Citation531 F. Supp. 756
Decision Date09 February 1982
Docket NumberCiv. A. No. 81-79-ATH.
PartiesATHENS LUMBER COMPANY, INC., et al., Plaintiffs, v. FEDERAL ELECTION COMMISSION, et al., Defendants.
CourtU.S. District Court — Middle District of Georgia

Emmet J. Bondurant, Atlanta, Ga., for plaintiffs.

Charles N. Steele, Gen. Counsel, Lawrence N. Noble, Asst. Gen. Counsel, Carolyn U. Oliphant, Sp. Asst. Gen. Counsel, Jeffrey H. Bowman, Federal Election Commission, Washington, D. C., Bernard E. Namie, III, Asst. U. S. Atty., Macon, Ga., for defendants.

OWENS, Chief Judge:

On July 27, 1981, Athens Lumber Company, Incorporated, a Georgia corporation with its sole office and place of business in Athens, Georgia, and its president and stockholder, John P. Bondurant, as plaintiffs filed their complaint against defendants the Federal Election Commission and Attorney General William French Smith seeking a declaratory judgment finding 2 U.S.C. § 441b(a), to wit:

"It is unlawful for any national bank, or any corporation organized by authority of any law of Congress, to make a contribution or expenditure in connection with any election to any political office, or in connection with any primary election or political convention or caucus held to select candidates for any political office, or for any corporation whatever, or any labor organization, to make a contribution or expenditure in connection with any election at which presidential and vice presidential electors or a Senator or Representative in, or a Delegate or Resident Commissioner to, Congress are to be voted for, or in connection with any primary election or political convention or caucus held to select candidates for any of the foregoing offices, or for any candidate, political committee, or other person knowing to accept or receive any contribution prohibited by this section, or any officer or any director of any corporation or any national bank or any officer of any labor organization to consent to any contribution or expenditure by the corporation, national bank, or labor organization, as the case may be, prohibited by this section."

to be constitutionally invalid under the First and Fifth Amendments to the Constitution of the United States.

The complaint alleges that this court has jurisdiction under 28 U.S.C. § 1331,1 the federal question jurisdictional statute, and 2 U.S.C. § 437h, a provision of the Federal Elections Campaign Act, which states:

"Judicial review—Actions, including declaratory judgments, for construction of constitutional questions; eligible plaintiffs; certification of such questions to courts of appeals sitting en banc
(a) The Commission, the national committee of any political party, or any individual eligible to vote in any election for the office of President may institute such actions in the appropriate district court of the United States, including actions for declaratory judgment, as may be appropriate to construe the constitutionality of any provision of this Act. The district court immediately shall certify all questions of constitutionality, of this Act to the United States court of appeals for the circuit involved, which shall hear the matter sitting en banc."

Complainants seek a declaratory judgment as specially provided for in § 437h and as generally provided for in 28 U.S.C. § 2201 which states:

"Creation of remedy
In a case of actual controversy within its jurisdiction, except with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code of 1954, or a proceeding under section 505 or 1146 of title 11, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such."

In their complaint the plaintiffs allege that Athens Lumber Company, Inc.—a manufacturer and seller of architectural millwork and seller of building materials— having been adversely affected in its business by policies, actions and laws of the United States, "desires to exercise rights protected and guaranteed by the First and Fifth Amendments by assisting and promoting the election to federal offices of those persons whom the plaintiffs believe are best qualified to serve the interests of the people of the United States, and, by so doing, to promote the business and welfare of the Athens Lumber Company, Incorporated, its shareholders, customers and suppliers..." (Complaint, para. 7).

Plaintiffs further allege that all the plaintiff corporation's directors and shareholders—plaintiff John P. Bondurant, Mary B. Bondurant, J. P. Bondurant, III, Birdie Bondurant Clower and Emmet J. Bondurant, counsel for plaintiffs—by unanimous action taken on July 23, 1981, have resolved that:

"1. The President of the Company is hereby authorized to expend a maximum of $10,000 through December 31, 1984 to support the election to national office of those persons whom he believes to be best qualified and who will best serve the people of the United States, and the interests of the Company, its employees, shareholders and customers; such candidates may include candidates for election to the United States House of Representatives, the United States Senate, and President or Vice President of the United States or member of the Electoral College to be nominated or elected at any primary, general or special election or political convention at which such candidates are to be nominated or elected held during 1981 through 1984.
"2. No contribution or other gift of money directly to a candidate or to a campaign of a candidate shall exceed $100 per candidate or campaign, without the prior approval of the Board of Directors.
"3. At least 50% of the fund shall be expended by the Company, independently of the campaign of any candidate for public office, on newspaper, radio, and television advertisements endorsing, promoting or opposing the election of specifically identified candidates to federal office.
"4. The President is authorized to include, at the expense of the Company, messages endorsing the positions of and urging the election of specifically identified candidates for federal office, in monthly statements regularly mailed by the Company to its customers and in letters mailed by the Company to its suppliers and persons whom the President may designate.
"5. No contributions or expenditures shall be made for political purposes, either from the special fund provided for in subparagraph 1 above, or from any other funds of the Company, until (a) 2 U.S.C. § 441b(a) is either repealed or declared invalid by a court of competent jurisdiction, and (b) the Company receives an opinion of counsel that the proposed expenditure or contribution does not violate any other valid provision of federal or state law, or any valid regulation of the Federal Election Commission or other regulatory agency.
"6. The President is hereby authorized to employ Trotter, Bondurant, Miller & Hishon to represent the Company and the President in bringing any appropriate suit on behalf of the Company under 2 U.S.C. § 437h(a), and such other statute as may be appropriate seeking a determination of the validity of 2 U.S.C. § 441b(a) by a court of competent jurisdiction." (Exhibit A to Complaint)

Complainants say that each form of political expression provided for by said resolution and that plaintiff corporation intends to engage in, will constitute a violation of 2 U.S.C. § 441b(a). They further say that they "are afraid to exercise their rights to engage in any of the protected political activities authorized by the unanimous resolution...because of the threat and fear that defendants will attempt to enforce one or more of the sanctions...provided for in 2 U.S.C. § 437g against plaintiffs, thereby subjecting plaintiffs to the burden, expense and embarrassment of defending themselves and the potential risk of severe penalties, in the event that the Act's restrictions are held to be valid." (Complaint, para. 13). This uncertainty, they further allege, deters them from exercising their First and Fifth Amendment constitutional rights and has caused and will continue to cause them to suffer irreparable harm. They contend that only a declaratory judgment invalidating § 441b(a) can cause this irreparable harm to cease.

Section 437g, 2 U.S.C., provides for civil enforcement by the Commission of the provision in question through informal methods of conference, conciliation and persuasion, and authorizes the Commission to enter into a conciliation agreement. Under certain circumstances the agreement may require the payment of civil penalties. § 437g(a)(4) and (5). If the Commission is unable to enter into a conciliation agreement, it may institute a civil action in district court for injunctive relief and for imposition of a civil penalty not to exceed $5,000 or the amount of the contribution or expenditure. A showing of a knowing and wilful violation increases the possible civil penalty to the greater of $10,000 or 200% of the contribution or expenditure. § 437g (a)(6). Alternatively, the Commission, if it determines probable cause to believe a knowing and wilful violation of the Act has occurred, may refer the matter to the Attorney General. 437g(a)(5)(C).

Criminal penalties are specified in § 437g(d)(1) through (3), to wit:

"(d)(1)(A) Any person who knowingly and wilfully commits a violation of any provision of this Act which involves the making, receiving, or reporting of any contribution or expenditure aggregating $2,000 or more during a calendar year shall be fined, or imprisoned for not more than one year, or both. The amount of this fine shall not exceed the greater of $25,000 or 300 percent of any contribution or expenditure involved in such violation.
"(B) In the case of a knowing and willful violation of section 316(b)(3)

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4 cases
  • Athens Lumber Co., Inc. v. Federal Election Com'n, 82-8102
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 22, 1982
    ...Court of Appeals for the Eleventh Circuit en banc pursuant to the expedited procedures provided in 2 U.S.C. § 437h. The district court, 531 F.Supp. 756, refused such certification and dismissed appellants' claim for want of Article III jurisdiction. We reverse, and find that both Athens and......
  • United States v. Baylin, Crim. A. No. 81-22.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • February 9, 1982
    ...... of the corporation with the result that federal tax liability was understated by approximately ......
  • Michigan State Chamber of Commerce v. Austin, 84-1833
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • April 21, 1986
    ...for future illegal contributions were only speculative and did not present a "concrete dispute." Athens Lumber Co., Inc. v. Federal Election Commission, 531 F.Supp. 756, 764, 767 (M.D.Ga.1982). The court of appeals reversed the district court's finding of nonjusticiability with respect to b......
  • Athens Lumber Company, Incorporated, Bondurant v. Federal Election Commission, 82-8102
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 24, 1983
    ...stated, we find the limitations and prohibitions of which appellants complain to be constitutional. The judgment of the district court 531 F.Supp. 756 dismissing the case is REVERSED. The case is REMANDED for entry of judgment for * Judge Anderson is recused and did not participate in this ......

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