15CA1110 Campaign Integrity v Thurlow 10-20-2016

COLORADO COURT OF APPEALS

Court of Appeals No. 15CA1110

Office of Administrative Courts Nos. OS 2015-0009 & OS 2015-0010

Campaign Integrity Watchdog,

Petitioner-Appellee,

and

Office of Administrative Courts,

Appellee,

v.

Dan Thurlow/55,

Respondent-Appellant.

ORDER AFFIRMED

Division III
Opinion by JUDGE WEBB
Hawthorne and Navarro, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced October 20, 2016

Matthew Arnold, Denver, Colorado, Authorized Representative of Campaign

Integrity Watchdog

No Appearance for Appellee

KBN Law LLC, Mario Nicolais, Denver, Colorado, for Respondent-Appellant

1 In this campaign finance dispute, Dan Thurlow/55 a

candidate committee under Colo. Const. art XXVIII, sec. 2(3)

appeals the order of an administrative law judge (ALJ) finding

disclosure violations, imposing a fine of $1080, and ordering that

four contributions totaling $1000 be returned. We affirm the ALJs

order.

I. Background and Procedural History

2 Dan Thurlow/55 (the Committee) was and is the registered

candidate committee for State Representative Dan Thurlow (Rep.

Thurlow). This appeal arises from two complaints that Campaign

Integrity Watchdog (CIW) filed against the Committee. The first

complaint alleged failure to report the occupations and employers of

three contributors; the second complaint alleged failure timely to

report three contributions and to report the occupation and

employer of one of those contributors.

3 The ALJ consolidated both complaints for a single hearing.

The Committee moved to dismiss. The ALJ denied the motion, held

an evidentiary hearing, and issued a detailed, written order.

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 A. Motion to Dismiss

4 In his order, the ALJ denied the motion to dismiss, finding

that CIW has certainly stated a claim for purposes of C.R.C.P.

12(b)(5). Specifically, the ALJ rejected the Committees argument

that section 1-45-109(4)(b), C.R.S. 2016, provided a fifteen-day cure

period, concluding as a matter of law that the cure period did not

apply to private complaints. The ALJ also rejected the Committees

argument that its reports need only be substantially compliant,

and under this standard the complaints should be dismissed

because they alleged only minor inaccuracies in disclosures.

B. First Complaint

5 The ALJ found that although the Committee had received a

contribution of $200 from T. Hodges on October 3, 2014, its

October 14 campaign finance report listed unknown for Hodgess

occupation and employer. The ALJ further found that on October

22, the Committee had received contributions of $200 from Q.

Shear and of $400 from W. Wilson. But the Committees October

27 report listed unknown for these contributors occupations and

employers. (On appeal, the Committee does not dispute any of

these findings.) Then the ALJ concluded that these reports did not

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 comply with the requirement of section 1-45-108(1)(a)(ii), C.R.S.

2016, that disclosures include the occupation and employer of

each person who has made a contribution of one hundred dollars or

more.

C. Second Complaint

6 The ALJ found that some time before April 7, 2015, the

Committee realized that on October 14, 2014, it had accepted, but

not reported, contributions of $30 from T. Bishop, $50 from J.

Workman, and $200 from L. Todd. (Again, the Committee does not

dispute any of these findings.) The Committee disclosed these

contributions in its April 7, 2015 report, but provided unknown

for Todds employer and occupation. The ALJ concluded that the

Committee had not timely disclosed these contributions as required

by section 1-45-108(1)(a)(I) and (2)(a)(I), and that as to Todd, the

Committee had also failed to comply with section 1-45-108(1)(a)(II).

D. Sanctions

7 The ALJ noted that none of these contributions for which the

contributors occupation and employer information were unknown

had been returned no later than the 31st day after receipt, as

provided in Department of State Rule 10.1.4(b), 8 Code Colo. Regs.

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 1505-6 (2014). Also, he concluded that the Committees errors were

substantial. Still, the ALJ considered as a mitigating factor

advice of the Secretary of States office to put unknown on the

reports as testified to by a representative of the Committee

and observed that CIW had agreed the per day penalty should end

on April 24, 2015, when the Committee provided all of the required

disclosures in an amended report.

8 Noting his discretion as to sanctions, the ALJ imposed a fine

equal to the amounts of the contributions that either were not

timely reported or the contributors occupations and employers

were unknown $ 1080. The ALJ also ordered that the

contributions in the latter category $1000 be returned. (The

Committee does not dispute the amounts of these sanctions.)

II. Preservation and Standard of Review

9 CIW does not dispute preservation. The parties agree that de

novo review applies to all of the issues raised, i.e. a ruling on a

motion to dismiss and statutory interpretation. As well, we review

the ALJs conclusions of law de novo. City of Loveland Police Dept

v. Indus. Claim Appeals Office, 141 P.3d 943, 950 (Colo. App. 2006).

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 III. Law

A. Statutory Framework

10 In pertinent part, section 1-45-108(1)(a) requires that

all candidate committees . . . shall report to

the appropriate officer their contributions
received, including the name and address of
each person who has contributed twenty
dollars or more . . . the disclosure required by
this section shall also include the occupation
and employer of each person who has made a
contribution of one hundred dollars or more to
such committee or party.

Section 1-45-109(4)(b) provides:

Any report that is deemed to be incomplete by

the appropriate officer shall be accepted on a
conditional basis and the committee or party
treasurer shall be notified by mail as to any
deficiencies found. . . . The committee or party
treasurer shall have fifteen business days from
the date such notice is sent . . . to file an
addendum that cures the deficiencies.

B. Statutory Interpretation

11 When construing statutes, an appellate court looks first to

the plain meaning of the statutory language, reading words and

phrases in context and construing them according to common

usage. People v. Bonvicini, 2016 CO 11, 12. The court should

harmonize, if possible, provisions that could conflict and avoid

interpretations that render provisions superfluous. In re Estate of

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 Ramstetter, 2016 COA 81, 16. But in doing so, it must accept

the General Assemblys choice of language and not add or imply

words that simply are not there. Williams v. Dept of Pub. Safety,

2015 COA 180, 85 (citation omitted). And [w]hen legislative

language is unambiguous, a court give[s] effect to the statutes

plain and ordinary meaning without resorting to other rules of

statutory construction. St. Vrain Valley Sch. Dist. RE-1J v. A.R.L.,

2014 CO 33, 10.

IV. Application

12 The Committee urges reversal of the ALJs order on three

grounds:

The Committees procedural due process rights were violated

because the ALJ imposed a sanction before the Committee had

received notice and an opportunity to cure.

The ALJ should have applied a substantial compliance test,

under which the deficiencies in the Committees disclosures

were not sanctionable.

Sanctions should not have been imposed because the

Committee voluntarily amended its reports to correct errors

and include inadvertently omitted information.

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 13 We consider and reject these contentions in turn.

A. The Committee Was Not Entitled to Notice and an Opportunity

to Cure Before Sanctions Could Be Imposed

14 Although the opening brief is not a model of clarity, the

Committee appears to raise two arguments for notice and a cure

period, one as a matter of statutory interpretation and the other as

a matter of procedural due process. Both arguments fall short.

1. Section 1-45-109 Does Not Require Notice and an Opportunity

to Cure

15 To begin, the Committee correctly notes that section

1-45-109(4)(b) requires reports deemed incomplete by the Secretary

of State (the Secretary) be conditionally accepted and given a cure

window. Yet, the Committee argues that this requirement

guarantees it notice and an opportunity to cure. This argument

fails in two ways.

16 First, nothing in this section obligates the Secretary to

prescreen reports for completeness. Nor does CIW cite any other

statutory provision or regulation imposing this obligation. Thus,

the Secretarys practice of not prescreening reports acting

instead as merely a filing office, according to uncontroverted

testimony at the hearing renders the cure period inapplicable.

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 17 Perhaps if an agencys interpretation of a statute meant that it

could never be applied, that interpretation might augur for judicial

intervention. But here, the cure period would apply whenever a

secretary deemed a report deficient; the current Secretary has

merely chosen not to engage in the triggering conduct. The current

Secretary could change this practice or the next secretary might do

so. Thus, the current Secretarys practice does not eviscerate the

statute, as the Committee suggests.

18 Even so, continuing to argue that the current practice robs the

notice and cure period of any meaningful effect, the Committee

invokes the established principle that a statute must be interpreted

to give effect to all of its parts. In other words, to make the notice

and cure period effective, the statute must be interpreted as

requiring that an appropriate officer review all reports for

completeness before accepting them for filing.

19 But this argument assumes that we must consider multiple

provisions and then give consistent and harmonious effect to all

provisions. Mullins v. Kessler, 83 P.3d 1203, 1205 (Colo. App.

2003). Because only a single provision is involved, the argument

invites reading into the statute mandatory or directory language

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 that the Secretary review reports for completeness. That a court

cannot do.

20 Second, the Committees notice and cure argument does not

explain why the cure period would apply to private complaints, like

those of CIW, as opposed to an officer-identified deficiency. After

all, article XXVIII, section 9 of the Colorado Constitution gives any

person who believes that the reporting and disclosure laws have

been violated the right to file a written complaint with the Secretary,

which the Secretary shall assign to an ALJ for a hearing within

three days. But the Committee does not explain how to reconcile its

interpretation requiring the statutory notice and fifteen-day cure

period with the time line for the constitutional private complaint

process. Compliance with the constitutional process would not

leave a cure window between the filing of the complaint and the

Secretarys referral to the ALJ. Thus, even were a statute

ambiguous, a court could not interpret a statute to limit a

constitutional provision. See Colo. Project-Common Cause v.

Anderson, 178 Colo. 1, 7, 495 P.2d 220, 223 (1972) (It is intrinsic

to our system that no statute can limit or curtail the constitutional

provisions with regard to the initiative.).

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 21 Undaunted, the Committee attempts to resolve this tension by

suggesting that an ALJ reviewing a complaint in a private

proceeding fills the role of the appropriate officer mentioned in the

statute and thus stands in the same position as the Secretary does

in an officer-initiated action.

22 But the Committee does not cite any language in the State

Administrative Procedure Act, section 24-4-101, C.R.S. 2016, that

would make an ALJ or the office of administrative courts an officer

of the Secretary.

23 Further, interpreting the notice and cure period as triggered

automatically would assume that the ALJ first deem[ed] the report

incomplete, but still would hold a hearing on the private complaint

alleging incompleteness. Under this scenario, at best the hearing

would be superfluous; at worst, the ALJ would be reviewing his or

her own action. Either outcome would contravene the presumption

that a just and reasonable result is intended. 2-4-201(1)(c),

C.R.S. 2016.

24 Given all this, we conclude that the Committee had no

statutory right to notice and a cure period where a private

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 complaint raises a reporting deficiency and an ALJ finds such a

deficiency after a hearing.

2. Procedural Due Process Does Not Require Notice and An

Opportunity to Cure

25 When reviewing for a procedural due process violation, a

statute is presumed constitutional and, therefore, the party

challenging the statute must prove beyond a reasonable doubt that

the statute is unconstitutional. Colo. Ins. Guar. Assn v. Sunstate

Equip. Co., 2016 COA 64, 51 (citation omitted). The essence of

procedural due process, as guaranteed by Colo. Const. art. II, 25,

and the Fourteenth Amendment, is basic fairness and procedure.

Id. at 52 (citation omitted). This guarantee protects an

individuals use and possession of property from arbitrary

encroachment and minimizes substantially unfair or mistaken

deprivations of property. Id. (citation omitted). And due process

requires notice and an opportunity to be heard before the final

deprivation of a property interest, but not before preliminary

administrative matters. See New Safari Lounge, Inc. v. City of

Colorado Springs, 193 Colo. 428, 434, 567 P.2d 372, 377 (1977)

(citing Mathews v. Eldridge, 424 U.S. 319, 349 (1976)).

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 26 The Committee includes in its due process claim the purported

reputational interest of Rep. Thurlow. The Committee cites no

authority, and we have found none, holding that a penalty lawfully

imposed after notice and an administrative hearing adequately

pleads a due process claim for deprivation of reputational interest.

See id. at 433, 567 P.2d at 376 (rejecting a due process claim for

damage to reputational interest as a result of license revocation

after notice and hearing).

27 Everyone before us agrees that the Committee received both

notice and a hearing. Thus, one might wonder what more could

due process require than timely notice of the complaints followed by

a full evidentiary hearing? The Committee cites no due process

authority, nor are we aware of any, also requiring an opportunity to

cure, after timely notice and a hearing but before a sanction could

be imposed. Such a requirement would call into question

innumerable statutes that allow for penalties without such an

opportunity. And to the extent the Committee advances public

policy arguments to bolster its due process claim, [w]e may not

substitute our view of public policy for that of the General

Assembly. Williams, 34 (citation omitted). This limitation has

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 particular force where a court is following a statutes plain

language, as opposed to interpreting ambiguous language.

28 Not giving up easily, the Committee argues that an

opportunity to cure should be recognized to prevent gotcha

complaints, i.e., where a complainant stands mute while the per

day fines mount to confiscatory levels. But courts will not overturn

a presumptively valid statute by speculating as to situations which

might possibly occur. New Safari Lounge, Inc., 193 Colo. at 434,

567 P.2d at 377. And for two reasons, the scenario that the

Committee posits is unlikely to arise.

29 First, sound exercise of ALJs discretion over penalties will

limit this scenario from ripening. Indeed, the Committee saw most

of its potential penalties wiped out by the ALJ. Second, the

maximum penalties are capped by a 180-day statute of limitations.

Colo. Const. art. XXVIII, 9(2)(a); 1-45-111.5(1.5)(a), C.R.S. 2016.

30 In sum, we discern no due process violations with the ALJs

interpretation of section 1-45-109.

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 B. The Committee Has Not Established Any Basis on which the
ALJ Should Have Applied a Substantial Compliance Test, and
in Any Event, the ALJ Found the Errors Substantial

31 The Committee relies on section 1-1-103(3), C.R.S. 2016,

which provides that [s]ubstantial compliance with the provisions or

intent of this code shall be all that is required for the proper

conduct of an election to which this code applies. Yet, section

1-1-101, C.R.S. 2016, defines the election code as limited to

Articles 1 13. While the Committee cites an ALJ order to the

contrary extending the election code to Article 45 we are not

bound by this interpretation and are aware of no precedential

authority that agrees with it. As well, Article 45 post-dates the

election code. Thus, Article 45 falls outside of the substantial

compliance mandate based on the plain language of the statutes in

Article 1.

32 Changing tack, the Committee points to the supreme courts

extension of the substantial compliance test to the right of

initiative and referendum in Loonan v. Woodley, 882 P.2d 1380,

1384 (Colo. 1994) (Given the similar nature of the right to vote and

the right of initiative and referendum . . . we now hold that

substantial compliance is the appropriate standard to apply in the

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 context of the right to initiative and referendum.). The supreme

court reasoned that because [t]he right of initiative and

referendum, like the right to vote, is a fundamental right under the

Colorado Constitution . . . [the] constitutional and statutory

provisions governing the initiative process should be liberally

construed. Id. at 1383-84 (citation omitted). But because

campaign finance regulation is not a fundamental right, the

Committees attempt to invoke Loonans substantial compliance test

by analogy fails.

33 More persuasive is the legislative declaration of the Fair

Campaign Practices Act, section 1-45-102, C.R.S. 2016, which

weighs against extending substantial compliance to reporting

requirements for contributions. The General Assembly declared:

The people of the state of Colorado hereby find

and declare that large campaign contributions
to political candidates allow wealthy
contributors and special interest groups to
exercise a disproportionate level of influence
over the political process; that large campaign
contributions create the potential for
corruption and the appearance of corruption;
that the rising costs of campaigning for
political office prevent qualified citizens from
running for political office; and that the
interests of the public are best served by
limiting campaign contributions, establishing

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 campaign spending limits, full and timely
disclosure of campaign contributions, and
strong enforcement of campaign laws.

Id. (emphasis added).

34 The statutory requirements of strong enforcement and full

and timely disclosure of campaign contributions would be

undercut by applying substantial compliance to campaign finance

disclosures. Also, to the extent that the Committee discusses the

legislative history of Article 45, it does so without citation and by

referencing its filings in the administrative record. This court does

not accept arguments incorporated by reference. See Castillo v.

Koppes-Conway, 148 P.3d 289, 291 (Colo. App. 2006).

35 Next, the Committee points out that in Campaign Integrity

Watchdog v. Coloradans for a Better Future, 2016 COA 56M, 25,

the division disposed of a complaint that the wrong payee had been

inadvertently listed on an expenditure report by observing, CBF

substantially complied with its reporting obligations. Then the

division concluded that [a]ny error in this regard is too

insignificant to amount to a violation of the reporting law. Id.

However, the division did not:

purport to interpret any statute;

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 cite to any case discussing substantial compliance, such as

Loonan; or

address a violation of the explicit statutory requirements

governing contributions (i.e., name, address, occupation,

employer).

36 Further, the division weighed only the significance of a single

error, not that of multiple errors, such as the Committee concedes

that it made. Nor did the division endorse the argument the

Committee makes that substantial compliance can be

established based on its pattern of overall compliance, albeit

marred by mistakes on only a minority of incomplete reports.

37 One need only reflect on the legislative declaration quoted

above to recognize the General Assemblys greater concern over

disclosures involving contributors than disclosures of expenditures.

The plain language underscores this concern by requiring full

disclosure of every contribution over 100 dollars, meaning name,

address, occupation, and employer listed for every contributor.

38 And even ignoring all of this, in the end, the Committee

remains faced with the ALJs finding that the Committees errors

were substantial after he rejected as have we the Committees

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 substantial compliance argument. This is a factual determination

subject to deferential review that must be upheld if it finds support

in the record. Lambert v. Ritter Inaugural Comm., Inc., 218 P.3d

1115, 1119 (Colo. App. 2009).

39 The Committee seeks to evade deferential review by urging

that the test is whether its overall compliance is substantial, not

that the particular errors are intrinsically insubstantial. In support

of this comparative approach, the Committee cites only Fabec v.

Beck, 922 P.2d 330 (Colo. 1996). But Fabec does not require a

comparative approach because the court upheld two of three lower

court rulings, looking only at the degree of noncompliance.

40 For these reasons, we reject the Committees argument that

the admitted deficiencies in its reports should have been assessed

under the substantial compliance standard.

C. Sanctions Were Not Imposed Because the Committee

Voluntarily Amended its Reports to Correct Errors and Include
Inadvertently Omitted Information

41 Lastly, the Committee posits that it was sanctioned for filing

amended reports. On this basis, the Committee argues why such a

sanction is contrary to the Secretarys approach, asserts that the

sanction is not a matter of good public policy, and then maintains

18
 that it should not be sanctioned because amending is not required

by statute or rule. But because the Committees premise is flawed,

its conclusions are unpersuasive.

42 The ALJs order does not base the sanctions on the

Committees amended reports. Instead, the ALJ noted that the

nondisclosures had been corrected by April 24, 2015. And this fact

would be pertinent only to calculating the amount of a per day

penalty which the ALJ did not impose in any event not to

whether a penalty was warranted. Thus, the Committees argument

that no statute or rule requires inadvertently omitted reports to be

amended and reported is irrelevant. Because the Committee does

not dispute the ALJs findings that its reports omitted required

information, the Committee effectively concedes that the penalties

imposed resulted from these omissions, not from the amended

filings.

43 Still, the Committee argues that the public policy of full and

accurate disclosure of contribution information favors allowing

amendments without imposing penalties. Specifically, the

Committee asserts that the earlier nondisclosures became

discernable to CIW only because of the amended report that the

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 Committee filed on April 7. As a result of the amended report, CIW

was able to file a second complaint within the statute of limitations.

The Committee suggests that this result provides a roadmap for a

candidate committee to protect itself by not amending a report, or

not disclosing the contributions at all, until after the statute of

limitations had run, which would delay disclosure to the public.

44 But even accepting the assumption about how CIW discovered

at least the Bishop, Todd, and Workman contributions, a candidate

committee that discovers its failure to have made required

disclosures would still be choosing between two risks: on the one

hand, amend as soon as possible to stop the per day penalty

accrual; or, on the other hand, delay amending until the statute of

limitations has run, hoping that a potential complainant will not

discern the inadequate disclosure from another source and file

earlier. To the extent that this choice creates a dilemma, it inheres

in the plain statutory language, from which we cannot depart.

45 And in any event, like the plea to public policy rejected in the

due process argument above, this argument also fails for the same

reason. Because the per day penalty accrual is tempered with a

shortened statute of limitations, we discern no compulsion to

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 disturb the risk allocation. Thus, we reject the Committees

argument that policy requires that amendments would somehow

immunize untimely or incomplete reports from penalties.

V. Conclusion

46 For all of these reasons, the ALJs order is affirmed.

JUDGE HAWTHORNE and JUDGE NAVARRO concur.

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