Allen Dickerson (pro hac vice)

Tyler Martinez (pro hac vice) 

Owen Yeates (Utah Bar No. 13901) 

CENTER FOR COMPETITIVE POLITICS

124 S. West Street, Suite 201 

Alexandria, Virginia 22314 

Telephone: 703.894.6800 

Facsimile: 703.894.6811 

adickerson@campaignfreedom.org 

tmartinez@campaignfreedom.org

oyeates@campaignfreedom.org

Scott C. Williams (Utah Bar. No. 6687)

SCOTT C. WILLIAMS, LLC

43 East 400 South 

Salt Lake City, Utah 84111 

Telephone: 801.220.0700 

Facsimile: 801.364.3232 

scwlegal@gmail.com

Scott E. Thomas 

BLANK ROME, LLP

1825 Eye Street NW 

Washington, DC 20006 

Telephone: 202.420.2601 

Facsimile: 202.420.2201 

sthomas@blankrome.com

Counsel for Defendant John Swallow 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

FEDERAL ELECTION COMMISSION,

Plaintiff, 

 v. 

JEREMY JOHNSON and 

JOHN SWALLOW,

Defendants. 

Case No. 2:15-cv-00439-DB

DEFENDANT JOHN SWALLOW’S 

MOTION TO DISMISS, MOTION FOR 

JUDGMENT ON THE PLEADINGS,

AND MEMORANDUM IN SUPPORT

District Judge Dee Benson

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i 

TABLE OF CONTENTS

Introduction ..................................................................................................................................... ii

Background .................................................................................................................................... iv

Argument .........................................................................................................................................1 

I. Standard for a Motion to Dismiss and Motion for Judgment on the Pleadings .............1 

II. The FEC’s regulation fails judicial review under the Administrative Procedure 

Act. .................................................................................................................................2 

a. The FEC’s Rule fails Chevron Step One: the statute establishes no “helping or 

assisting” liability.....................................................................................................3 

b. The FEC’s Rule fails Chevron Step Two: assuming, arguendo, that the statute is 

ambiguous, 11 C.F.R. § 110.4(b)(1)(iii) is not a reasonable construction. ..............8 

c. Without proper notice, the FEC’s rulemaking was “arbitrary, capricious, an abuse 

of discretion, or otherwise not in accordance with law.” .......................................13 

d. Because 11 C.F.R. § 110.4(b)(1)(iii) was promulgated in violation of the APA and 

applicable case law, this Court should vacate the Rule and dismiss the FEC’s claims 

against Mr. Swallow. .............................................................................................17 

III. The FEC’s regulation interposes substantial burdens on the core of protected First 

Amendment liberties. ...................................................................................................19 

a. Strict scrutiny’s closely drawn test applies to the FEC’s attempts to regulate the 

speech of political supporters of candidates and campaigns. ................................19 

b. The FEC has not shown a governmental interest in expanding liability. ..............22 

c. The FEC has failed to show that secondary liability is sufficiently tailored to a 

compelling governmental interest. .........................................................................23 

d. The terms “help” and “assist” in 11 C.F.R. § 110.4(b)(1)(iii) are unconstitutionally 

vague. .....................................................................................................................26 

Conclusion .....................................................................................................................................28 

Request for Oral Argument ............................................................................................................28 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 2 of 36
ii

Pursuant to Rules 12(b)(6) and 12(c) of the Federal Rules of Civil Procedure, Defendant 

John Swallow submits this Motion to Dismiss, Motion for Judgment on the Pleadings, and 

Memorandum in Support. As discussed below, the Federal Election Commission (“FEC” or 

“Commission”) brought its complaint based upon a regulation, 11 C.F.R. § 110.4(b)(1)(iii), which 

is contrary to law and violates protected First Amendment rights. Consequently, it acts ultra vires 

and dismissal is proper as a matter of law.

Introduction

The FEC claims that Mr. Swallow has violated 52 U.S.C. § 30122, which prohibits 

contributions made in the name of another. But that is not precisely correct. In fact, the FEC only 

alleges that Mr. Swallow helped or assisted another, namely Mr. Johnson, to violate 52 U.S.C. 

§ 30122. Its theory, then, is one of secondary liability, and it relies entirely upon 11 C.F.R. 

§ 110.4(b)(1)(iii), a Rule of the Commission’s own making.1 The statute itself is silent on 

secondary liability, and therein lies the problem. Because the FEC’s Rule has no basis in the 

statute, and because it was improperly promulgated, it has no legal effect and the FEC’s attempt 

to enforce it here is unlawful. 

Put simply, 11 C.F.R. § 110.4(b)(1)(iii) fails review under the Administrative Procedure 

Act (“APA”) and fails constitutional scrutiny. The Supreme Court has unambiguously held that 

administrative agencies may not simply read secondary civil liability into a statute, and that the 

power to create secondary civil liability lies with Congress alone. Central Bank of Denver, N.A. v. 

First Interstate Bank of Denver, N.A., 511 U.S. 164, 182 (1994). Even if Congress had, arguendo, 

 

1 See Amend. Compl. at 2, ¶ 1 (“Additionally, no person may ‘[k]nowingly help or assist’ any 

person contribute in the name of another.”) (citing only 11 C.F.R. § 110.4(b)(1)(iii)). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 3 of 36
iii

silently delegated authority to the Commission sufficient to conjure expanded civil liability, 11 

C.F.R. § 110.4(b)(1)(iii) is not a reasonable interpretation of the statute. It relies almost 

exclusively, not on the statutory scheme itself, but upon an unpublished judicial opinion not 

available publicly. Worse, the Commission failed to provide adequate notice to the public before 

adopting 11 C.F.R. § 110.4(b)(1)(iii). In fact, in the relevant Notice of Proposed Rulemaking 

(“NPRM”), the FEC specifically foreswore any intention of revising its regulations dealing with 

contributions made in the name of another. It nevertheless went on to create the secondary liability 

at issue here.

Any one of these factors is enough, individually, to vacate 11 C.F.R. § 110.4(b)(1)(iii) as 

contrary to the APA and Supreme Court guidance. 

But the FEC’s case is further undermined because “[u]nique among federal administrative 

agencies, the Federal Election Commission has as its sole purpose the regulation of core 

constitutionally protected activity.” AFL-CIO v. FEC, 333 F.3d 168, 170 (D.C. Cir. 2003). As 

such, the Commission’s regulation in this area is subject to strict scrutiny. Under this heightened 

constitutional scrutiny, the government bears the burden of proving that the restriction is narrowly 

tailored to serve a compelling governmental interest. 

But there is no compelling governmental interest when a regulation attempts to go beyond 

fighting “quid pro quo” corruption to regulating speech and advice, especially when doing so is a 

“prophylaxis-upon-prophylaxis” measure layered on top of the ban on contributions in the name 

of another and contribution limits generally. Even if the government had a compelling interest, the 

FEC’s Rule fails proper tailoring because it uses undefined terms that have vague meanings. This 

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means speakers like Mr. Swallow must either be silent or edit their speech to avoid tripping over 

an amorphous line. The First Amendment does not permit such unbounded regulation. 

Each of the problems that plague 11 C.F.R. § 110.4(b)(1)(iii) would be enough to dismiss 

the FEC’s claims against Mr. Swallow. The rulemaking is contrary to the plain language of 52 

U.S.C. § 30122. Even if the statute were ambiguous, which it is not, the Rule would not be a 

reasonable interpretation of the statute. And it was created without proper notice. Worse, even 

without these legal flaws, the Rule itself fails First Amendment scrutiny. 

There is no basis in law on which the FEC’s requested relief can be granted. Dismissal of 

the case against Mr. Swallow is therefore proper. Fed. R. Civ. P. 12(b)(6) and 12(c). 

Background 

This is an action brought by the FEC in 2015 relating to alleged activity in 2009 and 2010. 

Compare Amend. Compl. at 2, ¶ 1 (Feb. 24, 2016), ECF No. 36, id. at 6, ¶ 19 with id. at 14, ¶ 57. 

The Commission initially proceeded only against Mr. Johnson, before adding Mr. Swallow in 

2016. Compare Compl. (June 19, 2015), ECF No. 2, with Amend. Compl. (Feb. 24, 2016), ECF 

No. 36. 

Mr. Swallow categorically denies the truth of the FEC’s allegations, but for purposes of 

this motion only, Mr. Swallow “accept[s] as true” the following factual allegations in the FEC’s 

motion. Brown v. Montoya, 662 F.3d 1152, 1162 (10th Cir. 2011) (citation and quotation marks 

omitted).

2 Mr. Swallow has been a politically active individual, running for the United States 

Congress in 2002 and 2004. Amend. Compl. at 4, ¶ 12. He also “served as a fundraising adviser 

 

2 Because this Court need not accept such allegations as true, this recitation does not include factual 

claims that are irrelevant, conclusory, or a mere “recitation of the elements” of the cause of action. 

Robbins v. Okla. ex rel. Dep’t of Human Servs., 519 F.3d 1242, 1247 (10th Cir. 2008). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 5 of 36
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for [Utah Attorney General Mark] Shurtleff’s 2008 Utah attorney general and 2009 United States 

Senate campaigns” and, during Mr. Shurtleff’s 2009 campaign, he advised Mr. Johnson about 

making campaign contributions.3 Id. 

After Mr. Shurtleff elected not to pursue the 2010 Republican nomination for the U.S. 

Senate, Mr. Swallow “engaged in fundraising efforts for Mike Lee’s 2010 United States Senate 

campaign” including certain interactions with Jeremy Johnson, also a defendant here. Id.; see also 

id. ¶ 29. Mr. Swallow “promised Johnson that funding the contributions would help protect 

Johnson’s business interests from federal prosecution.” Id. ¶ 27. In particular, Mr. Swallow told 

Mr. Johnson, “[W]e’ve gotta raise this money and we gotta make Mike Lee our guy... [H]e’s 

gonna be choosing the next U.S. Attorney and you gotta have him in your corner and you gotta 

have the U.S. Attorney in your corner, especially while you’re processing poker in this district.” 

Id. at 9, ¶ 30 (brackets and ellipses in original). Mr. “Johnson asked Swallow whether he could 

write a large check to the Lee campaign or if the limits applicable to Shurtleff’s [Senate] campaign 

also applied. Swallow confirmed to Johnson that the same rules applied.” Id. ¶ 29. Furthermore, 

on June 21, 2010, Mr. Swallow “e-mailed Johnson to inform him that [Mr. Swallow had been] told 

that [four] of those checks bounced” and that Mr. Swallow would “forward [Mr. Johnson] the 

names.” Id. at 9, ¶ 34, id. at 12, 49; see also id. at 3, ¶ 5.

 

3 The FEC’s Amended Complaint alleges other bad acts outside the cause of action. Unlike its case 

against Mr. Johnson, the FEC’s allegations against Mr. Swallow concern only contributions to 

Senator Lee’s campaign. Mr. Swallow has excluded these extraneous allegations both because 

they are irrelevant to this motion and because such bad acts evidence is generally inadmissible. Cf. 

Marvin H. Maurras Revocable Trust v. Bronfman, 2013 U.S. Dist. LEXIS 136770, at *52 (N.D. 

Ill. Sept. 24, 2013) (unpublished) (disregarding allegations where a complaint alleged “the contents 

of inadmissible documents”). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 6 of 36
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Based on these allegations, the FEC claims that Mr. Swallow has violated its interpretation 

of 52 U.S.C. § 30122 promulgated at 11 C.F.R. § 110.4(b)(1)(iii). Amend. Compl. at 17, ¶ 77; id. 

at 18, ¶ C. Specifically, the FEC does not allege that Mr. Swallow contributed anything in the 

name of another. Instead, the FEC believes that he “caused, helped, and assisted” Mr. Johnson’s

straw donor scheme by soliciting Mr. Johnson’s contributions and otherwise “initiat[ing]” the 

scheme (although the Amended Complaint is silent on precisely how Mr. Swallow did the 

initiating). Id. at 3, ¶ 5, id. at 17, ¶ 77; see also id. at 5, ¶ 14. While its complaint focuses on the 

actions of Mr. Johnson,4 the FEC argues that Mr. Swallow is liable for advice concerning the 

solicitation of contributions or advice as to whether a particular candidate would be amenable to a 

constituent’s concerns. See, e.g., id. at 8, ¶¶ 29, 30. In this way, at least as concerns Mr. Swallow, 

the FEC’s Amended Complaint focuses solely on speech. 

This Motion addresses Mr. Swallow’s Third Defense: that the FEC’s complaint is based 

on a regulation improperly promulgated in violation of the Administrative Procedure Act (“APA”) 

and that it violates the First Amendment. Swallow Ans. at 37-38.5 As discussed below, 11 C.F.R. 

§ 110.4(b)(1)(iii) is contrary to law, and therefore the FEC’s claims against Mr. Swallow, based 

on that regulation, must be dismissed. 

 

4 See, e.g., id. at 8, ¶ 27, id. at 9, ¶¶ 31-32, id. at 11-12, ¶ 45. 

5 Mr. Swallow filed his answer, responding to the FEC’s allegations and asserting affirmative 

defenses. Def. John Swallow’s Answer To Amend. Compl. (May 16, 2016), ECF No. 45, 

(“Swallow Ans.”).

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 7 of 36
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Argument

I. Standard for a Motion to Dismiss and Motion for Judgment on the Pleadings 

Federal Rule of Civil Procedure 12(b)(6) provides that this Court may dismiss any claim 

that “fail[s] to state a claim upon which relief can be granted.” Rule 12(c) provides similar relief 

for judgment on the pleadings when the motion is filed “early enough not to delay trial.” Fed. R. 

Civ. P. 12(c). The Tenth Circuit examines motions under Rules 12(b)(6) and 12(c) using the same 

standard. Brown v. Montoya, 662 F.3d 1152, 1160 n.4 (10th Cir. 2011) (“‘We use the same 

standard when evaluating 12(b)(6) and 12(c) motions.’”) (quoting Jacobsen v. Deseret Book Co., 

287 F.3d 936, 941 n.2 (10th Cir. 2002)). 

To survive a motion to dismiss, the FEC “must allege facts that, if true, ‘state a claim to 

relief that is plausible on its face.’” Mayfield v. Bethards, 826 F.3d 1252, 1255 (10th Cir. 2016) 

(internal citation omitted). A claim is only “facially plausible when the allegations give rise to a 

reasonable inference that the defendant is liable.” Id. For purposes of such a motion, the facts 

alleged are viewed in “the light most favorable to the plaintiff.” Id. 

But the plaintiff must do more than plead “facts that are merely consistent with a 

defendant's liability, [because that] stops short of the line between possibility and plausibility of 

entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotation 

marks omitted); see also Wilson, 715 F.3d at 852 (applying Iqbal). It is the court’s duty “to assess 

whether the plaintiff’s complaint alone is legally sufficient to state a claim for which relief may be 

granted.” Swoboda v. Dubach, 992 F.2d 286, 290 (10th Cir. 1993) (internal citation and quotation 

marks omitted, emphasis removed). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 8 of 36
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II. The FEC’s regulation fails judicial review under the Administrative Procedure 

Act.

The FEC brings this action against Mr. Swallow based upon 11 C.F.R. § 110.4(b)(1)(iii), 

which creates secondary civil liability for violations of the prohibition on making political 

contributions in the name of another. See 52 U.S.C. § 30122. This is improper for three reasons. 

First, the FEC never had authority to issue 11 C.F.R. § 110.4(b)(1)(iii) because Congress 

unambiguously declined to create secondary liability. Second, even if the FEC’s rulemaking were 

permissible to clarify the statute, which it is not, the FEC’s interpretation is unreasonable. It is 

based solely on an unreported district court decision, without any examination of the facts or 

specific holdings of that decision. Third, 11 C.F.R. § 110.4(b)(1)(iii) is arbitrary and capricious 

because it was promulgated without the notice Congress has required under the Administrative 

Procedure Act. For all of these reasons, this Court should vacate 11 C.F.R. § 110.4(b)(1)(iii) and 

dismiss the FEC’s claims against Mr. Swallow.6

 

Courts have long limited administrative agencies’ authority to tinker with the clear terms 

of a governing statute. Under the Supreme Court’s landmark decision in Chevron U.S.A. Inc. v. 

Natural Resources Defense Council, Inc., a court first asks “whether Congress has directly spoken 

to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for 

the court, as well as the agency, must give effect to the unambiguously expressed intent of 

Congress.” 467 U.S. 837, 842-843 (1984). If Congressional intent is not clear, Chevron’s second 

 

6 Even if any statutory limitations period has passed, Mr. Swallow may “challenge [the] 

regulation[] directly on the ground that the [FEC] acted in excess of its statutory authority in 

promulgating” it by raising the challenge “by way of defense in an enforcement proceeding.” 

NLRB Union v. Federal Labor Relations Authority, 834 F.2d 191, 195 (D.C. Cir. 1987); see also

Overland Express v. ICC, 996 F.2d 356, 359 n.3 (D.C. Cir. 1993); Advance Transp. Co. v. United 

States, 884 F.2d 303, 305 (7th Cir. 1989). 

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step asks “whether the agency’s answer is based on a permissible construction of the statute.” Id.

at 843. The agency must meet step one to the Court’s satisfaction before moving to step two. Id. 

at 843 n.9 (“The judiciary is the final authority on issues of statutory construction and must reject 

administrative constructions which are contrary to clear congressional intent.”) (collecting cases 

from 1896 to 1981). 

a. The FEC’s Rule fails Chevron Step One: the statute establishes no “helping or 

assisting” liability.

An administrative agency may promulgate a rule when there is ambiguity in the underlying 

statute or when Congress has otherwise expressly delegated authority to create substantive law. 

But the statute prohibiting contributions in the name of another is clear: “[n]o person shall make a 

contribution in the name of another person or knowingly permit his name to be used to effect such 

a contribution, and no person shall knowingly accept a contribution made by one person in the 

name of another person.” 52 U.S.C. § 30122. The statute does not provide for any secondary 

liability. There is no room for claims based on “helping or assisting,” which would be a different 

cause of action.

If Congress wishes to create secondary liability, it can do so. Central Bank of Denver, N.A. 

v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 182 (1994), held that the government cannot 

infer secondary liability—aiding, abetting, helping, assisting, and the like—when the statute is 

silent:

More to the point, Congress has not enacted a general civil aiding and abetting 

statute -- either for suits by the Government (when the Government sues for civil 

penalties or injunctive relief) or for suits by private parties. Thus, when Congress 

enacts a statute under which a person may sue and recover damages from a private 

defendant for the defendant’s violation of some statutory norm, there is no general 

presumption that the plaintiff may also sue aiders and abettors. 

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In the succinct words of the en banc Seventh Circuit, “statutory silence on the subject of secondary 

liability means there is none.” Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685, 689 

(7th Cir. 2008) (en banc) (applying Central Bank of Denver to the Anti-Terrorism Act), cert. 

denied sub nom. Boim v. Salah, 558 U.S. 981 (2009). 

In Central Bank of Denver, the Supreme Court recognized that “Congress has not enacted 

a general civil aiding and abetting statute -- either for suits by the Government (when the 

Government sues for civil penalties or injunctive relief) or for suits by private parties.” 511 U.S. 

at 182. “Congress instead has taken a statute-by-statute approach to civil aiding and abetting 

liability.” Id; see id. at 182-183 (citing examples from the Internal Revenue Code, Commodity 

Exchange Act, Packers and Stockyards Act, and Insider Trading Sanctions Act of 1984). The 

specific issue in the case was whether secondary civil liability could attach to violations of the 

securities laws. The Bank served as indenture trustee for bond issues surrounding a Colorado 

Springs, Colorado development. Id. at 167. When the real estate did not meet the contractual 

threshold of value for the bonds and defaulted, the First Interstate Bank of Denver sued the 

development authority, the underwriters, and the Central Bank of Denver, claiming “violations of 

§ 10(b) of the Securities Exchange Act of 1934.” Id. at 168. 

The Central Bank of Denver court held that “the text of the statute controls our decision,” 

id. at 173, because the government “cannot... read [statutory liability] more broadly than its 

language and the statutory scheme reasonably permit.” Id. at 174 (quoting Chiarella v. United 

States, 445 U.S. 222, 234 (1980)) (internal quotation marks omitted). The statutory language of 

§ 10(b) of the Securities Act did not mention aiding and abetting. Id. at 175. Furthermore, 

“[t]he federal courts have not relied on the ‘directly or indirectly’ language when 

imposing aiding and abetting liability under § 10(b), and with good reason. There 

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is a basic flaw with this interpretation... aiding and abetting liability extends beyond

persons who engage, even indirectly, in a proscribed activity.” 

Id. at 176 (emphasis added). 

In other words, “aiding and abetting liability reaches persons who do not engage in the 

proscribed activities at all.” Id. Since the statute did not impose aiding and abetting liability, “the 

statute itself resolve[d] the case.”7 Id. at 178. As the dissenting justices pointed out, the holding of 

Central Bank of Denver not only applied to private civil claims, but to claims by the government 

as well. See id. at 200 (Stevens, J., dissenting) (“The majority leaves little doubt that the Exchange 

Act does not even permit the SEC to pursue aiders and abettors in civil enforcement actions”) 

(emphasis in original).

The Supreme Court also refused to extend the general criminal liability for aiding and 

abetting—found at 18 U.S.C. § 2—to civil suits. Id. at 190 (“[W]hile it is true that an aider and 

abettor of a criminal violation of any provision of the 1934 Act, including § 10(b), violates 18 

U.S.C. § 2, it does not follow that a private civil aiding and abetting cause of action must also 

exist. We have been quite reluctant to infer a private right of action from a criminal prohibition 

alone....”) (emphasis added)). Moreover, the Supreme Court has “refused to infer a private right 

of action from ‘a bare criminal statute’” and have not “suggested that a private right of action exists 

for all injuries caused by violations of criminal prohibitions.” Id. (internal citation and quotation 

marks omitted).The government therefore cannot rely on 18 U.S.C. § 2 as a backstop when the 

 

7 Congress responded to Central Bank of Denver decision and amended the securities laws “to 

provide for limited coverage of aiders and abettors.” Stoneridge Inv. Partners, LLC v. ScientificAtlanta, Inc., 552 U.S. 148, 162 (2008) (noting 15 U.S.C. § 78t(e)).

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applicable statute does not provide for secondary civil liability. An agency simply cannot create 

new categories of liability when the statute is silent. 

Central Bank of Denver’s holdings and rationale have been applied to other federal statutes, 

including cases where the government’s interest is inarguably greater than its need to regulate 

political speech. Even in the national security context, the en banc Seventh Circuit in Boim applied 

Central Bank of Denver’s rationale to hold that statutory silence cannot imply Congressional 

acquiescence to secondary liability, there in the context of individuals accused of aiding terrorists. 

Boim, 549 F.3d at 689. The District Court for the District of Columbia, where plaintiff FEC resides, 

likewise applies Central Bank of Denver to the Anti-Terrorism Act. See, e.g., Owens v. BNP 

Paribas, S.A., 235 F. Supp. 3d 85, 94 (D.D.C. 2017).8

Beyond securities law and the fight against terrorism, Central Bank of Denver’s holding 

has been applied to RICO’s9

 otherwise-expansive reach. See, e.g., Pa. Ass’n of Edwards Heirs v. 

Rightenour, 235 F.3d 839, 840 (3d Cir. 2000); Dept. of Economic Dev. v. Arthur Andersen & Co., 

924 F. Supp. 449, 475-476 (S.D.N.Y. 1996). Likewise, the Middle District of Florida applied 

Central Bank of Denver to the Stored Communications Act. Vista Mktg., LLC v. Park, 999 F. Supp. 

2d 1294, 1296 (M.D. Fla. 2014) (applying Central Bank of Denver in context of the Stored 

Communications Act (18 U.S.C. § 2701 et seq.)); id. at 1297 (applying Boim to the same act). Tax 

law has also benefited from the Supreme Court’s reasoning. See, e.g., Swartwout v. Edgewater 

Grill LLC, No. 12-130, 2013 U.S. Dist. LEXIS 97250, at *7 (W.D. Mich. July 12, 2013) 

 

8 The Second Circuit does the same. See, e.g., Terrorist Attacks on September 11, 2001 v. Al Rajhi 

Bank (In re Terrorist Attacks on September 11, 2001), 714 F.3d 118, 123 (2d Cir. 2013) (citing 

Central Bank of Denver, 511 U.S. at 185, and Boim).

9

 The Racketeer Influenced and Corrupt Organizations Act, codified at 18 U.S.C. §§ 1961–1968. 

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(unpublished) (applying Central Bank of Denverto the Internal Revenue Code prohibition on filing 

fraudulent W-2 forms); id. at *9 (applying Boim in same context).

Indeed, even when a court thinks it might be good policy to impose secondary liability, 

Central Bank of Denver’s reasoning controls. The courts are not free to “amend the statute to create 

liability for acts that are not themselves... within the meaning of the statute.” Central Bank of 

Denver, 511 U.S. at 177-178. Whether or not it is good policy to allow for secondary liability is 

irrelevant; the statutory language controls. Id. at 188. (“Policy considerations cannot override our 

interpretation of the text and structure of the Act....”) (citing Demarest v. Manspeaker, 498 U.S. 

184, 191 (1991), Pinter v. Dahl, 486 U.S. 622, 654 (1988), and Santa Fe Indus. v. Green, 430 U.S. 

462, 477 (1977)). 

Following the Supreme Court’s lead, the district courts have applied this rejection of policy 

considerations. For example, the Eastern District of New York “recognizes that, from a policy 

standpoint, state and local governments could enforce the [Contraband Cigarette Trafficking Act] 

more effectively if they could pursue aiders and abettors in addition to primary violators.” City of 

New York v. Milhelm Attea & Bros., No. 06-CV-3620, 2009 U.S. Dist. LEXIS 19351, at *17 

(E.D.N.Y. Mar. 11, 2009) (unpublished). But “policy considerations... cannot override the plain 

meaning of the statutory text.” Id. at *17-18 (citing Central Bank of Denver, 511 U.S. at 188). 

Aiding and abetting liability “is for Congress to decide through legislation, not for this Court to 

determine by a strained interpretation.” Id. at *18. 

Central Bank of Denver applies here. The campaign finance statute is clear and succinct: 

“No person shall make a contribution in the name of another person or knowingly permit his name 

to be used to effect such a contribution, and no person shall knowingly accept a contribution made 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 14 of 36
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by one person in the name of another person.” 52 U.S.C. § 30122. Nowhere does the statute discuss 

secondary liability of any kind. Instead, the “help or assist”10 language the Commission relies upon 

is entirely its own creation. 11 C.F.R. § 110.4(b)(1)(iii); FEC, Explanation and Justification: 

Affiliated Committees, Transfers, Prohibited Contributions, Annual Contribution Limitations and 

Earmarked Contributions, 54 Fed. Reg. 34098, 34105 (Aug. 17, 1989) (“Explanation and 

Justification”). The Explanation and Justification for the Rule’s creation does not claim any 

ambiguity in the statute, only that it “implements” the ban on contributions in the name of another. 

54 Fed. Reg. at 34014. 

Because Congress did not create secondary liability in 52 U.S.C. § 30122, the FEC’s 

regulation fails under Chevron Step One and Central Bank of Denver. Any civil claim based on 

11 C.F.R. § 110.4(b)(1)(iii), therefore, is contrary to law and the claims against Mr. Swallow 

should be dismissed pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(c). 

b. The FEC’s Rule fails Chevron Step Two: assuming, arguendo, that the statute 

is ambiguous, 11 C.F.R. § 110.4(b)(1)(iii) is not a reasonable construction. 

Even if the FEC could promulgate a rule to create secondary liability—that is, if Central 

Bank of Denver and its progeny did not exist—11 C.F.R. § 110.4(b)(1)(iii) is not a reasonable 

construction of the statute. Chevron Step Two provides that “if the statute is silent or ambiguous 

with respect to the specific issue, the question for the court is whether the agency’s answer is based 

 

10 Worse, in deciding to bring this action against Mr. Swallow, the FEC did not even apply the 

language of its own regulation. Instead, the FEC’s General Counsel’s Office relied on other 

standards from the Explanation and Justification: for example, “initiate” or “instigate.” 54 Fed. 

Reg. at 34015; cf. Amend. Compl. at 3, ¶ 5, id. at 5, ¶ 14. The terms are not defined and their 

relationship to the terms “help” or “assist” in the rule is not established. “Initiate” or “instigate” 

are yet another step removed from Congress’s enactment, and the further the Commission moves 

from the statute, the more clearly the regulation fails Chevron Step One.

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9 

on a permissible construction of the statute.” Chevron, 467 U.S. at 843. Of course, even then the 

rule may be “arbitrary, capricious, or manifestly contrary to the statute” and therefore, by 

definition, not a reasonable construction. Id. at 844. Because 11 C.F.R. § 110.4(b)(1)(iii) fails both 

tests, it is invalid.

First, Chevron Step Two requires some deference to regulatory agencies, since they must 

“fill the statutory gap in reasonable fashion” when there are “ambiguities in statutes within an 

agency’s jurisdiction to administer.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 

545 U.S. 967, 980 (2005) (“Brand X”). But such deference only applies “[i]f a statute is 

ambiguous, and if the implementing agency’s construction is reasonable.” Id. (applying Chevron, 

467 U.S. at 843-844) (emphasis added). 

And the FEC’s interpretation is unreasonable, for the same reason that it is unauthorized 

under Chevron Step One: the statute is clear, and it provides no room for imposing secondary 

liability. The statute declares that, when dealing with a straw donor scheme, only a “person [who] 

make[s] a contribution” or who “knowingly permit[s] his name to be used to effect such a 

contribution” is liable under 52 U.S.C. § 30122. United States v. O’Donnell, 608 F.3d 546, 549 

(9th Cir. 2010) (emphasis removed, brackets added). Given that “[a] contribution is statutorily 

defined as ‘any gift... of money,’” and “‘giving’ connotes the idea of providing from one’s own 

resources rather than simply conveying,” only the source of funds can make a contribution under 

52 U.S.C. § 30122. Id. at 550 (citations omitted). Intermediaries, by contrast, are only liable when 

they “knowingly permit [their] name[s] to be used” as the straw donor. 52 U.S.C. § 30122. The 

government has not alleged that Mr. Swallow either contributed from his own resources or that he 

permitted his name to be used as a straw donor. Therefore, the government’s attempt to apply 52 

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10 

U.S.C. § 30122 to Mr. Swallow’s alleged conduct, and the regulation it relies upon in doing so, 

represent an unreasonable interpretation of Congress’s chosen language.11 Consequently, the 

Commission’s regulation flunks Chevron Step Two. 

Moreover, 11 C.F.R. § 110.4(b)(1)(iii) is invalid because it is “arbitrary, capricious, an 

abuse of discretion, or otherwise not in accordance with law.” Motor Vehicle Mfrs. Ass’n v. State 

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41 (1983) (“State Farm”); cf. 5 U.S.C. § 706(2)(A). Under 

the APA and State Farm: 

[T]he agency must examine the relevant data and articulate a satisfactory 

explanation for its action including a rational connection between the facts found 

and the choice made.... Normally, an agency rule would be arbitrary and capricious 

if the agency has relied on factors which Congress has not intended it to consider, 

entirely failed to consider an important aspect of the problem, offered an 

explanation for its decision that runs counter to the evidence before the agency, or 

is so implausible that it could not be ascribed to a difference in view or the product 

of agency expertise.

State Farm, 463 U.S. at 43 (internal citations and quotation marks omitted).

In weighing the reasoned analysis of the agency, courts examine “the thoroughness, 

validity, and consistency of an agency’s reasoning.” FEC v. Democratic Senatorial Campaign 

Comm., 454 U.S. 27, 37 (1981) (citing Adamo Wrecking Co. v. United States, 434 U.S. 275, 287, 

n.5 (1978) and Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). Furthermore, the D.C. Circuit 

has held that “a permissible statutory construction under Chevron is not always reasonable under 

State Farm: we might determine that although not barred by statute, an agency’s action is arbitrary 

and capricious because the agency has not considered certain relevant factors or articulated any 

 

11 Moreover, the government cannot cure these defects by amending the complaint against Mr. 

Swallow, as its entire case relies upon Mr. Johnson being the source of the contributions and 

persons other than Mr. Swallow acting as the straw donors. See, e.g. Amend. Compl. at 8, ¶ 27, id. 

at 9, ¶¶ 31-32, id. at 11, ¶ 45. 

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11 

rationale for its choice.” Republican Nat’l Comm. v. FEC, 76 F.3d 400, 407 (D.C. Cir. 1996) 

(internal citations and quotation marks omitted).

To that end, “[i]t is axiomatic that [a court] may uphold agency orders based only on 

reasoning that is fairly stated by the agency.” Williams Gas Processing - Gulf Coast Co., L.P. v. 

Fed. Engy. Reg. Comm’n, 528 F.3d 914, 929 (D.C. Cir. 2004). Later, “post hoc rationalizations by 

agency counsel will not suffice.” Id. (quoting Western Union Corp. v. Fed. Communications 

Comm’n, 856 F.2d 315, 318 (D.C. Cir. 1988)). While the FEC has “some discretion” in 

promulgating rules, “it must support its decision with reasoning and evidence.” Shays v. FEC, 528 

F.3d 914, 929 (D.C. Cir. 2008). 

Where there is “both lack of substantial evidence and a mistake of law”12 in the agency’s 

interpretation, the court may find “indicia of arbitrary and capricious actions and thus [the agency’s 

action] may be subsumed under the arbitrary and capricious label.” Sandoval v. Aetna Life & 

Casualty Ins. Co., 967 F.2d 377, 380 n.4 (10th Cir. 1992).13 As the previously-cited authority 

demonstrates, the FEC itself has struggled with this standard in the past, having failed to 

“consider[] certain relevant factors or articulate[] any rationale for its choice” in adopting certain 

rules. Republican Nat’l Comm., 76 F.3d at 407. 

 

12 The mistake of law in this case is that 52 U.S.C. § 30122 supports secondary liability. See 

Section II(a), supra, discussing the statute’s clear language and the Supreme Court’s holding in 

Central Bank of Denver. 13 Though distinct lines of review under the APA, it stands to reason that an “arbitrary and 

capricious” regulation is, by definition, not a reasonable interpretation of the statute under Chevron

Step Two. WildEarth Guardians v. United States Fish & Wildlife Serv., 784 F.3d 677, 685 (10th 

Cir. 2015) (“[T]he question becomes whether the agency’s answer is based on a permissible 

construction of the statute... An agency interpretation is permissible where it ‘is not “arbitrary, 

capricious, or manifestly contrary to the statute.”’”) (quoting Chevron, 467 U.S. at 843). That is 

because State Farm analysis “overlaps somewhat with [a court’s] Chevron step-two analysis.” 

Republican Nat’l Comm., 76 F.3d at 407. 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 18 of 36
12 

The FEC’s basis for inventing new, secondary liability is sparse. In its Explanation and 

Justification for 11 C.F.R. § 110.4(b)(1)(iii), the FEC simply said: 

The rules pertaining to contributions in the name of another follow the current 

provisions, except that new paragraph [11 C.F.R. § 110.4](b)(1)(iii) has been added 

to specifically prohibit any person from knowingly helping or assisting any other 

person in making a contribution in the name of another.... The new language is 

consistent with a recent judicial interpretation of [52 U.S.C. § 30122] in FEC v. 

Rodriguez, No. 86-687 Civ-T-10(B) (M.D. Fla. May 5, 1987) (unpublished order 

denying motion for summary judgment). 

Explanation and Justification, 54 Fed. Reg. at 34105. There were no claims by the FEC that the 

statute was ambiguous or that it implied secondary liability. The entirety of the Commission’s 

reasoning rested on a lone decision in a district court in Florida, without further clarification, 

thought, or evidence. This was not the “reasoned analysis” that is necessary when “the 

Commission change[s] its regulation.” Republican Nat’l Comm., 76 F.3d at 407. 

The Rodriquez opinion on which the FEC purported to rely is not available, seemingly 

anywhere.14 Therefore, the public cannot know if the order from the Middle District of Florida 

considered as-applied or facial relief, considered facts similar to Mr. Swallow’s situation, or any 

other contextually-relevant factor that might shed light on 11 C.F.R. § 110.4(b)(1)(iii). Without 

clarifying why Rodriquez applies to the promulgation of the Rule, this Court is left only with 

speculation. “But it is not the role of the courts to speculate on reasons that might have supported 

 

14 Not only is Rodriguez an unpublished opinion, it is not available in the databases of LexisNexis, 

Bloomberg, or Westlaw. Because the case is from 1987, PACER does not have individual case 

documents from the docket. The FEC, which routinely puts case decisions on its website, provides 

only a case summary. Compare FEC website, “FEC v. Rodriguez” available at

https://transition.fec.gov/law/litigation_CCA_FEC_P.shtml#fec_rodriguez (limited summary); 

with “Epstein v. FEC” available at https://transition.fec.gov/law/litigation_CCA_Alpha.shtml#E 

(attaching a 1981 Memorandum Opinion in favor of FEC’s Motion for Summary Judgement at 

district court level and linking to related documents before both district and appellate courts). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 19 of 36
13 

an agency’s decision.” Zen Magnets, LLC v. Consumer Prod. Safety Comm’n, 841 F.3d 1141, 

1150-1151 (10th Cir. 2016) (internal punctuation omitted) (collecting cases). We are left with what 

the agency gave us: a reference to an opinion not available to the public-at-large, without further 

clarification or justification. 

This does not demonstrate the “thoroughness, validity, and consistency of [the] agency’s 

reasoning.” Democratic Senatorial Campaign Comm., 454 U.S. at 37. There is no attempt to 

explain any rationale behind the rule. This Court cannot accord Chevron deference to reasoning 

that simply does not exist. 

More importantly, the rulemaking and FEC v. Rodriguez predated the clarification of the 

law by the Supreme Court in Central Bank of Denver. In light of that binding and intervening 

precedent, it is not clear how the Middle District of Florida, having been instructed that agencies 

may not read secondary liability into a statute, would rule today. See Section II(a), supra. 

For all of these reasons, 11 C.F.R. § 110.4(b)(1)(iii) is not a reasonable interpretation of 

the relevant statute.

c. Without proper notice, the FEC’s rulemaking was “arbitrary, capricious, an 

abuse of discretion, or otherwise not in accordance with law.”

Not only is 11 C.F.R. § 110.4(b)(1)(iii) unauthorized by Congress, the FEC further ignored 

Congressional guidance by failing to provide any relevant notice before its adoption. 

The APA mandates that a “[g]eneral notice of proposed rule making shall be published in 

the Federal Register.” 5 U.S.C. § 553(b). This notice allows “interested persons an opportunity to 

participate in the rule making through submission of written data, views, or arguments” for the 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 20 of 36
14 

“consideration” of the agency.15 5 U.S.C. § 553(c). Without the proper notice, there is no 

opportunity for comment, and the rule becomes “arbitrary, capricious, an abuse of discretion, or 

otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). 

The central question for proper notice is “whether interested parties reasonably could have 

anticipated the final rulemaking from the draft rule.” Shays v. FEC, 337 F. Supp. 2d 28, 101 

(D.D.C. 2004), aff’d 414 F.3d 76 (D.C. Cir. 2005) (quoting Anne Arundel County v. EPA, 963 F.2d 

412, 418 (D.C. Cir. 1992)). Where a rule is a “logical outgrowth” of the NPRM’s language, the 

agency need not reintroduce the rule. Az. Pub. Serv. Co. v. EPA, 211 F.3d 1280, 1299 (D.C. Cir. 

2000). The “logical outgrowth” test asks if a “party, ex ante, should have anticipated that such a 

requirement might be imposed in determining whether adequate notice was given in a notice of 

proposed rulemaking.” Id.; see also Shays, 337 F. Supp. 2d at 101. 

But the “logical outgrowth” doctrine “does not extend to a final rule that finds no roots in 

the agency’s proposal because ‘something is not a logical outgrowth of nothing.’” Envtl. Integrity 

Project, 425 F.3d at 996 (quoting Kooritzky v. Reich, 17 F.3d 1509, 1513 (D.C. Cir. 1994)). 

Interested parties are not expected to “divine [the agency’s] unspoken thoughts.’” Id. (quoting 

Arizona Pub. Serv. Co., 211 F.3d at 1299 (brackets in Envtl. Integrity Project). That is, the courts 

“refuse[] to allow agencies to use the rulemaking process to pull a surprise switcheroo on regulated 

entities.” Id. Where the Commission’s “NPRM is almost completely silent on the provision,” a 

 

15 Notice is designed “(1) to ensure that agency regulations are tested via exposure to diverse 

public comment, (2) to ensure fairness to affected parties, and (3) to give affected parties an 

opportunity to develop evidence in the record to support their objections to the rule and thereby 

enhance the quality of judicial review.” Envtl. Integrity Project v. EPA, 425 F.3d 992, 996 (D.C. 

Cir. 2005) (quoting Int’l Union, United Mine Workers of Am. v. Mine Safety & Health Admin., 

407 F.3d 1250, 1256 (D.C. Cir. 2005)). 

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15 

court will find “that the Commission violated the APA’s notice requirements.” Shays, 337 F. Supp. 

2d at 101.16

In this case, 11 C.F.R. § 110.4(b)(1)(iii) is invalid because the FEC failed to provide proper 

notice before creating and implementing it, as required by the APA. Indeed, not only did the FEC 

fail to give sufficient notice, the Notice of Proposed Rulemaking went so far as to explicitly 

disclaim any interest in revising the straw donor regulation, much less broadening its scope. See 

FEC, Notice of Proposed Rulemaking: Contribution and Expenditure Limitations and Prohibitions 

(Notice 1986-4), 51 Fed. Reg. 27183, 27186 (July 30, 1986) (“NPRM”) (“The Commission is not 

proposing any revisions to the text of the regulations [for § 110.4] in this notice.”).17 

The Commission’s Explanation and Justification indicates that “[t]he Commission 

received no public comments on [the] section” covering adoption of 11 C.F.R. § 110.4(b)(1)(iii).18

 

16 The D.C. Circuit, home to the FEC and a large portion of the relevant caselaw, has “held for 

many years that an agency’s failure to disclose critical material, on which it relies, deprives 

commenters of a right under § 553 to ‘participate in rulemaking.’” Allina Health Servs. v. Sebelius, 

746 F.3d 1102, 1110 (D.C. Cir. 2014) (citing Air Transp. Ass’n of Am. v. Fed. Aviation Admin., 

169 F.3d 1, 7 (D.C. Cir. 1999) and Assoc. of Data Processing Serv. Orgs., Inc. v. Bd. of Governors 

of the Fed. Reserve Sys., 745 F.2d 677, 684-685 (D.C.Cir.1984)) (emphasis removed). Courts have 

“not been hospitable to government claims of harmless error in cases in which the government 

violated § 553 of the APA by failing to provide notice.” Id. That is because “an utter failure to

comply with notice and comment cannot be considered harmless” when the resulting rules are not 

the logical outgrowth of what was announced in the NPRM. Sugar Cane Growers Coop. of Fla. 

v. Veneman, 289 F.3d 89, 96 (D.C. Cir. May 10, 2002) (applying McLouth Steel Prods. Corp. v. 

Thomas, 838 F.2d 1317, 1324 (D.C. Cir. 1988)). 

17 In the NPRM, and subsequent Explanation and Justification, the FEC combined discussions of 

the ban on foreign contributions, 52 U.S.C. § 30121, and the ban on contributions in the name of 

another, 52 U.S.C. § 30122. See, e.g., Explanation and Justification, 54 Fed. Reg. at 34105 (“This 

section implements sections [30121] and [30122] of the [Federal Election Campaign Act] by 

prohibiting contributions from foreign nationals in connection with any election for local, State or 

Federal public office, and by prohibiting contributions in the name of another.”). 

18 And the Commission received only ten written public comments for the whole rulemaking, and 

heard the testimony of a mere three witnesses. Id. at 34098. 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 22 of 36
16 

Explanation and Justification, 54 Fed. Reg. at 34104-105. No wonder. The NPRM explicitly stated 

that the Commission would not make substantive changes to the law governing contributions in 

the name of another. NPRM, 51 Fed. Reg. at 27186. The public had no notice of the creation of a 

new class of secondary liability. 

In other words, the FEC pulled a switcheroo. 

Without giving the regulated community proper notice, the FEC failed to give campaign 

finance practitioners (and their clients) the opportunity to consider the far reaches of a new rule 

imposing secondary liability. The FEC claimed the adoption of secondary liability was based on a 

recent judicial decision, but without noticing the Commission’s intent to rely on that decision, the 

regulated community could not respond. A single district court’s unreported opinion, based upon 

unknown facts and claims, cannot support a general rulemaking, especially when the public cannot 

review the language of the district court’s order to see if 11 C.F.R. § 110.4(b)(1)(iii) is a faithful 

implementation of the opinion, or whether the facts were cabined to the circumstances of the case. 

These flaws are fatal. The NPRM failed to disclose that the Commission was looking to 

create secondary liability—that is, regulate the activity of an entirely new class of people—and 

therefore 11 C.F.R. § 110.4(b)(1)(iii) is ultra vires and violates Chevron Steps One and Two, State 

Farm, and the basic tenants of APA notice and comment requirements. The rulemaking was 

therefore “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 

5 U.S.C. § 706(2)(A).

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 23 of 36
17 

d. Because 11 C.F.R. § 110.4(b)(1)(iii) was promulgated in violation of the APA 

and applicable case law, this Court should vacate the Rule and dismiss the 

FEC’s claims against Mr. Swallow. 

The discussion above leaves the question of remedy. Given the sheer number of errors 

committed by the FEC, and the constitutionally sensitive area in which it operates, 11 C.F.R. 

§ 110.4(b)(1)(iii) should be vacated. 

While not the automatic solution, vacatur is appropriate when “‘the seriousness of the 

order’s deficiencies (and thus the extent of doubt whether the agency chose correctly)’” outweighs 

“‘the disruptive consequences of an interim change that may itself be changed.’” Sugar Cane 

Growers, 289 F.3d at 98 (quoting Allied-Signal, Inc. v. United States Nuclear Regulatory 

Commission, 988 F.2d 146, 150-151 D.C. Cir. 1993)). In short, “deficient notice is a fundamental 

flaw that almost always requires vacatur” of the non-compliant regulation. Allina Health Services, 

746 F.3d at 1110-1111 (internal citation and quotation marks omitted).19 

Here, vacatur is warranted. The promulgation of 11 C.F.R. § 110.4(b)(1)(iii) was ultra 

vires. The Rule fails Chevron Step One, because the Supreme Court has made clear in Central

Bank of Denver that secondary liability cannot be created without clear statutory authority, and no 

such authority lies in 52 U.S.C. § 30122. Even then, the Rule is not a reasonable interpretation of 

the statute (indeed, it lacks any rationale to which this court may defer) and is based on an 

unreported case without further explanation, failing Chevron Step Two. See, e.g., Heartland Reg’l 

Med. Ctr. v. Sebelius, 566 F.3d 193, 199 (D.C. Cir. 2009) (“[W]hen an agency’s explanation of 

 

19 It is only in “rare circumstances,” such as the ministerial calculating of thresholds based upon 

known, quantifiable data and formulae, when a court will not vacate the rule, preferring 

“established administrative practice,” such as using a previously-used formula. See, e.g., County 

of Los Angeles v. Shalala, 192 F.3d 1005, 1023 (D.C. Cir. 1999) (swapping a 1985 formula for a 

1984 formula, as-applied to the litigant’s facts, rather than vacating 1985 formula in its entirety).

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 24 of 36
18 

the basis and purpose of its rule is so inadequate that the reviewing court cannot evaluate it, the 

regulation is subject to vacatur....”). The lack of notice for the Rule only compounds these errors.

On the other hand, vacating the Rule will not damage the Commission’s ability to stop quid 

pro quo corruption. Section § 30122 and the rest of 11 C.F.R. 110.4(b) will still be in effect and 

available to police people contributing in the name of another. See, e.g., United States v. 

Whittemore, 776 F.3d 1074, 1077 (9th Cir. 2015) (discussing criminal prosecution under 52 U.S.C. 

§ 30122); FEC v. Williams, 104 F.3d 237, 239 (9th Cir. 1996) (detailing civil claims from FEC 

regarding alleged contribution in the name of another in context of statute-of-limitations claim). 

Moreover, the Commission will suffer no prejudice. In contrast to numerous successful 

resolutions, both criminal and civil, of the ban on contributions in the name of another, the FEC 

has used 11 C.F.R. § 110.4(b)(1)(iii) sparingly since its promulgation in the 1980s. Vacating a 

little-used regulation, especially one so plainly in violation of established APA procedure and 

judicial guidance, will do little harm to the Commission’s ability to regulate contributions. 

Consequently, this Court should vacate 11 C.F.R. § 110.4(b)(1)(iii) and dismiss the FEC’s 

claims against Mr. Swallow.20

 

20 If this Court does not vacate 11 C.F.R. § 110.4(b)(1)(iii) generally, as-applied relief is available 

for Mr. Swallow in the form of a judicially-created exception. See, e.g., Allied-Signal, 988 F.2d at 

154 (directing an as-applied exception for the entity that highlighted the agency’s notice 

deficiency).

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19 

III. The FEC’s regulation interposes substantial burdens on the core of protected 

First Amendment liberties.

a. Strict scrutiny’s closely drawn test applies to the FEC’s attempts to regulate 

the speech of political supporters of candidates and campaigns.

Because it chills political speech at the core of the First Amendment, the FEC’s regulation 

must meet strict scrutiny’s closely drawn test. The Supreme Court has noted that “‘there is 

practically universal agreement that a major purpose of [the First] Amendment was to protect the 

free discussion of governmental affairs,’” which “of course includ[es] discussions of candidates.” 

Buckley v. Valeo, 424 U.S. 1, 14 (1976) (per curiam) (quoting Mills v. Ala., 384 U.S. 214, 218 

(1966)). That is because “[t]here is no right more basic in our democracy than the right to 

participate in electing our political leaders.” McCutcheon v. FEC, 572 U.S. ___, ___, 134 S. Ct. 

1434, 1440-1441 (2014). Therefore, “it can hardly be doubted that the constitutional guarantee has 

its fullest and most urgent application precisely to the conduct of campaigns for political office.” 

Buckley, 424 U.S. at 15 (quoting Monitor Patriot Co. v. Roy, 401 U.S. 265, 272 (1971)). To that 

end, the Supreme Court has long held that speech surrounding candidates for elected office and 

the speech and association rights implicated by political contributions “command[] the highest 

level of First Amendment protection.” Williams-Yulee v. Fla. Bar, 575 U.S. ___, ___, 135 S. Ct. 

1656, 1665 (2015).

Therefore, the Court must apply strict scrutiny’s “closely drawn” test to restrictions on 

speech in connection with the solicitation of campaign funds. Id.; cf. McConnell v. FEC, 540 U.S. 

93, 136 (2003), overruled in part on other grounds, Citizens United v. FEC, 558 U.S. 310, 365 

(2010). Under this robust test, the government may restrict and burden speech for soliciting 

contributions “only if the restriction is narrowly tailored to serve a compelling interest.” WilliamsCase 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 26 of 36
20 

Yulee, 135 S. Ct. at 1665. Of course, “it is the rare case in which a State demonstrates that a speech 

restriction is narrowly tailored to serve a compelling interest.” Id. at 1665-1666 (internal citation 

and quotation marks omitted).21 

It is true that “[o]ffers to engage in illegal transactions are categorically excluded from First 

Amendment protection,” United States v. Williams, 553 U.S. 285, 297 (2008), and regulations 

prohibiting contributions in the name of another have been upheld under heightened scrutiny, 

McConnell, 540 U.S. at 121-122 (Stevens, J. and O’Connor, J. for the Court) (noting prohibitions 

discussed in Buckley, 424 U.S. at 10-19). But the FEC’s regulation inhibits far more speech than 

the prohibitions upheld by the Supreme Court. And it cannot avoid constitutional scrutiny of the 

full range of speech it seeks to prohibit simply because some of that speech might be unprotected. 

The Commission’s use of 11 C.F.R. § 110.4(b)(1)(iii) goes far beyond solicitation of 

criminal conduct. Even reading the complaint in the light most favorable to the Commission, the 

FEC’s regulation will make discussing which candidates have more favorable policies, or passing 

on information about a bounced check, a basis for punishment, when such speech is neither 

 

21 Even viewing the facts of this case as one implicating only the right of association via political 

contributions, heightened scrutiny still applies. Buckley, 424 U.S. at 22. Contribution limits are 

subject to “a lesser but still ‘rigorous standard of review,’” also called closely drawn scrutiny. 

McCutcheon, 134 S. Ct. at 1444 (quoting Buckley, 424 U.S. at 29). Under such closely drawn 

scrutiny, the government must “demonstrate[] a sufficiently important interest and employ[] means 

closely drawn to avoid unnecessary abridgement of associational freedoms.” Id. (quoting Buckley, 

424 U.S. at 25). The government bears the burden of proving it has such a sufficiently important 

interest, and that the regulation is properly tailored to that interest. Elrod v. Burns, 427 U.S. 347, 

362 (1963) (to survive exacting scrutiny “[t]he interest advanced must be paramount, one of vital 

importance, and the burden is on the government to show the existence of such an interest... it is

not enough that the means chosen in furtherance of the interest be rationally related to that end.”) 

(emphasis added).

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21 

contemplated by the plain language of 52 U.S.C. § 3012222 nor supported by relevant precedent. 

Because it thus burdens speech about public issues and candidates, speech that “commands the 

highest level of First Amendment protection,” Williams-Yulee, 135 S. Ct. at 1665, the FEC’s 

regulation must meet closely drawn scrutiny. Id.; cf. McConnell, 540 U.S. at 136. As discussed 

below, it fails to meet that standard.

Furthermore, the FEC could not avoid constitutional scrutiny here even if the speech at 

issue in fact only related to alleged illegal conduct. That is, even if there were a statutory basis for 

secondary liability, the FEC lacks any direct proof for such liability. Instead, it must try to make 

its case by stacking inference on inference based on circumstantial evidence. Cf. United States v.

Rufai, 732 F.3d 1175, 1188 (10th Cir. 2013) (directing caution in “piling inference upon inference” 

to the point that “speculation and conjecture... render[ a] finding a guess or mere possibility” in 

arriving at the standard of proof in a given case) (internal citations and quotation marks omitted, 

emphasis added). The result is a case where presumptively protected speech, including statements 

that are legally harmless on their face, must be recast as circumstantial evidence of an offense. 

That process does not change the fact that the speech on which the FEC would prove its case is 

not, on its face, in any way unlawful. Nor does it change the First Amendment’s protections for 

those statements.

 

22 Indeed, the prohibition on contributions in the name of another is a longstanding component of 

campaign finance law, but it is not without exception. For example, Congress specifically allowed 

for bundled contributions. 52 U.S.C. § 30104(i)(8) (disclosure of lobbyist bundled contributions); 

cf. 11 C.F.R. § 104.22 (disclosure of bundling by lobbyist/registrants and lobbyist/registrant 

PACs). And a single large check resulting from such bundling is both permissible and protected. 

McCutcheon, 134 S. Ct. at 1450 (“Spending large sums of money in connection with elections, but 

not in connection with an effort to control the exercise of an officeholder’s official duties, does not 

give rise to such quid pro quo corruption.”). Of course, the true source of the bundled money is 

still disclosed. See, e.g., 11 C.F.R. § 104.22(b) (reporting requirements). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 28 of 36
22 

The FEC can only suggest that Mr. Swallow’s speech is in furtherance of illegal conduct 

by begging the question. Because the statements the FEC quotes are not illegal in themselves, the 

Court must assume Mr. Swallow’s ultimate guilt in order to cast them as part of a nefarious plot. 

Such tortured reasoning is inconsistent with the FEC’s pleading burdens, much less the First 

Amendment’s protections. 

Finally, the messiness of the FEC’s inferential, circumstantial case—because of the mixed 

findings of fact and First Amendment conclusions necessary to find Mr. Swallow liable—

implicates the doctrine of constitutional facts. And, because of the special nature of such facts, 

they will be subject to independent review by every court looking at this case. See Hurley v. IrishAmerican Gay, Lesbian and Bisexual Grp. of Boston, 515 U.S. 557, 567 (1995) (noting that courts 

have an “obligation” to independently review constitutional facts “because the reaches of the First 

Amendment are ultimately defined by the facts it is held to embrace”).23 

b. The FEC has not shown a governmental interest in expanding liability.

It is the government’s burden to show a compelling interest in regulating speech. 

McCutcheon, 134 S. Ct. at 1452 (“When the Government restricts speech, the Government bears 

 

23 See, e.g., Lund v. Rowan Cty., 837 F.3d 407, 413 (4th Cir. 2016), aff’d 863 F.3d 268 (4th Cir. 

2017) (en banc) (reviewing “de novo a district court’s findings of constitutional fact and its 

ultimate conclusions regarding a First Amendment challenge”) (internal citation and quotation 

marks omitted); Cressman v. Thompson, 798 F.3d 938, 946 (10th Cir. 2015) (noting that “factual 

findings, as well as the conclusions of law, are reviewed without deference”) (internal quotation 

marks omitted); Flanigan’s Enters. v. Fulton Cty., 596 F.3d 1265, 1276 (11th Cir. 2010) (noting 

that review of “findings of constitutional facts... is de novo.”) (internal citation and quotation 

marks omitted); Sullivan v. City of Augusta, 511 F.3d 16, 24 (1st Cir. 2007) (requiring “plenary” 

review where “mixed law/fact matters... implicate core First Amendment concerns”) (internal 

quotation marks omitted); Pocatello Educ. Ass’n v. Heideman, 504 F.3d 1053, 1056 (9th Cir. 

2007), overruled on other grounds by Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353 (2009) 

(reviewing de novo “[m]ixed questions of law and fact”). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 29 of 36
23 

the burden of proving the constitutionality of its actions.”). The FEC has not articulated an interest 

in expanding the scope of 52 U.S.C. § 30122 to include those whose speech about candidates might 

be inferred as “helping” or “assisting” an actual lawbreaker. As discussed at length in Section II, 

supra, the Commission’s justifications for doing so were sparse at best and did not articulate a 

compelling governmental interest in regulating the speech that Mr. Swallow is accused of 

making.24 See 54 Fed Reg. 34098. Furthermore, the FEC nowhere invokes the only interest the 

Supreme Court has permitted in the contribution limit context: “target[ing] what [the Supreme 

Court] ha[s] called ‘quid pro quo’ corruption or its appearance.” McCutcheon, 134 S. Ct. at 1441 

(internal citation omitted).25

c. The FEC has failed to show that secondary liability is sufficiently tailored to a 

compelling governmental interest.

Because the FEC has failed to articulate a compelling governmental interest in expanding 

liability, the regulation necessarily fails scrutiny. The FEC’s action here implicates political 

speech—efforts to urge others to support or oppose a candidate—that “command[] the highest 

level of First Amendment protection.” Williams-Yulee, 135 S. Ct. at 1665. And, given the strength 

of the speech issues at stake versus the FEC’s failure to articulate an interest, “something... 

outweighs nothing every time.” SpeechNow.org v. FEC, 599 F.3d 686, 695 (D.C. Cir. 2010) (en 

banc) (quoting Nat’l Ass’n of Retired Fed. Employees v. Horner, 879 F.2d 873, 879 (D.C. Cir. 

1989)). 

 

24 Indeed, and, as discussed in Section II(a) above, it cannot do so under Central Bank of Denver. 25 Any campaign finance law that “pursue other objectives... impermissibly inject the Government 

“into the debate over who should govern.... And those who govern should be the last people to 

help decide who should govern.” Id. at 1441-1442 (emphasis in original). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 30 of 36
24 

But, even assuming the FEC had in fact articulated an interest in controlling “‘quid pro 

quo’ corruption or its appearance,” McCutcheon, 134 S. Ct. at 1441 (internal citation omitted), the 

regulation would still fail scrutiny. The government’s interest in regulating actual or apparent 

corruption “captures the notion of a direct exchange of an official act for money.” Id. The FEC has 

not explained how Mr. Swallow’s speech to a third party creates the appearance that he was trading 

money for an official act by Senator Lee, nor alleged facts supporting such an inference. Similarly, 

the Commission has failed to explain how prohibiting Mr. Swallow’s speech would prevent the 

direct exchange of an official act by Senator Lee for money from Mr. Swallow. 

Rather, the FEC’s entire theory is that Mr. Swallow “helped” a violation of 52 U.S.C. 

§ 30122. In particular, the FEC alleges that Mr. Swallow urged Mr. Johnson to support Senator 

Lee to “help protect Johnson’s business interests from federal prosecution.” Amend. Compl. at 8 

¶ 27. According to the FEC, Mr. Swallow said that Senator Lee would be “choosing the next U.S. 

Attorney,” and that “hav[ing both the Senator and the U.S. Attorney] in [Mr. Johnson’s] corner” 

would be helpful “if the federal government comes after [the online] poker” industry, whose 

transactions were processed by Mr. Johnson’s companies. Amend. Compl. at 4 ¶ 11, 9 ¶ 30. But 

urging others to support candidates who will support their interests is not illegal. See McCutcheon, 

134 S. Ct. at 1451 (noting that “spend[ing] large sums [to] garner ‘influence over or access to’ 

elected officials” does not constitute quid pro quo corruption, and that “the Government may not 

seek to limit the appearance of mere influence or access”).

Knowing this, the FEC further alleges that Mr. Swallow told Mr. Johnson that the latter 

“could [not] write a large check to the Lee campaign,” but then nevertheless “solicited Johnson to 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 31 of 36
25 

reimburse [others’] contributions to the Lee campaign.”26 Amend. Compl. at 8, ¶¶27, 29. Finally, 

the FEC alleges that, after Mr. Johnson allegedly solicited others to make contributions to Senator 

Lee and promised to repay them, Mr. Swallow e-mailed Mr. Johnson that he had been “told that 

[four] of those checks [from the donors Mr. Johnson contacted] bounced,” and that Mr. Swallow 

would “forward... the names” of those donors. Amend. Compl. at 9, ¶ 33. 

The relationship between these statements and the anti-corruption interest, however, is too 

attenuated to survive scrutiny. The Supreme Court has warned that contribution limits “themselves 

are a prophylactic measure.” McCutcheon, 134 S. Ct. at 1458. That is “because few if any 

contributions to candidates will involve quid pro quo arrangements.” Id. And laws punishing 

bribery further deter actual and apparent corruption. Thus, contribution limits are just a 

“prophylactic measure” protecting against actual and apparent corruption, and the FEC’s 

regulation at issue here goes even further as a “prophylaxis-upon-prophylaxis.” Id. (internal 

citation and quotation marks omitted). In that context, courts must “be particularly diligent in 

scrutinizing the law’s fit” to make sure that the government “avoid[s] ‘unnecessary abridgment’ 

of First Amendment rights.” Id. (citation omitted). 

Here, we are dealing with a “prophylaxis-upon-prophylaxis” regulation, one whose scope 

will always—even in situations where there is no false donor scheme—treat as suspicious, and 

thus chill, advocacy. The innocent activity the FEC would chill includes advising others about 

 

26 This allegation is entirely conclusory. The FEC has alleged no specific facts in connection with 

Mr. Swallow’s supposed “solicitation,” and this Court is not required to give the Commission the 

benefit of the doubt where it has failed to meet its pleading burden. In that context, the contrast 

between the FEC’s specific quotation concerning bounced checks—again, speech that is not 

unlawful and carries an innocent explanation—and its complete silence as to the content and 

context of any solicitation is telling.

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 32 of 36
26 

which candidate will best represent their interests, and notifying fundraisers that supporters with 

whom they were working had fallen through with their promises. Against this obvious First 

Amendment harm, the FEC can only suggest that by muzzling Mr. Swallow, Mr. Johnson would 

not have gone forward with an unlawful scheme. That connection is too attenuated, and the balance 

of harms too severe. 

Consequently, as with the aggregate limits at issue in McCutcheon, the FEC’s regulation 

here “intrude[s] without justification on a citizen’s ability to exercise ‘the most fundamental First 

Amendment activities,’” while failing to significantly “further the only governmental interest [the 

Supreme] Court” has accepted. Id. at 1462 (citation omitted). 

d. The terms “help” and “assist” in 11 C.F.R. § 110.4(b)(1)(iii) are 

unconstitutionally vague. 

In addition to failing scrutiny under the closely drawn test, the FEC’s regulation is 

unconstitutionally vague. Government action unconstitutionally chills speech when it “blanket[s] 

with uncertainty whatever may be said[, compelling a] speaker to hedge and trim.” Buckley, 424 

U.S. at 43 (quoting Thomas v. Collins, 323 U.S. 516, 535 (1945)). To give “First Amendment 

freedoms [the] breathing space [they need] to survive, government may regulate... only with 

narrow specificity.” Keyishian v. Bd. of Regents, 385 U.S. 589, 604 (1967) (citations omitted, 

emphasis added). In particular, statutes and regulations restricting advice must be narrowly 

interpreted to avoid unconstitutional restrictions on speech. See, e.g., Hersh v. United States, 553 

F.3d 743, 756 (5th Cir. 2008) (narrowing scope of advice to which regulation could apply “[t]o 

avoid potential constitutional questions regarding... restrictions on speech”); see also Milavetz, 

Gallop & Milavetz, P.A. v. United States, 559 U.S. 229, 247 (2010) (upholding statute because 

“the prohibited advice” was narrowly defined). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 33 of 36
27 

Here, the FEC’s regulation is infected with ambiguity. Section 110.4(b)(1)(iii) makes it an 

offense to “[k]nowingly help or assist any person in making a contribution in the name of another.” 

Lacking anything to narrow the scope of “help or assist,” even a bank teller might be afraid to 

make out a certified check when he is told that a candidate is the payee and a third person the 

payor. And the FEC’s attempt to pursue Mr. Swallow have not only failed to narrow the 

regulation’s terms and give them specificity, but has made those terms even less clear. See, e.g., 

Pl. FEC Mot. to Amend and Supp. Compl. and for Permissive Joinder at 3 (Dec. 10, 2015), ECF 

No. 25 (using still other undefined terms, like “initiate[]” and “effect[],” in averring liability under 

11 C.F.R. § 110.4(b)(1)(iii)); cf. Amend. Compl. at 10, ¶ 36 (using an undefined standard of 

“caused, helped, and assisted” to allege liability against Mr. Swallow). 

As discussed above, the FEC has relied on statements by Mr. Swallow simply urging Mr. 

Johnson to support someone who would support Mr. Johnson’s interests. Thus, anyone supporting 

or opposing a given candidate might abstain altogether from urging friends to go out and encourage 

others to make contributions, for fear that one of the people she spoke with might then reimburse 

the others’ contributions.27 Consequently, as a direct result of the FEC’s failure to define terms 

like “help” or “assist,” speakers will “inevitably... steer far wider of the unlawful zone,” cutting 

into protected speech, “than if the boundaries... were clearly marked.” Grayned v. City of 

 

27 Worse, the FEC’s reading of 11 C.F.R. § 110.4(b)(1)(iii) could extend to nearly any conversation 

concerning the prohibition on giving in the name of another, including legal advice regarding its 

scope. Mr. Swallow is an attorney, and the complaint is unclear as to whether the FEC believes he 

was conveying legal advice when he made the alleged statements. Amend. Compl. at 4, ¶ 12. Legal 

advice is when “one... acts in a representative capacity... in counseling, advising and assisting” a 

client. Newman v. Ed Bozarth Chevrolet Co., 714 F. Supp. 2d 1114, 1118 (D. Colo. 2009); cf. 

Nelson v. Smith, 154 P.2d 634, 389 (Utah. 1944) (“The practice of law... consists of giving 

advice....”). 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 34 of 36
28 

Rockford, 408 U.S. 104, 109 (1972) (internal quotation marks omitted). The FEC’s regulation is 

thus unconstitutionally vague. 

Conclusion 

The FEC has badly overreached its authority. It bases its complaint against Mr. Swallow 

on its interpretation of 11 C.F.R. § 110.4(b)(1)(iii), which is purportedly based on 52 U.S.C. 

§ 30122. But because the FEC’s rulemaking for 11 C.F.R. § 110.4(b)(1)(iii) was contrary to the 

plain language of the statute, the Administrative Procedure Act, and the First Amendment, there 

is no basis in law on which the FEC’s requested relief can be granted. Dismissal of the case against 

Mr. Swallow, and vacatur of the misguided regulation upon which he is brought before this Court, 

is therefore proper at this stage as a matter of law.

Request for Oral Argument

Mr. Swallow requests oral argument. This motion involves important issues arising under 

multiple Supreme Court interpretations of the APA and the First Amendment. The importance of 

the issues and complexity of the pertinent case law suggest that oral argument will be helpful to 

the Court. 

Scott C. Williams (Utah Bar. No. 6687) 

SCOTT C. WILLIAMS, LLC

43 East 400 South 

Salt Lake City, Utah 84111 

Telephone: 801.220.0700 

Facsimile: 801.364.3232 

scwlegal@gmail.com 

Scott E. Thomas 

BLANK ROME, LLP

1825 Eye Street NW

Respectfully submitted,

/s/ Allen Dickerson 

Allen Dickerson (pro hac vice) 

Tyler Martinez (pro hac vice) 

Owen Yeates (Utah Bar No. 13901) 

CENTER FOR COMPETITIVE POLITICS

124 S. West Street, Suite 201 

Alexandria, Virginia 22314 

Telephone: 703.894.6800 

Facsimile: 703.894.6811 

adickerson@campaignfreedom.org 

tmartinez@campaignfreedom.org

oyeates@campaignfreedom.org

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 35 of 36
29 

Washington, DC 20006

Telephone: 202.420.2601 

Facsimile: 202.420.2201 

sthomas@blankrome.com 

 

Counsel for Defendant John Swallow 

Dated: October 23, 2017 

Case 2:15-cv-00439-DB Document 98 Filed 10/23/17 Page 36 of 36