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Federal Election Commission | United States of America

National Chamber Alliance for Politics v. FEC

Summary

This suit challenged the constitutionality of Section 441b of the Act, which limits solicitations by corporations (and their separate segregated funds (PACs)) of voluntary contributions to the PACs.

Plaintiff's arguments

On July 20, 1978, the National Chamber Alliance for Politics filed suit against the Federal Election Commission challenging the constitutionality of the PAC solicitation provisions and asking for injunctive relief. The plaintiffs included the Chamber of Commerce (a nonprofit corporation), its separate segregated fund, three executives of the two organizations and one board member of the Chamber of Commerce. Plaintiffs argued that, by enumerating those whom the corporation or PAC may solicit, 441b of the Act:

  • Limits the plaintiffs' First Amendment right to communicate to a more broadly based audience for the purpose of "soliciting" their financial assistance;
  • Limits the plaintiffs' ability to associate with those not enumerated in the Act as potential solicitees;
  • Violates the First Amendment right of the potential solicitees (not enumerated in the Act) to associate with the plaintiffs;
  • Discriminates against plaintiffs, in violation of their Fifth Amendment rights, by permitting candidates and their committees to solicit funds from any PAC but denying this same right to corporations and their PACs.

The plaintiffs argued that the harm brought about by Section 441b was actual, not hypothetical, because the plaintiffs have limited their solicitation activities, fearing the imposition of the civil and criminal sanctions contained in the Act.

Commission's arguments

The Federal Election Commission petitioned the court to dismiss the suit, arguing, first, that the court lacked jurisdiction because:

  • Special statutory judicial review mechanisms, such as Section 437h of the Act, are the exclusive avenues for judicial review.
  • Under §437h of the Act, the Commission, the national committee of any political party, or any individual eligible to vote may bring appropriate actions to challenge the constitutionality of the Act. The Commission argued that none of the plaintiffs were eligible to bring such an action under §437h.
  • Challenges brought by any other person or entity must be raised during the ordinary course of enforcement procedures provided in Section 437g of the Act.

The Commission also argued that the complaint did not present a "case or controversy" because the plaintiffs can make no showing of present, direct injury resulting from Section 441b. The FEC further argued that the plaintiffs failed to state a claim upon which relief could be granted because §441b did not violate the plaintiffs' First or Fifth Amendment rights. The Commission's arguments are summarized below:

  • The plaintiffs failed to see that §441b grew out of (and was, in fact, an exception to) a long series of Congressional efforts, dating back to 1907, to prevent actual corruption or the appearance of corruption arising from the influence of corporate general treasury funds on federal elections. The Commission explained that subsequently Congress also recognized that the individuals who comprise a corporation may have an interest in combining their funds for direct use in candidates' campaigns. Thus, with the passage of the Federal Election Campaign Act of 1971, Congress wrote a special exception to the general ban on corporate election spending. It permitted the use of corporate funds to establish, administer and solicit contributions to a separate segregated fund.
  • The challenged subsection puts restrictions only on the solicitation of contributions. The plaintiffs are free to engage in discussion of general political issues; the Act does not restrict such activity.
  • Section 441b does not restrict the plaintiffs' ability to associate with potential solicitees not enumerated in the Act. Such persons, including other PACs, can freely contribute to a corporate PAC and associate with it.
  • Section 441b does not invidiously discriminate against corporations. The Commission said, "the notion of equal protection does not prevent Congress from classifying for different treatment those persons in distinguishable circumstances." Since corporations, through their PACs, are in a unique position to exert influence on many candidates throughout the entire nation, they are treated differently. In this case, the Commission added, the Chamber of Commerce had chosen to establish its PAC under §441b to take advantage of the provision permitting corporations to use their treasury funds to administer a PAC and solicit contributions to it. The Commission added that individual plaintiffs could establish their own PAC; under those circumstances, the law would permit the plaintiffs to solicit anyone, including other corporate PACs.

District court ruling

On November 22, the court dismissed the suit. The court said that the special provision of 2 U.S.C. §437h(a), expediting judicial review of constitutional issues, is inapplicable to the plaintiffs. The individual plaintiffs sue "not in their individual capacities but rather to vindicate the rights of the corporate entities. That derivative right was not the constitutional right of an 'individual eligible to vote' which Congress considered 'appropriate' for vindication in a declaratory judgment action under this section (437h)." Moreover, the court held that the plaintiffs presented no case or controversy sufficiently ripe for decision by a federal court.

Appeals court ruling

The plaintiffs filed an appeal. On June 10, 1980, the U.S. Court of Appeals for the District of Columbia Circuit denied the appeal, holding that the plaintiffs' claims were not ripe for judicial review.

Supreme Court action

On November 13, 1980, the Supreme Court denied a petition for a writ of certiorari filed by the National Chamber Litigation Center (a legal arm of the Chamber of Commerce of the U.S.) in the suit, National Chamber Alliance for Politics v. FEC (Civil Action No. 78-1333).

Source:  FEC Record — January 1981; February 1979. National Chamber Alliance for Politics v. FEC, 627 F.2d 375 (D.C. Cir.), cert. denied, 449 U.S. 954 (1980).

This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public.

The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.