Kennedy v. Buescher

• Decision Date: 11 June 2010
• Docket Number: Civil Action No. 10-cv-00609-PAB-MEH.
• Citation: 718 F.Supp.2d 1257
• Parties: THE INDEPENDENCE INSTITUTE, Jon Caldara, Dennis Polhill, Jessica Corry, Mason Tvert, Russell Haas, Douglas Campbell, Louis Schroeder, Scott Lamm, Albie Hurst, and Daniel Kennedy, Plaintiffs, v. Bernie BUESCHER, in his official capacity as Colorado Secretary of State, Defendant.
• Court: U.S. District Court — District of Colorado

718 F.Supp.2d 1257

THE INDEPENDENCE INSTITUTE, Jon Caldara, Dennis Polhill, Jessica Corry, Mason Tvert, Russell Haas, Douglas Campbell, Louis Schroeder, Scott Lamm, Albie Hurst, and Daniel Kennedy, Plaintiffs,

v.Bernie BUESCHER, in his official capacity as Colorado Secretary of State, Defendant.

Civil Action No. 10-cv-00609-PAB-MEH.

United States District Court,D. Colorado.

June 11, 2010.

COPYRIGHT MATERIAL OMITTED.

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

Matthew David Grove, Maurice G. Knaizer, Melody Mirbaba, Monica Marie Marquez, Colorado Attorney General's Office, Denver, CO, for Defendant.

ORDER ON MOTION FOR PRELIMINARY INJUNCTION

PHILIP A. BRIMMER, District Judge.

This civil rights case comes before the Court on plaintiffs' motion for preliminary injunction [Docket No. 15]. Plaintiffs, who are involved in the ballot initiative process in Colorado, challenge several aspects of the state statutes which govern the process. The Court heard testimony presented by plaintiffs and defendant over the course of three days.

In their second amended complaint, plaintiffs assert ten claims for relief-nine alleging a violation of the First Amendment's protection of the exercise of free speech and one claim alleging both a violation of free speech and a violation of the due process clause of the Fourteenth Amendment. Plaintiffs bring their claims under 42 U.S.C. § 1983. Therefore, the Court's jurisdiction over this matter is premised upon the existence of a federal question pursuant to 28 U.S.C. § 1331.

Plaintiff standing is often at issue in cases regarding ballot initiatives and referenda. See, e.g., Initiative and Referendum Institute v. Walker, 450 F.3d 1082, 1087-97 (10th Cir.2006). “The federal courts are under an independent obligation to examine their own jurisdiction, and standing is perhaps the most important of the jurisdictional doctrines.” City of Colorado Springs v. Climax Molybdenum Co., 587 F.3d 1071, 1078-79 (10th Cir.2009) (quoting FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990)). In order to establish that he or she has standing, a plaintiff must show three things: injury in fact, causation, and redressability. In re Integra Realty Res., Inc., 262 F.3d 1089, 1101 (10th Cir.2001). For purposes of the present motion, it is sufficient to note that plaintiffs Caldara and Tvert have standing to challenge the statutes at issue by virtue of the ballot initiatives that they presently have pending and their demonstrated involvement in the initiative process.

This order addresses the claim which plaintiffs have described as the “heart of the matter,” namely, their fifth claim for relief, which challenges the constitutionality of Colorado's limitation on paying petition signature gatherers by the signature and which is most time-sensitive given the upcoming deadline for turning in those signatures to the Secretary of State's office. This order also addresses plaintiffs' eighth and ninth claims for relief, to the extent that they challenge statutory provisions which enforce the payment restriction previously described. A subsequent order will address the remainder of plaintiffs' motion for preliminary injunction.

I. FINDINGS OF FACT

In 2009, the Colorado General Assembly passed and the Governor signed into law House Bill 09-1326 (“H.B. 1326”), which amended the rules and procedures dealing with the initiative and referendum processes in Colorado. Section 10 of H.B. 1326, which was codified in the Colorado Revised Statutes at Colo.Rev.Stat. § 1-40-112(4) (2010), 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.” ¹ Violation of this portion of H.B. 1326, which went into effect on July 1, 2009, appears to be a misdemeanor punishable by up to one year in jail and a $1500 fine. See Colo.Rev.Stat. §§ 1-40-130(1)(h) and (2).

Section 2 of H.B. 1326 contains the following legislative findings:

The general assembly finds, determines, and declares that:

(I) The initiative process relies upon the truthfulness of circulators who obtain the petition signatures to qualify a ballot issue for the statewide ballot and that during the 2008 general election, the honesty of many petition circulators was at issue because of practices that included: Using third parties to circulate petition sections, even though the third parties did not sign the circulator's affidavit, were not of legal age to act as a circulator, and were paid in cash to conceal their identities; providing false names or residential addresses in the circulator's affidavits, a practice that permits circulators to evade detection by persons challenging the secretary of state's sufficiency determination; circulating petition sections without even a rudimentary understanding of the legal requirements relating to petition circulation; and obtaining the signatures of persons who purported to notarize circulator affidavits, even though such persons were not legally authorized to act as notaries or administer the required oath;

(II) The per signature compensation system used by many petition entities provides an incentive for circulators to collect as many signatures as possible, without regard for whether all petition signers are registered electors; and

(III) Many petition circulator affidavits are thus executed without regard for specific requirements of law that are designed to assist in the prevention of fraud, abuse, and mistake in the initiative process.

Colo.Rev.Stat. § 1-40-101(2)(a) (2010). The legislative findings of H.B. 1326 also include the following conclusions:

Therefore, the general assembly finds, determines, and declares that:

(I) As a result of the problems identified in paragraphs (a) and (b) of this subsection (2), one or more ballot measures appeared on the statewide ballot at the 2008 general election even though significant numbers of the underlying petition signatures were obtained in direct violation of Colorado law and the accuracy of the secretary of state's determination of sufficiency could not be fully evaluated by the district court; and

(II) For the initiative process to operate as an honest expression of the voters' reserved legislative power, it is essential that circulators truthfully verify all elements of their circulator affidavits and make themselves available to participate in challenges to the secretary of state's determination of petition sufficiency.

Colo.Rev.Stat. § 1-40-101(2)(c) (2010).

H.B. 1326 does not strictly prohibit paying petition circulators by the number of signatures that they gather, but rather limits per-signature compensation to 20% of a petition circulator's overall compensation. Colo.Rev.Stat. § 1-40-112(4) (2010). As a practical matter, however, the 20% provision requires petition proponents to pay signature gatherers on an hourly basis. Edward Agazarm, a vice president of a petition management firm with nineteen years of experience in signature gathering, testified that under H.B. 1326 the payment options are either salary or pay by the hour. Tr. 274. Michael Arno, who owns a company that qualifies initiatives for the ballot, albeit one with relatively little Colorado experience, testified that he does not think that anyone in Colorado could safely compensate on a per signature basis for fear of running over the 20% limit and thereby incurring penalties. Tr. 31. No witness with experience in signature gathering testified that the ability to pay up to 20% of a circulator's compensation on a per-signature basis would provide an advantage over a purely hourly payment scheme. In fact, when the State's expert on hourly payment, Ted Blaszak, was asked if he would use the 20% pay-per-signature provision in a Colorado ballot initiative, he did not say that he would, but rather described other incentive methods he would utilize. Tr. 137. Thus, although § 1-40-112(4) could be characterized as a hybrid provision as opposed to an outright ban on payment by signature, it nevertheless, as a practical matter, has the effect of an outright ban on payments per signature.

A. Section 1-40-112(4)'s Effect on Cost of Signature Gathering

The testimony by both sides established that the effect of H.B. 1326 is to raise the per-signature cost of a ballot initiative campaign. Michael Arno testified that his petition business has gathered 200 million signatures since 1979. Tr. 16. He has qualified approximately fifty-nine ballot measures using the pay-per-signature method and eight by the pay-per-hour method. Tr. 25. He experienced a doubling of costs using hourly compensation. Tr. 27. Edward Agazarm testified that paying by the hour costs more because that compensation model usually attracts lower quality workers with less experience in signature gathering. As a result, the petition gathering firm must train them, which adds to the cost. Also, because hourly workers are employees as opposed to independent contractors, the petition gathering firm that hires them must pay state and local employment taxes, unlike the case with pay-per-signature workers.

Petition gathering firms that compensate on a pay-per-signature basis often rely on a group of itinerant circulators numbering between 250 and 600 who, although they necessarily have other jobs during the off-cycle, are the closest thing there are to professional signature gatherers. These people can earn between $50,000 and $150,000 per year gathering signatures in different states. Tr. 18. These professional circulators are characterized by the following: they gather a large number of signatures per day, they are familiar with the laws in the various states about signature gathering and therefore do not need to be trained, and they are well known to, and can be easily contacted by, petition gathering firms. Tr. 18, 89,...