Greenwood for Congress v. FEC (03-0307)

On August 18, 2003, the U.S. District Court for the Eastern District of Pennsylvania granted summary judgment in favor of Greenwood for Congress, Inc. (the Committee) in this case. Greenwood for Congress filed suit against the Commission on January 22, 2003, appealing a civil money penalty assessed against it by the Commission under its administrative fines regulations for the Committee's failure to timely file its 2001 Year-End Report. 11 CFR 111.30-111.45. The Committee argued that the Commission's determination that the Committee and its treasurer violated 2 U.S.C. §434(a) and its assessment of a $3,100 civil money penalty were arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law.

Background

The Committee alleged that it sent an electronic version of its 2001 Year-End Report on a high-capacity ZIP disk, along with a paper copy version, to the Commission via overnight delivery on January 29, 2002. The Year-End Report was due on January 31. The Committee was required to file its report electronically under the Commission's mandatory electronic filing regulations. 11 CFR 104.18(a)(1). Reports that are required to be filed electronically but are instead submitted on paper do not satisfy a committee's filing requirement. 11 CFR 104.18(a)(2).

While the Commission received a package containing the paper version of the report on January 30 (Initial Package), it subsequently informed the Committee that it had not received an electronic version of the report. The Committee then sent an electronic version of the report on a ZIP disk, which the Commission received on February 7. On that same day, a staff member in the Commission's Electronic Filing Office informed Eric Clare, the Committee's campaign manager, by telephone that the Committee's filing was rejected because it had not been submitted on a 3.5 inch floppy disk and because it was not accompanied by the required summary page signed by the treasurer. Mr. Clare then sent another copy of the report, on a 3.5 inch floppy disk along with a signed summary page, which the Commission received and validated on February 8, 2002.

On June 14, 2002, the Commission found reason to believe (RTB) that the Committee and its treasurer had violated 2 U.S.C. §434(a), which requires the timely filing of reports by political committees like Greenwood for Congress. The Commission assessed a civil money penalty in the amount of $3,100 in accordance with 11 CFR 111.43. After reviewing the Committee's response to the Commission's RTB finding, the Commission's reviewing officer recommended that the Commission make a final determination that the Committee had violated 2 U.S.C. §434(a) by filing its 2001 Year-End report eight days late and that the $3,100 civil penalty assessed was appropriate. After reviewing the Committee's submissions and the recommendations of the reviewing officer, on December 20, 2002, the Commission voted unanimously to make the final determination recommended by the reviewing officer. The Committee filed its petition for review of the Commission's final determination on January 22, 2003.

Court decision

The granting of summary judgment by a court is appropriate where there is "no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Under the Administrative Procedure Act, a court can set aside an agency action it finds "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. §706(2)(A); Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 414 (1971).

The court found that the FEC ignored relevant, although circumstantial, evidence presented by the plaintiffs during the administrative challenge. In his affidavit submitted to the Commission's reviewing officer, Mr. Clare claimed to have sent the Committee's report on a ZIP disk in the Initial Package. He indicated that he weighed the different items that the Committee alleged it sent to the Commission. He reported that a ZIP disk, a hard-copy version of the report with a binder clip, a copy of the cover letter and a manila envelope weighed 2 1/8 pounds. The same package weighed without the ZIP disk weighed 1 7/8 pounds, according to Mr. Clare. The Federal Express airbill for the Initial Package, as filled out by Mr. Clare, indicated a weight of 2.20 pounds, and Federal Express listed the weight of the package as three pounds. Because Federal Express will round up to the next whole number in calculating a package's weight, the Committee argued that this was evidence that the Initial Package contained a ZIP disk.

The Commission argued that its determination that the Committee filed its report late was reasonable because:

• The Commission relied on statements by staff that the procedures followed indicated that no disk was contained in the Initial Package; and
• Later searches of FEC files revealed no record of the Commission having received the disk in that package.

Nevertheless, the court held that the Commission failed "to exercise independent judgment in arriving at its decision" in this matter and "arbitrarily and capriciously determined that the Committee had erred in failing to include a disk in the January 30, 2002 package."

Additionally, the Commission argued that it was immaterial whether the Initial Package contained a ZIP disk, because a ZIP disk is an improper medium and the report would have been rejected in any case. The court found, however, that it is not clear that a ZIP disk is an improper medium -- the language of the applicable regulation requires only the submission of the reports on "computerized magnetic media." 11 CFR 104.18(a) and (d).

Thus, the court denied the Commission's motion for summary judgment and granted summary judgment in favor of the Committee.

Source:   FEC Record — October 2003; and April 2003.