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W.Va. SC sets arguments in campaign finance case

By Jessica M. Karmasek | Aug 10, 2012





CHARLESTON, W.Va. (Legal Newsline) - The West Virginia Supreme Court of Appeals will hear arguments in a case over the constitutionality of the state's Public Campaign Financing Pilot Program next month.

According to an order filed Friday, the case is scheduled for consideration and oral argument at 10 a.m. Sept. 4.

In its order, the Court also acknowledged the receipt of a motion to intervene filed by Charleston attorney Michael Callaghan.

Callaghan, the plaintiff in a federal case filed last month over the pilot program and former chairman of the state Democratic Party, filed his motion with the state's high court Thursday.

In it, he notes that no party in the state case will stand in defense of his constitutional rights.

"Accordingly, the representation of Callaghan's interests by existing parties is not only inadequate, it is non-existent," wrote his attorney, Anthony Majestro of Charleston firm Powell and Majestro PLLC. Majestro also serves as state Supreme Court candidate Tish Chafin's campaign attorney.

Callaghan's motion comes a week after Supreme Court candidate Allen Loughry filed his own motion to intervene in the federal lawsuit over the pilot program, which was established in 2010 for candidates seeking a seat on the state's high court.

Loughry, a Republican, is the only candidate in this year's Court race to opt into the program, which state lawmakers passed in an attempt to reduce the influence of special interest money.

In the federal lawsuit, Callaghan claims that the pilot program violates the First and Fourteenth amendments of the U.S. Constitution by "unduly impinging upon protected political speech and association" as set forth in the U.S. Supreme Court's holding in Arizona Free Enterprise Club's Freedom Club PAC v. Bennett.

Specifically, he argues that the matching funds provision of the act is unconstitutional.

West Virginia Secretary of State Natalie Tennant, who serves as a member of the State Election Commission, along with Gary A. Collias, William N. Renzelli and Robert Rupp, were named as defendants in Callaghan's suit.

In an order last week, Judge Joseph R. Goodwin of the U.S. District Court for the Southern District of West Virginia granted Loughry's motion to intervene.

Meanwhile, Loughry sued in the state Supreme Court, seeking to force the SEC to follow the existing laws and provide his campaign with the additional funding.

In Loughry's 26-page petition for writ of mandamus, filed with the state's high court July 30, he argues that the SEC "failed to carry out the unambiguous duty" imposed under the pilot program.

"Through this failure, the commission violated the statutory command of W.Va. Code 3-12-11(e), which requires the commission to authorize the release of funds once a determination has been made that the conditions for a release of supplemental funds have been met," his petition states.

"Due to the commission's failure to follow the law and perform this ministerial duty, the commission also failed to perform its duty, working with the offices of the State Treasurer and State Auditor, to cause the funds to be disbursed to Petitioner Loughry's campaign."

The state Supreme Court has ordered that responses to Callaghan's motion to intervene be filed with it by 5 p.m. Tuesday.

If the motion is granted, the Court said it may order "additional briefing."

Also Thursday, the respondents in the state case -- Tennant, Collias, Renzelli, Rupp, State Auditor Glen Gainer III and State Treasurer John Perdue -- filed responses to Loughry's petition for writ of mandamus.

In their response, Tennant and the SEC said they agree with Loughry's petition "insofar as it seeks a declaration that the 'matching funds' provisions of the pilot program are constitutional."

"Matching funds provide a funding source for the publicly-funded candidate to meet the challenge of his opponent's traditionally-funded campaign, leading to a public perception that the winner of the race was chosen on merit rather than money -- a perception necessary to the integrity of judicial campaigns but not to 'political' races," Managing Deputy Attorney General Silas B. Taylor wrote for the secretary and the SEC.

In their 13-page filing, Tennant and the SEC also argue that they were "acting responsibly" when they declined to provide Loughry's campaign public financing money.

"Upon being advised by the Attorney General that the Bennett decision abrogated the matching funds provision of the pilot program, Respondents could, in good faith, refuse to enforce them pending the outcome of litigation thereon," they wrote.

"Indeed, this is the exact means by which test cases are often initiated to determine issues of public importance that might not otherwise be litigated until it was too late to undo the damage."

Following the U.S. Supreme Court's 2011 decision in Bennett, the SEC sought an opinion by West Virginia Attorney General Darrell McGraw regarding the constitutionality of the matching funds provision.

In his July 28, 2011 response, the attorney general concluded that the provision could not survive the strict scrutiny analysis mandated by Bennett.

Soon after, Tennant announced she intended to follow McGraw's opinion and not implement the matching funds provision.

However, in June, Loughry appeared at a regularly scheduled meeting of the commission and requested that it take a position on whether it would fully implement the matching funds provision. The commission refused to take a position.

A day later, a disclosure provision was implemented through the promulgation of a reporting form.

The non-participating candidates were notified by email of the new form and the requirement that it be filed by July 6.

The form provided to the candidates by the secretary of state's election division required disclosure only when candidates expended or committed $420,000, the trigger for the additional payments.

Last month, current Justice Robin Jean Davis filed the form provided to the non-participating candidates. Her filing showed expenditures of $494,471.

Then an emergency meeting of the commission was held.

The commission voted to acknowledge that Davis had expended sufficient sums to trigger the matching funds provisions under the act. It then proceeded to vote on a motion to authorize the release of matching funds to Loughry.

The motion failed on a tie vote of the four members.

In their response Thursday, Tennant and the SEC also noted that Loughry's request for attorneys fees is "inappropriate relief given the novelty of the issue and the good faith effort of these Respondents to perform their duties in a manner consistent with the constitutional rights of all parties concerned."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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