January 10
Gallardo v. Marstiller
No. 28-1263, 11th Cir.
Preview by Jacob Orgel, Online Editor
In Gallardo v. Marstiller, the Supreme Court is set to determine the extent of third-party tort liability state that Medicaid agencies can tap into for recovery on medical expenses provided to Medicaid recipients.
Petitioner Gianna Gallardo was permanently incapacitated at age thirteen when a truck hit her as she stepped out of a school bus. See Brief for Petitioner at 1, Gallardo v. Marstiller, No. 20-1263 (U.S. filed Sept. 15, 2021). Her ongoing medical care posed a great expense, and her parents sued the responsible entities for recovery of her “future medical expenses, lost earnings, and pain and suffering” as well as “past medical expenses paid by Medicaid.” Id. After Gallardo settled for less than the full amount she initially sought, Florida’s Medicaid agency imposed a lien to reimburse itself for medical expenses it had covered, pulling from compensation directed to cover Gallardo’s past medical expenses as well as her future medical expenses. See id. Florida determined the value of its lien based on a one-size-fits-all calculation in its state Medicaid statute, which requires a recipient to present clear and convincing evidence to rebut. Gallardo v. Dudek, 263 F. Supp. 3d 1247, 1255 (N.D. Fla. 2017).
Gallardo brought the present litigation to challenge Florida’s lien. She argues that the lien is an overreach not permitted by the Medicaid Act. Brief for Petitioner at 1. Gallardo points to the language of 42 U.S.C. § 1396a(a)(25)(H), which indicates that a state can only recover from third-party payments insofar as they are directed for “medical assistance for health care items or services furnished [by Medicaid] to an individual” (emphasis added). From this phrasing, Gallardo extracts that a state Medicaid agency can only obtain entitlement to third-party compensation for expenses it has already covered. See id. Thus, she concludes, Florida cannot collect on her settlement compensation, which was explicitly designated for her past and future medical expenses.
The Northern District of Florida agreed with Gallardo. See Gallardo v. Dudek, 263 F. Supp. 3d 1247 (N.D. Fla. 2017). The district court discussed found Florida’s lien barred by the broad language of the Medicaid Act’s anti-lien and anti-recovery provisions—both of which prevent states from dipping into compensation obtained by Medicaid recipients through settlements or legal proceedings—unless an exception applied. Id. at 1250. The district court determined that the only potentially applicable exceptions were the “third-party liability and assignment provisions,” which permit state Medicaid agencies to seek recovery if legal liability is found after medical expenses have already been covered by Medicaid. Id. Analyzing the statutory language and legislative intent, the district court determined that these provisions limit a state’s ability to recover from a Medicaid recipient to compensation explicitly dedicated for past medical expenses. See id. at 1255. The district court then found that Florida’s one-size-fits all method for determining the percentage of third-party entitlements from which it could recover to be arbitrary, and its “clear and convincing evidence” standard for rebuttal to be an unconstitutional violation of due process. Id. at 1256. The district court thus granted Gallardo’s motion for summary judgement and found Florida’s Medicaid recovery framework to be preempted by federal law. Id. at 1260.
On appeal, the Eleventh Circuit reversed, taking a different view of the proper analytical framework. See Gallardo v. Dudek, 963 F.3d 1167 (11th Cir. 2020). The Circuit Court started by identifying two traditional state powers involved in the state administration and recovery of Medicaid—“states’ traditional authority to ‘protect the health and safety of their citizens’ and ‘to provide tort remedies to [their] citizens.’” Id. at 1175 (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)). The Eleventh Circuit decided that the federal government would not have cavalierly preempted these traditional state powers without explicit language to that effect, and thus, it determined that if the text is plausibly susceptible to more than one interpretation, it should opt for the reading that disfavors preemption. See id. The Court found that the Medicare Act is capable of a more general reading; rather than limiting state recovery to settlements and judgements explicitly for past medical expenses, the Act allows for recovery from any compensation pool dedicated to medical expenses generally. See id. at 1176. The Eleventh Circuit also reversed the district court finding that Florida’s “clear and convincing evidence” threshold for rebutting its one-size-fits-all recovery approach was unconstitutional, instead deeming the approach to be a legitimate method of parsing through the limits of recovery the state could exact from liable third parties. Id. at 1182.
The Supreme Court will now render a final judgement on these issues, determining the scope of third-party compensation recoverable by state Medicare agencies in the process. Oral arguments will be held on January 10 and will feature an allotment of time for the Solicitor General.
January 11
Johnson v. Arteaga-Martinez
No. 19-896, 3rd Cir.
Preview by Joshua Keyser, Senior Online Editor
Hearing arguments for Johnson v. Arteaga-Martinez , the Supreme Court will consider the first of two cases dealing with noncitizens detained pending removal from the United States, to be followed by Garland v. Aleman Gonzalez later in the day. Both cases deal with whether, after prolonged pre-removal detention, a person being removed is entitled to supervised release or a bond hearing.
Antonio Arteaga-Martinez, a citizen of Mexico, entered and was removed from the United States in 2012, after which he and his family were subjected to violence from a street gang in Mexico. Brief for Respondent at 8, Johnson v. Arteaga-Martinez, No. 19-896 (U.S. filed Nov. 22, 2021). Arteaga-Martinez returned to the United States, staying in the country for six years. He was detained by Immigration and Customs Enforcement (ICE) in May of 2018, and the government reinstated his removal. Expressing that he feared for his life if he returned to Mexico, Arteaga-Martinez sought asylum and administrative review by the Department of Homeland Security, which it denied. Id. at 9.
After four months of detention, Arteaga-Martinez then petitioned for a writ of habeas corpus ordering his release, at which point the government argued that his continued release would be “statutorily permissible” until he had been detained for six months. Id. Both parties agree that, in a hearing before a magistrate judge in the Middle District of Pennsylvania, the government conceded that Arteaga-Martinez was entitled to a bond hearing after six months of detention under the Third Circuit decision Guerrero-Sanchez v. Warden York Cty. Prison, 905 F.3d 208 (3d Cir. 2018). Brief for Respondent at 7; Brief for Petitioner at 10, Johnson v. Arteaga-Martinez, No. 19-896 (U.S. filed Oct. 14, 2021). The government then petitioned for a writ of certiorari to challenge the Third Circuit interpretation of the relevant statute.
At issue is interpretation of 8 U.S.C. 1231(a)(1)(A), which establishes a ninety-day “removal period” during which the government generally must secure a noncitizen’s removal. Though Section 1231 allows for detention beyond ninety days for several categories of noncitizens, it does not explicitly provide how long such a noncitizen may be detained beyond the removal period. The government argues that the Third Circuit interpretation of Section 1231 is therefore based on nothing in the text of the statute itself; in this view, the six-month detention cutoff was essentially created “out of thin air.” Brief for Petitioner at 10. What is more, the Supreme Court recently stated explicitly that detention under Section 1231 does not entitle an “alien” to a bond hearing at all. Id. at 13–14 (citing Johnson v. Guzman Chavez, 141 S. Ct. 2271 (2021)).
In response, Arteaga-Martinez contends that the Third Circuit’s six-month line was grounded in Supreme Court precedent. He asserts that the Court previously spoke to the issue in Zadvydas v. Davis, 533 U.S. 678 (2001). See Brief for Respondent at 14–16. In Zadvydas, the Court held that, considering the due process concerns created by prolonged civil detention and the ambiguous language of Section 1231, detention is no longer “presumptively reasonable” after six months; if removal is no longer “reasonably foreseeable” at that point, the noncitizen must be released. Id. at 16. Though Zadvydas dealt with a different category of noncitizen, Arteaga-Martinez argues that the injury to his right to due process is no less pressing than in that case, and, since his removal is no longer reasonably foreseeable, he should be entitled to supervised release. See id. at 16–18.
If the Court decides in Arteaga-Martinez’s favor, it will not create a new path to long-term residence in the United States for noncitizens, but would allow for some of those facing removal to remain in the country on supervised release rather than in detention. In the likely event that the Court limits its holding to the same class of detainees as Arteaga-Martinez, those seeking asylum, that would be a major victory for many noncitizens languishing in detention long-term. But he will face a Supreme Court majority skeptical of statutory constructions beyond the text itself, so the government’s strict textualist argument seems likely to win the day.
Garland v. Gonzales
No. 20-322, 9th Cir.
Preview by Neal Billig, Online Editor
In Garland v. Gonzalez, the Supreme Court will make a decision that will substantially impact the due process rights available to thousands of noncitizens placed in immigration detention.
On review, the Court will address two issues: “(1) [w]hether an alien who is detained under 8 U.S.C. § 1231 is entitled by statute, after six months of detention, to a bond hearing at which the government must prove to an immigration judge that the alien is a flight risk or a danger to the community; and (2) whether, under 8 U.S.C. § 1252(f)(1), the courts below had jurisdiction to grant classwide injunctive relief.” SCOTUSblog (Jan. 9, 2021, 10:45 AM), https://www.scotusblog.com/case-files/cases/garland-v-gonzalez/.
Two noncitizen plaintiffs, Esteban Aleman Gonzalez and Eduardo Gutierrez Sanchez, brought an action against former Attorney General William Barr as representatives of a certified class alleging that they were wrongfully detained for more than six months without an individualized bond hearing. Aleman Gonzalez v. Barr, 955 F.3d 762, 764 (9th Cir. 2020), cert. granted sub nom. Garland v. Gonzalez, 210 L. Ed. 2d 1009 (Aug. 23, 2021). Both plaintiffs are Mexican citizens who claim they returned to the U.S. after an initial deportation ruling because of the persecution or torture they faced in their home country. See Brief for the Respondents at 10, Garland v. Gonzalez, No. 20-322, (U.S. filed Dec. 16, 2021). For instance, “Plaintiff Gutierrez endured torture in Mexico due to his sexual orientation.” Id. The district court certified a class of all individuals and “the court granted summary judgment for Respondents on their statutory claim that Section 1231(a)(6) required an IJ bond hearing for detention beyond six months.” Id. at 12. The Ninth Circuit upheld, concluding that the district court “correctly determined that Plaintiffs are likely to succeed on their § 1231(a)(6) statutory claims,” and thereby affirmed the district court’s grant of a preliminary injunction. Aleman Gonzalez v. Barr, 955 F.3d at 790.
Petitioners maintain that, even if the government detains Respondents beyond six months, the statutory language of Section 1231(a)(6) requires no hearing and Respondents lack concrete and sufficient injury from the Government to bring a claim. See Brief for Amicus Curiae Immigration Reform Law Institute in Support of Petitioner at 2, Garland v. Gonzalez, No. 20-322 (U.S. filed Oct. 21, 2021). Petitioners argue that, “because detained aliens can simply abandon their challenge to removal and leave the United States, any detention represents a ‘self-inflicted injury’ not caused by the Government.” Id. at 5.
Supporters of Respondents believe that the Immigration and Customs Enforcement’s post-order custody review process does not comply with due process requirements for detained noncitizens under 8 U.S.C. § 1231 as “noncitizens in prolonged detention are regularly denied release based on little or no reasoning.” Brief for Amicus Curiae Asian Americans Advancing Justice, et al. in Support of Respondents at 2, Garland v. Gonzalez, No. 20-322 (U.S. filed Nov. 24, 2021). For Respondents, “only a guarantee of an individualized hearing before a neutral adjudicator, with the burden placed on the government to provide evidence, can provide the level of procedural protection that the government purports to embrace.” Id. at 16–17. Respondents claim that they will face long periods of detention, up to years, while their immigration claims are adjudicated if the Supreme Court fails to uphold the bond hearings. Id.
Briefs of amici from informer immigration judges and board of immigration appeals members, as well as retired federal judges, warned of increased administrative burdens if the Ninth Circuit decision was not upheld. Former immigration judges contend “prolonged detention of noncitizens during withholding-only proceedings makes it more difficult for IJs to administer those proceedings fairly and efficiently.” Brief for Amicus Curiae Former Immigration Judges and Board of Immigration Appeals Members in Support of Respondents at 2, Garland v. Gonzalez, No. 20-322 (U.S. filed Nov. 29, 2021). On the second issue of allowing noncitizen class actions, Former Federal Judges conclude, “[b]ased on their collective experience as federal district judges, amici believe that the Government’s position would impose grave burdens on overworked district courts facing a judicial emergency.” Brief for Amicus Curiae Retired Federal Judges in Support of Respondents at 2–3, Garland v. Gonzalez, No. 20-322 (U.S. filed Nov. 29, 2021).
January 12
Boechler, P.C. v. Commissioner of Internal Revenue
No. 20-1472, 8th Cir.
Preview by Jessica Ojeda, Online Editor
The Supreme Court will hear arguments for Boechler, P.C. v. Commissioner of Internal Revenue, one of the first cases of the new year, on January 12, 2022. Boechler involves a procedural question of “whether the 30-day time limit to file a petition for review in the Tax Court of a notice of determination from the commissioner of internal revenue in 26 U.S.C. § 6330(d)(1) is a jurisdictional requirement or a claim-processing rule subject to equitable tolling.” Boechler, P.C. v. Commissioner of Internal Revenue, SCOTUSblog, https://www.scotusblog.com/case-files/cases/boechler-p-c-v-commissioner-of-internal-revenue/ (last visited Jan. 8, 2022).
The underlying dispute in this case emerged from a 2015 tax dispute. David Thomas, Tiny Fargo Law Firm to Take on IRS at SCOTUS, Reuters (Oct. 1, 2021), https://www.reuters.com/legal/litigation/tiny-fargo-law-firm-take-irs-scotus-with-help-latham-2021-09-30/. Defender Boechler, P.C. is a firm run by Jeanette Boechler, who is the firm’s sole attorney. See id. In 2016, the IRS informed the firm about a discrepancy with its 2012 taxes and, when Boechler did not respond, imposed a $19,250 fee. See id. Boechler was later informed followed a 2017 hearing before the IRS Office of Appeals that she had thirty days to file a review petition in the U.S. Tax Court or a levy would be imposed. See id. Boechelr said that she mailed the petition one day late. See id.
The IRS and Boechler are thus locked in a contest over whether the courts can even hear her original petition due to the late filing. The IRS argued that the courts have no jurisdiction, whereas a judge on the U.S. Tax Court and a majority panel at the 8th U.S. Circuit Court of Appeals sided with the IRS. See id. Boechler counters that the 8th Circuit’s ruling conflicts with a more recent decision out of the U.S. Court of Appeals for the D.C. Circuit, which held in 2019 that a materially similar statutory rule involving a 30-day deadline was not a jurisdictional bar. See id.
Four amici curiae from a range of sources, including several national tax foundations, law schools, tax professionals and law professors, have been filed in support of the petitioner. Boechler, P.C. v. Commissioner of Internal Revenue, SCOTUSblog, https://www.scotusblog.com/case-files/cases/boechler-p-c-v-commissioner-of-internal-revenue/ (last visited Jan. 8, 2022). Several of these briefs speak to how a favorable decision for Boechler could benefit low-income taxpayers who “frequently miss filing deadlines, even when acting in good faith,” adding that with “adequate due diligence, amici believe that the low-income taxpayer community would benefit were this Court to rule that Section 6330(d)(1) is non-jurisdictional and subject to equitable tolling.” Brief of the Center for Taxpayer Rights and the National Consumer Law Center as Amici Curiae in Support of Petitioner at 2, Boechler, P.C. v. Commissioner of Internal Revenue, No. 20-1472 (U.S. filed Nov. 22, 2021).
January 18
Shurtleff v. Boston
No. 20-1800, 1st Cir.
Preview by Jessica Ojeda, Online Editor
Given current political context, Shurtleff v. Boston involves an interesting question of government speech versus private speech, i.e., religion. Respondents in this case are the City of Boston and Robert Melvin in his official capacity as Commissioner of the City of Boston Property Management Department. Brief of Respondents City of Boston, et al. at II, Shurtleff v. Boston, No. 20-1800 (U.S. filed Dec. 15, 2021). Commissioner Melvin is a successor in office to Gregory T. Rooney who made the original decision at issue in the case. Id. Petitioner Harold Shurtleff has sued on behalf of Camp Constitution, an organization which seeks to “enhance the understanding of the country’s Judeo-Christian moral heritage” and for which he is both co-founder and Director. Shurtleff v. Boston, Oyez (last accessed Jan. 12, 2022) http://www.oyez.org/cases/2021/20-1800.
This case began in 2017 when Petitioner submitted a request to use one of the cities three public flag poles at City Hall Plaza for a flag-raising event. See Brief for Respondents at 14. Specifically, Petitioner sought to raise a “Christian flag” in connection with Constitution Day and Citizenship Day. Id. Commissioner Rooney ultimately declined the request out of concern that its religious nature could be viewed as an endorsement by the city of a particular religion in violation of the First Amendment’s Establishment Clause (“Congress shall make no law respecting an establishment of religion.”) Id. at 14–15; U.S. Const. amend. I. Commissioner Rooney also conducted a brief investigation of prior requests, finding the city had never previously approved requests to raise religious flags. Brief for Respondents at 14.
Petitioner then sued, alleging that the denial violated his right to free speech under the First Amendment, as well as the Establishment Clause and Fourteenth Amendment’s Equal Protection Clause. Id. at 16. Respondents originally asserted two defenses: (1) that the City’s flag-raising program was government speech consistent with precedent, and (2) that, even if the flag-raising program were a public forum, the City could define the program to exclude religious speech to avoid Establishment Clause concerns. Id. at 16–17. Because the 1st Circuit agreed with Respondent’s first argument, the alternative was never reached and was later dropped on appeal. Id. at 18.
As currently before the Supreme Court, the issue has become more closely tied to the public forum doctrine. The public forum doctrine has been defined as “an analytical tool used in First Amendment jurisprudence to determine the constitutionality of speech restrictions implemented on government property.” David L. Judson Jr., Public Forum Doctrine, Middle Tenn. State Univ. (last updated Jan. 8, 2020), https://www.mtsu.edu/first-amendment/article/824/public-forum. The Supreme Court most directly tackled this doctrine in the 1983 case of Perry Education Association v. Perry Local Educators’ Association, 460 U.S. 37, 103 S. Ct. 948 (1983).
In Perry, the court laid out three distinct types of public forums, each of which is subject to varying degrees of government speech restrictions:
- Traditional, or quintessential: speech restrictions are very limited and government may impose only reasonable, content-neutral time, place, and manner restrictions.
- Limited, or designated, public forums: the government may discriminate against certain classes of speakers or speech with cause – for example, by limiting access to public school meeting rooms to speakers engaged only in school-related activities.
- Nonpublic forums: government may restrict speech freely so long as the restriction is reasonable and the restriction does not discriminate based on the speakers’ viewpoints.
Petitioners contend that the “[t]he City, by policy and practice, designated its City Hall Flag Poles a public forum for private flag raising events, accessible to all through a minimal application process with only ministerial oversight.” Reply of Harold Shurtleff, et al. at 1, Shurtleff v. Boston, No. 20-1800 (U.S. filed Jan. 7, 2022). The denial, they argue, was therefore not content-neutral and constituted impermissible viewpoint discrimination. Id. Respondents alternatively contend that the flag poles were not a public forum and that they instead constitute protected “government speech” and “government property which the City may use in a manner best suited to its goals.” Id. at 6.
Six amici curiae have been filed in support of Respondents with eighteen for petitioners, including ones filed by the ACLU and the U.S. Government. Briefs for Petitioners indicate shared concerns that the 1st Circuit’s interpretation constitutes an unreasonable expansion of government speech that could allow government actors to subsume forums for private speech at will. See generally Brief of United States as Amicus Curiae, Shurtleff v. Boston, No. 20-1800 (U.S. filed Nov. 22, 2021); Brief of American Civil Liberties Union and American Civil Liberties Union of Massachusetts as Amici Curiae, Shurtleff v. Boston, No. 20-1800 (U.S. filed Nov. 22, 2021).
January 19
Concepcion v. United States
No. 20-1650, 1st Cir.
Preview by Neal Billig, Online Editor
Concepcion reaches the Court against a background where federal sentencing guidelines under the “Anti-Drug Abuse Act of 1986 established a 100-to-1 crack-to-powder-cocaine ratio in minimum and maximum sentences for certain federal drug offenses,” which “led to unfair and racially disparate sentences.” Brief for Amicus Curiae Drug Policy Alliance and the Law Enforcement Action Partnership in Support of Petitioner at 3, Concepcion v. United States, No. 20-1620 (U.S. filed Nov. 22, 2021). Congress, in 2010, passed the 2010 Fair Sentencing Act “to rectify, at least to some degree, this disparity.” Brief for Amicus Curiae Brief Due Process Institute, et al., in Support of Petitioner at 3, Concepcion v. United States, No. 20-1620 (U.S. filed Nov. 22, 2021). Because “these reforms did not apply retroactively to defendants sentenced before the effective date of the Fair Sentencing Act,” Congress passed to the First Step Act in 2018, which “sought to make the reforms of the Fair Sentencing Act retroactive.” Id. Since its passage, the First Step Act has been seen by Criminal Justice reform advocates as “providing a long overdue remedy for years of harsh and racially disproportionate sentences for crack cocaine.” Peter J. Tomasek, United States v. Conception, Interrogating Justice 1 (2021), https://interrogatingjustice.org/wp-content/uploads/2021/04/FirstStepAct_USvsConcepcion_WhitePaper_02sm.pdf.
In 2009, Petitioner, Carlos Concepcion, plead guilty to charges of distribution of, and intent to distribute, crack cocaine, and was sentenced to 228 months in prison by the district court. United States v. Concepcion, 991 F.3d 279, 281 (C.A.1 Mass. 2021). While servicing his sentence, Congress passed both the Fair Sentencing Act and the First Step Act. Id. Conception filed for resentencing, but the district court denied his motion. Id. Appealing to the First Circuit, Conception contended “that the district court that the district court was obliged to, but did not, update and reevaluate the constellation of sentencing factors adumbrated in 18 U.S.C. § 3553(a),” and “the district court should have recalculated his guideline sentencing range (GSR) anew under the sentencing guidelines in effect at the time of resentencing.” Id. at 282. The First Circuit ruled against Concepcion’s appeal: “The short of it is that the scope of a First Step Act resentencing is more circumscribed than the defendant envisions.” Id. at 289. The Court of Appeals court held, “the district court must place itself at the time of the original sentencing and keep the then-applicable legal landscape intact, save only for the changes specifically authorized by sections 2 and 3 of the Fair Sentencing Act.” Id.
On appeal, Concepcion argues that statutory interpretation and established principles of sentencing laws and judicial decision-making favor allowing courts to consider current facts and law when deciding whether to impose a reduced sentence. Brief for Petitioner at 17, Concepcion v. United States, No. 20-1620 (U.S. filed Nov. 15, 2021). Even if the Court concludes that Section 404(b) is ambiguous after statutory interpretations, Petitioner contends that “the rule of lenity requires this Court to adopt petitioner’s interpretation of the law.” Id. at 13.
Concepcion is the rare Supreme Court case where there is united political consensus across the ideological spectrum. Of the ten amici briefs filed in response to this case, all ten were in support of the petitioner. Conservative-leaning non-profits such as the American Conservative Union Foundation and Americans for Prosperity Foundation along with the progressive-leaning non-profits such as the American Civil Liberties Union stressed the popularity of the First Step Act as a “bipartisan effort to improve our criminal legal system,” Brief for Amicus Curiae Due Process Institute, et al., in Support of Petitioner at 3, that “passed the Senate 87–12 and passed the House 358–36.” Brief for Amicus Curiae Americans for Prosperity Foundation in Support of Petitioner at 2, Concepcion v. United States, No. 20-1620 (U.S. filed Nov. 22, 2021). Amici warn that a Supreme Court reversal is necessary to save the act because “some courts of appeals, including the First Circuit, have tried to thwart the First Step Act’s purpose” by allowing “district courts to pretend that the past few decades never happened.” Brief for Amicus Curiae American Conservative Union Foundation in Support of Petitioner at 2–3, Concepcion v. United States, No. 20-1620 (U.S. filed Nov. 22, 2021).
Federal Election Commission v. Ted Cruz for Senate
No. 21-12, D.D.C.
Preview by Jacob Orgel, Online Editor
In Federal Election Commission v. Ted Cruz for Senate, the Supreme Court is set to determine whether limits placed on reimbursement of campaign contributions made by the candidate is a violation of the First Amendment. Its decision will have a notable impact on federal campaign finance and the ability of the Federal Election Commission (“FEC”) to regulate certain types of campaign contributions.
The FEC was established in a 1974 amendment to the Federal Election Campaign Act of 1971 (FECA), Pub. L. No. 92-225, 86 Stat. 3, tasked with the goal of regulating the finances of election campaigns for federal office. See 52 U.S.C. § 30106. FECA, along with Supreme Court First Amendment precedent, administrative decisions made by the FEC, and the additional regulations of the Bipartisan Campaign Reform Act of 2002 (BCRA), Pub. L. No. 107-155, 116 Stat. 81, provide certain rights and place certain limits on campaign finance. One such limit, contained in BCRA § 304, prohibits candidates from repaying personal loans of more than $250,000 from post-election campaign contributions. 52 U.S.C. § 30116(j). Senator Ted Cruz and his campaign committee, Ted Cruz for Senate, challenge this limit as a burden on political speech and a violation of the rights protected by the First Amendment.
During Senator Cruz’s successful 2018 campaign for reelection, the Senator made two loans totaling $260,000 to his campaign. See Ted Cruz for Senate v. Fed. Election Comm’n, No. 19-CV-908-NJRAPMTJK, 2021 WL 2269415, at *2 (D.D.C. June 3, 2021). After the election, pursuant to Section 304, the campaign was only able to repay $250,000. Id. The remaining $10,000 was then deemed to be a campaign contribution by the Senator rather than a repayable loan. Id. Senator Cruz and his campaign then waged their constitution challenge against FEC to the campaign regulation. Id.
The District Court for the District of Columbia applied the analytical framework developed by the Supreme Court in McCutcheon v. Federal Election Commission, 572 U.S. 185 (2014) to determine whether the loan repayment limit infringes on First Amendment rights. See Ted Cruz for Senate v. Fed. Election Comm’n, WL 2269415, at *3. The analysis first requires a determination of whether the regulation burdens political speech, and if the court concludes it does, the analysis then requires a “closely drawn scrutiny” standard to determine the strength of the government interest served by the regulation and how effectively the regulation serves that interest. Id. The district court found that because Supreme Court precedent has recognized that “financing for political campaigns implicates the freedom to speak and associate,” expenditures and contributions to political campaigns alike implicate the right to free speech. Id. The court found that the regulation burdens candidates who wish to make loans to their campaigns—a recognized form of First Amendment speech—by limiting the amount of money they can loan their campaign with the expectation of repayment. Id. at *4.
Finding First Amendment rights implicated, the court proceeded to apply heightened scrutiny to the statute. Id. at *6. Under closely drawn scrutiny, a regulation will be upheld “‘if the state demonstrates a sufficiently important interest and employs means closely drawn to avoid’ abridging First Amendment freedoms.” Id. (quoting McCutcheon, 572 U.S. at 197). Accepting the FEC’s assertion that the government’s interest was in eliminating quid pro quo corruption, the court found that there was insufficient evidence that this regulation would serve that interest. See Ted Cruz for Senate, WL 2269415, at *7–8. The court found that the FEC provided inadequate evidence that quid pro quo corruption arises specifically from “post-election contributions to retire a candidate’s personal debt,” noting that the FEC was unable to point to a single example of corruption occurring through this mechanism in states where no such repayment limit exists. Id. at *7. The court noted that the regulation was overinclusive, applying equally to winning candidates and losing candidates even though the anticorruption rationale would only take hold if a candidate was victorious, but also underinclusive, failing to cover potential corruption stemming from repayment of loans not made by the candidate. Id. at 11. Thus, the court found the regulation to be unconstitutional.
The Supreme Court granted certiorari to assess whether Senator Cruz and his campaign committee had standing to bring the constitutional challenge, and, if so, to determine whether the regulation violates the Free Speech Clause of the First Amendment. Oral argument is set for January 19.
