Independence Inst. v. Gessler

• Court: U.S. District Court — District of Colorado
• Writing for the Court: PHILIP A. BRIMMER
• Citation: Independence Inst. v. Gessler, 936 F.Supp.2d 1256 (D. Colo. 2013)
• Decision Date: 29 March 2013
• Docket Number: Civil Action No. 10–cv–00609–PAB–MEH.
• Parties: The INDEPENDENCE INSTITUTE, et al., Plaintiffs, v. Scott GESSLER, in his official capacity as Colorado Secretary of State, Defendant.

936 F.Supp.2d 1256

The INDEPENDENCE INSTITUTE, et al., Plaintiffs,

v.Scott GESSLER, in his official capacity as Colorado Secretary of State, Defendant.

Civil Action No. 10–cv–00609–PAB–MEH.

United States District Court, D. Colorado.

March 29, 2013.

Held Unconstitutional

West's C.R.S.A. § 1–40–112(4).

Validity Called into Doubt

West's C.R.S.A. §§ 1–40–121, 1–40–135.

David Arthur Lane, Killmer, Lane & Newman, LLP, Denver, CO, for Plaintiffs.

Amy Christine Colony, Leeann Morrill, Matthew David Grove, Melody Mirbaba, Colorado Attorney General's Office, Denver, CO, for Defendant.

ORDER

PHILIP A. BRIMMER, District Judge.

The Court presided over a trial to the court from May 14 to May 24, 2012. The trial addressed one principal issue—whether the State of Colorado's limitation on per-signature compensation for petition circulators violates the First Amendment to the United States Constitution. The following constitute the Court's findings of fact and conclusions of law pursuant to Rule 52(a)(1) of the Federal Rules of Civil Procedure.

I. FINDINGS OF FACT

Plaintiffs are petition circulators, non-profit organizations, and petition entities involved in the initiative and referendum process in the State of Colorado. They filed this 42 U.S.C. § 1983 action challenging the constitutionality of House Bill 09–1326 (“H.B. 1326”), which amends the rules and procedures pertaining to the initiative and referendum processes. On April 26, 2012, the Court granted defendantScott Gessler's motion for summary judgment [Docket No. 327] on plaintiffs' second, third, fourth, eighth, ninth, and tenth claims for relief. Plaintiffs' sixth and seventh claims for relief were dismissed as moot and the Secretary stipulated to the entry of final judgment on plaintiffs' first claim for relief [Docket No. 339]. The trial to court addressed plaintiffs' only remaining claim—the fifth claim for relief, which challenges the constitutionality of Colorado's hybrid compensation scheme.

The hybrid compensation scheme is codified at Colo.Rev.Stat. § 1–40–112(4) and states as follows: “It shall be unlawful for any person to pay a circulator more than twenty percent of his or her compensation for circulating petitions on a per signature or petition section basis.” The statute does not restrict all compensation to circulators on a per-signature basis; however, as a practical matter, the twenty percent restriction limits per-signature compensation to bonuses or incentive payments. As a result, the statute requires that circulators receive the majority of their compensation in the form of hourly payments.

Plaintiffs claim that the hybrid scheme severely infringes their First Amendment rights to free speech because it decreases the pool of professional circulators who are necessary for any successful signature-gathering campaign. Plaintiffs also argue that the hybrid scheme increases the cost of signature-gathering efforts, making it more difficult to qualify measures for the statewide ballot. Finally, plaintiffs assert that there is no evidence that the hybrid scheme will reduce the rate or incidence of fraud in the initiative and referendum process. The Secretary responds that plaintiffs offer no proof that § 1–40–112(4) will actually reduce the number of available professional circulators or that the statute will increase the cost of signature-gathering efforts in Colorado.

The Court previously enjoined the Secretary from enforcing Colo.Rev.Stat. § 1–40–112(4), § 1–40–135, and § 1–40–121 to the extent that those sections applied to the hybrid scheme. See Docket No. 60 at 37. Evidence at the preliminary injunction hearing established that the statute would deter most professional circulators from working in Colorado and would raise the cost of qualifying a measure for statewide vote. The Court also found that the Secretary failed to establish that pay-per-signature compensation was connected to the likelihood of circulator fraud. Id. at 29–30.

The evidence and arguments presented at trial established the following:

A. The Initiative and Referendum Process

The constitution of the State of Colorado permits its citizens to place propositions on the ballot through the initiative process. Colo. Const. Art. V, § 1. Proponents of a measure have two years to qualify an issue for the ballot, but may only propose Taxpayer's Bill of Rights ¹ measures—issues pertaining to taxes—for statewide vote in odd years.

To qualify a measure, proponents must complete the statutorily mandated process as set forth in Colo.Rev.Stat. § 1–40–101 et seq. Proponents must first submit a draft of the proposed legislation to the Legislative Counsel Office for review and comment. Colo.Rev.Stat. § 1–40–105(1). Following a public hearing, the draft is submitted to the Title Board, to designates a title (the measure's title cannot mislead or confuse voters) and a submission clause (paragraph summarizing the proposed legislation). Colo.Rev.Stat. § 1–40–106. Once the petition title and the submission clause are set, proponents must provide the Secretary with a sample petition section which contains a circulator affidavit,² the ballot title, and the submission clause as approved by the Title Board. Thereafter, the Secretary must endorse a sample petition section and proponents may provide sequential copies of the petition section for circulation. Finally, proponents need to complete the circulation process in a six-month period, wherein they must collect the requisite number of valid signatures ³ to present to the Secretary for review.⁴ The signature-gathering process is the matter at issue in this case.

B. Section 1–40–112(4)'s Effect on the Cost of Signature–Gathering

1. Pay–Per–Signature vs. Hybrid Compensation

The testimony from both sides established that the effect of § 1–40–112(4) is to raise the per-signature cost to a petition entity. The cost of running signature-gathering campaigns will increase because the hybrid scheme excludes some professional circulators from working in Colorado and makes the signature-gathering process significantly less efficient. The evidence, however, did not provide an easily determinable method to quantify that increase in costs.

a. Pool of Circulators

At the preliminary injunction hearing, the Court found that petition entities ⁵ in Colorado rely on a group of itinerant professional circulators ⁶ to perform signature-gathering activities. Docket No. 60 at 7. Testimony from the preliminary injunction hearing established that itinerant professional circulators are integral to signature-gathering campaigns because they (1) are able to gather a large number of signatures in a short amount of time, (2) do not require training because they are familiar with the laws of various states, and (3) are easy to locate. Id. at 6. The testimony at trial, however, demonstrated that petition entities are not so dependent on professional circulators, but instead rely on a variety of circulators during signature-gathering campaigns. Dan Kennedy, owner of Kennedy Enterprises LLC, a petition entity in Colorado, testified that petition entities typically rely on three types of circulators: (1) low-volume but high-validity professionals ⁷ (i.e. individuals who occasionally circulate petitions for additional income); (2) medium-volume professionals (i.e. individuals who circulate on a part-time basis and produce an hourly average of 15 to 30 signatures); and (3) high-volume itinerant professionals (i.e. individuals who rely on signature-gathering campaigns for their primary income and travel between states in search of the best compensation).⁸

Jon Caldara, president of plaintiff The Independence Institute,⁹ testified that his 2010 Healthcare Choice measure would not have qualified for the statewide ballot without professional circulators. Caldara stated that, between April 2010 and August 2010, his all-volunteer signature-gathering effort yielded just 20,000 signatures.¹⁰ Only after this Court enjoined § 1–40–112(4) and he retained Kennedy Enterprises to enlist professional circulators was his signature-gathering campaign able to collect the necessary 110,676 signatures.¹¹See Ex. B–43 at 9. Kennedy estimated that 40% of the circulators working the Healthcare Choice measure were itinerant professionals. He testified that itinerant professionals are important to all signature-gathering efforts because they do not require training,¹² have a high validity rate, and consistently collect 30 signatures in an hour and sometimes can collect 100 signatures in an hour.

Kennedy Enterprises contracted with Lamm Consulting, a petition entity in Colorado, to gather signatures on the Healthcare Choice Measure. Scott Lamm, owner of Lamm Consulting, also testified that itinerant professionals were the first contacted to circulate that petition. Lamm relied on itinerant circulators because only seven and a half weeks remained to collect signatures after the Court enjoined § 1–40–112(4). In Lamm's words, the signature-gathering campaign had “no time to waste on training people or orienting people on what we needed to do.”

The evidence at trial established that any campaign performed without professional circulators would likely spend additional time and resources training new circulators. Although proponents have six months to collect signatures in Colorado, testimony revealed that, due to legal challenges, ¹³ signature-gathering efforts are never conducted within a full six-month window. Additionally, new circulators require at least a week of training before they are able to collect signatures at a consistent rate. Thus, as the time to collect signatures grows shorter, professional circulators are an increasingly important part of a successful signature-gathering campaign.¹⁴

Edward Blaszak, who owns a pay-per-hour signature gathering firm in Oregon and has run pay-per-hour campaigns in other states, testified about the importance of well-trained petition circulators. Blaszak stated that...