Opinion ID: 2584102
Heading Depth: 3
Heading Rank: 5

Heading: Substantial Compliance Is the Proper Standard Under AS 39.50.060(b).

Text: The superior court alternatively dismissed the lawsuit because it concluded that substantial compliance was the appropriate standard under AS 39.50, and because it found that Wagoner substantially complied with the chapter's disclosure requirements. We consider first whether substantial compliance was the correct standard for enforcing AS 39.50.060(b).
On appeal Grimm and McGahan argue that AS 39.50.060(b) requires forfeiture for candidates who do not strictly comply with the disclosure requirements of AS 39.50. The state and amicus curiae Alaska State Legislature argue that substantial compliance is the standard for avoiding penalties under subsection.060(b). The first sentence of AS 39.50.060(b) states that the subsection applies to [a]ny person failing or refusing to comply with the requirements of [the] chapter. (Emphasis added.) The third sentence states that [i]n the case of elected officials, the lieutenant governor ... may not certify ... the person's election to office if compliance was not made within the time required. (Emphasis added.) Neither sentence specifies the level of noncompliance required to justify a penalty under subsection .060(b). And neither indicates whether a failure to strictly comply with the disclosure statutes is sufficient to require forfeiture of office under subsection.060(b). We must therefore determine what standard the legislature intended to be applied when forfeiture is sought under AS 39.50.060(b). In deciding to apply the substantial compliance standard, the superior court reasoned that this standard was needed to distinguish trivial from non-trivial errors and omissions. Grimm and McGahan essentially give three reasons why strict compliance should be the appropriate standard. First, they claim that [t]he unambiguous language of AS 39.50.060(b) is mandatory. We are unconvinced that the language of the statute is clear and mandatory in the way plaintiffs think. Subsection .060(b) does not specify the level of noncompliance necessary to trigger a forfeiture of office. Contrary to plaintiffs' supposition, the statute's statement that any person failing to comply  shall forfeit nomination to office and may not be seated or installed, does not indicate an appropriate level of compliance. [13] That the penalty for a violation may be mandatory does not tell us how to decide whether a violation has occurred. Second, the plaintiffs observe that AS 39.50.030 requires the disclosure of all relevant business interests and sources of income, and implicitly argue that a mandate for strict compliance exists in the disclosure requirements themselves. This argument is also unpersuasive. Passages in AS 39.50.030(b) undeniably require that disclosure statements must include all or each relevant business interest or source of income. [14] But the mandatory and comprehensive language of these requirements in subsection.030(b) does not clarify the level of noncompliance necessary for forfeiture under subsection .060(b). The mandatory and comprehensive language of the disclosure requirements is not surprising. Less demanding language would make it impossible to determine what disclosure is needed and the sufficiency of a given disclosure enforcement. Nonetheless, it remains unclear what level of noncompliance with the disclosure requirements can lead to the forfeiture penalty described in subsection .060(b). [15] The level of compliance required by the disclosure requirements of subsection .030(b) does not specify the level of noncompliance necessary to trigger the penalties described in subsection.060(b). Third, the plaintiffs assert that we have required strict compliance in analogous situations, and cite Silides v. Thomas, [16] Falke v. State, [17] and State, Alaska Public Offices Commission v. Marshall [18] in support. In Silides and Falke we applied a strict compliance standard to the filing deadlines for required election disclosures, and noted that election filing deadlines are generally strictly enforced. [19] In Marshall we declared void the election of a local municipal officer who filed a preelection disclosure form long after the election. [20] In that case we observed that the candidate's violations cannot be characterized as trivial, and expressly reserved the question whether a trivial violation could trigger the forfeiture sanction. [21] These cases are distinguishable from the present situation. We agree with the superior court that there is a difference between strictly enforcing election filing deadlines, and measuring the extent to which a disclosure complies with substantive requirements. Determining whether a candidate's disclosure statement is substantively in compliance with the requirements of the disclosure law is markedly more subtle than determining whether the statement was timely filed. Assessing compliance with filing deadlines is straightforward; a statement is either timely filed or it is not. Given the complexities of assessing substantive compliance, it is not apparent why the strict compliance standard applicable in the election-filing deadline cases should apply here. Grimm and McGahan also argue that a failure to comply with the substance of AS 39.50.030 is actually a failure to satisfy the filing deadline, because the statute requires disclosure of all relevant interests. [22] They reason that Wagoner's disclosure statement was not complete, and was therefore not timely. But this argument tells us nothing about whether the timely filed disclosure was substantively sufficient. Accepting the plaintiffs' logic, any disclosure deficiency no matter how trivial would be an untimely filing. We reserved in Marshall the question whether forfeiture could be triggered by trivial failures to comply with disclosure requirements. [23] That reservation implicitly recognized the difference between substantive compliance and compliance with filing deadlines. We decline to merge substantive compliance with deadline compliance, and conclude that neither the statute nor Alaska precedent specifies the level of substantive compliance required to avoid forfeiture of office under AS 39.50.060(b).
Grimm and McGahan's private enforcement action under AS 39.50.100 seeking an AS 39.50.060(b) forfeiture necessarily assumed that Wagoner failed to satisfy AS 39.50.030. [24] Subsection .030(a) requires that each disclosure statement be an accurate representation of the financial affairs of the public official or candidate. [25] The criterion for measuring compliance with the substantive requirements of AS 39.50 is therefore whether the disclosure provides an accurate representation of the candidate's finances. To apply subsection .060(b)'s penalty provisions, at a minimum a court would have to find that a candidate failed to provide an accurate representation under subsection.030(a). Is strict compliance with the disclosure requirements necessary to provide an accurate representation of a candidate's finances? The answer is no. Accurate means variously in exact conformity to fact, or conforming closely to a standard. [26] Use of representation as part of the statutory standard is more consistent with the latter definition. A representation is a depiction or description, [27] and the phrase accurate representation implies close conformity rather than absolute precision. An accurate representation does not necessarily connote or imply flawless perfection; it can be achieved with something less than absolute exactitude. We therefore read accurate representation in subsection .030(a) as not precluding a substantial compliance standard for enforcement of subsection .060(b). A candidate can comply with subsection .030(a) for the purposes of subsection .060(b) without strictly complying with the substantive disclosure requirements.
Enforcing AS 39.50.060(b) for failing to substantially comply with the disclosure requirements is consistent with the statutorily declared purposes of the disclosure statute. Alaska Statute 39.50.010(a) lists these purposes: (1) to discourage public officials from acting upon a private or business interest in the performance of a public duty; (2) to assure that public officials in their official acts are free of the influence of undisclosed private or business interests; (3) to develop public confidence in persons seeking or holding public office, enhance the dignity of the offices and make them attractive to citizens who are motivated to public service; and (4) to develop accountability in government by permitting public access to information necessary to judge the credentials and performance of those who seek and hold public office. These purposes call for an accurate representation of a candidate's financial interests, but they do not require or imply absolute precision. In the context of subsection.060(b), mandatory forfeiture for public officials who do not strictly comply with the substantive disclosure requirements is not necessary to effectuate these goals. Grimm and McGahan argue that [d]isclosure of the candidate's financial and business interests is required so that voters can make an informed decision at the ballot box. Public access to accurate information is necessary to ensure governmental integrity, but minor errors in disclosure statements do not interfere with the public's ability to judge the credentials of candidates for public office. It would also seem that the expressed purpose of attracting citizens to public office would be defeated if trivial or inconsequential errors could deprive voters of the officers they elected. [28] Furthermore, subsection .010(b)(5) asserts that reasonable disclosure requirements do not have the effect of chilling the exercise of the right of a qualified person to seek or hold public office. The prospect of mandatory forfeiture of elected office despite substantial compliance with AS 39.50 could chill interest in public office.
We have often stated that every reasonable presumption will be indulged in favor of the validity of an election. [29] There is a well-established policy favoring the stability of election results in the face of technical errors or irregularities not affecting election results. [30] We have explained this policy noting that [c]ourts are reluctant to permit a wholesale disfranchisement of qualified electors through no fault of their own, and `[w]here any reasonable construction of [a] statute can be found which will avoid such a result, the courts should and will favor it.' [31] In light of this policy, plaintiffs in Title 15 election contests carry a heavy burden. We have defined malconduct under AS 15.20.540 as a significant deviation from statutorily or constitutionally prescribed norms. [32] And as discussed previously, to maintain an election contest under AS 15.20.540, plaintiffs must demonstrate an effect on the outcome of an election. Rigidly applying a forfeiture sanction for inconsequential violations is inconsistent with the presumptive validity of election results, and the well-established policy favoring election results in the face of technical irregularities. [33] Furthermore, applying a forfeiture sanction for failures to strictly comply with disclosure requirements would significantly undermine the high burdens we have applied in election contests, and the statutorily required showing of an effect on the outcome of the election. [34] A strict compliance standard under AS 39.50.060(b) would thwart voter intent in contravention of Alaska law. Substantial compliance is more consistent with Alaska's election jurisprudence. Of course AS 15.20 contains substantive provisions that are not duplicated in AS 39.50. But it would be anomalous to impose the harsh remedy of forfeiture of elected office under AS 39.50.060(b) for an inconsequential disclosure omission given the high causal standard applicable to election contests.
We also note that APOC regulations support the adoption of a substantial compliance standard. Given the lack of statutory specificity discussed above, APOC regulations serve as a useful interpretive aid. APOC's [p]rocedures for incomplete statements from candidates for state elective office specify that the lieutenant governor may not certify the election of a candidate who has not supplied required information on a major source of income, interest in real property, business interest, loan, or trust. [35] (Emphasis added.) Furthermore, 2 Alaska Administrative Code (AAC) 50.127(d) states that if information discovered after the withdrawal-of-candidacy deadline indicates that a candidate ... has failed to comply substantially with the requirements of AS 39.50 ... the staff of the commission shall undertake a preliminary investigation. (Emphasis added.) Moreover, 2 AAC 50.110(c)(1) states that APOC staff may recommend a ten dollar per day fine if the filer failed to comply substantially with AS 39.50... by failing to report in the filer's statement a major source of income, interest in real property, business interest, loan, trust, or other substantial financial interest. (Emphasis added.) Agency interpretations are not binding on our interpretation of a statute, [36] but APOC's regulations provide useful guidance here. In the analogous context of administrative appeals, when a question of law involves agency expertise we will defer to [an] agency's interpretation of a law unless it is unreasonable. [37] APOC's adoption of a substantial compliance standard implies that APOC has interpreted its enabling statute to require that standard or at least to be consistent with that standard. Further, it would seem incongruous to impose a forfeiture sanction if there is substantial but not strict compliance, when substantial compliance is the standard APOC has adopted in deciding whether to undertake an investigation or impose a civil penalty. Moreover, both the regulations and AS 39.50 contemplate a graduated response for disclosure violations. Under 2 AAC 50.110 the civil penalty for incomplete disclosures increases after fifteen days of lateness, and the maximum per diem fine is available for continuous failures, or failures to comply substantially with the disclosure requirements. [38] Alaska Statute 39.50.060(a) provides criminal penalties for officials who refuse[ ] or knowingly fail[ ] to comply, and sections .070 and.080 prevent confirmation of executive officials and commissioners until they comply. The opportunity to cure disclosure defects in sections .070 and .080 for officials subject to subsection .060(b), and the criminal penalties of subsection .060(a), indicate a measured approach to disclosure violations. [39] Context implies that forfeiture of office is only available for more serious offenses. Imposing a forfeiture sanction for failing to strictly comply would produce disproportionate results under this enforcement regime. Grimm and McGahan argue that applying a substantial compliance standard would very likely create more, rather than fewer, conflicts in the enforcement of election filing deadlines. But applying a strict compliance standard for the forfeiture penalty is not consistent with the enforcement regime. We also think that reserving the post-election forfeiture penalty for failures to substantially comply with the disclosure requirements will not unduly burden APOC or the courts in enforcing the disclosure law. For the reasons we discuss in Parts III. E.1-5, we conclude that substantial compliance is the appropriate standard for imposing the forfeiture remedy of AS 39.50.060(b).