Washington State Republican Party v. STATE PUBLIC DISCLOSURE …

• Decision Date: 27 July 2000
• Docket Number: No. 67442-6.,67442-6.
• Citation: 4 P.3d 808,141 Wash.2d 245
• Parties: WASHINGTON STATE REPUBLICAN PARTY, Respondent, v. WASHINGTON STATE PUBLIC DISCLOSURE COMMISSION, Gary Maehara, Chair, and Susan Brady, Rhonda Cahill and Ronald Meyers, Commissioners of the Washington State Public Disclosure Commission, in their individual capacities, Melissa Warheit, Executive Director of the Washington State Public Disclosure Commission, in her individual capacity, and Christine Gregoire, Attorney General of the State of Washington, in her individual capacity, Appellants. State of Washington ex rel. Washington State Public Disclosure Commission, Appellant, v. Washington State Republican Party, Respondent.
• Court: Washington Supreme Court

4 P.3d 808

141 Wash.2d 245

WASHINGTON STATE REPUBLICAN PARTY, Respondent, v. WASHINGTON STATE PUBLIC DISCLOSURE COMMISSION, Gary Maehara, Chair, and Susan Brady, Rhonda Cahill and Ronald Meyers, Commissioners of the Washington State Public Disclosure Commission, in their individual capacities, Melissa Warheit, Executive Director of the Washington State Public Disclosure Commission, in her individual capacity, and Christine Gregoire, Attorney General of the State of Washington, in her individual capacity, Appellants.

State of Washington ex rel. Washington State Public Disclosure Commission, Appellant, v. Washington State Republican Party, Respondent.

No. 67442-6.

Supreme Court of Washington, En Banc.

Argued September 23, 1999.

Decided July 27, 2000.

Christine Gregoire, Attorney General, Stephen T. Reinmuth, Asst., Olympia, for Appellants.

John J. White, Jr., Kirkland; Appel & Glueck, William John Glueck, Seattle, for Respondent.

Carney, Badley, Smith & Spellman, James Elliot Lobsenz, Seattle, Amicus Curiae on behalf of American Civil Liberties Union.

Stephen Overstreet, Olympia, Amicus Curiae on behalf of Building Industry Association of Washington.

MADSEN, J.

The Washington State Public Disclosure Commission (Commission) appeals a superior court judgment that the Washington State Republican Party (Party) did not violate RCW 42.17.640 when it used exempt funds to purchase a television commercial critical of then candidate Gary Locke prior to the 1996 gubernatorial election. The Commission contends the superior court erred in reading the statute as allowing funds in excess of contribution limits to be used for the political advertisement.

This case arises at a time of tremendous national debate about campaign finance reform, especially around the creation and use of "soft money." Nevertheless, the United States Supreme Court and this court have remained steadfast in protecting the right to full and vigorous discussion of political issues, free from government regulations. We conclude that the advertisement here was issue-oriented, and therefore protected under the free speech clause of the First Amendment. Accordingly, we hold that RCW 42.17.640's limitations on issue-oriented speech are unconstitutional as applied and affirm the trial court.

Facts

In 1992, the voters passed a campaign finance initiative, the Fair Campaign Practices Act. Among other things, one section of the act, RCW 42.17.640, limits contributions to candidates for office and political parties. The limit on contributions to a political party set in the initiative is $2,500 per year, RCW 42.17.640(6), but the Commission adjusts this amount every two years based upon inflation, RCW 42.17.690. As a result of a 1995 amendment, Laws of 1995, ch. 397, § 20, contributions earmarked for certain specified uses are not subject to the contribution limits, specifically "voter registration, for absentee ballot information, for precinct caucuses, for get-out-the-vote campaigns, for precinct judges or inspectors, for sample ballots, or for ballot counting, all without promotion of or political advertising for individual candidates[.]" RCW 42.17.640(14)(a). Further, expenditures for a party's "own internal organization or fund raising without direct association with individual candidates" are also exempt. RCW 42.17.640(14)(b). These "exempt" funds are also known as "soft money."

On October 17, 1996, three weeks prior to the 1996 Washington State gubernatorial election, the Party bought and ran throughout the state a television commercial critical of then gubernatorial candidate Gary Locke. The Party paid for this $150,000 "Tell Gary Locke" ad using exempt funds, or "soft money" it had accepted under RCW 42.17.640(14). Also on October 17, 1996, the Party bought another television ad for $30,000, which was in part identical to the "Tell Gary Locke" ad but ended quite differently. The party paid for this second ad with funds limited under RCW 42.17.640(6), and reported it as an in-kind contribution to the Ellen Craswell gubernatorial campaign.

Both ads began as follows:

What does Gary Locke have to say about crime in our neighborhoods?

When 76 percent of voters said yes to "Three Strikes, You're Out," Gary Locke said no.

When people asked for more cops on the streets in King County, Gary Locke said no.

But Gary Locke said "yes" to a plan which would give self-esteem training to prostitutes and pay for a newsletter for those employed in the "sex industry," a plan so ridiculous that both Republicans and Democrats condemned it.

Clerk's Papers (CP) at 181. The "Tell Gary Locke" ad continued:

Tell Gary Locke that's not what we call getting tough on crime.

Tell Gary Locke that we deserve better.

Paid for by the Washington State Republican Party.

CP at 81. The second ad, reported as an in-kind contribution to the Ellen Craswell campaign, instead concluded:

And now he wants to be our governor?

Gary Locke: another extreme liberal we just can't afford.

Paid for by the Washington State Republican Party.

CP at 187. During the 1996 election cycle, the Party also used exempt funds to buy polls, surveys, and opposition research.

After the election, the Commission's enforcement staff filed a complaint after concluding that the Party had committed a number of violations of state campaign finance laws, including its use of exempt funds to finance both the "Tell Gary Locke" commercial and the surveys and opposition research. On June 23, 1998, the Commission held a hearing on these issues. It found by a vote of 4-0 that the Party violated RCW 42.17.640 by using "soft money" to purchase the advertisement. It referred the apparent violation to the Attorney General for further action under RCW 42.17.400, pursuant to which a more substantial penalty may be sought.¹ By a vote of 2-2, the Commission did not reach a decision on whether the Party violated RCW 42.17.640 by using "soft money" to pay for political surveys and opposition research during the 1996 election cycle.

Before the Attorney General commenced legal action based on the Commission's order, the Party filed a complaint in King County Superior Court, alleging that the Commission's application of RCW 42.17.640 in its enforcement action against the Party violated the Party's civil rights to free speech and association and was unconstitutional. It prayed for relief on this issue in the form of an injunction against further enforcement action and a declaratory judgment that it is permissible under the statute to use exempt funds to buy issue-oriented political advertisements if they do not expressly advocate the election or defeat of a candidate. The complaint also sought judicial review of the Commission's action under the Administrative Procedure Act, chapter 34.05 RCW, and a permanent stay of the Commission's order holding that the "Tell Gary Locke" ad violated the statute. The complaint asked the court to issue a declaratory judgment that it is not a violation of the statute for a political party to use exempt funds to pay for political surveys and opposition research that are only used internally and which are not supplied to any candidate. Finally, the Party sought attorney fees and costs pursuant to RCW 42.17.400(5) and 42 U.S.C. § 1988 (1994).

The Commission filed a counterclaim against the Party, seeking monetary penalties for intentional spending of "soft money" on the "Tell Gary Locke" commercial in violation of RCW 42.17.640.

Both the Commission and the Party moved for summary judgment. On October 7, 1998, the trial court entered an order granting the Party's motion and denying the Commission's motion. The court reasoned that the "Tell Gary Locke" ad was protected political speech under the First Amendment and that if the statute were applied to prohibit the ad, it would be unconstitutional as applied. Instead of striking down the law, the trial court construed the statute to imply an exemption for the protected speech. The court also concluded that the Party was entitled to a declaratory judgment that it could use exempt funds to buy opposition research and polling for internal use, dismissed the State's counterclaim with prejudice, awarded costs and attorney fees to the Party and directed it to file a request for reasonable attorney fees. Thereafter, the Party moved for costs and attorney fees, and on November 25, 1998, the court awarded attorney fees to the Party under RCW 42.17.400(5), but declined to award fees pursuant to 42 U.S.C. § 1988. In a supplemental order entered March 4, 1999, the court limited the fee award under RCW 42.17.400(5) to those fees and costs incurred after the State filed its counterclaim.

The Commission appealed directly to this Court, which granted the motion for direct review. The Party cross-appealed the award of attorney fees.

Analysis

I. Use of Exempt Funds for the "Tell Gary Locke" Advertisement

The Commission contends that the trial court's construction of RCW 42.17.640 permits exempt soft money contributions from organizational donors to be used by a political party for purposes not allowed by the statute, and that the trial court's construction is not necessary to avoid First Amendment prohibitions. The Party maintains that the trial court properly construed the statute to avoid unconstitutionality which would otherwise result if the statute were construed to prohibit use of soft money contributions for issue-oriented political speech.

In reviewing a grant of summary judgment we engage in the same inquiry as the trial court. Monroe v. Soliz, 132 Wash.2d 414, 418, 939 P.2d 205 (1997). Summary judgment should be granted where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). Here, there are no issues of material fact. Construction of a statute is a question of law which is reviewed de novo. Senate Republican Campaign Comm. v. Public Disclosure Comm'n, 133 Wash.2d 229, 237, 943...