The opinion of the court was delivered by: PARKER
The Federal Election Campaign Act of 1971, (FECA or Act) 2 U.S.C. § 431 et seq., establishes an intricate statutory scheme governing federal election campaigns. It imposes restrictions on political contributions and expenditures which apply to all phases of and participants in the election process. The Supreme Court has observed that the primary purpose of the statute is "to limit the actuality and appearance of corruption resulting from large individual financial contributions" in federal elections. Buckley v. Valeo, 424 U.S. 1, 26, 96 S. Ct. 612, 638, 46 L. Ed. 2d 659 (1976) (per curiam).
These consolidated cases
challenge the constitutionality and application of provisions of the Act, section 441b(b)(4)(A) and (C), which forbid a corporation without capital stock to solicit contributions from persons other than its members. The controversy arises from the Federal Election Commission's (FEC or Commission) charge that in 1976, the National Right to Work Committee (NRWC or Committee), unlawfully solicited contributions from persons who were not members of that organization. NRWC maintains that it has complied with the statute, or in the alternative, that the restrictions imposed are either void for vagueness or an unconstitutionally overbroad restriction on First Amendment rights.
The underlying material facts are not disputed. The parties have filed cross-motions for summary judgment. The legal memoranda, the various exhibits, submissions and the argument of counsel have been considered. The Court concludes that, as applied to NRWC, the statutory provisions in question are neither unconstitutionally vague nor overbroad, and that NRWC has violated the Act by soliciting persons who are not members of that organization.
A. The Structure of the National Right to Work Committee
The NRWC is a non-profit corporation without capital stock incorporated under the laws of Virginia. Its stated purposes as set out in the articles of incorporation are "to help make the public aware of the fact that American citizens are being required, against their will, to join and pay dues to labor organizations in order to earn a living," and that compulsory unionism violates fundamental rights.
The essential features of its structure and method of operations have been stipulated to or are otherwise clearly defined by discovery. The Committee's articles of incorporation specifically provide that it shall not have members. A board of directors is authorized to govern and manage the corporate affairs. The board is self-perpetuating; new directors are elected by majority vote of the existing board of directors. The initial board members were named directly in the articles of incorporation.
NRWC's concept of membership is elusive, at best. The Committee's bylaws contain no reference to members or membership and make no reference to any standards or criteria for membership or any rights or obligations of members. No formal corporate papers exist which describe the rights, duties, and benefits of membership in NRWC.
From 1971 through at least 1974, NRWC claimed before the Internal Revenue Service a tax exempt status as a social welfare organization. In response to a question put on federal tax forms requiring membership organizations to enter the amount allocated for political purposes, NRWC either left the space provided for response blank or filled the space with the response of "N/A." However, in a deposition filed earlier in a different proceeding before this District Court, Reed Larson, President of NRWC, stated that the "Committee acknowledges contributions as members." He added that the additional Internal Revenue Service forms required to be filed by membership organizations indicating the amounts allocated to political purposes were never filed because NRWC had no political expenditures and because it was not a membership organization.
A typical letter explains the evils of compulsory unionism and outlines NRWC's efforts to combat it through legislative action. A questionnaire is enclosed with the letter, posing general inquiries about the reader's attitude toward compulsory unionism. A space is included in the questionnaire where a person may indicate the amount of any contribution, followed by a statement that the contribution will be used to compile and publish the results of the questionnaire or to secure the passage or defeat of a particular piece of legislation.
The letters and the questionnaire do not invite the recipient to join nor do they discuss any aspect of membership in the NRWC. Indeed, nothing is recited as to how a recipient may accept or become a member.
Nonetheless, recipients who respond favorably to the inquiries, which counsel for NRWC admitted are framed to elicit favorable responses, are then sent membership cards. The questionnaires vary from mailing to mailing, and the standards regarding correct responses needed to qualify for membership are set by NRWC's president, who passes them on to the Membership Director. NRWC admits that these standards are seldom, if ever, put in writing.
The Committee recognizes two classes of "members": those who respond to the questionnaire and contribute money are deemed "active members"; those who merely respond to the questionnaire without a contribution are classified as "supporting members." On the approximate anniversary of their last donation to NRWC, all past contributors (active members) receive a new membership card and a renewal notice thanking them for their past support and requesting an additional contribution. Those who do not respond receive a second, and if necessary, a third notice. Even if these appeals are unanswered, the unresponsive are maintained on NRWC's rolls as "active members." Those who fail to contribute for two successive years are reduced in status to "supporting members." Such a member apparently retains that status indefinitely without taking any affirmative steps.
B. The Alleged Violations of FECA
The Federal Election Campaign Act restricts corporate financial participation in the electoral process. Section 441b(a) forbids a corporation from making a contribution or expenditure of money in connection with a federal election. Section 441b(b)(4)(A)(i) provides that a corporation may expend money to solicit political contributions to its separate segregated fund but only from its stockholders and its executive and administrative personnel and the families of those persons. In addition section 441b(b)(4)(C) provides that a corporation without capital stock may expend money to solicit political contributions to its separate segregated fund from its members.
On December 30, 1975 in an effort to comply with the statute, the NRWC established a separate entity, the Employee Rights Campaign Committee (ERCC) which is also a defendant in this case. This organization, controlled by NRWC, served as a separate segregated fund empowered to accept contributions and make expenditures on behalf of candidates for public office who shared NRWC's philosophy. On January 6, 1976, the NRWC formally requested the Federal Election Commission to issue an advisory opinion as to whether NRWC or ERCC could lawfully solicit contributions from "active members or supporting members of the National Right to Work Committee." Although the letter mentioned the distinction between active and supporting members, it did not reveal that NRWC's corporate charter expressly provided that the Committee had no members, nor did it explain the membership process in any detail. Later that month, on January 30, before the Commission acted on the request, the Supreme Court invalidated the means of appointing Federal Election Commissioners, thus forestalling the issuance of formal advisory opinions. Buckley v. Valeo, 424 U.S. at 140-43, 96 S. Ct. at 692-693.
Amendments to the Act curing the constitutional defects in the appointment process became effective May 11, 1976.
Four days prior to that date, however, on May 7, NRWC mailed over 34 thousand letters soliciting contributions to ERCC to be used to support candidates in the 1976 elections. In June an additional 35 thousand persons were solicited and from September 9 through 15, NRWC contacted nearly 198 thousand persons in similar solicitations.
The letters mailed during the five-month period warned the recipient that organized labor was threatening to make major gains in the 1976 congressional elections. Signed by an officer of the ERCC, the letters sought contributions to be used to support congressional and senatorial candidates who agreed with NRWC philosophy and political goals. In all, NRWC contacted approximately 267 thousand persons and raised $ 77,474. Both NRWC and ERCC concede that none of those persons solicited between May 7, and September 15, 1976 were stockholders of NRWC or known to be executive or administrative personnel of NRWC or the families of such persons. Rather they claim that NRWC is a corporation without capital stock with members and that the persons solicited in 1976 were members of NRWC. ERCC filed all the necessary disclosure reports with the FEC, including the names of those who contributed over $ 100.00.
Meanwhile, on May 26, a reconstituted Commission published proposed general regulations pursuant to the new Act and invited public comment. The regulations included a proposed definition of "members."
On June 22, the FEC advised NRWC that in light of the proposed rules, the NRWC's advisory opinion file would be closed. The letter however, invited NRWC to request an opinion as to the regulations and the statute if the proposed regulations did not satisfactorily cover a specific factual situation. NRWC renewed its request for an advisory opinion on August 31, without modifying the earlier application and without mentioning that in the interim it had mailed over 70,000 solicitation letters.
The FEC staff submitted a draft opinion to the Commission in late September, 1976. That draft was withdrawn, however, however when the staff acquired information which cast doubt on NRWC's claim to be a membership corporation.
Shortly thereafter, acting on a complaint brought by the National Committee for an Effective Congress, the FEC notified NRWC that there was "reason to believe" that NRWC had violated the Act by soliciting persons who were not members. An investigation was initiated by the Commission staff and in April, 1977, the Commissioners voted unanimously that there was reasonable cause to believe that a violation had taken place. The parties then engaged in informal conciliation conferences as required under the statute. Their conciliation efforts proved fruitless and on October 5, 1977, the Commissioners by a 6-0 vote authorized initiation of civil enforcement proceedings.
Alerted to the Commission's intention, NRWC struck first by filing on October 20, 1977, a complaint seeking injunctive and declaratory relief in District Court for the Eastern District of Virginia. The suit alleged that § 441b(b)(4) (C) of the Act, allowing solicitation of "members" was unconstitutionally vague; that the definition of "member" adopted by the FEC in its regulations and practice violated equal protection by favoring labor unions over ...