IN THE MISSOURI COURT OF APPEALS

WESTERN DISTRICT
REX A. SINQUEFIELD, et al., )
)
Respondents, )
)
v. (Cole) ) Appeal No. WD77056
)
1ASON KANDER, SECRETARY OF )
STATE and THOMAS SCHWEICH, )
STATE AUDITOR, )
)
Defendants, )
)
and )
)
TODD S. 1ONES and MISSOURI )
ROUNDTABLE FOR LIFE, )
)
Appellants. )
BRIEF ON APPEAL OF APPELLANTS TODD S. 1ONES
AND MISSOURI ROUNDTABLE FOR LIFE
D. John Sauer #58721
Clark & Sauer, LLC
7733 Forsyth Blvd., Suite 625
St. Louis, Missouri 63105
Phone: 314.814.8880
Facsimile: 314.332.2973
jsauerclarksauer.com
Attornev for Appellants Todd S. Jones
and Missouri Roundtable For Life
December 10, 2013
i
TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................................................ iv
JURISDICTIONAL STATEMENT ....................................................................... 1
STATEMENT OF FACTS .................................................................................... 2
POINTS RELIED ON...........................................................................................13
I. The trial court erred in holding that the Fiscal Note must be remanded to the
State Auditor Ior preparation oI a new Iiscal note, because the Fiscal Note
was not 'insuIIicient or 'unIair within the meaning oI 116.190.3,
RSMo., in that the Department oI Revenue`s submission that the Auditor
included in the Fiscal Note was a reasonable submission that properly
declined to Iorecast the proposal`s impact on state and local tax revenues. .13
II. The trial court erred in holding that the Fiscal Note Summary must be
remanded to the State Auditor Ior preparation oI a new Iiscal note summary,
because the Fiscal Note Summary was not 'insuIIicient or 'unIair within
the meaning oI 116.190.3, RSMo, in that the Auditor`s OIIice properly
exercised its discretion in discounting the speculative analysis oI the
proposal`s opponents regarding impact on state and local tax revenues, and
properly summarized the Fiscal Note by stating that the proposal`s impact on
state and local tax revenues was 'unknown. ..............................................13
INTRODUCTION ................................................................................................15
ii
STANDARD OF REVIEW ..................................................................................16
ARGUMENT........................................................................................................18
I. The trial court erred in holding that the Fiscal Note must be remanded to the
State Auditor Ior preparation oI a new Iiscal note, because the Fiscal Note
was not 'insuIIicient or 'unIair within the meaning oI 116.190.3,
RSMo., in that the Department oI Revenue`s submission that the Auditor
included in the Fiscal Note was a reasonable submission that properly
declined to Iorecast the proposal`s impact on state and local tax revenues. .18
II. The trial court erred in holding that the Fiscal Note Summary must be
remanded to the State Auditor Ior preparation oI a new Iiscal note summary,
because the Fiscal Note Summary was not 'insuIIicient or 'unIair within
the meaning oI 116.190.3, RSMo, in that the Auditor`s OIIice properly
exercised its discretion in discounting the speculative analysis oI the
proposal`s opponents regarding impact on state and local tax revenues, and
properly summarized the Fiscal Note by stating that the proposal`s impact on
state and local tax revenues was 'unknown. ..............................................24
A. The Auditor Properly Exercised Its Discretion To Determine That the
Ellinger Submission Was Speculative and Assign It Lesser Weight In
Preparing the Fiscal Note Summary. ........................................................25
iii
B. The Record Strongly Supports the Auditor`s Conclusion That the Ellinger
Submission Was Speculative, Because Its Speculative Nature Was Evident
From the Submission ItselI. ......................................................................28
C. The Circuit Court Plainly Erred In Holding That the Fiscal Note Summary
Must Include the Speculative Numbers oI the Ellinger Submission. .........32
D. The Circuit Court Plainly Erred In Holding That the Fiscal Note Summary
Must Include the Word 'Negative. .........................................................38
CONCLUSION ....................................................................................................42
iv
TABLE OF AUTHORITIES
Cases
Asher v. Carnahan,
268 S.W.3d 427 (Mo. App. W.D. 2008) ..........................................................39
Billington v. Carnahan,
380 S.W.3d 586 (Mo. App. W.D. 2012) ..........................................................39
Brown v. Carnahan,
370 S.W.3d 637 (Mo. banc. 2012) .............. 15, 16, 17, 20, 26, 27, 34, 35, 37, 39
Hancock v. Secv of State,
885 S.W.2d 42 (Mo. App. 1994) .....................................................................16
Missouri Municipal League v. Carnahan,
364 S.W.3d 548 (Mo. App. W.D. 2012) ..........................................................21
Missourians to Protect the Initiative Process v. Blunt,
799 S.W.2d 824 (Mo. banc 1990) .............................................................. 15, 17
Missouri Municipal League v. Carnahan,
303 S.W.3d 573 (Mo. App. W.D. 2010) .................................. 16, 27, 36, 38, 39
State ex rel. Human Socv of Mo. v. Beetem,
317 S.W.3d 669 (Mo. App. W.D. 2010) .................................................... 15, 42
v
Statutes
116.132, RSMo. .................................................................................................. 3
116.175, RSMo. ............................................................................... 25, 26, 27, 34
116.190, RSMo. ..................................................................... 1, 11, 13, 18, 24, 42
Other Authorities
Barbara Shelly, Rex SinqueIield`s new jobs program: More campaign spending,
The Kansas Citv Star (Aug. 15, 2013) available at
http://www.kansascity.com/2013/08/15/4412859/rexs-new-jobs-program-more-
campaign.html. ................................................................................................... 5
Editorial. Save-the-oxpeckers and other absurd arguments against campaign
monev limits, St. Louis Post-Dispatch (Aug. 20, 2013) ....................................... 5
Power Players: Missouri`s 17 largest political donors Irom 2008 to 2013, St. Louis
Beacon, at http://powerplayers.stlbeacon.org/ .................................................... 2
WEBSTER`S THIRD NEWINTERNATIONAL DICTIONARY UNABRIDGED (2002) ..........26
1
1URISDICTIONAL STATEMENT
This appeal arises Irom a Iinal judgment oI the Circuit Court Ior Cole
County, Missouri, holding that the Fiscal Note and Fiscal Note Summary prepared
by the Missouri State Auditor Ior Initiative Petition No. 2014-032 were insuIIicient
and unIair. The judgment arose Irom a lawsuit brought by PlaintiIIs-Respondents
Rex A. SinqueIield and Travis H. Brown ('Respondents) challenging the ballot
title language Ior the initiative petition pursuant to Section 116.190.1, RSMo.
Appellants Missouri Roundtable For LiIe and Todd S. Jones ('Appellants), who
are proponents oI the ballot initiative, intervened in the trial court as deIendants to
deIend the Iiscal note and Iiscal note summary statement. Thus, this Court has
jurisdiction over this appeal Irom a Iinal judgment regarding ballot title language
pursuant to Section 116.190.4, RSMo., and Missourians to Protect Initiative
Process v. Blunt, 799 S.W.2d 824, 826 & n.1 (Mo. banc 1990).
2
STATEMENT OF FACTS
This case involves a ballot title challenge brought by an extremely wealthy
citizen against a popular campaign Iinance reIorm proposal that threatens to curb
his political inIluence. PlaintiII-Respondent Rex A. SinqueIield is a billionaire
who has contributed the staggering Iigure oI $26.8 million oI his personal wealth
to Missouri politicians and campaigns since 2008.
1
Initiative Petition 2014-032
would impose reasonable contribution limitations on campaigns Ior statewide
political and judicial oIIice, and thus would sharply curtail Mr. SinqueIield`s
outsize personal inIluence in Missouri politics. This case represents Mr.
SinqueIield`s own personal campaign to derail the democratic process and keep
this initiative away Irom Missouri voters, who overwhelmingly support such
reasonable campaign contribution limits.
Appellant Todd S. Jones is the Deputy Treasurer Ior co-Appellant Missouri
Roundtable For LiIe, which is a proponent committee Ior the campaign Iinance
1
See Power Players: Missouri`s 17 largest political donors Irom 2008 to 2013, St.
Louis Beacon, at http://powerplayers.stlbeacon.org/ (all internet sources last visited
December 10, 2013) (based on review oI publicly available sources, identiIying
Mr. SinqueIield as the largest political donor in Missouri Irom 2008-2013, with
contributions oI $26.8 million, over Iive times greater than any other donor).
3
reIorm proposal in this case. On May 6, 2013, Mr. Jones submitted the ballot
proposal known as Initiative Petition 2014-032 to the Secretary oI State (the
'Initiative Petition). Appellants` Appendix ('App. App`x), at A24-A33. The
Initiative Petition proposes to amend the Missouri Constitution to impose
contribution limitations on campaigns Ior statewide political and judicial oIIice.
See id. Among other provisions, the Initiative Petition would impose a limit oI
$2,600 on any contribution '|t|o elect an individual to the oIIice oI governor,
lieutenant governor, secretary oI state, state treasurer, state auditor, attorney
general, oIIice oI state senator, oIIice oI state representative or any other state or
judicial oIIice. Id. at A25. It would also implement several other campaign
Iinance reIorms in Missouri, including a limit oI $25,000 Ior donations to political
parties. Id.
Pursuant to 116.132, RSMo., the Secretary oI State Iorwarded the
Initiative Petition to the Missouri State Auditor Ior preparation oI a Iiscal note and
Iiscal note summary. Legal File ('LF), at 314. Mr. Jon Halwes, the Director oI
Quality Control and Planning Ior the Auditor`s OIIice, prepared the Fiscal Note
and Fiscal Note Summary Ior the Initiative Petition. Transcript oI Oct. 23, 2013
Hearing ('Tr.), at 11. Mr. Halwes is a CPA and a certiIied government Iinancial
manager with 28 years oI experience in the Auditor`s oIIice. Tr. 59. His
4
qualiIications also include 'some expertise in auditing, accounting, budgeting, and
Iinancial reporting. Id.
When he received the Initiative Petition, Mr. Halwes Iollowed the standard
procedures used by the Auditor`s OIIice to prepare the Iiscal note. Tr. 12-13. He
Iorwarded the Initiative Petition to a 'standard list oI state and local governments
to request their views oI the proposal`s Iiscal impact. Tr. 12. He also 'posted the
petition on our website so the public could respond iI they wished to respond to
us. Tr. 13.
Mr. Halwes received responses Irom numerous state agencies, including the
Department oI Revenue, the Missouri Ethics Commission, and the Attorney
General`s OIIice. Tr. 14. As required by law, he reviewed these submissions to
ensure that they were 'complete and reasonable. Tr. 15. In this context, Mr.
Halwes deemed a submission to be 'complete iI the sender 'provided to us all the
inIormation that they intended to provide us. Tr. 15. He deemed a submission to
be 'reasonable iI the sender was 'addressing the issue that the proposal was
involved with. Tr. 15. In other words, all that was required Ior Mr. Hawles to
determine a submission to be 'reasonable was that 'the submission inIormation
addresse|d| the proposal itselI. Tr. 15. Mr. Halwes determined all submissions
Irom state entities to be complete and reasonable. Tr. 16.
5
Mr. Halwes also received a lengthy submission Irom a selI-identiIied
opponent oI the Initiative Petition, Marc H. Ellinger. See App. App`x, A40-A99.
2
The submission consisted primarily oI a ten-page analysis draIted and submitted by
Mr. Ellinger, who is not an economist or Iinancial expert, but is the attorney Ior
PlaintiIIs-Respondents Rex SinqueIield and Travis Brown in this case. Id. at A40-
A49. This submission (the 'Ellinger Submission) argued that campaign Iinance
reIorm would result in a decrease in campaign spending in Missouri, which would
putatively cause a decrease in state and local tax revenues Irom campaign
spending.
3
Id. at A40. In other words, the Ellinger Submission argued that
2
The Fiscal Note (Joint Exhibit 7), which includes the Ellinger Submission, was
received Irom the Circuit Court Clerk`s OIIice with three pages out oI order. The
pages designated LF 381-383 (App. App`x A97-A99) should actually have
appeared immediately aIter the page designated LF 371 (App. App`x A87).
3
This argument has been ridiculed in statewide media as 'one oI the silliest
political arguments you`ll ever see. Editorial. Save-the-oxpeckers and other
absurd arguments against campaign monev limits, St. Louis Post-Dispatch (Aug.
20, 2013); see also Barbara Shelly, Rex SinqueIield`s new jobs program: More
campaign spending, The Kansas Citv Star (Aug. 15, 2013) ('Only in Missouri
would someone propose big campaign contributions as a stimulus package.),
6
capping campaign contributions would result in less campaign spending, and less
campaign spending would result in the collection oI less sales and income taxes by
state and local governments. Id. The Ellinger Submission took Iigures Irom
Governor Nixon`s 2012 campaign and purported to extrapolate Irom these Iigures
to all other statewide campaigns Ior all Iuture years. Id. at A42-A48. It purported
to predict, with impossible precision, the actual Iiscal impact on state and local tax
revenues that would result Irom such anticipated decreases in campaign spending,
down to very last cent. Id. at A47-A48.
Though the Ellinger Submission attached an extremely lengthy and largely
irrelevant economic study oI presidential primary spending in other states, id. at
A50-A99, the ten-page analysis oI the Submission itselI did not purport to be
prepared or submitted by an economist. Rather, it was draIted and submitted by
the attorney Ior Respondents in this case. Id. at A39. In Iact, the Ellinger
Submission conceded that 'there has not been a comprehensive study regarding the
Iiscal impact oI state elections on Missouri state and local governments. Id. at
A41. Accordingly, the Ellinger Submission included no analysis oI the economic
impact oI campaign spending in Missouri prepared by an economist or other
expert.
available at http://www.kansascity.com/2013/08/15/4412859/rexs-new-jobs-
program-more-campaign.html.
7
Reviewing the Ellinger Submission, Mr. Halwes Iound it to be 'complete.
Tr. 64. He also Iound it to be 'reasonable, in the limited sense that it was
'addressing the issue that the proposal was involved with, namely campaign
Iinance reIorm. Tr. 64, 13. He did not Iind it to be 'reasonable in the sense oI
analytically convincing, however. On the contrary, he Iound its analysis to be
'based on speculation and 'speculative. Tr. 55, 79. Mr. Halwes repeatedly
questioned one critical assumption in the Ellinger Submission, namely that the
imposition oI contribution limitations on Governor Nixon`s 2012 campaign would
have resulted in a directly proportional reduction oI the Governor`s campaign
revenues. Tr. 50, 51, 79-80, 85-86. Mr. Halwes observed that candidates such as
Governor Nixon would naturally pursue alternative methods oI raising comparable
campaign Iunds without relying as heavily on big donations. Under campaign
Iinance reIorm, Mr. Halwes noted, 'how you go about collecting your money or
operating your business or running your campaign is going to change, making it
impossible to predict the actual impact oI campaign Iinance reIorm on campaign
revenues with any precision. Tr. 52.
In his testimony, Mr. Halwes identiIied numerous other speculative
assumptions in the Ellinger Submission. He acknowledged that the Ellinger
Submission did not even discuss 'the possibility that money not contributed to
campaigns might otherwise be expended in the Missouri economy and thus
8
'might generate sales and income tax revenues Ior state and local governments in
other ways. Tr. 80. Likewise, the Ellinger Submission did not 'provide any
analysis oI the possibility that eliminating the big dollar contributors might
encourage more smaller contributors to contribute to statewide elections, thus
undercutting the Submission`s predictions. Tr. 81. Mr. Halwes also acknowledged
that the Ellinger Submission sought to extrapolate directly Irom the election year
oI 2012 to non-election years, without even 'discuss|ing| the Iact or possibility that
there is much lower levels oI campaign spending in non-election years, and that
this was yet another unreasonable assumption oI the Ellinger Submission. Tr. 82.
Similarly, Mr. Halwes agreed that the Ellinger Submission 'merely
extrapolates Irom Governor Nixon`s numbers to the numbers Ior every other
statewide campaign in the State oI Missouri Ior that year, Tr. 85, even though it
'would make logical sense that 'a campaign Ior judicial oIIice or a campaign Ior
Iirst term state representative might have very diIIerent proportions oI spending
than a statewide campaign Ior governor. Tr. 86. Likewise, Mr. Halwes
acknowledged that the Ellinger Submission did not even 'discuss the possibility or
even the likelihood that smaller campaigns Ior other statewide oIIices might have a
much smaller proportion oI big dollar donations than Governor Nixon`s
campaign. Tr. 87.
9
Furthermore, Mr. Halwes` testimony identiIied a series oI additional
unjustiIied assumptions that appeared openly on the Iace oI the Ellinger
Submission. For example, the Ellinger Submission 'openly assume|d| that 75
percent oI media spending would transIer to corporate income, without any
justiIication Ior that assumption. Tr. 88. Similarly, the Elllinger Submission
'assum|ed| that halI oI media spending is paid out to employees and salaries,
without any justiIication Ior that assumption. Tr. 88-89. Again, the Ellinger
Submission simply assumed that halI oI a category listed as 'other expenditures
by Governor Nixon`s campaign was taxable, without any justiIication Ior that
assumption. Tr. 89. All these assumptions were material to the Ellinger
Submission`s analysis, and most were Iacially implausible, yet none were justiIied.
In sum, Mr. Halwes noted that '|t|here is a lot oI estimates and speculation
in the numbers oI the Ellinger Submission. Tr. 89. He observed that the Ellinger
Submission did not even establish that the campaign Iinance reIorm proposal
would have a negative impact on state and local government revenues. Tr. 50
('Will it be less? Maybe. Could it be more? Probably not.). He concluded that
'it was not clear to me what the revenue change was going to be Ior state
government, state and local government. Tr. 71. As a result oI his assessment
that it was speculative, Mr. Halwes assigned 'lesser weight to the Ellinger
Submission when he prepared the Fiscal Note Summary. Tr. 73. In the Fiscal
10
Note Summary, thereIore, Mr. Halwes simply stated that '|a|ny potential impact to
revenues Ior state and local governments is unknown. App. App`x, at A96.
Though he was not required to do so, Tr. 78, Mr. Halwes Iorwarded the
Ellinger Submission to certain state agencies Ior comment. Tr. 18, 23. In
particular, he Iorwarded it to the Department oI Revenue with a request Ior
comment on the Submission. Tr. 23. The Department oI Revenue responded that
'aIter reviewing the proposed statement oI Iiscal impact |i.e., the Ellinger
Submission|, this does not change our response to the Iiscal note. App. App`x, at
A102. In particular, aIter reviewing the Ellinger Submission, the Department oI
Revenue stated that '|w|e would have no way oI measuring the economic impact
'that any campaign spending would generate. Id.
Mr. Halwes collected all submissions he received and included them
verbatim or nearly verbatim in the Iiscal note. Id. at A4. He then prepared the
Fiscal Note Summary. The Fiscal Note Summary stated: 'It is estimated this
proposal will increase state government costs by at least $118,000 annually and
have an unknown change in costs Ior local government entities. !"# %&'("')*+
),%*-' '& .(/("0(1 2&. 1'*'( *"3 +&-*+ 4&/(.",("'1 )1 0"5"&6". Id. at A96
(emphasis added). The Secretary oI State certiIied this language on the OIIicial
Ballot Title Ior the Initiative Petition. Id. at A100.
11
PlaintiIIs-Respondents SinqueIield and Brown Iiled suit, challenging the
Fiscal Note and Fiscal Note Summary as 'insuIIicient and 'unIair under
116.190, RSMo. The case was tried by bench trial beIore Cole County Circuit
Judge Jon E. Beetem on October 23, 2013. Though PlaintiIIs bore the burden oI
prooI, they called no Iact or expert witnesses at trial to support the Ellinger
Submission. The sole witness to testiIy at trial was Mr. Halwes oI the Auditor`s
OIIice, who testiIied that the Ellinger Submission was 'based on speculation and
'speculative. Tr. 55, 79.
On November 26, 2013, over Iour weeks aIter trial, the circuit court issued a
Final Judgment, holding that the Fiscal Note and Fiscal Note Summary Ior the
Initiative Petition were insuIIicient and unIair under 116.190, RSMo.
4
With
respect to the Fiscal Note, the circuit court held that the Fiscal Note was
insuIIicient or unIair because it included a putatively unreasonable submission
Irom the Department oI Revenue. App. App`x, at A14. With respect to the Fiscal
Note Summary, the circuit court held that the summary was insuIIicient or unIair
because it Iailed to Iorecast that campaign Iinance reIorm would have a negative
4
The circuit court rejected PlaintiIIs` challenge to the summary statement prepared
by the Secretary oI State, and dismissed PlaintiIIs` pre-enIorcement constitutional
challenges as unripe. App. App`x, at A18. Respondents have not sought review oI
those rulings on appeal.
12
impact on state and local revenues, and because it Iailed to include the speciIic
projections oI diminished state and local tax revenues Irom the Ellinger
Submission. Id. at A15. The court ordered that the Fiscal Note and Fiscal Note
Summary be remanded to the State Auditor Ior preparation oI a new Iiscal note and
Iiscal note summary. Id. at A18.
The next day, Appellants Iiled a timely notice oI appeal. LF 604-06.
13
POINTS RELIED ON
I. The trial court erred in holding that the Fiscal Note must be
remanded to the State Auditor for preparation of a new fiscal note,
because the Fiscal Note was not ~insufficient or ~unfair within the
meaning of 116.190.3, RSMo., in that the Department of Revenue`s
submission that the Auditor included in the Fiscal Note was a
reasonable submission that properly declined to forecast the
proposal`s impact on state and local tax revenues.
Principal Authorities:
Section 116.190, RSMo.
Brown v. Carnahan, 370 S.W.3d 637 (Mo banc. 2012)
Missouri Municipal League v. Carnahan, 364 S.W.3d 548 (Mo.
App. W.D. 2012) ('Missouri Municipal League II)
Missouri Municipal League v. Carnahan, 303 S.W.3d 573 (Mo.
App. W.D. 2010) ('Missouri Municipal League I)
II. The trial court erred in holding that the Fiscal Note Summary must
be remanded to the State Auditor for preparation of a new fiscal note
summary, because the Fiscal Note Summary was not ~insufficient
or ~unfair within the meaning of 116.190.3, RSMo., in that the
Auditor`s Office properly exercised its discretion in discounting the
14
speculative analysis of the proposal`s opponents regarding impact on
state and local tax revenues, and properly summarized the Fiscal
Note by stating that the proposal`s impact on state and local tax
revenues was ~unknown.
Principal Authorities:
Section 116.175, RSMo.
Brown v. Carnahan, 370 S.W.3d 637 (Mo banc. 2012)
Missouri Municipal League v. Carnahan, 364 S.W.3d 548 (Mo.
App. W.D. 2012) ('Missouri Municipal League II)
Missouri Municipal League v. Carnahan, 303 S.W.3d 573 (Mo.
App. W.D. 2010) ('Missouri Municipal League I)
15
INTRODUCTION
This case presents the question whether the Missouri State Auditor, in
preparing the Iiscal note materials Ior a ballot initiative, may exercise independent
judgment in reviewing submissions Irom the opponents oI the initiative. In
essence, the circuit court held that the Auditor must uncritically accept, and
incorporate wholesale into the ballot title language, even the most openly
speculative and plainly partisan analysis submitted by opponents oI an initiative.
This holding is clearly in error and should be reversed.
The Missouri Supreme Court has repeatedly cautioned that '|w|hen courts
are called upon to intervene in the initiative process, they must act with restraint,
trepidation and a healthy suspicion oI the partisan who would use the judiciary to
prevent the initiative process Irom taking its course. Brown v. Carnahan, 370
S.W.3d 637, 645 (Mo. banc. 2012) (quoting Missourians to Protect the Initiative
Process v. Blunt, 799 S.W.2d 824, 827 (Mo. banc 1990)). This Court has similarly
counseled that '|j|udicial intervention is not an appropriate substitute Ior the give
and take oI the political process. State ex rel. Human Socv of Mo. v. Beetem, 317
S.W.3d 669, 674 (Mo. App. W.D. 2010). The circuit court in this case Iailed to
heed these directives and thus permitted partisan opponents oI Initiative Petition
2014-032 to attempt to derail the democratic process.
16
STANDARD OF REVIEW
In reviewing the circuit court`s judgment on the Iairness and suIIiciency oI
the Fiscal Note and Fiscal Note Summary, this Court 'will sustain the circuit
court`s judgment unless there is no substantial evidence to support it, it is against
the weight oI the evidence, or it erroneously declares or applies the law. Mo.
Mun. League v. Carnahan, 303 S.W.3d 573, 579 (Mo. App. W.D. 2010) ('Mo.
Mun. League I). On points where there are no Iacts in dispute, 'the circuit court`s
legal conclusions and application oI the law to the Iacts are reviewed without
deIerence to the circuit court`s conclusions. Id.
Moreover, the plaintiII challenging the Auditor`s Iiscal note materials
'bear|s| the burden oI demonstrating in the Iirst instance that the Auditor`s Iiscal
note and Iiscal note summary are insuIIicient or unIair. Id. at 582. With respect
to the Iiscal note, 'the words insuIIicient and unIair . mean to inadequately and
with bias, prejudice, deception and/or Iavoritism state the Iiscal consequences oI
the proposed proposition. Brown, 370 S.W.3d at 654 (quoting Hancock v. Secv
of State, 885 S.W.2d 42, 49 (Mo. App. 1994)). 'Similarly, in examining the
Iairness and suIIiciency oI the Iiscal note summary, the summary`s words are
considered suIIicient and Iair where they adequately and without bias, prejudice, or
Iavoritism synopsize the Iiscal note. Id.
17
In addition, as noted above, '|w|hen courts are called upon to intervene in
the initiative process, they must act with restraint, trepidation and a healthy
suspicion oI the partisan who would use the judiciary to prevent the initiative
process Irom taking its course. Brown, 370 S.W.3d at 645 (quoting Missourians
to Protect the Initiative Process, 799 S.W.2d at 827). Thus, this Court should
'construe liberally constitutional and statutory provisions governing the ballot
initiative process to ensure the preservation oI the people`s power. Id. at 646.
18
ARGUMENT
I. The trial court erred in holding that the Fiscal Note must be
remanded to the State Auditor for preparation of a new fiscal note,
because the Fiscal Note was not ~insufficient or ~unfair within the
meaning of 116.190.3, RSMo., in that the Department of Revenue`s
submission that the Auditor included in the Fiscal Note was a
reasonable submission that properly declined to forecast the
proposal`s impact on state and local tax revenues.
The trial court erred in holding that the Fiscal Note was insuIIicient or unIair
under 116.190.3, RSMo. The trial court`s sole basis Ior this holding was that
'the Fiscal Note is insuIIicient or unIair because it includes the unreasonable
submission oI the Department oI Revenue. App. App`x, at A14. The court Iound
two putative deIiciencies in the Department oI Revenue`s submission: 'the
Department had not reviewed the |Ellinger Submission| sent to the Department to
the Auditor and . the Department did not understand the Auditor`s request. Id.
Both oI these statements were in error.
As discussed above in the Statement oI Facts, in addition to Iorwarding the
Initiative Petition to the Department oI Revenue, Mr. Halwes also Iorwarded the
Ellinger Submission to that Department Ior comment on May 17, 2013. Tr. 23; see
also App. App`x, at A103. The Department oI Revenue responded on May 22,
19
2013, with a statement that '|t|his initiative petition will have no impact on the
Department. Id. at A101. On May 23, 2013, Mr. Halwes Iollowed up with a
request Ior comment on the Ellinger Submission in particular, which he had sent to
the Department six days earlier. Id. at A102. The next morning, aIter a nudge
Irom Mr. Halwes, the Department oI Revenue responded with the statement,
'|w|hile we have no expertise in the area oI the impacts oI campaign spending,
aIter reviewing the proposed statement oI Iiscal impact |i.e. the Ellinger
Submission|, this does not change our response to the Iiscal note. This will not
impact the Department oI Revenue. Id. at A102. A brieI email exchange ensued,
in which Mr. Halwes requested, and the Department oI Revenue ('DOR)
provided, clariIication:
Halwes: You do not think the proposal will impact revenue to the state?
DOR: We would have no way oI measuring the economic impact it
would generate.
Halwes: The submission is projecting a decrease in state revenue not an
increase
DOR: I`m sorry. I meant that any campaign spending would generate.
Id. at A102. The import oI the Department`s response, thereIore, was perIectly
clear: AIter reviewing the Ellinger Submission, they concluded that they 'would
have no way oI measuring the 'economic impact that 'any campaign spending
20
would generate. Id. Mr. Halwes interpreted their response in those terms and
summarized their position in the Fiscal Note, Iairly and accurately, as Iollows:
'OIIicials Irom the Department of Revenue indicated this initiative petition will
have no impact on their department. The oIIicials indicated they had no way oI
measuring the proposals economic impact. Id. at A36 (bold in original).
The circuit court Iaulted the inclusion oI this statement in the Fiscal Note on
two grounds. First, the trial court stated that this summary should not have been
included because 'the Department had not reviewed the |Ellinger Submission| sent
to the Department by the Auditor. Id. at A14. This statement is both legally
irrelevant and unsupported by any substantial evidence.
The statement that the Department oI Revenue had not reviewed the Ellinger
Submission is legally irrelevant. As Mr. Halwes testiIied, there is simply not 'any
requirement that |the Auditor| take submission Irom an opponent and Iorward
them to any governmental entity at all. Tr. 78. Likewise, the Missouri Supreme
Court stated in Brown that '|t|he auditor is not required to compel . submissions
Irom entities but is able to rely upon the responses submitted. Brown, 370
S.W.3d at 650. Similarly, 'nothing required the auditor to look beyond the
inIormation he was provided in assessing the Iiscal impact oI the proposal. Id. at
667. In the same vein, in Missouri Municipal League II, this Court emphasized
that the Auditor 'mav consult, but is not required to consult with state and local
21
agencies at all in preparing the Iiscal note materials: 'The only directive oI the
statute is that the auditor shall assess the Iiscal impact oI the proposed measure.`
The rest oI the statute is entirely discretionary. Mo. Mun. League II, 364 S.W.3d
at 554. Thus, Mr. Halwes had no duty to send anything at all to the Department oI
Revenue, including the Ellinger Submission; the Department oI Revenue had no
obligation to review and comment on the Ellinger Submission; and Mr. Halwes
had no authority to compel the Department oI Revenue to do so.
In addition, the trial court`s Iinding that '|i|t is clear Irom the responses
Irom the Department oI Revenue that the Department had not reviewed the
|Ellinger| submission, App. App`x at A14, is plainly contrary to the evidence.
Though PlaintiIIs had the burden oI prooI in this case, they did not call any oIIicial
oI the Department oI Revenue to testiIy. The only evidence on this issue beIore
the court was the email exchange itselI. In the email exchange, Alyssa Soendeker
oI the Department oI Revenue explicitly stated that DOR was providing its
response '*2'(. .(/)(6)"4 '7( %.&%&1(3 1'*'(,("' &2 2)1-*+ ),%*-' that Mr.
Halwes had Iorwarded to the Department oI Revenue. Id. at A102 (emphasis
added). Moreover, this response was emailed at 10:05 AM on May 24, 2013,
seven days aIter Mr. Halwes initially Iorwarded the Ellinger Submission to the
Department oI Revenue and a Iull day aIter Mr. Halwes sent a Iollow-up email
request Ior comments on that submission on May 23, 2013 at 8:38 AM. Id. There
22
was simply no competent evidence in the record Ior the circuit court to conclude
that Ms. Soendeker was lying when she stated in her email that her response was
made 'aIter reviewing the proposed statement oI Iiscal impact, i.e. the Ellinger
Submission. Id.
Second, the trial court Iaulted Mr. Halwes Ior including the Department oI
Revenue`s response in the Fiscal Note on the ground that 'the Department did not
understand the Auditor`s request Ior review and comment upon the Ellinger
Submission. The trial court cited no case law or other authority to support its
holding that this putative misunderstanding rendered Department`s submission
unreasonable. In any event, this basis has no merit. Mr. Halwes requested that the
Department 'review the comments in the attached |Ellinger| submission and
comment on this potential impact. Id. at A103. As noted above, the Department
responded that it had reviewed the Ellinger Submission and had concluded,
notwithstanding that submission, that it 'would have no way oI measuring the
economic impact 'that any campaign spending would generate. Id. at A102.
Clearly, the Department oI Revenue understood Mr. Halwes` request, and simply
responded that the Ellinger Submission did not provide them with any basis to
make predictions about the impact oI campaign Iinance reIorm on state revenues.
In Iact, the very next page oI the circuit court`s Final Judgment directly
contradicts the court`s holding regarding the Fiscal Note. On page 14 oI the Final
23
Judgment, the circuit court held that the Fiscal Note was insuIIicient or unIair Ior
reporting that '|o|IIicials Irom the Department oI Revenue . indicated they had
no way oI measuring the proposals |sic| economic impact. Id. at A36; see also id.
at A14. On page 15 oI the Final Judgment, however, the trial court then stated:
'AIter being given the Ellinger Submission to review prior to their response, the
Department oI Revenue indicated they were unable to independently measure the
economic impact. Id. at A15. In other words, the trial court described the
Department oI Revenue`s response in virtually identical terms to those used by the
Auditor in the Fiscal Note, which terms the trial court had just held to be
insuIIicient and unIair one page earlier in its decision.
Furthermore, even iI it were true that Revenue oIIicials had misunderstood
Mr. Halwes` request Ior commentary on the Fiscal Note, it would make no
diIIerence as a matter oI law. For the reasons stated above, those oIIicials had no
obligation to comment on the Ellinger Submission at all, and Mr. Halwes had no
obligation to Iorward it to them. A fortiori, their response to Mr. Halwes would
not have been deIicient, and there would have been no grounds to exclude it Irom
the Fiscal Note, even iI the Department had misunderstood Mr. Halwes` request
Ior comments on the Ellinger Submission.
24
II. The trial court erred in holding that the Fiscal Note Summary must
be remanded to the State Auditor for preparation of a new fiscal note
summary, because the Fiscal Note Summary was not ~insufficient
or ~unfair within the meaning of 116.190.3, RSMo, in that the
Auditor`s Office properly exercised its discretion in discounting the
speculative analysis of the proposal`s opponents regarding impact on
state and local tax revenues, and properly summarized the Fiscal
Note by stating that the proposal`s impact on state and local tax
revenues was ~unknown.
As noted above, the second sentence oI the Fiscal Note Summary prepared
by the Auditor stated: 'Any potential impact to revenues Ior state and local
government entities is unknown. App. App`x, at A100. The circuit court held
that this sentence was insuIIicient or unIair, both as to state and local government
entities. Id. at A15-A16. In particular, the circuit court Iound two putative
deIiciencies in this sentence: (1) the sentence should have stated '|a|ny potential
negative impact to revenues Ior state or local governments is unknown, id. at
A15, A16 (underline in original); and (2) '|t|he numbers Irom the Ellinger
submission, which included speciIic calculations oI the impact on state and local
revenues down to the last cent, 'should be reIlected in the summary. Id. at A15;
25
see also id. at A16 ('|T|he Auditor`s Iailure to include the estimates oI the Ellinger
submission in the Fiscal Note Summary at all also renders the Fiscal Note
Summary unIair and insuIIicient.). As a result oI these putative deIiciencies, the
circuit court concluded that '|t|he Fiscal Note Summary . prejudicially
synopsizes the Fiscal Note. Id. at A14. This conclusion was clearly in error.
A. The Auditor Properly Exercised Its Discretion To Determine That
the Ellinger Submission Was Speculative and Assign It Lesser
Weight In Preparing the Fiscal Note Summary.
The Auditor was not required to accept the Ellinger Submission blindly.
Rather, the Auditor had statutory discretion to conduct an independent assessment
the Ellinger Submission to determine how much weight to assign it in the
preparation oI the Fiscal Note Summary.
First, the plain language oI the statute conIers on the Auditor the authority to
'assess submissions in preparing the Iiscal note materials. Section 116.175.1
states that 'the auditor shall *11(11 the Iiscal impact oI the proposed measure.
RSMo. 116.175.1 (emphasis added). The Missouri Supreme Court has
interpreted the word 'assess in this statute to conIer discretion upon the Auditor to
'review and examine submissions. 'Assess` is deIined as to make an oIIicial
valuation or estimate oI` some item. Undoubtedly, to assess the Iiscal impact oI a
proposed initiative, the auditor must inquire about it, solicit comments, and then
26
review and examine those comments. Brown v. Carnahan, 370 S.W.3d 637, 650
(Mo. banc 2012) (citation omitted) (quoting WEBSTER`S THIRD NEW
INTERNATIONAL DICTIONARY UNABRIDGED 131 (2002)).
Similarly, both the Missouri Supreme Court and this Court have emphasized
that the statute conIers broad discretion upon the Auditor in preparing a Iiscal note
summary. For example, Brown quoted with approval one trial court`s observation
that 'much oI the Iiscal note and Iiscal note summary creation process was leIt to
the auditor`s discretion and should not be subjected to partisan wrangling` in
litigation. Id. at 662 (square brackets omitted). Likewise, in Missouri Municipal
League v. Carnahan, 364 S.W.3d 548 (Mo. App. W.D. 2011) ('Mo. Mun. League
II), this Court stated that '|t|he only directive oI the statute is that the auditor
shall assess the Iiscal impact oI the proposed measure.` The rest oI the statute is
entirely discretionary. Id. at 554 (emphasis added by the Mo. Mun. League II
court) (quoting RSMo. 116.175.1).
This 'broad discretion granted to the Auditor, id., naturally includes the
authority to conduct a substantive review oI submissions to consider how much
weight to assign them in preparation oI the Iiscal note summary. Thus, in Brown,
the Missouri Supreme Court approved the Auditor`s stated practice that '|i|I the
auditor concludes a submission is unreasonable, he or she determines what weight
the submission will be given when preparing the Iiscal note summary. Brown,
27
370 S.W.3d at 649. Likewise, in Missouri Municipal League II, this Court
approved the process by which '|i|I the Auditor Iinds a response to be
unreasonable, he gives less weight to the submission in preparing the Iinal Iiscal
note summary. Mo. Mun. League II, 364 S.W.3d at 554. See also Mo. Mun.
League I, 303 S.W.3d at 582 (noting that, iI the Auditor`s OIIice 'Iound a response
to be unreasonable, that aIIected how much weight was given to the statement in
preparing the summary).
For these reasons, it is clear that the statute`s directive that the Auditor
'assess the Iiscal impact oI the proposed measure, RSMo. 116.175.1,
encompasses the Auditor`s discretion to review an opponents` submission,
determine whether the submission is 'based on speculation, Tr. 55, and
accordingly conIer 'lesser weight upon that submission in the preparation oI the
Iiscal note summary. Tr. 73. That is exactly what happened in this case.
Moreover, even the circuit court in this case conceded that '|t|he Auditor can give
a submission less weight based on the Iact that the numbers therein are
speculative` or unlikely` when such conclusion is supported by the record beIore
him. App. App`x, at A16. The circuit court, however, held that there was no
support in the record Ior the Auditor`s determination that the Ellinger Submission
was 'speculative. Id. This determination was plainly in error.
28
B. The Record Strongly Supports the Auditor`s Conclusion That the
Ellinger Submission Was Speculative, Because Its Speculative Nature
Was Evident From the Submission Itself.
The circuit court held that 'Mr. Halwes had no basis Ior Iinding the numbers
in the Ellinger submission speculative.` Id. at A16. The circuit court applied this
holding equally to the Ellinger Submission`s projections Ior both state and local
government revenues. Id. at A15, A16. The holding was clearly in error, because
the Auditor had discretion to determine that the speculative nature oI the Ellinger
Submission appears in the Submission itselI.
The Auditor`s OIIice acted well within its statutory discretion in concluding
that the Ellinger Submission was 'based on speculation. Tr. 55. In Iact, Mr.
Halwes` testimony identiIied nine distinct speculative assumptions inherent in the
Ellinger Submission`s analysismost oI which were not only speculative, but
almost certainly Ialse:
(1) The Ellinger Submission reported that '|o|nly 27 oI Nixon`s
contributions in 2012 would have been lawIul iI this proposed measure had been in
place, and then assumed that 'the proposed measure would have reduced Nixon`s
total campaign contributions by 72.58. App. App`x, at A43, A45. Mr. Halwes
repeatedly testiIied that this calculation was based on the speculative assumption
that Governor Nixon (and other candidates) would not Iind ways under the reIorm
29
proposal oI raising money through alternative routes, such as raising comparable
amounts oI money through larger numbers oI smaller contributions. Tr. 50, 51, 79-
80, 85-86. As Mr. Halwes testiIied, this speculative assumption was nowhere
stated or deIended in the Ellinger Submission.
(2) Mr. Halwes acknowledged that the Ellinger Submission did not even
attempt to account Ior 'the possibility that money not contributed to campaigns
might otherwise be expended in the Missouri economy and thus 'might generate
sales and income tax revenues Ior state and local governments in other ways. Tr.
80. Thus, the Ellinger Submission was based on the unjustiIied and implausible
assumption that money now spent on campaigns would not be put to other, more
productive uses in the Missouri economy under campaign Iinance reIorm, thus
oIIsetting any negative impact on state and local tax revenues.
(3) Mr. Halwes agreed that the Ellinger Submission did not 'provide any
analysis oI the possibility that eliminating the big dollar contributors might
encourage more smaller contributors to contribute to statewide elections by
boosting conIidence in the electoral process, thus undercutting the Submission`s
predictions. Tr. 81. The Ellinger Submission simply assumed, without
justiIication, that campaign Iinance reIorm would not encourage broader-based
participation in the electoral process by ordinary Missourians.
30
(4) The Ellinger Submission selected one year oI particularly high campaign
expenditures (2012) and then sought to extrapolate the economic impact to all
other years, including non-election years. See App. App`x at A49. In other words,
the Submission cherry-picked a year oI high campaign spending and extrapolated
the projected economic impact to years oI low campaign spending, without any
justiIication. Mr. Halwes acknowledged that this extrapolation constituted another
unwarranted speculative assumption oI the Ellinger Submission, and that this
assumption was not 'reasonable. Tr. 83.
(5) The Ellinger Submission also assumed, without justiIication, that the
proportion oI campaign spending Ior Governor Nixon`s campaign was the same as
Ior every other statewide campaign in Missouri. App. App`x, at A46. Mr. Halwes
agreed that the Ellinger Submission 'merely extrapolates Irom Governor Nixon`s
numbers to the numbers Ior every other statewide campaign in the State oI
Missouri Ior that year, Tr. 85, even though it 'would make logical sense that 'a
campaign Ior judicial oIIice or a campaign Ior Iirst term state representative might
have very diIIerent proportions oI spending than a statewide campaign Ior
governor. Tr. 86.
(6) Likewise, the Ellinger Submission assumed that the proportion oI
donations raised Irom donors contributing over $2,600 was the same Ior Governor
Nixon`s campaign as Ior every other statewide campaign in Missouriincluding
31
Ior candidates who lacked Governor Nixon`s Iundraising clout. App. App`x, at
A46. Mr. Halwes agreed that the Ellinger Submission did not even 'discuss the
possibility or even the likelihood that smaller campaigns Ior other statewide oIIices
might have a much smaller proportion oI big dollar donations that Governor
Nixon`s campaign. Tr. 87.
(7) The Ellinger Submission explicitly assumed that 75 percent oI Governor
Nixon`s $9 million oI media spending (*++ oI which went to an 'out-oI-state media
company in the Iirst instance, App. App`x, at A44) was later sent back to
Missouri media corporations that paid Missouri`s corporate income tax. Id. at A45
('assum|ing| only 75 oI the media` expenditures aIIect Missouri`s economy);
A47 ('assuming only 75 oI |media spending| translates to Missouri corporate
income). As Mr. Halwes agreed upon examination, 'there is no way oI knowing
how much oI that $9 million that went to the out-oI-state media company actually
went to out-oI-state companies, and that this 'is just an assumption oI the Ellinger
Submission. Tr. 84.
(8) The Ellinger Submission stated that it 'assum|ed| that halI oI the media
spending is paid out to employees in salaries, App. App`x, at A47, but it did not
even purport to justiIy this assumption. Thus, Mr. Halwes agreed that the Ellinger
Submission 'openly assume|d| that 75 percent oI media spending would transIer to
corporate income, without any justiIication Ior that assumption. Tr. 88.
32
(9) The Ellinger Submission stated that it 'assum|ed| that halI oI the
nebulously deIined category oI 'other Missouri expenditures by Governor
Nixon`s campaign was subject to Missouri sales tax, App. App`x, at A47, but it did
not even purport to justiIy this assumption. Mr. Halwes agreed that 'that
assumption is not justiIied anywhere in the Ellinger submission. Tr. 89.
In sum, Mr. Halwes saw the Ellinger Submission Ior what it wasan artIul
attempt to dress up, with Iaux scientiIic precision, the opponents` obviously
speculative and unjustiIiable predictions about the economic impact oI campaign
Iinance reIorm. There was ample basis in the record Ior Mr. Halwes to conclude
that '|t|here is a lot oI estimates and speculation in the numbers oI the Ellinger
Submission, Tr. 89, and Ior Mr. Halwes to decide to accord the Ellinger
Submission 'lesser weight in draIting the Fiscal Note Summary. Tr. 73.
C. The Circuit Court Plainly Erred In Holding That the Fiscal Note
Summary Must Include the Speculative Numbers of the Ellinger
Submission.
As noted above, the Ellinger Submission predicted that the 'total loss to
Missouri state government due to the campaign Iinance reIorm initiative would be
$7,396,821.91. App. App`x, at A47. Similarly, the Ellinger Submission predicted
that the 'total loss to local governments as a result oI the proposed measure would
be $1,268,091.25. Id. at A48. The circuit court held that the Fiscal Note Summary
33
must be re-draIted to include these speciIic numbers, as to both state and local
governments. Id., at A15, A16. This holding was plainly erroneous.
First, Ior the reasons stated above, there was ample evidence in the record
Ior Mr. Halwes to conclude that the Ellinger Submission was 'speculative and
'based on speculation. Tr. 55, 73. Mr. Halwes` testimony identiIied nine
speculative (and implausible) assumptions that were not justiIied or deIended in
the Ellinger Submission. See supra Part II.B.
Notwithstanding Mr. Halwes` testimony, the circuit court concluded that
'Mr. Halwes had no basis Ior Iinding the numbers in the Ellinger submission
speculative.` App. App`x, at A16; see also id. at A15. The circuit court recited
three reasons Ior this holding: (1) 'There is no basis in any oI the submission |sic|
to the Auditor Ior this Iinding, id. at A15; (2) 'Mr. Halwes did not conduct any
independent research on the economic impact oI campaign spending which could
support such conclusion, id. at A16; and (3) 'Mr. Halwes has no experience or
training in campaign matters, campaign Iinance matters or in economics or
economic projections, id. at A16. Each oI these reasons is erroneous and Iails to
support the circuit court`s conclusions.
First, the circuit court evidently concluded that, because no other submission
directly addressed or reIuted the analysis in the Ellinger Submission, the Auditor
was bound to accept the Ellinger Submission`s speculative numbers as gospel truth
34
and incorporate them wholesale into the Fiscal Note Summary. See id. at A15
('The estimate in the Ellinger Submission is the only number in a reasonable
submission that was provided to the Auditor.). Nothing in the statute or this
Court`s case law requires the Auditor to take such a blinkered approach to
submissions. Quite the contrary, as discussed above, see supra II.B, the statute
directs the Auditor to 'assess the Iiscal impact oI the initiative, RSMo.
116.175.1, and it conIers 'broad discretion on the Auditor to carry out this duty.
Mo. Mun. League II, 364 S.W.3d at 554. Such 'broad discretion includes the
discretion to 'give less weight to the submission in preparing the Iiscal note
summary, id., when the Auditor deems that submission to be substantively
unreasonable. That is exactly what happened in this case. See Tr. 73.
In Iact, the Auditor`s discretion in draIting the Fiscal Note Summary is
suIIiciently broad that the Auditor is not required to include speciIic numbers oI
Iinancial impact at all, even when valid numbers are provided. In Brown, the
Missouri Supreme Court noted that the Iiscal note summary 'can be considered
meaningIul, suIIicient, and Iair even iI it does not use the best` language, set out
all the details oI the proposed measure, or )"2&., /&'(.1 &2 *" (8%.(11 *,&0"' &2
%&'("')*+ -&1'1 &2 '7( )")')*')/(. Brown, 370 S.W.3d at 662 (quoting Mo. Mun.
League II, 364 S.W.3d at 557) (emphasis added). Likewise, in Missouri Municipal
League II, in upholding a Iiscal note summary that summarized speciIic
35
projections by stating merely that costs 'could be signiIicant, this Court relied
upon the Iact that 'plaintiIIs have cited no authority that to be meaningIul a Iiscal
note must be detailed as to the actual amounts oI estimated costs. Mo. Mun.
League II, 364 S.W.3d at 556. Thus, even iI the Ellinger Submission had included
reasonable Iiscal projections (which it did not), the Auditor would have had no
obligation to include those speciIic numbers in the Fiscal Note Summary.
Second, the circuit court Iaulted Mr. Halwes Ior discounting the Ellinger
Submission without 'conduct|ing| any independent research on the economic
impact oI campaign spending which could support such conclusion, and without
'examin|ing| the impact that campaign contribution limits have had in other
states. App. App`x, at A16. These statements were plainly in error, Ior at least
two reasons. First, both the Supreme Court and this Court have taken pains to
emphasize that the Auditor has no obligation to engage in any such independent
research on submissions received during the initiative process. In Brown, Ior
example, the Missouri Supreme Court stated that 'noting required the auditor to
look beyond the inIormation he was provided in assessing the Iiscal impact oI the
proposal. Brown, 370 S.W.3d at 667. Similarly, in both Missouri Municipal
League cases, this Court stated that '|t|he plain language oI the statute does not
mandate that the Auditor adopt another method oI independently assessing the
costs or saving oI the proposal. Mo. Mun. League II, 364 S.W.3d at 557 (quoting
36
Mo. Mun. League I, 303 S.W.3d at 582). Thus, it is clear that Mr. Halwes had no
duty or obligation to engage in the sort oI independent research urged by the circuit
court. Furthermore, Ior all the reasons stated above, there was no need Ior Mr.
Halwes to engage in any independent research to ascertain that the Ellinger
Submission was speculativethat conclusion was evident Irom the Ellinger
Submission itselI. See supra Part II.B.
Third, the circuit court held that Mr. Halwes was not qualiIied to discount
the analysis oI the Ellinger Submission, on the ground that Mr. Halwes allegedly
'has no experience or training in campaign matters, campaign Iinance matters or in
economics or economic projections. App. App`x, at A16. This statement is in
error, both as a matter oI law and a matter oI Iact. As an initial matter, no special
expertise is required to see that the Ellinger Submission is obviously speculative
and that it what it purports to dopredict with scientiIic precision the impact oI
campaign Iinance reIorm on state and local tax revenuesis impossible. As noted
above, there are at least nine speculative assumptions that any lay person can
discern in the Ellinger Submission, and that Mr. Halwes did identiIy in his
testimony. See supra Part II.B.
Further, though the circuit court Iaulted Mr. Halwes` lack oI training in
'campaign Iinance matters or 'economic projections, App. App`x, at A16, it did
not Iault Mr. Halwes` expertise in the area most relevant to the preparation oI Iiscal
37
note materialsnamely, government auditing, budgeting, and Iinancial Iorecasts.
Mr. Halwes testiIied that he has 'worked Ior the Auditor`s oIIice Ior 28 years, and
that he is 'a CPA and a certiIied government Iinancial manager. Tr. 59. His
'certiIication involves some expertise in auditing, accounting, budgeting and
Iinancial reporting, and he has both conducted and supervised audits oI state
agencies. Tr. 59. The Missouri Supreme Court has held that the statute
appropriately conIers discretion upon the Auditor to make determinations oI Iiscal
impact because the Auditor`s OIIice has the collective experience to determine
whether such Iiscal projections are reasonable: 'The auditor`s determination oI
reasonableness is based on the auditor`s experience in state government and overall
knowledge and understanding oI business and economic issues. Brown, 370
S.W.3d at 649. Mr. Halwes` 28 years oI experience in auditing, budgeting, and
Iinancial reporting Ior state agencies rendered him more than qualiIied to represent
the Auditor`s 'overall knowledge and understanding oI business and economic
issues. Id.
Furthermore, the circuit court`s statement improperly Ilipped the burden oI
prooI Irom the PlaintiIIs to the Auditor. Notably, the Ellinger Submission itselI
was not prepared or submitted by someone with veriIiable 'experience or training
in campaign matters, campaign Iinance matters or in economics or economic
projections. App. App`x, at A16. It was not draIted by any identiIied economist
38
or campaign expert. Rather, it was prepared and submitted by the attorney Ior the
initiative opponents, Marc H. Ellinger. App. App`x, at A39; see also LF 486
(submission cover page Ior the Ellinger Submission, indicating 'Submitted by
Marc H. Ellinger, with signature). When it comes to assessing predictions oI
Iiscal impact, the qualiIications oI Mr. Halwes, an auditor oI 28 years` experience,
dwarIed those oI the author oI the Ellinger Submission. II the PlaintiIIs disagreed
with the Auditor`s discounting oI their submission, the burden rested upon them to
produce expert evidence to reIute Mr. Halwes` assessments. See Mo. Mun. League
I, 303 S.W.3d at 582. But PlaintiIIs submitted no testimony, expert or otherwise,
oI any witness to challenge Mr. Halwes` assessment oI the Iiscal impact.
Accordingly, the circuit court erroneously Ilipped the burden oI prooI on its head.
D. The Circuit Court Plainly Erred In Holding That the Fiscal Note
Summary Must Include the Word ~Negative.
As an alternative holding, the circuit court held that the Fiscal Note
Summary should have included the word 'negative to describe the proposal`s
impact on state and local government revenues. App. App`x, at A15, A16. The
circuit court held that the insertion oI this word was necessary to 'rule out the
possibility oI positive impact to revenues, since '|t|he only inIormation beIore
|the Auditor| indicated no impact or a negative . impact. Id. at A15; see also id.
at A16. Accordingly, the circuit court ruled that the second sentence oI the Fiscal
39
Note Summary should state: 'Any potential negative impact to revenues.. Id.
(underline in original).
This holding lacks merit, Ior several reasons. First, it constitutes just the sort
oI micro-parsing that this Court has repeatedly rejected as inappropriate Ior judicial
review oI the Auditor`s handiwork. 'A Iiscal note summary is not judged on
whether it is the best` language, only on whether it is Iair. Brown, 370 S.W.3d at
654 (quoting Mo. Mun. League I, 303 S.W.3d at 583). A Iiscal note summary 'can
be considered meaningIul, suIIicient, and Iair even iI it does not use the best`
language, set out all details oI the proposed measure, or inIorm voters oI an
express amount oI potential costs oI the initiative. Id. at 662 (citing Mo. Mun.
League II, 364 S.W.3d at 557). See also, e.g., Billington v. Carnahan, 380 S.W.3d
586, 596 (Mo. App. W.D. 2012) (observing that 'there are many appropriate and
adequate ways oI writing summary ballot language, and that 'there is a wide
range oI acceptable ballot summaries Ior any particular proposed amendment)
(quoting Asher v. Carnahan, 268 S.W.3d 427, 431, 432 (Mo. App. W.D. 2008)).
In Iact, this Court rejected a strikingly similar claim in Missouri Municipal
League I. In that case, plaintiIIs challenged the Iirst sentence oI a Iiscal note
summary that stated, '|t|he total cost or savings to state or local governmental
entities is unknown. Mo. Mun. League I, 303 S.W.3d at 582-83. PlaintiIIs
contended that this language was unIair and misleading on the ground that 'no
40
agency reported that such a savings would result, id. at 582, and thus the summary
should only reIer to costs. This Court rejected that claim, holding that the
reIerence to 'cost or savings was Iair and suIIicient. Id. So also here, the
statement that '|a|ny potential impact to revenues Ior state or local governmental
entities is unknown, App. App`x, at A100, is perIectly Iair and suIIicient.
Second, the Ellinger Submission was the only submission to Iorecast any
negative impact on state and local tax revenues. As discussed above, Mr. Halwes
gave 'lesser weight to the Ellinger Submission in preparing the Fiscal Note
Summary, due to its speculative nature. Tr. 73. Because the Ellinger Submission
was the only submission to Iorecast a negative impact on state or local revenues,
and because Mr. Halwes properly discounted that submission due to its speculative
nature, there was no proper basis Ior Mr. Halwes to insert the word 'negative into
the second sentence oI the Fiscal Note Summary.
In Iact, Mr. Halwes speciIically testiIied that, due to its speculative nature,
the Ellinger Submission Iailed to establish that the impact on state and local
revenues would necessarily be negative. With respect to campaign contributions
raised under the proposal, Mr. Halwes stated: 'Will it be less? Maybe. Could it be
more? Probably not. But that amount would be unknown. Tr. 50. He stated that
'it was not clear to me what the revenue change was going to be Ior . state and
local government. Tr. 71. Mr. Halwes`s testimony acknowledged multiple
41
mechanisms by which state and local tax revenues might increase under the
proposal, and thus oIIset any putative losses due to reduced campaign spending,
none oI which were addressed or reIuted by the Ellinger Submission. For example,
he noted that the Ellinger Submission did not 'anywhere discuss the possibility
that limiting campaign contributions might have a positive eIIect on state revenues
by encouraging the money that goes to campaign contributions to be spent in other
more productive sectors oI the Missouri economy. Tr. 90. He also testiIied that
candidates could conceivably Iind other ways to raise comparable sums oI
campaign cash: '|H|ow you would go about and run a campaign would be
diIIerent and, thereIore, your methodology Ior getting contributions would
change. Tr. 80. He also acknowledged that the Ellinger Submission did not
reIute or even discuss 'the possibility that eliminating the big dollar contributors
might encourage more smaller contributors to contribute to statewide elections,
Tr. 81, by restoring the conIidence oI smaller donors that their voices can be
meaningIul in the political system.
For the Ioregoing reasons, there was no valid basis Ior the Auditor to predict
in the Fiscal Note Summary that the proposal`s impact on state and local revenues
would be 'negative. The circuit court`s holding to the contrary was in error.
42
CONCLUSION
In sum, the Fiscal Note Summary`s statement that '|a|ny potential impact to
revenues Ior state and local government entities is unknown constituted an
eminently Iair and reasonable synopsis oI the Fiscal Note. The circuit court`s
decision rejecting that language was in error. 'Judicial intervention is not an
appropriate substitute Ior the give and take oI the political process. State ex. rel
Humane Socv of Mo. v. Beetem, 317 S.W.3d 669, 674 (Mo. App. W.D. 2010).
The circuit court`s judgment ran aIoul oI this directive, and it should be reversed.
For the reasons stated, Appellants Todd S. Jones and Missouri Roundtable
For LiIe respectIully request that this Court reverse the judgment oI the circuit
court and remand with instructions that the circuit court certiIy the Fiscal Note and
Fiscal Note Summary to the Secretary oI State, pursuant to 116.190.4, RSMo.
RespectIully submitted,
/s/ D. John Sauer
D. John Sauer #58721
Clark & Sauer, LLC
7733 Forsyth Blvd., Suite 625
St. Louis, MO 63105
314-814-8880
314-332-2973 (Iacsimile)
jsauerclarksauer.com
Attornev for Appellants Todd S. Jones
and Missouri Roundtable For Life
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CERTIFICATE OF SERVICE
The undersigned certiIies that a true and correct copy oI the Ioregoing was Iiled
electronically on December 10, 2013, to be served by operation oI the Court`s electronic
Iiling system upon the Iollowing registered users:
Marc H. Ellinger
Blitz, Bardgett & Deutsch, L.C.
308 E. High Street
Suite 301
JeIIerson City, MO 65101
mellingerblitzbardgett.com
Attornev for Plaintiffs Rex A.
Sinquefield and Travis H. Brown
Darrell L. Moore
ChieI Litigation Counsel
Missouri State Auditor`s OIIice
301 W. High Street
Suite 880
JeIIerson City, MO 65101
Darrell.Mooreauditor.mo.gov
Attornev for Auditor Thomas A.
Schweich
Jeremiah J. Morgan
Deputy Solicitor General
Assistant Attorney General
P.O. Box 899
JeIIerson City, Missouri 65102
Jeremiah.Morganago.mo.gov
Attornev for Secretarv of State Jason
Kander
/s/ D. John Sauer
D. John Sauer #58721