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SHAYS v. FEDERAL ELECTION COMMISSION

October 19, 2004.

CHRISTOPHER SHAYS & MARTIN MEEHAN, Plaintiffs,
v.
FEDERAL ELECTION COMMISSION, Defendant.



The opinion of the court was delivered by: COLLEEN KOTELLY, District Judge

MEMORANDUM OPINION

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 Reply.

  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. ¶ 6.

  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" provision)
• 11 C.F.R. § 300.32(a)(4) (the "Levin fund" fundraising regulation)
• 11 C.F.R. § 300.30(c)(3) (regulation regarding accounting procedures)
• 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, 2004).
  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 communication regulations)
• 11 C.F.R. § 109.3 (coordination definition of "agent")
• 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 of "agent")
• 11 C.F.R. § 300.64(b) (state party fundraiser provision)
• 11 C.F.R. § 100.24(a)(2) (definition of "voter registration activity")
• 11 C.F.R. § 100.24(a)(3) (definition of "get-out-the-vote activity")
• 11 C.F.R. § 100.24(a)(4) (definition of "voter identification")
• 11 C.F.R. § 100.25 (definition of "generic campaign activity")
• 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 communication regulations)
• 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, 2004).
  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 reasoning,
[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 regulations.
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 versa.
Cuomo v. U.S. Nuclear Regulatory Comm'n, 772 F.2d 972, 974 (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, 925 (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.

  III: DISCUSSION

  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 ...


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