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  • FEC Record: Litigation

Stop Reckless Economic Instability Caused by Democrats, et al. v. FEC (Appeals court 2016)

February 29, 2016

On February 23, 2016, the U.S. Court of Appeals for the Fourth Circuit issued a decision in Stop Reckless Economic Instability Caused by Democrats ("Stop PAC"), et al. v. FEC vacating and remanding in part and affirming in part a judgment of the U.S. District Court for the Eastern District of Virginia.

The plaintiffs — a group of political committees and a federal candidate [FN1]— had challenged the differing contribution limits for multicandidate and non-multicandidate political action committees (PACs). They contended that the limits infringed on their First Amendment rights of association and expression, as well as the Fifth Amendment''s guarantee of equal protection. The appeals court dismissed as moot the challenge to the limits for non-multicandidate committees, and affirmed the district court''s judgment that the multicandidate limits do not violate the equal protection guarantee of the Fifth Amendment.

Legal background and constitutional challenge
The Federal Election Campaign Act (the Act) and Commission regulations define a multicandidate committee as a political committee (PAC) that has received contributions from more than 50 persons, has contributed to five or more federal candidates, and has been registered with the FEC for at least six months. 52 U.S.C. § 30116(a)(4) and 11 CFR 100.5(e)(3). A multicandidate committee may contribute up to $5,000 per election to a federal candidate, up to $5,000 per calendar year to a state political party committee, and up to $15,000 per calendar year to a national party committee. During the 2015-16 election cycle, committees that have not met the three qualifications above (non-multicandidate committees) may contribute up to $2,700 per election to a federal candidate, up to $10,000 per calendar year to a state political party committee, and up to $33,400 per calendar year to any national party committee. The limits on non-multicandidate committee contributions to candidates and national party committees are indexed for inflation each election cycle.

At the time this suit was filed, Stop PAC was a non-multicandidate committee because it was less than six-months old. Stop PAC challenged the six-month registration period as infringing on its First Amendment rights, and also claimed that the lower $2,700 limit on its contributions to federal candidates violated its Fifth Amendment guarantee of equal protection. Similarly, the Tea Party Fund, a multicandidate plaintiff, alleged that the $5,000 and $15,000 annual limits on its respective contributions to state and national party committees violated the Fifth Amendment by imposing lower limits than would apply if the Fund had not qualified as a multicandidate committee.

In its response, the Commission argued that Stop PAC and American Future PAC (the plaintiff added after Stop PAC became a multicandidate committee) did not have standing to sue because they had not suffered any cognizable injury under law. The Commission also argued that Stop PAC and American Future PAC’s challenge was partially moot because both PACs had qualified as multicandidate committees under the Act. The Commission further argued that the plaintiffs’ claims lacked merit because the six-month registration period and the challenged contribution limits help prevent the risk and appearance of corruption.

District court decision
In its February 27, 2015, opinion, the district court held that the PACs could not “show that they have suffered a cognizable constitutional injury."

The court noted that Stop PAC and American Future PAC were still fully able to associate with candidates of their choice and, citing the Supreme Court’s holding in Buckley v. Valeo, held that the monetary contribution limits imposed on them as non-multicandidate committees did not violate their First Amendment rights.

The district court also held that the Act’s varying contribution limits do not violate the plaintiffs’ Fifth Amendment equal protection guarantee because multicandidate and non-multicandidate PACs are not “similarly situated” as they relate to core political purposes. The court stated that even if multicandidate and non-multicandidate committees were similarly situated, the government has a sufficient interest in preventing corruption of the political process and the circumvention of contribution limits to justify different contribution limits that apply to new PACs and those that apply to multicandidate committees.

Fourth Circuit Court of Appeals decision
The appeals court agreed with the Commission''s argument that Stop PAC and American Future PAC''s claims became moot once they qualified as multicandidate committees, since that change in status ensured that Stop PAC and American Future PAC would never again be bound by the same contribution limits that they were challenging. Accordingly, since Stop PAC and American Future PAC each met multicandidate status before the district court granted summary judgment, the Court of Appeals held that the district court erred in not dismissing the challenge to the contribution limits as they apply to non-multicandidate committees.

With respect to the contribution limits that apply to multicandidate committees, the appeals court held that the Tea Party Fund’s challenges were not moot since there is a reasonable expectation that the challenged contribution limits will be applied against the Tea Party Fund during a future election cycle.

The appeals court held that the challenged limits in this case did not violate the Fifth Amendment''s equal protection guarantee. The decrease in the amount of contributions that multicandidate political committees may make annually to national, state and local political party committees "is more than counteracted by the increase in the limits in the amount of contributions that [multicandidate committees] can make to individual candidates." The court concluded that since the plaintiffs could not demonstrate that the Act''s contribution limits discriminate against multicandidate committees, the Commission was entitled to summary judgment.

United States Court Of Appeals for the Fourth Circuit No. 15-1455

 1. The original challenge had included Niger Innis, a federal candidate plaintiff whom the court dismissed at the plaintiffs’ request. Non-multicandidate plaintiff Stop PAC became a multicandidate committee on September 11, 2014. Later, another non-multicandidate committee, American Future PAC, was added as a plaintiff to assert Stop PAC’s claims. American Future PAC became a multicandidate committee on February 11, 2015.