Sullivan v. Tex. Ethics Comm'n

• Decision Date: 31 August 2022
• Docket Number: 03-21-00033-CV
• Parties: Michael Quinn Sullivan, Appellant v. Texas Ethics Commission, Appellee
• Court: Texas Court of Appeals

Michael Quinn Sullivan, Appellant v. Texas Ethics Commission, Appellee

No. 03-21-00033-CV

Court of Appeals of Texas, Third District, Austin

August 31, 2022

FROM THE 250TH DISTRICT COURT OF TRAVIS COUNTY NO D-1-GN-17-001878, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING

Before Justices Goodwin, Baker, and Smith

OPINION

Thomas J. Baker, Justice

Michael Quinn Sullivan appeals from the trial court's summary judgment determining that Sullivan is liable to the Texas Ethics Commission for a civil penalty for failing to register as a lobbyist. See Tex. Gov't Code §§ 305.003(a)(2), .032. In a de novo appeal to the trial court of the Commission's final administrative order concluding that Sullivan violated the lobbyist-registration statute Sullivan lodged constitutional challenges to the statute which the trial court determined had no merit. On appeal to this Court, Sullivan raises the same constitutional issues and challenges the trial court's jurisdiction over this cause, the sufficiency of the evidence supporting the judgment, and the amount of penalty. For the following reasons, we reverse the portion of the trial court's summary judgment assessing a $10,000 penalty and remand that issue for further proceedings. We affirm the remainder of the trial court's judgment.

BACKGROUND

The Commission was created in 1991 by a constitutional amendment. See Tex. Const. art. III, § 24a; see also Tex. Gov't Code § 571.021 ("This chapter applies to the Texas Ethics Commission created under Article III, Section 24a, of the Texas Constitution."). Chapter 571 of the Government Code provides for the Commission's powers, duties, and procedures related to administration and enforcement of the statutes under its purview, see Tex. Gov't Code §§ 571.002-.177, and expressly endows it with administrative and enforcement authority over specified chapters of the Government and Election Codes, see id. § 571.061 ("Laws Administered and Enforced by the Commission"). Among those is Chapter 305 ("Registration of Lobbyists") of the Government Code, requiring lobbyists to register with the Commission and pay a specified fee. See id. §§ 305.003 (the registration statute), .005 (the fee statute). The policy underlying Chapter 305 attempts to balance individuals' rights to "petition their government for the redress of grievances and to express freely their opinions" to legislators and other government officers while "preserv[ing] and maintaining] the integrity of the legislative and administrative processes" by requiring public disclosure of the identity, expenditures and activities of certain persons who engage in direct communication with government officers to persuade them to take specific actions. See id. § 305.001; see also id. § 571.001 (noting purpose of Chapter 571 is to "protect the constitutional privilege of free suffrage by regulating elections and prohibiting undue influence while also protecting the constitutional right of the governed to apply to their government for the redress of grievances").

This dispute centers on Sullivan's failure to register as a lobbyist in 2010 and 2011, when he was president and CEO of Empower Texans, Inc. Empower Texans, also doing business as Texans for Fiscal Responsibility, is a non-profit corporation that has described itself as promoting a legislative agenda of "free market solutions," "low taxes," and "responsible government." The undisputed summary-judgment evidence shows that Sullivan, acting on behalf of Empower Texans in 2010 and 2011, sent over a dozen communications to members of the Texas House of Representatives and Senate and their staffs that encouraged recipients to support or oppose specific legislation or other matters pending in the legislature-consistent with Empower Texans's stated priorities-and to contact him with any questions about the organization's positions.^[1]

Although he registered as a lobbyist on behalf of Empower Texans from 2001 to 2009, Sullivan did not register in 2010 and 2011. For lobbyists employed by non-profit corporations, like Sullivan, the registration fee during those years was $100. See Act of May 29, 2005, 79th Leg., R.S., ch. 899, § 1.01, 2005 Tex. Gen. Laws 3098, 3098 (current version, requiring fee of $150 for those lobbying for non-profit corporations, at Tex. Gov't Code § 305.005(c)(1)). In April 2012, the Commission received two sworn complaints filed by Texas legislators alleging that Sullivan violated Chapter 305 of the Government Code. See Tex. Gov't Code § 305.035 (providing that Commission, attorney general, or any county or district attorney may enforce chapter and for filing of sworn statements with appropriate prosecuting attorney or Commission alleging violation of chapter). After a formal hearing, the Commission issued its final order in July 2014 concluding that Sullivan violated the registration statute for both years and was required to pay a statutory penalty of $5,000 per violation. See id. § 571.132 ("Formal Hearing: Resolution"). Sullivan filed a de novo appeal from that order in Denton County district court, see id. § 571.133 ("Appeal of Final Decision"); the Commission prevailed on its motion to transfer venue to Travis County, arguing that Sullivan did not reside in Denton County, see id; and Sullivan unsuccessfully attempted to dismiss his own de novo appeal under the Texas Citizens Participation Act (TCP A), see Sullivan v. Texas Ethics Comm'n, 551 S.W.3d 848, 851-52 (Tex. App - Austin 2018, pet. denied).

On remand from this Court, Sullivan's de novo appeal of the Commission's order was litigated in tandem with a related matter in which Sullivan and Empower Texans sought a declaratory judgment that the Commission's enforcement authority is unconstitutional because it violates the separation-of-powers provision in the Texas Constitution. Sullivan's and Empower Texans's appeal of the trial court's ruling on the related declaratory-judgment matter is currently pending at the Eighth Court of Appeals in Cause Number 08-20-00153-CV. As for this cause, Sullivan and the Commission filed with the trial court competing motions for summary judgment. The trial court granted the Commission's motion, denied Sullivan's, and decreed that Sullivan is liable to the Commission for a $5,000 civil penalty for each of the two years at issue. Sullivan perfected this appeal.

DISCUSSION

The registration statute provides, in relevant part,

(a) A person must register with the commission under this chapter if the person:

(1) makes a total expenditure of an amount determined by commission rule but not less than $200 in a calendar quarter not including the person's own travel, food, or lodging expenses or the person's own membership dues, on activities described in Section 305.006(b) to communicate directly with one or more members of the legislative or executive branch to influence legislation or administrative action; or (2) receives, or is entitled to receive under an agreement under which the person is retained or employed, compensation or reimbursement, not including reimbursement for the person's own travel, food, or lodging expenses or the person's own membership dues, of more than an amount determined by commission rule but not less than $200 in a calendar quarter from another person to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action.

(b) Subsection (a)(2) requires a person to register if the person, as part of his regular employment, has communicated directly with a member of the legislative or executive branch to influence legislation or administrative action on behalf of the person by whom he is compensated or reimbursed, whether or not the person receives any compensation for the communication in addition to the salary for that regular employment.

Tex. Gov't Code § 305.003 ("Persons Required to Register"). In its summary-judgment motion, the Commission asserted that its attached evidence conclusively established each of the statutory elements requiring Sullivan to register for years 2010 and 2011 and that he was, therefore, "liable for the civil penalty provided for by statute."^[2] See id. §§ 305.032 ("Civil Penalty for Failure to Register"), 571.173 ("Civil Penalty for Delay or Violation").

In his summary-judgment motion, Sullivan prayed for the court to order that the Commission "take nothing by its claims" because (1) it would be unconstitutional for the Commission to "carry forward this case" in violation of the Texas Constitution's separation-of-powers provision; (2) the registration and fee statutes are unconstitutional facially and as applied to him; and (3) the Commission was seeking to impose a criminal penalty on him that is neither authorized by statute nor brought in a proceeding affording him adequate due process.

This Court reviews an order granting or denying a motion for summary judgment de novo. Texas Mun. Power Agency v. Public Util. Comm'n, 253 S.W.3d 184, 192 (Tex. 2007). When both parties move for summary judgment and the trial court grants one motion and denies the other, we "review the summary judgment evidence presented by each party, determine all questions presented, and render judgment as the trial court should have rendered." Id.

First Amendment challenge

In his first issue, Sullivan contends that the registration and fee statutes violate the First Amendment both facially and as applied to him. He lodges both a "typical facial attack" and a facial attack under the "overbreadth" doctrine. See United States v Stevens, 559 U.S. 460, 472-73 (2010) (explaining two types of facial challenges). We first note that in considering challenges to the constitutionality of a statute, we presume that the statute is constitutional and "must, if...