Opinion ID: 4402103
Heading Depth: 2
Heading Rank: 4

Heading: ethics provisions

Text: We now examine the legislators’ challenges to the constitutionality of the three ethics provisions that target their own conduct: the contribution ban, regular session contribution ban, and gift ban.
We review de novo a district court’s judgments under Federal Rule of Civil Procedure 56. Allied Constr. Indus. v. City of Cincinnati, 879 F.3d 215, 219 (6th Cir. 2018). Summary judgment may be entered only if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Where, as here, the parties filed cross-motions for summary judgment, “the court must evaluate each party’s motion Nos. 17-6456/6505 Schickel, et al. v. Dilger, et al. Page 9 on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” McKay, 823 F.3d at 866 (citation omitted).
The legislators argue that limiting their receiving contributions burdens political speech. But contribution limits entail “only a marginal restriction upon the contributor’s ability to engage in free communication,” as they permit “the symbolic expression of support evidenced by a contribution but do[] not in any way infringe the contributor’s freedom to discuss candidates and issues.” Buckley v. Valeo, 424 U.S. 1, 20–21 (1976) (per curiam). As such, they are subject to closely drawn scrutiny, a “lesser but still ‘rigorous standard of review.’” McCutcheon v. FEC, 572 U.S. 185, 197 (2014) (plurality opinion) (quoting Buckley, 424 U.S. at 29). And contribution bans—such as those enacted here—receive the same treatment. FEC v. Beaumont, 539 U.S. 146, 161–62 (2003) (expressly declining to apply strict scrutiny to a contribution ban). The same goes for the gift ban. See Preston v. Leake, 660 F.3d 726, 729–30 (4th Cir. 2011) (upholding lobbyist contribution ban, which defined contributions to include gifts, under closely drawn scrutiny). Restrictions on gift giving, like those on contributions, are marginal restrictions that do not in any way hinder lobbyists’ or legislators’ ability to discuss candidates or issues. Buckley, 424 U.S. at 20–21. Indeed, if contribution restrictions “lie closer to the edges than to the core of political expression,” Beaumont, 539 U.S. at 161, gifts of value hug the fringe. See United States v. Ring, 706 F.3d 460, 466 (D.C. Cir. 2013) (“[T]he First Amendment interest in giving hockey tickets to public officials is, at least compared to the interest in contributing to political campaigns, de minimis.”).
Closely drawn scrutiny requires the Commonwealth to demonstrate that each provision furthers “a sufficiently important interest and employs means closely drawn to avoid unnecessary abridgement of associational freedoms.” McCutcheon, 572 U.S. at 197 (quoting Buckley, 424 U.S. at 25); see Lavin, 689 F.3d at 547. Nos. 17-6456/6505 Schickel, et al. v. Dilger, et al. Page 10 1. Do the challenged provisions further a “sufficiently important” government interest? The Commonwealth asserts a familiar interest for the ethics provisions: the prevention of actual quid pro quo corruption or its appearance. See § 6.606. This interest has long been considered sufficiently important to justify regulating campaign contributions, and “may properly be labeled ‘compelling,’ so that [it] would satisfy even strict scrutiny.” McCutcheon, 572 U.S. at 199 (quoting FEC v. Nat’l Conservative Political Action Comm., 470 U.S. 480, 496– 97 (1985)). It follows that this focus on preventing corruption or its appearance would also justify Kentucky’s gift ban. See Fla. Ass’n of Prof’l Lobbyists, Inc. v. Div. of Legislative Info. Servs. of the Fla. Office of Legislative Servs., 525 F.3d 1073, 1080–81 (11th Cir. 2008) (upholding lobbyist gift ban); Preston, 660 F.3d at 729. But having an undeniably important interest is not enough; Kentucky must still “demonstrate how its [ethics provisions] further[]” that interest. Lavin, 689 F.3d at 547. To do so, Kentucky must show only “a cognizable risk of corruption”—a “risk of quid pro quo corruption or its appearance.” McCutcheon, 572 U.S. at 210 (emphasis added); see Citizens United v. FEC, 558 U.S. 310, 357 (2010) (noting that “restrictions on direct contributions are preventative” and that the Buckley Court “sustained limits on direct contributions in order to ensure against the reality or appearance of corruption”) (emphases added). The threat of corruption must be more than “mere conjecture,” Shrink, 528 U.S. at 392, and cannot be “illusory,” Buckley, 424 U.S. at 27. But a state need not produce evidence of actual instances of corruption. See McConnell v. FEC, 540 U.S. 93, 150 (2003), overruled in part on other grounds by Citizens United, 558 U.S. at 365–66; Lair v. Motl, 873 F.3d 1170, 1178 (9th Cir. 2017); Ognibene v. Parkes, 671 F.3d 174, 183 (2d Cir. 2011) (“It is not necessary to produce evidence of actual corruption to demonstrate the sufficiently important interest in preventing the appearance of corruption.”). Ultimately, “[t]he quantum of empirical evidence needed . . . will vary up or down with the novelty and plausibility of the justification raised.” Shrink, 528 U.S. at 391. The Commonwealth’s briefs describe a sordid history. In the wake of an infamous FBI investigation into public corruption in Kentucky that led to “the indictment and conviction of legislators, former legislators, and lobbyists for criminal misconduct,” known as Operation Nos. 17-6456/6505 Schickel, et al. v. Dilger, et al. Page 11 BOPTROT, the state legislature enacted the Ethics Code. Assoc. Indus. of Ky. v. Commonwealth, 912 S.W.2d 947, 950 (Ky. 1995). In the aftermath of BOPTROT, the public lost faith in its elected officials, and public standing plunged to an all-time low. Tom Loftus & Al Cross, Lies, Bribes and Videotape, The Courier-Journal, July 1, 1993. Corruption was rampant and came cheap—in some cases, legislators accepted as little as $400 from lobbyists in exchange for influencing legislation. Id.; Martin Booe, Ethics: Kentuckians Amazed that $400 Can Buy a Lawmaker, L.A. Times, April 13, 1993. Kentucky’s stated interest “[is] neither novel nor implausible.” Shrink, 528 U.S. at 391. The contribution ban—enacted against this backdrop and untouched by the 2014 amendments— plainly furthers Kentucky’s anticorruption interest. Its own supreme court agreed, rejecting several constitutional challenges to the Code’s provisions by an employer of lobbyists and holding that the state demonstrated “a compelling interest in insuring the proper operation of a democratic government and deterring corruption, as well as the appearance of corruption.” Assoc. Indus., 912 S.W.2d at 953; see § 6.606. The legislators argue that Operation BOPTROT involved only the horse racing industry, and therefore cannot serve as the basis for restrictions on all lobbyists. Given that lobbyists were caught up in BOPTROT, however, we find this argument specious. A state need not wait for the entanglement of every industry or every lobbyist in scandal before taking action. See Ognibene, 671 F.3d at 188; FEC v. Nat’l Right to Work Comm., 459 U.S. 197, 210 (1982) (“Nor will we second guess a legislative determination as to the need for prophylactic measures where corruption is the evil feared.”). Kentucky also demonstrated how the regular session contribution ban, created by the 2014 amendments, furthers this anticorruption interest. The risk of corruption stemming from contributions by employers of lobbyists or PACs during a regular session of the legislature “is common sense and far from illusory.” Ognibene, 671 F.3d at 187; Bartlett, 168 F.3d at 715–16 (upholding prohibition on in-session lobbyist and PAC contributions); Kimbell v. Hooper, 665 A.2d 44, 51 (Vt. 1995) (upholding in-session contribution ban and noting that the measure “avoid[ed] a serious appearance of impropriety”). The regular session runs, at most, from early January to March 30th (in odd-numbered years) or April 15th (in even-numbered years). Nos. 17-6456/6505 Schickel, et al. v. Dilger, et al. Page 12 Ky. Const. §§ 36, 42. Stifling direct contributions from two of the most powerful players in the political arena during these three or so months undoubtedly furthers Kentucky’s interest in preventing the appearance of corruption. See N.C. Right to Life, Inc. v. Leake, 525 F.3d 274, 291 (4th Cir. 2008) (“Direct contributions to political candidates run the greatest risk of making candidates ‘too compliant with the wishes of large’ donors.” (quoting Shrink, 528 U.S. at 389)). In the years since the Code’s enactment, history confirms that contributions from lobbyists, their employers, and PACs, as well as gifts from lobbyists, suggest quid pro quo corruption or its appearance. Ky. Right to Life, Inc. v. Terry, 108 F.3d 637, 639 (6th Cir. 1997) (“Numerous Kentucky public officials have been convicted of abusing their political offices for personal gain over the past twenty-five years.”); Preston, 660 F.3d at 737 (“We also conclude that in aiming the ban at only lobbyists, who, experience has taught, are especially susceptible to political corruption, North Carolina closely drew its enactment to serve the state interests it identified.”); Bartlett, 168 F.3d at 716 (“The appearance of corruption resulting from PAC and lobbyist contributions during the legislative session can also be corrosive.”). Further, if lobbyists’ employers and PACs were “free to contribute to legislators while pet projects sit before them, the temptation to exchange ‘dollars for political favors’ [would] be powerful.” Bartlett, 168 F.3d at 716 (citation omitted). Even though PACs and lobbyists’ employers may “have no intention of directly ‘purchasing’ favorable treatment, appearances may be otherwise.” Id. Where “the conflict of interest is apparent [and] the likelihood of stealth great,” Blount v. SEC, 61 F.3d 938, 945 (D.C. Cir. 1995), we will not require Kentucky to “experience the very problem it fears before taking appropriate prophylactic measures,” Ognibene, 671 F.3d at 188. As for the removal of the de minimis exception from the gift ban, we note that the Commonwealth enacted this exception at the same time as the contribution limit—in the immediate aftermath of the BOPTROT scandal. Removing the exception simply changed the limit on gifts from $100 to $0. Kentucky’s choice to reduce the limit to $0, we think, “goes to whether the limit is sufficiently tailored, not whether [Kentucky] had a sufficiently important interest to justify setting any [gift] limit at all.” Zimmerman v. City of Austin, 881 F.3d 378, 386 Nos. 17-6456/6505 Schickel, et al. v. Dilger, et al. Page 13 (5th Cir. 2018). But even if we required a showing that its decision to remove this exception furthers its anticorruption interest, Kentucky has done so. As KLEC’s representative explained, removing the de minimis exception—and the administrative blunders that accompanied it—helps prevent the appearance of corruption. To be sure, KLEC’s representative admitted that the de minimis exception “had not developed into an ethics problem,” but that it was an “administrative” and “public perception” problem. R. 47-1, PageID 881–82. Administering the exception led to “incorrect reports that include[d] legislators who didn’t even attend events or didn’t eat or drink at the events but they’re getting their name publicized.” Id. at PageID 883. Faced with this issue, the legislature decided to entirely close this “loophole in the law” by “paint[ing] a brighter line for the General Assembly and the public to know that legislators are not taking anything of value.” Id. at PageID 826–27. Kentucky is not an outlier. Both before the district court and on appeal, Kentucky cited the laws and experiences of other states to justify the removal of the de minimis exception. See Wagner v. FEC, 793 F.3d 1, 14 (D.C. Cir. 2015) (en banc) (noting the relevance of the “experience of states with and without similar laws” to this inquiry). The Commonwealth took this action after KLEC recommended it, grounding the recommendation on its research of governmental ethics issues, a task assigned to it by statute. See § 6.666(15). Its research yielded plentiful and detailed newspaper accounts from across the country “supporting inferences of impropriety” arising from gifts of value, Shrink, 528 U.S. at 393, including several that discussed how lobbyists and their employers skirted de minimis exceptions with tickets to sporting events, rounds of golf, and cigars. R. 64-5, PageID 3361. In addition to its recommendation, KLEC compiled these news articles into Ethics Reporters, which it disseminated monthly to all legislators, lobbyists, and employers of lobbyists. R. 64-5, PageID 3354–67.1 1The legislators cross-appeal the district court’s denial of their motion to strike these newsletters, arguing that the clips of several newspaper articles within them constitutes “inadmissible hearsay and was unauthenticated.” But because the newsletters were authenticated, see R. 82, PageID 4163–64, and plainly not offered for the truth of the matter asserted, they are not hearsay. See Biegas v. Quickway Carriers, Inc., 573 F.3d 365, 379 (6th Cir. 2009). Rather, they were offered as evidence of what was before the legislature at the time, and for their effect on KLEC’s recommendation to the legislature. Nos. 17-6456/6505 Schickel, et al. v. Dilger, et al. Page 14 And just as in Wagner, further evidence comes from other states enacting their own gift bans that do not have de minimis exceptions. See, e.g., Fla. Stat. Ann. § 112.313(2); Haw. Rev. Stat. Ann. § 84-11; Minn. Stat. Ann. § 10A.071(2); S.C. Code Ann. § 2-17-80(A); Vt. Stat. Ann. tit. 2, §§ 261(6)(a), 266(a)(2); Wisc. Stat. Ann. §§ 19.42, 19.45, 19.56(3). “The fact that many states have such laws shows that [Kentucky] is no outlier,” Wagner, 793 F.3d at 16, and that other states believe gifts of value create a threat of corruption or its appearance.