IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEBRASKA

ROBERT C. MCCHESNEY, in his official 

capacity as Treasurer of Bart McLeay 

for U.S. Senate, Inc.; and BART 

MCLEAY FOR U.S. SENATE, INC.,

Plaintiffs, 

v. 

MATTHEW S. PETERSEN, in his official 

capacity as Chair of the Federal 

Election Commission; FEDERAL 

ELECTION COMMISSION; and UNITED 

STATES OF AMERICA,

Defendants.

8:16CV168

AMENDED

MEMORANDUM AND ORDER

This matter is before the Court on the Motions to Dismiss filed by Defendants 

Federal Election Commission (the “Commission”) and Matthew S. Petersen

(“Petersen”), ECF No. 21, and the United States of America, ECF No. 25. Plaintiffs have 

moved to dismiss their claims against the United States without prejudice. Accordingly, 

their Notice of Dismissal, ECF No. 28, will be approved and Defendant United States of 

America will be dismissed. For the reasons stated below, the Motion filed by the 

Commission and Petersen will be granted.

BACKGROUND

Because this case turns on the Commission’s interpretation of federal 

administrative and election law, a discussion of the statutory and regulatory scheme 

involved is helpful to an understanding the nature of Plaintiffs’ claims. The Court will 

also summarize the promulgation and administration of the relevant fine program at 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 1 of 27 - Page ID # 321
2

issue. Finally, the Court will provide background regarding how the statutes, 

regulations, and fine program were applied to Plaintiffs.

I. FECA and its Enforcement 

a. The Commission and FECA Enforcement in General

The Commission is an independent agency of the United States government with 

exclusive jurisdiction over civil enforcement of the Federal Election Campaign Act of 

1971, as amended, 52 U.S.C. § 30101, et seq. (“FECA”). See 52 U.S.C. §§ 

30106(b)(1), 30107(a), 30109. The Commission is composed of six Commissioners, 

including Defendant Petersen, who currently serves as Chairman. Under FECA, if at 

least four Commissioners find “reason to believe” that a FECA violation has occurred, 

the Commission’s General Counsel may conduct an investigation, leading to a 

recommendation as to whether there is “probable cause to believe” a violation has 

occurred. 52 U.S.C. § 30109(a)(1)-(3). If at least four Commissioners then find probable 

cause exists, the Commission must attempt to resolve the matter by “informal methods 

of conference, conciliation, and persuasion, and to enter into a conciliation agreement” 

with the respondent. 52 U.S.C. § 30109(a)(4)(A)(i). If the Commission is unable to 

resolve the matter through voluntary conciliation, the Commission may file a de novo 

civil suit to enforce the Act in federal district court. 52 U.S.C. § 30109(a)(6).

b. Political Committees and “48 Hour” Disclosure Reports

FECA requires political committees to designate a treasurer to maintain the 

committee’s financial records. See 52 U.S.C. § 30102(a)-(d). The term “political 

committees” as used in FECA, includes candidate campaigns, political parties, and 

other political organizations. See 52 U.S.C. § 30101(4)-(6). Under FECA, the treasurer 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 2 of 27 - Page ID # 322
3

must sign and file periodic reports on behalf of the political committee, including reports 

regarding the committee’s receipts and disbursements. 52 U.S.C. § 30104(a)-(b). 

These reports must be filed in compliance with the schedule established in FECA and 

its implementing regulations. See 52 U.S.C. § 3010411(a)(11), (b); 11 C.F.R. § 

104.14(d). Reports for the principal campaign committee of a candidate for the office of 

U.S. Senator must be filed with the Secretary of the Senate. 52 U.S.C. § 30102(g); 11 

C.F.R. § 105.2. 

Section 30104(a)(6)(A) requires principal campaign committees to report in 

writing any contribution of $1,000 or more received by the committee after the 20th day, 

but more than 48 hours before, any election. Such notifications “shall be made within 48 

hours after the receipt of such contribution and shall include the name of the candidate 

and the office sought by the candidate, the identification of the contributor, and the date 

of receipt and amount of the contribution.” 52 U.S.C. § 30104(a)(6)(A). 

c. The Administrative Fines Program 

In 1999, Congress amended FECA to create an enforcement system for 

violations of the periodic filing requirements. See Treasury Postal Serv. and General 

Government Appropriations Act, 2000, Pub. L. No. 106-58, § 640, 113 Stat. 430, 476-

477 (1999) (codified at 52 U.S.C. § 30109(a)(4)(C)). Congress authorized the 

Commission to directly assess civil money penalties for violations of 52 U.S.C. § 

30104(a), including violations of the deadlines for political committees’ disclosure 

reports. Pursuant to this authority, after the Commission finds reason to believe a 

political committee and its treasurer have failed to file a report within the established 

deadlines, the Commission may:

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 3 of 27 - Page ID # 323
4

require the person to pay a civil money penalty in an amount determined 

under a schedule of penalties which is established and published by the 

Commission and which takes into account the amount of the violation 

involved, the existence of previous violations by the person, and such 

other factors as the Commission considers appropriate. 

52 U.S.C. § 30109(a)(4)(C)(i)(II). A respondent who objects to the Commission’s

imposition of an administrative fine may seek judicial review of the Commission’s

determination in federal district court “by filing in such court . . . a written petition 

requesting that the determination be modified or set aside.” 52 U.S.C. § 

30109(a)(4)(C)(iii).

In 2000, the Commission promulgated regulations establishing the procedures 

that apply to administrative fine matters and the schedules of penalties authorized by 52 

U.S.C. § 30109(a)(4)(C)(i)(II). See Administrative Fines, 65 Fed. Reg. 31,787 (May 19, 

2000) (“May 2000 Administrative Fines Rule”); 11 C.F.R. §§ 111.43(a)-(c), 111.44. 

These civil penalty schedules contained factors to consider when assessing a penalty, 

including whether the untimely report was election sensitive, how late it was filed, the 

dollar amount of the receipts and disbursements involved, and the number of prior 

violations by the respondent. See 11 C.F.R. § 111.43(a)-(c). The regulation formulas 

established specific penalties for 48-hour notices. 11 C.F.R. § 111.44(a)(1). Under § 

111.44(a)(1) the current civil penalty for each untimely 48-hour notice is $137 plus ten 

percent of the “amount of the contribution(s) not timely reported.”

When the Commission determines that it has “reason to believe” that a 

respondent has violated 52 U.S.C. § 30104(a), the Commission notifies the respondent 

of the Commission’s finding, including the proposed civil money penalty. 11 C.F.R. § 

111.32. Upon receipt of this notification, the respondent may either pay the penalty, 11 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 4 of 27 - Page ID # 324
5

C.F.R. §§ 111.33-111.34, or challenge the finding and/or the penalty by filing a written 

response within 40 days of the date of the Commission’s finding. 11 C.F.R. § 111.35(a), 

(e). The written response must assert one of three possible grounds for such a

challenge: (1) factual errors in the Commission’s finding; (2) inaccurate calculation of 

the penalty; or (3) a showing that the respondent used “best efforts” to file in a timely 

manner but was prevented from doing so by “reasonably unforeseen circumstances . . . 

beyond the respondent’s control,” and the respondent filed the report no later than 24 

hours after such circumstances ended. 11 C.F.R. § 111.35(b)(1)-(3).

Timely filed responses challenging the Commission’s reason-to-believe finding 

are reviewed by a Commission “Reviewing Officer.” 11 C.F.R. § 111.36(a). The 

Reviewing Officer submits a written recommendation to the Commission, that is also 

provided to the respondent. 11 C.F.R. § 111.36(e), (f). The respondent may file a written 

response to the recommendation within ten days, but generally may not raise new 

arguments beyond those in the original written response. 11 C.F.R. § 111.35(f). 

After receiving the Reviewing Officer’s recommendation and any timely additional 

response from the respondents, the FEC makes a final determination by an affirmative 

vote of at least four Commissioners as to whether the respondent violated 52 U.S.C. § 

30104(a), and, if so, the amount of the civil penalty. 11 C.F.R. § 111.37. The reasons 

provided by the Reviewing Officer for the recommendation serve as the reasons for the 

Commission’s action, unless otherwise indicated by the Commission. 11 C.F.R. § 

111.37(d). 

The respondent then has 30 days in which to petition for the judicial review 

authorized by 52 U.S.C. § 30109(a)(4)(C)(iii). Judicial review is limited to the issues 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 5 of 27 - Page ID # 325
6

and facts raised before the Commission during the administrative proceeding. 11 C.F.R. 

§ 111.38.

d. Modifications to the Administrative Fines Program

The amendments to FECA in 1999 that created the Administrative Fines 

Program initially applied to violations occurring between January 1, 2000, and 

December 31, 2001. Extension of Administrative Fines Program, 79 Fed. Reg. 3302-01

(Jan. 21, 2014) (to be codified at 11 C.F.R. Part 111). Congress later extended the 

Commission’s statutory authority for the Administrative Fines Program several times,

including, most recently, in December 2013. In December 2013, Congress extended

the Administrative Fines Program through December 31, 2018. See Act of Dec. 26, 

2013, Pub. L. No. 113–72, § 1 (referred to herein as the “2013 Congressional 

Extension”). Relevant to this case, the civil penalty formula under the Administrative 

Fines Program for untimely 48-hour notices was first established in May 2000. 

Administrative Fines, 65 Fed. Reg. 31,787 (Friday, May 19, 2000). The civil penalty 

formula has been adjusted once, in 2005, to its current amount. See Inflation 

Adjustments for Civil Monetary Penalties, 70 Fed. Reg. 34633, 34636 (June 15, 2005) 

(“June 2005 Inflation Adjustment”) (adjusting civil penalty formula for 48-Hour Notices 

that are not timely filed as “$110 + (.10 x amount of the contribution(s) not timely 

reported”)). 

Before the 2013 Congressional Extension, the Commission's regulations 

implementing the Administrative Fines Program, 11 C.F.R. § 111.30, specified the end 

date of the program. Each time Congress has extended the statute that authorizes the 

Administrative Fines Program, the Commission revised the end date in § 111.30. 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 6 of 27 - Page ID # 326
7

However, in response to the 2013 Congressional Extension, the Commission revised §

111.30 to state that the Administrative Fines Program applied to reporting periods that 

“end on or before the date specified in 2 U.S.C. § 437g(a)(4)(C)(v).” See Extension of 

Administrative Fines Program, 79 Fed. Reg. 3,302-01 (January 21, 2014) (referred to 

herein as the “2014 Regulatory Extension”). The Commission also deleted 11 C.F.R. § 

111.41, an administrative provision requiring that fines be paid by check or money 

order. Id. These were the only changes made to the implementing regulations in the 

2014 Regulatory Extension.

Because the Commission made changes to the regulations without notice or 

opportunity to comment, it provided an explanation of its reasoning contemporaneous 

with the changes to the regulations. In its explanation, the Commission first noted that 

because Congress did not enact the most recent statutory extension until December 

2013, “there [was] a short gap between the end date of the Commission’s current 

regulations and the effective date of this final rule on January 21, 2014.” Id. The 

Commission directed that “[r]eports covering reporting periods that end during this gap 

are not subject to the [Administrative Fines Program]; they are instead subject to the 

Commission’s enforcement procedures set forth at 11 CFR part 111, subpart A.” Id. 

(citing 11 CFR 111.31(a)).

The Commission further explained that it implemented the 2014 Regulatory 

Extension of the Administrative Fines Program “without advance notice or an 

opportunity for comment because [the extension] falls under the ‘good cause’ exemption 

of the Administrative Procedure Act.” Id. (citing 5 U.S.C. § 553(b)(B)) (permitting 

agencies to dispense with the notice and comment period when “impracticable, 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 7 of 27 - Page ID # 327
8

unnecessary, or contrary to the public interest.”). The Commission concluded that its 

action fell within the good cause exception because “this final rule merely extends the 

applicability of the existing [Administrative Fines Program] and deletes one 

administrative provision; the final rule makes no substantive changes to the 

[Administrative Fines Program].” Id. The Commission further explained that the 2014 

Regulatory Extension “[fell] within the ‘good cause’ exception to the delayed effective 

date provisions of the Administrative Procedure Act and the Congressional Review Act.” 

Id. Thus, the Commission concluded that the final rule “[would be] effective upon 

publication in the Federal Register.” Id. (citing 5 U.S.C. §§ 553(d), 808(2)).

II. Challenge in This Case

Plaintiff McLeay Committee is the principal campaign committee of Bartholomew 

L. McLeay, who was a candidate in the United States Senate primary election in 

Nebraska on May 13, 2014. ECF No. 1, Compl. ¶ 2; Page ID 1. Plaintiff Robert C. 

McChesney was the Treasurer of the McLeay Committee. Id. ¶¶ 1, 2; Page ID 1-2.

In connection with that election, Plaintiffs were required to file 48-hour notices for 

contributions and loans of $1,000 or more received between April 24 and May 10, 2014. 

52 U.S.C. § 30104(a)(6)(A); 11 C.F.R. § 104.5(f). On June 29, 2015, the Commission

notified Plaintiffs that the Commission had reason to believe that Plaintiffs violated 

FECA by failing to file 48-hour reports for several contributions. Compl. ¶ 29, Page ID 

11; ECF No. 21-3, Page ID 82. Specifically, the Commission alleged that Plaintiffs did 

not timely file 48-hour notices for fourteen contributions received between April 24 and 

May 9, 2014, totaling $112,425.06. Compl. ¶ 29, Page ID 11; ECF No. 21-3, Page ID 

82, 86. In its notification, the Commission made a preliminary determination that a civil 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 8 of 27 - Page ID # 328
9

penalty of $12,122 should be assessed for such violations, based on the penalty 

formula set forth at 11 C.F.R. § 111.44. ECF No. 21-3, Page ID 82. The Commission’s 

notice designated the penalty as an Administrative Fine (“AF”). Compl. ¶ 29, Page ID 

11; ECF No. 21-3, Page ID 82.

On July 31, 2015, Plaintiffs provided written responses to the Commission, 

asserting that the proposed civil penalty was not based on an authorized schedule of 

penalties lawfully established by the Commission. Therefore, according to Plaintiffs, the 

48-hour notice reporting requirements did not apply to the candidate loans at issue, and 

an alternative method of calculating the proposed civil penalty would have been 

preferable. Compl. ¶ 30, Page ID 11-12; see also ECF No. 21-4, Page ID 87-95.

The Commission’s Reviewing Officer, Rhiannon Magruder (“Magruder”), 

reviewed Plaintiffs’ responses and made her recommendation to the Commission on 

September 29, 2015. Compl. ¶ 30, Page ID 11-12; see also ECF No. 21-4, Page ID 87-

95. Magruder concluded that Plaintiffs failed to comply with eight separate 48-hour 

notice deadlines and the candidate’s unreported loans were appropriately included in 

calculating Plaintiffs’ civil penalty. ECF No. 21-5, Page ID 97-101. She further 

concluded that the Commission’s preliminary civil penalty calculation of $12,122 was 

correct, and that Plaintiffs failed to challenge the Commission’s reason-to-believe 

determination and preliminary civil penalty calculation on the basis of any of the 

permissible grounds identified in the Commission’s regulations. Id. (citing 11 C.F.R. § 

111.35(b)). Magruder therefore recommended a final determination of Plaintiffs’ 

reporting violation and assessment of civil penalty. ECF No. 21-5, Page ID 101.

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 9 of 27 - Page ID # 329
10

On October 9, 2015, Plaintiffs filed a response and reiterated, among other 

things, Plaintiffs’ view that the schedule of penalties at 11 C.F.R. § 111.44 had not been 

“lawfully established by the Commission.” Compl. ¶ 32, Page ID 12; ECF No. 21-7, 

Page ID 130.

On March 21, 2016, the Commission adopted the Reviewing Officer’s Final 

Determination Recommendation, and concluded that Plaintiffs failed to demonstrate that 

a factual error had been made in the reason-to-believe finding, that the penalty was 

miscalculated, or that they used best efforts to file on time. Compl. ¶ 33, Page ID 12; 

ECF No. 21-8, Page ID 177-78, 181-83. The Commission also concluded, based on 

guidance from the Commission’s Office of General Counsel incorporated by reference 

in the Final Determination Recommendation, that the schedule of penalties was lawfully 

established. ECF No. 21-8, Page ID 178, 186-89. The Commission thus made a final 

determination that plaintiffs violated 52 U.S.C. § 30104(a) and assessed a $12,122 civil 

penalty. Compl. ¶ 33, Page ID 12; ECF No. 21-8, Page ID 177-78.

Plaintiffs allege that the Commission could not impose the monetary fine 

because the Commission failed to establish a valid penalties schedule. According to 

Plaintiffs, the determinative issue in this action is whether the Commission “established” 

the penalties schedule in accordance with the law in order to have the legal authority to 

impose the fines it assessed on Plaintiffs. 

STANDARDS OF REVIEW

I. Federal Rule of Civil Procedure 12(b)(6)

A complaint must contain “a short and plain statement of the claim showing that 

the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To satisfy this requirement, a 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 10 of 27 - Page ID # 330
11

plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” 

Corrado v. Life Inv'rs Ins. Co. of Am., 804 F.3d 915, 917 (8th Cir. 2015) (quoting Bell 

Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility 

when the plaintiff pleads factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Barton v. Taber, 820 

F.3d 958, 964 (8th Cir. 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009)). 

“Threadbare recitals of the elements of a cause of action, supported by mere conclusory 

statements, do not suffice.” Zink v. Lombardi, 783 F.3d 1089, 1098 (8th Cir. 2015) 

(quoting Iqbal, 556 U.S. at 678), cert. denied, 135 S. Ct. 2941 (2015). The complaint’s 

factual allegations must be “sufficient to ‘raise a right to relief above the speculative 

level.’” McDonough v. Anoka Cty., 799 F.3d 931, 946 (8th Cir. 2015) (quoting Twombly, 

550 U.S. at 555). The Court must accept factual allegations as true, but it is not required 

to accept any “legal conclusion couched as a factual allegation.” Brown v. Green Tree 

Servicing LLC, 820 F.3d 371, 373 (8th Cir. 2016) (quoting Twombly, 550 U.S. at 555). 

Thus, “a pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the 

elements of a cause of action will not do.’” Ash v. Anderson Merchandisers, LLC, 799 

F.3d 957, 960 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at 678), cert. denied, 136 S. Ct. 

804 (2016).

On a motion to dismiss,1courts must rule “on the assumption that all the 

allegations in the complaint are true,” and “a well-pleaded complaint may proceed even 

 

1

Both parties submitted matters outside the pleadings in support of their positions. The 

Commission produced correspondence regarding its decision to fine Plaintiffs. Although the Court has 

considered this correspondence between the parties, the letters were expressly referenced in the 

Complaint and thus are not “matters outside the pleading” such that the Court must convert this Motion 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 11 of 27 - Page ID # 331
12

if it strikes a savvy judge that actual proof of those facts is improbable, and “‘that a 

recovery is very remote and unlikely.’” Twombly, 550 U.S. at 555-56 (quoting Scheuer 

v. Rhodes, 416 U.S. 232, 236 (1974)). “Determining whether a complaint states a 

plausible claim for relief...[is] a context-specific task that requires the reviewing court to 

draw on its judicial experience and common sense.” Mickelson v. Cty. of Ramsey, 823 

F.3d 918, 923 (8th Cir. 2016) (alternation in original) (quoting Iqbal, 556 U.S. at 678).

II. Review of Final Agency Decision

Plaintiffs characterize this action as an “administrative appeal of a federal agency 

action.” ECF No. 27, Pl. Br., Page ID 211. A court may review a final federal agency 

action, decision, or conclusion under the Federal Administrative Procedures Act 

(“APA”), 5 U.S.C. § 706(2). Under the APA, a reviewing court can set aside an agency 

decision where the agency action was arbitrary or capricious, an abuse of discretion, 

not in accordance with the law, or in excess of statutory authority. § 706(2). “To make 

this finding the court must consider whether the decision was based on a consideration 

of the relevant factors and whether there has been a clear error of judgment.” Citizens 

to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971), abrogated on other 

grounds by Califano v. Sanders, 430 U.S. 99 (1977). Agency decisions are given a 

“high degree of deference.” Sierra Club v. EPA, 252 F.3d 943, 947 (8th Cir. 2001). “The 

 

into one for summary judgment. See Gorog v. Best Buy Co., 760 F.3d 787, 791 (8th Cir. 2014) (“Though 

matters outside the pleading may not be considered in deciding a Rule 12 motion to dismiss, documents 

necessarily embraced by the complaint are not matters outside the pleading.”) (citations omitted). 

Plaintiffs submitted evidence of emails between the parties regarding whether the Commission was 

legally obligated to submit the entire Administrative Record (“AR”) in support of its Motion. The Court has 

not considered this evidence because it merely contains the legal arguments asserted by each party in 

support of their respective positions. Accordingly, the Court does not convert this Motion into one for 

summary judgment. 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 12 of 27 - Page ID # 332
13

court is not empowered to substitute its judgment for that of the agency.” Overton Park,

at 416.

Because the Court is reviewing agency action in this case, the Court “sits as an 

appellate tribunal, not as a court authorized to determine in a trial-type proceeding 

whether the Secretary's study was factually flawed.” Marshall County Health Care Auth. 

v. Shalala, 988 F.2d 1221, 1225 (8th Cir. 1993). “The entire case on review is a 

question of law, and only a question of law. And because a court can fully resolve any 

purely legal question on a motion to dismiss, there is no inherent barrier to reaching the 

merits at the 12(b)(6) stage.” Id. at 1226.

DISCUSSION

I. Jurisdiction Over Plaintiffs’ Claims

a. First Claim: Declaratory Judgment Act

As a threshold matter, the Commission challenges the Court’s subject matter 

jurisdiction over Plaintiffs’ First and Second Claims for Relief, arising under the 

Declaratory Judgment Act, 28 U.S.C. § 2201, and the APA, respectively. The 

Commission argues that Plaintiffs lack standing to seek a declaratory judgment.

Plaintiffs seek a declaratory judgment stating that the Commission had not 

lawfully established a penalties schedule through the 2014 Regulatory Extension at the 

time penalties were assessed against Plaintiffs. ECF No. 1, Compl., ¶ 41, Page ID 15. 

In other words, Plaintiffs seek a declaration that the assessment of penalties must be 

modified or set aside. Review under the APA is precluded where Congress has 

otherwise provided a “special and adequate review procedure.” Bowen v. 

Massachusetts, 487 U.S. 879, 904 (1988); see also 5 U.S.C. § 704. As noted in the 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 13 of 27 - Page ID # 333
14

Complaint and in Plaintiffs’ brief, FECA provides its own framework for judicial review of 

agency action. See 52 U.S.C. § 30109(a)(4)(C)(iii). FECA grants the FEC “exclusive 

jurisdiction” over civil enforcement of campaign finance laws, thereby channeling all 

complaints of campaign finance violations through the FEC. 52 U.S.C. § 30106(b).

Plaintiffs have not identified any reason that review under FECA presents an 

inadequate remedy. Accordingly, Plaintiffs’ claim for declaratory relief must be denied.

b. Second Claim: Injunction Under the APA

In their Second Claim for Relief, Plaintiffs assert that the penalties assessed 

against them were not in accordance with law and were in excess of the Commission’s 

statutory authority. ECF No. 1, Compl., ¶¶ 46-47, Page ID 16-17. As a remedy, 

Plaintiffs seek injunctive relief under the APA, 5 U.S.C. § 706(2). However, “Congress 

did not intend the general grant of review in the APA to duplicate existing procedures for 

review of agency action.” Bowen, 487 U.S. at 903. As noted above, Congress granted 

the Commission exclusive jurisdiction over civil enforcement of campaign finance laws. 

For this reason, other courts have held that “FECA itself indicates that the remedy it 

provides is sufficient to preclude APA review of the Commissioners’ statements of 

reasons.” Citizens for Responsibility & Ethics in Washington v. Fed. Election Comm’n, 

164 F. Supp. 3d 113, 119 (D.D.C. 2015). Because FECA provides an adequate remedy, 

Plaintiffs’ Second Claim for Relief must also be dismissed. 

c. Permissible Grounds for Review under FECA

Although the Parties agree that the Court has subject matter jurisdiction over 

Plaintiffs’ Third Claim for Relief under FECA, 52 U.S.C. § 30109(a)(4)(C)(iii), the 

Commission asserts that Plaintiffs failed to properly challenge the Commission’s 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 14 of 27 - Page ID # 334
15

administrative fines decision. Specifically, the Commission alleges that Plaintiffs may 

only challenge the AF on three permissible grounds: that the Commission’s finding was 

based on a factual error; that the Commission improperly calculated the civil penalty; or 

that respondents used “best efforts,” as defined in FEC regulations, to file in a timely 

manner. See 11 C.F.R. § 111.35(b). Section 111.35 governs challenges to the 

Commission’s “reason to believe” finding. Section 111.35(b) states: 

The respondent's written response must assert at least one of the 

following grounds for challenging the reason to believe finding or proposed 

civil money penalty:

(1) The Commission's reason to believe finding is based on a factual error 

including, but not limited to, the committee was not required to file the 

report, or the committee timely filed the report in accordance with 11 

C.F.R. § 100.19;

(2) The Commission improperly calculated the civil money penalty; or

(3) The respondent used best efforts to file in a timely manner in that:

(i) The respondent was prevented from filing in a timely manner by 

reasonably unforeseen circumstances that were beyond the control 

of the respondent; and

(ii) The respondent filed no later than 24 hours after the end of 

these circumstances.

Plaintiffs argue that § 111.35(b) is not as limited as it appears on its face because its 

authorizing statute, 52 U.S.C. § 30109, does not limit available defenses. Specifically, 

Plaintiffs argue that § 30109(a)(2) and (3) permits respondents to assert defenses 

arising out of any “legal and factual issues.” Plaintiffs assert that because § 30109(b) 

does not directly limit its defenses, § 111.35 cannot be read to limit Plaintiffs’ available 

defenses. 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 15 of 27 - Page ID # 335
16

The Court concludes that, regardless of whether § 111.35 validly limits Plaintiffs’ 

defenses, for purposes of proceeding in this case, Plaintiffs have satisfied the 

requirements of § 111.35(b). As noted above, § 111.35(b)(1) provides that respondents 

must allege “at least one of the ... grounds” listed in the regulation, which includes a 

claim the Commission’s “finding is based on a factual error” (11 C.F.R. § 111.35(b)(1)). 

Plaintiffs’ response to the Commission included the assertion that the factual basis for 

the Commission’s conclusion was in error. See ECF No. 21-7, Page ID 139 (“For the 

reasons shown below, these facts conclusively prove the civil monetary penalty . . .

must be vacated and stricken”); see also ECF No. 21-4, Page ID 89 (“[Plaintiffs] 

challenge . . . the proposed civil money penalty. . . on the . . . basis of ‘actual error’ and 

‘miscalculation of the calculated civil money penalty’ . . .”). Although Plaintiffs do not 

directly pursue those grounds in this case, their response to the Commission can 

reasonably be read to assert an objection on the basis of factual error. Section 

111.35(b)(1) does not require the listed items to be the only grounds asserted in 

defense. Rather, it requires that one of the listed grounds be asserted before other 

grounds can be considered. Plaintiffs have satisfied that condition for purposes of the 

Commission’s action.

II. Legality of the 2014 Regulatory Extension

a. Sufficiency of the Record

Prior to considering the merits of Plaintiffs’ claim under FECA, the Court must 

address whether the administrative record (“AR”) is sufficient for review. “On a motion to 

dismiss, a court must primarily consider the allegations contained in the complaint, 

although matters of public and administrative record referenced in the complaint may 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 16 of 27 - Page ID # 336
17

also be taken into account.” Deerbrook Pavilion, LLC v. Shalala, 235 F.3d 1100, 1102 

(8th Cir. 2000) (citing Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir.1999)). 

Plaintiffs argue that the Commission’s Motion should be denied because the

Commission submitted only portions of the AR. In support of their Motion, the 

Commission submitted correspondence between the parties that was a part of the AR 

and expressly referenced in the Complaint. The Complaint also references matters that 

are, according to the Commission, part of the public record. Thus, following the Eighth 

Circuit’s reasoning in Deerbrook, the Commission has submitted and/or identified 

“matters of public and administrative record referenced in the Complaint.” Id. at 1102.

Plaintiffs nevertheless argue that the Commission was required to submit the 

entire record, and that the Commission’s Motion must be denied because only a portion 

of the AR has been submitted. Plaintiffs cite Portland Audubon Soc. v. Endangered 

Species Comm., 984 F.2d 1534 (9th Cir. 1993) which states, “Section 706 of the APA 

provides that judicial review of agency action shall be based on ‘the whole record.’” Id. 

at 1548. Plaintiffs’ reliance on that case is incomplete. Section 706 requires that, when 

reviewing agency action, “the court shall review the whole record or those parts of it 

cited by a party, and due account shall be taken of the rule of prejudicial error.” 5 U.S.C. 

§ 706 (emphasis added). The Commission has submitted those parts of the AR cited by 

the Plaintiffs, and has directed the Court to other publicly available documents cited in 

the Complaint. Accordingly, for purposes of the arguments set forth in the Commission’s 

Motion, the AR before the Court is sufficient for review.

b. Penalty Formula Applied to Plaintiffs

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 17 of 27 - Page ID # 337
18

Plaintiffs’ principal argument, both at the administrative level and before the 

Court on review, is that the Commission failed to establish the applicable penalty 

schedule in accordance with Commission regulations and the APA. Plaintiffs argue that 

the Commission promulgated the 2014 Regulatory Extension of the Administrative 

Fines Program without proper notice. The Commission argues that the extension of the 

Administrative Fines Program fell within the “good cause” exemptions of 5 U.S.C. § 553, 

and notice and publication were excused.

“Agencies must conduct ‘rule making’ in accord with the APA’s notice and 

comment procedures.” Iowa League of Cities v. EPA, 711 F.3d 844, 855 (8th Cir. 2013)

(citing 5 U.S.C. § 553(b),(c)). Generally, “[t]he APA’s rulemaking provisions require 

three steps to enact substantive rules: notice of the proposed rule, a hearing or receipt 

and consideration of public comments, and the publication of the new rule.” United 

States v. Brewer, 766 F.3d 884, 888 (8th Cir. 2014) (quoting United States v. DeLeon,

330 F.3d 1033, 1036 (8th Cir. 2003). “The third step, publication of a new substantive 

rule, must be completed ‘not less than 30 days before [the rule’s] effective date.’” Id. 

(quoting 5 U.S.C. § 553(d)).

“An agency may waive the requirements of a notice and comment period and the 

30-day grace period before publication if the agency finds ‘good cause’ to do so.” Id. 

(citing 5 U.S.C. § 553(b)(B), (d)(3)). The Eighth Circuit has cautioned courts to 

distinguish between the pre-adoption notice and comment requirements in § 553(b) and 

the separate post-adoption publication requirements, listed in § 553(d). See Brewer, 

766 F.3d at 888. “Because these are separate requirements, the agency must have 

good cause to waive each.” Id. The Commission has the burden of demonstrating good 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 18 of 27 - Page ID # 338
19

cause. See Northern Arapahoe Tribe v. Hodel, 808 F.2d 741 (10th Cir. 1987); 

Buschmann v. Schweiker, 676 F.2d 352, 347 (9th Cir. 1982). Cf. United States v. 

Gavrilovic, 551 F.2d 1099, 1105 (8th Cir. 1977) (“Congress intended to impose upon an 

administrative agency the burden [under § 553(d)(3)] of showing a public necessity.”)

The Court reviews whether the Commission has met its burden of showing good cause 

under each exception.

i. Pre-adoption Good Cause Under § 553(b)

Circuits are split as to the standard of review for an agency’s assertion of good 

cause under § 553(b)(B). The Fourth and Sixth Circuits appear to apply a de novo 

review. See United States v. Gould, 568 F.3d 459, 469–70 (4th Cir. 2009); United 

States v. Cain, 583 F.3d 408, 420–21 (6th Cir. 2009)). The Eighth Circuit, however, has 

“deferred to the agency’s determination” in the past, and “reviewed only ‘whether the 

agency’s determination of good cause complies with the congressional intent’ in § 

553(d).” Brewer, 766 F.3d at 888 (quoting United States v. Gavrilovic, 551 F.2d 1099, 

1105 (8th Cir. 1977)). Rather than focusing on a specific standard of review, most 

courts have interpreted § 553(b)(B)’s good cause provision under a limiting principle. 

See Brewer, 766, F.3d at 888 (citing United States v. Reynolds, 710 F.3d 498, 507 (3d 

Cir. 2013)). “This principle is most commonly formulated as a direction that good cause 

should be narrowly construed.” Reynolds, 710 F.3d at 507 (citations and quotation 

marks omitted). Courts have also explained that “circumstances justifying reliance on 

the good cause exception are indeed rare and will be accepted only after the court has 

examined closely proffered rationales justifying the elimination of public procedures.” Id. 

(internal quotation marks omitted). With these principles in mind, the Court looks to 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 19 of 27 - Page ID # 339
20

whether the Commission has shown pre-adoption good cause for extending the 

Administrative Fines Program. The Commission may establish good cause by showing 

that notice and comment are “impracticable, unnecessary, or contrary to the public 

interest.” 5 U.S.C. § 553(b)(B). 

A. Pre-adoption Notice and Comment Unnecessary

The Commission has shown that pre-adoption publication and notice and 

comment for the 2014 Regulatory Extension were unnecessary under these narrow 

circumstances. Notice and comment “are unnecessary when the amendments are 

minor or merely technical.” Hedge v. Lyng, 689 F. Supp. 884, 892 (D. Minn. 1987)

(citing S. Rep. No. 752, 79th Cong., 1st Sess. 14 (1945)); see also North Carolina 

Growers Ass’n v. United Farm Workers, 702 F.3d 755, 766 (4th Cir. 2010); Util. Solid 

Waste Activities Grp. v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001). “This prong of the 

good cause inquiry is confined to those situations in which the administrative rule is a 

routine determination, insignificant in nature and impact, and inconsequential to the 

industry and to the public.” Mack Trucks, Inc. v. E.P.A., 682 F.3d 87, 94 (D.C. Cir. 2012)

(internal quotation marks and citations omitted); see also Senate Report, No. 752, 79th 

Cong. 1st Sess. (1945), reprinted in the Legislative History of the Act at 200. Courts 

have also held that notice and comment procedures also are unnecessary where 

Congress requires an agency to perform a nondiscretionary act. See Metzenbaum v. 

FERC, 675 F.2d 1282, 1291 (D.C. Cir. 1982) (internal citations and quotation marks 

omitted). 

In this case, the Commission specifically explained, “notice and comment [we]re 

unnecessary here because this final rule merely extend[ed] the applicability of the 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 20 of 27 - Page ID # 340
21

existing [Administrative Fines Program] and delete[ed] one administrative provision; the 

final rule ma[de] no substantive changes to the [Administrative Fines Program].” 2014 

Extension of Administrative Fines Regulation, 79 Fed. Reg. at 3302. While on other

occasions the Commission has made adjustments to the civil penalties that apply for 

violations of FECA’s reporting requirements to account for inflation, the 2014 Regulatory 

Extension did not make any substantive changes. 2The 2014 Regulatory Extension did 

not alter or even mention the civil penalty Plaintiffs challenge in this case. The changes 

made in the 2014 Regulatory Extension were mere technical changes and were not an 

exercise of substantive agency decision-making. No extent of notice or commentary 

could have altered the Commission’s obligation to implement the 2013 Congressional 

Extension. Accordingly, pre-adoption publication and notice and comment were 

unnecessary under § 553(b)(B).

B. Pre-Adoption Notice and Comment Contrary to Public Interest

The Commission has also shown that notice and comment in these narrow 

circumstances would be contrary to the public interest. “The public interest prong of the 

good cause exception is met only in the rare circumstance when ordinary procedures—

generally presumed to serve the public interest—would in fact harm that interest.” Mack 

Trucks, Inc., 682 F.3d at 95. “[The public interest prong] is appropriately invoked when 

the timing and disclosure requirements of the usual procedures would defeat the 

 

2

The civil penalty formula for untimely 48-hour notices, originally established in May 2000, was 

adjusted in 2005, to its current amount. Plaintiffs do not challenge the June 2005 Inflation Adjustment.

Compare Extension of Administrative Fines Regulation, 79 Fed. Reg. 31,787, 31,798 (setting civil penalty 

formula for 48-Hour Notices that are not timely filed as “$100 + (.10 x amount of the contribution(s) not

timely reported”)), with Inflation Adjustments for Civil Monetary Penalties, 70 Fed. Reg. 34633, 34636 

(June 15, 2005) (“June 2005 Inflation Adjustment”) (adjusting civil penalty formula for 48-Hour Notices 

that are not timely filed as “$110 + (.10 x amount of the contribution(s) not timely reported”)).

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 21 of 27 - Page ID # 341
22

purpose of the proposal—if, for example, ‘announcement of a proposed rule would 

enable the sort of financial manipulation the rule sought to prevent.’” Id. (quoting Util. 

Solid Waste Activities Grp. v. E.P.A., 236 F.3d 749, 755 (D.C. Cir. 2001)). “In such a 

circumstance, notice and comment could be dispensed with ‘in order to prevent the 

amended rule from being evaded.’” Id. (quoting Util. Solid Waste, 236 F.3d at 755). 

In this case, further delay in implementing the Congressionally approved 

extension would contravene the purposes of the Administrative Fines Program. The 

purpose of the Administrative Fines Program was “to create a special, streamlined set 

of procedures for efficiently imposing fines on covered persons for routine filing and 

record-keeping violations, such as the late filings at issue here.” Combat Veterans for 

Cong. Political Action Comm. v. Fed. Election Comm'n, 795 F.3d 151, 154 (D.C. Cir. 

2015) (citing § 30109(a)(4)(C)); see also 145 Cong. Rec. 16,260 (July 15, 1999) 

(statement of Rep. Maloney) (noting that the bill “contains several provisions that will 

help the agency operate more efficiently,” by mandating some electronic filing and 

creating “a system of ‘administrative fines’—much like traffic tickets, which will let the 

agency deal with minor violations of the law in an expeditious manner”). With the 

adoption of the Administrative Fines Program, “Congress sought to make it easier for 

the Commission to enforce [FECA’s] deadlines.” Combat Veterans, 795 F.3d at 154. 

Further delay in implementation would contravene the purposes of the 

Administrative Fines Program, as extended by Congress in the 2013 Congressional 

Extension. This is shown, for example, by how the Commission was forced to treat

violations that occurred between the time of the 2013 Congressional Extension and the 

time of the 2014 Regulatory Extension. In the short gap between the end date of the 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 22 of 27 - Page ID # 342
23

Commission’s 2008 Extension of Administrative Fines Regulations and the effective 

date of the 2014 Extension of Administrative Fines Regulations, routine reporting 

violations were handled through the Commission’s more extensive, regular enforcement 

procedures. 2014 Extension of Administrative Fines Regulations, 79 Fed. Reg. at 3302. 

Notice and comment procedures would have substantially lengthened the period of time 

during which the Commission was precluded from utilizing the more efficient 

Administrative Fines Program for routine reporting violations, such as the 48-hour 

notices at issue in this case, thus frustrating the Congressional purpose of the 

Administrative Fines Program and the 2013 Congressional Extension. For these 

reasons, notice and comment were contrary to the public interest and the Commission 

has shown good cause under § 553(b)(B).

ii. Post-adoption Good Cause Under § 553(d)

The Court also concludes that the Commission has established good cause 

under § 553(d). Good cause is more easily shown under § 553(d). U.S. Steel Corp. v. 

U.S. E.P.A., 605 F.2d 283, 289 (7th Cir. 1979). The statutory language of § 553(d) 

does not include the additional modifying language giving specific instances of good 

cause to § 553(b)(B). See § 553(b)(B) (stating where notice and comment are 

“impracticable, unnecessary, or contrary to the public interest.”). “Furthermore, since [§ 

553(d)(3)] only dispenses with prior notice and comment, and not notice and comment 

altogether, there is sound reason to believe that ‘good cause’ should encompass more 

situations in (d)(3) than in (b)(B).” U.S. Steel Corp., 605 F.2d at 289.

For the reasons stated above, the Court concludes that the Commission has 

demonstrated good cause to dispense with the post-adoption notice requirement under 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 23 of 27 - Page ID # 343
24

§ 553(d). The changes made to the regulations were minor and non-substantive and 

merely extended the Administrative Fines Program already in place. Further, additional 

delay would frustrate the purposes of the simplified administrative fines system. 

Accordingly, the Commission has shown good cause under § 553(d).

c. Tally Vote Procedure

Plaintiffs also argue that the 2014 Regulatory Extension is invalid because it did 

not comply with the Commission’s procedure and the Sunshine Act, 5 U.S.C. § 552b(g). 

Commission regulations promulgated pursuant to the Sunshine Act provide that

“Commissioners shall not . . . dispose of Commission business other than in 

accordance with” Commission regulations. 11 C.F.R. § 2.3(a). Commission regulations 

further provide “the deliberation of at least four voting members of the Commission in 

collegia where such deliberations determine or result in . . . disposition of official 

Commission business” constitutes a “meeting” under the Sunshine Act. 11 C.F.R. § 

2.2(d)(1). Commission regulations also state that, unless specifically excepted by 

regulation, “every portion of every Commission meeting shall be open to public 

observation.” See 11 C.F.R. § 2.3(b). Commission regulations grant a narrow exception 

to the open meeting requirement when the Commission disposes of “routine matters.”

See 11 C.F.R. § 2.2(d)(2) (“The term meeting does not include the process of notation 

voting by circulated memorandum for the purpose of expediting consideration of routine 

matters”). Routine matters can be addressed by the Commission by using a formal “tally 

vote” procedure adopted by the Commission that involves written ballots marked by 

each of the commissioners and returned to the Commission Secretary and Clerk. See

Commc’ns Sys., Inc. v. FCC, 595 F.2d 797, 800-01 (D.C. Cir. 1978) (explaining that agency 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 24 of 27 - Page ID # 344
25

members may act on agency business using notation, or tally, procedure consistent with the 

Sunshine Act, 5 U.S.C. § 552b)).

The Complaint asserts the Commission violated the tally vote procedure and the 

Sunshine Act. Plaintiffs allege there was no record of a vote of commissioners or a 

meeting of the Commission. The Complaint also alleges that the Clerk dated an 

unsworn certification noting that the vote was decided on January 13, 2014, “[but] the 

Clerk did not execute either an affidavit or sworn declaration . . . [n]or did the Clerk 

provide a sworn Certification with a date stamp and official seal or represent the vote on 

this critical topic was face-to-face with each commissioner.” ECF No. 1, Compl. ¶ 19, 

Page ID 8. Plaintiffs also argue that the Commission could have circulated an agenda 

item to have a public vote on establishing the penalties schedule one week before the 

Commission held a meeting on January 16, 2014, but failed to do so. Plaintiffs allege 

that these, and other procedural failures, nullify the validity of the 2014 Regulatory 

Extension.

The Court has reviewed the record and Plaintiffs’ arguments and finds no 

evidence that the Commission violated the tally vote procedure or the Sunshine Act that 

would invalidate the 2014 Regulatory Extension. Even if the Commission’s voting 

procedures did not expressly follow the requirements of the Sunshine Act, the remedy 

for such violations is increased transparency, not invalidation of agency action. See 

Braniff Master Exec. Council of Air Line Pilots Ass’n Int’l v. Civil Aeronautics Bd., 693 

F.2d 220, 226 (D.C. Cir. 1982) (“[R]elease of transcripts, not invalidation of the agency’s 

substantive action, is the remedy generally appropriate for disregard of the Sunshine 

Act.”) (internal marks and citation omitted); Pan Am World Airways, Inc. v. Civil 

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 25 of 27 - Page ID # 345
26

Aeronautics Bd., 684 F.2d 31, 36 (D.C. Cir. 1982) (per curiam) (“Section 552b(h)(2), 

while it does not forbid us to vacate the [agency’s] order, strongly indicates a 

congressional policy that release of transcripts, not invalidation of the agency's 

substantive action, shall be the normal remedy for Sunshine Act violations.”). 

Although an agency action may be set aside when it is intentional, prejudicial to 

the party making the claim, and “of a serious nature,” see Pan Am, 684 F.2d at 36-37, 

Plaintiffs have not alleged any facts suggesting that the FEC’s alleged Sunshine Act 

violations meet those criteria. See also S. Rep. No. 94-354, at 34 (1975) (“It is expected 

that a court will reverse an agency action solely on [the ground that it was taken at an 

improperly closed meeting] only in rare instances where the agency’s violation is 

intentional and repeated, and the public interest clearly lies in reversing the agency 

action.”). 

CONCLUSION

The Commission has demonstrated that the 2014 Regulatory Extension 

bypassed the APA’s notice and comment procedures for good cause. Plaintiffs’ 

allegations of procedural deficiencies, if found to be true, would not invalidate the 2014 

Regulatory Extension. Accordingly, Plaintiffs’ claim for review of the Commission’s 

actions will be dismissed.

IT IS ORDERED:

1. The Motion to Dismiss filed by Defendants Federal Election Commission 

and Matthew S. Petersen, ECF No. 21, is granted;

2. Plaintiffs’ claims against Defendants Federal Election Commission and 

Matthew S. Petersen, are dismissed, with prejudice;

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 26 of 27 - Page ID # 346
27

3. Plaintiffs’ Notice of Dismissal, ECF No. 28, is approved and Defendant 

United States of America is dismissed as a party defendant;

4. The Motion to Dismiss filed by Defendant United States of America, ECF 

No. 25, is denied as moot; 

5. This Clerk of Court is directed to terminate this case for statistical 

purposes; and

6. A separate judgment will be entered.

Dated this 22nd day of December, 2016

BY THE COURT:

s/Laurie Smith Camp

Chief United States District Judge

8:16-cv-00168-LSC-FG3 Doc # 43 Filed: 12/22/16 Page 27 of 27 - Page ID # 347