Ted Cruz for Senate v. Fed. Election Comm'n

• Decision Date: 30 March 2020
• Docket Number: Case No. 19-cv-908 (NJR, APM, TJK)
• Citation: 451 F.Supp.3d 92
• Parties: TED CRUZ FOR SENATE, et al., Plaintiffs, v. FEDERAL ELECTION COMMISSION, et al., Defendants.
• Court: U.S. District Court — District of Columbia

451 F.Supp.3d 92

TED CRUZ FOR SENATE, et al., Plaintiffs,

v.FEDERAL ELECTION COMMISSION, et al., Defendants.

Case No. 19-cv-908 (NJR, APM, TJK)

United States District Court, District of Columbia.

Signed March 30, 2020

John D. Ohlendorf, Jose Joel Alicea, Charles Justin Cooper, Cooper & Kirk, PLLC, Washington, DC, for Plaintiffs.

Seth E. Nesin, Tanya D. Senanayake, Harry Jacobs Summers, Kevin Deeley, Federal Election Commission, Kevin P. Hancock, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER

Neomi Rao, United States Circuit Court Judge, Amit P. Mehta, Timothy J. Kelly, United States District Court Judges

Before the court is Defendants' Consolidated Motion for Partial Remand and to Compel Discovery Responses. See ECF No. 42 (hereinafter Defs.' Mot.). In their Motion for Partial Remand, Defendants ask the three-judge court to decline to exercise supplemental jurisdiction over Plaintiffs' challenge to the Federal Election Commission's regulations and to remand those claims for consideration by a single judge. Defendants' Motion to Compel concerns documents and information responsive to certain requests for production and interrogatories, which Plaintiffs have withheld on relevance grounds and pursuant to a First Amendment privilege.

Having considered the parties' briefs and accompanying exhibits, and for the reasons set forth below, the court concludes first that Plaintiffs' challenges to the FEC's implementing regulations are within the scope of the three-judge court's discretionary supplemental jurisdiction, and that interests of efficiency militate against remanding these regulatory claims for consideration by a single judge. The court further concludes that the disputed discovery requests seek information that is relevant to Defendants' merits-based defenses. At the same time, because Plaintiffs assert that certain documents and information responsive to the disputed discovery requests are shielded by a First Amendment privilege, in camera review of any documents arguably subject to that First Amendment privilege is necessary before such documents may be produced to Defendants.

Accordingly, the court denies the Motion for Partial Remand and grants in part the Motion to Compel, subject to in camera review of any responsive documents as to which Plaintiffs assert a claim of First Amendment privilege.

I. Background

The court assumes familiarity with Judge Mehta's December 24, 2019, Memorandum Opinion and Order, which details the factual background of this case. Mem. Op. & Order, ECF No. 34 (Dec. 24, 2019). Briefly, Plaintiffs, Senator Rafael Edward Cruz ("Senator Cruz") and Ted Cruz for Senate ("Cruz Committee" or "Committee"), seek declaratory and injunctive relief invalidating and enjoining the enforcement of Section 304 of the Bipartisan Campaign Reform Act ("BCRA") and its implementing regulations, which place a $250,000 limit on the amount of post-election contributions that may be used to pay back a candidate's pre-election loans. See 52 U.S.C. § 30116(j) ; 11 C.F.R. § 116.11. Plaintiffs raise facial and as-applied constitutional challenges to both the statute and the regulations, alleging that the loan repayment limit contained therein infringes the First Amendment rights of Plaintiffs, other candidates, and potential post-election donors. In the alternative, Plaintiffs challenge the Commission's implementing regulations as arbitrary, capricious, and contrary to law.

At issue in this case are two campaign finance loans totaling $260,000 made by Senator Cruz to the Cruz Committee on the day before Election Day 2018. See Compl., ECF No. 1 (hereinafter Compl.), ¶ 28. Of the $260,000 lent to the Committee, $5,000 originated from Senator Cruz's personal bank accounts and $255,000 from a margin loan secured with Senator Cruz's personal assets. See id. Following election day, the Cruz Committee "used the funds it had on hand to pay vendors and meet other obligations instead of repaying [Senator Cruz's] loans." Id. ¶ 29. The Committee did not use any of the funds it had on hand to pay off Senator Cruz's loans during the 20-day period within which Section 304's implementing regulations allow a candidate to pay back loans using pre-election contributions. See 11 C.F.R. § 116.11(c)(1). This meant that after that period elapsed, the balance of those loans that exceeded BCRA's $250,000 statutory cap on post-election contributions—$10,000—converted into a campaign contribution. See id. ¶¶ 30–31; 11 C.F.R. § 116.11(c)(2).

Following the 20-day repayment period, the Cruz Committee repaid Senator Cruz the $250,000 statutory maximum using post-election contributions, but BCRA foreclosed it from paying back the $10,000 balance. Compl. ¶¶ 31–32. Plaintiffs allege that, "[a]bsent the restrictions of [BCRA] and the Commission's corresponding regulation[s]," they "would solicit debt-retirement funds from potential donors and would use post-election contributions to defray the remaining $10,000 loan balance." Id. ¶ 33.

In December 2019, Judge Mehta granted Plaintiffs' Application for a Three-Judge Court, and, in the same order, denied Defendants' Motion to Dismiss for Lack of Subject-Matter Jurisdiction. See Mem. Op. & Order, ECF No. 34. Defendants now move the three-judge court to remand Plaintiffs' challenges to the implementing regulations to a single judge, and to order Plaintiffs to respond to certain discovery requests to which Plaintiffs have objected on relevance and First Amendment privilege grounds.

II. Motion for Partial Remand

In their Motion for Partial Remand, Defendants urge the three-judge court to decline to exercise supplemental jurisdiction over Plaintiffs' challenges to the regulations implementing Section 304 of BCRA, and instead remand those claims to a single district judge. Defendants raised a similar argument in their Motion to Dismiss for Lack of Subject-Matter Jurisdiction, which Judge Mehta rejected. In his Memorandum Opinion and Order, Judge Mehta held that three-judge courts convened under BCRA have authority to exercise supplemental jurisdiction over ancillary claims "[i]f appropriate," but determined that the question of whether to do so here was "better left for the three-judge panel to resolve in the discretionary exercise of its supplemental jurisdiction." Mem. Op. & Order, ECF No. 34, at 17, 21. We resolve that question now and conclude that supplemental jurisdiction over Plaintiffs' regulatory claims is appropriate in this case.

At the outset, we must address whether this panel has authority to exercise supplemental jurisdiction over Plaintiffs' regulatory claims, which are ancillary to the constitutional claim under BCRA that provides the basis for the three-judge court's jurisdiction. Judge Mehta previously considered this question and determined that three-judge courts do have the power to consider regulatory claims of the type Plaintiffs assert here. See Mem. Op. & Order, ECF No. 34, at 17–21. We agree with Judge Mehta's analysis. Indeed, another three-judge district court recently confirmed this conclusion, observing that "[t]he Supreme Court has made clear that a properly convened three-judge district court has some ability to exercise a brand of supplemental jurisdiction over claims beyond those that form the core of its statutory jurisdictional grant." Castañon v. United States , No. 18-cv-2545, 444 F.Supp.3d 118, 128 (D.D.C. Mar. 12, 2020) (Wilkins, J.); see also Zemel v. Rusk , 381 U.S. 1, 5–6, 85 S.Ct. 1271, 14 L.Ed.2d 179 (1965) ; Allee v. Medrano , 416 U.S. 802, 812, 94 S.Ct. 2191, 40 L.Ed.2d 566 (1974). Moreover, we agree with Judge Mehta that the Supreme Court's decision in McConnell v. FEC , 540 U.S. 93, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003), does not compel a different result. See Mem. Op. & Order, ECF No. 34, at 18–19. Rather than reexamine this threshold question in detail, we direct the parties to Judge Mehta's opinion.

Because supplemental jurisdiction is permitted but not required, we next consider whether to exercise discretionary supplemental jurisdiction over Plaintiffs' regulatory claims. In cases involving claims subject to review by a three-judge court, supplemental jurisdiction has generally been found to be proper where the ancillary claims "[bear] an intimate relation to those that impelled the formation of a three-judge district court in the first instance." Castañon, 444 F.Supp.3d at 128 (collecting cases). In other words, the propriety of supplemental jurisdiction in three-judge district court cases turns on many of the same considerations that are present in every case involving a question of pendent jurisdiction: Whether the core and ancillary claims are "so related ... that they form part of the same case or controversy." Adams v. Clinton , 40 F. Supp. 2d 1, 4–5 (D.D.C. 1999) (" Adams I ") (quoting 28 U.S.C. § 1367 ); see also Green v. Connally , 330 F. Supp. 1150, 1170 (D.D.C. 1971) (three-judge court) ("The test is that the two claims ‘must derive from a common nucleus of operative fact,’ and if ‘a plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the [three-judge] issues, there is power in [the three-judge] court[ ] to hear the whole.’ ") (quoting United Mine Workers v. Gibbs , 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) ), aff'd sub nom. Coit v. Green , 404 U.S. 997, 92 S.Ct. 564, 30 L.Ed.2d 550 (1971).

That is precisely the case here. Plaintiffs' core constitutional challenge to the statute and its implementing regulations is identical: Both the statute and the regulations are alleged to impose the same unconstitutional burden on the rights of Plaintiffs, other candidates, and potential post-election donors to engage in protected First Amendment activity. For that reason, as Plaintiffs point out, the regulatory claims will not "predominate" over the statutory challenge. See 28 U.S.C. § 1367(c)(2). Rather, Plaintiff...