UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

___________________________________ 

 ) 

CHRIS VAN HOLLEN, ) 

) Civ. No. 1:11-cv-00766 (ABJ) 

 Plaintiff, ) 

 v. ) 

 ) REPLY 

FEDERAL ELECTION COMMISSION, ) 

et al., ) 

 ) 

 Defendants. ) 

___________________________________ ) 

DEFENDANT FEDERAL ELECTION COMMISSION’S REPLY 

IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT 

Anthony Herman (D.C. Bar No. 424643) 

General Counsel 

David Kolker (D.C. Bar No. 394558) 

Associate General Counsel 

Harry J. Summers 

Assistant General Counsel 

Holly J. Baker 

Attorney 

Seth Nesin 

Attorney 

COUNSEL FOR DEFENDANT 

FEDERAL ELECTION COMMISSION 

999 E Street, NW 

Washington, DC 20463 

Telephone: (202) 694-1650 

September 23, 2011 Fax: (202) 219-0260 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 1 of 29
i

TABLE OF CONTENTS 

Page 

I. THE COMMISSION IS NOT FORECLOSED FROM ARGUING 

THAT THE STATUTE IS AMBIGUOUS ....................................................................2 

A. An Agency Is Never Foreclosed from Asserting Statutory 

Ambiguity During Chevron’s Step One Analysis .............................................3 

B. The Commission Made Clear in Its Rulemakings That It Viewed 

the Relevant Statutory Language as Ambiguous ...............................................4

II. BCRA DOES NOT SPEAK DIRECTLY TO THE APPROPRIATE 

DISCLOSURE FOR CORPORATIONS AND LABOR 

ORGANIZATIONS ENGAGED IN ELECTIONEERING 

COMMUNICATIONS ..................................................................................................6 

A. Congress Could Not Have Both Prohibited an Activity and Yet 

Spoken Directly to the Question of How It Should Be Reported ......................7 

B. Van Hollen Effectively Concedes That Interpreting the Statutory 

 Term “Contributor” Is an Exercise in Line Drawing ........................................9 

 

C. Congress Applied the Electioneering Communication Disclosure 

Requirements to a Very Limited Number of Corporations, and 

to No Labor Unions .........................................................................................10 

III. THE COMMISSION’S REGULATION GOVERNING ELECTIONEERING 

COMMUNICATION DISCLOSURE BY CORPORATIONS AND 

UNIONS IS A REASONABLE INTERPRETATION OF THE STATUTE ..............12 

A. The Commission Reasonably Relied Upon Rulemaking Evidence 

of the Burdens Associated with Disclosure by Corporations and Unions .......13 

B. The Reasonableness of the Regulation Challenged Here Can Only Be 

Judged Based Upon the Information Available to the Commission at the 

Time the Regulation Was Promulgated ...........................................................17 

C. The Court Should Consider Congress’s Refusal to Pass the DISCLOSE 

Act in Evaluating Whether the Commission’s Interpretation of the Statute 

Was Reasonable ...............................................................................................18 

IV. REMAND TO THE COMMISSION, NOT VACATUR, IS THE 

APPROPRIATE REMEDY IF THE COURT HOLDS THAT THE 

REGULATION IS CONTRARY TO LAW ................................................................19 

CONCLUSION ........................................................................................................................23 

 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 2 of 29
ii

TABLE OF AUTHORITIES 

 Page 

Allied-Signal, Inc. v. NRC, 988 F.2d 146 (D.C. Cir. 1993) .....................................................19 

Arch Chemicals, Inc. v. United States, 64 Fed. Cl. 380 (2005) .................................................6 

Arkansas AFL-CIO v. F.C.C., 11 F.3d 1430 (8th Cir. 1993) .....................................................3 

Ass’n of Nat. Advertisers, Inc. v. FTC, 627 F.2d 1151 (D.C. Cir. 1979) .................................15 

Bank of America, N.A. v. F.D.I.C., 244 F.3d 1309 (11th Cir. 2001) .....................................3, 4 

Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (1988) .........................................................6 

Bowles v. Willingham, 321 U.S. 503 (1944) ............................................................................15 

Business Roundtable v. SEC, 905 F.2d 406 (D.C. Cir. 1990) ....................................................3

Catawba Cnty., N.C. v. EPA, 571 F.3d 20 (D.C. Cir. 2009)......................................................3 

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

467 U.S. 837 (1984) ................................................................................................... passim

Citizens United v. FEC, 588 U.S. __, 130 S. Ct. 876 (2010) ...................................................17 

Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075 (D.C. Cir. 1996) ......................................................7 

Esch v. Yeutter, 876 F.2d 976 (D.C. Cir. 1989) .......................................................................18 

FEC v. Mass. Citizens for Life, Inc., 479 U.S. 238 (1986) ......................................................11 

FEC v. Nat’l Rifle Ass’n, 254 F.3d 173 (D.C. Cir. 2001) ........................................................12 

*FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) .............................................1, 5, 9 

Florida Power & Light Co. v. Lorion, 470 U.S. 729 (1985) .................................................. 19 

Gardner v. Grandolsky, 585 F.3d 786 (3d Cir. 2009) ...............................................................6 

Gatewood v. Outlaw, 560 F.3d 843 (8th Cir.), cert. denied, 130 S. Ct. 490 (2009) ..................6 

Handley v. Chapman, 587 F.3d 273 (5th Cir. 2009), cert. denied, 131 S. Ct. 71 (2010) ..........6 

Hayden v. Pataki, 449 F.3d 305 (2d Cir. 2006) .........................................................................8 

Home Box Office, Inc. v. F.C.C., 567 F.2d 9 (D.C. Cir. 1977) ................................................16 

Licon v. Ledezma, 638 F.3d 1303 (10th Cir. 2011) ...................................................................6 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 3 of 29
iii

Massachusetts v. EPA, 549 U.S. 497 (2007) .........................................................................7, 8 

Mass. Trustees v. United States, 377 U.S. 235 (1964)...............................................................4 

McConnell v. FEC, 540 U.S. 93 (2003) .............................................................................11, 21 

North Carolina Comm’n of Indian Affairs v. United States Dep’t of Labor, 725 F.2d 238 

(4th Cir. 1984) .................................................................................................................. 3-4 

Pa. Dep’t of Corrections v. Yeskey, 524 U.S. 206 (1998) .........................................................7 

Portland Cement Ass’n v Ruckelshaus, 486 F. 2d 375 (D.C. Cir. 1973) .................................16

Railway Labor Executives’ Ass’n v. Interstate Commerce Comm’n, 784 F.2d 959 

 (9th Cir. 1986) .....................................................................................................................3 

Reytblatt v. NRC, 105 F.3d 715 (D.C. Cir. 1997) ....................................................................18 

SEC v. Chenery Corp., 318 U.S. 80 (1943) ...........................................................................3, 4 

Shays v. FEC, 337 F. Supp. 28 (D.D.C. 2004) ............................................................20, 21, 22 

Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) .....................................................................21, 22 

Shays v. FEC, 508 F. Supp. 2d 10 (D.D.C. 2007) ...................................................................22 

Shays v. FEC, 528 F.3d 914 (D.C. Cir. 2008) .........................................................................22 

United Video, Inc. v. F.C.C., 890 F.2d 1173 (D.C. Cir. 1989) ..................................................4 

Vill. of Barrington, Ill. v. Surface Transp. Bd., 636 F.3d 650 (D.C. Cir. 2011) ....................3, 6 

WorldCom, Inc. v. FCC, 288 F.3d 429 (D.C. Cir. 2002) .........................................................20 

Statutes and Regulations 

Administrative Procedure Act, 5 U.S.C. §§ 551-706 ..............................................1, 15, 16, 21 

Bipartisan Campaign Reform Act of 2002, Pub. L. No. 107-155, 116 Stat. 81 (2002) ............ 1 

Federal Election Campaign Act of 1971, 2 U.S.C. §§ 431-57 ...................................................1 

2 U.S.C. § 431(8) .......................................................................................................................9 

2 U.S.C. § 434(f) ....................................................................................................................5, 9 

*2 U.S.C. § 434(f)(2) .............................................................................................................5, 9 

2 U.S.C. § 434(f)(2)(E) ............................................................................................................15 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 4 of 29
iv

5 U.S.C. § 553(c) .....................................................................................................................15 

26 U.S.C. § 501(c)(3) ...............................................................................................................16 

26 U.S.C. § 501(c)(4) ...................................................................................................11, 12, 16 

26 U.S.C. § 527 ..................................................................................................................11, 12 

42 U.S.C. § 12131(1)(B) ...........................................................................................................7 

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

*11 C.F.R. § 104.20(c)(9) ................................................................................................ passim

BCRA § 402(c) ........................................................................................................................21 

Administrative Materials 

67 Fed. Reg. 49,064 (July 29, 2002) ........................................................................................21 

68 Fed. Reg. 404 (Jan. 3, 2003) .........................................................................................5, 21 

*Final Rule and Explanation and Justification on Electioneering Communications, 

11 C.F.R. Part 104, 114, 72 Fed. Reg. 72,899 (Dec. 26, 2007) .................................2, 5, 15 

Miscellaneous 

DISCLOSE Act, H.R. 5175 (2010) and S. 3295 (2010) ..........................................................18 

156 Cong. Rec. H4798 (daily ed. June 24, 2010) ....................................................................19 

156 Cong. Rec. S3632 (daily ed. May 12, 2010) .....................................................................19 

Bureau of Labor Statistics, News Release (Jan. 21, 2011), 

http://www.bls.gov/news.release/pdf/union2.pdf ..............................................................11 

Cambridge Advanced Learner’s Dictionary, 

http://dictionary.cambridge.org/dictionary/british/contributor ..........................................14 

Charities & Other Tax-Exempt Organizations Statistics, 

http://www.irs.gov/pub/irs-soi/08eo04.xls...................................................................10, 12 

Charities & Other Tax-Exempt Organizations Statistics, 

http://www.irs.gov/pub/irs-soi/08eo03.xls............................................................. 10, 11-12 

FEC Disclosure Reports, www.fec.gov/finance/disclosure/adv-search.shtml .........................12 

The Free Dictionary. http://legal-dictionary.thefreedictionary.com/contributor .....................14 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 5 of 29
v

Oxford Advanced Learners Dictionary, 

http://www.oxfordadvancedlearnersdictionary.com/dictionary/contributor ............... 13-14 

Political Organization Disclosure, 

http://forms.irs.gov/politicalOrgsSearch/search/gotoAdvanced8871Search.action ..........12 

Statistics of U.S. Businesses, 

http://www2.census.gov/econ/susb/data/2008/us_state_totals_2008.xls ...........................10 

Unions of the AFL-CIO, http://www.aflcio.org/aboutus/unions .............................................11 

 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 6 of 29
In its opening brief, the Federal Election Commission (“Commission” or “FEC”) showed 

that its electioneering communication disclosure regulation reasonably fills a gap in the Federal 

Election Campaign Act (“FECA” or “Act”), 2 U.S.C. §§ 431-57, that was exacerbated by FEC v. 

Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) (“WRTL”), which held that corporations have 

a constitutional right to finance communications previously prohibited by the Bipartisan 

Campaign Reform Act of 2002, Pub. L. No. 107-155, 116 Stat. 81 (2002) (“BCRA”). After 

careful consideration of an extensive rulemaking record, the Commission chose a middle course 

that balances the importance of electioneering disclosure with First Amendment concerns. Thus, 

the regulation at 11 C.F.R. § 104.20(c)(9) both reasonably interprets the statute and obeys the 

constitutional holding in WRTL. The Commission is entitled to summary judgment under the 

highly deferential standard of review applicable to this challenge under the Administrative 

Procedure Act (“APA”), 5 U.S.C. § 551-706 and Chevron U.S.A., Inc. v. Natural Resources 

Defense Council, Inc., 467 U.S. 837 (1984). 

Plaintiff Chris Van Hollen argues that the Commission cannot rely on the statute’s 

ambiguity because the 2007 rulemaking did not expressly point to that ambiguity, but this 

Court’s Chevron step one analysis cannot be constrained by an agency’s rulemaking 

commentary; in any event, the Commission made clear in both the 2007 rulemaking and its 2003 

predecessor that it viewed the statute as ambiguous. Plaintiff also argues that the statute is not 

ambiguous, but when BCRA was enacted the disclosure rules at issue did not even apply to the 

vast majority of corporations or to any labor unions: those entities were barred from using their 

general treasury funds to make electioneering communications. Moreover, the statutory terms at 

issue (e.g., “contributors”) are plainly susceptible to multiple interpretations. And despite 

plaintiff’s claim that the FEC had no basis to consider in its rulemaking the burden on the 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 7 of 29
2 

millions of newly-regulated entities to which the disclosure requirements would soon apply, the 

rulemaking record provides ample grounds to support the agency’s conclusion that requiring 

these entities to report all their sources of funds would be unduly burdensome. 

I. THE COMMISSION IS NOT FORECLOSED FROM ARGUING THAT THE 

STATUTE IS AMBIGUOUS 

As the Commission explained in its opening brief, this Court reviews the regulation at 

issue in this case using Chevron’s two-step framework. (See Defendant Federal Election 

Commission’s Memorandum of Points and Authorities in Support of Its Motion for Summary 

Judgment and in Opposition to Plaintiff’s Motion for Summary Judgment (“FEC Br.”) at 18-20 

(Doc. # 24).) The first step asks whether Congress’s intent was “unambiguously expressed.” 

Chevron, 467 U.S. at 843. An agency has the authority to promulgate a regulation when the 

statute is ambiguous, or if the statute has a “gap left, implicitly or explicitly, by Congress.” Id.

at 844. 

 In response to the Commission’s showing that the statute is ambiguous (FEC Br. at 

18-28), plaintiff claims that the Commission is foreclosed from even making this argument 

because, according to Van Hollen, the Commission failed to specifically rely on that ambiguity 

during the rulemaking in 2007. (See Reply to Defendant FEC’s Opposition to Plaintiff’s Motion 

for Summary Judgment and Opposition to Defendant FEC’s Cross-Motion for Summary 

Judgment (“Pl’s Reply”) at 1-2 (Doc. # 24) (citing Final Rule and Explanation and Justification 

on Electioneering Communications, 11 C.F.R. Part 104, 114, 72 Fed. Reg. 72,899 (Dec. 26, 

2007) (“2007 E&J”).) Van Hollen accuses the Commission of impermissible “post hoc 

rationalizations” (Pl’s Reply at 2), but this cramped, formalistic argument is legally and factually 

incorrect. 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 8 of 29
3 

A. An Agency Is Never Foreclosed from Asserting Statutory Ambiguity 

During Chevron’s Step One Analysis 

Van Hollen’s “post hoc rationalization” argument must fail because it is the Court, not 

the administrative agency, that determines whether statutory language is ambiguous. See 

Chevron, 467 U.S. at 843 n.9 (“The judiciary is the final authority on issues of statutory 

construction”); Vill. of Barrington, Ill. v. Surface Transp. Bd., 636 F.3d 650, 659 (D.C. Cir. 

2011) (“At this first step of the Chevron analysis we ‘employ[ ] traditional tools of statutory 

construction,’ ... to determine whether Congress has ‘unambiguously foreclosed the agency's 

statutory interpretation.’” (quoting Catawba Cnty., N.C. v. EPA, 571 F.3d 20, 35 (D.C. Cir. 

2009) (internal citation and quotation marks omitted)). 

Van Hollen’s argument relies on SEC v. Chenery Corp., which held that “[t]he grounds 

upon which an administrative order must be judged are those upon which the record discloses 

that its action was based.” 318 U.S. 80, 87 (1943). But “the Chenery principle does not apply to 

agency justifications or positions put forward under the first step of the Chevron analysis.” Bank 

of America, N.A. v. F.D.I.C., 244 F.3d 1309, 1319-20 (11th Cir. 2001) (surveying cases and 

finding that no circuit addressing the issue had held that the Chenery principle applied to pure 

statutory interpretation like the Chevron step one analysis);1 see also Arkansas AFL-CIO v. 

F.C.C., 11 F.3d 1430, 1440 (8th Cir. 1993); Railway Labor Executives’ Ass’n v. I.C.C., 784 F.2d 

959, 969 (9th Cir. 1986); North Carolina Comm’n of Indian Affairs v. U.S. Dep’t of Labor, 725 

                                                           

1

 Bank of America cites a single decision, from the D.C. Circuit, in which the Chenery

principle was applied at Chevron step one. See Bank of America, N.A., 244 F.3d at 1320-21 

(citing Business Roundtable v. SEC, 905 F.2d 406, 407 (D.C. Cir. 1990)). Business Roundtable 

was unique, however, because the agency had promulgated a regulation under the authority of 

one statute, but then argued in litigation that it had that authority based on a completely different 

statute. Business Roundtable, 905 F.2d at 417. This case involves a single statute and bears no 

resemblance to Business Roundtable, and no other court appears to have applied Chenery to a 

Chevron step one analysis. 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 9 of 29
4 

F.2d 238, 240 (4th Cir. 1984). Indeed, even when an agency indicates during its rulemaking that 

a statute is unambiguous, it is not prevented from taking the opposite position during litigation. 

Bank of America, N.A., 244 F.3d at 1318-19. 

In aiding courts in their determination of whether a statute is ambiguous, an agency’s 

position during a rulemaking is simply irrelevant. The Chenery rule has two related purposes. 

One “purpose of Chenery is to insure that courts do not trespass on agency discretion.” United 

Video, Inc. v. F.C.C., 890 F.2d 1173, 1190 (D.C. Cir. 1989); see also Chenery, 318 U.S. at 88 

(“[A]n appellate court cannot intrude upon the domain which Congress has exclusively entrusted 

to an administrative agency.”). The other purpose is to prevent an agency from initially using 

faulty criteria, then later defending on different criteria, thereby shielding its original reasoning 

from public scrutiny. United Video, 890 F.2d at 1190 (“Chenery also serves to insure that 

administrative determinations are ‘made with relevant criteria in mind and in a proper procedural 

manner.’” (quoting Massachusetts Trustees v. United States, 377 U.S. 235, 248 (1964)). The 

post hoc rationalization doctrine is irrelevant to the first of these purposes because it has nothing 

to do with judicial respect for an agency’s exercise of the discretion within its realm of expertise. 

Likewise, the post hoc doctrine is irrelevant to the second Chenery purpose when the question at 

hand is the quintessentially judicial task of deciding whether statutory language is ambiguous 

rather than whether an administrative agency has properly applied the law and weighed the 

relevant evidence. In sum, the rule against post hoc rationalization has no application to the 

Commission’s arguments about why the relevant BCRA provision is ambiguous. 

B. The Commission Made Clear in Its Rulemakings That It Viewed the 

Relevant Statutory Language as Ambiguous 

Even if the Commission’s statements at the administrative level regarding the statute’s 

ambiguity were relevant to what it could argue here at Chevron step one, the underlying 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 10 of 29
5 

rulemakings indicate the Commission’s view that 2 U.S.C. § 434(f) is ambiguous. The 

Commission stated in the 2007 E&J for 11 C.F.R. § 104.20(c)(9) that “Congress did not 

expressly address the consequences for the reporting provisions in the event of a successful as 

applied challenge to the funding restrictions. Thus, the Commission cannot conclude that 

Congress has spoken to this issue.” 72 Fed. Reg. at 72,901. The Commission considered 

multiple alternative regulations and contemplated which alternative was “more consistent with 

Congressional intent.” Id. Commenters supported various alternatives to fill the gap, 

underlining the ambiguity. Id. at 72900-01 (discussing the “divided” comments received in 

support of each proposed alternative and the commenters’ differing views on preferred policies 

and the Commission’s authority). Had the Commission believed that Congress had 

unambiguously spoken to the precise issue in 2 U.S.C. § 434(f)(2), none of that would have been 

necessary. 

 Furthermore, in its original 2003 rulemaking prior to WRTL, the Commission had 

addressed the ambiguity in the terms “contributors” and “contributed” in section 434(f)(2) and 

noted that BCRA neither used nor amended the term “contribution” as it had been defined in 

FECA. See FEC Br. at 19-20; see also 68 Fed. Reg. 404, 413 (Jan. 3, 2003). To avoid 

confusion, the original regulations were drafted using the terms “donor” and “donated” rather 

than “contributor” and “contributed.” Id. When the Commission revised its regulations in 2007, 

it continued to use the terms “donor” and “donated” in 11 C.F.R. § 104.20(c), making evident 

that it had not changed its position about whether the statute is ambiguous.2

 In any event, 

addressing this matter in the 2003 predecessor rule alone suffices to rebut plaintiff’s post hoc 

                                                           

2 See also Gold, AFL-CIO, Hearing Comments (Administrative Record (“AR”) Tab 35, 

VH0645) (“The Commission in its reporting regulations appropriately corrected that terminology 

[in the statute] to donors who donated funds because we are not talking about contributions 

within the meaning of the [A]ct.”); 2007 E&J, 72 Fed. Reg. at 72,911. 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 11 of 29
6 

argument. See Arch Chemicals, Inc. v. U.S., 64 Fed. Cl. 380, 387 (2005) (permitting as part of 

administrative record a report from a previous related proceeding since that could not contain a 

post hoc rationalization); see also Gatewood v. Outlaw, 560 F.3d 843, 847 (8th Cir.), cert denied, 

130 S. Ct. 490 (2009) (court can consider prior interim rules, program statements, and litigation 

positions “to discern the reasons for the agency’s final rule”); Handley v. Chapman, 587 F.3d 

273, 282 (5th Cir. 2009), cert. denied, 131 S. Ct. 71 (2010) (“The agency’s path may be readily 

discerned from its prior interim rules, Program Statements, and consistent litigation position. 

These factors are not the sort of post hoc rationalizations of appellate counsel that Burlington

forbids us to consider.”) (citation omitted)); Gardner v. Grandolsky, 585 F.3d 786, 792 (3d Cir. 

2009) (same); Licon v. Ledezma, 638 F.3d 1303, 1310 (10th Cir. 2011) (same). 

 Van Hollen relies on Bowen v. Georgetown University Hospital, 488 U.S. 204, 213 

(1988), in arguing that the FEC is merely adopting a “convenient litigating position” by pointing 

out the statutory ambiguity (Pl’s Reply at 2), but the situation here is like the one the Supreme 

Court distinguished in Bowen: In view of the Commission’s clear position in the 2003 and 2007 

rulemakings, the agency’s litigation position is “wholly” supported “by regulations, rulings, or 

administrative practice,” and it is based on the position that “the agency itself has articulated.” 

Bowen, 488 U.S. at 212. Thus, although the Commission in 2007 did not literally say, “the 

statute is ambiguous,” the Commission’s E&Js clearly demonstrate that interpretation. 

II. BCRA DOES NOT SPEAK DIRECTLY TO THE APPROPRIATE DISCLOSURE 

FOR CORPORATIONS AND LABOR ORGANIZATIONS ENGAGED IN 

ELECTIONEERING COMMUNICATIONS 

To prevail under Chevron step one, Van Hollen “must do more than offer a reasonable or, 

even the best, interpretation; [he] must show that the statute unambiguously forecloses the 

[Commission’s] interpretation.” Vill. of Barrington, 636 F.3d at 661. But as the Commission 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 12 of 29
7 

has shown (FEC Br. at 18-19), the statute could not have “foreclose[d]” the Commission’s 

regulation governing disclosure of electioneering communications by corporations and labor 

organizations because, at the time the statute was passed, those groups were prohibited from 

using their general treasury fund to engage in electioneering communications. Van Hollen tries 

to explain how Congress could have directly spoken to an issue that BCRA did not even 

contemplate, but each of his arguments is flawed. 

A. Congress Could Not Have Both Prohibited an Activity and Yet Spoken 

Directly to the Question of How It Should Be Reported 

Van Hollen first argues (Pl’s Reply at 3-4) that it is irrelevant whether Congress 

appreciated the full scope of what it was doing when it passed the statute, because it is the plain 

language of the statute that controls, even if Congress did not envision how the statute would be 

applied. Van Hollen relies primarily on Pa. Department of Corrections v. Yeskey, 524 U.S. 206 

(1998), in which the Supreme Court contemplated whether state prisons should be considered 

“public entit[ies]” and therefore covered by the Americans with Disabilities Act of 1990. 

Yeskey, 524 U.S. at 208. The Court determined that the plain language of the statute 

encompassed state prisons because it included “any department, agency, special purpose district 

or other instrumentality of a State or States or local government.” Id. at 210 (quoting 42 U.S.C. 

§ 12131(1)(B)). Van Hollen claims that Yeskey stands for the proposition that if statutory 

language is unambiguous, it is “irrelevant” whether Congress anticipated how the statute would 

be applied. (Pl’s Opp. at 3-4 (quoting Yeskey, 524 U.S. at 212).) Van Hollen also cites 

Massachusetts v. EPA, 549 U.S. 497, 532 (2007), for the same proposition. 

In both of these cases, however, the Court would have had to hold that Congress did not 

mean what it said in order to reach the opposite conclusion. Cf. Engine Mfrs. Ass’n v. EPA, 88 

F.3d 1075, 1089 (D.C. Cir. 1996) (clear statutory language is only avoidable by showing that 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 13 of 29
8 

Congress “did not mean what it appears to have said, or that, as a matter of logic and statutory 

structure, it almost surely could not have meant it.”). But here, that is clearly not the case. 

Because Congress prohibited virtually all corporations and labor organizations from engaging in 

electioneering communications in the first place, it did not intend the disclosure requirements to 

apply to such groups. (See FEC Br. at 23-26.) See also Hayden v. Pataki, 449 F.3d 305, 324 

n.21 (2d Cir. 2006) (holding that Yeskey was “easily distinguishable” because, while there was 

no evidence in Yeskey that “Congress had meant to exempt prisons,” “there is a significant 

amount of evidence that Congress did not intend the [law to cover the subject matter in Hayden], 

and, at the very least, was convinced it had not done so.”). Moreover, Yeskey did not confront a 

situation in which a court decision drastically altered the scope of a statute by legalizing what 

Congress had specifically made unlawful. To the contrary, Yeskey noted that the statute’s 

statement of findings and purpose suggested that state prisons were intended to be covered. 

Yeskey, 524 U.S. at 211-12. And Massachusetts v. EPA is inapposite because it concerned 

whether Congress had permitted EPA to regulate a certain type of activity when its grant of 

authority used “broad language”; this case concerns whether Congress required an agency to 

regulate certain activity in a certain way, even though the statute Congress passed altogether 

prohibited the underlying activity. 

Finally, Van Hollen (Pl’s Reply at 4) assumes that if Congress had intended corporations 

and unions to make electioneering communications at all, the type of disclosure they would be 

required to make would be identical to the kind of disclosure required of other groups. But these 

are distinct issues, and plaintiff offers no reliable evidence that Congress would have subjected 

corporations and unions to the same reporting requirements had they been allowed to use their 

general treasury funds to make electioneering communications in the first place. As the 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 14 of 29
9 

Commission explained, FECA and BCRA have different reporting requirements for different 

entities and campaign activities. (See FEC Br. at 27.) The gap in the statute regarding disclosure 

for corporations and unions that make electioneering communications became much more 

pronounced after WRTL, and it is the Commission’s role, not Van Hollen’s, to fill it. 

B. Van Hollen Effectively Concedes That Interpreting the Statutory Term 

“Contributor” Is an Exercise in Line Drawing 

Van Hollen argues at length (Pl’s Reply at 7-9) that the term “contributors” in 2 U.S.C. 

§ 434(f)(2) is not ambiguous and therefore that the Chevron analysis should end at step one. But 

plaintiff also acknowledges that not everyone who gives money to a corporation should be 

deemed a “contributor.” According to Van Hollen, if money is given for investment purposes, in 

connection with a sale, or as payment for a loan, it need not be disclosed, but if money is given 

to pay dues, for example, it should be disclosed. (See Plaintiff’s Motion for Summary Judgment 

(“Pl.’s Br.”) at 30-32 (Doc # 20).) However, none of these lines exist in the purportedly 

unambiguous statute; rather, they are lines Van Hollen has drawn to define “contributor” in a 

manner that he deems reasonable. Van Hollen’s disagreement seems to be less about whether 

the Commission has the authority to interpret who constitutes a “contributor” than it is about 

whether Van Hollen would prefer a different interpretation. 

Van Hollen also concedes (Pl’s Reply at 9) that the FECA definition of “contribution” 

(2 U.S.C. § 431(8)) cannot be transferred wholesale to section 434(f)’s use of the terms 

“contributors” or “contributed”; yet he refuses to acknowledge that the shared root of these 

words creates ambiguity. As the Commission pointed out in both the 2003 E&J and its opening 

brief (FEC Br. at 19-20), Congress’s use of these related, but ultimately distinct, terms indeed 

creates confusion, which the agency resolved by interpreting them differently in the different 

statutory provisions. To minimize the statutory ambiguity and confusion, the Commission chose 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 15 of 29
10 

to use the terms “donor” and “donated” in its regulation under review. Although Van Hollen 

would prefer disclosure regarding a different subset of donors to corporations and unions that 

make electioneering communications, the fact that he offers the Court his own proposed line 

drawing implicitly concedes that the statute has left a gap — for the Commission — to fill. 

C. Congress Applied the Electioneering Communication Disclosure 

Requirements to a Very Limited Number of Corporations, and 

to No Labor Unions 

Van Hollen argues that Congress contemplated disclosure for corporations when it passed 

BCRA, both because some corporations were allowed to engage in electioneering 

communications and because an inoperative portion of the law would have allowed some other 

corporate electioneering. (Pl’s Reply at 5-6.) Van Hollen describes these as a “broad array of 

corporations,” but in fact they represent only a tiny fraction of the corporations in the United 

States and have characteristics that are quite distinct from the vast majority of corporations. And 

it is undisputed that Congress never intended the electioneering communication disclosure 

requirements to apply to any labor organizations at all. 

BCRA as enacted permitted only a relatively tiny number of corporations to make 

electioneering communications with their general treasury funds. In 2008, there were more than 

5.9 million businesses in the United States. See Statistics of U.S. Businesses, 

http://www2.census.gov/econ/susb/data/2008/us_state_totals_2008.xls. The vast majority of 

these are small, for-profit entities. See Charities & Other Tax-Exempt Organizations Statistics, 

http://www.irs.gov/pub/irs-soi/08eo03.xls (“IRS 990 Statistics”) (fewer than 200,000 non-profit 

corporations filed a Form 990 in 2008); http://www.irs.gov/pub/irs-soi/08eo04.xls (IRS 990-EZ 

Statistics) (fewer than 250,000 non-profit corporations filed a Form 990-EZ in 2008). In 

addition, there are dozens of labor unions representing more than 14 million American workers. 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 16 of 29
11 

See Bureau of Labor Statistics, News Release, http://www.bls.gov/news.release/pdf/union2.pdf 

(Jan. 21, 2011) (stating that there are 14.7 union members); Unions of the AFL-CIO, 

http://www.aflcio.org/aboutus/unions (listing 64 unions affiliated with the AFL-CIO). In 2002, 

Congress understood that only a small number of ideological corporations could use their general 

funds to finance electioneering communications, i.e., those formed for the sole purpose of 

promoting political ideas, that did not engage in business activities, and that did not accept 

contributions from for-profit corporations or unions. See FEC v. Mass. Citizens for Life, Inc.,

479 U.S. 238, 263-64 (1986) (“MCFL”) (holding that such corporations have a constitutional 

right to make independent expenditures); McConnell v. FEC, 540 U.S. 93, 209-12 (2003) 

(construing BCRA’s electioneering communication requirements not to apply to MCFL

corporations). Indeed, FEC disclosure reports reflect that only 113 entities that have made 

independent expenditures since 1994 have indicated that they were MCFL corporations.3

 

Van Hollen claims that the Snowe-Jeffords provision of BCRA indicates that Congress 

envisioned corporations beyond those described in MCFL that might have been permitted to 

engage in electioneering communications. (See Pl’s Reply at 6.) But as the FEC explained, 

Congress’s intent cannot be gleaned by looking at that provision because it was inoperative from 

the moment BCRA became law. (See FEC Br. at 23-26.) Furthermore, Snowe-Jeffords itself 

would have applied only to a relatively small number of corporations because it would have 

permitted only those corporations registered with the IRS as section 501(c)(4) or 527 

organizations to engage in electioneering communications. Fewer than 30,000 organizations 

filed their required reports to the IRS indicating section 501(c)(4) status in 2008. See IRS 990 

                                                           

3

 See FEC Disclosure Reports, www.fec.gov/finance/disclosure/adv-search.shtml (query 

for “INDEPENDENT EXPENDITURE (PERSON OR GROUP, NOT A COMMITTEE)” 

provides links to images of FEC Form 5 filings; the form asks all filers: “Is the filer a qualified 

nonprofit corporation?”). 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 17 of 29
12 

Statistics (9,316 501(c)(4) corporations filed a Form 990 in 2008); IRS 990-EZ Statistics (19,819 

501(c)(4) corporations filed a Form 990-EZ). Although not all section 527 organizations must 

file IRS forms in any given year, only 5,268 of them filed IRS forms indicating 527 status in 

2010. See Political Organization Disclosure, 

http://forms.irs.gov/politicalOrgsSearch/search/gotoAdvanced8871Search.action (5,268 results 

for “Popular Search” of “All organizations with any Form posted during the previous year”). 

Thus, even if the Snowe-Jeffords provision had ever become operative, the 

overwhelming majority of corporations, including all for-profit corporations and most non-profit 

corporations, as well as all labor unions, would have been barred from taking advantage of it. 

Congress did not, in fact, contemplate electioneering communication disclosure for a “broad 

array” of corporations. 

In sum, the Commission’s interpretation of the application of the electioneering 

communication disclosure requirements in light of the statutory ambiguity is a clear example of 

an agency filling a “gap left, implicitly or explicitly, by Congress.” Chevron, 467 U.S. at 843. 

Because Congress has not spoken directly to the issue in this case, the regulation at 11 C.F.R. 

§ 104.20(c)(9) passes step one of the Chevron inquiry. 

III. THE COMMISSION’S REGULATION GOVERNING ELECTIONEERING 

COMMUNICATION DISCLOSURE BY CORPORATIONS AND UNIONS IS A 

REASONABLE INTERPRETATION OF THE STATUTE 

Under Chevron step two, the Court must uphold a regulation if it is “reasonable,” even if 

there are other reasonable interpretations of the statute. FEC v. Nat’l Rifle Ass’n of Am., 254 

F.3d 173, 187 (D.C. Cir. 2001). As the Commission explained (FEC Br. at 28-42), the regulation 

at issue in this case reasonably balances the importance of providing significant electioneering 

communication disclosure with the potentially serious burdens on First Amendment interests in 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 18 of 29
13 

this context. Van Hollen argues that the regulation is unreasonable because he believes it 

provides inadequate disclosure and could provide more information with minimal additional 

burden, but his claims amount to an effort to substitute his judgment for that of the Commission, 

which is entitled to substantial deference in making such determinations. (See FEC Br. at 13-

18.) 

A. The Commission Reasonably Relied Upon Rulemaking Evidence of the 

Burdens Associated with Disclosure by Corporations and Unions 

As the Commission explained (FEC Br. at 29-36), the agency promulgated the regulation 

at 11 C.F.R. § 104.20(c)(9), which requires disclosure of “donations made for the purpose of 

furthering electioneering communications,” in part because of the “inordinate amount of effort” 

that would be required for corporations and labor organizations to disclose all persons that 

provided funds in a year that totaled $1,000 or more. See 2007 E&J, 72 Fed. Reg. at 72,913. 

Van Hollen argues that this reasoning was both “irrational and unsupported by evidence in the 

administrative record” (Pl’s Reply at 12), but each of these arguments is incorrect. 

 The Commission’s decision to adopt the standard in 11 C.F.R. § 104.20(c)(9) was a 

rational middle course between competing alternatives. (See FEC Br. at 28-32.) Van Hollen 

asserts that it was irrational for the Commission to suggest that the word “contributor” could 

include “persons who make investments, loans, and purchases,” and that without that “bizarre 

assumption,” there does not appear to be a significant burden. (Pl’s Reply at 12.) However, a 

review of dictionary definitions of “contributor” shows that the Commission’s understanding of 

the word’s potentially broader meaning is not only rational, but common. For example, 

definitions for the word include: 

1. “a person or thing that provides money to help pay for something, or support 

something.” Oxford Advanced Learners Dictionary. 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 19 of 29
14 

http://www.oxfordadvancedlearnersdictionary.com/dictionary/contributor (visited 

Sept. 10, 2011); 

2. “a person who gives something, especially money, in order to provide or achieve 

something together with other people.” Cambridge Advanced Learner’s Dictionary. 

http://dictionary.cambridge.org/dictionary/british/contributor (visited Sept. 10, 2011); 

3. “almoner, almsgiver, assignor, benefactor, bestower, donator, donor, granter, grantor, 

investor, patron, philanthropist, presenter, supplier, supporter, testator, vouchsafer.” 

The Free Dictionary. http://legal-dictionary.thefreedictionary.com/contributor 

(visited Sept. 10, 2011). 

Plaintiff has found other dictionary definitions to support his contention that 

“a ‘contributor’ is one who gives money without expectation of service or property or legal right 

in return” (Pl’s Br. at 20), but the definitions above show that the word is subject to broader 

interpretations, and in any event it is not clear that plaintiff’s definition is as reasonable or as 

simple to administer as he suggests. The “expectation” of receiving something in return is not 

always apparent, and some transfers may result from a mix of gratuitous and other intentions. 

Furthermore, individuals may make gratuitous transfers to corporations and unions for reasons 

that have nothing to do with support for electioneering. Conversely, an individual who gives 

money in exchange for goods or services may very well support the electioneering message (for 

example, an individual who purchases 100 logo T-shirts for $2,000). Moreover, it is not clear 

whether Van Hollen’s definition would include union dues, because union members often 

receive the right to certain services that have value, such as legal representation, and yet they 

may also support a union’s electioneering communications. As discussed supra Part II.B, the 

determination about what constitutes a “contributor” involves line drawing, and the 

Commission’s choice is what merits deference. 

Van Hollen also criticizes the Commission for failing to undertake a sufficiently rigorous 

investigation of how burdensome his preferred broader regulation would be, claiming that the 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 20 of 29
15 

Commission should have provided “information, data, or estimates” and/or “concrete examples 

of the supposed burden.” (Pl’s Reply at 13.) But plaintiff offers no authority showing that the 

APA requires an agency to conduct a lengthy study or to engage an expert every time it 

promulgates a regulation, or that common sense propositions require empirical evidence. Cf.

Ass’n of Nat’l Advertisers, Inc. v. FTC, 627 F.2d 1151, 1166 (D.C. Cir. 1979) (“Congress is 

under no requirement to hold an evidentiary hearing prior to its adoption of legislation, and 

‘Congress need not make that requirement when it delegates the task to an administrative 

agency.’”) (quoting Bowles v. Willingham, 321 U.S. 503, 519 (1944) (citation omitted)).  

 In any event, the Commission received many comments and heard testimony from many 

knowledgeable witnesses regarding the potential effects on the nation’s millions of corporations 

and unions. Van Hollen criticizes the Commission for relying on the testimony of commenters 

who are potentially affected by the proposed rule. (Pl’s Reply at 13.)4

 However, the APA itself 

requires that the public have an opportunity to comment on an agency’s proposed rules, 5 U.S.C. 

§ 553(c), and an agency that does not take public comments seriously may risk violating the 

                                                           

4

 Van Hollen argues that “[n]ot one of the 25 comments the FEC received, however, was 

submitted by a for-profit corporation that has business revenue, customers, and investors” (Pl’s 

Reply at 13), but this is very misleading. The Commission received comments from trade 

organizations that represent millions of for-profit entities, as well as some of the major labor 

unions in the nation. See, e.g., Comments of the Chamber of Commerce of the United States of 

America (AR Tab 15, VH0270, 275), stating that it represents “three million businesses ... of all 

sizes and industries.”; Comments of American Association of Advertising Agencies, American 

Advertising Federation, and Association of National Advertisers (AR Tab 11, VH0230, 233), 

each of which represent hundreds of businesses and agencies; Comments of National Association 

of Realtors (AR Tab 22, VH0375, 377), stating that its purpose is to “advance the interests of its 

members by improving the legal climate in which the members conduct their businesses”; Joint 

Comments of AFL-CIO, AFSCME, NEA and SEIU (AR Tab 29, VH0452). 

Van Hollen also argues that the Commission should have taken into account that 

corporations could alleviate their burden by establishing a segregated electioneering account 

pursuant to 2 U.S.C. § 434(f)(2)(E) and only disclosing individual contributors to that account. 

(Pl’s Reply at 12.) As the FEC has pointed out, however, that option is not sufficient to relieve 

the burden on corporations which receive funds from non-individuals, such as other corporations. 

(FEC Br. at 36 n.13.) 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 21 of 29
16 

APA. “[T]he opportunity to comment is meaningless unless the agency responds to significant 

points raised by the public.” Home Box Office, Inc. v. F.C.C., 567 F.2d 9, 35-36 (D.C. Cir. 

1977) (citing Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375, 393-394 (D.C. Cir. 1973) 

(footnote omitted). And no one is likely to have greater expertise regarding the potential burdens 

of the regulation than the organizations (and their representatives) most directly affected by the 

proposed rule. Moreover, “[f]rom a functional standpoint, we see no difference between 

assertions of fact and expert opinion tendered by the public . . . and that generated internally in 

an agency: each may be biased, inaccurate, or incomplete failings which adversary comment 

may illuminate.” Id. at 55. Thus, it was not only permissible but required that the Commission 

seriously consider the evidence submitted by the many unions, corporate trade associations, 

independent groups, political party committees, and others regarding the potential effects of the 

regulation. 

 Commenters in the rulemaking identified problems, particularly for non-profit groups, 

with a rule requiring separate fundraising or multiple reporting agendas. “On a practical level 

[the Commission’s proposed disclosure requirement] leaves a nonprofit with two bad choices: 

either disclose donors for the entire organization, or have the difficult job of separate fundraising 

for the [separate bank account].” Comments of Guinane, OMB Watch (AR Tab 23, VH0386). 

“Nonprofits struggle to maintain complex organizational structures that allow ... administering 

501(c)(3) and 501(c)(4) corporations, a federal PAC, one or more state PACs, and a committee 

registered in each state where the organization seeks to influence a ballot measure. ... 

Understanding what activities may be supported by each member of this nonprofit ‘family’ can 

be a challenge for staff, who are not typically legal experts. The burden of complying with 

different reporting regimes, each with its own set of definitions and particular quirks, would be 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 22 of 29
17 

hard to understate. . . . Organizations would have to choose between establishing yet another 

bank account to be separately administered, or intruding on their donors’ privacy.” Hearing 

Comments of Kingsley, Attorney for non-profit groups (AR Tab 30, VH0477-79). 

 Van Hollen did not participate in the 2007 rulemaking, and the BCRA sponsors with 

whom he allies himself said nothing about burden in their submission to the Commission. See

Comments by McCain, Feingold, Snowe, and Shays (AR Tab 21, VH0368-74). In sum, the 

evidence regarding burden on the regulated community was essentially unrebutted before the 

Commission, and it was entirely reasonable for the Commission to rely upon it. 

B. The Reasonableness of the Regulation Challenged Here Can Only Be Judged 

Based Upon the Information Available to the Commission at the Time the 

Regulation Was Promulgated 

As the Commission explained (FEC Br. at 32-33), 11 C.F.R. § 104.20(c)(9) requires the 

disclosure of critical information about electioneering communications, including the entity 

making the communication and how much was spent. Van Hollen argues (Pl’s Reply at 11) that 

the regulation is unreasonable because it does not require corporations and labor unions to 

disclose all sources of funds that are ultimately used to finance electioneering communications 

— regardless of why the money was given to the organization. But Van Hollen’s argument 

relies almost exclusively on information about post-2007 disclosure that was unavailable to the 

Commission at the time it promulgated the regulation, and this information cannot be used to 

judge whether the FEC acted reasonably at that time. (See FEC Br. at 38-41.) In particular, the 

Commission could not have foreseen that years later the Supreme Court would greatly broaden 

the scope of permissible electioneering financing by corporations and labor organizations in 

Citizens United v. FEC, 588 U.S. __, 130 S. Ct. 876 (2010). 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 23 of 29
18 

To justify his reliance on post-decisional material, Van Hollen again cites Esch v. Yeutter, 

876 F.2d 976 (D.C. Cir. 1989) (see Pl’s Reply at 11 n.1), but he fails to respond to the 

Commission’s four-part showing (FEC Br. at 40) that Esch is inapposite here. Plaintiff reasserts 

that the Commission failed to take into account all factors relevant to its decision, but as we 

explained (id.) this overly broad reading of Esch would create an exception so broad that it 

would swallow the rule barring post-decisional evidence. Under Van Hollen’s apparent view, 

Esch would require the Commission to do the impossible: consider material in 2007 that did not 

exist until 2010 or 2011. Van Hollen also does not counter the Commission’s extensive showing 

that courts refuse to consider such post-decisional material to challenge the correctness of an 

agency’s decision. (See FEC Br. at 41.) Nor does Van Hollen respond to the Commission’s 

demonstration (id.) that the proper recourse in a situation of changed circumstances is a petition 

for a new rulemaking, not the invalidation of a properly promulgated regulation. See Reytblatt v. 

NRC, 105 F.3d 715, 723 (D.C. Cir. 1997). 

C. The Court Should Consider Congress’s Refusal to Pass the DISCLOSE Act 

in Evaluating Whether the Commission’s Interpretation of the Statute Was 

Reasonable 

This Court can and should take into account the failure of Representative Van Hollen and 

his co-sponsors to overturn the challenged regulation legislatively. The DISCLOSE Act, H.R. 

5175 (2010) and S. 3295 (2010), which was introduced in both the House and Senate in 2010, 

would have required corporations that make electioneering communications from general 

treasury funds to disclose all their donors, without respect to purpose. (See FEC Br. at 37-38.) 

The failure of this legislation (and the fact that it has not even been introduced in the current 

session of Congress) suggests tacit approval of the regulation by Congress. Van Hollen argues 

(Pl’s Reply at 16) that, because the DISCLOSE Act was a “broad and comprehensive” piece of 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 24 of 29
19 

legislation rather than one that merely sought to overturn this regulation, its failure should not be 

construed as congressional approval of the regulation. But disclosure of corporate and union 

contributors was a major part of the bill; indeed, it was identified as the “most important” part by 

some members of Congress. 156 Cong. Rec. S3632 (daily ed. May 12, 2010) (statement of Sen. 

Bennet) (“The most important provisions in the DISCLOSE Act concern increased transparency 

in our political process. ... requiring corporations, labor unions and a number of tax exempt 

organizations to report all donors who have given $1,000 or more to the organization in a 12-

month period ... .”); 156 Cong. Rec. H4798 (daily ed. June 24, 2010) (statement of Rep. Nadler) 

(“This bill takes several critical steps to reclaim our elections. The most important one is that it 

would require disclosure by corporations and labor unions of donors providing money for 

political purposes in certain circumstances ... .”). Plaintiff does not dispute that one major 

purpose of DISCLOSE was to overturn the regulation challenged in this case. Thus, Congress’s 

refusal to overturn 11 C.F.R. § 104.20(c)(9) is evidence that the regulation is consistent with 

congressional intent. 

IV. REMAND TO THE COMMISSION, NOT VACATUR, IS THE APPROPRIATE 

REMEDY IF THE COURT HOLDS THAT THE REGULATION IS CONTRARY 

TO LAW 

 As the Commission explained, if the Court were to determine that 11 C.F.R. 

§ 104.20(c)(9) is unlawful, the appropriate remedy would be a remand to the Commission rather 

than vacatur. (See FEC Br. at 43-45.) The Commission showed that the unusual and potentially 

disruptive remedy of vacatur is inappropriate here under the standards identified in Allied-Signal, 

Inc. v. NRC, 988 F.2d 146, 150-51 (D.C. Cir. 1993). The general rule when courts review 

agency decision-making is, “except in rare circumstances,” to give the agency an opportunity to 

fix any problems on its own. Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985). 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 25 of 29
20 

Van Hollen argues that vacatur would be appropriate because “the agency’s regulation is 

inconsistent with the unambiguous terms of [the] statute.” (Pl’s Reply at 17.) But that would be 

true every time a regulation fails at Chevron step one, yet vacatur is not the normal remedy in 

such cases. See, e.g., Shays v. FEC, 337 F. Supp. 2d 28, 128 (D.D.C. 2004) (Chevron step one 

loss with no vacatur). Moreover, if the Court were to rule against the Commission at Chevron 

step two, vacatur would be inappropriate because there is a “non-trivial likelihood” that the 

Commission could justify the regulation on remand. WorldCom, Inc. v. FCC, 288 F.3d 429, 434 

(D.C. Cir. 2002). The cases on which plaintiff relies (Pl’s Reply at 17) concern the 

appropriateness of vacatur where an agency cannot justify a rule through further explanation or 

record development, but many of plaintiff’s complaints about the regulation challenged here, at 

least under Chevron step two, are about alleged defects in the FEC’s support for its rule. 

Van Hollen also asserts that invalidating the regulation would not result in inadequate 

guidance to corporations and labor organizations because they “need only abide by the plain text 

of the statute” (Pl’s Reply at 18), but he greatly understates the potential difficulties in the course 

he urges. As discussed supra Part II.B, the statute does not define who a “contributor” is, and 

that determination requires line drawing. With the 2012 elections fast approaching, corporations 

and labor organizations should have the benefit of more detailed guidance during any period of 

uncertainty in which the Commission would be considering a new regulation. And Van Hollen’s 

suggestion (Pl’s Reply at 17-18) that in the event of vacatur corporations and unions could avoid 

the burdens of disclosure by simply setting up a separate bank account ignores the problems with 

that option discussed supra p. 15 n.4. 

In arguing for the Court to vacate the Commission’s regulation and retain jurisdiction 

over the case, Van Hollen wrongly claims (Pl’s Reply at 18) that the Commission has not acted 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 26 of 29
21 

in a timely fashion in implementing other BCRA regulations and responding to court decisions. 

But of the six-year period plaintiff identifies, less than two years were occupied by the 

Commission undertaking rulemaking proceedings in response to court decisions, and that 

relatively short time involved rulemakings regarding more than 20 regulations. It is thus 

misleading to suggest that the agency’s diligent response to the massive reform legislation of 

BCRA and the lawsuits challenging these complex rules can be considered dilatory. The 

Commission promulgated its initial BCRA regulations under a highly expedited schedule, 

defended its regulations against multiple judicial challenges, and when necessary, promulgated 

new regulations, following APA procedural requirements and court decisions. 

 Following BCRA’s passage in March 2002, the Commission engaged in an 

unprecedented 20-plus expedited rulemaking projects in order to meet BCRA’s mandate to pass 

Title I regulations within 90 days of enactment and Title II regulations within 270 days. See

Section 402(c) of BCRA. See also, e.g., E&J, 67 Fed. Reg. 49,064 (July 29, 2002); E&J, 68 Fed. 

Reg. 404 (Jan. 3, 2003). In October 2002, then-Congressmen Chris Shays and Martin Meehan 

filed suit against the FEC, challenging 23 regulations (though they later withdrew challenges to 

three). See Shays, 337 F. Supp. 2d at 54 n.22. The district court’s initial stay of proceedings was 

not lifted until the final decision in McConnell in December 2003, and nine months later, in 

September 2004, the court issued its decision upholding some of the Commission’s regulations 

but invalidating 15 regulations and remanding those to the agency. Id. The Commission 

appealed the decision as to five regulations, but immediately began, and then timely completed, 

new rulemaking proceedings on the others. In September 2005, the D.C. Circuit affirmed the 

district court’s decision as to the last five contested regulations. Shays v. FEC (“Shays I”), 414 

F.3d 76 (D.C. Cir. 2005). The Commission added these regulations to its ongoing rulemaking 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 27 of 29
22 

docket and concluded the last of these complex proceedings in June 2006, less than one year 

after the D.C. Circuit decision. 

 In July 2006, the month after the Commission issued its final E&J on the Shays I

regulations, Shays filed another suit challenging five of the Commission’s revised regulations. 

Shays v. FEC, 508 F. Supp. 2d 10 (D.D.C. 2007). A little over a year later, in September 2007, 

the court invalidated four of the regulations and remanded them to the Commission. Id. In June 

2008, the D.C. Circuit reversed the district court’s decision invalidating one regulation, affirmed 

the district court’s decision invalidating three others, and invalidated a regulation that the district 

court had upheld. Shays v. FEC (“Shays III”), 528 F.3d 914 (D.C. Cir. 2008). 

 The instant case involves only one regulation. In light of the Commission’s timely 

efforts to issue new explanations and rules in the complex BCRA rulemakings (and associated 

Shays litigation), plaintiff’s suggestion that the Commission’s past conduct would justify vacatur 

or retention of jurisdiction should be rejected. Van Hollen has presented no evidence that the 

Commission will act in any but a timely way to respond to whatever order the Court may issue. 

Indeed, the district court saw no need for such extraordinary remedies in Shays I or Shays III.

5

 

                                                           

5

 In Shays I, the district court rejected plaintiffs’ requests for an injunction, expedited 

rulemaking, Commission reports to the court at intervals, and retention of jurisdiction. The court 

explained that “[u]nder settled principles of administrative law, when a court reviewing agency 

action determines that an agency made an error of law, the court’s inquiry is at an end: the case 

must be remanded to the agency for further action consistent with the corrected legal standards.” 

See Shays, 337 F. Supp. 2d at 130. “Accordingly, it is up to the agency to determine how to 

proceed next — not for the Court to decide or monitor.” Id. (internal quotations marks and 

citations omitted). Similarly, the district court in Shays III — acting in September 2007, with 

full awareness of the Commission’s handling of the remanded Shays I regulations — denied 

plaintiffs’ request for an injunction, expedited rulemaking, and retention of jurisdiction, quoting 

the similar denial in Shays I. See Shays, 508 F. Supp. 2d at 70-71.

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 28 of 29
23 

 Accordingly, if the Court were to rule against the Commission on the merits, it should 

remand the regulation to the Commission for further proceedings, not impose the extraordinary 

and potentially disruptive remedies of vacatur or retained jurisdiction. 

CONCLUSION 

 Because 11 C.F.R. § 104.20(c)(9) is not contrary to law, the Court should grant summary 

judgment to the Commission and deny plaintiff’s motion for relief. 

Respectfully submitted, 

Anthony Herman (D.C. Bar No. 424643) 

General Counsel 

David Kolker (D.C. Bar No. 394558) 

Associate General Counsel 

Harry J. Summers 

Assistant General Counsel 

Holly J. Baker 

Attorney 

/s/ Seth Nesin 

Seth Nesin 

Attorney 

COUNSEL FOR DEFENDANT 

FEDERAL ELECTION COMMISSION 

999 E Street, NW 

Washington, DC 20463 

Telephone: (202) 694-1650 

September 23, 2011 Fax: (202) 219-0260 

Case 1:11-cv-00766-ABJ Document 40 Filed 09/23/11 Page 29 of 29