Ageton v. Jackley

• Decision Date: 30 March 2016
• Docket Number: No. 27485.,27485.
• Citation: 878 N.W.2d 90
• Parties: Erin AGETON, Appellant, v. Marty J. JACKLEY, in his capacity as South Dakota Attorney General, Appellee.
• Court: South Dakota Supreme Court

878 N.W.2d 90

Erin AGETON, Appellant,

v.Marty J. JACKLEY, in his capacity as South Dakota Attorney General, Appellee.

No. 27485.

Supreme Court of South Dakota.

Argued Feb. 16, 2016.

Decided March 30, 2016.

Alan T. Simpson, Edward D. Greim, Graves Garrett, LLC, Kansas City, Missouri, and Rebecca L. Mann, Sara Frankenstein, Gunderson, Palmer, Nelson & Ashmore, LLP, Rapid City, South Dakota, Attorneys for appellant.

Marty J. Jackley, Attorney General, Patricia Archer, Steven R. Blair, Assistant Attorneys General, Pierre, South Dakota, Attorneys for appellee.

WILBUR

, Justice.

[¶ 1.] In this writ of certiorari action, the applicant asserted that the Attorney General failed to prepare an adequate ballot explanation under SDCL 12–13–25.1

. The ballot explanation related to a proposed measure to regulate the maximum finance charge certain lenders can impose on certain loans. The applicant, an opponent to the proposed measure, alleged that the Attorney General's explanation does not educate the voters that the purpose and effect of the measure is to ban short-term lending in South Dakota. After a hearing, the circuit court issued an order denying the application for a writ. The applicant appeals. We affirm.

Background

[¶ 2.] Then–State Representative Steve Hickey sponsored an initiated measure to be certified for the November 2016 general election. If adopted, the measure would impose a maximum finance charge against certain lenders for specific types of loans. Before a petition for an initiated measure can be circulated for signatures, the sponsor of the measure must submit a final version to the South Dakota Attorney General. SDCL 12–13–25.1

. On April 1, 2015, Representative Hickey submitted a copy of the final version to Attorney General Marty Jackley.

[¶ 3.] Under SDCL 12–13–25.1

, Attorney General Jackley must prepare a title and explanation related to the measure. "The title shall be a concise statement of the subject of the proposed initiative[.]" Id. "The explanation shall be an objective, clear, and simple summary to educate voters of the purpose and effect of the proposed initiated measure[.]" Id. The Attorney General must also "include a description of the legal consequences of the proposed ... measure[.]" Id. "The explanation may not exceed two hundred words in length."

[¶ 4.] In regard to this measure, Attorney General Jackley drafted the following title and explanation:

Title: An initiated measure to set a maximum finance charge for certain licensed money lenders.

Explanation:

The initiated measure prohibits certain State-licensed money lenders from making a loan that imposes total interest, fees and charges at an annual percentage rate greater than 36%. The measure also prohibits these money lenders from evading this rate limitation by indirect means. A violation of this measure is a misdemeanor crime. In addition, a loan made in violation of this measure is void, and any principle, fee, interest, or charge is uncollectable.

The measure's prohibitions apply to all money lenders licensed under South Dakota Codified Laws chapter 54–4. These licensed lenders make commercial and personal loans, including installment, automobile, short-term consumer, payday, and title loans. The measure does not apply to state and national banks, bank holding companies, other federally insured financial institutions, and state chartered trust companies. The measure also does not apply to businesses that provide financing for goods and services they sell.

On May 27, 2015, Attorney General Jackley filed the title and explanation with the Secretary of State and submitted a copy to the sponsor. SDCL 12–13–25.1

.

[¶ 5.] On June 5, 2015, Erin Ageton, an opponent of the measure, filed an application for a writ of certiorari in circuit court to challenge the Attorney General's explanation. She asserted that the Attorney General did not comply with his legal duties under SDCL 12–13–25.1

because his explanation failed to educate the voters about the measure's true purpose and effect and failed to describe the legal consequences.

[¶ 6.] The process governing a challenge to a ballot explanation is expedited under SDCL 12–13–9.2

. "The action takes precedence over other cases in circuit court," and the circuit court must issue a final order "within fifteen days of the commencement of the action." Id. On June 15, the court held a hearing. Ageton asked the circuit court to take judicial notice of the documents attached to her application for a writ. Those documents included: (1) a letter from Attorney General Jackley to Secretary of State Shantel Krebs dated May 27, 2015, (2) a letter written by an attorney to Attorney General Jackley in 2013, related to a similar initiated measure, (3) a 2011 University of Washington scholarly article related to the effects of a price cap on payday lenders, (4) a fiscal analysis related to a proposed measure in Missouri that set a 36% cap on certain loans, (5) a 2009 FDIC nationwide survey related to banks' efforts to serve the unbanked and underbanked, and (6) a 2009 study from George Washington University School of Business analyzing consumers' use of payday loans. Counsel for the Attorney General objected because Ageton's documents were not part of the "certified record" submitted by the Attorney General under SDCL 21–31–4. The court expanded the record to include the first two exhibits—the letters—but took under advisement whether to consider the other documents. The court then invited counsel to present oral arguments.

[¶ 7.] Ageton argued that, as written, the explanation is mere tautology. She claimed that the explanation does not differentiate purpose from effect: the purpose of the measure is to cap the finance charge on certain loans by certain lenders at 36% and the effect is that certain lenders will be subject to a 36% cap for finance charges on certain loans. She alleged that the true purpose and effect of the measure is to ban short-term lending in South Dakota because of the "general knowledge" that short-term lending cannot exist under a 36% cap.

[¶ 8.] Counsel for the Attorney General responded that Ageton's view of the true purpose and effect "could very well be considered advocacy[.]" Counsel argued that "this is not intended to be the proceeding to litigate whether or not payday lenders are going to be put out of business, and whether or not the 36–percent cap will result in that.... As much as counsel and the applicant would like to argue that it is, I think it's fair to say that it's not certain." Counsel also noted that whether the Attorney General "woulda-shoulda-coulda" written the explanation differently is not the standard. In counsel's view, the Attorney General complied with SDCL 12–13–25.1

.

[¶ 9.] On June 18, 2015, the circuit court issued a memorandum decision. The court declined to take judicial notice of the articles attached to Ageton's affidavit in support of her application for a writ. It ruled that Ageton's documents "do not state facts that are ‘generally known’ or ‘capable of accurate and ready determination by sources whose accuracy cannot be reasonably questioned’ as is required before a court can take judicial notice." It further ruled that the documents were inadmissible because "certiorari review is limited to considering the record of the proceedings before the officer," which evidence "is pertinent to his decision and the court may not consider matters outside that record."

[¶ 10.] The court then addressed whether the Attorney General complied with SDCL 12–13–25.1

. It noted that the Legislature recently amended SDCL 12–13–25.1. Prior to its amendment, the statute did not specifically require that the explanation educate the voters. The circuit court reviewed Attorney General Jackley's explanation in light of the statutory amendment and this Court's past cases. It found that the Attorney General stated the purpose of the measure. "The explanation educates the voters that while some money lenders are subject to this rate cap, not all money lenders will be subject to this change in law." "The effect or consequence of the initiated measure is that these money lenders licensed under SDCL Ch. 54–4 will be subject to this maximum rate cap, which would be a departure from current state law." In the court's view, the explanation "summarizes the legal consequences if a loan is made in violation of the initiated measure." The court held, therefore, that Attorney General Jackley did not "exceed his statutory authorization under SDCL 12–13–25.1" and "did not abuse his discretion in his drafting of the explanation of the initiated measure to set a maximum finance charge for certain licensed money lenders."

[¶ 11.] Ageton appeals, asserting the following issues for our review:

1. Whether the circuit court erred by limiting the record and determining that the circuit court may not consider facts outside the record.

2. Whether the Attorney General abused his discretion in failing to consider the information he had notice of regarding the proposed initiated measure.

3. Whether the Attorney General's ballot explanation educates voters about the initiated measure's "purpose," "effect," and "legal consequences" pursuant to SDCL 12–13–25.1

.

Standard of Review

[¶ 12.] Ageton instituted this action challenging the Attorney General's ballot explanation by filing an application for a writ of certiorari. It is well settled that our scope of review of certiorari proceedings is limited—we examine only whether the officer had jurisdiction and whether the officer regularly pursued the authority conferred upon him. SDCL 21–31–1

; See Cole v. Bd. of Adjustment of the City of Huron, 1999 S.D. 54, ¶ 4, 592 N.W.2d 175, 176. When the officer has jurisdiction, the officer's decision will be sustained unless he "did some act forbidden by law or neglected to do some act required by law." Peters v. Spearfish ETJ Planning Comm'n, 1997 S.D. 105, ¶ 6, 567 N.W.2d 880, 883 (quoting Save Centennial Valley Ass'n, Inc. v. Schultz, 284...