Citizens to Save California v. Fppc

• Decision Date: 08 December 2006
• Docket Number: No. C049642.,C049642.
• Citation: 145 Cal.App.4th 736,52 Cal.Rptr.3d 17
• Court: California Court of Appeals Court of Appeals
• Parties: CITIZENS TO SAVE CALIFORNIA et al., Plaintiffs and Respondents, v. CALIFORNIA FAIR POLITICAL PRACTICES COMMISSION, Defendant and Appellant; Arnold Schwarzenegger, as Governor, etc., et al., Interveners and Respondent.

52 Cal.Rptr.3d 17

145 Cal.App.4th 736

CITIZENS TO SAVE CALIFORNIA et al., Plaintiffs and Respondents, v. CALIFORNIA FAIR POLITICAL PRACTICES COMMISSION, Defendant and Appellant Arnold Schwarzenegger, as Governor, etc., et al., Interveners and Respondent.

No. C049642.

Court of Appeal, Third District.

December 8, 2006.

Bill Lockyer, Attorney General, Louis R. Mauro, Senior Assistant Attorney General, Christopher E. Krueger, Supervising Deputy Attorney General, and Douglas J. Woods, Deputy Attorney General; Luisa Menchaca, Fair Political Practices Commission General Counsel and Lawrence T. Woodlock, Senior Commission Counsel for Defendant and Appellant.

Paul S. Ryan and J. Gerald Hebert for The Campaign Legal Center, Inc., as Amicus Curiae on behalf of Defendant and Appellant.

Nielsen, Merksamer, Parrinello, Mueller & Naylor, James R. Parrinello, and Christopher E. Skinnell for Plaintiffs and Respondents.

Bell, McAndrews & Hiltachk, Charles H. Bell, Jr., Thomas W. Hiltachk, and Jimmie E. Johnson Interveners and Respondents.

RAYE, J.

Convinced that the absence of limits on contributions to ballot measure committees controlled by candidates permitted candidates to circumvent statutory restrictions on campaign contributions, the California Fair Political Practices Commission (FPPC) promulgated a regulation limiting contributions to such committees. (Cal. Code Regs., tit. 2, § 18530.9 (hereafter regulation 18530.9).) In a legal challenge to the regulation brought by a campaign committee and a candidate, the trial court concluded plaintiffs would likely prevail on their claims that the regulation is unconstitutional and exceeded the FPPC's statutory authority. Because it believed plaintiffs would otherwise suffer irreparable harm by virtue of the regulation's chilling effect on the exercise of First Amendment rights, the trial court granted plaintiffs' request for a preliminary injunction pending trial.

Whatever the wisdom of the FPPC's effort to plug loopholes in California's campaign contribution regulatory scheme, we agree with the trial court's determination that the regulation conflicts with multiple provisions of the Political Reform Act of 1974 (PRA; Gov.Code, § 81000 et seq.)¹ and thereby exceeds the FPPC's authority. Our conclusion that the FPPC overstepped its authority renders a consideration of plaintiffs' constitutional claims unnecessary. Accordingly, we shall affirm the order granting a preliminary injunction.

BACKGROUND

The PRA regulates various aspects of the political process, including campaign contributions, the disclosure of financial information relating to public officials and their campaigns, and the activities of lobbyists. (§ 81002.) The FPPC administers the PRA (§ 83111) and has authority to promulgate regulations that are consistent with and further the purposes of the PRA (§ 83112). Violations of the PRA are punishable by criminal and civil penalties. (§§ 91000, 91005.5.)

The PRA may be amended only by a statute furthering its purposes and passed by a two-thirds vote of the Legislature, or by a statute approved by the electorate. (§ 81012.) In 2000 the electorate passed Proposition 34, the Campaign Contribution and Voluntary Expenditure Limits Without Taxpayer Financing Amendments to the Political Reform Act of 1974, which approved various amendments to the-PRA. (See Stats.2000, ch. 102 (Sen. Bill 1223), § 18, eff. July 7, 2000; Prop. 34, as approved by voters, Gen. Elec. (Nov. 7, 2000).)²

Section 85301 imposes specified limits upon the amount of money individuals may contribute to candidates for elective state office, candidates for statewide elective office, and candidates for Governor.³ Section 85302 similarly imposes specified limits upon contributions made by small contributor committees.⁴ These statutes encompass contributions to the candidate's controlled election or reelection committee, which contributions are required to be deposited in one campaign contribution account. (§ 85201.)

Section 85303 limits the amount of contributions made by individuals to political party committees, and to any committees other than political party committees, for the purpose of making contributions to candidates for elective state office. However, except as provided in section 85310 (concerning payments for communications that clearly identify a candidate for elective state office but do not expressly advocate the election or defeat of the candidate), there are no limitations upon a person's contributions to a committee or political party committee "provided the contributions are used for purposes other than making contributions to candidates for elective state office." (§ 85303, subd. (c).)

In eschewing limits on contributions to ballot measure committees, section 85303, subdivision (c) comports with Citizens Against Rent Control v. Berkeley (1981) 454 U.S. 290,102 S.Ct. 434, 70 L.Ed.2d 492 (CARC). There, the United States Supreme Court held that although it is constitutional to limit contributions to candidates and their committees, an ordinance limiting contributions to ballot measure committees unconstitutionally interfered with First Amendment freedoms of speech and association and was not justified by the governmental interest in preventing special interest groups from corrupting the initiative process. (Id. at pp. 293, 297-300, 102 S.Ct. 434.) CARC observed, "`Referenda are held on issues, not candidates for public office. The risk of corruption perceived in cases involving candidate elections [citations omitted] simply is not present in a popular vote on a public issue....' [Citation.]" (Id. at p. 298, 102 S.Ct. 434.) "To place a Spartan limit—or indeed any limit—on individuals wishing to band together to advance their views on a ballot measure, while placing none on individuals acting alone, is clearly a restraint on the right of association." (Id. at p. 296, 102 S.Ct. 434.)

CARC did not expressly address whether contributions to candidate-controlled ballot measure committees could be construed as contributions to the candidates who controlled the committees and hence be limited without violating the Constitution.

Initially, the FPPC interpreted CARC, supra, 454 U.S. 290, 102 S.Ct. 434 as precluding limits on contributions to candidate-controlled ballot measure committees and opined that the candidate contribution limits of the PRA did not apply to such committees because the funds are "used for purposes other than making contributions to candidates for elective state office." It changed its position in 2004, however, following the recall of Governor Gray Davis. Based on concerns that candidates were using ballot measure committees to promote their candidacies and evade the campaign contribution limits of the PRA, the FPPC adopted regulation 18530.9, which limits contributions to candidate-controlled ballot measure committees.

FPPC regulation 18530.9 provides, in relevant part: "(b) Notwithstanding Government Code sections [sic] 85310, subdivision (c), the contribution limits of Government Code sections 85301 and 85302 apply to any committee controlled by a candidate for elective state office that is established for the purpose of supporting or opposing state or local ballot measures. The applicable limit is that which applied to the controlling candidate at the time the ballot measure committee was formed or became controlled by that candidate."⁵

A "committee," within the meaning of the regulation, is "any person or combination of persons who directly or indirectly does any of the following: [¶] (a) Receives contributions totaling one thousand dollars ($1,000) or more in a calendar year. [¶] (b) Makes independent expenditures totaling one thousand dollars ($1,000) or more in a calendar year; or [H] (c) Makes contributions totaling ten thousand dollars ($10,000) or more in a calendar year to or at the behest of candidates or committees." (§ 82013.)

"`Controlled committee' means a committee that is controlled directly or indirectly by a candidate ... or that acts jointly with a candidate, [or] controlled committee ... in connection with the making of expenditures. A candidate ... controls a committee if he or she, his or her agent, or any other committee he or she controls has a significant influence on the actions or decisions of the committee." (§ 82016, subd. (a).) According to the FPPC, a "significant influence" includes being a voting member of a committee's leadership body or formulating campaign strategy.

"`Candidate' means an individual who is listed on the-ballot or who has qualified to have write-in votes on his or her behalf counted by election officials, for nomination for or election to any elective office, or who receives a contribution or makes an expenditure or gives his or her consent for any other person to receive a contribution or make an expenditure with a view to bringing about his or her nomination or election to any elective office, whether or not the specific elective office for which he or she will seek nomination or election is known at the time the contribution is received or the expenditure is made and whether or not he or she has announced his or her candidacy or filed a declaration of candidacy at such time...." (§ 82007.) According to the FPPC, "officeholders are considered candidates, regardless of whether they are termed-out or have candidate committees open."

Under the regulation, a ballot measure committee controlled by a candidate for Governor may receive larger contributions than one controlled by a candidate for any other statewide elective office, which in turn can receive larger contributions than one controlled by a candidate for elective state office delineated by district. (§§ 85301, 85302; see fns. 2 & 3, ante, p. 20.) Ballot measure committees that are not controlled by candidates are not subject to these contribution limits. (Reg. 18530.9, subd. (a); § 85303, subd. (c).)

Subsequent to the FPPC's promulgation of...