In wake of McCutcheon case, states abandon aggregate contribution limits

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Early this month, the United States Supreme Court invalidated federal aggregate limits on individual political contributions in the case McCutcheon et al. v. Federal Election Commission. The case and its immediate impact were detailed in our previous Alert.

In McCutcheon, the Court was not forced to address comparable limits imposed under state law. At the time of the decision, eight states had in place aggregate individual contribution limits similar to the federal law, with one more state law set to go into effect next year. Additional  jurisdictions have adopted other types of related limits. None of these state laws were part of the McCutcheon case. The Court struck down only the federal limits, leaving caps on state contributions untouched  . . . but not for long.

Given the Court’s reasoning, the McCutcheon case left state aggregate limits on very shaky ground. It is all but inevitable that the state limits will also fall, but at the time of the Court’s decision, it was unclear how and when these state limits would be removed.

Two weeks after the Court’s decision, we have begun to see the states react. In two states, campaign finance regulators have announced that they will not enforce their aggregate limits, and other states are expected to follow suit.

Massachusetts was first out of the gate. On the very day the McCutcheon decision was announced, the Massachusetts Office of Campaign & Political Finance issued a short news item noting that it “will no longer enforce the $12,500 aggregate limit on the amount that an individual may contribute to all candidates.” The agency reserved the right to review the ruling in more detail before addressing the possible impact of the decision on a separate state limit on aggregate contributions to party committees.

On April 11, the Maryland State Board of Elections released a guidance document setting aside that state’s $10,000 per election cycle aggregate limit. The Board of Elections explained that the Office of the Attorney General had advised that the provision was unconstitutional, following McCutcheon, and may not be enforced.

The McCutcheon decision has also scuttled a provision in a Vermont law that had not yet gone into effect. Earlier this year, Vermont enacted a new campaign finance statute  that included an aggregate limit of $40,000 for individual contributions per election cycle. The Vermont legislature, recognizing the possibility that the Supreme Court could invalidate the federal aggregate limits, included in the statute a provision noting that the section in question would not take effect at all if the final disposition of McCutcheon “holds that aggregate limits on contributions from single sources are unconstitutional.”

One state law, in Wisconsin, was already the subject of a legal challenge before the McCutcheon decision. In Young v. Wisconsin Government Accountability Board, the plaintiff challenged the state’s annual aggregate cap of $10,000. The Wisconsin case, which has been delayed awaiting action by the Supreme Court, is now very likely to result in a holding invalidating the Wisconsin limit.

Aggregate limits in a group of other jurisdictions – Connecticut, Maine, New York, Rhode Island, Wyoming and Puerto Rico – remain on the books for now, but are likely to be the subject of litigation, legislation or administrative action.

Finally, related laws in additional jurisdictions are also vulnerable in the wake of McCutcheon.  For example, a Minnesota law that reduces the size of permissible contributions after a candidate has reached a certain fundraising threshold is the subject of a lawsuit filed since the Supreme Court’s decision. The plaintiffs argue that the Minnesota law improperly rewards early donors by affording them a higher contribution limit, inconsistent with the McCutcheon decision.

We will continue to monitor developments in response to McCutcheon.

Topics:  Aggregation Rules, FEC, McCutcheon v. FEC, Political Contributions, SCOTUS

Published In: Constitutional Law Updates, Elections & Politics Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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