Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-07-05360/USCOURTS-caDC-07-05360-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 5, 2008 Decided June 13, 2008 

No. 07-5360 

CHRISTOPHER SHAYS, 

APPELLEE/CROSS-APPELLANT

v. 

FEDERAL ELECTION COMMISSION, 

APPELLANT/CROSS-APPELLEE

Consolidated with 07-5361 

Appeals from the United States District Court 

for the District of Columbia 

(No. 06cv01247) 

 David Kolker, Associate General Counsel, Federal 

Election Commission, argued the cause for appellant/crossappellee. With him on the briefs was Vivien Clair, Attorney. 

Gregory J. Mueller, Attorney, entered an appearance. 

 Sean P. Trende was on the brief of amicus curiae Center 

for Competitive Politics in support of appellant urging 

reversal.

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 1 of 37
2 

 Charles G. Curtis, Jr. argued the cause for 

appellee/cross-appellant. With him on the briefs were 

Michelle M. Umberger, David L. Anstaett, Lissa R. Koop, 

Roger M. Witten, Randolph D. Moss, Fred Wertheimer, and 

Donald J. Simon. 

 J. Gerald Hebert and Paul S. Ryan were on the brief of 

amicus curiae U.S. Senator Russell D. Feingold in support of 

appellee. 

 Before: TATEL, GARLAND, and GRIFFITH, Circuit Judges. 

Opinion for the court filed by Circuit Judge TATEL. 

TATEL, Circuit Judge: Congress passed the McCainFeingold Act, formally known as the Bipartisan Campaign 

Reform Act of 2002 (BCRA), Pub. L. No. 107-155, 116 Stat. 

81, in an effort to rid American politics of two perceived 

evils: the corrupting influence of large, unregulated donations 

called “soft money,” and the use of “issue ads” purportedly 

aimed at influencing people’s policy views but actually 

directed at swaying their views of candidates. The Federal 

Election Commission promulgated regulations implementing 

the Act, but in Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) 

(“Shays II”), we rejected several of them as either contrary to 

the Act or arbitrary and capricious, concluding that the 

Commission had largely disregarded the Act in an effort to 

preserve the pre-BCRA status quo. Now the FEC has revised 

the regulations we earlier rejected and issued several new 

ones, three of which are before us here: (1) a “coordinated 

communication” standard, the original version of which we 

rejected in Shays II; (2) definitions of “get-out-the-vote 

activity” and “voter registration activity”; and (3) a rule 

allowing federal candidates to solicit soft money at state party 

fundraisers. Although we uphold one part of the coordinated 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 2 of 37
3 

communication standard known as the “firewall safe harbor,” 

we reject the balance of the regulations as either contrary to 

the Act or arbitrary and capricious. We remand these 

regulations in the hope that, as the nation enters the thick of 

the fourth election cycle since BCRA’s passage, the 

Commission will issue regulations consistent with the Act’s 

text and purpose. 

I. 

Because both we and the Supreme Court have provided 

detailed histories of campaign finance regulation, see 

generally McConnell v. FEC, 540 U.S. 93, 115-32 (2003); 

Shays II, 414 F.3d at 79-82, here we provide only the 

background necessary to understand this case. Since long 

before BCRA, the Federal Election Campaign Act (FECA), 2 

U.S.C. §§ 431-455, has regulated many aspects of campaign 

finance. Relevant here, FECA prohibits corporations and 

unions from making direct contributions or expenditures in 

connection with federal elections, id. § 441b, and it imposes 

dollar limits on individuals’ contributions to federal 

candidates, id. § 441a(a). FECA defines “contributions” as 

“any gift . . . made . . . for the purpose of influencing any 

election for Federal office,” id. § 431(8)(A)(i), and it defines 

“expenditures” as “any purchase, payment, distribution, . . . 

or gift of money or anything of value, made by any person for 

the purpose of influencing any election for Federal office,” id.

§ 431(9)(A)(i). Over time, “contributions subject to 

[FECA’s] source, amount, and disclosure requirements” came 

to be known as “hard money,” Shays II, 414 F.3d at 80, while 

“[p]olitical donations made in such a way as to avoid federal 

regulations or limits” came to be known as “soft money,” The 

American Heritage Dictionary of the English Language 1652 

(4th Ed. 2006); see also Shays II, 414 F.3d at 80 (defining 

“soft money” as “[f]unds outside FECA’s sphere”). 

 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 3 of 37
4 

In Buckley v. Valeo, 424 U.S. 1 (1976), the Supreme 

Court, invoking constitutional avoidance, construed FECA’s 

limitation on expenditures to apply only to funding of 

communications that “express[ly] . . . advocate the election or 

defeat of a clearly identified candidate for federal office,” i.e., 

those that contain phrases such as “‘vote for,’ ‘elect,’ 

‘support,’ ‘cast your ballot for,’ ‘Smith for Congress,’ ‘vote 

against,’ ‘defeat,’ [or] ‘reject.’” Id. at 43-44 & n.52. Thus, 

by avoiding these “magic words,” organizations unable to 

make “expenditures”—such as corporations and unions—

could fund so-called “issue ads” that were “functionally 

identical” to campaign ads and just as effective. McConnell, 

540 U.S. at 126; see also FEC v. Mass. Citizens for Life, 479 

U.S. 238, 249 (1986) (clarifying that the limited definition of 

“expenditures” applied to ads funded by corporations and 

unions). “Little difference existed, for example, between an 

ad that urged viewers to ‘vote against Jane Doe’ and one that 

condemned Jane Doe’s record on a particular issue before 

exhorting viewers to ‘call Jane Doe and tell her what you 

think.’” McConnell, 540 U.S. at 126-27. 

Following Buckley, the Commission repeatedly 

interpreted FECA to expand the permissible uses of soft 

money. In particular, because FECA only regulated 

contributions intended to influence elections “for Federal

office,” 2 U.S.C. § 431(8)(A)(i) (emphasis added), “questions 

arose concerning the treatment of contributions intended to 

influence both federal and state elections.” McConnell, 540 

U.S. at 123. As the Supreme Court explained: 

Although a literal reading of FECA’s 

definition of “contribution” would have 

required such activities to be funded with hard 

money, the FEC ruled that political parties 

could fund mixed-purpose activities—

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 4 of 37
5 

including get-out-the-vote drives and generic 

party advertising—in part with soft money. In 

1995 the FEC concluded that the parties could 

also use soft money to defray the costs of 

“legislative advocacy media advertisements,” 

even if the ads mentioned the name of a federal 

candidate, so long as they did not expressly 

advocate the candidate’s election or defeat. 

Id. at 123-24 (footnote and citations omitted). 

Because soft money could now be spent in so many ways 

that benefited federal candidates, and because it could be 

raised in massive amounts without any of FECA’s limitations 

or reporting requirements, federal candidates would often 

solicit such donations directed to their political party. The 

party would then spend the money on ads supporting the 

candidate—omitting the magic words—or on get-out-the-vote 

activity and voter registration activity aimed at helping the 

candidate. This “enabled parties and candidates to 

circumvent FECA’s limitations on the source and amount of 

contributions in connection with federal elections.” Id. at 

126. “As the permissible uses of soft money expanded, the 

amount of soft money raised and spent by the national 

political parties increased exponentially,” from $22 million in 

1984 to $498 million in 2000. Id. at 124. Thus, “the ‘soft 

money loophole’ had led to a ‘meltdown’ of the campaign 

finance system that had been intended ‘to keep corporate, 

union and large individual contributions from influencing the 

electoral process.’” Id. at 129 (quoting S. REP. NO. 105-167, 

vol. 4, at 4611 (1998); id. vol. 5, at 7515). 

Recognizing these problems, Congress passed BCRA, the 

“central provisions” of which were “designed to address 

Congress’ concerns about the increasing use of soft money 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 5 of 37
6 

and issue advertising to influence federal elections.” Id. at 

132. BCRA made a number of dramatic changes to campaign 

finance law to achieve these goals, including barring national 

political parties from soliciting soft money. 2 U.S.C. 

§441i(a). Relevant here, the Act required the FEC to develop 

a new test for determining what advertisements count as 

“coordinated communications,” BCRA § 214(c), 116 Stat. at 

95 (codified at 2 U.S.C. § 441a note); barred state parties 

from spending soft money on “federal election activity,” 

including “get-out-the-vote activity” and “voter registration 

activity,” 2 U.S.C. § 441i(b)(1); and prohibited federal 

candidates from soliciting soft money, id. § 441i(e). 

The FEC first issued regulations implementing BCRA in 

2003. Believing these regulations far too permissive, 

Representative Chris Shays, a prime BCRA sponsor, 

challenged nineteen of them in the United States District 

Court for the District of Columbia, arguing that they either 

violated the Act or were arbitrary and capricious. In Shays v. 

FEC, 337 F. Supp. 2d 28 (D.D.C. 2004) (“Shays I”), the 

district court largely agreed with Shays, rejecting fifteen of 

the nineteen regulations. On appeal, the FEC challenged the 

district court’s decision as to five of the regulations, and in 

Shays II, 414 F.3d 76, we affirmed the district court. 

In response, the Commission modified or more 

thoroughly justified its proposed regulations and reissued 

them, along with several new ones. Shays now challenges 

three of these regulations. The first is the Commission’s 

definition of “coordinated communications,” the original 

version of which we rejected in Shays II. This regulation 

includes three subparts: (1) a “content standard” providing 

that only ads containing certain content may be deemed 

coordinated, 11 C.F.R. § 109.21(c); (2) a “conduct standard” 

governing when campaign employees and vendors who go to 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 6 of 37
7 

work for outside organizations may share campaign 

information, id. § 109.21(d)(4)-(5); and (3) a “firewall safe 

harbor” provision that is also part of the conduct standard and 

protects groups hiring former campaign employees and 

vendors, id. § 109.21(h). The second challenged regulation 

defines “get-out-the-vote activity” and “voter registration 

activity,” id. § 100.24(a)(2)-(3), while the third allows federal 

candidates to solicit soft money at state party fundraisers, id. § 

300.64. 

In a thorough opinion, the district court rejected each of 

these rules except the last one, finding them either contrary to 

BCRA’s purpose or arbitrary and capricious. See Shays v. 

FEC, 508 F. Supp. 2d 10 (D.D.C. 2007) (“Shays III”). The 

FEC now appeals as to the rules the district court struck 

down, and Shays cross appeals as to the rule the district court 

upheld. Senator Russell Feingold, another prime BCRA 

sponsor, has filed an amicus brief supporting Shays. 

We address each rule in turn, employing two familiar 

standards of review: Chevron and the Administrative 

Procedure Act. As we explained in Shays II: 

[B]ecause the regulations at issue interpret 

statutes the FEC administers, we review them 

under the two-step analysis set forth in 

Chevron U.S.A., Inc. v. Natural Resources 

Defense Council, Inc., 467 U.S. 837 (1984), 

asking first whether Congress has spoken 

directly to the precise question at issue, and 

second, if it has not, whether the agency’s 

interpretation is reasonable. At the same time, 

because the regulations reflect final agency 

action under the APA, we ask whether they are 

“arbitrary, capricious, an abuse of discretion, 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 7 of 37
8 

or otherwise not in accordance with law.” 5 

U.S.C. § 706(2)(A). 

414 F.3d at 96 (citation omitted). In applying Chevron’s 

second step and the APA, we “must reject administrative 

constructions of [a] statute . . . that frustrate the policy that 

Congress sought to implement.” Cont’l Air Lines, Inc. v. 

Dep’t of Transp., 843 F.2d 1444, 1453 (D.C. Cir. 1988) 

(quoting FEC v. Democratic Senatorial Campaign Comm.,

454 U.S. 27, 32 (1981)). We review the district court’s 

Chevron and APA holdings de novo. See Am. Legion v. 

Derwinski, 54 F.3d 789, 795 (D.C. Cir. 1995). 

II.

 The first and most important issue before us is the FEC’s 

revised “coordinated communication” standard. Federal 

election law “has long restricted coordination of electionrelated spending between official campaigns and outside 

groups. The reason . . . is obvious. Without a coordination 

rule, politicians could evade contribution limits and other 

restrictions by having donors finance campaign activity 

directly,” e.g., by asking a donor to buy air time for a 

campaign-produced advertisement. Shays II, 414 F.3d at 97. 

 

 To prevent such evasion, FECA defines “contributions” 

to include “expenditures made by any person in cooperation, 

consultation, or concert, with, or at the request or suggestion 

of, a candidate.” 2 U.S.C. § 441a(a)(7)(B)(i). 

 

Under pre-BCRA regulations, the FEC 

determined whether public communications 

such as radio and television ads were 

“coordinated” based largely on whether the 

candidate had engaged in “substantial 

discussion or negotiation” with an outsider, 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 8 of 37
9 

resulting in “collaboration or agreement.” See 

Shays [I], 337 F. Supp. 2d at 55-56 & n.25 

(quoting old regulation). Absent that degree of 

cooperation, the communication was 

considered uncoordinated and thus would not 

count as a FECA contribution. BCRA 

instructed the Commission to scrap this 

approach. “The regulations on coordinated 

communications . . . are repealed,” Congress 

declared. “The Federal Election Commission 

shall promulgate new regulations on 

coordinated communications paid for by 

persons other than candidates, authorized 

committees of candidates, and party 

committees. The regulations shall not require 

agreement or formal collaboration to establish 

coordination.” BCRA § 214(c), 116 Stat. at 

95. Apart from this negative command—

“shall not require”—BCRA merely listed 

several topics the rules “shall address,” 

providing no guidance as to how the FEC 

should address them. See id.

Shays II, 414 F.3d at 97-98 (omission in original). 

 Responding to BCRA, the FEC issued new coordinated 

communication regulations. “Under its new test, 

communications count as ‘coordinated’ (and thus as 

contributions) if: (1) someone other than the candidate, party, 

or official campaign pays for them, (2) the communication 

itself meets specified ‘content standards,’ and (3) the payer’s 

interaction with the candidate/party satisfies specified 

‘conduct standards.’” Id. at 98 (quoting 11 C.F.R. § 109.21). 

The conduct standard can be satisfied in several ways, e.g., if 

“[t]he communication is created, produced, or distributed at 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 9 of 37
10 

the request or suggestion of a candidate,” 11 C.F.R. 

§ 109.21(d)(1)(i); if “[t]he communication is created, 

produced, or distributed after one or more substantial 

discussions about the communication between the person 

paying for the communication . . . and the candidate who is 

clearly identified in the communication,” id. § 109.21(d)(3); 

or if the person paying for the communication hires a 

candidate’s vendor or former employee “to create, produce, or 

distribute” it and in doing so that vendor/employee uses 

“material” information about “campaign plans, projects, 

activities, or needs” or shares such information with the 

payer, id. § 109.21(d)(4)-(5). 

 Shays challenges the content standard and two features of 

the conduct standard. We address each challenge in turn. 

 

The Content Standard 

“Under the ‘content’ element” of the original rule, 

“communications made within 120 days of a general election 

or primary and ‘directed’ at the relevant electorate [could] 

qualify as ‘coordinated’ if they refer[red] to a political party 

or ‘clearly identified candidate for Federal office.’” Shays II, 

414 F.3d at 98 (quoting 11 C.F.R. § 109.21(c)(4) (2003)). 

“Before the 120-day mark,” however, “the rule cover[ed] only 

communications that either recycle[d] official campaign 

materials or ‘expressly advocate[d] the election or defeat of a 

clearly identified candidate for federal office.’” Id. (emphasis 

added) (quoting 11 C.F.R. § 109.21(c)(2)-(3) (2003)). Thus, 

more than 120 days before a federal election, the FEC’s 

original rule allowed candidates to coordinate with outside 

groups so long as the ads those groups funded did not include 

the magic words or recycle campaign materials. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 10 of 37
11 

Challenging the rule, Shays argued that limiting 

regulation outside the 120-day window only to advertisements 

containing certain types of content violated the Act’s plain 

language and purpose, and that the Commission had failed to 

provide any good reason for doing so. The district court 

rejected Shays’s Chevron step one argument but found that 

the regulation failed Chevron step two because “exclud[ing] 

certain types of communications” based solely on their 

content “regardless of whether or not they are coordinated 

would create an immense loophole that would facilitate the 

circumvention of the Act’s contribution limits, thereby 

creating ‘the potential for gross abuse.’” Shays I, 337 F. 

Supp. 2d at 65 (quoting Orloski v. FEC, 795 F.2d 156, 165 

(D.C. Cir. 1986)). 

In Shays II, we agreed with the district court that the rule 

was invalid, but for slightly different reasons. Like the 

district court, we “reject[ed] Shays’s . . . argument that FECA 

precludes content-based standards under Chevron step one,” 

Shays II, 414 F.3d at 99, but we “disagree[d] with the district 

court’s suggestion that any standard looking beyond 

collaboration to content would necessarily ‘create an immense 

loophole,’ thus exceeding the range of permissible readings 

under Chevron step two,” id. at 99-100 (emphasis added) 

(quoting Shays I, 337 F. Supp. 2d at 65). Rather, we saw no 

need to reach the Chevron step two question—whether this 

particular content standard violated BCRA—because 

“contrary to the APA, the Commission offered no persuasive 

justification for the provisions challenged . . . , i.e., the 120-

day time-frame and the weak restraints applying outside of 

it.” Id. at 100; see also id. at 97 (“[W]e need not decide 

whether [this rule] represent[s an] altogether impermissible 

interpretation[] of FECA and BCRA—the Chevron step two 

inquiry—because in any event the FEC has given no rational 

justification for [it], as required by the APA’s arbitrary and 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 11 of 37
12 

capricious standard.” (citation omitted)). Remanding the rule, 

we directed the FEC to provide “some cogent explanation” 

for it, “not least because” it effectively “allowed a coordinated 

communication free-for-all for much of each election cycle.” 

Id. at 100. As we explained: 

Under the[se] . . . rules, more than 120 days 

before an election or primary, a candidate may 

sit down with a well-heeled supporter and say, 

“Why don’t you run some ads about my record 

on tax cuts?” The two may even sign a formal 

written agreement providing for such ads. Yet 

so long as the supporter neither recycles 

campaign materials nor employs the “magic 

words” of express advocacy—“vote for,” “vote 

against,” “elect,” and so forth—the ads won’t 

qualify as contributions subject to FECA. 

Id. at 98. 

 On remand, the Commission published a new notice of 

proposed rulemaking, took comments, held hearings, and 

analyzed extensive data on television advertising by 

candidates for federal office. It then issued a revised 

regulation identical to the original regulation except that it 

shortened the length of stricter regulation in congressional 

races to 90 days. The revised regulation prohibits coordinated 

advertisements “refer[ring] to a clearly identified House or 

Senate candidate . . . in the clearly identified candidate’s 

jurisdiction 90 days or fewer before the clearly identified 

candidate’s general, special, or runoff election, or primary or 

preference election.” 11 C.F.R. § 109.21(c)(4)(i). It prohibits 

coordinated advertisements “refer[ring] to a clearly identified 

Presidential or Vice Presidential candidate . . . in a 

jurisdiction during the period of time beginning 120 days 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 12 of 37
13 

before the clearly identified candidate’s primary or preference 

election in that jurisdiction, or nominating convention or 

caucus in that jurisdiction, up to and including the day of the 

general election.” Id. § 109.21(c)(4)(ii). Outside the 90/120-

day windows, however, the regulation still prohibits only 

coordinated advertisements that “disseminate[], distribute[], 

or republish[] . . . campaign materials prepared by a 

candidate,” or “expressly advocate[] the election or defeat of a 

clearly identified candidate.” Id. § 109.21(c)(2)-(3). 

 Again challenging the rule, Shays argued that the 90/120-

day windows were unsupported by the evidence, violating the 

APA, and that the lax standard applying outside the windows 

was both unexplained and contrary to BCRA’s purpose, 

violating the APA and failing Chevron step two review. The 

district court concluded that the FEC had adequately justified 

the 90/120-day windows because the record showed that the 

“vast majority of candidate advertising occurred within” those 

periods. Shays III, 508 F. Supp. 2d at 42; see id. at 40-43. It 

also rejected Shays’s claim that the lax pre-window standard 

would undermine the Act’s purposes. The district court 

nonetheless struck down the revised regulation as arbitrary 

and capricious because the FEC “ma[de] no attempt 

whatsoever to justify the Commission’s continued reliance on 

the express advocacy standard” outside the windows, id. at 

47, thus “fail[ing] to meet the APA’s standard of reasoned 

decisionmaking,” id. at 48-49. 

 The FEC appeals this finding, but before we can reach 

the merits, we face a jurisdictional question. In Shays II we 

held that Shays had standing to challenge the regulations at 

issue there because he satisfied standing’s three requirements, 

“demonstrat[ing] that he ha[d] suffered ‘injury in fact,’ that 

the injury [wa]s ‘fairly traceable’ to the actions of the 

defendant, and that the injury w[ould] likely be redressed by a 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 13 of 37
14 

favorable decision.” Bennett v. Spear, 520 U.S. 154, 162 

(1997) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 

560-61 (1992)). The “injury in fact” was the FEC’s “illegal 

structuring of [the] competitive environment” in which Shays 

ran for Congress, Shays II, 414 F.3d at 85, that injury was 

traceable to the Commission because it promulgated the 

challenged rules, id. at 92-95, and a favorable decision could 

redress the injury by striking down the rules, id. at 95. 

The FEC suggests that this case is different, saying “[i]t 

is unclear whether the Court has jurisdiction to rule on 

Shays’[s] challenge to the portion of the regulation governing 

the presidential election because he has never been, or stated 

any intention to be, a candidate for president.” Appellant’s 

Reply Br. 25 n.12. The Commission failed to mention this 

argument in its opening brief, first raising it in a footnote in 

its reply brief. Moreover, although the Commission assured 

us in its brief that it was “not challeng[ing] Shays’[s] 

standing,” but rather only highlighting this issue for the court 

because we have our “own obligation to determine that [we 

have] jurisdiction over each of [Shays’s] claims,” id., the 

Commission changed its tone at oral argument, asserting that 

Shays lacked standing to challenge the 120-day window 

applicable to presidential candidates, Oral Arg. at 47:16-:38. 

Normally we would not consider an argument first raised in a 

reply brief, Carter v. George Washington Univ., 387 F.3d 

872, 883 (D.C. Cir. 2004), much less one raised only in a 

footnote, Hutchins v. District of Columbia, 188 F.3d 531, 

539-40 n.3 (D.C. Cir. 1999) (en banc). But because this 

argument goes to our jurisdiction, we must consider it, see 

United States v. Hylton, 294 F.3d 130, 136 (D.C. Cir. 2002), 

though we are disappointed in the FEC for raising this issue 

so late that Shays had no adequate opportunity to respond. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 14 of 37
15 

That said, Shays plainly has standing under FEC v. Akins, 

524 U.S. 11 (1998). Indeed, after some prodding at oral 

argument, FEC counsel virtually conceded as much, Oral Arg. 

at 47:45-49:15. In Akins, the petitioners—a group of voters 

seeking information about the political activities of the 

American Israel Public Affairs Committee (AIPAC)—

challenged the FEC’s determination that AIPAC did not 

qualify as a “political committee,” a decision that meant 

AIPAC had no obligation to report information about its 

“members, contributions, and expenditures.” Id. at 16. The 

Court held that petitioners had suffered an injury in fact, 

namely “their inability to obtain information—lists of AIPAC 

donors . . . and campaign-related contributions and 

expenditures—that, on [their] view of the law, the statute 

require[d] that AIPAC make public,” id. at 21; see also id.

(“[A] plaintiff suffers an ‘injury in fact’ when the plaintiff 

fails to obtain information which must be publicly disclosed 

pursuant to a statute.” (citing Pub. Citizen v. DOJ, 491 U.S. 

440, 449 (1989)). 

Here, as in Akins, Shays’s injury in fact is the denial of 

information he believes the law entitles him to. Specifically, 

under the FEC’s definition of coordinated communications, 

presidential candidates need not report as contributions many 

expenditures that Shays believes BCRA requires them to 

report. Thus, Shays claims the regulation illegally denies him 

information about who is funding presidential candidates’ 

campaigns. We see no difference between this injury and the 

injury deemed sufficient to create standing in Akins. Here, as 

there, “the information would help [Shays] (and others to 

whom [he] would communicate it) to evaluate candidates for 

public office . . . , and to evaluate the role that [outside 

groups’] financial assistance might play in a specific 

election.” Id. And here, as there, Shays’s “injury 

consequently seems concrete and particular.” Id. Finally, as 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 15 of 37
16 

in Akins, Shays’s injury is fairly traceable to the FEC because 

it is caused by the Commission’s rule, and the injury would be 

redressed were this court to invalidate the rule. Id. at 25. 

Assured of Shays’s standing to challenge this rule in its 

entirety, we turn to the merits. Shays claims the rule suffers 

from two flaws. First, the FEC failed to justify the length of 

the 90/120-day windows, violating the APA. And second, the 

lax standard the Commission imposed outside those windows 

not only runs counter to BCRA’s purpose, but also was 

entirely unjustified, failing both Chevron step two and APA 

review. After describing the evidence before the 

Commission, we address each argument in turn. 

On remand the Commission gathered extensive evidence 

about the timing of advertising in federal election campaigns. 

Reviewing data from the Campaign Media Analysis Group 

regarding television ads run by federal candidates in the 2004 

election cycle, the Commission found that “Senate candidates 

aired only 0.87 percent and 0.39 percent of their 

advertisements more than 90 days before their primary and 

general elections, respectively,” while “House candidates 

aired only 8.56 percent and 0.28 percent of their 

advertisements more than 90 days before their primary and 

general elections, respectively.” Coordinated 

Communications, 71 Fed. Reg. 33,190, 33,194 (2006). In the 

2004 presidential campaign, 8.44 percent of all candidate TV 

ads in the primary ran outside the 120-day window, as did 16 

percent of all candidate TV ads in Iowa before its crucial 

caucus. Shays III, 508 F. Supp. 2d at 45. While these 

percentages are small, the total amount spent on pre-window 

ads was substantial, totaling into the millions of dollars. See 

id. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 16 of 37
17 

In addition to evidence about spending by candidates, the 

Commission had before it many examples of expenditures by 

outside groups before the 90/120-day windows. For example, 

in the 2004 Alaska Senate race, the U.S. Chamber of 

Commerce began running TV ads supporting Senator Lisa 

Murkowski nine months before the primary election. In the 

2004 Florida Senate race, the illuminatingly-named “People 

for a Better Florida” began running ads attacking candidate 

Mel Martinez over five months before the primary. In the 

2006 Pennsylvania Senate race, a group called “Americans 

for Job Security” spent $500,000 on TV ads supporting 

Senator Rick Santorum starting six months before the 

primary. In the 2004 South Dakota Senate race, the Club for 

Growth began running ads attacking Senator Tom Daschle 

fifteen months before the general election. The group ran 

similar ads against Rhode Island Senator Lincoln Chafee 

beginning nine months before his 2006 primary. Because 

none of these ads contained the “magic words” of express 

advocacy, all could have been coordinated with candidates 

under the Commission’s rule. 

The record also reveals that the vast majority of 

campaign ads omit “express advocacy.” “In the 1998 election 

cycle, just 4% of candidate advertisements used magic words; 

in 2000, that number was a mere 5%.” McConnell, 540 U.S. 

at 127 n.18. “Indeed, campaign professionals” told Congress 

while it was considering BCRA “that the most effective 

campaign ads . . . avoid the use of the magic words.” Id. at 

127. Because campaign advertisements rarely use magic 

words, the Supreme Court has declared the express advocacy 

test “functionally meaningless.” Id. at 193. 

In sum, the record demonstrates several key points: (1) 

the vast majority of advertising by candidates occurs in the 

90/120-day windows the FEC regulates more strictly; (2) 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 17 of 37
18 

candidates and outside groups nonetheless run a significant 

number of ads before the 90/120-day windows; and (3) very 

few ads contain magic words. These facts lead us to two 

inexorable conclusions: the FEC’s decision to regulate ads 

more strictly within the 90/120-day windows was perfectly 

reasonable, but its decision to apply a “functionally 

meaningless” standard outside those windows was not. Id. at 

193. 

Beginning with the windows, we made clear in Shays II

that nothing in BCRA forbids the FEC from “dr[awing] 

distinctions based on content, time, and place”; its failure then 

was that it provided no evidence in support of the window it 

chose. 414 F.3d at 100. But given the record evidence 

showing that the vast majority of federal campaign 

advertisements run within the more strictly regulated 

windows, the FEC now “appears to have drawn the line in a 

reasonable place based on the data available to it.” Shays III, 

508 F. Supp. 2d at 43. 

The next issue is whether the FEC’s decision to regulate 

only ads containing express advocacy outside the 90/120-day 

windows fails Chevron step two review or violates the APA. 

As our cases explain, these inquiries overlap, for “[w]hether a 

statute is unreasonably interpreted is close analytically to . . . 

whether an agency’s actions under a statute are 

unreasonable.” Gen. Instrument Corp. v. FCC, 213 F.3d 724, 

732 (D.C. Cir. 2000). At Chevron step two and under the 

APA, “[courts] must reject administrative constructions of [a] 

statute . . . that frustrate the policy that Congress sought to 

implement.” Cont’l Air Lines, 843 F.2d at 1453 (quoting 

Democratic Senatorial Campaign Comm., 454 U.S. at 32). 

While that policy may sometimes be unclear, here it is not: 

“BCRA’s fundamental purpose [is] prohibiting soft money 

from being used in connection with federal elections.” 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 18 of 37
19 

McConnell, 540 U.S. at 177 n.69; see also id. at 132 

(“BCRA’s central provisions are designed to address 

Congress’ concerns about the increasing use of soft money 

and issue advertising to influence federal elections.”). Recall 

that “soft money” refers to political donations made in such a 

way as to avoid FECA’s restrictions. See Shays II, 414 F.3d 

at 80. 

 The question, then, is this: Does the challenged 

regulation frustrate Congress’s goal of “prohibiting soft 

money from being used in connection with federal elections”? 

McConnell, 540 U.S. at 177 n.69. We think it does. Outside 

the 90/120-day windows, the regulation allows candidates to 

evade—almost completely—BCRA’s restrictions on the use 

of soft money. As FEC counsel conceded at oral argument, 

Oral Arg. at 0:46-2:00, the regulation still permits exactly 

what we worried about in Shays II, i.e., more than 90/120 

days before an election, candidates may ask wealthy 

supporters to fund ads on their behalf, so long as those ads 

contain no magic words. 414 F.3d at 98. Indeed, pressed at 

oral argument, counsel admitted that the FEC would do 

nothing about such coordination, even if a contract 

formalizing the coordination and specifying that it was “for 

the purpose of influencing a federal election” appeared on the 

front page of the New York Times. Oral Arg. at 7:34-8:03. 

Thus, the FEC’s rule not only makes it eminently possible for 

soft money to be “used in connection with federal elections,” 

McConnell, 540 U.S. at 177 n.69, but it also provides a clear 

roadmap for doing so, directly frustrating BCRA’s purpose. 

Moreover, by allowing soft money a continuing role in the 

form of coordinated expenditures, the FEC’s proposed rule 

would lead to the exact perception and possibility of 

corruption Congress sought to stamp out in BCRA, for 

“expenditures made after a ‘wink or nod’ often will be ‘as 

useful to the candidate as cash,’” id. at 221 (quoting FEC v. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 19 of 37
20 

Colo. Republican Fed. Campaign Comm., 533 U.S. 431, 442, 

446 (2001)), and “[i]t is not only plausible, but likely, that 

candidates would feel grateful for such donations and that 

donors would seek to exploit that gratitude,” id. at 145. 

 The FEC offers four reasons why we should nonetheless 

uphold this lax standard. First, explaining that it chose the 

standard to protect the First Amendment rights of outside 

groups conducting independent expenditures, it argues that 

any standard more vague than “express advocacy” would 

unacceptably chill the speech of such groups. We applaud the 

Commission’s sensitivity to First Amendment values, but as 

we said in Shays II, “regulating nothing at all” would achieve 

the same purpose, “and that would hardly comport with the 

statute.” 414 F.3d at 101. Thus, “[n]otwithstanding its 

obligation to attempt to avoid unnecessarily infringing on 

First Amendment interests, the Commission must establish, 

consistent with APA standards, that its rule rationally 

separates election-related advocacy from other activity falling 

outside FECA’s expenditure definition,” id. at 101-02 

(citation omitted), which, remember, defines “expenditure” as 

“any purchase, payment, . . . or gift of money or anything of 

value, made by any person for the purpose of influencing any 

election for Federal office.” 2 U.S.C. § 431(9)(A)(i) 

(emphasis added). Here the Commission failed to show that 

its rule rationally separates election-related advocacy from 

other speech, for many of the ads its rule leaves unregulated 

are plainly intended to “influenc[e] an[] election for Federal 

office.” Id. The FEC claims it has drawn a rational line 

because ads omitting magic words run by outside groups in 

coordination with candidates before the windows are 

generally not intended to influence federal elections. But this 

is absurd. Because the magic words test is “functionally 

meaningless,” McConnell, 540 U.S. at 193, and “expenditures 

made after a ‘wink or nod’ often will be ‘as useful to the 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 20 of 37
21 

candidate as cash,’” id. at 221 (quoting Colo. Republican 

Comm., 533 U.S. at 442, 446), there is no question that 

coordinated ads omitting magic words are often intended to 

influence federal elections. This is true even outside the 

90/120-day windows, for as the FEC itself found, “[a]ny time 

a candidate uses campaign funds to pay for an advertisement, 

it can be presumed that this advertisement is aired for the 

purpose of influencing the candidate’s election.” 71 Fed. 

Reg. at 33,193 (emphasis added). We have no reason to think 

this is any less true of spending that candidates coordinate 

with outside groups. In sum, although the FEC, properly 

motivated by First Amendment concerns, may choose a 

content standard less restrictive than the most restrictive it 

could impose, it must demonstrate that the standard it selects 

“rationally separates election-related advocacy from other 

activity falling outside FECA’s expenditure definition.” 

Shays II, 414 F.3d at 102. Because the “express advocacy” 

standard fails that test, it runs counter to BCRA’s purpose as 

well as the APA. 

 Second, the FEC points to our decision in Orloski v. 

FEC, 795 F.2d 156 (D.C. Cir. 1986), as support for the rule it 

chose. Orloski dealt with 2 U.S.C. § 441b(a), which prohibits 

corporations from making “contribution[s] or expenditure[s] 

in connection with any election to any political office.” The 

FEC interpreted this provision to allow corporations to fund 

events for federal officeholders so long as those events were 

“non-political,” i.e., “(1) there is an absence of any 

communication expressly advocating the nomination or 

election of the congressman appearing or the defeat of any 

other candidate, and (2) there is no solicitation, making, or 

acceptance of a campaign contribution for the congressman in 

connection with the event.” Orloski, 795 F.2d at 160. 

Upholding the regulation under Chevron, we explained that 

although it was “at the outer bounds of permissible choice,” it 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 21 of 37
22 

was “still a ‘reasonable choice within a gap left open by 

Congress.’” Id. at 167 (quoting Chevron, 467 U.S. at 866). 

The FEC urges us to reach the same conclusion here, but 

it ignores the crucial differences separating Orloski from this 

case. Most important, in Orloski we found that “the FEC’s 

interpretation does not create the potential for gross abuse” 

because “under the FEC’s interpretation, corporations can 

make little more than insignificant, indirect donations to a 

candidate’s political warchest, which are unlikely to give the 

corporations improper influence over candidates for federal 

office or to significantly increase the level of campaign 

spending.” Id. at 165-66. Here, by contrast, the coordinated 

expenditures the Commission’s rule allows “often will be ‘as 

useful to the candidate as cash,’” McConnell, 540 U.S. at 221 

(quoting Colo. Republican Comm., 533 U.S. at 446), and “[i]t 

is not only plausible, but likely, that candidates would feel 

grateful for such donations and that donors would seek to 

exploit that gratitude,” id. at 145. This “create[s] the potential 

for gross abuse” that was absent in Orloski. Orloski, 795 F.2d 

at 165. Moreover, in Orloski we said “[i]f the FEC’s 

interpretation unduly compromises the Act’s purposes, it is 

not a ‘reasonable accommodation’ under the Act, and it would 

therefore not be entitled to deference.” Id. at 164 (quoting 

Chevron, 467 U.S. at 845). Here, as we have explained, the 

rule “unduly compromises” the Act’s purpose of “prohibiting 

soft money from being used in connection with federal 

elections.” McConnell, 540 U.S. at 177 n.69. 

Third, the FEC disparages the many examples Shays 

provides of pre-window expenditures by candidates and 

outside groups, calling them mere “anecdotes” and saying 

Shays failed to offer any evidence of their relative 

significance. See Appellant’s Reply Br. 19-21. But the 

FEC’s own study showed that almost 10% of primary election 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 22 of 37
23 

advertisements by House candidates and presidential 

candidates in 2004—plainly “aired for the purpose of 

influencing the candidate’s election,” 71 Fed. Reg. at 

33,193—ran before the windows, and Shays provided 

numerous examples of pre-window ads funded by outside 

groups that were obviously intended to influence federal 

elections. Notably, many of Shays’s examples came from 

media markets excluded from the FEC’s study, and they 

suggest that the percentage of early advertising may be even 

greater than that captured by the FEC’s analysis. Shays’s 

evidence, combined with the FEC’s study, proves his point. 

Given the rule the FEC chose, which regulates virtually no 

coordinated pre-window ads, the Commission could 

demonstrate that it met its statutory obligation—“rationally 

separat[ing] election-related advocacy from other activity 

falling outside FECA’s expenditure definition,” Shays II, 414 

F.3d at 102—only by showing that a truly insignificant 

number of ads intended to influence federal elections run 

before the windows. See Shays II, 414 F.3d at 99 (“[T]he 

FEC lacks discretion to exclude [communications intended to 

influence federal elections] from its coordinated 

communication rule.”). The evidence in the FEC’s own 

study, as well as the evidence Shays provided, refutes any 

such contention. 

 Finally, the FEC assures us that we have no reason to 

worry about lax regulation outside the 90/120-day windows 

because it has received very few complaints alleging that 

candidates are currently coordinating expenditures with 

outside groups before the windows, and there is no evidence 

that candidates will begin coordinating with outside groups if 

we uphold the regulation. This argument flies in the face of 

common sense. Of course the FEC hasn’t received many 

complaints: the challenged rule allows unlimited coordination 

so long as the resulting advertisements omit express 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 23 of 37
24 

advocacy. In other words, people have had no reason to 

report this type of coordination because it is perfectly legal 

under the FEC’s rule. Moreover, the Commission’s 

prediction about what will happen in the future disregards 

everything Congress, the Supreme Court, and this court have 

said about campaign finance regulation. In passing BCRA, 

Congress found that ads funded with soft money “were often 

actually coordinated with, and controlled by, the campaigns.” 

McConnell, 540 U.S. at 131 (citing S. REP. NO. 105-167, vol. 

1, at 49 (1998); id. vol. 3, at 3997-4006). In McConnell, the 

Supreme Court said, “[m]oney, like water, will always find an 

outlet,” id. at 224, and BCRA reflects “the hard lesson of 

circumvention” Congress has learned from “the entire history 

of campaign finance regulation,” id. at 165. And in Shays II, 

we said, “if regulatory safe harbors permit what BCRA bans, 

we have no doubt that savvy campaign operators will exploit 

them to the hilt, reopening the very soft money floodgates 

BCRA aimed to close.” 414 F.3d at 115. Common sense 

requires the same conclusion here. Under the present rules, 

any lawyer worth her salt, if asked by an organization how to 

influence a federal candidate’s election, would undoubtedly 

point to the possibility of coordinating pre-window 

expenditures. The FEC’s claim that no one will take 

advantage of the enormous loophole it has created ignores 

both history and human nature. 

Conduct Standard: Campaign Vendors and Former 

Employees 

BCRA directed the FEC, in issuing its revised 

coordinated communication rules, to address “payments for 

the use of a common vendor” and “payments for 

communications directed or made by persons who previously 

served as an employee of a candidate or a political party.” 

BCRA § 214(c), 116 Stat. at 95 (codified at 2 U.S.C. § 441a 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 24 of 37
25 

note). The FEC’s original post-BCRA regulations 

implemented these provisions by specifying that the “conduct 

prong” of the coordinated communication test would be 

satisfied if a candidate’s vendor or former employee 

“create[d], produce[d], or distribute[d]” a communication 

using “material” information about “campaign plans, projects, 

activities, or needs,” or shared such information with the 

person paying for the communication, throughout the “current 

election cycle.” 11 C.F.R. § 109.21(d)(4)-(5) (2003). 

Shays chose not to challenge these original provisions, 

but the FEC nonetheless revisited them after we remanded 

other aspects of the coordinated communication rule in Shays 

II. Because campaign vendors and employees complained 

that the regulation was unnecessarily cumbersome—they 

claimed that the information they possess quickly loses 

value—the FEC decided to change the rule so that it only 

prohibits vendors and former employees from using “material 

information” about “campaign plans, projects, activities, or 

needs,” or sharing such information with the person funding 

the ad, for 120 days, rather than throughout the whole election 

cycle. 11 C.F.R. § 109.21(d)(4)-(5). 

In the district court, Shays challenged the revised 

regulation, arguing that it ran counter to BCRA’s purpose and 

violated the APA. Although the district court rejected the 

Chevron step two argument, it found the revised regulation 

arbitrary and capricious because the FEC had failed to justify 

its policy change. Shays III, 508 F. Supp. 2d at 49-52. We 

agree. 

Explaining the new rule, the FEC reasoned that 

“[r]educing the temporal limit to 120 days will not undermine 

the effectiveness of the conduct standards and will not lead to 

circumvention of the Act” because “material information 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 25 of 37
26 

regarding candidate and political party committee campaigns, 

strategy, plans, needs, and activities . . . does not remain 

‘material’ for long periods of time during an election cycle.” 

71 Fed. Reg. at 33,204. The Commission went on to say that 

“a limit of 120 days is more than sufficient to reduce the risk 

of circumvention of the Act.” Id. at 33,205. We see two 

flaws in this rationale. 

First, as the district court pointed out, “the Commission’s 

generalization that material information does not remain 

material for long overlooks the possibility that some

information—for instance, a detailed state-by-state master 

plan prepared by a chief strategist—may very well remain 

material for at least the duration of a campaign.” Shays III, 

508 F. Supp. 2d at 51. Indeed, the Commission’s own 

regulations recognize that some types of information retain 

value for longer than 120 days. For example, the Commission 

says that polling data—arguably the campaign information 

that most quickly becomes obsolete—retains some value for 

180 days. See 11 C.F.R. § 106.4(g). Yet the Commission 

inexplicably asserts that other types of campaign 

information—including some far more durable information 

such as donor lists and lists of supportive voters—will have 

lost value within 120 days. As Shays points out, under the 

FEC’s regulation, a top presidential campaign staffer could 

leave a campaign after an early primary, wait 120 days, and 

then spend the entire general election working for an outside 

group on behalf of his former candidate, using that 

candidate’s donor lists, mailing lists, and long-term strategic 

plan. The Commission never explains why this type of 

coordination should go unregulated. 

Second, the FEC has provided no explanation for why it 

believes 120 days is a sufficient time period to prevent 

circumvention of the Act. Though the Commission certainly 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 26 of 37
27 

has some discretion in choosing exactly where to draw a 

bright line such as this one, it must support its decision with 

reasoning and evidence, for “a bright line can be drawn in the 

wrong place.” Shays II, 414 F.3d at 101. 

Conduct Standard: Firewall Safe Harbor 

When it revised the conduct standard with regard to 

former employees and vendors following Shays II, the FEC 

created a new “firewall safe harbor” provision to protect 

vendors and organizations in which some employees are 

working on a candidate’s campaign and others—separated by 

a firewall—are working for outside groups making 

independent expenditures. Under the new regulation, “[t]he 

conduct standards . . . are not met if the commercial vendor, 

former employee, or political committee has established and 

implemented a firewall that meets the requirements of 

paragraphs (h)(1) and (h)(2) of this section.” 11 C.F.R. 

§ 109.21(h). Those requirements are: “(1) The firewall must 

be designed and implemented to prohibit the flow of 

information between employees or consultants providing 

services for the person paying for the communication and 

those employees or consultants currently or previously 

providing services to the candidate who is clearly identified in 

the communication . . . ; and (2) The firewall must be 

described in a written policy that is distributed to all relevant 

employees, consultants, and clients affected by the policy.” 

Id. According to the regulation, “[t]his safe harbor provision 

does not apply if specific information indicates that, despite 

the firewall, information about the candidate’s or political 

party committee’s campaign plans, projects, activities, or 

needs that is material to the creation, production, or 

distribution of the communication was used or conveyed to 

the person paying for the communication.” Id. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 27 of 37
28 

Shays challenged this regulation, arguing that it was so 

vague as to invite near-certain circumvention, undermining 

BCRA’s purpose, and that the Commission failed not only to 

justify it, but also to explain why it changed its mind after 

rejecting a similar provision in 2003, violating the APA. The 

district court agreed with both arguments. Shays III, 508 F. 

Supp. 2d at 53-56. 

Challenging the district court’s ruling and acknowledging 

that the regulation provides few details on what constitutes an 

acceptable firewall, the FEC argues that “a firewall is more 

effective if established and implemented by each organization 

in light of its specific organization, clients, and personnel.” 

71 Fed. Reg. at 33,206. The Commission emphasizes that 

“[a]n organization cannot come within the firewall safe harbor 

simply by alleging that it has an internal firewall”; rather, 

“[a]n entity seeking to use the firewall safe harbor must be 

‘prepared to provide reliable information . . . about [its] 

firewall, and how and when the firewall policy was 

distributed and implemented.’” Appellant’s Opening Br. 33 

(quoting 71 Fed. Reg. at 33,207). Moreover, the FEC insists, 

it provided a good reason for implementing the safe harbor: to 

make it easier for candidates and independent organizations to 

hire consultants, vendors, and former employees—thus 

facilitating protected speech—without fear of being falsely 

accused of improper coordination. See 71 Fed. Reg. at 

33,206. And it claims it did explain why it has now adopted a 

firewall safe harbor despite rejecting a similar proposal in 

2003, namely in the interim it approved a firewall created by 

EMILY’s List and found it sufficient to protect against 

coordination. See id.; Coordinated Communications: 

Proposed Rules, 70 Fed. Reg. 73,946, 73,955 (2005). 

Though we think this a close question, we agree with the 

FEC. The district court and Shays are undeniably correct that 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 28 of 37
29 

the regulation is vague as to what constitutes an acceptable 

firewall, but “when Congress has not specified the level of 

specificity expected of the agency,” as here, “the agency is 

entitled to broad deference in picking the suitable level.” 

Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 217 (D.C. 

Cir. 2007) (citation omitted). Moreover, “[t]he APA does not 

require that all the specific applications of a rule evolve by 

further, more precise rules rather than by adjudication.” 

Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 96 (1995). 

Thus, there is no “basis for suggesting that the agency has a 

statutory duty to promulgate regulations that, either by default 

rule or by specification, address every conceivable question.” 

Id. Instead, the Commission has authority to flesh out its 

rules through adjudications and advisory opinions. In 

addition, the Commission’s sensible conclusion that firewalls 

will be “more effective if established and implemented by 

each organization in light of its specific organization, clients, 

and personnel,” 71 Fed. Reg. at 33,206, represents just the 

kind of agency expert judgment to which we owe deference. 

See, e.g., North Carolina v. FERC, 112 F.3d 1175, 1189 (D.C. 

Cir. 1997) (“So long as the Commission has examined the 

relevant data and provided a reasoned explanation supported 

by a stated connection between the facts found and the 

choices made, we will defer to the agency’s expertise.” 

(citation omitted)). Shays doubts whether the Commission 

will enforce the safe harbor provision in a way that actually 

requires meaningful firewalls, but as a court reviewing this 

facial challenge we must presume that the Commission will 

enforce its rule in good faith. See Sullivan v. Everhart, 494 

U.S. 83, 94 (1990) (holding that in facial challenges to 

regulations courts must presume agencies will implement 

them in good faith). 

We also believe that the FEC adequately justified the rule 

and its departure from past practice. Hardly contrary to 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 29 of 37
30 

BCRA, the regulation makes it easier for candidates and 

organizations to engage in protected speech by helping them 

hire consultants and employees without fear of false 

accusations of coordination. Moreover, the Commission’s 

favorable experience with the EMILY’s List firewall 

represents a perfectly reasonable basis for its change of heart 

since the 2003 rulemaking. 

III.

As part of its effort to reduce the influence of soft money, 

BCRA requires that all “federal election activity” be paid for 

with either hard money or “Levin funds”—limited 

contributions to state parties specifically earmarked for 

“federal election activity.” See 2 U.S.C. § 441i(b)(2); see also 

Shays II, 414 F.3d at 112-13. The statute defines federal 

election activity as including “get-out-the-vote activity” 

(GOTV activity) and “voter registration activity,” but it leaves 

these terms undefined. 2 U.S.C. § 431(20). In 2003 the 

Commission issued regulations defining GOTV and voter 

registration activity: 

(2) Voter registration activity means contacting 

individuals by telephone, in person, or by other 

individualized means to assist them in 

registering to vote. Voter registration activity 

includes, but is not limited to, printing and 

distributing registration and voting 

information, providing individuals with voter 

registration forms, and assisting individuals in 

the completion and filing of such forms. 

(3) Get-out-the-vote activity means contacting 

registered voters by telephone, in person, or by 

other individualized means, to assist them in 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 30 of 37
31 

engaging in the act of voting. Get-out-the-vote 

activity includes, but is not limited to: 

(i) Providing to individual voters 

information such as the date of the 

election, the times when polling places 

are open, and the location of particular 

polling places; and 

(ii) Offering to transport or actually 

transporting voters to the polls. 

11 C.F.R. § 100.24(a). 

In Shays I, the district court invalidated these definitions 

on procedural grounds. See 337 F. Supp. 2d at 101-07 

(holding that the FEC violated the APA’s notice requirements 

in promulgating these definitions because interested parties 

could not reasonably have anticipated the final rulemakings 

from the notice of proposed rulemaking). “On remand, the 

Commission re-promulgated its regulations defining voter 

registration activity and GOTV activity (with minimal 

alterations to the definition of GOTV activity), and issued an 

expanded [explanation and justification].” Shays III, 508 F. 

Supp. 2d at 63. 

 Shays again challenged the regulation, and the district 

court found that the definitions survived Chevron step one but 

failed Chevron step two because both left unaddressed “vast 

gray area[s]” of possible GOTV and voter registration 

activity, making it possible for state parties to circumvent the 

statute and frustrate BCRA’s purpose. See id. at 63-70. 

According to the district court, the definitions also violated 

the APA because the Commission gave no good reason for 

leaving such large gray areas. See id. at 66, 69-70. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 31 of 37
32 

 Challenging the district court’s ruling, the FEC again 

emphasizes the deference to which it is entitled “when 

Congress has not specified the level of specificity expected of 

the agency.” Cement Kiln, 493 F.3d at 217 (citation omitted). 

We agree with the FEC that its decision to promulgate a 

somewhat vague regulation, in and of itself, runs afoul of 

neither BCRA nor the APA, for there is no “basis for 

suggesting that the agency has a statutory duty to promulgate 

regulations that, either by default rule or by specification, 

address every conceivable question.” Guernsey Mem’l, 514 

U.S. at 96. Thus, the Commission has discretion to leave a 

large gray area and fill it in later through adjudication and 

advisory opinions. That said, we reject the regulation for 

other reasons. 

 As Shays explains, the FEC’s definitions of GOTV 

activity and voter registration activity create “two distinct 

loopholes.” Appellee’s Opening Br. 41. First, both 

definitions require that the party contacting potential voters 

actually “assist” them in voting or registering to vote, 11 

C.F.R. § 100.24(a)(2)-(3), thus excluding efforts that actively 

encourage people to vote or register to vote and dramatically 

narrowing which activities are covered. Second, both 

definitions require the contact to be “by telephone, in person, 

or by other individualized means,” thus entirely excluding 

mass communications targeted to many people. Id. (emphasis 

added). As Shays points out: 

under the Commission’s construction, a state 

party within days of a federal election can send 

out multiple direct mailings to every potential 

voter sympathetic to its cause urging them to 

vote, and can blanket the state with automated 

telephone calls by celebrities identifying the 

date of the election and exhorting recipients to 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 32 of 37
33 

get out to vote, without being deemed to be 

engaged in GOTV activity. Likewise, largescale efforts encouraging potential supporters 

to register to vote and directing them how they 

may do so are not “voter registration activities” 

under the Commission’s definitions. Indeed, 

the more people that a communication is 

intended to reach, and the more money the 

party spends, the less likely it is that the 

communication will be an “individualized 

means” of “assistance” subject to BCRA’s 

restrictions on [federal election activity]. 

Appellee’s Opening Br. 43. These examples are not merely 

hypothetical. In a recent advisory opinion, the FEC decided 

that letters and pre-recorded telephone calls directed to 

registered Democrats in Long Beach, California, encouraging 

them to vote in an upcoming election, did not count as GOTV 

activity because they provided no individualized information 

to any particular recipient. See FEC Advisory Op. 2006-19 

(June 5, 2006). 

 The FEC’s restrictive definitions of GOTV activity and 

voter registration activity run directly counter to BCRA’s 

purpose, and the Commission has provided no persuasive 

justification for them. Indeed, though Shays has not argued as 

much here, we question whether these definitions could even 

survive at Chevron step one, for we doubt whether the 

meaning of GOTV activity and voter registration activity can 

plausibly be limited to individualized assistance. In any 

event, the definitions fail at Chevron step two because they 

conflict with BCRA’s purpose of “prohibiting soft money 

from being used in connection with federal elections.” 

McConnell, 540 U.S. at 177 n.69. The regulation will allow 

the use of soft money for many efforts that influence federal 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 33 of 37
34 

elections, for as the Supreme Court observed in McConnell, 

“[c]ommon sense dictates” that “any efforts [by state or local 

parties] that increase the number of like-minded registered 

voters who actually go to the polls” will “directly assist [a] 

party’s candidates for federal office.” Id. at 167-68. 

Moreover, the only rationales the Commission gave for 

adopting its limited constructions of GOTV activity and voter 

registration activity were: (1) to ensure that mere exhortations 

to get out and vote or register to vote made at the end of a 

political event or speech would not count as federal election 

activity; and (2) to give clear guidance to state and local party 

organizations so they know what activities they can engage in. 

Definition of Federal Election Activity, 71 Fed. Reg. 8,926, 

8,928-29 (2006). The first rationale is unpersuasive. As 

Shays points out, “a definition could surely be crafted that 

would exempt such routine or spontaneous speech-ending 

exhortations without opening a gaping loophole permitting 

state parties to use soft money to saturate voters with 

unlimited direct mail and robocalls that unquestionably 

benefit federal candidates.” Appellee’s Opening Br. 45. And 

the second rationale doesn’t even amount to an argument for a 

limited definition of GOTV activity and voter registration 

activity; instead, it’s an argument for a clear and detailed 

definition. But because any clear definition would satisfy the 

FEC’s goal of providing precise guidance—one that forbade 

any activity designed to get people to register or vote would 

be just as easy to follow as one that allowed unlimited GOTV 

and voter registration efforts—the desire for a clear rule, in 

and of itself, provides no justification for this limited 

definition. 

IV.

The single regulation the district court upheld—as to 

which Shays cross appeals—deals with soft-money 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 34 of 37
35 

solicitations by federal candidates at state party fundraising 

events. BCRA prohibits those seeking or holding federal 

office from “solicit[ing] . . . funds in connection with an 

election for Federal office, including funds for any Federal 

election activity, unless the funds are subject to the 

limitations, prohibitions, and reporting requirements of this 

Act,” i.e., the funds solicited must not be soft money. 2 

U.S.C. § 441i(e)(1)(A). It also prohibits federal candidates 

and officeholders from “solicit[ing] . . . funds in connection 

with any election other than an election for Federal office or 

disburs[ing] funds in connection with such an election unless 

the funds” are hard money or Levin funds. Id. 

§ 441i(e)(1)(B). The statute specifies, however, that 

“[n]otwithstanding” these prohibitions, “a candidate or an 

individual holding Federal office may attend, speak, or be a 

featured guest at a fundraising event for a State, district, or 

local committee of a political party.” Id. § 441i(e)(3). 

Asserting that this latter provision made the statute 

ambiguous, the FEC issued a regulation allowing federal 

candidates and officeholders to solicit soft money at state and 

local party fundraisers. See 11 C.F.R. § 300.64 (“Candidates 

and individuals holding Federal office may speak at [state and 

local party] events without restriction or regulation.” 

(emphasis added)). 

In Shays I the district court found that although the 

regulation survived Chevron review, the FEC had failed to 

provide an adequate justification for it, violating the APA. 

See Shays I, 337 F. Supp. 2d at 92-93. Choosing not to appeal 

this aspect of Shays I, the FEC instead issued a new notice of 

proposed rulemaking, took additional comments, and issued 

the same regulation with an expanded explanation. This time 

the district court found the FEC’s explanation satisfactory. 

See Shays III, 508 F. Supp. 2d at 60-61. Shays now appeals, 

arguing that the regulation violates BCRA and the APA. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 35 of 37
36 

In our view, the regulation fails because it allows what 

BCRA directly prohibits. As noted above, section 

441i(e)(1)(A) expressly prohibits federal candidates and 

officeholders from soliciting soft money, yet the 

Commission’s rule allows federal candidates and 

officeholders to do just that at state and local party 

fundraisers. See Chevron, 467 U.S. at 842 (“If the intent of 

Congress is clear, that is the end of the matter . . . .”). 

Contrary to the Commission’s position, section 

441i(e)(3)—“a candidate or an individual holding Federal 

office may attend, speak, or be a featured guest at a 

fundraising event for a State, district, or local committee of a 

political party”—does nothing to make the statute’s 

prohibition on soft-money solicitations ambiguous. Rather, 

section (e)(3) merely clarifies that despite the statute’s ban on 

soliciting soft money, federal candidates may still “attend, 

speak, or be a featured guest” at state party events where soft 

money is raised, which the statute might otherwise be read as 

forbidding. Indeed, several factors demonstrate that section 

(e)(3) cannot plausibly be read to allow federal candidates to 

solicit soft money at state party events. Most important, when 

Congress wanted to create an exception to the ban on federal 

candidates soliciting soft money, it did so explicitly. Section 

441i(e) contains three express exceptions to section 

(e)(1)(A)’s general prohibition on raising soft money. See 2 

U.S.C. § 441i(e)(2) (allowing candidates for federal office 

who are also candidates for local or state office to solicit soft 

money authorized under state law for their state or local 

campaign); id. § 441(e)(4)(A) (authorizing federal candidates 

to solicit soft money for certain nonprofit groups); id. § 

441i(e)(4)(B) (authorizing candidates to solicit up to $20,000 

per individual to fund state party GOTV and voter registration 

activities). Given these express exceptions, we have no basis 

for reading section 441i(e)(3) as creating an implied fourth 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 36 of 37
37 

exception. “Where Congress explicitly enumerates certain 

exceptions to a general prohibition, additional exceptions are 

not to be implied, in the absence of evidence of a contrary 

legislative intent,” none of which is present here. TRW Inc. v. 

Andrews, 534 U.S. 19, 28 (2001) (citation omitted). 

Moreover, these exceptions expressly allow “solicitation” of 

soft money, yet section 441i(e)(3) says only that federal 

candidates may “attend, speak, or be a featured guest” at state 

party fundraisers. The difference in terminology matters, for 

“Congress’ choice of different verbs to characterize the two 

situations is a choice which we properly take as evidence of 

an intentional differentiation.” Nat’l Insulation Transp. 

Comm. v. ICC, 683 F.2d 533, 537 (D.C. Cir. 1982) (citation 

omitted). This is especially true because Congress repeatedly 

used the term “solicit” and “solicitation” in section 441i—

over a dozen times—yet chose not to do so in section 

441i(e)(3). Reading section 441i(e)(3) as allowing 

solicitation in light of the clear differences between it and 

other sections of the statute that expressly allow solicitation 

“inverts the usual canon that when Congress uses different 

language in different sections of a statute, it does so 

intentionally.” Fla. Pub. Telecomms. Ass’n v. FCC, 54 F.3d 

857, 860 (D.C. Cir. 1995). 

V.

 For the foregoing reasons, we affirm the district court 

with respect to the content standard for coordinated 

expenditures, the rule for when former employees/vendors 

may share material information, and the definitions of GOTV 

activity and voter registration activity. With respect to the 

firewall safe harbor provision and the rule allowing softmoney solicitations at state party events, we reverse and 

remand for further proceedings consistent with this opinion. 

So ordered. 

USCA Case #07-5360 Document #1121529 Filed: 06/13/2008 Page 37 of 37