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Buchanan v. Federal Election Commission

September 14, 2000

PATRICK J. BUCHANAN ET AL., PLAINTIFFS,
v.
FEDERAL ELECTION COMMISSION DEFENDANT.



MEMORANDUM OPINION

Plaintiffs bring this action challenging the decision of the Federal Election Commission ("FEC") to dismiss plaintiffs' administrative complaint which alleged that the Commission on Presidential Debates ("CPD") is violating FEC regulations governing debate-staging organizations. The parties have cross-moved for summary judgment. The FEC contends (1) that plaintiffs lack standing to bring this suit, and (2) even if plaintiffs do have standing, the FEC's dismissal of their complaint was not contrary to law. Plaintiffs counter that the FEC's dismissal has caused them concrete injuries which this Court can redress, and that the dismissal was contrary to law. Because I find that the plaintiffs have standing to bring their claims, but that those claims fail on the merits, defendant's motion for summary judgment will be granted and plaintiffs' motion for summary judgment will be denied.

BACKGROUND

Patrick J. Buchanan is running for President on the ticket of the Reform Party of the United States of America (the "Reform Party"). He hopes to be a participant in the upcoming presidential debates being sponsored by the Committee on Presidential Debates ("CPD"). However, as things now stand, Buchanan will not be eligible to participate because he is unlikely to meet the CPD's criteria for participation which require, among other things, that the candidate have the support of at least 15% of the electorate as measured by the average of five national polls on a certain date. Buchanan and four other plaintiffs *fn1 therefore filed a complaint with the FEC alleging that the CPD was in violation of FEC regulations which require, in relevant part, that debate-staging organizations be nonpartisan groups using "pre-established objective criteria" to select debate participants. 11 C.F.R. § 110.13(c). The FEC subsequently dismissed the complaint, finding that there was "no reason to believe" that the CPD was violating the law. Plaintiffs now seek judicial review of the FEC's dismissal, arguing that it must be overturned as arbitrary and capricious and contrary to law.

I. Statutory and Regulatory Framework

The Federal Election Campaign Act of 1971 ("FECA"), 2 U.S.C. § 431 et seq. (1994), generally prohibits corporations and labor unions from making "contributions" or "expenditures" *fn2 in connection with federal elections. See 2 U.S.C. § 441b(a). Political committees *fn3 may accept contributions or make expenditures in connection with federal elections, but must first register with the FEC, and then report contributions, receipts and disbursements in accordance with the FECA and the FEC's implementing regulations. See id. at §§ 433-34; 11 C.F.R. § 102.1(d) (1999).

The FECA contains a "safe harbor" provision which makes exceptions to the Act's restrictions on contributions and expenditures. For instance, an "expenditure" does not include "nonpartisan activity designed to encourage individuals to vote or register to vote." 2 U.S.C. § 431(9)(B)(ii). FEC regulations that became effective in 1996 construe the safe harbor provision as excluding from the definitions of "contribution" and "expenditure" certain funds raised or spent for the purpose of staging presidential debates. See 11 C.F.R. §§ 100.7(b)(21), 100.8(b)(23). However, this exception applies only if the following two conditions are met: (1) the debate sponsoring organization must be a non-profit organization that does not "endorse, support, or oppose political candidates or political parties"; and (2) the debates themselves must meet certain requirements set forth in section 110.13 of the FEC's regulations. Id. at §§ 110.13(a)(1), 114.4(f). One of Section 110.13's requirements mandates that debate staging organizations use "pre-established objective criteria" to determine which candidates will be eligible to participate in the debate. Id. at § 110.13(c). *fn4 In sum, the FEC regulations at issue allow non-profit organizations to accept contributions and make expenditures to stage a presidential debate so long as the staging entity is nonpartisan and employs objective criteria to choose the participants.

II. The CPD's Debate Criteria

The CPD is a private, non-profit corporation formed by the two major parties in 1987 for the purpose of sponsoring presidential debates. It has staged presidential debates leading up to the 1988, 1992, and 1996 elections.

In January of 2000, the CPD announced that it would sponsor three presidential debates and one vice-presidential debate in October of 2000 in anticipation of the 2000 presidential election. (Pls.' Admin. Compl. Ex. 1, Administrative Record ("AR") Tab 1.) The CPD listed the following three criteria it would use to select the debates' participants: (1) evidence of Constitutional eligibility to become President; (2) evidence of ballot access which indicated that the candidate had qualified to have his or her name appear on enough state ballots to have a mathematical possibility of winning a majority of the Electoral College; and (3) evidence of electoral support which required "a level of support of at least 15% (fifteen percent) of the national electorate as determined by five selected national public opinion polling organizations, using the average of those organizations' most recent publicly reported results at the time of the determination." (Id. at 2.) *fn5 Only the third criterion is at issue here.

III. Plaintiffs' Administrative Complaint

On March 20, 2000, plaintiffs filed their administrative complaint (designated MUR 4987) with the FEC pursuant to section 437g(a)(1) of the FECA which provides that "any person who believes a violation of this Act . . . has occurred, may file a complaint with the [FEC]." In their complaint, plaintiffs alleged that the CPD could not qualify as a debate-staging organization because (1) the CPD is not a nonpartisan organization, but rather a bipartisan organization supporting the Democratic and Republican parties while opposing third parties such as the Reform Party, and (2) the CPD's 15% threshold of voter support as measured by averaging five national polls is not an "objective" criterion, but rather a subjective criterion designed to eliminate third parties from the debates. Plaintiffs therefore claimed that the CPD's proposed debates do not qualify under the FECA's safe harbor and, as a consequence, funds raised or spent in connection with those debates would constitute illegal contributions and expenditures in violation of 2 U.S.C. § 441b(a).

IV. The FEC's Dismissal of Plaintiffs' Administrative Complaint

When a complaint is filed with the FEC, a three-step process is triggered. First, the FEC reviews the complaint and any response to it and then votes on whether there is "reason to believe" that a FECA violation occurred. 2 U.S.C. § 437g(a)(2). If four members of the FEC vote that there is "reason to believe" that a violation occurred, then the FEC must conduct an investigation. Id. After the investigation is completed, the FEC then takes a second vote to determine whether there is "probable cause" to believe that a violation has occurred. See id. at § 437g(a)(4)(A)(i). If four members of the FEC vote in the affirmative, the FEC must attempt to reach a conciliation agreement with the alleged violator. See id. If conciliation fails, the FEC then takes a third vote to determine whether the FEC will institute a civil action. See id. at § 437g(a)(6)(A). If at any point in this process four FEC members do not affirmatively vote to proceed to the next stage, the FEC will dismiss the complaint. The complainant may then file a petition for review of that dismissal in this Court. See id. at § 437g(a)(8)(A).

On July 19, 2000, the FEC dismissed the plaintiffs' administrative complaint at the first stage, finding that there was "no reason to believe" that a violation of FECA had occurred. The justification for the dismissal is contained in a report issued by the FEC's General Counsel. (AR Tab 14.) The General Counsel's report found that (1) there was no evidence suggesting that the CPD was either "controlled by" the two major political parties or that they influenced the CPD's 2000 debate criteria, and (2) the CPD's criteria were objective, noting that FEC had upheld less objective criteria in the past. (Id. at 15-19.) Thus, the FEC voted to dismiss the plaintiffs' complaint without conducting any further investigation.

Plaintiffs now seek judicial review of that dismissal on the ground that the agency's decision was arbitrary, capricious, and contrary to law. They allege, as they did in the administrative complaint, that the CPD does not qualify for safe harbor protection because the CPD is bipartisan, not nonpartisan, and its selection criteria are not objective. Therefore, plaintiffs claim that the CPD will be in violation of 2 U.S.C. § 441b(a) by making illegal corporate contributions to the Bush/Cheney and Gore/Lieberman campaigns. Plaintiffs also assert "informational injuries" based on the CPD's failure to register as a "political committee" and to report its contributions and expenditures.

DISCUSSION

I. Standing

The FEC contends that this action should be dismissed at the outset because plaintiffs do not have constitutional standing to bring their claims. To satisfy Article III's standing requirements, plaintiffs bear the burden of establishing: (1) an "injury in fact" that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical"; (2) a causal connection between the alleged injury and conduct that is "fairly traceable" to the defendant; and (3) that it is "likely," and not merely "speculative," that the injury will be "redressed by a favorable decision." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotations and citations omitted). On a motion for summary judgment, that burden can be met by submitting affidavits or other evidence of specific facts which, for the purpose of the motion, will be taken as true. See id. at 561.

The FEC contends that both of the plaintiffs' standing theories fail. Specifically, it argues first that plaintiffs' have failed to allege a legally sufficient injury, and second, that any potentially cognizable injury cannot be fairly traced to the FEC nor redressed by this Court because any such injury was caused by the independent action of the CPD. I disagree with the FEC on both scores.

A. Injury In Fact

To have standing, plaintiffs' suit must be based on "an injury stemming from the FEC's dismissal of [their] administrative complaint." Judicial Watch, Inc. v. FEC, 180 F.3d 277, 277 (D.C. Cir. 1999) (per curiam). Plaintiffs claim that the dismissal of their complaint has caused them both a "competitive" and an "informational" injury. First, plaintiffs contend that they will be injured if Buchanan is excluded from the debates because they will be denied a crucial platform for expressing their ideas, Buchanan's chances of winning the election will be reduced, and, in turn, the Reform Party's chances of qualifying for federal funding for the 2004 elections will be diminished. Conversely, the two major parties would be at a competitive advantage in the election if Buchanan is not allowed to debate. Plaintiffs also claim that they will suffer an informational injury caused by the CPD's failure to register as a political committee and report its contributions and expenditures.

a. Competitive Injury

The doctrine of "competitor standing" had been "recognized in circumstances where a defendant's actions benefitted a plaintiff's competitors, and thereby caused the plaintiff's subsequent disadvantage." Fulani v. Brady, 935 F.2d 1324, 1327 (D.C. Cir. 1991) (citing cases), cert. denied, 502 U.S. 1048 (1992). Thus, it is well-settled that an economic actor may challenge the government's bestowal of an economic benefit on a competitor. See, e.g., Northeastern Florida Contractors of Associated Gen. Contractors of Am. v. Jacksonville, 508 U.S. 656, 666 (1993) (holding that general contractors had standing to challenge city ordinance giving preferential treatment in the award of city contracts to minority-owned businesses); Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 403 (1987) (holding that securities brokers had standing to challenge ruling that national banks could act as discount brokers); Investment Co. Inst. v. Camp, 401 U.S. 617, 620 (1971) (granting investment companies standing to challenge ruling that banks could deal in collective investment funds); Association of Data Processing Serv. Orgs., Inc., v. Camp, 397 U.S. 150, 152-53 (1970) (finding that data processing company had standing to challenge rulings by Comptroller of the Currency allowing national banks to compete in data processing). Courts within this Circuit and elsewhere have expanded the competitor standing doctrine to the political arena, recognizing that political actors may bring suit when they are competitively disadvantaged by government action. See, e.g., International Ass'n of Machinists and Aerospace Workers v. FEC, 678 F.2d 1092, 1098 (D.C. Cir. 1982) (en banc) (finding that the "relative diminution in [plaintiffs'] political voices - - their influence in federal elections - - " qualified as a sufficiently concrete and particularized injury for standing purposes); Common Cause v. Bolger, 512 F. Supp. 26, 32 (D.D.C. 1980) (three-judge panel) (ruling that candidate had standing to challenge incumbents' abuse of the franking privilege); Schulz v. Williams, 44 F.3d 48, 53, (2d Cir. 1994) (holding that New York State Conservative Party candidate for governor had standing to challenge allegedly improper placement of the Libertarian Party candidate on the state-wide ballot); Fulani v. Hogsett, 917 F.2d 1028, 1030 (7th Cir. 1990) (holding that New Alliance Party candidates had standing to challenge Indiana state electoral officials' untimely certification of Republican and Democratic presidential candidates to be on state ballot); Owen v. Mulligan, 640 F.2d 1130, 1133 (9th Cir. 1981) (same as Bolger). However, the D.C. Circuit has "never completely resolved [the] thorny issue" of how far the doctrine of political competitor standing can be stretched. Gottlieb v. FEC, 143 F.3d 618, 620 (D.C. Cir. 1998) (internal quotations omitted).

In attacking plaintiffs' claim of competitive injury, the FEC relies chiefly the D.C. Circuit's rulings in Gottlieb and Fulani v. Brady. In the latter case, Dr. Lenora Fulani, a minor party presidential candidate in the 1988 election, sued the Internal Revenue Service challenging the CPD's tax-exempt status on the ground that the CPD's tax-exempt status contributed to her exclusion from the 1988 presidential debates. The D.C. Circuit rejected Fulani's contention that she had "competitor standing" because Fulani was not eligible to receive tax-exempt status herself. See Fulani v. Brady, 935 F.2d at 1328. Fulani might have had a chance "if the IRS were depriving [her] of a benefit that it afforded to others similarly placed . . . ." Id. However, that was not the case. See also Fulani v. Bentsen, 35 F.3d 49 (2d Cir. 1994) (holding that Fulani lacked standing to challenge a debate sponsor's tax-exempt status which she alleged contributed to her competitive disadvantage in the election).

In Gottlieb, the D.C. Circuit relied on Fulani v. Brady to hold that the citizen-plaintiffs, who opposed then-Governor Bill Clinton in the 1992 presidential election, did not have competitor standing to challenge the FEC's dismissal of their claim that the Clinton campaign had mishandled federal matching funds. The panel reasoned that the plaintiffs were "never in a position to receive the matching funds . . . . Only another candidate could make such a claim." Gottlieb, 143 F.3d at 621.

The FEC assumes that the same logic must apply here because none of the plaintiffs are actually in competition with the CPD, whom the FEC characterizes as the actual recipient of the benefit of the FEC's allegedly erroneous dismissal of plaintiffs' administrative complaint. However, this argument misconstrues the nature of plaintiffs' claim and in turn the applicability of Fulani v. Brady and Gottlieb.

In Fulani v. Brady, the fact that the plaintiffs' did not sue under FECA, but rather under the Internal Revenue Code, proved dispositive. The Court of Appeals noted the judicial recognition of "the special problems attendant upon the establishment of standing in tax . . . cases, when a litigant seeks to attack the tax exemption of a third party." Fulani v. Brady, 935 F.2d at 1327 (internal quotations and citation omitted). Moreover, the panel found that "the statutory scheme created by Congress is inconsistent with, if not preclusive of, third party litigation of tax-exempt status." Id. Thus, it asserted that "Fulani's claims would be addressed more appropriately under the FEC's regulation than through the Internal Revenue Code." Id. at 1329 (citation omitted).

In this case, plaintiffs have proceeded under the FEC's regulations. The FECA, unlike the Internal Revenue Code, confers a broad grant of ...


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