California’s biggest special interests lose lawsuit to stop new California law that would bar pay-to-play in local governments 

SACRAMENTO – Sacramento Superior Court ruled Thursday that SB 1439, bipartisan anti-corruption legislation supported by California Common Cause in the 2022 legislative session, is constitutional and denied a lawsuit brought by California’s biggest special interests on all claims.

SB 1439 extends anti-pay-to-play limits on contributions that have applied for decades to state officials and local appointed officials to local elected officials, helping end the continuous cycle of scandals caused by special interests’ massive campaign contributions to the local officials who they have business before.

“To strike down SB 1439 would be to strike down the will of the people,” said Jonathan Mehta Stein, Executive Director of California Common Cause. “This law protects Californians from the pay-to-play corruption and the appearance of corruption that plagues our cities and counties, and helps to restore faith in our leaders and our government.” 

Eight of California’s biggest special interest industry groups—including the California Building Industry Association, California Restaurant Association, California Retailers Association, California Business Roundtable, and others—and two local politicians filed the lawsuit to stop SB 1439 so they could continue to engage in pay-to-play politics. Ironically, this action exposed the magnitude of the problem SB 1439 aims to address and showed Californians exactly who is attempting to buy access and influence in their local governments.

Specifically, these special interest groups sought to halt SB 1439, which passed the State Legislature with zero “no” votes in 2022, by claiming it violates the purposes of California’s Political Reform Act and that it violates the First Amendment political speech rights of those attempting to curry favor with local politicians. The Superior Court emphatically rejected both arguments. 

“The court’s ruling rejected all claims by these special interest groups who fought to maintain their pay-to-play schemes,” said Senator Steve Glazer, author of SB 1439. “It is a strike against the power of wealthy financial interests who are corrupting governmental decisions. Public trust is greatly enhanced when decision-makers maintain their independence from these corrupting influences.” 

The United States Supreme Court has recognized that preventing quid pro quo corruption or its appearance is a compelling state interest that can justify limitations on campaign contributions, which the Court considers to be a form of constitutionally protected political speech. SB 1439 seeks to address corruption by eliminating a loophole for local elected officials that previously existed in the law. Because the bill applies to only limited persons and parties who have a direct financial interest in specific local government proceedings, and only applies when those proceedings are active and for a short period before and after, the law is narrowly drawn to apply only when the possibility of corruption is greatest. 

Additionally, in the limited time period in which the bill applies to special interest entities seeking to curry favor with local politicians, it does not prohibit campaign contributions entirely; it merely limits them to a $250 cap, already well-established in the Political Reform Act. The law also provides remedies for violation of the contribution limits.

“Our local representatives should be serving the public interest, not special interests,” said Sean McMorris, California Common Cause’s Transparency, Ethics, and Accountability Program Manager. “SB 1439 is a common sense and long overdue pro-democracy reform that already exists in other states and in a long list of California cities. We are grateful the court honored this important law that will serve to strengthen our local democracies.”

This ruling is a win for democracy. Even if the special interest plaintiffs exercise their right to appeal the Superior Court’s accurate and thorough decision on SB 1439, we are confident the law will be upheld at the appellate court level. 

Examples of local government scandals that SB 1439 is meant to address can be found here. 

California Common Cause was the main supporter of SB 1439. The case, Family Business Ass’n v. FPPC, Case No. 34-2023-00335169-CU-MC-GDS, was filed in Sacramento Superior Court.