Campaign Finance Law Altering PAC Contribution Limits After Waiting Period O.K. Under First Amendment – Fourth Circuit

Stop Reckless Economic Instability Caused by Democrats v. FEC.

Four PACs appealed a district court’s grant of summary judgment against them in their suit against the FEC. The PACs challenged the constitutionality of contribution limits under the Federal Election Campaign Act of 1971 (FECA).  52 U.S.C. §§ 30101–30146. The Fourth Circuit concluded that two of their three claims were moot before the summary judgment order was even entered and affirmed the district court on the third.

FECA regulates PACs and political spending. A group that meets the definition of a PAC must register with the FEC. PACs can be specific to a candidate, or non-connected.

Donations from PACs are limited. Donations from PACs to individual candidates are governed by the same restrictions limiting contributions by persons. Because a PAC is a “person” like a corporation is a “person.” However, non-connected PACs could donate more if they satisfied three criteria: (1) registration with the FEC for six months, (2) contributions from more than 50 persons (3) made to five or more candidates. If they meet these criteria, they are a “multicandidate” PAC (MPC).

Donations from PACs to party committees are also limited, and MPCs contribution limit is slightly lower than that of other persons.

In December 2014, FECA was amended to allow party committees to divide their budget into three buckets (convention, building headquarters and election related legal expenses). Contributions to each of the three buckets are three times the limits for other contributions to party committees.

Plaintiffs filed suit in April 2014. Counts I and II of their complaint related to the limit on contributions made to candidates by PACs that are not MPCs. Those counts were rendered moot when the PACs were no longer subject to the limitations they challenged.

Count III alleged that annual limits on contributions by MPCs to national and state party committees violate the equal protection component of the due process clause as PACs that have not completed the waiting period but have satisfied the other requirements get the higher limit. This challenge, the opinion states, is “capable of repetition, yet evading review,” and so not moot.

Still, the PACs’ argument failed. The Court writes:

…in our estimation, Appellants cannot show that FECA overall burdens the First Amendment rights of political committees that have become MPCs more than it burdens the rights of political committees that have satisfied all MPC requirements but the waiting period. That is so because the decrease in the amount of contributions that political committees, once they become MPCs, can make annually to state party committees or their local affiliates (from $10,000 to $5,000) and to national party committees (from $32,400 to $15,000) is more than counteracted by the increase in the limits in the amount of contributions that MPCs can make to individual candidates (from $2,600 to $5,000). To the extent that there is a difference in treatment, it appears to us to favor the MPCs in that the total amount of money MPCs can contribute overall will be substantially greater since there are so many different individual candidates to which the respective entities can contribute. Because Appellants cannot demonstrate that FECA discriminates against MPCs, there is no discrimination to be justified, and we conclude that the FEC was entitled to summary judgment on Count III.

(Emphasis in original).

There is a lot of meat in this opinion that I have glossed over or simply skipped. In this election cycle, it may be a good idea for election law practitioners, PAC and campaign secretaries to do a deeper read.