Campaign Legal Center v. Federal Election Commission ( 2021 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CAMPAIGN LEGAL CENTER and
DEMOCRACY 21,
Plaintiffs,
Case No. 20-cv-00730 (CRC)
v.
FEDERAL ELECTION COMMISSION,
Defendant,
RIGHT TO RISE SUPER PAC, INC.,
Intervenor-Defendant.
MEMORANDUM OPINION
Before the Court is intervenor-defendant Right to Rise’s (“RTR”) motion to reconsider
the Court’s February 19, 2021 order granting RTR’s motion to dismiss in part. RTR asks the
Court to revisit its holding that plaintiffs Campaign Legal Center and Democracy 21 have
standing to pursue their claim. Also before the Court is plaintiffs’ motion for a default judgment
against the Federal Election Commission (“FEC”). For the reasons described below, the court
will grant RTR’s motion for reconsideration, and, finding that it lacks subject matter jurisdiction,
dismiss the case and deny plaintiffs’ motion for a default judgment against the FEC.
I. Background
Motion to Dismiss
In early 2015, Campaign Legal Center and Democracy 21 filed two administrative
complaints with the Federal Election Commission (“FEC”). The groups alleged that during the
2016 presidential election cycle, then-Florida Governor Jeb Bush and the Right to Rise super
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PAC (“RTR”), failed to abide by various disclosure requirements under the Federal Election
Campaign Act (“FECA”). Those complaints sat dormant for nearly five years without action
from the FEC. In March 2020, plaintiffs brought this action, seeking declaratory and injunctive
relief to compel the FEC to act on their complaints. RTR intervened as a defendant and moved
to dismiss.
On February 19, 2021, the Court granted RTR’s motion to dismiss in part and denied it in
part. See Campaign Legal Ctr. v. Fed. Election Comm’n, 520 F. Supp. 3d 38 (D.D.C. 2021)
(Cooper, J.) (“CLC”). The Court agreed with RTR that plaintiffs failed to state a claim under the
APA. Because FECA provides an “alternative, comprehensive” scheme for judicial review, it
“precludes review of FEC enforcement provisions under the APA.” Id. at 50 (quoting Citizens
for Responsibility and Ethics in Wash. v. FEC, 164 F. Supp. 3d 113, 119–20 (D.D.C. 2015)
(“CREW”) (Cooper, J.)). The Court additionally agreed with RTR that, to the extent plaintiffs
sought a determination from the FEC that certain of RTR and Bush’s expenditures were
“coordinated,” such a request is precluded by Wertheimer v. FEC, 268 F.3d 1070, 1075 (D.C.
Cir. 2001). CLC, 520 F. Supp. 3d at 47.
However, the Court rejected RTR’s argument that plaintiffs had not alleged an
informational injury sufficient for Article III standing. Id. at 46. The Court reasoned as follows.
The testing-the-waters provisions of FECA “permit would-be candidates to evaluate the
feasibility of candidacy without triggering candidate status when the funds they raise or spend
for that purpose exceed $5,000.” Id. at 43. While potential candidates do not need to disclose
that spending during the testing-the-waters phase preceding their candidacy, if they eventually
become a candidate, FECA requires them to disclose all of those transactions in their campaign
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committee’s first report. Id. 1 If the would-be-candidate decides not to run, though, no disclosure
is required.
Plaintiffs alleged that Governor Bush was testing the waters of a possible presidential run
as early as January 2015. Id. at 45. But, Bush’s first report as a candidate, filed on July 15,
2015, appeared to only disclose testing-the-waters spending going back to June 5, 2015. This
left the five or so months of testing-the-waters spending between January and June 2015
undisclosed. See PL’s Resp. at 17, ECF No. 13. Taking the plaintiffs’ allegations as true—that
is, that Bush engaged in various testing-the-waters activity as early as January 2015—it appeared
Bush had failed to disclose months of spending that FECA required him to disclose in his
campaign’s first report. 520 F. Supp. 3d at 46. This would constitute an informational injury
sufficient for Article III standing. See id. at 45–46 (citing Campaign Legal Ctr. & Democracy 21
v. FEC, 952 F.3d 352, 356 (D.C. Cir. 2020)).
Motion for Reconsideration
On March 5, 2021, RTR moved for reconsideration. RTR argued the Court had
incorrectly applied the legal standard applicable to a motion under Fed. R. Civ. P 12(b)(6) to
RTR’s motion under Rule 12(b)(1). RTR also claimed the Court’s decision was mistaken as to
standing, because “Governor Bush disclosed all his testing-the-waters activities on his
presidential campaign’s first campaign finance report.” Recon. Mot. at 2, ECF No. 19. In
support of that contention, RTR claimed Bush reported “$386,020.15 of testing-the-waters
activity for the period January 2015 through June 2015 in his presidential campaign’s first
1
In its earlier ruling, the Court understood this to be plaintiffs’ reading of the statute.
Based on subsequent briefing, the Court now believes Defendant-Intervenor RTR shares this
interpretation. See Reply at 5, ECF No. 22 (arguing that “the Bush campaign and Right to Rise
timely reported the exact information FECA requires” for the period before June 2015); see also
Transcript of Mot. Hearing at 5 (Apr. 20, 2021), ECF No. 27.
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disclosure report,” id. at 8, without citation to the report or any explanation of how that sum was
derived. In the alternative, RTR sought an order certifying the Court’s decision for interlocutory
appeal.
In response, plaintiffs argued that RTR had “no basis for its assertion that all testing the
waters activity at issue here was publicly disclosed,” because it was not clear how RTR would
know the full scope of the Bush campaign’s testing-the-waters activities. Resp. at 9, ECF No.
21. Plaintiffs maintained that, although Bush “reported some portion of his testing-the-waters
spending,” there is no indication that “this reporting was remotely complete or accurate,” given
the extensive travel and fundraising done by Bush in the months before his candidacy was
announced. Id. at 11.
Motion for Default Judgement
Plaintiffs separately filed a motion for default judgment against the FEC on March 26,
2021. Plaintiffs claimed that the FEC “failed to appear, answer, plead, or otherwise defend this
action as required by the Federal Rules of Civil Procedure.” Default Mot. at 1, ECF No. 23.
RTR opposed the motion, arguing that default judgment was not appropriate because (in its
view) the plaintiffs do not have standing and therefore cannot establish subject matter
jurisdiction. Default Resp. at 1, ECF No. 24.
Motions Hearing
The Court held a hearing on the reconsideration motion on April 20, 2021. At the
hearing, the Court invited the parties to address what specifically was disclosed in the Bush
campaign’s first report and for what time period. Transcript of Mot. Hearing at 2–3. It was only
then that RTR pointed out—for the first time—that the testing-the-waters spending dated June 5,
2015 in Bush’s first report was listed on that date because that was the date Bush became a
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candidate. Transcript at 6. Under RTR’s legal theory, spending during the earlier testing-the-
waters phase became an in-kind disbursement to the campaign on the date the campaign was
announced, because there was no campaign before then. Id. at 5–6. Counsel also explained that,
underneath the disbursement date there was an earlier date listed, indicating the date that Bush
actually paid the relevant vendor for the testing-the-waters expense. Id. Looking at this second
date, some of this testing-the-waters spending seemed to occur as early as the summer of 2014.
See e.g., Jeb 2016 Inc., 2015 July Quarterly Report, FEC Form 3P at 1675 (filed July 15, 2015;
amended Jan. 31, 2016) (listing, as an example an “In-kind (TTW)” disbursement for
communications consulting in the amount of $1875, with the date of disbursement listed as
06/05/2015 and the notes listing the date 7/11/2014). 2 The total amount of Bush’s testing-the-
waters activity from July 2014 to June 2015 now appeared to be roughly the $386,000 that RTR
had claimed earlier.
Counsel for the plaintiffs agreed with RTR’s reading of the forms. Transcript at 7.
However, plaintiffs continued to argue that there had to be more than $386,000 worth of testing-
the-waters activity during this time, given the widespread media coverage of Bush’s travel before
his candidacy was announced, and the fact that the reports still only showed a single testing-the-
waters travel disbursement in the amount of $1,089. Id. at 10, 13. RTR responded by asserting
that most of Bush’s travel was done on behalf of RTR and was therefore paid for by RTR and
disclosed in RTR’s quarterly reports, not the campaign’s. Id. at 11–12.
Because the parties had not, up until that point in the litigation, focused the Court’s
attention on particular instances of Bush’s travel, the Court invited further briefing from the
2
Form available at
https://docquery.fec.gov/pdf/887/201507159000159887/201507159000159887.pdf. The Court
may take judicial notice of publicly filed documents of this type.
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parties on the matter. Id. at 23–25. The Court has received that supplemental briefing and the
motions are ripe for the Court’s consideration.
II. Legal Standards
Motion for Reconsideration
Rule 60(b) authorizes a court to grant relief from an order in certain limited
circumstances—based on “fraud,” “mistake,” or, “any other reason that justifies relief.” Fed. R.
Civ. P. 60(b)(1), 60(b)(6). “It is well-settled that the party seeking relief from a judgment bears
the burden of demonstrating that he satisfies the perquisites for such relief.” Green v. AFL-CIO,
811 F. Supp. 2d 250, 254 (D.D.C. 2011). “Relief under Rule 60(b)(1) motions is rare,” Hall v.
CIA, 437 F.3d 94, 99 (D.C. Cir. 2006), and should only be granted when the movant shows the
Court’s order contains a clear or obvious error, Douglas v. D.C. Hous. Auth., 306 F.R.D. 1, 5
(D.D.C. 2014). Although the moving party must demonstrate that it is entitled to relief under
Rule 60, the court “is vested with a large measure of discretion in deciding whether to grant a
Rule 60(b) motion.” Twelve John Does v. District of Columbia, 841 F.2d 1133, 1138 (D.C. Cir.
1988).
Standing
The plaintiff “bears the burden of proving by a preponderance of the evidence that the
Court has subject-matter jurisdiction over her claims.” Schmidt v. U.S. Capitol Police Bd., 826
F. Supp. 2d 59, 69 (D.D.C. 2011) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561
(1992)). To overcome a Rule 12(b)(1) motion, plaintiffs must show “by a preponderance of the
evidence that the Court has subject matter jurisdiction to hear [the] case.” Biton v. Palestinian
Interim Self-Gov’t Auth., 310 F. Supp. 2d 172, 176 (D.D.C. 2004).
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As this Court has already explained, a plaintiff can establish standing by demonstrating a
denial of access to information “where a statute (on the claimants’ reading) requires that the
information be publicly disclosed and there is no reason to doubt . . . that the information would
help them.” CLC, 520 F. Supp. 3d at 45 (citing Campaign Legal Ctr., 952 F.3d at 356).
III. Analysis
The crux of RTR’s argument is that all the information FECA requires to be disclosed
has already been disclosed in some format—either in Bush’s reports or RTR’s own reports. RTR
Supp. Br. at 9, ECF No. 28. Therefore, according to RTR, plaintiffs do not lack access to any
legally-mandated disclosures and have not suffered an informational injury.
Plaintiffs counter that RTR simply has no basis to know the full extent of Bush’s testing-
the-waters activity, and therefore RTR cannot credibly assert that all of Bush’s pre-candidacy
spending and travel can be accounted for in either Bush’s or RTR’s reports. Pl. Supp. Br. at 2,
ECF No. 29. Plaintiffs further argue that RTR’s reports do not account for all of Bush’s travel or
indicate which spending is associated with a particular instance of travel. Id. at 9–10. In support
of this second argument, plaintiffs point to five instances of Governor Bush’s reported travel that
seem like testing-the-waters activity, yet do not appear to be linked to any recorded travel or
lodging expenditures:
a. A January 20, 2015 meeting in Washington between Bush and “Republican
lobbyists.” Pl. Supp. Br. at 4.
b. Bush’s February 27, 2015 speech at CPAC. Id. at 5.
c. The March 7, 2015 Iowa agricultural summit. Id.
d. A March 27, 2015 “Chamber of Commerce breakfast meeting” in Greenville, South
Carolina. Id.
e. The May 16, 2015 annual Lincoln Dinner hosted by the Iowa Republican Party. Id.
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Plaintiffs maintain that Bush’s reported testing-the-waters spending simply does not
account for all of this (and other) pre-candidacy travel. Id. at 6–7. Plaintiffs point to the single
testing-the-waters disbursement for travel and lodging (amounting to only $1,089) listed in
Bush’s report as evidence that the reporting is incomplete. Id. at 7.
RTR now claims that much of the spending plaintiffs are looking for is reflected in its
FEC reports. RTR originally asserted in earlier rounds of briefing that “Governor Bush
disclosed all of his spending for the purpose of testing-the-waters on his campaign’s first FEC
report,” without citation to any report, or any other documentation that would support this
contention. Reply Br. at 6, ECF No. 15. In its supplemental briefing, however, RTR explains, in
significantly more detail than it did previously, where the spending for each of the instances of
travel that plaintiffs list can be found in RTR’s own reports. 3
For instance, in connection with the “DC bundler event” on January 20, 2015, RTR
disclosed a $12,159 disbursement related to catering expenses. RTR Supp. Br. at 12. RTR also
listed three disbursements for airfare ($1,065, $2,273, and $2,660, respectively), dated March 6
and 7, 2015. Id. at 14–15. RTR maintains that these records show payment for Bush’s travel to
and from the March 7 event in Iowa. Id. at 15. Similar expenses for lodging and airfare are
listed in RTR’s reports for the March 17 South Carolina breakfast event and the May 16 Iowa
dinner. Id. at 15–16.
Plaintiffs respond that this reporting is still “demonstrably incomplete” because it reflects
only one $1,089 disbursement for travel over the 13-month period during which Bush was
3
In RTR’s view, it sponsored Governor Bush’s participation in these events “because
Right to Rise Leadership PAC was the beneficiary of the activity,” and therefore it was required
to list the expenses on its reports. Supp. Br. at 11–12; see also id. at 17 (“When Governor Bush
attended either Right to Rise or Right to Rise Leadership PAC events, those committees paid for
expenses related to his travel because Bush’s travel and attendance benefitted the committees.”).
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testing the waters, “despite dozens of known trips and events during that time.” Pl. Supp. Br. at
7. After hearing from counsel at the motion hearing and upon review of the supplemental
briefing, however, the Court now agrees with RTR that the spending related to the four campaign
events plaintiffs identified has been fully disclosed.
As for CPAC, RTR does not claim to have any expenditures related to Governor Bush’s
attendance on February 27, 2015. RTR Supp. Br. at 13. RTR argues that CPAC, and the events
Bush attended there, were sponsored and paid for by other organizations and that Bush’s
attendance at CPAC was not testing-the-waters activity. Id. at 14. In support of this claim, RTR
provides a declaration from Bush’s director of scheduling, attesting that Bush attended an event
at CPAC sponsored by the College Republicans on February 27. RTR Supp. Br. 16, Ex 1. RTR
also cites news sources showing that Bush’s speech at CPAC was at an event hosted, and
presumably paid for, by the American Conservative Union. RTR Supp. Br. 13–14 & n.11–
12. While this does not definitely prove that those groups paid for and disclosed the relevant
CPAC expenses, in the absence of any evidence to the contrary from plaintiffs, it is enough to
defeat their claim to standing.
Furthermore, plaintiffs are unable to point to other instances of Bush’s pre-candidacy
travel aside from the five events listed above. While it is true that the plaintiffs do not need “to
identify in granular detail each and every campaign expenditure” that is missing, Pl. Supp. Br. at
8, ECF No. 29, plaintiffs must show “by a preponderance of the evidence” that this Court has
standing to hear the case, Biton, 310 F. Supp. 2d at 176. It is not enough for the plaintiff to rest
on “bare legal conclusions [or] unsupported inferences.” Browning v. Clinton, 292 F.3d 235,
242 (D.C. Cir. 2002).
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The Court is convinced—with the benefit of RTR’s belated explanation of both its and
Jeb 2016’s reports—that the expenses for Bush’s travel and lodging in connection with those five
events have been disclosed. 4 Plaintiffs have not identified any other pre-candidacy events,
travel, or speaking engagements from which the Court could infer the existence of still-
undisclosed spending. Without such allegations, the complaint does not contain more than the
“unsupported inference” that there is more spending to be disclosed. Plaintiffs therefore lack
standing to advance their claim under FECA.
IV. Default Judgment
Rule 55 of the Federal Rules of Civil Procedure provides for the entry of a default
judgment where a defendant “has failed to plead or otherwise defend.” Fed. R. Civ. P. 55(a).
When the default judgment sought would be against the United States, its officers, or its
agencies, the claimant must establish “a claim or right to relief by evidence that satisfies the
court.” Fed. R. Civ. P. 55(d).
RTR argues that plaintiffs cannot establish a right to relief because the Court lacks
jurisdiction to adjudicate their claims. The Court agrees. Because the Court has reconsidered its
prior order and determined that the plaintiffs do not have standing, their default judgment motion
must be denied. See Herbin v. Seau, 317 F. Supp. 3d 568, 571 (D.D.C. 2018); Strong-Fisher v.
LaHood, 611 F. Supp. 2d 49, 52 n.2 (D.D.C. 2009).
4
Whether or not this pattern of spending amounts to a violation of FECA’s soft-money
prohibition, as plaintiffs argue, does not alter the standing analysis. As this Court already
decided, plaintiffs are not entitled to a “legal conclusion that carries certain law enforcement
consequences.” CLC, 520 F. Supp. 3d at 47 (quoting Wertheimer, 268 F.3d at 1075).
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V. Conclusion
For the foregoing reasons, the Court will grant RTR’s Motion for Reconsideration.
Having found a lack of standing, the Court will dismiss the case for want of jurisdiction. The
Court will accordingly deny plaintiffs’ motion for a default judgment against the FEC. A
separate Order shall accompany this memorandum opinion.
CHRISTOPHER R. COOPER
United States District Judge
Date: December 30, 2021
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