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On July 31, 2008, the U.S. District Court for the District of Columbia denied EMILY’s List’s motion for summary judgment and granted the FEC’s cross-motion for summary judgment.
On March 11, 2004, the Commission issued a Notice of Proposed Rulemaking on Political Committee Status, which proposed a number of regulatory changes concerning, among other things, the definition of “political committee” and the allocation ratios for PACs. On November 23, 2004, it published final rules that define as "contributions":
(The final rules were published in the November 23, 2004, Federal Register (68 FR 68056). The rules took effect on January 1, 2005.)
The regulations at issue established a new rule for when funds received by political committees in response to certain solicitations must be treated as "contributions" under the Act and thereby must abide by federal limitations and prohibitions. The regulations also modified the Commission’s rules regarding how political committees may allocate spending between federal and nonfederal accounts.
Under current FEC rules, nonconnected political committees that maintain both federal and nonfederal accounts may allocate administrative expenses, costs of generic voter drives and costs of public communications that refer to a political party but not to specific candidates with a minimum of 50 percent federal funds. (The remainder may be allocated to the nonfederal account). 11 CFR 106.6. Public communications and voter drives that refer to one or more clearly identified federal candidates, but not to any nonfederal candidates, must be financed with 100 percent federal funds. 11 CFR 106.6(f)(1). Public communications and voter drives that refer to one or more clearly identified nonfederal candidates but do not refer to any federal candidates may be financed with 100 percent nonfederal funds. 11 CFR 106.6(f)(2).
With regard to solicitations, Commission regulations state that funds received in response to a solicitation must be considered federal "contributions" under the Act if the communication indicates that any portion
of the funds received will be used to support or oppose the election of a
clearly identified federal candidate. 11 CFR 100.57(a). Likewise, if a solicitation refers to a clearly identified federal candidate and a political party, but not to a clearly identified nonfederal candidate, all funds received in response are considered contributions. 11 CFR 100.57(b)(1).
In contrast however, if the solicitation refers to one or more clearly
identified nonfederal candidates, in addition to a clearly identified federal
candidate, at least 50 percent of the funds received must be treated as
contributions under the Act, regardless of whether the solicitation also
refers to a political party. 100.57(b)(2).
EMILY’s List, a nonconnected political action committee (PAC) that maintains both federal and nonfederal accounts, filed a complaint on January 12, 2005, challenging the Commission’s regulations regarding the treatment of funds received in response to certain solicitations and its amended rules regarding federal/nonfederal fund allocation ratios for PACs.
The plaintiff alleged that the Commission exceeded its statutory authority in these regulations because the Federal Election Campaign Act (the Act) only regulates money spent by nonconnected committees "for the purpose of influencing any election for Federal office." 2 U.S.C. §431(8) and (9). According to the plaintiff, the solicitation regulations exceed the Commission’s statutory authority by requiring that funds be considered "contributions" under the Act even if they will also be used for nonfederal elections or other nonfederal activities. Similarly, the plaintiff alleged that the new allocation rules exceed the Commission’s statutory authority by requiring federal funds to be used to pay for nonfederal activities. According to the plaintiff, these allocation rules result in “a mandatory subsidization of nonfederal electoral expenses with federal funds” and restrict activities that are not for the purpose of influencing a federal election.
The plaintiff further alleged that the regulations violate the Administrative Procedures Act (APA) because the Commission failed to give proper notice of the final regulations or to give interested parties a fair and meaningful opportunity to comment. According to the plaintiff, the proposed solicitation rules only addressed express advocacy communications, and the proposed allocation rules did not suggest a “blanket” 50 percent allocation ratio, but instead focused on a “promote, support, attack, or oppose” standard for determining how a given cost should be allocated. Thus, the plaintiff alleged that the Commission’s notice of the proposed rules did not give reasonable notice of the scope or nature of the final regulations, in violation of 5 U.S.C. §553(b).
In addition, the plaintiff claimed that the regulations are arbitrary, capricious and an abuse of discretion, in violation of 5 U.S.C. §706(2)(A). The plaintiff alleged that the FEC failed to provide a rational explanation for its decisions or to take public comments into account when making its final rules. According to the plaintiff, the FEC also failed to identify for these rules “any purpose to deter corruption or the appearance of corruption, and they serve no such purpose.”
Finally, the plaintiff alleged that the challenged regulations violate its First Amendment rights. The plaintiff claimed that in Buckley v. Valeo, 424 U.S. 1 (1976), and McConnell v. FEC, 540 U.S. 93 (2003), the Supreme Court prohibited the FEC from restricting the types and amounts of funds used to influence federal elections unless the restrictions are narrowly tailored to prevent corruption or the appearance thereof. According to the plaintiff, the regulations in question are unconstitutionally vague and overbroad.
On February 25, 2005, the U.S. District Court for the District of Columbia denied the plaintiff's request for a preliminary injunction in this case.
When deciding whether to grant a preliminary injunction, courts consider whether:
In this case, the court found that each of these standards weighed in favor of the FEC and that "the interests of both Defendant and the public would be disserved by the granting of Plaintiff's motion." Thus the court ordered that EMILY's List's motion for a preliminary injunction be denied.
On December 22, 2005, the U.S. Court of Appeals for the District of Columbia Circuit upheld the district court’s refusal to grant EMILY’s List’s request for preliminary injunctive relief. The suit challenges Commission regulations regarding the treatment of funds raised through certain solicitations and the rules on federal/nonfederal allocation by political action committees. See the April 2005 Record [PDF].
The appeals court found that the district court had not abused its discretion in denying injunctive relief. The district court had considered whether EMILY’s List has a substantial likelihood of success on the merits, whether it would suffer irreparable injury absent an injunction, and whether an injunction would substantially injure other interested parties or further the public interest. In light of the evidence of irreparable harm shown submitted by EMILY’s List and its likelihood of prevailing on the merits, the appeals court affirmed the district court’s decision.
On July 31, 2008, the U.S. District Court for the District of Columbia held that EMILY’s List has standing to challenge both the rule regarding how political committees must treat funds received in response to certain solicitations and the rules for how federal and nonfederal activities must be allocated. EMILY’s List brings a facial challenge to the rules rather than an "as-applied" challenge, asserting that the rules are overly broad under the First Amendment because "an individual whose own speech or conduct may be prohibited is permitted to challenge a statute on its face."
The court also held that the allocation and contribution limits that EMILY’s List challenged in this case are contribution limits, which are subject to lesser scrutiny than the "strict scrutiny" standard that is typically applied to limits on campaign expenditures. The Supreme Court has "recognized that contribution limits, unlike limits on expenditures,'entail only a marginal restriction upon the contributor’s ability to engage in free communication.'" Moreover, contribution limits do not pose the same danger to associational rights as expenditure restrictions because the "overall effect of dollar limits on contributions is merely to require candidates and political committees to raise funds from a greater number of persons."
The district court held in this case that the challenged solicitation and allocation regulations serve the governmental interest of preventing corruption and the appearance of corruption by foreclosing the circumvention of the Act’s contribution limits. The court held that EMILY’s List cannot establish that the FEC’s allocation regulations are facially overbroad since the regulations are closely drawn to match the sufficiently important interests of preventing corruption and the appearance of corruption by preventing the use of nonfederal funds for communications that may influence federal elections. The court also held that the solicitation regulations are closely drawn to match sufficiently important government interests and thus must be upheld under a lesser scrutiny standard. The court denied EMILY’s List’s motion for summary judgment and granted the FEC’s cross-motion for summary judgment.
Source: FEC Record -- March 2005 [PDF]; April 2005 [PDF]; September 2008 [PDF].
