Sore Losers: Why Hasn't the FEC Appealed a Case in Over a Decade?

August 13, 2018
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This summer marks the ten-year anniversary of the last time a federal circuit court decided a case appealed by the FEC. For perspective, at the time of the most recent FEC appeal, iPhones were brand new and Lehman Brothers seemed fine. The FEC’s decade of non-appeals has had serious consequences for the development of election law and has passed the torch of defending federal election statutes to dark-money groups with long-term interests counter to the public’s. Unless and until the FEC’s commissioners unshackle the agency’s lawyers to appeal adverse decisions, the Commission’s failure to act will continue to undermine the vitality of election law.

The FEC has no one to blame but itself for its long-running failure to appeal. Unlike agencies such as the Environmental Protection Agency, the FEC’s authorizing statute — FECA — allows the Commission to represent itself in court, rather than relying on Department of Justice lawyers. 52 U.S.C. § 30107(a)(7). As part of that same provision, the Commission also has the power to appeal adverse district-court rulings. But there’s a catch. Under 52 U.S.C. § 30106(c), four of the FEC’s six commissioners must vote to approve the filing of any appeal.

The last decision appealed by the FEC was handed down by the U.S. District Court for the District of Columbia in September 2007. The court issued a complicated ruling in Shays v. FEC (Shays III), 508 F. Supp. 2d 10 (D.D.C. 2007), one of a series of challenges to regulations promulgated by the Commission under the Bipartisan Campaign Finance Reform Act. The court granted part of the plaintiffs’ motion for summary judgment, and on October 31, 2007, with the 2008 election season kicking into gear, the FEC appealed.

The Shays III appeal occurred during a time of turmoil at the FEC. Between the Commission’s October 2007 notice of appeal and the oral argument in May 2008, most of the FEC’s business had ground to a halt. Two of its members’ terms expired at midnight on January 1, 2008, and Congress failed to confirm President Bush’s nominees before that deadline. Because the FEC was already operating with just four of its six commissioners, the Commission was denied a quorum. Among the many powers frozen by the FEC’s lack of a quorum, the Commission lost the ability to appeal adverse District Court cases — which, remember, requires the affirmative vote of four members. 52 U.S.C. § 30106(c). The FEC’s quorum was finally restored in the summer of 2008, when a slate of five Commissioners, including current White House Counsel Donald McGahn, cleared the Senate.

Since those Commissioners were confirmed ten years ago, the FEC has never appealed an adverse court decision.

This is not for lack of opportunity. Since Shays III, the FEC has lost appealable decisions in U.S. district court at least eight times.[1] Granted, appealing some of these decisions wouldn’t have been worth the candle. In La Botz v. FEC, for example, the U.S. District Court for the District of Columbia remanded to the Commission for investigation into whether a Senate candidate in Ohio had been improperly excluded from a debate. On remand, the FEC determined that such an investigation “would be an inefficient use of the Commission’s limited resources, [so] the Commission exercised its prosecutorial discretion and dismissed the matter.” When La Botz challenged that dismissal, the District Court easily ruled in the FEC’s favor. In short, the FEC’s decision not to appeal La Botz I had no adverse consequences for the agency or the law.

But other non-appealed district court decisions against the FEC are more worrying. Some have created bad law for the FEC and the nation — bad law that an appellate court might well have overturned, if asked. For example, in Carey v. FEC, one district court judge single-handedly invented a new category of “hybrid” PACs (which can simultaneously act as regular PACs and super PACs if they have two bank accounts) in a ruling on a preliminary injunction. Rather than fight that decision in the D.C. Circuit, the FEC entered a consent decree with plaintiffs. These “hybrid” committees have since exploded onto the scene.

On other occasions, the FEC’s co-defendants have appealed adverse decisions in district court without the government’s participation. In CREW v. FEC, for example, a watchdog group sued the FEC for failing to find reason to believe that American Action Network, a 501(c)(4) group, had violated numerous provisions of FECA. American Action Network intervened as a defendant, and when the D.C. District Court ruled for CREW, AAN appealed. The FEC did not appeal, and is listed as an “appellee” on court documents — even though it is on the same side as the appellant. (As of this writing, the case is ongoing.) When the briefs are filed and oral arguments heard, the federal government’s position will be defended not by government lawyers, but by a dark-money group.

It is worrying that the agency in charge of enforcing campaign finance laws is effectively delegating its responsibility to defend those laws to the groups it is supposed to be regulating. A dark-money group has different motives and incentives in litigation than does the United States government. The private group’s lawyers are ethically obligated to zealously pursue the parochial interests of their client alone, while government agencies owe a greater obligation to the nation. The courts hearing these appeals from private actors without FEC involvement are therefore making decisions that will affect the entire American campaign process without the input of the governmental experts charged with oversight of that system.

The FEC’s decade of failing to appeal also creates a massive asymmetry in campaign finance law. When the FEC loses a case, either a single district court judge’s opinion is the final say on the matter (as in Carey), or a co-defendant appeals and binding precedent is created without the Commission’s involvement. But when the FEC wins, the loser can and often does appeal — giving them a second bite at the apple and another chance to set bad precedent.

The FEC’s failure to appeal important adverse decisions is yet another product of the institution’s chronic dysfunction. But unlike when the FEC declines to act on an administrative complaint or promulgate a requested rule, no one can sue the Commission for failing to appeal. The remedy has to be institutional and political — the FEC must overcome its internal political rivalries and start allowing its lawyers to appeal again. If it does not, single district judges will continue to unilaterally decide the fate of important laws without appellate oversight, and private groups will press their interests in cases where no one represents the public. The D.C. Circuit’s decision in Shays III expressed the Court’s hope that the FEC would begin realizing Congress’s vision for the agency as a dedicated and energetic defender of federal election laws. Ten years is too long a time to leave that hope unfulfilled.

 

This post was written by Nathan Leys, a 2018 CLC legal intern, and a rising second-year law student at Yale Law School

 

[1] CREW v. FEC, 299 F. Supp. 3d 83 (D.D.C. 2018) (although co-defendant American Action Network appealed adverse decision, FEC did not); Level the Playing Field v. FEC, 232 F. Supp. 3d 130 (D.D.C. 2017) (ruling against FEC on cross-motions for summary judgment); CREW v. FEC, 209 F. Supp. 3d 77 (D.D.C.  2016) (although co-defendant American Action Network appealed adverse decision, FEC did not); Van Hollen v. FEC, 74 F. Supp. 3d 407 (D.D.C. 2014) (although intervenor-defendants appealed adverse decision, FEC did not); La Botz v. FEC, 889 F. Supp. 2d 51 (D.D.C. 2012) (remanding enforcement matter); Carey v. FEC, 864 F. Supp. 2d 57 (D.D.C. 2012) (FEC did not appeal adverse decision on attorneys’ fees); Carey v. FEC, 791 F. Supp. 2d 191 (D.D.C. 2011) (FEC did not appeal grant of preliminary injunction); Utility Workers Union of America, Local 269, AFL-CIO v. FEC, 691 F. Supp. 2d 101 (D.D.C. 2010) (remanding enforcement matter to agency).