Rutt v. Poudre Educ. Ass'n.

• Decision Date: 20 July 2006
• Docket Number: No. 05CA1718.,05CA1718.
• Citation: 151 P.3d 585
• Parties: Wayne RUTT and Paul Marrick, Petitioners-Appellants and Cross-Appellees, v. POUDRE EDUCATION ASSOCIATION and Colorado Education Association, Respondents-Appellees and Cross-Appellants, and Division of Administrative Hearings, Appellee.
• Court: Colorado Court of Appeals

151 P.3d 585

Wayne RUTT and Paul Marrick, Petitioners-Appellants and Cross-Appellees, v. POUDRE EDUCATION ASSOCIATION and Colorado Education Association, Respondents-Appellees and Cross-Appellants, and Division of Administrative Hearings, Appellee.

No. 05CA1718.

Colorado Court of Appeals, Div. A.

July 20, 2006.

Hackstaff Gessler, LLC, Scott E. Gessler, Denver, Colorado, for Petitioners-Appellants and Cross-Appellees.

Issacson Rosenbaum, P.C., Mark G. Grueskin, Blain D. Myhre, Daniel C. Stiles, Denver, Colorado, for Respondents-Appellees and Cross-Appellants.

Opinion by Judge ROTHENBERG.

This administrative appeal addresses whether respondents, Colorado Education Association (the CEA) and Poudre Education Association (the PEA), violated the Campaign and Political Finance Amendment, Colo. Const. art. XXVIII (the Amendment), and § 1-45-117, C.R.S.2005, of the Fair Practices Act in conducting certain campaign activity in the 2004 election. Because we conclude the CEA and the PEA violated the Amendment, we reverse the order of the administrative law judge (ALJ) and remand the case for further proceedings.

I. Background

In 2005, as relevant here, complainants, Wayne Rutt and Paul Marrick (collectively Rutt), filed an amended complaint with the Secretary of State alleging that two labor organizations — the CEA and the PEA, an affiliate of the CEA — illegally contributed to the campaign of Bob Bacon, a candidate for office in state senate district 14.

According to the complaint, in violation of § 1-45-117 the CEA and the PEA organized and directed two walks by their members during which they distributed Bacon campaign literature that expressly advocated Bacon's election. The complaint also alleged that the CEA and the PEA violated the Amendment by compensating employees to coordinate worker activities and recruitment for the Bacon campaign, by exchanging and coordinating voter targeting information with the Bacon campaign, and by organizing, directing and paying for a letter-writing campaign to the public urging voters to vote for Bob Bacon.

The CEA and the PEA moved to dismiss the statutory claim and requested attorney fees for defending against it. They asserted that they are labor organizations, not state or political subdivisions; that § 1-45-117 requires a showing of governmental action; and, therefore, that Rutt had no cognizable claim against them under the statute.

The ALJ ordered Rutt to file a second amended complaint setting forth specific factual allegations supporting the claims, and she set a hearing. At the hearing, Rutt dismissed one cause of action, and testimony was presented regarding the other claims.

The ALJ issued a final agency decision dismissing Rutt's claim under § 1-45-117 and resolving all issues in favor of the CEA and the PEA, except that the ALJ denied the CEA's and the PEA's request for attorney fees.

Rutt appeals the order of dismissal, and the CEA and the PEA cross-appeal an evidentiary ruling and that portion of the ALJ's order denying their request for attorney fees.

II. Standard of Review

On review, an agency decision will be reversed if it is arbitrary or capricious, unsupported by the evidence, or contrary to law. Coffman v. Colo. Common Cause, 102 P.3d 999 (Colo.2004); Nededog v. Colo. Dep't of Health Care Policy & Fin., 98 P.3d 960, 961 (Colo.App.2004).

We examine the record in the light most favorable to the agency decision. Whether the record contains substantial evidence to support the agency decision is a question of law subject to de novo review. Martelon v. Colo. Dep't of Health Care Policy & Fin., 124 P.3d 914 (Colo.App.2005); Colo. State Bd. of Med. Exam'rs v. Davis, 893 P.2d 1365 (Colo.App.1995).

We also review de novo the interpretation of a constitutional amendment. Colo. Dep't. of Labor & Employment v. Esser, 30 P.3d 189 (Colo.2001). Although we consider the agency's interpretation in construing the statute, its construction is advisory, not binding. Telluride Resort & Spa, L.P. v. Colo. Dep't of Revenue, 40 P.3d 1260 (Colo.2002).

In construing a constitutional provision, we are obligated to give effect to the intent of the electorate that adopted it. In giving effect to that intent, we look to the words used, reading them in context and according them their plain and ordinary meaning. Where ambiguities exist, we interpret the constitutional provision as a whole in an attempt to harmonize all its parts. Bruce v. City of Colorado Springs, 129 P.3d 988 (Colo.2006); Harwood v. Senate Majority Fund, LLC, 141 P.3d 962 (Colo.App. 2006). We also consider the object to be accomplished and the mischief sought to be prevented by the provision. City of Aurora v. Acosta, 892 P.2d 264 (Colo.1995). And we avoid any interpretation that creates an unreasonable or absurd result. Bickel v. City of Boulder, 885 P.2d 215 (Colo.1994).

III. Purpose of the Amendment

The Amendment was passed in an effort to eliminate the disproportionate influence of special interest groups over the Colorado political process. Section 3(4)(a) of the Amendment provides, as relevant here, that "[i]t shall be unlawful for a . . . labor organization to make contributions to a candidate committee . . . and to make expenditures expressly advocating the election . . . of a candidate."

According to § 1 of the Amendment, Colorado citizens adopted the Amendment in part because (1) "large campaign contributions to political candidates create the potential for corruption and the appearance of corruption"; (2) "large campaign contributions made to influence election outcomes allow wealthy individuals, corporations, and special interest groups to exercise a disproportionate level of influence over the political process"; (3) "in recent years the advent of significant spending on electioneering communications . . . has frustrated the purpose of existing campaign finance requirements"; and (4) "political contributions from corporate treasuries . . . can unfairly influence the outcome of Colorado elections."

IV. Political Contributions

Rutt contends the ALJ erred in concluding the CEA and the PEA did not contribute to the Bacon campaign. We agree.

As relevant here, the Amendment defines a "contribution" to a political campaign to include:

(I) The payment, loan, pledge, gift, or advance of money, or guarantee of a loan, made to any candidate committee . . .;

(II) Any payment made to a third party for the benefit of any candidate committee . . .;

(III) The fair market value of any gift or loan of property made to any candidate committee . . .;

(IV) Anything of value given, directly or indirectly, to a candidate for the purpose of promoting the candidate's nomination, retention, recall, or election.

Colo. Const. art. XXVIII, § 2(5)(a).

Certain payments and services are specifically excluded from the definition of contributions. Section 2(5)(b) of the Amendment provides that contributions to political campaigns do not include

services provided without compensation by individuals volunteering their time on behalf of a candidate [or] candidate committee . . .; a transfer by a membership organization of a portion of a member's dues to a small donor committee or political committee sponsored by such membership organization; or payments by a . . . labor organization for the costs of establishing, administering, and soliciting funds from its own employees or members for a political committee or small donor committee.

"Contributions" also include expenditures that are coordinated with a candidate. Colo. Const. art. XXVIII, §§ 2(9), 5(3). An expenditure is "any purchase, payment, distribution, loan, advance, deposit, or gift of money by any person for the purpose of expressly advocating the election or defeat of a candidate." Colo. Const. art. XXVIII, § 2(8)(a). But "expenditures" do not include spending by a membership organization for any communication solely to members and their families. Colo. Const. art. XXVIII, § 2(8)(b)(III).

Rutt relies on the two definitions of "contribution" that make it illegal (1) to make "[a]ny payment . . . to a third party for the benefit of any candidate committee," Colo. Const. art. XXVIII, § 2(5)(a)(II), and (2) to give "[a]nything of value . . . directly or indirectly, to a candidate for the purpose of promoting the candidate's . . . election," Colo. Const. art. XXVIII, § 2(5)(a)(IV). Rutt maintains that the CEA's and the PEA's efforts to elect Bacon were coordinated with the Bacon campaign within the meaning of §§ 2(9) and 5(3) of the Amendment, and thus their efforts constitute a contribution under either or both of these provisions and therefore violate § 3(4)(a) of the Amendment. We agree as to most of the CEA's and the PEA's activities.

A. Coordination

To address this contention, we must first consider Rutt's argument that the ALJ applied an incorrect and unduly restrictive legal standard in determining that the CEA and the PEA did not coordinate their efforts with the Bacon campaign. We agree.

Neither of the two sections defining contribution on which Rutt relies includes the term "coordination." However, Rutt's attorney conceded at oral argument, and we agree, that a finding of coordination is required to avoid a conflict with the First Amendment. See Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (holding that certain provisions of the Federal Election Campaign Act of 1971, which limited independent political expenditures by individuals and groups and fixed ceilings on overall campaign expenditures by candidates, were unconstitutional because they impermissibly burdened the right of free expression under the First Amendment); Fed. Election Comm'n v. Christian Coalition, 52 F.Supp.2d 45 (D.D.C. 1999) (discussing coordination at length); see also Colo. Republican Fed. Campaign Comm. v. Fed. Election Comm'n, 518 U.S. 604, 617-18, 116 S.Ct. 2309, 2317, 135 L.Ed.2d 795 (1996) (reiterating the Court's holding in Buckley that the...