Service Employees v. Fair Political Practices, CIV. S-89-433 LKK.

• Decision Date: 26 September 1990
• Docket Number: No. CIV. S-89-433 LKK.,CIV. S-89-433 LKK.
• Citation: 747 F. Supp. 580
• Court: U.S. District Court — Eastern District of California
• Parties: SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO, CLC; et al., Plaintiffs, v. FAIR POLITICAL PRACTICES COMMISSION, et al., Defendants. California Democratic Party, Plaintiff-Intervenor, and Quentin L. Kopp and Ross Johnson, Defendants-Intervenors.

747 F. Supp. 580

SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO, CLC; et al., Plaintiffs, v. FAIR POLITICAL PRACTICES COMMISSION, et al., Defendants California Democratic Party, Plaintiff-Intervenor and Quentin L. Kopp and Ross Johnson, Defendants-Intervenors.

No. CIV. S-89-433 LKK.

United States District Court, E.D. California.

September 26, 1990.

Joseph Remcho, Remcho, Johansen & Purcell, San Francisco, Cal., for plaintiffs.

Joseph Garcia, Scott Hallabrin, Fair Political Practices Com'n, Sacramento, Cal., for defendants.

Robert E. Darby, Calvin House, Fulbright & Jaworski, Los Angeles, Cal., for plaintiffs in intervention.

Quentin L. Kopp, Kopp & Di Franco, San Francisco, Cal., James Ross Johnson, Sacramento, Cal., for defendants in intervention.

John Mueller, Nielsen, Merksamer, Hodgson, Parrinello & Mueller, Mill Valley, Cal., for amicus California Republican Party.

SECOND AMENDED CONCLUSIONS OF LAW

KARLTON, District Judge.

In this lawsuit, the original plaintiffs, a number of elected state officials, various campaign committees, labor organizations, and a contributor to political campaigns (sometimes hereinafter referred to as "the plaintiffs"), and the plaintiffs in intervention, the Democratic Party (hereinafter referred to as "the Democratic Party" or "the Party"), challenge certain provisions of an initiative adopted by the people of the State of California, known as Proposition 73. After trial, the court took the matter under submission.

The court has agreed to make findings as to all issues of fact which any party believes may be required to ultimately dispose of this matter. The court has set them out in a separate document entitled "Findings of Fact" because it consists of 208 discrete findings. Below, the court articulates its disposition of the case, and will advert to various of those findings as required by this opinion.

I begin with a description of the salient provisions of Proposition 73 as they pertain to this litigation.

I THE STATUTORY SCHEME

Proposition 73 amended the existing California Political Reform Act by adding a new Chapter 5 to Title 9 of the California Government Code.¹ The proposition applies to all campaigns for election to state or local office. See sections 82007, 82023, 82024. Although section 91005 of the Government Code imposes civil liability for violation of Proposition 73, the statute also makes criminal the knowing or willful violation of its provisions. Section 91000.

Proposition 73 seeks to regulate state elections in a variety of ways. First, it establishes limitations on campaign contributions that may be made or accepted during any fiscal year, defined as the period between July 1 and June 30. Section 85102(a). Under its provisions:

1. A "person"² may contribute up to $1,000 to a candidate (including all of that candidate's controlled committees) each fiscal year, section 85301(a).

2. A "political committee"³ many contribute up to $2,500 each fiscal year. Section 85303(a).

3. A "broad-based political committee"⁴ or political party may contribute up to $5,000 each fiscal year. Section 85303(b).

The measure also limits to $2,500 per fiscal year contributions from a "person" to a political committee, broad-based political committee, or political party for the purpose of the entities contributing to candidates. Section 85302.

The same contribution limits noted above apply to "special elections." See section 85305(c). The special election limits are imposed for each special election cycle. See sections 85305(a) & (b). A special election cycle is defined as the period beginning with the day a vacancy in office is announced, and ending the day of the special election. Section 85305(b)(1). Proposition 73 provides for the possibility of a runoff in a special election by applying the same limits to a "special runoff election cycle." Sections 85305(b)(2), (c). Contributions permitted during a special election cycle are separate from and in addition to any contribution made during the fiscal year. Accordingly, although the normal fiscal year limit is $1,000, a person can actually contribute up to $3,000 to a candidate in a fiscal year, if the candidate is engaged in a special election and runoff.

The initiative also limits candidates to raising funds for particular offices. It provides that a candidate, before soliciting or receiving contributions, must file with the Fair Political Practices Commission "a statement signed under the penalty of perjury of intention to be a candidate for a specific office." Section 85200. Upon filing the statement, the candidate must establish a single campaign bank account, section 85201(a), and all contributions must be deposited therein and "shall be deemed to be held in trust for expenses associated with the election of the candidate to the specific office" sought. Section 85202(b).

Finally, Proposition 73 prohibits the transfer of funds between candidates and controlled committees of a single candidate. Section 85304.

II STATE POLITICAL RIGHTS AND THE FIRST AMENDMENT

Before there was a federal constitution the original 13 states had won the right to internal self-government by force of arms in the Revolutionary War. The creation of a federal government did not modify that right. See Minor v. Happersett, 88 U.S. 162, 175-76 (21 Wall.) (1875), 22 L.Ed. 627, 631 ("All the States had governments when the Constitution was adopted. In all, the people participated to some extent, through their representatives elected in the manner specifically provided. These governments the Constitution did not change."). Moreover, although the federal constitution guarantees to each state a republican form of government, Art. IV, § 4, that provision has been interpreted to assure the states that they would have the right to pass their own laws and form their own governments. See Duncan v. McCall, 139 U.S. 449, 11 S.Ct. 573, 35 L.Ed. 219 (1891).⁵

Despite the broad right of self-government enjoyed by the states, their conduct in that regard is not unreviewable. When the states banded together to form the United States, they limited the federal government's power to restrain various liberties by adopting as the first ten amendments to the Constitution the Bill of Rights. Those limitations were made applicable to the states themselves by the Fourteenth Amendment. See, e.g., Stromberg v. California, 283 U.S. 359, 368, 51 S.Ct. 532, 535, 75 L.Ed. 1117 (1931) (due process clause of Fourteenth Amendment embraces right of free speech). Accordingly,

when a State exercises power wholly within the domain of state interest, it is insulated from federal judicial review. But such insulation is not carried over when state power is used as an instrument for circumventing a federally protected right.

Gomillion v. Lightfoot, 364 U.S. 339, 347, 81 S.Ct. 125, 130, 5 L.Ed.2d 110 (1960). See also Baker v. Carr, 369 U.S. 186, 229, 82 S.Ct. 691, 716, 7 L.Ed.2d 663 (1962) ("When challenges to state action respecting matters of `the administration of the affairs of the State and the officers through whom they are conducted' have rested on claims of constitutional deprivation which are amenable to judicial correction, the Supreme Court has acted upon its view of the merits of the claim."). Thus, a state's broad power to regulate elections "does not extinguish the state's responsibility to observe the limits established by the First Amendment rights of the state's citizens." Eu v. San Francisco County Democratic Central Committee, 489 U.S. 214, ___, 109 S.Ct. 1013, 1019, 103 L.Ed.2d 271, 281 (1989) (quoting Tashjian v. Republican Party of Connecticut, 479 U.S. 208, 217, 107 S.Ct. 544, 550, 93 L.Ed.2d 514 (1986)).

Although the defendant-intervenors make much of the fact that the statutes considered here were adopted directly through the initiative process, that happenstance provides the statute with no special insulation from review for asserted constitutional infirmity. Rather, the Supreme Court has held that "it is irrelevant that the voters ... enacted a statute, because the voters may no more violate the Constitution by enacting a ballot measure than a legislative body may do so by enacting legislation." Citizens Against Rent Control v. Berkeley, 454 U.S. 290, 295, 102 S.Ct. 434, 437, 70 L.Ed.2d 492 (1981).

In sum, the issues tendered by plaintiffs' challenge to Proposition 73 requires recognition of both the state's right of self-government and the overarching principles embodied in the Bill of Rights. Below I explain the relevant legal tests for resolving issues raised by this litigation.

As I have previously explained, to assess the constitutionality of a state election law when challenged on the grounds that it directly regulates rights protected by the First Amendment, a sequential analysis is required. It is first necessary to examine whether "the provisions in issue impinge upon rights protected by the First Amendment." Service Employees Int'l Union v. FPPC, 721 F.Supp. 1172, 1175 (E.D.Cal.1989) (hereinafter "SEIU"). If so, the court must then determine "if there is a sufficiently strong governmental interest served by the statute's restriction on them and whether the section is narrowly tailored to the evil which may be legitimately regulated." Id. at 1176 (quoting FEC v. National Conservative PAC, 470 U.S. 480, 496, 105 S.Ct. 1459, 1468, 84 L.Ed.2d 455 (1985)); see also Eu v. San Francisco County Democratic Central Committee, 489 U.S. 214, ___, 109 S.Ct. 1013, 1019-20, 103 L.Ed.2d 271, 283 (1989).

Where state statutes do not directly restrict political speech or associational rights, but do limit plaintiffs' participation in the political process, as compared to other participants, the litigation has been characterized as being a hybrid First Amendment/Equal Protection question. See Anderson v. Celebrezze, 460 U.S. 780, 786 n. 7, 103 S.Ct. 1564, 1569 n. 7, 75 L.Ed.2d 547 (1983) ("In this case, we base our conclusions directly on the...