Cozen O’Connor has lost another attempt at being allowed to forgive in full the $450,000 in legal bills it is owed by U.S. Representative Bob Brady, D-Pa., in connection with the firm’s representation of him in a ballot challenge during the 2007 Philadelphia mayoral race.
The Commonwealth Court ruled Tuesday that post-election contributions are subject to the Philadelphia Campaign Finance Law annual contribution limits as long as the debt being paid down was incurred to influence the outcome of the election.
Cozen O’Connor had argued the 2010 amendments to the Campaign Finance Law expressly stating fundraising limits apply to post-election activities was evidence the law in place at the time of the 2007 election did not intend for the limits to apply to post-election fundraising.
The Commonwealth Court, in an opinion by Judge P. Kevin Brobson, rejected that argument, finding the amendments simply served to clarify and codify existing interpretations of the law. Brobson adopted the Philadelphia trial court’s finding that the law as it stood in 2007 is what applies to this case. The Commonwealth Court’s ruling upholds the trial court’s denial of Cozen O’Connor’s motion for judgment on the pleadings. The case has already been up to the state Supreme Court, which found in 2011 Cozen O’Connor had standing to seek a declaratory judgment, sending the case back to be heard on its merits.
“The definition [of ‘contribution’] neither expressly limits its reach to pre-election activities nor prohibits its extension to post-election activities,” Brobson said. “Accordingly, it matters not whether the forgiveness of debt occurred before or after the election, so long as the purpose for which the committee incurred the debt was to influence the outcome of the election of the candidate.”
Cozen O’Connor has argued the debt was not incurred to influence the outcome of the election but rather to secure Brady’s petition on the ballot after campaign opponent Tom Knox challenged Brady’s ability to run in the race. Brobson said the finance law does not define the term “influence.” In looking at the dictionary definition of the word, Brobson said keeping a candidate on the ballot influences the outcome of an election.
“We applaud all of those who have the desire to serve in elected office and who are willing to step into the political arena,” Brobson said. “To argue that ballot challenge litigation is not part of that arena, however, invites the willful suspension of disbelief.”
If Cozen O’Connor were to forgive the debt in total, the forgiveness would be a contribution because forgiveness of debt is included in the definition of “contribution,” the definition is not limited to only pre-election fundraising and the debt was incurred for purposes of influencing the election, Brobson said.
Cozen O’Connor has argued it will take it more than 40 years to forgive the debt in accordance with the law’s annual limits of around $10,000 per organization.
Brobson noted in a footnote to his opinion in Cozen O’Connor v. City of Philadelphia Board of Ethics that the law firm could forgive the debt in accordance with the annual contribution limits or, upon application to the City of Philadelphia Board of Ethics, forgive the debt at one time in toto as long as the firm meets the criteria outlined in the board’s Regulation No. 1. The criteria requires, among a number of other factors, that the campaign committee not have received any contributions or made any expenditures over $1,000 for the past two years.
Cozen O’Connor had additionally attempted to get a declaratory judgment ruling on whether Brady’s campaign committee could raise funds outside of the campaign finance limits in order to pay off the debt. The trial court and Commonwealth Court ruled, however, that the firm only had standing to inquire about its own ability to forgive the debt, not another entity’s ability to fundraise outside the limits.
Stephen A. Cozen of Cozen O’Connor and Adam C. Bonin of the Law Office of Adam C. Bonin represented Cozen O’Connor.
Cozen said he always expected this case would reach the Supreme Court again and said he intends to appeal Brobson’s ruling. He said Brobson essentially agreed with Cozen O’Connor on nearly all of its arguments, including that the debt is not an expenditure, but still found that post-election contributions are governed by the Campaign Finance Law even though the code didn’t expressly say that.
“It’s inconsistent in terms of what I’ve been taught in terms of statutory construction,” Cozen said.
Elisa T. Wiygul of Dechert represented the ethics board. She said they were pleased with the court’s well-reasoned opinion, which she said “ensures a level playing field” for candidates for office in Philadelphia.
Judge Bonnie Brigance Leadbetter and Senior Judge Rochelle S. Friedman joined Brobson in the ruling.
(Copies of the 26-page opinion in Cozen O’Connor v. City of Philadelphia Board of Ethics, PICS No. 13-1331, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.)