Citizens for Responsibility and Ethics in Washington v. Federal Election Commission , 243 F. Supp. 3d 91 ( 2017 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CITIZENS FOR RESPONSIBILITY AND
ETHICS IN WASHINGTON, et al.,
Plaintiffs, Civil Action No. 16-259 (BAH)
v. Chief Judge Beryl A. Howell
FEDERAL ELECTION COMMISSION,
Defendant,
and
CROSSROADS GRASSROOTS POLICY
STRATEGIES,
Defendant–Intervenor.
MEMORANDUM OPINION
The plaintiffs, Citizens for Responsibility and Ethics in Washington (“CREW”) and
Nicholas Mezlak, a registered voter in Ohio, bring this action against the Federal Election
Commission (“FEC”), challenging the FEC’s dismissal of the plaintiffs’ administrative
complaint, which alleged that Crossroads Grassroots Policy Strategies (“Crossroads GPS”) had
failed properly to disclose the identities of donors whose contributions were used to fund
independent expenditures in various 2012 U.S. Senate races. The plaintiffs claim that the
dismissal was arbitrary, capricious, an abuse of discretion, and contrary to law, in violation of the
Administrative Procedure Act (“APA”), 5 U.S.C. § 706, and the Federal Election Campaign Act
of 1971 (“FECA”), 52 U.S.C. § 30109(a)(8)(C). Pending before the Court is the FEC’s Partial
Motion to Dismiss (“FEC’s MTD”), ECF No. 12, as well as a Notice of Joinder and
Supplementation of Federal Election Commission’s Partial Motion to Dismiss and Memorandum
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in Support Thereof by Crossroads GPS (“Crossroads GPS’s Supplemental MTD”), ECF No. 17,
whose motion to intervene was previously granted, see Minute Order (dated Apr. 26, 2016). For
the reasons set out below, the FEC’s Partial Motion to Dismiss, pursuant to Federal Rule of Civil
Procedure 12(b)(1), is denied, and Crossroads GPS’s Supplemental Motion to Dismiss, pursuant
to Federal Rule of Civil Procedure 12(b)(6), is granted in part and denied in part.
I. BACKGROUND
The plaintiffs challenge the FEC’s dismissal of their administrative complaint against
Crossroads GPS for failing to apply properly the applicable statute or regulation, which
regulation they further contend is invalid because it conflicts with the governing statute. The
FECA’s relevant statutory and regulatory scheme is described before discussing the
administrative proceedings underlying the plaintiffs’ instant complaint.
A. Disclosure Requirements for Independent Expenditures
Under the FECA and applicable FEC regulations, organizations that make independent
expenditures must comply with certain disclosure requirements. 1 Relevant here, the FECA
provides that an organization “mak[ing] independent expenditures in an aggregate amount or
value in excess of $250 during a calendar year shall file a statement” detailing the contributions
it receives. 52 U.S.C. § 30104(c)(1). Such statements must include, inter alia, “the
identification of each person who made a contribution in excess of $200 to the person filing such
statement which was made for the purpose of furthering an independent expenditure.” Id.
§ 30104(c)(2)(C) (emphasis added). The FEC regulation, in effect since 1980, implementing 52
U.S.C. § 30104(c) uses similar but not identical language, requiring that a donor’s identity be
1
An “independent expenditure” is defined in the FECA as “an expenditure by a person . . . expressly
advocating the election or defeat of a clearly identified candidate . . . that is not made in concert or cooperation with
or at the request or suggestion of such candidate, the candidate’s authorized political committee, or their agents, or a
political party committee or its agents.” 52 U.S.C. § 30101(17).
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disclosed if the donation was “made for the purpose of furthering the reported independent
expenditure.” 11 C.F.R. § 109.10(e)(1)(vi) (emphasis added); see FEC, Amendments to Federal
Election Campaign Act of 1971, 45 Fed. Reg. 15080, 15087 (Mar. 7, 1980).
B. Events Giving Rise to the Plaintiffs’ FEC Complaint
CREW is a watchdog organization “committed to protecting the rights of citizens to be
informed about the activities of government officials, ensuring the integrity of government
officials, protecting our political system against corruption, and reducing the influence of money
in politics.” Compl. ¶¶ 8, ECF No. 1. 2 Nicholas Mezlak is a U.S. citizen registered to vote in
Ohio. Id. ¶ 17. Crossroads GPS funds independent expenditures. See id. ¶¶ 35, 40, 44. The
plaintiffs’ FEC complaint alleged that Crossroads GPS failed to make the requisite disclosures
for certain of its independent expenditures arising out of an anonymous matching challenge and a
fundraiser in Tampa, Florida. Id. ¶¶ 35–54.
1. Anonymous Matching Challenge for the Ohio Senate Race
In the spring of 2012, Karl Rove, an “uncompensated advisor to Crossroads GPS,” see
Compl., Ex. I, Affidavit of Karl Rove (“Rove Aff.”) ¶ 1, ECF No. 1-9, received a phone call
from an unnamed donor regarding the Ohio Senate race between incumbent Sherrod Brown and
his challenger, Josh Mandel, Compl. ¶ 43. According to news reports, the donor stated, “I really
like Josh Mandel,” and “I’ll give ya $3 million, matching challenge.” Id. (internal quotation
marks omitted). Before the FEC, Mr. Rove acknowledged that the news reports’ description of
the conversation was “‘substantially accurate,’” id. ¶ 56 (quoting Rove Aff. ¶ 3), that the
anonymous donor ultimately “contributed more than $3 million to Crossroads GPS,” id.
(emphasis omitted), and that the matching challenge generated an additional $1.3 million, id.
2
The following factual allegations are taken from the Complaint and exhibits attached thereto, and are
assumed true for purposes of the pending motions.
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¶ 58. Although “the conversation did not discuss the details of any particular independent
expenditure,” id. ¶ 56, Mr. Rove stated that he understood the contribution to be intended for
“‘aid[ing] the election of Josh Mandel,’” id. ¶ 57 (quoting Rove Aff. ¶ 10).
Crossroads GPS spent over $10 million on television advertising that mentioned at least
one of the candidates in the Ohio Senate race, including $6,363,711 on independent expenditures
opposing Senator Brown’s reelection. Id. ¶¶ 44, 59. Crossroads GPS did not disclose the
identity of the donor who pledged $3 million in contributions for the Ohio Senate race or the
names of other donors who donated to match that contribution. Id. ¶ 45.
2. The Tampa Fundraiser
On August 30, 2012, Crossroads GPS held a fundraiser in Tampa, Florida, “in
conjunction with American Crossroads, an independent expenditure-only political committee
closely associated with Crossroads GPS.” Id. ¶ 40. “Approximately 70 high-earning and
powerful donors, including hedge fund billionaires and investors,” were in attendance. Id. ¶ 41.
During the fundraiser, Mr. Rove briefed the attendees on 15 active Senate races, id. ¶ 42, and
played 14 television ads targeting Democratic Senate candidates in 6 states: Virginia, Ohio,
Montana, Florida, Massachusetts, and Nevada, id. ¶ 47. After the ads were shown, Crossroads
GPS and American Crossroads “solicited the attendees for additional contributions, noting that
additional sums were needed because advertising rates were increasing, making it more costly
for Crossroads GPS to broadcast advertisements like those the attendees had just watched.” Id.
¶ 49. Former Governor of Mississippi, Haley Barbour, “made the final pitch for money.” Id.
¶ 50. Crossroads GPS subsequently “made independent expenditures in five of the six races for
which ads were shown” during the fundraiser, and “many” of those advertisements “mirrored the
ads shown.” Id. ¶¶ 51–52. In addition to its Ohio independent expenditures, Crossroads GPS
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reported spending “upwards of $17 million” on ads in the Virginia, Montana, and Nevada Senate
races after the fundraiser had occurred. Id. ¶ 53. Crossroads GPS did not disclose in its FEC
filings the names of the donors who funded these ads. Id.
C. The FEC’s Dismissal of the Plaintiffs’ Complaint
Under the FECA, “[a]ny person who believes a violation of [the FECA] has occurred,
may file a complaint with the Commission.” 52 U.S.C. § 30109(a)(1). If, after affording the
alleged violator an opportunity to respond, four of the six FEC Commissioners find “reason to
believe” that a violation has occurred, the Commission undertakes an investigation of the alleged
violation. Id. § 30109(a)(2).
On November 14, 2012, CREW filed a complaint with the FEC alleging that Crossroads
GPS had (1) “failed disclose the contributor who pledged to contribute $3 million to Crossroads
GPS to aid in the election of Josh Mandel by funding Crossroads GPS’s independent
expenditures in Ohio,” (2) “failed to disclose the contributors who made matching donations for
the same purpose,” and (3) “failed to disclose the contributors at the August 30 meeting who
contributed to Crossroads GPS, including those who contributed to further its independent
expenditures in the Ohio, Virginia, Montana, and Nevada Senate races.” Compl. ¶ 55. The FEC
respondents, including Crossroads GPS and various individuals affiliated with the organization,
responded explaining that the phone conversation with the anonymous donor occurred “months
before the August 30 meeting[,] which would also be months before many of the ads shown at
the August 30 meeting were . . . paid for and aired.” Id. ¶ 56 (internal quotation marks omitted).
The FEC respondents further maintained that Mr. Rove did not discuss any particular
independent expenditure with the anonymous donor. Id. Regarding the Tampa fundraiser, the
FEC respondents argued that any solicitations were made on behalf of American Crossroads
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rather than Crossroads GPS, id. ¶ 61, and, in any event, the attendees were not asked to
contribute to any particular ad, noting that most of the ads shown during the fundraiser “had
already been paid for and aired,” id. ¶ 60 (internal quotation marks omitted).
The FEC’s Office of the General Counsel (“OGC”) issued an initial report on March 7,
2014, recommending that the FEC Commissioners find no “reason to believe,” 52 U.S.C.
§ 30109(a)(2), that Crossroads GPS had violated the FECA’s disclosure requirements or the
FEC’s implementing regulations and dismiss the plaintiffs’ complaint. See Compl. ¶ 64. The
OGC report largely adopted the arguments set out in the respondents’ filing, finding that the
evidence did not suggest that any of the contested donations were earmarked for particular
independent expenditures. See id. The OGC acknowledged that 52 U.S.C. § 30104(c)(2) of the
FECA “‘may reasonably be construed to require disclosure of the identity of certain contributors
regardless of whether the contributor made a contribution to further a specific independent
expenditure,’” id. ¶ 65 (quoting Decl. of Steven Law, President, Crossroads GPS, Ex. B (“OGC
Report”) at 10, ECF No. 8-6), but nevertheless adhered to “‘the Commission’s controlling
interpretation of the statutory provision,’” as stated in 11 C.F.R. § 109.10(e)(1)(vi), id. ¶ 66
(quoting OGC Report at 12 n.57). The OGC also observed that 52 U.S.C. § 30104(c)(1) might
impose additional reporting obligations for certain contributions made for the purpose of
influencing a federal election generally but that the implementing regulations were silent as to
any such requirement. See Compl. ¶ 67. Accordingly, the OGC recommended that the FEC
decline to exercise its prosecutorial discretion to investigate a claim under § 30104(c)(1) given
“‘equitable concerns about whether a filer has fair notice of the requisite level of disclosure
required by law.’” Id. (quoting OGC Report at 13).
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The FEC Commissioners deadlocked three-to-three as to whether there was “reason to
believe” that Crossroads GPS violated 52 U.S.C. §§ 30104(c)(1) or (2) or 11 C.F.R.
§ 109.10(e)(1)(vi). Id. ¶ 70. Consequently, on December 17, 2015, the FEC voted six-to-zero to
dismiss the plaintiffs’ complaint. Id. ¶ 71. The three Commissioners who voted against opening
an investigation did not issue a Statement of Reasons explaining their vote. Id. ¶ 72.
D. The Plaintiffs’ Instant Claims
The plaintiffs’ instant complaint asserts three claims, all stemming from the FEC’s failure
to find “reason to believe” that Crossroads GPS violated FECA’s statutory provisions, at 52
U.S.C. §§ 30104(c)(1) and (2), and the implementing regulation, at 11 C.F.R. § 109.10(e)(1)(vi).
Specifically, in Count I, the plaintiffs contend that the FEC’s failure to find “reason to believe”
that Crossroads GPS violated 11 C.F.R. § 109.10(e)(1)(vi) was arbitrary and capricious, an abuse
of discretion, and contrary to law, because “the evidence before the Commission provided a
reason to believe that Crossroads GPS accepted contributions made for the purpose of airing its
independent expenditures in Ohio, Virginia, Montana, and Nevada,” and the OGC “unreasonably
credited Crossroads GPS’s response and, in particular, the affidavit of Mr. Rove, in violation of
the FEC’s prior guidance.” Compl. ¶ 113. As relief for this alleged violation of the FECA, 52
U.S.C. § 30109(a)(8)(C), and the APA, 5 U.S.C. § 706, the plaintiffs seek a declaration that
dismissal of their administrative complaint was arbitrary and capricious and contrary to law.
Id. ¶ 116.
In Count II, the plaintiffs assert that the FEC’s failure to find “reason to believe” that
Crossroads GPS violated 52 U.S.C. § 30104(c)(2) was arbitrary and capricious, an abuse of
discretion, and contrary to law, in violation of the FECA and the APA, see id. ¶¶ 117–24,
because “11 C.F.R. § 109.10(e)(1)(vi) conflicts with the FECA,” id. ¶ 123. That is, the plaintiffs
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contend that the regulation is invalid because it is narrower than the statute and imposes less
stringent disclosure requirements. See id. ¶ 119 (“[T]he regulation . . . clearly frustrates
Congress’s intent to require disclosure in situations where contributions were made for the
purpose of furthering independent expenditures, even if the purpose was not to further a specific
independent expenditure exactly as the ad was aired and reported to the FEC.”). As relief, the
plaintiffs seek a declaration that the FEC violated the FECA and the APA by dismissing the
plaintiffs’ complaint and that 11 C.F.R. § 109.10(e)(1)(vi) “is unlawful and invalid.” Id. ¶ 124.
Finally, Count III alleges that the FEC’s failure to find “reason to believe” that
Crossroads GPS violated 52 U.S.C. § 30104(c)(1) was arbitrary and capricious and contrary to
law, in violation of the FECA and the APA. See id. ¶¶ 125–31. The plaintiffs contend that
“[t]he OGC recognized that, apart from any reporting obligations imposed by 52 U.S.C.
§ 30104(c)(2) and 11 C.F.R. § 109.10(e)(1)(vi), 52 U.S.C. § 30104(c)(1) imposes a separate
obligation on those making independent expenditures to disclose contributions made for the
purpose of influencing a federal election generally.” Id. ¶ 127 (internal quotation marks
omitted). According to the plaintiffs, the FEC acted arbitrarily and capriciously by accepting the
OGC’s recommendation to “dismiss[] the allegation on the belief that Crossroads GPS ‘could’
raise a defense that it did not have ‘fair notice’ of the disclosure requirements.” Id. ¶ 129. The
plaintiffs seek as a relief a declaration that the FEC’s dismissal of the plaintiffs’ complaint on
this ground was arbitrary and capricious. Id. ¶ 131.
The FEC now moves to dismiss Count II only, pursuant to Federal Rule of Civil
Procedure 12(b)(1), arguing that this claim “challeng[ing] the lawfulness of 11 C.F.R.
§ 109.10(e)(1)(vi) pursuant to the [APA]” is “barred by the six-year statute of limitations at 28
U.S.C. § 2401(a),” since the regulation has been in place for more than 30 years. See FEC’s
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MTD at 1; FEC’s Mem. Supp. MTD (“FEC’s Mem.”) at 1, ECF No. 12; id. at 4 (“Claims One
and Three of plaintiffs’ complaint seek relief that genuinely relates to the agency’s dismissal of
plaintiffs’ administrative complaint without opening an investigation.”). Crossroads GPS moves
to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), the portions of Counts I, II, and
III that seek relief under the APA, on the grounds that the FECA “provides the exclusive avenue
for review of the FEC’s dismissal of the administrative complaint that Plaintiffs challenge in this
action and precludes judicial review of the same under the APA.” Crossroads GPS’s
Supplemental MTD at 1–2. These pending motions are ripe for review.
II. LEGAL STANDARD
The standards governing motions to dismiss under Federal Rules of Civil Procedure
12(b)(1) and 12(b)(6) are set out below.
A. Rule 12(b)(1)
“‘Federal courts are courts of limited jurisdiction,’ possessing ‘only that power
authorized by Constitution and statute.’” Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (quoting
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). Indeed, federal courts
are “forbidden . . . from acting beyond our authority,” NetworkIP, LLC v. FCC, 548 F.3d 116,
120 (D.C. Cir. 2008), and, therefore, have “an affirmative obligation ‘to consider whether the
constitutional and statutory authority exist for us to hear each dispute.’” James Madison Ltd. by
Hecht v. Ludwig, 82 F.3d 1085, 1092 (D.C. Cir. 1996) (quoting Herbert v. Nat’l Acad. of
Scis., 974 F.2d 192, 196 (D.C. Cir. 1992)).
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), the
plaintiff bears the burden of establishing the court’s jurisdiction over the subject matter by a
preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).
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When considering a motion under Rule 12(b)(1), the court must accept as true all uncontroverted
material factual allegations contained in the complaint and “construe the complaint liberally,
granting plaintiff the benefit of all inferences that can be derived from the facts alleged and upon
such facts determine jurisdictional questions.” Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139
(D.C. Cir. 2011) (internal quotation marks and citations omitted). The court need not accept
inferences drawn by the plaintiff, however, if those inferences are unsupported by facts alleged
in the complaint or amount merely to legal conclusions. See Browning v. Clinton, 292 F.3d 235,
242 (D.C. Cir. 2002). In evaluating subject-matter jurisdiction, the court may look beyond the
complaint to “undisputed facts evidenced in the record, or the complaint supplemented by
undisputed facts plus the court’s resolution of disputed facts.” Herbert, 974 F.2d at 197.
B. Rule 12(b)(6)
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the
“complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that
is plausible on its face.” Wood v. Moss, ––– U.S. ––––, 134 S. Ct. 2056, 2067 (2014) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009))). A claim is facially plausible when the plaintiff
pleads factual content that is more than “‘merely consistent with’ a defendant’s liability,” and
“allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007));
see also Rudder v. Williams, 666 F.3d 790, 794 (D.C. Cir. 2012). Although “detailed factual
allegations” are not required to withstand a Rule 12(b)(6) motion, a complaint must offer “more
than labels and conclusions” or “formulaic recitation of the elements of a cause of action” to
provide “grounds” for “entitle[ment] to relief,” Twombly, 550 U.S. at 555 (alteration in original),
and “nudge[ ] [the] claims across the line from conceivable to plausible,” id. at 570; see
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Banneker Ventures LLC v. Graham, 798 F.3d 1119, 1129 (D.C. Cir. 2015) (“Plausibility requires
more than a sheer possibility that a defendant has acted unlawfully . . . .” (internal quotation
marks omitted) (quoting Iqbal, 556 U.S. at 678)). Thus, “a complaint [does not] suffice if it
tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 678
(quoting Twombly, 550 U.S. at 557) (second alteration in original).
In considering a motion to dismiss for failure to plead a claim on which relief can be
granted, the court must consider the complaint in its entirety, accepting all factual allegations in
the complaint as true, “even if doubtful in fact,” Twombly, 550 U.S. at 555; see also Harris v.
D.C. Water & Sewer Auth., 791 F.3d 65, 68 (D.C. Cir. 2015), “but is not required to accept the
plaintiff’s legal conclusions as correct,” Sissel v. U.S. Dep’t Health & Human Servs., 760 F.3d 1,
4 (D.C. Cir. 2014); see also Harris, 791 F.3d at 68 (“[T]he tenet that a court must accept as true
all of the allegations contained in a complaint is inapplicable to legal conclusions.” (quoting
Iqbal, 556 U.S. at 678)), and “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice,” Harris, 791 F.3d at 68 (alteration in
original) (quoting Iqbal, 556 U.S. at 678 ); Banneker Ventures, 798 F.3d at 1129 (same). In
addition, courts may “ordinarily examine” other sources “when ruling on Rule 12(b)(6) motions
to dismiss, in particular, documents incorporated the complaint by reference, and matters of
which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S.
308, 322 (2007).
III. DISCUSSION
The plaintiffs assert three Counts under both the APA and the FECA, each of which
alleges that the FEC’s finding that there was no “reason to believe” a violation had occurred was
arbitrary and capricious and contrary to law because, in Count I, the FEC ignored undisputed
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evidence that Crossroads GPS had violated 11 C.F.R. § 109.10(e)(1)(vi) by failing to disclose the
identities of individuals whose donations to Crossroads GPS were used to fund independent
expenditures; in Count II, the FEC predicated dismissal of the plaintiffs’ administrative
complaint on 11 C.F.R. § 109.10(e)(1)(vi), which conflicts with the FECA’s disclosure
provision, 52 U.S.C. § 30104(c)(2); and, finally, in Count III, despite acknowledging that 52
U.S.C. § 30104(c)(1) may impose a separate disclosure obligation for independent expenditures
intended to “influenc[e] a federal election generally,” Compl. ¶ 67, the FEC nonetheless failed to
apply any such standard in evaluating the plaintiffs’ administrative complaint against Crossroads
GPS.
The FEC has moved to dismiss, under Rule 12(b)(1), Count II challenging the lawfulness
of 11 C.F.R. § 109.10(e)(1)(vi), on the ground that the plaintiffs’ challenge to § 109.10(e)(1)(vi),
which was promulgated in 1980, is untimely, pursuant to the six-year statute of limitations for
commencing a civil action against the United States, 28 U.S.C. § 2401(a). Crossroads GPS joins
in the FEC’s motion and also moves, under Rule 12(b)(6), to dismiss all portions of Counts I, II,
and III seeking relief under the APA, since, according to Crossroads GPS, the FECA provides
the exclusive avenue for review of the FEC’s dismissal of an administrative complaint.
A. The FEC’s Motion to Dismiss Under Rule 12(b)(1)
With respect to the FEC’s motion to dismiss, the parties agree that 28 U.S.C. § 2401(a)
prescribes the applicable statute of limitations for challenging 11 C.F.R. 109.10(e)(1)(vi). 3 See
FEC’s Mem. at 1; Pls.’ Mem. Opp’n Defs.’ Mots. Dismiss (“Pls.’ Opp’n”) at 6, ECF No. 18.
Nevertheless, relying on NLRB Union v. Fed. Labor Relations Auth., 834 F.2d 191, 195 (D.C.
3
Section 2401(a) provides, in relevant part, that “[e]xcept as provided by chapter 71 of title 41
[relating to claims arising out of government contracts], every civil action commenced against the
United States shall be barred unless the complaint is filed within six years after the right of action first
accrues . . . .”
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Cir. 1987), and its progeny, the plaintiffs argue that a party adversely affected by a regulation
that allegedly conflicts with the authorizing statute may challenge that regulation after the statute
of limitations has expired. See Pls.’ Opp’n at 6–7. In NLRB Union, the Union sued the Federal
Labor Relations Authority (“FLRA”) arguing that two FLRA regulations “were inconsistent
with” the Federal Service Labor-Management Relation Statute. 834 F.2d at 192. The agency
argued, unsuccessfully, that the court lacked jurisdiction to entertain the Union’s suit because the
applicable statute of limitations had run. Id. at 195. In rejecting the agency’s argument, the
Court noted a “long line of cases” permitting “attacks on the substantive validity of regulations”
initiated after expiration of the statute of limitations, and reinforced the notion that “a party who
possesses standing may challenge regulations directly on the ground that the issuing agency
acted in excess of its statutory authority in promulgating them.” Id. The contours of this
pronouncement have been refined in subsequent D.C. Circuit cases.
The plaintiffs here rely on two such cases to argue that this action is not time-barred by
limitations period provided in § 2401(a). First, the plaintiffs point to AT&T Co. v. FCC, 978
F.2d 727 (D.C. Cir. 1992), a case arising out of the FCC’s dismissal of AT&T’s administrative
complaint alleging that MCI, one of AT&T’s competitors, “had violated and was continuing to
violate” § 203 of the Communications Act by charging some customers rates that had not been
filed with the FCC. Id. at 232. The FCC dismissed AT&T’s complaint based on the
Commission’s Fourth Report and Order (“Fourth Report”), id., and AT&T then sued the FCC
challenging the dismissal of its administrative complaint, arguing in principal part that the
Fourth Report was contrary to § 203. Id. at 729–30. Although the case did not implicate any
statute-of-limitations issues, the D.C. Circuit had occasion to note that “[i]t is well established
that a rule may be reviewed when it is applied in an adjudication.” Id. at 734 (citing NLRB
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Union, 834 F.2d at 195). The D.C. Circuit held that because the Fourth Report had been
“applied” in dismissing AT&T’s administrative complaint, the validity of the Fourth Report was
properly before the Court. Id.
The plaintiffs also rely on Weaver v. Fed. Motor Carrier Safety Admin., 744 F.3d 142
(D.C. Cir. 2014), which presented the question whether the plaintiff could challenge a rule
published by the Federal Motor Carrier Safety Administration (“FMCSA”) after the applicable
60–day statute of limitations had expired. Id. at 145. The plaintiff claimed injury from the
challenged rule because a traffic citation issued to him but subsequently dismissed by a state
court was entered and remained in an FMCSA database used by prospective employers to screen
applicants. Id. at 142–43. The plaintiff sued the FMCSA arguing that the agency’s rule
governing database corrections “violated the statute authorizing the Secretary of Transportation
to maintain the database,” id., since the statute required the Secretary to, inter alia, “‘ensure
. . . [that] all the data is complete, timely, and accurate,’” id. (quoting 49 U.S.C.
§ 31106(a)(3)(F)), and “‘provide for review and correction of information in the database,’” id.
(quoting 49 U.S.C. § 31106(e)(1)). The FMCSA argued that the court lacked jurisdiction over
the suit because “someone who is injured by a rule that he has failed to attack within the time
limit may still challenge that rule, but only as a defense in an ‘enforcement action.’” Id. at 145.
The D.C. Circuit rejected the FMCSA’s argument, holding that “when an agency seeks to apply
[a] rule, those affected may challenge that applicable on the grounds that it ‘conflicts with the
statute from which its authority derives . . . .’” Id. (emphasis added) (quoting Nat’l Air Transp.
Ass’n v. McArtor, 866 F.2d 483, 487 (D.C. Cir. 1989)) (citing Functional Music, Inc. v. FCC,
274 F.2d 543, 547–48 (D.C. Cir. 1958); Graceba Total Commc’ns, Inc. v. FCC, 115 F.3d 1038,
1040–41 (D.C. Cir. 1997); AT&T, 978 F.2d at 734; Murphy Exploration & Production Co. v.
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U.S. Dep’t of Interior, 270 F.3d 957, 957–59 (D.C. Cir. 2001)). The Court explained that
jurisdiction was properly exercised over the plaintiff’s claim to the extent that the FMCSA had
“applied” the challenged rule within 60 days of the plaintiff’s filing suit. Id. at 146. 4
Taken together, AT&T and Weaver indicate that when an agency applies a regulation to
dismiss an administrative complaint, the party whose complaint was dismissed may challenge
the regulation after the statute of limitations has expired on the ground that the regulation
conflicts with the statute from which it derives. See Am. Scholastic TV Programming Found. v.
FCC, 46 F.3d 1173, 1178 n.2 (D.C. Cir. 1995) (explaining that AT&T suggested that a party may
challenge a regulation as being in excess of its statutory authority in “nonenforcement
proceedings where the party is nevertheless harmed by application of the regulation”).
The FEC seeks to distinguish AT&T and Weaver on several grounds, arguing that the
plaintiffs here were not “injured” to the same extent as the AT&T and Weaver plaintiffs and that
the plaintiffs’ injury in the instant case is so attenuated that they lack standing. FEC’s Reply
Supp. Partial MTD (“FEC’s Reply”) at 4–8, ECF No. 20. The FEC first notes that, in contrast to
the plaintiffs in AT&T and Weaver, the plaintiffs here were technically “not a party to [the]
proceeding” against Crossroads GPS because pursuant to the FECA, “[t]he filing of an
administrative complaint is generally the end of the participation in the enforcement matter by
the administrative complainant.” Id. at 4. As such, “[t]he administrative complainant is not even
aware of what is happening in the proceedings until they have reached a conclusion, because the
enforcement proceeding is confidential.” Id. (citing 52 U.S.C. § 30109(a)(12)). Furthermore,
the FEC here had no authority to award damages to the plaintiffs had they prevailed in their
administrative action. Id. at 4, 6. Thus, the FEC’s argument is, in essence, that the plaintiffs in
4
Ultimately, the D.C. Circuit concluded that it lacked jurisdiction over the plaintiff’s case on other grounds.
See id. at 146.
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AT&T and Weaver suffered a more direct and immediate harm than the plaintiffs in this case and
that the plaintiffs’ injury here is so remote that it cannot suffice to establish standing. Id. at 7
(distinguishing AT&T on the ground that the plaintiffs here allege only an informational injury,
and they do not compete with Crossroads GPS in the same way that AT&T competed with MCI).
The FEC’s argument is at odds with the broad language employed by the D.C. Circuit in
Weaver itself. There, the Court expressly stated that “when an agency seeks to apply [a] rule,
those affected may challenge that application on the grounds that it conflicts with the statute
from which its authority derives.” Weaver, 744 F.3d at 145 (internal quotation marks omitted)
(emphasis added). Here, the plaintiffs are plainly “affected” by the FEC’s reliance on 11 C.F.R.
§ 109.10(e)(1)(vi) in dismissing the plaintiffs’ administrative complaint—regardless of the
plaintiffs’ degree of involvement in the administrative process—because, the plaintiffs allege,
they were denied access to information to which they were lawfully entitled about who funded
certain of Crossroads GPS’s independent expenditures. Indeed, the D.C. Circuit has previously
held that a plaintiff has standing under the APA to challenge an FEC regulation, 11 C.F.R.
§ 104.20(c)(9), because the plaintiff showed that he was “unable to obtain disclosure of
information under [the Bipartisan Campaign Reform Act] because of the allegedly unlawful
restrictions imposed by 11 C.F.R. § 104.20(c)(9).” Ctr. for Individual Freedom v. Van Hollen,
694 F.3d 108, 109 (D.C. Cir. 2012) (citing FEC v. Akins, 524 U.S. 11, 21 (1998) (holding that “a
plaintiff suffers an ‘injury in fact’ when the plaintiff fails to obtain information which must be
publicly disclosed pursuant to a statute” (citation omitted))). Thus, to the extent that the FEC
contends that the plaintiffs have suffered no injury, that argument is foreclosed by both D.C.
Circuit and Supreme Court precedent recognizing that “the denial of information [a plaintiff]
16
believes the law entitles him to” constitutes an injury in fact. 5 Shays v. FEC, 528 F.3d 914, 923
(“[U]nder the FEC’s definition of coordinated communications, presidential candidates need not
report as contributions many expenditures that Shays believes BCRA requires them to report.
Thus, Shays claims that the regulation illegally denies him information about who is funding
presidential candidates’ campaigns. We see no difference between this injury and the injury
deemed sufficient to create standing in Akins.”). For the foregoing reasons, the FEC’s motion to
dismiss Count II is denied. 6
5
Neither the FEC nor Crossroads GPS contends that CREW is differently situated than Mr. Mezlak for
purposes of standing. Indeed, this standing analysis applies not only to Mr. Mezlak, an Ohio voter, but also to
CREW. As the D.C. Circuit has explained, “an organizational plaintiff like CREW “ha[s] standing to sue on its own
behalf ‘to vindicate whatever rights and immunities the association might enjoy.’” Common Cause v. FEC, 108
F.3d 413, 417 (D.C. Cir. 1997) (quoting Warth v. Seldin, 422 U.S. 490, 511 (1975)). “In those cases where an
organization is suing on its own behalf, it must establish concrete and demonstrable injury to the organization’s
activities—with a consequent drain on the organization’s resources—constituting more than simply a setback to the
organization’s abstract social interests.” Id. (internal quotation marks and alterations omitted). “Indeed, the
organization must allege that discrete programmatic concerns are being directly and adversely affected by the
challenged action.” Id. (internal quotation marks and alteration omitted). Here, CREW alleges that it “uses a
combination of research, litigation, advocacy, and public education to disseminate information to the public about
public officials and their actions, and the outside influences that have been brought to bear on those actions.”
Compl. ¶ 9. Furthermore, CREW maintains that it is “hindered in carrying out its core programmatic activities
when those individuals and entities that attempt to influence elections and elected officials are able to keep their
identities hidden.” Id. ¶ 12; see also id. ¶¶ 13–16 (describing CREW’s particular activities that are adversely
affected by the withholding of donors’ identities, allegedly in violation of the FECA). Accordingly, CREW has
sufficiently alleged that its “discrete programmatic concerns are being directly and adversely affected” by the FEC’s
alleged failure to properly enforce the FECA’s disclosure provisions. Common Cause, 108 F.3d at 417.
6
The FEC points out that the plaintiffs could have but did not petition the FEC for amendment or rescission
of the rule and then sought judicial review of an adverse agency decision. See, e.g., FEC Mem. at 7–9. Though
true, that fact does not diminish the propriety of the plaintiffs’ challenge via this alternate route. The caselaw makes
clear that “[a]n agency’s regulations may be attacked in two ways once the statutory limitations period has expired.”
NLRB Union, 834 F.2d at 195. “First, a party who possesses standing may challenge regulations directly on the
ground that the issuing agency acted in excess of its statutory authority in promulgating them.” Id. “The second
method of obtaining judicial review of agency regulations once the limitations period has run is to petition the
agency for amendment or rescission of the regulations and then to appeal the agency’s decision.” Id. at 196; accord
P&V Enter. v. U.S. Army Corps of Eng’rs, 466 F. Supp. 2d 134, 143 (D.D.C. 2006) (same), aff’d, 516 F.3d 1021
(D.C. Cir. 2008). This second avenue was employed in 2011 by then-Congressman Chris Van Hollen, who
petitioned the FEC to amend 11 C.F.R. § 109.10(e)(1)(vi), arguing that the “regulation is manifestly inconsistent
with the statute.” Petition for Rulemaking to Revise and Amend Regulations Relating to Disclosure of Independent
Expenditures ¶ 6 (Apr. 21, 2011), available online at http://sers.fec.gov/fosers/showpdf.htm?docid=
61143. The FEC split three-to-three on whether to issue a Notice of Proposed Rulemaking on Congressman Van
Hollen’s petition, and, accordingly, no rulemaking was initiated. See FEC’s Mem. at 8. Congressman Van Hollen
did not challenge the FEC’s inaction in Court. Id.
17
B. Crossroads GPS’s Motion to Dismiss Under Rule 12(b)(6)
Crossroads GPS has moved to dismiss the portions of Counts I, II, and III that seek relief
pursuant to the APA, 5 U.S.C. § 706, because, according to Crossroads GPS, “the [FECA], 52
U.S.C. § 30109(a)(8), provides the exclusive avenue for review of the FEC’s dismissal of the
administrative complaint that [the plaintiffs] challenge in this action.” See Crossroads GPS’s
Supplemental MTD at 1–2. 7 Under the APA, “[a] person suffering legal wrong because of
agency action, or adversely affected or aggrieved by agency action within the meaning of a
relevant statute, is entitled to judicial review thereof.” 5 U.S.C. § 702. Judicial review is
available, however, only in the case of “[a]gency action made reviewable by statute and final
agency action for which there is no other adequate remedy in a court.” Id. § 704 (emphasis
added); see Bowen v. Massachusetts, 487 U.S. 879, 903 (1988) (explaining that the APA “does
not provide additional judicial remedies in situations where the Congress has provided special
and adequate review procedures” (internal quotation marks omitted)); Citizens for Responsibility
7
The plaintiffs argue that Crossroads GPS’s motion to dismiss is procedurally improper, citing the Court’s
Minute Order, dated April 29, 2016, which modified the briefing schedule to allow then newly-intervened
Crossroads GPS to file a “notice of joinder in the [FEC’s] Partial Motion to Dismiss, as well as any supplemental
memorandum of points and authorities in support thereof.” The plaintiffs contend that Crossroads GPS’s
Supplemental Motion to Dismiss goes beyond the scope of what the Minute Order contemplated since the motion
raises new arguments not previously raised in the FEC’s Partial Motion to Dismiss. See Pls.’ Opp’n at 10–11
(“Crossroads GPS’s attempt to shoehorn a new motion into its notice of joinder in the FEC’s motion is improper.”).
In support, the plaintiffs cite two non-binding, out-of-Circuit district court opinions, neither of which is persuasive in
the circumstances of this case. Here, the plaintiffs do not claim to have suffered any prejudice by Crossroads GPS’s
motion and, indeed, Crossroads GPS’s answer to the plaintiffs’ complaint specified as an affirmative defense the
same argument it now presses in its motion to dismiss. See Answer and Affirmative Defense of Intervenor-
Defendant Crossroads Grassroots Policy Strategies, Affirmative Defenses ¶ 1, ECF No. 14 (“The [APA] does not
provide an avenue for relief where other adequate bases for relief from administrative action are available. Because
the FECA otherwise provides relief from improper dismissal, no APA remedy is available here.”). Moreover, as
Crossroads GPS points out, “because the pleadings now are closed and there is no risk of delaying trial, Crossroads
GPS’s Rule 12(b)(6) motion is timely under Rule 12(h) and can and should be entertained and decided under the
identical standards that govern a Rule 12(c) motion for judgment on the pleadings.” Crossroads Grassroots Policy
Strategies’ Reply Supp. Defs.’ Partial Mot. Dismiss (“Crossroads GPS’s Reply”) at 4, ECF No. 19 (citing Bloom v.
McHugh, 828 F. Supp. 2d 43, 49 (D.D.C. 2011) (“Because, however, the standards for a Rule 12(b)(6) motion and
a Rule 12(c) motion for judgment on the pleadings are identical, courts routinely construe motions to dismiss that
are filed after a responsive pleading as motions for judgment on the pleadings, and this Court will do likewise.”).
For these reasons, Crossroads GPS’s Supplemental Motion to Dismiss is properly before the Court.
18
& Ethics in Washington v. U.S. Dep’t of Justice, 846 F.3d 1235, 1244 (D.C. Cir. 2017) (noting
that courts “look for ‘clear and convincing evidence’ of ‘legislative intent’ to create a special,
alternative remedy and thereby bar APA review” (quoting Garcia v. Vilsack, 563 F.3d 519, 523
(D.C. Cir. 2009))). Thus, the key question is whether the FECA provides an “adequate remedy”
for the agency action challenged here.
To determine whether the plaintiffs may bring an APA claim in addition to their FECA
claim, the adequacy of the relief provided under the FECA must be considered. As the D.C.
Circuit has clarified, an alternative remedy “need not provide relief identical to relief under the
APA, so long as it offers relief of the ‘same genre,’” and “relief will be deemed adequate [such
that APA review is precluded] ‘where a statute affords an opportunity for de novo district-court
review’ of the agency action.” Garcia, 563 F.3d at 522–23 (quoting El Rio Santa Cruz
Neighborhood Health Ctr., Inc. v. U.S. Dep’t of Health & Human Servs., 396 F.3d 1265, 1270
(D.C. Cir. 2005)); see also El Rio, 396 F.3d at 1270 (“Congress did not intend to permit a litigant
challenging an administrative denial . . . to utilize simultaneously both the [separate statutory]
review provision and the APA.” (quoting Envtl. Def. Fund v. Reilly, 909 F.3d 1497, 1501 (D.C.
Cir. 1990))). As relevant here, the FECA provides that “[a]ny party aggrieved by an order of the
Commission dismissing a complaint filed by such party . . . , or by a failure of the Commission
to act on such complaint during the 120-day period beginning on the date the complaint is filed,
may file a petition with the United States District Court for the District of Columbia.” 52 U.S.C.
§ 30109(a)(8)(A). The FECA limits this Court’s authority to review such a dismissal as follows:
“In any proceeding under this paragraph the court may declare that the dismissal of the
complaint or the failure to act is contrary to law, and may direct the Commission to conform with
such declaration within 30 days, failing which the complainant may bring, in the name of such
19
complainant, a civil action to remedy the violation involved in the original complaint.”
Id. § 30109(a)(8)(C).
Counts I and III advance garden-variety challenges to the FEC’s dismissal of the
plaintiffs’ administrative complaint. See Compl. ¶¶ 111, 113 (challenging the FEC’s
“application” of 11 C.F.R. § 109.10(e)(1)(vi) because “[t]he evidence before the Commission
provided a reason to believe that Crossroads GPS accepted contributions made for the purpose of
airing its independent expenditures in Ohio, Virginia, Montana, and Nevada”); see also id. ¶ 130
(arguing that the FEC “gave no consideration to [certain] facts before refusing to find reason to
believe Crossroads GPS violated Section 30104(c)(1)”). With respect to Counts I and III, the
plaintiffs seek solely “an order reversing the FEC’s unlawful dismissal of [the plaintiffs’]
complaint.” Pls.’ Opp’n at 12. The FECA provides that a district court may “declare that the
dismissal of the complaint or the failure to act is contrary to law, and may direct the Commission
to conform with such declaration.” 52 U.S.C. § 30109(a)(8)(C); see also Citizens for
Responsibility & Ethics in Washington (“CREW”) v. FEC, 164 F. Supp. 3d 113, 119–20 (D.D.C.
2015) (“Under the system of judicial review established by FECA, the Court can override the
FEC’s decision to dismiss a complaint if ‘the dismissal was based on an impermissible
interpretation of [FECA] . . . or was arbitrary or capricious, or an abuse of discretion.’” (quoting
Common Cause v. FEC, 108 F.3d 413, 415 (D.C. Cir. 1997))). Given that this is precisely the
relief sought by the plaintiffs, and the fact that the APA is not intended to “duplicate existing
procedures for review of agency action,” Bowen 487 U.S. at 903, the FECA provides an
“adequate remedy” with respect to Counts I and III. Accord CREW v. FEC, 164 F. Supp. 3d at
120 (holding that the FECA’s “comprehensive judicial review provision [52 U.S.C.
20
§ 30109(a)(8)] precludes review of FEC enforcement decisions under the APA”). 8 Accordingly,
the portions of Counts I and III seeking relief under the APA are dismissed.
This leaves the question whether APA relief is available as to Count II, which differs
from Counts I and III by alleging that the FEC’s dismissal of the plaintiffs’ administrative
complaint was improper because the dismissal was predicated on an “unlawful and invalid”
regulation, i.e., 11 C.F.R. § 109.10(e)(1)(vi). Compl. ¶ 124 (“Plaintiffs are therefore entitled to
relief in the form of a declaratory order that defendant FEC is in violation of its statutory
responsibilities under 52 U.S.C. § 30109(a)(8) and 5 U.S.C. § 706, that the FEC has acted
arbitrary [sic] or capriciously, abused its discretion, or acted contrary to law in dismissing [the
plaintiffs’ administrative complaint], and that 11 C.F.R. § 109.10(e)(1)(vi) is unlawful and
invalid.” (emphasis added)). As the D.C. Circuit has explained, “[t]he FECA has no provisions
governing judicial review of regulations, so an action challenging its implementing regulations
should be brought under the judicial review provisions of the Administrative Procedure Act
(APA), 5 U.S.C. § 701 et seq.” Perot v. FEC, 97 F.3d 553, 560 (D.C. Cir. 1996); see also
Unity08 v. FEC, 596 F.3d 861, 866 (D.C. Cir. 2010) (rejecting the FEC’s argument that “FECA
implicitly precludes direct judicial review of Commission advisory opinions”); Shays v. FEC,
414 F.3d 76, 95–96 (D.C. Cir. 2005) (describing as “weak[]” the FEC’s argument that “because
FECA permits judicial review to determine whether even non-enforcement decisions are
8
In the earlier CREW v. FEC, which the FEC contends should be followed here, CREW argued that the FEC
had adopted a “‘de facto rule[]’ . . . governing how the FEC interprets the law and when it will take action” to
investigate an administrative complaint. 164 F. Supp. 3d at 115. CREW asserted that this de facto regulation was
“promulgated in violation of the [APA], which, among other things, prescribes procedures for administrative
agencies engaged in rulemaking.” Id. The Court granted the FEC’s motion to dismiss on two grounds. First, even
if the two adjudications that CREW pointed to “resulted in the announcement of a new principle or interpretation,
that principle or interpretation would not be a regulation within the meaning of the APA and would therefore not be
subject to notice-and-comment procedures.” Id. Second, and most relevant here, “CREW ha[d] an adequate,
alternative means to challenge the [adjudicative] decisions through FECA’s judicial review provision, which
precludes APA review.” Id.
21
contrary to law, [the plaintiffs] cannot show that no other adequate remedy in a court exists, as
required for APA jurisdiction” (internal quotation marks and citations omitted)). Thus, the D.C.
Circuit has clearly instructed that, to the extent that Count II challenges the legal validity of 11
C.F.R. § 109.10(e)(1)(vi), FECA’s remedy is not “adequate,” and review under the APA is
proper. 9 In the event that the plaintiffs ultimately prevail on their APA challenge to the
regulation, however, the Court would remand this action to the FEC for reconsideration of the
plaintiffs’ administrative complaint in light of the Court’s opinion. See 52 U.S.C.
§ 30109(a)(8)(C).
In sum, Crossroads GPS’s Partial Motion to Dismiss is granted with respect to Counts I
and III because APA relief is not available for those Counts. Count II, however, which
challenges the dismissal of the administrative complaint based on the alleged invalidity and
unlawfulness of 11 C.F.R. § 109.10(e)(1)(vi), is properly brought under the FECA and the APA.
IV. CONCLUSION
For the foregoing reasons, the FEC’s Partial Motion to Dismiss is denied, and Crossroads
GPS’s Supplemental Motion to Dismiss is denied insofar as the plaintiffs may challenge the
validity and lawfulness of 11 C.F.R. § 109.10(e)(1)(vi) under the APA, as raised in Count II.
Crossroad CPS’s motion is granted in all other respects. The parties shall submit jointly, by
April 14, 2017, a schedule to govern further proceedings in this matter.
Digitally signed by Hon. Beryl A. Howell
DN: cn=Hon. Beryl A. Howell, o, ou=Chief
Date: March 22, 2017 Judge, U.S. District Court for the District
of Columbia,
email=Howell_Chambers@dcd.uscourts.
gov, c=US
Date: 2017.03.22 18:49:38 -04'00'
__________________________
BERYL A. HOWELL
Chief Judge
9
In other words, the D.C. Circuit has already held that APA review is proper in the context of a direct
challenge to an FEC regulation, and the Court perceives no reason why the result should differ when a regulation is
challenged by a party “affected” by application of the rule, as here. Indeed, relief as to Count II would be illusory
were the plaintiffs required to proceed only under the FECA, which, as noted, does not permit courts to consider the
validity of FEC regulations.
22