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Nelson v. Promising Future

December 30, 2008

SECRETARY OF STATE, CHRIS NELSON, PLAINTIFF AND APPELLANT,
v.
PROMISING FUTURE, INC., AND ROGER W. HUNT, DEFENDANTS AND APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA HONORABLE KATHLEEN K. CALDWELL Judge.

The opinion of the court was delivered by: Sabers, Justice.

ARGUED SEPTEMBER 29, 2008

[¶1.] After Promising Future, Inc. (PFI) refused to indentify the unnamed third party who gave it $750,000, which in turn was given to South Dakotans for 1215/VoteYesforLife.com (VoteYesforLife), Secretary of State Chris Nelson (Secretary) filed a declaratory judgment action mandating the disclosure of the unnamed third party's identity as required by SDCL 12-25-19.1 and 12-25-13.1. On summary judgment, the circuit court found that Defendants' conduct did not meet the definition of a ballot question committee, and therefore dismissed the case. We reverse and remand.

FACTS

[¶2.] PFI is a for-profit South Dakota corporation formed September 14, 2006,*fn1 by an unnamed third party and Roger W. Hunt (Hunt).*fn2 The unnamed third party, who is PFI's sole shareholder, provided PFI with $750,000. Thereafter, PFI made three $250,000 contributions to VoteYesforLife.*fn3

[¶3.] On November 3, 2006, the Secretary informed Defendants that SDCL 12-25-19.1 and 12-25-13.1 required them to file campaign finance reports setting forth the name, address, and place of employment of any individual who provided funds to PFI. Defendants filed pre-election and supplemental campaign finance reports under protest which identified the $750,000 PFI gave to VoteYesforLife. However, Defendants refused to disclose the identity of the source of money given to PFI. The Secretary filed a declaratory judgment action, asking the court to declare that Defendants formed a ballot question committee, and therefore mandate the disclosure of the unnamed third party's identity.

[¶4.] Defendants filed a motion to dismiss, which was denied. Upon filing their answer, Defendants filed a motion for judgment on the pleadings or alternatively, for summary judgment. The circuit court granted summary judgment to Defendants after finding that "the actions of the Defendants and the unnamed third party failed to create a ballot question committee under then SDCL 12-25-1(1A)." The Secretary appealed, raising the following issue:

Whether Hunt, the unnamed third party, and PFI formed a ballot question committee under South Dakota law.

STANDARD OF REVIEW

[¶5.] In Rotenberger v. Burghduff, we set forth the standard of review for statutory interpretation and application:

Statutory interpretation and application are questions of law, and are reviewed by this Court under the de novo standard of review. Statutes are to be construed to give effect to each statute and so as to have them exist in harmony. It is a fundamental rule of statutory construction that the intention of the law is to be primarily ascertained from the language expressed in the statute. . . . "We give words their plain meaning and effect, and read statutes as a whole, as well as enactments relating to the same subject." 2007 SD 7, ¶8, 727 NW2d 291, 294 (additional and internal citations omitted).

[¶6.] Whether Hunt, the unnamed third party, and PFI formed a ballot question committee under South Dakota law.

[¶7.] The Secretary claims the circuit court erred in characterizing the funds PFI gave to VoteYesforLife as "contributions," and thereby concluding that a ballot question committee was not formed. The Secretary argues that Defendants formed a ballot question committee, and subsequently violated SDCL 12-25-19.1 and 12-25-13.1 (contributor identification statutes), by refusing to identify the unnamed third party. Defendants contend summary judgment was appropriate in light of the Secretary's improper interpretation of the disclosure statutes. Furthermore, they claim the circuit court's rationale: because the word "contribution" is not included in the statutory language, Defendants' contributions to PFI did not form a ballot question committee, and therefore, the unnamed third party's identity need not be disclosed. We disagree.

[ΒΆ8.] Defendants' principal argument is that the complaint cannot state a cause of action because the Secretary's interpretation of the statutes requires disclosure upon the Secretary's determination of Defendants' subjective intent to make a contribution to a ballot question committee. Defendants contend that the statutes cannot be construed to create a ballot question committee every time, in the judgment of the Secretary, any two or more individuals collaborate with intent to contribute to such a committee. Defendants point out that such a construction would absurdly make everyone (such as husbands and wives or ...


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