AMERICAN FEDERATION OF TEACHERS-OREGON, AFT, AFL-CIO, an Oregon unincorporated association, Respondent, and STATE OF OREGON, Intervenor - Respondent, v. OREGON TAXPAYERS UNITED PAC, an Oregon political committee; Oregon Taxpayers United Education Foundation, an Oregon nonprofit corporation, Appellants, and John DOES 1 through 10, Defendants. OREGON EDUCATION ASSOCIATION, an Oregon nonprofit corporation, Respondent, and STATE OF OREGON, Intervenor - Respondent, v. OREGON TAXPAYERS UNITED PAC, an Oregon political committee; Oregon Taxpayers United Education Foundation, an Oregon nonprofit corporation, Appellants, and John DOES 2 through 10, Defendants.
0108-08942; A122158 (Control); 0012-12632; A122168 (Cases Consolidated)
Court of Appeals of Oregon
Argued and submitted September 20, 2005, judgment against Oregon Taxpayers United PAC on Count 3 reversed; paragraphs 6 and 9 of judgment reversed; paragraph 13 reversed as to Oregon Taxpayers United PAC; paragraph 7 vacated as to Oregon Taxpayers United PAC and remanded; otherwise affirmed October 4, plaintiffs-respondents’ joint petition for reconsideration filed October 17 and defendants-appellants’ response to plaintiffs-respondents’ petition for reconsideration filed October 24 allowed by opinion December 6, 2006
209 Or App 518 | 149 P3d 159 (2006) | 145 P3d 1111
Gregory A. Hartman and Gene Mechanic argued the cause for respondents. With them on the joint brief were Michael J. Morris, Bennett, Hartman, Morris & Kaplan, LLP, and Mark S. Toledo, General Counsel for Oregon Education Association, and Robert Hamilton and Goldberg Mechanic Stuart & Gibson LLP.
Denise G. Fjordbeck, Assistant Attorney General, argued the cause for intervenor - respondent State of Oregon. With her on the brief were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General.
Before Haselton, Presiding Judge, and Brewer, Chief Judge,* and Edmonds, Judge.
* Brewer, C. J., vice Wollheim, J.
Edmonds, J., concurring in part, dissenting in part.
Defendants Oregon Taxpayers United Political Action Committee (OTU-PAC) and Oregon Taxpayers United Education Foundation (OTU-EF) appeal a judgment in favor of plaintiffs, Oregon Education Association (OEA) and American Federation of Teachers (AFT), and intervenor State of Oregon in this action pursuant to the Oregon Racketeer Influenced and Corrupt Organizations Act (ORICO),
The circumstances of this case are unprecedented. As described more fully below, plaintiffs and the state, as intervenor, sought and obtained a judgment under ORICO based on defendants’ allegedly unlawful activities in connection with two 2000 initiative measures, Measures 92 and 98. Those measures would have severely restricted, or prohibited, the ability of school districts and other employers to implement “check-offs” for payroll deductions for union dues when some part of those dues were used for political purposes. Although the voters ultimately rejected both proposed measures in November 2000, plaintiffs contended that they had been injured by defendants’ activities in that those activities were calculated to, and did in fact, cause plaintiffs to expend substantial resources in opposition to the proposed measures.
Plaintiffs are labor organizations who represent, inter alia, public school teachers and classified employees, as well as community college instructors and other employees. Defendant OTU-PAC is an unincorporated association acting
In December 2000, plaintiffs initiated this action against defendants for recovery of damages flowing from defendants’ alleged racketeering activities, as well as for equitable relief. See
In the second count, plaintiffs alleged that paid signature gatherers, acting as agents for defendants, had forged signatures on the initiative petitions for Measures 92 and 98 and falsely certified the petition sheets, again violating criminal forgery statutes. See
In the third count, plaintiffs alleged that, through their agents Sizemore and Miller, OTU-EF had knowingly submitted false “CT-12” forms,3 and OTU-PAC had knowingly submitted false contribution and expenditure (C&E)
The jury, by special verdict, found, as alleged in Count 1, that both defendants had engaged in a pattern of racketeering activity in connection with the forged sponsorship signatures for Measures 92 and 98, and further found that plaintiffs had been damaged by defendants’ conduct. As to the second count, the jury found that both defendants had engaged in a pattern of racketeering activity in regard to signature-gathering on initiative petition 98, as well, but concluded that plaintiffs had not been damaged by that conduct. On Count 3, the jury found that defendants had engaged in a pattern of racketeering activity in regard to the filing of CT-12 and C&E reports and that plaintiffs had been damaged by defendants’ conduct.
The jury awarded plaintiff OEA damages of $65,112 on Count 1 and $671,658 on Count 3, and awarded plaintiff AFT damages of $40,500 on Count 1 and $170,000 on Count 3.5 The subsequent judgment, based on the jury‘s special findings, awarded OEA damages of $2,014,974 ($671,658
After the jury returned its verdict, the state intervened and, along with plaintiffs, sought injunctive relief.
As to Count 2, the court found that defendants’ agents had submitted forged signatures on petitions and certification sheets for Measures 92 and 98, that those actions constituted racketeering activity, and that, as a result of those racketeering activities, Measures 92 and 98 had qualified for the 2000 general election ballot. That is, the court found that without the forgeries, neither measure would have qualified for the ballot.
Regarding Count 3, the court found that OTU-PAC was required under Oregon law to file periodic C&E reports and that OTU-PAC‘s agents had signed and filed false C&E reports from 1996 through 2000 by failing to disclose on those reports various cash and in-kind contributions that OTU-PAC had received from OTU-EF. The court determined that the result of those activities “was to cause tax deductible contributions which were made to OTU-EF, a charity, to be used illegally to fund OTU-PAC and to be paid to Bill Sizemore personally.” The court further found that Bill Sizemore had developed schemes by which contributors could secretly provide financial support to OTU-PAC by funneling those contributions through other organizations and that those were
Regarding OTU-EF, the court found that defendant was required to submit annual reports (CT-12 reports) to the state in order to maintain its tax-exempt status; that Sizemore as agent for OTU-EF had falsely certified on each CT-12 from the years 1996 through 2000 that OTU-EF had not “attempted to influence national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum“; and that OTU-EF had not reported on its CT-12 any of its cash and in-kind contributions to political activities from 1996 through 2000 although those contributions were very substantial.7 The court further found that OTU-EF‘s “involvement in educational activities was minimal“; that OTU-EF‘s minutes reflected its extensive involvement in the activities of OTU-PAC; and that OTU-EF had improperly concealed its political activities from the Internal Revenue Service in documents that were attached and incorporated into each CT-12 submitted to the state.
The court also found that OTU-EF‘s board of directors failed to provide ongoing oversight; that, after the jury verdict in the present case, a new entity called OTU2-PAC had been created in anticipation of the judgment in the present case; that no remedial action had been taken to protect OTU-EF resources from being used by OTU-PAC or OTU2-PAC; that OTU-PAC had submitted yet another false C&E report to the state after the jury verdict; and that a website for OTU2-PAC was promoting “tax-deductible charitable contributions to OTU-EF, the ‘non-profit arm of Oregon Taxpayers United.‘” Additionally, the court found that defendants had created yet another organization, Oregon Taxpayers Association/Union, “with the object of avoiding the judgment which will be issued based upon the Jury Verdict in this lawsuit“; that that organization used all of the same equipment and supplies as defendants; and that it used
Ultimately, the court determined that defendants had
“engaged in conduct concerning successor organizations *** with the intent of circumventing the legal consequences of their actions and the pattern of racketeering conduct which has occurred. The wrongful conduct of the defendants [is] on-going, threatens to continue and it is probable that it will continue in the future unless an appropriate injunction is entered to prevent it.”
The court concluded that, if it did not grant equitable relief,
“there is a probability that defendants will continue to engage in a pattern of racketeering within the meaning of
ORS 166.715(4) . Injunctive relief is necessary to prevent continuation of this conduct which is probable and which threatens continued injury to the public interest.”
The court then entered a judgment that awarded monetary damages (see 208 Or App at 355-56) and equitable relief. As described in detail below, 208 Or App at 374-76 and Appendix “A,” the court dissolved OTU-EF and prohibited any successor organization of OTU-EF from making contributions to any political action committee for a period of five years. The court also prohibited OTU-PAC and any successor political action committees from receiving contributions from tax-exempt charitable organizations for a period of five years. Finally, the court enjoined OTU-PAC, OTU-EF, and their successor organizations from various specific violations of Oregon law and prohibited them from transferring or destroying assets until the judgment entered in the present case is satisfied or until further order of the court.
On appeal, defendants raise six assignments of error. In particular, defendants contend:
- The trial court erred in denying defendants’ motion to dismiss all counts on the ground that plaintiffs could not, as a matter of law, establish causation of the alleged damages.
The trial court erred in denying defendants’ motion for summary judgment on the ground that plaintiffs could not establish causation for the alleged damages. - The trial court‘s injunction impermissibly restrains protected expression and initiative-related conduct in violation of the Oregon Constitution.
- The trial court erred in enjoining nonparties, e.g., “successor organizations,” from participating in future political activities.
- The trial court erred in denying defendants’ motion to dismiss Count 3 on the ground that it failed to sufficiently allege cognizable predicate offenses of “unsworn falsification” as defined by
ORS 162.085 . - The trial court erred in denying defendants’ motion for a directed verdict on Count 3 on the ground that plaintiffs failed to establish that the false statements in the CT-12 forms would have caused OTU-EF to lose its status as a charitable organization.
For cogency of analysis, we begin with the fifth assignment of error and then address, in turn, the first, second, and sixth assignments of error, all of which pertain to various aspects of causation. Finally, we address the third and fourth assignments of error pertaining to the scope of injunctive relief.
Defendants assign error to the trial court‘s denial of their ORCP 21 A(8) motion to dismiss Count 3 on the ground that it failed to sufficiently allege cognizable predicate offenses of “unsworn falsification” as defined by
“A person commits the crime of unsworn falsification if the person knowingly makes any false written statement to a public servant in connection with an application for any benefit.”
On appeal, as before the trial court, defendants contend that neither the C&E reports nor the CT-12 forms constituted “application[s]” for purposes of
“Assuming for purposes of argument that OTU‘s filing of purely informational forms (the ‘C&E reports’ and ‘CT-12 forms’ discussed earlier) might conceivably qualify as a ‘gain or advantage’ in the sense that Oregon law requires the filings and one maintains the ‘advantage’ of abiding by the reporting requirements, nevertheless nothing about the filing of those particular informational reports constitutes, or qualifies as, an ‘application’ for purposes of the statutory definition of ‘unsworn falsification’ in
ORS 162.085(1) . Within the context ofORS 162.085(1) , the term ‘application’ connotes an act synonymous with ‘request’ or ‘petition.’ Yet one neither ‘applies’ for, nor ‘requests,’ [nor] ‘petitions’ for any ‘benefit’ by the filing of any such informational reports or forms.”
(Emphasis in original.)
Plaintiffs respond that the C&E reports enable political action committees “to receive and spend political contributions,” citing
We begin by considering the text of
Unlike “benefit,” however, there is no statutory definition of “application” for purposes of
“APPEAL; REQUEST; PETITION <an ~ for a position> <an ~ to an underwriter for insurance>.”
Webster‘s Third New Int‘l Dictionary 105 (unabridged ed 2002); see also id. (defining “apply” as, inter alia, “to make an appeal or a request esp. formally and in writing and usu. for something of benefit to oneself < ~ to an employer for a job> < ~ to a bank for a loan>“). That usage of “an application” as connoting a “request” comports with statutory definitions of “application” in other, substantively unrelated contexts. See, e.g.,
Before proceeding further, two aspects of the statute‘s text and design bear emphasis. First, the statute is not limited to statements in an application itself; rather, it
Consistently with the foregoing, there are some circumstances in which
We begin with OTU-PAC and the false C&E reports. OTU-PAC points out, correctly, that there is no statutory requirement that an entity submit an application, which must be approved, before it can begin to operate, or continue to operate, as a political committee. Although a political committee must file an initial “statement of organization” under
“A person (or group) becomes a ‘political committee’ automatically (and therefore subject to reporting requirements) if he either receives a contribution for the purpose of supporting or opposing a candidate, measure or political party, or makes an expenditure for the purpose of supporting or opposing a candidate, measure or political party. He does not have to seek permission from the State to become a political committee; he is one ipso facto. Correspondingly, he does not have to ‘apply to continue that status.‘”
To be sure, as plaintiffs point out, a political committee that fails to file required C&Es, or falsifies those filings, is subject to serious consequences, including civil penalties. See, e.g.,
Because there was no “application” for purposes of
We turn, then, to whether OTU-EF‘s conduct in filing fraudulent CT-12 statements violated
OTU-EF points out, correctly, that its status as a section 501(c)(3) tax-exempt entity was not dependent upon the filing of CT-12 reports with the Oregon Department of Justice. Rather, that status is granted by the United States Internal Revenue Service. Conversely, as plaintiffs emphasize, the universe of “benefits” that OTU-EF enjoyed was not limited to its mere status as a tax-exempt entity; rather, and in particular, OTU-EF enjoyed the “gain or advantage” of being entitled to engage in fund-raising activities in Oregon. As a “charitable corporation,”
We agree with plaintiffs. Nothing in the language or design of
We proceed, then, to defendants’ three causation-related assignments of error. We begin with defendants’ first assignment, which challenges the denial of their ORCP 21 A(8) motion to dismiss the complaints in their entirety on the ground that the damages that plaintiffs alleged, which were incurred in opposing Measures 92 and 98, were not proximately caused by defendants’ alleged conduct. In particular, defendants argue that plaintiffs did not suffer “actual damages” “by reason of” any of the alleged unlawful racketeering activity,
In reviewing the disposition of a motion to dismiss under
Consistently with that standard of review, the operative complaints here pleaded sufficient facts to establish the requisite causation. With respect to Count 1, pertaining to falsification of the sponsorship petitions, plaintiffs alleged that the purposes of the enterprise in which defendants participated were (1) to promote the initiative measures “to eliminate or restrict the ability of [plaintiffs] to receive payment of member dues through payroll check-off“; and (2) “to force [plaintiffs] to expend [their] resources opposing such initiatives, thereby preventing [plaintiffs] from initiating and implementing programs for the improvement of public education and the working conditions of [plaintiffs‘] members.” The complaints further alleged, with respect to Count 1, that defendants’ conduct achieved the latter purpose and that plaintiffs’ expenditures to oppose the measures were reasonable and necessary and were the “expected consequence of the enterprise.”
Counts 2 and 3 reiterated the allegations of defendants’ intended purpose of causing plaintiffs to expend resources in opposition to the proposed measures, as well as the allegation that plaintiffs, in fact, expended funds as a result of defendants’ allegedly unlawful conduct. In particular, in Count 3, plaintiffs explicitly alleged that plaintiffs
Defendants contend, nevertheless, that those facts are insufficient to establish actionable causation for purposes of ORICO. That is, defendants assert that, as a matter of law, plaintiffs failed to plead sufficient facts to establish that they had been “injured by reason of” defendants’ unlawful conduct.
In Holmes, the Securities Investor Protection Corporation (SIPC), a nonprofit organization authorized by federal securities law to reimburse customers of member securities brokers who are unable to meet obligations to their customers, sought to recover damages pursuant to RICO from various defendants who allegedly had engaged in a stock manipulation scheme. 503 US at 261. SIPC‘s causation theory was that (1) the defendants had, in violation of the securities laws, manipulated the stock of six companies to create a misleading appearance of a liquid market; (2) as a result of that manipulation, some of SIPC‘s member broker-dealers had “bought substantial amounts of the stock with their own funds” for their own accounts; (3) after the defendants’ scheme was discovered, the stocks plummeted, with disastrous financial consequences for the broker-dealers; (4) because of the broker-dealers’ consequent insolvency and eventual liquidation, they were unable to cover their customers’ claims—claims entirely unrelated to the defendants’ stock manipulation—in the amount of nearly $13 million; and (5) consequently, SIPC was required to advance funds to cover those claims. Id. at 262. The court concluded that, in those circumstances, the causal relationship between the defendants’ unlawful conduct and the injury for which SIPC sought damages was too attenuated to permit recovery.
“First, the less direct an injury is, the more difficult it becomes to ascertain the amount of a plaintiff‘s damages attributable to the violation, as distinct from other, independent, factors. Second, quite apart from problems of proving factual causation, recognizing claims of the indirectly injured would force courts to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, to obviate the risk of multiple recoveries. And, finally, the need to grapple with these problems is simply unjustified by the general interest in deterring injurious conduct, since directly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the problems attendant upon suits by plaintiffs injured more remotely.”
Id. at 269-70 (citations omitted). In rejecting SIPC‘s theory of causation, the Court emphasized that the customers on whose behalf SIPC had sought to recover had not bought the manipulated stock:
“[T]he link is too remote between the stock manipulation alleged and the customers’ harm, being purely contingent on the harm suffered by the broker-dealers. That is, the conspirators have allegedly injured these customers only insofar as the stock manipulation first injured the broker-dealers and left them without the wherewithal to pay customers’ claims.”
Id. at 271; see also Anza v. Ideal Steel Supply Corp., 547 US 451, 126 S Ct 1991, 164 L Ed 2d 720 (2006) (applying Holmes‘s proximate causation test in RICO case involving fraudulent tax returns).
Defendants assert that plaintiffs’ theory of causation in the present case is similarly deficient. In particular, defendants describe plaintiffs’ theories as “labyrinthine, multiple-actor, multiple-event theories.” For the reasons that follow, we disagree with defendants that plaintiffs’ theory of causation is too attenuated to satisfy the requirements of proximate cause.18
We note, moreover, that none of the concerns with distant, indirect causation identified in Holmes militates against the imposition of liability here. Again, assuming the truth of plaintiffs’ pleadings, “the amount of [plaintiffs‘] damages attributable” to defendants’ unlawful conduct is not “difficult * * * to ascertain.” Holmes, 503 US at 269. Rather, that amount—the sums expended in opposing the measures—is precisely quantifiable, and nothing in the pleadings suggests that those expenditures were, wholly or in part, somehow attributable to “other, independent causes.” Id. Nor do the pleadings disclose any material “risk of multiple recoveries” by absent parties “removed at different levels of injury from the violative acts.” Id.20 Finally, and in a related sense, the
We conclude our discussion of the first assignment of error by responding to a concern expressed in the dissent, viz., that imposition of ORICO liability in these circumstances will impermissibly “chill” citizen participation in the initiative process. See 208 Or App at 395-96 (Edmonds, J., concurring in part, dissenting in part). We take that concern very seriously, and we respectfully disagree.
For generations of Oregonians, the initiative has been, and remains, a cherished legacy. It is not only part of our heritage but, as much, a vital, integral part of our political present and future. The initiative process was—as every Oregon school child once learned—adopted in 1902, as a feature of “the Oregon system,” to remedy legislative fraud and corruption. See generally Oregon Blue Book 2005-2006 352-53 (2005); David Schuman, The Origin of State Constitutional Direct Democracy: William Simon Uren and “The Oregon System,” 67 Temple L Rev 946 (1994).21 The citizens
This case is not about innocent participation in the initiative process; it is not about good faith mistakes or errors in judgment in the course of such participation. Rather, as pleaded—and as ultimately found by the jury—this case is about a calculated course of criminal conduct perpetrated for the express purpose of crippling, and even destroying, defendants’ political opponents.
For the Oregonians of a century ago, the initiative process meant pure, “open” democracy—and (at least) most Oregonians would like to think that it still does. But this case involves the antithesis of that ideal: It involves cynical, criminal manipulation of the democratic process.
That is the conduct that is subject to ORICO liability. That is the conduct that is “chilled.” Imposition of ORICO liability in these circumstances fully accords with
Defendants’ second assignment of error parallels their first assignment. Although the first assignment challenges the denial of an
We do not address the substance of defendants’ arguments because, as presented here, defendants’ challenge to the denial of their motion for summary judgment is not reviewable. As we explained in York v. Bailey, 159 Or App 341, 345-46, 976 P2d 1181 (1999), rev den, 329 Or 287 (1999):
“[A]n order denying summary judgment is not reviewable following a full trial on the merits, unless the motion rests on ‘purely legal contentions’ that do not require the establishment of any predicate facts. E.g., Payless Drug Stores v. Brown, 300 Or 243, 246-48, 708 P2d 1143 (1985); Seidel v. Time Ins. Co., 157 Or App 556, 560, 970 P2d 255 (1998). Purely legal contentions are ‘those as to which the facts are not merely undisputed but immaterial, such as a facial challenge to the constitutionality of a statute.’ Id. In other words, the legal theory underlying the motion must be that the moving party has a right to prevail on any set of facts and that the facts, in effect, do not matter.”
Here, defendants’ arguments regarding proof of “proximate cause“—or, concomitantly, the potential operation of “superseding cause“—are necessarily fact based. That is, the facts are material—they are not “not merely undisputed but immaterial[.]” Id. Consequently, as in York, the denial of defendants’ summary judgment motion is not reviewable on appeal.
We proceed to the last of defendants’ three causation-related assignments of error. In the sixth assignment of error, OTU-EF argues that the trial court erred in denying its motion for a directed verdict on Count 3 on the ground that plaintiffs did not prove that, as result of the falsification of the CT-12 reports, OTU-EF “would necessarily have lost its lawful status as a charitable corporation, thus rendering it unable to receive tax-deductible contributions that might have been used for the signature-gathering process for Ballot Measures 92 and 98.”
In reviewing the denial of a directed verdict, we view the evidence, including reasonable attendant inferences, in the light most favorable to the nonmoving party—the plaintiffs. Hudjohn v. S&G Machinery Co., 200 Or App 340, 342, 114 P3d 1141 (2005). That is so because “‘the jury must be permitted to consider every claim on which the plaintiff has presented some evidence tending to establish each element of that claim.‘” Bolt v. Influence, Inc., 333 Or 572, 578, 43 P3d 425 (2002) (quoting State v. Brown, 306 Or 599, 602, 761 P2d 1300 (1988) (emphasis in Brown)). As the court emphasized in Brown, “[o]nly when there is no evidence to support an element may the claim be withdrawn from the jury‘s consideration.” 306 Or at 603.
Consistently with those principles, we summarize the pertinent evidence. Sizemore, acting as an agent for OTU-EF and OTU-PAC, devised a scheme by which tax-deductible donations to OTU-EF could be secretly and unlawfully funneled to OTU-PAC and used to put Measures 92 and 98 on the November 2000 ballot. But for the unlawful scheme, the OTU-EF contributions could not have been used in that manner. The OTU-EF contributions that were unlawfully expended on OTU-PAC activities were significant. See 208 Or App at 357 n 7. Moreover, plaintiffs presented evidence that the unlawful scheme benefitted the OTU-EF donors because they could take tax deductions and also could shield their identities as supporters of the initiatives, which would have been revealed on accurate C&E reports had the contributions been made directly to OTU-PAC. Finally, plaintiffs presented the testimony of an expert, Pancoast, that, if OTU-EF had filed truthful CT-12 forms, the Oregon Department of Justice “almost certainly would have followed
From that evidence, a finder of fact could draw reasonable inferences that OTU-EF‘s racketeering activity described above permitted it to obtain contributions from donors that were unlawfully used to promote ballot initiatives that were intended to—and did—cause plaintiffs to expend resources in opposition to those initiatives. A finder of fact could also reasonably infer from plaintiffs’ unrebutted expert opinion evidence and from the substantial flow of funds from OTU-EF to OTU-PAC for noncharitable purposes that, if OTU-EF‘s unlawful use of funds to promote the ballot initiatives had come to light, the Department of Justice would have obtained an injunction against that unlawful activity and the damages suffered by plaintiffs would never have occurred.23
In sum, plaintiffs presented “some evidence” to support requisite causation with respect to Count 3. Consequently, the trial court properly denied defendants’ motion for a directed verdict on that count.24
We turn, finally, to defendants’ final two assignments of error, pertaining to the scope of the trial court‘s injunction. In their third assignment of error, defendants contend that the injunction embodies an overbroad unconstitutional “prior restraint” of political activities protected under
Before addressing those assignments of error, we must, logically, determine which components of the trial
Our threshold inquiry is substantially complicated by the procedural posture and, particularly, by the parties’ pleadings. In seeking injunctive relief in their original and supplemental pleadings, plaintiffs did not explicitly request specific equitable relief by reference to particular counts.25 Nor, in allowing such relief, did the trial court explicitly relate various provisions to various counts in the pleadings. See Appendix “A” to this opinion (reproducing injunctive provisions of trial court‘s judgment). Consequently, we are consigned to attempting to discern, contextually, which provisions of the injunction are unaffected by the reversal of Count 3 as to OTU-PAC.
Logically, those provisions whose substance corresponds solely to the allegations of Counts 1 and 2, on which both defendants were determined to be liable, should be unaffected by our disposition as to Count 3. Thus, paragraphs 8, 11, and 12, which pertain to initiative and signature-gathering activities, are unaffected. Similarly, those provisions that relate only to OTU-EF, and not OTU-PAC—viz., paragraphs 4, 5, and 10—are unaffected. Conversely, two provisions, paragraphs 6 and 9, name only OTU-PAC and correspond solely to the substance of Count 3; accordingly, those provisions must be reversed in their entirety.
That leaves two provisions—paragraphs 7 and 13. Paragraph 7 names both defendants but is “holistic” in nature:
“OTU-PAC and OTU-EF and their successor organizations and successor political action committees which are jointly referred to as ‘OTU successors’ are hereby enjoined from transferring or destroying any of their assets, whether cash, personal property or real property, and including documents, computers, and computer hardware, software and files, and are so enjoined until the judgment entered in this action is fully satisfied or until further order of this Court.”
We cannot tell, from the pleadings or the judgment, whether the trial court would have entered paragraph 7 against OTU-PAC based solely on that defendant‘s liability on Counts 1 or 2, without reference to Count 3. Accordingly, we vacate paragraph 7 as to OTU-PAC but not OTU-EF. Finally, paragraph 13 names both defendants and pertains solely to the substance of Count 3:
“OTU-PAC and OTU-EF and their OTU successors are hereby enjoined from any violation of Oregon law in connection with the filing or submission of CT-12 Reports, Form 990s and C&E Reports.”
We reverse that provision as to OTU-PAC but not OTU-EF.
In sum, paragraphs 4, 5, 8, 10, 11, and 12 in their entirety and paragraphs 7 and 13, as they apply to OTU-EF, are unaffected by our disposition of Count 3. With those portions of the trial court‘s injunction as “referents,” we return to defendants’ final two assignments of error.
In their fourth assignment of error, defendants assert that the injunction erroneously applies to unspecified Oregon Taxpayers United “successor organizations” who were not parties to the litigation—and, indeed, may not yet exist.26
Here, no justiciable controversy exists between the parties as to whether plaintiffs and intervenor are entitled to injunctive or declaratory relief pertaining to entities other than defendants because defendants have not demonstrated that obtaining relief for such other entities would have any practical effect on defendants.27 Finally, plaintiffs note, and we agree, that those affected by an injunction that were not parties to the original proceeding have adequate legal remedies available to them. See Polygon Northwest v. NSP Development, Inc., 194 Or App 661, 667-69, 96 P3d 837 (2004) (describing ways in which nonparties affected by court order could seek relief). In sum, defendants’ arguments concerning the scope of the injunction as to nonparties do not present a justiciable controversy in this proceeding.
First, although OTU-EF raises a variety of challenges to provisions of the injunction restraining the future ability to make political contributions, including in support of initiatives, OTU-EF does not, so far as we can tell, challenge paragraph 4 of the judgment: “OTU-EF is hereby dissolved.” Indeed, while appellants’ opening brief specifically refers to other paragraphs in the judgment—viz., paragraphs 5 and 6—it includes no mention whatsoever of paragraph 4. With paragraph 4 in place, unchallenged—that is, with OTU-EF “dissolved“—OTU-EF‘s contentions regarding a possible prior restraint are hypothetical.
Second, to the extent that defendants complain about allegedly unconstitutional restraints imposed on non-party “successor” entities, those complaints are nonjusticiable. See 208 Or App at 376-77.
Third, to the extent that OTU-PAC asserts that the limitations on its receipt of funds, as specified in paragraph 6 of the judgment, are unconstitutionally overbroad and
Thus, defendants’ third assignment of error fails.
Recapitulation is due: The trial court erred in denying OTU-PAC‘s motion to dismiss Count 3 and in enjoining OTU-PAC based on liability on Count 3. We affirm the trial court in all other respects.
Judgment against Oregon Taxpayers United PAC on Count 3 reversed; paragraphs 6 and 9 of judgment reversed; paragraph 13 reversed as to Oregon Taxpayers United PAC; paragraph 7 vacated as to Oregon Taxpayers United PAC and remanded; otherwise affirmed.
EDMONDS, J., concurring in part, dissenting in part.
This case involves an action for money damages brought under Oregon‘s Racketeer Influenced and Corrupt Organization Act,
Plaintiffs allege that employees and agents of defendants engaged in racketeering activities by forging signatures on statements of sponsorship and initiative petitions and by submitting false contribution and expenditure reports
The second part of the appeal concerns the injunctive relief that was awarded to the state against defendants, their successor organizations, and Sizemore, the person whom the trial court found was actively involved in the wrongdoing that is the subject of this case. For the reasons explained more fully below, the grant of injunctive relief in this case, in some particulars, extended beyond that authorized by law.
I. PLAINTIFFS’ CLAIMS UNDER ORICO FOR MONEY DAMAGES
Plaintiffs’ claims arise under
“Any person who is injured by reason of any violation of the provisions of
ORS 166.720(1) to(4) shall have a cause of action for three-fold the actual damages sustained, and, when appropriate, punitive damages.”
(Emphasis added.) Plaintiffs allege in Counts 1 and 3 of their complaints that defendants committed certain election offenses in procuring sponsorship signatures for initiative measures and in filing false campaign financing and expenditure reports. They also allege that they were injured by reason of those offenses when they were required to expend monies in order to defeat the measures.
Defendants argue that plaintiffs are not persons who have been injured “by reason of” a violation of ORICO because liability under the act requires direct uninterrupted causation between the violations of the act and the injury
“RICO civil liability requires more than ‘but for,’ or ‘factual,’ causation—much more; ‘but for’ causation, although certainly necessary, has never proven sufficient for RICO purposes, as the Supreme Court made plain in Holmes v. Sec. Investor Prot. Corp., 503 US 258, 265-71, 112 S Ct 1311, 1316-19, 117 LEd 2d 532 (1992)[.]”
Indeed, the Court in Holmes required that there be some “direct” relationship between the injury asserted and the RICO violations before liability arises under the federal act. 503 US at 268-69. Thus, some federal courts have held that a direct relationship between the injury and the alleged wrongdoing is one of the central elements of the federal RICO act and have applied a three-factor “remoteness” test based on Holmes to determine whether a plaintiffs injury is too remote from a defendant‘s alleged wrongdoing to allow recovery.2 See, e.g., Oregon Laborers-Employers Health & Welfare Trust Fund v. Philip Morris Incorporated, 185 F3d 957 (9th Cir 1999) (affirming grant of judgment on the pleadings to defendants on claims that alleged injury suffered by employee health and welfare benefit plans was too remote from alleged wrongdoing of tobacco companies, nonprofit research councils, and public relations firm that allegedly misrepresented and concealed information about health risks of smoking).
It is obvious, however, that the Supreme Court‘s interpretation of the federal statute in Holmes in 1992 and its three-part test for “remoteness” could not have been the meaning of the words “by reason of” in
In Ainslie, however, we did not undertake the analysis required by PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143 (1993), and the template that it established. Indeed, the defendant in Ainslie pointed to the fact that the federal courts have used something akin to a “proximate cause” standard, which in their view demands a direct connection between the injury asserted and the injurious conduct alleged, in order to legally limit a person‘s responsibility for the consequences of that person‘s act based on concepts of what justice demands and what is administratively possible and convenient. The defendant suggested that the injuries asserted by the plaintiffs were not “reasonably foreseeable” in light of what the plaintiffs claimed were ORICO violations. In response to the defendant‘s application of concepts, and without adopting the defendant‘s terminology or legal theses, we agreed with the defendant‘s conclusion that, under the plaintiffs’ theory of damages, “their proof supports nothing but speculation” and “[i]t is simply an imponderable” whether the plaintiffs had been injured by the defendant‘s violations. Ainslie, 148 Or App at 189.
In Loewen, the issue was whether former shareholders could bring an ORICO action against a corporation, its directors, and other entities who were involved in a business transaction with the corporation. Observing that the plaintiffs’ claim was based on the language of
Our overarching task is to discern the intent of the legislature.
When the legislature enacted ORICO in 1981, its definition of “racketeering activity” included election offenses defined in former
The fact that the 1981 legislature expressly contemplated that some election offenses but not others could operate as predicate offenses for purposes of ORICO gives rise to an inference that the omission of nonlisted election offenses
My review of the Oregon legislative history does not reveal any controlling statements by the legislature as to what it intended, other than that the statute was intended to be a counterpart to the federal RICO statute. If, after consideration of the text, context, and legislative history of a
That reasoning causes the analysis to return to what the Holmes Court said about Congress‘s intent when it enacted the federal RICO act. The Court explained:
“We may fairly credit the 91st Congress, which enacted RICO, with knowing the interpretation federal courts had given the words earlier Congresses had used first in §7 of the Sherman Act, and later in the Clayton Act §4. It used the same words, and we can only assume it intended them to have the same meaning that courts had already given them. Proximate cause is thus required.”
Holmes, 503 US at 268 (citations omitted).
Also, in State v. Blossom, 88 Or App 75, 744 P2d 281 (1987), rev den, 305 Or 22 (1988), we observed that ORICO was modeled after the federal RICO statute,
The concept of “proximate cause” in tort law in Oregon finds its roots in the common law. Historically, for purposes of common-law tort liability in Oregon, there must have been more than “but for” causation for liability for an injury to exist. Rather, “proximate” cause, also known as “legal cause,” was required before a person could be held legally responsible for conduct that was a part of the chain of causation of an injury. Sworden v. Gross, 243 Or 83, 86, 409 P2d 897 (1966). Under the common law, a “remote” cause was not a “legal” or “proximate cause” of an injury. In contrast to a “remote” cause, a proximate cause of injury was an injury that “continuously extend[ed] through every event, fact, act and occurrence related to the tortious conduct of the defendant and [was] itself the logical and natural cause of the injury complained of.” Zickrick v. Cooke et al., 197 Or 87, 92, 252 P2d 185 (1953). Also, the connection between a tortious act and the plaintiff‘s injury could be broken by an intervening cause that either supersedes earlier causes or by its nature makes the intervening cause the proximate or legally responsible cause. Johnson v. Hoffman et al., 132 Or 46, 56, 284 P 567 (1930).
Thus, in creating statutory tort liability under
With those principles in mind, I turn in greater detail to the allegations in plaintiff AFT‘s second amended complaint and plaintiff OEA‘s third amended complaint that were the subject of defendants’
In response to defendants’
“The first count involves criminal activity on gathering signatures on the sponsorship petitions for Measures 92 and 98; the second count involves criminal activity in gathering signatures in order to place Measures 92 and 98 on the ballot; and the third count involves criminal activity in raising and reporting funds to place Ballot Measures 92 and 98 on the ballot.”
AFT also alleged that, “[a]s a result of the racketeering activities of Defendant‘s agents, Plaintiff expended funds, as Defendants knew they would, by contributing to campaigns to oppose Measure 92 and 98.” Similarly, Plaintiff OEA explained to the trial court,
“Plaintiff‘s complaint is organized in three counts. The first count involves criminal activity in gathering signatures on the sponsorship petitions for Measures 92 and 98; the second count involves criminal activity in gathering signatures in order to place Measures 92 and 98 on the ballot; and the third count involves criminal activity in raising and reporting funds to place Ballot Measures 92 and 98 on the ballot.”
Plaintiff OEA further alleged that “[t]he further purpose of the enterprise was to force plaintiff to expend its resources opposing such initiatives, thereby preventing plaintiff from initiating and implementing programs for improvement of public education and the working conditions of plaintiff‘s members.”
For purposes of defendants’
It can be easily said, based on the above allegations, that plaintiffs allege a “factual” or “but-for” causation, i.e., that there is a causal link between defendants’ conduct and plaintiffs’ harm, but there remains the issue of legal responsibility under ORICO. One subissue involving legal responsibility is whether the complaints allege ORICO violations that are too remote to plaintiffs’ injury to make them actionable under
With regard to the issue of remoteness, the Zickrick court explained:
“The essence of the rule is found in the maxim ’Causa proxima, non remota spectatur.’ The proximate, as distinguished from the remote cause, ‘involves the idea of continuity, that the negligent act continuously extends through every event, fact, act and occurrence related to the tortious conduct of the defendant and is itself the logical and natural cause of the injury complained of.”
197 Or at 92 (quoting 1 Shearman and Redfield on Negligence (rev ed) 92, § 33).
Plaintiffs’ Count 1 claims, as alleged, do not satisfy the above maxim. They allege that Kelli Highley, as an
“As a result of Highley‘s racketeering activities, Measure 92 and Measure 98 were approved by the Oregon Secretary of State for circulation pursuant to
ORS 250.045(1) . Thereafter Defendants circulated the petitions and obtained sufficient signatures to place Measures 92 and 98 on the 2000 general election ballot.“*****
“As a result of Highley‘s racketeering activities, Plaintiff[s] expended funds in its efforts to oppose certification of the ballot titles, and by contributing to campaigns to oppose these measures.”
Plaintiffs’ injury, as alleged above, was the expenditure of monies to oppose the measures once they were on the ballot.8 The harm-producing event that ultimately caused plaintiffs’ injury was the fact that the measures were certified by the Secretary of State to be on the ballot. Until that event occurred, there was nothing legally in place for plaintiffs to oppose. Rather, the forgeries of the sponsorship statements occurred long before the measures were placed on the ballot by the Secretary of State.
Under
In light of the number of steps involved in the above process, the forgeries of the statements of sponsorship were not a direct, but rather a remote, cause of plaintiffs’ expenditures.
Plaintiffs’ Count 3 claims involve the filing of false contribution and expenditure forms. Plaintiffs allege that defendants were required by Oregon law as a political action committee to file periodic contribution and expenditure reports. They also allege that for the years 1998 through 2000, “William Sizemore and Becky Miller, acting as agents of OTU-PAC, signed and filed” false reports concerning Measures 92 and 98 “knowing such reports to contain false written statements, including misstatements on the amount of funds received by OTU-EF and other contributors for use by OTU-PAC.” They further allege that the “forms were intentionally false, concealing the actual use of funds raised by OTU-EF to support OTU-PAC activity related to Measures 92 and 98, concealing the source of contributions to Measures 92 and 98, and enabling more funds to be raised to support Measures 92 and 98 through the tax exempt OTU-EF.” Finally, they allege, “As a result of the agents’ racketeering activities, Defendants were able to raise the necessary funds to collect signatures to qualify Measures 92 and 98 for the 2000 general election ballot.”
Thus, giving plaintiffs the benefit of all reasonable inferences from their allegations, it can be inferred that, had defendants not falsified their campaign and expenditure reports, they would have been unable to raise or allocate sufficient monies to obtain enough signatures to place their measures on the ballot. Here, in contrast to their first count, plaintiffs allege a more direct cause of their injury, i.e., that the falsifying of campaign and finance reports resulted in defendants being able to obtain enough signatures, which resulted in them being able to qualify their measures for the
Two initial observations need to be kept in mind in assessing the legislature‘s intent in that regard. First, the more direct harm-producing event that caused plaintiffs’ alleged injury is the fact that defendants were able to procure enough signatures to get the measures on the ballot rather than the filing of falsified campaign financial reports. Second, the certification of the petition signatures presented to the Secretary of State by defendants preceded the ballots being placed on the ballot, the direct harm-producing event under plaintiffs’ theory.
The general common-law rule was that, where it appeared from the complaint that between the defendant‘s act and the plaintiff‘s injury there had intervened an independent cause without which the injury would not have happened, the latter will be held to be the proximate cause of the loss and the defendant will be excused from liability. See, e.g., Aune v. Oregon Trunk Railway, 151 Or 622, 633, 51 P2d 663 (1935) (affirming the dismissal of an action for damages resulting from the burning of the plaintiff‘s buildings caused by a fire started by “hobos” in the defendant‘s railroad car). Applying the general rule to the context of this case, it can easily be said that, without the Secretary of State‘s certification of the signatures, the ballot measures that produced plaintiffs’ injury would not have been placed on the ballot. Thus, in the context of ORICO, it could be argued that plaintiffs’ injury did not occur directly “by reason of” defendants’
There are also additional reasons that lead to the above conclusion. First, I am unaware of any precedent that existed in 1981 that would have caused the legislature to think in conceptual terms that plaintiffs’ expenditures to oppose defendants’ ballot measures constituted “compensatory damages” within the ordinary meaning of those words, whether for ORICO purposes or for purposes of any other torts. Second, and perhaps most important, I have significant policy concerns about recognizing plaintiffs’ theory of damages under ORICO. According to
If ORICO is construed to afford a remedy for opponents of initiative measures in the event of the kind of election law violations that plaintiffs allege, that remedy affects more than the pocketbooks of individual wrongdoers who commit ORICO violations; it will have a chilling effect on those innocent participants who contribute monies or who otherwise participate in promotion of ballot measures, whether it be in support of a ballot measure sponsored by defendants or by other political committees and individuals who wish to participate in the political process. For instance, in this case, the trial court awarded damages against defendants to plaintiff OEA in the amount of $2,014,974 and to plaintiff AFT in the amount of $510,000. When other potential participants or political committees view the result of this case, it is likely that they will be less willing to participate in the initiative process because of the exposure to liability under ORICO arising from the actions of an agent or representative. Again, in light of the fact that the legislature has enacted legislation that addresses election misconduct and targets wrongdoers with criminal and civil penalties to deter further conduct, it seems unlikely that the legislature would have contemplated providing an additional remedy through ORICO for opponents of initiative measures to recover their expenditures, given the chilling effect of civil damage awards on the initiative process itself. Rather, because the initiative process is a constitutionally guaranteed process, the legislature presumably would have intended to promote citizen involvement regarding the debate of political issues that arise through the initiative process rather than to provide a statutory remedy that inhibits participation in the process.
In summary, the issue before us is one of statutory interpretation of the phrase “by reason of” in
II. THE GRANT OF INJUNCTIVE RELIEF
I turn now to the third and fourth assignments of error, which challenge the award of injunctive relief against defendants on behalf of intervenor, State of Oregon. The injunctions against defendants provide,
“4. OTU-EF is hereby dissolved.
“5. OTU-EF successor organizations are hereby enjoined from making any contributions or providing anything of value, including loans or in-kind contributions, to any political action committee and are so enjoined for a period of five years from the date the judgment is entered in this action. An ‘OTU-EF successor organization’ is defined as any educational foundation, or similar organization, that is eligible for I.R.C. § 501(c)(3) tax exempt status in which Bill Sizemore is a manager, officer, director, trustee, or controlling person of the successor organization or otherwise participates, directly or indirectly, in the direction or control of the activities of the OTU-EF successor organization.
“6. OTU-PAC and its successor political action committees are hereby enjoined from receiving any contribution of anything of value from any I.R.C. § 501(c)(3) organization, including but not limited to OTU-EF or any OTU-EF successor organization, and are so enjoined for a period of five years from the date the judgment is entered in this action. An ‘OTU-PAC successor political action committee’ is defined as a political action committee in which Bill Sizemore is a director or treasurer or chief petitioner of
the successor political action committee, or otherwise participates, directly or indirectly, in the direction or control of the activities of the successor political action committee, and shall include but not be limited to the Committee to Restore Freedom in the Workplace, No More Political Fund-raising at Taxpayer Expense, Just Compensation for Regulatory Takings Committee, Committee to Preserve Self Government, Committee for Teacher Merit Pay, No New Taxes Without a Vote Committee, and Oregonians Against Double Taxation. “7. OTU-PAC and OTU-EF and their successor organizations and successor political action committees which are jointly referred to herein as ‘OTU successors’ are hereby enjoined from transferring or destroying any of their assets, whether cash, personal property or real property, and including documents, computers, and computer hardware, software and files, and are so enjoined until the judgment entered in this action is fully satisfied or until further order of this Court.
“8. OTU-PAC and OTU-EF and their OTU successors are hereby enjoined from doing business with I&R Petitions Services, Inc. (‘I&R‘), and any and all I&R successors and are so enjoined for a period of five years from the date the judgment is entered in this action. An ‘I&R successor’ is defined as any corporation, sole proprietorship, partnership or other business which is owned in whole or in part by any owner of I&R, and performs similar services as I&R.
“9. OTU-PAC and its OTU successor political action committees are hereby enjoined from any violation of Oregon law in connection with their reporting on Contribution and Expenditure Reports (‘C&E Reports‘) of any in-kind and direct contributions from OTU-EF or any other non-profit corporation, or other corporation, entity or person.
“10. OTU-EF and its successor organizations are hereby enjoined from any violation of Oregon law in connection with reporting on their CT-12 Reports and Form 990s.
“11. OTU-PAC and OTU-EF and their OTU successors are hereby enjoined from any violation of Oregon law in connection with the filing or submission of any statements of sponsorship for prospective petitions for a state measure.
“12. OTU-PAC and OTU-EF and their successors are hereby enjoined from any violation of Oregon law in connection with the filing or submission of signature sheets on an initiative petition for a state measure. “13. OTU-PAC and OTU-EF and their OTU successors are hereby enjoined from any violation of Oregon law in connection with the filing or submission of CT-12 Reports, Form 990s and C&E Reports.
“14. The injunctions set forth above in paragraphs 7 though 13 shall be effective April 30, 2003 and shall continue for five years from the date of this judgment.”
In their third assignment of error, defendants argue that the trial court‘s injunction impermissibly restrains protected expression and political activities in violation of
The parties subject to the trial court‘s injunction are OTU-EF, its successor organizations, OTU-PAC, its successor organizations, and Bill Sizemore. Although Sizemore is permitted under the injunction to participate in political activities, the injunction significantly restricts his involvement in political committees that meet the injunction‘s definition of an OTU-EF and OTU-PAC successor political committee, including certain named political committees. Only OTU-EF and OTU-PAC are named defendants. Injunctive relief in this case was granted pursuant to
“(1) Any circuit court may, after making due provision for the rights of innocent persons, enjoin violations of the provisions of
ORS 166.720(1) to (4) by issuing appropriate orders and judgments[.]“*****
“(b) Imposing reasonable restrictions upon the future activities or investments of any defendant, including, but not limited to, prohibiting any defendant from engaging in the same type of endeavor as the enterprise in which the
defendant was engaged in violation of the provisions of ORS 166.720(1) to (4) .”
The above statutory language authorizes the grant of injunctive relief against only those persons who are “defendants.”
The successor organizations and Bill Sizemore are not named defendants as
“Although
ORCP 79 D does not apply to permanent injunctions, such as the one here, we cite it for two reasons. First, as explained below,ORCP 79 D and its federal analogue reflect the common-law doctrine, which does apply. Second, we see no reason for applying a different rule to permanent injunctions.”
This case presents a different issue from the issue that existed in Von Ohlen. The state does not seek injunctive relief for five years under the common law but rather based on the authority granted to the trial court under
Finally,
The trial court found that OTU-PAC, through its agents, knowingly submitted false signature sheets for Measure 98, acts that constituted the crimes of forgery under
OTU-PAC first argues that its political contributions and expenditures qualify as constitutionally protected activities within the meaning of
“directed to the substance of any ‘opinion’ or any ‘subject’ of communication unless the scope of the restraint is wholly confined within some historical exception that was well established when the first American guarantees of freedom of expression were adopted and that the guarantees then or in 1859 demonstrably were not intended to reach.”
Here, the injunction, on its face, prohibits OTU-PAC from making or receiving any political contributions. It is clear that the injunction, on its face, targets protected political expression. See Vannatta, 324 Or at 538 (holding ballot measure providing for limits on contributions to state political campaigns unconstitutional in part under
It follows that the injunction is constitutionally infirm unless it fits within a historical exception or unless the actual focus of the injunction is on an effect of a proscribed harm rather than on the substance of the communication itself. State v. Stoneman, 323 Or 536, 543, 920 P2d 535 (1996). “Historical exceptions” include “perjury, solicitation or verbal assistance in crime, some forms of theft, forgery and fraud and their contemporary variants.” Robertson, 293 Or at 412. However, the injunction in this case is much broader than any of the above exceptions, operating to enjoin OTU-PAC from any political activity as well as the violation of any campaign law.16
Nonetheless, if the actual focus of the injunction is on a proscribed harm rather than on the substance of the
OTU-PAC also argues that the injunction violates
As stated above,
III. SUMMARY
In summary, I would vacate the award of money damages to plaintiffs because there is no indication that the legislature intended that a remedy under ORICO is available to them. I would also dismiss the injunctions against all entities and persons who were not named as defendants. Finally, I would affirm the injunctive relief awarded by the trial court against OTU-PAC. For these reasons, I concur in part with the majority opinion and otherwise dissent.
ER-6
“17. What is the amount of damages you award to plaintiff AFT?
“$170,000.
“Dated this 27th day of September, 2002.
” /s/ Presiding Juror”
On December 20, 2002 the court granted the motion of the State of Oregon to intervene.
On February 3, 2003 this matter came on for a bench trial on the requests of plaintiffs and intervenor for equitable relief, the court having before it the evidence received at the prior jury trial. Plaintiff OEA was represented by Gregory A. Hartman and Bennett, Hartman, Morris & Kaplan, LLP and Mark S. Toledo. Plaintiff AFT was represented by Gene Mechanic and Goldberg, Mechanic, Stuart & Gibson LLP. Intervenor-plaintiff State of Oregon was represented by Assistant Attorney General Christine B. Miller. Defendants OTU-PAC and OTU-EF were represented by Gregory W. Byrne.
On April 30, 2003 the court entered its Findings of Fact and Conclusions of Law and Introduction Thereto, which are incorporated herein by reference, and entered its Injunction Order.
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
- Plaintiff OEA have judgment against defendants OTU and OTU-EF, jointly and severally, for $671,658, to be trebled pursuant to
ORS 166.725(7)(a) , for a total of $2,014,974; - Plaintiff AFT have judgment against defendants OTU and OTU-EF, jointly and severally, for $170,000, to be trebled pursuant to
ORS 166.725(7)(a) , for a total of $510,000; - All claims against John Does be dismissed without prejudice;
- OTU-EF is hereby dissolved.
Page 5 - MONEY JUDGMENT AND EQUITABLE DECREE
OTU-EF successor organizations are hereby enjoined from making any contributions or providing anything of value, including loans or in-kind contributions, to any political action committee and are so enjoined for a period of five years from the date the judgment is entered in this action. An “OTU-EF successor organization” is defined as any educational foundation, or similar organization, that is eligible for I.R.C. § 501(c)(3) tax exempt status in which Bill Sizemore is a manager, officer, director, trustee, or controlling person of the successor organization or otherwise participates, directly or indirectly, in the direction or control of the activities of the OTU-EF successor organization. - OTU-PAC and its successor political action committees are hereby enjoined from receiving any contribution of anything of value from any I.R.C. § 501(c)(3) organization, including but not limited to OTU-EF or any OTU-EF successor organization, and are so enjoined for a period of five years from the date the judgment is entered in this action. An “OTU-PAC successor political action committee” is defined as a political action committee in which Bill Sizemore is a director or treasurer or chief petitioner of the successor political action committee, or otherwise participates, directly or indirectly, in the direction or control of the activities of the successor political action committee, and shall include but not be limited to the Committee to Restore Freedom in the Workplace, No More Political Fund-raising at Taxpayer Expense, Just Compensation for Regulatory Takings Committee, Committee to Preserve Self Government, Committee for Teacher Merit Pay, No New Taxes Without a Vote Committee, and Oregonians Against Double Taxation.
- OTU-PAC and OTU-EF and their successor organizations and successor political action committees which are jointly referred to herein as “OTU successors” are hereby enjoined from transferring or destroying any of their assets, whether cash, personal property or real property, and including documents, computers, and computer hardware, software and files, and are so enjoined until the judgment entered in this action is fully satisfied or until further order of this Court.
Page 6 - MONEY JUDGMENT AND EQUITABLE DECREE
- OTU-PAC and OTU-EF and their OTU successors are hereby enjoined from doing business with I&R Petitions Services, Inc. (“I&R“), and any and all I&R successors and are so enjoined for a period of five years from the date the judgment is entered in this action. An “I&R successor” is defined as any corporation, sole proprietorship, partnership or other business which is owned in whole or in part by any owner of I&R, and performs similar services as I&R.
- OTU-PAC and its OTU successor political action committees are hereby enjoined from any violation of Oregon law in connection with their reporting on Contribution and Expenditure Reports (“C&E Reports“) of any in-kind and direct contributions from OTU-EF or any other non-profit corporation, or other corporation, entity or person.
- OTU-EF and its successor organizations are hereby enjoined from any violation of Oregon law in connection with reporting on their CT-12 Reports and Form 990s.
- OTU-PAC and OTU-EF and their OTU successors are hereby enjoined from any violation of Oregon law in connection with the filing or submission of any statements of sponsorship for prospective petitions for a state measure.
- OTU-PAC and OTU-EF and their successors are hereby enjoined from any violation of Oregon law in connection with the filing or submission of signature sheets on an initiative petition for a state measure.
- OTU-PAC and OTU-EF and their OTU successors are hereby enjoined from any violation of Oregon law in connection with the filing or submission of CT-12 Reports, Form 990s and C&E Reports.
- The injunctions set forth above in paragraphs 7 through 13 shall be effective April 30, 2003 and shall continue for five years from the date of this judgment.
- That plaintiffs are entitled to costs and attorney fees to be determined pursuant to
ORCP 68 .
///
Page 7 - MONEY JUDGMENT AND EQUITABLE DECREE