W.Va. SC: Matching funds provision of public financing program unconstitutional

By Jessica M. Karmasek | Sep 7, 2012


CHARLESTON, W.Va. (Legal Newsline) - The West Virginia Supreme Court of Appeals on Friday deemed the matching funds provisions of the state's Public Campaign Financing Pilot Program unconstitutional.

In doing so, the Court denied state Supreme Court candidate Allen Loughry's writ seeking to force the State Election Commission to provide his campaign with matching funds.

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

After the ruling, Loughry said his team is considering its options.

We are still reviewing the decision to evaluate our options going forward, but we want to thank the court for its careful consideration of this important issue," he said Friday afternoon in a statement. "We respect the Court's decision in this matter, although we are disappointed that the program that was passed overwhelmingly by the Legislature and signed by the Governor cannot continue.

"While it is not the resolution I had hoped for, I am encouraged that the high court recognized the unique circumstances of this case and is allowing me to begin immediately raising money for my campaign."

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

"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."

In its 5-0 ruling, the state Supreme Court explained that the question is not only whether the SEC has a statutory duty to authorize the release of the matching funds to Loughry but whether the funds provisions violate the free speech clause of the First Amendment.

The Court concluded that the U.S. Supreme Court's holding in Arizona Free Enterprise Club's Freedom Club PAC v. Bennett -- the ruling Charleston attorney Michael Callaghan points to in a separate but related federal lawsuit over the pilot program -- applies to all elections to public office.

"The Supreme Court gave no indication in Bennett that judicial elections would be excepted from its holding. Nor are we persuaded that a majority of the U.S. Supreme Court is inclined to adopt a less rigorous standard than strict scrutiny to First Amendment issues involving political speech in judicial elections," Chief Justice Menis Ketchum wrote for the Court.

Justices Robin Jean Davis, Brent Benjamin and Margaret Workman disqualified themselves from the case.

Circuit Judges Christopher C. Wilkes. James P. Mazzone and Judge J. Lewis Marks Jr. were appointed as the justices' replacements.

"While we are sympathetic to petitioner Loughry's position and agree with his assertion that judicial elections raise a number of compelling interests, we are bound to apply the Supreme Court's interpretation of the United States Constitution."

The Court noted that it finds nothing in Bennett, nor in the relevant cases leading up to or decided after the case -- i.e. Davis v. Federal Election Commission, Caperton v. A.T. Massey Coal Co. Inc., Citizens United v. Federal Election Commission, and American Tradition Partnership Inc. v. Bullock -- that supports Loughry's position that the U.S. Supreme Court has "recognized or is inclined to find a judicial-election exception to its political speech jurisprudence generally or to its matching funds analysis specifically."

"Having determined that the Supreme Court did not recognize a judicial-election exception to its matching funds analysis in Bennett, and considering the similarities between Arizona's matching funds provisions and those set forth in our pilot program, we conclude that the pilot program's matching funds provisions place a substantial burden on the privately financed candidates' First Amendment free speech rights," Ketchum wrote.

Simply put, the pilot program's matching funds provisions cannot survive a strict scrutiny challenge because -- even though they address a compelling interest, the Court noted -- they are not "narrowly tailored."

"The Legislature had less restrictive remedies available to address the pilot program's goals that would not burden free speech," Ketchum explained in the 27-page opinion.

"The Legislature could have increased the amount of the initial disbursement to publicly financed candidates. This would have removed the need for government matching funds triggered by privately financed candidates' spending."

Moreover, the Court said, the matching funds provisions of the pilot program do not accomplish the Legislature's goal of protecting the "impartiality" and "integrity" of the judiciary, and strengthening the public's confidence.

In the current election, the Court further noted, three of the four candidates for the Court are being privately financed -- incumbent Davis, a Democrat; attorney Tish Chafin, also a Democrat; and circuit judge John Yoder, a Republican.

Providing matching funds to just one publicly financed candidate -- in this case, Loughry -- does not "ameliorate the detrimental effects of increasingly large amounts of money being raised and spent to influence the outcome of elections," the Court explained.

"The matching funds do not eliminate the appearance that the three candidates who accept campaign contributions may be biased or partial toward their contributors," Ketchum wrote.

"As the Independent Judicial Commission observed, '[a]s campaign expenditures rise, so too does the threat of bias, and certainly the public perception of bias, as candidates face mounting
pressure to accept donations from lawyers and parties that may appear before them once they take a seat on the bench.'

The chief justice continued, "The government matching funds serve no other purpose than 'leveling the playing field' between the one publicly funded candidate and the three privately financed candidates."

The nation's high court has repeatedly rejected the argument that government has a compelling state interest to do so.

In its ruling Friday, the Court also ruled that Loughry may retain the initial $350,000 disbursed under the pilot program.

"There is no constitutional problem with West Virginia providing a fixed contribution amount to publicly financed candidates. However, political speech rights are violated when West Virginia provides matching funds to publicly financed candidates based on the amount spent by privately financed candidates," Ketchum wrote.

Noting that the case presents a "unique set of circumstances" -- a publicly financed candidate has detrimentally relied on matching funds provisions that are found to be unconstitutional two months before the election -- the Court said Loughry may now seek private campaign contributions.

"The campaign financing project has never been about my campaign, but about the ability of the state to hold fair judicial elections," Loughry said after ruling. "My opponent, a millionaire, (Chafin) would rather continue the practice of electing only candidates that can buy a seat on the state's high court.

"I strongly believe that we can win in November. A recent statewide poll indicates that we are in a statistical dead heat for the second seat on the court. Today's ruling will allow me to raise additional funds to match the $400,000 our campaign already has in the bank and we plan an aggressive effort over the next two months."

A spokesman for Secretary of State Natalie Tennant, who is a member of the SEC, said Tennant will follow the law.

"Remember that we're only talking about the matching funds provision," Jake Glance said Friday. "And don't forget that Secretary Tennant is only one member of the SEC. She was one of the two members who voted to give Allen the money, and she was the first person to contribute to the public financing plan. She believes in it.

"Now that the matching funds section has been declared unconstitutional, the SEC is going to follow the law."

Chris Dickerson contributed to this report.

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