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Court of Appeal, First District, Division 2, California.

CITIZENS AGAINST RENT CONTROL/COALITION FOR FAIR HOUSING et al., Plaintiffs and Respondents, v. CITY OF BERKELEY et al., Defendants and Appellants.

Civ. 43451.

Decided: December 13, 1979

Michael Lawson, City Atty., City of Berkeley, Berkeley, Charles O. Triebel, Jr., Oakland, for defendants and appellants. Dobbs & Nielsen, Vigo G. Nielsen, Jr., John E. Mueller, James R. Parrinello, San Francisco, for plaintiffs and respondents. George P. Agnost, City Atty., City & County of San Francisco, Burk E. Delventhal, Diane L. Hermann, Deputy City Attys., Elizabeth M. Katz, Legal Asst., San Francisco, for amicus curiae.

Defendants appeal from a summary judgment declaring that section 602 of the Berkeley Election Reform Act of 1974 (Ordinance No. 4700-N.S.) is unconstitutional. That section provides that “No person1 shall make, and no campaign treasurer shall solicit or accept, any contribution which will cause the total amount contributed by such person with respect to a single election in support of or in opposition to a measure to exceed two hundred and fifty dollars ($250).”

Plaintiffs in this action are a political committee known as the Citizens Against Rent Control/Coalition for Fair Housing (hereafter CARC) and various contributors thereto. The defendants are the City of Berkeley, the Berkeley City Council, the Berkeley Fair Campaign Practices Commission and the individual members of that commission. Plaintiffs' complaint alleged that they were opposed to Proposition “B,” a measure which would impose a system of rent controls in the City of Berkeley and which was on the ballot for a general election to be held on April 19, 1977. It was further alleged that a controversy between the parties had arisen, in that defendants took the position that CARC was prohibited from accepting more than $250 from any single person or entity, whereas plaintiffs were of the opinion that any such restriction would be invalid as an unconstitutional infringement upon plaintiffs' rights of free speech and freedom of association. Plaintiffs sought injunctive relief and a judicial declaration that section 602 of the Berkeley Election Reform Act of 1974 was unconstitutional and void.

Following the issuance of a temporary restraining order and an order to show cause, defendants answered, denying that the ordinance under attack was invalid.

Thereafter, plaintiffs moved for summary judgment, requesting that the court rule that section 602 was unconstitutional on its face. In support of their motion, plaintiffs filed points and authorities and a declaration by the campaign manager of CARC averring that during the period between January 12 and 24, a number of individuals or entities had contributed sums in excess of $250 apiece to CARC and that the aggregate sum of such contributions was $18,600. Plaintiffs' declaration also stated that, at a meeting held on March 30, 1977, defendant, Berkeley Fair Campaign Practices Commission, voted that CARC's receipt of these contributions violated section 602 and that said commission therefore ordered that CARC forfeit to the City of Berkeley all of said contributions which exceeded the aggregate sum of $250 per contributor.2

Defendants filed opposing points and authorities, and also filed a declaration by the secretary of the Berkeley Fair Campaign Practices Commission which confirmed the fact that the commission had, on March 30, 1977, found that CARC was in violation of section 602 and had ordered CARC to deposit the sum of $18,600 in the Berkeley general fund.

On September 29, 1977, summary judgment was entered declaring that section 602 was unconstitutional as violative of plaintiffs' rights under the First Amendment to the United States Constitution and article I, section 2, of the California Constitution. Defendants filed a timely notice of appeal from the judgment.

This case is not the first to challenge a part of the Berkeley Election Reform Act of 1974. In Pacific Gas & Electric Co. v. City of Berkeley (1976) 60 Cal.App.3d 123, 131 Cal.Rptr. 350, this court held that a section of the act which prohibited any person from making a contribution to “ ‘any candidate or committee,’ ” was invalid as an impermissibly overbroad restriction of the plaintiff's First Amendment right of free speech. We concluded that the unconstitutionality of the provision was established by the recent decisions in Buckley v. Valeo (1976) 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659, and Citizens for Jobs & Energy v. Fair Political Practices Com. (1976) 16 Cal.3d 671, 129 Cal.Rptr. 106, 547 P.2d 1396. Although the precise focus of the legal inquiry here differs from that of the Pacific Gas & Electric Co. case, there is a substantial similarity of issues and analysis.

The legal principles applicable to this case are clear and well established. The overriding importance of the First Amendment rights of free speech and association require that, on judicial review, any governmental curtailment of these rights be subjected to strict scrutiny. Any such impairment will be sustained only upon a showing that the law is supported by a compelling interest and that this interest is promoted by means which are closely drawn so as to avoid unnecessary interference with protected freedoms. (Buckley v. Valeo, supra, 424 U.S. 1, 25, 96 S.Ct. 612, 46 L.Ed.2d 659; N.A.A.C.P. v. Button (1963) 371 U.S. 415, 438, 83 S.Ct. 328, 9 L.Ed.2d 405; Hardie v. Eu (1976) 18 Cal.3d 371, 377, 134 Cal.Rptr. 201, 556 P.2d 301.)

On the date when this court decided the Pacific Gas & Electric Co. case, Buckley, Citizens for Jobs & Energy, and Schwartz v. Romnes (2d Cir. 1974) 495 F.2d 844, were the only relevant precedents. Although many jurisdictions had recently enacted laws which placed restrictions on the unlimited ability of citizens to make contributions to candidates, causes and political committees, the constitutionality of these statutes was uncertain. Now there is a considerable body of decisions to which we may look for guidance.

In Hardie v. Eu, supra, 18 Cal.3d 371, 134 Cal.Rptr. 201, 556 P.2d 301, the California Supreme Court ruled that sections 85200-85202 of the Government Code imposed impermissible restraints upon the First Amendment rights of free speech and association. The statutes which were held unconstitutional prohibited, inter alia, “any ‘person’ from incurring expenditures ‘in furtherance of . . . circulation or qualification of a statewide petition . . .’ unless such expenditures are expressly authorized by the ‘proponent’ ” (pp. 374-375, 134 Cal.Rptr. p. 202, 556 P.2d p. 302), and limited the total expenditures incurred in circulating and qualifying an initiative to 25 cents for each signature needed to qualify the measure.

In First National Bank of Boston v. Bellotti (1978) 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707, a Massachusetts law which prohibited corporations from making contributions or expenditures “ ‘for the purpose of . . . influencing or affecting the vote on any question submitted to the voters . . .’ ” (p. 768, 98 S.Ct. p. 1411) was held to be an unconstitutional restriction on the plaintiff's First Amendment rights to disseminate information and to participate in the discussion of public issues which affected the plaintiff's business.

In C & C Plywood Corp. v. Hanson (9th Cir. 1978) 583 F.2d 421, the question before the court was the constitutionality of a statute which forbade corporations and banks from making contributions to promote or defeat any ballot issue. Under compulsion of Buckley and Bellotti, the Hanson court held the law invalid as an overly broad restriction of a corporation's right to express its views on issues of general public interest as they affected the corporation.

A recent and most relevant precedent for resolution of this case is Let's Help Florida v. Smathers (D.C.N.D. Fla.1978) 453 F.Supp. 1003. At issue in that case was the validity of a Florida statute which placed a $3,000 ceiling on expenditures by any person or committee in support of, or in opposition to, an issue to be voted on in a statewide election. The limitation on expenditures was struck down as constitutionally defective in that it was not supported by a compelling state interest; also, it employed means which were overly broad and unnecessarily impinged upon protected freedoms.

It is important to note that Hardie, Bellotti, Hanson and Smathers all involved situations where laws were invalidated on behalf of artificial entities which wished to expend money to influence public opinion on a matter of current public interest. In none of these cases were the plaintiffs attempting to advance or oppose the candidacy of persons seeking public office. We think that this distinction is crucial. In Buckley v. Valeo, supra, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659, which is the seminal decision on legislation regulating the electoral process, the United States Supreme Court decided the constitutionality of various provisions of the Federal Election Campaign Act of 1971 (86 Stat. 3), as amended in 1974 (88 Stat. 1263). The court held, inter alia, that a limitation on the contributions an individual or a committee might make to a particular candidate infringed upon First Amendment rights, but that such a limitation was permissible because it was supported by the state's compelling interest in preventing the possibility and appearance of corruption which is implicit in the perception “that large contributions are given to secure a political Quid pro quo from current and potential office holders . . . .” (Buckley v. Valeo, supra, at p. 26, 96 S.Ct. p. 638.) However, the Buckley court also held that a limitation on expenditures “ ‘relative to a clearly identified candidate’ ” (p. 39, 96 S.Ct. p. 644) in excess of $1,000, a limitation on the expenditures from a candidate's personal resources in excess of certain fixed ceilings, and a limitation on aggregate campaign expenditures by candidates, were all unconstitutional restrictions of First Amendment rights which were not justified by such governmental interests as the prevention of corruption or the appearance of corruption, equalization of the relative financial ability of candidates or groups to influence the outcome of elections, or the reduction of the rapidly increasing costs of campaigns. The court concluded that the restrictions within this second category “place substantial and direct restrictions on the ability of candidates, citizens, and associations to engage in protected political expression, restrictions that the First Amendment cannot tolerate.” (Pp. 58-59, 96 S.Ct. p. 654.)

For our purposes, the central holding of Buckley is its distinction between candidates and issue-oriented committees such as CARC. The only governmental interest which the Buckley court viewed as compelling was the potential for corruption implicit in contributions to candidates. Such interest is not present with regard to issue-oriented committees. (Buckley v. Valeo, supra, 424 U.S. 1, 45, 96 S.Ct. 612, 46 L.Ed.2d 659.) This distinction permeates the entire Buckley opinion.

Nevertheless, defendants insist that section 602 of the Berkley Election Reform Act of 1974 is justified by Berkeley's interest in obviating the “Mere appearances of political corruption . . . .” This contention is patently unfounded. Such an interest, within the context of participation by issue-oriented committees in the electoral process, cannot be accepted as legitimate, nor is it cognizable as “compelling.”

Defendants rely on a statement from Buckley to the effect that limitations on contributions to candidates “do not undermine to any material degree the potential for robust and effective discussion of candidates and campaign issues by individual citizens, associations, the institutional press, candidates, and political parties.” (Buckley v. Valeo, supra, 424 U.S. 1, 29, 96 S.Ct. 612, 639-640, 46 L.Ed.2d 659.) However, defendants take this excerpt out of context. It is found in that section of the opinion where the Buckley court held that limitations on contributions to Candidates were permissible. It has no application to limitations on contributions to issue-oriented committees, since the danger that justifies restrictions in one context is inapplicable in the other.

The implications of defendants' argument have been rejected by the courts. As cogently stated by the United States Court of Appeals, Second Circuit, “Whatever the justification for prohibiting contributions that are prone to create political debts, it largely evaporates when the object of prohibition is not contributions to a candidate or party, but contributions to a public referendum.” (Schwartz v. Romnes, supra, 495 F.2d 844, 852-853.) A recent expression by the United States Supreme Court is even more emphatic: “Referenda are held on issues, not candidates for public office. The risk of corruption perceived in cases involving candidate elections . . . simply is not present in a popular vote on a public issue.” (First National Bank of Boston v. Bellotti, supra, 435 U.S. 765, 790, 98 S.Ct. 1407, 1423, 55 L.Ed.2d 707.) These cases conclusively demonstrate that defendants' asserted interest is inadequate to sustain section 602's restraints on constitutionally protected rights.

A more basic, and equally unsupported thesis, is defendants' contention that plaintiffs' First Amendment rights are not infringed upon by section 602. Although it is less than explicitly stated, defendants appear to argue that Buckley supports the proposition that limitations on the amount of contributions restrict only the quantum of support for a candidate or issue and do not curtail the quantity or quality of free speech. There are two refutations of this contention.

First, while it is true that Buckley does contain statements which create the initial impression that contribution limitations are not objectionable if they fall short of an absolute prohibition, these statements do not appear in a discussion of issue-oriented associations. For example, defendants cite the following passage from Buckley :

“By contrast with a limitation upon expenditures for political expression, a limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor's ability to engage in free communication. . . . A limitation on the amount of money a person may give to a candidate or campaign organization thus involves little direct restraint on his political communication, for it 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. While contributions may result in political expression if spent by a candidate or an association to present views to the voters, the transformation of contributions into political debate involves speech by someone other than the contributor.” (Buckley v. Valeo, supra, 424 U.S. 1, 20-21, 96 S.Ct. 612, 635-636, 46 L.Ed.2d 659.)

This excerpt will not bear the interpretation which defendants place upon it. The passage is found in a section of the opinion denominated “General Principles”; technically, therefore, it is dicta. Also, the entire tenor of the passage indicates that it was addressed to limitations of contributions to Candidates. This can be graphically demonstrated by considering the three sentences defendants did not see fit to include: “A contribution serves as a general expression of support for the Candidate and His views, but does not communicate the underlying basis for the support. The 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. At most, the size of the contribution provides a very rough index of the intensity of the contributor's Support for the candidate.” (P. 21, 96 S.Ct. p. 635-636; emphasis added.) The entire passage, read as a whole, indicates that the court's attention was focused upon candidates and the auxiliary committees organized to promote such candidates. It has no direct application to the scope of this case, which is the restriction of contributions to an issue-oriented committee with no connection to a particular candidate. As mentioned previously, this distinction was the central feature of the Buckley court's decision, namely, to accord different constitutional status to contributions, depending on the intended recipient and the uses for which such contributions will be employed.

Secondly, the implication in the passage, which defendants appear to embrace, that the quality of a contribution as speech is somehow diffused when given to a committee, is dispelled upon careful analysis of the court's precise language. The court spoke of a contribution as “a general expression of support for the candidate and his views,” and characterized a contribution as an “undifferentiated, symbolic act . . . .” (P. 21, 96 S.Ct. p. 635.) A candidate is likely to have opinions on more than one subject; thus any contribution to him will be “undifferentiated” to the extent that it cannot be allocated for the candidate's use contingent upon his espousal of a particular point of view on a particular issue. Obviously, the situation is entirely different when a contribution is made to an entity dedicated to a single issue. To the extent that a contribution is made to such an issue-oriented body, the situation is not likely to fall within the purview of the Buckley court's statement that “the transformation of contributions into political debate involves speech by someone other than the contributor.” (P. 21, 96 S.Ct. p. 636.) There is a tighter nexus between a contributor and a one-issue organization, and a greater likelihood that the contribution will be used as the contributor wishes than is the case with the attenuated relationship between a contributor and a political candidate who is obliged to take a position on more than one issue. “The committee could therefore be viewed as a conduit for the speech of the contributor directed to a single goal.” (Let's Help Florida v. Smathers, supra, 453 F.Supp. 1003, 1011, fn. 7.)

To accept defendants' position would also penalize the exercise of a collateral First Amendment right. Defendants do not contend that a government may lawfully limit the expenditures of an individual who seeks, by himself, to campaign for or against a particular ballot measure. Yet they would have this court hold that when a contributor joins with others for such purpose, each is then limited to a contribution ceiling of $250. The supreme anomaly is that this would mean that a contributor is entitled to less protection when he exercises his First Amendment rights of free speech And association, than if he exercised only his right to free speech. Such a position has been rejected by at least one other court. (Let's Help Florida v. Smathers, supra, 453 F.Supp. 1003, 1013-1014.) We conclude that defendants can advance no interest sufficient to justify section 602's restrictions on protected First Amendment liberties. Quite the contrary, their case demonstrates compelling reasons why this type of expression should not be limited.

Two factors need to be considered at this point. The first is the increasing tendency of the California electorate to engage in direct democracy by means of the initiative and referenda process. The second factor, a concomitant of the first, is the skyrocketing costs attending this trend towards greater levels of direct action by citizens. In Buckley v. Valeo, supra, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659, the Supreme Court took note of the effect of measures like section 602 which would seek to limit the basic input of the political process: “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. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money. The distribution of the humblest handbill or leaflet entails printing, paper, and circulation costs. Speeches and rallies generally necessitate hiring a hall and publicizing the event. The electorate's increasing dependence on television, radio, and other mass media for news and information has made these expensive modes of communication indispensable instruments of effective political speech.” (P. 19, 96 S.Ct. p. 634.)

One of the principal reasons for making a contribution is to persuade. It is true that many people fear that unlimited expenditures by large corporations or by wealthy individuals will not add to the electorate's edification, but will instead inundate the electorate with material which is slanted and misleading. We believe that to accept this premise is to slander the intelligence of the voters. Assuming that the sources of contributions are disclosed, as is required under the Berkeley legislation, a contribution limitation evidences a fundamental distrust of the voters' ability to recognize campaigning by special interest advocates within the context of an issue-oriented election. Such a paternalistic attitude is repugnant to the First Amendment: “(T)he people in our democracy are entrusted with the responsibility for judging and evaluating the relative merits of conflicting arguments. They may consider, in making their judgment, the source and credibility of the advocate. But if there be any danger that the people cannot evaluate the information and arguments advanced, . . . it is a danger contemplated by the Framers of the First Amendment.” (First National Bank of Boston v. Bellotti, supra, 435 U.S. 765, 791-792, 98 S.Ct. 1407, 1424, 55 L.Ed.2d 707.) Furthermore, within the context of issue-oriented committees, the disclosure requirements have been deemed adequate to prevent the appearance of corruption, the only interest advanced by the defendants in support of section 602. (Buckley v. Valeo, supra, 424 U.S. 1, 67, 96 S.Ct. 612, 46 L.Ed.2d 659.)

The concept of corruption in relation to issue-oriented committees deserves treatment. As has been noted, the term “corrupt” implies the existence or expectation of a political Quid pro quo. In addition, the term “ corruption” subtly conveys the impression that there is a deviation from an objective standard. Such a belief can have no validity. In a democratic system, objective “truth” is that which the majority subjectively chooses to adopt. Hence it is delusive to maintain that a declaration by the electorate can be “corrupt.” The price of free speech is that we must put up with opinions which we may deem to be the purest humbug, untainted by any trace of truth. The First Amendment does not allow government to deny citizens the right to draw the usual inferences from valueless material, because nothing can be deemed valueless for purposes of the First Amendment, itself a value-free provision whose protection is not dependent upon “the truth, popularity, or social utility of the ideas and beliefs which are offered.” (N.A.A.C.P. v. Button, supra, 371 U.S. 415, 445, 83 S.Ct. 328, 344, 9 L.Ed.2d 405.) “The very purpose of the First Amendment is to foreclose public authority from assuming a guardianship of the public mind . . . . In this field every person must be his own watchman for truth, because the forefathers did not trust any government to separate the true from the false for us.” (Thomas v. Collins (1945) 323 U.S. 516, 545, 65 S.Ct. 315, 329, 89 L.Ed. 430 (concurring opinion of Jackson, J.).)

If the purpose for the restriction of contributions was an intent to equalize the position of the parties, it cannot be accepted. The concept that government may restrict the speech of some elements in order to enhance the relative voice of others is wholly foreign to the First Amendment. (Buckley v. Valeo, supra, 424 U.S. 1, 48-49, 96 S.Ct. 612, 46 L.Ed.2d 659; First National Bank of Boston v. Bellotti, supra, 435 U.S. 765, 790-791, 98 S.Ct. 1407, 55 L.Ed.2d 707.) In such a case, there would be no guarantee that a stifling of one side would produce a corresponding enhancement of the other. Attempts to restrict the public's access to information are disfavored. It is better to secure the widest possible dissemination of information from diverse and antagonistic sources, and to assure unfettered interchange of ideas for the bringing about of political and social changes desired by the people. (New York Times Co. v. Sullivan (1964) 376 U.S. 254, 266, 269, 84 S.Ct. 710, 11 L.Ed.2d 686; See also Mills v. Alabama (1966) 384 U.S. 214, 86 S.Ct. 1434, 16 L.Ed.2d 484.)

Section 602 is a direct and substantial restriction on plaintiffs' rights of free speech and association. It has employed means which are unnecessarily broad, thereby invading the area of protected freedoms in order to combat a perceived evil which has no legal reality. It has set itself against the First Amendment's basic presupposition “that right conclusions are more likely to be gathered out of a multitude of tongues, than through any kind of authoritative selection. To many this is, and always will be, folly; but we have staked upon it our all.” (United States v. Associated Press (D.C.S.D.N.Y.1943) 52 F.Supp. 362, 372.)

Defendants have cited no case where such a limitation on contributions to issue-oriented associations has been upheld, and our research has only confirmed this dearth of authority. We conclude, therefore, that the trial court was correct in holding that section 602 is an unconstitutional abridgement of plaintiffs' rights of free speech and association.

The judgment is affirmed.


1.  Section 219 of the act defines “persons” as “an individual, proprietorship, firm, partnership, joint venture, syndicate, business trust, company, corporation, association, committee, and any other organization or group of persons acting in concert.”

2.  Section 604 of the act requires that “any person . . . found guilty of violating the terms of this chapter, . . . shall pay promptly, from available campaign funds, if any, the amount received from such persons in excess of the amount permitted . . . to . . . the General Fund of the City.”

ROUSE, Associate Justice.

TAYLOR, P. J., and MILLER, J., concur.

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