McDonald v. N.Y.C Campaign Fin. Bd.

• Decision Date: 01 May 2013
• Citation: 965 N.Y.S.2d 811,2013 N.Y. Slip Op. 23153,40 Misc.3d 826
• Parties: George McDONALD and McDonald 2013, Plaintiffs, v. NEW YORK CITY CAMPAIGN FINANCE BOARD and the City of New York, Defendants.
• Court: New York Supreme Court

40 Misc.3d 826

965 N.Y.S.2d 811

2013 N.Y. Slip Op. 23153

George McDONALD and McDonald 2013, Plaintiffs,

v.NEW YORK CITY CAMPAIGN FINANCE BOARD and the City of New York, Defendants.

Supreme Court, New York County, New York.

May 1, 2013.

Genova, Burns, Giantomasi & Webster by Laurence D. Laufer, Esq., Angelo J. Genova, Esq., Alexandra M. Hill, Esq., for Plaintiffs.

New York City Law Dept. Office of Corp. Counsel by Jonathan Pines, Esq., for Defendants.

KATHRYN E. FREED, J.

Plaintiffs seek a declaratory judgment and move for a preliminary injunction, enjoining defendants from enforcing section *3–719(2)(b) of the Administrative Code of the City of New York, which purports to extend the voluntary contribution limits and restrictions applicable to candidates who have elected to receive public matching funds pursuant to the New York City Campaign Finance Act, to “non-participating” candidates who are therefore, ineligible for those public matching funds.

Defendants cross-move pursuant to *3211(a)(7) of the Civil Practice Law and Rules, to dismiss the Verified Complaint on the grounds that it fails to state a cause of action. Additionally, the Attorney General of the State of New York (hereinafter “AG”) moves for leave to file and argue a brief in the capacity of “amicus curiae” in opposition to plaintiffs' motion and in support of defendants' cross motion to dismiss.

Plaintiff George McDonald is a candidate for the office of Mayor in the 2013 elections for the City of New York. Plaintiff McDonald 2013, is the political committee that George McDonald has authorized to receive contributions and make expenditures for him in the aforementioned 2013 elections, both primary and general (“plaintiff”). Defendant City of New York (the “City”) is a municipal corporation pursuant to the laws of the State of New York. Defendant New York City Campaign Finance Board (“CFB”), is the agency of the City that administers the Campaign Finance Act (“CFA”).

Oral argument in the within matter was heard before this Court on February 25, 2013. It should be noted that the AG's motion to proceed in the capacity of amicus curiae was granted on consent, at that time. It should also be noted that in rendering the instant written decision, the Court finds it both instructive and necessary to explore the legislative history relevant to this case.

State Legislative History:

The Legislature enacted the first iteration of what is now Article 14 of the New York State Election law, in the New York State Campaigns, Elections and Procedure Law of 1974. That law set forth a regulatoryscheme for campaign expenditure limits, reporting requirements and restricted contribution limits applicable to all primary, general and special elections for state and local public offices held in the State of New York. Additionally, it established the State Board of Elections (“SBOE”) to administer and enforce these laws.

Election Law *479 of the Laws of 1974, specifically addressed contribution limits. This section was subsequently repealed and later reenacted in the Laws of 1976, Chapter 577. The language of *479, as passed in 1976, is now reflected in the language of *14–114 of the current Election Law, although it has undergone substantial legislative changes.

In 1992, the State Legislature passed “The Election Reform Act of 1992,” which amended areas of the Election Law that related to ballot access, the political calendar, voter registration, contribution limits and other election issues. Section § 14–114 was also amended. The previous formula for contributions sometimes allowed for large contributions for both State-wide elections and also for New York City, city-wide offices. The Legislature amended section § 14–114, setting a ceiling on contribution limits to $12,000.00 in primaries and $25,000.00 in general elections, for state-wide offices, and also the New York City positions of Mayor, Comptroller and City Council President, (now Public Advocate).

The current section § 14–114 sets contribution and receipt limitations on candidates for all nominations and elections for publicoffices. These limitations vary pursuant to formulas calibrated on the basis of party enrollment in primary elections and on voter registration for general elections.

It should be noted that no special ceilings were set for either New York City Council or Borough President elections, other than the general state-wide restrictions of $50,000.00 for public offices, or a lesser amount based on the number of voters for said election multiplied by $.05.

Other calculations depend on whether the contributor is a close relative of the candidate. Additionally, contribution limitations, both maximums and minimums, are imposed for State and local elections, including State Senate and State Assembly. Re-calculations are required quadrennially based on the cost of living ( see Election Law *14–114(1)(a)(b) and (c)). Funds of the candidate and the candidate's spouse spent on the campaign, are not considered contributions and thus, are not subject to contribution limits ( see Election Law * *14–100 (9)(3) and 14–114(8)).

City Legislative History:

In 1988, the New York City Council first established a system of public financing for City elections, known as the City's “Campaign Finance Act.” Said Act was adopted as Local Law No. 8 (1988) and codified at Administrative Code * *3–701, et seq. The CFA set up a voluntary system whereby participating candidates agreed to limit contributions from individual contributors in return for which they would receive matching public funds. Additionally, candidates agreed to file various information concerning those contributors with the CFB. This Act matched dollar for dollar, the first $1,000.00 for participating candidates. However, it did not impose limits on non-participating candidates.

The CFA has undergone several subsequent amendments. In 1998, participating candidates were prohibited from accepting contributions from corporations ( see Admin. Code *3–703(1)(1)). In 2004, the City Council passed Local Law No. 60 which, for the first time, directed non-participating candidates to abide by the same contribution limitations as those imposed on participating candidates, pursuant to Admin. Code *3–703(1)(f). Additionally, the Councilextended the prohibition against corporate contributions to non-participating candidates ( see Admin. Code *3–703(1)(1)).

In 2007, the Council extended the prohibition on contributions to include limited liability companies and partnerships, and imposed reduced limitations on contributors “doing businesswith the City” ( see Local Laws Nos. 34 and 67(2007)). These restrictions were extended to also include non-participating candidates ( see Admin. Code *3–719(2)(b)). The current contribution limits for both primary and general elections combined, per contributor, are $4,950.00 for Mayor, Public Advocate or Comptroller,$3,850.00 for Borough President and $2,750.00 for Council Members. Currently, participating candidates receive public funds at a six-to-one matching rate for the first $175.00 per allowable contributor.

Position of the Parties:Plaintiff's Position:

Plaintiff acknowledges that the City can set limits on contributions on publically funded candidates, since said candidates have agreed to such limitations in exchange for receiving public funds. However, he argues that the City cannot set limitations on contributions for non-participating candidates who have not agreed to any such limitations, and who are governed solely by the State Election Law, Article 14, which preempts the City's contribution limitations.

Plaintiff argues, (and it is generally accepted law), that the State can indicate its intent to preempt an area of law either by express statutory language, thereby clearly indicating that it has preempted the field, or by implication. In the instant matter, both sides agree that no specific preemption language is involved. However, preemption can be inferred, if the State establishes a “comprehensive and detailed regulatory scheme” ( DJL Rest. Corp. v. City of New York, 96 N.Y.2d 91, 95, 725 N.Y.S.2d 622, 749 N.E.2d 186 [2001];see also Consolidated Edison Co. of N.Y. v. Town of Red Hook, 60 N.Y.2d 99, 105, 468 N.Y.S.2d 596, 456 N.E.2d 487 [1983] ). Plaintiff argues that such preemption must be found to exist in the instant case because Article 14 “sets forth such a comprehensive and detailed regulatory scheme of mandatory contribution limits applicable in all primary, general and special elections for state and local public offices” (Plaintiff's Mem. of Law, p. 5).

Proof of such details include the fact that Article 14 contribution limits are calibrated according to the number of party enrollees in primary elections, and voter registration in general elections, with different formula utilized, depending on statewide and non-statewide elections ( see Election Law *14–114). Article 14 established numerous categories of contributors and contained specific exemptions for certain transactions along with cumulative limitations. It also established detailed public disclosure with documentation and contribution form requirements, and even specifically defined the term “contribution” ( see Election Law * *14–100 to –130 (Art. 14)).

Plaintiff argues that this “well thought out scheme” indicates the State's clear intention to continue to apply these limits to all candidates, absent a voluntarily acceptance of a more restrictive scheme as a trade-off for public funds. Plaintiff further argues that it cannot be disputed that by including such comprehensive language in Article 14, the State absolutely intended to preempt the field.

The State Election Reform Act of 1992, Chapter 79, changed the previously existing formula for State and local elections by setting new floors and ceilings on contribution limits. It additionally authorized on-going cost of living adjustments for future elections. The State formula was...