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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

FEDERAL ELECTION

COMMISSION, 

Plaintiff,

v.

STEPHEN ADAMS,

Defendant.

______________________________

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CASE NO. CV 07-4419 DSF (SHx)

ORDER DENYING DEFENDANT’S

MOTION TO DISMISS PURSUANT

TO FED. R. CIV. P. 12(b)(1) AND

GRANTING PLAINTIFF’S

MOTION FOR PARTIAL

JUDGMENT ON THE PLEADINGS

AS TO CERTAIN AFFIRMATIVE

DEFENSES ALLEGED BY

DEFENDANT

 On July 6, 2007, Plaintiff Federal Election Commission (“FEC”)

brought a Complaint claiming that Defendant Stephen Adams violated two

provisions of the Federal Election Campaign Act of 1971, as amended and codified

at 2 U.S.C. sections 431 through 455 (“Act”). The FEC alleged that during the two

months prior to the November 2004 presidential election, Defendant made a one

million dollar independent expenditure to erect approximately 435 billboards

advocating the reelection of President George W. Bush. The FEC claims that the

manner in which Defendant made his independent expenditure violated two

provisions of the Act. First, pursuant to Section 434(g)(2)(A) of the Act,

Defendant was required to file a disclosure report with the FEC within forty-eight

hours of making the independent expenditure. Second, pursuant to Section

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441d(a)(3) of the Act, Defendant was required to have included a disclaimer on

each billboard that included his name, permanent street address, telephone number,

or web address and a statement that the communication was not authorized by any

candidate or candidate’s committee. 

There are two motions before this Court. On January 14, 2008,

Defendant filed a Motion To Dismiss Pursuant To Fed. R. Civ. P. 12(b)(1)

(“Motion To Dismiss”). Also on January 14, 2008, the FEC filed a Motion for

Partial Judgment on the Pleadings as to Certain Affirmative Defenses Alleged by

Defendant (“Motion for Partial Judgment on the Pleadings”). The Court deems

these matters appropriate for decision without oral argument. See Fed. R. Civ. P.

78; Local Rule 7-15.

Having read and considered the arguments and authorities raised in

the parties’ briefs and submissions, the Court DENIES Defendant’s Motion To

Dismiss and GRANTS Plaintiff’s Motion for Partial Judgment on the Pleadings.

I. FACTS

On or about June 1, 2004, Defendant hired Adams Outdoor

Advertising, Inc. (“AOA”) to design and install approximately 435 billboards for a

multistate outdoor advertising campaign to support the reelection campaign of

President George W. Bush in Michigan, Pennsylvania, Wisconsin, and South

Carolina. (Compl. ¶ 20.) In or about August 2004, AOA and Defendant entered

into a contract for the 435 billboards. (Id.) On or about September 7, 2004,

Defendant wired one million dollars to AOA as payment for the design and

installation of the billboards. (Id. ¶ 21.) AOA is the managing general partner in

Adams Outdoor Advertising Limited Partnership. (Id. ¶ 6.) Defendant owns AOA

Holding Company, which holds a 76% interest in Adams Outdoor Advertising

Limited Partnership. (Id.)

The billboards first appeared on September 7, 2004 and were

displayed through November 2, 2004, the date of the presidential election. (Id. ¶

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22.) The billboards contained one of five different phrases: (1) “Defending Our

Nation”; (2) “It’s About Our National Security”; (3) “A Nation Secure”; (4) “One

Nation Under God”; and (5) “Boots Or Flip-Flops?” (Id. ¶ 23.) Each phrase was

placed on a billboard above the slogan “Bush Cheney 04,” which was

superimposed on an image of the American flag. (Id.) The “Bush Cheney 04”

slogan was substantially similar to the official logo of the Bush-Cheney ‘04

campaign. (Id.) 

On September 28, 2004, the FEC received a sworn complaint from

Mark Brewer of Michigan alleging that certain billboards erected by Defendant

supporting George W. Bush’s reelection campaign violated the Act. (Id. ¶ 7.) On

October 8, 2004, the FEC received a complaint from Dennis Baylor of

Pennsylvania alleging that certain billboards erected by Defendant supporting

George W. Bush’s reelection campaign violated the Act. (Id. ¶ 8.) The FEC

provided copies of the complaints to Defendant. (Id. ¶ 9.) On November 15, 2004,

Defendant submitted a response to the complaints. (Id.) 

On June 21, 2005, Defendant was notified by letter that the FEC, by

an affirmative vote of at least four members, after reviewing the two complaints,

Defendant’s response, and additional information obtained during the normal

course of operations, found reason to believe that Defendant violated two

provisions of the Act. (Id. ¶ 10.) First, the FEC found reason to believe that

Defendant failed to properly disclose his one million dollar independent

expenditure to the FEC, in violation of 2 U.S.C. § 434(g)(2)(A). (Id.) Second, the

FEC found reason to believe that Defendant also failed to include a proper

disclaimer on the billboards indicating that the billboards were not authorized by

President Bush’s reelection campaign in violation of 2 U.S.C. § 441d(a)(3). (Id.)

On March 2, 2006, following an investigation, the general counsel of

the FEC sent Defendant a letter, which stated that he/she was prepared to

recommend that the FEC find probable cause that Defendant violated the above

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provisions of the Act. (Id. ¶ 11.) Defendant was also provided with a document

outlining the general counsel’s position on the factual and legal issues of the case. 

(Id.) Defendant filed a response brief. (Id.) 

On November 8, 2006, after reviewing all the facts, including

Defendant’s response brief, the FEC, by an affirmative vote of at least four

members, found probable cause that Defendant violated the above two provisions

of the Act. (Id.) On November 15, 2006, Defendant was sent a letter documenting

the FEC’s determination along with a proposed conciliation agreement. (Id.)

The FEC then attempted for a period of not less than thirty days to

correct Defendant’s violation by entering into a conciliation agreement through

informal means of conference, conciliation, and persuasion. (Id. ¶ 12.) The FEC

and Defendant were unable to enter into a conciliation agreement. (Id. ¶ 13.) On

May 22, 2007, Defendant was notified that the FEC, by an affirmative vote of at

least four members, authorized the initiation of a civil enforcement suit. (Id.) 

II. LEGAL STANDARD

A. Rule 12(b)(1) Motion

Federal courts “possess only that power authorized by Constitution

and statute, which is not to be expanded by judicial decree.” Kokkonen v. Guardian

Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citation omitted). Consequently, it

is presumed that a federal court lacks jurisdiction unless it is affirmatively

demonstrated that jurisdiction exists. See Gen. Atomic Co. v. United Nuclear

Corp., 655 F.2d 968, 968-69 (9th Cir. 1981). The burden of establishing subject

matter jurisdiction rests on the party advocating its existence. See Cal. ex rel.

Younger v. Andrus, 608 F.2d 1247, 1249 (9th Cir. 1979). Federal courts are to

determine issues of subject matter jurisdiction before considering the merits of a

case. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-95 (1998). 

Therefore, a federal court without jurisdiction over certain claims has no choice but

to dismiss them regardless of their gravity or potential validity. 

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A party challenging a court’s jurisdiction through a Rule 12(b)(1)

motion may do so in one of two ways: (1) on the face of the pleadings or (2) by

presenting extrinsic evidence for the court’s consideration. See White v. Lee, 227

F.3d 1214, 1242 (9th Cir. 2000) (“Rule 12(b)(1) jurisdictional attacks can be either

facial or factual”). 

A facial attack exists when a Defendant argues that the allegations in

the complaint, on their face, are insufficient to invoke federal jurisdiction,

regardless of the factual basis. In resolving a facial attack, the court accepts the

allegations in the complaint as true and will only grant the motion if the plaintiff

failed to allege an necessary element for subject matter jurisdiction. See Haw.

Disability Rights Ctr. v. Cheung, 513 F. Supp. 2d 1185, 1189-90 (D. Haw. 2007).

When analyzing a factual attack a court “may consider the evidence

presented with respect to the jurisdictional issue and rule on the issue, resolving

factual disputes if necessary.” Thornhill Pub. Co. v. Gen. Tel. & Elecs. Corp., 594

F.2d 730, 733 (9th Cir. 1979). Where the jurisdictional issues and substantive

issues are so intertwined that the question of jurisdiction is dependent on the

resolution of factual issues that go to the merits of the case, the jurisdictional

determination should not be made until a motion directed toward the merits of the

action or trial. See Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir.

1983); Thornhill, 594 F.2d at 733-34. 

Unlike a motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(6), the Court is not required to accept all of the nonmoving party’s

factual allegations as true. See Pegasus Satellite Television, Inc. v. DirecTV, Inc.,

318 F. Supp. 2d 968, 975 (C.D. Cal. 2004). Instead, “[t]he district court is not

restricted to the face of the pleadings, but may review any evidence, such as

affidavits and testimony, to resolve factual disputes concerning the existence of

jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988); see

also Ass’n of Am. Med. Colls. v. United States, 217 F.3d 770, 778 (9th Cir. 2000)

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(recognizing that a district court “obviously does not abuse its discretion by

looking to this extra-pleading material in deciding the issue, even if it becomes

necessary to resolve factual disputes”).

B. Rule 12(c) Motion

“Judgment on the pleadings is proper when the moving party clearly

establishes on the face of the pleadings that no material issue of fact remains to be

resolved and that it is entitled to judgment as a matter of law.” Hal Roach Studios,

Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1550 (9th Cir. 1990). The standard

applied to a motion for judgment on the pleadings under Rule 12(c) is

“functionally identical” to the standard applied to motions under Rule 12(b)(6) for

failure to state a claim. Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192

(9th Cir. 1989). Allegations by the nonmoving party must be accepted as true,

while allegations of the moving party that have been denied must be deemed false

for the purpose of the motion. See Hal Roach Studios, 896 F.2d at 1550. The

Court is not required to accept as true “legal conclusions cast in the form of factual

allegations if those conclusions cannot reasonably be drawn from the facts

alleged,” or “merely conclusory, unwarranted deductions of fact, or unreasonable

inferences.” Cholla Ready Mix, Inc. v. Civish, 382 F.3d 969, 973 (C.D. Cal. 2004)

(citation omitted).

Judgment on the pleadings may be granted as to fewer than all of the

claims, or as to part of a claim. See Chi-Mil Corp. v. W.T. Grant Co., 70 F.R.D.

352, 358 (E.D. Wis. 1976) (analogizing to Rule 56). Courts have discretion to

grant a Rule 12(c) motion with leave to amend, and may dismiss causes of action

rather than grant judgment. See Amersbach v. City of Cleveland, 598 F.2d 1033,

1038 (6th Cir. 1979); Lonberg v. City of Riverside, 300 F. Supp. 2d 942, 945 (C.D.

Cal. 2004). 

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III. DISCUSSION

A. This Court Has Subject Matter Jurisdiction

Defendant contends that this Court should dismiss the Complaint on

the grounds that the FEC failed to meet its statutory obligation to make a good

faith effort to conciliate prior to filing suit. The FEC claims that it attempted on

multiple occasions to enter into a conciliation agreement with Defendant. Further,

the FEC argues that in determining whether adequate conciliation attempts were

made, the Court should not review the substance of the negotiations; instead, the

Court should defer to the FEC’s position that the negotiation attempts were made

in good faith. 

Defendant’s motion is a factual, not facial, challenge to the

Complaint. As part of establishing this Court’s jurisdiction, the FEC stated that it

satisfied all jurisdictional requirements prior to filing this action by attempting, for

a period of at least thirty days, to enter into a conciliation agreement with

Defendant. (See Compl. ¶¶ 12, 14.) Defendant challenges the FEC’s claim and

asserts that the FEC did not “fulfill its statutory obligations when it unilaterally

refuse[d] to engage in meaningful conciliation efforts to the potential harm or

prejudice of the defendant.” (Mot. To Dismiss 7:2-4.) Determining whether

conciliation occurred is a prerequisite to filing suit and does not relate to the

underlying allegations. (See Compl. ¶¶ 12-14; Mot. To Dismiss 6:9-19.) As a

result of Defendant’s factual challenge, the Court is not restricted to the facts

pleaded in the Complaint; it may review facts not pleaded in the Complaint to

determine whether subject matter jurisdiction exists. See McCarthy, 850 F.2d at

560; Ass’n of Am. Med. Colls., 217 F.3d at 778. 

As explained below, the Court (1) finds that the FEC satisfied the

Act’s presuit requirements by “attempting” to conciliate with Defendant on at least

three occasions and (2) will defer to the FEC rather than analyze the substance of

any conciliation proposal.

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1. The FEC Made At Least Three Attempts To Enter into a

Conciliation Agreement with Defendant Prior to Filing Suit

The FEC is an independent agency of the United States government

and is charged with the responsibility to administer and ensure compliance with the

Act. See 2 U.S.C. §§ 437c, 437d, 437g. In response to an alleged violation of the

Act, the FEC has the authority to investigate the alleged violation and, when

necessary, to initiate a civil action to enforce the provisions of the Act. See 2

U.S.C. §§ 437c(b)(1), 437d(e). 

After the FEC, by an affirmative vote of at least four members,

determines that there is probable cause to believe that a person has violated the

Act, “the Commission shall attempt, for a period of at least 30 days, to correct or

prevent such violation by informal methods of conference, conciliation, and

persuasion, and to enter into a conciliation agreement with any person involved.” 

2 U.S.C. § 437g(a)(4)(A)(I). The conciliation period is to last “for a period of not

more than 90 days.” Id. Given that Congress intended the Act to encourage

settlement, however, there is nothing in the Act that prevents the parties from

entering into a conciliation agreement finalized more than ninety-days after the

FEC’s finding of probable cause. See FEC v. Nat’l Rifle Ass’n of Am., 553 F.

Supp. 1331, 1341 n.2 (D.D.C. 1983). Only after the mandatory conciliation period

has expired may the FEC file suit. 2 U.S.C. § 437g(a)(6)(A)-(B).

To satisfy the presuit requirements of the Act, the FEC is required to

“attempt” to enter into a conciliation agreement with a defendant. When the Act

was amended in 1980, Pub. L. 96-187, 93 Stat. 1339, Congress changed the FEC’s

duty regarding conciliation. Prior to the 1980 amendment, the FEC was to “make

every endeavor” to reach a conciliation agreement. 2 U.S.C. § 437g(5)(A)(1976);

Pub. L. 93-443, 88 Stat. 1263. In 1980, however, the Act was amended to read that

the FEC “shall attempt . . . to correct or prevent such violation by informal

methods of conference, conciliation, and persuasion.” Pub. L. 96-187, 93 Stat.

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1339; 2 U.S.C. § 437g(a)(4)(A)(I). In other words, the Act requires the FEC to

engage in a negotiation with a defendant, but does not require the FEC to continue

negotiations until a conciliation agreement is reached. See FEC v. Club For

Growth, Inc., 432 F. Supp. 2d 87, 92 (D.D.C. 2006) (finding that the Act “requires

that the FEC come to the conciliation table”); FEC v. Nat’l Rifle Ass’n, 553 F.

Supp. at 1339 (recognizing that the FEC “is not bound to accept a conciliation

agreement which it finds unacceptable or inconsistent with the fair administration

of the Act”). For an adequate “attempt,” the FEC is to provide a defendant with “a

fair opportunity to review and respond to the FEC’s findings” regarding the

activities that comprise the alleged violation. FEC v. Nat’l Rifle Ass’n, 553 F.

Supp. at 1339. 

On November 8, 2007, the FEC determined that there was probable

cause to believe that Defendant violated the Act. (Compl. ¶ 12.) On November 15,

2006, the FEC notified Defendant of the finding of probable cause and provided a

proposed conciliation agreement seeking a civil penalty of $106,000. (Id.; Mot. To

Dismiss Ex. C at 5.) Thereafter, the FEC and Defendant had at least one telephone

conversation to discuss the terms of the proposed conciliation agreement,

specifically the civil penalty. (Mot. To Dismiss Exs. D, E.) On December 14,

2007, after the parties discussed the FEC draft conciliation agreement over the

telephone, Defendant submitted a letter and a proposed revised conciliation

agreement to the FEC, offering to pay $31,000 as a civil penalty. (Id. Ex. D.) On

May 22, 2007, the FEC sent a letter formally rejecting the revised conciliation

agreement. (Compl. ¶ 13; Mot. To Dismiss Ex. E.) After the FEC voted to

authorize the filing of a suit, but before the suit was filed, the parties again

attempted to reach a conciliation agreement. On July 2, 2007, the FEC sent a letter

to Defendant formally rejecting his offer of $56,000. (Pl.’s Opp’n to Def.’s Mot.

To Dismiss Ex. A.)

Despite this sequence of events, Defendant contends that the FEC did

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not properly attempt to conciliate because the FEC did not formally respond to his

revised conciliation agreement in a timely fashion. (See Mot. To Dismiss 10-13.) 

The Court disagrees. Even viewing only the facts presented by Defendant, and not

considering the parties’ attempt to reach a settlement agreement more than ninety

days after the FEC’s finding of probable cause, the facts demonstrate that FEC

attempted on at least two occasions to reach a conciliation agreement. 

First, the FEC sent a conciliation agreement to Defendant with a cover

letter that outlined the conciliation process and stated that if a conciliation

agreement could not be reached after thirty days, the FEC might institute a civil

suit. (Id. Ex. C at 1.) The FEC signaled that it was open to discuss the terms of the

proposed conciliation agreement by inviting Defendant to contact a specific

attorney at the FEC, phone number included, who would explain “the rationale for

the agreement’s proposed civil penalty” and that the FEC “would like to have this

conversation at your earliest convenience.” (Id.) 

Second, after the FEC sent its proposed conciliation agreement, the

FEC and Defendant held a telephone conversation wherein they discussed the

methodology behind calculating the civil penalty. (Id. Exs. D, E.) After speaking

about the FEC’s proposed conciliation agreement, Defendant sent the FEC a

counter-proposal. (See id. Ex. D.)

Defendant contends that a proper attempt at conciliation did not occur

because the FEC did not timely respond to his counter-proposal. For support,

Defendant states that the FEC improperly delayed the conciliation process by

failing to respond to his counter-proposal until “4 months and 1 day (or 121 days)

after timely receipt of proposed conciliation agreement, and 62 days after

expiration of the 90 day maximum conciliation period.” (Id. 10:10-12.) The FEC

does not dispute this point. Instead, the FEC argues that it only had to respond to

Defendant’s counter-proposal “if the agreement were acceptable . . . [and] . . .

silence in response was a rejection of defendant’s counteroffer.” (Pl.’s Opp’n to

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 Both parties have cited cases involving the Equal Employment Opportunity

Commission (“EEOC”) because its conciliation requirement is similar to that of the

FEC. Many courts that have analyzed the Act have also drawn comparisons between

the conciliation requirements of the FEC and EEOC. See e.g., FEC v. Club For

Growth, Inc., 432 F. Supp. 2d at 91.

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Def.’s Mot. To Dismiss 15 n.7.) While the FEC may have intended to reject

Defendant’s counter-proposal, the 121 day delay did not adequately convey that

message. The FEC’s delay may have been bad form; however, it is not sufficient

to deprive the Court of subject matter jurisdiction. 

The FEC satisfied its statutory requirement by attempting to enter into

a conciliation agreement on at least three occasions. 

2. The FEC Is Entitled To Deference as to the Substance of the

Conciliation Process and in Formulating the Specifics of a

Proposed Conciliation Agreement

The FEC is “precisely the type of agency to which deference should

presumptively be afforded,” FEC v. Democratic Senatorial Campaign Comm., 454

U.S. 27, 38 (1981), in part because the FEC is “inherently bipartisan in that no

more than three of its six voting members may be of the same political party . . .

and it must decide issues charged with the dynamics of party politics, often under

the pressure of an impending election.” Id. at 37. In assessing whether the FEC

complied with the statutory requirement to attempt to enter into a conciliation

agreement with a defendant, a court shows high deference to the agency’s action.

See Hagelin v. FEC, 411 F.3d 237, 244 (D.C. Cir. 2005) (citation omitted).

Therefore, this Court follows the circuits and its district court

colleagues that have found that district courts are not to analyze the substance of

the conciliation process; rather, the agency satisfies the statutory requirement to

conciliate if the opposing party has the opportunity to confront all the issues. See

EEOC v. Delight Wholesale Co., 973 F.2d 664, 669 (8th Cir. 1992);1

 EEOC v.

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Keco Indus., Inc., 748 F.2d 1097, 1101-02 (6th Cir. 1984) (“The district court

should only determine whether the EEOC made an attempt at conciliation. The

form and substance of those conciliations is within the discretion of the EEOC as

the agency created to administer and enforce our employment discrimination laws

and is beyond judicial review.”); EEOC v. St. Anne’s Hosp., 664 F.2d 128, 131

(7th Cir. 1981); EEOC v. Zia Co., 582 F.2d 527, 533 (10th Cir. 1978); EEOC v.

Lawry’s Rests., Inc., 2006 WL 2085998, at *2 (C.D. Cal 2006); EEOC v.

Hometown Buffet, Inc., 481 F. Supp. 2d 1110, 1113-14 (S.D. Cal. 2007); United

States v. Cal. Dept. Of Corr., 1990 WL 145599, at *7 (E.D. Cal. 1990).

Accordingly, the Court DENIES Defendant’s Motion To Dismiss.

B. The Court Grants Plaintiff’s Motion for Partial Judgment on the

Pleadings

The FEC seeks dismissal of six of Defendant’s eight affirmative

defenses in the interest of judicial efficiency, to avoid unnecessary discovery, and

for the lack of a valid legal basis. The Defendant claims it is premature to dismiss

any affirmative defenses before adequate discovery has been conducted. The

Court agrees with the FEC and finds that the six challenged affirmative defenses,

as a matter of law, have no valid basis. The discovery of additional facts will not

validate the challenged affirmative defenses. 

The FEC challenges the following:

(1) First Affirmative Defense: “The Federal Election Commission

has failed to satisfy all of the jurisdictional requirements under

the Federal Election Campaign Act of 1971, which are

prerequisites to filing this action.”

(2) Second Affirmative Defense: “This court lacks jurisdiction over

this action because the Federal Election Commission failed to

conciliate this matter with Stephen Adams as required by the

Federal Election Campaign Act, 2 U.S.C. § 437g(a)(4)(A)(I),

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prior to the filing of a lawsuit in federal court.”

(3) Third Affirmative Defense: “The provisions of the Federal

Election Campaign Act of 1971 at 2 U.S.C. § 434(g)(2)(A), are

unenforceable against Defendant Stephen Adams because such

enforcement violates the First Amendment and Due Process

Clause of the United States Constitution.” 

(4) Fourth Affirmative Defense: “The provisions of the Federal

Election Campaign Act of 1971, as amended, at 2 U.S.C. §

434(g)(2)(A) are unenforceable against individuals such as

Stephen Adams for the reasons that this Section has not been

affectively [sic] promulgated or disclosed to the general

public.”

 (5) Fifth Affirmative Defense: “The Federal Election Campaign

Act, at 2 U.S.C. § 437(g)(2)(A) has not been enforced by the

Federal Election Commission against individuals, and it

violates both the First Amendment and the Due Process Clause

of the United States Constitution to selectively enforce this

provision against Stephen Adams.”

(6) Eighth Affirmative Defense: “The Federal Election

Commission is estopped to assert the causes of action contained

in the Complaint against Stephen Adams.”

(Answer 6:20-8:1.) These affirmative defenses can be separated into two basic

categories: (1) the Court lacks jurisdiction because the FEC failed to properly

conciliate with Defendant (Affirmative Defenses One and Two) and (2) the FEC’s

attempt to penalize Defendant for the two alleged violations of the Act violates

Defendant’s rights under the First Amendment and Due Process Clause of the

United States Constitution (Affirmative Defenses Three, Four, Five, and Eight). 

1. Defendant’s Affirmative Defenses One and Two

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Defendant’s first two affirmative defenses echo the arguments

contained in his Motion To Dismiss.

For the reasons previously discussed, the Court GRANTS Plaintiff’s

Motion for Partial Judgment on the Pleadings dismissing Defendant’s Affirmative

Defenses One and Two. 

2. Defendant’s Affirmative Defenses Three, Four, Five, and Eight

The Defendant argues that on the completion of discovery, he will be

able to establish that the disclosure and reporting provisions of the Act violate the

First Amendment and the Due Process Clause of the United States Constitution. 

First, Defendant alleges he will be able to demonstrate that a monetary penalty for

failing to include an adequate disclaimer on the billboards and failing timely to file

a proper disclosure with the FEC violates the First Amendment because he was

engaging in political speech, which is “entitled to the highest protection under the

First Amendment” and that the FEC “may not constitutionally seek to impose a

penalty on Adams for his alleged violation of 2 U.S.C. § 441d(a)(3).” (Def.’s

Opp’n to Pl.’s Mot. for J. on the Pleadings 7:7-8, 19-21.) Second, Defendant

contends that the Due Process Clause has been violated because a penalty may not

be assessed for the violation of a statute when that statute is unknown or violations

are rarely enforced. (Id. at 7:23-26.)

Defendant’s affirmative defenses are ripe for consideration because

the Motion for Partial Judgment on the Pleadings raises only legal issues. 

a. Defendant’s First Amendment Challenge Has Been

Addressed and Rejected by the Supreme Court and the

Ninth Circuit 

To the extent that Defendant’s affirmative defenses rely on the First

Amendment, the defenses must be dismissed. Defendant argues that the maximum

monetary penalty that can be sought by the FEC, calculated using the statutory

formula, for failing to include proper disclaimers on his billboards and timely file

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the appropriate disclosures with the FEC has “extremely serious First Amendment

implications.” (Def.’s Opp’n to Pl.’s Mot. for J. on the Pleadings 7:5.) 

Additionally, Defendant contends that “express advocacy of the re-election of his

preferred candidates for President and Vice President is core political speech

entitled to the highest protect under the First Amendment.” (Id. at 7:6-8.) For

support, Defendant bases his First Amendment argument on Buckley v. Valeo, 424

U.S. 1 (1976), one of the first Supreme Court cases to determine the First

Amendment implications of campaign finance laws. Defendant’s reliance on

Buckley is misplaced.

There, the Supreme Court reviewed a challenge to the

constitutionality of the Act, as amended in 1974. The Court held, inter alia, that

the limitations placed by the Act on campaign expenditures violated the First

Amendment in that they directly restrained the rights of citizens, candidates, and

associations to engage in protected political speech. See Buckley, 424 U.S. at

39-59. More importantly, however, the Court upheld the provisions of the Act that

placed a limit on the contributions that individuals and political committees could

make. The Court reasoned that contribution limits did not directly infringe the

First Amendment freedoms of contributors to express their own political views,

and that such limitations served important governmental interests in preventing the

corruption or appearance of corruption of the political process that might result if

such contributions were not restrained. Cal. Med. Ass’n v. Fed. Elec. Comm’n.,

453 U.S. 182, 193-94 (1981) (citing Buckley). 

Likewise, the Court held that the Act’s disclosure requirements were

constitutional and did not violate the First Amendment. In so finding, the Court

described disclosure requirement as “Congress’ effort to achieve ‘total’ disclosure’

by reaching ‘every kind of political activity’ in order to insure that the voters are

fully informed and to achieve through publicity the maximum deterrence to

corruption and undue influence possible.” Buckley, 424 U.S. at 76 (citation

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omitted). Thus, the Court upheld the Act’s disclosure requirements and found that

it was “narrowly limited” to information that has a “substantial connection with the

governmental interest sought to be advanced” and that the burden is a “reasonable

and minimally restrictive method of furthering First Amendment values by opening

the basic process of our federal election system to public view.” Id. at 81.

Similarly, in FEC v. Furgatch, 807 F.2d 857 (9th Cir. 1987), the Ninth

Circuit held that the Act’s disclosure and disclaimer requirements did not violate

the First Amendment. There, the defendant purchased advertising space in the

New York Times and The Boston Globe and printed a message encouraging

readers to vote against President Carter during the 1980 presidential election. The

FEC brought a civil action against the defendant for failing to report his

expenditures in purchasing the advertisement and failing to include a proper

disclaimer in one of the advertisements. See Furgatch, 807 F.2d at 859. In

rejecting the defendant’s First Amendment argument, the Court concluded that

“the Act’s disclosure provisions serve an important Congressional policy and a

very strong First Amendment interest. Properly applied, they will have only a

‘reasonable and minimally restrictive’ effect on the exercise of First Amendment

rights.” Id. at 862 (quoting Buckley, 424 U.S. at 82). The Court reached its

conclusion after finding that the Act serves two important goals: (1) the “disclosure

requirements, which may at time inhibit the free speech that is so dearly protected

by the First Amendment, are indispensable to the proper and effective exercise of

First Amendment rights” and (2) the “disclosure provision is to deter or expose

corruption, and therefore to minimize the influence that unaccountable interest

groups and individuals can have on elected federal officials.” Id.

The Supreme Court and Ninth Circuit have expressly held that while

provisions of the Act may infringe on some First Amendment freedoms, such

infringement is minimal and reasonable to keep the electorate fully informed about

the source of campaign funds and to deter or expose corruption. Defendant’s First

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Amendment challenge fails.

b. Defendant’s Affirmative Defenses Alleging a Due Process

Clause Violation Fail as a Matter of Law

Defendant’s claim that the Act violates the Due Process Clause rests

on his argument that the FEC is seeking to impose a civil penalty based on a statute

that is not well known or is rarely enforced. (See Def.’s Opp’n to Pl.’s Mot. for J.

on the Pleadings 7:23-27.) To support his contention, Defendant cites only

Diebold, Inc. v. Marshall, 585 F.2d 1327 (6th Cir. 1978). Diebold is inapposite. 

Diebold was fined $190 for violating a safety regulation of the Occupational Safety

and Health Act of 1970. The Administrative Law Judge found that a second

regulation conflicted with and exempted Diebold from the safety regulation and

vacated the penalty. Id. at 1330. The Occupational Safety and Health Review

Commission (“OSHRC”) reversed the Administrative Law Judge and Diebold

brought suit contending that the safety regulation was vague and violated due

process. Id. The court agreed and found that the safety regulation, as applied to

Diebold, constituted a due process violation, for three reasons: (1) the “inartful

drafting” of the safety regulation; (2) the average employer was “unaware” of the

safety regulation; and (3) a “clear majority of Administrative Law Judges had held

[the regulation] inapplicable” as applied to Diebold. Id. at 1336. That court made

it clear that while “none of these factors is particularly compelling on its own, their

cumulative effect is such that we cannot ignore it.” Id. at 1337. Thus, the court

ultimately found that Diebold did not receive constitutionally sufficient warning of

the safety regulation and reversed the OSHRC’s decision. 

Therefore, Diebold stands for the limited proposition that a Due

Process Clause violation may occur when the three specific factors listed above are

present and each factor alone is insufficient to establish a Due Process Clause

violation. See id. Defendant does not claim that all three Diebold factors are

present here. Specifically, Defendant does not make a claim that there was

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“inartful drafting” of the Act; rather, he claims that the Act was not known by the

“members of the affected industry” and “the pattern of administration enforcement

demonstrated that the regulation had not been generally enforced.” (Def.’s Opp’n

to Pl’s Mot. for J. on the Pleadings 5:17-20.) Moreover, the facts in Diebold are

very different than those in the instant case. The issue in Diebold was created by

the existence of a second, conflicting safety regulation, which created much

confusion among members of the industry and administrative law judges. In this

case, Defendant does not contend that there was a second, conflicting provision in

the Act that created similar confusion. 

Additionally, Defendant supports his affirmative defenses by claiming

that “virtually no one was aware of [the disclosure] requirement at the time of the

2004 general election.” (Id. at 8:4-5.) However, Defendant concedes that the

disclosure requirement was adopted in 2002, two years before the 2004 general

election. (See id. at 7:27-8:5.) Given that the requirement was adopted in 2002,

Defendant does not provide any details as to why the disclosure requirement was

not properly promulgated. See Texaco, Inc. v. Short, 454 U.S. 516, 532 (1982)

(noting that in general “a legislature need do nothing more than enact and publish

the law, and afford the citizenry a reasonable opportunity to familiarize itself with

its terms and to comply.”) Defendant also concedes that during the two months

prior to the 2004 general election ten individuals filed the proper disclosure with

the FEC. (See Def.’s Opp’n to Pl’s Mot. for J. on the Pleadings 8:5-8 n.3.) 

Moreover, Defendant fails to present any evidence or argument that

the FEC decided to bring suit based on improper or discriminatory grounds. See

United States v. McWilliams, 730 F.2d 1218, 1221 (9th Cir. 1984) (finding that a

claim for selective prosecution must be based on “an impermissible ground such 

as race, religion, or exercise of the constitutional rights”). Therefore, this Court

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finds that it does not have “statutory authority to review the FEC’s decision to

sue.” FEC v. Legi-Tech, Inc., 75 F.3d 704, 709 (D.C. Cir. 1996). 

Accordingly, the Court GRANTS Plaintiff’s Motion for Partial

Judgment on the Pleadings dismissing Defendant’s Affirmative Defenses Three,

Four, Five, and Eight. 

IV. CONCLUSION

For the reasons stated above, the Court DENIES Defendant’s Motion

To Dismiss and GRANTS Plaintiff’s Motion for Partial Judgment on the

Pleadings. 

IT IS SO ORDERED.

Dated: 3/6/08 ____________________________

 DALE S. FISCHER

 United States District Judge

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