Rhode Island Republican Party v. Daluz

• Decision Date: 18 December 2008
• Docket Number: No. 2007-220-Appeal.,2007-220-Appeal.
• Citation: 961 A.2d 287
• Parties: The RHODE ISLAND REPUBLICAN PARTY et al. v. John A. DALUZ, in his official capacity as Chair of the State Board of Elections et al.
• Court: Rhode Island Supreme Court

961 A.2d 287

The RHODE ISLAND REPUBLICAN PARTY et al. v. John A. DALUZ, in his official capacity as Chair of the State Board of Elections et al.

No. 2007-220-Appeal.

Supreme Court of Rhode Island.

December 18, 2008.

James Bopp, Jr., Pro Hac Vice, Terre Haute, IN, Bernard A. Jackvony, Providence, Stephen Izzi, Alan Gelfuso, for Plaintiffs.

H. Reed Witherby, Pro Hac Vice, Boston, MA, Raymond H. Marcaccio, for Defendants.

Present: WILLIAMS, C.J., GOLDBERG, SUTTELL, and ROBINSON, JJ.

OPINION

Justice GOLDBERG, for the Court.

This case came before the Supreme Court on September 30, 2008, on appeal by John A. Daluz, in his official capacity as chair of the State Board of Elections (board); Frank J. Rego, in his official capacity as vice-chair of the board; Florence G. Gormley and Raymond A. Xavier, in their official capacities as commissioners of the board (collectively defendants).¹ The defendants are appealing from a Superior Court order that permanently enjoined the board from investigating alleged violations of Rhode Island's campaign finance law by the Rhode Island Republican Party (Republican Party) and the Donald L. Carcieri Campaign for Governor (campaign and collectively plaintiffs) with regard to a television advertisement that was broadcast in October 2002.²

Facts and Travel

In October 2002, the Republican Party paid for a thirty-second television advertisement that appeared on several local stations. It is this political advertisement that is the subject of this dispute.³ On October 18, 2002, William Lynch (Lynch), chairman of the Rhode Island Democratic Party (Democratic Party), submitted a letter to the board alleging that the advertisement violated Rhode Island's campaign contributions and expenditures statutes. The board met on October 21, 2002, to hear from the Democratic Party, the Republican Party, and the campaign with respect to Lynch's complaint. Both the Republican Party and the campaign agreed that the hearing should take place in an open session.

During that session, Lynch argued that the advertisement was, in fact, a commercial for the campaign and that it was paid for with approximately $250,000 from the Republican National Committee (RNC) in violation of G.L. 1956 § 17-25-10.1.⁴ The board viewed the advertisement and Lynch produced printed copies of the content of the website featured at the end of the advertisement. The website advocated support for Donald L. Carcieri (Carcieri) for Governor. When questioned by the board about who paid for the advertisement, the campaign stated that it was not paid for by the campaign and that the campaign was uncertain about the source of the money. The Republican Party then explained that it had paid for the advertisement with money that the RNC had transferred to an account of the Republican Party designated for federal money.

The Republican Party presented the board with two independent arguments for dismissing the complaint. First, it argued that Rhode Island's campaign finance restrictions would not apply to the advertisement absent coordination between the Republican Party and the campaign and that such coordination did not occur. Second, the Republican Party argued that the advertisement was exempt from Rhode Island's campaign finance restrictions because it was a general-issue advertisement for party building purposes rather than an advertisement for any particular candidate.

After hearing from the parties, the board found that the advertisement constituted express advocacy for the campaign in violation of § 17-25-10.1 and ordered the Republican Party to stop airing it.⁵ The Republican Party complied with the cease-and-desist order, stopped the advertisement, and the race for Governor continued unabated; Carcieri was elected Governor on November 5, 2002. He was reelected in 2006 for a second and final four-year term⁶ and currently is the Governor of the State of Rhode Island.

On November 5, 2002, the Republican Party filed a petition for a writ of certiorari with this Court seeking dismissal of the proceedings before the board based on federal preemption. This Court denied the petition on June 18, 2003. During the next year and a half, the board made several attempts to conduct discovery, but these efforts were unsuccessful. On April 26, 2005, more than two years after the election campaign, the board appointed attorney H. Reed Witherby as special counsel (Witherby or special counsel) to review the dispute and prepare a report. On October 7, 2005, special counsel filed a report (report) in which he analyzed the legal issues and made recommendations for further action by the board.

Witherby rejected the Republican Party's contention that the First Amendment prohibited Rhode Island's campaign finance restrictions; he also rejected the contention that the statute was preempted by federal law. Additionally, special counsel noted that a separate violation occurred when the RNC transferred the money to the Republican Party, in contravention of the statute's "restrictions on the sources (§ 17-25-10.1(j)) and/or amounts (§ 17-25-10.1(a)) of contributions that the [Republican] Party may lawfully receive for state election activity." He recommended that the board refer this campaign contribution violation to the Rhode Island Attorney General for a civil enforcement action against the Republican Party. This did not occur.

Further, in light of his conclusion "that Rhode Island may lawfully limit the amount of the [Republican] Party's expenditure on the [a]dvertisement if it was coordinated with the Carcieri [c]ampaign," special counsel recommended that the board pursue a second course of action with respect to this campaign-expenditure violation. Specifically, Witherby recommended that the board undertake a factual inquiry to determine "whether or not there was, in fact, such coordination under § 17-25-10.1(c) and a resulting violation of § 17-25-10.1(e)." On October 26, 2005, some three years after the advertisement was removed from television, the board voted to accept the report and authorized special counsel to conduct an investigation, to be concluded no later than January 31, 2006. Significantly, because of this inexplicably long delay, the period of limitations for any criminal prosecution already was at death's door. See G.L. 1956 § 12-12-17(c). We have not been provided with an explanation for the astonishingly long delay.

On November 9, 2005, three years after the election, the board issued subpoenas duces tecum to the respective Keeper of the Records for the Republican Party and for the campaign. The subpoenas sought production of documents that were related to the advertisement and that were generated during the three months preceding the 2002 election; the subpoenas had a return date of March 24, 2006.⁷ Attached to each subpoena was a copy of an Investigation Protocol developed by special counsel to provide the procedural guidelines governing the investigation.⁸ On February 7, 2006, the board heard and denied motions from the Republican Party and the campaign to quash the subpoenas and stay the investigation.

On March 8, 2006, the Republican Party and the campaign filed the present action in the Superior Court seeking declaratory and injunctive relief. The plaintiffs sought a declaration (1) that the advertisement and related transfer of money preemptively are regulated by federal law and (2) that the board's actions denied plaintiffs due process. On March 17, 2006, plaintiffs also filed motions seeking a preliminary injunction to prevent the board from proceeding with the case and a stay of further proceedings pending a judicial determination of its claims.

On March 27, 2006, the board filed its objections, and the parties appeared before the trial justice. The trial justice explained that he perceived the case to have two parts: first, whether the investigatory process violated plaintiffs' due-process rights, and, second, whether the substantive law violated plaintiffs' First Amendment rights. The trial justice first entertained the due-process argument, and he focused on whether the board's purported failure to promulgate rules governing its investigations violated due process. The Republican Party and the campaign argued that the failure of the board to adopt rules distinguishing its investigatory authority from its adjudicatory power amounted to a denial of due process. Additionally, plaintiffs argued that there were no procedural rules in place to protect their due-process rights during an investigation.

The board responded that the procedural requirements of due process vary depending on whether an administrative agency is conducting an investigation or an adjudication. According to the board, no adjudicative proceedings would take place until the investigation was completed, and then only if it was determined that a violation was committed and an adjudication was warranted. The board asserted that if it decided to commence adjudicative proceedings, full due-process protections would be afforded to the Republican Party and the campaign.

The parties also argued about the substantive requirements of the campaign finance law at issue—namely, whether a political advertisement must contain express advocacy for a particular candidate for Rhode Island law to apply to the source of the money for the advertisement. However, the trial justice declined to consider that argument in his decision.

There was no testimony presented in the Superior Court. At the conclusion of the hearing, and over the objection of the board, the trial justice announced that he would exercise his authority under Rule 65(a)(2) of the Superior Court Rules of Civil Procedure to consolidate the preliminary-injunction hearing with a trial on the merits. He issued a bench decision that afternoon.

In his decision, the trial justice permanently enjoined the board from any further investigation with respect to the advertisement. He concluded that the...