UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

CHRIS VAN HOLLEN, 

 Plaintiff, 

 v. 

FEDERAL ELECTION COMMISSION, 

 Defendant. 

Civil Action No. 1:11-cv-00766 (ABJ) 

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

The plaintiff, Chris Van Hollen, by his undersigned counsel, and pursuant to Fed. R. Civ. 

P. 56, the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2201, and the Administrative Procedure 

Act, 5 U.S.C. § 706(2)(A) & (C), respectfully moves this Court for a summary judgment 

declaring that 11 C.F.R. § 104.20(c)(9) promulgated by the Federal Election Commission is 

“arbitrary, capricious, an abuse of discretion, [and] otherwise not in accordance with law” and 

“in excess of [the Commission’s] statutory jurisdiction, authority, or limitations,” and vacating 

and remanding 11 C.F.R. § 104.20(c)(9) to the Commission for further proceedings consistent 

with the Court’s judgment. 

 Support for this motion is set forth in the accompanying Memorandum of Points and 

Authorities in Support of Plaintiff’s Motion for Summary Judgment; the Declaration of Chris 

Van Hollen; the Declaration of Fiona J. Kaye and accompanying exhibits; and the complete 

administrative record, filed by the Commission on June 21, 2011 (Dkt. No. 17). Plaintiff’s 

requested relief is set forth in the accompanying Proposed Order. 

 Plaintiff respectfully requests oral argument on this motion. 

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 1 of 45
Dated this 1st day of July, 2011. 

Respectfully submitted, 

Fred Wertheimer (Bar No. 154211) 

DEMOCRACY 21 

2000 Massachusetts Ave, N.W. 

Washington, D.C. 20036 

(202) 355-9610 

/s/ Roger M. Witten

Roger M. Witten (Bar No. 163261) 

Brian A. Sutherland 

Fiona J. Kaye 

WILMER CUTLER PICKERING

 HALE AND DORR LLP

399 Park Avenue 

New York, NY 10022 

(212) 230-8800 

Donald J. Simon (Bar No. 256388) 

SONOSKY CHAMBERS SACHSE

 ENDRESON & PERRY, LLP

1425 K Street, N.W. 

Suite 600 

Washington, D.C. 20005 

(202) 682-0240 

Trevor Potter (Bar No. 413778) 

J. Gerald Hebert (Bar No. 447676) 

Paul S. Ryan (Bar No. 502514) 

Tara Malloy (Bar No. 988280) 

CAMPAIGN LEGAL CENTER

215 E Street N.E. 

Washington, D.C. 20002 

(202) 736-2200 

Attorneys for Plaintiff Chris Van Hollen 

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 2 of 45
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

CHRIS VAN HOLLEN, 

 Plaintiff, 

 v. 

FEDERAL ELECTION COMMISSION, 

 Defendant. 

Civil Action No. 1:11-cv-00766 (ABJ) 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF 

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 3 of 45
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TABLE OF CONTENTS 

PRELIMINARY STATEMENT .....................................................................................................1 

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

A. History Of The Challenged Regulation ...................................................................2 

B. Statement Of Facts.................................................................................................14 

ARGUMENT.................................................................................................................................16 

I. JURISDICTION......................................................................................................................16 

II. STANDARD OF REVIEW.......................................................................................................17 

III. THE CHALLENGED REGULATION FAILS AT CHEVRON STEP ONE ........................................18 

A. BCRA Unambiguously Requires Disclosure Of “All Contributors” .....................18 

B. BCRA’s Disclosure Provision Addresses The Question Whether A 

Corporation Or Labor Organization May Decline To Identify Contributors 

Who Do Not Manifest A “Purpose” To Further “Electioneering 

Communications” ..................................................................................................23 

C. The FEC’s Statutory Interpretation Exceeds The Commission’s Authority .........25 

IV. THE CHALLENGED REGULATION ALSO FAILS AT CHEVRON STEP TWO AND IS 

ARBITRARY AND CAPRICIOUS ............................................................................................27 

A. The FEC’s Statutory Interpretation Is Impermissible And Unreasonable 

Because It Is Based On Arbitrary And Irrational Assumptions.............................28 

B. The FEC’s Statutory Interpretation Is Impermissible And Unreasonable 

Because It Frustrates The Policy of BCRA To Promote Disclosure .....................33 

V. THE COURT SHOULD DECLARE THAT THE CHALLENGED REGULATION IS 

UNLAWFUL, VACATE IT, AND DIRECT THE FEC TO PROMULGATE A REVISED 

REGULATION WITH REASONABLE EXPEDIENCY .................................................................34 

CONCLUSION..............................................................................................................................35 

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TABLE OF AUTHORITIES 

CASES 

American Bar Associates v. FTC, 

430 F.3d 457 (D.C. Cir. 2005).................................................................................................27 

Asarco, Inc. v. EPA, 

616 F.2d 1153 (9th Cir. 1980) .................................................................................................14 

Bluewater Network v. EPA, 

372 F.3d 404 (D.C. Cir. 2004).................................................................................................28 

Buckley v. Valeo, 

424 U.S. 1 (1976).......................................................................................................................2 

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

467 U.S. 837 (1984)...........................................................................................................17, 28 

Citizens United v. FEC, 

130 S. Ct. 876 (2010).........................................................................................................13, 23 

Esch v. Yeutter, 

876 F.2d 976 (D.C. Cir. 1989).................................................................................................14 

FAIC Securities Inc. v. United States, 

768 F.2d 352 (D.C. Cir. 1985).................................................................................................22 

FCC v. Fox TV Stations, Inc., 

129 S. Ct. 1800 (2009).......................................................................................................18, 33 

FEC v. Akins, 

524 U.S. 11 (1998)...................................................................................................................16 

FEC v. Massachusetts Citizens for Life, 

479 U.S. 238 (1978)...................................................................................................................2 

FEC v. Wisconsin Right to Life, Inc., 

551 U.S. 449 (2007)...................................................................................................6, 7, 21, 32 

Hernandez v. C.I.R., 

490 U.S. 680 (1989).................................................................................................................20 

In re Core Communications, Inc., 

531 F.3d 849 (D.C. Cir. 2008).................................................................................................34 

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IMS, P.C. v. Alvarez, 

129 F.3d 618 (D.C. Cir. 1997).................................................................................................14 

McConnell v. FEC, 

540 U.S. 93 (2003)...........................................................................................................2, 3, 24 

Missouri Public Service Commission v. FERC, 

337 F.3d 1066 (D.C. Cir. 2003)...............................................................................................29

Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co., 

463 U.S. 29 (1983).......................................................................................................18, 28, 33 

National Gypsum Co. v. EPA, 

968 F.2d 40 (D.C. Cir. 1992)...................................................................................................29 

National Mining Association v. U.S. Army Corps of Engineers, 

145 F.3d 1399 (D.C. Cir. 1998)...............................................................................................34

National Treasury Employees Union v. Hove, 

840 F. Supp. 165 (D.D.C. 1994), aff’d, 53 F.3d 1289 (D.C. Cir. 1995)..................................14 

Natural Resources Defense Council v. EPA, 

489 F.3d 1250 (D.C. Cir. 2007)...............................................................................................34

Oceana, Inc. v. Locke, 

674 F. Supp. 2d 39 (D.D.C. 2009)...........................................................................................14 

Public Citizen v. DOJ, 

491 U.S. 440 (1989).................................................................................................................16 

*Public Citizen v. FTC, 

869 F.2d 1541 (D.C. Cir. 1989).........................................................................................19, 27 

Shays v. FEC (“Shays I”), 

340 F. Supp. 2d 39 (D.D.C. 2004), aff’d 414 F.3d 76 (D.C. Cir. 2005)..................................35 

*Shays v. FEC (“Shays I), 

414 F.3d 76 (D.C. Cir. 2005)........................................................................................... passim

Shays v. FEC (“Shays III”), 

508 F. Supp. 2d 10 (D.D.C. 2007), aff’d in part, rev’d in part, 

528 F.3d 914 (D.C. Cir. 2008).................................................................................................35 

*Shays v. FEC (“Shays III”), 

528 F.3d 914 (D.C. Cir. 2008)......................................................................................... passim

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Sierra Club v. Van Antwerp, 

719 F. Supp. 2d 77 (D.D.C. 2010)...........................................................................................34 

United States v. American Bar Endowment, 

477 U.S. 105 (1986).................................................................................................................20 

STATUTES, CODES & REGULATIONS 

2 U.S.C. § 431(8)(A)..................................................................................................................6, 21 

2 U.S.C. § 434(b)(3)(A).................................................................................................................12 

2 U.S.C. § 434(c) ...........................................................................................................................22 

2 U.S.C. § 434(c)(1).................................................................................................................12, 22 

2 U.S.C. § 434(c)(2)(C) ...........................................................................................................12, 22 

2 U.S.C. § 434(f)..............................................................................................................4, 6, 22, 25 

2 U.S.C. § 434(f)(2)(E).......................................................................................................... passim

2 U.S.C. § 434(f)(2)(F) .......................................................................................................... passim

2 U.S.C. § 434(f)(3) ...................................................................................................................3, 21 

2 U.S.C. § 437d(a)(8).....................................................................................................................25 

2 U.S.C. § 438(e) ...........................................................................................................................19 

2 U.S.C. § 441b(c)(2).................................................................................................................7, 24 

2 U.S.C. § 441b(c)(6).................................................................................................................7, 24 

5 U.S.C. § 706(2)(A)................................................................................................................18, 34 

15 U.S.C. § 4402(a)(2)...................................................................................................................19 

28 U.S.C. § 1331............................................................................................................................16 

28 U.S.C. § 2201............................................................................................................................34 

11 C.F.R. § 104.20(c).................................................................................................................5, 21 

11 C.F.R. § 104.20(c)(7)................................................................................................................25 

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 7 of 45
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11 C.F.R. § 104.20(c)(9)........................................................................................................ passim

11 C.F.R. § 109.10(e)(1)(vi) ..........................................................................................................12 

11 C.F.R. § 114.2(b)(3)..................................................................................................................24 

11 C.F.R. § 114.10.....................................................................................................................5, 24 

Administrative Procedure Act, 5 U.S.C. §§ 551-706 ................................................................1, 16 

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

116 Stat. 81 (2002).....................................................................................................1, 3, 16, 25 

Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq. ..................................................................16 

FEC, Notice of Proposed Rulemaking, 67 Fed. Reg. 51131-01 (Aug. 7, 2002) ................... passim 

FEC, Notice of Final Rulemaking, 68 Fed. Reg. 404-01 (Jan. 3, 2003)................................ passim

FEC, Notice of Proposed Rulemaking, 72 Fed. Reg. 50261-01 (Aug. 31, 2007) ...........................8 

FEC, Final Rule and Explanation and Justification on Electioneering Communications, 11 

C.F.R. Part 104, 114, 72 Fed. Reg. 72899-01 (Dec. 26, 2007)........................................ passim

Federal Election Campaign Act of 1971, Pub. L. No. 92-225, 2 U.S.C. §§ 431 et seq.................16 

Taft-Hartley Act, ch. 120, § 304, 61 Stat. 159 (1947) .....................................................................2 

Tillman Act, ch. 420, 34 Stat. 864 (1907) .......................................................................................2 

War Labor Disputes Act, ch. 144, § 9, 57 Stat. 167 (1943).............................................................2 

OTHER AUTHORITIES 

147 Cong. Rec. S2433 (Mar. 19, 2001) ...........................................................................................7 

147 Cong. Rec. S2845 (Mar. 26, 2001) ...........................................................................................7 

147 Cong. Rec. S3034 (Mar. 28, 2001) ...........................................................................................4 

147 Cong. Rec. S3074 (Mar. 29, 2001) ...........................................................................................4 

147 Cong. Rec. S3238 (Apr. 2, 2001)..............................................................................................4 

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2010 Instructions for Form 990 Return of Organization Exempt From Income Tax 34, 

available at http://www.irs.gov/pub/irs-pdf/i990.pdf..............................................................32 

Black’s Law Dictionary (8th ed. 2004)..........................................................................................34 

Concise Oxford English Dictionary (11th ed. 2004) ...............................................................19, 20 

Outside Spending, CENTER FOR RESPONSIVE POLITICS, available at 

http://www.opensecrets.org/outsidespending/index.php ...................................................14, 15 

Press Release, FEC, Commission to Conduct Rulemaking Following Supreme Court 

Ruling (July 19, 2007) ...............................................................................................................8 

Taylor Lincoln, Disclosure Eclipse, PUBLIC CITIZEN (Nov. 18, 2010) available at 

http://www.citizen.org/documents/Eclipsed-Disclosure11182010.pdf ...................................14 

Webster’s Third New Int’l Dictionary (2002) .........................................................................19, 20 

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 9 of 45
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Plaintiff Chris Van Hollen respectfully submits this memorandum of points and 

authorities in support of his motion for summary judgment pursuant to Rule 56 of the Federal 

Rules of Civil Procedure and this Court’s order dated May 18, 2011. 

PRELIMINARY STATEMENT 

This lawsuit challenges, under the Administrative Procedure Act, 5 U.S.C. §§ 551-706, a 

regulation the defendant Federal Election Commission (“FEC”) promulgated in December 

2007—11 C.F.R. § 104.20(c)(9). That regulation is inconsistent with and is eviscerating a 

critical disclosure provision of the Bipartisan Campaign Reform Act of 2002 (“BCRA”), Pub. L. 

No. 107-155, 116 Stat. 81. BCRA requires all persons, including corporations and labor 

organizations, that pay for “electioneering communications” to disclose “all contributors of 

$1,000 or more.” The challenged FEC rule, by contrast, provides that corporations and labor 

organizations need identify only some (or even none) of those contributors—those who have 

announced a “purpose of furthering electioneering communications.” Thus, contrary to the plain 

language and purpose of BCRA, the challenged FEC regulation permits corporations and labor 

organizations to pay for “electioneering communications” without disclosing the sources of such 

funding. 

As the FEC should have considered and foreseen, “savvy campaign operators” have 

exploited the loophole created by § 104.20(c)(9) “to the hilt,” Shays v. FEC, 528 F.3d 914, 927-

28 (D.C. Cir. 2008) (“Shays III”) (internal quotation marks omitted). As the Commission has 

admitted in this proceeding, persons (including corporations and unions) making “electioneering 

communications” disclosed the sources of the money they were spending for less than 10 percent 

of their $79.9 million in “electioneering communication” spending during the 2010 election 

cycle. Defendant Federal Election Commission’s Answer (“Answer”), Dkt. No. 16, ¶ 30. By all 

accounts, this situation will worsen considerably in the 2012 election cycle as far more 

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 10 of 45
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expenditures will be made using funds provided by undisclosed sources, absent action by the 

Court. 

STATEMENT OF THE CASE 

A. History Of The Challenged Regulation 

1. Congress Enacts The Bipartisan Campaign Reform Act of 2002 

The Supreme Court’s landmark decision in Buckley v. Valeo, 424 U.S. 1 (1976), struck 

down as unconstitutional provisions of the Federal Election Campaign Act that capped the 

amount of “expenditures” individuals and political committees could make to support or oppose 

federal candidates. 424 U.S. at 23-38. In doing so, the Court first held that, to avoid vagueness 

problems, the term “expenditure,” when referencing disbursements by persons other than 

candidates and political committees, could apply only to disbursements for communications that 

used “express advocacy” terms such as “vote for,” “vote against,” and “elect.” Id. at 44, n.52. 

These express advocacy terms came to be known as “magic words”; expenditures that did not 

use magic words came to be known as “issue ads.” 

Subsequently, in FEC v. Massachusetts Citizens for Life, 479 U.S. 238 (1978) (“MCFL”), 

the Court similarly construed the then long-standing statutory ban on corporate and union 

expenditures1

 to apply only to disbursements for express advocacy communications. See id. at 

249 (“[A]n expenditure must constitute ‘express advocacy’ in order to be subject to the 

prohibition of § 441b.”). Following that ruling, corporations, unions, and other groups began to 

spend large sums on purported “issue ads” that avoided the use of “magic words” but praised or 

criticized federal candidates during the campaign season. McConnell v. FEC, 540 U.S. 93, 128 

n.20 (2003) ($135 to $150 million was spent in the 1996 campaign on multiple broadcasts of 

 

1

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

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

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 11 of 45
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about 100 ads). By the 2000 election, campaign expenditures on such “issue ads” exceeded $500 

million. See id. (“130 groups spent over an estimated $500 million on more than 1,100 different 

ads.”). 

Viewing these and other developments, Congress concluded that the campaign finance 

system had suffered a complete “meltdown.” Shays v. FEC, 414 F.3d 76, 81-82 (D.C. Cir. 2005) 

(“Shays I”). In response, Congress enacted BCRA. Id. at 82. BCRA defined a new category of 

campaign spending called “electioneering communications,” which includes any broadcast, 

cable, or satellite communication that refers to a clearly identified candidate for federal office, is 

made within 30 days before a primary election or 60 days before a general election in which the 

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

geographically targeted to the relevant electorate. BCRA § 201, 2 U.S.C. § 434(f)(3). BCRA 

both banned corporations and unions from spending their treasury funds for “electioneering 

communications,” and required all persons who make “electioneering communications” to 

disclose the sources of the funding they use for such expenditures. 

BCRA required disclosure of contributors to persons making “electioneering 

communications,” and provided two disclosure options, BCRA § 201, 2 U.S.C. § 434(f)(2): 

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

which consists of funds contributed solely by individuals ..., the 

names and addresses of all contributors who contributed an 

aggregate amount of $1,000 or more .... Nothing in this 

subparagraph is to be construed as a prohibition on the use of funds 

in such a segregated account for a purpose other than 

electioneering communications. 

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

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

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

making the disbursement during the period beginning on the first 

day of the preceding calendar year and ending on the disclosure 

date. 

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The first option allows persons making “electioneering communications” to establish a 

segregated bank account to receive funds given by individuals and to disclose the identity of all 

individuals who contributed $1,000 or more to that account. 2 U.S.C. § 434(f)(2)(E). The 

second option requires disclosure of all contributors of $1,000 or more to the person making the 

“electioneering communication.” 2 U.S.C. § 434(f)(2)(F).2

2. The FEC Promulgates Regulations To Implement BCRA 

Until the FEC in 2007 promulgated the regulation challenged here (11 C.F.R. 

§ 104.20(c)(9)), its regulations implementing BCRA tracked § 434(f) and required any person 

making disbursements for “electioneering communications” to make, among others, the 

following disclosures: 

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

account ... the name and address of each donor who donated an 

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

account, aggregating since the first day of the preceding calendar 

year; or 

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

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

name and address of each donor who donated an amount 

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

disbursement, aggregating since the first day of the preceding 

calendar year. 

 

2

 Senator Jeffords, who played a key role in drafting the legislation, said: “We deter the 

appearance of corruption by shining sunlight on the undisclosed expenditures for sham issue 

advertisements. Corruption will be deterred when the public and the media are able to see 

clearly who is trying to influence the election. In addition our provisions will inform the voting 

public of who is sponsoring and paying for an electioneering communication.” 147 Cong. Rec. 

S3034 (Mar. 28, 2001). Senator Snowe said, “What we are saying is disclose who you are. 

Let’s unveil this masquerade. Let’s unveil this cloak of anonymity. Tell us who you are. Tell us 

who is financing these ads to the tune of $500 million in this last election. The public has the 

right to know. We have the right to know.” 147 Cong. Rec. S3074 (Mar. 29, 2001). And 

Senator Feinstein commented, “The attacks come and no one knows who is actually paying for 

them. I believe this is unethical. I believe it is unjust. I believe it is unreasonable and it must 

end.” 147 Cong. Rec. S3238 (Apr. 2, 2001). 

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11 C.F.R. § 104.20(c) (effective Feb. 3, 2003, to Dec. 25, 2007). 

The FEC promulgated the “segregated bank account” disclosure provision at 

subparagraph (7) with corporations in mind. The FEC recognized that under MCFL a subset of 

section 501(c)(4) groups that had ideological, not business, purposes and that raised their funds 

only from individuals (“qualified non-profit corporations”) were exempt from the ban on 

corporate spending for “electioneering communications.” See 11 C.F.R. § 114.10 (defining 

qualified non-profit corporations). Accordingly, the Commission proposed a disclosure regime 

for “section 501(c)(4) corporations that meet the conditions for MCFL groups.” FEC, Notice of 

Proposed Rulemaking, 67 Fed. Reg. 51131-01, 51137-38 (Aug. 7, 2002); see also FEC, Notice 

of Final Rulemaking, 68 Fed. Reg. 404-01, 413 (Jan. 3, 2003). As initially proposed, the FEC 

regulations “would have permitted only [qualified non-profit corporations] to use segregated 

bank accounts.” 68 Fed. Reg. at 413. However, commenters “urged that this option be made 

available to all persons who make electioneering communications, and not just [qualified nonprofit corporations].” Id. 

In considering this disclosure regime for certain non-profit corporations, the Commission 

expressly rejected “administrative burden” objections, because “electioneering communications 

are not subject to disclosure until disbursements related to them exceed $10,000” and then, only 

the identities of persons contributing $1,000 or more need be disclosed. Id. The FEC found that 

these corporations could “reduce their reporting obligations by using separate bank accounts,” 

id., a reference to the (c)(7) option (which tracked § 434(f)). 

The FEC’s disclosure provision at subparagraph (8) was designed to eliminate any doubt 

that “all persons who make electioneering communications would be required to disclose their 

donors who donate $1,000 or more in the aggregate during the prescribed period, if they do not 

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use segregated bank accounts.” 68 Fed. Reg. at 414. As the FEC explained in its notice, “BCRA 

at 2 U.S.C. 434(f)(2)(F) specifically mandates disclosure of this information.” Id. 

The Commission also explained that its regulations used the term “donor” rather than the 

term “contributor,” which appears in 2 U.S.C. § 434(f), to make clear that funds given to 

persons, including corporations, who make “electioneering communications” are not 

“contributions” as that term is defined at 2 U.S.C. § 431(8).3

 The Notice of Final Rulemaking 

stated: 

The Commission sought comment on whether amounts given to 

persons who make disbursements for electioneering 

communications are contributions subject to the limitations, 

prohibitions, and reporting requirements of the Act. In the new 

reporting provisions for electioneering communications in BCRA, 

the statute uses the terms “contributor” and “contributed,” but it 

does not use the term “contribution.” 2 U.S.C. 434(f)(2)(E) and 

(F). BCRA uses the more general “disbursement” more 

frequently. 2 U.S.C. 434(f)(2)(A), (B), (C), (E), and (F). Nor does 

BCRA amend the definition of “contribution.” See 2 U.S.C. 

431(8).... Based on this analysis, the Commission proposed to 

treat funds given to persons who make electioneering 

communications as “donations.” 

68 Fed. Reg. at 413; see also 67 Fed. Reg. at 51139 (proposing that “funds provided to persons 

that are not political committees would not be ‘contributions’”). 

3. The Supreme Court Invalidates Much Of BCRA’s Ban On Corporate 

“Electioneering Communications” 

In 2007, the Supreme Court held in FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 

(2007) (“WRTL”), that BCRA’s prohibition against corporate spending on “electioneering 

 

3

 Defining “contribution” to include (i) any gift, subscription, loan, advance, or deposit of 

money or anything of value made by any person for the purpose of influencing any election for 

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

another person which are rendered to a political committee without charge for any purpose. 

2 U.S.C. § 431(8)(A). 

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communications” was unconstitutional as applied to corporate expenditures for advertisements 

that did not constitute “express advocacy” or the functional equivalent of express advocacy. Id. 

at 469-70.4

 After WRTL, federal law did not prohibit corporations and labor organizations from 

making disbursements for “electioneering communications” unless they constituted “express 

advocacy” or its “functional equivalent.” WRTL did not draw into doubt the constitutionality of 

the statutory disclosure requirements for “electioneering communications” that WRTL had made 

permissible. 

4. The FEC Proposes To Amend The Challenged Regulation 

On July 18, 2007, The James Madison Center for Free Speech filed a Petition for 

Rulemaking, asking the FEC to implement WRTL’s holding that the prohibition on corporation 

and labor organization “electioneering communications” cannot be constitutionally applied to socalled “genuine issue ads.”5

 The Petition requested no change to the FEC regulations that 

implemented the statutory disclosure requirements for “electioneering communications.” 

 

4

 As introduced, BCRA included an exception to the general ban on corporate “electioneering 

communications” for non-profit 501(c)(4) and 527(e)(1) organizations, subject to the disclosure 

regime of § 434(f)—the so-called “Snowe-Jeffords Amendment.” See 147 Cong. Rec. S2433 

(Mar. 19, 2001) (bill reported by title); id. at S2446 (Snowe-Jeffords provision discussed) (Mar. 

19, 2001), codified as 2 U.S.C. § 441b(c)(2). Senator Wellstone’s subsequent amendment added 

a clause to the statute, providing that the Snowe-Jeffords exception for 501(c)(4) corporations 

and Section 527 groups would not apply. See 147 Cong. Rec. S2845 (Mar. 26, 2001), codified 

as 2 U.S.C. § 441b(c)(6); accord FEC, Notice of Proposed Rulemaking, 67 Fed. Reg. 51131-01, 

51137 (Aug. 7, 2002). Thus, unless and until the “Wellstone Amendment” was deemed 

unconstitutional, only MCFL corporations could make “electioneering communications” under 

BCRA. However, the Court’s ruling in WRTL enabled all corporations to make “electioneering 

communications” that were not express advocacy or its functional equivalent. 

5

 Petition for Rulemaking Adding a “Genuine Issue Ad” Exemption to “Electioneering 

Communication” & Repealing 11 C.F.R. § 100.22(b) from James Bopp Jr., General Counsel, and 

Richard E. Coleson, Counsel, James Madison Center for Free Speech, dated July 18, 2007, Dkt. 

No. 17-2 [VH0095-VH0103]. 

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The following day the FEC announced a rulemaking to incorporate the WRTL decision 

into the Commission’s regulations. Press Release, FEC, Commission to Conduct Rulemaking 

Following Supreme Court Ruling (July 19, 2007).6

 Although the WRTL plaintiffs had not 

challenged the disclosure requirements and the James Madison Center had not raised the issue of 

disclosure in its petition, the FEC proposed to revisit “the rules governing reporting of 

electioneering communications” as part of its Notice of Proposed Rulemaking. 72 Fed. Reg. 

50261-01, 50262 (Aug. 31, 2007). The FEC acknowledged that BCRA required corporations 

and labor organizations to report “‘the name and address of each donor who donated an amount 

aggregating $1,000 or more’ to the corporation or labor organization during the relevant time 

period” (emphasis added). Id. at 50271. Despite this, the FEC solicited public comment on the 

following question: “Should the Commission limit the ‘donation’ reporting requirement to funds 

that are donated for the express purpose of making electioneering communications?” Id. 

The FEC received 25 responses. Senators McCain, Feingold, and Snowe, and 

Representative Shays, who had sponsored BCRA, submitted joint comments.7

 They noted that 

the disclosure requirements had not been challenged in WRTL and that because the Court in 

McConnell upheld those requirements against a facial challenge, McConnell “remains the 

governing law on the question of whether the requirements can constitutionally apply to 

electioneering communications, including the WRTL ads and any similar ads.”8

 BCRA’s 

sponsors stressed that one of the main purposes of the legislation was to ensure that the public 

was informed of the identity of persons financing “electioneering communications.” 

 

6

 Available at http://www.fec.gov/press/press2007/20070719rule.shtml. 

7

 Comment from Senator John McCain, Senator Russell Feingold, Senator Olympia Snowe, and 

Representative Christopher Shays, dated Oct. 1, 2007, Dkt. No. 17-2 [VH0368-VH0374]. 

8

 Id. at VH0371. 

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Citizens United submitted comments claiming that reporting the name and address of 

each $1,000 donor would “likely prove difficult, if not impossible.”9 Citizens United continued: 

“The difficulties of compliance would be most acute where revenues are generated through sales, 

investment capital or a combination thereof, which is generally the case with a commercial 

business. At the very least, this particular reporting requirement would probably impose such a 

high burden that it would in practical effect amount to a ban on the ads for some businesses” 

(emphasis added).10 Citizens United did not address the segregated account option, did not 

provide any facts to support its assertions about burdensomeness, and did not address whether 

non-profits that did not engage in a “commercial business” would encounter the predicted 

difficulties. Nor did Citizens United explain why the sources of sales revenue or other business 

income would be considered “contributors” within the meaning of BCRA or “donors” under the 

FEC’s existing regulation. 

 The FEC held hearings in October 2007.11 The Commissioners acknowledged that 

McConnell had upheld the disclosure provisions and that the WRTL plaintiffs had not challenged 

the disclosure requirements. Some witnesses argued that the requirements were burdensome 

because they could require that corporations and labor organizations disclose the names of 

individuals who provided funds at any time to those entities, including funds from dues-paying 

 

9

 Comment from Michael Boos, Vice President & General Counsel, Citizens United, dated Oct. 

1, 2007, Dkt. No. 17-2 [VH0297-VH0323], VH0312. 

10 Id. at VH0312-VH0313. 

11 FEC Hearing Transcripts, In the matter of Electioneering Communications, Notice 2007-16, 

dated Oct. 17, 2007, Dkt. No. 17-2 [VH0491-VH0791]; Hearing Transcripts, In the matter of 

Electioneering Communications, Notice 2007-16, dated Oct. 18, 2007, Dkt. No. 17-2 [VH0792-

VH0977].

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members of a union and unrestricted donations to an organization; other witnesses emphasized 

that BCRA’s segregated account option should alleviate any burden concerns.12

5. The FEC Promulgates The Challenged Regulation 

On December 26, 2007, the FEC promulgated revised regulations that significantly 

modified the “electioneering communications” reporting requirements for corporations and labor 

organizations. Specifically, the FEC added paragraph (c)(9) to 11 C.F.R. § 104.20, which 

provides that when corporations and labor organizations make expenditures above a certain 

threshold amount for “electioneering communications” that are not made out of a segregated 

account, they must disclose the following information: 

If the disbursements were made by a corporation or labor 

organization ... the name and address of each person who made a 

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

organization, aggregating since the first day of the preceding 

calendar year, which was made for the purpose of furthering 

electioneering communications. 

FEC, Final Rule and Explanation and Justification on Electioneering Communications (“E & J”), 

11 C.F.R. Part 104, 114, 72 Fed. Reg. 72899-01, 72913 (Dec. 26, 2007) (emphasis added). 

The FEC’s E & J stated that the Commission “has decided to depart from the rules 

proposed in the NPRM and instead to require corporations and labor organizations to disclose 

only the identities of those persons who made a donation aggregating $1,000 or more specifically 

for the purpose of furthering [electioneering communications] made by that corporation or labor 

organization pursuant to 11 CFR 114.15.” Id. at 72911. The FEC gave two reasons: (1) to limit 

identification of persons who gave money to “those persons who actually support the message 

conveyed by the [electioneering communications],” and (2) to avoid “imposing on corporations 

 

12 Id. at VH0658, VH0835-37, VH0895-96. 

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and labor organizations the significant burden of disclosing the identities of the vast numbers of 

customers, investors, or members.” Id.

With respect to its first rationale, the FEC explained that corporations and labor 

organizations may have sources of funds other than donations. Shareholders, customers, and 

union members, for example, may exchange money for shares, products, and membership. 

These persons, the FEC said, may not support the corporation’s or labor organization’s 

“electioneering communications”: 

A corporation’s general treasury funds are often largely comprised 

of funds received from investors such as shareholders who have 

acquired stock in the corporation and customers who have 

purchased the corporation’s products or services, or in the case of a 

non-profit corporation, donations from persons who support the 

corporation’s mission. These investors, customers, and donors do 

not necessarily support the corporation’s electioneering 

communications. Likewise, the general treasury funds of labor 

organizations and incorporated membership organizations are 

composed of member dues obtained from individuals and other 

members who may not necessarily support the organization’s 

electioneering communications. 

Id. 

With respect to its “burden” rationale, the FEC explained that witnesses had testified at 

the hearing that compliance with the proposed rules would be costly and require “inordinate” 

effort: 

Furthermore, witnesses at the Commission’s hearing testified that 

the effort necessary to identify those persons who provided funds 

totaling $1,000 or more to a corporation or labor organization 

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

Indeed, one witness noted that labor organizations would have to 

disclose more persons to the Commission under the [electioneering 

communication] rules than they would disclose to the Department 

of Labor under the Labor Management Report and Disclosure Act. 

Id. 

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Relying on these rationales, the FEC determined that “the policy underlying the 

disclosure provisions of BCRA is properly met by requiring corporations and labor organizations 

to disclose and report only those persons who made donations for the purpose of funding 

[electioneering communications].” The Commission did not articulate what “the policy 

underlying the disclosure provisions of BCRA” is; did not identify any statutory text that 

supported its conclusion; and did not otherwise explain its abrupt about-face from the rules it had 

issued in 2003. Nor did the Commission explain how funds received in the course of business 

from customers or shareholders in exchange for products or stock could possibly be considered 

donations within the meaning of the existing rules. 

The FEC stated in a footnote that the “for the purpose of furthering” standard set forth in 

11 C.F.R. § 104.20(c)(9) was not drawn from BCRA, but rather from the reporting requirements 

that apply to “independent expenditures” under FECA, i.e., 2 U.S.C. § 434(c)(2)(C) (providing 

that persons other than political committees must file statements disclosing “the identification of 

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

was made for the purpose of furthering an independent expenditure” (emphasis added)). The 

FEC did not explain why a standard enacted as part of FECA should be adopted to implement a 

provision of BCRA with different statutory language that made no reference to the contributor’s 

purpose and that applied to “electioneering communications.”13

 

13 On April 21, 2011, Plaintiff Van Hollen filed a petition for rulemaking requesting that the 

FEC revise its regulation implementing § 434(c)(2)(C), namely, 11 C.F.R. § 109.10(e)(1)(vi). 

FECA also requires the disclosure of “each ... person ... who makes a contribution” of more 

than $200 to the person making the independent expenditure. 2 U.S.C. § 434(b)(3)(A); see id. 

§ 434(c)(1). These two overlapping statutory disclosure requirements for independent 

expenditures require broader disclosure than the FEC’s existing regulation requires. The FEC 

has not yet acted on the Van Hollen petition. 

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6. The Supreme Court Affirms The Public Interest In BCRA’s Disclosure 

Provisions In Citizens United

In 2010, the Supreme Court held that 2 U.S.C. § 441b was facially unconstitutional, 

clearing the way for corporations and labor organizations to use their general treasury funds to 

make even “electioneering communications” that contain express advocacy or its functional 

equivalent. Citizens United v. FEC, 130 S. Ct. 876 (2010). By a vote of 8-1, however, the Court 

rejected petitioner’s as-applied challenge to BCRA § 201—the disclosure provision at issue 

here—reasoning that “the public has an interest in knowing who is speaking about a candidate 

shortly before an election.” Id. at 915. The Court reasoned that “disclosure permits citizens and 

shareholders to react to the speech of corporate entities in a proper way.... [T]ransparency 

enables the electorate to make informed decisions and give proper weight to different speakers 

and messages.” Id. at 916. 

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B. Statement Of Facts14

1. Disclosure Of Contributors Before And After The Challenged Regulation 

 In the 2004 and 2006 election cycles after BCRA’s enactment and prior to the Supreme 

Court’s decision in WRTL, the public received almost full disclosure of the donors to groups 

making “electioneering communications.”15 In the 2008 election cycle—after WRTL and the 

promulgation of the challenged regulation—disclosure fell considerably.16 In the 2010 cycle, it 

dropped even further. In 2010, persons making “electioneering communications” disclosed the 

sources of less than 10 percent of their $79.9 million in “electioneering communication” 

 

14 When reviewing an agency’s decision under the APA, a court may consider information 

outside the administrative record to determine “whether the agency considered all the relevant 

factors or fully explicated its course of conduct or grounds of decision.” National Treasury 

Emps. Union v. Hove, 840 F. Supp. 165, 168 (D.D.C. 1994) (quoting Asarco, Inc. v. EPA, 616 

F.2d 1153, 1160 (9th Cir. 1980)), aff’d, 53 F.3d 1289 (D.C. Cir. 1995). The D.C. Circuit has 

recognized that it is appropriate for courts to consider information not formally part of the 

administrative record in a number of circumstances, including in relevant part here: where 

evidence arising after the agency action shows whether the decision was correct or not. See Esch 

v. Yeutter, 876 F.2d 976, 991 (D.C. Cir. 1989). Here, the record of non-disclosure following the 

agency’s action demonstrates that its standard has led to widespread evasion of the statute, see 

infra 14-15, which is relevant for assessing whether the FEC’s construction of the statute is 

reasonable. Courts have clarified that Esch applies in four situations—if the plaintiff has shown 

that the agency (1) acted in bad faith in reaching its decision, (2) engaged in improper behavior 

in reaching its decision, (3) failed to examine all relevant factors, or (4) failed to adequately 

explain its grounds for decision. See, e.g., Oceana, Inc. v. Locke, 674 F. Supp. 2d 39, 45 (D.D.C. 

2009) (citing IMS, P.C. v. Alvarez, 129 F.3d 618, 624 (D.C. Cir. 1997)). Here, the Commission 

failed to consider the factor of whether or not the regulation would undermine BCRA. 

15 See Outside Spending, CENTER FOR RESPONSIVE POLITICS, “Outside Spending by Disclosure, 

Excluding Party Committees,” available at 

http://www.opensecrets.org/outsidespending/index.php (chart showing 94.4 percent “full 

disclosure” in 2004 and 86.4% in 2006); see also Taylor Lincoln, Disclosure Eclipse, PUBLIC 

CITIZEN, at 3 (Nov. 18, 2010) available at http://www.citizen.org/documents/EclipsedDisclosure11182010.pdf (reporting Center for Responsive Politics’ findings).

16 See Outside Spending, “Outside Spending by Disclosure, Excluding Party Committees,” (chart 

showing 68.4% percent “full disclosure” in 2008); see also Lincoln, Disclosure Eclipse at 3.

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spending. Answer ¶ 30.17 The ten “persons” that reported spending the most on “electioneering 

communications” (all of them claiming tax-exempt status under 501(c) or 527) disclosed the 

sources of a mere five percent of the money they spent. Id. ¶ 30. Of these ten “persons,” only 

three disclosed any information about their funders. Id. The public record reflects little or no 

disclosure of the numerous contributors to non-profit corporations that made substantial 

“electioneering communications” in the 2010 congressional races. Id. ¶ 31.18

2. Disclosure Of Contributors In The 2012 Election Cycle 

Looking ahead, the U.S. Chamber of Commerce, a section 501(c)(6) corporation, which 

expended over $30 million on “electioneering communications” in 2010 and disclosed none of 

its contributors, stated that it will continue to make “electioneering communications” and that it 

will continue not to disclose any of its contributors. See Answer ¶ 32.19 Crossroads GPS, a 

501(c)(4) corporation which expended $1.1 million on “electioneering communications” in 2010 

and disclosed none of its contributors, announced that it and its affiliated 527 political 

organization, American Crossroads, intend to raise a combined total of $120 million for the 2012 

 

17 In 2010, all of the top ten spenders on “electioneering communications” were either “501(c)” 

or “527” organizations. See Outside Spending, CENTER FOR RESPONSIVE POLITICS, “2010 

Outside Spending, by Groups,” available at 

http://www.opensecrets.org/outsidespending/summ.php?cycle=2010&disp=O&type=E&chrt=D 

(electioneering communications filter).

18 See Declaration of Fiona J. Kaye in Support of Plaintiff’s Motion for Summary Judgment 

(“Kaye Declaration”), Exhibit A (chart listing amounts spent on electioneering communications 

by outside groups in 2010 election cycle). See also id. Exhibits B-K (sample FEC Form 9 filings 

by top ten spenders). 

19 U.S. Chamber Plans to Continue Practice of Not Disclosing Contributors, BNA MONEY AND 

POLITICS REPORT, Jan. 13, 2011 (attached as Exhibit L to the Kaye Declaration).

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election, almost twice as much as the two organizations raised for the 2010 mid-term cycle.20 

Moreover, new high profile groups are forming to exploit the perceived advantage in raising 

funds for “electioneering communications” from hidden sources. The newly-formed Priorities 

USA has declared its intention to raise funds from hidden donors, citing a need to keep pace with 

organizations such as Crossroads GPS. As The New York Times reported, “the group’s entrée 

into the early 2012 contest all but ensures that the presidential race will be awash in cash from 

undisclosed corporate and labor sources with huge stakes in Washington policy making.”21

ARGUMENT 

I. JURISDICTION

This action arises under the Federal Election Campaign Act of 1971 (“FECA”), Pub. L. 

No. 92-225, 2 U.S.C. §§ 431 et seq., as amended by the Bipartisan Campaign Reform Act of 

2002 (“BCRA”), Pub. L. No. 107-155, 116 Stat. 81; the Administrative Procedure Act (“APA”), 

5 U.S.C. §§ 551-706; and the Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq. This Court 

has jurisdiction pursuant to 28 U.S.C. § 1331. 

Plaintiff has standing under FEC v. Akins, 524 U.S. 11 (1998), because he is not 

receiving disclosure of information mandated by BCRA. Id. at 21 (“A plaintiff suffers an ‘injury 

in fact’ when the plaintiff fails to obtain information which must be publicly disclosed pursuant 

to a statute.” (citing Public Citizen v. DOJ, 491 U.S. 440, 449 (1989)); see also Shays III, 528 

 

20 Brody Mullins, 2012 Election Spending Race Heats Up, WALL ST. J., Mar. 1, 2011, at A5 

(attached as Exhibit M to the Kaye Declaration). The Crossroads GPS website promotes its 

policy to shield its donors from public disclosure, stating on the contribution form page, 

“Crossroads GPS’s policy is to not provide the names of its donors to the general public.” 

Crossroads GPS, “Contribute,” https://www.icontribute.us/crossroadsgps (attached as Exhibit N 

to the Kaye Declaration). 

21 Jim Rutenberg, Now, Liberals Offer Donors A Cash Cloak, N.Y. TIMES, Apr. 30, 2011, at A1 

(attached as Exhibit O to the Kaye Declaration). 

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F.3d at 923. The reporting requirement under 11 C.F.R. § 104.20(c)(9) allows a corporation or 

labor organization to spend millions of dollars on “electioneering communications” without 

disclosing the identity of a single donor, because the corporation or labor organization need only 

claim that its donors did not announce the “purpose” of their contributions. As a result, Plaintiff 

is not receiving the full, accurate, and timely disclosures required under BCRA. See Declaration 

of Representative Chris Van Hollen in Support of Motion for Summary Judgment (“Van Hollen 

Decl.”) ¶ 5. This injury is traceable to the FEC because it is caused by the Commission’s 

regulation. See Shays III, 528 F.3d at 923. Plaintiff’s injury would be redressed were this Court 

to invalidate the rule and to require the FEC to promulgate a regulation in keeping with BCRA’s 

reporting requirements. 

Plaintiff also has “competitor standing” as an elected Member of Congress and as a 

candidate for re-election. See Shays I, 414 F.3d at 87. Plaintiff and his campaign opponents are 

and will be regulated by FECA and BCRA, including 2 U.S.C. § 434(f). Plaintiff suffers legal 

harm because the challenged regulation “illegally structures a competitive environment” in 

which he must defend a “concrete interest”—retention of elected office. Id. (brackets omitted). 

The challenged regulation infringes Plaintiff’s interest in participating in elections untainted by 

BCRA-banned practices because it allows corporations and labor organizations to hide the 

sources of funds they use to pay for “electioneering communications.” See Van Hollen Decl. 

¶ 4. The FEC caused the injury by promulgating the regulation, and Plaintiff’s injury would be 

redressed by a favorable ruling from this Court. 

II. STANDARD OF REVIEW

The Court should review this challenge to the FEC’s disclosure regulation under the twostep analysis set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 

U.S. 837 (1984), “asking first whether Congress has spoken directly ... to the precise question at 

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issue, and second, if it has not, whether the agency’s interpretation is ‘reasonable.’” Shays I, 

414 F.3d at 96 (internal quotation marks and citations omitted). In addition, because the 

challenged regulation constitutes “final agency action under the APA,” the Court should 

determine whether it is “‘arbitrary, capricious, an abuse of discretion, or otherwise not in 

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

At Chevron Step One, the Court employs “the traditional tools of statutory construction, 

including examination of the statute’s text, legislative history, and structure, as well as its 

purpose,” id. at 105 (citation omitted), to determine whether Congress has addressed the issue 

arising from the challenge to the agency’s regulation. At Chevron Step Two—reached only if 

the Court determines that the statute is ambiguous with respect to the issue presented—the Court 

determines whether the agency’s regulation is based on an impermissible or unreasonable 

construction of the statute. See id. at 96-97. Applying the analytically similar “arbitrary and 

capricious” standard under the APA, the Court determines whether the agency has “articulate[d] 

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

and the choice made.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 

29, 43 (1983) (internal quotation marks and citation omitted). If the agency has changed its 

position, it must satisfactorily explain why it has done so. See id. at 41-42; FCC v. Fox TV 

Stations, Inc., 129 S. Ct. 1800, 1811 (2009) (“An agency may not, for example, depart from a 

prior policy sub silentio or simply disregard rules that are still on the books.”). 

III. THE CHALLENGED REGULATION FAILS AT CHEVRON STEP ONE

A. BCRA Unambiguously Requires Disclosure Of “All Contributors” 

Under the statutory disclosure scheme, a person making an “electioneering 

communication” has the option to set up a separate account for funds donated by individuals, out 

of which it funds its “electioneering communications” and discloses the names of the donors of 

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$1,000 or more. If the person making “electioneering communications” eschews the separate 

account option, it must disclose the names of “all contributors” of $1,000 or more. But the 

challenged regulation permits a corporation to identify only some or even no contributors of the 

funds that it uses to make “electioneering communications.” As a practical matter, by requiring 

disclosure only of donors who give with a certain announced “purpose,” the regulation does not 

require disclosure of any contributors, let alone “all,” because a corporation or labor organization 

will rarely have, and can readily avoid having, evidence of the contributor’s intent to further 

“electioneering communications,” especially where both parties prefer not to disclose the names 

and addresses of “all contributors.” The record furthermore confirms that under this regulation 

almost no contributors are being disclosed. See supra 14-15. A regulation that requires less than 

the statute requires is contrary to law. See Shays I, 414 F.3d at 82 (citing 2 U.S.C. § 438(e)). 

1. The Challenged Regulation Is Contrary To The Plain Language Of The 

Statute 

Two terms in Section 434(f) of BCRA are at issue here: “all” and “contributors.” We 

address each in turn. 

The term “all” is hardly ambiguous. “All” means all. “All” means the whole number, or 

every member of a set or group. It does not mean “some” or “part.” Webster’s Third New Int’l 

Dict. 54 (2002) (defining “all” as “that is the whole amount or quantity of”); accord Concise 

Oxford English Dict. 34 (11th ed. 2004) (defining “all” as “the whole quantity or extent of”); 

see, e.g., Public Citizen v. FTC, 869 F.2d 1541, 1553 (D.C. Cir. 1989) (invalidating, at Chevron

Step One, an agency regulation that created an exception to a statute requiring a warning label on 

advertising for “any smokeless tobacco product” (quoting 15 U.S.C. § 4402(a)(2)). Because 

§ 434(f)(2)(F) requires disclosure of “all contributors” to a separate bank account or (at its 

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option) to the organization as a whole, every person who fits the definition of “contributor” (and 

donates $1,000 or more during the relevant period) must be identified. 

The term “contributors” likewise is not ambiguous. It means a person who gives money 

without expectation of service or property or legal right in return. See Webster’s Third New Int’l 

Dict. 496 (defining “contribute” as “to give or grant in common with others”); see also Concise 

Oxford English Dict. 310 (defining “contribute” as “to give in order to help achieve or provide 

something”).22 

The Commission reached precisely this conclusion in 2003, when it first promulgated 

regulations to implement BCRA. The FEC’s original interpretation of the term “contributor” as 

a person who makes a donation was correct. See FEC, Notice of Proposed Rulemaking, 68 Fed. 

Reg. 404-01, 413 (Jan. 3, 2003). The essential attribute of a donation is that it arrives with no 

strings attached; the donor’s purpose, motive, or reason for making the donation is not relevant 

for ascertaining whether the person has given more than she receives in return, if anything. A 

person who gives money to a non-profit corporation but has no opinion about how the non-profit 

uses the money is still a “contributor.” Likewise, a person who gives money to a non-profit but 

does not know whether the non-profit makes “electioneering communications” is still a 

“contributor.” 

The Commission in 2003 expressly addressed the question whether “contributors” were 

only persons who make “contributions” under FECA. See FEC, Notice of Proposed 

Rulemaking, 67 Fed. Reg. 51131-01, 51139 (Aug. 7, 2002). It concluded, correctly, that the 

 

22 Cf. Hernandez v. C.I.R., 490 U.S. 680, 690 (1989) (“‘gifts’” are payments “‘made with no 

expectation of a financial return commensurate with the amount of the gift’” (interpreting 

Internal Revenue Code § 170 regarding itemized deductions of charitable contributions)); United 

States v. American Bar Endowment, 477 U.S. 105, 118 (1986) (“The sine qua non of a charitable 

contribution is a transfer of money or property without adequate consideration.”). 

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term was not so limited—that “contributors” are all persons who make “donations,” 68 Fed. Reg. 

at 413, and phrased its regulations accordingly. As the FEC then recognized, applying FECA’s 

definition of “contribution” to BCRA’s disclosure provisions would not make sense. The 

definition of “electioneering communications” includes communications that are not made “for 

the purpose of influencing any election for Federal office,” 2 U.S.C. § 431(8)(A), especially as 

that term has been narrowed by judicial interpretation; see id. § 434(f)(3); WRTL, 551 U.S. at 

457 (drawing line between “issue advocacy” and “express advocacy” and noting that “BCRA’s 

definition of ‘electioneering communication’ is clear and expansive.”). Because FECA’s general 

definition of “contribution” conflicts with BCRA’s specific definition of “electioneering 

communication,” it cannot be made part of § 434(f)(2). 

In the case of a corporation or union which does not make “electioneering 

communication” disbursements out of a separate bank account, the challenged regulation, 11 

C.F.R. § 104.20(c)(9), does not require disclosure of “all contributors.” Instead, it engrafts an 

announcement-of-purpose requirement that is not found in the statute and that conflicts with 

BCRA’s plain-English requirement that a corporation or labor organization disclose “all 

contributors.” 2 U.S.C. § 434(f)(2)(F). Specifically, the regulation provides that a person 

making a “statement of electioneering communication,” 11 C.F.R. § 104.20(c), who opts not to 

establish a segregated account for funding “electioneering communications” need not disclose a 

contributor who otherwise meets the statutory requirements unless the contributor has somehow 

announced that it made the contribution “for the purpose of furthering electioneering 

communications.” 11 C.F.R. § 104.20(c)(9). 

2. The Challenged Regulation Is Contrary To The Context Of The Statute 

The plain meaning of the words that appear in § 434(f)(2)(F) is sufficient to answer the 

Chevron Step One inquiry by determining that the FEC has exceeded its authority and 

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promulgated a regulation that is contrary to law. The statutory context in which these words 

appear adds further support. 

Congress used the phrase “for the purpose of furthering” in the FECA provision requiring 

disclosure of contributors of $200 or more to persons making “independent expenditures,” 2 

U.S.C. § 434(c),23 but Congress did not include that or any comparable language in the BCRA 

provision applying to disclosure of contributors of $1,000 or more to persons making 

“electioneering communications,” 2 U.S.C. § 434(f). The absence of the phrase “for the purpose 

of furthering” in § 434(f)(2)(F) is significant because Congress could have adopted the language 

of § 434(c), but chose not to do so. Cf. FAIC Sec., Inc. v. United States, 768 F.2d 352, 363 (D.C. 

Cir. 1985) (noting, in context of canon of construction that provisions in pari materia must be 

construed together, “that whenever Congress passes a new statute, it acts aware of all previous 

statutes on the same subject”). To hold that § 434(c) and § 434(f) have the same meaning would 

run contrary to the presumption that the drafters of BCRA were aware of FECA, in addition to 

the language of each provision. Id.

3. The Challenged Regulation Is Contrary To The Purpose Of The Statute 

Because the challenged regulation foreseeably encourages and facilitates evasion of 

BCRA’s disclosure requirement, it is manifestly contrary to the intent of Congress in enacting 

BCRA. See Shays I, 414 F.3d at 106 (holding, at Chevron Step One, that FEC’s regulation was 

invalid because it facilitated circumvention of the statute). As in Shays I, a corporation can avoid 

complying with the challenged disclosure regulation with nothing more than a wink of an eye. 

 

23 Section 434(c) requires persons other than political committees who make independent 

expenditures in excess of $250 to file a statement identifying persons “who made a contribution 

in excess of $200 ... which was made for the purpose of furthering an independent expenditure.” 

2 U.S.C. § 434(c)(2)(C) (emphasis added). See also id. § 434(c)(1) (requiring disclosure of 

“each ... person ... who makes a contribution” of $200 or more to the person making the 

independent expenditure). 

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See id. at 103 (observing that under FEC’s definition of the word “solicit,” a candidate could 

state that “it’s important for our state party to receive at least $100,000 from each of you” 

without having “asked” for money (internal quotation marks omitted)); id. at 106 (“The FEC’s 

definitions fly in the face of [BCRA’s] purpose because they reopen the very loophole that terms 

were designed to close.”). 

Here, Congress sought to shine light on whose money was behind “electioneering 

communications.” See supra 3-4. It recognized that persons who finance “electioneering 

communications” often stand to benefit economically from the election or defeat of a candidate 

or acceptance or rejection of a bill, and that voters are in a better position to evaluate such 

communications when the identity of the financier has not been cloaked. See supra 4, n.2. So 

did the Supreme Court. See Citizens United, 130 S. Ct. at 915 (“[T]he public has an interest in 

knowing who is speaking about a candidate shortly before an election.”). The FEC’s regulation 

plunges the financing of “electioneering communications” back into darkness: after 

promulgation of 11 C.F.R. § 104.20(c)(9), virtually all disclosure ceased. See supra 14-15. To 

maintain that Congress delegated authority to the FEC to bring about this result would be absurd 

indeed. See Shays I, 414 F.3d at 106; Shays III, 528 F.3d at 925. 

B. BCRA’s Disclosure Provision Addresses The Question Whether A 

Corporation Or Labor Organization May Decline To Identify Contributors 

Who Do Not Manifest A “Purpose” To Further “Electioneering 

Communications” 

The FEC may argue that Congress did not address the precise question raised by this 

lawsuit because BCRA, as initially enacted, did not permit corporations and labor organizations 

to make “electioneering communications” out of general treasury funds. Any such argument is 

flawed. 

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Congress demonstrably did expect certain corporations to make “electioneering 

communications” and disclose contributors accordingly. The statutory disclosure provisions at 

issue here—2 U.S.C. § 434(f)(2)(E), (F)—were part of the “Snowe-Jeffords Amendment” to 

BCRA, which also included a provision that created an exception for section 501(c)(4) non-profit 

corporations from the general prohibition on electioneering expenditures by corporations. 2 

U.S.C. § 441(b)(c)(2). This exception would allow section 501(c)(4) non-profit corporations to 

make “electioneering communications.” Thus, at the time the disclosure provisions were added 

to the legislation, they were specifically designed to apply to non-profit corporations. 

Subsequently, another provision was added to the legislation—2 U.S.C. § 441(b)(c)(6) 

(the “Wellstone Amendment”)—that functionally struck the exception from the spending ban for 

section 501(c)(4) corporations, thus once again making those non-profit corporations subject to 

the ban. The disclosure provisions, however, were left in place. 

Congress constructed the legislation in this fashion in the event the Wellstone 

Amendment was declared unconstitutional under the Supreme Court’s decision in MCFL, which 

held that section 501(c)(4) corporations with certain characteristics could not constitutionally be 

subject to a prohibition on spending their corporate funds for campaign expenditures (and 

therefore, also, presumably for “electioneering communications”). Ultimately, the FEC took the 

position that such MCFL corporations were exempt from the corporate spending ban on 

“electioneering communications,” 11 C.F.R. §§ 114.2(b)(3), 114.10, a position which the 

Supreme Court agreed with in McConnell. 540 U.S. at 210-211. 

Nonetheless, both Congress and the FEC were well aware of the Supreme Court’s 

holding in MCFL that certain qualified non-profit corporations would be able to make 

“electioneering communications.” The FEC drafted regulations designed specifically for 

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qualified non-profit corporations; indeed, its Notice of Final Rulemaking explained that 11 

C.F.R. § 104.20(c)(7) was initially designed for qualified non-profit corporations only, showing 

that it anticipated at least some corporations would be subject to BCRA’s disclosure 

requirements. See 68 Fed. Reg. at 413. Moreover, when the disclosure provisions were first 

added to the legislation, they were intended to apply to all section 501(c)(4) corporations, not 

just MCFL corporations. The FEC acknowledged this possibility as well, and noted that “in the 

absence of the Wellstone amendment, the Snowe-Jeffords provision by itself would have 

allowed all incorporated tax-exempt organizations that are described in 26 U.S.C. 501(c)(4), and 

political organizations described in 26 U.S.C. 527, to make electioneering communications, 

provided their funds do not come from corporations or labor organizations.” 67 Fed. Reg. at 

51138. Thus, the disclosure provisions in the statute, which on their face apply to “every 

person” which makes an “electioneering communication,” were intended by Congress to apply to 

corporations as well. 

C. The FEC’s Statutory Interpretation Exceeds The Commission’s Authority 

The FEC has acted beyond the scope of its regulatory authority because § 434(f) does not 

expressly or impliedly authorize the Commission to create exceptions or to alleviate the 

administrative “burden” on the corporations and unions subject to BCRA’s contribution 

reporting requirements. Congress directed the FEC to “promulgate regulations to carry out this 

Act and the amendments made by this Act that are under the Commission’s jurisdiction,” BCRA 

§ 402(c)(1), 116 Stat. 81, 113 (emphasis added); see also 2 U.S.C. § 437d(a)(8) (providing that 

the FEC has power “to make, amend, and repeal such rules ... as are necessary to carry out the 

provisions of this Act” (emphasis added)). BCRA does not say that the FEC may permit persons 

who find compliance to be burdensome to not comply; it says that a person making 

“electioneering communications” must identify “all contributors” to a separate account from 

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which disbursements for “electioneering communications” are made, or “all contributors” to the 

spender. 2 U.S.C. § 434(f)(2)(E) & (F) (emphasis added). 

In promulgating the challenged regulation, the FEC did not identify any statutory text or 

legislative history that purportedly justified its conclusion that “all contributors” meant “some 

contributors,” who have made certain professions. The challenged regulation does not interpret 

the statutory terms “all” or “contributors”; nor has the FEC identified any perceived ambiguity 

that its regulation is designed to resolve. Instead, it engrafts an announcement-of-purpose 

requirement based on its own policy judgment. See FEC, Final Rule and Explanation and 

Justification on Electioneering Communications, 11 C.F.R. Part 104, 114, 72 Fed. Reg. 72899-

01, 72911 (Dec. 26, 2007). Because “burden” is not among the “factors deemed relevant by the 

Act,” Shays I, 414 F.3d at 97 (internal quotation marks and citation omitted), the FEC’s 

regulation based on those factors exceeds its statutory authority and constitutes an impermissible 

construction of the statute. 

In fact, Congress expressly and preemptively addressed the “burden” issue in two ways. 

First, it provided for the segregated account option. 2 U.S.C. § 434(f)(2)(E). Second, it 

exempted contributors who contributed an aggregate amount of less than $1,000 from the 

disclosure requirement. See id. § 434(f)(2)(E), (F). Thus, Congress addressed the “burden” 

issue in statutory language that is clear, and left the agency no implied authority to create 

additional exceptions. See Shays I, 414 F.3d at 114 (“By promulgating a rigid regime, Congress 

signals that the strict letter of its law applies in all circumstances ....”). 

Contrary to law, the FEC has engaged in “impermissible second-guessing of Congress’s 

calculations,” id., by making its own determinations about how to achieve the “policy” 

objectives “underlying the disclosure provisions of BCRA.” 72 Fed. Reg. at 72911. The FEC 

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did not have this authority. See Shays I, 414 F.3d at 114 (no authority to create exceptions based 

on agency’s conclusion “that the acknowledged benefits are exceeded by the costs” (quoting 

Public Citizen v. FTC, 869 F.2d 1541, 1557 (D.C. Cir. 1989))). 

The Court of Appeals’ decision in Public Citizen is instructive. In that case, the Court 

considered whether the FTC had exceeded its authority under the Comprehensive Smokeless 

Tobacco Health Education Act, which required producers and distributors of smokeless tobacco 

products “to include health warnings on all smokeless tobacco packages, as well as in 

advertisements for the product.” Public Citizen, 869 F.2d at 1542. The FTC promulgated a 

regulation exempting “utilitarian objects ... such as pens, pencils, clothing, or sporting goods” 

from the Act’s warning requirements. Id. The regulatory exemption was plainly contrary to the 

language of the statute and the regulation could only be upheld if the agency had implied 

authority to create exceptions. It did not, for “there exists no general administrative power to 

create exemptions to statutory requirements based upon the agency’s perceptions of costs and 

benefits,” and the agency had failed to show that the burden of requiring warning labels would 

“yield a gain of trivial or no value.” Id. at 1556 (internal quotation marks and citations omitted). 

As in Public Citizen, the statute at issue in this case forecloses the agency’s interpretation at 

Chevron Step One, and just as clearly, it does not grant the agency discretion, express or implied, 

to consider the burden on persons to whom the statute applies. 

IV. THE CHALLENGED REGULATION ALSO FAILS AT CHEVRON STEP TWO AND IS 

ARBITRARY AND CAPRICIOUS

If the Court were to conclude that BCRA’s disclosure requirements are “ambiguous” with 

respect to the question here at issue, the Court would reach Chevron Step Two and would inquire 

whether the challenged regulation is based on a “permissible construction” of the statute. See, 

e.g., American Bar Assoc. v. FTC, 430 F.3d 457, 468 (D.C. Cir. 2005) (“[W]e will then uphold 

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the agency’s interpretation of the ambiguous statute if that interpretation is ‘permissible,’ that is, 

if it is ‘reasonable.’”). At Chevron Step Two, an agency’s construction of a statute that it is 

entrusted to administer is entitled to deference. See Chevron, 467 U.S. at 844; Shays I, 414 F.3d 

at 97 (“[A]t Chevron Step Two [the Court] defer[s] to the agency’s interpretation as long as it is 

based on a permissible construction of the statute.” (quoting Bluewater Network v. EPA, 372 

F.3d 404, 410 (D.C. Cir. 2004) (internal quotation marks omitted))). Thus, if the Court 

determines that Congress did not “actually have an intent” with respect to the challenged 

regulation, the question is not whether the FEC’s regulation represents the best possible means of 

“reconciling conflicting policies,” but whether the FEC has made a “reasonable policy choice.” 

Chevron, 467 U.S. at 844, 845. 

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

for whether a statute is unreasonably interpreted is close analytically to the issue whether an 

agency’s actions under a statute are unreasonable,” Shays I, 414 F.3d 96 (internal quotation 

marks, citation, and brackets omitted), and courts frequently consider the Chevron Step Two and 

APA inquiries together. We address both standards in this Part, and show that the FEC’s 

interpretation of the statute and the regulation that it promulgated based on such interpretation 

are impermissible and unreasonable under Chevron and the APA. 

A. The FEC’s Statutory Interpretation Is Impermissible And Unreasonable 

Because It Is Based On Arbitrary And Irrational Assumptions 

Even if BCRA granted the FEC authority to circumscribe the scope of the statute’s reach, 

common sense and all available evidence contradict the agency’s assumed (but not found) fact 

that complying with BCRA would be unduly burdensome for corporations and labor 

organizations. The FEC’s burden rationale is so implausible that it cannot be the product of 

agency expertise, see State Farm, 463 U.S. at 43. 

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The FEC failed to make any fact-based findings or articulate any persuasive reasons why 

it believed that complying with BCRA would impose an unacceptable burden on corporations 

and labor organizations that outweighed the benefits of promoting disclosure—Congress’s plain 

objective. The FEC did not articulate which factors affect the cost of compliance, the magnitude 

of the impact that each such factor would have, or whether factors relating to cost would affect 

few or many—or any—organizations that make “electioneering communications.” Instead, it 

relied on the testimony of a few self-interested “witnesses” who testified at the rulemaking 

hearing that compliance would be “very costly” and “require an inordinate amount of effort.” 72 

Fed. Reg. at 72911.

24 The FEC did not present any data or facts in its E & J to support this 

assertion or to quantify the cost and effort involved. See Missouri Pub. Serv. Comm’n v. FERC, 

337 F.3d 1066, 1070 (D.C. Cir. 2003) (when making predictions or extrapolations from the 

record, an agency “must fully explain the assumptions it relied on to resolve unknowns and the 

public policies behind those assumptions” (citation omitted)); National Gypsum Co. v. EPA, 968 

F.2d 40, 43 (D.C. Cir. 1992) (holding that agency action was arbitrary and capricious where its 

“inferences [were] nothing more than unsupported assumptions”). 

The self-serving, factually unsupported, and conclusory testimony of witnesses who do 

not wish to disclose who is funding an organization’s “electioneering communications” is a 

manifestly insufficient basis for the FEC’s sweeping conclusion that BCRA would otherwise 

impose a “significant burden of disclosing the identities of ... vast numbers of customers, 

 

24 The Commission apparently accepted at face value and attached significance to one witness’s 

testimony that “labor organizations would have to disclose more persons to the Commission 

under the [electioneering communications] rules than they would disclose to the Department of 

Labor under the Labor Management Report and Disclosure Act.” Id. FECA and the LMRDA 

are different statutes, serving different purposes and addressing disclosure in different contexts. 

Moreover, the FEC vastly exaggerates the scope of disclosure required here; most union dues are 

under $1,000 and thus do not need to be disclosed. 

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investors, or members.” 72 Fed. Reg. at 72911. See, e.g., Shays III, 528 F.3d at 928-29 

(affirming ruling that FEC’s revised regulation was arbitrary and capricious where the 

Commission implemented changes based on complaints that “the regulation was unnecessarily 

cumbersome” without supporting “its decision with reasoning and evidence”). 

 Nor does any rational basis exist to infer that carrying out BCRA as enacted by Congress 

and interpreted by the Supreme Court would necessarily create intolerable burdens for 

corporations or labor organizations. 

First, corporations and labor organizations that make “electioneering communications” 

could avoid the entire burden the FEC cited by taking the simple step of establishing a 

segregated account pursuant to § 434(f)(2)(E), and using that account to pay for “electioneering 

communications.” Persons who give money to such an account would be self-defining, so there 

would be no potential burden on shareholders, customers, and the like. Moreover, a corporation 

that spends $10,000 or more on “electioneering communications”—the minimum threshold for 

triggering the disclosure requirements—is in a poor position to complain that the negligible 

overhead and accounting costs of maintaining a separate bank account are too burdensome. The 

FEC’s failure to consider the segregated account option was arbitrary and capricious. 

Second, the sources of investment and sales revenue are plainly not “contributors” within 

the meaning of the Act (or “donors” under the FEC’s prior rule). The FEC irrationally assumed 

that corporations and unions could not readily distinguish persons making “donations” from 

customers or shareholders purchasing products or stock. See 72 Fed. Reg. at 72911 (stating that 

without the “purpose” requirement, corporations and labor organizations would have to disclose 

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“vast numbers of customers, investors, or members”).25 That reasoning is insupportable: 

businesses, non-profit groups, labor organizations, and individuals routinely differentiate among 

sources of funds, including donations, as a matter of both internal accounting and reporting to 

government authorities such as the Internal Revenue Service (“IRS”).26 

The FEC’s assumption that disclosing the names and addresses of “all contributors who 

contributed an aggregate amount of $1,000” or more to a non-profit corporation or labor 

organization during the relevant period would be unduly burdensome is also irrational. As 

anyone who has contributed money to a non-profit group knows, the recipient organization 

records names and addresses so that it can solicit additional donations. The idea that a non-profit 

corporation does not have a readily accessible record of the names and addresses of its largest 

donors—those who give $1,000 or more—is absurd. Providing these names and addresses as 

required by § 434(f)(2)(F) would impose no more than a modest burden, let alone the 

“significant burden” that the FEC identifies as a justification for its regulation. 

Rather than adopt an “announcement-of-purpose” test that invites and has demonstrably 

fostered circumvention of BCRA’s disclosure requirement, the FEC could have addressed this 

supposed burden problem in one of two ways (or a combination of both). First, it could have 

defined what is excluded from the disclosure requirement by promulgating a regulation providing 

that investment revenue, sales revenue, loan proceeds, and the like are not “donations.” 

 

25 The FEC explained, incorrectly, that BCRA should not be construed to include donations to a 

non-profit corporation in the form of “membership dues” unless the donor made some additional 

showing of support, apart from the donation, for the corporation’s “electioneering 

communications.” See 72 Fed. Reg. at 72911; see also infra 32. 

26 In fact, the E & J recounts a proposal by one commenter to align disclosure requirements with 

IRS criteria. 72 Fed. Reg. at 72911 (“[O]ne commenter argued that disclosure by nonprofit 

corporations should be limited to those amounts listed on line 1 of the corporation’s IRS Form 

990, which includes ‘[c]ontributions, gifts, grants, and similar amounts received’ by an 

organization exempt from income tax[.]” (first brackets in original)). 

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Alternatively, the FEC could have defined which sources of funds were included, i.e., qualify as 

donations. For example, the FEC could have borrowed from the IRS’s definition of “voluntary 

contributions” as “payments, or the part of any payment, for which the payer (donor) does not 

receive full retail value (fair market value) from the recipient (donee) organization.”27 The FEC 

did not say why it did not even consider these commonsense alternatives or comparable objective 

tests in favor of a demonstratively unworkable subjective-intent test.28 This was arbitrary and 

capricious. 

Third, the FEC assumed that dues-paying members of non-profit groups and labor 

organizations “may not necessarily support the organization’s electioneering communications.” 

72 Fed. Reg. at 72911. But § 434(f)(2)(F) requires disclosure of “all contributors,” not only 

those contributors who manifest particularized support for line-items on a corporation’s list of 

disbursements. The FEC’s assumption is also irrational, inasmuch as people do not pay dues to 

organizations whose mission or purpose they do not endorse, and organizations are not likely to 

make “electioneering communications” that undermine their mission or purpose. The more 

reasonable assumption is that persons who give money to a non-profit corporation do so because 

they support the corporation’s activities, including its “electioneering communications.” 

Fourth, full disclosure had been required without a “purpose” exception for four years 

under the FEC’s original rule. The Commission then pulled an abrupt about-face in 2007 and 

failed to offer the required justification for why the change was necessary. The Commission’s 

 

27 2010 Instructions for Form 990 Return of Organization Exempt From Income Tax 34, 

available at http://www.irs.gov/pub/irs-pdf/i990.pdf. 

28 In WRTL, for example—the decision that the FEC sought to implement in promulgating the 

challenged regulation—the Court observed that a First Amendment test that depends on the 

speaker’s intent “‘would invite costly, fact-dependent litigation.’” 551 U.S. at 468 (quoting 

FEC’s brief).

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hypothesized burdens and ambiguities are especially unconvincing given that the rule had been 

in effect for some time and the FEC was unable to point to any actual burdens or actual realworld problems under the original rule. See State Farm, 463 U.S. at 41-42; Fox TV Stations, 129 

S. Ct. at 1811. 

B. The FEC’s Statutory Interpretation Is Impermissible And Unreasonable 

Because It Frustrates The Policy of BCRA To Promote Disclosure 

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

of a statute that frustrate the policy that Congress sought to implement.” Shays III, 528 F.3d at 

925 (citation omitted). The challenged regulation frustrates the intent of Congress by inviting 

corporations and labor organizations to evade—almost completely—BCRA’s reporting 

requirements for “electioneering communications.” The Court’s reasoning in Shays III is 

analogous and controlling here. In Shays III, the FEC’s regulation would have permitted 

coordinated communications outside of the “90/120-day window” because it relied on a 

“functionally meaningless” express advocacy standard that turned on whether an ad used “magic 

words.” See id. (“more than 90/120 days before an election, candidates may ask wealthy 

supporters to fund ads on their behalf, so long as those ads contain no magic words”). The 

regulation permitted donors to circumvent the statute with nothing more than a “wink or nod.” 

Id. (internal quotation marks omitted). The challenged regulation has the same unlawful effect: 

so long as the donor stops short of explicitly communicating a purpose to fund “electioneering 

communications” to the person making such communications, the donation need not be 

disclosed. Under these circumstances, “the hard lesson of circumvention” teaches that 

widespread evasion of the statute is all but guaranteed. Id. at 927 (internal quotation marks and 

citation omitted). 

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V. THE COURT SHOULD DECLARE THAT THE CHALLENGED REGULATION IS UNLAWFUL,

VACATE IT, AND DIRECT THE FEC TO PROMULGATE A REVISED REGULATION WITH 

REASONABLE EXPEDIENCY

The Court has authority to enter a declaratory judgment, vacate the challenged regulation, 

and remand to the FEC for further proceedings consistent with the Court’s judgment. See 28 

U.S.C. § 2201 (declaratory judgment); 5 U.S.C. § 706(2)(A) (authorizing reviewing court to 

“hold unlawful and set aside agency action, findings, and conclusions ...”); National Mining 

Ass’n v. U.S. Army Corps of Eng’rs, 145 F.3d 1399, 1409 (D.C. Cir. 1998) (“[W]hen a reviewing 

court determines that agency regulations are unlawful, the ordinary result is that the rules are 

vacated ....” (internal quotation marks and citation omitted)); Sierra Club v. Van Antwerp, 719 F. 

Supp. 2d 77, 78 (D.D.C. 2010) (“set aside means ‘to annul or vacate’” (quoting Black’s Law 

Dictionary (8th ed. 2004))). 

Vacatur is warranted here to ensure timely compliance with this Court’s order. See In re 

Core Commc’ns, Inc., 531 F.3d 849, 862 (D.C. Cir. 2008) (Griffith, J., concurring) (questioning 

“the wisdom of the open-ended remand without vacatur”); Natural Res. Def. Council v. EPA, 

489 F.3d 1250, 1264 (D.C. Cir. 2007) (Randolph, J., concurring) (“A remand-only disposition is, 

in effect, an indefinite stay of the effectiveness of the court’s decision and agencies naturally 

treat it as such.”). 

Furthermore, experience teaches that the Court should retain jurisdiction until the Court’s 

judgment is satisfied. The Shays litigation is illustrative. In 2004, this Court invalidated “some 

fifteen rules” promulgated by the FEC, a ruling that was—to the extent appealed by the FEC—

affirmed “in all respects.” Shays I, 414 F.3d at 79 (describing district court proceedings). 

Following the decision and affirmance in Shays I, the FEC initiated rulemaking proceedings and 

either promulgated a revised regulation or revised its explanation for the prior regulation. Many 

of the revised regulations did not comply with BCRA or the APA either. See Shays III, 508 F. 

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Supp. 2d 10, 71 (D.D.C. 2007), aff’d in part, rev’d in part, 528 F.3d 914 (D.C. Cir. 2008). The 

Court of Appeals upheld one of the revised rules, but rejected “the balance of the regulations as 

either contrary to the Act or arbitrary and capricious.” Shays III, 528 F.3d at 917. It remanded 

those regulations “in the hope that, as the nation enters the thick of the fourth election cycle since 

BCRA’s passage, the Commission will issue regulations consistent with the Act’s text and 

purpose.” Id. This history supports the conclusion that the public interest would be served if the 

Court upon remand were to exercise its unquestioned power to retain jurisdiction. 

That was in 2008. The Nation is about to enter its sixth election cycle—and its third

presidential election—since BCRA was enacted, and the need for regulations that carry out 

BCRA’s disclosure provisions is more acute than ever. See supra 14-16. The absence of proper 

disclosure harms both Plaintiff and the public. See Shays I, 340 F. Supp. 2d 39, 52 (D.D.C. 

2004) (“The existence of loopholes and unfaithful regulations constitutes a daily injury to both 

[plaintiffs’] interests and the clearly articulated intent of Congress.”), aff’d 414 F.3d 76 (D.C. 

Cir. 2005); id. at 54 (“The public interest is best served by enforcing Congress’s intended 

campaign finance system expeditiously in order to assuage the harms produced by the 

Commission.”). 

Accordingly, we urge this Court to vacate the challenged regulation; direct the FEC to 

“instigate proceedings” and promulgate revised regulations in accordance with this Court’s order 

with “reasonable expediency,” id. at 52; and retain jurisdiction to ensure that the FEC timely 

implements the Court’s order. 

CONCLUSION 

For the reasons stated, we respectfully urge the Court to grant Plaintiff’s motion for 

summary judgment; declare that the challenged regulation, 11 C.F.R. § 104.20(c)(9), is contrary 

to law and arbitrary and capricious; vacate the challenged regulation; and direct the FEC to 

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promulgate a revised regulation consistent with this Court’s ruling and declaratory judgment 

with reasonable expediency. We also respectfully urge the Court to retain jurisdiction until the 

Court’s judgment is satisfied. 

Dated this 1st day of July, 2011. 

Respectfully submitted, 

Fred Wertheimer (Bar No. 154211) 

DEMOCRACY 21 

2000 Massachusetts Ave, N.W. 

Washington, D.C. 20036 

(202) 355-9610 

/s/ Roger M. Witten

Roger M. Witten (Bar No. 163261) 

Brian A. Sutherland 

Fiona J. Kaye 

WILMER CUTLER PICKERING

 HALE AND DORR LLP

399 Park Avenue 

New York, NY 10022 

(212) 230-8800 

Donald J. Simon (Bar No. 256388) 

SONOSKY CHAMBERS SACHSE

 ENDRESON & PERRY, LLP

1425 K Street, N.W. 

Suite 600 

Washington, D.C. 20005 

(202) 682-0240 

Trevor Potter (Bar No. 413778) 

J. Gerald Hebert (Bar No. 447676) 

Paul S. Ryan (Bar No. 502514) 

Tara Malloy (Bar No. 988280) 

CAMPAIGN LEGAL CENTER

215 E Street N.E. 

Washington, D.C. 20002 

(202) 736-2200 

Attorneys for Plaintiff Chris Van Hollen 

Case 1:11-cv-00766-ABJ Document 20 Filed 07/01/11 Page 45 of 45