AKINS v. FEC (91-2831)

On June 9, 1992, the U.S. Court of Appeals for the District of Columbia Circuit, in a per curiam order, directed the district court to clarify its order of January 21, 1992. (Civil Action No. 92-5124.) In that order, the district court had required the FEC to "issue a final decision on the merits of the Plaintiffs' administrative complaint forthwith, and in no event later than 4 p.m. on May 29, 1992."

The court of appeals stated that it found the above language confusing: "While it could be interpreted, as the FEC has suggested, as a direction to the agency to take final action by May 29, we question this interpretation because the district court has not found that the FEC's failure to act on appellees' administrative complaint was 'contrary to law' as required by 2 U.S.C. §437g(a)(8)(C)."

The court further stated: "We would have serious doubts about the propriety of an order compelling the FEC to take final action absent a finding by the district court that the agency's failure to act was 'contrary to law.' Upon clarification, the district court should allow the FEC sufficient time for any action the clarified order may contemplate."

(The FEC had interpreted the order as a mandatory deadline for final action and had asked the district court to clarify the order by deleting that language. When the court refused, the agency filed an appeal.)

In response to the directions from the court of appeals, the district court issued a new order on June 26, 1992. Stating that its previous order "was not intended as an injunction," the district court reopened the case to decide the "contrary to law" issue. However, shortly thereafter, on July 7, 1992, the court dismissed the case as moot since the FEC had completed action on the administrative complaint (MUR 2804). Civil Action No. 91-2831 (CRR).

Source: FEC Record, August 1992, p. 11.

Akins v. FEC, No. 91-2831 (D.D.C. Jan. 20, 1992); on remand, No. 92-5124 (D.C. Cir. June 9, 1992); on remand (D.D.C. June 26, 1992).

AKINS v. FEC (92-1864)

On September 29, 1995, the U.S. Court of Appeals for the District of Columbia ruled that the FEC's use of a "major purpose test" to narrow the definition of "political committee" was valid, that its application of the "major purpose test" in this case was reasonable, and that its investigation into the matters raised by appellants was adequate. The court therefore affirmed the district court's ruling dismissing appellants' complaint that the FEC's actions were contrary to law.

On December 6, 1996, the U.S. Court of Appeals for the District of Columbia Circuit, sitting en banc, reversed the district court's decision.

On June 1, 1998, the U.S. Supreme Court ruled that Mr. James E. Akins and several other former government officials had standing to challenge in federal court the Commission's dismissal of an administrative complaint they filed in 1989 against the American Israel Public Affairs Committee (AIPAC). The Supreme Court also referred questions about the membership status of AIPAC members to the Commission.

Administrative Complaint

On January 9, 1989, Mr. Akins and his associates filed an administrative complaint with the FEC alleging that AIPAC, an organization that lobbies public officials and disseminates information about federal candidates and officeholders, failed to register and report as a political committee, after it had made contributions to and expenditures on behalf of federal candidates in excess of $1,000.

The Federal Election Campaign Act (the Act) defines a political committee as any committee, association or other group that receives contributions or makes expenditures to influence federal elections in excess of $1,000 during a calendar year. 2 U.S.C. §431(4)(A). However, a statutory exception to the definition of expenditure allows membership organizations to make disbursements of more than $1,000 for campaign-related communications to their members, without their counting as contributions or expenditures.

AIPAC claimed that its communications to its members fell within this exception and, therefore, that it did not have to register as a political committee or disclose any of its financial activities to the FEC.

The FEC did not agree. In its view, AIPAC's disbursements did qualify as expenditures because its members did not qualify as members under the Act. The Commission, nonetheless, concluded AIPAC was not subject to the registration and disclosure rules applicable to political committees. The Commission believed that, because AIPAC's major purpose was not influencing federal elections, it did not qualify as a political committee even though it had made expenditures in excess of $1,000. The Commission dismissed the complaint.

District and Appellate Courts Decisions

Mr. Akins and the other plaintiffs filed suit in U.S. District Court for the District of Columbia charging that the FEC failed to proceed on the administrative complaint and challenging the Commission's interpretation of what constitutes a political committee. The district court ruled in favor of the FEC, agreeing with the "major purpose" testthat an organization that receives contributions or makes expenditures of more than $1,000 becomes a political committee only if its major purpose is the influencing of federal elections.

The U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court ruling, but an en banc panel of the same appellate court reversed the district court decision. The en banc panel, referencing both Buckley v. Valeo and FEC v. Massachusetts Citizens for Life, Inc., found that the major purpose test can only be applied to organizations that make independent expenditures, not contributions, which is what was in question in the administrative complaint against AIPAC. The court also rejected the Commission's argument that the appellants lacked standing to bring their claim to federal court. On behalf of the FEC, the solicitor general appealed the decision to the Supreme Court.

Supreme Court Decision

The Supreme Court focused its opinion on the three-pronged test of standingwhich a plaintiff must demonstrate to show there is a "case" or "controversy" under Article III of the U.S. Constitution injury in fact, causation and redressability. The high court also found that the plaintiffs' inability to obtain information about AIPAC's campaign-related finances satisfied prudential standing because it was the kind of injury that the Act seeks to address.

Injury in Fact. The Supreme Court found that the injury in fact in this case was that the plaintiffs were prevented from obtaining information about AIPAC's donors and the organization's campaign-related contributions and expenditures. It said that there is no reason to doubt that this information would have helped the plaintiffs evaluate candidates for public office, especially those candidates who received assistance from AIPAC. Thus, the court said, the injury in this case is both "concrete" and "particular." The FEC argued that the lawsuit involved only a "generalized grievance" shared by many (a kind of grievance for which standing usually is not conferred); the Supreme Court disagreed. In such cases of "generalized grievance," the court said, the harm is usually "of an abstract and indefinite nature"not the kind of concrete harm that the court found here.

The court concluded that, "[T]he informational injury at issue here, directly related to voting, the most basic of political rights, is sufficiently concrete and specific such that the fact that it is widely shared does not deprive Congress of constitutional power to authorize its vindication in the federal courts."

Causation and Redressability. The high court also found that the harm asserted by the plaintiffs was "fairly traceable" to the FEC's decision to dismiss its administrative complaint, and that the courts have the power to redress this harm.

The Supreme Court also rejected the FEC's argument that, because the agency's decision not to undertake an enforcement action is generally an area not subject to judicial review, 2 U.S.C. §437g(a)(8) should be interpreted narrowly.

"Major Purpose" Test

With regard to the "major purpose" test, the Supreme Court referred the matter back to the FEC because of the uncertainty of the "membership" issue as applied to AIPAC.

Source: FEC Record, May 1994, p. 4; December 1995, p. 1; February 1997, p. 1; and July 1998, p. 1.

Akins v. FEC, No. 92-1864 (JLG) (D.D.C. Aug. 11, 1993) (on motion for amended complaint); (D.D.C. Dec. 8, 1993); (D.D.C. Mar. 30, 1994) (opinion); 66 F.3d 348 (D.C. Cir. 1995), rev'd, 101 F.3d 731 (D.C. Cir. 1996) (en banc), vacated and remanded, 118 S. Ct. 1777 (1998).

ALBANESE v. FEC

On March 12, 1996, the U.S. Court of Appeals for the Second Circuit affirmed the district court's decision to dismiss this case for lack of standing.

Background

This suit was brought by Sal Albanese, who chose not to challenge Representative Susan Molinari in 1994 after his unsuccessful attempt to unseat her in 1992, and on behalf of a number of his supporters.

In their original suit, plaintiffs challenged the constitutionality of the federal electoral system on the grounds that it financially handicapped campaigns to unseat an incumbent, thus discouraging potential candidacies. In an amended complaint, they specifically challenged the constitutionality of the Federal Election Campaign Act (the Act)alleging that it authorizes the use of private monies in federal electionsand the franking privileges enjoyed by incumbents.

District Court Ruling

In determining that plaintiffs lacked standing to bring this suit, the court applied the three-part test for standing; this test requires plaintiffs to identify (1) an actual injury that (2) is caused by the challenged act and (3) is likely to be redressed by the relief requested. The court found that plaintiffs in this case failed all three parts of this test.

Plaintiffs failed the first part because plaintiffs represented a potential candidate and supporters of his would-be campaign, rendering their alleged injury "abstract and conjectural." For instance, their alleged injury that large contributors diminish the influence of those who cannot give as much was "abstract and remote" in this case since the campaign that plaintiffs wished to support did not exist.

Plaintiffs failed the second part because, since their alleged injury was theoretical, they could not provide tangible evidence that the injury was caused by the Act. The court noted, "We will never know how much money might have been contributed to [Albanese's campaign] and how successful he might have been at the polls . . . ." The court further stated that, "Albanese opted not to participate in the election process; he was not prevented from doing so." The alleged injuries, therefore, were not traceable to the Act.

Lastly, plaintiffs failed the third part because their suggested remedyto declare the Act unconstitutionalwould not redress the injury. The court stated, "[If] plaintiffs' goal is to eliminate the contribution of private funds to politicians and thereby level the electoral playing field, declaring the [Act]a statute which limits such contributionsunconstitutional cannot be said to redress plaintiffs' injury."

Additionally, the court cited Buckley v. Valeo as a legal precedent upholding the constitutionality of the Act, and several other court decisions similarly upholding the constitutionality of the franking statute.

In closing, the court declared that it was outside its jurisdiction to address the plaintiffs' grievance, and that plaintiffs had to seek relief through the legislative and executive branches of government: "To the extent that the plaintiffs believe that a modification of the process would enhance its integrity, they must make the case for the validity of that belief with the political branches of our government. For just as fundamental to the political order of this democracy is the doctrine of separation of powers and the limited jurisdiction conferred upon the federal judiciary within that political order."

Source: FEC Record, July 1995, p. 8; and May 1996, p. 4.

Albanese v. FEC, 884 F. Supp. 685 (E.D.N.Y. 1995), aff'd, 78 F.3d 66 (2d Cir. 1996).

ANDERSON v. FEC (80-0272)

On April 10, 1981, the U.S. District Court for the District of Maine dismissed John B. Anderson v. FEC (Civil Action No. 80-0272P) in response to a motion to dismiss the suit filed by plaintiffs on the same day. The suit had been remanded to the district court after certification of constitutional questions to the U.S. Court of Appeals for the First Circuit. Several plaintiffsJohn B. Anderson, a candidate in the 1980 Presidential elections, the National Unity Campaign 441a(d) Committee and three individual plaintiffshad brought suit on September 8, 1980, asking the district court to certify the following constitutional questions to the appeals court:

• Does Section 441a(a)(1)(B), which entitles a national party committee to receive contributions of up to $20,000 per year from individuals, infringe on plaintiff's First and Fifth Amendment rights; and
• Does Section 441a(d), which permits a national party committee to make special "coordinated party expenditures" on behalf of its Presidential candidate, infringe on plaintiffs' First and Fifth Amendment rights?

Plaintiffs had also sought a preliminary injunction from the district court, directing the Commission to permit the application of Sections 441a(a)(1)(B) and 441a(d) to the National Unity Campaign 441a(d) Committee, which had registered as a political committee the day before plaintiffs filed suit.

District Court Ruling

On October 14, 1980, the district court certified plaintiffs' constitutional questions to the appeals court but denied plaintiffs' motion for a preliminary injunction. The court held that plaintiffs had not exhausted the administrative relief available to them under the election law. Moreover, the court noted that any injunction granted would have been permanent, rather than temporary, since the election would be held within two and one-half weeks of its ruling.

Appeals Court Ruling

On October 30, 1980, the appeals court granted the FEC's motion to remand the case to the district court for further fact finding. The court noted that, if plaintiffs had sought an advisory opinion from the FEC before filing suit, the court "...would likely have had more facts before us than we do presently and would have been better able to evaluate plaintiffs' constitutional claims."

Plaintiffs Seek Administrative Relief From FEC

On November 4, 1980, prior to seeking dismissal of their suit, plaintiffs requested an advisory opinion from the Federal Election Commission on the status of the National Unity Campaign and the National Unity Campaign 441a(d) Committee as national party committees operating on Mr. Anderson's behalf. In AO 1980-131, issued on November 20, 1980, the Commission determined that neither committee qualified as the national committee of a political party and, therefore, that neither committee was entitled to receive up to $20,000 in contributions from individuals or to make coordinated party expenditures.

Source: FEC Record, July 1981, p. 6.

Anderson v. FEC, 634 F.2d 3 (1st Cir. 1980) (en banc).

ANDERSON v. FEC (80-1911)

On September 9, 1980, the U.S. District Court for the District of Columbia dismissed the suit, John B. Anderson v. FEC (Civil Action No. 80-1911). The court determined that there was no longer a need for a decision either on the FEC's motion to dismiss the suit or on the substantive issues raised in the suit.

In the suit, plaintiffs had sought an expedited ruling by the court that John B. Anderson would be eligible as an independent candidate for the same post-election public funding as that provided Presidential candidates of "new parties," if he received five percent or more of all popular votes cast in the 1980 Presidential general election and met other requirements of the Act. Such a ruling, plaintiffs told the court, would immediately make large bank loans available to the Anderson
campaign.

The FEC had consistently argued that plaintiffs should have requested an advisory opinion from the FEC on the application of the Act and the Commission's new regulations to the Anderson campaign before seeking a court ruling. On August 13, plaintiffs did file an advisory opinion request (AOR 1980-96) with the FEC, and on September 4 the Commission issued an opinion declaring Mr. Anderson eligible for post-election public funding as the candidate of a new political party.

After issuing the Anderson opinion, the FEC filed a supplement to its motion to dismiss the suit, submitting the opinion and arguing that it fully supported its consistent position that the case should be dismissed. Plaintiffs, who had opposed the FEC's motion to dismiss, also filed their own motion to dismiss the case as moot.

Source: FEC Record, October 1980, p. 6.

ANTOSH v. FEC (84-1552 and 84-2737)

On August 30, 1984, the U.S. District Court for the District of Columbia issued an order granting the FEC's motion to dismiss Antosh v. FEC (Civil Action No. 84-1552) and denying the plaintiff's motion to file a supplemental complaint. On September 13, 1984, the court issued an opinion explaining the ruling. Following the court's order, Mr. James E. Antosh filed a second suit with the court on September 6, 1984 (Civil Action No. 84-2737). The second suit included a request by the plaintiff that the district court certify two constitutional claims to the U.S. Court of Appeals.

On January 5, 1988, the court ruled that Mr. Antosh lacked standing in his second suit to seek the court's certification of his constitutional questions to the appeals court. The court granted a motion by the FEC to dismiss the counts of his complaint which included the constitutional questions.

On March 24, 1988, the district court issued an order granting a further motion by the FEC for a summary judgment in the second suit. The court's order dismissed the remaining two counts of Mr. Antosh's complaint.

First Suit

Mr. Antosh, a registered voter in Oklahoma, is president of Shawnee Garment Manufacturing, Inc. On December 2, 1983, he filed an administrative complaint with the FEC alleging that the separate segregated funds of three international unions were affiliated with the AFL-CIO's political action committee (PAC)1 within the meaning of 2 U.S.C. §441a(a)(5). Mr. Antosh claimed that the four political committees had failed to disclose their affiliation in their respective Statements of Organization and, in making contributions to several political committees, had exceeded their single $5,000 contribution ceiling. (See 2 U.S.C. §§433(b)(2) and 441a(a)(2)(A).)

Furthermore, his complaint claimed that the election law and FEC Regulations recognized automatic affiliation between business federations and their members, on the one hand, while only a discretionary affiliation between a labor federation and its members, on the other. The plaintiff had alleged that this was discriminatory treatment in violation of the First and Fifth Amendments.

Pursuant to 2 U.S.C. §437g(a)(8), Mr. Antosh filed his first suit against the FEC in the district court on May 17, 1984. The plaintiff asked the court to declare that the FEC's failure to act on his administrative complaint within 120 days was contrary to law and to issue an order directing the FEC to proceed with an investigation into the complaint within 30 days.

On July 10, 1984, the Commission dismissed Mr. Antosh's administrative complaint, finding no reason to believe that violations of the election law had occurred. On the same day, the Commission also filed a motion with the court to dismiss Mr. Antosh's suit as moot. On July 23, 1984, Mr. Antosh requested that the court deny the FEC's motion to dismiss his case and grant his motion to file a supplemental complaint. In his proposed supplemental complaint, Mr. Antosh requested the court to declare that the FEC's dismissal of his administrative complaint was contrary to law, and to certify his constitutional questions to the appeals court. The court found, however, that Mr. Antosh's July 23 request did not constitute a supplement to his original suit because, unlike the original request, the motion did not deal with delays in processing his administrative complaint, but rather it dealt with the merits of the FEC's decision to dismiss the complaint. The court therefore decided that, under procedural rules, Mr. Antosh had to file a separate suit with the court.

Second Suit

On September 6, 1984, Mr. Antosh filed a second suit with the district court to challenge the Commission's dismissal of his complaint. On December 3, 1984, pursuant to 2 U.S.C. §437h(a), he asked the district court to certify two constitutional claims to the appeals court. Specifically, he alleged that several provisions of the Federal Election Campaign Act and FEC regulations provided preferential treatment to labor organization PACs over trade association PACs. Mr. Antosh claimed that these distinctions violated the First and Fifth Amendments. Furthermore, Mr. Antosh asked the court to declare that the FEC's dismissal of his administrative complaint was contrary to law and that both the FEC and former Commissioner Thomas E. Harris had violated his rights to due process in refusing to disqualify Commissioner Harris from the agency's consideration of his administrative complaint.2 (Prior to his appointment to the Commission in 1975, Commissioner Harris had served as counsel for the AFL-CIO. Mr. Antosh claimed that Mr. Harris had signed a factual stipulation on behalf of the AFL-CIO in a 1973 case that was germane to Mr. Antosh's suit.)

The FEC filed an opposition to Mr. Antosh's motion for certification of his constitutional claims and filed an additional motion to dismiss them. The agency argued that Mr. Antosh lacked standing to raise the constitutional questions and that federal courts had already substantially settled the questions he raised.

In January 1988, the court granted the FEC's motions and dismissed Mr. Antosh's constitutional claims. The court found that, although the plaintiff had standing to raise his questions under the election law, he lacked standing under Article III of the Constitution. The court concluded that Mr. Antosh failed to demonstrate the kind of injury required by Article III, that is, "some actual or threatened injury which is traceable to illegal conduct by the defendant" and which "is likely to be redressed by a favorable ruling." The court first rejected Mr. Antosh's claim that, as a businessman who might contribute to trade association political action committees, his voice had been diminished in the political process by the law's alleged discrimination against such committees, thereby violating his rights under the free speech provision of the First Amendment. The court then rejected Mr. Antosh's claim that he had a personal stake in the law's alleged discrimination against corporate political action committees by virtue of his position as president of a corporation that was a member of trade associations, thereby violating his rights under the First Amendment and under the due process clause of the Fifth Amendment.

In March 1988 the district court ruled on the rest of the counts in Mr. Antosh's suit. With regard to Mr. Antosh's allegation that the FEC's dismissal of his administrative complaint was contrary to law, the court held that the FEC had "reasonably interpreted" the provision of the election law governing possible affiliation between the political committees named in the complaint. Consequently, the agency's dismissal of the complaint was not contrary to law.

The FEC had argued that the legislative history of Section 441a(a)(5) demonstrated that Congress had not intended to impose a single contribution limit on the AFL-CIO's PAC and the PACs of international unions affiliated with the AFL-CIO. The agency noted that it had consistently interpreted the provision this way.

The district court supported the FEC's view, noting comments made in 1976 by Congressman Wayne Hays, then Chairman of the House Ways and Means Committee and a sponsor of the 1976 amendments to the Act, saying that the membership of international unions in the AFL-CIO did not mean that the unions and the federation were to be treated as a single entity for the purposes of the 1976 amendments.

With regard to Mr. Antosh's claim that Commissioner Harris should have recused himself from the case, the court concluded that "the intervention of significant numbers of years [nine] certainly is sufficient to remove any taint." The court added that it "refuse[d] to find that an attorney, at the very least nine years later, cannot consider cases involving a former client, especially after the Commission has made a determination that he or she is capable of impartially addressing the individual facts of a case."

Source: FEC Record, November 1984, p. 5; March 1988, p. 10; and June 1988, p. 8.

Antosh v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9260 (D.D.C. Jan. 5, 1988), (D.D.C. Mar. 24, 1988) (unpublished opinion).

1 The full title of the AFL-CIO's PAC is "American Federation of Labor Congress of Industrial Organizations, Committee on Political Education Political Contributions Committee (AFL-CIO COPE-PCC)."

2 Commissioner Harris's third term on the Commission expired in April 1985. He continued to serve on the Commission, however, until autumn 1986, when he was replaced on the Commission by Scott E. Thomas.

ANTOSH v. FEC (84-3048)

On December 21, 1984, the U.S. District Court for the District of Columbia issued an order granting plaintiff's motion for summary judgment in James Antosh v. FEC (Civil Action No. 84-3048). The court found that the Commission's dismissal of an administrative complaint Mr. Antosh had filed with the FEC was contrary to law. On the same day, therefore, the court issued an order requiring the Commission to vacate its determination in the administrative complaint and to "reopen [the complaint] for further proceedings consistent with the court's opinion."

On July 1, 1987, the court denied Mr. Antosh's petition for award of attorneys' fees and costs incurred by him in the same suit.

Background

In filing his complaint with the FEC in May 1984, Mr. Antosh had alleged that:

• Engineers Political Education Committee/International Union of Operating Engineers (EPEC/IUOE) and Supporters of Engineers Local 3 Federal Endorsed Candidates (SELFEC), the separate segregated funds of the International Union of Operating Engineers and Engineers Local 3, had violated 2 U.S.C §441(a)(2)(A) by making contributions in excess of $5,000 to the 1982 primary campaign of Thomas P. Lantos, a Congressional candidate, and Mr. Lantos' principal campaign committee;
• Mr. Lantos and his principal campaign committee had, in turn, violated 2 U.S.C. §441a(f) by knowingly accepting the excessive contributions (totaling $3,600); and
• Mr. Lantos, his campaign treasurer and his principal campaign committee had violated Commission regulations by failing to report the excessive contributions accurately. See 11 CFR 104.14(d).

In a report submitted to the FEC in July 1984, the General Counsel noted, however, that based on an affidavit and a letter submitted by the respondents, of the $3,600 alleged to be excess contributions to the 1982 primary, $3,100 had in fact been designated for retiring debts of Mr. Lantos' 1980 general election campaign. The General Counsel therefore concluded that the two union PACs had made excessive contributions of $500 to Mr. Lantos' 1982 primary campaign rather than $3,600. Accordingly, the General Counsel recommended that "due to the small amount in question" (i.e., excessive contributions of $500), the Commission should find reason to believe that the respondents had violated the Act, but take no further action. The Commission followed the General Counsel's recommendations and closed the file on MUR 1719.

In October 1984 Mr. Antosh petitioned the district court to take action against the FEC for dismissing his administrative complaint.

The District Court's Ruling

The court noted that in determining whether an agency's determinations were "arbitrary and capricious," the court's standard of review had to be "a highly deferential one...which presumes the agency's action to be valid." In the case of Mr. Antosh's complaint, however, the court found a "problem in the Commission's treatment of this matter." Specifically, although EPEC/IUOE had designated $3,100 for retiring the Lantos committee's 1980 general election debt, committee reports indicated the contributions had been made during May and June 1981, several weeks after the committee had apparently extinguished the 1980 debt in mid-April 1981.

The court concluded that "the Commission dismissed MUR 1719 because it only involved violations of $500.... The violations in fact appear to involve considerably more money, and are thus more egregious than the Commission realized. For these reasons, the Commission's dismissal of MUR 1719 was arbitrary and capricious and, thus, contrary to law." See 2 U.S.C. §437g(a)(8).

Attorneys' Fees and Costs

The Equal Access to Justice Act states that only those courts which have jurisdiction over the underlying civil action may consider whether to award attorney's fees and costs to a prevailing party. Upon examination of its jurisdiction over the original suit, the district court concluded that, in fact, Mr. Antosh did not have standing to bring it. Consequently, the court could not grant plaintiff's petition for award of costs and attorneys' fees.

Under Article III of the Constitution, in order to have standing to sue, an aggrieved party must "show that he personally suffered some actual or threatened injury as a result of the putatively illegal conduct of the respondent..." (i.e., the Lantos campaign). Since Mr. Antosh was an Oklahoma resident, the court concluded that he would not be injured by a California candidate's acceptance of excessive contributions. "Plaintiff's interest in the California election is no different from the interest of any citizen who wishes to ensure that candidates abide by the rules that govern elections," the court said. The court noted that this conclusion was the same as that reached by the court in July 1986 in a "virtually identical" suit brought by Mr. Antosh against the FEC. (Antosh v. FEC, Civil Action No. 86-0179.)

Source: FEC Record, February 1985, p. 4; and January 1988, p. 8.

Antosh v. FEC, 599 F. Supp. 850 (D.D.C. 1984), 664 F. Supp. 5 (D.D.C 1987) (ruling on att'y fees).

ANTOSH v. FEC (85-1410)

CITIZENS FOR PERCY '84 v. FEC (85-0763)

COMMON CAUSE v. FEC (85-0968)

GOLAR v. FEC

On October 23, 1985, the U.S. District Court for the District of Columbia ruled on Common Cause v. FEC.1 (Civil Action No. 85-968), Golar v. FEC (Civil Action No. 85-225) and Citizens for Percy v. FEC (Civil Action No. 85-763), three suits which had challenged the FEC's dismissal of administrative complaints.

Under the election law, a suit challenging the dismissal of an administrative complaint must be filed with a district court within 60 days after it is dismissed by the FEC. 2 U.S.C. §437g(a)(8)(B). The FEC had argued that the 60-day period begins at the time the Commission votes to dismiss an administrative complaint. The court, however, concluded that the 60-day period begins when a complainant actually receives the notice of dismissal.

Based on this ruling, the court dismissed Citizens for Percy v. FEC because the Committee had filed its suit more than 60 days after both the Commission's decision to dismiss the Committee's administrative complaint and its receipt of the FEC's notice of dismissal. On the other hand, the court decided not to dismiss the suits brought by Common Cause and Mr. Golar because plaintiffs had filed their respective challenges within 60 days of FEC notification.

In Antosh v. FEC (Civil Action No. 85-1410),2 another district court reached a different conclusion on June 7, 1985. In a suit to review conciliations agreements entered into by the Commission, the court concluded that the 60-day period for filing suit began on "the date the Commission approved the conciliation agreements and they became effective." Finding that the matter had been filed within 60 days of that date, the court agreed to hear the case.

Source: FEC Record, December 1985, p. 7; and Annual Report 1985, p. 15.

Antosh v. FEC, 613 F. Supp. 729 (D.D.C. 1985).

Citizens for Percy '84 v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9229 (D.D.C. 1985).

1 The district court decision in Common Cause v. FEC (85-0968) appears in alphabetical order, inserted with other Common Cause suits.

2 For the district court decision in Antosh v. FEC (85-1410), see Antosh v. FEC (86-0179).

ANTOSH v. FEC (85-2036)

On April 4, 1986, the U.S. District Court for the District of Columbia issued an order which granted the FEC's motion for summary judgment in Antosh v. FEC and which dismissed with prejudice plaintiff Edward Antosh's complaint. (Civil Action No. 85-2036.) The court held that, under Article III of the Constitution, Mr. Antosh lacked standing to seek judicial review of the FEC's dismissal of his administrative complaint.

Background

A resident of Oklahoma, Mr. Antosh had filed his administrative complaint with the FEC in April 1984. In the complaint, he alleged that: (1) the Engineers Political Education Committee (EPEC), the separate segregated fund of the International Union of Operating Engineers, had violated the election law by making excessive contributions to Arizona Senator Dennis DeConcini's 1982 primary campaign (the campaign); and (2) the campaign had violated the election law by accepting the excessive contributions. The Commission determined that there was reason to believe EPEC had violated the election law by making excessive contributions to Senator DeConcini's reelection campaign. However, in a tie vote, the agency failed to find reason to believe that the campaign had violated the law.

On June 21, 1985, Mr. Antosh filed suit with the district court. He claimed that the FEC's determination that the campaign had not violated the law was arbitrary and capricious. In cross motions for summary judgment, Mr. Antosh claimed that he had standing to bring suit because, under the election law, "[a]ny party aggrieved by an order of the Commission dismissing a complaint filed by such party...may file a petition with the U.S. District Court for the District of Columbia." 2 U.S.C. §437g(a)(8)(A).

District Court's Ruling

In ruling that Mr. Antosh lacked standing to seek judicial review of the FEC's determination, the court referred to the requirement that an aggrieved party must "show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant...." to establish standing under Article III.

The court held that Mr. Antosh failed to meet this requirement. As a citizen of and a registered voter in Oklahoma, Mr. Antosh had "suffered no greater injury, nor likely will he in the future, as a result of the Commission's failure to order a refund, than any other U.S. citizen who is neither a resident of nor with franchise in Arizona." The court concluded that "plaintiff has no interest save his own, which is, at the moment, only that of a public-spirited spectator of Arizona elections."

Finally, the court noted that the standard for qualifying as an "aggrieved party" (eligible to seek judicial review for an administrative agency's determination) was higher than the standard for filing an administrative complaint with an agency. "Congress can permit anyone to engage in proceedings before them [administrative agencies]. But it cannot confer upon a participant at the administrative level the right to maintain a suit to review the agency's decision in federal court, no matter how grievously he may be offended by it.... "

The court did not address issues related to the merits of the FEC's administrative determinations or its own jurisdiction to review those determinations.

Appeals Court's Ruling

On August 13, 1986, the U.S. Court of Appeals for the District of Columbia Circuit granted Mr. James E. Antosh's motion to dismiss his appeal of the April 1986 decision handed down by the U.S. District Court.

Source: FEC Record, June 1986, p. 8; and October 1986, p. 7.

Antosh v. FEC, 631 F. Supp. 596 (D.D.C. 1986).

ANTOSH v. FEC (86-0179)

On July 15, 1986, the U.S. District Court for the District of Columbia issued an order which granted the FEC's motion for summary judgment in Antosh v. FEC and which dismissed with prejudice plaintiff Edward Antosh's complaint. (Civil Action No. 86-0179.) The court held that, under Article III of the Constitution, Mr. Antosh lacked standing to seek judicial review of the FEC's dismissal of his administrative complaint.

Background

Mr. Antosh filed suit against the FEC on grounds that, in two complaints, the agency's failure to order refunds of respondents' excessive contributions was contrary to law. The administrative complaints concerned excessive contributions made respectively by two labor organizations to Senators Edward Kennedy (MUR 1637) and Paul Sarbanes (MUR 1696) in 1984. The contributing committees were the Engineers Political Education Committee (EPEC), the Sheet Metal Workers International Association Political Action League (SMWIA) and the American Federation of Government Employees' Political Action Committee (AFGE). Having found that the respondents violated the law, the Commission required the labor organizations to pay civil penalties for their violations. Refunds by the candidates, however, were not required.

District Court Ruling

In ruling that Mr. Antosh lacked standing to seek judicial review of the FEC's determination, the court referred to recent decisions in two "virtually identical" suits filed by Mr. Antosh (Antosh v. FEC, Civil Action Nos. 85-1410 and 85-2036). In those rulings, the court held that Mr. Antosh had failed to meet the eligibility requirement for standing under Article III of the Constitution. Under this requirement, an aggrieved party must "'show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the respondent.... '" Noting that the excessive contribution alleged in Mr. Antosh's suit had been made to Senatorial candidates in Massachusetts and Maryland, the court concluded that "plaintiff thus fails to satisfy the constitutional requisite of 'injury-in-fact.'"

Nor was the court persuaded by plaintiff's claim that he had suffered "injury-in-fact" in making contributions to nonconnected political committees which had, in turn, made expenditures in connection with the Sarbanes and Kennedy reelection campaigns "because he is not eligible to vote in either Massachusetts or Maryland."

Source: FEC Record, September l986, p. 5.

Antosh v. FEC, No. 86-179, (D.D.C. July 18, 1986).

ATHENS LUMBER CO. v. FEC

On October 24, 1983, the U.S. Court of Appeals for the Eleventh Circuit issued an en banc opinion in Athens Lumber Company v. FEC upholding the constitutionality of 2 U.S.C. §441b(a) of the Federal Election Campaign Act (the Act). (Civil Action No. 82-8102.) The court's decision also reversed an earlier order by the U.S. District Court for the Middle District of Georgia which had dismissed the case on grounds that: (1) plaintiffs lacked standing to bring suit under the Act; and (2) plaintiffs failed to present a justiciable controversy for the federal courts' consideration. The appeals court remanded the case to the district court for entry of a judgment in favor of the FEC.

Plaintiffs' Claims

The Athens Lumber Company and its President John P. Bondurant filed the suit with the Georgia district court on July 27, 1981. Pursuant to Section 437h(a) of the Act,1 plaintiffs asked the district court to certify their questions concerning the constitutionality of 2 U.S.C. §441b(a) to the en banc appeals court for the Eleventh Circuit. Plaintiffs claimed that this provision of the election law abridged First and Fifth Amendment rights by prohibiting corporations, labor organizations and national banks from making contributions and expenditures in connection with federal elections.

Plaintiffs further asked that the FEC be enjoined from initiating enforcement proceedings against them if the Athens Lumber Company participated in federal elections. At the same time, however, plaintiffs said that the company would not make expenditures or contributions in connection with federal elections until either: (1) 2 U.S.C. §441b was repealed or declared unconstitutional; or (2) the company obtained an opinion of counsel from the Commission stating that the proposed expenditures did not violate any federal or state law or regulation. Plaintiffs further argued that their uncertainty about a possible violation of the election law had deterred them from exercising their First and Fifth Amendments rights, thereby causing them irreparable harm.

District Court Decision

In an opinion issued on February 9, 1982, the Georgia district court dismissed the suit. (Civil Action No. 81-79-ATH.) The court held that, under Section 437h(a) of the election law, only the following types of plaintiffs had standing to bring suit: the national committee of a political party, individuals eligible to vote in Presidential elections and the FEC. Consequently, the court found that the Athens Lumber Company lacked standing to bring suit. While the court recognized that Mr. Bondurant was an eligible voter, he too lacked standing to bring suit since the corporation not Mr. Bondurant planned to make the expenditures.

Moreover, the district court held that plaintiffs had not presented a justiciable case or controversy ripe for the court's consideration. The court concluded that "it is obvious that the statute under attack in no way interferes with the way that the plaintiff corporation through its plaintiff president conducts its corporate affairs...." Similarly, the court found that Mr. Bondurant had not presented a justiciable claim because he was "free to independently expend his personal funds [in federal elections], including dividends from the corporate plaintiff without limitation." Moreover, the court found that Athens Lumber Company was only seeking an advisory opinion because the shareholders had not voted to spend any corporate funds in connection with federal elections as long as Section 441b remained in force.

Appeals Court Decision

On October 22, 1982, a three-judge panel of the Eleventh Circuit court of appeals reversed the judgment of the district court, finding that Mr. Bondurant did have standing to bring suit and to raise those issues pertaining to Athens Lumber Company's participation in federal elections. Moreover, the court found that the suit raised justiciable claims because, if Athens Lumber Company were to make contributions and expenditures in connection with federal elections, both Mr. Bondurant and the corporation would be subject to civil and criminal prosecution. The panel then certified to the en banc Eleventh Circuit eight constitutional questions adopted from appellants' complaint.

In upholding the constitutionality of Section 441b, the en banc Eleventh Circuit court of appeals stated: "Viewing the substantive constitutional issues as being controlled by the Court's unanimous opinion in Federal Election Commission v. National Right to Work Committee, 459 U.S. 197 (1982), and for the reasons there stated, we find the limitations and prohibitions of which appellants complain to be constitutional."

Supreme Court Action

On March 19, 1984, the Supreme Court dismissed an appeal brought by plaintiffs in Athens Lumber Company v. FEC. Citing a lack of jurisdiction over the appeal, the Court treated it as a request for discretionary review (i.e., a petition for a writ of certiorari) and declined the request. (U.S. Supreme Court No. 83-1190) The high Court's action left standing the earlier, en banc opinion of the U.S. Court of Appeals for the Eleventh Circuit.

Source: FEC Record, January 1984, p. 10; and May 1984, p. 7.

Athens Lumber Company, Inc. v. FEC, 531 F. Supp. 756 (M.D. Ga. 1982), rev'd, 689 F.2d 1006 (11th Cir. 1982), 718 F.2d 363 (11th Cir. 1983) (en banc), appeal dism'd, cert. denied, 465 U.S. 1092 (1984).

1 Section 437h, which provides for an expedited judicial review procedure, notes that certain designated parties "may institute such actions in the appropriate district court of the United States...to construe the constitutionality" of the Act. The district court is then directed to certify appropriate constitutional questions to the court of appeals sitting en banc.

AUSTIN v. MICHIGAN STATE CHAMBER OF COMMERCE

On March 27, 1990, the Supreme Court ruled that a Michigan state law prohibiting independent expenditures by corporations was constitutional. Reversing a Sixth Circuit U.S. Court of Appeals decision in Austin v. Michigan State Chamber of Commerce, the Court said that the state could prohibit corporations from using their treasury funds to make independent expenditures in connection with state elections.

Background

The suit originated in a 1985 district court complaint filed by the Michigan State Chamber of Commerce. The Chamber is a nonstock, nonprofit incorporated membership organization funded by dues. Three quarters of its members are for-profit corporations.

The Chamber sought to make an independent expenditure for a newspaper advertisement supporting a candidate for the state legislature. Although the Chamber had established a separate segregated fund for political purposes (which could lawfully have been used to make the expenditure), the organization wanted to purchase the ad with its general treasury funds. Finding that section 54(1) of the Michigan Campaign Finance Act appeared to prohibit independent expenditures made with corporate treasury funds, the Chamber filed suit against Richard Austin, Michigan's Secretary of State, challenging the constitutionality of the state law.

The law was upheld by the district court; the appeals court overturned the lower court's decision, finding the prohibition unconstitutional as applied to the Chamber.

Supreme Court Decision

First Amendment Issue

The Court held that the Michigan law, which permitted corporations to set up segregated political funds, was narrowly tailored to serve the compelling state interest of preventing the distortions in the political process that might result from allowing corporations to spend their general treasury funds to express their political views. "This potential for distortion," the Court said, "justifies §54(1)'s general applicability to all corporations"regardless of their size or earningsbecause all corporations "receive from the state the special benefits conferred by the corporate structure." Thus, the burden imposed on free speech by section 54(1) was
permissible.

The Court further held that the Chamber did not qualify for the constitutional exemption to the ban on corporate spending set forth in FEC v. Massachusetts Citizens for Life, Inc. (MCFL), 479 U.S. 238 (1986). In that decision, the Court addressed the federal election law's prohibition against corporate independent expenditures and found that the law was unconstitutional as applied to MCFL, a small, nonprofit corporation. The Court found that three characteristics of MCFL qualified the organization for an exception (based on the First Amendment) from the federal law's general ban on corporate spending because they negated the government's interest in preventing the threat or appearance of corruption.

The three features of MCFL that exempted it from the ban on corporate spending were that MCFL:

• Was a nonprofit corporation established to promote political ideas and not to engage in business activities;
• Had no shareholders or other persons with a claim on its assets or earnings; and
• Was not set up by a corporation and had an established policy not to accept donations from corporations or labor organizations.

With regard to the first characteristic, the Court observed that, unlike MCFL, the Chamber's activities were not limited to political and public educational purposes. The Chamber's bylaws set forth several purposes beyond politics, including, for example, the promotion of ethical business practices, the provision of group insurance for members and litigation on behalf of the Michigan business community.

The Chamber also failed to meet the second of the MCFL criteria. The Court concluded, "[W]e are persuaded that the Chamber's members are more similar to the shareholders of a business corporation than to the members of MCFL." Because the Chamber provided its members with several nonpolitical benefits and services, members had an economic disincentive to withdraw support from the organization even if they disagreed with its political views. In the MCFL case, the Court had stressed that the MCFL's lack of shareholders or other financially affiliated persons meant that members had no disincentive to disassociate from the group.

With respect to the third MCFL feature, the Court noted that here "the Chamber differs most greatly from the Massachusetts organization." While "MCFL was not established by, and had a policy of not accepting contributions from, business corporations," three fourths of the Chamber's members were business corporations, and the organization's treasury contained corporate funds in the form of membership dues. "Because the Chamber accepts money from for-profit corporations, it could, absent application of §54(1), serve as a conduit for corporate political spending," the Court concluded.

Finally, the Court rejected the Chamber's claim that, because the Michigan law did not include a similar ban on political expenditures by labor organizations, it was underinclusive. The Court noted that although unincorporated labor organizations had power to accumulate wealth, they did not have the special legal privileges enjoyed by incorporated organizations, such as limited liability and perpetual life. The Court further distinguished unions from corporations like the Chamber by pointing out that the Constitution precludes unions from having the power to compel members to support their political activities. "[T]he funds available for a union's political activities more accurately reflect members' support for the organization's views than does a corporation's general treasury," the Court said.

Fourteenth Amendment Issue

The Chamber claimed that section 54(1) violated the Equal Protection Clause of the Fourteenth Amendment because it did not apply the restrictions to unincorporated associations having the ability to raise large amounts of money or to corporations in the news media.

Having clarified that a compelling state interest in preventing corruption justified the restrictions on political activity by corporations, the Court rejected the Chamber's arguments with respect to the application of the prohibition to unincorporated entities. Corporate status, the Court said, was a state-granted privilege that facilitated the amassing of wealth, the source of the threat of corruption.

The Court also affirmed that the limited "media exception" in the state law for news stories and editorials disseminated by corporations operating in any of the news media did not constitute a breach of equal protection because of the unique public informational and educational role that such organizations play. "The media exception ensures that the Act does not hinder or prevent the institutional press from reporting on and publishing editorials about newsworthy events."

Source: FEC Record, May 1990, p. 5.

Austin v. Michigan State Chamber of Commerce, 856 F.2d 783 (6th Cir. 1988), rev'd, 494 U.S. 652, 110 S. Ct. 1391 (1990).

BARNSTEAD FOR CONGRESS COMMITTEE v. FEC

On June 5, 1979, the U.S. District Court for the District of Columbia granted summary judgment to the FEC and dismissed a complaint which had been filed by the Barnstead Committee (the Committee) against the FEC, WGBH Educational Foundation (Public Broadcasting TV, Channel 2), the Corporation for Public Broadcasting and the Quaker Oats Corporation. The Committee had filed suit on January 1, 1979, disputing the Commission's dismissal of a complaint which the Committee had filed with the Commission on November 2, 1978. The Committee requested that the court reverse the Commission's determination.

The Committee had alleged in its complaint, and repeated in its suit, that the corporate sponsorship of and payment for production and promotional costs of a televised film about House Speaker Tip O'Neill (Mr. Barnstead's opponent for a House seat) was in violation of 2 U.S.C. §441b. The Committee contended that, since Congressman O'Neill was officially a candidate at the time the film was broadcast, the film was "...in essence a campaign film, which enhanced the political standing of one candidate over another." Costs incurred in producing and broadcasting the film, therefore, were expenditures in connection with a federal election. The FEC, on the other hand, maintained that the costs incurred by WGBH Educational Foundation, the Corporation for Public Broadcasting and the Quaker Oats Corporation, in sponsoring the film, were exempt communication costs. Under Section 431(f)(4)(A), the Act exempts from the definition of expenditure certain communication costs, which include "any news story, commentary or editorial distributed through the facilities of any broadcasting station, newspaper, magazine, or other periodical publication, unless such facilities are owned or controlled by any political party, political committee or candidate." In dismissing the suit, the court upheld the Commission's determination that the costs involved in sponsoring the broadcast were, in fact, communication costs and not expenditures under the Act.

Source: FEC Record, January 1980, p. 5.

BOULTER v. FEC

On August 3, 1988, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the FEC's July 26 decision to certify public funds for the general election campaign of Democratic Presidential nominee Michael S. Dukakis and his Vice Presidential running mate Lloyd M. Bentsen.

The petitioners, Congressman Beau Boulter, the Republican Senatorial candidate from Texas, and the National Republican Senatorial Committee, a national committee of the Republican party, had submitted their petition to the appeals court after the FEC had dismissed their request to deny public funding to the Democratic Presidential ticket. In its expedited review of the petition, the court decided to dismiss as moot the petitioners' emergency motion for a stay of the certification because, on July 27, the U.S. Treasury had disbursed the public funds to the Democratic Presidential and Vice Presidential nominees. Nor did the court grant petitioners' request for an emergency injunction barring the Democratic ticket from expending the grant. The court held that "petitioners have failed to carry the 'burden of showing that exercise of the court's extraordinary injunctive powers is warranted.'" Cuomo v. Nuclear Regulatory Commission, 722 F.2d 972, 974 (D.C. Cir. 1985).

Finally, the court summarily affirmed the agency's certification of funds to the Democratic ticket. The appeals court noted that its standard for reviewing the FEC's decision was whether the FEC's action was "arbitrary, capricious or contrary to law." See In re Carter-Mondale, 642 F.2d at 542. Based on this standard, the court concluded that "petitioners' allegations are insufficient on their face to warrant a revocation of the certification."

Source: FEC Record, September 1988, p. 7.

Boulter v. FEC, No. 88-1541 (D.C. Cir. 1988) (unpublished order).

BRANSTOOL v. FEC

On April 4, 1995, the U.S. District Court for the District of Columbia granted defendant's motion for summary judgment. This decision sustains the Commission's dismissal of plaintiffs' administrative complaint.

Background

The origins of this case are rooted in the 1988 Presidential contest between Republican candidate George Bush and Democratic candidate Michael Dukakis. In the course of the Presidential race, the National Security Political Action Committee (NSPAC) financed the production and airing of the "Willie Horton" ad. This ad attacked the Democratic candidate by blaming then Massachusetts Governor Michael Dukakis for the violent crimes committed by a convict while on furlough from a state prison.

Plaintiffs filed an administrative complaint with the FEC in May 1990, alleging that the NSPAC coordinated the production and airing of the Willie Horton ad with the Bush campaign. Under the Federal Election Campaign Act (the Act), a candidate running in a Presidential general election who accepts public funding may not accept contributions. The Bush campaign accepted public funding. If, as plaintiffs claimed, the Horton ad had been coordinated, then it would have been an in-kind contribution, in violation of 26U.S.C. §9003(b)(2). The complaint thus hinged on the issue of whether the Horton ad was a coordinated in-kind contribution, and therefore illegal, or a permissible independent expenditure as defined under 2 U.S.C. §431(17).1

After examining the complaint, the Commission found reason to believe that the Bush campaign and the NSPAC had violated the Act, but after a limited investigation into the matter, the Commission deemed the evidence inconclusive and decided to take no further action on the matter. Plaintiffs' complaint was subsequently dismissed.

This led plaintiffs to file this suit in January 1992, claiming that the FEC had abused its discretion in not conducting a comprehensive investigation and had violated the Act by dismissing plaintiffs' complaint. Plaintiffs noted that among the FEC investigation's findings were a record of a June 1988 telephone conversation between the Bush campaign's chief media advisor and a NSPAC media consultant, and documentation showing that a media technician worked for both NSPAC and the Bush campaign. Plaintiffs contended that these findings were proof of coordination.

The Court's Decision

In addressing plaintiffs' challenge to the Commission's decision to limit the investigation into their complaint, the court saw no reason to depart from the general policy of giving broad deference to agency prosecutorial decisions.

The court held that it could set aside FEC statutory interpretations as "impermissible" only if they have no reasonable basis. The court concluded that the factual conclusions underpinning the Commission's decision were "sufficiently reasonable" to warrant the court's deference.

For instance, in dismissing the complaint, the Commission concluded that the inference of coordination created by the telephone call was rebutted by other findings. With regard to the media technician's dual employment, the Commission reasonably concluded that he performed technical tasks for the two committees and had no role in substantive or strategic decisions.

Source: FEC Record, June 1995, p. 12.

Branstool v. FEC, No. 92-0284 (D.D.C. Apr. 4, 1995).

1 An independent expenditure is an expenditure made without any coordination with a candidate's campaign for a communication which expressly advocates the election or defeat of a clearly identified candidate for federal office.

BREAD PAC v. FEC

This suit, filed by the National Lumber and Building Dealers Association and the National Restaurant Association (trade associations) and by Bread Political Action Committee, Restaurateurs Political Action Committee and Lumber Dealers Political Action Committee (separate segregated funds of trade associations), challenged the constitutionality of 2 U.S.C. §441b(b)(4)(D). (Civil Action No. 77-C-947.) This provision of the election law restricts solicitations by a trade association or its separate segregated fund to the stockholders, executive and administrative personnel (and their families) of member corporations which have given prior approval for such solicitations to occur, and limits member corporations to approval of one trade association per calendar year.

District Court Ruling

On April 5, 1977, plaintiffs asked the U.S. District Court for the Northern District of Illinois to enjoin the FEC from enforcing 441b(b)(4)(D) or, in the alternative, to certify constitutional questions to the appeals court, pursuant to 2 U.S.C. §437h. (Section 437h allows for expedited handling of constitutional challenges to the Act and a right of direct appeal to the Supreme Court.)

The district court ruled in September 1977 that plaintiffs lacked standing to bring suit under the Act's expedited review procedures. The court held that only the following types of plaintiffs had standing to bring suit under 2 U.S.C. §437h(a): the national committee of a political party, individuals eligible to vote in Presidential elections and the FEC.

Appeals Court: First Ruling

On January 12, 1979, the U.S. Court of Appeals for the Seventh Circuit, sitting en banc, overturned the district court's decision in response to an interlocutory appeal filed by plaintiffs. The appeals court ruled that plaintiffs did have standing to bring suit under the expedited review procedures. It remanded the case to the district court for further fact finding and certification of the constitutional questions. These constitutional challenges were then certified to the appeals court for its decision:

• Whether 2 U.S.C. §441b(b)(4)(D), both facially and as applied, infringes plaintiffs' right of assembly guaranteed by the First Amendment...?
• Whether 2 U.S.C. §441b(b)(4)(D), both facially and as applied, deprives plaintiffs of liberty without due process of law in violation of the Fifth Amendment...?
• Whether the failure of the Federal Election Campaign Act, as amended, 2 U.S.C. §431 et seq., to define the term 'solicitation' infringes plaintiffs' right of assembly guaranteed by the First Amendment...or deprives plaintiffs of liberty without due process of law in violation of the Fifth Amendment...?
• The failure of the Federal Election Campaign Act, as amended, 2 U.S.C. §431 et seq., to define the term 'trade association' as used in 2 U.S.C. §441b(b)(4)(D), violates the due process clause of the Fifth Amendment...?

Appeals Court: Second Ruling

As to the issue of plaintiffs' standing to bring suit under 2 U.S.C. §437h(a), the appeals court declined to overrule its earlier decision that Section 437h(a) did not limit parties who may utilize the expedited review procedures.

As to constitutional challenges brought by plaintiffs, the court rejected their claim that Section 441b (b)(4)(D) infringed on their First Amendment rights by requiring that plaintiffs obtain the prior approval of a member corporation to solicit the corporation's stockholders, executive and administrative personnel and their families. The court found that there had been no showing that this restriction on trade association solicitations "...has had or could have any prior restraining effect whatsoever on the free flow of political information and opinion by trade associations or their political action committees." The court noted that plaintiffs were "...free to solicit any individual...to join their trade association." Moreover, once he or she became a member of the association, the individual could "...be solicited for contributions without limit under §441b (b)(4)(D)." Thus, the court concluded that the challenged provision was "...a very narrowly drawn aspect of a statutory scheme carefully designed to balance a compelling governmental interest [i.e., the prevention of the appearance or actuality of corruption in federal elections caused by large contributions] and jealously guarded First Amendment freedoms."

The court also rejected plaintiffs' claim that §441b(b)(4)(D) unconstitutionally discriminated against trade associations. The court found the exact opposite to be true and concluded that plaintiffs' argument was "...largely premised...on a misreading of the statute." Specifically the court noted that, although trade associations may not solicit contributions from a member corporation's employees without the corporation's prior approval, trade associations are granted more avenues for solicitation than are corporations. "Incorporated trade associations, because they are corporations, have precisely the same solicitation rights under paragraphs (A) and (B) [of 2 U.S.C. §441b(b)(4)] as do others corporations.... Moreover, trade associations are also membership organizations or corporations without capital stock and are therefore provided precisely the same solicitation rights as they have under paragraph (C) [i.e., solicitation of their individual members].... Finally, trade associations are provided under paragraph
(D) with an additional group of potential solicitees [i.e., the stockholders, executive and administrative employees of corporate members and their families]."

The court also rejected plaintiffs' claims that in failing to define the terms "solicitation" and "trade association," §441b(b)(4)(D) abridged their First and Fifth Amendment rights. The court found that the term "solicitation" had a widely accepted meaning and that rules and statutes using the term had been uniformly upheld. The court further held that the Commission's advisory opinions, which had ruled on whether certain communications constituted solicitations under the Act, were not inconsistent. Rather, the opinions (AO's 1979-13 and 1979-66) had ruled on different types of communications by corporate and trade association separate segregated funds. Similarly, the court noted that the FEC had adhered to the "plain and ordinary meaning of trade association" as defined by Commission regulations at 11 CFR 114.8(a) and (g)(1).

Supreme Court Ruling

In an opinion issued on March 8, 1982, in Bread Political Action Committee v. FEC (Supreme Court No. 80-1481) the Supreme Court ruled that plaintiffs lacked standing to bring suit under 2 U.S.C. §437h, which allows for expedited handling of constitutional challenges to the Act and a right of direct appeal to the Supreme Court. The Court remanded the suit to the appeals court without ruling on the plaintiffs' constitutional challenges. The Court's ruling overturned a decision by the appeals court for the Seventh Circuit while upholding an earlier decision by the Northern Illinois district court.

The Court ruled that plaintiffs lacked standing to bring suit under Section 437h because they did not fall within the categories of qualified plaintiffs enumerated in the provision. The Court held that "the plain language of §437h controls its construction, at least in the absence of 'clear evidence,'...of a 'clearly expressed legislative intention to the contrary....'" The Court concluded that "the appellants, however, fall far short of providing 'clear evidence' of a 'clearly expressed legislative intention' that the unique expedited procedures of §437h be afforded to parties other than those belonging to the three listed categories."

Nor did the Court find merit to plaintiffs' argument that, since Congress had expressly extended the judicial review procedures of Section 437h to cover all constitutional questions about any provision of the Act, Congress had also intended to broaden the categories of plaintiffs eligible to file suit under §437h.

Moreover, the Court refuted plaintiffs' contention that, while Congress had specified three eligible classes of plaintiffs to remove any doubts about their standing to bring suit, it had not intended to exclude other classes of plaintiffs. To the contrary, the Court concluded that Congress "went to the trouble of specifying that only two precisely defined types of artificial entity and one class of natural persons could bring these actions." The Court noted, however, that its ruling did not affect the right of parties involved in FEC enforcement actions to challenge, under 2 U.S.C. §437g, the constitutionality of any provision of the Act and to be afforded expedited review.

Source: FEC Record, May 1981, p. 6; and May 1982, p. 6.

Bread Political Action Committee v. FEC, 591 F.2d 29 (7th Cir. 1979), 635 F.2d 621 (7th Cir. 1980) (en banc), rev'd, 455 U.S. 577, (1982), on remand, 678 F.2d 46 (7th Cir. 1982) (en banc) (remanding to District Court).

BROWN v. FEC

On November 20, 1981, the U.S. Court of Appeals for the District of Columbia Circuit issued a judgment affirming an earlier decision by the district court in Archie E. Brown v. FEC (Civil Action No. 80-2108). The district court's decision had upheld the FEC's dismissal of the complaint plaintiff had filed against the International Brotherhood of Teamsters, Chauffers, and Warehousemen and Helpers of America (the Teamsters). In his complaint, plaintiff alleged that Local 745 of the Teamsters had violated 2 U.S.C. §441b(b)(3)(A) by attempting to coerce him to contribute to DRIVE (the Democratic Republican Independent Voter Education), the separate segregated fund of the Teamsters. Plaintiff alleged that he was subsequently denied membership in Local 745 because he had refused to contribute to, or join, DRIVE. Plaintiff claimed that the FEC's dismissal of his complaint was contrary to law.

In upholding the FEC's determination, the district court said that the General Counsel's Report to the Commission indicated that "...plaintiff's membership in Local 745 was denied because his union dues were unpaid, not because he refused to contribute to DRIVE." Moreover, the district court held that the General Counsel's Report, by itself, was a sufficient record for the court's review of the Commission's determination in the complaint. In appealing the district court's decision, plaintiff contended, however, that the General Counsel's Report alone, without a separate statement of the Commission's reasons for dismissing the complaint, afforded "...an inadequate basis for informed judicial review."

In its Memorandum affirming the district court's decision, the appeals court found no merit in plaintiff's assertion. The appeals court cited the Supreme Court's decision in FEC v. Democratic Senatorial Campaign Committee, which held that the General Counsel's Report constituted sufficient grounds to dismiss an administrative complainteven if the Report were not expressly adopted by the Commission.

The appeals court concluded that the General Counsel's Report to the Commission recommending dismissal of Brown's complaint was sufficiently reasonable, "...particularly when considered in the context of the large discretion the Commission has to determine whether or not a civil violation of the Act has occurred."

Source: FEC Record, January 1982, p. 6.

Brown v. FEC (D.D.C. July 17, 1980) (unpublished opinion), aff'd mem., 672 F.2d 893 (D.C. Cir. 1981), cert. denied, 457 U.S. 1111 (1982)

BUCHANAN v. FEC

On April 18, 1996, the U.S. Court of Appeals for the District of Columbia Circuit granted a joint stipulation to dismiss this case; the parties settled this matter out of court.

Patrick J. Buchanan and his publicly-funded 1992 Presidential campaign committee had petitioned this court to review the FEC's final repayment determination. See the November 1995 Record, page 8, for a summary of the suit filed by plaintiffs. See the October 1995 Record, page 9, for the FEC's final repayment determination.

The Buchanan committee made most of the repayment immediately from an escrow fund previously established, and agreed to pay the remainder of the amount ordered by the FEC, with full interest, within 6 months.

Source: FEC Record, June 1996, p. 4.

BUCKLEY v. VALEO

On January 30, 1976, the Supreme Court issued a per curiam opinion in Buckley v. Valeo, the landmark case involving the constitutionality of the Federal Election Campaign Act of 1971 (FECA), as amended in 1974, and the Presidential Election Campaign Fund Act.

The Court upheld the constitutionality of certain provisions of the election law, including:

• The limitations on contributions to candidates for federal office (2 U.S.C. §441a);
• The disclosure and recordkeeping provisions of the FECA (2 U.S.C. §434); and
• The public financing of Presidential elections (Subtitle H of the Internal Revenue Code of 1954).

The Court declared other provisions of the FECA to be unconstitutional, in particular:

The limitations on expenditures by candidates and their committees, except for Presidential candidates who accept public funding (formerly 18 U.S.C. §608(c)(1)(C-F));

• The $1,000 limitation on independent expenditures (formerly 18 U.S.C. §608e);
• The limitations on expenditures by candidates from their personal funds (formerly 18 U.S.C. §608a); and
• The method of appointing members of the Federal Election Commission (formerly 2 U.S.C. §437c(a)(1)(A-C)).

Background

On January 2, 1975, the suit was filed in the U.S. District Court for the District of Columbia by Senator James L. Buckley of New York, Eugene McCarthy, Presidential candidate and former Senator from Minnesota, and several others.1 The defendants included Francis R. Valeo, Secretary of the Senate and Ex Officio member of the newly formed Federal Election Commission, and the Commission itself.2 The plaintiffs charged that the FECA, under which the Commission was formed, and the Presidential Election Campaign Fund Act were unconstitutional on a number of grounds.

On January 24, 1975, pursuant to Section 437h(a) of the FECA, the district court certified the constitutional questions in the case to the U.S. Court of Appeals for the District of Columbia Circuit. On August 15, 1976, the appeals court rendered a decision upholding almost all of the substantive provisions of the FECA with respect to contributions, expenditures and disclosure. The court also sustained the constitutionality of the method of appointing the Commission.

On September 19, 1975, the plaintiffs filed an appeal with the Supreme Court, which reached its decision on January 30, 1976.

Supreme Court Decision

Contribution Limitations

The appellants had argued that the FECA's limitations on the use of money for political purposes were in violation of First Amendment protections for free expression, since no significant political expression could be made without the expenditure of money. The Court concurred in part with the appellants' claim, finding that the restrictions on political contributions and expenditures "necessarily reduce[d] the quantity of expression by restricting the number of issues discussed, the depth of the exploration, and the size of the audience reached. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money." The Court then determined that such restrictions on political speech could only be justified by an overriding governmental interest.

The Court upheld the contribution limitations in the FECA,3 stating that they constituted one of the election law's "primary weapons against the reality or appearance of improper influence stemming from the dependence of candidates on large campaign contributions" (the other weapon being the disclosure requirements). Although it appeared that the contribution limitations did restrict a particular kind of political speech, the Court concluded that they "serve[d] the basic governmental interest in safeguarding the integrity of the electoral process without directly impinging upon the rights of individual citizens and candidates to engage in political debate and discussion."

The Court found no evidence to support the appellants' allegations that the contribution limitations discriminated against nonincumbent candidates. With respect to the appellants' charge that the contribution limitations discriminated against minor and third parties and their candidates, the court noted that the FECA, "on its face," treated all candidates and parties equally. Furthermore, the Court said there was a legitimate argument that the limitations, in fact, appeared to benefit minor parties, since major parties and candidates received a greater proportion of their funding from large contributions.

The appellants had additionally challenged the limitations on certain expenses incurred by volunteers working on behalf of candidates or political committees. While the FECA placed no limits on most unreimbursed volunteer activities, it did limit unreimbursed travel expenses and certain costs of organizing campaign functions. Beyond these limits the costs were considered in-kind contributions (§431(8)(B)(i, ii, and iv)). The Court upheld the provisions for limited spending by volunteers, stating that they were a "constitutionally acceptable accommodation of Congress' valid interest in encouraging citizen participation in political campaigns while continuing to guard against the corrupting potential of large financial contributions to candidates."

Expenditure Limitations

In contrast to its ruling on contribution limitations, the Court found that the expenditure ceiling in the FECA imposed "direct and substantial restraints on the quantity of political speech" and invalidated three expenditure limitations as violations of the First Amendment.

The overall limitations on expenditures by federal candidates and their committees were struck down by the Court. The appellees had argued that these limitations (formerly 18 U.S.C. §608(c)) served a public interest by equalizing the financial resources of candidates, but the Court determined that the amount of money spent in particular campaigns must necessarily vary, depending on the "size and intensity" of the support for individual candidates. Furthermore, expenditure ceilings "might serve not to equalize the opportunities of all candidates but to handicap a candidate who lacked substantial name recognition or exposure of his views before the start of the campaign." The appellees had also claimed that the expenditure limitations would reduce the overall cost of campaigning, and they cited statistics demonstrating the dramatic increases in campaign spending that had occurred nationwide in preceding years. The Court decided, however, that "[t]he First Amendment denies government the power to determine that spending to promote one's political views is wasteful, excessive or unwise." The Court ruled, therefore, that the limitations on overall expenditures were unconstitutional.

The appellants had charged that the $1,000 per candidate annual limitation on independent expendituresi.e., expenditures made by persons "relative to a clearly identified candidate...advocating the election or defeat of such candidate" (formerly 18 U.S.C. §608(e)(1))was both unconstitutionally vague and an excessive hindrance on First Amendment rights of free expression. The Court resolved the vagueness question by reading "relative to" to mean "advocating the election or defeat of such candidate" in the same subsection, and by construing the provision to apply only to "expenditures for communications that in express terms advocate[d] the election or defeat of a clearly identified candidate for Federal office." While the Court of Appeals had accepted the appellees' argument that the provision was necessary to prevent circumvention of the contribution limitations, the Supreme Court found that the "governmental interest in preventing corruption and the appearance of corruption"which justified the contribution limitationswas not sufficient to warrant the limitation on independent expenditures. If expenditure ceilings were to apply only to situations of express advocacy, the limitation would be easily circumvented by "expenditures that skirted the restriction on express advocacy of election or defeat but nevertheless benefited" a candidate. Moreover, the Court pointed out, abuses that might be generated by large independent expenditures did not appear to pose the same threat of corruption that large contributions posed since the "absence of prearrangement or coordination of the expenditure with the candidate or his agent alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidates." Thus finding that no substantial governmental interest was served by the limitation on independent expenditures, the Court concluded that such expenditures were protected as political discussion and expression under the First Amendment.

Regarding the limitations on a candidate's use of personal funds, the Court found that the provisions unconstitutionally interfered with the protected and valued right of an individual "to engage in the discussion of public issues and vigorously and tirelessly to advocate his own election." The Court continued that no governmental interest supported the limit on such personal funds. To the contrary, the Court noted that "the use of personal funds reduces a candidate's dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse to which the contribution limitations are directed."

Finally, the Court added that its invalidation of the expenditure limitations was severable from Subtitle H, which provides for the public financing of Presidential elections. The limitations on expenditures by Presidential candidates who received public funds was legitimate since the acceptance of public funds was voluntary. Therefore, with regard to publicly financed elections, the consequent societal and governmental benefits weighed more heavily in favor of expenditure
limitations.

Reporting and Disclosure Requirements

The appellants had sought a blanket exemption from the public disclosure provisions for all minor parties, claiming that contributors to minor parties, unlike contributors to the Republican and Democratic Parties, were more vulnerable to threats, harassment and reprisal as a result of the public disclosure of their names. The appellants claimed the provisions constituted a violation of their rights to free association under the First Amendment and to equal protection under the Fifth Amendment. Recognizing that "compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment," the Court nevertheless ruled that the Act's reporting and disclosure provisions were justified by governmental interest in (1) helping voters to evaluate candidates by informing them about the sources and uses of campaign funds, (2) deterring corruption and the appearance of it by making public the names of major contributors, and (3) providing information necessary to detect violations of the law.

The Court acknowledged the potential disadvantage for minor parties that could result from the public disclosure provisions of the law, but it noted that none of the minor parties that were appellants in this suit had demonstrated that their contributors had been injured by the disclosure provisions. Therefore, the Court ruled a blanket exemption unnecessary. The Court left open the possibility, however, that minor and new parties might successfully claim an exemption from FECA disclosure requirements by showing proof of injury.

Presidential Election Campaign Fund

The Court upheld the constitutionality of Subtitle H of the Internal Revenue Code, which established the public financing of Presidential campaigns through a voluntary income tax checkoff. The Court determined that the appellants' claim that Congress violated the First Amendment in not allowing taxpayers to earmark their $1.00 checkoff to any candidate or party of their choice was not sufficient to invalidate the law. In the Court's opinion the checkoff constituted an appropriation by Congress, and as such it did not require outright taxpayer approval. Furthermore, "every appropriation made by Congress uses public money in a manner to which some taxpayers object."

The appellants had also argued, by analogy, that just as Congress may not subsidize or burden religion under the freedom of religion clause of the First Amendment, the freedom of speech clause prohibits it from financing particular political campaigns. The Court ruled the analogy inapplicable, however, finding that Subtitle H furthered rather than abridged political speech because its purpose was "to facilitate and enlarge public discussion and participation in the electoral process."

The appellants further claimed that the public funding provisions violated the Fifth Amendment's due process clause, arguing that the eligibility requirements for public funds were comparable to unconstitutionally burdensome ballot access laws. The Court found no merit in the argument; the denial of public funds to candidates did "not prevent any candidate from getting on the ballot or prevent any voter from casting a vote for the candidate of his choice."

"In addition," the Court said, "the limits on contributions necessarily increase the burden of fundraising, and Congress properly regarded public financing as an appropriate means of relieving major-party Presidential candidates from the rigors of soliciting private contributions."

The Court also rejected appellants' contention that the public financing provisions discriminated against minor and new party candidates, in violation of the Fifth Amendment. Specifically, the appellants had argued that Subtitle H favored major parties and their nominees by granting them full public funding for their conventions and general election campaigns, while minor and new parties and their candidates received only partial public funding according to a formula based on percentage of votes received.

Similarly, the appellants challenged the provision that restricted the payment of primary matching funds to only Presidential candidates who met certain requirements. These requirements included a provision for payments to candidates who had raised a minimum amount of contributions in at least twenty states (26 U.S.C. §9033(b)(3-4)). The Court found that such requirements for receiving public funds were reasonable; rather than preventing small parties from receiving public financing, the law only required them to demonstrate that they had a minimum level of broad-based support in order to qualify for federal subsidies. The Court concluded, "Any risk of harm to minority interests...cannot overcome the force of the governmental interests against the use of public money to foster frivolous candidacies, create a system of splintered parties, and encourage unrestrained factionalism." Furthermore, the Court noted that the advantage of receiving public financing was balanced by the requirement to adhere to strict expenditure limitations. As mentioned above, the Court upheld the constitutionality of expenditure limits as they applied to candidates and parties receiving public funds.

Appointment of the Commissioners

The appellants had challenged the method of appointing the six members of the Commission, as specified in the FECA, which provided that the President, the Speaker of the House of Representatives and the President pro tempore of the Senate each appoint two members. Arguing that the FEC's powers were executive rather than legislative, the appellants contended that the Congressional appointment of Commissioners violated the separation of powers principle embodied in the appointments clause of Article II of the Constitution. The Supreme Court determined that the appointments clause permitted only the President, with the advice and consent of the Senate, to appoint officers to exercise such executive authority as the Commission was granted. The Court ruled that the Commission, as it was then constituted, could not exercise its authority to enforce the law, conduct civil litigation, issue advisory opinions or determine eligibility for public funds, because these functions could not properly be regarded as legislative. The Commission's informational and auditing powers, however, were found to be legislative in nature, and therefore constitutional.

The Court accorded de facto validity to all acts of the Commission prior to the ruling and granted a 30-day stay of judgmentduring which time the agency could exercise all of the authorities given to it under the FECAso that Congress could reconstitute the Commission according to the provisions of Article II of the Constitution. The initial 30-day stay expired on February 29, 1976, but was extended to March 22. On March 23 the FEC's executive powers were suspended, and they remained suspended until May 21, when the Commissioners were reappointed by the President pursuant to the FECA Amendments of 1976, Pub. L. No. 94-283 (May 5, 1976).

Buckley v. Valeo, 387 F. Supp. 135 (D.D.C. 1975) (application for three judge district court denied: constitutional questions certified to the Court of Appeals), 519 F.2d 817 (D.C. Cir. 1975) (per curiam) (motion to remand for the purpose of certifying constitutional questions granted), 519 F.2d 821 (D.C. Cir. 1975) (per curiam) (certified questions answered), 401 F. Supp. 1235 (D.D.C. 1975) (relevant portions of the opinion of the D.C. Cir. adopted), aff'd in part, rev'd in part, 424 U.S. 1 (1976), on remand, 532 F.2d 187 (1976 D.C. Cir.) (en banc), (modifying answers to constitutional questions certified by the district court).

1 Along with Buckley and McCarthy, the appellants in this suit included Congressman William A. Steiger of Wisconsin, Mr. Stewart Rawlings Mott (a major contributor to various political committees), the Committee for a Constitutional PresidencyMcCarthy '76, the Conservative Party of the State of New York, the New York Civil Liberties Union, the American Conservative Union, Human Events, Inc., Conservative Victory Fund, the Mississippi Republican Party and the Libertarian Party.

2The other appellees included the Clerk of the House of Representatives W. Pat Jennings, the Comptroller General Elmer B. Staats, and the Attorney General.

3The contribution limitations in the FECA included a $1,000 per candidate, per election, ceiling on contributions by individuals and political committees, a $5,000 per candidate, per election, ceiling on contributions by committees which qualify as multicandidate committees, a $25,000 annual ceiling for all contributions by any individual, and limitations on contributions to political party committees.

BUSH-QUAYLE '92 PRIMARY COMMITTEE v. FEC

On January 14, 1997, the U.S. Court of Appeals for the District of Columbia Circuit remanded this case to the FEC and asked it to explain why the Commission departed from precedent, or remedy that departure, when it required the Bush-Quayle '92 Primary Committee to repay $323,832 of the federal matching funds it received.

Background

As required by law, the FEC, at the end of the 1992 election cycle, audited former President George Bush's 1992 campaign. The audit included the primary committee, the Bush-Quayle '92 General Committee and the legal and accounting arm of the general election committee, the Bush-Quayle '92 Compliance Committee. The latter two committees are party to this lawsuit.

During the 1992 election, the primary committee received nearly $10.7 million in public funds through the Matching Payment Act. Once Mr. Bush and his running mate, Dan Quayle, had received the Republican nomination for President and Vice President, the general committee received $55.2 million in public funds.

The Law

The Matching Payment Act provides partial public fundingpaid for through the $3 check-off on federal tax formsto Presidential primary candidates who meet certain qualifications. Candidates who receive public funding must agree to limit expenditures to "qualified campaign expenses," i.e., those expenses that are incurred by the candidate in connection with his or her campaign for nomination and that do not violate state or federal law. 26 U.S.C. §9032(9)(A).

The Commission also must conduct an audit of every publicly funded campaign after it ends and require the committee to repay the U.S. Treasury for any nonqualified campaign expenses that were paid for with public funds. The Commission also can require a committee to repay any matching funds that it received in excess of what the law allows. 26 U.S.C. §9038(b)(1).

Final Repayment Determination

The FEC issued a final repayment determination to the primary committee on August 17, 1995, having determined that $409,123 in expenses incurred by the primary committee were not qualified primary campaign expenses because they had, in fact, been made for the benefit of the general election campaign as well.

The expenses in question included disbursements for direct mailings and political advertisements and for equipment and materials sent to the Bush campaign's national headquarters. All these disbursements took place before August 20, 1992the day Mr. Bush was nominated by his party to run for President. Concluding that expenses benefited both the primary and general campaigns, the Commission determined that half of the expenses should be assigned to the general election committee and the other half to the primary committee.

The FEC calculated the repayments as follows:

• The primary committee would pay its share of the nonqualified campaign expenses $106,979 plus an additional $216,853 that the FEC determined it had received in excess of the matching fund allowance.
• As a result of reassigning half of the expenses in question to the general committee, the FEC found that the general committee had exceeded its expenditure limit by $182,785. The FEC recommended, but did not order, that the compliance fund reimburse the general committee for this overspending. That would resolve the general committee's excess expenditure problem.

Expenses in Connection With Primary

The Bush-Quayle committees challenged the FEC's final repayment determination in court, saying the Commission should have used a "bright-line" rule and allocated expenses based solely on whether they were incurred before the August 20 Presidential nomination or after the party's Presidential contender had been named.

The Commission had rejected this approach, arguing that whether an expenditure is a primary qualified expenditure depends on both its timing and nature. To qualify, the Commission had explained, the expense must be primarily in connection with the primary. The committees had argued that any connection to the primary campaign would qualify an expense fully as a qualified primary campaign expenditure.

Finding that arguments from both the agency and the committees were defensible, the court upheld the FEC's interpretation, based on Chevron U.S.A. Inc. v. NRDC.1 That case requires that, where statutory language is ambiguous, courts must uphold the agency's interpretation so long as it is reasonable. The court added, however, that another committee objection to the Commission's decision merited further consideration.

Arbitrary and Capricious

The committees charged that the FEC had acted "arbitrarily and capriciously" because it had treated expenditures of the Bush-Quayle 1992 campaign differently than similar expenditures of the 1984 Reagan-Bush campaigns.

In the 1984 election, the committees said, the FEC had concluded that certain pre-nomination expenditures by the Reagan-Bush Primary Committee were primary expenses despite the fact that some benefited the general election campaign.

The FEC responded that the two cases were distinguishable from each other and thus were treated differently. It also said that in the Reagan audit, the FEC had not adopted a "bright line" test based on the date of the candidate's nomination.

The court found the FEC's response inadequate. Further, the court said: "An agency interpretation that would otherwise be permissible is, nevertheless, prohibited when the agency has failed to explain its departure from prior precedent."2

The court noted further that the FEC's determination was especially problematic given the fact that the agency had adopted new regulations two months before making its repayment determination concerning the Bush-Quayle campaign, but had not applied the approach embodied in those regulations to that determination. The court said that the new rules use a "bright-line" approach to determine whether expenses should be attributed to primary or general elections.

The court remanded the matter to the FEC either to justify its approach or to reconsider the repayment determination.

Source: FEC Record, March 1997, p. 5.

Bush-Quayle '92 Primary Committee v. FEC, 104 F.3d 448 (D.C. Cir. 1997).

1 Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 844 (1984).

2 See Interstate Quality Servs. Inc. v. RRB, 83 F. 3d 1463, 1465 (D.C. Cir. 1996); ANR Pipeline Co. v. FERC, 870 F. 2d 717, 723 (D.C. Cir. 1989); Greater Boston Tel. Corp. v. FCC, 444 F. 2d 841, 852 (D.C. Cir.), cert denied, 403 U.S. 923 (1971).

CALIFORNIA MEDICAL ASSOCIATION v. FEC

This suit was precipitated by an FEC enforcement proceeding in which the California Medical Association (CMA), an unincorporated professional association, and CALPAC, a political committee, were respondents. On April 19, 1979, the FEC had found "probable cause to believe" CMA had violated 2 U.S.C. §441a(a)(1)(C) by making contributions exceeding $5,000 to CALPAC, which CALPAC had accepted. When it was unable to reach a conciliation agreement with the respondents, the Commission filed suit against them on May 22, 1979, in the U.S. District Court for the Northern District of California (Civil Action No. C79-U97-WHO).1

Claims Filed Against Commission

Anticipating the FEC enforcement action, CMA filed a separate suit against the FEC on May 7, 1979, challenging the constitutionality of those provisions of the Act it had allegedly violated. (Civil Action No. 79-4426) Specifically, CMA asked the district court to certify the following constitutional questions to the U.S. Court of Appeals for the Ninth Circuit:

• Whether 2 U.S.C. §441a(a)(1)(C), which limits contributions to multicandidate committees to $5,000 per year, per contributor, abridges First Amendment rights of free speech and association. In particular, does §441a(a)(1)(C) unconstitutionally limit contributions by an unincorporated association (CMA) to a political committee (CALPAC) for the purpose of establishing, administering or soliciting contributions to the committee; and
• Whether 2 U.S.C. §441b(b)(2)(C), which permits labor organizations and corporations (but not unincorporated associations) to pay costs of establishing, administering and soliciting funds to a separate segregated fund, abridges the equal protection provisions of the Fifth Amendment.

Ruling of Appeals Court

In its opinion of May 23, the appeals court, sitting en banc, rejected all the constitutional claims asserted by CMA. Relying on the Supreme Court's decision in Buckley v. Valeo, the court found that the contribution limits imposed only inconsequential restrictions on rights of free speech. The court observed that these restrictions were minimal compared to the "potent alternative means of expression" available to unincorporated associations like CMA. It noted that CMA, CALPAC and its members could make contributions and expenditures in connection with federal elections, as long as the per-candidate and per-committee contribution limits were respected. Further, CMA, its members and CALPAC could make unlimited independent expenditures to express their political views. Moreover, the court concluded that the contribution limits were supported by a compelling governmental interest, namely preventing the circumvention of the contribution limits, which were intended to minimize both the actuality and appearance of corruption in federal political campaigns.

The court also found that the Act did not abridge Fifth Amendment rights by discriminating against political activities of unincorporated associations. To the contrary, the court concluded that unincorporated associations like CMA are regulated to a lesser degree under the Act. While corporations and labor unions are prohibited from making any contributions or expenditures in connection with federal elections, and individuals are limited to total contributions of $25,000 per year, unincorporated associations have no overall limit imposed on the total amount they may contribute or expend in connection with federal elections. Unlike corporations and labor organizations, they may solicit contributions from anyone and make partisan communications to the general public.

Appeal to Supreme Court

In its appeal to the Supreme Court, filed on June 4, 1980, CMA reiterated the arguments which the appeals court had rejected and restated its claim that the challenged provisions violated both First and Fifth Amendment rights. In challenging the constitutionality of limits on contributions to multicandidate committees, CMA argued that, in its Buckley v. Valeo decision, the Supreme Court had not equated contributions to political committees with contributions to candidates. CMA maintained that "...contributions to political committees are functionally different from contributions to candidates."

In its Supreme Court brief, the FEC challenged appellants' raising of constitutional issues under 2 U.S.C. §437h, a provision by which the Supreme Court may expedite its handling of constitutional challenges to the federal election law. The Commission argued that the provision was "...enacted by Congress in 1974 for the specific purpose of facilitating the resolution of a major constitutional challenge to the Act prior to the 1976 general election." In the Commission's view, appellants sought to "...invoke the extraordinary process of 437h for the purpose of avoiding the Commission's enforcement procedures."

As to the constitutional issues raised in the suit, the Commission supported the decision of the appeals court, reiterating its arguments that the Act violated neither the First nor Fifth Amendment rights of appellants.

Supreme Court Ruling

On June 26, 1981, the Supreme Court handed down a decision in California Medical Association v. FEC (Civil Action No. 79-1952) that affirmed the earlier decision of the U.S. Court of Appeals for the Ninth Circuit.

In its opinion, the Court upheld the constitutionality of 2 U.S.C. §441a(a)(1)(C), which limits contributions to a political committee to $5,000 per year, per contributor. The Court concluded that the challenged provision did not violate the First Amendment rights of appellants because it was an appropriate means by which Congress could seek to protect the integrity of the contribution restrictions upheld in Buckley v. Valeo (424 U.S. 1 (1976)). The Court said, "If First Amendment rights of a contributor are not infringed by limitations on the amount he may contribute to a campaign organization which advocates the views and candidacy of a particular candidate, the rights of a contributor are similarly not impaired by limits on the amount he may give to a multicandidate political committee, such as CALPAC, which advocates the views and candidacies of a number of candidates."

The Supreme Court also upheld the appeals court's ruling that Section 441a(a)(1)(C) did not violate appellants' equal protection rights under the Fifth Amendment. Appellants had unsuccessfully claimed that the provision allowed corporations and labor organizations to make unlimited contributions to their separate segregated funds while limiting to $5,000 a year the contributions an unincorporated association could make to the multicandidate committee it established. The Court held, however, that no equal protection violation existed. The Court stated, "Appellants' contention ignores the fact that the Act as a whole imposes far fewer restrictions on individuals and unincorporated associations than it does on corporations and unions. The differing restrictions placed on individuals and unincorporated associations, on the one hand, and on corporations and unions, on the other, reflect a congressional judgment that these entities have differing structures and purposes and that they therefore may require different forms of regulation in order to protect the integrity of the political process."

The Court found no merit, however, to the FEC's claim that the appellants' direct appeal to the Court (pursuant to Section 437h of the Act)2 was inappropriate because an FEC enforcement proceeding was pending against appellants (pursuant to Section 437g of the Act). The Court found that neither the legislative history nor the statutory language of Sections 437g and 437h indicated that a direct appeal should be limited to situations where no enforcement proceeding was pending.

Source: FEC Record, April 1981, p. 7; and August 1981, p. 1.

California Medical Association v. FEC, 641 F.2d 619 (9th Cir. 1980) (en banc), aff'd, 453 U.S. 182 (1981).

1 In its October 21, 1980, opinion in FEC v. California Medical Association, the district court ordered CMA and CALPAC to pay the FEC civil penalties of $5,000 each.

2 Section 437h provides for expedited handling of constitutional challenges to the Act. Section 437h(b), which granted the right of direct appeal to the Supreme Court, was repealed by Congress in 1988.

CARTER/MONDALE PRESIDENTIAL COMMITTEE v. FEC (82-1754)

On June 24, 1983, the U.S. Court of Appeals for the District of Columbia ruled that, since the Carter/Mondale Presidential Committee, Inc. (the Committee) had failed to file its petition for review of certain final FEC repayment determinations within 30 days after the FEC had made them, the court had no jurisdiction over the petition. Filed on July 6, 1982, the Committee's petition concerned certain final Commission determinations with regard to the FEC's audit of the Committee's publicly funded primary campaign in 1980.

Since it dismissed the suit on jurisdictional grounds, the court did not address the issue of whether the FEC could require the Committee to:

• Repay federal matching funds in an amount equal to total federal and private funds used for nonqualified campaign expenses; or
• Repay only the portion of nonqualified expenses that were paid with federal funds.

Source: FEC Record, August 1983, p. 8.

Carter/Mondale Presidential Committee, Inc. v. FEC, 711 F.2d 279 (D.C. Cir. 1983).

CARTER/MONDALE PRESIDENTIAL COMMITTEE v. FEC (84-1393)

On November 1, 1985, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the FEC did not abuse its discretion in declining to reconsider a final determination the agency had made with regard to the Carter/Mondale Presidential Committee, Inc.'s (the Committee's) repayment of nonqualified campaign expenses to the U.S. Treasury.1 CA No. 84-1393 and 84-1499 (The Committee was the publicly funded principal campaign committee for former President Carter's 1980 primary campaign.) The court's ruling sustained decisions made by the FEC on July 12 and September 20, 1984, not to reconsider its final repayment determination with regard to the Committee.

Background

On July 6, 1982, the Committee had filed a petition with the appeals court which sought review of an FEC final determination that the Committee must repay $104,300.78 to the U.S. Treasury, an amount equal to those nonqualified expenses incurred by the Committee during the 1980 primary campaign. (Carter/Mondale Presidential Committee v. FEC; 111 F.2d 279 (D.C. Cir. 1983)) The court dismissed the case on grounds that it had not been filed within the time frame required by the election law. See 26 U.S.C. §9041(a).

On August 7, 1984, the Committee filed a petition, asking the Court to review the decision that the FEC made on its own initiative not to reopen its final repayment determination for the Committee in light of recent decisions made by the court in two other suits concerning repayments. (In Kennedy for President Committee v. FEC and Reagan for President Committee v. FEC, the court had held that the FEC had exceeded its authority under 26 U.S.C. §9038(b)(2) when it required repayment of the entire amount of nonqualifying payments, rather than the portion attributable to the matching payment account.) The Committee also asked the FEC to reconsider its decision (taken in July 1984) not to reopen the Carter/Mondale repayment determinations. The Commission had decided to reconsider only the repayments by the Kennedy and Reagan committees, which had been required by the court. The Commission had taken this position " 'in the interest of finality in the administrative process, now and in the future.'" The Committee claimed that the FEC's decision disregarded the principle of equal treatment for all candidates, which the Committee alleged the agency had established in reconsidering a final repayment determination made with regard to John Anderson's publicly funded campaign. On September 20, 1984, the FEC once again declined to reconsider the Committee's final repayment
determination. On October 2, 1984, the Committee filed a second petition with the appeals court. On October 15, 1984, the court consolidated this case with the Committee's August 1984 case.

Appeals Court's Ruling

The court rejected the Committee's claim that the FEC's July determination was unlawful because it contradicted a precedent established by the agency's reconsideration of the Anderson Campaign's repayment requirements: "Far from establishing any general or even selective practice of reopening final determinations, the record before us [of the FEC's reconsideration of the Anderson determination] displays only an isolated situation in which the facts distinguishable from those in the case at hand tugged the Commission away from application of the finality principle."

Nor did the court find merit in the Committee's assertion that the FEC had treated the Committee unfairly. "No favoritism can be attributed to the FEC when it carries out the letter of a court's order" to reconsider repayments by the Kennedy and Reagan committees. Moreover, the Committee's tardiness in seeking court review of its own repayment determination contradicts "'Congress' strong interest in resolving federal matching fund audits expeditiously.' 111 F.2d at 289 and n.19."

Finally, the court rejected the Committee's argument that the FEC had failed to give reasons for refusing to reopen its repayment determination. "[A]bsence of an express statement does not render its action unlawful where reasons for that action may be gleaned from its [the FEC's] staff's reports."

Source: FEC Record, December 1985, pp. 6-7.

Carter/Mondale Presidential Committee, Inc. v. FEC, 775 F.2d 1182 (D.C. Cir. 1985).

1 The public funding statutes require Presidential candidates to repay the U.S. Treasury for nonqualified campaign expenses. 26 U.S.C. §§9007(b)(4) and 9038(b)(2).

CARTER/MONDALE REELECTION COMMITTEE AND DNC v. FEC

The Commission's certification of public funds to the Republican nominee was challenged in Carter-Mondale Reelection Committee, Inc. and the Democratic National Committee v. FEC, filed July 24, 1980. The Carter-Mondale Committee (the Committee) asked the U.S. Court of Appeals for the District of Columbia Circuit to prevent the Commission's certification of the Republican nominees, pending resolution of an administrative complaint filed by the plaintiffs against the nominees. In their complaint to the Commission, the Committee had said that Ronald Reagan would be ineligible for public funds since he had allegedly violated the law on several counts. The Committee had charged that several groups, purportedly making independent expenditures on Mr. Reagan's behalf, were in fact making qualified campaign expenditures with the prior consent of the candidate and his agents. In the suit, the Commission argued that the certification was proper and within the Commission's exclusive jurisdiction. On September 12, the court ruled in the Commission's favor and affirmed the Commission's "action in certifying the nominees' application for funds."

Source: FEC Annual Report 1980, p. 20.

In re Carter-Mondale Reelection Committee, Inc., 642 F.2d 538 (D.C. Cir. 1980).

CENTER FOR RESPONSIVE POLITICS v. FEC (93-2250)

This case was voluntarily dismissed as moot when the Commission took action on three complaints the Center had filed with the agency in 1990 and 1991 (MURs 3175, 3249 and 3325). The Center had filed suit to force the FEC to take action but, in March 1994, agreed to suspend the litigation for four months while the FEC worked to resolved the MURs, which concerned excessive contributions.

The U.S. District Court for the District of Columbia dismissed the case on July 11, 1994. (Civil Action No. 93-2250 (SSH).)

Source: FEC Record, September 1994, p. 8.

Center for Responsive Politics v. FEC, No. 93-2250
(D.D.C. Oct. 29, 1993).

CENTER FOR RESPONSIVE POLITICS v. FEC (95-1464)

On November 9, 1995, the U.S. Court of Appeals for the District of Columbia dismissed this case.

The Center for Responsive Politics (CRP) and its executive director, Ellen Miller, brought this suit alleging that the FEC acted contrary to law when, in a recent rulemaking (60 FR 31854, June 16, 1995), it failed to repeal regulations that permit publicly funded Presidential candidates to accept private contributions for their general election legal and compliance fund.

The court ruled that the CRP and Mrs. Miller lacked standing to bring this suit. Neither the CRP nor Mrs. Miller suffered harm that could be directly traced to the FEC's action. Additionally, neither one was qualified to bring suit since their alleged injury was outside the statute's "zone of interest" in this case.

Source: FEC Record, January 1996, p. 3.

Center for Responsive Politics v. FEC, No. 95-1464 (D.C. Cir. Nov. 9, 1995).

CHAMBER OF COMMERCE v. FEC

On November 14, 1995, the U.S. Court of Appeals for the District of Columbia reversed the district court's dismissal of this case and ordered the court to issue appellants appropriate declaratory relief.

The U.S. District Court for the District of Columbia had dismissed this case on October 28, 1994, on the grounds that the matter was not ripe for review and that the plaintiffs lacked standing to bring the action.

This case involved the FEC's regulatory definition of "member." FEC regulations allow membership organizations to use their corporate funds to send political communications and solicitations, but only to their administrative and executive personnel and to persons who qualify as "members" under federal election law.1 To qualify as a "member" under FEC regulations a person must have a significant financial interest in the organization, or pay regular dues and possess the right to vote either directly or indirectly for at least one representative in the organization's highest governing body, or possess the right to vote for all members of the organization's highest governing body. 11CFR 114.1(e)(2).

Background

In 1976, FEC regulations defined an organization's "members" as "all persons who are currently satisfying the requirements for membership" in the organization. 11CFR 114.1(e). In subsequent years, court decisions and advisory opinions established that political communications and solicitations financed with corporate monies could only be sent to persons who have a significant financial or organizational attachment to the membership organization.

In 1993, the FEC adopted new rules to reflect these precedents. These rules clarified that a person will be considered a "member" for purposes of the Act if that person:

• Has some significant financial attachment to the organization beyond the mere payment of dues, such as a significant investment or ownership stake; or
• Is obligated to make regular dues payments and has the right to vote, either directly or indirectly, for at least one representative in the membership organization's highest governing body; or
• Is entitled to vote directly for all who sit on the organization's highest governing body. 11CFR 114.1(e)(2).

When these new regulations took effect, the Chamber of Commerce of the U.S.A. and the American Medical Association (AMA ) submitted Advisory Opinion Requests (AORs) 1994-4 and 1994-12 to the Commission, asking about the "member" status of their members. The Commission responded to the AORs by stating that the six Commissioners could not reach a consensus on the status of more than 200,000 Chamber members and nearly 45,000 AMA members; these persons paid dues to their respective organizations but lacked voting rights.

Not satisfied with this result, the Chamber and the AMA challenged the FEC's revised definition of "member" in the U.S. District Court for the District of Columbia.

District Court Decision

• The district court ruled that:
• The case was not ripe for review because neither plaintiff had suffered harm by the rule;
• Plaintiffs lacked standing to bring this suit because the rule did not present a reasonable threat of prosecution to them; and
• The FEC's definition of "member" was entitled to deference because it was a permissible construction of that term by the Commission. Chevron U.S.A. v. Natural Resources Defense Council (467 U.S. 837, 1984).

Appeals Court Decision

The court of appeals found that the Chamber and the AMA did have standing to argue their case before the court: "In the last federal election, appellants, not surprisingly, felt constrained to alter their prior practicethey ceased political communications with those constituents who did not qualify as 'members' under the Commission's new rule. And counsel for the Commission agreed . . . that he would not advise the Chamber and the AMA to ignore the rule." Thus, the issue brought before the court was ripe for review because it caused both the Chamber and the AMA harm.

Further, the Chamber and the AMA had standing to bring this suit because, although an FEC enforcement decision had not been issued against them, there was a credible threat of enforcement if they chose to ignore the regulation. Additionally, the possibility that appellants' First Amendment rights were chilled by the FEC's regulations conferred standing upon appellants. Virginia v. American Booksellers.

The court found that the FEC's rules presented "serious constitutional difficulties" because they precluded "appellants from communicating on political subjects with thousands of persons, heretofore regarded by the Commission as members." Thus, although the court did not disagree with the district court's conclusion that the FEC was entitled to deference under the Chevron doctrine, the court reasoned that the conflict between the rules and the First Amendment warranted judicial review.

At issue here, in the court's view, was whether the FEC's rule accorded with the Supreme Court's opinion in Federal Election Commission v. National Right to Work Committee, 459 U.S. 197 (1982). There, the Court ruled that "members of nonstock corporations were to be defined . . . by analogy to stockholders of business corporations and members of labor unions . . . [which] suggest[ed] that some relatively enduring and independently significant financial or organizational attachment is required . . . "

The appeals court concluded that the FEC's new rule did not square with the Supreme Court's opinion in NRWC: "[I]mplicit in the Commission's rule is the view that dues, no matter how high, are not by themselves a manifestation of a significant financial attachment." The court said that the FEC's position reads the disjunctive "or" between "financial" and "organizational" as if the Supreme Court had used the conjunctive "and."

Furthermore, the court held that, "It is...quite illogical to regard someone who has one share of stock in a public corporation, which can be sold in minutes, as more significantly attached to the organization than a person or entity who pays $1000 or even $100,000 (as is the case for some Chamber members) in annual dues."

The court also criticized the rule's voting requirement. It noted that the nearly 45,000 AMA members in question are subject to sanction by the organization should they violate the organization's Principles of Medical Ethics. "It might be thought, that for a professional, placing oneself in such a position is the most significant organizational attachment."

Lastly, the court noted that the rule treats some labor unions and federated rural electric cooperatives differently, exempting them from its new definition of "member." The court noted that this question had not been squarely presented on appeal, but stated that it was not satisfied with the FEC's claim that the separate treatment was consistent with the Act's legislative history. Without further elaboration, the court stated, it "would determine that these exemptions make the regulation arbitrary and capricious."

Source: FEC Record, December 1994, p. 1; and January 1996, p. 2.

Chamber of Commerce v. FEC, 1994 WL 615786 (Oct. 28, 1994); No. 94-5339 (D.C. Cir. Nov. 14, 1995).

1 This is an exception to the general ban on the use of corporate money in connection with federal elect