Van Hollen v. Federal Election Commission
74 F. Supp. 3d 407
D.D.C.2014Background
- Plaintiff Christopher Van Hollen, Jr. challenged 11 C.F.R. § 104.20(c)(9), an FEC regulation that limited BCRA donor disclosure for corporations and labor organizations to those who donated "for the purpose of furthering electioneering communications."
- The FEC adopted the rule after the Supreme Court's WRTL II decision, asserting the change implemented that decision and reduced perceived burdens of disclosure on organizations whose general treasuries include non-supporting investors/customers/members.
- Van Hollen sued under the Administrative Procedure Act claiming the FEC exceeded statutory authority and acted arbitrarily and capriciously; CFIF and HLF intervened and appealed the district court's initial ruling.
- The D.C. Circuit held the statutory disclosure provisions ambiguous and remanded for Chevron step two review, directing the district court to assess whether the regulation was a permissible interpretation or arbitrary and capricious.
- On remand, the district court reviewed the administrative record and rulemaking history and concluded the FEC’s purpose-based limitation was not supported by WRTL II, lacked record evidence, conflicted with BCRA’s disclosure purpose, and therefore was an unreasonable, arbitrary, and capricious interpretation.
- The court vacated 11 C.F.R. § 104.20(c)(9) and entered judgment for Van Hollen.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FEC lawfully interpreted 52 U.S.C. § 30104(f)(2) by adding a donative-purpose requirement in 11 C.F.R. § 104.20(c)(9) | Van Hollen: FEC exceeded statutory authority and the purpose test contradicts the statutory text and disclosure scheme | FEC: regulation is a permissible interpretation of ambiguous statute to avoid undue burden and protect non-donors | Held: Unreasonable interpretation; regulation conflicts with statutory language and purpose — vacated |
| Whether adopting the purpose requirement was a permissible construction under Chevron step two | Van Hollen: even if statute ambiguous, the rule is not a permissible construction because it frustrates BCRA’s disclosure objectives | FEC: Chevron deference requires courts to uphold reasonable agency constructions addressing post-WRTL II realities | Held: Not a permissible construction — agency failed to justify the rule as reasonable in light of statute and policy |
| Whether the FEC’s rulemaking process and administrative record supported the change (APA arbitrary and capricious) | Van Hollen: record lacks evidence quantifying burdens or showing necessity; rule added post-comment without support | FEC: relied on hearing testimony and practical compliance concerns to justify narrowing disclosure | Held: Arbitrary and capricious — the record does not show examination of relevant data or a rational connection between facts and choice |
| Whether WRTL II or Citizens United required narrowing or altering BCRA disclosure provisions | Van Hollen: Neither Supreme Court decision addressed or required changes to disclosure rules; McConnell had upheld disclosure | FEC/Intervenors: post-WRTL II landscape justified tailored disclosure to avoid imposing burdens on organizations | Held: WRTL II did not authorize narrowing; Citizens United likewise left disclosure regime intact — the FEC’s reliance on those decisions was misplaced |
Key Cases Cited
- Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837 (framework for judicial review of agency interpretations)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (arbitrary and capricious review standard for agency rulemaking)
- Citizens United v. FEC, 558 U.S. 310 (recognition of disclosure interests; did not invalidate BCRA disclosure provisions)
- FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (WRTL II) (as-applied test for "functional equivalent" of express advocacy; did not address disclosure requirements)
- McConnell v. FEC, 540 U.S. 93 (upholding BCRA disclosure provisions on their face)
- Ctr. for Individual Freedom v. Van Hollen, 694 F.3d 108 (D.C. Cir.) (held statute ambiguous and remanded for Chevron step two review)