UNITED STAT ES DIS TRICT COURT F OR THE DIS TRICT OF COLUM BIA

) REAR ADM IRAL JAMES CAREY (Re t.), et al. , ) ) ) P laintif fs, )

) v. ) Civil Action No. 11-259 (RMC) ) F EDERAL EL ECTION COMMISSIO N, ) ) Defendan ts. ) )

MEMORAN DUM OP INION Rear A dm. (Ret.) James J . Carey , the National De fense Polit ical Ac tion Commi ttee (“NDPAC”), a nd Kelly S. Eustis filed this suit t og ether with a motion for pre liminary injunction, asking the Court to enjoin the Fede ral Elec tion Com mission (“FEC” or “Commissi on”) f

rom enfor cing2 U.S.C. §§ 441a(a) (1)( C) & 441a (a) (3) a s applied to contributions to NDPAC and independe nt expenditures by NDPAC. The Court g rante d the injunction. See Carey v. F EC , 791 F. Supp. 2d 121 (D.D .C. 2011). Subsequently , the par ties enter ed into a conse nt judgment. As the preva iling par ty , Plaintiffs now move for c osts and attorney s’ fe es under

the Equal Ac cess to Just ice Ac t (“EAJA”), 28 U.S.C. § 2412. The motion will be g rante d in part and de nied in part. I. F ACTS

A. F ederal Elec tion Cam paign Law The F eder al Elec tion Campaign A ct (“ FECA” ), 2 U.S.C. §§ 431 et seq ., inter alia ,imposes limi ts on the source s and amounts of c ontributions that may be made by

individuals and 1 g roups to fede ral c andidates, pa rty committees, and political ac tion committ ees. K ey to assessing these limits is the identity of the re ceive r of those c ontributions and the purpose f or which contributions are expended. I f contributions are direc ted towar d a fe dera l candidate ’s per sonal coff ers, a candidate’s political ac tion committ ee, or a committee of

a political par

ty , they are subject to statutory

limit s beca

use of the “ strongg overnme ntal interest in combatingcorr uption and the a ppear ance there of” a

nd beca use of the “ close re lationship between c andidates a nd parties.” EMILY ’s List v. FEC , 581 F.3d 1, 8- 9 (D.C. Cir. 2009). Section 441a( a)( 1)(C) pr ovides that no person sha ll make contributions “to any other political committee . . . in any cale ndar year which, in the ag g reg ate, e x cee d $5,000.” 2 U.S.C. § 441a(a )(1) (C). Section 441a( a)( 3) provides:

Duringthe per iod which beg ins on J anuar y 1 of an odd- numbere d y ear and ends on D ece mber 31 of the next even-numbere d year , no individual may make c ontributions aggreg atingmore than – (A) $37,500, in the c ase of contributions to candidates a nd the authorized committees of c andidates; (B ) $57,500, in the ca se of a ny other c ontributions, of which not more than $37,500 ma

y be attributable to politi cal c ommitt ees which ar e not politi cal c ommitt ees of national political parties. Id . § 441a(a )(3) . All contributions and expenditures made subjec t to these source and amount limit ations are ref

err ed to as “ hard mone y .” See E MILY ’s List , 581 F.3d at 27. Under §§ 441a(a )(1) (C) & 441a(a )(3) , there is no disti nction made be tween

Under FECA, a contribution is “any

g ift, subscription, loan, advanc e, or de posit of 1 money or any thing of value made by

any person f or the purpose of influenc ing a ny elec tion for Fe dera l office ; or the pay ment by any person of compensa

tion for the per sonal servic es of a nother person whic h are rende red to a political committee without charg e for any purpose.” 2 U.S.C. § 431(8). -2-political committees directly associate d with parties/fe dera l candidate s and non-c onnecte d political action committees. No distinction need be ma de if the non- connec ted political action 2 committee is merely

funnelingits contributions t o fede ral c andidates, the ir persona l politi cal action committees, or political pa rty committees. See E

MILY ’s List , 581 F.3d a

t 24–26. Howeve r, if a non- connec ted political action committee is makingindepende nt expenditures 3 wholly separ ate f

rom fede ral c andidates or parties, the a

naly sis is di ffe rent be cause there is not the same g overnme ntal interest in pre venting corr uption. See id. at 9–11. Rece nt Supreme Court and D.C. Circuit ca ses have partially invalidated statutory provisions within FECA with respec t to lim its placed on c ontributions for independe nt expenditures in fede ral e lection ca mpaig ns. See Citizens United v. FE C , 130 S. Ct . 876 (2010); Speec hNow.org v. FEC , 599 F.3d 686 ( D.C. Cir. 2010); EMILY ’s List , 581 F.3d 1. Contributions for indepe ndent expenditures ar e not limit ed for this purpose and may

be made from a “ g ener al trea sury acc ount that is not subj ect to sourc e and a mount lim its,” otherwise known as soft money

. See E MILY ’s List , 581 F.3d at 27. These c ases he ld that limi ts on soft money contributions used for indepe ndent expenditures ar e unconstitutional beca use such a

limit ation violates a contributor’s F irst Amendment rig ht. See ge nerally Citizens United , 130 S. Ct . 876;

“‘N on-conne cted’ means that the [political action committee] is not a candidate 2 committee, a pa

rty committee, or a

committee established by a cor poration or labor

union.” EMILY ’s List , 581 F.3d at 15 n.7. Independe nt expenditures are “expenditure[s] by a per son – (A) e x pressly

advocating 3 the elec tion or defe at of a clea rly identified ca

ndidate; and ( B) that [are] not made in conce rt or cooper ation with or at the re quest or sug g estion of such c andidate, the candidate’s authorized political committee, or their a g ents, or a political pa rty committee or its ag ents.” 2 U.S.C. § 431(17). -3-Speec hNow.org , 599 F.3d 686; EMILY ’s List , 581 F.3d 1. 4 B. Backgroun d Admiral Care y

is the founder

and tre asure r of ND PAC, a politi cal a ction committee. NDPAC advoc ates limited g overnme nt and enha nced c ommitm ent to Americ an’s veter ans and soldier s. Compl. [ Dkt. 1] ¶ 12. I t raises a nd expends funds “in support of candidates for f

eder al offic e who a

re military

veter ans and a g ree with its values.” Id . NDPAC “make s contributions to candidates f or fe dera l office up to the applicable limitand make s independe nt expenditures in support or opposition of candidates.” Id . Ms. Eustis i s a potential contributor to NDPAC who would like to contribute more than the amount cur rently allowed toward N DPAC’s independe nt expenditures in feder al campaigns. Id . ¶ 13.

On August 11, 2010, Pl aintiffs submitted a re quest for a n advisory

opinion to the Commi ssion. See2 U.S.C. § 437f (specif ying the proce dure f

or re questingadvisory

opinions). They soug ht permission to acce pt unrestricte d donations for indepe ndent expenditures into one

acc ount so long a s contributions to candidates we re ma de and a dminist ere d with restricte d donations from a se parate ac count. On September 17, 2010, FEC issued a dr aft a dvisory opinion, Dra ft A, conc luding that c ontributions to NDPAC made to fina nce inde pendent e x penditures

wer e subjec t to the contribution lim its of 2 U.S.C. § 441a(a)( 1)(C) a nd related re gulations. Compl., Ex . B. Afewday s later, on Septembe r 21, the Commission i ssued an a lternative dr aft advisory opinion, Draft B , concludingthat contributions to NDPAC made to finance independe nt
These c ases a lso found that hard mone y limit s on expenditures that directly support 4 fede ral c andidates, the ir authorized committees, or a ny political committee established and maintained by

a national political par

ty are constitutional. See ge nerally Citizens United , 130 S. Ct. 876; Speec hNow.org , 599 F.3d 686; EMILY ’s List , 581 F.3d 1

. Plaintiffs do not contest the Commi ssion’s authority

to regulate “ha

rd money” under

§ 441a(a )(1) (A) a

nd (B ). -4-expenditures wer e not subject to such limits. C ompl., Ex . C. The Commiss ion failed to appr ove Dra ft A by

a 2-3 vote and fa iled to approve Dra ft B by a 3-2 vote . A binding a dvisory opinion require s at least four

votes. 5 Unable to obtain a

binding a nd favor able a dvisory

opinion, Pl aintiffs filed this suit. Here, the y

alleg ed that §§ 441a( a)( 1)(C) & 441a(a )(3) imposed unconstitutional li mits on amounts an individual may contribute to a non- connec ted political committee such a s NDPAC with respec t to independent expenditures. Plaintiffs disputed the constitutionality of anylimit when those c ontributions are maintaine d separ ately and used f

or indepe ndent fe dera l expenditures. Compl. ¶ 13.

This Court gr anted Plaintiffs’ motion for pr eliminary injunction. See Carey v. FEC , 791 F. Supp. 2d 121 (D.D .C. 2011). FEC had oppose d the re quest for pr eliminary injunction, failing to a

pprec iate bindingprec edent: Citi zens United, 130 S. Ct . 876; Speec hNow.org , 599 F.3d 686; and EMILY ’s List , 581 F.3d 1. Be fore this case wa s ever filed, 6 EMILY ’s List

had cle arly

and explicitly

held, base d on prior Supreme Court prec edent, that soft

There are six commissioners. The sixt h did not vote. 5 The Court noted: 6 This Court is i nstructed a nd bound by

the dec isions of the Supreme Court and the D.C. Circuit Court of Appea ls. The Commiss ion attempts to lim it the scope of the Circuit’s rec ent dec ision in EMILY ’s List

without success. The Circuit’s rulingwas not limit ed to the authority

of the Commission t o issue regulations, as the Commiss ion would posit, butincluded bindingprec edent on the constitutional rights of non- connec ted political committees, which the Commission unpersuasively argues is dicta. Carey , 791 F. Supp. 2d at 129. -5-money

maintained in a se parate ac count was not subjec t to contribution or expenditure limi ts:

First, the Court has he ld that campaign contributions and expenditures constitute “spee ch” w ithin the protection of the F irst Amendment.

. . . . Second, the Court has r uled that Gover

nment cannot limit campaig n contributions and expenditures to achie ve “e qualization” – that is, itcannot restric t the speec h of some so that others mig ht have e qual voice or influence in the elec toral proc ess. In perha ps the most important sentence in the Court’ s entire campa ign f

inance jurisprudenc e, Buck ley [ v. Valeo , 424 U.S. 1, 48-49 (1976)] stated: “[T]he concept that g overnme nt may restric t the speec h of some ele ments of our soc iety

in order to e nhance the re lative voice of others is wholly

fore ign to the Fir st Amendment.”

. . . . Third, the Court has re cog nized a strongg overnme ntal interest in combatingcorr

uption and the appe ara

nce the reof

. . . . This anticorruption intere st is impl icated by

contributions to candidates

. . . .

. . . . Four

th, in applying the anti-cor ruption rationale, the Court has aff orded strong er pr otection to expe nditures by citizens and g roups . . . than it has provided to their contributions to candidate s or par ties.

. . . . Fifth, the Court ha s been somewhat more toler ant of re gulation of forprofit cor porations and labor

unions.

. . . . To sum up so far: In rec onciling the competinginterests, the Supreme Court has g ener ally

approve d statutory

limit s on contributions to candidate s and political parties as c onsistent with the First Amendment. The Court has reje cted expe nditure limit s on individuals, groups, c andidates, a nd parties, e ven thoug h expenditures may

confe r bene fits on candidate s. Carey , 791 F. Supp. 2d at 129-30 (citingEMILY ’s List , 581 F.3d at 5-8) (f ootnotes omitt ed). This Court held that EMILY ’s List square ly applies to NDPAC beca

use both
-6-org anizations are “ hy brid non-prof

its.” Carey , 791 F. Supp. 2d at 130. “E MI L Y’s L ist is a good example of such a hy

brid non-prof

it: I t makes expenditures for adver tisements, ge t-out-the-vote eff orts, and voter

reg istration drives; it also makes direc t contributions to candidates a nd parties.” EMILY ’s List , 581 F.3d at 12. “The c onstitut ional principles that g overn suc h a hy brid non-prof

it entity follow ineluctably

from the we ll-established principles g overningthe other two c ateg ories of non-pr ofits.” Id. This Court ex plained that by maintaining se parate ac counts for ha rd and sof t money , a hy

brid non-prof

it like NDPAC can ra ise and spend unlimited funds for independe nt fede ral e x penditures. Thus, Plaintiffs showed a likelihood of succe ss on the merits, see Carey , 791 F. Supp. 2d at 131-32, a nd satisfied the other

criter ia for a

n injunction. Id. at 132-36. On August 19, 2011, these par ties all ag ree d to a Stipulated Order and Consent J udg ment, which provide s as follows:

1. The c ontribution li mits contained in 2 U.S.C. §§ 441a(a)( 1)(C) & 441a (a) (3), a s well as any implementing r egulations, are unconstitutional as applied to contributions NDPAC rece ives to make indepe ndent expenditures. 2. The Commission s hall not enforc e 2 U.S.C. §§ 441a(a )(1) (C) & 441a (a) (3), a s well as any implementing r egulations, ag ainst Plaintiffs with reg ard to c ontributions NDPAC receive s to make independe nt expenditures, as long as NDPAC maintains separ ate bank ac counts (1) to re ceive such contributions for the purpose of makingindepende nt expenditures, and (2) to r ece ive source - and amount-limited contributions for the purpose of makingcandidate contributions, and as longas ea ch ac count pay s a per centa g e of its administrative expenses that closely corr esponds to the per centa g e of ac tivity

for that a ccount, a

nd complies with the applica ble limits for the sour ce- and amount-limited contributions it rece ives for the purpose of

makingcandidate contributions. Orde r and Judgment [Dkt. 28] at 2-3.

Havingpreva iled, Plaintiffs seek attorne y s’ fe es and c osts pursuant to EAJ A. The

-7-Commi ssion ag ree s to an awa rd of c osts, but opposes an aw ard of fee s, arg uing that its posi tion 7 was substantially

justified. The Commissi on also argues that, eve n if its posit ion is found not to be substantially

justified, the fee s sought a re e x cessive. II. LEGAL STANDARD To qualify

for a n EAJA award, a

plaintiff must establish that he was the pr evailing party ; the burden the n shifts to the gove rnment, which ma y avoid pay

ing a n EAJA award if its position was substantially justified. Id . § 2412(d)( 1). “Substantially justified” means “

justified 8 in substance or

in the main — that is, justi fied to a de g ree that could satisfy a re asonable person.” Piercev. Unde rwood , 487 U.S. 552, 565 (1988) (inter nal quotation marks omitted). An a g ency ’s position i s substantially

justified if it is bot h leg ally and fa ctually

rea sonable. Hill v. Gould , 555 F.3d 1003, 1006 ( D.C. Cir. 2009). The g overnme nt car ries the bur den of showing that the underlying a g ency

action g iving r ise to liti g ation and its liti g ation position were substantially justified. See W

ilkett v. Inte rstate Commerce Comm’n , 844 F.2d 867, 871 ( D.C. Cir. 1988).

Plaintiffs request $350 in costs. Costs are r ecove rable under 28 U .S.C. § 2412(a)(1) and 7 28 U.S.C. § 1920. Bec ause the Commi ssion does not object, these c osts will be awar ded to Plaintiffs. The EAJA provides: 8 [A] court shall aw ard to a preva iling par

ty . . . fee s and other expenses . . . incurre d by

that party

in any civil action . . . including proce eding s for judicial re view of a g ency action, brought by

or ag ainst the United States . . . unless the cour t finds that the position of the United States wa s substantially justified or that specia l circ umstances make an aw ard unjust. 28 U.S.C. § 2412(d)(1)( A). -8-III. ANALYSIS A. The Gove rnm ent’s P osition Was Not Su bstantiall y Justif ied The g overnme nt does not dispute that Plainti ffs qua lify as the pre vailing pa

rty in this li tigation. I nstead, the g overnme nt argues that its positi on was “ substantially justified.” See 28 U.S.C. § 2412(d)(1)( A). The Commi ssion argues that Plaintiffs waived the arg ument that the FEC’s pr elitigation posit ion was not justified beca use Plaintiffs failed to c ite EMILY ’s List in their re quest for a

n advisory

opinion. The Commission poi nts out that in cases whe re a plaintiff 9 complains about an a dminist rative a ction, issues not raised be fore the ag ency are deeme d waived. Opp. [Dkt. 30] at 9 n.3 (c iting Boivil v. U.S. Airways, Inc

. , 446 F.3d 148 ( D.C. Cir. 2006)). Fa ilure to raise an issue, howe ver, is not the same as fa ilure to cite a specific case . Plaintiff did not fail to make a

n argument. They

argued to the F EC that limi ts on soft money contributions used for independe nt expenditures are unconstitutional. Further , the FE C is supposed to be an expert on fede ral e lection law a nd its attorney s are require d to know the cur rent status of e lection law, espe cially

Supreme Court and Circ uit law. The F EC was re sponsible for knowingabout the opinion of the D.C. Circuit in EMILY ’s List , as indee d it did. 1 0

FEC also e rrone ously

contends that two of its commissioners we re r easona ble in believingthe Circuit opinion in EMILY ’s List was not bindingon the ag ency . To the contra ry , EMILY ’s List

is binding pre cede nt in this Circuit, which is wher e Plaintiffs soug ht an advisory 1 1

The Commission does not contend that NDPAC failed to cite EMILY ’s List in this 9 litigation, as the c ase is cited in the Complaint. SeeCompl. ¶ 13. Dra ft B of

the advisory

opinion cites EMILY ’s List

. SeeCompl., Ex . C. 1 0 See I ndustrial T

urnaround Corp. v. NL RB , 115 F.3d 248, 254 ( 4th Cir. 1997) (ag encie s 1 1 must abide by

the law of

a Circuit within the jurisdiction of that court).

-9-opinion; the FEC ignor ed EMILY ’s List , and this liti g ation ensued. Mor eover , when EMILY ’s

List struck down the r egulations at issue there, the Circuit nece ssarily adjudicate d the applicability

of the statutory

provisions from which the r egulations derived. The D.C. Circuit held that “a

non profit that makes e x penditures a nd makes c ontributions to candidates” is “entitled to make the ir expenditures . . . out of a[n] account that is not subject to source a nd amount limit ations.” 581 F .3d at 12. EMI L Y’s L ist is a non-aff iliated org anization justlike NDPAC. The opinion is determinative of this case. B eca

use the Commission has failed to show that its posit ion was substantially justified in the fac e of this direc tly -applica ble and binding decision, Plaintiffs are entitled to attorney s’ fe es under EAJA. B. Am ount of

Attor neys’ F ees Plaintiffs seek $141,253.03 in fe es for the work of

four attorney s: Dan B acke r, Stephen Hoer sting, B enjamin B arr , and Allen Dic kerson. Mr. D icker son billed 30.5 hours, at the rate of $181.37 per

hour. Mr. B acke r billed 304.75 hours throug h the time of filingthe fe e petition, plus 15.5 for the reply in support of the fe e petition, at the same rate , $181.37 per hour

. Mr. B arr billed 99.5 hours, plus 14.75 hours for the r eply , at the rate of $200 pe r hour. Mr. Hoer sting billed 204.5 hours, plus 13.25 for the reply , at the rate of $250 pe r hour.

The F EC contends that the full amount of f ees sought – $141,253.03 – is excessive bec ause the case only proce eded thr oug h preliminary injunction, not through trial. The FEC ig nores the f

act that ND PAC should nothave ha d to file this suitat all. Plaintiffs sought a n advisory opinion in li ne with the rulingin EMILY ’s List and whe n the FE C failed to provide one , this case e nsued. In addition to filing the c omplaint, Pl aintiffs filed a motion for a pre liminary injunction and a motion to stay discovery . The motions were contested; Plaintiffs pre vailed on

-10-both. Plainti ffs have now f iled a fe e petition, which has be en opposed. The number of attorney hours billed was re asonable for the w ork that this case require d.

The Commission also contends that emails and conf ere nces a mong c ounsel for NDPAC should not be billed. But Plaintiffs’ counsel we re justified in coor dinating a rguments and litigation strateg y . The F EC assails Plainti ffs’ la wy ers f or alleg edly

not exercising “ billing judgme nt.” Havingrevie wed the a ffidavits and billing rec ords, the Court disag ree s and finds the hours billed to be re asonable

.

C. Hourly Rate The hourly

rate at which attorney s’ fe es ca n be re cover ed under

§ 2412(d)( 1)(A) is $125 unless a cour

t determines that “ an incr ease in the cost of living or a spec ial fac tor, such as the limited availability

of qualified a

ttorney s for the pr ocee ding involved, justifies a highe r fe e.” 28 U.S.C. § 2412(d)(2)( A). B eca use the statutory

cap w as set year s ag o, in 1996, courts routinely approve cost-of- living adjustments. Role Mode ls Am., Inc. v . Brownlee , 353 F.3d 962, 969 ( D.C. Cir. 2004). As adjusted for cost of living, the standard $125 r ate is now $181.37 pe r hour. The Commi ssion does not contest this rate. SeeOpp. at 21 n.6. Thus, the Plaintiffs counse l shall be compensated at the r ate of $181.37 per hour

. Plaintiffs assert that Messrs. B arr ($200/hour) a

nd Hoer sting ($250/hour) should be compe nsated at even hig her r ates unde r the “ specia l fac tor” languag e of § 2412( d)(2) (A). Plaintiffs base their r equest on these lawyers’ specia l expertise in election and c ampaign financ e law. B ut the D.C. Circuit has reje cted the c laim that campaign financ e and e lection law experience qualifies counse l for an e nhance d fee under EA J A. See I n re Seale d Case , 254 F.3d 233, 235-36 (D.C. Cir. 2001) ( denying r equest for enhanc ed fe e in elec tion law case ). In order to
-11-qualify

for a highe r fe e under

EAJA, counsel must show “an identifiable pr actice specia lty such as pate nt law, or knowle dg e of f oreign law or la

nguag e.” Id . at 235. The Circ uit noted that “[a]lt houg h fede ral e lection law ‘ involves a complex statutory and re gulatory

fra mework, the field is not beyond the g rasp of a compe tent prac ticing attorney with acc ess to a law libra ry and the other a ccoutr ements of moder n leg al pra ctice.’ ” Id . at 236 (quoting Chynoweth v. Sullivan , 920 F.2d 648, 650 ( 10th Cir. 1990)). Counsel is not entitl ed to enha nced r ates unde r the spec ial fac tor exception “base d solely on expertise the lawyer a cquire d throug h prac tice in a spe cific a rea of administrative law .” Selec t Milk Produce rs, Inc. v . Johanns , 400 F.3d 939, 950- 51 (D.C. Cir. 2005). Attorney s who prac tice administrative law develop a

n expertise in a par

ticular re gulated industry , and they

ordinarily

g ain the expertise fr om prac tice and not f rom training

. Id . Be cause nothing in the EA J A sug g ests that Congr ess intended to make all counsel who pr actice administrative law in a te chnica l field elig ible for a fee enhanc ement, expertise ac quired through prac tice is not deeme d to be a spe cial fa ctor wa rra nting f ee e nhance ment. Id . (citing F.J. Vollmer Co. v. Magaw , 102 F.3d 591, 598- 99 (D.C. Cir. 1996)).

Plaintiffs contend that enha nced r ates a

re now justified due to new c omplex ity in elec tion law — that the re cent c hang es in the law ha ve made the field obscur e and dif ficult to master. SeeReply

[Dkt. 33] at 19. Plaintiffs arg ue that the spe cialized prac tice bar for e lection and ca mpaig n financ e law r equire s more than a n expertise in administrative law and a n understandingof the re gulations. They contend: [P ]ractitioners must be grounded in a n obscure and re latively unprac ticed ar ea of

constitutional law; they

must understand the complicated ma ze of fede ral a dministrative la w; and they

must share a wor

king know ledg e of the incre dibly intricate ope ration of campa ign f

inance as it applies on-the- g round to political parties,

-12-speake rs, g rassroots org anizations, and policy g roups. Id . at 18-19. This may

be so, but the Court is not convinced that e lection and c ampaign financ e law has c hang ed so dra

matically that binding Circuit pre cede nt can be ignor ed. Ac cording ly , the reque st for enha

nced hour ly

rate s will be denied. IV. CONCLUSION For the re asons stated, the Court will g rant in par t and deny

in part Plaintiffs’ motion for attorney s’ fe es and c osts [ Dkt. # 29]. C osts will be awar ded in the amount of $350. Attorney s’ fe es may

be re cover ed at the r ate of $181.37 per hour . No later than J une 4, 2012, Plaintiffs shall file a re vised aff idavit of fee s, toge ther with a pr oposed orde r aw ardingfee s, in

acc ordanc e with this Opinion. A memorializi ngOrde r ac companies this Memora ndum Opinion.

DATE: May

22, 2012 /s/ ROSEMARY M. COL L YER United States District J udg e

-13-