ORAL ARGUMENT NOT YET SCHEDULED 

Nos. 15-5016 & 15-5017 

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

CHRISTOPHER VAN HOLLEN, JR. 

Plaintiff-Appellee, 

v. 

FEDERAL ELECTION COMMISSION,

Defendant-Appellee, 

CENTER FOR INDIVIDUAL FREEDOM, 

Intervenor for Defendant-Appellant 

in No. 15-5016, 

AND

HISPANIC LEADERSHIP FUND, 

Intervenor for Defendant-Appellant 

in No. 15-5017. 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

BRIEF FOR APPELLEE CHRIS VAN HOLLEN 

ROGER M. WITTEN

FIONA J. KAYE

STEPHANIE SIMON

WILMER CUTLER PICKERING

 HALE AND DORR LLP

7 World Trade Center 

New York, NY 10007 

(212) 230-8800 

May 11, 2015 

CATHERINE M.A. CARROLL

WILMER CUTLER PICKERING

 HALE AND DORR LLP

1875 Pennsylvania Avenue NW 

Washington, DC 20006 

(202) 663-6000 

Additional counsel listed on inside 

cover 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 1 of 65
FRED WERTHEIMER

DEMOCRACY 21 

2000 Massachusetts Avenue NW 

Washington, DC 20036 

(202) 355-9610 

DONALD J. SIMON

SONOSKY CHAMBERS SACHSE

 ENDRESON & PERRY, LLP

1425 K Street NW, Suite 600 

Washington, DC 20005 

(202) 682-0240 

SCOTT L. NELSON

PUBLIC CITIZEN

 LITIGATION GROUP

1600 20th Street NW 

Washington, DC 20009 

(202) 588-1000 

TREVOR POTTER

J. GERALD HEBERT 

PAUL S. RYAN

TARA MALLOY

CAMPAIGN LEGAL CENTER

215 E Street NE 

Washington, DC 20002 

(202) 736-2200 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 2 of 65
i 

CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES 

Pursuant to D.C. Circuit Rule 28(a)(1), Rep. Chris Van Hollen submits this 

Certificate as to Parties, Rulings, and Related Cases. 

Parties 

The Appellants are Center for Individual Freedom (“CFIF”) and Hispanic 

Leadership Fund (“HLF”), who were intervenors in the district court. The 

Appellee is Rep. Chris Van Hollen, who was the plaintiff in the district court. The 

Federal Election Commission (“FEC” or the “Commission”), who was the 

defendant in the district court, is an appellee. No amicus briefs were filed in the 

district court. Cause of Action has filed an amicus brief in support of Appellants 

with this Court. Van Hollen does not anticipate any additional amicus curiae 

briefs will be filed. 

Rulings Under Review 

At issue in this appeal is the November 25, 2014 Memorandum Opinion and 

Order by the Honorable Amy Berman Jackson granting plaintiff Van Hollen’s 

motion for summary judgment, denying defendant FEC’s cross-motion for 

summary judgment, denying intervenor-defendant CFIF’s cross-motion for 

summary judgment, and vacating 11 C.F.R. § 104.20(c)(9). The district court’s 

November 25, 2014 Memorandum Opinion and Order has yet to be published in 

the Federal Reporter but is reprinted at JA404-450. In its Notice of Appeal, CFIF 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 3 of 65
ii 

stated its intent to appeal the May 1, 2013 Memorandum Opinion and Order of the 

Honorable Amy Berman Jackson denying CFIF’s motion for leave to amend, 

which is reported at 291 F.R.D. 11 and reprinted at JA396-399. JA451. In its 

opening brief, however, CFIF has disclaimed any challenge to the May 1, 2013 

opinion and order. See CFIF Br. 43 n.8. 

Related Cases 

The case on review was previously before this Court in Center for 

Individual Freedom v. Van Hollen, Nos. 12-5117, 12-5118. In a per curiam 

opinion, 694 F.3d 108 (D.C. Cir. 2012), this Court reversed the district court’s 

prior order vacating the challenged regulation under Chevron Step One and 

remanded for the district court to decide in the first instance whether the 

challenged regulation survives review under Chevron Step Two or the “arbitrary 

and capricious” standard of State Farm. Counsel is aware of no related cases.

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 4 of 65
iii 

TABLE OF CONTENTS 

Page 

CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED 

CASES .............................................................................................................. i 

TABLE OF AUTHORITIES ..................................................................................... v 

GLOSSARY .............................................................................................................. ix 

STATEMENT OF ISSUES ....................................................................................... 1 

STATUTES AND REGULATIONS ......................................................................... 1 

STATEMENT OF THE CASE .................................................................................. 2 

A. The Bipartisan Campaign Reform Act .................................................. 2 

B. The Federal Election Commission’s Implementation Of 

BCRA .................................................................................................... 7 

C. Wisconsin Right To Life And The Regulation Under 

Review ................................................................................................. 10 

D. This Litigation ..................................................................................... 18 

SUMMARY OF ARGUMENT ............................................................................... 22 

STANDARD OF REVIEW ..................................................................................... 24 

ARGUMENT ........................................................................................................... 24 

I. THE DISTRICT COURT CORRECTLY HELD THE DISCLOSURE 

REGULATION INVALID .................................................................................... 24 

A. The Disclosure Regulation Reflects An Unreasonable 

Interpretation Of BCRA ...................................................................... 27 

B. The Commission Offered No Rational Justification And 

Failed To Support Its Decision With Reasoning Or 

Evidence .............................................................................................. 35 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 5 of 65
iv 

1. The Commission’s proffered explanation does not 

support the “purpose” test ......................................................... 35 

2. The Commission relied on arbitrary assumptions 

without explanation and failed to consider 

significant relevant factors ........................................................ 42 

C. The Intervenors’ Constitutional Arguments Cannot Save 

The Disclosure Regulation .................................................................. 46 

II. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN 

VACATING THE UNLAWFUL REGULATION ...................................................... 49 

CONCLUSION ........................................................................................................ 52 

CERTIFICATE OF COMPLIANCE 

CERTIFICATE OF SERVICE 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 6 of 65
v 

TABLE OF AUTHORITIES*

CASES

Page(s) 

Action on Smoking & Health v. CAB, 713 F.2d 795 (D.C. Cir. 1983) ................... 50 

Allied-Signal, Inc. v. U.S. Nuclear Regulatory Commission, 988 F.2d 

146 (D.C. Cir. 1993) ..................................................................................... 49 

American Public Comunications Council v. FCC, 215 F.3d 51 (D.C. 

Cir. 2000) ...................................................................................................... 42 

Associated Gas Distributors v. FERC, 899 F.2d 1250 (D.C. Cir. 1990)................ 28 

Bismullah v. Gates, 551 F.3d 1068 (D.C. Cir. 2009) ............................................. 33 

Bob Jones University v. United States, 461 U.S. 574 (1983) ................................. 33 

Buckley v. Valeo, 424 U.S. 1 (1976) ..................................................................... 2, 3 

Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 

467 U.S. 837 (1984).................................................................................. 1, 19 

Citizens United v. FEC, 558 U.S. 310 (2010)............................. 6, 11, 38, 39, 47, 48 

Comcast Corp. v. FCC, 579 F.3d 1 (D.C. Cir. 2009) ............................................. 50 

Didrickson v. U.S. Department of Interior, 982 F.2d 1332 (9th Cir. 

1992) ............................................................................................................. 26 

Dow Chemical Co. v. EPA, 605 F.2d 673 (3d Cir. 1979) ....................................... 26 

Esch v. Yeutter, 876 F.2d 976 (D.C. Cir. 1989) ...................................................... 46 

FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986) ............. 3, 38, 39 

FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) .................................... 10 

Fox Television Stations, Inc. v. FCC, 293 F.3d 537 (D.C. Cir. 2002) ................... 50 

IMS, P.C. v. Alvarez, 129 F.3d 618 (D.C. Cir. 1997) ............................................. 46 

 

*

 Authorities upon which we chiefly rely are marked with asterisks. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 7 of 65
vi 

In re Core Communications, Inc., 531 F.3d 849 (D.C. Cir. 2008) ......................... 50 

Independence Institute v. FEC, No. 14-cv-1500 (CKK), 2014 WL 

4959403 (D.D.C. Oct. 6, 2014) .................................................................... 48 

* McConnell v. FEC, 540 U.S. 93 (2003) ........................................ 3, 4, 5, 6, 7, 27, 48 

* Missouri Public Service Commission v. FERC, 337 F.3d 1066 

(D.C. Cir. 2003) ................................................................................ 39, 41, 42 

Motor Vehicle Manufacturers Association v. State Farm Mutual 

Automobile Insurance Co., 463 U.S. 29 (1983) ......................... 20, 25, 35, 45 

National Gypsum Co. v. EPA, 968 F.2d 40 (D.C. Cir. 1992) ................................. 42 

National Mining Ass’n v. U.S. Army Corps of Engineers, 145 F.3d 

1399 (D.C. Cir. 1998) ................................................................................... 49 

National Mining Ass’n v. U.S. Department of Interior, 251 F.3d 1007 

(D.C. Cir. 2001) ............................................................................................ 26 

National Parks Conservation Ass’n v. Jewell, __ F. Supp. 3d __, 

2014 WL 5355048 (D.D.C. Feb. 20, 2014) .................................................. 49 

Natural Resources Defense Council, Inc. v. EPA, 824 F.2d 1146 

(D.C. Cir. 1987) ............................................................................................ 26 

Northeast Florida Chapter of Associated General Contractors of 

America v. City of Jacksonville, 508 U.S. 656 (1993) ................................. 26 

Nuvio Corp. v. FCC, 473 F.3d 302 (D.C. Cir. 2006) ............................................. 42 

Prometheus Radio Project v. FCC, 652 F.3d 431 (3d Cir. 2011) .......................... 50 

Public Citizen v. Carlin, 184 F.3d 900 (D.C. Cir. 1999) ........................................ 31 

Republican National Committee v. FEC, 76 F.3d 400 (D.C. Cir. 1996) ................ 25 

Russello v. United States, 464 U.S. 16 (1983) ........................................................ 31 

Shays v. FEC, 340 F. Supp. 2d 39 (D.D.C. 2004) .................................................. 51 

* Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) .................. 4, 24, 25, 27, 31, 33, 35, 51 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 8 of 65
vii 

* Shays v. FEC, 528 F.3d 914 (D.C. Cir. 2008) ................................ 24, 25, 29, 41, 45 

Sorenson Communications Inc. v. FCC, 755 F.3d 702 

(D.C. Cir. 2014) ............................................................................................ 42 

State of Nebraska Department of Health & Human Services v. 

Department of Health & Human Services, 435 F.3d 326 

(D.C. Cir. 2006) ...................................................................................... 24, 49 

T.I.M.E. Inc. v. United States, 359 U.S. 464 (1959) ............................................... 31 

Touche Ross & Co. v. Redington, 442 U.S. 560 (1979) ......................................... 31 

* Village of Barrington v. Surface Transportation Board, 636 F.3d 650 

(D.C. Cir. 2011) ...................................................................................... 25, 45 

DOCKETED CASES 

Citizens United v. FEC, No. 08-205, Brief for Appellee, 2009 WL 

406774 (U.S. Feb. 17, 2009) ........................................................................ 47 

STATUTES AND REGULATIONS 

2 U.S.C. 

§ 431 ............................................................................................................... 2 

§ 434 ........................................................................................................... 1, 2 

5 U.S.C. § 706 ............................................................................................. 18, 24, 49 

26 U.S.C. § 6033 ..................................................................................................... 43 

52 U.S.C. 

§ 30101 ..................................................................................................... 3, 10 

§ 30104 ..................................................................... 1, 5, 6, 16, 30, 31, 34, 48 

§ 30118 ........................................................................................................... 6 

Bipartisan Campaign Reform Act of 2002, Pub. L. No. 107-155, 

116 Stat. 81 ................................................................................... 1, 4, 5, 6, 48 

Taft-Hartley Act, 61 Stat. 159 (1947) ....................................................................... 3 

Tillman Act, 34 Stat. 864 (1907) .............................................................................. 3 

War Labor Disputes Act, 57 Stat. 167 (1943) .......................................................... 3 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 9 of 65
viii 

11 C.F.R. § 104.20 .............................................................................. 1, 8, 15, 16, 32 

Treas. Reg. § 1.6033-2 ............................................................................................ 43 

67 Fed. Reg. 51,131 (Aug. 7, 2002)...................................................................... 7, 8 

68 Fed. Reg. 404 (Jan. 3, 2003) .................................................. 9, 10, 27, 32, 43, 44 

76 Fed. Reg. 80,803 (Dec. 27, 2011) ...................................................................... 21 

79 Fed. Reg. 62,797 (Oct. 21, 2014) ....................................................................... 21 

OTHER AUTHORITIES 

147 Cong. Rec. 

S3022 (daily ed. Mar. 28, 2001) ..................................................................... 4 

S3070 (daily ed. Mar. 29, 2001) ..................................................................... 4 

S3233 (daily ed. Apr. 2, 2001) ....................................................................... 5 

Center for Responsive Politics, “Outside Spending by Disclosure, 

Excluding Party Committees,” available at

http://www.opensecrets.org/outsidespending/ 

disclosure.php?range=tot .............................................................................. 28 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 10 of 65
ix 

GLOSSARY 

APA Administrative Procedure Act 

BCRA Bipartisan Campaign Reform Act of 2002 

CFIF Center for Individual Freedom 

FEC Federal Election Commission 

FECA Federal Election Campaign Act 

HLF Hispanic Leadership Fund 

JA Joint Appendix 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 11 of 65
STATEMENT OF ISSUES 

1. Whether the district court correctly held that the Federal Election 

Commission’s regulation governing disclosure of the sources of funding for 

electioneering communications, 11 C.F.R. § 104.20(c)(9) (the “Disclosure 

Regulation”), is invalid: 

(A) under Chevron U.S.A. Inc. v. Natural Resources Defense Council, 

Inc., 467 U.S. 837 (1984), as an unreasonable interpretation of § 201(a) of the 

Bipartisan Campaign Reform Act of 2002, 52 U.S.C. § 30104(f) (formerly codified 

at 2 U.S.C. § 434(f)),1

 and 

(B) under the Administrative Procedure Act as arbitrary, capricious, 

and contrary to law. 

2. Whether the district court properly vacated the Disclosure Regulation 

upon holding it invalid.

STATUTES AND REGULATIONS 

All relevant statutes and regulations are contained in the appendix to the 

Brief for Appellant Center for Individual Freedom. 

 

1

 At the time this litigation was filed, the disclosure provision of the 

Bipartisan Campaign Reform Act was codified at 2 U.S.C. § 434. It has since been 

transferred to 52 U.S.C. § 30104. Unless otherwise noted, this brief cites the 

current recodified section. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 12 of 65
2 

STATEMENT OF THE CASE 

A. The Bipartisan Campaign Reform Act 

For more than a century, Congress has sought to “shed the light of publicity” 

on election-related spending by requiring disclosure of its sources. Buckley v. 

Valeo, 424 U.S. 1, 81 (1976) (per curiam); see id. at 61-62. In Buckley, the 

Supreme Court upheld provisions of the Federal Election Campaign Act of 1971 

(“FECA”), as amended, that required “[e]very person” making a minimum amount 

of “expenditures” to disclose, among other things, the name and address of each 

person who made one or more “contributions” in a calendar year of at least $100. 

Id. at 74-84; see also id. at 157-158, 160 (quoting the then-current version of 2 

U.S.C. § 434(b), (e)).2

 The Act defined “contribution” to mean a gift made “for 

the purpose of” influencing a federal election. Id. at 145 (quoting the then-current 

version of 2 U.S.C. § 431(e)). The Court struck down limits on the amounts 

individuals and political committees could spend on communications to influence 

federal elections, id. at 44-59, but upheld the disclosure requirements as advancing 

three substantial government interests: “provid[ing] the electorate with 

information ‘as to where political campaign money comes from and how it is spent 

by the candidate’”; “deter[ring] actual corruption and avoid[ing] the appearance of 

corruption by exposing large contributions and expenditures to the light of 

 

2

 Other provisions subjected political committees and candidates to similar 

requirements. See Buckley, 424 U.S. at 63-64. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 13 of 65
3 

publicity”; and facilitating enforcement of campaign-finance regulations. Id. at 66-

68; see id. at 76, 80-81. 

To avoid vagueness and overbreadth, the Court in Buckley construed the 

“expenditures” subject to FECA’s disclosure requirements to include only funds 

used for “explicit words of advocacy”—that is, “communications that in express 

terms advocate the election or defeat of a clearly identified candidate for federal 

office.” 424 U.S. at 43, 44; see also id. at 80. FECA was later amended to reflect 

this construction. See 52 U.S.C. § 30101(17).3

 As a result, “the use or omission of 

‘magic words’ such as ‘Elect John Smith’ or ‘Vote Against Jane Doe’ marked a 

bright statutory line separating ‘express advocacy’ from ‘issue advocacy.’” 

McConnell v. FEC, 540 U.S. 93, 126 (2003); see also Buckley, 424 U.S. at 44 n.52 

(“express words of advocacy” include “vote for,” “vote against,” and “elect”). 

Corporations, unions, and others began to spend hundreds of millions of dollars on 

 

3

 The disclosure requirements considered in Buckley did not apply to 

corporations or labor unions, which had long been prohibited from using treasury 

funds to make expenditures in connection with any federal election. See Tillman 

Act, ch. 420, 34 Stat. 864 (1907); War Labor Disputes Act, ch. 144, § 9, 57 Stat. 

167 (1943); Taft-Hartley Act, ch. 120, § 304, 61 Stat. 159 (1947). Ten years after 

Buckley, in FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986), the 

Supreme Court considered that longstanding ban and held that “an expenditure 

must constitute ‘express advocacy’” as defined in Buckley to be subject to the 

prohibition. Id. at 249. The Court further held that the prohibition on independent 

expenditures was unconstitutional as applied to certain nonprofit corporations that 

were organized for the purpose of promoting political ideas rather than for business 

purposes and that raised their funds only from individuals. Id. at 263-264. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 14 of 65
4 

purported “issue ads,” which omitted those magic words and thus fell outside of 

FECA’s disclosure requirements. McConnell, 540 U.S. at 126-127.4

 By the 1996 

election, between $135 and $150 million was spent on such ads. Id. at 127 n.20. 

By the 2000 election, that number had grown to an estimated $500 million. Id. 

In response to this proliferation of “sham issue ads,”—and to the growing 

use of “soft money” to fund such ads and other campaign-related spending—

Congress enacted the Bipartisan Campaign Reform Act of 2002, Pub. L. No. 107-

155, 116 Stat. 81 (“BCRA”); see generally McConnell, 540 U.S. at 129-132; Shays 

v. FEC, 414 F.3d 76, 81-82 (D.C. Cir. 2005) (“Shays I”). A primary motivation 

for BCRA’s enactment was to expand disclosure of the sources of funding for 

issue ads. In particular, BCRA’s sponsors expected that more robust disclosure 

would deter corruption by revealing “who is trying to influence the election” and 

would “inform the voting public of who is sponsoring and paying for an 

electioneering communication.” 147 Cong. Rec. S3022, 3034 (daily ed. Mar. 28, 

2001) (statement of Sen. Jeffords); see also 147 Cong. Rec. S3070, 3074 (daily ed. 

Mar. 29, 2001) (statement of Sen. Snowe) (“What we are saying is disclose who 

you are. Let’s unveil this masquerade. ... Tell us who is financing these ads to the 

 

4

 Because these ads fell outside the prohibition on “express advocacy” as 

defined in Buckley, corporations and labor organizations could pay for them using 

general funds without disclosing their contributors. McConnell, 540 U.S. at 127-

128. Qualifying nonprofit corporations as defined in Massachusetts Citizens for 

Life, see supra n.3, could additionally use their general funds to pay for “express 

advocacy” ads; such expenditures were subject to FECA’s disclosure requirements. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 15 of 65
5 

tune of $500 million in this last election. The public has a right to know.”). In 

addition, broader disclosure would expose election-related ads to “the scrutiny of 

the voting public” by preventing their sponsors from “hiding behind dubious and 

misleading names.” McConnell, 540 U.S. at 197; see also 147 Cong. Rec. S3233, 

3238 (daily ed. Apr. 2, 2001) (statement of Sen. Feinstein) (“The attacks come and 

no one knows who is actually paying for them.”). 

Consistent with these purposes, in BCRA, Congress identified a new category 

of campaign spending called “electioneering communications,” which it defined to 

include any broadcast, cable, or satellite communications that refer to a clearly 

identified federal candidate, are made shortly before an election in which the 

identified candidate is seeking office and, in the case of House and Senate 

candidates, are geographically targeted to the relevant electorate. See BCRA § 201, 

52 U.S.C. § 30104(f)(3). BCRA required “[e]very person” who makes 

disbursements for electioneering communications in an amount greater than $10,000 

during any calendar year to disclose the sources of funding for such expenditures. 

BCRA § 201, 52 U.S.C. § 30104(f)(2). Specifically, BCRA provided: 

(E) If the disbursements were paid out of a segregated bank account 

which consists of funds contributed solely by individuals ... directly 

to this account for electioneering communications, the names and 

addresses of all contributors who contributed an aggregate amount of 

$1,000 or more to that account during the period beginning on the 

first day of the preceding calendar year and ending on the disclosure 

date. ... 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 16 of 65
6 

(F) If the disbursements were paid out of funds not described in 

subparagraph (E), the names and addresses of all contributors who 

contributed an aggregate amount of $1,000 or more to the person 

making the disbursement during the period beginning on the first day 

of the preceding calendar year and ending on the disclosure date. 

Id. BCRA banned corporations and labor unions from spending general treasury 

funds on such electioneering communications. See BCRA § 203, 52 U.S.C. 

§ 30118(b)(2), invalidated by Citizens United v. FEC, 558 U.S. 310 (2010). But 

that prohibition did not extend to nonprofit advocacy corporations qualified under 

Massachusetts Citizens for Life to fund electioneering communications out of their 

general treasury funds. See McConnell, 540 U.S. at 209-211; see supra nn.3, 4. 

In McConnell, the Supreme Court upheld BCRA’s regulation of 

electioneering communications in substantial part. The Court first rejected the 

plaintiffs’ challenge to the definition of “electioneering communications,” holding 

that Congress could regulate communications beyond those constituting “express 

advocacy” as Buckley had defined it. 540 U.S. at 190-194. As the Court 

explained, “the express advocacy restriction was an endpoint of statutory 

interpretation, not a first principle of constitutional law,” id. at 190, and nothing in 

the First Amendment “erects a rigid barrier between express advocacy and socalled issue advocacy,” id. at 193. The Court went on to reject the “facial attack” 

on BCRA’s disclosure requirements, id. at 197, holding that “the important state 

interests that prompted the Buckley Court to uphold FECA’s disclosure 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 17 of 65
7 

requirements—providing the electorate with information, deterring actual 

corruption and avoiding any appearance thereof, and gathering the data necessary 

to enforce more substantive electioneering restrictions—apply in full to BCRA,” 

id. at 196. These interests, the Court held, justify the application of disclosure 

requirements to “the entire range of ‘electioneering communications,’” enabling 

the public to “‘identify the source of the funding behind broadcast advertisements 

influencing certain elections.’” Id. Finally, a majority of the Court rejected a 

facial challenge to BCRA’s prohibition against corporations’ and unions’ use of 

general treasury funds to finance electioneering communications, on the 

understanding that the prohibition did not apply to qualifying nonprofit 

corporations as defined in Massachusetts Citizens for Life. Id. at 203-211. Three 

of the dissenting Justices would have invalidated that prohibition, but nonetheless 

agreed that the disclosure requirements should be upheld as substantially related to 

valid government interests. Id. at 321 (Kennedy, J., dissenting). 

B. The Federal Election Commission’s Implementation Of BCRA 

In 2002, the Federal Election Commission (“FEC” or the “Commission”) 

issued a notice of proposed rulemaking to implement BCRA. 67 Fed. Reg. 51,131 

(Aug. 7, 2002). As part of that rulemaking, the Commission proposed a disclosure 

regime applicable to all persons and organizations permitted to use general funds 

to finance electioneering communications, including unincorporated organizations, 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 18 of 65
8 

partnerships, individuals, limited liability companies that do not qualify as 

corporations, unincorporated trade associations or membership organizations, and 

unincorporated nonprofits, as well as those incorporated nonprofits permitted to 

use general funds for electioneering communications under the Supreme Court’s 

decision in Massachusetts Citizens for Life. See id. at 51,137. 

As finally promulgated in 2003, the regulation’s disclosure provision 

mirrored BCRA’s disclosure provisions in pertinent part, requiring “[e]very person 

who has made an electioneering communication ... aggregating in excess of 

$10,000 during any calendar year” to file a statement containing, among other 

things, the following disclosures: 

(7) If the disbursements were paid exclusively from a segregated 

bank account consisting of funds provided solely by individuals ..., 

the name and address of each donor who donated an amount 

aggregating $1,000 or more to the segregated bank account, 

aggregating since the first day of the preceding calendar year; and 

(8) If the disbursements were not paid exclusively from a 

segregated bank account described in paragraph (c)(7) of this section, 

the name and address of each donor who donated an amount 

aggregating $1,000 or more to the person making the disbursement, 

aggregating since the first day of the preceding calendar year. 

11 C.F.R. § 104.20(c) (effective Feb. 3, 2003) (the “2003 regulation”); see id. 

§ 104.20(b). 

The Commission explained that the first of these two requirements would 

apply to any person wishing to use a separate bank account to fund electioneering 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 19 of 65
9 

communications. 68 Fed. Reg. 404, 413 (Jan. 3, 2003). The Commission 

acknowledged comments suggesting that requiring qualified nonprofit corporations 

as defined in Massachusetts Citizens for Life to disclose their donors would burden 

free-speech rights and that the option to use a segregated bank account would 

impose administrative burdens. Id. But the Commission rejected those assertions, 

explaining that those corporations were subject to BCRA’s mandatory disclosure 

requirements and would not be unduly burdened because “electioneering 

communications are not subject to disclosure until disbursements related to them 

exceed $10,000,” and even then only the identities of persons contributing $1,000 

or more need be disclosed. Id. Moreover, the Commission explained, the use of 

separate bank accounts would allow these corporations to “reduce their reporting 

obligations.” Id.

With respect to the alternative disclosure provision at subparagraph (8) of 

the 2003 regulation, the Commission explained that it promulgated that provision 

“to clarify that all persons who make electioneering communications would be 

required to disclose their donors who donate $1,000 or more in the aggregate 

during the prescribed period” if they do not use segregated bank accounts. 68 Fed. 

Reg. at 414. As the Commission explained, BCRA “specifically mandates 

disclosure of this information.” Id. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 20 of 65
10 

Finally, the Commission explained that the 2003 regulation used the term 

“donation” rather than “contribution” to clarify that funds given to persons or 

corporations who make electioneering communications did not thereby become 

“contributions” as defined in FECA and subject to FECA’s limitations, 

prohibitions, or reporting requirements. See 68 Fed. Reg. at 412-413.5

 Thus, all 

such funds were subject to the disclosure requirements regardless whether they 

constituted “contributions.” Id.

C. Wisconsin Right To Life And The Regulation Under Review 

Although McConnell had rejected a facial challenge to the provision of 

BCRA prohibiting corporations from using general treasury funds to finance 

electioneering communications, supra pp. 6-7, the Supreme Court was soon 

presented with an as-applied challenge. In FEC v. Wisconsin Right to Life, Inc., 551 

U.S. 449 (2007), the Court held that BCRA’s ban on corporate electioneering 

communications was unconstitutional as applied to ads that did not contain “express 

advocacy” or its functional equivalent. Id. at 469-470 (opinion of Roberts, C.J.). As 

a result of that decision, corporations and labor unions could now use general 

treasury funds to finance some electioneering communications. But the plaintiffs in 

 

5

 Section 30101(8), a pre-BCRA provision of FECA, defines “contribution” to 

include “(i) any gift, subscription, loan, advance, or deposit of money or anything 

of value made by any person for the purpose of influencing any election for 

Federal office; or (ii) the payment by any person of compensation for the personal 

services of another person which are rendered to a political committee without 

charge for any purpose.” 52 U.S.C. § 30101(8)(A). 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 21 of 65
11 

Wisconsin Right to Life did not challenge the constitutionality or scope of BCRA’s 

disclosure requirements with respect to electioneering communications, and the 

Court consequently made no mention of those provisions.6

Shortly after the Court’s decision, the James Madison Center for Free 

Speech petitioned the Commission for a rulemaking “implementing the holding” 

of Wisconsin Right to Life by exempting “genuine issue ads” from the 

electioneering-communication prohibition and repealing an alternative definition 

of express advocacy the Commission had previously adopted. JA19-20. The 

petition did not propose any change to the disclosure requirements for 

electioneering communications. JA19-25. 

In response, the Commission issued a notice of proposed rulemaking 

requesting comments on proposed rules to “implement the Supreme Court’s 

decision in [Wisconsin Right to Life].” JA27. Although neither Wisconsin Right to 

Life nor the petition for rulemaking had mentioned disclosure, the Commission 

stated that its rulemaking would address both the funding of electioneering 

communications by corporations and labor unions and the effect of Wisconsin 

 

6

 Three years later, in Citizens United v. FEC, 558 U.S. 310 (2010), the 

Supreme Court struck down the remaining limitations on corporate and union 

political spending as facially unconstitutional. Consequently, corporations and 

unions may now use their general treasury funds to pay for electioneering 

communications containing even express advocacy or its functional equivalent. 

However, eight Justices in Citizens United rejected the petitioners’ as-applied 

challenge to BCRA’s disclosure requirements for electioneering communications. 

See id. at 316, 318, 364-371. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 22 of 65
12 

Right to Life on “the rules governing reporting of electioneering communications.” 

JA28. The notice sought comment on “two proposed alternative ways to 

implement the Wisconsin Right to Life decision in the rules governing 

electioneering communications.” Id. Under Alternative 1, the Commission would 

create a new exemption to its rules prohibiting the use of corporate and labor 

organization funds for electioneering communications. Id. Under that approach, 

corporations and unions would be permitted to use general treasury funds for issue 

ads, but would be required to file disclosure reports if they spent more than 

$10,000 in a calendar year on such communications. Id. Alternative 1 accordingly 

included proposed revisions “to accommodate reporting by corporations and labor 

organizations.” JA37. In particular, the Commission sought comment on whether 

corporations or unions making electioneering communications using general 

treasury funds would be required to disclose their donors and, “[i]f so, how would 

a corporation or labor organization determine which receipts qualify as 

‘donations’? Should the Commission limit the ‘donation’ reporting requirement to 

funds that are donated for the express purpose of making electioneering 

communications?” Id. 

Under Alternative 2, in contrast, the Commission would “incorporate the 

new exemption into the definition of ‘electioneering communication’” by 

redefining electioneering communications to exclude any communications other 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 23 of 65
13 

than “express advocacy” or its “functional equivalent.” JA28. As the Commission 

acknowledged, this approach would exempt non-express-advocacy electioneering 

communications from disclosure requirements altogether—not only for 

corporations and labor unions, but for any person engaging in electioneering 

communications. JA29.

The Commission received 27 written comments. Eleven comments, 

including a joint comment submitted by BCRA’s congressional sponsors, urged 

the Commission to leave intact the disclosure requirements governing 

electioneering communications.7

 As the district court summarized, those 

comments explained that the disclosure requirements had not been at issue in 

Wisconsin Right to Life, had been upheld in McConnell, and served important 

informational purposes without imposing the burdens of a restriction on 

expenditures. JA427-430. Other comments either did not address the disclosure 

 

7

 See Comments of S.B. Hornik, JA26; Comments of Professors Richard L. 

Hasen of School of Law: Loyola University Chicago and Professor Richard 

Briffault of Columbia Law School, JA41-44; Comments of Washington State 

Public Disclosure Commission, JA45-46; Comments of Professor Allison 

Hayward of George Mason University Law School, JA52-55; Comments of 

Democratic Senatorial Campaign Committee and Democratic Congressional 

Campaign Committee, JA60-61; Comments of Center for Competitive Politics, 

JA80-82; Comments of Common Cause, Public Citizen, and U.S. Public Interest 

Research Group (“PIRG”), JA84-85, 87; Comments of Senators McCain, 

Feingold, and Snowe and Representative Shays, JA101-104; Comments of Public 

Campaign, JA111-112; Comments of the Campaign Legal Center, Democracy 21, 

Brennan Center for Justice, Common Cause, League of Women Voters, and U.S. 

PIRG, JA113-133; Comments of Campaign Legal Center and Robert F. Bauer, 

JA141-142. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 24 of 65
14 

requirements at all, JA424-425,8

 or else advocated for Alternative 2, which would 

have exempted ads protected by Wisconsin Right to Life from the definition of 

electioneering communications—and thus from the reporting requirements—

altogether, JA425-427.9

 

The Commission held a two-day hearing on the proposed changes. JA168-

282. After the hearing, the Commission’s General Counsel submitted a 

memorandum and draft final rules to the Commission, proposing for the first time 

that the disclosure requirements applicable to corporations and labor organizations 

be limited to cover only donations “made for the purpose of furthering 

electioneering communications.” JA288. The Commission received only one 

comment in response to its draft rules, which generally “urge[d] the Commission 

to revert to the rule” it had originally proposed, JA296, and to “continue to apply 

BCRA’s ‘electioneering communication’ disclosure requirements to all ads 

meeting the statutory definition of that term,” JA298. 

 

8

 See, e.g., Comments of the James Madison Center for Free Speech, Van 

Hollen v. FEC, No. 11-cv-00766 (ABJ) (D.D.C.), Dkt. 17.2 (Administrative 

Record), at 193-219; Comments of the American Cancer Society Cancer Action 

Network, JA47-48. 

9

 See, e.g., Comments of Citizens United, JA70-75; Comments of 

Independent Sector, JA97-100; Comments of National Association of Realtors, 

JA105-107; Comments of OMB Watch, JA108-110; Comments of Alliance for 

Justice, JA145-146; Comments of American Federation of Labor and Congress of 

Industrial Organizations (“AFL-CIO”), American Federation of State, County, and 

Municipal Employees (“AFSCME”), National Education Association (“NEA”), 

and Service Employees International Union (“SEIU”), JA157-162. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 25 of 65
15 

On December 26, 2007, the Commission promulgated the final Disclosure 

Regulation, 11 C.F.R. § 104.20. JA299-315. The Commission explained that it had 

“decided to implement the [Wisconsin Right to Life] decision” essentially by 

adopting its proposed Alternative 1. JA300-301. Alternative 2, the Commission 

explained, would have conflicted with BCRA, which “requires every ‘person’ 

(which by definition includes corporations and labor organizations) funding 

[electioneering communications] over the reporting threshold to report.” JA301. 

The Commission nevertheless “decided to depart from the rules proposed in the 

[notice of proposed rulemaking] and instead to require corporations and labor 

organizations to disclose only the identities of those persons who made a donation 

aggregating $1,000 or more specifically for the purpose of furthering [electioneering 

communications] made by that corporation or labor organization.” JA311. 

Thus, for disbursements “made by a corporation or labor organization” and 

paid for out of general funds rather than a segregated account, subsection (c)(9) of 

the Disclosure Regulation narrowed the required disclosures by adding the lateproposed “purpose” requirement: 

If the disbursements were made by a corporation or labor organization 

... , the name and address of each person who made a donation 

aggregating $1,000 or more to the corporation or labor organization, 

aggregating since the first day of the preceding calendar year, which 

was made for the purpose of furthering electioneering 

communications. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 26 of 65
16 

JA313 (emphasis added). The Commission made no such change to the parallel 

rules governing disclosure of donors to partnerships, unincorporated associations, 

or individuals that used the donations to fund electioneering communications. See 

id. (11 C.F.R. § 104.20(c)(8)). 

The Commission acknowledged that the plaintiff in Wisconsin Right to Life

had challenged only the funding restrictions and did not contest BCRA’s 

disclosure requirements. JA301. It further acknowledged that none of the 

opinions in Wisconsin Right to Life discussed the disclosure requirements, that the 

holding of Wisconsin Right to Life did not extend to the disclosure requirements, 

and that “McConnell continues to be the controlling constitutional holding” 

regarding disclosure of electioneering communications. Id. The Commission thus 

concluded that it “ha[d] no mandate” to revise or remove the definition of 

“electioneering communications” or the existing disclosure requirements. Id. 

The Commission nevertheless stated that it drew the purpose requirement 

“from the reporting requirements that apply to independent expenditures made by 

persons other than political committees”—referring to FECA’s separate pre-BCRA 

reporting requirements for “independent expenditures.” JA311 n.22.10 Without 

 

10 See 52 U.S.C. § 30104(c)(2)(C) (providing that persons other than political 

committees must file statements disclosing “the identification of each person who 

made a contribution in excess of $200 to the person filing such statement which 

was made for the purpose of furthering an independent expenditure” (emphasis 

added)). 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 27 of 65
17 

explaining why the FECA standard for independent expenditures could apply to 

BCRA’s distinct statutory language, the Commission cited two reasons for adding 

a purpose test to limit disclosure of the sources of corporate spending under BCRA. 

First, the Commission stated that it sought to require disclosure of only 

“those persons who actually support the message conveyed by the [electioneering 

communications].” Id. The Commission reasoned that corporations’ general 

funds might derive from shareholders who have purchased stock, customers who 

have bought products or services, or persons who have donated to support the 

corporation’s general mission. Id. These persons, the Commission explained, “do 

not necessarily support the corporation’s electioneering communications.” Id. 

Similarly, the Commission noted that a labor organization might derive dues from 

members who “may not necessarily support the organization’s electioneering 

communications.” Id. 

Second, the Commission stated that a purpose test would serve to avoid 

“imposing on corporations and labor organizations the significant burden of 

disclosing the identities of the vast numbers of customers, investors, or members, 

who have provided funds for purposes entirely unrelated to the making of 

[electioneering communications].” JA311. The Commission cited witnesses who 

testified at the hearing that, absent a purpose test, “the effort necessary to identify 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 28 of 65
18 

those persons who provided funds totaling $1,000 or more to a corporation or labor 

organization would be very costly and require an inordinate amount of effort.” Id.

The Commission acknowledged the suggestion made by one commenter that 

the “donations” subject to disclosure in the case of a corporation or labor 

organization should exclude membership dues, investment income, or other 

commercial or business income. Id. But although its rationales for adopting the 

purpose test each rested on the assumption that such income would constitute 

“donations” subject to disclosure, the Commission did not respond to that 

suggestion or explain how such income would qualify as a “contrib[utions]” or 

“donat[ions]” within the meaning of BCRA or the previous version of the 

disclosure regulation. Id. 

D. This Litigation 

In April 2011, Congressman Chris Van Hollen sued the Commission under 

the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2)(A), contending that 

the Disclosure Regulation was arbitrary, capricious, and contrary to law, and that it 

was inconsistent with the provisions of BCRA that it purported to implement. 

JA316; see JA316-328. The complaint alleged that the Disclosure Regulation 

frustrated congressional intent and “creat[ed] a major loophole in [BCRA’s] 

disclosure regime by allowing corporations, including non-profit corporations, and 

labor organizations to keep secret the sources of donations they receive and use to 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 29 of 65
19 

make ‘electioneering communications.’” JA316. In particular, the complaint noted 

evidence that persons making electioneering communications in 2010 disclosed the 

sources of less than 10 percent of their $79.9 million in spending. JA326; see also 

id. (showing that the 10 persons reporting the highest spending on electioneering 

communications disclosed the sources of only five percent of money spent). 

The Center for Individual Freedom (“CFIF”) and the Hispanic Leadership 

Fund (“HLF”) (together, “Intervenors”) intervened as defendants in support of the 

Commission. JA5. The parties filed cross-motions for summary judgment. JA6-

7. On March 30, 2012, the district court granted Van Hollen’s motion for 

summary judgment, holding at step one of the analysis under Chevron U.S.A. Inc. 

v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), that Congress 

had spoken plainly in BCRA and required disclosure of “all” contributors who 

contributed more than $1,000 during the reporting period. JA354-367.11 

The Commission did not appeal that decision. The intervenors appealed, 

first moving unsuccessfully in the district court for a stay pending appeal. JA372-

376. A panel of this Court likewise denied the Intervenors’ motions for a stay 

pending appeal, JA377, holding that they had failed to make the requisite “‘strong 

showing that [they were] likely to succeed on the merits’” or to demonstrate 

irreparable injury, JA379; see JA379-381. 

 

11 The district court also held that Van Hollen had standing to challenge the 

regulation. JA350-351. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 30 of 65
20 

Upon consideration of the expedited appeal, a different panel of this Court 

reversed the district court’s judgment. JA382-386. This Court agreed with the 

district court that Van Hollen had standing to challenge the regulation, JA384, but 

concluded that the district court had “erred in holding that Congress spoke plainly” 

in BCRA’s disclosure provisions, JA385. The Court reasoned that the words 

“contributors” and “contributed” as used in BCRA’s disclosure provisions could 

be construed to include a purpose requirement, and that Congress had not 

manifested an intention on the precise question at issue, which arose because of the 

Wisconsin Right to Life decision. JA385-386. The Court remanded the case to the 

district court with instructions to first refer the matter to the Commission so it 

could decide whether to pursue further rulemaking. JA386. In the event the 

Commission declined to do so and instead elected to defend the Disclosure 

Regulation as written, the Court instructed the district court to decide whether the 

Disclosure Regulation survives review under Chevron Step Two or “arbitrary and 

capricious” review under Motor Vehicle Manufacturers Ass’n v. State Farm 

Mutual Automobile Insurance Co., 463 U.S. 29, 42-43 (1983). JA386. 

On remand, the Commission reported to the district court that it would not 

undertake further rulemaking and would defend the existing regulation. JA13.12 

 

12 Over a year and a half later, on October 15, 2014, the Commission notified 

the district court that it had approved final rules implementing the Supreme Court’s 

decision in Citizens United. JA16; see Notice of Amendment to Regulations, Dkt. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 31 of 65
21 

After additional briefing and oral argument, JA14-16, the district court again 

invalidated the Disclosure Regulation, holding that it reflected an unreasonable 

interpretation of BCRA and that its promulgation was arbitrary, capricious, and 

contrary to law, JA404-450. The court found that the Disclosure Regulation was 

unmoored from the Commission’s stated basis for undertaking the rulemaking and 

was not supported by the Commission’s explanation; that the administrative record 

did not support the Commission’s decision and did not indicate that the 

Commission had examined the relevant data or articulated a rational connection 

between the facts found and the choice made; and that the Disclosure Regulation 

contravenes the language and purpose of BCRA. Id. The court accordingly 

vacated the regulation. JA450. 

The Commission again declined to appeal. Intervenors CFIF and HLF each 

appealed. JA451-456. 

 

No. 97, Van Hollen v. FEC, No. 11-cv-766 (D.D.C. Oct. 15, 2014) (“Notice of 

Amendment”); see also 79 Fed. Reg. 62,797, 62,815-62,816 (Oct. 21, 2014) (final 

rule); 76 Fed. Reg. 80,803, 80,804 (Dec. 27, 2011) (proposed rule). Among other 

changes, the revised regulations removed a provision of the rules—not at issue 

here—that addressed restrictions on corporate spending for electioneering 

communications and “had become superfluous” in light of Citizens United. Notice 

of Amendment 1. Because the Disclosure Regulation challenged in this case 

included a cross-reference to that now-removed provision, the Commission 

amended the Disclosure Regulation to “delet[e] those cross-references.” Id. at 1-2. 

The Commission also added language to the Disclosure Regulation to clarify that 

paragraph (c)(9) “applies when the reporting entity does not use the segregated 

account option of paragraph (c)(7).” 79 Fed. Reg. at 62,816. Paragraph (c)(9) 

otherwise remained unchanged. The Commission thus advised the court that these 

regulatory changes required no supplemental briefing. Notice of Amendment 2. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 32 of 65
22 

SUMMARY OF ARGUMENT 

The district court correctly held that the Disclosure Regulation is an 

unreasonable interpretation of BCRA because it flouts the very purpose and 

policies underlying BCRA’s enactment—that is, to fix a broken campaign-finance 

regulatory scheme and to reveal who was actually paying for campaign ads. 

Rather than unveiling “all contributors” as BCRA requires, the Disclosure 

Regulation has allowed those financing electioneering communications to continue 

to hide behind dubious and misleading names in conflict with BCRA’s goal of 

increased disclosure. The Intervenors—but not the Commission—challenge the 

district court’s decision on the ground that the electioneering-communication 

disclosure requirements should mirror those governing independent expenditures. 

That argument fails in light of BCRA’s distinct statutory language, history, and 

purpose. And that argument is further belied by the Commission’s treatment of 

unincorporated associations, partnerships, and individuals, which—consistent with 

BCRA—are required to disclose all donors without evidence of their subjective 

purpose. 

The district court also correctly concluded that the Commission’s 

promulgation of the Disclosure Regulation was arbitrary, capricious, and contrary 

to law. Although the Commission promulgated the Disclosure Regulation 

purportedly to implement the Supreme Court’s decision in Wisconsin Right to Life, 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 33 of 65
23 

nothing in that decision warranted any narrowing of BCRA’s disclosure 

requirements. The Commission advanced two rationales for nevertheless limiting 

disclosure only to those donors that express a subjective purpose of supporting 

electioneering communications, but neither rationale is persuasive. The 

Commission relied on faulty reasoning unsupported by any actual evidence in the 

record before it, failed to consider other options that would have addressed its 

alleged concerns, and failed to consider the significant risk that the Disclosure 

Regulation would invite evasion capable of entirely swallowing the rule. 

The Intervenors contend that the Disclosure Regulation’s “purpose” limit 

was somehow constitutionally required. But the Commission did not rely on 

constitutional concerns in promulgating the rule. And it would have made no 

sense to do so, because the Supreme Court has upheld the disclosure requirements 

applicable to electioneering communications against constitutional challenge. 

Finally, the district court did not abuse its discretion in its remedial order. 

Vacatur was proper here given the Disclosure Regulation’s serious failings and the 

fact that vacatur has not caused disruption. Reinstating the Disclosure Regulation, 

in contrast, would deprive candidates and the public of information to which they 

are statutorily entitled. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 34 of 65
24 

STANDARD OF REVIEW 

This Court reviews the district court’s holdings under Chevron and the APA 

de novo. Shays v. FEC, 528 F.3d 914, 919 (D.C. Cir. 2008) (“Shays III”). Under 

the Chevron two-step analysis, the Court “ask[s] first whether Congress has 

spoken directly ... to the precise question at issue, and second, if it has not, 

whether the agency’s interpretation is reasonable.” Shays v. FEC, 414 F.3d 76, 96 

(D.C. Cir. 2005) (“Shays I”) (internal quotation marks omitted; alteration in 

original). Under the APA, the Court asks whether the challenged regulation is 

“‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with 

law.’” Id. (quoting 5 U.S.C. § 706(2)(A)). 

This Court “review[s] the district court’s decision to vacate, as [it] do[es] 

any decision to grant or withhold equitable relief, for abuse of discretion.” State of 

Neb. Dep’t of Health & Hum. Servs. v. Department of Health & Hum. Servs., 435 

F.3d 326, 330 (D.C. Cir. 2006).

ARGUMENT 

I. THE DISTRICT COURT CORRECTLY HELD THE DISCLOSURE REGULATION 

INVALID

In its prior decision, this Court held that although this case could not be 

resolved at Chevron Step One, the district court should decide in the first instance 

whether the Disclosure Regulation can “survive review under Chevron Step Two 

or State Farm.” JA386. The district court’s thorough analysis demonstrates that it 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 35 of 65
25 

cannot. Under Chevron, even where statutory language is less than perfectly clear, 

an agency cannot adopt an interpretation that “‘frustrate[s] the policy that Congress 

sought to implement.’” Shays III, 528 F.3d at 919. Rather, a court must set aside 

agency interpretations that are impermissible in light of the language, legislative 

history, and policies of the statute. See Republican Nat’l Comm. v. FEC, 76 F.3d 

400, 406 (D.C. Cir. 1996). 

The inquiry at Chevron Step Two “overlaps with the arbitrary and capricious 

standard, for whether a statute is unreasonably interpreted is close analytically to 

the issue whether an agency’s actions under a statute are unreasonable,” Shays I, 

414 F.3d at 96 (internal quotation marks and citations omitted). Under the APA, a 

court cannot uphold a regulation when the agency failed to “examine the relevant 

data and articulate a satisfactory explanation for its action including a ‘rational 

connection between the facts found and the choice made.’” Motor Vehicle Mfrs. 

Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (citation omitted). 

In conducting this inquiry, the Court may consider “only the rationales the 

[agency] actually offered in its decision” to “determine whether its interpretation is 

‘rationally related to the goals of’ the statute.” Village of Barrington v. Surface 

Transp. Bd., 636 F.3d 650, 660 (D.C. Cir. 2011). 

Here, the Disclosure Regulation reflects an impermissible interpretation of 

BCRA that frustrates Congress’s purpose by enabling massive evasion of the 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 36 of 65
26 

statute’s disclosure requirements. The Commission offered no persuasive 

justification for adopting that rule and has twice declined to defend it on appeal.13 

The Commission’s proffered explanation makes no sense, disregarded significant 

considerations, and rested on a host of unexamined assumptions with no 

supporting evidence. The Disclosure Rule is therefore invalid.14 

 

13 Given the Commission’s persistent refusal to defend the Disclosure 

Regulation on appeal, it is questionable whether the Commission’s interpretation 

merits any deference at all. See Didrickson v. U.S. Dep’t of Interior, 982 F.2d 

1332, 1341 (9th Cir. 1992) (ordinary deference does not apply where agency 

dismissed its appeal and acquiesced in district court judgment). But even applying 

normal Chevron principles, the Disclosure Regulation fails. 

14 Amicus Cause of Action argues that this case should be dismissed on several 

grounds, none of which the Intervenors or the Commission have raised. Each 

argument fails. First, the Commission’s promulgation of rules implementing 

Citizens United, see supra n.12, does not render this case moot. In that 

rulemaking, the Commission repromulgated the Disclosure Regulation—including 

the challenged purpose test—in substantively identical form, making only minor 

changes unrelated to this litigation. It is “‘well settled’ ... that ‘a defendant’s 

voluntary cessation of a challenged practice does not deprive a federal court of its 

power to determine the legality of the practice’” where there is a reasonable 

likelihood that the defendant will engage in the same practice again. Northeast 

Fla. Chapter of Associated Gen. Contractors of Am. v. City of Jacksonville, 508 

U.S. 656, 662 (1993). That analysis applies “a fortiori” where, as here, “[t]here is 

no mere risk that [the agency] will repeat its allegedly wrongful conduct,” but the 

agency “has already done so” by repromulgating an identical regulation that 

“differs in only some insignificant respect.” Id.; see also National Mining Ass’n v. 

U.S. Dep’t of Interior, 251 F.3d 1007, 1011 (D.C. Cir. 2001); Dow Chem. Co. v. 

EPA, 605 F.2d 673, 679 (3d Cir. 1979). 

 Van Hollen also did not waive his challenge or fail to exhaust administrative 

remedies. Regardless of whether a particular plaintiff participated in the 

rulemaking process, an issue is exhausted when it has been considered by the 

agency. See Natural Res. Def. Council, Inc. v. EPA, 824 F.2d 1146, 1150-1151 

(D.C. Cir. 1987). Here, the Commission plainly considered whether corporate and 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 37 of 65
27 

A. The Disclosure Regulation Reflects An Unreasonable 

Interpretation Of BCRA 

As discussed, one of Congress’s primary purposes in enacting BCRA was to 

improve disclosure of the sources of funding for campaign ads and to curtail 

circumvention of campaign-finance rules. Shays I, 414 F.3d at 82; supra pp. 4-5. 

With respect to disclosure in particular, Congress sought to ensure that the public 

could “identify the source of funding behind broadcast advertisements influencing 

certain elections” and to prevent organizations from “hiding behind dubious and 

misleading names” to avoid “the scrutiny of the voting public.” McConnell, 540 

U.S. at 196-197 (internal quotation marks omitted). When it first promulgated 

rules to implement BCRA in 2003, the Commission acknowledged these purposes 

in recognizing that BCRA “specifically mandates disclosure” of donor information 

by “all persons who make electioneering communications,” regardless of their 

corporate form or subjective intent. 68 Fed. Reg. at 414; see supra pp. 8-10. 

As promulgated after Wisconsin Right to Life, however, the Disclosure 

Regulation subverts those purposes and contravenes the statutory language. Under 

Chevron, even where Congress has not unambiguously answered the precise 

 

union spending should be subject to the same disclosure requirements that apply to 

individuals and other entities. JA310; see supra pp. 11-18. Nor is this case unripe. 

Van Hollen challenges the Disclosure Regulation as promulgated in 2007, not the 

later Citizens United rule, which simply repromulgated the same challenged 

purpose test. The Commission’s position was fully crystalized in the 2007 final 

rule, and the whole record is before the Court. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 38 of 65
28 

question at issue, an agency’s interpretation can still be unreasonable in light of the 

statute’s language, history, and purpose. Associated Gas Distribs. v. FERC, 899 

F.2d 1250, 1261-1263 (D.C. Cir. 1990). Here, as the district court stated, BCRA 

calls for disclosure of “‘all contributors’” whose aggregate donations exceeded the 

$1,000 threshold, “with no limitation other than the threshold amount.” JA446. 

And although, as this Court has explained, the words “contributors” and 

“contributed” might be construed to entail some purposive element, JA385, 

Congress’s use of expansive language—“[e]very person,” “all contributors”—

without limitations as to purpose or corporate form indicates that Congress would 

not have intended BCRA to be interpreted so narrowly as to effectively swallow 

the disclosure requirements altogether. Yet swallowing the rule is the precise 

consequence of the Commission’s narrow “purpose” test. As the district court 

observed, “[a] donor can avoid reporting altogether by transmitting funds but 

remaining silent about their intended use.” JA447. 

Experience bears out the district court’s prediction. In the election cycle 

following the Disclosure Regulation’s implementation, disclosure concerning the 

funding of electioneering communications dropped precipitously.15 Disclosure fell 

still further in the 2010 election cycle. As the Commission admitted in its Answer, 

 

15 See Center for Responsive Politics, “Outside Spending by Disclosure, 

Excluding Party Committees,” available at http://www.opensecrets.org/ 

outsidespending/disclosure.php?range=tot) (visiting May 11, 2015). 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 39 of 65
29 

the public record reflects little or no disclosure of the numerous contributors to 

nonprofit corporations that made substantial electioneering communications in the 

2010 congressional races. JA 337 ¶ 31. Persons making such communications 

“disclosed the sources of less than 10 percent of the $79.9 million” in related 

spending. Id. ¶ 30. The ten “persons” that reported spending the most on 

electioneering communications (all of them claiming tax-exempt status under 

Sections 501(c) or 527 of the Internal Revenue Code) disclosed the sources of only 

five percent of the money they spent. Id. Of these ten “persons,” only three 

disclosed any information about their funders. Id. 

“At Chevron step two and under the APA, courts must reject administrative 

constructions of a statute that frustrate the policy that Congress sought to 

implement.” Shays III, 528 F.3d at 925. In Shays III, this Court held invalid a rule 

restricting coordination of election-related spending between campaigns and 

outside groups, holding that the regulation was contrary to BCRA because it 

frustrated Congress’s goal of prohibiting the use of soft money in connection with 

federal elections. Id. The rule “not only ma[de] it eminently possible” that the 

regulation would be evaded, but “also provide[d] a clear roadmap” to do so. Id. 

Like the regulation at issue in Shays, the Disclosure Regulation challenged here 

frustrates BCRA’s purpose and allows corporations and labor organizations to 

avoid reporting requirements with nothing more than a “wink or nod.” Id. (internal 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 40 of 65
30 

quotation marks omitted). An organization wishing to circumvent BCRA’s 

disclosure requirements need only solicit funds for general support and instruct its 

donors to remain silent. And even absent such intentional measures, a corporation 

or labor organization will rarely have evidence of a contributor’s specific intent to 

further electioneering communications. 

The Intervenors contend that the Disclosure Regulation “complements” the 

statutory structure by mirroring the disclosure regime applicable to express 

advocacy under FECA, which requires persons making independent expenditures 

for express advocacy to identify donors who made contributions “for the purpose 

of furthering an independent expenditure.” 52 U.S.C. § 30104(c)(2)(C). See CFIF 

Br. 20; see also id. at 20-23; HLF Br. 44. This argument fails for several reasons. 

First, while the Commission stated that it drew the “purpose” test in the 

Disclosure Regulation from the reporting requirements that apply to independent 

expenditures under FECA, JA311 n.22, it did not explain why it was reasonable to 

do so when Congress had included language in FECA expressly limiting disclosure 

to those contributions that are earmarked for independent expenditures but 

included no such limitation in BCRA. Unlike the FECA provision requiring 

disclosure of contributions made “for the purpose of furthering an independent 

expenditure,” 52 U.S.C. § 30104(c)(2)(C), the disclosure requirements of BCRA 

require disclosure of “all contributors who contributed” an amount exceeding the 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 41 of 65
31 

threshold, without any other limitation, id. § 30104(f)(2)(F). “Where Congress 

includes particular language in one section of a statute but omits it in another 

section of the same Act, it is generally presumed that Congress acts intentionally 

and purposely in the disparate inclusion or exclusion.” Russello v. United States, 

464 U.S. 16, 23 (1983); cf. Shays I, 414 F.3d at 108 (“[W]hen BCRA says ‘made,’ 

we presume, absent compelling indication otherwise, that it means ‘made’ and not 

‘made for a fee.’”); T.I.M.E. Inc. v. United States, 359 U.S. 464, 470-471 (1959) 

(court would not impute congressional intention to create a right of reparation in 

statutory provision from which it was omitted, where Congress specifically 

provided for right in another provision of the same statute); Touche Ross & Co. v. 

Redington, 442 U.S. 560, 573 (1979) (refusing to imply private remedy in statute 

because when Congress wished to provide a private damage remedy, it did so 

expressly). CFIF cites (at 21) this Court’s decision in Public Citizen v. Carlin, 184 

F.3d 900 (D.C. Cir. 1999), but that case simply held that language in one section of 

a statute could inform the meaning of related language in another section of the 

statute. Public Citizen did not address the situation presented here, where one of 

two statutory provisions containing otherwise identical language includes a 

limiting clause and the other provision does not.16

 

16 The Intervenors selectively cite statements by some of BCRA’s sponsors to 

the effect that BCRA would subject so-called issue ads to the “same” disclosure 

rules that governed express-advocacy ads under FECA. See CFIF Br. 21-23; HLF 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 42 of 65
32 

Second, if the disclosure rules governing electioneering communications 

under BCRA were supposed to mirror the disclosure rules for express advocacy, 

then the “purpose” test adopted by the Commission here should have been 

included in the 2003 version of the regulation. Instead, that 2003 regulation 

required every person making disbursements for electioneering communications 

without a segregated account to disclose “the name and address of each donor who 

donated an amount aggregating $1,000 or more to the person making the 

disbursement, aggregating since the first day of the preceding calendar year,” 

without further limitation. 11 C.F.R. § 104.20(c)(8) (2003). Indeed, in 

promulgating the 2003 regulations, the Commission explicitly stated that it had 

adopted that language to make explicit that “all persons who make electioneering 

communications would be required to disclose their donors who donate $1,000 or 

more in the aggregate during the prescribed period, if they do not use segregated 

bank accounts.” 68 Fed. Reg. at 414. The Commission explained that it had done 

so because “BCRA at 2 U.S.C. [§] 434(f)(2)(F) specifically mandates disclosure of 

this information.” Id. CFIF acknowledges (at 6) that the 2003 regulation 

“essentially restated the statute.” Moreover, the 2003 regulation continues to 

apply—with no purpose limitation—to electioneering-communication disclosures 

 

Br. 28. As discussed, however, the text that Congress ultimately adopted did not 

mirror the preexisting disclosure rules for express advocacy, supra pp. 30-31, and 

those sponsors clearly intended BCRA to break from the prior FECA regime they 

perceived to be ineffective. Infra pp. 33-34. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 43 of 65
33 

by unincorporated organizations, partnerships, and individuals, further belying the 

suggestion that electioneering-communication disclosure requirements should 

simply parallel the independent-expenditure disclosure requirements. 

Third, BCRA’s legislative history and purpose refute the contention that 

Congress would have intended BCRA’s regulations of electioneering 

communications to parallel the old regime of regulations governing independent 

expenditures for express advocacy. As this Court has recognized, BCRA was 

intended to be a major departure from the disclosure regime in effect under FECA. 

See Shays I, 414 F.3d at 81-82. A Senate investigative committee concluded in 

1998 that “the campaign finance system had suffered a ‘meltdown’” in light of the 

confinement of FECA’s restrictions and disclosure requirements to magic words of 

express advocacy. Id. It is unreasonable to contend that Congress intended in 

BCRA simply to replicate a disclosure system that was widely perceived to be 

ineffective.17 

HLF contends (at 44) that it does not make sense to require greater 

disclosure of the sources of electioneering communications than the sources of 

 

17 Citing Bob Jones University v. United States, 461 U.S. 574 (1983), HLF 

argues (at 44) that Congress has acquiesced in the Disclosure Regulation by failing 

to amend BCRA to reject it. But this Court has held that “absent an extraordinary 

counter-indication, congressional failure to act is of no probative value.” 

Bismullah v. Gates, 551 F.3d 1068, 1074 (D.C. Cir. 2009). HLF cites no such 

“extraordinary counter-indication” akin to the legislative action that preceded the 

Supreme Court’s decision in Bob Jones. See 461 U.S. at 600-601. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 44 of 65
34 

express advocacy. But the disclosure rules for independent expenditures are more 

demanding in other ways. For example, with respect to express advocacy, persons 

(other than political committees) become subject to the disclosure requirements 

merely by making independent expenditures in an aggregate amount or value in 

excess of $250 during a calendar year; but disclosure requirements are not 

triggered under BCRA until a person’s disbursements for electioneering 

communications exceed $10,000 in the reporting period. Compare 52 U.S.C. 

§ 30104(c)(1), with id. § 30104(f)(1). Moreover, as HLF acknowledges (at 28-29), 

individual donors that contribute as little as $200 must be disclosed under the 

independent-expenditure rules, but need not be disclosed until their donations 

exceed $1,000 for electioneering communications. Compare 52 U.S.C. 

§ 30104(c)(2)(C), with id. § 30104(f)(2)(F). These differences between the two 

reporting regimes confirm that it was unreasonable for the Commission to import 

without explanation the purpose requirement of FECA’s independent-expenditure 

provisions into the disclosure rules governing corporate spending for 

electioneering communication. 

Finally, CFIF contends (at 29) that even if the Disclosure Regulation 

frustrates Congress’s policy of increasing disclosure, it should nonetheless be 

upheld because its vacatur will simply encourage organizations that would 

otherwise engage in electioneering communications to “convert their ads ... to 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 45 of 65
35 

express advocacy” and thereby avoid disclosing the identity of their backers. 

While the willingness of some organizations to tailor their ads to avoid disclosure 

rather than to the substance of their message might reveal much about those 

organizations’ motivations, it does not provide a basis to uphold an unreasonable 

interpretation of a statute that affirmatively requires disclosure. 

B. The Commission Offered No Rational Justification And Failed To 

Support Its Decision With Reasoning Or Evidence 

Even if the Commission’s “purpose” test were not incompatible with 

BCRA’s language, structure and legislative purpose, the Disclosure Regulation 

would still be invalid under the APA’s “arbitrary and capricious” standard because 

the Commission offered no persuasive justification for it, relying instead on 

irrational assumptions unsupported by evidence and ignoring critical 

considerations. See State Farm, 463 U.S. at 43; see also, e.g., Shays I, 414 F.3d at 

100, 102, 112, 114-115. The Commission did not even consider the possibility 

that the “purpose” requirement it adopted would facilitate—indeed, invite—

rampant evasion of BCRA’s disclosure mandate. 

1. The Commission’s proffered explanation does not support 

the “purpose” test 

Although the Commission presented the Disclosure Regulation as an effort to 

“implement” the Supreme Court’s decision in Wisconsin Right to Life, JA300, 

nothing in that decision supports the Commission’s choice to limit drastically the 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 46 of 65
36 

disclosure required for electioneering communications. As this Court previously 

held, the Wisconsin Right to Life decision may have created a need for “regulatory 

guidance” on how the existing disclosure rules should apply to newly permissible 

corporate spending on electioneering communications. JA385. But nothing in 

Wisconsin Right to Life required the Commission to fill the resulting “gap” in the 

statutory regime by relieving corporations and labor organizations of any obligation 

to disclose donors except those that expressly indicate an intent to support 

electioneering communications. As the Commission acknowledged in both the 

notice of proposed rulemaking, JA28, and the final rule, JA301, Wisconsin Right to 

Life did not address or question the reporting requirements applicable to 

electioneering communications. Supra p. 16. And as the district court observed, 

even vocal opponents of disclosure conceded at the administrative hearing that “no 

change to the disclosure requirements was required by the [Wisconsin Right to Life] 

decision.” JA432. The Commission therefore concluded, correctly, that it “ha[d] 

no mandate” under Wisconsin Right to Life to narrow the disclosure regime. 

JA301. 

Instead, as discussed, the Commission gave two reasons for limiting 

disclosure in this manner. First, the Commission believed that disclosure should 

be limited to only “those persons who actually support the message conveyed by 

the [electioneering communications],” and that corporations’ and labor 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 47 of 65
37 

organizations’ general funds might include income from persons who do “not 

necessarily support” those ads. JA311 (the “support” rationale). Second, the 

Commission claimed that identifying all those who had donated more than $1,000 

“would be very costly and require an inordinate amount of effort.” Id. (the 

“burden” rationale). Neither of these explanations suffices. 

With respect to the “support” rationale, it was unreasonable for the 

Commission to assume that contributors who donated more than $1,000 would not 

support the organization’s electioneering communications. As the district court 

concluded after thoroughly examining the administrative record, there was no 

evidence before the Commission that contributors who donate thousands of dollars 

to organizations making electioneering communications would be likely to 

disagree with those communications. JA444-445; see JA424-443. For example, 

no evidence suggested that enforcement of the 2003 disclosure rules—which 

required disclosure of all donors to partnerships, unincorporated organizations, or 

qualified nonprofit corporations defined in Massachusetts Citizens for Life, supra 

pp. 7-8—had resulted in disclosure of donors who disagreed with the 

electioneering communications their donations funded. The Commission cited no 

such evidence and made no such findings, and the Intervenors point to none. 

Moreover, it is doubtful such evidence could exist. With respect to most 

nonprofit corporations, “[i]ndividuals who contribute ... are fully aware of [the 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 48 of 65
38 

organization’s] political purposes, and in fact contribute precisely because they 

support those purposes.” Massachusetts Citizens for Life, 479 U.S. at 260-261. As 

the Supreme Court has explained: 

It is true that a contributor may not be aware of the exact use to which 

his or her money ultimately may be put, or the specific candidate that 

it may be used to support. However, individuals contribute to a 

political organization in part because they regard such a contribution 

as a more effective means of advocacy than spending the money 

under their own personal direction. Any contribution therefore 

necessarily involves at least some degree of delegation of authority to 

use such funds in a manner that best serves the shared political 

purposes of the organization and contributor. 

Id. at 261. The Commission offered no rational explanation for assuming to the 

contrary that a contributor might “not necessarily” support an organization’s 

electioneering communications just because the contributor did not specifically 

earmark a donation for electioneering communications. 

Moreover, the Commission’s “support” rationale—and the Intervenors’ 

defense of it—misapprehends the purpose of disclosure. Disclosure serves not only 

to reveal a candidate’s constituencies, identify individuals who share a particular 

political view, or convince a voter to “reconsider[] her vote after studying the 

American Cancer Society’s donor list,” CFIF Br. 25. Rather, disclosure serves the 

broader and simpler purpose of identifying the sources of funding of electoral 

messages so that “citizens and shareholders can react to the speech of corporate 

entities in a proper way.” Citizens United, 558 U.S. at 371. Even for ads that “only 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 49 of 65
39 

pertain to a commercial transaction,” the Supreme Court has emphasized the 

public’s “interest in knowing who is speaking about a candidate shortly before an 

election.” Id. at 369. For instance, disclosure provides important information even 

when it reveals that the resources used to fund a campaign ad “are not an indication 

of popular support” for the ideas expressed, but simply reflect “resources amassed 

in the economic marketplace.” Massachusetts Citizens for Life, 479 U.S. at 257-

258 (emphasis added). 

The Commission’s “burden” rationale is similarly unpersuasive. As the 

district court noted, the Commission relied on conclusory assertions about 

supposed “costs of compliance,” but stated no details about what such costs entail, 

the magnitude of their impact, or how many entities those costs might affect. 

JA444. For instance, the Commission cited no evidence and made no findings that 

compliance with the 2003 version of the disclosure regulation—which contained 

no purpose limitation—had been costly or burdensome for individuals, 

partnerships, unincorporated associations, or qualified nonprofit corporations 

during the four years it had been in effect. 

Moreover, even if the Commission had made any findings in support of the 

“burden” rationale, those findings would have had no support in the administrative 

record. See Missouri Pub. Serv. Comm’n v. FERC, 337 F.3d 1066, 1070 (D.C. Cir. 

2003) (agency’s factual findings must be supported by substantial evidence in the 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 50 of 65
40 

record). The administrative record is devoid of any concrete evidence that 

identifying donors of donations aggregating more than $1,000 “would be very 

costly and require an inordinate amount of effort.” JA311. The Intervenors assert 

that “many” or “several” commenters expressed concerns about the burdens 

attending disclosure. CFIF Br. 34; HLF Br. 1. But examining the Intervenors’ 

record citations reveals that they repeatedly cite the views of just a few 

commenters, none of whom provided any detail or specific facts to support the 

notion that reporting would be “very costly and require an inordinate amount of 

effort” as the Commission asserted, JA311. Without repeating the district court’s 

careful summary of the administrative record, see JA420-445, certain features of 

that record bear emphasis. The commenters on which CFIF relies (at 8-9, 35-36) 

provided nothing more than vague and conclusory assertions of burden. See JA73 

(disclosure “would likely prove difficult”); JA153 (“accounting and reporting 

burdens w[ould] be enormous”); JA163 (disclosure would be “burdensome,” and 

burden on unions would be “especially great”); JA166 (“burden of complying ... 

would be hard to understate”); JA206 (“tremendous burden on unions” would be 

“remarkable); see also HLF Br. 19, 24 (citing JA152-153, 163, 206).18 None 

 

18 CFIF also cites comments asserting that disclosure would burden the privacy 

of donors that wished to remain anonymous, contending that the Commission 

properly tailored the Disclosure Regulation to avoid intruding on donor privacy. 

Br. 33-34 (citing JA99, 109, 139, 262); see also HLF Br. 18. But BCRA requires 

disclosure of all contributors whose contributions to electioneering 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 51 of 65
41 

provided any facts, data, or examples to support those bald assertions. And, as the 

district court explained, “the commenters who expressed concerns about the 

burdens” were “primarily advancing the view that [corporate or union 

electioneering communications] should fall outside of the scope of the regulatory 

regime altogether.” JA427. Self-serving assertions advocating that view do not 

equate to “substantial evidence” capable of sustaining the Commission’s decision. 

Missouri Pub. Serv. Comm’n, 337 F.3d at 1070.19 

HLF attempts to defend the Disclosure Regulation by asserting that the 

Commission made a predictive judgment about the burdens disclosure would 

impose without a purpose limitation. See, e.g., HLF Br. 25-26, 31-32, 35, 37. But 

even when making such judgments an agency “must fully explain the assumptions 

it relied on to resolve unknowns and the public policies behind those assumptions.” 

 

communications exceed the threshold, regardless of their desire to remain 

anonymous, and that requirement has survived constitutional scrutiny. See supra 

pp. 5-7. The Commission was not free to contradict Congress’s decision that the 

public’s interest in knowing the sources of political spending generally outweighs 

the interest in anonymity. See also infra pp. 46-48. 

19 CFIF also notes (at 36) that “no stakeholder who favored broader disclosure 

presented any contrary evidence” that a purpose test was unnecessary to avoid 

administrative burdens. But that does not relieve the Commission of its obligation 

to “support its decision with reasoning and evidence.” Shays III, 528 F.3d at 929 

(emphasis added). Moreover, neither of the Commission’s proposed alternative 

rules included a purpose test in the notice of proposed rulemaking. Although Van 

Hollen has not contended that the Commission’s late introduction of the purpose 

test constituted a technical violation of the notice-and-comment procedure, cf.

CFIF Br. 40-41, the district court correctly observed that the “chronology here has 

an impact upon ... the State Farm analysis,” JA423. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 52 of 65
42 

Missouri Pub. Serv. Comm’n, 337 F.3d at 1070; see also National Gypsum Co. v. 

EPA, 968 F.2d 40, 43 (D.C. Cir. 1992) (agency action was arbitrary and capricious 

where its “inferences [were] nothing more than unsupported assumptions”). The 

Commission did not do that here.20

2. The Commission relied on arbitrary assumptions without 

explanation and failed to consider significant relevant 

factors 

Both of the Commission’s rationales rested on the assumption that, without 

a purpose limitation, the “contributors” potentially subject to disclosure under 

BCRA could include a corporation’s shareholders or customers or a labor union’s 

members. JA311. According to the Commission, it is those contributors who 

“may not necessarily” support the organization’s electioneering communications 

and whose identification might prove difficult or burdensome. Id. But the 

Commission did not explain how investors, customers, or creditors could be 

defined in the first place as “contributors” under BCRA (or “donors” under the 

 

20 The cases cited by HLF merely stand for the proposition that agencies’ 

predictive judgments are entitled to deference when they are based on evidence in 

the record. See Sorenson Commc’ns Inc. v. FCC, 755 F.3d 702, 708 (D.C. Cir. 

2014); Nuvio Corp. v. FCC, 473 F.3d 302, 306-307 (D.C. Cir. 2006); American 

Pub. Commc’ns Council v. FCC, 215 F.3d 51, 56 (D.C. Cir. 2000). Indeed in 

Sorenson (cited at HLF Br. 26, 27, 32, 34, 35), the court ultimately held that the 

agency’s promulgation of the rule at issue was arbitrary and capricious, explaining 

that the agency’s predictive judgments “‘must be based on some logic and 

evidence, not sheer speculation.’” 755 F.3d at 708. Likewise here, the 

Commission’s speculative judgment regarding the burdens associated with 

disclosure—untethered to any actual evidence in the record—cannot support the 

Disclosure Regulation. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 53 of 65
43 

Disclosure Regulation) or why organizations paying for electioneering 

communications would be unable to distinguish their “donors” from shareholders, 

customers, or other sources of commercial income. Indeed, to maintain taxexempt status, section 501(c) organizations must already distinguish donations 

from unrelated business taxable income and other revenue sources on their tax 

returns. See 26 U.S.C. § 6033(b)(5); Treas. Reg. § 1.6033-2(a)(2)(ii)(f). As the 

Commission acknowledged, one commenter specifically suggested that 

“donations” could be distinguished from other revenue in this way by applying the 

IRS criteria. JA311. But the Commission did not address this possibility. Id. 

Nor did the Commission consider the suggestion offered by witnesses at the 

administrative hearing that the Commission could simply clarify that business 

income and other funds that do not entail “truly a donative act” are exempt from 

the disclosure requirement on the ground that they do not constitute a “donation” 

or “contribution.” JA212, 217-218. The Commission had taken a similar 

approach in promulgating the 2003 version of the disclosure rules, clarifying that 

“individuals are required to disclose donations received, which does not include 

salary, wages, or other compensation for employment.” 68 Fed. Reg. at 414. The 

Commission could have done so here as well, and it acknowledged comments 

suggesting that it do so. JA311. Yet the Commission ignored that option without 

explanation and instead gutted BCRA’s disclosure requirement based on concerns 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 54 of 65
44 

about how the rules would apply to business income that would not fall within the 

terms the Disclosure Rule uses to begin with and that the Commission could have 

explicitly exempted to avoid any possible misunderstanding. 

As the district court noted, the Commission also failed to consider or explain 

why the option to use a segregated bank account “was not a suitable solution” for 

any of its purported concerns. JA445. The Commission had acknowledged in 

promulgating its 2003 regulations that organizations could reduce their reporting 

obligations and avoid any supposed burden by establishing a segregated account 

for electioneering communications and disclosing only those contributors that 

contributed more than $1,000 to the separate account. 68 Fed. Reg. at 413. That is 

the alternative Congress adopted for groups wishing to avoid disclosure of 

membership dues. One commenter specifically raised that point in the 

administrative hearing: 

The other protection to put in, which shouldn’t be undervalued, is the 

ability of an organization to set up a segregated fund and engage in 

the disclosure only insofar as donations to the segregated fund are 

concerned. What Congress was doing here was trying to balance the 

importance of disclosure on the one hand versus the intrusiveness or 

burden of disclosure. And these are the balances that Congress struck 

and the protections they tried to build in. 

JA215. But the Commission ignored this option without explanation. JA300-301, 

311. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 55 of 65
45 

 The Intervenors argue that the option to use a segregated account might be 

impractical for some organizations. See CFIF Br. 38-39; HLF Br. 40. But the 

Commission did not rely on this rationale, and a court cannot sustain a regulation 

based on a rationale the agency did not offer. See Village of Barrington, 636 F.3d 

at 660 (court may consider “only the rationales the [agency] actually offered in its 

decision” to “determine whether its interpretation is ‘rationally related to the goals 

of’ the statute”). In any event, the Intervenors’ criticism of the segregated-account 

option is unpersuasive. For example, HLF cites comments submitted by a group of 

labor organizations arguing that using a segregated bank account would undermine 

the holding of Wisconsin Right to Life that organizations can use general treasury 

funds for electioneering communications without establishing a separate account. 

HLF Br. 40 (citing JA163). But Wisconsin Right to Life did not recognize any 

right to use general funds for electioneering communications without disclosing 

the sources of those funds. Supra pp. 10-11. 

Finally, the Commission failed entirely to consider the significant risk that 

its purpose test would facilitate complete evasion of any requirement to disclose, 

enabling “savvy campaign operators” to exploit the “enormous loophole” it created 

“to the hilt.” Shays III, 528 F.3d at 928. Under State Farm, an agency’s rule is 

arbitrary and capricious if the agency “entirely failed to consider an important 

aspect of the problem.” 463 U.S. at 43. Commenters noted the likelihood that a 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 56 of 65
46 

narrow approach to disclosure “w[ould] lead again to a proliferation of issue ads 

by entities with misleading names.” JA43; see also JA114, 118. The precipitous 

decline in disclosure following the Disclosure Regulation’s promulgation confirms 

that to be true. See supra pp. 18-19, 28-29.21 The Commission’s failure even to 

acknowledge, much less consider, this critical consequence of its decision was 

arbitrary and capricious and requires the Disclosure Regulation’s invalidation. 

C. The Intervenors’ Constitutional Arguments Cannot Save The 

Disclosure Regulation 

Finally, the district court correctly rejected the Intervenors’ attempt to 

support the Disclosure Regulation on the ground that it “fairly balanced the need 

for disclosure against sensitive First Amendment and privacy concerns.” JA449. 

The Commission did not cite the First Amendment as a reason for adopting the 

purpose requirement. To the contrary, the Commission acknowledged that “eight 

Justices in McConnell voted to uphold the [electioneering communications] 

reporting requirements” and that “McConnell continues to be the controlling 

constitutional holding” on that issue. JA301. The Commission thus disclaimed 

any “mandate” to alter the disclosure requirements based on First Amendment 

considerations. Id. 

 

21 The Court may consider information outside the administrative record to 

determine whether the agency considered all the relevant factors or adequately 

explained its decision. Esch v. Yeutter, 876 F.2d 976, 991 (D.C. Cir. 1989); see 

also IMS, P.C. v. Alvarez, 129 F.3d 618, 624 (D.C. Cir. 1997). 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 57 of 65
47 

The Commission was correct to do so. The Supreme Court in McConnell

upheld the reporting rules applicable to electioneering communications against a 

facial challenge. Supra pp. 6-7. Seven years later, in Citizens United, eight 

Justices rejected an as-applied challenge to the statutory disclosure requirement 

and reaffirmed the important purposes served by disclosure. 558 U.S. at 364-370. 

Accordingly, no further “narrow tailoring” was required to preserve the 

constitutionality of BCRA or the Commission’s prior implementing regulations. 

HLF contends (at 29) that the three-judge district court’s passing citation in 

Citizens United to the Disclosure Regulation challenged here creates an inference 

that the Commission’s “purpose” limitation was a permissible construction of 

BCRA and necessary to the Supreme Court’s constitutional holding in that case. 

That inference is improper because the three-judge district court in Citizens United

was not considering the question at issue here, i.e., whether the Disclosure 

Regulation was arbitrary and capricious or an unreasonable interpretation of 

BCRA. Nor does the Solicitor General’s brief in Citizens United support HLF’s 

argument in this case. Cf. HLF Br. 29. The Solicitor General did not contend that 

the constitutionality of BCRA’s disclosure requirements turned in any way on the 

loophole the Commission created by adopting the purpose limitation in the 

Disclosure Regulation. See Appellee Br., Citizens United v. FEC, No. 08-205, 

2009 WL 406774, at *40-41 (U.S. Feb. 17, 2009). And the argument that the 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 58 of 65
48 

Supreme Court must have “viewed the donor disclosure requirement as similarly 

narrow” because it described it as requiring disclosure only “of ‘certain 

contributors’” fails because the Supreme Court cited BCRA itself, not the 

regulation. See Citizens United, 558 U.S. at 367-368. The Court’s reference to 

“‘certain contributors’” thus reflected only the statutory limits on which 

contributors must be disclosed—i.e., those that give $1,000 or more. 

In short, the Supreme Court was certainly not misled into upholding 

BCRA’s disclosure requirements against First Amendment challenge. Cf. HLF Br. 

28-30. To the extent any organization subject to BCRA’s disclosure requirements 

faces threats, reprisals, harassment, or retaliation, or a chilling of its speech or 

expression that is not justified by the public’s informational interest in “knowing 

who is speaking about a candidate shortly before an election,” its remedy lies in an 

as-applied challenge. Citizens United, 558 U.S. at 369-370; see also McConnell, 

540 U.S. at 198-199.22

 

22 In Independence Institute v. FEC, No. 14-cv-1500 (CKK), 2014 WL 

4959403 (D.D.C. Oct. 6, 2014), the district court rejected an as-applied First 

Amendment challenge to an application of BCRA § 201’s disclosure provisions for 

“electioneering communications,” now codified at 52 U.S.C. § 30104(f)(2)(E), (F). 

The court’s decision does not cite or rely on the limiting “purpose” language of the 

Disclosure Regulation in holding the statute constitutional as applied. 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 59 of 65
49 

II. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN VACATING THE 

UNLAWFUL REGULATION

The district court had discretion whether to vacate the Disclosure Regulation 

or to remand without vacating under the APA, which provides that the “reviewing 

court shall ... hold unlawful and set aside agency action” found to be arbitrary, 

capricious, or contrary to law. 5 U.S.C. § 706(2)(A); see State of Neb. Dep’t of 

Health & Hum. Servs. v. Department of Health & Hum. Servs., 435 F.3d 326, 330 

(D.C. Cir. 2006) (reviewing vacatur for abuse of discretion); National Parks 

Conservation Ass’n v. Jewell, __ F. Supp. 3d __, 2014 WL 5355048, at *8 (D.D.C. 

Feb. 20, 2014) (discussing district court discretion). Having properly concluded 

that the Disclosure Regulation was an unreasonable interpretation of BCRA under 

Chevron and was arbitrary and capricious in violation of the APA, the district 

court did not abuse its discretion in vacating it. 

“[W]hen a reviewing court determines that agency regulations are unlawful, 

the ordinary result is that the rules are vacated.” National Mining Ass’n v. U.S. 

Army Corps of Eng’rs, 145 F.3d 1399, 1409 (D.C. Cir. 1998) (internal quotation 

marks omitted). Whether to depart from the norm and leave an unlawful rule 

intact pending further rulemaking depends on the seriousness of the regulation’s 

deficiencies and the disruptive consequences of vacatur. Allied-Signal, Inc. v. U.S. 

Nuclear Regulatory Comm’n, 988 F.2d 146, 150-151 (D.C. Cir. 1993). In applying 

the APA, this Court does “not hesitate[] to vacate a rule when the agency has not 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 60 of 65
50 

responded to empirical data or to an argument inconsistent with its conclusion.” 

Comcast Corp. v. FCC, 579 F.3d 1, 8 (D.C. Cir. 2009); see also id. at 10; In re 

Core Commc’ns, Inc., 531 F.3d 849, 862 (D.C. Cir. 2008) (Griffith, J., concurring).

Here, the regulation “creates an exception that has the potential to swallow 

the rule entirely.” JA447. The district court’s order vacating it has not caused 

significant disruption, and does not threaten future disruption, because that action 

simply restored the prior 2003 version of the regulation. As the district court 

explained in denying the Intervenors’ motion for a stay pending their initial appeal, 

“there was a valid regulation in effect” implementing BCRA’s disclosure 

requirements before promulgation of the 2007 Disclosure Regulation, and “[i]n 

light of the Court’s ruling, that regulation now governs.” JA374; see also Action 

on Smoking & Health v. CAB, 713 F.2d 795, 797 (D.C. Cir. 1983) (per curiam) 

(vacating regulation has effect of reinstating prior regulation); see also Prometheus 

Radio Project v. FCC, 652 F.3d 431, 453 n.25 (3d Cir. 2011) (same); JA450 

(same). Notably, the Commission has “fail[ed] to join the [I]ntervenors in their 

present challenge to ... vacatur” of the Disclosure Regulation, “reinforc[ing] th[e] 

belief” that vacatur was not improper and the district court did not abuse its 

discretion. Fox Television Stations, Inc. v. FCC, 293 F.3d 537, 541 (D.C. Cir. 

2002), on rehearing of 280 F.3d 1027 (D.C. Cir. 2002) (“A defense of the 

[regulation], if it was defensible, clearly would have been cognizable with respect 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 61 of 65
51 

to the choice between vacatur and remand. Consequently, ... we infer that the 

[agency]’s failure to defend the [regulation] indicates its inability to do so.”).

Contrary to CFIF’s denials (at 44), reinstating the Disclosure Regulation 

pending remand to the Commission would lead to affirmative harm, because the 

“existence of loopholes and unfaithful regulations constitutes a daily injury to both 

[plaintiffs’] interests and the clearly articulated intent of Congress.” Shays I, 340 

F. Supp. 2d 39, 52 (D.D.C. 2004), aff’d, 414 F.3d 76 (D.C. Cir. 2005). Candidates 

for federal office must be able to draw attention to the person or persons who 

finance “electioneering communications” about them and thereby put such 

electioneering communications in the proper context. For example, in denying the 

Intervenors’ motion for a stay pending appeal, this Court held that a stay would 

cause Van Hollen substantial harm because without full disclosure he would be 

hampered in his ability to respond effectively to groups sponsoring electioneering 

communications mentioning him by name. JA381. 

Moreover, if the district court had left in place regulations that do not 

faithfully implement the FECA and BCRA disclosure provisions, candidates and 

the public would be deprived of information to which they are entitled under those 

statutes for an indefinite period until the Commission mustered a majority vote for 

a new rule. As this Court previously stated, the Supreme Court’s decisions 

upholding BCRA against constitutional challenge recognize that “the public 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 62 of 65
52 

interest is best served by access to more, not less, information.” JA381. Given the 

Commission’s paralysis, a remand without vacatur would hinder substantial 

informational interests and contravene congressional intent. 

CONCLUSION 

For these reasons, the Court should affirm the district court’s judgment. 

Respectfully submitted. 

/s/ Catherine M.A. Carroll 

FRED WERTHEIMER

DEMOCRACY 21 

2000 Massachusetts Avenue NW 

Washington, DC 20036 

(202) 355-9610 

CATHERINE M.A. CARROLL

WILMER CUTLER PICKERING

 HALE AND DORR LLP

1875 Pennsylvania Avenue NW 

Washington, DC 20006 

(202) 663-6000 

DONALD J. SIMON

SONOSKY CHAMBERS SACHSE

 ENDRESON & PERRY, LLP

1425 K Street NW, Suite 600 

Washington, DC 20005 

(202) 682-0240 

ROGER M. WITTEN

FIONA J. KAYE

STEPHANIE SIMON

WILMER CUTLER PICKERING

 HALE AND DORR LLP

7 World Trade Center 

New York, NY 10007 

(212) 230-8800 

SCOTT L. NELSON

PUBLIC CITIZEN

 LITIGATION GROUP

1600 20th Street NW 

Washington, DC 20009 

(202) 588-1000 

TREVOR POTTER

J. GERALD HEBERT 

PAUL S. RYAN

TARA MALLOY

CAMPAIGN LEGAL CENTER

215 E Street NE 

Washington, DC 20002 

(202) 736-2200 

May 11, 2015 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 63 of 65
CERTIFICATE OF COMPLIANCE 

 This brief complies with the type-volume limitation of Federal Rule of 

Appellate Procedure 32(a)(7)(B)(i) because the brief contains 12,189 words, 

excluding parts of the brief exempted by Federal Rule Appellate Procedure 

32(a)(7)(B)(iii) and D.C. Circuit Rule 32(a)(1). This brief complies with the 

typeface requirements of Federal Rule of Appellate Procedure 32(a)(5) and the 

type style requirements of Federal Rule of Appellate Procedure 32(a)(6) because 

the brief has been prepared in a proportionally spaced typeface in 14-point Times 

New Roman. 

/s/ Catherine M.A. Carroll 

CATHERINE M.A. CARROLL

May 11, 2015 

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 64 of 65
CERTIFICATE OF SERVICE 

I certify that on May 11, 2015, the foregoing Brief for Appellee Chris Van 

Hollen was filed using the Appellate CM/ECF system and service accomplished 

through the CM/ECF system on all participants in this case. 

/s/ Catherine M.A. Carroll 

CATHERINE M.A. CARROLL

USCA Case #15-5016 Document #1551937 Filed: 05/11/2015 Page 65 of 65