Citizens for Responsibility & Ethics in Wash. v. Fed. Election Comm'n

• Decision Date: 13 August 2015
• Docket Number: Case No. 1:14–cv–01419 (CRC)
• Citation: 164 F.Supp.3d 113
• Parties: Citizens for Responsibility and Ethics in Washington, et al., Plaintiff, v. Federal Election Commission, Defendant.
• Court: U.S. District Court — District of Columbia

164 F.Supp.3d 113

Citizens for Responsibility and Ethics in Washington, et al., Plaintiff,

v.Federal Election Commission, Defendant.

Case No. 1:14–cv–01419 (CRC)

United States District Court, District of Columbia.

Signed August 13, 2015

Adam J. Rappaport, Stuart C. McPhail, Citizens for Responsibility and Ethics in Washington, Anne L. Weismann, Campaign

for Acountability, Washington, DC, for Plaintiffs.

Charles Kitcher, Erin R. Chlopak, Gregory John Mueller, Kevin Deeley, Federal Election Commission, Washington, DC, for Defendant.

MEMORANDUM OPINION

CHRISTOPHER R. COOPER

, United States District Judge

The Federal Election Campaign Act (“FECA”) regulates the financing of federal election campaigns. Congress has vested the Federal Election Commission (“FEC”) with exclusive jurisdiction over civil enforcement of FECA. 52 U.S.C. § 30106(b)(1)

. If a person or organization believes that a violation of campaign finance laws has taken place, they can file a complaint with the FEC asking the Commission to investigate. And if four of the six FEC Commissioners find that there is “reason to believe” that a violation has occurred, the Commission can investigate. 52 U.S.C. § 30109(a)(2).

The Commission, which is made up of three Democratic Commissioners and three Republican Commissioners, has deadlocked on 3–to–3 votes more than 200 times in the six years preceding this lawsuit. See Nicholas Confessore, Election Panel Enacts Policies by Not Acting, N.Y. Times, Aug. 25, 2014, http://www.nytimes.com/2014/08/26/us/politics/election-panel-enacts-policies-by-not-acting.html. Because four affirmative votes are needed for the FEC to take an enforcement action or issue an advisory opinion, these repeated ties have prevented the FEC from interceding in numerous campaign finance disputes in recent years, even those where the FEC's General Counsel has recommended investigations. This is one such case.

In 2012, Plaintiff Citizens for Responsibility and Ethics in Washington (“CREW”) filed complaints with the FEC alleging that two organizations—the American Action Network (“AAN”) and Americans for Job Security (“AJS”)—had violated FECA by failing to register as political committees. Three of the FEC Commissioners voted not to pursue these alleged violations, resulting in the Commission's refraining from taking any enforcement action. The FEC's lack of action on these complaints and others like them has become predictable. This predictability in turn has led some FEC watchers to posit that “de facto rules” exist governing how the FEC interprets the law and when it will take action. Id.

Picking up on this critique, CREW points to the reasons provided by the FEC Commissioners who opposed taking action on its administrative complaints and labels these Commissioners' interpretation of the law a “de facto regulation.” Compl. ¶ 2. CREW's claim is that this “de facto regulation” was promulgated in violation of the Administrative Procedure Act (“APA”), which, among other things, prescribes procedures for administrative agencies engaged in rulemaking. The two decisions CREW identifies, however, are ordinary adjudications. Even if these adjudications resulted in the announcement of a new principle or interpretation, that principle or interpretation would not be a regulation within the meaning of the APA and would therefore not be subject to notice-and-comment procedures. Moreover, CREW has an adequate, alternative means to challenge the decisions through FECA's judicial review provision, which precludes APA review. The Court will therefore grant the FEC's partial Motion to Dismiss CREW's claims to the extent that they rely on the APA.

I. Background

A. Factual Background

Before the federal elections of 2010, AAN and AJS spent hundreds of thousands of dollars on advertisements. According to the factual allegations in Plaintiffs' Complaint, which the Court accepts as true for the purposes of this motion, the groups spent heavily on advertisements attacking or promoting federal candidates. For instance, one ad claimed that a candidate “supported massive tax hikes,” Compl. ¶ 49, and another accused a candidate of exporting jobs to India, id. ¶ 58. Other ads told voters, four days before the special election for U.S. Senate in Massachusetts, to “call [candidate] Scott Brown and tell him you agree Washington should listen to us,” id. ¶ 57, and stated in relation to a U.S. Senate primary candidate in Colorado, “Washington is a cesspool.... Not Ken Buck,” id. ¶ 60.

CREW filed administrative complaints with the FEC against each organization. Id. ¶¶ 69, 83. It alleged that the organizations' advertisements and related activities demonstrated that they were unregistered political committees. The FEC's Office of General Counsel agreed that there was reason to believe that the organizations had violated FECA and recommended investigating further. Id. ¶¶ 70, 84. Three Commissioners, however, voted against this recommendation, and the FEC dismissed the complaints. Id. ¶¶ 78, 91.

CREW then brought a four-count complaint in this Court. Counts One and Two request declaratory judgments that the FEC's dismissals of CREW's respective administrative complaints against AAN and AJS were arbitrary, capricious, and contrary to law under both FECA and the APA.¹ Counts Three and Four request a declaratory judgment and injunctive relief, under the APA only, on the grounds that the FEC promulgated a de facto regulation defining “political committee” without notice and comment. The FEC has moved to partially dismiss Counts One and Two to the extent that they rely on the APA, and Counts Three and Four in their entirety. The Court held a hearing on April 20, 2015.

B. Relevant Statutory Framework

1. Political Committee Requirements

The merits of CREW's complaint center on the FEC's interpretation of what makes an organization a “political committee” subject to FECA obligations. FECA provides that “any committee, club, association, or other group of persons” that receives more than $1,000 in “contributions”—either “for the purpose of influencing any election for Federal office,” or “rendered to a political committee without charge for any purpose”—or that makes more than $1,000 in “expenditures” for “the purpose of influencing any election for Federal office” during a calendar year constitutes a “political committee.” 52 U.S.C. § 30101(4)(A)

, (8)(A), (9)(A).² An organization that qualifies as a political committee must register with the FEC, maintain certain information about contributors, and file public reports, among other things. 52 U.S.C. §§ 30103 –30104. The Supreme Court in Buckley v. Valeo narrowed the definition of “political committee” in order to avoid vagueness concerns. 424 U.S. 1, 79, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam). It held that the term encompassed only two kinds of organizations: those “that are under the control of a candidate” and those “the major purpose of which is the nomination or election of a candidate.” Id.

In order to implement the Supreme Court's definition of “political committee,” the FEC considered adopting a rule defining “major purpose.” Political Committee Status, 69 Fed.Reg. 11,736, 11,745 (Mar. 11, 2004)

. After evaluating the public response to this proposal, it decided not to adopt such a rule, opting instead to determine whether an organization is a political committee on a case-by-case basis. Shays v. FEC, 424 F.Supp.2d 100, 108 (D.D.C.2006) ( “Shays I ”). When Members of Congress sued to challenge the FEC's decision not to define “major purpose” through rulemaking, the district court remanded the matter to the FEC for further explanation of why adjudication was appropriate for determining whether a group constituted a “political committee.” Id. at 115–16. The agency then issued a public notice that reiterated and explained its decision not to promulgate a regulation, but included indicators for determining a group's “major purpose.” Political Committee Status, 72 Fed.Reg. 5,595, 5,601 (Feb. 7, 2007) (Supplemental Explanation and Justification (“SE & J”)). When the case returned to the district court, the FEC contended that it needed flexibility in applying the Buckley categories, as “no articulable rule” regarding an organization's major purpose “would reach the correct result in all cases.” Shays v. FEC, 511 F.Supp.2d 19, 30 (D.D.C.2007) (“Shays II ”). Agreeing that assessing an organization's major purpose required “a very close examination of various activities and statements,” the district court deferred to the FEC and approved the Commission's case-by-case approach. Id. at 31.

2. Judicial Review

Any person or organization who believes that FECA has been violated may file a sworn complaint with the FEC. 52 U.S.C. § 30109(a)(1)

. Based on the complaint and any recommendation from the FEC's Office of General Counsel, the six Commissioners vote on whether there is “reason to believe that a person has committed, or is about to commit,” a violation of FECA. Id. § 30109(a)(2). Four votes are required to move forward, so three votes may block any investigation or enforcement. Id. § 30109(a)(2), (4). The Commission is structurally bipartisan: Of the six members, no more than three may be from the same political party. Id. § 30106(a)(1).

If four members vote to find “reason to believe” that a violation occurred or is about to occur, the FEC carries out an investigation. And after that investigation, if four Commissioners find “probable cause to believe” that a violation occurred, the General Counsel attempts to arrive at an agreement with the party accused of committing a violation. This agreement typically involves an admission of violations, a plan for remedial action to correct any violations, and a provision for the payment of civil penalties. If the General Counsel is unable to obtain an agreement, the FEC has the option of filing suit in federal district court to seek compliance and the imposition of penalties. Id. § 30109(a)(4), (5)

.

If three...