Colorado Educ. Ass'n v. Rutt

• Decision Date: 19 May 2008
• Docket Number: No. 06SC559.,06SC559.
• Citation: 184 P.3d 65
• Parties: COLORADO EDUCATION ASSOCIATION and Poudre Education Association, Petitioners v. Wayne RUTT and Paul Marrick, Respondents.
• Court: Colorado Supreme Court

184 P.3d 65

COLORADO EDUCATION ASSOCIATION and Poudre Education Association, Petitioners v. Wayne RUTT and Paul Marrick, Respondents.

No. 06SC559.

Supreme Court of Colorado, En Banc.

May 19, 2008.

Rehearing Denied June 2, 2008.

Isaacson Rosenbaum P.C., Mark G. Grueskin, Blain D. Myhre, Daniel C. Stiles, Denver, Colorado, Attorneys for Petitioners.

Hackstaff Gessler LLC, Scott E. Gessler, Hugh C. Thatcher, Denver, Colorado, Attorneys for Respondents.

Justice BENDER delivered the Opinion of the Court.

I. Introduction

We granted certiorari in Rutt v. Poudre Education Ass'n, 151 P.3d 585 (Colo.App. 2006), to determine whether the court of appeals correctly reversed the administrative law judge's decision to dismiss Wayne Rutt and Paul Marrick's (collectively, "Rutt") complaint against the Colorado Education Association and Poudre Education Association based on the court of appeals' conclusion that the unions coordinated campaign activities with Bob Bacon's campaign for state senate, and thus made illegal contributions to the campaign in violation of article XXVIII of the Colorado Constitution.¹

This campaign finance case implicates the First Amendment and thus involves an area of heightened political concern. We approach this case with the understanding that campaign finance regulations burden rights protected under the First Amendment, core political speech and association. Our construction and application of these regulations "must give the benefit of any doubt to protecting rather than stifling speech." Fed. Election Comm'n v. Wis. Right to Life, Inc., ___ U.S. ___, ___, 127 S.Ct. 2652, 2667, 168 L.Ed.2d 329 (2007).

The primary political activity at issue here is the organization by teachers' union staff members of two "walks" — events for union members to volunteer to distribute campaign literature in support of Bob Bacon's state senate campaign — after the union had voted to support his candidacy. Union staff members organized the walks by preparing plans, maps, and instructions for the volunteers, and by purchasing supplies such as bottled water for the walks. The unions recruited union members to participate in the walks through e-mails, phone calls, letters, fliers, and visits to school campuses. The unions also attempted to recruit members of other local education associations to participate in the walks.

Rutt argues that this activity violated article XXVIII of the Colorado Constitution, which prohibits unions from making campaign contributions and expenditures. He first claims that union payments for items like staff salaries, office supplies, and materials for volunteers were "expenditures" within the definitions of article XXVIII because they constitute "any purchase [or] payment . . . of money by any person for the purpose of expressly advocating the election . . . of a candidate." Colo. Const. art. XXVIII, § 2(8)(a).² Alternatively, he argues that these same payments were "contributions" within the definitions of article XXVIII because they constitute either "any payment made to a third party for the benefit of any candidate committee" or "anything of value given, directly or indirectly, to a candidate for the purpose of promoting the candidate's . . . election." § 2(5)(a)(II), (IV). The unions argue that their activities were protected from regulation under article XXVIII by the membership communication exception in section 2(8)(b)(III) because they constitute "payments by a membership organization for any communication solely to members and their families," and thus that they did not violate the law.

After a hearing, the administrative law judge ruled that the unions did not violate article XXVIII. The ALJ concluded that the membership communication exception applied to exempt most of the unions' challenged activities from regulation as expenditures because the unions communicated only with their members. The ALJ concluded that any contact with voters was accomplished by union member volunteers, not by the union as an entity. With regard to any activity not covered by the membership communication exception, such as phone calls and letters to members of other local education associations, the ALJ found that Rutt had not met his burden of proof to establish that an expenditure was actually made. In addition, the ALJ made findings of fact that the unions did not coordinate their activities with the candidate, that the union members voted to support the candidate, and that the services of the union staff members who organized the events were provided to the union members, not to the candidate. The court of appeals reversed the ALJ's decision, holding that the unions made an illegal contribution because they coordinated their activities with the campaign and therefore gave something of value to the campaign. Rutt, 151 P.3d at 592.

Whether payments made by the unions are prohibited as "expenditures" depends upon whether they are exempt from regulation by the membership communication exception as payments for "any communication solely to members and their families." § 2(8)(b)(III). We hold that the membership communication exception to expenditures must be construed broadly to reflect the plain language of this constitutional provision and to satisfy the demands of the First Amendment. We also hold that the membership communication exception as construed applies to most of the unions' activities in this case. To the extent that the challenged union activities are not embraced by this membership communication exception — creating postcards intended to be sent to nonmembers, and sending letters and making phone calls to nonmembers to recruit nonmembers for the walks supporting Bacon — we affirm the ALJ's factual findings that Rutt failed to prove facts that demonstrate that an expenditure was made. Accordingly, we hold that the unions did not make prohibited expenditures in violation of section 3(4)(a).

Turning to whether the unions' activities constitute regulated or prohibited contributions under section 2(5)(a)(II) and (IV), the same union conduct that forms Rutt's claim that the union violated the expenditure prohibition comprises the factual basis of his claim that the unions made prohibited contributions — primarily, the payment of staff salaries for time spent organizing the walks. We hold that the membership communication exception must be extended to and embraced within the definition of "contribution." To hold otherwise nullifies the exception. The same conduct may not be protected by the membership communication exception to expenditures, that is, treated as an exempt expenditure, yet, at the same time, be prohibited as a non-exempt contribution. Such a result would be contrary to the intent of the electorate and constitute an unreasonable and disharmonious application of article XXVIII.

As a second basis to support our construction of the article, we hold that the unions' challenged conduct does not meet the pertinent definitions of a contribution under sections 2(5)(a)(II) and (IV). We acknowledge that the facts may reasonably be viewed in two contradictory ways: one advancing the unions' argument that the salaries were paid for the benefit of the unions and their members and thus were exempt from regulation; and the other advancing Rutt's argument that the payments constituted "payments made to a third party for the benefit of" Bacon or "anything of value given . . . indirectly" to Bacon, and thus were prohibited contributions. As the Supreme Court has directed us, when the First Amendment is at issue, the tie goes to the speaker rather than to censorship and regulation. See Wis. Right to Life, 127 S.Ct. at 2669. Hence, we hold that on the facts of this case, the unions did not make any prohibited contributions in violation of section 3(4)(a).

Lastly, we conclude that it is not necessary to the resolution of this case to define "coordination" under article XXVIII as the court of appeals did, and thus we leave this issue for another day. Accordingly, we reverse the decision of the court of appeals, which held that the unions made prohibited contributions. We remand this case to the court of appeals with directions to return it to the ALJ for further proceedings on the remaining issue of attorney fees, an issue which was not raised on certiorari.

II. Facts and Proceedings Below

A. Facts

During the summer before the November 2004 general election, the members of the Colorado Education Association and the Poudre Education Association voted to support Bob Bacon in his campaign for state senate district 14. Members of the PEA are teachers in the Poudre School District. All members of the PEA are also members of the statewide CEA.

The decision to support Bacon was based on Bacon's support for public education. Bacon served as a school teacher in the Poudre School District for thirty years and was a former member and president of the PEA. After he retired from teaching he served as a member of the Poudre School District school board for eight years, and later, a new elementary school in the district was named after him. As a three-term representative in the state house Bacon had established himself, in the unions' view, as a supporter of public education and public school teachers.

After the unions voted to support Bacon, they organized activities to support his election. The primary events were two "walks" during which more than 125 union members volunteered to distribute Bacon campaign literature to homes throughout the community and to talk to potential voters. Four CEA and PEA staff members played a role in organizing these events. All four staff members worked for the unions before these events and continued to work for the unions thereafter. One staff member organized the walks. During the month of October 2004, this CEA staff member worked from the PEA office approximately four days a week, for at least part of the day.

Other staff members recruited volunteers for the...