Bush-Cheney '04 v. FEC (1:04CV01612)
On March 29, 2006, the U.S. District Court for the District of Columbia issued a ruling in Shays and Meehan (04-1597)/Bush–Cheney ’04, Inc. v. FEC that granted in part and denied in part the plaintiffs’ motion for summary judgment.
The Federal Election Campaign Act (the Act) defines a "political committee" as "any club, committee, association or other group of persons" that receives contributions or makes expenditures aggregating in excess of $1,000 during a calendar year. 2 U.S.C. §431(4); see also 11 CFR 100.5(a). Under the Act, political committees must register and report with the FEC and are limited in the sources and amounts of contributions they may make and receive. 2 U.S.C. §§433, 434, 441a(a)(1)-(2), 441b(a) and 441f. The Act defines "contribution" and "expenditure" in terms of funds raised or spent "for the purpose of influencing any election for federal office." 11 CFR 100.52(a) and 100.111(a).
On March 11, 2004, the Commission issued a Notice of Proposed Rulemaking asking for comments regarding possible changes to the definition of “political committee” that would require certain groups not currently registered with the FEC to do so. In November 2004, the Commission issued final rules that require organizations to treat more of their receipts as contributions and to use a greater percentage of federal funds for certain allocable expenses. While these rules could trigger registration for some groups, the Commission did not directly modify its definition of “political committee.” Instead the Commission decided that it would continue to construe the definition of “political committee” on a case-by-case basis.
The plaintiffs, Christopher Shays, Martin Meehan and Bush-Cheney ’04, Inc., argued that the Commission’s 2004 decision to continue deciding case-by-case whether a group is a “political committee,” as defined in the Federal Election Campaign Act, was arbitrary and capricious. They also argued that the Commission should be compelled to issue a new rule.
On September 17, 2004, Bush-Cheney '04 filed a complaint in the U.S. District Court for the District of Columbia. The complaint challenges the FEC's alleged failure to issue regulations interpreting the phrase "for the purpose of influencing a federal election" which appears in the statutory definitions of "contribution" and "expenditure." 2 U.S.C. §431(8)(A)(i) and §431(9)(A)(i). The plaintiff asked the court to require the Commission to commence proceedings to promulgate such regulations and, by extension, to address whether certain so-called 527 organizations are "political committees" under the Act.
The plaintiff alleged that in McConnell v FEC the Supreme Court expanded the Act's "for the purpose of influencing" standard reach beyond "express advocacy." According to the plaintiff, the Commission failed to respond to the Court's decision by adopting any regulations or taking any other action in advisory opinions or enforcement matters setting forth clear standards for when entities organized under section 527 of the tax code are required to register as political committees.
The plaintiff alleged that the Commission failed to address this issue through the rulemaking process. On March 11, 2004, the Commission published a Notice of Proposed Rulemaking suggesting revisions to the definition of political committee and other changes to the regulations, including proposals to address when 527 organizations become political committees under the Act. The plaintiff contended that the Commission subsequently concluded this rulemaking, on August 19, by "promulgating rules on two collateral matters" while it "refused to issue any rule addressing the central question that had prompted the rulemaking in the first place: the definition of a political committee and the requirement for Section 527 groups to register as political committees."
The plaintiff alleged that the Commission's failure to issue rules addressing the activities of 527 organizations is arbitrary and capricious, an abuse of discretion and not in accordance with law. The plaintiff asked the court to:
- Declare that the Commission's failure to issue appropriate regulations implementing the statutory phrase "for the purpose of influencing a federal election" constitutes agency action unlawfully withheld and an abuse of the FEC's discretion; and
- Issue an order requiring the FEC to promulgate, on an expedited basis, regulations implementing this statutory phrase and, by extension, to address which organizations are political committees under the Act.
The district court rejected plaintiffs’ contention that selecting adjudication rather than rulemaking was an abuse of discretion. Nevertheless, the court ruled that the Commission had failed to articulate a reasoned basis for its decision to continue case-by-case determinations of political committee status. Although the Commission had explained that a rulemaking would be complex and potentially over-inclusive, the court noted that the Commission did not explain why case-by-case adjudication would solve these problems. Additionally, the Commission did not address how unregistered groups’ due process or First Amendment rights would be protected without a clear rule to rely upon. Lastly, the Commission did not address how the enforcement process would be timely enough to prove effective.
The court denied the plaintiffs motion to compel the FEC to promulgate a new rule. It remanded the case to the FEC, however, ruling that it must either provide further explanation and justification for its decision to review the political committee status of unregistered organizations on a case-by-case basis or issue a new rule.
 Entities organized under 26 U.S.C. §527 are considered "political organizations," defined generally as a party, committee or association that is organized and operated primarily for the purpose of influencing the selection, nomination or appointment of any individual to any federal, state or local public office, or office in a political organization. 26 U.S.C. §527(e)(1) and (e)(2).
District Court (DC)
- Memorandum Opinion (03/29/2006)
- FEC's Reply Memorandum in Support of the Commission's Second Motion for Summary Judgment (06/12/2007)
- FEC's Memorandum in Support of the Commission's Second Motion for Summary Judgment and in Opposition to Plaintiff's Motion for Further Relief (05/08/2007)
- FEC's Second Motion for Summary Judgment (05/08/2007)
- FEC's Reply Memorandum in Support of the Commission's Motion for Summary Judgment (08/25/2005)
- FEC's Memorandum in Reply to Plaintiffs' Memorandum in Opposition to Defendant's Motion to Strike Plaintiffs' Exhibits (08/26/2005)
- FEC's Motion to Strike Exhibit of Amici Curiae U.S. Senators John McCain and Russell D. Feingold (08/26/2005)
- Proposed Order
- FEC's Motion for Summary Judgment (06/07/2005)
- FEC's First Amended Complaint for Declaratory and Injunctive Relief (01/14/2005)
- FEC's Complaint for Declaratory and Injunctive Relief (09/14/2004)