Garcia for Congress, et al. v. FEC

On May 27, 2014, the US District Court for the Northern District of Texas granted the FEC's motion for summary judgment and dismissed Garcia for Congress's challenge to an administrative fine assessed against the committee and its treasurer. The decision lets stand a $15,220 administrative fine stemming from the campaign’s failure to file two required 48-hour notices of campaign contributions.

Background

Under the Federal Election Campaign Act and Commission regulations, campaign committees must notify the Commission of any contribution of $1,000 or more received less than 20 days but more than 48 hours before the day of any election in which the candidate is running. 2 U.S.C. §434(a); 11 CFR 104.5(f). The "48-Hour Notice" requirement applies to all campaign contributions and loans, including those from the candidate. See 11 CFR 100.52(a) and (b).

On February 8, 2013, the Commission notified Garcia for Congress, the authorized campaign committee of Domingo Garcia, and Swati Patel, the committee's treasurer (collectively, "the plaintiffs") that it found reason to believe the campaign violated the Act by failing to file 48-hour notices for two loans totaling $150,000 that Mr. Garcia made to his campaign. Based on the schedule of penalties at 11 CFR 111.44, the Commission assessed an administrative fine of $15,220 against the Garcia campaign and its treasurer.

The plaintiffs challenged the Commission’s finding in a letter received by the agency’s Office of Administrative Review on March 1, 2013. After considering the committee's written response, the FEC's Reviewing Officer recommended no changes to the Commission’s preliminary determination and assessment of an administrative fine. On May 20, 2013, the Commission adopted the recommendation and made a final determination that Garcia for Congress and its treasurer violated the Act and imposed a civil penalty of $15,220.

Litigation and court decision

On June 24, 2013, the plaintiffs filed suit to challenge the Commission’s decision. Among other things, the plaintiffs argued that the Commission "ignored that the FECA contains a safe harbor provision," and that the fine assessed was "grossly disproportionate to what Plaintiffs failed to timely disclose." In later court filings, the plaintiffs made additional allegations and arguments concerning treasurer inexperience and unavailability; whether candidate loans constitute  contributions subject to the 48-hour notice requirement; and the amount of the penalty.

On May 27, 2014, the court granted the FEC's Motion for Summary Judgment. The court concluded that, based upon the record of the plaintiffs' failure to file the reports timely and no evidence that a factual error or penalty miscalculation was made in the Commission’s findings, there was a rational basis for the Commission’s decision. The court determined that any additional arguments by the plaintiffs were waived since they were not originally presented to the FEC during the original challenge to the Commission’s findings.

The court dismissed the plaintiffs’ claims with prejudice.

Source: FEC Record—July 2014; August 2013

District Court (N. Dist. of TX)

Court decisions:

• Judgment (05/27/2014)
• Memorandum Opinion and Order (05/27/2014)

Related documents:

• Defendant FEC's Reply to Plaintiffs' Response to the Commission's Motion for Summary Judgment (12/20/2013)
• Plaintiffs' Response to Defendant's Motion for Summary Judgment (12/09/2013)
• Defendant FEC's Memorandum of Law in Support of its Motion for Summary Judgment (09/19/2013)
• Defendant FEC's Certification of Administrative Record for Administrative Fine No. 2636 (09/19/2013)
• Defendant FEC's Motion for Summary Judgment (09/19/2013)
• Defendant FEC's Answer to Plaintiffs' Original Complaint (09/18/2013)
• Complaint (06/24/2013)