CERBO v. PROTECT Colo. JOBS INC., 09CA0587.

• Citation: 240 P.3d 495
• Decision Date: 10 June 2010
• Docket Number: No. 09CA0587.,09CA0587.
• Parties: Michael CERBO, Complainant-Appellant, and Colorado Secretary of State, Intervenor, v. PROTECT COLORADO JOBS, INC., Respondent-Appellee, and Office of Administrative Courts, Appellee.
• Court: Court of Appeals of Colorado

240 P.3d 495

Michael CERBO, Complainant-Appellant,

and

Colorado Secretary of State, Intervenor,

v.PROTECT COLORADO JOBS, INC., Respondent-Appellee,andOffice of Administrative Courts, Appellee.

No. 09CA0587.

Colorado Court of Appeals,Div. VII.

May 13, 2010.

As Modified June 10, 2010.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Office of Administrative Courts, Case No. OS080017.

Isaacson Rosenbaum, P.C., Mark G. Grueskin, Blain D. Myhre, Denver, Colorado, for Complainant-Appellant.

John W. Suthers, Attorney General, Monica M. Márquez, Deputy Attorney General, Matthew D. Grove, Assistant Attorney General, Denver, Colorado, for Intervenor.

Hackstaff Gessler LLC, Scott E. Gessler, Mario D. Nicolais, II, Denver, Colorado, for Respondent-Appellee.

John W. Suthers, Attorney General, Denver, Colorado, for Appellee.

Opinion by Judge J. JONES.

Complainant, Michael Cerbo, appeals the administrative law judge's order determining that respondent, Protect Colorado Jobs, Inc. (PCJ), was not an “issue committee” within the meaning of Colorado Constitution article XXVIII, subsection 2(10)(a) with respect to a right-to-work initiative, Amendment 47, that was put to Colorado voters in the November 2008 election, because PCJ did not have “a major purpose” of supporting that initiative. ¹ Based on that determination, the ALJ concluded that PCJ had not violated subsections 1-45-108(1)(a)(I) and (3), C.R.S. 2008, of the Fair Campaign Practices Act (Act) by failing to register and file reports of its contributions and expenditures relating to Amendment 47 with the Secretary of State. We conclude that the facts in the record demonstrate that PCJ had a major purpose of supporting the initiative. Accordingly, we reverse the order and remand for further proceedings.

I. Background

A. Relevant Statutory and Constitutional Provisions

The Act imposes registration and reporting requirements on various entities, including “issue committees.” Specifically, during the election cycle at issue, subsection 1-45-108(3) of the Act required issue committees to register with the Secretary of State before making or accepting any contributions. ² Subsection 1-45-108(1)(a)(I) requires issue committees to “report to the appropriate officer their contributions received, including the name and address of each person who has contributed twenty dollars or more; expenditures made, and obligations entered into by the committee or party.”

Article XXVIII, subsection 2(10)(a) defines an “issue committee” for purposes of the Act as

any person, other than a natural person, or any group of two or more persons, including natural persons:

(I) That has a major purpose of supporting or opposing any ballot issue or ballot question; or

(II) That has accepted or made contributions or expenditures in excess of two hundred dollars to support or oppose any ballot issue or ballot question.

Despite the article's use of the ordinarily disjunctive “or,” the Secretary of State has determined that an organization must satisfy both subsections (I) and (II) to be considered an issue committee. Fair Campaign Practices Act Rule 1.7(b), 8 Code Colo. Regs. 1505-6. No party challenges that determination.

The ALJ in this case made no finding under subsection (II).

B. Facts

The material facts are essentially undisputed. We take the following facts from the ALJ's findings and the stipulated record.

In March 2007, several individuals, including Ryan Frazier and Andrew Zuppa, began discussing placing a right-to-work initiative on the next general election ballot. Within the next several months, John Berry, with the help of Curt Cerveny, Julian Cole, and Mr. Frazier, drafted the proposed right-to-work initiative. Mr. Frazier and Mr. Cole became the initiative's named proponents. By May 2, 2007, the right-to-work initiative-Initiative 2007-2008 # 38-was listed on the Secretary of State's website and scheduled for a title board hearing.

Two days later, Mr. Berry incorporated PCJ as a nonprofit organization. He served as PCJ's secretary-treasurer, registered agent, and attorney. Mr. Cerveny served as its president.

On August 1, 2007, the title board set the title for Initiative 2007-2008 # 38. However, on September 11, 2007, the proponents withdrew that initiative and submitted a new right-to-work initiative-Initiative 2007-2008 # 41-in its place. The same individuals who had drafted the first initiative drafted its replacement. The title board set the title for Initiative 2007-2008 # 41 on October 10, 2007.

On November 19, 2007, Mr. Berry registered the Colorado Right to Work Committee (CRWC) as an issue committee for Initiative 2007-2008 # 41 with the Secretary of State. Mr. Cerveny ran CRWC on a day-to-day basis. CRWC was formed expressly to obtain enough signatures to have the initiative placed on the November 2008 general election ballot.

On December 7, 2007, Kennedy Enterprises contracted with PCJ to circulate petitions for the signatures necessary to place Initiative 2007-2008 # 41 on the November 2008 ballot. The contract identified the initiative as “PCJ's initiative.” PCJ designated Mr. Zuppa as its agent for receiving the signatures. PCJ paid for Kennedy Enterprises' services either by writing checks directly to Kennedy Enterprises or by writing checks to CRWC, which would then pay Kennedy Enterprises. Payments through CRWC were handled by Mr. Cerveny, who would transfer funds from PCJ to CRWC and then write a check from CRWC to Kennedy Enterprises. PCJ ultimately paid almost $300,000 for the petition circulation services.

The Secretary of State ultimately certified sufficient signatures for Initiative 2007-2008 # 41, and it was placed on the November 2008 statewide ballot as Amendment 47.

PCJ never registered as an issue committee nor did it ever submit any reports of contributions and expenditures.

On April 8, 2008, Mr. Cerbo filed a complaint with the Secretary of State alleging that CRWC had violated the Act, sections 1-45-101 to -118, C.R.S.2009, by, among other things, failing to report certain contributions from PCJ. An ALJ found that CRWC had violated the Act's reporting requirements as to those contributions. CRWC did not appeal that finding.

On June 11, 2008, Mr. Cerbo filed a complaint with the Secretary of State alleging that PCJ had violated the Act by failing to register as an issue committee with the Secretary of State, see § 1-45-108(3), and by failing to file reports of its contributions and expenditures with the Secretary of State, see § 1-45-108(1)(a)(I), because it was an “issue committee” with respect to Amendment 47. Based on the record before her, which consisted of the evidence received in the proceeding on Mr. Cerbo's complaint against CRWC and transcripts of the depositions of Mr. Cole and Mr. Frazier, the ALJ (who had also decided the CRWC complaint) determined that Mr. Cerbo had failed to prove by a preponderance of the evidence that PCJ had a major purpose of supporting Initiative # 41 and, therefore, PCJ was not an issue committee subject to the Act's registration and reporting requirements.

On appeal, Mr. Cerbo challenges the ALJ's conclusion that PCJ did not have a major purpose of supporting Initiative 2007-2008 # 41. In addition to responding to that challenge, PCJ contends that the phrase “a major purpose” in article XXVIII, subsection 2(10)(a)(I) is unconstitutionally vague and overbroad on its face.

II. “A Major Purpose”

A. Standard of Review

The parties urge differing standards of review: Mr. Cerbo argues that the question whether an entity has “a major purpose” of supporting (or opposing) a ballot issue is one of law, which we should review de novo, while PCJ argues that the question is one of fact, which we must review only for clear error. The appropriate standard of review in this context has not heretofore been expressly determined by any Colorado appellate court. We conclude that the question is a mixed question of law and fact: we review findings of historical fact for clear error, but the ultimate determination of “a major purpose” is one of law that we review do novo.

Whether an entity has “a major purpose” of supporting or opposing a ballot issue necessarily requires interpretation of the meaning of that phrase and application of the standard to particular facts. The interpretation of a constitutional provision and the application of a constitutional standard present questions of law subject to de novo review. Danielson v. Dennis, 139 P.3d 688, 690-91 (Colo.2006); City of Golden v. Parker, 138 P.3d 285, 289 (Colo.2006); Washington County Bd. of Equalization v. Petron Development Co., 109 P.3d 146, 149 (Colo.2005); see Independence Institute v. Coffman, 209 P.3d 1130, 1135 (Colo.App.2008), cert. denied, No. 09SC26, 2009 WL 1514919 (Colo.), cert. denied, --- U.S. ----, 130 S.Ct. 625, 175 L.Ed.2d 479 (2009).

Further, the registration and reporting requirements at issue implicate the First Amendment rights of freedom of speech and association. See Citizens United v. Federal Election Comm'n, 558 U.S. ----, ----, 130 S.Ct. 876, 914, --- L.Ed.2d ----, ---- (2010) (observing that “disclosure requirements may burden the ability to speak”); Buckley v. Valeo, 424 U.S. 1, 64, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (“compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment”); Common Sense Alliance v. Davidson, 995 P.2d 748, 749 (Colo.2000) (observing that reporting provisions of the Act implicate “constitutional rights concerning freedom of association and freedom of speech”). Where these rights are implicated, an appellate court should undertake an independent review of the record to assure that the judgment does not impermissibly intrude on the field of free expression. Lewis v. Colorado Rockies Baseball Club, Ltd., 941 P.2d 266, 270-71 (Colo.1997) (citing Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 499, 104 S.Ct. 1949, 80 L.Ed.2d 502...