The Colorado Court of Appeals issued its opinion in Colorado Common Cause v. Gessler, Secretary of State on August 30, 2012.
Rulemaking Authority—Campaign Finance Laws.
This case arose out of a challenge to the Colorado Secretary of State’s (Secretary) rulemaking authority brought by plaintiffs, Colorado Common Cause and Colorado Ethics Watch, pursuant to CRS § 24-4-106. The Secretary appealed the trial court’s order finding he exceeded his rulemaking authority in promulgating Rule 4.27. [Rule 4.27 has since been renumbered as Rule 4.1, 8 Code Colo. Regs. 1505–6.] The order was affirmed.
In 2002, Colorado voters adopted the Campaign and Political Finance Amendment (Amendment), which sets forth specific disclosure requirements that apply to various categories of participants in the elections process. The Amendment also regulates “issue committees” that advocate for or against ballot issues or questions. The Amendment incorporates the registration and disclosure requirements set forth in the Fair Campaign Practices Act (Act). In November 2010, a panel of the Tenth Circuit held in Sampson v. Buescher, 625 F.3d 1247 (10th Cir. 2010), that the financial burden of complying with the registration and reporting requirements for issue committees was substantial and the public interest in such information was minimal.
In response to Sampson, the Secretary commenced a rulemaking process to implement the decision. As part of this process, the Secretary published proposed Rule 4.27, which ultimately was adopted.Rule 4.27 states that “[a]n issue committee shall not be subject to any of the requirements of [the Amendment] or [the Act] until the issue committee has accepted $5,000 or more in contributions or made expenditures of $5,000 or more during an election cycle.” The contributions and expenditure made before reaching this threshold are not required to be reported.
Plaintiffs sued under CRS § 24-4-106. The trial court held that the Secretary had exceeded his rulemaking authority and dismissed the Secretary’s counterclaim for a declaration that the definition of issues committee is unenforceable until such a rule is adopted.
The Court of Appeals noted that an agency does not have authority to promulgate rules that modify or contravene statutory or constitutional provisions. Rule 4.27 creates a contribution and expenditure threshold of $5,000 that triggers an issue committee’s duty to register and disclose. The Act establishes a threshold of $200. On its face, Rule 4.27 conflicts with the clear requirements of Colorado law. Thus, unless Sampson abrogated the $200 threshold, the Secretary lacked the authority to promulgate the rule. The Secretary argued Sampson did just that. The Court disagreed.
The Tenth Circuit declined to address the facial challenge to Colorado’s campaign finance laws, holding only that the application of those laws under the specific facts of Sampson unconstitutionally burdened their freedom of association. The Circuit specifically acknowledged that Colorado campaign finance laws may be constitutionally applied outside of the context presented in Sampson. Consequently, Rule 4.27 sweeps far too broadly. The rule was set aside as void and the order was affirmed.
Summary and full case available here.