Colorado Private Enforcement

Introduction

In Colorado, you need more than just an opinion to speak out on political issues; you also need a defense lawyer on speed-dial. That’s because, like most states, Colorado has a crushingly complex framework of campaign-finance laws that govern how you talk about politics. The result is a trap for the unwary, in which innocent political participation can lead to serious legal liability.

But while many states have complex campaign-finance laws, Colorado is almost unique in that the enforcement of its byzantine Fair Campaign Practices Act relies almost entirely on private lawsuits. Instead of allowing the Secretary of State or a specialized agency to enforce the laws, Colorado has deputized the population at large.

Here is how the process works. Anyone who thinks you have violated Colorado’s campaign-finance law—or merely suspects that you may have done so—can drag you into court simply by filing a complaint with the Secretary of State. Regardless of the merits, the Secretary of State is then required to forward the case to the Office of Administrative Courts. ¹ This triggers full-blown litigation, where “complainants must gather evidence related to the complaint and present that evidence . . . as if they were prosecuting a case.” ² Thus, the parties can subpoena each other, depose each other, and file motions. ³ The process culminates in a courtroom hearing and a written decision by an administrative law judge determining liability and sanctions. ⁴ Either party can then appeal directly to the Colorado Court of Appeals and from there petition the Colorado Supreme Court.

It doesn’t take a political scientist to predict how this plays out in practice. Given the charged atmosphere of political campaigns, the lion’s share of campaign-finance cases inevitably are prosecuted by candidates, their allies, and activists against the opponents. Rather than “cleaning up” politics, Colorado’s campaign-finance code has instead given political operatives a state-sanctioned weapon to wield against anyone who disagrees with them.

Tammy Holland—Mother, Citizen, Campaign-Finance Defendant

Tammy Holland learned about Colorado’s private-enforcement system the hard way. Tammy lives with her husband and their sixth-grader son on a farm in Strasburg, Colorado, near the Byers School District. Until recently, Tammy regularly published ads in the local newspaper—the I‑70 Scout, printed every Tuesday—which critiqued the school district’s standardized-testing program. This past September, with the Byers school-board election approaching, Tammy submitted two ads identifying the entire slate of candidates—both newcomers and incumbents—and stressing the importance of informed voting.

And this is where Colorado’s campaign-finance laws come into play. Days after the ads first ran, the superintendent of the Byers school district filed a campaign-finance complaint against Tammy on behalf of himself and the school district. But after Tammy hired a lawyer to defend herself, the superintendent withdrew his complaint two days before the scheduled court hearing. Unfortunately, Tammy couldn’t rest easy. Days later, an identical complaint was promptly re-filed by a second school-board official, Tom Thompson III.

Thompson—one of the incumbent school-board candidates mentioned in Tammy’s ads—claimed that Tammy violated the law in two ways. First, he says, “[t]he Board feels she has violated the campaign statute” because she should have registered a political committee. Second, he “felt” that the ads should have included a “paid for by” disclaimer.

Thompson’s complaint was groundless. Colorado’s political committee laws don’t apply to ads like Tammy’s that do not expressly call for the defeat or election of particular candidates. ⁵ As for Thompson’s claim that Tammy should have included a disclaimer on her ad, Thompson’s complaint relied on the Federal Election Commission’s disclaimer rules, which do not apply to state or local elections.

Given its glaring legal deficiencies, it’s hard to view Thompson’s complaint as anything other than an attack on someone he saw as a political enemy. And, for his own part, Thompson has freely admitted that the case is a reaction to what he perceives to be the viewpoint expressed in Tammy’s ads. “If I got to choose what would happen,” he told the I-70 Scout, “I’d ask for an ad in the paper apologizing for what [Tammy] said . . . . I don’t want anything out of it except that.” ⁶

Meanwhile, Tammy has been forced to retain legal counsel to defend herself in court, and she is too afraid to run any more newspaper ads while the current enforcement scheme remains on the books. And that pinpoints exactly why Colorado’s system is so pernicious. By outsourcing campaign-finance enforcement to the public at large, Colorado has created a system that promises—even depends on—viewpoint-discriminatory litigation by those who wish to silence or intimidate their political opponents.

Outsourcing Speech Restrictions: A Threat to Everyone

Tammy’s story is hardly unique. Predictably, most campaign-finance cases in Colorado are instigated by complainants who target messages they dislike. And the problem bridges traditional party lines. The Colorado Republican Committee, for example, filed a complaint against Democratic House-candidate Michael Merrifield ⁷ ; the executive director of the Colorado AFL-CIO prosecuted a complaint against Colorado Right-to-Work ⁸ ; Montrose County Commissioner Patterson pursued Patterson Recall Committee, Inc. ⁹ ; candidates of both parties (or their sympathizers) routinely file complaints against their adversaries ¹⁰ ; and such politically motivated complaints are equally widespread when it comes to ballot-measure campaigns. ¹¹

For the past decade alone, a summary of each politically motivated complaint would go on for pages. Here are some highlights:

• An opponent of “Amendment 48”—which, in 2008, proposed to define a fertilized egg as a person—filed a complaint against a pro-amendment committee for highly technical (and promptly corrected) reporting errors. After a full administrative hearing with appearances by counsel on both sides, the court drafted a seven-page decision that culminated in a fine totaling $150.00. ¹²  The complainant reportedly celebrated by noting, “[W]hile the fine of $150 won’t break their campaign, they did have to spin their wheels to defend this.” ¹³
• A charter school in Poudre School District linked on its Facebook page to a news article about a student’s mother, who was running for a school-board seat in a different district. A month later, the campaign manager for one of the mother’s political rivals filed a complaint against the school, claiming that the Facebook post amounted to a political contribution. (Incredibly, the administrative court ruled against the school, saying that “the Facebook ‘linking,’ ‘liking’ and ‘sharing’ on the school’s Facebook page was an illegal contribution.”) ¹⁴
• A group of citizens in Elbert County teamed up for a recall campaign against three Republican county commissioners. They timely submitted an “issue committee” registration form to the county clerk’s office, but the office failed to properly process it, meaning the committee had no way to file future reports. The Elbert County Republican Executive Committee then lodged a campaign-finance complaint against the leaders of the recall effort for their failure to register and report. This led to more than three months of litigation, appearances by lawyers on both sides, and a full administrative hearing. The court issued a ten-page ruling that the committee had broken the law but that “the violation was caused solely by the actions and inactions of the Clerk and Recorder’s office.” ¹⁵
• A local mayoral candidate noticed a flyer advocating against his candidacy and filed a campaign-finance complaint—against the printing company whose mail permit was used to send out the flyers. ¹⁶  The case was voluntarily dismissed.

What these stories show is that the real losers under this scheme aren’t the “wealthy individuals, corporations, and special interest groups” that Colorado’s campaign-finance law purports to guard against. ¹⁷  Instead, the people whose political engagement is most chilled are people like Tammy Holland. Like many ordinary citizens, Tammy wants to talk about issues she cares deeply about, but she certainly does not have the resources either to keep a boutique law firm on retainer or to shell out for a defense lawyer in the resulting lawsuits.

That’s why Tammy is fighting back, and not just against Tom Thompson’s complaint. Joining with the Institute for Justice, Tammy Holland has filed suit in federal court, arguing that Colorado’s private-enforcement law violates the First Amendment to the U.S. Constitution.

The Legal Challenge: Colorado’s Speech-Vigilantism Violates the First Amendment

As Tammy Holland’s experience proves, the Fair Campaign Practices Act is anything but fair. Campaign-finance laws should not—and constitutionally cannot—be a weapon for political actors to silence their opponents. Colorado’s private-enforcement law violates the First Amendment by needlessly burdening core political speech and by inviting viewpoint-discriminatory lawsuits.

Government agencies with no discretion, speech censors with no accountability

Foremost, Colorado’s law flunks the First Amendment because it unjustifiably deters political speech. Regardless of the constitutionality of the rules governing speech in Colorado, the private-enforcement process itself chills discourse. “Any person” who disagrees with your message can drag you into court and subject you to months or even years of litigation. Regardless of the outcome, the process alone is punishment.

Given these burdens, Colorado’s law is highly suspect under the First Amendment. By abdicating the state’s enforcement authority, Colorado grants complainants immense power with none of the checks that normally control the government’s enforcement decisions. Unlike government lawyers, “the universe of potential complainants is not . . . constrained by explicit guidelines or ethical obligations.” ¹⁸ The system is so bad that even the Secretary of State has complained that “[t]he current scheme allows frivolous and litigious complainants to potentially violate the free speech and due process rights of those seeking to lawfully participate in political discourse.” ¹⁹

The end result is that the government agency charged with offering guidance on Colorado’s speech code—the Office of the Secretary of State—has no say over whether, when, or how the law is enforced. This means that even if the government’s campaign-finance experts were to assure you that you were in compliance with the law, you still could end up being sued (successfully) by your opponents. ²⁰  This leaves speakers in an impossible position: As one commentator put it, “what sensible organization would ignore the opinion of the Secretary—the state’s sole campaign finance authority—and instead guess as to the future opinion of a state court?” ²¹

Role-Reversal: Special protections for censors, not for speakers

Colorado has compounded the problem by tilting the playing field away from the First Amendment at every turn. It is black-letter law that “[w]here the First Amendment is implicated, the tie goes to the speaker, not the censor.” ²²  But not in Colorado, where it is the would-be censor—not speakers—who gets the benefit of the doubt.

Every step of the enforcement process favors speech-suppressing complainants at the expense of ordinary citizens’ speech rights:

Pleadings—At the complaint stage, the Secretary of State advises complainants to identify “the alleged violation(s)” and the “specific laws alleged to be violated” only “where known.” ²³  As a result, complaints can be filed based on gross misunderstandings of the law—such as the complaint against Tammy Holland, which claims she violated federal campaign-finance law by speaking about candidates in a local school-board election.

Notice—Even the method for alerting speakers that they have been sued puts them at a disadvantage. In normal civil-court cases, Colorado plaintiffs must make every effort to serve the defendant personally with the complaint and summons. ²⁴  This is because “[t]he essential requirements of due process . . . are notice and an opportunity to respond.” ²⁵  For campaign-finance cases, however, the standard is much lower. Personal service is not required. Instead, it is enough that the complaint be mailed to whatever address is on file with the Secretary of State. ²⁶

This slapdash standard has led to clearly unfair results—as, for example, when a woman was sued by her political rival and hit with a $2,050 fine before she even knew the case existed. Because she had been “required to vacate her home address under a Divorce Decree from her ex-husband,” the woman explained, she had never received notice of the hearing. ²⁷  But with both parties now before it, the court refused to reopen the case. Obliging the complainant to “reprosecute her case” with the other side actually present, the court said, would be “burdensome.” ²⁸

Hearing—The process is just as ripe for abuse when all parties are on notice. Respondents, of course, are bound to appear in court or risk a default judgment. ²⁹  Yet harassment-minded complainants can file their complaint, thus burdening their adversaries, and then withdraw it at the last minute. In Tammy Holland’s case, for instance, the first of the two complaints against her was withdrawn only two days before the scheduled hearing. Tammy didn’t learn that the case had been dismissed until the night before she was to appear in court.

Often, campaign-finance complainants do not even bother to show up at the hearings; intimidating or distracting their opponents is victory enough. In one remarkable case, a local candidate appeared in court on his hearing date to see no one at the complainant’s table. Weeks later, after the case had been dismissed for failure to prosecute, the complainant resurfaced, explained that he had “left . . . for a two-week vacation and did not receive the Notice of Hearing,” and asked to reopen the case. ³⁰

Fees and Costs—The imbalance between speakers and censors is nowhere more apparent than in Colorado’s cost-shifting provision. Although Colorado authorizes courts to award fees and costs against frivolous campaign-finance complaints, ³¹  almost no complainants hit this bar—no matter how groundless their claims or vexatious their actions. The cost-shifting law even encourages ill-informed complaints. The standard for awarding costs is deliberately higher when complainants prosecute their cases without the assistance of a lawyer, ³²  meaning that bad-faith litigants are best served by not consulting a lawyer before suing their adversaries.

To illustrate how toothless the cost-shifting law really is, recall the complainant who went on vacation instead of appearing in court. He was a lawyer, not a pro se litigant, and the target of his complaint had to spend around $450 traveling from his home on the New Mexico border to the fruitless hearing in Denver. Even this fact pattern was not enough to induce the court to make the respondent whole. The court “strongly disapprove[d] of the Complainant’s conduct of filing a complaint” and “then leaving town,” but it nonetheless ruled that the respondent had not made a strong enough showing to recover his costs. ³³

All these stories point to a glaring mismatch between Colorado’s enforcement scheme and basic principles of First Amendment doctrine. Even the language used in Colorado’s administrative decisions suggests that something is badly awry:

Colorado’s system cannot be squared with the First Amendment. By outsourcing campaign-finance enforcement, Colorado has created a system that relies on viewpoint-discriminatory litigation between political and ideological factions and provides speakers with almost no procedural safeguards. As Tammy’s lawsuit will prove, that’s not just bad policy, it’s unconstitutional.

The Plaintiff

The plaintiff is Tammy Holland, who lives and works in Strasburg, Colorado.

The Defendant

The defendant is the Colorado Secretary of State, Wayne W. Williams, who is sued in his official capacity.

The Claims

Tammy has brought a single First Amendment claim challenging Colorado’s system of private campaign-finance enforcement. She is seeking a declaration that Colorado’s system violates the First Amendment and an injunction that will prohibit the Secretary of State from referring private complaints to the Colorado Office of Administrative Courts.

Legal Team

The litigation team consists of IJ Senior Attorney Paul Sherman and IJ Attorney Sam Gedge. Clifford L. Beem of the Denver firm of Beem & Isley P.C. serves as local counsel.

The Institute for Justice

The Institute for Justice is the national law firm for liberty. IJ is a public-interest law firm that advances a rule of law under which individuals can control their destinies as free and responsible members of society. Through litigation, communication, outreach and strategic research, IJ secures protection for individual liberty and extends the benefits of freedom to those whose full enjoyment is denied by the government.