State v. Permanent Offense

150 P.3d 568
CourtCourt of Appeals of Washington
DecidedDecember 22, 2006
Docket56574-5-I
StatusPublished

This text of 150 P.3d 568 (State v. Permanent Offense) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Permanent Offense, 150 P.3d 568 (Wash. Ct. App. 2006).

Opinion

150 P.3d 568 (2006)

STATE of Washington, EX REL. WASHINGTON STATE PUBLIC DISCLOSURE COMMISSION, Respondent,
v.
PERMANENT OFFENSE, a political committee; and Tim Eyman, a married person, Defendants,
Suzanne KARR, a married person, Appellant.

No. 56574-5-I.

Court of Appeals of Washington, Division 1.

November 6, 2006.
As Modified on Denial of Reconsideration December 20, 2006.
Publication Ordered December 22, 2006.

*569 Suzanne Karr, Everett, Counsel for Appellants Pro Se.

H. Bruce Marvin, Wa. St. Att. Gen.'s Office, Olympia, Counsel for Respondent.

COX, J.

¶ 1 Suzanne Karr challenges the decision of the Snohomish County Superior Court determining that she violated the Washington Public Disclosure Act ("PDA"). We hold that the portions of the PDA that she challenges do not unconstitutionally infringe on her First Amendment rights. We also hold that the superior court had subject matter jurisdiction to decide this case, that there was no violation of Karr's right to due process, *570 and that the findings of fact and conclusions of law were proper. We affirm.[1]

¶ 2 At the end of 1999, Suzanne Karr and Tim Eyman formed a Political Action Committee called Permanent Offense ("PO-PAC"). Karr was PO-PAC's treasurer. Eyman could not afford to work for PO-PAC without compensation, so he and Karr agreed to a plan to compensate him through the use of another corporation. Eyman did not want the public to know that he would profit from his campaign work. So, he and Karr formed a for-profit corporation, Permanent Offense, Inc. ("PO-Inc."), which was to be the nominal entity providing campaign services to PO-PAC. Thus, although Eyman was to receive compensation from PO-Inc., he and Karr did not disclose this fact to anyone.

¶ 3 Pursuant to their arrangement, Eyman determined his desired salary amount, and Karr created a billing scheme to meet his request. She determined reasonable monthly charges and, as PO-Inc.'s secretary, created invoices and began charging PO-PAC for those services on a monthly basis. As PO-PAC's treasurer, she made monthly payments to PO-Inc. and filed reports with the Public Disclosure Commission ("PDC" or "commission"), as required by the PDA. None of the reports disclosed that Eyman was providing services or being compensated for those services.

¶ 4 Based on information supplied to it, the PDC investigated claimed violations of the PDA against Karr, Eyman, PO-PAC, and others. After the investigation, the commission determined that Eyman, Karr, and PO-PAC apparently violated the PDA. The PDC referred the matter to the attorney general for further action.

¶ 5 Thereafter, the State commenced this action against PO-PAC, Eyman, and Karr. All defendants except Karr settled. She proceeded to a bench trial. Following an oral ruling in favor of the State, Karr moved to dismiss the action on First Amendment grounds. After additional briefing and oral argument, the court denied that motion and entered a judgment for penalties and attorney fees against her.

¶ 6 Karr appeals.

FIRST AMENDMENT

¶ 7 Karr argues that the statutes she was found to have violated unconstitutionally infringe on the First Amendment. We hold that these statutes are not unconstitutional.

¶ 8 We first address a threshold issue that the State raises. It argues that Karr waived her First Amendment claim by not raising it as an affirmative defense in her answer. Rather, she waited to move to dismiss until after the court's oral ruling against her on the claims litigated at trial.

¶ 9 The trial court has considerable discretion in determining whether to consider parties' untimely arguments.[2] Here, the parties were given additional time to brief the First Amendment question. Thereafter, they presented extensive oral argument to the court. No one convincingly argues that there was any need for additional evidence. The State has failed either to show that it was prejudiced by the court's decision to consider the new argument or that the court otherwise abused its discretion by considering the matter. Thus, we consider the merits of Karr's First Amendment claim.

¶ 10 Laws that burden the First Amendment right to political speech are inherently suspect, and subject to "exacting scrutiny."[3] The State bears the burden of establishing that such a law furthers a substantial governmental interest and is not out-weighed *571 by the burden on political speech.[4] Here, the State concedes that the Public Disclosure Act[5] burdens political speech to some extent, so that exacting scrutiny is the proper test to apply.

¶ 11 The issues in this case were recently addressed in California Pro-Life Council, Inc. v. Getman.[6] There, the Ninth Circuit addressed the constitutionality of a California campaign finance disclosure law similar to Washington's. That law requires political committees to disclose the source and amount of campaign contributions and expenditures related to voter-decided propositions. Relying on language in numerous Supreme Court and Ninth Circuit opinions regarding disclosure laws applied to ballot-measure advocacy, as opposed to candidate advocacy, the court declined to find the law unconstitutional per se.[7] It remanded the case to the federal district court to determine whether the law met strict scrutiny. In remanding, the court outlined the pertinent analysis for the lower court to apply.

¶ 12 The appellate court reasoned that California could have a compelling interest in providing voters with information about "who is doing the talking" about ballot measures.[8] Given the myriad of messages voters have to sift through when considering an issue and the millions of dollars that interest groups pour into those messages, voters may well need this information in order to properly evaluate potential legislation, just as members of Congress may require lobbyists to disclose financial sources.[9]

¶ 13 On remand, the district court held that the statute satisfied strict scrutiny.[10] It held that California has a compelling interest in informing voters about expenditures and contributions, especially given the "staggering sums" spent on ballot measures, the large number of ballot measures voters must evaluate, and evidence that voters heavily rely upon this information in making their decisions.[11] In addition, it held that the State has a compelling interest in maintaining the integrity of the legislative process by preventing the concealment of sources' identities that may funnel money through other organizations.[12] Finally, the court determined that California's disclosure requirements are narrowly tailored to serve these interests because they require timely and organized reports of the financial information voters need and are not overly burdensome.[13]

¶ 14 Similar reasoning applies here. Washington State has a substantial interest in providing the electorate with valuable information about who is promoting ballot measures and why they are doing so. In short, the voters need to know "who is doing the talking" about ballot measures. Moreover, it is particularly important in these situations that voters know whether other influences—particularly money—are affecting those who are otherwise known as grassroots organizers. Finally, the State has a substantial interest in promoting integrity and preventing concealment that could harm the public and mislead voters. This case aptly illustrates this point.

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Bluebook (online)
150 P.3d 568, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-permanent-offense-washctapp-2006.