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Zimmerman v. City of Austin, Texas

United States Court of Appeals, Fifth Circuit

February 1, 2018

DONALD ZIMMERMAN, Plaintiff - Appellant Cross-Appellee
CITY OF AUSTIN, TEXAS, Defendant-Appellee Cross-Appellant

         Appeals from the United States District Court for the Western District of Texas

          Before SMITH, BARKSDALE, and HIGGINSON, Circuit Judges.


         Donald Zimmerman, a former Austin City Councilmember, challenges four provisions of Austin's campaign-finance law: a base limit on contributions to candidates; an aggregate limit on contributions from persons outside of the Austin area; a temporal restriction prohibiting all contributions before the six months leading up to an election; and a disgorgement provision requiring candidates to distribute excess campaign funds remaining at the end of an election. Following a bench trial, the district court upheld the base limit, concluded that Zimmerman lacked standing to challenge the aggregate limit, and struck down the temporal restriction and the disgorgement provision as unconstitutional abridgements of First Amendment rights. For the following reasons, we affirm.



         In 1997, voters in the city of Austin, Texas, approved a ballot initiative to amend the City Charter and add various restrictions on campaign contributions and expenditures. The measure passed with 72% of the vote. It was spearheaded by a group called "Austinites for a Little Less Corruption! a/k/a/ No More Corruption!" and, according to testimony presented at trial, was a response to the public perception that large campaign contributions from land developers and those with associated interests were creating a corrupt, "pay-to-play" system in Austin politics.

         Four of the restrictions are at issue here. First, Article III, § 8(A)(1)- the base contribution limit-prohibits candidates for mayor or city council from accepting campaign contributions of more than "$300 per contributor per election from any person, " with that amount to be adjusted annually for inflation. Austin, Tex. Code, Art. III, § 8(A)(1). At the time this suit was filed, the applicable limit was $350. Second, § 8(A)(3)-the aggregate contribution limit-prohibits candidates from accepting "an aggregate contribution total of more than $30, 000 per election, and $20, 000 in the case of a runoff election, from sources other than natural persons eligible to vote in a postal zip code completely or partially within the Austin city limits, " (which the parties refer to as the "zip code envelope"). Id. § 8(A)(3). Those amounts are also subject to adjustment for inflation, and were $36, 000 and $24, 000, respectively, at the time this suit was filed. Third, § 8(F)(2)-the temporal restriction-prohibits candidates or officeholders from soliciting or accepting political contributions except for during the 180 days before an election. Id. § 8(F)(2). Finally, § 8(F)(3)-the disgorgement provision-requires candidates to "distribute the balance of funds received from political contributions in excess of any remaining expenses" to the candidate's contributors, a charitable organization, or the Austin Fair Campaign Fund. Id. § 8(F)(3). Candidates may, however, retain up to $20, 000 "for the purposes of officeholder expenditures." Id. § 8(F)(6).

         As will become relevant, Texas law distinguishes between "campaign contributions" and "officeholder contributions." "Campaign contributions" are contributions "to a candidate or political committee that [are] offered or given with the intent that [they] be used in connection with a campaign for elective office or on a measure." Tex. Elec. Code § 251.001(3). "Officeholder contributions" are contributions "to an officeholder or political committee that [are] offered or given with the intent that [they] be used to defray" officeholder expenses. Id. § 251.001(4). The catchall phrase "political contribution" includes both campaign contributions and officeholder contributions. Id. § 251.001(5). Section 8(A)(1) of Austin's Charter refers to either "campaign contributions, " Austin, Tex. Code, Art. III, § 8(A)(1), or "contribution[s]" generally, id. § 8(A)(3). Section 8(F), which specifically states that it incorporates the definitions set forth in the Texas Election Code, id. § 8(F)(1), refers to "political contributions." Id. § 8(F)(2)-(6).


         Donald Zimmerman ran for the District 6 seat on Austin's city council in 2014. District 6, located in northwest Austin, had an estimated population of 92, 721 in 2014, with 70, 808 eligible voters. Six candidates competed for the District 6 seat. Zimmerman won the general election and the ensuing runoff. After serving a two-year term, he ran for re-election in 2016 and lost.

         Zimmerman initiated this lawsuit in July 2015, alleging that the four provisions of the Austin City Charter enumerated above are unconstitutional restrictions on free speech. After a bench trial, the district court held that the base limit was constitutional in light of the city's interest in preventing quid pro quo corruption; that Zimmerman did not have standing to challenge the aggregate limit because he did not come close to reaching the relevant limits; that the temporal restriction was an unconstitutional limit on contributions because the city had failed to show that it was sufficiently tailored to serve an interest in preventing quid pro quo corruption; and that the disgorgement provision was an unconstitutional restriction on expenditures because the city had failed to show that it was the least restrictive means of preventing quid pro quo corruption. The district court permanently enjoined Austin from enforcing the temporal restriction and the disgorgement provision. The parties timely cross-appealed the rulings adverse to them.


         "The standard of review for a bench trial is well established: findings of fact are reviewed for clear error and legal issues are reviewed de novo." Guzman v. Hacienda Records & Recording Studio, Inc., 808 F.3d 1031, 1036 (5th Cir. 2015) (quoting One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 262 (5th Cir. 2011)). "A finding of the trial judge 'is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" Id. (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985)). Accordingly, we review the trial judge's factual findings with great deference, and cannot reverse them simply because we would reach a different conclusion. See id. "Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Anderson, 470 U.S. at 574.


         Zimmerman first challenges the district court's decision regarding the $350 base limit on campaign contributions.[1] He contends that the base limit is subject to strict scrutiny as either a content-based restriction on speech or an indirect burden on campaign expenditures and that it fails to pass muster under that stringent standard. Alternatively, he contends that even if strict scrutiny does not apply, the limit is not justified by a sufficiently important governmental interest and, even if it were, it is not sufficiently tailored to that interest. We disagree on all points.


         First, the limit is not a content-based restriction on speech. Zimmerman argues that the base limit applies only to campaign contributions, but not officeholder contributions, because the language of the base limit refers only to "campaign contributions, " while other provisions in the Charter refer more broadly to "political contributions"-which, under the Texas Election Code, includes both "campaign contributions" and "officeholder contributions." According to his argument, that leaves officeholders free to collect unlimited amounts for the purpose of defraying officeholder expenses, including the production and dissemination of constituent newsletters, see Austin, Tex. Code § 2-2-41 (stating that officeholders may use funds from officeholder accounts for the purpose of "newsletters"). On that basis, Zimmerman argues that because a contributor can give only $350 to fund campaign speech but can give an unlimited amount to fund a newsletter describing an incumbent's achievements, the base limit constitutes a content-based restriction on speech.

         Austin responds that the base limit draws no such distinction between campaign contributions and officeholder contributions. It points first to subsection (G) of Article III, Section 8 of the Charter, which provides that "[a]ny incumbent mayor or councilmember is subject to the regulations applied to candidates for the office he or she holds." Austin, Tex. Code, Art. III, § 8(G). It also points to subsection (F), the only subsection of Article III, § 8 that states that its terms "have the same meaning they have in Title 15 of the Texas Election Code." Id. § 8(F). Because the base limit appears in subsection (A), Austin argues that it does not incorporate the definitions from the Texas Election Code and that, although subsection (A) refers only to "campaign contributions, " it is intended to reach any contribution to a candidate or incumbent officeholder. Finding Austin's interpretation to be a reasonable interpretation of the Charter, and one that avoids a possible constitutional conflict, we defer to it. See Voting for Am., Inc. v. Steen, 732 F.3d 382, 387 (5th Cir. 2013) ("We defer to [a city's] interpretation of how the law is to be enforced, so long as it does not conflict with the statutory text." (quoting Voting for Am., Inc. v. Andrade, 488 Fed.Appx. 890, 895 (5th Cir. 2012))); id. ("Our task as a federal court is, to the extent possible, to construe the provisions to avoid a constitutional conflict." (quoting Voting for Am., Inc., 488 Fed.Appx. at 895)). In light of that interpretation, the base limit does not constitute a content-based regulation on speech.

         Zimmerman's second argument for strict scrutiny is more easily disposed of. He contends that the base limit burdens expenditures and that burdens on expenditures, even indirect ones, are subject to strict scrutiny. See, e.g., Ariz. Free Enter. Club's Freedom Club PAC v. Bennett, 564 U.S. 721, 736-40, 748 (2011) (applying strict scrutiny to law that indirectly burdened expenditures by penalizing personally financed candidates for spending above a certain threshold). In some vague sense, of course, contribution limits indirectly burden expenditures. You have to raise money to spend it, and contribution limits mean that you cannot raise as much from any one contributor. But the Supreme Court has been clear that contribution limits are analytically distinct from expenditure limits, create a far lesser burden on speech, and, for that reason, are subject to less searching scrutiny. See FEC v. Colo. Republican Fed. Campaign Comm'n, 533 U.S. 431, 437 (2001) (noting "line between contributing and spending"); FEC v. Mass. Citizens for Life, Inc., 479 ...

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