Gerald GEIER and Stop Now!, Appellants, v. MISSOURI ETHICS COMMISSION, et al., Respondents.
No. SC 94951
Supreme Court of Missouri, en banc.
Opinion issued November 24, 2015
474 S.W.3d 560
The commission was represented by Solicitor General James R. Layton, Nicholas Beydler, Andrew W. Blackwell and Peggy A. Whipple of the attorney general‘s office in Jefferson City, (573) 751-3321.
Mary R. Russell, Judge
Gerald Geier and the political action committee of which he was the treasurer, Stop Now!, both appeal from the circuit court‘s grant of summary judgment in favor of the Missouri Ethics Commission in an action involving their challenge to the constitutional validity of sections
I. Factual and Procedural Background
From 1991 to 2012, Gerald Geier, a certified public accountant, was the treasurer of Stop Now!, a Missouri political action committee (PAC) that engaged in issue advocacy opposing ballot initiatives that would raise taxes. He was required to register the PAC with the Missouri Ethics Commission (MEC), the agency responsi-
Stop Now!, however, remained a registered PAC and, from 2004 to 2010, continued to file the quarterly disclosure reports required by sections
The MEC filed a formal complaint against Geier and Stop Now!, alleging they violated section
Geier appealed the MEC‘s probable cause determination to the Administrative Hearing Commission (AHC) on behalf of himself and Stop Now!. He admitted the statutory violations, arguing instead that the reporting statutes were unconstitutional as applied because Stop Now! had been inactive prior to commencement of the enforcement action. He also challenged the constitutional validity of section
Geier next sought judicial review in the circuit court pursuant to section
II. Standard of Review
This is an appeal from the circuit court‘s review of the AHC‘s grant of summary decision in favor of the MEC. Typically, in an appeal from an agency-tried case this Court reviews the decision of the agency and not the circuit court. Garozzo v. Mo. Dep‘t. of Ins., Fin. Inst. & Prof‘l Registration, Div. of Fin., 389 S.W.3d 660, 663 (Mo. banc 2013). Here, however, the circuit court was the first to rule on the bulk of Geier‘s constitutional claims because the AHC cannot declare a statute unconstitutional. Cf., State Tax Comm‘n v. Admin. Hearing Comm‘n, 641 S.W.2d 69, 75-76 (Mo. banc 1982). Additionally, Geier‘s
Rulings were entered in favor of the MEC before both the AHC and the circuit court. The circuit court decided only questions of law, and there were no factual disрutes. Regardless of whether this Court reviews the AHC‘s decision or the circuit court‘s judgment, the standard of review is the same. The propriety of summary judgment is an issue of law entitled to de novo review. Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215, 217 (Mo. banc 2014). Additionally, both the constitutional validity of a statute and an agency‘s interpretation and application of a statute are subject to de novo review. State v. Young, 362 S.W.3d 386, 390 (Mo. banc 2012); Algonquin Golf Club v. State Tax Comm‘n, 220 S.W.3d 415, 418 (Mo. banc 2007).
III. Analysis:
A. The Reporting Statutes Are Constitutional As Applied
Before turning to Geier‘s constitutional challenge, a review of Missouri‘s Campaign Finance Disclosure laws as well as First Amendment jurisprudence in the area of campaign finance regulation is helpful. Missouri‘s Campaign Finance Disclosure Law defines a “PAC” as
a person or any combination of persons, who accepts contributions or makes expenditures for the primary or incidental purpose of influencing or attempting to influence the action of voters for or against the nomination or election to public office of one or more candidates or the qualification, passage or defeat of any ballot measure. . . .
Section
Geier and Stop Now! do not dispute that they violated the campaign finance laws by failing to maintain a bank account after 2006, failing to amend the statement of organization after the bank account was closed, failing to file quarterly reports for the first three quarters of 2011, and failing to timely file a termination statement. Instead, Geier argues that sections
The First Amendment prohibits laws “abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble....”
Regulations that limit speech are subject to “strict scrutiny,” which requires the government to prove that the regulation furthers a compelling interest and is narrowly tailored to achieve that interest. Id. at 340, 130 S.Ct. 876. Disclosure and reporting requirements, on the other hand, are subject to “exacting scrutiny.” Id. at 366, 130 S.Ct. 876. “Exacting scrutiny” is a lesser standard, requiring that the government establish a “substantial relation” between the regulation and а “sufficiently important” interest. Id. The reporting statutes here are disclosure requirements, and exacting scrutiny applies. To withstand exacting scrutiny, “the strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights.” John Doe No. 1 v. Reed, 561 U.S. 186, 196, 130 S.Ct. 2811, 177 L.Ed.2d 493 (2010).
Buckley states that disclosure and reporting requirements directly serve substantial governmental interests. 424 U.S. at 68, 96 S.Ct. 612. The Buckley Court explained that there are at least three categories of sufficiently important interests that can justify such regulations. Id. at 66-68, 96 S.Ct. 612. The first interest is informational—the need to provide the electorate with information about the sources of election-related spending. Id. The second is to “deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity.” Id. The third interest is in the “gathering of data necessary to detect violations of [other campaign finance laws].”4 Id. Geier ar-
gues that the reporting statutes are unconstitutional as applied to himself and Stop Now!. He asserts that in the unique context of an inactive PAC—a PAC that is no longer “speaking“—the State either has no interest to justify required disclosure and reporting, or that its interest is so diminished as to be outweighed by the burden placed on First Amendment rights. He asks this Court to declare that he and Stop Now! committed no violations of Missouri law. To determine whether the reporting statutes withstand exacting scrutiny, this Court must examine the State‘s interests in the statutes, assess whether the statutes are substantially related to those interests, and look to the unique burden the statutes placed on Geier and Stop Now!.
It first must be noted that the governmental interests outlined in Buckley v. Valeo are narrower in the context of disclosure and reporting regulations when applied to an “issue PAC” as opposed to a PAC supporting or opposing a candidate for office. In the case of a ballot initiative, there is no “risk of quid pro quo corruption present when money is paid to, or for, candidates.” Buckley v. Am. Constitutional Law Found., Inc., 525 U.S. 182, 203, 119 S.Ct. 636, 142 L.Ed.2d 599 (1999). Assuming that Stop Now! was truly an “issue PAC” speaking only about tax-related ballot initiatives,5 the reporting statutes here must be justified by (1) the State‘s interest in gathering data to detect other violations of campaign finance laws and/or (2) the informational interest: “the need to provide the electorate with information about the sources of election-related spending.” Buckley v. Valeo, 424 U.S. at 66-68, 96 S.Ct. 612.
Missouri‘s broad interests in preserving the integrity of the election process ... are significant, compelling and important. Weinschenk v. State, 203 S.W.3d 201, 217 (Mo. banc 2006). The MEC serves the public interest by enforcing Missouri election law in a nonpartisan and transparent manner to provide the electorate with accountability as to the source of political speakers. The MEC has an interest in enforcing Missouri‘s campaign finance laws and providing the public with information and accountability about how money is spent in elections and on issue advocacy. These interests comport with Buckley. Geier, however, argues that even if this is true as applied to PACs generally, the State does not have a real interest in the disclosure and reporting of Stop Now!, a PAC that hаd been financially dormant for several years before its bank account was closed and for nearly a decade before the MEC opened its investigation.
In support of his contention that the State has insufficient interest to justify enforcing the reporting statutes against an inactive PAC, Geier primarily relies on Minnesota Citizens Concerned for Life, Inc. v. Swanson, 692 F.3d 864 (8th Cir. 2012). In that case, Minnesota business
On its face, Minnesota Citizens does not apply to this case. The Eighth Circuit specifically excluded PACs from its analysis, reversing the lower court‘s denial of a preliminary injunction “to the extent it requires ongoing reporting requirements from associations not otherwise qualifying as PACs under Minnesota law.” Id. at 877. It stated that its holding did not affect Minnesota‘s regulation of PACs and that associations “whose major purpose is to influence the nomination or election of a candidate or to рromote or defeat a ballot question would still comply with the same essential requirements because they are political committees.” Id. at 877 n. 11. Here there is no question that Stop Now! was a PAC. As such, the unconstitutional reporting requirements applying to “associations” in Minnesota Citizens do not similarly apply to Stop Now!, and that case does not render the reporting statutes here unconstitutional.
Apart from Minnesota Citizens, Geier offers no authority for the proposition that the State has no interest in receiving disclosure reports from inactive PACs. He argues that there can be no sufficiently important State interest in disclosure by a speaker potentially capable of speech, but not actually engaged in speech or other related activity by way of accepting contributions or making expenditures. Stop Now!‘s inactivity, however, does not alter the State‘s interest in enforcing the reporting statutes, and Geier‘s contention that a PAC cannot be required to file a report if it has not accepted contributions or made expenditures misunderstands those interests. The State‘s interests in providing information and accountability to the public, as well as enforcing Missouri‘s campaign finance laws, would be frustrated if a PAC could file nothing with respect to its activities during a reporting period. Otherwise, the MEC would be forced to continually sift through each PAC that did not file disclosure reports to determine which were shirking their disclosure obligations and which were merely inactive. The MEC had no way of knowing, absent a termination statement, that Stop Now! had effectively dissolved. Stop Now! remained a registered Missouri PAC, capable of becoming active and “speaking” again at any
Having found that the State‘s interests in the reporting statutes are sufficiently important, even in the case of an inactive PAC, this Court turns to the reporting statutes and finds they are substantially related to those interests. Section
Finally, the Court turns to the burden placed on Geier and Stop Now!‘s First Amendment rights by the reporting statutes. Geier argues that the statutes imposed “overly burdensome reporting requirements,” both in determining what is required under the statutes and in making the required disclosures. The record, however, does not indicate that Geier did not understand the requirements of Missouri‘s campaign finance disclosure laws. On the contrary, he complied with the quarterly reporting requirements for nearly two decades. There is no evidence in the record that, during that period, he ever complained that the obligation was too burdensome. Rather, Geier stated that the reporting stopped, not because of any burden, but because “life goes on, people have things to do, and no activity occurred.”
The relevant rеporting and disclosure requirements were not overly burdensome. The “Committee Statement of Limited Activity,” which satisfies a PAC‘s reporting requirement under section
B. Geier‘s Facial Challenges Are Not Ripe
Geier not only challenges the reporting statutes as applied to him and Stop Now!, but also challenges them facially, seeking deсlaratory and injunctive relief preventing enforcement of the statutes against any hypothetical similarly dormant PACs or their treasurers. The MEC contends that his claim triggers justiciability concerns. A justiciable controversy requires standing and ripeness. Schweich v. Nixon, 408 S.W.3d 769, 773-74 (Mo. banc 2013). To have standing, a party must have a personal stake arising from a threatened or actual injury. Id. at 774. Even when a party has standing, however, the claims must also be ripe, which requires the dispute to be “developed sufficiently to allow the court to make an accurate determination of the facts, to resolve a conflict that is presently existing, and to grant specific relief....” Id. A claim is not ripe for adjudication if it “rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.” Texas v. United States, 523 U.S. 296, 300, 118 S.Ct. 1257, 140 L.Ed.2d 406 (1998).
Standing and ripeness, often closely related, are both implicated here because Geier seeks relief on behalf of others not before this Court and in future circumstances not certain to occur. However, he offers no evidence of any such similarly situated PAC. He also has not pointed to any future plans of his own to become treasurer of a PAC that becomes inactive after many years without formally dissolving. Geier argues that in the First Amendment context, standing and ripeness requirements are relaxed because of the potential “chilling” effect on speech—a judicial assumption that a statute‘s very existence may cause others not before the court to refrain from constitutionally protected speech or expression. State v. Vaughn, 366 S.W.3d 513, 518 (Mo. banc 2012).
Geier contends there is a sufficient record of chilling in this case to establish standing and ripeness. He asserts that enforcement of the reporting statutes has chilled his own political speech in that he fears engaging in future speech potentially subject to the MEC‘s regulation because “it may be too expensive and burdensome for me to bear.” He argues that the regulatory burden will prevent him from serving in the future as treasurer of a PAC. He also states that Stop Now! “terminated itself out of existence rather than remain merely dormant because of the chilling effect of the enforcement action itself.” Geier‘s assertions of chilling, though possibly relevant to standing if credited, do not address the ripeness of a pre-enforcement challenge to the reporting statutes on behalf of either hypothetically inactive PACs or Geier himself as a future PAC treasurer. This Court hоlds such claims for declaratory and injunctive relief are not ripe for review. Judgment was proper on behalf of the MEC.
C. Section 105.961.3 Does Not Violate the First Or Sixth Amendments
Geier next argues that section
The MEC is an administrative body established to administer and enforce ethics-related laws, including the campaign finance disclosure provisions. Impey v. Mo. Ethics Comm‘n, 442 S.W.3d 42, 44 (Mo. banc 2014). The MEC is authorized to receive complaints alleging violations of any of the campaign finance disclosure laws. Section
The Sixth Amendment provides that, “[i]n all criminаl prosecutions, the accused shall enjoy the right to a speedy and public trial....”
Geier also argues that the closed hearing held pursuant to section
Section
D. The MEC Had Authority To Investigate Geier
Finally, Geier challenges the MEC‘s authority to attribute violations of the law to a PAC‘s treasurer. In this case, the MEC‘s order stated that there was probable cause to believe that “Respondents Geier and Stop Now! violated, and have violated, [the repоrting statutes].” Further, the letter the MEC issued to Geier following the closed hearing stated that Geier violated the reporting statutes in his “capacity as Treasurer of Stop Now! Continuing Committee.” Geier argues the law is ambiguous as to the MEC‘s authority in this regard and seeks a declaration that, if there was a violation of the reporting statutes, the violation may only be attributed to Stop Now! and not to Geier either personally or in his capacity as treasurer of Stop Now!.
The reporting statutes at issue are within chapter 130. Section
In the alternative, Geier argues that, if the treasurer may be held liable, it must be in official capacity only. The MEC‘s letter of “no further action,” plainly statеd that Geier violated the reporting statutes “in [his] capacity as Treasurer of Stop Now!....” It is unclear then, what Geier asks this Court to do in this regard, as the MEC determined that the violations of the reporting statutes were committed in his official capacity. Further, there were no monetary penalties assessed for which Geier could have been liable. Judgment on this claim was properly entered in favor of the MEC.
IV. Conclusion
The judgment of the circuit court is affirmed.11
All concur.