answer brief of co sos gessler
TRANSCRIPT
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DISTRICT COURT, CITY AND COUNTY OF
DENVER, COLORADO
1437 Bannock Street
Denver, CO 80202
COLORADO ETHICS WATCH and COLORADO
COMMON CAUSE,
Plaintiffs,
v.
SCOTT GESSLER, in his official capacity as
COLORADO SECRETARY OF STATE,
Defendant.
- And -
DAVID PALADINO, MICHAEL CERBO, PRO-CHOICE COLORADO PAC; PPRM BALLOT ISSUE
COMMITTEE; and CITIZENS FOR INTEGRITY, INC.,
Plaintiffs,
v.
SCOTT GESSLER, in his official capacity as
COLORADO SECRETARY OF STATE,
Defendant. COURT USE ONLY
JOHN W. SUTHERS, Attorney General
MAURICE G. KNAIZER, Deputy Attorney General*Registration Number: 05264
FREDERICK R. YARGER, Assistant Solicitor General*
Registration Number: 39479
1525 Sherman Street, 7th
Denver, CO 80203
Floor
Telephone: 303-866-5132
FAX: 303-866-4745
E-Mail: [email protected]
*Counsel of Record
Case Nos.:
2012 CV 2133 and
2012 CV 2153
Div. 280 Ctrm. 2133
ANSWER BRIEF OF THE
COLORADO SECRETARY OF STATE
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Table of Contents
Introduction ................................................................................................................... 3
Factual and Procedural Background ............................................................................ 4
Standard of Review........................................................................................................ 7
I. Plaintiffs bear the burden of separately proving each rules invalidity. .......... 7
II. In reviewing interpretations of case law, the court must not substitute
its own judgment for that of the Secretarys...................................................... 8
Argument ....................................................................................................................... 9
I. The Secretary has the duty to enact rules that comport with the law,
including the First Amendment. ........................................................................ 9
II. This dispute is limited to six rules, and each was a valid exercise of theSecretarys rulemaking authority. ................................................................... 14
A. Rule 1.7 does not modify the definition of electioneering
communication; it reflects case law construing the term............................. 16
B. Rule 1.12 clarifies the definition of issue committee, giving fair
notice to those who wish to participate in public discussion of ballot
issues. ............................................................................................................... 22
C. The major purpose requirement of Rule 1.18 is based on binding
Colorado case law............................................................................................. 29
D. Rules 7.2 and 1.10, which clarify the definition of politicalorganization, reflect a federal statutory requirement and
longstanding First Amendment principles..................................................... 32
E. Rule 18.1.8(a) defines good cause for purposes of waiving penalties
for failure to file Major Contributor Reports.................................................. 37
F. CEW and CCCs objections to Rules 4.1 and 15.6 are improper
because the rules are the subject of an ongoing appeal................................. 40
G. Plaintiffs concede that their objections to Rules 6.1, 6.2, and 14 are
moot due to additional rulemaking................................................................. 42
Conclusion .................................................................................................................... 42
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Introduction
All campaign finance lawwhether federal or statemust honor the First
Amendments boundaries. No law may curtail the constitutional rights of those who
engage in public debate, just as no court may ignore the unflagging obligation to
apply constitutional standards to state legislative enactments.1
Plaintiffs recognize this fact. They acknowledge that Colorado campaign
finance law must be understood in light of the United States Supreme Courts
landmark rulings.2And they concede that judicial precedent is binding [a]s a
matter of constitutional law. 3
Yet Plaintiffs argue that the Colorado Secretary of State, in enforcing and
administering the states campaign finance laws, must ignore the dictates of the
First Amendment because they come not from the legislature or the votersbut
from the courts. Plaintiffs assert that only the judiciary may assess the impact of
First Amendment jurisprudence.4And they claim that the Secretary cannot make
rules based on intervening case law (even from the U.S. Supreme Court).5
1 N.C. Right to Life, Inc. v. Leake, 525 F.3d 274, 277 (4th Cir. 2008).
This is
Plaintiffs central argument for invalidating rules that the Secretary properly
drafted and promulgated.
2 CEW/CCC Opening Br. at 16 (citing Citizens United v. Fed. Election Commn, 130
S. Ct. 876 (2010)).
3 Paladino Opening Br. at 25 (citingBuckley v. Valeo, 424 U.S. 1, 79 (1976)).
4 CEW/CCC Opening Br. at 14.
5 Paladino Opening Br. at 13.
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But just like any other state official, the Secretary is required to comply with
judicial mandates. Plaintiffs may disagree with First Amendment doctrine, but
their disagreement with the law does not relieve the Secretary from heeding it.
Each rule Plaintiffs challenge in this case was promulgated to meet a specific
needto explain confusing regulatory requirements, to fill gaps left by unclear
constitutional or statutory provisions, or to implement longstanding case law. Each
promotes clarity; each allows speakers to easily determine their rights and resolve
disputes quickly without chilling speech through the threat of burdensome
litigation, as the United States Supreme Court requires.6
The Court should reject Plaintiffs arguments and uphold the Secretarys
rulemaking authority.
Factual and Procedural Background
As one federal court has observed, the law of campaign finance is quite
complicated and [c]ourts, state governments, and those involved in the political
process are doing what they can to navigate this difficult terrain.7
6 Fed. Election Commn v. Wis. Right to Life, Inc. (WTRL II), 551 U.S. 449, 469
(2007) (Roberts, C.J.).
Colorados
regime of campaign finance regulation is no less complex than that of other states,
and the Secretary, seeking to improve [the] organization and readability of
7 N.C. Right to Life, Inc., 525 F.3d at 277.
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existing campaign finance rules and to clarify existing laws, initiated a
rulemaking proceeding on November 15, 2011.8
As part of the rulemaking effort, the Secretary held a hearing on December
15, 20119 and solicited extensive written comments.10 Many of the Plaintiffs in this
case, and some of their counsel, participated in those proceedings.11
The record included testimony from several members of the public who
described the difficulty of complying with Colorados campaign finance regulations.
One commenter noted, I myself have spent many hours reading about the rules,
and yet I feel totally incapable of obeying them. . . . For a small-scale project, a
political activist easily could spend far more hours navigating the assorted
campaign finance rules than the activist actually spends speaking out.12
[C]itizens, especially those who work for underfunded
organizations or toward unpopular ends[] must often seek
legal advice before engaging in political activity inColorado. The complexity of state regulations, and the
fact they often do not reflect established constitutional
Another
commenter noted that
8 R. Vol. 1, Tab 1,Proposed Statement of Basis, Purpose, and Specific Statutory
Authority at 1. (R. Vol. 1 refers to the eight documents in the official rulemaking
record. R. Vol. 2 refers to written comments submitted by the public as part of the
rulemaking.)
9 See R. Vol. 1 Tab 6; Tr. of Public Hearing (Dec. 15, 2011).
10 See R. Vol. 2.
11 See R. Vol. 2, Tab 2 (submission of Planned Parenthood of the Rocky Mountains),
Tab 20 (submission of Mark G. Grueskin), Tab 32 (submission of Colorado Common
Cause), Tab 35 (submission of NARAL Pro-Choice of Colorado), Tab 41 (submission
of Heizer Paul Grueskin LLP), and Tab 42 (submission of Colorado Ethics Watch).
12 R. Vol. 2, Tab 4 at 1 (comments of Ari Armstrong).
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law, makes it difficult for a layperson to obtain accurate
guidance in the area of campaign finance.13
After considering the rulemaking record, the Secretary issued a Notice of
Temporary and Permanent Adoption setting forth the revised rules, as well as a
comprehensive Statement of Basis, Purpose, and Specific Statutory Authority, which
explained the reason for each new rule or revision and included references to
governing law.14
On April 6, 2012, two groups of plaintiffs filed complaints challenging some of
the Secretarys new rules. For convenience, this brief refers to these plaintiff groups
as CEW and CCC (for Colorado Ethics Watch and Colorado Common Cause) and
Paladino Plaintiffs (for the group of plaintiffs that includes David Paladino). The
brief refers to all plaintiffs together as Plaintiffs.
Because some of the rules were promulgated to incorporate judicial
interpretations of the law, the Statement of Basis, Purpose, and Specific Statutory
Authority included case citations.
The Secretary answered the complaints on May 4, 2012. On June 8, Plaintiffs
filed their opening briefs.
13 R. Vol. 2, Tab 14 at 1 (comments of the Center for Competitive Politics).
14 R. Vol. 1 at 8.
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Standard of Review
I. Plaintiffs bear the burden of separately proving each rules
invalidity.
As discussed below in Part I of the Argument, the parties disagree on
whether the Secretarys rules must adhere to judicial precedent. But they agree on
some basic tenets of the standard of review15
x An agencys rule is presumed to be valid.
:
16
x The party challenging a rule has a heavy burden to establish invalidity of
the rule by demonstrating that the agency violated constitutional or
statutory law, exceeded its authority, or lacked a basis in the record for
the rule. The court cannot substitute its judgment for that of the
agency.17
x Although the courts review an agencys interpretation of the law de novo,
an agencys interpretation of governing constitutional and statutory
provisions is entitled to great deference.18
x The courts must defer to an agencys interpretation of a law that is silent
or ambiguous on a particular subject, looking only to whether the agencys
regulation is based on a permissible construction of the law.19
x An agency may promulgate rules to supplement existing law and to
explain and fill in the interstices.20 It is well-established that agenciespossess implied and incidental powers filling the interstices between
express powers to effectuate mandates.21
15 See CEW/CCC Opening Br. at 1011; Paladino Opening Br. at 1015.
16 Colo. Ground Water Commn v. Eagle Peak Farms, 919 P.2d 212, 217 (Colo. 1996).
17 Id. (internal citation omitted).
18 Table Servs., Ltd. v. Hickenlooper, 257 P.3d 1210, 1217 (Colo. App. 2011).
19 Smith v. Farmers Ins. Exch., 9 P.3d 335, 340 (Colo. 2000).
20 Henderson-Carrera v. Carlson, 547 F.3d 1237, 1246 (10th Cir. 2008).
21 Colo. Citizens for Ethics in Govt v. Comm. For the Am. Dream , 187 P.3d 1207,
1217 (Colo. App. 2008) (quoting Hawes v. Colo. Div. of Ins., 65 P.3d 1008, 1016
(Colo. 2003)).
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Within this framework, each challenged rule must be taken on its own
termsone rules validity does not depend on anothers. A case from the Colorado
Supreme Court illustrates this fact. There, the Court struck down one
administrative rule but left another in place, although both were passed as part of
the same rulemaking proceeding.22
II. In reviewing interpretations of case law, the court must not
substitute its own judgment for that of the Secretarys.
This brief therefore explains the legal
foundation of each rule, and addresses each of Plaintiffs separate arguments, on a
rule-by-rule basis.
Colorado courts have not discussed the standard for reviewing an agency rule
that is based on judicial precedent. But in other jurisdictions, courts have used
standards similar to those applied to an agencys interpretation of a statute.23
Under that approach, the interpretation of case law is reviewed de novo, while the
agencys ultimate action is reviewed under the arbitrary and capricious standard.24
Even when the agency is faced with two reasonable, but conflicting interpretations
of case law, it may pick one within the bounds of its discretion.25 It remains true
that a court is not to substitute its judgment for that of the agency.26
22 Citizens For Free Enter. v. Colo. Dept of Revenue, 649 P.2d 1054, 106970 (Colo.
1982).
23 See, e.g., Clearing House Assoc., L.L.C. v. Cuomo, 510 F.3d 105, 119 (2d Cir.2007), affd in part, revd in part, 129 S. Ct. 2710 (2009); see also Russo v. Bd. of
Trustees, Police & Firemens Ret. Sys., 17 A.3d 801, 809 (N.J. 2011).
24 See Alliance for Cmty. Media v. Fed. Commcns Commn, 529 F.3d 763, 783 (6th
Cir. 2008);Blackburn v. Reich, 79 F.3d 1375, 1377 n.3 (4th Cir.1996); Montana v.
U.S. Envtl. Prot. Agency, 941 F. Supp. 945, 956 (D. Mont. 1996).
25 Schwalier v. Panetta, No. 11-cv-126, 2012 WL 834109, at *9 (D.D.C. Mar. 14,
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Argument
First is the threshold matter of standing. Plaintiffs argue extensively that
they have standing to challenge the Secretarys rules. The Secretary, however, does
not challenge Plaintiffs standing in this matter.
So, to dispose of this case, the Court must first consider Plaintiffs claim that
the Secretary is required to ignore judicial decisions in carrying out his duty to
administer and enforce Colorados campaign finance law. The Court must then
consider the validity of each rule Plaintiffs have challenged. This brief addresses
each of these matters in turn.
I. The Secretary has the duty to enact rules that comport with
the law, including the First Amendment.
Some of the rules that Plaintiffs have challenged were promulgated to
address binding case law from Colorado and federal courts. This case therefore
presents a question not yet settled in Colorado: Through rulemaking, can the
Secretary harmonize Colorados campaign finance laws with judicial rulings under
the First Amendment? Plaintiffs claim he cannot. In their view, only the
legislature (or the voters) can shape administrative rules.27 The judiciarys
decisionseven [those of] the U.S. Supreme Courtare irrelevant.28
2012).
26 Id.; see also Montana v. EPA, 941 F. Supp. at 956.
27 Paladino Opening Br. at 13
28 Id.; see also CEW/CCC Opening Br. at 14.
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Yet in Colorado it is fundamental to our republican constitutional system
that the judiciary is a separate, coequal branch of government.29 Indeed, not only
is the judiciary coequalit is the only branch that may authoritatively interpret the
state and federal constitutions.30 So it is unclear why Plaintiffs believe the
Secretary must ignore the courts. If their view were correct, federal and state law
enforcement agencies would be exceeding their authority by implementing the
Supreme Courts decision in Miranda and requiring officers to read criminal
suspects their rights. But law enforcement policies at the federal and local levels
prove the opposite. The FBIs Legal Handbook for Special Agents specifically
mentions Miranda,31 and the Denver Police Departments Operations Manual
informs officers that [t]he Court recognizes the admissibility of any voluntary
statement made by a suspect following a proper advisement of their Constitutional
rights, before listing procedures implementing that legal precedent.32
[G]overnmental agencies, like all individuals and other entities, are obliged
to follow and apply the law as interpreted by the courts.
These
agencies recognize that they cannot ignore binding case law.
33
29People ex rel. N.R., 139 P.3d 671, 680 (Colo. 2006).
This includes the
30 Colorado Common Cause v. Bledsoe, 810 P.2d 201, 206 (Colo. 1991) (citing
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 175 (1803)).
31 Fed. Bureau of Investigation, Legal Handbook for Special Agents, 7.4.1 (Aug. 20,2003).
32 Denver Police Dept, Operations Manual, 301.02(2) (Nov. 18, 2011).
33 Lopez v. Heckler, 572 F. Supp. 26, 29 (1983), affd, 725 F.2d 1489, 1497, 1503 (9th
Cir. 1984) vacated on other grounds, 469 U.S. 1082 (1984); see also Hyatt v. Heckler,
807 F.2d 376, 379 (4th Cir. 1986); Ithaca Coll. v. Natl Labor Relations Bd., 623 F.2d
224, 228 (2d Cir. 1980).
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Secretary. As a public official, he cannot administer the law in a manner
inconsistent with judicial precedent. He must comply with a court order even if he
objects to it, as the Colorado Supreme Court demonstrated when it required one of
the Secretarys predecessors to implement a judicial redistricting plan.34
And whether to issue administrative rules is not a matter of discretion. If
gaps arise in Colorados campaign finance laws, the Secretary has a mandatory duty
to fill them. Both the Colorado Constitution and the campaign finance statutes
require the Secretary to [p]romulgate such rules . . . as may be necessary to
administer and enforce these laws.
The
Secretarys rules must therefore align with case law.
35
In doing so, however, the Secretary may not interpret the law in a vacuum,
blindly ignoring the views of the judiciary. If he does, a court will strike down his
rules. For example, the United States Court of Appeals for the Ninth Circuit
overturned several of Washington States campaign finance laws and regulations
because they conflicted with a Supreme Court ruling.36
34People ex rel. Salazar v. Davidson, 79 P. 3d 1221, 1243 (Colo. 2003).
And in Colorado, the Court
of Appeals permitted a First Amendment challenge to a policy of the Regional
Transportation District, strongly implying that the policy was unconstitutional. In
denying RTDs summary judgment motion, the court applied federal constitutional
jurisprudence and suggested that RTDs policies may have amounted to an
35 Colo. Const. art. XXVIII, 9(1)(b); C.R.S. 1-45-111.5(1).
36 Wash. Initiatives Now v. Rippie, 213 F.3d 1132, 1134, 1140 (9th Cir. 2000).
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impermissible intrusion upon First Amendment protections.37 Even the United
States Supreme Court has stepped in to invalidate Colorado laws that violated the
First Amendment.38
Attempting to rebut these principles, the Paladino Plaintiffs cite a case from
the federal district court for the District of Columbia, Van Hollen v. Federal Election
Commission.
The Secretary is therefore bound, through rulemaking, to apply
the law of the United States Supreme Court, the Tenth Circuit Court of Appeals,
and the Colorado state courts.
39 That case, currently on appeal,40
In Van Hollen, the district court considered whether the Federal Election
Commission could administratively revise a statute to account for new
circumstances, which neither the statute nor interpretive case law had
addressed.
does not apply here.
41Although the Supreme Court had str[uck] down one provision of a
statute, it left untouched the other provisions that were the subject of the
rulemaking.42 The district court noted that the Commission specifically undertook
to modify existing law to fit the changed circumstances.43
37 Holliday v. Regl Transp. Dist., 43 P.3d 676, 681 (Colo. App. 2001).
38 See Buckley v. Am. Constitutional Law Found., Inc., 525 U.S. 182 (1999).
39 No. 11-766, 2012 WL 1066717 (D.D.C. March 30, 2012).40 See Van Hollen v. Fed. Election Commn, No. 125117, 2012 WL 1758569 (D.C.
Cir. May 14, 2012).
41 Van Hollen, 2012 WL 1066717, at *1, 16.
42 Id. at *10.
43 Id. at *8 (emphasis added).
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In contrast to Van Hollen, here the Secretarys rules were not enacted to fit
the law to new circumstances not contemplated by judicial precedent. The
Secretary instead enacted the rules to apply existingcase law. Judicial decisions
from across the country recognize the authority of an administrative agency to
make rules under these circumstances.44
Furthermore, the Plaintiffs reading ofVan Hollen cannot be correct because
it forces the Secretary into an intractable dilemma. According to Plaintiffs, the
Secretary cannot promulgate rules to harmonize Colorados campaign finance law
with judicial precedent, even though he must enforce laws in a manner consistent
with applicable court decisions. So, under Plaintiffs theory, the Secretary must
either (1) enforce Colorados laws in an unlawful manner, violating his duty as a
public official, or (2) refuse to enforce the law entirely. In contrast to the Secretarys
reasoned rulemaking, which takes account of all relevant existing law, Plaintiffs
approach either disrespects the decisions of the coequal judiciary or contravenes the
will of the legislature and the voters. The Court should not adopt this unwarranted
position.
Two recent Colorado trial court decisions imply that Plaintiffs intractable
dilemma is legally compelled.45
44 See, e.g.,Alliance for Cmty. Media, 529 F.3d at 783; Montana v. EPA, 941 F.
Supp. at 957.
But the proceedings in those cases are not complete,
45 Independence Institute v. Gessler, No. 10-cv-609, 2012 WL 1439167, at *8 (D. Colo.
April 26, 2012); Colo. Common Cause v. Gessler, No. 2011CV4164 (Dist. Ct., City
and Cnty. of Denver, Nov. 17, 2011).
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and one case, Colorado Common Cause v. Gessler, is currently on appeal. This Court
should follow the prevailing practice in other jurisdictions, allowing the Secretary to
consider judicial rulings when promulgating administrative rules.
II. This dispute is limited to six rules, and each was a valid
exercise of the Secretarys rulemaking authority.
Plaintiffs two complaints implicate a total of eleven rules and request
judgment on as many as nine.46 But while CEW and CCC discuss all eleven rules in
their opening brief and request judgment on eight, the Paladino Plaintiffs brief
mentions only six. To the extent Plaintiffs wish to maintain a challenge to rules not
raised in their opening brief, they have waived their right to do so.47
Moreover, Plaintiffs objections to three rules (6.1, 6.2, and 14) are moot
because the Secretary promulgated additional regulations to address Plaintiffs
concerns. And their objections to two other rules (4.1 and 15.6) are improper
because the Colorado Court of Appeals is considering those same objections in a
pending case. In sum, then, only six of the eleven rules implicated in Plaintiffs
complaints are at issue: Rules 1.7, 1.10, 1.12, 1.18, 7.2, and 18.1.8. CEW and CCC
appear to agree, arguing that the six remaining rules under challenge should be set
aside.48And although their opening brief requests judgment on eight rules,49
46 CEW/CCC Compl. 10 (listing eleven of the Secretarys new or revised rules); id.
73 (requesting judgment as to nine rules); Paladino Compl. at 15, Demand for
Relief (requesting judgment as to seven rules).
this
47 See Grohn v. Sisters of Charity Health Servs. Colo., 960 P.2d 722, 727 (Colo. App.
1998); Flagstaff Enters. Constr. Inc. v. Snow, 908 P.2d 1183, 1185 (Colo. App. 1995).
48 See CEW/CCC Opening Br. at 2 (emphasis added).
49 Id. at 27.
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discrepancy arises because their challenge to Rules 4.1 and 15.6 is improper. As
CEW and CCC concede, those rules are the subject of ongoing appellate
proceedings, and the Secretary has stayed their implementation until the appeal is
decided.50
For the Courts convenience, below is a chart showing where each rule is
discussed in Plaintiffs two opening briefs and where, in this brief, the Secretary
responds to Plaintiffs arguments. Under a separate heading, the chart lists rules
that are not properly part of this proceeding because of mootness or the effect of a
pending appeal.
Rules Properly
Before Court
(Appendix A)
CCC/CEW Brief Paladino Brief This Brief
Rule 1.7 pp. 1418 Not Discussed II.A
Rule 1.10 pp. 2326 pp. 2833 II.D
Rule 1.12 pp. 1822 pp. 2124 II.B
Rule 1.18 pp. 1820 pp. 2526 II.C
Rule 7.2 pp. 2326 pp. 2627 II.DRule 18.1.8 pp. 2627 Not Discussed II.E
Rules Not Properly
Before the Court
(Appendix B)
CCC/CEW Brief Paladino Brief This Brief
Rule 4.1 On Appeal, Pp. 2223 Not Discussed II.F
Rule 6.1 Moot, p. 2 n.1 Moot, p. 5 II.G
Rule 6.2 Moot, p. 2 n.1 Moot, p. 5 II.G
Rule 14 Moot, p. 2 n.1 Not Discussed II.G
Rule 15.6 On Appeal, Pp. 2223 Not Discussed II.F
50 Id. at 2223.
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A. Rule 1.7 does not modify the definition of electioneering
communication; it reflects case law construing the term.
CEW and CCC argue that Rule 1.7which, as explained here, clarifies the
definition of electioneering communication in light of binding case lawis a
significant amendment to the constitutional definition found in Article XXVIII,
Section 2(7).51 They assert that the definition may not be modified by the
Secretary.52
The Secretary, however, did not modify the terms definition. Instead,
Rule 1.7 simply acknowledges longstanding precedent from the Colorado Court of
Appeals that (1) interprets the term electioneering communication and
(2) recognizes that the term must be understood in light of the First Amendment
jurisprudence of the U.S. Supreme Court. In doing so, the rule provides clarity for
potential speakers, ensuring that they have the breathing space mandated by the
First Amendment.53
Rule 1.7s predecessor, Rule 9.4, did precisely the same thing and even relied
upon the very same precedent as Rule 1.7. Plaintiffs argument that Rule 1.7
somehow modified the constitutional definition of electioneering communication
is therefore wrong. Rule 1.7 does nothing more than clarify an existing definition of
the term.
51 CEW/CCC Opening Br. at 14.
52 Id. at 18.
53 See WRTL II, 551 U.S. at 469.
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1. Rule 1.7 uses language drawn directly from
binding case law.
Harwood v. Senate Majority Fund, LLC,54 the case the Secretary followed in
promulgating Rule 1.7 (and one of the cases cited in former Rule 9.455
), was decided
over six years ago. There, the Colorado Court of Appeals held that the term
electioneering communication includes a requirement not found in the bare text of
the Colorado Constitution: according to the court, a communication is not
electioneering unless it amounts to electoral advocacy.56 To arrive at this
construction, the court first examined the intent of the voters in passing
Amendment 27, concluding that the electorate was concerned with regulating . . .
speech designed to influence the outcome of Colorado elections.57 The court also
examined the plain meaning of the term electioneering, finding it to mean
try[ing] to sway public opinion especially by the use of propaganda.58 Finally, the
court examined case law from the U.S. Supreme Court, which confirmed that an
electioneering communication requires the intent to influence voters or sway
public opinion.59
After Harwood was decided, the United States Supreme Court further
refined the definition of electioneering communication. Although Harwood
54 141 P.3d 962 (Colo. App. 2006)
55 See Colo. Secretary of State, Notice of Adoption, Amendments Adopted Sept. 19,2007, at 10; see alsoAppendix A at A-1, Former Rule 9.4.
56 Id. at 966 (internal quotation marks omitted).
57 Id. at 965.
58 Id. at 966 (quoting Websters Third New International Dictionary 731 (1986)).
59 Id. (citing McConnell v. Fed. Election Commn, 540 U.S. 93 (2003)).
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adopted an intent and effect testholding that a communication is
electioneering if the speaker intends or tries or seeks to influence voters 60
the Supreme Court held in Wisconsin Right to Life II(WRTL II) that this type of
test is too vague. Under an intent-and-effect test, identical communications could be
treated differently. Speakers wishing to influence an election could be regulated,
while speakers using the same words, but wishing only to voice opinions on public
issues, could not.61 Regulating speech based on the intent of the speaker would
therefore blanket[] with uncertainty whatever may be said, and offer[] no security
for free discussionas a result, intent-based regulation chill[s] core political
speech.62
Because of these severe constitutional problems, the Court held that the First
Amendment forbids an intent-based test and instead mandates an objective
approach. The Court held that a communication amounts to electioneering only if
it is the functional equivalent of express advocacyin other words, only if it is
susceptible of no reasonable interpretation other than as an appeal to vote for or
against a specific candidate.63
60 Id.
The Court also provided a negative definition of
electioneering. Under this safe harbor, a communication is not electioneering if it
(1) merely take[s] a position on [an] issue and asks the public to adopt that
position or urges legislators to do so; (2) does not mention an election, candidacy,
61 WRTL II, 551 U.S. at 468.
62 Id. (quotingBuckley, 424 U.S. at 43).
63 Id. at 470.
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political party, or challenger; and (3) does not take a position on a candidates
character, qualifications, or fitness for office.64
WRTL IIs holding therefore provided a roadmap to determine whether
speech amounts to electioneering. The Secretary, seeking to make Colorado
campaign finance law clear and understandable, explicitly included that road map
in Rule 1.7, just as former Rule 9.4 did. Indeed, Rule 1.7 mirrors the language of the
U.S. Supreme Court and, just like former Rule 9.4, cites WRTL IIitself.65
2. Plaintiffs misread judicial precedent in
arguing against Rule 1.7.
CEW and CCC object to the inclusion ofWRTL IIs road map in Rule 1.7.
They claim that the U.S. Supreme Courts interpretation of electioneering
communication is now obsolete.66 In making this argument, they rely on Colorado
Ethics Watch v. Senate Majority Fund,67
Colorado Ethics Watch v. Senate Majority Fund acknowledged that the [U.S.
Supreme] Court narrowed the field of speech that fell under [federal] regulation of
electioneering communications to only those ads that are susceptible of no
a case decided by the Colorado Supreme
Court just this yearand a case in which CEW was the plaintiff. Yet they ignore a
large swath of that opinion, where the court affirmed the continuing vitality of
WRTL IIs objective approach to regulating electioneering communications.
64 Id.
65 Compare Rule 1.7 with WRTL II, 551 U.S. at 470; see alsoAppendix A at A-1,
Former Rule 9.4.
66 CEW/CCC Opening Br. at 15.
67 269 P.3d 1248 (Colo. 2012).
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reasonable interpretation other than as an appeal to vote for or against a specific
candidate.68 The opinion also acknowledged that even this narrowed definition
implicates First Amendment vagueness and overbreadth concerns, and is only
tolerable because the term electioneering communications contains additional
bright-line criteria (such as the 30- or 60-day window in which the communication
occurs and the requirement that the communication reference a candidate).69
Finally, the Colorado Supreme Court recognized that electioneering
communication under Colorado law mirrors the federal definition of that term.70
Yet CCC and CEW also assert that, after the U.S. Supreme Courts 2010
decision in Citizens United v. Federal Elections Commission,
Only by ignoring this portion of the Colorado Supreme Courts analysis could CEW
and CCC argue that the WRTL IIdefinition of electioneering is now obsolete. As
the Colorado Supreme Court found, the limitation of electioneering to the
functional equivalent of express advocacy is not only still validit is
constitutionally compelled.
71 the regulation of
electioneering communications is now a disclosure-only regime. This, they say,
obviates the need for a functional equivalent test.72
68 Id. at 1257 (quoting WRTL II, 551 U.S. at 470) (emphasis added).
But CCC and CEW again base
69 Id. at 1258; see also Colo. Const., art. XXVIII 2(7)(a)(II) (describing the 30- or
60-day requirement).
70 CEW v. Senate Majority Fund, 269 P.3d at 1258 n.8.
71 130 S. Ct. 876 (2010).
72 CEW/CCC Opening Br. at 1618.
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their argument on a misunderstanding of Colorado case lawthis time, the 2010
decision In re Interrogatories.73
In that case, the Colorado Supreme Court analyzed the effect ofCitizens
United on two specific provisions of Colorado campaign finance law, Sections 3(4)
and 6(2) of Article XXVII.74 The court invalidated these provisions to the extent
they banned speech by corporations and unions. But the court said nothing about
Colorados definition of electioneering communications as interpreted by Harwood.
Indeed, CEW and CCC admit that [t]he court left the reporting requirements in
Article XXVIII undisturbed.75
And because Harwood and WRTL IIstill apply, CEW and CCC are wrong in
asserting, without record support, that Rule 1.7 drastically reduces the amount of
spending that must be disclosed as electioneering communications.
Harwood and WRTL II, therefore, remain good law.
76 Indeed, Rule
9.4, the predecessor to Rule 1.7, explicitly adopted the HarwoodWRTL II
functional equivalent test.77And administrative law judges routinely apply that
test in electioneering disputes.78
73 In re Interrogatories Propounded by Governor Bill Ritter, Jr., Concerning the
Effect of Citizens United v. Fed. Election Commn, 558 U.S. ___ (2010) on Certain
Provisions of Art. XXVIII of the Constitution of the State, 227 P.3d 892 (Colo. 2010).
Plaintiffs fail to explain how Rule 1.7 drastically
74 Id. at 894.75 CEW/CCC Opening Br. at 17.
76 Id. at 18.
77Appendix A at A-1, Former Rule 9.4.
78 See Colo. League of Taxpayers, No. OS 2009-0001, at 2 n.2 (Apr. 24, 2009) (ALJ
Decision).
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reduces disclosure when it is based on the very same case law as its predecessor.
Rule 1.7 did not change Colorados disclosure rules; it simply made them clearer.
In sum, Rule 1.7 clarifies the definition of electioneering communications in
light of a long line of case law beginning with Harwood, modified by WRTL II, and
confirmed by Colorado Ethics Watch v. Senate Majority Fund and In re
Interrogatories. The rule clarifies the definition that had already been adopted by
its predecessor, Rule 9.4, and it reflects the prevailing practice in the administrative
courts. CEW and CCC may disagree with the precedent, but their claim that the
Secretary somehow amended or modified the Colorado Constitution in enacting
Rule 1.7 is wrong. The Secretary simply incorporated the relevant court holdings,
including ALJ enforcement decisions, into one rule so that a complete definition of
electioneering communication could be found in a single location. This was a
proper exercise of the Secretarys authority, and Rule 1.7 must be upheld.
B. Rule 1.12 clarifies the definition of issue committee, giving
fair notice to those who wish to participate in public
discussion of ballot issues.
In Colorado, groups that support or oppose ballot measures must comply with
comprehensive reporting and disclosure requirements if they fall within the
definition of an issue committee.79 The Colorado Constitution defines this term,
stating that issue committees must have a major purpose of supporting or opposing
any ballot issue or ballot question.80
79 See C.R.S. 1-45-108(1)(a)(I).
80 Colo. Const., art. XXVIII, 2(10)(a)(I).
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1. Rule 1.12 reasonably defines the ambiguous
phrase a major purpose.
The broad requirement of a major purpose is difficult to consistently apply.
In one recent case, for example, the Colorado Court of Appeals disagreed with the
conclusion of an administrative law judge and held that an organization satisfied
the major purpose requirement.81 The court weighed myriad fact-specific
considerations, including the interrelationships of [the entitys] officers and
agents, the amount of time spent promoting the ballot issue, and the portion of
funds the entity expended promoting th[e] ballot issue.82 In another case, the
Court of Appeals considered a collateral challenge to a decision of the same ALJ. In
rejecting the challenge and upholding the ALJ decision, the court noted that the
ALJ had to conduct a fact-specific inquiry into the length of time the [entity] had
been in existence, its original purpose, its organizational structure, the various
issues with which it had been involved, and the amount of money expended . . . in
proportion to its annual budget.83
And even though the General Assembly has provided a statutory
methodology for analyzing an entitys major purpose, the uncertainty persists.
Under the statute, whether an entity has a major purpose of advocating ballot
issues is informed by the following:
These rambling fact-specific inquiries are hardly
a recipe for clarity.
81 See, e.g., Cerbo v. Protect Colo. Jobs, Inc., 240 P.3d 495, 504 (Colo. App. 2010.
82 Id. at 50304.
83 Independence Institute v. Coffman, 209 P.3d 1130, 1139 (Colo. App. 2008)
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(1) specifically identified objectives in . . . organizational
documents or
(2) a demonstrated pattern of conduct, which in turn is
informed by the entitys
(a) annual expenditures in support of or oppositionto a ballot issue or ballot question or
(b) [p]roduction or funding, or both, of written or
broadcast communications.84
This methodology fails to provide certainty because it does not provide a standard.
It does not specify how an entitys expenditures and production or funding of
communications are to be weighed in the determination of whether the entity has a
major purpose of supporting or opposing any ballot issue or ballot question.
Rule 1.12 fills the gap. It uses the statutory methodology to create an easy-to-
apply standard. Under the rule, if ballot-issue advocacy amounts 30% of an entitys
total budget, the entity has a major purpose of supporting or opposing any ballot
issue or ballot question and is therefore an issue committee subject to reporting
and disclosure requirements. As one member of the public testified at the
rulemaking hearing, I do like the idea that theres a clear rule here. There hasnt
been a test at all. . . . And so . . . youre running the risk that youre going to be
dragged into court . . . . [Rule 1.12] would at least have a bright-line test . . . .85
And the 30% test is reasonable. As the Secretary explained at the rulemaking
hearing, Rule 1.12 honors the difference between a major purpose and the major
purpose.86
84 C.R.S. 1-45-103(12)(b).
Under the First Amendment, a political committee must have the major
85 Tr. of Public Hearing, 114:413 (Dec. 15, 2011).
86 Id. at 122:89 (emphasis added).
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purpose of supporting or opposing a candidate,87 meaning that it must spend the
majority, or the preponderance, of its budget on express advocacy. 88 Issue
committees, meanwhile, must meet the a major purpose test. The 30% threshold
of Rule 1.12 recognizes the distinction. It is less strict than the 50% test for political
committees, but it still ensures that a meaningful portion of an issue committees
budget is spent on ballot-issue advocacy. Plaintiffs may have a different policy
preference, but the 30% test was well within the exercise of the [Secretarys]
discretion based upon [his] expertise,89
Contrary to Plaintiffs arguments, the Secretary did not ignore the General
Assemblys definition of a major purpose in crafting Rule 1.12.
and it is therefore valid.
90 Indeed, the rule
is explicitly based upon the General Assemblys statutory methodology: annual
expenditures and [p]roduction or funding, or both, of written or broadcast
communications.91
87Buckley, 424 U.S. at 79.
Promulgating this clarifying rule was therefore well within the
Secretarys authorityand the Colorado Court of Appeals agrees. In a 2010
decision, the court independently interpreted the a major purpose requirement for
issue committees because the Secretary of State [had not] defined the term by
88 Colo. Right to Life Comm., 498 F.3d at 1152 (citing Mass. Citizens for Life, Inc.,
479 U.S. at 252 n.6, 262).
89 Citizens For Free Enter., 649 P.2d at 1063.
90 See CEW/CCC Opening Br. at 20.
91 Compare C.R.S. 1-45-103(12)(b)(II) with Rule 1.12.
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regulation.92
2. The percentage-based approach complies withthe First Amendment and serves the interests
of grassroots organizations.
The court would not have pointed out the absence of a definitional
regulation had it thought the Secretary lacked power to promulgate one.
Moreover, Plaintiffs objection that Rule 1.12s percentage-based approach
favors speakers with large budgets93 misunderstands the requirements of the
United States Constitution. Under the First Amendment, political speech cannot
be limited based on a speakers wealth.94 This has been true since 1976, when the
United State Supreme Court rejected the premise that the Government has an
interest in equalizing the relative ability of individuals and groups to influence the
outcome of elections.95 To regulate based on the impermissible criterion of wealth
would allow suppression of political speech based on the speakers identity,
something the First Amendment generally forbids, especially in the context of
political speech.96 Indeed, the Supreme Court has repeatedly frowned on
regulations that discriminate based on the content of the speech or the identity of
the speaker.97
92 Cerbo, 240 P.3d at 501.
Rule 1.12s 30% threshold provides a clear guideline while staying
wealth-neutral (and therefore identity-neutral), as the First Amendment requires.
93 See CEW/CCC Opening Br. at 21; Paladino Opening Br. at 22.94 Citizens United, 130 S. Ct. at 904.
95 Id. (quotingBuckley v. Valeo, 424 U.S. 1, 48 (1976)).
96 Id.
97 Los Angeles Police Dept. v. United Reporting Pub. Corp., 528 U.S. 32, 47 n.4
(1999) (Stevens, J., dissenting).
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And contrary to Plaintiffs assertions, the threshold actually promotes the
interests of organizations with modest resources. One public commenter noted that
[t]he grassroots activist, with limited time and funds, suffers the most from having
complicated, time-consuming regulations and draconian penalties over his or her
head.98
3. The 30% threshold is supported by judicial
precedent.
The 30% rule allows grassroots organizations to ensure compliance without
breaking their budgets.
This percentage-based approach is also rooted in case law. Colorado decisions
addressing the major purpose requirement focus on theproportion of spending,
not an absolute amount. For example, in 2010 the Colorado Court of Appeals held
that an organization has a major purpose of supporting a ballot issue if such
support constitutes a considerable or principalportion of the organizations total
activities.99 The court found this requirement to be satisfied because the entity at
issue spen[t] three-fourths of all of the funds it has ever expended promoting that
ballot issue.100
And the 30% standard follows guidance from the United States Supreme
Court, which forbids amorphous campaign finance regulations.101
98 R. Vol. 2, Tab 26.
Under the First
Amendment, regulations must be objective, entail[ing] minimal if any discovery, to
99 Cerbo, 240 P.3d at 501 (quoting N.C. Right to Life, Inc. v. Leake, 525 F.3d 274,
329 (4th Cir. 2008) (Michael, J., dissenting)) (emphasis added).
100 Id. at 504.
101 WRTL II, 551 U.S. at 469.
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allow parties to resolve disputes quickly without chilling speech through the threat
of burdensome litigation.102 They must also eschew the open-ended rough-and-
tumble of factors, which invit[es] complex argument in a trial court and a virtually
inevitable appeal.103 Otherwise, even reporting and disclosure obligations may
create a disincentive for [] organizations to engage in political speech and
infringe[] . . . First Amendment activities.104As demonstrated by cases construing
Colorados a major purpose requirementcases that depend on fact-specific,
multi-prong inquiries105
Plaintiffs, without mentioning this case law, imply that an absolute dollar
amount might work better, arguing that a percentage-based approach would allow a
large, well-funded entity to spend massive sums of money without being
classified as an issue committee.
Rule 1.12 is necessary to avoid the burdensome litigation
that the First Amendment forbids. The bright-line 30% threshold of Rule 1.12
allows potential entities to quickly and easily determine whether they are issue
committees subject to reporting and disclosure requirements.
106 But because a major purpose connotes the
principalportion of the organizations total activities,107
102 Id.
the Secretary acted
103 Id. (quoting Jerome B. Grubhart, Inc. v. Great Lakes Dredge & Dock Co., 513
U.S. 527, 547 (1995)).104 Fed. Election Commn v. Mass. Citizens for Life, Inc., 479 U.S. 238, 25455
(1986).
105 See, e.g., Cerbo, 240 P.3d at 50304; Independence Institute, 209 P.3d at 1139.
106 See CEW/CCC Opening Br. at 2122; Paladino Opening Br. at 22.
107 Cerbo, 240 P.3d at 501 (emphasis added).
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within the bounds of his discretionand within the bounds of the case lawin
adopting the 30% rule. Plaintiffs disagreement with the Secretarys approach does
not make the approach unreasonable. Plaintiffs, just like courts, are forbidden from
substitut[ing their] judgment for that of the agency.108
4. Rule 1.12 does not change the triggering event
for disclosure requirements.
Finally, Plaintiffs argue that Rule 1.12 changes the triggering event for
reporting and disclosure, excusing issue committees from complying with these
requirements until the end of an election cycle.109 This is wrong. Just as the
General Assemblys test for a demonstrated pattern of conduct110
C. The major purpose requirement of Rule 1.18 is based on
binding Colorado case law.
is backward-
looking, so is the test in Rule 1.12. An entity cannot demonstrate a pattern of
conduct until the conduct has occurred. The Rule does not depart from the Colorado
Constitution or C.R.S. 1-45-103(12)(b)(II). It merely provides objective criteria by
which to test an entitys status as an issue committee. Rule 1.12 is therefore
within the Secretarys rulemaking authority and must be upheld.
Like the federal government, Colorado regulates political committees
entities that support or oppose the nomination or election of one or more
candidates.111
108 Colo. Ground Water Commn, 919 P.2d at 217.
In the 1976 decisionBuckley v. Valeo, the United States Supreme
109 See CEW/CCC Opening Br. at 22; Paladino Opening Br. at 23.
110 C.R.S. 1-45-103(12)(b)(II).
111 Colo. Const., art. XXVIII, 2(12)(a).
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Court mandated that an entity could be regulated as a political committee only if
it met an important constitutional requirement: its major purpose must be
supporting or opposing the nomination or election of political candidates.112
The Paladino Plaintiffs, citingBuckley, concede that [a]s a matter of
constitutional law, a political committee must have the major purpose to support or
oppose candidates.
By
incorporatingBuckleys major purpose test into Colorados definition of political
committee, Rule 1.18 simply says explicitly what the First Amendment has
required for nearly forty years.
113 This concession should be the end of the matter. Yet
Plaintiffs proceed to claim that Rule 1.18 contravenes the will of the voters and
unlawfully engrafts the First Amendments major purpose requirement into
Colorado campaign finance law.114
Unfortunately for Plaintiffs, the Tenth Circuit and the Colorado Court of
Appeals have rejected these arguments.
In Colorado Right to Life Committee, Inc. v. Coffman, the Tenth Circuit
affirmed that Colorado cannot regulate as a political committee an entity that fails
the major purpose test.115
112Buckley, 424 U.S. at 79; see also Fed. Election Commn v. Mass. Citizens for Life,
Inc., 479 U.S. 238, 252 n.6 (1986).
And shortly after the Tenth Circuit weighed in on the
issue, the Colorado Court of Appeals appliedBuckleys major purpose test to a
113 Paladino Opening Br. at 25 (emphasis added) (quotingBuckley, 424 U.S. at 79).
114 See CEW/CCC Opening Br. at 19; Paladino Opening Br. at 26.
115 Colo. Right to Life Comm., Inc. v. Coffman, 498 F.3d 1137, 1153 (10th Cir. 2007).
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Colorado entity.116 InAlliance for Colorados Families v. Gilbert, the court had to
decide if an unincorporated nonprofit association was a political committee, and
was subject to retroactive contribution limits, because it produced a political radio
advertisement.117 The court of appeals recognized that the major purpose test is
required by Buckley.118And because the administrative law judge had failed to
make any factual finding regarding [the major purpose test], the court remanded
the case.119
In these cases, the Tenth Circuit and the Colorado Court of Appeals
recognized that Colorados definition of political committee includes the major
purpose requirement. Plaintiffs have not suggested thatBuckley or the case law
applying it is invalid, and they therefore lack a legitimate argument for overturning
Rule 1.18. BecauseBuckley, Colorado Right to Life Committee, andAlliance for
Colorados Families all require the major purpose test, Rule 1.18 is a reasonable
regulation reflecting an existing legal requirement.
Plaintiffs nonetheless object to the two criteria Rule 1.18 uses to determine
whether an entity meets the major purpose requirement: (1) the objectives of the
entity set forth in its organizing documents and (2) whether [a]nnual expenditures
made to support or oppose [a] nomination or election . . . are a majority of the
organizations total spending during the same period. These criteria, however, are
116Alliance for Colo.s Families v. Gilbert, 172 P.3d 964 (Colo. App. 2007).
117 Id. at 96667.
118 Id. at 972 (emphasis added).
119 Id. at 972 (emphasis added).
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drawn directly from cases applying the major purpose test. As the Tenth Circuit has
recognized, the Supreme Court applies the very same two-pronged approach: (1)
examination of the organizations central organizational purpose; or (2) comparison
of the organizations independent spending with overall spending to determine
whether the preponderance of expenditures are for express advocacy or
contributions to candidates.120And these requirements are the same as those the
General Assembly used to define the a major purpose requirement for issue
committees.121
Rule 1.18 therefore does nothing more than acknowledge requirements that
already exist under Colorado law and the United States Constitution. Plaintiffs
arguments against Rule 1.18 cannot eliminate these requirements, and they provide
no basis for overturning the Secretarys authority to administer state campaign
finance law within the boundaries of the First Amendment.
Plaintiffs cannot argue that Rule 1.18 is unreasonable when it
reflects both binding case law and a statutory methodology endorsed by the
legislature.
D. Rules 7.2 and 1.10, which clarify the definition of political
organization, reflect a federal statutory requirement and
longstanding First Amendment principles.
In 2007, the General Assembly enacted statutes regulating political
organizations. Under these statutes, a political organization is an entity that
(1) meets the definition in section 527(e)(1) of the federal Internal Revenue Code of
120 Colo. Right to Life Comm., 498 F.3d at 1152 (citing Mass. Citizens for Life, Inc.,
479 U.S. at 252 n.6, 262).
121 C.R.S. 1-45-103(12)(b).
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1986 and (2) is engaged in influencing or attempting to influence the selection,
nomination, election, or appointment of any individual to any state or local public
office.122
Plaintiffs object to Rules 7.2 and 1.10, which clarify these two requirements.
Their objections, however, are off the mark. They fail to acknowledge the federal
statute defining 527 organizations, which includes the major purpose test used in
Rule 7.2, and they ignore longstanding First Amendment jurisprudence interpreting
the phrase influencing or attempting to influence to mean express advocacy,
which Rule 1.10 acknowledges.
1. Rule 7.2 reflects the plain requirement of
26 U.S.C. 527.
Plaintiffs assert that [t]he addition of a major purpose threshold [in Rule
7.2] narrows the range of groups that would be required to disclose.123
Section 527 imposes a primary purpose requirement on political
organizations: an entity meets the 527 definition only if it is organized and
They
provide no evidence to support this assertion, even though they had the opportunity
to do so at the December rulemaking hearing. And their lack of factual support
arises for a good reasonthe assertion is simply incorrect. Rule 7.2 makes no
additions to the law; it merely makes explicit one requirement of 26 U.S.C. 527,
the federal statute on which Colorados definition of political organization is
based.
122 C.R.S. 1-45-103(14.5).
123 CEW/CCC Opening Br. at 24; see also Paladino Opening Br. at 267.
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operatedprimarily for the purpose of . . . influencing or attempting to influence an
election.124
Plaintiffs cannot contend that 527s primary purpose and Rule 7.2s
major purpose are two different things. The plain meaning of the terms primary
and major are identical. As an adjective, primary means [f]irst or highest in
rank, quality, or importance.
Rule 7.2, in requiring a political organization to have as its major
purpose influencing or attempting to influence elections, does nothing more than
incorporate the primary purpose requirement of 527.
125And major means [g]reater than others in
importance or rank.126
Plaintiffs therefore have no valid objection to the rule. Section 527 has
always been the basis for Colorados definition of political organization, and it
continues to be. Rule 7.2 simply provides clarity.
Given the words linguistic equivalence, it was within the
Secretarys rulemaking discretion to use the more common word major, while
keeping the primary purpose requirement of Section 527 intact.
The major or primary purpose requirement is not just a matter of
statutory policy; it is based on the First Amendment. InBuckley, the U.S. Supreme
Court adopted a major purpose test to trigger reporting and disclosure
requirements for advocacy groups, thereby ensuring that only campaign related
organizations would be subject to comprehensive regulation.127
124 26 U.S.C. 527(e)(1)(2) (emphasis added).
This requirement
125Am. Heritage Coll. Dictionary 1106 (4th ed. 2002).
126 Id. at 834.
127 424 U.S. at 79.
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applies not only to political committees, but also to political organizations,128
By enacting Rule 7.2, the Secretary ensured that Colorado citizens will have
easy access to all information relevant to the definition of political organization.
Rather than being forced to flip back and forth between judicial precedent, federal
statutes, Colorado statutes, and administrative regulations, they may now look in a
single place to understand how the definition works. The rule does not, therefore,
neglect the voters objective of maximizing disclosure, as Plaintiffs allege.
as
527 acknowledges.
129
2. Rule 1.10 reflects forty years of First
Amendment jurisprudence.
Putting aside the fact that Colorado law governing political organizations was
passed by the General Assembly, not the voters (and Rule 7.2 therefore does not
implicate the voters objectives, as Plaintiff claim), Plaintiffs have ignored 527
entirely. Indeed, they neglect even to cite its language in their briefs. Rule 7.2s
major purpose requirement does not depart from Colorado law; it follows that law.
The rule must be upheld.
The key words from Colorados definition of political organization
influencing or attempting to influencehave long been the subject of First
Amendment scrutiny. Nearly forty years ago inBuckley v. Valeo, the United States
128 See Natl Fedn of Republican Assemblies v. United States, 218 F. Supp. 2d 1300,
1332 (S.D. Ala. 2003), vacated on other grounds, Mobile Republican Assembly v.
United States, 353 F.3d 1357 (11th Cir. 2003).
129 Paladino Opening Br. at 27 (emphasis added).
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Supreme Court analyzed a nearly identical phrase used in a federal statute: for the
purpose of . . . influencing.130
The phrase, like the one in Colorados statute, was used to determine when
disclosure and reporting obligations were triggered.131 The Court held that the
ambiguity of this phrase . . . poses constitutional problems, observing that it
creates a potential for regulating both issue discussion [which the First
Amendment broadly protects] and advocacy of a political result [which may be
regulated more stringently].132 The Court therefore adopted a narrowing
construction, holding that the phrase must only reach activity that expressly
advocate[s] the election or defeat of a clearly identified candidate.133 The Court
interpreted another phrase, relative to a clearly defined candidate in a similar
manner,134
Rule 1.10 makes explicit whatBuckley has long required. The rule
incorporates the express advocacy standard into the ambiguous phrase
influencing or attempting to influence, using language fromBuckley to avoid the
phrases constitutional problems. The General Assembly, in using words previously
interpreted by the courts, is presumed to adopt the construction which prior
suggesting that it is the word influencethe same word used in the
Colorado definition of political organizationthat causes the ambiguity.
130 424 U.S. at 7482.
131 Id. at 7476.
132 Id. at 77, 79.
133 Id. at 80.
134 Id. at 4142.
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judicial decisions have placed on particular language.135 Rule 1.10 does not,
therefore, directly contradict [] statutory provisions.136
Plaintiffs object to this clarification, arguing that the phrase influencing or
attempting to influence is meant to be broad.
It simply clarifies them.
137
As the Colorado Supreme Court recently observed, Colorado law must be
construed to avoid the vagueness and over-breadth concerns fromBuckley that are
the bedrock of all campaign finance political speech jurisprudence.
But they provide no legal
authority or record support for this argument. And their assertion merely restates
the constitutional problem thatBuckley solved: influencing or attempting to
influence is impermissibly vague and must be given a narrowing construction.
Plaintiffs may wish the constitutional lines were drawn differentlyand they may
wish to ignore nearly forty years of judicial precedentbut the Secretary cannot
disregard the First Amendment in exercising his power to administer the states
campaign finance laws.
138
E. Rule 18.1.8(a) defines good cause for purposes of waiving
penalties for failure to file Major Contributor Reports.
This is
precisely what Rule 1.10 accomplishes.
CEW and CCC object to Rule 18.1.8(a) on the ground that it seeks to
expressly overrule the statutory scheme governing Major Contributor Reports. 139
135 Vaughan v. McMinn, 945 P. 2d 404, 409 (Colo. 1997).
136 CEW/CCC Opening Br. at 24.
137 See id.; Paladino Opening Br. at 30.
138 Colorado Ethics Watch, 269 P.3d at 1258.
139 CEW/CCC Opening Br. at 26.
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This is untrue. Rule 18.1.8(a) does not overrule any statutes. It simply states that
penalties for failing to file a Major Contributor Report cease accruing when a
regularly-scheduled reportwhich includes the same information contained in a
Major Contributor Reportis filed. The Rule recognizes that once a reporting
deficiency is cured, continuing sanctions are unwarranted. CEW and CCC also
claim that the Secretary lacks power to pass this Rule. But they ignore that the
Colorado Constitution specifically grants the Secretary this power.
Major Contributor Reports are disclosures that must be filed by candidate
committees, political committees, issue committees, and political parties within
thirty days of an election.140 In these reports, entities must list any contribution of
one thousand dollars or more they received within the thirty-day time period. Id.
The reports must be filed no later than twenty-four hours after receipt of said
contribution.141
Under C.R.S. 1-45-111.5(1.5)(c), an entity that fails to file any report
including a Major Contributor Reportis subject to a sanction of up to $50 per day
for each day that [the report] . . . is not filed by the close of business on the day due.
But under the Colorado Constitution, the Secretary may, upon receiving an appeal
of a sanctions order, set aside or reduce the penalty [for failure to file a report]
upon a showing of good cause.142
140 C.R.S. 1-45-108(2.5).
Section 1-45-111.5(1.5)(c) acknowledges this
141 Id.
142 Colo. Const., art. XXVIII, 10(2)(c).
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authority, stating that [i]mposition of any penalty . . . shall be subject to all
applicable requirements specified in section 10 of article XXVIII of the state
constitution governing the imposition of penalties.
To implement the appeal provisions of article XXVIII, 10, the Secretary has
created a system of uniform requests for waiver that a person or entity may file
with the Secretary (or an administrative law judge) after receiving a penalty for
violation of the campaign finance laws.143
Rule 18.1.8(a) is part of this framework. And contrary to the views of CEW
and CCC, the Rule does nothing more than define one circumstance in which a
failure to file a Major Contributor Report will be excused for good cause under
article XXVIII, 10(2)(c). Rule 18.1.8(a) states that [p]enalties assessed for failure
to timely file a Major Contributor Report . . . stop accruing on the date that the
contribution is first disclosed, either on the Major Contributor Report or the
regularly-scheduled Report of Contributions and Expenditures. This rule
recognizes that, once a regularly-scheduled report is filed, any harm flowing from a
failure to file a Major Contributor Report is cured. It makes little sense to continue
The Secretarys request-for-waiver rules
explicitly define the circumstances under which various penalties will be waived. In
doing so, the rules create clarity and predictability for those seeking to engage in
public debate but fearing that simple mistakes will lead to large, unpredictable
penalties.
143 See Rule 18.1.
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penalizing an entity when the public has received all the information it is entitled
to.
CEW and CCC may suggest that some entities will choose to deliberately
withhold Major Contributor Reports, believing that the $50 per day penalty is worth
paying to temporarily maintain the secrecy of major contributions. But this scenario
was possible before the enactment of Rule 18.1.8(a): if an entity desired to hide its
major contributions, it could do so if it were willing to accrue penalties under
Section 1-45-111.5(1.5)(c) until it filed a Major Contributor Report. Of course, to
maintain the secrecy of its major contributions, the entity would also be required to
delay filing a regularly-scheduled report, and would therefore incur additional
penalties, just as it would under Rule 18.1.8(a).
Rule 18.1.8(a) therefore does not excuse bad behavior any more than Section
1-45-111.5(1.5)(c) does; the Rule merely clarifies when penalties will be set aside for
good cause, providing predictability for those entities that inadvertently fail to
provide information in a Major Contributor Report that is later disclosed in a
regularly-scheduled report. This clarification of the constitutional good cause
standard is within the Secretarys rulemaking authority and should be upheld.
F. CEW and CCCs objections to Rules 4.1 and 15.6 are improper
because the rules are the subject of an ongoing appeal.
In their opening brief, CEW and CCC raise objections to Rules 4.1 and 15.6.
They raise these objections while at the same time acknowledging that Rule 4.1 is
subject to an ongoing appeal and both Rule 4.1 and Rule 15.6 have been stayed
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pending the outcome of the appeal. 144
The objections to Rules 4.1 and 15.6 are not ripe. The Secretary has stayed
the implementation of both rules unless or until the Colorado appellate courts
reverse the District Courts decision.
Both CEW and CCC are taking part in that
very appeal.
145As a result, there is no reasonable
possibility of enforcement or threat of enforcement.146 Because the Secretary has
not implemented the rules, and will not implement them unless the court of appeals
decides the pending appeal in his favor, Plaintiffs objections are premature and do
not present a justiciable controversy ripe for declaratory adjudication.147
Moreover, even if Plaintiffs claims were ripe, this Court cannot preempt the
decision of the court of appeals. A trial courts decision is not binding on an
appellate court,148 and this is especially true in administrative review proceedings,
where an appellate court is in the same position as a trial court, and it applies the
same standard of review.149 Because the same issues are already pending in
another case, this court cannot enter judgment as to Rules 4.1 or 15.6.150
144 CEW/CCC Opening Br. at 2223.
145 Rules 4.1 and 15.6.
146Developmental Pathways v. Ritter, 178 P. 3d 524, 534 (Colo. 2008).
147 Id. at 535 (internal quotation marks omitted).
148 See Skyland Metro. Dist. v. Mountain West Enterprise, LLC, 184 P.3d 106, 115
(Colo. App. 2007).
149 Eason v. Bd. of Cnty Commrs, 70 P.3d 600, 609 (Colo. App. 2003).
150 See Sprenger v. Pub. Serv. Commn of Md., 910 A.2d 544, 552 & n.6 (Md. App.
2006).
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G. Plaintiffs concede that their objections to Rules 6.1, 6.2, and 14
are moot due to additional rulemaking.
Plaintiffs raised objections to Rules 6.1, 6.2, and 14 in their complaints,
claiming that those rules lifted the restriction on amounts of money that one level
of a political party may transfer to any other.151 In response, the Secretary passed
Rule 6.3, which clarifies that county-level political parties in home-rule jurisdictions
cannot transfer certain funds to other levels of the political party. The Plaintiffs
agree that Rule 6.3 has mooted their objections to Rules 6.1, 6.2, and 14,152 and they
no longer request judgment as to those rules.153
Conclusion
The Secretary promulgated the rules at issue in this case to improve
organization and readability, clarify existing laws and regulations, and address
questions arising under State campaign and political finance laws.154 During the
rulemaking proceeding, one member of the public described the sheer cost (and
arguably need) to hire a professional reporting service to comply with campaign
finance regulations, and the risk of making a costly mistake that . . . will spook
volunteers (like me) from stepping up to leadership roles on campaigns.155
151 Paladino Compl. 23; see also CEW/CCC Compl. 6573.
Without
simplified rules, the tangled web of regulations governing political speech will
152 CEW/CCC Opening Br. at 2 n.1; Paladino Opening Br. at 5 & n.1.
153 See CEW/CCC Opening Br. at 27.
154 R. Vol. 1, Tab 1,Proposed Statement of Basis, Purpose, and Specific Statutory
Authority at 1.
155 See R. Vol. 2, Tab 17 (comments of Becky Fuller).
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continue to deter individuals and small organizations from making their voices
heard in the electoral process.
The First Amendment demands vigilan[ce], even against . . . modest
diminution of speech.156
The Secretary respectfully requests the Court to enter judgment in his favor
and conclude that each rule Plaintiffs have challenged is valid and enforceable.
Plaintiffs arguments, however, would hamstring the
Secretary, preventing him from vigilantly carrying out his duty to administer and
enforce Colorados campaign finance laws and denying him the ability to clarify
regulations in light of case law from the coequal judiciary.
JOHN W. SUTHERS
Attorney General
/s/
MAURICE G. KNAIZER, 05264*
Deputy Attorney General
Public OfficialsState Services Section
FREDERICK R. YARGER, 39479*
Assistant Solicitor General
Office of the Attorney General
Attorneys for Defendant Secretary of State
*Counsel of Record
156 Mass. Citizens for Life, Inc., 479 U.S. 238, 26465.
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CERTIFICATE OF SERVICE
This is to certify that I have duly served the within ANSWER BRIEF OF THE
COLORADO SECRETARY OF STATE upon all parties herein by LexisNexis File and Serve
at Denver, Colorado, this 3rd day of July, 2012 addressed as follows:
Mark G. Grueskin, No. 14621Heizer Paul Grueskin LLP
2401 15th Street #300
Denver, CO [email protected]
Attorneys for David Paladino et al
Luis ToroMargaret Perl
Colorado Ethics Watch
1630 Welton Street #415Denver, CO 80202
[email protected]@coloradoforethics.org
Attorneys for Colorado Ethics WatchJennifer H. Hunt
Hill & Robbins, P.C.
1441 18th Street #100Denver, CO 80202
Attorneys for Colorado Common Cause
/s/ Debbie Bendell, paralegal