... But Fourth Circuit Upholds NC's Judicial Campaign Reform Act

In a separate campaign finance case today, bearing the similar title of North Carolina Right to Life Committee Fund for Independent Political Expenditures v. Leake, the Fourth Circuit rejected a First Amendment challenge to the State's Judicial Campaign Reform Act, which became effective in 2002. The Act's purpose is to promote the impartiality and independence of the judiciary and to deter corruption. It creates a system of optional public funding for candidates to the State's appellate courts. The lawsuit was filed by two judicial candidates who didn't participate in the Act's public financing system and two PACs. Judge Michael authored this decision, joined by Judge Traxler and a district judge sitting by designation.

There were three components of the challenge. First, plaintiffs challenged the Act's "matching funds" provision, which gives public matching funds (dollar-for-dollar) to a participating candidate whose nonparticipating opponent spends above a capped amount. Plaintiffs argued that this chills their political speech (as nonparticipating candidates) because spending in excess of the trigger results in public funds being disbursed to a participating candidate whom they don't support; therefore (the argument goes) they choose to spend less money (and thus engage in less political speech) in order to prevent candidates they oppose from receiving the public matching funds. The Fourth Circuit disagreed, concluding that candidates are not coerced either to participate in the public financing system or to refrain from spending in excess of the trigger amounts. This issue may make it to the U.S. Supreme Court based on a circuit split (the 8th Circuit has struck down a matching-funds provision).

Second, plaintiffs challenged the Act's reporting and disclosure requirements imposed on nonparticipating candidates and independent entities. The Court held that these requirements advance important state interests.

Third, plaintiffs challenged the Act's ban on contributions during the 21 days before an election (which applies only against contributions that would cause the nonparticipating candidate to exceed the trigger for matching funds). The Court held that strict scrutiny didn't apply to this challenge; instead it was governed by the looser standard of being "closely drawn to match a sufficiently important interest." Applying the looser standard, the Court deemed the ban a key component of the public funding system, which itself is designed to promote important state interests. A ban on contributions in the period immediately before an election, the Court held, helps minimize a nonparticipating candidate's ability to unfairly take advantage of a participating candidate by delaying contributions until the last minute, when it would be too late for additional matching funds to be disbursed to the participating candidate.