CREW v. FEC (D.D.C. 1:14-cv-1419) (District court)

On September 19, 2016, the United States District Court for the District of Columbia (the "Court") ruled that the Commission''s dismissal of two administrative complaints filed by Citizens for Responsibility and Ethics in Washington and its founder Melanie Sloan ("CREW") was contrary to law.

Background
In 2012, CREW filed administrative complaints with the FEC against Americans for Job Security (MUR 6538) and American Action Network (MUR 6589). The complaints alleged that the groups should have registered as political committees because they received more than $1,000 in "contributions" or made more than $1,000 in "expenditures," as those terms are defined in the Federal Election Campaign Act (the Act), and their major purpose was allegedly the nomination or election of federal candidates. The Commission, by a vote of three to three, did not find reason to believe that either AJS or AAN had violated the Act, and closed both cases. (The Act requires an affirmative vote of four or more Commission members to find reason to believe that FECA has been violated. 52 USC § 30109(a)(2).)

On August 20, 2014, CREW filed an action for judicial review of the Commission''s dismissal of CREW''s administrative complaints. CREW challenged the controlling Commissioners'' approach of applying the "major purpose test" by focusing on express advocacy spending and excluding AJS''s and AAN''s spending on electioneering communications. CREW also challenged the controlling Commissioners'' approach of considering AAN and AJS''s relevant spending over the course of each organization''s lifetime instead of during a calendar year. And finally, CREW alleged that the controlling Commissioners had improperly applied a 50% plus spending threshold for relevant expenditures. CREW separately claimed that the dismissal decisions amounted to "de facto rules" that violated the Administrative Procedure Act (APA), but in August 2015, the Court dismissed CREW''s APA claims because FECA''s judicial review provision, 52 USC § 30109(a)(8), provides an "adequate, alternative means to challenge" the dismissal decisions. The parties, including intervenor-defendant AAN, subsequently filed cross-motions for summary judgment on the remaining FECA-related claims.

Decision
The Court determined that Citizen''s United v. FEC and subsequent lower court decisions recognized a distinction between less-restrictive disclosure requirements and a more restrictive ban on speech. The court concluded that the controlling Commissioners'' decision to apply an express advocacy/issue speech distinction in the context of FECA''s political committee requirements—excluding the groups'' electioneering communications from relevant electoral spending in conducting their major purpose analysis—was contrary to law.

The Court also concluded that a major purpose evaluation that considers the entire lifetime of the organization is neither unreasonable nor contrary to law "as a general matter." But the court found that in the AAN and AJS matters, the Commissioners had "refus[ed] to give any weight whatsoever to an organizations'' relative spending in the most recent calendar year" and that such an approach, "at least as applied to" a fifteen-year-old organization like AJS, was contrary to law "in that it tends to ignore crucial facts indicating whether an organization''s major purpose has changed."

With respect to CREW''s arguments regarding the Commission''s alleged application of a 50% plus spending threshold for defining major purpose, the Court rejected the premise of that argument, explaining that "most importantly, it is far from apparent that the Commissioners did apply any such 50%-plus spending threshold for defining major purpose," and further concluded that "[a] reasonable application of a 50%-plus rule would not appear to be arbitrary and capricious."

Ultimately, the Court found that the Commission''s dismissal of CREW''s administrative complaints against AJS and AAN was contrary to law, and directed the Commission to conform with its declaration within 30 days.

Resources

• CREW v. FEC (14-1419) litigation page