The Court in Shays and Meehan v. FEC has ordered the agency to explain its reliance on adjudication, case by case, rather than by rulemaking, in addressing the "527" issue.  It declined to do as asked by the plaintiffs: to promulate a specific rule, in place of the FEC, defining the standards by which a 527 would constitute a regulated "political committee."  The Court's Opinion is here.

     The Court specifically discounted the arguments presented by the FEC in 2004, when it declined to issue a rule sought by the Republican party and the reform community.  Those arguments, dismissed by the Court as "meek" (Opinion at 30), include a concern that the rulemaking "might have affected hundreds or thousands of groups engaged in non-profit activity," and that it would have required the FEC to do what Congress declined to do when considering and enacting BCRA.  This was part of the Court's concern with the FEC position, and another seems to have been the FEC's failure, when pursuing these cases one-by-one, to act quickly, within the same election cycle.  "Case-by case adjudication," judged by this standard, "appears to have been a total failure." Opinion at 31. 

     The Court is seeking an explanation directed toward these issues:

--whether case by case adjudication will "impair" enforcement action, because of the constitutional issues raised by "the absence of a regulation providing clear guidance."

--whether case-by-case adjudication can be conducted in a more timely fashion, to avoid improper use of soft money in a federal election.

--whether the complexities of the "527" issue, which the Court acknowledges (Opinion at 30), are somehow better accomodated within an adjudicatory rather than a rulemaking approach.

     The Court declined to produce a rule of its own, as requested by the plaintiffs: "this remedy…is reserved for 'only the rarest and most compelling of circumstances' [citation omitted].  Such circumstances are not present here."

     More to follow.

Bob Bauer