United States District Court, District of Columbia
For LIBERTARIAN NATIONAL COMMITTEE, INC., Plaintiff: Alan Gura, GURA & POSSESSKY, PLLC, Alexandria, VA; Allen Joseph Dickerson, CENTER FOR COMPETITIVE POLITICS, Alexandria, VA.
For FEDERAL ELECTION COMMISSION, Defendant: Kevin Paul Hancock, LEAD ATTORNEY, David Brett Kolker, Harry Jacobs Summers, FEDERAL ELECTION COMMISSION, Washington, DC.
ROBERT L. WILKINS, United States District Judge.
Plaintiff Libertarian National Committee, Inc. (" LNC" ) has been left a bequest that it is unable to take in one lump sum payment because Defendant Federal Election Commission (" FEC" ) believes that, due to the large amount of the bequest, to do so would violate the Federal Election Campaign Act, 2 U.S.C. § § 431-57. The FEC instead requires, as they have for decades, that the LNC receive annual payments from the bequest at the maximum contribution amount a living individual could donate. Thus the LNC will receive the full bequest, but over a number of years. The LNC does not want to wait,
and challenges the constitutionality of the Federal Election Campaign Act (" FECA" ) as applied to bequests. As part of this challenge, the LNC asks this Court to enjoin the FEC from enforcing the FECA with respect to bequests, and also requests this Court, pursuant to 2 U.S.C. § 437h, to certify one question to the en banc United States Court of Appeals for the District of Columbia. The FEC has opposed the motion for certification, and moved for summary judgment. The parties appeared before this Court for oral argument on the pending motions on February 25, 2013. Based on the parties' briefs, the arguments presented to this Court, and a review of the relevant law, for the reasons stated below the LNC's motion to certify (Dkt. No. 25) is GRANTED IN PART and DENIED IN PART, and the FEC's motion for summary judgment (Dkt. No. 29) is GRANTED IN PART and DENIED IN PART.
I. History of This Case
Raymond Groves Burrington died on April 26, 2007. (Dkt. No. 13, ¶ 14). His will left a residuary bequest to the LNC of an amount eventually determined to be $217,734.00. (Id.). The LNC is the national committee of the Libertarian Party of the United States. (Dkt. No. 25-3, ¶ 1). Prior to the bequest, Burrington had made only one donation to the Libertarian Party: a $25.00 gift on May 19, 1998. (Id. ¶ 26). The Libertarian Party had no knowledge of Burrington's bequest until after his passing. (Id. ¶ 25).
Pursuant to 2 U.S.C. § 441a(a)(1), no " person" can contribute more than $32,400.00 to a national political committee annually.  In addition, pursuant to 2 U.S.C. § 441i(a)(1), no political committee can " solicit, receive or direct to another person" any amount not subject to 2 U.S.C. § 441a(a)(1). The statute defines " person" as follows: " The term 'person' includes an individual, partnership, committee, association, corporation, labor organization, or any other organization or group of persons, but such term does not include the Federal Government or any authority of the Federal Government." 2 U.S.C. § 431(11).
The FEC has determined that the word " person" in 2 U.S.C. § 441a(a)(1) includes testamentary estates. See, e.g., FEC Advisory Opinions 2004-02 & 1999-14. Thus, the LNC can only accept annual distributions from Burrington's gift at the maximum threshold set by 2 U.S.C. § § 441a(a)(1) & 441a(c), rather than accepting the gift all at once. (Dkt. No. 13, ¶ 15). The LNC objects to the statutory framework preventing the organization from receiving all of the money in one lump sum on the grounds that the framework " violates the First Amendment speech and associational rights of the LNC and its supporters." (Id. ¶ 23).
The LNC's First Amended Complaint " seeks to enjoin application of the Party Limit to the contribution, solicitation, acceptance, and spending of decedents' bequests, as said application violates the LNC's First Amendment speech and associational rights and those of its supporters." (Id. ¶ 3). It has moved this Court, pursuant to 2 U.S.C. § 437h, to certify the following question to the en banc Court of Appeals:
Does imposing annual contribution limits against testamentary bequests directed at, or accepted or solicited by political party committees, violate First Amendment speech and associational rights?
(Dkt. No. 25). The FEC requested that the parties first create a factual record " to
determine which constitutional claims, if any, merit certification to the Court of Appeals." (Dkt. No. 15, ¶ 6). The parties completed discovery in February 2012. (See Minute Order, Feb. 10, 2012). The LNC filed its Motion to Certify on May 4, 2012. (Dkt. No. 25). The FEC opposed that Motion, and filed a Motion for Summary Judgment, on July 6, 2012. (See Dkt. Nos. 28 & 29).
At the conclusion of discovery in this case, the parties submitted proposed findings of fact. LNC objects to many of the FEC's facts, claiming they improperly quote previous Supreme Court opinions and are thus not " facts" at all, present inadmissible hearsay, or both. (See Dkt. No. 30, at 2-3). The FEC responds by claiming that the facts the LNC objects to are legislative facts, which are " not subject to the Federal Rules of Evidence." (Dkt. No. 37, at 1). Legislative facts are " general facts which help the tribunal decide questions of law and policy," Friends of the Earth v. Reilly, 966 F.2d 690, 694, 296 U.S. App. D.C. 170 (D.C. Cir. 1992) (internal quotation marks omitted), are " without reference to specific parties," and " need not be developed through evidentiary hearings," Ass'n of Nat'l Advertisers, Inc. v. FTC, 627 F.2d 1151, 1161-62, 201 U.S. App. D.C. 165 (D.C. Cir. 1979). LNC also claims the FEC's objections to certain facts are obfuscatory because they purport to present objections when they often merely restate the facts with different language. (See, e.g., Dkt. No. 36, at 6 (" This is not an objection-it is an admission rephrasing the proposed fact." )). The Court overrules the LNC's hearsay objections for the reasons set forth by the FEC; however, because the Court will narrow the issue as described infra, many of the facts proffered by the parties are no longer relevant.
II. Legal Framework
A. Campaign Finance Law
As is well known, our Bill of Rights states that " Congress shall make no law . . . abridging the freedom of speech . . . ." U.S. CONST. amend. I. And " the First Amendment has its fullest and most urgent application to speech uttered during a campaign for political office." Ariz. Free Enter. Club's Freedom Club PAC v. Bennett, 131 S.Ct. 2806, 2817, 180 L.Ed.2d 664 (2011) (internal quotation marks and citations omitted). But, of course, this does not end this matter, because Congress has passed, and the Supreme Court has upheld, laws that purport to limit speech--particularly in the manner of campaign contributions. They have done so in part to prevent corruption, or the appearance of corruption. A brief overview of the state of the law regarding campaign finance is warranted. This will look at the current state of affairs with a particular focus on the law with respect to campaign contributions--what is at issue in this litigation--and will address campaign expenditures only in passing.
The first law limiting the unrestricted flow of money into politics came more than 100 years ago. See McConnell v. FEC, 540 U.S. 93, 115, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003) (discussing history, including passage of the Tillman Act in 1907), overruled in part on other grounds by Citizens United v. FEC, 558 U.S. 310, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010). But the bedrock case regarding limits on contributions related to political efforts remains Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam).  Buckley involved a challenge to the constitutionality of the 1974 FECA amendments, as well as related provisions
of the Tax Code. Id. at 6. The case dealt with contributions, expenditures, and reporting requirements; this analysis will focus on only the first of those three. The Supreme Court did not hold contribution limits to the same constitutional scrutiny as expenditure limits, stating that " a limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor's ability to engage in free communication." Id. at 20. This is so because a contribution limitation " involves little direct restraint on [one's] political communication, for it permits the symbolic expression of support evidenced by a contribution but does not in any way infringe the contributor's freedom to discuss candidates and issues." Id. at 21. Ultimately, the Supreme Court concluded that the FECA's limits on contributions withstood a facial constitutional challenge. " Congress was surely entitled to conclude . . . that contribution ceilings were a necessary legislative concomitant to deal with the reality or appearance of corruption inherent in a system permitting unlimited financial contributions, even when the identities of the contributors and the amounts of their contributions are fully disclosed." Id. at 28.
The Buckley Court considered whether limiting contributions would make it more difficult for minor parties to amass sufficient funds. They concluded that contribution limits " would appear to benefit minor-party and independent candidates relative to their major-party opponents because major-party candidates receive far more money in large contributions." Id. at 33. And in addressing an overbreadth challenge to contribution limits, namely the proposition that most large contributors do not seek improper influence, the Court agreed with that proposition generally, but nonetheless stated that because of the difficulty in determining suspect contributions, " Congress was justified in concluding that the interest in safeguarding against the appearance of impropriety requires that the opportunity for abuse inherent in the process of raising large monetary contributions be eliminated." Id. at 30. In sum, " [i]t has . . . been plain ever since Buckley that contribution limits would more readily clear the hurdles before them" than expenditure limits. Nixon v. Shrink Mo. Gov't PAC, 528 U.S 377, 387, 120 S.Ct. 897, 145 L.Ed.2d 886 (2000) (citation omitted).
Following Buckley, challenges to contribution limits continued to reach the Supreme Court in various forms. In California Medical Ass'n v. FEC, 453 U.S. 182, 101 S.Ct. 2712, 69 L.Ed.2d 567 (1981), appellants challenged the constitutionality of limits on contributions to multicandidate political action committees, and the court found no First Amendment violation to the rights of contributors. Id. at 184-85. A state campaign finance law was challenged in Shrink Missouri Gov't PAC, and the Court upheld its contribution limits to candidates, finding that a contribution limit has prevented effective advocacy only where it was " so radical in effect as to render political association ineffective, drive the sound of a candidate's voice below the level of notice, and render contributions pointless." 528 U.S. at 397
Then came McConnell, which, among other issues, addressed challenges to limits on " soft money" contributions to national political parties.  Previously under the
FECA, there existed a significant difference between so-called " hard" and " soft" money contributions. The FECA limited hard money contributions, i.e., contributions to national parties for the purpose of influencing a federal election, but did not limit soft money contributions, i.e., money for other purposes, including " influencing state or local elections." See McConnell, 540 U.S. at 122-23. Donors who gave enough soft money often received special, preferential access to party leaders and elected officials. See id. at 130 & n.30, 151-52 (describing access to Democratic and Republican leaders). After reviewing the record, the Supreme Court found that " [t]he idea that large contributions to a national party can corrupt or, at the very least, create the appearance of corruption of federal candidates and officeholders is neither novel nor implausible." Id. at 144.
Seeking to " plug the soft-money loophole," Congress passed the Bipartisan Campaign Reform Act of 2002 (" BCRA" ), Pub. L. 107-155, 116 Stat. 81, adding, among other provisions, 2 U.S.C. § 441i(a) to FECA, which " prohibits national party committees and their agents from soliciting, receiving, directing, or spending any soft money." McConnell, 540 U.S. at 133 (citing 2 U.S.C. § 441i(a)). Parties brought a facial First Amendment challenge to the new FECA § 441i(a), " as well as challenges based on the Elections Clause, U.S. Const., Art. I, § 4, principles of federalism, and the equal protection component of the Due Process Clause." 540 U.S. at 134. None of these challenges were successful. The McConnell Court found that national parties " sell access to federal officeholders in exchange for soft-money contributions that the party can then use for its own purposes." Id. at 155. When reviewing the BCRA's ban on large soft money contributions to national party committees, the Supreme Court stated that " common sense" along with the ample record " confirm[ed]" that soft money contributions " have a corrupting influence or give rise to the appearance of corruption." Id. at 145. The Court did so using " [t]he less rigorous standard of review we have applied to contribution limits (Buckley's 'closely drawn' scrutiny) . . . ." Id. at 137. But the Court presciently concluded: " We are under no illusion that BCRA will be the last congressional statement on the matter. Money, like water, will always find an outlet." Id. at 224.
In Randall v. Sorrell, 548 U.S. 230, 126 S.Ct. 2479, 165 L.Ed.2d 482 (2006), the Supreme Court (in a plurality opinion) struck down the contribution limits found in a Vermont statute. Vermont imposed strict limits on the amount individuals, political parties, and political committees could contribute to candidates for state office. For example, the cap for governor, lieutenant governor, and other statewide offices was $400, and was not indexed for inflation. See 548 U.S. at 238. The Supreme Court described the test for determining whether the Vermont statute satisfied constitutional scrutiny as whether the statute's " contribution limits prevent candidates from amassing the resources necessary for effective [campaign] advocacy, whether they magnify the advantages of incumbency to the point where they put challengers to a significant disadvantage; in a word, whether they are too low and too strict to survive First Amendment scrutiny." Id. at 248 (citation and internal quotation marks omitted). The plurality opinion concluded that the Vermont statute was unconstitutional because it " would reduce the voice of political parties in Vermont to a whisper." Id. at 259 (citation and internal quotation marks omitted).
In 2010, Citizens United overruled previous Supreme Court precedent and no doubt is a historic opinion, but generally the case is not about contribution limits. At issue was a ban on independent corporate expenditures, which the Court struck down because it found that " independent expenditures do not lead to, or create the appearance of, quid pro quo corruption." 130 S.Ct. at 910. The Citizens United Court did not " reconsider whether contribution limits should be subjected to rigorous First Amendment scrutiny." Id. at 909. The Court did note, however, that " [t]he fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt." Id. at 910.
Two months after Citizens United, together our District and Circuit courts issued two election law cases on the same day. In Speechnow.org v. FEC, 599 F.3d 686, 389 U.S. App. D.C. 424 (D.C. Cir. 2010) (en banc), the nonprofit organization Speechnow.org availed itself of 2 U.S.C. § 437h on five constitutional questions, three related to contribution limits. Because Speechnow.org planned to " operate exclusively through independent expenditures . . . not made in concert or cooperation with . . . a political party committee or its agents," 599 F.3d at 689 (internal quotation marks and citations omitted), the questions related to whether the contribution limits in 2 U.S.C. § 441a(a) violated the First Amendment as applied to the organization, see id. at 690-91. The court's decision in Speechnow.org was " [i]n accordance with" Citizens United, 599 F.3d at 689, because that " Court held that the government has no anti-corruption interest in limiting independent expenditures. Of course, the government still has an interest in preventing quid pro quo corruption. However, after Citizens United, independent expenditures do not implicate that interest." Id. at 693 & n.3 (emphasis in original). Thus, the court ultimately concluded that limiting contributions by individuals to political committees that made only independent expenditures violated the First Amendment. Id. at 696.
In Republican Nat'l Comm. v. FEC, 698 F.Supp.2d 150 (D.D.C.) (three-judge court), aff'd 130 S.Ct. 3543, 177 L.Ed.2d 1119 (2010), several entities brought an as-applied challenge to the BCRA regarding limits on contributions to political parties, claiming the First Amendment entitled them to raise and spend soft money for various activities that " lack sufficient connection to a federal election." Id. at 155 (citation omitted) (emphasis in original). The parties submitted affidavits stating they would not, among other things, offer any access to federal candidates or officeholders to soft money donors. Id. As to the standard to apply, the Court affirmed that " closely drawn" scrutiny applies to contribution limits rather than strict scrutiny. Id. at 156 (citing McConnell, 540 U.S. at 138-41). In its analysis, the Court noted that " Citizens United did not disturb McConnell's holding with respect to the constitutionality of BCRA's limits on contributions to political parties." Id. at 153 (citation omitted). The Court stated that the parties were " asking us to overrule McConnell's holding with respect to the ban on soft-money contributions to national political parties. As a lower court, we of course have no authority to do so." Id. at 157. And regarding the facial versus as-applied distinction, the Court stated: " In general, a plaintiff cannot successfully bring an as-applied challenge to a statutory provision based on the same factual and legal arguments the Supreme Court expressly considered when rejecting a facial challenge to that provision. Doing so is not so mach an as-applied challenge as it is an argument for overruling a precedent." Id.
Most recently, on February 19, 2013, the Supreme Court noted probable jurisdiction in McCutcheon v. FEC, Civil Action No. 12-cv-1034 (JEB)(JRB)(RLW), 893 F.Supp.2d 133, 2012 WL 4466482 (D.D.C. Sept. 28, 2012) (three-judge court). See http://www.supremecourt.gov/qp/12-00536qp.pdf. In McCutcheon, a three-judge panel found FECA's aggregate contribution limits constitutional. That panel concluded: " Plaintiffs raise the troubling possibility that Citizens United undermined the entire contribution limits scheme, but whether that case will ultimately spur a new evaluation of Buckley is a question for the Supreme Court, not us." McCutcheon, 2012 WL 4466482, at *7. This Court ordered the parties to submit their positions on " whether the Supreme Court's decision regarding McCutcheon v. FEC should impact further proceedings in this case." Minute Order, Feb. 21, 2013. The parties stated that they " agree that the Supreme Court's action in ...