Microvote Gen. Corp. v. Ind. Election Comm'n

• Decision Date: 29 March 2010
• Docket Number: No. 49A02-0910-CV-975.,49A02-0910-CV-975.
• Citation: 924 N.E.2d 184
• Parties: MICROVOTE GENERAL CORPORATION, Appellant-Petitioner,v.INDIANA ELECTION COMMISSION, Appellee-Respondent.
• Court: Indiana Appellate Court

924 N.E.2d 184

MICROVOTE GENERAL CORPORATION, Appellant-Petitioner,v.INDIANA ELECTION COMMISSION, Appellee-Respondent.

No. 49A02-0910-CV-975.

Court of Appeals of Indiana.

March 29, 2010.

COPYRIGHT MATERIAL OMITTED

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John R. Price, Price-Owen Law, Indianapolis, IN, Attorney for Appellant.

Gregory F. Zoeller, Attorney General of Indiana, David L. Steiner, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Appellant-Petitioner, MicroVote General Corporation (MicroVote), appeals the trial court's Order denying MicroVote's Petition for Judicial Review and Petition for Stay of Enforcement of the final agency order issued by the Appellee-Respondent, the Indiana Election Commission (IEC). The IEC's final order prohibits MicroVote from marketing, leasing or selling voting systems in Indiana for eighteen months, with additional reporting requirements for three and one-half years thereafter.

We affirm.

ISSUES

MicroVote raises three issues on appeal, which we restate as follows:

(1) Whether the trial court erred in affirming the IEC's final order on res judicata grounds in light of a previous determination by the Indiana Secretary of State during an administrative hearing;

(2) Whether the trial court erred in affirming the IEC's final order on collateral estoppel grounds; and

(3) Whether the trial court erred in determining that the IEC's final order, which imposed penalties and conditions, did not exceed its statutory authority.

FACTS AND PROCEDURAL HISTORY

MicroVote is a corporation organized and doing business under the laws of the State of Indiana, with its office located in Indianapolis. The corporation supplies election equipment and electronic voting systems to forty-seven counties in Indiana. In 2005, the Indiana Legislature amended several statutes applicable to electronic voting systems and the vendors of these systems. Under the revised Indiana Code section 3-11-7.5-28(a), any previously issued approval or certification of electronic voting system issued by the IEC “expires October 1 of the year following the year in which presidential electors are elected under [I.C. § ] 3-10-2-3.” As a result of this statutory revision, MicroVote's electronic voting system became decertified on October 1, 2005.

Prior to October 1, 2005, MicroVote contacted the IEC seeking clarification of Indiana Code section 3-11-7.5-28(g) and specifically as to whether it would be permissible for MicroVote to continue servicing pre-existing customers after the decertification date. This referenced statutory provision establishes that “A vendor subject to subsection (f) may continue to provide support during the period specified in subsection (f) to a county that has acquired a voting system from the vendor after the vendor certifies that the voting system to be supported by the vendor only includes hardware, firmware, and software approved for use in Indiana.” Ind.Code § 3-11-7.5-28(g). Subsection (f) indicates that

If the commission finds that a vendor has marketed, sold, leased, installed, implemented, or permitted the use of a voting system in Indiana that:

(1) has not been certified by the commission for use in Indiana; or

(2) includes hardware, firmware, or software in a version that has not been approved for use in Indiana;

the commission may revoke the approval granted under this section and prohibit the vendor from marketing, leasing, or selling any voting system in Indiana for a specific period not to exceed (5) years.

A Co-General Counsel for the Indiana Election Division (IED) responded via email, dated September 2, 2005, stating in part:

I recognize that ‘installed, implement and permit the use’ language in these statutes could cause you concern as this language could be interpreted to mean that even if the sale was consummated prior to the expiration of certification that the subsequent delivery and installation made pursuant to that legal contract made after the system was no longer certified, could be argued as violating the statute. I do not believe that was the intent of the legislature. [I.C. § ] 3-11-7.5-28(g) indicates inexplicitly that a vendor ‘may continue to provide support’ to a voting system ‘to a county that has acquired a voting system from the vendor’ after the vendor certified that the voting system to be supported by the vendor only includes hardware, firmware, and software approved for use in Indiana.

I believe the reference to acquire is the same as ‘sale’ as used elsewhere in this section. In my view, as long as the sale was consummated while the system was certified then all further activities undertaken to implement the contract for sale and all activities to support the voting system legally sold would not result in a violation of the above statutes.

(Appellant's App. pp. 33-34). A disclaimer was inserted at the bottom of this email with an explicit warning not to rely on the legal interpretation and to seek independent legal advice.

After receiving this email and during the decertification period which commenced on October 1, 2005, MicroVote continued to conduct business in several Indiana counties, including executing contracts in nine Indiana counties for voting equipment with firmware and software versions which had been decertified, marketing its equipment throughout Indiana, public testing in forty-seven counties, and installing uncertified firmware in voting equipment in forty-seven counties.

During the same period, MicroVote also initiated the testing of its electronic voting systems, a mandatory prerequisite to apply for recertification with the IEC. Nevertheless, MicroVote was unable to immediately apply for certification as national testing authorities imposed a nation-wide moratorium on all such testing. This ban was not lifted until March 30, 2006. On April 28, 2006, the IEC approved MicroVote's application for renewal of certification of its voting software. On May 2, 2006, forty-seven Indiana counties used the then current, certified version of MicroVote's electronic voting system in the primary election held on that day.

A. Administrative Proceedings by the Office of the Secretary of State

Contrary to the IED's advice, the Indiana Secretary of State and the Office of the Secretary of State (OSS) instituted administrative proceedings against MicroVote under Cause No. 06-0001-ED, which later became Cause No. 06-0003-ED, in early April of 2006, charging MicroVote with violating I.C. §§ 3-11-17-1 through 3-11-17-3 by continuing to service its customers after its equipment became decertified. On May 21, 2007, the Administrative Law Judge (ALJ) issued an order finding that MicroVote had violated Indiana's election law on multiple occasions between October 1, 2005 to April 28, 2006. He recommended a penalty of $250,000, increased by costs of $133,562.25. Thereafter on July 20, 2007, the Indiana Secretary of State, acting as the ultimate authority in the OSS proceedings, issued a Final Order Affirming in Part and Modifying in Part Administrative Law Judge's Order Granting the Office of the Secretary of State's Motion for Summary Judgment; Denying MicroVote's Motion for Summary Judgment; and Findings of Fact and Conclusions of law.

On August 20, 2007, MicroVote filed a petition for judicial review of the Secretary of State's decision. On October 2, 2007, the OSS replied by filing a motion to dismiss MicroVote's petition on the basis of an untimely filed record. The following month, on November 27, 2007, the trial court granted the OSS's motion to dismiss. On July 16, 2008, after MicroVote pursued an appeal, the court of appeals affirmed the trial court and the supreme court denied transfer.

B. Administrative Proceedings by the IED

Before a final order was issued in the OSS proceedings, the IED filed an administrative Complaint before the IEC against MicroVote in Cause No. 2007-01. The Complaint alleged that MicroVote had violated Indiana Code section 3-11-7.5-28 by (1) illegally selling an uncertified voting system, (2) illegally marketing an uncertified voting system; (3) illegally installing an uncertified voting system; and (4) permitting the use of an uncertified voting system during a period from October 1, 2005 through April 28, 2006. On March 31, 2008, without conducting an evidentiary hearing, the ALJ entered his Order on Cross Motions for Summary Judgment which incorporated facts established in the proceedings initiated by the OSS against MicroVote. In its Order, the ALJ found the following issues conclusively established in the previous administrative proceedings

a. MicroVote violated the Indiana election Code, Ind.Code § 3-11-7.5-4(d) by marketing its uncertified election equipment in forty-seven (47) counties.

b. MicroVote violated the Indiana election Code, Ind.Code § 3-11-7.5-4(d) by selling its uncertified equipment in ten (10) counties.

c. MicroVote violated the Indiana election Code, Ind.Code § 3-11-7.5-4(d) by installing its equipment in forty-seven (47) counties.

d. MicroVote violated the Indiana election Code, Ind.Code § 3-11-7.5-4(d) by implementing its equipment in forty-seven (47) counties.

e. MicroVote violated the Indiana election Code, Ind.Code §§ 3-22-7.5-10, 3-11-7.5-13, 3-11-7.5-20, 3-11-15-13.1 and 3-11-14-239(d) by installing election systems in forty-seven (47) counties which were inadequate to conduct a general election in Indiana since they would not allow for straight-ticket voting.

(Appellant's App. pp. 11-12). The ALJ imposed a five year prohibition against marketing, leasing, or selling voting systems in Indiana pursuant to I.C. § 3-11-7.5-28(f).

MicroVote timely submitted its Objections to the ALJ's Order of March 31, 2008. Although the IEC permitted the parties to submit additional briefing, the Commission did not conduct any further evidentiary or substantive hearing before ruling on the ALJ's Order. A single meeting was held on June 10, 2008 during which the IEC discussed the ALJ's...