united states district court for the district of … · robert w. bonham senior attorney...

UNITEDSTATESDISTRICTCOURTFORTHEDISTRICTOFDELAWARE

FEDERALELECTIONCOMMISSION, ) ) Plaintiff, ) ) v. ) CivilActionNo.15‐cv‐00017‐LPS )CHRISTINEO’DONNELL, )FRIENDSOFCHRISTINEO’DONNELL, )andCHRISMARSTON,inhiscapacity )asTreasurerofFriendsofChristine )O’Donnell, ) ) Defendants. )

DEFENDANTS’MOTIONFORSUMMARYJUDGMENTANDINANSWERTOPLAINTIFF’SMOTIONFORSUMMARYJUDGMENT

PursuanttoFed.R.Civ.P.56(a)andtheCourt’sDecember15,2015,SchedulingOrder,

DefendantsrespectfullymoveforSummaryJudgmentandtoopposePlaintiff’sMotionfor

Summary Judgment for the reasons set forth in the accompanying Brief in Support of

Defendants’Motion forSummary Judgmentand inAnswer toFEC’sMotion forSummary

Judgment.

Respectfullysubmitted,

ChrisGober(LeadCounsel)[email protected]/s/StephenM.Hoersting__________________StephenM.Hoersting*[email protected],TX78734(512)354‐1783

*Admittedprohacvice ATTORNEYSFORDEFENDANTS

Dated:March30,2016

Case 1:15-cv-00017-LPS Document 58 Filed 03/30/16 of 2 PageID #: 497

CERTIFICATEOFSERVICE

Iherebycertifythatonthe30thdayofMarch,2016,IelectronicallyfiledtheforegoingwiththeClerkofCourtusingtheCM/ECFsystem,whichwillsendnotificationofsuchfilingtothefollowing:LisaStevensonDeputyGeneralCounsel–Lawlstevenson@fec.govKevinDeeleyActingAssociateGeneralCounselkdeeley@fec.govHarryJ.SummersAssistantGeneralCounselhsummers@fec.govRobertW.BonhamSeniorAttorneyrbonham@fec.govSethNesinAttorneysnesin@fec.govFEDERALELECTIONCOMMISSION999EStreet,N.W.Washington,D.C.20463(202)694‐1650 /s/StephenM.Hoersting StephenM.Hoersting

Case 1:15-cv-00017-LPS Document 58 Filed 03/30/16 of 2 PageID #: 498

UNITEDSTATESDISTRICTCOURTFORTHEDISTRICTOFDELAWARE

)FEDERALELECTIONCOMMISSION, ) ) Plaintiff, ) ) v. ) No.15‐cv‐00017‐LPS )FRIENDSOFCHRISTINEO’DONNELL )CAMPAIGNCOMMITTEE,etal. ) ) Defendants. ) )BRIEFINSUPPORTOFDEFENDANTS’MOTIONFORSUMMARYJUDGMENTANDIN

ANSWERTOFEC’SMOTIONFORSUMMARYJUDGMENT

ChrisGober(LeadCounsel)[email protected]/s/StephenM.Hoersting

StephenM.Hoersting*[email protected],TX78734(512)354‐1783

*AdmittedprohacviceMarch30,2016 ATTORNEYSFORDEFENDANTS

Case 1:15-cv-00017-LPS Document 59 Filed 03/30/16 Page 1 of 25 PageID #: 499

BRIEFINSUPPORTOFDEFENDANTS’MOTIONFORSUMMARYJUDGMENTANDINANSWERTOFEC’SMOTIONFORSUMMARYJUDGMENTi

TABLEOFCONTENTS

STATEMENTOFNATUREANDSTAGEOFTHEPROCEEDINGS..........................................................1

SUMMARYOFARGUMENT...................................................................................................................................1

I.FACTUALBACKGROUND............................................................................................................................3

II.LEGALBACKGROUND..............................................................................................................................10

III.ARGUMENT.................................................................................................................................................11

A. STANDARDOFREVIEW............................................................................................................11

B. THESTATUTE’SPERSONALUSEPROHIBITIONDOESNOTAPPLYTOTHEARRANGEMENTSBETWEENMS.O’DONNELLANDTHECAMPAIGNCOMMITTEE...................................................................................................................................11

C. IF,DESPITETHECLEARINTENTOFTHEEXPLANATION&JUSTIFICATION,THEPERSEPROHIBITIONSAREAPPLIEDTOTHEARRANGEMENTBETWEENMS.O’DONNELLANDTHECAMPAIGNCOMMITTEE,THEYAREUNCONSTITUTIONAL................................................................................................................18

D. MS.O’DONNELLANDTHECAMPAIGNCOMMITTEEHAVEACTEDPRUDENTLYANDINGOODFAITH..................................................................................................................20

IV.CONCLUSION................................................................................................................................................20

CERTIFICATEOFSERVICE................................................................................................................................21


BRIEFINSUPPORTOFDEFENDANTS’MOTIONFORSUMMARYJUDGMENTANDINANSWERTOFEC’SMOTIONFORSUMMARYJUDGMENTii

TABLEOFAUTHORITIES

Cases

Andersonv.LibertyLobby,Inc.,477U.S.242(1986).........................................................................................................................................11

ArizonaFreeEnterpriseClub’sFreedomClubPAC,etal.v.Bennett,131S.Ct.2806(2011)........................................................................................................................3,10,19

Broadrickv.Oklahoma,413U.S.601(1973).....................................................................................................................................2,19

CelotexCorp.v.Catrett,477U.S.317(1986)............................................................................................................................................1

ChevronUSA,Inc.v.Nat.ResourcesDefenseCouncil,467U.S.837(1984)..................................................................................................................................12,15

CitizensUnitedv.FEC,558U.S.310(2010)..................................................................................................................................11,19

Davisv.FEC,554U.S.724(2008)................................................................................................................................2,4,18

Rileyv.NationalFederationofBlindofN.C.,Inc.,487U.S.781(1988)........................................................................................................................................19

FederalRulesofCivilProcedure

Fed.R.Civ.P.56(a)...........................................................................................................................................1,11

FederalRegulations

11CFR100.77.........................................................................................................................................................2011CFR113.1(g)............................................................................................................................................passim60Fed.Reg.7865,Expenditures;ReportsbyPoliticalCommittees;PersonalUseofCampaignFunds(Feb.9,1995)(“ExplanationandJustification”)...........................................................passim

UnitedStatesCode

26U.S.C.§280(A)..................................................................................................................................................1952U.S.C.§§30101‐46..........................................................................................................................................1052U.S.C.§30114(b).........................................................................................................................................2,16FECAAmendmentsof1979,Pub.L.No.96‐187,§113,93Stat.1339(1980)(originallycodifiedas2U.S.C.§439a(1980))............................................................................................................10


BRIEFINSUPPORTOFDEFENDANTS’MOTIONFORSUMMARYJUDGMENTANDINANSWERTOFEC’SMOTIONFORSUMMARYJUDGMENTiii

OtherAuthorities

148Cong.Rec.S1991‐02(dailyed.Mar.18,2002).......................................................................1,4,11BipartisanCampaignReformActof2002,Pub.L.No.107‐155,§301,116Stat.81 (codifiedasamendedat52U.S.C.§30114(b)(formerly2U.S.C.§439a(b)))..............1,4,11FederalElectionCommissionAdvisoryOpinion2001‐09,BobKerrey.........................................18S.Rep.No.96‐319(1979)..................................................................................................................................10


BRIEFINSUPPORTOFDEFENDANTS’MOTIONFORSUMMARYJUDGMENTANDINANSWERTOFEC’SMOTIONFORSUMMARYJUDGMENT 1

STATEMENTOFNATUREANDSTAGEOFTHEPROCEEDINGS

Therebeingnogenuineissueofmaterialfactbetweentheparties—PlaintiffFederal

ElectionCommission(“FEC”)andDefendantsChristineO’Donnell(“Ms.O’Donnell”)andthe

FriendsofChristineO’DonnellCommittee(“CampaignCommittee”)—thiscaseisnowbefore

the Court on crossmotions for summary judgment. Fed. R. Civ. P. 56(a);CelotexCorp. v.

Catrett,477U.S.317(1986).

SUMMARYOFARGUMENT

TheFEC’spersecategoriesofpersonalusedonotapplytothearrangementbetween

theCampaignCommitteeandMs.O’Donnell for tworeasons:First, theFEC’srulemaking,

whichwaslatercodifiedbyCongressintheBipartisanCampaignActof2002,continuesto

interpret the statute. See148 Cong. Rec. S1991‐02 (daily ed. Mar. 18, 2002); Bipartisan

CampaignReformActof2002,Pub.L.No.107‐155,§301,116Stat.81(codifiedasamended

at52U.S.C.§30114(b)(formerly2U.S.C.§439a(b))).TheExplanationandJustificationof

that rulemaking states, in black letter language, that the statute’sper se prohibitions on

convertingmortgage,rent,orutilitypaymentstothepersonaluseofacandidateapplyonly

topaymentsforpropertyownedbythecandidateorforpropertyownedbyamemberofthe

candidate’sfamily.Expenditures;ReportsbyPoliticalCommittees;PersonalUseofCampaign

Funds,60Fed.Reg.7862,7865(Feb.9,1995)(“ExplanationandJustification”).Ms.O’Donnell

didnotthen(anddoesnotnow)ownthetownhouseat1242GreenvillePlace,nordoesany

memberofherfamily.

Second,Ms.O’DonnelldeclaredtheTownhouselocatedat1242GreenvillePlaceher

legal residence to protect her personal safety and the safety of her family, friends, and

campaign staff—as such threatsweremadeknown toher inprior campaignsunder less



securelivingarrangements.ShedidnotreallyliveattheTownhouse,whichwasahiveof

campaignactivityduringthetimeperiodat issue inthiscase.SeeDepositionofChristine

O’Donnell, February 3, 2016, attached as Exhibit A, p. 105. She listed the Campaign

Committeeheadquartersasherlegalresidencein2010toleaveanimpressionwithwould‐

be harassers that she slept and showered at a place located behind a guarded gate and

watchedbyanactivesecurityservice.Ex.A,pp.27‐31.Thiskeptharassersatbay.Assuch,

theobligationtodeclarealegalresidenceotherthantheplaceshelaidherhead,toprotect

hersafety,wasacommitmentorobligationthatwouldnothaveexistedirrespectiveofher

campaignsforfederaloffice.52U.S.C.§30114(b);11CFR113.1(g).

The FEC’s regulatory interpretation, now codified by Congress in the Bipartisan

CampaignReformActof2002,isunconstitutional.Theperseprohibition—wereittoapply

toMs.O’Donnell in thiscase (but,by the termsof theExplanationand Justification,does

not)—would charge the entire set of expenses incurred by the Campaign Committee for

campaign purposes to the personal use of Ms. O’Donnell. But preventing a subleasing

arrangementbyMs.O’DonnellwithherCampaignCommittee,andtherebytakingawaythe

abilitytosubleasespaceusingreasonable,market‐basedallocationformulas,woulddenyor

disparageMs.O’Donnell’sFirstAmendmentrighttocommitherpersonalresourcestoarun

forfederaloffice,Davisv.FEC,554U.S.724(2008).Andwoulddoso,theFECreadilyadmits,

onlytofurtheraputativeinterestinadministrativeefficiency.

Defendant O’Donnell, under the substantial overbreadth doctrine of Broadrick v.

Oklahoma,413U.S.601(1973)hasstandingtopresstherightsofarealpropertyownerwho

wantstoemployhisresidenceinacampaigntofederaloffice,butisburdenedindoingsoby

thepersecategoriesonmortgage,rent,andutilitypaymentsinthestatute.



ThepersecategoriesimposeanexpenditurebanontheCampaignCommittee,subject

to strict scrutiny, not rational basis review, as the FEC suggests. And the FEC crafted its

regulatoryinterpretationasamatterofadministrativeconveniencewithoutduetoconcern

to the right of campaign committees tomake campaign expenditures. As such, the FEC’s

regulatory interpretation is overly broad and improperly tailored to allow space for the

fundamentalrightsofcampaigncommittees.ArizonaFreeEnterprisePACv.Bennett,131S.

Ct.2806(2011).

Inanyevent,Ms.O’DonnellandtheCampaignCommitteeactedprudentlyandingood

faith.

I.FACTUALBACKGROUND

The factualbackground in this case is long,butundisputed. Itsessential elements

haveyettobeproperlypresentedinoneplace.Defendantswilldosohere.

For decades leading up to the year 1995, the Federal Election Commission had a

constitutional,workablesystemforenforcingCongress’prohibitiononconvertingcampaign

fundstothepersonaluseofanyperson.“[I]nthepast,theCommissionhasgenerallyallowed

campaignstorentpropertyownedbythecandidate…foruseinthecampaign,solongasthe

campaigndidnotpayrentinexcessoftheusualandnormalchargeforthekindofproperty

beingrented.”ExplanationandJustification,60Fed.Reg.7862,7865.Withregardtooffice

spaceinsideacandidate’shome,theFECrequiredpaymentstobeallocatedaccordingtouse,

putting theburdenoncommitteesandcandidatestobereadytodefendtheirallocations

withevidenceofsquarefootageandfair‐marketrentalrates.Id.

In 1995, the FEC rewrote its regulations on personal use. See Explanation and

Justificationat7862.Thisincludeditsapproachtoenforcingtheprohibitiononconverting



campaign funds to thepersonal useof candidates.TheFECnoted, in its rulemaking that

“Paragraph(g)(1)(i)(E)”—theperseprohibitionatissueinthiscase—“addressestheuseof

campaignfundsformortgage,rentorutilitypaymentsonrealorpersonalpropertyowned

bythecandidateoramemberofthecandidate’sfamily.”ExplanationandJustification

at7865(emphasisadded).TheFECstatedthatitsswitchfromapersonal‐useenforcement

systemthatreviewsallocationformulasbaseduponmarketrates,toanenforcementsystem

based on per se categories of personal use, was to further the Commission’s need for

administrativeconvenience.Id.at7865.

In2002,CongresspouredtheFEC’spersonal‐useregulation, intoto, intothemany

provisionsof theBipartisanCampaignReformActof2002.See148Cong.Rec. S1991‐02

(dailyed.Mar.18,2002);BipartisanCampaignReformActof2002,Pub.L.No.107‐155,§

301,116Stat.81(codifiedasamendedat52U.S.C.§30114(b)(formerly2U.S.C.§439a(b))).

In 2006, Ms. O’Donnell was a write‐in candidate for U.S. Senator for the State of

Delaware.Ex.A,p.6.Shereceivedafairamountofhatemail,butnoharassersshowedupat

herpremises.

In2008,theSupremeCourtoftheUnitedStateshandeddownDavisv.FEC,554U.S.

724(2008);holdingthatacandidatehasafundamentalrighttocommitpersonalresources

toacampaigntofederaloffice.

That same year, 2008,Ms. Christine O’Donnell was a candidate for United States

SenatefortheStateofDelawareforthe2008electioncycle.Ex.A,p.6;AffidavitofChristine

O’Donnell,Ex.B,¶3.InJulyof2008,Ms.O’Donnell’shome—herpersonalresidence—was

brokeninto,vandalized,andvulgarnamesandgraffitiwerescrawledontoherporchwall

andwindows.Ex.B,¶7.OnoraboutNovemberof2008,Ms.O’Donnell’sSenatecampaign



office,locatedinWilmington,DE,wasbrokeninto.Wholefilecabinetswerestolen.Ex.B,¶

8.Throughoutthe2008Senaterun,duringtheprimaryandgeneralelectionsofthatyear,

threatsweremade againstMs.O’Donnell andmanyweremade known to hervia family

membersworkingonthecampaignorbyothercampaignstaff.Ex.B,¶9;AffidavitofJennie

O’Donnell,Ex.C,¶6.

In2009,whenMs.O’DonnellwasweighinganotherrunforU.S.Senatorforthe2010

cycle,shehadalreadydecided,basedonthenatureandfrequencyof thethreatsshehad

experiencedduringthe2008campaign,thatshewouldhavetotakebetterprecautionsto

preserve her safety in any future campaign. She decided never again to list as a legal

residence,forpublicandpressconsumption,thelocaleatwhichsheactuallylaysherhead.

Theentiredecision‐makingprocessisprovidedinMs.O’Donnell’stestimony:

Q: Atwhatpoint in thisprocessdidyoudecide thatyouweregoing to live in thetownhouse?

A:Well,inthe2008campaignandinthe2006campaigntherewerealotofthreats.

Someonevandalizedmyhome.Someonebrokein. Ihaddeaththreats. Itwasasecurityissue.

SoIhaddecidedthatbecausemyaddresswaspublicrecordthatifIchosetorunagainIwouldn’tdothat.AndIwasactuallylookingatthingslikerightacrossthestreetthereisaUPSstore.Iwasgoingtohavethat.Italkedtomylawyertoseeifit’slegaltomakethataresidency.Residencyrequirementsare,accordingtomyformerlawyer,areveryambiguous.AndtheyarenotreallydefineduntiltheyarechallengedinDelaware.

SoIdidn’twantwhereIwaslayingmyheadtobemylegaladdressanymoreforsecurityreasons.AndthatwasadecisionImadeas,youknow–Iwouldhavelikedittobethatwayin2008.

Q:When did you decide that you were going to use the campaign office as a

residence?

A: Afterwedecidedtogetthatplace,Iwasgoinguseeitherthe,eitheraP.O.Boxtypethat’sastreetaddressoruseafriendofmine’sgrandmother’saddressasmylegalresidence.ButIwasveryhesitanttodothataswellbecausesomeonewouldbe



showingupatmyfriend’sgrandmother’shouse.Itmusthavehelpedme,butthepointwas tokeeppeople safe.Andconsidering theamountofdeath threats…considering that safetywas a factor, I didn’twant anyone involvedwithme, Ididn’twanttoputatargetonanyoneelse’sback.Whenwerealizedthatwhere[staffer]David[Hust]wasgoingtobeliving[aftermoving North from Houston, TX to work on the campaign and live in thecampaign’s townhouse], therewas a guardhouse out front, they kept the placesecured,thenthat’swhen,youknow,…werealizeditwouldhavebeensmartertodoitthisway[declarethecampaignheadquartersmylegalresidencetoensuremysafety].

Q:Wereyouconcernedthathavingyouraddressatthecampaignofficewhereotherstaffersandpeoplewerelivingposedasecuritythreattothosepeople?

A:Well,that’soneofthereasonswhywechoseit.LikeIsaid,therewasaguardhouse

there and they patrol it. And that turned out wonderful during the campaignbecause,youknow,if…peopleshoweduporstartedcongregatingoutfront,wedidn’thavetoworryaboutit.Barbarafromtheleasingofficesentsecurityoutandchasedthemaway.So,ofcourse,itwasafactorthattheyprovidedsecurity.

Q: Toyourknowledge,werethereanysuchincidentsatthe2010campaignoffice?A: Yes.Q: Canyoudescribewhathappened?A: Oh,therewereseveral….Peopleshoweduponthe,onmyaunt’sporchthinkingit

wasmyhouseandtriedtobreakin,mylittleaunt.Itwashell.OfcourseIdidn’twantpeopleknowingwhereIwas.AndIfelthorriblethatotherpeoplehadtopaythepricesoIcouldbesafe….

I’msorry.Likeit’sinfuriating.ItookeverymeasureIcouldtokeeppeoplesafeandtheystillweren’t.ButIwassafeandI’mgrateful.AndthereasonIwaskeptsafeisthereasonIamhere[inthislawsuit;inthisdeposition].It’snuts.I’msorry.Thisisnuts.

Q: Ifyouneedtotakeabreakatanytime‐‐

Ex.A,pp.27‐31. Ms.O’Donnellhasconsistentlytestifiedthatshe“wasn’teventechnicallylivingthere

[in the Townhouse],” Ex. A, p. 105, but also maintained that she listed the Campaign

Committeeheadquarters(theTownhouse)asherlegalresidencetoensurehersafety:



So it was a security measure, getting a physical barrier as to how stalkers andharassersandpeoplewouldmakethreatsagainstme,peoplewho jeopardizedmysafety:Wehadtoquicklyputupaphysicalbarrier,whichisyourphysicaladdress.

Ex.A,pp.105‐06.

Ms.O’DonnelltookeveryprecautiontoensureitwaslegaltodeclaretheCampaign

Townhouseasherlegalresidence:

Q: Canyoutellmeeverythingyoudidatthattimetoassureyourselfthatwhatyouweredoingwaslegal?

A:Well,IcalledtheFEC.Q: Right.Otherthanthat,didyoutakeanyothersteps?A: IcheckedwithanattorneyaboutDelawareresidencylaws.Q: WhenyoucheckedwiththeattorneyaboutDelawareresidencylaws,wasthata

questionaboutthelegalitiesthat–A:Well,wouldIhavetostaythere,youknow,sleepovernight75percentofthetime

tomakethatwhatwasonmydriver’slicense,thingslikethat.FortheaddressthatIputonmydriver’slicense,whatdoesithavetobe?Canitbeastreetaddressthat’sactuallyaUPSstore?Youknow,thingslikethat.WhatamIallowedtodotoshelterthepublicfromknowingwhereIactuallylive.

Q: Butthosequestionsweredirectedtowhetheryouwerebreakinganystatelaws,

forexample.A:Whenitcametomyresidency.The[federal]campaignlawsarewhatwechecked

with[FECemployee]VickiDavisdirectlyexplainingtoherwhatweweregoingtodo.

ExA.,pp.41‐42.

Ms.O’Donnellalsotestifiedthathercampaignmanager,MattMoran,hadconsulted

withaNewYorklawyeraboutthearrangementandthefirmretainedblue‐chiplawyer,Cleta

Mitchell.Ex.A,pp.45,77.

In 2010, the Campaign Committee entered into a lease for a townhouse at 1242

PresidentialDrive,Greenville,Delaware,fromMid‐AtlanticRealtyCo.(Pl.FEC’sCompl.for



CivilPenalty,Declaratory,Injunctive,andOtherAppropriateRelief(“Compl.”)¶13(D.I.1);

Defs.AnswerandCountercls.(“Answer&Countercls.”)at2‐3,¶13(D.I.9).)TheCampaign

CommitteeusedtheGreenvilleTownhouseasitsheadquartersduringMs.O’Donnell’s2010

campaignforSenateandcontinuedtousetheTownhouseaftertheNovember2010general

election.(Compl.¶14;Answer&Countercls.at3,¶14).TheCampaignCommitteepaidrent

andutilitiesfortheTownhouse,includingpaymentstoComcastforcommunicationsservices

andtoDelmarvaPowerforelectricity.(Compl.¶16;Answer&Countercls.at3,¶16).The

ComplaintallegesthatMs.O’DonnelllivedonthefloorsoftheGreenvilletownhouseabove

the campaign office for at least tenmonths. (Compl. ¶ 15.) Defendants havedenied that

specificallegation,butadmittedthatMs.O’Donnelldid,ataminimum,subleasespaceinthe

Townhouseduringtherelevantperiod.(Answer&Countercls.at3,¶15;at7,¶9;at10,¶

19.)

According to the O’Donnell Committee’s FEC reports, Ms. O’Donnell did make

subleaserentalpaymentstotheCommitteeforaportionofthecostsforthetownhouserent

andutilities.(Compl.¶17;Answer&Countercls.at3,¶17.)

Ms.O’Donnell“wasn’teventechnicallylivingthere.”Ex.A,p.105.AndMs.O’Donnell

was“usually”attheCampaignTownhouse“forcampaignreasons.”Ex.A,p.130.Choosing

theTownhouse asher legal residence “wasa securitymeasure.”Ex.A, pp. 105‐106.The

CampaignCommittee,laterinthecampaign,paidtobringinbedsforcampaignstaffers.Ex.

A,p.95.Atnotimewasabedeverputintothebedroom(forwhichMs.O’Donnellwasmaking

subleasepayments) forMs.O’Donnell’suse.She rarely slept in theTownhouse.Theonly

pieceoffurnitureputintheroomforMs.O’Donnellwasadesk,forcampaignuse,usedby

Ms.O’Donnellmostlyformediaandfundraisingphonecalls.Ex.A,95,158.



Atonepoint, theTownhousehadtenpeople living in it.Ex.A,p.26.Thebedroom

listedasMs.O’Donnell’s(forpurposesofcalculatingthefairvalueofthesubleasepayments)

housedfivefemaleinterns,butnotMs.O’Donnellherself.Id.Asthenumberofstaffbeganto

increase,andtheCampaignTownhousewas“burstingattheseams,”Ms.O’Donnellnolonger

usedtheCampaignTownhouseevenasheroffice.Ex.A,pp.122,159.Butshecontinuedto

listittothepublicasherlegalresidenceandtomakesubleasepayments.Ex.A,pp.122,159.

ThedownstairsoftheCampaignCommitteeTownhousehadnolivingroomfurniture,

onlyfourdesks,computers,campaigntelevisions,etc.Ex.A,p.97.Therewasanadditional

desk inthediningroom,whichwasusedasaconferenceroomformeetings. Ithadfiling

cabinetsandbookcasesand“thebigcampaignscheduleabovethetable.”Ex.A,p.128.The

kitchenwaspartlyusedasabreakroom,thesameasinanyofficesetting.Ex.A,p.97.But

thekitchenalsohadalittletableinitandwasmoreoftenusedbyvolunteerstoworkon

whateverprojectstheyhad.Ex.A,p.128.ThegaragewasnotusedforMs.O’Donnell’svehicle,

butrathertostorecampaignsigns,boxesofcampaignT‐shirts,andboxesofpushcards.Ex.

A,p.142.Indeed,suchitemswerealreadyoverflowingthebasement,whichwasneverused

tostorepersonalitemsforMs.O’Donnell.Ex.A,p.142.

Onnonightduring the campaignwere theoccupantsof theCampaignCommittee

Townhouse ever limited solely to the people who lived there, Ex. A, p. 126, and it was

commontofindcampaignvolunteersandstaffworkingthereatallhours,certainlyaslate

(orasearly)as3a.m.Ex.A,p.126.Whatalsoincreasedwerethethreats:thecampaignhad

consultedsecurityexpertDr.ShawnGreenertoensurethesafetyofMs.O’Donnellandher

staff.Ex.C,¶9.



In 2011, the Supreme Court of the United States handed down Arizona Free

Enterprise,131S.Ct.2806.Inthatopinion,theHighCourtheldthatneitheradministrative

efficiencynoradministrativeconveniencearegovernmentalinterestssufficienttodenyor

disparagetheFirstAmendmentrighttopoliticalassociationandspeech.

After the campaign wound down in 2011, Ms. O’Donnell continued to list the

Townhouseasherlegalresidence,forsecurityreasons(thoughstillshedidnotactuallylive

there).Ex.A,p.105.Shechangedheraddressin2014.Shehastestifiedthatshestillreceives

unwanted harassment whenever the press writes a story about the 2010 campaign,

includingthestatusoftheinstantcase.Ex.A,p.166.

II.LEGALBACKGROUND

TheFederalElectionCampaignAct,52U.S.C.§§30101‐46,wasfirstenactedin

1971withouta“personaluse”provision.CongressamendedFECAin1979tostatethatno

campaignfunds“maybeconvertedbyanypersontopersonaluse.”FECAAmendmentsof

1979,Pub.L.No.96‐187,§113,93Stat.1339(1980)(originallycodifiedas2U.S.C.§439a

(1980)). Congress thus sought to apply to all federal candidates the “position [against

personaluse]adoptedbytheSenateonpreviousoccasionsandreflectedin...theStanding

RulesoftheSenate.”S.Rep.No.96‐319,at5(1979).

In1995,theCommissionpromulgatedaregulationdefining“personaluse.”See11

C.F.R. § 113.1(g). The regulationdivides theprohibiteduses of campaign funds into two

differentcategories.Sometypesofspendingaredesignatedasperse“personaluse.”Id.§

113.1(g)(1)(i).Other spending isexaminedona case‐by‐casebasisunderwhathasbeen

referredtoasthe“irrespectivetest”:“Personalusemeansanyuseof[campaignfunds]...to

fulfillacommitment,obligationorexpenseofanypersonthatwouldexistirrespectiveofthe



candidate’s campaign or duties as a Federal officeholder.” Id. § 113.1(g); see also id. §

113.1(g)(1)(ii).

Thepurposeofenactingtheperse categorieswasadministrativeconvenience,see

Expenditures;ReportsbyPoliticalCommittees;PersonalUseofCampaignFunds,60Fed.Reg.

7862,7864(Feb.9,1995)(“ExplanationandJustification”);toavoidFECinvestigationsinto

whether campaigns have properly allocated expenses between personal and campaign‐

relatedactivities. Id.at7864.But it sweeps in toomuchactivity tobe constitutional.See

CitizensUnitedv.FEC,558U.S.310(2010)(campaignexpendituresarecorepoliticalspeech

subjecttostrictscrutiny).

In2002,CongresscodifiedtheCommission’sregulationinstatute,includingboththe

irrespectivetestandthelistofperseviolations.See148Cong.Rec.S1991‐02(dailyed.Mar.

18,2002);BipartisanCampaignReformActof2002,Pub.L.No.107‐155,§301,116Stat.81

(codifiedasamendedat52U.S.C.§30114(b)(formerly2U.S.C.§439a(b))).

III.ARGUMENT

A. STANDARDOFREVIEW

“The court shall grant summary judgment if the movant shows that there is no

genuineissueofmaterialfactandthemovantisentitledtojudgmentasamatteroflaw.”Fed.

R.Civ.P.56(a).The“mereexistenceofsomeallegedfactualdisputebetweenthepartieswill

notdefeat anotherwiseproperly supportedmotion for summary judgment.”Andersonv.

LibertyLobby,Inc.,477U.S.242,247‐48(1986).

B. THESTATUTE’SPERSONALUSEPROHIBITIONDOESNOTAPPLYTOTHEARRANGEMENTSBETWEENMS.O’DONNELLANDTHECAMPAIGNCOMMITTEE

Inthissection,Defendantswilldemonstratethatthepersonaluseprohibitiondoes

not apply to thedecisionofMs.O’Donnell and theCampaignCommittee to list,with the



general public, the Greenville Place Townhouse (aka the Campaign Committee) as Ms.

O’Donnell’s legal residence. This is demonstrable for two reasons. First, the regulatory

ExplanationandJustificationinterpretingthestatutoryprohibitiononpersonalusestates,

inblackletter,thattheperseprohibitionformortgages,rent,andutilitiesappliesonlywhere

acandidate(oramemberofthecandidate’sfamily)ownstherealpropertyinquestion.Ms.

O’Donnelldidnotthen(anddoesnotnow)own1242GreenvillePlace,nordoesanymember

ofMs. O’Donnell’s family. Second,while the expenses associatedwith having a personal

space torestone’sheadtosleep(other thanwhileonabusiness trip),havingaspace to

entertainfamilyandfriends,tospendeveningswatchingTV,toshower,dress,orevento

parkone’svehicleinagarage,generallyarecommitmentsorobligationsthatwouldexist

irrespectiveofanydecisiontorunforfederaloffice.11CFR113.1(g).ButMs.O’Donnelldid

noneofthesethingsat1242GreenvillePlace.Tothecontrary,Ms.O’Donnellrestedherhead

elsewhere.Ex.A,p105.Ms.O’Donnell listedtheTownhouseasherlegalresidencenotto

actuallylivethere,butrathertodistractwould‐beharassers.Anyexpenseassociatedwith

declaring,legallyandtothegeneralpublic,Ms.O’Donnell’slegalresidenceastheCampaign‐

Committee Townhouse, was a commitment or obligation that would not have existed

irrespectiveofhercampaignforUnitedStatesSenatorfromtheStateofDelaware.11CFR

113.1(g).

1. The per se categories in the statute do not apply to this type ofsublease arrangement because Ms. O’Donnell did not own 1242GreenvillePlace,nordidanymemberofherfamily.

InourAmericansystemoflaw,administrativeagenciesenforcingstatutesarebound

tofollowtheinterpretationstheyputforthintheirrulemakings.SeeChevronUSA,Inc.v.Nat.

ResourcesDefenseCouncil,467U.S.837,844(1984)(“IfCongresshasexplicitlyleftagapfor



theagency to fill, there isanexpressdelegationofauthority to theagency toelucidatea

specific provision of the statute by regulation. Such legislative regulations are given

controlling weight unless they are arbitrary, capricious, or manifestly contrary to the

statute). That goesdouble for theper se categories against personal usenowcodified in

section30114(b),asCongressmerelycodifiedtheFEC’s1995rulemakingonthematter.So,

thequestionis,whatdoestheperseprohibitiononmortgages,rent,andutilitiesaddress?

The Explanation and Justification could not be more clear: “Paragraph (g)(1)(i)(E) …

addresses the use of campaign funds for mortgage, rent or utility payments on real or

personal property owned by the candidate or amember of the candidate’s family.

ExplanationandJustificationat7865(emphasisadded).

Thatpropertyownedbycandidatesortheirfamiliesiswhatwasbeingaddressedis

onlymademore clearby thediscussionofproperty that isnotapersonal residence: “In

contrast,paragraph(g)(1)(i)(E)(2)continuestheCommission’scurrentpolicyinsituations

wherethepropertybeingrentedisnotpartofapersonalresidenceofthecandidateora

memberofthecandidate’sfamily.Thus,acampaigncommitteecancontinuetorentpartof

anofficebuildingownedbythecandidateforuseinthecampaign,solongasthecommittee

paysnomorethanfairmarketvalue.”Id.(emphasisadded).

Thesameconstruction,theconstructionofcandidateownership,isapparentwhen

we look at another section of the Explanation and Justification (“E&J”) fromyet another

perspective—theperspectiveofpracticalapplication.Anothersectionof theE&Jexplains

thatthepersonalusestatuteallowsacampaigncommitteeto“use”thepersonalresidence

ofthecandidatesolongasthecampaigncommitteedoesnot“payrent”touseit.Id.(“Itis

importanttonotethatparagraph(g)(1)(i)(E)(1)doesnotprohibitthecampaignfromusing



aportionofthecandidate’spersonalresidenceforcampaignpurposes.Itmerelylimitsthe

committee’s ability to pay rent for such a use.”) But Ms. O’Donnell did not own 1242

GreenvillePlace;norwasshethetenantonthelease—makingitnearlyimpossibleforthe

campaigncommittee to “use”1242GreenvillePlacewhilebeingprohibited from“paying

rent”touseit.Indeed,itisnearlyimpossibletoimagineascenarioinwhichanycampaign

committee“mayuse”spacea)itdoesnotown,b)thatthecandidate(orcandidate’sfamily)

doesnotown,andc) forwhichneither thecandidatenor thecampaigncommittee “pays

rent” to “use.” See Explanation and Justification at 7865. Indeed, how long would a

commerciallandlord,likeGreenvillePlace,allowacampaigncommitteeto“use”spacefor

which the campaign committee is prohibited from “pay[ing] rent”? The answer to the

questionisobvious.Andsoistheconstructionoftheprohibition:Practicallyspeaking,the

statuteonlycanpermittheuseofaproperty,whileatthesametimeprohibitingcampaign

committees from making rental payments, only for those properties a candidate (or a

memberofthecandidate’sfamily)owns—or,perhaps,forpropertyonwhichthecandidate

(or his family) is the first leaseholder. Any other scenario contemplating “use” without

“payment” is unimaginable. Therefore, any broader construction of the statute’s rental

paymentprohibitionisnonsense—especiallyarentalpaymentprohibitiontriggeredsolely

byasubleasetothecandidate.

TheExplanationandJustificationcomesrightoutandstatestheouterandupperlimit

ofthestatuteandtheregulationthatconstruesit,anditisbindingontheFEC:“Paragraph

(g)(1)(i)(E)…addressestheuseofcampaignfundsformortgage,rentorutilitypaymentson

real or personalproperty ownedby the candidate or amember of the candidate’s

family.ExplanationandJustificationat7865(emphasisadded).Ms.O’Donnelldidnotown



1242GreenvillePlace.NomemberofMs.O’Donnell’s familyowned (orowns)Greenville

Place.

Fromeveryperspective,itisclearthattheregulatoryinterpretationofthispartofthe

statutedoesnotprohibitacampaigncommitteefromleasingcampaignofficespacefroma

commercial landlord (or, in FEC nomenclature, does not contemplate charging lease

payments to a commercial landlord to the candidate as “personal use”) just because the

campaign committee later subleases to the candidate a portion of the space for a legal

residence.ItisclearfromtheE&Jthatthestatutoryprohibitionwasneverintendedtoapply

and, in fact, does not apply, to candidates subleasing residential space from a campaign

committee.Andbecausethe2002statutederivesfromthe1995rulemaking,andbecause

administrative agencies are permitted to construe statutes, interstitially and within the

boundsoftheConstitution,(seeChevron)thisCourtmustconcludethattheFEC,andlater

Congress,neverintendedtoreacharrangementslikethisonewithitsperserule.

So, theperseruledoesnotapplyhere.Withregardtotheremaining“irrespective

test,”Defendantswouldmaketwopoints:First,thatanobligationforasafetymeasurewould

nothaveexistedirrespectiveofMs.O’Donnell’scampaignstofederalofficeand,second,even

ifthisCourtweretofindthattheobligationsomehowwouldhaveexistedirrespectiveofthe

campaign,allocationformulasapply(becausethepersecategoriesdonotapply).Andunder

thoseapplicableallocationformulas,Ms.O’Donnellmademarket‐ratesubleasepaymentsto

preventanypersonalusefromtranspiring.

However,whenoneconsidersthetrueimportoftheirrespectivetest,Ms.O’Donnell

wasnotunderanyobligationtomakesubleasepaymentsatall.



2. Listing the townhouse as Ms. O’Donnell’s legal residence was afinancial “commitment or obligation” that “would [not] haveexist[ed] irrespectiveofthecandidacy.”

Establishingalegalresidenceinaplaceotherthantheplaceonelaysone’sheadto

sleep—toavoidphysicalthreats,vandalism,andrepeatedharassmentbystalkersdisturbed

bythefactofone’scandidacyforfederaloffice—isacampaignsafetymeasure.Institutinga

campaign safety measure—including incurring financial obligations to institute the

measure—isacommitmentorobligationthatwouldnot“existirrespectiveofthecandidacy.”

52U.S.C.§30114(b);11CFR113.1(g).Assuch,thestatutoryprohibitiondoesnotapplyto

heractivity—theactivitywasaqualifiedcampaignexpense—andMs.O’Donnellwasunder

nolegalobligationtomakesubleasepaymentstotheCampaignCommitteeatall.

Ms.O’Donnellconsideredmultipleotheralternatives.Sheconsideredlistingasalegal

residenceapropertyownedandoccupiedbyafriendofafriend,Ex.A,p.27,butrealized

thatoptionwasuntenablebecauseitwould“paintatarget”onthefriends’back.Ex.A,pp.

27‐31.SheconsideredlistingherpersonalresidenceasaPostOfficeBoxataUPSStore.Ex.

A, pp. 27‐31. She even consulted aDelaware attorney to explain the legal parameters of

residency under Delaware property law. However, shewas uncertain a P.O. Boxwould

qualifyasalegalresidenceunderDelawarelawandknew,mostassuredly,thatlistingaP.O.

Boxcouldnotcall‐offthesearchforhertrueresidencebythosewantingtoharassher.After

all,itiscommonknowledgethatnohumanbeingsleepswithinthefourwallsofaP.O.Box.

TheFECmaysuggestthatMs.O’Donnellmighthavedonesomethingelse.Butthereisno

Platonicidealincircumstancessuchasthis;noperfectalternativeinaparalleluniverse.And

Ms.O’Donnellchosethebestreal‐worldoptionshecould,givenmultipleconsiderationsto

preservehersafety,thesafetyofherfamily,thesafetyofhercampaignstaff,andothers.The



reality was this: Ms. O’Donnell had to list a public residence or else egg‐on would‐be

harasserstosearchforherfurther.Shemadethebestreal‐worldchoiceshecouldmake.She

listedtothepublic,asherofficialandlegalresidence,alocalethatwasplausible(afterall

shewascampaigningfromthatbaseeighteenormorehoursperday,Ex.A,p.165);aplace

thathadaguard tower,agate, anda security service.Anyotherplacebut theCampaign

CommitteeTownhouseselectedbyMs.O’Donnellwouldeitherhavebeenalie—thekindof

lie that can destroy a federal campaign—or a physical locale vulnerable to would‐be

attackers;attackersofeitherherselforthecollateralattacksagainstpersonsactuallyliving

attheplacelisted.ThisisnotmerespeculationonMs.O’Donnell’spart.Shetestifiedtothe

exampleofattackersvisitingheraunt,“[her]littleaunt,”andtryingtobreakintoheraunt’s

homeduringthe2008campaign.Ex.A,pp.27‐31.

Tomaintaintheintegrityofhercampaign,aswellasthesecurityofherselfandher

staff,Ms.O’Donnell1)listedthecampaignaddressonherdriver’slicense(dataaccessibleto

thepressandpublic),2)neverdisputed,tothisday,thatthecampaignheadquarterswasher

“legalresidence,”and3)swore,inthislawsuit,consistently,thatsheneverlivedthere.She

hasrepeatedlytestified—andeventsbearherout—thatshelistedtheTownhouseasa“legal

residence”for“securityreasons.”Ex.A,p.105;Ex.B,¶14.Listingthecampaignheadquarters

withthepublicasherlegalresidencewasasecuritymeasure;asecuritymeasurenecessitated

byherrunforSenatorfortheStateofDelaware—alessonshehadlearnedthehardway

during her 2008 bid for the same office. It was a security obligation that did not “exist

irrespective”ofherrunforfederaloffice.

“Theruleprohibitspaymentsforuseofapersonalresidencebecausetheexpensesof

maintainingapersonalresidencewouldexistirrespectiveofthecandidacy.”Explanationand



Justificationat7865.Butexpensesassociatedwiththisarrangementwouldnothaveexisted

irrespectiveofMs.O’Donnell’scandidacy.

TheCampaignCommitteeleasedatownhouseforacampaignheadquartersfroma

commerciallandlord,bydintofwrittencontract,inanarm’slengthbargained‐forexchange

atmarketrates.CampaignCommitteesacrossAmericaengageinsuchleaseseveryday;and

theyhaveaFirstAmendmentrighttodoso.Thereisnoreasonthoseleasepaymentsshould

bechargedtoMs.O’Donnellaspersonaluse.Thatsomeofthethreatsdrivingherdecision

wereinthepastisofnomoment.SeeFederalElectionCommissionAdvisoryOpinion2001‐

09,BobKerrey(formerSenator’suseofremainderedcampaignfundstoburnishhisimage

post‐incumbencywasnotaconversionofcampaignfundstohispersonaluse).

C. IF,DESPITETHECLEARINTENTOFTHEEXPLANATION&JUSTIFICATION,THEPERSEPROHIBITIONSAREAPPLIEDTOTHEARRANGEMENTBETWEENMS.O’DONNELLANDTHECAMPAIGNCOMMITTEE,THEYAREUNCONSTITUTIONAL

TheFEC’sinterpretation—nottheinterpretationinitsExplanationandJustification

but its position in this case—seeks to ban certain categories of campaign committee

expenditures.11CFR113.1(g)(1)(i)(E)(1). It is intendedtoease theFEC’sadministrative

burden,butattheexpenseofcoreFirstAmendmentrights.

TheFEC’sinterpretationofanotherwiseconstitutionalpersonal‐useprohibitionis

unconstitutionalinfourrespects.

First, theFEC’s interpretation in this casewould frustrateMs.O’Donnell’s right to

commitpersonalresourcestowardsacandidacyforfederalofficeincontraventionofDavis

v. FEC, 554 U.S. 724 (2008). TheDavis Court made no distinction between government

restrictionsonfundsthecandidate’scampaigncommitteewouldneedtomakeexpressive

expendituresinfurtheranceofthecandidacy,ontheonehand,andrestrictionsonfundsthe



candidate’scampaignwouldneedtomakenon‐expressiveexpenditures in furtheranceof

thecandidacy,ontheother.AtnopointdidtheDavisCourtsubjectrestrictionsoneither

expressiveornon‐expressivecampaignexpenditurestorationalbasisreview.Id.

Second, the FEC’s interpretation is an expenditure prohibition on the Campaign

Committee, in violation of the First Amendment. As such, review of the agency’s

interpretationisrequiredtosurvivestrictscrutiny.CitizensUnited,558U.S.at310(internal

quotationmarksomitted)(“Lawsthatburdenpoliticalspeechare”accordingly“subjectto

strict scrutiny.”) This “requires the Government to prove that the restriction furthers a

compellinginterestandisnarrowlytailoredtoachievethatinterest.”Id.

ButtheFECissueditsruleinthenameofadministrativeefficiency.Andthisisthe

third ground on which on the FEC’s interpretation in this case is unconstitutional. The

SupremeCourthasbeenclear:“‘theFirstAmendmentdoesnotpermittheStatetosacrifice

speechforefficiency.’”ArizonaFreeEnterpriseClub’sFreedomClubPAC,etal.,131S.Ct.at

2824(quotingRileyv.NationalFederationofBlindofN.C.,Inc.,487U.S.781,795(1988)).

Fourth,theperseprohibitiononmortgages,rent,andutilities(nomattertheFEC’s

overlybroadinterpretation)permitMs.O’Donnell,underBroadrick,413U.S.601,topress

the claim of property ownerswhomaywant to finance a campaign to Federal office by

deployingrealassets.

Tomeetnarrowtailoringandcuretheconstitutionaldeficiencieswiththisrule,the

FEC should, again, recognize the right of candidates and their campaign committees to

allocatebetweencampaignofficespaceandpersonaluseofaresidence,muchastheInternal

RevenueServiceinsistsbedoneforhomeofficedeductions.26U.S.C.§280(A).TheFECstill

permits allocations for nearly everything else. See 11 CFR 113.1(g)(1)(i)(E)(2) (second



home);11CFR113.1(g)(ii)(D)(campaignvehicles);11CFR100.77(foodandbeverage);11

CFR113.1g(ii)(B)(meals);113.1g(ii)(C)(travel).

D. MS.O’DONNELLANDTHECAMPAIGNCOMMITTEEHAVEACTEDPRUDENTLYANDINGOODFAITH

Defendants will havemore to say in their Sur Reply. For now, it suffices to say Ms.

O’Donnellactedprudentlyinmakingherdecision.ShecontactedaDelawarelawyerabout

residency lawandconsultedVickiDavisaboutFECrules.Her treasurercontactedaNew

Yorklawyeronthesamematter,theCampaignCommitteeretainedblue‐chipcounsel,Cleta

Mitchel,andusedasquare‐footagemeasuretoapportion,againstafair‐marketratecharged

byacommercialleasingcompany(GreenvillePlace),anappropriateallocationofrentand

utilities forMs.O’Donnell. Ex.A,passim. TheO’DonnellDefendants canevenaddress the

competingtestimonyofVickiDavisandNataliyaIoffe(transcriptsnotappended),intheir

SurReply.

IV.CONCLUSION

Defendants’MotionforSummaryJudgmentshouldbegranted.PlaintiffFEC’sMotion

forSummaryJudgmentshouldbedenied.

Respectfullysubmittedthis30thdayofMarch,2016,

ChrisGober(LeadCounsel)[email protected]

/s/StephenM.Hoersting StephenM.Hoersting*[email protected],TX78734(512)354‐1783

*AdmittedprohacviceATTORNEYSFORDEFENDANTS



CERTIFICATEOFSERVICEIherebycertifythatonthe30thdayofMarch2016,Ielectronicallyfiledthe

foregoingwiththeClerkofCourtusingtheCM/ECFsystemwhichwillsendnotificationofsuchfilingtothefollowing:LisaStevensonDeputyGeneralCounsel–Lawlstevenson@fec.govKevinDeeleyActingAssociateGeneralCounselkdeeley@[email protected]

RobertW.BonhamSeniorAttorneyrbonham@fec.govSethNesinAttorneysnesin@fec.govFEDERALELECTIONCOMMISSION999EStreet,N.W.Washington,D.C.20463(202)694‐1650

/s/StephenM.Hoersting StephenM.Hoersting


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