Court upholds Political Reform Act amendments under SB 1439

Senate Bill 1439 became effective on Jan. 1, 2023. The bill amended the Political Reform Act (PRA), approved by the voters in 1974, by eliminating an exception to the prohibition on “pay-to play” campaign contribution that applied to local elected officials. Because the exception was eliminated, local elected officials are now subject to the campaign contribution prohibition and cannot participate in decisions with individuals or organizations that they received certain contributions from. A November CSBA blog post contains a more detailed analysis of the application of SB 1439.

In February 2023, about one month after the new law took effect, eight business groups and two local officials sued the Fair Political Practice Commission (FPPC), which oversees the execution of the PRA, arguing that the new law is unconstitutional under the California and U.S. constitutions. On May 25, 2023, a Sacramento Superior Court issued a tentative decision in favor of the FPPC and upholding the law as constitutional under both the California and U.S. constitutions.

The plaintiffs in this case made several constitutional arguments, one of which relied on the voter initiative process. Article II, section 10(c) of the California Constitution prohibits the amendment of a voter initiative such as the PRA, unless the initiative specifically allows for the amendment. The PRA allows for amendments to the law if two thirds of the Legislature pass the amendment and the amendment furthers the PRA’s purpose. The Superior Court found that SB 1439’s amendment to the PRA did further the purpose of the PRA because it sought to eliminate corruption and the appearance of corruption, a main emphasis of the PRA at its passage. Additionally, because the PRA contains provisions allowing for amendments to be made, the Superior Court rejected the plaintiffs’ argument that the PRA’s content and “comprehensive system” prevented this amendment.

The plaintiffs also argued that the new SB 1439 requirements violate the First Amendment free speech rights related to campaign contributions under both the California and U.S. constitutions. The court disagreed with the plaintiffs and explained that although limits to campaign contributions must pass a rigorous standard of review, the limits in SB 1439 pass that standard without issue. Specifically, an interference with campaign contributions may stand if the government can show a sufficiently important interest and there are closely drawn means to accomplish that interest. This is the federal standard of review, and the court found that the California constitution did not require anything different. Under this standard, SB 1439’s interest in preventing quid pro quo corruption and the appearance of corruption satisfied the requirement and the means to do so were closely drawn, as required.

The court concluded by rejecting the plaintiffs’ argument that the new law is overly broad and underinclusive, two additional free speech arguments. The law, the court said, is not overly broad because there are existing provisions in the PRA and other laws that are similarly structured and not unconstitutional. Additionally, there are available remedies in SB 1439 that provide an alternative to the penalty for violating the law. It is not underinclusive because the government does not have to address all wrongs at the same time.

While the Superior Court’s May 25 decision was a tentative ruling, it is expected to become the final judgment after none of the parties requested oral arguments to challenge the court’s tentative decision. Moving forward, the court may make some changes to the content of the opinion, but it is unlikely that the final decision will change. The plaintiffs are expected to appeal the court’s decision when it is final.