Coloradans for a Better Future v. Campaign Integrity Watchdog

• Decision Date: 29 January 2018
• Docket Number: Supreme Court Case No. 16SC637
• Citation: 409 P.3d 350
• Parties: COLORADANS FOR A BETTER FUTURE, Petitioner, v. CAMPAIGN INTEGRITY WATCHDOG, Respondent.
• Court: Colorado Supreme Court

409 P.3d 350

COLORADANS FOR A BETTER FUTURE, Petitioner,

v.CAMPAIGN INTEGRITY WATCHDOG, Respondent.

Supreme Court Case No. 16SC637

Supreme Court of Colorado.

January 29, 2018

Attorneys for Petitioner: Paul M. Sherman, Samuel B. Gedge, Arlington, Virginia, KBN Law, LLC, Mario Nicolais, Lakewood, Colorado

Authorized Representative of Respondent: Matthew Arnold, Denver, Colorado

Attorneys for Amici Curiae Diana Brickell, Tammy Holland, and Karen Sampson: Wiley Rein LLP, Robert L. Walker, A. Louisa Brooks, Washington, DC, Beem & Isley, P.C., Clifford L. Beem, A. Mark Isley, Denver, Colorado

Attorneys for Amicus Curiae Colorado Secretary of State: Cynthia H. Coffman, Attorney General, Frederick R. Yarger, Solicitor General, Matthew D. Grove, Assistant Solicitor General, Grant T. Sullivan, Assistant Solicitor General, Denver, Colorado

Attorneys for Amicus Curiae Institute for Free Speech: Allen Dickerson, Tyler Martinez, Alexandria, Virginia

En Banc

JUSTICE HOOD delivered the Opinion of the Court.

¶1 Colorado's campaign-finance laws require political organizations like Coloradans for a Better Future to report contributions. Jonathan Anderson, a lawyer, filed a termination report for Better Future without requiring payment for his legal work, and Better Future didn't report his service as a contribution. Campaign Integrity Watchdog complained to Colorado's Secretary of State that Better Future should have done so. An Administrative Law Judge, or ALJ, dismissed Watchdog's complaint on the merits.

¶2 The court of appeals reversed in part, holding that Anderson's service counted as a "contribution" to Better Future as the word is defined in section 1-45-103(6), C.R.S. (2017), of the Fair Campaign Practices Act, §§ 1-45-101 to - 118, C.R.S. (2017) ("FCPA"). If the service was donated, the court reasoned, it was a "gift" under section 1-45-103(6)(c)(I). If it was billed but not paid, it was an undercompensated service under section 1-45-103(6)(b). Either way, the service constituted a reportable contribution under the FCPA.

¶3 We conclude that the uncompensated legal services at issue here are not "contributions" to a political organization under Colorado's campaign-finance laws. The constitutional definition of "contribution" does not address political organizations, and neither part of the FCPA definition relied on by the court of appeals covers legal services donated to political organizations. Section 1-45-103(6)(b) does not apply to political organizations, and the word "gift" in section 1-45-103(6)(c)(I) does not include gifts of service. Accordingly, the court of appeals erred in holding that Better Future was required to report Anderson's donated legal services. We reverse and remand for further proceedings consistent with this opinion.

I. Facts and Procedural History

¶4 Coloradans for a Better Future ("Better Future") engaged in the 2012 primary-election campaign as a registered political organization. In that campaign, Matthew Arnold ran for Regent at Large of the University of Colorado. Better Future purchased one radio advertisement criticizing Arnold and another supporting his opponent, Brian Davidson. Arnold lost the primary to Davidson.

¶5 Arnold, or his organization Campaign Integrity Watchdog ("Watchdog"), has since filed a series of campaign-finance complaints against Better Future; this is the fourth. Arnold filed the first two complaints individually. He then created Watchdog, of which he is the sole member. Watchdog filed the third and fourth complaints.

¶6 First, Arnold alleged campaign-finance violations based on Better Future's radio advertisements in the 2012 primary. Jonathan Anderson represented Better Future in the matter, which was litigated in 2012 and early 2013. The Administrative Law Judge ("ALJ") rejected some of the allegations, but fined Better Future $4525 for failing to properly report the advertisements as electioneering communications.

¶7 Second, Arnold complained that Better Future should have, but had not, reported Anderson's legal work on the first complaint as either an expenditure or a contribution under the Colorado FCPA. Arnold argued that if Better Future had paid Anderson, then that was a reportable expenditure; and if Better Future had not paid him, then it had received a reportable contribution of services. This time, Better Future didn't show up to defend itself and wasn't represented by counsel. The ALJ dismissed the complaint all the same, concluding that paying for an attorney is not an "expenditure." Because no evidence showed that Anderson had worked for free, the ALJ did not reach Arnold's contribution argument. The court of appeals affirmed the ALJ's decision in an unpublished decision. Arnold v. Coloradans for a Better Future, No. 14CA122 (Colo. App. Feb. 5, 2015).

¶8 Third, Watchdog complained that Better Future had failed to report a contribution when a third party had paid for costs that Better Future had owed. An ALJ determined that Better Future had, in fact, reported the contribution.

¶9 Fourth, Watchdog filed the complaint at issue here, alleging once again that Better Future had failed to report contributions or spending related to Anderson's representation of Better Future. Anderson had represented Better Future in 2012 and 2013 on the first campaign-finance claim, winding down his representation in February 2013. But he had acted on Better Future's behalf again in January 2014 when he filed a contribution and termination report for Better Future. Watchdog complained that Better Future should have reported all of Anderson's services, either as spending or contributions. Again, Better Future did not appear in administrative court.

¶10 Watchdog subpoenaed Anderson's law firm for billing records related to Better Future, and Anderson filed a motion to quash the subpoena. The ALJ denied that motion, and the firm turned over documents showing that it had invoiced Better Future about $5000 in March 2013 for Anderson's work through February 2013 on the first claim, but that it had not invoiced Better Future for Anderson's January 2014 work.

¶11 The ALJ inferred that Better Future had paid for the invoiced 2012–2013 legal services, and it rejected Watchdog's claim that Better Future was required to report that spending.¹ The ALJ also rejected the argument that Better Future should have reported Anderson's un-invoiced 2014 services as a contribution. It reasoned that the services were not provided "for the purpose of promoting" a candidate's election or nomination under the definition of "contribution" in article XXVIII, section 2(5)(a)(IV) of the Colorado Constitution.

¶12 Watchdog appealed, and the court of appeals affirmed the ALJ's determination that Better Future had not been required to report the invoiced 2012–2013 services, but it reversed the ALJ's determination that the un-invoiced 2014 services were not reportable contributions. It held that the ALJ erred by applying only the constitutional definition of "contribution," and it went on to apply the statutory definition of "contribution" in section 1-45-103(6). It explained that the un-invoiced 2014 services were a "contribution" either as undercompensated services under section 1-45-103(6)(b) or as a "gift" under section 1-45-103(6)(c)(I).

¶13 Better Future petitioned for review of the court of appeals' holding that the un-invoiced 2014 services were a contribution,² and we granted certiorari.³

II. Analysis

¶14 We begin with the standard of review and principles of interpretation. Next, we survey the meaning of "contribution" under Colorado's multi-layered campaign-finance scheme, and we determine that the statutory definition, but not the constitutional definition, applies to political organizations. Turning to the statutory definition, we consider whether a contribution under section 1-45-103(6)(b), the amount of which is to be "determined by the candidate committee," can apply to a political organization like Better Future. We conclude it cannot. Finally, we examine the term "gift" in the phrase, "Any payment, loan, pledge, gift, advance of money, or guarantee of a loan made to any political organization." § 1-45-103(6)(c)(I). We conclude that contributions under this subsection are limited to monetary aid to political organizations, and therefore the term "gift" does not include donated services.

A. Standard of Review and Principles of Interpretation

¶15 We review questions of constitutional and statutory interpretation de novo. Gessler v. Colo. Common Cause, 2014 CO 44, ¶ 7, 327 P.3d 232, 235.

¶16 In construing statutes and citizen initiatives, we seek to give effect to the General Assembly's and the electorate's intent, respectively. See Teague v. People, 2017 CO 66, ¶ 8, 395 P.3d 782, 784 (statute); People v. Lente, 2017 CO 74, ¶ 16, 406 P.3d 829, 832 (citizen initiative). We read words and phrases in context, § 2-4-101, C.R.S. (2017), according them their plain and ordinary meanings, Teague, ¶ 8, 395 P.3d at 784 ; Lente, ¶ 16, 406 P.3d at 832. If the language is clear, we apply it as written. Teague, ¶ 8, 395 P.3d at 784 ; Lente, ¶ 16, 406 P.3d at 832.

B. The Fair Campaign Practices Act, Not the Constitution, Defines "Contribution" to Political Organizations

¶17 Three primary sources provide campaign-finance law in Colorado. Article XXVIII of the Colorado Constitution, a citizen initiative, limits and requires reporting of some political contributions and spending, and it provides for private enforcement of campaign-finance law. The FCPA covers more of the same ground. Finally, the Colorado Secretary of State (the "Secretary") promulgates additional campaign-finance rules. Dep't of State, 8 Colo. Code Regs. 1505-6 (Dec. 15, 2017).

¶18 During the time at issue here, Better Future was registered with the Secretary as a political organization, and neither party disputes that status. Reporting requirements for political organizations are covered under section 1-45-108.5, C.R.S. (2017), of the FCPA. That section requires...