Ed HARWIN, Plaintiff-Appellee, v. GOLETA WATER DISTRICT, Defendant-Appellant, 953 F.2d 488

WILLIAM A. NORRIS, Circuit Judge: We consider whether the Goleta Water District may, consistent with the First Amendment, disqualify a board member from considering a water service application if she has received a $250 campaign contribution from the applicant, but not if she has received a $250 campaign contribution from an opponent of the application. I In 1973, faced with an emergency water shortage, the Water District imposed a moratorium on new water connections. To be exempted from this moratorium, property owners must seek a waiver from the Water District’s Board of Directors.

In 1988, seeking to avoid corruption and the appearance of corruption in the water service application process, the Water District and its resident voters implemented an ordinance that prevented any member of the Water District’s Board of Directors from considering the water service application of any person who contributed $250 or more to that member’s election campaign. The ordinance does not require the disqualification of a board member who has received a contribution of $250 or more from a person opposing a particular application for water service.

Ed Harwin, a real estate developer, brought this civil rights action against the Water District and its Board of Directors, contending that the ordinance violated his First Amendment, substantive due process, and equal protection rights. The district court entered

summary judgment for Har-win on the ground that the ordinance violated the First Amendment. We review a

summary judgment de novo. Lew v. Kona Hospital, 754 F.2d 1420, 1423 (9th Cir.1985). Under Fed. R.Civ.P. 56(c), we must decide whether the record, read in the light most favorable to the non-moving party, establishes that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. II It is undisputed that the Water District’s campaign contribution limitation burdens the First Amendment rights of contributors. See Buckley v.

Valeo, 424 U.S. 1, 22, 25, 96 S.Ct. 612, 636, 637, 46 L.Ed.2d 659 (1976) (campaign contribution limits burden contributors’ freedom of political association). Furthermore, the ordinance, by its own terms, burdens only the First Amendment rights of applicants for water service.

The Supreme Court has consistently held that discrimination in the First Amendment context is permissible only when the government can show that the discrimination is itself necessary to serve a substantial governmental interest. “[T]he crucial question is whether there is an appropriate governmental interest suitably furthered by the differential treatment.” Police Dept. of Chicago v. Mosley, 408 U.S. 92, 95, 92 S.Ct. 2286, 2290, 33 L.Ed.2d 212 (1972) (emphasis added); see also Austin v.

Michigan Chamber of Commerce, 494 U.S. 652, 110 S.Ct. 1391, 1401-02, 108 L.Ed.2d 652 (1990); Arkansas Writers’ Project, Inc. v. Ragland, 481 U.S. 221, 229, 107 S.Ct. 1722, 1727, 95 L.Ed.2d 209 (1987); Minneapolis Star v. Minnesota Commissioner of Revenue, 460 U.S. 575, 591, 103 S.Ct. 1365, 1375, 75 L.Ed.2d 295 (1983); Carey v. Brown, 447 U.S. 455, 465, 100 S.Ct. 2286, 2292, 65 L.Ed.2d 263 (1980). In the instant case, the Water District asserts that its contribution limitation is aimed at curbing corruption and the appearance of corruption.

The Supreme Court has long recognized that this interest may justify non-discriminatory contribution restrictions. Austin, 110 S.Ct. at 1397; Buckley, 424 U.S. at 26, 96 S.Ct. at 638. However, the Water District has not shown that the distinction drawn by its ordinance between applicants and opponents of water service applications serves to prevent corruption and the appearance of corruption. While a particular applicant may have a more direct financial stake in the granting of an exemption from the moratorium than non-applicants have in its denial, there is no basis for believing that this is always the case.

An owner of property may have as much of a financial interest in opposing water service for his neighbor’s property as the neighbor has in obtaining it. The availability of water creates the potential for development that could be detrimental to the value of surrounding property, whether by destroying open space, cutting off views, establishing a competitive business, or otherwise. Moreover, persons with environmental rather than economic interests in mind may also be inclined to make campaign contributions to try to influence the votes of board members.

Thus, while the Water District’s interest in preventing corruption and the appearance of corruption might justify a non-discriminatory contribution limitation, it does not justify the discriminatory contribution limitation at issue in this case. Mosley is analogous to the instant case. In Mosley the Supreme Court struck down a Chicago ordinance that prohibited picketing on school grounds except for labor picketing.

The Mosley Court recognized that Chicago could legitimately “prohibitf ] some picketing to protect public order,” 408 U.S. at 98, 92 S.Ct. at 2291, and that “[cjities certainly have a substantial interest in stopping picketing which disrupts a school.” Id. at 99, 92 S.Ct. at 2292. However, the critical question was whether the distinction between labor and non-labor picketing furthered this legitimate interest. The Court held that it did not, because Chicago had not shown that non-labor picketing was “clearly more disruptive” than labor picketing. Id. at 100, 92 S.Ct. at 2292.

In the instant case, the Water District has not shown that the danger of corruption is greater when the contribution is from an applicant than it is when the contribution is from an opponent of an application. We hold, therefore, that the ordinance violates the Constitution. III We emphasize, however, the limited nature of our decision. The district court’s rationale is more expansive than the evidence in the record can support. The district court concluded that the ordinance would have the effect of decreasing the political voice of one side of the debate over growth within the district.

However, there is no evidence to show that by limiting the contributions of those who apply for water service the Water District was unevenly burdening advocates of growth. Nor is a no-growth bias apparent on the face of the ordinance. It is certainly possible for a person to seek water service to develop his own land but oppose growth in general. The district court’s conclusion about the impact of the ordinance on the debate over growth has no basis in the evidentiary record.

The district court also ruled that the ordinance was “overbroad” because the disqualification of a board member denied representation to constituents of that board member even if they had not made a major contribution. However, there is no evidence in the record about the impact of disqualification on the representation of the Water District’s residents. The grant of

summary judgment cannot, therefore, be supported on the ground that the ordinance denies representation to residents of the district. We affirm the grant of

summary judgment on neither of these grounds, but rather because the ordinance restricts the contributions of applicants without restricting contributions from opponents of the same applications. On this narrow issue, there was no triable issue of material fact and Harwin is entitled to judgment as a matter of law. IV For the reasons stated herein, the

summary judgment is AFFIRMED. As the prevailing party on appeal, Harwin is entitled to attorneys’ fees pursuant to 42 U.S.C. § 1988. . The parties refer to the disqualification provision as a contribution limitation. Technically, the ordinance does not limit the amount anyone may contribute to a candidate for the board. However, by requiring disqualification of a board member who has received a contribution of $250 or more from an applicant, the ordinance provides a powerful disincentive for potential applicants to make such contributions.

A potential applicant must either limit his contributions or face the disqualification of directors whose views he supports. Thus, we agree with the parties that it is appropriate to characterize the disqualification provision as a contribution limitation. In his dissent, Judge Ferguson asserts that the disqualification provision is not a contribution limitation because it "provides no disincentive for persons to contribute to Board members in furtherance of their constitutionally protected rights of political expression and association; it only operates to prevent bribery.” Dissent at 494.

The dissent appears to misread Buckley as holding that some campaign contributions are not protected by the First Amendment. However, Buckley did not hold that campaign contributions are not protected First Amendment activity, even when they lead to corruption and the appearance of corruption. Rather, the Court held that the government’s interest in preventing corruption and the appearance of corruption is sufficiently important to justify the burdening of protected First Amendment activity. See Buckley, 424 U.S. at 25-27, 96 S.Ct. at 637-39.

That an ordinance burdening First Amendment rights is narrowly drawn to prevent corruption and the appearance of corruption may allow the ordinance to survive constitutional scrutiny under Buckley, but it does not place the ordinance outside the ambit of Buckley altogether. .“No member of the Board of Directors of this District shall participate in any hearing or vote upon an application for water service ... made by a major political contributor to his campaign.” Ordinance at § 1.

In other words, a director is disqualified if (1) a person contributes $250 to his campaign and meets the other requirements to become a "major political contributor,” and (2) that person makes an application for water service. The plain words of the ordinance require disqualification only when the major political contributor is an applicant.

A director is not disqualified if he has received a contribution from a “major political contributor who opposes an application for water service.” Contrary to the dissent's assertion, see dissent at 495, § 9.3 of the ordinance does not extend the disqualification provision to opponents of a particular water service application.

Section 9.3 merely defines "major political contributor" to include anyone who makes a contribution “for the purpose of financial gain.” Ordinance at § 9.3. However, no matter how broadly “major political contributor” is defined, § 1 still requires disqualification of a director only when one of his “major political contributors” is the applicant. .

Discrimination in the First Amendment context has sometimes been characterized as a violation of the First Amendment itself, see Arkansas Writers’ Project, 481 U.S. at 227 & n. 3, 107 S.Ct. at 1727 & n. 3; Carey, 447 U.S. at 471, 100 S.Ct. at 2296 (Stewart, J., concurring); First National Bank of Boston v.

Bellotti, 435 U.S. 765, 785-86, 98 S.Ct. 1407, 1420-21, 55 L.Ed.2d 707 (1978); Buckley, 424 U.S. at 48-49, 96 S.Ct. at 648-49, and has sometimes been characterized as a violation of the Equal Protection Clause, see Austin, 110 S.Ct. at 1401-02; Carey, 447 U.S. at 461-62, 100 S.Ct. at 2290-91; Mosley, 408 U.S. at 94-95, 92 S.Ct. at 2289-90. Under either analysis, however, independent justification of the discrimination is required. . The

preamble of the ordinance confirms this claim, reciting that the purpose is “to reasonably limit campaign contributions ... for purposes of financially motivated gain from investment in real estate development by means of securing water service from [the] District.” . Judge Ferguson objects to our “lumping" contributors who have non-financial interests together with contributors whose interests are financial. Dissent at 495.

However, it is not the existence of a financial interest that defines corruption, but rather the existence of “a political quid pro quo from current and potential office holders.” Buckley, 424 U.S. at 26, 96 S.Ct. at 638. In other words, it is the connection between a contribution and a political favor that makes a contribution corrupt, not the nature of the political favor. . Whether analyzed under the First Amendment or under the Equal Protection Clause of the Fourteenth Amendment, see supra note 3, discriminatory burdens on First Amendment rights have typically been subjected to strict scrutiny.

Austin, 110 S.Ct. at 1401 (discriminatory classification “must be narrowly tailored to serve a compelling governmental interest”); Arkansas Writers' Project, 481 U.S. at 231, 107 S.Ct. at 1729 ("In order to justify ... differential taxation, the State must show that its regulation is necessary to serve a compelling state interest and is narrowly drawn to achieve that end.”); Mosley, 408 U.S. at 101, 92 S.Ct. at 2293 (Equal Protection Clause requires that distinctions among speakers be “narrowly tailored to their legitimate objectives.”).

While it is conceivably arguable that a lower level of scrutiny should apply to discriminatory contribution limits because contribution limits are subject to a lower level of scrutiny than expenditure limits, see Buckley, 424 U.S. at 20-21, 23, 96 S.Ct. at 635-36, 637, we need not decide this question today. The standard of review for contribution limits is a “rigorous" one, id. at 29, 96 S.Ct. at 640, which requires the government to "demonstrate[ ] a sufficiently important interest and employ[J means closely drawn to avoid unnecessary abridgment of associational freedoms." Id. at 25, 96 S.Ct. at 638.

Thus, under either strict scrutiny or the “rigorous” standard of Buckley, the Water District must show that a substantial governmental interest is served by the discrimination.