Geier v. Mo. Ethics Comm'n

• Decision Date: 24 November 2015
• Docket Number: No. SC 94951,SC 94951
• Citation: 474 S.W.3d 560
• Parties: Gerald Geier and Stop Now!, Appellants, v. Missouri Ethics Commission, et al., Respondents.
• Court: Missouri Supreme Court

474 S.W.3d 560

Gerald Geier and Stop Now!, Appellants,

v.Missouri Ethics Commission, et al., Respondents.

No. SC 94951

Supreme Court of Missouri, en banc .

Opinion issued November 24, 2015

Geier and Stop Now! were represented by Hugh A. Eastwood, an attorney in St. Louis, (314) 809–2343, and W. Bevis Schock, an attorney in St. Louis, (314) 726–2322.

The commission was represented by Solicitor General James R. Layton, Nicholas Beydler, Andrew W. Blackwell and Peggy A. Whipple of the attorney general's office in Jefferson City, (573) 751–3321.

Mary R. Russell, Judge

Gerald Geier and the political action committee of which he was the treasurer, Stop Now!, both appeal from the circuit court's grant of summary judgment in favor of the Missouri Ethics Commission in an action involving their challenge to the constitutional validity of sections 130.021.4(1), 130.021.7, and 130.021.8, RSMo Supp. 2009, as well as sections 130.046.1, RSMo Supp. 2007, and 105.961.3, RSMo 2000. This Court affirms the judgment.

I. Factual and Procedural Background

From 1991 to 2012, Gerald Geier, a certified public accountant, was the treasurer of Stop Now!, a Missouri political action committee (PAC) that engaged in issue advocacy opposing ballot initiatives that would raise taxes. He was required to register the PAC with the Missouri Ethics Commission (MEC), the agency responsible for administering Missouri's campaign finance disclosure laws. Geier completed a "Statement of Committee Organization" form, which named him as the treasurer and required him to identify the PAC's bank account. Stop Now! became inactive after 2003. The bank closed the account in 2006 after routine fees depleted the account to zero. Stop Now! did not notify the MEC of the account's closure as required by section 130.021.7, RSMo Supp. 2009.

Stop Now!, however, remained a registered PAC and, from 2004 to 2010, continued to file the quarterly disclosure reports required by sections 130.041.1, RSMo 2000 and 130.046.1, RSMo Supp. 2007 indicating that it had no money and was engaging in no activity.¹ When Stop Now! failed to file reports for the first three quarters of 2011, the MEC opened an investigation. Geier subsequently filed the overdue reports along with a "Committee Termination Statement," indicating the dissolution of Stop Now!.

The MEC filed a formal complaint against Geier and Stop Now!, alleging they violated section 130.046.1, RSMo Supp. 2007 by failing to timely file disclosure reports in 2011 and violated sections 130.021.4(1) and 130.021.7, RSMo Supp. 2009 for failing to maintain a bank account or notify the MEC of changes to the account. The MEC held a hearing on the complaint, which was closed to the public pursuant to section 105.961.3. RSMo 2000. It found probable cause that Geier and Stop Now! unknowingly violated the applicable statutes due to the delinquent disclosure reports and failure to timely file a termination statement after the bank account was closed. The MEC issued a letter to Geier stating that no further action would be taken.²

Geier appealed the MEC's probable cause determination to the Administrative Hearing Commission (AHC) on behalf of himself and Stop Now!. He admitted the statutory violations, arguing instead that the reporting statutes were unconstitutional as applied because Stop Now! had been inactive prior to commencement of the enforcement action. He also challenged the constitutional validity of section 105.961.3, RSMo 2000, the provision under which the MEC's enforcement hearing was closed to the public. Finally, Geier argued that, if violations occurred, they must be attributed to Stop Now! and not to him either personally or in his official capacity as treasurer. The AHC granted summary decision on all counts in favor of the MEC.

Geier next sought judicial review in the circuit court pursuant to section 536.110, RSMo 2000. He raised each of the claims asserted at the AHC and asserted new claims. In addition to the "as applied" constitutional challenges to the reporting statutes, he also challenged the statutes facially, seeking declaratory and injunctive relief barring enforcement of the statutes against similarly situated inactive PACs. Finally, he supplemented the constitutional challenges with claims under 42 U.S.C. §§ 1983 and 1988. The circuit court granted summary judgment in favor of the MEC. Geier appeals.³

II. Standard of Review

This is an appeal from the circuit court's review of the AHC's grant of summary decision in favor of the MEC. Typically, in an appeal from an agency-tried case this Court reviews the decision of the agency and not the circuit court. Garozzo v. Mo. Dep't. of Ins., Fin. Inst. & Prof'l Registration, Div. of Fin., 389 S.W.3d 660, 663 (Mo. banc 2013). Here, however, the circuit court was the first to rule on the bulk of Geier's constitutional claims because the AHC cannot declare a statute unconstitutional. Cf., State Tax Comm'n v. Admin. Hearing Comm'n, 641 S.W.2d 69, 75–76 (Mo. banc 1982). Additionally, Geier's §§ 1983 and 1988 claims were not presented to the AHC.

Rulings were entered in favor of the MEC before both the AHC and the circuit court. The circuit court decided only questions of law, and there were no factual disputes. Regardless of whether this Court reviews the AHC's decision or the circuit court's judgment, the standard of review is the same. The propriety of summary judgment is an issue of law entitled to de novo review. Floyd–Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215, 217 (Mo. banc 2014). Additionally, both the constitutional validity of a statute and an agency's interpretation and application of a statute are subject to de novo review. State v. Young, 362 S.W.3d 386, 390 (Mo. banc 2012) ; Algonquin Golf Club v. State Tax Comm'n, 220 S.W.3d 415, 418 (Mo. banc 2007).

III. Analysis:

A. The Reporting Statutes Are Constitutional As Applied

Before turning to Geier's constitutional challenge, a review of Missouri's Campaign Finance Disclosure laws as well as First Amendment jurisprudence in the area of campaign finance regulation is helpful. Missouri's Campaign Finance Disclosure Law defines a "PAC" as

a person or any combination of persons, who accepts contributions or makes expenditures for the primary or incidental purpose of influencing or attempting to influence the action of voters for or against the nomination or election to public office of one or more candidates or the qualification, passage or defeat of any ballot measure....

Section 130.011(7), RSMo Supp. 2007. Every committee qualifying as a PAC must have a treasurer and must maintain a bank account in Missouri. Sections 130.021.1, 130.021.4(1), RSMo Supp. 2009. Each PAC must also file a statement of organization listing contact information for the treasurer, candidate and officers (if applicable), as well as the name of its bank and account number. Section 130.021.5, RSMo Supp. 2009. The statement of organization must be amended if any of the listed information changes. Section 130.021.7, RSMo Supp. 2009. The treasurer is also required to file regular disclosure reports detailing all receipts and expenditures. Section 130.041.1, RSMo 2000. Reports must be made each calendar quarter in which contributions or expenditures exceed $500. Section 130.046.3, RSMo Supp. 2007. If contributions or expenditures are less than $500, a PAC may meet its reporting obligation by filing a one-page "Committee Statement of Limited Activity." Finally, when a PAC dissolves, a termination statement must be filed no later than 10 days after the date of dissolution. Section 130.021.8, RSMo Supp. 2009.

Geier and Stop Now! do not dispute that they violated the campaign finance laws by failing to maintain a bank account after 2006, failing to amend the statement of organization after the bank account was closed, failing to file quarterly reports for the first three quarters of 2011, and failing to timely file a termination statement. Instead, Geier argues that sections 130.021.4(1), 130.021.7, 130.021.8, RSMo Supp. 2009, and section 130.046.1, RSMo Supp. 2007 (collectively "the reporting statutes") violate the First Amendment to the United States Constitution "as applied" to Stop Now!, a PAC that had been inactive for several years prior to the MEC's enforcement action.

The First Amendment prohibits laws "abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble...." U.S. CONST. amend. I. The United States Supreme Court has held that campaign finance regulations operate in the most fundamental of First Amendment activities because they limit expression and associational rights related to the discussion of public issues and candidates for public office. Buckley v. Valeo, 424 U.S. 1, 14, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976). The Supreme Court has distinguished laws that limit speech by restricting "the amount of money a person or group can spend on political communication" from disclosure regulations which, though they burden the ability to speak, "impose no ceiling on campaign-related activities." Citizens United v. Federal Election Comm'n, 558 U.S. 310, 339, 366, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010).

Regulations that limit speech are subject to "strict scrutiny," which requires the government to prove that the regulation furthers a compelling interest and is narrowly tailored to achieve that interest. Id. at 340, 130 S.Ct. 876. Disclosure and reporting requirements, on the other hand, are subject to "exacting scrutiny." Id. at 366, 130 S.Ct. 876. "Exacting scrutiny" is a lesser standard, requiring that the government establish a "substantial relation" between the regulation and a "sufficiently important" interest. Id. The reporting statutes here are disclosure requirements, and exacting scrutiny applies. To withstand exacting scrutiny, "the strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights." John Doe No. 1 v. Reed, 561 U.S. 186, 196, 130 S.Ct....