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Sampson v. Buescher

November 9, 2010



The opinion of the court was delivered by: Hartz, Circuit Judge.


Before BRISCOE, Chief Circuit Judge, MCKAY, and HARTZ, Circuit Judges.

There is nothing novel about requiring election campaign committees in this country to file periodic reports, including disclosures of names of contributors and the amount contributed. Many judicial decisions have considered whether particular reporting and disclosure requirements can withstand scrutiny under the First Amendment. The great bulk of those decisions, however, concern committees that are working for or against candidates for public office. Reporting requirements are justified as necessary to police whether anyone is contributing more than allowed to a candidate (the contribution limits being justified, in turn, by the need to prevent quid pro quo corruption, and the appearance of corruption) and to give the electorate useful information concerning the candidate's views and those to whom the candidate is likely to be beholden.

At issue on this appeal is a different type of campaign committee, not one seeking to elect or defeat a candidate, but one seeking to prevail on a ballot initiative. A citizen voting on a ballot initiative is not concerned with the merit, including the corruptibility, of a person running for office, but with the merit of a proposed law or expenditure, such as a bond issue. As a result, the justifications for requiring disclosures in a candidate election may not apply, or may not apply with as much force, to a ballot initiative. Disclosure may facilitate ad hominem arguments - for whatever they are worth - on the merits of the ballot initiative; but there is no need for concern that contributors can change a law enacted through a ballot initiative as they can influence a person elected to office.

Colorado law requires that any group of two or more persons that has accepted or made contributions or expenditures exceeding $200 to support or oppose a ballot issue must register as an issue committee and report the names and addresses of anyone who contributes $20 or more. Plaintiffs are residents of Parker North, a neighborhood of about 300 homes in an unincorporated part of Douglas County, Colorado, who opposed the annexation of their neighborhood into the Town of Parker. Plaintiffs had raised less than $1,000 in monetary and in-kind contributions for their cause when supporters of annexation challenged the failure of the opponents to register as an issue committee.

Plaintiffs contend that Colorado reporting requirements unconstitutionally burden their First Amendment right to association. We agree that Colorado law, as applied to Plaintiffs, has violated their constitutional freedom of association.. There is virtually no proper governmental interest in imposing disclosure requirements on ballot-initiative committees that raise and expend so little money, and that limited interest cannot justify the burden that those requirements impose on such a committee.


A. Colorado Law

The Colorado Constitution defines issue committee as:

any person, other than a natural person, or any group of two or more persons, including natural persons: (I) [t]hat has a major purpose of supporting or opposing any ballot issue or ballot question; [and]*fn1 (II) [t]hat has accepted or made contributions or expenditures in excess of two hundred dollars to support or oppose any ballot issue or ballot question.

Colo. Const. art. XXVIII, § 2(10)(a)(I)-(II). All monetary contributions received by an issue committee must be deposited in a separate account in the committee's name; no contribution or expenditure exceeding $100 may be in cash. Id. § 3(9), (10). The Colorado Fair Campaign Practices Act (the Campaign Act) requires an issue committee to register with the appropriate officer (usually the Secretary of State or County Clerk) before accepting contributions. See Colo. Rev. Stat. § 1-45-108(3). The statement of registration must include the name of the issue committee; the name of a registered agent; the committee's address and telephone number; the identities of all affiliated candidates and committees; and the "purpose or nature of interest" of the committee. Id.

Issue committees also must report all contributions and expenditures, including the name and address of any person who contributes $20 or more, and the occupation and employer of any person who contributes $100 or more. See id. § 1-45-108(1)(a)(I)-(II). Reports required to be filed with the county clerk (such as the reports in this case, see id. § 1-45-109(1)) must be filed 21 days before the election, on the Friday before the election, and 30 days after the election; and annually in off-election years. See id. § 1-45-108(2)(a)(II). They must include the committee's fund balance at the beginning of the reporting period, the total amounts of contributions and expenditures during the reporting period, and the name and address of the financial institution used by the committee. See id. § 1-45-108(2)(b).

The reports are public records and are made available on the Secretary of State's website. See id. § 1-45-109(4)--(5). Failure to comply with the registration and reporting requirements can result in civil penalties "of fifty dollars per day for each day that a statement or other information required to be filed [by the Constitution or the Campaign Act] is not filed by the close of business on the day due," Colo. Const. art. XXVIII, § 10(2)(a), although the Secretary or an administrative law judge (ALJ) can set aside or reduce a penalty upon a showing of good cause. See id. § 10(2)(b), (c).

The Campaign Act directs the Secretary of State to "promulgate such rules... as may be necessary to enforce and administer any provision of [the Act]." Colo. Rev. Stat. § 1-45-111.5. The rules are 19 pages long. Among other things, the rules require that each contribution or expenditure of $20 or more be listed separately, see 8 CCR 1505-6 §§ 4.1, 4.4, and that any change in the information disclosed in the registration form be reported within five days, see id. § 3.1. The Secretary also publishes the Colorado Campaign and Political Finance Manual, which has 41 pages of text and another 51 pages of appendices that reproduce the applicable constitutional, statutory, and regulatory provisions. The Secretary's website acknowledges that "[t]he laws and rules governing campaign finances are complex." Aplt. App., Vol. II at 750. The Manual states that it "provides guidelines and helpful tips for proper compliance with the law." Id. at 585. But it is to be used "for reference and training purposes only and should not be used as a substitute for legal advice." Id. (full capitalization omitted). Indeed, if the Secretary cannot answer a question, he recommends retaining an attorney. See id. at 763, 765 (deposition of Christi Heppard, head of the campaign-finance department of Secretary's office).

Private citizens can enforce these provisions by filing with the Secretary of State a written complaint alleging a violation of the registration or reporting requirements. See Colo. Const. art. XXVIII, § 9(2)(a). Within three days of filing, the Secretary must refer the complaint to an ALJ who "shall hold a hearing within fifteen days of the referral of the complaint, and shall render a decision within fifteen days of the hearing." Id. If the ALJ determines that a violation occurred, the judge's decision "shall include any appropriate order, sanction, or relief authorized" under Article XXVIII of the state constitution. Id. Further, a party in such a proceeding may be entitled to recover its attorney fees from an opposing attorney or party who brought or defended an action without "substantial justification." Colo. Rev. Stat. § 1-45-111.5(2). The ALJ's decision "shall be final and subject to review by the [Colorado] court of appeals." Colo. Const. art. XXVIII, § 9(2)(a). The Secretary can enforce the decision; but if the Secretary does not file an enforcement action within 30 days of the decision, the private complainant may institute a private action for enforcement. See id. "The prevailing party in a private enforcement action shall be entitled to reasonable attorneys fees and costs." Id.

B. The Parker North Annexation

In 2005, Parker North resident David Hopkins began to gather signatures for a petition seeking the annexation of Parker North into the Town of Parker, Colorado. He submitted the petition with the necessary signatures to the Parker Town Council at a meeting on February 21, 2006. After the meeting Plaintiff Norman Feck wrote a letter to Parker's mayor and council opposing annexation and distributed a copy of his letter to every household in Parker North. Plaintiffs Karen Sampson and Tom Sorg later met with Feck and several other neighbors, and joined Feck's efforts. Sorg discovered that residents could remove their signatures from Hopkins's annexation petition and encouraged neighbors to do so. He also started an e-mail discussion group for all Parker North residents to debate annexation. Several Plaintiffs walked the neighborhood to discuss annexation with residents, wrote letters, and developed flyers that they distributed. Plaintiff Wes Cornwell owned a printing shop and printed "No Annexation" signs which he sold to Parker North residents at cost. On March 23 the Parker Town Council declared Hopkins's petition invalid because a sufficient number of residents of Parker North had withdrawn their signatures.

In April 2006, Hopkins and Patsy Putnam circulated a second petition to hold an annexation election, this time without language allowing residents to remove their signatures. Plaintiffs again began efforts to oppose the petition. About this time Hopkins learned of the campaign finance laws governing issue committees and registered the issue committee "Parker Yes" online on May 9, 2006.

To persuade their neighbors to oppose annexation, Plaintiffs purchased and distributed No Annexation signs, mailed to all residents of Parker North a postcard summarizing the reasons to oppose annexation, continued to discuss and debate the issue on the Internet, and on June 16 submitted to the Town Council a document opposing annexation that was signed by 215 residents. Putnam and Hopkins engaged in similar efforts to promote their side of the issue. On June 19 the Town Council scheduled a meeting for August 14 to decide whether to hold an annexation election. At that later meeting, it voted to hold the election on February 6, 2007. The proposed annexation was defeated 351 to 21.

C. The Campaign-Law Complaint

On July 3, 2006, Putnam, with Hopkins as her attorney, filed a complaint with the Secretary of State alleging that Plaintiffs had violated the campaign finance law by failing (1) to register as an issue committee, (2) to establish a committee bank account with a separate tax identification number, and (3) to comply with the reporting requirements of Colorado Law. Among the allegations was that Plaintiffs' "illegal activities... expos[e] all persons who have contacted or obtained campaign materials from [Plaintiffs] with possible investigation, scrutinization and sanctions for Campaign Finance violations." Aplt. App., Vol. II at 582.

The Secretary referred the complaint to Colorado's Office of Administrative Courts. Plaintiffs obtained counsel and on counsel's advice, Plaintiff Becky Cornwell registered the issue committee "No Annexation" on July 16, listing herself as the registered agent. The report, covering November 27, 2005, to July 13, 2006, showed non-monetary contributions (signs, a ...

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