Comm. for Justice v. Ariz. Sec'y of State's Office

• Decision Date: 07 August 2014
• Docket Number: No. 1 CA–CV 13–0037.,1 CA–CV 13–0037.
• Citation: 235 Ariz. 347,332 P.3d 94
• Parties: COMMITTEE FOR JUSTICE & FAIRNESS (CJF), a non-profit organization, Plaintiff/Appellee, v. ARIZONA SECRETARY OF STATE'S OFFICE, a governmental entity; Ken Bennett, in his official capacity as Secretary of State; Amy Chan, in her official capacity as State Elections Director for the Secretary of State; William G. Montgomery, Maricopa County Attorney, in his official capacity; Maricopa County Attorney's Office, a governmental entity, Defendants/Appellants.
• Court: Arizona Court of Appeals

235 Ariz. 347

332 P.3d 94

COMMITTEE FOR JUSTICE & FAIRNESS (CJF), a non-profit organization, Plaintiff/Appellee,

v.ARIZONA SECRETARY OF STATE'S OFFICE, a governmental entity; Ken Bennett, in his official capacity as Secretary of State; Amy Chan, in her official capacity as State Elections Director for the Secretary of State; William G. Montgomery, Maricopa County Attorney, in his official capacity; Maricopa County Attorney's Office, a governmental entity, Defendants/Appellants.

No. 1 CA–CV 13–0037.

Court of Appeals of Arizona, Division 1.

Aug. 7, 2014.

Polsinelli, P.C., By Marty Harper, Thomas K. Irvine, Phoenix, for Plaintiff/Appellee.

Maricopa County Attorney's Office, By M. Colleen Connor, Bruce P. White, Phoenix, for Defendants/Appellants.

Ballard Spahr, L.L.P., By Joseph A. Kanefield, Brunn W. Roysden III, Phoenix, for Amicus Curiae Citizens Clean Elections Commission.

Scharf–Norton Center for Constitutional Litigation, By Nicholas C. Dranias, Phoenix, for Amicus Curiae Goldwater Institute.

Judge LAWRENCE F. WINTHROP delivered the opinion of the Court, in which Presiding Judge PATRICIA A. OROZCO and Judge KENTON D. JONES joined.

OPINION

WINTHROP, Judge.

¶ 1 The Committee for Justice and Fairness (“CJF”) is a national political organization that operates primarily for the purpose of influencing state and local elections. In 2010, CJF financed the creation and dissemination of an advertisement broadcast on a Phoenix-area television station immediately before the general election. The ad attacked the record of one of the two candidates for Attorney General, Tom Horne. After learning CJF had failed to follow Arizona's registration and disclosure requirements applicable to political committees that raise and spend money to influence the outcome of an election in Arizona, see generallyAriz.Rev.Stat. (“A.R.S.”) §§ 16–901 to –925,¹ the Maricopa County Attorney's Office (“MCAO”) issued an order pursuant to § 16–924,² requiring CJF to register as a political committee and comply with Arizona's campaign finance reporting and disclosure laws.

¶ 2 After an Administrative Law Judge (“ALJ”) recommended MCAO's order be upheld, the Maricopa County Attorney issued a Final Decision ordering CJF to register as a political committee and comply with the applicable campaign reporting and disclosure requirements. The superior court reversed and vacated the recommended order and Final Decision after concluding (1) the ad was not subject to Arizona's disclosure requirements because it was merely issue-oriented speech rather than express advocacy, and (2) the disclosure statutes at issue are unconstitutional.

¶ 3 In this opinion, we conclude CJF's advertisement qualifies as “express advocacy” as defined in A.R.S. § 16–901.01(A)(2)(a), the advertisement qualifies as an independent expenditure designed to influence the 2010 Attorney General election, and CJF is a political committee that must comply with Arizona's political committee registration and disclosure requirements. We also conclude the superior court erred in finding the applicable statutes unconstitutional. Accordingly, we vacate the portion of the superior court's judgment holding unconstitutional A.R.S. § 16–901.01(A)(1) and the now-repealed subpart (b) of § 16–901.01(A)(2), and reverse the remainder of the court's judgment.

FACTS AND PROCEDURAL HISTORY

¶ 4 In 2010, shortly before the November general election, CJF caused to be broadcast on Phoenix area Channel 12 a television advertisement regarding Tom Horne, one of the two candidates for Attorney General. At the time, Horne was still the Superintendent for Public Instruction. The advertisement claimed that (1) when Horne was a state legislator, he had “voted against tougher penalties for statutory rape,” ³ and (2) when Horne was on the Arizona Board of Education, he used his vote to allow “back in the classroom” a teacher who had been caught by students “looking at child pornography on a school computer.” ⁴ The advertisement urged viewers to “[t]ell Superintendent Horne to protect children, not people who harm them,” and displayed photographs of Horne and his office telephone number as Superintendent of Public Instruction.

¶ 5 On October 21, 2010, Home filed suit in Maricopa County Superior Court, seeking a temporary restraining order (“TRO”) to enjoin CJF and local television stations from airing the advertisement. Based on Pacion v. Thomas, 225 Ariz. 168, 236 P.3d 395 (2010), and the exclusive remedy set forth in A.R.S. §§ 16–912(E) and 16–924, the superior court denied Horne's application for a TRO. See Horne v. Committee for Justice & Fairness, Maricopa County Cause No. CV 2010–053307 (order dated Oct. 27, 2010).

¶ 6 Meanwhile, on October 22, 2010, Horne's election committee filed with the Arizona Secretary of State a complaint alleging CJF had engaged in express advocacy and was thus subject to the requirements of A.R.S. § 16–901 et seq. The complaint alleged that, before broadcasting the advertisement, CJF did not register as a political committee but had made expenditures to influence the outcome of the election for Attorney General without complying with Arizona's campaign finance reporting and disclosure requirements.

¶ 7 On October 25, 2010, the Arizona Secretary of State issued a Reasonable Cause Notice, stating there was reasonable cause to believe CJF had violated A.R.S. §§ 16–902 and 16–912. The Arizona Secretary of State notified the Attorney General of that finding. Horne was ultimately elected Attorney General, and to avoid any conflict of interest, the Arizona Attorney General's Office requested by letter dated January 26, 2011, that MCAO assume enforcement and litigation of the matter.

¶ 8 On May 23, 2011, MCAO issued an Order Requiring Compliance to CJF pursuant to A.R.S. § 16–924. The order required CJF to do the following: (1) register as a political committee with the Arizona Secretary of State, (2) notify the Secretary of State of CJF's designated financial institutions, (3) file the required campaign finance reports, (4) provide financial records reflecting the cost of producing the advertisements, (5) comply with the requirements of Arizona's campaign finance laws, and (6) comply with the request for financial records. As permitted in A.R.S. § 16–924(A), CJF requested a hearing, and MCAO forwarded that appeal to the Office of Administrative Hearings for a formal hearing.

¶ 9 On August 31, 2011, the ALJ held an administrative hearing, and on September 23, he issued a Decision, supported by his findings of fact and conclusions of law. The ALJ determined in part that (1) CJF had made expenditures that expressly advocated against the election of Horne, (2) CJF is a political committee as defined by A.R.S. § 16–901(19), (3) CJF violated A.R.S. § 16–902.01(A) by failing to register as a political committee, (4) CJF was required to file campaign finance reports pursuant to A.R.S. §§ 16–913, –915, and –918, (5) CJF's failure to do so violated A.R.S. § 16–913, and (6) CJF had violated A.R.S. § 16–904(J) by failing to respond to MCAO's request for financial records reflecting the cost for the production of the television advertisement. The ALJ's Decision recommended MCAO's May 23, 2011 Order Requiring Compliance be affirmed and upheld, and CJF be ordered to register as a political committee and comply with the applicable campaign reporting and disclosure requirements. On October 17, 2011, the Maricopa County Attorney issued a Final Decision accepting and adopting the ALJ's findings of fact, conclusions of law, and recommended order.

¶ 10 CJF filed a complaint in the Maricopa County Superior Court seeking judicial review of the Maricopa County Attorney's October 17 Final Decision accepting and adopting the ALJ's September 23 Decision. SeeA.R.S. §§ 12–124(A), –904(B), –905(A), 16–924(C). After briefing by the parties and oral argument, the superior court took the matter under advisement.

¶ 11 In a minute entry filed October 11, 2012, the superior court reversed and vacated the recommended order of the ALJ and the Final Decision of the Maricopa County Attorney. The superior court concluded (1) the advertisement “was issue-oriented speech and not ‘express advocacy,’ ” (and thus CJF was not required to register or file financial reports), and (2) “A.R.S. §§ 16–901, –901.01, –902.01, –913, and related statutes are unconstitutional.” ⁵ The court provided no analysis or explanation, other than to conclude “the authorities and arguments presented by CJF are well-taken.”

¶ 12 On November 28, 2012, the superior court entered its final judgment in favor of CJF, including an award of costs and attorneys' fees. The final judgment identified only the following provisions of Arizona's campaign finance laws as unconstitutional: (1) the portion of A.R.S. § 16–901.01(A)(1) that includes the phrase “or a campaign slogan or words that in context can have no reasonable meaning other than to advocate the election or defeat of one or more clearly identified candidates,” (2) A.R.S. § 16–901.01(A)(2)(a), and (3)A.R.S. § 16–901.01(A)(2)(b).⁶

¶ 13 The Arizona Secretary of State and MCAO filed a timely notice of appeal. We have jurisdiction pursuant to A.R.S. §§ 12–913 and 12–2101(A)(1).

ANALYSIS

¶ 14 In its opening brief, MCAO raises two issues for review: (1) whether CJF qualifies as a political committee that must comply with Arizona's political committee registration and disclosure requirements, and (2) whether Arizona's disclosure requirements are constitutional.

I. Was CJF Required To Comply With Arizona's Political Committee Registration And Disclosure Requirements ?

A. Standard of Review

¶ 15 Subsection (C) of A.R.S. § 16–924 makes the Administrative Review Act (“ARA”), seeA.R.S. §§ 12–901 to –914, applicable here. As such, we rely on cases under the ARA relating to actions by executive branch agencies. In this case, the superior court's scope of review was circumscribed by A.R.S. § 12–910(E):

The court may...