McCutcheon v. Fed. Election Comm'n

Citation496 F.Supp.3d 318
Decision Date19 October 2020
Docket NumberCivil Action No. 20-2485 (JDB)
Parties Shaun MCCUTCHEON and McCutcheon For Freedom, Plaintiffs, v. FEDERAL ELECTION COMMISSION, Defendant.
CourtUnited States District Courts. United States District Court (Columbia)

Dan Backer, Political.Law PLLC, Alexandria, VA, for Plaintiffs.

Haven G. Ward, Harry Jacobs Summers, Kevin Deeley, Seth E. Nesin, Federal Election Commission, Washington, DC, for Defendant.

MEMORANDUM OPINION

JOHN D. BATES, United States District Judge

This case raises overlapping questions of administrative and campaign finance law on the eve of the 2020 elections, projected to be the costliest—by far—in the nation's history. See Ctr. For Responsive Politics, 2020 Election to Near $11 Billion in Total Spending, Smashing Records, OpenSecrets.org (Oct. 1, 2020), https://www.opensecrets.org/news/2020/10/2020-election-to-near-11-billion-in-total-spending-smashing-records/. Plaintiff Shaun McCutcheon launched a primary campaign for the Libertarian Party's nomination for president on May 1, 2020, suspending it less than a month later after the party convention. During the pendency of his campaign, McCutcheon transferred $65,000 of his own money into his campaign committee, McCutcheon For Freedom ("MFF," together with McCutcheon, "plaintiffs"). The campaign incurred net expenditures of $10,793.08, leaving it with approximately $54,206.92 in leftover funds.

The day after McCutcheon suspended his campaign, he sought an advisory opinion from the Federal Election Commission ("FEC") that would authorize MFF to transfer that remainder, as well as unlimited additional personal funds McCutcheon may "contribute" to his now-suspended campaign committee, to the national committees of the Libertarian and Republican parties, notwithstanding statutory limits on the amount an individual may contribute to a national party committee. Rather than issue the requested advisory opinion within the statutory sixty-day period, though, the FEC ultimately sent plaintiffs a letter on August 10, 2020, stating that the Commission was unable to render an advisory opinion for want of the four-member quorum required by statute to take action on advisory opinion requests.

In response, plaintiffs filed a complaint in this Court accompanied by a motion for a preliminary injunction. In their motion, plaintiffs seek to bar the FEC from taking any action against them to enforce relevant campaign finance laws limiting contributions to political parties, as McCutcheon proposes to transfer unlimited amounts of his personal funds through his campaign committee, MFF, to the national committees of the Libertarian and Republican Parties. In order to obtain a preliminary injunction, plaintiffs must demonstrate, among other things, that they are likely to succeed on the merits of their substantive claims. Because they have not done so, the Court will deny plaintiffs’ motion.

BACKGROUND
I. Legal Background
A. Campaign Finance Law

The Federal Election Campaign Act of 1971 ("FECA") regulates, in relevant part, the amount of money a person may contribute to candidates for federal office, federal political campaign committees, and national political party committees for the purpose of influencing a federal election. See 52 U.S.C. §§ 30101 – 30146. Contribution limits have withstood scrutiny under the First Amendment since the Supreme Court's seminal campaign finance decision, Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976). In Buckley, the Court rejected a First Amendment challenge to caps on contributions to individual candidates, finding that "the Act's primary purpose to limit the actuality and appearance of corruption resulting from large individual financial contributions ... [provides] a constitutionally sufficient justification" for capping individual contributions at a set dollar amount per candidate. Id. at 26, 96 S.Ct. 612.

The same principle animates limits on contributions to political party committees, which were first enacted in Buckley’s wake. See FECA Amendments of 1976, Pub. L. No. 94-283, § 112(2), 90 Stat. 475, 487 (1976) (codified as amended at 52 U.S.C. § 30116(a)(1)(B) ). Today, under FECA, a person may not contribute more than $35,500 to a national party committee. FEC, Contribution Limits, https://www.fec.gov/help-candidates-and-committees/candidate-taking-receipts/contribution-limits/ (last visited Oct. 19, 2020); see 52 U.S.C. § 30116(a)(1)(B) & (c). A national party committee, in turn, may not "receive ... a contribution, donation, or transfer of funds or any other thing of value, or spend any funds, that are not subject to the limitations, prohibitions, and reporting requirements of this Act." id. § 30125(a)(1). In upholding the latter provision from a First Amendment challenge in McConnell v. FEC, the Supreme Court explained that "[t]he premise behind these restrictions [on contributions to political party committees] has been, and continues to be, that contributions to a federal candidate's party in aid of that candidate's campaign threaten to create—no less than would a direct contribution to the candidate—a sense of obligation." 540 U.S. 93, 144, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003). Even as Supreme Court decisions in the intervening decades have struck down other restrictions on campaign spending, the basic principle behind contribution limits—whether to individual candidates, their campaign committees, or national party committees—has survived. See, e.g., McCutcheon v. FEC, 572 U.S. 185, 209, 227, 134 S.Ct. 1434, 188 L.Ed.2d 468 (2014) (rejecting limits on aggregate spending by an individual across multiple campaigns but "leav[ing] the base [contribution limits upheld in Buckley ] undisturbed"); Citizens United v. FEC, 558 U.S. 310, 359, 365, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010) (striking down limits on independent corporate expenditures but recognizing that "contribution limits ... have been an accepted means to prevent quid pro quo corruption"); accord Rufer v. FEC, 64 F. Supp. 3d 195, 203 (D.D.C. 2014) ("FECA's base contribution limits ... remain intact after McCutcheon.").

Beyond merely imposing numerical caps on contributions, FECA safeguards against circumvention of its anti-corruption objectives. Cf. McCutcheon, 572 U.S. at 200, 134 S.Ct. 1434 ("[S]tatutory safeguards against circumvention have been considerably strengthened since Buckley was decided, through both statutory additions and the introduction of a comprehensive regulatory scheme."). For starters, FECA prevents donors from using means other than cash to influence candidates by broadly defining "contribution" to include "any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office." 52 U.S.C. § 30101(8)(A)(i). The Act also includes measures that prohibit donors from using intermediaries to funnel contributions to the desired recipient while formalistically complying with contribution limits. For example, the Act clarifies that, for the purpose of calculating contribution limits, "all contributions made by a person, either directly or indirectly, on behalf of a particular candidate, including contributions which are in any way earmarked or otherwise directed through an intermediary or conduit to such candidate, shall be treated as contributions from such person to such candidate." Id. § 30116(a)(8). Similarly, FECA requires 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." Id. § 30122.

Notwithstanding FECA's limits on contributions by persons, "[a] contribution accepted by a candidate ... may be used by the candidate ... for transfers, without limitation, to a national, State, or local committee of a political party." Id. § 30114(a)(4). This statutory provision does not apply to all funds in a campaign account, but only to "contribution[s] accepted by a candidate."1 See id. The Act does not define what it means for a candidate to "accept" a contribution, but it does bar candidates and political committees from "knowingly accept[ing] any contribution ... in violation of" FECA's contribution limits. See id. § 30116(f). The Court is not aware of, nor have the parties identified, any judicial precedent or FEC advisory opinions interpreting the precise contours of when a contribution is deemed "accepted by a candidate" so as to be eligible for unlimited transfer to a party committee under § 30114(a)(4).

Contrary to constitutionally permissible limits on contributions, restrictions on campaign expenditures—whether of funds drawn from a candidate's own personal funds or raised by their campaign committees—were blocked at the gate in Buckley. Unlike the Act's contribution limits, the Supreme Court reasoned, "[t]he Act's expenditure ceilings impose direct and substantial restraints on the quantity of political speech, ... [and] limit political expression ‘at the core of our electoral process and of the First Amendment freedoms.’ " Buckley, 424 U.S. at 39, 96 S.Ct. 612 (quoting Williams v. Rhodes, 393 U.S. 23, 32, 89 S.Ct. 5, 21 L.Ed.2d 24 (1968) ). Accordingly, it held that "the First Amendment requires the invalidation of [FECA's] ... ceilings on overall campaign expenditures." Id. at 58, 96 S.Ct. 612.

Because "a candidate's expenditure of his personal funds directly facilitates his own political speech," Buckley further established that Congress cannot limit how much of a candidate's own funds can be spent on his or her campaign. Id. at 53 & n.58, 96 S.Ct. 612. The FEC enshrined this principle in 11 C.F.R. § 110.10, which provides that "candidates for Federal office may make unlimited expenditures from personal funds," and then clarified that this allows a candidate to make "unlimited contributions to his or her own campaign," FEC Advisory...

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