Opinion ID: 187188
Heading Depth: 1
Heading Rank: 5

Heading: Conduct Standard: Firewall Safe Harbor

Text: When it revised the conduct standard with regard to former employees and vendors following Shays II, the FEC created a new firewall safe harbor provision to protect vendors and organizations in which some employees are working on a candidate's campaign and othersseparated by a firewallare working for outside groups making independent expenditures. Under the new regulation, [t]he conduct standards. . . are not met if the commercial vendor, former employee, or political committee has established and implemented a firewall that meets the requirements of paragraphs (h)(1) and (h)(2) of this section. 11 C.F.R. § 109.21(h). Those requirements are: (1) The firewall must be designed and implemented to prohibit the flow of information between employees or consultants providing services for the person paying for the communication and those employees or consultants currently or previously providing services to the candidate who is clearly identified in the communication...; and (2) The firewall must be described in a written policy that is distributed to all relevant employees, consultants, and clients affected by the policy. Id. According to the regulation, [t]his safe harbor provision does not apply if specific information indicates that, despite the firewall, information about the candidate's or political party committee's campaign plans, projects, activities, or needs that is material to the creation, production, or distribution of the communication was used or conveyed to the person paying for the communication. Id. Shays challenged this regulation, arguing that it was so vague as to invite near-certain circumvention, undermining BCRA's purpose, and that the Commission failed not only to justify it, but also to explain why it changed its mind after rejecting a similar provision in 2003, violating the APA. The district court agreed with both arguments. Shays III, 508 F.Supp.2d at 53-56. Challenging the district court's ruling and acknowledging that the regulation provides few details on what constitutes an acceptable firewall, the FEC argues that a firewall is more effective if established and implemented by each organization in light of its specific organization, clients, and personnel. 71 Fed.Reg. at 33,206. The Commission emphasizes that [a]n organization cannot come within the firewall safe harbor simply by alleging that it has an internal firewall; rather, [a]n entity seeking to use the firewall safe harbor must be `prepared to provide reliable information... about [its] firewall, and how and when the firewall policy was distributed and implemented.' Appellant's Opening Br. 33 (quoting 71 Fed.Reg. at 33,207). Moreover, the FEC insists, it provided a good reason for implementing the safe harbor: to make it easier for candidates and independent organizations to hire consultants, vendors, and former employees thus facilitating protected speechwithout fear of being falsely accused of improper coordination. See 71 Fed.Reg. at 33,206. And it claims it did explain why it has now adopted a firewall safe harbor despite rejecting a similar proposal in 2003, namely in the interim it approved a firewall created by EMILY's List and found it sufficient to protect against coordination. See id. ; Coordinated Communications: Proposed Rules, 70 Fed.Reg. 73,946, 73,955 (2005). Though we think this a close question, we agree with the FEC. The district court and Shays are undeniably correct that the regulation is vague as to what constitutes an acceptable firewall, but when Congress has not specified the level of specificity expected of the agency, as here, the agency is entitled to broad deference in picking the suitable level. Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 217 (D.C.Cir.2007) (citation omitted). Moreover, [t]he APA does not require that all the specific applications of a rule evolve by further, more precise rules rather than by adjudication. Shalala v. Guernsey Mem'l Hosp., 514 U.S. 87, 96, 115 S.Ct. 1232, 131 L.Ed.2d 106 (1995). Thus, there is no basis for suggesting that the agency has a statutory duty to promulgate regulations that, either by default rule or by specification, address every conceivable question. Id. Instead, the Commission has authority to flesh out its rules through adjudications and advisory opinions. In addition, the Commission's sensible conclusion that firewalls will be more effective if established and implemented by each organization in light of its specific organization, clients, and personnel, 71 Fed.Reg. at 33,206, represents just the kind of agency expert judgment to which we owe deference. See, e.g., North Carolina v. FERC, 112 F.3d 1175, 1189 (D.C.Cir.1997) (So long as the Commission has examined the relevant data and provided a reasoned explanation supported by a stated connection between the facts found and the choices made, we will defer to the agency's expertise. (citation omitted)). Shays doubts whether the Commission will enforce the safe harbor provision in a way that actually requires meaningful firewalls, but as a court reviewing this facial challenge we must presume that the Commission will enforce its rule in good faith. See Sullivan v. Everhart, 494 U.S. 83, 94, 110 S.Ct. 960,108 L.Ed.2d 72 (1990) (holding that in facial challenges to regulations courts must presume agencies will implement them in good faith). We also believe that the FEC adequately justified the rule and its departure from past practice. Hardly contrary to BCRA, the regulation makes it easier for candidates and organizations to engage in protected speech by helping them hire consultants and employees without fear of false accusations of coordination. Moreover, the Commission's favorable experience with the EMILY's List firewall represents a perfectly reasonable basis for its change of heart since the 2003 rulemaking.