Ohio Democratic Party v. FEC (98-0991); RNC v. FEC (98-1207 and 98-5263)

On June 25, 1998, the U.S. District Court for the District of Columbia denied motions by the Ohio Democratic Party (ODP) and the Republican National Committee (RNC) for a preliminary injunction to prevent the FEC from enforcing its allocation regulation found at 11 CFR 106.5 and interpreted in AO 1995-25. The regulation and advisory opinion require the plaintiffs to pay a portion of their federal election-related advertisement costs with hard money, or funds that comply with the law's contribution limits and prohibitions. Both committees filed suits charging that application of the allocation regulation to issue advocacy advertisements was unconstitutional. The two suits were subsequently consolidated.

On November 6, 1998, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court ruling that denied the RNC's and the ODP's motion for a preliminary injunction.

On August 27, 2002, in light of the recent enactment of the Bipartisan Campaign Reform Act of 2002 (BCRA), the plaintiffs and defendants agreed to the dismissal of this case.

Background

The ODP and RNC charged that the FEC's allocation regulation violates the First and Fifth Amendments to the Constitution, and that the FEC lacks the authority to promulgate rules such as this. The ODP and RNC further alleged that the allocation regulation exceeds the FEC's authority because it regulates issue advocacy communications, not merely communications that expressly advocate the election or defeat of a federal candidate. The plaintiffs told the court that they would suffer irreparable harm if the injunction was not granted.

Rules for preliminary injunction

A preliminary injunction may be granted when:

• There is a substantial likelihood that the plaintiffs will succeed on the merits of the case;
• The plaintiffs will suffer irreparable harm if an injunction is not issued;
• An injunction will not substantially injure others; and
• An injunction will serve the public interest.[1]

District court decision

In denying the motion for a preliminary injunction, the court stated that the ODP and RNC were not likely to prevail on the merits of their claims and that the plaintiffs would not suffer irreparable injury if the injunction was not issued.

First amendment challenge

The plaintiffs argued that no compelling interest supported the FEC's allocation regulations, but the court recognized that the regulation prevents the appearance of corruption that could result if soft money was spent to influence federal elections. As the court explained: "The FEC is not seeking a spending cap on advertisements that influence federal campaigns, but rather is attempting to ensure that political parties do not facilitate any impression that wealth can buy access to our important federal decision makers."

Fifth amendment challenge

The ODP argued that it and other party committees are being treated differently than other types of organizations since they must fund issue advertising with a mix of hard and soft money. Organizations that are not political committees, such as corporate and labor organizations, may fund issue advertising completely with nonfederal funds. The court recognized the party committees' "unique burden," but noted that party committees also have "special benefits" under the Act. The court concluded that the FEC should be given the opportunity to develop evidence of "special corruption problems" associated with the parties' use of soft money to finance ads that influence federal elections.

Regulatory powers

The plaintiffs also argued that the FEC lacked the authority to promulgate the allocation rules. The court, however, pointed out that Congress gave the Commission extensive rulemaking and enforcement powers. Further, the court noted that the Commission had submitted the regulation in question to Congress for review, and neither chamber had disapproved it.

The court dismissed the plaintiffs' claims that they would suffer irreparable injury if the injunction was not granted. The court stated that: "Instead, it is the public who would be harmed if the FEC was enjoined from enforcing (its allocation regulations). If the public were to conceive that each Congressperson elected in the 1998 elections were improperly influenced by large donations to their political parties which were later funneled into issue advertisements with a clear electioneering message, public confidence in our system of government is likely to be further eroded."

Appeals court decision

On November 6, 1998, the appeals court affirmed the lower court ruling that denied the RNC's and the ODP's motion for a preliminary injunction. In September 1998, the appellate court had denied the parties' emergency motion for an injunction pending appeal of the district court decision.

In taking up the matter on a nonemergency basis, the appellate court stated that the RNC and ODP had failed to show that they were likely to be successful on the merits of the case or that they would suffer irreparable harm if an injunction were not granted.

The court found "scant" evidence the RNC and ODP would suffer irreparable harm, citing the two parties' own affidavits filed in this case. The RNC had stated that, if forced to follow the FEC's regulation, it would have "to divert hard money from federal, candidate support." Likewise, the ODP strategized that it would be able to spend more on issue advocacy advertisements and free up federal funds to support the election of federal candidates if it did not have to follow the allocation rule. In light of such "weak evidence," the court stated that the RNC and ODP had to show an exceptional likelihood that they would succeed in this case on its merits. This they did not do. Thus, the court denied the injunction.

Agreed to dismiss

On August 27, 2002, in light of the recent enactment of the Bipartisan Campaign Reform Act of 2002 (BCRA), the plaintiffs and defendants agreed to the dismissal of this case. The Republican National Committee (RNC) had asked the U.S. District Court for the District of Columbia to enjoin the Commission from applying its allocation regulation at 11 CFR 106.5 to the RNC's "issue ads." The RNC claimed that the regulation was unconstitutional because it required party committees to allocate expenses between their federal and nonfederal accounts for communications that did not expressly advocate the election or defeat of a clearly identified candidate.

The BCRA bars national party committees from raising and spending nonfederal funds. As a result, the Commission has promulgated a new regulation at 11 CFR 106.5, which states how national party committees may spend nonfederal funds for limited purposes during the transition period between November 6, 2002, when the BCRA took effect, and December 31, 2002, after which national party committees may no longer spend nonfederal funds.[2]

FOOTNOTES:

[1] Cityfed Fin. Corp. v. Office of Thrift Supervision, 58 F. 3d 738, 746 (D.C. Cir. 1995).
[2] The Commission's new regulations, "Prohibited and Excessive Contributions: Non-Federal Funds or Soft Money," were published in the July 29, 2002, Federal Register (67 FR 49064). See the September 2002 Record, for a summary.

Source:   FEC Record — December 2002; January 1999; November 1998; and August 1998