Lobbyists Sue to Remove June 2010 Ballot Measure

A group of lobbyists are suing to remove a measure from the June 2010 that would tax them to create a fund to help publicly finance candidates for the office of Secretary of State.

Plaintiffs, which include the tiny non-profit Jericho: A Voice for Justice and the massive California Professional Firefighters, argue that the tax unfairly singles out lobbyists and violates their right to freedom of political expression.

“If (this measure) is allowed to appear on the ballot and is approved by voters, the illegal tax will go into effect immediately and Petitioners and others similarly situated will be required to either pay a blatantly unconstitutional tax … or stop engaging in protected First Amendment activity,” the lawsuit concludes.

“The First Amendment demands that no person have to face that Hobson’s Choice.”

Filed in Sacramento Superior Court the lawsuit is currently scheduled for a November 20 although the Department of Justice has yet to file a responding brief. Lawmakers, who put the measure on the ballot, are also seeking a delay in the hearing according to Bell, McAndrews & Hiltack, the lawyers for the lobbyists. 

Courts are reluctant to remove items like initiatives placed on the ballot by voters prior to an election. But the lobbyists’ lawyers say that because this is a measure placed on the ballot by legislators that stricter degree of scrutiny doesn’t apply.

The lawsuit centers on AB 583, a 2008 bill by Sen. Loni Hancock, a Berkeley Democrat. Under the bill, which requires voter approval to take effect, a new program would be created to offer public financing to candidates for Secretary of State. 

That public financing comes primarily from a new $700 bi-annual tax – Hancock’s bill calls it a “fee” – on lobbyists, lobbying firms and lobbyists employers.

The tax is flat so, as the lawsuit notes, Jericho, which reported lobbying expenditures of $7,627 during 2007 and 2008, would pay the same as the firefighters who reported $1.3 million in lobbying expenditures for the same period.

During that same legislative session, 1,239 persons were registered as lobbyists. There were 383 lobbying firms and 3,153 lobbyists employers, according to the Secretary of State’s website.

Lobbyists also question why they were singled out.  While lobbyists report their activities to the Secretary of State so do corporations, limited liability partnerships, notaries and domestic partners, among others. The measure imposes no “fee” on any of the other groups.

Along with the alleged violation of their right of political expression, the lobbyists say the ballot measures violates Article I of the state’s constitution which contains a separate right to petition.

“The people have the right to instruct their representatives, petition government for redress of grievances and assembly freely to consult for the common good.”

Lobbying, as defined by California’s Political Reform Act, involves both of those protected activities, free speech and petition, the lawsuit says.

Therefore, they argue, a tax singling out lobbyists to raise money for a purpose other than regulation of lobbying is a “significant interference with protected free speech and petition rights” – significant enough that Hancock’s measure should be removed from the June ballot.

“The reason that the mere placement of the proposed legislation on the ballot violates free speech and petition rights is that the placement completes the act of unconstitutionality empowering the majority to determine whether the government will infringe upon a group’s preserved rights,” the lawsuit says.

Eight years ago, the Vermont Supreme Court struck down a 5 percent tax imposed on the expenditures of lobbyists and lobbyist employers. The money was be used for public financing pf the campaigns for candidates for governor and lieutenant governor.

“In singling out and burdening interests protected by the First Amendment, the lobby tax violates the United States Constitution,” the Vermont court concluded.

And, the lawsuit argues, if the court acts soon, the Legislature has until January 28 to put a less legally deficient measure on the June ballot or until June 24 if they wish to place a measure on the November 2010 ballot.

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