Federal Election Com'n v. NRA Political Victory Fund, 91-5360

• Decision Date: 25 October 1993
• Docket Number: No. 91-5360,91-5360
• Citation: 6 F.3d 821
• Parties: , 62 USLW 2256 FEDERAL ELECTION COMMISSION v. NRA POLITICAL VICTORY FUND, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 821

6 F.3d 821

303 U.S.App.D.C. 362, 62 USLW 2256

FEDERAL ELECTION COMMISSION v. NRA POLITICAL VICTORY FUND, et al., Appellants.

No. 91-5360.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 1, 1993.

Decided Oct. 22, 1993.

As Amended Oct. 25, 1993.

Appeal from the United States District Court for the District of Columbia (90cv0309).

Charles J. Cooper, with whom Michael A. Carvin, Robert J. Cynkar, and Elisabeth T. Roth, Washington, DC, were on the brief, for appellants.

Richard B. Bader, Associate Gen. Counsel, Federal Election Com'n, with whom Lawrence M. Noble, Gen. Counsel, and Marcus C. Migliore, Atty., Federal Election Commission, Washington, DC, were on the brief, for appellee.

Before WALD, RUTH BADER GINSBURG, ^* and SILBERMAN, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge:

This enforcement action by the Federal Election Commission concerns a transfer of $415,744.72 from the National Rifle Association Institute for Legislative Action (NRA-ILA) to its political action committee, the NRA Political Victory Fund (PVF). The district court held that the transfer was a "contribution" prohibited by the Federal Election Campaign Act (FECA), 2 U.S.C. Secs. 431 et seq. (1988), and rejected appellants' various constitutional arguments based on the First Amendment and separation of powers.

We believe that the Commission lacks authority to bring this enforcement action because its composition violates the Constitution's separation of powers. Congress exceeded its legislative authority when it placed its agents, the Secretary of the Senate and the Clerk of the House of Representatives, on the independent Commission as non-voting ex officio members. We therefore reverse.

I.

In March and July of 1988, PVF sent a letter to all NRA members soliciting funds to finance its activities in the upcoming November elections. The cost of the two mailings totalled $415,744.72. NRA-ILA paid the vendors the full amount on behalf of PVF. On August 1, 1988, PVF reimbursed NRA-ILA for these payments, an action it soon regretted because of a shortfall in PVF's operating budget. Accordingly, on October 20, 1988, NRA-ILA wrote a check to PVF to return the reimbursement. In the final weeks before the fall elections, PVF used its funds, which included the $415,744.72, to make independent expenditures (such as television or print advertisements) on behalf of candidates and to contribute directly to political campaigns.

The Commission does not challenge the propriety of the first two transactions. NRA-ILA's initial payments to vendors fall within section 441b(b)(2)(C), which permits a corporation to pay for the expenses of its political action committee in connection with direct solicitation of members. 2 U.S.C. Sec. 441b(b)(2)(C) (1988). PVF's reimbursement to NRA-ILA is lawful because FECA does not restrict the flow of money from a political action committee to its parent corporation.

The Commission, however, notified appellants in October 1989 that it had reason to believe that the third transaction violated 2 U.S.C. Sec. 441b(a) (1988), which prohibits corporate contributions and expenditures in connection with federal elections. Appellants disagreed and argued that the Commission had improperly considered the third transfer as if it were isolated from the two prior transactions. When statutorily mandated negotiations failed in late 1990, the Commission brought this civil enforcement action, see 2 U.S.C. Sec. 437g(a)(6)(A) (1988), against NRA-ILA for making the illegal contribution, PVF for accepting it, and Grant A. Wills for facilitating it as Treasurer of PVF. See 2 U.S.C. Sec. 441b(a) (1988).

Both sides moved for summary judgment. Appellants argued that the transaction did not violate section 441b(a), that the Commission lacked authority to act against them because certain features of the operation and composition of the Commission violate separation of powers principles, and that the transaction was protected by the First Amendment under the Supreme Court's decision in Federal Election Comm'n v. Massachusetts Citizens for Life, Inc., 479 U.S. 238, 107 S.Ct. 616, 93 L.Ed.2d 539 (1986).

The district court determined that the October 20, 1988, transfer was a "contribution" in violation of section 441b(a). The court held that appellants' separation of powers arguments were non-justiciable and rejected their First Amendment claims. The court imposed a civil penalty equal to the Commission's cost of investigating and prosecuting the action, and enjoined appellants from similar transfers in the future. See Federal Election Comm'n v. NRA Political Victory Fund, 778 F.Supp. 62 (D.D.C.1991). Appellants essentially repeat their arguments on appeal, contending that the district court erred in deciding each of their claims.

II.

Because we hold that the composition of the Commission violates separation of powers, we do not pass on appellants' arguments based on the First Amendment as well as those turning on statutory interpretation. Although courts should " 'refrain from passing on the constitutionality of an act of Congress unless obliged to do so,' " Ashwander v. Tennessee Valley Auth., 297 U.S. 288, 341, 56 S.Ct. 466, 480, 80 L.Ed. 688 (1936) (Brandeis, J., concurring) (quoting Blair v. United States, 250 U.S. 273, 279, 39 S.Ct. 468, 470, 63 L.Ed. 979 (1919)), we note that in this unusual circumstance we need not find a violation of section 441b before addressing the separation of powers claim. The Supreme Court in similar situations--when plaintiffs challenged the constitutional composition or character of a tribunal--determined the constitutional status issue without reaching the merits. ¹ See, e.g., Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 859, 106 S.Ct. 3245, 3261, 92 L.Ed.2d 675 (1986) (upholding constitutionality of CFTC's authority to adjudicate common law counterclaims without passing on the merits of the counterclaim); Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 56, 87, 102 S.Ct. 2858, 2864, 2880, 73 L.Ed.2d 598 (1982) (holding that the bankruptcy courts' jurisdiction to adjudicate common law claims violated Article III without deciding the claims). ²

Appellants claim that the composition of the Commission, particularly its two ex officio members, violates the Constitution's separation of powers. In 1974, Congress amended FECA to create the Commission and charged it with administering the Act. The Commission then, as now, had eight members: the Secretary of the Senate and the Clerk of the House of Representatives (non-voting and ex officio ), and six voting members whom Congress played varying roles in appointing. In Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976), the Supreme Court held, inter alia, that the limitations Congress placed on the President's power to nominate voting members of the Commission violated the Appointments Clause. Although the Court mentioned the ex officio members, see id. at 113, 96 S.Ct. at 679, it never discussed the constitutionality of their status.

After Buckley, Congress reconstituted the Commission as follows:

The Commission is composed of the Secretary of the Senate and the Clerk of the House of Representatives or their designees, ex officio and without the right to vote, and 6 members appointed by the President, by and with the advice and consent of the Senate. No more than 3 members of the Commission appointed under this paragraph may be affiliated with the same political party.

2 U.S.C. Sec. 437c(a)(1) (1988).

It is argued that the reconstituted Commission still violates separation of powers principles in several respects. First, appellants urge that FECA's requirement that "[n]o more than 3 members of the Commission ... may be affiliated with the same political party," 2 U.S.C. Sec. 437c(a)(1) (1988), impermissibly limits the President's nomination power under the Appointments Clause. Second, appellants maintain that the President does not exercise sufficient control over the Commission's civil enforcement authority, a core executive function, to satisfy the constitutional mandate that he "take Care that the Laws be faithfully executed." U.S. CONST. art. II, Sec. 3. And finally, they assert that Congress exceeded its Article I authority by placing the Secretary and the Clerk on the Commission as ex officio members.

The Commission claims that appellants lack standing to raise the separation of powers claims. As has so often been said, standing requires a showing of (1) an injury in fact that is (2) fairly traceable to allegedly unlawful government action and (3) redressable by the requested relief. See Metropolitan Washington Airports Auth. v. Citizens for Abatement of Aircraft Noise, Inc., --- U.S. ----, ----, 111 S.Ct. 2298, 2306, 115 L.Ed.2d 236 (1991) (citing Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984)). This case does not raise the first and last of these requirements; civil sanctions are injuries in fact, and vacating the order imposing the sanctions redresses the injuries. The district court held, however, that appellants' injury is not "fairly traceable" to (caused by) the alleged constitutional defects of the Commission because appellants did not allege that the outcome of the Commission's decisionmaking process would have been different if it were composed differently.

We think the district court's conclusion was erroneous at least with respect to appellants' last two separation of powers arguments--that the independence of the Commission frustrates the President's executive power and that the ex officio members unconstitutionally serve on the Commission. A litigant "is not required to show that he has received less favorable treatment than he would have if the agency were lawfully constituted and otherwise authorized to discharge its functions." Committee for Monetary Reform v....