Davis sued the Federal Election Commission, claiming that the “Millionaires’ Amendment” of the Bipartisan Campaign Reform Act of 2002 (BCRA), 2 U.S.C. § 441a-1 (2002) violates the First Amendment by chilling the speech of self-financed candidates and the Equal Protection Clause of the Fifth Amendment by giving the opponents of self-financed candidates a competitive advantage. Davis was the 2006 Democratic Party candidate for New York’s 26th District seat in the United States House of Representatives. The Millionaire's Amendment relaxes the contribution limits for a candidate who faces a wealthy opponent who spends his own personal fortune towards his bid for office. It also permits a political party to spend more on behalf of the candidate facing a self-financed opponent. Once a self-financed candidate spends more than $350,000 of his personal funds on a campaign, his opponent can (1) receive contributions at three times the limit for each donor that would otherwise be in place; (2) receive contributions from individuals who have reached what would otherwise be their statutory limit for aggregate campaign donations; and (3) coordinate with his political party on additional party expenditures that would otherwise be limited.
A three-judge panel of the district court held that the Millionaire's Amendment violated neither the First Amendment nor Equal Protection. The First Amendment challenge failed because the Millionaires’ Amendment does not “burden the exercise of political speech.” It places no restrictions on a candidate’s ability to spend unlimited amounts of his personal wealth to communicate his message to voters, nor does it reduce the amount of money he is able to raise from contributors. The Equal Protection claim failed because Davis could not show that the statute burdened similarly situated candidates differently. By trying to reduce the disparity between wealthy and less wealthy candidates, Congress did not violate the Equal Protection clause.
Section 319 of the Bipartisan Campaign Reform Act of 2002 created the so-called “Millionaires’ Amendment.” The three-judge district court found that Congress enacted section 319 to achieve equity between congressional candidates utilizing personal funds for their campaigns and candidates relying mainly on contributed funds. Under the statute, when candidates for the United States House of Representatives exceed $350,000 in personal campaign expenditures their opponents may be entitled to receive: 1) contributions from donors at triple the statutory limit; 2) contributions from donors who have reached their statutory limit for aggregate campaign donations; and 3) coordinated expenditures from party committees in excess of the statutory limit. To effectuate application of section 319, the statute also imposes significant notification and disclosure obligations upon self-financed candidates. The questions presented are:
1. Whether the three-judge district court erred in finding that Congress’s attempt to equalize a potential imbalance in resources between congressional candidates violates neither the First Amendment to the United States Constitution nor the Equal Protection Clause of the Fifth Amendment.
2. If equalizing a potential imbalance in resources of congressional candidates is constitutional, whether the federal statutory provision accomplishes the stated purpose.