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
capacity as a member of the North
No. 07-1454
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
2 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
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-Defendants-
Appellees,
and
KEITH M. KAPP; J. MICHAEL BOOE,
in his official capacity as Vice-
Chairperson 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
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 3
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
4 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
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.
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 5
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 Attor-
ney 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 Caro-
lina, 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. Divel-
bliss, 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 constitution-
6 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
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, partic-
ipating 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 (nonparticipat-
ing 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 uncon-
stitutional. 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
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 7
dismissed the plaintiffs’ claims for failure to state a claim. The plain-
tiffs 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 Caro-
lina’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 can-
didate is opposed in the general election. Id. § 163-278.65(b). In 2006
the base amount of funding for a contested state supreme court cam-
paign was $216,650, which equaled 175 times the filing fee for that
office. A certified candidate does not receive an automatic disburse-
ment of funds for a primary election, but the candidate may spend in
a primary the amounts raised to satisfy the statute’s eligibility require-
ments.
1
These numbers, as well as others throughout the opinion, are calcu-
lated 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 out-
come of the case.
8 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
Participating candidates are also eligible to receive "matching
funds" in specified circumstances.2 Id. § 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 opposi-
tion" is defined to include the amount any one nonparticipating candi-
date has raised or spent (whichever is greater) plus the amount that
independent entities have spent to support the nonparticipating candi-
date or to oppose the participating candidate. Id. § 163-278.67(a).
The Act provides separate trigger amounts for a primary and gen-
eral 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 cam-
paign. 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 exam-
ple, 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 per-
cent (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 expendi-
tures supporting a nonparticipating candidate (or supporting or oppos-
ing a participating candidate) must file a similar report within twenty-
four hours of making total expenditures in excess of $5,000. Id. After
these initial reports, the candidates and independent entities must
2
A recent amendment substituted the term "matching funds" for "res-
cue funds," which was used in the original version of the Act. Act to
Strengthen the Matching Funds Provision of the Judicial Public Cam-
paign Act, N.C. Sess. Laws 2007-510, § 1(a)-(c). This substitution has no
effect on the substance of the Act.
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 9
"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 nonpartici-
pating candidate from accepting contributions from third parties dur-
ing 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 nonpartici-
pating 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 cam-
paigns. 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 Car-
olina 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 trace-
able 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.
10 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
According to the complaint, NCRL-IEPAC is a political action
committee organized for the purpose of making independent expendi-
tures on behalf of political candidates it supports. NCRL-IEPAC
alleges that it chose not to make expenditures on behalf of nonpartici-
pating 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 elec-
tion. 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 regula-
tions by alleging "an intention to engage in a course of conduct argu-
ably 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 suffi-
cient 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
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 11
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’ allega-
tions 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 NCRL-
IEPAC 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 NCRL-
IEPAC 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 provi-
sions 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 repeti-
tion, 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
12 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
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 match-
ing 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 participa-
tion 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 recog-
nize that a public financing system may provide significant incentives
for participation without crossing the line into impermissible coer-
cion. E.g., Gable, 142 F.3d at 949.
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 13
The plaintiffs do not make coercion a central aspect of their argu-
ments, and, indeed, we conclude that North Carolina’s public financ-
ing 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 Car-
olina system. See Gable, 142 F.3d at 948-49. Under Kentucky’s sys-
tem 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 mil-
lion, the cap is removed and every dollar in contributions received by
the participating candidate is again matched with two additional pub-
lic 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 unconsti-
tutional coercion, especially in light of the fact that judicial cam-
paigns 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 (uphold-
ing 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] contribu-
14 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
tions and independent expenditures made on behalf of [nonparticipat-
ing] 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 candi-
date 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 gov-
ernment 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 nonparticipat-
ing candidates or independent entities. Daggett, 205 F.3d at 464-65;
see also Gable, 142 F.3d at 947-49 (Sixth Circuit upholding a match-
ing funds scheme against a constitutional challenge without address-
ing 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 NCRL-
IEPAC) 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 plain-
tiffs’ First Amendment rights. To the contrary, the distribution of
these funds "furthers, not abridges, pertinent First Amendment val-
ues" by ensuring that the participating candidate will have an opportu-
nity 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
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 15
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 stan-
dards. 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 nonpartici-
pating 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
16 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
majority upheld the Minnesota provision and reasoned that the provi-
sion 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 appli-
cation of the Day analysis, provides additional support for our deter-
mination 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 unconstitu-
tional. To the extent that the plaintiffs (or those similarly situated) are
in fact deterred by § 163-278.67 from spending in excess of the trig-
ger 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 require-
ments are unconstitutional. The section contains two basic require-
ments. 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 par-
ticipating candidate. Second, after this initial report is filed, the candi-
dates 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
interest), but this argument is inconsistent with Buckley and subse-
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 17
quent cases. In Buckley the Supreme Court held that there must be "a
‘relevant correlation’ or ‘substantial relation’ between the govern-
mental 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 gov-
ernmental 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 nar-
row tailoring is not required, the state need not show that the Act
achieves its purposes in the least restrictive manner possible. In Buck-
ley, 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 inter-
ests. 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
18 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
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 informa-
tion, deterring actual corruption and avoiding any appearance thereof,
and gathering the data necessary to enforce more substantive election-
eering 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 require-
ments 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 con-
tributions during the twenty-one days prior to an election. Their cen-
tral argument is that the twenty-one-day ban cannot withstand strict
scrutiny because it is not narrowly tailored to a compelling state inter-
est. 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 mak-
ing expenditures supporting the candidate.
3
The 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 expen-
ditures, this argument fails as well.
NORTH CAROLINA RIGHT TO LIFE v. LEAKE 19
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 contri-
bution 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 dur-
ing which contributions may be made and received, it must satisfy
McConnell’s lesser standard of being "closely drawn to match a suffi-
ciently 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 dan-
ger 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 suffi-
ciently 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.
20 NORTH CAROLINA RIGHT TO LIFE v. LEAKE
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 twenty-
one 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 elec-
tions.
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 Caroli-
na’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 judi-
ciary, since impartiality is uniquely important to the integrity and
credibility of the courts." Id. The concern for promoting and protect-
ing 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 jus-
tice 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.