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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No.: 17-cv-22643 COOKE/GOODMAN
FEDERAL ELECTION COMMISSION,
Plaintiff,
v.
DAVID RIVERA,
Defendant.
__________________________________/
MOTION TO ALTER OR AMEND
OR FOR RELIEF FROM JUDGMENT
Defendant David Rivera respectfully files this motion to alter or amend the judgment
pursuant to Fed. R. Civ. P. 59(e) or to grant relief from the judgment pursuant to Fed. R. Civ. P.
60(b) (“Motion”). In light of the Eleventh Circuit’s recent decision in Yates v. Pinellas Hematology
& Oncology, P.A., 21 F.4th 1288 (11th Cir. Dec. 29, 2021), the Court should consider whether the
$456,000 civil penalty it imposed on summary judgment – which is apparently the largest civil
penalty ever imposed on a non-corporate individual in FEC history
1
– violates the Excessive Fines
Clause of the Eighth Amendment of the United States Constitution. See Yates, 21 F.4th 1299
(analyzing order on Rule 59(e) motion challenging amount of a statutory civil penalty under the
False Claims Act as an excessive fine under the Eighth Amendment). For the reasons described
herein, the Court should grant this Motion and: (1) vacate the final judgment and the civil penalty;
(2) strike the 300-1000% penalty enhancement provision of 52 U.S.C. § 30109(6) as
1. According to FEC’s website, the first and second runners up are apparently: (1)
Thomas Kramer (fined $323,000 for “foreign national contributions; contributions in the names
of others”); and (2) The Reverend Al Sharpton (fined $208,000 for “inaccurately reporting
receipts and expenditures, receiving excessive and prohibited in-kind contributions and accepting
impermissible corporate contributions”).
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unconstitutionally vague, arbitrary, capricious, and excessive on its face; (3) reconsider its analysis
under the Yates test and determine that the amount of the fine requested by FEC is
unconstitutionally excessive under the Yates factors; and (4) for general relief consistent with the
foregoing.
INTRODUCTION
Rivera maintains that the statute and regulation the Court relied on in setting the amount
of the civil penalty in this case are unconstitutionally vague and excessively punitive because they
authorize fines anywhere between 300% and 1000% of the amount of the contributions for
knowing and willful violations and are devoid of standards to determine where on the spectrum of
percentages the fine belongs. See 52 U.S.C. 30109(6)(C) (formerly 2 U.S.C. 437g); see also 11
C.F.R. 111.24; 52 U.S.C. § 30122 (formerly 2 U.S.C. § 441f); 11 C.F.R. § 110.4(b)(1)(i). Without
conducting an evidentiary hearing or applying any statutory standards, the Court accepted FEC’s
arbitrary selection of 700% of the $76,000 in undisclosed “in-kind contributions” Rivera allegedly
made according to the arguments in FEC’s motion for summary judgment. See [DE 142 at 8; DE
163 at 34]. Notably, the $76,000 that FEC argued on summary judgment exceeded the number of
contributions FEC alleged Rivera made in both its original complaint ($69,000) and its amended
complaint ($55,000). See [DE 1 at 5; DE 41 at 5].
In Yates, the Eleventh Circuit held that, in the absence of statutory standards, courts must
apply the Eighth Amendment Excessive Fines Clause test to determine whether a statutory civil
penalty that is “at least partly punitive” in nature is “grossly disproportional to the gravity of a
defendant’s offense.” Yates, 21 F.4th 1288 at 1313 (quoting United States v. Bajakajian, 524 U.S.
321, 334 (1998)); see also id. at 1324 (Tjoflat, J., concurring in part) (“[T]he statute fails to provide
a set of standards by which to impose statutory penalties, making an Excessive Fines Clause
2
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analysis the only means by which to evaluate the penalty amount.”). In analyzing a statutory civil
penalty imposed in a judgment pursuant to the False Claims Act (“FCA”), the Court applied the
three-factored Excessive Fines Clause analysis that arose in the criminal forfeiture context and
considered: “(i) whether the defendant is in the class of persons at whom the statute was principally
directed; (ii) how the imposed penalties compare to other penalties authorized by the legislature;
and (iii) the harm caused by the defendant.” See Yates, 21 F.4th 1288 (citing United States v.
Chaplin’s, Inc., 646 F.3d 846, 851 (11th Cir. 2011)); see also Robson 200, LLC v. City of Lakeland,
No. 8:20-cv-0161-KKM-JSS, 2022 U.S. Dist. LEXIS 53746 at *22-23 (M.D. Fla. Mar. 24 2022)
(“Although this tripart test initially arose in the criminal forfeiture context, the Court follows the
lead of other district courts and applies them in this context.”) (applying the Yates analysis to a
civil penalty imposed under the City of Lakeland’s Land Development Code).
In this case, the analysis the Court employed is at odds with Yates because it did not
consider the correct factors and did not determine whether the FEC’s penalty was “proportional to
the gravity of the defendant’s [alleged] offense.” See id. at (quoting United States v. Bajakajian,
524 U.S. 321, 334 (1998)). Instead, the Court simply exercised its “discretion” to determine
whether the FEC’s proposed civil penalty was “appropriate” based on the Ninth Circuit’s
Furgatch factors: “(1) the good or bad faith of the defendants; (2) the injury to the public; (3) the
defendant’s ability to pay; and (4) the necessity of vindicating the authority of the responsible
federal agency.” See [DE 163 at 35] (citing FEC v. Furgatch, 869 F.2d 1256, 1258 (9th Cir. 1989)).
In Furgatch, the Ninth Circuit did not consider the Eighth Amendment Excessive Fines Clause
and instead reasoned: “Because there are very few cases discussing the factors which should guide
a court's discretion in imposing a civil penalty under § 437g(a)(6)(B), we seek guidance from cases
that deal with the imposition of discretionary civil penalties under other federal statutes.” Id. (citing
3
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United States v. Danube Carpet Mills, Inc., 737 F.2d 988, 993 (11th Cir. 1984)). Thus, the Ninth
Circuit’s Furgatch analysis traces back to the Eleventh Circuit’s Danube Carpet analysis which,
following Yates, no longer applies to civil penalties that are “at least partially punitive” in nature.
Because the Court relied on Furgatch, it did not consider whether the FEC’s fine was
“grossly disproportional” to the alleged offense, “how the imposed penalties compare to other
penalties authorized by the legislature,” or whether Rivera was “in the class of persons at whom
the statute was principally directed[.]” See Yates, 21 F.4th at 1328. Moreover, the Court did not
consider any evidence of Rivera’s present and future ability to pay and relied on unsubstantiated
allegations from a complaint in another lawsuit in New York regarding revenue that Rivera’s
business allegedly received in the past. See [DE 142-37, 163-164]; Yates, at 1334-35 (Tjoflat,
Concurring in Part and Dissenting in Part) (in determining the excessiveness of a fine, district
courts should “hold evidentiary hearings” and apply “a set of standards” to “give us something to
review on appeal”). Instead, the Court accepted FEC’s recommendation to impose a fine in amount
equal to 700% of the total amount of the alleged illegal contributions.
Accordingly, the Court should vacate the final judgment and reconsider the amount of the
fine: (1) pursuant to the Eighth Amendment analysis embodied in Yates, (2) to correct clear error,
(3) to prevent manifest injustice, or (4) for any other reason justifying relief from the operation of
the judgment. See Fed. R. Civ. P. 59(e), 60(b)(6); Livernois v. Med. Disposables, Inc., 837 F.2d
1018, 1020 n.5 (11th Cir. 1988); Wendy’s Int’l v. Nu-Cape Constr., 169 F.R.D. 680, 684 (M.D.
Fla. 1996); Dr. Seuss Enters., Ltd. P'ship v. ComicMix Ltd. Liab. Co., 553 F. Supp. 3d 803, 810
(S.D. Cal. 2021). First, Rivera asks this Court to strike down the unprecedented 300-1000%
penalty enhancement provision of 52 U.S.C. § 30109(6) as unconstitutionally vague, arbitrary,
capricious, and excessive on its face. Second, Rivera asks this Court to reconsider its analysis
4
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under the Yates test and determine that the amount of the fine requested by FEC is
unconstitutionally excessive under the Yates factors.
BACKGROUND
On February 23, 2021, the Court entered an order granting Plaintiff Federal Election
Commission (“FEC”)’s motion for summary judgment and concluding as a matter of law: (1) that
Rivera “knowingly and willfully” violated section 30122 of the Federal Election Campaign Act
(“FECA”) by making contributions in the name of others, 52 U.S.C. § 30122 (formerly 2 U.S.C.
§ 441f); 11 C.F.R. § 110.4(b)(1)(i); and (2) that the FEC’s civil penalty in the amount of $456,000
was appropriate and should be imposed on Rivera. See [DE 163 at 34-39]. On the liability issue,
the Court inferred from Ana Alliegro’s grand jury testimony and plea colloquy that Rivera directed
her to direct Democratic Candidate Lamar Sternad to falsely report on his disclosure forms that
certain in-kind contributions that Rivera supposedly made to third-party vendors for printing and
shipping Sternad campaign materials were paid for by a personal loan from Sternad to his own
campaign. See [DE 162].
Turning to the civil penalty, the Court did not conduct an evidentiary hearing to evaluate
the amount and instead determined that “Rivera has the ability to pay a $465,000 fine” based on:
(1) a disclosure statement that Rivera submitted to qualify for the 2016 election reflecting what his
self-reported net worth was 7 years ago; (2) unsubstantiated allegations from a pleading in a
separate lawsuit in New York about revenue that Rivera’s business allegedly received in the past;
and (3) the court’s independent review and judicial notice of the business’ filings on Sunbiz. See
[DE 142-37, 163-164]. The Court also concluded that the alleged FECA violations “injured the
public” by depriving the electorate of accurate information regarding Rivera’s role in financing
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Strernad’s campaign and eroding and undermining the public’s confidence in its representative
democracy. See [DE at 163].
Subsequent to the Court’s order, the Eleventh Circuit issued a lengthy opinion in Yates v.
Pinellas Hematology & Oncology, P.A., 21 F.4th 1288 (11th Cir. Dec. 29, 2021), analyzing a
statutory civil penalty under the False Claims Act (FCA) pursuant to the three-factor test
previously applied in the criminal forfeiture context under the Excessive Fines Clause of the
Eighth Amendment of the United States Constitution. See Yates, 21 F.4th 1288 (citing United
States v. Chaplin’s, Inc., 646 F.3d 846, 851 (11th Cir. 2011)); accord Robson 200, LLC v. City of
Lakeland, No. 8:20-cv-0161-KKM-JSS, 2022 U.S. Dist. LEXIS 53746 at *22-23 (M.D. Fla. Mar.
24 2022). The Yates court held that the Excessive Fines test applied because the FCA civil penalty
was “at least partially punitive.” See id. at 1308. Such civil penalties meet the definition of “fines”
and are subject to the Eighth Amendment standard that they are not “grossly disproportional to the
gravity of a defendant’s offense.” Yates, 21 F.4th 1288 at 1313 (quoting United States v.
Bajakajian, 524 U.S. 321, 334 (1998)).
This Court did not have the benefit of the Yates decision at the time it issued its summary
judgment order in this case. Accordingly, it is appropriate for the Court to reconsider its decision
based on the Yates analysis via Rule 59(e) or 60(b)(6). See Fed. R. Civ. P. 59(e), 60(b)(6);
Livernois v. Med. Disposables, Inc., 837 F.2d 1018, 1020 n.5 (11th Cir. 1988); Wendy’s Int’l v.
Nu-Cape Constr., 169 F.R.D. 680, 684 (M.D. Fla. 1996); Dr. Seuss Enters., Ltd. P'ship v.
ComicMix Ltd. Liab. Co., 553 F. Supp. 3d 803, 810 (S.D. Cal. 2021).
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LEGAL STANDARD
“The Federal Rules of Civil Procedure allow a litigant, subject to an adverse judgment, to
file either a motion to alter or amend under Rule 59(e) or a motion seeking relief from judgment
under Rule 60(b).” Wendy’s Int’l v. Nu-Cape Constr., 169 F.R.D. 680, 684 (M.D. Fla. 1996).
“Whether brought under Rule 59(e) or Rule 60(b), district courts have substantial discretion in
ruling on motions for reconsideration.” Black v. Tomlinson, 235 F.R.D. 532, 533 (D.D.C.
2006)Piper v. U.S. Dep’t of Justice, 312 F. Supp. 2d 17, 20 (D.D.C. 2004) (“The district court has
considerable discretion in ruling on a Rule 59(e) motion.”); Richardson v. Nat’l. R.R. Passenger
Corp., 311 U.S. App. D.C. 26, 49 F.3d 760, 765 (D.C. Cir. 1995) (noting district court’s “broad
discretion” in ruling on a Rule 60(b)(6) motion).
“Rule 59(e) and Rule 60(b) are distinct; they serve different purposes and produce different
consequences.
” Wendy’s, 169 F.R.D. at 684 (quoting Van Skiver v. United States, 952 F.2d 1241
(10th Cir. 1991), cert. denied, 506 U.S. 828 (1992)).
“A Rule 59(e) motion to alter or amend a
judgment properly may be used to ask a district court to reconsider its judgment and correct errors
of law.
” United States Labor Party v. Oremus, 619 F.2d 683, 687 (7th Cir. 1980) (citations
omitted).
“Rule 59(e) provides an efficient mechanism by which the trial court can correct
otherwise erroneous judgment without implicating the appellate process
.” Nelson v. Equifax Info.
Servs. LLC, 522 F. Supp. 2d 1222, 1237 (C.D. Cal. 2007) (citation omitted). Alternatively, “Rule
60(b)(1) allows a court to relieve a party from a final judgment, order or proceeding because of
mistake, inadvertence, surprise, or excusable neglect.” Livernois v. Med. Disposables, Inc., 837
F.2d 1018, 1020 n.5 (11th Cir. 1988) (quoting Fed. R. Civ. P. 60(b)). “Section (b)(6) allows a court
to grant relief for any other reason justifying relief from the operation of the judgment.” Id.
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“[C]ourts have delineated three major grounds justifying reconsideration: (1) an
intervening change in controlling law; (2) the availability of new evidence; and (3) the need to
correct clear error or prevent manifest injustice.” Easterwood v. Carnival Corp., No. 19-cv-22932,
2021 U.S. Dist. LEXIS 147576, at *4-5 (S.D. Fla. Aug. 6, 2021) (citations omitted). However,
“reconsideration of a previous order is an extraordinary remedy to be employed sparingly in the
interests of finality and conservation of scarce judicial resources.” Wendy’s Int’l, Inc. v. Nu-Cape
Constr., Inc., 169 F.R.D. 680, 685 (M.D. Fla. 1996). “[T]he movant must do more than simply
restate his or her previous arguments, and any arguments the movant failed to raise . . . will be
deemed waived.” Compania de Elaborados de Cafe v. Cardinal Cap. Mgmt., Inc., 401 F. Supp.
2d 1270, 1283 (S.D. Fla. 2003). In addition, a Rule 59(e) motion “is not a vehicle for rehashing
arguments already rejected by the court or for refuting the court’s prior decision.” Wendy’s Int’l,
Inc., 169 F.R.D. at 686. A party’s disagreement with the Court’s treatment of facts and legal
conclusions is not a proper basis for a Rule 59(e) motion. See Michael Linet, Inc. v. Vill. of
Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005).
In the context of Rule 59(e), “cases which generally or substantively alter existing law,
such as by overruling it, or creating a significant shift in a court's analysis,” are intervening
changes in law warranting relief, whereas “cases which merely confirm, clarify or explain existing
case law do not provide a basis for relief.” Dr. Seuss Enters., Ltd. P'ship v. ComicMix Ltd. Liab.
Co., 553 F. Supp. 3d 803, 810 (S.D. Cal. 2021) (emphasis added) quoting Teamsters Loc. 617
Pension & Welfare Funds v. Apollo Grp., Inc., 282 F.R.D. 216, 224 (D. Ariz. 2012)).
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ANALYSIS
I. The Excessive Fines Clause
The Eighth Amendment provides that “[e]xcessive bail shall not be required, nor excessive
fines imposed, nor cruel and unusual punishments inflicted.” U.S. Const., amdt. 8. “The Excessive
Fines Clause limits the government’s power to extract payments, whether in cash or in kind, as
punishment for some offense.” Yates v. Pinellas Hematology & Oncology, P.A., No. 20-10276,
2021 U.S. App. LEXIS 38556, at *33 (11th Cir. Dec. 29, 2021) (emphasis added) (quoting Austin
v. United States, 509 U.S. 602, 609-10, 113 S. Ct. 2801, 125 L. Ed. 2d 488 (1993)). “Consequently,
the Excessive Fines Clause applies only to payments imposed by the United States (or the States)
and payable to it (or them).” See id. (citing Austin, 509 U.S. at 606-07; Browning-Ferris, 492 U.S.
at 264). “That is because the object of the Eighth Amendment is to prevent the government from
abusing its power to punish.” Id. (emphasis added) (quoting Austin, 509 U.S. at 607). “The
Excessive Fines Clause applies only to ‘fines,’ i.e., payments to a sovereign as punishment for
some offense.” Id. (emphasis added) (quoting Bajakajian, 524 U.S. at 327). “A payment
constitutes a fine so long as it can only be explained as serving in part to punish.” Id. (quoting
Austin, 509 U.S. at 610) (concluding that False Claims Act (“FCA”) “monetary awards are fines
for the purposes of the Excessive Fines Clause, precisely because they are at least in part
punitive.”) (emphasis added).
2
2. Similarly, “[e]xcessive fines . . . are forbidden” under the Florida Constitution. See
Fla. Const., art. I, § 17. In Florida, a “statutorily authorized civil fine” is unconstitutionally
“excessive” when “it is so great as to shock the conscience of reasonable men or is patently and
unreasonably harsh and oppressive.” Locklear v. Fla. Fish & Wildlife Conservation Comm’n, 886
So. 2d 326, 329 (Fla. 5th DCA 2004) (citing Amos v. Gunn, 84 Fla. 285, 94 So. 615 (1922)).
“Tracking with the Eighth Amendment analysis, these requirements include the principle of
proportionality.” Robson 200, Ltd. Liab. Co. v. City of Lakeland, No. 8:20-cv-0161-KKM-JSS,
2022 U.S. Dist. LEXIS 53746, at *18-19 (M.D. Fla. Mar. 24, 2022) (quoting State v. Cotton, 198
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The Eleventh Circuit’s recent pronouncement in Yates represents a significant change in
controlling law in this jurisdiction because it establishes the proper analysis for determining
whether a civil penalty that is at least partially punitive in nature is an unconstitutionally excessive
fine under the Eighth Amendment. To make this determination, the Court must focus on whether
amount of the fine is “grossly disproportional to the gravity of a defendant’s offense” based on the
following non-exhaustive list of factors: “(i) whether the defendant is in the class of persons at
whom the statute was principally directed; (ii) how the imposed penalties compare to other
penalties authorized by the legislature; and (iii) the harm caused by the defendant.” See Yates, 21
F.4th 1288 (citing United States v. Chaplin’s, Inc., 646 F.3d 846, 851 (11th Cir. 2011)); accord
Robson 200, LLC v. City of Lakeland, No. 8:20-cv-0161-KKM-JSS, 2022 U.S. Dist. LEXIS 53746
at *22-23 (M.D. Fla. Mar. 24 2022).
3
So. 3d 737, 741, 743 (Fla. 2d DCA 2016) (quoting Bajakajian, 524 U.S. at 334)). “Florida courts
also apply the same excessiveness factors to excessive fines claims under the United States and
Florida constitutions.” Id. (citing Gordon v. State, 139 So. 3d 958, 960 (Fla. 2d DCA 2014)).
3. Although suits between private parties are not subject to the Eighth Amendment
prohibition on excessive fines, it is worth noting the significant overlap between the factors
identified in the Excessive Fines analysis and the factors identified by the United States Supreme
court for reviewing punitive damages. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S.
408, 418, 123 S. Ct. 1513, 1520-21 (2003) (“[I]n [BMW v. Gore], “we instructed courts reviewing
punitive damages to consider three guideposts: (1) the degree of reprehensibility of the defendant’s
misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the
punitive damages award; and (3) the difference between the punitive damages awarded by the jury
and the civil penalties authorized or imposed in comparable cases. We reiterated the importance
of these three guideposts in Cooper Industries and mandated appellate courts to conduct de novo
review of a trial court’s application of them to the jury’s award. Exacting appellate review ensures
that an award of punitive damages is based upon an application of law, rather than a
decisionmaker's caprice.”) (internal citations omitted).
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II. The Federal Election Campaign Act
The civil penalty at issue in this case was based on the Federal Election Campaign Act
(“FECA”). See 52 U.S.C. §§ 30101-30146 (formerly 2 U.S.C. §§ 431-457); see also 11 C.F.R. §§
1.1-9039.3. Originally enacted in 1972,
4
FECA regulates federal elections by (among other things)
establishing limits on campaign contributions and creating reporting requirements for campaign
donations and expenditures. See id. Pertinent here, section 30122 prohibits “contributions in name
of another.” See 52 U.S.C.S. § 30122 (formerly 2 U.S.C. 441f) (
“No person shall make a
contribution in the name of another person or knowingly permit his name to be used to effect such
a contribution, and no person shall knowingly accept a contribution made by one person in the
name of another person.”); see also 11 C.F.R. 110.4, 110.6.
FECA imposes criminal and civil penalties for violations and is especially harsh for
“knowing and willful” violations of section 30122. See 52 U.S.C. §§ 30109 (formerly 2 U.S.C.
437g); see also 11 C.F.R. 111.24. Pertinent here:
(B) In any civil action instituted by the Commission under subparagraph
(A), the court may grant a permanent or temporary injunction, restraining order, or
other order, including a civil penalty which does not exceed the greater of $5,000
or an amount equal to any contribution or expenditure involved in such violation,
upon a proper showing that the person involved has committed, or is about to
commit (if the relief sought is a permanent or temporary injunction or a restraining
order), a violation of this Act or chapter 95 or chapter 96 of the Internal Revenue
Code of 1954 [1986] [26 USCS §§ 9001 et seq. or 9031 et seq.].
(C) In any civil action for relief instituted by the Commission under
subparagraph (A), if the court determines that the Commission has established that
the person involved in such civil action has committed a knowing a willful violation
of this Act or of chapter 95 or chapter 96 of the Internal Revenue Code of 1954
[1986] [26 USCS §§ 9001 et seq. or 9031 et seq.], the court may impose a civil
penalty which does not exceed the greater of $10,000 or an amount equal to 200
percent of any contribution or expenditure involved in such violation (or, in the
case of a violation of section 320 [52 USCS § 30122], which is not less than 300
4. See Pub.L. 92–225, 86 Stat. 3, enacted February 7, 1972.
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percent of the amount involved in the violation and is not more than the greater of
$50,000 or 1,000 percent of the amount involved in the violation).
52 U.S.C.S. § 30109(6) (emphasis added). The lower civil penalty in Paragraph (B) applies unless
the FEC establishes that the violation was “knowing and willful” in which case the higher civil
penalties in Paragraph (C) apply. See id.
Paragraph (C) further increases the civil penalty for “knowing and willful violation[s]” of
section 30122 (i.e., for contributions in the name of another). For such violations, FECA mandates
a fine between 300% and 1000% of “the amount involved in the violation.” See id. The 300-1000%
provision was added to FECA in the 2002 McCain-Feingold amendments a/k/the Bipartisan
Campaign Reform Act of 2002 (“BCRA”).
5
A review of the Congressional Record surrounding
the passage of the BCRA does not indicate how the language of the 300-1000% provision was
created or what studies were performed to select these unprecedented percentages. A review of
other civil penalties contained in state and federal statutes does not reflect another civil penalty
that comes close to the magnitude of the 300-1000% provision. Further, neither the FECA nor its
implementing regulations provide any guidance or standards for determining which percentage
level to apply when setting a civil penalty for a knowing and willful violation of section 30122.
Simply put, the 300%-1000% provision appears to authorize courts to impose the largest multiplier
for any civil penalty on the books – and provides no instructions on how to apply it.
5. See Pub. L. 107-155, 116 Stat. 81, enacted Mar. 27, 2002; Shays v. FEC, 528 F.3d
914, 916-17 (DC Cir. 2008) (“Congress passed the McCain-Feingold Act, formally known as the
Bipartisan Campaign Reform Act of 2002 (BCRA), Pub. L. No. 107-155, 116 Stat. 81, in an effort
to rid American politics of two perceived evils: the corrupting influence of large, unregulated
donations called ‘soft money,’ and the use of ‘issue ads’ purportedly aimed at influencing people’s
policy views but actually directed at swaying their views of candidates. The Federal Election
Commission promulgated regulations implementing the Act, but . . . we rejected several of them
as either contrary to the Act or arbitrary and capricious, concluding that the Commission had
largely disregarded the Act in an effort to preserve the pre-BCRA status quo.”).
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III. This Case
Before analyzing the amount of the civil penalty imposed in this case, Rivera notes that
although he disputes the Court’s summary judgment findings of fact and conclusions of law (e.g.,
whether there was a “knowing and voluntary violation”, whether he made any in kind donations
to the Sternad campaign, whether he instructed Alliegro to instruct Sternad to misrepresent in his
reports, whether the conduct alleged is actually a violation of 52 U.S.C. § 30122, etc.), the analysis
in this motion does not reargue these points because it would likely exceed the scope of permissible
argument on a 59(e) or 60(b) motion. As the Court previously advised, relief on the underlying
liability issues should be sought with the Court’s brethren in Atlanta. See [DE 49 at 30]. Instead,
Rivera confines his arguments to those related to reconsideration and remitting the historically
high civil fine imposed upon him at summary judgment. Given the magnitude of the fine, the lack
of standards contained in section 30109(6), the lack of an evidentiary hearing, the lack of evidence,
and the Eleventh Circuit’s recent decision in Yates, the Court should exercise its discretion to
vacate the final judgment and the civil penalty, conduct an evidentiary hearing, and analyze the
evidence under the Excessive Fines factors.
A. The FECA civil fine is at least partially punitive
In its summary judgment order, the Court expressed that “it is necessary for this Court to
also bar [Rivera] from violating the statute” and “from engaging in similar unlawful conduct in
the future” and that the Court’s remedies would “do the trick” in “convincing Rivera” to “stop
violating the law.” See [DE 163 at 38]. The Court also expressed that the civil penalty would
“vindicate the FEC’s authority and strengthen its ability to enforce 52 U.S.C. § 30122.” See [DE
163 at 37]. The Court’s justifications reflect that the penalties imposed were at least partly penal
in nature because they are grounded in the common law principles of punishment: general
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deterrence, specific deterrence, incapacitation, and retribution. See Yates, 21 F.4th at 1325 and n.4
(“In the criminal law, district courts impose fines based on a set of statutory standards, located in
18 U.S.C. §§ 3553(a) and 3572.3 These standards are Congress’s codification of the traditional
purposes of sentencing: general deterrence, specific deterrence or incapacitation, and
retribution.”).
Other decisions applying the FECA civil penalties have referred to them as punitive in
nature. See e.g., FEC v. Craig for U.S. Senate, 70 F. Supp. 3d 82, 88, 99 (D.D.C. 2014) (imposing
a “penalty of $45,000, which the Court finds necessary and appropriate to punish defendants’
misconduct and to deter future misconduct by others”) (“[T]he FEC argues that a penalty is
necessary to deter similar violations and to punish defendants, noting that the purpose of a civil
penalty is to punish culpable individuals, not just to restore the status quo. FEC Reply at 13”)
(emphasis added); Fed. Election Com. v. Furgatch, 869 F.2d 1256, 1259 (9th Cir. 1989) (“The
district court was free to conclude that the absence of good faith efforts by Furgatch to undo or
cure his violations is indicative of the need for a large penalty to deter future wrongdoing.”)
(emphasis added); FEC v. Latpac, No. 1:21-cv-06095 (ALC) (SDA), 2022 U.S. Dist. LEXIS
61125, at *11 (S.D.N.Y. Mar. 31, 2022) (“[T]he Court finds that a civil penalty in the amount of
$56,400 achieves the purposes of punishment and deterrence.”) (emphasis added) (citing New
York v. United Parcel Serv., Inc., 942 F.3d 554, 599 (2d Cir. 2019) (In general, civil penalties are
designed to punish culpable individuals, deter future violations, and prevent the conduct's
recurrence.”)); FEC v. O'Donnell, No. 15-17-LPS, 2017 U.S. Dist. LEXIS 59524, at *5-6 (D. Del.
Apr. 19, 2017) (“Civil penalties are generally intended to punish culpable individuals, not simply
extract compensation or restore the status quo.”) (quoting Tull v. United States, 481 U.S. 412, 422,
107 S. Ct. 1831, 95 L. Ed. 2d 365 (1987)) (“FECA explicitly authorizes courts to impose civil
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penalties” and the Court considers “the penalty’s deterrent effect”) (emphasis added); FEC v. Am.
Fed’n of State, Cty. & Mun. Empls.-P.E.O.P.L.E. Qualified, Civil Action No. 88-3208 (RCL),
1991 U.S. Dist. LEXIS 15654, at *5 (D.D.C. Oct. 31, 1991) (“[D]efendants shall pay a civil penalty
of $ 2,000 ($ 1,000 for each violation) because the public's interest will be served by punishing a
violation of the plain language of the statute.”) (emphasis added).
Because the civil penalties are at least partially punitive in nature, the Court must apply the
Excessive Fines analysis of Yates to determine if the amount of the fine violates the Eighth
Amendment. See Yates.
B. Section 30109(6) is unconstitutionally standardless
In Yates, Judge Tjoflat (concurring in part) contrasted the lack of standards for calculating
civil penalties under the FCA with the specific standards created to calculate criminal fines under
the sentencing guidelines. See Yates, 21 F.4th at 1325-26 (“[W]ithout a set of standards, the district
court has unfettered discretion to impose any fine within the statutory range. And that makes
imposition of such fines essentially unreviewable for us, except under the Eighth Amendment.”).
However, the “Opinion of the Court” did not decide that the FCA was facially unconstitutional for
this reason because: (1) the appellant did not “base its Eighth Amendment challenge on the
procedural claim that the FCA lacks standards”; and (2) the district court imposed the statutory
minimum penalty and lacked authority to go below it absent a constitutional violation. Since the
district court did not choose a penalty somewhere above the minimum, its discretion did not come
into play. See Yates, 21 F.4th at 1316 at n.9.
Unlike the civil penalty at issue in Yates, this Court did not select the minimum penalty
allowed under the FECA – it exercised its discretion to choose 700% which is closer to the
maximum penalty. Accordingly, FECA’s lack of standards is squarely at issue in this case. The
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civil penalty provisions of section 30109(6) are facially unconstitutional because they provide no
standards to guide the Court in selecting from 300-1000% as the correct percentage. In this case,
neither the FEC nor the Court provide any specific explanation for why 700% was selected as the
magic number for the record-breaking civil penalty imposed on Rivera.
C. The Court did not apply the Yates analysis
Obviously, the Court did not have the benefit of Yates at the time it imposed the civil
penalty in this case because the Court’s order was entered about ten months before the Eleventh
Circuit published its decision in Yates. Accordingly, the Court relied on the Furgatch factors
which, as shown above, can be traced back to the Eleventh Circuit’s prior holding in Danube
Carpet which no longer applies to punitive civil penalties after Yates. See FEC v. Furgatch, 869
F.2d 1256, 1258 (9th Cir. 1989); United States v. Danube Carpet Mills, Inc., 737 F.2d 988, 993
(11th Cir. 1984)). Accordingly, the Court should reconsider its ruling under Yates and consider
whether amount of the fine is “grossly disproportional to the gravity of a defendant’s offense”
based on: “(i) whether the defendant is in the class of persons at whom the statute was principally
directed; (ii) how the imposed penalties compare to other penalties authorized by the legislature;
and (iii) the harm caused by the defendant.” See Yates, 21 F.4th 1288 (citing United States v.
Chaplin’s, Inc., 646 F.3d 846, 851 (11th Cir. 2011)).
D. The fine is unconstitutionally excessive under Yates
Under the Yates test, the amount of the fine is grossly disproportionate to the alleged
offense. First, it is not clear that Rivera is within the class of persons that sections 30109 and 30122
were principally directed. As the Supreme Court recently explained:
The right to participate in democracy through political contributions is
protected by the First Amendment, but that right is not absolute. Our cases have
held that Congress may regulate campaign contributions to protect against
corruption or the appearance of corruption. See, e.g., Buckley v. Valeo, 424 U.S. 1,
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26-27, 96 S. Ct. 612, 46 L. Ed. 2d 659 (1976) (per curiam). At the same time, we
have made clear that Congress may not regulate contributions simply to reduce the
amount of money in politics, or to restrict the political participation of some in order
to enhance the relative influence of others. See, e.g., Arizona Free Enterprise
Club’s Freedom Club PAC v. Bennett, 564 U.S. 721, 749-750, 131 S. Ct. 2806,
2827, 180 L. Ed. 2d 664, 686 (2011).
Many people might find those latter objectives attractive: They would be
delighted to see fewer television commercials touting a candidate’s
accomplishments or disparaging an opponent’s character. Money in politics may at
times seem repugnant to some, but so too does much of what the First Amendment
vigorously protects. If the First Amendment protects flag burning, funeral protests,
and Nazi parades—despite the profound offense such spectacles cause—it surely
protects political campaign speech despite popular opposition.
See Texas v. Johnson, 491 U.S. 397, 109 S. Ct. 2533, 105 L. Ed. 2d 342
(1989); Snyder v. Phelps, 562 U.S. 443, 131 S. Ct. 1207, 179 L. Ed. 2d 172
(2011); National Socialist Party of America v. Skokie, 432 U.S. 43, 97 S. Ct. 2205,
53 L. Ed. 2d 96 (1977) (per curiam). Indeed, as we have emphasized, the First
Amendment “has its fullest and most urgent application precisely to the conduct of
campaigns for political office.” Monitor Patriot Co. v. Roy, 401 U.S. 265, 272, 91
S. Ct. 621, 28 L. Ed. 2d 35 (1971).
McCutcheon v. FEC, 572 U.S. 185, 191-92, 134 S. Ct. 1434, 1441 (2014). Thus, the analysis
should start with a recognition of the basic premise that spending money in elections is generally
a protected constitutional right under the First Amendment. Further, on the motion to dismiss
FEC’s amended complaint, the parties hotly debated whether the alleged conduct constituted a
direct violation of 52 U.S.C. § 30122’s prohibition on making contributions in the name of another.
The FEC claimed that Rivera “made” contributions “in the name of” the candidate Lamar Sternad
when Lamar Sternad falsely reported that some of the in-kind printing and shipping services his
campaign received were paid for with a personal loan from Sternad to his own campaign. There
was no allegation that Rivera falsely ascribed Sternad’s or anyone else’s name to his donations.
Instead, the FEC claims that Rivera told Alliegro to instruct Sternad to make the false report and
Sternad followed Rivera’s orders. However, as the hearing transcript reflects, it is debatable
whether these allegations state a violation of section 30122 which only prohibits “making” a
donation in the name of another, “accepting” a donation in the name of another, or “allowing”
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another person to make a donation in your name. See 52 U.S.C. § 30122. As the Court noted in its
order dismissing the original complaint, FEC lacks authority under section 30122 to pursue claims
against individuals who “help” or “aid and abet” violations of section 30122. See [DE 31] (citing
Federal Election Comm’n v. Swallow, 304 F. Supp. 3d 1113, 1115 (D. Utah 2018). That’s why
FEC abandoned its original “participant” theory alleged in its original complaint and changed its
factual allegations to claim that Rivera directly made a contribution in the name of another.
Compare [DE 1] with [DE 41]. Because it is not obvious that Rivera is within the class of persons
section 30122 is directed at, the first Yates factor weighs against applying 700% penalty multiplier
based on the 300-1000% penalty enhancement for violations of 30122. See 52 U.S.C. § 30901(6).
Second, the Court did not consider compare any other statutory civil penalty regimes to
the 300%-1000% provision at issue here. However, a review of federal and state statutes reveals
that there is apparently no statute that provides an enhancement that requires anywhere near the
minimum range required (300%) and the maximum range permitted (1000%) under section
30901(6). It appears to be an anomaly on the books and yet another arbitrary, capricious, and
unconstitutional product of the 2002 McCain-Feingold amendments. Although misrepresenting
the source of a campaign donation is arguably detrimental because it restricts information that
would otherwise be public, it is hard to understand why Congress would impose civil penalties for
such violations that far exceed those available for other offenses that actually enable the violator
to profit by causing tangible harm to particular individuals and the government (e.g., insider
trading, submitting fraudulent Medicare claims, violating FDA or EPA standards, etc.).
Lastly, other than generalized harm that is caused by violation of any law, the alleged
violations at issue here were low on the harm scale. FEC doesn’t allege that Rivera donated to the
Sternad campaign as quid pro quo to obtain political favors from Sternad should he get elected.
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Therefore, the traditional purpose of laws requiring public disclosure of campaign donations is not
part of FEC’s claim. Rather, FEC claims Rivera paid for print ads and campaign publications for
Sternad (i.e., political junk mail). Other than cluttering the electorate’s mailboxes, this is hardly
the kind of in-kind donation that would severely harm the public. Also, Rivera did not win the
election after all, and Joe Garcia – the opponent Rivera allegedly feared losing to – did win. So,
Rivera did not benefit, and Garcia was not harmed by the alleged violations. “Admittedly, there is
always harm to the public when [the Act] is violated.” FEC v. Kalogianis, No. 8:06-cv-68-T-
23EAJ, 2007 U.S. Dist. LEXIS 88139, at *20 (M.D. Fla. Nov. 30, 2007) (quoting FEC v. American
Fed'n of State, County and Municipal Employees- P.E.O.P.L.E. Qualified, 1991 U.S. Dist. LEXIS
15654, 1991 WL 241892 (D.D.C. Oct. 31, 1991)). “Nonetheless, in this instance any injury to the
public is remote and circumscribed.” Id. (imposing civil penalties on defendants for “making,
consenting to, and accepting in-kind corporate contributions; and for falsely reporting the sources
of two of the loans and the dates of repayment of two others”).
Thus, all three Yates factors weigh against imposing a substantial fine under the allegations
and evidence in this case. Certainly, imposing the largest fine in FEC history on a non-corporate
individual is not sustainable applying Yates to the allegations and evidence in this case.
E. Procedural problems with the fine
Furthermore, the Court imposed the massive fine on Rivera as a matter of law at summary
judgment despite conflicting and inconclusive evidence without conducting a trial on liability or
evidentiary hearing on the amount of the fine. See Tull v. United States, 481 U.S. 412, 422, 107 S.
Ct. 1831, 95 L. Ed. 2d 365 (1987). And the amount FEC claimed at summary judgment was based
on new allegations of additional FECA violations that were not alleged in its original or amended
complaints and caused the fine to exceed the amounts alleged in FEC’s complaints. See Moore v.
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Shands Jacksonville Med. Ctr., No. 3:09-cv-298-J-34TEM, 2013 U.S. Dist. LEXIS 190745, at *83
n.43 (M.D. Fla. Oct. 18, 2013) (“A plaintiff may not amend [its] complaint through argument for
or against summary judgment.”). Also, in determining whether Rivera and the “ability to pay” a
$465,000 civil penalty, the Court relied on stale information about Rivera’s past net worth 7-years
ago and unsubstantiated allegations about revenue allegedly paid to Rivera’s business in the past.
Lastly, the Court took issue with Rivera’s defense against FEC’s charges and improperly
used it against him as its primary consideration in its analysis of the severity of the penalty. See
[DE 163 at 37-38] “First and foremost, as his filings in this case demonstrate, Rivera continues to
refuse to take responsibility for his illegal conduct [and] continues to run for office.”). Rivera was
never charged or convicted of a crime related to the FEC’s allegations and was entitled to exercise
his constitutional right to run for office. He was also “entitled to have the complicated statutory
and regulatory issues in this case determined by a court.” FEC v. Kalogianis, No. 8:06-cv-68-T-
23EAJ, 2007 U.S. Dist. LEXIS 88139, at *19-20 (M.D. Fla. Nov. 30, 2007) (citing FEC v. Friends
of Jane Harman, 59 F. Supp. 2d 1046, 1059 (C.D. Cal. 1999) (denying the Commission’s
contention that the defendants’ “determined resistance to conciliation” should result in a
significant financial penalty).
CONCLUSION
For the foregoing reasons, Rivera asks this Court to grant this Motion and: (1) vacate the
final judgment and the civil penalty; (2) strike the 300-1000% penalty enhancement provision of
52 U.S.C. § 30109(6) as unconstitutionally vague, arbitrary, capricious, and excessive on its face;
(3) reconsider its analysis under the Yates test and determine that the amount of the fine requested
by FEC is unconstitutionally excessive under the Yates factors; and (4) for general relief consistent
with the foregoing.
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on April 26, 2022, a copy of this document as refiled was
furnished by electronic filing with the Clerk of the Court via CM/ECF, to:
Greg J. Mueller
F
EDERAL ELECTION COMMISSION
1050 First Street, NE
Washington, DC 20463
202-694-1650
Counsel for Plaintiff FEC
Kevin Deeley
F
EDERAL ELECTION COMMISSION
999 E. Street NW
Washington, DC 20463
202-694-1650
Counsel for Plaintiff FEC
Lisa J. Stevenson
F
EDERAL ELECTION COMMISSION
999 E. Street NW
Washington, DC 20463
202-694-1650
Counsel for Plaintiff FEC
Harry J. Summers
F
EDERAL ELECTION COMMISSION
999 E Street, NW
Washington, DC 20463
202-694-1553
Counsel for Plaintiff FEC
Shaina Ward Jeffrey David Feldman
F
EDERAL ELECTION COMMISSION TRAILBLAZER
1050 First Street NE 1200 Brickell Avenue
Washington, DC 20463 Penthouse 1900
202-694-1566 Miami, FL 33131
Counsel for Defendant David Rivera
Respectfully submitted,
/s/ Thomas L. Hunker
Thomas L. Hunker
Fla. Bar No. 38325
Sarah Hafeez
Fla. Bar No. 111518
H
UNKER APPEALS
110 SE 6th Street, Suite 2330
Fort Lauderdale, FL 33301
877-841-8808
Counsel for Defendant David Rivera
21
