Court Opinion

ID: 9915522
Source: CourtListenerOpinion
Date Created: 2024-01-05 17:01:12.280433+00
Date Added: 2024-06-11T13:15:05.407233
License: Public Domain

United States Court of Appeals
           FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 19, 2023             Decided January 5, 2024

                          No. 22-5339

                   CAMPAIGN LEGAL CENTER,
                         APPELLANT

                               v.

               FEDERAL ELECTION COMMISSION,
                         APPELLEE

          Appeal from the United States District Court
                  for the District of Columbia
                      (No. 1:22-cv-01976)

     Megan P. McAllen argued the cause for appellant. With
her on the briefs were Erin Chlopak and Allison Walter.

     Greg J. Mueller argued the cause for appellee. With him
on the brief were Lisa J. Stevenson, Kevin Deeley, and Harry
J. Summers.

    Before: SRINIVASAN, Chief Judge, HENDERSON, Circuit
Judge, and ROGERS, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
ROGERS.
                               2
     ROGERS, Senior Circuit Judge: The Federal Election
Commission dismissed an administrative complaint by the
Campaign Legal Center alleging campaign finance violations
by two presidential campaign committees.              Although
dismissals predicated upon the Commission’s exercise of
prosecutorial discretion are excepted from judicial review,
Campaign Legal contends that the Commission’s invocation of
discretion was dependent upon legal analysis and thus subject
to review under the Federal Election Campaign Act. The
district court concluded the Commission’s reliance on
“quintessential” considerations of prosecutorial discretion
stood “apart” from its legal analysis and precluded review. In
view of circuit precedent, we affirm.

                               I.

     The Federal Election Campaign Act (“FECA”), 52 U.S.C.
§ 30101 et seq., “seeks to remedy any actual or perceived
corruption of the political process.” FEC v. Akins, 524 U.S. 11,
14 (1998). At its heart are disclosure requirements that the
Supreme Court has stated are “particularly effective means of
arming the voting public with information” and “deter[ring]
actual corruption and avoid[ing] the appearance of corruption”
in today’s politics. McCutcheon v. FEC, 572 U.S. 185, 223–
24 (2014). The Act requires covered “political committee[s]”
to “file reports of receipts and disbursements” with the Federal
Election Commission that identify “each person to whom an
expenditure . . . in excess of $200” was made, as well as the
“date, amount, and purpose” of the expenditure. 52 U.S.C. §
30104(a)(1), (b)(5)–(6). The Commission of six voting
members, no more than three of whom may be “affiliated” with
the same political party, id. § 30106(a)(1), (a)(2)(A), may
investigate potential violations on its own initiative or in
response to an administrative complaint, which may be filed by
any person who “believes” that a statutory violation has
                                3
occurred. Id. §§ 30107(a), 30109(a). If at least four
Commissioners find “reason to believe” a complaint’s
allegations, the Commission “shall” investigate and pursue
appropriate remedies. Id. § 30109(a)(2), (4)–(6). In the
absence of four affirmative “reason to believe” votes, the
Commission may dismiss the complaint. Id. §§ 30106(c),
30109(a)(2). The Commissioners who vote against proceeding
must issue an explanatory statement, which is treated as
expressing the Commission’s rationale and forms the basis of
judicial review. Campaign Legal Ctr. v. FEC, 31 F.4th 781,
785 (D.C. Cir. 2022).

      “Any party aggrieved by” the dismissal may seek judicial
review on the ground that the Commission acted “contrary to
law.” 52 U.S.C. § 30109(a)(8)(A)–(C). Relief is appropriate
if the Commission relied on “an impermissible interpretation
of the Act,” or if the dismissal was otherwise “arbitrary or
capricious, or an abuse of discretion.” Orloski v. FEC, 795
F.2d 156, 161 (D.C. Cir. 1986). Upon a judicial determination
that the dismissal was improper, the Commission has 30 days
“to conform with such declaration,” or the complainant may
file suit. 52 U.S.C. § 30109(a)(8)(C).

     Access to judicial review of Commission dismissals,
however, is far from absolute. “In our system of separated
powers, an agency’s decision not to enforce the law is an
exercise of executive discretion and therefore generally
unreviewable by the courts.” Citizens for Resp. & Ethics v.
FEC (“New Models”), 993 F.3d 880, 882 (D.C. Cir. 2021).
“[R]econciling” this principle with FECA’s “unusual” judicial
review provision, the court has held that “a Commission
nonenforcement decision is reviewable only if the decision
rests solely on legal interpretation.” Id. at 884 (citing Citizens
for Resp. & Ethics in Washington v. FEC (“Commission on
Hope”), 892 F.3d 434, 441–42 (D.C. Cir. 2018)).
                               4
     Campaign Legal Center filed an administrative complaint
in July 2020 alleging that former President Trump’s campaign
committee (“Donald J. Trump for President, Inc.”) and a joint
fundraising committee (“Trump Make America Great Again
Committee”) failed, as required by 52 U.S.C. § 30104(b), to
report more than three quarters of a billion dollars in payments
to sub-vendors and staff – concealing the expenditures by
routing them through sham payments to two LLCs controlled
by senior campaign figures. See Admin. Compl., MUR 7784
(July 24, 2020). In May 2022, the Commission deadlocked 3-
3 on finding “reason to believe” the complaint. After
deadlocking 3-3 twice more, on a second “reason to believe”
vote and a separate vote on whether to dismiss the complaint
pursuant to the Commission’s prosecutorial discretion under
Heckler v. Chaney, 470 U.S. 821 (1985), the Commission
voted 4-2 to close the file and dismiss the complaint.

     The three Commissioners who voted against finding
“reason to believe” explained that “the legal support for
enforcement” of the alleged reporting violations was
“remarkably thin,” and that “the only arguable factual support
comes from inferences based upon media reports citing
anonymous sources.” Statement of Reasons of Chairman Allen
J. Dickerson and Commissioners Sean J. Cooksey and James
E. “Trey” Trainor, III, MUR 7784 (June 9, 2022) at 1
(hereinafter “2022 Statement”).        Refusing to “pursue
enforcement-by-rumor,” they “instead voted to dismiss this
matter as an exercise of prosecutorial discretion pursuant to
Heckler v. Chaney.” Id. After elaborating on factual and legal
issues, id. at 2–12, they stated:

       We foresee significant litigation risk if we were to act
       on [this record] and, as importantly, we decline to
       permit the investigatory resources of the federal
       government to be mobilized on such a basis. This is
                                5
       particularly so here, where the size and scope of the
       proposed investigation could quickly consume an
       outsized share of the resources available to the
       Commission.

Id. at 12. They also observed that the “regulatory environment
is uncertain at best,” citing a related pending Commission
rulemaking petition, id., and noted that, although “numerous
campaigns have used similar vendor arrangements in the past,
[] the Commission has declined to pursue enforcement action”
in those cases. Id.

     Campaign Legal filed suit, alleging that the dismissal was
“contrary to law.” Compl. (July 8, 2022); see 52 U.S.C. §
30109(a)(8)(A). The district court granted the Commission’s
motion to dismiss the case pursuant to Federal Rule of Civil
Procedure 12(b)(6), concluding that the Commissioners
invoked discretion in a manner precluding judicial review
under this court’s precedents. Campaign Legal Ctr. v. FEC,
1:22-cv-01976 (D.D.C. Dec. 8, 2022) (“Mem. Op.”). It found
the “practical” concern “that the ‘size and scope of the
proposed investigation’ could quickly consume the resources
available to the Commission” reflected “quintessential
consideration[s] in the exercise of prosecutorial discretion” that
“stand[] apart from the legal questions” at issue. Mem. Op. at
16–17 (quoting 2022 Statement at 12). The district court also
noted the discussion of the “uncertain regulatory environment.”
Mem. Op. at 17.

                               II.

    On appeal, Campaign Legal contends that the
Commissioners “in no way ‘relied on’ discretionary factors to
dismiss plaintiff’s administrative complaint, but rather simply
characterized their conclusive legal determinations on the
                              6
merits as an exercise of prosecutorial discretion.” Appellant’s
Br. 20 (quoting Mem. Op. at 16). Because “each of the putative
discretionary justifications . . . was expressly dependent upon
legal and factual judgments about the allegations in the
complaint,” Campaign Legal maintains that even though the
“Commissioners couched their rationale in superficially
prudential terms, such ‘magic words’ cannot manifest
independent discretionary justifications where none exist.” Id.
at 30–31. For instance, “asserted agency resource concerns are
impossible to separate from their underlying judgment that
there was ‘insufficient factual or legal support’ to move
forward.” Id. at 34 (quoting 2022 Statement at 12–13).
Because the Commissioners reached that conclusion after
applying “improper legal and evidentiary tests,” it is
“impossible to know whether” absent that flawed analysis their
“stated concerns about ‘the size and scope of the proposed
investigation’ would still obtain.” Id. at 35 (quoting 2022
Statement at 12).

     This court has distinguished two different types of
Commission refusals to prosecute administrative complaints.
“When interpreting FECA, the Commission renders a legal
determination ‘not committed to the agency’s unreviewable
discretion.’” New Models, 993 F.3d at 884 (quoting Comm’n
on Hope, 892 F.3d at 441). If “the Commission declines an
enforcement action ‘based entirely on its interpretation of the
statute,’” the decision is reviewable pursuant to the “contrary
to law” provision. Id. Because FECA does “not limit the
Commission’s enforcement discretion [] by providing specific
requirements for the exercise of that discretion,” when the
Commission        “weigh[s]     []    practical    enforcement
considerations,” FECA “provides ‘no law to apply.’” Id.
(quoting Comm’n on Hope, 892 F.3d at 439–40).
                               7
     Commission on Hope was the court’s first Commission
discretionary refusal to prosecute case and held unreviewable
a dismissal where the relevant Commission statement “placed
their judgment [] on the ground of prosecutorial discretion.”
892 F.3d at 439. The court reiterated this principle as applied
to statements relying on both law and discretion in New
Models. There, the Commissioners issued a thirty-two page
statement “dedicated most[ly]” to “legal analysis of the alleged
violations[,]” concluding that the organization did not qualify
as a covered “political committee” under the statute. 993 F.3d
at 883. The concluding paragraph invoked Heckler, explaining
that the Commissioners “were also declining to proceed with
enforcement ‘in exercise of their prosecutorial discretion.’” Id.
(citation omitted). The Commissioners had added only that
“given the age of the activity and the fact that the organization
appears no longer active, proceeding further would not be an
appropriate use of Commission resources.” Id. (citation
omitted).

      The court held this brief invocation of discretion was
sufficient to bar judicial review, as it “explicitly relie[d] on
prosecutorial discretion” and “expressed discretionary
considerations at the heart of [Heckler’s] holding, such as
concerns about resource allocation” and “potential evidentiary
. . . hurdles.” Id. at 885. Those discretionary considerations,
the court said, were a “distinct ground[]” on which the
“Commission’s decision to dismiss . . . rested.” Id. at 884.
Rejecting the notion that the inclusion of “lengthy” legal bases
for dismissal made the decisions reviewable, see id. at 895–96
(Millett, J., dissenting), the court stated that “[a]lthough []
analysis of statutory requirements standing alone may be
amenable to judicial review,” the “Commission’s legal analysis
here is not reviewable because it is joined with an explicit
exercise of prosecutorial discretion.” Id. at 885–87. Because
“[t]he Commission’s invocation of prosecutorial discretion []
                               8
rested squarely on prudential and discretionary considerations”
and was “offered [] in addition to its legal analysis,” the court
concluded that there was “no room [] to selectively exercise
judicial review based on whether the Commission places more
or less emphasis on discretionary factors when declining to
pursue enforcement.” Id.

     Just so here. The Commissioners’ “explicit[] reli[ance]”
on prosecutorial discretion, id. at 885, followed nearly a full
page of analysis discussing several classic criterion in the
exercise of prosecutorial discretion. They observed that the
proposed investigation was inconsistent with the agency’s
priorities and resource allocation given its “size and scope,”
worried that the agency was unlikely to succeed in pursuing the
allegations and that enforcement carried “significant litigation
risk,” characterized enforcement as deviating from the
Commission’s past practice, and articulated why it was
inappropriate given what they regarded as a shifting and
uncertain regulatory landscape and the complaint’s undue
reliance on anonymously-sourced reporting. 2022 Statement
at 12. These “discretionary considerations [lie] at the heart of
[Heckler’s] holding” and implicate “concerns about resource
allocation” and “potential evidentiary . . . hurdles.” New
Models, 993 F.3d at 885; see Heckler, 470 U.S. at 831.

     Some of these considerations appear distinct from and lack
a clear nexus to any reviewable legal analysis. As the district
court observed, the concern that the “the size and scope of the
proposed investigation could quickly consume an outsized
share of the resources available to the Commission,” 2022
Statement at 12, “stands [particularly] apart.” Mem. Op. at 17.
An agency’s careful management of its limited resources is a
core policy prerogative and its choice not to pursue especially
resource-intensive matters ordinarily does not center on the
legal merits, but rather the agency’s pragmatic estimation of
                               9
the resource demands of the proposed action, its size, duration,
and personnel requirements. These are the types of prudential
judgments that the Supreme Court has stated are “peculiarly
within” the agency’s “expertise” and form the core of
unreviewable discretion. Heckler, 470 U.S. at 831–32.

     To the extent that Campaign Legal views this discussion
as inextricably intertwined with antecedent legal analysis, it
maintains that the Commissioners regarded the legal and
evidentiary support for the complaint as unduly dim and over-
estimated the potential resource demands of pursuing its
claims. But it does not follow that the Commission’s
observation about the “size and scope” of the investigation
must be regarded as fundamentally premised on substantive
legal determinations. It was evident from the complaint that
the alleged violations were significant in terms of their
estimated value and the complexity and timespan of the alleged
obfuscatory mechanism. Citing several dozen news reports,
the complaint claimed to identify a scheme involving at least
two “conduit” organizations, at least four enumerated ultimate
payee subvendors, and hundreds of payments for a range of
purposes over multiple years. Admin. Compl. ¶¶ 26–48, 70–
91. Campaign Legal itself embraces undisputed practical
measures of the allegations’ scope, claiming that “the potential
amount in violation, $781,584,527, would have been the largest
in the Commission’s history” and involved the “lion’s share”
of the Trump team’s “spending for the entire presidential
election cycle,” the most expensive in United States history.
Appellant’s Br. 1. These intuitive indicia of size and resource
intensiveness bear no discernable relationship to theoretically
reviewable legal inquiry.

     Campaign Legal maintains that the grammar of the
relevant sentence evinces the interconnection between the
Commissioners’ concern over the “size and scope” of the
                                10
investigation and antecedent legal conclusions. The relevant
phrasing reads in full: “This is particularly so here, where the
size and scope of the proposed investigation could quickly
consume an outsized share of the resources available to the
Commission.” 2022 Statement at 12. Campaign Legal reads
“[t]his is particularly so here” as suggesting that the following
statement about the “size and scope” of the investigation is
premised on preceding legal determinations. Even were this
contention not forfeited since raised for the first time at oral
argument, it is unpersuasive. The key phrasing in New Models
was invoked in a sentence that otherwise expressly referred to
the Commission’s preceding legal conclusions, yet the court
concluded the statement was “explicit []” in its invocation of
discretion. 993 F.3d at 885. Here the relevant sentence stands
on its own and is not surrounded by discussion of legal
conclusions. Analogizing to New Models, where the
Commission’s statement dedicated thirty-one pages to the
merits and only a single concluding sentence to discretion,
Mem. Op. at 15 (citing New Models, 993 F.3d at 885), the
district court correctly observed that it was “clearer in this case
than it was in New Models” that the Commissioners invoked
discretion as an “independent reason for dismissal.” Mem. Op.
at 17.

     Nor does the phrase “[t]his is particularly so” appear to
refer to any substantive legal determination. The immediately
preceding sentence reads: “We foresee significant litigation
risk if we were to act on [this record] and, as importantly, we
decline to permit the investigatory resources of the federal
government to be mobilized on such a basis.” 2022 Statement
at 12. These too are prudential considerations at the heart of
Heckler’s conception of enforcement discretion — not
reviewable legal determinations. Cf. Heckler, 470 U.S. at 831.
Any reviewable legal analysis is at least two steps away from
the Commission’s stated concern about the investigation’s
                              11
“size and scope.” That is too attenuated a link to support the
logical leap that intuitively prudential discussion conceals
reviewable legal conclusions.

     Finally, Campaign Legal urges the court to reconsider the
propriety of the Commission on Hope–New Models rule due to
an alleged conflict with the Supreme Court’s opinion in Akins
and several of this court’s FECA holdings. Appellant’s Br. 36–
41. But “[o]ne three-judge panel does not have the authority to
overrule another three-judge panel.” LaShawn A. v. Barry, 87
F.3d 1389, 1395 (D.C. Cir. 1996) (en banc). In New Models,
993 F.3d at 890–95, the court addressed these same objections
and explained why its holding was consistent with Akins and
this court’s FECA precedents. Rehearing en banc was
subsequently denied. New Models II, 55 F.4th 918 (D.C. Cir.
2022).

     Because the Commission’s invocation of discretion was
offered “in addition” to its legal analysis, as in New Models,
993 F.3d at 886, the 2022 Statement of Reasons is
unreviewable, and upon de novo review, Stop This Insanity Inc.
Emp. Leadership Fund v. FEC, 761 F.3d 10, 13 (D.C. Cir.
2014), the court affirms the dismissal of the complaint.