Michael K.

Jeanes, Clerk of Court

*** Filed ***


SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2014-009404 08/19/2014


Docket Code 926
Form V000A
Page 1


CLERK OF THE COURT
HON. DAWN M. BERGIN M. Nielsen
Deputy



TOM HORNE TIMOTHY A LASOTA

v.

ARIZONA CITIZENS CLEAN ELECTIONS
COMMISSION
JOSEPH KANEFIELD



MICHAEL T LIBURDI JR.




UNDER ADVISEMENT RULING


The Court has reviewed Plaintiff Tom Hornes Verified Complaint and Application for
Order to Show Cause and for Preliminary and Permanent Injunctive Relief; Plaintiffs Hearing
Memorandum; Defendants Combined Response to (1) Application for Order to Show Cause and
for Preliminary and Permanent Injunctive Relief and (2) Plaintiffs Hearing Memorandum;
Plaintiffs Reply to Defendants Response to Plaintiffs Trial Memorandum; Brief of Amici
Curiae Senator Steve Pierce and Elect Steve Pierce Supporting Plaintiff; and Defendants
Response to Brief of Amici Curiae. The Court heard oral argument on August 11, 2014 and now
makes the following findings and orders.

To obtain preliminary injunctive relief, Mr. Horne must establish the following: (1) a
strong likelihood of success on the merits; (2) the possibility of irreparable injury, not remediable
by damages, if injunctive relief is not granted; (3) that the balance of hardships weighs in his
favor; and (4) that public policy favors injunctive relief. Shoen v. Shoen, 167 Ariz. 58, 63, 804
P.2d 787, 792 (App. 1990). The Court addresses each of these factors below.






SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2014-009404 08/19/2014


Docket Code 926
Form V000A
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The Merits

On May 12, 2014, Sarah Beattie, a former employee of Arizona Attorney General Tom
Horne, filed a complaint with the Arizona Clean Elections Commission (the Commission),
alleging that he used public resources to support his reelection campaign for Attorney General.
The Commission requested a response to the complaint from Mr. Horne, which he provided.
After considering the complaint and response, the Commission voted on June 19, 2014 to
conduct an investigation of a possible violation by Mr. Horne of the Citizens Clean Elections Act
(CCEA).

Mr. Horne argues that the Commissions authority to investigate and impose penalties
under the CCEA is limited to participating candidates, and because he elected not to participate
in CCEA public funding, the Commission has no authority over him. The Commission counters
that the statutory language of the CCEA, as well as Arizona Supreme Court authority, provides
the Commission with the authority to both investigate and impose penalties under the CCEA on
nonparticipating candidates, including disqualification or forfeiture of office.

1. The Statutory Language of the CCEA

The CCEA was enacted by Arizona voters in 1998 and has been codified in Article 2,
Chapter 6 of Title 16 (16-940 to 16-961). Article 1 of Chapter 6 contains general provisions
related to campaign contributions and expenses (16-901 to 16-925). Both Articles set forth
contribution limits, penalties for violations and procedures for investigating and processing
complaints.

Under Article 1 (general provisions), candidates for statewide office must file campaign
finance reports with the secretary of states office. If the secretary of state finds reasonable cause
to believe that a candidate has violated any provision of Article 1, it must refer the matter to the
Attorney Generals Office for investigation. Civil penalties for violations of Article 1 are set
forth in 16-905(J) through (M) and 16-924.

Contribution limits under the CCEA are specified in 16-941; penalties are outlined in 16-
942; and procedures for addressing violations are contained in 16-957.
1
The penalty of great
concern to Mr. Horne, disqualification or forfeiture of office, is available only under the CCEA.
See 16-1942(C).


1
The Commission has also adopted administrative rules for the processing and investigation of complaints. See e.g.,
A.A.C. R2-20-201 to 228.



SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2014-009404 08/19/2014


Docket Code 926
Form V000A
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If Ms. Beatties allegations are true and Mr. Horne accepted unlawful and unreported in-
kind donations,
2
he may have violated 16-941(B) of the CCEA, which provides as follows:

Notwithstanding any law to the contrary, a nonparticipating candidate shall not
accept contributions in excess of an amount that is twenty per cent less than the
limits specified in section 16-905, subsection H.
3
Any violation of this subsection
shall be subject to the civil penalties and procedures set forth in section 16-905,
subsections J through M and section 16-924.

Mr. Horne concedes that the limit in 16-941(B) applies to him, but argues that the last
sentence of subsection (B) excludes him, as a nonparticipating candidate, from the Commissions
authority and CCEA penalties, and instead subjects him to the exclusive jurisdiction of the
Secretary of State and the Attorney Generals Office under Article 1.

Read in isolation, the last sentence of 16-941(B) might be considered ambiguousdid
the voters intend to establish a limit for nonparticipating candidates but exclude them from the
penalties of the CCEA, or did they intend for nonparticipating candidates to be subject to both
Article 1 and Article 2 penalties? The plain language of the penalty provision of 16-1942(C)
suggests the latter:

Any campaign finance report filed indicating a violation of section 16-
941, subsection A or B or section 16-941 subsection C, paragraph 1
involving an amount in excess of ten percent of the sum of the adjusted
primary election spending limit and the adjusted general election spending
limit for a particular candidate shall result in disqualification of a
candidate or forfeiture of office. (Emphasis added).

Relying largely on the history of the CCEA, Mr. Horne and Amici argue that 16-942(C) is
intended to address excessive spending by participating candidates only. They point out that
from 1999, when the CCEA took effect, through 2011, its primary feature was the provision of
matching funds to participating candidates based on nonparticipating candidates expenditures
and contributions. Section 16-1941(B) included two subsections during this time period.
Section 16-941(B)(1) contained the same language as 16-941(B) today. Section 16-941(B)(2)
required nonparticipating candidates to provide campaign finance reports when their
expenditures or contributions reached a certain percentage of spending limits because those
percentages would trigger the allocation of matching funds to participating candidates.


2
Because this matter presents a pure question of law, the merits of Ms. Beatties allegations are irrelevant to the
Courts analysis.
3
16-905(H) provides the means for calculating the specific contribution limits for various statewide offices.



SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

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In 2011, the United States Supreme Court struck down the matching funds provisions of
the CCEA, finding that they violated the First Amendment rights of nonparticipating candidates.
Ariz. Free Enterprise v. Bennett, 131 S.Ct. 2806 (2011). In 2012, the CCEA was amended to
remove all matching funds provisions. Because 16-1941(B)(2) related to matching funds, it was
deleted.

Counsel for Amici argues that the inclusion of 16-941(B) in 16-942(C) is simply a vestige
from the pre-Bennett statutory scheme because once the matching funds provisions were found
unconstitutional, campaign finance reports and spending limits for nonparticipating candidates
became irrelevant to the administration of the CCEA.
4
While not without logic, the language of
the pre-Bennett statutory provisions does not bear out the argument.

No amendments were made to Section 16-942(C) in 2012; it has always read: [a]ny
campaign finance report filed indicating a violation of section 16-941, subsection A or B...
The statute did not state that only violations of (B)(2) would subject a nonparticipating candidate
to disqualification or forfeiture. Therefore, the Court must assume that the voters intended the
penalty in 16-942(C) to apply to violations of 16-941(B)(1) as well as (B)(2). Thus, 16-942(C)
has always applied to violations of what is now 16-941(B).

In summary, the Court finds that the last sentence of 16-1941(B), combined with its
inclusion in 16-1942(C) demonstrates an intent to subject nonparticipating candidates who
substantially exceed the statutory contribution limits to the same penalty as participating
candidates: disqualification or forfeiture of office.
5


To read the statutes any other way would require the Court to nullify the reference to
1941(B) in 1942(C), which would violate a cardinal rule of statutory constructionthat each
word, phrase, clause and sentence must be given meaning so that no part will be void, inert

4
Amici also argue that the United States Supreme Court found spending limits unconstitutional in Buckley v. Valeo,
424 U.S. 1 (1976). The Buckley Court addressed the constitutionality of various components of the Federal Election
Campaign Act. Neither Mr. Horne nor Amici expound on Buckley or explain why this Court should apply a ruling on
the constitutionality of the Federal Election Campaign Act to the CCEA statutory scheme.
5
The Court notes that there appears to be an inconsistency between 16-924(A) and the last sentence of 16-941(B).
While 16-941(B) subjects a nonparticipating candidate to the provisions of 16-924, 16-924(A) specifically excepts
violations of Article 2 from its scope: if the filing officerhas reasonable cause to believe that a person is
violating any provision of this title, except for violations of chapter 6, article 2, (emphasis added). Neither party
raised this issue in its briefing or at oral argument. The Court declines to analyze it because the presence or absence
of either provision (i.e., the last sentence of 16-941(B) or the italicized portion of 16-924(A)) does not alter the basis
for the Courts rulingi.e., that the inclusion of 16-941(B) in 16-942(C) provides the Commission with authority to
investigate Mr. Horne and impose CCEA penalties.



SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2014-009404 08/19/2014


Docket Code 926
Form V000A
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redundant, or trivial. Deer Valley Unified School District No. 97 v Houser, 214 Ariz. 293, 296,
152 P.3d 490,493 (App. 2007) (citations and internal quotation marks omitted).
6


2. Policy Arguments

Mr. Horne also makes numerous policy arguments to support his position. For example,
he points out the logistical and practical problems of concurrent jurisdiction, such as subjecting a
candidate to investigations by multiple entities. He also argues that the voters intended to
impose the extreme penalty of disqualification or forfeiture only upon those who have misused
public money. This Courts task, however, is not to make policy determinations, but to construe
statutes according to their plain meaning.

3. Arizona Supreme Court Authority

Both parties argue that opinions from the Arizona Supreme Court support their respective
positions. The Defendant relies on Clean Elections Institute v. Brewer, 209 Ariz. 241, 99 P.3d
570 (2004), abrogated on other grounds by Save Our Vote Opposing C-03-2012 v. Bennett, 231
Ariz. 145, 291 P.3d 242 (2013). In Clean Elections Institute, the Court held that a voter initiative
that sought to eliminate all public funding of political campaigns and to subject the Commission
to legislative control of its budgeting decisions violated the separate amendment rule of the
Arizona Constitution.

In addressing the Commissions duties, the Court stated that Title 16, Chapter 6, Article 2
require[s] that the Commission enforce measures such as statutory limits on acceptance of
campaign contributions, which limits apply to candidates not receiving public funding, 16-
941.B.1.... The Court also noted that [t]he Commission [] would retain full enforcement
authority and responsibility as to these provisions even if the voters abolished public financing of
political campaigns. Id. at 245, 99 P.3d at 574. The parties argue over whether these statements
constitute dicta or controlling authority. The Court declines to engage in that debate because
even if the statements are dicta, they nonetheless reflect a broad view by the Supreme Court of
the Commissions powers and support the Commissions arguments.

Mr. Horne points to Smith v. Arizona Citizens Clean Elections Commission, 212 Ariz.
407, 132 P.3d 1187 (2006), where the Court upheld the removal from office of a participating
candidate, David Smith, for exceeding the spending limits set forth in the CCEA. The Court
explained that through the CCEA, voters authorized removal of candidates from public office as
a sanction for serious violations of the campaign finance laws, and noted that Smith had agreed

6
Mr. Horne argues that such a reading would render the last sentence of 16-941(B) a nullity, but that is not so. It
would simply subject him to penalties under Articles 1 and 2.




SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2014-009404 08/19/2014


Docket Code 926
Form V000A
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to the terms of the CCEA when he sought public funding for his campaign. Id. at 411, 132 P.3d
at 1191. The Court acknowledges that the Supreme Court tied the extreme sanction of removal
from office to Smiths agreement to abide by the terms of the CCEA, but the opinion does not
address the powers of the Commission over nonparticipating candidates.

4. Recent Amendment to Article 1

Mr. Horne also points to a recent amendment to Article 1, Section 16-905(O), which was
signed by Governor Brewer and became effective on July 24, 2014. It reads as follows:

For any statewide or legislative candidate who is not participating in the
citizens clean elections act funding system established pursuant to article 2 of
this chapter:

1. Complaints and investigations relating to an alleged violation of this
article are subject only to the jurisdiction, penalties and procedures
established pursuant to this article and the enforcement and investigative
authority of the secretary of state and attorney general.

2. The citizens clean elections commission has no authority to accept,
investigate or otherwise act on any complaint involving an alleged
violation of this article.

Mr. Horne argues that this amendment vindicates his interpretation of the CCEA,
pointing out that both the legislature and the Governor agree with him.
7
The argument fails for at
least two reasons.

First, as the Commission points out, the amendment contains no retroactivity provision.
Unless a statute is expressly declared to be retroactive, it will not govern events that occurred
before its effective date; thus, absent a clear expression of retroactivity, a newly enacted law
applies only prospectively. Garcia v. Browning, 214 Ariz. 250, 252, 151 P.3d 533, 535

7
The Court notes that it is the intent of the voters, not of the legislature or the Governor, that drives the statutory
construction of the CCEA. And, since the CCEA was a voter initiative, any amendment to the Act must further its
purpose and be approved by a three-quarters majority vote of the legislature. Ariz. Const. Art. 1, Part IV, 1(6)(c).
The amendment codified in 16-905(O) did not garner a three-quarters majority vote. Thus, to the extent that the
amendment could be construed as an attempt to limit the Commissions authority under the CCEA, its
constitutionality may come into question. However, since this Court finds that 16-905(O) does not apply to the
matter before it, there is no need to address the constitutionality of the amendment. See Petolicchio v. Santa Cruz
Cnty. Fair & Rodeo Ass'n, 177 Ariz. 256, 259, 866 P.2d 1342, 1345 (1994) (Arizona's courts do not reach
constitutional issues if proper construction of a statute makes it unnecessary in determining the merits of the
action.)



SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2014-009404 08/19/2014


Docket Code 926
Form V000A
Page 7


(2007) (citation and internal quotation marks omitted); A.R.S. 1-244. The alleged conduct by
Mr. Horne predated the effective date of the amendment. Consequently, 16-905(O) is not
applicable.

Second, the amendment explicitly applies to alleged violations of this article, meaning
Article 1. The Commission, however, is investigating a possible violation of 16-941(B), which
is indisputably part of Article 2. Counsel for Mr. Horne argued that any violation of 16-941(B)
would constitute a violation of Article 1 because the contribution limits in 16-941(B) are
dependent upon the limits set forth in 16-905, which is part of Article 1. As the Commissions
investigation directly addresses a violation of an Article 2 provision, counsels tortuous reading
of 16-905(O) in an attempt to convert an Article 2 violation into an Article 1 violation fails.

For all of these reasons, the Court finds that Mr. Horne does not have a strong likelihood
of success on the merits.

Irreparable Injury

Mr. Horne argues that he will suffer irreparable harm if injunctive relief is not granted
because he is already the subject of a media feeding frenzy due to investigations by other
agencies, and allowing the Commission to proceed with its investigation will simply add to the
this frenzy and cause additional harm to his reputation. Hrg. Mem. at 14. But the fact that Mr.
Horne is already under investigation by other entities makes the measure of any additional harm
due to the Commissions investigation speculative.

Balance of Harm

If preliminary injunctive relief is granted, the Commission will have to cease its
investigation. However, if the injunction is later dissolved, the Commission can reinitiate the
investigation, and if Mr. Horne is reelected and a violation of 16-941(B) is proved, the forfeiture
remedy of 16-942(C) will still be available. Thus, while the harm to Mr. Horne may be
somewhat speculative if injunctive relief is denied, the harm to the Commission if injunctive
relief is granted is negligible.

Public Policy

Because this matter involves giving effect to the intent of Arizona voters in enacting the
CCEA, public policy favors a denial of injunctive relief.

The Court notes that the four requirements for obtaining injunctive relief are phrased in
the conjunctive. That, is Mr. Horne must establish all four elements. As reflected above, he has



SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2014-009404 08/19/2014


Docket Code 926
Form V000A
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failed to establish a strong likelihood of prevailing on the merits and that public policy favors
injunctive relief.

IT IS THEREFORE ORDERED denying Mr. Hornes application for Preliminary
Injunctive relief.

IT IS FURTHER ORDERED that the parties shall promptly lodge a proposed form of
judgment, and shall indicate in the judgment whether they stipulate to make the judgment on the
preliminary injunction request a final judgment on the merits.