898 F.3d 209
2d Cir.2018Background
- Vermont enacted Act 90 (2014) establishing a revised campaign finance regime including a "Public Financing Option" (the Option) that grants fixed public funds to qualifying gubernatorial/lieutenant‑governor candidates in exchange for conditions on fundraising and spending (Vt. Stat. Ann. tit. 17, §§ 2981–2986).
- To qualify a candidate must collect a threshold of small "qualifying contributions" within a defined qualification period; once qualified a candidate receives fixed primary and general‑election grants but must abide by limits on accepting/expenditing other funds and on campaign announcement/fundraising timing.
- Plaintiffs (former/prospective lieutenant‑governor candidates and the Vermont Progressive Party) sued under 42 U.S.C. § 1983, challenging: (1) Section 2983(b)(1)’s cap on contributions (including coordinated party expenditures), (2) its prohibition on expending funds beyond the public grant (self‑financing), and (3) Section 2983(a)’s timing restrictions (no announcing/raising/spending above $2,000 before Feb 15).
- The district court dismissed all claims under Rule 12(b)(6), construing statutory exemptions (Section 2901(4)) to apply to related expenditures and leaving room to refile if state courts interpreted the statute differently; denied fee claim under § 1988.
- On appeal the Second Circuit affirmed: it held the Option is voluntary and candidates may choose between public funds subject to conditions or unlimited private financing; therefore the Option’s conditions do not burden First Amendment rights of candidates, supporters, or parties, and the plaintiffs were not prevailing parties for fee purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contribution Limit (§2983(b)(1)) | Limit on contributions and coordinated party expenditures unconstitutionally burdens speech/association of PFCs, supporters, and parties | Participation is voluntary; candidates can decline public funds and raise private money; limits necessary to preserve integrity of public financing | Affirmed — no First Amendment burden because choice is voluntary; even if burdened, limit satisfies intermediate scrutiny as closely drawn to important interests |
| Expenditure Limit (ban on expending beyond grant) | Prohibits self‑financing and must satisfy strict scrutiny; not justified by anti‑corruption interests | A voluntary condition of accepting public funds; Buckley permits conditioning grants on expenditure ceilings; candidate may forgo grant to self‑finance | Affirmed — no burden because acceptance is voluntary; Davis distinguished; condition permissible as part of public financing option |
| Timing Restrictions (§2983(a)) | Bar on announcing or raising/spending >$2,000 before Feb 15 disadvantages PFCs versus privately financed opponents | Timing rule is a condition of the grant (not an eligibility barrier like Buckley/Green Party) and candidates can choose private fundraising; restrictions rationally related to administrative and anti‑fraud interests | Affirmed — analyzed as grant condition; no fundamental right burden; survives rational‑basis review |
| Attorney's Fees (§1988) | District court’s statutory construction (exemptions in §2901(4) apply to related expenditures) was favorable and functionally declaratory, so plaintiffs prevailed | Dismissal was on merits and any favorable construction did not materially alter legal relationship or provide judicial relief | Affirmed — plaintiffs were not prevailing parties; favorable legal statements without enforceable relief do not warrant fees |
Key Cases Cited
- Buckley v. Valeo, 424 U.S. 1 (public financing may be conditioned on expenditure limits; contribution limits subject to lesser scrutiny)
- Republican Nat'l Comm. v. FEC, 616 F.2d 1 (2d Cir. en banc) (upholding public financing conditions; voluntariness preserves First Amendment rights)
- Randall v. Sorrell, 548 U.S. 230 (addressing contribution/expenditure caps; recognized special party‑related interests)
- FEC v. Colorado Republican Fed. Campaign Comm., 533 U.S. 431 (party coordinated spending limits analyzed under contribution‑limit framework)
- Davis v. FEC, 554 U.S. 724 (personal expenditure penalty struck; distinguished from voluntary public‑funding conditions)
- McCutcheon v. FEC, 572 U.S. 185 (limits justified to prevent quid‑pro‑quo corruption and anticircumvention interest)
- Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598 (fee awards require a judicially cognizable change in legal relationship)