Citizens For Responsibility v. American Action Network

          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. ...