Keim v. Douglas County School District

Opinion by JUDGE GABRIEL ¶ 1 In this campaign finance dispute, respondent, Douglas County School District (the District), appeals the final agency decision of an administrative law judge' (ALJ). The ALJ found that the District 'violated Colorado’s Fair Campaign Practices Act (FCPA), § l~45-117(l)(a)(I), C.R.S.2014, -when it contracted for and disseminated a report by Dr. Frederick M. Hess and Max Eden of the American Enterprise Institute 724 (the Hess Report). We conclude that the Hess Report was not given, directly or indirectly, to any candidate for the purpose of promoting that candidate’s election. Accordingly, we further conclude that the' dissemination of the Hess Report did not constitute a “contribution” under, and the District therefore did not violate, the FCPA in this case. We thus reverse the ALJ’s order. I. Background ¶ 2 The District is a political subdivision of the state and is therefore subject to the FCPA. See, Taxpayers for Pub. Educ. v. Douglas Cnty. Sch. Dist., 2013 COA 20, ¶ 37, 356 P.3d 833 (cert. granted Mar. 17, 2014); § 1-45-117(1)(a)(I). ¶ 3 According to petitioner, Julie Keim, beginning with the school board election of 2009, the District began implementing what has been referred to as a “reform” agenda, and after the 2011 school board election, all seven members of the Douglas County School Board (the Board) supported this agenda, as did the District’s then newly appointed superintendent, Dr. Elizabeth Cela-nia-Fagen. Keim was a candidate for one of four open positions on the Board in the November 2013 election. ¶ 4 On February 6, 2013, the District signed an Independent Contractor Agreement with the American Enterprise Institute (AEI). This agreement (the AEI Agreement) provided that AEI would “research, create, and publicize” a white paper that ultimately became the Hess Report. At the time the AEI Agreement was- signed, no one had declared that he or she would be> a candidate for any of the Board seats 'that would be open in the 2013 election. Moreover, the AEI Agreement provided that it would terminate on December 31, 2013, unless the required services were completed or the Agreement was terminated by either party, thereby suggesting that the white paper was not required to be.completed until almost two months after the 2013 election. ¶ 5 The AEI Agreement’s “Scope of Services” stated that the white paper would: a.Describe Douglas County, the school system, and Superintendent Fagen’s background and expertise. b. Describe some of the problems that Douglas County’s efforts are meant to address. c. Describe what Douglas County is doing in terms of curriculum, instruction, programs, systems in place, etc. d. Explain how this is new and different; describe some of the advantages of the model. e. Delineate some of the challenges Douglas County faces based on this ■ model. f. Explain lessons learned from the model. ¶ 6 The District agreed to pay AEI $30,000, inclusive of expenses, to complete its work under the AEI Agreement. Ultimately, the District paid $15,000 of this sum, with the remainder being paid by the Douglas County School District Foundation. The amount paid by the District was funded by a grant that the District had received from the Daniels Fund. ¶ 7 Hess and his research assistant, Eden, undertook the tasks required by the AEI Agreement, and the record reflects that their work was not intended to be a wholly independent review and evaluation of the District. Rather, Hess and Eden worked with the District to provide a report that the District would ultimately review and approve. ¶ 8 Toward that end, in advance of a trip to Colorado to collect information, Eden wrote to the District’s Community Relations Officer: Ideally we woüld love for you all to help us help you. We can touch base on this as the date draws closer, but we would prefer not to go out there with a blank slate. Rather, we would prefer it if you would tell us what you want us to focus on, what is most worthy of attention, what you’d like to see written about and what your general angle on it (and the paper) is. This is just something to flag to Dr. Fagen so she can mull it over a bit. Perhaps all of the interviews are already lined up with a certain focus in mind, but if not we encourage you to tailor our time out there to directed interviews with folks that you want to 725 make a particular point of in us meeting and writing about them. ¶ 9 Likewise, AEI provided a draft version of the report to the District on July 31, 2013, and a significant number of changes were made thereafter, with at least some of these changes being requested by representatives of the District. ¶ 10 In the weeks just prior to the release of the completed Hess Report, Eden asked the District’s Community Relations Officer to obtain a quote from Superintendent Fagen about how important the then-upcoming school board election was. This quote was to accompany the release of the Hess Report, although the quote was to be included in an op-ed to be placed by Hess in an online periodical, not in the Hess Report itself. Superintendent Fagen did not ultimately provide such a quote, but the president of the Board did. His quote read, “The teachers’ union would like to return to the days of big payouts for union officers, ... ending, choice for students, and rewarding bad performance. This election presents a clear choice between union interests versus what is best for our students.” ¶ 11 The District received the final version of the Hess Report in September 2013. For present purposes, several portions of the Report are pertinent: • The introduction to the Hess Report indicated that it would provide (1) “a look at the ambitious reform effort” in Douglas County, which county the Hess Report described as a “Republican bastion”; (2) “a case study examining cage-busting leaders seeking to reimagine schools and school systems”; and (3) “a chance to see a vision of unconventional, bold leadership in practice.” The introduction further noted, however, that the Hess Report was not intended as an evaluation or endorsement of the Douglas County effort. • The Hess Report described the reform agenda as (1) “perhaps the nation’s boldest attempt at suburban school reform”; (2) “unusually ambitious”; (3) “remarkable in the annals of contemporary school reform”; (4) “radically different”; and (5) “remarkable and illuminating.” • A section of the Hess Report entitled, “Electing a Reform Board,” described the history of the then-existing Board and the appointment of Superintendent . Fagen. • The Hess' Report contained brief biographical profiles of the existing Board members. • The Hess Report observed that Douglas County was “a compelling illustration of how a unified board majority can fuel rapid, ambitious reform” and noted that the Board’s “cohesion” and “focus” were striking. • The Hess Report referenced the upcoming school board election and noted the rumors that the American Federation of Teachers might spend substantial sums to defeat the .incumbents who were running for re-election. ¶ 12 On September 18, 2013, the District included an Internet link to the Hess Report in its weekly e-newsletter, which reached approximately 85,000 Douglas County residents. Referring to the Hess Report, the newsletter stated, “Hess and Eden point out that districts undergoing significant school reform transform from poor to passable, Douglas County’s distinctive aim to going [sic] from good to great. The paper focuses on Douglas County réforms including choice and pay for performance.” ¶ 13 Shortly after the District disseminated the Hess Report, Keim filed the current action, ultimately alleging, as pertinent here, that (1) the District had used public resources “to support a slate of candidates running for school board in violation of the FCPA”; and (2) District resources w;ere used in the “research, compilation, preparation and dissemination” of the Hess Report, and the Hess Report was “political in nature, supportive of the platform advocated by the Reform Slate [of Board candidates], and being used to influence the outcome of the election.” ¶ 14 In its answer to Keim’s amended complaint, the District admitted that District resources were used to fund the Hess Report 726 but denied that the Hess Report was political in nature. , ¶ 15 The matter ultimately proceeded to a 'two-day trial before the ALJ. The ALJ subsequently issued a final agency decision finding that (1) the Hess Report “overall painted a positive picture of the reform agenda” and “touted the benefits of having a unified board to advance the reform agenda”; (2) the Hess Report “was commissioned and published as a means to support ... the reform agenda and any candidates who would further that agenda”; and (3) “the District spent public funds to influence the outcome of the Board election when it commissioned and paid $15,000 for the Hess Report.” Based on these findings, the ALJ concluded that by contracting for and disseminating the Hess Report, the District had made a contribution in violation of the FCPA. ¶ 16 The District now appeals. II. Standard of Review ¶ 17 When, as here, judicial review of agency action is directed to this court, we apply the standard of review set forth in section 24-4-106(7), C.R.S. 2014. See § 24-4-106(1 l)(e). ' ' ¶ 18 Section 24-4-106(7) provides, in pertinent part: If the court finds no error, it shall affirm the agency action. If it finds that the agency action is arbitrary or capricious, a denial of statutory right, contrary to constitutional right, power, privilege, or immunity, in excess of statutory' jurisdiction, authority, purposes, or 'limitations, not in accord with the procedures or procedural limitations of this article Or as otherwise required by law, an abuse or clearly unwarranted exercise, of discretion, based upon findings of fact that are clearly erroneous on the whole record, unsupported by substantial evidence when the record 'is considered as a whole, or otherwise contrary to law, then the court shall hold unlawful and set aside the agency action and ... afford such other relief as may be appropriate. In making the foregoing determinations, the court shall review the whole record or such portions thereof as-may be cited by any party, ¶ 19 A reviewing court must give deference to the reasonable interpretations of the administrative agency authorized to enforce a statute. Colo. Ethics Watch v. City & Cnty. of Broomfield, 203 P.3d 623, 624 (Cola.App.2009) (City & Cnty. of Broomfield ). The agency’s statutory construction, however, is not binding on an appellate court. Id. ¶ 20 In addition, in construing a constitutional provision, we must give effect to the intent of the electorate that adopted it. Colo. Ethics Watch v. Senate Majority Fund, LLC, 2012 CO 12, ¶ 20, 269 P.3d 1248, 1253 (Senate Majority Fund), We look to the words used, reading them in context and according them their plain ' and ordinary meanings. Harwood v. Senate Majority Fund LLC, 141 P.3d 962, 964 (Colo.App.2006). If the language of an amendment is clear and unambiguous, then we must enforce it as written. Senate Majority Fund 269 P.3d at 1254, If, however, the amendment’s language is susceptible of multiple reasonable, interpretations, then we must construe the amendment in light of the objective sought to be achieved and the mischief sought to be avoided by the amendment. Id. ¶ 21 We must also avoid interpretations that lead to unjust, absurd, or unreasonable results. Huber v. Colo. Mining Ass’n, 264 P.3d 884, 889 (Colo.2011). In addition, in construing a constitutional provision, we. presume that each clause and sentence has a purpose, and we must avoid a construction that renders any portion of the provision superfluous. See People v. Rodriguez, 112 P.3d 693, 697 (Colo.2005) (noting that appellate courts presume that each phrase of the constitution was included for a purpose and thus reading a constitutional provision to imply a particular requirement because-interpreting the provision otherwise would render a portion of it superfluous); In re Great Outdoors Colo. Trust Fund, 913 P.2d 533, 542 (Colo.1996) (“[I]n construing constitutional language, each clause and sentence must be presumed to have purpose and use.. Courts must lean in favor of a construction that will render every word op 727 erative, rather than one that may make some words idle and nugatory”). III. “Contribution” Under Colorado’s Campaign Finance Laws ¶ 22 The District contends that because the Hess Report did not constitute a “contribution” as defined by applicable law, the AL J erred in concluding that the District violated the FCPA. We agree. ■ A Applicable Law ¶ 23 The FCPA prohibits political' subdivisions like the District from making “any contribution in campaigns involving the nomination, retention, or election of any person to any public office.” § 1 — 45—117(l)(a)(I). The term “contribution,” as used in the FCPA, has the same meaning as set forth in section 2(5) of article XXVIII of the Colorado Constitution. See § l-46-103(6)(a), C.R.S. 2014. ¶ 24 Section 2(5) provides, in pertinent part: (а) “Contribution” means: (II) Any payment made to a third party for the benefit of any candidate committee, issue committee, political committee, small donor committee, or political party; (TV) Anything of value .given, directly or indirectly, to a candidate for the purpose of promoting the candidate’s nomination, retention, recall, or election. B. Preliminary Matters ¶ 25 Before proceeding to our analysis of the issues before us, we address three preliminary matters. ¶ 26 First, we reject the District’s contention that it did not make a contribution because no public funds or resources were used in connection with the Hess Report, ¶ 27 As noted above, in its .answer to Keim’s amended complaint, the District admitted that District resources were used to fund the Hess Report, and parties are bound by such admissions in their pleadings. See Emrich v. Joyce’s Submarine Sandwiches, Inc., 751 P.2d 651, 652 (Colo.App.1987). ¶ 28 Likewise, in his opening statement at trial, the District’s counsel stated: [Y]es, the School District paid for half the cost of the Hess paper. That paper was; I believe, $30,000. And the School District paid for half' of that.... [T]he School District is not claiming' that these weré independent, third-party research papers done, unbeknownst to the District. They readily admitted that they paid for half the Hess paper. And they’ll readily admit that they worked with the researchers to provide them information about the District, and to make staff available to the researchers. ¶ 29 And the District’s in-house legal counsel testified that the' funds used to. pay for the. Hess Report were public funds, even if they had previously been supplied to the District by the Daniels Fund. ¶ 30 Accordingly, we perceive no error in the ALJ’s factual finding that the District had paid for the’Hess Report with public funds, . ¶ 31 Second, to the extent that Keim suggests on appeal that the definition of the term .“contribution”- contained in section 2(5)(a)(II) of article XXVIII of the Colorado Constitution somehow applies here, her argu-. ment, which she did not assert below, is unpersuasive, Although we may affirm a trial court’s ruling on any ground that is supported by the, record, see Premier Members Fed. Credit Union v. Block, 2013 COA 128, ¶ 9, 312 P.3d 276, 278, there was no evidence in the record that the District made a payment to a third party for the benefit of any candidate committee, issue committee, political committee, small donor committee, or political party. Accordingly, section 2(5)(a)(II) is inapplicable. ¶ 32 Third, we. feel compelled to comment on the tone of the District’s appellate briefs. In its briefs, the District referred to Keim’s arguments as “nonsensical”; -accused her of “subtle mischaracterizatien,” “wholesale mis-characterization,” and “blatantly -misleading” the court; described its reaction to certain of Keim’s arguments with inflammatory (or perhaps sarcastic) language like “dumbfounded”; 728 and even referred to certain of the ALJ’s findings in a derisive way. These kinds of personal attacks and serious accusations were inappropriate and unfounded. Disagreement — even vehement and vigorous disagreement — with a trial court’s rulings and with the arguments of an opposing party and counsel are, of course, part and parcel of any litigation matter. Nonetheless, we expect such disagreements to be civil and respectful. The use of rhetoric like that cited above is unpersuasive and unhelpful. See Martin v. Essrig, 277 P.3d 857, 860 & app’x (Colo. App. 2011). C. Discussion ¶ 33 As noted above, and as pertinent here, a “contribution” is defined as “[a]nything of value given, directly or indirectly, to a candidate for the purpose of promoting the candidate’s nomination, retention, recall, or election.” Colo. Const. art. XXVIII, § 2(5)(a)(IV). This case turns on the meaning of “given, directly or indirectly, .to a candidate.” Id. ¶ 34 We begin with the plain and ordinary meanings of the words used. See Harwood, 141 P.3d at 964. The term “give” means “to put into the possession of another for his use.” Webster’s Third New International Dictionary 959 (2002). “To” is “a function word to indicate the receiver of an action or the one for which something is done or exists.” Id. at 2401. “Indirect” is defined as “not proceeding straight from one point to another.” Id. at 1151. ¶ 35 In addition, although our constitution does not define the term “indirectly” in the context of campaign contributions, an analogous federal statute provides an example of an “indirect contribution” that is fully consistent with the plain meaning of those terms: [A]ll contributions made by a person, either directly or indirectly, on behalf of a particular candidate, • including contributions which are in any way earmarked or otherwise directed through an intermediary or conduit to'such candidate, shall be treated as contributions from such person to such candidate. 52 U.S.C.A. § 30116(a)(8) (West 2014); see also Buckley v. Valeo, 424 U.S. 1, 23-24, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam) (“The $1,000 [contribution] ceiling applies regardless of whether the contribution is given to the candidate, to a committee authorized in writing by the candidate to accept contributions on his behalf, or indirectly via earmarked gifts passed through an intermediary to the candidate.”) (emphasis added); United States v. Goland, 959 F.2d 1449, 1452 (9th Cir.1992) (following Buckley and concluding that the defendant made a contribution to a candidate when he made it indirectly, through an intermediary). ¶ 36 Similarly, in Colorado Education Association v. Rutt, 184 P.3d 65, 80-81 (Colo. 2008), our supreme court recognized, albeit in dicta, that when a union organized walks by. union members to distribute campaign literature in support of a state senate candidate, the candidate’s campaign may well have indirectly received value from the union’s activities (i.e., because the union effectively operated as the candidate’s volunteer coordinator, thus relieving the candidate from having to pay for such services himself). The court added that as a factual or evidentiary matter, the existence of some level of communication or cooperation between the union and the candidate would help demonstrate that the alleged contribution resulted in a benefit or value to the candidate. Id. at 81. ¶ 37 And in a different context, the Internal Revenue Service’s income tax regulations illustrate aii indirect gift as follows: If a taxpayer makes a gift to a corporation or other business entity intended for the eventual personal use or benefit of an individual who is an employee, stockholder, or other owner of the corporation or business entity, the gift generally "will be considered as made indirectly to such individual. 26 C.F.R. § 1.274-3(e)(2) (2014). ¶ 38 We cite these sources, which we view to be consistent with the plain meaning of the term “indirectly,” as illustrative only. For purposes here, we need not develop an all-encompassing definition of the word “indirectly,” as that term is used in the applicable definition of a “contribution.” Rather, applying the plain meaning of the terms used in the present context, we need only note that 729 indirectly giving something of value to a candidate must, at a minimum, involve providing something of value to someone other than the candidate himself or herself but with the intention that the candidate will eventually receive or make use of that thing of value. • ¶ 39 Accordingly, - in our view, the phrase “given, directly or indirectly, to a candidate for the purpose of promoting the candidate’s ... election” requires that (1) a thing of value (2) be put into the possession of or provided to a' candidate or someone acting on the candidate’s behalf ■ (3) with the intention that the candidate receive or make use of the thing of value provided (4) in order to promqte the candidate’s election. The candidate need not, however, personally receive and accept the thing of value, as the District contends. On this point, we agree with the contentions of amicus curiae, Colorado Ethics Watch, that such a requirement is unsupported by the constitutional definition of “contribution” and would arguably read the word “indirectly” out of that definition, which we cannot do. See Rodriguez, 112 P.3d at 697; In re Great Outdoors Colo. Trust Fund, 913 P.2d at 542. ¶ 40 Applying the foregoing definition here, we conclude that the evidence does not support the ALJ’s conclusion that the Hess Report was given, directly or indirectly, to a candidate for the puteóse of promoting that candidate’s election. Although the Hess Report was distributed by way of an e-mail link to 85,000 Douglas County residents, such a mass distribution was insufficient to establish that the District put the Hess Report into the possession of, or otherwise provided it to, any candidate or someone acting on behalf of a candidate. Nor have we seen any evidence to support a conclusion that the District made the distribution with the intention that a particular candidate would eventually receive or make use of the Hess Report. ¶ 41 In reaching this conclusion, we note that we are relying on our view that the AL J applied an incorrect legal standard. We have not failed to consider the ALJ’s factual findings, as the dissent contends. In addition, we acknowledge that one could read the Hess Report as favorable to the reform agenda and therefore conclude that the Hess Report’s mass distribution might have provided an incidental benefit to a pro-reform candidate. Concluding that such an incidental benefit was sufficient to establish a'“contribution,” however, would stretch the meaning of “given, directly or indirectly, to a candidate for the purpose of promoting the candidate’s ... election” too far. Cf. City & Cnty. of Broomfield, 203 P.3d at 625 (rejecting the plaintiffs argument that “for the purpose of’ in section 2(5)(a)(IV) of article XXVIII of the Colorado Constitution should be construed to mean “with the effect of’). ¶ 42 We are not persuaded otherwise by Keim’s argument that, under 8 Colo. Code Regs. 1505-6:10.3.1(d) (2014), the Hess Report was given to the candidates because they had the right to possess or ■ use it. Notwithstanding Keim’s suggestion to the contrary, regulation 1505-6:10.3.1(d) does not provide a definition of “contribution.” Rather, it assumes the existence of a contribution and defines the date on which that contribution was made Or received. See- id. Accordingly, this regulation- is inapposite.- ¶ 43 Moreover, Keim’s suggestion that a contribution is made whenever a candidate has a right to possess or use something of value is overbroad. Under such an interpretation, one could argue that a contribution is made any time a local government uses public resources to post on the Internet informátion that might potentially benefit a candidate, simply because the candidate could download and use that information. In our view, adopting such an interpretation would ignore the plain meaning of the phrase' “given, directly or indirectly, to a candidate” and could lead to absurd or unreasonable results, which we cannot countenance. See Huber, 264 P.3d at 889 (noting that we avoid interpretations that lead to -unjhst, absurd, or unreasonable results); Harwood, 141 P.3d at 964 (noting that we read the words of a constitutional provision in context and accord them their plain and ordinary meanings). ¶ 44 Accordingly, we conclude that the record does not support Keim’s argument, 'or the ALJ’s finding, that in’contracting for and disseminating the Hess Report, the District made a “contribution” in a campaign involv 730 ing the election of a person to public office, in violation of the FCPA. IV, Other Issues ¶ 45 In light of our foregoing disposition, we need not address the District’s various policy and First Amendment arguments. V. Conclusion ¶ 46 For these reasons, the order is reversed. JUDGE BOORAS concurs. JUDGE TAUBMAN dissents.