When No News is Good News

Tara Malloy
Dec 1, 2015
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These days, advocates for reasonable campaign finance rules cheer when the Supreme Court chooses to do nothing at all.  Yesterday, we welcomed the news that the high Court declined to grant certiorari in Yamada v. Shoda (Snipes), which leaves standing a strong Ninth Circuit Court of Appeals decision that upheld Hawaii’s ban on contributions from governmental contractors, as well as a bevy of state reporting and disclaimer requirements.  

Most significantly, the Supreme Court did not touch the Ninth Circuit’s approval of Hawaii’s broad contractor contribution ban.  In finding that the ban advanced the state’s interest in preventing both actual and perceived quid pro quo corruption, the Court of Appeals cited Hawaii’s “past ‘pay to play’ scandals and the widespread appearance of corruption that existed at the time of the legislature’s actions [to enact the ban].”  Hawaii’s law closely tracks the federal contractor contribution restriction that has been challenged in Miller (Wagner) v. FEC, which is currently up on petition before the Supreme Court.  The Yamada case, therefore, may be viewed as something of a bellwether for the Supreme Court’s appetite to review targeted contribution restrictions that focus on classes of contributors who raise a unique, demonstrated threat of corruption.

Also worthy of note is that in upholding the contractor law, the Ninth Circuit continued to apply the more lenient “closely drawn” level of scrutiny traditionally applicable to contribution limits—even though the challenged law took the form of a “ban” and not a monetary limit.  The Supreme Court has been urged repeatedly in recent cases to intensify the judicial scrutiny paid to contribution restrictions, most notably and vociferously in McCutcheon v. FEC.  As the Ninth Circuit correctly noted, however, the high Court in McCutcheon declined to upend its longstanding approach to reviewing such laws.  

The denial of certiorari also preserves the Ninth Circuit’s decision to sustain several provisions that implement Hawaii’s disclosure regime for independent campaign-related spending.  Although the discussion was somewhat technical in nature, two aspects of the appellate panel’s decision will aid states seeking to enact or enforce effective disclosure regimes. 

First, consistent with the Ninth Circuit’s past decisions, the Court of Appeals rejected the challengers’ attempt to restrict disclosure to express advocacy—a move that often renders disclosure laws hopelessly ineffectual.  It found instead that Hawaii could more broadly require disclosure in connection to communications that were (1) “susceptible to no other reasonable interpretation but as an exhortation to vote for or against a candidate,” or (2) that “advocate[] or support[] the nomination, opposition, or election of the candidate.”  (Emphases added.) 

Second, the Ninth Circuit continued to allow the application of “political committee” status to mixed-purpose groups that did not have campaign activity as their sole or “major” purpose.  The Court of Appeals noted that restricting political committee status—and attendant reporting obligations—to “major purpose” groups, as the challengers urged, would defeat the purpose of the disclosure law: “Hawaii has an interest in ensuring the public can follow the money in an election cycle, regardless of whether it comes from a single-issue, political advocacy organization or a for-profit corporation such as A-1 [the plaintiff].”  As it further emphasized, “the strength of Hawaii’s informational interest does not fluctuate based on the diversity of the speaker’s activities.”

In short, the Supreme Court yesterday departed from its activist tear and exercised restraint.  Hawaii’s elections will be the better for it.

For more info on the case, click here.

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