Common Cause v. Federal Election Com'n, Civ. A. No. 86-1838.

• Decision Date: 03 August 1987
• Docket Number: Civ. A. No. 86-1838.
• Citation: 692 F. Supp. 1391
• Parties: COMMON CAUSE, et al., Plaintiffs, v. FEDERAL ELECTION COMMISSION, Defendant.
• Court: U.S. District Court — District of Columbia

692 F. Supp. 1391

COMMON CAUSE, et al., Plaintiffs, v. FEDERAL ELECTION COMMISSION, Defendant.

Civ. A. No. 86-1838.

United States District Court, District of Columbia.

August 3, 1987.

Roger M. Witten, Shelia C. Cheston, W. Hardy Callcott, Wilmer, Cutler & Pickering, Washington, D.C., for plaintiffs.

Lisa E. Klein, Federal Election Com'n, Washington, D.C., for defendant.

MEMORANDUM

FLANNERY, District Judge.

This matter comes before the court on cross motions for summary judgment. In this action, plaintiffs Common Cause and certain named members (hereinafter "Common Cause") challenge a Federal Election Commission ("FEC" or "Commission") decision denying a Petition for Rulemaking that Common Cause filed on November 7, 1984.

I. Background

In its Petition, plaintiff Common Cause alleged that there were violations of the Federal Election Campaigns Act ("FECA"), 2 U.S.C. § 431, et seq., associated with the use of "soft money" in connection with federal elections. Rulemaking Record Before the Federal Election Commission ("Record"), Exhibit A, Attachment 1. It its Petition, Common Cause defined "soft money" as:

... funds that are raised by Presidential campaigns and national and congressional political party organizations purportedly for use by state and local party organizations in nonfederal elections, from sources who would be barred from making such contributions in connection with a federal election, e.g. from corporations and labor unions and from individuals who have reached their federal contribution limits.

Id. Common Cause further alleged that this "soft money" was not being raised or spent solely for nonfederal election purposes, but was instead "being channeled to state parties with the clear goal of influencing the outcome of federal elections." Id.

Upon receipt of Common Cause's petition, the General Counsel of the Commission recommended that a Notice of Availability be published in the Federal Register, giving interested parties 30 days in which to comment on the Petition. The General Counsel further recommended that the Petition be sent to the Internal Revenue Service, seeking its comments. Record, Attachment 2. The Commission adopted both recommendations. A Notice of Availability was published, and a copy of the Petition was sent to the IRS, as well as to the Democratic Senatorial Campaign Committee and Democratic Congressional Campaign Committee, the National Republican Senatorial Campaign Committee, the Republican National Committee, the Democratic National Committee, and the National Republican Congressional Campaign Committee. Record, Attachments 9-13. The FEC received five comments. Record, Attachments 15(a)-(e).

On December 5, 1985, the General Counsel recommended to the Commission that it "seek information and comment on the factual and legal issues raised in the `soft money' discussion and hold hearings to determine whether problems do in fact exist of the nature alleged by Common Cause." Record, Attachment 18. Based on this recommendation, the Commission scheduled two days of public hearings, and approved a Notice of Inquiry for publication in the Federal Register. The Notice of Inquiry set forth in six pages of detail the allegations of Common Cause. Record, Attachment 21. Further, the Commission sent the Notice of Inquiry to 77 organizations, including state election officials and political party organizations. Record, Attachment 22. The Commission received 15 responses. Record, Attachments 23(a)-(o). The Commission also received testimony from Common Cause, the Center for Responsive Politics, and the Republican National Committee. Record, Attachments 24(b), (c), (f), and 25.

On April 17, 1986, the Commission acted on plaintiffs' Petition, denying it as to each of 7 proposed revisions, and failing, by a 3-3 vote, to act as to an 8th proposed revision. In the Commission's Notice of Disposition, published in the Federal Register, it stated that:

Common Cause has not presented evidence of instances in which "soft money" has been used to influence federal elections sufficient to justify the stringent rules proposed in its petition. Most of the examples it cites to support its allegations consist of anecdotal and boastful comments of party committee officials and campaign staff that have been quoted in the press. These statements do not constitute concrete evidence demonstrating that the Commission's regulations have been abused so that funds purportedly raised for use in nonfederal elections have in fact been transferred to the state and local level with the intent that they be used to influence federal elections.

Record, Attachment 30. It is this agency action which plaintiffs challenge in the present action.

II. Standard of Review

This action is governed by the Administrative Procedure Act ("APA"), 5 U.S.C. § 706, which provides that agency action that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" must be set aside by the reviewing court. The United States Court of Appeals for the District of Columbia Circuit has recently held that

Review under the "arbitrary and capricious" tag line, however, encompasses a range of levels of deference to the agency, and Heckler v. Chaney 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) surely reinforces our frequent statements that an agency's refusal to institute rulemaking proceedings is at the high end of the range.

American Horse Protection Assoc., Inc. v. Lyng, 812 F.2d 1, 4-5 (D.C.Cir.1987) (citations omitted).

However, even where the court is required to defer to an agency, it must nevertheless take a close look at the agency's action, as well as the agency's articulated rationale. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824, 28 L.Ed.2d 136 (1971). If, in making its decision, the agency considers factors that are statutorily irrelevant, see, e.g., Farmworker Justice Fund v. Brock, 811 F.2d 613 (D.C.Cir.1987) (holding that "Federalism" principles are irrelevant to Secretary of Labor's decision not to issue standards under the Occupational Safety and Health Act), the court need not defer to the agency's decision. Similarly, where the issue before the court is the correct construction of a statute, the United States Supreme Court has held that "the judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent." Chevron USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843 n. 9, 104 S.Ct. 2778, 2782 n. 9, 81 L.Ed.2d 694, cited in INS v. Cardoza-Fonseca, 480 U.S. 421, 107 S.Ct. 1207, 1221, 94 L.Ed.2d 434 (1987). Thus, in determining whether agency action is "otherwise not in accordance with law" under the APA, even under the high standard of deference applicable to denials of rulemaking, the court must measure the agency's construction of its statute against the overall purposes of the statute and the intent of Congress.

With these principles in mind, the court can now consider the motions for summary judgment.

III. Plaintiff's Motion for Summary Judgment

In its motion for summary judgment, plaintiff Common Cause sets forth two theories under which it urges the court to set aside the Commission's actions. First, Common Cause contends that, as a matter of statutory construction, the FEC's interpretations of portions of the FECA pertaining to the "soft money" issue are contrary to law and must therefore be set aside. Second, Common Cause contends that, given the material before the Commission in the form of comments and testimony, the denial of plaintiffs' rulemaking petition based on a supposed insufficiency of supporting evidence constituted arbitrary and capricious agency action that must also be set aside by the court on review.

A. Statutory Construction:

With respect to statutory construction, Common Cause focusses on two aspects of the FEC's decision and argues that they are inconsistent with the Commission's enabling statute. First, Common Cause argues that the FECA's ban on the use of contributions from certain sources in federal elections is absolute, and that any use of nonfederal funds in connection with federal elections is a violation of the FECA — regardless of intent. Plaintiffs' Memorandum in Support of Motion for Summary Judgment at 20-29. Common Cause argues that the FEC improperly considered intent as a factor in its determination that non-federal funds have not "been transferred to the state and local level with the intent that they be used to influence federal elections." Notice of Disposition, Record, Attachment 30 (emphasis added). Common Cause suggests that the FEC has overlooked violations simply because there was no evidence of intent to influence federal elections, a statutorily irrelevant consideration.

Common Cause is correct in its interpretation of the FECA as an absolute ban on the use of certain funds in connection with federal elections. Common Cause errs, however, in reading so much into the FEC's use of the word `intent' in its Notice of Disposition. The Commission's brief statement cannot fairly be read as making intent a critical or even relevant factor in the denial of rulemaking now at issue. Instead, the Commission's Notice of Disposition states clearly that "Common Cause has not presented evidence of instances in which `soft money' has been used to influence elections sufficient to justify the stringent rules proposed in its petition." Record, Attachment 30. The Commission determined not that there was an inadequate showing of intent to influence federal elections, but, more basically, that there was inadequate evidence of any use of "soft money" in the ways plaintiffs alleged in their Petition. Indeed, the Commission's word choice closely parallels Common Cause's language in its definition of "soft money," see supra at 1, and should not be given any greater significance than that.

Thus, plai...