Independence Institute v. FEC remanded to three-judge district court

On March 1, 2016, a panel of the U.S. Court of Appeals for the District of Columbia Circuit issued a majority and a dissenting opinion. The majority opinion rejected the district court's dismissal of the Independence Institute's challenge to the Federal Election Campaign Act's (the Act) electioneering communications provisions. The appeals court remanded the case to U.S. District Court for the District of Columbia with instructions to convene a three-judge district court to consider the plaintiff's constitutional challenge under a special judicial review provision of the Bipartisan Campaign Reform Act (BCRA).

Background
On September 2, 2014, the Independence Institute, a 501(c)(3) tax-exempt organization in Colorado, filed suit asking for a preliminary injunction and a three-judge court to hear its challenge to the Federal Election Campaign Act's (the Act) definition of “electioneering communication” and related disclosure requirements. The group contends those requirements are overbroad as applied to its proposed radio ad that would mention a federal candidate and air within 60 days of the general election.

The Act defines an “electioneering communication” as any broadcast, cable or satellite communication that refers to a clearly identified federal candidate, is made within 30 days of a primary election or 60 days of a general, special or runoff election, and is targeted to the relevant electorate. 52 U.S.C. §30104(f)(3)(A)(i). The statute provides that persons making disbursements that aggregate more than $10,000 per year must file a report with the Commission disclosing the names and addresses of all contributors who contributed more than $1,000. 52 U.S.C. §30104(f)(1), (2)(A). Commission regulations provide that when a corporation finances an electioneering communication, only the sources of donations to the corporation made “for the purpose of further electioneering communications” must be disclosed. 11 C.F.R. 104.20(c)(9).

On October 6, 2014, the district court found the plaintiff’s challenge to be foreclosed by Supreme Court precedent, principally by Citizens United v. FEC, and dismissed the case in its entirety.

Analysis
To qualify for consideration by a three-judge district court under the BCRA a suit must raise a substantial federal question. The appeals court noted that the Supreme Court's recent Shapiro v. McManus decision stressed that the exception for insubstantial claims is narrow and the exception "applies only when the case is 'essentially fictitious, wholly insubstantial, obviously frivolous, and obviously without merit.'”

Independence Institute claims that its as-applied challenge to the electioneering communications rules differs from the one rejected by the Supreme Court in Citizens United. Among other things, Independence Institute emphasized that it is a 501(c)(3) charitable organization, while Citizens United was a 501(c)(4) advocacy organization. The majority specified that Citizens United did not address "whether a speaker’s tax status or the nature of the nonprofit organization affects the constitutional analysis of BCRA’s disclosure requirement."

The majority concluded that because "Independence Institute has advanced at least one argument – the 501(c)(3) argument – that is not 'essentially fictitious, wholly insubstantial, obviously frivolous, and obviously without merit,'” the case must proceed to a three-judge court.

The appeals court reversed the judgment of the district court denying the request for a three-judge district court, vacated the judgment of the district court in favor of the FEC, and remanded the case to the district court with directions for it to initiate the procedures to convene a three-judge district court.

In a dissenting opinion, one member of the panel concluded that Independence Institute’s claims are “squarely foreclosed” by Supreme Court precedent, and that he accordingly would have dismissed the case for lack of jurisdiction.

Appeal from the United States District Court for the District of Columbia: Case 1:14-cv-01500

Resources:

• Independence Institute v. FEC litigation page