The opinion of the court was delivered by: PRATT
John H. Pratt, United States District Judge.
Plaintiffs, the Congressional Majority Committee, Inc. (CMC), an independent political action committee, its chairman, Ralph Galliano, and Americans for Phil Gramm in '84 (APG-84), an independent project of CMC, seek judicial review of two orders issued by the Postal Service pursuant to the postal false representations statute, 39 U.S.C. § 3005. These orders were based on a finding that plaintiffs were soliciting political contributions through the mail by means of materially false representations. Cease and Desist Order No. CD-305 instructs the plaintiffs to cease making such false representations. False Rep. Order No. 85-37, as amended, forbids the delivery of mail and the payment of money orders to APG-84 responsive to such solicitations and directs that such mail be returned to the senders. This case comes before us on the parties' cross-motions for summary judgment.
The Congressional Majority Committee, Inc. (CMC) is an independent political action committee founded in 1980. In furtherance of principles and ideas shared by its membership, CMC engages in political campaigns by advocating support for certain candidates and making independent financial expenditures on their behalf. Of relevance to this particular case, CMC in 1983 made such a determination to support the candidacy of then Representative Phil Gramm for election to the United States Senate from Texas. CMC accordingly created Americans for Phil Gramm in '84 (APG-84), an independent project of CMC, for the purpose as stated of aiding Representative Gramm's election bid for the Senate.
Over a period of five months in late 1983 and early 1984 plaintiffs mailed over 200,000 solicitations for political contributions addressed "Dear Conservative Texan" and advocating the election of Congressman Phil Gramm to the Senate.
In the course of the solicitation, CMC was described as "an independent political action committee . . . dedicated to electing and maintaining a conservative, pro-free enterprise, and pro-defense majority in the United States Congress." R. at 318, 331, 343. CMC also boasted that in 1982, it had raised and contributed over a half million dollars to candidates nationwide. R. at 326, 334, 347. The solicitations explained in turn that CMC had "launched" APG-84 as "a special independent project" of CMC with the " sole purpose . . . to do everything possible to insure the election of Phil Gramm to the United States Senate." R. at 318, 331, 343 (emphasis in original). Recipients were directed to mail financial contributions to APG in support of this effort.
Representative Gramm subsequently became aware of contributors who had mailed contributions to the plaintiff in response to their solicitations on the mistaken belief that the money would go directly to Representative Gramm's campaign. The Congressman's only authorized campaign committee, however, was the "Friends of Phil Gramm." Moreover, APG had contributed no funds to Representative Gramm's campaign and as a political action committee would have been barred by federal election laws from contributing more than $5,000. At his urging,
the General Counsel of the U.S. Postal Service filed a civil administrative complaint on March 15, 1984, charging that the plaintiffs were conducting a scheme or device to obtain money or property through the mails by means of false representations in violation of 39 U.S.C. § 3005. The substance of the charge was that plaintiffs by means of these solicitations for political contributions had made "directly or indirectly" three material false representations:
(a) Respondents are authorized by Congressman Phil Gramm to solicit and collect funds for his campaign to be elected to the United States Senate;
(c) In 1982 Congressional Majority Committee raised and contributed well over one-half million dollars to candidates nationwide.
The parties presented evidence at a hearing before an administrative law judge (ALJ) on May 4, 1984.
An initial decision was issued June 13, 1984, finding that plaintiffs made the representations charged in the complaint, that these representations were both material and false, and that plaintiffs were thus conducting a scheme to obtain money through the mail by means of false representations in violation of § 3005. Upon appeal by the plaintiffs to the Judicial Officer of the Postal Service, a final agency decision affirming the findings of the ALJ was rendered May 2, 1985, together with two remedial orders which required the return to senders of contributions responsive to plaintiffs' solicitations
and directing plaintiffs to cease and desist from falsely representing that they have been authorized by another to solicit contributions, that monies contributed to plaintiffs will be directed to an identified beneficiary, and the extent of their past fundraising achievements. These orders remain in force and effect.
Plaintiffs initiated this action on August 7, 1985, seeking judicial review of the Postal Service decision. Plaintiffs challenge the defendant's jurisdiction pursuant to 39 U.S.C. § 3005 to render a decision regarding whether plaintiffs' solicitations contained false representations. They assert that the ALJ permitted improper evidence to be introduced at the administrative hearing, and allege that the defendant's determination that plaintiffs' mailings contained materially ...