Ninth Circuit overturns ruling on Ariz. tax financing for candidates

A federal court of appeals erroneously ruled that “rescue funds,” a government sanction against private political speech included in Arizona’s system of taxpayer financed campaigns, does not violate the First Amendment.

“The Ninth Circuit’s decision today was wrong on the facts and the law,” said Bill Maurer in a statement released by the Institute for Justice (IJ). Mauer is the lead attorney in a legal challenge to the Arizona law brought by the IJ. “The Court failed to follow U.S. Supreme Court precedent and decades of cases holding that the government has no role in ‘leveling the playing field’ among political speakers.  As a result, we expect to appeal to the U.S. Supreme Court.”

IJ explained the state’s unconstitutional scheme: Arizona’s law “squelches the free speech of candidates who raise their own funds for their campaigns, by simply handing out funds to their opponents who participate in the taxpayer-funded scheme. For every dollar a privately funded candidate spends above a certain amount, the government hands taxpayer dollars over to his opponent to allow him to ‘match’ the spending-and thus the speech-of the privately funded candidate. The Act even matches funds spent by independent groups to support privately funded candidates. The Act thus punishes privately funded candidates and their supporters for spending money on speech.”

The Friday ruling essentially ignores a 2008 Supreme Court ruling, Davis v. Federal Election Commission, which held that government could not raise contribution limits for candidates facing wealthy opponents.

“This case is not about government enhancing speech,” said Steve Hoersting, the vice president of the Center for Competitive Politics and the author of an amicus brief in the case. “This is government putting its thumb on the scale: participate in ‘clean elections’ and the state will help you win your election—don’t and the state will not. That’s a dirty trick.”

Today’s ruling overturns a decision by federal judge Roslyn Silver in January that the program violated the First Amendment political rights of candidates who declined a tax handout for their campaigns. The Ninth Circuit heard the case April 12. The Arizona Republic reported that as of May 10, 147 candidates signed up for the program, including 10 gubernatorial candidates.

Attorneys for plaintiffs in the case plan to ask the Supreme Court as soon as Friday to halt the distribution of “matching funds” until the Court hears the case. The Justice handling such requests is Anthony Kennedy, who initially declined to issue an injunction blocking matching funds before the U.S. Court of Appeals for the Ninth Circuit heard the case. The circumstances of the case have now evolved, though. If the Supreme Court does not act, Arizona will begin handing out subsidies to participating candidates June 22.

Since Arizona enacted their system of taxpayer funded campaigns in 1998 via voter initiative (on a narrow, 51-49 percent vote), not a single state has followed suit through the ballot box, but five states have rejected similar initiatives – most by roughly 2-1 margins. Since 1998, the only state to pass a similar program through its legislature is Connecticut in 2005. Connecticut’s program has also been ruled unconstitutional by a federal judge, and the case—Green Party of Connecticut v. Garfield—was heard by a federal appellate court in January.

Chances of the Supreme Court hearing the case may increase if the Second Circuit affirms the lower court ruling in Connecticut. The Ninth Circuit has the highest reversal rate of any federal circuit court.

The Arizona Republic covered the decision here. The Arizona Capitol Times report is here. Rick Hasen comments on the Election Law Blog: “Readers of this blog will recall that Judge Bea, a member of the Ninth Circuit motions panel considering a stay of the district court’s order enjoining enforcement of the Arizona plan, believed that the Arizona plan clearly was unconstitutional under Davis. Judge Bea was not a member of the merits panel that decided the case today.”

The decision in the case, McComish v. Bennett, may be accessed here. The Goldwater Institute’s resource page for the case is here. The Institute for Justice’s resource page for the case is here.

The Center for Competitive Politics is a nonpartisan, nonprofit group dedicated to protecting First Amendment political rights. CCP seeks to deregulate the political marketplace of ideas through research, litigation and advocacy.

The Center for Competitive Politics is now the Institute for Free Speech.