Arizona State Democratic Party v. State, 1CA-CV 02-0180.

• Decision Date: 30 September 2004
• Docket Number: No. 1CA-CV 02-0180.,1CA-CV 02-0180.
• Citation: 209 Ariz. 103,98 P.3d 214
• Parties: ARIZONA STATE DEMOCRATIC PARTY, Plaintiff-Appellant, v. STATE of Arizona, Defendant-Appellee.
• Court: Arizona Court of Appeals

98 P.3d 214

209 Ariz. 103

ARIZONA STATE DEMOCRATIC PARTY, Plaintiff-Appellant, v. STATE of Arizona, Defendant-Appellee.

No. 1CA-CV 02-0180.

Court of Appeals of Arizona, Division 1, Department A.

September 30, 2004.

Shughart Thomson Kilroy Goodwin Raup, P.C., By Kelly J. Flood, Rudolph J. Gerber, Marty Harper, Phoenix, Attorneys for Appellant.

Matthew J. Smith, Mohave County Attorney and Jeffrey D. Dollins, Deputy County Attorney, Kingman, Attorneys for Appellee.

OPINION

BARKER, Judge.

¶ 1 We address Arizona's constitutional and statutory provisions prohibiting corporations and labor unions from contributing monies for the purpose of "influencing an election." The specific question presented is whether contributions by corporations and labor unions to the Arizona Democratic Party ("the Party") to pay for the Party's operating expenses are prohibited. For the reasons that follow, we determine that these contributions are prohibited under the present Arizona statutory scheme.

I.

¶ 2 For some time prior to the November 1998 general election, the Party solicited and accepted donations from corporations and labor unions to pay its operating expenses. At that time, the Party leased space for its headquarters. In addition to rent, the Party had ordinary business expenses such as payroll, utilities, insurance, supplies, and other overhead and administrative expenses. As a result of the solicitations, the Party received donations totaling about $100,000 from corporations and labor unions to defray these expenses.¹

¶ 3 The Party maintained three separate checking accounts: an administrative account, a federal account, and a non-federal account. According to the Party, monies deposited into the federal account are used to support candidates in federal elections, which are covered by the Federal Election Campaign Act ("FECA"), 2 U.S.C.A. §§ 431-455 (West Supp.2004), and pertinent federal regulations. Monies deposited in the non-federal account are used indirectly to support the candidacy of the Party's candidates. Arizona election statutes govern those funds. The Party deposited all corporate donations into the administrative checking account and used funds from that account to pay for salaries, office expenses, supplies, taxes, rent, postage, insurance, computer repairs, and other overhead-related expenses. With two exceptions, the Party did not transfer money from its administrative account into either its federal or non-federal checking accounts. The exceptions occurred in September 1998 when the Party wrote two checks (totaling $6500) from the administrative account to the U.S. Postmaster to pay for part of the return postage costs that resulted from requests for the "vote at home application" for the election.

¶ 4 Shortly before the election, then-Attorney General Grant Woods learned that the Party was using corporate donations to pay overhead and administrative expenses. Woods' office conducted an investigation, and in January 1999, then-Attorney General Janet Napolitano referred the matter to the Mohave County Attorney.

¶ 5 After the Party and the State of Arizona were unable to negotiate a complete settlement of the matter, the State entered an administrative order directing the Party to return all contributions received from corporate sources.² The Party voluntarily agreed to stop soliciting funds from corporations and labor unions. The Party also filed a complaint to appeal the order. The Party and the State then stipulated to relevant facts and each side moved for summary judgment.

¶ 6 The trial court denied the Party's motion and granted summary judgment in the State's favor. The court entered judgment finding that the Party violated Arizona Revised Statutes ("A.R.S.") section 16-919 (Supp.2003). It ordered the Party to deposit all improperly received contributions into the Citizens Clean Election Fund. The Party then appealed from the judgment.³

II.

A.

¶ 7 The Arizona Constitution prohibits corporations from contributing money "for the purpose of influencing any election." Ariz. Const. art. 14, § 18. It provides in full as follows:

It shall be unlawful for any corporation, organized or doing business in this state, to make any contribution of money or anything of value for the purpose of influencing any election or official action.

Id. (emphasis added). The first issue presented to us is whether, as a matter of constitutional interpretation, monies given to a political party by a corporation for operating expenses fall within this constitutional prohibition. We note that the language of the Arizona Constitution does not refer to labor unions. Thus, we do not address the contributions from labor unions as a potential violation of this constitutional provision.

¶ 8 In construing the Arizona Constitution we "follow the text and the intent of the framers." Fain Land & Cattle Co. v. Hassell, 163 Ariz. 587, 595, 790 P.2d 242, 250 (1990). Our first step is to "examine the plain language of the provision." Jett v. City of Tucson, 180 Ariz. 115, 119, 882 P.2d 426, 430 (1994). "[W]hen a constitutional provision is clear on its face and is logically capable of only one interpretation," we simply follow that text. Ward v. Stevens, 86 Ariz. 222, 228, 344 P.2d 491, 495 (1959). When a constitutional provision is not clear, "we look to the context, effect, consequences and spirit of the law." State v. Superior Court (Coronado), 186 Ariz. 363, 365, 922 P.2d 927, 929 (App.1996). In particular, when faced with a constitutional phrase susceptible to multiple meanings, we look to the intent of the delegates who drafted it. Bohannan v. Corp. Comm'n, 82 Ariz. 299, 303, 313 P.2d 379, 381 (1957). "When constitutional questions have arisen, the court has availed itself of pertinent records of the Constitutional Convention for an insight into the effect intended from the provision in question." Ward, 86 Ariz. at 229, 344 P.2d at 495.

B.

¶ 9 As to the plain language of Article 14, Section 18, of the Arizona Constitution and in particular the phrase "influencing any election," we turn first to our own cases. Though we have addressed Article 14, Section 18 on two occasions, Bridegroom v. State Bar, 27 Ariz.App. 47, 48-49, 550 P.2d 1089, 1090-91 (1976); Heiner v. City of Mesa, 21 Ariz.App. 58, 62, 515 P.2d 355, 359 (1973), neither case construes the phrase "influencing any election."⁴ We have, however, recently construed a similar phrase in a statutory setting.

¶ 10 In Kromko v. City of Tucson, 202 Ariz. 499, 47 P.3d 1137 (App.2002), we were required to consider the statutory phrase "influencing the outcomes of elections." The phrase is contained within A.R.S. § 9-500.14 (Supp.2003). That statute provides that a "city or town shall not use its personnel, equipment, materials, buildings or other resources for the purpose of influencing the outcomes of elections." Id. (emphasis added). Though the direct issue in Kromko was whether a communication was for the purpose of "influencing the outcomes of elections," the court made it clear that "the statute prevents the City from using [public] funds to influence the outcome of an election." Kromko, 202 Ariz. at 503, ¶ 13, 47 P.3d at 1141 (emphasis added).

¶ 11 Kromko accepted and applied the principles set forth in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976), that communications influenced an election only when they rose to the level of "express advocacy" for a candidate or position. Kromko did not apply Buckley's precise formulation for what constituted express advocacy. Kromko, 202 Ariz. at 502-03, ¶ 10, 47 P.3d at 1140-41. Relying on subsequent authorities, the Kromko court held that communications influenced elections when the communication "`taken as a whole[,] unambiguously urges' a person to vote in a particular manner." Id. (quoting Schroeder v. Irvine City Council, 97 Cal.App.4th 174, 118 Cal.Rptr.2d 330, 339 (2002)). Applying that holding here, monies expended for express advocacy would be for the purpose of "influencing an election"; monies that were not expended for express advocacy would not fall within that term. As the monies here were for the Party's operating expenses, and not for express advocacy, the Party's position would be correct on this theory. The monies would not fall within the constitutional prohibition against "influencing any election." As we discuss in a subsequent portion of this opinion, we do not suggest that Kromko is controlling here. Infra ¶ 39. It is based on communications by a city to employees as contrasted with contributions by corporations and labor unions to a political party. But Kromko is illustrative of a definition of "influencing any election" that would exclude monies from the constitutional prohibition that were not used for the purpose of express advocacy.⁵

¶ 12 In addition to the construction of "influencing any election" based on the Buckley rationale pertaining to express advocacy, other federal authorities construe phrases like "influencing any election" in a context factually comparable to that here. FECA, passed by Congress in 1971, included several similar phrases. See 2 U.S.C.A. §§ 431(8)(A)(i) ("contribution" includes a gift made "for the purpose of influencing any election for Federal office"), 441a(a)(1)(A) & (a)(2)(A) (limiting contributions "with respect to any election for Federal office"), 441b(a) & (b)(2) (prohibiting certain contributions and expenditures "in connection with any election"), & 441e(a) (prohibiting contributions by foreign nationals "in connection with an election"). Congress did not define these phrases. Although the State argues that the phrase "influencing any election" unambiguously refers to any contribution to a political party, the Federal Elections Commission ("FEC") concluded otherwise. The FEC construed FECA, and consequently those phrases, to expressly exclude contributions to a political party for "party building" and get-out-the-vote drives. FEC...