[00:00:02] Speaker 00: Good morning. [00:00:26] Speaker 00: May it please the court. [00:00:28] Speaker 00: I am Tara Malloy, representing Appellants Campaign Legal Center, or CLC, and Democracy 21. [00:00:34] Speaker 00: CLC and Democracy 21 are challenging the dismissals of three FEC complaints they filed in the 2012 elections, alleging that more than $14 million in campaign contributions were passed through various LLCs and other corporate fronts to conceal the true donors of those funds. [00:00:51] Speaker 00: In essence, what the three administrative complaints allege, [00:00:55] Speaker 00: is a campaign finance version of money laundering. [00:00:58] Speaker 00: Unknown donors funneled big contributions to super PACs through shell corporations that engaged in no business in order to hide their identities and evade disclosure. [00:01:08] Speaker 00: The undisputed facts in these complaints established crystal clear violations of two key statutory disclosure provisions of MECA. [00:01:16] Speaker 00: One, it's straw donor provision that prohibits making a contribution in the name of another at 52 USC 30122, [00:01:23] Speaker 00: and its political committee registration and reporting requirements. [00:01:26] Speaker 00: Nevertheless, the commission deadlocked 3-3. [00:01:29] Speaker 05: Can I pause over that? [00:01:30] Speaker 05: Do you think both can be found? [00:01:34] Speaker 05: Can somebody be in violation of each one or are these in the alternative? [00:01:41] Speaker 00: Complaints presented both allegations as potential violations. [00:01:47] Speaker 00: However, if I understand your question, the FEC's Office of General Counsel did analyze our... I'm asking your view. [00:01:56] Speaker 05: Can someone be or some entity be in violation of both? [00:02:02] Speaker 05: I understand what the general counsel says, which is you're one or the other. [00:02:07] Speaker 05: That seems reasonable. [00:02:09] Speaker 05: I didn't take you to have a different position, but I was wondering the way you presented it, whether you meant to say that they could be both. [00:02:16] Speaker 00: I think that at the time the complaints were filed, it was unclear whether these LLCs or corporate entities were straw donors. [00:02:24] Speaker 00: That is, whether they had no independence and whether they were simply pass-throughs, or whether there may be a continuing [00:02:29] Speaker 00: course of activity that may be campaign related such that they would be closer to a political committee, a group that had as its major purpose the influence of elections. [00:02:37] Speaker 05: But your view now is it's one or the other? [00:02:39] Speaker 05: Correct. [00:02:39] Speaker 05: Okay, thank you. [00:02:43] Speaker 04: Can I ask you to just go right to what I think is a hard issue here, which is the Commission's argument that our decision in Crewe holds that the [00:02:56] Speaker 04: decision here that is before us is not reviewable, that it's covered by Heckler v. Cheney. [00:03:05] Speaker 04: So the anarchist brief says, well, that's completely inconsistent with our prior case law. [00:03:11] Speaker 04: But you don't say that in your brief. [00:03:17] Speaker 04: You say, in order to decide this case, [00:03:21] Speaker 04: We don't need to say that, and we can interpret CRU, quote, in harmony with our previous decisions, namely Orlowski, Chamber of Commerce, all those cases. [00:03:34] Speaker 04: How do you do that? [00:03:36] Speaker 00: Correct. [00:03:37] Speaker 04: Yes, how do you do that? [00:03:39] Speaker 00: That's exactly what we argued. [00:03:40] Speaker 00: I mean, how do we do that? [00:03:42] Speaker 00: Yes. [00:03:43] Speaker 00: Crew explicitly noted that although it deemed FEC dismissals within the Heckler world, it explicitly noted that if the FEC dismissal relied upon interpretations of law, that it was still reviewable. [00:03:59] Speaker 00: We believe this is such a decision here. [00:04:00] Speaker 04: But the Heckler, the out that Heckler leaves, footnote four in Heckler, that says it's reviewable if the commission [00:04:11] Speaker 04: If the agency says, well, we don't have jurisdiction, that is, we're without power to act. [00:04:16] Speaker 04: That's not what the commission said here. [00:04:19] Speaker 04: Correct, but the commission... I don't know that the crew can go beyond that, can it? [00:04:25] Speaker 04: It can't stand footnote four. [00:04:30] Speaker 00: Well, to back up, I think that crew has to be understood on its facts. [00:04:35] Speaker 04: There, the court was... How about understood as consistent with Heckler? [00:04:40] Speaker 00: as consistent with Heckler. [00:04:43] Speaker 00: Well, we also noted in our brief that if CRU was expanded in the way that the FEC urges to mean that an FEC dismissal of an administrative complaint duly filed according to 30109 was not subject to judicial review simply because it mentioned the words prosecutorial discretion [00:05:04] Speaker 00: or it mentioned perhaps one discretionary factor and thus immunized all the interpretations of law in that decision from any judicial check, that that would be contrary to Aiken's, both this circuit's decision and the Supreme Court's decision, and that it's really only that if crew is confined to its backs, where the court was reviewing in its eyes, at least the majority's eyes, [00:05:25] Speaker 00: an agency decision that was an exercise of its possible discretion, and again, in the panel majority's eyes, a dismissal based entirely upon discretionary factors. [00:05:35] Speaker 00: then that was not reviewable. [00:05:36] Speaker 00: And I don't know that we would contest that, even though the Supreme Court's decision in Akins makes clear that a FEC dismissal of an administrative complaint under 30109 makes that action reviewable. [00:05:52] Speaker 00: However, if the agency were to give only unreviewable reasons for that dismissal, because it was part of an exercise of prosecutorial discretion, then those reasons would not necessarily become reviewable. [00:06:03] Speaker 02: Where does our case law say that? [00:06:06] Speaker 02: Where does our prior case law before CRU make that distinction? [00:06:11] Speaker 02: We've never said that. [00:06:13] Speaker 00: Well, the prior case law to CRU was that you have to state reasons and they're subject to review. [00:06:19] Speaker 02: And then Olavsky explains the two circumstances that can serve as a basis for review. [00:06:26] Speaker 02: I mean, I didn't understand whether you were just hedging because you felt you were stuck with CRU. [00:06:31] Speaker 02: Or what? [00:06:31] Speaker 02: But what Judge Tatel is asking, do you honestly believe that crew is consistent with the established law of the circuit, pre-crew? [00:06:39] Speaker 02: It can't possibly be. [00:06:42] Speaker 00: I believe that crew is based upon a faulty premise. [00:06:47] Speaker 00: I'm sorry, you said what? [00:06:49] Speaker 00: I just didn't hear you. [00:06:50] Speaker 00: If you ask me whether I think that crew is consistent with the law of the circuit in the Supreme Court, I would say that... No, it's not. [00:06:59] Speaker 00: What do you think? [00:07:00] Speaker 02: I thought you said it was a faulty premise, right? [00:07:03] Speaker 00: The faulty premise is that crew stated that FEC dismissals of administrative complaints filed under 30109 was an exercise of discretion. [00:07:16] Speaker 00: It was an act committed entirely to the FEC's discretion and therefore unreviewable. [00:07:21] Speaker 00: This, however, flies in the face [00:07:22] Speaker 00: of the Supreme Court's decision in Akins, which found expressly the opposite. [00:07:27] Speaker 00: It said that although agency enforcement decisions have been traditionally committed to agency discretion, and then they said explicitly, we deal here with a statute that explicitly indicates the contrary. [00:07:37] Speaker 00: So that the FEC action, that is a dismissal, is reviewable, it may be that if indeed the reasons are only ones of agency resources, that those reasons are not reviewable. [00:07:49] Speaker 02: I don't see it. [00:07:49] Speaker 02: No, that's a different question. [00:07:51] Speaker 00: You're reviewable. [00:07:52] Speaker 02: But you use Alasky, it's either inconsistent with law or arbitrary and capricious, not inconsistent with law, then the agency is going to win and it's not arbitrary and capricious if it looks like nothing more than the agency saying on balance we're not going to proceed. [00:08:08] Speaker 02: That's not arbitrary and capricious. [00:08:10] Speaker 00: Correct. [00:08:10] Speaker 00: But insofar as CRU is read in a way that's simply limited to its facts. [00:08:15] Speaker 02: Yeah, I don't know what that means. [00:08:16] Speaker 02: But I mean, you may have been stuck. [00:08:17] Speaker 02: Is that what you're saying? [00:08:18] Speaker 02: You felt stuck in that? [00:08:19] Speaker 00: Well, yes. [00:08:19] Speaker 00: I think that we felt that CRU governed, although its discussion about mixed decisions, where the FEC rested upon both prosecutorial discretion, grounds, and interpretations of law, [00:08:32] Speaker 00: there it said that under Heckler, you couldn't carve out reviewable legal determinations from another life discretionary decision. [00:08:39] Speaker 02: That's assuming Heckler is applicable in the FVCA context, and it's not. [00:08:42] Speaker 00: Exactly, but that was not the facts before the crew panel. [00:08:46] Speaker 00: They were looking at a decision that they deemed entirely based on prosecutable discretion. [00:08:50] Speaker 00: I think one could read that section as an aside. [00:08:52] Speaker 00: It was dicta. [00:08:53] Speaker 00: It was not necessary to the holding of crew. [00:08:55] Speaker 02: And that would be a way to disregard the more problematic applications of crew to FEC dismissals that clearly are resting on... Doesn't the agency itself assume that every exercise of every decision when the agency decides not to say a 3-3 break, not to go forward, [00:09:17] Speaker 02: is always an exercise of prosecutorial discretion. [00:09:20] Speaker 02: It has nothing to do with reviewability. [00:09:22] Speaker 02: They always assume it's an exercise of prosecutorial. [00:09:24] Speaker 02: That's what their regs say. [00:09:26] Speaker 02: But that has nothing to do with our precedent. [00:09:28] Speaker 02: Our precedent says, no matter what, reasons have to be given, and they're subject to review. [00:09:33] Speaker 00: Correct. [00:09:34] Speaker 05: OK. [00:09:35] Speaker 05: So there's a different position than you took in your brief. [00:09:37] Speaker 00: Well, no. [00:09:37] Speaker 00: I think we said that if crew was interpreted to mean that a FEC dismissal based upon [00:09:46] Speaker 00: legal interpretations was not reviewable, then it was contrary to the decisions of the Circuit and Supreme Court. [00:09:53] Speaker 00: We said that our understanding of Cruz's facts was that it was reviewing a FEC dismissal entirely based upon discretionary considerations. [00:10:00] Speaker 05: And under those circumstances, you said it was not reviewable. [00:10:03] Speaker 00: And under those circumstances, those reasons given for the dismissal may very well be unreviewable. [00:10:10] Speaker 05: For instance... You're now taking a different position. [00:10:12] Speaker 00: Well, I was asked whether I think that crew is inconsistent with the decisions of the circuit and the Supreme Court, and I do. [00:10:22] Speaker 04: It's interesting, because I read your brief as being very careful not to adopt the view of the amicus. [00:10:27] Speaker 04: Is that not right? [00:10:28] Speaker 00: Excuse me, not to? [00:10:28] Speaker 04: Not to adopt the view of the amicus brief. [00:10:31] Speaker 04: The amicus brief asks us to invoke Sierra Club and declare that we won't follow crew. [00:10:39] Speaker 04: I read your brief as carefully not taking that position. [00:10:42] Speaker 00: I think that our brief said that CRU could be read in a manner consistent with this circuit's precedence and with the Supreme Court. [00:10:49] Speaker 00: And that is because if CRU, again, is limited to its facts, I don't think it necessarily conflicts with those systems. [00:10:56] Speaker 04: Then what do we do? [00:10:58] Speaker 04: Let's just assume that we don't agree with you. [00:11:03] Speaker 04: Since you haven't asked us to ignore CRU, and the amicus brief can't make an argument you don't, what do we do? [00:11:13] Speaker 04: You haven't asked us to invoke Sierra Club. [00:11:17] Speaker 00: I think that what we've asked the court to do is to review the statement provided by the controlling commissioners for error of law. [00:11:25] Speaker 04: Well, but we can't do that. [00:11:26] Speaker 04: If crew says what it says, that is a heckler clause. [00:11:36] Speaker 04: And if you have not asked us to ignore crew, [00:11:42] Speaker 04: under Sierra Club, then what do we do? [00:11:48] Speaker 00: My understanding of proof is that it's explicitly noted that FEC dismissals based upon conclusions of law were reputable, and I would cite that. [00:11:57] Speaker 04: My whole question is basically something that may not be right under Heckler. [00:12:06] Speaker 04: Unless it's a jurisdictional, we don't have authority. [00:12:11] Speaker 04: Heckler and our decision, Crowley, seem to be saying, you know, Heckler is Heckler, and unless it falls under Putnam 4, we don't have any jurisdiction. [00:12:24] Speaker 04: We can't review it. [00:12:24] Speaker 00: Well, as I said, the crew panel expressly stated that if the commission declines to bring an enforcement action on the basis of its interpretation of TICA, the commission's decision is subject to judicial review to determine whether it's contrary to law. [00:12:35] Speaker 00: So whether consistent or inconsistent with Heckler, that was the position of the Crew Court, and we believe that if indeed that exception were applied to this case, that the FEC's decision would still be reviewable even under Crew. [00:12:49] Speaker 00: I don't disagree that Crew's premise that FEC dismissals are entirely committed to agency discretion is inconsistent with the Supreme Court's holding in Akins that decides the contrary. [00:13:01] Speaker 04: Let me ask you a quick question about the merits. [00:13:04] Speaker 04: I was originally, and maybe still am, struck by your argument that the commission said there's due process and notice problems here. [00:13:12] Speaker 04: You respond to that by saying, well, wait a minute, the statute's totally clear, right? [00:13:18] Speaker 04: It prohibits straw contributions and [00:13:21] Speaker 04: It defines persons as corporations. [00:13:24] Speaker 04: What's not clear here, right? [00:13:26] Speaker 04: That's your argument. [00:13:28] Speaker 04: Commission responded by saying, well, we have a whole series of decisions in other contexts where we treat corporate contributions as corporate money, even though we know who the donor is. [00:13:42] Speaker 04: And that could conceivably be confusing. [00:13:46] Speaker 04: And since this is the first time we've articulated this theory, we're just not going to apply it. [00:13:52] Speaker 04: Why isn't that a pretty good argument, particularly since our deference on issues like this is so heavy, right? [00:14:01] Speaker 04: I mean, in DCC, we said our deference at a point like this is, quote, at its zenith. [00:14:09] Speaker 00: Our answer to that was that the FEC certainly cites a great deal of guidance, and it cites some of its rules, but none of its authority is on point. [00:14:19] Speaker 00: The rules were all the default rules for attributing corporate contributions to either the entity or an owner. [00:14:27] Speaker 00: And the default rules, we said by definition, do not apply in situations where there's evidence. [00:14:31] Speaker 04: Right, but they acknowledge that. [00:14:33] Speaker 04: But they say, well, they could still have confused people. [00:14:36] Speaker 04: People could still be confused about that. [00:14:39] Speaker 00: Well, as we argue in the brief, we don't think that this guidance actually confuses the statute. [00:14:44] Speaker 04: Yeah, but that's not our standard, right? [00:14:46] Speaker 04: We have to say it's an abuse of discretion for the Commission to have said that people could be confused. [00:14:54] Speaker 04: How would we say that? [00:14:59] Speaker 00: One actually looks at the guidance. [00:15:02] Speaker 00: None of it involved either 301-22 nor did it involve fact patterns like the blatant violations alleged here of 301-22. [00:15:12] Speaker 00: In those different MURR proceedings or enforcement decisions, the commission was looking at whether an LLC or a closely held corporation that oftentimes loaned money to a candidate or the owner [00:15:28] Speaker 00: had violated the corporate contribution ban. [00:15:30] Speaker 00: However, in almost all of those cases, the money was business revenue derived from the corporation, so there was some question about whether it was the owner's money or the corporation's. [00:15:40] Speaker 00: Here we have a completely different fact pattern where there's really no dispute that all of the money flowing through these LSEs and corporations came from the outside, came from an outside donor. [00:15:49] Speaker 00: So even if you were to read these, this guidance is somehow [00:15:53] Speaker 00: affecting 301-22. [00:15:55] Speaker 00: The facts are just not on all fours with this current situation. [00:15:59] Speaker 00: And what's more, if indeed the question is whether or not respondents are reasonably confused, then I think it's important to look at whether the record indicates that the respondents were reasonably confused. [00:16:09] Speaker 00: And one thing that's striking is that although respondents to all three complaints [00:16:13] Speaker 00: filed responses in the administrative proceedings. [00:16:16] Speaker 00: Not one of them raised concerns about notice or claimed any confusion about the applicability of 3122. [00:16:22] Speaker 00: In fact, they didn't contest the factual allegations. [00:16:24] Speaker 00: They simply said that the allegations and the complaints weren't sufficient. [00:16:26] Speaker 00: That was how they rested their defense. [00:17:03] Speaker 01: Good morning, Your Honors, and may it please the Court. [00:17:06] Speaker 01: I'm Heben Ward on behalf of the Federal Election Commission. [00:17:11] Speaker 01: Commission on Hope is dead on here and squarely applies to the decision that the controlling commissioners made in this case. [00:17:22] Speaker 02: So I was going to ask you that you think it's dead on. [00:17:29] Speaker 02: The crew opinion says [00:17:33] Speaker 02: The disposition is controlled by Heckler v. Cheney. [00:17:37] Speaker 02: That's what it says. [00:17:41] Speaker 02: This case is not controlled by Heckler v. Cheney. [00:17:47] Speaker 02: Supreme Court made it clear in the FEC situation, Heckler does not embrace the presumption of reviewability. [00:17:56] Speaker 02: Absolutely clear. [00:17:58] Speaker 02: Not even interesting. [00:18:01] Speaker 02: Cru decision cites heckler, cites Akins along with the heckler line of authority. [00:18:10] Speaker 02: You're smiling because you know, it makes no sense because it doesn't fit the heckler line of authority. [00:18:15] Speaker 02: It's an opposite. [00:18:17] Speaker 02: We have a long line of authority starting with then Judge Ginsburg's case, including the Lasky, including common cause, all of which say together, [00:18:29] Speaker 02: that in this kind of a circumstance, the agency must issue reasons for the disposition, and those reasons are subject to review. [00:18:41] Speaker 02: There's no presumption of non-reviewability. [00:18:44] Speaker 02: In fact, one of the cases says we start with the assumption that this is an exercise of prosecutorial discretion. [00:18:51] Speaker 02: It doesn't matter. [00:18:51] Speaker 02: They still got to issue reasons, and those reasons are subject to review. [00:18:56] Speaker 02: There are two bases inconsistent with law, arbitrary, and capricious. [00:19:00] Speaker 02: That is the body of law as a circuit judge that I look at. [00:19:05] Speaker 02: That is the circuit law. [00:19:08] Speaker 02: I can't completely explain in my mind what Crew is saying, but the one thing Crew does say, and you're embracing it, and I'll give you an opportunity to explain why you think you're right, Crew says Peckle v. Candy controls [00:19:26] Speaker 02: Maybe it did in that case. [00:19:28] Speaker 02: I don't have to comment on that. [00:19:30] Speaker 02: It does not in this case. [00:19:32] Speaker 02: It absolutely does not. [00:19:33] Speaker 02: Heckle v. Cheney is not the framework that we look to to decide what to do with these cases. [00:19:41] Speaker 02: So now what is your answer to that? [00:19:46] Speaker 01: The DCC case that you pointed to [00:19:50] Speaker 01: did find that a split vote dismissal or dismissal resulting of an inability to determine one way or the other not to proceed. [00:19:59] Speaker 01: That itself was not an exercise of prosecutorial discretion. [00:20:05] Speaker 01: DCCC did not go as far as to say that if the actual merits of the decision was for the court, which as you noted, they had not provided a statement explaining their rationale, [00:20:20] Speaker 01: DCC did not address the circumstance for the act. [00:20:25] Speaker 02: Did you read Common Cause? [00:20:28] Speaker 02: Common Cause bills on DCCA takes out the problem of whether the action is consistent or inconsistent with the general counsel and it says reasons have to be given and explains why, that's a good thing. [00:20:41] Speaker 02: under this statute. [00:20:42] Speaker 02: And the two of those cases say explicitly, HECLA is not controlling. [00:20:47] Speaker 02: DCCA says that. [00:20:49] Speaker 02: HECLA is not controlling, as the Supreme Court had already said. [00:20:54] Speaker 02: That's not the proper framework. [00:20:57] Speaker 02: And the problem I have is the case you want to rely on, and maybe you have some other reasons that are good, but the case you want to rely on says, [00:21:07] Speaker 02: It is controlled by Heckel v. Cheney. [00:21:09] Speaker 02: This case is not controlled by Heckel v. Cheney. [00:21:12] Speaker 02: Absolutely not controlled by Heckel v. Cheney. [00:21:15] Speaker 02: And all the law of the circuit that I look to, and I can look to it because Sierra Club says I can, makes it clear that the framers, you've got to give reasons, and they are reviewable. [00:21:29] Speaker 02: And then Alasky tells us the two terms in which we review. [00:21:35] Speaker 01: DCC expressly disclaimed reaching the question of whether or not if the actual merits of the decision were based on prosecutors. [00:21:44] Speaker 02: Council, take Common Cause. [00:21:47] Speaker 02: DCCA was the first step. [00:21:51] Speaker 02: Common Cause is very clear in saying that it is building on DCCA and that you must give reasons and they are subject to review. [00:22:01] Speaker 02: That doesn't mean you lose on review, but you're subject to review. [00:22:05] Speaker 02: The notion you're advancing is if you invoke, if the three who opt not to proceed invoke the words exercise of prosecutorial discretion, that's the end of it and the court is not in play. [00:22:20] Speaker 02: That's absurd. [00:22:21] Speaker 02: That's nothing in the case law to support that except maybe [00:22:28] Speaker 01: That is not the FEC's position. [00:22:30] Speaker 02: Okay, so tell me a position that squares with the case law, indulging, if you will, that squares with the case law up to Crew, which I'm confused about because Crew says it rests on Heckler and I don't buy that for a half a second because we've disclaimed that and the Supreme Court has disclaimed that. [00:22:49] Speaker 02: So as a Court of Appeals judge, I can say it's not in play. [00:22:52] Speaker 02: That's wrong. [00:22:53] Speaker 02: So now how can you win with that out of the equation? [00:22:59] Speaker 01: Crew recognize that dismissals based on a no reason to believe or a finding of no violation would be judicially reviewable. [00:23:09] Speaker 01: So it would still be required for the controlling group or the full commission to set forth an explanation of what the bases are for why they're exercising their prosecutorial discretion. [00:23:23] Speaker 01: It is not the commission's position that you just say, [00:23:29] Speaker 01: the words without more prosecutorial discretion, and then that is a judicially unreviewable decision. [00:23:37] Speaker 01: No, the first one is this. [00:23:38] Speaker 02: What makes it judicially unreviewable? [00:23:40] Speaker 02: Why are you insisting that this is judicially unreviewable when the law that struck it, at least up until its last opinion, made it clear that it absolutely is reviewable? [00:23:50] Speaker 02: The terms of review, as Oloski suggests, are variable depending on the circumstances and what we face. [00:23:57] Speaker 02: But there's no question. [00:23:59] Speaker 02: And indeed, even in DCCA, Judge Ginsburg said, you know, depending upon what we're looking at, it might be easy for the agency to win in some circumstances on review, but we all assume there's a review. [00:24:13] Speaker 02: You're smiling, you understand. [00:24:15] Speaker 02: I understand. [00:24:15] Speaker 02: But tell me how you win. [00:24:17] Speaker 02: Let's assume the assumption about crew is wrong, this notion that there are circumstances under the FECA where there's no review. [00:24:25] Speaker 02: How can you win? [00:24:27] Speaker 02: Is there a way for you to prevail in this case? [00:24:30] Speaker 01: Absolutely, Your Honor. [00:24:31] Speaker 01: The decision here was not an abuse of discretion. [00:24:34] Speaker 02: So your argument is there was no abuse. [00:24:36] Speaker 02: Now tell us why is no abuse of discretion. [00:24:39] Speaker 01: That in the wake of Citizens United, where corporate entities were for the first time ever permitted to make contributions, that for the first time ever there were super PACs, where there were unlimited contributions [00:24:53] Speaker 01: to independent expenditure only political committees and where the commission had prior precedent dealing with how you determine how to attribute a contribution to the corporation versus the single member of the LLC or closely held corporation. [00:25:15] Speaker 01: If you were looking to that and commission regulations for guidance, it was not [00:25:22] Speaker 01: it was not so clear that it is abuse of discretion for the controlling commissioners to have determined to exercise their prosecutorial discretion here, to not proceed. [00:25:33] Speaker 01: In these cases, it's a first impression. [00:25:35] Speaker 02: Well, you know, this is amusing because as I recall, I may be wrong in this, my recollection is your regulation suggests that this is all an exercise of prosecutorial discretion. [00:25:46] Speaker 02: It has nothing to do with reviewability. [00:25:50] Speaker 01: I'm sorry, I'm not quite following. [00:25:51] Speaker 02: In other words, your rights say in these 3-3 situations, you're exercising prosecutorial discretion if you decide not to proceed. [00:25:59] Speaker 02: 3-3, 4-1, whatever, they're all exercises of prosecutorial discretion. [00:26:03] Speaker 01: No, the commission is not making that argument. [00:26:06] Speaker 01: That question was square on decided in DCC, and the court there said [00:26:14] Speaker 01: those types of dismissals are not in and of themselves an exercise of prosecutorial discretion. [00:26:20] Speaker 02: That avoids judicial review. [00:26:22] Speaker 01: Correct. [00:26:22] Speaker 02: There's nothing in DCCA that says any of those avoid judicial review. [00:26:27] Speaker 02: None. [00:26:27] Speaker 02: There are suggestions by Judge Ginsburg that depending upon, if you're looking at 6-0 as opposed to 2-1, 3-3, 4-2, [00:26:39] Speaker 02: It is more likely that the agency is in a stronger as opposed to a weaker position, but she never suggested for the court that it was unrevealable. [00:26:51] Speaker 01: The court expressly disclaimed reaching that issue, reaching whether or not if the actual statement of reasons explaining the decision is based on proxy total discretion. [00:27:01] Speaker 01: And it was very careful to do so. [00:27:06] Speaker 01: limited what it was saying, it said presumably that type of decision would be reviewable. [00:27:12] Speaker 01: Or assuming, arguing though, that that type of decision is reviewable then. [00:27:16] Speaker 02: You keep forgetting common cause which built on DCCA. [00:27:19] Speaker 02: Common cause didn't hedge on that question. [00:27:21] Speaker 02: Common cause is clear that it's reviewable. [00:27:25] Speaker 02: That these decisions are reviewable, whether you win or lose is a different issue, but there's no question that they're reviewable. [00:27:32] Speaker 01: There was no exercise of prosecutorial discretion that was before the court and in the common cause. [00:27:37] Speaker 02: What I'm trying to suggest to you is your own regulations suggest that going through this whole thing is an exercise of prosecutorial discretion when you decide not to proceed. [00:27:46] Speaker 02: But as Judge Griffith said in voicing concerns about crew, that's kind of a so what point because we have added to that and made it very clear whether you think you're exercising prosecutorial discretion or not. [00:28:01] Speaker 02: You have to give reasons and we can review them. [00:28:07] Speaker 01: The FEC agrees that we have to give reasons. [00:28:11] Speaker 01: The FEC is not taking the position that [00:28:14] Speaker 01: just the sole fact that there is a split vote dismissal is itself an exercise of prosecutorial discretion. [00:28:22] Speaker 01: Our position is that Commission on Hope very clearly says that when the controlling group says that the bases of its dismissal are prosecutorial discretion, then that type of a decision is not traditionally reviewable. [00:28:38] Speaker 02: And that makes sense to you? [00:28:41] Speaker 02: Under established case law? [00:28:43] Speaker 02: I mean, come on. [00:28:44] Speaker 02: We're friends. [00:28:48] Speaker 02: I know you're questioning that now. [00:28:50] Speaker 02: Does that make sense to you about case law? [00:28:55] Speaker 05: That's not what the case law says. [00:28:57] Speaker 05: You don't have to acknowledge whether you're friends or not. [00:29:01] Speaker 01: You can be my new best friend. [00:29:02] Speaker 01: How about that? [00:29:05] Speaker 01: There is a distinction between whether or not the court could have gone the other way. [00:29:12] Speaker 01: in Crewe versus whether or not that those holding, that holding was so contrary to actual binding holdings, not dicta, of prior cases such that this court has the capability of disregarding it. [00:29:32] Speaker 01: And the decisions that... They didn't even cite the prior holdings. [00:29:38] Speaker 04: And Orlowski is not dicta. [00:29:41] Speaker 04: Orlowski is not dictum. [00:29:43] Speaker 04: The language of Orlowski is not dictum. [00:29:45] Speaker 01: The Orlowski case also did not deal with a case of prosecutorial discretion. [00:29:51] Speaker 01: It didn't at all address that situation in any way. [00:29:56] Speaker 01: It didn't purport to be even considering it. [00:30:01] Speaker 01: In Orlowski, the court was saying, when you have a reviewable decision, here's how we're going to conduct our review of that decision. [00:30:10] Speaker 01: But it didn't purport to say one way or another that in cases where the commission has expressly invoked its prosecutorial discretion as the basis for not going forward, that that was usually reviewable. [00:30:21] Speaker 02: It's not the commission. [00:30:22] Speaker 02: It's three people. [00:30:25] Speaker 01: That is correct. [00:30:26] Speaker 02: That's right. [00:30:26] Speaker 02: That's why your regs read the way they are, because you assume in your regs, at least implicitly, that it's only when you have more than three that you can even claim prosecutorial discretion. [00:30:36] Speaker 02: But we don't even have to get there, because the case law assumes. [00:30:39] Speaker 02: I just want to know. [00:30:40] Speaker 02: Are you very comfortable in saying, look Judge Edgers, whatever, I understand your quibbles, but we can win no matter what, no matter how you read crew, we can win because using Oloski and using those tests, we meet them. [00:30:53] Speaker 02: If we're reviewable, we meet them. [00:30:55] Speaker 02: Are you comfortable with that argument? [00:30:57] Speaker 01: Absolutely, Your Honor. [00:30:58] Speaker 02: And your argument there is abuse of discretion? [00:31:01] Speaker 01: Yes. [00:31:02] Speaker 02: Your argument is not abuse of discretion. [00:31:05] Speaker 02: It's not, it's not. [00:31:05] Speaker 02: Yes, sorry. [00:31:06] Speaker 02: I wasn't trying to trap you. [00:31:07] Speaker 01: You're friends. [00:31:08] Speaker 04: Everybody's friends. [00:31:09] Speaker 04: Great. [00:31:09] Speaker 04: I want to ask you about just one sentence in CRU. [00:31:13] Speaker 04: You tell me what you think it means. [00:31:15] Speaker 04: CRU cites Hackler and Akins, and then it says, quote, if the commission declines to bring in enforcement action on the basis of its interpretation of FECA, the commission's decision is subject to judicial review to determine whether it is contrary to law. [00:31:32] Speaker 04: What do you think that sentence means? [00:31:35] Speaker 01: That, the court was drawing a distinction between the circumstances that were, as an example, what were the circumstances in Aiken's case before the Supreme Court. [00:31:48] Speaker 01: There were two claims at issue in the underlying administrative matter that ended up coming before the court. [00:31:55] Speaker 01: The first was that there was a corporate contribution ban violation. [00:32:01] Speaker 01: And there the commission did find probable cause but determined to exercise their prosecutorial discretion and dismiss. [00:32:09] Speaker 01: For the other claim, the political committee claim, the commission found an affirmative no reason to believe. [00:32:20] Speaker 01: So they affirmatively found that no violation occurred. [00:32:25] Speaker 01: And that is the line that the crew case is referring to. [00:32:30] Speaker 01: because when you don't have a violation, or when the commission believes that there is no violation, then you squarely can apply FICA, because there are none of the discretionary considerations that you have when you're exercising prudential review that are particularly difficult, as the Court noted, in chaining context, to assess. [00:32:52] Speaker 04: And why isn't that this case? [00:32:54] Speaker 04: Why isn't that this case? [00:32:58] Speaker 04: In this case? [00:33:00] Speaker 04: The commission exercised its discretion not to prosecute because of constitutional concerns. [00:33:07] Speaker 04: Notice, due process. [00:33:10] Speaker 04: Those are classically reviewable decisions. [00:33:14] Speaker 01: There was no determination here that there was no reason to believe. [00:33:19] Speaker 01: In fact, the controlling group recognized that there were circumstances [00:33:27] Speaker 01: that may lend themselves to pursuing a straw donor enforcement matter, that is distinct from actually finding no reason to believe or no probable cause because there is no violation. [00:33:42] Speaker 01: And that was the type of claim that was in front of the Supreme Court in Akins. [00:33:50] Speaker 01: Does that distinction make sense? [00:33:55] Speaker 04: No. [00:34:03] Speaker 04: The commission has no authority to proceed under this provision of the statute unless it makes a no reason to believe determination, isn't it right? [00:34:14] Speaker 01: That's correct. [00:34:16] Speaker 04: So this decision has to rest on a determination by the three that there's quote no reason to believe that a violation occurred, right? [00:34:26] Speaker 01: No, absolutely not. [00:34:27] Speaker 01: There are several instances where there's several things that can happen after an administrative complaint is filed. [00:34:34] Speaker 01: The primary three are you find reason to believe, you find no reason to believe, or you dismiss in an exercise of prosecutorial discretion. [00:34:44] Speaker 01: Those are the three ways that primarily the commission will go forward with the matter. [00:34:49] Speaker 01: But when you're exercising prosecute discretion, you are not necessarily determining one way or the other. [00:34:54] Speaker 01: And here they define to do it. [00:34:55] Speaker 04: Where is that in the statute? [00:34:57] Speaker 04: Where does the statute give the authority to? [00:35:03] Speaker 04: If it's not willing to make, if it isn't making no reason to believe the term, where does it get the authority to not proceed for other reasons? [00:35:11] Speaker 01: So if you're looking, I apologize, I can't remember the exact provision. [00:35:17] Speaker 04: Nobody can remember these numbers. [00:35:19] Speaker 01: But if I may. [00:35:21] Speaker 04: No, go ahead, try. [00:35:23] Speaker 01: Here we go. [00:35:26] Speaker 01: It recognizes in 30109A1 that the commission has the right to dismiss. [00:35:37] Speaker 01: prior to making a determination whether or not there's reason to believe. [00:35:41] Speaker 01: The restriction is that if they are going to make a reason to believe. [00:35:47] Speaker 04: What provision are you reading from? [00:35:48] Speaker 01: 30109A1. [00:35:53] Speaker 04: A1. [00:35:59] Speaker 01: And it's a long paragraph, but towards the end it says, for the commission conducts any vote on the complaint. [00:36:07] Speaker 01: Other than a vote to dismiss, any person, any respondent essentially, has the opportunity to demonstrate that no action should be taken against the person. [00:36:18] Speaker 01: So, FECA is expressly recognizing the commission's ability to dismiss a matter without making, first making a termination whether or not there is or is not reason to believe. [00:36:35] Speaker 01: The limits on [00:36:37] Speaker 01: this authority is if they are going to proceed in an enforcement matter, then they have certain boxes that they need to tick before they're going to go to court and seek to enforce an enforcement matter. [00:36:53] Speaker 01: But these are pre-filing requirements. [00:36:55] Speaker 01: There's nothing in here anyway that expressly limits their authority to determine to dismiss. [00:37:07] Speaker 01: without making a reason to believe determination, which they did not in this case, for example. [00:37:15] Speaker 05: So on the statute alone, I mean, I think the problem is the statute doesn't really tell us what to do in a case of 3-3s. [00:37:23] Speaker 05: And so some of our case law overlays on that. [00:37:27] Speaker 05: But on the statute alone, it says in 8-2 that in order to go forward, that is to make an investigation, there has to be an affirmative vote of 4. [00:37:37] Speaker 05: So if there's not an affirmative vote of four, which is here, you can't go forward. [00:37:43] Speaker 05: It doesn't say you dismiss, it just says you can't go forward. [00:37:46] Speaker 05: So I suppose the commission could just do nothing. [00:37:53] Speaker 01: It could, and PICA has a provision where if the decision's taking too long, so to speak, then they can come into court. [00:38:04] Speaker 05: So that kicks you over into eight, I think, right? [00:38:07] Speaker 05: That would then? [00:38:09] Speaker 01: Yeah. [00:38:09] Speaker 01: Eight A, I believe. [00:38:11] Speaker 05: The failure to act. [00:38:12] Speaker 05: Yes. [00:38:13] Speaker 05: Actually, I think it's eight C. You have to dismiss a little complaint or the failure to act is contrary to law. [00:38:22] Speaker 05: Okay, thank you. [00:38:23] Speaker 05: Further questions? [00:38:24] Speaker 05: No. [00:38:24] Speaker 05: Okay, we'll hear from our other friend if our other friend has any time. [00:38:28] Speaker 05: Two minutes. [00:38:41] Speaker 00: Two things. [00:38:45] Speaker 00: One, there seems to be some confusion as to what the vote in this case was. [00:38:49] Speaker 00: The commissioners here did not vote directly on whether to dismiss as a matter of prosecutorial discretion. [00:38:55] Speaker 00: They could do so, and if they had four votes, then the matter would be dismissed as a matter of prosecutorial discretion. [00:39:00] Speaker 00: Instead, they voted on whether to find reason to believe, [00:39:03] Speaker 00: that FECA 301-22 was violated, and the three commissioners here found no reason to believe that it had been violated. [00:39:09] Speaker 00: That is the operative vote. [00:39:10] Speaker 00: If you look at the administrative record materials, that is what they decided here. [00:39:15] Speaker 00: They did not attempt to find no reason to believe. [00:39:18] Speaker 00: They did not attempt to simply make no determination. [00:39:22] Speaker 00: Instead, they found no reason to believe. [00:39:25] Speaker 00: I wanted to also address [00:39:27] Speaker 00: opposing counsel's statement that they based their decision on the preference not to enforce against matters of first impression. [00:39:36] Speaker 00: That they believe that because of Citizens United this is the first time you see corporate donations and therefore they would prefer to regulate conservatively and not go after these respondents. [00:39:47] Speaker 00: That was only the beginning of their analysis. [00:39:49] Speaker 00: They then stated that even on the fact that these cases, applying 301-22, [00:39:54] Speaker 00: a clear statute to clear violations would violate respondents due process and fair notice rights. [00:40:00] Speaker 00: It would violate respondents constitutional rights. [00:40:02] Speaker 00: So it wasn't a matter of enforcement priorities or enforcement preferences. [00:40:07] Speaker 00: They believed that going forward here would violate the due process rights of the respondents. [00:40:12] Speaker 00: Furthermore, they said that applying 301-22 as written would violate the First Amendment rights of corporations. [00:40:18] Speaker 00: They said it would hollow out the rights to do so without the intent that they devised. [00:40:24] Speaker 00: Nothing further. [00:40:26] Speaker 00: Both of these were errors of law. [00:40:28] Speaker 00: In contrary to law, they should be reversed. [00:40:30] Speaker 05: Okay, there being no further questions, we'll take the matter under submission. [00:40:33] Speaker 05: We may call the next case.