Court Opinion

ID: 2664304
Source: CourtListenerOpinion
Date Created: 2014-04-04 03:35:46.855515+00
Date Added: 2024-06-11T11:24:56.709913
License: Public Domain

UNITED STATES DISTRICT COURT
                     FOR THE DISTRICT OF COLUMBIA

_________________________
                            )
STEVE SCHONBERG,            )
                            )
          Plaintiff,        )
                            )
          v.                )     Civil Action No. 10-02040
                            )     (JWR-CKK-RWR)
Federal Election            )
Commission, et al.,         )
                            )
          Defendants.       )
                            )

                          MEMORANDUM OPINION

     Currently pending before the court designated to hear and
determine plaintiff Steve Schonberg’s second amended complaint
are four motions: (1) Schonberg’s motion to trifurcate the
proceedings; (2) defendant Federal Election Commission’s motion
to dissolve the three-judge district court; (3) the Commission’s
motion to dismiss the second amended complaint; and (4) defendant
United States’ motion to dismiss the second amended complaint.
This opinion addresses only the motion to dissolve the three-
judge district court filed by the Commission.       For the following
reasons, we grant the motion.

                                  I.

     As set forth in the second amended complaint, Schonberg, a
Florida resident, ran unsuccessfully for Congress in November
2010; he intends to be a candidate for the same office in
November 2012.     See Second Am. Compl. ¶¶ 11, 12.    On November 24,
2010, Schonberg filed a complaint for a declaratory judgment and
an injunction against the Commission, alleging that certain
                                   -2-

provisions of the Federal Election Campaign Act of 1971 (“FECA”),
Pub. L. No. 92-225, 86 Stat. 3, and the Bipartisan Campaign
Reform Act of 2002 (“BCRA”), Pub. L. No. 107-155, 116 Stat. 81,
facially violate the Due Process, Equal Protection, Emoluments,
Appointments, and Congressional Compensation Clauses of the
United States Constitution.    Compl. ¶¶ 1-3.   The complaint
focuses on the purported competitive advantages BCRA and FECA
afforded incumbent Florida Congressman Cliff Stearns in defeating
Schonberg’s 2010 congressional bid and would continue to afford
Stearns in the 2012 election cycle.      See, e.g., id. ¶ 20.   In
Schonberg’s view, the statutes “permit and encourage corruption
in Congress,” rather than “prevent gifting, bribery, and
influence peddling.”   Id. ¶ 13.    Schonberg also filed an
application requesting that his constitutional challenges to BCRA
be adjudicated by a three-judge district court.      See BCRA §
403(a)(1), (d), 116 Stat. 113-14 (reprinted at 2 U.S.C. § 437h
note); see also LCvR 9.1.     The application for designation was
granted on December 8, 2010, and the following day Judge Rogers
and Judge Kollar-Kotelly were named to constitute, with Judge
Roberts to whom the case was initially assigned, this three-judge
district court.

     On December 23, 2010, the Commission filed a motion to
dissolve the three-judge district court on three grounds: the
purported constitutional challenges to BCRA were actually
challenges to FECA requiring adjudication by the U.S. Court of
Appeals for the District of Columbia Circuit sitting en banc, see
2 U.S.C. § 437h; Schonberg lacked constitutional standing; and
the claims were otherwise insubstantial or frivolous.     Schonberg
filed an amended complaint four days later repeating verbatim his
constitutional challenges to BCRA and FECA and his view that they
afford incumbent federal officeholders unconstitutional
                                 -3-

competitive advantages over challengers.   See Am. Compl. ¶¶ 1-3,
16, 30.   It also contained several additions and clarifications.
In particular, the amended complaint named the United States as
an additional defendant, alleged that the statute governing
“Representational allowance for Members of House of
Representatives,” 2 U.S.C. § 57(b) (hereinafter “the MRA”),
violated various constitutional provisions, and specified which
claims involved only BCRA, Am. Compl. ¶¶ 153-62.   Responding to a
minute order, the Commission indicated its intent to pursue its
motion to dissolve because “the amendments [to the complaint] do
not add any claims that may be appropriately considered by a
three-judge court under section 403 of [BCRA], nor do the
amendments provide standing or present any substantial claim that
would support the convening of a three-judge court.”   Comm’n
Notice at 1.

     Schonberg then filed a motion to trifurcate the proceedings
on January 21, 2011.1   The motion acknowledged that the amended
complaint brought claims arising under three statutes, each
requiring adjudication by a separately constituted court – this
three-judge district court for BCRA, the Court of Appeals sitting
en banc for FECA, and a single-judge district court for the MRA.
Schonberg also noted his intention to file a second amended
complaint to facilitate trifurcation.   This court, upon receiving
the parties’ status reports, by minute order set a schedule for
the filing of the second amended complaint and the parties’
motions and responsive briefs.   Schonberg filed a second amended

     1
       In addition, Schonberg filed a motion to disqualify
Commission counsel on conflict of interest grounds. This court
denied the motion. See Schonberg v. Fed. Election Comm’n, No.
1:10-cv-02040, 2011 WL 311038 (D.D.C. Feb. 1, 2011) (per curiam)
(three-judge district court).
                                    -4-

complaint, the Commission re-filed its motion to dissolve the
three-judge panel to address new allegations, and the Commission
and the United States sought dismissal.

       The second amended complaint again alleges that FECA, BCRA,
and the MRA violate the Constitution and thus unlawfully provide
incumbent officeholders with unfair competitive advantages in
federal elections.    See Second Am. Compl. ¶¶ 1-4, 16.      It largely
tracks the text of the first amended complaint and at times
provides further factual elaboration.     Although the second
amended complaint reflects Schonberg’s request for trifurcation,
he nonetheless suggests that because his MRA claims “are
inextricably intertwined with [his] BCRA and FECA claims, they
should be heard by both the Three-Judge Court and the en banc
Court of Appeals.”    Id. ¶ 8(c).    As to BCRA, Schonberg clarified
that his challenge on constitutional grounds concerned sections
101, 202, 203, 204, 211, 214, and 301.      See id. ¶ 232.    However,
in a response brief, he narrowed his BCRA claim to section 301,
signaling his abandonment of the remaining BCRA constitutional
challenges.    See Pl.’s Resp. to Comm’n’s Mot. to Dissolve at 1 &
n.1.

                                    II.

       The question presented by the Commission’s motion to
dissolve is whether Schonberg’s constitutional challenge to BCRA
§ 301, codified as amended at 2 U.S.C. § 439a, is properly before
this three-judge district court.      The Commission’s principal
argument is that the claim, when properly viewed, presents a
challenge to FECA, which can only be heard by the Court of
Appeals sitting en banc.
                                  -5-

     Despite the mandatory language of BCRA § 403(a)(1) that a
constitutional challenge to the statute “shall be heard by a 3-
judge court convened pursuant to section 2284 of title 28, United
States Code,” 116 Stat. 114, it is well-settled that Schonberg
must first present a “substantial claim” and “justiciable
controversy.”   Feinberg v. Fed. Deposit Ins. Corp., 522 F.2d
1335, 1338 (D.C. Cir. 1975) (citing Idlewild Bon Voyage Liquor
Corp. v. Epstein, 370 U.S. 713, 715 (1962)); see also Rostker v.
Goldberg, 453 U.S. 57, 61 n.2 (1981).   As regards justiciability,
the Supreme Court explained that where a three-judge district
court has been convened, it may find that dissolution is
necessary because it lacks jurisdiction or the plaintiff has
failed to demonstrate standing:

           Here the three-judge court dismissed the complaint for
           lack of “standing.” This ground for decision, that the
           complaint was nonjusticiable, was not merely short of
           the ultimate merits; it was also, like an absence of
           statutory subject-matter jurisdiction, a ground . . .
           upon which the three-judge court could have dissolved
           itself, leaving final disposition of the complaint to a
           single judge.

Gonzalez v. Automatic Emps. Credit Union, 419 U.S. 90, 99-100
(1974); accord 17A Charles Alan Wright, Arthur R. Miller, Edward
H. Cooper & Vikram David Amar, Federal Practice and Procedure §
4235, at 209-10 (3d ed. 2007) (hereinafter “Wright & Miller”).

     The Supreme Court’s conclusion on justiciability in
McConnell v. FEC, 540 U.S. 93, 229 (2003), overruled in part on
other grounds by Citizens United v. FEC, 130 S. Ct. 876, 913
(2010), is controlling.   That case concerned (in part) a
challenge to the constitutionality of BCRA § 307, which specifies
campaign contribution limits for federal elections.   See 2 U.S.C.
§ 441a.   A three-judge district court was convened pursuant to
                                   -6-

BCRA § 403(a)(1).    Framing the issue as one of standing, the
Supreme Court on direct appeal concluded that the plaintiffs’
challenge was nonjusticiable for two reasons.     First, the
contribution limits at issue had been enacted decades earlier as
part of FECA; “[BCRA] § 307 merely increased and indexed for
inflation certain FECA contribution limits.”      McConnell, 540 U.S.
at 229.    To the extent the plaintiffs’ claim attacked the
constitutionality of the FECA contribution limits, the Court
stated that it “ha[d] no power to adjudicate a challenge to the
FECA limits . . . because challenges to the constitutionality of
FECA provisions are subject to direct review before an
appropriate en banc court of appeals, as provided in 2 U.S.C. §
437h, not in the three-judge District Court convened pursuant to
BCRA § 403(a).”     Id.   Second, to the extent the plaintiffs’ claim
was directed at BCRA rather than FECA, the Court held that,
despite having jurisdiction to hear the challenge, the plaintiffs
lacked standing.    “[I]f the Court were to strike down the
increases and indexes established by BCRA § 307, it would not
remedy the . . . plaintiffs’ alleged injury because . . . the
limitations imposed by FECA . . . would remain unchanged.”       Id.
In short, a favorable ruling would not redress the plaintiffs’
alleged injury.

        These twin rationales apply with full force to foreclose
this court’s adjudication of Schonberg’s BCRA claim.     Like BCRA §
307, the provisions of BCRA § 301, which set forth the
permissible and impermissible uses of campaign contributions
accepted by successful candidates for federal office, derive from
FECA.    As it existed under FECA, 2 U.S.C. § 439a specified that
“[a]mounts received by a candidate as contributions that are in
excess of any amount necessary to defray his expenditures, and
any other amounts contributed to an individual,” could be used to
                                  -7-

“defray any ordinary and necessary expenses incurred in
connection with his or her duties as a holder of Federal office,”
contributed to certain charitable entities, or directed to “any
other lawful purpose, including transfers without limitation to
any national, State, or local committee of any political party.”
2 U.S.C. § 439a (2000).   It also prohibited candidates from
converting the funds to personal use.    Id.   BCRA § 301 amended
this provision by listing the same permitted uses in separately
enumerated paragraphs, except for the phrase “any other lawful
purpose,” referencing donations received by individuals as
support for their holding federal office, and providing a general
definition of conversion to personal use with a non-exclusive
list of examples.   2 U.S.C. § 439a (Supp. II 2002).2

     Schonberg acknowledges the similarities and relation between
the FECA and BCRA versions of 2 U.S.C. § 439a in stating that
“[t]he list [of permitted uses] was created . . . from what was a
paragraph in the older FECA law,” while the list of prohibited
uses “perhaps ‘clarified’” rules on conversion.    Pl.’s Resp. to
Comm’n’s Mot. to Dismiss at 24.    The legislative history confirms
that the two versions are essentially the same.    The purpose of
the BCRA amendment was to “specify which candidate expenditures
from campaign funds would be considered an unlawful conversion of
a contribution or donation to personal use” by “codify[ing] the
FEC’s current regulations on the use of campaign funds for

     2
       The Consolidated Appropriations Act, 2005, Pub. L. No.
108-447, § 532, 118 Stat. 2809, 3272 (2004), reinserted the “any
other lawful purpose” language and permitted funds to be
transferred to state and local candidates, subject to the
provisions of state law. The section was amended once more in
2007 to restrict the use of campaign funds for flights on
noncommercial aircraft. See Honest Leadership and Open
Government Act of 2007, Pub. L. No. 110-81, § 601, 121 Stat. 735,
774-75.
                                -8-

personal expenses,” while leaving unchanged the allowance for
candidates to transfer excess campaign funds to political
parties.   148 CONG. REC. S2143 (daily ed. Mar. 20, 2002)
(statement of Sen. Feingold on § 301 of the McCain-
Feingold/Shays-Meehan Campaign Finance Reform Bill); see also
H.R. REP. NO. 107-131, pt. 1, at 8 (2001), reprinted in 2002
U.S.C.C.A.N. 106, 113; 148 CONG. REC. S1993-94 (daily ed. Mar. 18,
2002) (reprinting section-by-section analysis).    As such, the
change effected by BCRA § 301 is not materially greater than that
effected by BCRA § 307’s raising and indexing the contribution
limits at issue in McConnell.   Accordingly, Schonberg’s claim
that BCRA § 301 is unconstitutional is actually a challenge to
FECA, which falls outside the jurisdiction of a three-judge
district court under BCRA § 403(a)(1) and must instead be
adjudicated by the Court of Appeals sitting en banc pursuant to 2
U.S.C. § 437h.   See McConnell, 540 U.S. at 229.

     To the extent Schonberg’s second amended complaint is
directed at BCRA rather than FECA, the holding in McConnell on
standing requires dissolution of this court because he lacks
standing, failing to show redressability.     See Lujan v. Defenders
of Wildlife, 504 U.S. 555, 561 (1992).    Schonberg’s alleged
injury is based on his claim that BCRA unconstitutionally
provides incumbents with an advantage in federal elections.        See,
e.g., Second Am. Compl. ¶¶ 16-44.     As in McConnell, were this
court to hold that BCRA § 301 is unconstitutional, the
limitations imposed by FECA would remain in force.    “An
unconstitutional act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it creates no
office; it is, in legal contemplation, as inoperative as though
it had never been passed.”   Norton v. Shelby County, 118 U.S.
                                  -9-

425, 442 (1886).3   Alternatively, assuming that holding BCRA §
301 unconstitutional would render 2 U.S.C. § 439a a legal nullity
in all its iterations, this result would not further Schonberg’s
goal of more stringent regulation of the federal campaign finance
system and elimination of the alleged competitive advantages for
incumbent federal candidates.   Without a statute specifying
permissible and impermissible uses of federal campaign
contributions, the Constitution would be the only source for
controlling legal authority governing relevant conduct, see
United States v. Bounos, 730 F.2d 468, 472 (7th Cir. 1984), aside
from federal statutory prohibitions on bribery and the like and
various state laws regarding federal elections.   Schonberg has
made no showing that federal candidates, free from the
constraints imposed by 2 U.S.C. § 439a, would be more restricted
in their use of campaign funds or that the Constitution itself
forbids the pecuniary evils of the federal campaign finance
system that he alleges persist.    To the contrary, removing these
limits would exacerbate, rather than remedy, the perceived ills.
Under either view of the state of the law were Schonberg to
prevail, he fails to meet constitutional standing requirements
with respect to his BCRA claim.

     We, therefore, hold that this three-judge district court
lacks jurisdiction to consider Schonberg’s BCRA claim and we
grant the Commission’s motion to dissolve.   The second amended
complaint fails to identify a constitutional BCRA claim over
which this court has jurisdiction under BCRA § 403(a); nor has

     3
       See also United States v. Schmit, 881 F.2d 608, 614-15
(9th Cir. 1989); City of Cleveland v. United States, 166 F. 677,
680 (6th Cir. 1909); cf. McCoy v. Augusta Fiberglass Coatings,
Inc., 593 F.3d 737, 744 (8th Cir. 2010) (Arkansas law); Kovacs v.
First Union Home Equity Bank (In re Huffman), 408 F.3d 290, 294
(6th Cir. 2005) (Ohio law).
                               -10-

Schonberg shown the injuries he alleges in the second amended
complaint would be redressed by a favorable decision of this
court holding BCRA § 301 unconstitutional.   In the absence of
jurisdiction, this court cannot address Schonberg’s MRA claim
concurrently with his BCRA claim because, as he asserts, they are
inextricably intertwined.   See Lake Carriers’ Ass’n v. MacMullan,
406 U.S. 498, 504 n.5 (1972) (holding that ancillary claims are
properly before three-judge district court “so long as there is a
nonfrivolous constitutional claim that constitutes a justiciable
controversy”).   See generally Wright & Miller § 4235, at 222-23.
Consideration of Schonberg’s motion to trifurcate and the motions
to dismiss filed by the Commission and the United States as to
his remaining claims are returned to the single-judge district
court.

                               __________/s/_____________________
                               JUDITH W. ROGERS
                               United States Court of Appeals for
                               the District of Columbia Circuit

                               __________/s/_____________________
                               COLLEEN KOLLAR-KOTELLY
                               United States District Court for
                               the District of Columbia

                               __________/s/_____________________
                               RICHARD W. ROBERTS
                               United States District Court for
                               the District of Columbia