New Jersey State Chamber of Commerce v. New Jersey Election Law Enforcement Commission

• Decision Date: 01 July 1975
• Citation: 135 N.J.Super. 537,343 A.2d 796
• Parties: NEW JERSEY STATE CHAMBER OF COMMERCE et al., Plaintiffs, v. NEW JERSEY ELECTION LAW ENFORCEMENT COMMISSION et al., Defendants.
• Court: New Jersey Superior Court

Page 537

135 N.J.Super. 537

343 A.2d 796

NEW JERSEY STATE CHAMBER OF COMMERCE et al., Plaintiffs, v. NEW JERSEY ELECTION LAW ENFORCEMENT COMMISSION et al., Defendants.

Superior Court of New Jersey Chancery Division.

July 1, 1975.

Wilentz, Goldman & Spitzer, Perth Amboy, for plaintiffs (Robert N. Wilentz, Perth Amboy, appearing).

Edward J. Farrell, Morristown, for defendant N.J. Election Law Enforcement Commission.

William F. Hyland, Atty. Gen. (Richard M. Conley, Deputy Atty. Gen., appearing).

Fuerst & Singer, Somerville, for defendant-intervenor Common Cause (Kenneth J. Guido, Jr., Washington, D.C., and William S. Singer, Somerville, appearing).

KIMMELMAN, J.S.C.

The constitutionality of certain disclosure and reporting requirements of the New Jersey Campaign Contributions and Expenditures Reporting Act, L.1973, c. 83, § 1 Et seq., effective April 24, 1973, N.J.S.A. 19:44A--1 Et seq., which are imposed upon those who would seek to influence or otherwise affect the legislative process are here under attack. While admitting a valid state interest in the need or desireability for legislators to know the identity of those who would influence them and the amounts of money thereby spent, plaintiffs, numbering among them the State Chamber of Commerce, major trade associations, commercial and labor organizations and other civic groups, nevertheless contend that such provisions are unconstitutional because of facial overbreadth and infringement upon the right of free speech.

Apart from the dollar limitations imposed upon spending by candidates for public office and the disclosure and reporting requirements imposed upon them and upon state, county and municipal committees of recognized political parties, the act further requires that any group of 'two or more persons acting jointly, or any corporation, partnership, or any other incorporated or unincorporated association * * * which seeks to influence the content, introduction, passage or defeat of legislation' (such group being defined and hereinafter referred to as a 'political information organization'), N.J.S.A. 19:44A--3(g), to appoint a treasurer and designate a depository (bank) before receiving any contribution or expending any money to influence the legislative process, N.J.S.A. 19:44A--13; to receive and expend funds only 'through the duly appointed treasurer' N.J.S.A. 19:44A--14; to make and file with the Election Law Enforcement Commission 'a full report * * * of All moneys * * * contributed to it and All expenditures made * * * by it' to seek to influence the legislative process, N.J.S.A. 19:44A--8, 16, and also to 'file with the Election Law Enforcement Commission, not later than March 1 of each year, an annual report of All moneys * * * contributed to it and All expenditures * * * by it, whether or not such expenditures were made * * * to seek to influence' the legislative process. N.J.S.A. 19:44A--8. (All emphases provided).

The act in similar fashion regulates 'political committees,' defined as 'any two or more persons acting jointly, or any corporation, partnership, or other incorporated or unincorporated association which is organized to, or does, aid or promote the nomination, election or defeat of any candidate or candidates for public office, or which is organized to, or does aid or promote the passage or defeat of a public question in any election.' N.J.S.A. 19:44A--3(i), N.J.S.A. 19:44A--10. Political information organizations and political committees under the legislative scheme have overlapping definitions, except with respect to influencing the legislative process, which is confined to the former. Compare § 3(g) with § 3(i).

Individual persons, not acting in concert with any other person or group, may expend personally from their own funds a sum not to exceed $100 exclusive of traveling expenses, to support or defeat a candidate or to aid the passage or defeat of a public question, N.J.S.A. 19:44A--11, or to provide political information on any candidate or public question, or to seek to influence the legislative process. N.J.S.A. 19:44A--14. Expenditures by individuals above the $100 level require reporting to the Election Law Enforcement Commission. Groups of two or more persons acting together are neither allowed the $100 leeway nor the traveling expense exclusion but must comply with the act before engaging in political activity requiring the expenditure of money.

Nowhere in the act is there contained any threshold level of contributions to be received or expenditures to be made by a political information organization or political committee before there is triggered into effect the requirements to appoint a treasurer and a depository, to receive and expend only through such agencies, and to report in detail to the Election Law Enforcement Commission. To those groups the act applies immediately. The only significant monetary exemption is the permission to exclude from the disclosure reports the names of those contributors whose contributions did not exceed $100 during the reporting period, although the aggregate amount of such $100 or lesser contributions must be reported. N.J.S.A. 19:44A--8.

Thus, it would appear from the express statutory wording that any corporation, any partnership and any association of two or more persons who spend as little as $1 to provide political information (press releases, pamphlets, newsletters, advertisements, flyers, etc., N.J.S.A. 19:44A--3(h)), about candidates or any public question, or make any similarly slight and insignificant expenditure for travel, postage stamps, stationery, telephone charges and the like in an attempt to arouse public support or in direct contact with legislators to influence the content, introduction, passage or defeat of legislation, are subject to regulation by the act. As noted, individuals, acting alone, who engage in the identical activity but spend $100 or less are completely exempted. In addition, these groups of two or more persons must, with respect to contributions received by them and presumably with respect to their own funds, put the same in the hands of their designated treasurer who, in turn, must run the same through their designated bank depository before spending the funds on political activity. N.J.S.A. 19:44A--15. Noncompliance with the requirements of the act may result in the assessment of substantial penalties. N.J.S.A. 19:44A--22.

Subsequent to the commencement of this litigation the Election Law Enforcement Commission adopted regulations exempting political information organizations and political committees from the reporting and other requirements of the act if the total amount of their expenditures did not exceed $100 during the applicable calendar year or election period. N.J.A.C. 19:25--1.7, 4.7, 12.1; 6 N.J.R. 371 Et seq. (September 25, 1974). On behalf of defendants it is urged that the adoption of these regulations is within the permissible regulatory scope of the Election Law Enforcement Commission, to implement the provisions of the act. N.J.S.A. 19:44A--6(b). On the other hand, plaintiffs claim that the alleged constitutional infirmities inherent in the act cannot be cured by regulations which clearly contravene the act by purporting to limit the direct and explicit statutory wording contained in § 8, which requires the reporting of All contributions received and All expenditures made. Upon an appeal taken as of right pursuant to R. 2:2--3(a) to review the validity of these regulations promulgated by the Election Law Enforcement Commission, the Appellate Division, by order dated January 8, 1975, remanded plaintiffs' appeal to this court for consideration of the validity of the regulations in the context of the overall challenge to the constitutionality of the act.

The manifest objective of the New Jersey Campaign and Expenditures Reporting Act is to identify and attempt to regulate the significant flow of substantial wealth aimed at affecting the outcome of elections, public questions and the legislative process. No one doubts that money is a prime lubricant of the machinery of politics. For too many years the financial aspect of politics has been shrouded either in a veil of secrecy or a fog of confusion. The average voter is aware of the tremendous cost involved in running even a modest campaign for elective office; however, he cannot help but wonder where the money comes from and more importantly . . . why it comes. So, too, the legislator is entitled to know much the same information with respect to the motivating forces behind the legislative bills coming before him. See the Legislative Activities Disclosure Act, L.1964, c. 207; N.J.S.A. 52:13C--1 Et seq. Surely an informed electorate as well as an informed Legislature constitute the essence of a democratic society. Hence the public policy behind the enactment of the act.

The identity of the source of these funds and the recipients of the same when expended, including the regulatory controls to insure accurate reporting thereof, necessarily involves an incidental effect and burden upon the unfettered freedom of political expression guaranteed by both the First Amendment to the U.S. Constitution and N.J.Const. (1947), Art. 1, par. 18, which provides:

The people have the right to freely assemble together, to consult for the common good, to make known their opinions to their representatives, and to petition for the redress of grievances.

While there appears no intent, express or implied, in the act to control the content of speech, the broad sweep of the act's application would necessarily precondition the right of groups to incur expenditures for political expression or spend money in order to disseminate their views (written words) unless and until the group first appointed a treasurer, designated a bank depository and filed notice of the same with the Election Law Enforcement Commission. N.J.S.A. 19:44A--10; N.J.S.A. 19:44A--13.

Thus, the issue for decision in ...