Court Opinion

ID: 4312991
Source: CourtListenerOpinion
Date Created: 2018-09-17 19:00:35.388855+00
Date Added: 2024-06-11T07:49:35.047159
License: Public Domain

United States Court of Appeals
                             FOR T HE DISTRICT OF COLUMBIA CIRCUIT
                                       ____________
No. 18-5261                                                  September Term, 2018
                                                                       1:16-cv-00259-BAH
                                                        Filed On: September 15, 2018
Citizens for Responsibility and Ethics in
Washington and Nicholas Mezlak,

              Appellees

       v.

Federal Election Commission,

              Appellee

Crossroads Grassroots Policy Strategies,

              Appellant

              BEFORE:        Henderson, Millett, and Wilkins, Circuit Judges

                                            ORDER

       Upon consideration of Crossroads Grassroots Policy Strategies' emergency motion
for a stay pending appeal, the responses thereto, the reply, the motion for leave to file a
surreply, and the lodged surreply, it is

       ORDERED that the motion for leave to file a surreply be granted. The Clerk is
directed to file the lodged surreply. It is

        FURTHER ORDERED that the emergency motion for a stay pending appeal of the
district court’s order vacating 11 C.F.R § 109.10(e)(1)(vi) be denied. Appellant has not
satisfied the stringent requirements for a stay pending appeal. See Nken v. Holder, 556
U.S. 418, 434 (2009); D.C. Circuit Handbook of Practice and Internal Procedures 33
(2018).

                                              A
       The question in this case is whether the plain text of the Federal Election Campaign
Act, 52 U.S.C. §§ 30101 et seq., forecloses a Federal Election Commission (“Commission”)
regulation that sharply narrows the obligation of independent committees to disclose
                 United States Court of Appeals
                             FOR T HE DISTRICT OF COLUMBIA CIRCUIT
                                              _

significant donations to support independent expenditures specifically intended to influence
the outcome of a federal election. The Federal Election Campaign Act, id. § 30104(c),
expressly requires all persons who are not political committees—whom we shall call
“independent committees”—to file quarterly reports that, inter alia, identify “each person
who made a contribution in excess of $200 to the person filing such statement which was
made for the purpose of furthering an independent expenditure.” Id. § 30104(c)(2)(C)
(emphasis added). Even more broadly, Section 30104(c)(1) requires that “[e]very
[independent committee] who makes independent expenditures in an aggregate amount
or value in excess of $250 during a calendar year shall file a statement containing the
information required under [§ 30104](b)(3)(A) for all contributions received by such person.”
Id. § 30104(c)(1) (emphasis added). The referenced subsection (b)(3)(A) requires the
disclosure of all those who make contributions, see id. § 30104(b)(3)(A), with contributions
defined broadly as including donations intended to “influenc[e] any election for Federal
office[,]” id. § 30101(8)(A)(i), or funds “earmarked for political purposes,” Buckley v. Valeo,
424 U.S. 1, 80 (1976).
       The vacated regulation that Appellant Crossroads Grassroots Policy Strategies
(“Crossroads”) wishes to revive pending appeal, by contrast, requires independent
committees to report each person who contributed more than $200 if, and only if, that
donor’s contribution “was made for the purpose of furthering the reported independent
expenditure.” 11 C.F.R. § 109.10(e)(1)(vi) (emphasis added).

                                              B

        This case arose out of press reports of a 2012 event hosted by American
Crossroads, a “super PAC” affiliated with Crossroads, in Tampa, Florida. Karl Rove briefed
attendees at the meeting that an anonymous donor had presented Crossroads with a three
million dollar “matching challenge” to support the Republican challenger in the 2012 Ohio
Senate race. W ithout specifying precisely how the funds should be spent, the anonymous
donor made clear they should be dedicated to supporting the Republican in the Ohio race.
The matching challenge prompted an additional $1.3 million for “general use in Ohio.” Dist.
Ct. Op. at 7.
        Appellees Nicholas Mezlak and Citizens for Responsibility & Ethics in Washington
(collectively, “Mezlak”) filed an administrative complaint with the Commission alleging that
Crossroads unlawfully failed to report contributions it received for those independent
expenditures supporting the Republican in the Ohio election, including the disclosure of the
donors who funded the advertisement campaign. The nature of the allegations prompted

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                 United States Court of Appeals
                              FOR T HE DISTRICT OF COLUMBIA CIRCUIT
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the Commission’s Office of General Counsel to observe the discrepancy between the
scope of disclosure required by the Federal Election Campaign Act and the Commission’s
regulation, 11 C.F.R. § 109.10(e)(1)(vi). See First General Counsel’s Report, dated Mar.
7, 2014 (“FGCR”) at 12 n.57 (explaining that subsection (c)(2), which “specifically mandates
disclosure of the identity of those who contribute for the purpose of furthering ‘an
independent expenditure,’” may take “an arguably more expansive approach” to disclosure
than the challenged regulation). The General Counsel nonetheless recommended
dismissal of the complaint in reliance on the regulation. Id. at 13. The Commission
deadlocked 3-3 on Mezlak’s complaint. Mezlak then filed suit in district court challenging
that decision. 52 U.S.C. § 30109(a)(8).
        In a thorough opinion, the district court ruled that the regulation could not survive
review under step one of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837 (1984). By order dated August 3, 2018, the court (i) ruled that the
Commission’s dismissal of Mezlak’s complaint was “contrary to law” and remanded the
complaint for reconsideration, and (ii) vacated the regulation. The district court then stayed
its vacatur for 45 days to allow the agency, if it chose, to promulgate interim regulations that
comport with 52 U.S.C. § 30104(c). Dist. Ct. Op. at 112.
       Crossroads sought an emergency stay of the district court’s decision with this court.
The Commission has advised that it does not seek a stay and that it has already acted on
the remanded complaint, ordering it dismissed. According to the parties, the Commission’s
dismissal of the complaint moots Crossroads’ challenge to that portion of the district court’s
order.
                                               C
       Crossroads’ motion for a stay fails every prong of the showing required to obtain the
extraordinary relief of a stay pending appeal. See Nken, 556 U.S. at 433-434.
                                               1
        With respect to one of the two “most critical” prongs of the test for a stay, Nken, 556
U.S. at 434 (internal quotation marks and citations omitted), Crossroads has not
established a likelihood of success on the merits. More specifically, as the Commission’s
General Counsel worried, the regulation squeezes the Act’s explicit disclosure obligation
beyond what the plain statutory text can bear. In particular, the regulation shrinks the
statutory duty to disclose contributions intended for “an expenditure” down to only those
donations intended to support “the” specific “reported independent expenditure.” 11 C.F.R.
§ 109.10(e)(1)(vi). In doing so, the Commission’s regulation confines the reporting
obligation to only that small subset of donors who not only earmark their contributions for
a particular cause or candidate for the specific purpose of influencing the outcome of an

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                  United States Court of Appeals
                              FOR T HE DISTRICT OF COLUMBIA CIRCUIT
                                               _

identified election, but also pick the script of an independent expenditure that matches the
actual form reported. Thus, the regulation empties Subsection (c)(1)’s disclosure obligation
of a large portion of its intended operation.
       Crossroads tries to marshal an argument that could give its appeal some promise,
but is unable to demonstrate any “likelihood” of success, and certainly not a “substantial”
one. Pursuing America’s Greatness v. FEC, 831 F.3d 500, 505 n.1 (D.C. Cir. 2016).
       Crossroads’ chief contention is that “an” independent expenditure in 52 U.S.C.
§ 30104(c)(2)(C) really means “the” specific independent expenditure reported. Under that
view, donations expressly given to support the running of a battery of as-yet unidentified
advertisements expressly for or against a particular candidate need not be reported. As
for the disclosure requirement of subsection (c)(1), Crossroads insists that statutory text
is mere preamble. See Crossroads’ Motion for Stay at 7.
        The problem is that, to support its proposed interpretation, Crossroads relies on
(debatable) legislative history and post-enactment congressional inaction. But where, as
here, the “text alone is enough to resolve th[e] case,” Pereira v. Sessions, 138 S. Ct. 2105,
2114 (2018), we will not “resort to legislative history to cloud a statutory text that is clear,”
Ratzlaf v. United States, 510 U.S. 135, 147–148 (1994). And in the absence of textual
ambiguity, the suggestion of congressional acquiescence cannot change the plain meaning
of enacted text. Texas Dep’t of Housing & Cmty. Affairs v. Inclusive Cmtys. Project, Inc.,
135 S. Ct. 2507, 2540 (2015); see Johnson v. Transportation Agency, 480 U.S. 616, 672-
673 (1987) (Scalia, J., dissenting).
        Crossroads, fairly enough, emphasizes the age of the regulation. But unlike fine
wines, regulations that so materially rewrite and recast plain statutory text do not improve
with age. See also Henslee v. Union Planters Nat’l Bank & Trust Co., 335 U.S. 595, 600
(1949) (Frankfurter, J., dissenting) (“Wisdom too often never comes, and so one ought not
to reject it merely because it comes late.”).
       Crossroads next insists that, if the text were plain, the district court’s decision would
have been shorter. That argument does not hold water. In actuality, the district court’s
opinion spent just twelve pages analyzing the plain text of two interrelated statutory
provisions: (c)(1) and (c)(2)(C). The balance of the opinion is devoted to background
sections, dismantling Crossroads’ and the Commission’s varied efforts to manufacture
ambiguity, and disposing of other issues in the case.
        Crossroads’ remaining contentions fare no better. Crossroads asserts that Mezlak’s
challenge comes too late. But the law is well-settled that “those [adversely] affected” by
an agency’s application of a rule “may challenge that application on the ground that it
conflicts with the statute from which its authority derives.” Weaver v. Federal Motor Carrier

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                 United States Court of Appeals
                              FOR T HE DISTRICT OF COLUMBIA CIRCUIT
                                               _

Safety Admin., 744 F.3d 142, 145 (D.C. Cir. 2014) (internal quotation marks and citation
omitted); AT&T Co. v. FCC, 978 F.2d 727, 734 (D.C. Cir. 1992); NLRB Union v. Federal
Labor Relations Auth., 834 F.2d 191, 195-196 (D.C. Cir. 1987). By relying on the
challenged regulation to dismiss Mezlak’s complaint and to deny Mezlak’s statutory right
to information, the Commission cannot insulate its regulation from a challenge as to its legal
invalidity.
        Finally, for the first time in its reply brief, Crossroads suggests vaguely that the
Commission’s recent dismissal of Mezlak’s complaint on remand after the district court’s
decision somehow “moots” Mezlak’s challenge to the regulation. That argument is wrong
chronologically since it post-dates the decision under review, and, in any event, the
dismissal on remand actually indicates that the regulation is continuing to deprive Mezlak
of the information it seeks and certainly is capable of repetition.
        In short, Crossroads’ appeal shows little prospect of success—an arguably fatal flaw
for a stay application. See Aamer v. Obama, 742 F.3d 1023, 1043 (D.C. Cir. 2014)
((declining to decide whether likelihood of success is “an independent, free-standing
requirement, or whether, in cases where the other three factors strongly favor issuing an
injunction, a plaintiff need only raise a serious legal question on the merits”) (internal
quotation marks omitted)).
                                               2
         Crossroads fares no better on the second “critical’ factor—showing irreparable harm
to its legal interests. See Nken, 556 U.S. at 434. Irreparable harm must be “both certain
and great[,]” and “actual and not theoretical.” Wisconsin Gas Co. v. FERC, 758 F.2d 669,
674 (D.C. Cir. 1985). Crossroads’ asserted injury is neither.
         First, Crossroads says that the district court’s temporary stay of the vacatur has left
it with inadequate guidance three months before an election, chilling both contributions and
its “ability” to speak. Crossroads’ Motion for Stay, Affidavit of Steven Law (“Law Aff.”) at
2-3 ¶¶ 8,10. Any lack of clarity attributed to the district court’s temporary stay order expires
in 72 hours (on the 45th day after the district court’s decision), so cannot possibly support
a stay pending appeal.
       As for the claims that Crossroads’ donors had an “implicit understanding” that they
could make donations for independent expenditures intended to influence the outcome of
an election without their contributions being disclosed, Law Aff. at 2 ¶ 6, the Supreme Court
has been clear: Parties who assert a chilling effect from disclosure requirements must offer
actual “evidence that * * * members may face * * * threats or reprisals.” Citizens United v.
FEC, 558 U.S. 310, 370 (2010). Crossroads has made no effort to do that. Nor does

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                  United States Court of Appeals
                               FOR T HE DISTRICT OF COLUMBIA CIRCUIT
                                                _

Crossroads offer any briefing or argument to establish that an intrusion on private donors’
implicit understanding constitutes an irreparable injury to Crossroads itself.
       Nor does Crossroads identify any actual independent expenditures it has made this
quarter or had intended to make in the coming months that are deterred by the order. It
says only that it “would like to maintain the ability to continue making independent
expenditures[,]” and feels “deterred and constrained” from doing so. Law Aff. at 2-3 ¶ 10.
Nothing in the district court’s order prohibits the making of independent expenditures. The
order only affects quarterly reporting.
       In short, the irreparable injuries asserted fail to rise beyond the speculative level.
See United States v. Finance Comm. to Re-Elect the President, 507 F.2d 1194, 1200 (D.C.
Cir. 1974).
                                                3
        Finally, the harm to Mezlak’s and the public’s interest weighs against a stay. It is
well settled that “[d]isclosure [requirements are] justified * * * on the ground that they [ ] help
citizens make informed choices in the political marketplace.” Citizens United, 558 U.S. at
369 (internal quotation marks and citations omitted). And here, where the complained-of
disclosure covers only those who donate money for the intended purpose of influencing an
election, the interest in anonymity does not, for purposes of an exceptional stay, outweigh
Mezlak’s and the public’s countervailing interests in receiving important voting information
and in transparency. See Buckley, 424 U.S. at 68 (describing disclosure as “the least
restrictive means of curbing the evils of campaign ignorance and corruption”);
SpeechNow.org v. FEC, 599 F.3d 686, 696 (D.C. Cir. 2010) (en banc) ((justifying the
Federal Election Campaign Act’s disclosure requirements “based on a governmental
interest in providing the electorate with information about the sources of political campaign
funds”) (internal quotation marks, some formatting, and citations omitted)).
                                          Per Curiam
                                                             FOR THE COURT:
                                                             Mark J. Langer, Clerk

                                                     BY:     /s/
                                                             Lynda M. Flippin
                                                             Deputy Clerk

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