UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF SOUTH CAROLINA

CHARLESTON DIVISION

)

KUHN FOR CONGRESS, )

)

Plaintiff, ) Civ. No. 2:13-cv-3337-PMD-WWD

)

v. )

)

FEDERAL ELECTION COMMISSION, ) PROPOSED FINDINGS OF FACT

) AND CONCLUSIONS OF LAW

Defendant. )

___________________________________)

In the instant action, Plaintiff challenges the November 5, 2013, decision of

Defendant to fine Plaintiff $8,800 for the late filing of its April 2013 Quarterly Report.

(See Dkt. No. 1 at 3 of 4.) This matter is before the Court upon Defendant’s Motion to

Dismiss, and the motion has been referred to the undersigned for the issuance of a

Report and Recommendation on the motion. (See Dkt. No. 27.) For the reasons set

forth herein, Defendant’s motion should be granted. 

PROPOSED FINDINGS OF FACT

1. The Federal Election Campaign Act, 52 U.S.C. §§ 30101-30146 (formerly

2 U.S.C. §§ 431-457) (“FECA”), requires every “political committee” — which includes

candidate campaigns, political parties, and other political organizations, see 52 U.S.C. §

30101(4)-(6) (2 U.S.C. § 431(4)-(6)) — to designate a treasurer to maintain the

committee’s financial records. See 52 U.S.C. § 30102(a)-(d) (formerly 2 U.S.C. §

432(a)-(d)).1

1

Effective September 1, 2014, the provisions of FECA that were codified in Title 2 of the United

States Code were recodified in a new title, Title 52. See Editorial Reclassification Table,

http://uscode.house.gov/editorialreclassification/t52/Reclassifications_Title_52.html. To avoid confusion,

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2. The treasurer must sign and file reports that detail, among other things,

the committee’s receipts and disbursements. 52 U.S.C. § 30104(a)-(b) (2 U.S.C. §

434(a)-(b)). 

3. FECA establishes a periodic schedule for such reports. Under that

schedule, a candidate committee must file (i) a pre-election report 12 days before the

relevant election; (ii) a post-election report 30 days after the relevant election; and (iii)

quarterly reports 15 days after each calendar quarter ends, “except that the report for

the quarter ending December 31 shall be filed no later than January 31 of the following

calendar year.” 52 U.S.C. § 30104(a)(2)(A)(i)- (iii)) (2 U.S.C. § 434(a)(2)(A)(i)-(iii)).

4. Authorized committees for candidates seeking election to the United

States House of Representatives file their reports directly with the Federal Election

Commission (“FEC” or “Commission”). 52 U.S.C. § 30102(g)(3) (2 U.S.C. § 432(g)(3)).

5. The FEC is the independent agency of the United States government with

exclusive jurisdiction over the administration, interpretation, and civil enforcement of

FECA. See generally 52 U.S.C. §§ 30106(b)(1), 30107(a), 30108 (2 U.S.C. §§

437c(b)(1), 437d(a), 437g).

6. FECA establishes a detailed administrative process for the Commission to

review alleged violations of the Act. See 52 U.S.C. § 30109(a) (2 U.S.C. § 437g(a)); see

also 11 C.F.R. §§ 111.3-111.24 (regulations governing Commission’s enforcement

process).

this submission indicates in parentheses the former Title 2 citations.

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7. In 1999 Congress amended FECA to create a streamlined enforcement

system for violations of the periodic filing requirements. See Treasury and General

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

77 (1999) (codified at 52 U.S.C. § 30109(a)(4)(C) (2 U.S.C. § 437g(a)(4)(C))).

Specifically, Congress authorized the Commission to directly assess civil money

penalties for violations of 52 U.S.C. § 30104(a), (2 U.S.C. § 434(a)), which establishes,

inter alia, the deadlines for political committees’ disclosure reports. Congress recently

amended FECA to extend the Commission’s Administrative Fines program through

December 31, 2018. Extension of Admin. Penalty Auth. of Federal Election

Commission, Pub. L. 113-72 § 1, 127 Stat. 1210, 1210 (Dec. 26, 2013).

8. In 2000, the Commission promulgated regulations implementing FECA’s

administrative-fines mechanism. See Administrative Fines, 65 Fed. Reg. 31,787 (May

19, 2000) (codified as amended at 11 C.F.R. §§ 111.30-111.46). These regulations

establish the procedures that the Commission follows in cases that the Commission

determines are appropriate for treatment under the administrative-fines process. 11

C.F.R. § 111.31.

9. The Commission’s regulations define overdue reports as “late” up until a

certain number of days after the due date; after that date, the report is defined as “not

filed.” 11 C.F.R. § 111.43(e)(2).

10. Reports that are not election sensitive — including the quarterly reports

due in April of each year, 11 C.F.R. § 104.5(a)(1) — are “late” if filed within thirty days

of their due date, and they are considered “not filed” after that point. 11 C.F.R. §

111.43(e)(1).

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11. The Commission’s regulations also establish the schedules of civil

penalties authorized by 52 U.S.C. § 30109(a)(4)(C)(i)(II) (2 U.S.C. §

437g(a)(4)(C)(i)(II)). See 11 C.F.R. § 111.43(a)-(c). These penalty schedules take into

account whether the untimely (or not filed) report was election sensitive, how late it was

filed, the dollar amount of the receipts and disbursements it detailed, and the number of

prior violations by the respondent. See id.

12. John R. Kuhn was a candidate in the Republican Party’s 2013 special

election primary for the South Carolina First District House of Representative seat. (Pl.’s

Pet. for Review ¶¶ 1, 2.)

13. Plaintiff Kuhn for Congress was Mr. Kuhn’s principal campaign committee.

(AR001-002.2) Kuhn for Congress registered with the FEC in January 2013 as the

principal campaign committee for Mr. Kuhn’s special election campaign by filing its FEC

Form 1. (Id.)

14. Under 52 U.S.C. § 30104(a)(4)(A) (2 U.S.C. § 434(a)(4)(A)), the Kuhn

Committee’s April 2013 quarterly report was due on April 15, 2013, after the special

election primary held on March 19, 2013, (Pet. at 2), which the candidate lost. 

15. The Kuhn Committee failed to timely file its April 2013 Quarterly report.

(Pet. at 8, 10). 

16. On May 3, 2013, the FEC’s Assistant Staff Director emailed the Kuhn

Committee a letter notifying the Committee and its treasurer that the April 2013

Quarterly Report had not been filed by the statutory deadline. (AR014-015, AR016.)

2

(Defendant Federal Election Commission’s Administrative Record (Mar. 28, 2014) (Docket No.

28-1).

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That letter advised the Committee to file the report immediately and warned that civil

money penalties might result from the Committee’s failure to timely file the report.

(AR014.)

17. The Kuhn Committee filed its April 2013 Quarterly Report on August 20,

2013 (Pet. at 10), more than 120 days after the statutory deadline for filing the report.

52 U.S.C. § 30104(a)(2)(A)(iii) (2 U.S.C. § 434(a)(2)(A)(iii)).

18. Because the Kuhn Committee’s April 2013 Quarterly Report was filed

more than 30 days after it was due, the Commission deemed the report “not filed” under

the applicable FEC regulation, 11 C.F.R. § 111.43(e)(1).

19. The Commission initiated an administrative-fines proceeding against the

Kuhn Committee for its unfiled April 2013 Quarterly Report, and the matter was

designated as AF No. 2751. (AR032-035.)

20. On July 23, 2013, the Commission decided by a vote of 5 – 0 to find

“reason to believe” that the Kuhn Committee had violated 52 U.S.C. § 30104(a) ( 2

U.S.C. § 434(a)) by failing to file the required April 2013 Quarterly Report. (AR036-037.)

21. In the absence of reported campaign activity, i.e. the committee’s total

receipts and disbursements for the period covered by the unfiled report, the

Commission estimated $343,963 of campaign activity pursuant to the formula specified

in the Commission’s regulations. AR035-038; see 11 C.F.R. § 111.43(d)(2)(i)

(explaining formula for estimating unreported campaign activity of political committees).

22. Based on the Commission’s schedule of civil money penalties at 11

C.F.R. § 111.43, the Commission calculated the appropriate penalty for the Kuhn

Committee’s reporting violation to be $8,800. (AR038.)

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23. The Commission notified the Kuhn Committee and its treasurer, Amanda

Michelle Perry, of its reason-to-believe determination in a letter dated July 24, 2013,

that was successfully delivered the following day. (AR038-050, AR051-052.)

24. In addition to informing the Kuhn Committee and its treasurer of the

Commission’s reason-to-believe determination and civil penalty calculation, the letter

explained that any challenge to the Commission’s reason-to-believe finding and/or civil

penalty calculation must be submitted to the Commission in writing and received within

40 days of that finding, i.e. by September 1, 2013. (AR038-039.)

25. The letter further explained the three permissible grounds for challenges

to an administrative fine: “(1) a factual error in the RTB finding; (2) miscalculation of the

calculated civil money penalty by the FEC; or (3) your demonstrated use of best efforts

to file in a timely manner when prevented from doing so by reasonably unforeseen

circumstances that were beyond your control.” (AR039.) The letter provided specific

examples of circumstances that would be considered reasonably unforeseen and

beyond the Committee’s control as well as circumstances that do not meet that

standard. (AR039.) In addition, the letter attached a copy of the Commission’s

administrative-fine regulations. (AR042-050.)

26. The notification letter to the Kuhn Committee included the factual and

legal basis for the finding, the amount of the proposed civil penalty, and an explanation

of the respondent’s right to challenge both the reason-to-believe finding and the amount

of the penalty. 11 C.F.R. § 111.32. Upon receipt of this notification, the Kuhn

Committee could either pay the penalty or challenge the finding or proposed penalty. 11

C.F.R. § 111.33.

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27. By statute, the “Commission may not make any determination adverse” to

a person regarding a reporting disclosure requirement “until the person has been given

written notice and an opportunity to be heard before the Commission.” 52 U.S.C. §

30109(a)(4)(C)(ii) (2 U.S.C. § 437g(a)(4)(C)(ii)).

28. If the Kuhn Committee wished to challenge the Commission’s reason-tobelieve finding or proposed penalty, it was required to file a written response that

“detail[s] the factual basis supporting its challenge and include[s] supporting

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

29. There are three possible grounds for such an administrative challenge: (1)

factual errors in the Commission’s finding (such as if the report was, in fact, timely

filed); (2) inaccurate calculation of the penalty; or (3) a showing that

The respondent used best efforts to file in a timely manner

[but] was prevented from filing in a timely manner by

reasonably unforeseen circumstances that were beyond the

control of the respondent; and . . . [t]he respondent filed no

later than 24 hours after the end of these circumstances.

11 C.F.R. § 111.35(b)(1)-(3).

30. The regulations provide that “reasonably unforeseen circumstances”

beyond a filer’s control that would satisfy this “best efforts” defense include events such

as a failure of Commission computers or Commission-provided software despite

respondent seeking technical assistance from the Commission, severe weather, and

natural disasters, 11 C.F.R. § 111.35(c), but do not include causes such as neg ligence,

delays caused by committee vendors or contractors, or staff illness, inexperience, or

unavailability. See 11 C.F.R. § 111.35(d).

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31. The letter finally advised that “‘failure to raise an argument in a timely

fashion during the administrative process shall be deemed a waiver’ of your right to

present such argument in a petition to the U.S. district court under 2 U.S.C. § 437g [52

U.S.C. § 30109]” (AR039 (quoting 11 C.F.R. § 111.38).)

32. The Kuhn Committee did not submit an administrative challenge to the

Commission’s reason-to-believe determination or civil penalty calculation. 

33. On October 31, 2013, the Commission approved, by a vote of 6 – 0, its

Reports Analysis Division’s recommendation to make a final determination that the

Kuhn Committee and its treasurer violated 52 U.S.C. § 30104 (2 U.S.C. § 434(a)), and

to assess a civil money penalty of $8,800. (AR057-058.)

34. The Kuhn Committee ultimately reported $522,776 of campaign activity,

more than $178,000 of campaign activity above the estimated $343,963 of activity upon

which the $8,800 civil penalty was based. (AR059.) The Commission’s regulations

would have yielded a higher penalty if the actual amount of the Committee’s campaign

activity had been disclosed earlier. See 11 C.F.R. § 111.43 (a) (providing that civil

penalty for $450,000-$549,999.99 of campaign activity is $10,450). The Kuhn

Committee received the lesser $8,800 civil money penalty proposed in connection with

the Commission’s reason-to-believe finding, because the Commission’s regulatory

formula yielded an underestimate of the level of activity in this case. (AR059.)

35. The Commission notified the Kuhn Committee and its treasurer of its final

determination in a letter dated November 5, 2013, and successfully mailed the letter to

the Committee’s address of record the next day. (AR059-064.) 

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36. The notification letter advised the Kuhn Committee and its treasurer that

their “failure to raise an argument in a timely fashion during the administrative process

shall be deemed a waiver of [their] right to present such an argument in a petition to the

district court under 2 U.S.C. § 437g [52 U.S.C. § 30109].” (AR060 (citing 11 C.F.R. §

111.38).)

CONCLUSIONS OF LAW

1. When district courts determine whether an FEC administrative

determination should be modified or set aside that review is governed by the

Administrative Procedure Act (“APA”), 5 U.S.C. § 706.

2. Under the APA, “courts must uphold agency action unless it was ‘arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.’” Va. Agric.

Growers Ass’n, Inc. v. Donovan, 774 F.2d 89, 93 (4th Cir. 1985) (quoting 5 U.S.C. §

706(2)(A)); 5 U.S.C. § 706(2)(A), (C).

3. “[I]n reviewing agency action” the “district court sits as an appellate

tribunal,” and “the question whether [the agency] acted in an arbitrary and capricious

manner is a legal one which the district court can resolve on the agency record.” Univ.

Med. Ctr. of S. Nev. v. Shalala, 173 F.3d 438, 440 n.3 (D.C. Cir. 1999).

4. Judicial review of final agency action is based exclusively on the

administrative record that was before the Commission. 5 U.S.C. § 706; Trinity Am.

Corp. v. EPA, 150 F.3d 389, 401 n.4 (4th Cir. 1998). 

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5. “Judicial review of agency action is highly deferential and begins with a

presumption of validity.” Am. Whitewater v. Tidwell, 959 F. Supp. 2d 839, 849 (D.S.C.

2013) (citing Natural Res. Def. Council v. EPA, 16 F.3d 1395, 1400 (4th Cir.1993)). 

6. The standard of review “is a narrow one”; “[t]he Court is not empowered to

substitute its judgment for that of the agency.” Va. Agric. Growers Ass’n, Inc., 774 F.2d

at 93 (citations and internal quotation marks omitted). The agency’s action must be

upheld if “the agency . . . provide[s] an adequate explanation for its actions . . . [that]

show[s] a ‘rational connection between the facts found and the choice made.’” Inova

Alexandria Hosp. v. Shalala, 244 F.3d 342, 350 (4th Cir. 2001).

8. The party challenging the agency action bears the burden of proof to

show that it is entitled to relief. Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 884-85

(1990).

9. Because plaintiff failed to submit an administrative challenge regarding

the FEC’s reason-to-believe determination or civil penalty calculation, see Finding of

Fact ¶ 32, it has waived any right to present its arguments for the first time in this

litigation. 11 C.F.R. § 111.38.

10. “It is inappropriate for courts reviewing appeals of agency decisions to

consider arguments not raised before the administrative agency involved.” Pleasant

Valley Hosp., Inc. v. Shalala, 32 F.3d 67, 70 (4th Cir. 1994). “[C]ourts should not topple

over administrative decisions unless the administrative body not only has erred but has

erred against objection made at the time appropriate under its practice.” United States

v. L.A. Tucker Truck Lines, 344 U.S. 33, 37 (1952) 

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11. Even if plaintiff had not waived its arguments, this Court would conclude

that the FEC’s assessment of an $8,800 civil penalty against plaintiff was reasonable

and not arbitrary or capricious, and must be affirmed. 

12. The Administrative Record establishes that plaintiff failed to timely file its

April 2013 Quarterly Report as required by FECA and the FEC’s regulations. (AR054-

58.) Plaintiff admits that its report was filed “four months and a week after it was due.”

(Pl.’s Pet. at 3.)

13. The $8,800 civil penalty assessed by the FEC against plaintiff was

properly calculated pursuant to FECA and the FEC’s regulations, reasonable, and

neither arbitrary nor capricious. See AR038, AR054-058; 11 CFR § 111.43(a). 

14. Because plaintiff failed to submit an administrative challenge regarding

any attempt to rely on the regulatory “best efforts” defense, plaintiff has waived its right

to present any arguments in support of that regulatory defense in this litigation. 11

C.F.R. § 111.38.

15. In any event, plaintiff’s allegations in its submissions to this Court fail to

satisfy the regulatory requirements for the “best efforts” defense, i.e., that plaintiff “used

best efforts to file in a timely manner” but was prevented from doing so “by reasonably

unforeseen circumstances” beyond plaintiff’s control. 11 C.F.R. § 111.35(b)(3). Plaintiff

alleges “extenuating circumstances” that include alleged difficulties finding someone

“willing to serve as Campaign Treasurer”; the collective lack of experience or knowledge

regarding FEC filing obligations on the part of the candidate, treasurer, and alternate

treasurer; the treasurer’s pregnancy and delivery of her baby “12 days earlier than

expected”; and alleged errors by the Committee’s accountant. (Pl.’s Pet. at 4-10.)

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These allegations, even if all true, fall clearly within the categories of circumstances

explicitly excluded from the best-efforts defense, i.e., errors that arise from staff

negligence; delays caused by committee vendors or contractors; and illness,

inexperience, or unavailability of the treasurer or other staff. See 11 C.F.R. § 111.35(d).

The Court thus concludes that even if plaintiff had not waived its right to rely on the best

efforts defense, plaintiff’s allegations fail to meet the regulatory requirements of that

defense. 

16. The Court also concludes that the FEC afforded plaintiff due process and

that plaintiff has failed to supports its claim that the FEC’s administrative action

infringed its rights under the Fifth and Fourteenth Amendments of the United States

Constitution. “Whether a deprivation of constitutional rights has occurred is not

dependent upon the subjective feelings or beliefs of a plaintiff. In order to properly

maintain a due process claim, a plaintiff must have been, in fact, deprived of a

constitutionally protected liberty or property interest.” Tigrett v. Rector and Visitors of

Univ. of Va., 290 F.3d 620, 628 (4th Cir. 2002). Plaintiff has not identified any due

process violation in this case, and the Court finds no such violation.

17. The Court accordingly finds that plaintiff has failed to state a claim and

RECOMMENDS THAT ITS Petition for Review be DISMISSED.3

3

The Court directed the Commission to submit proposed findings and conclusions and provided

that Plaintiff should submit objections. The Commission timely complied with that direction but Plaintiff

has failed to do so.

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IT IS SO RECOMMENDED.

October 8, 2014

Charleston, South Carolina

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Notice of Right to File Objections to Report and Recommendation

The parties are advised that they may file specific written objections to this Report

and Recommendation with the District Judge. Objections must specifically identify the

portions of the Report and Recommendation to which objections are made and the

basis for such objections. “[I]n the absence of a timely filed objection, a district court

need not conduct a de novo review, but instead must ‘only satisfy itself that there is no

clear error on the face of the record in order to accept the recommendation.’” Diamond v.

Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72

advisory committee’s note). 

Specific written objections must be filed within fourteen (14) days of the date of

service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b);

see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5

may be accomplished by mailing objections to:

Robin L. Blume, Clerk

United States District Court

Post Office Box 835

Charleston, South Carolina 29402

Failure to timely file specific written objections to this Report and

Recommendation will result in waiver of the right to appeal from a judgment of the

District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v.

Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v.

Schronce, 727 F.2d 91 (4th Cir. 1984).

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