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On March 2, 2010, the U.S. Court of Appeals for the District of Columbia Circuit reversed the District court’s decision in Unity08 v. FEC (Case No. 08-5526) and ruled in favor of the Plaintiff, Unity08. The appeals court found that Unity08 is not subject to regulation as a political committee unless and until it selects a "clearly identified" candidate.
Unity08, a nonprofit corporation organized under the laws of the District of Columbia, described
itself as a "political movement" formed for the purpose of nominating and electing a "Unity Ticket"
in the 2008 Presidential election. Unity08 intended to solicit funds via the Internet in order to qualify for a position on the ballot in approximately 37 states and planned to hold an "Internet online nominating convention" to select its candidates for President and Vice President. Unity08 submitted an advisory opinion (AO) request asking whether it would be considered a "political
committee" before the conclusion of its online convention in the summer of 2008.
In AO 2006-20, the Commission concluded that Unity08 would be a political committee once it spent more than $1,000 for ballot access, since spending money for ballot access is considered an expenditure under the Federal Election Campaign Act (the Act), Commission regulations and prior advisory opinions. See 11 CFR 100.111(a). Additionally, the Commission determined that Unity08’s "major purpose" was the nomination or election of federal candidates, and therefore the FEC was not prevented by the First Amendment from finding that Unity08’s activities qualified it as a political committee.
On January 10, 2007, Unity08 and individual members of its Board of Directors (the plaintiffs) filed a complaint in the U.S. District Court for the District of Columbia, challenging the FEC’s recent Advisory Opinion that concluded that the group’s proposed activities would require it to register as a political committee. The plaintiffs ask the court to rule that this conclusion was "arbitrary" and in violation of the First Amendment. The plaintiffs also seek to enjoin the FEC from enforcing the Act’s reporting provisions and contribution limitations against Unity08.
The plaintiffs contend that the FEC’s conclusion in AO 2006-20 was:
As well as alleging a violation of the Administrative Procedure Act (APA), the plaintiffs also contend, among other things, that the Commission’s determination was vague and overbroad, thus violating the First Amendment.
The plaintiffs ask the court to preliminarily and permanently enjoin the FEC from enforcing its ruling in AO 2006-20. The plaintiffs also ask the court to:
On October 16, 2008, the district court held that, since Unity08 sought to obtain ballot access merely as a placeholder for its candidates, it was reasonable for the Commission to conclude that any monies Unity08 spent to qualify for the ballot would be considered expenditures under the Act. The court held that Unity08’s ballot access was certain to benefit its candidates, who would
be identified by party affiliation and office sought, and who would have declared their intentions to run for federal office when this benefit was conferred upon them. Large, unregulated disbursements made to obtain such access would therefore present the possibility of actual or apparent corruption that the Act was intended to limit. The court also concluded that the FEC’s determination that Unity08 would qualify as a political committee did not violate the First Amendment because Unity08’s major purpose was to nominate and support candidates for federal office.
The appeals court reversed the district court’s decision and ruled in favor of the Plaintiff.
The appeals court rejected the Commission’s argument that the case was moot once Unity08 ceased activity. The court noted that Unity08 claims it will continue operations if it wins this appeal. The court also rejected the Commission’s argument that the Administrative Procedure Act does not authorize review of advisory opinions because the opinion is not "final agency action." The court, quoting Chicago & Southern Air Lines v. Waterman Steamship Corp, 333 U.S. 103, 113 (1948), noted that administrative orders are final when "they impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process." In this case, the court found that the advisory opinion procedure is complete and deprives the Plaintiff of a legal right—2 U.S.C. §437f(c)’s reliance defense, which the Plaintiff would enjoy if it had obtained a favorable resolution in the advisory process. Additionally, the court rejected the Commission’s argument that the text and structure of the Act indicated Congressional intent to preclude judicial review of Commission advisory opinions. The court stated it was "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." Slip op. at 10.
Additionally, the court agreed with the Plaintiff’s argument that Unity08 is not subject to regulation
as a political committee unless and until it selects a "clearly identified" candidate. The court applied its ruling in FEC v. Machinists Non-Partisan Political League, 655 F.2d 380 (D.C. Cir. 1981), which found that draft groups were outside of the scope of the Act. In Machinists, the court used the "major purpose" test in Buckley v. Valeo, 424 U.S. 1, 79 (1976), to determine that draft
groups "whose activities are not under the control of a 'candidate' or directly related to promoting or defeating a clearly identified 'candidate'" enjoyed protection from regulation under the Act. 655 F.2d at 393. Similar to Machinists, Unity08 did not fulfill the "major purpose" test from Buckley. The court also found the risk of corruption from Unity08’s activities no greater than the risk presented by the draft groups in Machinists.
Finally, the court rejected the Commission’s argument that accepting Unity08’s reading of Machinists would exempt political parties from regulation as political committees each election cycle until they actually nominated their candidates. According to the court, Unity08’s request
for an AO "presented 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." The court found that Unity08 stands
in contrast to political parties that have previously supported "clearly identified" candidates and almost invariably intend to support their nominees.