Jacobus v. Alaska

• Decision Date: 12 August 2003
• Docket Number: No. 01-35666.,01-35666.
• Citation: Jacobus v. Alaska, 338 F.3d 1095 (9th Cir. 2003)
• Parties: Kenneth P. JACOBUS; Kenneth P. Jacobus, P.C.; Wayne Anthony Ross; Ross & Miner P.C.; Scott A. Kohlhaas, Plaintiffs-Appellees, v. State of ALASKA; State of Alaska Public Offices Commission, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

338 F.3d 1095

Kenneth P. JACOBUS; Kenneth P. Jacobus, P.C.; Wayne Anthony Ross; Ross & Miner P.C.; Scott A. Kohlhaas, Plaintiffs-Appellees, v. State of ALASKA; State of Alaska Public Offices Commission, Defendants-Appellants.

No. 01-35666.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 4, 2002 — Seattle, Washington.

Filed August 12, 2003.

COPYRIGHT MATERIAL OMITTED

Martin T. Schultz, Assistant Attorney General for the State of Alaska, Anchorage, Alaska, for the defendants-appellants.

Kenneth P. Jacobus, Anchorage, Alaska, for the plaintiffs-appellees.

Benjamin L. Ginsberg, Patton Boggs LLP, Washington, D.C., for amicus curiae Republican National Committee.

Glenn J. Moramarco, Brennan Center for Justice at NYU School of Law, New York City, New York, for amici curiae Senators John McCain and Russell Feingold and Representatives Christopher Shays and Martin Meehan.

Brenda Wright, National Voting Rights Institute, Boston, Massachusetts, for amicus curiae National Voting Rights Institute.

Appeal from the United States District Court for the District of Alaska; James K. Singleton, Chief Judge, Presiding. D.C. No. CV-97-00272-JKS.

Before: Harlington WOOD, JR.,^* Dorothy W. NELSON, and Richard A. PAEZ, Circuit Judges.

OPINION

PAEZ, Circuit Judge:

In 1996, the Alaska legislature enacted sweeping reforms to its campaign finance system. Corruption and the appearance of corruption had led to low voter turnout and widespread disillusionment with the electoral system. Determined to close loopholes left open by previous attempts to establish meaningful reform, the new act restricted not only contributions to candidates, but also contributions to political parties, including "soft money." Unsurprisingly, these new restrictions have been hotly contested in both state and federal courts.

Although the term "soft money" is often used interchangeably with the phrase "not for the purpose of influencing the election or nomination of a candidate," as we hold today, political parties frequently spend soft money precisely to influence the election or nomination of a candidate. This practice creates a linguistic conundrum in which contributions that are not for the purpose of influencing elections are in fact used to influence elections. In discussing soft money throughout this opinion, we treat it as all money contributed to a political party not expressly earmarked to influence the nomination or election of a candidate.¹

Party activists Kenneth P. Jacobus, Wayne Ross, and Scott A. Kohlhaas filed suit under 42 U.S.C. § 1983 to challenge the constitutionality of the new limitations on contributions to political parties. The district court ruled that Alaska's $5,000 limit on individual contributions and its ban on corporate and labor union contributions were unconstitutional insofar as they applied to contributions that were not for the purpose of influencing the nomination or election of particular candidates (soft money). The district court also held unconstitutional Alaska's $5,000 limit on the value of professional services that individuals might volunteer to political parties. Alaska appeals the district court's grant of summary judgment against it.

We hold that these issues are still justiciable, despite recent changes in Alaska law, and we reverse the rulings of the district court holding Alaska's limitations on soft money unconstitutional. As the Supreme Court's recent opinion in FEC v. Colorado Republican Federal Campaign Committee (Colorado Republican II), 533 U.S. 431, 121 S.Ct. 2351, 150 L.Ed.2d 461 (2001), suggests, soft money presents a danger of corruption and the appearance of corruption because political parties trade influence and access to candidates for soft money dollars, and candidates trade influence and access for the indirect benefits that they receive from soft money contributions to their party. In addition, candidates' heavy involvement in soft money fundraising and the creation of "tallying"² and other methods for tracking soft money contributions secured by particular candidates indicate that soft money is indeed used to circumvent hard money contribution limits. Because the limitations on soft money contributions imposed here reflect Alaska's concern about these same dangers, we uphold the limits on soft money contributions.

We affirm, however, the district court's ruling striking down as unconstitutional Alaska's limit on the value of volunteer professional services that an individual may donate to a political party. By including donations of professional services in the definition of contribution that is subjected to the $5,000 limit, Alaska restricted First Amendment association rights in a way that was different in kind, not just different in degree, from the contribution limits that the Supreme Court found constitutional in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam). Although this provision does not operate as an absolute bar to an individual's association with a party through volunteering, we nonetheless hold that Alaska failed to demonstrate that there is an actual danger or appearance of corruption if contributions of volunteer professional services go unrestricted.

I. BACKGROUND

Prior to 1996, Alaska campaign finance law consisted of reporting requirements and limitations on certain expenditures and on direct contributions to candidates. 1974 Alaska Sess. Laws 76 § 1 codified at former Alaska Stat. § 15.13.010 et seq. Notwithstanding these restrictions, by 1996 there was considerable concern regarding actual and apparent corruption in Alaska politics, and, as concluded by the Josephson Institute in a report commissioned by the Alaska State Senate, "the level of trust and confidence in the integrity of the legislature is disturbingly low." As a result, in 1996 the Alaska legislature enacted a comprehensive reform of Alaska's campaign finance laws, Senate Bill 191, 1996 Alaska Sess. Laws 48 ("the Act"), declaring, "It is the purpose of this Act to substantially revise Alaska's election campaign finance laws in order to restore the public's trust in the electoral process and to foster good government." 1996 Alaska Sess. Laws 48 § 1(b).

As originally enacted, the Act created an interlocking system designed to restrict the influence of money on politics and prevent easy evasion of the barriers set up by the reforms. First, it banned expenditures advocating the support or defeat of a candidate by corporations, unions, and other business associations.³ Secondly, it restricted contributions not only to candidates but also to political parties, political action committees ("PACs"), and other entities, banning contributions from some sources altogether⁴ and placing limitations on the size of contributions from other sources.⁵ The Act also regulated a number of more minor aspects of campaign finance, restricting the timing of contributions;⁶ preventing candidates from putting campaign funds to certain uses;⁷ and erecting various penalties for violations of campaign finance law.⁸

Most significant for purposes of this appeal were the Act's restrictions on donations to political parties, which limited contributions from individuals to not more than $5,000 per year, Alaska Stat. § 15.13.070(b)(2) (1998) (amended 2002), and banned contributions by corporations, business associations, and unions, Alaska Stat. § 15.13.074(f) (1998).⁹ The Act did not explicitly condition the limitation or prohibition on contributions to political parties upon the use to which the political party intended to put the contribution. Additionally, the Act also limited the extent to which individuals could volunteer professional services for which they would ordinarily be paid, treating such volunteer activity as a contribution subject to the limitation on the monetary value of contributions. Alaska Stat. § 15.13.400(3) (1998) (amended 2002).¹⁰

In 1997, major aspects of the Act were challenged in Alaska state court, eventually reaching the Alaska Supreme Court. In State v. Alaska Civil Liberties Union (Ak-CLU), the Alaska Supreme Court issued a compendious opinion interpreting the Act. 978 P.2d 597 (Alaska 1999). The court found most provisions of the Act to be constitutional, upholding both the Act's ban on corporate expenditures relating to candidate elections, id. at 608-10, and its limits on individual contributions and prohibition on corporate contributions to parties and candidates, id. at 614, 620-25. The issue of soft money contributions was not raised before the court.

This suit involves a much narrower challenge, focusing on provisions of the Act that regulate contributions to political parties. The plaintiffs in this action are lawyers and party activists who regularly volunteer their services to specific political parties, and law firms wholly owned by the individual plaintiffs (jointly "Jacobus" or "Plaintiffs"). Jacobus brought this suit against the State of Alaska and the Alaska Public Offices Commission (together "Alaska"), challenging two aspects of the Act. First, he claimed that the Act did not limit, or, in the alternative, that it could not constitutionally limit, either individual or corporate soft money contributions to political parties. Secondly, Jacobus challenged the inclusion of volunteer professional services in the definition of contribution, which subjected such volunteer services to the $5,000 limit on individual contributions and the prohibition on corporate contributions.

Jacobus initiated this suit in 1997, but the district court stayed the case pending the outcome of AkCLU.¹¹ The stay was lifted in 2000, after the United States Supreme Court denied certiorari in AkCLU. 528 U.S. 1153, 120 S.Ct. 1156, 145 L.Ed.2d 1069 (2000). Thereafter, both sides moved for summary judgment.

The district court granted summary judgment for Jacobus. In its first order, issued April 10, 2001, the district court found that Alaska's...