Democratic Senatorial Campaign Committee v. FEC (80-2074); National Republican Senatorial Committee v. Democratic Senatorial Campaign Committee
In an administrative complaint, filed May 9, 1980, DSCC alleged that NRSC had violated the Act by making special "coordinated" expenditures (2 U.S.C. §441a(d)(3)) as an agent for certain state Republican Party committees. Based on written agreements with the state party committees, the NRSC had made the expenditures to support the general election campaigns of various Senatorial candidates in 1978. NRSC's expenditures were within the limits prescribed by §441a(d)(3) for special party expenditures that a state party committee may make on behalf of its Senate candidate (i.e., $20,000 or 2 cents multiplied by the voting age population of the state). On July 11, 1980, the Commission unanimously determined that there was "no reason to believe" that NRSC had violated the Act. This action was consistent with Commission determinations in prior enforcement actions.
District court ruling
In a petition filed with the U.S. District Court for the District of Columbia on July 30, 1980 (Democratic Senatorial Campaign Committee v. FEC, Civil Action No. 80-1903), DSCC sought a declaration from the court that the FEC's determination was contrary to law and an order directing the Commission to comply with the declaration within 30 days. On August 28, 1980, the district court, ruling on cross-motions for summary judgment, denied the DSCC's petition and affirmed the Commission's determination and interpretation of §441a(d)(3), concluding that the dismissal of DSCC's complaint was not arbitrary, capricious, an abuse of discretion or otherwise contrary to law.
Appeals court ruling
DSCC appealed the district court's order on September 3, 1980 (No. 80-2074). On October 9, 1980, in a per curiam opinion, the appeals court reversed the district court's judgment and declared the Commission's determination contrary to law. Finding that the Commission had presented no reasoned explanation for its determination on the administrative complaint, the court decided the issue de novo. The court determined that neither the language of the statute nor its legislative history could support the Commission's interpretation of §441a(d)(3), i.e., that Congress had not intended to prohibit intraparty agency agreements, such as those used by the Republican Party committees. Accordingly, the appeals court held that, in the absence of an explicit statutory authorization, the agreements between NRSC and the state Republican Party committees violated Section 441a(d)(3). It issued a mandate directing the Commission to conform with its decision.
On October 10, 1980, while the Commission was attempting to comply with the court's decision, intervenor NRSC filed an application to recall the mandate and a petition for an en banc rehearing of the case. The appeals court denied both motions on October 11, 1980. Then, in response to a request from NRSC, the Chief Justice of the Supreme Court issued a stay of the appeals court's judgment, pending the Court's decision on NRSC's petition for a writ of certiorari.
Supreme Court ruling
On March 2, 1981, the Supreme Court granted the Commission's petition for a writ of certiorari in FEC v. Democratic Senatorial Campaign Committee (Civil Action No. 80-939). The Court also granted a petition for a writ of certiorari filed by the National Republican Senatorial Committee (National Republican Senatorial Committee v. Democratic Senatorial Campaign Committee, Civil Action No. 80-1129) and consolidated the cases for oral argument.
In a brief filed with the Supreme Court on April 16, 1981, the Commission argued that its decision to dismiss DSCC's administrative complaint was based on a reasonable interpretation of the Act and should be affirmed. The Commission contended that, by substituting its judgment for that of the FEC, the appeals court had interfered with the Commission's exclusive role as the expert body established by Congress to administer, enforce and interpret the Act. Moreover, in reversing the FEC's consistent construction of Section 441a(d)(3), the appeals court had ignored precedent in the District of Columbia circuit, which gave judicial deference to the Commission's interpretations of the Act. The Commission also asserted that the appeals court's decision required it to develop a new rule of law or statutory interpretation in the context of an enforcement proceeding. This requirement was contrary to the statutory mandate that such rules and interpretations be made through advisory opinions and rulemaking.
Furthermore, the Commission argued that its interpretation of 2 U.S.C. §441a(d)(3) was not contrary to law. Rather, the Commission's interpretation was consistent with statutory language, Commission regulations and advisory opinions and legislative history. A contrary interpretation would conflict with the clear Congressional intent to encourage a close working relationship among the various party committees. For example, under the Act, funds may be transferred without limit between political committees of the same party. 2 U.S.C. §441a(a)(4). The Commission asserted that Congress recognized the Act did not prohibit such intraparty arrangements when it rejected an amendment to the Act that would have prohibited NRSC from transferring funds to the state party committees for the purpose of making §441a(d) expenditures. The Commission therefore argued that its interpretation of §441a(d)(3) was entitled to deference by the appeals court.
On November 10, 1981, the Supreme Court issued an opinion reversing the appeals court decision. The Supreme Court's opinion affirmed the Commission's construction of §441a(d)(3) as a "sufficiently reasonable" one. The Court found that the district court had been "correct" in according deference to the Commission's interpretation. The Court held that "Section 441a(d)(3) does not expressly or by necessary implication foreclose the use of agency arrangements, such as are at issue here, and the FEC thus acted within the authority invested in it by Congress when it determined to permit such agreements.... While §441a(d)(3) does not authorize the NRSC to make expenditures in its own right, it does not follow that it may not act as agent of a Committee that is expressly authorized to make expenditures." The Court further held that "the FEC's view that the agency agreements were logically consistent with §441a(4)-which authorizes the transfer of funds among national, state, and local committees of the same party-is acceptable."
 Moreover, the Court did not take issue with the fact that the FEC's dismissal of the complaint was based solely on the General Counsel's Report.