Jon Marcus v. Eric H. Holder Jr. ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JON MARCUS, 
Plaintiff-Appellant,
v. No. 08-15643
ERIC H. HOLDER JR., Attorney
General; MICHAEL E. TONER,  D.C. No.
07-CV-00398-EHC
Federal Election Commission
OPINION
Chairman; FEDERAL ELECTION
COMMISSION
Defendants-Appellees.

Appeal from the United States District Court
for the District of Arizona
Earl H. Carroll, District Judge, Presiding
Submitted July 16, 2009*
San Francisco, California
Filed July 30, 2009
Before: Barry G. Silverman, Richard R. Clifton and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Silverman
*The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
9971
MARCUS v. HOLDER 9973
COUNSEL
Michael R. Dezsi, Fieger, Fieger, Kenney, Johnson & Giroux,
P.C., Southfield, Michigan, for the appellant.
Thomasenia P. Duncan, General Counsel; David Kolker,
Associate General Counsel; Harry J. Summers, Assistant
General Counsel; Greg J. Mueller, Attorney, Washington,
D.C., for appellee Federal Election Commission.
Gregory G. Katsas, Assistant Attorney General; Diane J.
Humetewa, United States Attorney; Michael S. Raab, Attor-
ney, Appellate Staff, Civil Division; Eric Fleisig-Greene,
Attorney, Appellate Staff, Civil Division, Washington, D.C.,
for appellee Attorney General.
9974 MARCUS v. HOLDER
OPINION
SILVERMAN, Circuit Judge:
Jon Marcus claims he is the target of a politically motivated
investigation by the United States Attorney General into
alleged federal campaign finance violations. He brought suit
against the Attorney General and the Federal Election Com-
mission Chairman seeking a declaration that the Attorney
General’s investigation is unlawful. His claim boils down to
this: the Federal Election Campaign Act of 1971, 86 Stat. 11,
as amended, 2 U.S.C. §§ 431-455, prohibits the Attorney
General from investigating or prosecuting suspected criminal
violations of the Act unless the FEC has referred the matter
to the Attorney General first. The district court dismissed his
case with prejudice, and we affirm. We hold again today, as
we did in United States v. International Union of Operating
Engineers, Local 701, 638 F.2d 1161 (9th Cir. 1979), that the
Attorney General need not obtain the permission of the FEC
before investigating or prosecuting possible violations of fed-
eral election laws.
I. Factual and Procedural Background
The Complaint alleges that Marcus was subpoenaed to tes-
tify before a federal grand jury as part of an investigation into
alleged criminal violations of the FECA. Marcus claims that,
during such testimony, the defendants attempted to coerce
him to reveal constitutionally protected activities such as the
identity of candidates for whom he voted in the 2004 presi-
dential election. Marcus believes that the Attorney General’s
investigation is unlawful because it did not originate through
a referral by the FEC. He seeks a declaration that “Defen-
dants’ conduct is unlawful, unconstitutional, and contrary to
the requirements of the [FECA]” as well as “any other relief
authorized under the laws including costs and attorney fees
for bringing this action.”
MARCUS v. HOLDER 9975
At the district court, Marcus filed a motion for declaratory
relief and Defendants filed a motion to dismiss. The court
denied the motion for declaratory relief and dismissed the
complaint with prejudice. The court relied primarily on our
decision in Operating Engineers, in which we held that Con-
gress did not impose a limitation on the ability of the Attorney
General to prosecute violations of the FECA in allowing the
FEC to refer violations to the Attorney General. Id. at 1168.
The district court also rejected Marcus’s argument that the
1979 amendments to the FECA undercut our decision in
Operating Engineers.
II. Standard of Review
“Dismissals for failure to state a claim are reviewed de
novo.” Sybersound Records, Inc. v. UAV Corp., 517 F.3d
1137, 1142 (9th Cir. 2008). “Allegations of material fact are
construed in the light most favorable to the nonmoving party.”
Id.III. Analysis
[1] The FECA imposes a variety of requirements on federal
election campaign activity, expenditures, and contributions.
See 2 U.S.C. §§ 431-55. For example, it restricts the uses of
contributions, id. § 439a, places limitations on the amount of
contributions and expenditures, id. § 441a, and requires iden-
tifying statements on certain types of campaign advertising,
id. § 441d. Violations of the FECA may give rise to civil
and/or criminal penalties. See id. § 437g. Criminal violations
of the FECA must be committed “knowingly and willfully.”
See id. § 437g(d)(1).
[2] The FECA also established the FEC with six voting
members, no more than three of whom may be affiliated with
the same political party. Id. § 437c(a)(1). The power of the
FEC to initiate civil actions “shall be the exclusive civil rem-
edy for the enforcement” of the FECA, except for certain pri-
9976 MARCUS v. HOLDER
vate enforcement actions. Id. § 437d(e). The FEC may initiate
an administrative enforcement proceeding based upon a com-
plaint made by “any person who believes a violation . . . has
occurred” or upon “the basis of information ascertained in the
normal course of carrying out its supervisory responsibilities.”
Id. § 437g(a)(1), (2). The FEC initially attempts to correct or
prevent violations “by informal methods of conference, con-
ciliation, and persuasion” through which it may enter into a
“conciliation agreement with any person involved.” Id.
§ 437g(a)(4)(A)(i). A conciliation agreement is a “complete
bar” to further FEC action. Id. If the FEC believes that a vio-
lation has been committed, it may include a requirement in a
conciliation agreement that the person pay a civil penalty. Id.
§ 437g(a)(5)(A). If the FEC is “unable to correct or prevent”
the violation, it may “institute a civil action for relief.” Id.
§ 437g(a)(6)(A).
[3] If the FEC “by an affirmative vote of 4 of its members,
determines that there is probable cause to believe that a know-
ing and willful violation [of the FECA or analogous Internal
Revenue Service rules] has occurred or is about to occur, it
may refer such apparent violation to the Attorney General of
the United States without regard to any limitations set forth in
[the paragraph regarding the conciliation procedure].” Id.
§ 437g(a)(5)(C). When the FEC “refers an apparent violation
to the Attorney General, the Attorney General shall” issue
periodic reports to the FEC about “any action taken.” Id.
§ 437g(c).
[4] Marcus’s position is that the Attorney General may not
investigate or prosecute FECA violations without first receiv-
ing a referral from the FEC pursuant to § 437g(a)(5)(C). We
have already rejected precisely this argument in Operating
Engineers, where we stated that nothing in the FECA “sug-
gests, much less clearly and ambiguously [sic] states, that
action by the Department of Justice to prosecute a violation
of the Act is conditioned upon prior consideration of the
alleged violation by the FEC” and that “it would strain the
MARCUS v. HOLDER 9977
language to imply such a condition.” 638 F.2d at 1163.
Reviewing the FECA’s legislative history, we held that “there
is substantial direct evidence that Congress did not intend to
make criminal enforcement by the Department of Justice con-
tingent upon prior FEC consideration.” Id. at 1165. More
recently, two other circuits have rejected claims identical to
Marcus’s in cases brought by the same attorney as here, aris-
ing out of the same investigation as here. See Fieger v. U.S.
Attorney Gen., 542 F.3d 1111 (6th Cir. 2008); Bialek v.
Mukasey, 529 F.3d 1267 (10th Cir. 2008).
[5] Marcus argues that the 1979 amendments to the FECA
undermine our holding in Operating Engineers. In particular,
he contends that the addition of the phrase “by an affirmative
vote of 4 of its members” to the referral provision in
§ 437g(a)(5)(C) reflects congressional intent to require a
referral by the FEC before action by the Attorney General.
Prior to the amendment, the FECA required a majority vote
of the six FEC commissioners for a referral. See Federal Elec-
tion Campaign Act Amendments of 1976, Pub. L. No. 94-283,
§ 109, 90 Stat. 475, 484 (1976) (FEC could issue a referral if
it “determine[d] that there [was] probable cause to believe
that a knowing and willful violation” had occurred or was
about to occur); 2 U.S.C. § 437c(c) (requirement that “[a]ll
decisions of the Commission . . . be made by a majority vote
of the members of the Commission.”). Therefore, the amend-
ment’s change was only to require at least four votes for a
referral instead of a majority. In most cases, a majority would
be four votes, but a majority theoretically could be less than
four if a seat were vacant or a Commissioner were recused.
This extremely minor change is simply irrelevant to the issue
at hand. It does not imply, let alone “clear[ly] and unambigu-
ous[ly] express[ ]” a limitation on prosecutorial responsibility.
See United States v. Morgan, 222 U.S. 274, 282 (1911).
Next, Marcus claims that the 1979 amendments added a
new provision allowing a criminal defendant to introduce a
conciliation agreement as evidence of his or her “lack of
9978 MARCUS v. HOLDER
knowledge or intent to commit the alleged violation[,]” 2
U.S.C. § 437g(d)(2), and that this shows Congress’ desire to
establish a procedure by which the FEC first attempts to
resolve violations before referring them to the Attorney Gen-
eral. But the provision is identical in all relevant respects to
a provision in the FECA prior to the 1979 amendments, then
located at 2 U.S.C. § 441j(b). See Federal Election Campaign
Act Amendments of 1976 § 112, 90 Stat. at 495. Also, noth-
ing in the FECA suggests that a defendant must be given the
opportunity to enter into a conciliation agreement. In fact, the
referral provision states that the FEC may refer a matter to the
Attorney General “without regard to any limitations set forth
in” the paragraph regarding conciliation agreements. 2 U.S.C.
§ 437g(a)(5)(C).
Marcus also contends, again incorrectly, that a requirement
that the Attorney General issue periodic reports after referral
is a “new provision” that supports his position. See 2 U.S.C.
§ 437g (c). That provision has existed since before 1976, and
does nothing to question our holding in Operating Engineers.1
[6] Marcus’s additional arguments, which do not rely on
the 1979 amendments, are foreclosed by Operating Engi-
neers. Of these additional arguments, we address only Mar-
cus’s repeated insistence that our interpretation is illogical
because, “if the FEC votes 5 to 1 against referral, the lone dis-
gruntled FEC member can simply walk across the street to the
Attorney General to prosecute the matter.” This argument
simply fails to appreciate that an FEC referral or vote against
referral is nothing more than that. As we held 30 years ago,
an FEC referral is not a prerequisite to criminal enforcement
of the federal election laws by the Attorney General. The
absence of a referral is not tantamount to a grant of immunity.
1
Marcus also claims that the 1979 amendments were a “direct repudia-
tion” of Operating Engineers, a claim which is belied by the sequence of
relevant events. The bill containing the four-vote change was reported by
committee on September 7, 1979, which was weeks before our decision
in Operating Engineers. See Fieger, 542 F.3d at 1120.
MARCUS v. HOLDER 9979
IV. Conclusion
[7] We have said it before and we say it again: the FECA
does not require the Attorney General to receive permission
from the FEC before investigating or prosecuting an FECA
criminal violation.
AFFIRMED.