U.S. Supreme Court Strikes Down Aggregate Contribution Limits

On Tuesday morning, a divided United States Supreme Court issued its opinion in the case of McCutcheon v. Federal Election Commission (572 U.S. ____ (2014)), striking down a portion of federal campaign finance law that imposed an overall limit on the amount of money that any single donor could contribute to political candidates and/or political party committees.

Prior to Tuesday’s ruling, the Federal Election Campaign Act of 1971 (FECA), as amended by the Bipartisan Campaign Reform Act of 2002 (BRCA), imposed two different restrictions on political giving. First, individuals and political committees (PACs) were restricted in the amount of money that could be contributed to a particular candidate or committee. For example, in 2013-2014, individuals are only allowed to give up to $2,600 to any one candidate for any single election (or a total of $5,200 to that particular candidate if the donor makes a contribution for both the primary election and the general election). This is commonly referred to as a “base limit.” The second restriction, or the “aggregate limit,” refers to the portion of the federal law that restricts the total dollar amount that any individual donor could spend to support all federal candidates or political party committees in any two-year election cycle. Under the aggregate restriction, an individual donor could spend a maximum of $123,000 on political contributions in any two-year biennium. Of this total amount, $48,600 can be contributed to candidates while $74,600 can be contributed to federal party committees. The aggregate limits did not include contributions to state or local candidates which are largely governed by state and local laws.

The case at issue in Tuesday’s opinion arose out of a challenge brought by Shaun McCutcheon, an Alabama resident and the CEO of Coalmont Electrical Development. In the 2011-2012 election cycle, McCutcheon contributed to sixteen (16) different federal candidates. In his complaint, McCutcheon claimed that there were twelve (12) additional federal candidates whom he wanted to support but was unable to do so because of the aggregate limit imposed by the FECA. McCutcheon, along with the Republican National Committee (RNC), filed a complaint in District Court, alleging that the aggregate limits were unconstitutional because they violated McCutcheon’s First Amendment rights to free speech. He also alleged that, in the future, he would be unfairly prohibited from supporting the candidates of his choice because of the aggregate limit. The District Court denied McCutcheon’s motion for a preliminary injunction and granted the government’s motion to dismiss the case, finding that the aggregate limits appropriately served the government’s anti-corruption interest. McCutcheon and the RNC appealed directly to the Supreme Court.

In the 5-4 opinion, Justice Roberts, writing for the majority, struck down the aggregate limits as unconstitutional. In doing so, he acknowledged that “Congress may regulate campaign contributions to protect against corruption or the appearance of corruption” but warned that Congress “may not, however, regulate contributions simply to reduce the amount of money in politics, or to restrict the political participation of some in order to enhance the relative influence of others.” The majority opined that federal law currently offered significant protections against corruption including restrictions on the amount that can be contributed to any one particular candidate as well as disclosure requirements, noting that “[w]ith modern technology, disclosure now offers particularly effective means of arming the voting public with information.” In addition, the majority suggested that Congress could combat corruption by imposing other, less restrictive alternatives, including a restriction on certain transfers of funds between candidates and party committees or stronger restrictions on earmarking.

Justice Breyer, writing for the dissent, noted that the majority “misconstrues the nature of the competing constitutional interests at stake” because it “understates the importance of protecting the political integrity of our governmental institutions” and “creates a loophole that will allow a single individual to contribute millions of dollars to a political party or to a candidate’s campaign.” According to Breyer, this decision, when taken together with the 2010 Citizen’s United case that opened the door for corporate independent expenditures, “eviscerates our Nation’s campaign finance laws, leaving the remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve.”

While the ruling is universally considered to be one of the most significant cases since Citizens United, it is important to note that the ruling does not affect the amount that a donor can give to any one particular candidate. While large donors can now write checks to an unlimited number of federal candidates, they cannot write unlimited checks to any one particular candidate. Because of this, early analysis suggests that independent expenditures will continue to play an important role in the 2014 elections. The opinion also makes no changes to the disclosure requirements that are imposed on contributors.

A full copy of the Supreme Court’s decision can be found at http://www.supremecourt.gov/opinions/13pdf/12-536_e1pf.pdf.

Topics:  Aggregation Rules, Campaign Contributions, Campaign Finance Reform, First Amendment, McCutcheon v. FEC, 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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