Rosenstiel v. Rodriguez

• Decision Date: 11 December 1996
• Docket Number: No. 95-1885,95-1885
• Citation: 101 F.3d 1544
• Parties: Patrick ROSENSTIEL; Christopher Longley, Plaintiffs-Appellants, v. Carolyn RODRIGUEZ, in her capacity as Chair of the Ethical Practices Board, or her successor, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1544

101 F.3d 1544

65 USLW 2407

Patrick ROSENSTIEL; Christopher Longley, Plaintiffs-Appellants, v. Carolyn RODRIGUEZ, in her capacity as Chair of the Ethical

Practices Board, or her successor, Defendant-Appellee.

No. 95-1885.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 15, 1995.

Decided Dec. 11, 1996.

Harlan M. Goulett, Minneapolis, MN, argued, for appellants.

Richard S. Slowes, St. Paul, MN , argued, for appellee.

Before HANSEN, LAY and MURPHY, Circuit Judges.

HANSEN, Circuit Judge.

Patrick Rosenstiel and Christopher Longley appeal a final judgment of the district court ¹ upholding the constitutionality of Minnesota's campaign finance statutes. Rosenstiel and Longley seek a declaration that several provisions of the law are unconstitutional because they allegedly coerce a candidate into participating in Minnesota's public campaign financing program, thereby burdening that candidate's First Amendment rights. They further maintain that the provisions are constitutionally infirm because they do not survive strict scrutiny. Finally, they contend that these provisions impermissibly discriminate against challengers. After conducting a careful review, including an amendment to the statute which the Minnesota legislature enacted after we heard oral arguments, we affirm.

I.

The State of Minnesota (State) has enacted a campaign financing system which permits candidates for certain elected state offices to receive a public subsidy in exchange for the candidate's agreement to adhere to specified limits on campaign expenditures. Minn.Stat.Ann. §§ 10A.25 (10)(a), 10A.322(1)(a) (West Supp.1997). A candidate must sign an agreement to be bound to the applicable campaign expenditure limits in order to receive the public subsidy. Id. § 10A.322(1)(a). The participating candidate must also independently raise a certain amount ($35,000 for governor down to $1,500 for state representative) in contributions in order to be eligible for the public subsidy. Id. § 10A.323. A Minnesota taxpayer can claim a full refund of up to $50 per year (or $100 for a couple filing jointly) for a campaign contribution made to a publicly funded candidate; however, no refund is permitted for a campaign contribution made to a candidate who is not publicly funded. Id. § 290.06(23) (hereinafter referred to as "contribution refund"). ²

The expenditure limitations for each public office to which the State's campaign financing scheme applies are delineated in section 10A.25(2)(a), and range from $1,626,691 for a gubernatorial candidate down to $20,335 for a candidate for state representative. The amount of public subsidy available to a candidate who is running for an office to which the State's financing scheme applies is determined by way of formula. Id. § 10A.31(5). However, the amount of public subsidy the candidate receives may not exceed 50 percent of the expenditure limits applicable to the office which the candidate seeks. Id. § 10A.31(7). A candidate who has agreed to adhere to the expenditure limits but later accepts campaign contributions or makes campaign expenditures in excess of those limits is subject to a civil fine of up to four times the amount by which the contribution or expenditure exceeded the limit. Id. § 10A.28(1).

Prior to an amendment in April 1996, the above expenditure limits were only applicable to a candidate if the candidate's major-party opponent likewise agreed to be bound by the expenditure limits. Id. § 10A.25(10) (West Supp.1996) (repealed). Thus, when a publicly financed candidate was opposed by a nonparticipating major party candidate, the publicly financed candidate was no longer required to adhere to the specified expenditure limits for his office but was still eligible to receive the public subsidy. Id. § 10A.25(10)(b)(i)-(ii) (West Supp.1996) (repealed) (hereinafter referred to as "expenditure limitation waiver").

In 1994, Appellants Rosenstiel and Longley (Appellants) were candidates for different seats in the Minnesota House of Representatives. Both enrolled in the State's public campaign funding program. They later filed this action on August 19, 1994, alleging that the expenditure limitation waiver and the contribution refund violated their First Amendment rights. Both claimed by way of affidavit that they believed they could privately raise campaign funds in excess of the law's expenditure limits which they had agreed to observe. They subsequently moved for a preliminary injunction, seeking to enjoin the enforcement of these provisions. The district court denied injunctive relief but noted that the Appellants had proffered sufficient evidence to demonstrate that they were likely to prevail on their claim that the contribution refund was unconstitutional.

The Appellants later moved for summary judgment. The district court held that the expenditure limitation waiver and the contribution refund passed constitutional muster, denied Appellants' motion for summary judgment, and accordingly dismissed their complaint. ³ Rosenstiel and Longley appealed. ⁴

After this case was submitted to us, an amendment passed by the Minnesota legislature altering the operation of the expenditure limitation waiver became effective. See Act of April 11, 1996, ch. 459 (S.F. 840), amending Minn.Stat.Ann. § 10A.25(10) (West Supp.1996). Under the amendment, a candidate participating in the State's public financing of campaigns is not released from the expenditure limitation simply by virtue of being opposed by a nonparticipating, major-party candidate. Rather, when a participating candidate squares off against any nonparticipating candidate, the participant is released from the expenditure limit when the opponent receives contributions or makes expenditures equalling 20 percent of the applicable limit prior to 10 days before the primary election, and contributions or expenditures equalling 50 percent of the applicable limit thereafter. Minn.Stat.Ann. § 10A.25(10)(a)(1)-(2) (West Supp.1997).

The amendment thus makes several changes to the mechanics of the expenditure limitation waiver. First, the expenditure limitation waiver comes into play when any nonparticipating opponent engages in the triggering event, i.e., receives contributions or makes expenditures in excess of the specified threshold, whereas before, the triggering act had to be done by a nonparticipating major-party opponent. Second, and more importantly, the triggering event itself occurs when any nonparticipating opponent reaches the specified threshold in campaign contributions or expenditures. Previously, the triggering event was simply the major party opponent's decision not to participate in the State's public campaign financing. In other words, the amendment eschews an automatic waiver to participating candidates at the moment their major party nonparticipating opponent declines to enroll, in favor of a wait-and-see approach based on actual contributions to or expenditures made by any nonparticipating opponent.

At the direction of this court, the parties submitted letter briefs concerning the effect, if any, the amendment had on the issues presented in this case, and whether remand to the district court for further proceedings was necessary. Both sides strenuously contend that a remand is unnecessary. Concerning the merits of the amendment, the Appellants assail its validity primarily on the same grounds they contested the former language, i.e, that it coerces candidates to participate, and it is not narrowly tailored to further a compelling governmental interest. The State, on the other hand, contends that, even assuming the prior expenditure limitation waiver coerced compliance, the amended statute is not coercive because the nonparticipating candidate solely determines whether to trigger the expenditure limitation waiver for the publicly-financed candidate by receiving contributions or making expenditures in excess of the applicable threshold. Alternatively, the State maintains that, like the former language, the amendment is narrowly tailored to serve a compelling governmental interest.

II.

It is clear that we must review the judgment appealed from in the light of the Minnesota statute as it now stands, not as it stood when the judgment below was entered. Fusari v. Steinberg, 419 U.S. 379, 387, 95 S.Ct. 533, 538-39, 42 L.Ed.2d 521 (1975); Diffenderfer v. Central Baptist Church, 404 U.S. 412, 414, 92 S.Ct. 574, 575-76, 30 L.Ed.2d 567 (1972). Whether the amendment so changes the nature of the dispute before us so as to make the appeal moot is a close question.

The Supreme Court has held that where a new statute "is sufficiently similar to the repealed [statute] that it is permissible to say that the challenged conduct continues" the controversy is not mooted by the change, and a federal court continues to have jurisdiction. Northeastern Fla. Chapter v. City of Jacksonville, 508 U.S. 656, 662 n. 3, 113 S.Ct. 2297, 2301 n. 3, 124 L.Ed.2d 586 (1993). Further, if the new statute disadvantages the complainants in the same fundamental way the repealed statute did, the amendment does not divest the court of the power to decide the case. Id. at 662, 113 S.Ct. at 2301. Here, the amendment relates only to one subdivision of the whole larger statutory scheme assailed by the Appellants' complaint. It repealed only one of the five specific sections plaintiffs attacked and replaced it with language that still permits a waiver of the expenditure limitations while remaining eligible for the public subsidy. Essentially the amendment changes the triggering event necessary to bring the spending limits waiver into play and, accordingly, the point in the campaign when the spending limits are removed from a participating candidate. These changes are not insignificant at least as far as the actual operation of the statute is concerned. On the other hand, with respect to its effect, the amended statute still impairs the Appellants in the very same...