calling case number sixteen dash three three six zero tennessee republican party versus the f c c at all and case number sixteen dash three seven three two the georgia republican party versus the f c c or argument is fifteen minutes for petitioners fifteen minutes to be shared by respondents mr torch and ski for the petitioners approval exceeded the authority of the f c c in the m s r b to regulate campaign finance the court could find that the approval violated the first moment in total following the supreme court's recent precedents in the area the court could find that the approval order must be construed to be in a to federal campaign contributions or federal or the federal canada sees of state local officials because administrative agencies may not complex statutory scheme or the court could find that the approval violated the continuing resolution and must be overturned and i just want to update the court the writer that expired april twenty eighth was continued for a week last week and is contained again for another six months in the bill that passed the house of representatives overwhelmingly yesterday and is expected widely expected to pass the senate today and be signed by the president before midnight tomorrow why don't we talk about standing for i mean this seems frankly to be a closer run issue than are probably needed in this case i mean you're basing standing i guess on these three affidavits is that correct your are this the affidavits are in support of the stand but i think the standing of the political parties is is on a couple of different  read as an evidentiary matter the affidavits are where you have yes that is correct go ahead so there is direct harm to the political parties the m s r being the i c c don't dispute the fact that the goal of these rules and the effect of these is to reduce contributions to the political party i mean don't you have to sort of get on that it's commonsense of coal speculation or whatever you might want to call it and give us some evidence that satisfies lou hahn that these things in fact are going to well your honor i think if you look at what the u s supreme court did in taxation with representation with respect to the group saying that the tax status made the group fear that it was going to receive less contributions or the standing of the a c l u of new york in buckley viva layo where their standing was their fear of the loss of donations that was enough in those two cases for the supreme court to find those groups had standing and here the affidavit was enough in those cases the last the fear of loss of future contributions and here the affidavits from the executive directors of the state parties and the chairman from tennessee make clear that that's the case here in the words the parties fear  of this rule will reduce rule reduce the amount of future contributions received and that's been found to have enough to that's enough to give the parties direct standing never mind the association of standing where there is no doubt that there are state and local officials who are covered officials under these rules who receive less contributions as a result of this rule that self evident the rule is a political contribution ban or prohibition depending on whether or not you can vote of the candidate ok i'll look at those cases so i think standing is  fairly clear again either because of associational standing or because of the direct harm to the political parties so turning next to the authority of the f c c and the m s r be there's just nothing in the obviously would trump any other argument if the court accepts our constitutional argument because any other statutory argument would be sassoon in the constitutional arguments i think the constitutional argument is probably our strongest next is probably that the agency exceeded its authority under the exchange third is the agency is here using its essentially executive authority to try to trample on or or constrain what the supreme court or what the congress laid out in and set up the contribution levels for candidates for federal office and federal political contributions your brief focuses a lot on the fact that amendment to g thirty seven would have on candidates for federal office yes what about candidates who are just seeking to retain their safe local offices that have control over hiring these sorts of advisors why isn't the the rationale here fairly common sense of cole and also supported by some of the same bases that supported the original as it applied to dealers  i think there are a couple a couple of responses for that one in the in the history of everything that's happened since blunt and in the entire record there is absolutely nothing that the f c c or the m s r be brought forward where a municipal advisor has made an otherwise lawful political donation in the last twenty three years that has led to a pay to play scandal every single case that they have that they have cited to in their record and in their supplemental appendix that talks about where they allege that there are pay to play issues involving campaign contributions none of them have been in this sector second none of the ones that involve slowly campaign contributions have found to have been found to be a violation of the words that the cases that have led to cases that involve campaign contributions also involve other illegal payments gifts travel things like that that went well beyond campaign finance so i would say that what we have that's sort of similar here is this court's decision in the lavin case where the state of ohio tried to prohibit medicaid providers from making contributions to candidates for attorney general or that i mean that russ your i mean i'm understanding why you want to cite that case and i'm not saying it's irrelevant but for you dearie there was pretty silly compared to the theory that making a say twenty seven hundred dollar contribution to some local official about over and over again in our brief is the contribution limit to candidates for federal office somebody running for city council in a city that has a five hundred dollar contribution limit would not be subject to the federal twenty seven hundred dollar limit in their city council raise so there's there's two different sets of regulatory regimes in the campaign finance here you've got the federal levels suggesting otherwise right but but i guess what i'm saying is your honor this is the only set of regulations where an administrative agency in this case the couple of the financial regulatory agencies including the m s r be in this case have used administrative authority to cut back on or limit campaign contributions all of these other cases where there are either contractor bans or other contribution limits that have been challenged they've always been talks about how the courts the courts need to defer to legislative judgments there's no legislative judgment present here this is the judgment of bureaucrats who have never run for office deciding what appropriate campaign contribution limits are as opposed to legislators who run for office deciding what appropriate campaign finance contribution limits are i'm sorry better than not to have the legislators very well except the legislators are the ones that actually have experience with the campaign finance system here what you have are people from essentially the municipal bond community saying oh you know we should limit campaign contributions well that's not up to the municipal bond community that should be up to the legislators so what's your brief so many there are ways to fight if the court does not want to come up with a decision that that in some way conflicts with blunt the one piece of all of this that has never been decided by any court is whether these regulations can can limit what the supreme what congress laid out in fico with respect to federal campaign contributions in other words in galliano the d c circuit opinion by then circuit judge ruth bader ginsburg the the postal service tried to apply it broad anti fraud authority to prohibit what was otherwise or punish what was otherwise permissible under and judge ginsburg then judge ginsburg said in her opinion that the agency would be brought anti fraud authority can't encroach on congress's carefully decided wrong the court should look very carefully at this question of the federal campaign contributions because no court has ever addressed this what you've got is an administrative agency setting up a system that changes what congress laid out for federal campaign contributions and contributions to the federal accounts of the political parties and essentially saying well if you are like i'll give you a great example in georgia in the special election that was held in april there was a city councilman who was running for congress that city councilman was subject to a different contribution limit for people from this industry then all of his opponents who were not incumbent local officials and the supreme court in f e c v davis said that the court has never approved a system that permitted different contribution limits to candidates for the same office and if you look at what fico has done in the in the preemption cases with state laws any time a state has them tried to impose a limitation like a session ban or a government contractor band the federal courts have been clear that f amps and what congress laid out for federal elections in feet is what needs to control and here you've got an administrative agency trying to use broad general anti fraud authority like the postal service did in galliano to try to constrain or prohibit what congress otherwise to be permissible for federal elections and you set up a situation where you've created unequal contribution limits in violation of the supreme court's decision in davis v f e c and i see that my time has expired but i have reserved three minutes for  presiding judge but of course your honor with respect to jurisdiction this is really a very unusual case because what's happened is congress has hamstrung the commission and that has had the fact that hamstring the score and that's because of the funding restriction the commission never issued any order it didn't make any decision it has provided no reasoning for the court to review regarding rule and as a result there's just no commission action or order that you can review under section twenty five of the exchange act this new it would be pretty extraordinary if if a federal regulation or rule a letter putain of lee violates somebodies first amendment rights and there would be no way for that person to petition the federal courts for really isn't that would not be pretty remarkable i mean we do think this is a very unusual case we can look policy when isn't it so remarkable that even under some supreme court of forty think there's a case well when something like that where the court has said that actually might be unconstitutional to deprive somebody of a form to make that claim cases and i mean and i appreciate that from a policy perspective that this is not a satisfying result but it's really the consequence of the system that congress has mandated and congress i perfectly free to change the system when you're out with the text of the rider that you're focused on it's just as regulation rule or order regarding regarding contribution limits something or order regarding the disclosure of political contributions right and so your theory is that if you had rejected if the f c c had rejected the rule that would then be an order regarding disclosure whatever that and part was that is that the theory yes your honor because there's no way for us to reject the rule without were the issuing an order right and then i guess my question would be you know we always have to read things in context and so you have regulation regulation or order why shouldn't we apply that you know one of the that can and that's where you sort of look to the company that a word keeps those other two words regulation or rule in that context are clearly talking about something that's prescriptive and why wouldn't we read order to have the same character in that context in which case you could you would be free to reject it because that would not be an order of that character i mean answers well your honor i mean i understand that perhaps the court could go that way we certainly did not feel in a position to second guess congress this isn't a stash of the congress delegated to us to administer and as we point out under the anti deficiency act we risk very serious administrative civil even criminal consequences for that but that's ok i mean i kind of stated my my concerns it's it's almost inconceivable to me that there's no federal court forum for a claim like this just scratching my head about and and i appreciate that not a satisfying result but it's a result that congress can fix in the federal election campaign act as we point out in the brief congress does provide for review of agency in action there is a bill pending in congress right now that would respond to the situation in the public citizen case  it has not fixed it here but plainly this is an area where congress pays attention to as evidenced by the appropriations act restriction but if i may just give the sites of the court has a it's the fa rates act h or five eighty seven and that's the pending bill in congress that would respond to the public citizen the decision from the d c circuit involving ferkin that would provide for review when an agency doesn't act  the other thing that i think is important to keep in mind is that this is a very again unique situation i'm aware of only this rule that has become effective in this way there have been roughly three thousand rules that have been submitted to the commission for review by the self regulatory organizations this is the only one that has become effective through the commissions in action and and the and i think the courts have keep in mind you know as much as the result here is unsatisfying i think if you go the other way it raises very difficult questions of its own because you're really up and how courts review agency action that's the point that the court made in sprint nextel that's also the point that this court made in the mall  decision and i guess finally if i mean if the court is looking for other alternatives to get into a court i just i mean i can't promise any other ways there's potentially an avenue where the petitioners could approach the commission and ask this would have to happen after the appropriations act rider expired and they would petition the commission under section  exchange act and ask the commission to review the s r b used rule so there would be a petition for rule making i mean i think potentially there is some kind of path in the district court for some type of  declaratory judgment action although i can't promise that would necessarily succeed either but again this is the consequence of a system that congress mandated and we believe th morning honors carter phillips for the you know simple securities rulemaking board i think my task is slightly easier than my friends i'm not asking the court not to decide this case because of section twenty five of the securities exchange act i do think there's a serious question as to whether or not the plaintiffs have standing judge catholic us the question if you go back and read taxation without representation you will find that standing in that case was based on the organization's tax exempt status having been denied and that's a that's a footman that's a clear injury  what luann tells you you have to do is identify a real and immediate threat and the they get affidavits that have been put into this case and the single individual whom they've identified who is himself not a m tells me that candidly there is no immediate there's no real threat out there there's no evidence of any indication of any problems that exist under these circumstances and we read that part of the affidavit about mr mcmanus expressing an immediate intention or you know sort of what for this regulation i would be contributing money as opposed to some day i'm going to go see the crocodiles and wherever they are the problem the problem with that is is  he's not a municipal adviser within the meaning of the rule and even on the face of his own and yes it is a dealer that they are already he was already subject to the rule part of this time in fact he says the rules he doesn't talk about the extension of the rules so they don't have anybody in that category and in truth this is a very modest extension of what was covered under g thirty seven previously so it's not shocking candidly that there may not be anybody who has an interest frankly in eliminating this rule because everybody else may be perfectly have registered we don't know that but i think it's realistically it's a it's a very small number of individuals and entities that are covered by this particular so it's mr phillips you would would you say then that really what they need is an individual who is an advisor who's as i would but for this impediment there's thirty seven i would contribute in the next cycle i would have contributed in the last cycle something like that i think something along those lines and i think they would probably even have to go further and find that i was going to contribute to someone whom i'm confident we're going to run for federal office because it seems to me at least on the statutory part of their argument that turns almost exclusively on f and if it's still we're just talking about campaigns that involve nothing but state and local officials running for state local offices has got nothing to do with that so you don't they don't have anybody was standing there kind of raise that statutory the constitutional issue yes but not the statutory  happened i don't judge more i'm not one hundred percent sure that the answer the question is yes not as though they hadn't have a fair amount of time to find someone willing to come forward and say yes this is what i'd like to do and it's not as though we didn't point out to them early on in this process that we thought that there was an inherent flaw in what they have put forward and supplemented anything they haven't any effort to bring someone forward who would satisfy the standing requirements and i would ask the court before it takes on an important statutory constitutional issue to be absolutely convinced that there is in fact somebody out there with an immediate threat to their rights that's being violated under these circumstances on the question of the authority of the board to do what it did here it seems to me at least absolutely clear first of all the extraordinarily broad grant of authority to the board to take actions to protect the integrity of the markets is undeniable this is designed squarely to do that and it's already been done in the past it's been upheld by the d c circuit and blount so i don't think there's  the agency's only agencies can restrict campaign finance but more of the point here this is not particularly is that plies in this context and the extension of municipal advisors nobody can seriously doubt the congress in visioned that the board would do precisely what the board has done when it passed the frank act senate report couldn't be any clearer in saying the reason we're delegating this is forwarded to the board is because the board has undertaken to adopt g thirty seven and has rules in place to comprehensively regulate this and so all we want them to do essentially is take those regulations and extend them through to the municipal advisors in order again to create a level playing field within the securities markets this is not an effort to the federal election commission of federal law in any meaningful sense this is an effort to try to regulate the securities markets and place municipal advisors on the same plane that you place dealers and every other type of advisor on to the statutory scheme congress knew what it was doing it delegated that authority i know of no doctrine that says that an agency cannot fulfill its obligations as stated to it by congress so that so now congress itself has to take that final st comes up in the context but it does seem to me that that's a vastly different case yeah i mean i do see the difference that i described but at the same time i would say that it seems that the evidentiary basis that the government has here  level whereas i think if the court looks carefully at absolute sixty eight and sixty nine in the supplemental supplemental appendix three twenty two and three twenty three the board carefully identified a number of instances primarily of situations where people would now be defined as municipal advisors were otherwise probably being regulated but who nevertheless engaged in improper actions so you have some direct evidence of concern and concerning behavior but again it seems to me you go back scrutiny which as you may have anything would have required a stronger showing and would judge william said in that context is he talking about a situation where common sense tells you that if you if you're a government contractor of some sort and the opportunity it presents itself to pay to get an opportunity to get a bunch more money from the government you're going to seize that opportunity if there's any possibility of doing it and so i don't need the smoking gun but isn't that really the precise syria where the laws change the cases are more demanding of a showing that goes beyond even sort of commonsense or cole conjecture nixon yes and no i suppose i mean i don't know of any case that sort of goes as for except leaven which of course you know is a legitimate because there was no evidence in that circumstance and again i seems to me i don't think we were an outlier in lab right now but i'm not i mean had the only one out there that said you have to have some right we have to have some evidence but the truth is in this case the board identified a series of very specific instances of behavior that looks very much like what we're talking about and does exactly what congress has asked it to do which is to extend the restriction in a way that logic demands i mean you know to me whatever else is out there with respect to campaign finance regulation wagner is probably the clearest evidence that the law has not changed dramatically because federal contractors are still in that case about corruption with federal contractors i mean it was just you know pouring out of that case the evidence they're right but a penalty box for two years it's not as though you're out of the business for all time as a consequence of that and i ask one more question it would seem to me that the analysis here i mean as you know we have to ask  whether the government has demonstrated that the limits are closely drawn to match a sufficiently important interest but it seems to me here that perhaps the analysis under that standard would be different for the different kinds of candidates i mean state and local the briefs kind of talk past each other to some extent they're focused on federal candidates your brief is focused on the rationale for local candidates it would seem to me that the rationale in the basis that you inherit from the original g thirty seven is strongest when a and adviser is giving money to a local official you know if you're giving two thousand dollars to a local official that could be a lot of money in one of those races and the quid pro quo rationale is really strong because that's the person who might be making that decision it seems more attenuated with the federal official that somebody who is trying not to have that job anymore which would attenuate the quid pro quo sort of just common sense blount rationale and federal elections are more expensive and two thousand dollars might be a drop in the bucket there whereas for you know some official in say new york new jersey that's a big chunk of money why why wouldn't the analysis be different for the federal official well at the end of the day that you have no guarantee that the federal officials going to end up becoming a federal of rational and old so the problem is what you're trying to avoid is when at the end of the day then that person ins up is a state local official and the band the and the gift was give it is a pretty big number and you happen to be a municipal advisor so i guess my basic position on that is well while it's less immediately direct it is nevertheless a serious problem and there's no way that i can think of to effectively deal with that unless you're going to say that you have to give up your state and local job and walk away from it for all time and clearly that's not something within the board's authority and i doubt seriously the congress wants to get in the business of telling people they can't do this with that seems to me it's a much less certainly much less of a federalism problem it's the post by simply saying look if you want to run for federal office that's fine but if you retain your state local position and you may well be in that position six months from now then just simply don't take contributions from you know civil advisors arse from where we sit from where the state parties stand the impact of this on federal elections is major this impacts the ability of people in this industry to contribute to the federal accounts of the state parties it also impacts the ability of these individuals to contribute to the federal campaigns of state or local officials half of congress has been elected directly from state or local office half of the current executive branch was elected directly from state or local office where these rules applied to the presidential campaign for one party but not to the presidential campaign for the other party because they had to be a non incumbent official and an incumbent u s senator and i also want to point out that while the m s r be says oh well you know what what the the circuit up held in wagner is exactly what we have here it's not exact what the federal campaign the federal government contractor prohibition prohibits these days is the contributions by people who have direct service contracts with the federal government from giving while they are negotiating their contract or performing their contract there is no two year ban it's only while you're performing the contract and it does not apply to employees of government contractors or the pacs the federal government contractors so boeing raytheon i mean you name the largest government contractors in the country they are some of the largest pacs and some of their employees give more than the employees of lots of other firms and congress has no problem with that yet here are the m s r be a saying well you know us in our administrative capacity think that we know better than congress when it comes to setting contribution limits even to candidates for federal office about that can't possibly be the queen of standing taxation without representation if they were actually denied  an application or their application was denied i mean that that's a lot that's as concrete as it comes that's not just we have a year well your honor i would say a couple of things that one this is the election law area where capable of repetition a debating review is a common basis for reviewing things like contribution and it's usually somebody who has had a concrete injury but it's over with and there's nothing we can do to help i mean mr phillips suggests that we needed to have brought forward someone who wants to contribute to somebody in the future most candidates for twenty eight thousand aren't even announced yet i mean maybe the incumbents are there to find somebody who says i'm an advisor i would have given money to you know these candidates in the last race i want to give money going forward i can i mean that's that's the bunny it's not now never did but it's more difficult when you only have sixty if we had five years to bring a claim under the administrative procedure act or that or there are many people who were here which is which is what we tried when new york and tennessee were in front of the c just record in the d c circuit and got kicked out on a procedural thing you only have sixty days from the time that these rules are finalized to file the application and then you know when we even when we filed that it still took almost a year to actually get from the time we filed to the hearing so it's actually more difficult than then mr philip suggest to go do that but the whole point of this rule is to reduce contributions to political parties and it's candidates it for them to say that there's no possibility of future harm is is borders on absurd the whole point is to reduce contributions and that's not the spending rule leader there might be plenty of people being harmed but i don't know i mean we just need some we need to get beyond