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            In Chamber of Commerce  v. FEC, 69 F. 3d 600 (D.C.Cir. 1995), rehearing denied (March 1, 1996)(No. 94-5339)(“Chamber of Commerce”), the United States Court of Appeals for the District of Columbia Circuit declared invalid the Commission regulation defining the statutory term “member.”  This regulation had been approved unanimously by the Commission only two years earlier.  By a vote of 3-2, however, the Commission fell one vote shy of securing the four votes needed to approve the General Counsel’s recommendation that the Commission request the Solicitor General to file a petition for writ of certiorari in Chamber of Commerce.  See 2 U.S.C. 437c(c).  Because the court of appeals decision concerns important questions of law that go to the heart of administering and enforcing the Act and because the decision conflicts with earlier decisions of the United States Supreme Court, we voted to approve the General Counsel’s recommendation.


            Determining whether certain individuals meet the Commission’s definition of member is an important legal matter.  The provision which allows membership organizations to use otherwise prohibited funds to make partisan communications advocating the election or defeat of a candidate to its members is an exception to the general prohibitions of 2 U.S.C. 441b.  See 2 U.S.C. 441b(b)(4)(C).  Thus, how broadly or how narrowly “member” is defined has a direct correlation to the amount of “soft money” that is allowed into the federal election process.  In FEC v. National Right to Work Committee, 459 U.S. 197, 206 (1982)(“NRWC”), the Supreme Court recognized that limits on what constitutes a member are necessary if the general prohibitions of 2 U.S.C. 441b are to survive.  The Supreme Court specifically found that to adopt a broad definition of member would “open the door to all but unlimited corporate solicitation and thereby render meaningless the statutory limitation to ‘members.’”  459 U.S. at 204 (emphasis added). 



            The court of appeals decided it must give a broad construction to the term “member” to avoid what it perceived to be constitutional difficulties.   This finding directly conflicts with the Supreme Court’s decision in NRWC where the Court explicitly rejected a similar conclusion of an earlier court of appeals that “the term ‘members’ must be given an elastic definition in order to prevent impermissible interference” with constitutional rights.  459 U.S. at 206. 


            Unlike the Chamber of Commerce decision, the Supreme Court in NRWC recognized there are limits to how broadly the term “member” may be defined.  Reiterating legislative history, the Supreme Court stated that “‘members’ of nonstock corporations [are] to be defined, at least in part, by analogy to stockholders of business corporations and members of labor unions.”  459 U.S. at 204.  The Court held that “[t]he analogy to stockholders and union members suggests that some relatively enduring and independently significant financial or organizational attachment is required to be a ‘member’ under 441b(b)(4)(C).”  Id.  In concluding that NRWC’s alleged “members” did not meet this test, the Court found dispositive the fact that “members play no part in the operation or administration of the corporation; they elect no corporate officials. . . . There is no indication that NRWC’s asserted members exercise any control over the expenditure of their contributions.”  459 U.S. at 206. 


            Showing deference to the agency,  the Supreme Court in NRWC upheld the Commission’s definition of the term “member” in that case and specifically declined to “attempt an exegesis of the statutory meaning of the word ‘members’ beyond that necessary to decide this case.”  459 U.S. at 203.  The NRWC  decision was consistent with another Supreme Court decision issued only a year earlier in which the Court stated that “the Commission is precisely the type of agency to which deference should presumptively be afforded.”  FEC v. Democratic Senatorial Campaign Committee,  454 U.S. 27, 37 (l981).  Contrary to these Supreme Court decisions, the Chamber of Commerce court specifically found that the Commission “is not entitled to Chevron deference in its interpretation of the statute.”  69 F.3d at 605 citing Chevron v. NRDC, 467 U.S. 837 (l984).


            The court of appeals also demonstrated a fundamental misunderstanding of the Commission’s regulations.  Unions are subject to the same definition of “member” as organizations like the Chamber and the AMA.  If not entitled to vote for at least one member of the highest governing body of the union, or for persons who, in turn, ultimately have that entitlement, a person would not be a “member” of the union even though a regular dues payer.  Moreover, though union federations may treat members of component unions as members (pursuant to express legislative history), 11 C.F.R. 114.1(e)(4), so too may federations of trade associations treat members of member


corporations as members for solitication purposes, 11 C.F.R. 114.8(g).  Other allowances exist for non-union organizations to treat as members persons who don’t otherwise qualify as such.  See 11 C.F.R. 114.7(k) (permitting certain cooperatives to solicit the members of affiliated organizations) and 11 C.F.R. 114.8(c) (allowing trade associations to solicit stockholders and executive and administrative personnel of member corporations).  In addition, non-union organizations like trade associations and federations of trade associations have significant freedom in generating partisan communications to persons who do not qualify as members.  See Advisory Opinion 1991-24, 2 Fed. Elec. Camp. Fin. Guide (CCH), 6028 (Organization may urge that member organizations in turn send partisan message).  Thus, the court of appeals improperly founded its decision on the mistaken view that non-union organizations receive unfair treatment under the law.


            We strongly believe that this case not only was appropriate for Supreme Court review but that it cried out for such consideration.  It is well established that “[a] direct conflict between the decision of the court of appeals of which review is being sought and a decision of the Supreme Court is one of the strongest possible grounds for securing the issuance of a writ of certiorari.” Stern, Gressman, Shapiro and Geller,  Supreme Court Practice, 174 (1993).  As Chief Justice Rehnquist has written,  an  “important factor [in deciding whether to grant certiorari] is the perception of one or more of the justices that the lower court decision may well have been an incorrect application of Supreme Court precedent.”  Rehnquist, The Supreme Court 265 (1987).  Given the importance of the legal issue, the lower court’s misunderstanding of the Commission’s regulations, and the clear conflict with the Supreme Court decision in NRWC, the lower court’s decision truly required Supreme Court review.


            Our colleagues’ vote against appealing this very serious matter is troubling in view of the fact that they both voted to approve the member regulation held invalid in Chamber of Commerce.  The record clearly shows that Commissioners Aikens and Elliott joined a unanimous Commission and voted to approve the text of the final rules defining who is a “member” of a membership association.  See FEC Minutes of an Open Meeting at 3 (June 24, 1993).  Moreover, the record further shows that Commissioners Aikens and Elliott joined a unanimous Commission and voted not only to approve the membership regulation’s Explanation and Justification, but also to transmit the text of the regulations and the Explanation and Justification to the United States Congress for its review and consideration pursuant to 2 U.S.C. 438(d).  See FEC Minutes of an Open Meeting at 5 (August 24, 1993).




            Congress has entrusted the Federal Election Commission with the responsibility of “formulat[ing] general policy with respect to the administration of this Act.”   FEC v. DSCC, 454 U.S. at 37.  We do not believe the approach taken by Commissioners Aikens and Elliott is the way to “formulate general policy” or “administer the Act.”  Where the agency has spoken and passed a regulation (in this case unanimously), we believe it has an obligation to defend that regulation and to resolve the matter through judicial review.  Accordingly, we voted to approve the General Counsel’s legal recommendation to seek a petition for writ of certiorari.



            5/7/96                                                  / s /

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Date                                                     Scott E. Thomas



            5/8/96                                                  / s /

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Date                                                     John Warren McGarry



            5/9/96                                                  / s /

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Date                                                     Danny Lee McDonald