Campaign Legal Ctr. & Democracy 21 v. Fed. Election Comm'n

• Decision Date: 13 March 2020
• Docket Number: No. 18-5239,18-5239
• Citation: 952 F.3d 352
• Parties: CAMPAIGN LEGAL CENTER AND DEMOCRACY 21, Appellants v. FEDERAL ELECTION COMMISSION, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

952 F.3d 352

CAMPAIGN LEGAL CENTER AND DEMOCRACY 21, Appellants

v.FEDERAL ELECTION COMMISSION, et al., Appellees

No. 18-5239

United States Court of Appeals, District of Columbia Circuit.

Argued January 10, 2020

Decided March 13, 2020

Tara Malloy argued the cause for appellants. With her on the briefs were Paul M. Smith, Megan P. McAllen, Mark P. Gaber, Fred Wertheimer, and Donald J. Simon, Washington, DC. Joseph G. Hebert, Alexandria, VA, entered an appearance.

Stuart C. McPhail, Adam J. Rappaport, and Laura C. Beckerman were on the brief for amicus curiae Citizens for ResponsibilityandEthicsinWashingtoninsupportofplaintiffs-appellants.

Haven G. Ward, Attorney, Federal Election Commission, argued the cause for appellee. With her on the brief were Kevin Deeley, Associate General Counsel, Washington, DC, and Kevin P. Hancock, Acting Assistant General Counsel. Charles P. Kitcher and Tanya Senanayake, Attorneys, Washington, DC, entered appearances.

George J. Terwilliger III and Nathan R. Pittman, Washington, DC, were on the brief for intervenors-appellees F8, LLC, et al.

Before: Tatel and Garland, Circuit Judges, and Edwards, Senior Circuit Judge.

Concurring Opinion filed by Senior Circuit Judge Edwards.

Per Curiam:

The Federal Election Commission dismissed three administrative complaints alleging violations of the Federal Election Campaign Act’s disclosure requirements. Plaintiffs Campaign Legal Center and Democracy 21 contend that the dismissals were "contrary to law." 52 U.S.C. § 30109(a)(8)(C). The district court disagreed and granted summary judgment for the Commission. Campaign Legal Ctr. v. FEC , 312 F. Supp. 3d 153, 166 (D.D.C. 2018). Because the Commission provided a reasonable basis for the dismissals, we affirm the court’s grant of summary judgment.

I

As the Supreme Court has repeatedly declared, the electorate has an interest in knowing "where political campaign money comes from and how it is spent by the candidate." Buckley v. Valeo , 424 U.S. 1, 66, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (internal quotation marks omitted); see McCutcheon v. FEC , 572 U.S. 185, 223, 134 S.Ct. 1434, 188 L.Ed.2d 468 (2014). To that end, the Federal Election Campaign Act (FECA) imposes disclosure requirements on those who give and spend money to influence elections. The "straw donor" provision, 52 U.S.C. § 30122, is designed to ensure accurate disclosure of contributor information. It provides that "[n]o person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person." FECA also imposes distinct disclosure requirements on organizations that qualify as "political committees." Id. §§ 30102, 30103, 30104; see id. § 30101(4) (defining "political committee").

Any person may file a complaint alleging a violation of FECA with the Federal Election Commission. Id. § 30109(a)(1). After considering the complaint and any responses, the Commission opens an investigation when four of its six members find "reason to believe that a person has committed, or is about to commit, a violation" of FECA. Id. § 30109(a)(2). If the Commission dismisses a complaint, FECA provides a cause of action for "[a]ny party aggrieved" by the dismissal. Id. § 30109(a)(8)(A). If the court finds the dismissal to be "contrary to law," it "may direct the Commission to conform" with its ruling "within 30 days." Id. § 30109(a)(8)(C).

Between August 2011 and April 2015, the plaintiffs filed five administrative complaints with the Commission. See id. § 30109(a)(1). Each complaint alleged that various individuals made political contributions to Super PACs by using closely held corporations and limited liability companies (LLCs) as straw donors, thereby violating § 30122.¹ Four of the complaints also alleged that those corporate entities violated FECA by failing to register and file reports as political committees. See id. §§ 30102, 30103, 30104.

The Commission’s General Counsel issued reports on the five complaints. For four complaints, the General Counsel recommended that the Commission find reason to believe that a violation of the straw donor provision ( § 30122 ) had occurred, but that it should take no action concerning the alleged violations of the political committee provisions (§§ 30102, 30103, 30104). For the fifth complaint, the General Counsel did not recommend that the Commission find reason to believe that any violation of FECA had occurred. In February 2016, the commissioners deadlocked -- three votes to three -- on whether to open an investigation into any of the complaints. The commissioners then voted unanimously to dismiss all five complaints.

The three "controlling" commissioners who voted against opening an investigation issued a statement of reasons regarding their votes, which, under our case law, "necessarily states the agency’s reasons for acting as it did." FEC v. Nat’l Republican Senatorial Comm. , 966 F.2d 1471, 1476 (D.C. Cir. 1992). The commissioners explained that, "in an exercise of the Commission’s prosecutorial discretion," they declined to find reason to believe a violation of § 30122 occurred. Statement of Reasons of Chairman Petersen and Commissioners Hunter and Goodman (Statement of Reasons) at 14 (J.A. 160).

The controlling commissioners described the application of § 30122 to closely held corporations and corporate LLCs as a question of first impression, noting that, until the Supreme Court’s decision in Citizens United , federal law had categorically prohibited corporate contributions. See Citizens United v. FEC , 558 U.S. 310, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010) ; SpeechNow.org v. FEC , 599 F.3d 686 (D.C. Cir. 2010). They expressed concern that Commission precedent and regulations provided inadequate guidance regarding how § 30122 would be applied to closely held corporations and corporate LLCs. In light of this uncertainty, they said, pursuing enforcement in these cases would be "manifestly unfair," Statement of Reasons at 8 (J.A. 154), and in tension with "principles of due process, fair notice, and First Amendment clarity," id. at 2 (J.A. 148). When evaluating future straw donor allegations in similar factual contexts, the controlling commissioners planned to focus on "whether funds were intentionally funneled through a closely held corporation or corporate LLC for the purpose of making a contribution that evades the Act’s reporting requirements." Id. at 12 (J.A. 158).

The controlling commissioners also briefly discussed the political committee allegations. They explained that the General Counsel did not recommend finding reason to believe with respect to those allegations and, in any event, the complaints were best analyzed under the straw donor provision rather than the political committee provisions.

The plaintiffs filed suit against the Commission, challenging the dismissals of their administrative complaints as contrary to law. See 52 U.S.C. § 30109(a)(8)(A), (C). The district court dismissed two of the matters for lack of standing. Campaign Legal Ctr. v. FEC , 245 F. Supp. 3d 119, 125-26 (D.D.C. 2017). As to the remaining three, the district court granted summary judgment for the Commission, holding that the dismissals were not contrary to law. Campaign Legal Ctr. , 312 F. Supp. 3d at 166.

The plaintiffs appeal the district court’s grant of summary judgment. Our review is de novo. FEC v. Craig for U.S. Senate , 816 F.3d 829, 834 (D.C. Cir. 2016).

II

We begin with the question of standing. The plaintiffs are both nonprofit, nonpartisan organizations dedicated to supporting and enforcing campaign finance laws. To further its mission, Campaign Legal Center participates in "public education, litigation, regulatory practice, and legislative policy." Ryan Decl. at 2. Similarly, Democracy 21 "conducts public education efforts, participates in litigation," and undertakes "advocacy efforts." Wertheimer Decl. at 1. Neither organization engages in partisan political activity.

Plaintiffs rely on the doctrine of informational standing to "satisfy the ‘irreducible constitutional minimum’ of Article III standing: injury-in-fact, causation, and redressability." Shaw v. Marriott Int’l, Inc. , 605 F.3d 1039, 1042 (D.C. Cir. 2010) (quoting Lujan v. Defs. of Wildlife , 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). The Commission contends that plaintiffs do not allege a cognizable injury-in-fact because they are not deprived of information that will be used "for personal voting or political participation." FEC Br. 21. In the Commission’s view, "[n]onprofits that cannot vote, have no members who vote," and do not "engage in partisan political activity do not suffer a particular injury" when deprived of access to campaign finance disclosures. Id.

We disagree. "The law is settled that a denial of access to information qualifies as an injury in fact where a statute (on the claimants’ reading) requires that the information be publicly disclosed and there is no reason to doubt their claim that the information would help them." Envtl. Def. Fund v. EPA , 922 F.3d 446, 452 (D.C. Cir. 2019) (internal quotation marks omitted); see FEC v. Akins , 524 U.S. 11, 21, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998). The plaintiffs allege violations of FECA provisions that require accurate disclosure of contributor information, 52 U.S.C. § 30122, and the filing of public reports by political committees, id. §§ 30102, 30103, 30104. There is "no reason to doubt" that the disclosures they seek would further their efforts to defend and implement campaign finance reform. See Friends of Animals v. Jewell , 824 F.3d 1033, 1041 (D.C. Cir. 2016) (quoting Ethyl Corp. v. EPA , 306 F.3d 1144, 1148 (D.C. Cir. 2002) ); see generally Ryan Decl.; Wertheimer Decl. Finally, the plaintiffs’ injury is "fairly traceable" to the Commission’s dismissals of the complaints, and it is likely that the injury will...