Leach v. Reagan

• Decision Date: 06 December 2018
• Docket Number: CV-18-0230-AP/EL (Consolidated),Nos. CV-18-0205-AP/EL,s. CV-18-0205-AP/EL
• Citation: 430 P.3d 1241
• Parties: Vince LEACH, et al., Plaintiffs/Appellants/Cross-Appellees, v. Michele REAGAN, in Her Official Capacity as Arizona Secretary of State, et al., Defendants/Appellees, and Clean Energy for a Healthy Arizona Committee, an Arizona Political Action Committee, Real Party in Interest/Appellee/Cross-Appellant. Clean Energy for a Healthy Arizona, and Alejandra Gomez, Cross-Plaintiffs/Appellees/Cross-Appellants, v. Michele Reagan, Arizona Secretary of State, et al., Cross-Defendant/Appellant/Cross-Appellee, and Javan D. Mesnard, Speaker of the House; and Steve Yarbrough, President of the Senate, Cross-Claimant Intervenors/Appellants/Cross-Appellees.
• Court: Arizona Supreme Court

430 P.3d 1241

Vince LEACH, et al., Plaintiffs/Appellants/Cross-Appellees,

v.Michele REAGAN, in Her Official Capacity as Arizona Secretary of State, et al., Defendants/Appellees,andClean Energy for a Healthy Arizona Committee, an Arizona Political Action Committee, Real Party in Interest/Appellee/Cross-Appellant.

Clean Energy for a Healthy Arizona, and Alejandra Gomez, Cross-Plaintiffs/Appellees/Cross-Appellants,

v.Michele Reagan, Arizona Secretary of State, et al., Cross-Defendant/Appellant/Cross-Appellee,andJavan D. Mesnard, Speaker of the House; and Steve Yarbrough, President of the Senate, Cross-Claimant Intervenors/Appellants/Cross-Appellees.

Nos. CV-18-0205-AP/EL

CV-18-0230-AP/EL (Consolidated)

Supreme Court of Arizona.

Filed December 6, 2018

Brett W. Johnson, Jennifer Hadley Catero, Kelly Kszywienski, Colin P. Ahler, Andrew Sniegowski, Brianna L. Long, Lindsay Short, Snell & Wilmer L.L.P., Phoenix; Michael T. Liburdi, Nicole M. Goodwin, E. Jeffrey Walsh, Greenberg Traurig LLP, Phoenix, Attorneys for Vince Leach, Glenn Hamer, Justine Robles, John Kavanagh, Jenn Daniels, Jackie Meck, Ashley Ragan, John Giles

Israel G. Torres, James E. Barton II, Saman J. Golestan, Torres Law Group, PLLC, Tempe, Attorneys for Clean Energy for a Healthy Arizona Committee, Alejandra Gomez

Kory Langhofer, Thomas Basile, Statecraft PLLC, Phoenix, Attorneys for Speaker of the House J.D. Mesnard, Senate President Steve Yarbrough

William G. Montgomery, Maricopa County Attorney, M. Colleen Connor, Talia J. Offord, Deputy County Attorneys, Maricopa County Attorney’s Office, Attorneys for Maricopa County Defendants/Appellees

Timothy Sandefur, Scharf-Norton Center for Constitutional Litigation, Phoenix, Attorneys for Amicus Curiae Goldwater Institute

Robert G. Schaffer, Lewis Roca Rothgerber Christie LLP, Phoenix, Attorneys for Amicus Curiae Arizona Chamber of Commerce & Industry and the Greater Phoenix Chamber of Commerce

Nicholas J. Enoch, Kaitlyn A. Redfield-Ortiz, Stanley Lubin, Lubin & Enoch P.C., Phoenix, Attorneys for Amicus Curiae International Brotherhood of Electrical Workers Local Union 387

JUSTICE TIMMER authored the opinion of the Court, in which CHIEF JUSTICE BALES, VICE CHIEF JUSTICE BRUTINEL, and JUSTICE PELANDER joined. CHIEF JUSTICE BALES, joined by JUSTICE PELANDER, filed a concurring opinion. JUSTICE PELANDER filed a concurring opinion. JUSTICE GOULD, joined by JUSTICES BOLICK and LOPEZ, filed an opinion concurring in part and dissenting in part.

JUSTICE TIMMER, opinion of the Court:

¶ 1 These expedited election appeals and cross-appeals raise several issues concerning a political action committee’s organizational formation, the adequacy of an initiative title, and whether the trial court erred in finding a sufficient number of valid petition signatures to support placement of the Proposition 127, Renewable Energy Standards Initiative on the November 2018 ballot. We previously issued orders affirming the trial court’s rulings that the measure qualifies for the ballot. We now explain our reasoning for those orders. (At the election, the voters rejected the measure, but that does not affect our pre-election decisions.)

BACKGROUND

¶ 2 Clean Energy for a Healthy Arizona (the "Committee") is a political action committee ("PAC") that sought placement of an initiative measure on the November 2018 general election ballot. To that end, the Committee formed on February 9, 2018, by filing a "statement of organization" with the Secretary of State ("Secretary") on a form provided by her. See A.R.S. § 16-906(A). The statement identified and provided contact information for the Committee’s chairperson, treasurer, and bank, as required by § 16-906(B). The statement did not identify a "sponsor." See § 16-906(B)(1)(b), (2) (requiring a statement of organization to list information about "any sponsor"). On receipt of the statement, the Secretary issued an identification number to the Committee, see § 16-906(D), which was then authorized to perform lawful activities, including applying for an initiative petition, see § 16-906(G).

¶ 3 On February 20, the Committee filed an application with the Secretary for an initiative measure that proposes a constitutional amendment to "require electricity providers to generate at least 50% of their annual sales of electricity from renewable energy sources" (the "Initiative"). See A.R.S. § 19-111(A) (setting forth initiative application requirements). The application was printed on a form issued by the Secretary, and it included the Committee’s identification number where indicated. Upon receipt of the application, the Secretary assigned the Initiative petition a serial number, see § 19-111(B), which enabled the Committee to gather the 225,963 valid signatures required to qualify the Initiative for the ballot.

¶ 4 Two days after the Committee filed its application with the Secretary, NextGen Climate Action ("NextGen"), a California-based entity, made the first of several substantial contributions to the Committee (totaling more than $4 million in the first and second quarters of 2018 alone) by paying FieldWorks, LLC, about $140,000 to gather petition signatures for the Initiative. NextGen’s contributions were publicly reported by the Committee in its mandatory campaign finance reports filed on April 17 and July 14. The Committee did not report receiving any contributions during the period before filing its application with the Secretary on February 20.

¶ 5 Clean Energy for a Healthy Arizona, LLC ("CEHA LLC") formed on February 27, and the Arizona Corporation Commission approved its articles of organization on March 22. According to the Committee, CEHA LLC formed to protect the Committee’s officers from personal liability. The Committee amended its statement of organization on May 14 to identify CEHA LLC as its "sponsor." See § 16-906(C) (authorizing amendments to the statement of organization). The Committee’s campaign finance reports for the first and second quarters of 2018 did not reflect any contributions from CEHA LLC. The Committee did not list NextGen as a sponsor in the amended statement of organization.

¶ 6 FieldWorks hired, registered, and paid more than 1500 circulators to collect signatures supporting placement of the Initiative on the ballot. On July 5, the Committee filed petition sheets containing 480,707 signatures with the Secretary. The Secretary reviewed the sheets for statutory compliance pursuant to A.R.S. § 19-121.01(A) and determined that 454,451 signatures were eligible for verification. She then randomly selected a five percent sample (22,722 signatures) for verification by county recorders for the counties in which the signatories claimed to be qualified electors. See § 19-121.01(B).

¶ 7 Plaintiffs are qualified electors. On July 19, before completion of the signature verification process, they filed a complaint in the trial court against the Secretary, the Committee, all county recorders, and all members of county boards of supervisors, challenging the petition signatures on several bases and seeking to enjoin placement of the Initiative on the ballot. In an interlocutory judgment entered pursuant to Arizona Rule of Civil Procedure 54(b), the trial court dismissed Plaintiffs’ claim alleging deficiencies in the Committee’s statement of organization. The court also dismissed the claims against the county recorders and the board members as unripe. In addition, the court rejected the Committee’s argument that Plaintiffs can only challenge petition signatures within the random five percent sample submitted to the county recorders for verification. On expedited appeal and cross-appeal, in an order filed August 20 (with an opinion to follow), this Court affirmed the trial court’s interlocutory judgment.

¶ 8 Meanwhile, the county recorders completed their signature review of the five percent sample. After disqualifying some signatures and validating others, they established a 72.37% validity rate. The Secretary applied that rate to the 454,451 signatures eligible for verification, see A.R.S. § 19-121.04(A)(3), and concluded that "the estimated total number of valid signatures is 328,908, which exceeds the 225,963 minimum" number of required signatures.

¶ 9 Plaintiffs filed new complaints against eleven county recorders, alleging they improperly accepted invalid signatures during their reviews. The trial court consolidated these cases with the initial case. Although Plaintiffs raised several challenges, the core issue before the court was whether the Committee had obtained the 225,963 valid signatures required to place the Initiative on the ballot.

¶ 10 A five-day trial of extraordinary logistical complexity began on August 20. Approximately 5500 exhibits were admitted in evidence, some of which were thousands of pages in length, and more than fifty witnesses testified. Plaintiffs subpoenaed more than 1180 witnesses, most of whom were petition circulators. The trial court struck petition signatures gathered by more than 300 circulators because they either did not comply with their subpoenas, see A.R.S. § 19-118(C), or violated statutory requirements when gathering signatures, see A.R.S. §§ 19-112(A), -114(A). Ultimately, the court found that the Committee had gathered a sufficient number of valid signatures to place the Initiative on the ballot and therefore denied Plaintiffs’ request for injunctive relief. On expedited appeal, we affirmed the trial court’s judgment in an order filed August 29 (again, with an opinion to follow).

¶ 11 This Court has jurisdiction over this expedited election matter under article 6, section 5 of the Arizona Constitution and A.R.S. §§ 19-118, -122. As noted above, we previously issued orders affirming both the trial court’s initial Rule 54(b) judgment and its final judgment with opinions to follow. We have consolidated the appeals and provide a single opinion to explain our reasoning.

DISCUSSION

I. The defective statement of organization claim

¶ 12 Plaintiffs argue the...