McChesney v. Peterson, 226 F. Supp. 3d 920

Background

Plaintiffs are the McLeay Committee and its treasurer, who failed to file several required 48‑hour contribution notices for a 2014 Nebraska U.S. Senate primary; the FEC issued an administrative fine of $12,122 under its Administrative Fines Program.
FECA authorizes the FEC to assess administrative fines for late periodic reports and provides a limited administrative review process and statutory route for district court review of final administrative fine determinations.
In January 2014 the FEC issued a regulatory extension (the "2014 Regulatory Extension") to apply the Administrative Fines Program through the date specified by Congress after Congress extended the statutory authority in December 2013; the FEC invoked the APA’s "good cause" exceptions to bypass notice-and-comment and delayed‑effective‑date requirements.
Plaintiffs challenged the validity of the penalty schedule (and thus the fines) on grounds that the FEC failed to lawfully establish the schedule via notice-and-comment and that procedural defects (tally vote/Sunshine Act) invalidated the extension.
The FEC defended the regulatory extension as non‑substantive (technical), within the APA good‑cause exceptions (both pre‑adoption §553(b) and post‑adoption §553(d)), and argued FECA provides the exclusive and adequate review mechanism; the court found the administrative record before it sufficient.
Court held (1) Plaintiffs’ Declaratory Judgment and APA claims were barred by FECA’s exclusive review scheme; (2) the FEC had good cause to bypass notice-and-comment and delayed publication for the 2014 Regulatory Extension; (3) alleged Sunshine Act/tally‑vote defects did not invalidate the rule or warrant vacatur; therefore the FEC’s motion to dismiss was granted and Plaintiffs’ claims against the FEC were dismissed with prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Jurisdiction / availability of APA and Declaratory Relief	Plaintiffs sought declaratory and APA relief to set aside the fines because the penalties schedule was not lawfully established.	FEC: FECA provides a special and adequate review procedure; APA/DJA review is precluded.	Dismissed APA and Declaratory claims: FECA’s review scheme is adequate and exclusive.
Procedural sufficiency of challengers’ administrative filings	Plaintiffs contended they preserved broader legal challenges and satisfied administrative prerequisites.	FEC: challenges must be limited to grounds in 11 C.F.R. §111.35(b); plaintiffs failed to properly raise some defenses.	Court: plaintiffs met the §111.35(b) threshold by asserting factual error, so FECA review of their administrative appeal was permissible.
Validity of the 2014 Regulatory Extension under the APA (notice-and-comment and delayed effective date)	Plaintiffs argued the FEC unlawfully promulgated the extension without notice-and-comment and without proper delayed‑effective‑date publication.	FEC: extension was non‑substantive/technical and Congress had already extended authority; good cause excused pre‑ and post‑adoption procedures.	Held: FEC demonstrated narrow, applicable good cause under §553(b) and §553(d); the extension was valid.
Sunshine Act / tally‑vote procedure compliance	Plaintiffs argued internal voting or certification defects and failure to publicly vote invalidated the rule.	FEC: any procedural irregularities did not prejudice Plaintiffs; remedy is increased transparency, not vacatur.	Held: No facts alleged showing intentional, prejudicial, serious Sunshine Act violation; invalidation not warranted.

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for federal pleadings)
Ashcroft v. Iqbal, 556 U.S. 662 (limits on conclusory allegations in pleadings)
Bowen v. Massachusetts, 487 U.S. 879 (special statutory review bars APA review)
Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402 (administrative action review standard)
Combat Veterans for Cong. Political Action Comm. v. Fed. Election Comm’n, 795 F.3d 151 (purpose and scope of FECA administrative fines program)
Mack Trucks, Inc. v. EPA, 682 F.3d 87 (when notice-and-comment unnecessary: minor/technical changes)
U.S. Steel Corp. v. U.S. EPA, 605 F.2d 283 (post‑adoption §553(d) good cause analysis)
Pan Am. World Airways, Inc. v. Civil Aeronautics Bd., 684 F.2d 31 (Sunshine Act remedies ordinarily require transcript release, not vacatur)