Mont. Consumer Finance Ass'n v. State Of Mont.

Decision Date17 August 2010
Docket NumberNos. OP 10-0366, OP 10-0371.,s. OP 10-0366, OP 10-0371.
Citation357 Mont. 237,238 P.3d 765,2010 MT 185
PartiesMONTANA CONSUMER FINANCE ASSOCIATION, Petitioner, v. STATE of Montana, by and through Steve BULLOCK, in his capacity as the Attorney General, and Linda McCulloch, in her capacity as Secretary of State, Respondent. Bernard J. Harrington, Individually, and as Treasurer for Coalition for Consumer Choice Against I-164, a Political Committee, Petitioner, v. State of Montana, by and through Steve Bullock, in his capacity as the Attorney General, and Linda McCulloch, in her capacity as Secretary of State, Respondent.
CourtMontana Supreme Court

OPINION TEXT STARTS HERE

OPINION AND ORDER

¶ 1 Petitioner Bernard J. Harrington in his individual capacity and as representative of the Coalition for Consumer Choice Against I-164 (Harrington) and Petitioner Montana Consumer Finance Association (MCFA) (Collectively Petitioners) invoke this Court's original jurisdiction to challenge the Attorney General's legal sufficiency determination and ballot statements for Initiative No. 164 (I-164). We review the following issue:

¶ 2 Do the Attorney General's ballot and fiscal statements comply with § 13-27-312, MCA?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 I-164 seeks to cap interest rates for certain loans at an annual interest rate of 36 percent. Petitioners challenge the ballot statements and Attorney General's legal sufficiency determination for I-164 under § 13-27-316, MCA. Section 13-27-316, MCA, constitutes the “exclusive remedy” for such challenges. I-164 would affect interest rates on certain lenders. Section 1 proposes a finding that some lenders are charging Montanans more than 400% interest annually. Section 2 would repeal exemptions on interest rate limits and usury provisions for deferred deposit lenders, title lenders, and consumer loan licensees. Section 3 would provide for penalties for violation of the initiative under the Consumer Protection Act. Section 4 caps the finance charge on retail installment contracts at 36% annually. Section 5 caps the interest rates for pawnbrokers. Section 6 limits fees for deferred deposit loans to 36% annually and provides for allocation of attorneys fees. Section 7 caps the interest rate at 36% for title loans. Section 8 limits interest rates to 36% for “consumer loans,” a statutory term that excludes deferred deposit, title, mortgage backed loans, and loans by “regulated lenders.” Section 9 provides that the statutory amendments would take effect on January 1, 2011.

¶ 4 The Attorney General found that the proponents' proposed ballot statement did not specify the type of loans subject to the limits and contained “potentially argumentative and misleading detail about federal legislation concerning military personnel and their families.” The Attorney General determined that the statements did not comply with the requirements of § 13-27-312, MCA, and redrafted the ballot statement. The Attorney General requested a fiscal note from the Budget Director. The fiscal note estimated a reduction in licensing and examination revenue of $189,900 per year, totaling $526,800 over the three year analysis period, and no impact to the General Fund. The Attorney General drafted the fiscal statement in accordance with the finding that there would be a fiscal impact if I-164 were to become law. Section 13-27-312(3), MCA.

¶ 5 The Attorney General's amended ballot statement reads as follows:

Statement of Purpose

Under Montana law, deferred deposit (payday) lenders may charge fees equaling one-fourth of the loan, which is the same as an annual interest rate of 300 percent for a 31 day loan or 650 percent for a 14-day loan. Title lenders may charge interest equaling one-fourth of the loan, which is the same as an annual interest rate of 300 percent for a 30 day loan. I-164 reduces the interest, fees, and charges that payday, title, and retail installment lenders may charge to an annual interest rate of 36 percent. It prohibits businesses from structuring other transactions to avoid the rate limit.

Fiscal Statement

I-164 reduces the licenses and examination fee revenue paid to the State because certain lenders may not renew their licenses.

FOR reducing the annual interest, fees, and charges payday, title, and retail installment lenders may charge on loans to 36 percent.

AGAINST reducing the annual interest, fees, and charges payday, title, and retail installment lenders may charge on loans to 36 percent.

¶ 6 The Secretary of State certified I-164 in accordance with § 13-27-308, MCA, on July 19, 2010. Petitioners filed suit under § 13-27-316, MCA. Section 13-27-316(5), MCA, endows this Court with original jurisdiction to hear challenges to ballot statements and constitutes the “exclusive remedy” for such challenges. Both Harrington and MCFA challenged the ballot statements for failure to comply with the substantive requirements of § 13-27-312, MCA. Harrington argued that the statements of purpose and implication failed to “express a true and impartial explanation of the proposed measure in plain, easily understood language.” Harrington also challenged the fiscal statement under § 5-4-205, MCA. MCFA claims that the ballot statement for I-164 does not meet the requirements of § 13-27-312(4), MCA, because it fails to specifically mention “consumer loan licensees” in the statement of purpose. MCFA contends that, due to this omission, the statement does not constitute a “true and impartial explanation of the proposed ballot issue.” Section 13-27-312(4), MCA. MCFA argues that voters would be misled and thus precluded from casting an informed ballot. Harrington requested that this Court adopt an alternative ballot statement that Harrington provided. MCFA requested that this Court overturn the Attorney General's legal sufficiency determination and, alternatively, that we strike the term “consumer loan licensee” from the text of the initiative. Nearly two weeks after filing his initial petition, Harrington filed with this Court a motion for referral to district court for development of the factual record under § 3-2-202, MCA.

JURISDICTION AND VENUE

¶ 7 This Court possesses original jurisdiction to review ballot statements for initiative measures and the Attorney General's legal sufficiency determination in actions brought pursuant to § 13-27-316, MCA. Section 13-27-316, MCA, constitutes the sole remedy for such challenges.

DISCUSSION

¶ 8 Do the Attorney General's ballot and fiscal statements comply with § 13-27-312, MCA?

¶ 9 We must address as a threshold matter Harrington's motion for referral to the district court pursuant to § 3-2-202, MCA. Harrington did not raise issues of fact in his initial petition, and no issues of fact exist to preclude this Court from deciding Harrington's petition. More importantly, § 3-2-202, MCA, does not apply to Harrington's petition. Section 3-2-202(3)(b), MCA, requires that the parties to a proceeding under Subsection (3)(a) must “certify the absence of factual issues or shall stipulate to and file any factual record necessary” to this Court's consideration of the challenge. That provision applies to the petitioner's ballot statements for initiated measures and the Attorney General's ballot statements for referred measures. Section 3-2-202(3)(a), MCA. Harrington's petition challenges the Attorney General's ballot statement for an initiated measure and therefore does not fall into either of the categories specified by § 3-2-202(a), MCA. Harrington's petition likewise does not come within the ambit of the statute as a challenge under § 13-27-316, MCA, to the Attorney General's legal sufficiency determination. The legal sufficiency determination applies only to “the statutory and constitutional requirements governing submission of the proposed issue to the electors.” Section 13-27-312(7), MCA. “Legal Sufficiency” does not encompass “consideration of the substantive legality of the issue if approved by the voters.” Id. Harrington's petition raises only substantive legal arguments concerning the legality of the ballot statements and underlying initiative. We therefore deny Harrington's motion for referral and proceed to analyze both petitioners' claims under §§ 13-27-312 and -316, MCA.

¶ 10 Ballot statements must “express the true and impartial explanation of the proposed ballot issue in plain, easily understood language and may not be arguments or written so as to create prejudice for or against the issue.” Section 13-27-312(4), MCA. We have refused to overturn the Attorney General's version of a ballot statement, provided that the statement meets the statutory requirements. Citizens Right to Recall v. State, 2006 MT 192, ¶ 10, 333 Mont. 153, 142 P.3d 764. This practice reflects the rule followed in other jurisdictions that courts “do not sit as some kind of literary editorial board.” Schulte v. Long, 687 N.W.2d 495, 498 (S.D.2004). Courts thus will not “invalidate a summary simply because they believe a better one could be written.” Burgess v. Miller, 654 P.2d 273, 276, n. 7 (Alaska 1982).

¶ 11 The Attorney General's ballot statement meets the requirements of the statute so long as it employs “ordinary plain language, explains the general purpose of the issues submitted in language that is true and impartial, and [is] not argumentative or likely to create prejudice either for or against the issue.” Stop Over Spending Mont. v. State, 2006 MT 178, ¶ 12, 333 Mont. 42, 139 P.3d 788. We review the Attorney General's ballot statements solely for compliance with § 13-27-312, MCA. Citizens Right to Recall, ¶ 13. The statute does not grant petitioners “the right to the ballot statements of their choosing.” Id.

¶ 12 The Attorney General determined that “the application of a 36% annual interest rate to consumer loans is more straightforward and, based on the public comments received, less salient than the core payday, title, and retail installment issues.” The process of producing a 100 word purpose statement that...

To continue reading

Request your trial
5 cases
  • Reichert v. State
    • United States
    • Montana Supreme Court
    • 18 Mayo 2012
    ...and after, a duly-enacted law has been challenged. Here, displaying “lack of confidence in the knowledge of the voters,” Mont. Consumer Fin. Ass'n v. State, 2010 MT 185, ¶ 24, 357 Mont. 237, 238 P.3d 765 (Morris, J., concurring), and contrary to well-established tenets of judicial review, t......
  • Thomas v. Peterson
    • United States
    • Nebraska Supreme Court
    • 10 Septiembre 2020
    ..., 263 Neb. 735, 642 N.W.2d 149 (2002) ; State v. Hess , 261 Neb. 368, 622 N.W.2d 891 (2001).18 Montana Consumer Finance Ass'n v. State , 357 Mont. 237, 243, 238 P.3d 765, 768 (2010).19 Ageton v. Jackley , 878 N.W.2d 90 (S.D. 2016).20 Id. at 96, quoting Schulte v. Long , 687 N.W.2d 495 (S.D.......
  • Montanans Against Tax Hikes v. State, OP 18-0455
    • United States
    • Montana Supreme Court
    • 15 Agosto 2018
    ...statement could have been approved, but rather whether the statement complies with § 13-27-312, MCA. Mont. Consumer Fin. Ass'n v. State , 2010 MT 185, ¶ 11, 357 Mont. 237, 238 P.3d 765 ; Citizens Right to Recall , ¶ 7.¶11 If the Attorney General’s statement captures the purpose and fiscal i......
  • Hoffman v. State
    • United States
    • Montana Supreme Court
    • 2 Abril 2014
    ...Opposed to I–166 v. State of Montana Hon. Steve Bullock, 2012 MT 168, ¶ 6, 365 Mont. 520, 285 P.3d 435; see also Mont. Consumer Fin. Ass'n v. State, 2010 MT 185, ¶ 9, 357 Mont. 237, 238 P.3d 765. Our most recent opinion on the subject determined a ballot measure to be legally deficient beca......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT