Thompson V. Hebdon

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT DAVID THOMPSON; AARON No. 17-35019 DOWNING; JIM CRAWFORD, Plaintiffs-Appellants, D.C. No. 3:15-cv-00218- v. TMB HEATHER HEBDON, in Her Official Capacity as the Executive Director ORDER AND of the Alaska Public Offices OPINION Commission; RICHARD STILLIE; IRENE CATALONE; ANNE HELZER; ROBERT CLIFT; and JIM MCDERMOTT, in their official capacities as members of the Alaska Public Offices Commission, Defendants-Appellees. On Remand From the United States Supreme Court Argued and Submitted February 22, 2021 San Francisco, California Filed July 30, 2021 Before: Sidney R. Thomas, Chief Judge, and Consuelo M. Callahan and Carlos T. Bea, Circuit Judges. 2 THOMPSON V. HEBDON Order; Opinion by Judge Callahan; Partial Concurrence and Partial Dissent by Chief Judge Thomas SUMMARY* Civil Rights/Campaign Finance In an action alleging that an Alaska law regulating campaign contributions violates the First Amendment, the panel issued an order withdrawing its opinion, filed on November 27, 2018, and published at 909 F.3d 1027, and replaced it with the opinion filed concurrently with the panel’s order. On remand from the United States Supreme Court, the panel (1) affirmed the district court’s bench trial judgment upholding Alaska’s political party-to-party candidate limit; (2) reversed the district court’s judgment as to the individual-to-candidate limit, the individual-to-group limit, and the nonresident aggregate limit; and (3) remanded for entry of a judgment consistent with the panel’s opinion. Plaintiffs, three individuals and a subdivision of the Alaska Republican Party, challenged: (1) the $500 annual limit on an individual contribution to a political candidate, (2) the $500 limit on an individual contribution to a non- political party group, (3) annual limits on what a political party—including its subdivisions—may contribute to a candidate, and (4) the annual aggregate limit on * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. THOMPSON V. HEBDON 3 contributions a candidate may accept from nonresidents of Alaska. The district court upheld all four provisions against a constitutional challenge. In a prior opinion, this court affirmed except as to the nonresident limit. On review, the Supreme Court issued a per curiam opinion vacating judgment and remanding the case for this court to revisit whether the individual-to-candidate and individual-to-group limits were consistent with the Supreme Court’s First Amendment precedents, in particular Randall v. Sorrell, 548 U.S. 230 (2006). The panel held that while the district court correctly held that the political party-to-candidate limit was constitutional, it erred under Supreme Court precedent in upholding the individual-to-candidate limit, the individual-to-group limit, and the nonresident aggregate limit. In reviewing the $500 individual-to-candidate limit, the panel examined the record independently and applied the five-factor test outlined in Randall with an emphasis on the “special justification” factor. The panel held that, on balance, Alaska failed to meet its burden of showing that its individual contribution limit was closely drawn to meet its objectives. The panel determined that the limit significantly restricted the amount of funds available to challengers to run competitively against incumbents, and the already-low limit was not indexed for inflation. Moreover, the panel held that Alaska had not established a special justification for such a low limit, noting that the record contained no indication that corruption or its appearance was more serious in Alaska than in other states. 4 THOMPSON V. HEBDON Similarly, Alaska had not met its burden of showing that the $500 individual-to-group limit was closely drawn to restrict contributors from circumventing the individual-to- candidate limit. Like the individual-to-candidate limit, it was not adjusted for inflation, and it was lower than limits in other states. In any event, the panel found that because the statute was poorly tailored to the Government’s interest in preventing circumvention of the base limits, it impermissibly restricted participation in the political process. As it did in its prior opinion, the panel upheld the $5,000 limit on the amount a political party may contribute to a municipal candidate. The panel rejected plaintiffs’ argument that limiting party sub-units to the $5,000 limit but not limiting multiple labor-union PACs to the same limit was discriminatory. The panel held that plaintiffs’ discriminatory treatment argument failed because independent labor union PACs are not analogous to political party sub-units. Moreover, political parties may donate more than labor union PACs ($5,000 versus $1,000), which undercut the basis for a direct comparison between the two disparate sets of organizations. Finally, as it did in its prior opinion, the panel reversed on Alaska’s nonresident aggregate limit, which bars a candidate from accepting more than $3,000 per year from individuals who are not residents of Alaska. Taking the district court’s evidentiary findings as true, the panel could not agree that the nonresident limit targeted quid pro quo corruption or its appearance. At most, the law aimed to curb perceived “undue influence” of out-of-state contributors— an interest that was no longer sufficient after Citizens United v. Fed. Election Comm’n, 558 U.S. 310 (2010), and McCutcheon v. Fed. Election Comm’n, 572 U.S. 185 (2014). THOMPSON V. HEBDON 5 Moreover, even if the panel agreed with Alaska that limiting the inflow of contributions from out-of-state extractive industries served an anti-corruption interest, the nonresident aggregate limit was a poor fit. Concurring in part and dissenting in part, Chief Judge Thomas concurred in Section II.C of the majority opinion because he agreed that Alaska’s $5,000 limit on a political party’s contribution to a municipal candidate did not violate the First Amendment. However, Chief Judge Thomas respectfully dissented from Sections II.A, II.B, and II.D. He would uphold Alaska’s $500 limit on individual contributions to candidates and election-related groups. That limit, although not indexed for inflation, passed muster under Randall because Alaska permits political parties to donate significantly more than $500 to candidates; Alaska does not count volunteer services and at least some volunteer expenses toward the $500 limit; the record does not suggest that the $500 limit significantly restricted the amount of funding available for challengers to run competitive campaigns; and the record indicated that corruption (or its appearance) was significantly more serious a problem in Alaska than elsewhere. Moreover, Chief Judge Thomas remained persuaded that the nonresident aggregate contribution limit, which furthered Alaska’s important state interests in preventing quid pro quo corruption or its appearance and in preserving self-governance, did not violate the First Amendment either. Accordingly, Chief Judge Thomas would affirm the district court’s decision in its entirety. 6 THOMPSON V. HEBDON COUNSEL Erin Murphy (argued), Paul D. Clement, and Lauren N. Beebe, Kirkland & Ellis LLP, Washington, D.C.; Kevin G. Clarkson, Matthew C. Clarkson, Robin O. Brena, and Laura S. Gould, Brena Bell & Walker P.C., Anchorage, Alaska; for Plaintiffs-Appellants. Laura Fox (argued), Senior Assistant Attorney General; Tregarrick R. Taylor, Deputy Attorney General; Department of Law, Anchorage, Alaska, for Defendants-Appellees. Brian A. Sutherland, Reed Smith LLP, San Francisco, California; M. Patrick Yingling, Reed Smith LLP, Chicago, Illinois; Brent Ferguson and Daniel I. Weiner, Brennan Center for Justice, New York, New York; for Amicus Curiae Brennan Center for Justice at NYU School of Law. Tara Malloy and Megan P. McAllen, Campaign Legal Center, Washington, D.C., for Amicus Curiae Campaign Legal Center. Ronald A. Fein and John C. Bonifaz, Free Speech for People, Newton, Massachusetts, for Amici Curiae Free Speech for People and Professor David Fontana. Tara Malloy, Noah B. Lindell, Megan P. McAllen, and Mark P. Gaber, Campaign Legal Center, Washington, D.C., for Amicus Curiae Campaign Legal Center. THOMPSON V. HEBDON 7 ORDER The opinion filed on November 27, 2018, and published at 909 F.3d 1027, is withdrawn, and replaced by the opinion filed concurrently with this order. OPINION CALLAHAN, Circuit Judge: We must decide whether an Alaska law regulating campaign contributions violates the First Amendment. At issue are Alaska’s limits on contributions made by individuals to candidates, individuals to election-related groups, and political parties to candidates, and also its limit on the total funds a candidate may receive from out-of-state residents. The district court upheld all four provisions against a constitutional challenge by three individuals and a subdivision of the Alaska Republican Party. See Thompson v. Hebdon, 909 F.3d 1027, 1032–33 (9th Cir. 2018). In a prior opinion, we affirmed except as to the nonresident limit. Id. at 1031. Plaintiffs filed a petition for certiorari. See Thompson v. Hebdon, 140 S. Ct. 348, 351 (2019). The Supreme Court issued a per curiam opinion granting the petition, vacating our judgment, and remanding the case for us to “revisit” whether the individual-to-candidate and individual-to-group limits “are consistent with [the Supreme Court’s] First Amendment precedents,” in particular Randall v. Sorrell, 548 U.S. 230 (2006). Id. Following remand, we received supplemental briefs from the parties and an amicus, and we heard oral argument. We now issue a revised opinion. Our resolution of the challenges to the political- party-to-candidate and nonresident limits remains the same, affirming the district court’s decision upholding the former 8 THOMPSON V. HEBDON but reversing the decision upholding the latter. But we now reverse the district court’s decision upholding the individual- to-candidate and individual-to-group limits.

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