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Schickel v. Dilger

United States District Court, E.D. Kentucky, Northern Division, Covington

June 6, 2017

SEN. JOHN SHICKEL, ET AL PLAINTIFFS
v.
CRAIG C. DILGER, ET AL DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          William O. Bertelsman, United States District Judge

         This is a civil rights action in which Plaintiffs allege that Kentucky restrictions on campaign finance and lobbyists violate their First Amendment right to free speech and association, as well as their Fourteenth Amendment right to Equal Protection.

         This matter is before the Court on separate motions for summary judgment on behalf of Defendant Kentucky Registry of Election Finance (Doc. 62) and Defendant Kentucky Legislative Ethics Commission (Doc. 64), and corresponding cross motions for a preliminary injunction, permanent injunction, and summary judgment by Plaintiffs (Docs. 63, 65).

         Having reviewed this matter, and having previously heard oral argument from the parties, the Court now issues this Memorandum Opinion and Order.

         Factual and Procedural Background

         A. The Parties

         Plaintiff John Schickel (“Schickel”) is the incumbent State Senator for the 11th Senatorial District in Kentucky. Plaintiff David Watson (“Watson”) is a Libertarian candidate who ran, unsuccessfully, for the 6th House District in 2016.[1] Plaintiff Ken Moellman (“Moellman”) is a candidate for the office of Pendleton County Judge/Executive in 2018.

         Plaintiffs allege they desire to engage in activities that are currently prohibited by funding restrictions found in certain campaign finance statutes, as well as ethics statutes that apply to legislators, legislative candidates, their spouses, lobbyists, and the employers of lobbyists. (Doc. 65-1 at 1-3).

         Defendants are members of the Kentucky Registry of Election Finance (“KREF”) and the Kentucky Legislative Ethics Commission (“KLEC”). Plaintiffs allege that Defendants, who are sued in their official capacities, are responsible for the enforcement of the challenged statutes because they can bring civil or administrative enforcement actions, receive citizen complaints regarding alleged violations, and refer enforcement matters for criminal prosecution. (Id.).

         B. The Statutes

         Plaintiffs challenge two categories of statutes: campaign finance restrictions and lobbying restrictions.

         The campaign finance restrictions: (1) limit campaign contributions from individual donors to $1, 000 per election; (2) limit campaign contributions from state executive committees or caucus campaign committees to $5, 000 per election; (3) limit the amount a candidate may loan to his own campaign to $10, 000 per election; (4) and prohibit campaign contributions from a permanent committee which, in the aggregate, exceed 50% of a candidate's total contributions, or $10, 000, whichever is greater.

         On March 27, 2017, new legislation that made substantial changes to the campaign finance restrictions at issue was signed into law by the Governor of Kentucky. The revisions to KRS § 121.150, found in 2017 Senate Bill 75, are taken into account in the Court's analysis.

         The lobbying restrictions, which only Schickel and Watson challenge: (1) prohibit a legislator or his spouse from accepting “anything of value” from a legislative agent[2] or his employer; (2) prohibit a member of the General Assembly, a candidate for the General Assembly, or his campaign committee, from accepting a campaign contribution from a legislative agent at any time, or from a lobbyist's employer during a regular session of the General Assembly; (3) prohibit lobbyists and their employers from offering anything of value to legislators, candidates, or their spouse or child, or making campaign contributions to legislators, candidates, or campaign committees; and (4) prohibit lobbyists from soliciting contributions for candidates or legislators.

         C. Procedural History

         Plaintiffs filed their complaint on August 24, 2015, alleging the unconstitutionality of the challenged statutes, seeking either a temporary restraining order or preliminary injunction to enjoin enforcement of the statutes. (Doc. 1). Defendants moved to dismiss for lack of standing. (Doc. 17). This Court denied the motion to dismiss. (Doc. 25). Defendants now move for summary judgment. (Doc. 62, 64). Plaintiffs also move for summary judgment, in addition to seeking preliminary and permanent injunctions. (Doc 63, 65).

         Analysis

         A. Appropriate Levels of Scrutiny

          For claims relating to campaign finance restrictions, the Supreme Court applies strict scrutiny to limitations on candidate speech (i.e., campaign expenditures), and mid-level scrutiny for donor speech (i.e., campaign contributions), requiring that the limit be “closely drawn to avoid unnecessary abridgement of associational freedoms.” McCutcheon v. Fed. Election Comm'n, __ U.S.__, 134 S.Ct. 1434, 1437 (2014).

         For claims relating to lobbying restrictions, laws which may curtail the freedom of association are subject to strict scrutiny. Nat'l Ass'n for Advancement of Colored People v. State of Ala. ex rel. Patterson, 357 U.S. 449, 461 (1958); Fed. Election Comm'n v. Nat'l Right to Work Comm., 459 U.S. 197, 206 (1982).

         Further, the Sixth Circuit applies strict scrutiny to burdens on “core political speech, ” requiring that a burdensome provision be narrowly tailored to serve the overriding state interest. Gables v. Patton, 142 F.3d 940, 945 (6th Cir. 1998).

         B. Campaign Finance Restrictions

         1. $1, 000 per donor contribution limit - KRS § 121.150(6)

         Previously, KRS § 121.150(6) stated:

No candidate, slate of candidates, campaign committee, political issues committee, nor anyone acting on their behalf, shall accept a contribution of more than one thousand dollars ($1, 000) from any person, permanent committee, or contributing organization in any one (1) election. No person, permanent committee, or contributing organization shall contribute more than one thousand dollars ($1, 000) to any one (1) candidate, campaign committee, political issues committee, nor anyone acting on their behalf, in any one (1) election.

         Prior to the revisions enacted by Senate Bill 75, KRS § 121.150(6) prevented a candidate from receiving a contribution greater than $1, 000 from any single person, permanent committee, or organization within an election cycle.

         Plaintiffs argued that the $1, 000 limitation to each candidate per donor placed an undue burden on candidates for office because the buying power of $1, 000 is not the same today as it was in 1996 when the limit was first introduced. Plaintiffs asserted that the limit was not closely drawn to avoid abridgment of First Amendment rights because the amount was so low that it prevented candidates “from mounting effective campaigns.” Senate Bill 75 has raised the $1, 000 limit to $2, 000, and it requires that the limit be indexed for inflation on a bi-annual basis. This revision thus directly addresses Plaintiffs' concern of the limit's insufficiency and its potential restraint on speech.

         Therefore, the Court will deny as moot all motions for summary judgment with respect to KRS § 121.150(6).

         2. $5, 000 caucus campaign committee contribution limit - KRS 121.150(11) & 121.015(3)(b)

         Currently, KRS § 121.150(11) states:

(a) No person shall contribute more than five thousand dollars ($5, 000) to the state executive committee of a political party in any one (1) year. The contribution limit in this paragraph shall not apply to a contribution designated exclusively for a state executive committee's building fund account established under Section 4 of this Act.
(b) No person shall contribute more than five thousand dollars ($5, 000) to a subdivision or affiliate of a state political party in any one (1) calendar year.
(c) No person shall contribute more than five thousand dollars ($5, 000) to a caucus campaign committee in any one (1) year.

KRS § 121.150(11) allows individual donors to give up to $5, 000 per year to either a state political party's executive committee or a caucus campaign committee.

         Plaintiffs assert that this provision constitutes viewpoint discrimination in violation of the Equal Protection Clause by allowing individuals to give larger contributions to the Republican and Democratic parties, the only political parties in Kentucky that maintain such committees. Plaintiffs believe this creates a grave disadvantage for third party candidates such as Watson.

         The government commits viewpoint discrimination when it gives preference to certain speakers over others. Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 312 (2010). Here, KRS § 121.150(11) allows two specific political parties to receive the highest contributions: executive committees of political parties and campaign caucus committees. Subsection 121.015(3)(b) defines “caucus campaign committee” narrowly to include only four specific groups:

“Caucus campaign committee, ” which means members of one (1) of the following caucus groups who receive contributions and make expenditures to support or oppose one (1) or more specific candidates or slates of candidates for nomination or election, or a committee:
1. House Democratic caucus campaign committee;
2. House Republican caucus campaign committee;
3. Senate Democratic caucus campaign committee; and
4. Senate Republican caucus campaign committee.

KRS § 121.015(3)(b).

         The statute thus does not allow for the same contributions to other party caucus campaign committees that may be created in the future.[3] A newly created Senate Libertarian caucus campaign committee, for example, would not be eligible for the $5, 000 contribution caps, and instead could only receive up to $2, 000 from each donor if it were to qualify as a permanent committee. See KRS § 121.150(10).

         Equal protection challenges to election finance restrictions under the Fourteenth Amendment must survive “exacting scrutiny.” Buckley v. Valeo, 424 U.S. 1, 44-45 (1976). “The restriction can be sustained only if it furthers a vital governmental interest that is achieved by a means that does not unfairly or unnecessarily burden either a minority party's or an individual candidate's equally important interest in the continued availability of political opportunity.” Id. at 94 (internal quotations and citations omitted).

         Defendants argue that the purpose of caucus campaign committees is to “separate the legislative caucus from control by a political party's executive committee.” (Doc. 67-1 at 21). While this argument may explain the purpose of caucus campaign committees, it does not explain the exclusionary definition found in subsection (3)(b). The legislature could have defined “caucus campaign committees” in a broader way that would allow its application to committees affiliated with political groups other than the Republicans or Democrats.

         Defendants further argue that nothing prevents either of the major party caucus campaign committees from contributing to minor party candidates. Though true, it remains that subsection (3)(b) on its face treats members of major and minor parties differently. Defendants have not demonstrated that this differential treatment is supported by a vital government interest.

         Therefore, KRS § 121.015(3)(b) is unconstitutional on its face.[4]

         Therefore, regarding KRS § 121.150(11) and KRS § 121.015(3)(b), the Court will grant in part and deny in part both Defendants' and Plaintiffs' motions for summary judgment in line with the analysis above.

         3. $10, 000 limit on self-funding campaign loans - KRS § 121.150(13)

         Previously, KRS § 121.150(13) stated:

No candidates running as a slate for the offices of Governor and Lieutenant Governor shall make combined total personal loans to their committee in excess of fifty thousand dollars ($50, 000) in any one (1) election. No candidate for any other statewide elected state office shall lend to his committee any amount in excess of twenty-five thousand dollars ($25, 000) in any one (1) election. In campaigning for all other offices, no candidate shall lend to his committee more than ten thousand dollars ($10, 000) in any one (1) election.

KRS § 121.150(13) imposed limitations on the amount of money a candidate could loan their own campaign committee, capped at various amounts depending on the office. Id. Both parties recognize that in 2004 the Sixth Circuit found this section of the statute to be wholly unconstitutional, Anderson v. Spear, 356 F.3d 651, 673 (6th Cir. 2004), although Plaintiffs expressed concern that Defendant KREF may arbitrarily enforce the statute regardless.

         Senate Bill 75 has eliminated KRS § 121.150(13). Therefore, the Court will deny as moot all motions for summary judgment with respect to that provision.

         4. $10, 000 or 50% limit on permanent/executive/caucus campaign committee receipts - KRS 121.150(23)

         Previously, KRS § 121.150(23)(a)-(c) stated:

(a) A candidate or a slate of candidates for elective public office shall not accept contributions from permanent committees which, in the aggregate, exceed fifty percent (50%) of the total contributions accepted by the candidate or a slate of candidates in any one (1) election or ten thousand dollars ($10, 000) in any one (1) election, whichever is the greater amount. The percentage of the total contributions or dollar amounts of contributions accepted by a candidate or a slate of candidates in an election that is accepted from permanent committees shall be calculated as of the day of each election. Funds in a candidate's or a slate of candidates' campaign account which are carried forward from one (1) election to another shall not be considered in calculating the acceptable percentage or dollar amount of contributions which may be accepted from permanent committees for the election for which the funds are carried forward. A candidate or a slate of candidates may, without penalty, contribute funds to his campaign account not later than sixty (60) days following the election so as not to exceed the permitted percentage or dollar amount of contributions which may be accepted from permanent committees or the candidate or a slate of candidates may, not later than sixty (60) days after the end of the election, refund any excess permanent committee contributions on a pro rata basis to the permanent committees whose contributions are accepted after the aggregate limit has been reached.
(b) The provisions of paragraph (a) of this subsection regarding the receipt of aggregate contributions from permanent committees in any one (1) election shall also apply separately to the receipt of aggregate contributions from executive committees of any county, ...

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