[00:00:01] Speaker 00:
Case number 17-5049, Citizens for Responsibility and Ethics in Washington and Melania T. Stone for the Appellant versus Federal Election Commission.

[00:00:13] Speaker 00:
Mr. McPhail for the Appellant.

[00:00:16] Speaker 00:
Mr. Slayer for the Appellate.

[00:00:58] Speaker 02:
Good morning, Your Honors, and may it please the Court.

[00:01:01] Speaker 02:
The question here is whether the FEC's discretionary choice not to pursue enforcement against an organization that the agency admits committed obvious violates of the law works not only to stop FEC but blocks my clients from bringing a suit in their own name at their own expense to protect their own rights under the FECA.

[00:01:23] Speaker 02:
The answer to that question is no.

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This federal law provides that a complainant to the FEC may bring a civil action in their own name to remedy violations alleged in a complaint to the agency if the agency dismisses.

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Before they can bring that suit, the court must review the agency's dismissal and find that it was contrary to law to find no reason to believe or no probable cause to believe a violation occurred.

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The district court below misapplied that standard and found the FEC's decision there was no reason to believe a violation occurred here could be justified by the agency's prosecutorial discretion.

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In other words, the agency's desire to avoid litigation risk and even the most minimal of expenses justified its finding no reason to believe the organization here, CHGO, violated the law.

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of ruling which affected not only FEC's enforcement, but prohibits my clients from bringing a suit to enforce their own rights.

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Indeed, the record here shows CHDO engaged in wanton violations of the law.

[00:02:24] Speaker 01:
If you were to get a determination by the district court that the FEC's no reason to believe decision was contrary to law, for example, if you were to get that on remand from this court, what next?

[00:02:41] Speaker 02:
Well, the law provides that the FEC has 30 days to decide whether to conform with that declaration or whether not to.

[00:02:49] Speaker 02:
If the FEC chooses in that situation that it will go forward and enforce, then the FEC would proceed with its investigation, proceed with conciliation, or whatever else it chooses to do in its discretion.

[00:03:01] Speaker 02:
But if the FEC chooses out of its discretion not to enforce, the law provides my clients the right to bring a suit in their own names to protect their own rights.

[00:03:10] Speaker 01:
What relief would you be able to get?

[00:03:12] Speaker 02:
I think, Your Honor, we were suing primarily to resolve our injury, informational injury we suffer, through the fact that we do not know and voters do not know who is behind the roughly $4 million that were spent in numerous federal elections to benefit the number of candidates who are still in office today and who still run for office.

[00:03:33] Speaker 02:
we would ask that that information be disclosed either through discovery or as an enforcement mechanism to our clients.

[00:03:42] Speaker 06:
This is obviously an odd and I think unique provision the way this citizen suit provision is structured and the question I think at the heart of this for me is an exercise of prosecutorial discretion

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almost by definition means, yeah, you might have violated the law, but we're not going to enforce it.

[00:04:05] Speaker 06:
We're not going to deport you.

[00:04:06] Speaker 06:
We're not going to prosecute you, whatever the exercise of discretion might be.

[00:04:11] Speaker 06:
That's been part of our tradition forever, exercises of prosecutorial discretion.

[00:04:17] Speaker 06:
So how can you say a particular exercise of prosecutorial discretion

[00:04:22] Speaker 06:
is itself contrary to law as a general proposition?

[00:04:27] Speaker 02:
Two points to that, Your Honor.

[00:04:29] Speaker 02:
One, we recognize that is actually the problem in the FTC's position here.

[00:04:33] Speaker 02:
They require my clients to show cross-court discretion is now contrary to law, which is simply not a standard or question you could ever meet.

[00:04:41] Speaker 02:
For example, the court below would require Mike Bianson.

[00:04:44] Speaker 06:
Right.

[00:04:44] Speaker 06:
I mean, that is the – that is – that's kind of a broader question, I suppose.

[00:04:49] Speaker 06:
How can it be contrary to law unless it's exercised, for example, on religious grounds or racial grounds or some kind of impermissible motive?

[00:04:58] Speaker 06:
But when you're just saying, yes, someone's – and I'll use the immigration context – someone's here in the country illegally, but we're going to exercise their discretion not to deport them,

[00:05:11] Speaker 06:
Is that contrary to law?

[00:05:13] Speaker 02:
In those situations, that would not be.

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But the FECA has a particular statute which says the FEC has faces two questions.

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First, whether it's reasonable or whether it's probable cause to believe a violation occurred.

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And the FECA provides, if it answers either of those questions in the affirmative, it must investigate or it must conciliate.

[00:05:31] Speaker 06:
Right.

[00:05:31] Speaker 06:
It says shall on those parts, right?

[00:05:34] Speaker 06:
That is correct, Your Honor.

[00:05:36] Speaker 02:
But then shall disappears on some of the later

[00:05:39] Speaker 02:
It's true, but we were here at that first stage.

[00:05:41] Speaker 02:
And clearly, because Congress provided this citizenship backup, the idea there was if the agency makes an incorrect judgment on the reasonably or probable cause standards, that that question would go before judicial review, which courts have done.

[00:05:54] Speaker 06:
Sorry to interrupt.

[00:05:55] Speaker 06:
I didn't mean to interrupt there.

[00:05:58] Speaker 06:
I'm interested when you said, Congress, what they were thinking.

[00:06:01] Speaker 06:
What were they thinking?

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Do we know what they were thinking in this provision?

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It strikes me as the classic compromise, where someone wanted a citizen suit provision like some of the others, and someone said, whoa, let's not have it exactly like the others.

[00:06:13] Speaker 06:
Do we know what was going on?

[00:06:14] Speaker 02:
Well, we do know there were actually a number of amendments happening.

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So the legislative history is scattered, and a lot of different amendments were happening at the time.

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But we do know Congress was concerned about under enforcement and lack of enforcement.

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And so Congress provided in this amendment two backups.

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One is just for review, and secondly is the ability to bring citizen suits.

[00:06:34] Speaker 06:
But then someone else must have been concerned about over-enforcement by citizen suits, because it's not like the environmental citizen suit provisions or some of the others that are the EEOC citizen suit.

[00:06:47] Speaker 02:
Well, we see no evidence of a back and forth in legislative history there.

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But you are right.

[00:06:51] Speaker 02:
The FECA provides a unique citizen suit provision, provides the FEC unique authority over those suits, recognizing the special area the FEC regulates, and that the FEC has the ability to review civil complaints.

[00:07:04] Speaker 02:
and decide on the merits whether that complaint raises reasonably.

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That is unique among agencies.

[00:07:10] Speaker 01:
Is it your position that a way that prosecutorial discretion was contrary to law, exercised contrary to law in this case, was that unlike the example that we've been discussing where you say, well, this person is deportable, they violated the law, but we're not going to deport them,

[00:07:28] Speaker 01:
It's more like a situation where the government looks and says, oh, well, just because this person committed a felony, that doesn't make them a priority for deportation, when, in fact, the law says otherwise.

[00:07:41] Speaker 01:
So that it's exercise of discretion, but on top of an actual legal error about, in this case, what constitutes a political committee.

[00:07:50] Speaker 01:
So that's a little different from just saying, we've got a bunch of cases, we're assessing them all accurately, but we're making judgment calls.

[00:07:58] Speaker 01:
And I take that to be really the heart of your position, that there is legal error at step one, step two, step three.

[00:08:08] Speaker 02:
We definitely start there is legal error below on the merits on what is a political committee.

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The question is identified.

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The FEC's argument essentially is that error is irrelevant because no question of law addressed commanded any results.

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And that, essentially, it looked at the law and said, this is too hard and not worth our time.

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And because of that, we are not going to enforce.

[00:08:30] Speaker 02:
And the position is, that judgment means not only will they not enforce.

[00:08:34] Speaker 02:
But prosecutors do that every day.

[00:08:35] Speaker 02:
Yeah.

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We understand.

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And more than that, the agencies, prosecutors have priorities and limited resources, necessarily.

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And they devote their resources, the ones they have, to the priorities that they set.

[00:08:53] Speaker 04:
And so if the only explanation for the FEC not going forward is that we have priorities and we don't have the resources to deal with this particular thing in the past, particularly since the organization is now defunct, why is that contrary to the law?

[00:09:12] Speaker 04:
I don't understand that.

[00:09:14] Speaker 02:
Well, the reason is twofold.

[00:09:15] Speaker 02:
First, we don't dispute the fact the agency has prosecutorial discretion.

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Courts have recognized that we were here today asking for this court.

[00:09:23] Speaker 04:
That's not my question.

[00:09:23] Speaker 04:
My question is why is that, in the hypothetical I just gave you, which is really this case, why is that contrary to law?

[00:09:30] Speaker 02:
It's contrary to law because the FICA's contrary to law question asks whether it's decision on the merits, whether it's reason to believe or probable cause to believe is contrary to law.

[00:09:39] Speaker 02:
It's a merits analysis.

[00:09:41] Speaker 04:
But prosecutorial discretion is part of the law, isn't it?

[00:09:45] Speaker 02:
Crossword discretion is not a substantive part of the law.

[00:09:47] Speaker 02:
That would not be formed.

[00:09:49] Speaker 04:
What do you mean by substantive?

[00:09:50] Speaker 04:
Where does it say in the statute it's got to be substantive?

[00:09:54] Speaker 02:
Well, the initial and previous sections leading up to the contract law provision provide the two questions the FEC needs to answer, whether it's reason to believe or probable cause to believe.

[00:10:03] Speaker 02:
And those are substantive questions.

[00:10:04] Speaker 02:
Those are questions about the merits, questions about the activities of the respondent.

[00:10:08] Speaker 02:
And if the FEC finds there is reason to believe or probable cause to believe, it orders the FEC, you shall investigate.

[00:10:15] Speaker 02:
And so when the statute asks whether the decision was contrary to law, it's asking whether the agency made the correct decision on the merits.

[00:10:23] Speaker 06:
Now, we don't know.

[00:10:23] Speaker 06:
I'm just not sure about that.

[00:10:25] Speaker 06:
I mean, I understand your position.

[00:10:28] Speaker 06:
But I think it says whether the dismissal of the complaint or the failure to act is contrary to law doesn't necessarily mean, although I understand your point to the contrary, it doesn't necessarily mean that the legal reasoning

[00:10:45] Speaker 06:
that the agency relied on was flawed.

[00:10:50] Speaker 06:
Tell me why that's not the right reading of this.

[00:10:54] Speaker 06:
In other words, to say that dismissal is contrary to law.

[00:10:59] Speaker 06:
It seems different than saying some of the legal analysis of a statute in question is wrong.

[00:11:06] Speaker 02:
Well, I think, one, the text provides that indication.

[00:11:10] Speaker 02:
But two, that has been the practice of every court reviewing an FPC dismissal.

[00:11:14] Speaker 02:
It has looked to the merits analysis of the FPC to decide whether it properly reached a conclusion there was often no reason to believe a violation occurred.

[00:11:24] Speaker 01:
So are you saying that's the difference between sort of Heckler versus Cheney prosecutorial discretion, where there is no law to apply, and Eakins, where the Supreme Court has told us that under the FICA, it's not that kind of unbounded prosecutorial discretion.

[00:11:42] Speaker 01:
elements there that are going to be subject to judicial review.

[00:11:47] Speaker 02:
That is correct.

[00:11:47] Speaker 02:
Akins does expressly reject the argument of the FEC of its possible discretion under heckler affecting the review.

[00:11:54] Speaker 02:
And in fact, in that case where the court was reviewing a non-enforcement decision of the FEC, the court went on to review the decision on the merits.

[00:12:03] Speaker 02:
And this court sitting on Bonk reviewed that decision on the merits and did so in a way that provided no deference to the FEC at all.

[00:12:11] Speaker 02:
The point is we do not dispute the FEC has cross-border discretion.

[00:12:14] Speaker 02:
The point is that a contrary to law finding has no impact on that discretion.

[00:12:18] Speaker 02:
A contrary to law finding by court does not order the FEC to investigate any further.

[00:12:22] Speaker 01:
If the district court had found that the FEC acted contrary to law in its

[00:12:34] Speaker 01:
all three of its votes, because it was acting on an incorrect understanding of what constitutes a political committee according to its own law, its own regulations, and sent it back.

[00:12:53] Speaker 01:
The FEC has a choice, then, whether or not to take corrective action.

[00:12:58] Speaker 01:
No?

[00:12:58] Speaker 02:
That's correct.

[00:12:59] Speaker 02:
And I want to reserve some time, but I want to answer your question.

[00:13:01] Speaker 02:
We'll give you time.

[00:13:03] Speaker ?:
Thank you.

[00:13:04] Speaker 02:
That is exactly correct.

[00:13:05] Speaker 02:
The FECA provides FEC 30 days to decide what to do.

[00:13:09] Speaker 01:
And then it could exercise prosecutorial discretion in the sense of, yeah, we see.

[00:13:15] Speaker 01:
Maybe this is a political committee.

[00:13:16] Speaker 01:
There's reason to believe it is.

[00:13:18] Speaker 01:
But we've got other priorities.

[00:13:20] Speaker 02:
It could do that.

[00:13:21] Speaker 02:
And what the statute provides in that case, then my clients can bring a suit in their own name and protect their own rights.

[00:13:27] Speaker 02:
The FEC does not have to devote any resources.

[00:13:30] Speaker 02:
It does not want to devote to this case.

[00:13:31] Speaker 01:
So but the FEC then is, a court can find the FEC is acting contrary to law even when it is the sum of a correct legal decision and a permissible exercise of discretion lead it to decide not to go forward.

[00:13:50] Speaker 02:
Well, the result would be the court would say that it is contrary to law to dismiss this complaint.

[00:13:56] Speaker 02:
It's contrary to law to find there's no reason to believe here a violation occurs, because if they applied the law correctly and found reason to believe, the statute explicitly provides it must investigate, it shall investigate.

[00:14:07] Speaker 02:
If it chooses not to, that is violating the FECA, and my clients can bring their own suit.

[00:14:12] Speaker 01:
So it doesn't have discretion not to go forward.

[00:14:14] Speaker 01:
It has discretion, but in so doing, it would be contrary to law.

[00:14:19] Speaker 01:
You have a suggestion in your brief, which I find extraordinary and quite contrary to your position, if I may say so, which is that the FEC would be acting in contempt if it did not investigate in that situation.

[00:14:33] Speaker 02:
Well, in a situation where the court provided, say, made it an error of law, it said that the FICA was unconstitutional and it wasn't going to enforce the FICA at all.

[00:14:44] Speaker 02:
The court said that is not the case.

[00:14:46] Speaker 02:
And then the FEC refused to correct that decision and went forward with that error.

[00:14:50] Speaker 01:
But I thought that was just the situation we were discussing.

[00:14:53] Speaker 01:
And maybe I'm missing something.

[00:14:54] Speaker 01:
But if the FEC applies a correct understanding of what's a political committee,

[00:15:01] Speaker 01:
and says within its 30 days, I know the statute says shall, but that can't be taken seriously.

[00:15:07] Speaker 01:
We have too many different priorities, and this is not one of them.

[00:15:10] Speaker 01:
Because statute of limitations, because defunct, we're gonna look at some other things.

[00:15:15] Speaker 01:
And your view is, yes, and the statute has a salutary citizen supervision, so there's this contrary law finding, no insult on the FEC, you get to go forward.

[00:15:26] Speaker 01:
That makes sense to me, but the notion, I thought you were saying that they would be in contempt.

[00:15:31] Speaker 02:
No, Your Honor, that was a specific situation where they commit an error of law, they apply the wrong standard, they do something expressly, violation of a court order, essentially.

[00:15:44] Speaker 02:
Then, if they went back and commit that same error, flagrant error in the face of the court order correcting it, that, I think, would be contempt.

[00:15:52] Speaker 06:
What do you think is the most egregious error of law they committed in this case?

[00:15:56] Speaker 02:
I hate to limit you, but how about two, then?

[00:16:01] Speaker 02:
There's a number.

[00:16:01] Speaker 02:
On the actual merits analysis, the most egregious error is they found the only expenses that could be counted towards a group be considered a political committee.

[00:16:11] Speaker 02:
Excuse me, there's a jumble of words there.

[00:16:14] Speaker 02:
were expenses they paid for independent expenditures, only airing and producing of those.

[00:16:19] Speaker 02:
They excluded all sums, categorically all sums spent on electioneering communications, which Judge Cooper recently ruled was expressly contrary to law, that did not follow from the Buckley decision.

[00:16:30] Speaker 02:
So they excluded, without any real analysis, significant sums of money this group spent to elect candidates to federal office.

[00:16:38] Speaker 02:
Exclude that from the analysis of whether this group was a political committee.

[00:16:41] Speaker 02:
If you include even a minimal amount of the money that those groups spent, that's in dispute.

[00:16:46] Speaker 02:
This group, CHDO, indisputably qualifies as a political committee and should have reported to its donors.

[00:16:51] Speaker 01:
And the purpose evidence is striking.

[00:16:55] Speaker 01:
You're not pointing to that.

[00:16:56] Speaker 02:
The purpose of it is striking.

[00:16:58] Speaker 02:
You're right.

[00:16:58] Speaker 02:
There is a second error.

[00:17:00] Speaker 02:
There's a number to balance out here.

[00:17:03] Speaker 02:
That if a group is formed for the purpose of electing candidates, then it is also political committee, regardless of how much money it spends.

[00:17:11] Speaker 02:
And here we have documents from the organization admitting it's formed to raise money and spend money on federal elections.

[00:17:18] Speaker 02:
And that's exactly what it did.

[00:17:21] Speaker 02:
And that itself qualifies it as a further provision.

[00:17:23] Speaker 06:
Thank you, Judge.

[00:17:25] Speaker 06:
Now, on the law, when the agency's applying a law, do we, in reviewing the agency's determination under this contrary to law provision, as you see it, give any deference to the agency's interpretation of the law?

[00:17:39] Speaker 02:
If I can ask, are you referring to the contrary law question itself or to the merits analysis?

[00:17:44] Speaker 02:
The merits analysis.

[00:17:45] Speaker 02:
That's a question under Chevron doctrine.

[00:17:48] Speaker 02:
We've argued that you do not receive Chevron deference, and there's a number of reasons for that.

[00:17:54] Speaker 02:
Judge Cooper, in a very similar case, addressed this question.

[00:17:56] Speaker 06:
Put aside the Chevron label.

[00:17:58] Speaker 06:
Just in assessing this, in the prosecutorial context, they're assessing

[00:18:06] Speaker 06:
They're not issuing a regulation.

[00:18:08] Speaker 06:
They're saying, do we want to go forward and pursue this when we have an arguably ambiguous law?

[00:18:16] Speaker 06:
Put aside this case.

[00:18:19] Speaker 06:
Do we then give some deference to them on that and say, well, we would read the law differently, but we understand why the agency read it the way it did, and therefore we can't say that its decision not to go forward was, quote, contrary to law?

[00:18:33] Speaker 02:
Well, I think that question would have to be answered under the Chevron Doctrine.

[00:18:37] Speaker 02:
So the FTC looked at the law and said, we think under the reading, the activity here was not illegal.

[00:18:44] Speaker 02:
And the court disagreed with that.

[00:18:47] Speaker 02:
What deference had to apply to the FTC would be dictated by the Chevron Doctrine.

[00:18:52] Speaker 06:
I don't want to use the Chevron label here, because I think it's coming up in a different context.

[00:18:56] Speaker 06:
Really, put aside Chevron, just on the structure of the statute.

[00:19:01] Speaker 06:
Does it make sense to give some deference to the agency's interpretation of the underlying legal merits or not?

[00:19:08] Speaker 02:
Well, on the actual merits from a defax, what happened?

[00:19:12] Speaker 06:
On the statutory structure.

[00:19:13] Speaker 02:
Statutory structure, often no, especially in cases like this where the actual statement being reviewed is a statement of only three commissioners who are not a majority of the agency.

[00:19:23] Speaker 02:
They don't speak for the FEC.

[00:19:25] Speaker 02:
They only speak on their own behalf of why they voted the way they did on the reason to believe finding.

[00:19:29] Speaker 02:
And that's the question on review of whether they got that vote on the reason to believe question correct.

[00:19:35] Speaker 01:
And what's your view on when the error happened?

[00:19:41] Speaker 01:
vote against reason to believe, second vote against reason to believe, third vote, or all three?

[00:19:47] Speaker 02:
We think there was an error definitely in the first vote, and it carried through on the political committee question.

[00:19:52] Speaker 02:
The way it works, that we have no knowledge of what's happening at the agency until after it's fully completed.

[00:19:58] Speaker 02:
So we have no opportunity to seek judicial review or any correction of that error until the full procedure is completed with the agency.

[00:20:06] Speaker 02:
That error appeared in the first statement of reasons, the first vote, and carried through.

[00:20:10] Speaker 02:
through all the votes.

[00:20:12] Speaker 01:
And does that make a difference to you in terms of the reasonableness of the decision, the exercise of prosecutorial discretion at the end of the day not to go forward given that the limitations period was

[00:20:29] Speaker 01:
drawing nigh and the organization was defunct?

[00:20:33] Speaker 02:
It is our position that the discretion the agency has has no bearing on the contrary to law analysis.

[00:20:38] Speaker 02:
The contrary to law analysis is a merits question.

[00:20:40] Speaker 02:
But if the court were to find that it has to review the discretion to decide whether it thought it was reasonable, we think that definitely would be a factor to consider.

[00:20:47] Speaker 02:
That the error that happened in the beginning, if they corrected that error in the beginning, we would not have run up against these problems.

[00:20:53] Speaker 02:
But the very difficulty that inquiry counsels against the court looking to that discretion and judging the discretion on the contrary to law analysis.

[00:21:02] Speaker 02:
Because we agree, the FD has discretion.

[00:21:03] Speaker 02:
And we agree, we cannot order it to go forward or go back and redo its investigation.

[00:21:08] Speaker 02:
We cannot order it to spend more money.

[00:21:10] Speaker 02:
And it's not the relief we're asking for here.

[00:21:11] Speaker 01:
What's your position on the vendor payments point that the commission makes?

[00:21:19] Speaker 02:
Our position is that at least some of that money should absolutely have counted towards finding these groups of political committees.

[00:21:26] Speaker 02:
One of the vendors, New Day, their commission was paid for on a per ad basis.

[00:21:31] Speaker 02:
So you can actually find out how much money that commissioner was paid, that vendor was paid per ad that ran.

[00:21:39] Speaker 02:
And so our position, and it reports with the FTC's position, money spent to create an air and ad

[00:21:44] Speaker 02:
is money spent on that ad.

[00:21:46] Speaker 02:
And the fact that it was paid to a vendor as a commission is irrelevant.

[00:21:52] Speaker 04:
This lawsuit constitutes disclosure.

[00:21:55] Speaker 04:
What additional disclosure would result from your victory in this case?

[00:22:02] Speaker 04:
Well, the disclosure we're seeking- All the material that the FEC assembled is now spread before the world for anybody that's interested.

[00:22:13] Speaker 02:
That is not the case, Your Honor.

[00:22:15] Speaker 02:
Through all the materials that have been released, the identities of the contributors, the information that FECA requires to disclose is redacted.

[00:22:21] Speaker 02:
And no one knows still who the contributors are.

[00:22:25] Speaker 01:
Is there any precedent for finding contrary to law in ultimate after a final decision of the commission based on failure at an earlier stage to go forward with investigation?

[00:22:41] Speaker 02:
If I understand the question,

[00:22:46] Speaker 02:
I'm not sure.

[00:22:47] Speaker 01:
One way of looking at it, one way that I thought you were characterizing is they make an error early and the error then is part of what leads to the delay and part of what allows this organization to slip away into the night.

[00:23:01] Speaker 01:
And if that is the case, but as you say, you're only allowed to look at it at the end of the day when all of those things are fait accompli.

[00:23:09] Speaker 01:
Is there any precedent that has looked at that problem and dug back, not just looking at the decision to dismiss the case at the end of the day, but look back at the earlier stage when the road forked and the agency, in your view, made a contrary law decision not to investigate?

[00:23:31] Speaker 02:
I'm not sure there's any precedent where there'd be an early error that was either corrected or somehow was not still present at the end of the case.

[00:23:39] Speaker 02:
But once the case becomes public and once it's completed and we learn, if they say dismissed one of our claims early on and failed to find a reason to believe, we would have every right to argue that that was judicial error, even if it happened years ago in the FEC proceeding.

[00:23:55] Speaker 06:
The FEC's brief characterizes your position as saying that all FEC discretionary dismissals should be deemed contrary to law.

[00:24:05] Speaker 06:
Is that your position?

[00:24:07] Speaker 02:
It is our position, but it's also important to realize the result of that finding.

[00:24:11] Speaker 01:
That is your position?

[00:24:12] Speaker 02:
That if there is a meritorious complaint here and there is a reason to believe a violation occurred, the dismissal of that complaint for the discretionary reason, which is the only reason the advocate could give, is contrary to law.

[00:24:24] Speaker 02:
Because the investigation is meant to go forward if there's reason to believe, or my clients can bring a suit in their own name.

[00:24:30] Speaker 06:
And then they say, in the 40-year history of the citizen's suit provision, no court has adopted that view of the law.

[00:24:38] Speaker 02:
Well, a few points about your honor.

[00:24:40] Speaker 02:
One, it took 200 years before anyone decided to enforce the Second Amendment.

[00:24:44] Speaker 02:
And the issue here, every case that they cite, what's typically happened is the FTC's reviewed complaints and found no reason to believe a violation occurred.

[00:24:55] Speaker 02:
And courts reviewed that and generally appellate often the FTC's analysis.

[00:25:01] Speaker 02:
We have not had a case in these 40 years where the FTC said, oh, yes, there were obvious violations here, but we're not going to bother enforcing it all.

[00:25:07] Speaker 06:
That is correct, Your Honor.

[00:25:17] Speaker 01:
But we don't need to go that far because here it's not a correct view of the law applied to the facts.

[00:25:24] Speaker 01:
and then a discretionary decision.

[00:25:26] Speaker 01:
In your view, it is an erroneous view of the law applied to the facts.

[00:25:30] Speaker 01:
And that typically would infect the discretion and make it not a factor that would vitiate.

[00:25:37] Speaker 02:
That is our position that there was a clear error of law that informed their judgment.

[00:25:42] Speaker 02:
Because the FPC's position, as I understand it, however, that that is irrelevant.

[00:25:46] Speaker 02:
Because once they said discretion, all other questions of law disappeared.

[00:25:50] Speaker 02:
And it was required for our clients to prove that the FTC made the wrong judgment about its resources or its priorities.

[00:25:56] Speaker 02:
That is a question that no plaintiff would ever be able to show and therefore no citizens who could ever be wrong.

[00:26:01] Speaker 06:
Okay, we'll give you some time on rebuttal.

[00:26:03] Speaker 06:
Thank you very much.

[00:26:03] Speaker 06:
Thank you.

[00:26:11] Speaker 03:
Good morning, your honor, and may it please the court, Jacob Seiler for the Federal Election Commission.

[00:26:15] Speaker 03:
I'd just like to sort of begin where my opposing counsel left off.

[00:26:18] Speaker 03:
It is not our position that a legal error would be sort of cured by an exercise of prosecutorial discretion.

[00:26:26] Speaker 03:
In fact, in this case, the commission did not reach a decision on the merits of whether, excuse me, the controlling commissioners did not purport to reach a decision on the merits of whether there was RTD

[00:26:36] Speaker 03:
on the political committee status.

[00:26:38] Speaker 03:
Rather, their conclusion was that logistical difficulties in proceeding with further enforcement meant that their discretion should be exercised not to decide that issue.

[00:26:47] Speaker 03:
And that's ultimately what this court has reviewed.

[00:26:50] Speaker 03:
Now, again, the statute says that the question that this court must answer is whether the dismissal is contrary to law.

[00:26:56] Speaker 03:
And if this court and the Supreme Court has explained, the commission retains prosecutorial discretion to dismiss cases.

[00:27:01] Speaker 01:
Whether the dismissal or the failure to act.

[00:27:04] Speaker 03:
Excuse me?

[00:27:04] Speaker 01:
I thought it was whether the dismissal or the failure to act.

[00:27:06] Speaker 03:
Yeah, that's correct.

[00:27:08] Speaker 03:
But in this case, there was a dismissal.

[00:27:09] Speaker 03:
And so it was not... The FECA also provides a cause of action for administrative complainants to, after 120 days, sue the agency and say, you have failed to act.

[00:27:22] Speaker 03:
This is not that kind of a case.

[00:27:23] Speaker 06:
This is a different kind of case where... If the agency says, we think there are

[00:27:29] Speaker 06:
likely was a violation of law based on our interpretation of the law and our understanding of the facts, but for resource reasons or policy priority reasons, we're not going to pursue it.

[00:27:41] Speaker 03:
Is that contrary to law?

[00:27:44] Speaker 03:
unless there were some legal error infecting that decision, that would not be contrary to law because the assessment of whether or not this case... So if the agency says then in the next case, regardless of whether there is a legal violation,

[00:28:05] Speaker 06:
We don't need to address that, because even if there were, we wouldn't exercise our discretion to bring this kind of case.

[00:28:13] Speaker 06:
Is that contrary to law?

[00:28:14] Speaker 03:
No.

[00:28:14] Speaker 03:
And in fact, that's what happened here.

[00:28:17] Speaker 03:
In fact, the controlling commissioners that ultimately voted to dismiss the case as a matter of prosecutorial discretion had determined at an earlier stage that some but not all of the FECA violations alleged in the administrative complaint, there was reason to believe that those violations had occurred and authorized an investigation.

[00:28:33] Speaker 06:
Now the statute – Suppose the agency says for a particular class of cases, a particular statutory provision, it simply is not going to pursue violations of that provision as a matter of policy priority.

[00:28:50] Speaker 03:
So if I understand your hypothetical, you're asking if the commission wrote that down and said explicitly

[00:28:55] Speaker 03:
we're not going to enforce this class of statutory violations.

[00:29:01] Speaker 03:
In such a case, that might run against the doctrine of Adams versus Richardson, where if an agency consciously and expressly adopts a general policy of non-enforcement, that is not permissible under this court's precedent.

[00:29:15] Speaker 03:
But in effect, Crew makes an argument that the commission has advocated responsibility here.

[00:29:20] Speaker 03:
But instead of pointing to a conscious and express policy,

[00:29:25] Speaker 03:
All they point to are previous commission cases that have, for reasons particular to those cases, the same controlling commissioners voted not to proceed.

[00:29:36] Speaker 03:
So far from express policy, what they're arguing is that there is an implied policy of non-enforcement, and that doesn't get you to the Adams versus Richardson.

[00:29:43] Speaker 01:
Mr. Sarla, you said that there was, they never came to a legal conclusion on the political committee question, but the coup argues that they did, in fact, and that they said that we're looking at percentage of

[00:29:59] Speaker 01:
expenditures and we don't think the percentage is enough, but under the commission's own law, after Shays, you look at purpose, no consideration of purpose was made despite the general counsel's report having ample information about the purpose of this organization.

[00:30:15] Speaker 01:
The examination of electioneering communications

[00:30:20] Speaker 01:
was not done in a nuanced way that the commission's own law would seem to require.

[00:30:28] Speaker 01:
And there was no information, zero, that I've seen that any of the money was spent on anything other than trying to influence federal races.

[00:30:39] Speaker 01:
So they seem to have an understanding of what counts as a political committee and how to analyze that when they saw this as a close case.

[00:30:49] Speaker 01:
that I see as, at least Cruz arguing, that's intention with your own law.

[00:30:58] Speaker 03:
Well, the commission did not purport to analyze on an ad by ad basis what the type.

[00:31:05] Speaker 01:
That's not what I was arguing.

[00:31:06] Speaker 03:
No.

[00:31:07] Speaker 03:
But what I'm saying is they didn't go through and analyze it in a way that would be required to come to a decision one way or another.

[00:31:13] Speaker 03:
In fact, they did discuss some of the purpose evidence.

[00:31:17] Speaker 03:
They did not cite all of it, but there was evidence in the record that suggested that the group at issue was an issue advocacy group.

[00:31:24] Speaker 03:
They cited that information.

[00:31:25] Speaker 03:
And yes, of course, there was evidence in the record that you've identified.

[00:31:28] Speaker 03:
But again, the controlling commissioners did not exclude the possibility that FECA violations occurred in this case.

[00:31:37] Speaker 03:
In fact, they found some FECA violations that were alleged by Crewe in this case to be obvious.

[00:31:42] Speaker 01:
But not on the political committee issue.

[00:31:43] Speaker 01:
I'm really focusing on that issue and whether they were laboring under

[00:31:49] Speaker 01:
an understanding of what constitutes a political committee that affected their decision not to go forward with an investigation.

[00:31:58] Speaker 03:
Yes, so just to leave aside the earlier decisions for the moment, at the decision to dismiss,

[00:32:05] Speaker 03:
Any analysis of the political committee status would not have ameliorated their concerns about the statute of limitations or about the defunct nature of the organization that didn't have any money to pay civil fines.

[00:32:17] Speaker 03:
So at that stage, there really is no reason, according to the controlling commissioners, didn't find it necessary to go into that.

[00:32:25] Speaker 01:
It's overdetermined.

[00:32:25] Speaker 01:
There are three equally independent reasons at that stage.

[00:32:28] Speaker 03:
Yes.

[00:32:29] Speaker 03:
At the earlier stage, the controlling commissioners voted in favor of starting an investigation with respect to the one-time disclosure provisions and did not make a decision one way or another because, as they explained later, the available facts, again, the investigation hadn't occurred at that first vote, the facts available at that stage did not resolve in their minds whether there was reason to believe.

[00:32:53] Speaker 03:
According to the first general counsel's report, only a subset of the commission's spending was available, how the organization at issue had spent that money.

[00:33:02] Speaker 03:
Only a subset of that was available.

[00:33:05] Speaker 03:
The Office of General Counsel had not identified every ad.

[00:33:08] Speaker 03:
They could not account for all of the spending, so there just wasn't enough information for the controlling commissioners to reach a conclusion on reason to believe.

[00:33:15] Speaker 03:
Then later, once more information was uncovered after the investigation was authorized, then the controlling commissioners ran into those more logistical problems that they identified in their final statement of reason.

[00:33:27] Speaker 04:
Does the commission have a de minimis policy for trivial violations, for example, you know, the contribution, a small contribution of two bucks was not reported or an expenditure of $15 was not reported,

[00:33:45] Speaker 04:
you know?

[00:33:47] Speaker 03:
There are cases, Your Honor, in which the Commission has found reason to believe or probable cause or whatever the relevant stage is, and nevertheless dismissed the case with a warning of caution, for example, saying, we acknowledge there was a FICA violation here.

[00:34:03] Speaker 04:
They've exceeded the speed limit by 10 miles an hour, but here's a warning.

[00:34:09] Speaker 03:
Essentially, yes, there are cases where, for example, there are policies that the commission has where the dollar amount is low or things of that nature where the commission can essentially find reason to believe, which it didn't here with respect to the political committee status, but it can find reason to believe and then dismiss with a warning to the committee or to the donor.

[00:34:30] Speaker 04:
But no such relief was... Somebody did research.

[00:34:33] Speaker 04:
One could find those cases.

[00:34:35] Speaker 03:
Yeah, we could.

[00:34:36] Speaker 03:
I don't have them at hand, but I could find an example.

[00:34:39] Speaker 03:
They're reported?

[00:34:40] Speaker 03:
Yeah, they would be available through the Commission's website.

[00:34:44] Speaker 01:
And they issue some kind of a warning, just like a sanction, this is not okay, but we're not going to take further action?

[00:34:52] Speaker 03:
Yeah, that has happened.

[00:34:53] Speaker 01:
It's called a warning?

[00:34:55] Speaker 03:
I don't know if there's a specific term for it.

[00:34:57] Speaker 03:
But essentially, there is a word of caution.

[00:35:00] Speaker 01:
We're in the world of word search.

[00:35:03] Speaker 01:
So tell us.

[00:35:04] Speaker 03:
Yeah.

[00:35:06] Speaker 03:
I don't have it at hand what the language would be, but those do exist.

[00:35:12] Speaker 03:
But again, there's another class of cases which this falls into, which is the commission just

[00:35:17] Speaker 03:
for whatever reason, and in this case for the reasons we've explained in our brief, does not make an ultimate decision as to whether or not there is reason to believe.

[00:35:26] Speaker 01:
Although they did make a reason to believe determination at the first vote with respect to the individual failures to report.

[00:35:34] Speaker 01:
and as crew points out you said well you know later by the second by the third these these what you referred to I think as logistical problems had arisen but they were present the the organization was defunct already by the time of the first reason to believe vote was it not?

[00:35:55] Speaker 01:
There wasn't a limitation problem.

[00:35:57] Speaker 01:
The organization was defunct and still the commission voted to proceed with an investigation on the individual, the failures to report.

[00:36:06] Speaker 03:
So the commission did not become aware of the termination until much later after the investigation had already commenced.

[00:36:13] Speaker 03:
That information came to the commission after it subpoenaed.

[00:36:18] Speaker 03:
members of the board of the organization, including its accountant, which and some of its sub vendors, which contained communications as well as was that between the 1st and 2nd or between the 2nd and 3rd votes?

[00:36:29] Speaker 03:
So I it was the it was between after the investigation and before the final vote.

[00:36:36] Speaker 03:
I believe there were only two votes, formal votes as there were more meetings and discussions, but there was the 1st vote to find reasonable even to authorize an investigation.

[00:36:44] Speaker 03:
and then later the final vote to dismiss.

[00:36:47] Speaker 03:
In the middle there were additional discussions, but I don't think it came to a formal vote.

[00:36:52] Speaker 06:
They say that they're not in any way infringing your prosecutorial discretion or seeking to mandate you to take a particular action or particular case or even a particular view of the law.

[00:37:02] Speaker 06:
All they're seeking is to allow the citizen suit provision to operate.

[00:37:08] Speaker 06:
What's your response?

[00:37:09] Speaker 03:
Well, a few things.

[00:37:10] Speaker 03:
The statute refers to whether the dismissal is contrary to law.

[00:37:14] Speaker 03:
So our position is that they fail the initial prerequisite of getting to the contrary to law standard.

[00:37:21] Speaker 03:
And again, it's not so much that they're requiring us to do something as

[00:37:25] Speaker 03:
They're trying to do an end run around what Congress provided.

[00:37:29] Speaker 03:
And of course, FECA operates in a very sensitive First Amendment area.

[00:37:32] Speaker 06:
Congress provided... What do you think was going on with this provision?

[00:37:35] Speaker 06:
Or do you know what was going on with this provision?

[00:37:38] Speaker 06:
Because it is very odd.

[00:37:40] Speaker 06:
It is unique.

[00:37:41] Speaker 03:
So I think there were concerns about under-enforcement, as my opponents have recognized, but I do think there were also concerns about over-enforcement.

[00:37:48] Speaker 03:
And so what FECA does is strike a balance between those positions.

[00:37:52] Speaker 03:
It gives the Commission essentially two bites at the apple.

[00:37:54] Speaker 03:
The first stage, and then whether that's challenged in court and found contrary to law, it gives them a second stage, at that point knowing if they fail to conform,

[00:38:02] Speaker 03:
then they will activate the right of private citizens to file a suit.

[00:38:06] Speaker 03:
That citizen suit then provides incentives for the commission to comply with the ordinance.

[00:38:10] Speaker 06:
You almost never will get contrary to law, correct me if I'm wrong, under your broader theory of how this should work.

[00:38:18] Speaker 03:
We admit that they will be rare, but they're rare because Congress intended them to be rare.

[00:38:23] Speaker 06:
When you say intended, we don't know what Congress intended.

[00:38:25] Speaker 06:
We only know what they wrote.

[00:38:26] Speaker 03:
Yeah, and I think that intent is clear from the text of the statute because it's quite difficult to get to that stage if you follow the text of the statute.

[00:38:33] Speaker 06:
What is an example, other than the racial, religious discrimination example, of a situation where it would be contrary to law?

[00:38:41] Speaker 03:
So you could imagine situations in which, so certainly the kind that you identified, but also if there were a legal error.

[00:38:47] Speaker 03:
So for example, if the commission dismissed as a matter of prosecutorial discretion in light of an impending statute of limitations and got the statute wrong.

[00:38:56] Speaker 03:
If, for example, after one year they said, we don't have enough time under the statute of limitations, well, that would plainly be unreasonable because there's an additional four years.

[00:39:05] Speaker 01:
Why isn't this that case where they're saying no reason to believe when they have no evidence of any non-electoral activity?

[00:39:17] Speaker 01:
They have evidence of several million dollars being paid on

[00:39:27] Speaker 01:
on electing members of the Senate.

[00:39:30] Speaker 01:
They have purpose information.

[00:39:34] Speaker 01:
I mean, all it is is reason to believe that there may have been a violation of the political committee standard.

[00:39:42] Speaker 01:
Why isn't that, to the extent that they're saying, well, it has to be more than half, it just seems like that's contrary to law in the same way that you're talking about where, oh, wrong statute of limitations, oops.

[00:39:53] Speaker 03:
The difference between your example and my case is that there were these other limitations on the remedies that the commission could get.

[00:40:04] Speaker 03:
It's pretty clear from the statement of reasons that the controlling commissioners were focused on the availability of a civil thought.

[00:40:09] Speaker 01:
But that's a little bit of a problem of their own making because of the early misapprehension.

[00:40:15] Speaker 01:
So they ran the clock out because they thought, oh, we don't have evidence.

[00:40:20] Speaker 01:
Whereas if they had acted promptly, if they had recognized the evidence before them as adequate legally,

[00:40:29] Speaker 01:
They wouldn't have been up that creek quite so far.

[00:40:32] Speaker 03:
So again, the timing is important.

[00:40:34] Speaker 03:
Much of the purpose evidence that Your Honor has just cited came about as a result of the investigation that the Office of General Counsel conducted anyway as a result of that first vote.

[00:40:42] Speaker 01:
It was present when they made a second vote against a finding of reason to believe.

[00:40:49] Speaker 03:
That's correct.

[00:40:49] Speaker 03:
But at that time, then the statute of limitations had become an issue.

[00:40:54] Speaker 03:
And at that point, the commission became aware that the

[00:40:57] Speaker 03:
entity was defunct and had no money.

[00:40:59] Speaker 03:
So again, at the first stage, there isn't enough information of the kind, the information that you've decided wasn't before the commission.

[00:41:06] Speaker 03:
And then later, when that information was before the commission.

[00:41:09] Speaker 01:
But none of that is actually in the final decision.

[00:41:13] Speaker 01:
That's not the way the decisive commissioners explain the situation.

[00:41:18] Speaker 03:
Yeah, so again, they didn't feel the need to go into the merits of the case.

[00:41:24] Speaker 03:
Well, they sort of did.

[00:41:24] Speaker 01:
And to the extent that they did, it seems a little misleading.

[00:41:27] Speaker 01:
I mean, one of the issues, as you know, is to make the law clear.

[00:41:31] Speaker 01:
And I think one of the explanations we have for this peculiar citizen supervision is that it's very important for people that are trying to comply with the law to understand

[00:41:43] Speaker 01:
what's legal and what's not.

[00:41:45] Speaker 01:
And when you have the ultimate dismissal decision here, having a footnote, making comments about commissions and focus on percentage where, I mean, Shays and the ensuing regulatory action by the commission doesn't look at the political committee analysis that way at all.

[00:42:02] Speaker 01:
So that's a material problem.

[00:42:05] Speaker 03:
So the regulation that came out of that decision does focus on the spending of the committee.

[00:42:13] Speaker 03:
And it also says the commission will take a case-by-case analysis as to this issue.

[00:42:18] Speaker 03:
Now, there is no.

[00:42:21] Speaker 01:
And purpose is an important part of that, right?

[00:42:23] Speaker 03:
Yes, internal documents and public documents.

[00:42:25] Speaker 03:
And again, there is some mixed record about whether they were going to be an issue group.

[00:42:29] Speaker 03:
There's also the evidence you cited.

[00:42:32] Speaker 01:
What's the record that it was going to be an issue group?

[00:42:35] Speaker 03:
Well, they prepared a report that was focused on issues.

[00:42:40] Speaker 01:
That's the one report that was on their website?

[00:42:42] Speaker 03:
Yes.

[00:42:43] Speaker 01:
And do we have any information about how much that cost them?

[00:42:45] Speaker 03:
It was about $5,000.

[00:42:49] Speaker 03:
At least their defense to the agency was that the ads focused on issues such as economics.

[00:42:58] Speaker 03:
Not all of them contain express advocacy.

[00:43:01] Speaker 03:
Some of them are addressed at economic issues.

[00:43:04] Speaker 03:
Controlling commissioners, again, didn't reach a conclusion as to which of those issues should be counted and which shouldn't.

[00:43:12] Speaker 03:
But there were – that all of this was disputed before the agency.

[00:43:17] Speaker 06:
I might have asked this in a different form before, but I want to make sure to ask it again.

[00:43:21] Speaker 06:
If the agency – the commission says our view of the law is X,

[00:43:28] Speaker 06:
and therefore we're not pursuing this.

[00:43:30] Speaker 06:
But even if our view of the law is wrong, we would choose not to pursue this as an exercise of our discretion and priorities and resources.

[00:43:40] Speaker 03:
So that sounds to me pretty close to the Akins case, where the Supreme Court said they misanalyzed one provision of FECA.

[00:43:48] Speaker 03:
They reached a final conclusion as to what that meant, and they were wrong.

[00:43:51] Speaker 03:
Yes, they could exercise their prosecutorial discretion, but we're not sure how they would exercise that discretion if they got the view of the law right.

[00:43:58] Speaker 03:
So that's what Akins says.

[00:44:00] Speaker 03:
But here,

[00:44:01] Speaker 06:
Now, I'm asking the question, but suppose they simultaneously say those two things together, the commission.

[00:44:07] Speaker 03:
Yeah, I think Akins would control that situation, where then Akins would require the court to remand it back to the agency to determine whether it would still exercise its discretion under the corrective law.

[00:44:19] Speaker 03:
But again, the commission here did not reach a final conclusion as to what the law meant or whether the respondent at issue here was a political committee or not.

[00:44:29] Speaker 06:
Right, I'm asking just how we

[00:44:31] Speaker 06:
whatever way this case comes out, whatever we write is gonna be important.

[00:44:37] Speaker 06:
I understand, I just wanted to be clear about that.

[00:44:39] Speaker 01:
Is it your view that if, and I understand this is not your position, but if there were a contrary law finding and if CRU were to go ahead, there would be no meaningful relief available to it?

[00:44:55] Speaker 03:
I think the commission, the controlling commissioners did not at any point in their statement of reasons say that there were no possible way for the agency to go further.

[00:45:09] Speaker 03:
In fact, they merely said that based on the factors they identified, that the potential benefits wasn't worth the effort.

[00:45:16] Speaker 03:
So there may well be additional things the Commission could have done and there may well be Additional things that crew could do but the question for this court is whether the dismissal was unreasonable Was a contrary to law and under the court's precedence whether that means whether it was unreasonable and what are some of them and I I take it and I I'm not surprised that that's the the Commission's view that should be the Commission's view there were remedies available They just weren't

[00:45:41] Speaker 01:
sufficient to warn.

[00:45:42] Speaker 01:
And the kinds of remedies, had they made a different decision, would be the warning you mentioned, disclosure of information, what other kinds of remedies.

[00:45:51] Speaker 03:
Just to be clear, the controlling commissioners did not reach a conclusion about whether there would be availability of

[00:45:58] Speaker 03:
you know, a requirement that they could go to court and get an order requiring the agency to disclose the names.

[00:46:04] Speaker 03:
They just didn't decide that.

[00:46:05] Speaker 01:
No, I know that.

[00:46:06] Speaker 01:
I'm just saying, in a counterfactual world in which the Commission had decided it was worth the candle,

[00:46:13] Speaker 01:
yet you had a defunct organization.

[00:46:15] Speaker 01:
We have the, I think, taxpayer's case that Cruz cites, or that the dissenting commissioner cites, I guess.

[00:46:25] Speaker 01:
What other kinds of relief would have been available in that counterfactual world to the commission?

[00:46:31] Speaker 03:
So assuming there weren't statute of limitations problems, then there would be an opportunity.

[00:46:37] Speaker 03:
Then they could go to court seeking a court order requiring them to comply with their disclosure obligations.

[00:46:42] Speaker 03:
But again, I want to emphasize that the commission did not reach a conclusion as to whether those remedies remain available in this case in light of the statute of limitations.

[00:46:49] Speaker 03:
I understand that.

[00:46:50] Speaker 01:
Yeah.

[00:46:50] Speaker 01:
So disclosure obligation, anything else that the commission has the authority in a case in which they think it's worth the candle,

[00:46:58] Speaker 01:
to get once the entity that it's pursuing is defunct.

[00:47:02] Speaker 01:
I mean, that must be a systemically important issue for you if organizations decide we're just going to do this pop-up, we're going to do this on a pop-up basis because it's legally safer.

[00:47:13] Speaker 01:
Presumably, that's of institutional concern to the commission.

[00:47:16] Speaker 03:
Sure, and there are instances where the commission has pursued agencies that have terminated and obtained civil remedies.

[00:47:22] Speaker 03:
Those are cited in the controlling commissioner's statement and distinguished.

[00:47:26] Speaker 03:
So if there were money available, the commission has available to it the possibility of civil fines and various things of that nature.

[00:47:32] Speaker 01:
Civil fines against the principals?

[00:47:34] Speaker 03:
Yes, in certain circumstances.

[00:47:36] Speaker 03:
Again, you'd have to find personal liability.

[00:47:38] Speaker 03:
There's a legal regime for that.

[00:47:42] Speaker 03:
Thank you very much.

[00:47:43] Speaker 03:
Thank you.

[00:47:53] Speaker 02:
I may briefly clarify something opposing counsel mentioned there.

[00:47:57] Speaker 02:
He said the agency did not reach a decision on whether the organization was a political committee, and therefore any analysis of that question is essentially irrelevant.

[00:48:06] Speaker 02:
The problem is the reason the commissioners did not reach that is they thought there were certain facts and certain issues that created ambiguity.

[00:48:13] Speaker 02:
But those facts and issues simply aren't relevant under correct analysis of the law.

[00:48:18] Speaker 02:
The reason they refused to address and resolve that question is because they had an impermissible view of what a political committee is and is not.

[00:48:25] Speaker 02:
So that error informed their refusal to address that particular claim.

[00:48:31] Speaker 02:
And my opposing counsel said the statute of limitations.

[00:48:34] Speaker 02:
What was that, impermissible view?

[00:48:37] Speaker 02:
Well, as we discussed earlier, there are a number there.

[00:48:40] Speaker 02:
One, they ignored the purpose of the political committee.

[00:48:43] Speaker 02:
They ignored the evidence that showed this group was formed for the purpose of electing candidates.

[00:48:50] Speaker 02:
Secondly, they excluded all money spent on anything but independent expenditures, even if that money was spent to elect candidates.

[00:48:58] Speaker 02:
And as Judge Cooper found recently in that case, that that is an impermissible interpretation of Buckley.

[00:49:05] Speaker 02:
My present counsel points to statute of limitations and defunct status, but it's been their position throughout this litigation that the statute of limitations and the defunct status do not prevent the FEC from enforcing here.

[00:49:17] Speaker 02:
They have said they could seek enforcement, even with those issues under their reading of them.

[00:49:24] Speaker 01:
Their position is more nuanced, though.

[00:49:25] Speaker 01:
Their position is weighing the likely gains, the size of the organization, its defunct status, and these hurdles.

[00:49:36] Speaker 01:
If this had been the Democratic campaign commission, then maybe it would be different.

[00:49:42] Speaker 01:
But it's just not for them worth it.

[00:49:44] Speaker 01:
So I don't think they're saying total bar.

[00:49:47] Speaker 01:
I think they're weighing it among a number of factors.

[00:49:50] Speaker 02:
That is correct, Your Honor.

[00:49:52] Speaker 02:
And it raises a sort of central absurdity in the efficacy's position.

[00:49:56] Speaker 02:
Their position would be if they got the law wrong and then said, but we're also not going to force out of our discretion, that that would be contrary to law and would go back to the agency and potentially my clients could bring a suit.

[00:50:08] Speaker 02:
But if they said from the beginning, no, you're right.

[00:50:10] Speaker 02:
This group has violated the law.

[00:50:12] Speaker 02:
They've flakily violated the law.

[00:50:13] Speaker 02:
They've spent millions of dollars and impacted many elections.

[00:50:16] Speaker 02:
But guess what?

[00:50:17] Speaker 02:
We're not doing anything, and you can't either.

[00:50:19] Speaker 02:
That is an incredibly strange reading of this text, and one that eliminates citizen suits where they make sense.

[00:50:26] Speaker 02:
And I can't briefly just address Judge Randolph.

[00:50:28] Speaker 02:
You mentioned the worry about de minimis violations and concerns about over-enforcement.

[00:50:33] Speaker 02:
The FPC mentioned there are a number of ways they can resolve minor complaints.

[00:50:37] Speaker 02:
One, there's an automatic fine regime for certain types of complaints.

[00:50:40] Speaker 02:
There's an ADR system.

[00:50:42] Speaker 02:
There's pre-probable cause conciliation.

[00:50:44] Speaker 02:
There's a number of ways the FPC can resolve a minor issue.

[00:50:47] Speaker 02:
that would not be contrary to law and not allow a citizen suit.

[00:50:51] Speaker 02:
What we have here is a situation where there are flagrant and extreme violations of the law, and still the FEC says it can not only not force itself, it can ensure no one else does either.

[00:51:01] Speaker 06:
On that absurdity you just pointed out, I want to make sure I understand and get your reaction.

[00:51:06] Speaker 06:
Because I took it to be a point that if you're basing your decision that you're not going to pursue it on an incorrect view of the law, well, maybe you would reach a different conclusion about enforcement discretion if you had the correct view of the law.

[00:51:21] Speaker 06:
You can't really know that until you have the correct view of the law.

[00:51:24] Speaker 06:
So sending it back for them to

[00:51:27] Speaker 06:
do that makes some sense.

[00:51:28] Speaker 06:
Whereas if they have a correct view of the law and just say, we're not going to exercise our discretion to pursue it here for a variety of reasons, priorities, resources, what have you, then we know they have the correct view of the law.

[00:51:41] Speaker 06:
But then we know it really is an exercise of their discretion.

[00:51:45] Speaker 06:
In the first case, you want to make sure before they exercise the discretion that they have the correct view of the law.

[00:51:50] Speaker 06:
You understand?

[00:51:51] Speaker 02:
I understand the distinction, Your Honor.

[00:51:52] Speaker 06:
And why I don't know that I think that's necessarily absurd.

[00:51:55] Speaker 02:
Well, the absurdity results from the consequences of those decisions.

[00:52:00] Speaker 02:
Under the first example, where they make an incorrect understanding of the law and then dismiss as well for discretion, remanding it back may let them to reconsider their own discretionary choice.

[00:52:12] Speaker 02:
But the fact is that FICA also provides a citizen suit as a backup.

[00:52:16] Speaker 02:
And citizen suits make sense where there is merit.

[00:52:18] Speaker 02:
And the FCA agrees there's merit.

[00:52:21] Speaker 01:
Well, I don't know.

[00:52:24] Speaker 01:
You're right that one could view the law that way, but one can also defend the distinction that the FEC appears to be making in the sense that one of the functions of the Commission is to clarify the law.

[00:52:35] Speaker 01:
And when they've said, well, we think the law is

[00:52:39] Speaker 01:
A prime and so we're in our discretion gonna dismiss and the court or the, in fact the law is A and we want that to be known.

[00:52:48] Speaker 01:
There's more exigency in that situation where they exercise discretion against an incorrect view than when they've exercised it against a correct view with, under your hypothesis, maybe an equally bad violator in front of them.

[00:53:02] Speaker 01:
That's just the nature of,

[00:53:04] Speaker 01:
The way of defending that would be to say that's just the nature of discretion on agencies' part.

[00:53:10] Speaker 01:
Bad violators get away.

[00:53:12] Speaker 02:
And that is understandable on the discretion of the agency and what the agency decides to spend its resources on.

[00:53:18] Speaker 02:
But there is no reason to read the citizen supervision if it's not in my client's ability to bring their own rights based on the agency's assessment of its own resources.

[00:53:25] Speaker 01:
Well, it would be an understanding of what Congress meant when it said contrary to law.

[00:53:30] Speaker 01:
And we've struggled with what did it mean.

[00:53:32] Speaker 01:
It's not entirely clear.

[00:53:34] Speaker 01:
But you have to concede that it

[00:53:36] Speaker 01:
could mean when they've made an error that is legal, rather than an error that is in that residual discretionary band.

[00:53:45] Speaker 02:
We think, obviously that's a question for this court, and it would decide with no deference to the FEC on that question.

[00:53:50] Speaker 02:
We think that sort of reading would render the citizens' suit provision so insignificant, that's nullified.

[00:53:59] Speaker 06:
When did the citizens' suit provision go, and it went in at the beginning, right?

[00:54:03] Speaker 02:
I believe it was 1970, the three amendments went in?

[00:54:07] Speaker 06:
Yeah, the three or four.

[00:54:07] Speaker 06:
Yeah.

[00:54:09] Speaker 06:
Has there been, and there's been no change to it since then?

[00:54:12] Speaker 02:
No, Your Honor.

[00:54:13] Speaker 06:
And you're not aware of any current congressional attention to this provision?

[00:54:19] Speaker 02:
Not that I'm aware of, Your Honor, no.

[00:54:22] Speaker 06:
Okay.

[00:54:22] Speaker 06:
Thank you, Your Honor.

[00:54:23] Speaker 06:
Thank you both.

[00:54:24] Speaker 06:
The case is submitted.