Bunning v. Com. of Ky.

• Decision Date: 22 December 1994
• Docket Number: No. 94-5287,94-5287
• Citation: 42 F.3d 1008
• Parties: James BUNNING, Plaintiff-Appellee, v. COMMONWEALTH OF KENTUCKY and Kentucky Registry of Election Finance, An Independent Agency of the Commonwealth of Kentucky, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1008

42 F.3d 1008

James BUNNING, Plaintiff-Appellee, v. COMMONWEALTH OF KENTUCKY and Kentucky Registry of Election Finance, An Independent Agency of the Commonwealth of Kentucky, Defendants-Appellants.

No. 94-5287.

United States Court of Appeals Sixth Circuit.

Argued Oct. 12, 1994.

Decided Dec. 22, 1994.

John C. Greiner (argued and briefed), Graydon, Head & Ritchey, Cincinnati, OH, J. Jeffrey Landen, Richard L. Robinson (briefed), Graydon, Head & Ritchey, Florence, KY, for plaintiff-appellee.

Timothy E. Shull (argued and briefed), Donald H. Vish (briefed), Kentucky Registry of Election Finance, Frankfort, KY, for defendants-appellants.

Before: KEITH and DAUGHTREY, Circuit Judges; and JOINER, District Judge ^*.

JOINER, District Judge.

Defendants, the Commonwealth of Kentucky and the Kentucky Registry of Election Finance (collectively, the "Registry"), appeal the judgment in favor of plaintiff, United States Congressman James Bunning. This case arose out of the Registry's attempt to investigate a poll conducted by Congressman Bunning's federal election committee to test the effectiveness of advertising conducted during his 1992 federal campaign. The Registry claimed that Congressman Bunning also may have used the poll to assess his potential as a future gubernatorial candidate, and that state law prohibited exploratory activity such as this. Congressman Bunning filed suit in federal court, contending that federal law preempted state law, and precluded the Registry from investigating the poll. The district court determined that it had subject matter jurisdiction and was not required to abstain from adjudicating the parties' dispute. Further, the court concluded that the Federal Election Campaign Act, 2 U.S.C. Secs. 431 et seq., preempted Kentucky law on the facts of this case, and enjoined the Registry from taking further action with respect to the poll. Finally, the court awarded attorney fees to Congressman Bunning.

The Registry appeals each of these rulings. We conclude that the award of attorney fees must be reversed. We affirm in all other respects.

I.

A.

In 1992, Kentucky amended its general campaign finance statute, Ky.Rev.Stat.Ann. Chapter 121, Secs. 121.015 et seq. (Baldwin Supp.1993); and also enacted the Public Financing Campaign Act, Ky.Rev.Stat.Ann. Chapter 121A, Secs. 121A.005 et seq. (Baldwin Supp.1993), which provides for public financing of gubernatorial elections. Under the new system, candidates for governor and lieutenant governor must register as a slate, Ky.Rev.Stat. Sec. 118.127, and file a "notice of intent" which discloses whether the candidates intend to participate in public financing, a decision which will dictate which set of financing provisions apply to them. Ky.Rev.Stat. Sec. 121A.040. A "participating" slate must agree to abide by specified limits on campaign expenditures during the primary, run-off primary, and general election. Ky.Rev.Stat. Sec. 121A.030. A slate has the option of not participating in public financing, and, if it so chooses, is not subject to these limits. ¹ The 1995 gubernatorial election will be the first conducted under the new law.

The Registry of Election Finance is charged with responsibility for overseeing compliance with Kentucky's election finance law generally, and for investigating alleged violations of the law. The Registry is authorized to investigate complaints; issue subpoenas and seek enforcement of those subpoenas in state court; hold hearings, receive evidence and issue orders; and issue advisory opinions. Ky.Rev.Stat. Secs. 121.120-121.140.

Registry attorney Anita Stanley testified at trial regarding the Registry's efforts to promulgate regulations and develop enforcement procedures under the new law. Pertinent to its investigation of Congressman Bunning, Stanley testified that the expenditure limitations apply to amounts spent both before and after a slate's notice of intent is filed. The Registry's legal staff has informed potential candidates asking for guidance that the Public Financing Campaign Act "does not allow for exploratory activity because such activity would not be subject to any reporting requirements and, therefore, there's no accountability. And we have basically told everyone, you cannot spend the money until you form a slate." Stanley acknowledged that this proscription derives from the Registry's interpretation of several provisions of the public financing law, not an express statutory prohibition. The Registry has not identified those provisions on which it bases its interpretation. At the time of trial, legislation was being proposed to "deal with the question of exploratory activity by statute because it is not addressed at this point. We would like to see something on the books that ties it up so that we can enforce it."

Congressman Bunning, a Republican, was elected to his fourth term in 1992. In August 1993, a Kentucky newspaper published an article regarding a poll conducted by Congressman Bunning, quoting him as stating that he considered running in the 1995 gubernatorial election to be a "valid option" if Republicans did not make gains in the 1994 national elections. According to the article, Congressman Bunning's top priority remained winning reelection to his House seat in 1994. ² The article further reported that his "statewide considerations" were buoyed by the poll, which sampled 600 people across the state, and compared him to Democrats viewed as gubernatorial possibilities.

At this juncture, Bunning said he does not intend to run for governor. But given the results of the poll, and the GOP's minority status in Congress, it's something he plans to consider.

"The '94 congressional elections are vital to me," Bunning said. "I don't enjoy being in the minority. But if things turn out like I think they might, I believe we'll have more balance."

Based on this article, the chairman of Kentucky's Democratic Party filed a complaint with the Registry, relying on the Registry's interpretation of the new law as prohibiting expenditures for exploratory activity. The complaint alleged that the statewide poll was in violation because it covered an area larger than Congressman Bunning's district and provided information on his rating as a possible candidate for governor.

Congressman Bunning responded by affidavit, stating that he was a present member of Congress and a potential candidate for reelection, and that he had registered a committee with the Federal Election Commission ("FEC") by the name of Citizens for Bunning. Congressman Bunning explained that four media markets penetrated his Congressional district, and that those markets extend far outside the district. Congressman Bunning stated that his campaign committee had purchased commercial air time in all four markets during his previous campaign, and conducted the poll to test the effectiveness of that advertising both inside and outside the district. Congressman Bunning stated that the poll was conducted in connection with election to a federal office, and expressly denied that it was conducted in furtherance of election to any state office. Finally, Congressman Bunning stated that the expenditure for the poll was regulated by the FEC and proper under its guidelines, and that the Registry was preempted from taking action to review the expenditures for the poll.

The Registry requested Congressman Bunning to voluntarily produce the questions asked in the poll, but Congressman Bunning declined. Despite Registry counsel's stated opinion that the Registry lacked jurisdiction and that the complaint should be referred to the FEC for investigation, the Registry again requested Congressman Bunning to produce the poll questions so that the Registry could determine whether it had jurisdiction. When he failed to do so, the Registry issued a subpoena for the poll questions.

B.

Upon being notified that the Registry intended to issue a subpoena, Congressman Bunning filed suit in federal court, alleging that the Federal Election Campaign Act preempted the Registry from taking any further action against him regarding the poll. Congressman Bunning moved for a preliminary injunction and defendants moved to dismiss for lack of subject matter jurisdiction and for failure to state a claim on which relief can be granted. On the parties' joint motion, trial on the merits was merged with a hearing on the motions.

The only witness to testify other than Registry attorney Stanley was Oteka Brab, the treasurer of Citizens for Bunning. Brab testified that the committee was subject to federal law and oversight by the FEC. As committee treasurer, Brab reported campaign receipts and expenditures to the FEC, including the $1400 spent on the poll in question. Brab further testified that a candidate is not prohibited by federal law from receiving campaign contributions from donors outside his district, and that Congressman Bunning had received such donations in the past. Finally, Brab testified that Citizens for Bunning had conducted statewide polls in the past, as often as every two years.

The district court found in Congressman Bunning's favor, awarding him declaratory and injunctive relief, costs, and attorney fees in an amount to be determined after this appeal.

II.

The Registry challenges the district court's holdings that it had subject matter jurisdiction and need not abstain from deciding this case, that federal law preempted state law, and that Congressman Bunning was entitled to attorney fees.

The district court's subject matter jurisdiction to entertain Congressman Bunning's preemption challenge to the Registry's investigation is clear. Lawrence County v. Lead-Deadwood Sch. Dist. No. 1, 469 U.S. 256, 259 n. 6, 105 S.Ct. 695, 697 n. 6, 83 L.Ed.2d 635 (1985); Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 n. 14, 103 S.Ct. 2890, 2899 n. 14, 77 L.Ed.2d 490 (1983) ³; Alltel Tennessee, Inc. v. Tennessee Pub. Serv. Comm'n, 913 F.2d 305 (6th Cir.1990). The...