Ariz. Free Enter. Club's Freedom Club PAC v. Bennett

564 U.S. 721

131 S.Ct. 2806

180 L.Ed.2d 664

ARIZONA FREE ENTERPRISE CLUB'S FREEDOM CLUB PAC, et al., Petitioners,

v.Ken BENNETT, in his Official Capacity as Arizona Secretary of State, et al.

John McComish, et al., Petitioners,

v.Ken Bennett, in his Official Capacity as Arizona Secretary of State, et al.

Nos. 10–238

10–239.

Supreme Court of the United States

Argued March 28, 2011.

Decided June 27, 2011.

William R. Maurer, Seattle, WA, for Petitioners.

Bradley S. Phillips, Los Angeles, CA, for Respondents.

William M. Jay, for United States as amicus curiae, by special leave of the Court, supporting the Respondents.

William R. Maurer, Jeanette M. Petersen, Seattle, WA, William H. Mellor, Steven M. Simpson, Arlington, VA, Timothy D. Keller, Paul V. Avelar, for Petitioners Arizona Free Enterprise Club's Freedom Club PAC, et al.

Clint Bolick, Nicholas C. Dranias, Phoenix, AZ, for Petitioners.

Bradley S. Phillips, Grant A. Davis-Denny, Elisabeth J. Neubauer, Michael J. Mongan, Munger, Tolles & Olson LLP, Los Angeles, CA, Monica Youn, Mark Ladov, Mimi Marziani, Elizabeth Kennedy, New York, NY, Timothy M. Hogan, Phoenix, AZ, for Respondent Clean Elections Institute, Inc.

Eric J. Bistrow, Chief Deputy Attorney General, Mary R. O'Grady, Solicitor General, James E. Barton II, Thomas Collins, Assistant Attorneys General, Phoenix, Arizona, for Respondents Arizona Secretary of State Ken Bennett and Members of the Arizona Citizens Clean Elections Commission.

Chief Justice ROBERTS delivered the opinion of the Court.

Under Arizona law, candidates for state office who accept public financing can receive additional money from the State in direct response to the campaign activities of privately financed candidates and independent expenditure groups. Once a set spending limit is exceeded, a publicly financed candidate receives roughly one dollar for every dollar spent by an opposing privately financed candidate. The publicly financed candidate also receives roughly one dollar for every dollar spent by independent expenditure groups to support the privately financed candidate, or to oppose the publicly financed candidate. We hold that Arizona's matching funds scheme substantially burdens protected political speech without serving a compelling state interest and therefore violates the First Amendment.

I

A

The Arizona Citizens Clean Elections Act, passed by initiative in 1998, created a voluntary public financing system to fund the primary and general election campaigns of candidates for state office. See Ariz.Rev.Stat. Ann. § 16–940 et seq . (West 2006 and Supp.2010). All eligible candidates for Governor, secretary of state, attorney general, treasurer, superintendent of public instruction, the corporation commission, mine inspector, and the state legislature (both the House and Senate) may opt to receive public funding. § 16–950(D) (West Supp.2010). Eligibility is contingent on the collection of a specified number of five-dollar contributions from Arizona voters, §§ 16–946(B) (West 2006), 16–950 (West Supp.2010),¹ and the acceptance of certain campaign restrictions and obligations. Publicly funded candidates must agree, among other things, to limit their expenditure of personal funds to $500, § 16–941(A)(2) (West Supp.2010); participate in at least one public debate, § 16–956(A)(2); adhere to an overall expenditure cap, § 16–941(A); and return all unspent public moneys to the State, § 16–953.

In exchange for accepting these conditions, participating candidates are granted public funds to conduct their campaigns.² In many cases, this initial allotment may be the whole of the State's financial backing of a publicly funded candidate. But when certain conditions are met, publicly funded candidates are granted additional "equalizing" or matching funds. §§ 16–952(A), (B), and (C)(4)-(5) (providing for "[e]qual funding of candidates").

Matching funds are available in both primary and general elections. In a primary, matching funds are triggered when a privately financed candidate's expenditures, combined with the expenditures of independent groups made in support of the privately financed candidate or in opposition to a publicly financed candidate, exceed the primary election allotment of state funds to the publicly financed candidate. §§ 16–952(A), (C). During the general election, matching funds are triggered when the amount of money a privately financed candidate receives in contributions, combined with the expenditures of independent groups made in support of the privately financed candidate or in opposition to a publicly financed candidate, exceed the general election allotment of state funds to the publicly financed candidate. § 16–952(B). A privately financed candidate's expenditures of his personal funds are counted as contributions for purposes of calculating matching funds during a general election. See ibid. ; Citizens Clean Elections Commission, Ariz. Admin. Rule R2–20–113(B)(1)(f) (Sept.2009).

Once matching funds are triggered, each additional dollar that a privately financed candidate spends during the primary results in one dollar in additional state funding to his publicly financed opponent (less a 6% reduction meant to account for fundraising expenses). § 16–952(A). During a general election, every dollar that a candidate receives in contributions—which includes any money of his own that a candidate spends on his campaign—results in roughly one dollar in additional state funding to his publicly financed opponent. In an election where a privately funded candidate faces multiple publicly financed candidates, one dollar raised or spent by the privately financed candidate results in an almost one dollar increase in public funding to each of the publicly financed candidates.

Once the public financing cap is exceeded, additional expenditures by independent groups can result in dollar-for-dollar matching funds as well. Spending by independent groups on behalf of a privately funded candidate, or in opposition to a publicly funded candidate, results in matching funds. § 16–952(C). Independent expenditures made in support of a publicly financed candidate can result in matching funds for other publicly financed candidates in a race. Ibid . The matching funds provision is not activated, however, when independent expenditures are made in opposition to a privately financed candidate. Matching funds top out at two times the initial authorized grant of public funding to the publicly financed candidate. § 16–952(E).

Under Arizona law, a privately financed candidate may raise and spend unlimited funds, subject to state-imposed contribution limits and disclosure requirements. Contributions to candidates for statewide office are limited to $840 per contributor per election cycle and contributions to legislative candidates are limited to $410 per contributor per election cycle. See §§ 16–905(A)(1), 16–941(B)(1); Ariz. Dept. of State, Office of the Secretary of State, 2009–2010 Contribution Limits (rev.Aug. 14, 2009), http:// www.azsos. gov / election / 2010 / Info / Campaign_Contribution _Limits_2010.htm (all Internet materials as visited June 24, 2011, and available in Clerk of Court's case file).

An example may help clarify how the Arizona matching funds provision operates. Arizona is divided into 30 districts for purposes of electing members to the State's House of Representatives. Each district elects two representatives to the House biannually. In the last general election, the number of candidates competing for the two available seats in each district ranged from two to seven. See State of Arizona Official Canvass, 2010 General Election Report (compiled and issued by the Arizona secretary of state). Arizona's Fourth District had three candidates for its two available House seats. Two of those candidates opted to accept public funding; one candidate chose to operate his campaign with private funds.

In that election, if the total funds contributed to the privately funded candidate, added to that candidate's expenditure of personal funds and the expenditures of supportive independent groups, exceeded $21,479—the allocation of public funds for the general election in a contested State House race—the matching funds provision would be triggered. See Citizens Clean Elections Commission, Participating Candidate Guide 2010 Election Cycle 30 (Aug. 10, 2010). At that point, a number of different political activities could result in the distribution of matching funds. For example:

• If the privately funded candidate spent $1,000 of his own money to conduct a direct mailing, each of his publicly funded opponents would receive $940 ($1,000 less the 6% offset).

• If the privately funded candidate held a fundraiser that generated $1,000 in contributions, each of his publicly funded opponents would receive $940.

• If an independent expenditure group spent $1,000 on a brochure expressing its support for the privately financed candidate, each of the publicly financed candidates would receive $940 directly.

• If an independent expenditure group spent $1,000 on a brochure opposing one of the publicly financed candidates, but saying nothing about the privately financed candidate, the publicly financed candidates would receive $940 directly.

• If an independent expenditure group spent $1,000 on a brochure supporting one of the publicly financed candidates, the other publicly financed candidate would receive $940 directly, but the privately financed candidate would receive nothing.

• If an independent expenditure group spent $1,000 on a brochure opposing the privately financed candidate, no matching funds would be issued.

A publicly financed candidate would continue to receive additional state money in response to fundraising and spending by the privately financed candidate and independent expenditure groups until that publicly financed candidate received a total of $64,437 in state funds (three times the initial allocation for a State House race).³

B

Petitioners in this case, plaintiffs...