I ",,\

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Jack Speight (Wyoming Bar No. 4-0983)

4021 Snyder Ave

Cheyenne, WY 82001

307.635.1239 [Tel.]

jbspeight@gmail.com

Benjamin T. Barr

10737 Hunting Lane

Rockville, MD 20850

202.595.4671 [TeL]

benjamin.barr@gmail.com

Stephen R. Klein

Wyoming Liberty Group

1902 Thomes Ave

Ste.201

Cheyenne, WY 82001

307.632.7020 [TeL]

307.632.7024 [Fax.]

stephen.klein@wyliberty.org

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF WYOMING

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FREE SPEECH )

)

Plaintiff, )

)

v. )

)

FEDERAL ELECTION COMMISSION )

)

Defendant. )

)

)

)

)

1

Civil Case No. 12-CV-127-S

Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 1 of 40
FIRST AMENDED VERIFIED COMPLAINT

FOR DECLARATORY AND INJUNCTIVE RELIEF

Plaintiff Free Speech brings this action for declaratory and injunctive relief, and

complains as follows:

INTRODUCTION

1. Free Speech - a Wyoming organization comprised of three Wyoming residents - cannot

exercise its First Amendment freedoms due to the Federal Election Commission's

("FEC") maintenance of unconstitutional regulations, policies, and practices. Under the

challenged regulations and practices, groups must register and report to the government

just to speak out about public issues without clearly defined guidelines and uniform

standards. This is hardly new. The FEC has a long history of failing to comply with

controlling precedent of the federal courts guarding First Amendment freedoms, leading

to the challenge before this Court today.

2. This is a challenge to regulations adopted, interpreted, and enforced by the FEC that

abridge Free Speech's First Amendment freedoms. This challenge is brought facially and

as applied against 11 C.F.R. §§ 100.22(b). In addition, this suit also challenges the

constitutionality of the Commission's interpretation and enforcement process regarding

political committee status, solicitation tests, the "major purpose" test, and express

advocacy determinations. See 2 U.S.c. §§ 431(4),431(8), 441d; 11 C.F.R. §§ 100.5(a),

100.52(a), llO.ll(a)(3); Express Advocacy, Independent Expenditures, Corporate and

Labor Organization Expenditures, 60 Fed. Reg. 35292 (Jul. 6, 1995); Political Committee

Status, Definition of Contribution, and Allocation for Separate Segregated Funds and

Nonconnected Committees, 69 Fed. Reg. 68056 (Nov. 23, 2004) (hereinafter "Political

Committee I"); Political Committee Status, 72 Fed. Reg. 5595 (Feb. 7, 2007) (hereinafter

"Political Committee II").

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 2 of 40
3. The main focus of this challenge is against 11 C.F.R. § 100.22(b) because it acts as a

trigger for a panoply of other regulatory burdens against would-be speakers. First, it

attempts to define what constitutes express advocacy speech in unclear terms leaving

those who guess wrong subject to criminal or civil penalties. Second, when any group's

"expenditures" aggregate more than $1,000 in a calendar year, the Commission imposes

burdensome political committee registration and reporting requirements. See 2 U.S.C. §

431; 11 C.F.R. § 100.5 (defining a political committee). Third, for expenditures deemed

"independent expenditures," disclaimers must be included and independent expenditure

reports must be filed. See 2 U.S.C. § 434; 11 C.F.R. § 104.4.

4. Even the agency charged with the interpretation and enforcement ofthe Federal Election

Campaign Act ("FECA") cannot tell Free Speech how to comply with the regulations and

practices in question. On February 29, 2012, Free Speech sought an advisory opinion

from the FEC in order to verify that its planned constitutionally protected conduct would

be consistent with the law. See EXHIBIT A. After more than two months, the FEC

could not muster the necessary support among its commissioners to give sensible

guidance. Instead, the Commission provided three contradictory draft advisory opinions,

two contradictory statements of reasons, and one elusive advisory opinion purporting to

interpret the law while avoiding any substantive discussion ofit. See EXHIBITS B-1.

5. The members of Free Speech have demonstrated a good faith desire to comply with the

FEC's regulatory regime. They simply want to know with some degree of certainty what

that regime requires so they can follow it. The First Amendment demands nothing less.

6. Free Speech, and its members, suffer irreparable injuries to their First Amendment rights

because the regulations, policies, and practices in question prohibit Free Speech from

engaging in protected issue advocacy without complying with burdensome registration,

reporting and disclaimer requirements reserved for political committees - organizations

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 3 of 40
who are under the control of a candidate or whose major purpose is to expressly advocate

for the election or defeat offederal candidates.

7. Free Speech asks that this court find the challenged regulations, policies, and practices

unconstitutionally vague, overbroad, contrary to law and settled precedent, and violative

of the First Amendment, both on their face and as applied, and that the FEC be enjoined

from enforcing them.

JURISDICTION AND VENUE

8. This Court has jurisdiction pursuant to 28 U.S.C. § 1331 as a challenge arising under the

First Amendment to the Constitution of the United States, FECA, and the Declaratory

Judgment Act, 28 U.S.C. § 2201-02.

9. Venue is proper in this Court under 28 U.S.C. § 139I(e) because Defendant is an entity

ofthe United States Government, a substantial part ofthe events or omissions giving rise

to this claim occurred in the District of Wyoming, and the Plaintiff resides in the District

of Wyoming.

PARTIES

10. Free Speech is an unincorporated nonprofit association in Wyoming, registered as a 527

political group with the IRS. Its bylaws require that it operate independently ofpolitical

candidates, committees, and political parties. See EXHIBIT A at Exhibit 1. Free Speech

does not coordinate any ofits activities with candidates or national, state, district, or local

political party committees or their agents as defined in 2 U.S.C. § 441a(a)(7)(B) and (C)

and 11 C.F.R. § 109. Free Speech does not coordinate any ofits activities with political

committees.

11. The FEC is the federal agency charged with enforcement of FECA and is located in

Washington, D.C.

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 4 of 40
STATEMENT OF FACTS

12. Free Speech is standing alone against no ordinary federal agency. The FEC has regularly

lost challenges in the federal courts due to its tendency to ignore constitutional liberties in

favor of its own authority. See, e.g., Carey v. FEC, 791 F.Supp.2d 121 (D.D.C. 2011)

(Commission violated the constitutional liberties of a military and veterans' group);

Carey, 2012 WL 1853869, *4-*5 (EAJA Memorandum Opinion, May 22, 2012)

(violation was so extensive that attorneys' fees were awarded); SpeechNow.org v. FEC,

599 F.3d 686 (D.C. Cir. 2010) (invalidating unconstitutional regulations applied to

independent groups); EMILY's List v. FEC, 581 F.3d 1 (D.C. Cir. 2009) (FEC regulations

violated First Amendment rights of nonprofit). The Supreme Court and lower courts

have frequently chastised the FEC for its tendency to emphasize the expansion of its own

power over the First Amendment rights ofthose it seeks to regulate. See Citizens United

v. FEC, 130 S.Ct. 876, 896 (2010) (describing the dangers of the FEC and its

predisposition to censor); Carey, 2012 WL 1853869, *5 ("The FEC ignores the fact that

NDPAC should not have had to file this suit at all" and the Commission "should know

the current status of election law, especially Supreme Court and Circuit law").

13. Free Speech formed on February 21, 2012. Its bylaws are attached as EXHIBIT A at

Exhibit 1. It is an organization comprised of three Wyoming residents formed with a

common commitment to limited government, the rule of law, and constitutional

accountability. To engage and educate the public, it wishes to pay for advertisements in

various media outlets that will bring light to a variety of public issues such as gun rights,

land rights, environmental policy, health care, and free speech, including their connection

with public servants and candidates for public office. These advertisements would run

from the present to November. Free Speech plans to speak about related issues as they

arise beyond November as well. See EXHIBIT A (Free Speech Advisory Opinion

Request) at 2 ("Members of Free Speech plan to save their money to budget for

additional advertisements beyond those described herein"). Free Speech also intends to

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 5 of 40
raise funds to run these additional advertisements in the future well beyond the 2012

electoral cycle.

14. Free Speech is not under the control of any federal candidate, nor does it have as its

major purpose the election or defeat of clearly identified candidates for federal office.

See Buckley v. Valeo, 424 U.S. 1, 79 (1976). Instead, it is a grassroots organization

interested in engaging the public about issues of the day, but is prohibited from doing so

by the regulations and practices in question.

15. One prohibited issue advocacy communication Free Speech would like to publish is listed

as script "B" in the Advisory Opinion Request ("AOR") - "Environmental Policy." It

reads: "President Obama opposes the Government Litigation Savings Act. This is a

tragedy for Wyoming ranchers and a boon to Obama's environmentalist cronies. Obama

cannot be counted on to represent Wyoming values and voices as President. This

November, call your neighbors. Call your friends. Talk about ranching." EXHIBIT A at

3. Free Speech plans to spend approximately $1,000 on this communication through

approximately 60 radio advertisements from the start date of the issuance of injunctive

relief to November 3,2012. See EXHIBIT O.

16. Another prohibited issue advocacy communication Free Speech would like to publish is

listed as script "A" in the AOR - "Gun Control." It reads: "Guns save lives. That's why

all Americans should seriously doubt the qualifications of Obama, an ardent supporter of

gun control. This fall, get enraged, get engaged, and get educated. And support

Wyoming state candidates who will protect your gun rights." EXHIBIT A at 2. A

variant ofthis is included as a Facebook advertisement in Exhibit 2 ofthe AOR. It reads:

"Stand Against Gun Control. Obama supports gun control. Don't trust him. Support

Wyoming state candidates who will protect your gun rights." Free Speech plans to spend

approximately $700 on this communication through Facebook advertisements in

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 6 of 40
campaigns for one month following the issuance ofinjunctive relief and between October

1 and November 2,2012. See EXHIBIT O.

17. A third prohibited issue advocacy communication Free Speech would like to publish is

listed as script "F" in the AOR - "Financial Reform." It reads: "President Obama

supported the financial bailout of Fannie Mae and Freddie Mac, permitting himself to

become a puppet of the banking and bailout industries. What kind of person supports

bailouts at the expense of Average Americans? Not any kind we would vote for and

neither should you. Call President Obama and put his antics to an end." EXHIBIT A at

3. Free Speech plans to spend approximately $500 on this communication through

newspaper advertisements soon after the grant of injunctive relief in October, 2012. See

EXHIBITO.

18. Since filing suit, Free Speech would like to spend an additional $16,900 on the prohibited

"Gun Control" ad, modified for national newsprint publication as script "A" in EXHIBIT

N. This advertisement would run nationwide in the newspaper USA Today on or about

November 1,2012. See EXHIBIT O.

19. Free Speech would like to spend an additional $19,495 on the prohibited "Environmental

Policy" ad, modified for national magazine publication as script "B" in EXHIBIT N.

This advertisement would run once nationwide in the October 2012 issue of Beef

Magazine and three times nationwide in National Review, in late August, late September

and late October 2012. See EXHIBIT O.

20. Free Speech would like to spend an additional $2,691 on the prohibited "Financial

Reform" ad, modified for national magazine publication as script "C" in EXHIBIT N.

This advertisement would run nationwide in the August, September and October issues of

Reason Magazine. See EXHIBIT O.

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 7 of 40
21. Free Speech is not a political committee under the law and controlling precedent because

none of its communications would constitute an "expenditure" or a "solicitation" for

"contributions" aggregating more than $1,000 in a calendar year - the respective

requirements to impose political committee status on an organization. See 2 U.S.c. §

431(4)(A); 11 C.F.R. § 100.5.

22. Free speech is not a political committee under the law and controlling precedent because

even if any of its proposed conduct would trigger the relevant $1,000 statutory trigger,

the organization does not meet the constitutionally required major purpose test. Free

Speech is not under the control of a candidate and it does not hold as its major purpose

the nomination, election, or defeat of any candidate for federal office. See Buckley, 424

U.S. at 79 (political committee regulations may only be imposed on organizations "that

are under the control of a candidate or the major purpose of which is the nomination or

election of a candidate"); FEC v. Massachusetts Citizens for Life (MCFL), 479 U.S. 238,

253 (1986).

23. Pursuant to its bylaws, Free Speech will not make any contributions to federal candidates,

political parties, or political committees that make contributions to federal candidates or

political parties. EXHIBIT A at Exhibit 1. Its members, officers, employees and agents

are prohibited from coordinating activities with any federal candidate or political party.

Free Speech will also not make communications expressly advocating the election or

defeat of clearly identified federal candidates. Id. It does, however, wish to vigorously

express its views on public issues, often connected with public servants and candidates

for public office, as issue advocacy. Under the present regulatory regime maintained by

the Defendant, it cannot.

24. To the extent government may demand speakers "'hedge and trim'" their speech to avoid

regulatory sanction, civil fines, or criminal enforcement, individuals must be able to

understand clearly demarcated regulatory lines. Buckley, 424 U.S. at 42-43 (citing

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 8 of 40
Thomas v. Collins, 323 U.S. 516, 535 (1945)). By purposefully aiming to limit itself to

issue advocacy communications, Free Speech should be able to easily avoid the

cumbersome regulations and requirements of registering with the FEC as a political

committee. See MCFL, 479 U.S. at 256,262 (1986) (imposing political committee status

would make "engaging in protected speech a severely demanding task" and any

government interest in disclosure can be met in a manner "less restrictive than imposing

the full panoply of regulations that accompany status as a political committee under the

Act").

25. By speaking out only on issue advocacy communications, Free Speech's activities should

not be subject to the burdens imposed on regulable speech deemed express advocacy.

But this is not the case. Like the Amazing Kreskin, three commissioners determined that

the "true" intent of these three gentlemen from Wyoming is express advocacy for or

against federal candidates, respectively. See EXHIBIT H (Concurring Opinion of Vice

Chair Ellen L. Weintraub and Commissioners Cynthia L. Bauerly and Steven T. Walther

in Advisory Opinion 2012-11 (Free Speech), May 8, 2012 (hereinafter "Free Speech

Statement I")). Absent clear guidance in this area, Free Speech is silenced, for it must

choose between 1) speaking bluntly about issues under the risk offederal civil or criminal

penalties, 2) tailoring its message, without any guidance, to be "safe" in accord with FEC

proper speaking standards, again under risk of prosecution, or 3) being muted due to the

burdens attached to registering and reporting as a political committee with the

Commission.

26. The simple action of Free Speech asking for support for its issue advocacy might require

it to register as a political committee, whether or not Free Speech uses any funds received

in response to its fundraising for express advocacy. The same hazy framework used to

determine express advocacy is also applied to donation requests or fundraising, and

prevents Free Speech from raising money to disseminate its message.

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 9 of 40
27. Here stand three gentlemen before this Court wishing to discuss the most salient political

issues of our day, but they are unable to do so due to the complicated and contradictory

regulatory regime imposed by the Commission. See Citizens United v. FEC, 130 S.Ct.

876,889 (2010) (the "First Amendment does not permit laws that force speakers to retain

a campaign finance attorney, conduct demographic marketing research, or seek

declaratory rulings before discussing the most salient political issues of our day").

28. Free Speech is chilled from engaging in any of its constitutionally protected activities

because it reasonably fears it would be subject to an investigation with possible

enforcement action leading to civil or criminal penalties. See 2 U.S.c. § 437g(d)

(providing, among other options, for imprisonment of up to one year for knowingly and

willfully making or receiving contributions, donations, or expenditures aggregating

$2,000 or more during a calendar year in violation of the FECA); see also Matter Under

Review ("MUR") 5487 (Progress for America Voter Fund), Conciliation Agreement

(FEC 2007) (imposing a $750,000 civil penalty by the Commission based on failures to

register and report as a political committee); MUR 5634 (Sierra Club, Inc.), Conciliation

Agreement (FEC 2006) (imposing a $28,000 civil penalty based on violations of §

100.22(a) or (b) and the then-in-effect corporate expenditure ban at 2 U.S.C. § 44lb(a)).

29. Free Speech has a reasonable belief that the FEC could investigate or impose civil or

criminal penalties for exercising constitutionally protected conduct due to the FEC

defining the terms "express advocacy" and "solicitation" in a vague and overbroad

fashion, as well as its vague and contradictory approach to deciding whether a group

meets the "major purpose test" before imposing political committee status. 11 C.F.R. §

100.22(b); see 60 Fed. Reg. at 35294-35296 (expanding on § 100.22(b)'s definition of

express advocacy); Political Committee I, 69 Fed. Reg. at 68056--68059 (expanding on §

100.57's definition of solicitations for contributions); Political Committee II, 72 Fed.

Reg. at 5605 (describing numerous factors that play into major purpose and political

committee determination),

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 10 of 40
30. The Commission has levied fines amounting to hundreds of thousands of dollars for

failure to report as a political committee, with one former commissioner stating that "the

Commission takes these kinds of cases very seriously, and ... when an organization fails

to file as a political committee, it carries serious legal consequences." "FEC Collects

$630,000 in Civil Penalties from Three 527 Organizations," Federal Election Comm'n,

Dec. 13, 2006, http://fec.gov/press/press2006/20061213murs.html. Free Speech is

further chilled by the Department of Justice's declaration that "[t]he investigation and

prosecution of knowing and willful violations of [FECA] are priorities of this

Department. Please be assured that we intend to vigorously pursue instances where

individuals or organizations knowingly and intentionally violate the clear commands of

this important statute." EXHIBIT J (Letter from John C. Keeney, Deputy Assistant

Attorney General, Department ofJustice, to Fred Wertheimer, President, Democracy 21,

June 26, 2008). That the FEC considers § 100.22(b) a "clear command," and could refer

these matters to the Department of Justice, provides a chill leaving Free Speech on thin

Ice.

The Advisory Opinion Request

31. On February 29, 2012, Free Speech submitted an advisory opinion request ("AOR"),

attached as EXHIBIT A, to the FEC pursuant to 2 U.S.C. § 437f. The AOR asked if any

of eleven proposed advertisements for radio, television, newspaper, and the Internet

website Facebook constituted "express advocacy" pursuant to § I00.22(a) or (b), thus

meeting the definition of "expenditure" under 11 C.F.R. § 100.11. Second, the AOR

asked if any of Free Speech's proposed donation requests constituted "solicitations" for

"contributions". Finally, the request asked whether these actions would trigger the major

purpose test and classify Free Speech as a political committee pursuant to 11 C.F.R. §

100.5 and require it to register and report with the FEC.

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32. Pursuant to 11 C.F.R. § 112.1, the FEC accepted the AOR for review, assigned it AOR

number 2012-11, and posted it on the FEC's website for public comment on or about

March 9,2012.

33. On April 11,2012, the FEC's general counsel issued a draft advisory opinion in response

to Free Speech's AOR. The draft advisory opinion, Draft A (FEC Agenda Document No.

12-24, attached as EXHIBIT B), concluded that none of Free Speech's proposed

advertisements constituted express advocacy and none ofits donation requests constituted

solicitations for contributions, leaving Free Speech free to run its advertisements without

registering and reporting as a political committee. Draft A recognized the significant

constitutional infirmities raised by the FEC's problematic regulations, policies, and

practices, and incorporated several recognized speech-protective precedents in its

analysis. See, e.g., EXHIBIT B at 38 ("PACs are burdensome alternatives; they are

expensive to administer and subject to extensive regulations") (citing Citizens United,

130 S. Ct. at 897).

34. An alternate draft, Draft B (FEC Agenda Document No. 12-24-A, attached as EXHIBIT

C), was also issued on April 11, 2012 and concluded that seven of Free Speech's eleven

proposed advertisements constituted express advocacy and would thus be expenditures,

two of Free Speech's proposed donation requests constituted "solicitations" for

"contributions", and that Free Speech's activities would require it to register and report as

a political committee. Draft B also analyzed Free Speech's activities and concluded that

Free Speech's major purpose was federal campaign activity based on a loose variety of

factors.

35. On April 12,2012, at an open meeting ofthe FEC, the Commission considered both draft

advisory opinions A and B but declined to vote on either draft. A transcription of this

portion ofthe meeting is attached as EXHIBIT K.

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36. On April 26, 2012, the FEC issued yet another draft advisory opinion, Draft C (FEC

Agenda Document No. 12-24-B, attached as EXHIBIT D), which concluded that one of

Free Speech's proposed advertisements constituted express advocacy and none of its

donation requests constituted "solicitations" of "contributions," leaving Free Speech

otherwise free to run its advertisements and donation requests without registering and

reporting as a political committee.

37. On April 26, 2012, at an open meeting ofthe FEC, the Commission failed by a vote of3-

3 to approve Draft B. The Commission also failed by a vote of 3-3 to approve Draft C.

The Commission did not consider Draft A for a vote. A transcription of this meeting is

attached as EXHIBIT L, and certification ofthe vote taken is attached as EXHIBIT E.

38. On May 8, 2012, the FEC approved a "partial response" advisory opinion (attached as

EXHIBIT G; approval attached as EXHIBIT F). This "partial response" advisory

opinion did not solve any of the resounding contradictions between earlier Drafts A, B,

and C, and left the underlying questions of what constitutes political committee status,

express advocacy, major purpose, and the definition of a solicitation unanswered. In

addition, FEC Vice Chair Weintraub and Commissioners Walther and Bauerly issued a

"Concurring Opinion," and Chair Hunter and Commissioners McGahn and Petersen

issued a Statement of Reasons (attached as EXHIBITS H and I, respectively). One set of

commissioners would have imposed the full range of registration and reporting

requirements on these three gentlemen while the other found constitutional infirmities in

doing so.

39. The Weintraub, Walther, and Bauerly opinion explained that Section 100.22(b) has been

applied frequently by the Commission and is "in effect." See EXHIBIT H at 2. It does

not purport to explain how these commissioners would have found seven ofthe proposed

eleven advertisements to be express advocacy other than to repeat key phrases found in

Section I00.22(b) itself. In addition, when pressed to explain glaring inconsistencies in

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 13 of 40
the FEC's practices and its draft advisory opinions, Vice Chair Weintraub explained she

got "tired of it" and elected not to answer every question posed by her colleague. See

EXHIBIT K (Transcript ofFEC Open Meeting (relating to Free Speech), April 12,2012)

at 21. Accordingly, Free Speech was left with an incomplete and "partial response," even

by Vice Chair Weintraub's and Commissioners Walther and Bauerly's own admission.

See EXHIBIT H (Free Speech Statement I) at 1.

40. The FEC's final advisory opinion concluded that "two of Free Speech's 11 proposed

advertisements would expressly advocate the election or defeat of a clearly identified

[flederal candidate; four of the proposed advertisements would not expressly advocate

the election or defeat of a clearly identified [fJederal candidate; and two of the four

proposed donation requests would not be solicitations under the Act." EXHIBIT G at 1.

This then leaves the five remaining advertisements and two donation requests

unanswered by the Commission, and this final advisory opinion lacks any clear guidance

about what constitutes express advocacy, a solicitation, the major purpose test, or

political committee status under applicable regulations.

41. Pursuant to 11 C.F.R. § Il2.4(a), the FEC certified on April 27, 2012 that it was unable

to approve Draft B or Draft C issued by the deadlocked segments of the Commission

because it lacked the necessary four votes to approve either. See EXHIBIT E. It did

certify the limited compromise draft on May 8, 2012. See EXHIBIT F. The FEC's

failure to affirmatively provide a four-vote, binding advisory opinion with definitive

answers to Free Speech's request carries significant constitutional concerns. In short, its

immediate effect is to mute Free Speech, lest it face civil or criminal penalties under risk

of violating 2 U.S.C. § 437g.

42. The Commission's refusal to issue a conclusive advisory opinion deprives Free Speech of

a legal reliance defense that it could otherwise receive under 2 U.S.c. § 437f(c). The

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advisory opinion process in this matter is complete and deprived Plaintiff of a legal

right-to engage freely in constitutionally protected speech and association.

Ensuing Harm to Plaintiffs

43. Free Speech is a small group with limited means. It requested an advisory opinion

because it could not determine if it could speak without having to expend time and

money complying with FEC registration, reporting and disclaimer requirements--eosts

that would diminish or completely consume funds reserved for political speech. The

harms imposed by political committee status regulations have been recognized as a

matter of law. See MCFL, 479 U.S. at 256, 262 (imposing political committee status

would make "engaging in protected speech a severely demanding task" and any

government interest in disclosure can be met in a manner "less restrictive than imposing

the full panoply of regulations that accompany status as a political committee under the

Act"); see also Citizens United, 130 S.Ct. at 897 ("PACs are burdensome alternatives;

they are expensive to administer and subject to extensive regulations").

44. Free Speech filed its AOR with a request for expedited review on February 29, 2012. See

11 C.F.R. § 112.4(b); Advisory Opinion Procedure, 72 Fed. Reg. 32160 (JuI. 7, 2009). It

took more than two months for the Commission to tell Free Speech that it could not

provide an answer to the basic questions it posed. Because of this, Free Speech had to

silence itself. It remains muted due to the effect of these challenged regulations and

practices.

45. Between February 29 and April 14, Wyoming's Democratic Presidential Primary season

came and went, leaving Free Speech muted during a time period when most citizens are

interested in political issues.

46. Because the FEC failed to issue an advisory opinion answering the fundamental questions

posed, Free Speech is, as three FEC commissioners noted, "in legal limbo." EXHIBIT I

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(Statement on Advisory Opinion 2012-11 (Free Speech), Chair Caroline C. Hunter and

Commissioners Donald F. McGahn and Matthew S. Petersen, May 9, 2012) at 3.

Because no objective line has been drawn between express advocacy and issue advocacy

and because Free Speech cannot comply with the burdensome registration and reporting

requirements thrust upon political committees, its message remains censored until its

First Amendment rights have been restored.

47. Were Free Speech forced to register and report with the federal government, its planned

speech and association become increasingly difficult, if not impossible. Under applicable

FEC regulations for political committees, it will have to appoint a treasurer, record and

detail every contribution it receives over $50 with the donor's address, and photocopy or

digitally image every check it receives over $50. 11 C.F.R. §§ 102.7(a) and (b), 102.8,

102.9(4)(a), 103.3. The treasurer will have to keep receipts for all disbursements over

$200, and keep all of these records for three years. 11 C.F.R. § 102.9. "These

regulations are more than minor clerical requirements. Rather, they create major

disincentives for speech, with the effect falling most heavily on smaller entities that often

have the most difficulty bearing the costs of compliance." McConnell v. FEC, 540 U.S.

93, 332 (2003) (Kennedy, J., dissenting); see also Citizens United, 130 S.Ct. at 897

(Kennedy, J.) ("PACs are burdensome alternatives; they are expensive to administer and

subject to extensive regulations").

48. To engage in fundraising, if Free Speech's proposed donation requests are deemed

"solicitations," then careful compliance with the FEC's required disclaimers and

authorizations must be included for each communication. 11 C.F.R. §§ 100.26,

110.II(a)(3),110.lI(b)(3).

49. In addition to rigorous internal procedures, if forced to be a political committee Free

Speech will have to comply with significant reporting requirements. It will have to report

cash on hand, 11 C.F.R. § 104.3(a)(l), as well as its receipts detailed in nine different

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 16 of 40
categories, 11 C.F.R. § 104.3(a)(2), including dividends, interest or other receipts over

$200. 11 C.F.R. § 104.3(a)(4)(vi). Furthermore, it will have to report disbursements

detailed in ten different categories, 11 C.F.R. § 104.3(b)(1), including the name and

address of each person to whom an "operating expenditure" is made over $200, 11 C.F.R.

§ 104.3(b)(3)(i), along with a host of other regulatory requirements. See generally 11

C.F.R. § 104. All this just to "talk about ranching." See EXHIBIT A (Free Speech AOR)

at 3, 17.

50. Beyond political committee registration and reporting demands, if Free Speech's

underlying advertisements are deemed "express advocacy," then a host of reporting

requirements are also triggered, further complicating and burdening its ability to get its

message out. Up to 20 days before an election, a political committee must report all

independent expenditures aggregating less than $10,000 with its regular reports. 11

C.F.R. § 104.4(b). Following this $10,000 threshold, additional $10,000 aggregates

require reporting within 48 hours. 11 C.F.R. § 104.4(b). Within 20 days before an

election, independent expenditures that aggregate to $1,000 or more must be reported

within 24 hours. 11 C.F.R. § 104.4(c). Even ifthe speech in question were regulable, the

Commission itself is not sure whether the scripts constitute express advocacy or

electioneering communications, each subject to wholly different reporting regimes. See

EXHIBIT K (Transcript ofFEC Open Meeting (relating to Free Speech), April 12, 2012)

at 9 ("Commissioner McGahn: .... As a practical matter, if you're a political committee

and you do an electioneering communication first, you don't have to file Form 9,

Electioneering Communication Reports. Those are only for non political committees. So

if you file Form 9, that means, I guess you're not a political committee, but then you are a

political committee so you didn't have to file that form. It just doesn't make any sense").

51. The members of Free Speech do not believe that they have sufficient resources and

knowledge, and cannot meaningfully exercise their First Amendment rights, if forced to

comply with the complicated registration and reporting regime at issue, including

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appointing a treasurer, the numerous reports that require disclosure of contributions in

nine categories and expenditures in ten categories, as well as detailed independent

expenditure reports. Having no alternatives but to either file suit or register and report as

a political committee when it is not, the vague and overbroad reach of the challenged

provisions and practices has effectively chilled Free Speech, already silencing it from

speaking this spring.

Ongoing Harm to Plaintiffs

52. Since initially filing suit, Free Speech has attracted new donor interest to support its issue

advocacy. But for the challenged provisions, Free Speech is now able to raise more than

$40,000 to fund new outreach. If allowed to speak, Free Speech would reach a variety of

diverse audiences nationwide through various targeted print publications. See

EXHIBITS N, O.

53. The 2012 election cycle already proves tumultuous. The longer Free Speech waits for

clear guidance about its speech, the less effective its message, and the more injury it

suffers. As soon as possible, Free Speech would like to engage in the issue advocacy

communications it detailed in its AOR. Free Speech would like to pay for advertisements

from its general fund to publicly discuss policy issues, legislation, President Obama, and

other topics. See EXHIBIT A at 2--4.

54. An example of a prohibited issue advocacy communication is listed as script "B" in the

AOR - "Environmental Policy." It reads: "President Obama opposes the Government

Litigation Savings Act. This is a tragedy for Wyoming ranchers and a boon to Obama's

environmentalist cronies. Obama cannot be counted on to represent Wyoming values and

voices as President. This November, call your neighbors. Call your friends. Talk about

ranching." EXHIBIT A at 3. This is but one example of relevant and locally popular

messages Free Speech believes are important to discuss both now and in the future.

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55. During the advisory opinion process, the Department of Labor attempted to implement

controversial rules that would have prohibited farm and ranch children from performing

common chores. See "US Labor Department proposes updates to child labor

regulations," U.S. Dep't of Labor, Aug. 31, 2011,

http://www.dol.gov/opa/media/press/whd/WHD20111250.htm. However, Free Speech

was prohibited from being able to "talk about ranching" due to the FEC's cumbersome

advisory opinion process. This proposed rule has now been withdrawn, and Free Speech

has forever lost its opportunity to speak out about that issue in connection with public

servants and candidates for public office during the time of its relevancy. See "Labor

Department statement on withdrawal of proposed rule dealing with children who work in

agricultural vocations," U.S. Dep't of Labor, Apr. 26, 2012,

http://www.dol.gov/opa/media/press/whd/WHD20120826.htm. Free Speech would still

like to speak out about ranching and the Obama Administration now and in the future as

detailed in the AOR and herein but cannot due to the unconstitutional regulations and

practices challenged by Plaintiff. I

56. In its AOR, Free Speech included detailed information about its immediate speech plans

for 2012. See EXHIBIT A at 2-4, Exhibits 2-3. Without a ruling enjoining the

challenged provisions and the FEC's practices, its First Amendment rights will be forever

lost in 2012.

I Similarly, the FEC has muted other organizations during the pendency of advisory opinion

processes and related litigation. In its most recent loss on constitutional grounds, Carey v. FEC,

the Commission thwarted a veterans and military group from speaking out about Representative

Weiner. 791 F.Supp.2d 121 (D. D.C. 2011). During the pendency of that litigation, the

infamous "Weinergate" scandal came to light, during which the organization was completely

muted from speaking about Representative Weiner due to the FEC's antics. See Martin Gould,

"Weiner Admits He Lied, But Won't Resign," Newsmax, June 6, 2011,

http://www.newsmax.com/InsideCover/Weiner-scandal-Breitbart-explicit/20 II/06/06/id/3990 19.

Here, the FEC continues this tired practice.

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57. Free Speech would like to tailor future messages to issues as they arise during and

beyond the 2012 electoral cycle. To avoid the vague and overbroad sweep of §

100.22(b), Free Speech must at minimum submit AORs for each new message to obtain

prior Commission "permission." Without a clear standard and practice in place, this

hinders-and may prevent entirely-Free Speech from effectively discussing pertinent

political issues.

58. While the FEC has adopted a "flexible" approach to determining express advocacy,

political committee status, and the major purpose test, this "flexibility" comes with a

significant price. These flexible, ad hoc policies may permit the FEC to regulate more

speech, but it results in practices and policies even the Commission cannot articulate or

apply consistently. These practices and policies have muted, do mute, and will mute Free

Speech from exercising its protected First Amendment freedoms. See City ofLakewood

v. Plain Dealer Pub. Co., 486 U.S. 750, 758 (1988) (speech permit program facially

unconstitutional because "post hoc rationalizations by the licensing official and the use of

shifting or illegitimate criteria are far too easy, making it difficult for courts to determine

in any particular case whether the licensor is permitting favorable, and suppressing

unfavorable, expression").

59. As soon as possible, Free Speech would like to solicit donations to support its issue

advocacy. It plans to distribute its fundraising requests bye-mail, pamphlet, or other

inexpensive means. Without an immediate ruling from this court, Free Speech will not

have the necessary time to fundraise and generate support for its message from

likeminded individuals. Whether or not it is a political committee, Free Speech must

include disclaimers with "solicitations" for "contributions," and does not know which

donation requests might meet this description. See 11 C.F.R. §§ 100.26, 11O.11 (a)(3),

11O.l1(b)(3).

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60. Free Speech would like to draft future fundraising requests beyond the 2012 electoral

cycle but can find no objective standard indicating which communications constitute

"solicitations" leading to "contributions" and which do not. 11 C.F.R. § 100.5(a),

Political Committee Status I, 69 Fed. Reg. at 68056-68059. Without clarity in this area,

Free Speech's ability to raise support and funds for its messaging is entirely halted.

61. Already, under the threat of registering and reporting, Free Speech has been forced to

seriously limit its efforts. If it desires to speak now, it must keep track of its current

finances as if it were a political committee, for if it must register and report, its first

report "shall also include all amounts received prior to becoming a political committee ..

. even ifsuch amounts were not received during the current reporting period." 11 C.F.R.

§ 104.3(a) (emphasis added). Its first report "shall also include all amounts disbursed

prior to becoming a political committee ... even if such amounts were not disbursed

during the current reporting period." 11 C.F.R. § 104.3(b) (emphasis added). Without

knowing whether one is a political committee, or how one becomes a political committee,

one must already act as if one were a political committee whether one can afford to do so

or not.

Free Speech's Structure and Operations

62. Free Speech is an unincorporated nonprofit association formed pursuant to the Wyoming

Uniform Nonprofit Association Act. Wyo. Stat. Ann. §§ 17-22-101 to 115. It has

registered as a "political organization" under 26 U.S.c. § 527 with the Internal Revenue

Service.

63. Free Speech wishes to spend more than $1,000 on communications discussing salient

issues of the day in connection with public servants and candidates for federal office.

The exact communications it proposed to disseminate are described in Exhibits 2 and 3 to

the AOR (EXHIBIT A), along with information concerning timing and budget costs.

Because the initial publication times for the advertisements (beginning April 1, 2012)

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have long since passed due to the FEC's cumbersome advisory opinion process, Free

Speech has modified its communication plans. See EXHIBITS N, O.

64. Since commencing this action, Free Speech has attracted new donor interest that will

allow it to present its issue advocacy to a nationwide audience if it obtains the relief

requested in this suit. See EXHIBITS N, O. These advertisements will be in addition to

the ads discussed in the First Verified Complaint.

65. Free Speech would like to disseminate the "Environmental Policy" scripts through radio

with a total proposed cost of $1,000, the "Gun Control" script on Facebook with a total

proposed cost of $700, as well as the "Financial Reform" script by newspaper and print

with a total proposed cost of $500. The allocation of costs for this campaign and dates of

each type of advertisement is included as EXHIBIT O. If allowed, these advertisements

would run at different times: radio ads soon after the grant of injunctive relief and

November 3, 2012; newsprint ads soon after the grant of injunctive relief and in October

2012; Facebook ads for one month following the grant of injunctive relief and between

October 1 and November 2, 2012. Free Speech is unable to run these ads given the

unconstitutional nature of the challenged regulations and the incoherent application of

them by the FEC.

66. Free Speech would like to disseminate a print version of the "Environmental Policy"

script in national magazines with a total proposed cost of $19,495, a print version of the

"Gun Control" script in a national newspaper with a proposed cost of $16,900, as well as

the "Financial Reform" script in a national magazine with a proposed cost of $2,691. See

~~ 18-20; EXHIBIT N. The allocation of costs for this campaign is included as

EXHIBIT O. If allowed, these advertisements would run at different times between

August and early November, 2012. Free Speech is unable to run these ads given the

unconstitutional nature of the challenged regulations and the incoherent application of

them by the FEe.

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67. Free Speech would like to make use of all of its proposed donation request scripts

detailed in the AOR but cannot given the FEC's unconstitutionally incoherent application

of the various regulations and rulings that determine whether requests for donations

constitute "solicitations" for "contributions." It would like to do so precisely so that it

may run additional issue advocacy advertisements in the future on similar issues.

68. Free Speech does not, and will not, engage in any speech that is "express advocacy" as

defined by the Supreme Court in Buckley, 424 U.S. at 44. That is, express advocacy

consists of "expenditures for communications that in express terms advocate the election

or defeat of a clearly identified candidate for federal office." Id. In contrast, "[i]ssue

advocacy conveys information and educates." WRTL, 551 U.S. at 470. Unlike express

advocacy, or certain other forms of speech, the government possesses no legitimate

interest in its regulation. Id. at 452 ("Issue ads ... are not equivalent to contributions,

and the corruption interest cannot justify regulating them").

69. Free Speech faces a credible threat of prosecution were it to engage in the activity

described herein without registering as a political committee, complying with political

committee requirements, providing legally sufficient disclaimers and disclosures on

solicitations and communications and otherwise conforming its activities to restrictions

set forth in the FECA and the FEC's regulations, and reporting its communications.

CAUSE OF ACTION 1

Claim of Unconstitutionality of 11 C.F.R. § lOO.22(b) - "Expressly Advocating"

70. Plaintiff realleges and incorporates by reference all of the allegations contained in all of

the preceding paragraphs.

71. On its face and as applied, § 100.22(b) is unconstitutional because it triggers a host of

regulatory burdens based on vague and overbroad standards in conflict with the First

Amendment. Plaintiff also challenges the policies and practices adopted in the FEC's

Explanation and Justification for Final Rules on Express Advocacy, 60 Fed. Reg. 35291

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(July 6, 1995), as the Commission relies on this document to shape the reach and

interpretation of § 100.22(b). In earlier challenges, other courts have declared 11 C.F.R.

§ 100.22(b) constitutionally infirm. See Maine Right to Life Committee v. FEC, 914 F.

Supp. 8 (D. Me. 1995), aff'd per curiam, 98 F.3d 1 (1st Cir. 1996); Right to Life of

Duchess Co., Inc. v. FEC, 6 F.Supp. 2d 248 (S.D.N.Y. 1998). This Court should do the

same.

72. Despite these glaring constitutional infirmities, the FEC has indicated that it was "able to

apply the alternative test set forth in 11 CFR 100.22(b) free of constitutional doubt based

on McConnell's statement that a 'magic words' test was not constitutionally required ...

." Political Committee Status II, 72 Fed. Reg. at 5604. In the present matter, three

commissioners indicated that § 100.22(b) remained "in effect". See EXHIBIT H at 2.

This is true even though both McConnell and Wisconsin Right to Life indicated that a

finding of express advocacy requires the presence of these "magic words." See

McConnell, 540 U.S. at 193; WRTL, 551 U.S. at 474 n.7.

73. Regulations imposing registration and reporting requirements for independent

expenditures, defined in 2 U.S.C. § 434 and codified in 2 C.F.R. § 104, are

unconstitutional unless the expenditures are for express advocacy communications. See

Buckley, 424 at 44 n.52 ("communications containing express words of advocacy of

election or defeat"); MCFL, 479 U.S. at 249. Section 100.22(b) does not limit itself to

express advocacy communications and is constitutionally invalid and exceeds the FEC's

statutorily limited authority under the FECA as a result. See 5 U.S.C. § 706; see also

Association ofData Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 156

(1970) (Administrative Procedure Act serves broad remedial purposes).

74. On its face, § 100.22(b) goes beyond any proper construction of express advocacy and

offers no clear guidelines for speakers to tailor their constitutionally protected conduct

and speech, subjecting them to criminal and civil penalties just for exercising protected

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First Amendment freedoms. If government officials are allowed to pore over proposed

communications to decide whether an unknown "external event," or an "electoral

portion," or the undefined "proximity to the election," in the view of "reasonable minds,"

triggers regulation and civil and criminal penalties, would-be speakers are chilled by the

very existence ofthis vague regulation.

75. On its face, § 100.22(b) goes beyond any proper construction of express advocacy by

failing to limit its application to expenditures for communications that in "express terms

advocate the election or defeat of a clearly identified candidate for federal office."

Buckley, 424 U.S. at 44. As a result, it is unconstitutionally overbroad. In accord with

the regulation's own language, speech may be regulated or penalized because issue

advocacy is deemed to be too "electoral" or an "external event" transforms it into express

advocacy. Thus, robust issue advocacy communications are suppressed by the threat of

the application of § 100.22(b), rendering it constitutionally infirm.

76. As applied, § 100.22(b) is unconstitutionally vague because the Commission maintains a

practice of applying a variety of ad hoc, case-by-case factors in each enforcement matter,

advisory opinion, and consideration ofthe regulation in question. The Commission never

makes public what factors it will consider, what (maximum) weights will be applied to

these factors, or how the actual weights will be determined, and cannot do so because the

Commission changes these things from case to case. See, e.g., Matter Under Review

("MUR") 6073 (Patriot Majority 527s), First General Counsel's Report ("FGCR") at 9

(FEC 2009) (the meaning of "expenditure" and express advocacy is found through a

"distillation ... through the enforcement process"); MUR 5831 (Softer Voices), FGCR at

10 (FEC 2008) (reasoning that communications which cast candidates in a "positive

light" constitute express advocacy"); MUR 5842 (Economic Freedom Fund), Statement

of Reasons of Commissioners Cynthia L. Bauerly and Ellen L. Weintraub at 4 (FEC

2009) (communications may become express advocacy if the Commission finds an

indeterminable "electoral nexus"); MUR 5988 (American Future Fund), Statement of

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Reasons of Chairman Steven T. Walther and Commissioners Cynthia L. Bauerly and

Ellen L. Weintraub at 12 (FEC 2009) (focusing too sharply on the "qualifications,

accomplishments, and fitness for office" of a candidate may transform speech into

express advocacy); MUR 5440 (The Media Fund), Transcript of Probable Cause Hearing

at 42-43 (FEC 2007) (speech that discusses a candidate in "strong terms" may be express

advocacy"); MUR 5634 (Sierra Club), FGCR at 11 (FEC 2005) (determination of express

advocacy is dependent upon the "reasonable mind" of the audience); MURs 6051 and

6052 (Wal-Mart Stores, Inc.), FGCR at 10 (FEC 2009) (examining a host of factors "on

balance" to decide ifspeech constitutes express advocacy). The Commission's practice

stands in stark defiance of already settled principles of First Amendment jurisprudence

protecting against vague speech practices and censorship and must be stricken. See

WRTL, 551 U.S. at 469 (First Amendment standards must "eschew 'the open-ended

rough-and-tumble of factors,' which 'invit[es] complex argument in a trial court and a

virtually inevitable appeal "') (citing Jerome B. Grubart, Inc. v. Great Lakes Dredge &

Dock. Co., 513 U.S. 527, 547 (1995)).

77. As applied, § 100.22(b) is unconstitutionally overbroad because the Commission

regularly applies it to cover protected issue advocacy communications in defiance of the

First Amendment. See, e.g., MUR 5988 (American Future Fund), Statement of Reasons

of Commissioners Weintraub, Bauerly, and Walther; MUR 5831 (Softer Voices),

Statement of Reasons of Commissioner Donald F. McGahn (providing an exhaustive list

of FEC matters illustrating the overreach of § 100.22(b)). The Buckley Court narrowed

the term "expenditure" due to both vagueness and overbreadth concerns. In order to

avoid overbreadth, the Court employed a bright-line rule, limiting regulation only to

those communications that used terms of express advocacy. 424 U.S. at 83-84. In this

way, the Court protected against sweeping in more protected speech than was necessary

to prevent corruption. Here, the FEC ignores this judicial wisdom and applies its

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regulations in defiance of these bright line rules, causing its regulation and practices to

suffer from overbreadth.

78. Section 100.22(b) stands in "excess of the statutory authority" of the FEC because it

violates the Supreme Court's limiting construction in Buckley and must be found void

under the Administrative Procedure Act ("APA"). 5 U.S.C. § 706.

79. In this instance, the Commission's set ofthree draft advisory opinions, two statements of

reasons, and one advisory opinion, almost all contradicting one another, plus the

initiating Plaintiffs advisory opinion request, illustrate the inherent vagueness and

overbreadth of the challenged regulation and practices when applied to Free Speech's

proposed conduct. Even the nation's premiere expert in election law itself does not

understand or agree upon the basic reach of express advocacy, causing the suppression of

First Amendment liberties nationwide. These challenged regulations and practices must

necessarily be stricken and injunctive relief awarded, along with other remedies, as a

result.

CAUSE OF ACTION 2

Claim of Unconstitutionality - Prior Restraint

80. Plaintiff re-alleges and incorporates by reference all of the allegations contained in all of

the preceding paragraphs.

81. Like the provisions at issue in Citizens United, § 100.22(b) and the challenged practices

here act as the functional equivalent of a prior restraint. "As a practical matter, however,

given the complexity of the regulations and the deference courts show to administrative

determinations, a speaker who wants to avoid threats of criminal liability and the heavy

costs of defending against FEC enforcement must ask a governmental agency for prior

permission to speak." Citizens United, 130 S.Ct. at 895. "If parties want to avoid

litigation and the possibility of civil and criminal penalties, they must either refrain from

speaking or ask the FEC to issue an advisory opinion approving ofthe political speech in

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question. Government officials pore over each word of a text to see if, in their judgment,

it accords with the l l-factor test they have promulgated. This is an unprecedented

governmental intervention into the realm of speech." Id. at 896. In this instance, the

evils worked by the FEC's maintenance of the challenged regulations, policies, and

practices far exceed those found in Citizens United, giving rise to the reliefrequested.

82. Section 100.22(b) and the challenged regulations, policies, and practices are the

foundation for the arbitrary actions of the FEC, allowing it to classify some speech as

express advocacy, with heavy regulations and compliance requirements, and other,

comparable speech as issue advocacy, with little to no regulation. But this line is never

known or understood in advance. Since the regulation itself provides no clear parameters

and the FEC's history of enforcement and interpretation only expands the reach of §

100.22(b), Free Speech is prevented from speaking about political issues. Free Speech's

only recourse is to plead with the Commission for permission to speak out about the

issues it cares about through the advisory opinion process, and to do so each time it

wishes to communicate a new message.

83. Even, in the current case, when a would-be speaker (Free Speech) has exhausted the

FEC's tiresome advisory opinion process in a good faith effort to comply with the law,

the FEC has failed to provide answers to its most basic legal questions, nor answer

whether Free Speech must comply with the regulation and practices in question. This is

not a novel occurrence. In the past, the Commission has deadlocked when asked about

basic definitions of the regulations it maintains, chilling speech all along the way. See

Citizens United, 2009 WL 1261928, *28-*31 (Brief of Amici Curiae, The Wyoming

Liberty Group and Goldwater Institute Scharf-Norton Center for Constitutional Litigation

in Support of Appellant). These practices leave Free Speech muted and illustrates that

the FEC's regulatory process operates as a prior restraint.

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84. Any system of prior restraint is necessarily in "excess of the statutory authority" of the

FEC because it violates the Constitution and First Amendment and must be found void

under the APA. 5 U.S.C. § 706.

85. "When the FEC issues advisory opinions that prohibit speech, '[m]any persons, rather

than undertake the considerable burden (and sometimes risk) of vindicating their rights

through case-by-case litigation, will choose simply to abstain from protected speechharming not only themselves but society as a whole, which is deprived of an uninhibited

marketplace of ideas." Citizens United, 130 S.Ct. at 896 (citing Virginia v. Hicks, 539

U.S. 113, 119 (2003)). Plaintiff has taken the rare stance of standing in opposition to the

FEC's system of prior restraint and seeks to have the challenged regulation and practices

declared constitutionally infirm, along with other remedies imposed.

CAUSE OF ACTION 3

Claim of Unconstitutionality - The "Solicitation" Standard

86. Plaintiffre-alleges and incorporates by reference all ofthe allegations contained in all of

the preceding paragraphs.

87. Plaintiff cannot realistically raise funds or seek donations due to the cumbersome

application of the FEC's vague solicitation standards. This inhibits it from associating

with likeminded individuals and speaking out to raise awareness of issues deemed

important to its members while raising financial support.

88. Before it was declared constitutionally invalid in EMILY's List, 581 F.3d at 17-18, the

FEC maintained 11 C.F.R. § 100.57 to define when funds received in response to

fundraising or donation requests would be deemed "contributions" under the law. 11

C.F.R. § 105(a); see also Political Committee I, 69 Fed. Reg. at 68056-59; Political

Committee II, 72 Fed. Reg. at 5602-03. The Commission announced that § 100.57 "will

not be enforced." "FEC Statement on the D.C. Circuit Court of Appeals Decision in

EMILY's List v. Federal Election Commission", Federal Election Comm'n, Jan. 12,

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2010, http://www.fec.gov/press/press2010/201 00112EmilyList.shtml. The Commission

subsequently approved the repeal of § 100.57. 75 Fed. Reg. 13223. It still leaves

unanswered, however, when funds received in response to fundraising requests constitute

"contributions" under the law and when fundraising requests are deemed "solicitations."

89. The FECA requires that any person who "solicits any contribution through any

broadcasting station, newspaper, magazine, outdoor advertising facility, mailing, or any

other type of general public political advertising" include a disclaimer. 2 U.S.C. 44 Id(a);

see also 11 C.F.R. § 110.II(a)(3).

90. In accord with FEe v. Survival Education Fund (SEF), 65 F.3d 285, 295 (2d Cir. 1995),

the Second Circuit held that a fundraising or donation request may fall within the reach of

the FECA and constitute a solicitation "if it contains solicitations clearly indicating that

the contributions will be targeted to the election or defeat of a clearly identified candidate

for federal office."

91. In Buckley, the Supreme Court narrowed the term "contribution" to mean only: (1)

donations to candidates, political parties, or campaign committees; (2) expenditures made

in coordination with a candidate or campaign committee; (3) donations given to other

persons or organizations but "earmarked for political purposes." Buckley, 424 U.S. at 24

n.78.

92. The SEF Court sought to avoid the "hazards of uncertainty" regarding the vague phrase

"political purposes" and limited its meaning to encompass only donations "that will be

converted to expenditures subject to regulation under FECA." 65 F.3d at 295.

"Expenditures subject to regulation under FECA" are those properly cabined by the

Buckley Court's express advocacy limitation. In addition, like the operative burdenshifting that occurred in Citizens United, giving "the benefit of doubt to protecting rather

than stifling speech," 130 S.Ct. at 891 (citing WRTL, 551 U.S. at 469), the SEF Court

required that a fundraising communication must "leaven no doubt that the funds

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contributed would be used to advocate [a candidate's election or] defeat at the polls, not

simply to criticize his policies during the election year." SEF, 65 F.3d at 295. This

approach articulates a clear standard to those who would fundraise in being able to draft

communications properly either as "solicitations" or outside of the reach of the FECA

and unencumbered.

93. During the Free Speech advisory opinion process, one set of commissioners explained

that the full reach of what constitutes a "solicitation" can be found only by toiling

through lengthy conciliation agreements and General Counsel Reports issued by the FEC

in enforcement matters. See EXHIBIT C (AO 2012-11 Draft B) at 17-18, n.6. This

same set of commissioners explained that even though EMILY's List struck § 100.57 as

unconstitutional, "nothing in the opinion undermined the general premise that a

solicitation that indicates that donated funds will be used to support or oppose the

election of a clearly identified candidate results in 'contributions." Id. Long live §

100.57.

94. Another set of commissioners reasoned in a draft advisory opinion that the SEF Court

meant what it stated and required clear indications that contributions would be "targeted

to the election or defeat of a clearly identified candidate for federal office." EXHIBIT D

(AO 2012-11 Draft C) at 38-39 (citing SEF, 65 F.3d at 295). This leads to a conclusion

that none of Plaintiffs proposed donation requests would constitute "solicitations" under

the law.

95. The FEC' s solicitation standard stands in "excess of the statutory authority" of the FEC

because it goes beyond any permissible construction of what constitutes a "contribution"

or "solicitation" under the FECA and must be found void under the APA. 5 U.S.C. §

706.

96. The nation's premiere expert on election law does not itself agree about what constitutes

a solicitation, inhibiting Free Speech from associating with likeminded individuals,

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speaking, and seeking financial support. As a result, these practices and policies must be

stricken and injunctive, and other remedial relief, awarded.

CAUSE OF ACTION 4

Claim of Unconstitutionality - "Major Purpose" and "Political Committee Status" Tests

97. Plaintiffs re-allege and incorporate by reference all of the allegations contained in all of

the preceding paragraphs.

98. A "political committee" is defined as any "committee, club, association, or other group of

persons that receives contributions aggregating in excess of $1,000 during a calendar year

or which makes expenditures aggregating in excess of $1,000 during a calendar year." 2

U.S.C. § 431(4)(A).

99. The Supreme Court limited the reach of political committee status by recognizing that the

FECA applied "to reach only funds used for communications that expressly advocate the

election or defeat of a clearly identified candidate." Buckley, 540 U.S. at 80. It also

limited the FECA to "only encompass organizations that are under the control of a

candidate or the major purpose of which is the nomination or election of a candidate"

(known as the "major purpose" test). Id. at 79; see also Colorado Right to Life

Committee, Inc. v. Coffman, 498 F.3d 1137 (10th Cir. 2007) (invalidating Colorado's

expansive major purpose test and imposing Buckley'S bright line, constitutionallymandated major purpose test).

100. Whether or not an organization must register and report as a "political committee"

is dependent upon the FEC's analysis of its major purpose. The FEC's interpretation and

enforcement policy concerning "political committee status" can be found in 69 Fed. Reg.

68056 and 72 Fed. Reg. 5595. In these documents, the Commission explains that it

maintains no objective rule for determining when "political committee" status is

triggered, and regulation required, but instead "requires the flexibility of a case-by-case

analysis of an organization's conduct." Political Committee II, 72 Fed. Reg. at 5601.

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Going further, these guidelines provide that there must a "fact intensive inquiry" to allow

"investigations into the conduct of specific organizations that may reach well beyond

publicly available statements" and this includes "spending on [f]ederal campaign

activity." Id.

101. The FEC openly admits that the "major purpose" it examines is "[f]ederal

campaign activity," not the "nomination or election of a candidate" as required by

Buckley to be the major purpose. See Political Committee II, 72 Fed. Reg. at 5605, cf

Buckley, 424 U.S. at 79. The relevant rulemakings concerning political committee status

also indicate that major purpose can be determined from, among other things: thank you

letters to donors, geographic targeting of speech, whether communications were

"attacking" candidates, and the relative timing of the cessation of a group's activities.

Political Committee II, 72 Fed. Reg. at 5604-05.

102. The FEC's supplemental Explanation and Justification from 2007 describes its

enforcement policy for the major purpose test to hinge on 11 C.F.R. §§ 100.22(b) and the

now-defunct 100.57. Political Committee II, 72 Fed. Reg. at 5602-05. Section 100.57

has subsequently been declared invalid in EMILY's List v. FEe, 581 F.3d 1,25 (D.C. Cir.

2009), but § 100.57 appears to live on through its reference and incorporation via the

supplemental Explanation and Justification for the regulation, as well as some

commissioners' continued invocation of § 100.57: "Emily's List invalidated 100.57 for

reasons wholly unrelated to the regulation's articulation of when a solicitation results in

[f]ederal contributions. Our draft's application of this premise is consistent with the

Commission's longstanding approach to this issue." EXHIBIT H (Free Speech Statement

I) at 2-3.

103. The major purpose test as fashioned by Buckley provides that an organization's

major purpose may be determined in one of two ways. 424 U.S. at 79. First, an entity's

independent expenditures may become so extensive as to classify it as a political

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committee. See MCFL, 479 U.S. at 262. Second, an organization's founding documents

may reveal its major purpose. See id. at 252 n.6 (in accord with the record submitted to

the Court, MCFL's "central organizational purpose is issue advocacy"). The first test

requires an analysis of the organization's annual spending on express advocacy

communications in comparison to its overall spending. The second test requires an

analysis of the foundational documents of an organization to discern whether there is an

intent to be organized as a political committee. The Buckley and MCFL major purpose

test acts as a constitutional restraint against imposing political committee burdens when

they would be otherwise unwarranted. Because the FEC expands the major purpose test,

and does so with no clarity, its political committee and major purpose practices must be

stricken.

104. The nation's premiere expert in election law does not itself understand or agree

upon the proper scope of what constitutes a political committee or the major purpose test.

Half of the commissioners would have imposed political committee status on Free

Speech through application of an open-ended and distorted major purpose analysis

imposing severe burdens on Free Speech, see EXHIBIT H, and half the commissioners

would have followed instructions from Buckley, MCFL, and other courts in applying

constitutionally limited standards. See EXHIBIT I. This leaves Plaintiff, as three

commissioners noted, in "legal limbo," EXHIBIT I at 3, and without any sense of when

its constitutionally protected conduct might trigger an investigation or criminal or civil

penalties by the FEC due to violations of these unknown and undefined political

committee and major purpose standards.

105. The FEC's political committee status policy and major purpose test stand in

"excess of the statutory authority" of the FEC because they go beyond any permissible

construction of constitutionally required standards and must be found void under the

APA. 5 U.S.C. § 706.

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106. Because there is no adequate remedy at law, this Court should grant injunctive

and declaratory relief, as well as other appropriate remedies, against the FEC for its

unconstitutional policies regarding the interpretation and application of political

committee status and its improper interpretation and application ofthe major purpose test

to the injury and detriment of Free Speech.

PRAYER FORRELIEF

Wherefore, Plaintiffs pray for the following relief:

1. A declaratory judgment that the definition of "express advocacy," established by the FEC

at 11 C.F.R. § 100.22(b), as well as its related enforcement policies and practices, are

unconstitutional on their face and as applied and beyond the reach of the FECA under 5

U.S.C. § 706.;

2. A declaratory judgment that the FEe's political committee status enforcement policies,

including the major purpose test and the definition of solicitation, are unconstitutional on

their face and as applied and beyond the reach ofthe FECA. 5 U.S.C. § 706;

3. Preliminary and permanent injunctions enjoining defendant FEC from enforcing §

100.22(b) and related enforcement policies and practices, and the FEC's political

committee status enforcement policies, including the major purpose test and the

definition of solicitation, as well as any applicable rules and regulations regarding those

provisions, against Free Speech and to all other entities similarly situated;

4. An award of nominal damages of $1 for the violation of Plaintiffs constitutional rights;

5. Costs and attorneys' fees pursuant to any applicable statute or authority, including 5

U.S.C. § 504 and 28 U.S.C. § 2412;

6. Any other relief that the Court deemsjust and appropriate.

Dated this 26th ofJuly, 2012.

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 35 of 40
BRINKMANN / FREE SPEECH VERIFICATION

I, Robert T. Brinkmann, declare as follows:

1. I am a member of Free Speech and a member of its Board of Directors.

2. I have personal knowledge of Free Speech and its activities, including those set out in this

Verified Complaint, and if called upon to testify I would competently testify as to the

matters stated herein.

3. I verify under penalty of perjury under the laws ofthe United States of America that the

factual statements contained in this Verified Complaint concerning Free Speech and its

existing and proposed activities are true and correct.

Executed on 1~ Uh ~, 2012.

Robert T. Brinkmann

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Case 2:12-cv-00127-SWS Document 24 Filed 07/26/12 Page 36 of 40
WATFORD VERIFICATION

I, Max Douglas Watford, Jr., declare as follows:

1. I am a member of Free Speech and a member ofits Board of Directors.

2. I have personal knowledge of Free Speech and its activities, including those set out in this

Verified Complaint, and if called upon to testify I would competently testify as to the

matters stated herein.

3. I verify under penalty of perjury under the laws ofthe United States of America that the

factual statements contained in this Verified Complaint concerning Free Speech and its

existing and proposed activities are true and correct.

Executed 0?1 ;2.(, ,2012.

Max Douglas tford, Jr.

~~~~

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CURLEY VERIFICATION

I, Charles Curley, declare as follows:

1. I am a member of Free Speech and a member ofits Board of Directors.

2. I have personal knowledge of Free Speech and its activities, including those set out in this

Verified Complaint, and if called upon to testify I would competently testify as to the

matters stated herein.

3. I verify under penalty of perjury under the laws ofthe United States ofAmerica that the

factual statements contained in this Verified Complaint concerning Free Speech and its

existing and proposed activities are true and correct.

Executed on ;tb~, 2012.

Charles Curley

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Respectfully submitted,

~t(L S ep en R. Klein*

Wyoming Liberty Group

1902 Thomes Ave

Ste.201

Cheyenne, WY 82001

307.632.7020 [Tel.]

307.632.7024 [Fax.]

stephen.klein@wyliberty.org

Benjamin T. Barr*

10737 Hunting Lane

Rockville, MD 20850

202.595.4671 [Tel.]

benjamin.barr@gmail.com

*Admitted Pro Hac Vice

Jack Speight (Wyoming Bar No. 4-0983)

4021 Snyder Ave

Cheyenne, WY 82001

307.635.1239 [Tel.]

jbspeight@gmail.com

Counsel ofRecord

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CERTIFICATE OF SERVICE

I hereby certify that on July 26, 2012, I served upon the below listed persons copies of

this document by electronic mail pursuant to FRCP 5(b)(2)(E):

Anthony Herman

Federal Election Commission

aherman@fec.gov

David Kolker

Federal Election Commission

dkolker@fec.gov

Nicholas Vassallo

United States Attorney's Office

nick.vassallo@usdoj.gov

Erin Chlopak

Federal Election Commission

echlopak@fec.gov

Lisa Stevenson

Federal Election Commission

lstevenson@fec.gov

Stephen Klein

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