United States District Court for the District of Columbia
October 19, 2004.
CHRISTOPHER SHAYS & MARTIN MEEHAN, Plaintiffs,
FEDERAL ELECTION COMMISSION, Defendant.
The opinion of the court was delivered by: COLLEEN KOTELLY, District Judge
Before the Court is Defendant Federal Election Commission's
("FEC" or "Commission") application for a stay pending appeal of
the Court's September 18, 2004, Opinion and Order,
___ F. Supp. 2d ___, in this case. That decision, which granted-in-part and
denied-in-part Plaintiffs' Motion for Summary Judgment and
granted-in-part and denied-in-part Defendant's Motion for Summary
Judgment, found that numerous regulations promulgated by the
Commission in the wake of the Bipartisan Campaign Reform Act
("BCRA") undermined and thwarted congressional purposes behind
BCRA and either failed Chevron review or violated the
strictures of the APA. See Shays v. F.E.C., Civ. No. 02-1984,
slip op. at 156-57 (D.D.C. Sept. 18, 2004). In the Remedy section
of that ruling, the Court explicitly denied Plaintiffs' request
for injunctive relief and remanded the defective regulations to
the FEC "for further action consistent with this opinion" without
vacating them. Id. at 155-56.
Having filed a Notice of Appeal on September 28, 2004, to
document its appeal to the Court of Appeals for the D.C. Circuit,
the Commission filed a Motion for Stay Pending Appeal on October 1, 2004, requesting that this Court "clarify for the
public the state of the law in the wake of the Court's decision."
Def.'s Mot. for Stay at 2. The Commission's petition further asks
that "the Court make clear that, until the Court of Appeals
issues its final decision on the appeal, (1) the regulations
found defective remain in effect and (2) the Commission is not
required to initiate rulemaking proceedings under this Court's
remand order." Id. Plaintiffs' filed a Response to the FEC's
motion, which decries the "complete abdication of the
Commission's responsibility" through its request that the Court
clarify and/or stay its September 18, 2004, Opinion and Order,
Pls.' Response at 1, and the Commission subsequently filed a
Upon a careful consideration of these filings and the relevant
legal authority, the Court declines to stamp the Commission's
"business-as-usual" tactics and request for delay with the
judicial imprimatur of approval. Rather, the Court concludes that
the FEC has failed to meet the stringent standards required to
justify the extraordinary remedy of a stay pending appeal and
therefore shall deny the Commission's motion. Importantly, while
the Court has determined that it lacks jurisdiction to go beyond
identifying the FEC's errors of law in the defective regulations,
Shays, Civ. No. 02-1984, slip op. at 156 (D.D.C. Sept. 18,
2004), and notes that the deficient rules technically remain "on
the books," the Commission should conduct proceedings consistent
with the Court's opinion and remand in order to assuage its
abrogation of both congressional intent and the public
interest.*fn1 I: BACKGROUND
On February 13, 2002, the House of Representatives passed H.R.
2356. McConnell v. F.E.C., 251 F. Supp. 2d 176, 205 (D.D.C.
2003) (per curium). The bill was then adopted by the Senate on
March 18 and 20, 2002. Def.'s Stmt. of Material Facts Not in
Genuine Dispute ("Def.'s Stmt.") ¶ 1. President George W. Bush
signed H.R. 2356 into law on March 27, 2002. Id. The Act,
commonly known as the Bipartisan Campaign Reform Act or "BCRA,"
represents the most recent amendment to the Federal Election
Campaign Act of 1971 ("FECA"). Id. at ¶¶ 2-3.
The Federal Election Commission is the independent agency of
the United States government with exclusive jurisdiction to
administer, interpret and civilly enforce FECA. Id. ¶ 4.
Section 402(c)(2) of the BCRA required the Commission to
promulgate rules within 90 days of BCRA's enactment to carry out
provisions found in Title I of BCRA, which added new limitations
on party, candidate, and officeholder solicitations and use of
nonfederal funds. Id. ¶ 6. After taking the proper steps
involving notice, publication, and comment, the FEC transmitted
its Title I regulations to Congress on July 16, 2002, and on July
29, 2002, the Commission promulgated its final rules and
Explanation and Justification ("E & J") on "Prohibited and
Excessive Contributions: Non-federal Funds or Soft Money." Id.
at ¶ 7. These regulations became effective on November 6, 2002.
Pls.' Stmt. of Genuine Issues in Opp'n to Def.'s Stmt. ("Pls.' Opp'n Stmt.") ¶ 4.
Section 402(c)(1) of BCRA required the FEC to promulgate within
270 days of its enactment the remaining regulations required to
carry out BCRA. Def.'s Stmt. ¶ 8. After taking the proper steps
involving notice, publication, and comment, the FEC transmitted
its Electioneering Communications regulations to Congress on
October 11, 2002, and on October 23, 2002, the Commission
promulgated its final rules and Explanation and Justification ("E
& J") on "Electioneering Communications." Id. ¶ 9. These
regulations became effective November 22, 2002. Pls.' Opp'n Stmt.
¶ 5. The Commission followed the same basic steps with its
"Contribution Limitations and Prohibitions" regulations
transmitted on November 8, 2002, promulgated in the Federal
Register on November 19, 2002, Def.'s Stmt. ¶¶ 10-11 and with
its "Coordinated and Independent Expenditures" regulations
transmitted on December 18, 2002, promulgated on January 3, 2003,
and effective on February 3, 2003, Pls.' Opp'n Stmt. ¶¶ 6, 13.
Plaintiffs Christopher Shays and Martin Meehan are both
citizens of the United States, members of Congress, candidates,
voters, fundraisers, and members of political parties. Id. ¶
11.*fn2 Both Plaintiffs were principal sponsors in the House
of Representatives of the legislation enacted as BCRA and spent
many years seeking to promote its enactment. Id. ¶ 9.
Plaintiffs, along with other co-sponsors of BCRA, submitted
written comments on the FEC's proposed rules implementing BCRA's provisions some of which were not
adopted by the Commission in its final rules. Id. ¶ 10.
Distressed by the structure and loopholes of many of the
Commission's final regulations, Plaintiffs brought this action,
alleging that "[t]he FEC's new regulations, in multiple and
interrelated ways, thwart and undermine the language and
congressional purposes of Title I and II of BCRA." Am. Compl. ¶
Upon a review of Plaintiffs' panoply of asserted deficient
regulations, this Court found that these challenged rules
promulgated by the FEC survived both Chevron and APA review:
11 C.F.R. § 300.2(c)(3) (the "Grandfather"
11 C.F.R. § 300.32(a)(4) (the "Levin fund"
11 C.F.R. § 300.30(c)(3) (regulation regarding
11 C.F.R. § 100.14 (regulating defining "State,"
"District," and "local committee")
Shays, Civ. No. 02-1984, slip op. at 157 (D.D.C. Sept. 18,
However, this Court concluded that these contested regulations
failed either Chevron or APA review, and required that they be
remanded back to the Commission for further action consistent
with the decision:
11 C.F.R. § 109.21(c) (coordination content
regulations), including 11 C.F.R. § 109.21(c)(iv)
(provision excluding the Internet from coordination
11 C.F.R. § 109.3 (coordination definition of
11 C.F.R. § 300.02(m) (definition of "solicit")
11 C.F.R. § 300.02(n) (definition of "direct")
11 C.F.R. § 300.2(b) (nonfederal money definition
11 C.F.R. § 300.64(b) (state party fundraiser
11 C.F.R. § 100.24(a)(2) (definition of "voter
11 C.F.R. § 100.24(a)(3) (definition of
11 C.F.R. § 100.24(a)(4) (definition of "voter
11 C.F.R. § 100.25 (definition of "generic campaign
11 C.F.R. § 300.33(c)(2) (provision regarding
state, district and local employees)
11 C.F.R. § 300.33(c)(4) (de minimis Levin
Amendment exemption) 11 C.F.R. § 100.29(c)(6) (exemption for Section
501(c)(3) organizations from electioneering
11 C.F.R. § 100.29(b)(3)(i) ("for a fee"
electioneering communication requirement)
Shays, Civ. No. 02-1984, slip op. at 157 (D.D.C. Sept. 18,
As a result of the Court's ruling, the Commission filed the
Motion For Stay of September 18, 2004, Order Pending Appeal
currently pending before this Court.*fn3 In many ways, the
title of the FEC's motion is a bit of misnomer: in part, the
Commission seeks clarification of the Court's prior ruling so
"the Commission does not inadvertently violate the Court's actual
intent." Def.'s Mot. for Stay at 2. According to the FEC's
[a] stay order explicitly confirming that the
regulations remain in effect pending a decision on
appeal would, therefore, be consistent with the case
law underlying this Court's remedial order and . . .
would be appropriate under the relevant legal
standard for a stay pending appeal. It would also
have the salutary effect of clarifying the current
state of the law for members of the public whose
political activities are subject to those
Id. at 3. In addition to the alimentary psychological benefits
of such a decision, the Commission seeks a stay so that it may
avoid the initiation of remand proceedings before there is a
final judgment on appeal so that it does not have its appeal
"mooted," so that it will not be forced to "reallocate its
limited resources, at a time when it is heavily burdened with
other activities, to conduct a rulemaking the court of appeals
may ultimately find to have been unnecessary," and so that "[t]he
regulated community and public [will not] suffer from a diversion
of resources from other agency priorities." Id. Plaintiffs respond by asserting that the FEC's motion is
completely unnecessary given the contours of this Court's
September 18, 2004, ruling. According to Plaintiffs, "[t]his
Court thus gave the Commission the discretion and the
responsibility to decide in the first instance (subject to
judicial review) how best to proceed." Pls.' Response at 1.
However, Plaintiffs contend that the FEC has shirked its
responsibilities: "Rather than exercising its responsibility and
giving the regulated community and public any guidance, the
Commission has now belatedly returned to this Court and insisted
that it is for the Court `to clarify for the public the state
of the law in the wake of the Court's decision.'" Id. (quoting
Def.'s Mot. for Stay at 2) (emphasis in original). Despite these
objections, Plaintiffs insist they were willing to stipulate to a
stay pending appeal subject to two conditions:
(a) that the Commission immediately decide which
aspects of the Court's ruling it is actually
challenging, with the stay to extend only to those
portions of the Court's decision; and (b) that the
Commission join plaintiffs in seeking expedited
review by the Court of Appeals so that the appeal may
be submitted for decision in early 2005, in order to
allow new rules to be in effect as early in the 2006
election cycle as possible.
Id. at 2. However, the Commission refused to agree with these
conditions, necessitating the FEC's Motion for Stay and
Plaintiffs' Response. Decl. of Charles G. Curtis, Jr. ¶ 4. The
FEC's refusal to compromise, Plaintiffs allege, highlights the
fact that "[t]he Commission thus wants everyone else, including
this Court, to treat this matter as an emergency while it remains
free to proceed on its business-as-usual pace." Pls.' Response at
2. Plaintiffs conclude by suggesting that the Commission has
failed to justify a stay pending appeal based on the relevant
standards. In order to evaluate the merits of the FEC's motion
and Plaintiffs' counter-argument, the Court shall first set out
the pertinent legal requirements that must be met in order to
obtain a stay pending appeal, and then shall proceed to an evaluation of the
merits of the Commission's arguments.
II: LEGAL STANDARD
The following factors are to be considered when determining
whether a stay pending appeal is warranted:
(1) likelihood that the party seeking the stay will
prevail on the merits of the appeal; (2) the
likelihood that the moving party will be irreparably
harmed absent a stay; (3) the prospect that others
will be harmed if the Court grants the stay; and (4)
the public interest in granting the stay. To justify
the granting of a stay, a movant need not always
establish a high probability of success on the
merits. Probability of success is inversely
proportional to the degree of irreparable injury
evidenced. A stay may be granted with either a high
probability of success and some injury, or vice
Cuomo v. U.S. Nuclear Regulatory Comm'n, 772 F.2d 972
(D.C. Cir. 1985); Washington Metro. Area Transit Comm'n v.
Holiday Tours, Inc., 559 F.2d 841
, 843 (D.C. Cir. 1977);
Virginia Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921
(D.C. Cir. 1958); see also D.C. Circuit Handbook of Practice and
Internal Procedures Part VIII(a) (2003).
Importantly, it is "the movant's obligation to justify the
court's exercise of such an extraordinary remedy." Cuomo,
772 F.2d at 978; see also Twelve John Does v. District of Columbia,
Civ. A. No. 80-2136, 1988 WL 90106, at *1 (D.D.C. Aug. 4, 1988)
("An indefinite stay pending appeal is an extraordinary remedy,
and is to be granted only after careful deliberation has
persuaded the Court of the necessity of the relief.") (citing
Virginia Petroleum Jobbers, 259 F.2d at 925). "This Circuit has
recently reiterated that the applicant must satisfy `stringent
standards required for a stay pending appeal.'" Judicial Watch,
Inc. v. Nat'l Energy Policy Dev. Group, 230 F. Supp. 2d 12, 14
(D.D.C. 2002) (citing Summers v. Howard Univ., Civ. A. No. 02-7069, 2002 WL 31269623 (D.C. Cir. Oct. 10, 2002)).
Where a moving party fails to establish a substantial case on the
merits, and further fails to "demonstrate that the balance of
equities or the public interest strongly favor the granting of a
stay," a motion for stay is properly denied. Cuomo,
772 F.2d at 972.
Upon a consideration of both the factors relevant to the
determination of a motion for stay and the circumstances faced by
the Commission, the Court finds that the FEC fails all four
prongs required to substantiate the granting of a stay. The Court
summarizes its analysis of the relevant test, as applied to the
context of the instant case, as follows.
A. The Commission Has Failed to Show a Strong Likelihood of
Prevailing on the Merits.
"The first, and most important, hurdle which the petitioners
must overcome is the requirement that they present a strong
likelihood of prevailing on the merits of their appeal." Am.
Cetacean Soc. v. Baldridge, 604 F. Supp. 1411, 1414 (D.D.C.
1985). "Without such a substantial indication of probable
success, there would be no justification for the Court's
intrusion into the ordinary processes of administration and
judicial review." Virginia Petroleum Jobbers, 259 F.2d at 925.
"Even should the petitioner show irreparable harm would result
without the imposition of [a] stay, if the requirement of a
strong likelihood of success is not met, the petition will be
denied." Am. Cetacean Soc., 604 F. Supp. at 1414 (citing
Blankenship v. Boyle, 447 F.2d 1280 (D.C. Cir. 1971)). This
does not mean that the applicant's chances of success on appeal
must appear as a "mathematical probability," but that the trial
court, in the exercise of its discretion, must weigh the
probability of success on appeal in a "balance of equities" with
the three other factors. Washington Metro. Area Transit Comm'n, 559 F.2d at 844. The motion to stay may be granted when a "serious legal
question is presented, when little if any harm will befall other
interested persons or the public, and when denial of the order
would inflict irreparable injury on the movant." Id.
1. Standing and Ripeness
The Commission has failed to make out "a substantial case on
the merits" as to its standing and ripeness claims. Cuomo,
772 F.2d at 974. As more thoroughly explained in the Court's
September 18, 2004, Opinion, the FEC's position that Plaintiffs'
lack proper standing and that their claims are not ripe for
review is fundamentally meritless. Plaintiffs plainly meet the
three-prong test for Article III standing article in Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130,
119 L.E.2d 351 (1992). First, Plaintiffs meet the "injury in fact"
requirement because "Plaintiffs are directly regulated by the
rules they challenge in that the regulations shape the
environment in which Plaintiffs must operate." Shays, Civ. No.
02-1984, slip op. at 15 (D.D.C. Sept. 18, 2004). Moreover, the
rights that Plaintiffs, mired in general election contests that
are currently ongoing, "seek to vindicate in essence, to
campaign in a regime that reflects Congress' mandate as
articulated in the BCRA are legally cognizable." Id. at 17.
Second, Plaintiffs have met the causation requirement because
"[t]he harm that Plaintiffs have alleged, having to adjust their
campaigns to account for activities that they maintain should be
banned but are permitted by the regulations, is connected to all
of the regulations they challenge." Id. at 18. Any injury that
they have suffered is "fairly traceable" to the deficient
regulations promulgated by the Commission. Id. Third,
Plaintiffs proffered an uncontested showing that "favorable
rulings for Plaintiffs will result in changes to the regulations
that the Court finds to be improper," id. at 19, ensuring that
they have adequately satisfied the redressability prong of the Article III standing analysis.
Plaintiffs also clearly met the "zone of interests" requirement
necessary to establish prudential standing under the APA. Id.
Additionally, Plaintiffs satisfied the ripeness doctrine. While
their claims might "ordinarily be considered unripe for review,"
id. at 21, the Plaintiffs met the traditional test of (1) the
fitness of the issues for judicial decision and (2) hardship to
the Plaintiffs that would result from withholding court
consideration. Id. (citing Nat'l Park Hospitality Ass'n v.
Dep't of the Interior, 538 U.S. 803, 123 S.Ct. 2026, 2030,
155 L.E.2d 1017 (2003)). Plaintiffs' challenges do not rely on
speculation as to how the regulations will be applied; rather,
their challenges were purely legal, and no judicial or agency
considerations warranted delay in reviewing the regulations.
Id. at 23-24. These factors entailed that as outlined by a
veritable deluge of precedent the Court did not have to
consider the "hardship" prong and did not have to postpone
review. Id. at 25.
The standing and ripeness arguments forwarded by the Commission
in response to the Court's September 18, 2004, ruling are
fundamentally unavailing. The FEC "has offered no new arguments
in its motion, but rather rehashes arguments that have been
rejected. . . ." U.S. v. Judicial Watch, Inc.,
241 F. Supp. 2d 15, 16 (D.D.C. 2003), stay denied, No. 03-5019, 2003 WL
1089413, at *1 (D.C. Cir. Mar. 6, 2003); see also U.S. v.
Herbert Bryant, Inc., Civ. A. Nos. 73-2211, Civ. A. 73-1903,
1990 WL 10270, at *2 (D.D.C. July 9, 1990) ("In moving for
reconsideration and in seeking a stay and/or injunction, [movant]
has failed to present anything which would suggest that the
decision reached by the Court is in error.").
Perhaps recognizing that it cannot successfully put new gloss
on discarded arguments, the Commission attempts to circumvent the
Court's remand by suggesting that "[b]ecause the Commission has presented substantial arguments as to the novel
and complex jurisdictional issues in this matter, this case is an
especially appropriate one for a stay pending appeal." Def.'s
Mot. for Stay at 6. The FEC also suggests that "[t]he
Commission's arguments that plaintiffs' claims are not ripe for
review present equally serious legal issues." Id. at 7.
Contrary to the Commission's assertions, the Court concludes that
the FEC has failed to make out a "substantial case on the merits"
on the standing and ripeness issue as required and has not
presented "questions going to the merits so serious, substantial,
difficult and doubtful" to necessitate a stay. Washington Metro.
Area Transit Comm'n, 559 F.2d at 843, 844 (quoting Hamilton
Watch Co. v. Benrus Watch Co., 206 F.2d 738, 740 (2d Cir.
1958)). Instead, the Commission has merely presented the Court
with arguments that contradict time-honored precedent and run
afoul of well-established jurisprudential tests.
2. The Challenged Regulations
The Commission has failed to make out "a substantial case on
the merits" as to its contention that this Court's finding of
numerous defective BCRA regulations was erroneous. Cuomo,
772 F.2d at 974. Once again, the FEC offers little more than a
regurgitation of rejected arguments in an effort to convince the
Court that its objections establish the foundations of a
likelihood of success on the merits upon appeal. Essentially, the
Commission's Motion for Stay reiterates its prior arguments
concerning the presumptive validity of agency regulations and the
highly deferential standard of review usually afforded to agency
determinations. Def.'s Mot. for Stay at 9-11. The Court
specifically acknowledged both of these arguments in its
September 18, 2004, Opinion, Shays, Civ. No. 02-1984, slip op.
at 27-32 (D.D.C. Sept. 18, 2004), and directly cited many of the
cases upon which the FEC now relies. However, this Court noted that the deferential standard may be
[i]f the FEC's interpretation unduly compromises the
Act's purposes, it is not a `reasonable
accommodation' under the Act, and it would therefore
not be entitled to deference." Orloski,
795 F.2d 156, 164 (D.C. Cir. 1986) (quoting Chevron,
467 U.S. at 845); see also Chevron, 467 U.S. at 845
(providing that if the agency's "choice represents a
reasonable accommodation of conflicting policies that
were committed to the agency's care by the statute,
we should not disturb it unless it appears from the
statute or its legislative history that the
accommodation is not one that Congress would have
sanctioned.") (quoting United States v. Shimer,
367 U.S. 374, 382 (1961)); Common Cause v. Federal
Election Commission, 692 F. Supp. 1391, 1396 (D.D.C.
1987) ("[W]here the agency interprets its statute in
a way that flatly contradicts Congress's express
purpose, the court may indeed must intervene and
correct the agency.")).
Id. at 28-29. Additionally, this Court recognized that while
agency regulations are presumptively valid,
[t]he degree of deference a court should pay an
agency's construction is, however, affected by "the
thoroughness, validity, and consistency of an
agency's reasoning." Federal Election Commission v.
Democratic Senatorial Campaign Comm., 454 U.S. 27,
37 (1981). Moreover, this Circuit has noted that "a
permissible statutory construction under Chevron is
not always reasonable under State Farm: `we might
determine that although not barred by statute, an
agency's action is arbitrary and capricious because
the agency has not considered certain relevant
factors or articulated any rationale for its
choice.'" Republican Nat'l Comm., 76 F.3d at 407
(quoting Arent v. Shalala, 70 F.3d 610, 620 (D.C.
Cir. 1995) (Wald, J., concurring in the judgment)).
Id. at 32.
The Court has considered the standards forwarded by the
Commission regarding deferential treatment, has employed them,
and has found many of the Commission's BCRA regulations wanting.
Mere repetition of general legal standards does not mean that the
FEC is any more likely to succeed on the merits of its claims
than it was on September 18, 2004. As explained below, here the
balance of harms does not favor a stay, and thus it remains
"particularly important for the movant to demonstrate a
substantial likelihood of success on the merits." Dodd v. Fleming, 223 F. Supp. 2d 15, 20 (D.D.C. 2002).
The Commission has not done so the arguments raised by the FEC
do not "raise questions going to the merits so serious,
substantial, difficult and doubtful" as to require further
"deliberative investigation" on them. Rather, the Commission has
failed to proffer significant analysis indicating that it should
prevail when the exception to the general rule of deference is
applied. The FEC's inability to establish a likelihood of success
on the merits therefore fatally undermines its stay request.
B. The Commission Has Failed to Show Irreparable Harm.
"Under this Circuit's precedent, the harms to each party are
tested for `substantiality, likelihood of occurrence, and
adequacy of proof.'" Judicial Watch v. Nat'l Energy Policy Dev.
Group, 230 F. Supp. 2d at 15 (quoting Cuomo,
772 F.2d at 976-77). "The Court must consider the significance of the change
from the status quo which would arise in the absence of a stay,
as well as likelihood of occurrence of the claimed injury, when
determining whether defendants have truly met their burden of
demonstrating irreparable harm justifying imposition of a stay."
Id. "A party moving for a stay is required to demonstrate that
the injury claimed is `both certain and great.'" Cuomo,
772 F.2d at 976 (quoting Wisconsin Gas Co. v. F.E.R.C.,
758 F.2d 669, 674 (D.C. Cir. 1985)).
The Commission essentially has two arguments as to why a
failure to grant a stay pending appeal will irreparably harm its
interests. First, the FEC contends that irreparable harm will
occur without a stay because "even if the Commission is
successful in its appeal, without a stay it will have
irretrievably lost the resources and time expended on remand in
reconsidering a substantial number of regulations concerning
complex topics." Def.'s Mot. for Stay at 14. Second, the
Commission worries that "if the Commission on remand rescinds the
invalidated regulations and promulgates new ones that incorporate the Court's
interpretation of BCRA, the Commission risks losing its
opportunity to present its own views to the Court of Appeals,
which might conclude that the Commission has mooted its own
appeal." Id. at 13 (citing County of Los Angeles v. Shalala,
192 F.3d 1005, 1012 (D.C. Cir. 1999) (quoting Occidental
Petroleum Corp. v. S.E.C., 873 F.2d 325, 330 (D.C. Cir. 1989)).
Linked to this issue is the FEC's concern that "if the Commission
is required to proceed with the remand during the appeal, the
agency could find itself in the untenable position of having to
advocate incompatible legal positions." Id. at 15. The Court
shall address these arguments in turn.
1. Wasted and Diverted Resources
The FEC's first argument that potentially wasted and diverted
staff resources constitute an "irreparable harm" is meritless.
"The key word in this consideration is irreparable. Mere
injuries, however substantial, in terms of money, time, and
energy necessarily expended in the absence of a stay are not
enough." Nat'l Cable Television Ass'n v. Columbia Pictures
Indus., Inc., Civ. Nos. 83-1655, 83-2785, 84-3097, 1986 WL
32734, at *1 (D.D.C. Aug. 20, 1986) (citing Wisconsin Gas,
758 F.2d at 674) (emphasis in original). The Commission seeks to
avoid this rule by selectively quoting from Occidental
Petroleum, which the FEC cites as providing: "`[T[he district
court's decision . . ., if wrong, would result in a totally
wasted proceeding' on remand, . . . and may yet bind the agency
in future cases. Surely, . . . these burdens may constitute
`substantial irreparable harm to the [agency]." Def.'s Mot. for
Stay at 15 (quoting Occidental Petroleum, 873 F.2d at 331).
However, Occidental Petroleum does not stand for this narrow
principle: instead, the reference to a "totally wasted
proceeding" is a mere throw-in as part of a long paragraph
devoted to a concern over whether an agency may immediately
appeal a district court order remanding a case for further agency
proceedings. See Occidental Petroleum, 873 F.2d at 331. Indeed,
the last sentence of the FEC's citation actually reads, "Surely,
to recur to the Seventh Circuit's analysis, these burdens may
constitute `substantial irreparable harm to the [agency]." Id.
(citing Palmer v. City of Chicago, 806 F.2d 1316, 1319 (7th
Cir. 1986)). A reading of Palmer at the relevant pin cite
reveals that the Seventh Circuit, like the D.C. Circuit in
Occidental Petroleum, was concerned with the issue of whether
an interim fee order could be immediately appealed, and not
"wasted proceedings." Palmer, 806 F.2d at 1319. The Palmer
court allowed immediate appeal so that the city's funds would not
flow into the hands of individuals who could have become
non-parties to the suit or insolvent, thus preventing restitution
if the court was ultimately reversed. Id.
These cited cases stand for the proposition that irreparable
harm is created when an "agency would not have an opportunity to
appeal the district court's ruling after the proceedings on
remand," making the order "effectively unreviewable on appeal
from a final judgment" which makes a case for the Commission's
second contention of irreparable harm, but not their first.
Occidental Petroleum, 873 F.2d at 331. As such, the general
rule that a court order directing "that the [commission] issue
new guidelines  does not cause irreparable harm" remains in
effect. Armstrong v. Executive Office of the President,
877 F. Supp. 750, 752 (D.D.C. 1990) (finding that where NSC had issued
proper guidelines in the past, an order directing NSC to issue
new guidelines in response to the litigation would create "no
noticeable difficulty" and would not produce irreparable harm).
Accordingly, simply because the Court's September 18, 2004,
Opinion and Order will force the FEC to expend its energy and
resources to ensure that its BCRA regulations conform with
Congress' intent does not amount to "irreparable injury." The mere fact that a commission spends its initial resources acting
as a super-legislature disregarding congressional intent does not
insulate it from a later court order directing the
reconsideration of its faulty regulations.
2. The Dangers of Mootness and Inconsistentcy
The Commission's second argument promulgation of new rules
could cause mootness of appeal or could compel inconsistent
arguments gives the Court greater pause. To support its
argument that the Commission risks mooting its appeal to the D.C.
Circuit if it promulgates new rules under this Court's remand
order, the FEC cites County of Los Angeles v. Shalala,
192 F.2d at 1012, for the proposition that
[b]ecause an agency must conduct its proceedings and
render its decision pursuant to the legal standard
that the district court articulates in its remand
order, `[u]nless another party appeals [the agency's
subsequent] decision, the correctness of the district
court's legal ruling will never be reviewed by the
court of appeals, notwithstanding the agency's
conviction that the ruling is erroneous.'
Def.'s Mot. for Stay at 13-14 (quoting Occidental Petroleum,
873 F.2d at 330) (brackets in original). Based on this danger,
the FEC contends that it will suffer an irreparable injury
without a stay.
Once again, the Commission's myopic focus on a specific segment
of a D.C. Circuit opinion causes it to lose the overall meaning
of the decision. The relevant D.C. Circuit cases dealing with the
issue of the danger of non-review Occidental Petroleum,
County of Los Angeles v. Shalala, NAACP v. U.S. Sugar Corp.,
84 F.3d 1432, 1436 (D.C. Cir. 1996), and Am. Hawaii Cruises v.
Skinner, 893 F.2d 1400, 1403 (D.C. Cir. 1990) do not concern a
motion for stay or an irreparable injury determination. Rather,
the Occidental Petroleum line of cases provide a procedural
solution around an otherwise insoluble problem: because a remand
order is not usually a final decision, it normally cannot be appealed; but
if an agency or commission returns from a remand order having
conducted its proceedings and rendered its decision pursuant to
that order, its previous arguments would be moot and it would be
left with nothing to appeal. See U.S. Sugar Corp.,
84 F.3d at 1436. The Occidental Petroleum allows an exception to this
apparent problem by permitting an appellate court to hear an
agency's appeal of certain remand orders. Id. ("To avoid that
situation here, the rule of Occidental gives [the Court of
Appeals] jurisdiction to hear the Department's appeal now.").
Properly understood, then, Occidental Petroleum and its progeny
provide the very avenue for the FEC's current appeal of this
Court's September 18, 2004, Opinion and Order to the Court of
Appeals for the D.C. Circuit. Contrary to the Commission's
assertions, the Occidental Petroleum line of cases is not
specifically concerned with the question of whether once an
appeal is filed and argued enactment of new rules moots the old
rules under appellate consideration.
However, simply because Occidental Petroleum does not concern
itself with this particular quandary does not diminish the
importance of possible mootness. While the cases cited by the
Commission do not stand for the proposition it asserts, the
proposition itself is still valid. The Supreme Court has made it
clear that "no justiciable controversy is presented . . . when
the parties are asking for an advisory opinion, [or] when the
question sought to be adjudicated has been mooted by subsequent
developments. . . ." Flast v. Cohen, 392 U.S. 83, 95 (1968)
(footnotes omitted). "Corrective action by an agency is one type
of subsequent development that can moot a previously justiciable
issue." Nat'l Res. Def. Council, Inc. v. U.S. Nuclear Regulatory
Comm'n, 680 F.2d 810, 814 (D.C. Cir. 1982) (citing Comm'r v.
Shapiro, 424 U.S. 614, 622-23 n. 7, 96 S.Ct. 1062,
47 L.Ed.2d 278 (1976) (IRS's proper service of new notice of deficiency and new notices of levy moots question
whether previous levies and notice of deficiency were
procedurally defective under applicable statute); Sannon v.
United States, 631 F.2d 1247, 1250-51 (5th Cir. 1980) (case can
be mooted by amendment of regulations or promulgation of new
regulations providing relief requested)). Accordingly, if the FEC
enacts and enforces new regulations that conform to this Court's
September 18, 2004, Opinion and Order, it faces the danger of
mooting its appeal. See Nat'l Res. Def. Council,
680 F.2d at 813 ("In light of the Commission's repromulgation of the rule
after providing notice and an opportunity for comment, we
conclude that this issue is now moot."); Ctr. for Sci. in the
Pub. Interest v. Regan, 727 F.2d 1161, 1164 (D.C. Cir. 1984)
(Treasury Department's promulgation of new rescissory rule to
supersede defective rule making and rescind a regulation
concerned with alcoholic beverage ingredient disclosure rendered
moot controversy surrounding original rule).
However, a more subtle reading of the Court's September 18,
2004, Opinion and Order guards against this danger of mootness.
As this Court noted, "when a court reviewing agency action
determines that an agency made an error of law . . . the case
must be remanded to the agency for further action consistent
with the corrected legal standards." Shays, Civ. No. 02-1984,
slip op. at 156 (D.D.C. Sept. 18, 2004) (quoting Hawaii Longline
Ass'n, 291 F. Supp. 2d at 38 (quoting County of Los Angeles v.
Shalala, 192 F.3d at 1011)) (emphasis added). The "further
action" directed by this Court upon remand need not be the
enactment and enforcement of newly effective regulations to
replace the provisions found deficient. As the Court discusses
infra III(C) and III(D), the current defective regulations
cause substantial injury to both Plaintiffs and the public
itself. The Commission, according to the terms of this Court's
remand, can take significant steps in the interim before the
Court of Appeals issues its ruling on this matter to alleviate the magnitude of these injuries without jeopardizing
the status of its appeal. The FEC may issue draft or proposed
rules, solicit comments on its proposed rules from the public,
and hold open hearings discussing these comments and the new
draft rules during this interim without mooting its appeal. As a
result of these measures, the Commission may have new, fully
compliant regulations ready for immediate implementation after
the expiration of its appeals process. These interim steps will
substantially increase the likelihood that the revised, compliant
regulations will be in place for a major portion of the 2006
election cycle and will mitigate against the injury to both
Plaintiffs and public. Because mootness concerns may be avoided
while significant progress achieved under this Court's remand
order, the Commission's fears of "irreparable injury" are
The Commission's final argument in this area concerning
"irreparable harm" is its contention that if it follows this
Court's September 18, 2004, Opinion and Order and issues new
rules, it opens itself up to suit challenging the new regulations
as overly broad while at the same time defending the old, more
narrow regulations as proper during the appeals process. Def.'s
Mot. for Stay at 15. Two problems doom the Commission's
"irreparable harm" argument in this area. First, the FEC's
concern is overstated: as discussed above, the Court's remand
order does not require the enactment and enforcement of new
rules; rather, it mandates further action in advancement of its
findings with reasonable expediency. As such, the specter of
conflicting litigation may well remain an apparition. Moreover,
the Commission could certainly take further action on remand
contingent upon the outcome of its appeal and reserve all rights.
Such an action would avoid the possibility of any inconsistency,
and would be the most prudent judicial determination to prevent
conflicting appeals. Second, the Commission's citation to F.E.C.
v. National Republican Senatorial Committee, 966 F.2d 1471, 1476
(D.C. Cir. 1992) ("NRSC"), is inapposite. The NRSC case
simply noted that a district court's determination on the law,
which proved incorrect, caused the commission to engage in work
that ultimately proved fruitless. As discussed supra III(B)(1),
the fact that an agency expends certain resources upon remand
that are later decided to be unnecessary does not rise to the
level of "certain and great" irreparable harm. As such, the FEC
has failed to make the requisite showing of "irreparable injury"
necessary to invite a stay pending appeal.
C. Other Parties Interested in This Action Would Be
Plaintiffs focus on one central harm to their interests that
would result upon a granting of a stay: possible delay of the
implementation of Congress' intended BCRA reforms until the 2008
election cycle. Pls.' Response at 6-7. As with irreparable harm
to the movant, harms to other parties interested in this action
are tested for "substantiality, likelihood of occurrence, and
adequacy of proof." Judicial Watch v. Nat'l Energy Policy Dev.
Group, 230 F. Supp. 2d at 15 (quoting Cuomo, 772 F.2d at 976,
977). "Relief saving one claimant from irreparable injury, at the
expense of similar harm caused by another, might not qualify as
the equitable judgment that a stay represents." Delaware River
Port Auth. v. Transamerican Trailer Transp., Inc., 501 F.2d 917,
924 (D.C. Cir. 1974) (citing Virginia Petroleum Jobbers,
259 F.2d at 925).
Plaintiffs assert that it is not "reasonable for the Commission
to demand extraordinary relief without agreeing to seek expedited
review." Pls.' Response at 6. Importantly, "[t]he longer the
parties delay in submitting the case to the Court of Appeals, the
further into the 2006 election cycle we will be before obtaining
a definitive resolution." Id. If the Commission proceeds with
new rulemakings and administrative actions too far into the 2006
election cycle, the Commission might well contend that it would be too late to
change the flawed rules in time for that election, and the
loopholes and provisions unfaithful to BCRA would continue until
the 2008 elections. Id. As such, if a stay is granted and the
FEC is allowed more time for handsitting, inaction, and needless
delay, Plaintiffs will be forced to continue to alter their
election strategies in anticipation of other actors taking
advantage of the deficient regulations and engaging in activities
that would otherwise be barred.
The Court finds Plaintiffs reasoning persuasive, their
predicted injury significant, and their harm likely to occur.
Federal elected officials, including Plaintiffs, have traversed
this well-traveled road before. Congress "reluctantly" decided
not to implement BCRA during the 2002 election cycle, but
expected that the reform rules would be fully in place by the
time of the 2004 elections. See 148 Cong. Rec. S2142 (daily ed.
Mar. 20, 2002) (statement of Sen. McCain) (Congress had
"reluctantly determined that it would simply not be practical" to
apply the new system during the 2002 election campaign, but
expected the reforms to be in place in time for the 2004
campaign); see also id. (statement of Sen. Feingold) (Congress
intended to encourage "prompt and efficient" resolution of
disputes so that "a new campaign finance system can be
implemented in a certain and sure fashion for the 2004
elections"). The FEC's stay petition promises simply more of the
same, and seeks to thwart the very essence of the wide-sweeping
system of reform enacted by Congress for another interminable
period of years.
Plaintiffs are undisputably participants in the federal
campaign finance system. Their activities are affected not only
by the manner in which they respond to the campaign finance
rules, but also by the way in which other participants, both
allies and adversaries, respond to the rules. The defective FEC
regulations that currently confront them directly shape the
environment in which they operate. The existence of loopholes and unfaithful
regulations constitutes a daily injury to both their interests
and the clearly articulated intent of Congress. See Heckler v.
Turner, 468 U.S. 1305, 1309, 105 S.Ct. 2, 92 L.Ed.2d 891 (1984)
(Rehnquist, J. in chambers) ("Every day [the stay] remains in
force the clearly expressed intent of Congress is being
frustrated."). The rights that Plaintiffs seek to vindicate to
campaign in a regime that reflects Congress' mandate as
articulated in BCRA are significant and compelling, and the
burden placed upon the Commission to respond to these rights is
Given this situation, in order to prevent the significant,
irreparable injury that would accrue to Plaintiffs if revised
regulations were not in place by the 2006 election cycle, the
Commission upon remand should instigate proceedings and craft
proposed regulations following this Court's September 18, 2004,
Opinion and Order with reasonable expediency. If the Court of
Appeals reverses this Court's grant of summary judgment for
Plaintiffs on any of the revised regulations, the FEC may then
simply discard the new draft provisions and retain the previous,
contested provision. However, under a clear balancing of harms,
Plaintiffs suffer a much greater harm in participating in and
reacting to a regime that is contrary to the intent of Congress
than the Commission suffers in possible "wasted proceedings."
Accordingly, the Court finds that the FEC's proposed stay is
undermined by the significant and very real injury that would
likely befall Plaintiffs.
D. The Public Interest Lies With Denying the Petition For Stay
The fourth and final factor to be considered by the Court when
analyzing the FEC's request for a stay is where the public
interest lies. "The public interest is a uniquely important
consideration in evaluating a request for [interim relief]." Am.
Cetacean Soc., 604 F. Supp. at 1416 (quoting Nat'l Ass'n of Farmworkers Orgs. v. Marshall,
628 F.2d 604, 616 (D.C. Cir. 1980)). Under the public interest prong,
the views of "Congress, the elected representatives of the entire
nation," are "another sense by which the public interest should
be gauged." Cuomo, 772 F.2d at 978. "[A] court sitting in
equity cannot ignore the judgment of Congress, deliberately
expressed in legislation." U.S. v. Oakland Cannabis Buyer's
Co-op, 532 U.S. 483, 497, 121 S.Ct. 1711, 149 L.Ed.2d 722 (2001)
(quoting Virginia R. Co. v. Railway Employees, 300 U.S. 515,
551, 57 S.Ct. 592, 81 L.Ed 789 (1937)).
It would not be in the public interest to discard the
trade-offs Congress carefully crafted in devising BCRA in favor
of a contrary system of interpretation and regulation. The
legislative history of BCRA reflects the delicate congressional
balancing of the interests of federal officeholders and
aspirants, political parties, third-party interest groups, and
the citizenry at large with the need to equitably reform the
existing campaign finance rules. As discussed in this Court's
September 18, 2004, Opinion and Order, numerous regulations
proffered by the FEC contravene Congress' clear intent and fail
Chevron review or violate the APA. See generally Shays, Civ.
No. 02-1984, slip op. (D.D.C. Sept. 18, 2004). The public is owed
a campaign finance system whose contours reflect the democratic
will as outlined in the expressed intent and explicit legislation
enacted by their elected representatives the Congress. In
promulgating BCRA, Congress enacted a specific regime balancing
money, access, free speech, and fair elections; granting a stay
will simply delay the implementation of that vision and further
deepen the injury to public interest.
The FEC, in its filings, largely avoids these implications, and
instead predicts a litany of horrors that would result from a
change in regulations for the current 2004 election cycle in which less than two weeks remain. Def.'s Mot. for Stay at 12.
According to the Commission, "[p]olitical parties, candidates,
contributors, political committees, and independent groups" who
have relied on the previous regulations may now face "different
and uncertain legal requirements," which could "create confusion,
especially for legally unsophisticated participants." Id.
Moreover, "because the Commission cannot possibly address all
issues raised by the Court's decision in the short time remaining
before the elections, and thus cannot provide timely guidance for
the regulated community, even greater confusion would likely
result." Id. Ultimately, failure to preserve the status quo
"would impede the Commission's ability to administer the Act in a
consistent manner, thereby injuring the public's interest in the
integrity of the campaign finance system." Id. at 12-13.
The Court is not unaware of the difficulties that could occur
as the result of a wholesale renovation of the defective FEC
rules at this critical juncture in the 2004 election cycle.
Indeed, the Court's September 18, 2004, Opinion and Order
specifically rejected Plaintiffs' calls for an order "that the
Commission shall, within fifteen (15) days of this Order,
commence proceedings to promulgate new regulations that remedy
the defects in the . . . regulations. . . ." Shays, Civ. No.
02-1984, slip op. at 155-56 (D.D.C. Sept. 18, 2004). As
previously discussed, the Court instead decided to remand the
deficient regulations to the Commission without vacating them,
leaving it "up to the agency to determine how to proceed next
not for the Court to decide or monitor." Id. at 156 (quoting
Hawaii Longline Ass'n, 291 F. Supp. 2d at 38 (quoting County
of Los Angeles v. Shalala, 192 F.3d at 1011)). As noted supra
n. 1, the Commission should take procedural steps leading towards
the drafting of proposed regulations to replace the rules found
defective by this Court with "reasonable efficiency." It is
noteworthy that Congress, in enacting BCRA, also recognized this need for the FEC to promulgate rules
with reasonable efficiency in the first instance, so that
Congress' intended campaign finance structure would be available
at the next possible election cycle and in place as early as
possible: Section 402(c)(2) of BCRA required the FEC to issue
regulations within 90 days of BCRA's enactment to carry out the
provisions found in Title I of BCRA, while Section 402(c)(1)
required the FEC to promulgate the remaining rules required to
carry out BCRA within 270 days of enactment.
As such, given the parameters of this Court's September 18,
2004, Opinion and Order, the Commission's predictions of disaster
for the 2004 election participants are without foundation. The
denial of a stay in no way imperils the public interest. Instead,
the public interest is best served by enforcing Congress'
intended campaign finance system expeditiously in order to
assuage the harms produced by the Commission. In short, the Court
concludes that the FEC has not established that the public
interest dictates the need for a stay pending appeal, and has
ultimately failed to meet any of the four factors necessary to
establish the "extraordinary remedy" of a judicial stay.
Based on the reasons set forth above, the Court concludes that
the FEC's Motion for a Stay Pending Appeal must be denied. An
Order accompanies this Memorandum Opinion. ORDER
For the reasons set forth in the accompanying Memorandum
Opinion, it is, this 19th day of October, 2004, hereby
ORDERED that Defendant's Motion for Stay Pending Appeal