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Federal Election Commission | United States of America

Van Hollen v. FEC

Summary

On January 21, 2016, the U.S. Court of Appeals for the District of Columbia reversed a 2014 district court decision that invalidated a Commission regulation governing the disclosure of certain donations used to fund electioneering communications. The regulation in question (11 CFR 104.20(c)(9)) requires disclosure of only those donations made for the purpose of furthering electioneering communications. In reversing the U.S. District Court for the District of Columbia's 2014 decision, the appellate court upheld the Commission regulation as a reasonable interpretation of the disclosure provisions of the Federal Election Campaign Act (FECA).

Background

The Federal Election Campaign Act ("the Act") defines an electioneering communication as any broadcast, cable or satellite communication that refers to a clearly identified candidate for federal office, is publicly distributed within certain time periods before an election and is targeted to the relevant electorate. 52 U.S.C. §30104(f)(3). Every person who makes disbursements for an electioneering communication aggregating over $10,000 per year must file a report with the FEC identifying, among other things, the person who made the disbursement. 52 U.S.C. §30104(f)(1), (2). If the disbursement is paid out of a segregated account consisting of funds donated by individuals directly to the account for electioneering communications, the report must disclose the names and addresses of all those who donated an aggregate of $1,000 or more within a certain time period to the account. If the disbursements were not made from a segregated account, then the report must disclose the names and addresses of all contributors who contributed over $1,000 within a certain time period to the person making the disbursement. 52 U.S.C. §30104(f)(2)(E).

The regulation at issue in this case, 11 CFR 104.20(c)(9), was promulgated in 2007 after the Supreme Court’s decision in FEC v. Wisconsin Right to Life, Inc. which allowed all corporations and unions to make certain types of electioneering communications for the first time.[1] Because these corporations and labor organizations had not previously been permitted to make electioneering communications, the statute did not specify how such electioneering communications should be reported. The Commission’s regulation requires corporations or labor organizations that make electioneering communications to disclose the name and address of each person who made a donation aggregating $1,000 or more to the corporation or labor organization, “for the purpose of furthering electioneering communications.” 11 CFR 104.20(c)(9). (Emphasis added.)

In April 2011, Rep. Christopher Van Hollen filed suit against the Commission challenging the regulation as contrary to the law it was supposed to implement. In a 2012 opinion, the district court found that the Act requires every person who funds electioneering communications to disclose all contributors, and the Act cannot be construed to include a "purpose" requirement.

On September 18, 2012, the appellate court reversed the judgment of the district court, finding the statute’s disclosure provisions ambiguous. The appeals court remanded the case to the district court for further consideration. The district court then directed the Commission to inform the court whether the agency planned to initiate a rulemaking or defend its current regulation. On October 4, 2012, the Commission informed the court of its decision not to initiate a rulemaking to amend its regulations governing the disclosure of electioneering communications, but instead to continue to defend the current regulation at 11 CFR 104.20(c)(9).

Having found the law in question to be ambiguous, the appellate court directed the district court to determine whether the Commission’s regulation is based on a permissible construction of the statute. In its November 2014 opinion, the district court concluded that the Commission's promulgation of 11 CFR 104.20(c)(9) was arbitrary, capricious and contrary to law because it requires disclosure of only those donations made for the purpose of furthering electioneering communications.

Court decision

In its January 21 opinion, the appellate court found the Commission's purpose requirement to be reasonable and consistent with the text, history and purpose of the law. The opinion reiterates the opinion of the previous appeals panel that Congress left the meaning of "contributor" ambiguous and that Congress implicitly delegated authority to the agency to "fill in the statutory gaps." The opinion states the Commission's interpretation of the statute is not only permissible, but persuasive.

In analyzing whether the regulation was “arbitrary and capricious,” the opinion described the Commission’s three explanations for the purpose requirement:

  • A "Support Rationale." Without the purpose requirement, individual contributors to a union or corporation who do not support the entity’s electioneering communications could be mistakenly characterized as supporting the messages.
  • A "Burden Rationale." The purpose requirement ensures disclosing entities are not obliged to create an exhaustive list of every individual who provided more than $1,000, which could be very costly and require an inordinate amount of effort.
  • A "Privacy Rationale." The Commission tailored its regulations in a way that both effectuates the law's disclosure requirements and protects the constitutional interests in privacy.

The court concluded, "Because we can reasonably discern the FEC’s analytical path from these three rationales, we uphold its purpose requirement against Van Hollen’s challenge."

[1] The Supreme Court’s 2010 decision in Citizens United removed entirely the ban on corporate and union electioneering communications.

Source:   FEC Record—February 2016; December 2014; October 2012; September 2012; May 2012; April 2012; June 2011.

Documents

Appeals Court (DC Circuit) (15-5016 & 15-5017)

Court decisions:

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Appeals Court (DC Circuit) (12-5117)

Court decisions:

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District Court (DC)

Court decisions:

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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.