Citizens for Responsibility & Ethics v. Fed. Election Comm'n
Citizens for Responsibility & Ethics v. Fed. Election Comm'n
Opinion of the Court
Plaintiffs Citizens for Responsibility and Ethics in Washington and Anne L. Weismann, CREW's former Interim Executive Director and current Chief FOIA Counsel (collectively "CREW"), have sued the Federal Election Commission ("FEC") in connection with the Commission's resolution of an administrative complaint that CREW filed with the agency in 2015. In the administrative complaint it filed with the FEC, CREW alleged that a non-profit organization, American Conservative Union ("ACU"); a political action committee, Now or Never PAC; the PAC's treasurer, James C. Thomas III; and an "Unknown Respondent" violated the Federal Election Campaign Act ("FECA" or "the Act"),
CREW filed suit against the Commission, asserting that its handling of the matter violated FECA and the Administrative Procedure Act ("APA"). Specifically, CREW contends that the agency improperly disposed of the administrative complaint without proceeding further to ensure that its investigation encompassed the true sources of the contribution, the individuals or entities that provided the money to Government Integrity that was passed to ACU. CREW contends that the agency should have pursued leads developed during its investigation in accordance with the recommendations of the Office of General Counsel, and it questions the Commission's decision to curtail the investigation in the wake of the conciliation agreement.
The Commission has moved to dismiss the complaint arguing that the Court has no jurisdiction to hear it, and the Court agrees.
Section 30109(a)(1) of FECA authorizes any person who believes a violation of the statute has occurred to file a complaint with the agency. Significantly, under the statute, if the Commission determines that there is probable cause to believe that any person has committed a violation of the Act, it is required to attempt to correct or prevent the violation through a process of conciliation.
The judicial review provision in the statute, subsection (a)(8)(A), states that "[a]ny party aggrieved by an order of the Commission dismissing a complaint filed by such party ... or by a failure of the Commission to act on such ... may file a *36petition with the United States District Court for the District of Columbia."
The FEC is correct that neither of these events took place here. CREW's administrative complaint was brought against three named respondents and one unknown respondent. There was no failure to act on plaintiff's complaint, and the complaint against the four respondents - three named and one unknown - was not dismissed; it was resolved by the conciliation process called for by the statute. Since nothing in the statute gives the Court the power to review investigative decisions made along the way if an administrative complaint was neither dismissed nor ignored, the Court concludes that the challenged agency action is not reviewable under FECA. It further finds that the agency's actions in this circumstance are not reviewable under the APA, and therefore, the Court will grant defendant's motion to dismiss for lack of subject matter jurisdiction. Thus, this opinion will not address, and it should not be interpreted as expressing agreement with, or any view about, the propriety of the agency's actions.
BACKGROUND
I. Statutory Framework
The Federal Election Campaign Act is a statute that requires extensive recordkeeping and disclosure of campaign contributions in an effort "to remedy any actual or perceived corruption of the political process." Fed. Election Comm'n v. Akins ,
The Federal Election Commission is an independent federal agency with exclusive jurisdiction over civil enforcement of FECA.
If the Commission finds "by an affirmative vote of 4 of its members, that there is probable cause to believe that any person" has violated FECA, the statute requires the Commission to
attempt, for a period of at least 30 days, to correct or prevent such violation by informal methods of conference, conciliation, and persuasion, and to enter into a conciliation agreement with any person involved. Such attempt by the Commission to correct or prevent such violation may continue for a period of not more than 90 days. The Commission may not enter into a conciliation agreement under this clause except pursuant to an affirmative vote of 4 of its members. A conciliation agreement, unless violated, is a complete bar to any further action by the Commission, including the bringing of a civil proceeding under paragraph (6)(A).
FECA authorizes an administrative complainant, such as CREW, to seek judicial *37review of the Commission's handling of its complaint in only two circumstances:
Any party aggrieved by an order of the Commission dismissing a complaint filed by such party under paragraph (1), or by a failure of the Commission to act on such complaint during the 120-day period beginning on the date the complaint is filed, may file a petition with the United States District Court for the District of Columbia.
II. Factual Background
On February 27, 2015, the FEC received an administrative complaint from plaintiffs alleging that ACU, Now or Never PAC, its treasurer Thomas, and an unknown respondent violated the Federal Election Campaign Act when ACU contributed $1.71 million it had received from the unknown respondent to Now or Never PAC. Compl. ¶¶ 24-25; Administrative Compl., Ex. A to Pls.' Opp. to Def.'s Mot. to Dismiss [Dkt. # 29-3] ("Admin. Compl.") ¶ 27 (asserting that "[t]he Unknown Respondent provided to ACU the $1.71 million it in turn transferred to Now or Never PAC"); see also First General Counsel's Report, Ex. B. to Pls.' Opp. to Def.'s Mot. to Dismiss [Dkt. # 29-4] at 1-2.
The agency initiated an investigation based on the complaint, Matter Under Review ("MUR") 6920, and in the course of the investigation, it identified Government Integrity as the unknown respondent that had contributed to ACU. Compl. ¶¶ 2, 26; see also Second General Counsel's Report, Ex. C. to Pls.' Opp. to Mot. Dismiss. [Dkt. # 29-5] at 1-2; Third General Counsel's Report, Ex. 2 to Compl. [Dkt. # 1-2] at 1-2.
The FEC's Office of General Counsel ("OGC") learned through discovery that a trust that had a relationship with Government Integrity transmitted funds to Government Integrity; that Government Integrity wired $1.8 million to ACU; and that on the day it received the wire, ACU sent the $1.7 million contribution at issue in the investigation to the Now or Never PAC. Compl. ¶¶ 2, 26-27; Third General Counsel's Report at 2-5; Circulation of Discovery Documents, Ex. E. to Pls.' Opp. to Def.'s Mot. to Dismiss [Dkt. # 29-7] at 2.
On July 11, 2017, the Commission voted 5 to 0 to "[s]ubstitute the name Government Integrity LLC in the place of 'Unknown Respondent' in the Commission's previous findings that Unknown Respondent violated
On August 10, 2017, the Office of General Counsel served a subpoena seeking information from the trust that had the relationship with Government Integrity, John Doe 2, and one of its trustees, John Doe 1.
On September 15, 2017, the OGC recommended that the Commission find reason to believe that John Doe 1 and John Doe 2 violated
On September 20, 2017, a divided Commission rejected the recommendation by a vote of 3 to 2. Compl. ¶ 31; Certification (Sept. 21, 2017), Ex. 4 to Compl. [Dkt. # 1-4] ("Sept. 21 Certif.") at 1-2 (stating that Commissioners Walther and Weintraub voted affirmatively for the motion and Commissioners Goodman, Hunter, and Petersen dissented). Instead, the Commission voted 5 to 0 to authorize the OGC to pursue conciliation with ACU, Now or Never PAC, Thomas, and Government Integrity and to "[t]ake no action at this time on the remaining recommendations" of the OGC. Sept. 21 Certif. at 2-3. The agency entered into discussions with the four respondents and ultimately reached a conciliation agreement. Compl. ¶ 2; Conciliation Agreement, Ex. 3 to Compl. [Dkt. # 1-3].
On October 24, 2017, the Commission voted unanimously to approve the conciliation agreement, Certification (Oct. 24, 2017), Ex. 8 to Compl. [Dkt. # 1-8] ("Oct. 24 Certif."), which included a requirement that the respondents collectively pay a civil penalty of $350,000. Conciliation Agreement at 5; Compl. ¶ 2.
On December 19, 2017, Commissioner Ellen Weintraub, who had voted to enforce the subpoena against John Doe 1 and 2, released a Statement of Reasons concerning the September 20 vote. Statement of Reasons of Commissioner Ellen L. Weintraub, Ex. 1 to Compl. [Dkt. # 1-1]. In Commissioner Weintraub's view, the Commission "failed in [its] mission to follow the money and trace it back to its ultimate source."
On December 20, 2017, Vice Chair Caroline Hunter and Commissioner Lee Goodman, who voted against enforcing the subpoena, issued a separate Statement of Reasons concerning the vote. Statement of Reasons of Vice Chair Caroline C. Hunter and Commissioner Lee E. Goodman, Ex. 5 to Compl. [Dkt. # 1-5]. They concluded that "the unclear state of the law, imminent expiration of the statute of limitations and other legal difficulties weighed in favor of proceeding to conciliation with the named Respondents promptly," rather than jeopardizing the "resolution in hand" with further enforcement actions against other respondents.
III. Procedural History
On December 22, 2017, plaintiffs filed this lawsuit alleging that the Commission's handling of MUR 6920 violated FECA,
On March 30, 2018, the Commission moved to dismiss the complaint pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction and Rule 12(b)(6) for failure to *39state a claim. Def.'s Mot. to Dismiss [Dkt. # 22] ("Mot. to Dismiss"). On May 4, 2018, plaintiffs filed their opposition to the motion, Pls.' Opp. to Mot. to Dismiss [Dkt. # 29] ("Pls.' Opp. to Mot. to Dismiss"), and on May 25, 2018, defendant replied to plaintiffs' opposition. Def.'s Reply in Supp. of Mot. to Dismiss [Dkt. # 31].
On September 7, 2018, the Commission also filed a motion for judgment on the pleadings. Def.'s Mot. J. Pleadings [Dkt. # 32]. Three days later, the parties filed a motion to set a briefing schedule, Consent Mot. to Set a Briefing Schedule on Def.'s Mot. J. Pleadings [Dkt. # 33], which the Court granted. Min. Order (Sept. 11, 2018); see Pls.' Opp. to Def.'s Mot. J. Pleadings [Dkt. # 34], Def.'s Reply in Supp. of Mot. J. Pleadings [Dkt. # 35]. Both the motion to dismiss and the motion for judgment on the pleadings are ripe for decision.
STANDARD OF REVIEW
In evaluating a motion to dismiss under either Rule 12(b)(1) or 12(b)(6), the Court must "treat the complaint's factual allegations as true and must grant plaintiff 'the benefit of all inferences that can be derived from the facts alleged.' " Sparrow v. United Air Lines, Inc. ,
Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. See Lujan v. Defs. of Wildlife ,
When considering a motion to dismiss for lack of jurisdiction, unlike when deciding a motion to dismiss under Rule 12(b)(6), the Court "is not limited to the allegations of the complaint." Hohri v. United States ,
ANALYSIS
Defendant has asked the Court to dismiss this matter for lack of subject matter jurisdiction or, in the alternative, *40for failure to state a claim, or to grant it judgment on the pleadings. The Court does not have subject matter jurisdiction over this action because FECA does not provide for judicial review of the Commission's management of an investigation that could grow out of an administrative complaint. Accordingly, the Court will dismiss the complaint pursuant to Rule 12(b)(1), and the motion for judgment on the pleadings will be denied as moot.
I. The Federal Election Campaign Act does not provide for judicial review of this action.
There is a "strong presumption that Congress intends judicial review of administrative action," Bowen v. Mich. Acad. of Family Physicians,
FECA permits private parties to seek to initiate a civil enforcement action by the Commission, and it provides that a party that files an administrative complaint with the Commission and is "aggrieved by an order of the Commission dismissing a complaint filed by such party" may seek judicial review.
Plaintiffs argue that the Commission's decision "to take no action on the OGC's recommendation to find reason to believe the [John] Does violated the law" and to close the file was tantamount to a dismissal of their complaint. Pls.' Opp. to Mot. to Dismiss at 19-21;
Plaintiffs filed their administrative complaint against three named respondents and "Unknown Respondent." Compl. ¶ 24; Admin. Compl. ¶ 1. After some investigation, the Commission determined that Government Integrity was the "Unknown Respondent" that provided the money to ACU. See July 12 Certif. (certifying unanimous Commission vote to "[s]ubstitute the name Government Integrity LLC in the place of 'Unknown Respondent' in the Commission's previous findings that Unknown Respondent violated
According to plaintiffs, this series of events constituted a dismissal of their complaint under subsection (a)(8)(A). See, e.g. , Compl. ¶¶ 3, 32, 39, 46. But treating the agency's treatment of John Doe 1 and 2 as a "dismissal" would be inconsistent with the text of the statute. Subsection (a)(8)(A) specifies that a claimant may invoke the Court's jurisdiction in just two circumstances: when the Commission "dismiss[es] a complaint" and when it fails to act within 120 days of the filing of a complaint.
Plaintiffs do not appear to dispute that there was no dismissal of their "complaint" in this case; they couch their brief in terms of "claims," and they object to the fact that the avenue of proving potential claims against potential respondents who were still unknown was shut down prematurely. See Pls.' Opp. to Mot. to Dismiss at 1 (stating that "the FEC investigated and resolved Plaintiffs' other allegations" and "dismissed Plaintiffs' claim against Unknown Respondent") (emphasis added); id. at 7 ("FEC Dismisses Claim Against Unknown Respondent(s)") (emphasis added); id. at 9 ("[T]he FEC '[c]lose[d] the file' on Plaintiffs' administrative complaint, dismissing all remaining respondents and claims. ") (emphasis added); id. (describing Commissions Weintraub's disagreement with the decision "to dismiss Plaintiffs' claims against Unknown Respondent(s)") (emphasis added).
But the statute does not provide for judicial review of dismissed "claims" - it speaks in terms of "complaint[s]."
*42Plaintiffs cite Common Cause v. Fed. Election Comm'n ,
But plaintiffs' administrative complaint did not say "true source or sources ;" it only referred to the "true source" of the funds donated by ACU. And the administrative complaint did not include the alternative phrasing plaintiffs used in their opposition, such as "unknown respondent(s)" or "unknown respondent or respondents," to indicate that their administrative complaint intended to reach additional individuals or entities. See Admin. Compl. Indeed, the administrative complaint specifically alleged, "[t]he Unknown Respondent provided to ACU the $1.71 million it in turn transferred to Now or Never PAC." Admin. Compl. ¶ 27 (emphasis added). Plaintiffs cannot expand the scope of their administrative complaint now by reading words into it that were not there.
CREW also tries to avoid the clear statutory limits on this Court's jurisdiction by maintaining that the term it used in its administrative complaint - "true source" - is a term of art under FECA, understood to mean the "person or persons " who participate in the contribution. Pls.' Opp. to Mot. to Dismiss at 2 (emphasis added), citing Affiliated Committees, Transfers, Prohibited Contributions, Annual Contribution Limitations and Earmarked Contributions,
Plaintiffs cite United States v. O'Donnell ,
Congress's intent to preclude this action from judicial review becomes evident when subsection (a)(8)(A) is read in the context of the statute's broader enforcement scheme. Congress vested the Commission with exclusive jurisdiction of civil enforcement of FECA,
• a finding by an "affirmative vote of 4" Commissioners that there is "reason to believe" that a person has or is about to violate the Act in order to initiate an investigation,id. § 30109(a)(2);
• a finding by an "affirmative vote of 4" Commissioners of "probable cause to believe" that a person has or is about to violate the Act,id. § 30109(a)(4)(A)(i);
• that the Commission "attempt, for a period of at least 30 days, to correct or prevent" such a violation through conciliation after a probable cause finding is made,id. ;
• an "affirmative vote of 4" Commissioners to approve a conciliation agreement,id. ; and
• a finding by an "affirmative vote of 4" Commissioners of "probable cause to believe that a knowing and willful violation" has or is about to occur before referring a matter to the United States Attorney General,id. § 30109(a)(5)(C).
The fact that Congress established a comprehensive enforcement procedure in section 30109, listing multiple administrative actions within it, and in the same section identified only two administrative actions that would be subject to judicial review, demonstrates Congress's intent to limit judicial review to the two specified actions. Thus, there would be no basis to read the judicial review provision to cover administrative actions that do not appear in subsection (a)(8)(A) at all.
Finally, plaintiffs' interpretation of (a)(8)(A) is also contrary to the statute's legislative history, which indicates that Congress sought to achieve compliance first through conciliation. The legislative history reveals that Congress decided to require the Commission to attempt to conciliate a violation before it could seek redress through litigation,
Here, the Commission's unanimous vote to "[t]ake no action at this time on the *44remaining recommendations of the Office of General Counsel" - which included a recommendation to pursue further enforcement against the Does - and to enter into the conciliation agreement and "[c]lose the file," reflects its decision to conclude MUR 6920 without further litigation. Sept. 21 Certif.; Oct. 24, 2017 Certif. Reading subsection (a)(8)(A) to treat these actions as "dismissing a complaint" would run counter to the legislative statements that Congress sought to "limit" litigation while still enforcing the Act.
Accordingly, the Court holds that under
II. The Administrative Procedure Act does not provide for judicial review of this action.
Plaintiffs argue that if they cannot obtain judicial review under FECA, they may do so under the APA. Pls.' Opp. to Mot. to Dismiss at 30-31. But judicial review is not available under the APA where the applicable statute precludes judicial review.
CONCLUSION
For the foregoing reasons, the Court will grant defendant's motion to dismiss for lack of subject matter jurisdiction and deny as moot its motion for judgment on the pleadings. A separate order will issue.
The identities of the trustee and trust were known to the FEC by this time, but their identities remain redacted pending an appeal of this Court's ruling in an earlier related case. See Doe 1 v. Fed. Election Comm'n ,
During this same time frame, the FEC and John Doe 1 and 2 were before this Court litigating whether the FEC could reveal the Does' identities in publishing its investigative file for MUR 6920. See Doe 1 v. Fed. Election Comm'n ,
It also provides judicial review when the Commission fails to act on an administrative complaint within 120 days of being filed,
This is not to suggest that the conciliation agreement, which bars any further action by the Commission,
Reference
- Full Case Name
- CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON v. FEDERAL ELECTION COMMISSION
- Status
- Published