Lovely v. FEC

On March 9, 2004, the U.S. District Court for the District of Massachusetts, having denied both the defendant's and the plaintiffs' motions for summary judgment, vacated this case and remanded it to the FEC for further proceedings in accordance with the court's order. The court found that the FEC erred in not interpreting the Federal Election Campaign Act's (the Act) "best efforts" provision to apply to the submission of reports and that the Commission should have issued a statement of reasons with it's final determination, under the administrative fines regulations, that the plaintiffs filed their 2001 Year-End report late.

Background

The Committee to Elect Bill Sinnott (the Committee) and its treasurer, William A. Lovely, III, filed a complaint in the district court on December 31, 2002, challenging the Commission's final determination that the Committee filed its 2001 Year-End report late and its assessment of a $1,800 civil money penalty under the administrative fines regulations. 11 CFR 111.30-111.45.

According to that complaint, the plaintiffs were unable to file the report over the internet on the January 31, 2002, deadline because of computer problems. At FEC staff's suggestion, they filed the report by sending the Commission a diskette postmarked on January 31. The Commission informed the plaintiffs on February 13, the day the disk was received, that this disk was not in an acceptable electronic format and did not pass the Commission's validation program.[1] On February 26, the plaintiffs sent the report on diskette in an acceptable electronic format via courier. The Commission received the diskette the following day.

On June 14, 2002, the Commission found reason to believe that the plaintiffs violated 2 U.S.C. §434(a) by failing to file the report on time and made an initial determination to assess a $3,100 civil penalty. An FEC Reviewing Officer, after considering objections filed by the plaintiffs, determined that, because the disk mailed January 31 was incorrectly formatted and did not pass the Commission's validation program, the report was not considered to have been filed until February 27, when the Commission received a properly formatted report. On November 25, 2002, the Commission made a final determination that the plaintiffs had failed to file timely. However, the Commission lowered the civil penalty assessed to $1,800 "based on the filing, which was postmarked on the filing date, being fourteen days late, after counting for the irradiation process which resulted in mail delays."

Court decision

Best efforts

The plaintiffs alleged that they made "best efforts" to file their report on time. The Act provides that a committee's report is in compliance with the statute "when the treasurer of a political committee shows that best efforts have been used to obtain, maintain, and submit the information required by this Act." 2 U.S.C. §432(i). See also 11 CFR 104.7 and 102.9(d). The FEC argued that it has long interpreted the "best efforts" provision as only creating a limited safe harbor regarding a committee's failure to provide substantive information that may be beyond its ability to obtain, such as a contributor's occupation and employer, and that the "best efforts" provision does not therefore apply to a committee's obligation to file its reports on time. Under the administrative fines regulations, challenges to civil money penalties may only be based on three grounds set out in the regulations, and they may not be based on a committee's computer failure. 11 CFR 111.35.

The court found that the FEC's interpretation that the "best efforts" provision does not apply to the submission of reports "conflicts with the plain statutory language."[2] According to the court, "While the Commission can refine by regulation what best efforts means in the context of submitting a report, it cannot define it away by providing that submission of reports is governed by a 'strict liability' standard."

Rationale for Commission decision

The court also noted that in its final determination the Commission "did not make findings of fact, make a statement of reasons, incorporate the reviewing officer's recommendation by reference, or issue any opinion at all." As a result, the court found that it is not clear "how the Commission evaluated the plaintiffs' 'best efforts' arguments, or whether it applied the correct legal standard." In addition, the court noted that neither the Commission nor the Reviewing Officer investigated the alleged unavailability of technical support from the FEC or whether the formatting error on the disk resulted despite Mr. Lovely's best efforts to follow advice from FEC staff, or from his own negligence or last minute compliance efforts.

Order

The court vacated this case and remanded it to the FEC, finding that "the lack of clarity in the administrative decisions and a possible error of law compel a reversal and remand."

FOOTNOTES:

[1] Under the Commission's electronic filing regulations, electronic filers who instead file on paper or submit a report that does not pass the validation program are considered not to have filed that report. 11 CFR 104.18.

[2] In Chevron U.S.A. , Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), the Supreme Court found that courts must give effect to the unambiguously expressed intent of Congress if it has spoken "to the precise question at issue." If the statute is silent or ambiguous with respect to the precise question at issue, the court should defer to an agency's interpretation if it is reasonable.

Source:   FEC Record — May 2004; March 2003