Our Case to End Super PACs Advances to the Federal Appeals Court

Today, we filed an early brief in the U.S. Court of Appeals for the D.C. Circuit in Lieu v. Federal Election Commission, the case that could end super PACs. The goal of the Lieu litigation is to give the D.C. Circuit, or the Supreme Court, the opportunity to overturn the D.C. Circuit’s 2010 SpeechNow decision that created super PACs. This brief is not the full case brief, but rather a response to a motion by the Federal Election Commission seeking to cut off our opportunity to make the case in full.

The case has attracted the interest of three groups of amici curiae (friends of the court) supporting our challenge: U.S. Senator Sheldon Whitehouse; Citizens for Responsibility and Ethics in Washington; and a group of empirical scholars led by Professor Christopher Robertson of the University of Arizona Law School. Of note, Senator Whitehouse’s notice of intent to participate as amicus curiae in this case specifically stated that he “strongly opposes”  the FEC’s motion.

BACKGROUND

Contrary to a common misunderstanding, super PACs were not created by the Supreme Court’s Citizens United decision, but by a later decision of the intermediate federal court of appeals, SpeechNow.org v. FECIn SpeechNow, the U.S. Court of Appeals for the D.C. Circuit concluded that the federal law limiting contributions to political action committees to $5,000 per person per year did not apply to political committees that promised to make only “independent expenditures.” As explained by scholars and experts in political corruption and constitutional law, the SpeechNow ruling was legally erroneous at the time under Supreme Court precedent (including Citizens United).

Unfortunately, then-Attorney General Eric Holder decided not to appeal SpeechNow to the Supreme Court, on the (clearly mistaken in retrospect) theory that the SpeechNow decision would “affect only a small subset of federally regulated contributions.” This prediction, like the court’s speculation that contributions to super PACs could not lead to corruption or the appearance of corruption, has proven incorrect with time. To this day, the Supreme Court has not reviewed the question. As a result, super PACs have become one of the primary vehicles for wealthy donors to evade campaign contribution limits designed to prevent corruption and the appearance of corruption.

Lieu v. Federal Election Commission seeks to present the courts with an opportunity to overrule SpeechNow. This case began in 2016, when Representative Ted Lieu (D-Cal.), the late Rep. Walter Jones (R-N.C.), Senator Jeff Merkley (D-Or.), State Senator (ret). John Howe (a Republican congressional candidate from Minnesota), Zephyr Teachout (a Democratic congressional candidate from New York), and Michael Wager (a Democratic congressional candidate from Ohio) filed an administrative complaint before the FEC, naming as respondents ten super PACs that had received contributions from single donors ranging from $300,000 to $5,000,000—far in excess of the existing, still-on-the-books federal $5,000 contribution limit.

WINNING IN THE EN BANC D.C. CIRCUIT

In the D.C. Circuit, which decided SpeechNow, we believe that the en banc (full) court may welcome an opportunity to reconsider SpeechNow. First, the court may appreciate the opportunity for more considered reflection in light of the developments of the past decade. SpeechNow was argued just six days after Citizens United, and few anticipated how it could lead to the creation of the super PAC—certainly not then-Attorney General Eric Holder, who decided not to appeal SpeechNow to the Supreme Court, on the (clearly mistaken in retrospect) theory that the SpeechNow decision would “affect only a small subset of federally regulated contributions.” The factual record, both in the case and in the judges’ understanding of the real world, shows how super PACs have threatened to swallow the entire campaign finance system.

Furthermore, the composition of the D.C. Circuit has changed: three judges who joined the SpeechNow decision (including its author) have left the court or taken senior status, and five new judges have joined the court since SpeechNow: one appointed by President Trump, and four appointed by President Obama. These new judges may have little compulsion to adhere to an earlier mistake. Consequently, we advised the court at the outset of the appeal that we plan to file a petition for initial hearing en banc.

Recent Developments

Before we had a chance to file the petition for initial hearing en banc, the Federal Election Commission filed a motion for summary affirmance, arguing that the case was so clear that there was no point in full briefing.

Today, we filed our response brief, arguing that the motions panel should not act on the FEC’s motion until the court has ruled on our forthcoming petition for initial hearing en banc. We also included a brief preview of the arguments that we will raise in that petition, and on the merits of the argument, to persuade the en banc court to overrule SpeechNow.

The case has attracted the interest of three groups of amici curiae (friends of the court) supporting our challenge: U.S. Senator Sheldon Whitehouse; Citizens for Responsibility and Ethics in Washington; and a group of empirical scholars led by Professor Christopher Robertson of the University of Arizona Law School. Of note, Senator Whitehouse’s notice of intent to participate as amicus curiae specifically stated his opposition to the FEC’s motion:

Senator Whitehouse has participated in three federal election campaigns and has served in the United States Senate for over 12 years. In his amicus brief, he intends to provide the Court with practical, political, and historical context to the legal arguments in the case based on his firsthand experience with the corrosive and corrupting effects that unlimited contributions have on our elections and democratic institutions. Senator Whitehouse is aware that the Federal Election Commission has filed a motion for summary affirmance  and strongly opposes such a motion as it would deny him the opportunity to participate as an amicus in this matter and would deny the Court the opportunity to learn his perspectives (and potentially those of other Members of Congress) on the effects that unlimited contributions have had on elections.

Excerpt: Introduction to our response brief

This is not an ordinary case. The goal of this litigation under the Federal Election Campaign Act (FECA) is to modify or reverse existing law on a question of exceptional importance: whether the First Amendment requires that political spending vehicles known as super PACs (technically, “independent expenditure-only committees”) be allowed to accept unlimited contributions for the purpose of influencing federal elections. The plaintiffs below—Representative Ted Lieu (D-Cal.), the late Representative Walter Jones (R-N.C.), Senator Jeff Merkley (D-Or.), and three 2016 congressional candidates from both major political parties—brought this action on the eve of the 2016 election to establish that existing federal limits on contributions to super PACs are, in fact, constitutional and enforceable.

This Court considered this question before, more abstractly, in SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010) (en banc). That decision—which birthed the modern super PAC and radically transformed American politics—rested entirely on a misapplication of a single sentence in Citizens United to the effect that “independent” expenditures cannot corrupt or even create an appearance of corruption. From this premise, SpeechNow purported to reason syllogistically that contributions to political committees that make only independent expenditures cannot cause corruption, or even the appearance of corruption. Believing that SpeechNow would affect “only a small subset of federally regulated contributions,” the government declined to seek Supreme Court review, and the nation entered the age of the super PAC.

But SpeechNow’s reasoning was flawed. The supposed syllogism rested on an unstated and inaccurate premise: that when a political contributor gives money to a third party (i.e., a person or entity other than the politician), this contribution can only be part of a quid pro quo exchange if the third party then spends the money in a way that is itself corrupting. That premise, however, is simply wrong. As bribery law recognizes, politicians sometimes value large contributions made to favored third parties, regardless of how those third parties spend the money. And a donor to a super PAC can reach a corrupt agreement with a candidate without even involving the super PAC’s employees in the conversation.

The SpeechNow decision’s seemingly neat logical conclusion has been undermined by nearly a decade’s actual experience with super PACs in real life—including substantial empirical evidence of the appearance of corruption, and two federal indictments (and one conviction) for bribery of a type that, according to SpeechNow, is legally impossible. With American elections increasingly dominated by super PACs, the question of whether six or seven-figure contributions to these entities can pose any risk of corruption—or even the appearance of corruption—is ripe for revisiting.

Representative Lieu, Senator Merkley, and the other appellants brought this case for just that purpose. They acknowledged at every stage—before the Federal Election Commission (FEC) and again before the district court—that SpeechNow remains the law of this circuit. The FEC’s effort to preempt en banc consideration of the merits is misguided. As this Court has noted in a similar context, even for a Supreme Court decision (which SpeechNow was not), “what may appear to be ‘settled’ Supreme Court constitutional law sometimes turns out to be otherwise,” and “it is entirely possible to mount a non-frivolous argument against what might be considered ‘settled’ Supreme Court constitutional law.” Holmes v. FEC, 823 F.3d 69, 73-74 (D.C. Cir. 2016). The Court’s observation is even more true of a circuit decision—even an en banc decision. Indeed, whenever someone challenges an appellate precedent, they must initiate the challenge in an agency or lower court that is bound by the precedent. The challenge does not fail simply because the agency or lower court must follow this precedent. If that were so, unfortunate decisions could never be overruled.

Representative Lieu, Senator Merkley, and the other appellants seek to make their case for revisiting a historically fraught decision on one of the most critical questions affecting our democracy today. They challenged SpeechNow, not because they expected the FEC or the district court to overrule it, but simply to preserve their claims for appeal. Contrary to the FEC’s assertion, appellants do not argue that the FEC “was required to disregard a clear and binding holding on a constitutional issue.” They argue that the FEC’s ruling was contrary to law because SpeechNow is contrary to law.

The FEC, however, seeks to cut appellants short before they have had an opportunity to make their case. This Court should reject the FEC’s attempt to deny appellants their opportunity, and instead hold the FEC’s motion in abeyance pending a decision on appellants’ forthcoming petition for initial hearing en banc or, in the alternative, deny the motion.


Learn more about Lieu v. FEC.

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