DISTRICT COURT, CITY AND COUNTY OF DENVER,COLORADO CourtAddress:1437BannockStreet Denver,Colorado80202

Plaintiffs:COLORADOETHICSWATCHand COLORADOCOMMONCAUSE v. Defendant: SCOTT GESSLER, in his capacity as SecretaryofStateofColorado And Plaintiffs: DAVID PALADINO MICHAEL COURTUSEONLY CERBO PROCHOICE COLORADO PAC PPRM BALLOT ISSUE COMMITTEE and CaseNumbers:2012CV2133 CITIZENSFORINTEGRITY,INC. and2012CV2153 v. Defendant: SCOTT GESSLER, as Secretary of Courtroom:280 StatefortheStateofColorado AttorneysforPlaintiffsin2012CV2133: LuisToro,#22093 MargaretPerl,#43106 1630WeltonStreet,Suite415 Denver,Colorado80202 Telephone:(303)6262100 Fax:(303)6262101 Email:ltoro@coloradoforethics.org pperl@coloradoforethics.org AttorneysforColoradoEthicsWatch JenniferH.Hunt,#29964 Hill&Robbins,P.C. 144118thStreet,Suite100 Denver,CO802021256 Telephone:(303)2968100 Fax:(303)2962388 Email:jhunt@hillandrobbins.com AttorneysforColoradoCommonCause JOINTRESPONSETOSECRETARYSMOTIONFORSTAYPENDING APPEAL

PlaintiffsColoradoEthicsWatch(EthicsWatch)andColoradoCommonCause

(CCC),bytheirundersignedattorneys,respectfullysubmitthisjointbriefinoppositiontothe SecretarysMotionforStayPendingAppeal. IntroductionandSummaryofArgument DefendantSecretaryofStateScottGessler(theSecretary)audaciouslyassertsthat,asa

stateofficial,C.R.C.P.62entitleshimtoastayinhisfavorasamatterofrightpendingthe conclusionofallappellateproceedings. 1Rule62,entitledStayofProceedingstoEnforcea Judgment,hasnotbeenappliedthisway.Tothecontrary,theCourtofAppealshasequatedan executablejudgment,subjecttoastayofproceedingsforenforcement,withamoney judgment.PeopleintheInterestofStrodtman,2011Colo.App.LEXIS1742(Colo.App.2011) at*32*33.Whilecasesinwhichgovernmentagenciesattacktheverylawstheyaretaskedto enforceareadmittedlyrare,theSecretarycitesnoprecedentallowingastateofficialtokeep illegalrulesineffectpendingappealofthejudgmentthatdeclaredthoserulesillegal.Staysare routinelygrantedwhenasupersedeasbondispostedbecauseasupersedeasbondprovides adequatesecurityfortheholderofamoneyjudgment.SeeC.R.C.P.62(d).Thestateisexcused fromthebondrequirementasawaytoprotectthestatesfisc,andpresumably,becausetheState willbeabletosatisfyanymoneyjudgment.SeeC.R.C.P.62(e).Thoseconsiderationssimplydo notapplywhen,ashere,thereisnoproceedingtoenforcethejudgmenttobestayed. TheCourthasdeclaredCampaignFinanceRules1.10,1.12,1.18,7.2,and18.1.8invalid underColoradolaw.PursuanttotheColoradoAdministrativeProcedureAct,thoserulesare currentlywithoutforceandeffectwithoutfurtherproceedingstoenforcethejudgment.See C.R.S.244106(7)(thecourtshallholdunlawfulandsetasideimproperagencyactionsand
1

TheCourtshouldbeadvisedthatlastFriday,August24,2012,theSecretaryalsofiledaMotionforTemporary StaywiththeColoradoCourtofAppealsinthiscase.

shallrestraintheenforcementoftheorderorruleunderreview).Assumingthislanguage givestheCourtanydiscretiontoallowanillegalruletoremainineffectpendingappeal,the Secretarysrequestoughttobeconsidered,ifatall,asoneformodificationofaninjunction pendingappealunderC.R.C.P.62(c).TheprayerforreliefinPlaintiffsComplaintsoughta judgmentdeclaringtheRulesunlawfulandvoidandpermanentlyenjoiningDefendantScott GesslerfromenforcingthoseRules.Complaintat11.TheCourtsorderdoesjustthatforthese fiveRules. TheSecretaryarguesforastaypendingappealasifhewereaplaintiffchallenging ColoradocampaignfinancelawonFirstAmendmentgroundsinsteadofthegovernmentofficial chargedwithenforcingandadministeringthatlaw.NotonlyistheSecretarynotentitledtosuch astayasamatterofright,buthehasnotmadeapropershowingunderthefactorsinC.R.C.P. 62(c)tojustifykeepinginplacerulesthatcontradictthestatutorylanguageandintentand underminetheColoradoConstitutionwhiletheappellatecourtsconsiderhisappeal. I. C.R.C.P.62(d)isnotapplicabletothiscasewhichisdeclaratoryandinjunctivein nature. Thevastmajorityoffederalcases,includingtheU.S.SupremeCourtmemorandum opinionrelieduponbyU.S.v.Wylie,730F.2d1401(11thCir.1984),statethatstaysasamatter ofrightunderRule62(d)areavailableonlyinmonetaryjudgmentcases.See,e.g.,American ManufacturersMutualIns.Co.vAmericanBroadcastingParamountTheaters,Inc.,87S.Ct.1, 3(1966)(apartytakinganappealfromtheDistrictCourtisentitledtoastayofamoney judgmentasamatterofrightifhepostsabondinaccordancewithFed.R.Civ.P.62(d)) Donovanv.FallRiverFoundryCo.,696F.2d524,526(7thCir.1982)(notappropriatetogrant Rule62(d)automaticstayinnonmonetarycaseregardinggovernmentaction).Theseauthorities

arehelpfulininterpretingthenearlyidenticalC.R.C.P.62.SeeMuckv.ArapahoeCntyDist.Ct., 814P.2d869,872n.9(Colo.1991). ThisapproachhasbeenfollowedbytheColoradoCourtofAppeals,whichrecently stated[t]heothersectionsof[Colorado]Rule62illustratethedistinctionbetweenmoney judgmentsandothertypesofjudgments.Strodtman,2011Colo.App.LEXIS1742at*33 (citingDonovanforthepropositionthatautomaticstaysareformoneyjudgmentsonlyand discretionarystaysarerequiredforotherjudgments).Withoutanymonetaryjudgmentinthis case,theCourtcannotgranttheSecretaryastayasamatterofrightunderC.R.C.P.62(d).See DesktopImages,Inc.v.Ames,930F.Supp.1450,1451(D.Colo.1996)(applyingRule62(c) ratherthan62(d)torequestforstayofanorderdenyingamotiontocompelarbitrationasmore akintoinjunctionthanmonetaryjudgment). Finally,federalcourtshaveappliedadiscretionaryRule62(c)testtopastrequestsfor stayspendingappealfromtheFederalElectionCommissionwhenitscampaignfinance regulationshavebeendeclaredinvalidbyaU.S.DistrictCourtunderthefederalAdministrative ProcedureActascontrarytostatute.Shaysv.F.E.C.,340F.Supp.2d.39,44(D.D.C.2004) (requiringtheFECtojustifythestayunderthefourbalancingfactors)VanHollenv.F.E.C., 2012U.S.App.LEXIS10333,*3(D.C.Cir.May14,2012)(same).Thisapproachmakessense. Otherwise,theSecretarycouldenactregulationsinanyelectionyeargrosslyexceedinghis authorityanddirectlycontradictingthecampaignfinanceconstitutionalandstatutoryprovisions, secureintheknowledgethatanyjudgmentsettingasidethoseruleswouldbeautomatically stayedthroughthecourseofallappellateproceedings,whichlikelywouldnotconcludeuntil aftertheelection.

II. ThebalanceofC.R.C.P.62(c)factorsweighsagainstissuanceofastaypending appeal. Coloradolawprovidesthatwhentheorderappealedfromisaninjunction,thetrial court,underC.R.C.P.62(c),initsdiscretionmaysuspend,modify,restore,orgrantan injunctionduringthependencyoftheappeal....Ithasgenerallybeenheldthatthisrule authorizesthetrialcourttoenterorderswhichpreservethestatusquo,orotherwiseprotectthe rightsofthepartiespendingappeal,butdoesnotgivethetrialcourtauthoritytoenteran orderwhichalterstherightsgranted,orcreatedbytheoriginalorder.Riverav.Civil ServiceComm.,529P.2d1347,1348(Colo.App.1974)(citationsomittedandemphasisadded). Moreover,althoughatrialcourtmayentertainamotiontomodifyaninjunctionafteranoticeof appealhasbeenfiled,ifthetrialcourtindicatesitwouldgrantthemotion,thentheproper procedureisforthemovanttopetitiontheappellatecourttoremandthecaseinorderthatthe trialcourtmaygrantsuchmotion.Id. Assuming,arguendo,thattheCourtcouldgrantastaywithoutalteringtherightsofthe partiesunderitsOrder,toobtainadiscretionarystayunderC.R.C.P.62(c),theSecretarybears theburdenofestablishing:(1)alikelihoodofsuccessonappeal(2)thethreatofirreparable harmifthestayorinjunctionisnotgranted(3)theabsenceofharmtotheopposingpartyand (4)thepublicinterestisnotadversetothestay.DesktopImages,930F.Supp.at1451.Itis themovant'sobligationtojustifythecourt'sexerciseofsuchanextraordinaryremedy.Shays, 340F.Supp.2dat44.TheSecretaryhasnotmetthatburdenhere. A. LikelihoodofSuccessonAppeal TheCourtsordercarefullyexaminedthefiveinvalidatedregulationsandfoundthem directlyinconflictwiththeColoradoconstitutionalandstatutoryprovisionsgoverningthe Secretarysadministration.ItisunlikelythattheCourtofAppealswillnowfindeachofthese 5

governingprovisionsambiguousandthatthenewRulesrestrictingdisclosurefurthertheoverall intentoftheGeneralAssemblyandColoradovoters.SeeVanHollen,2012U.S.App.LEXIS 10333at*4(statingtheFECdidnothavealikelihoodofsuccessonappealwheninvalidated regulationsconflictwiththeplaintextofcampaignfinancestatute).Resortingtogeneral argumentsthatregulationsarepresumptivelyvalidandthattheSecretarysdiscretionisentitled todeferenceisnotenoughtoshowalikelihoodthatregulationsalreadystruckdownas exceedingtheSecretarysauthoritywillbeuphelduponappeal.SeeShays,340F.Supp.2dat 4647(holdingFECdidnotshowlikelihoodofsuccessbecausedeferenceisnotappropriate whentheagencysinterpretationundulycompromisestheActspurposes). B. ThreatofIrreparableHarm TheSecretarysirreparableharmargumentessentiallyaskstheCourttotakeitasgiven thatColoradocampaignfinancelawsviolatetheFirstAmendment.ButtheSecretary,acting hereinhisofficialcapacity,mustshowinjurytohimselfinthecapacityofhisofficewhich,for betterorworse,isresponsibleforadministeringColoradoscampaignfinancelaws.SeeShays, 340F.Supp.2dat4748(holdingFECdidnotshowirreparableharmbasedonlostagency resourcesanddamagetoagencyspositiononappeal). GrantingastaywillonlyharmColoradovoterswhoareentitledtoexpectthatthestate constitutionandstatuteswillgovernthe2012election.NorwouldastayhelptheSecretary defendthoselawsinthecurrentfederallawsuitchallengingtheunderlyingconstitutional provisionsgoverningissuecommittees.Thoseplaintiffsallegethateventhe(nowinvalidated) 30%ruledoesnotsufficientlyprotecttheirrights.SeePlaintiffsBriefinSupportofMotionfor PreliminaryInjunction,CoalitionforSecularGovernmentv.Gessler,No.12CV1708,ECFNo. 14at79(D.Colo.Aug.13,2012).

PartieswhoparticipatedintherulemakingproceedinghavebeenonnoticesinceApril thatthissuithadbeenfiledchallengingnumerousrulesenactedinFebruary.Otherpolitical actorshavesufficienttimetoadjustconducttocomplywiththenewrequirementsbeforethe nextfilingdeadline,whichisSeptember4. TheSecretaryarguesthatconfusionoruncertaintyaboutthestateofthelawisareasonto grantthestay.However,reinstatingillegalrulesthatwerewidelyreportedtohavebeen overturnedwouldcausemoreconfusionanduncertaintythanwouldkeepingtheorderineffect. Indeed,theSecretarysofficehasreleasedashortguidetofilersexplainingtheeffectofthe order.2InOctober2004,theUnitedStatesDistrictCourtfortheDistrictofColumbiadenieda motionforstayfiledbytheFECafterthecourtdeclaredseveralcampaignfinancerulesinvalid. Shays,340F.Supp.2dat5354(rejectingtheFECspredictionsofdisasterforelection participantsifregulationsweretochangeduringanelectionyear).Thisisconsistentwiththe rulinginSangerwherethecourtpreventedtheSecretaryfromenforcinganewcampaignfinance rulethatcontradictedstatutorylawinthefinalmonthspriortoanelectionwhileappealwas pending.Sangerv.Dennis,148P.3d404,416(Colo.App.2006). C. HarmtoOpposingPartyandthePublicInterest TheCourthasdeterminedthattheRulesatissuecontradictstatutorylanguageand underminetheColoradoconstitutionalprovisionsofArticleXXIXprovidingtransparencyand informationregardingourelectionstovoters.GrantingtheSecretarysmotionallowsthose Rulestokeepinformationaboutpoliticalspendingregardingcandidatesandballotmeasures fromvotersinthe2012electionandimmunizescertainlatefilingsfromcivilpenalties.Asthe Shayscourtobserved:[t]heexistenceofloopholesandunfaithfulregulationsconstitutesadaily
Seehttp://www.sos.state.co.us/pubs/elections/CampaignFinance/files/2012/20120810DenverDistrictCourt CPFRules.pdf(lastvisitedAugust27,2012).

injurytoboth[politicalactors]interestsandtheclearlyarticulatedintentofCongress.340F. Supp.2dat52.Inthiscase,thepublicinterestisservedbestwhenColoradolawisenforcedby theofficialselectedtodosoastheGeneralAssemblyandvotersintended.IndenyingtheFECs recentrequestforstayofanorderinvalidatingadisclosurelawforimproperlylimiting informationthatshouldbedisclosedunderfederalcampaignfinancelaw,theD.C.Courtof Appealsstatedthatthepublicinterestisbestservedbyaccesstomore,notless,information. VanHollen,2012U.S.App.LEXIS10333at*8(citingCitizensUnitedv.F.E.C.130S.Ct.876, 914(2010)). AstheSecretaryargues,thepublichasaninterestinopenpublicdiscoursegovernedby clear,unambiguousrules.DefendantMotionat78.KeepinginplaceRuleswhichthisCourt hasdeterminedunderminethelanguageandintentofColoradoscampaignfinancesystemwill resultinadecreaseindisclosure.TheConstitutionalandstatutoryprovisionsatissuearenot ambiguousandprovidesufficientguidelinesforpoliticalactorsandvotersforthiselectioncycle astheydidforthe2010and2011electionsbeforetheRuleswereenacted.Thepublicis owedacampaignfinancesystemwhosecontoursreflectthedemocraticwillasoutlinedinthe expressintentandexplicitlegislationenactedbytheirelectedrepresentatives.Shays,340F. Supp.2dat53.Thepublicinterestweighsheavilyagainstastaysothatdisclosureinthe2012 electionwillbeatalevelbeforethenewRulesinaccordancewiththeColoradoConstitutionand statutes. Likewise,theharmtoPlaintiffsofastaywillbegreat.Plaintiffsusedisclosed informationtoenforceColoradoscampaignfinanceregulationsthroughthecitizenenforcement schemeinArticleXXIX.Astayoftheorderpendingappealwillreducedisclosuretoalevel wherePlaintiffscannotproperlyservethisroleandwillcappenaltiesavailableforcertainmissed

filings.SimilartotheplaintiffinVanHollen,EthicsWatchandCCCwillbehampered,inthe absenceoffulldisclosure,ineffectivelyrespondingtogroupsthatspendaspolitical organizations,politicalcommittees,issuecommitteesorreceivemajorcontributionsifastayis granted.VanHollen,2012U.S.App.LEXIS10333at*8.3 ThelowlikelihoodoftheSecretaryssuccessonthemeritsisoutweighedbytheharmto

thepublicinterestandPlaintiffsiftheinvalidatedRuleslimiteddisclosuresarepermittedto governpoliticalspendinginthe2012election.TheSecretarysmotionforstaypendingappeal shouldbedenied. DATED:August27,2012. [OriginalSignatureonFile] _/s/LuisToro______________ LuisToro MargaretPerl ColoradoEthicsWatch 1630WeltonStreet,Suite415 Denver,CO80202 AttorneysforColoradoEthicsWatch [OriginalSignatureonFile]
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___/s/JenniferHunt__________ JenniferH.Hunt Hill&Robbins,P.C. 144118thStreet,Suite100 Denver,CO802021256 AttorneyforColoradoCommonCause

RelyingonColoradoEthicsWatchv.SenateMajorityFund,L.L.C.,2012CO12,theSecretaryargues(at21) thatthestayshouldbegrantedbecauseEthicsWatchpurportedlyhasdemonstratedawillingnesstofilesuitbased onoverlyexpansiveinterpretationsofColoradolaw.OfcoursethathasnobearingonwhethertheSecretaryis likelytoprevailinthiscase.Nevertheless,theCourtshouldbeawarethatEthicsWatchprevailsmoreoftenthan notonitscampaignfinancecomplaints.See,e.g.,ColoradoEthicsWatchv.CleartheBenchColorado,2012COA 12(CourtofAppealsandALJagreedwithEthicsWatchthatcommitteesadvocatingagainstretentionofjudicial candidatesaresubjecttopoliticalcommitteecontributionlimitsandarenotissuecommittees)ColoradoEthics Watchv.SafeStreetsColorado,OACCaseNo.20100032(respondentfined$12,200oncomplaintforfailingto registerasissuecommitteeandfailingtoreportcontributionsandexpenditures)ColoradoEthicsWatchv. ColoradoLeagueofTaxpayers,OACCaseNo.20090001(respondentfined$7150oncomplaintforfailureto reportelectioneeringcommunications).

 CERTIFICATEOFSERVICE Theundersignedherebycertifiesthatonthe27 thdayofAugust,2012,serviceofthe foregoingJOINTRESPONSETOSECRETARYSMOTIONFORSTAYPENDINGAPPEAL wasmadeviaLexisNexisFile&Serve,addressedasfollows: MauriceG.Knaizer FrederickR.Yarger StateServicesDepartment OfficeoftheAttorneyGeneral 1525ShermanStreet,7thFloor Denver,CO80203 maurie.knaizer@state.co.us MarkGrueskin HeizerPaulGrueskinLLP 240115thStreet,Suite300 DenverCO80202 mgrueskin@hpgfirm.com signedoriginalonfile _/s/LuisToro______________

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