United States Defense Committee and Patrick Reilly, Appellants, v. Federal Election Commission and William F. Smith, in Hisofficial Capacity As Attorney General of Theunited States, Appellees, 861 F.2d 765 (2d Cir. 1988)

This case presents the question whether an advisory opinion rendered by an administrative agency is reviewable. The advisory opinions in this case were sought by the United States Defense Committee ("USDC") and Patrick Reilly. USDC is a non-profit corporation exempt from federal income tax under 26 U.S.C. § 501(c) (4) (1982) which lobbies on national defense and foreign policy issues. Its membership includes individuals, partnerships and corporations, including business corporations, which contribute to USDC's treasury. Patrick Reilly is a member of the USDC Board of Directors who resides in the Northern District of New York. The agency involved is the Federal Election Commission ("FEC"), which administers and enforces the Federal Election Campaign Act of 1971, as amended, codified at 2 U.S.C. §§ 431-455 (1982) ("FECA" or the "Act"). The FEC also administers the Presidential Election Campaign Fund Act, 26 U.S.C. §§ 9001-9013 (1982 & Supp. IV 1986) ("Fund Act"), and the Presidential Primary Matching Payment Account Act, 26 U.S.C. §§ 9031-9042 (1982) ("Matching Payment Act").

The advisory opinions that were sought by USDC and Reilly relate to two draft letters which discuss candidates' views on defense issues. USDC proposed to issue these letters using funds from its corporate treasury, including funds furnished by business corporations which are prohibited from engaging in certain election activities by section 441b of FECA. The United States District Court for the Northern District of New York, Con. G. Cholakis, Judge, held that it had jurisdiction to entertain the case, contrary to the FEC's assertion. But the district court did hold for the FEC on the merits, declaring that USDC's proposed communications were prohibited by FECA section 441b, and that USDC did not qualify for the exemption from section 441b established in FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238, 107 S. Ct. 616, 93 L. Ed. 2d 539 (1986). Because we do not think that the complaint presented claims ripe for court adjudication, the judgment of the district court is vacated and the case is remanded with instructions to dismiss the complaint.

PROCEDURAL HISTORY

The two draft letters prepared by USDC, which discuss some imaginary candidates' answers to a questionnaire about future defense issues, are set forth in the margin.¹ These letters were among several proposed activities that USDC put before the Commission on October 13, 1983, in a request for an advisory opinion pursuant to 2 U.S.C. § 437f(a) (1).²  In this request, USDC proposed to use funds from its corporate treasury to publish and distribute information about candidates just before primary or general elections. This information included the number of times and the specific ways in which the candidates' responses comported with USDC's views. USDC also proposed to disseminate the voting records of members of Congress on legislation of interest to USDC. The Commission responded in Advisory Opinion ("AO") 1983-43, 1 Fed.Election Camp.Fin.Guide (CCH) p 5746 (Jan. 26, 1984), concluding that USDC's financing of some of the proposed activities would be prohibited by section 441b.

On March 28, 1984, USDC filed this lawsuit to challenge the validity of the advisory opinion on statutory and constitutional grounds. USDC asked the district court to certify constitutional questions to the court of appeals sitting en banc pursuant to the unique provisions of 2 U.S.C. § 437h(a). Meanwhile, the Commission amended its regulations, and USDC obtained a second advisory opinion, AO 1984-14, 1 Fed.Election Camp.Fin.Guide (CCH) p 5761 (May 25, 1984), in which the Commission reiterated its earlier determination. After the second advisory opinion, USDC amended its complaint but retained its request that the district court certify questions to the en banc court pursuant to section 437h(a). The Commission moved to dismiss the complaint, and USDC moved again for certification. The district court never ruled on USDC's and the FEC's motions, but took them under advisement.

On January 22, 1987, USDC requested a third advisory opinion in light of the Supreme Court's decision in FEC v. Massachusetts Citizens for Life, Inc., supra. In response, the Commission issued AO 1987-7, 1 Fed.Election Camp.Fin.Guide (CCH) p 5889 (Apr. 6, 1987), which superseded the previous two opinions. This opinion concluded that Massachusetts Citizens for Life did not apply to USDC's case because USDC, unlike MCFL, accepts contributions from business corporations. The Commission did not issue an advisory opinion on USDC's proposed publication of incumbents' voting records because it lacked the affirmative vote of four members required under 2 U.S.C. § 437c(c).³  As for the proposed dissemination of candidate responses to USDC questionnaires, the Commission declined to comment on newspaper advertising since no "specific factual description of this activity was provided." AO 1987-7, at n. 1. However, it determined that the two draft letters, note 1 supra, were not exempt under the regulations, 11 C.F.R. Sec. 114.4(b) (5), and therefore violated section 441b in view of their proximity to the election and their advocacy of specific candidates.

After the third advisory opinion, USDC again amended its complaint and challenged only the Commission's conclusion in AO 1987-7 that distribution of the two draft letters could not be financed from USDC's corporate treasury. In this amended complaint, USDC also abandoned its request for certification of constitutional questions to the en banc court pursuant to section 437h. Instead, it requested declaratory and injunctive relief directly from the district court. That court, as we have said, found that it had jurisdiction, but held for the Commission on the merits.

DISCUSSION

On appeal the Commission renews its argument that the district court lacked jurisdiction. While we believe that the district court did have jurisdiction, we think that the Commission's arguments concerning jurisdiction do go to ripeness. We will therefore set forth the assertions made. To do so, however, we must first detail the Act's administrative scheme.

FECA, together with the Fund Act and the Matching Payment Act, limit federal election campaign contributions and expenditures, require extensive disclosure and provide for public funding of presidential campaigns. The Commission administers the three acts and formulates policy that concerns them. It has six voting members, no more than three of whom may be affiliated with the same political party, 2 U.S.C. § 437c(a) (1), and, as we have said, the affirmative vote of four members of the Commission is required for any formal agency action, section 437c(c), note 3 supra. The Commission has broad duties as administrator. See, e.g., 2 U.S.C. § 438(a), (b). It also has "exclusive jurisdiction with respect to the civil enforcement" of the Act, 2 U.S.C. § 437c(b) (1), and there is an elaborate administrative process for such civil enforcement. Under section 437g and the Commission regulations, 11 C.F.R. Pt. 111, upon receipt of a sworn administrative complaint alleging violations, the Commission is to notify the object of the complaint and that person has fifteen days to demonstrate in writing that no action should be taken. 2 U.S.C. § 437g(a) (1), 11 C.F.R. Secs. 111.5, 111.6. If the Commission finds "reason to believe" that a violation has occurred, the respondent is notified under 2 U.S.C. § 437g(a) (2), 11 C.F.R. Sec. 111.9(a), and may submit a legal and factual response to the "reason to believe" finding. The statute then provides for an investigation. 2 U.S.C. § 437g(a) (2). A respondent may initiate discussions towards resolving the matter through conciliation. 11 C.F.R. Sec. 111.18(d). After the investigation is completed, the General Counsel must forward to the respondent a brief on the issues involved and the respondent may reply. 2 U.S.C. § 437g(a) (3), 11 C.F.R. Sec. 111.16. The Commission then determines whether there is "probable cause to believe" that a violation has occurred. 2 U.S.C. § 437g(a) (4) (A) (i). If so, the Commission must "attempt ... to correct or prevent such violation by informal methods of conference, conciliation, and persuasion, and to enter into a conciliation agreement." Id. If conciliation efforts are unavailing, the Commission's only recourse is to bring a civil suit in district court. 2 U.S.C. § 437g(a) (6) (A).

The Commission argues that the district court lacks jurisdiction over this lawsuit because Congress provided for judicial review of issues concerning the Act's application only after they are first channeled through the administrative process described above, which was designed in part to ensure that sufficient efforts are made to resolve issues without litigation. The Commission says that Congress did not intend to permit organizations that wanted to bypass the statute's detailed administrative and judicial review provisions to obtain advance judicial approval of every particular letter that they might want to distribute. In Bread Political Action Committee v. FEC, 455 U.S. 577, 102 S. Ct. 1235, 71 L. Ed. 2d 432 (1982), a case involving a statutory question of who may challenge the constitutionality of FECA in specially expedited suits, the Court said that "plaintiff's meeting the usual standing requirements can challenge provisions of [FECA] under the federal-question jurisdiction granted the federal courts by 28 U.S.C. § 1331 (1976 ed., Supp. IV)." 455 U.S. at 585, 102 S. Ct. at 1240. The USDC probably does have standing since it has sought advisory opinions and its complaint did assert jurisdiction under 28 U.S.C. § 1331(a). But we need not determine whether the statement in Bread would support jurisdiction to hear this case.

We agree that the thrust of the Commission's argument goes to determining ripeness of the controversy. To decide whether the controversy is ripe for adjudication we must examine the provisions of FECA relating to advisory opinions. 2 U.S.C. § 437f, note 2 supra. There must be a "complete written request" concerning the application of the Act or the Fund Act or the Matching Payment Act or a rule or regulation prescribed by the Commission, "with respect to a specific transaction or activity by the person." 2 U.S.C. § 437f(a) (1). The Commission must then make the request public and accept written comments submitted by any interested party within the ten-day period following the date that the request was made public. 2 U.S.C. § 437f(d). The Commission then issues a written advisory opinion, if there are at least four members who vote to do so, within sixty days of the written request. 2 U.S.C. § 437f(a) (1).⁴ 

A rule of law may initially be proposed by the Commission only as a rule or regulation pursuant to very elaborate procedures involving submission of the rule or regulation to the Congress. 2 U.S.C. § 438(d).⁵  No opinion of an advisory nature interpreting such a rule or regulation may be issued by the Commission except in accordance with that requirement. 2 U.S.C. § 437f(b).⁶  Advisory opinions are binding only in the sense that they may be relied on affirmatively by any person involved in the specific transaction or activity discussed in the opinion or in any materially indistinguishable transaction or activity. Any person who in good faith acts in accordance with an advisory opinion shall not be subject to any sanction, notwithstanding any other provision of law. 2 U.S.C. § 437f(c). On the other hand, to the extent that the advisory opinion does not affirmatively approve a proposed transaction or activity, it is binding on no one--not the Commission, the requesting party, or third parties.

Nothing in the legislative history of section 437f indicates that Congress thought advisory opinions would be reviewable. See S.Conf.Rep. No. 1237, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News 5587, 5618, 5667-68; S.Rep. No. 677, 94th Cong., 2d Sess. 6-7, reprinted in 1976 U.S.Code Cong. & Admin.News 929, 934-35; H.R.Rep. No. 422, 96th Cong., 1st Sess. 20, reprinted in 1979 U.S.Code Cong. & Admin.News 2860, 2880. To be sure, if the Commission fails to publish notice of a request for an advisory opinion, thereby denying other parties the opportunity to comment, then interested parties challenging the advisory opinion on the grounds that they were not furnished with notice would present a justiciable, ripe issue. National Conservative Political Action Comm. v. FEC, 626 F.2d 953, 958 (D.C. Cir. 1980). But an advisory opinion itself is not so final or binding that it is reviewable. In ITT v. International Brotherhood of Electrical Workers, 419 U.S. 428, 443-44, 95 S. Ct. 600, 609-10, 42 L. Ed. 2d 558 (1975), the Court held that determinations under section 10(k) of the National Labor Relations Act were final dispositions only in a "tautological sense," and so were not reviewable. Similarly, an FEC advisory opinion is final only in a "tautological sense." Indeed, if a person proceeded to act contrary to an FEC advisory opinion, she would be entitled to all of the enforcement protections, including conciliation, conference, persuasion and the like, provided under 2 U.S.C. § 437g. How may we call an advisory opinion "final" if the FEC might later be convinced to change its mind and agree to a compromise?

As Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S. Ct. 1507, 1515, 18 L. Ed. 2d 681 (1967), holds, the ripeness doctrine is designed

to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties. The problem is best seen in a two-fold aspect, requiring us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.

See also Seafarers Int'l Union v. United States Coast Guard, 736 F.2d 19, 25-29 (2d Cir. 1984); American Fed'n of Gov't Employees v. O'Connor, 747 F.2d 748 (D.C. Cir. 1984) (advisory opinion issued by special counsel as to the Hatch Act's application to voting registration drives conducted by members of public sector unions not ripe for judicial review), cert. denied sub nom. National Treasury Employees Union v. O'Connor, 474 U.S. 909, 106 S. Ct. 279, 88 L. Ed. 2d 243 (1985); Clark v. Valeo, 559 F.2d 642 (D.C. Cir.), aff'd sub nom. Clark v. Kimmitt, 431 U.S. 950, 97 S. Ct. 2667, 53 L. Ed. 2d 267 (1977); cf. Allied Corp. v. U.S. Int'l Trade Comm'n, 850 F.2d 1573, 1578-79 (Fed. Cir. 1988) (Federal Circuit has no jurisdiction to review advisory opinion of United States International Trade Commission relating to unfair practices in import trade because such opinions are not "final determinations" under 28 U.S.C. § 1295(a) (6) (1982) and section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337)).

Moreover, we note that the advisory opinion at issue here is particularly inappropriate for judicial resolution at this time. As a consequence of the Supreme Court's decision in FEC v. Massachusetts Citizens for Life, the Commission is engaged in a rulemaking proceeding which could alter the very regulations applied in that opinion. See 53 Fed.Reg. 416-18 (Jan. 7, 1988) (advance notice of proposed rulemaking).⁷  Cf. Seafarers International Union, 736 F.2d at 29.

Appellants' reply brief quotes Martin Tractor Co. v. FEC, 627 F.2d 375, 388 (D.C. Cir.), cert. denied sub nom. National Chamber Alliance for Politics v. FEC, 449 U.S. 954, 101 S. Ct. 360, 66 L. Ed. 2d 218 (1980), which said that the "advisory opinion mechanism is also a relatively riskless controversy-ripening tool." They also cite Anderson v. FEC, 634 F.2d 3, 5 (1st Cir. 1980) (advisory opinion process "would likely have" produced more facts for a better evaluation of constitutional claims). While we may agree with these pronouncements in spirit, they do not persuade us that an advisory opinion by the FEC is automatically ripe for review. This is especially true where we are dealing with a constitutional concept of "express advocacy" that is itself not completely unsusceptible to interpretation. How hard, for example, does one have to hit another over the head to render him "insensible"?

Judgment of the district court vacated and remanded for dismissal for lack of ripeness.