Court dismisses Commission’s case against one defendant in FEC v. Jeremy Johnson and John Swallow (D. Utah 2:15-cv-00439-DB)

On April 6, 2018, the United States District Court for the District of Utah (the court) dismissed the Commission’s case against John Swallow, one of two defendants in FEC v. Johnson. The court further ordered 11 CFR 110.4(b)(1)(iii) stricken from the Code of Federal Regulations and enjoined the Commission from enforcing it.

Background

The Commission alleged that during the 2009-2010 election cycle, Jeremy Johnson made contributions to three federal candidates that exceeded applicable limits and were made in the names of other persons who acted as Johnson’s straw donors. The Commission also alleged that John Swallow violated the Federal Election Campaign Act (the Act) by knowingly and willfully making contributions in the names of others when he caused, helped, and assisted Johnson’s straw donor scheme. Swallow moved to dismiss and for judgment on the pleadings, asserting that in adopting 11 CFR 110.4(b)(1)(iii), which applies to those who “[k]nowingly help or assist any person in making a contribution in the name of another,” the Commission exceeded its statutory authority by imposing secondary liability where Congress did not include it. Swallow also argued that the Commission had failed to state a claim against him, that the regulation burdened his protected speech under the First Amendment, and that it was promulgated in violation of the Administrative Procedure Act.

Analysis

The court found that the Act’s language was unambiguous, limiting the prohibition on contributions in the name of another to three types of persons: first, a person who makes a contribution in the name of another; second, a person who knowingly allows his name to be used by the contributor; and finally, a candidate who knowingly accepts such a contribution. Because none of these apply to Swallow, the court stated, it granted Swallow’s motion to dismiss. The court concluded that the Commission “went too far, exceeding its authority to write regulations and improperly intruding into the realm of lawmaking that is the exclusive province of Congress,” and ordered 11 CFR 110.4(b)(1)(iii) stricken from the regulations and enjoined the Commission from enforcing it.

Resources:

• FEC v. Jeremy Johnson and John Swallow litigation page