Cao v. Fed. Election Comm'n, 10-30080

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtW. EUGENE DAVIS and FORTUNATO P. BENAVIDES, Circuit
PartiesANH CAO, also known as Joseph Cao; REPUBLICAN NATIONAL COMMITTEE, Plaintiffs-Appellants v. FEDERAL ELECTION COMMISSION, Defendant-Appellee
Docket NumberNO. 2:08-CV-4887,No. 10-30146,No. 10-30080,10-30080,10-30146,2:08-CV-4887
Decision Date10 September 2010

ANH CAO, also known as Joseph Cao; REPUBLICAN NATIONAL
COMMITTEE, Plaintiffs-Appellants

No. 10-30080
No. 10-30146
NO. 2:08-CV-4887

United States Court Of Appeals
For The Fifth Circuit

FILED: September 10, 2010

On Certification and Appeal from the United States District Court for the Eastern District of Louisiana



The challenges raised in the present case require this court to decide whether certain provisions of the Federal Election Campaign Act ("FECA" or

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"the Act") of 1971, 2 U.S.C. § 431 et seq., 1 violate the Plaintiffs' right to free speech under the First Amendment. Applying Supreme Court precedent, we conclude that each of the challenged FECA provisions constitutes a constitutionally permissible regulation of political parties' campaign contributions and coordinated expenditures. Accordingly, we find that none of the challenged provisions unconstitutionally infringe upon the rights of the Plaintiffs to engage in political debate and discussion.


Plaintiff Anh "Joseph" Cao is the United States Representative for the Second Congressional District of Louisiana, and Plaintiff Republican National Committee ("RNC") is the national political party committee of the Republican Party.2 On November 13, 2008, just before the December 6, 2008 election, the Plaintiffs filed a suit for declaratoryjudgment, 3 asserting eight constitutional challenges to various provisions of FECA. Generally, the Plaintiffs challenge the statutory provisions limiting the RNC's contributions to, and expenditures made in coordination with, Cao's 2008 congressional campaign.

The district court, abiding by its proper role in addressing a 2 U.S.C. § 437h challenge, 4 identified the constitutional issues in the complaint, held

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evidentiary hearings concerning those issues, and made necessary findings of fact. See Khachaturian v. FEC, 980 F.2d 330, 332 (5th Cir. 1992) (en banc). In doing so, the district court began by discussing the general contribution and expenditure limitations FECA places on political parties. Cao v. FEC, 688 F. Supp. 2d 498, 508-17 (E.D. La. 2010) ("Cao (District Court)"). Specifically examining how FECA affected the RNC's contributions and expenditures related to the 2008 Cao campaign, the district court then found that the RNC spent all of the $42,100 it was allowed to spend on coordinated expenditures under the Party Expenditure Provision, 2 U.S.C. § 441a(d)(2)-(3), 5 and reached its $5,000

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contribution limit under § 441a(a)(2)(A).6 Id. at 532. Additionally, the district court found that the RNC would have spent additional money on speech expressly advocating the election of Cao had it been permitted to spend beyond FECA limitations. Id. at 532-33.

Upon hearing the evidence and making the necessary findings of fact, the district court evaluated the Plaintiffs' eight constitutional challenges and, pursuant to § 437h, certified four questions to this en banc court. Id. at 549. The district court dismissed the Plaintiffs' remaining four challenges as frivolous. Id. Subsequently, the Plaintiffs appealed the district court's dismissal of the non-certified, frivolous questions. For purposes of judicial economy and efficiency, we consolidated the Plaintiffs' appeal of the dismissal of the noncertified questions with the court's en banc consideration of the certified questions.

We review the constitutionality of questions certified pursuant to § 437h de novo. See GoIand v. United States, 903 F.2d 1247, 1252 (9th Cir. 1990). We review the district court's dismissal of the Plaintiffs' remaining claims as frivolous for abuse of discretion. Id.


This appeal requires us to address the intersection of congressional campaign finance reform with the fundamental right to free speech under the First Amendment. Since the landmark decision of Buckley v. VaIeo, 424 U.S. 1 (1976), the Supreme Court on a number of occasions has evaluated the

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limitations that the First Amendment imposes on the Government's ability to preserve the integrity of the democratic election process through its regulation of campaign expenditures and contributions made to federal candidates. As such, many of the Plaintiffs' constitutional challenges raise questions the Supreme Court has previously addressed. Thus, we begin our analysis with a brief examination of the constitutional contours in which we find ourselves.

In Buckley, the Supreme Court determined that FECA's"contribution and expenditure limitations operate in an area of the most fundamental First Amendment activities." Id. at 14. The Buckley Court declared that the "[d]iscussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution." Id. As a result, the Buckley Court applied a strict level of scrutiny to the Government's restrictions "on the amount of money a person or group can spend on political communication during a campaign [since such restrictions] necessarily reduc[e] the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached." Id. at 19.

Although the BuckIeyCourtrecognized thatFECA's limitations implicate |important FirstAmendmentconcerns, the Supreme Court's application ofstrict scrutiny did not result in the invalidation of all of FECA's regulations. See id. 19-21. Instead, the BuckIey Court determined that some governmental intrusions on an individual's (or political party's) First Amendment right to make financial contributions to a candidate's campaign were warranted based on the Government's compelling interest to prevent corruption in the election of federal officials. Id. at 20-21, 26-27. The Court reasoned that:

To the extent that large contributions are given to secure a political quid pro quo from current and potential office holders, the integrity of our system of representative democracy is undermined. Although the scope of such pernicious practices can never be reliably

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ascertained, the deeply disturbing examples surfacing after the 1972 election demonstrate that the problem is not an illusory one.

Id. at 26-27.7 The Buckley Court recognized that FECA's contribution limits were Congress' response to the rising levels of corruption in the election of public officials. Id. at 26. Consequently, the Court found that the governmental interest in preserving the integrity of our democratic system was paramount. Id. at 27.

In addition to articulating the compelling governmental interest for FECA's limitations on campaign contributions, the BuckIey Court also articulated the constitutional distinction between FECA's regulations of contributions and expenditures, concluding that courts must apply a greater degree of constitutional scrutiny to FECA's regulations of expenditures. See id. at 23. The Court determined that FECA's regulations on expenditures placed greater restrictions on First Amendment rights because they "represented] substantial rather than merely theoretical restraints on the quantity and diversity of political speech," and consequently, the Court applied a more exacting degree of constitutional scrutiny to expenditure limitations. Id. at 19, 47-48. The Court further distinguished the Government's regulation of contributions from its regulation of expenditures, reasoning that "[b]y contrast with a limitation upon expenditures for political expression, a limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor's ability to engage in free communication." Id. at 20. Accordingly, the Buckley Court recognized that the level of constitutional scrutiny for contribution

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limitations was less than the level of constitution scrutiny applied to limitations on expenditures. See id. at 29, 35, 38.

In further articulating the constitutional distinction between contributions and expenditures, the Court carefully distinguished independent expenditures from those expenditures that are "prearranged or coordinated" with a particular candidate. Id. at 46-47. Following the terminology used in FECA, the Buckley Court considered that for purposes of First Amendment scrutiny, "prearranged or coordinated expenditures" are constitutionally equivalent to contributions. Id. at 46. According to the Court, it followed that coordinated expenditures are subject to the same limitations and scrutiny that apply to contributions. Id. at 47. Although the facts of the challenge and nature of the Court's analysis in Buckley gave the Court no reason to specifically address the level of scrutiny for coordinated expenditures, the Buckley Court implicitly recognized that limitations on coordinated expenditures would be, like contribution limitations, subject to a lower level of constitutional scrutiny than limitations on independent expenditures.

The BuckIey Court's distinction between coordinated expenditures (or contributions) and independent expenditures was reaffirmed in California Medical Ass'n v. FEC, 453 U.S. 182, 195 (1981), when the Court explained that "[t]he typeofexpenditures thatthis Courtin BuckIeyconsidered constitutionally protected were those made independently by a candidate, individual, or group in order to engage directly in political speech." Id. (citation omitted) (emphasis added). In cases thereafter, the Court continued to recognize the distinction between a speaker's First Amendment right to make independent versus coordinated expenditures, and the degree to which lower courts must balance these rights with the Government's compelling interest to prevent corruption in the democratic elections...

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