Woodrome v. Daniels

• Decision Date: 20 May 2010
• Docket Number: No. 10–243.,10–243.
• Citation: 2010 Ark. 244,370 S.W.3d 190
• Court: Arkansas Supreme Court
• Parties: Brandon WOODROME, Petitioner, v. Charlie DANIELS, in his Official Capacity as Secretary of State, Respondent, v. Randy Zook, Dennis Jungmeyer, Randy Wilbourn, and Ray C. Dillon, Individually, and on behalf of Arkansans to Protect Police, Libraries, Education & Services (Apples), Intervenors.

2010 Ark. 244

370 S.W.3d 190

Brandon WOODROME, Petitioner,

v.Charlie DANIELS, in his Official Capacity as Secretary of State, Respondent,

v.Randy Zook, Dennis Jungmeyer, Randy Wilbourn, and Ray C. Dillon, Individually, and on behalf of Arkansans to Protect Police, Libraries, Education & Services (Apples), Intervenors.

No. 10–243.

Supreme Court of Arkansas.

May 20, 2010.

Stewart Law Firm, by: Chris H. Stewart, Little Rock, for petitioner.

Dustin McDaniel, Att'y Gen., by: Mark N. Ohrenberger, Ass't Att'y Gen., for respondent.

Friday, Eldredge & Clark LLP, Little Rock, by: Elizabeth Robben Murray, for intervenors/cross-petitioners.

David A. Curran, James B. DePriest, and Eric B. Estes, Office of the Ark. Att'y Gen. Dep't of Pub. Protection, for amicus curiae Pub. Protection Dep't of the Ark. Att'y Gen.'s Office.

ELANA CUNNINGHAM WILLS, Justice.

In this original action, petitioner, Brandon Woodrome, seeks this court's review of the Secretary of State's determination regarding the legal sufficiency of a statewide initiative petition. The petition, sponsored by the “Arkansas Progressive Group,” ¹ bears the popular name “A Constitutional Amendment to Repeal All State Taxes and Establish A Flat Rate Sales Tax.” On December 21, 2009, the Arkansas Progressive Group submitted its proposed popular name and ballot title to the Attorney General for review and certification pursuant to Arkansas Code Annotated section 7–9–107 (Repl.2007). The Attorney General responded on January 7, 2010 with Opinion No. 2009–212, substituting and certifying a popular name and ballot title for the proposed amendment under section 7–9–107(b). As revised, the Attorney General certified the following popular name and ballot title:

Popular Name

A Constitutional Amendment to Repeal All State Taxes and Establish a Flat Rate Sales Tax

Ballot Title

AN AMENDMENT PROVIDING THAT, EFFECTIVE JULY 1, 2012, ALL EXISTING TAXES LEVIED BY THE STATE'S GENERAL ASSEMBLY ARE REPEALED AND A FLAT RATE SALES TAX SHALL BE ENACTED. ALL REVENUES GENERATED BY ANY TAX LEVIED BY THE GENERAL ASSEMBLY WILL CEASE ON JULY 1, 2012, INCLUDING REVENUES FROM ALL CAPITAL GAINS TAXES, ALL CORPORATE TAXES, ALL INCOME TAXES, ALL PAYROLL TAXES, AND ALL REAL ESTATE TRANSFER TAXES. TO PROVIDE A SOURCE OF STATE REVENUE, THE GENERAL ASSEMBLY SHALL, BEFORE JULY 1, 2012, DETERMINE THE RATE OF THE FLAT RATE SALES TAX. THE GENERAL ASSEMBLY SHALL DETERMINE THE DISTRIBUTION OF

THE FLAT RATE SALES TAX. THE RATE OF THE SALES TAX MAY IMPACT CURRENT REVENUES AND STATE SERVICES. THE GENERAL ASSEMBLY MAY CHANGE THE INITIAL RATE OF THE FLAT RATE SALES TAX BY A VOTE OF AT LEAST THREE–FOURTHS OF THE MEMBERS ELECTED TO EACH HOUSE. EACH CITIZEN WILL BE PAID A MONTHLY CITIZEN PAYMENT. THE MONTHLY PAYMENT WILL BE DETERMINED BY THE FOLLOWING FORMULA: THE RATE OF THE TAX MULTIPLIED BY THE VALUE OF THE POVERTY LEVEL DIVIDED BY TWELVE. THE ANNUAL POVERTY LEVEL SHALL BE DETERMINED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES. THE FLAT RATE SALES TAX SHALL NOT INHIBIT OR AFFECT THE POWER OF A COUNTY OR MUNICIPALITY TO LEVY AND COLLECT LOCAL TAXES. NO FLAT RATE SALES TAX IS IMPOSED ON: A TAXABLE PROPERTY OR SERVICE PURCHASED IN THE STATE FOR A BUSINESS PURPOSE; A TAXABLE PROPERTY OR SERVICE PURCHASED IN THE STATE FOR AN INVESTMENT PURPOSE AND HELD EXCLUSIVELY FOR AN INVESTMENT PURPOSE; A TAXABLE PROPERTY THAT HAS BEEN TAXED AT THE INITIAL RETAIL LEVEL AND IS TRANSFERRED BY A SUBSEQUENT SALE; EDUCATION TUITION FOR PRIMARY, SECONDARY, OR POSTSECONDARY LEVEL EDUCATION AND JOB–RELATED TRAINING COURSE; AND SERVICES REQUIRED BY FEDERAL, STATE OR LOCAL LAWS TO BE PERFORMED BY A PERSON.

In substituting and certifying the popular name and ballot title, however, the Attorney General added a cautionary note, in light of the complexity and “far-reaching effects” of the proposed amendment. He emphasized the direct correlation between the complexity of a proposed amendment and its susceptibility to a successful ballot title challenge.

After the Attorney General's certification, on January 25, 2010, Woodrome filed a petition for a determination of the legal sufficiency of the initiative petition with the Secretary of State's office pursuant to Arkansas Code Annotated section 7–9–503(a)(1) (Repl.2007). The Secretary of State requested a consultation on the popular name and ballot title from the Attorney General, pursuant to section 7–9–503(b) (Repl.2007), to determine whether the popular name and ballot title were “fair and complete” and whether the measure, if approved, would violate constitutional, statutory, or regulatory provisions or would otherwise be invalid. In a letter to the Secretary of State dated February 23, 2010, the Attorney General noted that although he had previously rejected two versions of the popular name and ballot title “due to ambiguities in the text of the proposed amendment,” he substituted and certified the popular name and ballot title for the measure in Opinion 2009–212. The Attorney General stated that the name and title were “as ‘fair and complete’ as they can be, based upon the text of the measure submitted.” Regarding the measure's constitutionality, the Attorney General's letter warned that it was “difficult to analyze the substantive constitutionality of a proposed measure without a full-blown adversary proceeding.” Moreover, because the measure represented a “substantial revision of state tax laws,” it was “difficult to determine whether it might violate the United States Constitution without the development of facts as to the implementation of the measure[.]” ²

The next day, on February 24, 2010, the Secretary of State sent a letter to Chris Stewart, Woodrome's counsel, stating that he agreed with the Attorney General that the proposed popular name and ballot title were “fair and complete,” although the Secretary noted that he shared the Attorney General's concerns and reservations about the assessment of the ballot title. In addition, the Secretary agreed that the proposed amendment would not violate the State Constitution, nor did it appear to be facially unconstitutional under the United States Constitution.

Woodrome brought the instant original action in this court on March 5, 2010, filing a petition for review of the Secretary of State's determination. SeeArk.Code Ann. § 7–9–505 (Repl.2007). On April 6, 2010, Randy Zook, Dennis Jungmeyer, Randy Wilbourn, and Ray Dillon, individually and on behalf of Arkansans to Protect Police, Libraries, Education & Services (APPLES) filed a motion to intervene in the proceedings.³ After the motion to intervene was granted, APPLES filed a response to Woodrome's petition as well as a cross-petition on April 16, 2010, asserting that Woodrome was entitled to seek neither the Secretary of State's declaration under section 7–9–503 nor this court's review of that declaration under section 7–9–505. In addition, the cross-petitioners sought this court's review of the Secretary of State's declaration, alleging that the popular name and ballot title were not fair and complete and that the measure was in violation of the Arkansas and United States Constitutions.

Before reaching the merits of Woodrome's petition before this court, we must address the question raised by APPLES as to whether Woodrome has standing to bring the instant petition for review. APPLES points out that, in previous decisions, this court has questioned whether the sponsor of a measure may petition the Secretary of State for a determination of the legal sufficiency of a petition under section 7–9–503. See Stilley v. Priest, 341 Ark. 329, 339, 16 S.W.3d 251, 257 (2000) (Stilley II ) (noting, but not addressing, the question of whether Act 877 might lead to “friendly” actions to “garner the court's approval of the text of proposed amendments”); Ward v. Priest, 350 Ark. 345, 377, 86 S.W.3d 884, 907 (2002) (Brown, J., dissenting) (noting the distinction in Act 877 between the “sponsor” of a measure and a “petitioner” and opining that it would be “absurd” for sponsors to challenge the legal sufficiency of their own ballot titles).

APPLES also expresses concern with the fact that Act 877, as codified at Arkansas Code Annotated sections 7–9–501 to –506 (Repl.2007), contains no requirement that a petition filed with the Secretary of State's office be publicized, nor does it provide a mechanism by which any interested individual or group, other than the petitioner and the sponsor, may be invited to intervene or join in the review process. APPLES urges that an interpretation of Act 877 that permits “friendly” challenges by sponsors of proposed ballot measures could result in “sham” suits that could “collaterally estop or bar challenges to a proposed ballot measure by other taxpayers.”

This court has not squarely addressed the precise issue raised by APPLES in this case. Our statutes require, prior to any initiative or referendum petition being circulated for signatures, that the Attorney General certify a popular name and ballot title for the measure. SeeArk.Code Ann. § 7–9–107 (Repl.2007). The separate subchapter at issue herein, Arkansas Code Annotated sections 7–9–501 to –506, was adopted “to provide for the timely and expeditious review of the legal sufficiency of initiative petitions by the Supreme Court.” Ark.Code Ann. § 7–9–501 (Repl.2007). It applies to “all initiative petitions submitted to the Attorney General after” the effective date of the Act. Ark.Code Ann. § 7–9–506 (Repl.2007). Section 7–9–503 provides for declarations of sufficiency by the Secretary of State and reads as follows:

(a)(1) Any Arkansas taxpayer and voter may submit a written petition to the Secretary of State requesting the determination of legal sufficiency of statewide initiative petitions.

(2) The petitioner shall notify the sponsor of the measure of the petition for determination by certified mail on the date that it is submitted to the Secretary of State.

(b) Within thirty (30) days after receipt of...