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Federal Election Commission | United States of America

Utility Workers Union of America, Local 369, AFL-CIO v. FEC

Summary

On March 8, 2010, the U.S. District Court for the District of Columbia denied the Commission’s motion to dismiss and denied Utility Workers Union of America, Local 369’s (Plaintiff’s) oral motion for summary judgment regarding the Plaintiff’s suit against the FEC for dismissing an administrative complaint alleging that Covanta Energy Corporation (“Covanta”) unlawfully solicited contributions to its separate segregated fund (SSF) in its employee handbook. The district court remanded the case to the Commission for further explanation and proceedings consistent with the court’s opinion.

Background

The Plaintiff filed an administrative complaint with the Commission in October 2008 alleging that Covanta violated the Federal Election Campaign Act (the Act) by including language in its employee handbook that solicited contributions from employees to Covanta’s SSF. Under the Act, SSFs may only solicit contributions from a corporation’s "restricted class," which consists of stockholders, executive and administrative personnel and the families of both groups. 2 U.S.C. §441b(b). The Plaintiff alleged that the handbook violated the Act by impermissibly soliciting all employees and by not following other requirements.

The FEC dismissed the Plaintiff’s complaint. Applying the standard set forth in Commission advisory opinions for determining whether a communication amounts to a solicitation, the Commission concluded that the language in Covanta’s employee handbook was not a solicitation because it did not encourage support for the [SSF] or facilitate the making of contributions to the [SSF], but "merely convey[ed] information that might engender inquiry."

The Plaintiff brought suit challenging the Commission’s dismissal of its administrative complaint under 2 U.S.C. §437g(a)(8)(A), which states that any party aggrieved by an order of the Commission dismissing a complaint may file a petition with the U.S. District Court for the District of Columbia.

The Plaintiff argued that the Commission’s dismissal of the administrative complaint was flawed and that the Commission’s Explanation and Justification (E&J) on SSF solicitations calls into question the Commission’s order. That E&J explains that an SSF "may accept unsolicited contributions from persons otherwise permitted by the Act to make contributions. Informing persons of the right to accept such contributions is, however, a solicitation." H.R. Doc. No. 95-44, 109 (January 12, 1977). [1]

District court decision

The district court held that it could not sustain the Commission’s administrative decision because neither the Factual and Legal Analysis explaining the decision nor the precedent it cites enables the court to discern the Commission’s rationale in determining that the Covanta handbook did not inform persons of the SSF’s right to accept contributions, and thus that is was not a solicitation as interpreted by the E&J.

The court held that a remand to the Commission for further explanation is the appropriate remedy in this situation because, on remand, the Commission may be able to supply a reasoned analysis for its dismissal of the Plaintiff’s complaint in a manner consistent with the E&J. The court also held that the Commission did not improperly rely on its own past advisory opinions when it cited them in its order.

FOOTNOTE:

[1] The Commission’s Explanation and Justification is available on the FEC’s website.

Source:   FEC Record — April 2010

Documents

District Court (DC) (09-1022)

Court decisions:

Related documents:

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.