Horne v. Polk
| Decision Date | 23 February 2016 |
| Docket Number | No. 1 CA-CV 14-0837,1 CA-CV 14-0837 |
| Parties | THOMAS HORNE, individually and THOMAS HORNE, for Attorney General Committee (SOS Filer ID 2010 00003); KATHLEEN WINN, individually, and Business Leaders for Arizona (SOS Filer ID 2010 00375), Plaintiffs/Appellants, v. SHEILA SULLIVAN POLK, Yavapai County Attorney, Defendant/Appellee. |
| Court | Arizona Court of Appeals |
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
Appeal from the Superior Court in Maricopa County
The Honorable Crane McClennen, Judge
AFFIRMED
Wilenchik & Bartness, P.C., Phoenix
By Dennis I. Wilenchik
Kimerer & Derrick P.C., Phoenix
By Michael D. Kimerer
Tiffany & Bosco, P.A., Phoenix
By Timothy A. LaSota
Counsel for Plaintiffs/Appellants
Yavapai County Attorney, Prescott
By Benjamin D. Kreutzberg
Judge Jon W. Thompson delivered the decision of the Court, in which Presiding Judge Randall M. Howe and Judge Lawrence F. Winthrop joined.
¶1 Appellants Tom Horne (Horne), Tom Horne for Attorney General Committee (THAGC), Kathleen Winn (Winn), and Business Leaders for Arizona (BLA) (collectively appellants) appeal from the trial court's order affirming the final decision and order issued in May 2014 by Appellee Special Arizona Attorney General and Yavapai County Attorney Sheila Polk (Polk) affirming her October 2013 order requiring compliance with campaign finance laws. For the following reasons, we affirm.
¶2 Horne ran for the office of Arizona Attorney General in 2010. Winn was a volunteer who worked for the Horne campaign during the primary election. Horne won the Republican primary election in August 2010. Subsequently, in October 2010, Winn decided to cease volunteering for the Horne campaign and "reactivate" BLA, her independent expenditure committee. She then began soliciting contributions for BLA.1 The sole purpose of BLA in relation to the Horne campaign was to raise money to purchase a political commercial. BLA hired Brian Murray (Murray) and Lincoln Strategy Group to produce the commercial. The commercial started running on October 25; it was a negative ad directedagainst Felecia Rotellini (Rotellini), Horne's Democratic opponent.2 Horne was elected to the office of Arizona Attorney General in 2010.
¶3 In 2013, the Arizona Secretary of State issued a letter to the Arizona Attorney General's Office stating that reasonable cause existed to believe that appellants violated state campaign finance laws during the 2010 general election. Solicitor General Robert Ellman appointed Polk as Special Arizona Attorney General to fulfill the role of Attorney General as set forth in Arizona Revised Statutes (A.R.S.) section 16-924 (2013).3
¶4 After investigation, Polk issued an order in October 2013 requiring compliance concluding that appellants violated campaign finance laws by coordinating their activities in order to advocate for the defeat of Rotellini. The order required Horne and THAGC to amend their 2010 post-general election report to include expenditures by BLA as in-kind contributions, required Winn and BLA to amend their 2010 post-general election report, and required Horne and THAGC to refund $397,378.00, the amount deemed in-kind contributions in excess of legal limits. Appellants filed a request for hearing pursuant to A.R.S. § 16-924(A). Polk set the matter for an administrative hearing, and an administrative law judge (ALJ) held a three-day hearing in February 2014.
¶5 In April 2014, the ALJ issued her decision concluding that Polk failed to prove by a preponderance of the evidence illegal coordination between appellants. The decision recommended that Polk vacate her order requiring compliance.
¶6 In May 2014, pursuant to A.R.S. § 41-1092.08 (B) (2013)4, Polk issued her final administrative decision rejecting the ALJ's recommendation and affirming her order requiring compliance. In her final decision, Polk accepted all of the ALJ's findings of fact, accepted in part the ALJ's conclusions of law, and rejected in part the ALJ's conclusions of law. She found that the evidence showed that Winn and Horne coordinated to develop BLA's commercial on October 20, 2010, and that subsequently, on October 27, Horne directed Winn to raise another $100,000 and expend it in accordance with advice Horne received from Ryan Ducharme (Ducharme), an individual who was working on a different campaign.
¶7 Appellants filed a notice of appeal for judicial review of administrative decision in May 2014. Neither party requested an evidentiary hearing. In October 2014, the trial court affirmed Polk's final administrative decision. Appellants timely appealed from the judgment, and the trial court stayed the case below pending appeal. We have jurisdiction pursuant to A.R.S. § 12-913 (2003).
¶8 Section 12-910 (E) (2003) provides that the superior court, in reviewing a final administrative decision, "shall affirm the agency action unless after reviewing the administrative record and supplementing evidence presented at the evidentiary hearing the court concludes that the action is not supported by substantial evidence, is contrary to law, is arbitrary and capricious or is an abuse of discretion." The superior court defers to the agency's factual findings and affirms them if they are supported by substantial evidence. Gaveck v. Ariz. State Bd. of Podiatry Exam'rs, 222 Ariz. 433, 436, ¶ 11, 215 P.3d 1114, 1117 (App. 2009) (citation omitted). "If an agency's decision is supported by the record, substantial evidence exists to support the decision even if the record also supports adifferent conclusion." Id. (citations omitted). "On appeal, we review de novo the superior court's judgment, reaching the same underlying issue as the superior court: whether the administrative action was not supported by substantial evidence or was illegal, arbitrary and capricious, or involved an abuse of discretion." Carlson v. Ariz. State Pers. Bd., 214 Ariz. 426, 430, ¶ 13, 153 P.3d 1055, 1059 (App. 2007). See also Eaton v. Ariz. Health Care Cost Containment Sys., 206 Ariz. 430, 432, ¶ 7, 79 P.3d 1044, 1046 (App. 2003) () (citation omitted). We review de novo any legal issues. Comm. for Justice & Fairness (CJF) v. Ariz. Sec'y of State's Office, 235 Ariz. 347, 351, ¶ 17, 332 P.3d 94, 98 (App. 2014) (review denied April 21, 2015).
¶9 Under Arizona's campaign finance laws, independent expenditures are not considered to be contributions to a candidate's campaign. A.R.S. 16-901(5)(b)(vi) (2010). A.R.S. 16-901(14) (2010) defines an "independent expenditure" as:
[A]n expenditure by a person or political committee, other than a candidate's campaign committee, that expressly advocates the election or defeat of a clearly identified candidate, that is made without cooperation or consultation with any candidate or committee or agent of the candidate and that is not made in concert with or at the request or suggestion of a candidate, or any committee or agent of the candidate. . . .
Under A.R.S. § 16-917(C) (2010), an expenditure by a political committee or person that does not meet the definition of an independent expenditure is considered to be an in-kind contribution to the candidate and a corresponding expenditure by the candidate. Federal guidelines provide further guidance as to coordinated communications and independent expenditures. See 11 C.F.R. 109.21 (2010).
¶10 Appellants argue that Polk's final decision was unsupported by substantial evidence, was arbitrary, or was an abuse of discretion pursuant to A.R.S. § 12-910 (E). We disagree. On October 20, 2010, Winn and Murray designed BLA's political commercial. The evidence showedthat Murray emailed Winn a draft script of the commercial at 10:21 a.m. that day. The draft script provided:
The Federal Government is suing Arizona. Arizona needs the right attorney general. An Attorney General who will be tough on illegal immigration. Liberal Felicia Rotellini isn't. She openly opposes SB 1070. It gets worse: taking money from labor unions and special interest groups who launched a boycott against Arizona. She sold Arizona out. Opposing SB 1070, boycotting Arizona, selling us out. If she wins Arizona loses.
Around lunchtime, Winn met with George Wilkinson (Wilkinson), BLA's treasurer, to discuss the commercial. At 2:19 p.m. on the 20th, Horne called Winn and spoke with her for about eight minutes. In the middle of this phone call, Murray emailed Winn an unedited voice-over file of the commercial. At 2:29 p.m., a few minutes after ending the phone call with Horne, Winn emailed Murray the following:
We do not like that her name is mentioned 4 times and no mention for Horne. We are doing a re-write currently and will get back to you. Too negative and takes away from the message we wanted which [sic] we want to hire the next AG to protect and defned [sic] Arizona against the federal government. I will get back to you shortly Brian sorry for the confusion except I have several masters.5
At 2:30 p.m., Murray emailed Winn telling her he would halt production of the commercial. At 2:37 p.m., Winn emailed Murray saying that she would "have it worked out by 5:30," and that:
[t]hey feel [the commercial] leaves people with [Rotellini's] name 4 X and with no mention of [Horne] it is like saying don't think about a pink elephant . . so you think about the pink elephant.
Also at 2:37, Winn called Horne again and they spoke for eleven minutes. At 2:50 p.m., two minutes after that phone call ended, Winn emailed Murray: "Okay it will be...
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