Today the Arizona Supreme Court issued in its full opinion in Molera v. Hobbs, the lawsuit challenging the 100-word summary accompanying petitions to qualify the Invest in Education initiative for the 2020 general election ballot. The opinion explains the Court’s reasoning for earlier ordering the initiative to be placed back on the ballot after a trial court concluded the summary created a significant danger of confusion.
The Invest in Education Act seeks to raise income tax rates to generate revenue for education-related purposes. To qualify for the ballot, proponents circulated initiative petitions that contained the following summary:
The Invest in Education Act provides additional funding for public education by establishing a 3.5% surcharge on taxable income above $250,000 annually for single persons or married persons filing separately, and on taxable income above $500,000 annually for married persons filing jointly or head of household filers; dedicates additional revenue to (a) hire and increase salaries for teachers, classroom support personnel and student support services personnel, (b) mentoring and retention programs for new classroom teachers, (c) career training and post-secondary preparation programs, (d) Arizona Teachers Academy; amends the Arizona Teachers Academy statute; requires annual accounting of additional revenue.
Under Arizona law, the summary need only touch on the “principal provisions” of the proposed initiative. Opponents challenged the summary as misleading because it omitted certain provisions they deemed principal, including: (1) the percentage of revenues to be distributed to enumerated groups; (2) the amount of the increase in the marginal rate of taxation created by the “surcharge”; (3) the fact that the surcharge would apply to business income that was taxed at the individual level; (4) the fact that the initiative curtails the Legislature’s spending authority; and (5) the fact that the initiative attempts to circumvent the local revenue spending limits in the Arizona Constitution.
The trial court agreed, holding that “[t]he failure to include each omitted provision, standing alone, in the 100-word description created a significant danger of confusion or unfairness to a reasonable Arizona voter.” The trial court even held that use of the term “surcharge” was itself misleading, even though the actual initiative text used the term. The Supreme Court reversed with an opinion to follow.
The Supreme Court began today’s opinion by clarifying there are two possible grounds challenge a 100-word summary. First, an initiative may be challenged if it omits a principal provision (and without regard to whether that omission creates voter confusion). But the summary need not address “all provisions.” “The 100-word description [merely] serves as the ‘elevator pitch’ that alerts prospective signatories to the measure’s key operative provisions, enabling them to decide in short order whether to sign the petition, refuse to do so, or make further inquiry about the measure.” The Court is signaling, going forward, that “principal” should be construed quite narrowly.
Second, a summary may be challenged if its principal provisions are described in a misleading manner. The Court clarified that “[r]easonable people can differ about the best way to describe a principal provision, but a court should not enmesh itself in such quarrels. If the chosen language would alert a reasonable person to the principal provisions’ general objectives, that is sufficient.” Here the Court is signaling once again that trial courts should take a lighter touch. And by adding that “the trial judge should ordinarily decide the sufficiency of a description without expert witness evidence,” perhaps the now common use of dueling experts to opine on initiative summaries may become a thing of the past. In short, the Court described its now clarified test as follows:
The court should disqualify an initiative from the ballot whenever the 100-word description either communicates objectively false or misleading information or obscures the principal provisions’ basic thrust. The latter can occur through the language used to describe the principal provisions or by failing to refer to key features of those provisions. In other words, although sponsors are free to describe the measure in a positive way and emphasize its most popular features, they may not engage in a “bait and switch” in which the summary attracts signers but misrepresents or omits key provisions.
Applying these legal principles to the Invest in Education Act, the Supreme Court simply disagreed that any of the opponents’ five challenges were egregious enough to warrant removal from the ballot. “It did not contain any objectively false or misleading information or conceal a basic thrust of the Initiative.”
The Supreme Court also addressed whether the initiative committee’s petition vendor improperly paid its circulators in violation of A.R.S. § 19-118.01(A), which prohibits payment “based on the number of signatures collected” for a statewide initiative. The Court held it was lawful for the vendor to maintain graduated payment levels on a week-to-week basis that corresponded to circulator productivity, as long as the circulator’s payment level was determined prospectively. In other words, it is lawful to bump up a circulator’s hourly rate for the forthcoming week based on signature productivity from the prior week; the statute’s criminal penalty would only apply if the circulator’s hourly rate for prior week was retroactively determined based on productivity from that prior week. The Court also affirmed the trial court’s holding that spinning a wheel to win cash prizes did not run afoul of the statute because sufficient evidence demonstrated that circulators could spin the wheel regardless of productivity. The Court was sensitive to unduly limiting protected constitutional activity and therefore adopted the narrowest reading of A.R.S. § 19-118.01(A).
Importantly, however, the Supreme Court did not disturb the trial court’s other holding that the vendor did violate the statute by paying circulators in other prohibited ways. The trial court held:
Plaintiffs have proven that several bonus programs utilized by Petition Partners violated A.R.S. § 19-118.01(A) because, under these bonus programs, petition circulators were compensated, in part, based on the number of signatures collected. IIE’s agent, Petition Partners, advertised to circulators that eligibility for these bonuses hinged on the number of “sets” – signatures for multiple initiative petitions – that the circulator obtained. Although Petition Partners provided testimony that actual performance was not considered, this testimony is not particularly credible, given the contradictory testimony of the owner of Petition Partners, Andrew Chavez, and his focus on the importance of productivity.
Petition circulators for the Initiative had the opportunity to earn something of value, above and beyond their hourly salary, based in part on the number of signatures gathered, by participating in the following programs that violate A.R.S. § 19-118.01(A) (the “Offending Programs”):
i. “Dual for the dollars” / “clash for the cash”: This bonus program was a “competition where two circulators dual head to head and see who can collect more signatures during the week.” The circulators competed for a cash prize.
ii. Productivity bonuses.
iii. The “2020 …. show me the MONEY” giveaway program.
iv. Weekend warriors. . . .
Defendant IIE argues that payment for “sets” does not amount to compensation for signatures. This argument is not credible. “Sets” means a set of signatures for multiple ballot proposals. Whether compensation is paid for signatures on one ballot measure or multiple ballot measures, payment and receipt of anything of value to compensate a paid circulator based on signatures gathered violates A.R.S. § 19-118.01. . . . Plaintiffs have proven that the weekly compensation of 146 circulators included improper payments for signatures through an Offending Program.
The trial court did not focus on the fact violation of A.R.S. § 19-118.01(A) constitutes a criminal offense (that issue will be for the law enforcement officials), but instead focused on the statutory remedy that signatures “obtained by a paid circulator who violates this section are void and shall not be counted.” The Supreme Court held that the trial court “correctly disqualified . . . signatures collected by circulators during the pay periods in which they were paid bonuses that violated A.R.S. § 19-118.01(A)” and otherwise declined to “address the Committee’s arguments that the court erred by invalidating any signatures under § 19-118.01(A).” In other words, the Supreme Court left undisturbed the trial court’s ruling that the vendor violated a criminal statute that carries a misdemeanor penalty.
The more significant ruling for election law practitioners is that violation of the “pay-per-signature” statute in A.R.S. § 19-118.01(A) only invalidates the particular signatures at issue, not all the petitions collected by the improperly-compensated circulator. Since the initiative here involved improper weekly bonuses, the remedy was to invalidate signatures collected during that particular week; bonuses paid on different time horizons in other cases would cause greater or lesser numbers of signatures to be disqualified.
Finally, the Supreme Court held that the Invest in Education committee was not required to maintain any particular documentation to make it easier for challengers to prove an improper payment scheme, nor did the challengers’ burden of proof (a clear and convincing standard) somehow shift to the committee because it might have better access to information. It remains the challengers’ burden to uncover improper payment and tie that improper payment to specific signatures collected by specific circulators. The taint of some improper payments cannot bring down an entire initiative.
In short, this Molera opinion curbs some of the tools thought to be in challengers’ toolkits when seeking to keep initiatives off the ballot. Taking a legal and financial shortcut by challenging only the 100-word summary of an initiative, or challenging the circulators’ entire payment scheme as a whole, became a bit harder today. A traditional, signature-by-signature slog therefore remains the most effective method to knock an initiative off the ballot. That is, until the Legislature enacts the next provision aimed at curbing what it views as improvident use of the initiative process and puts brand new tools in challengers’ toolkits.