sr-091278-11eCA RLK:SS:ms
CITY ATTORNEY OPINION
Opinion No. 78- 185 September 7, 1978
SUBJECT: Constitutionality of Section 11209 of the
Santa Monica Municipal Code Pertaining to
Limitations on Campaign Contributions to
Municipal Ballot Measure Elections
REQUEST BY: City Council
OPINIOTd BY: Richard L. Knickerbocker, City Attorney
Stephen S. Stark, Assistant City Attorney
UESTION PRESENTED
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Does the disparity within Section 11209 of the Santa
Monica Municipal Code, whereby a natural person ,may contribute
One T3undred ($100.00) Dollars, adjusted for .changes in cost
of living, to a political campaign other than his own, but a
corporation or other business entity may contribute four (4)
cents multiplied by the voting age population of Santa Monica
to ballot measure elections, violate the state and federal
constitutional guarantee of equal protection of the laws?
CONCLUSION
Yes. The discrimination between business entities and
natural persons in this respect is without rational basis and is
accordingly violative of the State and Federal Constitutions.
The Council is advised to draft a new ordinance that imposes
uniform contribution limitations upon individuals and
corporations.
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ANALYSIS
Section 22808 of the California Election Code
expressly authorizes a municipality to limit campaign expend-
itures or contributions in local elections. Pursuant to
this"`"statute, the Santa Monica City Council enacted Section
11209 of the Santa Monica Municipal Code, which provides as
follows:
"(a) No person other than a candidate
when contributing to his own campaign
shall make, and no campaign treasurer
shall solicit or accept any contribution
which will cause the total amount contrib-
uted by ,such person with respect to each.
election item, to exceed One Hundred ($100)
Dollars.
(b) The limits stated in (a) are to be
adjusted in all years after 1974 for changes
in cost of living.
(c) Except as provided in G11210, no con-
tribution shall be permitted except when
the legal name of the person or organization
who offers the contribution is disclosed,
Contributions under assumed names or con-
tributions offered by individuals who are
acting as conduits or agents for other
individuals or interests are prohibited.
(d) Expenditures may be made by a prop-
rietorship, firm, partnership, joint venture,
syndicate, business trust, company,. corpor-
ation, association, or labor union in relation
to candidates and measures without limitation.
(e) No contribution may be given by any
entity enumerated in subsection (d) hereof of
a candidate or any committee supporting said
condidate.
(f) In the case of a vote on a measure, those
entities enumerated in subsection (d) hereof may
contribute not more than ($.04) cents multi-
plied by the voting age population."
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In the municipal elections held in June, 1978,
pursuant to Section 11209, corporations and other business.
entities were permitted to contribute $2,963. to campaigns
for and against ballot measures; natural persons were per-
mitted to contribute $126,
Under the equal protection clause of the Fourteenth
Amendment to the United States Constitution, a classification
that arbitrarily favors a corporation as against an individual
is invalid. The United States Supreme Court, in the case of
Frost v. Corporation Commission, 278 U.S. 515 (1928), held that
a valid distinction between a corporation and an individual:
"Must rest upon some ground of difference
having a fair and substantial relation to
the object of the legislation, so that
all persons similarly circumstanced shall
be treated alike that is to say
mere difference is not enough; the attempt-
ed classification 'must always rest upon
some difference which bears a reasonable
and just relation to the act in respect to
which the classification is proposed and
can never be made arbitrarily without any
such basis'."
This principle is bindinq upon the states and has
been adhered to by the California Supreme Court in numerous
cases involving classifications that distinguish between
corporations and individuals. The formulation is a refine-
ment of the doctrine that a legislative classification will
be upheld if it bears a rational relationship to a legitimate
state purpose, unless the. classification is suspect. or infringes
upon fundamental interests. McDonald y. Board of Elections,
394 U.S. 802 (1969); McGowan v, Maryland, 366 U.S. 420 (1.961);
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Estate of Horman, 5 Cal.3d 62, 95 Ca1,Rptr. 433, 485 P,2d
785 (1971).
The purposes of the Santa Monica Fair Elections
Practices Ordinance are set forth in Section 11201 which
provides in pertinent part:
"It is the intent of the City Council of
the City of Santa Monica in enacting this
ordinance to place realistic and enforce-
able limits on contributions to political
campaigns in municipal elections as well
as limit the amount which a candidate can
expend on a campaign to be elected to a
municipal office, The purpose for which
this ordinance is being enacted is to pre-
vent the exercise by campaign contributions
of potential undue or improper influence
over elected officials and to ensure against
a candidate being elected or a measure being
passed primarily on the amount expended on
a campaign."
There is no apparent reasonable or just relationship
between the attainment of the goals stated in Section 11201
and the. twenty-three to one disparity between business entities
and natural persons permitted by Section 11209. Accordingly,
it is opinion of this office that, in the case of contributions
to ballot measure campaigns, the ordinance does not afford
natural persons and business entities equal protection of the
laws,
Since we have concluded that Section 11209 lacks a
rational basis, it is unnecessary to determine if the ordinance
infringes upon an essential aspect of the. fundamental right of
free expression and therefore must be subjected to strict
scrutiny. See Gould v, Grubb, 14 Cal,3d 661, 122 Ca1,Rptr.
377, 535 P,2d 1337 {1975); Weber v. City Council of Thousand
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Oaks, 9 Ca1.3d 950, 109 Ca1.Rptr, 553, 513 P.2d 601 (1973).
Nor do we consider the complex question whether Section 11209
of the Santa Monica Municipal Code or Section 22808 of the
California Election Code violate state and federal constitutional
provisions protecting freedom of speech and other rights of
free expression. See Buckley v. VaTeo, 424 U.S. 1 (1976);
Pacific Gas and Electric Company v.
App.3d 123, 131 Cal,Rptr. 350 (1976); Citizens For Jobs :rind
Energy v, Fair Political Practices Commission, 16 Ca1,3d 671.,
129 Cal,Rptr, 106, 547 P.2 386 (1976). Thi matter should be
resolved in the context of a particular ballot measure affecting
a particular person or entity.
SUMMARY
It is suggested that the matter be referred to the
Fair Election Practices Commission of the City of Santa Pionica
for consideration at their next regularly scheduled meeting,
Respectfully submitted,
RICHARD L. KNICKERBOCKER
City Attorney
STEPHEN S, STARK
Assistant City Attorney
APPROVED BY:
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'RICHARD L, KNICKERBOCKER ~"`
City Attorney
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