EMILY's List v. FEC (Appeals court)
On September 18, 2009, the U.S. Court of Appeals for the District of Columbia found that three Commission regulations that implement how nonconnected federal political committees may allocate funds to finance certain activities that influence both federal and non-federal elections, and that clarify when funds obtained in response to solicitations are contributions under the Federal Election Campaign Act (the Act), violate the Constitution and are in excess of the Commission’s statutory authority. The court found these regulations to be invalid and ordered the district court to vacate the challenged regulations.
Background
EMILY’s List is a nonconnected political committee registered with the FEC. In January 2005, EMILY’s List filed suit in the U.S. District Court for the District of Columbia, asserting a facial challenge to regulations promulgated by the FEC to implement provisions of the Act.
The regulations at issue established a new rule for when funds received in response to certain solicitations must be treated as “contributions” under the Act and thereby must be subject to federal limitations and prohibitions. The regulations also modified the Commission’s rules regarding how political committees may allocate funds between federal and nonfederal accounts.
Under current FEC rules, nonconnected political committees that maintain both federal and nonfederal accounts may allocate administrative expenses, costs of generic voter drives and costs of public communications that refer to a political party, but not to specific candidates, with a minimum of 50 percent federal funds. (The remainder may be allocated to the nonfederal account). 11 CFR 106.6(c). Public communications and voter drives that refer to one or more clearly identified federal candidates, but not to any nonfederal candidates, must be financed with 100 percent federal funds. 11 CFR 106.6(f)(1). Public communications and voter drives that refer to one or more clearly identified nonfederal candidates but do not refer to any federal candidates may be financed with 100 percent nonfederal funds. 11 CFR 106.6(f)(2).
With regard to solicitations, Commission regulations state that funds received in response to a solicitation must be considered “contributions” under the Act if the communication indicates that any portion of the funds received will be used to support or oppose the election of a clearly identified federal candidate. 11 CFR 100.57(a). Likewise, if a solicitation refers to a clearly identified federal candidate and a political party, but not to a clearly identified nonfederal candidate, all funds received in response are considered contributions. 11 CFR 100.57(b)(1). In contrast, however, if the solicitation refers to one or more clearly identified nonfederal candidates, in addition to a clearly identified federal candidate, at least 50 percent of the funds received must be treated as contributions under the Act, regardless of whether the solicitation also refers to a political party. 11 CFR 100.57(b)(2).
EMILY’s List sought to enjoin enforcement of the regulations, alleging that each was in excess of the Commission’s authority, was arbitrary and capricious, was promulgated without adequate notice under the Administrative Procedure Act (APA) and violated the First Amendment to the Constitution.
Court decision
The court held that Commission regulations at 11 CFR 106.6(c), 106.6(f) and 100.57 violate the First Amendment and exceed the FEC’s authority under the Act.
In its discussion of the First Amendment, the court referred to Buckley v. Valeo, 424 U.S. 1, 14 (1976), which found that campaign contributions and expenditures constitute “speech” and, therefore, fall under the protection of the First Amendment. The court noted that in Davis v. FEC 128 S. Ct. 2759, 2773 (2008), it was decided that limiting contributions and expenditures in an effort to equalize the political field is not a “legitimate government interest” and, therefore, cannot be the reasoning behind these types of regulations. The court went on to state that the only legitimate government interest that allows for the restriction of campaign finances is preventing corruption or the appearance of corruption. The appeals court stated that that government interest has only been applied to contributions to candidates and parties because those two groups pose the greatest risk of quid pro quo corruption. Buckley, 424 U.S. at 26-27; see also Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290, 296-97 (1981).
The court stated that, since the regulations in question do not address candidates, parties or for-profit corporations, which the court said are the only entities the Supreme Court has allowed these types of limits to be placed on, the appeals court had to determine how to apply the above principles to non-profit entities. The court determined that “the central issue turns out to be whether independent non-profits are treated like individual citizens (who under Buckley have the right to spend unlimited money to support their preferred candidates) or like political parties (which under McConnell [v. FEC, 540 U.S. 93 (2003),] do not have the right to raise and spend unlimited soft money).” The court then made a distinction between three different types of non-profits and stated how their contributions and expenditures can be regulated.
First, the court stated, there are non-profits that make no contributions, but only expenditures for political activities such as advertisements and GOTV activities. In the decision, the court stated that “non-profit entities, like individual citizens, are constitutionally entitled to raise and spend unlimited money in support of candidates for elected office—with the narrow exception that, under Austin, the Government may restrict to some degree how non-profits spend donations received from the general treasuries of for profit corporations or unions.”
The court stated that a second category of non-profits are those that make contributions to candidates, but no expenditures. The court stated that these groups can be limited in the contributions they receive.
The court stated that a third category, which includes EMILY’s List, consists of those non-profits that make both contributions and expenditures. According to the court, such groups “are entitled to make their expenditures…out of a soft-money or general treasury account that is not subject to source and amount limits,” as long as they make their contributions from a hard-money account. The court did not interpret McConnell as permitting the types of soft-money restrictions currently placed on political parties to be applied to non-profits like EMILY’s List.
The court then held that sections 106.6(c), 106.6(f) and 100.57 are not closely drawn to meet an important government interest and would, therefore, be struck down. Among other things, the court stated that “non-profits are constitutionally entitled to pay 100 percent of the costs of…voter drive activities [and generic campaign activity] out of their soft-money accounts.”¹ The court reached the same conclusion for ads that refer to a federal candidate.² It further stated that the solicitation regulation unconstitutionally prohibits a non-profit from stating that the money it is raising will be used to support its preferred candidate.³ The court also held that the regulations exceeded the Commission’s statutory authority because, the court said, they required non-profits to use hard money for activities that were exclusively non-federal. The court found the regulations to be invalid and ordered the district court to vacate the challenged regulations.
Judge Brown concurred in the result reached by the two judges in the majority because she agreed that the regulations exceeded the Commission’s authority under the Act. However, she disagreed with the majority’s First Amendment analysis, and she stated that the court’s decision to reach the constitutional questions was unnecessary.
U.S Court of Appeals for the District of Columbia, 08-5422
¹ 11 CFR 106.6(c) requires that nonconnected political committees maintaining both a federal and a nonfederal account allocate administrative expenses, costs of generic voter drives and costs of public communications that refer to a political party, but not to a specific candidate, with a minimum of 50 percent federal funds.
² 11 CFR 106.6(f)(1) requires that public communications and voter drives that refer to one or more clearly identified federal candidates, but not to any nonfederal candidates, must be financed with 100 percent federal funds.
³ 11 CFR 100.57 states that funds received in response to a solicitation must be considered federal “contributions” under the Act if the communication indicates that any portion of the funds received will be used to support or oppose the election of a clearly identified federal candidate.