In a 5-to-4 ruling, the high court said Congress cannot use federal election laws to disadvantage candidates who choose to use their own money to run for a seat in Congress.
The idea behind the law was to prevent a wealthy candidate from using massive personal spending in a campaign to drown out the voices of other candidates. It was also intended to counter the impression that seats in Congress can be purchased.
"The unprecedented step of imposing different contribution and coordinated party expenditure limits on candidates vying for the same seat is antithetical to the First Amendment," Justice Samuel Alito wrote in the majority opinion.
"The Constitution ... confers upon voters, not Congress, the power to choose the members of the House of Representatives," Justice Alito wrote. "It is a dangerous business for Congress to use the election laws to influence the voters' choices."
The ruling in Davis v. Federal Election Commission (07-320) marks the second time in as many years that the high court has invalidated a portion of the McCain-Feingold Bipartisan Campaign Reform Act (BCRA).
The measure at issue, Section 319 of BCRA, was aimed at leveling the playing field between candidates with access to personal wealth and those relying on campaign contributions from others.
Section 319 requires congressional candidates who are self-financing their campaigns to abide by stringent finance reporting requirements that don't apply to other candidates. In addition, once a candidate's personal spending in a House race crosses a $350,000 threshold, contribution limits are relaxed for all other candidates in the same race.
The other candidates may accept three times the usual $2,300 limit from individual contributors and receive unlimited coordinated expenditures from political parties. The self-financed candidate, meanwhile, must continue to abide by the lower contribution limits.
"We have never upheld the constitutionality of a law that imposes different contribution limits for candidates who are competing against each other," Alito wrote. "This scheme impermissibly burdens [a self-financed candidate's] First Amendment right to spend his own money for campaign speech."
In a dissent, Justice John Paul Stevens said the millionaire's amendment does not impose any burden on a self-funded candidate's freedom to speak, it merely helps others to speak. "The Millionaire's Amendment represents a modest, sensible, and plainly constitutional attempt by Congress to minimize the advantages enjoyed by wealthy candidates," Justice Stevens wrote.
The decision stems from a lawsuit filed by Jack Davis, a wealthy upstate New York businessman who twice ran unsuccessful campaigns to represent New York's 26th congressional district. Mr. Davis, a Democrat, has announced he is running again for the same seat in 2008.
In all three of his campaigns, Davis pledged to pay his own campaign bills rather than seek support from special-interest groups. In 2004, he spent $1.26 million of his own money. In 2006, he lost the election by four percentage points after spending $2.27 million.
In contrast, Davis's opponent in 2006, Rep. Thomas Reynolds, a four-term Republican, spent $5.1 million. That total included a $1.15 million war chest that existed at the start of the 2006 campaign cycle. In addition, Mr. Reynolds was chairman of the National Republican Congressional Committee (NRCC), the party's campaign organization.
Despite these advantages, incumbent Reynolds is the one who qualified under the millionaire's amendment for campaign-finance-law exemptions that could have yielded him an additional $1.46 million in multiple contributions. In addition, he could have received support from the NRCC.
Reynolds did not exercise his right to accept the extra funds because he didn't need to. He had plenty of donors willing to help him win reelection.
In striking down the law, the majority justices said the campaign-finance laws are designed to eliminate corruption or the appearance of corruption in the political system by limiting the role of money. But Section 319 seems to jettison this goal, they said, by increasing contribution limits for candidates who accept outside donations.
In his dissent, Stevens said combating corruption or the appearance of corruption isn't the only government interest at stake in the nation's campaign-finance laws. He said the government also has an interest in reducing the influence of wealth on election victories and the appearance that wealth alone dictates those results.
"The Millionaire's Amendment quiets no speech at all," Stevens wrote. "On the contrary, it does no more than assist the opponent of a self-funding candidate in his attempts to make his voice heard."
Stevens added, "This amplification in no way mutes the voice of the millionaire, who remains able to speak as loud and as long as he likes in support of his campaign."
Alito said it is not for Congress to try to stage-manage the way a campaign takes place. "Different candidates have different strengths. Some are wealthy; others have wealthy supporters who are willing to make large contributions," he wrote. "Some are celebrities; some have the benefit of a well-known family name."
"Leveling electoral opportunities means making and implementing judgments about which strengths should be permitted to contribute to the outcome of an election," Alito wrote.
Alito's majority decision was joined by Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, and Clarence Thomas. In addition to Stevens, Justices David Souter, Ruth Bader Ginsburg, and Stephen Breyer dissented.