Campaign Legal Ctr. v. Fed. Election Comm'n

89 F.4th 936

CAMPAIGN LEGAL CENTER, Appellant v. FEDERAL ELECTION COMMISSION, Appellee

No. 22-5339

United States Court of Appeals, District of Columbia Circuit

Argued October 19, 2023

Decided January 5, 2024

Appeal from the United States District Court for the District of Columbia (No. 1:22-cv-01976)

Megan P. McAllen argued the cause for appellant. With her on the briefs were Erin Chlopak and Allison Walter.

Greg J. Mueller argued the cause for appellee. With him on the brief were Lisa J. Stevenson, Kevin Deeley, and Harry J. Summers.

Before: Srinivasan, Chief Judge, Henderson, Circuit Judge, and Rogers, Senior Circuit Judge.

Rogers, Senior Circuit Judge:

The Federal Election Commission dismissed an administrative complaint by the Campaign Legal Center alleging campaign finance violations by two presidential campaign committees. Although dismissals predicated upon the Commission's exercise of prosecutorial discretion are excepted from judicial review, Campaign Legal contends that the Commission's invocation of discretion was dependent upon legal analysis and thus subject to review under the Federal Election Campaign Act. The district court concluded the Commission's reliance on "quintessential" considerations of prosecutorial discretion stood "apart" from its legal analysis and precluded review. In view of circuit precedent, we affirm.

I.

The Federal Election Campaign Act ("FECA"), 52 U.S.C. § 30101 et seq., "seeks to remedy any actual or perceived corruption of the political process." FEC v. Akins, 524 U.S. 11, 14, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998). At its heart are disclosure requirements that the Supreme Court has stated are "particularly effective means of arming the voting public with information" and "deter[ring] actual corruption and avoid[ing] the appearance of corruption" in today's politics. McCutcheon v. FEC, 572 U.S. 185, 223-24, 134 S.Ct. 1434, 188 L.Ed.2d 468 (2014). The Act requires covered "political committee[s]" to "file reports of receipts and disbursements" with the Federal Election Commission that identify "each person to whom an expenditure . . . in excess of $200" was made, as well as the "date, amount, and purpose" of the expenditure. 52 U.S.C. § 30104(a)(1), (b)(5)-(6). The Commission of six voting members, no more than three of whom may be "affiliated" with the same political party, id. § 30106(a)(1), (a)(2)(A), may investigate potential violations on its own initiative or in response to an administrative complaint, which may be filed by any person who "believes" that a statutory violation has occurred. Id. §§ 30107(a), 30109(a). If at least four Commissioners find "reason to believe" a complaint's allegations, the Commission "shall" investigate and pursue appropriate remedies. Id. § 30109(a)(2), (4)-(6). In the absence of four affirmative "reason to believe" votes, the Commission may dismiss the complaint. Id. §§ 30106(c), 30109(a)(2). The Commissioners who vote against proceeding must issue an explanatory statement, which is treated as expressing the Commission's rationale and forms the basis of judicial review. Campaign Legal Ctr. v. FEC, 31 F.4th 781, 785 (D.C. Cir. 2022).

"Any party aggrieved by" the dismissal may seek judicial review on the ground that the Commission acted "contrary to law." 52 U.S.C. § 30109(a)(8)(A)-(C). Relief is appropriate if the Commission relied on "an impermissible interpretation of the Act," or if the dismissal was otherwise "arbitrary or capricious, or an abuse of discretion." Orloski v. FEC, 795 F.2d 156, 161 (D.C. Cir. 1986). Upon a judicial determination that the dismissal was improper, the Commission has 30 days "to conform with such declaration," or the complainant may file suit. 52 U.S.C. § 30109(a)(8)(C).

Access to judicial review of Commission dismissals, however, is far from absolute. "In our system of separated powers, an agency's decision not to enforce the law is an exercise of executive discretion and therefore generally unreviewable by the courts." Citizens for Resp. & Ethics v. FEC ("New Models"), 993 F.3d 880, 882 (D.C. Cir. 2021). "[R]econciling" this principle with FECA's "unusual" judicial review provision, the court has held that "a Commission nonenforcement decision is reviewable only if the decision rests solely on legal interpretation." Id. at 884 (citing Citizens for Resp. & Ethics in Washington v. FEC ("Commission on Hope"), 892 F.3d 434, 441-42 (D.C. Cir. 2018)).

Campaign Legal Center filed an administrative complaint in July 2020 alleging that former President Trump's campaign committee ("Donald J. Trump for President, Inc.") and a joint fundraising committee ("Trump Make America Great Again Committee") failed, as required by 52 U.S.C. § 30104(b), to report more than three quarters of a billion dollars in payments to sub-vendors and staff - concealing the expenditures by routing them through sham payments to two LLCs controlled by senior campaign figures. See Admin. Compl., MUR 7784 (July 24, 2020). In May 2022, the Commission deadlocked 3-3 on finding "reason to believe" the complaint. After deadlocking 3-3 twice more, on a second "reason to believe" vote and a separate vote on whether to dismiss the complaint pursuant to the Commission's prosecutorial discretion under Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985), the Commission voted 4-2 to close the file and dismiss the complaint.

The three Commissioners who voted against finding "reason to believe" explained that "the legal support for enforcement" of the alleged reporting violations was "remarkably thin," and that "the only arguable factual support comes from inferences based upon media reports citing anonymous sources." Statement of Reasons of Chairman Allen J. Dickerson and Commissioners Sean J. Cooksey and James E. "Trey" Trainor, III, MUR 7784 (June 9, 2022) at 1 (hereinafter "2022 Statement"). Refusing to "pursue enforcement-by-rumor," they "instead voted to dismiss this matter as an exercise of prosecutorial discretion pursuant to Heckler v. Chaney." Id. After elaborating on factual and legal issues, id. at 2-12, they stated:

We foresee significant litigation risk if we were to act on [this record] and, as importantly, we decline to permit the investigatory resources of the federal government to be mobilized on such a basis. This is particularly so here, where the size and scope of the proposed investigation could quickly consume an outsized share of the resources available to the Commission.

Id. at 12. They also observed that the "regulatory environment is uncertain at best," citing a related pending Commission rulemaking petition, id., and noted that, although "numerous campaigns have used similar vendor arrangements in the past, [ ] the Commission has declined to pursue enforcement action" in those cases. Id.

Campaign Legal filed suit, alleging that the dismissal was "contrary to law." Compl. (July 8, 2022); see 52 U.S.C. § 30109(a)(8)(A). The district court granted the Commission's motion to dismiss the case pursuant to Federal Rule of Civil Procedure 12(b)(6), concluding that the Commissioners invoked discretion in a manner precluding judicial review under this court's precedents. Campaign Legal Ctr. v. FEC, 1:22-cv-01976, 2022 WL 17496211 (D.D.C. Dec. 8, 2022) ("Mem. Op."). It found the "practical" concern "that the 'size and scope of the proposed investigation' could quickly consume the resources available to the Commission" reflected "quintessential consideration[s] in the exercise of prosecutorial discretion" that "stand[ ] apart from the legal questions" at issue. Mem. Op. at 16-17 (quoting 2022 Statement at 12). The district court also noted the discussion of the "uncertain regulatory environment." Mem. Op. at 17.

II.

On appeal, Campaign Legal contends that the Commissioners "in no way 'relied on' discretionary factors to dismiss plaintiff's administrative complaint, but rather simply characterized their conclusive legal determinations on the merits as an exercise of prosecutorial discretion." Appellant's Br. 20 (quoting Mem. Op. at 16). Because "each of the putative discretionary justifications . . . was expressly dependent upon legal and factual judgments about the allegations in the complaint," Campaign Legal maintains that even though the "Commissioners couched their rationale in superficially prudential terms, such 'magic words' cannot manifest independent discretionary justifications where none exist." Id. at 30-31. For instance, "asserted agency resource concerns are impossible to separate from their underlying judgment that there was 'insufficient factual or legal support' to move forward." Id. at 34 (quoting 2022 Statement at 12-13). Because the Commissioners reached that conclusion after applying "improper legal and evidentiary tests," it is "impossible to know whether" absent that flawed analysis their "stated concerns about 'the size and scope of the proposed investigation' would still obtain." Id. at 35 (quoting 2022 Statement at 12).

This court has distinguished two different types of Commission refusals to prosecute administrative complaints. "When interpreting FECA, the Commission renders a legal determination 'not committed to the agency's unreviewable discretion.' " New Models, 993 F.3d at 884 (quoting Comm'n on Hope, 892 F.3d at 441). If "the Commission declines an enforcement action 'based entirely on its interpretation of the statute,' " the decision is reviewable pursuant to the "contrary to law" provision. Id. Because FECA does "not limit the Commission's enforcement discretion [ ] by providing specific requirements for the exercise of that discretion," when the Commission "weigh[s] [ ] practical enforcement considerations," FECA "provides 'no law to apply.' " Id. (quoting Comm'n on Hope, 892 F.3d at 439-40).

Commission on Hope was the court's first Commission discretionary refusal to prosecute case and held unreviewable a dismissal where the relevant Commission statement "placed their judgment [ ] on the...