Colo. Common Cause v. Gessler
| Citation | 410 P.3d 451 |
| Decision Date | 30 August 2012 |
| Docket Number | No. 11CA2405.,11CA2405. |
| Parties | COLORADO COMMON CAUSE and Colorado Ethics Watch, Plaintiffs–Appellees, v. Scott GESSLER, in his official capacity as Colorado Secretary of State, Defendant–Appellant. |
| Court | Court of Appeals of Colorado |
Hill & Robbins, PC, Jennifer H. Hunt, Nathan P. Flynn, Denver, Colorado, for Plaintiff–Appellee Colorado Common Cause.
Luis Toro, Margaret Perl, Denver, Colorado, for Plaintiff–Appellee Colorado Ethics Watch.
John W. Suthers, Attorney General, Maurice G. Knaizer, Deputy Attorney General, Denver, Colorado, for Defendant–Appellant.
Steven M. Simpson, William H. Mellor, Arlington, Virginia; Katelynn K. McBride, Minneapolis, Minnesota, for Amicus Curiae Institute for Justice.
Opinion by Judge LICHTENSTEIN.
¶ 1 This appeal arises out of a challenge to the Colorado Secretary of State's rulemaking authority brought by plaintiffs, Colorado Common Cause and Colorado Ethics Watch, pursuant to section 24–4–106, C.R.S.2011. The Secretary of State, Scott Gessler (the Secretary), appeals the trial court's order finding that he exceeded his rulemaking authority by promulgating Rule 4.27.1 We affirm.
¶ 2 The Secretary contends that Rule 4.27 was intended to clarify the applicability of registration and disclosure requirements to issue committees following Sampson v. Buescher, 625 F.3d 1247 (10th Cir.2010). Plaintiffs contend, however, that Rule 4.27 modifies constitutional and statutory requirements by changing the threshold for reporting expenditures and contributions by issue committees from $200 to $5,000.
¶ 3 In 2002, Colorado voters adopted the Campaign and Political Finance Amendment (the Amendment), Colo. Const. art. XXVIII. The Amendment sets forth specific disclosure requirements that apply to various categories of participants in the elections process and requires the "full and timely disclosure of campaign contributions, independent expenditures, and funding of electioneering communications, and strong enforcement of campaign finance requirements." Colo. Const. art. XXVIII, § 1.
Colo. Const. art. XXVIII, § 2 (10)(a).
¶ 5 The Amendment incorporates the registration and disclosure requirements set forth in the Fair Campaign Practices Act (the Act), § 1–45–108, C.R.S.20113 . Colo. Const. art. XXVIII, § 7. Under the Act, issue committees are required to comply with a variety of requirements, including requirements to register with the Secretary and to disclose their contributions received, expenditures made, and obligations entered into. §§ 1–45–108(1)(a)(I), (3.3), 1–45–109(1)(c), C.R.S.2011.
¶ 6 The Amendment and the Act also impose various duties on the Secretary with regard to the enforcement of campaign finance laws. Among these duties is a requirement to promulgate such rules as may be necessary to administer and enforce any provision of the Amendment or the Act. Colo. Const. art. XXVIII, § 9 (1)(b); § 1–45–111.5(1), C.R.S.2011.
¶ 7 Rule 4.27, as promulgated by the Secretary, states that "[a]n issue committee shall not be subject to any of the requirements of [the Amendment] or [the Act] until the issue committee has accepted $5,000 or more in contributions or made expenditures of $5,000 or more during an election cycle." The rule further states that "[c]ontributions received and expenditures made before reaching the $5,000 threshold are not required to be reported."
¶ 8 In November 2010, a panel of the Tenth Circuit issued its decision in Sampson. In that case, several neighbors canvassed their neighborhood and distributed flyers opposing the annexation of their neighborhood into the Town of Parker. Sampson, 625 F.3d at 1249. A supporter of the annexation filed a complaint with the Secretary alleging that the neighbors had violated campaign finance laws by failing to (1) register as an issue committee, (2) set up a separate committee bank account, and (3) comply with the statutory reporting requirements. Id. at 1251.
¶ 9 These neighbors filed suit in federal district court alleging that the campaign finance laws infringed their First Amendment rights, and thus they challenged the laws as unconstitutional, facially and as applied to them. Id. at 1253. The district court upheld the constitutionality of the requirements as applied to the neighbors. On appeal, the Tenth Circuit panel reversed and held that the Colorado registration and reporting requirements, as applied to the neighbors, unconstitutionally burdened their First Amendment right of association. It declined to address the facial challenge.
¶ 10 In its analysis, the Sampson panel subjected the registration and disclosure requirements to "exacting scrutiny" by balancing the importance of the governmental interest in the registration and disclosure requirements against the financial burden of state regulation on the neighbors' right of association. Id. at 1261 (citing Doe v. Reed, 561 U.S. 186, 195-96, 130 S.Ct. 2811, 2818, 177 L.Ed.2d 493 (2010) ; Buckley v. Valeo, 424 U.S. 1, 64, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) ). The panel recognized that in a ballot-issue campaign (as distinct from a candidate campaign), the only public interest is "informational," that is, "the public interest in knowing who is spending and receiving money to support or oppose a ballot issue." Id. at 1256. The panel also recognized that "this interest is significantly attenuated when the organization is concerned with only a single ballot issue and when the contributions and expenditures are slight." Id. at 1259. Applying this rationale, the panel determined that the public interest there was "minimal" because the expenditures in the case were "sufficiently small that they say little about the contributors' views of their financial interest in the annexation issue." Id. at 1260–61.
¶ 11 The Sampson panel weighed this "minimal" public interest against the burden of the registration and disclosure requirements in the context of the case. The panel observed that the requirements set forth in Colorado's Constitution, the Act, and the Secretary's rules are complex, and although few rules apply to issue committees, such a committee would have to sift through all of the rules to determine which ones apply. Id. at 1259–60. Noting that the failure to comply with the rules can be expensive, the panel was not surprised that the neighbors felt the need to hire counsel, whose fee was comparable to, if not in excess of, the contributions received in their anti-annexation effort. Hence, the panel concluded that the financial burden imposed on the neighbors by the registration and reporting requirements was substantial, because it approached or exceeded the value of their financial contributions to their political effort. Id. at 1261. Thus, the panel held that it was unconstitutional to impose that burden on them.
¶ 12 The panel did "not attempt to draw a bright line below which a ballot-issue committee cannot be required to report contributions and expenditures," explaining that the case was "quite unlike ones involving the expenditure of tens of millions of dollars on ballot issues presenting ‘complex policy proposals.’ " Id. (quoting Cal. Pro–Life Council, Inc. v. Getman, 328 F.3d 1088, 1105 (9th Cir.2003) ). Instead, the panel noted only that the neighbors' "contributions and expenditures [were] well below the line." Id.
¶ 13 In response to Sampson, the Secretary's predecessor commenced a rulemaking process to implement the decision, which the Secretary continued. As part of this process, the Secretary published proposed Rule 4.27. After conducting several hearings, and considering past Colorado issue committee expenditures and contributions as well as registration and disclosure requirements in other states, the Secretary adopted Rule 4.27. As stated in the Secretary's Statement of Basis, Purpose, and Specific Statutory Authority, the purpose of Rule 4.27 was to change "the contribution and expenditure threshold that triggers enforcement of the requirement for an issue committee to register and file disclosure reports, in order to resolve uncertainty about registration and disclosure requirements in light of the ruling [in Sampson ]."
¶ 14 Shortly thereafter, plaintiffs brought this lawsuit, under section 24–4–106, challenging the rule. The Secretary asserted a counterclaim seeking a declaration that, under Sampson, "the definition of issue committee is unenforceable unless and until the General Assembly enacts a statute, or the Secretary promulgates a rule, that establishes a minimum level of contributions or expenditures that triggers the formation of an issue committee." The trial court held that the Secretary had exceeded his rulemaking authority by promulgating Rule 4.27. The court also dismissed the Secretary's counterclaim. This appeal followed.
¶ 15 In an action brought under section 24–4–106, the trial court reviews the agency record to determine whether an agency action is in error. § 24–4–106(6), C.R.S.2011. A reviewing court may reverse an administrative agency's action if the court finds that the agency exceeded its constitutional or statutory authority or made an erroneous interpretation of law. Table Services, LTD v. Hickenlooper, 257 P.3d 1210, 1217–18 (Colo.App.2011) (citing McClellan v. Meyer, 900 P.2d 24, 29 (Colo.1995) ); see also § 24–4–106(7), C.R.S.2011.
¶ 16 Because this appeal concerns issues of law, we revi...
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