Unity08 v. FEC

Citation: Not availableDocket: 08-5526

Court: Court of Appeals for the D.C. Circuit; March 1, 2010; Federal Appellate Court

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Unity08, a proposed post-partisan political party, sought an advisory opinion from the Federal Election Commission (FEC) regarding its requirement to register as a political committee prior to selecting candidates. Unity08 intended to conduct an online nominating process for a mixed ticket of one Republican and one Democrat for president and vice president, while primarily focusing on obtaining state ballot access. The organization contended that it should not be classified as a political committee because it would not be influencing the election of a specific candidate until after this nominating process.

The FEC rejected Unity08's argument, stating that expenses related to gathering signatures for federal office ballot qualification are considered expenditures under the Federal Election Campaign Act of 1971 (FECA). The Act defines a political committee as any group receiving or spending over $1,000 in contributions or expenditures in a calendar year, with expenditures including any purchases made to influence federal elections. The FEC determined that Unity08’s primary purpose aligned with the nomination or election of a candidate, referencing the Buckley v. Valeo case to support its interpretation.

In response, Unity08 filed a lawsuit under the Administrative Procedure Act, challenging the FEC's advisory opinion. The district court found the issue reviewable but ruled in favor of the FEC, stating that existing precedent supported the Commission's stance. Unity08 subsequently appealed. While the FEC argued the case was unreviewable due to mootness and the nature of the advisory opinion, the court confirmed its jurisdiction over the appeal but ultimately sided with Unity08 on the merits.

The Commission claims that the case is moot because Unity08 has stated it will not participate in any elections beyond the 2008 presidential race and has no intention of becoming a permanent political party. Generally, a case can be deemed moot if a party renounces its intent to engage in the conduct it is challenging. However, Unity08 continues to pursue its operations and fundraising, which are restricted by the Commission’s advisory opinion, indicating a conditional intent to resume activities for the 2012 presidential election if it wins the lawsuit. The chairman of Unity08 affirmed this intention in a sworn declaration, emphasizing that the group's mission remains relevant for the upcoming election. The Commission argues that the Administrative Procedure Act does not allow judicial review of its advisory opinion since it is not considered “final agency action” and, even if it were, the Federal Election Campaign Act precludes such review. While the Commission acknowledges that issuing an advisory opinion concludes its advisory process, it contends that a negative opinion does not finalize any rights or obligations, thus requiring Unity08 to act against the advice for judicial review to be available. The determination of finality hinges on whether the agency has completed its decision-making process and whether that outcome affects the parties involved.

The completion of the advisory opinion procedure affects the plaintiff's legal rights under 2 U.S.C. 437f(c), specifically the reliance defense, which would have been available if the plaintiff had received a favorable advisory opinion. This deprivation is significant enough to warrant judicial review, as established in Environmental Defense Fund, Inc. v. Ruckelshaus. Agency advisory opinions are considered final actions, serving as authoritative positions on legal interpretations. The notion that parties must violate an agency's position before seeking judicial review is challenged, with precedents indicating that pre-enforcement challenges can be valid, especially when First Amendment rights are at stake and there is a credible threat of prosecution. The case highlights the interconnectedness of finality, ripeness, and exhaustion of administrative remedies, emphasizing that a challenge to an advisory opinion is often ripe for review, as demonstrated in prior cases. The Commission's argument against pre-enforcement review may align more with ripeness than finality, but precedent in the circuit suggests that such arguments are generally not viable. The Commission also argues that the Federal Election Campaign Act (FECA) does not allow direct judicial review of advisory opinions, noting the absence of a private right of action within the detailed procedural framework of the Act, except in two specific situations not relevant here.

Individuals who have reported violations of the Act to the Commission but received no action may bring lawsuits, as stated in 2 U.S.C. 437g(a)(8). Additionally, individuals found by the Commission to have violated the Act are permitted judicial review under 2 U.S.C. 437g(a)(4)(C)(iii). The Commission's argument against the reviewability of such cases is weakened by the general presumption favoring judicial review, particularly when constitutional rights are at stake, as established in Abbott Laboratories v. Gardner. The absence of explicit statutory language preventing judicial review does not support the Commission's claim of implicit preclusion. The Supreme Court in Abbott Laboratories rejected the notion that specific procedures for certain regulations imply exclusion of others from pre-enforcement review. The Commission's assertion that detailed procedures for specific decisions indicate Congress's intent to limit judicial review is deemed unconvincing, especially regarding First Amendment issues.

Unity08 contests the Commission's determination that it qualifies as a political committee, citing the precedent set in FEC v. Machinists Non-Partisan Political League, which restricts regulation to organizations explicitly supporting or opposing a clearly identified candidate. Unity08 argues that its activities, occurring before a candidate is selected, do not involve support for any specific candidate, thus warranting protection from regulation. However, Unity08 indicated plans for post-nomination support that it chose not to seek advice on within the current proceeding. The central issue is whether a group aiming to draft candidates, without previously supporting a clearly identified candidate or a firm intention to do so in the future, can evade classification as a political committee under Machinists.

The Commission attempted to enforce a subpoena against a multi-candidate political committee promoting "draft-Kennedy" groups for Senator Edward Kennedy's presidential candidacy. The court rejected this enforcement, ruling that the Commission lacked subject matter jurisdiction over the activities of these draft groups. The court reasoned that including such groups under the definition of 'political committee' would create significant constitutional issues. The legislative history of the Federal Election Campaign Act (FECA) did not indicate an intention to regulate draft groups, and the Supreme Court's decision in Buckley limited the definition of 'political committees' to those under a candidate's control or primarily aimed at their nomination or election.

While the FECA appeared to include draft candidate groups as political committees, the court maintained that the Supreme Court's interpretation in Buckley required a narrower definition to avoid constitutional problems. Buckley established that the statute should only encompass organizations directly associated with a candidate's control or whose major purpose is candidate nomination or election. The Commission argued that Buckley’s major purpose test should apply to groups like Unity08, which aims to nominate a candidate, even if that candidate is not yet clearly identified. However, the court emphasized that the ruling in Machinists, which focused on groups with a clearly identified candidate, remains binding.

The court found it challenging for the Commission to argue that Unity08's activities constituted support for a clearly identified candidate more than the "draft Kennedy" groups did. While the draft groups aimed to encourage Kennedy's candidacy explicitly, Unity08 seeks to organize voters based on shared views without identifying a candidate until later in the process. The Commission's interpretation suggested a distinction between groups encouraging candidacy and those organized to nominate an individual, but the court noted that the Machinists panel likely recognized the ultimate goal of the draft groups was to help secure a candidate's nomination. The Commission also expressed concern that exempting Unity08 from regulation could lead to corruption, a risk acknowledged by the Supreme Court in Buckley as a justification for regulating political committees under FECA.

The Commission did not adequately justify why the potential for corruption in the current case is greater than in the Machinists case. In fact, the opportunity for corruption seems reduced because, unlike the groups in Machinists that directly assisted Senator Kennedy, Unity08's donation process prevents donors and candidates from knowing which candidate will benefit from contributions until after the convention. This reduces the likelihood of a "quid pro quo" arrangement that could compromise political integrity, as noted in Buckley v. Valeo.

While potential donors may anticipate that their contributions will eventually provide ballot access for nominees, the sense of obligation felt by those nominees is unlikely to be stronger than that experienced by Senator Kennedy in Machinists. The Commission claimed that Machinists left open the question of whether draft groups could be classified as political committees under the 1979 amendments to the Act, but did not provide evidence from the amendments or their legislative history to support this. Moreover, Machinists suggested that draft groups could be considered political committees only concerning disclosure requirements, not contribution limits.

The Commission's argument appears to have been abandoned, as it is not mentioned in its brief. Without a compelling reason to differentiate from Machinists, Unity08 does not qualify as a political committee until it identifies a specific candidate. The Commission's concern that accepting Unity08’s interpretation would exempt all political parties from regulation until they nominate candidates is unfounded, as established political parties typically support identifiable candidates, presenting a greater corruption risk than genuine draft groups. Consequently, the district court's judgment is reversed.