Navigating Colorado’s campaign-finance laws takes a lawyer, but getting free or reduced-cost legal help can put political speakers in hot water
In 2012, Coloradans for a Better Future (CBF) ran two radio ads in the Republican primary for the Colorado University Board of Regents race. One ad supported candidate Brian Davidson; the other opposed candidate Matthew Arnold. Months after he lost the race, Arnold started suing CBF. After three of these lawsuits, CBF—with the help of a volunteer lawyer—tried to stop the harassment by shutting down. But this only prompted a fourth lawsuit, with Arnold claiming that the legal assistance to CBF was an unreported campaign “contribution.”
Against the urging of the Colorado Secretary of State, the Colorado Court of Appeals agreed with Arnold, ruling that pro bono or reduced-cost legal services are “contributions” under Colorado campaign-finance laws.
The Court of Appeals’ ruling is wrong on the law and is dangerous for Coloradans. Campaign-finance laws are notoriously complex, which is why many political speakers rely on lawyers to help them navigate these laws. The Colorado Court of Appeals will making getting such legal help much more difficult and, in some cases, impossible. That’s why the Institute for Justice has teamed up with Coloradans for a Better Future to ask the Colorado Supreme Court to reverse the Court of Appeals’ ruling and protect the First Amendment rights of political speakers and the lawyers they rely on.
Introduction—Speaking Out in Colorado Triggers “Lawfare”
In 2012, Colorado’s Republican voters were faced with a choice in the campaign for Colorado University’s Board of Regents: Brian Davidson or Matthew Arnold? The campaign made headlines after Arnold admitted to lying about his educational credentials. 1
And in the heat of this debate, Coloradans for a Better Future (CBF) ran two radio ads, one promoting Davidson and one criticizing Arnold. Ultimately, Arnold lost the race. 2
Unfortunately for CBF, Arnold would go on to become a prolific complainant under Colorado’s system of private campaign-finance enforcement. Colorado has an unusual enforcement mechanism, under which “[a]ny person” can file a private lawsuit to enforce the campaign-finance laws. 3
And since 2014, Arnold has filed over 50 complaints, either personally or through a company he founded, called Campaign Integrity Watchdog. Many of these lawsuits have sought massive penalties for trivial violations of the law. In one case, for example, Arnold sought $36,000 in fines for two misreported contributions of only $3 each. 4
All of these complaints are part of what Arnold himself describes as a campaign of “political guerilla legal warfare (a.k.a. Lawfare)” against speakers whose political views he dislikes. 5
Having commented unfavorably on Arnold’s fitness for public office, CBF found itself at the top of his “lawfare” list. In Arnold’s view, the radio ad criticizing him was “garbage” and speakers like CBF “need to be dragged into court and need to be prosecuted and need to be found guilty and forced to pay fines and penalties and also made public and exposed for the cowardly, backstabbing scum that they are.” 6
So he started filing complaints against CBF, alleging various violations of campaign-finance law. After the third lawsuit, even the trial judge remarked that “Mr. Arnold’s complaint is clearly not a good faith effort to further the legitimate purposes of the [campaign-finance laws], but is nothing more than a game of ‘Gotcha.’” 7
In an effort to stop the harassment, CBF filed a termination report with the Colorado Secretary of State. But this only prompted a fourth lawsuit by Arnold, who claimed that CBF failed to properly disclose the value of the time spent by an attorney filing the termination report.
Insolvent, defunct, and unable to secure legal assistance (over the course of these suits, Arnold would file two bar complaints against attorneys for CBF), CBF did not respond to this latest lawsuit. Nevertheless, the Colorado Office of Administrative Courts threw the case out, finding that CBF had not violated the law in any way. 8
Arnold then appealed that ruling. This caught the attention of the Colorado Secretary of State, which twice tried to intervene in the lawsuit, but was denied each time. Ultimately, the Colorado Court of Appeals reversed the trial-court ruling, and held that pro bono or reduced-cost legal services were contributions under Colorado campaign-finance law. 9
Colorado’s Campaign-Finance Maze
The Court of Appeals’ ruling will have drastic effects on political speakers throughout Colorado. Campaign-finance law is complex, and Colorado’s law is especially so. One study that attempted to measure the ability of ordinary people to comply with Colorado’s byzantine system of campaign-finance regulations found it virtually impossible; out of 255 adults who were asked to complete campaign-finance forms, not a single one filled them in without any errors. 10
Even the 140-page Colorado Campaign and Political Finance Manual stresses the need for political speakers to get legal advice. 11
To make matters worse, even the most minuscule mistake on a campaign-finance document can lead to months or years of litigation, costing thousands of dollars. Because campaign-finance complaints are considered civil lawsuits, people accused of violating the campaign-finance laws have no right to a public defender; they must either pay for a lawyer, find a lawyer willing to represent them for free, or go it alone.
For many groups in Colorado, the Court of Appeals’ ruling takes the option of finding a free—or even affordable—lawyer off the table. That’s because hundreds of groups subject to Colorado’s campaign-finance laws are also subject to stringent limits on the size of contributions they may accept. For state house or senate campaign committees, the limit is only $400 per person per election cycle. 12
For small-donor committees, the limit is $50 per year. 13
Because campaign-finance lawyers routinely charge hundreds of dollars per hour for legal services, any pro bono or reduced-cost legal services could quickly exceed these caps, leaving speakers who cannot afford to pay a lawyer with no access to legal help. In effect, ordinary citizens are priced-out of exercising their First Amendment rights in Colorado.
The Constitution Protects Pro Bono Legal Services
The plain text of Colorado’s definitions of “contribution” makes clear that they’re intended to cover contributions of money or property, not pro bono legal services to groups like CBF. 14
And by holding otherwise, the Court of Appeals has not just gotten the law wrong; it has placed Colorado law in direct conflict with the U.S. Constitution. In fact, the only other court to have considered these issues held recently that a similar interpretation of Washington law violated both the First Amendment and the Supremacy Clause of the Constitution. 15
Categorizing pro bono aid as “contributions” presents serious First Amendment concerns, not only for the groups receiving the aid, but also for the lawyers providing it. The U.S. Supreme Court has held that the provision of pro bono legal services is itself an important form of speech and association. 16
Speakers rely on pro bono legal aid to make their speech more effective, and lawyers routinely provide such aid to promote broader societal goals. The court’s interpretation of “contribution” will severely burden these activities.
Because the court’s interpretation would also apply to pro bono services rendered in federal civil-rights lawsuits, the ruling also creates serious problems under the Supremacy Clause of the U.S. Constitution. 17
Under the Supremacy Clause and the related legal doctrine of “federal preemption,” valid federal laws trump state laws that conflict with them. In this case, the Colorado Court of Appeals’ interpretation of “contribution” conflicts with the Civil Rights Act of 1871, which allowed people whose constitutional rights have been violated by state officials to bring federal lawsuits to vindicate their rights. Much of the litigation under the Civil Rights Act of 1871 is filed by groups like the Institute for Justice, which represents clients for free. By making such representation more difficult or in some cases illegal, the Colorado Court of Appeals’ interpretation violates the Supremacy Clause.
Not only does the Court of Appeals’ ruling conflict with the Constitution, it will also create confusion and mislead the public. Charities like the Institute for Justice, for example, are prohibited from making political contributions or engaging in partisan activity, and they must be careful to avoid even the appearance of such activity. But requiring political entities to report “contributions” from such charities creates precisely this appearance and misleads the public. IJ, for instance, has no interest in CBF’s political goals. Yet if CBF were still registered as a “political organization,” the Court of Appeals’ ruling would have required it to inaccurately report IJ’s legal aid as partisan support.
That’s why on August 11, 2016, the Institute for Justice teamed up with Coloradans for a Better Future to file a petition with the Colorado Supreme Court, asking it to take up and reverse the decision of the Colorado Court of Appeals.
Coloradans for a Better Future was formerly registered as a “political organization” under Colorado law and was active in the 2012 Colorado University Board of Regents election.
Campaign Integrity Watchdog LLC is a company founded by former Board of Regents candidate Matthew Arnold. It has filed more than 50 private campaign-finance lawsuits since 2014.
The Court of Appeals’ interpretation of Colorado law conflicts with the First Amendment to the U.S. Constitution and is preempted by federal law. But all of these constitutional problems can be avoided by interpreting the law to exclude pro bono or reduced-cost legal services. This interpretation is not only possible, it is a far more natural reading of the law than the one adopted by the Court of Appeals.
The litigation team consists of IJ Senior Attorney Paul Sherman and IJ Attorney Sam Gedge. Mario Nicolais of KBN Law LLC 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.
For more information, contact:
Institute for Justice
901 N. Glebe Rd
Arlington, VA 22203-1854