474 P.3d 667
Ariz.2020Background
- Committee (Invest in Education Act) circulated petitions to place a tax-and-education initiative on the Nov. 3, 2020 ballot; it filed 435,669 signatures and 377,456 were cleared for verification by the Secretary of State.
- The Initiative is a multi-page measure imposing a 3.5% surcharge on individual taxable income above $250,000 (or $500,000 for joint filers) and dedicating revenue to teacher pay, support personnel, mentoring/retention, career training, and the Arizona Teachers Academy; petition sheets contained a 100‑word description reciting those features and the statutorily required notice.
- Challengers (a qualified elector and a PAC) sued pre-verification alleging: (1) the 100‑word description omitted principal provisions and was misleading under A.R.S. § 19‑102(A); and (2) paid petition circulators were compensated in violation of A.R.S. § 19‑118.01(A) (no pay based on number of signatures), which would void signatures.
- Superior Court: rejected most pay-based challenges but found the 100‑word description deficient (omitting five principal provisions and using the term “surcharge” misleadingly) and enjoined certification and placement on the ballot.
- Arizona Supreme Court: granted expedited review, reversed the superior court’s ruling on the 100‑word description, affirmed that some circulator bonus programs violated § 19‑118.01(A) but upheld Petition Partners’ hourly tiered pay and spin‑the‑wheel morale program, and directed placement of the Initiative on the ballot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 100‑word petition description omitted principal provisions and thus violated § 19‑102(A) | The description omitted key principal provisions (percent distributions, how much rates increase, applicability to pass‑through business income, anti‑supplanting language, and expenditure‑limit carve‑outs), making it misleading | The description identified the core thrust (a 3.5% surcharge on high incomes dedicated to education) and signatories could read the full text for details; omissions were not of "principal" provisions | Reversed superior court: description complied with § 19‑102(A); omitted details (percentages, effects on pass‑through income, legislative discretion limits, expenditure‑limit carve‑outs) were not principal provisions or made the description misleading |
| Whether stating a "3.5% surcharge" was misleading because it concealed a much larger percentage increase in marginal tax rate | The term "surcharge" and lacking a percentage‑increase disclosure concealed how large the tax increase was | The description truthfully stated an additional 3.5% charge; sponsors may phrase descriptions positively so long as they are not false or obscure the thrust | Held for defendant: wording was accurate and not false or misleading; Molera v. Reagan did not require stating percentage increase, only truthful description |
| Whether Petition Partners’ hourly tiered pay and the spin‑the‑wheel incentive violated § 19‑118.01(A) (prohibiting pay based on number of signatures) | Such forward‑looking rate tiers and prize/spin programs were effectively based on signatures and therefore prohibited | § 19‑118.01(A) prohibits pay calculated by reference to signatures collected (per‑signature, per‑sheet, contingent hourly rates), but employers may consider productivity history in setting future hourly rates; morale incentives not conditioned on signatures are permissible | Court held tiers lawful (prospective hourly pay for hours worked, not payment per signature) and spin‑the‑wheel lawful (not tied to actual signature counts in practice); some other bonus programs did violate the statute |
| Scope of disqualification and preliminary injunction: whether all signatures collected ever by a circulator who received improper bonuses must be voided and whether preliminary relief to permit discovery was warranted | All signatures collected by improperly‑paid circulators should be voided; plaintiffs requested discovery and injunction to determine extent | Statute reasonably interpreted to void only signatures collected during pay periods when illegal payments were made; plaintiffs failed to show likelihood of losing enough signatures to keep the measure off the ballot | Court held only signatures gathered during periods with unconstitutional/illegal bonus payments are void; superior court did not abuse discretion in denying preliminary injunction because plaintiffs did not show a strong likelihood of success or that discovery would change the outcome |
Key Cases Cited
- Molera v. Reagan, 245 Ariz. 291 (2018) (prior disqualification of an Invest in Education Act where petition description was false or misleading)
- Kromko v. Superior Court, 168 Ariz. 51 (1991) (practical limits on what petition signers will read; purpose of summary)
- Save Our Vote v. Bennett, 231 Ariz. 145 (2013) (100‑word description need not be impartial but must accurately communicate objectives)
- Quality Educ. & Jobs Supporting I‑16‑2012 v. Bennett, 231 Ariz. 206 (2013) (complexity and length are factors in assessing summary compliance)
- Wilhelm v. Brewer, 219 Ariz. 45 (2008) (summary cannot obscure principal provisions or thrust)
- Ariz. Chapter of the Associated Gen. Contractors v. City of Phoenix, 247 Ariz. 45 (2019) (use reasonable person standard to interpret description)
- Meyer v. Grant, 486 U.S. 414 (1988) (restrictions on paid circulators implicate core political speech)
- Prete v. Bradbury, 438 F.3d 949 (9th Cir. 2006) (upholding ban on per‑signature pay as distinct from hourly pay)
- Citizens for Tax Reform v. Deters, 518 F.3d 375 (6th Cir. 2008) (invalidating a statute restricting compensation to time‑based pay due to burdens on petitioning)
- Tilson v. Mofford, 153 Ariz. 468 (1987) (constitutionality of an initiative is evaluated after adoption)