Athens Lumber Co. v. FEC

On October 24, 1983, the U.S. Court of Appeals for the Eleventh Circuit issued an en banc opinion in Athens Lumber Company v. FEC upholding the constitutionality of 2 U.S.C. §441b(a) of the Federal Election Campaign Act (the Act). (Civil Action No. 82-8102.) The court's decision also reversed an earlier order by the U.S. District Court for the Middle District of Georgia which had dismissed the case on grounds that: (1) plaintiffs lacked standing to bring suit under the Act; and (2) plaintiffs failed to present a justiciable controversy for the federal courts' consideration. The appeals court remanded the case to the district court for entry of a judgment in favor of the FEC.

Plaintiffs' claims

The Athens Lumber Company and its President John P. Bondurant filed the suit with the Georgia district court on July 27, 1981. Pursuant to Section 437h(a) of the Act,[1] plaintiffs asked the district court to certify their questions concerning the constitutionality of 2 U.S.C. §441b(a) to the en banc appeals court for the Eleventh Circuit. Plaintiffs claimed that this provision of the election law abridged First and Fifth Amendment rights by prohibiting corporations, labor organizations and national banks from making contributions and expenditures in connection with federal elections.

Plaintiffs further asked that the FEC be enjoined from initiating enforcement proceedings against them if the Athens Lumber Company participated in federal elections. At the same time, however, plaintiffs said that the company would not make expenditures or contributions in connection with federal elections until either: (1) 2 U.S.C. §441b was repealed or declared unconstitutional; or (2) the company obtained an opinion of counsel from the Commission stating that the proposed expenditures did not violate any federal or state law or regulation. Plaintiffs further argued that their uncertainty about a possible violation of the election law had deterred them from exercising their First and Fifth Amendments rights, thereby causing them irreparable harm.

District court decision

In an opinion issued on February 9, 1982, the Georgia district court dismissed the suit. (Civil Action No. 81-79-ATH.) The court held that, under Section 437h(a) of the election law, only the following types of plaintiffs had standing to bring suit: the national committee of a political party, individuals eligible to vote in Presidential elections and the FEC. Consequently, the court found that the Athens Lumber Company lacked standing to bring suit. While the court recognized that Mr. Bondurant was an eligible voter, he too lacked standing to bring suit since the corporation-not Mr. Bondurant-planned to make the expenditures.

Moreover, the district court held that plaintiffs had not presented a justiciable case or controversy ripe for the court's consideration. The court concluded that "it is obvious that the statute under attack in no way interferes with the way that the plaintiff corporation through its plaintiff president conducts its corporate affairs...." Similarly, the court found that Mr. Bondurant had not presented a justiciable claim because he was "free to independently expend his personal funds [in federal elections], including dividends from the corporate plaintiff without limitation." Moreover, the court found that Athens Lumber Company was only seeking an advisory opinion because the shareholders had not voted to spend any corporate funds in connection with federal elections as long as Section 441b remained in force.

Appeals court decision

On October 22, 1982, a three-judge panel of the Eleventh Circuit court of appeals reversed the judgment of the district court, finding that Mr. Bondurant did have standing to bring suit and to raise those issues pertaining to Athens Lumber Company's participation in federal elections. Moreover, the court found that the suit raised justiciable claims because, if Athens Lumber Company were to make contributions and expenditures in connection with federal elections, both Mr. Bondurant and the corporation would be subject to civil and criminal prosecution. The panel then certified to the en banc Eleventh Circuit eight constitutional questions adopted from appellants' complaint.

In upholding the constitutionality of Section 441b, the en banc Eleventh Circuit court of appeals stated: "Viewing the substantive constitutional issues as being controlled by the Court's unanimous opinion in Federal Election Commission v. National Right to Work Committee, 459 U.S. 197 (1982), and for the reasons there stated, we find the limitations and prohibitions of which appellants complain to be constitutional."

Supreme Court action

On March 19, 1984, the Supreme Court dismissed an appeal brought by plaintiffs in Athens Lumber Company v. FEC. Citing a lack of jurisdiction over the appeal, the Court treated it as a request for discretionary review (i.e., a petition for a writ of certiorari) and declined the request. (U.S. Supreme Court No. 83-1190) The high Court's action left standing the earlier, en banc opinion of the U.S. Court of Appeals for the Eleventh Circuit.

FOOTNOTE:

[1] Section 437h, which provides for an expedited judicial review procedure, notes that certain designated parties "may institute such actions in the appropriate district court of the United States...to construe the constitutionality" of the Act. The district court is then directed to certify appropriate constitutional questions to the court of appeals sitting en banc.

Source: FEC Record— January 1984; and May 1984. Athens Lumber Company, Inc. v. FEC, 531 F. Supp. 756 (M.D. Ga. 1982), rev'd, 689 F.2d 1006 (11th Cir. 1982), 718 F.2d 363 (11th Cir. 1983) (en banc), appeal dism'd, cert. denied, 465 U.S. 1092 (1984).