Big business spends to unseat NC Supreme Court Justice Hudson

Blue Cross Blue Shield, the SAS Institute, Koch Industries and other corporations fueled a pair of independent spending efforts that could knock Supreme Court Justice Robin Hudson out of her re-election race in the primary.

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Mark Binker
RALEIGH, N.C. — Businesses such as Reynolds American, Koch Industries and various Blue Cross Blue Shield entities are bankrolling a pair of independent spending efforts aimed at unseating state Supreme Court Justice Robin Hudson.

The two-pronged attack could, if successful, have the unusual effect unseating an incumbent justice in her May nonpartisan primary at a time when most voters are focused on selecting nominees for U.S. Senate and legislative races. 

From one flank, a political action committee run by the North Carolina Chamber is spending $225,000 to air television ads lauding Jeanette Doran and Eric Levinson, Hudson's two competitors. Another group, the much more nebulous Justice for All NC, is airing attack ads claiming Hudson sided with child molesters in a 2010 state Supreme Court case. Justice for All NC has at least $665,000 at its disposal, although it has not filed reports detailing how it is spending that money. 

Gary Salamido, vice president of government affairs for the chamber, insisted that the two efforts are separate, saying that "under no circumstances" would the chamber coordinate its mainly positive message with a group doing attack ads.

But the sum total of the effort is reminiscent of the one-two punch of positive and negative ads that helped Justice Paul Newby keep his state Supreme Court seat in 2012, and many of the businesses that are listed as donors to the chamber's independent expenditure PAC also donated to the group that bankrolls Justice for All. 

Ironically, 2014's independent spending effort can trace its tactical roots back to a 2006 effort that helped Hudson win election to the Supreme Court during her first bid for the job, although the funding available to "Fair Judges" pales in comparison to the corporate cash flowing to Justice for All and the chamber.

The spending in this primary could just be a preview of what's to come in the fall, when three other state Supreme Court seats are on the ballot.

This wave of outside spending will help determine control of the court that is the state's ultimate arbiter of everything from criminal cases to workers compensation and medical malpractice claims. The seven-member court decides whether laws passed by the General Assembly meet the standards set by North Carolina's constitution.  

"The fact you're seeing this level of spending in the primary is a strong indication that special interest groups are paying attention to North Carolina and are primed for a big fight over the shape and future direction of that court," said Alicia Bannon, a lawyer with the New York University School of Law's Brennan Center for Justice.

Big money flows to low-profile race

State Supreme Court races are nominally nonpartisan, although the political affiliation of candidates are typically well-known. Both Democrats and Republicans regularly promote candidates who are registered in their party. In this primary, Hudson is a Democrat, Doran and Levinson are Republicans. Primary voters will narrow the field of three candidates down to two, who will square off in the General Election.

If the independent expenditure efforts are successful, voters will be left with a pair of candidates who seemingly share a similar judicial philosophy, or at least one similar enough that they can both win the backing of the state's business establishment.

This is not the first time outside interests have dabbled in a high court race. 

In 2006, FairJudges.net, a group backed by Democrats, spent more than $250,000 on advertisements on behalf of judicial candidates, including Hudson. At the time those ads aired, campaign watchdogs with the N.C. Center for Voter Education warned the ads "set a dangerous precedent for more special interest influence in our court elections." 

It was in 2012 that the precedent fully took hold, when Newby, a Republican, faced a re-election battle against Court of Appeals Judge Sam Ervin IV, a Democrat from a well-known family. The two candidates spent roughly equal amounts on their campaigns, but Justice for All NC and another independent group, the NC Judicial Coalition, spent heavily on behalf of Newby. Independent spenders came in on behalf of Ervin as well, but Newby benefited from the bulk of the $2.59 million in non-candidate spending in that race.  

The 2012 campaign was the last one in which a public financing system that tended to limit what candidates for statewide judicial office could spend on their campaigns was in effect. Lawmakers have done away with the program, much to the chagrin of reformers who said it would help keep big money out of court races.  

But Bannon said that the big money has already moved on. The national trend in judicial races, she said, has been for big donors to bankroll ads directly, rather than give to candidates. Recent U.S. Supreme Court decisions have cleared the way for large, corporate donations to flow into elections, as long as they don't go directly to the candidates. 

This allows independent spenders to quickly amass war chests that can overwhelm candidates. Hudson reported having $132,687.07 on hand as of April 19, which in almost any previous year would have been more than enough to push through a judicial primary. But this year, it leaves her at a significant disadvantage as she tries to counter-punch against the Justice for All NC ad.

Acknowledging her ads won't have the same reach as the independent spenders, Hudson said she is counting on voters to discount the outside attacks. 

"I really think that people don't want to be tricked by ads into voting for judges who aren't as experienced," Hudson said.

Levinson is a former Court of Appeals judge whom President George W. Bush's administration appointed as a justice attache to Iraq. He was later appointed to the state Superior Court by former Gov. Bev Perdue.

Doran is best known as the former head of the North Carolina Institute for Constitutional Law, a Raleigh-based group that has brought lawsuits against laws it views as unconstitutional. She has also been a federal law clerk and worked for the federal public defender but has never served as a judge. 

Doran and Levinson earned the chamber's backing, Salamido said, because their judicial philosophies aligned with the interests of chamber members. He would not say why Hudson's judicial temperament failed that test, saying only of the candidates "we just look at what kind of fair and balanced treatment they would provide."

The businesses who fund those two groups are no more eager to explain their spending on this race. 

Who is funding the ads? 

A disclosure document filed with the State Board of Elections shows that seven companies – Blue Cross Blue Shield of North Carolina, Captive-Aire Systems, Charlotte Pipe and Foundry Co., Glen Raven, Koch Industries, Reynolds American and Waste Industries – gave a total of $320,000 to the chamber's independent expenditure PAC in 2014.

Several of those companies, including Reynolds American and Koch Industries, are also major donors to the Republican State Leadership Committee, a national group that supports state-level GOP causes. As of late April, the RSLC was Justice for All NC's sole benefactor. 

Other North Carolina companies have given to the RSLC but not the Chamber PAC. Those include the SAS Institute in Cary, which gave $15,000 to the RSLC, and Lorillard Tobacco, a Greensboro-based cigarette maker, which gave $55,000 to the Republican group. 

"Voters should have the most information possible to choose candidates who represent them and who won’t legislate from the bench," said RSLC Communications Director Jill Bader when asked why her group gave to Justice for All.

Spokesmen for Reynolds American and Koch Industries did not return calls seeking comment on why they were giving so heavily toward causes involved in the North Carolina Supreme Court race. Koch Industries in the company led by Charles and David Koch, who have become well known for funding conservative causes.

Lew Borman, a spokesman for Blue Cross Blue Shield of North Carolina, declined to speak about why the insurance giant donated $75,000 to the chamber PAC. However, Borman did take pains to point out that the company has not donated to the RSLC, although the Blue Cross Blue Shield Association, the national company that licenses the Blue Cross trademark, has.  

Pressed as to what the insurer had against Hudson, Borman replied via email, "nothing." 

It's worth noting that the businesses donating to the RSLC are unlikely to be involved in the criminal justice issues highlighted by the ad that their money is funding. Bannon, for the Brennan Center, said it was common for outside spenders to focus on hot-button criminal issues, even if the interest of donors had more to do with mundane-seeming civil cases. 

Two of the three North Carolina-based directors for Justice for All referred questions about their group to Jay Connaughton, a Louisiana-based ad man whose company, Innovative Advertising, developed the ad attacking Hudson. 

"We believe that the voters have the right to know about the decisions their judiciary makes," Connaughton said. 

Ideally, a judge's partisan affiliation will not affect how they rule on a case. In fact, judicial candidates and judges are not supposed to talk about how they would rule in particular circumstances. But all three judicial candidates use buzz words that have become associated with particular strains of judicial thought in North Carolina.

Hudson places emphasis on being "fair" and empathizing with "real people ... with jobs, families, property, safety, kids and schools." Levinson, meanwhile, describes himself as a "constitutional conservative" who says he endeavors to "understand our important, yet limited, sphere of influence as judges." Doran speaks about "judicial restraint and in enforcing statutes as written" on her website. 

Can spending create conflict?

Bob Hall, a long-time campaign watchdog for Democracy North Carolina, said what amounts to high-dollar campaign donations by companies to organizations that support judicial candidates creates a conflict of interest. 

"The worry is that somebody will be able to buy a seat on the Supreme Court," Hall said.

But it's hard to know what amounts to buying a seat.

In the case of a West Virginia Supreme Court race, the U.S. Supreme Court found that a judge who had benefited from millions of dollars in campaign support from a single individual should have to recuse himself when a case involving that individual comes before him. However, the courts did not create a threshold for how much giving creates a conflict of interest. 

Both Doran and Levinson emphasize they have nothing to do with the independent expenditure efforts. 

"Those are independent ads. I have no contact with those donors. I have not seen a list of who may or may not have donated," Levinson said. "I don't know those involved. I haven't asked."

Asked if the high-dollar support could create a conflict of interest if she is elected to the court, Doran said, "Not at all." 

Hall said those answers strain credulity. 

"It's just nonsense. Nobody in the real world believes that," he said. "Whether he knows it today or knows it in a week, he is going to know who gave, and he's going to be appreciative if he wins," Hall said of Levinson.

Even if the businesses supporting the independent expenditures are merely looking for more sympathetic ears on the court, as Salamido suggest, court and campaign finance watchdogs say the impact could be profound. For example, Duke Energy has given the RSLC $328,250 since 2006, $50,000 of that coming in 2013, according to data compiled by the Center for Responsive Politics. Duke is currently fighting a case in state court that would force it to quickly clean up pollution at 14 coal ash ponds around North Carolina. The power company also faces legal challenges over raising rates from time to time.

Other big donors to the groups, including Blue Cross, are involved in state legal actions that sometimes end up before North Carolina's highest court.

It would not be unreasonable for litigants on the other side of those cases to wonder if they will get a fair hearing if the judges in question have gotten campaign support from companies on the other side of a lawsuit.

"It's a very natural question to ask as more and more money goes into these races," Bannon said. She pointed to some polling on the topic which suggests, "There's an overwhelming sense among the public that it's unfair for judges to be hearing those cases."

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