Citizens for Responsibility & Ethics in Wash. v. Am. Action Network

Decision Date30 September 2019
Docket NumberCase No. 18-cv-945 (CRC)
CourtU.S. District Court — District of Columbia

Laura C. Beckerman, Stuart C. McPhail, Citizens for Responsibility AND Ethics in Washington, Washington, DC, Sathya S. Gosselin, Hausfeld LLP, Washington, DC, Seth R. Gassman, Hausfeld LLP, San Francisco, CA, for Plaintiff.

Claire J. Evans, Jeremy J. Broggi, Stephen J. Obermeier, Wiley Rein LLP, Washington, DC, for Defendant.


CHRISTOPHER R. COOPER, United States District Judge

"The Federal Election Commission is the only government agency that does exactly what Congress designed it to do: nothing." The punchline of that old Washington joke may be increasingly true, but its premise is uncharitable to Congress. Because when Congress mandated that the six-member Commission be split down party lines, it anticipated that partisan deadlocks were likely to result. So it legislated a fix: Under the Federal Election Campaign Act ("FECA"), if the Commission dismisses an administrative complaint alleging a campaign finance law violation by a third party, the complainant may sue the FEC in federal district court. And if the court finds that the dismissal was contrary to FECA, and the Commission fails to correct the illegality on remand, the administrative complainant can sue the alleged violator directly.

That's what happened here. In 2012, the government watchdog group Citizens for Responsibility and Ethics in Washington ("CREW") complained to the FEC that the American Action Network ("AAN"), a Washington-based political non-profit, was operating as an unregistered political committee in violation of FECA. The FEC dismissed the complaint, finding no reason to believe that a violation had occurred, and CREW sued. This Court concluded that the agency had acted contrary to FECA in dismissing the complaint and remanded the complaint to the agency, ordering it to act within thirty days. The FEC complied but dismissed the complaint anew on different grounds, prompting CREW to sue a second time. The Court concluded that the Commission had again misapplied FECA and again remanded the matter with instructions to act. This time around, the agency failed to comply with the Court's directive. Accordingly, CREW has invoked FECA's citizen-suit provision to sue AAN directly, seeking a declaration that AAN is a political committee and an injunction ordering it to make the attendant disclosures that FECA requires. To the Court's knowledge, this is the first suit to be filed under FECA's citizen-suit provision.

AAN now moves to dismiss CREW's complaint, mounting a bevy of challenges to CREW's standing, the reviewability of the Commission's dismissals, the sufficiency of CREW's factual allegations, and the constitutionality of FECA's citizen-suit provision. For the reasons to follow, the Court will deny AAN's motion in large part.

I. Background

The Federal Election Campaign Act imposes disclosure requirements on organizations that spend money to influence federal elections. These requirements advance "three important interests: providing the electorate with relevant information about the candidates and their supporters; deterring actual corruption and discouraging the use of money for improper purposes; and facilitating enforcement of the prohibitions in the Act." McConnell v. FEC, 540 U.S. 93, 121, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003) (controlling opinion of Stevens & O'Connor, J.J.).

Some of FECA's disclosure requirements depend on the type of communication an organization engages in. Where, for example, an entity spends over $250 in a calendar year on "independent expenditure[s]"—defined as communications "expressly advocating the election or defeat of a clearly identified candidate," 52 U.S.C. § 30101(17)(A) —it must file a report with the Commission containing information about itself and its contributors, id. § 30104(c)(1).

FECA also mandates certain disclosures based on an entity's campaign-related spending patterns. As relevant here, "political committee[s]" are required to appoint a treasurer, keep records on their contributors, and file regular reports during a general election year disclosing, among other information, the amounts they spent on contributions and expenditures. Id. §§ 30102–04. Political committees must also register with the FEC. Id. § 30103.

An entity qualifies as a "political committee" when it satisfies two separate conditions: (1) it receives or spends more than $1,000 in a calendar year for the purpose of influencing a federal election, id. § 30101(4)(A), (8)(A)(i), (9)(A)(i) ; and (2) it is either "under the control of a candidate" or has "the major purpose" of "nominat[ing] or electi[ng] ... a candidate," Buckley v. Valeo, 424 U.S. 1, 79, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976). This second condition comes not from the text of FECA, but from the Supreme Court's decision in Buckley. Because a broader definition of "political committee" could unduly threaten the speech of "groups engaged purely in issue discussion"—as opposed to those engaged in "campaign related" activity— Buckley held that this narrowing construction was constitutionally required. Id.

Twenty-six years after Buckley, Congress passed the Bipartisan Campaign Reform Act of 2002 ("BCRA"), which amended FECA by adding new disclosure requirements. BCRA was aimed in part at regulating corporate and union spending on ads that, though nominally related to political issues, were plainly intended to influence voters in upcoming federal elections. See McConnell, 540 U.S. at 126–32, 124 S.Ct. 619. To capture these "so-called issue ads," id. at 126, 124 S.Ct. 619, Congress created a new category of communications, "electioneering communication[s]," which are television advertisements that air within sixty days of a federal election, clearly identify a candidate running for federal office, and target the relevant electorate, 52 U.S.C. § 30104(f)(3)(A)(i). Under BCRA, an organization that spends over $10,000 per calendar year on electioneering communications must file a statement disclosing information about itself, the candidates identified in the communications, the recipients of any disbursements, and any donors who have given over $1,000 to the organization toward electioneering communications since the beginning of the preceding calendar year. Id. § 30104(f)(1)(2) ; 11 C.F.R. § 104.20(c).1 "[E]lectioneering communications" must also include disclaimers noting the name of the entity that paid for the ad and whether the ad was authorized by a candidate. 52 U.S.C. § 30120(a) ; see 11 C.F.R. § 100.11(c)(3).

The FEC, which is tasked with enforcing FECA, is an independent agency with six Commissioners. See 52 U.S.C. § 30106(a)(1). The Commission has chosen not to adopt a rule that would further clarify the meaning of Buckley's "major purpose" limitation. Instead, it determines on a case-by-case basis whether particular entities have a major purpose of nominating or electing a candidate. See Shays v. FEC, 511 F. Supp. 2d 19, 30 (D.D.C. 2007).

Any person or entity may file a complaint with the FEC alleging a FECA violation. 52 U.S.C. § 30109(a)(1). If four or more Commissioners find "reason to believe" that FECA was or will soon be violated, then the Commission "shall ... investigat[e]" the complaint. Id. § 30109(a)(2). If fewer than four Commissioners find "reason to believe" that FECA was or will soon be violated, the complaint is dismissed. See id. § 30106(c). When a complaint is dismissed, Commissioners voting against enforcement must provide a statement of reasons explaining their dismissal decision. See FEC v. Nat'l Republican Senatorial Comm., 966 F.2d 1471, 1476 (D.C. Cir. 1992). "Any party aggrieved" by an FEC dismissal decision may petition for this Court's review. 52 U.S.C. § 30109(a)(8)(A). If the Court finds the agency's dismissal to be "contrary to law," it can direct the FEC to take action within thirty days that "conform[s] with" the Court's ruling. Id. § 30109(a)(8)(C). If the Commission fails to take action to conform with the Court's order, the administrative complainant may sue the alleged FECA violator directly "to remedy the violation involved in the original complaint." Id.

B. Procedural History

The Court's previous Opinions extensively detail AAN's electioneering communications, the FEC's two deadlocks, and the controlling Commissioners' two Statements of Reasons for not opening an investigation. See CREW v. FEC, ("CREW I"), 209 F. Supp. 3d 77 (D.D.C. 2016) ; CREW v. FEC ("CREW II"), 299 F. Supp. 3d 83 (D.D.C. 2018). The Court will only summarize the key points here.

1. The FEC's First Dismissal

In 2012, CREW and its then-executive director filed an administrative complaint with the FEC alleging that, between July 23, 2009 and June 30, 2011, AAN operated as an unregistered political committee. A tax-exempt § 501(c)(4) organization, AAN's self-described mission is to "encourage and promote ‘center-right policies based on the principles of freedom, limited government, American exceptionalism, and strong national security.’ " Motion to Dismiss ("MTD") at 6 (quoting AAN, About AAN , To that end, it spent large sums of money on political advertisements. From mid-2009 to mid-2011, AAN devoted about $4 million to independent expenditures (ads directly imploring voters to support or oppose federal candidates) and $13.7 million to electioneering communications (ads identifying candidates near an election and targeting the relevant electorate) out of its $27.1 million in total spending. CREW alleged in its administrative complaint that this spending qualified AAN as a political committee within the meaning of FECA, as supplemented by Buckley's "major purpose" test, and that AAN violated FECA by not complying with the disclosure requirements for such entities.


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