Gessler v. Colorado Common Cause

2014 CO 44, 327 P.3d 232, 2014 Colo. LEXIS 450, 2014 WL 2707750

• Court: Supreme Court of Colorado
• Decided: June 16, 2014
• Docket: Supreme Court Case No. 12SC783
• Status: Published

Opinions

CHIEF JUSTICE RICE

delivered the Opinion of the Court.

T 1 We granted certiorari ¹ to consider the lawfulness of Secretary of State Rule 4.1, 8 Colo.Code Regs. § 1505-6:4.1 (2013). Petitioner Colorado Secretary of State Seott Ges-sler ("Gessler") promulgated Rule 4.1 in response to Sampson v. Buescher, 625 F.3d 1247 (10th Cir.2010). Significantly, Rule 4.1 increases the contribution and expenditure threshold that triggers issue committee status from $200 to $5000 and exempts retrospective reporting of contributions and expenditures onee issue committee status is achieved. We hold that Sampson did not invalidate either the $200 contribution and expenditure threshold under article XXVIII, section 2(10)(a)(II) of the Colorado Constitution ("article XXVIII") or the retrospective reporting requirement under section 1-45-108(1)(a)(I), C.R.S. (20183), of the Fair Campaign Practices Act ("section 1-45-108"). Thus, because Rule 4.1's $5000 threshold and its retrospective reporting exemption clearly conflict with these provisions, we hold Rule 4.1 unlawful and set it aside. We therefore affirm the judgment of the court of appeals because the court of appeals properly concluded that Gessler exceeded his authority in promulgating Rule 4.1. See Colo. Common Cause v. Gessler, 2012 COA 147, ¶ 27, -- P.3d --.

I. Facts and Procedural History

T2 In 2010, the Tenth Cireuit decided Sampson, a campaign finance case that required the Tenth Cireuit to consider whether Colorado's registration and reporting requirements for issue committees² were unconstitutional as applied to the plaintiffs' small-scale³ issue committee. 625 F.3d at . Employing exacting serutiny, the Tenth Cireuit held that Colorado's requirements for issue committees violated the plaintiffs' freedom of association. Id. at 1249, 1261. To support its holding, the Tenth Cireuit reasoned both that the financial burden of complying with the issue committee requirements approached or exceeded the value of financial contributions made to the plaintiffs' political effort and that the governmental interest in enforcing such requirements is minimal when the amount contributed is so small. Id. Importantly, however, the Tenth Circuit explicitly declined to "draw a bright line below which a ballot-issue committee cannot be required to report contributions and expenditures." Id.

8 Recognizing that Sampson invalidated the registration and reporting requirements for at least some issue committees in Colorado, Gessler promulgated Rule 4.1 ⁴ to clarify which issue committees were subject to the requirements. Unlike the issue committee requirements that the Tenth Cireuit considered in Sampson-which establish a $200 contribution and expenditure threshold that triggers issue committee status and require both retrospective and prospective reporting of contributions and expenditures once issue committee status is achieved-the new requirements under Rule 4.1 establish a $5000 contribution and expenditure threshold and require only prospective reporting of contributions and expenditures.

{4 Shortly after Rule 4.1 was adopted, Respondents Colorado Common Cause and Colorado Ethics Watch filed this action in Denver District Court pursuant to section 24-4-106, C.R.S. (2018), alleging that Gessler exceeded his rulemaking authority by promulgating Rule 4.1. Emphasizing Rule 4.1's departure from both the $200 contribution and expenditure threshold under article XXVIII and the retrospective reporting requirement under section 1-45-108, Respondents urged the district court to set aside the rule. Ruling in favor of Respondents, the district court began its analysis by noting that neither article XXVIII nor section 1-45-108 was invalidated as a regult of Sampson's as-applied holding. In light of the continued viability of these provisions, the district court found that the increased contribution and expenditure threshold in Rule 4.1 "not only conflicted] with, but abrogate[d], existing constitutional and statutory requirements" for issue committees. Moreover, the district court observed that Rule 4.1's retrospective reporting exemption, which excludes the first $5000 from reporting "even if it is part of a multi-million dollar campaign," did not align with Sampson's narrow as-applied holding. Emphasizing that "the Secretary is not empowered to promulgate rules that add to, modify, or conflict with constitutional provisions," the district court concluded that Ges-sler's promulgation of Rule 4.1 exceeded his authority. Accordingly, the district court set aside Rule 4.1.

T5 Gessler appealed, arguing that he did not exceed his authority because Rule 4.1 merely clarified the applicability of the registration and reporting requirements to issue committees in light of Sampson. According to Gessler, such clarification was necessary because the Tenth Cireuit created constitutional ambiguity by declining to specify which issue committees could be subject to Colorado's registration and reporting requirements. The court of appeals disagreed, holding that Gessler exceeded his authority in promulgating Rule 4.1 and that the rule must be set aside. Common Cause, 127. In affirming the district court's order, the court of appeals noted that Rule 4.1 not only "effectively modified and contravened Colorado campaign finance law" but also "invalidate[d] the requirements imposed on issue committees far beyond the reach of Sampson." Id. at ¶¶ 25, 27.

1 6 Gessler appealed again, and we granted certiorari review.

II. Standard of Review

17 The court of appeals' holding that Gessler exceeded his rulemaking authority hinges on the court of appeals' determination that Rule 4.1 conflicts with article XXVIII and section 1-45-108. Constitutional interpretation and statutory interpretation present questions of law that we review de novo. See Bruce v. City of Colo. Springs, 129 P.3d 988, 992 (Colo.2006); MDC Holdings, Inc. v. Town of Parker, 223 P.3d 710, 717 (Colo.2010). As part of our de novo review, "we may consider and defer to an agency's interpretation of its own enabling statute and [of] regulations the agency has promulgated." Bd. of Cnty. Comm'rs v. Colo. Pub. Utils Comm'n, 157 P.3d 1083, 1088 (Colo.2007). Such deference, however, is not warranted where, as here, the agency's interpretation is contrary to constitutional and statutory law. See, eg., Three Bells Ranch Assocs. v. Cache La Poudre Water Users Ass'n, 758 P.2d 164, 172 (Colo.1988); see also § 24-4-106(7), C.R.S. (2018) (providing that courts "shall hold unlawfal and set aside" any agency action that is "contrary to law" (emphasis added)).

IIL Analysis

T8 It is undisputed that the Secretary of State is vested with authority to promulgate rules that are necessary to administer and enforce campaign finance laws. See Colo. Const. art. XXVIII, § 9(1)(b) (providing that the Secretary of State "shall" promulgate such rules "as may be necessary to administer and enforce" any provision of article XXVIII); see also § 1-45-111.5(1), C.R.S. (2018); § 1-1-107(2)(a), C.R.S. (2018). This authority, however, is not limitless; the See-retary of State does not have authority to promulgate rules that conflict with other provisions of law. See § 24-4-108(4)(b)(IV), C.R.S. (2013) (providing that an agency rule can be adopted only if it "does not conflict with other provisions of law"); § 24-4-103(8)(a) (providing that "any rule ... which conflicts with a statute shall be void"); § 24-4-106(7) (requiring courts to set aside agency actions that are "contrary to law"). Thus, resolution of this case turns on whether Rule 4.1 conflicts with either the $200 contribution and expenditure threshold in article XXVIII or the retrospective reporting requirement in section 1-45-108-iLe., whether Gessler exceeded his authority in promulgating Rule 4.1. Gessler argues that he did not exceed his authority in promulgating Rule 4.1 because (1) Sampson created constitutional ambiguity by invalidating Colorado's registration and reporting requirements for at least some small-scale issue committees but declining to provide a bright-line rule, and (2) Rule 4.1 merely clarifies the line above which issue committees can be constitutionally subject to registration and reporting requirements. In contrast, Respondents contend that Gessler execeded his authority in promulgating Rule 4.1 because (1) Sampson did not facially invalidate these provisions, and (2) Rule 4.1's $5000 threshold and its retrospective reporting exemption are in direct conflict with article XXVIII and section 1-45-108.

T9 To evaluate the merits of these arguments, we start by determining whether Sampson invalidated either the $200 contribution and expenditure threshold in article XXVIII or the retrospective reporting requirement in section 1-45-108. If article XXVIII and section 1-45-108 were not facially invalidated by Sampson (i.e., if these provisions can still be constitutionally applied to any issue committees), the lawfulness of Rule 4.1 will depend on whether it conflicts with these provisions. Because we hold that Sampson did not facially invalidate article XXVIII and section 1-45-108, we next determine whether Rule 4.1 conflicts with the plain language of these provisions. If Rule 4.1 conflicts with either article XXVIII or section 1-45-108, then the rule must be set aside.⁵

A. Sampson Did Not Facially Invalidate Article XXVIII and Section 1-45-108

110 We begin our analysis by determining the extent to which Sampson invalidated the registration and reporting requirements for issue committees under article XXVIII and section 1-45-108. The ongoing validity of these provisions hinges on whether the Tenth Cireuit held article XXVIII and section 1-45-108 unconstitutional "on their face" or unconstitutional "as applied" to a particular set of circumstances. See Women's Med. Prof'l Corp. v. Voinovich, 130 F.3d 187, 193 (6th Cir.1997) (noting the "important difference in terms of outcome" between facial and as-applied challenges). Unlike a statute that is held unconstitutional on its face, which cannot be enforced in any future cireumstances, a statute that is held unconstitutional as applied can be enforced in those future civreumstances where it is not unconstitutional. Id.; see also Ada v. Guam Soc'y of Obstetricians & Gynecologists, 506 U.S. 1011, 1011, 113 S.Ct. 633, 121 L.Ed.2d 564 (1992) (Scalia, J., dissenting), denying cert. to 962 F.2d 1366 (9th Cir.1992) ("The practical effect of holding a statute unconstitutional 'as applied is to prevent its future application in a similar context, but not to render it utterly inoperative." (emphasis added)).⁶ Importantly, to determine whether a statute was held unconstitutional on its face or unconstitutional as applied, we look to "the breadth of the remedy employed." ⁷ See Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 331, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010); see also United States v. Nat'l Treasury Emps. Union, 513 U.S. 454, 477-78, 115 S.Ct. 1003, 130 L.Ed.2d 964 (1995) (contrasting a "facial challenge" with "a narrower remedy" that limits relief to the parties before the court).

[ 11 Looking to the breadth of the remedy employed by the Tenth Cireuit, it is clear that article XXVIII and section 1-45-108 were only invalidated as applied to the Sampson plaintiffs. The final sentences of the Tenth Cireuit's opinion are particularly instructive:

Here, the financial burden of state regulation on Plaintiffs' freedom of association approaches or exceeds the value of their financial contributions to their political effort; and the governmental interest in imposing those regulations is minimal, if not nonexistent, in light of the small size of contributions. We therefore hold that it was unconstitutional to impose that burden on Plaintiffs. We do not attempt to draw a bright line below which a ballot-issue committee cannot be required to report contributions and expenditures.... We say only that Plaintiffs' contributions and expenditures are well below the line.

625 F.3d at 1261 (emphasis added). The Tenth Circuit's narrow as-applied remedy, which was carefully tailored to the facts before the court, did not render article XXVIII and section 1-45-108 completely inoperable. Accordingly, both article XXVIII and section 1-45-108 can be enforced in future cireum-stances where such enforcement is constitutional (Le., in cireumstances that are different from those at issue in Sampson).⁸ See Ada, 506 U.S. at 1011, 113 S.Ct. 633.

B. Rule 4.1 Directly Conflicts With Article XXVIII and Section 1-45-108

1 12 Because article XXVIII and section 1-45-108 remain enforceable, we next determine whether Rule 4.1 conflicts with either of these provisions. If a conflict exists-Le., if Rule 4.1 is "contrary to law"-we must hold Rule 4.1 unlawful and set it aside. See § 24-4-106(7) (providing that "the court shall hold unlawful and set aside" any agency action that is "contrary to law"). Importantly, the language at issue in Rule 4.1, article XXVIII, and section 1-45-108 is unambiguous; our analysis is therefore limited to the plain language of these provisions. See Portercare Adventist Health Sys. v. Lego, 2012 CO 58, ¶ 12, 286 P.3d 525 ("When [statutory] language is unambiguous, we give effect to the plain and ordinary meaning of the section without resorting to other rules of statutory construction."); Regular Route Common Carrier Conference of Colo. Motor Carriers Ass'n v. Pub. Util Comm'n, 761 P.2d 737, 745 (Colo.1988) ("In construing an administrative rule, we apply those basic rules of interpretation which pertain to the construction of a statute.").

[ 13 Looking first to the plain language of Rule 4.1, two provisions of the rule prove to be particularly relevant to our analysis. The first provision, which establishes the contribution and expenditure threshold that triggers issue committee status, provides that "an issue committee shall not be subject to any of the requirements of Article XXVIII or Article 45 of Title 1, C.R.S., until the issue committee has accepted $5,000 or more in contributions or made expenditures of $5,000 or more during an election cycle." 8 Colo. Code Regs. § 1505-6:4.1 (2018) (emphasis added). The second provision, which addresses the reporting requirements once issue committee status is achieved, provides that the "contributions received and expenditures made before reaching the $5,000 threshold are not required to be reported." 8 Colo.Code Regs. § 1505-6:4.1.1 (2018) (emphasis added).

T14 Considering these provisions in light of the plain language of article XXVIII and section 1-45-108, two conflicts emerge. First, the relevant language in article XXVIII defines "issue committee," in part, as any group of two or more persons "that has accepted or made contributions or expenditures in excess of two hundred dollars to support or oppose any ballot issue or ballot question." Colo. Const. art. XXVIII, § 2(10)(a)(II) (emphasis added). On its face, the $5000 threshold established in Rule 4.1 directly conflicts with the $200 threshold established in article XXVIIL.⁹ Cf. Bd. of Cnty. Comm'rs v. Colo. Oil and Gas Conservation Comm'n, 81 P.3d 1119, 1125 (Colo.App.2003) (invalidating an agency rule amendment that replaced the words "operationally conflicting" with "any conflicting" because on its face the broader amended rule preempted local government actions and therefore conflicted with case law).

T 15 Second, the relevant language in seetion 1-45-108 provides that all issue committees "shall report to the appropriate officer their contributions received, expendi-twres made, and obligations entered into." § 1-45-108(1)(a)(I) (emphasis added). The plain language of section 1-45-108 does not restrict reporting to those contributions received and expenditures made after issue committee status is achieved; section 1-45-108 therefore requires reporting of contributions received and expenditures made both before and after issue committee status is achieved.¹⁰ Thus, on its face the reporting exemption in Rule 4.1-which necessitates only prospective reporting-directly conflicts with the retrospective reporting requirement established in section 1-45-108. Cf. Sanger v. Dennis, 148 P.3d 404, 408, 416 (Colo.App.2006) (agreeing with the district court's determination that an agency rule, which added an annual written consent requirement to the definition of "member," conflicted with article XXVIII because the consent requirement created a new condition not found in article XXVIII). Thus, because Rule 4.1 conflicts with both article XXVIII and section 1-45-108,¹¹ we hold Rule 4.1 unlawful and set it aside.

IV. Conclusion

{16 We hold that the $200 contribution and expenditure threshold for issue committees under article XXVIII, section 2(10)(a)(II) of the Colorado Constitution and the retrospective reporting requirement for issue committees under section 1-45-108(1)(a)(I) of the Fair Campaign Practices Act were not facially invalidated by the Tenth Cireuit's holding in Sampson. Because Rule 4.1 directly conflicts with these still-valid provisions, we hold Rule 4.1 unlawful and set it aside. Accordingly, we affirm the judgment of the court of appeals because the court of appeals properly concluded that Gessler exceeded his authority in promulgating Rule 4.1.

JUSTICE EID concurs in the judgment in part and dissents in part. JUSTICE HOOD concurs in part and dissents in part.

1 . We specifically granted certiorari to review the following issues:

1. Whether the Secretary of State correctly concluded that Sampson v. Buescher, 625 F.3d 1247 (10th Cir.2010), invalidated registration and reporting requirements for all issue committees that raise or spend similarly small amounts of money.

2. Based on Sampson v. Buescher, 625 F.3d 1247 (10th Cir.2010), whether the Secretary of State, under his constitutional and statutory authority to "[pJromulgate such rules ... as may be necessary to administer and enforce" campaign finance laws, can promulgate a rule that establishes the line at which an issue committee's financial contributions or expenditures exceed the burden of state regulation.

2 . Under article XXVIII, section 2(10)(a) of the Colorado Constitution, "issue committee" is defined as

any person, other than a natural person, or any group of two or more persons, including natural persons: (I) That has a major purpose of supporting or opposing any ballot issue or ballot question; [and] (II) That has accepted or made contributions or expenditures in excess of two hundred dollars to support or oppose any ballot issue or ballot question.

3 . The Sampson plaintiffs, who opposed a ballot initiative to annex the Parker North neighborhood into the Town of Parker, received a total of $2239.55 in contributions ($813.55 were in-kind contributions and $1426.00 were cash contributions) and made a total of $1992.37 in expenditures ($1178.82 went toward attorney fees). Sampson, 625 F.3d at 1249, 1260 n. 5. We use the phrase "small-scale issue committee" to denote issue committees that raise and spend similarly small amounts of money. In so doing, we do not imply that the size of contributions and expenditures is the only relevant factor for determining whether future issue committees are sufficiently similar to the Sampson plaintiffs to be excused from the registration and reporting requirements under article XXVIII and section 1-45-108.

4 . Rule 4.1 was originally codified as Rule 4.27. See 8 Colo.Code Regs. § 1505-6:4.1 (2013). Although the parties, the district court, and the court of appeals refer to Rule 4.27, we refer to the current numbering of the rule in order to reduce confusion for future litigants.

5 . Regardless of the constitutional ambiguities created by Sampson, Gessler does not have authority to promulgate rules that are contrary to law. See supra pp. 234-35. Accordingly, to the extent that Rule 4.1 conflicts with article XXVII or section 1-45-108, the ambiguities created by Sampson are immaterial to our analysis.

6 . Similarly, the Colorado Constitution contemplates that provisions in article XXVIII remain enforceable even if such provisions are held unconstitutional as applied to a particular set of circumstances. Colo. Const. art. XXVIII, § 14 ("If any provision of this article or the application thereof to any persons or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the article which can be given effect without the invalid provision or application. ...").

7 . In other words, what is pleaded in a complaint is not dispositive of the facial versus as-applied inquiry. For example, the Sampson plaintiffs alleged that the registration and reporting requirements for issue committees were both facially unconstitutional and unconstitutional as applied. The Tenth Circuit, however, declined to analyze their facial arguments given its determination that the laws were unconstitutional as applied. See Sampson, 625 F.3d at 1253-54 ("'We agree with [plaintiffs'] as-applied First Amendment argument, holding that the Colorado registration and reporting requirements have unconstitutionally burdened their First Amendment right of association. Because of that ruling, we need not address their other contentions."). Thus, in determining whether the Tenth Circuit invalidated the issue committee registration and reporting requirements on their face or as applied, we are not bound by the allegations in the plaintiffs' complaint.

8 . Because resolution of this case turns on whether Rule 4.1 conflicts with article XXVIII and section 1-45-108, we need not-and do not-delineate exactly which issue committees can be constitutionally subject to the issue committee registration and reporting requirements.

9 . It is worth noting that the size of the disparity between the threshold in Rule 4.1 and the threshold in article XXVIII is immaterial to our analysis. Thus, a conflict would exist even if the threshold in Rule 4.1 was $201.

10 . Our conclusion that section 1-45-108 contemplates both retrospective and prospective reporting reflects article XXVIII's underlying purpose to provide the public with "full and timely disclosure" of campaign contributions and expenditures. See Colo. Const. art. XXVII, § 1 (emphasis added). Gessler's justifications for exempting retrospective reporting further bolster our conclusion. First, by characterizing his "decision{] ... to exempt contributions received and expenditures made prior to reaching the [issue committee] threshold" as a "necessary component[] of compliance with the Sampson decision," Ges-sler presupposes that retrospective reporting was required before Sampson. Pet'r's Reply Br. 24. Second, Gessler defends the exemption as "an appropriate exercise of administrative discretion" because requiring all issue committees to report the first dollars spent would "exacerbate" the administrative burdens on small-scale issue committees that Sampson invalidated, suggesting that issue committees were required to report retrospectively before Gessler intervened. Pet'r's Reply Br. 24-25.

11 . Although the existence of two conflicts bolsters our conclusion that Rule 4.1 is contrary to law, a single conflict would be sufficient to invalidate Rule 4.1.