IAM v. FEC
On December 16, 1980, the U.S. District Court for the District of Columbia dismissed International Association of Machinists and Aerospace Workers (IAM) v. FEC (Civil Action No. 80-0354). The court's decision upheld an FEC determination dismissing an administrative complaint that IAM and six other parties had filed with the Commission. The court granted, however, plaintiffs' motion to have the court certify constitutional challenges raised in the suit to an en banc appeals court, pursuant to 2 U.S.C. §437h. Accordingly, on June 3, 1981, the district court certified to the U.S. Court of Appeals for the District of Columbia Circuit three questions as to the constitutionality of 2 U.S.C. §441b(b)(3). The FEC filed a motion to dismiss the claims on July 15, 1981.
Plaintiffs' Claim
In their suit, plaintiffs claimed that the FEC had acted contrary to law in dismissing an administrative complaint filed by plaintiffs on October 9, 1979. The complaint alleged that eleven corporations had systematically violated 2 U.S.C. §441b(b)(3) by soliciting contributions to their separate segregated funds (political action committees or PACs) from "unprotected" administrative personnel under "inherently coercive" conditions. Citing the Supreme Court's ruling in Civil Service Commission v. National Association of Letter Carriers (413 U.S. 548 (1973)), plaintiffs claimed that the corporate solicitation methods were coercive because immediate supervisors approached their employees for contributions at work. Plaintiffs cited a number of examples as evidence of coercion, including the fact that employees had made larger contributions, on the average, than members of the general public with comparable incomes and the fact that some of the PAC contributions were made to out-of-state candidates and to candidates whose party affiliation differed from that of the employees.
District Court Ruling: Merits of the Case
In reviewing plaintiffs' claims, the district court recognized the deference to be accorded the FEC's determination and concluded that the Commission's dismissal of IAM's complaint was not arbitrary, capricious or contrary to law. Applying the standard for permissible corporate solicitations set forth in Pipefitters Local Union No. 562 v. U.S. (407 U.S. 385 (1972)), and later codified in §441b(b)(3) of the Act, the court stated: "[N]owhere does FECA [Federal Election Campaign Act] forbid corporate supervisors from asking their subordinates for contributions as long as they comply with the provisions of Section 441b(b)(3)."1 The court concluded that "[p]laintiffs' presentation to the FEC, although detailed, is composed entirely of circumstantial evidence. Neither the administrative complaint nor the complaint in this Court, offers direct evidence of wrongdoing."
District Court Ruling: Constitutional Issues
Plaintiffs had also asked the district court to certify to the appeals court three constitutional challenges to Section 441b(b)(3) if the court upheld the FEC's determination to dismiss plaintiffs' administrative complaint. Plaintiffs claimed that the corporate solicitations described in its complaint violated:
The FEC moved that these challenges be dismissed on grounds that they failed to state a claim on which relief could be granted and plaintiffs lacked standing to raise the issues. The court found, however, that "...plaintiffs' claims are neither frivolous nor so insubstantial as to warrant dismissal for failure to state a claim." As to plaintiffs' standing to raise the constitutional issues, the court held that "...the plaintiffs have made a threshold showing of a 'distinct and palpable injury' of a level sufficient to satisfy Article III [of the Constitution]."
Appeals Court Ruling
On April 6, 1982, the U.S. Court of Appeals for the District of Columbia Circuit, sitting en banc, issued an opinion that rejected the three constitutional challenges to Section 441b(b)(3) of the election law. (Civil Action No. 81-1664) In separate decisions, the appeals court affirmed the district court's decision that the Commission's dismissal of the complaint was not contrary to law, and also ruled on each of plaintiffs' constitutional questions, as summarized below:
Is the asserted imbalance between corporations and labor unions under the 1976 FECA amendments [codified at 2 U.S.C. §441b(b)(3)] unconstitutional?
Plaintiffs claimed that, in permitting corporate PACs to solicit their executive and administrative personnel in addition to their shareholders, the 1976 amendments had violated Fifth Amendment rights of equal protection and First Amendment rights of free speech by upsetting the long-standing balance in political power that had existed between corporations and labor organizations prior to enactment of the 1976 amendments. They argued that Congress had not intended to tip this balance in favor of corporations; rather, Congress had not foreseen the effect of the amendments, namely, the proliferation of corporate PACs and their disproportionate influence on federal elections. Since there are many more corporations than labor organizations, plaintiffs claimed the imbalance is institutional and, consequently, cannot be corrected by labor organizations.
The appeals court found, however, that Congress had attempted to treat labor organizations and corporations in a comparable manner in both the 1971 and 1976 amendments, while taking into account the structural differences between them. By restricting corporate PAC solicitations to administrative and executive employees and shareholders in the 1976 amendments, Congress had restored a similar, if not identical, balance to that which had existed prior to the FEC's 1975 ruling in the SUNPAC advisory opinion (AO 1975-23). (The SUNPAC opinion permitted corporations to solicit not only their shareholders but all their employees as well.)
By including executive and administrative personnel in a corporation's solicitable personnel, Congress had taken into account the structural differences between labor organizations and corporations, while applying the standard for solicitable personnel even handedly. The appeals court noted that, in this regard, "it is...more likely that a corporation's career employees will identify with the corporate direction, purpose, and welfare than will a shareholder who does not own a controlling interest."
In affirming Congress' decision to shape the solicitation procedures of the election law to reflect differences in organizational structure, the appeals court cited recent rulings of the U.S. Court of Appeals for the Seventh Circuit that upheld the constitutionality of other solicitation arrangements. For example, in Bread PAC v. FEC, the court rejected a Fifth Amendment challenge to restrictions placed on a trade association seeking to solicit the solicitable personnel of its member corporations. Similarly, in California Medical Association v. FEC, the court rejected an equal protection challenge to a provision which prohibits unincorporated associations, unlike corporations and labor organizations, from spending unlimited funds to establish and administer a political action committee.
Furthermore, the appeals court cautioned that "the Constitution, as historically and currently interpreted, does not afford any guarantee against one person's or group's ability to fund more speech than can another. In fact, far from imposing on Congress an obligation to equalize the voices of corporate and labor PACs, the Constitution, as the Supreme Court now reads it, may forbid Congress to act in such a manner. See Buckley v. Valeo, 424 U.S. at 48-49."
Does the statute impair career employees' First Amendment right of political abstention by permitting the corporate PAC solicitation as detailed in the record?
Plaintiffs alleged that, even though Section 441b(b)(3) sanctions corporate PAC solicitations of executive and administrative personnel, these solicitations are inherently coercive, in violation of First Amendment free speech rights. As evidence of this coercion, plaintiffs pointed out that executive and administrative employees "give to the corporate political fund at rates and in amounts far beyond those which obtain when donors are not solicited to give to the institution that employs them." The appeals court said, however, "One could argue with equal force that career employees contribute to their corporate PACs out of a desire to further what they perceive to be their own best interests or the best interests of the corporation, and because they have the wherewithal to do so, not because they are coerced or intimidated."
Deferring to Congress' judgment, the appeals court further held that the 1976 amendments extended the same protections against coercion to corporate executive and administrative personnel that had been provided to union members and shareholders in the 1971 amendments. It had no "evident reason to believe that protections... relied upon to secure union members against union pressure would be less adequate in securing career employees against corporate pressure." The appeals court reasoned that a more important consideration was the risk of coercion that corporate solicitations posed for a corporation's hourly wage earners. "The statutory language plainly demonstrates that concern: solicitation of hourly employees is severely restricted; solicitation of career employees is generally permitted, but is brigaded with protections designed to prevent overreaching."
Nor did the court find any merit to plaintiffs' contention that the 1976 amendments constituted a form of government-compelled activism on the part of PAC contributors.
Does the use of general corporate assets to establish and support a corporate PAC violate the First Amendment rights of dissenting shareholders?
Plaintiffs claimed that the FECA provision permitting corporations to use treasury funds to establish and administer a PAC abridge the free speech rights of shareholders who objected to such use of corporate assets. The court found that the chief case cited by plaintiffs in support of their claim, Abood v. Detroit Board of Education, was not applicable. The appeals court pointed out that "in Abood the [Supreme] Court had held that the First Amendment prohibited a public employee union from requiring any employee 'to contribute to the support of an ideological cause he may oppose as a condition of holding a job." A corporate shareholder, the court reasoned, is under no such compulsion. Citing the Supreme Court's decision in First National Bank of Boston v. Bellotti, the appeals court said "[T]he shareholder invests in a corporation of his own volition and is free to withdraw his investment at any time and for any reason." 435 U.S. at 794 n. 34.
Supreme Court Ruling
On November 8, 1982, the Supreme Court issued a summary judgment affirming the April 6 decision by the U.S. Court of Appeals for the District of Columbia Circuit. (U.S. Supreme Court No. 82-284)
Source: FEC Record, September 1981, p. 3; September 1982, p. 4; and January 1983, p. 6.
International Association of Machinists v. FEC, 678 F.2d 1092 (D.C. Cir. 1982) (en banc), aff'd mem., 459 U.S. 983 (1982).
1 Under this provision of the election law, solicitations are considered noncoercive if they inform employees of: (1) the political purposes for which contributions will be used and (2) of their right to refuse to contribute without reprisal.
JONES v. FEC
On April 30, 1997, the U.S. District Court for the Eastern District of Michigan granted the FEC's motion to dismiss this case. The suit, seeking $249 trillion in damages, was filed in February 1997, by Alfonzo Jones, a Detroit resident who said, among other things, that the FEC acted contrary to law in not certifying him for public financing for the 1996 presidential campaign.
The court found that Mr. Jones failed to allege any facts in his suit that indicated that the Commission had illegally failed to provide him with public funds.
Source: FEC Record, June 1997, p. 7.
JORDAN v. FEC
The U.S. District Court for the District of Columbia granted summary judgment to the FEC on May 27, 1994, upholding the agency's dismissal of an administrative complaint filed by Absalom F. Jordan, Jr., against Handgun Control, Inc.
On November 3, 1995, the U.S. Court of Appeals for the District of Columbia Circuit remanded the case to the district court. The court of appeals instructed the district court to dismiss the case for lack of jurisdiction because Mr. Jordan had failed to file suit within 60 days after the FEC dismissed his complaint.
The district court dismissed the case on January 23, 1996.
Background
In his complaint, Mr. Jordan claimed that Handgun Control, Inc. (HCI) had violated the law by soliciting contributions from individuals who did not qualify as "members" because they lacked sufficient rights to participate in the governance of HCI.
Mr. Jordan's complaint raised the same membership issue as a succession of complaints filed against HCI by the National Rifle Association (NRA) between 1983 and 1992. The first NRA complaint resulted in a conciliation agreement requiring HCI to pay a civil penalty and to amend its bylaws to establish voting rights for its members.
Three more NRA complaints challenging HCI membership were dismissed by the FEC, which had already concluded that HCI members, under the new bylaws, had sufficient governance rights through their ability to vote for an at-large board member. The FEC's dismissals of the third and fourth complaints were affirmed by the D.C. Court of Appeals.
In dismissing the Jordan complaint, the FEC stated that his claims were "substantially similar" to those in the four NRA complaints, which had already been "conclusively resolved."
Definition of Member
Until recently, FEC regulations defined member simply as a person who satisfied the requirements for membership, but FEC advisory opinions had refined the term to mean persons who had some right to participate in the organization's governance and the obligation to pay regular dues.1 This reading was based on the Supreme Court's decision in FEC v. National Right to Work Committee (NRWC), 459 U.S. 197 (1982). The agency determined that HCI member's voting rights, under the new bylaws, were sufficient to satisfy this definition when the issue arose in three more NRA complaints.
Mr. Jordan challenged that interpretation, claiming that HCI's members were not solicitable because they lacked the power to remove management. He based his argument on the NRWC holding that members should be defined "at least in part, by analogy to stockholders of a business corporation."
District Court Ruling
Finding the FEC's definition of member to be reasonable, the court pointed out that, while the NRWC Court said that there had to be "some" attachment between the organization and its membership, that Court "certainly did not require that members be provided with the opportunity to seize total control of the organization, as plaintiff argue[d]."
Furthermore, the court said the FEC's refusal even to consider Mr. Jordan's claims was neither arbitrary nor capricious but, instead, made "perfect sense," considering that the agency had already conclusively resolved the HCI membership issue. The court said that a "scrupulous adherence to precedent is hardly arbitrary."
Court of Appeals Ruling
The court of appeals noted that the FEC dismissed Mr. Jordan's complaint on July 24, 1991, and that Mr. Jordan did not file suit with the district court until September 25, 1991. Under 2 U.S.C. §437g(a)(8)(B), a petition to review an FEC decision to dismiss an administrative complaint must be filed within 60 days after the date of dismissal. The court ruled that the 60-day period began when the Commission voted to dismiss the complaint, and not on the date of the FEC's letter informing Mr. Jordan of the dismissal. When Mr. Jordan received the FEC's letter informing him of the dismissal, he had 53 days left on the 60-day limit in which to file a suit. He did not file suit with the district court until 63 days after the FEC voted to dismiss his complaint. As a result, the court of appeals ruled that the courts lacked jurisdiction to review this case. On January 23, 1996, the district court carried out the appeals court's instructions to dismiss this case.
Source: FEC Record, August 1994, p. 9; and April 1996, p. 12.
Jordan v. FEC, No. 91-2428 (NHJ) (D.D.C. Feb. 25, 1993); (D.D.C. May 27, 1994) (opinion); No. 94-5216 (D.C. Cir. Nov. 3, 1995).
1 The FEC further clarified the definition of member at revised 11CFR 114.1(e), effective November 1993.
JUDD v. FEC
Keith Judd, a Texas resident and registered Presidential candidate in 2000, asked the U.S. Court of Appeals for the District of Columbia Circuit to find that the Presidential Primary Matching Payment Account Act is unconstitutional and to award him public funding for the election equal to that awarded President Bill Clinton during his 1996 reelection effort. On April 9, 1998, the court dismissed Mr. Judd's petition for lack of prosecution.
On August 20, 1998, the appeals court denied Mr. Judd's motion to have the court reexamine its decision to dismiss this case for lack of prosecution.
On November 4, 1998, the court denied Mr. Judd's request for a rehearing and a rehearing en banc of the court's decision to dismiss the case.
On February 22, 1999, the court denied a motion by Mr. Judd to vacate its ruling in the case.
Source: FEC Record, June 1998, p. 5; October 1998, p. 2; January 1999, p. 3; and April 1999, p. 5.
JUDICIAL WATCH, INC. v. FEC
On July 2, 1998, the U.S. District Court for the District of Columbia denied the FEC's motion to dismiss this lawsuit challenging the agency's dismissal of an administrative complaint filed by Judicial Watch, Inc. The court remanded the case to the FEC and ordered it to decide whether to pursue the administrative complaint within 120 days.
On May 7, 1999, the U.S. Court of Appeals for the District of Columbia Circuit reversed the lower court ruling and dismissed this case.
Background
In February 1998, Judicial Watch filed this lawsuit after the Commission voted to take no action on its administrative complaint, which alleged that the White House, Democratic National Committee (DNC), Department of Commerce and Clinton administration had sold seats on foreign trade missions for large campaign contributions to the DNC and the Clinton/Gore 1996 reelection campaign. Judicial Watch contended that the contributions violated 18 U.S.C. §600, a criminal statute which makes it unlawful to promise any special benefit or treatment as a reward for political activities in support of or opposition to a particular candidate, election or political event.
District Court Decision
The FEC moved to dismiss this case for lack of standing. In order to establish standing, a plaintiff such as Judicial Watch must show that it has suffered an injury in fact, that there is a causal connection between the injury and the conduct being complained about and that it is likely that the injury will be redressed by a favorable decision. The FEC claimed that Judicial Watch failed to allege an injury flowing from the Federal Election Campaign Act (the Act).
The court disagreed. It pointed out that, in FEC v. Akins, the U.S. Supreme Court concluded that, for purposes of standing, an injury was created when a plaintiff failed to obtain information that had to be publicly disclosed. Thus, affected voters who do not have access to such information have standing to sue. The district court held that, in this case, information that trade mission seats may have been exchanged for contributions to the DNC and Clinton/Gore committee was "important and useful to voters."
The FEC also argued that Judicial Watch did not have standing because its administrative complaint failed to identify violations of the Act over which the Commission had jurisdiction. The complaint only made allegations of bribery, not of reporting violations. The court stated, however, that no plaintiff is required to supply the FEC with a "legal theory" under the Act in order for the agency to pursue an administrative complaint. "At minimum, the FEC, as an agency acting in the public interest, should not interpret complaints narrowly," the court stated.
The court went on to note that the matters outlined in the administrative complaint could raise reporting issues. The court said a contribution in exchange for participation in trade missions could be classified as an offset to a contribution, a refund of a contribution or a disbursement. The DNC and Clinton/Gore committee might have had an obligation to report such transactions.
The court further noted that the FEC failed to notify Judicial Watch that its administrative complaint was technically deficient, as is required by 11 CFR 111.5. The court also stated that, "If the allegations were not within its prosecutorial jurisdiction, the FEC should have referred the matter to the Department of Justice or the appropriate agency."
The court also dismissed the FEC's argument that a huge backlog of cases at the agency requires it to dismiss administrative complaints such as the one filed by Judicial Watch without investigating them because of a lack of financial and human resources. The court said the FEC should have raised this issue in the administrative proceedings.
Appeals Court Decision
The appeals court found that Judicial Watch lacked standing to challenge the FEC's decision to dismiss an administrative complaint it filed with the agency.
In its memorandum opinion, the appellate court concluded that Judicial Watch failed to show that it suffered an injury stemming from the FEC's dismissal of its administrative complaint. The court said it was too late for Judicial Watch now to argue that its complaint should be read to allege reporting violations, and that the FEC's dismissal deprived the group and its members of information to which they are entitled. In Common Cause v. FEC, the appeals court had found that, if an organization has simply been "deprived of the knowledge as to whether a violation of the law has occurred," then its injury is no more than a general "interest in enforcement of the law" and not sufficient for standing.1
The court noted that Judicial Watch failed to make even a nominal allegation of reporting violations in its complaint. If, however, Judicial Watch has a viable claim of reporting violations, the court stated that it should file a new complaint with the FEC asserting those violations.
The appellate court also agreed with the FEC that the district court erred in granting summary judgment for Judicial Watch on the merits before the FEC had answered the complaint.
Source: FEC Record, April 1998, p. 4; September 1998, p. 3; and July 1999, p. 8.
Judicial Watch, Inc. v. FEC, 10 F. Supp.2d 39 (D.D.C. July 6, 1998).
1 Common Cause v. FEC, 108 F.3d 413 (D.C. Cir. 1997)
KAY v. FEC
On April 21, 1981, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment in the suit Richard B. Kay v. FEC (Civil Action No. 80-3081) and denied plaintiff's cross-motion for summary judgment.
Background
Plaintiff filed this suit on December 2, 1980, seeking a declaratory judgment that the FEC had acted contrary to law in dismissing an administrative complaint that plaintiff had filed against the Plain Dealer Publishing Company of Cleveland and several of its officers and employees. Plaintiff, who had been a Presidential primary candidate in Ohio, alleged that a full-page chart published in The Plain Dealer before the 1980 Ohio Presidential primary was a political advertisement by the publishing company. The chart carried photographs of three major party Presidential candidates and summaries of their positions on nine campaign issues ranging from inflation to federal funds for abortions. Plaintiff alleged the ad constituted either a corporate expenditure or a corporate in-kind contribution both prohibited under the Act.
After investigating the complaint pursuant to the enforcement procedures of Section 437g(a) of the Act, the Commission, acting on a recommendation from the General Counsel to dismiss the complaint, found no reason to believe the Act had been violated. In his report to the Commission, the General Counsel observed that the "contents of this chart merely constitute an effort on the part of The Plain Dealer to report in an orderly manner for the benefit of its readers the issue stands and activities of the major candidates in the Ohio primary. In essence, The Plain Dealer was printing a news story in chart form." The General Counsel noted that the Act and Commission regulations specifically exempt such news stories from the definitions of "contribution" and "expenditure," provided the news corporation is not controlled by any political party, political committee or candidate. The General Counsel noted that there was no indication of such ownership or control of The Plain Dealer.
District Court Ruling
Holding that no material facts were in dispute and that applicable law was clear, the court found that: "The Commission's action, based on the General Counsel's recommendation that the publication be treated as a newspaper story, was plainly consistent with the law. The Plain Dealer was doing the main business of a newspaper: in its own way, it informed the public about issues which the public would decide."
As to plaintiff's claim that he did not receive reasonably equal news coverage in The Plain Dealer's circulation area, the court noted that a newspaper had no duty under the Act to give "equal time" to candidates. The court said, "To the extent that this 'equal time' concern was an element of plaintiff's complaint, the Commission quite properly ignored it." Plaintiff appealed the decision.
Appeals Court Ruling
On December 1, 1981, the U.S. Court of Appeals for the District of Columbia Circuit issued a judgment in Richard B. Kay v. FEC (Civil Action No. 80-3081), which upheld the district court's decision that the FEC's dismissal had not been contrary to law.
Source: FEC Record, June 1981, p. 6; and February 1982, p. 9.
Kay v. FEC, No. 80-3081 (D.D.C. April 20, 1981) (unpublished opinion), aff'd mem., 672 F.2d 894 (D.C. Cir. 1981).
KENNEDY FOR PRESIDENT v. FEC (81-2552)
On December 21, 1981, the U.S. District Court for the District of Columbia issued a consent order resolving claims brought by the Kennedy campaign against the Commission in Kennedy for President Committee v. FEC (Civil Action No. 81-2552). The court dismissed with prejudice all other pending judicial claims between the Kennedy Committee and the Federal Election Commission.
Plaintiff's Claims
In the suit, filed on October 21, 1981, the Kennedy Committee claimed that the FEC had violated the Government in the Sunshine Act (5 U.S.C. §552b) by:
Resolution of Claims
In the consent order, the FEC agreed to make available to plaintiff and the public portions of the transcript involving the FEC's consideration of the final Kennedy audit report at Commission meetings held on August 25 and 26 and September 15 and 16, 1981. The Commission also agreed to make available documents pertaining to those meetings. Both parties agreed, however, that the Commission could delete from these transcripts discussions related solely to FEC personnel matters, enforcement actions, litigation strategy and matters exempted from public disclosure by the Freedom of Information Act (FOIA). Similarly, the parties agreed that portions of the documents pertaining to those meetings could be withheld pursuant to various exemptions under the Freedom of Information Act.
The consent order expressly conditioned release of the transcripts on the parties' compliance with the following requirements:
Source: FEC Record, February 1982, p. 8.
KENNEDY FOR PRESIDENT v. FEC (83-1521)
On May 15, 1984, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion in Kennedy for President Committee v. FEC (Civil Action No. 83-1521), which reversed a repayment determination that the FEC had made with regard to the Kennedy for President Committee. The committee was established by Senator Edward M. Kennedy (D-Mass.) as his principal campaign committee for the 1980 Presidential primaries. On the same day, for reasons set forth in the Kennedy opinion, the court also vacated an FEC repayment determination with regard to the Reagan for President Committee, President Reagan's principal campaign committee for his 1980 Presidential primary campaign. The Reagan campaign had challenged an $87,708 repayment determination made by the FEC in June 1983. (Reagan for President Committee v. FEC; Civil Action No. 83-1666.)1 The appeals court then remanded both cases to the Commission for further proceedings consistent with its opinion in the Kennedy case.
Background to the Court's Ruling on the Kennedy Case
On April 14, 1983, based on findings of statutorily mandated audits of the Kennedy campaign, the Commission determined that the campaign had exceeded the 1980 state-by-state spending limits for publicly funded candidates by $14,889 in New Hampshire and by $40,611 in Iowa.2 FEC regulations require publicly funded Presidential primary candidates to repay to the U.S. Treasury nonqualified expenditures that are made with primary matching funds or private contributions.3 11 CFR 9038.2(b)(2)(i). Consequently, the Commission determined that the Kennedy campaign had to repay the full amount of nonqualified campaign expenditures incurred by the campaign (i.e., $55,500).
In its December 21, 1983, petition to have the court review the FEC's repayment determination, the Kennedy campaign had not challenged the FEC's determination with regard to the amount of nonqualified expenditures the campaign had incurred. Rather, the Kennedy campaign contended that the repayment formula spelled out in the FEC's regulations exceeded the Commission's statutory authority because it required the repayment of the entire amount of nonqualified expenditures. The Kennedy campaign argued that the election law required publicly funded campaigns to repay only the portion of their nonqualified expenditures made with primary matching funds. As an alternative to the FEC's repayment formula, the Kennedy campaign proposed that its repayment be calculated by "multiplying the total amount of [non]qualified expenditures by the proportion of matching funds to total campaign funds."
Appeals Court Ruling
The appeals court noted that Section 9038(b)(2) of the Presidential Primary Matching Payment Account Act did not provide a specific formula for determining repayments resulting from nonqualified campaign expenditures. Nevertheless, the court held that "the statute gives rise to a repayment obligation only when the FEC determines that federal matching funds were used for nonqualified purposes." The court reasoned that "if Congress had intended the total amount of every unqualified expenditure to be repaid, the statute would not have expressly limited the repayment obligation to unqualified expenditures paid out of matching fund sources." The court maintained, however, that the FEC should not be bound by the Kennedy campaign's proposed repayment formula but should have discretion "in formulating a proper method for calculating the amount of unqualified campaign expenditures attributable to matching fund sources."
The court noted that, in promulgating the repayment regulation that implements the statutory provision, the FEC had reasoned that "if a candidate spends private campaign contributions...on nonqualified campaign expenditures, those private funds would obviously not be available to defray the candidate's qualified campaign expenditures. The net result would be that the candidate would subsequently require more public funding to meet his or her qualified expenses. In essence, this additional public funding would restore private campaign funds diverted by the candidate to nonqualified campaign purposes." The court maintained, however, that the "Commission's regulation ...indulges the unreasonable presumption that all unqualified expenditures are paid out of federal matching funds." The court concluded that "the true 'net result' of the depletion of the overall campaign fund will be either an increase in the campaign's final deficit or a decrease in the campaign's final surplus. In the case of a deficit, the total federal funds would have been spent regardless of the unqualified expenditures. In the case of a surplus, the government is entitled to recover only its pro rata share of the final campaign surplus."
Source: FEC Record, July 1984, p. 6.
Kennedy For President Committee v. FEC, 734 F.2d 1558 (D.C. Cir. 1984).
1 Reagan For President Committee v. FEC, 734 F.2d 1569 (D.C. Cir. 1984).
2 Presidential primary campaigns that receive public funds must agree to limit spending to both a national limit and a separate limit for each state.
3 Nonqualified campaign expenditures include noncampaign-related expenses, certain expenditures made before or after candidacy and expenditures exceeding the limits for publicly funded Presidential primary campaigns.
KHACHATURIAN v. FEC
On May 17, 1993, the U.S. District Court for the Eastern District of Louisiana dismissed this case, ruling that Jon Khachaturian failed to raise a substantial constitutional challenge to the $1,000 contribution limit as applied to his independent candidacy. The district court had previously certified the constitutional questions to the U.S. Court of Appeals for the Fifth Circuit. The appeals court, however, concluded that the certification was premature and remanded the case to the district court with instructions to determine whether certification was merited. The district court found that it was not.
Mr. Khachaturian appealed that decision but, on October 13, 1993, the U.S. Court of Appeals for the Fifth Circuit dismissed his appeal at his own request.
Background
Mr. Khachaturian was an independent candidate for the U.S. Senate in Louisiana's 1992 open primary. His suit, filed shortly before the election, contended that the $1,000 limit on contributions from individuals (2 U.S.C. §441a(a)(1)(A)) discriminated against his candidacy because it prevented him from raising sufficient funds to compete effectively against the incumbent major-party candidate.1 He said that he had contribution pledges of $200,000 but could only accept $75,000 under the limit.
The district court certified his constitutional questions to the court of appeals in accordance with 2 U.S.C. §437h.2
(Mr. Khachaturian also asked the court to prohibit the FEC from enforcing the $1,000 limit against him and to order Louisiana's Secretary of State to place his name on the general election ballot even if he lost the primary. The court denied the motion.)
Remand by Court of Appeals
The court of appeals remanded the case to the lower court with instructions to determine whether Mr. Khachaturian's challenge was frivolous in light of Buckley v. Valeo. In that decision, the Supreme Court upheld the $1,000 contribution limit as constitutional on its face and rejected claims that it discriminated against independent and minor-party candidates. In order for Mr. Khachaturian to present a plausible challenge to the $1,000 limit as applied to his candidacy, the court of appeals said that he would at least have to provide factual support for his argument that "the $1,000 limit had a serious adverse effect on the initiation and scope of his candidacy."
Dismissal by District Court
The district court said that Mr. Khachaturian "fail[ed] to come even close" to alleging facts suggesting that amounts in excess of the $1,000 limit would have affected the outcome of the election. The court concluded: "The law is clear...that the $1,000 campaign contribution limit applies to minor party candidates....As a matter of law, the plaintiff fails to raise a colorable constitutional claim." The court therefore granted the FEC's motion to dismiss. (Civil Action No. 92-3232, Section F.)
Source: FEC Record, August 1993, p. 5; and December 1993, p. 3.
Khachaturian v. FEC, 980 F.2d 330 (5th Cir. 1992) (en banc); No. 92-3232 (E.D. La. May 10, 1993), on remand.
1 Mr. Khachaturian had made similar claims in an advisory opinion request in which he asked for an exemption from the $1,000 limit on constitutional grounds. In its response, AO 1992-35, the Commission said that it did not have jurisdiction to rule on the constitutionality of the limit but noted that the Supreme Court had upheld the limit in Buckley v. Valeo.
2 Section 437h states: "The district court immediately shall certify all questions of constitutionality of this [Federal Election Campaign] Act to the United States court of appeals for the circuit involved, which shall hear the matter sitting en banc."
KOCZAK v. FEC
On February 14, 1984, the U.S. Court of Appeals for the District of Columbia Circuit denied Mr. Stephen A. Koczak's petition for a writ of mandamus compelling certain FEC actions. (Stephen A. Koczak v. FEC, No. 84-5086, February 9, 1984.) In his suit, Mr. Koczak had asked the appeals court to order the FEC to:
Source: FEC Record, April 1984, p. 10.
1 Presidential primary candidates receiving public funds must agree to limit spending to a prescribed amount in each state. 11 CFR 110.8(a)(2).
KRIPKE v. FEC
On October 26, 1990, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment, thereby dismissing Dr. Daniel F. Kripke's suit against the agency. Dr. Kripke alleged that the FEC had acted contrary to law by failing to act on his administrative complaint within 120 days. See 2 U.S.C. §437g(a)(8)(A). The court stated that "[t]here is no statutory requirement that the Commission act within 120 days." The court went on to say that, in ruling on an action such as Dr. Kripke's, the court "must presume valid action, act deferentially and withhold its hand unless it appears that the Commission has been arbitrary and capricious. [citations deleted.]"
In this case, the court found that there had been no unreasonable delay and that the agency had not acted arbitrarily or capriciously in its handling of the matter. Accordingly, the court granted summary judgment to the FEC.
Source: FEC Record, December 1990, p. 4.
Kripke v. FEC, No. 90-1597 (D.D.C. Oct. 26, 1990) (memorandum).
LaROUCHE v. FEC (92-1100)
On July 2, 1993, the Court of Appeals for the District of Columbia Circuit1 directed the Commission to certify matching funds to Lyndon LaRouche, Jr., for his 1992 Presidential primary campaign. The court held that the Commission did not have statutory authority to deny matching funds based on its conviction that Mr. LaRouche would fail to keep his promise to comply with the law.
The Supreme Court, without comment, refused to review the appeals court decision.
In February 1992, the agency determined that Mr. LaRouche's written agreement and certification to comply with the lawa requirement for receiving matching fundswere not made in good faith, based on his long record of noncompliance with the federal campaign law and his criminal indictments and convictions for fraud. The Commission therefore found he was not eligible for matching funds. Mr. LaRouche immediately challenged the decision in a suit filed with the D.C. Circuit.2
The court reversed the FEC's decision, holding that the statute did not grant the agency the authority to evaluate the reliability of a candidate agreement.
Mr. LaRouche had argued that the law's enforcement provisions, which grant the FEC the authority to take action with respect to past or ongoing violations of the law, implied a Congressional intent to withhold FEC authority to assess a candidate's future likelihood of violating the law. The court agreed, observing that the voters should be the ones to judge a candidate's integrity.
The court further noted that Congress intended public funds to be dispensed on a nondiscriminatory basis: "Any inquiry into the bona fides of candidates' promises would take the Commission into highly subjective territory that would imperil the assurance of even-handed treatment."
The FEC had argued that its position was supported by the court's decision in Committee to Elect Lyndon LaRouche v. Federal Election Commission (CTEL),3 where the court allowed the agency to consult reports filed by the candidate's past campaign when deciding whether to accept his current threshold submission for matching funds. The court, however, said that CTEL stressed the need to apply objective standards when evaluating a matching fund submission, quite different from the use of subjective criteria "to evaluate a candidate's character."
The court also rejected the FEC's claim that its position was upheld in another suit, In re, Carter-Mondale Reelection Committee, Inc.4 "We find nothing in Carter-Mondale to undermine CTEL's general view that in the absence of an explicit authorization by Congress the Commission may not deny funds on the basis of its view of a candidate's subjective intent."
The majority opinion was filed by Judge Williams; an opinion concurring in part and dissenting in part was filed by Judge Wald. She said that the Commission had exceeded its statutory authority only in its consideration of Mr. LaRouche's criminal convictions (mail fraud and conspiring to defraud the IRS), since they were not directly related to his campaign. However, she also said: "I do not believe that the statute requires that the FEC, in determining a candidate's eligibility for public monies, disregard evidence in its own files that indicates that a candidate may well intend to defraud the Commissionand the American taxpayer."
Source: FEC Record, September 1993, p. 3; and January 1994, p. 12.
LaRouche & Democrats for Economic Recovery '92 v. FEC, 996 F.2d 1263 (D.C. Cir.), cert. denied, 114 S. Ct. 550 (1993).
1 The three-judge panel consisted of Judges Wald, Buckley and Williams.
2 Commission actions under the Presidential public funding law are directly reviewable by this court. 2 U.S.C. §9041.
3 613 F.2d 834 (D.C. Cir. 1979).
4 642 F.2d 538 (D.C. Cir. 1980).
LaROUCHE v. FEC (92-1555)
On July 8, 1994, the U.S. Court of Appeals for the District of Columbia Circuit1 upheld an FEC determination ordering the 1988 LaRouche Presidential campaign to return $109,149 in federal matching funds to the U.S. Treasury.2 The court had previously denied the FEC's motion to dismiss this case. (Civil Action No. 92-1555.)
Background
On May 26, 1988, after receiving less than 10 percent of the vote in two consecutive primaries, Lyndon LaRouche became ineligible to receive matching funds to continue his campaign but was still entitled to matching funds to help defray preexisting net campaign debts of about $330,000. On that basis, the campaign continued to receive matching fund payments through October 1988. However, an FEC audit later found that, by July 22, the campaign had sufficient matching funds and private contributions received after the date of ineligibility (DOI) to satisfy the debt. The agency therefore ordered the campaign to return $109,149 in matching fund payments made after that date. This repayment determination was based on an FEC regulation, 11CFR 9034.1(b), which states that a candidate can receive post-DOI matching funds to the extent that, on the date of payment, the sum of matching funds and contributions "received on or after the date of ineligibility" [emphasis added] does not exceed remaining net debts.
The LaRouche campaign challenged the FEC regulation as unreasonable and contrary to the intent of the public funding statute to encourage participation in the political system. Specifically, the campaign argued that, under a fair reading of the statute and FEC regulations, the campaign was entitled to collect matching funds for contributions received after the DOI without having to credit the contributions against the net debts figure. Otherwise, the campaign said, the candidate would be limited in his ability to continue the campaign.
Ruling on Repayment Determination
In its July 1994 ruling, the court upheld the contested repayment determination, finding that the FEC's interpretation of its own regulation was "compelling" and its interpretation of the statute, reasonable. The statute "make[s] clear," the court said, "that Congress wished to restrict the availability of matching payments to candidates it considered viable."
The court rejected several other arguments made by the LaRouche campaign,
including the claim that the FEC's repayment determination had improperly
created a new rule to address post-DOI matching fund entitlements when the
candidate continues to campaign. The court said that
the Commission had merely concluded that "the existing rule was not
affected by Mr. LaRouche's decision, in 1988, to continue the good fight
rather than to wind up his campaign...."
Ruling on Motion to Dismiss
In an earlier ruling on April 20, 1993, the court rejected the FEC's argument that the case should be dismissed because the LaRouche campaign was late in filing its petition for review with the court.
Under the statute, petitions for review of repayment determinations must be filed "within 30 days after the agency action by the Commission for which review is sought." 26 U.S.C. §9041(a).
The FEC made its final repayment determination with respect to the 1988 LaRouche campaign on September 17, 1992, and notified the campaign in a letter dated September 22. The petitioners filed their petition with the court on October 22, 30 days after the September 22 letter date but 35 days after the September 17 determination.
The FEC argued that the statutory "agency action" language referred to the date the agency made the repayment determination. Because the petition was filed 35 days after that date, the FEC contended, it should be dismissed. The court, however, stated that "[b]oth the [Matching Payment Account] Act and the Commission's regulations lead us to conclude that the 30-day review period...runs from the notice date...." The court noted that, under 26 U.S.C. §9038(b)(1), "a candidate's repayment obligation matures only upon notice from the Commission" and that FEC regulations "repeatedly provide that a limitation period begins after the FEC gives notice of its decision...."
Holding that the 30-day period for filing a review petition began on September 22, the court found that the petition was filed on time and therefore refused to dismiss the case.
Source: FEC Record, June 1993, p. 8; and
September 1994, p. 7.
LaRouche Democratic Campaign '88 v. FEC, 990 F.2d 641 (D.C. Cir.
1993) (denying motion to dismiss); 28
F. 3d 137 (D.C. Cir. 1994) (affirming final repayment determination).
1 Petitions challenging FEC repayment determinations are filed with this court.
2 The entire repayment was $151,260; only $109,149 was contested.
LAROUCHE v. STATE BOARD OF ELECTIONS
On April 4, 1985, the U.S. Court of Appeals for the Fourth Circuit issued an opinion in LaRouche v. State Board of Elections which reversed a ruling by the U.S. District Court for the Western District of North Carolina concerning Mr. LaRouche's eligibility for the ballot. The district court had ruled that Lyndon H. LaRouche, a publicly funded Presidential primary candidate in 1984, had met the ballot access requirements for the state's 1984 Presidential primary. The appeals court found that the district court had erred in issuing a preliminary injunction to bar holding the primary election without Mr. LaRouche's name on the ballot. Finally, the appeals court noted that, although its ruling came after the 1984 Presidential primary and general elections had been held, the appeal was "not moot because it present[ed] facts which [were] 'capable of repetition, yet evading review.'" See 758 F.2d 998 (1985).
Background
To qualify for Presidential primary ballot access under North Carolina law, an individual must meet the eligibility requirements for Presidential primary matching funds spelled out in 26 U.S.C. §9033. Under this section, among other requirements, the candidate must agree to repay any funds which, based on an FEC audit of the candidate's campaign, are owed to the U.S. Treasury. 11 CFR 9033.1 and 9033.2.
On January 26, 1984, the Commission made an initial determination that Mr. LaRouche had not established matching fund eligibility for the 1984 election because he had failed to live up to this agreement to repay funds) in his 1980 campaign.1 Pursuant to the FEC's decision, the North Carolina State Board of Elections decided that Mr. LaRouche's name could not be placed on the state's 1984 Presidential primary ballot.
In response to the elections board's decision, Mr. LaRouche filed suit with the federal district court seeking an injunction to bar the primary election, unless the elections board placed his name on the ballot.
District Court Ruling
The district court found that the state's adoption of the federal matching fund eligibility requirements as part of the requirements for access to the state's Presidential primary ballot did not violate due process of law. Nevertheless, the court found that the board had erred in denying Mr. LaRouche ballot access. The court was persuaded by Mr. LaRouche's argument that the FEC's refusal to certify his eligibility for matching funds was erroneous. The court therefore issued a preliminary injunction barring the primary election. (Subsequently, the appeals court stayed the district court's injunction, and the primary election was held without Mr. LaRouche's name on the ballot.)
Appeals Court Ruling
The appeals court agreed with the district court's conclusion that the state could lawfully adopt the federal criteria. However, the appeals court found that "the record discloses that LaRouche had not complied with 26 U.S.C. §9033(a)(3), providing that the candidate agree to pay amounts owed based on FEC audits. Due to LaRouche's failure to honor his §9033(a)(3) agreement concerning the 1980 Presidential election, the FEC legitimately concluded that LaRouche's §9033(a)(3) agreement for the 1984 Presidential election was inadequate." Consequently, "since LaRouche did not fulfill all the federal criteria, the district court erred in enjoining the primary election from proceeding without LaRouche's name on the ballot."
Source: FEC Record, August 1985, p. 7.
1 On April 12, 1984, after Mr. LaRouche's 1980 campaign made the required repayments, the Commission certified that Mr. LaRouche was eligible for Presidential primary matching funds. 11 CFR Parts 9033 and 9036.
LEAGUE OF WOMEN VOTERS v. FEC
The League of Women Voters of the United States (LWVUS) filed a complaint in the U.S. District Court for the District of Columbia against the FEC asking that the court declare null and void that portion of the Commission's Policy Statement on Presidential Debates issued August 30, 1976, which prohibited contributions from corporations and labor organizations to the League of Women Voters Education Fund (the Fund) for purposes of defraying expenses related to the 1976 televised Presidential debates between Jimmy Carter and Gerald Ford, sponsored by the Fund. Such corporate and union contributions, the FEC had said in its statement, would be "in connection with" a federal election and would therefore be prohibited under the Act. The Policy Statement had expressed the Commission's view, however, that the Fund could accept funds from political action committees established by corporations or labor organizations to pay for the debates.
The Commission argued that the "court has no jurisdiction over this action because the Commission's policy statement is not a final agency action." The policy statement "expresses its view of what interpretation of the law it would seek to enforce..." and "...represents an attempt by the Commission to give informal advice in an unchartered area of the law."
The court denied the Commission's motion to dismiss, after which the Commission filed its answer to the original complaint.
Source: FEC Annual Report 1977, p. 20.
LYTLE v. FEC
On December 13, 1994, the U.S. District Court for the Middle District of Tennessee dismissed this case without prejudice due to plaintiff's failure to attend the December 9 initial case management conference. (Civil Action No. 3-94-0946.)
Terry L. Lytle, an independent U.S. Senate candidate, had asked the court to find it unconstitutional for U.S. Senate candidates in Tennessee to accept contributions from out-of-state sources.
The plaintiff argued that:
The plaintiff also had asked the court to remove the defendant candidates from the Senate race or postpone the Senate election and order them to refund all out-of-state contributions.
Source: FEC Record, January 1995, p. 10; and February 1995, p. 7.
Lytle v. FEC, No. 3-94-0946 (M.D. Tenn. Oct. 25, 1994).
MAINE RIGHT TO LIFE COMMITTEE v. FEC
On February 15, 1996, the U.S. District Court for the District of Maine ruled that the FEC's regulation at 11 CFR 100.22(b) exceeded the FEC's statutory authority because it broadened the definition of express advocacy beyond the Supreme Court's interpretation. Buckley v. Valeo and Massachusetts Citizens for Life v. FEC. This court case marked the first judicial review of the FEC's definition of express advocacy.
On October 18, 1996, the U.S. Court of Appeals for the First Circuit upheld the district court decision. The appeals court said it made its ruling "for substantially the reasons set forth in the district court opinion." The appeals court also cited FEC v. Christian Action Network, where a district court, in a decision summarily affirmed by the U.S. Court of Appeals for the Fourth Circuit, ruled that CAN's television and newspaper ads purchased as independent expenditures with corporate funds were not prohibited by 2 U.S.C. §441b because they contained no express advocacy.
On October 6, 1997, the Supreme Court denied the Solicitor General's request for it to hear this case.
Background
The Maine Right to Life Committee (MRLC) is a nonprofit membership corporation established for the purpose of advocating pro-life stances. MRLC uses its funds to create and distribute a newsletter that includes discussions of federal candidates' stances on pro-life issues.
Legal Analysis
The Federal Election Campaign Act (the Act) contains a broad prohibition against using corporate and labor organization money in connection with a federal election. 2 U.S.C. §441b.
The Supreme Court, citing First Amendment concerns, explicitly limited the scope of §441b in its Buckley and MCFL decisions. The Court held that the ban on corporate and labor organization money could only be constitutionally applied in instances where the money is used to expressly advocate the election or defeat of a clearly identified candidate for federal office. The Buckley decision listed examples of specific phrases that the Court said constituted express advocacy. The FEC incorporated this list in its definition of express advocacy at 11 CFR 100.22(a).
However, subpart (b) of 11 CFR 100.22 is based, inter alia, on the decision of the U.S. Court of Appeals for the Ninth Circuit in FEC v. Furgatch. The Furgatch case involved a communication that criticized President Carter and included the phrase: "Don't let him do it." The court held that this communication contained express advocacy and supported this conclusion by noting that the timing of the message coincided with the eve of the 1980 Presidential general election. The Court of Appeals reasoned that language may be said to expressly advocate a candidate's election or defeat if, when taken in context and with limited reference to external events, it can have no other reasonable interpretation.
District Court Decision
The court held that the Supreme Court's MCFL decision and a decision of the First Circuit in Faucher v. FEC supported using Buckley's list of phrases as a bright-line test to detect express advocacy. The rigid approach of a bright-line test, noted the court, avoids the chilling of free speech that occurs when the communicator is uncertain about whether or not his or her message contains express advocacy. Further, the idea that a message's content might become express advocacy as an election nears adds to the chilling effect of 11 CFR 100.22(b) on free speech.
The court recognized the difficulty the FEC faces in crafting a regulation that effectively defines express advocacy, but noted that the Buckley, Faucher and MCFL decisions required it to safeguard First Amendment interests over the interest of keeping corporate and labor organization money out of the electoral process. Based on these precedents, therefore, the court ruled that 11 CFR 100.22(b) was invalid because it defined express advocacy in broader terms than the Buckley, MCFL and Faucher decisions.
The court dismissed MRLC's other claims for injunctive and declaratory relief.
Appeals Court Decision
The U.S. Court of Appeals for the First Circuit upheld the lower court ruling that part of the FEC's regulation defining express advocacy (11 CFR 100.22(b)) was invalid.
Supreme Court Action
On October 6, 1997, the Supreme Court denied the Solicitor General's request for it to hear this case.
Source: FEC Record, April 1996, p. 9; December 1996, p. 1; and November 1997, p. 2.
Maine Right to Life Committee, Inc. v. FEC, 914 F. Supp. 8 (D.Me. 1996), aff'd, 98 F.3d 1 (1st Cir. 1996), cert. denied, 118 S. Ct. 52 (1997).
MARTIN TRACTOR CO. v. FEC
This suit, filed on July 7, 1978, challenged the constitutionality of
Section 441b of the Act, which limits solicitations by corporations and
their separate segregated funds (PACs) of voluntary contributions to
the PACs.
Plaintiffs' Arguments
Three corporations and their affiliated PACs, three executives and one hourly employee of one of the corporations were the plaintiffs in this suit. They sought injunctive relief and a declaratory judgment that 441b of Title 2 is an unconstitutional violation of plaintiffs' rights under the First and Fifth Amendments of the United States Constitution. Specifically, plaintiffs alleged that:
Plaintiffs argued that the harm brought about by Section 441b was actual, not hypothetical, because plaintiffs have limited their solicitation activities, fearing the imposition of the civil and criminal sanctions contained in the Act.
Commission's Arguments
The FEC petitioned the court to dismiss the suit, arguing first that the court lacked jurisdiction because:
The Commission also argued that the complaint did not present a "case or controversy" because plaintiffs can make no showing of present, direct injury resulting from Section 441b. The Commission made the additional argument that plaintiffs failed to state a complaint upon which relief could be granted. In response to the plaintiffs' contention that the term "solicitation" is impermissibly vague, the FEC argued that the term has been employed in a wide variety of federal statutes without further definition and with no apparent need to "guess at its meaning."
District Court Ruling
On November 18, the U.S. District Court for the District of Columbia granted the Commission's motion to dismiss the suit. The court said that the special provision of 2 U.S.C. §437h(a), expediting judicial review of constitutional issues, is inapplicable to the plaintiffs. The individual plaintiffs sue "not in their individual capacities but rather to vindicate the rights of the corporate entities. That derivative right was not the constitutional right of an 'individual eligible to vote' which Congress considered 'appropriate' for vindication in a declaratory judgment action under this section [437h]." Moreover, the court held that the plaintiffs presented no case or controversy sufficiently ripe for decision by a federal court. Plaintiffs filed an appeal.
Appeals Court Ruling
On May 8, 1980, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the opinion of the district court (No. 78-2080).
Source: FEC Record, February 1979, p. 3.
Martin Tractor Co. v. FEC, 460 F. Supp. 1017 (D.D.C. 1978), aff'd, 627 F.2d 375 (D.C. Cir.), cert. denied, 449 U.S. 954 (1980).
McDONALD v. FEC
Background
Mr. George T. McDonald, a 1984 candidate for a House seat representing New York's 15th Congressional district, filed suit in the U.S. District Court for the District of Columbia seeking review of the FEC's dismissal of an administrative complaint (Civil Action No. 84-2710). In his complaint, filed with the FEC on May 9, 1984, Mr. McDonald claimed that Andrew Stein, a state official opposing him for the House seat, had used funds from his 1981 campaign committee for state office (Stein '81) to finance his 1984 Congressional campaign (Stein for Congress '84). Specifically, Mr. McDonald alleged that Mr. Stein had illegally used state campaign funds (consisting of corporate contributions and unrepaid loans) to make media expenditures for his Congressional candidacy.
On May 4, 1984, the respondent had submitted a request to the FEC for an investigation into specific expenditures made by the 1981 state campaign on behalf of Mr. Stein. The FEC then merged the respondent's request (i.e., a pre-MUR) with Mr. McDonald's administrative complaint.
Mr. McDonald asked the court to declare that:
District Court Ruling
On October 5, 1984, the U.S. District Court for the District of Columbia granted the FEC's motion to dismiss George T. McDonald v. FEC on grounds that Mr. McDonald had failed to pursue his legal claims and to meet the statutory deadline for filing his suit. See 2 U.S.C. §437g(a)(8)(B).
Source: FEC Record, October 1984, p. 9; and December 1984, p. 4.
McDonald v. FEC, No. 84-2710, (D.D.C. October 5, 1984).
McINTYRE v. OHIO
On April 19, 1995, the U.S. Supreme Court ruled that an Ohio regulation prohibiting anonymous political literature violated the First Amendment. This decision reversed the judgment of the Ohio Supreme Court.
[Although the FEC was not a party to this case, which involves state election law, the opinion is summarized here because the Court's holdings and rationale may have future relevance to aspects of federal election law.]
Background
In April 1988, Margaret McIntyre distributed leaflets she produced to persons attending a public meeting to discuss a referendum on a proposed school tax levy. These leaflets expressed Mrs. McIntyre's opposition to the levy. Ohio Code, §3599.09(A), requires political literature to include the name and address of the issuer. Some of Mrs. McIntyre's leaflets were anonymous, yet she continued to distribute them even after she was made aware of §3599.09(A).
The Ohio Elections Commission fined Mrs. McIntyre $100 for violating §3599.09(A). On review, the case climbed to the Ohio Supreme Court, which upheld the $100 fine.
The First Amendment and Overriding State Interests
In arriving at its decision to overturn the Ohio court's ruling, the U.S. Supreme Court first determined that anonymous political speech is protected under the First Amendment. In support of this notion, the Court stated that:
The Court recalled, for example, that the Federalist Papers, which favored the ratification of the Constitution, were published under fictitious names.
The Court's analysis focused on evaluating the state's interest in curbing anonymous speech. The Court cited First National Bank of Boston v. Bellotti as a precedent for applying the following test: A government-imposed infringement on the First Amendment is tolerable if the infringement serves an overriding public interest. Additionally, Talley v. California requires that laws must be narrowly tailored so as to impact only on speech that threatens the public interest.
In the case at hand, Ohio maintained that §3599.09(A) served the state's interest in preventing the dissemination of fraudulent and libelous statements.
The Court, however, found that Ohio has a number of other regulations aimed at preventing fraud and libel. While acknowledging that §3599.09(A) may help to enforce the other prohibitions against the dissemination of false political information, the Court did not believe this justified the broad prohibition at §3599.09(A).
Ohio also argued that the regulation, by requiring political messages to include the issuer's name and address, provided voters with information on which to evaluate the message's worth. The Court dismissed this argument by noting that in the case of a leaflet written by a private citizen who is not known by the recipient, the name has no significance.
The Court thus reasoned that Ohio's interests were not sufficient to justify an infringement upon the First Amendment.
Reconciling McIntyre with Buckley v. Valeo
In closing, the Court distinguished this case from its 1976 landmark decision in Buckley v. Valeo, which dealt with the constitutionality of the Federal Election Campaign Act. The Court explained that Buckley addressed the issue of mandatory disclosure of campaign-finance expenditures; it did not involve a prohibition of anonymous campaign literature.
The Court stated that: "Though ... mandatory reporting undeniably impedes protected First Amendment activity, the intrusion is a far cry from compelled self-identification on all election-related writings."
The Court pointed out that the law addressed in the Buckley decision is narrowly tailored to serve the public interest of campaign finance disclosure. The law regulates only candidate elections, and not referenda and other issue-based ballots. The Court stated, "In candidate elections, the government can identify a compelling state interest in avoiding the corruption that might result from campaign expenditures."
Source: FEC Record, June 1995, p. 12.
McIntyre v. Ohio, No. 93-986 (U.S. Supreme Court, Apr. 19, 1995).
MILLER v. FEC
On June 29, 1989, the U.S. District Court for the District of Columbia denied the plaintiff's motion for summary judgment in Harry P. Miller, Jr. v. FEC (Civil Action No. 89-0094).
Mr. Miller filed suit in January 1989 claiming that the Commission had
acted contrary to law in dismissing an administrative complaint that he
had filed the previous October against Bush-Quayle 88, the 1988 Republican
Presidential general election campaign committee. The complaint had alleged
that several Texas state officials had conducted fraudulent activities on
behalf of the Bush-Quayle campaign. Informed of the charges by the Commission,
the respondents denied any knowledge of the alleged violations. The Commission
subsequently voted to find "no reason to believe" that the violations
alleged by Mr. Miller had occurred and dismissed
the matter.
Finding that the Commission's dismissal of Mr. Miller's complaint was reasonable, the court said that the plaintiff failed to show that the FEC had before it any evidence of illegal activity. The court concluded, "Considering the unfocused allegations...and respondents' reply [indicating no knowledge of criminal activity], the FEC's decision to dismiss Mr. Miller's complaint was clearly not 'contrary to law.'"
On April 25, 1990, the U.S. Court of Appeals for the District of Columbia Circuit granted the FEC's motion for summary affirmance of the district court's decision in favor of the FEC. (Civil Action No. 89-5394.)
For the reasons stated in the district court opinion, the appeals court granted the FEC's motion for summary affirmance of the lower court decision, stating: "The merits of the parties' positions are so clear as to justify summary action."
Source: FEC Record, September 1989, p. 8; and October 1990, p. 7.
Miller v. FEC, No. 89-0094. (D.D.C. 1989) (memorandum opinion), aff'd mem., 923 F.2d 201 (Table) (D.C. Cir. 1990) (unpublished disposition).
MINNESOTA CITIZENS CONCERNED FOR LIFE v. FEC
On April 19, 1996, the U.S. District Court for the District of Minnesota ruled that the FEC's regulations defining and governing qualified nonprofit corporations (11CFR 114.10) were unconstitutional on First Amendment grounds.
On May 7, 1997, the U.S. Court of Appeals for the Eighth Circuit affirmed the district court's decision.
Legal Analysis
The Federal Election Campaign Act (the Act) contains a broad prohibition against using corporate and labor organization money in connection with a federal election. 2 U.S.C. §441b.
In FEC v. Massachusetts Citizens for Life (MCFL) 479 U.S. 238 (1986), the Supreme Court, citing First Amendment concerns, concluded that §441b could not constitutionally prohibit certain nonprofit corporations from making independent expenditures.1 In that case, the Supreme Court ruled that independent expenditures made by MCFL were exempt from the ban at §441b because MCFL had the following essential features:
The FEC promulgated the regulations at 11 CFR 114.10 to incorporate the MCFL decision into its regulatory framework. These regulations established a test to determine whether a corporation qualified for exemption from the Act's prohibition against corporate independent expenditures.
Minnesota Citizens Concerned for Life (MCCL), a nonprofit corporation, brought suit to challenge the constitutionality of the FEC's new regulations. MCCL alleged that it does not qualify to make independent expenditures under the FEC's regulations because:
District Court Ruling
The court noted that the U.S. Court of Appeals for the Eighth Circuit, in addressing a similar Minnesota state law, rejected the argument that MCFL had created a bright-line test for exemption from the Act's prohibition against corporate independent expenditures. Day v. Holohan (34 F.3d 1356 (8th Cir., 1994). Since the judicial district of Minnesota is in the eighth circuit, Day constituted controlling law in this district court. The court also noted the decision of the U.S. Court of Appeals for the Second Circuit in FEC v. Survival Education Fund, 65 F.3d 285 (2nd Cir., 1995).
The Day decision concluded that, by disqualifying from the independent-expenditure exemption those nonprofit, membership corporations that engaged in some business activities and/or accepted corporate donations, Minnesota's regulations were too restrictive and not narrowly tailored to serve a compelling governmental interest. Relying on Day, the district court ruled that these aspects of the FEC's regulations at 11CFR 114.10(c) were unconstitutional.
The Day decision, however, did not address other aspects of the FEC's regulations, which plaintiffs had challenged in this suit, including: the imposition of reporting requirements on those corporations that make independent expenditures under the MCFL exemption (11CFR 114.10(e)); and the requirement that exempt corporations disclose to their contributors that their donations may be used for political purposes (11CFR 114.10(f)).
Instead of deciding whether these parts of the regulation were independently unconstitutional, the district court found that the unconstitutional provision was not severable under the severability doctrine: A regulation that contains unconstitutional provisions must be stricken in its entirety unless that which remains after the unconstitutional provisions are excised is fully operative as law and the body enacting the regulation would have enacted the constitutional provisions even in the absence of those which are unconstitutional. Because the court found that the FEC's definition of a qualified nonprofit corporation at 114.10(c) was flawed and that that provision was not severable from the rest of 114.10, the court concluded that the entire provision at 114.10 was void.2
Appeals Court Ruling
The appeals court found that, contrary to the FEC's arguments, MCCL had standing to bring this case to court. It also found that MCCL's challenge to the regulations was "ripe" for judicial resolution, and, on the authority of the Day decision, the court then affirmed the district court's declaratory judgment voiding the Commission's regulations.
Article III standing requires that a party show actual injury, a casual relationship between that injury and the challenged conduct and the likelihood that a favorable decision by the court will redress the alleged injury.3 The FEC argued that MCCL lacked standing because voiding the statute would not redress its alleged injury. The FEC maintained that, even without the regulation, MCCL would have to prove that it was entitled to make independent expenditures under MCFL and Day. The appeals court found that MCCL had either to make significant changes to its operations or risk sanctions for violating FEC regulations and concluded that MCCL did not need to show that a favorable decision would relieve "every" injury. According to the appellate court, the district court redressed an injury for MCCL by declaring that it could continue to make independent expenditures if it met the exemptions defined in Day.
While the courts have been wary of pre-enforcement challengessuch as MCCL's challenge to the Commission's regulations before the organization has actually been alleged to have violated themthis stance is not always applicable. The Supreme Court has held that "the Administrative Procedure Act authorizes a pre-enforcement challenge to agency regulations if the issue is 'fit' for prompt judicial decision and if failure to review would cause significant hardship to the parties." In this case, the appeals court said that the legal issuewhether the Eighth Circuit's interpretation of MCFL in Day invalidates portions of the Commission's regulationswas "fit for prompt determination." Moreover, the court said, court action in this case would also relieve MCCL of a hardship because its representatives would now know that MCCL's methods of operation would be tested under Day, rather than under the Commission's regulations.
On the merits, the appellate court agreed with the district court that Day required voiding 11 CFR 114.10 (c)(2) and (c)(4). Only the court of appeals sitting en banc, the court noted, could overturn Day's interpretation of the Supreme Court's MCFL decision. Furthermore, because the district court found the remainder of 11 CFR 114.10 not to be severable from the invalid portionsa ruling the Commission had not appealed11 CFR 114.10 as a whole was properly declared void.
Source: FEC Record, June 1996, p. 3; and July 1997, p. 2.
Minnesota Citizens Concerned for Life: FEC v., 936 F. Supp. 633 (D. Minn. 1996), aff'd, 113 F.3d 129 (8th Cir. 1997).
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.
2 Although the court voided 11CFR 114.10 in its entirety, the court noted that the FEC had the authority to impose certification and reporting requirements and to require qualified nonprofits to inform potential donors that their donations could be used for political purposes. These provisions, had they not been inextricably linked to the unconstitutional provisions, would have been entitled to deference.
3 Lujan v. Defenders of Wildlife, 504-U.S. 555, 560-61 (1992).
MOTT v. FEC
District Court Ruling
On June 30, 1980, the U.S. District Court for the District of Columbia dismissed a suit in which Stewart R. Mott, Rhonda K. Stahlman and the National Conservative Political Action Committee (NCPAC) had sought declaratory and injunctive relief against the FEC. In its motion to dismiss the suit (Mott v. FEC, Civil Action No. 79-3375), the FEC argued that some of the claims presented in the suit were not ripe for consideration by the court while others failed to state a claim on which relief could be granted. In its role as amicus curiae, Common Cause had also filed a brief arguing dismissal of the suit.
Plaintiffs had challenged the constitutionality of provisions of the Act, FEC regulations, advisory opinions and other written interpretations which regulate independent political activity by prescribing limits on contributions from individuals, groups and political committees to other individuals, groups and political committees which make independent expenditures. Plaintiffs claimed that these provisions define the terms "contribution" and "expenditure" in overly broad and vague language.
Mr. Mott proposed that, together with other "like-minded individuals," he would purchase advertising space in The New York Times to express his views on political issues and expressly advocate the election or defeat of several clearly identified federal candidates. Specifically, he claimed that the First Amendment rights of those purchasing the ad would be restricted by provisions of the Act illegally requiring that:
The district court determined that the constitutional issues raised by Mr. Mott were not ripe for judicial decision in the absence of a more fully developed factual record. The claim that Mr. Mott wished to "join with others" in purchasing the advertising was broad enough to encompass a single purchase of advertising space as well as a series of advertisements and solicitations by a full-fledged political committee. Further, the court noted that Mr. Mott should have requested an advisory opinion from the FEC on the application of the Act to this proposed activity before seeking a review by the court. Both NCPAC and Ms. Stahlman challenged the constitutionality of limits on contributions by individuals to political committees which make independent expenditures. Ms. Stahlman's and NCPAC's claims raised three constitutional issues:
The district court pointed out that, in the Buckley v. Valeo decision, the Supreme Court had upheld the constitutionality of the contribution limits. (Buckley v. Valeo, 424 U.S. 1 at 38 (1976).) The district court said that, although the Supreme Court had not specifically addressed the $5,000 limit on individual contributions to political committees, its "reasoning...clearly indicated that the restriction is constitutional." The Supreme Court had reasoned that a limit on contributions infringed far less on First Amendment rights than did a limit on expenditures, because the contribution limits involved restrictions on indirect, rather than direct, political expression. Further, whatever infringement did occur was justified by the need to curb the "actuality and appearance of corruption" flowing from large individual contributions. (Buckley v. Valeo, 424 U.S. 1 at 26 (1976).)
Appeal
In appealing the district court's decision, NCPAC and Ms. Stahlman reasserted their constitutional challenges. They also asked the appeals court to find "erroneous" the district court's refusal to certify their challenges to the appeals court.
Appeals Court Ruling
On December 8, 1981, the U.S. Court of Appeals for the District of Columbia Circuit issued a memorandum decision in National Conservative Political Action Committee (NCPAC) and Rhonda K. Stahlman v. FEC (Civil Action No. 80-1949). Citing as precedent the Supreme Court's June 1981 decision in California Medical Assoc. (CMA) v. FEC, the appeals court rejected plaintiffs' constitutional challenges and affirmed the district court's disposition of the case.
The appeals court rejected plaintiffs' assertion that NCPAC was not subject to the CMA decision because it not only made contributions but made independent expenditures as well. The court said the CMA decision did apply because NCPAC's activity was not limited to independent expenditures. Moreover, the court held that limits on NCPAC contributors did not impermissibly infringe on their free speech rights because the contributions constituted "speech by proxy" since contributors had no voice in NCPAC's decisions concerning independent expenditures. 101 S.Ct. at 2721-22.
The appeals court also followed precedent set by the CMA decision in rejecting plaintiffs' assertion that unlimited contributions earmarked for NCPAC's independent expenditures would not "risk corrupting or appearing to corrupt the political process in the manner Congress sought to prohibit." 101 S.Ct. at 2723 n. 19; 494 F. Supp. at 137.
Source: FEC Record, September 1980, p. 7; and February 1982, p. 8.
Mott v. FEC, 494 F. Supp. 131 (D.D.C. 1980), aff'd mem. sub. nom. NCPAC v. FEC, 672 F.2d 896 (D.C. Cir. 1981).
NATIONAL CHAMBER ALLIANCE FOR POLITICS v. FEC
This suit challenged the constitutionality of Section 441b of the Act, which limits solicitations by corporations (and their separate segregated funds (PACs)) of voluntary contributions to the PACs.
Plaintiff's Arguments
On July 20, 1978, the National Chamber Alliance for Politics filed suit against the Federal Election Commission challenging the constitutionality of the PAC solicitation provisions and asking for injunctive relief. The plaintiffs included the Chamber of Commerce (a nonprofit corporation), its separate segregated fund, three executives of the two organizations and one board member of the Chamber of Commerce. Plaintiffs argued that, by enumerating those whom the corporation or PAC may solicit, 441b of the Act:
The plaintiffs argued that the harm brought about by Section 441b was actual, not hypothetical, because the plaintiffs have limited their solicitation activities, fearing the imposition of the civil and criminal sanctions contained in the Act.
Commission's Arguments
The Federal Election Commission petitioned the court to dismiss the suit, arguing, first, that the court lacked jurisdiction because:
The Commission also argued that the complaint did not present a "case or controversy" because the plaintiffs can make no showing of present, direct injury resulting from Section 441b. The FEC further argued that the plaintiffs failed to state a claim upon which relief could be granted because §441b did not violate the plaintiffs' First or Fifth Amendment rights. The Commission's arguments are summarized below:
District Court Ruling
On November 22, the court dismissed the suit. The court said that the special provision of 2 U.S.C. §437h(a), expediting judicial review of constitutional issues, is inapplicable to the plaintiffs. The individual plaintiffs sue "not in their individual capacities but rather to vindicate the rights of the corporate entities. That derivative right was not the constitutional right of an 'individual eligible to vote' which Congress considered 'appropriate' for vindication in a declaratory judgment action under this section (437h)." Moreover, the court held that the plaintiffs presented no case or controversy sufficiently ripe for decision by a federal court.
Appeals Court Ruling
The plaintiffs filed an appeal. On June 10, 1980, the U.S. Court of Appeals for the District of Columbia Circuit denied the appeal, holding that the plaintiffs' claims were not ripe for judicial review.
Supreme Court Action
On November 13, 1980, the Supreme Court denied a petition for a writ of certiorari filed by the National Chamber Litigation Center (a legal arm of the Chamber of Commerce of the U.S.) in the suit, National Chamber Alliance for Politics v. FEC (Civil Action No. 78-1333).
Source: FEC Record, February 1979, p. 3; and January 1981, p. 5.
National Chamber Alliance for Politics v. FEC, 627 F.2d 375 (D.C. Cir.), cert. denied, 449 U.S. 954 (1980).
NATIONAL COMMITTEE OF THE REFORM PARTY v. FEC
On February 27, 1998, the U.S. District Court for the Northern District of California dismissed this case after agreeing with the FEC that the plaintiffs had failed to state a claim upon which relief could be granted.
On February 9, 1999, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court's decision. The district court had declined to certify claims brought by the National Committee of the Reform Party (the Committee) to an en banc panel of the appeals court. The district court had determined that the Committee lacked standing in regard to some of its claims and failed to state a claim on which relief could be granted with respect to its remaining claims.
Background
In this case, the Committee, the Reform Party of California, campaign committees of former Reform Party Presidential candidate Ross Perot and an individual voter who supported Mr. Perot in the 1996 Presidential election alleged that:
In addition to these claims, the Committee contended the Republican and Democratic defendants owed it damages under California and federal laws.
Appeals Court Decision
Issue Advertisements. The appellate court found that neither California nor federal law authorized the Committee's suit for damages related to issue advertisements produced by the Republican and Democratic committees. The FEC's power to sue alleged violators of the Federal Election Campaign Act (the Act) is the "exclusive civil remedy" for enforcement of the Act. 2 U.S.C. §437d(e). (Entities may, however, seek judicial review of the agency's dismissal of an administrative complaint alleging violations of the Act.) The Committee argued unsuccessfully that the FEC's "exclusive civil remedy" did not preclude the Reform Party Committee from acting as a private party and suing for damages.
Legislative history is instructive here, the court found. Before the 1976 amendments to the Act, there was confusion over just which agency should enforce the statute. In those amendments, Congress added the word "exclusive" to prohibit enforcement suits by other agencies. There is no indication that Congress was, at the same time, approving private suits. The U.S. Supreme Court has also noted that there is no authority supporting the contention that Congress intended to have anyone other than the government enforce the Act (FEC v. National Conservative Political Action Committee, 470 U.S. 480 (1985)).
In addition, the Commission has a process in place by which entities can pursue their charges that the Act or FEC regulations have been violated.
Commission Composition. The Act states that no more than three members of the Commission may be affiliated with the same political party. 2 U.S.C. §437c(a)(1). Commission seats historically have been equally divided between Democrats and Republicans only. Appellants claimed that this provision violates the Appointments Clause and their rights to free speech and equal protection. The court said that they lacked standing to raise this claim because they did not explain how the relief they requested--the invalidation of the party affiliation provision--would make minority party representation on the Commission more likely.
Fund Act. The Committee's facial challenge to the Fund Act, based on First Amendment and equal protection arguments, is foreclosed by Buckley v. Valeo, the court found. The Supreme Court held that the Fund Act "is a congressional effort, not to abridge, restrict, or censor speech, but rather to use public money to facilitate and enlarge public discussion and participation in the electoral process." Buckley went on to say that the public funding system does not discriminate against minor parties. "[T]he inability, if any, of minor-party candidates to wage effective campaigns will derive not from lack of public funding but from their inability to raise private contributions."
The Committee also argued that, as applied, the Fund Act "invidiously" discriminates against the Reform Party. The appellate court rejected this claim, concluding that the types of complaints expressed by the Reform Party were understood and taken into account by the Supreme Court when it rejected the claims of invidious discrimination in Buckley.
Source: FEC Record, January 1998, p. 2; April 1998, p. 4; and April 1999, p. 4.
NATIONAL CONGRESSIONAL CLUB v. FEC
On February 14, 1985, the National Congressional Club (NCC), a multicandidate political committee, and Jefferson Marketing, Inc. (JMI), a North Carolina corporation that provides media services to political committees, voluntarily dismissed a suit they had filed against the FEC. Plaintiffs had filed their suit with the U.S. District Court for the District of Columbia on January 29, 1985. (Civil Action No. 85-0299.)
In their suit, NCC and JMI sought action against the FEC with regard to the agency's processing of two compliance actions (i.e., matters under review or MURs). The compliance actions were filed against NCC and JMI by Congressman Charles E. Rose (MUR 1503) and the Democratic Party of North Carolina (MUR 1792). In his complaint, filed in October 1982, Congressman Rose alleged that, among other things, JMI had provided media services to his 1982 primary election opponents at less than fair market value, resulting in a prohibited corporate contribution from JMI to the candidates.1 In the ensuing investigation, the General Counsel's office also found that a special relationship may have existed between NCC and JMI. In MUR 1792, the Democratic Party of North Carolina included, among its claims, an allegation concerning the NCC/JMI relationship.
NCC and JMI asked the court to find that the FEC's actions with regard to MURs 1503 and 1792 violated the election law, as well as the First and Fifth Amendments, and were contrary to law. Plaintiffs based these claims on the following allegations:
NCC and JMI also sought an injunction requiring the Commission to comply with provisions of the election law and the Constitution.
Source: FEC Record, March 1985, p. 3.
1 See also Rose v. FEC.
NCPAC v. FEC
On February 15, 1978, the National Conservative Political Action Committee (NCPAC) filed suit against the Federal Election Commission challenging the legality of the Commission's regulation (11 CFR 110.1(g)(1)) and the Commission's Advisory Opinion 1978-1 which provide that the contribution limitations (2 U.S.C. §441a) do not apply to pre-1975 campaign debts. In the case of AO 1978-1, the Commission allowed the Democratic National Committee to retire pre-1975 debts without regard to the contribution limitations.
On April 28, 1978, the court granted the Commission's motion to dismiss with respect to AO 1978-1 and granted summary judgment with respect to 11 CFR 110.1(g)(1). The court cited the following reasons:
Source: FEC Record, June 1978, p. 7.
National Conservative Political Action Committee v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9057 (D.D.C. 1978), aff'd, 626 F.2d 953 (D.C. Cir. 1980).
NRA v. FEC (84-1878 and 86-2285)
On July 31, 1984, the U.S. District Court for the District of Columbia granted the FEC's motion to dismiss as moot a suit filed by the National Rifle Association (NRA) on June 19, 1984 (Civil Action No. 84-1878). In the suit, NRA had asked the court to declare that the FEC's failure to act within 120 days on an administrative complaint NRA had filed on December 1, 1983, was arbitrary, capricious, an abuse of power and contrary to law. (See 2 U.S.C. §437g(a)(8)(A).) The FEC had petitioned the court to dismiss the suit as moot because, on July 31, 1984, the Commission had entered into a conciliation agreement with the respondent, Handgun Control, Inc. (HCI), thereby resolving the claims in NRA's administrative complaint.
On October 19, 1987, the district court dismissed a second suit in which NRA challenged the FEC's dismissal of a subsequent administrative complaint alleging further violations of the election law by HCI (Civil Action No. 86-2285).
Background
At the time of the district court's decision in the second suit, NRA had filed a total of three administrative complaints with the FEC against HCI, an incorporated membership organization that supports restrictions on gun ownership. All three of NRA's complaints challenged HCI's status as a membership organization under the election law.
The first administrative complaint resulted in a conciliation agreement between the FEC and HCI in which the latter was required to reconstitute itself as a membership organization and to pay a $15,000 civil penalty. NRA had alleged that HCI at that time a nonprofit corporation without members and its separate segregated fund, HCI-PAC, had unlawfully solicited contributions from individuals beyond their solicitable class (i.e., the executive and administrative employees and their families). NRA's first lawsuit, charging that the FEC had violated the law by failing to act within 120 days of NRA's filing of the administrative complaint, was dismissed as moot after the conciliation agreement was achieved.
In its second and third administrative complaints, NRA alleged that HCI had not complied with the conciliation agreement and had violated §441b(b)(4)(A)(i) of the election law by soliciting contributions to its separate segregated fund from individuals who were not HCI members.
In dismissing NRA's second administrative complaint, the FEC found that HCI qualified as a membership organization, even though it had improperly applied the membership requirements retroactively to past contributors. With respect to NRA's third administrative complaint, the FEC found that the allegations were virtually identical to those raised in NRA's second complaint. Consequently, the agency dismissed the third complaint.
In its second suit NRA asked the court to declare that the FEC's dismissal of its third administrative complaint was contrary to law and to issue an order directing the FEC to initiate enforcement proceedings against HCI within 30 days of the court's order.
The FEC argued that, under §437g(a)(8)(B) of the election law, a party challenging the agency's dismissal of an administrative complaint must file suit within 60 days after the date of the dismissal. NRA did not petition for review of the FEC's dismissal of its second administrative complaint within the statutory time period. Instead, NRA reasserted its previously dismissed claim in a third administrative complaint, which the FEC contended amounted to nothing more than an attempt to obtain review beyond the 60-day period.
In dismissing NRA's suit, the court concurred with the FEC: "Regardless of how one would characterize the record herein, it is apparent that the issues and facts in all three complaints are substantially similar. More importantly, however, it is clear that the plaintiff failed to appeal the defendant's decision in the second complaint within the time period allowed by law."
On October 26, 1987, NRA filed an appeal of the district court decision with the U.S. Court of Appeals for the District of Columbia Circuit.
Source: FEC Record, September 1984, p. 11; and December 1987, p. 6.
National Rifle Assn. v. FEC, No. 86-2285 (D.D.C. Oct 19, 1987) (unpublished opinion), aff'd, 854 F.2d 1330.
NRA v. FEC (87-5373)
On August 5, 1988, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision in National Rifle Association of America (NRA) v. FEC (Civil Action No. 87-5373), which affirmed an October 1987 decision by the U.S. District Court for the District of Columbia. In its decision, the district court found that a petition for review of the Commission's dismissal of an administrative complaint that NRA had filed against Handgun Control, Inc. (HCI) constituted an untimely appeal of an earlier FEC dismissal of another administrative complaint also filed by NRA against HCI. See 2 U.S.C. §437g(a)(8)(B).
Background
NRA's suit challenged the FEC's dismissal of NRA's third administrative complaint against HCI. NRA's third administrative complaint had alleged violations of the election law by HCI, an incorporated membership organization that supports restrictions on gun ownership. All three of NRA's administrative complaints challenged HCI's status as a membership organization under the election law.
The first administrative complaint resulted in a conciliation agreement between the FEC and HCI. In dismissing NRA's second administrative complaint, the FEC found that HCI had qualified as a membership organization by taking the steps specified in the conciliation agreement resulting from the first complaint, even though it had improperly applied the membership requirements retroactively to past contributors. With respect to NRA's third administrative complaint, the FEC found that the allegations were virtually identical to those raised in NRA's second complaint. Consequently, the agency dismissed the third complaint.
District Court Ruling
In a brief filed with the district court, the FEC argued that, under section 437g(a)(8)(B) of the election law, a party challenging the agency's dismissal of an administrative complaint must file suit within 60 days after the date of dismissal. NRA did not petition for review of the FEC's dismissal of its second administrative complaint within the statutory time period. Instead, NRA reasserted its previously dismissed claim in a third administrative complaint which, the FEC contended, amounted to nothing more than an attempt to obtain review beyond the 60-day period.
In dismissing NRA's suit, the court concurred with the FEC's argument. On October 26, 1987, NRA filed an appeal of the district court's decision with the U.S. Court of Appeals for the D.C. Circuit.
Appeals Court Ruling
In affirming the district court's dismissal of NRA's suit, the appeals court found that "the second and third NRA complaints [were] substantially similar by virtue of the fact that the legal question posed by both was the same: whether an organization that does not provide for an annual meeting at which members may participate in the conduct of corporate business may qualify as a membership organization under section 441b(b)(4)(C).... Having raised that issue in the second complaint and [having] failed to appeal the Commission's order, the NRA cannot obtain judicial review of the issue by the expedient of bringing it (albeit in a more concrete context) before the FEC once again."
The appeals court concurred with NRA's argument that, because it had dismissed the merits of NRA's argument in rejecting its third administrative complaint, the FEC had effectively reopened the issue and had rendered a decision that was, in principle, subject to court review. Nevertheless, the appeals court noted that NRA had failed to make this argument with the district court when the FEC moved to dismiss NRA's suit on grounds that the court lacked subject matter jurisdiction over it. The appeals court concluded that, "having failed to raise the reopening argument as the basis for jurisdiction in the District Court, the NRA is not at liberty to raise it for the first time on appeal."
Source: FEC Record, October 1988, p. 9.
National Rifle Association v. FEC, No. 86-2285 (D.D.C. Oct. 19, 1987) (unpublished opinion), aff'd, 854 F.2d 1330 (D.C. Cir. 1988).
NRA v. FEC (89-3011)
On February 27, 1992, the U.S. District Court for the District of Columbia rejected NRA's challenge to the FEC's dismissal of an administrative complaint. The court ruled that the statutory time bar removed its jurisdiction to review the FEC's decision, since the same issues were considered and dismissed in a previous complaint and NRA failed to challenge that decision within the 60 days allowed by law.
On February 25, 1993, the U.S. Court of Appeals for the District of Columbia Circuit, in a per curiam judgment, affirmed the district court's ruling (No. 92-5078).
NRA had filed several administrative complaints against Handgun Control, Inc. (HCI), an incorporated membership organization. The first complaint challenged HCI's status as a membership organization, alleging that it illegally solicited nonmembers for contributions to its separate segregated fund. This first complaint resulted in a conciliation agreement in which HCI paid a civil penalty and amended its bylaws to qualify as a membership organization with solicitable members.
NRA's second complaint, MUR 1891, alleged that HCI's membership still did not have sufficient rights to qualify as members. The Commission dismissed the complaint, concluding that HCI's amended bylaws satisfactorily established the rights of members by allowing them to participate in annual meetings and to elect a board director. NRA did not seek judicial review of the Commission's dismissal of MUR 1891.
The Commission also dismissed NRA's third complaint against HCI, MUR 2115, because the allegations were "virtually identical" to those raised in the second complaint. This time, NRA sought judicial review of the dismissal. Ruling on this suit, the district court held that NRA's petition constituted an untimely challenge to the FEC's dismissal of MUR 1891, since the issues in both MURs were substantially similar. A court of appeals affirmed that decision. National Rifle Association of America v. FEC, 854 F.2d 1330 (D.C. Cir. 1988).
NRA's most recent administrative complaint, the subject of the present suit, again challenged the status of HCI members. The FEC dismissed this fourth complaint, MUR 2836, because the issues had already been resolved in MUR 1891.
In this court case, NRA argued that the two MURs raised different issues, MUR 1891 dealing with member participation, and MUR 2836 focusing on member control. The court, however, found that "[d]espite the change in language, there remains no material variance between NRA's allegations in MUR 1891 and MUR 2836." The court therefore ruled that, because NRA did not appeal the FEC's decision in MUR 1891 within the 60 days allowed by law, it was barred from doing so in the present case.
The court also rejected NRA's argument that the FEC's dismissal of MUR 2836 qualified for judicial review because the FEC had considered the substantive merits of the complaint. The court found that the FEC did not consider the merits but simply stated that the issues had been resolved in MUR 1891.
The court ruled that it lacked jurisdiction by virtue of the 60-day time bar and accordingly granted the FEC's motion to dismiss the suit.
In affirming the lower court's decision, the appeals court found that the district court had "correctly concluded that appellant's fourth administrative complaint raised issues 'substantially similar' to those resolved in a previous complaint, and that appellant's petition for judicial review was therefore untimely."
Source: FEC Record, April 1992, p. 8; and April 1993, p. 10.
NRCC v. FEC (96-2295)
On November 18, 1996, the U.S. District Court for the District of Columbia issued an order instructing the FEC to supply the National Republican Congressional Committee (NRCC) with regular updates of its progress on the committee's administrative complaint against the actions of labor organizations during the 1996 election cycle. The order, which had been submitted by the parties involved in the suit, also dismissed this case without prejudice.
The NRCC had asked the court to force the FEC to take action, before the election, on three administrative complaints that it had filed with the FEC concerning the AFL-CIO and allied labor organizations. The NRCC had alleged that the labor groups were making massive expenditures coordinated with Democratic candidates, in violation of 2 U.S.C. §441b(a).
The NRCC had filed its administrative complaints with the FEC in February, March and April 1996 and had alleged that the FEC had not acted on those complaints by October 3, 1996, when the Republican committee filed its lawsuit. The NRCC said the FEC's delay could cause it irreparable injury and asked the court to order the FEC to take action before the election.
The settlement agreement requires the FEC to provide NRCC lawyers with confidential updates on the complaint until it is resolved or there is further action by the court.
Source: FEC Record, January 1997, p. 2.
NRSC v. FEC (94-0332)
On March 14, 1995, the U.S. Court of Appeals for the District of Columbia vacated the district court's decision of May 11, 1994, and ordered the court to dismiss the complaint against the FEC as moot. The district court had dismissed the case on the grounds that it was not ripe for adjudication.
District Court Decision
On May 11, 1994, the U.S. District Court for the District of Columbia dismissed this suit in which the National Republican Senatorial Committee (NRSC) had asked the court to stop the FEC from proceeding in an internal enforcement matter opened in 1991, MUR 3204. The NRSC claimed that the FEC's vote to find "reason to believe" that the committee had violated the law and the ensuing investigation were invalid because they took place when the composition of the FEC was unconstitutional. The court ruled that the case was not ripe for adjudication since the FEC had not yet taken "'concrete' action" in MUR 3204. But the court was doubtful whether NRSC would have succeeded on the merits even if its case had been ripe for review.
NRSC had relied on the October 1993 appellate court ruling in FEC v. NRA Political Victory Fund (NRA). In that case, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the FEC lacked authority to bring action against the NRA because the composition of the agency was unconstitutional.1
The court said that NRSC's reliance on NRA was "misplaced" because, in that case, the court of appeals was confronted with an otherwise final district court judgment obtained by an unlawfully constituted Commission against a respondent. By contrast, the court pointed out, in this case, NRSC had filed suit before the FEC had taken final action. The agency had not even voted on whether to find "probable cause to believe" that NRSC had violated the law, the next step in the enforcement process. The court said that the impending vote "will either confirm and ratify what was thought sufficient to warrant an investigation" in 1991, or the FEC will terminate the matter.
Concluding that the NRSC had filed its case prematurely, the court observed that, even had the case been ripe for judicial review, NRSC would have failed to satisfy the standards for a preliminary injunction to stop the FEC from proceeding in the MUR.
Appeals Court Decision
The NRSC's suit became moot because, after the district court's decision, the FEC closed MUR 3204 without finding probable cause to believe the NRSC had violated federal election law. The court of appeals therefore ordered the district court to dismiss the case as moot.
Source: FEC Record, July 1994, p. 2; and May 1995, p. 4.
National Republican Senatorial Committee v. FEC, No. 94-0332 (TJP) (D.D.C. May 11, 1994); No. 94-5148 (D.C. Cir. Mar. 14, 1995).
1 6 F.3d 821 (D.C. Cir. 1993). The court found that the presence of the Clerk of the House and the Secretary of the Senate as nonvoting, ex officio Commission members violated the Constitution's separation of powers doctrine. After the October 1993 NRA ruling was handed down, the FEC immediately reconstituted itself by excluding the ex officio members.
NRWC v. FEC (84-2955)