San Juan County v. No New Gas Tax

• Decision Date: 26 April 2007
• Docket Number: No. 77966-0.,77966-0.
• Citation: 160 Wn.2d 141,157 P.3d 831
• Court: Washington Supreme Court
• Parties: SAN JUAN COUNTY, a political subdivision of the State of Washington; City of Kent, a political subdivision of the State of Washington; City of Auburn, a political subdivision of the State of Washington; City of Seattle, a political subdivision of the State of Washington, ex rel. the State of Washington, Respondents, v. NO NEW GAS TAX, a Washington political action committee; and Jeffrey Davis, an individual and treasurer of No New Gas Tax, Appellants.

157 P.3d 831

160 Wn.2d 141

SAN JUAN COUNTY, a political subdivision of the State of Washington; City of Kent, a political subdivision of the State of Washington; City of Auburn, a political subdivision of the State of Washington; City of Seattle, a political subdivision of the State of Washington, ex rel. the State of Washington, Respondents, v. NO NEW GAS TAX, a Washington political action committee; and Jeffrey Davis, an individual and treasurer of No New Gas Tax, Appellants.

No. 77966-0.

Supreme Court of Washington, En Banc.

Argued June 8, 2006.

Decided April 26, 2007.

William R. Maurer, Michael E. Bindas, Institute for Justice/WA State Chapter, Clark Commodore Goss III, Tacey Law Group PS, Seattle, WA, Steven M. Simpson, Institute for Justice, Arlington, VA, for Appellants.

Michael K. Vaska, P. Stephen Dijulio, Rodrick Dembowski, Ramsey E. Ramerman, Foster Pepper PLLC, Thomas Aquinas Carr, Seattle City Attorneys Office, Seattle, WA, David Scott Snyder, Redmond, WA, Randall Keenan Gaylord, San Juan County Prosecutor, Friday Harbor, WA, Thomas C. Brubaker, City of Kent Legal Department, Kent, WA, for Respondents.

David C. Lundsgaard, Graham & Dunn PC, Seattle, WA, for Amicus Curiae on behalf of Washington State Association of Broadcasters.

Michael Edward Kipling, Kipling Law Group PLLC, Aaron Hugh Caplan, for Amicus Curiae on behalf of American Civil Liberties Union.

William Berggren Collins, Olympia, WA, for Amicus Curiae on behalf of Attorney General.

Diana M. Kirchheim, Groen Stephens & Klinge LLP, Bellevue, WA, Erik S. Jaffe, Washington, DC, for Amicus Curiae on behalf of Competitive Politics, Amicus Curiae on behalf of Cato Institute, Amicus Curiae on behalf of Building Industry Assoc of Washington.

MADSEN, J.

¶ 1 The central issue in this appeal is whether the trial court erred in characterizing the on-air support of an initiative campaign by radio talk-show hosts as a campaign "contribution" that must be disclosed under the Fair Campaign Practices Act (FCPA), chapter 42.17 RCW. Petitioners No New Gas Tax (NNGT), a political action committee, and Jeffrey Davis, its treasurer, allege that San Juan County et al. (prosecutors) violated several of its constitutional rights by obtaining a preliminary injunction order, requiring it to disclose the value of radio broadcasts aired on a local radio station. The trial court dismissed NNGT's counterclaims under CR 12(b)(6), concluding that because disclosure was required by the FCPA, NNGT failed to state a claim upon which relief could be granted. NNGT asks this court to reverse the trial court's ruling, contending that the preliminary injunction order was wrongly issued. Further, NNGT urges that the enforcement action violated its constitutional rights. The prosecutors also cross-appealed the trial court's denial of attorney fees.

¶ 2 We hold that the radio broadcasts at issue fall within the statutory media exemption (RCW 42.17.020(15)(b)(iv)) because they aired during the content portion of a regularly scheduled radio program, for which the broadcaster does not normally require payment, on a radio station that is not controlled by a candidate or political committee. Because the media exemption applies, the radio broadcasts are not a campaign "contribution" within the meaning of RCW 42.17.020(15)(a). Accordingly, we reverse the trial court's CR 12(b)(6) ruling, which was based on the trial court's incorrect determination that the FCPA required reporting of the radio broadcasts as campaign contributions and remand for further proceedings consistent with this opinion. However, we affirm the trial court's denial of attorney fees to the prosecutors.

FACTS

¶ 3 In 1972, Washington voters passed Initiative 276 (later enacted as chapter 42.17 RCW), which regulates the financing of political campaigns. Laws of 1973, ch. 1, § 1. The purpose of the measure is to promote "public confidence in government at all levels" through, among other things, a system of compelled disclosure of campaign contributions and expenditures. RCW 42.17.010(1), (5). Political committees, whether organized in support of a candidate or a ballot measure, are required to register with the Public Disclosure Commission (PDC) and file a series of financial reports in accordance with detailed timing and content requirements. RCW 42.17.040, .080, .090. In particular, political committees must disclose the identities of campaign contributors and the amounts and dates of each contribution. RCW 42.17.090(1)(a), (b).

¶ 4 In 1992, the voters approved Initiative 134, the FCPA. Laws of 1993, ch. 2, §§ 1-36. The FCPA supplemented the disclosure requirements of chapter 42.17 RCW with certain limitations on campaign contributions and expenditures. Among other changes, the FCPA made it illegal to either give or receive a contribution of more than $5,000 to any campaign within 21 days of an election. RCW 42.17.105(8). At the same time, the definition of "contribution" was amended to expressly exempt certain press activities.¹

¶ 5 On May 6, 2005, NNGT registered with the PDC as a political committee. Clerk's Papers (CP) at 59. The purpose of the committee was to support a ballot measure, Initiative 912 (I-912), that would have repealed a statewide fuel tax approved by the 2005 legislature.

¶ 6 Kirby Wilbur and John Carlson are radio talk show hosts with regularly scheduled programs on 570 KVI AM, a radio station owned by Fisher Communications, Inc. During their broadcasts, Wilbur and Carlson typically discuss their views on political and social issues. Fisher charges for political advertising during the "commercial" segments of its radio programs, but it does not charge for the value of any content time associated with Wilbur's and Carlson's talk shows.

¶ 7 Wilbur and Carlson strongly criticized the legislature's enactment of the fuel tax and devoted a substantial portion of their radio broadcasts to supporting the I-912 campaign. In particular, they encouraged listeners to contribute funds to NNGT, to visit NNGT's web site and offices to obtain petitions, and to circulate and gather signatures on the petitions in order to qualify the initiative for the ballot.

¶ 8 On June 22, 2005, the prosecuting authorities of San Juan County and the cities of Kent, Auburn, and Seattle filed a complaint against NNGT, alleging that it violated the disclosure provisions of the FCPA by, in part, failing to report "valuable radio announcer professional services and valuable commercial radio airtime" as a campaign "contribution" under RCW 42.17.020(15)(a).² CP at 28. The prosecutors retained a private law firm to represent them in the litigation. The law firm serves as bond counsel for the state of Washington and supported a political committee opposing I-912.

¶ 9 About two weeks before the deadline to qualify the initiative for the ballot, the prosecutors sought an injunction to prevent NNGT "from accepting in-kind contributions from Fisher Communications" until it complied with the disclosure requirements. CP at 30. The prosecutors also sought fines, investigation costs, and an award of attorney fees.

¶ 10 The prosecutors asserted that Wilbur and Carlson are "self-identified spokespersons" for NNGT, that the KVI website has a link to the NNGT website, and that "this link and the constant exposure on the radio is more than simply reporting the news and constitutes advertising" for NNGT as defined in RCW 42.17.020(37)³. The prosecutors asserted that Wilbur and Carlson are "officers and agents" of NNGT because "[t]hey have solicited money and other resources to qualify Initiative 912 for the ballot." CP at 343. The prosecutors asked the court to require NNGT to report the value of the advertising provided by Fisher Communications. In support, the prosecutors presented several excerpts from the radio broadcasts in which Wilbur and Carlson discussed their participation in NNGT, directed listeners to NNGT's website, solicited funds and services in support of the initiative campaign, and reported on the progress of fundraising efforts. CP at 345.

¶ 11 The trial court granted a preliminary injunction, finding that NNGT had received "contributions of air time for political advertising purposes in support of Initiative 912 from Fisher Communications, owner and operator of the radio station 570 KVI." CP at 388. The court also found that Fisher's "donation of free air time" is a reportable "contribution" and required NNGT to disclose its value to the PDC. Id.

¶ 12 Counsel for NNGT requested clarification of the trial court's order, stating, "I'm not sure what you're asking us to do, and here is my problem, your Honor. How are we to decide what is political advertising and what's not?" CP at 493. The trial court declined to clarify its order, stating "you have the same problem that any other candidate or campaign has in trying to understand how to make full reporting, and I'm not inclined to treat you any differently." Tr. of Proceedings (July 1, 2005) at 37. In compliance with the order, NNGT reported a $20,000 contribution from Fisher Communications. NNGT also reported the value of other media discussions in support of the ballot measure. NNGT subsequently submitted enough valid signatures to qualify I-912 for the ballot.⁴

¶ 13 NNGT sought discretionary review of the trial court order and requested a stay pending its resolution. A Court of Appeals commissioner denied the request, finding that NNGT was not harmed by the lack of a stay because the order required NNGT to disclose only those contributions received before May 31, 2005 and NNGT had complied with the order.

¶ 14 NNGT filed another request for an emergency stay, supported by an affidavit by its treasurer, Jeff Davis. Davis stated that the PDC staff member assigned to handle NNGT's disclosure reports informed him that the PDC would abide by the trial court's order and assume that the $5,000 limit on contributions within 21 days prior to an election applies...