Campaign Legal Center v. FEC

106 F.4th 1175
Court of Appeals for the D.C. Circuit·Decided July 9, 2024·No. 22-5336·Published·Cited by 2 cases

Opinion

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 16, 2023 Decided July 9, 2024

No. 22-5336

CAMPAIGN LEGAL CENTER AND CATHERINE HINCKLEY KELLEY, APPELLEES

v.

FEDERAL ELECTION COMMISSION, APPELLANT

HILLARY FOR AMERICA AND CORRECT THE RECORD, APPELLEES

Appeal from the United States District Court for the District of Columbia (No. 1:19-cv-02336)

Greg J. Mueller, Attorney, Federal Election Commission, argued the cause for appellant. With him on the briefs was Kevin A. Deeley, Associate General Counsel.

Michael A. Columbo was on the brief for amicus curiae Lee E. Goodman, Former FEC Chair and Commissioner, in support of appellant. 2 Tara Malloy argued the cause for appellees Campaign Legal Center and Catherine Hinckley Kelley. With her on the brief were Megan P. McAllen and Alexandra Copper.

Before: PILLARD and CHILDS, Circuit Judges, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge PILLARD.

PILLARD, Circuit Judge: Congress enacted the Federal Election Campaign Act to remedy actual and perceived corruption in the electoral process. The Act improves electoral accountability by publicizing candidates’ financial backers and capping amounts they can give. To those ends, it requires individuals and organizations to limit and disclose the amounts they spend for “anything of value” with the purpose of influencing a federal election in cooperation with or at the suggestion of a political candidate or campaign. 52 U.S.C. § 30101(8)(A). The Act and its implementing regulations provide that coordinated expenditures for electoral advocacy communications—via radio, television, or newspaper advertisements, for example—are subject to the Act’s dollar limits and disclosure requirements. Id. § 30116(7)(B)(i); 11 C.F.R. §§ 109.20(b), 109.21. So is the estimated “usual and normal value” of any coordinated gift to the same effect, even if, for example, it was given by a media owner who did not have to shell out money to provide it. 11 C.F.R. §§ 104.13(a), 100.52(d)(1).

The same restrictions apply to paid advertising or placement on the internet—“communications placed or promoted for a fee on another person’s website.” Id. § 100.26. But, unlike advertising in traditional media, promoting a candidate’s election on widely viewed internet platforms like blogs and social media sites is often free of charge. The Federal 3 Election Commission accounted for that in a 2006 rule known as the “internet exception.” The Commission does not require an individual or political committee to estimate and report the marginal costs of blogging or social media posting in coordination with a campaign, but instead exempts unpaid “communications over the Internet” from the contribution limitations and disclosure requirements that otherwise apply to coordinated political advocacy. Id.

Leaning heavily on that internet exemption, political action committee Correct the Record set out to engage in a wide range of coordinated activities to support Hillary Clinton’s 2016 presidential campaign. In an administrative complaint filed with the Federal Election Commission, nonprofit watchdog Campaign Legal Center alleges that Correct the Record spent close to $6 million in coordination with the Clinton campaign during the lead-up to the 2016 election, including to conduct polls, hire teams of round-the-clock fact- checkers, and connect Clinton media surrogates with radio and television news outlets. Correct the Record publicized that it was coordinating all these activities with the Clinton campaign. But it characterized all of the committee’s myriad expenditures—from staff salaries and travel expenses to the cost of commissioning polls and renting offices—as “inputs” to unpaid communications over the internet. For that reason, neither Correct the Record nor the Clinton campaign designated any of Correct the Record’s expenditures as contributions to the campaign.

This appeal concerns whether the Federal Election Commission dismissed Campaign Legal Center’s administrative complaint based on an indefensibly broad interpretation of the internet exemption. It also asks whether the Commission arbitrarily ignored plausible allegations, including Correct the Record’s own public pronouncements, 4 that Correct the Record planned to coordinate all its expenditures with the Clinton campaign.

We hold that the Commission acted contrary to law in dismissing the complaint. Because we conclude that the internet exemption cannot be read to exempt from disclosure those expenditures that are only tangentially related to an eventual internet message or post, the Commission’s reading of the internet exemption stretches it beyond lawful limits. As to those expenditures that it deemed not to be covered by the internet exemption, the Commission acted contrary to law in dismissing the complaint for want of reason to believe the relevant expenditures were coordinated with the campaign, despite plausible allegations that Correct the Record coordinated all its expenditures with Hillary for America—and openly acknowledged doing so.

BACKGROUND

We described the statutory, regulatory, and procedural background of this case in Campaign Legal Center v. Federal Election Commission, 31 F.4th 781, 784-88 (D.C. Cir. 2022) (CLC I). What follows is a summary of the context most relevant at this posture, drawing in part on our description in CLC I.

A

In service of “remedy[ing] any actual or perceived corruption of the political process,” the Federal Election Campaign Act (FECA or the Act) imposes contribution limits and disclosure requirements on candidates, individual donors, 5 and political committees. FEC v. Akins, 524 U.S. 11, 14 (1998); see CLC I, 31 F.4th at 784.

FECA’s contribution limits set a dollar-value cap—$2,700 during the 2016 election cycle—on the contributions a political committee or individual can make to any one candidate or his authorized campaign committee. 52 U.S.C. § 30116(a)(1)(A); CLC I, 31 F.4th at 784. Contributions include gifts and money given directly to a campaign, 52 U.S.C. § 30101(8)(A)(i), but also coordinated expenditures—money spent by committees and individuals “in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents,” id. § 30116(a)(7)(B)(i); see FEC v. Colo. Repub. Fed. Campaign Comm., 533 U.S. 431, 438 (2001). Any coordinated “purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value made by any person for the purpose of influencing any election for Federal office” is accordingly regulated as if it were a cash contribution. 52 U.S.C. § 30101(9)(A)(i).

That “functional, not formal, definition of ‘contribution,’” Colo. Repub. Fed. Campaign Comm., 533 U.S.

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Campaign Legal Center v. FEC, 106 F.4th 1175 (D.C. Cir. 2024).

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