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Lieu v. Federal Election Commission

United States District Court, District of Columbia

February 28, 2019

REPRESENTATIVE TED LIEU, et al., Plaintiffs,


          Emmet G. Sullivan, United States District Judge

         This case involves the constitutionality of the Federal Election Campaign Act's (“FECA”) limits on contributions to political action committees that make only independent expenditures. The Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) has held that contributions to such independent expenditure-only political action committees “cannot corrupt or create the appearance of corruption” and therefore limits on contributions to these groups are unconstitutional. v. FEC, 599 F.3d 686, 694 (D.C. Cir. 2010)(en banc). The upshot of this holding is that certain political action committees, commonly known as “Super PACs” can “receive unlimited amounts of money from both individuals and corporations” and “engage in unlimited electioneering communications, so long as their activities are not made ‘in cooperation, consultation, or concert, with, or at the request or suggestion of' a candidate, his or her authorized political committee, or a national, State, or local committee of a political party.” Stop This Insanity, Inc. Employee Leadership Fund v. FEC, 902 F.Supp.2d 23, 37 (D.D.C. 2012)(citation omitted). It is undisputed that this is the law of the Circuit.

         Notwithstanding the D.C. Circuit's ruling in SpeechNow, Plaintiffs Representative Ted Lieu; Representative Walter Jones; Senator Jeff Merkley, State Senator (ret.); John Howe; Zephyr Teachout; and Michael Wager (collectively, “Plaintiffs”) brought an administrative complaint against several Super PACs alleging violations of FECA when the Super PACs knowingly accepted contributions in excess of monetary limits set by FECA. The Federal Election Commission (“FEC” or “Commission”) disagreed explaining that under SpeechNow the Super PACs actions were lawful. Accordingly, the FEC dismissed the administrative complaint. Plaintiffs bring this action alleging the FEC acted “contrary to law” when it dismissed the administrative complaint against the Super PACs because the FEC relied on SpeechNow--an allegedly unlawful judicial ruling. Pending before the Court is FEC's motion to dismiss plaintiffs' complaint for failure to state a claim. Plaintiffs have the daunting task of persuading this Court to rule inconsistently with the D.C. Circuit's en banc opinion in SpeechNow. This Court cannot do so, therefore defendant's motion to dismiss is GRANTED.

         I. Background

         Because the claims in this case involve several provisions of FECA, and the D.C. Circuit's interpretation of those provisions, the Court begins with an explanation of the statute and relevant case law.

         A. FECA and SpeechNow

         FECA was enacted to “limit spending in federal election campaigns and to eliminate the actual or perceived pernicious influence over candidates for elective office that wealthy individuals or corporations could achieve by financing the ‘political warchests' of those candidates.” Orloski v. FEC, 795 F.2d 156, 163 (D.C. Cir. 1986)(citing Buckley v. Valeo, 424 U.S. 1, 25-26 (1976)). To that end, there are several provisions in FECA that limit the amount of money a person can contribute to a federal campaign. These limits often depend on who or where the contribution is coming from, and the amount of the contribution.

         Relevant to this case are the limits on contributions made to political action committees.[1] FECA defines a “political committee” as “any committee, club, association, or other group of persons” that receives “contributions” or makes “expenditures” “for the purpose of influencing any election for Federal Office” “aggregating in excess of $1, 000 during a calendar year.” 52 U.S.C. § 30101(4)(A), (8)(A)(i), (9)(A)(i). This definition has been further tailored by the Supreme Court to “only encompass organizations that are under the control of a candidate or the major purpose of which is the nomination or election of a candidate.” Buckley v. Valeo, 424 U.S. 1, 79 (1976). Political action committees fall within the category of political committees as defined by the Act.

         FECA sets several limitations on the contributions political committees may receive depending on the type of entity that receives the contribution. A political committee that is not authorized by a candidate or established by a national or state political party may not knowingly accept any contribution in excess of $5, 000 per year from an individual. 52 U.S.C. § 30116(f). And, of course, an individual shall not contribute more than $5, 000 per year to this type of political committee. Id. § 30116(a)(1)(C).

         The $5, 000 limit on contributions to political committees does not apply, however, to political committees that solely engage in independent expenditures. See SpeechNow, 599 F.3d at 694-95. Independent expenditures are defined by FECA as expenditures “that expressly advocate[] the election or defeat of a clearly identified candidate” and are “not made in concert or cooperation with or at the request or suggestion of such candidate, the candidate's authorized political committee, or their agents, or a political party committee or its agents.” 52 U.S.C. § 30101(17).

         The inability to put limitations on contributions to independent expenditure-only political committees has led to “the genesis of so-called ‘Super PACs.'” Stop this Insanity, 902 F.Supp.2d at 37. Super PACS were born from the union of the rulings in two First Amendment campaign finance cases. In the first case, Citizens United v. FEC, the Supreme Court “conclude[d] that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” 558 U.S. 310, 357 (2010). Therefore, the Court held, the government did not have a sufficient anti-corruption interest in restricting corporations from engaging in political speech funded from the corporation's general treasury if that speech was in the form of an independent expenditure. Id. at 358.

         In the second case, SpeechNow, the D.C. Circuit held that if under Citizens United there was no anti-corruption interest in limiting independent expenditures then there could not be an anti-corruption interest in regulating contributions to independent expenditure-only political action committees. 599 F.3d at 694-95. The D.C. Circuit acknowledged that the only interest recognized by the Supreme Court as sufficiently important to outweigh First Amendment interests implicated by contributions for political speech was the interest of “preventing corruption or the appearance of corruption.” SpeechNow, 599 F.3d at 692 (citations omitted). Applying the then-new precedent of Citizens United, the D.C. Circuit reasoned that if the Supreme Court ruled that limits on independent expenditures were unconstitutional, it necessarily follows that limits on contributions to political committees that engaged solely in independent expenditures are also unconstitutional. Id. This is because, like the independent expenditures in Citizens United, “contributions to groups that make only independent expenditures also cannot corrupt or create the appearance of corruption.” Id. at 694. In other words, the government “has no anti-corruption interest in limiting contributions to an independent expenditure group” and therefore, the D.C. Circuit held, any limits on such contributions are unconstitutional. Id. at 695.

         Enter Super PACs. Because these political action committees make solely independent expenditures, they are “permitted to receive unlimited amounts of money from both individuals and corporations.” Stop This Insanity, 902 F.Supp.2d at 37. This allows for an “unlimited [amount of] money to flow into the electoral process for express advocacy” for particular candidates so long as the expenditures are not coordinated with that candidate. Id. at 38.

         In light of Citizens United and SpeechNow, the FEC issued an advisory opinion explaining the SpeechNow ruling and its effects on the regulation of political action committees. FEC Advisory Op. 2010-11 (Commonsense Ten), 2010 WL 3184269 (July 22, 2010). The advisory opinion explained that the FEC's understanding was that it “necessarily follows” from Citizens United and SpeechNow “that there is no basis to limit the amount of contributions to” an independent expenditure-only political committee “from individuals, political committees, corporations and labor organizations, ” which are covered by 52 U.S.C. § 30116(a)(1)(C). Id. at *2. The advisory opinion also triggered FECA's safe harbor for “any person involved in any specific transaction or activity which is indistinguishable in all its material aspects” from the activity described in the opinion. 52 U.S.C. § 30108(c)(1)(B). Additionally, anyone who relies on a finding in an advisory opinion and does so in good faith “shall not, as a result of any such act, be subject to any sanction provided” by FECA. Id. § 30108(c)(2). Since issuing the advisory opinion, the Commission has not enforced the limits in 52 U.S.C. § 30116(a)(1)(C) when contributions are given to groups that make only independent expenditures. Def.'s Mot. to Dismiss, ECF No. 39 at 11.[2]

         FECA allows any person to file an administrative complaint with the FEC alleging a violation of the statute. 52 U.S.C. § 30109(a)(1); see also 11 C.F.R. § 111.4. After reviewing the complaint, and relevant submissions made by the administrative respondents, the FEC must determine whether there is “reason to believe” that FECA has been violated. 52 U.S.C. § 30109(a)(2). If the Commission dismisses the complaint, FECA allows “[a]ny party aggrieved” by the dismissal to file suit to obtain judicial review.[3] 52 U.S.C. § 30109(a)(8)(A). If the reviewing court concludes that the Commission's dismissal is “contrary to law, ” the court can “direct the Commission to conform with [that] declaration within 30 days.” Id. § 30109(a)(8)(C).

         B. ...

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