Filed: Jul. 31, 2018
Latest Update: Mar. 03, 2020
Summary: 17-1343 Corren v. Donovan 17-1343 Corren v. Donovan UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT _ August Term, 2017 (Argued: January 17, 2018 Decided: July 31, 2018) Docket No. 17-1343 _ DEAN CORREN, MARJORIE POWER, VERMONT PROGRESSIVE PARTY, RICHARD KEMP, STEVEN HINGTGEN, Plaintiffs-Appellants, DAVID ZUCKERMAN, Senator, Intervenor-Plaintiff-Appellant, – v. – JAMES C. CONDOS, Vermont Secretary of State, in his official capacity, THOMAS J. DONOVAN, JR., Vermont Attorney General, in his
Summary: 17-1343 Corren v. Donovan 17-1343 Corren v. Donovan UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT _ August Term, 2017 (Argued: January 17, 2018 Decided: July 31, 2018) Docket No. 17-1343 _ DEAN CORREN, MARJORIE POWER, VERMONT PROGRESSIVE PARTY, RICHARD KEMP, STEVEN HINGTGEN, Plaintiffs-Appellants, DAVID ZUCKERMAN, Senator, Intervenor-Plaintiff-Appellant, – v. – JAMES C. CONDOS, Vermont Secretary of State, in his official capacity, THOMAS J. DONOVAN, JR., Vermont Attorney General, in his o..
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17-1343
Corren v. Donovan
17‐1343
Corren v. Donovan
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_______________
August Term, 2017
(Argued: January 17, 2018 Decided: July 31, 2018)
Docket No. 17‐1343
_______________
DEAN CORREN, MARJORIE POWER, VERMONT PROGRESSIVE PARTY, RICHARD KEMP,
STEVEN HINGTGEN,
Plaintiffs‐Appellants,
DAVID ZUCKERMAN, Senator,
Intervenor‐Plaintiff‐Appellant,
– v. –
JAMES C. CONDOS, Vermont Secretary of State, in his official capacity, THOMAS J.
DONOVAN, JR., Vermont Attorney General, in his official capacity,
Defendants‐Appellees.
_______________
B e f o r e:
KATZMANN, Chief Judge, KEARSE and POOLER, Circuit Judges.
______________
Appellants, former and prospective candidates for public office in
Vermont and a political party, brought this action asserting that Vermont’s
public election financing system, which allows candidates to receive grants of
public funds if they abide by certain limitations, violates the First Amendment
rights of candidates, their supporters, and political parties. The provisions that
appellants challenge prohibit publicly financed candidates from accepting
contributions or making expenditures beyond the amount of the grants and
announcing their candidacies or raising or expending substantial funds before a
certain date. The district court (Sessions, J.) dismissed all of appellants’ claims for
failure to state a claim and denied their motion for attorney’s fees. We hold that,
because candidates may freely choose either to accept public campaign funds
and the limitations thereon or to engage in unlimited private fundraising, those
limitations do not violate First Amendment rights. In addition, appellants are not
entitled to a fee award because they cannot be considered prevailing parties.
Accordingly, the judgment of the district court is AFFIRMED.
_______________
JOHN L. FRANCO, JR., Law Office of John L. Franco, Jr., Burlington,
VT, for Plaintiffs‐Appellants and Intervenor‐Plaintiff‐Appellant.
EVE JACOBS‐CARNAHAN, Assistant Attorney General (Megan J.
Shafritz, Assistant Attorney General, on the brief), Montpelier,
VT, for Defendants‐Appellees.
_______________
KATZMANN, Chief Judge:
This appeal requires us to decide whether Vermont’s campaign finance
law, Vt. Stat. Ann. tit. 17, §§ 2901 et seq., which imposes additional restrictions on
candidates who choose to receive public campaign finance grants, violates the
First Amendment of the United States Constitution.
2
Appellants are several former and prospective candidates for Vermont
Lieutenant Governor, as well as the Vermont Progressive Party. They brought
this action under 42 U.S.C. § 1983, asserting that provisions of Vermont’s “Public
Financing Option,” Vt. Stat. Ann. tit. 17, §§ 2981–2986 (the “Option”), violate the
First Amendment and seeking declaratory and injunctive relief. In particular,
appellants challenged provisions that prohibit publicly financed candidates
(“PFCs”) from (1) accepting more than a specified amount of campaign
contributions, which are defined to include (with some exceptions) expenditures
made by political parties in coordination with those candidates; (2) expending
funds beyond the total amount of the public grants; and (3) announcing their
candidacies or raising or expending more than a specified amount of funds
before February 15 of an election year.
The district court (Sessions, J.) dismissed all of appellants’ claims for
failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and denied
appellants’ motion for reconsideration and for attorney’s fees under 42 U.S.C.
§ 1988(b). Appellants mainly argue on appeal that the district court erred in
upholding the challenged restrictions because those restrictions unfairly and
unjustifiably burden the speech and associational rights of PFCs, their
3
supporters, and political parties. However, because a candidate may freely
choose whether to accept public funds and the conditions thereon in lieu of
unlimited private fundraising, and presumably will make that choice only if she
believes that doing so will expand her powers of speech and association, she
cannot complain that those conditions burden her rights. Nor can the candidate’s
supporters and any political party with which she is affiliated complain that the
limitations resulting from the candidate’s voluntary choice burden their own
rights. Thus, appellants’ constitutional claims were properly dismissed. In
addition, the district court correctly concluded that appellants were not
prevailing parties eligible to receive attorney’s fees. We therefore AFFIRM the
judgment of the district court.
BACKGROUND
I. Vermont’s Campaign Finance Law
In 1997, in an effort to lessen the influence of money in politics, the State of
Vermont enacted a stringent campaign finance law. See An Act Relating to Public
Financing of Election Campaigns, Disclosure Requirements and Limits on
Campaign Contributions and Expenditures, 1997 Vt. Acts & Resolves 490
(codified at Vt. Stat. Ann. tit. 17, §§ 2801 et seq.) (repealed 2014) (“Act 64”). Act 64
4
imposed caps on the total expenditures that each candidate could make during
an election cycle, as well as tight limits on the amount of contributions that a
candidate could accept from a single individual or organization. See id. at 497–99.
It also established a system of public election financing. See id. at 491–95. Yet Act
64’s regime was short‐lived: in 2006, the Supreme Court invalidated much of the
law, holding that its limits on expenditures and contributions were
unconstitutionally restrictive. Randall v. Sorrell, 548 U.S. 230, 236 (2006) (plurality
opinion). Randall did not, however, pass upon the validity of the public financing
system. Id. at 239.
In 2014, Vermont repealed Act 64 and enacted a revised campaign finance
law, see An Act Relating to Campaign Finance Law, 2014 Vt. Acts & Resolves 1
(codified at Vt. Stat. Ann. tit. 17, §§ 2901 et seq.) (“Act 90” or “the Act”), which
loosened some of the restrictions that the Supreme Court held unconstitutional in
Randall. The Act wholly dispenses with across‐the‐board limits on the total
expenditures that candidates can make during an election cycle, whereas it still
imposes limits, albeit less stringent ones, on the amounts of contributions that a
candidate may accept from particular sources. See Vt. Stat. Ann. tit. 17, § 2941.
For example, a candidate for lieutenant governor “shall not accept contributions
5
totaling more than” $4000 from an individual or an organization that is not a
political party. Id. § 2941(a)(3)(A); see id. § 2901(16).
Act 90 defines a “contribution” as any payment, loan, or gift that is made
“for the purpose of influencing an election, advocating a position on a public
question, or supporting or opposing one or more candidates in any election.” Id.
§ 2901(4). Also treated as contributions are “related campaign expenditure[s],”
which are expenditures made by third parties in coordination with a candidate
or her committee that promote the election of the candidate or the defeat of the
candidate’s rivals. Id. § 2944(a)–(b). However, the Act exempts from the
definition of contribution a series of items and activities. Id. § 2901(4)(A)–(M).
These exemptions include, inter alia, “the use of a political party’s offices,
telephones, computers, and similar equipment,” id. § 2901(4)(F), lists of
registered voters maintained by a party, id. § 2901(4)(H), party‐sponsored
campaign events for three or more candidates, id. § 2901(4)(L), and general get‐
out‐the‐vote efforts, id. § 2901(4)(M). The legislative findings contained in the Act
explain that “[e]xempting certain activities of political parties from the definition
of what constitutes a contribution is important so as to not overly burden
collective political activity” and to “protect the right to associate in a political
6
party,” as those exempted activities “are part of a party’s traditional role in
assisting candidates to run for office.” 2014 Vt. Acts & Resolves 2.
In addition, contributions from political parties to candidates are exempted
from Act 90’s contribution limitations; simply put, candidates “may accept
unlimited contributions from a political party.” Vt. Stat. Ann. tit. 17,
§ 2941(a)(1)(B), (a)(2)(B), (a)(3)(B). Act 90’s findings explain that political parties’
“important” and “historic” role in campaigns distinguishes them from political
committees and makes it “appropriate to limit contributions from political
committees without imposing the same limits on political parties.” 2014 Vt. Acts
& Resolves 2.
Act 90’s “Public Financing Option” (the “Option”), which was carried over
in substantially similar form from Act 64, offers public funding to qualifying
candidates running for governor or lieutenant governor, and it imposes an
additional set of restrictions on candidates who accept that offer. See Vt. Stat.
Ann. tit. 17, §§ 2981–2986. To qualify for public financing, a candidate must
obtain a certain value and number of “qualifying contributions” during the
“Vermont campaign finance qualification period,” id. § 2984(a), which spans
from February 15 of an election year until the fourth Thursday after the first
7
Monday in May of that year, id. §§ 2356, 2981(4). For example, a candidate for
lieutenant governor must raise “a total amount of no less than $17,500.00
collected from no fewer than 750 qualified individual contributors making a
contribution of no more than $50.00 each.” Id. § 2984(a)(2). Once a candidate
qualifies for public financing, she receives grants for the primary and general
election periods. Id. § 2985(a)(1). A candidate for lieutenant governor receives
“$50,000.00 in a primary election period,” less the amount of qualifying
contributions the candidate collected, and “$150,000.00 in a general election
period.” Id. § 2985(b)(2).
Along with those grants come additional restrictions, which are set out in
Section 2983, entitled “Vermont campaign finance grants; conditions.” Section
2983(a) limits when a PFC may announce her candidacy or begin significant
fundraising:
A person shall not be eligible for Vermont campaign finance grants if,
prior to February 15 of the general election year during any two‐year
general election cycle, he or she becomes a candidate by announcing
that he or she seeks an elected position as Governor or Lieutenant
Governor or by accepting contributions totaling $2,000.00 or more or
by making expenditures totaling $2,000.00 or more.
8
Section 2983(b)(1) limits PFCs’ ability to accept private contributions and make
expenditures:
A candidate who accepts Vermont campaign finance grants shall[]
not solicit, accept, or expend any contributions except qualifying
contributions, Vermont campaign finance grants, and contributions
authorized under section 2985 of this chapter, which contributions
may be solicited, accepted, or expended only in accordance with the
provisions of this subchapter . . . .
In effect, the Option caps a PFC’s campaign funding at the amount of the public
grants. Finally, Section 2903(b) provides that any PFC who exceeds Section
2983(b)(1)’s limits is obligated to repay public funds and is also subject to the
penalties imposed for any violation of the Act.
II. Factual and Procedural History
The facts giving rise to the instant case, as alleged in appellants’ pleadings,
are as follows. In 2014, appellant Dean Corren unsuccessfully ran for Lieutenant
Governor of Vermont as the nominee of both the Vermont Progressive Party
(“VPP”) and the Vermont Democratic Party (“VDP”). During his campaign,
9
Corren qualified for and opted to receive public campaign funds for the primary
and general election periods.
On October 24, 2014, the VDP disseminated an email blast that expressed
support for Corren’s candidacy and identified ways for recipients to support
Corren and other candidates on the VDP ticket. Roughly a week later, William
Sorrell, then the Attorney General of Vermont, served on Corren’s campaign a
“notice of alleged violation,” which stated that the email blast constituted an in‐
kind contribution that Corren, as a PFC, could not accept under the terms of the
Option. Corren disputed that the email constituted a contribution under Section
2901(4) but offered to settle the matter by paying for the estimated value of the
email blast out of his campaign funds. Sorrell rejected this offer, countered with a
demand of $72,000 in forfeited public campaign funds and fines, and threatened
to pursue an enforcement action if Corren did not meet that demand.
Unable to reach an agreement, Corren brought an action under 42 U.S.C.
§ 1983 against Sorrell in his official capacity on March 20, 2015, seeking a
declaratory judgment that the email blast was not an in‐kind contribution and
that certain provisions of Vermont’s campaign finance law were
unconstitutional. Vermont then filed an enforcement action against Corren in
10
state court on March 25, 2015, alleging that Corren unlawfully received and
failed to report an in‐kind contribution in the form of the email blast.
In May 2015, Corren amended his complaint to join appellants Steven
Hingtgen, Richard Kemp, and Marjorie Power, as well as the VPP, as plaintiffs in
the action. Hingtgen, Kemp, and Power are former VPP candidates for lieutenant
governor and regular donors to VPP candidates. Those plaintiffs then filed a
Second Amended Complaint (“SAC”). Count I of the SAC alleged that Section
2983(b)(1)’s restrictions on the contributions that PFCs may accept and the funds
they may expend impose an unconstitutional burden on rights of speech and
association. Count II alleged that Section 2944(c), which subjects certain party
expenditures to restrictions on contributions, imposes a similar burden and is
impermissibly ambiguous. Count III sought a declaration that the email blast, as
well as any political party activities that are enumerated in Section 2901(4), do
not constitute in‐kind contributions. And Count IV alleged that Section 2903(b)’s
refund requirement is unconstitutional as well.
In late 2015, appellant David Zuckerman, a Vermont State Senator who
intended to run for lieutenant governor in 2016 as a PFC but worried that
restrictions on PFCs would put him at a disadvantage relative to privately
11
financed candidates, intervened in the action. Count I of Zuckerman’s intervenor
complaint sought a declaration that Section 2983(a)’s requirement that PFCs
refrain from announcing their candidacies or raising or expending a certain
amount of money before a prescribed date is unconstitutional. Count II, like
Count I of the SAC, challenged Section 2983(b)(1)’s contribution and expenditure
limitations.
Vermont moved to dismiss the SAC, arguing that the district court must
abstain, pursuant to Younger v. Harris, 401 U.S. 37 (1971), from deciding Corren’s
claims to the extent they called into question the ongoing state enforcement
proceedings against him, and that all of the plaintiffs lacked standing. The
district court granted in part and denied in part the motion, concluding that it
was required to “abstain from hearing Corren’s challenges to Vermont’s
campaign finance law insofar as those challenges relate to the enforcement action
currently pending against him in state court,” including whether the email blast
could be regulated as an in‐kind contribution, but that it could consider his other
challenges. App. 81. The district court also dismissed Count IV of the SAC
because Section 2903(b)’s refund provision, which that Count challenged, had
since been amended.
12
Vermont then moved to dismiss the SAC and Zuckerman’s complaint for
failure to state a claim. In a March 9, 2016 Opinion and Order, the district court
granted the motion and dismissed all of appellants’ claims under Federal Rule of
Civil Procedure 12(b)(6). In the course of rejecting appellants’ constitutional
challenges, the district court construed Section 2901(4)’s exemptions from the
definition of contribution to apply to related campaign expenditures, and it held
that this statutory construction headed off possible constitutional problems by
permitting political parties to make such exempted expenditures in support of
PFCs. The district court dismissed the case but did so “without prejudice to re‐
filing in the event that the state courts offer an interpretation of the statute that is
inconsistent with this Opinion and Order.” App. 114.
Following entry of judgment, appellants moved for reconsideration,
primarily based on a litigation position that Vermont took in the state
enforcement action. The district court denied reconsideration, noting that it had
abstained from deciding matters at issue in the state proceeding. At the same
time, the court denied appellants’ motion for fees under 42 U.S.C. § 1988, on the
ground that appellants did not qualify as prevailing parties. This appeal
followed.
13
DISCUSSION
I. Standard of Review
“We review the grant of a motion to dismiss under Rule 12(b)(6) de novo,
‘construing the complaint liberally, accepting all factual allegations in the
complaint as true, and drawing all reasonable inferences in the plaintiff’s favor.’”
Elias v. Rolling Stone, LLC, 872 F.3d 97, 104 (2d Cir. 2017) (quoting Chase Grp.
Alliance LLC v. City of New York Depʹt of Fin., 620 F.3d 146, 150 (2d Cir. 2010)).
Whether appellants are prevailing parties eligible to recover attorney’s fees
under 42 U.S.C. § 1988(b) “is a question of law that we review de novo.” Perez v.
Westchester Cnty. Dep’t of Corr., 587 F.3d 143, 149 (2d Cir. 2009).
II. First Amendment Challenges
In this appeal, appellants primarily contend that the district court erred in
dismissing their First Amendment challenges to the Act’s restrictions on PFCs.1
Specifically, they argue that Section 2983(b)(1)’s restriction on contributions to
1 The First Amendment provides: “Congress shall make no law respecting an
establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of
speech, or of the press; or the right of the people peaceably to assemble, and to petition the
Government for a redress of grievances.” U.S. Const. amend. I. “Although the text of the First
Amendment states that ‘Congress shall make no law . . . abridging the freedom of speech, or of
the press,’ the Amendment applies to the States under the Due Process Clause of the Fourteenth
Amendment.” 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 489 n.1 (1996) (ellipsis in original).
14
PFCs (the “Contribution Limit”) violates the rights of PFCs, their supporters, and
political parties; that Section 2983(b)(1)’s cap on expenditures by PFCs (the
“Expenditure Limit”) infringes PFCs’ right to self‐finance their campaigns; and
that Section 2983(a)’s restrictions on the timing of PFCs’ announcements of their
candidacies and their acceptance or expenditure of certain amounts of funds (the
“Timing Restrictions”) violate PFCs’ rights as well.2 We consider these challenges
in turn.
A. The Contribution Limit
1. Backdrop of Public Financing Decisions
To provide the context in which appellants make their challenge to the
Contribution Limit, we first review other relevant decisions that have considered
the constitutionality of public financing systems. In the foundational campaign
2 We do not understand appellants to attack the constitutionality of Section 2944’s
treatment of related campaign expenditures as contributions in this appeal. As noted above,
Count II of the SAC claimed that Section 2944’s definition of a related expenditure is ambiguous
and that its presumption that expenditures made on behalf of six or fewer candidates are
related is unjustified. The district court dismissed that count, recognizing that this Court
previously rejected similar challenges to Act 64’s definition of related expenditures, see Landell v.
Sorrell 382 F.3d 91, 145 (2d Cir. 2004), vacated on other grounds by Randall, 548 U.S. at 236–37,
which was relevantly similar to the current definition in Section 2944, see 1997 Vt. Acts &
Resolves 498–99. Appellants do not challenge that holding on appeal; rather, they argue that
Section 2983(b)(1)’s restrictions on making such expenditures in coordination with PFCs
amount to an unconstitutional burden on speech and associational rights.
15
finance decision Buckley v. Valeo, 424 U.S. 1 (1976), the Supreme Court addressed
several challenges to the Federal Election Campaign Act of 1971, Pub. L. No. 92‐
225, 86 Stat. 3 (codified as amended at 2 U.S.C. § 6566, 52 U.S.C. §§ 30101–30126,
30141–30146) (“FECA”). FECA set limits on the contributions a candidate could
accept from a single source, the total expenditures a candidate could make, and
the independent expenditures expressly advocating the election or defeat of a
candidate that third parties could make during an election cycle. See Buckley, 424
U.S. at 23–24, 39–40, 44, 54. In addition, FECA, in conjunction with the
Presidential Election Campaign Fund Act, Pub. L. No. 92‐178, 85 Stat. 497 (1971)
(codified as amended at 26 U.S.C. § 9001 et seq.) (the “Fund Act”), established a
public election financing system for presidential candidates. Under that system, a
candidate who met certain eligibility criteria was entitled to $20,000,000 in
funding for the general election campaign, provided that she “pledge[d] not to
incur expenses in excess of the entitlement . . . and not to accept private
contributions except to the extent that the fund [wa]s insufficient to provide the
full entitlement.” Buckley, 424 U.S. at 88.
The Buckley Court recognized that “[s]pending for political ends and
contributing to political candidates both fall within the First Amendment’s
16
protection of speech and political association.” FEC v. Colo. Republican Fed.
Campaign Comm., 533 U.S. 431, 440 (2001) (“Colorado II”) (citing Buckley, 424 U.S.
at 14–23). But, the Court noted, “although [FECA’s] contribution and
expenditure limitations both implicate fundamental First Amendment interests,
its expenditure ceilings impose significantly more severe restrictions on
protected freedoms of political expression and association than do its limitations
on financial contributions.” Buckley, 424 U.S. at 23. As a result, Buckley upheld
FECA’s contribution limits, while it struck down restrictions on candidates’ total
campaign expenditures and independent expenditures by individuals and
groups. Id. at 58. Buckley also upheld FECA’s system of public financing, rejecting
claims that the system abridged speech in violation of the First Amendment or
discriminated in violation of the Fifth Amendment. Id. at 90–108. In so holding,
the Court observed that the public financing system, by “us[ing] public money to
facilitate and enlarge public discussion and participation in the electoral
process,” “further[ed], not abridge[d], pertinent First Amendment values.” Id. at
92–93.
Although Buckley had no occasion to analyze whether the limits imposed
on candidates who accepted public financing violated those candidates’ rights, it
17
nonetheless suggested that, in exchange for such financing, candidates could
voluntarily accept restrictions that would otherwise be impermissible. Whereas
the Buckley Court struck down general limits on candidates’ expenditures, it
noted that Congress “may condition acceptance of public funds on an agreement
by the candidate to abide by specified expenditure limitations.” Id. at 57 n.65; see
also id. at 95 (“[A]cceptance of public financing entails voluntary acceptance of an
expenditure ceiling.”). By way of explanation, the Court observed that a
candidate’s decision to forgo private financing and accept public financing is a
“voluntar[y]” one analogous to the decision to accept only small‐dollar
contributions. Id. at 57 n.65.
Not long after Buckley, a three‐judge district court addressed the
restrictions imposed on candidates by FECA’s public financing system, and this
Court, sitting en banc, subsequently adopted its reasoning. See Republican Nat’l
Comm. v. FEC, 487 F. Supp. 280 (S.D.N.Y.) (three‐judge court) (“RNC II”), aff’d
mem., 445 U.S. 955 (1980); see also Republican Nat’l Comm. v. FEC, 616 F.2d 1, 2 (2d
Cir.) (en banc) (holding that challenged provisions of FECA were constitutional
18
for the reasons set forth in RNC II), aff’d mem., 445 U.S. 955 (1980).3 In that case,
the Republican National Committee (“RNC”) challenged the system’s
$20,000,000 cap on the expenditures of PFCs seeking the presidency (which, as
noted above, Buckley distinguished from the general expenditure caps that it
found invalid), and the resulting ban on PFCs’ acceptance of private
contributions beyond that amount. The RNC contended that those limits violated
the First Amendment because they “restrict[ed] the ability of candidates and
their parties, supporters and contributors to communicate their ideas.”
Republican Nat’l Comm. v. FEC, 461 F. Supp. 570, 573 (S.D.N.Y. 1978) (“RNC I”). In
effect, “[w]hat plaintiffs [sought was] the right to solicit, receive and spend both
3 The procedural posture of RNC II was unusual. The case involved challenges to FECA
and the Fund Act, each of which provided special procedures for judicial review. A three‐judge
district court was convened “to decide the constitutional issues raised with respect to the Fund
Act,” as required by that statute. Republican Nat’l Comm., 616 F.2d at 1. The single‐judge district
court before which the case was brought also certified questions regarding the constitutionality
of FECA to this Court sitting en banc, as required by FECA. Id. The three‐judge court, which
comprised two circuit judges and the original district judge, then issued an opinion upholding
the constitutionality of the Fund Act, see RNC II, 487 F. Supp. at 282, and the next day this
Court, sitting en banc, answered the questions certified to it by concluding that the challenged
provisions of FECA were constitutional “substantially for the reasons set forth in the opinion of
the three‐judge court,” Republican Nat’l Comm., 616 F.2d at 2. Both decisions were summarily
affirmed by the Supreme Court. Republican Nat’l Comm. v. FEC, 445 U.S. 955 (1980) (mem.).
19
public and private campaign funds, without any limitations.” RNC II, 487 F.
Supp. at 283.
The three‐judge court first addressed the plaintiffs’ suggestion that certain
candidates were “somehow or other forced as a practical matter to accept public
funding” with its attendant restrictions. Id. at 283. The court concluded that they
were not, since a candidate could raise a similar or greater amount of funds
through private fundraising. Id. at 283–84. The court then turned to “the issue
of whether Congress may lawfully condition a presidential candidate’s eligibility
for public federal campaign funds upon the candidate’s voluntary acceptance of
limitations on campaign expenditures and private contributions.” Id. at 284. This
question, in turn, required deciding, inter alia, whether such a condition would
abridge the rights of the candidate. Id.
The court observed that, “[w]hile Congress may not condition benefit on
the sacrifice of protected rights, the fact that a statute requires an individual to
choose between two methods of exercising the same constitutional right does not
render the law invalid, provided the statute does not diminish a protected right.”
Id. at 284–85 (citations omitted). The public financing system at issue passed
muster under that framework, as it provided a candidate with an additional
20
method of speaking that the candidate would elect only if it enhanced her ability
to speak:
The Fund Act merely provides a presidential candidate with an
additional funding alternative which he or she would not otherwise
have and does not deprive the candidate of other methods of
funding which may be thought to provide greater or more effective
exercise of rights of communication or association than would public
funding. Since the candidate remains free to choose between funding
alternatives, he or she will opt for public funding only if, in the
candidate’s view, it will enhance the candidate’s powers of
communication and association.
Id. at 285. For that reason, RNC II held that “as long as the candidate remains free
to engage in unlimited private funding and spending instead of limited public
funding, the law does not violate the First Amendment rights of the candidate or
supporters.” Id. at 284.
Subsequent decisions by our sister circuits have employed a similar logic
of voluntariness in evaluating challenges to public financing systems. As the
Court of Appeals for the Fourth Circuit observed, “[s]ince Buckley the circuit
courts have generally held that public financing schemes are permissible if they
do not effectively coerce candidates to participate in the scheme.” N.C. Right to
Life Comm. Fund for Indep. Political Expenditures v. Leake, 524 F.3d 427, 436 (4th Cir.
21
2008). That is because such schemes do not burden candidates’ rights if they
merely create another viable funding option rather than compel candidates to
choose public funding. See Daggett v. Comm’n on Gov’t Ethics & Election Practices,
205 F.3d 445, 467 (1st Cir. 2000) (“A law providing public funding for political
campaigns is valid if it achieves ‘a rough proportionality between the advantages
available to complying candidates . . . and the restrictions that such candidates
must accept to receive these advantages.’” (ellipsis in original) (quoting Vote
Choice, Inc. v. DiStefano, 4 F.3d 26, 39 (1st Cir. 1993))); Gable v. Patton, 142 F.3d 940,
948 (6th Cir. 1998) (“[T]he central question we are faced with is whether the
substantial advantage [afforded to PFCs] rises to the level of unconstitutional
coercion.”); Rosenstiel v. Rodriguez, 101 F.3d 1544, 1552 (8th Cir. 1996) (“Under
this choice‐increasing framework, candidates will presumably select the option
that they feel is most advantageous to their candidacy. Given this backdrop, it
appears to us that the State’s scheme promotes, rather than detracts from,
cherished First Amendment values.”).
2. Candidates
With this backdrop in mind, we conclude that the Contribution Limit does
not violate PFCs’ First Amendment rights. Appellants argue that the limit
22
burdens PFCs’ ability to speak and associate, particularly with political parties,
and that there is no important interest justifying it. But appellants do not assert
that the Option’s terms compel candidates to accept public financing and its
attendant restrictions. Rather, the thrust of their claim is that accepting that deal
puts them at a disadvantage relative to privately financed candidates. If that is
so, then a candidate will rationally choose to decline public financing under the
Option, and the Option’s limits on PFCs’ acceptance of contributions will not
apply to her. If, on the other hand, she believes that the fixed amount of funds
awarded in a public grant will afford her greater funding than she can raise in
private contributions, then accepting the grant will increase the funds she can
use to speak, despite the Contribution Limit.4 Thus, in neither case does the
Contribution Limit diminish her ability to speak and associate. Rather, it merely
4 Candidates who cannot raise in private contributions anything close to the amount of a
public grant may well feel that accepting public funds gives them the best chance to run a
competitive race, but they cannot complain that the prohibition on raising private funds beyond
the amount of the public grant disadvantages them, since, without the grant—which, as
appellants recognize, a state is under no obligation to offer—those candidates would be left
only with the private funds they could raise. Cf. Buckley, 424 U.S. at 94–95 (“[T]he inability, if
any, of minor‐party candidates to wage effective campaigns will derive not from lack of public
funding but from their inability to raise private contributions.”). We note that this is not the
situation before us, as appellants do not allege that they are effectively compelled to accept
public funds.
23
allows a candidate to choose between “two methods” of speaking: either using
privately raised funds or public funds, whichever the candidate believes will be
greater. RNC II, 487 F. Supp. at 284; cf. Buckley, 424 U.S. at 95 n.129 (noting that
FECA’s public financing scheme “substitutes public funding for what the parties
would raise privately”). Thus, because candidates remain free to reject the
Option’s funding and attendant Contribution Limit if they believe that private
financing of their campaigns will facilitate greater speech, they cannot claim that
the Options’ restrictions in this regard burden their First Amendment rights.
Appellants nonetheless assert that the unconstitutional conditions doctrine
entails a heightened level of scrutiny because the terms of the Option condition a
benefit—here, a grant of public financing—on a PFC’s ostensible sacrifice of a
constitutional right—namely the ability to raise unlimited private contributions.
See Perry v. Sindermann, 408 U.S. 593, 597 (1972) (“[The Government] may not
deny a benefit to a person on a basis that infringes his constitutionally protected
interests—especially, his interest in freedom of speech.”).
In support of this view, they rely in part on a passage from RNC II, which
explains that a statute may “require[] an individual to choose between two
methods of exercising the same constitutional right . . . provided the statute does
24
not diminish a protected right or, where there is such a diminution, the burden is
justified by a compelling state interest.” 487 F. Supp. at 284–85. Appellants
emphasize the phrase after the “or” and interpret it to demand heightened
scrutiny. Yet RNC II clearly sets out a disjunctive test, under which a statute is
constitutionally sound if it either does not diminish rights or is justified by a
sufficient interest. For the reasons explained above, a candidate’s ability to
choose either to receive public funds or raise unlimited private funds does not
diminish her ability to speak. Therefore, under RNC II, that condition need not be
justified by a sufficient interest for the law to be constitutionally sound.
None of the other authority that appellants cite establishes that providing a
choice between unlimited private fundraising and limited public funding
triggers heightened scrutiny. In Green Party v. Garfield, this Court did review
provisions of Connecticut’s public financing system using “exacting scrutiny.”
616 F.3d 213, 229–36 (2d Cir. 2010). However, the challengers in that case argued
that Connecticut’s eligibility requirements for public grants discriminated
against minor party candidates, a different type of claim than the challenge to the
Contribution Limit that appellants make here. See id. at 228–29; see also infra
25
§ II.C. Moreover, Green Party merely assumed without deciding that such
scrutiny applied to the challenge in that case. 616 F.3d at 228–29.5
Appellants also reference a concurring opinion in Ognibene v. Parkes, 671
F.3d 174 (2d Cir. 2011), in support of their view that restrictions on contributions
to PFCs must satisfy exacting scrutiny. Under the public financing system
challenged in Ognibene, a candidate who opted for public funding could receive
public matching funds equal to six times the amount of eligible contributions
that the candidate raised, but contributions from lobbyists and entities that did
business with New York City would not be matched. Id. at 179–80, 193. The
opinion of the Court held that “the non‐matching provision is closely drawn to
address a sufficiently important governmental interest,” a conclusion sufficient
5 The Green Party plaintiffs also asserted that certain “trigger” provisions of
Connecticut’s public financing system burdened the speech of candidates who did not
participate in that system. Green Party, 616 F.3d at 242. Under those provisions, a PFC
would receive additional grants of public funds if the PFC’s privately financed
opponent made expenditures or received contributions totaling more than the
expenditure limit applicable to the PFC, or if independent expenditures made in
opposition to the PFC’s candidacy exceeded a certain threshold. Id. at 221–22. We
applied heightened scrutiny and struck down that portion of the law. Id. at 245.
However, our analysis reflected the fact that the “trigger” provisions operated as a
“penalty” on PFCs’ opponents, who did not voluntarily submit to the strictures of the
public financing system. Id. at 244. Here, appellants do not make a similar claim; they
instead argue that the rights of PFCs themselves are burdened.
26
to satisfy exacting scrutiny. Id. at 193. Yet the Court also recognized that
participation in the system was “voluntary,” and that “[c]andidates who choose
not to participate, and their contributors, are not prevented from freely
expressing their political speech and associations.” Id. This reasoning is
consistent with the view that, so long as candidates may freely choose not to
participate in public funding, the conditions on that funding do not burden
candidates’ rights.
The cases from our sister circuits cited above are of no more help to
appellants’ cause. While appellants suggest that some of those cases applied
heightened scrutiny to provisions of public election financing schemes, the cases
that they cite at most hold in the alternative that the provisions satisfied such
scrutiny, after concluding that those provisions did not burden candidates’
rights. See, e.g., Rosenstiel, 101 F.3d at 1552–53 (holding that Minnesota’s public
financing system “survive[d] strict scrutiny,” after having held that “the
challenged provisions do not burden a candidate’s First Amendment rights”
because the system was “choice‐increasing”); see also Daggett, 205 F.3d at 465
n.26, 472 (concluding that Maine’s public financing scheme “d[id] not burden the
First Amendment rights of candidates or contributors” and not reaching whether
27
a burden would be justified by a compelling interest). In sum, we conclude that
the voluntary decision to accept public funds and forgo the ability to accept
private contributions does not burden PFCs’ First Amendment rights.6
But even if the Contribution Limit did impose a burden on PFCs’ rights,
that burden would be justified under intermediate scrutiny. “Going back
to [Buckley], restrictions on political contributions have been treated as merely
6 Appellants push back against this view with a purported reductio ad absurdum. They
posit that, if a voluntary choice to accept public financing could never be understood to burden
a candidate’s rights, then a state could impose all sorts of troubling conditions on the receipt of
public funds, such as requirements that PFCs refrain from discussing certain issues or
associating with certain groups, possess certain religious affiliations, or not campaign against
certain candidates. We need not address whether any of those specific conditions would be
permissible because they are not before us in this case. However, we observe that this parade of
horribles does not call into question the soundness of the analysis above.
As long as an offer of public funding to which an objectionable condition attached is not
so advantageous that a candidate is effectively compelled to take it, we could expect the
candidate to reject such an offer, in which case the condition would not burden the candidate.
In contrast, were an offer of funding so advantageous that a candidate did feel compelled to
accept the funding despite objecting to a condition attached thereto, we would review whether
the condition burdened the candidate’s rights and, if it did, review whether imposing that
condition nonetheless satisfied the appropriate level of scrutiny. Similarly, if a prerequisite for
access to public funding—like the fundraising and vote‐share requirements challenged under
the Equal Protection Clause of the Fifth Amendment in Buckley, 424 U.S. at 93—appeared to
discriminate between candidates, we would apply exacting scrutiny. See Green Party, 616 F.3d at
229. In the abstract, it is hard to imagine that any of the conditions that appellants put forth
would further a legitimate governmental interest such that it could pass the applicable level of
scrutiny. Moreover, some—such as a requirement that PFCs possess a certain religious
affiliation—would seem to violate rights beyond the speech and associational rights in the First
Amendment. Thus, appellants have not shown that the foregoing analysis would permit any of
the troublesome conditions that they identify to hinder candidates’ exercise of their rights.
28
‘marginal’ speech restrictions subject to relatively complaisant review under the
First Amendment, because contributions lie closer to the edges than to the core of
political expression.” FEC v. Beaumont, 539 U.S. 146, 161 (2003) (quoting Colorado
II, 533 U.S. at 440). Thus, a contribution limit “passes muster if it satisfies the
lesser demand of being closely drawn to match a sufficiently important interest.”
Id. at 162 (internal quotation marks omitted).
Buckley concluded that “public financing as a means of eliminating the
improper influence of large private contributions furthers a significant
governmental interest.” 424 U.S. at 96. RNC II similarly held that the public
financing scheme at issue in that case was “supported by a compelling state
interest,” specifically “‘to reduce the deleterious influence of large contributions
on our political process, to facilitate communication by candidates with the
electorate, and to free candidates from the rigors of fundraising.’” 487 F. Supp. at
285 (quoting Buckley, 424 U.S. at 91). Restricting private contributions to PFCs is
closely drawn to that interest because, “[i]f a candidate were permitted, in
addition to receipt of public funds, to raise and expend unlimited private funds,
the purpose of public financing would be defeated.” Id. It is easy to see why: if
such contributions were not limited, grants of public funds would simply serve
29
as stipends to candidates who would continue private fundraising efforts and
thereby reintroduce the detriments of private fundraising that public election
financing schemes were designed to avoid. Like the party in RNC II, appellants
appear to advocate for “the right to solicit, receive and spend both public and
private campaign funds, without any limitations.” 487 F. Supp. at 283. But they
cannot have it both ways without undermining the purpose of the Option.
Rather, as the name “Option” suggests, candidates must choose between limited
public grants and unlimited private contributions.
We conclude that Section 2983(b)(1)’s Contribution Limit does not burden
the First Amendment rights of candidates, and, even if it did, it would survive
exacting scrutiny because it is closely drawn to address the important
governmental interests served by a public election financing scheme.
3. Supporters
Section 2983(b)(1)’s Contribution Limit does not impermissibly burden the
constitutional rights of PFCs’ supporters either. As set forth above, RNC II held
that “as long as the candidate remains free to engage in unlimited private
funding and spending instead of limited public funding, the law does not violate
the First Amendment rights of the candidate or supporters.” 487 F. Supp. at 284
30
(emphasis added). The three‐judge district court explained that, despite FECA’s
contribution limitations, supporters retained “a wide range of ways to express
their support” given exclusions from FECA’s definitions of contribution and
expenditure and supporters’ ability to make unlimited independent
expenditures. Id. at 286. More centrally, any limitation on supporters’ ability to
contribute was a function of their preferred candidate’s voluntary choice:
[S]ince the candidate has a legitimate choice whether to accept public
funding and forego private contributions, the supporters may not
complain that the government has deprived them of the right to
contribute. There is nothing improper or unusual in recognizing
that a candidate rather than his or her supporters should control the
method of financing the campaign. In this respect the statute simply
reflects the basic right of any person to accept or reject campaign
contributions from any other person or committee, or not to run for
office at all. . . . In short, it would be unreasonable to preclude a
candidate who prefers public financing from using it instead of
private financing merely because some supporters believe that the
decision deprives them of the ability to contribute to the candidate’s
election in the precise way they would if the campaign were privately
financed.
Id. In other words, if a candidate declines private contributions in favor of public
funds, the candidate’s supporters cannot complain that the state has infringed
their rights to make contributions. Therefore, because candidates “remain[] free
31
to engage in unlimited private funding and spending instead of limited public
funding” under the Option (as established above), the restriction on
contributions that applies when candidates voluntarily elect public funding does
not abridge supporters’ rights. Id. at 284. Moreover, for the reasons stated above,
such a restriction furthers sufficiently important government interests.
4. Political Parties
The same logic leads us to conclude that the Contribution Limit does not
unconstitutionally burden the rights of political parties. Appellants argue at
length that a party’s ability to make expenditures in coordination with
candidates—which, as explained above, are treated as “contributions” under the
Act, Vt. Stat. Ann. tit. 17, § 2944(a), and are therefore subject to the Contribution
Limit7—is critical to the party’s role in Vermont’s electoral system, and that the
Contribution Limit unacceptably curtails this important function with respect to
PFCs. However, appellants cannot show that parties are exempt from the
7 As noted above, see supra n.2, we do not understand appellants to challenge the district
court’s holding that Vermont may regulate related expenditures as contributions. We therefore
take it as a given in our analysis that related expenditures by parties are functionally equivalent
to monetary contributions. See Colorado II, 533 U.S. at 464 (“There is no significant functional
difference between a party’s coordinated expenditure and a direct party contribution to the
candidate.”).
32
analysis set forth above, according to which a candidate’s voluntary decision to
accept public funds and their attendant limitations does not produce an
unconstitutional burden on the rights of her supporters.
The Supreme Court has recognized that restrictions on party contributions
to candidates can “threaten[] harm to a particularly important political right, the
right to associate in a political party.” Randall, 548 U.S. at 256. Randall, which held
unconstitutional Act 64’s stringent caps on contributions, identified two “special
party‐related harms,” id. at 259, that those limits wrought: “limit[ing] the ability
of a party to assist its candidates’ campaigns by engaging in coordinated
spending on advertising, candidate events, voter lists, mass mailings, even yard
signs,” id. at 257, and “preventing a political party from using contributions by
small donors to provide meaningful assistance to any individual candidate,” id.
at 258. But Randall did not consider whether these harms were inflicted by limits
on parties’ assistance to candidates who elected public financing, as it did not
address the constitutionality of Act 64’s public election finance system. See id. at
239.
While restrictions on contributions can abridge the rights of political
parties, so too can such limits abridge the rights of individual supporters. And
33
we know from the foregoing analysis that limits on individual contributions are
constitutionally permissible when supporters’ preferred candidate voluntarily
chooses to accept public funds in lieu of private fundraising. See RNC II, 487 F.
Supp. at 284. The question, then, is whether parties should be treated any
differently than individual supporters when it comes to limits on coordinated
expenditures in support of PFCs.
In Colorado II, the Supreme Court, addressing a challenge to FECA’s limits
on parties’ coordinated expenditures, considered “whether a party is otherwise
in a different position from other political speakers, giving it a claim to demand a
generally higher standard of scrutiny before its coordinated spending can be
limited.” 533 U.S. at 445. The political party involved in that case argued that,
because a party’s most essential function is to coordinate with candidates to get
them elected, limitations on that coordination are more serious than similar
restrictions on individual supporters. The Court rejected this view. It noted that
“political parties and other associations derive rights from their members,” id. at
448 n.10, and it did not understand the respondent party to “claim a variety of
First Amendment protection that is different in kind from the speech and
associational rights of their members,” id. at 448. The Court concluded that “[a]
34
party is not, therefore, in a unique position. It is in the same position as some
individuals and [political committees], as to whom coordinated spending limits
have already been held valid.” Id. at 455.
We likewise conclude that, in the context of restrictions on contributions to
PFCs, a party is in no different position than an individual supporter, who
cannot complain that her rights have been violated when her preferred candidate
opts for public funds rather than raising private contributions. A PFC’s choice to
accept public funds and thus the Option’s restriction on expenditures
coordinated with PFCs no more burdens a party’s rights than would a
candidate’s choice not to coordinate with the party with regard to the party’s
expenditures. We therefore conclude that Section 2983(b)(1)’s contribution limit
does not burden political parties’ rights.8
8 In light of this conclusion, we need not address appellants’ arguments that certain
party activities fall outside of the enumerated exemptions from the definition of contribution in
Section 2901(4). These arguments seek to demonstrate that, assuming that restrictions on
parties’ coordinated expenditures on behalf of PFCs may constitute burdens on speech, the Act
does in fact impose a significant burden, contrary to the district court’s conclusion that Section
2901(4)’s exemptions permitted all of the activities that a party such as the VPP might wish to
undertake on behalf of candidates. Because we conclude that such restrictions do not burden
the rights of candidates and parties so long as candidates freely choose public funding, the
extent of the restrictions under the Act is beside the point here.
In addition, while appellants seem to suggest that the construction of Section 2901(4)’s
exemptions provides them with inadequate guidance about which related expenditures will
35
Moreover, even if the application of the Contribution Limit to political
parties did burden those parties’ rights, the limit survives the appropriate level
of scrutiny, as it is closely drawn to sufficiently important governmental
interests. See id. at 456 (concluding that restrictions on parties’ coordinated
spending were subject to “scrutiny appropriate for a contribution limit”). As
explained above, restricting contributions to PFCs is necessary to sustain a public
financing system, which itself serves important interests. See Buckley, 424 U.S. at
96; RNC II, 487 F. Supp. at 285.
Appellants contend, however, that parties’ contributions are somehow
different than contributions from other sources, such that there is no reason to
restrict PFCs’ receipt of the former. They assert that campaign finance laws’
restrictions on speech may only be imposed to prevent quid pro quo corruption
and its appearance, see McCutcheon v. FEC, 134 S. Ct. 1434, 1450 (2014), whereas
the legislative findings that preface Act 90 imply that party contributions actually
count as contributions, they do not present a developed argument that those provisions are
impermissibly vague, and we therefore do not consider it. See Tolbert v. Queens Coll., 242 F.3d 58,
75 (2d Cir. 2001) (“It is a settled appellate rule that issues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are deemed waived.” (internal
quotation marks omitted)).
36
counteract corruption and therefore that there is no legitimate reason to limit
such contributions. We do not think that the Act’s findings lead to that
conclusion. The findings explain that the Act imposes no limits on parties’
contributions to (privately financed) candidates because “[p]olitical parties play
an important role in electoral campaigns,” which role is at risk of being
“eclipse[d]” by less transparent, less democratic “expenditure‐only political
committees.” 2014 Vt. Acts & Resolves 2. But this explanation as to why party
contributions to privately financed candidates are unlimited has no direct
relevance to contribution limits pertaining to PFCs.
Even if the Act’s findings suggest that contributions by parties are
comparatively benign, that does not mean that there is no reason to prevent all
donors, including parties, from contributing to PFCs in order to maintain a
system of public financing. Appellants argue that the interests that justify a
public financing system, specifically relieving candidates of the burdens of
private fundraising and obligations to donors, see RNC II, 487 F. Supp. at 285, are
not served by restricting contributions by political parties. Yet application of the
Contribution Limit to parties at the very least furthers an interest in preventing
“the risk of corruption (and its appearance) through circumvention of valid
37
contribution limits.” Colorado II, 533 U.S. at 456; see also McCutcheon, 134 S. Ct. at
1458 (adverting to the “Government’s anticircumvention interest,” which may
justify restrictions that prevent circumvention of contribution limits). If a party
could contribute unlimited funds to a PFC while individual supporters remained
subject to the Act’s Contribution Limit, those supporters might avoid the limit by
donating funds to the party (up to $10,000, see Vt. Stat. Ann. tit. 17, § 2941(a)(5))
with the understanding that the funds would be contributed to the candidate. See
Colorado II, 533 U.S. at 458 (explaining that, where contribution limits applicable
to parties are higher than those imposed on individuals, “[d]onors give to the
party with the tacit understanding that the[ir] favored candidate will benefit”).
Such circumvention would undercut the Contribution Limit for individuals,
which, as explained above, is necessary to maintain a public financing system.
We therefore conclude that applying the Contribution Limit to parties is closely
drawn to the important governmental interests served by a public financing
system.
Finally, appellants’ attempt to reframe the Contribution Limit as a speaker‐
or content‐based restriction on parties’ speech is unavailing. The Contribution
Limit applies to all potential donors to PFCs, not solely political parties, so it is
38
not speaker‐based. And, consistently with that limit, parties can still express
support for PFCs through unlimited independent expenditures and any
coordinated expenditures that fall within Section 2901(4)’s exemptions, which
belies appellants’ assertion that the limit imposes a content‐based restriction
targeting speech in support of PFCs. Appellants’ argument boils down to the
assertion that a party’s inability to make coordinated expenditures that fall
outside of Section 2901(4)’s exemption on behalf of PFCs will imply a
withholding of support from those candidates; appellants characterize the
purportedly implied message as a “state‐imposed requirement of . . . misleading
speech.” Appellants’ Br. 19–20. It strikes us as highly implausible that anyone
would understand the legally mandated withholding of certain types of
support—contributions and some coordinated expenditures—to imply a lack of
support for a given candidate, particularly when a party could express robust
support through permitted methods. In any event, appellants’ argument proves
too much: its logic would allow any prospective donor to argue that a
contribution limit requires her to express less robust support than she wishes to
express, thereby compelling misleading speech. But it is well‐established that
reasonable contribution limits are constitutional. See Buckley, 424 U.S. at 28–29.
39
Thus, there is no merit to appellants’ view that the Contribution Limit is an
impermissible content‐based restriction.
In sum, we conclude that a candidate’s voluntary choice to accept public
funds in lieu of private contributions under the terms of the Option does not
entail a burden on the rights of the candidate, her supporters, or political parties,
and also that the Contribution Limit is closely drawn to important interests. We
therefore reject appellants’ challenge to Section 2983(b)(1)’s limit on contributions
to PFCs.
B. The Expenditure Limit
Section 2983(b)(1) prohibits PFCs from “expend[ing] any contributions
except” those received under the terms of the Option, which logically bars them
from expending their own funds, i.e., self‐financing their campaigns. Appellants
contend that this restriction does nothing to avoid corruption or its appearance
and therefore cannot survive the strict scrutiny to which limitations on campaign
expenditures are subject. See Davis v. FEC, 554 U.S. 724, 740 (2008) (noting that if
a restriction “imposes a substantial burden on the exercise of the First
Amendment right to use personal funds for campaign speech, that provision
40
cannot stand unless it is justified by a compelling state interest.” (internal
quotation marks omitted)).
Yet appellants have skipped a step: before such heightened scrutiny applies
they must show that there is a burden on candidates’ rights, and this they cannot
do. Buckley recognized that a public financing system “may condition acceptance
of public funds on an agreement by the candidate to abide by specified
expenditure limitations.” 424 U.S. at 57 n.65; see also id. at 95 (“[A]cceptance of
public financing entails voluntary acceptance of an expenditure ceiling.”). As
explained above, if a candidate voluntarily chooses to accept public funds in lieu
of private fundraising—presumably because the grant of public funds will
expand her ability to speak—then prohibiting her from using funds other than
the public grant, including her own, does not burden her constitutional rights.
The Supreme Court’s decision in Davis, cited by appellants, only reinforces
this conclusion. In Davis, the Court found unconstitutional a provision of the
Bipartisan Campaign Reform Act (“BCRA”), under which, if a candidate made
personal expenditures beyond a certain threshold, the candidate’s opponent
would enjoy an expanded contribution limit. 554 U.S. at 729. The Court held that
this selective expansion of the contribution limit unconstitutionally penalized
41
expenditures of personal funds. Id. at 739. In so holding, the Court rejected the
argument that this penalty on speech was permissible simply because candidates
may choose whether or not to expend funds beyond the threshold. But the Court
expressly distinguished that choice from the choice to accept public funds and
concomitant restrictions. Id. at 739–40. The Court explained that, under the public
financing system analyzed in Buckley, “a candidate, by forgoing public financing,
could retain the unfettered right to make unlimited personal expenditures,”
whereas, under BCRA, a candidate had to choose either to restrict her spending
or to trigger disparate contribution limits. Id. Davis therefore confirms that a
public financing system under which a candidate may choose to exercise “the
unfettered right to make unlimited personal expenditures” does not threaten the
right to make personal expenditures in support of one’s own campaign. Thus, we
also reject appellants’ challenge to the Expenditure Limit.
C. The Timing Restrictions
The last of appellants’ constitutional challenges is to the Timing Restrictions
contained in Section 2983(a). That section specifies that a candidate is not eligible
for grants of public election funds if, before February 15 of an election year, she
announces her candidacy or raises or spends more than $2000. Vt. Stat. Ann. tit.
42
17, § 2983(a). Appellants contend that these restrictions unjustifiably
disadvantage PFCs, especially when those candidates’ opponents engage in
significant fundraising earlier than February 15.
The district court concluded that the Timing Restrictions, by defining the
period during which prospective PFCs must raise the requisite amount of
qualifying contributions, allowed an evaluation of whether those candidates
enjoyed enough support to qualify for public financing and therefore furthered
an interest in reserving public funds for viable candidates. See Buckley, 424 U.S. at
96 (“Congress’ interest in not funding hopeless candidacies with large sums of
public money necessarily justifies the withholding of public assistance from
candidates without significant public support. Thus, Congress may legitimately
require some preliminary showing of a significant modicum of support as an
eligibility requirement for public funds.” (internal citations and quotation marks
omitted)). The district court accordingly held that the timing restrictions passed
constitutional muster.
Appellants likewise frame the Timing Restrictions as “eligibility
requirement[s],” to which Buckley applied exacting scrutiny. 424 U.S. at 93–96
(analogizing FECA’s “eligibility formulae” for public grants to restrictions on
43
ballot access, which are subject to exacting scrutiny, and, while noting that the
former were less restrictive than the latter, holding that the eligibility formulae
satisfied such heightened scrutiny). But see Green Party, 616 F.3d at 228
(observing that Buckley left unresolved whether exacting scrutiny or some “less
searching standard” applies to claims that a public financing system’s
qualification criteria discriminate against certain candidates). The Timing
Restrictions, appellants argue, fail to satisfy exacting scrutiny because they do
not further any governmental interests, much less “sufficiently important” ones,
and they “unfairly or unnecessarily burden[] the political opportunity” of PFCs.
Buckley, 424 U.S. at 95, 96.
At first glance, given Section 2983(a)’s reference to “eligib[ility] for Vermont
campaign finance grants,” it might seem that the Timing Restrictions should be
analyzed as eligibility requirements of the kind at issue in Buckley and Green
Party, which are subject (at least provisionally) to exacting scrutiny. But the
eligibility requirements discussed in Buckley measured amounts of preliminary
fundraising and, in the case of minor‐party candidates, the share of the vote that
the candidate’s party earned in the previous election, 424 U.S. at 88–89; the ones
in Green Party concerned those factors as well as the number of voter
44
registrations for a candidate’s party and signatures collected, 616 F.3d at 219–20;
and, as noted above, the Act itself contains a preliminary fundraising
requirement specifying that a certain amount of qualifying contributions must be
raised over a certain period, see Vt. Stat. Ann. tit. 17, §§ 2356, 2981(4), 2984(a). The
Timing Restrictions, in contrast, do not require an affirmative show of support,
but rather only refraining from certain actions. On their own, they impose no
hurdle limiting access to public funding to certain viable candidates, since any
candidate who wishes to receive such funding can abide by those limits.
Moreover, the Timing Restrictions do not raise the specter of discrimination
between major‐ and minor‐party candidates, which was the crux of the
challenges to the eligibility requirements in Buckley, see 424 U.S. at 97, and Green
Party, see 616 F.3d at 224. In other words, while the restrictions at issue in Buckley
and Green Party were alleged to discriminate between certain types of candidates
in determining who could receive public funding—i.e., which candidates could
campaign as PFCs—here appellants argue that the Timing Restrictions
discriminate between PFCs and privately financed candidates.
In this light, the Timing Restrictions are unlike the eligibility requirements
in Buckley and Green Party and more akin to the limits on contributions to and
45
expenditures by PFCs found in Section 2983(b)(1) and discussed above. Indeed,
the structure of the Act is suggestive: the Timing Restrictions and the
Contribution and Expenditure Limits are all found in Section 2983, whose title
indicates that it sets out “conditions” on grants, see Vt. Stat. Ann. tit. 17, § 2983,
whereas it is the following section, entitled “Qualifying Contributions,” that sets
out what a candidate must do “[i]n order to qualify for” grants, see id. § 2984. We
therefore analyze the Timing Restrictions not as requirements limiting eligibility
for public funds, which may be subject to exacting scrutiny, see Green Party, 616
F.3d at 229, but rather as limits on PFCs that are conditions of the grant of public
funding under the Option.
Under this framework, appellants’ contention that the Timing Restrictions
impermissibly “burden the political opportunity” of PFCs, id. at 228, when
privately financed candidates enter a race before February 15 is misplaced. We
understand the thrust of this contention to be that the restrictions afford
privately financed candidates a head start on private fundraising, which
advantages them over PFCs. However, as discussed above with regard to the
Contribution and Expenditure Limits, a candidate may voluntarily choose
between public financing, with its concomitant restrictions, and unlimited
46
private fundraising, and we would expect her to elect whichever option is most
advantageous. If candidates believe that the Timing Restrictions disadvantage
PFCs relative to privately funded candidates, they can freely choose to raise
private funds instead. Cf. Buckley, 424 U.S. at 99 (concluding that FECA’s public
financing system did not disadvantage non‐major parties, even if they received
no benefit from it, in part because those parties remained “free to raise money
from private sources”). We therefore remain unpersuaded by appellants’
argument that the Timing Restrictions amount to a burden on candidates’ rights.
Because the Timing Restrictions do not burden candidates’ fundamental
rights, they are subject only to rational basis review, which is exceedingly
deferential. See Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353, 359 (2009) (“Given
that the State has not infringed . . . First Amendment rights, the State need only
demonstrate a rational basis to justify the [law].”). The restrictions meet this
standard. Even though they are not needed to set the initial bound of the public
financing qualification period, see Vt. Stat. Ann. tit. 17, §§ 2356, 2981(4), they
nonetheless might make it more difficult for prospective PFCs to violate the
requirement that PFCs raise the requisite amount of qualifying contributions
only during that period. If a candidate cannot announce her bid for office or
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accept significant contributions before the qualification period, it would seem
less likely that she could raise significant funds before the qualification period
and then misreport those funds as qualifying contributions made at the proper
time. In addition, there are other conceivable rationales for the restrictions: for
example, Vermont’s legislature might believe it beneficial to reduce the amount
of time candidates spend campaigning. For those reasons, we reject appellants’
constitutional challenge to the Timing Restrictions.
* * *
In sum, we conclude that the Contribution Limit, the Expenditure Limit,
and the Timing Restrictions in Act 90 do not violate the First Amendment rights
of candidates, their supporters, or political parties. Given the free choice to
accept the grants and restrictions that public financing entails or to engage in
unlimited private fundraising, candidates cannot complain that electing the
former course burdens their rights. And even if, as appellants contend, the
detriments of public financing are so severe that few candidates, if any, will elect
to receive public funds, that is a problem for Vermont’s legislature, not this
Court, to address. We therefore affirm the district court’s dismissal of appellants’
claims.
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III. Attorney’s Fees
Appellants’ other challenge on appeal is to the district court’s denial of
their motion for attorney’s fees under 42 U.S.C. § 1988(b). In an action under 42
U.S.C. § 1983, a “court, in its discretion, may allow the prevailing party . . . a
reasonable attorney’s fee as part of the costs.” 42 U.S.C. § 1988(b). The district
court concluded that appellants were not entitled to fees because they could not
be considered “prevailing parties” in the litigation below, as the court dismissed
all of their claims and did not grant declaratory or injunctive relief.
Appellants argue that this conclusion was erroneous because, although the
March 9, 2016 Opinion and Order dismissed their claims, it nonetheless
contained a favorable statutory construction. The district court held that, “[t]o
bring the statutory provisions into harmony, and as apparently conceded by the
Defendants in their briefing, the contribution exemptions in Section 2901(4) must
apply throughout the statute,” such that “a related expenditure is considered a
contribution to a candidate unless the expenditure is an activity that is specifically
exempted under [Section] 2901(4).” App. 110. This holding, appellants contend,
amounts in practice to a declaratory judgment granting part of the relief that they
had requested in the SAC. See App. 48–49 at ¶ 104 (requesting “a declaratory
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judgment that the political party activities enumerated in §[]2901(4) . . . are not
‘in‐kind contributions’”).
“[P]laintiffs are only eligible for attorneys’ fees if they ‘achieve some
material alteration of the legal relationship’ between them and their
adversaries, and that change bears a ‘judicial imprimatur.’” Perez v. Westchester
Cnty. Dep’t of Corr., 587 F.3d 143, 149 (2d Cir. 2009) (quoting Roberson v.
Giuliani, 346 F.3d 75, 79–80 (2d Cir. 2003)). It is well established that “enforceable
judgments on the merits and court‐ordered consent decrees” fulfill these
requirements, Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human
Res., 532 U.S. 598, 604 (2001), and so can other judicial actions provided that they
“carr[y] with [them] sufficient judicial imprimatur,” such as a dismissal order
providing that the district court will retain jurisdiction to enforce a settlement
agreement, Perez, 587 F.3d at 151 (quoting Roberson, 346 F.3d at 81). However, the
Supreme Court has observed that a favorable “judicial pronouncement . . .
unaccompanied by judicial relief” has not warranted a fee award. Buckhannon,
532 U.S. at 606 (internal quotation marks and emphasis omitted). Indeed, the
Court has stated that “a favorable judicial statement of law in the course of
litigation that results in judgment against the plaintiff does not suffice to render
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him a ‘prevailing party.’ Any other result strains both the statutory language and
common sense.” Hewitt v. Helms, 482 U.S. 755, 763 (1987).
The district court’s adoption of appellants’ preferred interpretation of
Section 2901(4) did not effect a material alteration in the parties’ relationship.
That interpretation of the statute is a natural one: under standard principles of
statutory construction, the exemption of specific activities from the definition of
contribution should be understood as an exception to the general treatment of
related campaign expenditures as contributions. See RadLAX Gateway Hotel, LLC
v. Amalgamated Bank, 566 U.S. 639, 645 (2012) (“It is a commonplace of statutory
construction that the specific governs the general. . . . To eliminate the
contradiction [between conflicting provisions in a statute], the specific provision
is construed as an exception to the general one.” (internal quotation marks
omitted)). Moreover, Vermont did not contest that interpretation before the
district court. This suggests that the adoption of that interpretation did not alter
the status quo, such as by forestalling impending enforcement. That Vermont
initiated the state enforcement action against Corren does not indicate otherwise:
while the district court held that related expenditures falling within the
exemptions in Section 2901(4) do not constitute contributions, Vermont could
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(and did) argue that the email blast was nonetheless a contribution under the
terms of that ruling because the email blast did not fall within any of Section
2901(4)’s exemptions.
If plaintiffs could receive fees under § 1988 whenever they sought
confirmation of a certain statutory construction—even an uncontested or obvious
one—and the court adopted that interpretation, then it would be quite easy for
plaintiffs to “prevail” even where they lost on the merits. But Hewitt rejects this
view, and instead stresses that what matters is not a judicial pronouncement but
“the settling of some dispute which affects the behavior of the defendant towards the
plaintiff,” which appellants have not demonstrated on the record before us. 482
U.S. at 761. Accordingly, we find no error in the district court’s conclusion that
appellants were not prevailing parties and affirm the denial of appellants’
motion for attorney’s fees.
CONCLUSION
We AFFIRM the judgment of the district court.
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