reply brief crp v. ethics watch

8/20/2019 Reply Brief CRP v. Ethics Watch

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COLORADO COURT OF APPEALSCourt Address: 2 East 14th AvenueDenver, CO 80203

District Court, City and County of DenverHonorable Robert L. McGahey Jr., JudgeCase No. 2014CV031851

______________________________________Plaintiff/Appellee: COLORADOREPUBLICAN PARTY

v.

Intervenor Defendant/Appellant:

COLORADO ETHICS WATCH

and

Defendant/Appellee: WAYNE W. WILLIAMS,in his official capacity as Colorado Secretary ofState

_______________________________________

Attorneys for Appellant:Luis Toro, #22093Margaret Perl, #431061630 Welton Street, Suite 203Denver, CO 80202Telephone: 303-626-2100Email: [email protected]

[email protected]

▲ COURT USE ONLY ▲ ________________________

Case No. 14CA1945

REPLY BRIEF

mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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TABLE OF CONTENTS

TABLE OF AUTHORITIES ................................................................................... iii

CERTIFICATE OF COMPLIANCE ......................................................................... v

I. INTRODUCTION ............................................................................................... 1

II. ARGUMENT ....................................................................................................... 3

A. Standard of Review .......................................................................................... 3

B. The 2010 Statute Did Not – and Could Not – Create An Exception to

Constitutional Limits on Political Party Contributions .......................................... 4

C. The Party’s Independent Expenditure Committee is a Subsidiary Part of, and

Legally Controlled by, the Party ...........................................................................11

D. First Amendment Precedent Consistently Upholds Limiting Contributions to

Political Parties Regardless of Use of Funds, Even After Citizens United ..........14

III. CONCLUSION ..............................................................................................20


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TABLE OF AUTHORITIES

Cases

Carey v. Fed. Election Comm’n, 791 F. Supp. 2d 121 (D.D.C. 2011) ....................15Citizens United v. Fed. Election Comm’n, 558 U.S. 310 (2010) ............................... 2

Colo. Ethics Watch v. Clear The Bench Colo., 2012 COA 42, ¶ 32 .............. 1, 3, 11

Colorado Ass’n of Public Employees v. Board of Regents, 804 P.2d 138 (Colo.

1990) ....................................................................................................................... 4

Colorado Ethics Watch v. Senate Majority Fund, LLC , 2012 CO 12 .............. 1, 6, 9

Colorado Republican Fed. Campaign Comm. v. Fed. Election Comm’n, 518 U.S.

604 (1996) ...........................................................................................................8, 9

Davis v. FEC, 554 U.S. 724, 742 (2008) .................................................................19

Gibbons v. Ludlow, 2013 CO 49, ¶ 11. ...................................................................... 3

Martinez v. People, 69 P.3d 1029, 1033 (Colo. 2003) ............................................10

McConnell v. Fed. Election Comm’n, 540 U.S. 93, 188 (2003) ..........................8, 20

McCutcheon v. Fed. Election Comm’n, 134 S. Ct. 1434, 1451 n.6 (2014) ...... 17, 19

P.F.P. Family Holdings, L.P. v. Stan Lee Media, Inc., 252 P.3d 1, 3 (Colo. App.

2010) ....................................................................................................................... 4

Republican Nat’l Comm. v. Fed. Election Comm’n (In re Anh Cao), 619 F.3d 410,

422 (5th Cir. 2010) ................................................................................................20

Republican Nat’l Comm., et al. v. Fed. Election Comm’n, 698 F. Supp. 2d 150, 158(D.D.C 2010) ................................................................................................. 16, 20

Republican Nat’l Comm.et al. v. Federal Election Com’n, 130 S.Ct. 3543 (2010) 16

Republican Party of N.M. v. King , 741 F.3d 1089 (10th Cir. 2013), ......... 15, 17, 18

Rufer v. Fed. Election Comm’n, No.14-cv-837, 2014 U.S. Dist. LEXIS 114762,

*22 (D.D.C. August 19, 2014) ....................................................................... 16, 19

Speech Now.org v. Fed. Election Comm’n, 599 F.3d 686, 695 (D.C. Cir. 2010) ...15

Thalheimer v. City of San Diego, 2012 U.S. LEXIS 6563 (S.D. Cal. Jan 20, 2012)

...............................................................................................................................18

Statutes

C.R.S. § 1-45-103.7(2.5) ........................................................................................5, 7

C.R.S. § 1-45-107.5 ...............................................................................................1, 5


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Rules

Campaign and Political Finance Rule 1.4., 8 C.C.R. 1505-6 (2015) ......................12

Constitutional Provisions

Colo. Const. art. XXVIII, § 3(3) ..............................................................................10

Colo. Const. art. XXVIII, § 3(3) ..................................................................... 1, 7, 11

Colo. Const. art. XXVIII, § 3(4). .........................................................................1, 11

Colo. Const. art. XXVIII, § 3(5) ................................................................................ 7

Colo. Const. art. XXVIII, § 2(12)(c)(III) ................................................................... 5

Colo. Const. art. XXVIII, § 2(14)(c)(III) ................................................................... 5

Colo. Const. art. XXVIII, § 9(2) ................................................................................ 4


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CERTIFICATE OF COMPLIANCE

I hereby certify that this brief complies with all requirements of C.A.R. 28 andC.A.R. 32, including all formatting requirements set forth in these rules.Specifically, I certify that:

The brief complies with C.A.R. 28(g).X It contains 4,733 words.

It does not exceed 18 pages.

The brief complies with C.A.R. 28(k).For the party raising the issue:

It contains under a separate heading (1) a concise statement of theapplicable standard of appellate review with citation to authority; and (2) a

citation to the precise location in the record (R. , p. ), not to an entiredocument, where the issue was raised and ruled on.

X For the party responding to the issue:It contains, under a separate heading, a statement of whether such

party agrees with the opponent’s statements concerning the standard ofreview and preservation for appeal, and if not, why not.

I acknowledge that my brief may be stricken if it fails to comply with any of therequirements of C.A.R. 28 and C.A.R. 32.

/s/ Margaret Perl

Margaret PerlAttorney for the AppellantColorado Ethics Watch


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Appellant Colorado Ethics Watch, by its undersigned attorneys, respectfully

submits this reply brief:

I. INTRODUCTION

This is a simple case of statutory interpretation. Ethics Watch is asking this

Court to read the independent expenditure committee statute, C.R.S. § 1-45-107.5,

in pari materia with the Colorado Constitution’s political party contribution limits

and source restrictions in Article XXVIII, §§ 3(3) and (4) when, as here, a political

party has established a committee pursuant to that statute. Colo. Ethics Watch v.

Clear The Bench Colo., 2012 COA 42, ¶ 32 (“Clear The Bench”) (“Because the

Fair Campaign Practices Act and the Campaign and Political Finance Amendment

both pertain to campaign finance regulations, they are in pari materia and must be

construed together.”).

To the extent that reading may not completely answer the question

presented, Ethics Watch asks this Court to assume, as it must, that the General

Assembly was aware of existing case law regarding political party independent

expenditure accounts when the statute was enacted in 2010. Colo. Ethics Watch v.

Senate Majority Fund, LLC , 2012 CO 12, ¶ 20 (“Senate Majority Fund ”)

(legislators and voters are presumed to be aware of existing case law when either

enacts law).


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The result of applying these principles of statutory construction is that

political party independent expenditures will continue to be treated the same way

they have been under Colorado and federal law since 1996, and as approved by the

U.S. Supreme Court – even after the decision in Citizens United v. Fed. Election

Comm’n, 558 U.S. 310 (2010) and enactment of Colorado’s independent

expenditure committee statute later in 2010. That is, a political party remains

subject to political party contribution limits even if it raises and spends some of its

funds through an independent expenditure committee.

It is Appellee Colorado Republican Party (the “Party”) that asks this Court

to move beyond existing First Amendment precedent to rule that an independent

expenditure arm of a political party must be exempt from contribution limitations

that otherwise apply to political parties. The Party devotes little effort to defending

the district court’s rationale or attempting to construe the statute in harmony with

Article XXVIII’s provisions. Instead, it advances arguments for striking down

Colorado’s political party contribution limits under a yet-to-be-accepted reading of

First Amendment precedent. Such a result is not compelled by state or federal law

or the First Amendment.


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II. ARGUMENT

A. Standard of Review

All aspects of this case are properly subject to de novo review by this Court.

The district court did not engage in fact-finding, but was presented with an

undisputed set of facts and a declaratory judgment request to establish the Party’s

rights under law. [R:10, Verified Complaint at ¶ 49]. The district court’s order is

based upon its interpretations of three written legal documents (1) the Colorado

Constitution, (2) applicable campaign finance statutes, and (3) the Party’s Standing

Rules, which formed the basis of the undisputed facts. Each of these district court

legal interpretations is subject to de novo review in this Court. See Clear The

Bench, 2012 COA 42, at ¶ 38 (applying de novo review when “underlying facts are

undisputed and issue presented as one of law” to administrative judge). This is

consistent with the de novo review of a district court granting summary judgment

as a matter of law when no material facts are in dispute. See Gibbons v. Ludlow,

2013 CO 49, ¶ 11.

The Party is correct that the Standing Rules are not a contract between

Ethics Watch and the Party. [Answer Br. at 11.] But this was not an action to

declare the relative legal rights and responsibilities between the parties under that

document alone. Instead, this declaratory action sought interpretation of the law

and the Standing Rules to declare the scope of the Party’s legal rights, with the


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Standing Rules acting akin to bylaws for the independent expenditure committee.

Ethics Watch joined the case as an additional party defendant because (1) the Party

feared that Ethics Watch would file a campaign finance complaint against it under

Colo. Const. art. XXVIII, § 9(2) in the absence of a declaratory judgment

authorizing it to proceed, and (2) Ethics Watch expected the Secretary, who

offered a non-binding opinion supporting the Party, to fail to defend the

declaratory judgment suit he invited the Party to file. [R:22-24, Ethics Watch’s

Unopposed Motion to Intervene as Defendant.] The Party itself raised the Standing

Rules to support its contention that its own independent expenditure committee is

not controlled by the party. Interpretation of the Party’s rights under that

document, like the interpretations of the Colorado constitution and statutes, is a

question of law reviewed de novo. See P.F.P. Family Holdings, L.P. v. Stan Lee

Media, Inc., 252 P.3d 1, 3 (Colo. App. 2010) (“In construing corporate bylaws, we

apply the same rules used to interpret statutes, contracts, and other written

instruments”) (internal citations omitted). Accordingly, we review the construction

of corporate bylaws de novo.

B. The 2010 Statute Did Not – and Could Not – Create An Exception to

Constitutional Limits on Political Party Contributions

The General Assembly cannot amend the Colorado Constitution through

legislation. See Colo. Ass’n of Public Employees v. Board of Regents, 804 P.2d

138, 142 (Colo. 1990) (“The legislature cannot enact a law contrary to those


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constitutional restraints.”). The provisions in C.R.S. §§ 1-45-103.7(2.5) and 1-45-

107.5 were enacted against the backdrop of constitutional provisions and Supreme

Court case law about independent expenditures by political parties detailed in the

Opening Brief and Amicus Brief. Article XXVIII subjects political parties to

contribution limitations and source prohibitions in sections 3(3) & 3(4) regardless

of the specific activity conducted by the party with the money raised. The only

limited exceptions to this rule is the constitutional provision that allows political

parties to establish and control “political committees” and “small donor

committees” which are in-turn subject to the specific limitations and prohibitions

attached to those types of committees. See Colo. Const. art. XXVIII, § 2(12)(c)(III)

and 2(14)(c)(III). There is no indication in the language of the constitution that the

voters intended political parties to be able to conduct any activities or operate any

accounts that were free of all contribution limitations and prohibitions.

When enacted, Article XXVIII could not specifically address “independent

expenditures committees” as a type of political organization, because such entities

didn’t exist at the time. Political parties were making independent expenditures (in

the sense that those expenditures were not coordinated with candidates) at that time

pursuant to well-known Supreme Court cases. Voters are presumed to be aware of

Colorado Republicans I and II (discussed in the Opening Brief and the Amicus

Brief), and the Article should be interpreted as adopting the regime under those


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cases where political parties make independent expenditures through a separate

party-controlled bank account using only money subject to constitutional limits

(so-called “hard money”). See Senate Majority Fund , 2012 CO 12, ¶ 20.

This would be consistent with the Article’s requirements that any political

committees or small donor committees that are “established, financed, maintained,

or controlled” by the same political party are aggregated and treated as a single

committee. See Colo. Const. art. XXVIII, § 2(12)(c)(III) and 2(14)(c)(III). The

Colorado system prevents a political party from creating a number of internally

controlled committees and evading contribution limits, regardless of how those

committees are structured – similar to what the Party seeks to do here with its new

independent expenditure committee. Thus, these provisions indicate voter intent

and the spirit of the constitutional limitations on parties that informed the 2010

legislation.

The General Assembly’s goal in Senate Bill 10-203 (enacting the

independent expenditure committee provisions here) was to address the new

categories of political spenders – corporations and unions – that had been

prohibited from making independent expenditures before the Citizens United

decision. Lawmaker concern was focused on shining a light on this new spending

in Colorado elections, so as to not open a new loophole for undisclosed spending.

See Senate State Affairs Bill Summary and House State Affairs Bill Summary,


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included in Appendix A. There was no intent to disturb any political actors already

reporting. Political parties had been making independent expenditures and

reporting all such spending for years when this bill was introduced, and therefore,

were not within the scope of the legislation’s purpose.

A chart distributed by the legislative sponsor during Senate committee

debate on the bill shows the anticipated donors for newly created “independent

expenditure committees” as corporations, unions, individuals and other political

committees. See Senate State Affairs Bill Summary Attachment A, included in

Appendix A. Political parties are listed in a separate part of the chart, together with

the limitations on contributions applicable to their spending. Id. Finally, the chart

categorizes political parties as entities that made and disclosed independent

expenditures in the pre-Citizens United world. Id. The statutory language in C.R.S.

§ 1-45-103.7(2.5) reflects the intent of the General Assembly to cover spending by

outside entities, not political parties, as it exempts such committees from the

contribution limits for political committees in Article XXVIII, § 3(5) but does not

exempt them from the limits on political parties in § 3(3). Indeed, no

representatives of political parties in Colorado testified in the committee hearings

on this legislation. See Senate State Affairs Bill Summary and House State Affairs

Bill Summary, included in Appendix A.


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Both the Party and other political parties in Colorado acted as though the

2010 legislation did not change how parties conducted independent expenditures

when they organized their 2012 election cycle spending in compliance with

constitutional contribution limits. [R:3, Verified Complaint at ¶ 13]. No Supreme

Court rulings or other major legal events occurred between that time and late 2013

when the Party decided to push a novel interpretation of the law that would allow it

to create a new unlimited pot of funds to use for independent expenditures.

It is true that this legislative intent and interpretation of the statute treats the

Party (and all political parties) different than some other political spenders, but that

was permissible in 2010 when the statute was enacted and it is still permissible

today. [Amicus Br. at 12-13]. The voters enacted Article XXVIII limits on parties

understanding the abuses of “soft money” by political parties. [Amicus Br. at 14-

17]. The unique position of parties in our political system as a vehicle for

candidates to access the ballot, and their relationship with elected officials, has led

courts to recognize different corruption risks that justify this disparate treatment.

See McConnell v. F ed. Election Comm’n, 540 U.S. 93, 188 (2003); Colorado

Republican Fed. Campaign Comm. v. Fed. Election Comm’n, 518 U.S. 604, 617-

18 (1996) (“Colorado Republicans I ,). The legislature must be presumed to have

adopted the 2010 statute with knowledge of the balance of rights and

responsibilities for political parties making independent expenditures under federal


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campaign finance law and the First Amendment. See Senate Majority Fund, 2012

CO 12, at ¶ 20. The statute contains no language to change that balance.

Although the Party’s brief argues that it is unclear how reporting obligations

would apply to a “novel” committee subject to political party contribution limits

[Answer Br. at 18], there is historical evidence how such activities would be

conducted under Ethics Watch’s interpretation of the statute. Both major political

parties conducted and reported independent expenditures in the years between the

constitution’s adoption and the 2010 statute. The Party itself registered and

reported independent expenditures while using “hard money” subject to party

limits in the 2012 election cycle. This is not a new concept, as the federal political

parties have been conducting independent expenditures from that arm of their party

committee subject to party limits since Colorado Republicans I . [R:87-88, FEC

Campaign Guide: Political Parties]. It is the Party that seeks in this litigation to

create a new type of party-controlled, soft-money independent expenditure

committee not subject to contribution limits “heretofore unrecognized” in Colorado

or federal law. [Answer Br. at 17].

Ethics Watch’s interpretation of the statute fits more with history of

campaign finance law and the legislative intent to target new political spenders

after Citizens United and bring them into the arena of public disclosure. Because

Citizens United did not discuss or affect reporting political players like political


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parties and candidates, the 2010 statute did not intend to upset those preexisting

regimes, which remain governed by constitutional limits. See Martinez v. People,

69 P.3d 1029, 1033 (Colo. 2003) (“The legislature is presumed to intend that the

various parts of a comprehensive scheme are consistent with and apply to each

other, without having to incorporate each by express reference in the other

statutory provisions.”). If the Party’s interpretation is adopted, then the statute

would apply to all previously reporting and limited entities similar to political

parties. For example, a candidate would be able to establish and control a separate

bank account, call it an “independent expenditure committee,” and raise unlimited

corporate money into that account to be used for pro-candidate messages, all while

retaining the ability to fire those responsible for the messages. This example

illustrates that the Party’s reading of the statute results in a clear circumvention of

the contribution limits to candidates in article XXVIII, § 3.1

Thus, if the district court’s interpretation of the statute is not erroneous, the

statute must be considered in conflict with Article XXVIII, § 3 and struck down as

unconstitutional. A statute that allows political parties and candidates (and possibly

1 Indeed, the Federal Election Commission has rejected this very idea after CitizensUnited by holding a candidate cannot accept unlimited contributions into a separateaccount seeking to make independent expenditures and established as a separatelyreporting committee controlled and maintained by the candidate. See AdvisoryOpinion 2011-21 (Constitutional Conservatives Fund PAC) included as AppendixB.


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other regulated entities) to evade constitutional limits by opening a separate bank

account as an affiliated committee and providing a set of rules to the people in

charge of spending that money (while the regulated entity solicits unlimited

donations for that bank account) violates both the letter and spirit of Article

XXVIII. But this Court need not make such a ruling. Instead it should read the

statute and constitution in pari materia so that C.R.S. § 1-45-107.5 does not

abrogate the political party contribution limits and corporate and labor contribution

prohibitions in Colo. Const. art. XXVIII §§ 3 and 4. See Clear The Bench, 2012

COA 42, ¶ 32.

C. The Party’s Independent Expenditure Committee is a Subsidiary Part

of, and Legally Controlled by, the Party

The political party contribution limits apply to money raised and spent by

the Party’s independent expenditure committee because it is a wholly contained

subsidiary arm of the Party itself, inseparable from the Party, not because as a

stand-alone entity it would fall under the definition of “political party” in Article

XXVIII. [See Answer Br. at 14-15]. The Standing Rules and the Party’s own

characterization of the independent expenditure committee as a “standing

committee” and “separate segregated fund” of the Party illustrate that it is a

component of the Party. [R:79, Standing Rules]. The district court erred in not

finding the committee a component of the Party’s organization as a matter of law.


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The district court also erred in holding that Ethics Watch had the burden to

provide particular evidence that the Party wouldn’t follow the Standing Rules. The

premise of the declaratory judgment action brought by the Party is that if the Party

did not follow the Standing Rules, it could be sued for violating contribution limits

or source prohibitions. The point of the action was to obtain an order that if the

Party followed the Standing Rules, it should be ruled immune from such suits. As

explained in the Opening Brief, under the Standing Rules the Party appoints the

people directing the spending, sets the ground rules for the spending, raises money

for the spending, monitors for violations of bylaws, and possibly “renders

ineffective” any inconsistent rules adopted by the committee’s “independent”

managers. [R:81-82]. A fact-intensive coordination analysis is not required here

and would defeat the purpose of the declaratory judgment complaint. Because the

independent expenditure committee is legally “controlled by” the Party and

inseparable from the overarching Party apparatus, the district court should have

entered judgment against the Party. See Campaign and Political Finance Rule 1.4,

8 C.C.R. 1505-6 (2015).

The Party’s brief provides a lengthy discussion of Federal Election

Commission (“FEC”) cases involving alleged coordination between candidates and

groups in an effort to show the high bar that must be met to prove that an outside

entity is coordinating with a candidate or political party when making expenditures


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in support of that party or candidate. [Answer Br. at 23-26]. Such analysis is

irrelevant because the FEC would never engage in such an inquiry with regard to

independent expenditures made by a political party. The FEC considers all

independent expenditure arms of political parties as a constituent part of that

political party subject to the party contribution limits. [R:88]. While federal

political parties create firewalls to keep their “independent” teams separated from

the parts of the political party that engage in “coordinated” expenditures with

candidates pursuant to Colorado Republicans I , there is no attempt to create the

fiction that the independent team and its bank account is a separate entity from the

party not subject to limits.

This is how independent expenditure accounts of political parties have

always worked in Colorado and federal law. The Party now seeks to maintain the

benefit of controlling its committee’s message without the corresponding burden of

party contribution limits. The Party’s brief points out numerous independent

expenditure committees that are not in any way controlled or established by the

Party, yet state their purpose is supporting Republican candidates. [Answer Br. at

30]. The existence of those committees and the fact that they are not within the

Party’s control is exactly why the party wanted to have an internal independent

committee that it could control. In the Party’s own words, it needed its own

committee where the messaging would reflect “the facts, argument, and


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perspective of the Colorado Re publican Party.” [R:76]. But there is a necessary

tradeoff to the benefit of controlling the message – the independent expenditure

committee is subject to political party limits.

If the Party’s interpretation of the law and Standing Rules is correct, the

Standing Rules provide a road map for dismantling the political party contribution

limits for all parties, or, as noted above, for candidates themselves. Any number of

“projects” or initiatives the party engages in could be artificially set up as a

separate bank account and standing committee, yet subject to Party appointment &

bylaws like the Standing Rules. Then the party would have a number of unlimited

pots of money to use for its activities. Such a result would subvert the voters’

intent in enacting the political party limits in Article XXVIII, and the First

Amendment does not compel this court to allow it.

D. First Amendment Precedent Consistently Upholds Limiting Contributions to

Political Parties Regardless of Use of Funds, Even After Citi zens United

Despite the Party’s optimism, there is no indication that contribution limits

to political parties or the requirement that political parties use “hard money” for

independent expenditures will be struck down on constitutional grounds any time

soon.

The brief submitted by Amicus Campaign Legal Center carefully charts the

history of political party contribution limitations and prohibitions and the Supreme

Court’s repeated rejection of First Amendment challenges to these limits. This line


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of cases is consistent both before and after Citizens United because the Court has

always treated political parties different from other actors in the political process.

See Republican Party of N.M. v. King , 741 F.3d 1089, 1100 (10th Cir. 2013)

(“ King ”) (“These comments [in McConnell ] reflect the Court's acceptance of the

analytical differences between parties and independent expenditure groups for

purposes of First Amendment protection: more onerous contribution restrictions

may be placed on political parties than on independent groups.”). Even the cases

cited by the Party regarding limits on independent expenditure committees and

“hybrid” committees after Citizen United distinguished political parties from their

holdings. See Speech Now.org v. Fed. Election Comm’n, 599 F.3d 686, 695 (D.C.

Cir. 2010) (independent expenditures by political parties pursuant to Colorado

Republicans I are “wholly distinct” from independent expenditures by non-

connected groups); Carey v. Fed. Election Comm’n, 791 F. Supp. 2d 121, 131

(D.D.C. 2011) (“the Commission fails to recognize that non-connected non-profits

are not the same as political parties and do not cause the same concerns.”)

(emphasis in original).

There is a different corruption analysis for political parties based on a

different record of access to candidates and the holding in Citizens United

regarding the proper standard for corruption as applied to limitations on outside

groups is not applicable. A three-judge court including a D.C. Circuit Judge


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rejected the national Republican Party’s argument that Citizen United ’s limited

theories of corruption are enough to strike down political party limits. Republican

Nat’l Comm., et al. v. Fed. Election Comm’n, 698 F. Supp. 2d 150, 158 (D.D.C

2010). That decision was summarily affirmed by the U.S. Supreme Court, thereby

placing its approval on the continued constitutionality of political party limits even

if the party intends to raise money for a separate bank account that will only

conduct certain protected activities. Republican Nat’l Comm. et al. v. Fed. Election

Comm’n, 130 S. Ct. 3543 (2010). A Supreme Court summary affirmance is not a

denial of certiorari. It is a merits decision with full precedential value, at least with

respect to “the precise issue presented and necessarily decided by those actions.”

Anderson v. Celebrezze, 460 U.S. 780, 784 n.5 (1983).

Thus, the Supreme Court’s actions since Citizens United have reaffirmed the

limitations on political parties, not moved away from them. The recent Rufer case

denied a preliminary injunction because the political parties’ same scheme of

setting up a separate segregated fund to be used by the party for independent

expenditures and claiming to be free from contribution limits defied 40 years of

Supreme Court precedent. See Rufer v. Fed. Election Comm’n, 2014 U.S. Dist.

LEXIS 114762, at *22 (D.D.C. August 19, 2014). While the Rufer court did certify

questions to the D.C. Circuit for further discussion, there is no prospect of any

contrary constitutional ruling soon because the case was voluntarily dismissed


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jointly by the parties. In short, recent Supreme Court precedent “clearly does not

overrule McConnell ’s holding about ‘soft money,’” but the Party wants this Court

to rule to the contrary. McCutcheon v. Fed. Election Comm’n, 134 S. Ct. 1434,

1451 n.6 (2014).

The cases cited by the Party to support this drastic step overturning 40 years

of constitutional precedent do not support that proposition. Most relevant is King ,

741 F.3d 1089, which supports the constitutionality of applying Colorado’s statute

consistently with the political party contribution limitations. The factual premise of

King was that the committees at issue in this case were not connected to, or

controlled by, the political party: “the question before us is whether political

committees that are not formally affiliated with a political party or candidate may

receive unlimited contributions.” Id. at 1103. In King the committee in question

had a treasurer who was an officer with a local county branch of the Republican

Party, but the committee was not in any way connected to – much less controlled

by – the state Republican Party. Id. at 1103 n.12. In sharp contrast here, the Party’s

committee is officially registered as a “separate segregated fund” and “standing

committee” of the state party organization and is governed by the Standing Rules

and Party Chair ’s appointees. This case presents the situation distinguished by the

Tenth Circuit in King , a situation where the First Amendment challenge would be

governed by still-controlling law upholding political party restrictions:


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While it is true that political parties can make unlimitedindependent expenditures, see Colorado I , 518 U.S. at618, the Supreme Court in McConnell upheld restrictionson soft-money contributions to political parties…

A state political party, due to McConnell , is much lesslikely to bring a successful as-applied challenge to alimitation on the contributions it may receive.

Id. at 1102-03.

The Party also places much weight on a single unpublished lower court

opinion in Thalheimer v. City of San Diego, 2012 U.S. LEXIS 6563 (S.D. Cal. Jan

20, 2012); a case with a unique set of facts that has not been applied elsewhere and

is not analogous to Colorado’s law. That court was faced with a raft of First

Amendment challenges to a complex system of municipal campaign finance laws,

including contribution limits on non-connected committees that only make

independent expenditures. Id. at *38. Political parties in this scheme were

alternatively banned from making any contributions or coordinated expenditures

with candidates, or limited to only $1000 in such contributions. Id. at *46, *57.

The court struck down these limits on political parties because they resulted in “the

complete inability of the political parties to assist candidates they support.” Id. at

*45. As one of its many holdings, the court did strike down a requirement that

money used by political parties for independent expenditures “be attributable to an

individual that does not exceed $500 per candidate per election.” Id. at *65-*66.

But this limited holding, in the context of the overall municipal scheme, was paired


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with an affirmation of the corporate contribution limits on donations to political

parties. Id. at *66. It is important to note that this case was not appealed to the

Ninth Circuit, and has not been cited by courts in other jurisdictions to support the

proposition that political parties may make independent expenditures without being

subject to contribution limitations. Indeed, the Rufer court did not even mention

this case in its analysis of the parties’ likelihood of success in overturning Supreme

Court precedent upholding contribution limits on political parties regardless of

how the party uses the money. See Rufer , 2014 U.S. Dist. LEXIS 114762 at *22-

*23.

The only effect of the Citizen United line of cases on political party raising

and spending of money is the practical effect of making parties a restricted entity

seeking to message in a crowded world of unrestricted, unconnected organizations.

Indeed, this was the argument and impetus for the Party’s verified complaint

seeking to relieve itself of financial restrictions in the Colorado Constitution in

order to increase the effectiveness of its message compared to outside non-

connected independent expenditure entities. [R:84, Affidavit of Ryan Call, ¶¶ 7-9].

But the First Amendment does not require – or even permit – campaign finance

law to level the financial playing field amongst political actors. See e.g. Davis v.

FEC, 554 U.S. 724, 742 (2008); McCutcheon, 134 S. Ct. at 1450. The Supreme

Court has repeatedly stated that disparate treatment of political parties compared to


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other actors is constitutional. See, e.g., Republican Nat’l Comm. v. Fed. Election

Comm’n (In re Anh Cao), 619 F.3d 410, 422 (5th Cir. 2010) (“the Supreme Court's

analysis fully supports the Government's differential treatment of political parties –

because of what Colorado II recognized as a political party's unique susceptibility

to corruption”); McConnell , 540 U.S. at 187-89 (rejecting political parties equal

protection challenge because laws discriminate against parties in favor of outside

special interest groups). Thus, the appropriate remedy is for the Party to argue to

the people of Colorado that a different policy choice is needed and propose

amendments to Article XXVIII. See Republican Nat’l Comm , 698 F. Supp. 2d at

160 n.5 (“we recognize the RNC’s concern about this disparity, which, it argues,

discriminates against the national political parties in political and legislative

debates. But that is an argument for the Supreme Court or Congress.”). This Court

does not have the authority to overturn Supreme Court precedent to enact such a

policy choice, which can be made only by Colorado voters, under the guise of

enforcing the First Amendment.

III. CONCLUSION

For these reasons, this Court should reverse the judgment of the district court

and remand with instructions to enter judgment declaring that contributions to the

independent expenditure committee established by the Party are subject to the


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Colorado Constitution’s contribution limits and source restrictions applicable to

political parties.

Respectfully submitted July 1, 2015.

signed original on file

/s/ Margaret PerlLuis ToroMargaret PerlColorado Ethics Watch1630 Welton Street, Suite 203Denver, CO 80202

Attorneys for AppellantColorado Ethics Watch


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CERTIFICATE OF SERVICE

The undersigned hereby certifies that on July 1, 2015, service of theforegoing REPLY BRIEF was made via ICCES, addressed as follows:

Matthew D. GroveSueanna JohnsonOffice of the Attorney General1525 Sherman Street, 7th FloorDenver, CO 80203

Christopher O. MurrayBrownstein Hyatt Farber Schreck, LLP410 Seventeenth Street, Suite 2200Denver, CO 80202-4432

Richard A. WestfallAllan L. HalePeter J. KrumholzHale Westfall LLP1600 Stout Street, Suite 500Denver CO 80202

igned original on file

/ s/ Margaret Perl

reply brief crp v. ethics watch

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