Opinion ID: 3171275
Heading Depth: 3
Heading Rank: 2

Heading: The Burden Rationale

Text: This second rationale displayed the FEC’s concern not for the interests of contributors or the public, but with the onus placed on the disclosing entity to curate an exhaustive list of every individual who provided more than $1,000. The FEC explained, Furthermore, witnesses at the Commission’s hearing testified that the effort necessary to identify those persons who provided funds totaling $1,000 or more to a corporation or labor organization would be very costly and require an inordinate amount of effort. Indeed, one witness noted that labor organizations would have to disclose more persons to the Commission under the ECs rules than they would disclose to the Department of Labor under the Labor Management Report and Disclosure Act. 72 Fed. Reg. at 72911. As further support for its explanation, the FEC noted that “all commenters who addressed disclosure of electioneering communications stated that corporations and labor organizations should not be required to report the sources of funds that made up their general treasury funds.” Id. And one commenter urged an exemption for nonprofits, stating that “nonprofit corporations have a wide variety of sources of income, and unlimited disclosure would create a heavy burden for them.” Id. Van Hollen suggests this explanation is inadequate for a couple of reasons. First, he argues the FEC did not support its assertion that identifying contributors would be “very costly and require an inordinate amount of effort” with anything more than “conclusory assertions.” Van Hollen Br. at 39. But 22 this isn’t entirely accurate. The Commission cited to one commenter who testified “that labor organizations would have to disclose more persons to the Commission under the [electioneering communications] rules than they would disclose to the Department of Labor,” and another commenter who testified that the “reporting requirements would far exceed all other reporting requirements that currently apply to nonprofit organizations, such as reporting to the Internal Revenue Service.” 72 Fed. Reg. at 72911. These assertions, relied upon by the FEC, are uncontradicted in the record, and “[w]ithout any contrary evidence to disprove these findings,” Van Hollen has “not shown any arbitrary and capricious action.” Agape Church v. FCC, 738 F.3d 397, 410 (D.C. Cir. 2013). Second, Van Hollen suggests the FEC could have mitigated the cost of compliance by clarifying that business income (such as from customers or shareholders) and union dues do not entail “truly donative acts” and are therefore exempt from disclosure. Van Hollen Br. at 43. He points out that the FEC took a similar approach in promulgating the 2003 version of the disclosure rules, clarifying that “individuals are required to disclose donations received, which does not include salary, wages, or other compensation for employment.” 68 Fed. Reg. at 414. By exempting these sources of revenue, which are less relevant to voters anyway, the overall compliance costs of the regulation would drop. But this alternative would only reduce the disclosure burdens borne by for-profit corporations and unions. Nonprofit corporations, which, as we’ve already noted, faced reporting requirements that “would far exceed all other reporting requirements that currently apply to nonprofit[s],” obtain no benefit from this alternative, and the FEC was justifiably concerned about their compliance costs, too. Accordingly, this was not a viable alternative. Since agencies are only required 23 to consider “significant and viable” alternatives, Nat’l Shooting Sports Found., Inc. v. Jones, 716 F.3d 200, 215 (D.C. Cir. 2013) (emphasis added), we find no error in the FEC’s decision not to adopt this only partially mitigating alternative. To be sure, the FEC’s explanation was far from ideal, and it is more difficult to discern its analytical path on this point. For instance, what are the Department of Labor’s disclosure requirements, and how much more burdensome was the existing rule? The IRS’s? Would different rules for nonprofits solve most concerns? What is actually more burdensome about disclosing all donations as opposed to only a subset of donations? And does that justify a change in policy that will have a markedly decreased effect on the amount of disclosures? The answers to these questions may exist and may likely support the rule, but the FEC’s explanation did not provide them. Ultimately, however, State Farm’s standard is “[n]ot particularly demanding,” and the FEC’s burden rationale leaves just enough detail for us to see “what major issues of policy were ventilated and why the agency reacted to them as it did.” Republican Nat’l Cmte v. FEC, 76 F.3d 400, 407 (D.C. Cir. 1996).