50 Certiorari to the Colorado Court of Appeals Court of
Appeals Case No. 16CA280 Office of Administrative Courts Case
No. OS 2015-0014 Honorable Robert N. Spencer, Administrative
Authorized Representative of Petitioner: Matthew Arnold
Attorneys for Respondent Alliance for a Safe and Independent
Woodmen Hills: Hale Westfall, LLP Ryan R. Call Allan B. Hale
Richard A. Westfall Peter J. Krumholz Denver, Colorado.
Attorneys for Respondent Colorado Secretary of State: Cynthia
H. Coffman, Attorney General Matthew D. Grove, Assistant
Solicitor General Grant T. Sullivan, Assistant Solicitor
General Denver, Colorado.
Alliance for a Safe and Independent Woodmen Hills bought ads
and social-media coverage in an election. Campaign Integrity
Watchdog filed a complaint with the Colorado Secretary of
State against Alliance, alleging that Alliance failed to
comply with Colorado's campaign-finance laws requiring
political committees to report contributions and
expenditures. An Administrative Law Judge, or ALJ, ultimately
ordered Alliance to pay fines and register as a political
Alliance appealed the campaign-finance decision and defended
itself in a related defamation suit, racking up hundreds of
dollars in court costs and thousands in legal fees. Alliance
didn't report those legal expenses. So, Watchdog filed
another campaign-finance complaint, asserting that Alliance
had received contributions to pay the legal expenses and
should have reported both the contributions and the spending.
The ALJ concluded that the legal expenses were not reportable
as expenditures but were reportable as contributions.
Nonetheless, it ruled that the contribution-reporting
requirement was unconstitutional as applied to Alliance for
its post-election legal expenses. Watchdog appealed the
ALJ's determinations regarding the reporting
requirements, and the court of appeals asked us to take the
appeal directly under C.A.R. 50. We accepted jurisdiction, in
part because this case is related to another that we decide
today: Coloradans for a Better Future v. Campaign
Integrity Watchdog, 2018 CO 6, __P.3d__.
We affirm the ALJ's decision that the legal expenses were
not expenditures but were contributions under Colorado law.
First, section 1-45-108(1)(a)(I), C.R.S. (2017), requires
political committees to report spending only for express
advocacy for the election or defeat of a candidate, and legal
expenses do not constitute such express advocacy. Second,
because a payment to a third party for a political
committee's legal defense is a payment "for the
benefit" of the political committee, it counts as a
contribution under article XXVIII, § 2(5)(a)(II).
However, we reverse the ALJ's determination that the
reporting requirement is unconstitutional as applied to
Alliance for its legal expenses. The Supreme Court of the
United States has consistently upheld disclosure and
reporting requirements for political committees that exist
primarily to influence elections. It makes no difference here
that the contributions were not used to directly influence an
election-any contribution to a political committee that has
the major purpose of influencing an election is deemed to be
campaign related and thus justifies the burden of disclosure
Accordingly, we affirm the ALJ's decision in part and
reverse in part.
Facts and Procedural History
Alliance for a Safe and Independent Woodmen Hills
("Alliance") was incorporated in the run-up to a
2014 Woodmen Hills Metropolitan District Board of
Directors' election. Alliance raised funds and then sent
postcards and established a Facebook page, all undermining
one of the board candidates, Ron Pace. Campaign Integrity
Watchdog ("Watchdog"), Ron Pace, and another
Woodmen Hills resident filed complaints about Alliance with
the Colorado Secretary of State (the "Secretary")
under article XXVIII, section 9(2)(a) of the Colorado
Constitution. Watchdog alleged, among other things, that
Alliance should have but failed to (1) register as a
political committee and (2) report certain contributions and
expenditures. As required, the Secretary referred the
complaints to the Office of Administrative Courts, where they
An Administrative Law Judge ("ALJ") held a hearing
and then decided that Alliance had violated the Fair Campaign
Practices Act, §§ 1-45-101 to -118, C.R.S. (2017)
("FCPA"), by failing to (1) register as a political
committee and (2) file contribution and expenditure reports.
The ALJ fined Alliance $9650 and ordered it to register and
file the missing reports. Alliance filed a notice of appeal
and several motions, but eventually withdrew its appeal.
Meanwhile, Mr. Pace had also sued Alliance and other
defendants for defamation and negligence based on
Alliance's campaign efforts. After several months of
litigation, the district court granted Alliance's motion
to dismiss the suit and awarded Alliance attorney fees.
Alliance submitted a bill of fees and costs claiming about
$42, 000 in attorney fees, supported by a law firm's
billing statements showing charges and payments for defending
the defamation case. The source of the payments had been
redacted from the copies of the statements submitted.
Next, Watchdog filed the complaint at issue here, arguing
Alliance (1) should have but failed to report its legal
expenses for appealing the first ALJ decision and for
defending the defamation case as contributions, (2) should
have but failed to report those same expenses as expenditures
or disbursements, and (3) had exceeded the contribution limit
for political committees. The complaint was referred to an
ALJ, and the Secretary intervened to submit a brief in
support of Alliance.
First, the ALJ considered whether Alliance was required to
report the legal expenses as a contribution. Watchdog pointed
out that the constitution counts as a contribution
"[a]ny payment made to a third party for the benefit of
any . . . political committee, " Colo. Const. art.
XXVIII, § 2(5)(a)(II), and it argued that payments to
the court and the law firm as part of Alliance's legal
defense fit the plain language of the definition. Warning of
constitutional problems, Alliance and the Secretary asked the
ALJ to construe the provision narrowly to include only
payments made for the purpose for which the political
committee was formed-influencing elections. They argued that
post-election legal expenses do not serve that purpose.
The ALJ concluded that the provision was not susceptible of
Alliance's narrow construction and held that the
definition applied to the legal expenses, but it ruled for
Alliance all the same. It held that requiring Alliance to
report post-election legal expenses as contributions would
violate Alliance's First Amendment rights under the
United States Constitution. For the same reason, the ALJ
concluded that a contribution cap was unconstitutional as
applied to Alliance's post-election legal expenses.
Therefore, Alliance was not required to report the legal
expenses as a contribution.
Nor, the ALJ held, was Alliance required to report the legal
expenses as expenditures. The constitution defines
"expenditure" narrowly as spending "for the
purpose of expressly advocating the election or
defeat of a candidate." Colo. Const. art. XXVIII, §
2(8)(a) (emphasis added). And, as the ALJ noted, express
advocacy under section 2(8)(a) has a still narrower meaning:
"speech that explicitly advocates for the election or
defeat of a candidate through the use of the 'magic
words' set out in [Buckley v. Valeo, 424 U.S. 1,
44 n.52 (1976)] or substantially similar synonyms."
Colo. Ethics Watch v. Senate Majority Fund, LLC,
2012 CO 12, ¶ 41, 269 P.3d 1248, 1259. The ALJ concluded
that Alliance's spending for legal expenses after the
election "was clearly not for the purpose of expressly
advocating the election or defeat of a candidate."
Watchdog appealed the ALJ's determinations regarding the
reporting requirements,  and the court of appeals asked us to
accept the case directly under C.A.R. 50. We accepted
jurisdiction, in part because this case is related to another
case for which we had already granted certiorari,
Coloradans for a Better Future v. Campaign Integrity
Watchdog, 2018 CO 6. Both involved the ...