Source: https://transition.fec.gov/law/litigation_CCA_A.shtml
Timestamp: 2019-03-21 18:05:02
Document Index: 386323289

Matched Legal Cases: ['§437', '§437', '§437', '§437', '§437', '§437', '§ 437', '§431', '§431', '§441', '§431', '§437', '§431', '§ 437', '§ 431', '§ 431', '§441', '§433', '§437', '§437', '§441', '§441', '§437', '§437', '§437', '§441', '§441', '§441', '§434', '§434', '§434', '§54', '§54']

FEC Litigation - Court Case Abstracts - A
AFL-CIO and DNC SERVICES CORP./DNC v. FEC (01-1522 and 02-5069)
On June 20, 2003, the U.S. Court of Appeals for the District of Columbia Circuit upheld the U.S. District Court for the District of Columbia's decision in this case. The appeals court found that the FEC's practice of disclosing documents obtained during an investigation was based on a regulation that, "while not contrary to the plain language of the statute, is nevertheless impermissible because it fails to account for the substantial First Amendment interests implicated in releasing political groups' strategic documents and other internal materials."
On June 17, 1997, the Commission found reason to believe that the plaintiffs had violated the Federal Election Campaign Act (the Act) during the 1995-96 election cycle (Matters Under Review (MURs) 4291, et al.). At the conclusion of its investigation, the Commission voted to take no further action on MURs 4291, et al., and to close the files. In keeping with its long-standing practice of disclosing the investigatory record once a MUR is closed, the Commission planned to make public a portion of the investigatory file.
The plaintiffs claimed that public disclosure of the files would cause irreparable injury by revealing confidential information and by chilling the plaintiffs' future efforts to engage in political activities. The plaintiffs asked the Commission not to make the documents public; however, the Commission denied their requests on the grounds that the Commission's regulations under the Act and the Freedom of Information Act (FOIA) required disclosure of the MUR files.
The plaintiffs had requested summary judgment from the district court, arguing, among other things, that disclosure of the documents would violate the confidentiality provision of the Act, which states that:
"Any notification or investigation made under [the enforcement] section shall not be made public by the Commission or by any person without the written consent of the person receiving such notification or the person with respect to whom such investigation is made." 2 U.S.C. §437g(a)(12)(A).
The Commission had argued that the Act only protects the confidentiality of ongoing investigations. Once a MUR is closed, the Act requires the Commission to make public the conciliation agreement or the Commission's determination that the Act has not been violated. 2 U.S.C. §437g(a)(4)(B)(ii). The Commission asserted that the Act's confidentiality provision was intended to protect a MUR respondent from disclosure of the fact that the respondent was under investigation. When the Commission made public its MUR determination, it would also reveal the fact that the respondent had been investigated, leaving nothing to be protected by the confidentiality provision. 2 U.S.C. §437g(a)(12)(A).
The district court, however, concluded that the plain language of the Act barred the Commission from publicizing investigative materials and, thus, that the Commission's interpretation of the statute ran counter to Congressional intent. 2 U.S.C. §437g(a)(12)(A). The court found that the Act's provision requiring that MUR determinations be made public was a limited exception to the Act's confidentiality provision, not a directive to end the protection of that provision. Moreover, the court concluded that publication of the materials would violate 11 CFR 111.21(a), which implements the Act's confidentiality provision.
The appeals court carried out its deliberations under the framework developed by the U.S. Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). In the Chevron framework, when a court reviews an agency's interpretation of the statute which it administers, the court must address two questions:
Whether Congress has directly spoken on the question at issue; and
In a case where the statute is silent or ambiguous with respect to the specific issue, whether the agency's approach is based on a permissible construction of statute.
The first question in this case was whether the Act provides a clear indication of Congressional intent regarding the disclosure of investigatory materials from closed investigations. The Commission argued that 2 U.S.C. §437g(a)(12)(A) was silent on whether materials from closed investigations could be released. The plaintiffs argued that this provision requires the Commission to keep investigatory files confidential even after the closing of an investigation. According to them, the permissible disclosures are limited to those set out in a separate section of the Act (2 U.S.C. §437g(a)(4)(B)(ii)) that requires the Commission's disclosure of signed conciliation agreements and its findings that a violation has not occurred.
The court determined that since the statute itself appears to support two plausible interpretations, it is ambiguous enough to proceed to the second stage of the Chevron analysis.
In examining whether, in the absence of Congressional intent, the Commission's disclosure policy represents a reasonable construction of the statute, the court noted that "[C]ourts . . . balance the burdens imposed on individuals and associations against the significance of the governmental interest in disclosure and consider the degree to which the government has tailored the disclosure requirement to serve its interests."
As mentioned above, the plaintiffs argued that the disclosure of the files would cause them irreparable injury by revealing confidential information and by chilling their future efforts to engage in political activities. The Commission argued that its disclosure regulation at 11 CFR 5.4(a)(4) was justified by deterring future violations of the Act, and by providing public accountability for the Commission's actions. Additionally, the Commission argued that it was entitled to deference, as its disclosure policy represented a long-standing practice.
However, the court found that the regulation's requirement that all investigatory materials not already exempted by FOIA be disclosed was not sufficiently tailored "to avoid unnecessarily burdening the First Amendment rights of the political organizations it investigates," like the plaintiffs.
Source: FEC Record -- February 2002 [PDF]; March 2002 [PDF]; August 2003 [PDF].
177 F. Supp.2d. 48
ALLIANCE FOR DEMOCRACY v. FEC (1:02CV00527)
On September 2, 2004, the U.S. District Court for the District of Columbia dismissed a complaint filed by Alliance for Democracy, Hedy Epstein and Ben Kjelshus (collectively, "Alliance"). Alliance had asked the court to find that the Commission acted contrary to law by delaying action on an investigation of Ashcroft 2000, the Spirit of America PAC and Garrett Lott, treasurer of the committees.
The Federal Election Campaign Act (the Act) authorizes the FEC to investigate possible violations of the Act. Title 2 U.S.C. § 437g(a)(8) allows a party who has filed an administrative complaint with the Commission to seek judicial review should the Commission fail to act on a complaint within 120 days.
The administrative complaint, filed March 8, 2001, alleged that the Spirit of America PAC contributed a fundraising list of 100,000 donors to Ashcroft 2000, the principal campaign committee for John Ashcroft's 2000 Missouri Senate campaign. The administrative complaint alleged that the list was a contribution by the Spirit of America PAC to Ashcroft 2000 and that neither committee reported the contribution to the Commission. See 2 U.S.C. §431(8) and 11 CFR 100.7.
After an investigation, the Commission determined probable cause and entered into conciliation negotiations with the respondents. On December 11, 2003, a final conciliation agreement was reached with all administrative respondents.
On March 19, 2002, Alliance for Democracy filed a complaint in the U.S. District Court for the District of Columbia alleging that the Commission acted contrary to law by failing to act on an administrative complaint filed by the Plaintiffs. The Plaintiffs claimed that, because the alleged contribution was unreported, they were denied, and continued to be denied, access to information that would assist them in evaluating candidates for the 2000 Missouri Senate election, as well as candidates for future elections.
The court found that because the Commission completed its final action, the case arguing failure or delay of action is moot. Additionally, the court lacks jurisdiction to grant Alliance declaratory relief, as the relief sought must be capable of redressing the alleged harm. In this case, the FEC has acted as requested in Alliance's administrative complaint. Finally, the court also determined that plaintiffs lack standing to sue because they did not show a "discreet injury flowing from" the alleged delay. (Common Cause v. FEC, 108 F.3d at 418.) According to the memorandum of the court, the FEC has completed its obligations under the Act, there is no live controversy between the parties, and thus the action was dismissed.
Source: FEC Record -- May 2002 [PDF]; October 2004 [PDF].
ALLIANCE FOR DEMOCRACY v. FEC (1:04CV00127)
On February 28, 2005, the U.S. District Court for the District of Columbia granted the Commission’s motion to dismiss this case, finding that the plaintiffs lacked standing. The Alliance for Democracy, a non-profit, non-partisan advocacy group, Hedy Epstein and Ben Kjelshus (collectively the plaintiffs) had filed a complaint January 26, 2004, alleging that the Commission wrongfully dismissed the central allegations of the plaintiffs' administrative complaint against the Spirit of America PAC (SOA) and Ashcroft 2000.
SOA was established in 1996 and John Ashcroft served as its chairman. In March 2001, the plaintiffs filed an administrative complaint with the Commission, designated Matter Under Review (MUR) 5181, alleging that SOA unlawfully donated a fundraising list of approximately 100,000 donors to Ashcroft 2000, Mr. Ashcroft's 2000 Senate campaign committee, and that the two committees failed to disclose the donation of the list or its value. According to the administrative complaint, the donation of the fundraising list constituted a contribution under the Federal Election Campaign Act (the Act) and exceeded the Act's contribution limits. 2 U.S.C. §431(8). The administrative complaint further alleged that SOA and Ashcroft 2000 violated the Act by failing to report the contribution of the fundraising list in their FEC reports. See 2 U.S.C. §§441a(a)(2)(a), 441a(f) and 434(b). On December 11, 2003, the FEC closed the investigation of the administrative complaint with a conciliation agreement that includes a $37,000 civil penalty for violations stemming from the transfer of list rental income.1
The complaint alleged that the Commission failed to find probable cause to believe that the transfer of the mailing list constituted an in-kind contribution, or that the value of the list had to be reported as a contribution. The Commission also did not find probable cause as to Ashcroft 2000's use of the list or Ashcroft 2000's receipt of list rental income from its own rental of the list. The plaintiffs also alleged that the list's value far exceeds the $112,962 in excessive contributions found by the Commission.
The plaintiffs alleged in their court complaint that the FEC's "dismissal of the central allegations of the administrative complaint, and its approval of the transfer of the funding list from the Spirit of America PAC to Ashcroft 2000 and the non-reporting of the transfer, are arbitrary and capricious, contrary to law and a clear abuse of the agency's discretion." The plaintiffs also alleged that the Commission's failure to find excessive contributions and reporting violations based on the illegal donation of the fundraising list is based on an impermissible interpretation of the Act. See 2 U.S.C. §§431(8)(A)(i), 432(b), 434(b) 441a(a)(2)(A) and 441a(f).
In order to have standing in court, the plaintiffs must show an “injury-in-fact” that is fairly traceable to the challenged actions of the defendant and is likely to be redressed by a favorable decision by the court. In this case, the plaintiffs claimed that they suffered an “informational injury” resulting from SOA’s and Ashcroft 2000’s failure to report the exact value of the mailing list in question. However, the court found that, because the Commission has already made public all of the information that it is statutorily required to disclose regarding MUR 5181, the plaintiffs have not suffered an informational injury based on the Commission’s actions. The court granted the Commission’s motion to dismiss the case for lack of jurisdiction.
1 The conciliation agreement and supporting documents are available through the FEC's Enforcement Query System.
Source: FEC Record -- March 2004 and April 2005 [PDF].
AKINS v. FEC (91-2831)
On June 9, 1992, the U.S. Court of Appeals for the District of Columbia Circuit, in a per curiam order, directed the district court to clarify its order of January 21, 1992. (Civil Action No. 92-5124.) In that order, the district court had required the FEC to "issue a final decision on the merits of the Plaintiffs' administrative complaint forthwith, and in no event later than 4 p.m. on May 29, 1992."
The court of appeals stated that it found the above language confusing: "While it could be interpreted, as the FEC has suggested, as a direction to the agency to take final action by May 29, we question this interpretation because the district court has not found that the FEC's failure to act on appellees' administrative complaint was 'contrary to law' as required by 2 U.S.C. §437g(a)(8)(C)."
The court further stated: "We would have serious doubts about the propriety of an order compelling the FEC to take final action absent a finding by the district court that the agency's failure to act was 'contrary to law.' Upon clarification, the district court should allow the FEC sufficient time for any action the clarified order may contemplate."
(The FEC had interpreted the order as a mandatory deadline for final action and had asked the district court to clarify the order by deleting that language. When the court refused, the agency filed an appeal.)
In response to the directions from the court of appeals, the district court issued a new order on June 26, 1992. Stating that its previous order "was not intended as an injunction," the district court reopened the case to decide the "contrary to law" issue. However, shortly thereafter, on July 7, 1992, the court dismissed the case as moot since the FEC had completed action on the administrative complaint (Matter Under Review (MUR) 2804). Civil Action No. 91-2831 (CRR).
Akins v. FEC, No. 91-2831 (D.D.C. Jan. 20, 1992); on remand, No. 92-5124 (D.C. Cir. June 9, 1992); on remand (D.D.C. June 26, 1992).
AKINS v. FEC (92-1864/00-1478)
On September 29, 1995, the U.S. Court of Appeals for the District of Columbia ruled that the FEC's use of a "major purpose test" to narrow the definition of "political committee" was valid, that its application of the "major purpose test" in this case was reasonable, and that its investigation into the matters raised by appellants was adequate. The court therefore affirmed the district court's ruling dismissing appellants' complaint that the FEC's actions were contrary to law.
On December 6, 1996, the U.S. Court of Appeals for the District of Columbia Circuit, sitting en banc, reversed the district court's decision.
On June 1, 1998, the U.S. Supreme Court ruled that Mr. James E. Akins and several other former government officials had standing to challenge in federal court the Commission's dismissal of an administrative complaint they filed in 1989 against the American Israel Public Affairs Committee (AIPAC). The Supreme Court also referred questions about the membership status of AIPAC members to the Commission.
On January 9, 1989, Mr. Akins and his associates filed an administrative complaint with the FEC alleging that AIPAC, an organization that lobbies public officials and disseminates information about federal candidates and officeholders, failed to register and report as a political committee, after it had made contributions to and expenditures on behalf of federal candidates in excess of $1,000.
The Federal Election Campaign Act (the Act) defines a political committee as any committee, association or other group that receives contributions or makes expenditures to influence federal elections in excess of $1,000 during a calendar year. 2 U.S.C. §431(4)(A). However, a statutory exception to the definition of expenditure allows membership organizations to make disbursements of more than $1,000 for campaign-related communications to their members, without their counting as contributions or expenditures.
AIPAC claimed that its communications to its members fell within this exception and, therefore, that it did not have to register as a political committee or disclose any of its financial activities to the FEC.
The FEC did not agree. In its view, AIPAC's disbursements did qualify as expenditures because its members did not qualify as members under the Act. The Commission, nonetheless, concluded AIPAC was not subject to the registration and disclosure rules applicable to political committees. The Commission believed that, because AIPAC's major purpose was not influencing federal elections, it did not qualify as a political committee even though it had made expenditures in excess of $1,000. The Commission dismissed the complaint.
District and Appellate Courts Decisions
Mr. Akins and the other plaintiffs filed suit in U.S. District Court for the District of Columbia charging that the FEC failed to proceed on the administrative complaint and challenging the Commission's interpretation of what constitutes a political committee. The district court ruled in favor of the FEC, agreeing with the "major purpose" test-that an organization that receives contributions or makes expenditures of more than $1,000 becomes a political committee only if its major purpose is the influencing of federal elections.
The U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court ruling, but an en banc panel of the same appellate court reversed the district court decision. The en banc panel, referencing both Buckley v. Valeo and FEC v. Massachusetts Citizens for Life, Inc., found that the major purpose test can only be applied to organizations that make independent expenditures, not contributions, which is what was in question in the administrative complaint against AIPAC. The court also rejected the Commission's argument that the appellants lacked standing to bring their claim to federal court. On behalf of the FEC, the solicitor general appealed the decision to the Supreme Court.
The Supreme Court focused its opinion on the three-pronged test of standing-which a plaintiff must demonstrate to show there is a "case" or "controversy" under Article III of the U.S. Constitution-injury in fact, causation and redressability. The high court also found that the plaintiffs' inability to obtain information about AIPAC's campaign-related finances satisfied prudential standing because it was the kind of injury that the Act seeks to address.
Injury in Fact. The Supreme Court found that the injury in fact in this case was that the plaintiffs were prevented from obtaining information about AIPAC's donors and the organization's campaign-related contributions and expenditures. It said that there is no reason to doubt that this information would have helped the plaintiffs evaluate candidates for public office, especially those candidates who received assistance from AIPAC. Thus, the court said, the injury in this case is both "concrete" and "particular." The FEC argued that the lawsuit involved only a "generalized grievance" shared by many (a kind of grievance for which standing usually is not conferred); the Supreme Court disagreed. In such cases of "generalized grievance," the court said, the harm is usually "of an abstract and indefinite nature"-not the kind of concrete harm that the court found here.
The court concluded that, "[T]he informational injury at issue here, directly related to voting, the most basic of political rights, is sufficiently concrete and specific such that the fact that it is widely shared does not deprive Congress of constitutional power to authorize its vindication in the federal courts."
Causation and Redressability. The high court also found that the harm asserted by the plaintiffs was "fairly traceable" to the FEC's decision to dismiss its administrative complaint, and that the courts have the power to redress this harm.
The Supreme Court also rejected the FEC's argument that, because the agency's decision not to undertake an enforcement action is generally an area not subject to judicial review, 2 U.S.C. § 437g(a)(8) should be interpreted narrowly.
"Major Purpose" Test
With regard to the "major purpose" test, the Supreme Court referred the matter back to the FEC because of the uncertainty of the "membership" issue as applied to AIPAC.
Source: FEC Record -- May 1994, p. 4; December 1995, p. 1; February 1997 [PDF]; and July 1998 [PDF].
Akins v. FEC, No. 92-1864 (JLG) (D.D.C. Aug. 11, 1993) (on motion for amended complaint); (D.D.C. Dec. 8, 1993); (D.D.C. Mar. 30, 1994) (opinion); 66 F.3d 348 (D.C. Cir. 1995), rev'd, 101 F.3d 731 (D.C. Cir. 1996) (en banc), vacated and remanded, 118 S. Ct. 1777 (1998).
AKINS, ET AL. v. FEC (1:03CV02431)
On November 25, 2003, James E. Akins and several other individuals filed a complaint with the U.S. District Court for the District Columbia requesting that the court find that the Commission acted contrary to law when it dismissed the plaintiff's administrative complaint dated May 20, 2002 (Matter Under Review (MUR) 5272). The administrative complaint alleged that the American Israel Public Affairs Committee (AIPAC) failed to disclose its candidate-coordinated express advocacy communications as required by the Federal Election Campaign Act (the Act). 2 U.S.C. § 431(9)(B)(iii). In their complaint filed with the District Court, the plaintiffs allege that the FEC's dismissal of the complaint against AIPAC has harmed the electoral process by not enforcing the provisions of federal law that require public disclosure of such communications. The plaintiffs allege that they also have been harmed by being denied their legal right to access such information and use it to inform policymakers and the general public about the activities and influence of AIPAC.
The Act requires incorporated membership organizations to report disbursements for express advocacy communications to their members when the cost of such communications aggregates over $2,000 for all candidates running in the same election. 2 U.S.C. § 431(9)(B)(iii).
In its investigation MUR 2084, which resulted from a previous complaint filed by the plaintiffs against AIPAC, the Commission found that:
AIPAC was a membership organization under federal law; and
AIPAC's meetings with candidates and its sharing of campaign information with its members demonstrated a serious interest in influencing federal elections.
However, in MUR 2804, the Commission made no determination regarding whether the cost of AIPAC's communications exceeded $2,000 in connection with any election.
On May 20, 2002, the plaintiffs filed an additional complaint, MUR 5272, alleging that the facts found in MUR 2804 indicated that AIPAC failed to disclose the cost of having members travel to and attend meetings with candidates to discuss their campaigns and issues once those costs exceeded $2,000. In MUR 5272, the plaintiffs asked that the Commission:
Find through investigation that AIPAC's costs for advocacy communications to its members exceeded $2,000 during an election; and,
Order AIPAC to disclose the cost of such communications with the Commission in accord with Federal law.
The Commission dismissed MUR 5272 as a matter of prosecutorial discretion. The Commission noted that the plaintiffs' complaint did not cite any specific instances of communications containing express advocacy made by AIPAC and that they could not substantiate the claim that AIPAC had engaged in membership communications subject to the reporting requirements of the Act.
The plaintiffs contend that the Commission's dismissal of MUR 5272 was arbitrary, capricious and contrary to law. Plaintiffs claim that the evidence gathered in the investigation of MUR 2804 is sufficient to prove that AIPAC made communications to its members in excess of $2,000 for an election.
Declare the Commission's dismissal of the plaintiff's administrative complaint to be arbitrary, capricious and contrary to law;
Remand the matter to the Commission and order the agency to decide on the basis of the evidence presented in MUR 2804 whether AIPAC has made unreported membership communications;
Award plaintiffs costs and attorneys' fees; and
Afford plaintiffs such additional relief as the court deems just.
Source: FEC Record -- April 2004 [PDF]
On March 12, 1996, the U.S. Court of Appeals for the Second Circuit affirmed the district court's decision to dismiss this case for lack of standing.
This suit was brought by Sal Albanese, who chose not to challenge Representative Susan Molinari in 1994 after his unsuccessful attempt to unseat her in 1992, and on behalf of a number of his supporters.
In their original suit, plaintiffs challenged the constitutionality of the federal electoral system on the grounds that it financially handicapped campaigns to unseat an incumbent, thus discouraging potential candidacies. In an amended complaint, they specifically challenged the constitutionality of the Federal Election Campaign Act (the Act)-alleging that it authorizes the use of private monies in federal elections-and the franking privileges enjoyed by incumbents.
In determining that plaintiffs lacked standing to bring this suit, the court applied the three-part test for standing; this test requires plaintiffs to identify (1) an actual injury that (2) is caused by the challenged act and (3) is likely to be redressed by the relief requested. The court found that plaintiffs in this case failed all three parts of this test.
Plaintiffs failed the first part because plaintiffs represented a potential candidate and supporters of his would-be campaign, rendering their alleged injury "abstract and conjectural." For instance, their alleged injury that large contributors diminish the influence of those who cannot give as much was "abstract and remote" in this case since the campaign that plaintiffs wished to support did not exist.
Plaintiffs failed the second part because, since their alleged injury was theoretical, they could not provide tangible evidence that the injury was caused by the Act. The court noted, "We will never know how much money might have been contributed to [Albanese's campaign] and how successful he might have been at the polls . . . ." The court further stated that, "Albanese opted not to participate in the election process; he was not prevented from doing so." The alleged injuries, therefore, were not traceable to the Act.
Lastly, plaintiffs failed the third part because their suggested remedy-to declare the Act unconstitutional-would not redress the injury. The court stated, "[If] plaintiffs' goal is to eliminate the contribution of private funds to politicians and thereby level the electoral playing field, declaring the [Act]-a statute which limits such contributions-unconstitutional cannot be said to redress plaintiffs' injury."
Additionally, the court cited Buckley v. Valeo as a legal precedent upholding the constitutionality of the Act, and several other court decisions similarly upholding the constitutionality of the franking statute.
In closing, the court declared that it was outside its jurisdiction to address the plaintiffs' grievance, and that plaintiffs had to seek relief through the legislative and executive branches of government: "To the extent that the plaintiffs believe that a modification of the process would enhance its integrity, they must make the case for the validity of that belief with the political branches of our government. For just as fundamental to the political order of this democracy is the doctrine of separation of powers and the limited jurisdiction conferred upon the federal judiciary within that political order."
Source: FEC Record -- July 1995, p. 8; and May 1996 [PDF].
Albanese v. FEC, 884 F. Supp. 685 (E.D.N.Y. 1995), aff'd, 78 F.3d 66 (2d Cir. 1996).
ANDERSON v. FEC (80-0272)
On April 10, 1981, the U.S. District Court for the District of Maine dismissed John B. Anderson v. FEC (Civil Action No. 80-0272P) in response to a motion to dismiss the suit filed by plaintiffs on the same day. The suit had been remanded to the district court after certification of constitutional questions to the U.S. Court of Appeals for the First Circuit. Several plaintiffs-John B. Anderson, a candidate in the 1980 Presidential elections, the National Unity Campaign 441a(d) Committee and three individual plaintiffs-had brought suit on September 8, 1980, asking the district court to certify the following constitutional questions to the appeals court:
Does Section 441a(a)(1)(B), which entitles a national party committee to receive contributions of up to $20,000 per year from individuals, infringe on plaintiff's First and Fifth Amendment rights; and
Does Section 441a(d), which permits a national party committee to make special "coordinated party expenditures" on behalf of its Presidential candidate, infringe on plaintiffs' First and Fifth Amendment rights?
Plaintiffs had also sought a preliminary injunction from the district court, directing the Commission to permit the application of Sections 441a(a)(1)(B) and 441a(d) to the National Unity Campaign 441a(d) Committee, which had registered as a political committee the day before plaintiffs filed suit.
On October 14, 1980, the district court certified plaintiffs' constitutional questions to the appeals court but denied plaintiffs' motion for a preliminary injunction. The court held that plaintiffs had not exhausted the administrative relief available to them under the election law. Moreover, the court noted that any injunction granted would have been permanent, rather than temporary, since the election would be held within two and one-half weeks of its ruling.
On October 30, 1980, the appeals court granted the FEC's motion to remand the case to the district court for further fact finding. The court noted that, if plaintiffs had sought an advisory opinion from the FEC before filing suit, the court "...would likely have had more facts before us than we do presently and would have been better able to evaluate plaintiffs' constitutional claims."
Plaintiffs Seek Administrative Relief From FEC
On November 4, 1980, prior to seeking dismissal of their suit, plaintiffs requested an advisory opinion from the Federal Election Commission on the status of the National Unity Campaign and the National Unity Campaign 441a(d) Committee as national party committees operating on Mr. Anderson's behalf. In AO 1980-131, issued on November 20, 1980, the Commission determined that neither committee qualified as the national committee of a political party and, therefore, that neither committee was entitled to receive up to $20,000 in contributions from individuals or to make coordinated party expenditures.
Source: FEC Record -- July 1981, p. 6.
Anderson v. FEC, 634 F.2d 3 (1st Cir. 1980) (en banc).
ANDERSON v. FEC (80-1911)
On September 9, 1980, the U.S. District Court for the District of Columbia dismissed the suit, John B. Anderson v. FEC (Civil Action No. 80-1911). The court determined that there was no longer a need for a decision either on the FEC's motion to dismiss the suit or on the substantive issues raised in the suit.
In the suit, plaintiffs had sought an expedited ruling by the court that John B. Anderson would be eligible as an independent candidate for the same post-election public funding as that provided Presidential candidates of "new parties," if he received five percent or more of all popular votes cast in the 1980 Presidential general election and met other requirements of the Act. Such a ruling, plaintiffs told the court, would immediately make large bank loans available to the Anderson campaign.
The FEC had consistently argued that plaintiffs should have requested an advisory opinion from the FEC on the application of the Act and the Commission's new regulations to the Anderson campaign before seeking a court ruling. On August 13, plaintiffs did file an advisory opinion request (AOR 1980-96) with the FEC, and on September 4 the Commission issued an opinion declaring Mr. Anderson eligible for post-election public funding as the candidate of a new political party.
After issuing the Anderson opinion, the FEC filed a supplement to its motion to dismiss the suit, submitting the opinion and arguing that it fully supported its consistent position that the case should be dismissed. Plaintiffs, who had opposed the FEC's motion to dismiss, also filed their own motion to dismiss the case as moot.
Source: FEC Record -- October 1980, p. 6.
ANTOSH v. FEC (84-1552 and 84-2737)
On August 30, 1984, the U.S. District Court for the District of Columbia issued an order granting the FEC's motion to dismiss Antosh v. FEC (Civil Action No. 84-1552) and denying the plaintiff's motion to file a supplemental complaint. On September 13, 1984 , the court issued an opinion explaining the ruling. Following the court's order, Mr. James E. Antosh filed a second suit with the court on September 6, 1984 (Civil Action No. 84-2737). The second suit included a request by the plaintiff that the district court certify two constitutional claims to the U.S. Court of Appeals.
On January 5, 1988, the court ruled that Mr. Antosh lacked standing in his second suit to seek the court's certification of his constitutional questions to the appeals court. The court granted a motion by the FEC to dismiss the counts of his complaint which included the constitutional questions.
On March 24, 1988, the district court issued an order granting a further motion by the FEC for a summary judgment in the second suit. The court's order dismissed the remaining two counts of Mr. Antosh's complaint.
Mr. Antosh, a registered voter in Oklahoma, is president of Shawnee Garment Manufacturing, Inc. On December 2, 1983, he filed an administrative complaint with the FEC alleging that the separate segregated funds of three international unions were affiliated with the AFL-CIO's political action committee (PAC)1 within the meaning of 2 U.S.C. §441a(a)(5). Mr. Antosh claimed that the four political committees had failed to disclose their affiliation in their respective Statements of Organization and, in making contributions to several political committees, had exceeded their single $5,000 contribution ceiling. (See 2 U.S.C. §§433(b)(2) and 441a(a)(2)(A).)
Furthermore, his complaint claimed that the election law and FEC Regulations recognized automatic affiliation between business federations and their members, on the one hand, while only a discretionary affiliation between a labor federation and its members, on the other. The plaintiff had alleged that this was discriminatory treatment in violation of the First and Fifth Amendments.
Pursuant to 2 U.S.C. §437g(a)(8), Mr. Antosh filed his first suit against the FEC in the district court on May 17, 1984. The plaintiff asked the court to declare that the FEC's failure to act on his administrative complaint within 120 days was contrary to law and to issue an order directing the FEC to proceed with an investigation into the complaint within 30 days.
On July 10, 1984, the Commission dismissed Mr. Antosh's administrative complaint, finding no reason to believe that violations of the election law had occurred. On the same day, the Commission also filed a motion with the court to dismiss Mr. Antosh's suit as moot. On July 23, 1984, Mr. Antosh requested that the court deny the FEC's motion to dismiss his case and grant his motion to file a supplemental complaint. In his proposed supplemental complaint, Mr. Antosh requested the court to declare that the FEC's dismissal of his administrative complaint was contrary to law, and to certify his constitutional questions to the appeals court. The court found, however, that Mr. Antosh's July 23 request did not constitute a supplement to his original suit because, unlike the original request, the motion did not deal with delays in processing his administrative complaint, but rather it dealt with the merits of the FEC's decision to dismiss the complaint. The court therefore decided that, under procedural rules, Mr. Antosh had to file a separate suit with the court.
On September 6, 1984, Mr. Antosh filed a second suit with the district court to challenge the Commission's dismissal of his complaint. On December 3, 1984, pursuant to 2 U.S.C. §437h(a), he asked the district court to certify two constitutional claims to the appeals court. Specifically, he alleged that several provisions of the Federal Election Campaign Act and FEC regulations provided preferential treatment to labor organization PACs over trade association PACs. Mr. Antosh claimed that these distinctions violated the First and Fifth Amendments. Furthermore, Mr. Antosh asked the court to declare that the FEC's dismissal of his administrative complaint was contrary to law and that both the FEC and former Commissioner Thomas E. Harris had violated his rights to due process in refusing to disqualify Commissioner Harris from the agency's consideration of his administrative complaint.2 (Prior to his appointment to the Commission in 1975, Commissioner Harris had served as counsel for the AFL-CIO. Mr. Antosh claimed that Mr. Harris had signed a factual stipulation on behalf of the AFL-CIO in a 1973 case that was germane to Mr. Antosh's suit.)
The FEC filed an opposition to Mr. Antosh's motion for certification of his constitutional claims and filed an additional motion to dismiss them. The agency argued that Mr. Antosh lacked standing to raise the constitutional questions and that federal courts had already substantially settled the questions he raised.
In January 1988, the court granted the FEC's motions and dismissed Mr. Antosh's constitutional claims. The court found that, although the plaintiff had standing to raise his questions under the election law, he lacked standing under Article III of the Constitution. The court concluded that Mr. Antosh failed to demonstrate the kind of injury required by Article III, that is, "some actual or threatened injury which is traceable to illegal conduct by the defendant" and which "is likely to be redressed by a favorable ruling." The court first rejected Mr. Antosh's claim that, as a businessman who might contribute to trade association political action committees, his voice had been diminished in the political process by the law's alleged discrimination against such committees, thereby violating his rights under the free speech provision of the First Amendment. The court then rejected Mr. Antosh's claim that he had a personal stake in the law's alleged discrimination against corporate political action committees by virtue of his position as president of a corporation that was a member of trade associations, thereby violating his rights under the First Amendment and under the due process clause of the Fifth Amendment.
In March 1988 the district court ruled on the rest of the counts in Mr. Antosh's suit. With regard to Mr. Antosh's allegation that the FEC's dismissal of his administrative complaint was contrary to law, the court held that the FEC had "reasonably interpreted" the provision of the election law governing possible affiliation between the political committees named in the complaint. Consequently, the agency's dismissal of the complaint was not contrary to law.
The FEC had argued that the legislative history of Section 441a(a)(5) demonstrated that Congress had not intended to impose a single contribution limit on the AFL-CIO's PAC and the PACs of international unions affiliated with the AFL-CIO. The agency noted that it had consistently interpreted the provision this way.
The district court supported the FEC's view, noting comments made in 1976 by Congressman Wayne Hays, then Chairman of the House Ways and Means Committee and a sponsor of the 1976 amendments to the Act, saying that the membership of international unions in the AFL-CIO did not mean that the unions and the federation were to be treated as a single entity for the purposes of the 1976 amendments.
With regard to Mr. Antosh's claim that Commissioner Harris should have recused himself from the case, the court concluded that "the intervention of significant numbers of years [nine] certainly is sufficient to remove any taint." The court added that it "refuse[d] to find that an attorney, at the very least nine years later, cannot consider cases involving a former client, especially after the Commission has made a determination that he or she is capable of impartially addressing the individual facts of a case."
1 The full title of the AFL-CIO's PAC is "American Federation of Labor Congress of Industrial Organizations, Committee on Political Education Political Contributions Committee (AFL-CIO COPE-PCC)."
2 Commissioner Harris's third term on the Commission expired in April 1985. He continued to serve on the Commission, however, until autumn 1986, when he was replaced on the Commission by Scott E. Thomas.
Source: FEC Record -- November 1984, p. 5; March 1988, p. 10; and June 1988, p. 8.
Antosh v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9260 (D.D.C. Jan. 5, 1988), (D.D.C. Mar. 24, 1988) (unpublished opinion).
ANTOSH v. FEC (84-3048)
On December 21, 1984, the U.S. District Court for the District of Columbia issued an order granting plaintiff's motion for summary judgment in James Antosh v. FEC (Civil Action No. 84-3048). The court found that the Commission's dismissal of an administrative complaint Mr. Antosh had filed with the FEC was contrary to law. On the same day, therefore, the court issued an order requiring the Commission to vacate its determination in the administrative complaint and to "reopen [the complaint] for further proceedings consistent with the court's opinion."
On July 1, 1987, the court denied Mr. Antosh's petition for award of attorneys' fees and costs incurred by him in the same suit.
In filing his complaint with the FEC in May 1984, Mr. Antosh had alleged that:
Engineers Political Education Committee/International Union of Operating Engineers (EPEC/IUOE) and Supporters of Engineers Local 3 Federal Endorsed Candidates (SELFEC), the separate segregated funds of the International Union of Operating Engineers and Engineers Local 3, had violated 2 U.S.C. §441(a)(2)(A) by making contributions in excess of $5,000 to the 1982 primary campaign of Thomas P. Lantos, a Congressional candidate, and Mr. Lantos' principal campaign committee;
Mr. Lantos and his principal campaign committee had, in turn, violated 2 U.S.C. §441a(f) by knowingly accepting the excessive contributions (totaling $3,600); and
Mr. Lantos, his campaign treasurer and his principal campaign committee had violated Commission regulations by failing to report the excessive contributions accurately. See 11 CFR 104.14(d).
In a report submitted to the FEC in July 1984, the General Counsel noted, however, that based on an affidavit and a letter submitted by the respondents, of the $3,600 alleged to be excess contributions to the 1982 primary, $3,100 had in fact been designated for retiring debts of Mr. Lantos' 1980 general election campaign. The General Counsel therefore concluded that the two union PACs had made excessive contributions of $500 to Mr. Lantos' 1982 primary campaign rather than $3,600. Accordingly, the General Counsel recommended that "due to the small amount in question" (i.e., excessive contributions of $500), the Commission should find reason to believe that the respondents had violated the Act, but take no further action. The Commission followed the General Counsel's recommendations and closed the file on Matter Under Review (MUR) 1719.
In October 1984 Mr. Antosh petitioned the district court to take action against the FEC for dismissing his administrative complaint.
The court noted that in determining whether an agency's determinations were "arbitrary and capricious," the court's standard of review had to be "a highly deferential one...which presumes the agency's action to be valid." In the case of Mr. Antosh's complaint, however, the court found a "problem in the Commission's treatment of this matter." Specifically, although EPEC/IUOE had designated $3,100 for retiring the Lantos committee's 1980 general election debt, committee reports indicated the contributions had been made during May and June 1981, several weeks after the committee had apparently extinguished the 1980 debt in mid-April 1981.
The court concluded that "the Commission dismissed MUR 1719 because it only involved violations of $500.... The violations in fact appear to involve considerably more money, and are thus more egregious than the Commission realized. For these reasons, the Commission's dismissal of MUR 1719 was arbitrary and capricious and, thus, contrary to law." See 2 U.S.C. §437g(a)(8).
The Equal Access to Justice Act states that only those courts which have jurisdiction over the underlying civil action may consider whether to award attorney's fees and costs to a prevailing party. Upon examination of its jurisdiction over the original suit, the district court concluded that, in fact, Mr. Antosh did not have standing to bring it. Consequently, the court could not grant plaintiff's petition for award of costs and attorneys' fees.
Under Article III of the Constitution, in order to have standing to sue, an aggrieved party must "show that he personally suffered some actual or threatened injury as a result of the putatively illegal conduct of the respondent..." (i.e., the Lantos campaign). Since Mr. Antosh was an Oklahoma resident, the court concluded that he would not be injured by a California candidate's acceptance of excessive contributions. "Plaintiff's interest in the California election is no different from the interest of any citizen who wishes to ensure that candidates abide by the rules that govern elections," the court said. The court noted that this conclusion was the same as that reached by the court in July 1986 in a "virtually identical" suit brought by Mr. Antosh against the FEC. (Antosh v. FEC, Civil Action No. 86-0179.)
Source: FEC Record -- February 1985, p. 4; and January 1988, p. 8.
Antosh v. FEC, 599 F. Supp. 850 (D.D.C. 1984), 664 F. Supp. 5 (D.D.C. 1987) (ruling on att'y fees).
ANTOSH v. FEC (85-1410);
CITIZENS FOR PERCY '84 v. FEC (85-0763); COMMON CAUSE v. FEC (85-0968);
GOLAR v. FEC
On October 23, 1985, the U.S. District Court for the District of Columbia ruled on Common Cause v. FEC.1 (Civil Action No. 85-968), Golar v. FEC (Civil Action No. 85-225) and Citizens for Percy v. FEC (Civil Action No. 85-763), three suits which had challenged the FEC's dismissal of administrative complaints.
Under the election law, a suit challenging the dismissal of an administrative complaint must be filed with a district court within 60 days after it is dismissed by the FEC. 2 U.S.C. §437g(a)(8)(B). The FEC had argued that the 60-day period begins at the time the Commission votes to dismiss an administrative complaint. The court, however, concluded that the 60-day period begins when a complainant actually receives the notice of dismissal.
Based on this ruling, the court dismissed Citizens for Percy v. FEC because the Committee had filed its suit more than 60 days after both the Commission's decision to dismiss the Committee's administrative complaint and its receipt of the FEC's notice of dismissal. On the other hand, the court decided not to dismiss the suits brought by Common Cause and Mr. Golar because plaintiffs had filed their respective challenges within 60 days of FEC notification.
In Antosh v. FEC (Civil Action No. 85-1410),2 another district court reached a different conclusion on June 7, 1985. In a suit to review conciliations agreements entered into by the Commission, the court concluded that the 60-day period for filing suit began on "the date the Commission approved the conciliation agreements and they became effective." Finding that the matter had been filed within 60 days of that date, the court agreed to hear the case.
1 The district court decision in Common Cause v. FEC (85-0968) appears in alphabetical order, inserted with other Common Cause suits.
2 For the district court decision in Antosh v. FEC (85-1410), see Antosh v. FEC (86-0179).
Source: FEC Record -- December 1985, p. 7; and Annual Report 1985, p. 15.
Antosh v. FEC, 613 F. Supp. 729 (D.D.C. 1985). Citizens for Percy '84 v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9229 (D.D.C. 1985).
ANTOSH v. FEC (85-2036)
On April 4, 1986, the U.S. District Court for the District of Columbia issued an order which granted the FEC's motion for summary judgment in Antosh v. FEC and which dismissed with prejudice plaintiff Edward Antosh's complaint. (Civil Action No. 85-2036.) The court held that, under Article III of the Constitution, Mr. Antosh lacked standing to seek judicial review of the FEC's dismissal of his administrative complaint.
A resident of Oklahoma, Mr. Antosh had filed his administrative complaint with the FEC in April 1984. In the complaint, he alleged that: (1) the Engineers Political Education Committee (EPEC), the separate segregated fund of the International Union of Operating Engineers, had violated the election law by making excessive contributions to Arizona Senator Dennis DeConcini's 1982 primary campaign (the campaign); and (2) the campaign had violated the election law by accepting the excessive contributions. The Commission determined that there was reason to believe EPEC had violated the election law by making excessive contributions to Senator DeConcini's reelection campaign. However, in a tie vote, the agency failed to find reason to believe that the campaign had violated the law.
On June 21, 1985, Mr. Antosh filed suit with the district court. He claimed that the FEC's determination that the campaign had not violated the law was arbitrary and capricious. In cross motions for summary judgment, Mr. Antosh claimed that he had standing to bring suit because, under the election law, "[a]ny party aggrieved by an order of the Commission dismissing a complaint filed by such party...may file a petition with the U.S. District Court for the District of Columbia." 2 U.S.C. §437g(a)(8)(A).
In ruling that Mr. Antosh lacked standing to seek judicial review of the FEC's determination, the court referred to the requirement that an aggrieved party must "show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant...." to establish standing under Article III.
The court held that Mr. Antosh failed to meet this requirement. As a citizen of and a registered voter in Oklahoma, Mr. Antosh had "suffered no greater injury, nor likely will he in the future, as a result of the Commission's failure to order a refund, than any other U.S. citizen who is neither a resident of nor with franchise in Arizona." The court concluded that "plaintiff has no interest save his own, which is, at the moment, only that of a public-spirited spectator of Arizona elections."
Finally, the court noted that the standard for qualifying as an "aggrieved party" (eligible to seek judicial review for an administrative agency's determination) was higher than the standard for filing an administrative complaint with an agency. "Congress can permit anyone to engage in proceedings before them [administrative agencies]. But it cannot confer upon a participant at the administrative level the right to maintain a suit to review the agency's decision in federal court, no matter how grievously he may be offended by it.... "
The court did not address issues related to the merits of the FEC's administrative determinations or its own jurisdiction to review those determinations.
On August 13, 1986, the U.S. Court of Appeals for the District of Columbia Circuit granted Mr. James E. Antosh's motion to dismiss his appeal of the April 1986 decision handed down by the U.S. District Court.
Source: FEC Record -- June 1986, p. 8; and October 1986, p. 7.
Antosh v. FEC, 631 F. Supp. 596 (D.D.C. 1986).
ANTOSH v. FEC (86-0179)
On July 15, 1986, the U.S. District Court for the District of Columbia issued an order which granted the FEC's motion for summary judgment in Antosh v. FEC and which dismissed with prejudice plaintiff Edward Antosh's complaint. (Civil Action No. 86-0179.) The court held that, under Article III of the Constitution, Mr. Antosh lacked standing to seek judicial review of the FEC's dismissal of his administrative complaint.
Mr. Antosh filed suit against the FEC on grounds that, in two complaints, the agency's failure to order refunds of respondents' excessive contributions was contrary to law. The administrative complaints concerned excessive contributions made respectively by two labor organizations to Senators Edward Kennedy (Matter Under Review (MUR) 1637) and Paul Sarbanes (MUR 1696) in 1984. The contributing committees were the Engineers Political Education Committee (EPEC), the Sheet Metal Workers International Association Political Action League (SMWIA) and the American Federation of Government Employees' Political Action Committee (AFGE). Having found that the respondents violated the law, the Commission required the labor organizations to pay civil penalties for their violations. Refunds by the candidates, however, were not required.
In ruling that Mr. Antosh lacked standing to seek judicial review of the FEC's determination, the court referred to recent decisions in two "virtually identical" suits filed by Mr. Antosh (Antosh v. FEC, Civil Action Nos. 85-1410 and 85-2036). In those rulings, the court held that Mr. Antosh had failed to meet the eligibility requirement for standing under Article III of the Constitution. Under this requirement, an aggrieved party must "'show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the respondent.... '" Noting that the excessive contribution alleged in Mr. Antosh's suit had been made to Senatorial candidates in Massachusetts and Maryland , the court concluded that "plaintiff thus fails to satisfy the constitutional requisite of 'injury-in-fact.'"
Nor was the court persuaded by plaintiff's claim that he had suffered "injury-in-fact" in making contributions to nonconnected political committees which had, in turn, made expenditures in connection with the Sarbanes and Kennedy reelection campaigns "because he is not eligible to vote in either Massachusetts or Maryland."
Source: FEC Record -- September 1986, p. 5.
Antosh v. FEC, No. 86-179, (D.D.C. July 18, 1986).
On October 24, 1983, the U.S. Court of Appeals for the Eleventh Circuit issued an en banc opinion in Athens Lumber Company v. FEC upholding the constitutionality of 2 U.S.C. §441b(a) of the Federal Election Campaign Act (the Act). (Civil Action No. 82-8102.) The court's decision also reversed an earlier order by the U.S. District Court for the Middle District of Georgia which had dismissed the case on grounds that: (1) plaintiffs lacked standing to bring suit under the Act; and (2) plaintiffs failed to present a justiciable controversy for the federal courts' consideration. The appeals court remanded the case to the district court for entry of a judgment in favor of the FEC.
The Athens Lumber Company and its President John P. Bondurant filed the suit with the Georgia district court on July 27, 1981. Pursuant to Section 437h(a) of the Act,1 plaintiffs asked the district court to certify their questions concerning the constitutionality of 2 U.S.C. §441b(a) to the en banc appeals court for the Eleventh Circuit. Plaintiffs claimed that this provision of the election law abridged First and Fifth Amendment rights by prohibiting corporations, labor organizations and national banks from making contributions and expenditures in connection with federal elections.
Plaintiffs further asked that the FEC be enjoined from initiating enforcement proceedings against them if the Athens Lumber Company participated in federal elections. At the same time, however, plaintiffs said that the company would not make expenditures or contributions in connection with federal elections until either: (1) 2 U.S.C. §441b was repealed or declared unconstitutional; or (2) the company obtained an opinion of counsel from the Commission stating that the proposed expenditures did not violate any federal or state law or regulation. Plaintiffs further argued that their uncertainty about a possible violation of the election law had deterred them from exercising their First and Fifth Amendments rights, thereby causing them irreparable harm.
In an opinion issued on February 9, 1982, the Georgia district court dismissed the suit. (Civil Action No. 81-79-ATH.) The court held that, under Section 437h(a) of the election law, only the following types of plaintiffs had standing to bring suit: the national committee of a political party, individuals eligible to vote in Presidential elections and the FEC. Consequently, the court found that the Athens Lumber Company lacked standing to bring suit. While the court recognized that Mr. Bondurant was an eligible voter, he too lacked standing to bring suit since the corporation-not Mr. Bondurant-planned to make the expenditures.
Moreover, the district court held that plaintiffs had not presented a justiciable case or controversy ripe for the court's consideration. The court concluded that "it is obvious that the statute under attack in no way interferes with the way that the plaintiff corporation through its plaintiff president conducts its corporate affairs...." Similarly, the court found that Mr. Bondurant had not presented a justiciable claim because he was "free to independently expend his personal funds [in federal elections], including dividends from the corporate plaintiff without limitation." Moreover, the court found that Athens Lumber Company was only seeking an advisory opinion because the shareholders had not voted to spend any corporate funds in connection with federal elections as long as Section 441b remained in force.
On October 22, 1982, a three-judge panel of the Eleventh Circuit court of appeals reversed the judgment of the district court, finding that Mr. Bondurant did have standing to bring suit and to raise those issues pertaining to Athens Lumber Company's participation in federal elections. Moreover, the court found that the suit raised justiciable claims because, if Athens Lumber Company were to make contributions and expenditures in connection with federal elections, both Mr. Bondurant and the corporation would be subject to civil and criminal prosecution. The panel then certified to the en banc Eleventh Circuit eight constitutional questions adopted from appellants' complaint.
In upholding the constitutionality of Section 441b, the en banc Eleventh Circuit court of appeals stated: "Viewing the substantive constitutional issues as being controlled by the Court's unanimous opinion in Federal Election Commission v. National Right to Work Committee, 459 U.S. 197 (1982), and for the reasons there stated, we find the limitations and prohibitions of which appellants complain to be constitutional."
On March 19, 1984, the Supreme Court dismissed an appeal brought by plaintiffs in Athens Lumber Company v. FEC. Citing a lack of jurisdiction over the appeal, the Court treated it as a request for discretionary review (i.e., a petition for a writ of certiorari) and declined the request. (U.S. Supreme Court No. 83-1190) The high Court's action left standing the earlier, en banc opinion of the U.S. Court of Appeals for the Eleventh Circuit.
1 Section 437h, which provides for an expedited judicial review procedure, notes that certain designated parties "may institute such actions in the appropriate district court of the United States...to construe the constitutionality" of the Act. The district court is then directed to certify appropriate constitutional questions to the court of appeals sitting en banc.
Source: FEC Record -- January 1984, p. 10; and May 1984, p. 7.
Athens Lumber Company, Inc. v. FEC, 531 F. Supp. 756 (M.D. Ga. 1982), rev'd, 689 F.2d 1006 (11th Cir. 1982), 718 F.2d 363 (11th Cir. 1983) (en banc), appeal dism'd, cert. denied, 465 U.S. 1092 (1984).
AUGUSTI AND AUGUSTI FOR CONGRESS v. FEC
On April 26, 2005, the U.S. District Court for the Western District of Tennessee granted in part the Commission’s motion to dismiss this case, and on August 10, the plaintiff voluntarily dismissed the complaint. The court found that Mark A. Augusti lacked standing to challenge the FEC’s final determination against Mark A. Augusti for Congress (the Committee) and its treasurer. The court also found that Mr. Augusti could not act as the Committee’s pro se legal counsel and gave the Committee 30 days to retain a licensed attorney or the case would be dismissed for failure to prosecute. Mr. Augusti informed the court on June 2 that he did not intend to retain counsel for the Committee.
On June 30, 2003, the Commission found reason to believe that the Committee had filed its 2002 Year End report 26 days late. 2 U.S.C. §434(a). On May 19, 2004, the Commission made a final determination that the Committee had violated 2 U.S.C. §434(a) and assessed a $750 civil money penalty. 11 CFR 111.43. The Commission did not accept the treasurer’s absence from the country until mid-January as an “extraordinary circumstance” that prevented her from timely filing the report. 11 CFR 111.35(b)(1)(iii).
On June 2, 2004, Mr. Augusti replaced the treasurer, and on June 16, he and the Committee filed a complaint in the U.S. District Court for the Western District of Tennessee. The plaintiffs asked the court to review a final determination and a civil penalty assessed by the Commission under its administrative fines regulations.
In their complaint, the plaintiffs alleged that the FEC Reviewing Officer’s recommendation that the Commission find the Committee in violation of 2 U.S.C. §434(a) and assess a civil penalty did not take into account a conversation on or about February 24, 2003, between the Committee’s treasurer at the time and an FEC staff member. The plaintiffs alleged that by failing to include the substance of that telephone conversation in the record for review, “the FEC negligently and inappropriately assessed a monetary penalty against the Campaign.” The plaintiffs asked the court to set aside the final determination and monetary penalty.
The court granted the Commission’s motion to dismiss the case with respect to Mr. Augusti, finding that he lacked standing to challenge the administrative determination because he was not named as a respondent in the Commission’s final determination and order. The court also found that Mr. Augusti could not challenge the Commission’s final determination with respect to the Committee because he is not a licensed attorney. Although a litigant may appear in federal court either pro se or through counsel, a corporation or association, such as a political committee, must be represented by a licensed attorney. See Rowland v. California Men’s Colony, 506 U.S. 194, 201-02 (1993) and Cousino v. Nowicki, No, 97-1905, 1998 WL 708700, at *1 (6th Cir. Oct. 2, 1998).
The court did not find that dismissal of the case with respect to the Committee was warranted. Although Mr. Augusti cannot represent the
Committee in federal court, he did represent the Committee before the
Commission. The court determined, as a result, that “the error was attributable to the candidate’s ignorance of the procedural rules applicable in federal court.” The court ordered the Committee to retain a licensed attorney to represent it in this action within 30 days of the court’s order. On June 2, 2005, Mr. Augusti informed the court that he would not be hiring counsel for the Committee and thus, he was withdrawing the complaint. On August 10, 2005, the Court signed an order dismissing the case.
Source: FEC Record --January 2005 [PDF]; October 2005 [PDF].
On March 27, 1990, the Supreme Court ruled that a Michigan state law prohibiting independent expenditures by corporations was constitutional. Reversing a Sixth Circuit U.S. Court of Appeals decision in Austin v. Michigan State Chamber of Commerce, the Court said that the state could prohibit corporations from using their treasury funds to make independent expenditures in connection with state elections.
The suit originated in a 1985 district court complaint filed by the Michigan State Chamber of Commerce. The Chamber is a nonstock, nonprofit incorporated membership organization funded by dues. Three quarters of its members are for-profit corporations.
The Chamber sought to make an independent expenditure for a newspaper advertisement supporting a candidate for the state legislature. Although the Chamber had established a separate segregated fund for political purposes (which could lawfully have been used to make the expenditure), the organization wanted to purchase the ad with its general treasury funds. Finding that section 54(1) of the Michigan Campaign Finance Act appeared to prohibit independent expenditures made with corporate treasury funds, the Chamber filed suit against Richard Austin, Michigan's Secretary of State, challenging the constitutionality of the state law.
The law was upheld by the district court; the appeals court overturned the lower court's decision, finding the prohibition unconstitutional as applied to the Chamber.
The Court held that the Michigan law, which permitted corporations to set up segregated political funds, was narrowly tailored to serve the compelling state interest of preventing the distortions in the political process that might result from allowing corporations to spend their general treasury funds to express their political views. "This potential for distortion," the Court said, "justifies §54(1)'s general applicability to all corporations"-regardless of their size or earnings-because all corporations "receive from the state the special benefits conferred by the corporate structure." Thus, the burden imposed on free speech by section 54(1) was permissible.
The Court further held that the Chamber did not qualify for the constitutional exemption to the ban on corporate spending set forth in FEC v. Massachusetts Citizens for Life, Inc. (MCFL), 479 U.S. 238 (1986). In that decision, the Court addressed the federal election law's prohibition against corporate independent expenditures and found that the law was unconstitutional as applied to MCFL, a small, nonprofit corporation. The Court found that three characteristics of MCFL qualified the organization for an exception (based on the First Amendment) from the federal law's general ban on corporate spending because they negated the government's interest in preventing the threat or appearance of corruption.
The three features of MCFL that exempted it from the ban on corporate spending were that MCFL:
Was a nonprofit corporation established to promote political ideas and not to engage in business activities;
Had no shareholders or other persons with a claim on its assets or earnings; and
Was not set up by a corporation and had an established policy not to accept donations from corporations or labor organizations.
With regard to the first characteristic, the Court observed that, unlike MCFL, the Chamber's activities were not limited to political and public educational purposes. The Chamber's bylaws set forth several purposes beyond politics, including, for example, the promotion of ethical business practices, the provision of group insurance for members and litigation on behalf of the Michigan business community.
The Chamber also failed to meet the second of the MCFL criteria. The Court concluded, "[W]e are persuaded that the Chamber's members are more similar to the shareholders of a business corporation than to the members of MCFL." Because the Chamber provided its members with several nonpolitical benefits and services, members had an economic disincentive to withdraw support from the organization even if they disagreed with its political views. In the MCFL case, the Court had stressed that the MCFL's lack of shareholders or other financially affiliated persons meant that members had no disincentive to disassociate from the group.
With respect to the third MCFL feature, the Court noted that here "the Chamber differs most greatly from the Massachusetts organization." While "MCFL was not established by, and had a policy of not accepting contributions from, business corporations," three fourths of the Chamber's members were business corporations, and the organization's treasury contained corporate funds in the form of membership dues. "Because the Chamber accepts money from for-profit corporations, it could, absent application of §54(1), serve as a conduit for corporate political spending," the Court concluded.
Finally, the Court rejected the Chamber's claim that, because the Michigan law did not include a similar ban on political expenditures by labor organizations, it was underinclusive. The Court noted that although unincorporated labor organizations had power to accumulate wealth, they did not have the special legal privileges enjoyed by incorporated organizations, such as limited liability and perpetual life. The Court further distinguished unions from corporations like the Chamber by pointing out that the Constitution precludes unions from having the power to compel members to support their political activities. "[T]he funds available for a union's political activities more accurately reflect members' support for the organization's views than does a corporation's general treasury," the Court said.
The Chamber claimed that section 54(1) violated the Equal Protection Clause of the Fourteenth Amendment because it did not apply the restrictions to unincorporated associations having the ability to raise large amounts of money or to corporations in the news media.
Having clarified that a compelling state interest in preventing corruption justified the restrictions on political activity by corporations, the Court rejected the Chamber's arguments with respect to the application of the prohibition to unincorporated entities. Corporate status, the Court said, was a state-granted privilege that facilitated the amassing of wealth, the source of the threat of corruption.
The Court also affirmed that the limited "media exception" in the state law for news stories and editorials disseminated by corporations operating in any of the news media did not constitute a breach of equal protection because of the unique public informational and educational role that such organizations play. "The media exception ensures that the Act does not hinder or prevent the institutional press from reporting on and publishing editorials about newsworthy events."
Source: FEC Record -- May 1990, p. 5.
Austin v. Michigan State Chamber of Commerce, 856 F.2d 783 (6th Cir. 1988), rev'd, 494 U.S. 652, 110 S. Ct. 1391 (1990).