United States District Court, District of Columbia
CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Plaintiff,
v.
AMERICAN ACTION NETWORK, Defendant.
MEMORANDUM OPINION
CHRISTOPHER R. COOPER UNITED STATES DISTRICT JUDGE
“The
Federal Election Commission is the only government agency
that does exactly what Congress designed it to do:
nothing.” The punchline of that old Washington joke may
be increasingly true, but its premise is uncharitable to
Congress. Because when Congress mandated that the six-member
Commission be split down party lines, it anticipated that
partisan deadlocks were likely to result. So it legislated a
fix: Under the Federal Election Campaign Act
(“FECA”), if the Commission dismisses an
administrative complaint alleging a campaign finance law
violation by a third party, the complainant may sue the FEC
in federal district court. And if the court finds that the
dismissal was contrary to FECA, and the Commission fails to
correct the illegality on remand, the administrative
complainant can sue the alleged violator directly.
That's
what happened here. In 2012, the government watchdog group
Citizens for Responsibility and Ethics in Washington
(“CREW”) complained to the FEC that the American
Action Network (“AAN”), a Washington-based
political non-profit, was operating as an unregistered
political committee in violation of FECA. The FEC dismissed
the complaint, finding no reason to believe that a violation
had occurred, and CREW sued. This Court concluded that the
agency had acted contrary to FECA in dismissing the complaint
and remanded the complaint to the agency, ordering it to act
within thirty days. The FEC complied but dismissed the
complaint anew on different grounds, prompting CREW to sue a
second time. The Court concluded that the Commission had
again misapplied FECA and again remanded the matter with
instructions to act. This time around, the agency failed to
comply with the Court's directive. Accordingly, CREW has
invoked FECA's citizen-suit provision to sue AAN
directly, seeking a declaration that AAN is a political
committee and an injunction ordering it to make the attendant
disclosures that FECA requires. To the Court's knowledge,
this is the first suit to be filed under FECA's
citizen-suit provision.
AAN now
moves to dismiss CREW's complaint, mounting a bevy of
challenges to CREW's standing, the reviewability of the
Commission's dismissals, the sufficiency of CREW's
factual allegations, and the constitutionality of FECA's
citizen-suit provision. For the reasons to follow, the Court
will deny AAN's motion in large part.
I.
Background
A.
FECA
The
Federal Election Campaign Act imposes disclosure requirements
on organizations that spend money to influence federal
elections. These requirements advance “three important
interests: providing the electorate with relevant information
about the candidates and their supporters; deterring actual
corruption and discouraging the use of money for improper
purposes; and facilitating enforcement of the prohibitions in
the Act.” McConnell v. FEC, 540 U.S. 93, 121
(2003) (controlling opinion of Stevens & O'Connor,
J.J.).
Some of
FECA's disclosure requirements depend on the type of
communication an organization engages in. Where, for example,
an entity spends over $250 in a calendar year on
“independent expenditure[s]”-defined as
communications “expressly advocating the election or
defeat of a clearly identified candidate, ” 52 U.S.C.
§ 30101(17)(A)-it must file a report with the Commission
containing information about itself and its contributors,
id. § 30104(c)(1).
FECA
also mandates certain disclosures based on an entity's
campaign-related spending patterns. As relevant here,
“political committee[s]” are required to appoint
a treasurer, keep records on their contributors, and file
regular reports during a general election year disclosing,
among other information, the amounts they spent on
contributions and expenditures. Id. §§
30102-04. Political committees must also register with the
FEC. Id. § 30103.
An
entity qualifies as a “political committee” when
it satisfies two separate conditions: (1) it receives or
spends more than $1, 000 in a calendar year for the purpose
of influencing a federal election, id. §
30101(4)(A), (8)(A)(i), (9)(A)(i); and (2) it is either
“under the control of a candidate” or has
“the major purpose” of “nominat[ing] or
electi[ng] . . . a candidate, ” Buckley v.
Valeo, 424 U.S. 1, 79 (1976). This second condition
comes not from the text of FECA, but from the Supreme
Court's decision in Buckley. Because a broader
definition of “political committee” could unduly
threaten the speech of “groups engaged purely in issue
discussion”-as opposed to those engaged in
“campaign related” activity-Buckley held
that this narrowing construction was constitutionally
required. Id.
Twenty-six
years after Buckley, Congress passed the Bipartisan
Campaign Reform Act of 2002 (“BCRA”), which
amended FECA by adding new disclosure requirements. BCRA was
aimed in part at regulating corporate and union spending on
ads that, though nominally related to political issues, were
plainly intended to influence voters in upcoming federal
elections. See McConnell, 540 U.S. at 126-32. To
capture these “so-called issue ads, ”
id. at 126, Congress created a new category of
communications, “electioneering communication[s],
” which are television advertisements that air within
sixty days of a federal election, clearly identify a
candidate running for federal office, and target the relevant
electorate, 52 U.S.C. § 30104(f)(3)(A)(i). Under BCRA,
an organization that spends over $10, 000 per calendar year
on electioneering communications must file a statement
disclosing information about itself, the candidates
identified in the communications, the recipients of any
disbursements, and any donors who have given over $1, 000 to
the organization toward electioneering communications since
the beginning of the preceding calendar year. Id.
§ 30104(f)(1)-(2); 11 C.F.R. §
104.20(c).[1]“[E]lectioneering
communications” must also include disclaimers noting
the name of the entity that paid for the ad and whether the
ad was authorized by a candidate. 52 U.S.C. § 30120(a);
see 11 C.F.R. § 100.11(c)(3).
The
FEC, which is tasked with enforcing FECA, is an independent
agency with six Commissioners. See 52 U.S.C. §
30106(a)(1). The Commission has chosen not to adopt a rule
that would further clarify the meaning of
Buckley's “major purpose”
limitation. Instead, it determines on a case-by-case basis
whether particular entities have a major purpose of
nominating or electing a candidate. See Shays v.
FEC, 511 F.Supp.2d 19, 30 (D.D.C. 2007).
Any
person or entity may file a complaint with the FEC alleging a
FECA violation. 52 U.S.C. § 30109(a)(1). If four or more
Commissioners find “reason to believe” that FECA
was or will soon be violated, then the Commission
“shall . . . investigat[e]” the complaint.
Id. § 30109(a)(2). If fewer than four
Commissioners find “reason to believe” that FECA
was or will soon be violated, the complaint is dismissed.
See id. § 30106(c). When a complaint is
dismissed, Commissioners voting against enforcement must
provide a statement of reasons explaining their dismissal
decision. See FEC v. Nat'l Republican Senatorial
Comm., 966 F.2d 1471, 1476 (D.C. Cir. 1992). “Any
party aggrieved” by an FEC dismissal decision may
petition for this Court's review. 52 U.S.C. §
30109(a)(8)(A). If the Court finds the agency's dismissal
to be “contrary to law, ” it can direct the FEC
to take action within thirty days that “conform[s]
with” the Court's ruling. Id. §
30109(a)(8)(C). If the Commission fails to take action to
conform with the Court's order, the administrative
complainant may sue the alleged FECA violator directly
“to remedy the violation involved in the original
complaint.” Id.
B.
Procedural History
The
Court's previous Opinions extensively detail AAN's
electioneering communications, the FEC's two deadlocks,
and the controlling Commissioners' two Statements of
Reasons for not opening an investigation. See CREW v.
FEC, (“CREW I”), 209 F.Supp.3d 77
(D.D.C. 2016); CREW v. FEC (“CREW
II”), 299 F.Supp.3d 83 (D.D.C. 2018). The Court
will only summarize the key points here.
1.
The FEC's First Dismissal
In
2012, CREW and its then-executive director filed an
administrative complaint with the FEC alleging that, between
July 23, 2009 and June 30, 2011, AAN operated as an
unregistered political committee. A tax-exempt §
501(c)(4) organization, AAN's self-described mission is
to “encourage and promote ‘center-right policies
based on the principles of freedom, limited government,
American exceptionalism, and strong national
security.'” Motion to Dismiss (“MTD”)
at 6 (quoting AAN, About AAN,
https://americanactionnetwork.org/about). To that
end, it spent large sums of money on political
advertisements. From mid-2009 to mid-2011, AAN devoted about
$4 million to independent expenditures (ads directly
imploring voters to support or oppose federal candidates) and
$13.7 million to electioneering communications (ads
identifying candidates near an election and targeting the
relevant electorate) out of its $27.1 million in total
spending. CREW alleged in its administrative complaint that
this spending qualified AAN as a political committee within
the meaning of FECA, as supplemented by
Buckley's “major purpose” test, and
that AAN violated FECA by not complying with the disclosure
requirements for such entities.
The
FEC's Office of General Counsel recommended that the
Commissioners find reason to believe AAN violated FECA and
open an investigation. The Commission deadlocked 3-3 on that
recommendation, which closed the case. The three controlling
Commissioners, i.e. those who declined to proceed,
issued a joint Statement of Reasons in which they counted
only the $4 million that AAN had spent on express advocacy in
assessing whether AAN's major purpose was
election-related. In re Am. Action Network, Inc.,
Statement of Reasons of Chairman Lee E. Goodman and
Commissioners Caroline C. Hunter and Matthew S. Petersen
(“First Statement of Reasons”), MUR No. 6589, at
20 (July 30, 2014).[2] In so doing, they categorically deemed all
of AAN's electioneering communications to be
“genuine issue advocacy.” Id. at 19-21.
The Commissioners reasoned that this approach was required by
appellate precedent applying the First Amendment to political
advertising. Id. at 13-16, 21-24. While the
controlling Commissioners devoted the vast majority of the
Statement of Reasons to that legal analysis, they added in a
footnote that “the constitutional doubts raised here
militate in favor of cautious exercise of [their]
prosecutorial discretion.” Id. at 23 n.137.
More on that later.
CREW
sued the FEC, and AAN intervened to protect its interests.
CREW contended that the Commission had acted “contrary
to law” in dismissing the complaint, and the Court
agreed. The Court held that it was erroneous under FECA to
categorize all electioneering communications as genuine issue
advocacy. CREW I, 209 F.Supp.3d at 92. At the same
time, the Court rejected CREW's invitation to hold that
all electioneering communications were per se
political advocacy to be counted in determining AAN's
major purpose. Id. at 93. The Court remanded the
case to the Commission, instructing it to carefully consider
the ads in question rather than simply presume that they were
all issue advocacy. Id. at 95.
2.
The FEC's Second Dismissal
On
remand, the Office of General Counsel again recommended an
investigation, and the Commission again deadlocked, with the
same three Commissioners finding no reason to believe AAN had
violated FECA. The agency thus dismissed CREW's complaint
anew. This time, the Statement of Reasons issued by the
controlling Commissioners analyzed the ads individually,
weighing several factors to determine whether each
electioneering communication should count toward an
election-related major purpose. In re Am. Action
Network, Inc., Statement of Reasons of then-Chairman Matthew
S. Petersen and Commissioners Caroline C. Hunter and Lee E.
Goodman (“Second Statement of Reasons”), MUR No.
6589, at 6-17 (Oct. 19, 2016). These factors included (1) the
extent to which the ad's language focuses on
“elections, voting, political parties, ” and the
like; (2) “the extent to which the ad focuses on issues
important to the group or merely on the candidates referenced
in the ad;” (3) “the content of the ad”
(but “only to the extent necessary . . . to understand
better the message being conveyed”); and (4) whether
the ad “contains a call to action and, if so, whether
the call relates to the . . . issue agenda or, rather, to the
election or defeat of federal candidates.” Id.
at 5-6. As context, the controlling Commissioners noted that
while the ads at issue ran in the lead-up to the 2010
mid-term federal elections, they also preceded an anticipated
lame duck congressional session. Id. at 6-8. This
meant, the Commissioners reasoned, that some ads might be
properly categorized as genuine issue advocacy imploring
constituents to encourage their representative to support or
oppose potential legislation, not as election-related
communication. Id.
The
three controlling Commissioners went on to find that many of
the ads at issue were indeed genuine issue advocacy that did
not reflect an election-related purpose, even if they met the
statutory criteria of “electioneering
communications.” Id. at 8-17. The controlling
Commissioners included in this category of “genuine
issue advocacy” ads such as “Skype, ” which
expressly identified Congresswoman Dina Titus, a Democrat
from Nevada who was narrowly defeated in her 2010 reelection
bid:
Person 1: Hey, what's up?
Person 2: Hey. You have to check out the article I just
sent you. Apparently convicted rapists can get Viagra paid
for by the new health care bill.
Person 1: Are you serious?
Person 2: Yep. I mean, Viagra for rapists? With my tax
dollars? And Congresswoman Titus voted for it.
Person 1: Titus voted for it?
Person 2: Yep. I mean, what is going on in
Washington?
Person 1: In November, we need to tell Titus to repeal
it. [Superimposed text: “Tell Congresswoman Titus
to vote for repeal in November. Vote Yes on H.R. 4903.
(202)225-3252.”]
Id. at 14. The Commissioners concluded that this ad
(and all others mentioning healthcare) did not reflect an
election-related purpose, explaining that the ads'
criticisms “are couched in terms of past votes taken by
the named officeholder and are accompanied by calls to action
designed to influence the officeholders' votes in the
lame-duck session.” Id. This conclusion led
the controlling Commissioners again to dismiss CREW's
complaint. Id. at 18. The Second Statement of
Reasons nowhere mentions prosecutorial discretion as a reason
for the dismissal.
CREW
then challenged the second dismissal, AAN again intervened,
and the Court again held that the dismissal was contrary to
FECA. The Court concluded that while the controlling
Commissioners did not repeat the mistake of categorically
excluding all of AAN's electioneering advertisements as
not indicative of an election-related major purpose, they
still erred by applying a multi-factor test that ignored
Congress's presumption that such ads are designed to
advance the election of a federal candidate. CREW
II, 299 F.Supp.3d at 98. That presumption in mind, the
Court strained to accept the controlling Commissioners'
position that an attack ad focused a Congresswoman's past
vote on the Affordable Care Act was designed to change her
view rather than to oust her from office in an election only
weeks away. Id. at 98-99. The Court thus remanded
the complaint to the agency with instructions to reconsider
the dismissal in light of Congress's intent. Id.
at 101.
This
time, however, the agency failed to conform to the
Court's Order within thirty days, which gave CREW the
right to file this citizen suit. See 52 U.S.C.
§ 30109(a)(8)(C) (permitting an administrative
complainant to bring suit directly against the alleged
violator “to remedy the violation involved in the
original [administrative] complaint” when the FEC fails
to comply with a Court order within thirty days). Thirty-four
days after the Court's Order, CREW filed suit. AAN now
moves to dismiss CREW's complaint. The Court held a
hearing on the motion on August 6, 2019.
II.
Legal Standards
AAN
moves to dismiss CREW's complaint for lack of
subject-matter jurisdiction and failure to state a claim.
When evaluating a motion to dismiss for lack of
subject-matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1), courts must “assume the truth of
all material factual allegations in the complaint and
construe the complaint liberally, granting plaintiff[s] the
benefit of all inferences that can be derived from the facts
alleged.” Am. Nat'l Ins. Co. v. FDIC, 642
F.3d 1137, 1139 (D.C. Cir. 2011) (cleaned up). But courts
need not accept inferences unsupported by facts alleged in
the complaint, nor must they accept plaintiffs' legal
conclusions. See, e.g., Browning v.
Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). Federal
courts are courts of limited jurisdiction, and the law
presumes that “a cause lies outside this limited
jurisdiction.” Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994). To defeat a 12(b)(1)
motion, a plaintiff must show “by a preponderance of
the evidence that the Court has subject matter
jurisdiction[.]” Biton v. Palestinian Interim
Self-Gov't Auth., 310 F.Supp.2d 172, 176 (D.D.C.
2004). The Court “may consider materials outside the
pleadings in deciding whether to grant a motion to dismiss
for lack of jurisdiction.” Jerome Stevens Pharm.,
Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005)
(citation omitted).
In
analyzing a motion to dismiss for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6), the Court
must determine whether the complaint “contain[s]
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). This requires “factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. To
make this determination, the Court “must take all of
the factual allegations in the complaint as true, ”
id., and must “constru[e] the complaint
liberally in the plaintiff's favor with the benefit of
all reasonable inferences derived from the facts alleged,
” Stewart v. Nat'l Educ. Ass'n, 471
F.3d 169, 173 (D.C. Cir. 2006). Finally, the Court may only
“consider the facts alleged in the complaint, documents
attached thereto or incorporated therein, and matters of
which it may take judicial notice.” Id.
III.
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