VINCE LEACH, ET AL., Plаintiffs/Appellants/Cross-Appellees, v. MICHELE REAGAN, IN HER OFFICIAL CAPACITY AS ARIZONA SECRETARY OF STATE, ET AL., Defendants/Appellees, and CLEAN ENERGY FOR A HEALTHY ARIZONA COMMITTEE, AN ARIZONA POLITICAL ACTION COMMITTEE, Real Party in Interest/Appellee/Cross-Appellant. CLEAN ENERGY FOR A HEALTHY ARIZONA, AND ALEJANDRA GOMEZ, Cross-Plaintiffs/Appellees/Cross-Appellants, v. MICHELE REAGAN, ARIZONA SECRETARY OF STATE, ET AL., Cross-Defendant/Appellant/Cross-Appellee, and JAVAN D. MESNARD, SPEAKER OF THE HOUSE; AND STEVE YARBROUGH, PRESIDENT OF THE SENATE, Cross-Claimant Intervenors/Appellants/Cross-Appellees.
Nos. CV-18-0205-AP/EL, CV-18-0230-AP/EL (Consolidated)
Supreme Court of the State of Arizona
December 6, 2018
Appeal from the Superior Court in Maricopa County, The Honorable Daniel J. Kiley, Judge, Nos. CV2018-009919, CV2018-010116, CV2018-010651, CV2018-010658, CV2018-010807 (Consolidated)
AFFIRMED
COUNSEL:
Brett W. Johnson, Jennifer Hadley Catero, Kelly Kszywienski, Colin P. Ahler, Andrew Sniegowski, Brianna L. Long, Lindsay Short, Snell & Wilmer L.L.P., Phoenix; Michael T. Liburdi, Nicole M. Goodwin, E. Jeffrey Walsh, Greenberg Traurig LLP, Phoenix, Attorneys for Vince Leach, Glenn Hamer, Justine Robles, John Kavanagh, Jenn Daniels, Jackie Meck, Ashley Ragan, John Giles
Israel G. Torres, James E. Barton II, Saman J. Golestan, Torres Law Group, PLLC, Tempe, Attorneys for Clean Energy for a Healthy Arizona Committee, Alejandra Gomez
Kory Langhofer, Thomas Basile, Statecraft PLLC, Phoenix, Attorneys for Speaker of the House J.D. Mesnard, Senate President Steve Yarbrough
William G. Montgomery, Maricopa County Attorney, M. Colleen Connor, Talia J. Offord, Deputy County Attorneys, Maricopa County Attorney‘s Office, Attorneys for Maricopa County Defendants/Appellees
Timothy Sandefur, Scharf-Norton Center for Constitutional Litigation, Phoenix, Attorneys for Amicus Curiae Goldwater Institute
Robert G. Schaffer, Lewis Roca Rothgerber Christie LLP, Phoenix, Attorneys for Amicus Curiae Arizona Chamber of Commerce & Industry and the Greater Phoenix Chamber of Commerce
Nicholas J. Enoch, Kaitlyn A. Redfield-Ortiz, Stanley Lubin, Lubin & Enoch P.C., Phoenix, Attorneys for Amicus Curiae International Brotherhood of Electrical Workers Local Union 387
JUSTICE TIMMER authorеd the opinion of the Court, in which CHIEF JUSTICE BALES, VICE CHIEF JUSTICE BRUTINEL, and JUSTICE PELANDER joined. CHIEF JUSTICE BALES, joined by JUSTICE PELANDER, filed a concurring opinion. JUSTICE PELANDER filed a concurring opinion. JUSTICE GOULD, joined by JUSTICES BOLICK and LOPEZ, filed an opinion concurring in part and dissenting in part.
¶1 These expedited election appeals and cross-appeals raise several issues concerning a political action committee‘s organizational formation, the adequacy of an initiative title, and whether the trial court erred in finding a sufficient number of valid petition signatures to support placement of the Proposition 127, Renewable Energy Standards Initiative on the November 2018 ballot. We previously issued orders affirming the trial court‘s rulings that the measure qualifies for the ballot. We now explain our reasoning for those orders. (At the election, the voters rejected the measure, but that does not affect our pre-election decisions.)
BACKGROUND
¶2 Clean Energy for a Healthy Arizona (the “Committee“) is a political action committee (“PAC“) that sought placement of an initiative measure on the November 2018 general election ballot. To that end, the Committee formed on February 9, 2018, by filing a “statement of organization” with the Secretary of State (“Secretary“) on a form provided by her. See
¶3 On February 20, the Committee filed an application with the Secretary for an initiative measure that proposes a constitutional amendment to “require electricity providers to generate at least 50% of their annual sales of electricity from renewable energy sources” (the “Initiative“). See
¶4 Two days after the Committee filed its application with the Secretary, NextGen Climate Action (“NextGen“), a California-based entity, made the first of several substantial contributions to the Committee (totaling more than $4 million in the first and second quarters of 2018 alone) by paying FieldWorks, LLC, about $140,000 to gather petition signatures for the Initiative. NextGen‘s contributions were publicly reported by the Committee in its mandatory campaign finance reports filed on April 17 and July 14. The Committee did not report receiving any contributions during the period before filing its application with the Secretary on February 20.
¶5 Clean Energy for a Healthy Arizona, LLC (“CEHA LLC“) formed on February 27, and the Arizona Corporation Commission approved its articles of organization on March 22. Accоrding to the Committee,
¶6 FieldWorks hired, registered, and paid more than 1500 circulators to collect signatures supporting placement of the Initiative on the ballot. On July 5, the Committee filed petition sheets containing 480,707 signatures with the Secretary. The Secretary reviewed the sheets for statutory compliance pursuant to
¶7 Plaintiffs are qualified electors. On July 19, before completion of the signature verification process, they filed a complaint in the trial court against the Secretary, the Committee, all county recorders, and all members of county boards of supervisors, challenging the petition signatures on several bases and seeking to enjoin placement of the Initiative on the ballot. In an interlocutory judgment entered pursuant to Arizona Rule of Civil Procedure 54(b), the trial court dismissed Plaintiffs’ claim alleging deficiencies in the Committee‘s statement of organization. The court also dismissed the claims against the county recorders and the board members as unripe. In addition, the court rejected the Committee‘s argument that Plaintiffs can only challenge petition signatures within the random five percent sample submitted to the county recorders for verification. On expedited appeal and cross-appeal, in an order filed August 20 (with an opinion to follow), this Court affirmed the trial court‘s interlocutory judgment.
¶8 Meanwhile, the county recorders completed their signature review of the five percent sample. After disqualifying some signatures and validating others, they established a 72.37% validity rate. The Secretary applied that rate to the 454,451 signatures eligible for verification, see
¶9 Plaintiffs filed new complaints against eleven county recorders, alleging they improperly accepted invalid signatures during their reviews. The trial court consolidated these cases with the initial case. Although Plaintiffs raised several challenges, the core issue before the court was whether the Committee had obtained the 225,963 valid signatures required to place the Initiative on the ballot.
¶10 A five-day trial of extraordinary logistical complexity began on August 20. Approximately 5500 exhibits were admitted in evidence, some of which were thousands of pages in length, and more than fifty witnesses testified. Plaintiffs subpoenaed more than 1180 witnеsses, most of whom were petition circulators. The trial court struck petition signatures gathered by more than 300 circulators because they either did not comply with their subpoenas, see
¶11 This Court has jurisdiction over this expedited election matter under
I. The defective statement of organization claim
¶12 Plaintiffs argue the Committee filed a defective statement of organization on February 9 by naming CEHA LLC as a sponsor before it existed, failing to name NextGen as a sponsor, and failing to incorporate “NextGen” into the Committee‘s name.1 Consequently, Plaintiffs assert, the Committee never properly formed, and the Initiative application was a nullity under
¶13 The trial court dismissed this claim without deciding whether the statement of organization was defective, ruling that Plaintiffs did not have a private right of action to make this challenge. Alternately, the court found that Plaintiffs’ claim was barred by laches. Reviewing the dismissal of Plaintiffs’ claim de novo as an issue of law, see Coleman v. City of Mesa, 230 Ariz. 352, 355–56 ¶ 7 (2012), for the reasons below we affirm the trial court‘s ruling on the first ground and therefore do not address laches.
¶14 Any person may “contest[] the validity of an initiative or referendum measure based on the actions of the secretary of state or compliance with [chapter one of Title 19].”
¶15 Before resolving this issue, it is useful to consider the interplay between Titles 16 and 19 concerning a statement of organization. An entity wishing to form as a PAC to support or оppose an initiative measure must file a statement of organization in compliance with
¶16 The statement of organization must be filed with a “filing officer,”
¶17 Title 16 also provides remedies if a PAC‘s statement of organization fails to comply with
¶18 A PAC that proposes a statewide or local initiative measure must apply for an official petition serial number by filing an application with the Secretary on a form provided by her.
¶19 The committee must also simultaneously file “its statement of organization” with the Secretary, and if it fails to do so, she is prohibited from accepting the application. Id. If a committee files an application with an accompanying statement of organization, the Secretary “shall assign an official serial number to the petition,” which is affixed to all petition sheets circulated for signatures.
¶20 We agree with the trial court that
¶21 First,
¶22 Second, an applicant satisfies
¶23 Third, the Secretary is statutorily required to assign an official serial number upon the applicant‘s filing of an application and a statement of organization. See
¶24 Fourth, and finally, Title 16 establishes exclusive procedures for challenging a statement of organization. As previously explained, a third party can challenge compliance with
¶25 The dissent passionately argues that third parties must be entitled to challenge initiative petition signatures based on a PAC‘s failure to disclose a sponsor in its statement of organization so that citizens signing petitions are not misled. But the dissent fails to explain why this public protection goal cannot be achieved through Title 16. Here, for example, Plaintiffs could have filed a complaint with the Secretary as early as February and at least by mid-April (after the Committee filed its first required campaign finance report revealing NextGen as a substantial donor) alleging that the Committee‘s statement of organization was false because it failed to list NextGen as a sponsor. The Secretary could have investigated and referred any violation to the Attorney General, and the Committee could have taken corrective action by disclosing NextGen as a sponsor (if required) or faced an enforcement action that may have nullified its statement of organization and thus its ability to continue to act. The benefit of pursuing the Title 16 remedy early is obvious: waiting until hundreds of thousands of signatures are gathered to address the issue, as the dissent contends should occur, risks disenfranchising citizens who signed petitions because they supported the Initiative.
¶26 In sum, even though the Committee was required to file its statement of organization with the initiative application, see
II. Legally sufficient title
¶27 The Initiative‘s title declares that the measure amends the constitution “to require electricity providers to generate at least 50% of their annual sales of electricity from renewable energy sources.” Plaintiffs argue this is false and misleading because the Initiative applies only to electricity providers that are also “public service corporations” and not others, most notably Salt River Agricultural Improvement and Power District. We review this issue de novo as a mixed question of fact and law. See Wilmot v. Wilmot, 203 Ariz. 565, 568–59 ¶ 10 (2002).
¶28 A “full and correct copy of the Title and text of the measure” must be attached to all petition sheets.
¶29 The Initiative‘s title is not deceptive. It accurately states that the measure affects “electricity providers.” Although the title does not mention that the Initiative applies only to “public service corporations” that provide electricity, such detail is neither required nor necessary to avoid misleading voters. Cf. id. at 60 (noting the initiative title was misleading “if at all” because it was incomplete and concluding that “[w]e cannot say that a title‘s failure to describe every aspect of a proposed measure always creates the degree of fraud, confusion, and unfairness sufficient to invalidate the petition upon which the title rests“). Importantly, an initiative‘s title gives notice of the measure‘s subject matter—no more, no less. See Dennis v. Jordan, 71 Ariz. 430, 439 (1951) (stating “it is not necessary that the title be a synopsis or a complete index of the legislation that is to follow” but suffices if it “indicate[s], in a general way at least, what is to follow in the way of legislation” and “put[s] anyone having an interest in the subject matter on inquiry” (emphasis removed) (internal quotations omitted)). The Initiative‘s title served this purpose by notifying interested parties that the measure imposes renewable-energy-source requirements on “electricity providers.” Interested voters are plaсed on notice to read the Initiative‘s text for details, which include that the measure applies only to “public service corporations.” The trial court correctly rejected Plaintiffs’ challenge.
III. Sufficient number of valid signatures
¶30 The Committee submitted 480,707 signatures to the Secretary, which, if valid, far exceeded the 225,963 signatures required to place the Initiative on the ballot. The trial court invalidated 79,252 signatures for various reasons not at issue here, leaving 401,455 potentially valid signatures. To disqualify the Initiative from the ballot, therefore, Plaintiffs were required to prove by clear and convincing evidence that at least another 175,493 signatures were invalid (401,455 – 175,493 = 225,962). Cf. McClung v. Bennett, 225 Ariz. 154, 156 ¶ 7 (2010) (stating burden for challenging signatures to candidate nominating petitions).
A. Improper circulator registration
¶31 Paid circulators who collect signatures for statewide ballot measures must register with the Secretary before circulating petitions.
¶32 The trial court rejected Plaintiffs’ request to invalidate 116,098 signatures gathered by circulators who had not designated proper service-of-process addresses on their
¶33 At the time pertinent to events here,
For the purposes of this title, “paid circulator“:
1. Means a natural person who receives monetary or other compensation that is based on the number of signatures obtained on a petition or on the number of petitions circulated that contain signatures.
2. Does not include a paid employee of any political committee organized pursuant to title 16, chapter 6, unless that employee‘s primary responsibility is circulating petitions to obtain signatures.
(Footnote omitted.) We interpret
¶34 We agree with the trial court that the circulators here were not “paid circulators” as defined in
¶35 Plaintiffs nevertheless argue that
¶36 Even assuming the circulators were Committee “employees,” an issue we do not decide, Plaintiffs’ position is contradicted by (F)(2)‘s plain language. Subsection (F)(2) did not define “paid circulator” but instead described what the definition in (F)(1) “[did] not include“—employees whose primary responsibility was not circulating petitions. Subsection (F)(2) was an exception, not a rule. The caveat in (F)(2) (“unless that employee‘s primary responsibility is circulating petitions to obtain signatures“) limited the exception and kept the employee category described in the caveat within the definition of “paid circulator” if (F)(1) otherwise applied.
¶37 Plaintiffs assert that interpreting
¶38
¶39 Rewriting
¶40 We also reject Plaintiffs’ alternate argument that by voluntarily registering with the Secretary, the circulators were required to provide a proper service-of-process address per
¶41 Relatedly, the circulators’ declarations that the information in the registration forms was “true, complete, and correct” did not make their registrations “unlawful.” See
¶42 Our resolution of this issue is consistent with the trial court‘s ruling that
¶43 In sum, the circulators here were paid on an hourly basis and were therefore not “paid circulators” required to register with the Secretary. Their voluntary registration did not require them to comply with
B. Exhibit C issues
¶44 Plaintiffs attached to their second amended complaint a spreadsheet identifying one or more deficiencies in 384,459 petition signatures (“Exhibit C“). At Plaintiffs’ request before trial, and without objection, the trial court ordered the Committee to provide Plaintiffs with a written response to these challenges within eleven days. The Committee complied by providing its own spreadsheet, created from its pre-existing quality control research, identifying which challenged signatures had “no problem,” a “potential problem,” or were “unreviewed.” The Committee failed to make any notation
¶45 Plaintiffs moved to strike 272,245 signatures on Exhibit C to which the Committee had responded by noting anything other than “no problem.” They argued that Exhibit C was part of the complaint, and the court‘s order for a response meant the Committee was required to deny the alleged signature deficiencies or they would be admitted, as would occur with any answer. See
¶46 Plaintiffs argue the trial court erred because the Committee‘s “calculated decision not to admit the invalidity of signatures it knew to be invalid should not benefit the Committee.” But this argument incorrectly presupposes that the Committee was required to admit or deny the Exhibit C challenges. The court‘s discussion with counsel that culminated in the order for a response to Exhibit C makes clear that the court entered a discovery order. Nothing required admissions or denials. The court did not abuse its discretion by denying the motions. Cf. State v. Acuna Valenzuela, 245 Ariz. 197, 207 ¶ 11 (2018) (“We review a trial court‘s evidentiary rulings for an abuse of discretion . . . .“).
¶47 Exhibit C was admitted in evidence at trial, and Plaintiffs’ political consultants testified and explained how their organizations identified the signature line deficiencies reflected in that document. Thereafter, Plaintiffs moved to shift the burden of proof to the Committee because it had not responded to or denied many Exhibit C challenges.2 The trial court denied the motion, reasoning, “the mere fact that you‘ve put on evidence doesn‘t mean that the burden then shifts. I still have to evaluate the evidence that you put on. And if you haven‘t met your burden, then the burden doesn‘t shift and there‘s nothing that the defendants need to do.”
¶48 In contesting this ruling, Plaintiffs argue that the burden shifted to the Committee because it “had superior access to the information that formed the basis for Plaintiffs’ objections.” See Parker v. City of Tucson, 233 Ariz. 422, 432 ¶ 24 n.9 (App. 2013) (“[T]here is support for the notion that a party with superior knowledge about and access to evidence regarding certain facts should bear the burden of producing that evidence, rather than charging the adverse party with the task of proving a negative.“); Healey v. Coury, 162 Ariz. 349, 354–55 (App. 1989) (upholding jury instruction stаting that “the burden of proof as to a matter which is peculiarly within the knowledge or control of the opposite party is placed on that party“). Plaintiffs claim the Committee had superior access to information because it had four months “to conduct quality control” while the petitions circulated whereas Plaintiffs had only two weeks to examine the petitions, and the Committee had access to its circulators to address issues.
¶49 The trial court did not err. Plaintiffs did not (and do not here) identify any information within the Committee‘s control that Plaintiffs could not access. Indeed, in a Herculean effort, Plaintiffs reviewed all petition signatures, challenged 384,459 signatures based on twenty-seven categories of purported deficiencies, and subpoenaed more than 1100 circulators to testify. The fact that the Committee had more time to analyze information does not mean it had superior access sufficient to shift the
burden of proof. If that were so, the burden would rarely, if ever, be placed on a challenger in election cases, considering their expedited nature.
¶50 Plaintiffs next argue the trial court erred by failing to accept Exhibit C as a “summary [or] chart . . . to prove the content of voluminous writings.” See
¶51 Finally, Plaintiffs argue the trial court erred by failing to resolve challenges to 72,014 signatures based on various deficiencies, as set forth in Exhibit C. The court concluded it did not need to address these challenges because invalidating 72,014 signatures would still leave a sufficient number to qualify the Initiative for the ballot. Plaintiffs agree that this group of signature challenges is not dispositive but contends it could be in combination with other challenges. Plaintiffs do not ask us to remand to the trial court to rule on these challenges. Rather, they argue these signatures should be invalidated because “the Committee failed to rebut [the] evidence” on these challenges. But Plaintiffs fail to develop this argument. They do not identify which signatures comprise this group, the bases for objection, or what other evidence impacted these challenges. The Committee asserts it provided rebuttal evidence. In short, we cannot assess whether Plaintiffs satisfied their burden of proof as to these challenges, and we do not attempt to do so. See id. To the extent Plaintiffs assert the Committee admitted these challenges or bore the burden to disprove them, we reject those arguments for the reasons previously explained.
C. Objection 12: voter registration
¶52 The trial court rejected Plaintiffs’ Exhibit C “objection 12” that thousands of signatures should be invalidated because the signatories’ names and addresses did not match the statewide voter registration database. See
¶53 Before addressing Plaintiffs’ argument, we consider the Committee‘s cross-appeal assertion that Plaintiffs were restricted to challenging signatures within the five percent random sample submitted by the Secretary to the county recorders, see supra ¶ 6, and that the trial court erred by ruling otherwise. This issue is moot considering our holding permitting placement of the Initiative on the ballot. Because the issue is likely to recur, however, we address it to provide guidance in future cases. The issue is a legal one, which we review de novo. See Twin City Fire Ins. Co. v. Leija, 244 Ariz. 493, 495 ¶ 10 (2018).
¶54 The Secretary is not required to check whether a signatory was a registered voter at the time he or she signed the petition. Instead, the county recorders examine petition signatures in the five percent random sample and certify the number of signatures disqualified for statutorily enumerated reasons, including voter non-registration. See
¶55 The Committee argues that because the random sample process provides the only mechanism for reviewing compliance with
¶57 We are not persuaded that permitting a challenge that encompasses signatures outside the random sample would be so unworkable that the legislature could not have intended to authorize it. The random sample process establishes procedures for the Secretary and county recorders to follow to determine whether an initiative has a sufficient number of valid signatures for placement on the ballot. Those officials are not required to exclude any non-compliant signatures identified in a private action under
¶58 Turning now to Plaintiffs’ challenge, we confront a signature calculation dispute. The trial court found that 116,237 signatures were subject to objection 12 while Plaintiffs contend that the correct number is 179,119. Resolving the dispute is imperative. Even if 116,237 signatures are invalidated, the Initiative petition would still exceed the 225,963 signatures required to place the Initiative on the ballot (401,455 – 116,237 = 285,218). But if Plaintiffs’ calculation is correct, the Initiative petition would fail to meet the required mark (401,455 – 179,119 = 222,336).
¶59 Plaintiffs have not shown that the trial court erred by finding that objection 12 applied to 116,237 signatures. To support its 179,119 calculation, Plaintiffs rely on a chart created for this appeal, which they say is derived from four trial exhibits. But Plaintiffs do not explain how 179,119 is calculated from the exhibits, which contain more than thirty thousand pages, and our cursory review was unenlightening.
¶60 In contrast, the trial court‘s 116,237 calculation is supported by the record. Objection 12 originally challenged 204,740 signatures. During trial, that number was reduced as signatures subject to objection 12 were invalidated for other reasons. At the start of the final trial day, Plaintiffs informed the court that objection 12 then applied to 117,519 signatures and introduced a demonstrative chart to that effect. See trial exhibit 5687. At the end of the day, Plaintiffs updated the chart to reflect that objection 12 applied to 116,237 signatures. See trial exhibit 5689.
¶61 The trial court‘s finding that objection 12 applied to 116,237 signatures was not clearly erroneous. See Shooter v. Farmer, 235 Ariz. 199, 200 ¶ 4 (2014). Because invalidating those signatures would not disqualify the Initiative from the ballot, we do not further address the merits of objection 12.
D. A.R.S. § 19-118(C)
¶62 The trial court applied
CONCLUSION
¶63 We affirm the trial court‘s judgment denying injunctive relief to Plaintiffs.
LEACH v. REAGAN/ CLEAN ENERGY FOR A HEALTHY ARIZONA
CHIEF JUSTICE BALES, joined by JUSTICE PELANDER, Concurring
BALES,
¶64 I join fully in the majority‘s careful disposition of this complex case and write separately only to address an argument made by our dissenting colleagues. As they point out, the majority does not decide whether the NextGen Action Committee is a sponsor for purposes of
¶65 Section 16-906(B) requires that, if а committee is sponsored, the committee must include the name of its sponsor in the committee‘s name. Section 16-901(47), in turn, defines a sponsor as “any person that establishes, administers, or contributes financial support to the administration of a political action committee or that has common or overlapping membership or officers with that political action committee.” If these two statutes were the only relevant sections of Title 16, our dissenting colleagues might be correct that NextGen is a sponsor of CEHA. Read literally and in isolation, these provisions might suggest that any “person” that establishes or contributes financial support to a political action committee is a “sponsor.” That reading is mistaken, however, because we must consider the “context of the statute” when interpreting its meaning. See Glazer v. State, 237 Ariz. 160, 163 ¶ 12 (2015).
¶66 Section 16-906 can only sensibly be understood in context. Under
¶67 The rationale for
¶68 The fact that NextGen made nearly all the contributions to CEHA after its formation – contributions that were publicly reported pursuant to Arizona‘s campaign finance laws – does not mean that NextGen was a sponsor. Every functioning political action committee is established by some person, and all monetary contributions received by such a committee to some degree support its administration (either directly or by freeing up other funds for administrative costs). But creating a committee or making reportable contributions to it cannot suffice to make someone a sponsor. Such an interpretation would be contrary to the plain language of
¶69 The dissent seems particularly concerned that not identifying NextGen as a sponsor could perpetrate some great deception on Arizona‘s citizens. But other provisions of Title 16 address that concern. Contributions made by NextGen to CEHA are subject to periodic reporting requirements – and there is no contention here that those requirements have been violated. Moreover, the legislature has specified when it believes it appropriate for committees to otherwise identify their major funding sources. In its current version,
¶70 Our campaign finance and disclosure laws seek to facilitate free and open elections. Those same laws, however, are complicated, technical, and legitimately subject to persons structuring campaign strategies within the existing legal requirements. Those requirements did not require CEHA to identify NextGen as its sponsor. If that conclusion raises concerns about the adequacy of our disclosure requirements, they should be addressed by the legislature, and not by this Court stretching
LEACH v. REAGAN/ CLEAN ENERGY FOR A HEALTHY ARIZONA
JUSTICE PELANDER, Concurring
PELANDER, J., concurring.
¶71 I join in the majority‘s analysis regarding the interplay between Title 16 and Title 19 and its conclusion that Plaintiffs may not “contest the validity of the Initiative based on the statement of organization‘s alleged non-compliance with
LEACH v. REAGAN/ CLEAN ENERGY FOR A HEALTHY ARIZONA
JUSTICE GOULD, joined by JUSTICES BOLICK and LOPEZ Concurring in part and Dissenting in part
GOULD, J., joined by BOLICK, J., and LOPEZ, J., concurring in part and dissenting in part.
¶72 The Committee received millions of dollars—essentially all of its funding—to circulate petitions for its Initiative from one source: “NextGen Climate Action” (“NextGen“), a San Francisco-based organization. Nonetheless, the Committee never disclosed NextGen as its sponsor. This conduct violated Title 19 (
¶73 The majority, however, never reaches this issue. Rather, it concludes that Plaintiffs, as private parties, have no remedy under Title 19. I disagree. Section 19-122(C) allows Plaintiffs to bring a private cause of action to
I.
¶74 Plaintiffs allege two separate causes of action under
¶75 Plaintiffs’ second claim is based on the actions of the Secretary of State. See
¶76 I agree with the majority‘s conclusion that Plaintiffs have failed to allege a cognizable claim against the Secretary of State. No statute requires the Secretary of State to investigate or reject a statement of organization or initiative application that appears, on its face, to be complete. Moreover, as a practical matter, when these documents are filed, the Secretary of State does not have the time or infоrmation to determine whether they contain errors or omissions.
¶77 However, Plaintiffs’ first cause of action under
¶78 In short, Plaintiffs’ private cause of action under
II.
¶79 In Arizona, a political action committee (“PAC“) must disclose whether it is sponsored by any person or organization. This disclosure requirement is robust. When a PAC files its statement of organization, it must include the “name, mailing address, e-mail address, website, if any, and telephone number of any sponsor.”
¶80 In terms of disclosure, requiring PACs to incorporate sponsors in their committee name has ramifications extending far beyond the statement of organization itself. When a PAC files an application to circulate initiative petitions, it must list its committee name—which necessarily includes the name of any sponsor—on its application.
¶81 Requiring a PAC to disclose its sponsors is essential to preventing fraud. As stated in Van Riper v. Threadgill, 183 Ariz. 580, 583 (App. 1995), “it is important for interested parties to know exactly who is backing a referendum drive.” Thus, “it is reasonable to require individuals to file a form which discloses whether they are acting alone or in concert with others.” Id.
¶82 At least one other jurisdiction has enjoined an initiative from being placed on the ballot due to a PAC‘s failure to disclose a sponsor. In Loontjer v. Robinson, the plaintiff, a private party, sought an injunction to prevent an initiative from being placed on the ballot. 670 N.W.2d 301, 303–04 (Neb. 2003). The plaintiff asserted that the defendants violated a statute requiring a PAC, before gathering signatures on an initiative petition, to “file[] with the Secretary of State” a “sworn statement containing the names and street addresses of every person, corporation, or association sponsoring the petition.” Id. at 307 (quoting
¶83 The Nebraska Supreme Court ruled in favor of the plaintiff. Id. at 309. The court explained that “the sworn statement provision is mandatory” and is not an “onerous” requirement; rather, it promotes accountability and prevents fraud in the initiative process. Id. at 308–09. The court further explained that the sponsor requirement “allows the public to make an informed judgment whether to sign the petition.” Id. at 308; see also Hamilton Twp. Taxpayers’ Ass‘n v. Warwick, 434 A.2d 656, 658 (N.J. Super. Ct. App. Div. 1981) (holding that a referendum petition was legally insufficient because the petitions did not include the names of the referendum sponsors, and stating that “[t]he evident legislative purрose of the requirement . . . is to inform voters, who are solicited for their signatures, who the sponsors of the petition are . . . not only to enable the voters to charge the sponsors with responsibility as agents but to guide the voters whether to sign“); cf. Thompson v. Jaeger, 788 N.W.2d 586, 592 (N.D. 2010) (“The obvious purpose of the constitutional mandate that the petition contain the sponsors’ names and addresses is to provide material information to potential signers when they contemplate signing the petition.“).
¶84 The majority contends that because Title 16 (specifically,
¶85 Neither Title 16 nor Title 19 supports such a narrow construction. As noted above,
¶86 Here, the Committee violated both Title 16 and Title 19. Specifically,
¶87 Allowing Plaintiffs to bring a private сause of action under
¶88 The fines and suspensions provided under Title 16 are not designed to fully address a Title 19 violation. See
¶89 However, as support for its argument that Title 16 provides the exclusive remedy, the majority contends that here, the voters could have been protectеd from the Committee‘s failure to disclose its sponsor “through Title 16” “as early as February and at least by mid-April.” See supra ¶ 25. There are several flaws in this argument. Based on the record, nothing would have alerted Plaintiffs that NextGen was a sponsor in February. The Committee‘s original statement of organization and application certainly make no reference to NextGen. Indeed, there were no public filings indicating NextGen‘s role as sponsor until the Committee‘s April 17 campaign finance report. As noted above, for the thousands of uninformed voters who may have signed the initiative petitions before that date, Title 16 does not provide a suitable remedy. See supra ¶ 88.
¶90 More importantly, assuming there was sufficient information to initiate a Title 16 action by mid-April, it does not follow that Plaintiffs are, as a matter of law, precluded from bringing an action under Title 19. If a Title 16 action had been initiated in April, this might have allowed the Committee to correct its defective filings and obtain enough signatures to place the Initiative on the ballot. But the duty to comply with the law is on the Committee, and its failure to do so is not grounds to abrogate the important right of all citizens in this state to pursue a private cause of action under
IV.
¶91 The question, then, is whether NextGen is a sponsor. If it is, the Committee violated Title 19 and the Initiative is invalid.
A.
¶92 In Arizona, a sponsor is defined broadly. It includes “any person” that “establishes,” “administers,” “contributes financial support to the administration of [a PAC],” or that has “common or overlapping membership or officers” with a PAC.
¶93 Section 16-901(47), by its terms, does not apply to a person or an organization that simply contributes money to a PAC. N. Valley Emergency Specialists, L.L.C. v. Santana, 208 Ariz. 301, 303 ¶ 9 (2004) (explaining that a statute‘s language is “the best and most reliable index” of its meaning (citation omitted)). Rather, the contributions must be directed “to the administration of” a PAC.
¶94 The statute‘s legislative history supports this construction. See State ex rel. Montgomery v. Harris, 234 Ariz. 343, 345 ¶ 13 (2014) (stating that if a statute‘s language is ambiguous, we will consider its relevant legislative history in construing its meaning). The current definition was proposed by the Secretary of State and was drafted to make it clear that the term “sponsor[]” applies to “groups that establish, administer or contribute financial support to the administration of the committee, rather than just making contributions to the committee.” Ariz. H.R. Minutes of Comm. on Judiciary, 41st Leg., 2d Reg. Sess. 7 (Mar. 17, 1994) (emphasis added).
¶95 In his concurring opinion, Chief Justice Bales contends that the term “sponsor” only applies to corporations or labor unions that establish “separate segregated funds” to make financial contributions to political candidates. See supra ¶¶ 66-67; see also
¶96 In Arizona, sponsors are defined broadly, and include virtually any individual or group. See supra ¶ 92. Our statutes do not limit the definition of a sponsor to corporations and labor unions establishing separate segregated funds. See supra ¶ 92. Indeed, the Secretary of State, who drafted the current statutory definition, has not restricted the application of sponsor to corporate and union PACs. See supra ¶ 79. In contrast, the Legislature has specifically limited the application of statutes regarding PACs based on “separate sеgregated funds” to those “established by a corporation, limited liability company, labor organization or partnership.”
¶97 Chief Justice Bales’ concern that Arizona‘s broad statutory definition of a sponsor results in “unwieldy committee names” and eliminates unsponsored PACs is based on the unwarranted assumption that any person or organization contributing money to a PAC qualifies as a sponsor. See supra ¶ 68. As noted above, a person or group does not qualify as a sponsor simply by contributing
B.
¶98 Title 19 requires a PAC to file a statement of organization and an initiative application listing the name of any sponsor. See supra ¶¶ 79-86. A PAC is not authorized to conceal or omit the identity of a sponsor in these documents; to permit such a noncompliant, defective filing would render the filing provisions in
¶99 When a PAC files a statement of organization or initiative application that fails to disclose a sponsor, such documents are invalid, and do not satisfy the filing requirements of
C.
¶100 The Committee‘s lack of disclosure began when it filed its original statement of organization and its initiative application. The Committee did not list a sponsor in either of these documents. It also did not incorporate the name of any sponsor in its committee name. Rather, the Committee represented that it was an unsponsored PAC until May 14, 2018.4 Then, for the first time, it listed the LLC as a sponsor in its amended statement of organization.
¶101 The facts, however, show that the Committee was a sponsored PAC after the LLC was formed. Daryl Tattrie served as the Committee‘s Treasurer and as one of the LLC‘s “Members.” Thus, the LLC qualified as a sponsor because it shared “common or overlapping membership” with the Committee.
¶102 Perhaps this was a careless oversight. But this pattern of nondisclosure continued with NextGen. The Committee did not list NextGen as a sponsor in either its original or amended statement of organization. Additionally, the Committee has never incorporated NextGen into its committee name.
¶103 The Committee‘s campaign finance reports, however, show that NextGen was a sponsor. Indeed, NextGen helped establish the Committee and has been involved in administering the Committee since its inception. See Mathieu v. Mahoney, 174 Ariz. 456, 457 n.1 (1993) (stating that this Court may take judicial notice of public records filed with the Secretary of State). In its first-quarter report, the Committee‘s Treasurer avowed that, at the time the Committee registered as a PAC, it had no cash on hand. See
¶104 Throughout the petition circulation process, virtually all of the Committee‘s funding and in-kind support came from NextGen. In short, NextGen provided the only viable source of funding to operate and administer the Committee. The Committee‘s first-quarter report (filed April 17) shows it received $957,346.67 from NextGen, while all other contributions were $0. Indeed, from the Committee‘s inception until the petitions were filed on July 5, NextGen contributed $6,857,346.67 to the Committee; all other contributions combined were $318.36. See Clean Energy for a Healthy Ariz., Campaign Finance Report: Amended 2018 6th Report (1st Quarter) (2018), https://apps.azsos.gov/apps/election/cfs/search/PublicReports/2018/6970C81E-5195-4311-92F0-75B5A05F2F80.pdf [https://perma.cc/2GMR-3896]; Clean Energy for a Healthy Ariz., Campaign Finance Report: Amended 2018 7th Report (2nd Quarter) (2018), https://apps.azsos.gov/apps/election/cfs/search/PublicReports/2018/8857E34A-F8E7-43EE-BCFA-A66A8C654176.pdf [https://perma.cc/ZK6W-9AV7]; Clean Energy for a Healthy Ariz., Campaign Finance Report: 2018 8th Report (Pre-Primary) (2018), https://apps.azsos.gov/apps/election/cfs/search/PublicReports/2018/874642B3-5BC9-4915-B5BE-DC12977922DA.pdf [https://perma.cc/6ADD-8CWJ].
V.
¶105 Under the Arizona Constitution, the people of Arizona have the power to propose and enact laws by initiative.
[t]his would run counter to the general spirit of the initiative and referendum, which recognizes “no reason why the interest of a citizen may not be as great in preventing an initiative petition not legally sufficient from being submitted to a vote as in compelling that one legally sufficient should be so submitted.”
Kromko, 168 Ariz. at 56 (quoting Barth v. White, 40 Ariz. 548, 553 (1932)); cf.
¶106 Here, the Committee is proposing an amendment to the Arizona Constitution. If enacted, this measure is immune to repeal by the lеgislature.
¶107 The Committee suggests, however, that even if NextGen qualified as a sponsor, its support of the Initiative was fully disclosed in its campaign finance reports. These reports do show NextGen‘s financial contributions to the Committee. However, this information was not available to the people who signed the Initiative petitions before the Committee filed its first campaign finance report on April 17. And, of course, if the Committee had properly disclosed NextGen as a sponsor, voters may well have learned that NextGen was sponsoring the Initiative when—by virtue of the committee name—they read the Committee‘s solicitation letters or watched its campaign advertisements.
¶108 In either case, it is not up to the Committee to decide how it will comply with the law. It must comply with both the campaign finance requirements of Title 16 and
VI.
¶109 Finally, although the majority does not address this issue, I would reverse the trial court‘s dismissal of Plaintiffs’ claim on the grounds of laches. Plaintiffs filed their
¶110 Although NextGen‘s financial contributions have been available to the public since April 2018, it would be unreasonable to expect private parties to investigate and call attention to potential legal violations at the risk of foreclosing a then-unripe private cause of action—especially where there is no guarantee that a circulating initiative measure will garner the requisite signatures to qualify for the ballot. See Senate of Cal. v. Jones, 988 P.2d 1089, 1097 (Cal. 1999) (“It would place an unreasonable and unrealistic burden on those who may wish to challenge an initiative measure, as well as on the courts, to adopt a rule that would require any preelection challenge to an initiative measure to be brought while petitions still are being circulated and prior to the time that a measure qualifies for the ballot.“). Thus, because no delay occurred, laches does not bar Plaintiffs’ claim.