Freedom Foundation

Why Freedom Foundation will appeal flawed state court decision to U.S. Supreme Court

On Jan. 10th, the Washington State Supreme Court ruled in a 5-4 decision that the Freedom Foundation should have reported the value of pro bono legal services it provided to citizen sponsors of several local ballot measures in 2014 to the Public Disclosure Commission (PDC), the state agency that oversees campaign finance laws and spending.

As four justices pointed out in a dissent written by Justice Sheryl Gordon McCloud, there is no disputing that the statute in question is indisputably ambiguous. And because the requirement to disclose its legal services to the PDC implicates the Freedom Foundation’s ability to engage in free speech, the majority’s decision to resolve that ambiguity against the Freedom Foundation raises First Amendment concerns. Accordingly, the Freedom Foundation intends to appeal the ruling to the U.S. Supreme Court.

The lawsuit stems from efforts in 2014 by citizen activists in the cities of Sequim, Chelan and Shelton to place initiatives on the ballot, based on model policies developed by the Freedom Foundation, to require city government to open its collective bargaining negotiations with unions representing city employees to public observation and to permit city employees to choose for themselves whether to financially support a union.

In accordance with RCW 35.17.260, the activists gathered the appropriate number of signatures to qualify the measures for the ballot and simultaneously filed both the initiatives and supporting signatures with appropriate city elections officials.

State law requires that the city council then either pass the initiative as submitted or submit it to a vote of the people. However, the city councils in each city decided to simply ignore the validly submitted initiatives. Freedom Foundation attorneys subsequently filed litigation against the cities on behalf of the citizen activists seeking to force the city councils to refer the measures to the voters. Superior Courts ruled against the activists and the decisions were not appealed.

In 2015, a political committee named, “The Committee for Transparency in Elections,” filed a complaint with the Washington Attorney General’s Office (AGO) alleging the Freedom Foundation should have reported to the PDC the value of the legal services it provided to the citizen activists. The Committee, formed for the sole purpose of filing this complaint, was funded by $1,000 contributions each from SEIU Local 775’s political committee and the SEIU Washington State Council’s political committee.

The AGO in Oct. 2015 concluded “the majority of the allegations did not constitute violations of state law,” but filed suit against the Foundation for not reporting the value of its attorneys’ time to the PDC.

In May 2016, a Thurston County Superior Court judge ruled against the AGO, finding the law to be “ambiguous and vague.” The AGO appealed the decision and, in Nov. 2017, the Court of Appeals reversed the Superior Court’s ruling.

As the dissenting Supreme Court justices pointed out, the Court of Appeals agreed the law was “ambiguous” and “confusing” while acknowledging its interpretation of the law “disregarded the ‘literal interpretation’ of the statute’s text” while stating the court “can and must ignore statutory language” in this instance.

Accordingly, the Freedom Foundation appealed to the Washington Supreme Court.

For the purposes of the Fair Campaign Practices Act (FCPA), independent expenditures made on behalf of “ballot propositions” must be disclosed to the PDC. “Ballot proposition” is defined by RCW 42.17A.005 as:

“…any ‘measure’ as defined by RCW 29A.04.091, or any initiative, recall, or referendum proposition proposed to be submitted to the voters of the state or any municipal corporation, political subdivision, or other voting constituency from and after the time when the proposition has been initially filed with the appropriate election officer of that constituency before its circulation for signatures.” (Emphasis added)

While this definition accurately reflects the process of qualifying an initiative for the ballot statewide and in some charter cities, whereby an initiative is filed with the elections officials first and signatures to qualify the initiative for the ballot are gathered second, it does not accurately describe the process for qualifying an initiative for the ballot in noncharter cities like Sequim, Chelan and Shelton where both the initiative and qualifying signatures are submitted to election officials at the same time.

In other words, the three initiatives in question were never filed with elections officials prior to circulation for signatures.

As the four dissenting justices observed,

“…both the trial court and the Court of Appeals expressly acknowledged that the FCPA is ambiguous with respect to whether it compels reporting of independent expenditures in support of initiatives not yet on the ballot in noncharter cities. The majority implicitly acknowledges the same thing.”

The ambiguity of the FCPA in this instance is significant because, as the dissent points out,

“The majority resolves that ambiguity against the speaker and in favor of the government. But resolving an ambiguity in a statute implicating free speech against the speaker and in favor of the government violates controlling precedent of this court and of the United States Supreme Court.”

Given that the AGO and a majority on the Washington Supreme Court have seen fit to interpret ambiguous laws against free speech, the Freedom Foundation has no choice but to appeal to the U.S. Supreme Court.

Regardless of the ultimate outcome any additional litigation, the Legislature should consider several actions to eliminate the lack of clarity in state law highlighted by the lawsuit.

First, the Washington State Legislature should clarify the reporting requirements in the FCPA governing local ballot initiatives. In this case, poorly drafted laws have resulted in expensive, taxpayer-funded litigation to prosecute the Freedom Foundation under a law that may ultimately be unconstitutional. Overly vague or complicated campaign finance and disclosure laws discourage political participation, and Washington’s laws are becoming more complicated, not less.

Second, the Legislature should address the underlying issue that raised this issue to begin with: The refusal of local governments to abide by the law governing initiatives. While state law only gives city councils two options for handling a validly-submitted initiative — pass it outright or send it to the voters — all three cities chose a third option and simply ignored the initiatives. Even the majority opinion from the Supreme Court acknowledged,

“If the [initiative] petition contains the required number of valid signatures, the city’s or the town’s council or commission must either pass the proposed ordinance or submit the proposition to a vote of the people.” (Emphasis added)

One solution to this dilemma would be to establish a clear legal cause of action for citizens to bring civil litigation for penalties against municipal governments that ignore valid citizen initiatives.

While some may cheer the use of these laws against the Freedom Foundation, these are fundamentally process changes that anyone caring about local initiatives and fair elections should be able to support.