Court Opinion

ID: 9488895
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:58:59.357838+00
Date Added: 2024-06-11T17:53:10.433699
License: Public Domain

SENTELLE, Circuit Judge,
concurring in part and dissenting in part:
Although I agree with most of the majority’s analysis, I write separately because I reason somewhat differently, and more importantly, because I cannot agree with the majority’s conclusion that the “stand alone” portion of the regulation can be severed and saved. First, I agree with the majority that the Commission’s interpretation of the Act falls as unreasonable under Chevron analysis, but I would also strike the regulation as arbitrary under the Administrative Procedure Act.
1. Chevron
We apply the Chevron analysis where, as here, we are reviewing an interpretation of a statute by the agency that Congress has chosen to administer that statute. This is a two-step analysis, in which we first determine whether the statute is ambiguous in the sense that Congress has not clearly precluded the agency’s interpretation, and then determine whether the agency’s interpretation is reasonable. See 467 U.S. 837, 843-45, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984). I agree with the majority that the Commission’s interpretation in this case plainly surmounts the first step of Chevron. The statute does not unambiguously delineate what a political committee’s “best efforts” entail. *411The statute’s bare reference to “best efforts” does not preclude the Commission from expecting a little more from political committees than it has in the past.
I further agree that the Commission’s new rule stumbles on Chevron's, second step. The Commission argues that its rule merely establishes one possible means by which a political committee may demonstrate “best efforts,” but the language of the new rule is clear and to the contrary. According to the rule, “the treasurer and the committee will only be deemed to have exercised best efforts” if the committee follows the procedure prescribed by the Commission. 11 C.F.R. § 104.7(b) (emphasis added). It is not reasonable for the Commission to declare that only strict adherence to its selected format will qualify as a political committee’s best efforts. The phrase “best efforts” itself implies a range of actions should be acceptable. Nothing in the record suggests that the procedure endorsed by the Commission is the only maimer in which a committee could make an effective request for information. In fact, testimony suggests that some political committees had adopted other reasonable approaches to obtain the information prior to the promulgation of the new rule. Based on this record, the Commission cannot decide that its chosen means by which a political committee obtains information categorically precludes compliance with the “best efforts” provision by any other efforts a political committee attempts.
The unreasonableness of the Commission’s new rule may be easily illustrated. If a political committee sends seven follow-up letters, each proclaiming the prescribed statement in headline-sized type, but notes in small print in each that the law requires disclosure only from political committees, not political contributors, then that committee has not demonstrated best efforts under 11 C.F.R. § 104.7(b)(2). If a committee sends seventy times seven follow-up letters, but in each asks after the health of the contributor’s family, it also has not shown best efforts under the new rule. In either case, the fault is not in the committee — which has done all that the statute could have conceivably envisioned — but in the unreasonableness of the rule promulgated by the Commission.
2. Arbitrary and Capricious
That the rule permits only the one narrow means of demonstrating “best efforts” becomes more unreasonable upon examination of the procedure mandated by the Commission. The Commission demands that all response material of a political committee intone that “[f]ederal law requires political committees” to disclose information about “each individual” donor to the FEC. The prescribed statement is clearly misleading in this context. Federal law does not require an individual to divulge his employer or his occupation, only that a political committee that receives such information must in turn disclose it to the FEC. Yet, a donor reading the required statement as it is currently worded is not likely to discern that distinction. Cf. Bates v. State Bar of Arizona, 438 U.S. 350, 383 & n. 37, 97 S.Ct. 2691, 2708 & n. 37, 53 L.Ed.2d 810 (1977) (noting that the legal sophistication of the audience is a key consideration in determining whether legal advertising is misleading). Even if the donor should notice that the statement by its terms only binds a political committee, the donor may still conclude that the statement intends to inform him that federal law compels a donor to divulge the information requested. Were it otherwise, a reasonable person would be right to wonder why this statement is even mentioned to the donor.
The required format of the follow-up request exacerbates the misleading nature of the prescribed warning. The Commission has very much limited the statements that may appear in the follow-up request because it fears that a political committee may hide its request for information amidst other visual clutter. Because of these limits on the request, however, a committee cannot include even a single clause to explain the warning in that follow-up. If a committee wishes to inform its contributors of the true extent of the law, it must send or otherwise convey an accompanying, but separate, explanation of the statement at its own additional expense in order to reassure the donor that it is not illegal to maintain his privacy.
*412The unreasonably misleading nature of the prescribed statement, coupled with the Commission’s prohibition of additional explanation, provides sufficient grounds for us to hold the regulation arbitrary. Courts have suggested that an agency cannot mislead an individual. See, e.g., Covington v. Dep’t of Health & Human Serv., 750 F.2d 937, 942 (Fed.Cir.1984) (holding a retirement to be involuntary when the result of a misleading notice issued by an agency); Shields Enterprises, Inc. v. United States, 28 Fed.Cl. 615, 633 (1993) (indicating that if an agency’s procurement procedure was misleading, it would be arbitrary). Likewise, the Commission cannot attempt to coerce through misleading statements of the law the individual disclosure that Congress chose not to require.
Not only is the prescribed statement misleading, but the Commission also did not sufficiently justify its choice of language for that statement in its decision. When an agency rejects other suitable alternatives without discussion, this court cannot reassure itself that the agency did not act arbitrarily by choosing an option that suffers a significant flaw. See City of Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1169 (D.C.Cir.1987). Here, the Commission did not solicit or encourage comment on the specific language to be used in such a prescribed warning. In discussing the language actually selected, the Commission only compared one statement, which told the donor that a committee was required to disclose donor information to the FEC, with a single other statement, which said that a committee was required by law to ask the donors for information. See 58 Fed.Reg. at 57,727. The Commission then briefly explained its preference for the former based on the single factor that the former may have contributed to higher levels of disclosure. The Commission apparently never considered many other obvious — and more accurate — explanations of the law. For example, the Commission offered no justification for not prescribing a more complete statement of the Act, which would note that a political committee must only use its best efforts to obtain certain information from persons who contribute more than $200 and that it must then disclose any such information obtained to the FEC. Failure of an agency to discuss obvious alternatives “has led uniformly to reversal.” City of Brookings Mun. Tel. Co., 822 F.2d at 1169 (citations omitted). I would thus find the statement of the law prescribed by the Commission in 11 C.F.R. § 104.7(b) to be an abuse of its discretion. See 5 U.S.C. § 706(2)(A) (1994).
Conclusion
I agree that the Commission may change its interpretation of “best efforts.” It may not, however, unreasonably limit the possible avenues for a political committee to show “best efforts” to a single format. I also agree that it may not prescribe a misleading statement of the law as part of a required format without permitting a political committee some opportunity to explain that statement. Because the Commission’s interpretation is not a reasonable one, I would reverse the judgment of the District Court. I do not follow the majority’s reasoning that the requirement for a stand-alone mailing separate from the requirements of the contents of that mailing can be severed and saved. I would simply remand for the invalidation of the entire regulation.