December 12, 2017

Colorado Court of Appeals: Payments for Vendor Tables at Republican Convention Were Not Political Contributions

The Colorado Court of Appeals issued its opinion in Campaign Integrity Watchdog v. Colorado Republican Committee on Thursday, October 5, 2017.

Administrative Law Judge—Campaign Contributions—Value of Services—Reportable—C.R.S. §§ 1-45-108(1)(a)(I) and -103(6)(b).

An administrative law judge (ALJ) held a hearing and determined that the Colorado Republican Committee (CRC) improperly failed to report three payments for vendor tables at its 2016 Republican Party assembly and convention. The CRC was fined and sanctioned for failing to report contributions.

On appeal, CRC contended that the ALJ erred in determining that the three payments for vendor tables at the convention were reportable contributions under state law and not properly reported by CRC. C.R.S. § 1-45-108(1)(a)(I) requires political committees to report receipt of contributions of $20 or more and to report expenditures and obligations. C.R.S. § 1-45-103(6)(b), which defines “contribution,” applies to all contributions “for which the contributor receives compensation or consideration,” and thus applies to the payments at issue here. Under the plain language of this section, political parties are required to report only that portion of payments for services that exceeds the value of the services rendered. Here, Campaign Integrity Watchdog provided no evidence that the value of the vendor tables was actually less than the $350 CRC charged. Therefore, the ALJ erred in finding that the payments at issue were reportable contributions under state law.

The part of the order imposing a fine and sanctions against CRC for failing to disclose the relevant payments was reversed.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: 42 U.S.C. § 1988 Damages Not Properly Awarded Under Colorado Election Code

The Colorado Supreme Court issued its opinion in Frazier v. Williams, Colorado Secretary of State on Monday, September 11, 2017.

Election Proceedings under C.R.S. § 1-1-113—42 U.S.C. § 1983—Supremacy Clause.

The Colorado Supreme Court held that claims brought under C.R.S. § 1-1-113 are limited to those alleging a breach or neglect of duty or other wrongful act under the Colorado Election Code. The language of C.R.S. § 1-1-113 limits claims that may be brought to those alleging a breach or neglect of duty or other wrongful act under “this code,” meaning the Colorado Election Code. The court emphasized that Colorado courts remain entirely open for adjudication of 42 U.S.C. § 1983 (2012) claims, including on an expedited basis if a preliminary injunction is sought, and therefore C.R.S. § 1-1-113 does not run afoul of the Supremacy Clause. To the extent that Brown v. Davidson, 192 P.3d 415 (Colo. App. 2006), holds to the contrary, it is overruled.

Summary provided courtesy of Colorado Lawyer.

Mental Health Bill Vetoed; Restaurant Safety Bill Sent to Secretary of State Without Signature

On Thursday, June 9, 2016, Governor Hickenlooper vetoed SB 16-169, “Concerning Changes Related to the Seventy-Two-Hour Emergency Mental Health Procedure.” SB 16-169 would have made several changes to the procedures for 72 hour mental health holds for people who are dangerous to themselves or others, including allowing them to be detained in law enforcement facilities instead of hospitals. The governor vetoed the bill, citing concerns about due process protections for persons having mental health emergencies.

Governor Hickenlooper also sent a bill to the Secretary of State without a signature on Thursday. HB 16-1401, “Concerning the Regulation of Retail Food Establishments,” will become law at 12:01 a.m. on June 11, 2016, and will take effect on August 10, 2016. The bill increases the annual licensing fees paid by retail food establishments beginning January 1, 2017, with provisions for additional fee increases in 2018 and 2019. The bill also creates a new license for a limited retail food establishment that prepares or serves food that does not require time or temperature control for safety, provides self-service beverages, offers prepackaged commercially prepared food and beverages requiring time or temperature control or only reheating commercially prepared foods that require time or temperature control for safety for retail sale to consumers, and requires the CDPHE to ensure significant statewide compliance with the federal Food and Drug Administration’s voluntary National Retail Food Regulatory Program standards. Governor Hickenlooper cited concerns raised by county governments among his reasons for neither signing nor vetoing the bill.

For a complete list of Governor Hickenlooper’s 2016 legislative actions, click here.

SB 16-106: Giving Secretary of State Authority to Appoint ALJs to Handle Campaign Finance Complaints

On January 29, 2016, Sen. Chris Holbert and Rep. Joseph Salazar introduced SB 16-106Concerning Measures to Facilitate The Efficient Administration of Colorado Laws Governing Campaign Finance, and, in Connection Therewith, Making and Reducing an Appropriation. The bill was introduced in the Senate State, Veterans, & Military Affairs Committee, where it was amended and referred to Appropriations. The Senate Appropriations Committee further amended the bill and referred it to the Senate floor for Second Reading. The bill passed Second Reading in the Senate with amendments and passed Third Reading with no further amendments. The bill was referred to the House and introduced in the State, Veterans, & Military Affairs Committee.

This bill aims to do two things in order to facilitate the administration of Colorado laws governing campaign finance. First, Section 1 of the bill modified the definition of limited liability company in the Fair Campaign Practices Act. The reengrossed bill, however, does not provide the new definition for limited liability company.

Second, C.R.S. § 24-30-1004(1)(a) of the bill gives the Secretary of State the authority to appoint and designate persons to serve as Administrative Law Judges (ALJ) in connection with any complaint alleging a violation of the campaign finance laws that is referred to such ALJ. Additionally, Section 2 of the bill specifies the procedures by which ALJ appointments are to be made.

Specifically, under Subsection (I), the Secretary of State shall appoint two persons, who must have been affiliated with a major political party for at least five years, to a recommendations committee to assist in appointing ALJs.

Under Subsection (II), the committee must solicit with 30 days of appointment, by notice on the Secretary of State’s website, a list of candidates being considered for an ALJ appointment.

Subsection (IV) provides that, not later than 30 days after posting the list of candidates for notice & comment, the recommendations committee shall recommend two candidates for each ALJ appointment opening to the Secretary of State. The bill also provides that, for the initial appointment, five candidates shall be recommended.

Subsection (V) provides the term lengths for the appointed ALJs. The initial three appointments will serve terms of two years, three years, and four years, respectively. The term for appointments made following the initial ALJs will be three years.

Furthermore, the bill stipulates the minimum requirements, powers, and duties for a person appointed to be an ALJ. Section 2 also requires the Secretary of State, not later than January 1, 2017, to establish and maintain a program to train ALJs to undertake their powers and duties.

Mark Proust is a 2016 J.D. Candidate at the University of Denver Sturm College of Law.

Colorado Court of Appeals: Secretary of State Breached Public Trust by Using Public Funds for Private Purposes

The Colorado Court of Appeals issued its opinion in Gessler v. Grossman on Thursday, May 7, 2015.

Breach of the Public Trust—Discretionary Fund Statute.

In August 2012, Colorado Secretary of StateGessler traveled to Florida to attend and present at a two-day program sponsored by the Republican National Lawyers Association (RNLA). The RNLA seminar ended during the day on August 25, and Gessler stayed an additional night at an increased hotel rate and at the state of Colorado’s expense. The next day, he traveled to a different Florida city to attend the Republican National Convention (RNC).

Gessler used his statutorily provided discretionary fund to pay the $1,278.90 in documented travel and meal expenses incurred at the RNLA seminar. In addition, he requested reimbursement of “any remaining discretionary funds” in his discretionary account. He did not provide any documentation, but ultimately received $117.99 as the result of the request.

Colorado Ethics Watch filed a complaint with the Independent Ethics Commission (IEC). It alleged that Gessler had made false statements on travel expense reimbursement requests and misappropriated funds for personal or political uses. The IEC found that Gessler spent $1,278.90 of his discretionary account primarily for partisan—and therefore personal—purposes, in violation of the discretionary fund statute’s requirement that the fund be used in pursuit of official business. Gessler similarly violated the statute by requesting and receiving the balance in his discretionary fund without any documentation. Together, these constituted a breach of the public trust for private gain, in violation of the public trust statute, CRS § 24-18-103. Gessler sought judicial review of the IEC’s findings based on several assertions, each of which the district court rejected in a thorough written opinion.

On appeal, Gessler argued that Colo. Const. art. XXIX, § 5 applies only to gifts, influence peddling, and standards of conduct and reporting requirements that expressly delegate enforcement to the IEC. The Court of Appeals disagreed, noting that § 5 gives the IEC authority “under any other standards of conduct and reporting requirements as provided by law.”

Gessler also argued that the public trust statute does not fall within the ambit of § 5 because it is “hortatory” only and does not provide a specific standard of conduct. The Court disagreed. It found that the statute sets forth specific standards of conduct. It also noted that Colo. Const. art. XXIX, § 6 provides an express remedy for violations of the public trust for private gain.

Gessler contended that the discretionary fund statute does not fall within the ambit of § 5. The Court rejected Gessler’s premise that Article XXIX excludes standards of conduct related to compensation. It also noted that even if compensation were excluded from the IEC’s jurisdiction, the discretionary fund statute does not constitute compensation. Discretionary funds are not received in return for services rendered but may only be used “in pursuance of official business.” It also rejected Gessler’s argument that he had unfettered discretion over the use of discretionary funds as leading to an absurd result, as well as rejecting Gessler’s claim that there is no specific standard of conduct for expenditure of the funds. The Court pointed to the requirement that those funds be used “in pursuance of official business.”

Gessler also argued that the IEC had construed its jurisdiction so broadly as to render § 5 vague and overbroad. The Court rejected this contention by noting it had construed § 5 so as to recognize the applicable limits to the IEC’s jurisdiction.

Gessler contended that if the IEC had jurisdiction, then its decision was arbitrary or capricious. The Court disagreed, finding substantial evidence in the record to support the IEC’s determination that Gessler improperly used his discretionary fund to attend the RNLA seminar and the RNC.

Finally, the Court rejected Gessler’s argument that he was denied procedural due process because he was not given advance and adequate notice of the standards of conduct he was accused of having violated. The Court found that Gessler had received ample notice of the claims asserted against him and, in any event, there was no support for any claim of prejudice to Gessler as a result of the notice he received. The judgment was affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Tenth Circuit: Politically Active Organization Entitled to Media Exemption from Campaign Disclosure Requirements

The Tenth Circuit Court of Appeals issued its opinion in Citizens United v. Gessler on October 27, 2014, and reissued it as a published opinion on Wednesday, November 12, 2014.

Citizens United is a nonprofit corporation engaged in independent political and religious activity. Since 2004 it has produced and released 24 films on political and religious topics, including Rocky Mountain Heist, which discussed political candidates by name and was set to release just before the 2014 mid-term election. Because the film unambiguously referred to Colorado elected officials by name, it comes under some of Colorado’s election laws regarding “electioneering communications” and “independent expenditures.” In April 2014, Citizens United sought a ruling from the Secretary of State that Rocky Mountain Heist and related advertising would not qualify as “electioneering communications” or “expenditures” under Colorado law. In support of its motion, it cited a similar exemption from the Federal Election Commission under the Federal Election Campaign Act’s disclosure and expenditure rules, which are similar to Colorado’s. The FEC determined Citizen United was entitled to the press exemption. The Secretary denied its request, finding that the film and advertising did not fall under Colorado’s exemption for print media and Citizens United is not a broadcast facility. The Secretary’s order concluded that Rocky Mountain Heist would be an electioneering communication not entitled to any exemption.

After the Secretary denied its motion, Citizens United brought suit against the Colorado Secretary of State in the U.S. District Court for the District of Colorado, alleging Colorado’s reporting and disclosure requirements violate the First Amendment. It sought a preliminary injunction against enforcing the provisions that do not apply to exempted media, which the district court denied, finding that Citizens United’s facial and as-applied challenges were not likely to succeed on the merits. Citizens United appealed.

The Tenth Circuit agreed with Citizens United’s as-applied challenge to Colorado’s campaign disclosure requirements, finding that under an exact scrutiny standard, the First Amendment required the Secretary to treat Citizens United the same as the exempt media. The Tenth Circuit questioned the Secretary’s assertion that journalism seeks to inform the public in a transparent, balanced, and accountable manner, noting that “our nation’s founding and history are replete with examples of highly partisan newspapers, and many observers would say that some modern media continue the tradition.” The Tenth Circuit similarly disposed of the Secretary’s argument that the media should be distinguished from “single-shot speakers,” finding instead that Citizens United was well-established for these purposes so disclosure of its financial backers was unnecessary. The Tenth Circuit found Citizens United entitled to a media exemption from disclosure and expenditure requirements under Colorado law.

The Tenth Circuit did not find that the exemption extended to advertisements for Rocky Mountain Heist, which mention candidates and express support for or opposition to candidates. These politically charged ads require disclosure of financial supporters so the general public can make an informed decision about the legitimacy of the advertisements.

The district court’s denial of the preliminary injunction was reversed, and the case was remanded with instructions to issue the preliminary injunction. Judge Phillips dissented.

Tenth Circuit: No Constitutional Violation for Potentially Traceable Ballots in 2012 Election

The Tenth Circuit Court of Appeals issued its opinion in Citizen Center v. Gessler on Tuesday, October 21, 2014.

After the 2012 election, election officials in six Colorado counties — Larimer, Jefferson, Boulder, Chaffee, Eagle, and Mesa — theoretically had the ability to trace votes to individual voters because each ballot had a unique barcode or number, some ballots may have been unique among ballots cast on an electronic voting machine, and some ballots may have been unique within a batch of ballots. Citizen Center, a Colorado nonprofit, sued the secretary of state and the county clerks for the six counties (collectively, “clerks”), asserting that the use of traceable ballots violated its members’ constitutional rights, including the rights to (1) vote, (2) free speech and association, (3) substantive due process, (4) equal protection, and (5) procedural due process. One of the clerks settled with Citizen Center. All clerks moved to dismiss for lack of standing, and the clerks included an alternative argument for dismissal under F.R.C.P. 12(b)(6). The district court dismissed the claims on standing without reaching the 12(b)(6) argument. Citizen Center appealed.

The Tenth Circuit first addressed the clerks’ argument that Citizen Centers’ appeal was moot because the election had already passed, and also because the secretary of state had adopted new regulations banning the challenged practices. The Tenth Circuit found that although the 2012 election had passed, and although the secretary of state had promulgated rules to prevent future traceable ballots, not every harm had been redressed. Next, the Tenth Circuit found that Citizen Center had standing on the parts of the claim related to denial of equal protection and procedural due process, but its alleged injury was too speculative to provide standing. Finally, the Tenth Circuit held that the first amendment complaint failed to state a valid claim against the clerks. These findings resulted in termination of all claims except those against the secretary of state for denial of equal protection and procedural due process.

Addressing the procedural due process claim first, the Tenth Circuit determined that Citizen Center’s claim was facially deficient. Citizen Center lacked a liberty interest in an untraceable ballot. Citizen Center claimed that the use of potentially unique ballots and the use of potentially unique ballots within a batch violated the Colorado Constitution. However, the Constitution only prohibits the use of unique numbers on ballots, and the use of batch numbers is not prohibited, so the secretary of state’s rules requiring numbers to be used on at least 10 ballots within a batch did not violate the Constitution. Because Citizen Center lacked a protected liberty interest, its claims for due process failed as a matter of law.

Next, the Tenth Circuit turned to the Equal Protection claims, which were based on different voting practices in different counties. The Tenth Circuit quickly disposed of this claim as well, finding that clerks within counties were allowed to develop different voting practices, and as long as there was no discrimination between voters in the same county, there was no Equal Protection violation.

The Tenth Circuit affirmed dismissal of the claims involving denial of substantive due process, the right to vote, and the right to free speech. For the claims involving procedural due process and equal protection, the Tenth Circuit affirmed on the clerks’ alternate ground under F.R.C.P. 12(b)(6). However, the secretary of state did not move for dismissal under 12(b)(6), so for the claims against the secretary of state, the Tenth Circuit reversed and remanded for further proceedings.

Notary Program Rules Amended by Secretary of State

On Tuesday, October 7, 2014, the Colorado Secretary of State gave notice of the permanent adoption of changes to the notary rules. The changes are extensive, including new requirements for exam-taking for new notaries and those subject to claims of misconduct; new guidelines for electronic notarization; requirements for notary trainers; and more. A redline of the changes is available here.

 

Colorado Supreme Court: Secretary of State Exceeded Rulemaking Authority in Expanding Contribution Limits

The Colorado Supreme Court issued its opinion in Gessler v. Colorado Common Cause on Monday, June 16, 2014.

Issue Committees—Colo. Const. art. XXVIII, § 2(10)(a)(II)—CRS § 1-45-108(1)(a)(I)—8 CCR § 1505-6:4.1.

The Supreme Court held that Sampson v. Buescher, 625 F.3d 1247 (10th Cir. 2010), did not facially invalidate either the $200 contribution and expenditure threshold for issue committees under art. XXVIII, § 2(10)(a)(II) of the Colorado Constitution or the retrospective reporting requirement under CRS § 1-45-108(1)(a)(I) of the Fair Campaign Practices Act. The Court further held that Secretary of State Rule 4.1., 8 Colo. Code Regs. § 1505-6:4.1 (2013), promulgated by the Secretary of State after Sampson was decided, conflicts with both the $200 threshold in article XXVIII and the retrospective reporting requirement in CRS § 1-45-108(1)(a)(I). Because the Secretary of State does not have authority to promulgate rules that conflict with other provisions of law, the Court affirmed the judgment of the court of appeals and set aside Rule 4.1.

Summary and full case available here.

Colorado Supreme Court: Secretary of State Exceeded Rulemaking Authority by Making Rule to Nullify Votes for Elected Official

The Colorado Supreme Court issued its opinion in Hanlen v. Gessler on Monday, April 7, 2014.

Election Law—Rulemaking Authority—Emergency Election Rules—School District Director Elections.

The Supreme Court considered whether the Colorado Secretary of State acted in excess of his rulemaking authority in promulgating Rule 10.7.5. The rule, which was promulgated as a temporary or emergency rule, permits designated election officials to determine, after ballots have been printed, that an individual appearing on the ballot is “not qualified for office,” and directs that votes cast for that individual are “invalid and must not be counted.”

The Court held that the rule is void. As a rule of general applicability, the rule conflicts with CRS § 1-4-1002(2.5)(a). It also contravenes the election code by permitting a designated election official to usurp the courts’ express authority to determine issues regarding a candidate’s eligibility that arise following certification to the ballot. Accordingly, the Court affirmed the judgment of the trial court on different grounds, and did not reach the question of whether the rule conflicts with CRS § 22-31-129, regarding school district director vacancies.

Summary and full case available here.

Victims’ Rights Act Cleanup, Passive Surveillance, and More Bills Signed by Governor

On Friday, April 4, 2014, Governor Hickenlooper signed six bills into law. To date, he has signed 119 bills into law and vetoed two bills. Summaries of the six bills signed Friday are here.

  • HB 14-1148 – Concerning Guidelines for Ensuring the Rights of Victims of Crime to Participate in the Criminal Justice System, by Rep. Rhonda Fields and Sen. Cheri Jahn. The bill adds violations of civil protection orders in sex offense cases, coercion of involuntary servitude, and all child prostitution offenses to the list of crimes to which the Victims Rights Act (VRA) applies, and also amends the VRA regarding certain victim rights and notifications, among other things.
  • HB 14-1152 – Concerning Passive Surveillance Records of Governmental Entities, by Rep. Polly Lawrence and Sen. Mark Scheffel. The bill codifies the current practice of several governmental entities that use passive surveillance by specifying dates by which the passive surveillance content be destroyed.
  • HB 14-1160 – Concerning Overweight Vehicle Permits for Divisible Loads, by Reps. Diane Mitsch Bush & Don Coram and Sens. Nancy Todd & Bernie Herpin. The bill exempts waste water vehicles operated by a city from maximum load restrictions and authorized a fleet fee for overweight vehicles.
  • HB 14-1182 – Concerning Changes for the 2015-16 School Year to Certain Public Education Accountability Measures Specified in the “Education Accountability Act of 2009” to Accommodate the Transition to Administering New Statewide Assessments, by Rep. Millie Hamner and Sen. Andy Kerr. The bill authorizes the Colorado Department of Education to assign accreditation ratings and recommend performance plans that fall outside specific actions recommended by statute.
  • HB 14-1184 – Concerning Conservancy Districts that are Organized for the Purpose of Preventing Floods, by Rep. Edward Vigil and Sen. Kevin Grantham. The bill makes changes to the Pueblo Conservancy District, including increasing the number of board members and specifying election procedures, and also clarifies that a vacancy is created on a water conservancy district board when a board member no longer lives in the district.
  • HB 14-1265 – Concerning the Regulation of Games of Chance, by Rep. Dominick Moreno and Sen. Ellen Roberts. The bill makes several changes to statutes regarding games of chance (such as bingo and raffles), including exempting food eaten by volunteer workers from prohibition on remuneration for volunteers, allowing progressive bingo jackpots to carry over to the next event at the same location, allowing bingo or raffle licensees to maintain a bank account specifically for the proceeds of progressive games, and more.

For a list of Governor Hickenlooper’s 2014 legislative decisions, click here.

HB 14-1206: Modifying the “Colorado Charitable Solicitations Act”

On January 30, 2014, Rep. Kathleen Conti and Sen. Jessie Ulibarri introduced HB 14-1206 – Concerning Modifications to the “Colorado Charitable Solicitations Act,” and, in Connection Therewith, Prohibiting Certain Charitable Solicitation Practices, Modifying the Secretary of State’s Fining Authority, Adjusting Registration Statement Requirements, and Specifying Requirements for Appointing Registered AgentsThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

As amended in the Senate, the bill amends the “Colorado Charitable Solicitations Act” (act) as follows:

  • Modifies the required content of charitable organization registration statements to eliminate unnecessary content;
  • Prohibits a charitable organization from aiding, abetting, or permitting a person paid solicitor to solicit contributions on its behalf unless the paid solicitor has complied with the requirements of the act;
  • Specifies that while information filed with the Secretary of State’s office by a charitable organization, professional fundraising consultant, or paid solicitor in connection with the person or organization’s registration is a public record, account numbers at banks or other financial institutions are not a public record;
  • Eliminates the fine amounts specified in the act for soliciting while unregistered, thereby allowing the secretary of state to set those fine amounts by rule;
  • Requires registered individuals and organizations to appoint a registered agent to receive notices, process, and other materials for the individual or organization; and
  • Modifies the fines that may be imposed for failing to timely file required documents with the secretary of state.

On March 4 the House gave final approval to the bill. The bill is assigned to the Senate State, Veterans, & Military Affairs Committee.