In San Jose Silicon Valley Chamber of Commerce Political Action Committee v. The City of San Jose, (— F.3d —, C.A.9 (Cal.), Oct. 14, 2008), the Ninth Circuit Court of Appeals considered whether a federal district court should have abstained from exercising jurisdiction over a challenge to a newly adopted campaign finance reform measure. The Court concluded that the district court should have abstained from exercising jurisdiction over the case since there was an ongoing state-initiated proceeding and local elections implicate an important state interest. Therefore, the 9th Circuit directed the District Court to dismiss the case.
Voters from San Jose, California (“City”) passed an amendment to the City Charter that required the Mayor and the City Council to adopt limitations on campaign contributions for certain elected City positions. In accordance with the will of San Jose voters, the City Council enacted a law to limit campaign contributions by independent committees to candidates for City Council or Mayor to two hundred and fifty dollars ($250) per election.
Beginning on May 16, 2006, San Jose Silicon Valley Chamber of Commerce Political Action Committee (“Chamber of Commerce”) and COMPAC Issued Fund (“COMPAC”) mailed informational fliers and caused automated telephone calls to be placed to voters in San Jose. A complaint was filed by a citizen in connection with the fliers and automated telephone calls, so the San Jose Elections Commission (the “Commission”) responded with an investigation as to whether the fliers and telephone calls violated the contribution limit. Following an investigation, the Commission concluded that the Chamber of Commerce and COMPAC violated the contribution limits set forth by the City and assessed two penalties: (1) a statement of public reprimand, and (2) a fine based upon the amount of contributions received in excess of the contributions limit. The fine still has not been assessed because the Commission has been unable to calculate the amount of the fine. The Chamber of Commerce and COMPAC have refused to provide the necessary financial information for the Commission to complete its calculation.
The Chamber of Commerce and COMPAC filed a complaint in federal district court alleging the City and the Commission violated their rights under the Constitution. Specifically, the Chamber of Commerce and COMPAC asked the district court to enter a judgment finding the new San Jose elections law in violation of the Constitution, and to issue orders to stop the City and the Commission from enforcing the laws against them. The district court concluded that it should “invalidate the statute” and stop its enforcement. The City and the Commission appealed.
With certain limitations, parties are allowed to bring claims in the court of their choosing: either state or federal court. Nevertheless, the Supreme Court, in its decision in Younger v. Harris, 401 U.S. 37 (1971), found that if certain requirements are met, federal district courts should abstain from exercising jurisdiction over claims brought in their courts. The four requirements for abstention of jurisdiction under Younger are: “(1) a state-initiated proceeding is ongoing; (2) the proceeding implicates important state interests; (3) the federal plaintiff is not barred from litigating federal constitutional issues in the state proceeding; and (4) the federal proceeding . . . would interfere with the state proceeding . . .” However, federal courts will not apply the Younger abstention if there is a “showing of bad faith, harassment, or some other extraordinary circumstance that would make abstention inappropriate.”
The Court began its analysis under the Younger abstention framework, looking to see if “a state-initiated proceeding is ongoing.” The Court found that the state-initiated proceeding was ongoing because the Commission decided to impose two sanctions, a public reprimand and a fine, but the fine had not yet been assessed. The Chamber of Commerce and COMPAC responded, arguing that a state court administrative agency, like the Commission, could delay the completion of its proceeding to prevent review by state and federal courts. The Court pointed out that the delay in the present case was caused by the Chamber of Commerce and COMPAC because of their failure to make their financial records available.
Next, the Court considered whether the Commission’s proceeding “implicates important state interests.” The Court found that the regulation of local elections was an important state interest. Specifically, disciplinary proceedings brought by administrative agencies, such as the Commission, to ensure compliance with local election laws are necessarily tied to the interest of regulating local elections.
The Court followed by considering whether the Chamber of Commerce and COMPAC were not “barred from litigating federal constitutional issues in the state proceeding.” The Chamber of Commerce and COMPAC were quick to point out that the Commission did not, and could not, have considered federal constitutional questions. The Court of Appeals rejected this argument because under California law, the Chamber of Commerce and COMPAC could have challenged the Commission’s administrative action in California State court. The Court found this alternative procedure sufficient to satisfy this element of Younger abstention.
Finally, the Court considered whether the “federal proceeding . . . would interfere with the state proceeding.” The court noted that the Chamber of Commerce and COMPAC asked the federal district court, and were granted by the federal district court, the permanent suspension of the proceedings brought by the Commission, which prevents the Commission from enforcing the elections law. The suspension of the Commission’s proceedings prevents the issuance of a fine against the Chamber of Commerce and COMPAC, and therefore the suspension constitutes interference with the State court proceeding.
In conclusion, the Ninth Circuit Court of Appeals found that the four requirements under Younger were satisfied and therefore the district court erred when it granted jurisdiction to the claims brought by the Chamber of Commerce and COMPAC. The district court should have abstained under Younger, so the Court of Appeals vacated the judgment of the district court and instructed the district court to dismiss the case.
If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.
Mona Ebrahimi | 916.321.4500