House Bill 694 Invalidated



OHIO CAMPAIGN FINANCE AND POLITICAL CONTRIBUTIONS

LAW INVALIDATED

By

Henry A. Arnett

Livorno and Arnett Co., LPA

1335 Dublin Road, Suite 108-B

Columbus, Ohio 43215

Telephone: 614-224-7771

INTRODUCTION

Campaign finance has had quite a tortuous journey since the General Assembly passed House Bill 694, after the November, 2006, elections but before Governor Taft left office. The law was unbelievably complicated, but it appears, at least at the present time, that the provisions of the law are invalid and no longer in effect. The Franklin County Court of Appeals, on April 14, 2009, issued its opinion that the law is invalid.

PROVISIONS OF THE LAW

Among many other things, the law (Revised Code §3715.13) prohibits contributions of more than $1,000 or $2,000 (depending on which section is applied) over a one or two year period (again depending on which section is applied) by any union or its PAC to any elected official or candidate for elected office (and their committees) if that official has or will have responsibility for awarding a contract (i.e., a collective bargaining agreement) with the union. This would presumably include mayors, council members, township trustees, district trustees, etc., and candidates for those offices.

The new law raised all kinds of questions. As examples, the law states that a labor organization is considered an “unincorporated business” for purposes of the law. The amount of allowable contributions that can be made by an unincorporated business includes all contributions made not only by the unincorporated business or its PAC, but also any contributions made by partners and owners of the unincorporated business and the spouses and children (ages seven through seventeen) of those partners and owners. Who are the “partners and owners” of a labor organization? Are union members the “owners”? The law also states that the unincorporated business must certify that everyone, including the partners and owners of the unincorporated business and the spouses and children (ages seven through seventeen) of those partners and owners, are in compliance with the law when entering into a contract. If members are owners, how can the union possibly know whether contributions have been made and certify that everyone is in compliance?

LITIGATION IN FRANKLIN COUNTY COMMON PLEAS COURT

Litigation over the validity of the legislation was filed and assigned to Judge John F. Bender of the Franklin County Court of Common Pleas. That Court initially entered an Order protecting all collective bargaining agreements that expire, come up for renewal, or are entered into for the first time between April 4, 2007, and September 30, 2007 (April 4 is the effective date of the amendments established by HB 694). This Order accomplished several things for the affected agreements. First, those agreements were not subject to the amendments made by HB 694. Second, any affected agreement entered into between April 4, 2007, and September 30, 2007, could not be challenged based on an alleged violation of HB 694. Third, the certification requirements established by HB 694 were unenforceable and could not affect any agreements that came up during the time between April 4, 2007, and September 30, 2007.

Then, in June, 2007, Judge Bender ruled that the law, insofar as it was to be applied retroactively, was unconstitutional. In other words, the prohibitions, certification requirements, and other provisions of HB 694 could not be applied to campaign contributions that were made before HB 694 became effective and which were legal at the time. This ruling, however, did not address the other issues surrounding the constitutionality of HB 694 (e.g., could the law be enforced as to contributions made after April 4, 2007).

On December 5, 2007, the Court sought to address those other issues. It issued another decision, stating that HB 694 had not been properly passed or enacted and holding that the provisions of HB 694 “are void and declared of no force and effect.” Clear enough, but unfortunately, this did not settle the issue. After this opinion, but before the filing of a final order, the Attorney General’s Office filed a motion to dismiss the case, arguing that the General Assembly had reenacted the provisions of HB 694 when it passed an appropriations or budget bill (Am. Sub. H.B. 119) on June 30, 2007, thereby rendering the case moot.

On June 18, 2008, Judge Bender addressed the validity of the State’s attempt to reenact the campaign finance provisions. He ruled that the attempt was illegal; placing campaign finance provisions in a budget bill violated the command of the Ohio Constitution that a legislative bill could only address one subject. Because campaign finance and the state budget were unrelated, the campaign finance provisions were struck down.

LITIGATION IN FRANKLIN COUNTY COURT OF APPEALS

The State appealed to the Court of Appeals. On April 14, 2009, the Court of Appeals issued its decision (United Auto Workers, Local Union 1112, v. Brunner, 2009-Ohio-1750). The Court affirmed the Common Pleas Court, holding that the general Assembly did not follow the required procedure when it originally attempted to enact Revised Code §3715.13 through HB 694 and when it attempted to reenact that law through the budget bill (Am. Sub. H.B. 119). Where does that leave us? Right now we have a ruling that the changes made by HB 694 and HB 119 (e.g., limits on contributions, prohibitions on awarding contracts, requirement of certifications for contracts, etc.) are no longer of any force or effect. However, the State still has time to file an appeal to the Ohio Supreme Court.