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Ongoing Litigation

CREW v. FEC (16-5300 & 16-5343)

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CREW v. FEC
Case Summary

On August 20, 2014, Citizens for Responsibility and Ethics in Washington (CREW) and its executive director, Melanie Sloan, filed suit against the FEC in the U.S. District Court for the District of Columbia, challenging the Commission’s dismissal of their administrative complaints against the American Action Network (AAN) and Americans for Job Security (AJS). The plaintiffs allege that the Commission’s dismissal was “arbitrary, capricious, an abuse of discretion, and contrary to law.” The plaintiffs further allege that the Commission has adopted a “de facto regulation … without notice” interpreting the “‘major purpose’ test” for political committee status “as limited to a consideration of express advocacy (or its functional equivalent) only, conducted during an ill-defined and ever-changing period of time.”

 

Background
The Act and Commission regulations generally define the term "political committee” to include any group that raises or spends more than $1,000 during a calendar year for the purpose of influencing federal elections. 2 U.S.C. §431(4)(A); 11 CFR 100.5(a). In its landmark Buckley v. Valeo decision, the Supreme Court wrote that this definition need only include organizations whose “major purpose . . . is the nomination or election of a candidate.” 424 U.S. 1, 79.

In 2012, CREW and Melanie Sloan filed complaints with the FEC against AJS (MUR 6538) and AAN (MUR 6589) alleging that the major purpose of the groups was the nomination or election of federal candidates. Based on that—and the amounts each group had spent on federal elections—CREW believed that AJS and AAN had violated the Federal Election Campaign Act (the Act) and Commission regulations requiring them to register as political committees and to file reports disclosing their receipts and disbursements. 2 U.S.C. §§433(a) and 434(a)(4); 11 CFR 102.1(d) and 104.1(a).

The Commission, by a vote of three to three, did not find reason to believe that either AJS or AAN had violated the Act, and closed both cases.

On August 20, 2014, CREW and Ms. Sloan filed suit challenging the Commission’s dismissal of their administrative complaints. The plaintiffs asked the court to declare the FEC’s dismissal of their administrative complaints and its reliance on an alleged “de facto regulation” regarding major purpose to be arbitrary, capricious, an abuse of discretion, and contrary to law. They ask the court to enjoin the FEC from relying on its purported interpretation of the major purpose test and to order the Commission to conform to the court’s declaration within 30 days.

 

District Court Decisions

On August 13, 2015, the United States District Court for the District of Columbia (the “Court”) granted the Commission’s motion to dismiss portions of CREW's complaint. The claims that were the subject of the Commission’s motion alleged that the Commission’s dismissal of CREW’s administrative complaints had effectively created a “de facto regulation” that violated the Administrative Procedure Act (“APA”).

In granting the FEC’s motion to dismiss CREW’s APA claims, the Court noted that the APA “prescribes procedures for administrative agencies engaged in rulemaking,” but concluded that the decisions identified by CREW were “ordinary adjudications.” Even had these decisions announced a new interpretation, they would not be regulations within the meaning of the APA. The Court further stated that CREW has an adequate means to challenge the Commission’s dismissals of their complaints through FECA’s judicial review provision, which precludes APA review. As a result, the Court dismissed CREW’s claims based on the APA.

On September 19, 2016, the Court decided the remaining claims and ruled that the Commission's dismissal of the two administrative complaints filed by CREW and Ms. Sloan was contrary to law.

The Court determined that Citizen's United v. FEC and subsequent lower court decisions recognized a distinction between less-restrictive disclosure requirements and a more restrictive ban on speech. The court concluded that the controlling Commissioners' decision to apply an express advocacy/issue speech distinction in the context of FECA's political committee requirements—excluding the groups' electioneering communications from relevant electoral spending in conducting their major purpose analysis—was contrary to law.

The Court also concluded that a major purpose evaluation that considers the entire lifetime of the organization is neither unreasonable nor contrary to law "as a general matter." But the court found that in the AAN and AJS matters, the Commissioners had "refus[ed] to give any weight whatsoever to an organizations' relative spending in the most recent calendar year" and that such an approach, "at least as applied to" a fifteen-year-old organization like AJS, was contrary to law "in that it tends to ignore crucial facts indicating whether an organization's major purpose has changed."

With respect to CREW's arguments regarding the Commission's alleged application of a 50% plus spending threshold for defining major purpose, the Court rejected the premise of that argument, explaining that "most importantly, it is far from apparent that the Commissioners did apply any such 50%-plus spending threshold for defining major purpose," and further concluded that "[a] reasonable application of a 50%-plus rule would not appear to be arbitrary and capricious."

Ultimately, the Court found that the Commission's dismissal of CREW's administrative complaints against AJS and AAN was contrary to law, and directed the Commission to conform with its declaration within 30 days.

On September 29, 2016, the Commission was unable to reach agreement by the required four affirmative votes to appeal the Court’s decision.

 

Source: FEC Record -- October 2016; September 2016; August 2015; August 2014

 


Court Decisions and Related Documents

 

Appeals Court (DC Circuit) (16-5300 & 16-5343)

Court Decisions:
Related Documents:

 

District Court (DC) (14-1419)

Court Decisions:
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