No on EE—A Bad Deal for Colorado, Issue Committee v. Beall.
2024 COA 79. No. 22CA2245. First Amendment Freedom of Speech—Fair Campaign Practices Act—Disclaimer Statement—Registered Agent Disclosure—Strict Scrutiny—Substantial Relation Test.
August 1, 2024
No on EE—A Bad Deal for Colorado, Issue Committee (No on EE) is an “issue committee” as defined in the Colorado Constitution and the Fair Campaign Practices Act. No on EE was formed in 2020 to oppose Proposition EE, a statewide tobacco and nicotine tax measure that was to be on the November 2020 ballot. No on EE spent several million dollars on election-related communications opposing Proposition EE during the 2020 election cycle. Initially, No on EE’s communications included its name as the entity paying for the communications but did not identify its registered agent. A citizen filed a campaign finance complaint with the Colorado Secretary of State alleging that No on EE was violating CRS § 1-45-108.3(1) by failing to disclose its registered agent’s name on its election-related communications. No on EE changed its communications to include its registered agent’s name immediately upon receiving the complaint. An administrative law judge (ALJ) issued an initial decision finding that No on EE had violated the registered agent disclosure requirement and imposed a $10,000 fine. Neither party filed exceptions to the order. The Deputy Secretary of State, on his own motion, then affirmed the ALJ’s factual findings but modified the penalty by increasing it to $30,000, reasoning that $10,000 was insufficient to deter future unlawful conduct. No on EE sought review in district court, which affirmed the final agency order.
On appeal, No on EE argued that the requirement that an issue committee disclose the name of its registered agent in covered election-related communications to the voting public violates the First Amendment on its face. It is settled law that such a disclosure requirement can pass a First Amendment challenge only if it survives strict scrutiny and is narrowly tailored to the government’s asserted interest in requiring the disclosure. The strict scrutiny standard requires “a substantial relation between the disclosure requirement and a sufficiently important governmental interest.” Here, the district court found that the state has an informational interest in providing voters with more information about the person speaking and that the disclosure requirement furthers this interest. But defendants failed to show that knowing the name of an issue committee’s registered agent would materially assist voters to the extent required by the “substantial relation” test. Thus, even assuming that this purported informational interest is “important,” there is no “substantial relation” between the registered agent disclosure requirement and that interest. Accordingly, the court of appeals held that § 1-45-108.3(1) violates the First Amendment to the US Constitution insofar as it requires an issue committee to disclose the name of its registered agent in election-related communications to the public.
The judgment was vacated and the case was remanded to the deputy secretary to dismiss the complaint.