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Why States' Campaign Donation Limits Could Be in Jeopardy

A federal appeals court decided this week that states can only limit campaign contributions if they can somehow prove that they lead to corruption.

Are state laws limiting campaign contributions in trouble? A decision by a federal appellate court makes it appear possible.

On Tuesday, a panel of the 9th Circuit Court of Appeals ordered a district judge to take a new look at Montana's contribution limits. Republican committees and business and nonprofit groups had challenged the 1994 law, which limited individual contributions (to $170 for legislative candidates and $650 for gubernatorial  tickets) arguing it violated free speech.

U.S. District Judge Charles C. Lovell had struck the law down in 2012, finding that the state's contribution limits were too low to allow challengers to compete against incumbents and be competitive. The three-judge panel found he'd used the wrong reasoning, however. 

The appellate court rules that the U.S. Supreme Court's Citizens United decision in 2010 means that however, states can only limit campaign contributions in order to prevent corruption.

"Before Citizens United, it was enough to show the state’s interest was simply to prevent the influence contributors of large sums have on politicians, or the appearance of such influence," wrote 9th Circuit Judge Carlos T. Bea. "Now, the prevention of quid pro quo corruption, or its appearance, is the only sufficiently important state interest to justify limits on campaign contributions."

James Bopp, who argued the case for the plaintiffs -- and also argued the Citizens United case -- called the ruling significant, arguing it will set a high bar for states seeking to limit campaign donations. Supporters of campaign finance limits worry about the same thing.

"The circuit court said that a legislature would have to write a statute that is 'closely drawn' to serve the goal of preventing quid pro quo corruption or the appearance of quid pro quo corruption," said Michael Malbin, executive director of the Campaign Finance Institute, a nonprofit research group that favors limits on donors.

But the ruling doesn't make it clear how states can prove their laws will prevent corruption -- or whether a limit of $1,000 or $2,000 would appear more corrupting than $500, Malbin said. 

"If the court is saying you have to prove that a specific contribution limit level prevents corruption more than a slightly higher contribution limit; that is an impossible burden for a state to bear," he said.

Such concerns are overblown, said Rick Hasen, who writes the influential Election Law Blog. "I take it as a punt," said Hasen, who teaches law at the University of California, Irvine. "What the appellate court said to the district court is you got it wrong, try again."

Hasen notes that just last week, another panel on the 9th Circuit upheld Hawaii's ban on campaign contributions from contractors. That ruling provided evidence that the 9th Circuit isn't ready to toss out limits on campaign contributions entirely.

The story isn't over, even within the 9th Circuit, which covers 13 western states, according to Daniel Weiner, counsel for the Democracy Program at the Brennan Center for Justice at New York University. Even if the appellate court were to find limits unconstitutional, he said, "The Supreme Court is sending signals it's not going to end contribution limits."

But the appellate court found that state laws have to meet new standards in light of Citizens United, even if it didn't make clear what those standards are going to be.

"Clearly, this is a challenge," Malbin said. "The scrutiny's going to be tougher and contribution limits are at risk."

Alan Greenblatt is the editor of Governing. He can be found on Twitter at @AlanGreenblatt.
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