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  • FEC Record: Litigation

Shays and Meehan v. FEC (Appeals court)

September 1, 2005

On July 15, 2005, the U.S. Court of Appeals for the District of Columbia upheld the appealed portion of the U.S. District Court for the District of Columbia’s September 18, 2004, decision invalidating several Commission regulations. The district court had upheld four of the regulations challenged in this case, but found that other regulations implementing provisions of the Bipartisan Campaign Reform Act of 2002 (BCRA) either were inconsistent with Congress’s intent in enacting the BCRA or violated the Administrative Procedure Act’s rules for promulgating regulations. The Commission subsequently appealed the district court’s decision concerning five of the invalidated regulations. (See the November 2004 Record.)


The standard for judicial review in a case such as this, where a party alleges that an agency’s actions are contrary to the statute, is called Chevron review, after the Supreme Court’s decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). In Chevron review, the court asks first whether Congress has spoken to the precise issue at hand. If so, then the agency’s interpretation of the statute must implement Congress’s unambiguous intent. If, however, Congress has not spoken explicitly to the question at hand, the court must consider whether the agency’s rules are based on a permissible reading of the statute. In this case, the district court also found that in some instances the FEC failed to engage in a reasoned analysis when it promulgated its regulations. Under the Administrative Procedure Act (APA), regulations that are promulgated without a reasoned analysis may be found “arbitrary and capricious” and may be set aside by a reviewing court. 5 U.S.C. §706(2)(A).

Appeals court decision

The appeals court affirmed the district court’s decision to invalidate each of the regulations addressed in the Commission’s appeal, as discussed below.1

Coordinated communications

Under the Commission’s regulations, a communication is considered a coordinated communication if it meets a three-pronged test regarding who paid for the communication, the communication’s content and whether the payer’s interaction with a candidate or party satisfies specified conduct standards. At issue here was the element of the conduct prong stating that a communication made within 120 days of a primary or general election and directed to the relevant electorate may be a coordinated communication if it refers to a political party or clearly identified federal candidate. Before the 120-day mark, the rule covers only communications that republish official campaign materials or contain express advocacy.

The plaintiffs argued in their complaint that the 120-day window offers a safe harbor for communications made outside of this window, which is not authorized by the statute. The district court found that, while Congress had not spoken directly to content restrictions, the regulation undercut the Federal Election Campaign Act’s statutory purpose, and, thus, did not pass the second step of Chevron review.

The appeals court disagreed in part with the district court and found that a standard based on content, time and place could be permissible. Nevertheless, the appeals court affirmed the district court’s decision to invalidate the regulation, finding that the rule was arbitrary and capricious under the APA. The appeals court found that the Commission offered no persuasive justification when it promulgated the rule for why 120 days is an appropriate time period for the content standard.

"Solicit" and "direct"

During its rulemaking process, the Commission defined “solicit” and “direct” to mean “ask.” The district court found that these regulations failed the second step of Chevron analysis because interpreting these terms to cover only direct requests created a potential for abuse that would defy Congress’s purpose in the BCRA.

However, the appeals court found that these regulations failed the first stage of Chevron review. According to the appeals court, Congress “has clearly spoken to this issue and enacted a prohibition broader than the one the FEC adopted. In context, BCRA’s terms ‘solicit’ and ‘direct’ cover indirect requests.” The appeals court therefore upheld the district court’s invalidating the regulations.

Electioneering communications

An electioneering communication is defined in the BCRA as “any broadcast, cable or satellite communication” that (1) refers to a clearly identified federal candidate, (2) “is made within” 60 days before a general or 30 days before a primary election and (3) is “targeted to the relevant electorate.” 2 U.S.C. §434(f)(3). The appeals court agreed with the district court’s finding that the FEC violated the intent of Congress by adding a provision in its regulations that a communication must be made “for a fee” in order to be considered an electioneering communication—thus exempting unpaid broadcasts such as public service announcements. According to the court, the Commission added a fourth qualification to the definition of electioneering communication that was not authorized by the statute. As a result, the regulation failed the first step of Chevron review.2

The appeals court affirmed the district court’s invalidation of the regulation.

Salary allocation

Federal election activity (FEA) is a new concept under the BCRA that identifies activities that state and local party organizations must finance with federal funds. One category of FEA includes the salaries of state and local party employees devoting more than 25 percent of their paid time in any month to activities related to federal elections or FEA. Once an employee’s work in a month crosses this 25 percent threshold, the employee’s entire salary for that month must be paid exclusively with federally permissible funds. The plaintiffs took issue with the fact that the regulations eliminated any allocation requirement for salaries of employees devoting 25 percent or less of their time to federal activities, thus freeing state and local party committees to pay those salaries entirely with nonfederal funds.

The district court invalidated this regulation, finding that it did not pass the second step of Chevron review. The district court found that, because state party committees could avoid paying any salaries with federal funds by dividing the federal election workload among multiple employees working 25 percent of their time on federal activities, the exclusive use of nonfederal funds to pay for salaries and wages compromised the purposes of the BCRA.

The appeals court, in contrast, found that the regulation was arbitrary and capricious under APA requirements because the Commission did not provide a reasoned justification for not requiring allocation of these salaries. The appeals court therefore affirmed the district court’s invalidation of the regulation.

Levin funds

The final district court finding appealed by the Commission involved the “Levin Amendment,” which allows state and local party committees to finance certain types of FEA (generic party campaigning, get-out-the-vote activity and voter identification and registration drives) with monies called Levin funds that are subject to fewer controls than federal funds. Generally, party committees must allocate these FEA costs between Levin funds and federal funds, or use entirely federal funds. A regulatory exception, however, provides that committees need not allocate if they spend no more than $5,000 total on allocable expenditures, an amount the Commission considers to be de minimis. The appeals court found that the Commission presented no justification for this exemption. Accordingly, the district court’s invalidation was affirmed because the regulations fell short of APA standards.

U.S. Court of Appeals for the District of Columbia Circuit, No. 04-5352.


1 As a threshold issue, the appeals court found that the plaintiffs, Christopher Shays and Martin Meehan, have standing to bring this suit and that the issues at hand are ripe for judicial decision.

2 The district court also invalidated other parts of the electioneering communications regulations. However, the “for a fee” provision was the only aspect of the district court’s ruling on this regulation that the Commission appealed.

  • Author 
    • Meredith Trimble