Lead Opinion
Oрinion for the Court filed by Circuit Judge TATEL. Dissenting opinion filed by Circuit Judge HENDERSON.
A landmark reform to the nation’s campaign finance laws, the Bipartisan Campaign Finance Reform Act of 2002, Pub.L. No. 107-155, 116 Stat. 81, took aim at two perceived demons of federal electoral contests: “soft money,” i.e., use of unregulated political party activities to influence federal elections, and “sham issue ads,” i.e., ostensibly issue-related advocacy functioning in practice as unregulated campaign advertising. These two tactics, given broad scope by permissive Federal Election Commission rulings, infused federal campaigns with , hundreds of millions of dollars in federally unregulated funds, much of it contributed by corporations and labor unions. Now BCRA’s House sponsors (joined by Senate sponsors as amici) claim the FEC has undone their hard work, resurrecting in its regulations practices BCRA eradicated and thus forcing them to seek reelection in illegally constituted electoral contests. Considering this facial challenge to the regulations, the district court invalidated some fifteen rules, finding some inconsistent with the statute and others arbitrary and capricious. The FEC appeals regarding five key rules: standards for “coordinated communication,” definitions of the terms “solicit” and “direct,” the interpretation of “electioneering communication,” allocation rules for staté party employee salaries, and a de minimis exemption from allocation rules governing certain contributions, known as “Levin funds,” to state and local parties. We affirm in all respects.
I.
Needless to say, federal campaign finance law is complex, and BCRA is no exception. Though few of its details are important to this litigation (and those that are we describe later in our analysis), we here provide a brief overview of the statute’s background and objectives. '
As the Supreme Court explained in McConnell v. FEC,
Although in Buckley v. Valeo,
In the political world, several terms of art emerged to describe the boundaries of this pre-BCRA law — terms we shall use throughout this opinion. Most important, contributions subject to federal source, amount, and disclosure requirements are called “hard money” or “federal money.” See McConnell,
Because FECA defined both “contribution” and “expenditure” in terms of the “purpose of influencing any election for federal office,” see 2 U.S.C. §§ 431(8)(A), (9)(A) (emphasis added), donations aimed at state and local elections were unregulated, i.e., “soft.” Thus, as McConnell explains, “questions arose concerning the treatment of contributions intended to influence both federal and state elections.”
Over time, political parties took increasing advantage of these soft money opportunities. Although the two major parties spent only $21.6 million in soft money in the 1984 election cycle, by 2000 that figure had risen to $498 million — roughly 42% of their total spending. Id. at 124,
Just as soft money spending was exploding, a related phenomenon, “sham issue ads,” also developed. The term “issue ad” derives from Buckley’s “magic words” construction of FECA, the idea being that express advocacy relates to candidates whereas non-express advocacy relates to “issues.” See McConnell,
Beginning in about 1996, corporations and unions — both barred from direct contributions and expenditures, see 2 U.S.C. § 441b(a), but permitted to finance non-express advocacy under the “magic words” construal of “expenditure,” see Mass. Citizens for Life, Inc.,
Surveying the landscape in 1998, a Senate investigative committee concluded that the campaign finance system had suffered
Now we confront a lawsuit cutting the opposite way — arguments not that BCRA is too tough, but that FEC implementing-regulаtions are too lax. Plaintiffs, appel-lees herein, are Christopher Shays and Martin Meehan, Members of Congress from Connecticut and Massachusetts, respectively, who were BCRA’s principal sponsors in the House of Representatives. (The Senate sponsors John McCain and Russell Feingold, joining the suit as amici, support this challenge.) Claiming standing not based on their sponsorship of the legislation, but rather as candidates waging reelection contests governed by BCRA, Shays and Meehan challenged numerous FEC interpretive rules in the U.S. District Court for the District of Columbia. They argued that by construing BCRA’s prohibitions too narrowly, these rules effectively permit conduct that BCRA bans, an effect that arises because the statute gives a defense against “any sanction” to “any person” relying in good faith on FEC regulations. 2 U.S.C. § 438(e). In an exceptionally thorough opinion ruling on cross-motions for summary judgment, the district court invalidated and remanded some fifteen rules, while upholding a few more. See Shays v. FEC,
The FEC now appeals the district court’s summary judgment decision with respect to five rules: (1) standards for “coordinated communication”; (2) definitions of the terms “solicit” and “direct”; (3) the interpretation of “electioneering communication”; (4) allocation rules for state party employee salaries; and (5) a de minimis exemption from allocation rules governing certain contributions, known as “Levin funds,” to state and local parties. Following a preliminary discussion of our jurisdiction, we address each rule in turn.
H.
As a threshold matter, the FEC challenges our jurisdiction, asserting both that Shays and Meehan lack standing and that their claims are unripe. With respect to standing, the district court held that because “the regulations shape the environment in which Plaintiffs must operate” as officeholders and candidates, Shays and Meehan could bring suit challenging those rules. See
Standing
Derived from the Constitution’s “case- or-controversy” requirement for federal court jurisdiction, Article III standing requires plaintiffs to establish, as an “irreducible constitutional minimum,” that they face “injury in fact” caused by the challenged conduct and redressable through relief sought from the court. Lujan v. Defenders of Wildlife,
We begin with the last — and easiest — of these requirements. Never “especially demanding,” Amgen,
Turning to the constitutional analysis, Shays and Meehan argue that because BCRA thus protects them from prohibited
Since parties invoking jurisdiction at summary judgment may not rest on “ ‘mere allegations,’ but must ‘set forth’ by affidavit or other evidence ‘specific facts’ ” demonstrating standing, Lujan,
Through these and other like assertions, Shays and Meehan aver that under FEC
In analogous cases, courts have routinely recognized this type of injury — i.e., illegal structuring of a competitive environment — as sufficient to support Article III standing. In the administrative context, for example, we have held that when agencies adopt procedures inconsistent with statutory guarantees, parties who appear regularly before the agency suffer injury to a legally protected interest in “ ‘fair decisionmaking.’ ” Electric Power Supply Ass’n v. FERC,
Likewise indicating that illegal structuring of a competitive environment injures those who are regulated in that environment, longstanding precedent establishes that when a statute “reflects] a legislative purpose to protect a competitive interest, [an] injured competitor has standing to require compliance with that provision.” Hardin v. Ky. Utils. Co.,
To be sure, in this case, the challenged rules create neither more nor different rival candidates — the electoral analogue to participants in a market. Nor, as the FEC points out, do Shays’s and Meehan’s rivals enjoy “special benefits” unavailable to the two Congressmen, Reply Br. at 5. Yet Shays and Meehan do face intensified competition. That is, under FEC rules permitting what BCRA prohibits, the two Congressmen must anticipate and respond to a broader range of competitive tactics than federal law would otherwise allow. For example, under one challenged regulation (described in detail below), rival candidates may have supporters finance issue ads more than 120 days before the election; according to Shays and Meehan, BCRA restricts such spending. See infra at 97-98 (discussing 11 C.F.R. § 109.21). Likewise, rival state parties may spend soft money to pay employees devoting a quarter of their time to defeating Shays and Meehan; the Congressmen believe BCRA requires hard money for such salaries. See infra at 57-58 (discussing 11 C.F.R. §§ 106.7(c)(1), (d)(1), 300.33(c)(2)).
Given that accounting for additional rivals constitutes injury in fact, see, e.g., MD Pharm.,
Indeed, our own case law, though avoiding resolving the issue definitively, supports applying competitor standing to politics as well as business. In Gottlieb v. FEC,
Thus, at least two lines of precedent (procedural rights and competitor standing cases) embody a principle that supports Shays’s and Meehan’s standing: that when regulations illegally structure a competitive environment — whether an agency proceeding, a market, or a reelection race— parties defending concrete interests (e.g., retention of elected office) in that environment suffer legal harm under Article III. As the district court recognized, opponents’ campaign finance options necessarily “affeet[ ] the way these politicians ... will run their campaigns,” such that Shays and Meehan “are at the very least harmed by having to anticipate other actors taking advantage of the regulations to engage in activities that otherwise would be barred.”
Resisting this conclusion, the FEC makes two arguments, both embraced by the dissent and both flawed. First, the Commission points out that campaign finance restrictions benefit the general public as well аs candidates. Yet the same is true of other statutes that structure rivals’ playing fields — statutes routinely held to support such rivals’ standing. Consider: although Congress may well have “designed,” Lujan,
The FEC’s second argument is that McConnell forecloses Shays’s and Mee-han’s standing. It is true that in McConnell the Supreme Court dismissed plaintiffs asserting a supposed “competitive injury” — specifically, “fundraising disadvantage” due to BCRA’s elevated hard money caps.
In McConnell, the so-called “Adams plaintiffs” — a group of voters, voter organizations, and candidates asserting constitutional challenges to BCRA’s elevation of hard money limits — presented two standing theories. First, they argued that “the increases in hard money limits enacted by [BCRA] deprive them of an equal ability to participate in the election process based on their economic status.” Id. at 227,
As the district court recognized, McConnell’s analysis is distinguishable from this case because here, unlike in McConnell where plaintiffs had no right to equal funding, a statute — namely, BCRA— specifically protects the interest in fair reelection contests that Shays and Meehan
Obviously distinguishing the Supreme Court’s first holding on the Adams plaintiffs (lack of legally protected interest), this difference also places Shays’s and Meehan’s suit outside McConnell’s competitive injury analysis. True, .much as the Adams plaintiffs could “choose” to accept hard money up to BCRA’s maximum, Shays and Meehan could perhaps reduce or even neutralize their opponents’ advantages by exploiting illegal FEC safe harbors themselves. To repeat examples given above, they too could have supporters finance issue ads or commit state party employees 25% to federal races. But because being put to the choice of either violating BCRA or suffering disadvantage in their campaigns is itself a predicament the statute spares them, having to make that choice constitutes Article III injury. Cf. Vote Choice,
McConnell itself emphasizes the connection between its two Adams holdings (lack of legal harm and lack of competitive injury). As the Court put it, the Adams plaintiffs’ twin standing theories shared “the same premise”' — -that BCRA’s “increased hard-money limits allow plaintiffs-candidates’ opponents to raise more money, and, consequently, the plaintiffs-candidates’ ability to compete or participate in the electoral process is diminished.” Id. Having already rejected the premise (cognizable funding inequity), the Court naturally rejected the deduction (wrongful disadvantage) posed by plaintiffs’ second theory. Instead, the court attributed the asserted injury to plaintiffs’ own choice — for if funding inequity wasn’t
Furthermore, and clinching the point, McConnell gives no indication of modifying, much less overruling, cases supporting Shays’s and Meehan’s standing — cases like Lujan, Clarke, and Hardin (not to mention this court’s decisions in EPSA, Maryland Pharmaceutical, and Gottlieb, among others). Nor did the Court suggest that campaign finance laws require unique standing rules; quite the opposite, McConnell applies an entirely conventional standing analysis. See id. at 225-26,
This same precedent' — eases involving illegally structured environments — further assures us that notwithstanding Shays’s and Meehan’s failure to show specific adverse use of challenged safe harbors, the Congressmen’s asserted injury is sufficiently “concrete and particularized,” as well as “actual or imminent, not conjectural or hypothetical,” e.g., Laidlaw,
Given what McConnell calls the “hard lesson of circumvention” evident in “the entire history of campaign finance regulation,”
Cases in the administrative context point to the same conclusion. Although we have described administrative litigants’ interest in “ ‘fair decisionmaking,’ ” EPSA,
By the same token, Shays and Meehan may challenge FEC subversion of BCRA’s guarantees without “establish[ing] with any certainty,” Lujan,
Again, the FEC, like the dissent, cites McConnell as contrary authority, but again the analogy falls short. Dismissing different parties from those mentioned earlier (“McConnell plaintiffs” as opposed to “Adams plaintiffs”), the McConnell Court found no standing as to plaintiffs challenging time-limited broadcast restrictions based on one senator’s stated desire to violate them during his next reelection campaign — then over four years away. See McConnell,
As to causation, the two Congressmen argue that their asserted injury — deprivation of fair reelection contests guaranteed by BCRA — is fairly traceable to the FEC’s rules because absent those rules BCRA’s prohibitions would prevent their opponents from tainting their electoral fights (or at least impose a “sanction” for doing so, 2 U.S.C. § 438(e); see also supra at 82, 84). The FEC sees the issue quite differently. Since the challenged rules merely permit conduct by others rather than “restrict ]” conduct Shays and Meehan would themselves undertake, the Commission insists its rules have caused the Congressmen no harm. Appellant’s Br. at 13.
Abundant precedent contradicts the FEC’s view. In fact, “the causation requirement for constitutional standing is met when a plaintiff demonstrates that the challenged agency action authorizes the conduct that allegedly caused the plaintiffs
Attempting to show otherwise, the FEC once again cites McConnell’s dismissal of the Adams plaintiffs. It insists that based on the Supreme Court’s holding, the only cause of Shays’s and Meehan’s asserted injury is the Congressmen’s own “choice” not to fight fire with fire by-exploiting FEC safe harbors themselves. This causation theory fails for the same reason the FEC’s injury argument fails. Whereas in McConnell the asserted injury stemmed from no law’s “operation,”
Again, substantial precedent reassures us of this conclusion — precedent McConnell never mentions, much less questions. At bottom, though dealing with the same subject-matter as that case, Shays’s and Meehan’s suit is an entirely conventional administrative law -claim, i.e., a facial ehal-lfenge to allegedly invalid regulations affecting the Congressmen’s interests. Viewed in such terms, Shays’s and Mee-han’s causation theory is unremarkable. As noted earlier, we held in ALDF, based in part on Supreme Court precedent, that “a plaintiff satisfies the causation prong of constitutional standing by establishing that the challenged agency rule permitted the activity that allegedly injured her, when that activity would allegedly have been illegal otherwise.”
Although the FEC insists this case falls outside the conventional rule because Shays and Meehan possess the same legal options as their rivals and thus could potentially benefit from the challenged rules, our case law shows otherwise. Ordinarily, of course, mimicking injurious conduct does nothing to interrupt causation: the whale-watchers in Japan Whaling could hardly protect their pastime by joining the hunt. And while here use of challenged rules could perhaps mitigate any harm to Shays’s and Meehan’s electoral prospects, the same was true in EPSA, where the disputed regulations, which allowed ex parte communication with certain third parties called market monitors, could well have helped, rather than hurt, the petitioner. There, far from suggesting that potential benefit foreclosed standing, we held that petitioner satisfied Article III because it “routinely appear[ed] before FERC in contested hearings in which market monitors have an interest,”
To illustrate the counterintuitive character of the FEC’s position, we think it worth noting that were the Commission’s causation argument correct, Shays and Meehan would never have standing to challenge the rules. Even if an opponent made express use of illegаl safe harbors, even if that use demonstrably influenced voters, and indeed even if Shays and Mee-han responded by seeking administrative enforcement and then challenging the FEC’s dismissal of their complaint — a review procedure the Commission urges the Congressmen to follow in its ripeness argument, see infra at 95-96 — the Congressmen would nevertheless lack standing. As the FEC sees it, even then, Shays’s and Meehan’s own scruples, not allegedly illegal FEC rules, would have caused their injury. Although “an inescapable result of any standing doctrine application is that at least some disputes will not receive judicial review,” Fla. Audubon,
Accordingly, finding McConnell distinguishable, and following the long line of cases holding that affected parties may challenge regulations allowing what a statute prohibits, see, e.g., Nat’l Credit Union Admin.,
This leaves only redressability. The FEC doesn’t dispute this element, nor could it, for “[wjhere an agency rule causes the injury, as here, the redressability requirement may be satisfied by vacating the challenged rule.” Ctr. for Energy & Econ. Dev. v. EPA,
Ripeness
In addition to challenging standing, the FEC argues that Shays’s and. Mee-han’s suit is unripe. A further requirement of justiciability, albeit one “ ‘drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction,’ ” ripeness “requires us to evaluate (1) the fitness of the issues for judicial decision and (2) the hardship to the parties of withholding court consideration.” Nat’l Park Hospitality Ass’n v. Dep’t of Interior,
Here, as to fitness, because this case is “purely one of statutory interpretation,” Whitman v. Am. Trucking Ass’ns, Inc.,
Making a related point, the FEC also suggests that because FECA permits judi
III.
On the merits, we undertake our analysis pursuant to two familiar standards of review: Chevron and the Administrative Procedure Act. As both sides agree, because the regulations at issue interpret statutes the FEC administers, we review them under the two-step analysis set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
Applying these standards here, we affirm the district court’s invalidation of all five rules at issue in this appeal. In reviewing each rule, we begin with Chevron step one, asking whether the rule runs counter to the “unambiguously expressed intent of Congress,” Chevron,
Coordinated Communication
FECA has long restricted coordination of election-related spending between official campaigns and outside groups. The reason for this is obvious. Without a coordination rule, politicians could evade contribution limits and other restrictions by having donors finance campaign activity directly — say, paying for a TV ad or printing and distributing posters. To avoid such subterfuge, FECA defines “contribution” to include any “expenditure[] made in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate,” 2 U.S.C. § 441a(a)(7)(B)(i), and then defines “expenditure” as any purchase, payment, loan, or gift “made ... for the purpose of influencing” a federal election, id. § 431(9)(A). Thus, if someone makes a purchase or gift with the purpose of influencing an election and does so in cooperation with a candidate, FECA counts that payment as a campaign contribution. At the same time, and as a further stopgap, FECA’s coordination provision designates any “financing ... of the dissemination, distribution, or republication” of campaign materials as an “expenditure,” and thus as a “contribution” when coordinated. Id. § 441a(a)(7)(B)(iii).
BCRA made two important changes to these provisions. First, as part of its effort to reign in party fundraising, the statute added a coordination rule for parties compаrable to the preexisting rule for candidates. See id. § 441a(a)(7)(B)(ii). Second, and more important here, Congress ordered the FEC to rewrite its regulations interpreting these provisions with respect to “coordinated communication.” See BCRA § 214(c), 116 Stat. 81, 95.
Under pre-BCRA regulations, the FEC determined whether public communications such as radio and television ads were “coordinated” based largely on whether the candidate had engaged in “substantial discussion or negotiation” with an outsider, resulting in “collaboration or agreement.” See Shays,
Acting pursuant to this open-ended directive, the FEC adopted the regulation at issue here. Under its new test, communications count as “coordinated” (and thus as contributions) if: (1) someone other than the candidate, party, or official campaign pays for them, (2) the communication itself meets specified “content standards,” and (3) the payer’s interaction with the candidate/party satisfies specified “conduct standards.” 11 C.F.R. § 109.21. Under the “content” element — the only component at issue here — communications made within 120 days of a general election or primary and “directed” at the relevant electorate may qualify as “coordinated” if they refer to a political party or “clearly identified candidate for Federal office.” Id. § 109.21(c)(4). Before the 120-day mark, the rule covers only communications that either recycle official campaign materials or “expressly advocate[ ] the election or defeat of a clearly identified candidate for federal office.” See id. § 109.21(c)(2)-(3).
According to Shays and Meehan, this limitation on the rule’s coverage outside the 120-day window offers politicians and them supporters an unreasonably generous safe harbor. Several examples should help illustrate their concerns. Under the new rules, more than 120 days before an election or primary, a candidate may sit down with a well-heeled supporter and say, “Why don’t you run some ads about my record on tax cuts?” The two may even sign a formal written agreement providing for such ads. Yet so long as the supporter neither recycles campaign materials nor employs the “magic words” of express advocacy — “vote for,” “vote against,” “elect,” and so forth — the ads won’t qualify as contributions subject to FECA. Ads stating “Congressman X voted 85 times to lower your taxes” or “tell candidate Y your family can’t pay the government more” are just fine. And even within 120 days of the election (though Shays and Meehan appear not to challenge this aspect of the rule), supporters need only avoid communications that identify candidates or parties by name. Ads regarding, say, economic effects of high taxes or tragic consequences of foreign wars are not contributions — again, even if formally coordinated with the official campaign.
The district court held that nothing in BCRA permits such content-based exclusions. Although the court rejected Shays’s and Meehan’s Chevron one argument, explaining that because BCRA ordered promulgation of new regulations while “providing] no express guidance on the matter of content restrictions,” Congress had not spoken directly to the issue, see
We reach the same result, though for slightly different reasons. Regarding Chevron step one, we agree that Congress has not spoken directly to the issue at hand. To be sure, it seems hard to imagine that Representatives and Senators
Nor do we see clearly contrary intent, as do Shays and Meehan, in FECA’s preexisting “expenditure” and “contribution” definitiоns. True, under the statute, coordinated expenditures “shall be considered to be a contribution,” so if a communication involves “expenditure” and is made “in cooperation, consultation, or concert with, or at the request or suggestion of’ a candidate or party — the provision’s two elements, see 2 U.S.C. §§ 441a(7)(B)(i), (ii)— then the FEC lacks discretion to exclude that communication from its coordinated communication rule. Yet to qualify as “expenditure” in the first place, spending must be undertaken “for the purpose of influencing” a federal election (or else involve “financing” for redistribution of campaign materials). See -2 U.S.C. §§ 431(9)(A), 441a(a)(7)(B)(iii): And as the FEC points out, time, place, and content may be critical indicia of communicative purpose. While election-related intent is obvious, for example, in statements urging voters to “elect” or “defeat” a specified candidate or party, the same may not be true of ads identifying a federal politician but focusing on pending legislation — a proposed budget, for example, or government reform initiatives — and appearing three years before the next election. Nor is such purpose necessarily evident in statements referring, say, to a Connecticut senator but running .only in San Francisco media markets.
Insofar as'such statements may relate to political or legislative goals independent from any electoral race — goals like influencing legislators’ votes or increasing public awareness — we cannot conclude that Congress unambiguously intended to count them as “expenditures” (and thus as “contributions” when coordinated). To the contrary, giving appropriate Chevron deference, We think the FEC could construe the expenditure definition’s purposive language as leaving space for collaboration between politicians and outsiders on legislative and political issues involving only a weak nexus to any electoral campaign. Moreover, we can hardly fault the FEC’s effort to develop an “objective, bright-line test [that] does not unduly compromise the Act’s purposes,” considering that we approved just such a test for “contribution” in Orloski
In our view, the challenged regulation’s fatal defect is not that the FEC drew distinctions based on content, time, and place, but rather that, contrary to the APA, the Commission offered no persuasive justification for the provisions challenged by Shays and Meehan, i.e., the 120-day time-frame and the weak restraints applying outside of it. As noted earlier, McConnell describes the express advocacy test, which bеfore BCRA distinguished advocacy subject to FECA from unregulated “issue” ads, as “functionally meaningless.”
We see nothing in the FEC’s official explanation that satisfies APA standards. The Commission’s source for the 120-day period was an unrelated BCRA provision requiring hard money financing for state party voter registration drives within 120 days of an election. See 68 Fed.Reg. at 430 (describing the 120-day period for coordinated communication as “based on 2 U.S.C. 431(20)(A)(i),” which defines such registration drives as “Federal election activity”); 2 U.S.C. § 441i(b) (restricting financing of “Federal election activity”). Drawing on this provision, the FEC explained that “Congress has, in part, defined ‘Federal election activity’ in terms of a 120-day time frame, deeming that period of time before an election to be reasonably related to that election.” 68 Fed.Reg. at 430. Yet this observation has no bearing on the issue before us absent evidence that registration activity and electoral advocacy occur on similar cycles. For all we know from this record, registration efforts may significantly influence elections only in the immediate run-up to the vote, whereas candidate-centered advertisements may affect voters even when broadcast more than 120 days before the race closes. In fact, in a companion provision to the voter registration rule, BCRA imposes even stricter financing restrictions — without temporal limitation — on “public communication[s] that refer[] to a clearly identified candidate for Federal office ... and that promote[] or support[] a candidate for that office, or attackf ] or oppose! ] a candidate for that office.” 2 U.S.C. § 431(20)(A)(iii). Although the FEC acknowledged that its 120-day content standard was “more conservative” than this provision, see
Besides citing the voter registration rule, the FEC listed two “advantages” of the 120-day time-frame: “First, it provides a ‘bright-line’ rule. Second, it focus
Taking a new tack in its briefs, the FEC now argues that BCRA itself indicates that 120 days is reasonable because a statutory provision on “electioneering communications” — ads that automatically count as “contributions” when coordinated with a candidate — includes a 30/60-day time-frame. See id. §§ 434(f)(3), 441a(a)(7)(C). The “electioneering communication” concept, discussed at greater length below, covers radio and television advertisements that (1) clearly identify a candidate or party, (2) target the relevant electorate, and (3) appear within 60 days of a general election or 30 days of a primary. See id. § 434(f)(3)(A); infra at 107 -108. Obviously similar to the content standard for the 120-day period, the . “electioneering communication” definition differs principally in that it is limited to radio and television, whereas the content standard applies to other media as well. See 68 Fed.Reg. at 429-30. Although in its explanation the FEC sought to distinguish the shorter time-frame for these communications rather than rely on it as justification for the 120-day rule, see 68 Fed.Reg. at 430, the Commission now insists that if 30-60 days is reasonable for these ads, then “the Commission’s drawing of a temporal line two to four times as far from the election for similar communications that are' coordinated is surely permissible.” Appellant’s Br. at 32-33. Even assuming this “post hoc rationalization!] for agency action” is properly before us, see Secs. Indus. Ass’n v. Bd. of Governors of the Fed. Reserve Sys.,
For one thing, the proposition that' 120 is twice 60 and four times 30, though arithmetically indisputable, is no reason to select that number over any other. Why not triple 60, or multiply 30 by one-and-a-half? Alternatively, if 30 to 60 days is too short, as the FEC indicated in its explanation, see 68 Fed.Reg. at 430, why not go all the way and apply the standard at all times, as in the “public communication” provision discussed earlier? In any event, while “electioneering” ads are clearly one category of communications that may count as coordinated expenditures under BCRA, nothing in the statute suggests they represent the only — or even primary' — -such category. Acknowledging as much, the FEC’s own rule rejects the еlectioneering definition’s time limit (expanding it to 120 from 30/60), as well as its media limitations (including print advertising and other media besides radio and TV). By the same token, nothing should prevent the FEC from regulating other categories of non-electioneering speech — non-express advocacy, for example — outside the 120 days.
Finally, the FEC points out that limiting its standard to express advocacy and campaign redistribution outside the 120 days preserves space for political activities unrelated to elections. True enough, but so would regulating nothing at all, and that would hardly comport with the statute. Notwithstanding its obligation to “attempt to avoid unnecessarily infringing on First Amendment interests,” AFL-CIO, 333
For their part, Shays and Meehan argue not only that the FEC has in fact failed to justify its standard, but also that doing so would be impossible. In support of this claim, they urge us to take judicial notice that substantial election-oriented advertising occurred beyond the 120-day window in recent presidential races, a fact that, if true, would undercut the Commission’s view that it has drawn the line in the right place. That factual assertion, however, is better directed to the FEC’s expertise, and indeed illustrates the sort of inquiry the Commission should have undertaken. Do candidates in fact limit campaign-related advocacy to the four months surrounding elections, or does substantial election-related communication occur outside that window? Do congressional, senatorial, and presidential races — all covered by this rule — occur on the same cycle, or should different rules apply to each? And, perhaps most important, to the extent election-related advocacy now occurs primarily within 120 days, would candidates and collaborators aiming to influence elections simply shift coordinated spending outside that period to avoid the challenged rules’ restrictions? The FEC must carefully consider these questions, for if it draws the line in the wrong place, its action will permit exactly what BCRA aims to prevent: evasion of campaign finance restrictions through unregulated collaboration.
In sum, while we accept the FEC’s premise that time, place, and content may illuminate communicative purрose and thus distinguish FECA “expenditures” from other communications, we detect no support in the record for the specific content-based standard the Commission has promulgated. Accordingly, finding the rule arbitrary and capricious under the APA, we shall affirm the district court’s invalidation.
“Solicit” and “Direct”
As noted earlier, one of BCRA’s main objectives is to shut down the so-called “soft money” system whereby political parties employed funds outside FECA’s controls to finance political activities related to federal elections. The “cornerstone” of this effort, McConnell,
A national committee of a political party (including a national congressional campaign committee of a political party) may not solicit, receive, or direct to another person a contribution, donation, or transfer of funds or any other thing of value, or spend any funds, that are not subject to the limitations, prohibitions, and reporting requirements of this Act.
2 U.S.C. § 441i(a)(l). The same prohibition extends to the national party committees’ officers and agents, as well as subordinate entities. See id. § 441i(a)(2). In addition, federal candidates and officehold
Shays and Meehan challenge FEC regulations interpreting “solicit” and “direct” with respect to these provisions. In effect, the Commission has interpreted both terms to mean “ask.” Under its new regulations, “to solicit means to ask that another person make a contribution, donation, transfer of funds, or otherwise provide anything of value,” whether that gift is made “directly” or “through a conduit or intermediary.” 11 C.F.R. § 300.2(m). “[T]o direct means to ask. a person who has expressed an intent to make a contribution, donation, or transfer of funds, or to provide anything of value, to make that contribution, donation, or transfer of funds, or to provide that thing of value, including through a conduit or intermediary.” Id. § 300.2(h). Thus, in the FEC’s view, fundraisers “solicit” money when they ask for it (as in, “please give to the party”) and they “direct” contributions when they ask for them following an expression of interest, such as when a donor says, “I’ve got money to burn” and the politician responds, “why not give it to XT’
Whether this interpretation is reasonable depends on the meaning of “ask.” Shays and Meehan argue that this term, as used in the regulations, requires “an outright, explicit request — ‘pliease give’ — that is contained in a single communication.” Appellee’s Br. at 28. The district court shared this view, finding it supported by the FEC’s explanatory statement that “[b]y using the term ‘ask,’ the Commission defined ‘solicit’ to require some affirmative verbalization or writing, thereby providing members of Congress, candidates and committees with an understandable standard,” Contribution Limitations & Prohibitions, 67 Fed.Reg. 69,928, 69,942 (Nov. 19, 2002). See Shays,
In its briefs, the FEC questions this reading of the regulations, even calling it a “straw man.” Reply Br. at 11. At oral argument, however, Commission counsel was unable to reassure us that the rules would cover “nuanced” situations like Shays’s and Meehan’s hypotheticals. Indeed, though pressed to represent the FEC’s views, counsel went no further than to call the Congressmen’s hypotheticals “gray area[s],” stating that he “simply can’t predict how the Commission would vote on them.” That response came as no surprise, for the FEC’s official explanatory statement abundantly supports the narrow reading that the Congressmen, like the district court, find embodied in the regulations.
During the rulemaking, commenters called the FEC’s definition “too narrow.”
The Commission was unwilling to use the far more expansive term “suggest,” for concern that such a vague term could subject persons to investigation and prosecution based on highly subjective judgments about whether a particular remark or action constituted “suggestion.” The definition of “solicit” is intended to include a palpable communication intended to, and reasonably understood to, convey a request for some action.
Id. (internal quotation marks omitted).
Although the FEC’s explanation thus suggested that statements “reasonably understood” as “asking” could qualify as such, the Commission could not have intended thereby to suggest that its rule covered indirect requests, for that interpretation would overlook the distinction the FEC drew between “ask” and “suggest.” Accоrding to the FEC, “ask” covers “direct” statements — -expressions “captured” by verbs such as “demand” and “tell” — whereas “suggest” does not. Thus, by lopping off “suggest” (as well as “recommend”) from the staff proposal and sticking just with “ask” (which the Commission deemed “essentially synonymous” with “request,” id.), the FEC eliminated the definition’s indirect component. This produced a narrowing construction, one that “mark[s] the boundary between permissible and impermissible solicitations,” id., leaving unregulated a “wide array of activity” — like the conduct in Shays’s and Meehan’s two hypothetical — that the term “solicit” could plausibly cover. Whereas “solicit” might otherwise cover coded statements, not to mention winks and nods, the FEC, by limiting its rule to “affirmative verbalization or writing,” has spared itself any need to scrutinize such exchanges. Nor will the FEC have any need to delve into “subjective” meaning indicated by context. Under the rule, it may simply determine whether the fundraiser in question made an explicit request.
Reinforcing this view, we note that the FEC’s construction of its regulations comports with the most natural meaning of “ask.” Of course, we can imagine describing Shays’s and Meehan’s hypothetical Senator as “asking” for money by saying “it’s important that the party receive $100,000,” just as we can imagine saying “my mother asked me to come home” when what she said was “I love it when you visit.” But this is hardly the most natural use of the word “ask,” which ordinarily means “to call upon for an answer” or “to make a request” — terms implying a direct question or demand, rather than a statement of fact or opinion. See Webster’s Third New Int’l Dictionary 128 (1993). Moreover, using only “ask” rather than a series of verbs would seem odd unless the FEC intended to narrow the statute’s meaning to that word’s principle definition — i.e., “calling for an answer” as opposed to “suggesting” or “indicating.”
In undertaking our Chevron step one inquiry into “whether Congress has directly spoken to the precise question at issue,” we employ “the traditional tools of statutory construction,” see Chevron,
Here, even setting context aside, we think “solicit” (if not also “direct”) more naturally connotes an indirect request than does “ask,” at least in the narrow sense of “asking” that the FEC’s rule employs. To give an example, a charity brochure on starving children might well “solicit” though it doesn’t “ask” in the sense of “calling for an answer.” Cf. Wis. Dep’t of Revenue v. William Wrigley, Jr., Co.,
Reflecting “Congress’s effort to plug the soft-money loophole,” McConnell,
The FEC’s definitions fly in the face of this purpose because they reopen the very loophole the terms were designed to close. Under the Commission’s interpretation, candidates and parties may not spend or receive soft money, but apart from that restriction, they need only avoid explicit direct requests. Instead, they must rely on winks, nods, and circumlocutions to channel money in favored directions — -anything that makes their intention clear without overtly “asking” for money. Simply stating these possibilities demonstrates the absurdity of the FEC’s reading. Whereas BCRA aims to shut down the soft money system, the Commission’s rules allow parties and politicians to perpetuate it, provided they avoid the most explicit forms of solicitation and direction.
Although this context alone satisfies us that the FEC’s narrowing construction violates congressional intent, two further considerations reassure us that Congress intended broader meanings for “solicit” and “direct.” The first is BCRA’s repeal of the “magic words” standard for issue advocacy. As noted earlier, whereas pre-BCRA law permitted unregulated financing of ads lаcking “explicit words of advocacy of election or defeat of a candidate,” Buckley,
Second, as Shays and Meehan point out, the FEC has long construed “solicit” elsewhere in FECA as covering indirect requests. While allowing corporations and labor unions to create special accounts for political activity, FECA restricts “solicitation” of contributions to those accounts. See 2 U.S.C. 441b(b)(4). Interpreting this restriction, FEC advisory opinions have held that unions and companies may solicit funds merely by praising contributors, see, e.g., FEC Advisory Op.1979-13, or even just describing contribution procedures, see, e.g., FEC Advisory Op.1999-6. As the Commission’s own campaign guide puts it, “solicitations” are not limited to “a straightforward request for contributions.” FEC Campaign Guide for Corporations and Labor Organizations at 24 (2001). Although the FEC could of course reconsider these advisory rulings, and while “solicit” could perhaps carry different meanings in different contexts, this background reinforces our sense that Congress anticipated a similarly broad construction of that term here. Cf. Toyota Motor Mfg., Ky., Inc. v. Williams,
For all these reasons, we hold that Congress has clearly spoken to this issue and enacted a prohibition broader than the one the FEC adopted. In context, BCRA’s terms “solicit” and “direct” cover indirect requests. Because the FEC’s rule, according to the Commission’s own explanation, does not, we shall affirm its invalidation. In doing so, we express no view regarding a further argument presented by Shays and Meehan — that to avoid statutory redundancy, “direct” must mean more than “ask in response,” when “solicit” means “ask” plain and simple.
Electioneering Communication
Shays’s and Meehan’s third challenge relates to the FEC’s regulatory definition of “electioneering communication”— a new BCRA concept that replaces the old “magic words” standard for issue ads. As noted earlier, in Buckley the Supreme Court, based on constitutional avoidance, construed key FEC A provisions as applying only to “communications that includе explicit words of advocacy of election or defeat of a candidate,” i.e., “magic words” such as “vote for” and “vote against.” See
The key to these new restrictions is what counts as “electioneering communication” in the first place. As a general rule, the definition covers “any broadcast, cable, or satellite communication” that (1) “refers to a clearly identified candidate for Federal office,” (2) “is made within” 60 days before a general election or 30 days before a primary, and (3) “is targeted to the relevant electorate.” 2 U.S.C. § 434(f)(3). Certain communications are then expressly exempted, among them news stories, commentary, and editorials (unless the broadcaster is controlled by a political party or candidate). See id. § 434(f)(3)(B)®. In addition, BCRA authorizes the FEC to craft exemptions, subject to certain limitations described below. Id. § 434(f)(3)(B)(iv).
In an exceedingly complex regulation, the FEC has laid out its interpretation of provisions defining “electioneering communication.” Athough the district court invalidated other aspects of this rule, only one point remains disputed: the interpretation of “made.”
Recall that BCRA’s definition applies only to communications “made within” specified time periods (i.e., 30 or 60 days before an election). Construing this phrase, the FEC’s regulation defines “made” to mean “publicly distributed,” 11 C.F.R. § 100.29(a)(2), and then defines “publicly distributed” to mean “aired, broadcast, cablecast or otherwise disseminated for a fee through the facilities of a television station, radio station, cable television system, or satellite system,” id.
The district court found that the FEC’s definition violated Congress’s clearly expressed intent under Chevron step one. We agree. In effect, the Commission has taken the three parts of BCRA’s standard — (1) candidate identification, (2) within 30 or 60 days, and (3) targeted at the electorate — and added a fourth: “for a fee.” Nothing in the statute suggests that Congress contemplated such ah element. Certainly, the word “made” carries no such connotation. When one says, “dinner is made,” the implication is that dinner exists, not that someone paid for it. Likewise here, to say a “broadcast, cable, ■ or satellite communication . is made” implies quite simply that the communication exists — i.e., that it was transmitted — not that someone paid a fee to make the transmission happen. Nor does the context add any ambiguity. To the contrary, BCRA says, “communication ... made within” a certain time-frame, i.e., 60 days before a general election or 30 days before a primary. Obviously, the temporal reference point — when the communication “is made” — is the date of transmission, for that is the point when the ad may influence the election. But given that focus, it makes no sense to say that the communication is “made” only if someone paid a fee, an event that likely occurred earlier. The. point, again, is simply that the transmission occurred.
Attempting to concoct- ambiguity, the FEC protests, “There is simply no mention of funding anywhere in the definition.” Appellant’s Br. at 41-42. True, but so what? The already capacious U.S.Code would require even more volumes if Congress could be clear only, by ruling out every possible limitation on statutory language. See, e.g., Ry. Labor Executives’ Ass’n v. Nat’l Mediation Bd.,
Of course, BCRA does permit FEC-crafted exemptions, and one might characterize this rule as such, given that it effectively excludes unpaid broadcasts from the definition. To be sure, the FEC doesn’t characterize its action this way. Instead, presumably because the district court held that the FEC’s action exceeded the plain text of BCRA’s exemption clause, see
Rather than focusing on these textual problems, the FEC’s briefs emphasize the “risk” that without its limiting construction, BCRA’s electioneering communication restrictions could chill “entertainment, educational, and documentary programs that mention or portray a federal candidate only incidentally,” as well as PSAs featuring federal candidates and “encouraging citizens to donate blood, for example.” Appellant’s Br. at 41, 42-43, 44. Although this rationale is hardly apparent in the rulemaking record, see 67 Fed.Reg. at 65,192-93 (“bas[ing]” the rule “on the legislative history of BCRA”), and although in any event we need not consider it given our Chevron one holding, we nevertheless think it worth pointing out that avoiding chilling particular types of communication could hardly justify the FEC’s broad exclusion of all unpaid broadcasts, regardless of content. Furthermore, because BCRA already includes an express exemption for “communicationfs] appearing in a news story, commentary, or editorial,” 2 U.S.C. § 434(f)(3)(B)(i), no further exemption was necessary to avoid chilling those. As for PSAs, excluding federal candidates from broadcasts promoting blood drives and other worthy causes for 90 days out of every two years (30 days before the primary plus 60 days before the general election) would hardly seem unreasonable given that such broadcasts could “associate a Federal candidate with a public-spirited endeavor in an effort to promote or support that candidate” — a risk the FEC itself acknowledged, in the very same rulemak-ing, in justifying its refusal to promulgate a general exemption for PSAs (whether paid or unpaid), see 67 Fed.Reg. at 65,202.
To sum up, as an interpretation of “electioneering communication,” the regulation contradicts BCRA’s plain text and thus fails Chevron step one. Insofar as it instead constitutes an exemption, it runs roughshod over express limitations on the Commission’s power, thus again flunking Chevron one. Accordingly, we shall affirm the district court’s invalidation of this rule.
Salary Allocation
Yet another new BCRA concept is “federal election activity” (“FEA” for short). Central to Congress’s effort to eliminate soft money influence, this concept identifies activities that state and local party organizations must finance with hard money. Among them, as mentioned previously, are voter registration drives within 120 days of an election, 2 U.S.C. § 431(20)(A)(i), and “public communications” attacking or supporting identified federal candidates (whether or not state and local candidates are also “mentioned or identified”), id. § 431(20)(A)(iii). Of
The issue before us relates to one category of FEA: salaries for employees devoting more than 25%. of their paid time to federal elections. See id. § 431(20)(A)(iv). In any month during which a state or local party employee’s work crosses the 25% threshold, the employee’s entire salary counts as FEA, thus requiring the party to pay that salary exclusively with federally regulated funds. See id. §§ 431(20)(A)(iv), 441i(b). In its regulations, the FEC faithfully implemented this restriction, declaring that such salaries “must be paid only with Federal funds.” 11 C.F.R. § 300.33(c). But the FEC also drew an inference that Shays and Meehan dispute. With respect to all other salaries, i.e., those for employees devoting 25% of their time or less to federal activities, the FEC eliminated any allocation requirement, thus freeing state and local parties to pay such employees’ salaries entirely with soft money. Id. §§ 106.7(c)(1), (d)(1), 300.33(c)(2). Thus, under the Commission’s rule, such parties may require every one of their employees to work as much as quarter time — a day a week or more — on federal elections without needing.any federally regulated funds for those salaries.
As stated in the official explanation, the FEC views this rule on salaries below the 25% mark as an “implication” of BCRA’s standard for salaries above that threshold. See Prohibited & Excessive Contributions: Non-Federal Funds or Soft Money, 67 Fed.Reg. 49,064, 49,078 (July 29, 2002). “Congress appears to have concluded,” the FEC wrote, “that salaries for employees spending 25% or less of their timé on activities in connection with a Federal election or on Federal election activities do not have to be paid from any mix of Federal funds.” Id. Shays and Meehan disagree. Absent any change in FECA’s “expenditure” definition, they argue, spending “for the purpose of influencing” federal elections, including state party salaries, must still be allocated. While holding that BCRA did not unambiguously foreclose the Commission’s rule, the district court concluded that because state parties could simply spread federal work over multiple 25%-fеderal employees, exclusive use of unregulated funds for such salaries would “compromise the Act’s purposes of preventing circumvention of its national party committee nonfederal money ban and stemming the flow of nonfederal money into activities that impact federal elections.”
First, to the extent Shays- and Meehan assert a BCRA violation under Chevron step one, we join the district court in-rejecting their position. As the district court explained, the statute “speaks only to how state, district or local political party committees should fund the activities of their employees who spend more than 25 percent of their paid time on Federal election activities.” Id. at 113. It says nothing at
The statutory context confirms this reading. No exhaustive canvass of federally-oriented electoral costs, BCRA’s FEA definition covers just four categories, all of which involve activities with combined state and federal implications that could thus be used to disguise federally-oriented activities as a state-related campaign. We have already mentioned three of the categories — above-25% salaries, voter registration within 120 days of an election, and ads attacking or supporting federal candidates in combination with state ones. See 2 U.S.C. §§ 431(20)(A)(i), (iii), (iv). The fourth comprises “voter identification, get-out-the-vote activity, or generic campaign activity in connection with an election in which a candidate for Federal office appears on the ballot (regardless of whether a candidate for State or local office also appears on the ballot).” Id. § 431(20)(A)(ii); see also id. § 431(20)(B) (exempting certain expenditures such as costs for buttons, bumper-stickers, and local party conventions from all four categories of FEA). As a general rule, BCRA requires exclusive hard money financing for each of these four activities. See id. § 441i(b)(1). The only exception, applicable only to limited types of FEA and never to above-25% salaries, is the “Levin Amendment” — a provision (described below) that permits partial financing of certain generic campaign activity with funds raised subject to special controls. See id. § 441i(b)(2); see also McConnell,
The purpose of these restrictions, as McConnell says of the 25% rule, is “prophylactic.” See
Indeed, the FEC’s rules acknowledge as much. Despite categorically exempting 25%-or-less salaries from allocation, FEC regulations continue to require that “administrative costs” be spread between hard and soft money accounts. See 11 C.F.R. § 106.7(c)(2). As the Commission explained in the very same statement promulgating the 25%-or-less rule, “nothing in BCRA or the legislative history suggests that Congress intended the Commission to
These regulations clearly rest on the same BCRA interpretation that we have articulated — that while imposing additional constraints on FEA activities, BCRA makes no change to preexisting restrictions on non-FEA expenditures. But if “nothing in BCRA” evinces congressional intent to deregulate non-FEA expenses like administrative and fundraising overhead, then neither does BCRA support exclusion of non-FEA salaries, i.e., those for employees devoting up to 25% of their time to federal elections. Cf. Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. -,
In sum, the FEC has construed a BCRA provision sweeping state activities within FECA as an excuse to punt federal activities outside it. Because this “implication” from the statute makes no sense, and because the Commission gave no other justification for its rule, the regulation exempting 25%-or-less salaries from allocation is arbitrary and capriсious. We shall therefore affirm the district court’s invalidation of this rule as well.
To be clear, because we thus rely on the APA rather than Chevron, nothing in our holding necessarily precludes the FEC from remedying deficiencies in its explanation and repromulgating this rule on remand, though we are skeptical that it may do so. Answering the district court’s concerns about potential abuse, the FEC suggested in its briefs here that state and local parties may possess neither “an incentive” nor “the necessary flexibility in their workloads and staffing” to spread federal work among under-25%-federal employees. Appellant’s Br. at 36 n. 9; see also Reply Br. at 18. But why so? Given the massive soft money sums infused into pre-BCRA elections (nearly half a billion dollars in 2000 alone), it strikes us as quite plausible that wealthy donors would swallow costs for increased state and local campaigning, were the result an army of workers devoting more than a day a week to federal elections. Should the FEC wish to adhere to its current view in future rule-making, it must summon more substantial support than the eonclusory assertions presented to us.
Levin Funds
Shays’s and Meehan’s final challenge involves an exception to an exception. As noted in the last section, although “federal election activity,” as defined in BCRA, generally requires hard money, the statute contains an exception — the “Levin Amendment.” See 2 U.S.C. § 441i(b); McConnell,
To understand the FEC’s rationale and Shays’s and Meehan’s objection, yet more detail about this complex statute is (unfortunately) necessary. First, “Levin funds” are a sort of semi-soft money. Available to state and local party organizations in sums up to $10,000 per donor per year, Levin funds are exempted from federal disclosure requirements and restrictions (though not from state law). See 2 U.S.C. § 44li(b)(2)(B)(iii); McConnell,
Thus, a typical Levin Amendment activity might involve a genеric effort by some state or local party organization to register voters and turn them out for an election where both state and federal offices are at issue. The party entity could finance that activity in part with money raised in $10,000 contributions. Usual hard money requirements would not apply, but, as noted earlier, the party would need to “allocate” the vote drive’s costs between hard money accounts and the “Levin funds” raised in these up-to-$10,000 donations.
By what criteria do parties “allocate”? Presumably the goal is to approximate the relative state and federal components of the activity (assigning Levin funds to the former and hard money to the latter), but much as with the “coordinated communication” issue discussed earlier, BCRA leaves the question open. That is, rather than prescribing allocation rules itself, BCRA simply refers to “regulations prescribed by the Commission.” 2 U.S.C. § 441i(b)(2)(A). So the Commission promulgated rules, and these rules, in addition to providing guidance on allocation, include the $5,000 “de minimis” exemption at issue in this appeal.
Our cases recognize that agencies may promulgate de minimis exemptions to statutes they administer. See, e.g., Ass’n of Admin. Law Judges v. FLRA,
Apparently attempting to satisfy these requirements, the FEC gave three reasons for its exemption here. First, the Commission attempted to show that the Levin allocation rule is not “extraordinarily rigid.” See 67 Fed.Reg. at 49,097 (observing that “the reporting requirements for Federal election activity contain an exception for activity below $5,000 in the aggregate in a calendar year” and therefore concluding that “Congress did not take a rigid approach to low levels of Federal election activity”) (citing 2 U.S.C. § 434(e)(2)(A)). We need not consider that argument, however, for even if the FEC is correct on this point, its remaining two rationales give no assurance that exempted spеnding — i.e., Levin expenditures totaling $5,000 or less in a given year for a given party organization' — is in fact de minimis.
In the first of the two remaining rationales, the FEC observed, “[T]he Commission is particularly sensitive to the nature of the Federal election activity to which this provision applies: Grassroots activities for which references to Federal candidates are prohibited.” 67 Fed.Reg. at 49,097. “There is a far weaker nexus,” the Commission went on, “between Federal candidates and this category of Federal election activity than other types of Federal election activity for which Levin funds are prohibited.” Id. The FEC’s point, we take it, is that the Levin Amendment includes only “grassroots” FEA categories (e.g., voter registration drives and generic party campaigning), and that as such, the included FEA categories involve a “weaker nexus” with federal candidates than those that Congress excluded (e.g., over-25% salaries and public communications referring to specific candidates).
Although this distinction may explain the pattern of included and excluded FEA types — an issue we need not address— Congress’s rationale for including activities in the Levin Amendment obviously affords no justification for excluding them from Levin allocation, the very form of regulation Congress chose. See Public Citizen,
The FEC’s final rationale fares no better. Observing that $5,000 is only half of $10,000, the amount each Levin contributor may “donate (subject to State law) to each and every State, district, and local party committee,” the Commission declared: “[T]here is no danger that allowing a committee to use entirely Levin funds for allocable Federal election activity that aggregates $5,000 or less in a calendar year will somehow lead to circumvention of the amount limitations set forth in [the statute].” 67 Fed.Reg. at 49,097. This is certainly true. A party with only $5,000 total expenditures can hardly evade the $10,000 “amount limitation” on contributions. Id. But the point of Levin allocation — the subject-matter of this exemption — is to restrict spending, not donations. Specifically, allocation requires state parties to raise hard money for the federal component of mixed-purpose activities, despite using Levin funds for the remainder. Thus, again, to establish that some level of FEA spending — whether $5,000, $50,000, or $500 — is de minimis, the FEC must demonstrate that efforts below that level have “trivial or no” impact on federal elections. See EDF,
Thus, even assuming the Levin Amendment is flexible enough to permit de min-imis exclusions, the record here presents no coherent justification for the specific exemption the FEC chose. Accordingly, the Commission’s action again falls short of APA standards, so again we shall affirm the district court’s invalidation.
IY.
As the Supreme Court (rather fatalistically) observed in McConnell, “Money, like water, will always find an outlet.”
So ordered.
Dissenting Opinion
dissenting.
I dissent from the majority opinion because I believe the appellees lack standing to bring this action under Article III of the United States Constitution. In McConnell v. FEC,
First, a plaintiff must demonstrate an “injury in fact,” which is “concrete,” “distinct and palpable,” and “actual or imminent.” Second, a plaintiff must establish “a causal connection between the injury and the conduct complained of-the injury has to be ‘fairly trace[able] to the challenged action of the defendant,*116 and not ... th[e] result [of] some third party not before the court.’ ” Third, a plaintiff must show the “ ‘substantial likelihood’ that the requested relief will remedy the alleged injury in fact.”
First, the majority finds standing based on the “procedural rights” cases. Under the procedural rights doctrine, courts have lowered the standing bar somewhat “in cases in which a party ‘has been accorded a procedural right to protect his concrete interests’” before an agency so that “the primary focus of the standing inquiry is not the imminence or redressability of the injury to the plaintiff, but whether a plaintiff who has suffered personal and particularized injury has sued a defendant who has caused that injury.” Fla. Audubon Soc’y v. Bentsen,
In Electric Power, EPSA had standing to challenge the regulation because it was “seeking to enforce procedural requirements designed to protect [its] concrete interest in the outcome of hearings to which EPSA is a party.”
First, in the procedural rights cases, the courts have found a party has standing to challenge an agency decision which deprives the challenger of a procedural right that the Congress intended to protect in proceedings before the same agency. See Committee for Full Employment v. Blumenthal,
Second, even assuming candidates could have standing to challenge an agency proceeding based on a procedural right available and violable only in a future election campaign, BCRA accords no such special right to the appellees or to any other candidate.
•To support a candidate’s standing to challenge a campaign finance law violation under the procedural rights doctrine, the majority cites the example in Defenders of a landowner who has a procedural right to challenge an agency’s failure to prepare an environmental impact statement regarding a proposed dam on land adjacent to his own. But there is a key distinction. The landowner has a concrete, particularized claim — beyond the general public’s — to the interest which the environmental assessment requirements were designed to protect: his particular corner of .the environment may be adversely affected by the dam because of its proximity. Thus, he has standing “even though he cannot establish with any certainty that the statement will cause the license to be withheld or altered, and even though the dam will no't be completed for many years.” Defenders of Wildlife,
Finally, to the extent that BCRA creates any procedural protections (and I would be reluctant to characterize BCRA’s disclosure, recordkeeping and reporting requirements as “protections” for candidates), it is not the regulations’ procedural requirements that cause the appellees’ alleged injuries but rather the purported relaxation of BCRA’s substantive restrictions on contributions and expenditures. See supra p. 116 (quoting from the appellees’ declarations).
In addition to the procedural rights cases, the majority also finds standing based on a line of cases establishing “the rule ... that when [a] particular statutory provision invoked [ ] reflects] a legislative purpose to protect a competitive interest, the injured competitor has standing to require compliance with that provision.” Hardin v. Ky. Utils. Co.,
First, as I just explained, BCRA does not “reflect a legislative purpose to protect a competitive interest” of the appellees; for the provisions the appellees seek to enforce are “in no wаy concerned with protecting against competitive injury.” Hardin,
Second, the Commission’s regulations have not caused the appellees a competitive injury. In Association of Data Processing Serv. Orgs. v. Camp,
In McConnell, the “Adams plaintiffs” alleged their candidates suffered a “competitive injury” from section 307 of BCRA which increased the ceiling on certain individual contributions, unconstitutionally in their view. As injury they alleged that under section 307 their candidates would be at a “ ‘fundraising disadvantage’ ” given that they “ ‘d[id] not wish to solicit or accept large campaign contributions as permitted by BCRA’ because ‘[t]hey believe such contributions create the appearance of unequal access and influence.’ ”
In the absence of either of the two established bases for competitive standing— increased competition and competitive advantage/disadvantage — the only competitive “injury” the majority identifies is the vague, hypothetical and novel “intensified competition” injury, maj. op. 86 (emphasis original). Specifically, the majority cites regulations permitting unrestricted coordinated expenditures to be made more than 120 days before an election and relieving non-federal political party committees from allocating expenses for employees devoting less than 25% of their time to federal election activity between federal and non-federal expenditures. These regulations do not, as the majority states, require the appellees to “respond to a broader range of competitive tactics” or to “account for additional practices.” Maj. op. 86 (emphases added). Even under the appellees’ interpretation, BCRA indisputably permits both soft-money-funded coordinated expenditures and use of non-federal committеe employees for federal election activity; the regulations simply permit more of these same activities than the appellees believe BCRA authorizes. How these regulations “intensify” the ap-pellees’ competition, whether and to what extent rival candidates may avail themselves of the so-called “safe harbors” or their increased use of them will affect the outcome of the appellees’ reelection campaigns, is anyone’s guess. Notably, neither the appellees nor the majority cites any instance when the safe harbors were exploited to a candidate’s detriment in the 2004 election campaigns. In short, the majority’s “intensified competition” is precisely the sort of vague and speculative injury that Article Ill’s case or controversy requirement forbids.
Third, the majority’s competitive standing theory fails because, as the district court noted, the appellees did not allege a specific competitive injury in their declarations or elsewhere. See Shays v. FEC,
Finally, the majority is simply wrong if it means to suggest that the two congressmen have standing solely because they are “directly regulated parties,” maj. op. 94. The appellees claim injury not from any regulation of their activities under BCRA
Notes
. I know of no authority to support the majority’s suggestion, maj. op. 88-89, that if the appellees come within BCRA’s "zone of interests” for prudential standing'under the APA — • a requirement the majority acknowledges is '[n]ever especially demanding,' ” maj. op. 83 (quoting Amgen, Inc. v. Smith,
. The majority offers no support for its bald statement that BCRA “specifically protects the interest in fair reelection contests that Shays and Meehan assert.” Maj. op. 89 (emphasis added).
. In this respect, the majority's characterization of Defenders’ persons living "at the other end of the country” as "a far cry from” from the appellees is wrong. See maj. op. 87 - 88. The appellees are in the same position as any voter and have no more personal stake in enforcing BCRA than Defenders’ remote landowner would in enforcing environmental assessment requirements.
. In the past we have consistently viewed competitor standing in the political arena with skepticism. See Gottlieb v. FEC, 143 F,3d 618, 620 (D.C.Cir.1998) ("As to Ameri-PAC's 'political competitor' theory, we have never completely resolved this 'thorny issue.' " (quoting Common Cause v. FEC,
. In Clarke v. Secs. Indus. Ass'n,
. I do not agree with the majority that under this view “Shays and Meehan would never have standing to challenge these rules,” not even under FECA’s judicial review provision, 2 U.S.C. § 437g(a)(8), which permits a private party to challenge in the district court the Commission’s decision not to enforce FECA. See maj. op. 94. This provision does what BCRA does not; once an actual campaign finance violation has been alleged, it confers on a complainant a procedural right to have the FEC review it. If the FEC offends the right, the party has standing to seek redress in court.
