Wertheimer v. Fed. Election Comm'n

• Decision Date: 26 October 2001
• Docket Number: No. 00-5371,00-5371
• Parties: (D.C. Cir. 2001) Fred Wertheimer, et al., Appellants v. Federal Election Commission, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1070

268 F.3d 1070 (D.C. Cir. 2001)

Fred Wertheimer, et al., Appellants v. Federal Election Commission, Appellee

No. 00-5371

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 14, 2001

Decided October 26, 2001

Appeal from the United States District Court for the District of Columbia (00cv02203)

Paul A. Engelmayer argued the cause for appellants. With him on the briefs were Roger M. Witten, Daniel H. Squire, and Joshua D. Weinberg.

Richard B. Bader, Associate General Counsel, Federal Election Commission, argued the cause for appellee. With him on the brief was Vivien Clair, Attorney. Lawrence M. Noble, General Counsel, entered an appearance.

Before: Garland, Circuit Judge; Silberman and Williams,^* Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge Silberman.

Opinion concurring in the judgment filed by Circuit Judge Garland.

Silberman, Senior Circuit Judge:

Fred Wertheimer, Scott Harshbarger, and Archibald Cox appeal from the district court's dismissal of their suit for lack of subject matter jurisdiction. They sued under section 9011(b) of the Presidential Election Campaign Fund Act ¹ seeking construction of the terms "contribution" and "expenditure" within the meaning of that Act. We affirm on grounds that appellants lack standing.

I.

Fred Wertheimer is the current president of Democracy 21 and a former president of Common Cause, two organizations whose purpose is the modification of campaign financing. Scott Harshbarger is the current president of Common Cause. Archibald Cox is chairman emeritus of Common Cause. They voted in the 1996 presidential election and, at the time this suit was filed, intended to vote in the 2000 presidential election. Their allegations are that, notwithstanding the Fund Act's prohibition on presidential candidates accepting contributions from private sources, during the 1996 and 2000 presidential campaigns the two major political parties were funding campaign advertisements furthering the election of their respective presidential nominees in close coordination with those candidates. Essentially their suit seeks a declaration that expenditures by political parties that further the election of their respective presidential candidates, and that are coordinated with those presidential candidates, constitute contributions to and expenditures by such presidential candidates within the meaning of the Fund Act, and as a corollary, major party candidates who have chosen public funds may not coordinate with their respective political parties on party expenditures that further that candidate's election.

In order to understand appellants' claim--and their alleged standing--one has to carefully consider the interrelationship between the Fund Act and the Federal Election Campaign Act of 1971, as amended (FECA).² The Fund Act also passed in 1971 established a voluntary program of public financing of the general election campaigns of eligible major and minor party nominees for the office of President of the United States.³ It established the Presidential Election Campaign Fund, the size of which is determined by a tax checkoff option through which each individual taxpayer may designate on his federal income tax return that three dollars be transferred to the Fund. Appellants allege that at least one of them designated on his federal income tax return that three dollars be transferred to the Fund. To receive a specified amount of public funding for use in their general election campaigns, participating major party presidential nominees must be certified as eligible by the Federal Election Commission (FEC) and must agree not to accept private campaign contributions for the general election campaign, except to the extent that the Fund is insufficient to provide the statutorily specified amount to each candidate. Such a candidate must also agree not to incur "qualified campaign expenses" in excess of his public entitlement. These expenses include those incurred by the candidate of a political party for the office of President to further his election and those by his authorized committee to further his election. An expense shall be considered as incurred by a candidate if it is incurred by an authorized person. Participating candidates must also agree that they and their authorized committees will submit their campaign accounts for a post-election Commission audit of qualified campaign expenses and pay any amounts required to be repaid pursuant to statute. The Act does not, however, require candidates to publicly disclose their campaign finances.

We are authorized to review Commission action under the Fund Act. It also authorizes individuals eligible to vote for President to institute "such actions, including actions for declaratory judgment or injunctive relief, as may be appropriate to implement or contrue [sic] any provision of this chapter." (Emphasis added). A three-judge panel hears lawsuits brought under section 9011(b), with direct appeal to the Supreme Court. But an individual district court judge may consider threshold jurisdictional challenges prior to convening a three-judge panel. See Gonzalez v. Automatic Emp. Credit Union, 419 U.S. 90 (1974); Ruess v. Balles, 584 F.2d 461, 464 n.8 (D.C. Cir.), cert. denied, 439 U.S. 997 (1978).

Publicly and privately financed candidates for federal office are also subject to FECA, which imposes limits upon the amounts that individuals, corporations, political committees, and political parties can contribute to a candidate for federal political office. It limits the amount these individuals or entities can spend in coordination with a candidate, treating these expenditures as "contributions to" a candidate for purposes of FECA. The Commission refers to these expenditures as "coordinated expenditures" or "441a expenditures." See 2 U.S.C. § 441a(a)(7)(B)(i); § 441a(d)(2); Colorado Republican Campaign Comm. v. FEC, 518 U.S. 604 (1996). "Contributions" and "expenditures" are defined as covering only those contributions and expenditures that are made "for the purpose of influencing any election for Federal office." 2 U.S.C. § 431(8)(A)(i), (9)(A)(i). As of May 2001, for entities other than candidates, authorized committees, and political party committees, any "expenditure for general public political communication that includes a clearly identified candidate and is coordinated with that candidate, an opposing candidate or a party committee supporting or opposing that candidate is both an expenditure under 11 C.F.R. 100.8(a) and an in-kind contribution under 11 C.F.R. 100.7(a)(1)(iii)." 11 C.F.R. 100.23 (2001). Prior to promulgating this broader definition, the Commission deadlocked 3-3 on whether to pursue its counsel's finding that the 1996 Clinton campaign made illegal coordinated expenditures and accepted illegal contributions from the Democratic National Committee (DNC). The Commission has six voting members, no more than three of whom may be affiliated with the same political party, and any formal agency action requires the affirmative vote of four members. The Commissioners disagreed over whether the political party's expenditures were, in fact, "coordinated expenditures," which seems to have been the impetus for this lawsuit. On the heels of the Supreme Court's decision in FEC v. Colorado Republican Campaign Committee, 121 S. Ct. 2351 (2001), the Commission is engaged in rulemaking to extend this May 2001 regulation of coordinated expenditures to political parties.

All federal candidates and political committees must file periodic reports with the Commission detailing all their receipts as well as their contributions, expenditures, and other disbursements. Section 434(b)(2) requires that these reports disclose contributions from political party committees and, for an authorized committee of a candidate for the office of President, certain federal funds. The Commission's implementing regulations require national political party committees to report for public disclosure their "soft money" disbursements and donations received. FECA further requires political parties to report "the total amount of all disbursements" and to delineate 441a coordinated expenditures. A candidate is not, however, required to report as contributions coordinated expenditures by his political party.

The Commission has exclusive jurisdiction with respect to the civil enforcement of FECA. However, a private party may file a sworn administrative complaint alleging violations with the Commission. After investigation, the Commission determines whether there is "probable cause to believe" that a violation has occurred. If the Commission dismisses an administrative complaint, petitioners may seek review of the Commission's determination in the United States District Court for the District of Columbia. Democracy 21 and Common Cause have filed an administrative complaint with the Commission making essentially the same allegations of illegal coordination, contributions, and expenditures as appellants make in this suit.

In this case, appellants alleged that the Commission's failure, as yet, to implement and construe the Act to identify coordinated expenditures by the major political parties to further the election of their publicly financed nominees as impermissible "contributions" and "expenditures" injured them in three distinct ways. First, the FEC's failure deprived them of required information about the source and amount of candidates' financing. Second, the FEC's failure prevented them from determining whether publicly financed candidates were abiding by the law in forgoing private contributions and in refusing to make expenditures in excess of the public grant. Third, the FEC's inaction interfered with their right to direct that their $3 income tax return checkoff be used in a lawful fashion.

The district court dismissed appellants' suit prior to convening a three-judge panel. It held that appella...