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tv   Justices Hear Case on Personal Campaign Loan Restrictions  CSPAN  January 20, 2022 2:50am-4:22am EST

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2022 to issue a ruling. >> justice sotomayor is participating this morning. we will hear argument first in case 2112 fec v. ted cruze for senate. mr. stewart. >> mr. chief justice, and may it please the port -- court. it should hold the statutory loan repayment limit is constitutional. of wiley's not standing for two reasons. although they have directed
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their challenge to the statutory limit, they stipulated the first 200 $50,000 of his loan was repaid with pre-election funds. the statute does not currently restrict the senator's ability to obtain full repayment. the current regulatory barrier to repayment is self-inflicted. appellees could have avoided injuries by behaving as they would have if the statute and regulations did not exist. they went out of their way to engage in transactions they would not otherwise have undertaken, solely to subject the senator to a financial loss and thereby lay the groundwork for a lawsuit. that self infliction of injury, for no purpose other than to facilitate --, severed the causal link between the challenged laws and senator cruz's injury. on the merits, the loan repayment limit is constitutional. it imposes insubstantial burdens on the financing of electoral campaigns and targets a practice
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that has significant corruptive potential. a postelection contributor generally knows which candidate has won the election, and postelection contributions do not further the usual purposes of donating to electoral campaigns. because repayment of candidate loads increases the candidates personal wealth, the conduct the statue resonate -- regulates implicates the same concerns that underlie limits on gifts to federal officials. i welcome questions. >> mr. stewart, other than section 3-4, is there any other basis for enforcing a regulation? mr. stewart: none has been identified so far. >> if section 304 is gone, there is no enforcement. mr. stewart: that would be the result likely. it would be up to the fec to examine other provisions of the campaign finance laws and ask whether the limit would continue to serve a valid purpose even
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without the statute but we would concede the likely result if the statute were declared invalid is the regulation would cease to be on the books or enforceable. none of this was litigated below the district they could have identified the regulation as the provision of law that was causing their injury and filed suit to have the regulation set aside. if they had done that, they could have identified it as one potential ground for invalidating the regulation, the allegation that the regulation rested on an invalid statute. there would have been to disadvantages to pursuing the
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claim that way. first, if they identified the regulation as the tart of their -- target of their challenge, they would not have been able to invoke the three-judge court mechanism and second, they have alleged and couched three through five other complaint both constitutional and nonconstitutional challenges to the regulation and if they had identified the regulation as the source of their injury, under usual principles of constitutional avoidance, the court would have been obliged to consider their nonconstitutional challenges to the regulation and only if those were rejected wouldn't have proceeded to the constitutional issues. crisis is one of your arguments that the following party cannot challenge the constitutionality of a law that imposes an allegedly unconstitutional restriction on the exercise of a right if the party could have very easily satisfied the
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preconditions for the exercise? >> i think we would probably say that. i don't think it is necessary for the court to go that far. >> how can that be the law? a state university says no person of a particular race may enter any of the university buildings unless that person pauses for two seconds, stand still for two seconds before entering the building, would you say you can't challenge that racial restriction because it is no big deal to pause for two seconds before you go into the building? >> the court might say in the context of race discrimination that the mere fact of being subject to racially disparate treatment is -- regard as of any other concrete consequence -- >> you think that is limited to nonconstitutional instances of racial discrimination?
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it would not apply to free street -- free-speech rates? >> in order to establish standing, a point of has to show not just the deprivation of -- demonstration of a legal right. >> made his issue run an editorial criticizing the president unless it is in a particular font? >> the reason i would say the court does not need to address those more difficult hypotheticals is that at least in order to challenge a limitation like that, the newspaper would have to allege if it were not for this restriction we would use a different font. what makes this case particularly easy in our view is that appellees could have aborted their injury by doing precisely the thing they would have done if the statute and regulation were there. >> one more example.
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>> section one says no newspaper may run an editorial criticizing this. section two says any editorial criticizing the mayor must be published -- it must be published within 20 days after the speech. where the newspaper have standing to challenge section one or only section two? >> could you -- >> it is a little complicated. the town passes an ordinance. section one, no newspaper may run an editorial criticizing any speech delivered by the mayor. section two, any editorial criticizing a speech delivered by the mayor must be published within 20 days after the mayor's
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speech. can the newspaper after the 20 days have passed challenge section one or only section two? >> i think they could probably challenge both but they would have to say were it not for this legal restriction that we would publish an editorial critical of the mayor after 20 days. >> i think it is actually easy to find examples such as we have just heard. you have to do is take anything that restricts time. the reason they want to do it after 20 days. they want to do it after 20 days. where does that fact take standing away? all you have to do is take any statute you want that might be unconstitutional and you say it does not apply on a certain day and then you say they can do it on that day or it does not apply in a certain place? you say some people can very
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easily. i just don't know of a case where we have looked into if they want to do a thing that the statute forbids -- that we have looked at how easy it would be to do it any different way or in a different place or in a different time when they say we don't want to. what is that case? i'm not saying it does not exist, all i am saying is i can't find it. >> let me come at it this way by saying it is helpful to think of how the standing issue would have played out if the appellees had filed suit several days before the election and they had said this provision impairs our constitutional rights by proposing burdens on the use of loans for self financing. for standing purposes, the first question a court would ask is if this legal restriction were removed or if it did not exist, would you make a loan to your
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campaign and would you wait for more than 20 days? if the answer to that question was no, there would be no standing. that is carney versus adams. in carney versus adams, the point of challenge delaware law restrictions on the party affiliations of people who wanted to run for delaware judgeships. they sickly the whole standing analysis was never to determine if this plaintiff would actually run for a judgeship if these restrictions were removed and the debts removed and the court concluded that we have insufficient confidence that they would and therefore there was no standing. if you ask that question seven days before the election, the answer would be no standing. they have stipulated that the only reason for making the loan and the only reason for the delay in repayment was to facilitate the lawsuit and if there had been no statute or regulation, there would have been no lawsuit to facilitate. if these laws were not on the books, they would not have made the loan. if they would have, it would have been promptly repaid.
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they could have avoided injury -- >> the analysis in carney verse adams -- versus adams is a lot more concrete then your first hypothetical. these cases are hard enough when you're trying to figure out the weight of the infringement on the first amendment values against what is the protective effect on potential corruption. i don't know how you would do that in the first place but to say that the standing will depend upon a particular calculation, i think it is much more concrete when you're asking if somebody would go run for office. that is also harder but not anywhere approaching the indeterminacy of the calculation we are supposed to make here.
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the calculation on the merits might be difficult. the calculation on standing i think is very straightforward. if the appellees had filed their suit seven days before the election and said in their complaint that senator cruz has no intention of loaning money to his campaign regardless of the outcome of this suit but he feels strongly that a statute is unconstitutional and he would like judicial determination to that effect, clearly there would have been no standing. never the court thought of the merits of the constitutional claim. what we have here is essentially that. appellees have stipulated that if there were no statute, if there were no reg, they never would have made the loan and they would have probably repented if the loan had been made. >> test cases are not always -- they don't always have a lack of standing. if you have people challenging discriminatory housing practices and then go in and say we are thinking about buying this house and they are discriminate
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against because of their race and they don't say whatever, -- course they may not have to prove that they would buy the house in the same way. they do show that they have to be ready to apply. the question is if they did not have standing seven days before the election, can they manufacture standing by voluntarily subjecting themselves to an injury solely for the purpose of facilitating a lawsuit. >> i do have difficulty understanding this manufacture business because he wasn't
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protruded -- he was only precluded from repaying it from certain funds. i don't know that this is a manufactured injury as such. can we go to the specific point or one of your many points outstanding? the one i am most concerned about is that he in fact did have no injury because he had used pre-election funds to repay his debt and there was no bar to him using postelection funds to pay the 10,000. >> yes. >> that is a different kind of situation. >> that is a different standing argument. that is an argument that the inability that he currently faces to repay the manning $10,000 is attributable to the regulation rather than to the statute but our argument --
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>> i am not even sure if it is a trivial ball to the statute. the statute says you can't use postelection funds to pay off more than 250,000 pre-election funds. but if he did not have pre-election debts greater than 10,000, he would still have the money to pay. crises loaned to the campaign 260 thousand dollars. the campaign had a $260,000 debt to him and it repaid 250,000 dollars of that amount and stipulated -- >> from pre-or post-? >> he alleged in the complaint that he paid it through postelection funds and the district court at the motion to dismiss stage rejected the standing argument, excepting is true that allegation but the appellees stipulated that none of that $250,000 was for money raised after the election and the stipulation is binding on them. if they used pre-election funds --
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>> they claim that they used 2024 election money instead of pre-election money. why don't we get to their allegations -- i have read the deposition of one of the treasurers who said he was now sure which funds were used. pre-election or 2024 election money. the question i have for you -- he said money is fungible and our intent was to use 2024 election fund money. this was money received by the campaign on the 2018 election but was redesignated for the 24 campaign. we would say those were
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pre-election contributions because they were received by the campaign before the election. the appellees essay the redesignation affected a simultaneous refund of the earlier contribution and the making of a new postelection contribution and there is a legal dispute about that. one thing i would say about that legal dispute is the position we have taken which is the one that is more favorable to campaigns generally. if it is redesignated afterwards, that counts as reelection contributions. that is the pro campaign position. they are taking the si campaign position. they said those funds were available to use and we did not attempt to trace the money because money is fungible and there was no point to it.
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all that does not go to the self-inflicted character of the injury. imagine a lawsuit in which a plaintiff said it came to my attention that mcdonald's was selling dangerously hot coffee. so i went to mcdonald's and bought a cup of coffee and poured it upon myself and i am suing for cost of medical treatment and for pain and suffering and i stipulate that my only reason for buying the coffee and my only reason for pouring it on myself was to facilitate this lawsuit. i think we would all have a strong reaction that that suit can go forward. i think the best basis for saying the suit can't go forward is even if we take as true the allegation that mcdonald's was behaving negligently by selling the copy, the own deliberate conduct in visiting injury upon herself solely in order to facilitate a lawsuit severed the causal link between any wrongdoing and her ultimate injury. that is basically what the court said.
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the plaintiffs said we have paid out money to take protective measures to prevent our own communications from being intercepted and the court said if you would otherwise lack standing to challenge the laws that allow the interception of communications on the grounds that your injury is not sufficiently real and immediately -- immediate, you can't manufacture standing through a self inflicted harm and the court said that is a reason for holding that the injury is not traceable to the allegedly unconstitutional statutes. that is the same position we are advocating here. they did not have to adjust their conduct even in the most minuscule way to avoid injury. all they had to do was not make the loan or to repay it promptly if they did and crucially those are exactly the things they have said they would have done if the statute did not exist. again, by saying our only motivation for making the loan and delaying repayment was to
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facilitate the lawsuit -- >> what is the doctrine -- they say it is his fault and the other one said you did a lot of this yourself. >> there is contributory negligence. quasi-never even heard in the mcdonald's case that mcdonald's was negligent because the coffee was too hot and the contributory negligence was yet maybe it was but you put it on yourself. i never heard that be as a standing talk. i would think of this as the tracing cases for the person who said i saw -- i wanted -- i wanted to go see if they would sell me a house but i just did it as a test case. contributory negligence generally presupposes that both sides are behaving unreasonably but it is not a doctrine that typically applies in circumstances where the plaintiff has deliberately caused harm to herself.
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the mcdonald's hypothetical is not simply that the paint -- point of herself was negligent and not taking good care of the coffee, it is that she deliberately caught yourself injury that she would not have otherwise suffered silly for the purpose of facilitating a lawsuit. that is basically what we have here. to the extent there is doubt about the intricacies of the doctrine, it is helpful for the court to take about the purposes of article three standing doctrine. it is to limit the jurisdiction of article three quarts to disputes that arise because the plaintiffs conduct of his own life is being interfered in some way. it is to prevent the quarts from being used to resolve abstract disputes that don't arise out of any actual injury to the plaintiff. if the point of can circumvent that restriction by manufacturing injury, the per interval is lost. i did allude earlier to trans union and in trans union, the
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court said if the point of does not suffer concrete harm, the suit can't go forward even if congress has created an express cause of action >> how are you supposed to wait such things such as the marginal burden on the exercise of first amendment rights, marginal assistance in preventing corruption, there is not a sufficient -- sufficient anticorruption interest but then all of a sudden there is. how is that analysis supposed to proceed in concrete terms? >> we don't pretend it is a bright line will but i think we would say two different things. the first is that there are severe restrictions on gifts to
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officials in all three branches of the government. there is an established understanding that the government has a substantial and legitimate interest in preventing the effects that might arise if federal officials were given money that would enrich themselves personally. the campaign finance laws in specifying the permissible uses of campaign contributions draw a line between campaign expenditures that will further the purpose on the campaign and campaign expenditures that will benefit the candidate personally. >> this does not enrich him personally because he is no better off than he was before, that is paying alone not lining his pockets. >> he is no better off than before the loan was made but after alone has been made, there may be a legal entitlement to be repaid but there will often be practical uncertainty about whether repayment will actually occur.
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that uncertainty may be sufficiently burdensome as a practical matter that some candidates will not make the loan at all for fear they will be left holding the bag. a contributor that illuminates that uncertainty but insures the debt will be repaid is conveying a financial benefit to the candidate. >> everyone who contributes to the campaign in that respect. >> at the time the pre-election contributions were made, there is still campaign literature to be distributed. there are television ads to be run. there are campaign activities still to be funded. after the campaign is over, the only permissible use of postelection contributions is to repay debts outstanding by the campaign and in many instances, the principal debt is owed to the candidate himself.
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if the donor knows that, the donor will understand that by giving money, he or she is enriching the candidate personally in the sense of making the candidate richer than she would be but for the repayment. >> why isn't the 2900 limit that applies sufficient to address the government anti-corruption interest, especially given the fact that it is a loan and not a gift? quarts two reasons. the 2900 dollar limit has in mind contributions that will be used for campaign related activities, for speech. the limits on gifts to federal officials are much lower. reflecting the insight that we worry about corruption at a much lower monetary level when the money is going into the candidate's pocket. the other thing i would say is in drafting the $2900 unit, congress is attempted to balance
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the desire to avoid corruption against the desire to enable contributors to participate meaningfully on the electoral process. that opportunity is basically over once the election occurs. >> just a couple of questions to satisfy my curiosity. could you -- if you determine, if the government determined that certain media outlets had an outsized influence on the election, it could it similarly limit the amount that they spend on editorials that equalize the influence? >> it could not and it could not do that with candidates. this is not a limit on the amount of money a candidate can spend or even the amount the amount a candidate can loan. it is purely a limit on the funds that can be used to repay
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the candidate loan after it has been made. >> i don't really see the difference but my final question is going back to your stand, you set a number of times that these self-inflicted injuries can't be a basis for standing. but how would you -- using that level of generality, what would you say about sitting in the wrong car? we would not say that is self-inflicted. >> plessis is attempting to assert a legitimate constitutional right and it is attempting to do something in the real world that presumably he would do if the law were not on the books. that is if there had been no law mandating segregation on the means of transportation, resume oblate plessis would have sat in an integrated section and would
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have had an interest in doing so. this is self-inflicted -- it is a different case when plaintiffs stand on the rights and insist on doing what they would do if the law were not in effect and experience injury as a result of it. this is a case in which the plaintiffs did something they would not otherwise have -- they would not otherwise had done so for the purpose of being injured. >> i am not sure i understand your explanation why the repayment of this loan is a gift when the repayment of other loans is never considered a gift. if we were writing an opinion in your favor on the merits, how would we explain that? >> it has become publicized that he loaned money to somebody, some officer and that person defaulted, did not pay him back
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so the federal officeholder is out $10,000 and some other person comes in and says i want to make this officer hold because spec what he is doing, i am going to give him the $10,000. that was certainly be a gift or that would be on the separate limitations on gifts to officeholders. >> in a case you have intervention by third-party. you don't have repayment of the loan by the person it was given to in the first place. >> i think it would cover indirect gifts as well. so if rather than giving the money directly to the officeholder in my hypothetical, the person had given money to the borrower, the borrower who was otherwise in default and said i am giving you this money on the understanding that you will pay it to the officeholder in satisfaction of your death, i think that would count as gift rules.
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it would implicate the interest that underlie the gift rules because it would be apparent that the effect of this practice was to make the officer richer than he otherwise would be at this point in time, even though it did not make him any richer that he had been before the loan was made. >> the chief asked a question about how you determine where the risk of corruption arises. congress has chosen the $250,000 figure. i guess what he was asking is if that figure is defensible and on the basis of what. >> at thing to are two ways to defend congress's ability to set some cap and not sickly to impose a blanket prohibition on all use of postelection contributions for candidate repayment. the first is congress can balance competing interests and the court often says no law pursues its print book objective to the furthest possible degree.
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though congress could say we also want to make it feasible for candidates to use loans as seed money to finance their campaigns and we are going to strike a balance. the other thing i would say is i do think a large outstanding balance creates potential that a small one may not. if an officeholder is confident that he will be able to receive a postelection contribution to repay the loan with a substantial cushion, no one donor can say i made you richer than i otherwise would be. no one donor would have significant leverage over the candidate and by contrast, if the loan is large and the candidate is unsure whether repayment will be forthcoming, each potential donor has greater leverage and congress could use a dollar threshold as a rough surrogate for a loan that indicates this uncertainty about whether the full repayment will
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be forthcoming and with respect to the $250,000 figure, i think that is just the same as what the court said about the individual contribution limit. once we have been satisfied that some limit is warranted, we don't probe the scalpel to determine that the one that congress has chosen is the best one. >> -- a part of mr. cooper's argument is that we should analogize an expenditure unit in the same way our law has clearly held you can't limit a candidate's ability to spend money on his own campaign. so to, it is a similar burden to say the candidates can't loan as much money as he wants to to his campaign. i am wondering what you think the difference is between those propositions. one of the reasons that the court in buckley gave -- why
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expenditure limits were nugget is that a candidate pots only spenders on his campaign will typically reduce the likelihood of corruption because the candidate will be less dependent on outside contributors for the running of the campaign. a loan really has the opposite effect. it causes the candidate to be more dependent on outside contributors, not just for running the campaign but for his own personal financial well-being. the other thing i would say is that the court said in buckley, a limit on the amount of money that you can spend on campaign speech is a limit on the amount of speech you can engage in. even in the 1976 modern world, effective electoral speech requires expenditures of money so a limit on expenditures limits speech. here, the impact is much more attenuated and uncertain.
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that is when they see -- say that speech will be oppressed, they mean that some candidates will be less willing to lend money to their campaigns or will be more willing to lend less money and as a result, fewer funds will be available to the campaigns to engage in speech. there may be some marginal effect of that nature but it is much less direct in the media than the -- a limit on the amount of money that a candidate can actually spend. >> you said earlier it is not a limit on the amount that a candidate can spend or even loan. i want to focus on that. it would seem to me that the law puts the candidate to a choice of spending your own money for low about $250,000.
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the choice is to spend that without any possibility of getting it back or not spending it all. -- it at all. why is that not right? >> i think the third option is you can't loan the money as much as you want and you can get full repayment as long as it is repaid with election funds. >> it is a close election. you are emptying this, it is down to the wire. there are no pre-election funds. that isctions work. we spend it all. we have to rely on postelection funds. this is quiet a bit from using his or her own resources about
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$250,000 because there is no possibility of repayment under this statute, even in $2900 chunks. >> i first conceived your premise that there will be situations very close to the election that the candidate will be faced with a choice of either limiting the size of the loan he makes or being willing to eat a portion of it. i think the two things i would say our first, congress has the ability of reducing candidate relies on outside contributors. they have to solicit postelection contributions for donors that know that the candidate has one and know that the donor is dependent on new money to be made whole.
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this has applied to our particular scenario. those are the postelection contributions. also, triggering the same corruption problem, it happens with the person that happens to give the 2900 on the 250 cap. this is closely related to what i said before.
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this triggers some corruption appearance problem. i don't see why that is different. where your $2900 comes in the wall before after you exceed the cap. >> we think congress constitutionally could have eliminated all use of postelection contributions to repay candidate loans. this is altogether and it could say that any money that is donated after one election has to be directed to the next one. the question is just can congress balance competing interests or can it focus on the very worst station -- manifestations? >> i want to give you a chance
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to talk a little bit about the other side of the balance. the she pointed out we are balancing burdens against the government interest in stopping corruption. the court found that you had not introduced sufficient evidence of corruption coming from these postelection contributions because there wasn't factual evidence. >> we think there is an analogy to the ghettos. congress is owed a certain amount of different because it has this on the way the campaign works.
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what is a realistic fear or is this a theoretical practice that we would respect to materialize? then you would give some way to congress's judgment even if you work applying heightened scrutiny. with respect to certain contribution limits, the court has given some deference to judgment even though it applies closely john scrutiny. the third thing is we have introduced significant evidence showing that people in the real world think this is a problem. i don't mean the recipients of the surveys, i mean the commentators, the people who follow politics closely. they agree that this is actually a practice of concern and the fourth thing i would say is this has been on the books for years. in the nature of things, it is hard to amass this.
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>> thank you counsel. >> these are meritless. even assuming as the government claims that the $10,000 injury was directly caused by the 20 day regulation and not by operation, the government cannot escape the fact that the 20 day rule is parasitic to section 304. if section 304 is invalid, the 20 day rule is also invalid. nor does it matter whether the injury was self-inflicted. at least since mr. plessis sat down, this court has repeatedly held that a plaintiff that deliberately subjects himself to
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unconstitutional government action for the admitted purpose of challenging it has created his standing, not defeated it. according to the government, congress gives a corruption all caps to the first 86 donors who max out after an election but abruptly closes the corruption window on donor number 87. that incongruity alone and there are many others the trays the genuine and legitimate purpose of the loan repayment limit. it is to limit test level the playing field. i welcome the court's questions.
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>> mr. cooper, could you just take a minute and tell us exactly how this loan repayment regulation provision affects speech or impedes speech? is it the speech of senator cruz? is it the speech of his donors? it is one thing to say that while it burdens it in some ways but i would like you to precisely tell us what speech and how it does that. >> thank you, it most dominantly burdens and creates a drag on the campaign speech, on the candidate speech. and deciding whether or not i
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would loan more than $250,000 to my campaign. because my ability to have it repaid is going to be the regulation my honor. to whatever extent the candidate does not loan that additional money, that candidate is for going the speech that additional money would purchase. as justice kavanaugh mentioned. >> the candidate can spend all the money he wants of his own money. put aside the loan question, he can spend a gazillion dollars of his own money if he wants to on his campaign. >> that is true. under the first amendment. >> so this restriction which is the restriction on loan
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repayment -- it is really a restriction on how a candidate can use third parties to finance his speech. isn't it? >> no more so than any other campaign contribution. every time. >> i think that is exactly right. it is a restriction on how campaign -- from the candidate perspective, it is one in the same thing. at whatever extent that loan is not repaid, it becomes a contribution. the important thing is -- >> i don't understand the distention. not a restriction on how the candidate finances is on speech but a restriction on third-party
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financing of the campaign, why isn't it complete the identical to contribution limits which we have a well-established law -- it is very different from a law respecting expenditures. >> when it candidate loans his own money to his own campaign to purchase speech, to increase the amount of expression in the advocacy of his own election as buckley protects, that candidate is calling upon the candidate's phone financial wherewithal. >> for a time until the third party's repaid that money. it is not an expenditure. it is just a financing mechanism. it is a timing mechanism that puts contributions from one-time to conservations for another time.
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>> the congress has placed no limit whatsoever on the amount of loans that a candidate may make and may be paid back with pre-election contributions. the place where this loan restriction creates a drag is particularly with challengers. that was its purpose. it creates a drag because a challenger who can't rely on contributions early in a campaign and has to get his campaign off the ground often has to loan that campaign money. that becomes critical to the campaign ability to speak on that day. >> it into -- it does not limit the amount of money a candidate
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can make on his own dime. what i'm suggesting is when we think about limits on speech that summary can make on someone else's dime, the appropriate ways to look in the law of campaign finance is the law respecting contribution limits rather than expenditure limits. >> i would simply push back by saying the statute itself defines loans as a thing of value. it defines loans as an expenditure, congress recognizes that when a candidate calls on his own financial resources to fund his campaign, even if it is ultimately alone and will hopefully be repaid by campaign contributions and any of the fundraising by the campaign itself, those are the candidate's own funds. congress itself has defined that as an expenditure. >> however you characterize it,
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i think you just answered your own question. you started off by saying that this is for congress because you were limited to $2900. why? because we are afraid that 2900 and one dollars would be seen as buying something else. it would be seen as another thing. that is why that is supposed to be ok. you say mr. jones give mr. smith the same $2901. but he gives it having known that mr. smith was elected. whatever appearance was there before hand to be worse after. you said why did they allow 250,000 russian mark you just answered it. because you can help candidates, challenge incumbents. we can help a candidate.
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so congress has these two completing interest. on the one hand, it wants to help the candidates challenge incumbents. are ones that have great confidence and on the other hand does not want the 2901 appearance. this is a crazy amount. >> i don't see anything in congress. i just see conflicting interest. here they have a compromise. what is wrong with that? >> the contribution based limits apply whether the conservation is made before the election or after the election. this court said in mccutcheon that so long as the contribution based limits apply, congress is
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determined to say there is no risk of corruption. a contribution made after the election has no more cognizable risk of corruption and the one made before the election. >> you are saying yes it does, you're right. absolutely right. the only problem here is in addition to being a contribution or however you want to characterize it, you are also helping the candidate put money up front. that is a pro competitive democratic interest. therefore, the interest with -- the interest we are trying to do with, the same point i just made, it is not in congress, there is a risk of corruption you get to 2901. but it is not appear contribution. it is pain back money that the candidate advanced. that is a plus. and it is a big plus.
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and we say we will with this particular kind of contribution which is not really a contribution, it is a payback. with this kind, we will offset. that is the same kind we were just talking about. >> i would submit to you that it is very incongruence if congress -- the government suggests they are concerned about the corrupting effect of postelection contributions that it is allowed $250,000 worth of those very postelection corrupting contributions. everybody is limited by the base contribution limits, all contributors are but here we have 86 contributors that get to come in and make this alleged gift.
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>> why might congress want to let them do that? i have said the same thing, i don't know if i need to repeat it. you have not quiet said why that is a bad reason. why might they want to do that? i will repeated for the third time. because they want to encourage candidates to loan money to their campaign at least for a while until they take off. >> they actually want to discourage candidates, the whole purpose of section 304 is to deter candidates from loaning money to the campaign. at least money -- >> if these were truly anticorruption, they should not allow any postelection contributions.
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>> the candidate with $3000 of debt is less locally to think about how he can salvage boats than the candidate with 500,000 dollars of debt. the candidate is in a very different situation the more the debt mounts and congress came in and said these are hard things, we are striking balances, we are picking $250,000 at a time when candidates really start worrying about the kind of debt that they have and the kinds of things they can do to reduce that debt. even though it is formally true that the 87 person is the same as the first person, in terms of they both spent $2900. the candidate isn't in a very
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different situation and is thinking about those quid pro quo's. >> congress did not allow the 87 person to come in and make that claim. i am glad you're focused on the candidate and the candidate as the candidate is deciding whether he will call upon his own financial wherewithal to fund speech. first amendment political speech. he is going to think twice if he can't afford to just give his campaign money, he is going to think twice, with or not he loans more than $250,000. in order to advocate his own election and that was the purpose of section 304, to make sure that the challenger did not loan more than $250,000 to his campaign or at least that if he did -- and on >> this goes back to my first question that i think we probably covered in sufficient detail.
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it is just the same as congress saying we are not going to allow a candidate to go get a $500,000 contribution. quote this is not candidate expenditure. this is campaign financing. this is a structure to allow a candidate to finance a campaign without spending of his own money. >> if i understood your point correctly, i don't think it is at all comparable that you have many contributors contributing only debate -- the base limit at most. the base limit under common sense's congress's judgment that
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anything at that amount or below has no cognizable risk of this. >> i was just adjusting that the kind of burden this is is the kind of burden that contribution limits are. not the kind of burden that spend at your limits are. the law treats those burdens very differently. that is the point i was making. >> i understand that and my response is that these are expenditures and the law that governs contributed limits applies to all of them across the board. >> i don't understand why you can test that this is like a gift. i guess this puzzles me. if i have a debt of $10,000 and somebody comes along and says you're doing such a good job, i'm going to pay that debt off for you, isn't that a financial benefit to make?
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>> of course. >> it is a gift. >> you're describing a gift but the repayment of a loan is not a gift. >> a third party is repaying my loan. the third party is providing a gift to me. >> your honor, >> that is like of course. >> if a third party says you're doing such a good job, i want to repay your loan for you, one day i had a $10,000 loan, the next day i don't, i am $10,000 richer. 70 just made me a $10,000 gift. >> your honor, if a contributor comes in and give the candidate a $10,000 gift, not just to gift statute but if there is "pro involved, the bribery statutes, -- quest the entire point of this law is that we start getting
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worried when people start repaying. that is just another way of putting money in his pocket. >> what about the rest of the campaign debts? this campaign ended up with $2.7 million worth of debt. less than 10% of it was the candidate debt. is this a gift to all of those creditors? of course not. nobody would view it that way. it is not a gift when the debtor play -- pays the creditor what the catheter -- when the debtor pays the creditor what is owed. all of the campaign debts are paid by contributions limited by the base conservation limits. all of them are but the candidate debts don't stand in
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any different shoes from the ad agencies or the consultants or the landlords of the campaign. >> does this statute apply any differently to candidates who lose then to candidates who win? >> no. it applies to losers as well as winners. in that respect, it is overinclusive. it is underinclusive in many respect but overinclusive in that respect. >> what is the possibility that a loser is going to necessarily get contributions afterwards? >> your honor, certainly losers of elections typically are not able to -- >> generally we don't look at people who are not likely to be injured when deciding the constitutionality of the statute. >> to whatever extent the
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section 304 and loan repayment limit does operate on a loser to prevent repayment of alone loan, it operates in the same way. this generates postelection contributions. >> the statute itself -- >> the statute does not, the regulation -- >>. >> for purposes of a
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hypothetical. >> it is only the regular should that imposes on you. it is a parasite. you should be able to challenge the act. but that is not the question. do you get a three-judge court? the challenge is only on the regulation. you can challenge the statute that gave birth to the regulation. that is the different question. >> i don't believe
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>> mr. chief justice, with respect, i believe it is not a different question. he goes to the case of the immediate cause of injury to the campaign and its inability to pay back $10,000 of that loan, but, your honor, the cause, it is fairly traceable to the statute itself, and even if we had never made a claim, any independent claim -- >> you win regardless of if the statute is constitutional or unconstitutional. you do not have the requirement of a constitutional challenge necessary to trigger the three-judge district court. >> your honor, if i had an
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independent constitutional challenge against the regulation, then i would not need to challenge and defeat the authorizing thing. i don't know what constitutional challenge i would have to the regulation other than the notion that it was arbitrary and capricious, and, yes, we did not make that claim. if it is unconstitutional, i can still authorize the statute. >> i don't know that a challenge to the regulation is enough to get you in if you are seeking a pre-district court.
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>> i never even made those claims. surely if the actual injury is fairly traceable, that is the standard here -- fairly traceable -- to the host, if you will, authorizing statute. chief justice roberts: this is actually an unanswered question. imagine the challenge to the sec, ok? improperly constituted, and the person is hurt because of the regulation agency is improperly being constituted. we did not have a problem reaching the constitutional issue, but does this three-judge court statute intend to take up that kind of constitutional issue, or is it that between
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what you are complaining about and the regulation that actually hurts you is pretty broad? i have a hard time thinking the answer is yes always again and a hard time thinking no, you never can, so any light you can shut on that to me would be appreciated. >> the light i want to shut on that is the -- this court's standard with respect to the traceability of the injury itself, and i just don't think there is any question that the injury is fairly traceable to the statute that gave birth, mr. chief justice, as you say, to the regulation itself. it did indeed visit the immediate injury on us, but, you know, it is like saying the murder committed by frank nady is not traceable to al capone, the man who ordered and paid for
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it. it is clearly traceable. our injury is clearly traceable. justice sotomayor: do you think this is in fact authorized by this statute? mr. cooper: i have not -- we did not have an apa challenge that it was in excess of statutory authority. we did not advance that argument , and as i sit here today, i cannot think of that argument, or at least i do not believe we did, but our claim from the beginning was that the 20-day regulation cannot survive and unconstitutional authorizing section 304. justice sotomayor: what makes
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the standing argument sort of weird and interesting is that the regulation actually does not seem to have all that much to do with the statute. in other words, the regulation imposes its own requirement that is separate and apart from what the statutory requirement is, and, usually, where we see something like that and say the regulation went beyond the bounds of the statute, that is its own legal problem. we start thinking about this because of the way the standing arguments were presented, but separate and apart from standing, it seems that there was its own legal problem that the 20-day requirement is there in the regulation when it is not mentioned or in some sense comprehended by the statute itself, and i'm wondering if we have a statutory question before we get to any constitutional question. mr. cooper: your honor, to whatever extent there are statutory objections to the
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20-day regulation, the parties did not join that issue. chief justice roberts: "to whatever extent?" you can see it jumps off the page. some administrator in an agency said, "i'm going to add a 20-day limit on these first amendment rights." you're the one telling us how important they are. why would you let an agency make these up on their own? the only problem is that would have been brought before a single judge district court. mr. cooper: that claim would, but count two that is the authorizing statute itself, is unconstitutional, so the regulation cannot survive it, would articulate a claim over which a three-judge court would have constitutional jurisdiction
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or statutory jurisdiction. chief justice roberts: mr. cooper, i -- we generally do not ask questions during rebuttal, so i'm going to ask a question now that is similar to the one you are asking. when he delivers his rebuttal and that is when the sec is considering if the 20-day limit is unlawful. -- justice alito: i mean, neither one of you -- i don't think either of you should be pressed to express a view on this issue, which is not the issue in the case. mr. stewart can respond to that as he chooses. mr. stewart: i would just say it is interesting issue. [laughter] >> mr. cooper, can i follow-up
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on justice kagan's questions earlier? you were discussing with her if it should be -- expenditure is a constitution, and you are pushing back, saying it is and expenditure, but in your brief, you also argued that even if the other level of closely drawn scrutiny applied that attaches to other than expenditures, you still prevail, and i just want you to tell us why you think that. mr. cooper: we believe any level of closely drawn scrutiny under constitution limits would doom this statute for the incongruities, if you will, that make it quite clear that the statute itself does not -- it does not advance the interest that congress may have in preventing quid pro quo corruption. rather, it advances the
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illegitimate interests of incumbent protection and equalizing and leveling the playing field, that those interests fit this section 304 like a glove, your honor. the quid pro quo claim, the quid pro quo corruption costume that the government knows it has to dress this statute in because it is the only interest that this court has accepted as sufficiently compelling to justify a drag on first amendment rights just does not fit. >> i have to say the opposite. i understand the equalization argument, and if i think about it, i can understand how an equalization interest would support this law, but the thing that to me jumps off the page is that when contributors find a
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way to put money not in the campaign but into a candidate's own personal pocket, when the question is contributors repaying indebtedness of the candidates so estimate the candidate himself financially better off, richard, that, to me, screams quid pro quo corruption interest, not equalization interest. >> even if you attribute that interest to this statute, it just does not do it in a rational way. it places no limit, your honor, on the pre-election contributions that a candidate may use to repay the candidate and those alleged gifts to the candidate -- makes no limit on that. it only makes a limit on $250,000 of post-election contributions, and, your honor, again, it only does that for the
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87th max out contributor. it makes no sense to say that the first 86 get to make that gift, your honor. those gifts apply no less to every other creditor of the campaign than they apply to the candidate himself. the idea that those gifts is not , i would submit, a serious point. and finally, those gifts are limited by the base contribution limits that this court in mccutchen made clear that congress made the judgment that they do not reflect or represent a cognizable risk of quid pro quo corruption. >> i finally got it. i finally got it.
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they jump in on second one because they know who to get because he has been elected. actually, the other people who are a little slower on the mark, they cannot even get a dime on this, and they are the ones, so that is your point there, and with that, i see the point, finally, and that is progress, but the -- it is an interesting argument, but i think it is probably true of any dollar amount that is greater than the individual amount, that problem will arise, and the question is there is something good about this that your client should love because it is bigger than 2900, and the reason is because there are interests on the others. that is how i got it thought in my mind. you could say i still do not understand it at all if you want to.
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mr. stewart: your honor, i hesitate to say you don't understand it. i just would say that our submission about the total mismatch, the incongruities, the lack of fit between the claim of quid pro quo corruption prevention and what the statute actually does to my submission reflects what is genuine purpose was. >> thank you. anything further? justice sotomayor: counsel, we know that after an election, your contribution as a contributor is not being used to promote a candidate because the candidate has already won. so it is now going to be an expenditure to promote your speech in electing the candidate. my normal reaction is -- why do
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you give after an election to a candidate who is not going to spend it on getting elected? he is going to spend it on something in the past, but certainly nothing with respect to the actual election and his getting his post. to me, that is a natural quid pro quo. i'm giving because i want to draw my attention to you. i guess i'm having a hard time understanding your counterargument that needs to be somehow proven. there were studies that the court below discounted -- i'm not sure what the complete ground of discounting it was not enough, basically, but, you know, they showed that voting patterns by senators seem to tie in to post-election contributions, and i think that
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is enough to support the sense of thinking that if money that i give is being used to pay the candidate, the candidate is going to pay more attention to me. what more do you need to prove that simple proposition? mr. cooper: your honor, congress has not limited postelection contributions. it allows postelection contributions both to be designated for the past election if the individual contributor has not maxed out already, and it allows postelection contributions to be designated for the upcoming election. congress obviously does not believe that in a post-election contribution, if it is designated for the last election or next election, either of
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which can be used to retire all jets, including candidate deaths from the previous election, so congress does not see those postelection contributions as being payoffs, quid pro quo. in terms of -- i think the question implies and the government has stated that there cannot be any judgment reason for a post-election contribution , but, your honor, i would beg to differ with that. first of all, as i just mentioned, congress has not in any way limited that, so congress certainly believes there is a legitimate reason for postelection contributions. even if they are just what the government has called makeup contributions, designed for no purpose other than to associate now -- exercise the first
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amendment right to associate with the winners and to hope that that will result in the kind of influence and access, that support for a candidate begets and that this court has in several different cases recognized, that congress cannot seek to deter, as opposed to seeking to deter and to prevent actual quid pro quo corruption, then those are reasons enough for a contributor to come after an election and make a contribution to the winner. it is just that the candidate has now become effectively an incumbent. justice sotomayor: you just said the magic words -- "to make a
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contribution to the winner." not to a campaign and its deaths, but for the pockets of the winner. that is a very different corrupting influence. mr. cooper: your honor, to the extent that the postelection contribution pays for pre-election speech, it is paying for speech. if i go to a restaurant tonight and pay for my meal with a credit card a month from now, i will have to repay the credit card company for that meal. that is what these postelection contributions that actually retire deaths pay for. if they are retiring the debt as a candidate or any other creditors, it is paying for speech that was uttered before and was financed through credit, the candidates and others, uttered before the election.
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chief justice roberts: justice kagan? justice gorsuch? justice kavanaugh? justice kavanaugh: one question -- you mentioned the statute is designed or has the effect of incumbency protection, and i just wanted you to connect the dots and spell out why you say that. >> your honor, the millionaires amendment, of which this was a part, and which this court struck down the other part obviously in the davis case, was enacted by congress with explicit references to the fact that well-financed challengers to incumbents represented a threat and that the then incumbents in congress wanted to make sure there was a level playing field.
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the ability of a candidate to loan without repayment limits such as section 304 places on the candidate, to loan money to his campaign to advocate his own election is a threat to incumbents, your honor, just as much as the ability to contribute or to make expenditures on behalf of the challenger's campaign. >> thank you, counsel. mr. cooper: thank you, justice. chief justice roberts: mr. stewart, rebuttal? mr. stewart: thank you, chief justice. let me respond to justice alito's question -- we are not prepared to concede that the fec
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regulation is invalid, but appellees did challenge that in this lawsuit. that is, at page 26 of the joint appendix, count four of the appellees' complaint alleged that the 20-day limit in the regulation was arbitrary, capricious, and not in accordance with the law, and count five asserted a different nonconstitutional challenge to the regulation. the three-judge district court exercised supplement to jurisdiction over the regulatory challenges but held them in abeyance while it adjudicated the constitutional challenge to the statute, and i think that was for two reasons. first, the district court was under the misimpression that the
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statute itself was the current legal barrier to full repayment. and, second, the three-judge court understandably viewed its mandate as being the resolution of challenges to the constitutionality of the statute. and then, having held that the statute was unconstitutional, it said we are dismissing the regulatory claims as moot. the application was if the statute had been held constitutional, then the court would have proceeded to the nonconstitutional challenges to the regulatory provisions, and so the way the case was litigated produced this weird inversion of the way that litigation is supposed to be handled. that is its bedrock that if you have with the nonconstitutional and constitutional claims before you, the court is supposed to resolve the nonconstitutional issues first and proceed to the constitutional issues only if it is necessary to do so. here, the district court did the reverse because of the -- the case was pleaded on the fact that it was a pre-court judge. the second thing i'd like to say is to follow up on something
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justice kagan said when she pointed out this is really not a limit on self financing for the ability to -- of a candidate to spend money on his own campaign. it is a limit on the candidate's ability essentially to pass the expenses of campaigning along to others, and the court has sometimes -- and the appellees' response is the existence of this limit will create a distant -- disincentive to the making of candidate loans and that in turn will result in less campaign speech, and the court has sometimes resolved very similar claims where a candidate, as opposed to a contributor, will challenge the contribution limits on the ground that they have an indirect effect on the campaign's ability to engage in speech. and the court has said, from the candidate's perspective, so long as the limits are not so low that they prevent the candidate from amassing funds sufficient for effective advocacy, then the candidate has no valid constitutional challenge. the contributor may still have a constitutional challenge because the -- the limits may impinge unduly on his own ability to
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affiliate himself with campaigns to assist in the electoral process. the limit here really does not have that effect. the contributor still donate as much as he wants up to the base limit, can do so at any point up until the election, can continue to do so after the election, subject to the proviso that the funds cannot be used for repayment of candidate loans. since a contributor ordinarily has no legal right to insist that his donations for years for a particular purpose, that's a very small intrusion on any liberty that might -- that he might have. the third thing i wanted to say is about the leveling of the playing field. the companion provision that was at issue in davis, there was a leveling purpose apparent on the face of the statute because the statute said, if one candidate spends a lot of his own money, than the other candidate will be able to raise more money himself, and so the rules that applied to one candidate were kind of contingent on what the other candidate did. that was leveling on its face, but there's nothing similar going on here. yes, it's true that the loan repayment limit applies to each
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candidate in the race, but the rules that apply to one candidate do not depend on what his opponent does. the other thing about the fact that the loan payment limit applies to losing candidates, i'd say three things. the first thing is what justice sotomayor said, that it does not have much practical impact on losing candidates because they can really raise sufficient postelection contributions to be over the limit. the second is that as we see in davis, ordinarily, the presumption is that the same rules will apply to all candidates in a race, and indeed, there can only be constitutional problems if -- even if they do not. third is at the court said in buckley, there are some circumstances where congress decides that the same rules should apply to each candidate, even though the interests underlying a particular rule may not be as directly implicated by minor party candidates, for instance, who are unlikely to win and therefore unlikely t
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