UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

____________________________________ 

 ) 

SPEECHNOW.ORG, ) 

DAVID KEATING, )

FRED M. YOUNG, JR., ) 

EDWARD H. CRANE, III, ) 

BRAD RUSSO, and ) 

SCOTT BURKHARDT ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civil Case No. 1:08-cv-00248 (JR)

 ) 

FEDERAL ELECTION COMMISSION ) 

 ) 

 Defendant. ) 

____________________________________) 

_______________________________________________________

PLAINTIFFS’ REPLY MEMORANDUM IN SUPPORT OF THEIR 

PROPOSED FINDINGS OF FACT FOR CERTIFICATION 

_______________________________________________________

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 1 of 69
ii

TABLE OF CONTENTS

INTRODUCTION ...........................................................................................................................1 

ARGUMENT...................................................................................................................................5 

I. The Court Should Decline the FEC’s Invitation to Treat This Case As a Facial 

Challenge .................................................................................................................5 

A. This As-Applied Challenge Should Be Limited Primarily to the Facts 

 and Circumstances of the Plaintiffs’ Case ...................................................6 

B. Most of the FEC’s Points in Its Response and Memorandum Are Legal 

Arguments That Ignore the Proper Standards in As-Applied 

 Constitutional Cases...................................................................................11 

C. The FEC Does Not Substantially Dispute the Facts Relevant to This 

 As-Applied Challenge................................................................................18 

1. Facts Concerning SpeechNow.org and the Plaintiffs ....................19 

2. Facts Concerning the Effect of Contribution Limits on 

 Plaintiffs.........................................................................................23 

a. The declarations of Plaintiffs’ experts are not new 

 reports; they are the proper vehicle for expert 

 testimony............................................................................29 

b. Plaintiffs made all appropriate disclosures in connection 

with their expert reports.....................................................31 

c. The testimony of Plaintiffs’ experts is grounded in 

 data, experience, logic, and simple principles of 

 economics ..........................................................................36 

3. Facts Showing That SpeechNow.org Creates No Concerns 

 About Corruption...........................................................................41 

4. Facts Demonstrating the Burden of the PAC Requirements .........44 

II. Plaintiffs’ Responses to the FEC’s Arguments in Its Memorandum in Support 

 of Its Response to the Plaintiffs Proposed Findings of Fact ..................................44 

A. The FEC’s Proposed Findings of Fact on Whether This Is a 

 “Test Case” Are Irrelevant.........................................................................44 

B. Whether Plaintiffs Can Speak Individually or By Using Means Other 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 2 of 69
iii

 Than Television Advertisements Is Irrelevant...........................................47 

C. The FEC’s Arguments About the Impact of Contribution Limits on 

 the Plaintiffs Are Either Arguments About the Merits, Nitpicking 

 Around the Margins of Obvious Points, Or Are Just Wrong.....................50 

1. The History of Political Party and Presidential Fundraising Is 

Irrelevant to the Burden That Contribution Limits Would 

 Impose on SpeechNow.org ............................................................52 

2. The FEC’s Claim That Fundraising Costs Have Decreased 

 Over Time Is Unsupported and Irrelevant .....................................53 

3. Facts Concerning the Manner in Which the Contribution 

 Limits Affect Plaintiffs Are Clearly Relevant ...............................55 

4. The FEC Admits Plaintiffs’ Basic Facts Concerning the 

Importance of Large Contributions for Start-up Groups ...............57 

5. The FEC’s Argument About Specialization of Labor Is 

 Specious .........................................................................................59 

6. The FEC’s Criticisms Do Not Undermine the Basic Fact That 

 a Restriction on Contributions Leaves Less Money to Devote 

 to Expenditures .............................................................................60 

D. Plaintiffs Agree with the FEC That the Motives of Speakers and 

 Donors Are Irrelevant to This Case ...........................................................61 

E. The FEC’s Arguments About the Burdens of the PAC Requirements 

 Are All Arguments About the Merits, Not Disputes About Facts.............62 

CONCLUSION..............................................................................................................................64 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 3 of 69
Plaintiffs by and through their attorneys hereby reply in support of their proposed 

findings of fact for certification. Included with this memorandum are the following documents: 

the Declaration of Rodney Smith, the Declaration of Paul M. Sherman, and the Declaration of 

Robert Gall. This memorandum replies to both the FEC’s Response to Plaintiffs’ Proposed 

Findings of Fact (FEC’s Response) and its memorandum in support (FEC’s Memorandum). 

INTRODUCTION 

If there is a theme running through the FEC’s filings in connection with the proposed 

findings of fact it is cloud, confuse, and clutter. Divert attention from the issues. Focus on 

anything and everything as long as it has nothing to do with the Plaintiffs or the laws and 

precedents on which they rely in this as-applied constitutional challenge. Thus, where the 

Plaintiffs say they want to join together as a group, the FEC responds that they can speak 

individually. Where they say they want to run television advertisements, the FEC says they can 

speak in other ways. When the Plaintiffs say SpeechNow.org will follow the laws and rules 

governing independent expenditures, the FEC asks the Court to ignore those laws and rules 

because they do not work, and then purports to demonstrate the motives and actions of everyone 

but the Plaintiffs. If the Plaintiffs point out that raising money under contribution limits is more 

difficult than raising it outside of those limits, the FEC responds that national political parties 

have raised money under those limits. When Plaintiffs claim that the limits inhibit the ability of 

individuals to associate and speak effectively, the FEC says that Plaintiffs’ lawyers have done a 

good job publicizing this case and that some of the individual Plaintiffs are either wealthy or are 

friends with journalists. If Plaintiffs argue that the reporting requirements for PACs are 

burdensome, the FEC argues that its own employees do not agree and that it tries to help people 

comply with those requirements. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 4 of 69
2

In short, the vast majority of what the FEC has said, both in its proposed findings of fact 

and in its response to Plaintiffs’ proposed findings, is irrelevant either to the case in general or at 

this stage of the proceedings. Most of the FEC’s proposed findings go well beyond the 

application of the challenged laws to the Plaintiffs and thus are irrelevant to the issues in this asapplied constitutional challenge. Most of the FEC’s points in response to Plaintiffs’ proposed 

findings of fact are simply legal arguments about the merits, and are thus irrelevant at this stage 

of the case. 

Indeed, the FEC goes beyond relying on irrelevant facts and argument and actively 

criticizes the Plaintiffs and their attorneys for bringing what the FEC terms is a “test case.” But 

the FEC has it exactly backwards. Plaintiffs have done precisely what individuals who believe 

their rights are being violated are supposed to do in this country. Indeed, in Buckley, the 

Supreme Court made clear that one of the reasons it upheld limits on contributions to candidates 

was because the effect of such limits would be “to compel people who would otherwise 

contribute amounts greater than the statutory limits to expend such funds on direct political 

expression.” Buckley v. Valeo, 424 U.S. 1, 22 (1976) (emphasis added). Direct political 

expression is precisely the sort of speech in which the Plaintiffs wish to engage. As a result, in 

reliance on existing statutes, rules, and precedents, Mr. Keating created an association that 

Plaintiffs believe eliminates concerns about corruption while still allowing individuals to band 

together and engage in the direct political expression to which the Court in Buckley alluded. To 

clarify the application of the laws, SpeechNow.org sought an advisory opinion from the FEC. 

After that process was completed, Plaintiffs brought a narrow as-applied constitutional challenge 

to those laws. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 5 of 69
3

The FEC’s response is to try to change not only the subject but the very rules of the 

game. The Supreme Court has made clear that “as-applied challenges are the basic building 

blocks of constitutional adjudication.” Gonzales v. Carhart, 127 S. Ct. 1610, 1639 (2007) 

(citation omitted). Yet the FEC, by relying on hundreds of proposed “findings of fact” that 

involve practically every group and individual except the Plaintiffs, is asking this Court to ignore 

the very distinction between as-applied and facial constitutional challenges. The FEC goes even 

farther, arguing repeatedly that the Plaintiffs’ proposed findings of fact are irrelevant because 

they can speak individually or in other ways, or do other things, or that other groups have been 

able to raise funds under contribution limits or comply with the requirements for PACs. Yet 

these are simply versions of the FEC’s implicit position that as-applied challenges do not exist; 

indeed, the FEC seems to believe that if it can imagine ways in which Plaintiffs can speak under 

the laws they challenge, those laws are necessarily constitutional. But this is not the law. 

Plaintiffs address these points in detail below, and they reply to the FEC’s arguments in 

its memorandum and in its responses to Plaintiffs’ proposed findings of fact. However, wherever 

possible, the Plaintiffs have replied to categories of claims the FEC made in response to the 

Plaintiffs’ proposed findings of fact, rather than replying to each of the FEC’s responses on a 

point-by-point basis. Plaintiffs do this both in the interest of efficiency, and because they view 

the fact finding process fundamentally differently than the FEC does. In Plaintiffs’ view, it is 

pointless for the parties to argue about proposed findings except to point out (1) that the evidence 

offered does not support the proposed finding, or (2) that the evidence is inadmissible or 

irrelevant, as the Plaintiffs often did in their response to the FEC’s proposed findings of fact and 

in their motions in limine.1

 The FEC devotes much space in its responses arguing that the Court 

 

1 The Court ruled on December 9, 2008 that it does not understand Plaintiffs’ motions in limine to be motions in 

limine at all, and it has allowed the FEC to reply to those motions in its reply brief. It is not clear whether the 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 6 of 69
4

should not enter Plaintiffs’ proposed findings of fact because the FEC disagrees with the 

Plaintiffs’ legal theories or because the FEC knows of other facts that prove things other than 

what the Plaintiffs’ sought to prove in their proposed findings. This goes well beyond arguments 

about relevance. The FEC is, in essence, attempting to litigate the entire case now, during the 

fact-finding stage. 

Accordingly, in Part I, below, Plaintiffs demonstrate that the FEC’s reliance on hundreds 

of proposed findings of fact that have nothing to do with the Plaintiffs is improper in an asapplied challenge. Plaintiffs then address the FEC’s responses to the Plaintiffs’ proposed 

findings of fact in order both to summarize the relevant facts on which the parties agree and to 

demonstrate that the FEC’s arguments are entirely irrelevant or baseless. Despite the FEC’s 

 Court’s conclusion was based on the styling of the motions as “motions in limine” or on the fact that Plaintiffs made 

separate motions rather than including their arguments in their response to the FEC’s proposed findings of fact. 

Plaintiffs note that the parties in other campaign finance cases, notably WRTL II and McConnell, have filed motions 

to exclude both evidence and witnesses. See, e.g., WRTL II, No. 04-01260, Motion to Strike Plaintiff's Evidence 

Concerning Its 2006 Advertisement by Federal Election Commission (D.D.C. Sept. 13, 2006) (Docket #112; 

McConnell, No. 02-00874, Motion Filed by Plaintiff in 1:02-cv-00874 to Strike Certain Witnesses or for 

Certification of Counsel (D.D.C. Sept. 24, 2002) (Docket #170). Plaintiffs styled their motions as motions in limine 

given the nature of the relief they sought—i.e., excluding, from consideration by the fact-finder, specific documents 

and the testimony of certain witnesses because of their inadmissibility. This Court’s consideration of the proposed 

findings after the parties complete their submissions in this certification procedure is analogous either to summary 

judgment or trial because it will result in ultimate findings of fact. The parties are now at the threshold of that factfinding. And motions in limine have been considered by judges of this Court within the context of both summary 

judgment and trial. See, e.g., Lewis v. Booz-Allen & Hamilton, Inc., 150 F.Supp.2d 81, 84 (D.D.C. 2001) (“Since a 

motion for summary judgment requires an examination of the entire record, including all pleadings and all 

admissible evidence, the court will first address the evidentiary motions.”); Morphosys AG v. Cambridge Antibody 

Technology Limited, No. 99-1012, 2001 WL 36165572 (D.D.C. 2001) (granting and denying various motions in 

limine, before trial, on subjects such as the possible exclusion of expert testimony and reports). Although Plaintiffs 

could have labeled their motions as motions to strike or just called them objections, motions to exclude expert 

testimony (which is the largest category of testimony Plaintiffs seek to exclude) are “[t]ypically . . . presented as in 

limine motions.” 32-23 MOORE’S FEDERAL PRACTICE § 23.353 n.1073. Further, a party may seek to invoke the 

exclusion sanction of Rule 37(c) of the Federal Rules of Civil Procedure in a variety of ways, including “a motion in 

limine prior to the beginning of the trial.” 6-26 MOORE’S FEDERAL PRACTICE § 26.27[2][a]. Moreover, under Fed. 

R. Civ. P. 12(f), motions to strike are typically directed at “pleadings,” which under Rule 7(a) include the complaint, 

answer, and related documents. Finally, Plaintiffs’ understanding is that the rules of civil procedure are construed 

liberally, and that a motion’s substance determines how it is treated, not the form of its title. See, e.g., Sacks v. 

Reynolds Sec., Inc., 593 F.2d 1234, 1239 (D.C. Cir. 1978) (“The liberality of the . . . Federal Rules is such that 

erroneous nomenclature does not prevent the court from recognizing the true nature of a motion.”) (citation 

omitted); see also Perez-Perez v. Popular Leasing, Inc., 993 F.2d 281, 283 (1st Cir. 1993) (“Our inquiry into the 

character of the motion is a functional one: nomenclature should not be exalted over substance.”) (Internal quotation 

marks and citation omitted); Snyder v. Smith, 736 F.2d 409, 419 (7th Cir. 1984) (“The Federal Rules are to be 

construed liberally so that erroneous nomenclature in a motion does not bind a party at his peril.”), overruled on 

other grounds, Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998).

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 7 of 69
5

many arguments to the contrary, it actually does not dispute most of the essential facts on which 

Plaintiffs relied in their proposed findings of fact. In Part II, Plaintiffs address the FEC’s 

arguments in its memorandum in support of its responses to Plaintiffs’ proposed findings of fact 

to the extent those arguments are not already covered in the first part. 

ARGUMENT 

I. The Court Should Decline the FEC’s Invitation to Treat This Case As a Facial 

Challenge. 

This is a narrow, as-applied constitutional challenge. Plaintiffs challenge the contribution 

limits and certain regulations of PACs only as they apply to the Plaintiffs in this case. Plaintiffs 

have done everything they can both to seek clarification from the FEC about the laws as they 

apply to them and to narrow the focus of their constitutional challenge. Mr. Keating relied on 

existing rules, statutes, and precedents in creating SpeechNow.org, and the association sought an 

advisory opinion—a process the FEC itself has invoked in responding to constitutional 

challenges2

— to determine how those laws would apply to it. Although the laws Plaintiffs 

challenge have been on the books for years, the constitutionality of their application to an 

association that makes only independent expenditures is an open question, as both courts and 

commentators have recognized. See Plaintiffs’ Response to FEC’s Proposed Findings of Fact at 

17-18. 

In response to the Plaintiffs narrow and focused challenge, the FEC’s strategy is to be 

broad and unfocused. Thus, the FEC ignores the application of the challenged laws to the 

Plaintiffs and focuses, instead, on their application to virtually every other group and individual 

conceivable. Where the FEC cannot ignore the Plaintiffs, it seeks to ignore the laws on which 

they rely, either by arguing, in the case of the laws and rules governing independence and 

 

2 See Christian Civic League of Me., Inc. v. FEC, 433 F. Supp. 2d 81, 87 n.3 (D.D.C. 2006) 

(“The Commission argues that, in order to establish its standing, the League must seek an advisory opinion. . . .”). 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 8 of 69
6

coordination, that they are irrelevant or ineffective; or by attempting to convince the Court to 

enter legal conclusions as factual findings, and thereby to avoid the necessity of arguing the 

merits entirely. In short, the FEC is trying mightily to transform this case into a facial challenge, 

sometimes even to laws and legal principles—for example, a version of coordination that relies 

on “access and gratitude” or the notion that speakers have no right to speak in the manner they 

choose—that do not exist. See Plaintiffs’ Response to FEC’s Proposed Findings of Fact at 31. 

As a result, most of what the FEC has said in its briefs in support of its proposed findings 

of fact is either irrelevant to the case in general or irrelevant to this phase of the proceedings. As 

demonstrated below, the touchstone of an as-applied challenge is the court’s focus on the 

application of laws in a particular circumstance, not the application of the laws to every 

conceivable situation. Accordingly, the FEC’s effort to demonstrate the actions of every 

individual and group other than the Plaintiffs is a waste of time, as is the FEC’s effort to “prove” 

that the Plaintiffs do not need to associate with one another, can be heard in ways other than 

television advertisements, or that the contribution limits and PAC requirements are not 

burdensome. These are all legal questions to be addressed on the merits; arguing them now is 

simply a waste of time. In any event, as Plaintiffs further demonstrate below, the FEC does not 

really dispute the basic facts on which Plaintiffs relied. 

A. This As-Applied Challenge Should Be Limited Primarily to the Facts and 

Circumstances of the Plaintiffs’ Case. 

The Supreme Court has long indicated a preference for narrow as-applied constitutional 

challenges that focus on the facts of a particular case. See, e.g., Wash. State Grange v. Wash. 

State Republican Party, 128 S. Ct. 1184, 1190-91 (2008) (stating preference for as-applied 

challenges and citing cases that establish that preference). According to the Court, as-applied 

challenges avoid the need for speculation because they are based on specific facts concerning the 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 9 of 69
7

application of laws to particular plaintiffs, and, as a result, they are less likely than facial 

challenges to result in rulings that are broader than necessary or “premature interpretations of 

statutes in areas where their constitutional application might be cloudy.” See id. Thus, the focus 

of an as-applied challenge is necessarily much narrower than a facial challenge. In a facial First 

Amendment challenge, the plaintiff must demonstrate that “a ‘substantial number’ of [a laws’] 

applications are unconstitutional, ‘judged in relation to the statute’s plainly legitimate sweep.’” 

Id. at 1190 n.6. In an as-applied challenge, by contrast, the focus is on the facts of the plaintiffs’ 

particular case. See, e.g., Field Day LLC v. County of Suffolk, 463 F.3d 167, 174 (2d Cir. 2006) 

(contrasting facial with as-applied challenges and stating that an as-applied challenge “requires 

an analysis of the facts of a particular case to determine whether the application of a statute, 

even one constitutional on its face, deprived the individual to whom it was applied of a protected 

right”) (emphasis added); Zelotes v. Martini, 352 B.R. 17, 21 n.3 (D. Conn. 2006) (stating that 

as-applied challenges require “a case-by-case analysis of whether the application of a statute, 

even if facially constitutional, deprived the individual to whom it was applied of a protected 

right”). 

The Supreme Court recently made clear the narrow focus of as-applied challenges in the 

campaign finance context in FEC v. Wisconsin Right to Life, Inc., 127 S. Ct. 2652 (2007) 

(hereinafter WRTL II). WRTL II involved a challenge to the very same electioneering 

communications provisions of BCRA that the Court had upheld on their face a mere three years 

before in McConnell v. FEC. Id. at 2658-59. Even so, in WRTL II the Court held that the burden 

was still on the government to demonstrate that the electioneering communications ban could 

constitutionally be applied to the ads that WRTL wanted to broadcast. Id. at 2663-64. As the 

Court made clear, while McConnell involved a facial challenge to the electioneering 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 10 of 69
8

communications ban, WRTL II “present[ed] the separate question whether [the ban] may 

constitutionally be applied to these specific ads.” Id. (emphasis added). Thus, according to the 

Court, to prevail the government must show that “applying BCRA to WRTL’s ads” satisfies 

strict scrutiny. Id. at 2664. Although the Court looked to McConnell for the general question 

that needed to be answered—whether WRTL’s ads were the functional equivalent of express 

advocacy—its inquiry focused entirely on WRTL’s ads, not the actions and speech of other 

groups not before the Court. Id. at 2664. Indeed, in WRTL II, the Court declined even to 

conduct a broader inquiry into the intentions of WRTL or the effect of its ads on the election. 

That was not only beyond the proper scope of the case, but, according to the Court, such an 

inquiry would itself constitute an undue burden on and thus an additional threat to free speech 

because it would lead to lengthy litigation and expert-driven inquiries into the intentions and 

effects of WRTL’s ads. See id. at 2665-66 (stating that to safeguard speech, “the proper standard 

for an as-applied challenge to BCRA § 203 must be objective” and “must entail minimal if any 

discovery, to allow the parties to resolves disputes quickly without chilling speech through the 

threat of burdensome litigation”). 

Thus, in this case it is appropriate for the Court and the FEC to look to other decisions to 

determine the proper question to be answered—here, for instance, whether the Plaintiffs’ 

activities fall within what the Supreme Court has already defined as corruption or its 

appearance—but it is wholly beyond the scope of this as-applied challenge to examine the 

actions of hundreds of other groups and individuals to determine whether they have engaged in 

activities or financed speech that can be said to create concerns about corruption. Under the 

Court’s ruling in WRTL II, it is clear that even where the Court concludes—as it did in 

McConnell—that some groups and individuals have engaged in activities that raise concerns 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 11 of 69
9

about corruption, other groups and individuals may nonetheless be entitled to speak free of 

restrictions previously upheld if their speech and activities fall within the protections of the First 

Amendment. To demonstrate that they do, such individuals may bring as-applied challenges 

even to laws that have been upheld on their face, as WRTL did and as Plaintiffs do here. If the 

FEC’s approach to this case were correct—if it were appropriate to rely on evidence about the 

actions and motives of hundreds of groups and individuals other than the Plaintiffs—then the 

Supreme Court’s decision in WRTL II could not have turned out the way it did. The government 

would only have had to refer to the evidence that the Court had already examined in McConnell

to foreclose the challenge that WRTL subsequently brought. Indeed, the government did just 

that in WRTL I but the Supreme Court rejected its argument, holding that McConnell had not 

foreclosed future as-applied challenges. Wisc. Right to Life, Inc. v. FEC, 546 U.S. 410, 412 

(2006) (hereinafter WRTL I). As a result, the subsequent challenge to the same provision in 

WRTL II did not simply rehash the evidence already reviewed in McConnell; it focused on 

WRTL’s ads and only WRTL’s ads. 

In essence, the FEC wants to defend this case by attempting to show that the contribution 

limits and PAC reporting requirements are not overbroad on their face—that is, that a 

“substantial number” of the applications of those laws are not unconstitutional because many 

other groups and individuals allegedly use independent spending to gain access to and gratitude 

from candidates. But the Plaintiffs are not challenging these laws on their face, so the FEC’s 

defense of their facial validity is beside the point. Cf. WRTL II, 127 S. Ct. at 2670 n.8 (stating 

that “Courts do not resolve unspecified as-applied challenges in the course of resolving a facial 

attack. . . . By the same token, in deciding this as-applied challenge, we have no occasion to 

revisit McConnell’s conclusion that the statute is not facially overbroad”). The Plaintiffs would 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 12 of 69
10

not be permitted to rely on evidence demonstrating that contribution limits and PAC 

requirements have violated the rights of other groups and individuals in asserting their as-applied 

challenge. See, e.g., Legal Aid Servs. of Or. v. Legal Servs. Corp., 561 F. Supp. 2d 1187, 1207 

(D. Or. 2008) (holding evidence of constitutional injury to other parties irrelevant in as-applied 

challenge). The FEC should likewise not be permitted to rely on evidence allegedly showing 

that others’ rights are not being violated in defending this case. Cf. WRTL II, 127 S. Ct. at 2673 

n.10 (declining to reach argument made by amici because case was as-applied challenge and 

facts pertaining to WRTL were different than those raised by amici). 

In WRTL II, the FEC ignored the distinction between facial and as-applied challenges and 

attempted in large part to re-litigate McConnell. The Supreme Court rebuffed its efforts despite 

the identity of issues in the two cases. The FEC is attempting to do the same thing here, going as 

far as to try to introduce much of the actual evidence on which it relied in McConnell, despite the 

fact that the issues here are entirely different than the issues in McConnell. Its effort should fail 

here as well. 

In sum, the FEC should not be permitted to rely on evidence concerning the actions and 

financing of political party committees and the soft money donations they received prior to the 

passage of BCRA, the motives of those who operated or funded 527s during the 2004 election 

cycle or issue advocacy groups over the past decade, 3 the actions of individuals or groups that 

have made direct contributions to candidates or coordinated expenditures with them, or the 

actions of those who have violated the law or committed crimes.4 All of this evidence is beyond 

 

3

 As explained in further detail below, the Supreme Court has held that “‘[u]nder well-accepted First Amendment 

doctrine, a speaker’s motivation is entirely irrelevant to the question of constitutional protection.’” WRTL II, 127 S. 

Ct. at 2666 (citation omitted). As a result, the motives of other speakers are irrelevant as well. 4

 As the Court stated in WRTL II, “‘[t]he Government may not suppress lawful speech as the means to suppress 

unlawful speech. Protected speech does not become unprotected merely because it resembles the latter. The 

Constitution requires the reverse.’” 127 S. Ct. at 2670 (quoting Ashcroft v. Free Speech Coalition, 535 U.S. 234, 

255 (2002)). 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 13 of 69
11

the scope of this as-applied challenge and not properly admissible to demonstrate that the 

Plaintiffs, here, pose a threat of corruption. In short, to demonstrate that the Plaintiffs pose a 

threat of corruption, the FEC must focus on the Plaintiffs’ actions, not those of everyone else. 

B. Most of the FEC’s Points in Its Response and Memorandum Are Legal 

Arguments That Ignore the Proper Standards in As-Applied Constitutional 

Cases. 

The FEC’s response to the Plaintiffs’ proposed findings of fact can be summed up as 

follows: This is a test case; the Plaintiffs can speak in other ways besides television 

advertisements or they can speak as individuals, rather than as a group; many PACs and the 

major political parties have raised significant sums of money under contribution limits; unlimited 

contributions to independent groups pose a danger of corruption; the FEC does not think its PAC 

regulations are burdensome; and David Keating once said that he has a general understanding of 

those regulations and can “handle” them. See FEC’s Memorandum at 1, 4, 6, 23, 26, and 27. 

Even if one assumed that all of these points, and the facts offered in support of them, were true, 

they still would not have any bearing on the truth of the Plaintiffs’ proposed findings of fact. 

They are essentially legal arguments that may or may not be relevant at the merits stage, but they 

have nothing to do with whether the Court should enter Plaintiffs’ proposed findings of fact. 

For example, the fact that the Plaintiffs would like to see the law changed and would like 

others to follow in their footsteps if SpeechNow.org is permitted to function free of contribution 

limits and other regulations does not in any way change the fact that the Plaintiffs want to form 

the group in order to speak. Indeed, given SpeechNow.org’s purpose—convincing Americans to 

vote against those who support unconstitutional campaign finance laws—it would be quite 

strange if Mr. Keating did not want others to follow in his footsteps. Similarly, while it is 

obviously true that the Plaintiffs—like anyone who has ever complained about a restriction on 

speech—are able to speak in other ways, that does not alter the fact that the contribution limits 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 14 of 69
12

and PAC regulations do what they do—that is, they prevent the Plaintiffs from pooling the funds 

they now have available and speaking in the manner they wish to speak. See WRTL II, 127 S.Ct. 

at 2671 n.9 (rejecting the argument that because WRTL was free to form a PAC or to publish 

newspaper ads instead of television ads or to say something other than what it wanted to say that 

limits on its speech was acceptable). Likewise, the fact that other groups have raised money 

under contribution limits and that the FEC does not believe its own PAC regulations are 

burdensome does not alter the burden that the laws in fact impose. 

Here, again, the FEC is simply trying to change the subject from the Plaintiffs’ 

constitutional challenge to the fact that the FEC can imagine many ways in which the Plaintiffs 

could operate under the laws. In essence, the FEC’s defense to the Plaintiffs’ case is that the 

Plaintiffs should not have brought it. But this Court has already held that the Plaintiffs’ claims 

are substantial and not frivolous and has identified the issues to be certified. No purpose is 

served by the FEC attempting to convince the Court to enter as “factual findings” arguments 

such as that the Plaintiffs do not need to speak through SpeechNow.org or can do something 

other than pay for television ads, or contribution limits do not inhibit the ability of individuals to 

associate, or are not burdensome, or prevent corruption. These are all legal conclusions. 

Indeed, as with the FEC’s effort to introduce facts concerning everyone but the Plaintiffs, 

its endless legal arguments in response to the Plaintiffs proposed findings of fact amount to 

another effort to ignore the fact that as-applied First Amendment challenges exist. To present 

their prima facie case, Plaintiffs need only show that they are exercising First Amendment rights 

and that the laws they challenge burden those rights. See, e.g., WRTL II, 127 S. Ct. 2652, 2660-

61 (2007); Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290, 292-93 (1981); N.C. 

Right to Life, Inc. v. Leake, 525 F.3d 274, 277-78 (4th Cir. 2008). See also, e.g., Rhodes v. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 15 of 69
13

Robinson, 408 F.3d 559, 569 (9th Cir. 2005) (“[Plaintiff’s] allegations that his First Amendment 

rights were chilled, though not necessarily silenced, is enough to perfect his claim.”); Laird v. 

Tatum, 408 U.S. 1, 11 (1972) (“[C]onstitutional violations may arise from the deterrent, or 

‘chilling,’ effect of governmental regulations that fall short of a direct prohibition against the 

exercise of First Amendment rights.”); Initiative & Referendum Inst. v. Walker, 450 F.3d 1082, 

1103 (10th Cir. 2006) (“The chilling effect from a total ban [on referenda concerning a specific 

issue] may be greater than the chilling effect from a supermajority requirement, but they raise the 

same First Amendment issue.”). 

Plaintiffs have easily met this burden by demonstrating how SpeechNow.org will 

function and the fact that it will make only independent expenditures and by showing that the 

contribution limits and PAC requirements impose a burden on their ability to function and to 

speak. The Supreme Court has made clear that the express advocacy in which Plaintiffs wish to 

engage and the independent expenditures that fund that speech are core political speech, see, e.g., 

Buckley, 424 U.S. at 39; FEC v. Nat'l Conservative Political Action Comm., 470 U.S. 480, 493 

(1985) (hereinafter NCPAC); that it upheld limits on direct contributions to candidates in large 

part because their effect would be to divert funding to the sort of “direct political expression” in 

which Plaintiffs wish to engage, see Buckley, 424 U.S. at 22-23; that contribution limits imposed 

on such direct political expression severely burden rights to both speech and association and can 

amount to limits on expenditures as well, see Citizens Against Rent Control, 454 U.S. at 299-

300; and that the requirements for PACs impose significant burdens on the speech of small, 

voluntary associations like SpeechNow.org, see FEC v. Mass. Citizens for Life, Inc., 479 U.S. 

238, 254-55 (1986) (hereinafter MCFL). Moreover, as stated above, the Supreme Court has 

repeatedly held that the government bears the burden of demonstrating that campaign finance 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 16 of 69
14

laws do not infringe rights to speech and association even where those laws have been upheld on 

their face. See, e.g., WRTL II, 127 S. Ct. at 2663-64 (2007); MCFL, 479 U.S. at 251-52. In 

short, it is crystal clear that Plaintiffs’ proposed findings of fact are relevant and material to the 

issues in this case. 

In arguing to the contrary, the FEC implicitly takes the position that it is Plaintiffs’ 

burden to prove beyond a shadow of a doubt that they are unable to raise any money at all; that 

they could not speak individually or in other ways or say other things or use new technology or 

pamphlets, yard signs, or soap boxes to spread their message; that no one, including the largest 

organizations in the country, can raise money under contribution limits; that independent 

expenditures cannot possibly raise the specter of corruption; and that regulations for PACs are 

impossible to comply with. See FEC’s Memorandum at 3-4, 4-5, 6-10, 23, and 27-28. In short, 

according to the FEC, if Plaintiffs cannot disprove everything the FEC can imagine in response 

to their claims, the Court should not even enter Plaintiffs’ proposed findings of fact. The case 

should simply end here, because Plaintiffs have not demonstrated that the FEC’s defenses are 

impossible. 

But this is not the law. As demonstrated above, the Supreme Court made clear in WRTL 

II that the government bore the burden of showing that WRTL’s ads in that case were the 

functional equivalent of express advocacy and thus could be banned under the ruling of 

McConnell. The Court stated that if the ads were the same as those already addressed in 

McConnell, the government’s burden would not be heavy; it would need only demonstrate the 

similarity and point to McConnell. See 127 S. Ct. at 2664. If, however, they were not obviously 

the same, the government’s burden would be no different than in any other First Amendment 

case. Id. That is true for any as-applied challenge. If the plaintiffs situation is no different from 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 17 of 69
15

others on which the Court has already ruled, then the governments’ case is a matter of simply 

pointing to that other ruling. If, however, the plaintiffs’ circumstances are materially different, 

the government’s burden is as it was in WRTL II. See id; see also MCFL, 479 U.S. at 256-59. 

Here, the FEC cannot seriously dispute that the Plaintiffs are operating under 

fundamentally different circumstances than those in which contribution limits have been upheld. 

They are making independent expenditures on precisely the sort of “direct political expression” 

that the Supreme Court made clear must remain free notwithstanding limits on direct 

contributions to candidates. See Buckley, 424 U.S. at 21-22. SpeechNow.org bears striking 

similarity to the groups at issue in both Citizens Against Rent Control and MCFL. See 454 U.S. 

at 292-93; 479 U.S. at 241-42. Indeed, Plaintiffs raise precisely the same claims in this case that 

recently prevailed in the Fourth Circuit in a very similar case. See Leake, 525 F.3d at 291. As a 

result, Plaintiffs are fundamentally different as a matter of law from the national party 

committees and other large PACs on whose fundraising and circumstances the FEC relies. And 

contrary to the FEC’s claims, there is simply no constitutional principle that holds a particular 

speaker has no right to engage in the speech he prefers because the government can devise other 

ways for him to speak. See, e.g., WRTL II, 127 S. Ct. at 2671 n.9 (calling the claim that a party 

can take out newspaper ads instead of television ads “too glib” because it assumes that the 

availability of different media is even relevant to the constitutionality of a limitation on speech 

and because it assumes that the two media are equivalent); Meyer v. Grant, 486 U.S. 414, 424 

(1988) (stating that the “First Amendment protects appellees’ right not only to advocate their 

cause but also to select what they believe to be the most effective means for so doing”). 

Accordingly, not only is the FEC wrong that its alleged facts and arguments preclude Plaintiffs’ 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 18 of 69
16

proposed findings of fact, but the FEC’s proposed facts in response are simply irrelevant to this 

case. 

The FEC even goes so far as to claim that the Plaintiffs are seeking special rights to a 

particular level of contribution limits, see FEC’s Response at 39-41, and to equal resources, 

influence and publicity, see FEC’s Memorandum at 14-15. This argument is nonsensical on its 

face. Plaintiffs are not arguing that the speech of others should be limited in order that they may 

speak, as was argued in Buckley, 424 U.S. at 39, nor are they claiming a right to use the 

publications or resources of others, which was the issue in Miami Herald Publishing Co. v. 

Tornillo, 418 U.S. 241, 243-44 (1974), and Pacific Gas and Electric Co. v. Public Utilities 

Commission of California, 475 U.S. 1, 9-12 (1986). Indeed, the Plaintiffs are arguing here that 

they should be left alone to try to compete in the marketplace of ideas, which is the animating 

principle of the First Amendment, as the Court affirmed in Buckley. See 424 U.S. at 14-15. The 

FEC turns these cases on their head, effectively arguing that any time a speaker attempts to 

overturn a law as it applies to them, he is seeking a special “privilege” that is unavailable to 

others. But, again, this is simply an attack on the very idea of as-applied challenges. If the FEC 

were correct, the Court in WRTL II could not have held that WRTL was free to broadcast its ads 

free of the electioneering communications ban that applied to other ads, nor could the Court in 

MCFL have held that certain non-profit corporations could not be subject to the regulations that 

applied to PACs. Indeed, if the FEC were correct, all individuals and groups who make 

independent expenditures would have to be treated the same, lest some speakers be granted 

“special rights” that others did not enjoy. 

As for the FEC’s reliance on Davis v. FEC, that case did not create a general “fairness 

doctrine” for all speakers, as the FEC seems to believe. In Davis, the Supreme Court struck 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 19 of 69
17

down two provisions that effectively punished self-financed candidates for spending their own 

money to fund their campaigns. See 128 S. Ct. 2759 (2008). The Court held that the provisions 

at issue—a law that raised contribution limits on the opponents of self-financed candidates and 

that increased the self-financed candidate’s disclosure obligations—unconstitutionally burdened 

the speech of the self-financed candidate because they created a disincentive for him to finance 

his own campaign. Id. at 2771-72. The case stands for the proposition that attempting to 

equalize speech by limiting the freedom of some people to spend their own money violates the 

First Amendment. Davis supports Plaintiffs’ position in this case because it makes clear that 

absent a compelling justification, the government cannot limit the right of individuals to spend 

their own money on their own speech. See id. at 2772. Indeed, Davis makes clear that the 

standard for demonstrating that speech is burdened is not terribly high. In Davis, the Court 

concluded that merely lowering contribution limits for opponents of self-financed candidates and 

increasing the disclosure obligations for the self-financed candidate unconstitutionally burdened 

his speech. Id. at 2770-72. 

The FEC makes this “special privilege” argument to oppose proposed facts that 

demonstrate the burden of contribution limits on the Plaintiffs. See FEC’s Memorandum at 14-

15; FEC’s Response at 39-41. But in proposing such facts, Plaintiffs are not claiming either that 

the contribution limits that apply to them should be raised slightly or that they are entitled to a 

particular level of publicity or influence. They are simply offering facts that show that the 

contribution limits are burdensome. Plaintiffs have illustrated this basic point in a number of 

different ways in their proposed findings of fact, many of which are points the Supreme Court 

has explicitly recognized. See, e.g., WRTL II, 127 S. Ct. at 2671 n.9 (stating that “PACs impose 

well-documented and onerous burdens, particularly on small nonprofits”); Citizens Against Rent 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 20 of 69
18

Control, 454 U.S. at 295-300 (contribution limits burden rights to both speech and association); 

NAACP v. Alabama, 357 U.S. 449, 460 (1958) (stating that the “[e]ffective advocacy of both 

public and private points of view, particularly controversial ones, is undeniably enhanced by 

group association”). These points are neither complicated nor controversial, and the Court 

should therefore enter Plaintiffs’ proposed findings. 

C. The FEC Does Not Substantially Dispute the Facts Relevant to This AsApplied Challenge.

Despite the FEC’s effort to cloud the issues, it does not substantially dispute most of the 

Plaintiffs’ proposed findings of fact, or at least the basic points that Plaintiffs seek to have 

entered as findings of fact, even if the FEC at times argues about particular facts that support 

those points. Indeed, the FEC’s specific objections to actual proposed findings of fact—as 

opposed to arguments that the Court should not enter particular findings because the FEC thinks 

other facts are more pertinent—are primarily directed to the Plaintiffs’ facts concerning the 

effects of contribution limits on the Plaintiffs and Plaintiffs’ claim that SpeechNow.org poses no 

threat of corruption. See FEC’s Response to Plaintiffs’ Proposed Findings of Fact at 21-60. 

Thus, as demonstrated in more detail below, the FEC does not substantially dispute the truth of 

the basic facts about SpeechNow.org and the individual Plaintiffs, SpeechNow.org’s proposed 

advertisements, the advisory opinion request, see id. at 1-21; and the FEC does not substantially 

dispute the truth of the basic facts concerning the organizational and reporting requirements for 

political committees. See id. at 60-70. Even as to the Plaintiffs’ proposed findings of fact 

concerning the burden of contribution limits and concerns about corruption related to 

SpeechNow.org, the FEC does not dispute the basic points that Plaintiffs made in their proposed 

findings. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 21 of 69
19

1. Facts Concerning SpeechNow.org and the Plaintiffs. 

In the first 21 pages of its response to Plaintiffs’ proposed findings of fact, the FEC takes 

issue with very few of the facts in Parts I through III of Plaintiffs’ proposed findings. The 

exceptions are as follows. 

First, the FEC claims that David Keating’s motives about creating SpeechNow.org are 

irrelevant to the issues in this case. See FEC’s Response to Plaintiffs’ Proposed Findings of Fact 

at 2, 15-16. Plaintiffs will address this point in more detail in Part II, below, but they generally 

agree that a speaker’s motives are irrelevant to whether his speech is protected under the First 

Amendment. See infra at 61. Indeed, the FEC’s argument here makes clear that its claims that 

this is a “test case” and that donors seek access to and gratitude from candidates are irrelevant. 

The FEC’s position appears to be Plaintiffs’ own motives are irrelevant to show that their speech 

is protected, but somehow the motives of others are relevant to show that Plaintiffs’ speech is not 

protected. This is nonsensical. 

In any event, Plaintiffs are not seeking to introduce evidence of their motives to 

demonstrate that their speech is protected. Plaintiffs offer evidence of their motives only as 

general background information—for instance, to show the reasons David Keating created 

SpeechNow.org and the reasons the other Plaintiffs wish to associate with and finance 

SpeechNow.org, and, in other cases, only as rebuttal evidence to the FEC’s claims that donors 

use independent spending to obtain access to and gratitude from candidates. See, e.g., Plaintiffs’ 

Proposed Findings of Fact at ¶¶ 115-17. 

Second, the FEC seems to suggest that Plaintiffs misstated the standard for coordination 

in their proposed finding in ¶ 20. While the FEC is correct that the relevant standards permit 

involvement with candidates that is not “material” and discussion that is not “substantial,” that 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 22 of 69
20

does not alter the fact that Mr. Keating did not violate those standards when he spoke to Mr. 

McGoff. That was the point of the proposed finding, and the FEC has not argued otherwise. 

Third, the FEC takes issue with Plaintiffs’ proposed finding in ¶ 21 concerning the 

reasons Mr. Keating chose to run ads against Mary Landrieu, claiming that other evidence shows 

that Mr. Keating only chose Ms. Landrieu after SpeechNow.org’s consultant took too long 

preparing an ad cost estimate. See FEC’s Response at 7. Whether the delay had any impact on 

Mr. Keating’s decision or not, the FEC’s point does not detract from the truth of the proposed 

finding at all. There are many candidates against whom SpeechNow.org could conceivably run 

ads. Mr. Keating has made that clear in his declaration and has explained his general approach 

to selecting candidates against whom to run ads. See Keating Decl. at ¶¶ 2, 29-30. The fact that 

he may sometimes select particular candidates over others based on practical considerations such 

as timing, cost, and other things, does not mean his choices are somehow inconsistent or 

haphazard, as the FEC suggests. 

Fourth, the FEC claims that Mr. Keating has been inconsistent in his statements about 

disclosure. See FEC’s Response at 9. Plaintiffs addressed this point in their response to the 

FEC’s proposed findings of fact already. See Plaintiffs’ Response to FEC’s Proposed Findings 

of Fact at 142-44. In short, Mr. Keating has not been inconsistent in the slightest. He has stated 

that SpeechNow.org will disclose all of its donors, and SpeechNow.org cannot accept earmarked 

donations, so there is no issue of whether SpeechNow.org will disclose donors who “fund” 

administrative costs, because no donors will specifically fund administrative costs. See Keating 

Decl. at ¶ 36. As to administrative expenses, Mr. Keating’s position was to ask the FEC how it 

thinks he should disclose those. See Plaintiffs’ Response to FEC’s Proposed Findings of Fact at 

143-44. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 23 of 69
21

Fifth, the FEC claims that the views of its general counsel and former Chairman David 

Mason are irrelevant and not indicative of what the Commission itself thinks about 

SpeechNow.org. See FEC’s Response at 16-18. This is a curious claim in that the FEC does not 

appear to dispute the Plaintiffs’ statements concerning the FEC’s interpretation of the laws as 

they apply to the Plaintiffs. Plaintiffs included proposed findings concerning the general 

counsel’s draft advisory opinion simply to make clear that the FEC’s position on the laws’ 

application to SpeechNow.org has been uniform and has not changed. As for the views of 

Chairman Mason, they are relevant to the FEC’s claim that this is a test case. Mr. Keating 

thought there was indeed a chance that the FEC might approve SpeechNow.org’s advisory 

opinion and allow it to operate. Chairman Mason’s views indicate that that was not an 

unreasonable conclusion. 

Finally, the FEC takes issue with Plaintiffs’ proposed findings in ¶¶ 58-63 that if 

SpeechNow.org could accept the contributions from the individual Plaintiffs and Richard 

Marder, it would have enough money to produce and broadcast its ads. But this fact is not 

debatable; it is a simple matter of mathematics. While the FEC’s claim that SpeechNow.org is 

physically capable of accepting amounts under the contribution limits is true, the fact remains 

that the individual plaintiffs and Mr. Marder are currently ready, willing and able to contribute 

enough money to SpeechNow.org to fund the ads it wants to run. Mr. Keating has explained the 

reason that SpeechNow.org has not accepted amounts under the contribution limits—because 

that would trigger the requirements for political committees but provide no assurance that 

SpeechNow.org would ever be able to raise enough money to actually produce and broadcast 

advertisements. Plaintiffs’ Proposed Findings of Fact at ¶ 160; Keating Decl. at ¶¶ 45, 50. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 24 of 69
22

Moreover, the FEC’s claim that evidence in the record suggests that SpeechNow.org 

could raise the necessary funds is wrong. FEC’s Response at 22. It will always be true that any 

group might be able to raise the necessary funds under any contribution limits if only they would 

try, but that truism is not “evidence” suggesting the group in fact could do so. The FEC’s 

argument here is based on its unjustified supposition that everyone who signed up on 

SpeechNow.org’s website would be willing to contribute a substantial amount of money to 

SpeechNow.org. The FEC points to the fact that one person offered to contribute $10,000 to 

SpeechNow.org. See FEC’s Memorandum at 3-4. This is a curious point for the FEC to make, 

in that it makes clear that this individual believes he should be able to associate with 

SpeechNow.org by contributing $5000 more than the contribution limits allow. Plaintiffs 

appreciate that the FEC pointed this out, and they request that the Court enter it as a finding of 

fact. The fact that one person was willing to give $10,000 does not demonstrate that everyone 

who has indicated a desire to contribute to SpeechNow.org would be willing to contribute up to 

$5000, however. But if the Court decides to enter any facts that allegedly show SpeechNow.org 

could raise sufficient funds to produce and broadcast its ads from those who have signed up on 

its website, Plaintiffs ask the Court to extend the FEC’s argument to its logical conclusion, and 

find that every single one of those individuals wants to contribute at least $10,000 to 

SpeechNow.org, meaning that the contribution limits cut their right of association in half. 

Plaintiffs do not have to prove that it is impossible for them to raise money under 

contribution limits in order to maintain this case. The FEC’s argument simply amounts to saying 

that SpeechNow.org and the individual Plaintiffs are permitted to speak alone and they are 

permitted to speak by associating with thousands of people who will give relatively small 

amounts of money to the association, but they are not permitted to speak by associating with the 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 25 of 69
23

group of individuals who are now assembled. This amounts to the government appointing itself 

arbiter of the right of association. 

Beyond these points and a handful of objections that go to the manner in which Plaintiffs 

stated their proposed findings, the FEC admits the truth of the majority of the facts in Parts I-III 

of Plaintiffs proposed findings of fact. As discussed in more detail in Part II, below, the FEC’s 

relevance and other objections to the facts in these sections are baseless. Accordingly, the Court 

should enter these proposed findings. 

 2. Facts Concerning the Effect of Contribution Limits on Plaintiffs. 

The FEC’s objections to the facts in Part IV of Plaintiffs proposed findings of fact fall 

into three main categories. First, the FEC attacks the Plaintiffs’ experts on the grounds that they 

allegedly did not disclose information under Rule 26(a) and that they submitted new expert 

“reports” in the form of declarations. See FEC’s Response at 23-24 (disclosures) and 29-30 

(declarations). Second, the FEC contends that the claims of Plaintiffs’ experts are largely 

unsupported. Third, the FEC claims that Plaintiffs’ experts examined unrepresentative data that 

is irrelevant to this case. 

The first claim is simply false. As demonstrated below, the declarations of Plaintiffs’ 

experts are not new reports, and Plaintiffs made all appropriate disclosures for their experts 

under Rule 26(a). The second and third claims ignore the fact that the proposed findings in this 

section are, in the main, matters of common sense and otherwise obvious points that the FEC 

either does not dispute or cannot rationally dispute. For example, raising money under 

contribution limits is more difficult than raising money without contribution limits. The FEC 

recognizes the basic truth of this fact even if it tries to qualify it with the absurd claim that it is 

only true for “some organizations.” See FEC’s Response at 22. Likewise, producing and 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 26 of 69
24

broadcasting television ads is expensive. The FEC again recognizes the truth of this basic point 

even though it again tries to qualify that concession. See id. at 41 (stating “it is often true that 

communicating to large groups of voters requires significant amounts of money”). Indeed, in 

arguing that Plaintiffs’ claim about the burden of contribution limits “is premised on the notion 

that there is a threshold level of political influence that contribution limits must accommodate” 

the FEC essentially concedes Plaintiffs’ whole factual point. Id. This argument recognizes that 

contribution limits do indeed limit the amount of “political influence”—which is to say, 

speech—in which the Plaintiffs can engage. Otherwise, there would be no point in claiming, as 

the FEC does, that the Constitution does not require contribution limits to accommodate any 

particular level of speech. 

In fact, the FEC is simply wrong that the Constitution does not establish a threshold level 

for contribution limits. The Supreme Court established that in Randall v. Sorrell, 548 U.S. 230, 

248-53 (2006). In any event, the question in this case is not whether there is some particular 

threshold level for the contribution limits that apply to the Plaintiffs. Plaintiffs are not arguing 

that the Constitution requires the contribution limits to be raised slightly. Plaintiffs’ position is 

that the limits cannot be applied to them at all, because SpeechNow.org makes only independent 

expenditures and thus the contribution limits serve no government interest. This is not a matter 

of degree, it is a matter of principle that turns on the type of group that SpeechNow.org is and the 

manner in which it chooses to speak. Plaintiffs do not have to demonstrate any particular level 

of burden imposed by the contribution limits to make their claim. They simply have to show that 

the limits burden their speech. See, e.g., WRTL II, 127 S. Ct. at 2660-61 (2007); Citizens Against 

Rent Control, 454 U.S. at 292-93; Leake, 525 F.3d at 277-78 (4th Cir. 2008). They have amply 

done so in their proposed findings of fact, and the FEC’s arguments to the contrary are just 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 27 of 69
25

tinkering around the margins of otherwise simple truths about fundraising and the impact of 

contribution limits on fundraising. 

While Plaintiffs offered these basic points through a number of proposed findings that 

illustrate the issues in some detail, the basic points can be summarized as follows: Speaking to a 

large audience of voters requires a large amount of money. See Plaintiffs’ Proposed Findings of 

Fact at ¶ 98. Groups must raise this money either in small amounts from many donors or large 

amounts from fewer donors. See id. at ¶ 100. Raising money in small increments is more costly 

and time consuming than raising money in larger increments. See id. at ¶ 101-04. As a result, 

contribution limits make raising money harder than it would be without those limits, and that 

difficulty, and the attendant costs of contribution limits, increases as the average contribution a 

group is able to raise decreases (in other words, the smaller the average contribution, the higher 

the overall costs of fundraising). See id. at ¶ 67. Thus, the fact that average political 

contributions in this country are relatively low—in the range of a few hundred dollars—means 

that groups that have to raise money from many donors will have an even more difficult time 

because most of those donors will give only small amounts. Id at ¶¶ 66-70. Because raising 

money itself costs money, groups must have seed money to get started. See id. at ¶ 83. If we 

examine the actions of groups that raise money outside of contribution limits, we see these 

general principles demonstrated in the fact that groups tend to express a preference for large 

contributions over smaller ones. See id. at ¶¶ 104-112. For these reasons, contribution limits 

have a more significant impact on new and smaller groups, although any group will have an 

easier time raising money if the issues on which it focuses achieve some notoriety or if it is able 

to demonstrate a track record of success. See id. at ¶¶ 80, 86. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 28 of 69
26

Contribution limits impose burdens in other ways as well. For example, they prevent 

individuals who wish to associate from taking full advantage of divisions of labor. See id. at 

¶ 93. Because some individuals prefer to associate with others, rather than to speak out on their 

own, the impact of contribution limits can be to deter those individuals from speaking out. See 

id. at ¶ 94. Contribution limits also make it harder for donors to signal their preferences for some 

groups by making large contributions. See id. at ¶¶ 90,95. Finally, the more money a group 

must spend to raise funds, the less it will have to spend on its speech. See id. at ¶ 99. 

These are not complicated or controversial points. Indeed, most of them are simple 

matters of logic or basic economics—intermediate undergraduate economics as the FEC points 

out. See FEC’s Memorandum at 20. As stated above, the FEC does not dispute the fact that 

raising money under contribution limits is harder than raising money without those limits, and it 

therefore cannot seriously dispute that the reason for this is that raising money in smaller 

increments is more time consuming and costly than raising it in larger increments. Similarly, the 

FEC recognizes that groups prefer larger contributions over smaller ones in relying so heavily on 

the large donations made to 527s during 2004. See FEC’s Proposed Findings of Fact at 44-47; 

Plaintiffs’ Response to FEC’s Proposed Findings of Fact at 76-79 (responding to FEC’s 

Proposed Findings of Fact at ¶¶ 150-162). Indeed, for the FEC to claim to dispute the fact is 

bizarre on its face, for if groups did not prefer large over small contributions, contribution limits 

would serve no purpose. Moreover, the FEC’s own expert’s research shows that political 

contributions tend to be small. See Simpson Decl. Ex. 41, Wilcox et al., Campaign 

Contributions and Democracy, in IS THIS ANY WAY TO RUN A DEMOCRATIC GOVERNMENT 35, 

36 (Stephen J. Wayne ed., 2004). Both the FEC and the California FPPC have claimed that 

imposing contribution limits on independent groups will decrease their independent spending. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 29 of 69
27

See FEC’s Proposed Findings of Fact at ¶ 223; Plaintiffs’ Proposed Findings of Fact at ¶ 113 

(FPPC). And the Supreme Court has already held both that associating with others allows 

individuals to speak more effectively and that contribution limits imposed on voluntary 

associations impact their ability to spend money on speech. Citizens Against Rent Control, 454 

U.S. at 295-300. 

In fact, some simple calculations based on statistics the FEC itself provides make 

absolutely clear that smaller groups operating under contribution limits are at an extreme 

disadvantage as compared with groups that are able to operate without those limits. The FEC 

cites to statistics about the growth in the number of nonconnected committees and their receipts, 

claiming that Plaintiffs’ expert failed to take note of this evidence. FEC’s Memorandum at 16. 

But these numbers make Plaintiffs’, and Professor Milyo’s, point. The FEC points out that the 

number of nonconnected committees grew from 1,321 in 1990 to 1,797 in 2006, while their 

aggregate receipts grew from $72 million to $350 million. Id. Based on these numbers, the 

average amount of receipts per nonconnected committee at each end of the range is roughly 

$54,000 raised per nonconnected committee in the 1990 cycle and roughly $194,000 raised per 

nonconnected committee in 2006 cycle.5 Now compare those average receipts per nonconnected 

committee with the amounts raised in the 2004 election cycle by the 527s Professor Milyo 

discussed. The top ten 527s raised from roughly $10 million to roughly $72 million during that 

election cycle. See Milyo Decl. at 26, Table 1. In short, these 527s raised between 50 and 400 

times the average amounts raised by nonconnected committees, even at the top of the range that 

the FEC cites. In fact, a quick review of the appendix in the Weisman & Hassan article on which 

the FEC relies makes clear that the average amounts raised by the majority of 527s during 2004 

 

5

 These numbers are calculated by dividing the aggregate receipts by the number of nonconnected committees at 

each end of the range. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 30 of 69
28

was vastly more than the average amounts raised by the nonconnected committees cited by the 

FEC. Weisman & Hassan indicates that eighty 527s raised more than $200,000 in the 2004 

election cycle, which accounted for the vast majority of funds raised by 527s during that cycle. 

See FEC Ex. 55 at 104-05 (table 5.4)6

 Dividing the total net receipts by those eighty 527s yields 

an average amount raised per 527 of roughly $5 million (405,107,839 ÷ 80 = 5,063,848). This 

means that on average, the 527s were able to raise roughly 25 times more than the average 

receipts raised by nonconnected committees at the top of the FEC’s range. 

In short, Plaintiffs’ basic point is undeniable. Being free of contribution limits allows 

groups to raise vastly more money than they otherwise could, and the Court should enter as 

findings of fact the points in the preceding paragraph. The FEC’s argument simply amounts to 

saying that groups that wish to raise money should be satisfied with less. They should speak at 

the level that a few hundred thousand dollars allows, rather than the level that tens of millions of 

dollars allows. But it is not up to the FEC to play traffic cop to American’s rights to free speech. 

The FEC is not entitled to decide that a particular amount of speech or decibel level is 

“adequate” or that speakers should be satisfied to reach a few thousand listeners rather than 

millions. See, e.g., WRTL II, 127 S.Ct. at 2669 (“‘Freedom of discussion, if it would fulfill its 

historic function in this nation, must embrace all issues about which information is needed or 

appropriate to enable the members of society to cope with the exigencies of their period.’”) 

(quoting Thornhill v. Alabama, 310 U.S. 88 (1940)); Buckley, 424 U.S. at 58 (“The First 

Amendment denies government the power to determine that spending to promote one’s political 

views is wasteful, excessive, or unwise. In the free society ordained by our Constitution it is not 

the government but the people—individually as citizens and candidates and collectively as 

 

6

 The article states that there were forty 527s during 2004 that raised less than $200,000, but that the 527s that raised 

more than $200,000 accounted for almost all of the money that went into 527s during that cycle. See FEC Ex. 55 at 

81, 81 n.3. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 31 of 69
29

associations and political committees—who must retain control over the quantity and range of 

debate on public issues in a political campaign.”). 

Thus, in the main, Plaintiffs’ experts are not saying anything that either the FEC or its 

expert or the Supreme Court have not recognized already. The testimony of Plaintiffs’ experts 

simply makes these points in greater detail. But the Court need not make every finding on these 

points in exactly the manner that Plaintiffs propose. The basic facts are accurate and 

uncontroversial, and the Court should enter them despite the FEC’s many hair-splitting 

arguments to the contrary. 

a. The declarations of Plaintiffs’ experts are not new reports; 

they are the proper vehicle for expert testimony. 

The FEC’s claim that Plaintiffs are improperly relying on “new” expert reports in the 

form of declarations is baseless. Plaintiffs presented their experts’ testimony in the form of 

declarations because that is the proper form in which witness testimony is supposed to be 

offered. See, e.g., Nnadili v. Chevron U.S.A. Inc., 435 F. Supp. 2d 93, 105 (D.D.C. 2006) 

(stating that an “unsworn expert report is not competent to be considered on a motion for 

summary judgment”) (citing Fowle v. C&C Cola, 868 F.2d 59, 67 (3d Cir. 1989)); Pack v. 

Damon Corp., 434 F.3d 810, 815 (6th Cir. 2006) (stating that an unsworn expert report “is 

hearsay, which may not be considered on a motion for summary judgment”). By contrast, the 

purpose of an expert report is to give the opposing side fair notice of the substance of the 

experts’ opinions, not to take the place of expert testimony. See, e.g., Sommerfield v. City of 

Chicago, No. 06-3132, 2008 U.S. Dist. LEXIS 88760, at *37 (N.D. Ill. Nov. 3, 2008) (“The 

purpose of an expert report is to facilitate an effective cross-examination, minimize the expense 

of deposing experts, the shortening of direct examination, and the prevention of ambush at 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 32 of 69
30

trial.”). In any event, the declarations of Plaintiffs’ experts are nearly identical to their reports, 

so the FEC should not be heard to complain. 

The FEC complains that Professor Milyo added new substantive arguments to his 

declaration, but that vastly overstates the minor differences between his declaration and his 

report and misapprehends the legal standard for expert reports. Paragraph 36 of Professor 

Milyo’s declaration, which the FEC claims is a “completely new argument,” FEC’s Response at 

31, simply presents a slightly more expansive introduction to the economic concepts of scarcity, 

opportunity costs, and utility maximization. See Milyo Decl. at ¶ 36. This is not a new opinion 

(or even really an opinion at all), but just a way to clarify some basic concepts on which 

Professor Milyo relied in his report.7

 The FEC’s complaints about the changes to paragraphs 37-

39 and paragraph 44 of Professor Milyo’s declaration are similarly hollow. The changes in these 

paragraphs amount to minor word changes and slight amplifications of points made in Professor 

Milyo’s report.8 Nor does paragraph 44 amount to either a substantive addition or a new 

argument as the FEC claims. This paragraph simply summarizes conclusions that Professor 

Milyo had already made in his expert report about the equi-marginal principle and the concept of 

revealed preference. See FEC Ex. 157 at 7-8 (Section 4.2), 9 (Section 4.4). Professor Milyo 

made all of these points clear in his original report and the FEC had ample opportunity to crossexamine him about them in his deposition. Indeed, the FEC refers to these points as simple 

 

7 Compare FEC Ex. 157 at 8 (“The law of increasing opportunity costs implies that the cost of raising funds from 

either pool of donors will increase with the amount of money already raised from either pool of donors. . . .”) with

Milyo Decl. at ¶ 36 (“Therefore, the fundraising cost per dollar raised increases with the amount of money that a 

group raises.”). 

8 Compare FEC Ex. 157 at 8 (“Given this, it follows that any binding constraint on raising funds from large donors 

forces a group to allocate greater effort to raising funds from small donors at a greater marginal cost per dollar 

raised. This violates the equi-marginal principle, meaning the total funds available for independent expenditures 

must be lower than they would be if the group was unconstrained.”) with Milyo Decl. at ¶ 39 (“Now consider the 

effect of any binding constraint on raising funds from large donors; such a constraint forces the group to re-allocate 

effort to raising funds from small donors at a greater marginal cost per dollar raised. This violates the equi-marginal 

principle, meaning the total funds raised (and therefore the total funds available for independent expenditures) must 

be lower than they would be if the group was unconstrained.”). 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 33 of 69
31

undergraduate-level theories, so it is not clear why the FEC is complaining that Professor Milyo 

stated these simple theories slightly differently in his declaration than he did in his report. 

The FEC completely misapprehends the standards governing expert reports and expert 

testimony. Neither the Federal Rules of Civil Procedure nor the Federal Rules of Evidence limit 

expert testimony to precisely what is said in the report. The purpose of the report is simply to 

put the opposing party on notice; not to provide verbatim testimony. Thompson v. Doane Pet 

Care Co., 470 F.3d 1201, 1203 (6th Cir. 2006) (“[Rule] 26(a)(2)(B) does not limit an expert’s 

testimony simply to reading his report. No language in the rule would suggest such a limitation. 

The rule contemplates that the expert will supplement, elaborate upon, explain and subject 

himself to cross-examination upon his report.”); Dorsett v. Am. Isuzu Motors, Inc., 805 F. Supp. 

1212, 1223 (E.D. Pa. 1992) (“Since the court recognizes that it is not possible to submit a 

verbatim transcript of an expert's testimony as an expert report, the court has never required that 

everything an expert testifies to be contained in the report. So long as the report is sufficient to 

put the opposing party on notice as to what the expert would say, the court will allow the expert 

to say it.”) (emphasis removed). The minor differences between Professor Milyo’s declaration 

and his report are well within these standards. 

b. Plaintiffs made all appropriate disclosures in connection with 

their expert reports. 

The FEC complains both that Plaintiffs did not make appropriate disclosures in their 

experts’ declarations and that they did not make those disclosures prior to filing those 

declarations in Court. See FEC’s Response at 29-30. The first claim makes no sense. As stated 

above, it is the purpose of the expert report to provide notice of the expert’s opinions and the 

disclosures required by Rule 26(a)(2). Once made, as they were here, there is no obligation to 

make the same disclosures in the experts’ testimony. See Fed. R. Civ. P. 26(a)(2) (stating that 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 34 of 69
32

disclosures must be made to the opposing parties). In any event, Plaintiffs did include the 

curriculum vita for both Professor Milyo and Rodney Smith as exhibits to their declarations, as 

well as the reports produced to the FEC. As a result, both witnesses’ publications as well as 

Professor Milyo’s past work for the Institute for Justice and his affiliation with the Center for 

Competitive Politics and the Cato Institute were before the Court. Smith Decl., Ex. A; Milyo 

Decl., Ex. A.9 Although the amount Professor Milyo was paid and his prior expert testimony 

were not included in the declarations, this information was included in Professor Milyo’s report, 

which is all that Rule 26(a)(2) requires. See FEC Ex. 157 at 1. 

The FEC’s complaints about Rodney Smith’s disclosures is particularly strange. The 

FEC claims that he did not disclose his prior testimony as an expert witness, see FEC’s Response 

at 24, but as the FEC knows from Mr. Smith’s deposition, he has never been an expert witness 

before. See FEC Ex. 15, Smith Dep. at 17:19-21. Accordingly, there was nothing to disclose. 

Similarly, Mr. Smith has written one book—MONEY, POWER & ELECTIONS: HOW CAMPAIGN 

FINANCE REFORM SUBVERTS AMERICAN DEMOCRACY—which is listed on the vita that was 

produced to the FEC along with his report and was attached to his declaration. FEC Ex. 156 at 

13. Again, it is not clear what else the FEC thinks he should have disclosed.10 

As for the amount Mr. Smith was paid, that was not disclosed in his expert report for the 

simple reason that at the time he produced his report he had refused any payment for his work. 

 

9

 The FEC also argues that the biographical information omitted from Prof. Milyo's sworn testimony be entered as 

facts because they are allegedly probative of potential bias. FEC's Response at 31-32. The FEC has not indicated 

how, if at all, this alleged bias has manifested in Prof. Milyo’s testimony, but if this Court elects to enter this 

information into the factual record, Plaintiffs request that this Court also adopt the following facts tending to show 

bias on the part of the FEC’s expert: Clyde Wilcox is a former employee of the FEC. FEC Ex. 1 (Wilcox CV at 1); 

Clyde Wilcox has served as an expert witness for the FEC in the past. FEC Ex. 1 (Wilcox CV at 35); Clyde Wilcox 

was paid approximately $50,000 for his services in this case. FEC. Ex. 18, Wilcox Dep. at 75:18-21 (“Q. Do you 

know the total amount you've been paid? A. No. I know that the top line budget I think is $50,000, but I'm not 

there yet. I might probably be there by the end of the day . . . .”). 

10 Mr. Smith has also written two op-eds in the last ten years. Smith Reply Decl. at ¶ 6. Plaintiffs do not believe that 

the op-eds are considered “publications” that must be disclosed in an expert report, but in any event they note that 

Professor Wilcox did not list specific op-eds that he wrote. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 35 of 69
33

See Declaration of Rodney Smith in Support of Plaintiffs’ Reply Memorandum (hereinafter 

Smith Reply Decl.) at ¶ 2. Plaintiffs’ counsel offered to pay Mr. Smith for his report when he 

submitted it, but he initially decided simply to perform his services pro bono. Id. Plaintiffs’ 

counsel continued to offer payment to him and he only reconsidered the day before his 

deposition, deciding to accept $250 per hour for his services. Id. at ¶ 3. He informed the FEC of 

his hourly rate of compensation in his deposition, so it is not clear why the FEC is complaining 

about it now. See FEC Ex. 15, Smith Dep. at 17:3-8. Rule 26(e) requires supplementation of 

expert disclosures only if the information has not otherwise been disclosed through other 

discovery. Since the FEC knew Mr. Smith was being paid from his deposition, there was 

nothing more to disclose. Mr. Smith has since been paid a total of $5000 for 20 hours of work in 

this case, which includes the time he spent in connection with his deposition. See Smith Reply 

Decl. at ¶ 4. 

Finally, the FEC makes much of the fact that the Plaintiffs turned over a draft of Mr. 

Smith’s report the morning of his deposition. The failure to disclose this draft earlier was 

inadvertent and, in any event, could not possibly have caused the FEC any prejudice. The FEC 

served subpoenas on Plaintiffs one week before Mr. Smith’s deposition seeking documents from 

both Mr. Smith and Professor Milyo. The subpoenas required productions of several categories 

of documents two days before Mr. Smith’s deposition. Plaintiffs complied, producing all of the 

requested documents—including other drafts of Mr. Smith’s report—on that day. Unfortunately, 

they overlooked an additional draft of Mr. Smith’s report, and they did not discover this error 

until the morning of Mr. Smith’s deposition. Plaintiffs produced the draft to the FEC via email 

at 10:03 am, less than one half hour after the deposition began. FEC Ex. 155, Email from Paul 

Sherman to Steve Hajjar, Robert Bonham, Graham Wilson, Kevin Deeley, and Greg Mueller 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 36 of 69
34

(Sept. 18, 2008, 10:03 a.m.) at 1. Plaintiffs’ counsel informed counsel for the FEC that they 

were free to take as much time to review the draft report and extend the deposition if necessary 

into the evening to account for the late production of the draft. See Declaration of Bert Gall in 

Support of Plaintiffs’ Reply Memorandum at ¶ 4. The FEC, however, did not take counsel up on 

its offer to take additional time to review the draft report. As a result, Mr. Smith’s deposition 

concluded at 4:37 p.m. Id. at ¶ 5. The FEC questioned Mr. Smith for a mere four hours and 

seventeen minutes. It could easily have taken a long break to review the draft report and still 

finished the deposition well within business hours. Indeed, given Plaintiffs’ willingness to 

accommodate the FEC on this issue, it could have taken even longer or even continued the 

deposition into the next day. As a result, the FEC should not now be heard to complain. 

Moreover, there are only slight differences between the late-produced draft and the other 

drafts that Plaintiffs produced on time. The FEC claims that the late-produced draft of Mr. 

Smith’s report did not include a statement that, due to campaign-finance limits, “most nonwealthy challenger candidates and start-up advocacy groups are out of business before they ever 

get started.” FEC’s Response at 25. But this is not true. On page four of that draft, Mr. Smith 

states “[a]s a consequence [of contribution limits mandated by campaign-finance reform] most 

start-up advocacy groups and non-wealthy candidates are effectively out of business before they 

ever start trying to raise money.” FEC Ex. 155 at 7 (page 4 of Smith report). In the final report, 

Smith simply chose to use the sentence a second time on a later page, but that is not a substantive 

difference between the drafts at all. FEC Ex. 156 at 9. The FEC’s assertion that the statement 

“had been inserted late in the process after interactions with Plaintiffs’ counsel” is just not so. 

FEC’s Response at 25. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 37 of 69
35

Similarly, the FEC also complains that the statement that “the contribution limits 

mandated by campaign finance reform severely cripple their ability to accumulate enough cash 

reserves to effectively finance their growth” does not explicitly appear in the first (late-produced) 

draft of Mr. Smith’s report. FEC’s Response at 25. While technically true, this is a distinction 

without a difference, because the basic point appears throughout that first draft and all 

subsequent drafts of his report. The quoted sentence does not reflect some new opinion that 

Smith only expressed after talking to Plaintiffs’ counsel. It is but a single statement of the 

central point of Smith’s whole report, which is that contribution limits impede fundraising by 

new organizations and non-wealthy candidates. Numerous sentences in every version of the 

report echo this sentiment. Compare FEC Ex. 155 at 5 (page 1 of Smith report) (“These forces 

of change [Buckley and BCRA] have made it infinitely more difficult for non-wealthy 

candidates, start-up advocacy groups and other political organizations to raise regulated, hard 

dollars. In fact, it has become a practical impossibility for start-up advocacy groups on both the 

left or on the right to raise the seed money they need to sustain themselves.”) with FEC Ex. 156 

at 3 (page 2 of Smith report) (same). The principle was always there and the FEC was always 

aware of it. Indeed, the FEC questioned Mr. Smith thoroughly on this point in his deposition. 

E.g., FEC Ex. 15, Smith Dep. at 119:21-123:18. 

The cases on which the FEC relies in claiming that the late-produced draft prejudiced 

their ability to depose Mr. Smith involved either drafts that were never produced or drafts that 

revealed extensive changes done at the request of counsel. See Elm Grove Coal Co. v. Dir., 

O.W.C.P, 480 F.3d 278, 299-301 (4th Cir. 2007) (draft reports considered work product and 

never turned over); Bowers v. Nat’l Collegiate Athletic Ass’n, 564 F. Supp. 2d 322, 341 (D.N.J. 

2008) (expert witness misrepresented to opposing party whether any drafts had been turned over 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 38 of 69
36

to counsel); EEOC v. United Parcel Servs., Inc., 149 F. Supp. 2d 1115, 1139-40 (N.D. Cal. 

2000) (draft reports revealed extensive alterations done at suggestion of counsel). These cases 

are all obviously distinguishable. The late-produced report is not a reason for this Court to 

disregard Mr. Smith’s testimony. 

c. The testimony of Plaintiffs’ experts is grounded in data, 

experience, logic, and simple principles of economics. 

As stated above, the FEC spends a great deal of space in their response nitpicking 

Plaintiffs’ experts around the margins without substantially countering any of the basic points 

they make. The FEC even claims in its memorandum that Plaintiffs’ experts never 

“interviewed” any fundraisers or political insiders, former politicians, or individuals who run 

independent groups. See FEC’s Memorandum at 18. This is true. Professor Milyo chose 

instead to rely on logic, the principles of economics, and hard data. Data cannot be vague, 

hyperbolic, speculative, or forgetful. Data do not make things up, tell interviewers what it thinks 

they want to hear, or rely on multiple levels of hearsay. Cf. FEC Ex. 1, Wilcox Report at 14, 18, 

21. Professor Milyo did not call any former politicians on the telephone to see what they thought 

or cull quotes from articles of other people’s views of still others’ claims about many others’ 

motives. Cf. FEC Ex. 1 at 8, 25; id. at 9-11. Professor Milyo did not have to try to remember the 

names of allegedly trustworthy newspaper reporters on whose accounts he relied, because he did 

not rely on newspaper accounts in his report. Cf. FEC Ex. 18, Wilcox Dep. at 112:9-22 (“Yeah. 

You know what? I really have a bad time remembering names.”). He made no sweeping 

conclusions based on reports that featured cartoon characters to make their points. Cf. FEC Ex. 1 

at 12; Simpson Decl. Ex. 18 at 21 (picture of cartoon “fat cat” lighting cigar with money); FEC 

Ex. 18, 245:1-4 (“Q: Do you have any concerns about the fact that the cover of this report 

depicts a giant gorilla throwing money off of the state capitol building? A. I must admit. It does 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 39 of 69
37

set you back a bit.”). As a result, Professor Milyo’s conclusions, while perhaps less entertaining 

than Professor Wilcox’s, were narrower and more modest, and thus much more reliable. As for 

Mr. Smith, it is true that he did not talk to any fundraisers. The reason is simple. He is one, and 

he has been for over thirty years. Smith Decl. Ex. A. 

Plaintiffs have already addressed the broad claims the FEC lodges against the facts in 

Part III of their proposed findings of fact. Here, they will address the most salient specific points 

in the FEC’s response. 

First, the FEC takes issue with Plaintiffs’ proposed finding, based on Rodney Smith’s 

declaration, that during the 1999-2000 election cycle, roughly 3.5 million Americans made 

political contributions and that most were small donations. The FEC responds that this 

information is less probative and material than the FEC’s proposed findings that purport to show 

that the national party committees raised lots of money after BCRA, much of it from small 

donors. See FEC’s Response at 23. This argument is rather like saying that it is easy to start a 

successful hamburger franchise because McDonalds sells billions of burgers every year. Indeed, 

the whole point of Smith’s report is that smaller groups have a hard time raising funds under 

contribution limits. He does not claim in his report that the national party committees have a 

hard time raising money under the limits. 

The FEC also misrepresents Smith’s testimony. It claims that “[a]t his deposition, Smith 

erroneously claimed to have obtained his number of total donors from FEC reports, which is 

impossible since contributors giving $200 or less in calendar year are not itemized in FEC 

reports.” Id. But as Smith made clear in both his expert report and deposition testimony, he 

calculated the sub-$200 statistic by dividing the average contribution made into total receipts. 

See Smith Decl. at ¶ 23; FEC Ex. 15, Smith Dep. at 136:11-22. Similarly, the FEC claims that 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 40 of 69
38

“[h]e later admitted that the total number of donors had been derived from a national poll.” 

FEC’s Response at 23. This is false. Mr. Smith made clear in his deposition that he derived the 

figure himself, and his review of the poll by McLaughlin & Associates verified the accuracy of 

his own independent calculation. FEC Ex. 15, Smith Dep. at 137:6-12 (“In other words, John 

McLaughlin is a friend of mine, and he had done an independent survey that verified my 

approximations in terms of how many donors—based on his—two million Republicans and a 

million-five Democrats. So his independent pole [sic] supported what I had done 

independently.”). 

Second, the FEC claims that a number of basic points about the economics of fundraising 

are unsupported. See FEC’s Response at 26-28. Thus, for instance, the FEC claims that Rodney 

Smith’s statement that there is an inverse relationship between fundraising costs and the average 

contribution is unsupported. Id. at 26. But this is a basic logical point about the nature of any 

business operation, whether fundraising or otherwise. The point is simply that it costs money to 

raise money and that the less raised per dollar spent, the higher the costs will necessarily be. 

Likewise, the FEC objects to the simple claim that every fundraising operation must spend 

money to acquire donors. Id. at 27. Is the FEC claiming that acquiring new donors is a costless 

enterprise? The FEC’s objections to such straightforward points continue throughout its 

response, and in each case it demands more “support” for such claims. Mr. Smith has been a 

fundraiser for over three decades. His testimony on these basic points is the support for them. 

Again, they are not terribly complicated points, and they are based on Mr. Smith’s thirty plus 

years of experience as a fundraiser. 

Third, the FEC claims that Professor Milyo’s data concerning the fundraising of 527 

groups is not necessarily representative of all independent groups. See id. at 29-32, 44-49. But 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 41 of 69
39

Professor Milyo recognized as much, and this criticism does not detract from his point in relying 

on this data. The purpose of examining the fundraising of other 527s is simply to demonstrate 

two basic facts. First, groups express a preference for large contributions over smaller ones, both 

when they are starting up and as an ongoing matter. As stated above, this is a point that the FEC 

cannot seriously dispute. Second, restricting the amount of money that groups can raise will 

limit the amounts that it can spend. Here again, the FEC has admitted as much in contending, in 

its own proposed findings of fact, that without contribution limits, independent groups will spend 

far more money than under contribution limits. FEC’s Proposed Findings of Fact at ¶ 223; 

Plaintiffs’ Response to FEC’s Proposed Findings of Fact at ¶ 223. Indeed, the comparison above 

between the nonconnected committee statistics on which the FEC relies and 527s from 2004 

makes both of these points crystal clear. 

In any event, the FEC’s claim about the representativeness of 527s contradicts its own 

reliance on those groups. Plaintiffs relied on data concerning 527 fundraising to illustrate a few 

simple, essentially irrefutable points. The FEC, by contrast, relies on information concerning the 

very same 527s it contends are irrelevant to this case as evidence of everything from the 

effectiveness of their spending, to the motives of donors, to the claim that independent groups 

lead to corruption. On these points, the FEC’s complaint is absolutely correct—those groups are 

not representative of SpeechNow.org and cannot be used to support the many broad conclusions 

the FEC wishes to draw. 

Fourth, as with Mr. Smith, the FEC nitpicks Professor Milyo’s explanation of basic 

economic principles—such as specialization, division of labor, comparative advantage, 

economies of scale, and revealed preferences—and what those principles demonstrate about the 

effect of contribution limits on independent groups. FEC’s Memorandum at 18-22; FEC’s 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 42 of 69
40

Response at ¶¶ 91, 93-97, 99-103. In several instances, the FEC derides this discussion as 

conjecture. But the principles of economics are not conjecture, and Professor Milyo did not 

simply announce these principles in a vacuum and leave it at that. He first illustrated the 

principles and then examined their application to specific examples, namely, fundraising by 

527s. 

For example, in Section IV of his declaration, Professor Milyo discusses what economic 

theory reveals about, among other things, the means by which groups prefer to raise money and 

the importance of large contributors (i.e., political patrons). Then, in Sections VII and VIII of 

his declaration, which form the bases of several of Plaintiffs’ proposed findings of fact, he 

discusses the evidence on those same topics. Thus, the FEC falls into the strange pattern of 

criticizing Professor Milyo for not providing any evidence on a certain topic, and then later 

criticizing the evidence that he does, in fact, present on the topic. Compare FEC’s Response at 

39 (alleging that Professor Milyo “presents no evidence” about the role played by political 

patrons) with Id. at 32-33 (claiming that the evidence Milyo offers about the role of political 

patronage should be discounted); compare also FEC’s Response at 44 (alleging Professor Milyo 

did “not consider the realities of political fundraising” in concluding that contribution limits 

result in less spending on independent expenditures) with id. at 44-49 (arguing that Professor 

Milyo’s analysis of the data with which he demonstrates that contribution limits reduce the funds 

available for independent expenditures is flawed). The FEC’s claims are thus attacks on the 

form of Professor Milyo’s report and declaration; they are not legitimate attacks on substance. 

Fifth, the FEC claims that the report of the California Fair Political Practices Commission 

on which it relies (the “Gorilla Report”) does not support Plaintiffs’ claim that the FPPC believes 

that contribution limits would limit the spending of independent groups. This claim is 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 43 of 69
41

nonsensical. The Gorilla Report devotes an entire section to calculating the amounts of money 

that would not have been spent if contribution limits were imposed on independent groups. See

Simpson Decl. Ex. 18 at 41-47. The FEC itself relied on the Gorilla Report for precisely that 

point in its own proposed findings of fact, and it makes the same point in other ways as well. See

FEC’s Proposed Findings of Fact at ¶ 223 (quoting FEC Ex. 1, Wilcox Report at 14-15). And 

both individuals whom Plaintiffs deposed from the FPPC also recognized the basic point. It is 

true, as the FEC contends, that Ross Johnson qualified his testimony on that point by saying he 

could not say whether it would be true for all groups at all times that contribution limits will 

impact the amount they can spend. But he admitted that that the point was valid for the groups 

included in the Gorilla Report itself. See FEC Ex. 10, Johnson Dep. at 73:11-18. Plaintiffs’ 

point in relying on this evidence is simply to point out that both the FEC and the California 

FPPC intend contribution limits to limit the amount of money available for independent groups 

to spend and that evidence exists that contribution limits actually have that affect. Whether it 

will always be true across the board in every case is not the point. Indeed, it is much more 

relevant that the FEC and other enforcement agencies rely on contribution limits to have that 

effect, because that demonstrates that the purpose of applying the limits to independent groups is, 

at least in part, to limit expenditures. 

3. Facts Showing that SpeechNow.org Creates No Concerns About 

Corruption.

The FEC does not seriously dispute the basic facts included in Part V of the Plaintiffs 

proposed findings of fact. Again, it primarily tries to qualify certain points or simply makes 

irrelevant assertions in response. 

First, the FEC complains about Plaintiffs’ proposed facts that make clear that Plaintiffs 

do not care about access to or gratitude from candidates. But these facts are included only in 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 44 of 69
42

rebuttal to claims the FEC makes. As stated below, Plaintiffs agree that evidence of the motives 

of speakers or donors is irrelevant, other than as basic background information. But if the Court 

is going to include evidence of the alleged motives of others, it should include evidence of the 

Plaintiffs’ motives. 

Second, the FEC objects to Plaintiffs’ reliance on its expert’s research showing that most 

donors give for ideological reasons. Plaintiffs recognize that some donors indicate what 

Professor Wilcox has termed “investor motives,” but as Plaintiffs demonstrated in their response 

to the FEC’s proposed findings of fact, even so-called investor donors often indicate ideological 

or political motives for giving, and the simple fact that many donors give for “business reasons” 

is neither surprising nor evidence of corruption. See Plaintiffs’ Response to FEC’s Proposed 

Findings of Fact at 36. 

Third, the FEC objects to Plaintiffs’ proposed finding that “whatever concerns about 

corruption may be raised by a group’s independent expenditures would also be raised by an 

individual’s independent expenditures.” FEC’s Response at 55 (discussing Plaintiffs’ Proposed 

Findings of Fact at ¶ 122). Plaintiffs included this fact in anticipation of the FEC’s arguments 

that independent spending poses concerns about corruption, and thus it is a rebuttal fact. As 

Plaintiffs have made clear in their response to the FEC’s proposed findings, they do not believe 

that the FEC can argue in this case that independent spending poses concerns about corruption in 

light of the Supreme Court’s holdings as well as statutes and FEC rules that define the difference 

between independent and coordinated expenditures. SpeechNow.org will make only the former, 

so by definition it cannot create concerns about corruption, at least not by making independent 

expenditures. But if the FEC is permitted to include facts that allegedly show that independent 

expenditures cause corruption or that independent spending can be considered an “indirect 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 45 of 69
43

contribution” to candidates, then Plaintiffs should be permitted to argue that that point proves too 

much; if it were true, then all independent spending would cause corruption and could be limited. 

In other words, as stated in Plaintiffs’ proposed finding of fact 122, whatever concerns exist 

about independent spending by groups will exist as well about independent spending by 

individuals. The FEC’s facile claim that “an expenditure cap is not at issue in this case” is 

beside the point. Plaintiffs’ point is that by arguing that independent expenditures create the 

prospect of access and gratitude and thus cause concerns about corruption, the FEC is placing the 

constitutional protections for independent expenditures at issue in the case. Its own expert 

recognized as much. See FEC Ex. 18, Wilcox Dep. at 178:19-179:2 (“Q. Okay. So the logic of 

your argument would apply equally to individuals making independent expenditures? A. I 

would argue that individuals making independent expenditures creates the possibility of 

corruption, yes.”).11 Plaintiffs should not be prevented from making this argument simply 

because the FEC does not like the implications of its own arguments. 

Finally, the FEC takes issue with Professor Milyo’s statement that there is no empirical 

evidence that limits on contributions to groups like SpeechNow.org have any impact on 

corruption or the appearance of corruption. The FEC’s response is to claim that there is no 

evidence of the lack of such an impact either. See FEC’s Response at 59. That is, of course, 

true, but it is much simpler just to say that there is no evidence. The FEC then claims that one of 

Professor Milyo’s studies shows evidence that disclosure laws and restrictions on contributions 

can improve perceived political efficacy. Id. This overstates the point from the study, but it is 

 

11 The FEC states that, “in the sections of Milyo’s deposition cited by plaintiffs, he does not discuss what risks of 

corruption arise from an individual making independent expenditures.” FEC’s Response at 55. However, as 

Plaintiffs’ proposed finding cites to Professor Wilcox’s deposition and Professor Milyo’s declaration, it appears that 

the FEC is actually referring to Professor Wilcox. Even if the FEC is referring to Professor Milyo, what he said or 

did not say about specific risks is irrelevant. What is relevant, as explained above, is whether there is any principled 

distinction between independent expenditures by groups and independent expenditures by individuals. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 46 of 69
44

irrelevant in any event as “perceived political efficacy” has nothing to do with corruption. 

Finally, notwithstanding the FEC’s admission of the basic point of this fact—that there is no 

empirical evidence that contribution limits on groups like SpeechNow.org combat corruption—

the FEC goes on to claim it provided lots of evidence on this point in its own proposed facts. 

However, as the Plaintiffs demonstrated in painstaking detail in their response to the FEC’s 

proposed findings, its so-called evidence consists of little more that conjecture, supposition, 

innuendo, hearsay, and hyperbole. 

4. Facts Demonstrating the Burden of the PAC Requirements. 

The FEC does not dispute the majority of the Plaintiffs’ proposed facts in Part VI of their 

proposed findings of fact. Plaintiffs reply to the FEC’s general arguments in Part II.E, below. 

II. Plaintiffs’ Responses to the FEC’s Arguments in Its Memorandum in Support of Its 

Response to the Plaintiffs Proposed Findings of Fact. 

A. The FEC’s Proposed Findings of Fact on Whether This Is a “Test Case” Are 

Irrelevant.

Plaintiffs have already addressed the FEC claims that this is a “test case,” pointing out 

that the FEC has not argued that Plaintiffs’ lack standing to assert their claims, nor could it. See

Plaintiffs’ Response to FEC’s Proposed Findings of Fact at 41-46. As the FEC repeatedly states 

in its responses to Plaintiffs’ proposed findings of fact, the Plaintiffs’ motives for speaking are 

irrelevant. See FEC’s Memorandum at 23; FEC’s Response at 2 (“David Keating’s political 

opinions and motivation for founding SpeechNow.org are not relevant to the constitutionality of 

the challenged provisions.”). While it is appropriate for Plaintiffs to introduce basic background 

information about why Mr. Keating founded SpeechNow.org and why the other plaintiffs wish to 

finance and associate with it, the FEC is otherwise correct. As the Supreme Court has 

recognized, “under well-accepted First Amendment doctrine, a speaker’s motivation is entirely 

irrelevant to the question of constitutional protection.” WRTL II, 127 S. Ct. at 2666 (quoting M. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 47 of 69
45

Redish, MONEY TALKS: SPEECH, ECONOMIC POWER, AND THE VALUES OF DEMOCRACY 91 

(2001)). Indeed, the FEC tried mightily to make WRTL II about the speakers’ motives as well. 

See, e.g., id. at 2668 (“This evidence goes to WRTL’s subjective intent in running the ads, and 

we have already explained that WRTL’s intent is irrelevant in an as-applied challenge.”). The 

Supreme Court rebuffed its efforts there, and this Court should do the same here. 

The FEC claims that the alleged fact that this is a “test case” casts doubt on plaintiffs’ 

claims that they cannot start operations or fundraising without contributions above the limits. 

See FEC’s Memorandum at 1. But, as demonstrated above, Plaintiffs do not have to show that 

they cannot possibly raise money under the contribution limits or start their operations as a PAC. 

Plaintiffs need only show that the contribution limits burden their rights to speech and 

association. See supra at 12-13. That Plaintiffs have done so is crystal clear as a matter of law. 

The FEC’s argument is another species of its claim that the Plaintiffs cannot even bring this case 

until they demonstrate that the laws they challenge make their speech absolutely impossible. But 

this is wrong as a matter of law, as Plaintiffs demonstrated above. 

Indeed, the FEC’s “test case” argument is simply another effort to divert attention from 

the issues. The FEC itself believes that the laws Plaintiffs are challenging were clear on their 

face and that Plaintiffs had to have known what the FEC’s advisory opinion would say. See

FEC’s Response at 15-16; Simpson Decl. Ex. 14, FEC’s Responses to Plaintiffs’ Requests for 

Admission 1-9. And the FEC has, in other cases, argued that parties should seek advisory 

opinions before going to court. Christian Civic League of Me., Inc. v. FEC, 433 F. Supp. 2d 81, 

87 n.3 (D.D.C. 2006). In short, the FEC itself obviously believes that to operate free of the 

contribution limits and PAC requirements, Plaintiffs had to request an advisory opinion and then 

challenge those laws in court. And, indeed, David Keating recognized that these steps would 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 48 of 69
46

likely be necessary when he created SpeechNow.org. So what, exactly, is the FEC’s point? That 

Plaintiffs did what the FEC recognizes they had to do to operate free of contribution limits and 

PAC requirements? That David Keating created SpeechNow.org with the intent of speaking in a 

way that the law prevented the Plaintiffs from speaking? If Plaintiffs’ desire to speak and 

associate free of contribution limits and PAC requirements makes this a “test case,” then every 

First Amendment challenge is a test case on the same grounds, because every one necessarily 

involves someone who wants to speak in a particular manner and a law that prevents them from 

doing so. 

At its heart, the FEC’s position seems to be that Plaintiffs should not want to create a 

group that operates outside contribution limits and PAC requirements. They should just comply 

with the law and stop complaining, and that having decided not to do that somehow makes the 

Plaintiffs “bad.” Again, this is an argument that is available to the government in every single 

First Amendment challenge that has ever been or will ever be brought. It is no more relevant 

here than in any other case. 

Finally, it is worth pointing out yet another example of the FEC’s fast and loose use of 

evidence. The FEC claims that one of the Plaintiffs’ attorneys, Paul Sherman, created an email 

account for SpeechNow.org. In fact, the email account was created by Mr. Keating; Plaintiffs’ 

attorneys had nothing to do with it. The document in question (FEC Ex. 146 at SNK0327) does 

have Mr. Sherman’s name on it, but the email is clearly not “from Paul Sherman to David 

Keating” as the FEC claims. The email is from “Gmail Team [mail-noreply@gmail.com]” to 

David Keating. Mr. Sherman’s name appears only in the header above the actual email, and 

there is a very simple explanation for this. Mr. Sherman printed the email out in order to 

produce it to the FEC in August of 2008, when Plaintiffs were responding to the FEC’s 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 49 of 69
47

document requests in this case. See Declaration of Paul Sherman in Support of Plaintiffs’ Reply 

Memorandum at ¶ 3. In the process of producing documents, the individual plaintiffs forwarded 

electronic versions of any documents and emails that did not already exist in hard copy to the 

Plaintiffs’ counsel, and counsel printed them out and produced them to the FEC. Microsoft 

Outlook, counsel’s email software, automatically places the user’s name on any email printed 

from that user’s system. Id. For most of the emails, counsel managed to print them without that 

header appearing, or they simply removed the headers from the document after it was printed, 

but in this case, counsel simply did not delete the header prior to producing the email. Id. 

The FEC might have considered this possibility—or at least that there was something 

peculiar about the email—in that it is clearly from the “Gmail Team” and not Mr. Sherman, and 

it does not indicate anywhere that Mr. Sherman forwarded any email to Mr. Keating or had 

anything to do with the Gmail account at all. Mr. Sherman’s name simply appears at the top of 

the document, much like letterhead. This is not a reason to jump to the conclusion that Mr. 

Sherman set up the account for Mr. Keating, but it seems the FEC never considers any possible 

interpretation of its so-called “evidence” that varies from its preexisting convictions about what 

that evidence is supposed to prove. 

B. Whether Plaintiffs Can Speak Individually or by Using Means Other Than 

Television Advertisements Is Irrelevant. 

The FEC argues that Plaintiffs’ facts concerning the burdens of contribution limits should 

not be entered because Plaintiffs can either speak alone or speak in other ways. FEC’s 

Memorandum at 4-6. But the FEC is simply mischaracterizing the facts that Plaintiffs introduce, 

which are about the problems—resulting from the contribution limits and PAC requirements—

that Plaintiffs face in associating together in order to speak more effectively than they otherwise 

could alone. Of course, it is obviously true that the individual Plaintiffs can simply not associate 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 50 of 69
48

with one another or can do things like make fliers, yard signs, and homemade videos that a few 

insomniacs may watch at 3:00 a.m. on cable television. But the availability of other means of 

communication is irrelevant. If constraints on speech could be justified by the fact that other 

means of speech are available, then there would be no such thing as free speech. Speaking on 

television would be unprotected because billboards are available; speaking through billboards 

would lose protection because yard signs are available; posting yard signs would lose protection 

because pamphlets are available; handing out pamphlets would lose protection because face-toface conversation is available, and so on. 

As Plaintiffs have made clear, the burden is not on them to demonstrate that they cannot 

take advantage of every form of speech the FEC can imagine. See, e.g., Meyer v. Grant, 486 

U.S. at 414, 424 (1988) (“The First Amendment protects appellees’ right not only to advocate 

their cause but also to select what they believe to be the most effective means for so doing.”); 

MCFL, 479 U.S. at 255 (holding that an organization could not be required to speak in a “more 

burdensome” manner than it chose). Instead, the FEC must show that the burdens imposed by 

contribution limits do not violate the First Amendment. See WRTL II, 127 S. Ct. at 2664. 

As the Court stated in WRTL II, 

the response that a speaker should just take out a newspaper ad, or use a website, rather 

than complain that it cannot speak through a broadcast communication . . . is too glib. 

Even assuming for the sake of argument that the possibility of using a different medium 

of communication has relevance in determining the permissibility of a limitation on 

speech, newspaper ads and websites are not reasonable alternatives to broadcast speech in 

terms of impact and effectiveness. 

127 S. Ct. at 2671 n.9. The government cannot demand that speakers settle for second 

best when it comes to First Amendment rights. See Ripon Soc’y, Inc. v. Nat’l Republican Party, 

525 F.2d 567, 585 (D.C. Cir. 1975) (en banc) (plurality opinion) (“Speeches and assemblies are 

after all not ends in themselves but means to effect change through the political process. If that 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 51 of 69
49

is so, there must be a right not only to form political associations but to organize and direct them 

in the way that will make them most effective.”). Cf. Arkansas Writers' Project, Inc. v. Ragland, 

481 U.S. 221, 231 (1987) (“‘It hardly answers one person’s objection to a restriction on his 

speech that another person, outside his control, may speak for him.’”) (quoting Regan v. 

Taxation with Representation of Washington, 461 U.S. 540, 553 (1983) (Blackmun, J., 

concurring)); Va. Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 757, 

n.15 (1976) (“We are aware of no general principle that freedom of speech may be abridged 

when the speaker's listeners could come by his message by some other means . . . .”). 

Indeed, the FEC’s argument simply amounts to denying that there is such a thing as a 

right to associate and to speak as a group. But the Supreme Court has long recognized the 

fundamental importance of the right of association, both in the context of groups speaking out 

about matters related to an election, see Citizens Against Rent Control, 454 U.S. at 295, and in 

broader contexts. See, e.g., Shelton v. Tucker, 364 U.S. 479, 486 (1960) (noting that the freedom 

of association is “closely allied to freedom of speech and a right which, like free speech, lies at 

the foundation of a free society”). The FEC is free to argue on the merits that these precedents 

do not apply in the context of this case, but the Court should not simply ignore Plaintiffs’ 

proposed findings of fact because the FEC wants to make that argument. 

 Finally, the FEC attempts to rely on Buckley for the proposition that contribution limits 

are not burdensome because they only require people to spend their money on “direct political 

expression.” FEC’s Memorandum at 4. But, as stated above, this point supports the Plaintiffs’ 

case, because direct political expression in the form of independent expenditures is exactly the 

speech in which they will engage. In making the quoted statement, the Court in Buckley was 

offering reassurance that even with limits on contributions to candidates and candidate 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 52 of 69
50

committees, “direct political expression” would remain free from regulation. Buckley, 424 U.S. 

at 22. As the Court explained later: 

The Act's $1,000 contribution limitation focuses precisely on the problem of large 

campaign contributions—the narrow aspect of political association where the actuality 

and potential for corruption have been identified—while leaving persons free to engage 

in independent political expression, to associate actively through volunteering their 

services, and to assist to a limited but nonetheless substantial extent in supporting 

candidates and committees with financial resources. 

Id. at 28-29 (emphasis added). In short, the Court allowed limits on the narrow aspect of 

political association—large campaign contributions—that posed a threat of corruption only 

because the broad arena of independent political speech would remain free. Id. Now the FEC 

contends that the broad arena of independent speech and “direct political expression” is subject 

to regulation on the same grounds. But this gets the Court’s reasoning in Buckley exactly 

backwards. Accordingly, Plaintiffs’ proposed findings about the effect of contribution limits and 

PAC requirements on their ability to associate in order to engage in independent speech are 

relevant; the FEC’s proposed findings about individuals being able to speak by themselves are 

not.

C. The FEC’s Arguments About the Impact of Contribution Limits on the 

Plaintiffs Are Either Arguments About the Merits, Nitpicking Around the 

Margins of Obvious Points, Or Are Just Wrong. 

As with its other arguments, the FEC’s claim that contribution limits do not prevent 

groups from raising “significant” sums is beside the point. The FEC is simply arguing, as it has 

throughout its response briefs, that Plaintiffs bear the burden of proving that contribution limits 

make fundraising absolutely impossible. But that is not the standard, as Plaintiffs have made 

clear already. See, e.g., Davis, 128 S. Ct. at 2772 (holding unconstitutional a law because it 

burdened the “vigorous exercise of the right to use personal funds to finance campaign speech”) 

(emphasis added). 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 53 of 69
51

The FEC’s reliance on Buckley for the proposition that contribution limits simply require 

candidates and political committees to raise money from a greater number of persons does not 

change this. See FEC’s Memorandum at 6. As stated above, Buckley’s statement applied to 

candidates and groups that made large contributions to candidates, not those who only make 

independent expenditures. Indeed, Buckley upheld contribution limits on candidates and political 

committees in part on the assumption that the limits would simply channel contributions away 

from candidates into “direct political expression”—that is, into the spending in which 

SpeechNow.org will engage. See 424 U.S. at 21-22. The FEC’s argument thus amounts to the 

type of bait and switch that the Supreme Court rejected in WRTL II.

12 Buckley upheld limits on 

contributions to candidates because the limits helped prevent corruption but did not limit direct 

political expression. Yet the FEC now wants to apply those limits to SpeechNow.org, which 

does not pose concerns about corruption—because it makes only independent expenditures—but 

does engage in direct political expression. 

In any event, as demonstrated below, the specific arguments in this section rely on 

obviously irrelevant comparisons to the fundraising abilities of the largest players in the 

campaign finance world—national party committees and national politicians. Indeed, in relying 

on these examples, the FEC ends up making the Plaintiffs’ basic point about contribution limits: 

while large, well-established groups are able to raise funds under the limits, they impose much 

more significant burdens on smaller groups. The FEC’s arguments do not detract from this point 

one bit; they are just an attempt to change the subject. 

 

12 As the Court stated in WRTL II, 

It would be a constitutional “bait and switch” to conclude that corporate campaign speech may be 

banned in part because corporate issue advocacy is not, and then assert that corporate issue 

advocacy may be banned as well, pursuant to the same asserted compelling interest, through a 

broad conception of what constitutes the functional equivalent of campaign speech, or by relying 

on the inability to distinguish campaign speech from issue advocacy. 

127 S. Ct. at 2673 (emphasis removed). 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 54 of 69
52

1. The History of Political Party and Presidential Fundraising Is 

Irrelevant to the Burden That Contribution Limits Would Impose on 

SpeechNow.org. 

The FEC claims that the contribution limits do not impose a burden on SpeechNow.org 

because the national party committees have increased the number of donors since BCRA’s limits 

on soft money donations. However, as Plaintiffs pointed out earlier, this is like arguing that the 

economic downturn is meaningless for small businesses because McDonalds continues to sell 

hamburgers. The national political party committees are the largest and most sophisticated 

players in the campaign finance world. They have been operating for decades, have dedicated 

teams of professional fundraisers, extensive donors lists, and large cash reserves to devote to 

fundraising. The national political parties are the most well known “brands” in campaign 

finance, and they are necessarily associated with candidates and politicians who are constantly in 

the public eye and therefore providing the party committees with constant free publicity. 

Moreover, party committees can accept up to $28,500 annually, as compared to $5000 for PACs, 

so their ability to raise funds is obviously enhanced as compared to other groups. See 2 U.S.C. § 

441a(a)(1)(B); Price Index Increases for Expenditure and Contribution Limitations, 72 Fed. Reg. 

5294, 5295 (Feb. 5, 2007). Indeed, far from detracting from the testimony of Rodney Smith, the 

FEC’s reliance on his past fundraising successes actually confirms his point: a sophisticated 

fundraising apparatus and enormous amounts of free publicity make a difference in a group’s 

ability to raise funds. The FEC’s comparison between the national party committees and any

other group, let alone a group like SpeechNow.org, is positively ludicrous. 

Moreover, the FEC provides no context at all on which to base its claim that the increase 

in donors to the national party committees is somehow relevant to the burden that contribution 

limits impose on SpeechNow.org. For instance, the FEC does not indicate how much money the 

national party committees had to spend to increase their donor base, where those new donors 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 55 of 69
53

came from or how they were discovered or their reasons for donating. As for the FEC’s claim 

that the national party committees were not adversely affected by BCRA’s soft money limits, the 

article on which the FEC relies actually shows that “[t]he RNC’s total funding (including hard 

and soft money) was down 14 percent as compared to 2002 and the DNC’s total was down 19 

percent.” FEC Ex. 135 at 5. This amounted to a drop in funding for the DNC of roughly $30 

million and a drop in funding for the RNC of roughly $40 million. Just these decreases in 

funding would be enough to finance SpeechNow.org’s entire operations for years. In short, the 

FEC’s comparison in this section is absurd. 

2. The FEC’s Claim That Fundraising Costs Have Decreased Over Time 

Is Unsupported and Irrelevant. 

The FEC claims that fundraising costs have gone down over time, but the evidence on 

which it relies does not support its claims. The FEC simply relies on a number of quotes and 

statements from articles—all of which are inadmissible hearsay—that make the facile point that 

it is possible to raise money over the Internet. FEC’s Memorandum at 11-12. Plaintiffs do not 

dispute this obvious point, but it has nothing to do with whether contribution limits burden 

Plaintiffs’ First Amendment rights. Indeed, the FEC’s arguments in this section are as irrelevant 

as those it made about the national party committees in that it simply relies on the fundraising 

successes of presidential candidates. 

For example, Clyde Wilcox’s article on Internet fundraising focuses exclusively on how 

presidential campaigns have attempted to raise funds over time. See FEC Ex. 152. Likewise, the 

quote from Joe Trippi and the statements culled from the Washington Post article discuss how 

the presidential campaigns of Howard Dean and John Kerry, respectively, were able to raise 

large sums of money on the Internet. Thus, in relying on these examples, the FEC has simply 

managed to support Rodney Smith’s point that “most of the big money raised via the Internet has 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 56 of 69
54

been the direct result of a candidate and/or a cause benefiting from a huge amount of free 

publicity.” Smith Decl. at ¶ 42; see also FEC Ex. 15, Smith Dep. at 25:3-8 (“[In] terms of trying 

to persuade [potential donors] to make the contribution, [the Internet is] not particularly 

effective, unless you’ve got some huge amount of outside independent media exposure.”). 

Indeed, the FEC recognizes the truth of this basic point when, in a different section of its 

memorandum, it attempts to downplay Professor Milyo’s evidence that 527s in 2004 preferred 

large contributions to small ones by stating “the ‘newly formed’ groups were able to raise such 

large funds because they were closely associated with the two major political parties and their 

presidential candidates.” FEC’s Memorandum at 17. Although this does not detract from 

Professor Milyo’s point that the 527s preferred large contributions over smaller ones, it is 

nonetheless an admission that the presidential candidates and national political parties make 

fundraising much easier. 

The FEC claims that Mr. Smith’s opinions should be discounted because Mr. Smith’s 

“report presents no data which disputes that fundraising is now cheaper than it has ever been . . . 

.” FEC’s Memorandum at 13. But the FEC has presented no data that shows that fundraising is

cheaper now than it has been. Instead, the FEC simply relies on an article that concludes, based 

on the fact that a presidential campaign sent the author numerous emails in a single day, that 

fundraising on the Internet must be cheaper than by mail. FEC Ex. 152 at 7 (“On a single day in 

late February I received three separate e-mails from the Clinton campaign asking for 

contributions, and two from the Obama campaign. One of Clinton’s solicitations asked for a 

contribution of just $5. Such repeated solicitations, with such a low target contribution, would be 

financially difficult through the mail.”). In short, the FEC simply made up the claim that 

fundraising costs have gone down over time, and then claimed that Mr. Smith did not refute it. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 57 of 69
55

3. Facts Concerning the Manner in Which the Contribution Limits 

Affect Plaintiffs Are Clearly Relevant. 

The FEC criticizes the Plaintiffs’ reliance on a handful of facts showing that the burdens 

of contribution limits fall particularly hard on groups, like SpeechNow.org, that are not 

promoting high-profile issues. FEC’s Memorandum at 13-15. But the Supreme Court has made 

clear that the burdens of the campaign finance laws can fall disproportionately on smaller 

groups. See WRTL II, 127 S.Ct. at 2671 n. 9; MCFL, 479 U.S. at 254-55. And the Court has 

made clear that those with unpopular views are often most in need of First Amendment 

protections. See, e.g., Watchtower Bible & Tract Soc’y of N.Y., Inc. v. Vill. of Stratton, 536 U.S. 

150, 168 (2002) (“Even if the interest in preventing fraud could adequately support the ordinance 

insofar as it applies to commercial transactions and the solicitation of funds, that interest 

provides no support for its application . . . to enlisting support for unpopular causes.”); see also 

McIntyre v. Ohio Elections Comm’n, 514 U.S. 334, 345 n.8 (1995) (“Arguably, the disclosure 

requirement places a more significant burden on advocates of unpopular causes than on 

defenders of the status quo.”). 

As stated above, the Plaintiffs’ point is not that they are entitled to a particular 

constitutional standard because of the views they espouse. Plaintiffs are simply offering a 

explanation of why the contribution limits make fundraising particularly difficult for them. 

Indeed, the point here is simply the flip side of the obvious truth that larger, nationally known 

groups that address high-profile issues will be much more able to raise funds than groups that do 

not enjoy these attributes. In order to argue that fundraising is easy under contribution limits, the 

FEC repeatedly relies on evidence of the fundraising of national party committees and 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 58 of 69
56

presidential candidates. 13 Yet here it claims that SpeechNow.org is not permitted to make the 

point that high-profile groups are the exception, and not the norm. Plaintiffs’ proposed findings 

showing that groups without high-profile issues or free publicity have a harder time raising funds 

are clearly relevant, and the Court should enter them. 

Moreover, the FEC’s claim that Plaintiffs are suggesting that the “Constitution must 

equalize the relative financial resources or political influence of competing political actors” is 

nonsense. FEC’s Memorandum at 14. As stated above, Plaintiffs’ are not claiming a right to 

equal publicity or influence, nor are they claiming a right to use the resources of others. 

Plaintiffs are simply claiming a right to be left alone. Only in Orwellian double-speak can this 

be interpreted as a request for a subsidy. Indeed, only by assuming that regulation of speech is 

the norm can the FEC conclude that a request to be freed from regulation amounts to a request 

for special privileges. But this is not the law. See, e.g,, WRTL II, 127 S. Ct. at 2669 (stating that 

“[w]here the First Amendment is implicated, the tie goes to the speaker, not the censor”). As 

stated above, the cases on which the FEC relies in this section do not support its warped 

argument. See supra at 16. 

Contrary to the FEC’s claim, Plaintiffs’ proposed findings are not “premised on the 

notion that it would be acceptable for Congress to impose contribution limits on popular groups 

and constitutionally required for Congress to remove [those limits] for advocates of less popular 

causes.” FEC’s Memorandum at 14. Plaintiffs’ challenge is premised on the fact that 

 

13 To be sure, the FEC is not a model of consistency in its use of this kind of evidence. When evidence regarding 

candidates and contribution limits is harmful to its position, the FEC claims that evidence is irrelevant. For 

example, Plaintiffs offer the proposed finding that “[s]tate legislative candidates spend significantly less on their 

campaigns in states with contribution limits, all else constant.” Plaintiffs’ Proposed Findings of Fact at ¶ 114. One 

reason the FEC objects to this finding is that the study upon which it is based “concerns candidate spending and 

direct contribution limits; it doesn’t have anything to do with independent expenditures or groups like SpeechNow.” 

FEC's Response at 52 (emphasis in original). The FEC’s other objection is an absurd claim that Professor Milyo 

mischaracterizes the cited study. But he does no such thing; he accurately relates the study’s empirical finding 

supporting the proposed finding of fact. Compare Milyo Decl. at ¶ 65 with FEC Ex. 153 at 472 (Table A1: 

Differences in Means: Races with incumbents). 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 59 of 69
57

SpeechNow.org makes only independent expenditures and thus poses no concerns about 

corruption. But in gauging the burden of the contribution limits, it is useful and relevant for the 

court in deciding the merits of this as-applied challenge to actually understand how those 

burdens affect the Plaintiffs. In short, there is another side to the FEC’s story that the only 

relevant actors in the world of campaign finance are the national party committees and PACs that 

allegedly have no trouble raising funds, and Plaintiffs want to tell it. The Supreme Court 

typically examines the burden of laws that affect First Amendment rights on a wide spectrum of 

people, and certainly examines those burdens as they apply to plaintiffs in as-applied cases. 

There is no good reason for preventing Plaintiffs from providing information on which courts 

typically rely. 

4. The FEC Admits Plaintiffs’ Basic Facts Concerning the Importance of 

Large Contributions for Start-up Groups. 

The FEC spends much space attempting to deny the simple truth that groups prefer to 

raise large contributions over small contributions, but then it ends up admitting the basic points 

anyway. Thus, in discussing Professor Milyo’s review of the fundraising by 527s, the FEC states 

that the “fact that some of the ‘newly formed’ groups . . . received higher contributions on 

average . . . is simply a reflection of their ability to raise extremely large contributions.” FEC’s 

Memorandum at 17. The FEC then states that “[t]he older groups would no doubt have gladly 

accepted the large contributions raised by the primary groups referred to as the ‘shadow party’ 

groups, had they been able to raise such large contributions.” Id. In short, when allowed to do 

so, groups will prefer large contributions over small contributions. Add to this the FEC’s 

recognition that raising funds under contribution limits is more difficult than raising them outside 

of contribution limits, the basic, common sense points about the economics of fundraising (e.g., 

it costs money to raise money; the smaller the average contribution, the higher the costs; the only 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 60 of 69
58

ways to increase fundraising are either to add new donors or increase the size of contributions, 

etc.) and the reality that launching a new group requires seed funds, and Plaintiffs’ basic points 

about the burden of contribution limits are established. 

Plaintiffs have never claimed that these points are terribly complicated or earthshattering. As stated above, they are largely matters of simple logic and economics along with 

some basic information about the realities of fundraising. Indeed, their essential simplicity and 

obviousness are a large part of the reason Plaintiffs were prepared to have this case certified on 

the record as it existed at the preliminary injunction stage. What is surprising is the fact that the 

FEC spends so much effort to refute them. But, given its admissions of Plaintiffs’ basic points, 

the FEC’s arguments are just tinkering around the margins. 

For example, the FEC claims that Professor Milyo’s reliance on the fundraising of 527s is 

misplaced because some of them were found to have violated the law. FEC’s Memorandum at 

16. This is true, but entirely irrelevant to Professor Milyo’s point, which is simply that the 

groups demonstrated a clear preference for large contributions over smaller ones. Similarly, the 

FEC claims that those groups are not representative of 527 groups more generally. Id. at 18. But 

Professor Milyo never claimed that they were necessarily representative of all 527s. Given the 

simplicity of the basic point he was making, however, and the fact that the FEC recognizes its 

truth, this is a minor complaint. The FEC also contends that Professor Milyo fails to consider the 

many successful nonconnected PACs that have raised money under the limits. Id. at 16. But, as 

demonstrated above, the statistics on which the FEC relies actually make Plaintiffs’ point. They 

show that the average receipts of nonconnected committees during the time period the FEC cites 

ranged from roughly $54,000 to roughly $194,000 for each PAC. Comparing these numbers to 

527s demonstrates unequivocally that groups unconstrained by contribution limits can raise 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 61 of 69
59

vastly more money in short period of time than those subject to limits. See supra at 27-28. 

Indeed, both the FEC and the California FPPC, on whose report and testimony the FEC relies, 

admit precisely this point. 

The FEC also criticizes the empirical work done by Professor Milyo as 

“unrepresentative,” but ignores other tests Milyo performed that validated his conclusions 

concerning the largest 527 groups. The FEC states that “Milyo conceded in his deposition that 

‘it’s possible that these top 527 political groups are unrepresentative of the size distribution of 

contributions’ to 527 groups generally.” FEC’s Memorandum at 17-18. But Professor Milyo 

made clear that he performed other tests to check his results. Specifically, Professor Milyo 

examined a random selection of other 527 groups to verify that they exhibited a similar pattern 

and found that “the patterns [for this second group] look very similar to what I saw for large 

groups.” FEC Ex. 12 at 320:9-10. The FEC criticizes Professor Milyo for selecting groups 

based on the letters of his last name, but this is silly. See FEC’s Response at 47-48. His method 

yielded a random selection, which was all he was attempting to do. 

In sum, the FEC simply splits hairs, but the Plaintiffs’ basic point about contribution 

limits is clear: they burden the ability of groups to raise funds. 

5. The FEC’s Argument About Specialization of Labor Is Specious. 

The FEC claims that contribution limits do not “prevent individuals with different skill 

sets or resources from coming together for the purpose of disseminating campaign messages.” 

FEC’s Memorandum at 19. Again, it is true that contribution limits do not absolutely prohibit 

individuals from attempting to take advantage of specialization and divisions of labor. But 

Plaintiffs’ point was not that contribution limits absolutely prevent this from happening, but that 

they prevent individuals from “taking full and effective advantage” of specialization, economies 

of scale, and divisions of labor. See Plaintiffs’ Proposed Findings of Fact at ¶ 93. This is yet 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 62 of 69
60

another version of the FEC’s argument that if a regulation does not absolutely prohibit particular 

speech or conduct, it is not burdensome. But the FEC cannot reasonably dispute the fact that the 

contribution limits prevent SpeechNow.org and the other Plaintiffs from taking full advantage of 

Fred Young’s wealth and that they prevent Fred Young from, in turn, taking full advantage of 

David Keating’s expertise. Again, this is a simply matter of common sense. The Supreme Court 

has made clear that one major benefit of the right of association is that it allows individuals to 

make their speech more effective by joining with others. See Citizens Against Rent Control, 454 

U.S. at 295-96. The Court should enter Plaintiffs’ simple findings on this point. 

6. The FEC’s Criticisms Do Not Undermine the Basic Fact That a 

Restriction on Contributions Leaves Less Money to Devote to 

Expenditures. 

As Plaintiffs stated in their response to the FEC’s proposed findings of fact, they intend 

to rely on Citizens Against Rent Control and to argue that a limit on contributions to 

SpeechNow.org necessarily amounts to a limit on its expenditures. Indeed, as shown above and 

in Plaintiffs’ response to the FEC’s proposed findings of fact, both the FEC and the California 

FPPC are banking on contribution limits doing just that. See Plaintiffs’ Response to FEC’s 

Proposed Findings of Fact at 97 (¶ 223); Plaintiffs’ Proposed Findings of Fact at ¶ 113. The 

FEC’s own statistics show that nonconnected committees, which operate under contribution 

limits, have raised vastly less money than have 527s, which are not subject to the limits. See

supra at 27-28. As a result, the FEC’s nitpicking of Plaintiffs’ facts is pointless. The point is not 

controversial and the facts are not complicated or speculative. They are what they are, and the 

Court should enter them as findings of fact. 

In claiming otherwise, the FEC simply compares groups like SpeechNow.org to the 

national party committees, which, as stated earlier, are simply not comparable to groups like 

SpeechNow.org, let alone most groups. The FEC also attempts to cast aspersions on Professor 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 63 of 69
61

Milyo’s analysis because it relies on “a theory from an ‘undergraduate intermediate 

microeconomics textbook.’” FEC’s Memorandum at 20. The FEC’s point appears to be that if 

someone relies on fundamental principles of economics that every college student learns, one’s 

conclusions are suspect. On this theory, the FEC will next criticize bridge builders for relying on 

the insights of Sir Isaac Newton. 

Indeed, as noted above, the FEC’s primary criticism of Professor Milyo appears to be 

directed to the manner in which he wrote his report and declaration. The FEC’s complains that 

Professor Milyo’s theories are not backed up by any facts. That is true in the sections in which 

he discusses those theories, but then Professor Milyo goes on to illustrate how those theories 

apply by examining actual data, so the FEC’s claim that he examined nothing to back up his 

theories is just wrong. Certainly, Professor Milyo did not bother simply to call other people on 

the phone or have his research assistant copy quotes from their articles, as Professor Wilcox did. 

But that is not a criticism of Professor Milyo, it is a criticism of what amounts to the “position 

paper” that Professor Wilcox submitted for the FEC. See FEC Ex. 18, Wilcox Dep. at 70:19-22, 

71:11-16. 

D. Plaintiffs Agree with the FEC That the Motives of Speakers and Donors Are 

Irrelevant to This Case. 

The FEC complains about the inclusion of three proposed findings that make clear that 

the Plaintiffs do not care about access or gratitude. The point was apparently lost on the FEC 

that Plaintiffs included these facts in anticipation of the FEC’s reliance on the claim that many 

donors to independent groups are seeking access to and gratitude from candidates. In short, they 

are facts submitted in rebuttal to claims the FEC wants to make. Plaintiffs agree with the FEC 

that the motives of both speakers and donors are obviously irrelevant to the issues in this case. 

The Supreme Court made that point crystal clear in WRTL II in response to the FEC’s repeated 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 64 of 69
62

claims that WRTL’s speech should be held to be the functional equivalent of express advocacy 

because WRTL had allegedly expressed a desire elsewhere to affect the outcome of elections. 

See 127 S. Ct. at 2666, 2668. The FEC now makes the same argument here, only with the added 

twist that now it is arguing that other people’s motives are relevant to whether SpeechNow.org 

poses a threat of corruption, but somehow the Plaintiffs’ motives are not relevant to the same 

question. While Plaintiffs agree that their motives and the motives of others are irrelevant, if the 

Court is going to make findings to this effect with respect to others (which it should not) then it 

ought at least to adopt the proposed findings about the Plaintiffs’ motives. 

E. The FEC’s Arguments About the Burdens of the PAC Requirements Are All 

Arguments About the Merits, Not Disputes About Facts. 

The Supreme Court has recognized repeatedly that “PACs impose well-documented and 

onerous burdens, particularly on small nonprofits.” WRTL II, 127 S. Ct. at 2671 n.9 (2007). See 

also Austin v. Mich. State Chamber of Commerce, 494 U.S. 652, 658 (1990) (noting that PAC 

registration and reporting requirements “burden expressive activity.”); MCFL, 479 U.S. at 254-

55 (1986) (PAC regulations “require a far more complex and formalized organization than many 

small groups could manage.”) (plurality opinion). Relying on these cases, Plaintiffs will argue 

that the organizational, administrative, and continuous reporting requirements for PACs 

unconstitutionally burden Plaintiffs’ rights to speech and association. Accordingly, Plaintiffs 

included in their proposed findings a straightforward recitation of the basic facts that 

demonstrate how the PAC requirements operate and the burdens they impose. For the most part, 

the FEC did not seriously dispute the truth of these facts. See FEC’s Response at 60-68. 

Nevertheless, the FEC argues that many of these facts are irrelevant or otherwise improper as 

findings of fact. All of those claims are baseless. 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 65 of 69
63

First, the FEC contends that Mr. Keating’s view that being labeled a PAC will make it 

more difficult to raise money is irrelevant. FEC’s Memorandum at 24-25. Mr. Keating’s view 

was included in two proposed facts that simply make clear one of the reasons he does not want 

SpeechNow.org to have to register as a PAC. Plaintiffs’ Proposed Findings of Fact at ¶¶ 133-34. 

Plaintiffs offered them as Mr. Keating’s views, based on his experiences, not as absolute facts 

that apply to all groups in all circumstances. They provide additional background information 

that help to explain Mr. Keating’s reasons for creating SpeechNow.org. The FEC is thus 

attacking these two simple points out of context. Moreover, the FEC’s claim that Mr. Keating’s 

views are “speculative” misperceives the reasons Plaintiffs included them. They are David 

Keating’s views, based on his experiences; there is thus nothing “speculative” about them. 

Indeed, Mr. Keating’s view that many people have negative views of PACs is hardly outlandish. 

Second, the FEC claims that the “fulfillment of its statutory duty to provide assistance to 

political committees” is not evidence of burden. See FEC’s Memorandum at 26-27. The FEC 

essentially argues that it is statutorily required to try to help groups comply with the laws and 

that its efforts alleviate the burden of compliance, not increase it. But this argument ignores the 

point of highlighting the FEC’s efforts to help people comply. Whether the FEC intends its 

efforts to alleviate the burden, those efforts are directly proportional to the burden that the laws 

impose. As an example, if the FEC published only one page of instructions for its forms and 

never received any calls to its help line, that would say something very different about the 

burden of compliance than if it published a one-hundred page manual, held regular seminars for 

those who must comply, and received thousands of calls, as the FEC in fact does. See, e.g., 

Plaintiffs’ Proposed Findings of Fact at ¶¶ 147, 148, 150. Indeed, there is perhaps no better 

evidence to demonstrate the amount of instruction the public requires to understand and comply 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 66 of 69
64

with these laws than the FEC itself. The fact that the FEC is statutorily required to provide this 

assistance to the public does not change the fact that the FEC decides to give the amount of 

instruction that is proportional to the complexities of the law. The requirements for PACs 

themselves are mandated by statute, but that did not change the Supreme Court’s conclusion in 

MCFL that these requirements are burdensome. 479 U.S. at 254-55. 

Finally, the FEC claims that the requirements for PACs are not burdensome because its 

own employee, Greg Scott, said they are not, and because Mr. Keating stated once that he can 

“handle” those requirements. FEC’s Memorandum at 27-28. But the views of FEC employees 

and Mr. Keating’s off-hand statements do not render the requirements for PACs not burdensome 

as a matter of law. If it were this simple for the FEC to demonstrate that the laws were not 

burdensome, the Supreme Court would never have concluded that they were. See, e.g., WRTL II, 

127 S. Ct. at 2664; MCFL, 479 U.S. at 254-55. The question in constitutional cases is whether 

laws impose unjustified burdens as a matter of law, not whether it is possible for particular 

individuals to comply with them. See, e.g., Davis, 128 S. Ct. at 2772 (holding unconstitutional a 

law under which “the vigorous exercise of the right to use personal funds to finance campaign 

speech produces fundraising advantages for opponents in the competitive context of electoral 

politics.”) (emphasis added). 

CONCLUSION 

For the foregoing reasons, the Court should enter the Plaintiffs’ proposed findings of fact 

and those of the FEC’s to which Plaintiffs did not object. 

Dated: December 12, 2008. 

Respectfully submitted, 

/s/ Steven M. Simpson

Steven M. Simpson (DC Bar No. 462553) 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 67 of 69
65

William H. Mellor (DC Bar No. 462072) 

Robert Gall (DC Bar No. 482476) 

Paul M. Sherman (DC Bar No. 978663) 

Robert Frommer (DC Bar No. 497308)* 

INSTITUTE FOR JUSTICE

901 N. Glebe Road, Suite 900 

Arlington, VA 22203 

Tel: (703) 682-9320 

Fax: (703) 682-9321 

Email: ssimpson@ij.org 

Stephen M. Hoersting† 

Bradley A. Smith† 

CENTER FOR COMPETITIVE POLITICS

124 W. Street South, Suite 201 

Alexandria, VA 22314 

Tel: (703) 894-6800 

Email: shoersting@campaignfreedom.org, 

BSmith@law.capital.edu 

Attorneys for Plaintiffs

*Admission pending 

† Admitted Pro Hac Vice 

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 68 of 69
66

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 12th Day of December 2008, a true and correct copy of 

Plaintiffs’ REPLY MEMORANDUM IN SUPPORT OF THEIR PROPOSED FINDINGS OF 

FACT FOR CERTIFICATION along with the DECLARATIONS OF RODNEY SMITH, PAUL 

M. SHERMAN, AND ROBERT GALL was filed electronically using the court’s ECF system 

and sent via the ECF electronic notification system to the following counsel of record: 

Robert W. Bonham, III 

David B. Kolker 

Steve N. Hajjar 

Kevin Deeley 

FEDERAL ELECTION COMMISSION

999 E. Street, N.W. 

Washington, DC 20463 

 /s/ Steven M. Simpson

Case 1:08-cv-00248-JR Document 62 Filed 12/12/2008 Page 69 of 69
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

____________________________________ 

 ) 

SPEECHNOW.ORG, ) 

DAVID KEATING, ) 

FRED M. YOUNG, JR., ) 

EDWARD H. CRANE, III, ) 

BRAD RUSSO, and ) 

SCOTT BURKHARDT ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civil Case No. 1:08-cv-00248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) 

 ) 

 Defendant. ) 

____________________________________) 

_______________________________________________________

DECLARATION OF RODNEY SMITH IN SUPPORT OF 

OF PLAINTIFFS’ REPLY MEMORANDUM IN SUPPORT OF THEIR 

PROPOSED FINDINGS OF FACT FOR CERTIFICATION

_______________________________________________________

I, RODNEY SMITH, declare under penalty of perjury that the following is true: 

1. I am a citizen of the United States, a resident of the District of Columbia, and over the 

age of 18 years. I make this declaration in support of Plaintiffs’ Reply Memorandum in Support 

of Their Proposed Findings of Fact for Certification under 2 U.S.C. § 437h. 

2. I am being compensated for my work in this case at a rate of $250 an hour. When 

Steve Simpson at the Institute for Justice first contacted me about serving as an expert witness in 

this matter, he offered to compensate me for my time spent on the case, but I declined and said 

Case 1:08-cv-00248-JR Document 62-2 Filed 12/12/2008 Page 1 of 3
2

that I would not charge for my time. My reason for declining compensation was that I wanted to 

do the project pro bono because I believe in the right of people to speak freely about politics. 

3. Mr. Simpson continued to offer to pay me even after I wrote my report for the case, 

pointing out that being deposed would take time and that Plaintiffs’ counsel felt it was only fair 

that I be paid. After considering the issue more and thinking about the time I was spending on 

the case, I decided to accept compensation in the form of $250 an hour. I had never served as an 

expert witness before and did not fully appreciate the time I would have to spend, and, frankly, I 

felt that it was very decent of Plaintiffs’ counsel to offer to pay me, so I decided to accept the 

offer. 

4. Because I did not decide to accept compensation until the day before I was deposed, I 

did not receive any payments until after my deposition. To date, the amount of compensation I 

have received for my work on this case is $5000 for 20 hours of work; this includes the time I 

spent at my deposition and preparing for it. I don’t expect to receive any more payment for work 

on this case. 

5. I understand that the FEC has said that I did not include a list of all of my 

publications during the last ten years in my expert report. The only thing I’ve written that I 

consider substantive enough in that period to be called a “publication” is my book, which forms 

the basis of my expert report. My report clearly states that it is based on my book on page 1; the 

title of book appears there and in my curriculum vita. 

6. The only other things I recall writing – besides work-related materials like direct-mail 

pieces and phone scripts – in the last ten years were two op-ed pieces I wrote for the Washington 

Times. (An op-ed that I wrote for the Washington Post was published just over ten years before 

my report was submitted). I don’t think of it as a “publication,” but I also filed, through my 

Case 1:08-cv-00248-JR Document 62-2 Filed 12/12/2008 Page 2 of 3
Case 1:08-cv-00248-JR Document 62-2 Filed 12/12/2008 Page 3 of 3
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

____________________________________ 

 ) 

SPEECHNOW.ORG, ) 

DAVID KEATING, ) 

FRED M. YOUNG, JR., ) 

EDWARD H. CRANE, III, ) 

BRAD RUSSO, and ) 

SCOTT BURKHARDT ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civil Case No. 1:08-cv-00248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) 

 ) 

 Defendant. ) 

____________________________________) 

_______________________________________________________

DECLARATION OF PAUL M. SHERMAN IN SUPPORT 

OF PLAINTIFFS’ REPLY MEMORANDUM IN SUPPORT OF THEIR 

PROPOSED FINDINGS OF FACT FOR CERTIFICATION 

_______________________________________________________

1. I am an attorney representing the plaintiffs in the above-captioned matter. I am a 

member in good standing of the Bar of the District of Columbia and have been admitted to the 

United States District Court for the District of Columbia. I make this declaration based upon my 

own knowledge and in support of Plaintiffs’ Memorandum in Support of Their Proposed 

Findings of Fact for Certification. 

2. In the FEC’s Memorandum in Response to Plaintiffs’ Proposed Findings of Fact, the 

FEC cites an email that I purportedly sent to David Keating as evidence of “the creation of a 

SpeechNow email account at gmail.com by one of SpeechNow’s attorneys.” FEC’s Memorandum 

at 2.

Case 1:08-cv-00248-JR Document 62-3 Filed 12/12/2008 Page 1 of 6
Case 1:08-cv-00248-JR Document 62-3 Filed 12/12/2008 Page 2 of 6
Sherman Declaration 

Exhibit A 

Case 1:08-cv-00248-JR Document 62-3 Filed 12/12/2008 Page 3 of 6
Case 1:08-cv-00248-JR Document 62-3 Filed 12/12/2008 Page 4 of 6
Sherman Declaration 

Exhibit B 

Case 1:08-cv-00248-JR Document 62-3 Filed 12/12/2008 Page 5 of 6
Case 1:08-cv-00248-JR Document 62-3 Filed 12/12/2008 Page 6 of 6
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

____________________________________ 

 ) 

SPEECHNOW.ORG, ) 

DAVID KEATING, )

FRED M. YOUNG, JR., ) 

EDWARD H. CRANE, III, ) 

BRAD RUSSO, and ) 

SCOTT BURKHARDT ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civil Case No. 1:08-cv-00248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) 

 ) 

 Defendant. ) 

____________________________________) 

_______________________________________________________

DECLARATION OF ROBERT GALL IN SUPPORT 

OF PLAINTIFFS’ REPLY MEMORANDUM IN SUPPORT OF THEIR 

PROPOSED FINDINGS OF FACT FOR CERTIFICATION

_______________________________________________________

I, ROBERT GALL, declare under penalty of perjury that the following is true: 

1. I am a citizen of the United States, a resident of the District of Columbia, and over the 

age of 18 years. I make this declaration in support of Plaintiffs’ Reply Memorandum in Support 

of Their Proposed Findings of Fact for Certification under 2 U.S.C. § 437h. 

2. I am an attorney at the Institute for Justice; I represent the Plaintiffs in this matter. 

On September 18, 2008, I defended the deposition of Rodney Smith, one of Plaintiffs’ expert 

witnesses. That deposition took place at a conference room in the office of the FEC’s general 

counsel. 

Case 1:08-cv-00248-JR Document 62-4 Filed 12/12/2008 Page 1 of 3
2

3. Just before the start of the deposition, as I was reviewing copies of Mr. Smith’s 

subpoenaed documents that had been produced to the FEC, I realized that we may not have 

provided the FEC with a copy of one of Mr. Smith’s drafts of his expert report. I immediately 

contacted my colleagues and asked them to determine whether that draft had been produced and 

asked them to email it to the FEC’s counsel if it had not. At 10:03 a.m., my colleague Paul 

Sherman e-mailed a copy to the FEC’s counsel. 

4. The first break in the deposition was at 10:35 a.m. At that time, I checked my 

Blackberry and saw Mr. Sherman’s e-mail. Mr. Hajjar, who was taking the deposition, and his 

co-counsel had already left the room. When they returned, I told them that we had just produced 

the draft report. Mr. Hajjar indicated that he knew that, and I believe that he had at least one 

printed-out copy of the draft report with him. I told him that we had inadvertently not produced 

the draft on September 16, 2008, when we produced the other documents responsive to the 

FEC’s subpoena of Mr. Smith’s documents. I also told him that he and his colleagues were free 

to take as much time as necessary to review the draft report, and that Mr. Smith and I wouldn’t 

leave until they had had enough time to review it and ask questions about it. I assured him that 

that the changes between the draft report and the final report were minor. 

5. Despite my willingness to provide extra time to review the draft report and to extend 

the deposition if necessary, Mr. Hajjar and his colleagues did not take me up on my offer of extra 

time. I do not recall Mr. Hajjar complaining to me about the late production, and he certainly did 

not state, either on or off the record, that he would need to carry over the deposition to another 

day. Instead, he ended the deposition at 4:37 p.m. 

6. I certify and declare under penalty of perjury under the laws of the United States of 

America that the foregoing is true and correct to the best of my knowledge and belief. 

Case 1:08-cv-00248-JR Document 62-4 Filed 12/12/2008 Page 2 of 3
Case 1:08-cv-00248-JR Document 62-4 Filed 12/12/2008 Page 3 of 3