[EL] Court Dismisses CREW lawsuit against IRS on c4 regulations

[BZall at aol.com]

Much hoopla about CREW's press release announcing its suit against the IRS  
for failing to agree with CREW on the regulations on 501(c)(4) "political"  
activity. http://electionlawblog.org/?p=50810. 
 
Haven't seen anything on the widely-expected dismissal of that case for  
lack of standing to sue: 
CREW v. Dept of Treasury, No. 13-732, 2014 WL 772898 (D.C.D.C., Feb.  27, 
2014). 
 
Not surprising. Standard three-part standing analysis: even assuming  
everything factual in the Complaint is true (but not legal conclusions couched  
as factual assertions):
 
1) CREW has no "injury in fact" because it can't identify any law that  
requires CREW to be provided the information about c4 donors that it seeks in  
its rulemaking petition. Slip Op. at *4-5. Not even Section 527, which CREW  
contends applies. Nothing requires organizations denied c4 status to become 
527  political organizations, as CREW suggests; instead, the Court notes, 
an  organization could become a taxable organization which could engage in 
unlimited  political activity without disclosing information; file under 
another section of  the IRC (like 501(c)(6) associations or (c)(5) unions) that 
doesn't require  disclosure of donors; or cease speaking. Thus, the Court 
said that CREW's  theory is speculative (which it pretty obviously is) and 
didn't support  standing. That should have ended the inquiry, since CREW could 
not show standing  under any theory, but the Court went on to throw out 
CREW's other two  justifications.
 
2) CREW alleged injury has no causal connection to the defendant IRS's  
actions. (This is a "but for" test; "but for" the IRS's failure to issue  
CREW-friendly regulations, CREW would get the info.) Like above, CREW thought  
that c4s would be forced tor reveal donor information; the Court disagreed.  
Standing can't be shown by a claim that is based on some third-party's  
independent actions (not just the organizations, but also the donors). CREW is  
just speculating, with "layers of assumption," Slip Op. at *5, and that 
doesn't  support the jurisdiction of a reviewing Court. 
 
3) CREW's claim has no "redressability." If it wins, it still likely  
wouldn't get the donor info it wants. Even its pre-suit petition for rulemaking  
wouldn't show that it was "likely" to get the relief it seeks. Again, it's 
the  actions of independent third parties that doom CREW's claim. Even if, as 
CREW  claims, it is a "near certainty" that the IRS will change the 
regulations as  CREW wants (and that claim plays right into the hands of another 
lawsuit  against the IRS claiming that CREW and others improperly influenced 
the pending  IRS rulemaking process in violation of several administrative 
procedure laws -  Cause of Action v. IRS, 
http://electionlawblog.org/?p=58554),  the organizations and the donors wouldn't necessarily give CREW the info 
it  claims. Slip Op. at *7. 

Barnaby Zall 
Of Counsel 
Weinberg, Jacobs & Tolani,  LLP 
10411 Motor City Drive, Suite 500
Bethesda, MD 20817
301-231-6943  (direct dial) 
bzall at aol.com  
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