In Depth: How Big Business Buys State Courts

Last Halloween, tobacco giant Reynolds American quietly cut a $30,000 check for Justice For All NC, a nonprofit that funneled more than $1.6 million in outside funding into North Carolina’s 2012 Supreme Court elections, to help incumbent conservative Justice Paul Newby keep his seat on the bench.

The Winston-Salem-based company’s $30,000 donation was pocket change compared with the wave of outside spending that would flood the primary elections for the state’s high court months later, but it was a start.

Justice For All NC sprung back into action in April, unleashing a flurry of attack ads declaring that state Supreme Court Justice Robin Hudson is “not tough on child molesters.” Hudson, the TV ads claimed, sided with sexual predators.

The attack was so nasty that the North Carolina Bar Association issued a statement condemning the ads and others like them. Hudson, a Democrat and a mother, called the ads “preposterous.”

The ads referenced a 2010 case in which Hudson sided with the dissent in a 4-3 ruling over a law that established an ankle bracelet-monitoring program for sex offenders. In her dissent, Hudson argued the program was cumbersome and did little to protect kids, a point that was echoed in a 2012 investigation by the Winston-Salem Journal. The ineffective program was therefore excessive punishment for sex offenders who committed their crimes before the law was passed, Hudson argued.

At first, it was unclear who paid the $648,000 to run the “child molester” ads. Justice For All NC listed its address at a UPS store in a strip mall and did not say much to the media.

North Carolina law allowed Justice For All NC to keep most of its finances under wraps until after Hudson survived the primary vote, but campaign finance disclosures would show that, the day before its “child molester” ad buy, the group received $650,000 from the Republican State Leadership Committee (RSLC). Another $250,000 from the RSLC came in a week later.

The RSLC gave another $400,000 to Justice For All NC on October 24, according to the most recent campaign disclosure forms filed with the North Carolina Board of Elections.

The RSLC has helped Republicans fill seats in statehouses and legislatures across the country and spent $27 million on races in 42 states during the 2012 election season alone. The group now claims to be the only national political group that is focused on state-level judicial elections, which are traditionally nonpartisan affairs in many states, including North Carolina.

As part of its “Judicial Fairness Initiative” aimed at electing conservative judges, the RLSC has said it plans to spend $5 million in 2014 and has already spread more than $1.6 million across races in North Carolina, Montana and Missouri alone, according to campaign records and analysis by the Brennan Center for Justice.

The RLSC’s most generous donors are familiar names in right-wing campaign finance, including Koch Industries, Walmart, AT&T and ExxonMobil, to name a few.

The biggest donor to the RLSC in 2014, however, is Reynolds American, which gave the group $1.1 million this year, according to the Center for Responsive Politics.

“It’s really troubling when you look at where the money comes from,” said Brennan Center Counsel Alicia Bannon. “Oftentimes it’s coming from lawyers and interest groups that have a direct stake in the cases that these courts are hearing.”

Smoke Signals

Reynolds American, which owns cigarette brands like Camel and Pall Mall, has given the RLSC a total of $2.1 million since 2011 and is the RSLC’s largest donor from North Carolina, according to the Institute for Southern Studies.

Coming in second place is North Carolina cigarette maker Lorillard, which has donated $335,000 to the RLSC since 2011.

Like most big tobacco companies, Reynolds and Lorillard are no strangers to the courtroom.

Lorillard, which counts Newport and Kent among its brands, has long been Reynolds’ home-state rival, but that changed in July, when Reynolds announced a $27.4 billion deal to buy Lorillard.

Investors have filed lawsuits in North Carolina courts challenging the buyout, because they claim it would benefit British tobacco firms with stakes in the deal instead of shareholders.

Additionally, state and federal courts outside of North Carolina recently found both companies liable for damages in multi-billion-dollar lawsuits filed by family members of people who died from smoking.

Tobacco companies like Reynolds and Lorillard are used to such lawsuits, but with billions of dollars on the line, it still pays to have friends on the bench.

Last week, a Reynolds subsidiary gave $50,000 to the North Carolina Judicial Committee, a group that used donations from Justice For All NC to support Paul Newby in 2012, according to campaign filings.

Buying Justice

More than 90 percent of judicial business in the United States is decided in state courts, and with business interests tangled up in much of the litigation, it’s easy to understand why corporations spend big on state judicial campaigns.

“Special interest groups continue to dump money into state supreme court races in an attempt to stack the deck in their favor,” Bannon said. “Voters should feel like our courts are fair and impartial, not political playgrounds where business interests and lawyers can tilt the scales of justice with their pocketbooks.”

Since January, political parties, outside groups and candidates spent more than $12.1 million on TV ads for state judicial races across the country. In the past week, outside groups spent a total of nearly $1 million on ads in Michigan, Montana, Ohio, North Carolina and Illinois in a last-minute surge before the election.

The 2012 election cycle was the first full cycle since the Supreme Court’s 2010 Citizens United ruling that struck down caps on outside corporate campaign spending, and special interest groups spent a record $15.4 million on TV ads for state high court races, nearly half the total spent on those races that year, according to a 2013 report by the Brennan Center and other watchdogs.

“Special interest groups have realized that it doesn’t take much money to reshape an entire state court compared to high-cost elections for statewide political offices,” Bannon said.

Last year, the American Constitution Society released analysis of judicial campaign finance data from 2000-2009 showing that the more campaign cash a state justice receives from business interests, the more likely they are to rule in favor of business litigants who show up in their courts.

Judges or Politicians?

So what does Justice For All NC have planned for the last-minute $400,000 donation it received from the RSLC last week? The group has been quiet since its “child molester” ads became national news fodder, but it began airing an ad on Wednesday supporting conservative high court candidate Mike Robinson.

North Carolina Supreme Court candidates have been responsible for most of the $2 million in TV ad buys during the general election, in contrast to the primaries, when Justice for All NC and the North Carolina Chamber of Commerce spent massive amounts of money on TV ads, many of them either attacking Hudson or supporting her conservative opponents.

Fundraising among the nine candidates for the court’s four open seats has skyrocketed to a total of $2.2 million, according to the Brennan Center. Judicial candidates in North Carolina have not raised more than $200,000 in any race since 2008.

Why the huge uptick in fundraising? State lawmakers removed North Carolina’s public financing program for judicial candidates last year, a move that forced candidates to seek out private donors. Bannon, however, said that is only one part of the story. The threat of another wave of outside spending, she said, has put pressure on the judicial candidates to build solid war chests and behave more like politicians than judges.

“If I have a case before the judge, I want that judge to be judging that case according to the law, not thinking about where the next campaign donation is coming from,” Bannon said.