People v. Fed. Election Comm'n

442 F.Supp.3d 335

FREE SPEECH FOR PEOPLE, Plaintiff,

v.FEDERAL ELECTION COMMISSION, Defendant.

Case No. 19-cv-1722 (APM)

United States District Court, District of Columbia.

Signed March 2, 2020

Ji Eun Kim, Pro Hac Vice, Cohen, Milstein, Sellers & Toll, PLLC, New York, NY, S. Douglas Bunch, Cohen Milstein Sellers & Toll PLLC, Washington, DC, for Plaintiff.

Kevin Deeley, Tanya D. Senanayake, Federal Election Commission, Washington, DC, for Defendant.

MEMORANDUM OPINION

Amit P. Mehta, United States District Court Judge

I. INTRODUCTION

Plaintiff Free Speech for People ("Plaintiff") challenges the Federal Election Commission's ("FEC" or "Commission") failure to act on an administrative complaint that it filed before the agency. Initially filed on February 16, 2018, and twice amended thereafter, Plaintiff's administrative complaint alleges that American Media, Inc., Donald J. Trump for President, Inc., Donald J. Trump, and Michael Cohen violated the Federal Election Campaign Act by arranging for, and not reporting, the payment of $150,000 to Karen McDougal for the purpose of influencing the 2016 presidential election. The Commission has yet to act on Plaintiff's complaint.

Plaintiff now contends that the FEC's failure to act on the administrative complaint within the statutorily mandated 120 days of its filing is contrary to law, and that this court must compel the FEC to act. The FEC moves to dismiss for lack of standing. The court agrees that Plaintiff lacks standing and grants the FEC's motion to dismiss.

II. BACKGROUND

A. Federal Election Campaign Act

The Federal Election Campaign Act ("FECA") permits any person to file a signed, sworn administrative complaint with the FEC alleging a violation of the Act. 52 U.S.C. § 30109(a)(1) ; 11 C.F.R. § 111.4. The FEC must notify the respondents named in the administrative complaint, who are afforded 15 days to answer. 52 U.S.C. § 30109(a)(1) ; 11 C.F.R. §§ 111.5 – 111.6. Following receipt of a response, if one is made, the General Counsel of the FEC "may recommend to the Commission whether or not it should find reason to believe that a person has committed, or is about to commit, a violation of statutes or regulations over which the Commission has jurisdiction," 11 C.F.R. § 111.7(a), or the General Counsel "may recommend that the Commission find that there is no reason to believe that a violation has been committed or is about to be committed, or that the Commission otherwise dismiss a complaint," id. § 111.7(b). If, after reviewing the complaint and response and any other information obtained, at least four members of the Commission determine that there is a "reason to believe that a person has committed, or is about to commit, a violation" of FECA, the Commission "shall make an investigation of [the] alleged violation, which may include a field investigation or audit, in accordance with the provisions of [ section 30109 ]." 52 U.S.C. § 30109(a)(2) ; see also 11 C.F.R. § 111.10. If the Commission makes a reason-to-believe finding, it must notify the respondent of the finding and its basis, though not the complainant. See 11 C.F.R. § 111.9(a). Only if the Commission makes a no-reason-to-believe finding, or otherwise terminates the proceedings at this stage, must it notify both the respondent and the complainant. Id. § 111.9(b).

At the conclusion of an investigation, the General Counsel must "prepare a brief setting forth his or her position on the factual and legal issues of the case and containing a recommendation on whether or not the Commission should find probable cause to believe that a violation has occurred or is about to occur." Id. § 111.16(a); see also 52 U.S.C. § 30109(a)(3) (requiring the General Counsel to file a "brief stating the position of the general counsel on the legal and factual issues of the case"). The respondent is then given the opportunity to address the recommendation, 11 C.F.R. § 111.16(c), and if, after receiving such a response, the General Counsel persists in its recommendation, id. § 111.16(d), the Commission must determine whether "there is probable cause to believe that a respondent has violated a statute or regulation over which the Commission has jurisdiction." Id. § 111.17(a). Four members of the Commission must agree on a probable-cause finding. Id. Upon a finding of probable cause, the "General Counsel shall attempt to correct or prevent the violation by informal methods of conference conciliation and persuasion, and shall attempt to reach a tentative conciliation agreement with the respondent." Id. § 111.18(a); see also 52 U.S.C. § 30109(a)(4)(A)(i). If the Commission cannot reach a conciliation agreement with the respondent within the statutorily mandated time period,¹ the Commission may authorize the filing of a civil action. 11 C.F.R. § 111.19 ; see also 52 U.S.C. § 30109(a)(6). If, on the other hand, the Commission finds no probable cause to believe or otherwise terminates the proceedings, the General Counsel must notify both the complainant and the respondent. 11 C.F.R. § 111.17(b).

FECA itself mandates only limited public disclosure of enforcement matters. The Act provides that the FEC must make public (1) any "conciliation agreement [ ] agreed upon by the Commission and the respondent" and (2) any "determination that a person has not violated" FECA or any other federal election laws. 52 U.S.C. § 30109(a)(4)(B)(ii) ; see also Doe, 1 v. FEC , 920 F.3d 866, 869–70 (D.C. Cir. 2019). Agency policy, however, demands more expansive public disclosures. See generally Disclosure of Certain Documents in Enforcement and Other Matters, 81 Fed. Reg. 50,702, 50,702 –03 (Aug. 2, 2016). Among other things, the FEC makes public General Counsel reports and memoranda making recommendations on dismissal, reason-to-believe determinations, and probable-cause findings, as well as Statements of Reasons issued by Commissioners. Id.

FECA permits a complainant to challenge the FEC's handling of its complaint in two limited situations. 52 U.S.C. § 30109(a)(8)(A). If the Commission fails to act on the complaint within 120 days of the complaint's filing or if, at any time the Commission dismisses the complaint, a complainant may file suit in the United States District Court for the District of Columbia to challenge the agency's inaction or dismissal. Id. If a court finds that the Commission's failure to act or dismissal is "contrary to law," it may direct the Commission "to conform with such declaration" within 30 days. Id. § 30109(a)(8)(C).

B. Factual Background

Plaintiff Free Speech for People is a national non-partisan, non-profit organization that aims to "restore republican democracy to the people, including through legal advocacy concerning the law of campaign finance." Compl., ECF No. 1, ¶ 6. To advance its mission, Plaintiff uses research, litigation, and public advocacy to inform the public about political campaign financing by corporations and wealthy donors. Id. It also advocates for legal reform and oversight, and it uses information about campaign finance practices to further its efforts. Id.

In February 2018, Plaintiff filed a three-count administrative complaint with the FEC, alleging that American Media, Inc. ("AMI"), which owns and operates the National Enquirer, made a $150,000 payment to Karen McDougal for the purpose of influencing the 2016 presidential campaign and, in so doing, violated several FECA provisions. Notice of Filing, ECF No. 12, Exhibit A, ECF No. 12-1, [hereinafter Admin. Compl.], ¶ 2. The initial complaint named Donald J. Trump for President, Inc. ("Trump Campaign") and AMI as respondents. Id. at 1. Count I alleged that the Trump Campaign failed to report the $150,000 payment as an in-kind contribution and a $150,000 expenditure, in violation of FECA's reporting requirements. Id. ¶¶ 31–34 (citing 52 U.S.C. §§ 30104(b)(3)(A) and (b)(5)(A) ). Count II claimed that AMI made, and the Trump Campaign received, a corporate contribution, violating FECA's prohibition against corporate contributions to federal candidates. Id. ¶¶ 35–37 (citing 52 U.S.C. § 30118(a) ). Count III asserted that AMI made, and the Trump Campaign received, a contribution in excess of the $2,700 contribution limit imposed by FECA. Id. ¶¶ 38–39 (citing 52 U.S.C. § 30116(a)(1)(A) and 11 C.F.R. § 110.1 ).

Plaintiff twice amended the administrative complaint, first in April 2018 and then again in July 2018. These amendments added facts gleaned from media stories. See generally Am. Admin. Compl., ECF No. 12-2; Second Am. Admin. Compl., ECF No. 12-3. Plaintiff's first amended administrative complaint, for instance, cited articles from the New York Times, the New Yorker, and the Wall Street Journal, see Am. Admin. Compl. at 4–8, which reported that the President of AMI, David Pecker, admitted paying McDougal $150,000 for the exclusive rights to her story; that the agreement was conditioned on McDougal not "bashing Trump and [AMI]"; and that the agreement was struck less than three months before the 2016 Presidential election, see id. at 5–6. Plaintiff's second amended administrative complaint cited New York Times reporting regarding the release of an audio file, recovered during FBI raids on Michael Cohen's office, apartment, and hotel, containing a recorded conversation between Cohen and President Trump regarding the payment from AMI to McDougal. Second Am. Admin. Compl. at 3. On that recording, the President purportedly can be heard discussing a plan to pay "David," reportedly a reference to David Pecker of AMI. Id. The second amended administrative complaint added the President and Michael Cohen as respondents. See id. at 1.

Since Plaintiff amended its administrative complaint, many of the details regarding the transaction between AMI and McDougal have been confirmed in court filings made by the Department of Justice.² Specifically, as part of his plea entered in the Southern District of New York, see Letter from Robert Mueller, Special Counsel, to Guy Petrillo, Esq.,...