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Long Beach Area Chamber of Commerce v. City of Long Beach

April 30, 2010

LONG BEACH AREA CHAMBER OF COMMERCE, A NON-PROFIT CALIFORNIA MUTUAL BENEFIT CORPORATION, ON BEHALF OF ITSELF AND ITS MEMBERS; LONG BEACH AREA CHAMBER OF COMMERCE PAC; LONG BEACH AREA CHAMBER OF COMMERCE- MAYORAL PAC; LONG BEACH AREA CHAMBER OF COMMERCE-CITY COUNSEL PAC, PLAINTIFFS-APPELLEES,
v.
CITY OF LONG BEACH, DEFENDANT-APPELLANT.
LONG BEACH AREA CHAMBER OF COMMERCE, A NON-PROFIT CALIFORNIA MUTUAL BENEFIT CORPORATION, ON BEHALF OF ITSELF AND ITS MEMBERS; LONG BEACH AREA CHAMBER OF COMMERCE PAC; LONG BEACH AREA CHAMBER OF COMMERCE-MAYORAL PAC; LONG BEACH AREA CHAMBER OF COMMERCE-CITY COUNSEL PAC, PLAINTIFFS-APPELLANTS,
v.
CITY OF LONG BEACH, DEFENDANT-APPELLEE.
LONG BEACH AREA CHAMBER OF COMMERCE, A NON-PROFIT CALIFORNIA MUTUAL BENEFIT CORPORATION, ON BEHALF OF ITSELF AND ITS MEMBERS; LONG BEACH AREA CHAMBER OF COMMERCE PAC; LONG BEACH MAYORAL PAC; LONG BEACH AREA CHAMBER OF COMMERCE-CITY COUNSEL PAC, PLAINTIFFS-APPELLEES,
v.
CITY OF LONG BEACH, AREA CHAMBER OF COMMERCE DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Central District of California Philip S. Gutierrez, District Judge, Presiding. D.C. No. CV-06-01497-PSG.

The opinion of the court was delivered by: Wardlaw, Circuit Judge

FOR PUBLICATION

OPINION

Argued and Submitted October 28, 2009-Los Angeles, California

Before: Alex Kozinski, Chief Judge, Dorothy W. Nelson and Kim McLane Wardlaw, Circuit Judges.

OPINION

"[I]t is our law and our tradition that more speech, not less, is the governing rule" under the First Amendment. Citizens United v. FEC, 130 S.Ct. 876, 911 (2010). "More speech" often means "more money." "This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money." Buckley v. Valeo, 424 U.S. 1, 19 (1976). Therefore, "[a] restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached." Id. That political spending is constitutionally protected "speech" has become a "cardinal tenet" of the Supreme Court's campaign finance jurisprudence. Emily's List v. FEC, 581 F.3d 1, 5 (D.C. Cir. 2009).

We must decide whether the Long Beach Campaign Reform Act ("LBCRA"), which prohibits "persons" from making any independent expenditures if they receive contributions above certain amounts, is constitutional as applied to the Long Beach Area Chamber of Commerce ("Chamber") and its affiliated political action committees ("Chamber PACs"). Because the Chamber lacks standing, and because the LBCRA does not withstand scrutiny as applied to the Chamber PACs, we vacate in part and reverse in part the district court's judgment that the LBCRA is unconstitutional as applied to the Chamber but constitutional as applied to the Chamber PACs.

BACKGROUND

The City adopted the LBCRA in 1994. It provides that "[a]ny person who makes independent expenditures supporting or opposing a candidate shall not accept any contribution" in excess of $350 to $650, depending upon the office for which the candidate is running. Long Beach, Cal., Ordinances §§ 2.01.310, 2.01.610. "Person" is broadly defined to include "any individual, organization or political action committee whose contributions or expenditure activities are financed, maintained or controlled by any corporation, labor organization, association, political party or any other person or committee." Id. § 2.01.210(D). "Independent expenditures" are "expenditure[s] made by any person . . . in connection with a communication which expressly advocates the election or defeat of a clearly identified candidate . . . but which is not made to or at the behest of the affected candidate or committee." Cal. Gov't Code § 82031; Long Beach, Cal., Ordinances § 2.01.220 (adopting state law definition). An expenditure is not "independent" if it involves the control, direction, cooperation, consultation, coordination, request, or suggestion of a candidate. See Cal. Gov't Code § 82015; Cal. Admin. Code tit. 2, § 18225.7; see also Long Beach, Cal., Ordinances § 2.01.310 (discussing contribution limitations).

The Chamber is a non-profit mutual benefit corporation consisting of 1,400 dues-paying members, ninety percent of which are small businesses employing fewer than ten employees. Dues for Chamber members with fewer than ten employees range from $350 to $535, and dues for Chamber members with between ten and one-hundred employees range from $560 to $1,330. Some members with greater numbers of employees pay dues in excess of $10,000. The parties stipulate that the Chamber's dues constitute "contributions" under the LBCRA.*fn1 Because some of those dues exceed the LBCRA's contribution limitations, the LBCRA prohibits the Chamber from making any independent expenditures.

The Chamber's bylaws, however, do not permit it to make contributions or independent expenditures. Rather, the Chamber participates in City politics through the Chamber PACs - the Long Beach Area Chamber of Commerce PAC, the Long Beach Area Chamber of Commerce Mayoral PAC, and the Long Beach Area Chamber of Commerce City Council PAC - which are separate but affiliated organizations that make independent expenditures in support of select candidates. The Chamber PACs receive contributions from Chamber members who choose to direct a portion of their dues to the Chamber PACs. Non-Chamber members may also contribute to the Chamber PACs.

The Chamber and Chamber PACs ("Plaintiffs") sued to enjoin enforcement of the LBCRA, arguing that its contribution and expenditure limitations violate their rights of speech and association. On April 11, 2007, the district court ruled that the LBCRA is unconstitutional as applied to the Chamber. Relying on our decision in Lincoln Club of Orange County v. City of Irvine, 292 F.3d 934 (9th Cir. 2002), the district court applied strict scrutiny review because the LBCRA imposed a severe burden on the Chamber's freedoms of speech and association. As the district court explained, following enactment of the LBCRA, "[t]he Chamber is forced to alter its dues or organizational structure if it wishes to participate in city-wide elections and also wishes to continue to welcome members with more than 10 employees." That is, absent a drastic overhaul of its membership composition or its dues schedule, the Chamber would be precluded from making any independent expenditures even if its bylaws authorized it to do so.

Plaintiffs and the City each provided the district court with a proposed form of judgment purportedly reciting the district court's ruling. The district court rejected the Chamber's proposed form of judgment, which declared the LBCRA "unconstitutional as applied to Plaintiffs and other persons similarly situated" (emphasis added). Instead, it chose the City's proposed form of judgment, declaring the LBCRA "unconstitutional as applied to Plaintiff Long Beach Area Chamber of Commerce and other persons similarly situated" (emphasis added). Neither proposed form of judgment expressly addressed the Chamber PACs.

The judgment, entered on May 4, 2007, was timely appealed by the City. It then occurred to the parties that the district court may not have resolved the question of the LBCRA's constitutionality as applied to the Chamber PACs. Naturally, the parties disagreed on this point. The Plaintiffs argued that the favorable judgment also embraced the Chamber PACs, as the Plaintiffs had recited in their proposed form of judgment, and the City contended otherwise. On July 12, 2007, upon motion by the Plaintiffs, the district court clarified its April 11, 2007, ruling, stating that it had not resolved the constitutionality of the LBCRA as applied to the Chamber PACs in the earlier order. It then "explicitly" concluded that "the Long Beach ordinance is constitutional as applied to the PACs." The district court applied the less demanding "closely drawn" level of scrutiny because it found that the Chamber PACs, which lack the Chamber's membership or dues structures, are less burdened by the LBCRA than is the Chamber. Therefore, the City's interests in preventing corruption or the appearance of corruption in its political process sufficiently justified the LBCRA's contribution limitations and consequent prohibition on spending as applied to the Chamber PACs. The Chamber PACs filed their notice of appeal on July 23, 2007.

JURISDICTION AND STANDARD OF REVIEW

The district court exercised jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291. "We review a district court's grant of summary judgment de novo." Humphries v. County of Los Angeles, 554 F.3d 1170, 1185 n.10 (9th Cir. 2009). Here, the parties filed cross-motions for summary judgment and stipulated as to the relevant facts. We therefore review the district court's legal determinations, including constitutional rulings, de novo. See Bjustrom v. Trust One Mortgage Corp., 322 F.3d 1201, 1205 ...


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