Carey v. FEC (District court injunction, June 2011)

On June 14, 2011, the U.S. District Court for the District of Columbia granted a limited preliminary injunction to plaintiffs Rear Adm. (Ret.) James J. Carey, Kelly S. Eustis and the National Defense Political Action Committee (NDPAC) (collectively, “Plaintiffs”) enjoining the Commission from enforcing certain provisions of the Federal Election Campaign Act (the Act) which limit the amount of contributions individuals may make and that NDPA may accept into a separate bank account for the purpose of making independent expenditures.

Federal election campaign law

The Act imposes contribution limits on the sources and amounts of contributions that may be made by individuals and groups to federal candidates, political party committees and political action committees (PACs). Currently, the Act limits contributions from individuals to PACs to $5,000 per calendar year. 2 U.S.C. § 441a(a)(1)(C). Additionally, the Act limits the total amount of contributions that an individual may make to all committees during a two-year period, beginning on January 1 of an odd-numbered year and ending on December 31 oft he next even-numbered year. 2 U.S.C. § 441a(a)(3). Recent Supreme Court and D.C. Circuit Court cases have partially invalidated certain provisions of the Act with respect to the limits placed on contributions made to pay for independent expenditures. See Citizens United v. FEC, 130 S. Ct. 876 (2010) and SpeechNow.org v. FEC, 599 F. 3d. 686 (D.C. Cir. 2010). The Act defines an independent expenditure as an expenditure for a communication by a person “expressly advocating the election or defeat of a clearly identified [federal] candidate” and that is not made in concert or cooperation with or at the request or suggestion of such candidate, the candidate’s campaign committee, or their agents, or a political party committee or its agents. 2 U.S.C. §431(17). These courts have found that limits on contributions used for independent expenditures are unconstitutional because limiting them violates the First Amendment rights of prospective contributors and recipients.

Background

Admiral Carey is the founder and treasurer of NDPAC, which raises funds pursuant to the Act’s amount and source limitations and makes contributions to candidates for federal office up to the applicable limit and also plans to make independent expenditures in support of or in opposition to federal candidates. Plaintiff Kelly S. Eustis is a potential contributor to NDPAC who would like to contribute more than the amount currently allowed toward NDPAC’s planned independent expenditures in federal campaigns.

NDPAC requested an advisory opinion from the Commission in August, 2010, asking whether it would be lawful for NDPAC to accept unlimited contributions for the purpose of making independent expenditures into a bank account that was separated from funds it used to make campaign contributions.

The Commission failed to issue a binding advisory opinion by the required four affirmative votes. On January 31, 2011, the Plaintiffs filed a complaint and motion for preliminary injunction in the District Court for the District of Columbia, seeking to enjoin the Commission from enforcing 2 U.S.C. §§ 441(a)(1)(C) and 441a(a)(3) against the Plaintiffs should NDPAC and Admiral Carey solicit and receive contributions in excess of the Act’s limits and/or should Mr. Eustis contribute more than currently allowed.

Legal analysis

The District Court held that the Plaintiffs have a high likelihood of partial success on the merits of their complaint. The District Court reasoned that since laws that burden political speech are subject to “strict scrutiny,” the Government must prove that restrictions further a compelling interest and are narrowly tailored to achieve that interest. The court held that the Government did not meet this burden because it did not adequately explain why NDPAC’s proposed separation of accounts does not satisfy the same objective as separate political action committees. The court also held that NDPAC’s proposal would comply with the D.C. Circuit Court of Appeals decision in EMILY’s List v. FEC (581 F.3d 1 (D.C. Cir. 2009)) by establishing separate accounts to 1) solicit and spend unlimited funds for independent federal expenditures (soft money); and 2) solicit and spend federally permissible funds on direct contributions to federal political candidates and/or political parties (hard money). The court further held that because the 2012 presidential election cycle is under way, the Plaintiffs “must be freed immediately from the chill of possible FEC enforcement,” and that prior cases from the D.C. Circuit and Supreme Courts support the Plaintiffs’ position. The court concluded that the Plaintiffs demonstrate that the Commission’s interference with their First Amendment rights constitutes irreparable harm. 

Preliminary injunction

The district court granted a preliminary injunction to the Plaintiffs that the Commission shall not enforce 2 U.S.C. §§ 441a(a)(1)(C) and 441a(a)(3) against the Plaintiffs with regard to independent expenditures so long as NDPAC maintains separate bank accounts for its “hard money” and “soft money,” proportionately pays related administrative costs and complies with the applicable “hard money” limits for its PAC account that is used to make contributions directly to federal candidates.

U.S. District Court for the District of Columbia: 1:11-cv-00259-RMC.