Opinion
Case No. 04-1170-KI.
September 2, 2004
Gregory W. Byrne, Portland, Oregon, Attorney for Plaintiffs.
David E. Leith, Department of Justice, Salem, Oregon, Attorney for Defendants.
OPINION AND ORDER
Before the court are plaintiffs' motion for preliminary injunction (#3) and defendants' motion to dismiss (#17). Oral argument on these motions was held on September 1, 2004. For the reasons set forth below, I deny the motion for preliminary injunction and grant the motion to dismiss.
BACKGROUND
This action involves Ballot Measure 38, an initiative that will be submitted to Oregon voters on November 2, 2004. Measure 38 would abolish the State Accident Insurance Fund Corporation ("SAIF") and dedicate its surplus to the Oregon Priorities Fund.
When a state measure involves (1) expenditure of public money by the state; (2) reduction of expenditure of public money by the state; (3) reduction of state revenues; or (4) raising of funds by the state by imposing any tax or incurring any indebtedness, a committee consisting of four high-level state officials must produce an estimate of the measure's financial impact. ORS 250.125(1). Specifically, the committee shall estimate:
The committee consists of the Oregon Secretary of State, State Treasurer, Director of the Department of Administrative Services, and Director of the Department of Revenue.
[T]he amount of direct expenditure, direct reduction of expenditure, direct reduction in state revenues, direct tax revenue or indebtedness and interest which will be required to meet the provisions of the measure if it is enacted. The estimate shall state the recurring annual amount involved or, if the measure does not involve a recurring annual amount, the total amount.Id.
In addition, the committee must provide a similar estimate regarding financial impacts on local governments. ORS 250.125(2). The estimates must be printed in the voters' pamphlet and on the ballot unless the measure involves only state agency expenses not exceeding $100,000 per year. ORS 250.125(3).
Oregon statutes also set forth the procedures by which the committee is to prepare, file, and receive public input and suggested changes regarding financial impact estimates. See ORS 250.127. Significantly, Oregon statutes also limit judicial review of financial impact estimates:
Any person alleging that an estimate required under ORS 250.125 was prepared, filed or certified in violation of the procedures specified in ORS 250.125 or 250.127 may petition the Supreme Court seeking that the required procedures be followed and stating the reasons the estimate filed with the court does not satisfy the required procedures. No petition shall be allowed concerning the amount of the estimate or regarding whether an estimate should be prepared.
ORS 250.131(1) (emphasis added).
Defendants prepared the Financial Impact Estimate for Measure 38 (the "Estimate") pursuant to ORS 250.125 and filed it on August 4, 2004. In their motion for preliminary injunction, plaintiffs ask the court to enjoin Bill Bradbury, as Oregon Secretary of State, from printing the Estimate on the ballot and in the voters' pamphlet.
Plaintiffs provided the following information (which appears to be undisputed) regarding the process by which the Estimate was prepared, made available for comment, and filed:
On July 23, 2004, the Oregon Secretary of State certified that [Measure 38] had gained enough voter signatures to be placed on the ballot for the November 2, 2004 general election. Pursuant to ORS 250.127, defendants were directed as of that date to begin preparing the estimate of financial impact for the measure, and to file it with the Secretary of State not later than the 99th day before the election. They were then required to hold a hearing in Salem not later than the 95th day before the election "to receive suggested changes to the estimates or other information." ORS 250.127(2). Defendants held hearings in late July and early August, at which they received written and oral testimony, including testimony from plaintiff Gilliam. They were required to "consider suggestions and any other information submitted," and were permitted to file revised estimates with the Secretary of State not later than the 90th day before the election. ORS 250.127(3). The Estimate for Measure 38 was filed on August 4, 2004.
Plaintiffs' Memorandum in Support of Motion for Preliminary Injunction, p. 9.
Financial impact estimates must be delivered to county clerks by the 61st day before the election in order to ensure that they will be included in the printing of ballots. ORS 250.127(8) ("If the estimates are not delivered to the county clerk by the 61st day before the election, the county clerk may proceed with the printing of the ballots.") That date is September 2, 2004 (i.e., the date of this Opinion and Order). The other pertinent date for purposes of determining the urgency of plaintiff's motion for preliminary injunction is the date on which the voters' pamphlet will be printed. That date is September 13, 2004.
LEGAL STANDARDS
"The standard for granting a preliminary injunction balances the plaintiff's likelihood of success against the relative hardship to the parties." Clear Channel Outdoor Inc. v. City of Los Angeles, 340 F.3d 810, 813 (9th Cir. 2003). The plaintiff must demonstrate either: "(1) a likelihood of success on the merits and the possibility of irreparable injury; or (2) that serious questions going to the merits were raised and the balance of hardships tips sharply in its favor." Id. "These two alternatives represent extremes of a single continuum, rather than two separate tests. . . . Thus, the greater the relative hardship to [the party seeking the preliminary injunction,] the less probability of success must be shown." Id. (citation and internal quotations omitted).
DISCUSSION
Through this lawsuit, plaintiffs challenge the Estimate on the ground that it is materially false and will mislead voters. Specifically, plaintiffs take issue with these statements included in the Estimate:
The measure would reduce state revenue by approximately $405 million per year and would reduce state expenditures by approximately $301 million per year due to the elimination of SAIF.
The measure would require . . . an additional one-time expenditure of $2.2 billion to $2.4 billion.
Complaint, Exh. B.
According to plaintiffs, "[t]hese two passages assert that rather than providing the state with a financial benefit[,] Measure 38 will saddle the state with a huge cost — up to $2.4 billion initially, and a recurring $100 million plus loss of revenue annually thereafter. These statements are patently false." Plaintiffs' Memorandum in Support of Motion for Preliminary Injunction, p. 10. On this basis, plaintiffs allege that defendants, under color of state law (ORS 250.125), are subjecting the plaintiffs to a deprivation of their right, under the First Amendment, to accurately explain Measure 38's financial consequences to the public, and their right to fundamental fairness in an election, guaranteed by the Due Process Clauses of the Fifth and Fourteenth Amendments. Id. at p. 3; Complaint, ¶¶ 18-20.
I. Jurisdiction
In support of their motion to dismiss, defendants assert that plaintiffs' Complaint is limited, if not precluded, by the Eleventh Amendment. Specifically, to the extent that plaintiffs seek to compel defendants to comply with the provisions of ORS 250.125, defendants argue that this court lacks jurisdiction. I agree with defendants that plaintiffs are precluded from seeking injunctive relief in this court to compel state officials to follow state law. See Pennhurst State School and Hospital v. Halderman, 465 U.S. 89, 106 (1984) (Ex Parte Young doctrine, which allows suits for injunction in federal court in certain circumstances against state officials, is "inapplicable in a suit against state officials on the basis of state law.") As plaintiffs point out, however, they are not seeking to compel defendants to follow state statutes. Instead, they are alleging that, in the course of following those statutes, defendants violated plaintiffs' federal constitutional rights by filing false conclusions regarding Measure 38's financial impact.
II. Laches
Plaintiffs also move to dismiss the Complaint on the basis that it is barred by laches. I am sympathetic to this argument due to the fact that the delay in this dispute being resolved by a court was caused by plaintiffs initially filing in Marion County Circuit Court on August 9, 2004 (challenging the substance of the Estimate) and then voluntarily dismissing that case on August 23, 2004. Affidavit of David E. Leith, Exhs. 7, 10. Plaintiffs then filed in this court (asserting new federal constitutional claims) the same day that they dismissed their state lawsuit.
Plaintiffs took this circuitous route despite clear statutory and case law guidance that challenges to financial impact estimates are to be filed with the Oregon Supreme Court and, even in that forum, challenges based on the substance or amount of an estimate will not be entertained. ORS 250.131(1); Marbet v. Keisling, 314 Or. 223, 838 P.2d 580 (1992); Plaintiffs' Memorandum in Support of Motion for Preliminary Injunction, p. 19 ("Plaintiffs have no remedy under state law to require defendants to correct the Estimate.")
At best, it appears that plaintiffs could have filed a petition for writ of mandamus with the Oregon Supreme Court.See State ex rel. Marbet v. Keisling, 314 Or. 235, 838 P.2d 585 (1992) (court reserved its authority to review the substance of a financial impact estimate pursuant to its original mandamus jurisdiction).
Even with an expedited briefing and hearing schedule, this court is now faced with the challenge of resolving this matter one day before the Secretary of State is to certify the ballot. More importantly, defendants would be prejudiced by a ruling in plaintiffs' favor at this late date, as it is now too late for the committee to revisit its conclusions contained in the Estimate. The only practical relief available to the court at this point would be to strike the Estimate from the ballot and voters' pamphlet and, accordingly, deprive voters of any financial impact estimate and create a void that would render already-submitted voters' pamphlet arguments (that refer to the Estimate) nonsensical. See Leith Aff., Exh. 12 (containing argument in favor and argument in opposition to Measure 38 to be included in the voters' pamphlet).
While defendants have articulated a solid laches argument, I decline to dismiss plaintiffs' claims or deny plaintiffs' motion for preliminary injunction on that basis. Instead, as explained below, I find that plaintiffs have not shown likelihood of success on the merits as required for a preliminary injunction to issue and have not stated a claim upon which relief can be granted.
III. The Merits of Plaintiffs' Claims
Plaintiffs rely almost exclusively on two related opinions from this district by Chief Judge Ancer L. Haggerty. Horton v. Multnomah County, Civil No. 03-1257-HA (Oct. 17, 2003); Caruso v. Yamhill County, Civil No. 03-1731-HA (Jan. 14, 2004).
In both cases, the plaintiffs raised constitutional challenges to ORS 280.070(4)(a). Under that statute, any measure authorizing the imposition of a local option tax, no matter how small, must include the following text in the measure's ballot title: "This measure may cause property taxes to increase more than three percent." Judge Haggerty found that, in the context of the tax measures at issue in Horton and Caruso, such language was inherently misleading.
In analyzing the merits of the cases, Judge Haggerty focused on the statute's impact on the First Amendment "right to communicate to voters," the First Amendment "right to be free of coerced speech", and the due process right (under the Fourteenth Amendment) to have fundamental fairness in elections. As to the First Amendment challenges, he concluded that, by requiring the title of a measure to contain false and misleading language, the statute "offends the First Amendment and impedes the sponsors' opportunity to disseminate their views to the public." Caruso at 5 (citing Meyer v. Grant, 486 U.S. 414, 419 (1988)). Likewise, he found that the plaintiff's right to be free from coerced government-sponsored speech is violated by the statute.Caruso at 6.
In regard to the due process claim, Judge Haggerty concluded that "[t]he inherently misleading nature of the three percent warning `so upset[s] the evenhandedness of the referendum that it work[s] a patent and fundamental unfairness on the voters.'"Caruso at 11 (quoting National Audubon Society, Inc. v. Davis, 307 F.3d 835, 858 (9th Cir. 2002)). Again applying the applicable standard from National Audubon Society, Judge Haggerty further concluded that "the three percent warning would so mislead voters that they would be unable to decipher the subject of the [measure]." Caruso at 12.
I conclude that there are important differences between the facts of Horton and Caruso and this case and that those differences weigh against ruling in plaintiffs' favor. In this case, the state statutory scheme at issue does not impact the ballot title for Measure 38, thus reducing if not eliminating any concerns regarding interference with the proponents' right to communicate to voters or right to be free from coerced speech. These concerns are further allayed because we are dealing with a self-titled estimate of financial impact that plaintiffs can distance themselves from and attack through the arguments in favor of Measure 38 included in the voters' pamphlet or elsewhere. See, e.g., Leith Aff., Exh. 12, p. 2 (argument in favor of Measure 38 that takes issue with $2.2 billion expenditure in the Estimate). In short, I fail to see how the line between state speech and the speech of the proponents has been blurred by the statutory scheme requiring financial impact estimates (regardless of how erroneous the state speech might be in this instance).
Just as plaintiffs' First Amendment arguments can be rejected without examining whether the Estimate is, in fact, misleading, plaintiffs' due process claim is also clearly defective under the standard relied upon by plaintiffs and defendants. UnderNational Audubon Society, the applicable standard is as follows:
For such extraordinary relief to be justified, it must be demonstrated that the state's choice of ballot language so upset the evenhandedness of the referendum that it worked a "patent and fundamental unfairness" on the voters. Such an exceptional case can arise . . . only when the ballot language is so misleading that voters cannot recognize the subject of the amendment at issue.
* * *
As long as the citizens are afforded reasonable opportunity to examine the full text of the proposed amendment, broad-gauged unfairness is avoided if the ballot language identifies for the voter the amendment to be voted upon. Therefore, substantive due process requires no more than that the voter not be deceived about what amendment is at issue.National Audubon Society, 307 F.3d at 858 (quoting Burton v. State of Georgia, 953 F.2d 1266, 1269 (11th Cir. 1992)).
Based on my review of the materials submitted by the parties, including what is described as "the official ballot title for Measure 38" (Leith Aff., Exh. 13), I conclude that there is no risk that the Estimate will render the information included in the ballot and voters' pamphlet "so misleading that voters cannot recognize the subject" of the measure. National Audubon Society, 307 F.3d at 858. The summary of the measure and the explanatory statement (not to mention the full text of the measure), which accompany the Estimate, make abundantly clear what Measure 38 will do. In contrast, I can see how the inclusion of the three percent warning in the ballot title in Horton and Caruso arguably "would so mislead voters that they would be unable to decipher the subject of the [measure]." Caruso at 12.
CONCLUSION
Plaintiffs have failed to demonstrate that they are likely to prevail on the merits of their claims and have failed to state a claim upon which relief can be granted. Accordingly, plaintiffs' motion for preliminary injunction (#3) is DENIED and defendants' motion to dismiss (#17) is GRANTED.
IT IS SO ORDERED.