Unity08 v. FEC

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 15, 2009 Decided March 2, 2010
No. 08-5526
UNITY08,
APPELLANT
v.
FEDERAL ELECTION COMMISSION,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:07-cv-00053-RWR)
Alexandra A.E. Shapiro argued the cause for appellant.
With her on the briefs were Marc E. Isserles and J. Scott
Ballenger.
Adav Noti, Attorney, Federal Election Commission,
argued the cause for appellee. With him on the brief was
David B. Kolker, Associate General Counsel.
Donald J. Simon, J. Gerald Hebert, and Fred Wertheimer
were on the brief for amici curiae Campaign Legal Center and
Democracy 21 in support of appellee and urging affirmance.
Before: GINSBURG and HENDERSON, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
2
Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.
WILLIAMS, Senior Circuit Judge: Unity08 is a kind of
would-be post-partisan political party, aiming to mobilize
what it believes to be a vital and viable center in American
politics. Its plan has been to facilitate an online nominating
process to choose a mixed ticket of one Republican and one
Democrat for president and vice president of the United
States. Until completion of that process, its only political
activity (other than playing this web-based facilitation role)
would be to seek state ballot access as a party.
Unity08 requested an advisory opinion from the Federal
Election Commission on the question of whether it would be
required to register as a political committee before selecting
candidates. It argued that an organization would not be
subject to regulation as a political committee if it did not seek
to influence the election of “a particular identified candidate.”
Since Unity08 was planning to conduct its fundraising and
other major activities before identifying a particular candidate,
it argued that it should not be treated as a political committee
for those activities.
The Commission rejected Unity08’s suggestion, however,
reasoning that under the Commission’s precedent “expenses
incurred in gathering signatures to qualify for a ballot for
Federal office are expenditures” subject to regulation under
the Federal Election Campaign Act of 1971, 2 U.S.C. §§ 431-
457 (“FECA” or the “Act”). See Letter from David M.
Mason, Vice Chairman, Federal Election Commission, to
John J. Duffy, Esq., Steptoe & Johnson LLP (Oct. 10, 2006),
A.O. 2006-20, 2006 WL 2987615, at *3; see also 2 U.S.C.
§ 431(4) (“The term ‘political committee’ means . . . any
3
committee, club, association, or other group of persons which
receives contributions aggregating in excess of $1,000 during
a calendar year or which makes expenditures aggregating in
excess of $1,000 during a calendar year . . . .”); id.§ 431(9)(A)(i) (defining expenditure to include any purchase
“made by any person for the purpose of influencing any
election for Federal office”). The Commission also found that
Unity08 was an “organization[] . . . the major purpose of
which is the nomination or election of a candidate,” citing the
words of the gloss that Buckley v. Valeo, 424 U.S. 1, 79
(1976), put on the Act’s definition of a political committee in
the interest of partially saving the statute’s constitutionality.
Unity08 brought suit in the district court under the
Administrative Procedure Act, seeking to challenge the
advisory opinion. The district court held that the matter was
reviewable but granted summary judgment in favor of the
Commission, finding that the applicable precedent did not
foreclose the FEC’s position. This appeal followed. We
agree as to jurisdiction but find for plaintiff on the merits.
* * *
At the outset, the Commission objects that the case is
unreviewable—on the theories that it is moot because Unity08
has ceased activity; that the Administrative Procedure Act
does not authorize review because the opinion is not “final
agency action”; and that the Federal Election Campaign Act
precludes direct judicial review of Commission advisory
opinions.
The Commission rests its mootness claim on a contention
that Unity08 has “disclaimed any intention of participating in
any election other than the 2008 presidential race” and
4
“disavowed any desire to become a permanent political
party.” Appellee’s Br. at 15. The general principle of course
is sound. A case may become moot if the party challenging
the legality of government restrictions on the party’s conduct
voluntarily forswears any intent to engage in the conduct the
government has prohibited. See, e.g., City News & Novelty,
Inc. v. City of Waukesha, 531 U.S. 278, 283 (2001).
But in this case Unity08 continues to seek to operate—
and to engage in fundraising operations disallowed by the
Commission’s advisory opinion—if it wins this appeal. The
chairman of Unity08 filed a sworn declaration unambiguously
stating a conditional intent to resume activities in a future
election cycle if the group wins its lawsuit against the
Commission. See Decl. Peter Ackerman 1 (“If Unity08 is
successful in this litigation, Unity08 has a clear and definite
intent to resume its activities—renamed ‘Unity12’—for the
2012 presidential election. The ‘Unity’ mission remains as
critical today for the 2012 presidential election as it was in
2006 for the 2008 presidential election.”). Even the website
post that the Commission relied on for its claim that Unity08
has suspended activities blamed the Commission’s ruling at
issue here for “forc[ing] [Unity08] to scale back—not cease—
[its] operations” and reiterated that the group is “not closing
[its] doors . . . if (when) [it] win[s] [its] case” in court. See
FEC’s Motion to Supplement Record, Exhibit at 2-3.
Unity08’s uncontroverted intention to operate in the future in
ways that would violate the Commission’s advisory opinion
keeps the controversy alive.
The Commission next argues that the Administrative
Procedure Act does not permit judicial review of the
challenged advisory opinion in this case, because that opinion
is not “final agency action,” see 5 U.S.C. § 704, and that, even
5
if it were, the Federal Election Campaign Act “preclude[s]
judicial review,” id. § 701(a)(1).
The Commission concedes that “the issuance of an
advisory opinion marks the conclusion of FECA’s advisory
opinion process” and that the Commission’s refusal to issue a
favorable advisory opinion therefore deprives the organization
that requested it of a legal reliance defense which it could
otherwise receive under 2 U.S.C. § 437f(c). See FEC v. Nat’l
Rifle Ass’n of Am., 254 F.3d 173, 185 (D.C. Cir. 2001)
(“[A]dvisory opinions have binding legal effect on the
Commission.”); Appellee’s Br. at 23. But the Commission
argues a lack of finality because a negative advisory opinion
“makes no final determination of any ‘rights or obligations’
[and does not] change[] any legal relationships.” Id. at 24. In
the Commission’s view, judicial review of the Commission’s
legal advice is not available unless and until Unity08 acts in a
manner inconsistent with the advice and the Commission
elects to file an enforcement action against Unity08 in district
court.
Administrative orders are final when “they impose an
obligation, deny a right or fix some legal relationship as a
consummation of the administrative process.” Chicago &
Southern Air Lines, Inc. v. Waterman Steamship Corp., 333
U.S. 103, 113 (1948)); see also Bennett v. Spear, 520 U.S.
154, 177-178 (1997); Franklin v. Massachusetts, 505 U.S.
788, 797 (1992) (“The core question is whether the agency
has completed its decisionmaking process, and whether the
result of that process is one that will directly affect the
parties.”).
The fact that the advisory opinion procedure is complete
and deprives the plaintiff of a legal right—2 U.S.C.
6
§ 437f(c)’s reliance defense, which it would enjoy if it had
obtained a favorable resolution in the advisory opinion
process—“denies a right with consequences sufficient to
warrant review.” Environmental Defense Fund, Inc. v.
Ruckelshaus, 439 F.2d 584, 589 n.8 (D.C. Cir. 1971). As we
have previously noted, agency advisory opinions are final
agency action where they “constitute[] final and authoritative
statements of position by the agencies to which Congress
ha[s] entrusted the full task of administering and interpreting
the underlying statutes.” Am. Federation of Gov’t Employees,
AFL-CIO v. O’Connor, 747 F.2d 748, 753 n.10 (D.C. Cir.
1984) (opinion for the court of then-Judge Ruth B. Ginsburg)
(citing Nat’l Conservative Political Action Comm. v. FEC,
626 F.2d 953 (D.C. Cir. 1980) (per curiam); Nat’l Automatic
Laundry & Cleaning Council v. Schultz, 443 F.2d 689 (D.C.
Cir. 1971)). Moreover, contrary to the Commission’s notion,
parties are commonly not required to violate an agency’s legal
position and risk an enforcement proceeding before they may
seek judicial review. See, e.g., Alaska Dep’t of
Environmental Conservation v. EPA, 540 U.S. 461, 483
(2004) (holding that the finality requirement in a statute
governing the Environmental Protection Agency was satisfied
in a preenforcement challenge where the “EPA had spoken its
‘last word’” on the legal issue in dispute and the regulated
party “would risk civil and criminal penalties if it defied” the
EPA’s directive (internal quotation marks omitted)). Our
reluctance to require parties to subject themselves to
enforcement proceedings to challenge agency positions is of
course at its peak where, as here, First Amendment rights are
implicated and arguably chilled by a “credible threat of
prosecution.” Chamber of Commerce of U.S. v. FEC, 69 F.3d
600, 603 (D.C. Cir. 1995); see also 2 U.S.C. § 437g(d)
(imposing criminal penalties for “knowing and willful”
violations of the Act).
7
Although the Commission pitched this argument as a
problem of “finality,” the Commission’s objection to
preenforcement review may resonate more in ripeness
doctrine than in finality. “Finality, ripeness, and exhaustion
of administrative remedies are related, overlapping doctrines
that are analytically . . . distinct.” John Doe, Inc. v. Drug
Enforcement Admin., 484 F.3d 561, 567 (D.C. Cir. 2007).
Ordinarily, a claim that a challenge to an agency’s final legal
position must await an enforcement proceeding is analyzed
under the ripeness doctrine’s requirements that issues be fit
for review and (in some cases) that deferral of review would
pose significant hardship on the complaining party.
We take it that the Commission did not make a ripeness
argument because such an argument appears foreclosed by
precedent in this circuit. See Nat’l Conservative Political
Action Comm., 626 F.2d at 958 (holding that, where “the
Commission passed upon the legality of a concrete solicitation
proposed in some detail by” a political party, a third party’s
challenge to the advisory opinion was ripe for judicial
review); see also Chamber of Commerce of U.S., 69 F.3d at
604 (rejecting the Commission’s argument that its regulation
and its refusal to issue a favorable advisory opinion to
plaintiffs were unripe where “[t]he issue presented is a
relatively pure legal one that subsequent enforcement
proceedings will not elucidate”). Although not every
unfavorable advisory opinion issued by the Commission will
necessarily give the party who requested it a ripe claim, there
is little to distinguish this case from National Conservative
Political Action Committee. As there, a specific organization
has sought advice on the legal consequences of pursuing a
detailed, concrete course of action, and its only other route for
seeking judicial review of the unfavorable advice would be to
8
disregard the Commission’s opinion and risk enforcement
penalties.
The Commission finally claims that the FECA implicitly
precludes direct judicial review of Commission advisory
opinions, since the Act contains detailed procedural
provisions but fails to provide any private right of action
against the Commission except in two circumstances not
implicated here. See 2 U.S.C. § 437g(a)(8) (permitting suits
by individuals who have complained to the Commission about
violations of the Act on which the Commission has failed to
act); id. § 437g(a)(4)(C)(iii) (permitting judicial review by
individuals whom the Commission has found committed a
violation of the Act).
We do not find this contention persuasive. In asserting
such a negative pregnant the Commission encounters the
general presumption in favor of reviewability, see Abbott
Laboratories v. Gardner, 387 U.S. 136, 140 (1967), a
presumption at its “apogee” where the complainant raises “a
credible claim that the agency action violates [its]
constitutional rights,” Richard J. Pierce, Jr., Administrative
Law Treatise § 17.9, at 1315 (4th ed. 2002). The absence of
any “explicit statutory authority” purporting to preclude
judicial review does not foreclose the Commission’s
preclusion claim, but it does cut against it. Cf. Abbott
Laboratories, 387 U.S. at 141. Moreover, the Supreme Court
rejected in Abbott Laboratories itself the government’s
argument “that because the statute includes a specific
procedure for [pre-enforcement] review of certain enumerated
kinds of regulations, not encompassing those of the kind
involved here, other types were necessarily meant to be
excluded from any pre-enforcement review.” Id. (footnote
call number omitted). That Congress provided for review in
9
circumstances that may have seemed either exceptionally
compelling or at risk of being brushed off is feeble support for
precluding review in a case where standard principles allow it.
The Commission tries to beef up its claim of implicit
preclusion by pointing out that Congress set out rather
detailed procedures as a predicate to the two types of
decisions marked for review. See 2 U.S.C. § 437g(a);
Appellee’s Br. at 21. As was true with the specific provision
for review of such determinations, we see the procedures as
indicating no more than special sensitivity with respect to
these two types of decisions. It seems to us utterly
improbable that Congress’s imposition of some procedural
rules for investigations should, with little else, be read as an
intention to implicitly preclude judicial review, particularly in
contexts implicating First Amendment values. Given “the
context of the entire legislative scheme,” Abbott Laboratories,
387 U.S. at 141, we find no congressional intention to
foreclose judicial review.
* * *
Unity08 challenges the reasonableness of the
Commission’s ruling that it is subject to regulation as a
political committee, principally in light of our decision in
FEC v. Machinists Non-Partisan Political League, 655 F.2d
380 (D.C. Cir. 1981), which held that only organizations
supporting or opposing a “clearly identified candidate” may
be regulated as political committees. Unity08 argues that
because its principal operations would be conducted prior to
selecting a presidential candidate it would never be in the
position of supporting or opposing a “clearly identified
10
candidate,” and therefore should enjoy the protection from
regulation recognized in Machinists.
To make the limits of the issue clear, we note that in a
letter sent to the Commission to supplement its advisory
opinion request, Unity08 mentioned “plans to help the
nominated candidate gain ballot access in those states that did
not allow it to qualify as a party.” J.A. 199. But it added in
the next sentence that after nomination it would “file another
Advisory Opinion Request.” Id. In this FEC proceeding,
then, it sought no advice on the issue of post-selection
assistance to its nominees, and indeed the Commission’s
response never alluded to such possible activities. Thus the
question before us is whether a group that seeks to select (or
“draft”) candidates, but which has never supported a clearly
identified candidate in the past and does not have any fixed
intention of supporting the selected candidates, can avoid
regulation as a political committee under Machinists.
In Machinists the Commission had sought to enforce a
subpoena it had issued to a registered multi-candidate political
committee that was “encouraging and assisting the formation
of ‘draft-Kennedy’ groups in several states . . . engaged in
promoting the acceptance of presidential candidacy by
Senator Edward Kennedy.” 655 F.2d at 383. Rejecting the
Commission’s effort, we held “that the Commission lacks
subject matter jurisdiction over the draft group activities” at
issue. Id. at 384-85. In our view, “construing the term
‘political committee’ to include groups whose activities are
not under the control of a ‘candidate,’ or directly related to
promoting or defeating a clearly identified ‘candidate’ for
federal office” created “grave constitutional difficulties.” Id.
at 393. In the absence of any indication in the legislative
history of FECA that Congress intended to regulate “draft”
11
groups as political committees and in light of “Buckley’s
judicial gloss limiting the definition of ‘political committees’
which could constitutionally be regulated,” we concluded that
draft groups were outside the scope of the Act. Id. at 395-96
(citing Buckley, 424 U.S. 1).
While we recognized that the statute on its face
“seem[ed] to include as political committees . . . ‘draft
candidate’ groups,” id. at 391, we thought it clear that the
Supreme Court’s Buckley decision had limited the definition
of “political committee” in order to avoid the constitutional
problems that a broader definition would present. Id. at 392
(internal quotation marks omitted) (quoting Buckley, 424 U.S.
at 12-28). Buckley does not on its face discuss the application
of FECA to “draft” groups but it consciously narrowed the
statutory definition of “political committees,” holding that the
statute “need only encompass organizations that are under the
control of a candidate or the major purpose of which is the
nomination or election of a candidate.” 424 U.S. at 79. The
Commission argues that Buckley’s “major purpose” test,
properly understood, encompasses groups such as Unity08
that intend to nominate or elect a candidate, whether or not the
group has already “clearly identified” the candidate. But
Machinists’ reading of Buckley as limited to groups who have
a “clearly identified” candidate was essential to its outcome in
Machinists and is therefore binding on us. See LaShawn A. v.
Barry, 87 F.3d 1389, 1395 (D.C. Cir. 1996) (“One three-judge
panel . . . does not have the authority to overrule another
three-judge panel of the court.”).
It seems hard for the Commission to argue that Unity08’s
contemplated activities would constitute support or opposition
of a “clearly identified candidate” more than did the “draft
Kennedy” groups at issue in Machinists. Those groups, after
12
all, had the purpose of building a draft movement for a
particular, named individual to run for a specific office in a
specific election cycle. Unity08, by contrast, seeks to
organize voters online based on common views and to
coordinate a selection process that will culminate in the
identification of a particular, named individual—but only at
the very end of the process.
To avoid this conclusion, the Commission argues that
Machinists should be read as resting on a distinction between
groups that seek to encourage someone to become a candidate
and groups that are organized for the purpose of actually
nominating or electing that individual. In the Commission’s
view, the raison d’être of the draft groups in Machinists was
merely to get someone to enter the race—not for that
individual to be nominated on any particular ticket or to win
the race. This reading attributes to the Machinists panel a
strange disaggregation of the aims of draft groups; surely the
panel understood that a group organized for the purpose of
drafting Kennedy wanted at least to help bring about
Kennedy’s nomination.
The Commission also contends that allowing a group
such as Unity08 to avoid regulation as a political committee
creates the kind of opportunity for corruption that the
Supreme Court recognized in Buckley as sufficient to justify
the abridgement of First Amendment rights that FECA
regulation entails. But the Commission fails to explain why
the opportunity for corruption is any greater in this case than it
was in Machinists. Indeed, if anything, the opportunity for
corruption appears to be lesser here: whereas the groups in
Machinists almost certainly were providing assistance of some
kind to Senator Kennedy by increasing his name recognition
and support, Unity08’s proposed method of generating
13
nominees was such that neither donors nor candidates would
know at the time of the donations which candidate would
ultimately benefit from the group’s convention. This would
appear to significantly lessen the likelihood of a “quid pro
quo” of the kind that Buckley supposed might undermine the
integrity of our political process. See 424 U.S. at 26.
Of course under Unity08’s plans, potential donors can
anticipate that in due course nominees will emerge and be
able to benefit from the ballot access that Unity08 will have
by then secured. The nominees might feel grateful or even
beholden toward donors who effectively conferred such ballot
access. However true that may be, it is hard to see how this
sense of gratitude or obligation would be stronger than that of
Senator Kennedy under the facts of Machinists.
The Commission’s advisory opinion also asserted that
Machinists “expressly left open the question of whether draft
groups could be treated as political committees for purposes
of the Act’s contribution limits after Congress’s 1979
amendments to the Act.” See A.O. 2006-20, 2006 WL
2987615, at *4 n.8. The Commission’s advisory opinion did
not identify any aspect of the text or legislative history of the
1979 amendments that might be read to abrogate Machinists.
And the assertion misreads Machinists, which left open the
possibility of treating draft groups as political committees
only for purposes of the disclosure requirements, not for
purposes of the contribution limits. See 655 F.2d at 395 (“The
writers of the House report apparently believed that ‘draft’
groups should be treated as political committees for some
purposes, at least. But there is no indication from the 1979
Amendments or the legislative history that such ‘draft’ groups
were to be bound by the contribution limitations.” (emphasis
14
added)). In any event, the Commission evidently abandons
this argument, as it nowhere mentions it in its brief.
Absent any compelling ground for distinguishing
Machinists, we find that Unity08 is not subject to regulation
as a political committee unless and until it selects a “clearly
identified” candidate.
The Commission lastly argues that the reading of
Machinists that Unity08 proposes, if accepted, would have the
effect that “all political parties . . . would be constitutionally
exempt from regulation as political committees in each
election cycle until they had nominated their candidates for
federal office.” Appellee’s Br. at 41. But as we noted earlier,
we regard Unity08’s request for an advisory opinion as
presenting only the question of whether a group that has never
supported a clearly identified candidate—and so far as
appears will not support any candidate after the end of its
“draft” process—comes within the holding of Machinists. By
contrast, political parties previously have supported “clearly
identified” candidates and almost invariably intend to support
their nominees. The risk of a “quid pro quo” from donations
to such parties might therefore be materially greater than the
risks of corruption presented by bona fide draft groups.
Hence, we need not decide whether there are any varieties of
“standard” political parties to which Machinists might apply.
The judgment of the district court is
Reversed.