Absolutely not, Justice Scalia.
Justice Scalia: Isn't that a distinction here?
Mr. Herman: Yes.
Chief Justice Roberts: What case supports that proposition?
Mr. Herman: That the government cannot take--
Chief Justice Roberts: Government can't engage in political speech.
Mr. Herman: --Your Honor, Buckley is on... there is not anything--
Justice Ginsburg: How is the government speaking?
You have already acknowledged that the wealthy candidate can spend as much as he or she wants and the end result of this scheme is that there will be more, not less, speech because the non-affluent opponent will now have money to spend that he didn't have before.
So I think you have to concede that overall the scheme will produce more political speech, not less.
Mr. Herman: --Well, Justice Ginsburg, I can't concede that, and this is the reason why.
If Section 319 operates as it's intended to, it will deter self-financed candidates from ever reaching that $350,000 threshold and triggering the, quote unquote, "more speech".
What it is really designed to do at every single step--
Justice Ginsburg: Has it done it?
I mean, we do have some experience under the statute now.
Mr. Herman: --We have very little experience under the statute, Justice--
Justice Souter: Well your clients... wasn't your client's latest filing that he intended to spend a million dollars.
Mr. Herman: --For the 2006 campaign?
Justice Souter: I think that's--
Mr. Herman: That is correct.
Justice Souter: --So it didn't deter him.
You're in the position in which it clearly didn't deter your client.
He says, I'm going to spend three times as much as the threshold figure, and there is no empirical evidence that it's deterring anybody else.
Mr. Herman: Well, Justice Souter, in fact it did deter my client.
If you look at his election in its totality, his opponent spent over $5 million.
Justice Scalia: Do we usually evaluate restrictions on First Amendment rights on the basis of whether the chill that was imposed by the government was actually effective in stifling the right?
Mr. Herman: No, Your Honor.
Justice Scalia: If the person goes ahead and speaks anyway, is he estopped from saying that the government was chilling his speech nonetheless?
Mr. Herman: Absolutely not, Justice Scalia.
Justice Scalia: Isn't that's what's going on here?
Mr. Herman: Absolutely.
Justice Souter: Don't we expect a chill argument to at least have a ring of plausibility?
And your chill argument is that it is deterring.
It didn't deter your client.
There is no indication that it would deter anybody else and I have to say I don't see why it would.
Mr. Herman: Justice Souter, respectfully, I don't think that you can categorically say that it did not deter my client when he was outspent by $3 million in that campaign.
As he went through the campaign against his--
Justice Souter: You mean if the... if the other side had not had an enhanced spending capacity, your client would then have spent $2 million?
Mr. Herman: --Your Honor, he actually did spend $2 million.
Justice Souter: Whatever it is, I mean are you saying that if the... if the client... if the opposing party had not had an enhanced spending capacity your client would have spent even more?
Mr. Herman: Potentially.
Justice Souter: That seems to substantiate the, at least the ostensible basis for this statute.
Mr. Herman: Your Honor, if the basis for the statute is to, quote unquote, $1.4 million even though he had already outspent my opponent by $3 million.
Justice Alito: Is there any reason to think that this statute will have any greater or different effect of Mr. Davis in the upcoming election than it did in the last election?
Mr. Herman: There is, Justice Alito.
Justice Alito: Why?
Mr. Herman: Because his incumbent opponent from the last two elections has announced his retirement and so Mr. Davis will now be facing very likely primary challengers, and then if he were to prevail in the primary he'll be meeting a non-incumbent challenger in the general election as well.
So it's an open seat.
And again, one of the great deficiencies of 319 is that it fails to take into account any of the advantages of incumbency, not just the financial advantages but the inherent advantage that each and every incumbent brings to an election when he or she runs for re-election, the fact that the incumbent has much greater status as--
Justice Scalia: The government says that in fact more and quite a bit more incumbents went over the $350,000 personal funding limits than non-incumbents.
Something like... I don't know, 14-2 or something like that in the last election, is that right?
Mr. Herman: --First of all, the statistics here are incomplete because basically the briefing in this case was concluded in early September of 2006, before a lot of primaries occurred for the 2006 House election.
And so I think referring to those numbers... the FEC has never... we've never received any additional numbers for the effect, but--
Justice Ginsburg: But it was a four-year record and the numbers are rather startling that... is it 110 senators or representatives qualified for the enhanced contributions and only 6 of them were incumbents?
Justice Scalia: Yes.
Mr. Herman: --The other number that was cited is that only 2 of 60 incumbents actually triggered the Millionaires' Amendment in those--
Justice Scalia: Of course, that could mean that the millionaires have already been elected and are now pulling up the ladder after them.
Mr. Herman: --That's certainly our argument, Justice Scalia.
Justice Scalia: Right.
Justice Ginsburg: Well, if that's so, one of the reasons that has been given for this statute is that it encourages the parties to favor the wealthier candidates; it deters people who are non-affluent but highly meritorious.
So... and it gives the public the perception that the seats in our Congress are there to be bought by the wealthiest bidder.
And if there's anything to that... well, do you reject that out of hand as what the statute is all about?
Mr. Herman: Justice Ginsburg, I believe that the... the fact that the statute expands the supposedly anti-corruptive $2300 to $6900 and allows a national party to make coordinated communications of an unlimited amount in response to the, what Buckley called "ameliorative speech" by a self-financer, would also increase the perception that... that our candidates are there to be bought.
It seems to me that if Mr. Davis had sat down and read all of this Court's jurisprudence before he decided to run, he wouldn't have seen a word in there about leveling the playing field.
Justice Ginsburg: But I thought... I thought your brief... and correct me if I'm wrong... said at one stage that there is... what Congress was driving at is a valid concern, but there are less restrictive alternatives.
And I was trying to find what those less restrictive alternatives were.
Mr. Herman: Well, Justice Ginsburg, I can think of one off the top of my head which is not this case, and that's public funding.
If Congress were truly concerned about providing a boost to minor party candidates who may not be able to raise the $2300 to begin with, much less take advantage of the benefits of 319, or wanted to boost self-financed candidates who, say, like Mr. DeRossett in the amicus brief, in his amicus brief, who mortgaged his house or others who have encumbered their pensions and raised $350,000 or $400,000 and then triggered the amendment, if they wanted to foster all of those people of modest means to participate, then the easiest way and the way sanctioned by this Court in Buckley is to institute a public funding system and allow them to choose.
They can raise private funds if they'd like; they could do it personally with their own money; or they could take whatever amount that the... that the State was willing to give them--
Justice Scalia: But that wouldn't level the playing field.
I mean, the other side, the millionaire, won't take the public funding and he'll spend his millions and whoever gets the public funding... or are you saying the public funding should match whatever the other side pays?
Mr. Herman: --No, Your Honor--
Justice Scalia: Well then--
Mr. Herman: --But this Court's analysis in Buckley... the public funding analysis in Buckley does not center on leveling the playing field or providing equality for all candidates.
Justice Scalia: --Do you think that's a valid constitutional objective, to level the playing field?
Mr. Herman: --I--
Justice Scalia: Do you think we should trust our incumbent senators and representatives to level the playing field for us?
Mr. Herman: --Absolutely not, Justice Scalia.
And there's a reason why there's a distinction between an anti-corruptive purpose and a leveling-the-playing-field purpose.
When Congress legislates to deal with the actuality or appearance of corruption, they are legislating uniformly and they're not taking an interest in the outcome, in the competitiveness.
When they are talking about leveling the playing field, one of the players on that playing field are incumbent members of Congress.
It's like saying that we're going to trust basketball players not... to call their own out-of-bounds plays.
Justice Ginsburg: But isn't there something different between what the statute was at the time of Buckley, that a lid on, you can't spend more than X amount of money, and a statute that says we're going to let you spend, the sky is the limit for you, but we're going to give a boost to your opponent?
Mr. Herman: Justice Ginsburg, in Buckley there... there was no lid on personal expenditures.
The Court struck down that aspect of Buckley and upheld the public funding provision.
So the Court was--
Justice Ginsburg: I'm talking about the statute as it was originally enacted by Congress did have expenditure limits and this Court said that was no good.
This statute doesn't have that problem because it doesn't put a lid on the candidates self-financing.
Mr. Herman: --That's correct, Your Honor.
But... but again, if you're going to make a comparison to the public funding system in Buckley that was approved by this Court, that system was indifferent to the... the source or the amount of funds.
All the Court said there... or the equality... that that statute was indifferent to whether the playing field was level.
All... all Buckley said and all Congress said in enacting the public funding was we want to take the allegedly corruptive private funds out of the system, and we want to replace it with public funds and--
Justice Alito: Even if... even if leveling the playing field is not generally a compelling or maybe even a permissible interest, is it a stronger interest when one of the reasons why the playing field is not level is other action that Congress has taken?
If there weren't expenditure limits, then self-financed candidates wouldn't perhaps have as much of an advantage as they do.
So if we accept the world in which contribution limits are constitutional, it... does that provide a basis for Congress to try to rectify at least in part what it itself has done by imposing the contribution limits?
Mr. Herman: --Justice Alito, leveling the playing field is... I'm not quite sure how Congress would start to do that without implicating their own interest.
When you say that you're going to level the playing field, Congress has to look at the whole playing field.
They can't just carve out a section that applies to other people and not talk about their interest in leveling the playing field.
I think it's a very difficult road to go down.
Justice Scalia: What we're talking about in leveling the playing field, I guess, is leveling the amount of speech that each side has, to make sure that each side has the same amount of speech.
Is that... is that what's going on here?
Mr. Herman: Well, it's an attempt to do that.
And again, in Buckley this Court said that... that Congress has no interest in determining whether speech is excessive or unwise or wasteful.
That's... that's ultimately the purview for the voters, and that's really the fallacy in 319 at its heart, is there's no such thing as secret self-funders.
They will... everything that they do is disclosed in the same way that all other expenditures and contributions are disclosed in quarterly and pre-election reports.
Certainly, in many cases, their opponents are going to make the case that this wealthy person is out of touch, they don't represent the district, your vote is not to be bought.
And then ultimately the voters will have the determination on what kind of candidate they want.
Justice Scalia: Are we... are we talking wealthy people here?
What's the average price of a home in the United States?
I think it's a good deal above $350,000, isn't it?
Mr. Herman: It certainly is in this area and in many congressional districts in the United States.
And that's a very good point, Justice Scalia.
This provision affects less... about a quarter of what it costs to run a competitive race in 2006.
So certainly it's not as if Congress said, well, if you spend some disproportionate amount of money to a congressional race, if you go ten times over what it should cost, we're going to step in.
Chief Justice Roberts: You don't think that would be any more constitutional than this, do you?
Mr. Herman: --I think it would be equally unconstitutional, Mr. Chief Justice.
But if you're talking about the tailoring of the statute, I think that that is certainly something that's relevant.
Justice Kennedy: I'd like to ask about the provisions of the statute which allow the candidate who doesn't have the personal funds... what was the name of the challenger in this case?
Not Davis... Reynolds?
Mr. Herman: Tom Reynolds.
Justice Kennedy: Reynolds... to receive, is it, unlimited contributions from his own party?
Mr. Herman: He can receive up to 100 14 percent of whatever that OPFA number is... the--
Justice Kennedy: Yes.
Mr. Herman: --the purported difference in funds.
Justice Kennedy: Suppose you had a statute which either explicitly said or has the effect, as this does, that the less wealthy challenger, the challenger in Reynolds' position, has more access and more support from his party than the challenger does from his party?
What is your best case that indicates that that is unconstitutional, and what is your argument that that is unconstitutional?
Mr. Herman: I'm sorry, Justice Kennedy?
Justice Kennedy: That concerns me in this.
What is your best argument that differential treatment of the candidates vis-a-vis support from their respective parties is unconstitutional?
Mr. Herman: Well, again, Your Honor, if you're making a distinction... when you talk about the--
Justice Kennedy: The statute makes that distinction.
Mr. Herman: --Well, the statute talks about the less wealthy candidate.
Justice Kennedy: And it seems to me that that distinction is somewhat questionable, and I'm asking you for your best statement of the theory as to why it's unconstitutional and your best case to show that it's unconstitutional.
Mr. Herman: The best argument, Justice Kennedy, is that money and speech are synonymous in an electoral context, and it's inappropriate for the government to say that you, as the purportedly wealthier candidate, have too much speech; that that's enough speech from you.
Justice Kennedy: But you make that argument to the statute generally.
Is there any more specific argument that you can make in the context of the less well-funded candidate having more support from the party than the well-funded candidate had?
Mr. Herman: Well--
Justice Kennedy: It seems to me that that's a particular vice of the statute, and I want to know if there is a formulation that's more precise than the general attack that you made... that you make.
Mr. Herman: --I--
Justice Ginsburg: Could you clarify with respect to that question two things: The party is not at liberty to give anything it wants.
You explained that it would be... it's tied to that formula.
So the wealthy person could still have a lot more to spend.
But the party also is... there's no obligation of the party to give one cent to anybody that it doesn't choose to give money to; is that right?
Mr. Herman: --No, Justice Ginsburg.
Of course, the party would have to make a determination if they felt that this person was--
Justice Kennedy: But the party for the less well-funded candidate has the option to have much closer ties, much greater involvement, than the party for the other candidate; and that seems to me highly problematic.
And I want to know the best case that you have for that proposition and the best statement of law that can you give me for why that is unconstitutional.
Mr. Herman: --Well, Justice Kennedy, if you refer to Colorado II, where this Court talked about the facts that... where this Court upheld limitations on party, unlimited party-coordinated communications, because that... allowing the party to do so would raise the possibility of evading the contribution limits.
And so accordingly they upheld the 42... the $42,000 limit on coordinated communication.
Chief Justice Roberts: Counsel, you said earlier that money is... money is speech in this area.
So I take it you think that the restrictions, otherwise applicable restrictions on the less wealthy candidate, raise problems under the First Amendment?
Mr. Herman: Yes, Mr. Chief Justice.
Chief Justice Roberts: So this law eases those problematic restrictions.
It's less violative of the First Amendment.
Mr. Herman: It is less violative of the First Amendment, but, again, this Court has made the distinction between contribution limits, which it found was a reasonable burden on the Constitution, and expenditure limits, which... which are not.
Justice Scalia: It doesn't limit those restrictions on your candidate.
Mr. Herman: --It does not limit the restrictions.
Justice Scalia: It simply makes the imposition of the restrictions uneven.
Mr. Herman: That is, that is correct.
Chief Justice Roberts: Well, but your candidate isn't subject to any restriction at all on what he can spend and his opponent is subject to less restrictions.
It seems to me the First Amendment comes out better.
Mr. Herman: --He is... my candidate, my client, is subject to restrictions.
The statute in its entirety--
Justice Stevens: Why can't he go out and raise funds?
Does the statute prohibit him from raising funds from third parties?
Mr. Herman: --Absolutely not, Justice Stevens.
But for many... for many self-financed candidates, the fact that--
Justice Scalia: Doesn't it prohibit... I thought it prohibited him from raising funds in the amount from as wealthy donors as his opponent can now go to?
Don't those limits on contributions continue to apply to him?
Mr. Herman: --The contribution limits apply to him as they would to any other candidate except for his opponent.
Justice Kennedy: And he cannot have the support from his party that the opponent can have from the opponent's party.
Mr. Herman: He cannot have the same level of support.
Justice Kennedy: Not the same level of support.
Mr. Herman: That's correct.
Justice Kennedy: And is party support sometimes important in an election?
Mr. Herman: Of course, it can be vital in an election, and it can be vital for a candidate who may be a candidate of modest means.
That would be certainly one way for them to generate support.
Did he convince their party that they were worthy of that support?
Justice Kennedy: Does anything in Colorado indicate that there can be a differential between the party support given to one candidate and the party support given to the other?
Mr. Herman: Not... only as determined by the party's decision as to how they feel about the candidate's positions.
Justice Stevens: Well, but they certainly can allocate funds more generously to one candidate than another; can't they?
Mr. Herman: They certainly have that opportunity, but under... under a limit, under the $42,000 limit, as opposed to essentially an infinite limit when you're dealing with a self-funded candidate.
And incidentally, Justice Stevens, to address something else that you just brought up, for many self-financed candidates the fact that they don't take money from their party or from donors or from PACs is a significant issue for them in their campaign.
I mean certainly for Mr. Davis, the fact that he is independent and can make his own determinations--
Justice Scalia: Who is more incorruptible than the millionaire, right?
Mr. Herman: --He is the ultimate independent.
Justice Scalia: The ultimate incorruptible.
Mr. Herman: You cannot corrupt yourself.
And, again, the voters will get to decide whether they want someone who is like that or they want someone who is more in tune with, say, what the party wants or with what his donors want.
I mean, that's really the essence of our... of our electoral system.
Chief Justice Roberts: I think... I mean, obviously you're correct that this system benefits incumbents, but it benefits your client in a particular way as well.
The parties are certainly interested in candidates who will fund themselves because that presents less strain on the party's resources.
Mr. Herman: Mr. Chief Justice, they are interested in those candidates only inasmuch as they get elected.
The moment that the public turns on them, they won't be interested.
And certainly the public was not particularly interested in Mitt Romney, who spent a significant amount of money on his own behalf, and many other spectacular flameouts.
Chief Justice Roberts: I'm not sure we need characterizations of the political candidates...--
Mr. Herman: I apologize.
Chief Justice Roberts: --in this forum.
Mr. Herman: Let me just add... let me just add one other thing.
The government's own experts, all of their information is derived from an individual who is quoted as saying that self-financed candidates rarely win, and when they do, it's usually for some other reason.
The fact of the matter is they don't always make great candidates because they're not within the mainstream.
I'd like to reserve the balance of my time.
Argument of Paul D. Clement
Chief Justice Roberts: Thank you, Mr. Herman.
Mr. Clement: Mr. Chief Justice, and may it please the Court: Appellant's claim here is an odd sort of First Amendment complaint.
He does not suggest that Section 319 has limited his own spending at all.
In fact, he has twice spent a substantial amount of his own money in excess of the statutory triggers.
Justice Scalia: It has penalized his own spending.
Mr. Clement: Well... and we can talk about that as well, but I think it's worth recognizing that his own spending is unlimited both in theory and in fact.
And, if anything, he has announced his intent this next time around to spend even more of his own money.
And the other thing that I think is relevant is his experience is not atypical in this regard.
Justice Scalia: That just means he is willing to accept the penalty in the next election even if this case doesn't come out in his favor.
Mr. Clement: Well, Justice Scalia--
Justice Scalia: It doesn't prove that it isn't a penalty.
Mr. Clement: --Well, I don't think in any way it's a penalty.
And I think in order to understand it as a penalty you have to accept the proposition that you start out with a constitutional entitlement to speak freely without the opportunity for the other side to respond, and I don't think the Constitution recognizes this.
This isn't a context where they forced the Appellant to pay for the other side's speech, as in Tornillo, or carry the speech, as in PG&E.
And I don't think it's fair to look at the record here and suggest that what Congress was trying to do here was actually limit or deter self-financing.
Justice Alito: Well, isn't there something very... isn't there something very strange about having different contribution limits for candidates in an election?
Do you think it would be constitutional for Congress to say that the... the contribution limits for incumbents is X, but for challengers it's 2X or one-half X?
Mr. Clement: Well, I think 2X would be constitutional.
And I think most people would be surprised if Congress passed the statute that gave more generous contribution limits to challengers, but I think it would be a perfectly appropriate regime because it would recognize that incumbents have certainly built-in advantages such that the relatively low hard money contribution caps have a greater influence, greater impact on a--
Justice Scalia: You think that's really a proper function of government, to look out over there and say, we're going to even the playing field in this election?
What if some... one candidate is more eloquent than the other one?
You make him talk with pebbles in his mouth or what?
Mr. Clement: --Justice Scalia, I think there's an important distinction that was suggested in one of Justice Alito's question, between the government trying to level the playing field in the abstract and the government looking out, not at the eloquence of candidates, but at its own campaign finance regime after this Court's decision and recognizing that, look, the differential--
Justice Scalia: But the campaign finance regimes we've approved up to now, the significant limitations, have had an anti-corruption rationale.
There is no anti-corruption rationale here.
The only purpose of this is to level the playing field.
And I am deeply suspicious of allowing elections to be conducted under a regime whereby Congress levels the playing field.
That seems to be very dangerous.
Mr. Clement: --Well, again, Justice Scalia, though, you start with the anti-corruption rationale that underlies the hard money contribution caps.
And what Congress has recognized is that after Buckley and after this Court said that a candidate's ability to self-finance is unlimited, it's recognized that in a subset of elections where somebody is going to spend an awful lot of their own money to self-finance, the ordinary hard money contribution caps are going to have a potentially skewing effect.
Justice Kennedy: It's not just money.
It's not just money.
It's the quality and kind of speech.
You're saying, the government is saying, the statute says, that the underfunded candidate has less access to coordinated expenditures with the party than... than the other party... than the other candidate.
And the cases have acknowledge, the statute acknowledges, that coordinated expenditures have a particularly potent force, and you are saying candidates are treated differently in the access to this kind of speech.
And I know of no precedent of this Court that says one party is entitled to assistance from a certain segment and another party is not, based on the... the content of the speech.
And that's exactly what this is.
Mr. Clement: Well, Justice Kennedy, what I would say is, if you analogize to a system where Congress decided that because of the advantage that incumbents have, there is a greater scope for coordination of the party with the challengers, I would certainly be here defending that statute.
I would like to make clear, though, Justice Kennedy, in fairness, that this focus on the coordinated expenditures of the parties has really not been the focus of Appellant's challenge in this case.
Justice Kennedy: But it's in the statute and it's part of the challenge.
I agree that it's been given a relatively minor position, but it's of great concern to me because it puts this Court, it puts this statute, in the position of preferring one kind of speech over another.
And we simply do not do that.
Mr. Clement: Well, Justice Kennedy, let me say two things about the fact that this was not the gravamen of the challenge here, because one reason I think that's clear is if you look at the record here, at the point that the record closed in this case no party had taken advantage of that coordinated expenditures provision.
Justice Kennedy: Are you saying that argument is not properly before us when we are judging the validity of the statute that's been challenged?
Mr. Clement: I'm saying that this record would not allow you to invalidate the statute on that ground.
The record at the time that it closed should... there was no time that a party had taken advantage of that.
Now, I understand that it's outside the record, but I understand after the record closed there were some coordinated expenditures.
But another thing I would certainly want to know before I considered that challenge, Justice Kennedy, is whether this particular Appellant had coordinated expenditures from his own party up to the limit, because we know as a general matter that there is... parties will fund different candidates differently or may fund--
Justice Kennedy: But the provisions--
Mr. Clement: --some and not others.
Justice Kennedy: --The provisions of the law which prefers one candidate over the other with respect to coordinated expenditures has an impact on campaign strategy.
Mr. Clement: Well, again, Justice Kennedy, in fairness, though, I mean, one would expect if that were the nature of the claim, that at a minimum we would know two facts that I don't know, aren't in the record.
One is whether or not his candidate reached the cap from his party's coordinated expenditures, because if he didn't I don't see why that individual would have standing.
Justice Kennedy: Mr. Solicitor General, you're defending this statute on its face, I take it.
Mr. Clement: Well, I am defending--
Justice Kennedy: And it seems to me that this is a facial invalidity of substantial proportions.
Mr. Clement: --Well, Justice Kennedy, I always thought it was harder to bring a facial challenge, not easier to bring a facial challenge.
And I realized that we relaxed the normal rules about as-applied challenges in the First Amendment context, but I think there has to be a limit to that, too.
And I think in a case where we don't know the fundamental facts that at least I'd want to know before even evaluating that challenge, I think it would be bad for us to invalidate the statute, it would be wrong for us to invalidate the statute on those grounds.
And I think I would still be here defending it--
Justice Scalia: I thought that that's what a facial challenge essentially consists of.
You don't look to see whether in fact the harmful First Amendment effect has occurred; you look to whether it opens up the possibility for that to occur.
Mr. Clement: --But I don't think mere theoretical possibility is enough, even in the First Amendment context.
And I still think you ask the question: Does this individual even have standing to bring the First Amendment challenge?
And I would think an element of standing to bring the First Amendment challenge Justice Kennedy has in mind would be a candidate who, first of all, his opposing candidate took substantial amounts of excess contributions.
But at a bare minimum, I would think that the plaintiff would have to say that, look, I took up to the cap of the coordinated contributions from my party and I would have loved to have gotten more, the party was willing to give me more, but I wasn't able--
Justice Scalia: You can't go in before the election and say: Look, I'm about to be terribly disadvantaged; my opponent is about to have all of these coordinated expenses and I'm not able to.
And you're going to say: Oh, we have to wait until the election is over to see whether in fact that happens.
It seems to me this is precisely the kind of a situation a facial challenge is designed for.
Mr. Clement: --With respect, Justice Scalia, there is two things.
There is whether you can bring a facial challenge or not and there's when you can you bring it.
And I think if you go in and allege that all of those things are likely, then you probably have standing at the outset.
But those allegations weren't made here.
The focus of this case has always been on the contribution levels and the contribution provisions of this statute.
At the end of the day the analysis is quite similar, so I'm not--
Justice Stevens: Isn't one of the virtues of the independent self-financed candidate is he can emphasize his independence?
So he very rarely is going to complain about not being able to get too much money, enough money from outside sources.
And isn't it a fact that most of them do finance a very significant 24 percentage of their total campaign costs?
Mr. Clement: --I think all that's right, Justice Stevens.
And as you suggest, it's an unlikely challenge to be brought because often times the self-financer is advertising his independence from party and contributors here.
Justice Kennedy: Do you want us to write an opinion which says that independently wealthy candidates generally have different sorts of views than other people?
Mr. Clement: No, I don't think that's true.
But I think that they do have different ways of raising the funds necessary to mount their campaigns.
And I think... to get back to the focus of this, I think all that the Court needs to recognize is that the Buckley decision itself has created a potential anomaly, because if you want to think about self-financing, you can think about it as being the ultimate form of soft money, because the Constitution itself precludes Congress from limiting the amount of self-funding.
Chief Justice Roberts: General, we haven't talked yet about the disclosure, the special disclosure requirements in that money is speech, and in a First Amendment area it strikes me as very problematic that the government requires you to disclose in a differential way how you intend... when you're spending a particular amount of money and on such precise day-by-day requirements.
I mean, is there any other area... if you're writing a book, you don't have to disclose to the government when you're going to publish it and how far along you're getting in the draft.
And yet, it just seems this is the same sort of thing in the election context.
Mr. Clement: Well, Mr. Chief Justice, there are other contexts within the election area where there are comparable disclosure requirements.
And I think I would point you to the McConnell case and the fact that this Court approved a 24-hour disclosure requirement for electioneering communications.
Chief Justice Roberts: But those are applicable across the board.
These are special disclosure requirements for people who are going to engage in additional speech.
Mr. Clement: Well, I mean, I'm not... I'm not sure that's right in a sense that these are disclosure requirements that apply across the board.
The timing is triggered particularly by a candidate's contribution to their own campaign.
So that's the way in which they're different.
But I think it's worth focusing on that, because I actually think the constitutional issues that are implicated by a disclosure of a candidate's contribution to his or her own campaign are actually less significant than generally is true of campaign finance disclosure, because what this Court talked about in Buckley as the primary concern in the disclosure context was the associational rights that are reflected when somebody contributes to a candidate or an organization makes an electioneering communication on behalf of a candidate.
I think those associational interests are obviously not implicated when all you're forcing someone to disclose is the amount that they spent on their own campaign.
Chief Justice Roberts: So wouldn't you think they would require more detailed and more expeditious disclosure of the associational link than of the self-funding?
And yet it's the exact opposite?
Mr. Clement: No.
I would think the Constitution would be more concerned about the disclosing the associational link because there is more than one constitutional interest at issue.
And I think if you look at this as a whole there really isn't a differential regime.
Every electioneering communication from the first $10,000 has to be disclosed.
If anything, the complaint should be the electioneering communication should come in here complaining about the fact that these self-financing candidates get a free pass for the first $350,000 of their financing, before the disclosure requirements kick in.
So I mean, I really think this is a relatively modest disclosure provision and it arises in a context where there aren't associational interests.
Justice Ginsburg: The problem is it's every $10,000.
As you pointed out, it doesn't require more disclosure.
All of this information would be disclosed under the system without this 24-hour, and that I think is the complaint, the burden of having every time you spend $10,000 to file something.
Mr. Clement: But Justice Ginsburg, I think that's the same in the electioneering communications, which is it's triggered for $10,000 but I think it continues to be triggered.
Now, it isn't the nature of the challenge, so I may be wrong about that, but I think that's the way that that works.
In any event, I think it's a fair point here that the fact that you trigger additional disclosures with each $10,000 I think is useful in informing the electorate; but I also think it's fair to say is necessary in order for the substantive provisions of the statute to operate, because what they want to do is they want to enable as a self-financed candidate spends additional money as the election date approaches, they want to put the opponent, if they have otherwise reached the cap of what they can raise in additional funds in a position to continue to raise additional funds.
Chief Justice Roberts: What if the... what if the restriction were more tailored, if Congress decided the one area where the wealthy really have an advantage is buying television time, so that's what we're going to restrict.
If the wealthy individual buys a certain amount of television time, we're going to allow contributions to the less wealthy candidate to buy television time.
They think the money is not as big a deal in the other areas.
Would that be all right?
Mr. Clement: I think it would be constitutional, Mr. Chief Justice.
I think it's reacting to the same basic phenomenon, which is one aspect of the campaign finance regime gives self financers an ability to spend a tremendous amount of money and creates a potential disparity.
What creates the disparity is the fact that you have relatively low hard money contribution caps, and Congress recognized--
Justice Scalia: What if one party has more time on his hands?
He's... he's unemployed, so he... you know, he can go around, whereas the other party has to... has to hire people to speak for him.
He has... he has a job most of the time.
Are you going to even that disparity, too?
Mr. Clement: --No, Justice Scalia, and again I think there's an important distinction between trying to level the playing field in every respect--
Justice Scalia: I can understand leveling, leveling contribution limits when you're worried about corruption, I can understand that.
But doing it just to... to make sure that there is an even playing field, I... there's just no end to that.
And it just isn't money that makes it an even playing feed.
A lot of other factors... incumbency, the war chest that incumbents have which... money from the last election, that isn't counted for... for the millionaires' provision.
There are so many factors that... that go to making the even playing field that I... I'm just very reluctant to acknowledge a congressional power to... to sit in judgment of our elections that way.
Mr. Clement: --Well, Justice Scalia, I mean, in an odd way I think this principle is actually implicit in the plurality opinion against... in Randall v. Sorrell.
I know you didn't join that opinion, but in that opinion this Court said, the plurality said, that contribution limits can in some ways be too low because if they're too low they preclude the ability for somebody to raise enough money and that exaggerates the advantages that incumbents have.
And I think Congress really made an analogous judgment here.
I'm not suggesting it was constitutionally compelled, but they made an analogous judgment, which is there is more than one source of advantage; one source of advantage is the self-financing candidate's ability to spend unlimited amounts of their own money.
They respected the fact that that's a constitutional entitlement, but they said it's not that in the abstract that's the problem; it's the combination of unlimited self-financing and relatively low hard money contribution caps--
Justice Scalia: But--
Mr. Clement: --and they relaxed the one thing that they could control, which was the cap.
Chief Justice Roberts: So what if Congress decided that a debate on a particular issue was distorted by the wealth of owners of newspapers?
And so it passed a law saying that people who are responding to that are relieved of the tax burden they would otherwise have to pay, on whatever their... you know, sales tax on pamphlets that they want to sell.
Would that be all right?
Mr. Clement: I--
Chief Justice Roberts: To level the playing field on the debate on that particular issue?
Mr. Clement: --I think it might be and it's not that radically different than what this Court approved in Ragan against Taxation Without Representation.
Chief Justice Roberts: No... so you can tax... you can tax a newspaper, but you cannot... you don't have to tax people who are responding to the newspaper?
Mr. Clement: Well--
Chief Justice Roberts: The taxing power is an... is a limit on the exercise of First Amendment rights?
Mr. Clement: --Maybe there are differences in that particular context.
Maybe the Freedom of Press clause informs the analysis.
But this Court has upheld the regime that withheld tax benefits to an organization if it engaged in lobbying; and at the same time this Court said that it was okay to give those tax benefits--
Chief Justice Roberts: But that's any... any organization that engaged in lobbying.
Mr. Clement: --Yes, but the next couple of lines of the opinion said: And it's okay if we give those tax benefits back to a veterans organization, but only veterans organizations.
So I just think what that case shows up is that the Court has recognized that the government has a fair amount of flexibility.
Chief Justice Roberts: So is there no limitation on the rationale of leveling the playing field throughout the First Amendment?
Mr. Clement: No, there is... there is a limiting principle, and I think that, importantly, there is a limiting principle that's very applicable to this very context, which is I think if Congress went to the point where they weren't doing what I think they're doing here, which is not trying to limit the amount of self-financing, but using it as a mechanism here to identify particularly costly races where they should raise the contribution limits, if they went further and basically said we're going to give you public financing if your opponent self-finances, and we're going to give you two dollars for every dollar that your opponent self-finances, I think at that point as a practical matter the regime would operate as a ban on... as a cap, just like this Court held in Buckley.
But I think that's the way to approach this issue, which is to basically say if what Congress is doing is really trying to effectively cap self-expenditures, then Congress cannot do that; but if what Congress is doing is giving candidates choice and is trying to react to the regulatory environment created by self-financing--
Chief Justice Roberts: Well, it's trying... it's certainly trying to chill self-financing by burdening it when it reaches a certain level.
Mr. Clement: --I mean, I really don't think that's an accurate description of what happened here, because if you look at the legislative record here... I know not everybody likes to do that... but if you look at the legislative record here, you will see that both parties in this, the opponents and the proponents of this amendment, realize that they couldn't limit self-financing and that they were unlikely to limit self-financing because it's such an attractive option for parties and for candidates.
And both parties took it as a given that the effect of Section 319 and its Senate counterpart would be to put more money, not less money, into electoral speech.
Justice Alito: How is it that there is a serious corruption problem in most instances if a contributor gives more than $2,300 to a candidate, but there is no serious... presumably Congress doesn't think there is a serious corruption problem when this statute kicks in and somebody gives $6,900 to a candidate?
Mr. Clement: Well, Justice Alito, what I would say is that what the relaxation of the contribution limits reflects is an adjustment of other interests; and I don't think in principle what Congress has done here is different from what a number of States do, which is they say for the race for governor the contribution cap limit is going to be 2,000; for State auditor it will be a little less; and for local representative it will be substantially less.
Now, I suppose somebody could have come in and said, look, you know, the race for governor you can give $2,000; you can only give a 1,000 for this representative race, so surely that's irrational because the State has recognized that a contribution of $2,000 is noncorrupting.
It's not the way it's ever proceeded and I think this Court's--
Justice Alito: Isn't there a difference, because it may take... it may take more money to campaign for a particular office, and so the... it might take a greater amount to have a corrupting influence on... on that particular race than on a race where the total amount spent is... is lower.
But here you're not talking about different offices.
Mr. Clement: --No.
But I think you're talking about Congress using a mechanism that is equally effective in identifying races that are likely to be more expensive.
When one party is spending more than $350,000 of their own money, that's every bit as likely to be a more expensive race than the race for governor or State treasurer or a local representative.
And that's why I think this is so responsive to the problem that Congress recognized with the combination--
Justice Alito: But it applies different limits to different in the same... to candidates in the same race.
So why would Mr. Davis be subject to potential corruption if he got 2,300... $2,301 from a... from a contributor, but his opponent in exactly the same race would not be exposed to corruption if he got $6,900?
Mr. Clement: --Well, can I say two things in response to that?
One is it would not be unprecedented for this Court to approve a regime where the choices of the candidates led to different contribution levels in the exact same race for the exact same office, because that's what happens in Buckley in the public financing scheme that this Court approved.
If somebody accepts public financing for the general election for presidency, they are effectively agree to a zero contribution limit; whereas, their opponent, minor party opponent for example, would be subject to higher contribution level.
Justice Scalia: --That's the price of accepting the government subsidy.
They're... nobody is accepting a government subsidy here.
The man is spending his own money--
Mr. Clement: But one--
Justice Scalia: --for a speech.
Mr. Clement: --But one of the prices of accepting the government subsidy in Buckley was to agree to limit your own financing of your own campaign to $50,000.
Now, their whole theory of this case is that somehow a benefit to their opponent is the same thing as a detriment to themselves.
And it seems to me that... I mean, the base lines here are sufficiently manipulable; the analogy is exactly the same.
Justice Breyer: Can you back to Justice Kennedy's question, where as I took it he identifies a problem that he sees in this portion of this act which, should the limit be exceeded by our opponent, then we can go to the party and the party can give us more?
Now, assume for the sake of argument that he has correctly identified a problem with that.
Now, my understanding is that once the limit is exceeded and you have this extra amount, three things happen: One, an individual could contribute two or three times the amount to the party directly.
A second possibility is an individual who has exceeded the global amount now gets a bump up and can contribute.
And the third thing is the party thing.
So focus on that statute where this is written.
In your opinion, if, for the sake of argument, there were a problem with the party, would that particular form of words in the statute be severable from the rest of it?
Mr. Clement: It certainly would, Justice Breyer, and one thing to keep in mind in interpreting the statute is that it has Section 401 of the original BCRA... I think we have it at page 28 of our brief... is what I would describe, I think, as a "super-severability" clause, because it says not only are unconstitutional provisions severable, but even unconstitutional applications of the same provision are severable.
And I think there would be no problem effectively leaving the statute with the disclosure requirements in place and two of the three means of taking advantage of additional opportunities that the statute affords challengers.
Justice Ginsburg: It--
Mr. Clement: So I certainly think it would be severable.
Justice Scalia: On the theory that it doesn't make much sense anyway?
Is that why--
Mr. Clement: No.
Justice Scalia: --we can chop it up this way?
Mr. Clement: No.
To the contrary, on the theory that this statute operates on this record without that provision being implicated at all.
I mean, in the first applications of this, the entirety of the 2004 election cycle, no party took advantage of the coordinated--
Justice Ginsburg: --But I thought that--
Mr. Clement: --contributions.
Justice Ginsburg: --that Justice Breyer's question, General Clement, was he asked you to assume that that was unconstitutional, and you were answering if it was unconstitutional.
But there is one person whose speech is being discouraged in the picture, and that's the contributor to the self-financed candidate.
You have to recognize that that one can't speak as much vis-a-vis the contributors to the other candidate.
Mr. Clement: I mean, I would concede that there will be these differential limits, but it's based on the choice of the candidate to engage or not in self-financing, and... I mean, the restriction there is much more substantial than the public financing scheme approved by this Court in Buckley, because in the general election if the candidate decides that it's going to... that a candidate is going to take the public financing scheme then in the general presidential election I can't give even a dollar to that candidate.
And it's also I think worth recognizing that in Buckley this Court recognized that, for constitutional and associational rights purposes, it's really the ability to associate with the candidate by giving any contribution, rather than the amount of the contribution, that satisfies that limit.
In all events, this is not a challenge that's being brought by contributors.
And I think it's worth recognizing that Appellant, even though some of its challenge, and I would say the gravamen of the challenge, sounds... his challenge sounds in equal protection terms, he doesn't really want a leveling-up where the opportunity would be for contributors to both candidates to make triple the $2300 limits.
He really wants to keep the yoke of relatively low contribution limits on his opponents.
And that's why I think this is such an odd First Amendment challenge.
Chief Justice Roberts: What if the law expressed a displeasure at the introduction of self-financing and said that, as you have these very rapid disclosures, that the less wealthy candidate can accept contributions whatever, twice the amount of whatever the self-financed candidate is spending on his campaign?
Is that all right?
Mr. Clement: I mean, I'm not sure I have the hypo.
If he can spend twice as much?
Chief Justice Roberts: Well, he... you know, the millionaire, as we are talking about, spends... discloses that he has spent $500,000.
Then the contribution limits are off the table for the less wealthy candidate to the tune of a million dollars, in other words twice as much as the self-financed candidate.
Mr. Clement: If I'm understanding the hypo which we were just talking about contribution limits, because there are no expenditure limits, if I'm understanding the hypo right, I think that would still be okay.
I mean, I think if Congress had decided here that if a self-financer spends beyond a certain amount, then what is important is that then the contribution limits would be lifted entirely.
I suppose Congress could do that, as long as they maintained what they called the "parity principle" or the "proportionality principle", which is in no circumstance will the opponent be able to raise more than the amount of the additional spending.
And if your hypo is suggesting that that would be relaxed so that they could raise twice as much, I think that would raise more difficult constitutional questions.
Chief Justice Roberts: Well, why not?
Because as... your point in this case, rather than the hypothetical, is that the self-financed candidate is not burdened in any way, but simply that his opponent has benefited.
And it seems to me that would be true in the case of my hypothetical as well.
Mr. Clement: Again, if I'm understanding the hypo right, I think you would say there that the candidate is effectively burdened because if you get to the point where you're past what I would call $2 additional additionally, I think at that point a rational candidate is not going to engage in self-finance.
And so in practice, the provision would operate as an absolute cap, rather than the way it operates here, which is not as a cap.
And I think if you look at the numbers in the record, joint appendix page 89--
Chief Justice Roberts: I would have thought all the arguments that you gave before, like the self-financed candidate wants to be able to say he doesn't rely on contributions and so on, those would still be equally applicable.
Mr. Clement: --They would, but I do think the statute in practice would operate quite differently.
And that's why I think it's very helpful that we have a record here in this case that we can cite to.
Chief Justice Roberts: So it's not a... it's not a qualitative argument you're making but a quantitative.
At some point, the benefit to the opponent gets to be too much of a chill on the self-financed candidate, but under this system you think it's below the line.
Mr. Clement: I would put it differently and say we're not arguing for a principle without limits, but what I would say is that we really benefit here from the fact that this Court found no standing for the challenge to the Millionaires' Provision in McConnell, and we have a record of actual experience.
Justice Scalia: Suppose we found... we were of the view that all of the provisions, that the benefits given to the other side here are bad.
I suppose we could even... re-even the playing field by either denying those benefits to the candidate opposing the Appellant, the Petitioner here, or we could do the opposite and eliminate similar restrictions upon... upon the Petitioner.
Do you have any idea which way we ought to go?
Mr. Clement: May I answer the question?
I mean, you're right that to the extent that this says this really sounds as an equal protection case more than a First Amendment case, at the remedial stage you'd ask the question: Should we level up and have both candidates have a larger cap or should we level down and hold them both to the $2300 level?
I would say two things, if I may.
One is it's no accident that Appellant isn't asking you to level up because what... they're not interested in doing additional financing; they're really taking... interested in taking advantage of keeping the opponent down to the $2300 level.
The only other thing that I would say about this choice between leveling up and leveling down is I would say that the statute that would have relaxed the caps for both candidates would pose the same First Amendment issue as this statute.
And so it really is, at bottom, an equal protection claim that you have before you.
Rebuttal of Andrew D. Herman
Chief Justice Roberts: Thank you, General Clement.
Mr. Herman, you may take five minutes.
Mr. Herman: Thank you, Mr. Chief Justice.
First of all, let me answer this... the discussion about the quote "parity principle".
In this case, Mr. Davis was outspent by $3 million, yet the parity principle would have allowed his opponent to raise another $1.4 million.
The district court has never answered... never answered that flaw in the statute.
I haven't seen any explanation of how that creates parity when the higher fund--
Justice Ginsburg: Where did the money come from?
Was it a war chest left over from prior campaigns?
Mr. Herman: --For his opponent?
Justice Ginsburg: Yes, because he didn't... his opponent did not take advantage of the relaxed contribution limits.
Mr. Herman: He went into the election, Justice Ginsburg, with about a $1.15 million war chest.
And then he--
Justice Ginsburg: Because he was just a good fundraiser?
Mr. Herman: --He was a chairman of the NRCC.
He was an excellent fundraiser.
Justice Alito: Can you address Justice Scalia's question about leveling up and leveling down?
Mr. Herman: I would agree with... with my friend that we have no interest in leveling up.
That's... that's... as an independent candidate, Mr. Davis is forgoing, for the vast, vast majority of his funding, contributions from private sources, and he has no interest in fostering higher contribution limits for anyone.
Let me also discuss the intent... excuse me... the disclosure very briefly.
There has been some discussion about how this is... it's very similar to independent-expenditure disclosure.
It's really not.
What the... what the statute requires is that a self-financed candidate declare, at the very start of his campaign, whether he intends to spend more than $350,000.
That, as the government's brief acknowledges, has no analogue in any other disclosure provision, and it serves... it serves no purpose.
It doesn't... it doesn't inform the electorate of anything other than that this gentleman is going to be self-financing.
It certainly doesn't address corruption.
It's simply... simply harassment of a self-financer requiring them to go on the record--
Justice Scalia: Well, it advises the other side that they should get ready to raise more money.
Mr. Herman: --That's exactly right.
Justice Scalia: Well... I mean if you say all of the rest of the statute is okay, that's certainly reasonable.
If you're going to let the guy go above the limits that would otherwise apply, it's useful to let him know in advance so he can start, you know, beating the bushes, right?
Mr. Herman: Certainly.
And then, finally, there is a reference to this... this is the ultimate soft money.
We would submit this is the ultimate hard money.
This is money that was raised by Mr. Davis.
He earned it.
He is entitled to spend it as he wishes, and he is certainly entitled to spend it furthering his candidacy.
Now, if there are no further questions--
Chief Justice Roberts: Thank you Mr. Herman.
The case is submitted.