National Rifle Ass'n of America v. Federal Election Com'n

• Decision Date: 05 August 1988
• Docket Number: No. 87-5373,87-5373
• Citation: 854 F.2d 1330
• Parties: NATIONAL RIFLE ASSOCIATION OF AMERICA, Appellant, v. FEDERAL ELECTION COMMISSION.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1330

854 F.2d 1330

272 U.S.App.D.C. 121

NATIONAL RIFLE ASSOCIATION OF AMERICA, Appellant, v. FEDERAL ELECTION COMMISSION.

No. 87-5373.

United States Court of Appeals District of Columbia Circuit.

Argued May 13, 1988.

Decided Aug. 5, 1988.

Appeal from the United States District Court for the District of Columbia (Civil Action No. 86-02285).

Richard E. Gardiner, with whom A. Thomas Carroccio, Washington, D.C., was on the brief, for appellant.

Jacqueline Jones-Smith, Atty., Federal Election Com'n, with whom Lawrence M. Noble, Gen. Counsel and Richard B. Bader, Associate Gen. Counsel, Federal Election Com'n, Washington, D.C., were on the brief, for appellee.

Before STARR, BUCKLEY and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge STARR.

STARR, Circuit Judge:

This appeal involves a lawsuit filed under the Federal Election Campaign Act, 2 U.S.C. Secs. 431-455 (1982). The action arises out of protracted warfare before the Federal Election Commission pitting the National Rifle Association (NRA) against an organization whose animating purposes are decidedly unfriendly to those championed by the NRA. Specifically, the NRA challenges the District Court's order dismissing its action seeking review of a Federal Election Commission decision concerning the third (and last) in a series of administrative complaints filed by the NRA against Handgun Control, Inc. (HCI) and the latter's separate political fund, Handgun Control Political Action Committee (HCI-PAC). The District Court found that the NRA's third administrative complaint was "substantially similar" to its second administrative complaint; since the NRA had indisputably failed to seek judicial review of the FEC's dismissal of the second complaint within the sixty day period allowed by the pertinent statutory provision, id. Sec. 437g(a)(8)(B), the court concluded that the NRA's federal court action was time-barred.

On appeal, the NRA advances three contentions: first, that its second and third administrative complaints were not substantially similar; second, that regardless of the two complaints' similarity, the FEC addressed the merits of the third complaint, thereby reopening the issues and rendering a decision subject to judicial review; and third, that the FEC erred in deeming HCI to be a membership organization within the meaning of 2 U.S.C. Sec. 441b(b)(4)(C) and hence not in violation of the Act. ¹

For the reasons that follow, we conclude that the two administrative complaints were indeed substantially similar but that the FEC addressed the merits of the third complaint, thereby potentially subjecting those issues to judicial review. We further conclude, however, that the NRA's failure to raise the reopening argument in the District Court precludes it from advancing the argument here. We therefore affirm the District Court's judgment dismissing the action.

I

This case stems from three administrative complaints filed by the NRA against HCI ² between 1983 and 1985. NRA's first complaint, filed in December 1983, alleged that HCI had violated the Act's solicitation restrictions. Letter from Janet Scherer, NRA Assistant General Counsel, to Charles Steele, FEC General Counsel (Dec. 1, 1983), Joint Appendix (J.A.) at 32. Specifically, the NRA alleged that HCI had solicited contributions in violation of 2 U.S.C. Sec. 441b(b)(4)(A)(i). ³ HCI responded that the individuals from whom it had solicited funds were "members" who could legally be solicited pursuant to section 441b(b)(4)(C). ⁴ The NRA countered that HCI was not a "membership organization" as construed by the Supreme Court in Federal Election Commission v. National Right to Work Committee, 459 U.S. 197, 103 S.Ct. 552, 74 L.Ed.2d 364 (1982).

In March 1984, the Commission brushed aside HCI's arguments and found reason to believe that it had indeed violated section 441b(b)(4)(A). In the Matter of Handgun Control, Inc. MUR 1604 (Mar. 21, 1984), J.A. at 50. The Commission subsequently approved a negotiated conciliation agreement with HCI resolving the matter. In the Matter of Handgun Control, Inc. MUR 1604 (July 6, 1984), J.A. at 51. The conciliation agreement required HCI to pay a $15,000 civil penalty and to amend the group's bylaws so as to qualify HCI as a membership organization prior to its soliciting additional funds. In the Matter of Handgun Control, Inc. MUR 1604 (July 10, 1984), J.A. at 55-56. The agreement required the amended bylaws to establish (1) a predetermined minimum amount of periodic dues or contributions; (2) the right of members to participate in annual meetings; and (3) the right "to elect a Director to the Governing Board of HCI." Id.

The NRA filed its second administrative complaint in February 1985, alleging that HCI had "solicited contributions in violation of 2 U.S.C. Sec. 441b(b)(4) and in knowing violation of the conciliation agreement." Letter from Janet Scherer to Charles Steele (Jan. 28, 1985), J.A. at 58. ⁵ The NRA charged, first, that HCI had improperly solicited individuals who had not made contributions to it after HCI amended its bylaws, pursuant to the conciliation agreement, to become a membership organization. Id. at 59. ⁶ Second, the NRA contended that HCI's amended bylaws were still inadequate for the entity to pass muster as a membership organization. According to the NRA, the amended bylaws were deficient in two respects: (1) they failed to establish the right of HCI's contributors to participate in the annual membership meeting because "there [was] no requirement that any business of any sort be conducted at the annual meeting"; id. at 60; (2) members did not have the right to elect a director to the Governing Board because they could only vote for "someone who [had] been preselected by the Board," and HCI's Governing Board retained the "power to remove any director without cause," including the "preselected candidate chosen by the 'membership.' " Id. at 60-61.

In May 1985, the Commission's General Counsel submitted his report on the merits of NRA's second administrative complaint to the Commission. ⁷ The General Counsel concluded that HCI's amended bylaws had "satisfactorily established rights of participation in the organization's affairs for those deemed members of the corporation." Gen.Couns.Report MUR 1891 (May 1, 1985), J.A. at 76. With respect to the allegedly unlawful solicitation, however, the General Counsel recommended that the Commission find reason to believe that HCI had violated section 441b(b)(4) by soliciting, as members, individuals who had not contributed to HCI after it amended its bylaws. Id. at 76-77. Having found reason to believe a violation existed, the General Counsel nonetheless recommended that, by virtue of certain mitigating factors which need not be rehearsed here, the Commission should take no further action. Id. at 77.

The FEC adopted the General Counsel's recommendations and dismissed the complaint. In the Matter of Handgun Control, Inc. MUR 1891 (May 8, 1985), J.A. at 79. In its notice to the NRA, the Commission stated that "[t]he Federal Election Campaign Act allows a complainant to seek judicial review of the Commission's dismissal of this action. See 2 U.S.C. Sec. 437g(a)(8)." Letter from Charles Steele to Janet Scherer (May 15, 1985), J.A. at 80. ⁸ Critically for our purposes, the NRA elected not to seek review of that dismissal.

Finally, the NRA filed its third administrative complaint in December 1985. In this complaint, the NRA once again alleged that HCI had "solicited contributions in violation of 2 U.S.C. Sec. 441b(4) [sic ]" ⁹ inasmuch as HCI's amended bylaws still failed to qualify it as a membership organization. ¹⁰ Letter from Janet Scherer to Charles Steele (Dec. 17, 1985), J.A. at 81. Specifically, the NRA alleged that "the By-laws of HCI do not establish any right to participate in [the annual meeting] ... in that there is no requirement that any business of any sort be conducted at the annual meeting." Id. at 82. Such a right should exist, the NRA argued, since "shareholders of business corporations--to which the Supreme Court analogized members of non-profit corporations--have the right to conduct the business of the corporation by participating in an annual meeting of shareholders." Id. at 82-83. The NRA sought to bolster its allegation by charging that HCI's annual meeting, dubbed by HCI as "The Handgun Control Conference," did not comport with the requirements for an annual meeting under the D.C. Code. Id. at 83. The NRA also alleged, once again, that "HCI's By-Laws [did] not establish a procedure for its 'members' to control the organization by electing directors" because they could only vote for "someone who [had] been pre-selected by the Board" and HCI's Governing Board could remove any director, including the "one 'elected' Board member." Id. at 83-84.

In his report to the Commission, the General Counsel found that the two asserted grounds for NRA's charge (that HCI failed to qualify as a membership organization) were "virtually identical to those raised in [the second complaint]." Gen.Couns.Report MUR 2115 (Feb. 18, 1986), J.A. at 120. The General Counsel explained:

Although the complainant now raises the novel arguments that HCI's annual membership meeting was not an 'annual meeting' as contemplated by [the] D.C. Code, and that because of the Supreme Court's analogy to stockholders[,] members should have the right to participate in annual meetings by conducting business, it is this office's view that such arguments are without merit.

Id. Once again, the Commission adopted the General Counsel's recommendation and found no reason to believe that HCI had violated section 441b(b)(4)(A)(i). In the Matter of Handgun Control, Inc. MUR 2115 (Feb. 21, 1986), J.A. at 125.

In August 1986, the NRA filed an action in federal district court seeking review of the Commission's dismissal of the section 441b(b)(4) allegation in the third administrative complaint. The...