Liu et al v. the New York City Campaign Finance Board et al

REPLY MEMORANDUM OF LAW in Support re: 53 MOTION for Judgment on the Pleadings . . Document

S.D.N.Y.November 24, 2015

14 Civ. 1687 RJS) UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK JOHN LIU, et al., Plaintiffs vs. THE NEW YORK CITY CAMPAIGN FINANCE BOARD, et al., Defendants. DEFENDANTS' REPLY MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION FOR JUDGMENT ON THE PLEADINGS ZACHARY W, CARTER Corporation Counsel of the City of New York Att orney for D efendants 100 Church Street New York, N.Y. 10007 Of Counsel: Thomas B. Roberts Tel: (212) 356-0872 Matter No. : 20 I 4-009885 Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 1 of 13 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ..... PRELIMINARY STATEMENT ARGUMENT POINT I POINT II CONCLUSION........ PLAINTIFFS' FACIAL CHALLENGE TO THE TNTRODUCTTON TO RULE 5-01(F) IS MOOT PLAINTIFFS LACK STANDING TO CHALLENGE RULE 5-01(F) AS AMENDED......... ll I 1 I 9 Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 2 of 13 TABLE OF AUTHORITIES Cases American Freedom Defense Initiative v. Metropolitan Transportation Authority, 2015 V/.L. 3797651 (S.D.N.Y. June 19,2015) AmeriCredít Fin, Servs. v. Tompkins, 604 F.3d 7s3 (2d Cir. 2010). Atkins v. New York City, 143 F.3d 100 (2d Cit. 1998). City oJLakewoodv. Plain Dealer Publishing Co., 486 U.S. 7s0 (1988) College Standard Magazine v. Student Association of the State University of New York at Albany, 610 F.3d 33 (2d Cir. 2010).. County of Los Angeles v. Davis, 440 U.S. 62s (t979) Diesel v. Town of Lewisboro, 232F.3d92 (2d Cir. 2000). Field Day LLC v. County of Suffolk, 463 F.3d 167 (2d Cir. 2006)......, Forsyth County v. Nationalist Movement, sOs u.s. 123 (1992) Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., s28 U.S. 167 (2000) Granite State Outdoor Advertising, Inc. v. Town of Orange, 303 F.3d 4s0 (2d Cir.2002). Harrison & Buruowes Bridge Constructors, Inc. v. Cuomo, 981 F.2d 50 (2dCir.1992). Lamar v. Town of Orchard Park, 3s6 F.3d 36s (2d Cir.2004)...... Liu tt. Nev, York City Campaign Finance Board, 14 cv 1687 (March 31,2015 S.D.N.Y.) dkt # 37 Paqes 3,7 .,,,,,,,.,,7 5 ,2 6 .2 t-2 7 I 6 .3,7 J 2,3, 6,7 , I Utqh Animal Rights Coalition v. Salt Lake City Corp., 371 F.3d 1248 (1Oth Cir.2004) -ll- .5,7 Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 3 of 13 Cases Ward v. Rock Against Racism, 491 U.S.781 (1989) Resulations CFB Rule 5-01 CFB Rule 5-01(Ð CFB Rule s-01(Ð(2) . CFB Rule s-01(Ð(11) Pases 6 t,3,4,5, 8, 9 .............,......5 .4, 5, 6, I 8 -lll- Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 4 of 13 PRELIMINARY STATEMENT Defendants' motion seeks to end plaintiffs' facial challenge to a six word catch-all phrase in the introduction to New York City Campaign Finance Board's ("CFB" or "Board") Rule 5-01(f). CFB never applied the challenged phrase to plaintiffs; apparently has never used the catch-all to deny matching funds to any campaign; and has repealed the challenged phrase. Accordingly, the Court cannot enjoin the implementation of the catch-all, and a declaration that the catch-all was unconstitutional would be an advisory opinion, Moreovet, no damages can be awarded to the plaintiffs, nominal or otherwise, because the Board's decision that plaintiffs challenge - the determination that plaintiffs were ineligible to receive matching funds - has been upheld on other grounds. In addition, it is purely speculative whether plaintiff John Liu will ever run for municipal office in the future. Thus, no injury can be redressed by opining upon the legality of the repealed catch-all, and declaring the catch-all to have been unconstitutional can have no impact upon the rights or obligations of the parties going forward. This phase of the litigation presents a purely academic question. Even under the relaxed standards applicable to First Amendment facial challenges, plaintiffs' challenge to the repealed catch-all fails to present a justiciable question, and the claim must be dismissed. ARGUMENT POINT I PLAINTIFFS' FACIAL CHALLENGE TO THE TNTRODUCTION TO RULE s-01(0 IS MOOT CFB has repealed the challenged language in the introduction to Rule 5-01(f): the phrase "include, but are not limited to." Due to this repeal, the Court cannot grant effective relief concerning the catch-all phrase; plaintiffs' challenge to the superseded language is moot; and the Court should exercise its discretion to dismiss the complaint. County of Los Angeles v. Davis, Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 5 of 13 440 U.S. 625,631,99 S. Ct. 1379 (1979) (o'a case is moot when the issues presented ¿tre no longer'live' or the parties lack a legally cognizable interest in the outcome"); AmeriCredit l;'in. Servs.t,.Tompkins,604 F.3d753,755(2dCir,2010)(same); Lømarv.Townrf'OrchardPark, 356 F.3d 365,375-79 (2d Cir,20AÐ (facial First Amendrnent challenge nrooted by amendrrcnt to ordinance). Plaintiffs seek to escape this conclusion by assefting that the []oard has fail.ed to denronstrate that its allegedly illegal conduct will not recur, citing Friencls rtf the Ectrth, Inc. v. I"aidlaw, llnvtl. S'ervs. (|OC), \nc.,528 U.S. 167,189 (2000). See al,so, Latnar v. T'on'n q/' OrchayrJ Park,356 F.3d 365,375 ("The voluntary cessation of allegedly illegal conduct usually will render a case moot 'if the defendant can demonstrate that (1) there is no reasonable expectation that the alleged violaticln will reour and (2) interim relief or events have completely ancl irrevocably eradicatecl the effects of the allegecl violation."' (citations omittecl)). Plaintiffs' contention that the CFB will apply the catch-all in the future murst be rejected f'or several reasons. F'irst, CFÍ] has never engaged in "allegeclly illegal conduct" in reliance upon the challengecl catch-all. CFB had no practice of'lìnding campaigns ineligible ftrr matching furrds based upon the catch-all phrase. Research has not located, and plaintiffs have failed to iclentify. any prior determination of the CFB --including plaintills'- in which tlie Board has relied upôn the catch- all as a basis for a finding of ineligibility. Unlike the situationin Friends of the liarth and its progeny. where the defèndant had been actively pursuing an allegedly illegal course of conduct ancl had business reasons to reestablish its challenged conduct in the future, here CF'll has never relied upon or invoked the catch-all. The CFB certainly has no reason to adopt a course of future conduct that it never had occasion to implenrent in the past. a Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 6 of 13 Second, the CFB has gone through the lull process of f'ormally amending the rulle to repeal the challenged language, and there is no reasonable expectation that the allcgecl violation will recur.l As the language in question is contained in a rule rather than a statute, it was appropriate for its language to be changed through regulatory (rather than legislative) procedures,2 and formal regr-rlatory changes are entitled to defèrence whetr detennining whether voluntary cessation nroots a case. See GroniÍe Stale Outdoor Advertising, htc. v. I'ow'n ol Orønge,303 F.3d 450, 451-52 (2d C,ir. 2002) (amendment of regulation mooted challenge to regulations concerning signs); Americqn Freedom De.fense Initiattve v. lvfetropolitan TranspnrtcttionAuthority.2015 W.L. 3797651, (S.D.N.Y. June 19,2015) (same). The CFB is entitlecl to equal deference when it represents - as it does here and now * that CIìB will not rely in the fulture upon the repealed catch-all phrase when making determinations concerning ineligibility for rnatching funds and that CFl] has no plans lo change the regulation back to reestablish the catch-all. The Court shoulcl l'ollow the guidance in Lamar v. Town of Orchctrcl I>at"k,356 F'.3d at 377, where the Cjrcuit observed that "we are hesitant to hold that a signifìcant amendment or repeal of a challenged provision that obviates the plaintifl's claims does not moot a litigation, absent evidence that the defendant intends to reinstate the challenged statute after the I PlaintifTs strangely complain that the CFB approved the amendments to Rule 5-01(l) at a meeting that was not of long duration. As there was no opposition to the acioption of the proposed amendments at the CIrl]'s meeting, which was held after proper notice and publication to the public, the CFI] adopted the amendments without extensive discussion. FIad plaintiffs' opposed the proposed rule at the meeting, the CFB would have heard arrd considered plaintiffs' opposition. Hearing no opposition. the CFB acted. 2 Plaintiffs' contention at p. 10 of their memorandum that Lamar limits deference to legislative action is wrong. In Lamar, then Judge Sotomayor quoted Hqrrison & Burrowes Bridge Constructors, Inc. v. Cuomo,981 F.2d 50,59 (2d Cir. 1992) forthe propositionthat deference must be given to governmental representations that conduct has been discontinued. In Harrison & Burrowes that representation came in the form of the State's adoption of an emergency regulation. 981 F.2d at 58-59. -3- Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 7 of 13 litigation is disrnissed. or that the municipality itsell'does not believe that the amenclment renders the case moot." '.I*here is no evidence that CF'll intends to reinstate the catch-all or that CIìB does not believe that the repeal of the catch-all renders the case moot. As CFB never relied upon the catch-all in the past, its representation that it will not rely upon or reenact the catch-all in the furture certainly warrants credence. 'llhird, Clrll has signifìcantly changed the regulation. "l'he CF'l] has repealed the entire portion ol'the introduction to Rule 5-01(Ð that was challenged. Moreover, the CFB has rcplaced the challenged catch-all with language that narrowly confìnes the CFII's discretion to find a campaign ineligible ftrr a reason not enumerated in the other subsections of Rule 5-01(Ð. Previously, in the motion to dismiss, defendants essentially argued that the doctrine of ejusdem generis sufliciently cabined the CFB's discretion under tlie catch-all phrase to survive constitutional attack. 'fhe new Rule 5-01(fxl l), howevero contains its own limitations, and the CFB need not rely upon eju,sdem generis to establish that CFB's discretion is now prr:perly cabined. Under the newly adopted Rule 5-01(Ð(11), an unenumeratcd basis for ineligibility is not even arguably left to the CFB's unfettered discretion but instead tnust constitute egregious conduct cletrimental to the CF'[]'s Program that violates another applicable law. ll'his covers seriouls violations of city, state or federal campaign and election laws that are detrimental to the CIrl]'s Program, suclr as accepting illegal campaign contribtrtions from foreigners. Campaigns need not worry that they will be found ineligible for matching funds because ol'double palking (a violation that is neither egregious, detrimental to the CFB's Program, nor a violation of another applicable law). But the CFB could find a campaign ineligible if the candidate engaged -4- Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 8 of 13 in egregious conduct that occurred during a pending campaign,s that was detrimental to the Program, and that violates an applicable criminal or civil law, 'l'his hardly constitutes a grant of unbridled discretion. To use plaintiff's' hypothetical, nrurdering the chairperson of the CFB is an egregious breach of law that is likely to be detrimental to the operation of CIïB's Program, and the CFB would theref'ore be justilìed in declaring the campaign ineligible fbr matohing funcls, 'l'he commission of crimes and violations directed against the C[i[]'s Program is a lirnited sphere ark.356 F.3d al 375. 'l'his test would be retldered meaningless if nominal damages sufliced to make an otherwise moot f¿cial challenge justiciable, Moreover, on this recorcl, plaintiffs cannot be awarded nominal damages. Plaintiffs' only alleged injury is that they were ftrund ineligible lbr matching lunds. But the Court has already determined that CIìB was justificd jn finding plaintiffs ineligible. I.'iu v, New York City Curnpaign Finance Bocu'cl, l4 cv 1687 (March 31,2015 S.D.N,Y.) Slip Op. at 10, dkt # 37. 'l'hus, plaintiffs cannot tie their injury to a violation of their legal rights. In facial challenges, plaintiffs are permitted to assert constitutional challenges without applying f'or or being denied a benefît becanse courts presume injury. At:kins v. New York City, 143 [ì.3d 100,103 (2d Cir. l99S). But where the court has determined that the plaintiffs' legal rights have not been violated, even nofirinal darnages should not be awarded. See C:ollege Stcmdard Magazine v. Stt¿dent Association rf'the State Universily r¿/'New York at Alhany,6l0 F,3d at 35 -7 - Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 11 of 13 (because the as-applied challenge had been concedecl to be meritless, no damages could be awarded); and Diesel v. 'l'ou,n o.l" l.ewi,sboro, 232 ll .3d 92, 108 (2cl Cir. 2000) ("where (as here) the clefèndants have met their burden under h{ount Ilealthy of proving that the adverse action would have occuned in the absence of the protected conduct. there is no liability. ... Absent liability, clamages -- nominal, compensatory or punitive - at'e unavailable.") (citations omitted). Stated another way, plaintiffs are precluded frorn claiming that they cotrld have been harmed by the wronglul application ol'the catch-all phrase because this Court has previoltsly held that the denial of matching funds was fullyìustified. Fecleral courts are not academio debating societies whose mission is to determine whether rescincled regulations were constitutional. Nothing is gained or lost by resolving the issue plaintiffs press upon the Court, arrd the Court shoulcJ exercise its discretion to dismiss the rcmaining contention on the basis of mootness.4 POINT II PLAINTIFFS LACK STANDING TO CHALLEN E RULE 5.01Ifl AS Plaintiffs have not amended the complaint and therefore have not properly raised theissueofthelegalityofthenewRule5-01(Ð(11). SeeLamarv.TtnunrtfOrchcrrtlPctrk,356 F'.3d at 378 ("As Lamar never made a motion to amend its complaint to the clistrict court, nonç of its claims pertaining to the amendments are properly before us.") Howevet, even if plaintiff's attempted to amend the cornplaint, such a motion must be denied because plaintiffs lack standing 4 Plaintiffs' contention that CFB's current audit of plaintiffs' mayoral campaign makes the challenge to the catch-all justiciable (plaintiffs' memo, p. 16, dkt #56) is meritless. CFB did not rely upon the catch-all phrase in finding plaintiffs ineligible for public funds, and the issue of eligibility is irrelevant to the assessment of penalties for violations of CFB rules, which CFB generally determines during audits after the election. The penalty provisions do not incorporate or refer to Rule 5-01, which is only applicable to the eligibility determination. Thus, CFB cannot apply the catch-all to assess penalties against plaintiffs as part of the audit process. -8- Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 12 of 13 to challenge Rule 5-01(Ð in its amended form. Plaintifß make no allegation in the complaint that Mr. Liu plans to run for municipal office in the future, noting only that such a run is a possibility. (Complaint'1T I 33) It is therefore completely speculative whether Mr. Liu would ever be subject to the CFB's amended Rule 5-01(f1, and plaintiffs lack standing to challenge the revised Rule 5-01(f). CON IISION For the foregoing reasons and the reasons set forth in defendants' initial memorandum in support of this motion, the Court should grant the defendants judgment on the pleadings, and dismiss the complaint in its entirety. Dated: New York, New York November 24,2015 ZACHARY W. CARTER Corporation Counsel of the City of New York Attorney þr Defendants 100 Church Street, Room 2-Il0 New York, New York 10007 Phone: 212 356 0872 By &'^ Thomas B. Roberts Assistant Corporation Counsel -9 - Case 1:14-cv-01687-RJS Document 57 Filed 11/24/15 Page 13 of 13