Wednesday, September 28, 2011, 10:41 AM

North Carolina's Judicial Election Financing Challenged as Unconstitutional

Earlier this month, North Carolina Right to Life Political Action Committee and North Carolina Right to Life Committee Fund for Independent Political Expenditures ("NC Right to Life Plaintiffs") filed suit in the United States District Court for the Eastern District of North Carolina seeking to have North Carolina's public financing system for judicial elections declared unconstitutional.  Given the Supreme Court's holding last term in Arizona Free Enterprise Club's Freedom Club PAC v. Bennett, which declared a similar public financing to be unconstitutional, North Carolina's public financing system may be in jeopardy. 

Candidates running for the North Carolina Court of Appeals or North Carolina Supreme Court have the option to participate in the North Carolina Public Campaign Fund.  The Fund's stated purpose is "to ensure the fairness of democratic elections in North Carolina and to protect the constitutional rights of voters and candidates from the detrimental effects of increasingly large amounts of money being raised and spent to influence the outcome of elections, those effects being especially problematic in elections of the judiciary, since impartiality is uniquely important to the integrity and credibility of the courts."  N.C. Gen. Stat. S 163-278.61.

Under this system, candidates for the Court of Appeals are given approximately $164,000 and candidates for the Supreme Court are given approximately $240,000 to conduct their campaigns.  Candidates who participate in the Fund accept restrictions on their ability to raise money from sources other than the Fund.  N.C. Gen. Stat. S 163-278.64(d).

The NC Right to Life plaintiffs are not challenging these provisions, but instead are challenging the portion of the law that allows the Fund to provide participating candidates with additional funds in response to expenditures by either a non-participating candidate or an independent expenditure group like the plaintiffs.

The law establishing the Fund contains a "matching funds trigger" that provides a dollar for dollar match for a participating candidate in response to funds spent in opposition to a participating candidate or in support of an opponent to a participating candidate.  N.C. Gen. Stat. S 163-287.67.  The matching funds trigger kicks in when the funds spent in opposition to a participating candidate or in support of an opponent to a participating candidate exceeds the amount that the participating candidate initially received from the Fund (i.e. $164,000 or $240,000).

The amount of funds spent in opposition to a participating candidate or in support of an opponent to a participating candidate is calculated by adding:

  1. The greater of:
    1. Campaign expenditures or obligations made, or funds raised or borrowed, whichever is greater, reported by a non-participating candidate who is running against a participating candidate; or
    2. The amount that a participating candidate running against another participating candidate initially received from the Fund (i.e. $164,000 or $240,000).
  2. The aggregate total of all expenditures and payments reported by third-parties making independent expenditures or electioneering communications in opposition to the participating candidate or in support of the opponent of the participating candidate. 
In essence, if a non-participating candidate spends more than the amount that that the participating candidate was allotted by the Fund, the participating candidate will receive a dollar for dollar match from the Fund.  Additionally, a publicly financed candidate will receive a dollar for dollar match for every dollar spent by third parties once the matching funds trigger is reached.

The NC Right to Life plaintiffs claim that they have refrained from making independent expenditures in support of judicial candidates and will not do so in the future out of fear that their contribution will trigger the matching funds provision and result in funds being given to a candidate whose views they disagree with.  As a result, they claim, their First Amendment right to freedom has been violated.

Based upon the Supreme Court's holding in Arizona Free Enterprise Club's Freedom Club PAC v. Bennett this past June, the NC Right to Life plaintiffs may very well be right. 

In Arizona Free Enterprise Club, the Supreme Court reviewed the constitutionality of a public financing system that was, in all material ways, identical to the Fund.  In short, the Supreme Court held the system unconstitutional because the matching funds program required third parties who desired to make independent expenditures to choose between either (a) not engaging in speech at all; (b) modifying their message such that they did not advocate for or against a particular candidate; or (c) engaging in speech and thereby providing a candidate with an opposing viewpoint with additional funding.  According to the Supreme Court, this choice "contravenes 'the fundamental rule of protection under the First Amendment, that a speaker has the autonomy to choose the content of his own message.'" 

It is difficult to draw a meaningful distinction between the law that was struck down in Arizona Free Enterprise Club and North Carolina's public financing law.  Both laws seem to require third parties and privately funded candidates to decide between either refraining from speaking or speaking and risking that their speech will trigger an award of funds to a candidate with an opposing viewpoint.  Since  North Carolina's law contains the same type of provisions that were found to be unconstitutional, it is likely that North Carolina's public financing system for judicial selection, or at least the matching funds provision, will be struck down.

The case is only in its nascent stages, so it is difficult to say what impact this case will have on the 2012 election for North Carolina's Court of Appeals and Supreme Court.  Even if the case is resolved in an expeditious manner, it is unlikely to be decided until right before the 2012 general election.  With the partisan balance of the North Carolina Supreme Court hinging on the outcome of the election, removing the restrictions on third party independent expenditures in the weeks leading up to the election could make for an interesting conclusion to the 2012 election season.


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