Appeal
from the Superior Court in Maricopa County The Honorable
Daniel J. Kiley, Judge Nos. CV2018-009919, CV2018-010116,
CV2018-010651, CV2018-010658, CV2018-010807
Brett
W. Johnson, Jennifer Hadley Catero, Kelly Kszywienski, Colin
P. Ahler, Andrew Sniegowski, Brianna L. Long, Lindsay Short,
Snell & Wilmer L.L.P., Phoenix; Michael T. Liburdi,
Nicole M. Goodwin, E. Jeffrey Walsh, Greenberg Traurig LLP,
Phoenix, Attorneys for Vince Leach, Glenn Hamer, Justine
Robles, John Kavanagh, Jenn Daniels, Jackie Meck, Ashley
Ragan, John Giles
Israel
G. Torres, James E. Barton II, Saman J. Golestan, Torres Law
Group, PLLC, Tempe, Attorneys for Clean Energy for a Healthy
Arizona Committee, Alejandra Gomez
Kory
Langhofer, Thomas Basile, Statecraft PLLC, Phoenix, Attorneys
for Speaker of the House J.D. Mesnard, Senate President Steve
Yarbrough
William G. Montgomery, Maricopa County Attorney, M. Colleen
Connor, Talia J. Offord, Deputy County Attorneys, Maricopa
County Attorney's Office, Attorneys for Maricopa County
Defendants/Appellees
Timothy Sandefur, Scharf-Norton Center for Constitutional
Litigation, Phoenix, Attorneys for Amicus Curiae Goldwater
Institute
Robert
G. Schaffer, Lewis Roca Rothgerber Christie LLP, Phoenix,
Attorneys for Amicus Curiae Arizona Chamber of Commerce &
Industry and the Greater Phoenix Chamber of Commerce
Nicholas J. Enoch, Kaitlyn A. Redfield-Ortiz, Stanley Lubin,
Lubin & Enoch P.C., Phoenix, Attorneys for Amicus Curiae
International Brotherhood of Electrical Workers Local Union
387
JUSTICE TIMMER authored the opinion of the Court, in which
CHIEF JUSTICE BALES, VICE CHIEF JUSTICE BRUTINEL, and JUSTICE
PELANDER joined.
OPINION
TIMMER
JUSTICE.
¶1
These expedited election appeals and cross-appeals raise
several issues concerning a political action committee's
organizational formation, the adequacy of an initiative
title, and whether the trial court erred in finding a
sufficient number of valid petition signatures to support
placement of the Proposition 127, Renewable Energy Standards
Initiative on the November 2018 ballot. We previously issued
orders affirming the trial court's rulings that the
measure qualifies for the ballot. We now explain our
reasoning for those orders. (At the election, the voters
rejected the measure, but that does not affect our
pre-election decisions.)
BACKGROUND
¶2
Clean Energy for a Healthy Arizona (the
"Committee") is a political action committee
("PAC") that sought placement of an initiative
measure on the November 2018 general election ballot. To that
end, the Committee formed on February 9, 2018, by filing a
"statement of organization" with the Secretary of
State ("Secretary") on a form provided by her.
See A.R.S. § 16-906(A). The statement
identified and provided contact information for the
Committee's chairperson, treasurer, and bank, as required
by § 16-906(B). The statement did not identify a
"sponsor." See § 16-906(B)(1)(b), (2)
(requiring a statement of organization to list information
about "any sponsor"). On receipt of the statement,
the Secretary issued an identification number to the
Committee, see § 16-906(D), which was then
authorized to perform lawful activities, including applying
for an initiative petition, see § 16-906(G).
¶3
On February 20, the Committee filed an application with the
Secretary for an initiative measure that proposes a
constitutional amendment to "require electricity
providers to generate at least 50% of their annual sales of
electricity from renewable energy sources" (the
"Initiative"). See A.R.S. § 19-111(A)
(setting forth initiative application requirements). The
application was printed on a form issued by the Secretary,
and it included the Committee's identification number
where indicated. Upon receipt of the application, the
Secretary assigned the Initiative petition a serial number,
see § 19-111(B), which enabled the Committee to
gather the 225, 963 valid signatures required to qualify the
Initiative for the ballot.
¶4
Two days after the Committee filed its application with the
Secretary, NextGen Climate Action ("NextGen"), a
California-based entity, made the first of several
substantial contributions to the Committee (totaling more
than $4 million in the first and second quarters of 2018
alone) by paying FieldWorks, LLC, about $140, 000 to gather
petition signatures for the Initiative. NextGen's
contributions were publicly reported by the Committee in its
mandatory campaign finance reports filed on April 17 and July
14. The Committee did not report receiving any contributions
during the period before filing its application with the
Secretary on February 20.
¶5
Clean Energy for a Healthy Arizona, LLC ("CEHA
LLC") formed on February 27, and the Arizona Corporation
Commission approved its articles of organization on March 22.
According to the Committee, CEHA LLC formed to protect the
Committee's officers from personal liability. The
Committee amended its statement of organization on May 14 to
identify CEHA LLC as its "sponsor." See
§ 16-906(C) (authorizing amendments to the statement of
organization). The Committee's campaign finance reports
for the first and second quarters of 2018 did not reflect any
contributions from CEHA LLC. The Committee did not list
NextGen as a sponsor in the amended statement of
organization.
¶6
FieldWorks hired, registered, and paid more than 1500
circulators to collect signatures supporting placement of the
Initiative on the ballot. On July 5, the Committee filed
petition sheets containing 480, 707 signatures with the
Secretary. The Secretary reviewed the sheets for statutory
compliance pursuant to A.R.S. § 19-121.01(A) and
determined that 454, 451 signatures were eligible for
verification. She then randomly selected a five percent
sample (22, 722 signatures) for verification by county
recorders for the counties in which the signatories claimed
to be qualified electors. See § 19-121.01(B).
¶7
Plaintiffs are qualified electors. On July 19, before
completion of the signature verification process, they filed
a complaint in the trial court against the Secretary, the
Committee, all county recorders, and all members of county
boards of supervisors, challenging the petition signatures on
several bases and seeking to enjoin placement of the
Initiative on the ballot. In an interlocutory judgment
entered pursuant to Arizona Rule of Civil Procedure 54(b),
the trial court dismissed Plaintiffs' claim alleging
deficiencies in the Committee's statement of
organization. The court also dismissed the claims against the
county recorders and the board members as unripe. In
addition, the court rejected the Committee's argument
that Plaintiffs can only challenge petition signatures within
the random five percent sample submitted to the county
recorders for verification. On expedited appeal and
cross-appeal, in an order filed August 20 (with an opinion to
follow), this Court affirmed the trial court's
interlocutory judgment.
¶8
Meanwhile, the county recorders completed their signature
review of the five percent sample. After disqualifying some
signatures and validating others, they established a 72.37%
validity rate. The Secretary applied that rate to the 454,
451 signatures eligible for verification, see A.R.S.
§ 19-121.04(A)(3), and concluded that "the
estimated total number of valid signatures is 328, 908, which
exceeds the 225, 963 minimum" number of required
signatures.
¶9
Plaintiffs filed new complaints against eleven county
recorders, alleging they improperly accepted invalid
signatures during their reviews. The trial court consolidated
these cases with the initial case. Although Plaintiffs raised
several challenges, the core issue before the court was
whether the Committee had obtained the 225, 963 valid
signatures required to place the Initiative on the ballot.
¶10
A five-day trial of extraordinary logistical complexity began
on August 20. Approximately 5500 exhibits were admitted in
evidence, some of which were thousands of pages in length,
and more than fifty witnesses testified. Plaintiffs
subpoenaed more than 1180 witnesses, most of whom were
petition circulators. The trial court struck petition
signatures gathered by more than 300 circulators because they
either did not comply with their subpoenas, see
A.R.S. § 19-118(C), or violated statutory requirements
when gathering signatures, see A.R.S. §§
19-112(A), -114(A). Ultimately, the court found that the
Committee had gathered a sufficient number of valid
signatures to place the Initiative on the ballot and
therefore denied Plaintiffs' request for injunctive
relief. On expedited appeal, we affirmed the trial
court's judgment in an order filed August 29 (again, with
an opinion to follow).
¶11
This Court has jurisdiction over this expedited election
matter under article 6, section 5 of the Arizona Constitution
and A.R.S. §§ 19-118, -122. As noted above, we
previously issued orders affirming both the trial court's
initial Rule 54(b) judgment and its final judgment with
opinions to follow. We have consolidated the appeals and
provide a single opinion to explain our reasoning.
DISCUSSION
I.
The defective statement of organization claim
¶12
Plaintiffs argue the Committee filed a defective statement of
organization on February 9 by naming CEHA LLC as a sponsor
before it existed, failing to name NextGen as a sponsor, and
failing to incorporate "NextGen" into the
Committee's name.[1] Consequently, Plaintiffs assert, the
Committee never properly formed, and the Initiative
application was a nullity under § 19-111(A) because a
valid statement of organization was not filed with the
application. Because § 19-114(B) provides that
signatures on initiative petitions "are void and shall
not be counted" if collected by a PAC "prior to the
filing of the committee's statement of
organization," Plaintiffs claim that none of the
petition signatures here are valid and the Initiative fails
to qualify for the ballot. See Pacion v. Thomas, 225
Ariz. 168, 170 ¶ 12 (2010) (recognizing that §
19-114(B) disqualifies signatures on initiative petitions
collected before formation of a PAC).
¶13
The trial court dismissed this claim without deciding whether
the statement of organization was defective, ruling that
Plaintiffs did not have a private right of action to make
this challenge. Alternately, the court found that
Plaintiffs' claim was barred by laches. Reviewing the
dismissal of Plaintiffs' claim de novo as an issue of
law, see Coleman v. City of Mesa, 230 Ariz. 352,
355-56 ¶ 7 (2012), for the reasons below we affirm the
trial court's ruling on the first ground and therefore do
not address laches.
¶14
Any person may "contest[] the validity of an initiative
or referendum measure based on the actions of the secretary
of state or compliance with [chapter one of Title 19]."
§ 19-122(C). The issue here is whether the
Plaintiffs' challenge based on the statement of
organization identifies grounds for invalidating the
initiative measure. The Committee argues, and the trial court
agreed, that Plaintiffs' claim can only be asserted under
Title 16, which sets forth the required contents for a
statement of organization and provides remedies for
non-compliance. See A.R.S. §§ 16-906(B),
-938, -1021. Plaintiffs counter that their claim arises under
§ 19-122(C) because it challenges both (1) the
Secretary's act in accepting a defective application
package and issuing an official serial number in violation of
§ 19-111(A) and (B), and (2) the Committee's failure
to file a valid statement of organization with its
application as required by § 19-111(A).
¶15
Before resolving this issue, it is useful to consider the
interplay between Titles 16 and 19 concerning a statement of
organization. An entity wishing to form as a PAC to support
or oppose an initiative measure must file a statement of
organization in compliance with § 16-906(B). That
statute directs how a committee must be named and requires
the statement of organization to list other information,
including "[t]he name, mailing address, e-mail address,
website, if any, and telephone number of any sponsor."
§ 16-906(B)(2).
¶16
The statement of organization must be filed with a
"filing officer," § 16-906(A), who is either
the Secretary, for a statewide ballot measure, or a county,
city, or town officer, for a local ballot measure, A.R.S.
§§ 16-901(27), -928(A). "On filing a statement
of organization, the filing officer shall issue an
identification number to the committee," §
16-906(D), which implicitly evidences the statement's
compliance with § 16-906(B) and authorizes the
now-formed committee to "perform any lawful
activity," including making expenditures and advocating
for an issue, § 16-906(G). The committee must amend its
statement of organization within ten days of any change in
committee information. § 16-906(C). Importantly here,
nothing in Title 16 provides that if a facially valid
statement contains errors or omissions, it is a nullity and
voids the PACs lawful authority.
¶17
Title 16 also provides remedies if a PACs statement of
organization fails to comply with § 16-906(B). On
receipt of a complaint by a third party, the filing officer
who accepted the statement of organization is authorized to
investigate a violation of § 16-906 and refer any
violation to an "enforcement officer" for further
investigation and proceedings. §§ 16-901(21),
-938(A), (C), (E). (Depending on the identity of the filing
officer, the "enforcement officer" is either the
Attorney General, a county attorney, or a city or town
attorney. §§ 16-901(21), -938(C).) "The
enforcement officer has the sole and exclusive authority to
initiate any applicable administrative or judicial
proceedings to enforce an alleged violation of [§
16-906]." § 16-938(F). If a violation is found, the
committee is permitted to avoid any penalty by taking
corrective action within twenty days after issuance of a
notice of violation. § 16-938(G). The enforcement
officer may also initiate civil or criminal proceedings to
enforce provisions of Title 16, including § 16-906.
See § 16-1021.
¶18
A PAC that proposes a statewide or local initiative measure
must apply for an official petition serial number by filing
an application with the Secretary on a form provided by her.
§ 19-111(A). The application must provide identifying
information, the text of the proposed initiative, and a
100-word summary of the initiative's principal
provisions. Id.
¶19
The committee must also simultaneously file "its
statement of organization" with the Secretary, and if it
fails to do so, she is prohibited from accepting the
application. Id. If a committee files an application
with an accompanying statement of organization, the Secretary
"shall assign an official serial number to the
petition," which is affixed to all petition sheets
circulated for signatures. § 19-111(B); see
also § 19-112 (addressing petition signatures).
Signatures collected on initiative petition sheets by a PAC
or its agents "prior to the filing of the
committee's statement of organization are void and shall
not be counted in determining the legal sufficiency of the
petition." § 19-114(B).
¶20
We agree with the trial court that § 19-122(C) does not
authorize Plaintiffs to either challenge the Secretary's
actions or contest the validity of the Initiative based on
the statement of organization's alleged non-compliance
with § 16-906(B). Those claims do not arise under Title
19.
¶21
First, § 19-111 is not the statutory vehicle for
validating a statement of organization. Instead, that statute
requires an initiative applicant to file an existing
statement of organization, presumably to demonstrate its
lawful authority to file an application. There is no
requirement in § 19-111 to disclose an existing sponsor,
as the dissent repeatedly states. Because a PAC is not formed
and cannot perform lawful activities until its statement of
organization is filed with the appropriate filing officer
under Title 16, § 19-111(A) necessarily contemplates
that the statement of organization has previously been filed
and an identification number issued under Title 16.
See § 19-111(A) (requiring the applicant to
file "its statement of organization"). Here, for
example, the Committee's application included the
statement of organization identification number issued under
Title 16.
¶22
Second, an applicant satisfies § 19-111(A) by filing its
existing statement of organization, even if the statement
contains an error or omission. Plaintiffs contend that §
19-111(A) must require a valid statement of organization or
applicants could bypass legislative intent by simply jotting
"statement of organization" on a paper and filing
it. We agree that § 19-111(A) requires an applicant to
file a facially valid statement of organization; a bare
scribbling would not suffice. But a statement of organization
bearing an identification number issued by the appropriate
filing officer demonstrates compliance with § 16-906.
See supra ¶ 16. The PAC is formed and may
engage in lawful activity, such as filing an initiative
application. See §§ 16-906(G), 19-111(A).
In short, a statement of organization filed under §
16-906 and accepted by the filing officer, as evidenced by
issuance of an identification number, is valid for purposes
of § 19-111(A), even if it contains errors or omissions.
¶23
Third, the Secretary is statutorily required to assign an
official serial number upon the applicant's filing of an
application and a statement of organization. See
§ 19-111(B) ("On receipt of the application [with
the accompanying statement of organization], the secretary of
state shall assign an official serial number to the petition
. . . ."). Nothing in § 19-111, or any other
provision in Title 19, authorizes the Secretary to
investigate a statement of organization's compliance with
§ 16-906(B) or to reject an application if a statement
is found lacking. Relatedly, nothing in Title 19 authorizes
or requires the Secretary to disqualify petition sheets or
signatures if the statement of organization, or any
amendments to it, did not comply with § 16-906. In
contrast, elsewhere in Title 19, the legislature has
explicitly stated the Secretary's obligation to
investigate the accuracy of initiative-related filings.
See, e.g., § 19-121.01(A)(1)(h) (requiring the
Secretary to remove filed initiative petition sheets if the
circulator was not properly registered at the time of
circulation).
¶24
Fourth, and finally, Title 16 establishes exclusive
procedures for challenging a statement of organization. As
previously explained, a third party can challenge compliance
with § 16-906(B) by filing a complaint with the filing
officer, who can then investigate and refer any violations to
an enforcement officer. See §§ 16-901(21),
-938(A), (C), (E). "The enforcement officer has the sole
and exclusive authority to initiate any applicable
administrative or judicial proceedings to enforce an alleged
violation" of the statement of organization
requirements. See § 16-938(F). And if a
violation is found, the committee is permitted an opportunity
to take corrective action before suffering a penalty. §
16-938(G). Interpreting § 19-122(C) as authorizing a
plaintiff to file a lawsuit to challenge an initiative
measure due to an allegedly defective statement of
organization would nullify these Title 16 provisions. Cf.
Butler Law Firm, PLC v. Higgins, 243 Ariz. 456, 459
¶ 7 (2018) ("Statutes relating to the same subject
or general purpose should be considered to guide construction
and to give effect to all the provisions involved.").
¶25
The dissent passionately argues that third parties must be
entitled to challenge initiative petition signatures based on
a PAC's failure to disclose a sponsor in its statement of
organization so that citizens signing petitions are not
misled. But the dissent fails to explain why this public
protection goal cannot be achieved through Title 16. Here,
for example, Plaintiffs could have filed a complaint with the
Secretary as early as February and at least by mid-April
(after the Committee filed its first required campaign
finance report revealing NextGen as a substantial donor)
alleging that the Committee's statement of organization
was false because it failed to list NextGen as a sponsor. The
Secretary could have investigated and referred any violation
to the Attorney General, and the Committee could have taken
corrective action by disclosing NextGen as a sponsor (if
required) or faced an enforcement action that may have
nullified its statement of organization and thus its ability
to continue to act. The benefit of pursuing the Title 16
remedy early is obvious: waiting until hundreds of thousands
of signatures are gathered to address the issue, as the
dissent contends should occur, risks disenfranchising
citizens who signed petitions because they supported the
Initiative.
¶26
In sum, even though the Committee was required to file its
statement of organization with the initiative application,
see § 19-111(A), the statement's contents
are not governed by chapter one of Title 19. Further, nothing
in Title 19 authorizes the Secretary to reject a facially
valid statement that did not, in fact, comply with §
16-906(B). Thus, even if the Committee's statement of
organization failed to meet § 16-906(B)'s
requirements, that deficiency neither nullified the
initiative application under § 19-111(A) nor voided the
later-collected signatures pursuant to § 19-114(B). To
the extent the court of appeals suggested otherwise in
Israel v. Town of Cave Creek, 196 Ariz. 150, 155
¶ 24 n.7 (App. 1999), we disapprove it. Plaintiffs'
claim did not establish grounds for invalidating the
Initiative under § 19-122(C), and the trial court
properly dismissed this claim.
II.
Legally sufficient title
¶27
The Initiative's title declares that the measure amends
the constitution "to require electricity providers to
generate at least 50% of their annual sales of electricity
from renewable energy sources." Plaintiffs argue this is
false and misleading because the Initiative applies only to
electricity providers that are also "public service
corporations" and not others, most notably Salt River
Agricultural Improvement and Power District. We review this
issue de novo as a mixed question of fact and law. See
Wilmot v. Wilmot, 203 Ariz. 565, 568-59 ¶ 10
(2002).
¶28
A "full and correct copy of the Title and text of the
measure" must be attached to all petition sheets. Ariz.
Const. art. 4, pt. 1, § 1(9); see also
§§ 19-112(B), -121(A)(3) (both to same effect). All
that is constitutionally and statutorily required is
"some title and some text." Arizona Chamber of
Commerce & Indus. v. Kiley, 242 Ariz. 533, 541
¶ 31 (2017). Nevertheless, in Kromko v. Superior
Court, this Court criticized using extraneous
"short titles" in petition sheets that
"contain[] either untrue representations designed to
defraud potential signatories, or highly inflammatory
language calculated to incite partisan rage." 168 Ariz.
51, 59 (1991).
¶29
The Initiative's title is not deceptive. It accurately
states that the measure affects "electricity
providers." Although the title does not mention that the
Initiative applies only to "public service
corporations" that provide electricity, such detail is
neither required nor necessary to avoid misleading voters.
Cf id. at 60 (noting the initiative title was
misleading "if at all" because it was incomplete
and concluding that "[w]e cannot say that a title's
failure to describe every aspect of a proposed measure always
creates the degree of fraud, confusion, and unfairness
sufficient to invalidate the petition upon which the title
rests"). Importantly, an initiative's title gives
notice of the measure's subject matter-no more, no less.
See Dennis v. Jordan, 71 Ariz. 430, 439 (1951)
(stating "it is not necessary that the title be a
synopsis or a complete index of the legislation that is to
follow" but suffices if it "indicate[s], in a
general way at least, what is to follow in the way of
legislation" and "put[s] anyone having an interest
in the subject matter on inquiry" (emphasis removed)
(internal quotations omitted)). The Initiative's title
served this purpose by notifying interested parties that the
measure imposes renewable-energy-source requirements on
"electricity providers." Interested voters are
placed on notice to read the Initiative's text for
details, which include that the measure applies only to
"public service corporations." The trial court
correctly rejected Plaintiffs' challenge.
III.
Sufficient number of valid signatures
¶30
The Committee submitted 480, 707 signatures to the Secretary,
which, if valid, far exceeded the 225, 963 signatures
required to place the Initiative on the ballot. The trial
court invalidated 79, 252 signatures for various reasons not
at issue here, leaving 401, 455 potentially valid signatures.
To disqualify the Initiative from the ballot, therefore,
Plaintiffs were required to prove by clear and convincing
evidence that at least another 175, 493 signatures were
invalid (401, 455 - 175, 493 = 225, 962). Cf. McClung v.
Bennett, 225 Ariz. 154, 156 ¶ 7 (2010) (stating
burden for challenging signatures to candidate nominating
petitions).
A.
Improper ...