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      Common Cause v. FEC (94-02104)

Common Cause v. FEC (94-02104) 
 Summary
 Summary

  
  
    On March 29, 1996, the U.S. District Court for the District of Columbia ordered the Commission to reconsider portions of two administrative complaints that had been dismissed. Both had been filed in 1990 by Common Cause and John K. Addy.On March 21, 1997, the U.S. Court of Appeals for the District of Columbia Circuit found that Common Cause lacked standing to litigate certain claims against the Commission, and the court therefore dismissed those claims.BackgroundThe administrative complaints, designated Matters Under Review (MURs) 3087 and 3204, alleged that the National Republican Senatorial Committee (NRSC) and the Montana Republican Party (MRP) had exceeded their contribution and expenditure limits with respect to Conrad Burns's 1988 U.S. Senate campaign and had failed to disclose all the contributions and expenditures that they had made on behalf of the candidate.Under the Act: the MRP's contribution limit for the Burns campaign was $5,000 (2 U.S.C. §441a(a)(2)(A)); the NRSC's contribution limit for the Burns campaign was $17,500 (2 U.S.C. §441a(h)); and the NRSC's 1988 coordinated-party-expenditure limit for the Burns campaign was $92,200 (2 U.S.C. §441a(d)).The FEC's Office of General Counsel investigated the matters alleged in the complaints and found evidence that both committees had erroneously reported certain transactions as transfers, administrative costs or exempt volunteer activities when in fact they were contributions and expenditures made in excess of the Act's limits. Based on this evidence, the General Counsel recommended that the six-member Commission find probable cause to believe that:The NRSC and the MRP knowingly and willfully violated the Act when the NRSC transferred funds to the MRP to pay for direct mail materials promoting the Burns campaign;The MRP violated the Act when it paid the salary of an MRP employee who worked on the Burns campaign;The NRSC violated the Act when it paid for daily polls tracking the progress of the Burns campaign;The NRSC violated the Act when it did not charge the Burns campaign for the development of a list of registered voters; andThe NRSC violated the Act by exercising direction and control over contributions it received in response to a solicitation letter that asked contributors to support Mr. Burns and other Republican candidates, and by not reporting a portion of the solicitation costs as a contribution to the Burns campaign.At least four of the six FEC Commissioners must approve of an action before the FEC can execute it. Fewer than four FEC Commissioners voted to accept the General Counsel's recommendations. After further deliberations failed to yield a compromise, five of the Commissioners voted to close this case without taking any action. Subsequent to having their administrative complaints dismissed, Common Cause and Mr. Addy filed suit.District court rulingThe court stated that it could only order the FEC to reconsider its dismissal of these MURs if it found that the dismissal was arbitrary or capricious or an abuse of discretion. The court reviewed the reasons for the Commissioners' actions, as articulated in their "statement of reasons." The court found that Commissioners on both sides of most of the issues involved in these MURs presented well reasoned explanations for their differing interpretations of federal election law; the court let the Commission's dismissal of these issues stand. The court, however, did not accept the Commission's reasons for dismissing the following issues.MRP payments to mailing vendor. Both the NRSC and the MRP had argued that payments for a direct mailing that promoted Mr. Burns's candidacy were not contributions or expenditures on the candidate's behalf. The MRP had argued that these payments fell under the volunteer activities exemption at 2 U.S.C. §431(8)(B)(x) and were therefore not contributions. The court noted that this exemption only applied when the purchased materials were distributed by volunteers and not by commercial vendors. 11 CFR 100.7(b)(15)(iv) and 100.8(b)(16)(iv). The Commissioners who voted against finding probable cause assumed that the MRP used volunteers to distribute these materials, but the MRP never produced any documentation that showed that volunteers were used. The court therefore ordered the FEC to reconsider its dismissal of this charge.MRP salary payments to Burns campaign worker. MRP employee Ken Knudson was paid a salary by the MRP while he was extensively involved in managing and staffing the Burns campaign. The FEC's General Counsel had determined that the MRP's salary payments to Mr. Knudson constituted contributions to the Burns campaign. The Commissioners who disagreed with this determination reasoned that payments made to field staff who perform a variety of functions for a variety of persons need not be attributed to any one candidate. They based this reasoning on MUR 3218. The court noted, however, that MUR 3218 states that such salary payments would not constitute a contribution to a candidate's campaign "absent evidence that [a committee's] field staff [were] extensively involved in managing or staffing [a] particular campaign on an ongoing basis . . . ." Since this was precisely what Mr. Knudson had been doing for the Burns campaign, the court found the dismissal of this charge to be arbitrary and capricious and ordered the FEC to reconsider this issue.Solicitation costs for earmarked contributions. All of the Commissioners agreed that the NRSC had made a contribution to the Burns campaign when it incurred costs associated with the mailing of a letter that encouraged contributors to earmark their contributions to the Burns campaign, among other Republican campaigns. 11 CFR 106.1(c)(1). However, despite this consensus, the Commission failed to take action on this issue because the Commissioners who originally accepted the General Counsel's probable-cause-to-believe finding refused to separate this issue from the less-clear-cut issue of whether the NRSC had exercised direction and control over these earmarked contributions. In their statement of reasons, these Commissioners explained that they were reluctant to separate these issues because doing so would imply that they rejected the General Counsel's direction-and-control analysis. The court noted that the General Counsel's report made separate recommendations with regard to the direction-and-control issue and the solicitation-costs issue. Therefore, the court reasoned, approving one recommendation did not imply rejecting the other. Based on this reasoning, the court found the Commission's dismissal of the solicitation-costs issue to be arbitrary and capricious. The court ordered the FEC to reconsider its dismissal of this issue.Appeals court rulingThe appeals court rejected all three of Common Cause's theories as to why it had standing to litigate the remaining claims.In order to show standing, a plaintiff must have suffered an injury in fact, or an actual wrong against a legally protected interest, that is traceable to the challenged act and is likely to be redressed by a favorable decision from a court. Organizations may have standing to sue in order to vindicate the rights and immunities it enjoys or, under certain conditions, on behalf of its members. When an organization sues on its own behalf, it must show a concrete injury to its activities with a resulting drain on its resources in order to attain standing. In the case of an organization suing on behalf of its members, the organization must show that its members would otherwise have standing to sue in their own right, that the interests it seeks to protect are germane to the organization's purpose and that neither the claim asserted nor the relief requested requires individual members to participate in the lawsuit.Member standing. The court found that Common Cause was unclear on exactly what "political information" was denied its members. However, in the court's view, the nature of the information was crucial to the injury-in-fact analysis. If the information allegedly withheld was simply that a violation of the Act had occurred, then Common Cause's members did not suffer the type of injury that the court had previously held to be sufficient for standing. To allow a plaintiff to establish the required injury in fact in those circumstances, the court concluded, would be "tantamount to recognizing a justiciable interest in the enforcement of the law. This we cannot do."Organizational standing. The court also said Common Cause itself did not have standing in this case. It found that the organization was asserting an interest in knowing whether the NRSC and MRP had violated the Act's contribution and expenditure limits. Just as this was an inadequate interest to establish standing when Common Cause asserted it on behalf of its members, it was inadequate to establish Common Cause's own standing. The court stated that, in contrast, if Common Cause had asserted "an interest in knowing how much money a candidate spent in an election, infringement of such an interest may constitute a legally cognizable injury." While Common Cause also alleged that the NRSC and MRP had violated the Act's reporting requirements, this was a small part of its complaint. Further, Common Cause asked only for an investigation and, if its allegations were proven, monetary penalties against the two Republican committees. The court specifically noted that Common Cause did not ask for any kind of disclosure of the allegedly undisclosed financial information.Dismissal of complaint. The court also rejected Common Cause's final argument-that it had standing because the FEC had dismissed its complaint in a manner contrary to law. The organization relied on a section of the law that grants any person who has filed an administrative complaint with the FEC the right to seek review in the U.S. District Court for the District of Columbia if the Commission dismisses that complaint. 2 U.S.C. §437g(a)(8)(A). Based on the U.S. Supreme Court's ruling in Lujan v. Defenders of Wildlife[1], the court said that "absent the ability to demonstrate a 'discrete injury' flowing from the alleged violation of FECA, Common Cause cannot establish standing merely by asserting that the FEC failed to process its complaint in accordance with law." Section 437g(a)(8)(A), the court explained, "does not confer standing; it confers a right to sue upon parties who otherwise already have standing." Because Common Cause did not demonstrate an injury as a result of the alleged violations of the Act, it could not assert standing under this provision.FOOTNOTE:[1] Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).Source:   FEC Record— May 1997; and May 1996. Common Cause v. FEC, 108 F.3d 413 (D.C. Cir. 1997).


This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.


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