Wake Forest Law Review

By John Van Swearingen

On March 24, 2017, the Fourth Circuit issued a published opinion in the prisoner civil rights case Porter v. Clarke. Plaintiffs, originally four Virginia death row inmates, filed a complaint in the United States District Court for the Eastern District of Virginia alleging that the conditions of their confinement amounted to cruel and unusual punishment violative of the Eighth Amendment. One inmate was executed during the course of this action, leaving three inmates as Plaintiffs. Defendants, the Director of the Virginia Department of Correction and the Warden of the Sussex I State Prison, thereafter changed the policies at issue in the complaint. The district court subsequently dismissed Plaintiff’s action for mootness. Plaintiffs timely appealed, claiming their action is not moot.

Facts and Procedural History

In November 2014, when Plaintiffs filed this lawsuit, the Virginia Department of Corrections was operating under a pair of 2010 policies that governed the living conditions of death row inmates. Plaintiffs spent twenty-three hours a day in seventy-one-square-foot cells, alone, with a steel bed, a desk, and a combination commode-and-sink. Death row inmates could not have “contact” visits with anyone; all visitation was separated by plexiglass. The warden had unlimited discretion in granting contact visits with immediate family under “extreme circumstances.”

Inmates were allotted one hour of “outdoor recreation” five days a week. This consisted of an empty outdoor cell similar in size to the inmates’ living cells. Inmates had zero access to any group behavioral, educational, vocational, or religious services.

In August 2015, Defendants established new interim guidelines permitting death row inmates one-and-a-half-hour weekly contact visits with immediate family, one-and-a-half-hour weekend and holiday contact visits with other approved visitors, one-and-a-half-hour outdoor recreation sessions five days a week, daily one-hour indoor recreation sessions with up to three other inmates, and a daily fifteen-minute shower. Defendants built a new outdoor recreation area for group activities and an indoor recreation dayroom for group behavioral, educational, vocational, and religious services.

In December 2015, Plaintiffs and Defendants filed cross-motions for summary judgment. Defendants never explicitly moved for dismissal on the grounds of mootness. At the motion hearing, Defendants also noted that they would not take any action binding them to the new guidelines, stating instead that the fluid nature of corrections require that they be able to increase security back to “lockdown status” if need be.

In May 2016, the district court requested an update from Defendant’s on the status of the interim guidelines. Defendants filed an affidavit stating they had updated to new policies providing one-and-a-half-hour outdoor recreation five days a week, one-hour indoor recreation with up to four inmates daily, fifteen minute daily showers, weekly one-and-a-half-hour contact visitation sessions with immediate family and one approved other visitor, non-contact weekend and holiday visitation, and extended visitation sessions granted on a case-by-case basis. Per Defendants’ affidavit, the new policies will be reviewed annually and updated in no later than three years.

In July 2016, the district court granted summary judgment for Defendants’ despite the Defendants’ refusal to neither admit that the pre-2015 inmate conditions violated the Eighth Amendment nor offer any guarantee that the pre-2015 policies would not be restored. The lower court dismissed the Plaintiff’s cross-motion as moot, and Plaintiffs timely appealed.

Mootness Requires More Than a Voluntary Cessation of the Challenged Behavior

Under Article III § 2 of the United States Constitution, federal courts are deprived of subject matter jurisdiction when litigation ceases to involve a “case or controversy.” In other words, as noted by the United States Supreme Court in Powell v. McCormack, “a case is moot when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.” 395 U.S. 486, 496 (1969).

However, in City of Mesquite v. Aladdin’s Castle, Inc., the Supreme Court also noted that “a defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice.” 455 U.S. 283, 289 (1982). As noted by the First Circuit in ACLU of Mass. v. U.S. Conference of Catholic Bishops, a savvy litigant could otherwise render itself immune to litigation by voluntary ceasing a challenged behavior upon the filing of a complaint, then resume that behavior following dismissal for mootness. 705 F.3d 44, 54–55 (1st Cir. 2013).

Instead, a Defendant seeking dismissal for mootness must, pursuant to the Supreme Court’s holding in Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., meet the heavy burden of showing that “it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur.” 528 U.S. 167, 190 (2000). This burden is not met if, as in the Fourth Circuit’s decision in Pashby v. Delia, a defendant retains the authority to reinstate a challenged policy. 709 F.3d 307, 316–17 (4th Cir. 2013).

Nothing here bars Defendants from returning to the original policies addressed in Plaintiff’s complaint. Indeed, they have stated that the policies may be reinstated in some form if a situation demanded “lockdown” of the inmates. Further, Defendants expressly refused to commit to the revised policies or admit that the original policies violated Plaintiff’s Eighth Amendment rights. The Fourth Circuit expressly declined to support or denounce the original policies, noting that there may be valid “penological rationale” for reverting to the original policies as described if a situation rendered those policies appropriate. However, the Fourth Circuit noted that this very possibility rendered the dismissal of Plaintiff’s complaint for mootness improper.

Disposition

The Fourth Circuit reversed the district court’s judgment and remanded for further proceedings. Since Defendants expressly retained the discretion to reinstate the policies challenged by Plaintiffs, the voluntary dismissal of those policies did not render the action moot.

By Kelsey Hyde

On March 17, 2017, the Fourth Circuit published an opinion in the civil matter of Sharma v. USA International, vacating the district court’s grant of summary judgment and remanding for further proceedings. In departing from the lower court’s ruling, the Court found the U.S. District Court for the Eastern District of Virginia improperly granted the defendant’s motion for summary judgment based solely on the contested issue of plaintiff’s purported damages.

Factual & Procedural Background

The plaintiffs in this case, Jatinder Sharma & his corporation Haymarket Fast Foods, Inc., were involved in a business transaction with defendants Khalil Ahmad and Mahrah Butt, partners at USA International, LLC. Sharma became interested in purchasing two restaurants– a Checkers and an Auntie Anne’s– from defendants upon learning how these restaurants were generating high sales. Throughout negotiations for the purchase of these restaurants, Sharma reviewed USA International’s tax returns and financial statements, which indicated the combined sales of the restaurants for the most recent months were about $75,000 per month.

The parties’ first purchase agreement specified a price of $720,000, and made the sale contingent on the stores collectively acquiring $90,000 in monthly sales in the two months prior to a settlement. Subsequent financial statements revealed lower monthly sales, thus the price was later reduced to $600,000 and the conditional-sale provision was eliminated from the final agreement. Sharma formed the entity Haymarket Fast Foods, Inc. in relation to the transaction, and also applied for a loan at his bank to secure part of the purchase price. His application represented that the restaurants’ average monthly sales based on the figures presented in the financial statements provided by defendants.

Shortly after the closing, Sharma noticed sales well below the figures that had been conveyed by defendants. Sharma looked further at other elements of the business– namely the supply orders, employee’s personal observations, and bank records– in an attempt to uncover the discrepancy. This investigation made Sharma realize that, based on the supplies available, the amount of sales defendants had purported to make were simply not possible; he then suspected that defendants had inflated their sales on the income statements provided to him before closing. Further, employees who had been working for defendants revealed to Sharma that defendant Butt had, on numerous occasions, rung up high sales for food not ordered by customers, and then directed employees not to prepare the food that coincided with these orders. Moreover, Bank of America accounts revealed that deposits attributable to the restaurant were substantially lower than those represented in the statements given to Sharma.

In response to these findings, Sharma filed on action for fraud against the defendants, alleging they had inflated sales figures and lied during negotiations, resulting in fraudulent inducement to pay a higher price for the business than it was truly worth. He proposed that damages be calculated by either (1) multiplying weekly sales by 36, or (2) multiplying monthly earnings by 48, either of which meant to provide the proper valuation of the business.

Defendants filed a motion for summary judgment, claiming plaintiffs had failed to sufficiently establish the materiality of the alleged misrepresentations, their reliance on the misrepresentations, and their damages (i.e. three of the particular elements necessary to succeed on a fraud claim). The district court found that plaintiffs had adequately shown the materiality of and reliance on defendants’ misrepresentation, but had indeed failed to provide enough evidence for a factfinder to estimate with reasonable certainty the amount of damages they sustained. Namely, the court rejected the two methods proposed by plaintiff for finding the actual value of the two restaurants, concluding that neither method conformed to any generally accepted methods for valuing a business, nor sufficiently proved they were independently reliable. Thus, because damages are a necessary element of a fraud claim under controlling state law, the court granted summary judgment. On appeal, the sole issue presented regarded the district court’s finding of insufficient evidence of damages.

Elements of the Claim & Standards to be Met on Motion for Summary Judgment

On a motion for summary judgment, the court takes the record in the light most favorable to the non-movant party. The moving party is entitled to a grant of summary judgement as a matter of law if they show there is no genuine dispute as to any material fact. F.R.C.P. 56(a).

To establish a claim for fraud under Virginia law, a plaintiff must show: (1) false representation, (2) of a material fact, (3) made intentionally and knowingly, (4) with intent to mislead, (5) reliance by the party misled, and (6) resulting in damages to the party so misled. Evaluation Research Corp. v. Alequin, 439 S.E.2d 387, 390 (Va. 1994). Because all such elements are necessary, failure to satisfy any one element is enough to bar relief for a fraud claim, as the district court found in their ruling based on failure to establish damages.

Under Virginia law, when a dispute involves the transfer of goods or property, damages are measured by the difference between the asset’s actual value at the time of contract and the asset’s purported value if the representations made had instead been true. Courts have previously treated sales prices as sufficient evidence of value, especially in arms’ length transactions. Virginia law maintains that plaintiffs need not prove damages with absolute certainty, but a plaintiff still must provide sufficient evidence to allow a factfinder to make an intelligent, probable estimate of the damages or losses allegedly sustained.

Fourth Circuit Finds Plaintiffs’ Evidence Regarding Estimated Damages Sufficient to Survive Motion for Summary Judgement

The Court concluded that plaintiffs had indeed met their burden and had put forth sufficient evidence to allow an estimate of damages by a factfinder. Namely, the Court emphasized that the parties’ arms-length transaction would allow a reasonable factfinder to conclude that the restaurants’ final sales price represented their value, as needed for the calculation of damages. Viewing the record most favorably for the plaintiffs, the Court found that negotiations surrounding the final price of the restaurants evidenced that both parties’ relied on a valuation of the businesses derived from a multiple of weekly and/or monthly sales. Moreover, the entire content of negotiations between the parties clearly revolved around the restaurants’ weekly or monthly sales, from Sharma’s initial interest in purchasing the restaurant to the later financial statements used by defendants to further persuade Sharma to go forward with the purchase. The Court even performed its own calculations to affirm this result, despite the defendants’ refusal to confirm the calculation methods used to arrive at the sales price.

However, the Court also emphasized that the actual multiplier-numbers used or derived are not dispositive in this case, and that defendants could indeed challenge those numbers as a matter of fact later in the case. Instead, the true question was whether plaintiffs provided sufficient evidence, as a matter of law, for a factfinder to estimate a probable calculation of damages. In the Fourth Circuit’s opinion, the plaintiffs did just that by presenting their own estimate with reasonable precision and support for their own calculations, using an accepted approach based on income and computing their results with specific numbers provided by defendants to estimate the purchase price.

Vacated & Remanded

Based on their finding that Plaintiff’s purported estimates of damages were acceptable and sufficient to create a material dispute of fact, the Fourth Circuit vacated the District Court’s grant of summary judgement and remanded for further proceedings to continue plaintiff’s fraud claims.

By John Van Swearingen

On March 13, 2017, the Fourth Circuit issued a published opinion in the criminal case United States v. Winston. Robert Winston (“Appellant”), currently serving a 275-month sentence for a federal firearms charge from 2002, filed a motion for post-conviction relief under 28 U.S.C. § 2255 (2012) in the United States District Court for the Western District of Virginia. Appellant asserted the sentencing enhancements applied to his case were invalidated by Johnson v. United States (“Johnson II“), a 2015 Supreme Court decision striking part of the Armed Career Criminal Act (“ACCA”) and narrowing the scope of “violent felonies” included thereunder. No. 13–7120, slip op. at 15 (U.S. June 26, 2015). The district court rejected Appellant’s arguments. On appeal, the Fourth Circuit reversed the district court, holding Virginia’s common law robbery no longer qualified as a “violent felony” under the ACCA, and remanded the case for further proceedings.

Facts and Procedural History

In 2002, Appellant was sentenced to 275 month’s imprisonment for a federal firearms charge. Appellant’s sentence was enhanced under the ACCA, which mandates a fifteen-year minimum sentence for any person convicted of a firearms offense who has three prior “violent felonies” or serious drug offenses. At the time, the ACCA had categories of “violent felonies:” those established under the statute’s force clause and those under the statute’s residual clause, which included burglaries, arsons, and any other conduct that posed a serious risk of injury to another person. Appellant had four prior then-qualifying convictions: (1) rape under the Uniform Code of Military Justice (“UCMJ”), (2) common law robbery in Virginia, (3) possession of cocaine with intent to distribute in Virginia, and (4) a federal conviction for distribution of cocaine base.

After the Supreme Court published its 2015 opinion in Johnson II, which limited the definition of “violent felony” under the ACCA by striking the residual clause for vagueness, Appellant filed the instant action asserting that neither the UCMJ rape conviction nor the Virginia robbery conviction satisfied the new definition of “violent felony.” Without the ACCA sentencing enhancements, Appellant’s maximum sentence in 2002 would have been ten years, meaning Appellant would be immediately available for release.

The district court has not yet addressed Appellant’s rape conviction. The matter before the Fourth Circuit focused solely on Appellant’s common law robbery conviction. The government argued two points to challenge Appellant’s motion for relief. First, the government argued that, since Appellant could not prove that his robbery conviction was defined a “violent felony” under the now-stricken residual clause of the ACCA, Appellant did not rely on a new rule of constitutional law and was thus foreclosed from requesting relief. Second, the government argued that common law robbery still satisfied the limited definition of “violent felony” under the ACCA.

The district court disagreed with the government’s procedural assertion but agreed with the government’s substantive assertion, and it accordingly held the Virginia crime of common law robbery was a “violent felony” under the ACCA. Appellant timely filed the instant appeal.

Appellant Relied on a New Rule of Constitutional Law for the Motion for Post-Conviction Relief.

28 U.S.C. §§ 2244(b)(2)(A), 2244(b)(4) (2012) requires that motions for post-conviction relief rely on a new rule of constitutional law. The record never established that Appellant’s common law robbery conviction was only considered for enhancement by the sentencing court under the residual clause of the ACCA struck in Johnson II. Thus, the government argued, Appellant could not show reliance on the holding in Johnson II and was, therefore, barred from moving for relief.

The Fourth Circuit agreed with the district court that the sentencing court’s failure to disclose the clause or clauses of the ACCA under which it considered Appellant’s convictions could not be fatal to Appellant’s claim. The Fourth Circuit held that any movant seeking post-conviction relief, where that movant’s conviction may have been enhanced based on the now-void residual clause struck in Johnson II, may challenge their sentence. To hold otherwise, according to the Fourth Circuit, would punish defendants for a sentencing court’s discretion in failing to disclose the clauses of the ACCA under which it evaluated the defendant’s enhancements.

The Virginia Crime of Common Law Robbery Is Not a Violent Crime under the ACCA

Appellant challenged the district court’s holding that the Virginia crime of common law robbery was a “violent felony” under the ACCA. Since the residual clause was struck from the ACCA, all violent felonies must meet the definition established in the statute’s force clause, 18 U.S.C. § 924(e)(2)(B)(i) (2012), which requires an element of “use, attempted use, or threatened use of physical force against the person of another.” The force clause was clarified in the Supreme Court’s 2010 decision in United States v. Johnson (“Johnson I”), which defined “physical force” in the statute to mean only “violent force” that could cause injury or pain. No. 08–6925, slip op. at 6 (U.S. Mar. 2, 2010).

The Fourth Circuit noted that the Supreme Court’s decision in Moncrieffe v. Holder required the reviewing court to consider the “minimum conduct criminalized” by a state criminal law. No. 11–702, slip op. at 5 (U.S. Apr. 23, 2013). In Virginia, a common law robbery conviction can be sustained where a defendant steals the property of another by “violence or intimidation.” Pierce v. Commonwealth, 138 S.E.2d 28, 31 (Va. 1964). The “violence” element of the crime can be satisfied by the bare minimum of physical force needed to overcome a victim’s resistance. Maxwell v. Commonwealth, 183 S.E. 452, 454 (Va. 1936).

A conviction for common law robbery could therefore be sustained where only a minimum amount of “violence” is used – for example, turning someone’s body in order to grab their purse. Injurious “violent force” is not an element of the crime. The crime is therefore not a “violent felony” for sentencing enhancements under the ACCA. Thus, the Fourth Circuit reversed the district court’s holding and held the Virginia crime of common law robbery did not meet the standard set by the force clause of the ACCA, as clarified in Johnson I.

Disposition

The Fourth Circuit affirmed the district court’s holding regarding the procedural matter but reversed the district court’s substantive holding regarding the status of common law robbery as a “violent felony.” Thus, the district court’s judgment was vacated, and the case was remanded for further consideration regarding Appellant’s rape conviction under the UCMJ.

By Ali Fenno

On February 21, 2017, the Fourth Circuit issued a published opinion in the civil case of vonRosenberg v. Lawrence. In vonRosenberg, the Fourth Circuit addressed whether the district court abused its discretion by staying a federal proceeding until the conclusion of a similar state action involving different parties and claims. After examining the abstention standard from Colorado River Water Conservation District v. United States, the Fourth Circuit vacated the abstention order and remanded the case back to the district court, holding that the district court abused its discretion by abstaining in favor of state court proceedings that were not parallel to the federal court proceedings.

Facts

Both this federal proceeding and the related state proceeding concerned whether the Diocese of South Carolina (the “Diocese”) dissociated itself from the Protestant Episcopal Church in the United States (the “Episcopal Church”). Bishop vonRosenberg, the federal plaintiff-appellant, claims that the Episcopal Church appointed him as Bishop of the Diocese after removing Bishop Lawrence, the federal defendant-appellee, from the position. But Bishop Lawrence contends that the Episcopal Church could not have removed him because the Diocese of South Carolina had dissociated from the Episcopal Church and acted independently of the organization. Thus, each party claimed to be the Bishop of the Episcopal Church in South Carolina.

State Claim

Litigation over the dissociation matter first began when the Diocese filed suit against the Episcopal Church in a South Carolina state court, claiming that the Diocese had dissociated from the Episcopal Church and sought “resolution of their real and personal property rights.” The Episcopal Church then counterclaimed for trademark infringement and dilution under the Lanham Act. It also requested that Bishop Lawrence and others be added as counterclaim defendants, but the state trial court denied the request in September 2013.

The state court issued its final order on February 3, 2015. It held that the Diocese had validly dissociated from the Episcopal Church and owned the property at issue, and permanently enjoined the Episcopal Church from using the Diocese’s marks. The Episcopal Church appealed, and the South Carolina Supreme Court heard oral arguments on September 23, 2013. No opinion from the state supreme court has yet been issued.

Federal Claim

Bishop vonRosenberg filed this federal action on March, 13, 2013, seeking declaratory-injunctive relief against Bishop Lawrence. He claimed that Bishop Lawrence violated the Lanham Act by falsely advertising himself as the Bishop of the Diocese. But the district court abstained the proceeding in favor of the state court proceedings in August 2013. The court reasoned that it had broad authority to decline jurisdiction on cases seeking declaratory relief. On appeal, the Fourth Circuit vacated the abstention order on the grounds that the district court had applied the wrong abstention standard; the district court should have applied the standard for actions involving both declaratory and non-declaratory relief from Colorado River Water Conservation District v. United States. The Fourth Circuit remanded the case so this correct standard could be applied.

On remand, the district court again abstained in favor of the state proceedings, and Bishop vonRosenberg appealed.

Failure to Meet the “Exceptional Circumstances” Abstention Standard

The Fourth Circuit began its analysis by establishing that Colorado River is a narrow standard; it requires that abstention of jurisdiction be justified by “exceptional circumstances.” The Fourth Circuit identified the first step in this “exceptional circumstances” test to be a determination of whether the state and federal cases are parallel. It listed three guiding principles for this determination: (1) the federal and state parties should have more in common than merely the litigation of substantially similar issues; (2) the parties themselves should be nearly identical; and (3) despite overlapping of facts, there must not be serious doubt that the state action would not resolve all the claims. The Fourth Circuit then noted that even if the if the factual circumstances are sufficiently parallel, Colorado River requires that a handful of procedural factors be balanced before abstaining.

In applying these principles to this case, the Court first observed that the parties in the two cases are not the same. Neither Bishop Lawrence nor Bishop vonRosenberg were parties to the state action. Furthermore, the two courts were not litigating the same claims. The state court looked only at the Episcopal Church’s false advertising claim, not that of Bishop vonRosenberg. Thus, because the state and federal cases involved different parties and different claims, the cases were not parallel as required by Colorado River‘s “exceptional circumstances” standard.

Conclusion

The Fourth Circuit concluded that the state and federal proceedings failed to meet Colorado River’s “exceptional circumstances” standard because, as they involved different parties and different claims, they could not be considered parallel cases. Accordingly, it vacated the abstention order and remanded the case back to the district court.

By John Van Swearingen

On January 24, 2017, the Fourth Circuit issued a published opinion in the criminal case United States v. Agyekum. In the United States District Court for the Southern District of West Virginia, Kofi Agyekum (“Appellant”) plead guilty to two counts of structuring transactions, forfeiting over $2,300,000 in cash assets. Appellant challenged his sentence on two grounds: first, that sentencing enhancements based on involvement in a drug conspiracy were not “relevant conduct” with respect to his structuring convictions, and second, that sentencing enhancements based on his role as a pharmacist did not constitute “relevant conduct” with respect to the same convictions. Additionally, Appellant contended that the district court did not adequately ensure that he understood the procedural protections waived in his plea agreement. The Fourth Circuit affirmed Appellant’s sentence, holding that the Appellant’s involvement in a drug conspiracy and role as a pharmacist were within the scope of “relevant conduct.” Additionally, Appellant adequately understood the waivers of rights involved with his plea agreement.

Facts and Procedural History

In October, 2012, Appellant and his wife opened A+ Care Pharmacy in Barboursville, West Virginia. Appellant had total control over the operations of the business. Appellant’s wife was the licensed pharmacist, but she operated solely under Appellant’s control.

A confidential informant (“CI”) involved in a 2014 oxycodone trafficking ring investigation notified federal investigators that he had been filling prescriptions at A+ Care Pharmacy since November 2012. The CI made several controlled buys under supervision of the investigating agents in which the Appellant charged the CI an abnormally high price to fill out-of-state oxycodone prescriptions, doctored receipts to avoid leaving a paper trail, and discussed permitting the purchase of oxycodone without a prescription.

The investigation uncovered that Appellant was regularly filling ten to eighteen prescriptions a week for an organized drug ring headquartered in Kentucky with operations throughout the southeast United States. In spring of 2014, Appellant began selling oxycodone to the head of the organization without a prescription for around $15 per pill, and on one occasion, accepted a vehicle as payment. A+ Care Pharmacy was the third largest distributor of oxycodone in the state, and the drug comprised 70% of its business.

During this time, Appellant opened numerous bank accounts with several different financial institutions around town. Appellant used multiple accounts to avoid making cash deposits of $10,000 or more, which are subject to federal reporting. From March to August, 2014, Appellant deposited almost $470,000 in accounts at five banks, never depositing more than $10,000 into a single account on a single day.

In August, 2014, investigating agents executed a search warrant at A+ Care Pharmacy, seizing 51,000 pills of oxycodone, $68,000 in cash hidden in the pharmacy’s office, over $440,000 in cash stored in two safe deposit boxes, and 20 bank accounts owned by Appellant. Over $2,300,000 in assets were seized. Appellant was arrested.

Appellant was indicted with conspiracy to illegitimately distribute oxycodone, aiding and abetting the illegitimate distribution of oxycodone, forty counts of money laundering, and eleven counts of structuring cash transactions to avoid reporting.

After six months in jail, Appellant agreed to plead guilty to two counts of structuring transactions, forfeit over $2,300,000 in assets, and waive the procedural rights to any future challenges to the forfeiture. Appellant initially refused the plea agreement because of the forfeiture term, but eventually acknowledged to the district court that he understood the forfeiture term and accompanying waiver and accepted the plea deal.

Appellant’s sentencing report included multiple enhancements, including two to which Appellant objected: (1) enhancement based on Appellant’s role as a “leader” or “manager” within the criminal drug conspiracy pursuant to U.S.S.G. § 3B1.1(c), and (2) enhancement based on Appellant’s abuse of a position of trust pursuant to U.S.S.G. § 3B1.3. Appellant’s objections centered on the assertion that neither the Appellant’s participation in the drug conspiracy nor his role managing a pharmacy constituted “relevant conduct” with respect to his transaction structuring convictions as outlined in U.S.S.G. § 1B1.3. Additionally, Appellant claims that the district court did not properly ensure that he understood the waiver of procedural protections involved in his plea deal.

A Leadership Position In A Conspiracy Was “Relevant Conduct” With Respect To Structuring Cash Deposits Arising Out Of That Conspiracy

Appellant’s argument centers on the belief that enhancements for “relevant conduct” are limited strictly to the behaviors associated with the convictions. Here, those convictions were for structuring bank transactions. Therefore, Appellant argues, the only applicable enhancements must arise from his conduct as a bank customer.

U.S.S.G. § 1B1.3(a) defines “relevant conduct” in the scope of sentencing more broadly than the conduct considered for criminal liability. See United States v. McVey, 752 F.3d 606, 610 (4th Cir. 2014). “Relevant conduct,” therefore, can include preparatory conduct, conduct to avoid detection, and other conduct related to the commission of the charged offense.

But for the illicit nature of Appellant’s participation in a drug trafficking conspiracy, Appellant would not have been receiving large cash payments on a regular basis. Additionally, Appellant only structured the transactions to avoid the reporting requirements that would have alerted federal authorities to the cash-intensive nature of his dealings. Therefore, the court noted, Appellant’s participation in the drug conspiracy was “relevant conduct” for the purpose of sentence enhancement. Thus, if Appellant was in a leadership position in the conspiracy, the sentence enhancement was appropriate.

Appellant was in sole operational control of A+ Care Pharmacy, and directed the pharmacy’s operations regarding the filling of out-of-state prescriptions, mandated the acceptance of cash only for oxycodone, set the price for oxycodone transactions based on risk, and advised members of the conspiracy to also acquire prescriptions for non-narcotic drugs in order to reduce suspicion. The district court, therefore, was proper in determining Appellant had a leadership role in the drug conspiracy, and the sentence enhancement was therefore appropriate.

Abuse Of The Position Of Pharmacy Manager Was “Relevant Conduct” With Respect To Structuring Cash Deposits Arising Out Of That Position

Appellant also challenges the sentence enhancement based on the abuse of his position managing a pharmacy – a position of public trust – because his role was not “relevant conduct” with respect to the structured transactions.

Having determined that the pharmaceutical operations were within the scope of “relevant conduct,” the court then considered whether Appellant was abusing a position of public trust. The purpose of the enhancement is to punish those “who take advantage of a position that provides them with the freedom to commit a difficult-to-detect wrong.” United States v. Brack, 651 F.3d 388, 393 (4th Cir. 2011). Additionally, the defendant must have some sort of relationship to his victim that involves trust. United States v. Caplinger, 339 F.3d 226, 236 (4th Cir. 2003).

Appellant exploited his position by purchasing oxycodone from a legal distributor at a level that exceeded his actual lawful uses. Additionally, Appellant took advantage of his position as both a husband and a manager to force his wife to fill prescriptions for a drug trafficking ring. Appellant doctored records to conceal his activities from the West Virginia Board of Pharmacy. Thus, Appellant was using his unique position managing a pharmacy in order to facilitate the drug trafficking operations – “relevant conduct” underlying the structured transactions.

Appellant Fully Understood His Waiver Of Rights With Respect To Forfeiture

Appellant contended that the district court failed to ensure that he fully understood the rights he waived with respect to his asset forfeiture. However, the record on appeal included several exchanges in open court wherein Appellant (1) claimed multiple times to understand the terms of the plea agreement, (2) contested the plea agreement because he did not agree to the scope of the forfeiture term, and (3) subsequently agreed to the forfeiture term and plea agreement after discussing his situation with his lawyer. Therefore, Appellant’s assertion was wholly unsupported by the record.

Disposition

The Fourth Circuit affirmed both challenged sentencing enhancements and denied Appellant’s challenge to his waiver of rights regarding the forfeiture term of the plea agreement.

By John Van Swearingen

On Monday, January 23, 2017 the Fourth Circuit issued a published opinion following a rehearing en banc in the criminal case United States v. Robinson. The defendant Robinson appealed his conviction under 18 U.S.C. § 922(g)(1), which prohibits the possession of a firearm by a felon. The Fourth Circuit Court of Appeals affirmed the district court’s denial of Robinson’s motion to suppress evidence of weapon possession, holding that the potential legal status of a concealed weapon does not automatically render that weapon harmless, and therefore, any officer that lawfully stops an individual and reasonably believes that individual to be armed is justified in frisking that individual to secure any weapons.

Facts and Procedural History

On March 24, 2014, an anonymous caller called the Ranson Police Department (West Virginia) to report seeing a black male, the defendant Robinson, in a “bluish greenish Toyota Camry load a firearm [and] conceal it in his pocket” while parked at a 7-Eleven. After this occurred, according to the tipster, the driver of the vehicle, a white female, pulled the Camry out of the parking lot and headed southbound.

This particular 7-Eleven, as several officers would later testify, was located next to the Apple Tree Garden Apartments. The 7-Eleven and the apartment complex were both part of “the highest crime area in Ranson,” especially with regard to drug trafficking, and calls to either location were treated with a heightened sense of alertness.

Two officers responded to the call, and within minutes, spotted the subject Camry containing the defendant and the white female. Neither occupant in the Camry was wearing a seatbelt. The first officer, Officer Hudson, effected a traffic stop for the seatbelt violations. Because the anonymous caller stated that defendant was armed, Officer Hudson asked Robinson to step out of the car.

The second officer, Captain Roberts, opened Robinson’s door and, as Robinson was getting out, asked if Robinson was armed. The Captain later testified that Robinson gave him an “oh, crap” look in lieu of a verbal response. Captain Roberts then frisked Robinson, discovering and securing a loaded handgun from Robinson’s pants pocket.

Captain Roberts, recognizing Robinson as a known felon, then arrested Robinson for illegal possession of a firearm by a felon.

Robinson filed a motion to suppress the firearm, claiming the frisk was a violation of his Fourth Amendment rights. More specifically, Robinson contended that, while the officers may have reasonably suspected that he was armed, West Virginia’s generally permissive laws regarding concealed carry mean an armed individual cannot be assumed to be dangerous absent other factual information. The United States District Court for the Northern District of West Virginia denied his motion.

Armed and Dangerous Means Armed and thus Dangerous

Terry v. Ohio, 392 U.S. 1, 30 (1968), governs the doctrine of weapons frisks by law enforcement officers. If an officer reasonably believes that criminal activity is afoot and suspects an individual is armed and dangerous, that officer may stop that individual and pat down that persons clothing to feel for weapons.

Robinson argued that language of Terry – “armed and dangerous” – requires an officer to reasonably suspect an individual be armed and – as a separate consideration – also dangerous.

Robinson correctly noted that West Virginia generally permits its citizens to acquire permits to arm themselves with concealed weapons. Therefore, Robinson contended, the suspicion that an individual is armed in and of itself does not give rise to suspicion that the individual is dangerous. Robinson conceded that Officer Hudson’s stop of the Camry was lawful. Thus, this challenge turns on the “armed and dangerous” language of the Terry opinion.

Robinson misconstrues both the language of Terry and the Supreme Court’s jurisprudence regard frisks. The Court does use the phrase “armed and dangerous” near the end of the Terry opinion. However, in the preceding discussion regarding the legality of frisks, the Court stated that an officer may frisk a lawfully-stopped individual if “a reasonably prudent man would have been warranted in believing [that individual] was armed and thus presented a threat to the officer’s safety.”

The Court applied the Terry doctrine to traffic stops in Pennsylvania v. Mimms, 434 U.S. 106, 112 (1977). The Mimms opinion echoed Terry, holding that an officer’s frisk of a lawfully-stopped individual was proper where the officer reasonably believed the individual was “armed and thus posed a serious and present danger to the safety of the officer.”

The language of the Terry and Mimms opinions is fatal to Robinson’s argument. The phrase “armed and dangerous” does not, as Robinson argued, create a two element test wherein an officer must have reasonable suspicion that an individual is armed and also dangerous. Rather, Terry and its progeny state that, where an individual is reasonably suspected of being armed, they are presumed dangerous as a matter of law and fact.

Robinson’s argument also fails to account for the factual circumstances of his stop. First, an anonymous tip reported a man concealing a gun in a high-crime, high-drug activity area. The tip was then corroborated when the responding officers observed Robinson and the female driver in the blue-green Camry heading south away from the 7-Eleven. Further, Robinson’s “oh, crap” look to Captain Roberts was reasonably perceived as an evasive response to a direct question about being armed.

The Fourth Circuit also noted that widespread legal concealed carry does not render the presence of a firearm somehow less dangerous. The court held that concerns for officer safety logically permit an officer to secure a firearm when that officer lawfully stops an unknown individual who is reasonably suspected of being armed.

In sum, when an individual is lawfully stopped by law enforcement and that individual is reasonably suspected of being armed, that individual is therefore suspected of being dangerous as a matter of law. Therefore, Robinson’s Fourth Amendment rights were not violated when he was frisked.

                                                                    Disposition

The Fourth Circuit affirmed the district court’s denial of Robinson’s motion to suppress the firearm. Robinson was lawfully stopped, and based on the facts of this case, the responding officers reasonably suspected that Robinson was armed and thus dangerous. Therefore, Captain Roberts’ frisk of Robinson was permissible, and the firearm recovered pursuant to that frisk was admissible as evidence against Robinson.

By John Van Swearingen

On Wednesday, November 23, 2016, the Fourth Circuit issued a published opinion in the civil case Rodriguez v. Bush. This matter was a habeas corpus petition brought by an offender sentenced to forty-five years in prison for drug trafficking. The United States District Court for the District of South Carolina denied Rodriguez’s petition under 28 U.S.C. § 2254 (2012), holding that Rodriguez’s claim for ineffective assistance of counsel failed to establish that his defense was prejudiced by his counsel’s performance. Rodriguez’s claim was rooted in his counsel’s failure to object to state trial judge’s denial of Rodriguez’s accepted plea offer. The Fourth Circuit Court of Appeals affirmed the district court’s denial of Rodriguez’s petition on the basis that there is no federal or constitutional right to have a plea bargain accepted by a trial court, and therefore, his counsel’s failure to object could not establish prejudice to Rodriguez’s defense.

Facts and Procedural History

In 2009, on the day Rodriguez’s trial, the prosecutor offered Rodriguez and his co-defendants various plea bargains. The offer to Rodriguez was for a recommended sentence of 20 years, and Rodriguez’s co-defendants were made similar offers. The offers to the co-defendants were accepted by the court.

However, when Rodriguez’s counsel presented the plea offer to the trial judge, the judge rejected the offer, stating that “he was not going to accept the plea and that he was ready to try a case this week.” While Rodriguez’s counsel did attempt to convince the judge to accept the plea deal, he did not object on the record to preserve the rejection for appeal.

The state court denied Rodriguez’s motion for post-conviction relief, stating that his counsel’s failure to object did not prejudice Rodriguez’s defense and the trial court’s denial of the plea offer did not violate Rodriguez’s due process rights. Rodriguez then appealed to the South Carolina Supreme Court, but certiorari was denied. Rodriguez then filed a petition in federal court under § 2254.

The Ineffective Assistance of Counsel Claim

Strickland v. Washington, 466 U.S. 668, 687 (1984), governs ineffective assistance of counsel claims. Under Strickland, to prove ineffective assistance of counsel, Rodriguez must show (1) “that counsel’s performance was deficient” and (2) “that the deficient performance prejudiced the defense.”

Despite being a two-pronged test, a reviewing court is free to examine the prejudice prong first, as it is dispositive to the claim. Rodriguez was not prejudiced by his counsel’s failure to object to the rejection of the plea deal, because a defendant cannot be prejudiced by a claim that has no merit under governing law. Therefore, Rodriguez’s ineffective assistance of counsel claim fails.

There is No Due Process Claim to Have a Plea Deal Accepted by the Court

In Missouri v. Frye, 132 S. Ct. 1399, 1410 (2012), the Supreme Court held that there is no federal right to have a judge accept a plea deal. The Court further clarified this point in Lafler v. Cooper, 132 S. Ct. 1376, 1387 (2012), explicitly stating that there can be no due process claim even where “a plea deal is accepted by the defendant but rejected by the judge.” Even further, there is no constitutional claim under the same facts. Fields v. Attorney Gen. of Md., 956 F.2d 1290, 1297 n.19 (4th Cir. 1992).

Therefore, the governing law clearly states that Rodriguez, nor any other similarly-situated defendant, claims a right to have an accepted plea offer honored by a presiding judge. Rodriguez based his due process claim on the premise that such a right existed. Since the claim has no support under governing law, and because this same claim forms the basis of his ineffective assistance of counsel claim, both of his claims on appeal fail.

                                                                    Disposition

The Fourth Circuit affirmed the district court’s denial of Rodriguez’s petition under § 2254. Both the ineffective assistance of counsel and due process claims were based on the premise that a defendant has a right to have a plea deal accepted by a presiding judge. Because no such right exists, Rodriguez’s claims were properly denied.

By: Hillary Kies*

Introduction

Over the past decade, North Carolina’s state government has been plagued by corruption and the appearance of corruption.  Corruption allegations and the resulting investigations regarding corruption allegations even reached the campaigns of former governor Michael Easley and outgoing governor Beverly Perdue.[1]  These North Carolina problems have been on trend with the nation’s “conviction—widely shared in the media, by political figures in both major parties, and by the public—that ‘special interests’ have come to dominate and distort the processes of government.”[2]  Across the country, “[o]ne well-known problem is that of quid pro quo corruption.  In the past few years . . . lobbyists, elected officials, and staffers have been arrested and convicted for violating various lobbying, reporting, and ethics laws.”[3]  The response to these problems, at both the federal and state levels, has been a broad wave of antilobbying proposals and statutes.[4]  The North Carolina legislature addressed this “crisis of confidence in State government” by reforming its campaign finance system in 2006.[5]

The North Carolina Campaign Contributions Prohibition may serve as a prototype for other states of a constitutional campaign finance reform statute. However, this could prove problematic depending on whether or not the state has an actual history of corruption.

One of these reforms, the Campaign Contributions Prohibition, prevents registered North Carolina lobbyists from contributing money to certain state campaigns.[6]  North Carolina lobbyist Sarah Preston challenged the constitutionality of this statute, claiming that it infringed upon her First Amendment “rights to freedom of speech and freedom of association.”[7]  In order to determine whether the statute was constitutional, the circuit court had to resolve which level of scrutiny was appropriate to apply in reviewing the prohibition—”strict scrutiny” or the less-searching, “closely drawn” scrutiny.  Although Supreme Court precedent had established that campaign contribution limits were subject to closely drawn scrutiny, the Campaign Contributions Prohibition posed some novel issues for the Fourth Circuit in Preston v. Leake.

This Note will focus on the appropriate level of scrutiny to apply to North Carolina’s Campaign Contributions Prohibition.  Part I will discuss the factual background of Preston v. Leake and the Fourth Circuit’s decision.  Part II will provide relevant Supreme Court precedent.  Part III will focus on some of the problems the Fourth Circuit faced.  These issues include the inconsistent levels of scrutiny applied in two previous Fourth Circuit cases, the narrow construction of an ambiguous sentence in Citizens United v. FEC[8] calling for strict scrutiny to apply when laws burden political speech, and the effective difference between a contribution limit and a contribution ban.  Finally, this Note will look at the potential impact of this decision upon future states’ campaign finance statutes.

I.  The Case

In 2006, the North Carolina legislature enacted section 163-278.13C of the North Carolina General Statutes, the Campaign Contributions Prohibition.[9]  This provision bars any registered lobbyist from making campaign contributions to a candidate for the North Carolina General Assembly or the Council of State.[10]  The statute states that “[n]o lobbyist may make a contribution as defined in G.S. 163-278.6 to a candidate or candidate campaign committee . . . when that candidate meets any of the following criteria: (1) Is a legislator . . . (2) Is a public servant.”[11]  A campaign contribution is defined expansively and effectively covers anything of any value.[12]

However, the North Carolina State Board of Elections (“Board”) issued formal advisory opinions enumerating certain actions that lobbyists are not prohibited from taking under the Campaign Contributions Prohibition.[13]  These opinions stated that a lobbyist may: contribute to political actions committees (“PACs”); make recommendations to PACs regarding campaign contribution candidates, so long as the lobbyist was not the decision maker; make recommendations to third parties regarding campaign contribution candidates; attend or host fundraising events, so long as the lobbyist neither paid for the event nor was reimbursed; volunteer, so long as the lobbyist incurred no expenses; and endorse a candidate by making telephone calls and exhibiting yard signs.[14]  Furthermore, a registered lobbyist is allowed to pass out signs and literature, engage in door-to-door canvassing supporting a candidate, and deliver a speech at a candidate’s rally.[15]

To enforce the Campaign Contributions Prohibition, the Board may investigate alleged violations of the statute.[16]  Furthermore, the Board is responsible for “assessing and collecting civil penalties of up to three times the amount of an unlawful contribution” and then “reporting violations of the Campaign Contributions Prohibition to the district attorney for possible criminal prosecution.”[17]

The express purpose of the North Carolina General Assembly in passing the Campaign Contributions Prohibition was “to ensure that elected and appointed state agency officials exercise their authority honestly and fairly, free from impropriety, threats, favoritism, and undue influence.”[18]  This statute was passed in reaction to a decade of corruption and the appearance of corruption in North Carolina’s government.[19]

As discussed previously, Sarah Preston sued the Board under 42 U.S.C. § 1983 to challenge the facial and applied constitutionality of the Campaign Contributions Prohibition.[20]  Preston wanted to show her support for state legislative candidates by making minimal, twenty-five dollar contributions to state campaigns.[21]  However, she was unable to do so because the Campaign Contributions Prohibition completely bans contributions by lobbyists.[22]  Thus, Preston argued that this statute violated her First Amendment rights to freedom of speech and freedom of association, as applied to the states by the Fourteenth Amendment.[23]

First, Preston contended that the court should review the Campaign Contributions Prohibition using strict scrutiny rather than closely drawn scrutiny.[24]  Unlike the marginal restrictions imposed on citizens by contribution limits, the North Carolina statute imposes a complete ban on lobbyist contributions and, therefore, directly restricted her core political speech.[25]  Preston believed that her case should be reviewed under strict scrutiny because this ban was upon political speech, and, inCitizens United, the Supreme Court stated that “[l]aws that burden political speech are ‘subject to strict scrutiny.’”[26]

Furthermore, regardless of whether the court reviewed the Campaign Contributions Prohibition using strict scrutiny or closely drawn scrutiny, Preston argued that the ban was both facially unconstitutional and unconstitutional as applied to her.[27]  She contended that the ban was unconstitutionally overbroad for several reasons.[28]  First, the ban does not include a temporal limitation.[29]  Second, the ban is not limited by the recipient’s identity.[30]  Third, this is a complete contribution ban rather than a contribution limit.[31]  Finally, Preston noted that the ban does not leave open sufficient alternative ways in which lobbyists could support candidates.[32]

The District Court for the Eastern District of North Carolina upheld the Campaign Contributions Prohibition as constitutional.[33]  The Court of Appeals for the Fourth Circuit affirmed the District Court’s ruling, holding that “the statute is constitutional, both facially and as applied to Preston, as a valid exercise of North Carolina’s legislative prerogative to address potential corruption and the appearance of corruption in the State.”[34]  First, the Fourth Circuit found that the Campaign Contributions Prohibition should be reviewed using closely drawn scrutiny rather than strict scrutiny even though the provision implements a complete ban on campaign contributions instead of simply a limitation on campaign contributions.[35]  The Fourth Circuit reasoned that a contribution ban is only different from a contribution limitation in its scope, not the type of activity it concerns.[36]  Additionally, the Fourth Circuit rejected Preston’s contention that Citizens Uniteddemanded campaign contribution bans be reviewed using strict scrutiny.[37]  Thus, the Fourth Circuit concluded that “the Supreme Court has not overruled Buckley,Nixon, Beaumont, or other cases applying ‘closely drawn’ scrutiny to contribution restrictions.”[38]

Using this lower standard, the Fourth Circuit ruled that the Campaign Contributions Prohibition is closely drawn to a sufficiently important government interest.  First, the Fourth Circuit looked at the government interest.  The North Carolina legislature was responding to recent scandals regarding corruption and “made the rational judgment that a complete ban was necessary as a prophylactic to prevent not only actual corruption but also the appearance of corruption in future state political campaigns.”[39]  The state’s interest is very important because it is necessary to protect a democratic government.[40]  Additionally, the North Carolina ban is closely drawn to the interest of preventing political corruption because lobbyists have historically been susceptible to such corruption.[41]  Thus, “[a]ny paymentmade by a lobbyist to a public official, whether a campaign contribution or simply a gift, calls into question the propriety of the relationship, and therefore North Carolina could rationally adjudge that it should ban all payments.”[42]

The Fourth Circuit then concluded that the Campaign Contributions Prohibition is not overbroad.  Although the statute creates a complete ban that does not include a temporal limit, include a de minimis exception, or depend on the identity of the recipient, the ban is restricted to lobbyists, a small class of people.[43]  Additionally, “Preston freely chose to become a registered lobbyist, and in doing so agreed to abide by a high level of regulatory and ethical requirements focusing on the relationship of lobbyist and public official.”[44]  Furthermore, lobbyists are able to show their support for candidates in alternative ways.[45]  Options that are not prohibited by the Campaign Contributions Prohibition include volunteering, displaying signs, contributing to PACs, door-to-door canvassing, and attending or hosting fundraisers.[46]  Thus, the Fourth Circuit concluded that the North Carolina Campaign Contributions Prohibition does not violate the First and Fourteenth Amendments.

II.  Background

The First Amendment provides that “Congress shall make no law . . . abridging the freedom of speech.”[47]  The First Amendment applies to the states through the Due Process Clause of the Fourteenth Amendment.[48]  Because statutes that impose limits or bans on campaign contributions and expenditures “operate in an area of the most fundamental First Amendment activities,” they invoke the protection of the First Amendment’s guarantees of free speech and the right of association.[49]  In fact, the Supreme Court stated that “there is practically universal agreement that a major purpose of that Amendment was to protect the free discussion of governmental affairs.  This of course includes discussions of candidates . . . .”[50]  Thus, the Court noted that “it can hardly be doubted that the constitutional guarantee has its fullest and most urgent application precisely to the conduct of campaigns for political office.”[51]

The seminal Supreme Court case, decided in 1976, dealing with campaign finance was Buckley v. Valeo.[52]  In that case, the plaintiffs challenged the constitutionality of certain provisions of the Federal Election Campaign Act of 1971 (“FECA”).[53]  These provisions made it so that “individual political contributions are limited to $1,000 to any single candidate per election, with an overall annual limitation of $25,000 by any contributor” and “independent expenditures by individuals and groups ‘relative to a clearly identified candidate’ are limited to $1,000 a year.”[54]  In a per curiam opinion, the Court found that both the contribution limits and the expenditure limits implicated fundamental First Amendment rights.[55]  The campaign finance restrictions inevitably involved constitutional concerns because money was necessary for “virtually every means of communicating ideas in today’s mass society.”[56]  Thus, “[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.”[57]

However, the Buckley decision created tension in the campaign finance scheme.  This result was “unsurprising given that it was drafted by a committee of Justices who did not agree on the fundamental issue of how to balance First Amendment rights of free speech and association with state interests.”[58]  Therefore, the Supreme Court created an important compromise when it distinguished between the severity of the interests implicated by campaign contributions and campaign expenditures.[59]  The Court found that “expenditure limitations contained in the Act represent substantial rather than merely theoretical restraints on the quantity and diversity of political speech.”[60]  In fact, the primary effect of FECA’s expenditure limits was to limit political expression by restricting the amount of political speech made by candidates.[61]  Thus, because expenditure limits are at the core of First Amendment freedoms, courts should review such statutes using strict scrutiny.[62]  Strict scrutiny requires that the statute “furthers a compelling interest and is narrowly tailored to achieve that interest.”[63]  Under this standard, the Court struck down the FECA’s expenditure limit and held that it was unconstitutional.[64]

In contrast, the Court considered a limitation on campaign contributions only a marginal restriction on First Amendment rights.[65]  The Court noted that a contribution limit still “permits the symbolic expression of support evidenced by a contribution but does not in any way infringe the contributor’s freedom to discuss candidates and issues.”[66]  Expression is only marginally restricted because “[t]he quantity of communication by the contributor does not increase perceptibly with the size of his contribution, since the expression rests solely on the undifferentiated, symbolic act of contributing.”[67]  Essentially, because a contribution to a candidate does not detail the contributor’s rationale behind supporting a candidate, it is merely a general expression of support.[68]  Thus, the Court ruled that “[e]ven a ‘significant interference with protected rights of political association’ may be sustained if the State demonstrates a sufficiently important interest and employs means closely drawn to avoid unnecessary abridgement of associational freedoms.”[69]

Using this closely drawn scrutiny, the Court held that FECA’s contribution limit was constitutional under the First and Fourteenth Amendments.[70]  The Court found that the government had three sufficiently important interests in creating the $1000 limit.  First, the primary interest was the “prevention of corruption and the appearance of corruption spawned by the real or imagined coercive influence of large financial contributions on candidates’ positions and on their actions if elected to office.”[71]  Second, the limits helped “equalize the relative ability of all citizens to affect the outcome of elections.”[72]  Finally, the limits acted “as a brake on the skyrocketing cost of political campaigns and thereby serve to open the political system more widely to candidates without access to sources of large amounts of money.”[73]  These government interests were also closely drawn because the statute dealt with the aspects of political association in which corruption and the potential for corruption were identified; people, however, were still free to engage in other political expressions such as volunteering.[74]

Since Buckley, “[t]his persistent distinction—with expenditures constituting express advocacy and contributions being subject to substantial regulation, and other expenditures being relatively free, has coexisted with substantial disagreements between the Court’s regulatory proponents and regulatory skeptics regarding the nature of the State’s interest in regulating campaign contributions and expenditures.”[75]  In 2000, the Supreme Court confirmed Buckley’s dual-scrutiny framework in Nixon v. Shrink Missouri Government PAC.[76]  First, the Court differentiated between expenditure limits and contribution limits because of their impact on the First Amendment’s right to freedom of speech.  The Court stated that it “drew a line between expenditures and contributions, treating expenditure restrictions as direct restraints on speech, which nonetheless suffered little direct effect from contribution limits . . . .  We thus said, in effect, that limiting contributions left communication significantly unimpaired.”[77]  Second, the Court differentiated between expenditure limits and contribution limits because of their impact on the First Amendment’s right to freedom of association.[78]  The Court noted that, “[w]hile an expenditure limit ‘precludes most associations from effectively amplifying the voice of their adherents,’ the contribution limits ‘leave the contributor free to become a member of any political association and to assist personally in the association’s efforts on behalf of candidates.’”[79]  Due to the different effects on First Amendment rights, the Court confirmed Buckley’s use of strict scrutiny for campaign expenditure limits and closely drawn scrutiny for campaign contribution limits.

Three years later, in 2003, the Supreme Court ruled on a statute that made it unlawful for any corporation to make a campaign contribution or expenditure in connection with certain federal elections in FEC v. Beaumont.[80]  The purpose of this ban was to prevent “corporate earnings from turning into political ‘war chests’” and “preven[t] corruption or the appearance of corruption.”[81]  The Court upheld this contribution ban using Buckley’s lower level of review, closely drawn scrutiny.  The Court stated that “[g]oing back to Buckley v. Valeo, restrictions on political contributions have been treated as merely ‘marginal’ speech restrictions subject to relatively complaisant review under the First Amendment, because contributions lie closer to the edges than to the core of political expression.”[82]  Even though the statute at issue was a contribution ban, and not just a contribution limit of a type similar to that upheld in Buckley, the Court still found that “[i]t is not that the difference between a ban and a limit is to be ignored; it is just that the time to consider it is when applying scrutiny at the level selected, not in selecting the standard of review itself.”[83]

The Supreme Court decided a second campaign finance case in 2003, McConnell v. FEC.[84]  There, the statute at issue prohibited individuals seventeen and younger from making contributions both to candidates and to political parties.[85]  In determining the constitutionality of this statute, the Court first reiterated that contribution limits implicate the First Amendment freedoms of expression and association.[86]  Then, the Court applied Buckley’s closely drawn scrutiny because the provision was a campaign contribution ban.[87]  The government, however, had only offered scant evidence to advance its interest in preventing corruption by conduit, and the Court found that other states had adopted more tailored approaches to fixing this problem of actual and potential corruption.[88]  Instead of banning all contributions to candidates, other states prohibited contributions by very young children, considered all contributions from a family as a unit, or imposed a limit on contributions by minors.[89]  Thus, the Court struck down the ban as unconstitutional under closely drawn scrutiny, holding that the provision was overbroad.[90]

In 2006, the Supreme Court struck down a Vermont campaign contribution limit in Randall v. Sorrell.[91]  These contribution limits were very low—a person could not contribute more than $400 to a governor candidate, $300 to a state senator candidate, and $200 to a state representative candidate.[92]  In finding these limitations unconstitutional, the Court enumerated multiple reasons.  First, the “contribution limits will significantly restrict the amount of funding available for challengers to run competitive campaigns.”[93]  Such low contribution limits present a problem in elections because they magnify the incumbent’s advantage and place the challenger at a significant disadvantage.[94]  Second, the limits were not adjusted for inflation.[95]  Finally, there were no special justifications to warrant these low contribution limits.[96]  Thus, using Buckley’s closely drawn scrutiny, the Court found that Vermont’s contribution limits were unconstitutional under the First and Fourteenth Amendments.

The Court revisited the constitutionality of campaign finance laws in 2010 with one of the most recent controversial Supreme Court cases, Citizens United v. FEC.[97]  In that case, the plaintiffs challenged “[2 U.S.C.] § 441b’s ban on corporate-funded independent expenditures,” which subjected the corporation to civil and criminal penalties.[98]  The Court struck down this statute as violating corporations’ First Amendment rights.  As a general statement, the Court noted that “laws that burden political speech are ‘subject to strict scrutiny,’ which requires the Government to prove that the restriction ‘furthers a compelling interest and is narrowly tailored to achieve that interest.’”[99]  However, even though the Court made this broad statement about laws that burden political speech, it still found that “Citizens United has not made direct contributions to candidates, and it has not suggested that the Court should reconsider whether contribution limits should be subjected to rigorous First Amendment scrutiny.”[100]  In light of these two opposing statements, lower courts began to question whether the Court had blurred or destroyedBuckley’s dual-scrutiny framework of using strict scrutiny for campaign expenditure limits and closely drawn scrutiny for campaign contribution limits.

In 2011, one year after its controversial decision in Citizens United, the Supreme Court again ruled on campaign finance in Arizona Free Enterprise Club’s Freedom PAC v. Bennett.[101]  In that case, the plaintiffs challenged the constitutionality of a state campaign finance law that matched funds.[102]  Although the general statement in Citizens United might have suggested that all types of campaign finance laws should be reviewed using strict scrutiny, instead of using Buckley’s dual-scrutiny framework, the Court rejected this view.[103]  The Court again recognized the two separate levels of scrutiny, saying:

[W]e have subjected strictures on campaign-related speech that we have found less onerous to a lower level of scrutiny and upheld those restrictions.  For example, after finding that the restriction at issue was “closely drawn” to serve a “sufficiently important interest,” we have upheld government-imposed limits on contributions to candidates . . . .[104]

III.  Analysis

In Preston v. Leake, the Fourth Circuit dealt with an issue of first impression regarding the constitutionality of North Carolina’s campaign finance laws.  The Campaign Contributions Prohibition bans lobbyists from contributing any amount of money to candidates for certain state offices.  Thus, when Preston challenged the prohibition under the First and Fourteenth Amendments, the initial issue the Fourth Circuit decided was what level of scrutiny to use when reviewing this statute—strict scrutiny or closely drawn scrutiny.

A.     The Inconsistency of Fourth Circuit Precedent

Between 1999 and the 2011 Preston decision, the Fourth Circuit ruled on two other cases involving the constitutionality of North Carolina campaign finance statutes.  However, in these cases, decided approximately ten years apart, the Fourth Circuit used different language to describe the level of scrutiny it used to review each statute’s constitutionality.  Thus, in Preston v. Leake, the Fourth Circuit was challenged with interpreting this precedent and determining the appropriate level of scrutiny to apply to North Carolina’s Campaign Contributions Prohibition.

The first case, decided by the Fourth Circuit in 1999, was North Carolina Right to Life, Inc. v. Bartlett.[105]  There, North Carolina Right to Life challenged a North Carolina campaign finance provision that prohibits lobbyists from contributing to candidates and members of the General Assembly and Council of State while the General Assembly is in session.[106]  The Fourth Circuit upheld this restriction using the language of strict scrutiny review.[107]  The Fourth Circuit noted that the state had a “compelling interest” in preventing actual corruption and the appearance of corruption.[108]  Additionally, the court found that the government’s means were “narrowly tailored” to that compelling governmental interest because the statute was limited to a certain group of people, lobbyists, and had a temporal limitation that restricted the ban to only a few months during an election year.[109]

In contrast, the Fourth Circuit used different scrutiny language to strike down provisions of North Carolina’s campaign finance laws in North Carolina Right to Life, Inc. v. Leake.[110]  At issue in that 2008 case was a statute creating a contribution limit of $4000 from independent expenditure committees.[111]  The Fourth Circuit held that this statute was essentially a contribution limit and should be reviewed under Buckley’s closely drawn standard, noting that “a state may limit campaign contributions if the limits are ‘closely drawn’ and the state demonstrates that the limits support its interest in preventing corruption and the appearance thereof.”[112]  Because the Fourth Circuit concluded it was implausible that these contributions actually had a corrupting influence on the state, the Fourth Circuit struck down this law as unconstitutional using closely drawn scrutiny.[113]

This Fourth Circuit precedent provided little guidance in deciding what level of scrutiny should be applied to the Campaign Contributions Prohibition in Preston v. Leake.  Although Bartlett was decided after the Supreme Court’s decision in Buckley, it did not use Buckley’s dual-scrutiny framework.  The statute at issue was clearly a contribution limit and therefore should have been reviewed under closely drawn scrutiny.  The Fourth Circuit, however, explicitly used the language of strict scrutiny by saying that the statute would be upheld if the government had a compelling end and narrowly tailored means.  Therefore, the Bartlett decision appears to support Preston’s argument that campaign contribution statutes should be reviewed using strict scrutiny.  Still, under strict scrutiny review, statutes are usually categorically struck down as unconstitutional.[114]  And notably, the Fourth Circuit upheld the statute in Bartlett as constitutional, even though it used strict scrutiny language.  Thus, while the Fourth Circuit did not use the correct language denoted in Buckley, in actuality, the court appropriately applied the correct, less-searching level of scrutiny.  Furthermore, about ten years later, the Fourth Circuit followed Buckley’s dual-scrutiny framework to decide Leake.  In that case, the circuit court expressly used the language of closely drawn scrutiny to strike down a North Carolina campaign contribution statute.

The important difference between these two Fourth Circuit cases was the Supreme Court precedent during the nearly ten years in between Bartlett (1999) and Leake(2008).  Although, in 1976, the Supreme Court held that contribution limits should be reviewed using closely drawn scrutiny and expenditure limits should be reviewed using strict scrutiny, the Fourth Circuit did not apply this dual-scrutiny framework as late as 1999.  Instead, Buckley’s framework became the obvious standard in the early 2000s when the Supreme Court ruled on cases that reaffirmed Buckley.  Some of the Court’s cases that clearly delineated the two different levels of scrutiny used to review campaign finance provisions included Nixon v. Shrink Missouri Government PAC,[115] FEC v. Beaumont,[116] and McConnell v. FEC.[117]

Another reason why the Fourth Circuit might have mistakenly used the language of strict scrutiny in Bartlett is because it focused too heavily on the fact that the statute contained a legislative session ban.  Generally courts apply strict scrutiny to legislative session bans and categorically strike them down as unconstitutional.[118]  However, these legislative session bans are usually found constitutional if they apply only to a small group, such as lobbyists.[119]  At their essence, these are campaign contribution limits and should be reviewed under closely drawn scrutiny.[120]  Thus, although the Fourth Circuit precedent in Bartlett and Leake confused which level of scrutiny to apply to campaign contributions, the Campaign Contributions Prohibition should be reviewed using closely drawn scrutiny in accordance with Supreme Court precedent.

B.     A Narrow Interpretation of Citizens United

One of the main questions posed by commentators regarding the Fourth Circuit’s decision in Preston v. Leake is how the Supreme Court would react to the Fourth Circuit upholding North Carolina’s Campaign Contributions Prohibition under closely drawn scrutiny.[121]  Since the 2010 Citizens United decision, courts have outwardly struggled to interpret the Supreme Court’s phrase that “[l]aws that burden political speech are ‘subject to strict scrutiny.’”[122]  The issue is whetherCitizens United abolished Buckley’s dual-scrutiny framework or whether Buckley’s framework remains good law.  If Buckley is still applicable, campaign contribution statutes should continue to be reviewed using the less-exacting closely drawn scrutiny standard.  However, if the phrase in Citizens United is read according to its plain meaning, campaign contribution statutes should be reviewed using strict scrutiny.  And under strict scrutiny, courts almost universally strike down such statutes as unconstitutional.[123]  If courts were to broadly interpret this phrase in Citizens United, it would have a vast impact on the constitutionality of campaign finance regulations.  Therefore, “cases testing the boundaries of the Supreme Court’s ruling [in Citizens United] began winding their way through the courts shortly after the decision was announced in January 2010.”[124]

Circuit courts took notice of the Supreme Court’s broad generalization in Citizens United and struggled to interpret its effect upon Buckley’s framework.  For example, the Second Circuit noted that the “Court’s campaign-finance jurisprudence may be in a state of flux.”[125]  Additionally, the Ninth Circuit questioned the effect of the Citizens United decision by saying that “[i]t is unclear whether this unqualified statement is the death knell for closely drawn scrutiny or whether it was intended only to reaffirm the long standing principle that expenditure limitations, like those at issue in Citizens United, are subject to strict scrutiny.”[126]  Also recognizing this problem, the Seventh Circuit explicitly applied closely drawn scrutiny to a similar statute.[127]  The court, however, covered both of its bases by saying that “we believe [the statute] survives under either standard.”[128]

Although the Supreme Court’s overbroad phrase in Citizens United implied that all campaign finance provisions should be reviewed under strict scrutiny, this generalized statement was a miscalculation by the Court.  First, further into the Citizens United opinion, when speaking directly to the decision’s impact on campaign contribution limits, the Court backtracked on its broad generalization.  There, the Court noted that “Citizens United has not made direct contributions to candidates, and it has not suggested that the Court should reconsider whether contribution limits should be subjected to rigorous First Amendment scrutiny.”[129]  Thus, in that same opinion, the Court indicated that Buckley’s dual-scrutiny framework was not under review and should remain in place.

Second, in Bennett, a Supreme Court case decided one year after Citizens United, the Court reiterated Buckley’s dual-scrutiny framework.[130]  In this way, the Supreme Court itself indicated that Citizens United was not intended to alter Buckley’s framework.  Thus, the general proposition announced by the Court in Citizens United should not be read broadly.  Instead, it should be narrowly interpreted so as to keep Buckley’s dual-scrutiny framework in place.

Although courts have questioned which level of scrutiny to use in campaign contribution cases after Citizens United, the Second, Fifth, Seventh, and Ninth Circuits have held that Buckley’s dual-scrutiny framework remains good law.  For example, in Green Party of Connecticut v. Garfield,[131] the Second Circuit acknowledgedCitizens United’s generalized statement.[132]  However, the Second Circuit ruled that the closely drawn scrutiny of Buckley remained applicable.  It reasoned that “in the recent Citizens United case, the Court overruled two of its precedents and struck down a federal law banning independent campaign expenditures by corporations, but it explicitly declined to reconsider its precedents involving campaign contributions by corporations to candidates for elected office.”[133]  Thus, the court reviewed a ban on contractors making contributions to candidates for state office and a ban on lobbyists making contributions to state office under closely drawn scrutiny.[134]

Additionally, in a 2011 decision, Ognibene v. Parkes,[135] the Second Circuit reviewed campaign finance statutes that contained “doing business” contribution limits, nonmatching provisions, and entity bans.[136]  The circuit court upheld all of these statutes as constitutional using Buckley’s closely drawn scrutiny.[137]  Regarding Citizens United, the court concluded that “[s]ince the Supreme Court preserved the distinction between expenditures and contributions, there is no basis for Appellants’ attempt to broaden Citizens United.  Appellants’ selective and misleading quotes carefully skip over the Court’s clear distinction between limits on expenditures and limits on contributions.”[138]

The Fifth Circuit, in a 2010 decision, also held that the court should review a statute that imposed contribution limits under closely drawn scrutiny in In re Cao v. FEC.[139]  In that case, the statute imposed a contribution limit of $5000 on political parties.[140]  The court rejected the plaintiff’s argument that Citizens Unitedshould change the analysis of contribution limits on political parties.[141]  Instead, the court found that “the Supreme Court’s decision in Citizens United—regarding a corporation’s right to make independent expenditures—provides no reason to change our analysis of the validity of the contribution limits FECA places on political parties and PACs.”[142]  Thus, under closely drawn scrutiny, the court upheld these contribution limits.[143]

Furthermore, in 2010, the Seventh Circuit decided to use Buckley’s closely drawn scrutiny in Siefert v. Alexander.[144]  In that case, the Wisconsin Judicial Code of Conduct banned personal solicitation of campaign contributions made by judges or judicial candidates.[145]  The court found that this solicitation ban was essentially regulating campaign finance and should be reviewed using Buckley’s dual-scrutiny framework because “Citizens United, rather than overruling Buckley, noted and reinforced the distinction between independent expenditures on behalf of candidates and direct contributions to candidates.”[146]  The circuit court, however, did hedge its decision by noting that even if strict scrutiny should be applied, the provision was still constitutional.[147]

In 2011, the Ninth Circuit dealt with this same issue in Thalheimer v. City of San Diego.[148]  There, the court concluded:

[T]he Citizens United Court’s disapproval of Austin came in the context of regulating political expenditures, not contributions.  The Court made clear that it was not revisiting the long line of cases finding anti-corruption rationales sufficient to support such limitations.  Therefore, there is nothing in the explicit holdings or broad reasoning of Citizens United that invalidates the anti-circumvention interest in the context of limitations on direct candidate contributions.[149]

Like the circuit court decisions, the Colorado Supreme Court interpreted the general phrase in Citizens United to maintain Buckley’s dual-scrutiny framework.  InDallman v. Ritter,[150] government contract holders had to contractually agree to not make campaign contributions to a candidate for a state elected office for two years.[151]  The court upheld Buckley’s closely drawn scrutiny and noted that “[t]he Supreme Court decision in Citizens United addressed only expenditure limits and disclosure requirements; thus, it does not control our analysis of Amendment 54’s contribution limits.”[152]

Before the Fourth Circuit decided Preston, four circuit courts had reviewed the language contained in Citizens United’s generalized statement and determined that it did not discard Buckley’s dual-scrutiny framework.  These courts noted that the Supreme Court in Citizens United did not rule on contribution limits or expressly overrule the Buckley framework, and portions of the Court’s opinion could not be read selectively.  Thus, the Fourth Circuit correctly found that the Campaign Contributions Prohibition should be reviewed under closely drawn scrutiny.  The decision in Preston interpreted the Citizens United decision so that it did not have a broad impact upon campaign finance adjudication.  Instead, the Supreme Court, circuit courts, and state courts have all held that Citizens United should be narrowly interpreted so that it does not affect the status quo established by Buckley regarding closely drawn scrutiny.

C.     The Difference Between a Contribution Limit and a Contribution Ban

Additionally, even though the North Carolina Campaign Contributions Prohibition is a contribution ban, instead of a contribution limit, it should be reviewed under closely drawn scrutiny.  In Buckley, the Supreme Court held that a contribution limitation was subject to closely drawn scrutiny.  However, the North Carolina statute enforces a contribution ban on lobbyists, not just a contribution dollar limit.  Thus, Preston argued that a “complete ban on campaign contributions ‘restricts direct speech rights of would-be contributors that lie at the core of political expression’ and thus ‘demand[s] strict scrutiny.’”[153]  A contribution ban does not allow the contributor to retain any means of symbolic expression.[154]  Therefore, the ban “disallows ‘the symbolic and expressive act of contributing in the first place,’ so that the ban is a ‘direct restraint on political communication,’ which is therefore subject to strict scrutiny.”[155]

Still, the Supreme Court has upheld a complete ban using Buckley’s closely drawn standard of review.  In Beaumont, the challenged statute made it unlawful for a corporation to make a contribution from some federal elections.[156]  Thus, it was essentially a contribution ban on corporations.  In addressing the question of which standard of review to use, the Court noted that a contribution ban was distinct from a contribution limit.  However, “it is not that the difference between a ban and a limit is to be ignored; it is just that the time to consider it is when applying scrutiny at the level selected, not in selecting the standard of review itself.”[157]  Therefore, the Fourth Circuit followed Supreme Court precedent that contribution limits and contribution bans should be reviewed using less-searching scrutiny.

Still, North Carolina’s Campaign Contributions Prohibition can be distinguished from the ban in Beaumont.  North Carolina’s statute directly forbids individuals from making contributions, while the statute in Beaumont only forbade the corporation from making contributions and left individual members of the corporation free to make contributions.  Other courts, however, have followed Beaumont’s lead and ruled that even a contribution ban that applies to individuals should be reviewed using closely drawn scrutiny.  For example, in Garfield, the statute imposed a ban on contractors and lobbyists making contributions to candidates for state office in Connecticut.[158]  In that case, the Second Circuit used closely drawn scrutiny to uphold the ban for contractors but strike down the ban for lobbyists.[159]  The Second Circuit rejected applying “strict scrutiny because the provisions at issue here are bans, as opposed to mere limits.  Such an argument was explicitly rejected inBeaumont.”[160]  Instead, the Second Circuit followed Beaumont’s lead by reviewing the ban in connection with whether the statute was closely drawn to an important government interest.  Thus, in striking down the ban against lobbyists, the Second Circuit emphasized how a ban was too restrictive and thus did not meet the closely drawn standard.

The Supreme Court of Louisiana ruled on the same issue when the state passed a statute that prohibited riverboat and land-based casino industries from making campaign contributions in Casino Ass’n of Louisiana v. State ex rel. Foster.[161]  There, the court upheld these bans using closely drawn scrutiny and noted that “there is no indication in Buckley that a contribution limit of zero, as opposed to a contribution limit of $1,000.00, would be unconstitutional.”[162]  Thus, “the fact that the campaign contribution ban found in [the statute] is a prohibition on contributions, rather than a limitation, does not render it per se unconstitutional underBuckley.  Instead, the restriction is to [be] analyzed under the burden of proof enunciated in Buckley.”[163]

Therefore, although the North Carolina Campaign Contributions Prohibition imposes a ban on lobbyist contributions instead of a limit on lobbyist contributions, it should still be reviewed under closely drawn scrutiny.  The Supreme Court laid this foundation in Beaumont when it considered a ban on corporations using closely drawn scrutiny.  And although Beaumont dealt with a corporate ban, neither the Second Circuit nor the Supreme Court of Louisiana distinguished between the corporate ban in Beaumont and the individual bans in Garfield and Casino Ass’n of Louisiana.

D.    The Impact of the Constitutionality of the Campaign Contributions Prohibition

One of the biggest impacts of the Fourth Circuit’s decision in Preston v. Leake is that it provides a constitutionally sound model for other states to impose contribution bans on lobbyists or other groups.[164]  However, looking forward, if North Carolina’s Campaign Contributions Prohibition is used as a model, additional constitutional questions will be raised.  One issue with this prototype is whether a similar ban on lobbyists or another group would be constitutional if the state did not have a history of corruption.

For example, in Garfield, Connecticut implemented the Campaign Finance Reform Act (“CFRA”), which banned individual contractors and lobbyists from making contributions to candidates for state office.[165]  The Second Circuit upheld the ban on contractors but struck down the ban on lobbyists.[166]  Regarding the ban on contractors, the court found:

[T]he Connecticut General Assembly enacted the CFRA’s ban on contractor contributions in response to a series of scandals in which contractors illegally offered bribes, “kick-backs,” and campaign contributions to state officials in exchange for contracts with the state.  The ban was designed to combat both actual corruption and the appearance of corruption caused by contractor contributions.[167]

Thus, the ban on contractors was sufficiently closely drawn to the state’s interest in preventing corruption and the appearance of corruption.

In contrast, the court noted that none of Connecticut’s recent corruption scandals involved lobbyists.[168]  Therefore, the state did not need to use a complete ban on lobbyist contributions; instead, the statute should have had a limiting exception in the form of a contribution limit.  The court emphasized:

Accordingly, there is insufficient evidence to demonstrate that all lobbyist contributions give rise to an appearance of corruption, and the evidence demonstrating that lobbyist contributions give rise to an appearance of “influence” has no bearing on whether the CFRA’s ban on lobbyist contributions is closely drawn to the state’s anticorruption interest.  We conclude, as a result, that on this record, a limit on lobbyist contributions would adequately address the state’s interest in combating corruption and the appearance of corruption on the part of lobbyists.[169]

Whether or not there was actual corruption in the state regarding lobbyists is how the Fourth Circuit distinguished the North Carolina statute in Preston from the court’s holding in Garfield.[170]  Thus, for a state to use Preston as a model of a constitutional campaign contribution ban, the state might have to have a history of corruption.  If not, then to pass closely drawn scrutiny, the statute might have to have limiting exceptions.

States generally use two types of limiting exceptions in campaign contribution statutes.  First, the state may create a limiting exception by only enforcing a contribution limit or a ban during a certain time period.  The purpose of such limits is to “prevent the flow of money to candidates during time periods when contributions pose a unique threat of actual or apparent corruption.”[171]  These temporal limits can be during pre-election, legislative-session, off-year, or postelection periods.[172]  Commonly, these statutes are limited to when the legislature is in session.  There is a greater issue regarding corruption or the appearance of corruption during legislative sessions because legislators are making decisions that may affect their campaign contributors.[173]  For example, in Bartlett, the Fourth Circuit noted that the state’s campaign finance reform scheme only prohibited lobbyists from contributing to candidates for the North Carolina General Assembly and Council of State while the General Assembly was in session.[174]  Thus, the restriction was not overbroad because the North Carolina General Assembly was usually only in session for one or two months out of the year.[175]

Vermont had a similar statute that banned lobbyists from contributing to campaigns of members of the Vermont General Assembly when the legislature was in session.[176]  The Vermont Supreme Court upheld this ban, noting that the statute “functions solely as a timing measure, banning contributions to individual members only while the General Assembly is in session.”[177]  Thus, “the limited prohibition focuses on a narrow period during which legislators could be, or could appear to be, pressured, coerced, or tempted into voting on the basis of cash contributions rather than on consideration of the public weal.”[178]

A second method of imposing a limiting exception on a campaign contribution law is to restrict the limit or the ban based on the identity of the recipient.  For example, in California, a district court upheld a campaign finance regulation that only prohibited “a direct contribution by a lobbyist to an elected state officer or candidate for elected state office, if the lobbyist is registered to lobby the governmental agency for which the officeholder works or for which the candidate seeks election.”[179]  Thus, this provision was narrowly tailored because it did “not prohibit contributions by all lobbyists to all candidates.  Rather, [it] only prohibited contributions by lobbyists, if the lobbyist was registered to lobby the office for which the candidate sought election; that is, to those persons the lobbyist would bepaid to lobby.”[180]  Similarly, an Alaskan campaign contribution statute prohibited lobbyists from contributing to candidates in districts that were outside the district in which the lobbyist was eligible to vote.[181]  The Supreme Court of Alaska upheld this statute as constitutional because the lobbyists’ “professional purpose, coupled with their proximity to legislators during the legislative session, makes them particularly susceptible to the perception that they are buying access when they make contributions.  Based on this evidence, we conclude that the State had a compelling interest justifying some restraint on speech.”[182]

In total, the North Carolina Campaign Contributions Prohibition may serve as a prototype for other states of a constitutional campaign finance reform statute.  However, the constitutionality of such a reform statute might depend on whether there is a history of corruption within the state.  Therefore, for other states’ statutes to be constitutional, limiting exceptions on the time and identity of the recipient may be necessary.

Conclusion

In Preston v. Leake, the Fourth Circuit upheld the constitutionality of the North Carolina Campaign Contributions Prohibition, which bans lobbyists from making any type of monetary donations to certain state officials’ campaigns.  One of the main issues the court grappled with was what level of scrutiny was appropriate to apply to the statute.  If the court applied strict scrutiny, the ban would be categorically struck down.  However, if the court applied the less-searching, closely drawn scrutiny, the ban would likely be upheld.  In determining which level of scrutiny to use, the Fourth Circuit had to properly interpret its own precedent, a broad generalization by the Supreme Court in Citizens United, and whether there was a difference between a total ban as opposed to a limit.  Because the Campaign Contributions Prohibition was upheld as constitutional under closely drawn scrutiny, other states will probably use it as a model for creating their own contribution bans.  However, this could prove problematic depending on whether or not the state has an actual history of corruption.  Thus, in order for other states’ contribution limits or bans to be upheld as constitutional, they might have to impose some sort of limiting exceptions.


 *   J.D. Candidate, 2013, Wake Forest University School of Law.  The author would like to thank the members of the Wake Forest Law Review for their assistance with this Note, and her family for their love and support.

[1].   Michael Biesecker, Election Board Fines Perdue Campaign $30,000, News & Observer (Aug. 24, 2010, 12:43 PM), http://www.newsobserver.com
/2010/08/24/645448/elections-board-fines-perdue-campaign.html; J. Andrew Curliss & Dan Kane, Easley Convicted of Felony; State, Federal Probes End, News & Observer (Nov. 24, 2010, 5:01 AM), http://www.newsobserver.com/2010
/11/24/822886/easley-convicted-of-felony-state.html; see also Preston v. Leake, 660 F.3d 726, 729–30 (4th Cir. 2011).

        [2].   Ronald M. Levin, Lobbying Law in the Spotlight: Challenges and Proposed Improvements, 63 Admin. L. Rev. 419, 424 (2011).

        [3].   Richard L. Hasen, Lobbying, Rent-Seeking, and the Constitution, 64 Stan. L. Rev. 191, 196 (2012) (citations omitted).

        [4].   Levin, supra note 2.

        [5].   Preston, 660 F.3d at 729.

        [6].   Id.

        [7].   Id.

        [8].   130 S. Ct. 876 (2010).

        [9].   Preston, 660 F.3d at 729.

      [10].   Id.

      [11].   N.C. Gen. Stat. § 163-278.13C(a) (2011).

      [12].   See id. § 163-278.6(6)(a).

      [13].   Preston v. Leake, 743 F. Supp. 2d 501, 505 (E.D.N.C. 2010), aff’d, 660 F.3d 726 (4th Cir. 2011).

      [14].   Id. at 505–06.

      [15].   Id. at 506.

      [16].   Preston, 660 F.3d at 731.

      [17].   Id. (citation omitted).

      [18].   Id. at 729 (citation omitted).

      [19].   Id. at 729–30 (noting that some of these recent corruption scandals involved “[f]ormer North Carolina Commissioner of Agriculture, Meg Scott Phipps.  Former Speaker of the North Carolina House of Representatives, Jim Black.  Former North Carolina Representatives, Michael Decker and Thomas Wright. . . .  Chiropractors, optometrists, high-profile registered lobbyist Don Beason, and others—including most recently the campaign committees of former governor Michael F. Easley and current governor Bev Perdue—have also been part of the corruption or appearance of corruption that has infected North Carolina’s state government in the past decade.” (quoting Brief of Appellee at 2, Preston, 660 F.3d 726 (2011) (No. 10-2294), 2011 WL 495924, at *2)).

      [20].   Id. at 729.

      [21].   Id. at 731.

      [22].   Id.

      [23].   Id. at 728.

      [24].   Id. at 732.

      [25].   Brief of Appellant at 16, Preston, 660 F.3d 726 (2011) (No. 10-2294), 2011 WL 107626, at *16.

      [26].   Id. at 20, 2011 WL 107626, at *20 (quoting Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876, 898 (2010)).

      [27].   Id. at 23, 2011 WL 107626, at *23.

      [28].   Id. at 23–36, 2011 WL 107626, at *23–36.

      [29].   Id. at 26–27, 2011 WL 107626, at *26–27.

      [30].   Id. at 27, 2011 WL 107626, at *27.

      [31].   Id. at 29, 2011 WL 107626, at *29.

      [32].   Id. at 30–34, 2011 WL 107626, at *30–34.

      [33].   Preston v. Leake, 743 F. Supp. 2d 501, 511 (E.D.N.C. 2010), aff’d, 660 F.3d 726 (4th Cir. 2011).

      [34].   Preston v. Leake, 660 F.3d 726, 729 (4th Cir. 2011).

      [35].   Id. at 735.

      [36].   Id. at 733 (citing Nixon v. Shrink Mo. Gov’t PAC, 528 U.S. 377, 387 (2000)).

      [37].   Id. at 735 (quoting Citizens United v. FEC, 130 S. Ct. 876, 898 (2010)).

      [38].   Id. (citations omitted) (referencing several U.S. Supreme Court decisions).

      [39].   Id. at 736.

      [40].   Id.

      [41].   Id. at 737.

      [42].   Id.

      [43].   Id. at 739–41.

      [44].   Id. at 740.

      [45].   Id.

      [46].   Id.

      [47].   U.S. Const. amend. I.

      [48].   See NAACP v. Alabama, 357 U.S. 449, 460 (1958) (“It is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the ‘liberty’ assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech.” (citations omitted)); Gitlow v. New York, 268 U.S. 652, 666 (1925) (“For present purposes we may and do assume that freedom of speech and of the press—which are protected by the First Amendment from abridgment by Congress—are among the fundamental personal rights and ‘liberties’ protected by the due process clause of the Fourteenth Amendment from impairment by the States.”).

      [49].   Buckley v. Valeo, 424 U.S. 1, 14 (1976) (per curium).

      [50].   Mills v. Alabama, 384 U.S. 214, 218 (1966).

      [51].   Monitor Patriot Co. v. Roy, 401 U.S. 265, 272 (1971).

      [52].   424 U.S. at 1.

      [53].   Id. at 6.

      [54].   Id. at 7.

      [55].   Id. at 14.

      [56].   Id. at 19.

      [57].   Id.

      [58].   Richard L. Hasen, Citizens United and the Illusion of Coherence, 109 Mich. L. Rev. 581, 585–86 (2011) (citing Richard L. Hasen, The Untold Drafting History of Buckley v. Valeo, 2 Election L.J. 241, 241 (2003)).

      [59].   Buckley, 424 U.S. at 20; Hasen, supra note 58, at 586.

      [60].   Buckley, 424 U.S. at 19.

      [61].   Id. at 39 (quoting Williams v. Rhodes, 393 U.S. 23, 32 (1968)).

      [62].   Id. at 28, 45–46.

      [63].   FEC v. Wis. Right to Life, Inc., 551 U.S. 449, 464 (2007) (citation omitted).

      [64].   Buckley, 424 U.S. at 51.

      [65].   Id. at 20.

      [66].   Id. at 20–21.

      [67].   Id. at 21.

      [68].   Id.

      [69].   Id. at 25 (citations omitted) (quoting Cousins v. Wigoda, 419 U.S. 477, 488 (1975)) (internal quotation marks omitted).

      [70].   Id. at 29.

      [71].   Id. at 25.

      [72].   Id. at 25–26.

      [73].   Id. at 26.

      [74].   Id. at 28.

      [75].   Richard M. Esenberg, The Lonely Death of Public Campaign Financing, 33 Harv. J.L. & Pub. Pol’y 283, 297 (2010).

      [76].   528 U.S. 377, 381–82 (2000).

      [77].   Id. at 386–87.

      [78].   Id. at 387.

      [79].   Id. (quoting Buckley, 424 U.S. at 22).

      [80].   539 U.S. 146, 149 (2003).

      [81].   Id. at 146 (alteration in original) (citations omitted) (quoting FEC v. Nat’l Conservative PAC, 470 U.S. 480, 496–97 (1985)).

      [82].   Id. at 161 (citation omitted).

      [83].   Id. at 162.

      [84].   540 U.S. 93 (2003), overruled by Citizens United v. FEC, 130 S. Ct. 876 (2010)).

      [85].   Id. at 231.

      [86].   Id. (citing Buckley v. Valeo, 424 U.S. 1 (1976) (per curium)).

      [87].   Id. at 232.

      [88].   Id.

      [89].   Id.

      [90].   Id.

      [91].   548 U.S. 230, 236 (2006).

      [92].   Id. at 238.

      [93].   Id. at 253.

      [94].   Id. at 248 (quoting Nixon v. Shrink Mo. Gov’t PAC, 528 U.S. 377, 403–04 (2000) (Breyer, J., concurring)).

      [95].   Id. at 261.

      [96].   Id.

      [97].   130 S. Ct. 876 (2010).

      [98].   Id. at 888.

      [99].   Id. at 898 (citation omitted).

    [100].   Id. at 909.

    [101].   131 S. Ct. 2806 (2011).

    [102].   Id. at 2816.

    [103].   Id. at 2817.

    [104].   Id. (citations omitted).

    [105].   168 F.3d 705 (4th Cir. 1999).

    [106].   Id. at 709.

    [107].   Id. at 715.

    [108].   Id.

    [109].   Id. at 716.

    [110].   525 F.3d 274, 277 (4th Cir. 2008).

    [111].   Id. at 291 (citing N.C. Gen. Stat. § 163-278.13 (2007)).

    [112].   Id. (citing Buckley v. Valeo, 424 U.S. 1, 24–29 (1976)).

    [113].   Id. at 293.

    [114].   Jessica A. Levinson, Timing is Everything: A New Model for Countering Corruption Without Silencing Speech in Elections, 55 St. Louis U. L.J. 853, 865 (2011).

    [115].   528 U.S. 377, 387 (2000) (“While we did not then say in so many words that different standards might govern expenditure and contribution limits affecting associational rights, we have since then said so explicitly in Federal Election Comm’n v. Massachusetts Citizens for Life, Inc.: ‘We have consistently held that restrictions on contributions require less compelling justification than restrictions on independent spending.’  It has, in any event, been plain ever since Buckley that contribution limits would more readily clear the hurdles before them.”).

    [116].   539 U.S. 146, 161–62 (2003) (“Going back to Buckley v. Valeo, restrictions on political contributions have been treated as merely ‘marginal’ speech restrictions subject to relatively complaisant review under the First Amendment, because contributions lie closer to the edges than to the core of political expression.  ‘While contributions may result in political expression if spent by a candidate or an association . . . , the transformation of contributions into political debate involves speech by someone other than the contributor.’  This is the reason that instead of requiring contribution regulations to be narrowly tailored to serve a compelling governmental interest, ‘a contribution limit involving significant interference with associational rights’ passes muster if it satisfies the lesser demand of being ‘closely drawn to match a sufficiently important interest.’” (citations omitted) (quoting Nixon, 528 U.S. at 378; Buckley, 424 U.S. at 21) (internal quotation marks omitted)).

    [117].   540 U.S. 93, 231–32 (2003) (“When the Government burdens the right to contribute, we apply heightened scrutiny.  We ask whether there is a ‘sufficiently important interest’ and whether the statute is ‘closely drawn’ to avoid unnecessary abridgment of First Amendment freedoms.” (citations omitted)), overruled byCitizens United v. FEC, 130 S. Ct. 876 (2010).

    [118].   Levinson, supra note 114.

    [119].   Id.

    [120].   See, e.g., Kimbell v. Hooper, 665 A.2d 44, 50–51 (Vt. 1995) (holding that the ban on soliciting and making contributions to individuals’ political campaigns while the General Assembly is in session is constitutional under Buckley’s closely drawn scrutiny).

    [121].   Robyn Hagan Cain, Contribution Prohibition Is Lawful Limit on Free Speech Rights, Findlaw: U.S. Fourth Circuit (Nov. 9, 2011, 3:07 PM), http://blogs.findlaw.com/fourth_circuit/2011/11/contribution-prohibition-is
-lawful-limit-on-free-speech-rights.html (“How would SCOTUS feel about the [sic] North Carolina’s closely drawn restriction on free speech rights?”); Fourth Circuit Upholds N.C.’s Restrictions Against Lobbyists’ Political Contributions, Beaufort Observer (Nov. 8, 2011), http://www.beaufortobserver.net/Articles-NEWS-and-COMMENTARY-c-2011
-11-08-256848.112112-Fourth-Circuit-upholds-N-Cs-restrictions-against
-lobbyists-political-contributions.html (noting that “[f]or the legal academic [Preston v. Leake] becomes an interesting question of how the Supreme Court will deal with a decision of the Fourth Circuit that has become decidedly more liberal than the Supreme Court has been in recent years”).

    [122].   Citizens United, 130 S. Ct. at 898 (citation omitted).

    [123].   Levinson, supra note 114, at 859 (quoting Buckley v. Valeo, 424 U.S. 1, 25 (1976)).

    [124].   Christine N. Walz, Campaigns Turn to Courts over Political Advertising, 28 Comm. Law. 3, 3 (2011) (citations omitted).

    [125].   Green Party of Conn. v. Garfield, 616 F.3d 189, 199 (2d Cir. 2010).

    [126].   Long Beach Area Chamber of Commerce v. City of Long Beach, 603 F.3d 684, 691–92 n.4 (9th Cir. 2010) (noting that the court did not even reach the issue saying, “[w]e need not read tea leaves to decide this appeal, however, because, as shown below, the LBCRA is unconstitutional as applied to the Chamber PACs under either ‘closely drawn’ or ‘strict’ scrutiny”).

    [127].   Siefert v. Alexander, 608 F.3d 974, 988–89 (7th Cir. 2010).

    [128].   Id. at 989.

    [129].   Citizens United v. FEC, 130 S. Ct. 876, 909 (2010).

    [130].   See supra notes 101–04 and accompanying text.

    [131].   616 F.3d 189 (2d Cir. 2010).

    [132].   Id. at 199 (citing Citizens United, 130 S. Ct. at 909).

    [133].   Id. (citing Citizens United, 130 S. Ct. at 909).

    [134].   Id.

    [135].   671 F.3d 174 (2d Cir. 2011), cert. denied, No. 11-1153, 2012 WL 950086 (U.S. June 25, 2012).

    [136].   Id. at 177–78, 185–96.

    [137].   Id. at 185–96.

    [138].   Id. at 184.

    [139].   619 F.3d 410, 422–23 (5th Cir. 2010), cert. denied, 131 S. Ct. 1718 (2011).

    [140].   Id. at 421.

    [141].   Id. at 422.

    [142].   Id. at 423.

    [143].   Id.

    [144].   608 F.3d 974, 988 (7th Cir. 2010).

    [145].   Id.

    [146].   Id. (citations omitted).

    [147].   Id. at 989.

    [148].   645 F.3d 1109 (9th Cir. 2011).

    [149].   Id. at 1124–25 (citations omitted).

    [150].   225 P.3d 610 (Colo. 2010).

    [151].   Id. at 616.

    [152].   Id. at 622 (citing Citizens United v. FEC, 130 S. Ct. 876, 909 (2010)).

    [153].   Preston v. Leake, 660 F.3d 726, 732 (4th Cir. 2011).

    [154].   Id.

    [155].   Id.

    [156].   FEC v. Beaumont, 539 U.S. 146, 149 (2003).

    [157].   Id. at 162.

    [158].   Green Party of Conn. v. Garfield, 616 F.3d 189, 194 (2d Cir. 2010).

    [159].   Id. at 212.

    [160].   Id. at 199 (citing Beaumont, 539 U.S. at 162).

    [161].   820 So. 2d 494, 496 (La. 2002).

    [162].   Id. at 502.

    [163].   Id. at 504.

    [164].   Lobbyists Beware: Political Contribution Ban a Model for Federal Elections?, Bracewell & Giuliani  (Nov. 14, 2011), http://www.bracewellgiuliani.com/news-publications/updates/lobbyists-beware
-political-contribution-ban-model-federal-elections (“While this North Carolina state ban has no direct effect on federal elections, or other state elections, it is a model that many regulators and commentators have expressed support for.  One can expect both state and federal efforts to enact new regulations further limiting a lobbyist’s opportunity to fully participate in the electoral process.”).

    [165].   Garfield, 616 F.3d at 194.

    [166].   Id. at 212.

    [167].   Id. at 199–200 (citation omitted).

    [168].   Id. at 205.

    [169].   Id. at 207.

    [170].   Preston v. Leake, 660 F.3d 726, 737 (4th Cir. 2011) (citing Garfield, 616 F.3d at 195–96, 207).

    [171].   Levinson, supra note 114, at 855 (citing State v. Alaska Civil Liberties Union, 978 P.2d 597, 619 (Alaska 1999)).

    [172].   Id. (citing Alaska Civil Liberties Union, 978 P.2d at 628–30).

    [173].   Id. at 865.

    [174].   N.C. Right to Life, Inc. v. Bartlett, 168 F.3d 705, 714 (4th Cir. 1999).

    [175].   Id.

    [176].   Kimbell v. Hooper, 665 A.2d 44, 46 (Vt. 1995).

    [177].   Id. at 91.

    [178].   Id.

    [179].   Inst. of Gov’t Advocates v. Fair Political Practices Comm’n, 164 F. Supp. 2d 1183, 1186 (E.D. Cal. 2001).

    [180].   Id. at 1190.

    [181].   State v. Alaska Civil Liberties Union, 978 P.2d 597, 617 (Alaska 1999).

    [182].   Id. at 619.