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

• Docket Number: Case No. 18-cv-945 (CRC)
• Decision Date: 02 March 2022
• Citation: 590 F.Supp.3d 164
• Parties: CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Plaintiff, v. AMERICAN ACTION NETWORK, Defendant.
• Court: U.S. District Court — District of Columbia

590 F.Supp.3d 164

CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Plaintiff,

v.AMERICAN ACTION NETWORK, Defendant.

Case No. 18-cv-945 (CRC)

United States District Court, District of Columbia.

Signed March 2, 2022

Claire Agnes Marie Rosset, Hilary K. Scherrer, Sathya S. Gosselin, Hausfeld LLP, Laura C. Beckerman, Office of the Attorney General, District of Columbia, Office of Consumer Protection, Public Advocacy Division, Stuart C. McPhail, Citizens for Responsibility and Ethics in Washington, Washington, DC, Seth R. Gassman, Hausfeld LLP, San Francisco, CA, for Plaintiff.

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

MEMORANDUM OPINION

CHRISTOPHER R. COOPER, United States District Judge

Plaintiff Citizens for Responsibility and Ethics in Washington ("CREW") brought this action under the citizen-suit provision of the Federal Election Campaign Act ("FECA"), claiming that defendant American Action Network ("AAN") violated FECA by operating as an unregistered political committee. In 2019, the Court denied AAN's motion to dismiss the suit.

AAN now moves for reconsideration of that ruling, arguing that an intervening D.C. Circuit decision prohibits the Court from reviewing CREW's claim. See CREW v. FEC ("New Models"), 993 F.3d 880 (D.C. Cir. 2021). Although the Court stands by its prior reasoning, it agrees that New Models precludes review. Bound by that decision, the Court will grant AAN's motion and dismiss the suit.

I. Background

The Court has recounted the decade-long procedural history of this case in three prior opinions. See CREW v. FEC ("CREW I"), 209 F. Supp. 3d 77 (D.D.C. 2016) (finding the initial dismissal of CREW's complaint against AAN "contrary to law," and remanding to the Commission); CREW v. FEC ("CREW II"), 299 F. Supp. 3d 83 (D.D.C. 2018) (finding the second dismissal of CREW's complaint contrary to law, and again remanding to the Commission); CREW v. AAN ("CREW III"), 410 F. Supp. 3d 1 (D.D.C. 2019) (largely denying AAN's motion to dismiss CREW's citizen suit, which is the opinion and order now under reconsideration); see also CREW v. AAN ("CREW IV"), 415 F. Supp. 3d 143 (D.D.C. 2019) (denying AAN's request to certify an interlocutory appeal). The Court will limit its recitation here to the background bearing on AAN's present motion.

In 2012, CREW filed an administrative complaint with the Federal Election Commission alleging that AAN had been operating as an unregistered political committee in violation of FECA.¹ CREW based its complaint on AAN's expenditure of close to $18 million on political advertisements (nearly two-thirds of its total spending) over a two-year period straddling the 2010 midterm elections. The administrative complaint contended that the content of these AAN-sponsored ads indicated that the organization's "major purpose" was federal election activity—a finding that would have required AAN to register as a political committee under FECA and comply with the statute's attendant disclosure obligations. See CREW III, 410 F. Supp. 3d at 9.

The FEC's Office of General Counsel urged the Commission to open an investigation into CREW's allegations. But the agency's six Commissioners deadlocked 3-3 on whether to investigate, resulting in the dismissal of the administrative complaint. As required by FECA, the so-called "controlling Commissioners"—those who had voted against further investigation—drafted a lengthy Statement of Reasons explaining their decision to deep-six the case. See CREW v. FEC ("CHGO"), 892 F.3d 434, 437–38 (D.C. Cir. 2018) (explaining that, "for purposes of judicial review," the statement of reasons from controlling Commissioners is "treated as if they were expressing the Commission's rationale for dismissal").

In sum, the Commissioners reasoned that appellate precedent applying the First Amendment to political advertising required the Commission to treat a large portion of AAN's ads—those comprising so-called "electioneering communications" that are broadcast shortly before an election—as "genuine issue advocacy," and to categorically exclude expenditures on those ads from its assessment of AAN's status as a political committee. See generally In re Am. Action Network, Inc., Statement of Reasons of Chairman Lee E. Goodman and Commissioners Caroline C. Hunter and Matthew S. Petersen ("First Statement of Reasons"), MUR No. 6589 (July 30, 2014).² In one of the statement's 153 footnotes, the controlling Commissioners added that "constitutional doubts" stemming from their legal analysis "militate in favor of cautious exercise of [their] prosecutorial discretion." Id. at 23–24 n.137. They echoed this concern in the concluding paragraph of the statement, summarily noting that they were also voting against an investigation "in exercise of our prosecutorial discretion." Id. at 27.

FECA permits a rebuffed complainant to challenge a Commission dismissal as "contrary to law" through a suit against the agency in district court. 52 U.S.C. § 30109(a)(8)(C). CREW did just that, and AAN intervened. The Court granted summary judgment for CREW, finding that the controlling Commissioners’ blanket treatment of all electioneering communications as genuine issue advocacy was contrary to FECA and the vast weight of applicable precedent. CREW I, 209 F. Supp. 3d at 92–93. The Court therefore remanded the case to the Commission with instructions to consider the content of the individual ads at issue in assessing AAN's status as a political committee. Id. at 95.

On remand, the Office of General Counsel again recommended initiating an investigation, and the Commission again deadlocked, leading to a second dismissal. A new Statement of Reasons issued by the same three controlling Commissioners analyzed the ads individually, as the Court had instructed. In re Am. Action Network, Inc., Statement of Reasons of Chairman Matthew S. Peterson and Commissioners Caroline C. Hunter and Lee E. Goodman ("Second Statement of Reasons"), MUR No. 6589R (Oct. 19, 2016).³ It nonetheless concluded that most of the ads did not evince an election-related purpose as measured against the Commissioners’ analysis of applicable legal standards. The new statement nowhere mentioned prosecutorial discretion. CREW challenged the second dismissal, and the Court again found the dismissal contrary to law and remanded the matter to the agency. This time, however, the Commission failed to take any further action within 30 days of remand, as FECA requires. See CREW III, 410 F. Supp. 3d at 11 (citing 52 U.S.C. § 30109(a)(8)(C) ). That delay gave CREW the right to sue AAN directly under FECA's citizen-suit provision, which in did in April 2018. 52 U.S.C. § 30109(a)(8)(C).

AAN moved to dismiss CREW's citizen suit on a host of grounds. As relevant here, AAN argued that the suit was unreviewable because the controlling Commissioners indicated (albeit briefly) in their first Statement of Reasons that prosecutorial discretion played a part in their decision to dismiss CREW's original complaint. In advancing this argument, AAN relied heavily on a then-recent ruling by a divided D.C. Circuit panel, which found an FEC dismissal of an administrative complaint based on prosecutorial discretion to be beyond to judicial review. See CHGO, 892 F.3d 434. Finding AAN's reliance on CHGO misplaced, the Court concluded that the FEC's dismissal was subject to judicial review, and, rejecting AAN's other arguments as well, proceeded to deny its motion to dismiss in large part. See CREW III, 410 F. Supp. 3d at 15–20, 30.

For ease of reference on the question of reviewability, and the benefit of any reviewing court, the Court excerpts its reasoning in full below.

* * * The Court does not read CHGO to preclude judicial review here. CHGO based its holding on Heckler v. Chaney, where the Supreme Court held that agency nonenforcement decisions are "presumptively unreviewable" under the Administrative Procedure Act to the extent they are "committed to agency discretion by law." CHGO, 892 F.3d at 438–41 (citing Heckler, 470 U.S. 821, 830, 832–33, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) ). Nonenforcement decisions receive this broad reprieve from judicial review because, in deciding to forgo enforcement, agencies

must not only assess whether a violation has occurred, but whether agency resources are best spent on this violation or another, whether the agency is likely to succeed if it acts, whether the particular enforcement action requested best fits the agency's overall policies, and, indeed, whether the agency has enough resources to undertake the action at all. An agency generally cannot act against each technical violation of the statute it is charged with enforcing.

Heckler, 470 U.S. at 831–32, 105 S.Ct. 1649 ; see CHGO, 892 F.3d at 439 & n.7 (quoting this passage). The controlling Commissioners in CHGO relied on the very type of practical and prudential considerations that Heckler indicated were not subject to judicial review. Their Statement of Reasons explained

that the statute of limitations had expired or was about to; that the association ... no longer existed; that the association had filed termination papers with the IRS four years earlier; that it had no money; that its counsel had resigned; that the "defunct" association no longer had any agents who could legally bind it; and that any action against the association would raise "novel legal issues that the Commission had no briefing or time to decide."

CHGO, 892 F.3d at 438 (quoting Statement of Reasons). Weighing these considerations, the three Commissioners concluded that the "case did not warrant further use of Commission resources." Id.

While finding the dismissal unreviewable under Heckler, the CHGO panel majority acknowledged prior Supreme Court and D.C. Circuit cases holding that FEC nonenforcement decisions, unlike those of other agencies, are reviewable for a determination of whether they are "contrary to law" when based on...