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“Millionaires’ Amendment” Before the Court

Tomorrow, the Supreme Court will hear oral arguments in a case testing the constitutionality of the so-called “Millionaires’ Amendment” of the Bipartisan Campaign Reform Act (“BCRA,” also known as “McCain-Feingold”)…

Cross-posted from the ACS Blog 

April 22, the Supreme Court will hear oral arguments in a case testing the constitutionality of the so-called “Millionaires’ Amendment” of the Bipartisan Campaign Reform Act (“BCRA,” also known as “McCain-Feingold”).  The Millionaires’ Amendment passed in 2002 as part of a reform package to update and improve the nation’s campaign finance laws. 

The Millionaires’ Amendment, somewhat levels the playing field for opponents of self-financed candidates who plan to spend $350,000 or more of their own money on their campaign for federal office.  Once a candidate for federal office spends more than $350,000 of personal funds on a campaign, their opponent will be allowed to raise private funds in amounts that are triple the normal limits—up to $6,900/person/election—and can coordinate additional expenditures with his or her political party, up to a cap.  The Amendment also requires certain financial disclosures from both candidates so that the FEC can monitor when the cap has been reached.  In all cases, the self-financed candidate can spend as much money as he or she desires.  

The law was challenged by Jack Davis, of New York, who alerted the FEC that he intended to spend $1 million dollars of his own money in his 2006 run for Congress.  In the case, he argues that it is unconstitutional under First and Fifth Amendments, and claims that the additional benefits for his opponents chilled his own speech. 

Mr. Davis lost on all counts in the lower court, which found that the Millionaires’ Amendment did not burden his speech since it “places no restrictions on a candidate’s ability to spend unlimited amounts of his personal wealth to communicate his message to voters, nor does it reduce the amount of money he is able to raise from contributors.”

Instead, the court held, the statute merely “provides a benefit to his opponent, thereby correcting a potential imbalance in resources available to each candidate.”  Thus, the statute “preserve[s] core First Amendment values by protecting the [opposing] candidate’s ability to enhance his participation in the political marketplace.”  The court also rejected Mr. Davis’s equal protection argument, because he had failed to show that Section 319 treats similarly situated persons differently.  It is this opinion that Davis seeks to overturn in the Supreme Court.  The Brennan Center for Justice submitted an amicus brief in support of the FEC’s position. 

The Davis case has its roots in the seminal case of Buckley v. Valeo, which (in)famously stands for the proposition that money is speech.  What Buckley actually says is,

A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached.  This is because virtually every means of communicating ideas in today’s mass society requires the expenditure of money.  

242 U.S. 1, 19 (1976).  Buckley stuck an uneven balance that we have been living with ever since.  It is constitutional to regulate political contributions but it is unconstitutional to regulate expenditures, including expenditures by a wealthy candidate on his own candidacy.  Despite the fact that most self-financed candidates end up losing their elections for lack of a strong base of support among voters, post-Buckley, self-financed candidates, who can make a huge media buy with a single check, have often had a demonstrable funding advantage over other candidates, who must gather hundreds of small contributions before making a similar advertising purchase.  As races for Congress have grown more expensive over time, parties have increasingly turned to candidates who can afford to self-finance to run for election.  This trend could discourage candidates of lesser means from running for office.  The Millionaires’ Amendment was a response by Congress to this Buckley-inspired doctrinal inequity.

This case will be a key test of how hostile the Roberts Court has actually become to campaign finance regulation on the heels of 2006's Randall v. Sorrell (striking down $200-$400 contribution limits as being too low and invalidating expenditure limits in Vermont) and 2007's FEC v. Wisconsin Right to Life II (invalidating the application of BCRA’s electioneering communications regulations to a political ad by a nonprofit.  BCRA defines “electioneering communications” as television and radio communications that refer to a clearly identified candidate for federal office, that are publicly distributed within 60 days before a general election or 30 days before a primary election, and are targeted to the relevant electorate.)  

Mr. Davis and his amici have argued that disclosure under the Millionaires’ Amendment is particularly burdensome.  This is the first chance since the 2003 decision in McConnell for the Court to opine on disclosure burdens, a subject which at that time garnered 8 supportive votes from Justices on the Court.  Disclosure is widely viewed as the least restrictive tool in the campaign finance toolbox.  

This case is also an opportunity for the Court to clarify (1) whether the specific $350,000 “trigger” provision in the Millionaires’ Amendment is permissible, and (2) whether generally mechanisms to equalize funding among candidates with different financial resources are allowable.  While the endorsement of such a mechanism has been adopted by lower courts in the public financing context, the Davis case is the first time that the Supreme Court will entertain this type of argument when both candidates are using private funds.

If the Court would like to rid itself of this case on mootness grounds, it certainly has the opportunity, since the 2006 election is undoubtedly over.  If the Court would like to avoid the merits it could also punt based on Mr. Davis’s failure to establish an actual injury since although Mr. Davis spent significant sums of his own money in his 2006 race for Congress, his opponent did not utilize of any of the Millionaires’ Amendment’s benefits.