FREDERICK M. BOSS DEPUTY ATTORNEY GENERAL ELLEN F. ROSENBLUM ATTORNEY GENERAL DEPARTMENT OF JUSTICE Justice Building 1162 Court Street NE Salem, Oregon 97301-4096 Telephone: (503) 378-6002 October 4, 2018 THIS DOCUMENT IS A CONFIDENTIAL COMMUNICATION FROM ATTORNEY TO CLIENT Stephen Trout Director, Elections Division Of?ce of Secretary of State Dennis Richardson 225 Capitol St. NE, Suite 501 Salem, OR 97301 Misha Isaak General Counsel Of?ce of Governor Kate Brown 900 Court St. NE #254 Salem, OR 97301 Re: Elections Division Case No. 18-113 Dear Mr. Trout and Mr. Isaak: On July 25, 2018, a complaint was ?led with the Elections Division alleging violations of ORS 260.575, an Oregon election statute. The complaint refers to news reports from July 2018 regarding proposed initiative petitions 25, 31 and 37. The complaint alleges that the proponents of IP 25 agreed to abandon the proposal, and that in exchange Nike, Inc. agreed to create a political action committee (PAC), and fund it with $100,000, for the purpose of opposing IP 31 and IP 37. The complaint further alleges that the governor facilitated this agreement between Nike and the proponents of IP 25. It does not allege that she received any remuneration for her efforts. On its face, the complaint appears to allege conduct that implicates the free expression provisions of the Article I, Section 8, of the Oregon Constitution. By letter dated July 27, the Elections Division forwarded the complaint to Senior Assistant Attorney General Kristen Hoffmeyer of the Oregon Department of Justice (DOJ) Criminal Justice Division. The letter requested her assistance in determining, pursuant to ORS 260.3458 whether an election law violation had occurred. On August 8, Criminal Justice Division Chief Counsel Michael Slauson informed the Elections Division of his conclusion that a Stephen Trout Misha Isaak October 4, 2018 Page 2 criminal investigation was not warranted, and referred the matter back to the Elections Division. The Elections Division has now commenced active investigation of this matter. The allegations under investigation implicate signi?cant free speech issues under Article I, Section 8, of the Oregon Constitution. They also implicate the appropriate enforcement of Oregon?s election laws. To help reconcile these important state policies, and consistent with our obligation to establish the state?s legal policy, we are issuing this letter advising of legal limits on the application of ORS 260.575. Speci?cally, we conclude that Article 1, Section 8, of the Oregon Constitution prohibits applying ORS 260.5750) or (2) to a circumstance in which the only consideration exchanged is constitutionally-protected expression with respect to a ballot measure that was initiated in good faith. The complaint in this matter, viewed in the light most favorable to the complainant, appears to allege such a circumstance. We are not aware of any additional evidence or facts beyond those alleged in the complaint and supporting materials. To the extent we discuss the allegations in this letter, our comments should be understood accordingly. Short Question Does ORS 260.575 prohibit a person from facilitating an arrangement under which the only arguable ?consideration? exchanged consists of the following: (1) Proponents of an initiative petition initiated in good faith effectively abandon the measure; and (2) Another party lawfully creates, funds and operates a PAC for the purpose of opposing separate ballot measures that the ?rst party opposes? Short Answer It is clear that both parts of such a bargain constitute protected speech under Article I, Section 8, of the Oregon Constitution. Each party is agreeing to either express, or refrain from expressing, support for a political cause. Encouraging the parties to reach such a political agreement is also protected speech. As a result, we conclude that ORS 260.575 cannot prohibit efforts to broker such an agreement when no consideration Other than that which constitutes political expression is exchanged. Discussion Statutory Text The statute at issue, ORS 260.575, is entitled ?Use of threats and intimidation for purpose of extortng money.? In its entirety, it reads as follows: No person, for any consideration, shall: Stephen Trout Misha Isaak October 4, 2018 Page 3 (1) Offer, propose, threaten or attempt to sell, hinder or delay any part of an initiative, referendum or recall petition. (2) Offer, propose or threaten to desist from beginning, promoting, circulating, or soliciting signatures to, any initiative, referendum or recall petition. (3) Offer, propose, attempt or threaten in any manner to use an initiative, referendum or recall petition or any power of promotion or opposition concerning such petition for extortion, blackmail or private intimidation of any person. Our opinion addresses only ballot measures initiated in good faith. It certainly is not addressed to circumstances in which any party is pursuing ?extortion, blackmail or private intimidation.? Nothing of that nature has been alleged. Accordingly, our analysis is limited to the ?rst and second subsections of ORS 260.575. Those subsections prohibit various offers, proposals and threats (and, in the ?rst subsection, attempts) with respect to the initiative and referendum process that are made ?for any consideration.? In contrast to the title of the statute, the subsections could be interpreted very broadly indeed. But their permissible application is constrained by Article 1, Section 8, of the Oregon Constitution. Constitutional Limitations Article 1, Section 8, of the Oregon Constitution signi?cantly limits government restrictions on speech: No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject Whatever; but every person shall be responsible for the abuse of this right. Oregon courts have consistently and repeatedly interpreted this provision to provide robust protections for speech, including political speech. In Vannatta v. Keisling, the Oregon Supreme Court speci?cally stated that Article 1, Section 8, protects ?expressions of support for candidate or cause,? including campaign expenditures and contributions to campaigns.1 The Oregon Supreme Court?s methodology for determining whether regulation of speech is consistent with the limits of Article I, Section 8, was established in State v. Robertson}2 It entails determining which of three categories the particular regulation falls into, and analyzing the regulation accordingly: I 324 Or 514, 521?522 (1997). 2 293 01? 402 (1982). Stephen Trout Misha Isaak October 4, 2018 Page 4 This court has described the Robertson framework as consisting of three categories. Under the ?rst category, the court begins by determining whether a law is ?written in terms directed to the substance of any ?opinion? or any ?subject? of communication.? If it is, then the law is unconstitutional, unless the scope of the restraint is ?wholly confined within some historical exception that was well established when the first American guarantees of freedom of expression were adopted and that the guarantees then or in 1859 demonstrably were not intended to reach.? If the law survives that inquiry, then the court determines whether the law focuses on forbidden effects and ?the proscribed means [of causing those 1 effects] include speech or writing,? or whether it is ?directed only against causing the forbidden effects.? If the law focuses on forbidden effects, and the proscribed means of causing those effects include expression, then the law is analyzed under the second Robertson category. Under that category, the court determines whether the law is overbroad, and, if so, Whether it is capable of being narrowed. If, on the other hand, the law focuses only on forbidden effects, then the law is in the third Robertson category, and an individual can challenge the law as applied to that individual's circumstances.3 State v. Babson. Under the ?as-applied? analysis governing laws in the third Robertson category, ?the question is whether the law was applied so that it did, in fact, reach privileged communication?? Analysis For purpose of this opinion, we assume that ORS 260.575 is a generally valid regulation, and evaluate only whether it can permissibly be interpreted to apply to an agreement like the one alleged in the complaint. In other words, we assess whether applying ORS 260.575 to such an agreement would ?reach privileged communication.? We have no dif?culty concluding that applying ORS 260.575 to such an agreement would punish protected expression in violation of Article 1, Section 8. As we previously observed, ORS 260.575 applies only when ?any consideration? is exchanged. As we will now explain, to the extent that an agreement like the one alleged in the complaint involves the receipt of any consideration at all, that consideration consists entirely of expression that is protected by Article 1, Section 8.5 As a result, if applied to such an agreement, ORS 260.575 would ?reach privileged communication.? 3 State v. Babson, 355 Or 383, 390-391 (2014) (internal citations omitted). 4 City of Eugene v. Miller, 318 Or 480, 490 (1994) 5 It is unclear that the person brokering such a deal receives any consideration at all. At most, a governor brokering that deal may bene?t from some political goodwill. But political support for the governor is not something that the state can regulate consistent with Article 1, Section 8. Stephen Trout Misha Isaak October 4, 2018 Page 5 One arguable element of consideration entails the proponents of a measure abandoning their pursuit of it. Pursuing an initiative petition is clearly a protected ?expression of support for candidate or cause? within the meaning of Vannal?z?a v. Keislz'ng. We do not believe that the state can compel an advocate to continue his or her advocacy, any more than it can require political advocacy in the ?rst place. Consequently, a decision to effectively abandon an initiative petition that was initiated in good faith is protected by Article 1, Section 8. The second arguable element of consideration entails the lawful creation, funding and operation of a PAC for the purpose of advocating against other measures. Consistent with Vannatta v. Keisling, both the contribution to the PAC and the expenditure of funds by the PAC constitute ?expressions of support for cause.? A decision to create and fund such a PAC is protected by Article 1, Section 8. Facilitating such an agreement would entail attempting to persuade the various interested parties that the deal should be struck. And the striking of such a deal is a political outcome. Advocating for that outcome is ?expressions of support for cause,? and protected by Article 1, Section 8. In other words, applying ORS 260.575 to a circumstance like that described in the complaint would effectively punish expression that is protected by Article 1, Section 8 and only punish such expression. We conclude that the statute cannot be permissibly applied in such a manner. Sincerely, FREDERICK M. BOSS Deputy Attorney General 9208451