Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca4-07-01454/USCOURTS-ca4-07-01454-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NORTH CAROLINA RIGHT TO LIFE 

COMMITTEE FUND FOR INDEPENDENT

POLITICAL EXPENDITURES; NORTH

CAROLINA STATE POLITICAL ACTION

COMMITTEE; W. RUSSELL DUKE, JR.,

Plaintiffs-Appellants,

and

BARBARA JACKSON,

Plaintiff,

v.

LARRY LEAKE, in his official

capacity as the Chairperson of the

North Carolina Board of Elections;

LORRAINE G. SHINN, in her official  No. 07-1454

capacity as a member of the North

Carolina State Board of Elections;

CHARLES WINFREE, in his official

capacity as a member of the North

Carolina State Board of Elections;

GENEVIEVE C. SIMS, in her official

capacity as a member of the North

Carolina State Board of Elections;

ROBERT CORDLE, in his official

capacity as a member of the North

Carolina State Board of Elections;

ROY COOPER, in his official capacity

as the Attorney General for the

State of North Carolina; C. COLON

WILLOUGHBY, JR., in his official 

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capacity as District Attorney for 

Wake County; ROBERT STUART

ALBRIGHT, in his official capacity as

District Attorney for Guilford

County, and as a representative of

the class of District Attorneys in the

State of North Carolina,

Defendants-Appellees,

JAMES R. ANSLEY; COMMON CAUSE

NORTH CAROLINA,

Intervenors-DefendantsAppellees,

and

KEITH M. KAPP; J. MICHAEL BOOE,

in his official capacity as ViceChairperson of the North Carolina  Bar Administrative Committee;

DAVID BENBOW, in his official

capacity as a member of the North

Carolina Bar Administrative

Committee; DAVID YATES BINGHAM,

in his official capacity as a member

of the North Carolina Bar

Administrative Committee; GILBERT

W. CHICHESTER, in his official

capacity as a member of the North

Carolina Bar Administrative

Committee; RENNY W. DEESE, in his

official capacity as a member of the

North Carolina Bar Administrative

Committee; JIM R. FUNDERBURK, in

his official capacity as a member of

the North Carolina Bar 

2 NORTH CAROLINA RIGHT TO LIFE v. LEAKE

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Administrative Committee; JOHN E. 

GEHRIG, in his official capacity as a

member of the North Carolina Bar

Administrative Committee; ISAAC

HEARD, JR., in his official capacity

as a member of the North Carolina

Bar Administrative Committee;

PATRICIA L. HOLLAND, in her official

capacity as a member of the North

Carolina Bar Administrative

Committee; MARGARET HUNT, in her

official capacity as a member of the

North Carolina Bar Administrative

Committee; MARGARET MCCREARY,

in her official capacity as a member

of the North Carolina Bar

Administrative Committee; DAVID T. 

PHILLIPS, in his official capacity as a

member of the North Carolina Bar

Administrative Committee; FRED D.

POISSON, SR., in his official capacity

as a member of the North Carolina

Bar Administrative Committee;

DONALD C. PRENTISS, in his official

capacity as a member of the North

Carolina Bar Administrative

Committee; RICHARD ROOSE, in his

official capacity as a member of the

North Carolina Bar Administrative

Committee; JAN H. SAMET, in her

official capacity as a member of the

North Carolina Bar Administrative

Committee; JUDY D. THOMPSON, in 

NORTH CAROLINA RIGHT TO LIFE v. LEAKE 3

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her official capacity as a member of 

the North Carolina Bar

Administrative Committee,

Defendants.

DEMOCRACY NORTH CAROLINA;

AMERICAN JUDGES ASSOCIATION;

CAMPAIGN LEGAL CENTER,

INCORPORATED; CENTER FOR CIVIC

POLICY; DEMOS: A NETWORK FOR

IDEAS AND ACTION; ILLINOIS

CAMPAIGN FOR POLITICAL REFORM; 

LEAGUE OF WOMEN VOTERS OF THE

UNITED STATES; LEAGUE OF WOMEN

VOTERS OF NORTH CAROLINA;

PROGRESSIVE MARYLAND; PUBLIC

CITIZEN, INCORPORATED; REFORM

INSTITUTE; S. GERALD ARNOLD; G. K.

BUTTERFIELD; J. PHIL CARLTON;

HENRY E. FRYE; K. EDWARD GREENE;

HARRY C. MARTIN; FRANCIS I.

PARKER; WILLIS P. WHICHARD,

Amici Supporting Appellee. 

Appeal from the United States District Court

for the Eastern District of North Carolina, at Raleigh.

W. Earl Britt, Senior District Judge.

(5:06-cv-00324-BR)

Argued: December 7, 2007

Decided: May 1, 2008

Before MICHAEL and TRAXLER, Circuit Judges, and

James P. JONES, Chief United States District Judge

for the Western District of Virginia, sitting by designation.

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Affirmed by published opinion. Judge Michael wrote the opinion, in

which Judge Traxler and Judge Jones joined. 

COUNSEL

ARGUED: James Bopp, Jr., BOPP, COLESON & BOSTROM, Terre

Haute, Indiana, for Appellants. Alexander McClure Peters, Special

Deputy Attorney General, NORTH CAROLINA DEPARTMENT OF

JUSTICE, Raleigh, North Carolina; Deborah Goldberg, BRENNAN

CENTER FOR JUSTICE, New York, New York, for Appellees. ON

BRIEF: Anita Y. Woudenberg, Josiah Neeley, BOPP, COLESON &

BOSTROM, Terre Haute, Indiana, for Appellants. Roy Cooper, North

Carolina Attorney General, Susan K. Nichols, Special Deputy Attorney General, NORTH CAROLINA DEPARTMENT OF JUSTICE,

Raleigh, North Carolina; Suzanne Novak, BRENNAN CENTER FOR

JUSTICE, New York, New York; James G. Exum, Jr., Manning A.

Connors, SMITH MOORE, L.L.P., Greensboro, North Carolina, for

Appellees. Erwin Chemerinsky, DUKE UNIVERSITY SCHOOL OF

LAW, Durham, North Carolina; Anita S. Earls, Durham, North Carolina, for Democracy North Carolina, Amicus Supporting Appellees.

J. Gerald Hebert, Paul S. Ryan, Tara Malloy, THE CAMPAIGN

LEGAL CENTER, INC., Washington, D.C., for American Judges

Association, Campaign Legal Center, Incorporated, Center for Civic

Policy, Demos: A Network for Ideas and Action, Illinois Campaign

for Political Reform, League of Women Voters of the United States,

League of Women Voters of North Carolina, Progressive Maryland,

Public Citizen, Incorporated, Reform Institute, Amici Supporting

Appellees. Bryce L. Friedman, James G. Gamble, Elaine M. Divelbliss, SIMPSON, THACHER & BARTLETT, L.L.P., New York,

New York, for S. Gerald Arnold, G. K. Butterfield, J. Phil Carlton,

Henry E. Frye, K. Edward Greene, Harry C. Martin, Francis I. Parker,

Willis P. Whichard, Amici Supporting Appellees.

OPINION

MICHAEL, Circuit Judge: 

The plaintiffs, a former candidate for the North Carolina Supreme

Court and two political action committees, challenge the constitutionNORTH CAROLINA RIGHT TO LIFE v. LEAKE 5

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ality of three provisions of North Carolina’s Judicial Campaign

Reform Act, N.C. Sess. Laws 2002-158, codified at N.C. Gen. Stat.

§ 163-278.61 et seq. (the Act). The Act, which became law in 2002,

creates a system of voluntary public financing for judicial candidates

at the appellate level. The district court denied the plaintiffs’ request

for a preliminary injunction prior to the 2006 general election and

ultimately dismissed the complaint for failure to state a claim.

Because we conclude that the challenged provisions are permissible

campaign finance regulations and are consistent with the First

Amendment, as interpreted by the Supreme Court in Buckley v. Valeo,

424 U.S. 1 (1976), and McConnell v. FEC, 540 U.S. 93 (2003), we

affirm. 

I.

North Carolina’s Judicial Campaign Reform Act creates a system

of optional public funding for candidates seeking election to the

state’s supreme court and court of appeals. The Act’s stated purposes

are to "ensure the fairness of democratic elections" and "to protect the

constitutional rights of voters and candidates from the detrimental

effects of increasingly large amounts of money being raised and spent

to influence the outcome of [judicial] elections." N.C. Gen. Stat.

§ 163-278.61. To further these purposes, the Act creates the North

Carolina Public Campaign Fund (the Fund), which distributes public

funds to eligible candidates who choose to participate in the system

(participating candidates). Id. In exchange for the public funds, participating candidates must agree to abide by restrictions on the amount

of contributions they accept and the amount of campaign expenditures

they make. Those candidates who decline participation (nonparticipating candidates) do not receive public funding and are not bound by

the additional restrictions accepted by participating candidates. 

In August 2005 the plaintiffs filed an action in U.S. District Court

in North Carolina against several state officials connected with the

administration and enforcement of the Act (collectively, the state).

The complaint asserted that several provisions of the Act were unconstitutional. On October 26, 2006, shortly before the November 2006

general election, the district court denied the plaintiffs’ request for a

preliminary injunction, reasoning that the plaintiffs were not likely to

succeed on any of their constitutional claims. In March 2007 the court

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dismissed the plaintiffs’ claims for failure to state a claim. The plaintiffs appeal the dismissal order, and our review is de novo, Smith v.

Frye, 488 F.3d 263, 266 (4th Cir. 2007). 

II.

We begin our review by setting forth the particulars of North Carolina’s public financing system for judicial campaigns at the appellate

level. 

As a threshold matter any candidate seeking to participate in the

public funding system must meet two statutory conditions. First, the

candidate must satisfy the Act’s eligibility requirements, which are

designed to measure whether the candidate has a base of support in

the electorate. See N.C. Gen. Stat. § 163-278.64(b). Specifically, a

candidate must collect "qualifying contributions" from at least 350

registered voters, and those contributions must total at least thirty but

no more than sixty times the filing fee for the office. Id. In 2006 a

supreme court candidate needed to raise between $37,140 and $74,280.1

Second, each participating candidate must agree to certain restrictions

on campaign fundraising and expenditures, including a limitation of

spending to the total of the amounts disbursed from the Fund plus the

amounts raised as qualifying contributions. Id. § 163-278.64(d). 

After satisfying these two conditions, a participating candidate

becomes certified to receive public funds. A certified candidate

receives an automatic (base) disbursement of public funds if the candidate is opposed in the general election. Id. § 163-278.65(b). In 2006

the base amount of funding for a contested state supreme court campaign was $216,650, which equaled 175 times the filing fee for that

office. A certified candidate does not receive an automatic disbursement of funds for a primary election, but the candidate may spend in

a primary the amounts raised to satisfy the statute’s eligibility requirements. 

1These numbers, as well as others throughout the opinion, are calculated based on record information suggesting that the filing fee for a

supreme court race in 2006 was $1,238. Our numbers differ slightly from

those offered by the plaintiffs, but the difference does not affect the outcome of the case. 

NORTH CAROLINA RIGHT TO LIFE v. LEAKE 7

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Participating candidates are also eligible to receive "matching

funds" in specified circumstances.2Id. § 163-278.67. Eligibility for

these funds is triggered when a participating candidate is opposed by

a nonparticipating candidate whose "funds in opposition" total more

than the trigger amounts specified in the statute. "Funds in opposition" is defined to include the amount any one nonparticipating candidate has raised or spent (whichever is greater) plus the amount that

independent entities have spent to support the nonparticipating candidate or to oppose the participating candidate. Id. § 163-278.67(a). 

The Act provides separate trigger amounts for a primary and general election. In a primary election the trigger amount is defined as

sixty times the filing fee for the office sought, id. §§ 163-278.62(9),

(18); in 2006 the trigger equaled $74,280 for a supreme court campaign. In a general election the trigger amount is equal to the initial

disbursement, § 163.278.62(18), which in 2006 was $216,650 for a

supreme court campaign. The amount of matching funds disbursed

equals the amount by which the nonparticipating candidate’s "funds

in opposition" exceed the trigger amount, though in both the primary

and the general the total amount of matching funds available is

capped at two times the trigger amount. Id. § 163-278.67(a)-(c). 

The Act contains several additional provisions designed to promote

the effective administration of the matching funds scheme. For example, a nonparticipating candidate must make an initial report within

twenty-four hours after the "total amount of campaign expenditures

or obligations made, or funds raised or borrowed, exceeds eighty percent (80%) of the trigger for matching funds." Id. § 163-278.66(a).

The report must include the campaign’s "total income, expenses, and

obligations." Id. In addition, entities that make independent expenditures supporting a nonparticipating candidate (or supporting or opposing a participating candidate) must file a similar report within twentyfour hours of making total expenditures in excess of $5,000. Id. After

these initial reports, the candidates and independent entities must

2A recent amendment substituted the term "matching funds" for "rescue funds," which was used in the original version of the Act. Act to

Strengthen the Matching Funds Provision of the Judicial Public Campaign Act, N.C. Sess. Laws 2007-510, § 1(a)-(c). This substitution has no

effect on the substance of the Act. 

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"comply with an expedited reporting schedule by filing additional

reports" after receiving (or spending) each additional amount in

excess of $1,000. Id. § 163-278.66(a). 

Finally, in certain defined circumstances the Act bars a nonparticipating candidate from accepting contributions from third parties during the twenty-one days prior to a general election. Id. § 163-

278.13(e2)(3). The purpose of this ban is "to make meaningful the

provisions" of the Act by ensuring the timely distribution of matching

funds. See id. § 163-278.13(e2). For this reason, the ban applies only

if a nonparticipating candidate is opposing a participating candidate,

and it applies only to contributions that would cause the nonparticipating candidate to exceed the trigger amounts. Id. § 163-

278.13(e2)(3). The ban does not prevent nonparticipating candidates

from personally contributing or loaning money to their own campaigns. Id. § 163-278.13(e2).

III.

Before reaching the merits, we must consider the state’s arguments

that the plaintiffs’ claims are not justiciable. 

A.

The state argues that two of the plaintiffs — North Carolina Right

to Life Committee Fund for Independent Political Expenditures

(NCRL-IEPAC or the Independent Expenditure PAC) and North Carolina Right to Life State Political Action Committee (NCRL-SPAC

or the Contribution PAC) — lack standing because neither has been

injured by the statutory provisions they challenge. Three elements are

necessary for standing: (1) the plaintiffs must allege that they have

suffered an injury in fact, that is, "an actual or threatened injury that

is not conjectural or hypothetical"; (2) the injury must be "fairly traceable to the challenged conduct"; and (3) it must be likely that the

injury will be redressed by a favorable decision. Miller v. Brown, 462

F.3d 312, 316 (4th Cir. 2006) (citing Lujan v. Defenders of Wildlife,

504 U.S. 555, 560-61 (1992)). The state contends that the plaintiffs

have not satisfied the first (injury in fact) requirement. 

NORTH CAROLINA RIGHT TO LIFE v. LEAKE 9

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According to the complaint, NCRL-IEPAC is a political action

committee organized for the purpose of making independent expenditures on behalf of political candidates it supports. NCRL-IEPAC

alleges that it chose not to make expenditures on behalf of nonparticipating candidates due to a fear that such expenditures might result in

the disbursement of matching funds to a participating candidate that

the organization opposed. NCRL-SPAC, by contrast, is a political

action committee organized for the purpose of contributing money to

political candidates it supports. NCRL-SPAC alleges that it would

have made contributions to a nonparticipating candidate during the

twenty-one days prior to the 2006 general election, but refrained from

doing so because of the Act. 

The state argues, in essence, that the two organizations’ alleged

injuries are hypothetical or conjectural rather than actual or imminent.

According to the state, the organizations failed to show that they

would have actually carried out their plans to make contributions and

expenditures. Specifically, the state contends that the Independent

Expenditure PAC (NCRL-IEPAC) did not show that it had sufficient

funds available to make independent expenditures in amounts that

would have triggered the statutory reporting requirements. Similarly,

the state questions the Contribution PAC’s (NCRL-SPAC’s) intent to

make contributions during the twenty-one days prior to the 2006 election. In particular, the state points out that the Contribution PAC has

not made any contributions to candidates during previous election

cycles, including 2006. 

The state’s arguments lack merit. We have held that a plaintiff may

establish the injury necessary to challenge campaign finance regulations by alleging "an intention to engage in a course of conduct arguably affected with a constitutional interest." Va. Soc’y for Human

Life, Inc. v. FEC, 263 F.3d 379, 386 (4th Cir. 2001) (quoting Babbitt

v. United Farm Workers Nat’l Union, 442 U.S. 289, 298 (1979)).

Similarly, the Supreme Court has held that "conditional statements"

of intent, which allege that a plaintiff would engage in a course of

conduct but for the defendants’ allegedly illegal action, may be sufficient to demonstrate the required "injury in fact." Friends of the

Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 184

(2000). The Court explicitly rejected the argument (comparable to the

state’s argument here) that such conditional statements of intent are

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too speculative to confer standing. Id. In this case NCRL-IEPAC and

NCRL-SPAC have sufficiently stated their intentions by alleging that

they would have made contributions and expenditures but for the

challenged provisions. Thus, we conclude that the plaintiffs’ allegations are sufficient to establish standing.

B.

The state also argues that the plaintiffs’ claims are moot. The third

plaintiff, W. Russell Duke, Jr., was a candidate for the state supreme

court when this action was filed, and he opted not to receive public

funds. Duke ultimately lost the election to the incumbent chief justice,

Sarah Parker, who chose to participate in the public financing system.

The state argues that Duke’s claims are moot because he has not

alleged that he will become a candidate for judicial office again in the

future. Likewise, according to the state, the claims raised by NCRLIEPAC and NCRL-SPAC are moot because neither organization has

alleged an intent to participate in future election cycles. 

We disagree. Duke’s claims, as well as those raised by NCRLIEPAC and NCRL-SPAC, "fit comfortably within the established

exception to mootness for disputes capable of repetition, yet evading

review." FEC v. Wis. Right to Life, Inc. (WRTL), 127 S.Ct. 2652,

2662 (2007). In WRTL the Supreme Court held that the "capable of

repetition, yet evading review" doctrine applied to save a challenge

to the constitutionality of the Bipartisan Campaign Reform Act

(BCRA) made during the 2004 election cycle. Id. at 2662-63.

Although the election was over when the case reached the Supreme

Court, the Court held that there was a reasonable expectation that the

BCRA provisions applied against the plaintiff during the 2004 cycle

would be applied against it again in future elections. Id. Likewise, in

this case, there is a reasonable expectation that the challenged provisions will be applied against the plaintiffs again during future election

cycles. In making this determination, we reject, as other circuits have,

the argument that an ex-candidate’s claims may be "capable of repetition, yet evading review" only if the ex-candidate specifically alleges

an intent to run again in a future election. See Schaefer v. Townsend,

215 F.3d 1031, 1033 (9th Cir. 2000); Merle v. United States, 351 F.3d

92, 95 (3d Cir. 2003); see also Int’l Org. of Masters, Mates & Pilots

v. Brown, 498 U.S. 466, 473 ("[E]ven though [the respondent] lost the

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election [for a labor union office] by a small margin, the case is not

moot. Respondent has run for office before and may well do so

again."). Thus, we conclude that the plaintiffs’ claims are not moot.

IV.

We turn now to the central issue: whether providing public matching funds to participating candidates violates the First Amendment.

A.

Our analysis must begin with the Supreme Court’s decision in

Buckley v. Valeo, 424 U.S. 1 (1976). The Court made clear in Buckley

that public financing of political campaigns does not, in itself, violate

the First Amendment. 424 U.S. at 57 n.65. In fact, the Court observed

that the Federal Election Campaign Act’s (FECA’s) public financing

scheme "furthers, not abridges, pertinent First Amendment values"

because it "facilitate[s] and enlarge[s] public discussion and participation in the electoral process, goals vital to a self-governing people."

Id. at 92-93. 

Since Buckley the circuit courts have generally held that public

financing schemes are permissible if they do not effectively coerce

candidates to participate in the scheme. See Daggett v. Comm’n on

Governmental Ethics & Election Practices, 205 F.3d 445, 466-72 (1st

Cir. 2000); Gable v. Patton, 142 F.3d 940, 947-49 (6th Cir. 1998);

Rosenstiel v. Rodriguez, 101 F.3d 1544, 1549-52 (8th Cir. 1996); Vote

Choice, Inc. v. DiStefano, 4 F.3d 26, 38-39 (1st Cir. 1993). A public

financing system that effectively mandates participation (and thus

effectively prohibits candidates from spending their own funds)

would violate Buckley’s holding that mandatory limits on the amount

a candidate can spend on his own campaign are unconstitutional.

Gable, 142 F.3d at 948; see also Buckley, 424 U.S. at 57 n.65 ("Just

as a candidate may voluntarily limit the size of the contributions he

chooses to accept, he may decide to forgo private fundraising and

accept public funding." (emphasis added)). Nonetheless, courts recognize that a public financing system may provide significant incentives

for participation without crossing the line into impermissible coercion. E.g., Gable, 142 F.3d at 949. 

12 NORTH CAROLINA RIGHT TO LIFE v. LEAKE

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The plaintiffs do not make coercion a central aspect of their arguments, and, indeed, we conclude that North Carolina’s public financing system is not unconstitutionally coercive. The incentives to

choose public funding, while not insubstantial, are rather modest in

comparison to those in similar systems that have been upheld against

First Amendment challenges. For instance, the Sixth Circuit upheld

a Kentucky campaign finance system that provides a substantially

greater advantage to participating candidates than does the North Carolina system. See Gable, 142 F.3d at 948-49. Under Kentucky’s system a participating candidate can raise up to $600,000 in

contributions, which are then matched two-to-one with public dollars

for a total cap on campaign expenditures of $1.8 million. Id. at 944.

If, however, a nonparticipating candidate raises more than $1.8 million, the cap is removed and every dollar in contributions received by

the participating candidate is again matched with two additional public dollars. Id. The Sixth Circuit reasoned that a candidate could make

a "financially rational decision not to participate" in the system only

if the candidate "intends to exceed the $1.8 million threshold and

believes he will raise more than three times the funds his participating

opponents can raise." Id. at 948. Nonetheless, the court held that the

significant "incentives for participation" did not "step over the line of

unconstitutional coercion." Id. at 949. 

Unlike the Kentucky system at issue in Gable, the matching funds

provided by North Carolina are given in a one-to-one ratio and are

subject to a cap equal to twice the initial trigger amount, which for

a 2006 supreme court campaign was $216,650. The incentive to opt

for this limited level of public funding (a maximum of $649,950 for

a 2006 supreme court general election campaign) is far from unconstitutional coercion, especially in light of the fact that judicial campaigns in several other states have raised and spent multiple millions

of dollars. See Br. Amici Curiae of Ten Organizations Concerned

About the Influence of Money on Judicial Integrity, Impartiality, and

Independence, at 5-9; see also Daggett, 205 F.3d at 466-472 (upholding public financing system as non-coercive); Vote Choice, 4 F.3d at

38-39 (same). 

B.

The thrust of the plaintiffs’ First Amendment argument against the

matching funds provision is that it "chill[s] and penalize[s] contribuNORTH CAROLINA RIGHT TO LIFE v. LEAKE 13

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tions and independent expenditures made on behalf of [nonparticipating] candidates." Appellants’ Br. at 32. The plaintiffs argue that their

political speech is chilled because spending in excess of the specified

trigger results in public funds being disbursed to a participating candidate whom the plaintiffs do not support. Therefore, according to the

plaintiffs, they choose to spend less money (and thus engage in less

political speech) in order to prevent candidates they oppose from

receiving public funds. 

There is some conflict in the circuits as to whether the provision

of matching funds burdens or chills speech in a way that implicates

the First Amendment. The Eighth Circuit struck down a matching

funds provision, reasoning that the potential "self-censorship" created

by the scheme "is no less a burden on speech . . . than is direct government censorship." Day v. Holahan, 34 F.3d 1356, 1360 (8th Cir.

1994). The First Circuit, on the other hand, explicitly rejected the

"logic of Day" by holding that the provision of matching funds "does

not create a burden" on the First Amendment rights of nonparticipating candidates or independent entities. Daggett, 205 F.3d at 464-65;

see also Gable, 142 F.3d at 947-49 (Sixth Circuit upholding a matching funds scheme against a constitutional challenge without addressing the Day analysis). 

We conclude that the state’s provision of matching funds does not

burden the First Amendment rights of nonparticipating candidates

(like plaintiff Duke) or independent entities (like plaintiff NCRLIEPAC) that seek to make expenditures on behalf of nonparticipating

candidates. The plaintiffs remain free to raise and spend as much

money, and engage in as much political speech, as they desire. They

will not be jailed, fined, or censured if they exceed the trigger

amounts. The only (arguably) adverse consequence that will occur is

the distribution of matching funds to any candidates participating in

the public financing system. But this does not impinge on the plaintiffs’ First Amendment rights. To the contrary, the distribution of

these funds "furthers, not abridges, pertinent First Amendment values" by ensuring that the participating candidate will have an opportunity to engage in responsive speech. See Buckley, 424 U.S. at 92-93.

In reaching this conclusion, we reject as unpersuasive the Eighth

Circuit’s decision in Day, which concluded that a matching funds

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scheme created an impermissible chilling effect on speech. Day’s key

flaw is that it equates the potential for self-censorship created by a

matching funds scheme with "direct government censorship." See

Day, 34 F.3d at 1360. Day attempts to support this flawed proposition

with a citation to a Supreme Court case that addresses the danger of

self-censorship that occurs when a licensing statute gives government

officials unbridled discretion to permit or deny expressive activity. Id.

(citing City of Lakewood v. Plain Dealer Publ’g Co., 486 U.S. 750,

757-58 (1988)). 

The principle underlying the Lakewood case, however, has no

application in the context of a matching funds provision. In Lakewood

the Supreme Court was concerned that speakers would be chilled

from expressing criticism of a mayor because a city ordinance gave

the mayor broad discretion in granting or denying permits to place

news racks on city sidewalks. This danger, according to the Court,

justified striking down the licensing scheme, which lacked clear standards. 486 U.S. at 759-60. In the case before us, however, the chilling

effect alleged by the plaintiffs is different in kind because it stems not

from any fear of direct government censorship but rather from the

realization that one group’s speech will enable another to speak in

response. In stark contrast to the licensing scheme challenged in

Lakewood, North Carolina’s provision of matching funds is likely to

result in more, not less, speech. 

Moreover, the Day decision appears to be an anomaly even within

the Eighth Circuit, as demonstrated by that court’s later decision in

Rosenstiel v. Rodriguez, 101 F.3d 1544 (8th Cir. 1996), which upheld

a Minnesota campaign finance regulation. A candidate who opts to

participate in Minnesota’s public financing system must agree to a

specified cap on the amount the campaign can spend. However, the

cap amount is waved if the participating candidate faces a nonparticipating opponent who raises (or spends) amounts exceeding specified

thresholds. 101 F.3d at 1546-48. Had the Eighth Circuit employed the

Day analysis in the manner the plaintiffs seek to apply it here, the

court would have concluded that the provision created a danger of

self-censorship because a nonparticipating candidate might choose to

limit expenditures in order to ensure that the participating candidate

is not released from the expenditure limitations. But, despite a dissent

that expressly invoked Day’s "chilling effect" proposition, the court

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majority upheld the Minnesota provision and reasoned that the provision did not burden a nonparticipating candidate’s First Amendment

rights. 101 F.3d at 1549-53; id. at 1561-62 (Lay, J., dissenting). This

outcome, which demonstrates the Eighth Circuit’s inconsistent application of the Day analysis, provides additional support for our determination that Day is simply unpersuasive.

C.

In sum, we conclude that North Carolina’s provision of matching

funds under § 163-278.67 does not violate the First Amendment

because the Act does not coerce candidates into opting into the public

financing system. We reject the plaintiffs’ argument that the chilling

effect allegedly caused by § 163-278.67 makes the statute unconstitutional. To the extent that the plaintiffs (or those similarly situated) are

in fact deterred by § 163-278.67 from spending in excess of the trigger amounts, the deterrence results from a strategic, political choice,

not from a threat of government censure or prosecution. As the First

Circuit observed in Daggett, the First Amendment gives the plaintiffs

neither a "right to outraise and outspend an opponent" nor a "right to

speak free from response." 205 F.3d at 464. 

V.

The plaintiffs next argue that § 163-278.66(a)’s reporting requirements are unconstitutional. The section contains two basic requirements. First, nonparticipating candidates are required to file a report

within twenty-four hours of raising or spending funds in excess of

eighty percent of the trigger amount; independent entities must file a

similar report after spending more than $5,000 in opposition to a participating candidate. Second, after this initial report is filed, the candidates and independent entities must disclose each additional amount

received (or spent) in excess of $1,000 through additional reports

filed under "an expedited reporting schedule." 

Reporting and disclosure requirements in the campaign finance

realm "must survive exacting scrutiny." Buckley, 424 U.S. at 64. The

plaintiffs argue that "exacting scrutiny" in this context is equivalent

to strict scrutiny (requiring narrow tailoring to a compelling state

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quent cases. In Buckley the Supreme Court held that there must be "a

‘relevant correlation’ or ‘substantial relation’ between the governmental interest and the information required to be disclosed." 424

U.S. at 64. In applying this test, the Court upheld a FECA disclosure

requirement that bore a "sufficient relationship to a substantial governmental interest." 424 U.S. at 80. Likewise, the Court recently

upheld BCRA’s disclosure requirements based on its determination

that the requirements advanced "important state interests." McConnell

v. FEC, 540 U.S. 93, 196 (2003). In doing so, the Court did not

engage in the type of narrow tailoring analysis that the plaintiffs ask

us to apply to the disclosure requirements at issue in this case. See id.

at 194-202. 

The plaintiffs also miss the mark with their argument that the state

could advance its interests in a less burdensome manner. Because narrow tailoring is not required, the state need not show that the Act

achieves its purposes in the least restrictive manner possible. In Buckley, for example, the Supreme Court rejected an argument that

FECA’s $10 and $100 thresholds for disclosure of contributions were

unconstitutionally low. 424 U.S. at 82-84. The Court reasoned that it

could not "require Congress to establish that it has chosen the highest

reasonable threshold" that would still achieve the government’s interests. Id. at 83. Likewise, our task here is to determine whether North

Carolina’s disclosure requirements have a "substantial relation" to the

state’s purposes, not to determine whether they are the least restrictive

means of advancing those interests. 

Moreover, the plaintiffs’ arguments regarding the burdensome

nature of § 163-278.66(a) are unfounded. For instance, the plaintiffs

complain that § 163-278.66(a) is too burdensome because an initial

report must be filed within twenty-four hours after certain threshold

spending limits are exceeded. But in McConnell the Supreme Court

upheld a nearly identical provision that required a report to be filed

within twenty-four hours of the date on which expenditures exceeded

a trigger amount. 540 U.S. at 195-96. The plaintiffs fare no better

with their argument that § 163-278.66(a) is too burdensome because

it requires nonparticipating candidates to file an excessive number of

reports. The provision authorizes the state board of elections to

develop a schedule for the filing of reports. § 163-278.66(a). In 2006,

for example, the board set a schedule that required eight reports to be

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filed during the two-and-a-half-month period preceding the election.

Compliance with this schedule is not particularly burdensome. And,

while the plaintiffs are correct that the board could impose a more

burdensome schedule in future elections, that possibility alone is not

a sufficient basis to strike down the statute at this time. 

In sum, the plaintiffs’ arguments against the reporting requirements

lack merit. As in Buckley and McConnell the requirements advance

three important state interests: "providing the electorate with information, deterring actual corruption and avoiding any appearance thereof,

and gathering the data necessary to enforce more substantive electioneering restrictions." McConnell, 540 U.S. at 196. By ensuring the

release of campaign funding information to the public and enabling

the effective administration of matching funds, the reporting requirements clearly demonstrate a "substantial relation" to these interests.

Because having a substantial relation to an important state interest is

all that is required by Buckley and McConnell, § 163-278.66(a) passes

constitutional muster.3

VI.

Finally, the plaintiffs challenge § 163-278.13(e2)(3)’s ban on contributions during the twenty-one days prior to an election. Their central argument is that the twenty-one-day ban cannot withstand strict

scrutiny because it is not narrowly tailored to a compelling state interest. The plaintiffs contend first that the stated purpose of the ban,

which is to promote the effective administration of the matching

funds provisions, is not a compelling interest. Alternatively, they

argue that the ban is not narrowly tailored to its stated purpose

because it does not bar a nonparticipating candidate from contributing

to his own campaign, nor does it bar an independent entity from making expenditures supporting the candidate. 

3The plaintiffs also argue that § 163-278.66(a) is overbroad because it

requires the reporting of "obligations made" for future expenditures.

Because the reporting of a campaign’s future obligations does not

encroach on protected speech any more than the reporting of past expenditures, this argument fails as well. 

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Once again the plaintiffs err in asserting that strict scrutiny applies.

In McConnell the Supreme Court clearly reiterated that its past cases

had subjected restrictions on campaign contributions to less intense

scrutiny than restrictions on campaign expenditures. 540 U.S. at 134.

Rather than applying strict scrutiny, the Court clarified that "a contribution limit involving even significant interference with associational

rights is nevertheless valid if it satisfies the lesser demand of being

closely drawn to match a sufficiently important interest." 540 U.S. at

136 (internal quotation marks omitted). Because the contribution ban

interferes with associational rights by restricting the time frame during which contributions may be made and received, it must satisfy

McConnell’s lesser standard of being "closely drawn to match a sufficiently important interest." See id.

The Act’s twenty-one-day contribution ban survives scrutiny under

McConnell. The ban advances the state’s interest in avoiding the danger of corruption (or the appearance thereof) in judicial elections. The

ban advances this interest because it is a key component of the state’s

public funding system, which is itself designed to promote the state’s

anti-corruption goals. The Sixth Circuit has upheld a similar ban that

covered the twenty-eight days before an election. Noting that the ban

forced candidates to "rearrange their fundraising by concentrating it

in the period before the 28-Day Window begins," the court reasoned

that this restriction was justified under Buckley by the state’s interest

in combating corruption through the use of a public funding scheme.

Gable, 142 F.3d at 951. 

The plaintiffs’ alternative argument — that the ban is not sufficiently tailored to its stated goals because it does not cover either a

candidate’s own contributions or an independent entity’s expenditures

— also fails. As explained above, perfect tailoring is not required;

rather, the ban need only be "closely drawn" to the asserted interest.

See McConnell, 540 U.S. at 136. This standard is satisfied. A ban on

contributions in the period immediately prior to the election helps to

minimize a nonparticipating candidate’s ability to unfairly take

advantage of a participating candidate by delaying contributions until

the last minute, when it would be too late for additional matching

funds to be disbursed to the participating candidate. Moreover, the

ban does not apply in all cases. Instead, it applies only in elections in

which a nonparticipating candidate faces a participating candidate.

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Even then, it applies only against contributions that would cause the

nonparticipating candidate to exceed the trigger for matching funds.

§ 163-278.13(e2)(3). The narrowness of its application confirms that

the ban is closely drawn to the asserted state interests. 

In sum, we hold that § 163-278.13(e2)(3) survives constitutional

scrutiny. Its ban on contributions from third parties during the twentyone days prior to an election is a closely drawn means of advancing

the state’s interest in operating a public funding system to minimize

the danger of corruption (or the appearance thereof) in judicial elections. 

VII.

The State of North Carolina has created a system that provides

optional public funding for candidates seeking election to the state’s

appellate courts. The purpose of the system is to protect North Carolina’s citizens from "the detrimental effects of increasingly large

amounts of money being raised and spent to influence the outcome of

[judicial] elections." N.C. Gen. Stat. § 163-278.61. The Act’s public

funding system is necessary, the state concluded, because the "effects

[of money have been] especially problematic in elections of the judiciary, since impartiality is uniquely important to the integrity and

credibility of the courts." Id. The concern for promoting and protecting the impartiality and independence of the judiciary is not a new

one; it dates back at least to our nation’s founding, when Alexander

Hamilton wrote that "the complete independence of the courts of justice is peculiarly essential" to our form of government. The Federalist

No. 78, at 426 (E.H. Scott ed., 1898). We conclude that the provisions

challenged today, which embody North Carolina’s effort to protect

this vital interest in an independent judiciary, are within the limits

placed on the state by the First Amendment. Accordingly, the district

court’s judgment dismissing the plaintiffs’ claims is 

AFFIRMED.

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