UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

____________________________________

)

STOP THIS INSANTITY INC. )

EMPLOYEE LEADERSHIP FUND, et al., )

)

Plaintiffs, ) Civ. No. 12-1140 (BAH)

)

v. )

)

FEDERAL ELECTION COMMISSION, ) OPPOSITION TO 

) PRELIMINARY INJUNCTION

Defendant. )

____________________________________)

DEFENDANT FEDERAL ELECTION COMMISSION’S OPPOSITION TO

PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION

Anthony Herman (D.C. Bar No. 424643)

General Counsel

David Kolker (D.C. Bar No. 394558)

Associate General Counsel

Lisa J. Stevenson (D.C. Bar No. 457628)

Special Counsel to the General Counsel

Adav Noti (D.C. Bar No. 490714)

Acting Assistant General Counsel

FEDERAL ELECTION COMMISSION

999 E Street NW

Washington, DC 20463

August 10, 2012 (202) 694-1650

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 1 of 34
TABLE OF CONTENTS

LEGAL AND FACTUAL BACKGROUND ..................................................................................2

I. SEPARATE SEGREGATED FUNDS AND NON-CONNECTED PACs.........................2

II. “SUPER PACs” AND “NON-CONTRIBUTION ACCOUNTS” ......................................4

III. FACTUAL BACKGROUND AND ADMINISTRATIVE HISTORY...............................9

A. The Parties ...............................................................................................................9

B. STIELF’S Advisory Opinion Request...................................................................10

ARGUMENT............................................................................................................................12

I. STANDARD OF REVIEW...............................................................................................12

II. THE COMMISSION IS LIKELY TO PREVAIL ON THE MERITS OF THIS 

CASE BECAUSE THE CHALLENGED STATUTORY PROVISIONS FURTHER 

THE IMPORTANT GOVERNMENTAL INTERESTS OF DISCLOSING THE 

FUNDING OF CAMPAIGN SPEECH AND PREVENTING COERCION....................13

A. Permitting SSFs to Operate Non-Contribution Accounts Would Contravene 

Citizens United and SpeechNow by Facilitating Evasion of FECA’s 

Disclosure Requirements.......................................................................................14

1. Plaintiffs’ Proposed Relief Would Enable Corporations to Conceal 

Campaign-Related Spending .....................................................................15

2. There Is No Legal Basis for Permitting Corporations to Evade 

FECA’s Disclosure Provisions ..................................................................19

B. Preventing Corporations from Coercing Their Employees and Others into 

Making Unlimited Political Contributions Is a Compelling and Important 

Governmental Interest that Furthers First Amendment Values.............................22

III. PLAINTIFFS FACE NO COGNIZABLE HARM DURING THE PENDENCY 

OF THIS CASE... .............................................................................................................25

IV. THE BALANCE OF EQUITIES AND THE PUBLIC INTEREST WEIGH 

AGAINST ENJOINING ENFORCEMENT OF FECA’S DISCLOSURE AND 

ANTI-COERCION PROVISIONS....................................................................................26

CONCLUSION...........................................................................................................................28

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 2 of 34
ii

TABLE OF AUTHORITIES

Cases

Agostini v. Felton, 521 U.S. 203 (1997) ............................................................................ 19-20

Bowen v. Kendrick, 483 U.S. 1304 (1987) ..............................................................................27

Buckley v. Valeo, 424 U.S. 1 (1976)........................................................................................18

Carey v. FEC, 791 F. Supp. 2d 121 (D.D.C. 2011)......................................................... 7-8, 19

Charlesbank Equity Fund II v. Blinds To Go, Inc., 370 F.3d 151 (1st Cir. 2004)...................26

Christian Civic League of Me., Inc. v. FEC, 433 F. Supp. 2d 81 

(D.D.C. 2006) (three-judge court) ...............................................................................27

Citizens United v. FEC, 130 S. Ct. 876 (2010).......................................................... 4-5, 17, 25

Cobell v. Norton, 391 F.3d 251 (D.C. Cir. 2004) ....................................................................12

EMILY’s List v. FEC, 581 F.3d 1 (2009).............................................................................7, 19

FEC v. Beaumont, 539 U.S. 146 (2003) .............................................................................2, 17

FEC v. Nat’l Republican Senatorial Comm., 966 F.2d 1471 (D.C. Cir. 1992).......................11

FEC v. Nat’l Right to Work Comm., 459 U.S. 197 (1982) ..................................................4, 25

FEC v. Wis. Right to Life, 551 U.S. 449 (2007) (“WRTL”).....................................................20

Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006) .............13

Hicks v. Bush, 397 F. Supp. 2d 36 (D.D.C. 2005)...................................................................25

Mills v. District of Columbia, 571 F.3d 1304 (D.C. Cir. 2009)...............................................12

Nat’l Org. for Marriage v. McKee, 649 F.3d 34 (1st Cir. 2011),

cert. denied, 132 S. Ct. 1635 (2012)...................................................................... 18-19

NTEU v. United States, 927 F.2d 1253 (D.C. Cir. 1991).........................................................25

Purcell v. Gonzalez, 549 U.S. 1 (2006) (per curiam) ..............................................................13

Quince Orchard Valley Citizens Ass’n, Inc. v. Hodel, 872 F.2d 75 (4th Cir. 1989) ...............27

Real Truth About Obama, Inc. v. FEC, 575 F.3d 342 (4th Cir. 2009), 

vacated on other grounds, 130 S. Ct. 2371 (2010)......................................................27

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 3 of 34
iii

Republican Nat’l Comm. v. FEC, 698 F. Supp. 2d 150 (D.D.C. 2010) (three-judge court), 

aff’d mem., 130 S. Ct. 3544 (2010)..............................................................................17

Sherley v. Sebelius, 644 F.3d 388 (D.C. Cir. 2011)........................................................... 12-13

SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010) (en banc) ................................. 5-6, 18

Tenacre Foundation v. INS, 78 F.3d 693 (D.C. Cir. 1996) .....................................................26

Turner Broad. Sys., Inc. v. FCC, 507 U.S. 1301 (1993)..........................................................12

United States v. Danielczyk, 683 F.3d 611 (4th Cir. 2012) .....................................................20

United States v. Oakland Cannabis Buyer’s Co-op., 532 U.S. 483 (2001).............................27

Univ. of Tex. v. Camenisch, 451 U.S. 390 (1981)....................................................................12

Van Hollen v. FEC, --- F. Supp. 2d ----, Civ. No. 11-766, 2012 WL 1066717 

(D.D.C. Mar. 30, 2012).......................................................................................... 20-21

Veitch v. Danzig, 135 F. Supp. 2d 32 (D.D.C. 2001) ..............................................................12

Wagner v. Taylor, 836 F.2d 566 (D.C. Cir. 1987)...................................................................25

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) ..................................... 12-13, 25

Wis. Gas Co. v. FERC, 758 F.2d 669 (D.C. Cir. 1985)...........................................................25

Statutes and Regulations

Federal Election Campaign Act, 2 U.S.C. §§ 431-57 (“FECA”) ..............................................2

2 U.S.C. § 431(4)(A)....................................................................................................18

2 U.S.C. § 431(4)(B)......................................................................................................2

2 U.S.C. § 431(8)(B)(vi)................................................................................................3

2 U.S.C. § 431(9)(B)(v).................................................................................................3

2 U.S.C. § 431(17).........................................................................................................4

2 U.S.C. § 434(a) ...........................................................................................................3

2 U.S.C. § 434(b)...........................................................................................................3

2 U.S.C. § 434(b)(4) ....................................................................................................15

2 U.S.C. § 434(f)(3)(A)(i)..............................................................................................4

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 4 of 34
iv

2 U.S.C. § 437c(b)(1).....................................................................................................9

2 U.S.C. § 437c(c)........................................................................................................11

2 U.S.C. § 437d(a)(7)...............................................................................................9, 11

2 U.S.C. § 437d(a)(8).....................................................................................................9

2 U.S.C. § 437f ..............................................................................................................9

2 U.S.C. § 437g..............................................................................................................9

2 U.S.C. § 438(a)(8).......................................................................................................9

2 U.S.C. § 441a(a)(1)(C)..........................................................................................3, 22

2 U.S.C. § 441b..............................................................................................................8

2 U.S.C. § 441b(a) .....................................................................................................2, 4

2 U.S.C. § 441b(b)(2) ................................................................................................2, 4

2 U.S.C. § 441b(b)(2)(C)..................................................................................... 2-3, 14

2 U.S.C. § 441b(b)(3)(B)-(C) ..................................................................................4, 23

2 U.S.C. § 441b(b)(4) ....................................................................................................2

2 U.S.C. § 441b(b)(4)(A)(i)........................................................................... 3-4, 11, 24

2 U.S.C. § 441b(b)(4)(B)........................................................................4, 10-11, 22-23

2 U.S.C. § 441c..........................................................................................................3, 8

2 U.S.C. § 441e..........................................................................................................3, 8

Federal Election Campaign Act Amendments of 1976, Pub. L. No. 94-283, § 112(2), 

90 Stat. 475, 490-92 (1976) .........................................................................................12

26 U.S.C. § 501(c)(4).................................................................................................................9

11 C.F.R. § 106.6(c).................................................................................................................19

11 C.F.R. § 106.6(f).................................................................................................................19

11 C.F.R. § 114.5(b) ............................................................................................................3, 15

11 C.F.R. § 114.5(e)(1)........................................................................................................3, 15

11 C.F.R. § 114.5(e)(3)..............................................................................................................3

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 5 of 34
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11 C.F.R. § 114.5(f)......................................................................................................... 2-3, 22

11 C.F.R. § 114.5(g) ..................................................................................................................2

11 C.F.R. § 114.5(g)(1).......................................................................................................... 3-4

11 C.F.R. § 114.6.......................................................................................................................4

Administrative Materials and FEC Filings

FEC Advisory Op. 2010-09, http://saos.nictusa.com/aodocs/AO%202010-09.pdf 

(July 22, 2010) (“Club for Growth AO”).......................................................... 7, 16, 26

FEC Advisory Op. 2010-11, http://saos.nictusa.com/aodocs/AO%202010-11.pdf 

(July 22, 2010) ...............................................................................................................6

FEC, Funds Received in Response to Solicitations; Allocation of Expenses by Separate 

Segregated Funds and Nonconnected Committees, 75 Fed. Reg. 13,223, 13,224 

(Mar. 19, 2010) ............................................................................................................19

FEC, Statement on Carey v. FEC: Reporting Guidance for Political Committees that 

Maintain a Non-Contribution Account, 

http://www.fec.gov/press/Press2011/20111006postcarey.shtml (Oct. 5, 2011)............8

Letter from Dan Backer, Esq., to FEC Office of General Counsel, 

http://query.nictusa.com/pdf/390/10030482390/10030482390.pdf (Oct. 20, 2010).....9

Letter from Dan Backer, Esq., to Thomasenia Duncan, General Counsel, 

http://saos.nictusa.com/aodocs/1148154.pdf (Aug. 11, 2010).......................................7

STI, FEC Form 1, http://query.nictusa.com/pdf/131/10030264131/10030264131.pdf 

(March 9, 2010) .............................................................................................................9

STI, FEC Form 3X, http://query.nictusa.com/pdf/001/10931540001/10931540001.pdf 

(Oct. 16, 2010)...............................................................................................................9

STIELF, FEC Form 1, http://query.nictusa.com/pdf/650/12030701650/12030701650.pdf 

(Jan. 4, 2012)................................................................................................................10

STIELF, FEC Form 3X, http://query.nictusa.com/pdf/499/12952407499/12952407499.pdf 

(July 13, 2012) .............................................................................................................10

Miscellaneous

STI, www.theteaparty.net ........................................................................................................16

Tom Van Riper, The Wal-Mart Squeeze, Forbes (Apr. 24, 2007), http://www.forbes.com/

2007/04/23/walmart-suppliers-margins-lead-cx_tvr_0423walmart.html ....................24

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 6 of 34
Contrary to plaintiffs’ inflamed rhetoric, this case is not about a corporation’s First 

Amendment right to finance independent campaign advocacy. That right is undisputed and is 

not at issue here. Rather, the question presented here is whether the Constitution entitles a 

corporation, such as plaintiff Stop This Insanity, Inc., to finance its electoral advocacy through 

an accounting device that serves to conceal the corporation’s political spending from the public,

and enables the corporation to pressure its employees and others into funding its candidate

advocacy. Because the government has an important interest in enhancing disclosure of 

campaign spending and preventing potential coercion of contributors, the First Amendment does 

not require the government to permit the mechanism plaintiffs seek. 

Put more directly, Stop this Insanity, Inc. (“STI”), a non-profit corporation, has a separate 

segregated fund — Stop This Insanity, Inc. Employee Leadership Fund (“STIELF”) — which is 

registered with the Federal Election Commission as a political committee. At the present time, 

STIELF has a single bank account into which it receives contributions that are subject to the 

limitations, prohibitions, and reporting requirements of the Federal Election Campaign Act. 

STIELF uses this account to make direct contributions to candidates. Through this lawsuit, 

STIELF seeks to open a second federal account — a non-contribution account — into which it 

would solicit unlimited individual and corporate contributions, and it would use those funds to 

finance independent expenditures. The Act currently prohibits STIELF from opening such an 

account. However, STI itself can already, consistent with existing law, solicit and spend such 

funds — either directly or through the creation of a separate political committee (commonly 

called a “PAC”). As noted, jumping through the hoops of setting up a second account under the 

auspices of its separate segregated fund, rather than directly raising and spending the funds itself, 

permits STIELF to avoid FECA’s disclosure obligations and to bypass some of its anti-coercion

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 7 of 34
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provisions. This utterly fails to provide a valid basis to enjoin the Commission from enforcing a 

statutory provision that has been in place for over 35 years. Plaintiffs therefore cannot 

demonstrate that they are likely to succeed on the merits of their claims, and their motion for a 

preliminary injunction should be denied.

LEGAL AND FACTUAL BACKGROUND

I. SEPARATE SEGREGATED FUNDS AND NON-CONNECTED PACs

The Federal Election Campaign Act, 2 U.S.C. §§ 431-57 (“FECA”), prohibits a 

corporation such as STI from contributing its general treasury funds to any federal candidate, 

political party, or political committee. See 2 U.S.C. § 441b(a); see generally FEC v. Beaumont, 

539 U.S. 146 (2003) (upholding constitutionality of provision). This prohibition encompasses 

not only direct monetary contributions, but also a corporation’s giving of any “indirect payment 

. . . , any services, or anything of value.” See 2 U.S.C. § 441b(b)(2). FECA does, however, 

permit a corporation to establish and administer its own PAC, defined as a “separate segregated 

fund” (“SSF”). 2 U.S.C. §§ 431(4)(B), 441b(b)(2)(C). A corporation can solicit contributions to 

its SSF, see 2 U.S.C. § 441b(b)(4); 11 C.F.R. § 114.5(g), and the corporation can make 

contributions to candidates and political parties with the funds the SSF receives in response to

such solicitations. See 11 C.F.R. § 114.5(f).1

 Plaintiff Stop This Insanity Inc. Employee 

Leadership Fund is STI’s separate segregated fund or SSF. 

For the most part, FECA regulates SSFs in the same way it regulates PACs that are not 

established by a corporation (the latter known as “non-connected” PACs). For example, every

 1 The FECA provisions and FEC regulations relating to corporate election activity also 

generally apply to labor unions. For example, like corporations, labor unions may not make 

direct contributions, 2 U.S.C. § 441b(a), but may establish SSFs, 2 U.S.C. § 441b(b)(2)(C). 

Because no labor union is a party to this case, the Commission’s brief focuses almost exclusively 

on corporations and corporate SSFs. But each of the arguments herein would apply equally to 

union-sponsored SSFs. See, e.g., infra p. 24 & n.17 (discussing how plaintiffs’ desired relief 

would facilitate coercion of contributions by corporations or unions).

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 8 of 34
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PAC, whether an SSF or a non-connected PAC, must register with the FEC and periodically file 

public disclosure reports. 2 U.S.C. § 434(a); 11 C.F.R. § 114.5(e)(3). These reports must

provide certain information regarding each of the PAC’s “contributions” and “expenditures,” i.e., 

the funds it receives and spends. 2 U.S.C. § 434(b). And FECA limits contributions to any PAC 

to $5,000 per contributor per year. 2 U.S.C. § 441a(a)(1)(C); 11 C.F.R. § 114.5(f).

There are, however, two significant differences between the statutory provisions 

governing SSFs and those governing non-connected PACs. First, as an exception to the ban on 

corporate contributions, an SSF may have the entire costs of its “establishment, administration, 

and solicitation” paid directly by the SSF’s sponsoring corporation. 2 U.S.C. § 441b(b)(2)(C); 

11 C.F.R. § 114.5(b). These corporate payments are statutorily excluded from FECA’s 

definitions of “contribution” and “expenditure,” so SSFs need not include such payments in their 

reports to the Commission or otherwise disclose them to the public. See 2 U.S.C. 

§§ 431(8)(B)(vi), (9)(B)(v), 434(b); 11 C.F.R. § 114.5(e)(1). Non-connected PACs, by contrast,

have no sponsoring corporation, so they must pay their administrative and solicitation costs with

the ordinary contributions they receive, which are reported under 2 U.S.C. § 434(b).

Second, FECA places greater restrictions on solicitations by SSFs than on solicitations by 

non-connected PACs. Non-connected PACs can solicit contributions from essentially anyone 

who is not a foreign national or a federal contractor. See 2 U.S.C. §§ 441c, 441e. But an SSF

can solicit contributions only from its connected corporation’s owners and salaried executives 

(and those owners’ and executives’ families). See 2 U.S.C. § 441b(b)(4)(A)(i); 11 C.F.R. 

§ 114.5(g)(1). There is a limited exception allowing an SSF to solicit from its connected 

corporation’s non-executive employees, but such solicitations may be conducted only twice per 

year, and only pursuant to detailed statutory and regulatory provisions that limit the coercive 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 9 of 34
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effect of a corporation asking its employees to give it money. See 2 U.S.C. § 441b(b)(4)(B) 

(providing that solicitation can be made “only by mail addressed to . . . employees at their 

residence and . . . so designed that the corporation . . . cannot determine who makes a 

contribution of $50 or less . . . and who does not make such a contribution”); 2 U.S.C. 

§ 441b(b)(3)(B)-(C) (requiring solicitations of employees to inform each employee “of the 

political purposes of such fund at the time of such solicitation” and “of his right to refuse to so 

contribute without any reprisal”); 11 C.F.R. § 114.6. An SSF cannot solicit contributions from 

the general public, i.e., anyone other than the sponsoring corporation’s owners, executives, and 

employees. See 2 U.S.C. § 441b(b)(4)(A)(i); 11 C.F.R. § 114.5(g)(1). “The effect of [these 

provisions] is to limit solicitation by . . . corporations to those persons attached in some way to it 

by its corporate structure.” FEC v. Nat’l Right to Work Comm., 459 U.S. 197, 202 (1982).

II. “SUPER PACs” AND “NON-CONTRIBUTION ACCOUNTS”

FECA’s statutory text prohibits corporations from using their general treasury funds to 

finance any political expenditure. 2 U.S.C. § 441b(a). As codified, this prohibition encompasses

“independent expenditures,” which are communications that expressly advocate the election or 

defeat of a federal candidate and are not made in coordination with a candidate or political party. 

See 2 U.S.C. § 431(17). It also includes “electioneering communications,” which are “broadcast, 

cable, or satellite communication[s]” that (a) refer to a clearly identified federal candidate, and 

(b) are broadcast in the area where the candidate is seeking election within sixty days before the 

general election or thirty days before a primary election or convention. 2 U.S.C. §§ 441b(b)(2), 

434(f)(3)(A)(i). 

In Citizens United v. FEC, 130 S. Ct. 876 (2010), the Supreme Court struck down 

FECA’s prohibition on corporation-funded campaign advocacy as a violation of the First 

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Amendment. The Court noted that the government has an important interest in preventing 

corruption, and that limiting direct contributions to candidates reduces the opportunity for 

actually and apparently corrupt exchanges of governmental action for campaign funds. See id. at

901-02, 908. But the Court held that this governmental interest is inapplicable to independent

advocacy about candidates, which does not pose the same risk of corruption. Id. at 908-11. 

Thus, the Court held that corporations have a constitutional right to spend their general treasury 

funds on independent expenditures for or against candidates. Id. at 913.

Although Citizens United struck down the prohibition on corporate financing of 

independent speech, the Court upheld FECA’s requirement that all corporation-funded 

electioneering be disclosed to the Commission and the public. Specifically, the Court upheld the 

FECA provision mandating disclosure of funds used to finance any broadcast communication 

that mentions a federal candidate in the relevant jurisdiction in the period leading up to an 

election. See Citizens United, 130 S. Ct. at 914-16. Eight Justices agreed that disclosure is “less 

restrictive” than a limit on spending, id. at 915, and is a constitutionally permissible method of 

furthering the public’s important interest in knowing who is responsible for pre-election 

communications about candidates, see id. at 915-16. As the Court explained, “[t]he First 

Amendment protects political speech; and disclosure permits citizens and shareholders to react to 

the speech . . . in a proper way. This transparency enables the electorate to make informed

decisions and give proper weight to different speakers and messages.” Id. at 916. 

Three months later, the D.C. Circuit applied Citizens United to hold that FECA’s $5,000 

limit on contributions to PACs was unconstitutional as applied to a non-connected PAC that

spent its funds only on independent advocacy and was funded only by individual contributions.

SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010) (en banc). Such PACs, the court found, 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 11 of 34
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present no more risk of corrupting officeholders through independent expenditures than do

corporations, and so the court held that FECA’s $5,000 contribution limit was not supported by a 

sufficient governmental interest in that context. See id. at 693-95. But, as the Supreme Court 

had done in Citizens United, the D.C. Circuit affirmed the constitutionality of mandatory 

disclosure of political spending “based on a governmental interest in ‘provid[ing] the electorate 

with information’” about the sources of election-related funds. Id. at 696 (quoting Buckley v. 

Valeo, 424 U.S. 1, 66 (1976)). The circuit court therefore held that the government can 

constitutionally require all PACs — including those exempt from limits on the contributions they 

receive — to report all of their income and spending, “no matter whether the [funds] were 

[given] towards administrative expenses or independent expenditures.” Id. at 698.

After Citizens United and SpeechNow, therefore, the state of the law was that 

corporations were permitted to spend unlimited funds to finance independent campaign 

advocacy, and individuals were permitted to make unlimited contributions to non-connected 

PACs that made only independent expenditures — with all such unlimited spending and giving

subject to disclosure requirements. The FEC subsequently issued an advisory opinion 

determining that these cases, when read in tandem, necessarily meant that both corporations and 

individuals have a constitutional right to pool their money together to finance independent 

expenditures. See FEC Advisory Op. 2010-11, http://saos.nictusa.com/aodocs/AO%202010-

11.pdf (July 22, 2010). The Commission therefore found that a non-connected PAC that makes

only independent expenditures — not contributions to candidates — can accept unlimited 

contributions from both corporations and individuals. Id. These PACs have come to be known 

as “super PACs.” 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 12 of 34
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The Commission similarly found, in a separate advisory opinion issued on the same day,

that corporations have the right to directly establish and administer super PACs. See FEC 

Advisory Op. 2010-09, http://saos.nictusa.com/aodocs/AO%202010-09.pdf (July 22, 2010)

(“Club for Growth AO”). Such corporation-established super PACs are not SSFs, id. at 5, so 

they are not bound by FECA’s prohibition on soliciting the general public for contributions to 

SSFs, id. at 4.

Three weeks after the Commission issued the foregoing advisory opinions, a nonconnected PAC submitted an advisory opinion request seeking permission to establish two bank 

accounts: one to accept individual contributions within the $5,000 limit, and one to accept 

unlimited individual and corporate contributions. See Letter from Dan Backer, Esq., to 

Thomasenia Duncan, General Counsel, http://saos.nictusa.com/aodocs/1148154.pdf (Aug. 11, 

2010). This PAC proposed to finance contributions to candidates from the first account and 

independent expenditures from the second. Id. at 1-2. After the Commission was unable to 

approve an advisory opinion, the PAC and certain affiliated individuals then filed suit in this 

district, seeking a preliminary injunction. Carey v. FEC, 791 F. Supp. 2d 121 (D.D.C. 2011). 

The Court awarded the plaintiffs a preliminary injunction, finding that they were likely to 

succeed on the merits of their claim. See id. at 132. The Court relied on the D.C. Circuit’s 

opinion in EMILY’s List v. FEC, 581 F.3d 1 (2009), which had held (prior to Citizens United)

that a non-connected PAC had a constitutional right to establish two accounts: one for accepting 

limited individual contributions for making contributions to candidates, and one for accepting 

unlimited contributions to finance the PAC’s independent expenditures and certain other 

independent election activity. See Carey, 791 F. Supp. 2d at 129-31 (discussing EMILY’s List, 

581 F.3d at 5-8, 12). The Court thus held that, pursuant to EMILY’s List, Citizens United, and 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 13 of 34
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SpeechNow, a non-connected PAC must be permitted to operate a bank account to accept

unlimited contributions for making independent expenditures, even if the non-connected PAC 

also makes contributions to candidates from a different account. Carey, 791 F. Supp. 2d at 132.

After the Court in Carey granted an injunction, the Commission entered into a consent 

judgment permitting non-connected PACs that make contributions to candidates to maintain a 

separate bank account containing unlimited individual and corporate contributions for financing 

independent expenditures. See FEC, Statement on Carey v. FEC: Reporting Guidance for 

Political Committees that Maintain a Non-Contribution Account, 

http://www.fec.gov/press/Press2011/20111006postcarey.shtml (Oct. 5, 2011). Such unlimited 

accounts are known as “non-contribution accounts” because PACs cannot make contributions 

from them.

2

 See id.

In sum, a non-connected PAC can now (1) make contributions to candidates using funds 

contributed by individuals within FECA’s contribution limits, and (2) finance independent 

expenditures from a separate non-contribution account that is exempt from contribution 

restrictions.

3

 Similarly, a corporation can (1) make contributions to candidates from its SSF, 

which can accept only individual contributions subject to FECA’s contribution limits, and 

(2) finance independent expenditures directly or through its super PAC, which is not subject to 

contribution limits. 

 2 Plaintiffs describe these accounts as “Carey accounts,” but that is neither a term of art nor 

a widely used descriptor akin to “PAC” or “super PAC.”

3 Foreign nationals, government contractors, national banks, and corporations organized by 

authority of any law of Congress cannot contribute to such separate accounts. 2 U.S.C. §§ 441b, 

441c, 441e.

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 14 of 34
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III. FACTUAL BACKGROUND AND ADMINISTRATIVE HISTORY

A. The Parties

The FEC is the agency of the United States government with statutory authority over the 

administration, interpretation, and civil enforcement of the FECA and other federal campaign 

finance statutes. Congress has empowered the Commission to “formulate policy” with respect to 

FECA, 2 U.S.C. § 437c(b)(1); “to make, amend, and repeal such rules . . . as are necessary to 

carry out the provisions of [FECA],” 2 U.S.C. §§ 437d(a)(8), 438(a)(8); to issue advisory 

opinions concerning the application of FECA or the Commission’s regulations to proposed 

transactions or activities, 2 U.S.C. §§ 437d(a)(7), 437f; and to civilly enforce FECA, 2 U.S.C. 

§ 437g.

Plaintiff Stop This Insanity, Inc. is a non-profit corporation incorporated in Arizona that 

has filed for tax-exempt status as a “social welfare” organization. (See Compl. ¶ 18; 26 U.S.C. 

§ 501(c)(4).) In March 2010, STI registered with the Commission as a non-connected PAC.4

 

From March through September of that year, STI raised over $470,000 in contributions and spent 

approximately $215,000.

5

 On October 20, 2010, STI rescinded its registration as a political 

committee and ceased filing financial disclosure reports with the Commission.6

 STI alleges that 

it “has no interest in financing independent expenditures.” (Compl. ¶ 12.)

As previously noted, plaintiff Stop This Insanity Inc. Employee Leadership Fund is STI’s 

separate segregated fund. (Compl. ¶ 17.) STIELF registered with the Commission as an SSF in 

 4 STI, FEC Form 1, http://query.nictusa.com/pdf/131/10030264131/10030264131.pdf 

(March 9, 2010). All of STI’s FEC filings can be viewed at http://query.nictusa.com/cgibin/fecimg/?C00478024.

5 STI, FEC Form 3X, http://query.nictusa.com/pdf/001/10931540001/10931540001.pdf 

(Oct. 16, 2010).

6 Letter from Dan Backer, Esq., to FEC Office of General Counsel, 

http://query.nictusa.com/pdf/390/10030482390/10030482390.pdf (Oct. 20, 2010).

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 15 of 34
10

January 2012,

7 but as of June 30, 2012, it had received no contributions and had an account 

balance of $0.8 STIELF alleges a desire to make direct contributions to candidates (id. ¶ 23), and 

to establish a non-contribution account that would accept unlimited individual and corporate 

contributions to finance independent expenditures (id. ¶ 28). STIELF would like to solicit 

unlimited contributions from STI’s executives and from individuals and corporations unaffiliated 

with STI. (Id.) STIELF would also like to solicit contributions from STI’s non-executive 

employees “as provided under 2 U.S.C. § 441b(b)(4)(B).” (Compl. ¶ 77; see also id. ¶ 9, Prayer 

for Relief ¶ 3.) STIELF intends to have some or all of its administrative and solicitation 

expenses paid directly by STI. (See Compl. ¶¶ 12, 23.)

Plaintiff Todd Cefaratti is the president of STI (Compl. ¶ 19). He would like to 

contribute $10,000 to STIELF to finance STI’s independent expenditures. (Id. ¶ 26.) Plaintiff 

Ladd Ehlinger is not formally affiliated with STI but would like to “support” STI’s independent 

expenditures, and STI would like to solicit him for contributions to STIELF. (Id. ¶¶ 21, 27.) 

Plaintiff Glengary LLC is a corporation incorporated in Arizona that would like to contribute 

$10,000 to STIELF to finance STI’s independent expenditures. (Id. ¶¶ 20, 25).

B. STIELF’S Advisory Opinion Request

On January 4, 2012, STIELF filed with the Commission a request for an advisory 

opinion. (Compl. Exh. A.) This request sought the Commission’s approval for STIELF’s plan

to solicit and accept unlimited corporate and individual contributions into a non-contribution 

 7 STIELF, FEC Form 1, http://query.nictusa.com/pdf/650/12030701650/12030701650.pdf 

(Jan. 4, 2012). All of STIELF’s FEC filings can be viewed at http://query.nictusa.com/cgibin/fecimg/?C00508697.

8 STIELF, FEC Form 3X, 

http://query.nictusa.com/pdf/499/12952407499/12952407499.pdf (July 13, 2012).

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11

account without being subject to the restrictions on SSF solicitations in 2 U.S.C. 

§ 441b(b)(4)(A)(i) and (b)(4)(B). (Id. at 4.)

The Commission considered two draft responses to STIELF’s request. Draft A would 

have approved STIELF’s request and would have permitted STIELF to solicit contributions to its 

non-contribution account from the general public. (Compl. Exh. B. at 7, 12-14.) But the draft

would also have maintained the statutory restrictions on SSF solicitations to STI’s non-executive 

employees because those restrictions serve an important governmental interest — preventing 

employee coercion — that no judicial opinion has called into question. (Id. at 9-10.)

Draft B would have concluded that neither the holdings nor the rationales of EMILY’s 

LIST, SpeechNow, or Carey — all of which addressed non-connected PACs — mandated

allowing SSFs to operate non-contribution accounts. (See Compl. Exh. C at 5-6.) This draft 

noted that the statutory disclosure exemption for corporate payments covering the SSF’s 

solicitation expenses, when combined with STIELF’s intention to solicit funds from the general 

public, would mean that significant corporate political spending would go undisclosed if the SSF 

could operate a non-contribution account. (See id. at 6, 10.) 

On March 1, 2012, three FEC Commissioners voted to adopt Draft A, and three voted to 

adopt Draft B. (Compl. Exh. D.) Because the affirmative vote of four Commissioners is 

required for the Commission to render an advisory opinion, 2 U.S.C. §§ 437c(c), 437d(a)(7), the 

Commission was unable to render an opinion on STIELF’s request. 

Plaintiffs filed this suit on July 10, 2012. The Commission defends here the position of 

the “controlling group” of three Commissioners who declined to approve Draft A — the draft

that would have provided plaintiffs the relief they sought. Cf. FEC v. Nat’l Republican 

Senatorial Comm., 966 F.2d 1471, 1476 (D.C. Cir. 1992) (explaining that when suit challenges 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 17 of 34
12

action on which Commission deadlocked, subject of judicial review is position of controlling 

group of Commissioners).

ARGUMENT

I. STANDARD OF REVIEW

A preliminary injunction is “an extraordinary remedy that may only be awarded upon a 

clear showing that the plaintiff is entitled to such relief. . . . [It is] never awarded as of right.” 

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22, 24 (2008); see Cobell v. Norton, 391 

F.3d 251, 258 (D.C. Cir. 2004). To prevail on a motion for a preliminary injunction, a plaintiff 

“must establish”: “that he is likely to succeed on the merits, that he is likely to suffer irreparable 

harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an 

injunction is in the public interest.” Winter, 555 U.S. at 20; Mills v. District of Columbia, 571 

F.3d 1304, 1308 (D.C. Cir. 2009). 

Plaintiffs here shoulder a particularly heavy burden because their requested relief “would 

alter, not preserve, the status quo.” Veitch v. Danzig, 135 F. Supp. 2d 32, 35 (D.D.C. 2001). 

The purpose of a preliminary injunction “is merely to preserve the relative positions of the 

parties until a trial on the merits can be held,” Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 

(1981); Sherley v. Sebelius, 644 F.3d 388, 398 (D.C. Cir. 2011), but plaintiffs here seek to upend 

the status quo by preventing the Commission from enforcing a statutory provision that has been 

in place for over 35 years.9

 Cf. Turner Broad. Sys., Inc. v. FCC, 507 U.S. 1301 (1993) 

(Rehnquist, C.J., in chambers) (refusing to enjoin enforcement of federal statute in First 

Amendment challenge and noting that “[b]y seeking an injunction, applicants request that I issue 

an order altering the legal status quo”) (emphasis in original). This is particularly inappropriate 

 9 The SSF-related provisions at issue here were enacted in the Federal Election Campaign 

Act Amendments of 1976, Pub. L. No. 94-283, § 112(2), 90 Stat. 475, 490-92 (1976).

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in the pre-election context, where “considerations specific to election cases” weigh even further 

against the issuance of injunctions. Purcell v. Gonzalez, 549 U.S. 1, 4 (2006) (per curiam) 

(vacating lower court’s injunction against enforcement of election statute and noting potential for 

pre-election injunctions to cause confusion among voting public). 

Contrary to plaintiffs’ assertion (Pls.’ Mem. of L. in Support of Mot. for Prelim. Inj. at 16

(Dkt. No. 4-1) (“Pls.’ Mem.”)), the decision in Gonzales v. O Centro Espirita Beneficente Uniao 

do Vegetal, 546 U.S. 418 (2006), does not alter the settled principle that a plaintiff who seeks a 

preliminary injunction must satisfy each of the criteria for issuance of a preliminary injunction: 

That principle applies regardless of the nature and source of the plaintiff’s substantive claims. 

Cf. Winter, 555 U.S. at 20-22 (rejecting lower courts’ modifications to preliminary injunction 

standard and emphasizing that “[the] plaintiff seeking a preliminary injunction must establish”

each factor) (emphasis added). Thus, plaintiffs can prevail on their motion only by meeting their 

heavy burden to make a clear showing in their favor on all four of the preliminary injunction 

factors, see Sherley, 644 F.3d at 392-93 — a showing sufficient to justify bringing to a halt the 

enforcement of a longstanding federal election statute just as the election season approaches its 

peak.

II. THE COMMISSION IS LIKELY TO PREVAIL ON THE MERITS OF THIS 

CASE BECAUSE THE CHALLENGED STATUTORY PROVISIONS FURTHER 

THE IMPORTANT GOVERNMENTAL INTERESTS OF DISCLOSING THE 

FUNDING OF CAMPAIGN SPEECH AND PREVENTING COERCION 

Plaintiffs cast their lawsuit with much hyperbole as an effort to solicit and spend

unlimited individual and corporate contributions in furtherance of their First Amendment rights. 

But STI can already, consistent with existing law, solicit and spend such funds directly. In the 

alternative, STI can legally direct unlimited contributions to a super PAC under STI’s control.

To be clear, FECA’s contribution limits pose no obstacle to STI’s plans, a fact they choose not to 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 19 of 34
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acknowledge. In other words, the issue here is not whether STI can obtain the funds to finance 

its activities, but only how. Plaintiffs claim that STI has a First Amendment right to finance its 

independent expenditures through a non-contribution account of STIELF. What plaintiffs 

largely fail to mention, however, is that using this indirect and evasive device — and rejecting 

the two direct and straightforward mechanisms already freely available — would permit STI to 

avoid FECA’s disclosure requirements. But the Supreme Court and the D.C. Circuit have made 

clear that the Constitution permits the government to prevent such evasion. And plaintiffs seem 

not even to recognize that their plan would run afoul of the FECA provisions that protect 

corporate employees from the potentially coercive effect of receiving solicitations from their 

employers — provisions whose constitutionality is not in question. These important 

governmental interests in providing disclosure to the public regarding electoral financing and in 

preventing coercive solicitation of employees are more than sufficient to deny plaintiffs’ desired 

relief.

A. Permitting SSFs to Operate Non-Contribution Accounts Would Contravene 

Citizens United and SpeechNow by Facilitating Evasion of FECA’s Disclosure 

Requirements

After devoting significant attention to the undisputed principle that STI has a 

constitutional right to make independent expenditures, plaintiffs discuss the true heart of their

lawsuit in a single paragraph near the end of their brief. There they note that FECA does not 

require public disclosure of STI’s payments to cover STIELF’s administrative and solicitation 

costs, 2 U.S.C. § 441b(b)(2)(C), and plaintiffs explain that they intend to apply this exception to

STI’s payments for the administration and solicitation costs of STIELF’s non-contribution 

account. (See Pls.’ Mem. at 30-31.) Left unstated, however, are the implications of this plan. 

Plaintiff’s devised plan would conceal not only the sources — but also the very existence — of 

STI’s payments to finance political communications to the general public. There is no 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 20 of 34
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constitutional basis for such concealment, which is directly contrary to the analyses of political 

disclosure in Citizens United and SpeechNow — cases that could not have spoken more clearly 

to the lawfulness of mandatory disclosure of political spending.

1. Plaintiffs’ Proposed Relief Would Enable Corporations to Conceal 

Campaign-Related Spending

As plaintiffs correctly note (see Pls.’ Mem. at 30-31), the disclosure exemption for

corporate payments of an SSF’s costs is statutorily quite narrow. An SSF need not report

payments for its “establishment, administration and solicitation” paid directly by its sponsoring 

corporation, in this case STI. 11 C.F.R. § 114.5(b), (e)(1). Before Citizens United, a corporation 

could lawfully engage in electoral spending only through its SSF, and the SSF could solicit funds 

only from its sponsoring corporations’ executives, stockholders, and employees. Thus, the

permissible corporate spending covered by FECA’s exemption for administration and solicitation 

expenses involved only internal matters, i.e., the SSF’s solicitations from already-affiliated 

individuals, plus its overhead. None of that undisclosed spending paid for communications sent 

to the public.

This lawsuit, however, seeks to have the statutory disclosure exception swallow the rule, 

which it would do in two distinct ways. First, under the mechanism STI proposes, it could 

communicate its fundraising message to — and seek unlimited political contributions from —

nearly any individual or corporation in America on behalf of STIELF without disclosing that STI

paid for those solicitations or how much money it spent doing so. The distribution of such

undisclosed solicitations is manifestly irreconcilable with the narrow scope of the statutory SSF 

exemption, which applies only to internal communications, and with FECA’s disclosure 

provisions, which require PACs to disclose every dollar they spend and the source of those 

dollars. 2 U.S.C. § 434(b)(4).

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 21 of 34
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Perhaps recognizing the disparity between their plans and what FECA requires, plaintiffs 

try to cabin the implications of their argument by noting that STI would still have to disclose any 

money it spends to pay for STIELF’s independent expenditures. (See Pls.’ Mem. at 31.) But this 

in no way mitigates the damage that would result from STI’s proposal to pay for undisclosed 

solicitations of the general public — communications that can themselves support or oppose

federal candidates. For example, under STI’s theory, the corporation could send a solicitation to 

hundreds of thousands of people, urging them to donate unlimited funds to STIELF as a way to 

(in the words of STI’s website) “stand up to Obama” because “[u]nder Obama, a tax-cheat is 

running the IRS . . . and a perjuring felon ‘allegedly’ is leading the DOJ.”10 The financing

mechanism that plaintiffs seek would render this solicitation entirely exempt from the disclosure 

rules applicable to every other PAC engaging in similar electioneering. 

In contrast, if STI were to create and operate a super PAC — as it is currently permitted 

to do (see Club for Growth AO) — plaintiffs could conduct all of their desired activities, and 

there would be no disclosure evasion. STI could pay for the super PAC’s administrative and 

solicitation expenses without limit, and the super PAC could solicit the general public for 

unlimited individual and corporate contributions to finance independent expenditures — i.e., it 

could do everything STIELF wishes to do from its non-contribution account. The only 

 10 STI operates a website at www.theteaparty.net; the quotations above can be found at 

http://act.theteaparty.net/5507/stand-up-to-obama/ and http://act.theteaparty.net/5273/prosecuteeric-holder/ (last visited Aug. 7, 2012). There is, of course, no doubt that STI has the 

constitutional right to make statements such as these in the context of soliciting contributions; the 

only question is whether STI can do so in a way that avoids disclosing who paid for the 

solicitation.

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 22 of 34
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difference would be that STI’s payments in support of the super PAC would be disclosed to the 

public.11

Citizens United squarely contradicts the notion that the Constitution required the 

Commission to approve plaintiffs’ disclosure-evading procedure. To the contrary, eight Justices

agreed in that case that mandatory disclosure of election-related funding is a constitutionally

permissible method of furthering the public’s important interest in knowing who is financing 

campaign speech. See id. at 915-16. The Court therefore upheld FECA’s disclosure 

requirements even as applied to political communications that contained no candidate advocacy 

but rather “only pertain[ed] to a commercial transaction,” i.e., soliciting the public to buy a DVD

that criticized a candidate. Id. As the Court explained, the government’s “informational interest 

alone is sufficient,” to justify mandating disclosure regarding such campaign-related speech 

because “[t]he First Amendment protects political speech; and disclosure permits citizens and 

shareholders to react to the speech . . . in a proper way. This transparency enables the electorate 

to make informed decisions and give proper weight to different speakers and messages.” Id.

12 

This holding puts to rest any argument that STI has a constitutional right to avoid disclosing its 

 11 Alternatively, STI can solicit unlimited contributions directly and deposit them into its 

own treasury to finance campaign advocacy. This might result in STI meeting the criteria to 

become a PAC, in which case there would be even greater disclosure of its financing. See infra

pp. 18-19.

12 Citizens United reaffirmed that the proper constitutional standard for assessing disclosure 

requirements is intermediate scrutiny: Whether there is “a ‘substantial relation’ between the 

disclosure requirement and a ‘sufficiently important’ governmental interest.” 130 S. Ct. at 914 

(quoting Buckley, 424 U.S. at 64, 66). This is the same “lesser demand” that applies in 

constitutional challenges to contribution limits. Beaumont, 539 U.S. at 162 (quoting Nixon v. 

Shrink Mo. Gov’t PAC, 528 U.S. 377, 387-88 (2000)); see also Republican Nat’l Comm. v. FEC, 

698 F. Supp. 2d 150, 156 (D.D.C. 2010) (three-judge court), aff’d mem., 130 S. Ct. 3544 (2010). 

Thus, intermediate scrutiny applies in this case regardless of whether it is viewed as a challenge 

to contribution limits or to disclosure requirements. Plaintiffs do not and cannot argue (see Pls.’ 

Mem. at 16) that their challenge involves any expenditure limit that would implicate strict 

scrutiny. See Citizens United, 130 S. Ct. at 913 (striking down corporate expenditure limit).

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 23 of 34
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payments for political solicitations: If the government can constitutionally mandate disclosure of 

who paid to advertise a DVD critiquing a candidate, the government can a fortiori mandate 

disclosure of payments to solicit funds for the purpose of expressly advocating the election or 

defeat of a candidate.

Second, plaintiffs’ plan would help STI avoid triggering the broad disclosure 

requirements applicable to political committees. Under FECA, a group whose major purpose is 

electing or defeating federal candidates must register with the Commission as a political 

committee and report all of its income and expenses once it makes $1,000 in expenditures or 

receives $1,000 in contributions. See 2 U.S.C. § 431(4)(A); Buckley, 424 U.S. at 79. STI’s plan 

would permit STI to evade these registration and disclosure requirements; by spending its

political funds to solicit for STIELF’s non-contribution account, STI’s spending would not 

constitute a contribution or an expenditure that would trigger the $1,000 threshold for political 

committee status. But such avoidance is irreconcilable with SpeechNow’s upholding of FECA’s

disclosure requirements as applied to independent-expenditure-only PACs. In SpeechNow, the 

en banc D.C. Circuit relied upon Citizens United in unanimously affirming the constitutionality 

of requiring such PACs to disclose all of their income and expenses. See SpeechNow, 599 F.3d 

at 696-98. The court held that these requirements further “the public . . . interest in knowing who 

is speaking about a candidate and who is funding that speech,” and that PAC disclosure “deters 

and helps expose violations of other campaign finance restrictions, such as those barring 

contributions from foreign corporations or individuals.” Id. at 698. Accordingly, these 

governmental interests “are sufficiently important . . . to justify requiring [an independentexpenditure-only committee] to organize and report to the FEC as a political committee.” Id; see

also Nat’l Org. for Marriage v. McKee, 649 F.3d 34, 58-59 (1st Cir. 2011) (upholding PAC 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 24 of 34
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disclosure in light of government’s “interest in the dissemination of information regarding the 

financing of political speech”), cert. denied, 132 S. Ct. 1635 (2012). In light of this conclusive 

and binding determination, there is no merit to plaintiffs’ claim that the Constitution requires the 

government to recognize a financing mechanism that could relieve STI of the disclosure 

obligations applicable to all PACs.

2. There Is No Legal Basis for Permitting Corporations to Evade 

FECA’s Disclosure Provisions

In addition to Citizens United and SpeechNow, plaintiffs rely on EMILY’s List and Carey

as support for allowing SSFs to open non-contribution accounts. But neither of these cases

addressed disclosure at all. EMILY’s List, 581 F.3d at 19 n.16 (“This case does not involve 

reporting and disclosure obligations.”). And, in any event, these cases concerned non-connected

PACs; they explicitly disclaimed addressing the constitutionality of FECA as applied to SSFs.13 

Id. at 8 n.7 (excluding “a committee established by a corporation” from category of entities 

addressed in opinion); Carey, 791 F. Supp. 2d at 126 n.1 (same, quoting EMILY’s List). 

Plaintiffs appear to concede as much when they assert that the holdings of EMILY’s List and

Carey “should be extended to include SSFs.” (Pls.’ Mem. at 3 (emphasis added).) But these 

cases simply cannot be extended here to nullify disclosure requirements whose constitutionality 

has been separately affirmed by higher courts. See Agostini v. Felton, 521 U.S. 203, 237 (1997) 

 13 Plaintiffs take out of context (Pls.’ Mem. at 15) the Commission’s statement in a Federal 

Register notice that “[t]he Commission agrees . . . that [EMILY’s List] applies to SSFs as well as 

to nonconnected committees.” FEC, Funds Received in Response to Solicitations; Allocation of 

Expenses by Separate Segregated Funds and Nonconnected Committees, 75 Fed. Reg. 13,223, 

13,224 (Mar. 19, 2010). That statement concerned the mandate of EMILY’s List to vacate two 

specific PAC regulations (not at issue here), 11 C.F.R. § 106.6(c), (f), that applied on their face 

to both SSFs and non-connected PACs. The Commission stated that because the court ordered 

the regulations to be vacated, they no longer applied to either kind of political committee. See

75 Fed. Reg. at 13,224 (“Although the court defined the [PACs at issue] as not including SSFs, 

the court explicitly ordered the District Court to ‘vacate the challenged regulations’ . . . in their 

entirety. . . . Accordingly, the Commission is removing paragraphs (c) and (f) in their entirety.”).

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(“‘[I]f a precedent of this Court has direct application in a case, yet appears to rest on reasons 

rejected in some other line of decisions, the [lower court] should follow the case which directly 

controls, leaving to this Court the prerogative of overruling its own decisions.’”) (quoting 

Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U. S. 477, 484 (1989)); see also United 

States v. Danielczyk, 683 F.3d 611, 615-16 (4th Cir. 2012) (applying Agostini principle and 

reversing district court that had extended Citizens United to strike down FECA provisions 

Supreme Court had previously held constitutional). And plaintiffs’ request to “extend” EMILY’s 

List and Carey beyond their stated context of non-connected PACs fails to account for FECA’s 

key provisions governing disclosure and coercion by SSFs — provisions that categorically 

differentiate SSFs from non-connected PACs. For all the reasons discussed above, EMILY’s List

and Carey cannot be extended without vitiating these provisions. 

The recent decision from this district in Van Hollen v. FEC, --- F. Supp. 2d ----, Civ. No. 

11-766, 2012 WL 1066717 (D.D.C. Mar. 30, 2012), addressed a highly analogous situation.

14 At 

issue there was a regulation the Commission had promulgated in response to FEC v. Wisconsin 

Right to Life, 551 U.S. 449 (2007) (“WRTL”). WRTL had struck down a portion of FECA’s 

corporate electioneering prohibition, id. at 476-82; as a result, certain corporate activity that had 

not previously been permissible under FECA was rendered lawful. But Congress had not 

contemplated such corporate activity in enacting FECA’s disclosure provisions, and the

application of the literal text of those provisions to the newly permissible category of corporate 

electioneering seemed to lead to results that Congress would not have intended. See Van Hollen, 

2012 WL 1066717, at *10-*11. So the Commission promulgated a disclosure regulation that, 

the court noted, “was specifically undertaken to address the changes wrought by WRTL” — to 

 14 An appeal of this decision is pending (D.C. Cir. Nos. 12-5117, 12-5118), but the 

Commission is not a party to the appeal. 

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bridge the gap between the statutory provision and the effects of WRTL by essentially attempting 

to determine how Congress would have wanted FECA’s disclosure provisions to apply to 

corporate electioneering. See id. at *13. In Van Hollen, the Court held that the Commission did 

not have the authority to promulgate such a regulation. Id. at *15. The Court found that the 

disclosure provisions enacted by Congress were unambiguous on their face, and the Commission 

was bound to enforce the unambiguous text, even if intervening court decisions had caused such 

enforcement to lead to seemingly anomalous results. Id. at *11 (citing Mova Pharm. Corp. v. 

Shalala, 140 F.3d 1060 (D.C. Cir. 1998)).

The holding of Van Hollen supports the decision not to grant STIELF’s advisory opinion 

request15 and supports a denial of the relief plaintiffs seek from this Court. Here as in Van 

Hollen, court decisions (i.e., Citizens United and SpeechNow) have given rise to a category of 

corporate electioneering that was not contemplated by Congress when it enacted FECA’s 

disclosure provisions. But this does not mean that the Commission or the Court can disregard or 

fail to give full effect to those provisions. FECA’s statutory disclosure exemption for a 

corporation’s spending in support of its SSF’s solicitation costs is unambiguously limited to 

solicitations of the owners, executives, and employees of the corporation because those are the 

only kind of solicitations that SSFs can engage in. Although Citizens United and SpeechNow

have changed the rules governing corporate independent spending and limits on contributions to 

super PACs, those decisions did not address the solicitation rules. Thus, even if plaintiffs believe 

that Congress might have enacted a broader disclosure exemption if it had contemplated the legal 

regime post-Citizens United, such speculation cannot trump the actual text of the existing statute, 

 15 As the Commissioners who voted to deny STIELF’s advisory opinion request noted, an 

administrative agency generally does not have authority to find that a statute it administers is 

unconstitutional. (See Compl. Exh. C at 7 (citing, inter alia, Johnson v. Robison, 415 U.S. 361, 

368 (1974), and Robertson v. FEC, 45 F.3d 486, 489 (D.C. Cir. 1995)).)

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 27 of 34
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which Congress has chosen not to amend in light of recent developments. Accordingly, there is 

no statutory basis for concluding that spending for solicitations to the general public should be 

exempt from disclosure; but that would be the effect if plaintiffs were to prevail on their request 

to create a non-contribution account within their SSF without being bound by the solicitation 

restrictions applicable to SSFs. Van Hollen therefore refutes plaintiffs’ claims that the 

Commission or the Court should reinterpret this unambiguous statute to facilitate STI’s 

disclosure-avoidance scheme.

B. Preventing Corporations from Coercing Their Employees and Others into 

Making Unlimited Political Contributions Is a Compelling and Important 

Governmental Interest that Furthers First Amendment Values

FECA bans SSFs from soliciting contributions from the general public, and it places 

significant restrictions on solicitations directed towards the non-executive employees of the 

SSF’s sponsoring corporation. See supra pp. 3-4. For example, an SSF can solicit employees 

only (1) by mail, (2) not at their workplace, and (3) in such a manner that the corporation “cannot 

determine who makes a contribution of $50 or less as a result of such solicitation and who does 

not make such a contribution.” 2 U.S.C. § 441b(b)(4)(B). FECA also limits SSFs to accepting

contributions of $5,000 per contributor per year. 2 U.S.C. § 441a(a)(1)(C); 11 C.F.R. § 114.5(f). 

The parties here agree that purpose of FECA’s employee-solicitation restrictions is to prevent a 

corporation from levering its inherent power over such employees to coerce them into 

contributing to the SSF. (See Pls.’ Mem. at 4 n.1 (citing legislative history).)16 Yet plaintiffs’ 

plan to solicit employees for STIELF’s non-contribution account is a thinly-disguised end run 

around these restrictions — an evasion that must fail because the validity of FECA’s anticoercion provisions has never been called into question. 

 16 The three FEC Commissioners who would have otherwise granted STIELF’s advisor 

opinion request also agreed that these provisions serve an anti-coercion purpose. (Compl. Exh. 

B at 10.)

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Admittedly, plaintiffs now claim that they will “abide by” the “parameters set forth at 

2 U.S.C. § 441b(b)(4)(B)” (Pls.’ Mem. at 3-4 & n.1), but this caveat was not presented to the 

Commission in STIELF’s advisory opinion request. To the contrary, the request stated that 

STIELF wished to solicit funds “not subject to the restrictions of . . . 2 U.S.C. § 441b(b)(4)(B).” 

(Compl. Exh. A at 4 (emphasis added).) Nonetheless, even if plaintiffs’ new pledge is taken at 

face value, there are still three ways in which their desired relief would effectively abrogate 

FECA’s employee-protection provisions.

First, FECA limits an SSF to soliciting non-executive employees twice per year. 

2 U.S.C. § 441b(b)(4)(B). It appears, however, that STIELF seeks the ability to solicit STI’s 

employees twice per year for its non-contribution account (see Pls.’ Mem. at 1), while also 

maintaining a contribution account able to solicit twice per year (see Compl. ¶ 23), for a total of 

four annual solicitations of each employee. Thus, the inherently coercive pressure of a 

corporation asking its employees to give money would, in plaintiffs’ scenario, be literally double 

that which Congress has deemed maximally permissible. Second, and more significantly, FECA 

limits SSFs to accepting $5,000 per contributor per year, so $5,000 is currently the most a 

corporation can ask an employee to give. But if plaintiffs were granted their relief, STI would be 

able to solicit unlimited funds from each employee, as there are no limits on contributions to

independent-expenditure-only committees. Whatever coercive effect might result from asking 

an employee to give a legally limited amount, asking her to give all she can afford places a 

greater quantitative burden — well beyond the level Congress has approved. Third, FECA 

contains two anti-coercion provisions in addition to section 441b(b)(4)(B): A corporation must 

inform each employee it solicits “of the political purposes of [the SSF]” and “of his right to 

refuse to so contribute without any reprisal.” 2 U.S.C. § 441b(b)(3)(B)-(C). Plaintiffs have 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 29 of 34
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conspicuously not pledged to abide by these restrictions when soliciting from their noncontribution account (see Pls.’ Mem. at 1, 3-4, 12 (noting intention to comply with section 

441b(b)(4))), and so it is unclear whether they would consider themselves free to disregard these 

provisions when engaging in their otherwise unlimited and unrestricted employee solicitations.

FECA’s employee-protection provisions are unambiguous, and there is no suggestion 

from plaintiffs (or in any case law of which the Commission is aware) that they bear any 

constitutional infirmity. Thus, for the reasons noted above regarding FECA’s disclosure 

requirements, the Commission and the Court are bound to give the anti-coercion provisions full 

effect. See supra pp. 20-22 (discussing Van Hollen). Because plaintiffs’ desired relief would 

inherently derogate these provisions, that relief must be denied.

Furthermore, plaintiffs’ planned solicitations would run afoul of FECA’s SSF provisions 

even outside the context of employees. For example, freeing SSFs to solicit from the general 

public would allow a corporation to solicit its suppliers to give to the corporation’s SSF. 

Enormous numbers of companies and individuals in the United States owe their livelihoods to 

major corporate buyers. See, e.g., Tom Van Riper, The Wal-Mart Squeeze, Forbes (Apr. 24, 

2007), http://www.forbes.com/2007/04/23/walmart-suppliers-margins-leadcx_tvr_0423walmart.html. If such a buyer were to solicit its suppliers for political contributions, 

the financial coercion inherent in such solicitations would be qualitatively and quantitatively 

equivalent to solicitations of employees (who are similarly financially dependent on the 

soliciting corporation).17 The primary statutory provision that prevents such coercion is section 

441b(b)(4)(A)(i) — the very provision that plaintiffs seek to have voided as applied to STIELF. 

 17 Similarly, plaintiffs’ proposal to solicit from the general public might enable a labor 

union (see supra p. 2 n.1) to pressure the corporations that employ the union’s members into 

contributing to the union’s SSF.

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(Pls.’ Mem. at 38.) But the Supreme Court upheld the constitutionality of this statute in National 

Right to Work, 459 U.S. at 206-11, and, contrary to plaintiffs’ assertion (Pls.’ Mem. at 32-33), 

Citizens United did not call that holding into question. See 130 S. Ct. at 909 (noting that 

National Right to Work involved provisions different from those struck down in Citizens United). 

There is, therefore, no basis in law for plaintiffs’ claims that STIELF has a First Amendment 

right to disregard FECA’s solicitation provisions.

III. PLAINTIFFS FACE NO COGNIZABLE HARM DURING THE PENDENCY 

OF THIS CASE

In addition to showing probable success on the merits of their case, plaintiffs must also 

demonstrate a likelihood — not merely a possibility — that they will suffer irreparable harm 

without injunctive relief. Winter, 555 U.S. at 22. “[T]he injury must be . . . actual and not 

theoretical . . . [and] of such imminence that there is a ‘clear and present’ need for equitable 

relief . . . .” Wis. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985). To meet this 

requirement, “[a] litigant must do more than merely allege the violation of First Amendment 

rights.” Wagner v. Taylor, 836 F.2d 566, 576 n.76 (D.C. Cir. 1987) (emphasis in original) 

(discussing Elrod v. Burns, 427 U.S. 347 (1976)); NTEU v. United States, 927 F.2d 1253, 1254-

55 (D.C. Cir. 1991) (“A preliminary injunction is not appropriate . . . ‘unless the party seeking it 

can demonstrate that First Amendment interests are either threatened or in fact being impaired at 

the time relief is sought.’”) (quoting Wagner, alterations omitted). If plaintiffs make “no 

showing of irreparable injury, ‘that alone is sufficient’ for a district court to refuse to grant 

preliminary injunctive relief.” Hicks v. Bush, 397 F. Supp. 2d 36, 40 (D.D.C. 2005) (quoting

CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir. 1995)).

STI and STIELF allege that they are being harmed because they would like to solicit and 

receive unlimited contributions to finance independent expenditures. (See Pls.’ Mem. at 33-34.) 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 31 of 34
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But STI can do these things right now: There is literally no FECA provision in effect that would 

prohibit STI from soliciting unlimited individual and corporate contributions and using those 

contributions to pay for express candidate advocacy. See supra pp. 6-7 (discussing Club for 

Growth AO). Or, if STI for whatever reason wishes to conduct its advocacy indirectly, it can

establish and operate a super PAC to engage in exactly the same activity. Plaintiffs provide no 

explanation of how these options are in any way deficient in comparison to their preferred 

disclosure-evasion mechanism. And even if plaintiffs were to plead such a deficiency, it would 

not constitute irreparable harm, for nothing plaintiffs might conjure would change the fact that 

STI can solicit and pay for its 2012 election advertising without limit.

Furthermore, plaintiffs’ purported need for urgent relief is belied by their delay in 

bringing this action. The Commission deadlocked on STIELF’s advisory opinion request on 

March 1, 2012 — approximately 250 days before the general election. This suit was not filed 

until July 10, more than four months after it became ripe, and less than 120 days before the 

election. Plaintiffs’ unexplained delay in filing suit casts serious doubt on the genuineness of 

their newfound (and self-created) urgency. See Tenacre Foundation v. INS, 78 F.3d 693, 695 n.2 

(D.C. Cir. 1996) (finding that seven-month delay before filing suit “undermines any assertions 

that [plaintiff] will suffer irreparable harm if the Court does not grant preliminary injunctive 

relief”); cf. Charlesbank Equity Fund II v. Blinds To Go, Inc., 370 F.3d 151, 163 (1st Cir. 2004) 

(“[Plaintiff’s] cries of urgency are sharply undercut by its own rather leisurely approach to the 

question of preliminary injunctive relief.”).

IV. THE BALANCE OF EQUITIES AND THE PUBLIC INTEREST WEIGH 

AGAINST ENJOINING ENFORCEMENT OF FECA’S DISCLOSURE AND 

ANTI-COERCION PROVISIONS

The balance of equities and the public interest weigh heavily in favor of preserving the 

status quo and denying plaintiffs’ request for extraordinary injunctive relief. 

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In evaluating any request to enjoin the enforcement of a federal statute, “[t]he 

presumption of constitutionality which attaches to every Act of Congress is not merely a factor 

to be considered in evaluating success on the merits, but an equity to be considered in favor of 

[the government] in balancing hardships.” Bowen v. Kendrick, 483 U.S. 1304 (1987) 

(Rehnquist, C.J., in chambers) (internal quotation marks omitted); cf. United States v. Oakland 

Cannabis Buyers’ Co-op., 532 U.S. 483, 497 (2001) (holding that “[c]ourts of equity cannot, in 

their discretion, reject the balance that Congress has struck in a statute” by enjoining its 

enforcement). That presumption is at its apex here, because the Supreme Court has already 

determined that the disclosure statutes that plaintiffs seek to evade are constitutional. See

Christian Civic League of Me., Inc. v. FEC, 433 F. Supp. 2d 81, 90 (D.D.C. 2006) (three-judge 

court) (“To the extent that the injunction of the proposed application of those provisions 

interferes with the execution of the statute upheld by the Supreme Court . . . , the public interest 

is already established by the Court’s holding and by Congress’s enactment, and the interference 

therewith is inherent in the injunction.”) (internal quotation marks omitted). And given 

plaintiffs’ four-month delay in bringing this case, the balance of equities weighs even further 

against an injunction. See Quince Orchard Valley Citizens Ass’n, Inc. v. Hodel, 872 F.2d 75, 80 

(4th Cir. 1989) (“[Plaintiffs’] delay is . . . quite relevant to balancing the parties’ potential harms. 

Since an application for preliminary injunction is based upon an urgent need for the protection of 

a Plaintiff’s rights, a long delay in seeking relief indicates that speedy action is not required.”) 

(internal quotation marks and brackets omitted). Finally, as discussed above, the disclosure and 

anti-coercion provisions are critical pieces of FECA’s SSF-regulation regime; enabling their 

evasion would therefore substantially injure the public interest. See Christian Civic League, 433 

F. Supp. 2d at 90; see also Real Truth About Obama, Inc. v. FEC, 575 F.3d 342, 352 (4th Cir. 

Case 1:12-cv-01140-BAH Document 6 Filed 08/10/12 Page 33 of 34
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2009) (upholding denial of pre-election preliminary injunction), vacated on other grounds, 130 

S. Ct. 2371 (2010). 

CONCLUSION

STI can lawfully solicit unlimited corporate and individual contributions to finance 

campaign advertising; FECA merely requires that such activity be fully disclosed to the public 

and conducted without placing unduly coercive pressure on vulnerable donors. Nothing in 

Citizens United, SpeechNow, or any other case plaintiffs cite casts doubt on the validity of these 

requirements. Thus, and for all of the foregoing reasons, plaintiffs’ motion for a preliminary 

injunction that would enable them to circumvent FECA’s disclosure and anti-coercion 

protections should be denied. 

Respectfully submitted,

Anthony Herman (D.C. Bar No. 424643)

General Counsel

David Kolker (D.C. Bar No. 394558)

Associate General Counsel

Lisa J. Stevenson (D.C. Bar No. 457628)

Special Counsel to the General Counsel

 /s/ Adav Noti

Adav Noti (D.C. Bar No. 490714)

Acting Assistant General Counsel

anoti@fec.gov

FEDERAL ELECTION COMMISSION

999 E Street NW

Washington, DC 20463

August 10, 2012 (202) 694-1650

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