FEC v. NRSC, Civ. A. No. 93-1612.

• Decision Date: 24 February 1995
• Docket Number: Civ. A. No. 93-1612.
• Citation: 877 F. Supp. 15
• Parties: FEDERAL ELECTION COMMISSION, Plaintiff, v. NATIONAL REPUBLICAN SENATORIAL COMMITTEE, Defendant.
• Court: U.S. District Court — District of Columbia

877 F. Supp. 15

FEDERAL ELECTION COMMISSION, Plaintiff, v. NATIONAL REPUBLICAN SENATORIAL COMMITTEE, Defendant.

Civ. A. No. 93-1612.

United States District Court, District of Columbia.

February 24, 1995.

Lawrence Mark Noble, Richard Blair Bader, Kenneth E. Kellner, Stephen E. Hershkowitz, Federal Elec. Com'n, Washington, DC, for plaintiff.

Jan W. Baran, Thomas Wesley Kirby, Wiley, Rein & Fielding, Washington, DC, for defendant.

MEMORANDUM OPINION

JOHN H. PRATT, District Judge.

Before the Court is defendant's motion for summary judgment and dismissal on the grounds that this action is barred by the five year statute of limitations. For the reasons set forth in this opinion, defendant's motion for summary judgment is granted in part and denied in part.

I. Background

The activities at issue in this case date back to the 1985-1986 congressional campaign season. The Federal Election Commission (hereafter "FEC" or "Commission") alleges that defendant National Republican Senatorial Committee ("NRSC") violated the Federal Election Campaign Act ("FECA"), 2 U.S.C. § 431 et seq., by making unlawful excessive contributions of $183,563 to the "Jim Santini for Senate" political committee, and by failing to report such contributions to the FEC.¹ The NRSC allegedly made these contributions after it reached the contribution limits established by the FECA.

Although the events underlying this action occurred between November 1985 and November 1986, complaint ¶¶ 24, 28, this enforcement action was not filed until April 21, 1993. For purposes of the present motion, the Court must examine the period of time between defendant's conduct and the filing of this lawsuit. The FEC took no action until January 9, 1987, when Richard Segerblom filed a sworn, notarized administrative complaint with the Commission, pursuant to 2 U.S.C. § 437g(a)(1). On January 16, 1987, the FEC notified defendant that a complaint had been filed. On July 28, 1987, the FEC voted by an affirmative vote of at least four members, that there was reason to believe that NRSC had violated the contribution and reporting limitations. 2 U.S.C. §§ 441a(h) and 434(b); 11 C.F.R. §§ 110.6(d)(2) and 106.1.

Years passed with minimal action.² On January 24, 1989, the Commission voted yet again that there was reason to believe a violation had occurred.³ Also in 1989, the Commission issued the only subpoena in this case. Later the same year, the NRSC proposed conciliation which the FEC rejected in November 1990, after a seventeen month review. The Commission's general counsel notified defendant by letter dated March 25, 1991, that he was prepared to recommend that the FEC find probable cause to believe that the NRSC violated the FECA. Nearly a year later, on March 10, 1992, the Commission found such probable cause.⁴

The FEC filed this action on April 21, 1993; seven years after the events at issue and six years after Segerblom's complaint was filed. The Commission claims that it "seasonably" proceeded in this matter. Opposition, p. 10. In fact, three congressional and two presidential election seasons faded into memory while the FEC ruminated. The NRSC now moves to dismiss on the grounds that the applicable five year statute of limitations expired prior to the filing of this lawsuit.

II. Analysis

Fed.R.Civ.P. 56(c) permits a court to grant summary judgment where the evidence in the record indicates that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Id.

A. Applicability of 28 U.S.C. § 2462 to FECA.

Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued * * *

28 U.S.C. § 2462. Section 2462 provides a catch-all statute of limitations in situations where Congress did not specifically include a time limitation in the statute. Congress long ago recognized the need for a statute of repose because "after the passage of time evidence has been lost, memories have faded, and witnesses have disappeared." 3M Co. v. Browner, 17 F.3d 1453, 1457 (D.C.Cir.1994) (citing Order of R.R. Telegraphers v. Railway Express Agency, 321 U.S. 342, 349, 64 S.Ct. 582, 586, 88 L.Ed. 788 (1944)) (internal quotation marks omitted). Such a statute of repose applies with particular force to penalty actions. The equitable need to eliminate older penalty claims must be balanced against the general Supreme Court's competing requirement that statutes of limitations should be strictly construed in favor of the government. See e.g. Badaracco v. Commissioner, 464 U.S. 386, 391, 104 S.Ct. 756, 760-61, 78 L.Ed.2d 549 (1984). At issue is whether § 2462 applies to FECA.

The parties agree that FECA contains no statute of limitations, however, they disagree over whether the Court should apply § 2462. Plaintiff argues that the goals and strictures of FECA are incompatible with the five year time limit imposed by § 2462, and the FEC should be free indefinitely to penalize recalcitrant parties. We disagree. The fundamental premise underlying the 3M Co. decision is that it is inappropriate for a government regulator to wield the threat of an open-ended penalty. This is particularly true in cases where the ongoing threat of penalties may disrupt core First Amendment political activities.

1. Five-year limitations period is consistent with FECA.

In contrast to certain other agencies and regulatory regimes, the FEC is given no power to adjudicate liability or to impose civil penalties for violations of FECA. Instead, the FEC's role is to investigate, 2 U.S.C. §§ 437g(a)(4)(A); to conciliate, 2 U.S.C. § 437g(a)(4)(A); and to determine whether or not to bring a civil enforcement action, 2 U.S.C. § 437g(a)(6)(B). The FEC may not begin an enforcement investigation until after it finds reason to believe a violation has occurred. This finding may be based either on a citizen complaint or on information the FEC learns through its normal supervisory responsibilities. 2 U.S.C. § 437g(a)(2). If the FEC finds probable cause to believe that a violation of FECA has occurred, it must attempt to resolve the matter through informal methods before it can bring suit. Thus, enforcement suits are to be used only after the informal conciliation process fails.⁵ See e.g. In re Carter-Mondale Re-election Committee, Inc., 642 F.2d 538, 542-43 (D.C.Cir. 1980).

Next, the FEC argues that its organization and function is such that no time limit on its actions is appropriate.⁶ The FEC stresses three points in this regard. First, the FEC notes that it cannot begin an enforcement investigation until after a complaint is filed by someone or the FEC learns of the possible violation through its normal supervisory responsibilities. This difficulty is one faced by all administrative agencies, and one which was discounted by the D.C. Circuit. "Nothing in the language of § 2462 even arguably makes the running of the limitations period turn on the degree of difficulty an agency experiences in detecting violations."⁷ 3M Co., 17 F.3d at 1461 (applying this rule regardless of whether difficulties in detection are caused by an ill-designed or inefficient enforcement program or because the statute itself impedes detection).

The FEC contends that even after it is able to initiate an investigation, it must comply with all of the FECA's statutorily required procedures before it can proceed in court. This claim is disingenuous given the short time periods at issue and the statutory requirement that the FEC investigate complaints "expeditiously." 2 U.S.C. § 437d(a)(9); Citizens for Percy '84 v. FEC, 1984 WL 6601, *4 (D.D.C.1984) (five month delay in finding of "reason to believe" cannot be condoned if statute is to have meaning). For example, the FEC must provide a potential defendant with a brief by its general counsel, then allow 15 days for a response, then make a "probable cause to believe" finding and then engage in at least 30 days of informal conference, conciliation, and persuasion before seeking judicial relief. We can discern no reason why this process cannot easily be accomplished by the agency within the five year limitation in § 2462, even with discovery and subpoena enforcement delays of many months or even years.

2. Applicability of § 2462 to "dismissal cases".

Finally, the FEC argues that application of § 2462 would as a practical matter preclude enforcement of § 437g(a)(8) "dismissal cases". The FECA provides an unusual enforcement mechanism which permits unsuccessful complainants 60 days within which to appeal dismissal of their complaints to this Court. The FEC argues that as a practical matter, dismissal cases often take years to wind their way through the courts. If the outcome is favorable to complainant there is a possibility that the FEC will be prevented from enforcement because the time limitations of § 2462 will have expired. This is not, however, the situation that confronts the Court in this case. We need not decide at this time whether § 2462 applies to such situations, and if it does, whether the statute of limitations is tolled during the course of the case — the speed of which is at least partially beyond the control of the litigants.

In sum, we apply to the FEC in this case the same statute of limitations which applies "to the entire federal government in all civil penalty cases, unless Congress specifically provides otherwise." 3M Co., 17 F.3d at 1461. We believe this application fosters the goal, clearly expressed in the FECA, of facilitating rapid resolution of issues affecting the system by which our national leaders are elected.

B. Whether this action commenced "within five years from date when claim first accrued".

Having found that § 2462 applies to FECA, the focus of our next inquiry is whether the administrative process...