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Stop Reckless Economic Instability Caused by Democrats, et al. v. FEC

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Stop Reckless Economic Instability Caused by Democrats, et al. v. FEC
Case Summary

On April 14, 2014, a group of political committees and a federal candidate filed suit against the Commission in the U.S. District Court for the Eastern District of Virginia challenging certain Federal Election Campaign Act (the Act) contribution limits for “multicandidate” and “non-multicandidate” political committees. Stop Reckless Economic Instability caused by Democrats (“Stop PAC”), Niger Innis, Niger Innis for Congress, Tea Party Leadership Fund (the “Tea Party Fund”) and the Alexandria Republican City Committee (“City Committee”) (collectively, Plaintiffs) claim that the limits infringe upon their First Amendment rights of association and expression and the Fifth Amendment’s guarantee of equal protection. On February 27, 2015, the U.S. District Court for the Eastern District of Virginia granted the Commission’s motion for summary judgment.

Background and Constitutional Challenge
The Act and Commission regulations define a multicandidate committee as a political committee (PAC) that has received contributions from more than 50 persons, has contributed to five or more federal candidates, and has been registered with the FEC for at least six months (“six-month registration period”). 52 U.S.C. § 30116(a)(4) and 11 CFR 100.5(e)(3). A multicandidate committee may contribute up to $5,000 per election to a federal candidate, up to $5,000 per calendar year to a state political party committee, and up to $15,000 per calendar year to a national party committee. During the 2015-16 election cycle, committees that have not met the three qualifications above (“non-multicandidate committees”) may contribute up to $2,700 per election to federal candidates, up to $10,000 per calendar year to state political party committees, and up to $33,400 per calendar year to any national party committee. The limits on non-multicandidate committee contributions to candidates and national party committees are indexed for inflation each election cycle.

At the time this suit was filed, Stop PAC was a non-multicandidate committee because it was less than six-months old. Stop PAC challenged the six-month registration period as infringing on its First Amendment rights. Stop PAC also claimed that the $2,700 contribution limit violated its Fifth Amendment guarantee of equal protection by imposing a lower limit on its contributions to federal candidates than would apply if it had qualified as a multicandidate committee.[FN1] The Fund, a multicandidate committee, alleged that the $5,000 and $15,000 annual limits on its respective contributions to state and national party committees violated the Fifth Amendment by imposing lower limits than would apply if the Fund had not qualified as a multicandidate committee.

In its response, the Commission argued that the plaintiffs did not have standing to sue because they had not suffered any cognizable injury under law. The Commission also argued that the plaintiffs’ challenge was partially moot because both Stop PAC and American Future PAC (another plaintiff) have now qualified as multicandidate committees under the Act. The Commission further argued that the plaintiffs’ claims lacked merit because the six-month registration period and the challenged contribution limits help prevent the risk and appearance of corruption.

District Court Decision
The court assumed, without deciding, that Stop PAC and American Future PAC had legal standing to proceed with their challenge and that their claims were not moot. The court noted that there were “substantial issues” concerning whether those plaintiffs in fact had standing. The Court also observed that both Stop PAC and American Future PAC were no longer subject to the laws they challenged since both had become multicandidate committees. Nevertheless, the court questioned whether an exception to mootness may apply for certain cases that are capable of repetition yet evading judicial review because of the time required for litigation. Despite not deciding these issues, the court proceeded to evaluate the merits of the plaintiffs’ claims.

First Amendment Challenge. The plaintiffs argued that the six-month registration period and the lower limits on contributions to candidates that apply to non-multicandidate committees violate the First Amendment. Both Stop PAC and American Future PAC stated that they wished to contribute up to $5,000 per election to several federal candidates in 2014, yet were prohibited from doing so under the contribution limit that applied to them as non-multicandidate committees ($2,600 per election in 2014).

The court disagreed and held that the PACs could “not show that they have suffered a cognizable constitutional injury.” The court found that this result was dictated by Buckley v. Valeo, 424 U.S. 1 (1976) and California Medical Association v. FEC, 453 U.S. 180 (1981). As the court observed, in those cases, the Supreme Court had considered challenges to contribution limitations and ultimately upheld the government’s ability to impose them as a means of deterring corruption, finding that the limits impose “marginal restriction[s]” and involve “little direct restraint” on political expression. See Buckley, 424 U.S. at 20-21.

The district court noted that Stop PAC and American Future PAC were still fully able to associate with candidates of their choice and, citing the Supreme Court’s holding in Buckley, held that the monetary contribution limits imposed on them as non-multicandidate committees did not violate their First Amendment rights. The court further said that the PACs were not restricted in their ability to participate in the political process beyond making limited contributions to candidates: “[The Act] does not restrain new PACs or their individual contributors from otherwise assisting the campaigns and political activities of their selected candidates.”

Equal Protection Challenge. The court also held that the Act’s varying contribution limits do not violate the plaintiffs’ Fifth Amendment equal protection guarantee because multicandidate and non-multicandidate PACs are not “similarly situated” as they relate to core political purposes. The court stated that a new PAC could potentially enable circumvention of the contribution limits that apply to individuals giving to candidates if such a non-multicandidate committee were subject to the same $5,000 contribution limit as a more established multicandidate committee. The court noted that “[t]he risk of circumvention is particularly great during the initial months of a PAC’s creation, which often coincides with the period immediately before an election when the incentives to infuse funds to a candidate are at their highest.”

The court further stated that even if multicandidate and non-multicandidate committees were similarly situated, the government has a sufficient interest in preventing corruption of the political process and the circumvention of contribution limits to justify different contribution limits that apply to new PACs and those that apply to multicandidate committees.

1/ The original challenge had included a federal candidate plaintiff whom the court dismissed at the plaintiffs’ request. Stop PAC became a multicandidate committee on September 11, 2014. In a later motion, another non-multicandidate committee, American Future PAC, was added as a plaintiff to assert Stop PAC’s claims. American Future PAC became a multicandidate committee on February 11, 2015.


Source: FEC Record -- May 2014; April 2015



Court Decisions and Related Documents

Appeals Court (4th Circuit) (15-1455)

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District Court (E.D. VA)

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