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.[c]Colo. Const. art. XXVIII, § 9(2)(a); Colo. Rev. Stat. § 1-45-111.5(1.5)(a).[/c] 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.”[c]Colo. Sec’y of State, Colorado Campaign and Political Finance Manual 34 (rev. July 2015), available at https://www.sos.state.co.us/pubs/elections/CampaignFinance/files/CPFManual.pdf (last visited Jan. 19, 2016).[/c] Thus, the parties can subpoena each other, depose each other, and file motions.[c]Colo. Const. art. XXVIII, §§ 9(1)(f), (2)(a).[/c] The process culminates in a courtroom hearing and a written decision by an administrative law judge determining liability and sanctions.[c]Id. § 9(2)(a).[/c] 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.[c]See Colo. Ethics Watch v. S. Majority Fund, LLC, 269 P.3d 1248, 1251 ¶ 5 (Colo. 2012).[/c] 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.”[c]Kathy Smiley, Byers School, Parent Dispute Alleged Violation of Political Ad Law, The I-70 Scout, Oct. 29, 2015, available at http://i-70scout.com/blog/2015/10/byers-school-parent-dispute-alleged-violation-of-political-ad-law/ (last visited Jan. 19, 2016).[/c]
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.
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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[c]Compl., Colo. Republican Comm. v. Merrifield, Case No. OS 2004-0011 (Div. Admin. Hr’gs filed July 23, 2004).[/c]; the executive director of the Colorado AFL-CIO prosecuted a complaint against Colorado Right-to-Work[c]Compl., Cerbo v. Colo. Right-to-Work Comm., Case No. OS 2008-0007 (OAC filed Apr. 10, 2008); see also Andy Vuong, Right-to-work committee penalized $9,750, The Denver Post, Oct. 16, 2008, available at http://www.denverpost.com/spencer/ci_10738043 (last visited Jan. 15, 2016).[/c]; Montrose County Commissioner Patterson pursued Patterson Recall Committee, Inc.[c]Agency Decision at 2, Patterson v. Patterson Recall Comm., Inc., Case No. OS 2007-0021 (OAC Feb. 14, 2008).[/c]; candidates of both parties (or their sympathizers) routinely file complaints against their adversaries[c]E.g., Sias v. Christian Coal. of Colo., Case No. OS 2014-0043 (OAC filed Dec. 11, 2014); Norton v. Lucero, Case No. OS 2014-0039 (OAC filed Nov. 18, 2014); Arnold v. Coloradans for a Better Future, Case No. OS 2012-0024 (OAC filed Dec. 13, 2012); Magidan v. The Pat Quinn for Mayor Comm., Case No. OS 2009‑0008 (OAC filed Nov. 5, 2009).[/c]; and such politically motivated complaints are equally widespread when it comes to ballot-measure campaigns.[c]E.g., Weber v. Paonia Peace Pipe LLC, Case No. OS 2014-0029 (OAC filed Oct. 17, 2014); Thomas Wills, Judge Fines Would-be Paonia Marijuana Store Owner for Campaign Violation, The North Fork Merchant Herald, Dec. 1, 2014, available athttp://www.merchantherald.com/judge-fines-would-be-paonia-marijuana-store-owner-for-campaign-violation/ (last visited Jan. 19, 2016); Putnam v. Cornwell, Case No. OS 2006-0013 (Div. Admin. Hr’gs filed July 5, 2006); Kramer v. Jacobs, Case No. OS 2005-0029 (OAC filed Nov. 18, 2005).[/c]
For the past decade alone, a summary of each politically motivated complaint would go on for pages. Here are some highlights:
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.[c]Colo. Const. art. XXVIII, § 1.[/c] 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.”[c]Susan B. Anthony List v. Driehaus, 134 S. Ct. 2334, 2345 (2014).[/c] 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.”[c]Colo. Sec’y of State, Proposed Legislation 2016, at 4.[/c]
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.[c]Final Agency Decision at 11, Colo. Ethics Watch v. Clear the Bench Colo., Case No. OS 2010-0009 (OAC Sept. 22, 2010), aff’d, Colo. Ethics Watch v. Clear the Bench Colo., 277 P.3d 931 (Colo. App. 2012).[/c] 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?”[c]Allen Dickerson & Zac Morgan, Campaign Finance Advisory Opinions at the State Level, 40 Fordham Urb. L.J. 773, 781 (2012).[/c]
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.”[c]Fed. Election Comm’n v. Wis. Right to Life, Inc., 551 U.S. 449, 474 (2007) (Opinion of Roberts, C.J.).[/c] 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.”[c]Colo. Sec’y of State, How to File a Complaint, http://cosos.learnercommunity.com/portal/Files/Org/5d253e1535be429bb1f78929a435c5c6/site/assets/campaign_finance/complaints/filing_a_complaint_how_to_file_a_complaint.html (last visited Jan. 15, 2016).[/c] 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.[c]Colo. R. Civ. P. 4(e).[/c] This is because “[t]he essential requirements of due process . . . are notice and an opportunity to respond.”[c]Hulen v. Yates, 322 F.3d 1229, 1248 (10th Cir. 2003) (quoting Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 546 (1985)).[/c] 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.[c]Colo. Const. art. XXVIII, § 9(1)(f); Colo. Rev. Stat. § 24-4-105(2)(a); Order Den. Mot. to Vacate Agency Decision and Reschedule Hr’g at 4, Thomas v. Lane, Case No. OS 2010-0017 (OAC Nov. 10, 2010).[/c]
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.[c]Mot. to Vacate Agency Decision and Reschedule Hr’g at 1, Thomas v. Lane, Case No. OS 2010-0017 (OAC filed Oct. 27, 2010).[/c] 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.”[c]Order Den. Mot. to Vacate Agency Decision and Reschedule Hr’gat 4, Thomas v. Lane, Case No. OS 2010-0017 (OAC Nov. 10, 2010).[/c]
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.[c]Colo. Rev. Stat. § 24-4-105(2)(b); see also Agency Decision at 1, Foster v. Bentley, Case No. OS 2013-0013 (OAC Apr. 9, 2014).[/c] 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.[c]Agency Decision at 1-2, Furse v. Duncan, Case No. OS 2008-0024 (OAC Sept. 15, 2008).[/c]
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,[c]Colo. Rev. Stat. § 1-45-111.5(2).[/c] 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,[c]Id; see also Colo. Rev. Stat. § 13-17-102(6).[/c] 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.[c]Agency Decision at 2-3, Furse v. Duncan, Case No. OS 2008-0024 (OAC Sept. 15, 2008); see Sarah O. Smith, Controversy over DA candidate’s finances continues, The Pagosa Springs Sun, Aug. 7, 2008, available athttp://pagosasun.com/archives/2008/08august/archive080708.html (last visited Jan. 19, 2016).[/c]
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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:
|The Supreme Court Says …||Colorado’s Office of Administrative Courts Says …|
|“[S]peech on public issues occupies the highest rung of the hierarchy of First Amendment values, and is entitled to special protection.”[c]Snyder v. Phelps, 562 U.S. 443, 452 (2011).[/c]||Complainants “enjoy special protections” when they opt not to consult a lawyer before suing private speakers.[c]Agency Decision at 2, Richards v. Not Another Tax Increase, Case No. OS 2008-0008 (OAC June 16, 2008).[/c]|
|“[T]he threat of burdensome litigation” will impermissibly “chill speech.”[c]Wis. Right to Life, 551 U.S. at 469 (Opinion of Roberts, C.J.).[/c]||Holding litigants accountable for wrongly dragging private speakers through the courts may lead to “the potential chilling of the complaint process.”[c]Agency Decision at 4-5, Olson v. City of Golden, Case No. OS 2005-0021 (OAC Sept. 12, 2005).[/c]|
|The First Amendment honors our “profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open”[c]N.Y. Times Co. v. Sullivan, 376 U.S. 254, 270 (1964).[/c]||The Colorado Constitution embodies the view “that the interests of the public are best served by strong enforcement of campaign finance requirements.”[c]Agency Decision at 5, Olson v. City of Golden, Case No. OS 2005-0021 (OAC Sept. 12, 2005).[/c]|
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 is Tammy Holland, who lives and works in Strasburg, Colorado.
The defendant is the Colorado Secretary of State, Wayne W. Williams, who is sued in his official capacity.
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.
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.
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