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On June 26, 2006, the U.S. Supreme Court issued a ruling in Randall et al. v. Sorrell et. al. finding that Vermont state laws that limit contributions and expenditures for nonfederal elections are unconstitutional.
In 1997, Vermont enacted new
campaign finance laws (Pub. Act.
No. 64 (Act 64)) that imposed
mandatory expenditure limits on
the total amount a candidate for
state office could spend during
a two-year election cycle. The
expenditure limits ranged from
$2,000 to $300,000 depending on
the state office sought. Incumbents
seeking re-election were
limited to spending no more than
85 to 90 percent of the applicable
limit. Expenditures over
$50 made by others on behalf of
a candidate counted against the candidate’s expenditure limit if they were facilitated, solicited or approved by the candidate’s campaign, and also counted as a contributions in such an instance. Party expenditures that “primarily” benefited six or fewer candidates also counted against the candidate’s expenditure limit, as well as the party’s contribution limit.
In addition to expenditure limits, Act 64 also imposed contribution limits ranging from $200 to $400 on individuals and political committees (including political parties) making donations to candidates and $2,000 on donations to parties. The national, state and local affiliates of a party were considered affiliated for purposes of the contribution limits. Although the expenditure limits in Act 64 were indexed for inflation, the contribution limits were not.
Act 64 was challenged in the U.S. District Court for the District of Vermont by a group of individual contributors, voters, candidates and political committees. The district court ruled that Act 64’s expenditure limits were unconstitutional on First Amendment grounds, but upheld most of the contribution limits.
On appeal, a divided panel of the U.S. Court of Appeals for the Second Circuit upheld the contribution limits, and concluded that the expenditure limits “may” be constitutional. The appeals court found that the Vermont law was supported by compelling interests in preventing corruption, and the appearance of corruption, and an interest in limiting the amount of time state officials must spend raising funds for their campaigns.1 The court of appeals remanded the case to the district court for it to determine whether the expenditure limits were narrowly tailored. Before the district court was able to take action on the remand, the parties sought review of the court of appeals ruling by the Supreme Court.
In its petition, the respondents
asked the Supreme Court to overrule
Buckley v. Valeo, 424 US 1
(1976), or in the alternative, to
distinguish Buckley from the present
case. In Buckley, the Supreme
Court upheld federal election contribution limitations as constitutional,
but held that expenditure
limitations then contained in the
Federal Election Campaign Act
violated the First Amendment.
The Court noted in Buckley that
the need to prevent “corruption
and the appearance of corruption”
provided a sufficient justification
for federal contribution limitations,
but not for expenditure
limitations because they impose a significantly more severe restriction on First Amendment rights.
In its ruling in Randall v. Sorrell,
written by Justice Breyer,
joined in full by Chief Justice
Roberts, and joined in part by
Justice Alito, the Court declined to overrule or distinguish Buckley. Instead, the Court concluded that the expenditure limits were not substantially different from those at issue in Buckley, and that Vermont’s justification for imposing the limits was similar to Congress’ rationale for imposing the expenditure limits overturned in Buckley. The Court also rejected the argument that expenditure limits are necessary to reduce the time spent fundraising, noting that the Buckley court had considered and rejected this justification for expenditure limits.
In regard to Act 64’s contribution
limits, the Supreme Court
held that the limits in question
were so severe as to violate the
First Amendment. Basing their
opinion again on Buckley, the
Court said that it had to "determine
whether Act 64’s contribution
limits prevented candidates
from 'amassing the resources
necessary for effective [campaign]
advocacy'" by being too low
and strict. In reviewing Act 64’s
limits, the Court noted that "contribution
limits that are too low
can also harm the electoral process
by preventing challengers from
mounting effective campaigns,"
concluding that the Vermont law
limited contributions to an amount
well below the limits at issue in
Buckley, that the limits were well
below the lowest amount ever
previously upheld, and that they
were the lowest limits in the nation.
Based on its determination
that these considerations amounted
to "danger signs" that the Vermont
contribution limits might
be unacceptably low, the Court
then considered whether the limits were "closely drawn" to match Vermont’s interests in adopting the law.
The Court relied on five factors
in deciding that the limits were not
narrowly tailored: (1) the significant
restrictions on funding for
challengers, (2) the harm caused to
contributors in terms of the right
to associate in a political party, as
represented by the limits imposed
on the ability of a Vermont political
party to assist its candidates’
campaigns, (3) the treatment by
Act 64 of certain volunteer expenses
for travel and campaign
materials as contributions, rather
than as exempted expenses, (4) the
lack of adjustment of the contribution
limits for inflation, and
(5) the lack of justifications that
would warrant a low and restrictive contribution limit. Taken together, the Court ruled that these five factors led to the conclusion that Act 64’s contribution limits were not narrowly tailored to prevent corruption, but instead threatened to impose excessive burdens on the First Amendment interests of candidates, parties and volunteers, and thus, violated the
Justice Alito filed an opinion
concurring in the judgment and
joining the opinion in part, stating
his separate view that the respondents
did not adequately present
reasons why the Court should
reexamine Buckley. Justice Kennedy
filed an opinion concurring
in the Court’s judgment but noting
his skepticism of the current
campaign finance legal system.
Justice Thomas, joined by Justice
Scalia, filed an opinion concurring
in the Court’s judgment striking
down Act 64 as unconstitutional,
but disagreeing with the Court’s
rationale on the grounds that, in
their view, Buckley was wrongly
decided. Justice Souter, joined
by Justice Ginsberg and in part by
Justice Stevens, filed a dissenting
opinion in which they explain
that they would have upheld
Vermont’s contribution limits, and
would have declined to rule on the
expenditure limits until further
fact-finding was completed by the
district court. Justice Stevens
filed a dissenting opinion stating
his belief that Buckley’s decision
on expenditure limits was wrong
and should be overruled.
1 Randall v. Sorrell, 118 F. Supp. 2d 470
Source: FEC Record -- August 2006 [PDF].
On March 19, 1981, the U.S. District Court for the Southern District of New York denied a preliminary injunction sought by the Reader's Digest Association, Inc. (RDA) to bar an FEC investigation of RDA. The FEC had initiated the investigation as the result of a complaint brought against plaintiff in August 1980. The complaint alleged that RDA had violated 2 U.S.C. §441b(a) by making an "illegal corporate expenditure to negatively influence" the 1980 Presidential elections. On November 11, 1980, the Commission found "reason to believe" that RDA may have violated 441b(a) by distributing a video tape to major media outlets that provided a computer reenactment of Senator Edward Kennedy's automobile accident at Chappaquiddick. RDA had produced the tape in connection with the publication of an article on the accident, which appeared in Reader's Digest in February 1980. The court noted that the FEC's finding did not mention expenditures for researching and publishing the article itself.
The FEC sent the publishing company a letter requesting answers to 15 questions concerning the content of the video tapes, how RDA had obtained the tapes and what use RDA had made of them. The FEC did not order a reply to its questions; nor did it issue a subpoena.
In its suit asking the court to bar the FEC investigation, RDA contended that responding to the FEC's investigation would have a "chilling effect" on its First Amendment right to comment freely on newsworthy events. Plaintiff asserted that publishers would be more reluctant to take on controversial political stories if they resulted in costly, time-consuming FEC investigations. Moreover, plaintiff claimed that expenditures for the tapes were news story expenditures explicitly exempted from the definition of "contribution" or "expenditure" by 2 U.S.C. §431(9)(B)(i). As such, the tapes constituted a type of press activity beyond the scope of FEC regulation.
The FEC, on the other hand, contended that its investigation was still in the preliminary stage, a fact that precluded any detrimental effect on RDA's news operations. Moreover, the FEC pointed out that since the Act's enforcement procedures provided RDA with an opportunity to respond to FEC findings at each stage of the investigation, the issues raised by plaintiff were not ripe for court action. The FEC further contended that the investigation was lawful and should not be barred.
The district court said that, "There should be no question that the FEC is authorized by statute to pursue its investigation at least for the limited purpose of determining whether the press exemption is applicable." Specifically, the court noted that the FEC's investigation must first determine "whether the press entity is owned by a political party or candidate and whether the press entity [was] acting as a press entity in making the distribution complained of ...or whether it was acting in a manner unrelated to its publishing function."
The court noted that the FEC had limited the scope of its investigation to distribution of the video tapes, suggesting to the court the FEC's recognition that the research and publication of the article were on their face exempt functions. The court therefore concluded that there was "no basis to grant the injunction sought by RDA" as long as the FEC investigation asked "the limited question of whether RDA was acting in its magazine publisher capacity in distributing the tape, so as to determine whether the press exemption is applicable, and so long as the investigation does not address itself to issues beyond this proper subject."
Pending a determination of whether RDA's distribution of the tapes is covered by the news story exemption, the court believed that certain types of questions would be beyond the permissible scope of an FEC investigation as, for example, inquiries into the information sources for the tape or what uses others made of the tape. The court did, however, approve the Commission's questions concerning distribution of the tape and its request for a copy of the tape.
The court noted that RDA could reapply for an injunction if the FEC pursued its investigation beyond the permissible scope outlined in its opinion.
In the ensuing investigation, the Commission did not uncover any evidence to suggest that the distribution was outside the scope of RDA's functions as a publisher. In August 1981, therefore, the Commission found no probable cause to believe RDA had violated 2 U.S.C. §441b.
On October 30, 1981, the U.S. District Court for the Southern District of New York issued a stipulation and order dismissing Reader's Digest Assoc., Inc. v. FEC (Civil Action No. 81 Civ. 596 (PNL)).
Source: FEC Record -- May 1981, p. 5; and February 1982, p. 9.
Reader's Digest Association, Inc. v. FEC, 509 F. Supp. 1210 (S.D.N.Y. 1981).
On December 10, 1981, the U.S. Court of Appeals for the District of Columbia Circuit denied an injunction barring the FEC from releasing an interim audit report of the Reagan-Bush Committee's (the Committee's) publicly funded general election campaign. The Committee had sought the injunction pending its appeal of an earlier decision by the district court, which had also denied its motion for an injunction (Reagan-Bush Committee v. FEC; Civil Action No. 81-1893). The appeals court found no merit in the Committee's argument that release of the interim audit report would cause the Committee "irreparable harm," especially "in the absence of clear Congressional intent that interim audit reports are not to be made public." Moreover, the court held that appellant's motion was "particularly inappropriate in the light of the well established policy that courts should not interfere in an interim agency action when Congress has enacted special statutory procedures for review of the final result."
In filing its suit with the district court on August 10, 1981, the Committee had asked the court to issue an order:
The plaintiff had also asked the court to enjoin the FEC from taking any further action with respect to the Committee's "alleged violations" of the Act or repayments of public funds recommended by the FEC, until the Commission:
In granting the FEC's motion for summary judgment in the suit, the district court ruled that the interim audit report was not a final FEC determination on repayments and that the "FEC audit process leading to repayment determinations is replete with procedural protections" that would allow the Committee to dispute any FEC audit findings before the Commission made a final repayment determination. Moreover, the court pointed out that repayment determinations and the procedure for enforcing violations of the election law are treated as two different functions under the statutory scheme and by the FEC in practice. The court concluded, therefore, that the Committee's "fears of disclosure of information relating to alleged violations are groundless...."
Plaintiff further claimed that public disclosure of the interim audit report was barred by 2 U.S.C. §437g(a)(12). The court found, however, that this provision applied only to enforcement proceedings initiated under the Act (i.e., investigations into alleged violations of the Act); separate provisions spelled out procedures for conducting audits and making repayment determinations with regard to publicly funded Presidential candidates. (See 26 U.S.C. §9007(a) and (b).)
Refuting plaintiff's claim that the Presidential audit information could be disclosed only to Congress, the district court affirmed the FEC's argument that such reports must be made public by law. 26 U.S.C. §§9007 and 9009(a). "The public has a right to know, and promptly, how its monies are spent by Presidential campaign committees." Moreover, the court affirmed the FEC's position that the audit report was subject to disclosure under the FOIA.
The district court also dismissed without prejudice plaintiff's petition for a court order requiring the FEC to disclose certain information the Committee had requested under the FOIA. The court found that the Committee had "never specified to the court which documents should be disclosed" and had "not challenged the FEC's assertion" that the FEC had substantially complied with the Committee's requests for information available under the FOIA.
The Commission released the final audit report for the Reagan-Bush campaign
on December 11, 1981.
Source: FEC Record -- February 1982, p. 7.
Reagan-Bush Committee v. FEC, 525 F. Supp. 1330 (D.D.C. 1981).
On March 27, 2000, the U.S. District Court for the Western District of Virginia, Lynchburg Division, resolved a Reform Party leadership dispute.
The court previously had ordered the Reform Party to transfer to the registry of the court approximately $2.5 million in public funds-funds that the Party had received to finance its 2000 Presidential nominating convention. Once the court determined the rightful leadership of the Party, the funds were to be returned to the Reform Party.
In its decision, the court concluded that members of the National Committee of the Reform Party had duly removed John J. Gargan and Ronn Young as Party Chairman and Treasurer, respectively, at a Nashville, Tennessee, meeting on February 12, 2000. The members voted to replace them with Pat Choate and Tom McLaughlin as Interim Party Chairman and Treasurer, respectively. As a result, the court enjoined Mr. Gargan and Mr. Young from acting as officers or authorized representatives of the Reform Party, including its Convention Committee.
Having resolved the leadership dispute, the court ordered that the public funds for the Party's Presidential nominating convention should be released to Gerald Moan, the duly appointed Chairman of the Party's convention committee. Based on an amicus brief filed by the Federal Election Commission (FEC), which took no position on the leadership dispute, the court conditioned the release of the funds on the Party's written acknowledgment of its obligations to comply with the agreements it had filed with the FEC pursuant to 11 CFR 9008.3(a)(1). The court required the Party to deposit and maintain the public funds in an account registered with the FEC, and to notify the Commission of any changes to the information the Party provided in its original application for public funds.
The court also ordered Mr. Gargan and Mr. Young to turn over all documentation regarding convention funding and disbursements made by the Convention Committee (or on its behalf) to the Reform Party in anticipation of the required post-convention audit by the FEC.
On March 29, 2000, the court received the Party's written acknowledgment of its obligations, and the court subsequently released the public funds.
Mr. Gargan and Mr. Young appealed this case to the U.S. Court of Appeals for the Fourth Circuit.
On September 15, 2000, the Superior Court of the State of California for the County of Los Angeles, South District, enjoined John Hagelin and his agents from representing Dr. Hagelin and Nat Goldhaber to the public as the Reform Party (the Party) Presidential and Vice-Presidential nominees. The court found that the votes taken first to remove Gerald Moan as the Chair of the Party and to nominate James Mangia to that position, and subsequently to nominate John Hagelin as the Party's Presidential candidate, violated the requirements of the Party's constitution. The court further found that Patrick J. Buchanan and Ezola Foster were the properly nominated candidates of the Reform Party.
The court granted a preliminary injunction enjoining Dr. Hagelin and his agents from:
The U.S. District Court for the Western District of Virginia had previously dismissed a similar complaint filed by the Party against Dr. Hagelin and Sue Harris DeBauche. That court found that the complaint did not fall within its jurisdiction.
Source: FEC Record -- November 2000 [PDF].
On October 18, 1996, the U.S. District Court for the Northern District of California, Oakland Division, dismissed this case.
Clinton Reilly, doing business as California Democratic Voter Checklist, asked the court to stop the FEC's investigation of him because he believed the Commission had no jurisdiction over his for-profit operation.
Mr. Reilly's slate mail business distributes lists of federal, state and local candidates and advocates their election or defeat. Mr. Reilly sold and donated space to candidates and initiative committees who wished to appear on a slate card that he distributed to voters. He said Checklist was not a political committee under the Federal Election Campaign Act (the Act).
As an alternative, Mr. Reilly asked the court to find that his business had no reporting obligations under the Act other than reporting free or reduced-cost space on the voting slate as independent expenditures.
In a related case, FEC v. California Democratic Voter Checklist, the court resolved many of the same issues raised in Reilly in the Commission's favor. Accordingly, both Mr. Reilly and the FEC agreed to the dismissal of this case.
Source: FEC Record -- January 1997 [PDF].
On October 26, 1992, the U.S. District Court for the District of Columbia dismissed this suit without prejudice, as stipulated by both parties. (Civil Action No. 91-1064 (SSH).) The Republican Party of Kentucky had filed suit alleging that the FEC had failed to act on the administrative complaint the Party had filed in October 1990. The complaint alleged that the Democratic Party of Kentucky had exceeded the limits on contributions and party expenditures.
In stipulating to the dismissal of the suit, both parties agreed to the following terms:
Source: FEC Record -- December 1992, p. 7.
On June 1, 1998, the U.S. District Court for the Southern District of New York determined that the Commission's regulation at 11 CFR 100.22(b), which defines "express advocacy," violates the First Amendment and enjoined the FEC from enforcing it. The court found that the regulation is "unconstitutionally overbroad" and beyond the scope of the Commission's statute limiting corporate contributions.
On July 20, 1998, the court granted the FEC's motion to clarify that its June ruling enjoined the FEC only from enforcing 11 CFR 100.22(b) against Right to Life of Dutchess County, Inc.
Right to Life of Dutchess County, Inc., (RLDC) is a not-for-profit, membership corporation that advocates pro-life positions. RLDC said it does not intervene in political campaigns on behalf of or in opposition to any candidate for public office; nor does it support or oppose federal candidates. However, the group intended, especially in the lead-up to the federal primary and general elections, to produce and distribute communications to the general public-using newsletters, voter guides, fliers and other methods-that would comment favorably or unfavorably on the positions, qualifications and voting records (if applicable) of candidates running in 1998 primary and general elections. The court said there was little dispute that these publications were timed to influence voters when they went to the polls. RLDC contended that its proposed communications are permissible under the definition of "express advocacy" set forth in Buckley v. Valeo and Massachusetts Citizens for Life v. FEC (MCFL), but would violate 11 CFR 100.22(b).1
In MCFL, the Supreme Court held that the Federal Election Campaign Act's ban on corporate independent expenditures only applies when the money is used to "expressly advocate" the election or defeat of a clearly identified candidate for federal office. The Buckley decision lists examples of phrases that constitute express advocacy: "vote for," "elect," "support," "vote against," "defeat," "reject." These examples are codified in subsection (a) of 11 CFR 100.22. However, in subsection (b), the Commission further defines express advocacy as a communication that, when taken as a whole and with limited reference to external events (such as proximity to an election), can only be interpreted by a reasonable person as unambiguously advocating the election or defeat of a clearly identified candidate. This definition tracks the language of the U.S. Court of Appeals for the Ninth Circuit in FEC v. Furgatch.2
RLDC stated that its proposed communications would not contain any of the phrases listed in Buckley and that it intended to pay for them with corporate funds. The group contended that the threat of FEC enforcement action against it for exercising what it considers its constitutional rights has chilled the First Amendment guarantee of free expression.
As a preliminary step, the court found that RLDC had standing to litigate this case. The court said that, in cases involving possible limits on First Amendment rights, a credible threat of prosecution is sufficient injury to confer standing.
The court held that the Commission's regulation is constitutionally invalid because it "encompasses substantially more communication than is permissible" under 2 U.S.C. §441b, as narrowed by the Supreme Court in Buckley and MCFL. It stated that the Supreme Court requirement of express or explicit words of advocacy (of the election or defeat of a candidate) is necessary to avoid prohibitions on "issue advocacy," which is not regulated by the FEC and is protected by the First Amendment. The court also enjoined the FEC from enforcing part (b) of the regulation.
The court dismissed the Commission's argument that RLDC could not bring a facial challenge against 11 CFR 100.22(b) and instead had to wait until it had actually been injured by the regulation. The court stated that a facial challenge may be brought when (1) a statute or regulation is substantially overbroad and (2) there is a realistic danger that the statute or regulation will significantly chill protected speech.
The court also rejected RLDC's argument that the New York district court was bound by the decision from the First Circuit appellate court in Maine Right to Life Committee, Inc., v. FEC,3 which found 11 CFR 100.22(b) to be unconstitutional. It is a well-settled principle in federal court that a decision in one circuit is not binding on federal courts in another circuit.
1 Buckley v. Valeo, 424 U.S. 1 (1976) and Massachusetts
Citizens for Life v. FEC, 479 U.S. 238 (1986).
2 Furgatch v. FEC, 807 F.2d 857, (9th Cir. 1987).
3 Maine Right to Life Committee, Inc., v. FEC, 98 F.3d 1 (1st Cir. 1996) (per curiam).
On November 1, 1996, the U.S. District Court for the District of Columbia dismissed a lawsuit brought by the Republican National Committee (RNC) against the FEC and the Democratic National Committee (DNC). The suit was triggered by the DNC's initial decision not to file a pre-general election report.
The RNC filed the suit on the same day it filed an administrative complaint with the FEC alleging violations of the election law by the DNC.
In the lawsuit, the RNC claimed that the DNC had violated the law by failing to file the pre-general election report. The DNC responded that it had not made any contributions or expenditures on behalf of federal candidates that had not already been disclosed, so that, in its view, no report was required.
In the RNC's view, a political committee must file a pre-general election report if it receives contributions or makes expenditures on behalf of federal candidates during an election cycle and not just if it receives a contribution during the reporting period. Moreover, the RNC said that the DNC had, in fact, made contributions during the time period covered by the pre-general report-October 1-16-because it had transferred thousands of dollars to the Democratic Congressional Campaign Committee and Democratic state committees.
The RNC asked the court to:
In a ruling from the bench, the court granted the FEC's motion to dismiss the case on the grounds that the court did not have jurisdiction in the matter. The court based its decision on the recent appellate court decision in lawsuits filed against the FEC by Presidential contenders Ross Perot and John Hagelin.
The Act gives the FEC exclusive jurisdiction to hear complaints alleging violations of the laws governing elections. In 2 U.S.C. §437g(a)(8), the law allows complainants to file suit against the FEC only for dismissing their complaint or for failing to act within 120 days after the complaint is filed. The RNC filed its lawsuit in district court the same day that it filed its administrative complaint with the FEC, falling well short of the 120-day period.
The court also dismissed the DNC from the complaint, saying that a private party had no right of action against another private party for alleged violations of the Act.
Thus, the court denied the RNC's request for injunctive relief against the DNC and the FEC.
Source: FEC Record -- December 1996 [PDF].
On June 16, 1978, the Republican National Committee (RNC) filed a suit against the Commission challenging the constitutionality of certain provisions of the Presidential Election Campaign Fund Act which affect Presidential candidates who accept public funds for the general election. (The RNC also requested injunctive relief and the convocation of a three-judge district court to hear the case, in accordance with 26 U.S.C. §9011(6).) The provisions which the RNC challenged stipulate that, in order to receive any federal funds, Presidential candidates of a major party must agree not to make qualified campaign expenses in excess of the amount of public funds they receive. Candidates must also certify that neither they nor any of their authorized committees will accept private contributions to defray qualified campaign expenses, except to the extent necessary to make up any deficiency in public funds. The RNC challenged these provisions on the following grounds:
The FEC filed a motion to dismiss the suit, arguing that plaintiffs' constitutional objections had been rejected by the Supreme Court in Buckley v. Valeo. Secondly, the Commission argued, plaintiffs' description of how the statutory scheme of the Act would impact on the 1980 Presidential campaign is speculative and does not present a "ripe" controversy necessary to the exercise of judicial power. Further, the suit presents political questions not subject to judicial resolution.
The U.S. District Court for the Southern District of New York denied without prejudice the Commission's motion to dismiss on November 30, 1978, and granted the RNC's motion to convene a three-judge district court to hear the case. It also denied the motion of Common Cause to intervene, but permitted them to file briefs amicus curiae.
On April 14, 1980, the U.S. Supreme Court unanimously affirmed decisions by a three-judge court of the U.S. District Court for the Southern District of New York and the en banc United States Court of Appeals for the Second Circuit upholding the constitutionality of the Presidential Election Campaign Fund Act challenged in Republican National Committee v. FEC, originally filed on June 16, 1978. The Court also denied a petition for certiorari seeking review of the suit's dismissal by a single district judge.
Source: FEC Record -- February 1979, p. 5; and June 1980, p. 7.
Republican National Committee v. FEC, 461 F. Supp. 570 (S.D.N.Y. 1978) (motion for the convening of a three-judge court granted D.C. Cir.), 487 F. Supp. 280 (S.D.N.Y. 1979) (three-judge court), 616 F.2d 1 (2d Cir.) (en banc), aff'd mem., 445 U.S. 955 (1980).
On February 20, 1996, the U.S. Court of Appeals for the District of Columbia Circuit affirmed most of the district court's decision upholding the FEC's "best efforts" regulations. 11 CFR 104.7(b). The only part of the district court's decision that the court of appeals did not affirm was the FEC's requirement that specific language accompany solicitations and follow-up requests for contributor information. The court of appeals found the mandatory language prescribed in the regulation to be misleading and therefore contrary to law.
The challenge to the "best efforts" regulations was filed by the Republican National Committee (RNC), the National Republican Senatorial Committee and the National Republican Congressional Committee.
The Federal Election Campaign Act (the Act) requires political committees to show best efforts to obtain and report the name, address, occupation and employer of any individual who makes contributions of more than $200 in a single year to the committee. 2 U.S.C. §§431(13), 432(i) and 434(b)(3)(A).
In 1994, due to low rates of disclosure of contributor information, the FEC implemented a regulation that defined "best efforts" to obtain contributor information. 11 CFR 104.7(b). This regulation required committees to place the following statement conspicuously on solicitation materials: "Federal law requires political committees to report the name, mailing address, occupation and name of employer for each individual whose contributions aggregate in excess of $200 in a calendar year."
Additionally, this regulation required committees to send a stand-alone, follow-up request for contributor information in instances where the contributor failed to respond to the original request or provided incomplete information. The follow-up request also had to include the statement noted above. Committees were allowed to include an expression of gratitude for the contribution in this follow-up request, but no other extraneous information was permitted.
Granting summary judgment to the FEC on July 22, 1994, the U.S. District Court for the District of Columbia rejected the RNC's challenge to the "best efforts" regulations.
The RNC and the other plaintiffs had argued that the "best efforts" requirements violated free speech rights by impermissibly limiting the language and subject matter of solicitations. The court said that the committees' arguments failed because the best efforts regulations are not compulsory but "merely [provide] a 'safe harbor' for any committee that is unable to obtain all of the required information."
In a related argument, the RNC contended that the requirement for a follow-up request would curtail free speech by imposing additional costs on committees, leaving less money for political speech. The RNC claimed that this infringement was not justified by a compelling government interest because compliance with the disclosure requirements had been sufficiently high under the old rules.
Noting that the RNC did not introduce any evidence on the overall level of compliance, the court said that the added costs to the plaintiff committees-estimated at $1.50 to $6.00 per letter-was a "minimal burden" given the strong government interest in disclosure of contributor information. "This information," the court said, "provides an 'essential means' to uncover violations of the FECA [Federal Election Campaign Act], is critical to informing the electorate..., and deters corruption or even the appearance of corruption in the political system."
In another line of argument, the RNC claimed that the revised regulations contradicted legislative intent, citing a statement in a 1979 House committee report that the best efforts provision in the Act (2 U.S.C. §432(i)) did not require committees to make multiple requests for information. Describing the 1979 report as merely one Congressional committee's post-enactment opinion that provided little assistance on how to interpret the intent of Congress in 1976, the court found it insufficient to overturn the FEC's interpretation of best efforts.
The court of appeals found the FEC's "best efforts" regulations reasonable because nothing in the statute or its legislative history precluded the FEC from requiring committees to make more than one request for contributor information. Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984).
The court also concluded that the regulations were based on a reasoned analysis. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 57 (1983). The court noted that the FEC was concerned about the number of committees submitting reports with a low rate of complete contributor information. The FEC held a public comment period and drafted 11 CFR 104.7(b) based on the public comments it received. The court concluded, "the Commission's new regulation results from exactly the kind of agency balancing of various policy considerations to which courts should generally defer."
The court did not question the FEC's authority to require specific language on a follow-up request for contributor information. However, the court found that the mandatory language at 11 CFR 104.7(b) was inaccurate and misleading.
The language was inaccurate, the court said, because the Act does not require committees to report full contributor information for each donor; rather, it only requires them to undertake "best efforts" to obtain it. The court found that 11 CFR 104.7(b) had the effect of forbidding a more accurate paraphrasing of the law, such as: "Federal law requires us to use our best efforts to collect the information."
Additionally, the mandatory language was misleading, the court said, because it led readers to infer that federal law required contributors to disclose this information. In fact, neither the Act nor any other federal law requires contributors to do so.
For these reasons, the court ruled that the mandatory language at 11 CFR 104.7(b) was unreasonable and contrary to law.
The RNC and the other plaintiffs posed First Amendment issues with regard to both the stand-alone, follow-up notice and the specific mandatory language at 11 CFR 104.7(b). Having invalidated the specific mandatory language on statutory grounds, the court only addressed the constitutional arguments put forth by the RNC with respect to the follow-up notice.
The RNC had argued that the requirement to incur additional costs to send out additional messages was not narrowly tailored to the interests the Supreme Court had identified in Buckley v. Valeo. The court of appeals, however, found that the best efforts provision was essentially a safe harbor for political committees that was added to the Act after the Supreme Court upheld a more stringent and absolute FEC requirement in Buckley. As an optional safe harbor, it was thus less burdensome than the absolute disclosure requirement that had previously been found consistent with the First Amendment.
The court also noted that the stand-alone request was a content-neutral restriction on speech and that the RNC had other avenues, besides the follow-up notice, for communicating with donors. The court found unconvincing the RNC's argument that the follow-up requirement sapped the committee's resources. The court noted that: "Even at the [RNC's] estimate of up to $6 per follow-up request, the cost is only about three percent of a $200 contribution, an amount not likely to inhibit political committees from 'speaking.'"
Source: FEC Record -- September 1994, p. 8; and April 1996 [PDF].
Republican National Committee v. FEC, No. 94-1017 (JHG) (D.D.C. July 22, 1994); No. 94-5248 (D.C. Cir. Feb. 20, 1996).
On April 7, 1998, the parties to this suit agreed to dismiss this case with prejudice and to pay their own legal expenses. The Republican National Committee (RNC) had asked the U.S. District Court for the District of Columbia to find that the FEC's dismissal of an administrative complaint it had filed with the agency was contrary to law.
In its initial administrative complaint, filed in 1995, the RNC had charged that the Democratic National Committee (DNC) had used impermissible nonfederal funds to pay all the expenses of a nationwide media campaign that highlighted the party's legislative proposals for health care reform. Commission regulations require that if a political committee has both federal and nonfederal accounts, then it must allocate its administrative and generic expenses between those two accounts. 11 CFR 102.5. The Commission did not have four votes to proceed against the DNC and, therefore, voted unanimously to close the case. The RNC had filed this lawsuit in response to that vote.
Source: FEC Record -- June 1998 [PDF].
On March 26, 2010, the U.S. District Court for the District of Columbia granted the FEC’s Motion for Summary Judgment and denied the Plaintiff’s Motion for Summary Judgment in RNC v. FEC. The court concluded that the Plaintiff’s challenge to the Bipartisan Campaign Reform Act’s (BCRA) restrictions on political party fundraising conflict with the Supreme Court’s decision in McConnell v. FEC, 540 U.S. 93 (2003). The court concluded that the Supreme Court’s recent decision in Citizens United v. FEC does not affect McConnell’s holding with respect to BCRA’s limits on contributions to political parties.
The Act’s soft money provisions prohibit national parties from soliciting, receiving or spending any nonfederal funds and require state, district and local party committees to fund certain "federal election activity" (FEA) either with federal funds or, in certain cases, with a combination of federal and Levin funds. 2 U.S.C. §§441i(a)(1) and 441i(b)(1). There are four types of FEA:
The Plaintiffs state that the Supreme Court’s decision in Buckley v. Valeo, 424 U.S. 1, 80 (1976), requires that the federal campaign finance laws limit only those First Amendment activities that are "unambiguously related to the campaign of a particular federal candidate." The Plaintiffs allege that they plan to use funds raised under state laws and other nonfederal funds for activities that they claim are not related to campaigns of particular federal candidates. These activities include the RNC’s raising and spending of nonfederal funds to pay for the present litigation and to support:
In addition, the Chairman of the RNC alleges that he intends to solicit nonfederal funds on behalf of the RNC for the activities described above, and to solicit nonfederal funds for the California Republican Party. The California Republican Party and the Republican Party of San Diego County allege that they intend to use nonfederal funds to pay for public communications in support of or opposition to state ballot initiatives, and that those communications may promote, attack, support or oppose federal candidates.
The Plaintiffs complain that the soft money provisions attempt to regulate activities, like those they plan to undertake, that are not "unambiguously related to the campaign of a particular federal candidate." As such, they claim that the provisions, as applied to their planned activities, are overbroad and sweep into First Amendment activity without constitutional authority.
The Plaintiffs seek a permanent injunction against the FEC’s enforcement of 2 U.S.C. §441i, a judgment declaring the provision unconstitutional as applied to their activities and costs and attorneys fees.
On November 18, 2008, the court granted the Plaintiffs’ Application for Three-Judge Court.
In denying the Plaintiffs’ Motion for Summary Judgment, the court first rejected their argument that it should apply a “strict scrutiny” level of analysis to their claims. The court referenced the Supreme Court’s decision in McConnell which held that the appropriate level of scrutiny for limitations on contributions to candidates and political parties is a “closely drawn” standard that validates regulations if they meet a sufficiently important governmental interest.
Next, the RNC asserted that 323(a) could not constitutionally be applied to activities that are not unambiguously related to the campaign of a particular federal candidate. It also argued that 323(a) violates the First Amendment to the extent that it applies to contributions that would be used for nonfederal elections, and that there was no viable theory of corruption to justify limits on contributions to political parties. It asserted that if it pledged not to sell preferential access to federal officeholders and candidates in exchange for soft-money contributions, it would eliminate McConnell’s concerns about the corrupting influences of soft-money contributions. The court rejected all of these arguments, stating that McConnell not only upheld BCRA’s ban on nonfederal contributions to national political parties, but also held that 323(a) is not overbroad simply because it subjects all funds raised and spent by national parties to Federal Election Campaign Act’s limits. Although the court found that the RNC’s as applied argument may have merit if the selling of access for soft-money contributions were eliminated, it pointed out that in upholding the 323(a) limits, the Supreme Court in McConnell also was concerned about the close relationship between federal officeholders and national parties. The McConnell Court felt that because they were inextricably intertwined, federal officeholders and candidates may value contributions to their national parties, and that those contributions have the same tendency to result (or appear to result) in quid pro quo corruption. Although the court acknowledged that the McConnell opinion is ambiguous as to whether the “unity of interests” rational was an independently sufficient standard to uphold the ban on soft-money contributions to national parties, it stated that it didn’t possess the authority to clarify or refine McConnell’s holding on this issue.
The California Republican Party and the Republican Party of San Diego County claimed that 323(b) unconstitutionally prohibited them from raising soft money contributions to participate in certain federal election activity that does not target, but may incidentally criticize or oppose, federal candidates. The court rejected this claim as already having been considered and rejected in McConnell. The court pointed out that whether 323(b) can be constitutionally applied to a particular state or local party activity depends on whether the activity would provide a direct benefit to a federal candidate, not on who the party’s primary target is. Since the party committees did not deny that the activities could benefit federal candidates, the court rejected their as-applied challenge.
Finally, the RNC chairman claimed that 323(a) is unconstitutional as applied to his efforts to solicit soft money contributions to the RNC, state parties and state candidates. In rejecting the chairman’s claim, the court stated that, although the chairman, in his individual capacity, may solicit soft-money donations on behalf of state and local party committees and candidates, McConnell upheld 323(a)’s prohibition against national party committees and their officers acting in their official capacities from soliciting or directing soft-money contributions. On April 2, 2010, the Plaintiffs filed a Notice of Appeal to the U.S. Supreme Court.
On February 3, 1995, the U.S. Court of Appeals for the District of Columbia partially denied the petitioner's request for review of the FEC's final repayment determination; the court did grant the petition with respect to one of four disputed expenditures. The court also rejected petitioner's constitutional and statutory challenges.
Petitioner Marion (Pat) Robertson was an unsuccessful candidate for the 1988 Republican Presidential nomination. Petitioner's campaign received more than $10 million from the FEC-administered Presidential public funding program.
The FEC audits all campaigns which receive public funding and may seek a pro rata repayment for any expenditures that are in excess of statutory limits, that are not qualified campaign expenses, or that lack sufficient documentation to verify their campaign-related purpose.
After an audit and a public hearing, the FEC determined that petitioner was obligated to repay $290,793 in public funds. At issue were:
The court examined the four expenditures in question and arrived at the following decisions with respect to each.
Petitioner argued that $14,000 of a $20,000 deposit for telephone service in Iowa should not be counted against his Iowa expenditure limit because it was later refunded to the committee. The court found, however, that the FEC had reasonably concluded that the evidence provided by Robertson's campaign committee did not establish that the refund was attributable to this Iowa deposit.
Petitioner claimed that $17,000 purportedly transferred from the campaign's national account to its state accounts was incorrectly characterized as nonqualified expenditures. Petitioner did not present any supporting documentation to verify that this money actually had been deposited in the campaign's state accounts or had been spent on qualified campaign expenses. The court found the FEC's demand for such documentation to be reasonable.
Petitioner argued that $74,000 in costs associated with his attendance at the convention, after he had withdrawn from the campaign, constituted valid winding down costs for which he could receive public funding. In support of this position, he argued that video and audio recordings of his speech at the convention were offered as an inducement in a fundraising mailing to retire his campaign debt. The FEC rejected this line of reasoning and the court concurred.
Petitioner claimed that a $120,000 fundraising mailing was incorrectly allocated to the state's limit. FEC regulations provide that fundraising expenses need not be allocated to a state's expenditure limit unless incurred within 28 days of the state's primary. Petitioner presented dated checks showing that the postage had been purchased more than 28 days before the primary, and an affidavit from a campaign official asserting that the mailing had preceded the 28-day period. The Commission concluded that it could not be determined that the mailing had actually been sent before the 28-day period and therefore attributed its cost to the New Hampshire limit. The court reversed the Commission's finding on this issue because the Commission did not address what the court deemed to be unopposed evidence presented by plaintiff.
Petitioner's challenge was based on the court's decision in FEC v. NRA Political Victory Fund. In that case, the court held that the Commission's composition violated the principle of separation of powers because it included two nonvoting, ex officio members appointed by Congress. Petitioner argued that despite the Commission's subsequent removal of those members from its body and its ratification of all actions it had undertaken in petitioner's case up to that point, the FEC's proceedings in this case remained unconstitutional.
The court concluded that petitioner was estopped from challenging the constitutionality of the Commission's composition because he had already accepted $10 million in public funds authorized by the very Commission he now argued was unconstitutional.
"[A] party wishing to make such a challenge must do so before it accepts and spends federal funds-not after, as a ploy to avoid its part of a bargain," the court stated in its opinion.
Petitioner based this challenge on a provision of the statute that required the Commission to issue petitioner a notice of a repayment determination within 3 years of the 1988 Republican nomination. Within that time frame, petitioner received a preliminary repayment calculation (contained in the FEC's interim audit report), which an FEC regulation says is sufficient to satisfy the 3-year requirement.
The court declined to resolve petitioner's challenge to the adequacy of the notification he received within 3 years. The FEC had concluded that petitioner had waived his right to address this issue because he had not raised it until his public hearing. Under the Commissions rules, such an issue must be raised in a candidate's written comments submitted to the Commission before the public hearing.
The court found that the FEC was within its rights in enforcing its own procedures in this manner. The court "cannot conclude that . . . the Commission's interpretation [of its regulations] is unreasonable."
Source: FEC Record -- April 1995, p. 6.
Robertson v. FEC, No. 93-1698 (D.C. Cir. Feb. 3, 1995).
On November 30, 1994, the U.S. Court of Appeals for the Fifth Circuit ruled that the Federal Election Campaign Act (the Act) does not immunize a federal candidate, under state law, from personal liability for the debts of his unincorporated campaign committee. Karl Rove & Company may, under the laws of Pennsylvania and Texas, pursue monetary redress for unpaid campaign debts from Richard Thornburgh, a candidate for the U.S. Senate in a 1991 special election.
In the course of his 1991 campaign, Mr. Thornburgh's unincorporated committee contracted with Rove & Company for mail solicitation services. A balance of $169,732 for these services remained outstanding after the election. Rove & Company brought suit against Mr. Thornburgh, his committee and the committee's treasurer. The district court found Mr. Thornburgh and his committee jointly and severally liable for breach of contract under the laws of Pennsylvania and Texas, but dismissed the claim against the committee treasurer for lack of personal jurisdiction.
Mr. Thornburgh brought this appeal, arguing that the Act preempts state law and immunizes federal candidates from personal liability. He cited 2 U.S.C. §453 in support of this motion:
"The provisions of this Act, and the rules prescribed under this Act, supersede and preempt any provision of State law with respect to election to Federal office."
In rejecting this argument, the court noted that: §453 has had a historically narrow reading; that the FEC, in Advisory Opinion 1989-2, has deferred to state law in matters concerning liability for campaign debts; and that the Act does not address the issue of candidate liability for campaign debts anywhere in its provisions.
The court stated, "Although we recognize that Congress has constructed a somewhat analogous-and anomalous-legal regime to shield candidates from liability for violations of [the Act], absent express direction from that branch, we decline to extend further such an apparently inequitable rule."
The court noted that federal candidates can protect themselves from personal liability in most states by incorporating their principal campaign committees, by stipulating in contracts that the candidate is not personally liable or by taking both steps.
Source: FEC Record -- April 1995, p. 7.
Rove v. Thornburgh, No. 93-8451 (5th Cir. Nov. 30, 1994).