Metropolitan News-Enterprise


Friday, December 21, 2001


Page 1


Ninth Circuit Revives Challenge to City’s Law Limiting PAC Donations


By KENNETH OFGANG, Staff Writer/Appellate Courts


The Ninth U.S. Circuit Court of Appeals yesterday reinstated a challenge by Republican activists to an Irvine city ordinance limiting the amount that may be contributed to a political action committee that spends money in city elections.

U.S. District Judge Alicemarie Stottler erred in upholding Sec. 1-2-404(B) of the city Campaign Finance Law under less than strict scrutiny, Senior Judge Alfred T. Goodwin wrote for the Ninth Circuit. The case was sent back to Stottler for reconsideration under a strict-scrutiny standard.

Irvine’s ordinance sets a limit on the amount that may be contributed to a city candidate in each election cycle. The limit is adjusted for inflation after each election, and was set at $320 for the November 2000 balloting.

The challenged section applies the same limitation to contributions to committees that make independent expenditures in city races. Thus, a political action committee must either refrain from accepting donations above that limit, or refrain from making independent expenditures supporting or opposing any candidate in Irvine.

Lincoln Club

The challenge was brought by the Lincoln Club of Orange County and its two political action committees. The Lincoln Club charges each of its members $2,000 per year in dues—which would be considered excessive contributions under the Irvine ordinance—and then distributes the money to its PACs.

The plaintiffs sued the city under 42 U.S.C. Sec. 1983, claiming the ordinance denied them their First Amendment right to participate in the 1998 and 2000 city elections. But Stottler agreed with the city, which argued that the ordinance served important governmental interests sufficient to override any restriction on speech—protecting the city from corruption and preventing the use of independent expenditure committees as a subterfuge to avoid the limit on contributions to candidates.

Goodwin, writing for the appeals court, noted that the Supreme Court and Ninth Circuit have traditionally applied strict scrutiny to expenditure limits and lesser scrutiny to contribution limits. But the Irvine law, he reasoned, functions to limit both  contributions and expenditures.

The law, he said, imposes substantial burdens on the Lincoln Club. The 300-member group, he reasoned, “will have to make dramatic changes to its organizational structure” by significantly increasing its membership or reducing its dues if it wants to participate in Irvine elections without cutting its funding base.

‘Substantial Burden’

“The Ordinance’s expenditure limitation is a double-edged sword, placing a substantial burden on protected speech (i.e. barring expenditures) while simultaneously threatening to burden associational freedoms (i.e. by requiring a restructuring of The Lincoln Club),” the judge wrote. “We conclude that such substantial burdens on protected speech and associational freedoms necessitate the application of strict scrutiny to the Ordinance.”

But Goodwin rejected the plaintiffs’ argument that the ordinance necessarily fails strict scrutiny.

Since candidates would likely have access to the identities of the Lincoln Club’s members, he reasoned, there will be “at the very least, the possibility of an appearance of improper political influence” if contributions were unrestricted, along with the appearance that donors can avoid the contribution limits by giving the money to the Lincoln Club instead of to the candidate.

 Goodwin also noted, however, that there was a dispute as to whether the ordinance was necessary. The Lincoln Club, he pointed out, had accused the city of enacting the ordinance solely to “level the playing field” between well-financed and less-well-financed candidates—an insufficient reason for burdening political speech, according to Supreme Court decisions.

“Because the parties disputed Irvine’s purpose in enacting the Ordinance, and because Irvine’s purpose in enacting the ordinance is a material fact, we conclude that the district court erred by granting summary judgment in favor of Irvine,” the judge wrote.

Senior Judge J. Clifford Wallace and Judge Sidney R. Thomas concurred in the opinion.

The city’s lawyer, Joel Kuperberg of Rutan & Tucker, said that while he disagreed with the court’s application of strict scrutiny, the difference between the two standards was largely semantic. “I don’t think it makes a big difference in the final analysis,” he commented.

Kuperberg said he was pleased the panel “acknowledged that there are legitimate goals that could be achieved by this sort of ordinance.”

But the Lincoln Club’s attorney, John C. Eastman—a professor of constitutional law at Chapman University School of Law in Orange—said his client should prevail on remand.

The parties, he told the MetNews, stipulated that there had never been an incident of quid pro quo corruption based on an independent expenditure in an Irvine city election campaign. Based on that stipulation, he suggested, it should be pro forma for the judge to find that the ordinance doesn’t survive strict scrutiny.

“My client…ought to be able to participate in the political process” in time for the November 2002 campaign, he said.

The case is Lincoln Club of Orange County v. City of Irvine, 00-56444.


Copyright 2001, Metropolitan News Company