Loontjer v. Robinson

670 N.W.2d 301, 266 Neb. 902, 2003 Neb. LEXIS 168

• Court: Nebraska Supreme Court
• Decided: October 24, 2003
• Docket: S-02-1030
• Status: Published

Opinions

Connolly, J.

Greg Robinson, Charles Whitney, Harry Prososki, Gerald Brown, Russell Dodd, Verlouis Forster, and Richard Lindauer, all members of the Committee for Local Option Gaming (the Committee), appeal from the district court’s order enjoining the placement of an initiative petition on the ballot. The petition sought to accomplish the following:

(1) Revise the Nebraska Constitution to allow electronic gaming devices under local control;

(2) Provide limitations on the manner income from the gaming could be spent;

(3) Limit the ability of the Legislature to tax the gaming; and

(4) Require the creation of a gaming commission.

Appellee Pat Loontjer filed for declaratory relief and sought to enjoin the placement of the petition on the ballot.

The district court determined there was substantial compliance with Neb. Rev. Stat. § 32-1405(1) (Reissue 1998), which requires the sponsors of an initiative petition to file a sworn statement listing their names and street addresses. The court also determined, however, that the petition violated the single subject rule of Neb. Const, art. Ill, § 2. Thus, the court enjoined the placement of the initiative on the ballot. Loontjer cross-appeals the court’s determination that there was substantial compliance with § 32-1405(1).

We determine that the petition was legally insufficient because the sponsors failed to include a sworn statement of their names and street addresses. Accordingly, we affirm.

BACKGROUND

On December 16, 2001, the appellants submitted an Initiative for Local Option Gaming to the Nebraska Secretary of State for review before circulating the petition for signatures to place the initiative on the ballot. The initiative petition was not individually signed. Instead, “THE LOCAL OPTION GAMING COMMITTEE BOX 636 KIMBALL, NEBRASKA 69145” was typed at the end. The appellants submitted a cover letter, omitting their addresses; however, it was not sworn. A handwritten note signed by Prososki stated that Bill Kurtenbach “can take care of any correspondence for me” and provided Kurtenbach’s post office box address. Testimony at trial showed that the appellants are members of the Nebraska Cooperative Government Commission (NCGC), an interlocal agency that operates keno for a group of about 72 cities, counties, and villages in Nebraska. Kurtenbach is an attorney that represents the NCGC.

In January 2002, the appellants submitted the final draft; the draft does not contain a sworn statement of the sponsors with their street addresses. Instead, it contains an unsworn typed signature of the Committee and provides street and Internet addresses. A cover letter contains the unsworn signatures of the appellants and their telephone numbers. The appellants offered an exhibit, Kurtenbach’s sworn statement, filed with the Secretary of State 3 days before trial, stating that the appellants constitute all of the sponsors of the petition. The court, however, ruled that the exhibit was inadmissible.

The record shows that the NCGC contracted with Community Lottery Systems, Inc., also known as Lotto Nebraska, a company operated by Paul Schumacher, to run keno. Schumacher also owns an interest in Community Internet Systems, Inc., which hosts an Internet Web site for the Committee.

The record shows that the initial work on the petition was done through the NCGC, and the Committee was formed later. A “Statement of Organization of a Political Committee” was not filed for the Committee until December 26, 2001. Robinson, the chairman of both the Committee and the NCGC, testified that the earliest versions of the petition were drafted at his request by Schumacher, Kurtenbach, and a law firm. Robinson stated that he believed Schumacher was involved in drafting the petition from “day one.” He believed that drafting the petition was part of Kurtenbach’s duties as general counsel for the NCGC.

In July 2001, after early versions had already been drafted, a motion was passed at a NCGC meeting to ask Schumacher and Kurtenbach to draft a petition. Specifically, minutes of the July 28, 2001, NCGC meeting state:

Item No. 7: Discussion and action on gaming legislation in the 2001 legislative session and initiative petitions

Motion- Whitney, second- Forster, to encourage Lotto Nebraska and the NCG General Counsel to (1) cause an initiative petition drive to be commenced that would permit cities and counties to conduct games of chance or skill or any combination thereof using player activated electronic gaming devices for the purpose of local tax relief and keeping Nebraska resources in Nebraska, and (2) form the necessary alliances to accomplish the circulation and passage of such a petition in the November, 2002, general election ....

The motion passed unanimously. On October 26, 2001, the NCGC voted to endorse the enactment of the petition. The record also contains evidence that Schumacher asked the Committee to “sponsor” the petition. When Robinson delivered signed petitions to the Secretary of State’s office in July 2002, he delivered a speech that Schumacher helped to draft. Schumacher arranged and paid for Robinson to arrive at the State Capitol Building by charter airplane.

Kurtenbach testified that several people, including Schumacher, had the initial idea to seek a constitutional amendment to allow video gambling. Kurtenbach agreed that a section of the initiative requires that no gaming operator shall be licensed unless it has demonstrated proficiency in operating local government lotteries. Kurtenbach believed around a dozen companies would meet the requirement. According to Kurtenbach, various people, including himself, Schumacher, and Whitney drafted language in the petition.

Schumacher has been described as the person who spearheaded the fundraising for the Committee after it was formed. Schumacher or his corporation contributed $62,000 to the Committee. According to Robinson, Schumacher was not made an “official sponsor” of the petition because his company had the potential to profit if the initiative was passed. Schumacher testified that it was not his initial idea to try to get a constitutional amendment allowing video gaming. Instead, he testified about several people or groups that had an interest in seeking an amendment. He admitted to being involved in the drafting process, but denied drafting the early forms of the petition or the entire petition. According to Schumacher, it was Kurtenbach’s idea to form the Committee. Schumacher was involved in the process to obtain signatures on the petition, but the level of that involvement is unclear.

The deputy Secretary of State testified that he believed the sponsors of the petition were the appellants. He stated that his office provides a place at the bottom of a petition for sponsors to place any information regarding where to return signed petitions, which information in this case was the name and address of the Committee.

The Secretary of State determined that the petition received enough signatures to place it on the ballot. Loontjer sought declaratory and injunctive relief to stop the petition from being placed on the ballot. Loontjer alleged that the petition (1) failed to include a sworn statement of its sponsors in violation of § 32-1405; (2) violated the single subject rule under Neb. Const, art. Ill, § 2; (3) contained an insufficient ballot title; and (4) violated the taxing authority of the Legislature. Appellee Timothy A. Bundy intervened with the same allegations but did not challenge the existence of a sworn statement. The Secretary of State was named as a defendant to the action.

In addressing whether the petition properly contained a sworn statement of the sponsors, the district court determined that Schumacher and Kurtenbach were not “sponsors” of the petition. The court also determined that the Committee was not a sponsor of the petition and dismissed it from the action. Instead, the court determined that the individual appellants were the sponsors.

The court next determined that although the appellants failed to include a sworn statement with their street addresses, they had substantially complied with the requirements of § 32-1405(1). The court determined that the purpose of § 32-1405(1) is to avoid fraud and deception and concluded that the appellants had provided enough information to make it possible to identify and locate them as the sponsors of the petition.

The court ruled, however, that the petition violated the single subject rule. The court determined that the petition’s purpose is the “expansion of gambling.” The court then addressed the single subject issue and determined that the following provisions of the petition lacked a natural or necessary connection with each other or the purpose of the petition:

(1) the requirement that at least 7% of the net proceeds be used for charitable grants;

(2) the authorization that revenue obtained from the permitted gambling to be used for bonuses to certified teachers and programs of tuition credits to students;

(3) the prohibition against the Legislature from levying any special or excise tax on the permitted gambling;

(4) the authorization for the creation of what appear to be new political subdivisions, by means of interlocal agreements; and

(5) the restriction against the Legislature from authorizing any form of gambling that would compete with the permitted gambling.

The court enjoined the Secretary of State from placing the petition on the ballot. The appellants filed this appeal, and Loontjer cross-appealed.

ASSIGNMENTS OF ERROR

The appellants assign, consolidated and rephrased, that the district court erred in (1) failing to dismiss the case because the pleadings did not present a justiciable controversy that was ripe for determination and (2) determining that the petition violated the single subject rule and granting injunctive relief.

On cross-appeal, Loontjer assigns, consolidated and rephrased, that the court erred by failing to declare the petition legally insufficient for failure to include a sworn statement containing the names and addresses of the sponsors.

STANDARD OF REVIEW

A jurisdictional question which does not involve a factual dispute is a matter of law. State ex rel. Steinke v. Lautenbaugh, 263 Neb. 652, 642 N.W.2d 132 (2002).

An action for injunction sounds in equity. In an appeal of an equitable action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, when credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. Reichert v. Rubloff Hammond, L.L.C., 264 Neb. 16, 645 N.W.2d 519 (2002).

ANALYSIS

Jurisdiction

The appellants first contend that the district court should have dismissed the action because it did not present a justiciable controversy that was ripe for determination.

Neb. Rev. Stat. § 32-1412(2) (Reissue 1998) provides:

On a showing that an initiative or referendum petition is not legally sufficient, the court, on the application of any resident, may enjoin the Secretary of State and all other officers from certifying or printing on the official ballot for the next general election the ballot title and number of such measure. If a suit is filed against the Secretary of State seeking to enjoin him or her from placing the measure on the official ballot, the person who is the sponsor of record of the petition shall be a necessary party defendant in such suit.

We have stated that a district court properly refused to address a prayer for declaratory relief when it sought a declaration that a term limits initiative violated the U.S. Constitution. Duggan v. Beermann, 249 Neb. 411, 544 N.W.2d 68 (1996). Under those circumstances, we stated, “The court correctly declined to enter an advisory opinion or any declaratory judgment unless and until the initiative measure was adopted.” Id. at 424, 544 N.W.2d at 76.

Here, § 32-1412 allows a court to consider whether an initiative petition is “legally sufficient.” Questions dealing with statutory provisions concerning the form of a petition and the technical requirements of the sponsors affect the legal sufficiency of an initiative. The issue whether the petition is legally sufficient, as presented by Loontjer’s cross-appeal, is ripe for review.

Sworn Statement

On cross-appeal, Loontjer contends that the initiative petition is legally insufficient because it does not contain a sworn statement of the sponsors listing their names and street addresses. The appellants admit that the initiative does not contain a sworn statement but argue that they substantially complied with the requirement when the cover letter with the initiative contained the names of the sponsors and post office box addresses.

Section 32-1405(1) provides:

Prior to obtaining any signatures on an initiative or referendum petition, a statement of the object of the petition and the text of the measure shall be filed with the Secretary of State together with a sworn statement containing the names and street addresses of every person, corporation, or association sponsoring the petition.

The Nebraska Constitution reserves the right of the people to enact constitutional amendments by initiative. Neb. Const, art. Ill, § 2. It also authorizes legislation to facilitate the operation of the initiative process. Neb. Const, art. Ill, § 4. “ ‘ “[T]he constitutional provision authorizing the legislature to enact laws to facilitate the operation of the initiative power means that it may enact reasonable legislation to prevent fraud or to render intelligible the purpose of the proposed law or constitutional amendment. . . .” ’ ” State ex rel. Stenberg v. Moore, 258 Neb. 199, 211, 602 N.W.2d 465, 474 (1999).

The Legislature and the electorate are concurrently equal in rank as sources of legislation, and provisions authorizing the initiative should be construed in such a manner that the legislative power reserved in the people is effectual. Id. Thus, we stated that “ ‘the power of initiative must be liberally construed to promote the democratic process and that the right of initiative constitutionally provided should not be circumscribed by restrictive legislation or narrow and strict interpretation of the statutes pertaining to i[t]s exercise.’” Id. at 212-13, 602 N.W.2d at 476. Because we avoid limiting the right of initiative through strict or narrow interpretation, we have, in some circumstances, allowed substantial compliance with the statutes pertaining to the initiative. See, e.g., id.; State ex rel. Morris v. Marsh, 183 Neb. 521, 162 N.W.2d 262 (1968).

This court specifically addressed the requirement for a sworn statement by sponsors in State, ex rel. Winter, v. Swanson, 138 Neb. 597, 294 N.W. 200 (1940). In State, ex rel. Winter, the Secretary of State refused to accept initiative petitions that were not in conformance with the provisions of a statute that preceded § 32-1405(1). That statute required a sworn statement containing the names of the sponsors and people or associations that contributed or pledged money to defray the cost of the petition. See 1939 Neb. Laws, ch. 34, § 13, p. 184-85. We stated that the provision requiring the filing of the names of sponsors was a safeguard against fraud and deception. We then rejected an argument that the provisions of the statute were directory instead of mandatory, stating:

It seems to us that none of the features of a directory statute is present in this case. It would seem to us that an anomalous situation would be created if statutory safeguards against the perpetration of frauds and deceptions were held to be directory. Such requirements must by their very nature be mandatoiy, or the purposes of the legislature will be completely defeated. We hold that the provisions of the statute herein discussed are mandatory and that the failure of relators to comply therewith justifies the action of the secretary of state in refusing to file the same.

State, ex rel. Winter, v. Swanson, 138 Neb. at 599, 294 N.W. at 201.

We later distinguished the mandatory sworn statement requirement from a situation involving the late filing of a verified statement of contributions and expenses. In the case of a late filing which was ultimately complete and met all the other requirements of the statute, we allowed substantial compliance. State ex rel. Morris v. Marsh, supra. In State ex rel. Morris, we specifically noted the complete failure of the relators in State, ex rel. Winter, to file a copy of the petition and the sworn statement.

Here, the appellants ask us to determine that they substantially complied with the sworn statement requirement of § 32-1405(1), but we decline to do so. Instead, we determine that the sworn statement provision is mandatory. As we stated in State, ex rel. Winter, the language of the statute is not directory.

Requiring a sworn statement is not an onerous duty. Further, the sworn statement requirement serves several important purposes. First, by providing a sworn statement, the sponsors take responsibility for the petition and expose themselves to potential criminal charges if information is falsified. See Neb. Rev. Stat. § 32-1502 (Reissue 1998) (making election falsification under oath Class IV felony). This requirement prevents fraud in the process. Second, the provision allows the public and the media to scrutinize the validity and the completeness of any list of sponsors. Knowing the petition’s sponsor could affect the public’s view about an initiative petition. For example, a petition sponsored by a large casino might have less appeal to some members of the public than a petition sponsored by local citizens. A sworn list of the sponsors and their street addresses allows the public to make an informed judgment whether to sign the petition. Third, under § 32-1412, the sponsor of an initiative shall be a necessary party to any suit seeking to enjoin the placement of an initiative on the ballot. The failure to provide a sworn statement of the sponsors and street addresses can frustrate the ability to join necessary parties in a lawsuit.

Here, the statement of the sponsors omitted some street addresses and it was never sworn. Because the appellants failed to file a sworn statement, the petition is legally insufficient.

Although the appellants offered an exhibit containing a sworn statement 3 days before trial, the statement was not provided to the Secretary of State before the petition was circulated for signatures. The district court did not allow the exhibit into evidence, and the appellants do not assign the court’s refusal to do so as error. To be considered by an appellate court, an alleged error must be both specifically assigned and specifically argued in the brief of the party asserting the error. Forgét v. State, 265 Neb. 488, 658 N.W.2d 271 (2003). Thus, we do not consider the exhibit.

The initiative petition was legally insufficient because it omitted a sworn statement of the sponsors and their street addresses. Accordingly, the district court should have enjoined placing the initiative on the ballot because it lacked a sworn statement. Instead, the district court enjoined placing the petition on the ballot because it violated the single subject rule. Because we affirm based on Loontjer’s cross-appeal, we do not address the single subject rule, nor do we address whether Schumacher and Kurtenbach were sponsors of the petition.

Affirmed.