The opinion of the court was delivered by: OBERDORFER
This Federal Election Act dispute is before the Court on cross-motions for summary judgment. On October 4, 1984, the Court entered an Order granting plaintiff's motion, and requiring the Federal Election Commission ("FEC" or "Commission") to determine by October 19, 1984, whether or not there was probable cause to believe that certain persons being investigated by the Commission had violated federal election laws or show cause why it had failed to make such a determination. The Order referred to a separate memorandum to be filed. This is that memorandum.
This complaint, filed July 24, 1984, by North Carolina Congressman Charles G. Rose
against the FEC, is a sequel to another complaint filed in this Court by the same plaintiff against the same defendant on June 13, 1983. That original complaint, like the instant one, sought a declaratory judgment and injunctive relief on account of the Commission's alleged failure to take action on a letter/complaint which Congressman Rose filed with FEC on October 29, 1982. That letter/complaint charged that Jefferson Marketing, Inc. (Jefferson) had, in violation of the Federal Election Campaign Act, contributed services which produced a television advertisement used by a candidate in the Democratic primary and later, with slight modification, by the Republican candidate in the general election for Congressman from the 7th District of North Carolina. The letter/complaint also charged that a campaign committee for the Democratic primary candidate had made an illegal contribution in kind to the Republican candidate in the general election. In addition, the letter/complaint charged that the Democratic candidate in the primary had made an illegal personal contribution. Finally, the letter/complaint charged that Jefferson was a subsidiary of the National Congressional Club Committee (Congressional) and that Congressional had failed to report its subsidiary's activities to the FEC, as required by law.
According to the Commission's undisputed statement of facts under seal,
the FEC, on November 2, 1982, notified Jefferson of the complaint and of its opportunity to respond and to show cause why the Commission should take no action. Jefferson's subsequent response was deemed by the Commission to be insufficient to resolve the allegations. On May 3, 1983, the Commission, following the April 21, 1983 recommendation of its General Counsel, found reason to believe that Jefferson and others had violated the Act. On May 24, 1983, the Commission approved, and on June 2 issued, subpoenas for depositions and production of documents. On June 13, 1983, Congressman Rose filed the original complaint in this Court alleging that the Commission's failure to take final action on his 1982 complaint was contrary to law. On July 8, 1983, Jefferson and Congressional responded to the subpoenas for the production of documents. On July 27, 1983, the Office of the General Counsel submitted to the Commission a Comprehensive Investigative Report. On September 8, 1983, respondents filed supplemental responses to the subpoenas for production of documents. During the week of September 12, 1983, the Commission's legal staff deposed seven representatives of respondents including the president of Jefferson and the treasurer of Congressional.
On November 29, 1983, the Commission approved twenty pages of interrogatories for Jefferson and Congressional. On January 16, 1984, respondents replied to the Commission's interrogatories. According to the Commission, respondents did not answer some questions and did not fully answer others. Consequently, on January 31, 1984, the Commission approved the recommendation of its General Counsel and authorized the filing of a civil suit to enforce its subpoenas and compel complete responses to the interrogatories. On February 15, 1984, that suit was filed in the federal court in North Carolina. Thereupon Congressman Rose, the plaintiff here, dismissed his first suit in this Court, without prejudice.
On April 26, 1984, after the answers to the subpoenas and the interrogatories, the Commission received from a Raleigh, North Carolina newspaper an 84-page package of internal Jefferson and Congressional documents which the newspaper had received from an anonymous source. On May 7, 1984, counsel for plaintiff submitted further evidence and information relevant to plaintiff's October 1982 complaint. On May 14, 1984, the Commission rejected an April 20 request from Jefferson and Congressional to return to them the documents received by the Commission from the newspaper.
According to docket entries in this Court, on July 24, 1984, Congressman Rose filed the complaint now before this Court. On July 31, 1984, Jefferson filed a motion to intervene either as a matter of right or voluntarily together with an answer to the July 24 complaint. The memorandum filed by Jefferson in support of that motion referred to the Commission's disclosure of what Jefferson described as its "confidential documents and confidential discovery materials" (i.e., trade secrets and business records), and the terms of the settlement of the North Carolina enforcement proceeding whereby the Commission promised to notify Jefferson five days in advance of any further such disclosure.
It sought intervention here to assure the Commission's compliance with that agreement.
Meanwhile, on August 22, 1984, the Commission's General Counsel submitted to Jefferson and Congressional, in accordance with Commission procedure, a brief recommending that the Commission find probable cause that Jefferson and Congressional had violated federal election laws.
On August 24, 1984, Jefferson moved in this Court to dismiss without prejudice its motion to intervene reciting an agreement by the Commission not to submit Jefferson's documents to the court without five days notice to Jefferson.
On August 27, 1984, reciting that it had filed its original letter/complaint with the Commission on October 29, 1982, plaintiff filed a motion in this Court to set a hearing during the three days beginning October 2, 1984. In a September 6 response, the Commission's counsel took the position that the hearing requested by plaintiff be "for the limited purpose of setting a reasonable briefing schedule." On September 13, 1984, plaintiff moved for summary judgment. On September 14, 1984, the Court set "a hearing of this action" for October 4, 1984. A September 18, 1984 Order granted Jefferson's motion to dismiss its motion to intervene, without prejudice.
Meanwhile, on September 21, 1984, plaintiff moved to place its summary judgment motion on the agenda for the October 4 hearing. On September 24, 1984, the Commission filed, in response to plaintiff's motion for summary judgment, a cross-motion for summary judgment supported by a very helpful statement of material facts. In apparent deference to the North Carolina stipulation as extended by the agreement in connection with dismissal of the motion to intervene, the Commission filed its statement under seal. On September 24, 1984, the parties stipulated and the Court entered a Protective Order limiting use of documents from the Commission's administrative record to counsel and requiring their filing under seal. On September 27, 1984, with the parties' briefs before it and the plaintiff's motion for summary judgment ripe for decision, the Court filed an order scheduling a hearing on October 4, 1984 on the plaintiff's motion for summary judgment.
On September 21, 1984, in addition, Jefferson responded in the proceedings before the Commission to the brief filed there by the Commission's General Counsel.
On October 3, 1984, counsel for the Commission advised the Court's staff that no representative of the Commission could attend the hearing because the Office of Management and Budget had directed all "non essential" branches of the government to close for lack of funds; Congress had failed to appropriate funds for the fiscal year 1985.
The Court, through staff, advised counsel that he should understand that if the Commission failed to appear the Court would entertain a motion for judgment by default. Transcript at 2-4.
On October 4, 1984, counsel for the Commission appeared and the Court conducted a hearing on the cross-motions for summary judgment. The logistics of the hearing were somewhat complicated by the Protective Order and the apparent intention of Congress to shield from the public the preliminaries of an election law enforcement proceeding. Nevertheless, the Court invited Jefferson to renew its motion to intervene (with the admonition that if it intervened it might become vulnerable to any equitable relief afforded to the plaintiff). When Jefferson's counsel again elected not to intervene, the Court sua sponte recognized Jefferson and its counsel as amicus curiae and accorded them full opportunity to argue proposed orders and otherwise participate. See Transcript at 69ff. In addition, to honor the Protective Order, part of the hearing was conducted at the bench with the transcript of those portions of the hearing filed under seal.
In a colloquy at that hearing, the Commission's counsel indicated that he was unable to state whether the Commission would or would not act by election day this year. Transcript at 51.
In 2 U.S.C. § 437d(a)(9) Congress specifically empowered the Commission "to conduct investigations . . . expeditiously, to encourage voluntary compliance, and to report apparent violations to the appropriate law enforcement authorities" (emphasis added). The foregoing chronology suggests that the Commission has had more than enough time and more than enough information to investigate plaintiff's 1982 charges "expeditiously" and to decide pursuant to 2 U.S.C. § 437g(a)(4)(A)(i) well before the 1984 election whether there ...