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FED. ELEC. COM'N v. POL. CONTRIB. DATA

December 10, 1990

FEDERAL ELECTION COMMISSION, PLAINTIFF,
v.
POLITICAL CONTRIBUTIONS DATA, INC., DEFENDANT.



The opinion of the court was delivered by: Kram, District Judge.

MEMORANDUM OPINION

In this action for declaratory and injunctive relief, the Federal Election Commission (the "Commission" or the "FEC") seeks to enforce the provisions of the Federal Election Campaign Act of 1971 to prohibit defendant Political Contributions Data from selling compilations of contributor data reportable to the FEC under the Act. Defendant raises First Amendment, Fifth Amendment, and other defenses. Currently before the Court are defendant's motion and plaintiff's cross-motion for summary judgment.

BACKGROUND*fn1

Plaintiff FEC is the independent agency of the United States government empowered with administering, interpreting, and enforcing the Federal Election Campaign Act (the "Act," or "FECA"). See generally 2 U.S.C. § 437c(b)(1), 437d(a) and 437g (1980). Defendant Political Contributions Data ("PCD") is a for-profit corporation, wholly owned by Political Data Access, Inc. ("PDA"), which produces campaign contribution reports to sell to the public.

FECA requires political committees to report identification information, including name, address, occupation and employer, of each person who contributes to that committee $200 or more in a year. 2 U.S.C. § 434(b)(3)(A).*fn2 The Act requires the Commission to make all such reports and statements filed with the Commission available for public inspection and copying, at the expense of the person requesting such copying, within 48 hours of the Commission's receipt of those documents. 2 U.S.C. § 438(a)(4). That provision, however, prohibits the sale or use of information copied from such reports by any person for the purpose of soliciting contributions or for commercial purposes. Id.*fn3 A rule promulgated by the FEC excepts newspapers, magazines, books or other communications from this provision. 11 C.F.R. § 104.15(c).

In January 1986, PDA obtained from the FEC certain computer tapes containing individual contributor information compiled from the disclosure reports, pursuant to § 434(b)(3)(A). By letters dated March 21 and June 24, 1986, PDA requested a formal advisory opinion from the Commission regarding the legality of selling individual contributor information obtained from disclosure reports made available by the Commission for public inspection and copying. In its resulting Advisory Opinion, the Commission stated that the sale of compilations of individual contributor information proposed by PDA would violate FECA. Advisory Opinion 1986-25, attached as Exhibit 7 to FEC's Memorandum in Opposition to Defendant's Motion for Summary Judgment and in Support of Plaintiff's Motion for Summary Judgment (hereinafter "Pl. Mem. I"), at 4-5.

Thereafter, PDA incorporated defendant PCD,*fn4 and through it provided for the advertisement, marketing, and sale in printed form of various compilations of the individual contributor information governed by § 438(a)(4). Defendant PCD compiled and sold two standard written reports: the Congressional District and the Corporate Affiliation contributors reports.*fn5 These reports contained the names of selected contributors, the amount and recipient of their contributions, along with the contributors' city, state and zip code. The reports did not contain the street address of the contributors. At the bottom of each page of the reports, the following caveat appeared:

  THIS REPORT MAY NOT BE USED OR SOLD BY ANY PERSON
  FOR THE PURPOSE OF SOLICITING CONTRIBUTIONS OR FOR
  ANY COMMERCIAL PURPOSE.

Defendant PCD also compiled and sold the results of special computer "runs" of the individual contributor information, often consisting of a short list of names and contributions. These short lists were usually communicated directly over the telephone or transmitted in letters.

As of June 6, 1987, defendants sold approximately 100 reports ranging in price from $5.00 for a single report to $776.25 for a combination of reports. They billed $9,398.76 and received $4,544.73 for their products as of that date.

On August 2, 1989, the FEC brought this action for declaratory and injunctive relief plus civil penalties, alleging that PCD violated 2 U.S.C. § 438(a)(4). Defendant answered on October 2, 1989, asserting constitutional defenses. PCD has moved for summary judgment on its defenses, arguing that the FEC's construction of that provision conflicts with the First Amendment and infringes its rights of Equal Protection; it also contends that the FEC's interpretation of the provision is incompatible with the provision itself and thus should be subject to a narrowing construction by this Court. The Commission has cross-moved for summary judgment. The Court first considers PCD's challenge to the rationality of the Agency's decision, because the Court should "not decide a constitutional question if there is some other ground upon which to dispose of the case." Lowe v. SEC, 472 U.S. 181, 190, 105 S.Ct. 2557, 2563, 86 L.Ed.2d 130 (1985) (citations omitted).

DISCUSSION

I. Standards for Summary Judgment

Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Rule 56(c). In testing whether the movant has met this burden, the Court must resolve all ambiguities against the movant. Lopez v. S.B. Thomas, Inc., 831 F.2d 1184, 1187 (2d Cir. 1987) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962)).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Adickes v. S.H. Kress and Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). The movant may discharge this burden by demonstrating to the Court that there is an absence of evidence to support the non-moving party's case on which that party would have the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).*fn6 The non-moving party then has the burden of coming forward with "specific facts showing that there is a genuine issue for trial." Rule 56(e). The non-movant must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). Speculation, conclusory allegations and mere denials are not enough to raise genuine issues of fact. To avoid summary judgment, enough evidence must favor the non-moving party's case such that a jury could return a verdict in its favor. See Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (interpreting the "genuineness" requirement).

II. FEC's Interpretation of 2 U.S.C. § 438(a)(4)

Section 438(a)(4) prohibits the sale "for the purpose of soliciting contributions or for commercial purposes" of information copied from the reports mandatorily filed by political committees. The Commission determined in its Advisory Opinion 1986-25 that the PCD reports were for commercial purposes within the meaning of the statute. It also found that the reports were more like brokers' lists, which are forbidden under § 438(a)(4), than like newspaper or other traditional media publications, which are excepted, 11 C.F.R. § 104.15.

Defendant now asks the Court, inter alia, to review that determination. PCD admits to selling information copied from these reports, but denies that its activity constituted use for "commercial purposes." It argues that the phrase "commercial purposes" should be narrowly construed to prohibit only using the lists directly for political solicitations, which PCD is not alleged to have done.

This Court must defer to an agency's reasonable construction of its own enabling legislation, absent inconsistency with an Act of Congress. Chevron, USA v. Natural Resources Defense Council, 467 U.S. 837, 843-44, 104 S.Ct. 2778, 2781-88, 81 L.Ed.2d 694 (1984) (question properly before district court is not whether in its view the regulation is inappropriate in the general context of the regulatory program in question, but whether the Administrator's view that it is appropriate in the context of the program is a reasonable one).

Consistent with Chevron, this Court will accord deference to the FEC's interpretation of its own enabling legislation, the FECA. The FEC is "precisely the type of agency to which deference should presumptively be afforded." FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 37, 39, 102 S.Ct. 38, 44, 46, 70 L.Ed.2d 23 (1981) (Court need only find that Commission's construction of statute is "sufficiently reasonable"); accord Common. Cause v. FEC, 842 F.2d 436, 448 (D.C. Cir. 1988) (deference particularly appropriate in context of FECA, which explicitly relies on the bipartisan Commission as its primary enforcer); see also FEC v. Ted Haley Congressional Committee, 852 F.2d 1111, 1115 (9th Cir. 1988) (defer to FEC unless demonstrably irrational or clearly contrary to plain meaning of statute); Orloski v. FEC, 795 F.2d 156, 164-67 (D.C. Cir. 1986) (according FEC's interpretation of the Act "considerable deference").

Therefore, the Court will limit its inquiry to whether the FEC's determination that PCD's activity violates the Act is a reasonable one. It will review the FEC determinations: (1) that the "commercial purpose" language contained in the Act includes activity other than direct political solicitations; (2) that PDA's sale of the information gathered from the FEC's reports is among the forbidden commercial purposes; and (3) that PDA's activity does not fall within the media exception embodied in 11 C.F.R. § 104.15(c). Advisory Opinion 1986-25 at 4-5.

A. Breadth of the "Commercial Purpose" Provision

The Court first turns its attention to the FEC's finding that the "commercial purpose" language contained in the Act may be construed to include certain for-profit activity other than direct political solicitation. In light of the legislative history of the provision, this conclusion appears to be well-founded.

Senator Bellmon offered the present § 438(a)(4) as an amendment on the floor of the Senate while a number of amendments to the Act were being considered in 1974. He stated that the proviso's purpose "is to protect the privacy of the generally very public-spirited citizens who make a contribution to a political campaign or a political party." 117 Cong.Rec. 30057, col. 3 (1971). Senator Bellmon continued:

  We all know how much of a business the matter of
  selling lists and list brokering has become. These
  names would certainly be prime prospects for all
  kinds of solicitations, and I am of the opinion
  that unless this amendment is adopted, we will
  open up the citizens who are generous and public
  spirited enough to support our political
  activities to all kind of ...

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