Summary
holding that FEC's decision rejecting the disk used for filing an electronic report was arbitrary and capricious
Summary of this case from Lovely v. Federal Election CommissionOpinion
CIVIL ACTION No. 03-0307
August 15, 2003
MEMORANDUM AND ORDER
This lawsuit arises from a dispute between Greenwood for Congress, Inc. (the "Committee") and the Federal Election Commission (the "FEC" or the "Commission") over an alleged late electronic filing of financial reports required under the Federal Election Commission Act ("FECA"), 2 U.S.C. § 431-437 (2001). Presently before the Court are the parties' cross-motions for summary judgment. For the reasons set forth below, I deny the FEC's motion and grant the Committee's motion.
I. BACKGROUND
The Committee is the principal campaign committee for the Honorable James C. Greenwood, who currently is the United States Representative for the Eighth Congressional District of Pennsylvania. Under FECA, the treasurers of principal campaign committees of candidates for the United States House of Representatives must file periodic reports detailing such committee's receipts and expenditures. On December 28, 2001, the FEC sent to the principal campaign offices of all congressional candidates, including the Committee, notices informing them that their Year-End Financial Reports would be due on January 31, 2002, as required by 2 U.S.C. § 434(a)(2)(B) (ii) and 11 C.F.R. § 104.5(a)(2)(B) (2001). Included with the notice was an instructional guide entitled "Electronic Filing." The guide detailed which organizations were required to file electronically, and it appears from the record that the Committee understood that it was required to file electronically.
On January 30, 2002, the FEC received a FedEx package from the Committee (the "Initial Package"). The FEC asserts that the package contained only a paper copy of the Committee's 2001 Year-End Report and a cover letter detailing the contents of the package. (Administrative Record at 81.) The Committee maintains, however, that in addition, the package contained a high-capacity Zip disk that held an electronic copy of the report in the format required by the FEC. ( Id. at 55.)
Refers to the Administrative Record for this matter, designated by the Federal Election Commission as Certified Administrative Record for Administrative Fines #554.
On February 4, 2002, the FEC sent a Mailgram to the Committee indicating that the FEC had not received an electronic version of the report and that the Committee's reporting requirement would be considered unfulfilled until such time as they filed electronically. ( Id. at 14.) In response, Eric Clare, the Campaign Manager for the Committee, called FEC employee Dayna Brown on February 6, 2002. Ms. Brown stated that although the FEC records available to her indicated that no disk had been received, the cover letter to the January 30, 2002 package referenced a disk as being included with the package. ( Id. at 78.)
After the phone conversation, Mr. Clare created a copy of the report, saved it to a Zip disk, and sent the disk via Federal Express with another cover letter to the FEC. This package was received on February 7, 2002. On that same day, a staff member in the FEC's Electronic Filing Office phoned Mr. Clare and indicated that the FEC was rejecting the filing because it was submitted on an "incorrect medium." In response, Mr. Clare saved another copy of the report to a 3.5 inch floppy disk, which he sent via Federal Express to the Commission on February 7, 2002. ( Id. at 79.) On February 8, 2002, the 3.5 inch disk was received and its contents were processed and posted on the Internet by the FEC. ( Id. at 80.)
On June 14, 2002, the Commission determined that the Committee and its treasurer, Robert Baldi, had failed to file their 2001 Year-End Report on time and assessed the Committee an administrative fine of $3,100.00. On June 19, 2002, a notice of the determination and fine was sent to the Committee, and the Committee filed a timely response with supporting documentation. ( Id. at 78.) After reviewing the Committee's response, the FEC's Reviewing Officer sent requests for supplemental information to appropriate members of the FEC's staff.
As part of the Committee's review of the matter, Mr. Clare weighed the different items allegedly sent to the FEC. As indicated in his affidavit on the matter submitted to the FEC, Mr. Clare reported that through reenactments, a Zip disk, a hard-copy version of the Report with a binder clip, a copy of the cover letter and a manila envelope weighed 2 1/8 pounds. ( Id. at 55.) The same package without the Zip disk weighed 1 7/8 pounds. The air bill of the package received by the FEC on January 30, 2002, as filled out by Mr. Clare, indicated a weight of 2.20 pounds. ( Id. at 61.) FedEx listed the weight of the package as 3 pounds. ( Id. at 63.) The Committee maintains that FedEx will round up to the next whole number in calculating a package's weight, and that FedEx's indication of 3 pounds implies that the package weighed between 2 and 3 pounds, and that consequently, the package received by the FEC contained a Zip disk. ( Id. at 55.)
Notwithstanding this circumstantial evidence with respect to the Initial Package's contents, the Reviewing Officer found that: (i) The FEC did not receive a Zip disk from the Committee on January 30, 2002; (ii) a Zip disk was received on February 7, 2002 but was rejected because it was on an incorrect medium and was not accompanied by a signed summary page; and (iii) the Committee's 2001 Year-End Report was not electronically filed until February 8, 2002. ( Id. at 81-82.) As a result of these findings, the Reviewing Officer recommended that the FEC make a final determination that the Committee and its Treasurer violated 2 U.S.C. § 434(a) and assess a $3,100.00 civil money penalty. ( Id. at 82.) The recommendations were sent on November 29, 2002 to the Committee, which filed a timely response to the recommendation on December 9, 2002.
On December 20, 2002, the Commission voted unanimously to follow the recommendation of the Reviewing Officer to assess a civil penalty of $3,100.00. ( Id. at 131.) The Committee was notified of the decision by letter dated December 23, 2002. ( Id. at 133.) The Committee petitioned this Court for review of the Agency Verdict on January 22, 2003.
III. DISCUSSION
A. Standard of Review
Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). "In a case involving judicial review of agency action, however, summary judgment is simply the procedural vehicle for asking the court to decide, on the basis of the administrative record, the legal question of whether an agency reasonably could have found the facts as it did." Cunningham v. Fed. Election Comm'n, 2002 WL 31431557, at *3 (S.D. Ind. 2002) ( citing Hunger v. Leininger, 15 F.3d 664, 669 (7th Cir. 1994)).
The Administrative Procedure Act, 5 U.S.C. § 706(2)(A), provides that agency action can be set aside if the court finds it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 414 (1971) (discussing standard under which administrative findings may be overturned under 5 U.S.C. § 706). In assessing the agency's findings, it is incumbent upon the court to assure itself that the agency "examine[d] the relevant data and articulate[d] a satisfactory explanation for its action, including a `rational connection between the facts found and the choice made.'" Bagdonas v. Dep't of Treasury, 93 F.3d 422, 426 (7th Cir. 1996) ( quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).
B. Treatment of the Evidence by the FEC
The Court's inquiry concerns whether the FEC's determination that the Committee failed to file its 2001 Year-End Financial Report was arbitrary and capricious. In this case, there is nothing in the record to suggest that any concerted effort was made by the FEC to determine whether the disk was actually delivered in the Initial Package. There was no actual evidence in the record, such as affidavits from FEC employees who handled the package or appropriate excerpts from an employee handbook detailing the procedures by which such packages are to be handled, indicating that the FEC could declare that it was certain, or even confident, that it was not responsible for the loss of the disk. The only confirmation presented by the FEC is the fact that the report was not uploaded into their system until February 8, 2002. From this, they conclude, apparently based on nothing more than a belief in the infallibility of their procedures and employees, that the disk must not have been sent to them in the Initial Package. The only validation proffered is Ms. Brown's indication that she was unable to find a record of the disk or its contents in the FEC's system.
Despite the lack of evidence supporting the conclusion that the disk was not included in the package, the FEC clearly disregarded relevant, albeit circumstantial, evidence presented by the Plaintiff. In an affidavit submitted to the Commission, Mr. Clare asserts that he personally placed the Zip disk in the envelope and sealed it in preparation for its submission. (Administrative Record at 55.) Furthermore, Mr. Clare's experiment of creating a duplicate of the package and weighing its contents suggests that the Zip disk was, in fact, placed in the FedEx package received by the FEC. ( Id. at 55-56.) Defense counsel admitted at oral argument that the FEC Reviewing Officer did not even attempt to replicate Mr. Clare's experiment when making his administrative determination.
C. Appropriateness of the Zip Disk
The FEC also maintains that it is immaterial whether the Zip disk was included in the Initial Package, as a Zip disk represents an improper medium and would have been rejected even if it had been received and processed by the FEC. However, it is unclear what would have happened had the FEC been able to inform the Committee on January 30, 2002 that the medium submitted was improper. Under such a scenario, it is possible that the Committee would have been able to submit an electronic version of the report on a medium acceptable to the FEC, as it did on February 8, 2002, by the January 31, 2002 deadline.
More importantly, it is not clear that the Committee's choice of medium was improper. There is nothing in the record to suggest that the FEC indicated that it would only accept electronic versions of the report submitted on 3.5 inch disks. The applicable statute and regulation do not specifically require the submission of a 3.5 inch disk. The relevant regulation states that data must be submitted on "computerized magnetic media." 11 C.F.R. § 104.18(d) (2001). The FEC's own regulations specify only that electronic submissions delivered by magnetic media must be on "floppy disks." 61 Fed. Reg. 42374 (Aug. 15, 1996). The term "floppy disk," which originally described the 5.25" format that is considered a relic today, has in common parlance become a generic term for various forms of electronic media. Both a Zip disk and a 3.5 inch disk equally comport with this general description. If the Commission intends only to accept one form of "floppy disks," it must clearly indicate that intention. Furthermore, there is nothing to suggest that the contents of the Zip disk were in an invalid format, and it appears the format accepted by the Commission on the disk received on February 8, 2002 was the same format as the earlier versions submitted by the Committee. (Administrative Record pp. 55-57). Therefore, I find that the Committee should not have been penalized for submitting its electronic filing on a Zip disk.
The record indicates that the Frequently Asked Questions (FAQ) webpage of the FEC's website stated only 3.5 inch disks would be accepted. The Court agrees with Plaintiff's argument that there is no valid reason why the Committee ought to have been aware of the contents of the FAQ prior to submitting the report.
Finally, the Commission maintains that the February 7, 2003 submission was non-compliant because the Zip disk was not accompanied by a valid summary page signed by the treasurer of the Committee. The Court finds the Commission's contention particularly troublesome considering the fact that both the Initial Package and the package received on February 8, 2003 contained valid, signed summary pages. In effect, the Commission claims that the Committee's effort to re-send the allegedly lost disk was inadequate due to the Committee's failure to include a duplicate of the previously acceptable summary page.
The Overton Park Court opined that in order to make a finding that an agency verdict was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" (5 U.S.C. § 760(2)(A)), courts must consider whether "the [Agency] decision was based on a consideration of the relevant factors and whether there had been a clear error of judgment." 401 U.S. at 416. Here, failing to exercise independent judgment in arriving at its decision, without any factual basis, and without consideration of contrary evidence before it, the FEC arbitrarily and capriciously determined that the Committee had erred in failing to include a disk in the January 30, 2002 package. It simply took as a matter of faith that the disk could not have been lost once the package had been received by them. Additionally, the FEC took no steps to investigate the missing disk other than to verify that the disk did not end up in the place that it should have had it been properly processed by the FEC. Furthermore, the FEC erred in concluding that its own regulations definitively required that electronic reports submitted on magnetic media could only be delivered on 3.5 inch disks.
III. CONCLUSION
For the reasons set forth above, I deny Defendant's motion for summary judgment, and grant summary judgment in favor of Plaintiff. An appropriate Order follows.
ORDER
AND NOW, this 15th day of August, 2003, upon consideration of the cross-motions for summary judgment, and following oral argument thereon, and for the foregoing reasons, it is hereby ORDERED that:
1. Plaintiff Greenwood for Congress, Inc. Motion for Summary Judgment is GRANTED.
2. Defendant Federal Election Commission Motion for Summary Judgment is DENIED.
3. Summary Judgment is entered in favor of Plaintiff and against Defendant.
4. The Clerk of the Court is directed to close this case for statistical purposes.