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Brown v. Federal Election Commission

United States District Court, District of Columbia

May 13, 2019

LEIGH BROWN et al., Plaintiffs,
v.
FEDERAL ELECTION COMMISSION, Defendant.

          MEMORANDUM OPINION

          TIMOTHY J. KELLY UNITED STATES DISTRICT JUDGE

         Does the First Amendment permit the Federal Election Commission to regulate, through disclaimer and disclosure requirements, long-running radio ads for a person's eponymous business once that person decides to run for federal office? Leigh Brown, a realtor and recent entrant into a primary race for a House of Representatives seat, argues it does not, largely because those requirements allegedly function as an outright ban on her ability to run them under the circumstances here. The crux of this case is whether that is so and, even if it is not, whether the FEC can regulate Brown's ads in the same way it does other speech about federal candidates shortly before elections.

         Brown and her business, known as Leigh Brown & Associates, seek a preliminary injunction preventing the FEC from applying these disclaimer and disclosure requirements to radio ads for the business. But because they have neither shown a likelihood of success on the merits of the claims they have pled, nor demonstrated that they are likely to suffer irreparable harm in the absence of preliminary relief, the Court declines to issue an injunction. As explained below, only one set of Brown's ads are subject to the disclaimer and disclosure requirements under the statute at issue. And those requirements do not ban Brown or her business from speaking. Further, even when, as here, the regulated speech “only pertain[s] to a commercial transaction, ” those requirements still serve the voting public's “interest in knowing who is speaking about a candidate shortly before an election.” Citizens United v. FEC, 558 U.S. 310, 369 (2010).

         I. Background

         A. Statutory and Regulatory Framework

         The Federal Election Campaign Act (FECA), 52 U.S.C. § 30101 et seq., established the Federal Election Commission (FEC) and empowered it to interpret and enforce various campaign finance restrictions. See Van Hollen, Jr. v. FEC, 811 F.3d 486, 489 (D.C. Cir. 2016). The Supreme Court upheld most of FECA's spending limitations in Buckley v. Valeo, 424 U.S. 1 (1976), and adopted a narrowing construction of FECA's disclosure requirements such that they would only reach those ads that “expressly advocate[d] the election or defeat of a clearly identified candidate.” Van Hollen, 811 F.3d at 489 (quoting Buckley, 424 U.S. at 80). After several decades, during which political advertisers developed creative workarounds to FECA's disclosure requirements, Congress passed the Bipartisan Campaign Reform Act (BCRA), Pub. L. No. 107-155, 116 Stat. 81, in 2002. Van Hollen, 811 F.3d at 489.

         1. Electioneering Communications

         The statutory and regulatory provisions primarily at issue here regulate speech about federal candidates shortly before elections. “BCRA recognized and regulated a new category of political advertising called ‘electioneering communications, '” id., and required certain disclaimers and disclosures to accompany electioneering communications to “provid[e] the electorate with information, ” Citizens United, 558 U.S. at 367 (quoting Buckley, 424 U.S. at 66). An electioneering communication is:

         any broadcast, cable, or satellite communication which-

(I) refers to a clearly identified candidate for Federal office;
(II) is made within-
(aa) 60 days before a general, special, or runoff election for the office sought by the candidate; or
(bb) 30 days before a primary or preference election, or a convention or caucus of a political party that has authority to nominate a candidate, for the office sought by the candidate; and
(III) in the case of a communication which refers to a candidate for an office other than President or Vice President, is targeted to the relevant electorate.

52 U.S.C. § 30104(f)(3)(A)(i). Relevant to the first element, BCRA defines “clearly identified” to mean that “the name of the candidate involved appears, ” “a photograph or drawing of the candidate appears, ” or “the identity of the candidate is apparent by unambiguous reference.” Id. § 30101(18). The third element, targeting to the relevant electorate, is satisfied “if the communication can be received by 50, 000 or more persons . . . in the district the candidate seeks to represent.” 52 U.S.C. § 30104(f)(3)(C).

         When a communication falls within this definition, two requirements for the person airing the ad are triggered. The first is a disclaimer notice. See 11 C.F.R. § 110.11(a). The ad must include a “clear and conspicuous” disclaimer that specifies who paid for the ad and whether the candidate it mentions authorized it. Id. § 110.11(b), (c)(1). For radio ads authorized by the candidate, the ad “must include an audio statement by the candidate that identifies the candidate and states that he or she has approved the communication.” Id. § 110.11(c)(3)(i).

         The second requirement is a report to the FEC disclosing various financial information about the ad. See 52 U.S.C. § 30104(f); 11 C.F.R. § 104.20. If a corporation paid for the ad, it must identify its corporate officers, the amount it has paid for electioneering communications, and the candidates that they clearly identify. 11 C.F.R. § 104.20(a)(3), (c).[1] This requirement only applies once a corporation has spent more than $10, 000 on electioneering communications in a calendar year. Id. § 104.20(b).

         BCRA authorizes the FEC to promulgate regulations exempting communications from these disclaimer and disclosure requirements as long as the communications do not “promote[] or support[] a candidate for that office, or attack[] or oppose[] a candidate for that office (regardless of whether the communication expressly advocates a vote for or against a candidate).” See 52 U.S.C. §§ 30101(20)(A)(iii), 30104(f)(3)(B)(iv). The FEC has suggested that it might also be able to create such exemptions on a case-by-case basis through the issuing of advisory opinions, which require the vote of four Commissioners. See 52 U.S.C. §§ 30106(c), 30108; Advisory Op. Request 2012-20 (Mullin), https://www.fec.gov/files/legal/ aos/2012-20/AO-2012-20.pdf.

         2. Coordinated Communications

         Also relevant to the instant motion are a set of restrictions on corporations' campaign-related activity. Campaign finance law has long prohibited corporations from donating to campaigns. See FEC v. Beaumont, 539 U.S. 146, 152-53 (2003). In BCRA, Congress specified that any electioneering communication that a corporation makes in coordination with a campaign constitutes a prohibited donation. 52 U.S.C. § 30116(a)(7)(C). This effectively bans “coordinated communications, ” as the FEC calls them. 11 C.F.R. § 109.21(a).

         The ban has a few, narrow exceptions. See 11 C.F.R. § 109.21(f)-(i). Relevant here is the “[s]afe harbor for commercial transactions, ” which reads:

A public communication in which a Federal candidate is clearly identified only in his or her capacity as the owner or operator of a business that existed prior to the candidacy is not a coordinated communication with respect to the clearly identified candidate if:
(1) The medium, timing, content, and geographic distribution of the public communication are consistent with public communications made prior to the candidacy; and
(2) The public communication does not promote, support, attack, or oppose that candidate or another candidate who seeks the same office as that candidate.

11 C.F.R. § 109.21(i).

         B. Leigh Brown's Business and Candidacy

         Brown is a realtor in the Charlotte, North Carolina metropolitan area. ECF No. 11 (“Am. Compl.”) ¶¶ 45-46. Since 2003, her corporation, Mallard Creek Properties, Inc., has done business as Leigh Brown & Associates, and employs eight people besides Brown herself. Id. ¶ 46. For the past thirteen years, Brown has recorded and aired radio ads for the business. Id. ¶¶ 47-48. She typically runs two ads at a time, recording new ones every 60 to 90 days. Id. ¶ 48.These ads

generally are 60 seconds in length, and typically feature discussion of a real estate issue specific to the Charlotte real estate market (e.g., local property values and trends in housing prices). For the past several years, the advertisements typically note how many houses her team sells and consistently include two closing slogans: “I'm interviewing for a job[;] I want to be your realtor” and “There is a difference when you call Leigh Brown.”

Id. ¶ 51. She has contracted to air 706 ads for $48, 204 in 2019. Id. ¶ 47.

         Earlier this year, Brown entered the primary for the special election for the seat in the U.S. House of Representatives representing North Carolina's Ninth Congressional District. Id. ¶¶ 34, 45. That primary election will take place on May 14, 2019.[2] Id. ¶ 34.

         C. FEC Proceedings

         Shortly after announcing her candidacy, Brown sought an advisory opinion from the FEC about four radio ads for Leigh Brown & Associates. Id. ¶ 33. The first two were ads Brown was already airing on the radio. They read as follows:

In a world where everything seems to be online and at the click of a button, you have to realize that real estate pricing is just not an exact science. I'm Leigh Brown with RE/MAX and I'm getting a lot of phone calls about the current tax valuations and the updates to the process. My clients need help with disputing that number because occasionally it's wrong. I also have folks that want to know what their property is worth based on their upgrades and condition and I can give a more accurate ballpark than a website can. Frankly, y'all, the reason you have a trusted Realtor is that we are there for you between the buying and the selling and all steps in between. My team and I sell a house every two days, y'all, and that's not bragging. That's interviewing for a job. In fact, the job ...

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