Gessler v. Cause

• Decision Date: 16 June 2014
• Docket Number: Supreme Court Case No. 12SC783
• Citation: 327 P.3d 232
• Parties: Scott GESSLER, in his official capacity as Colorado Secretary of State, Petitioner v. COLORADO COMMON CAUSE and Colorado Ethics Watch, Respondents
• Court: Colorado Supreme Court

327 P.3d 232

Scott GESSLER, in his official capacity as Colorado Secretary of State, Petitioner

v.COLORADO COMMON CAUSE and Colorado Ethics Watch, Respondents

Supreme Court Case No. 12SC783

Supreme Court of Colorado.

June 16, 2014

Held Invalid

8 Colo. Code Regs. § 1505–6:4.

Recognized as Unconstitutional

Colo. Rev. Stat. Ann. § 1-45-108.

Recognized as Unconstitutional

Colo. Const. art. 28, § 2(10)(a)(II).

Certiorari to the Colorado Court of Appeals Court of Appeals Case No. 11CA2405

Attorneys for Petitioner: John W. Suthers, Attorney General Matthew D. Grove, Assistant Attorney General Denver, Colorado

Attorneys for Respondent Colorado Common Cause: Hill & Robbins, PC Jennifer H. Hunt Nathan P. Flynn Denver, Colorado

Attorneys for Respondent Colorado Ethics Watch: Luis Toro Margaret Perl Denver, Colorado

Attorneys for Amicus Curiae Center for Competitive Politics: Allen Dickerson Alexandria, Virginia

Attorneys for Amicus Curiae Institute for Justice: William H. Mellor Arlington, Virginia

Attorneys for Amicus Curiae Citizens for Integrity: Recht Kornfeld PC Mark G. Grueskin Denver, Colorado

En Banc

CHIEF JUSTICE RICE delivered the Opinion of the Court.

¶ 1 We granted certiorari ¹ to consider the lawfulness of Secretary of State Rule 4.1, 8 Colo.Code Regs. § 1505–6:4.1 (2013). Petitioner Colorado Secretary of State Scott Gessler (“Gessler”) promulgated Rule 4.1 in response to Sampson v. Buescher, 625 F.3d 1247 (10th Cir.2010). Significantly, Rule 4.1 increases the contribution and expenditure threshold that triggers issue committee status from $200 to $5000 and exempts retrospective reporting of contributions and expenditures once issue committee status is achieved. We hold that Sampson did not invalidate either the $200 contribution and expenditure threshold under article XXVIII, section 2(10)(a)(II) of the Colorado Constitution (“article XXVIII”) or the retrospective reporting requirement under section 1–45–108(1)(a)(I), C.R.S. (2013), of the Fair Campaign Practices Act (“ section 1–45–108”). Thus, because Rule 4.1's $5000 threshold and its retrospective reporting exemption clearly conflict with these provisions, we hold Rule 4.1 unlawful and set it aside. We therefore affirm the judgment of the court of appeals because the court of appeals properly concluded that Gessler exceeded his authority in promulgating Rule 4.1. SeeColo. Common Cause v. Gessler, 2012 COA 147, ¶ 27, ––– P.3d ––––.

I. Facts and Procedural History

¶ 2 In 2010, the Tenth Circuit decided Sampson, a campaign finance case that required the Tenth Circuit to consider whether Colorado's registration and reporting requirements for issue committees ² were unconstitutional as applied to the plaintiffs' small-scale ³ issue committee. 625 F.3d at 1249, 1259–60. Employing exacting scrutiny, the Tenth Circuit held that Colorado's requirements for issue committees violated the plaintiffs' freedom of association. Id. at 1249, 1261. To support its holding, the Tenth Circuit reasoned both that the financial burden of complying with the issue committee requirements approached or exceeded the value of financial contributions made to the plaintiffs' political effort and that the governmental interest in enforcing such requirements is minimal when the amount contributed is so small. Id. Importantly, however, the Tenth Circuit explicitly declined to “draw a bright line below which a ballot-issue committee cannot be required to report contributions and expenditures.” Id.

¶ 3 Recognizing that Sampson invalidated the registration and reporting requirements for at least some issue committees in Colorado, Gessler promulgated Rule 4.1 ⁴ to clarify which issue committees were subject to the requirements. Unlike the issue committee requirements that the Tenth Circuit considered in Sampson—which establish a $200 contribution and expenditure threshold that triggers issue committee status and require both retrospective and prospective reporting of contributions and expenditures once issue committee status is achieved—the new requirements under Rule 4.1 establish a $5000 contribution and expenditure threshold and require only prospective reporting of contributions and expenditures.

¶ 4 Shortly after Rule 4.1 was adopted, Respondents Colorado Common Cause and Colorado Ethics Watch filed this action in Denver District Court pursuant to section 24–4–106, C.R.S. (2013), alleging that Gessler exceeded his rulemaking authority by promulgating Rule 4.1. Emphasizing Rule 4.1's departure from both the $200 contribution and expenditure threshold under article XXVIII and the retrospective reporting requirement under section 1–45–108, Respondents urged the district court to set aside the rule. Ruling in favor of Respondents, the district court began its analysis by noting that neither article XXVIII nor section 1–45–108 was invalidated as a result of Sampson's as-applied holding. In light of the continued viability of these provisions, the district court found that the increased contribution and expenditure threshold in Rule 4.1 “not only conflict[ed] with, but abrogate[d], existing constitutional and statutory requirements” for issue committees. Moreover, the district court observed that Rule 4.1's retrospective reporting exemption, which excludes the first $5000 from reporting “even if it is part of a multi-million dollar campaign,” did not align with Sampson's narrow as-applied holding. Emphasizing that “the Secretary is not empowered to promulgate rules that add to, modify, or conflict with constitutional provisions,” the district court concluded that Gessler's promulgation of Rule 4.1 exceeded his authority. Accordingly, the district court set aside Rule 4.1.

¶ 5 Gessler appealed, arguing that he did not exceed his authority because Rule 4.1 merely clarified the applicability of the registration and reporting requirements to issue committees in light of Sampson. According to Gessler, such clarification was necessary because the Tenth Circuit created constitutional ambiguity by declining to specify which issue committees could be subject to Colorado's registration and reporting requirements. The court of appeals disagreed, holding that Gessler exceeded his authority in promulgating Rule 4.1 and that the rule must be set aside. Common Cause, ¶ 27. In affirming the district court's order, the court of appeals noted that Rule 4.1 not only “effectively modified and contravened Colorado campaign finance law” but also “invalidate[d] the requirements imposed on issue committees far beyond the reach of Sampson.”Id. at ¶¶ 25, 27.

¶ 6 Gessler appealed again, and we granted certiorari review.

II. Standard of Review

¶ 7 The court of appeals' holding that Gessler exceeded his rulemaking authorityhinges on the court of appeals' determination that Rule 4.1 conflicts with article XXVIII and section 1–45–108. Constitutional interpretation and statutory interpretation present questions of law that we review de novo. SeeBruce v. City of Colo. Springs, 129 P.3d 988, 992 (Colo.2006); MDC Holdings, Inc. v. Town of Parker, 223 P.3d 710, 717 (Colo.2010). As part of our de novo review, “we may consider and defer to an agency's interpretation of its own enabling statute and [of] regulations the agency has promulgated.” Bd. of Cnty. Comm'rs v. Colo. Pub. Utils. Comm'n, 157 P.3d 1083, 1088 (Colo.2007). Such deference, however, is not warranted where, as here, the agency's interpretation is contrary to constitutional and statutory law. See, e.g.,Three Bells Ranch Assocs. v. Cache La Poudre Water Users Ass'n, 758 P.2d 164, 172 (Colo.1988); see also§ 24–4–106(7), C.R.S. (2013) (providing that courts “ shall hold unlawful and set aside” any agency action that is “contrary to law” (emphasis added)).

III. Analysis

¶ 8 It is undisputed that the Secretary of State is vested with authority to promulgate rules that are necessary to administer and enforce campaign finance laws. SeeColo. Const. art. XXVIII, § 9(1)(b) (providing that the Secretary of State “shall” promulgate such rules “as may be necessary to administer and enforce” any provision of article XXVIII); see also§ 1–45–111.5(1), C.R.S. (2013); § 1–1–107(2)(a), C.R.S. (2013). This authority, however, is not limitless; the Secretary of State does not have authority to promulgate rules that conflict with other provisions of law. See§ 24–4–103(4)(b)(IV), C.R.S. (2013) (providing that an agency rule can be adopted only if it “does not conflict with other provisions of law”); § 24–4–103(8)(a) (providing that “any rule ... which conflicts with a statute shall be void”); § 24–4–106(7) (requiring courts to set aside agency actions that are “contrary to law”). Thus, resolution of this case turns on whether Rule 4.1 conflicts with either the $200 contribution and expenditure threshold in article XXVIII or the retrospective reporting requirement in section 1–45–108—i.e., whether Gessler exceeded his authority in promulgating Rule 4.1. Gessler argues that he did not exceed his authority in promulgating Rule 4.1 because (1) Sampson created constitutional ambiguity by invalidating Colorado's registration and reporting requirements for at least some small-scale issue committees but declining to provide a bright-line rule, and (2) Rule 4.1 merely clarifies the line above which issue committees can be constitutionally subject to registration and reporting requirements. In contrast, Respondents contend that Gessler exceeded his authority in promulgating Rule 4.1 because (1) Sampson did not facially invalidate these provisions, and (2) Rule 4.1's $5000 threshold and its retrospective reporting exemption are in direct conflict with article XXVIII and section 1–45–108.

¶ 9 To evaluate the merits of these arguments, we start by determining whether Sampson invalidated either the $200 contribution and expenditure threshold in article XXVIII or the retrospective reporting requirement in section 1–45–108. If article XXVIII and section 1–45–108 were not facially invalidated by ...