9th Upholds Flurry of HI Election-Finance Laws

by Katherine Proctor Courthouse News May 20, 2015

HONOLULU (CN) - Several of Hawaii's campaign-finance laws challenged by a construction firm are not unconstitutional, the 9th Circuit ruled Wednesday.

A-1 A-Lectrician Inc., its CEO Jimmy Yamada and another individual sued the Hawaii Spending Commission in 2010, claiming that the state's "non-candidate" committee donation caps, advertising definition and disclaimer requirements, and its ban on government contractors donating to candidates were all unconstitutional.

Under Hawaii's campaign-spending laws, organizations and companies like A-1 that spend more than $1,000 during an election period must register as a non-candidate committee and comply with spending caps and reporting rules.

A federal judge found for the commission on all claims and A-1 appealed, arguing that some of the commission's definitions were unconstitutionally vague, that its disclaimer and reporting requirements were unconstitutional burdens of speech and that the ban on contributions by contractors was unconstitutional as specifically applied to A-1.

In the 9th Circuit panel's 58-page opinion, Circuit Judge Raymond Fisher found that the commission's definitions of "expenditure," "non-candidate committee" and "advertisement" were not unconstitutionally vague.

He said that the commission's "proferred construction" was not "inconsistent with the plain language of the statute," and that it was "neither unreasonable nor the product of 'strained statutory construction,'" so the commission's definitions did not violate due-process rights.

On A-1's claims that Hawaii's reporting and disclosure requirements violate the First Amendment, the panel also upheld the district court's ruling.

"Hawaii's non-candidate committee and reporting requirements indisputably serve important governmental interests," Fisher wrote.

The commission's narrowing constructions on the statute - such as the $1,000 spending threshold - ensure that an organization "must be more than incidentally engaged in political advocacy before it will be required to register and file reports as a non-candidate committee," the panel found.

"Given these limits and the extent of A-1's past and planned political advocacy, we have little trouble concluding that the regulations are constitutional as applied to A-1," Fisher wrote for the panel. "Hawaii has an interest in ensuring the public can follow the money in an election cycle, regardless of whether it comes from a single-issue, political advocacy organization or a for-profit corporation such as A-1."

He added that the reporting and disclosure requirements are "substantially related to Hawaii's important interests in informing the electorate, preventing corruption or its appearance, and avoiding the circumvention of valid campaign-finance laws."

"Because the burden of complying with this disclosure scheme is modest compared to the significance of the interests being served, we uphold Hawaii's non-candidate committee reporting and disclosure requirements as applied to A-1," Fisher wrote.

The panel also found that Hawaii's requirement for disclaimers as to the affiliation of an advertiser with a candidate in political advertisements is constitutional since, like the disclosure and reporting requirements, the disclaimer requirement serves an important governmental interest and imposes only a modest burden on A-1's First Amendment rights.

Similarly, the panel upheld the state's contractor-contribution ban, which "serves sufficiently important governmental interests by combating both actual and the appearance of quid pro quo corruption," Fisher wrote.

He continued: "There is no question the ban is closely drawn to the state's anti-corruption interest as a general matter, and we decline to revisit the Legislature's judgment not to craft a still-narrower provision. Hawaii's contractor-contribution ban is a reasonable response to the strong appearance of corruption that existed at the time of the Legislature's actions."

However, the panel reversed the court's judgment on the award of A-1's attorney's fees, holding that the plaintiffs are entitled to fees from a prior interlocutory appeal on which they prevailed.

The panel referred that matter to the 9th Circuit's appellate commissioner. 

PDF: Text of Court Ruling

DN: 9th Circuit rules Hawaii’s campaign spending disclosure laws not unconstitutional