Opinion ID: 4580544
Heading Depth: 2
Heading Rank: 2

Heading: Circulator compensation

Text: ¶28 The Committee hired AZ Petition Partners, LLC (“Petition Partners”), a signature-gathering business, to obtain enough signatures to qualify the Initiative for the ballot. Petition Partners employed registered circulators and paid them an hourly rate on a weekly basis to collect signatures on petitions for all Petition Partners’ clients, including the Committee. ¶29 Although three pay scales applied while the Initiative petitions circulated, they operated similarly. The scales had multiple levels, each of which set an hourly rate and an expected average numberrange of signatures to be gathered each hour. The higher the productivity expectation the higher the rate, and vice versa. Circulators were eligible to move up or down the pay scale from week to week depending on whether they exceeded or fell below their level’s productivity expectation the week before and the existence of other factors, such as the number of hours worked and how the circulators conducted themselves. All adjustments to hourly rates were prospective only. ¶30 Circulators could also earn additional money each week through incentive programs. One such program offered in June 2020 permitted circulators to spin a wheel for prizes each Monday when they turned in collected signatures. The prizes ranged from $10 to $100, an extra hour of pay, or double these “spins.” ¶31 The superior court rejected Challengers’ arguments that Petition Partners’ hourly rate structure and the “spin-the-wheel” program violated § 19-118.01(A), which prohibits paying circulators “based on the number of signatures collected.” It agreed with Challengers that four other incentive programs violated § 19-118.01(A). But after approximating the number of disqualified signatures, the court concluded that more than 300,000 valid signatures remained, which was “well in excess of the legal requirement.” 12 JAIME A. MOLERA et al. v. KATIE HOBBS et al. Opinion of the Court A. Hourly rate structure and spin-the-wheel program ¶32 In 2017, the legislature enacted § 19-118.01(A), which provides: A person shall not pay or receive money or any other thing of value based on the number of signatures collected on a statewide initiative or referendum petition. Signatures that are obtained by a paid circulator who violates this section are void and shall not be counted in determining the legal sufficiency of the petition. Paying or receiving compensation in violation of this restriction is punishable as a class one misdemeanor. § 19-118.01(B). ¶33 Challengers argue that Petition Partners’ “forward-looking rates” and the spin-the-wheel program violated § 19-118.01(A) because they were “based on” the number of signatures collected the prior week. The Committee counters, and the superior court agreed, that § 19-118.01(A) imposes a narrower restriction and does not preclude consideration of productivity in compensating circulators. ¶34 Resolving this dispute depends on the meaning of “based on” in § 19-118.01(A), an issue we review de novo. See Ariz. Chapter of the Associated Gen. Contractors of Am., 247 Ariz. at 47 ¶ 7. “In doing so, ‘[w]e interpret statutory language in view of the entire text, considering the context and related statutes on the same subject.’” Id. (quoting Nicaise v. Sundaram, 245 Ariz. 566, 568 ¶ 11 (2019)). If the language is clear and has only one reasonable meaning, we will apply that meaning. See State v. Francis, 243 Ariz. 434, 435 ¶ 6 (2018). But if the language is susceptible to more than one reasonable meaning, we apply secondary interpretive principles, such as considering “the statute’s subject matter, historical background, effect and consequences, and spirit and purpose.” See Rosas v. Ariz. Dep’t of Econ. Sec., 249 Ariz. 26, 28 ¶ 13 (2020). ¶35 The legislature did not define “based on,” so we give the term its common meaning. See Chaparro v. Shinn, 248 Ariz. 138, 141 ¶ 14 (2020). Dictionaries define the verb “base,” in relevant part, as “to use as a base or basis for: establish, found,” see Base, Webster’s Third New International Dictionary (3d ed. 2002), and “to ground,” see Base, Black’s Law Dictionary (11th ed. 2019). Applying these definitions, § 19-118.01(A) is violated if the 13 JAIME A. MOLERA et al. v. KATIE HOBBS et al. Opinion of the Court compensation paid to a circulator for collecting signatures is dependent on or calculated by, in whole or in part, the number of signatures collected during the compensation period. Thus, for example, § 19-118.01(A) prohibits a circulator from being paid per signature, per completed signature sheet, or by an hourly, daily, or weekly rate that is contingent on collecting a specified number of signatures. ¶36 We reject Challengers’ assertion that “based on” “indicates a broad connection between two things,” and Petition Partners was therefore prohibited from basing prospective hourly rates on, or otherwise rewarding circulators for, past productivity. The plain meaning of “base,” which uses descriptors like “ground[ing],” “establish[ing],” and “foundation[al]” rather than words like “relating to” does not support this view. But even if “based on” could reasonably mean “a broad connection between two things,” we would reject this interpretation in favor of our narrower one after applying secondary interpretive principles. See Rosas, 249 Ariz. at 28 ¶ 13. ¶37 First, adopting a narrow interpretation of “based on” avoids possible constitutional conflict. See Slayton v. Shumway, 166 Ariz. 87, 92 (1990) (“[W]here alternate constructions are available, we should choose that which avoids constitutional difficulty.”). By limiting how circulators may be paid, § 19-118.01(A) restricts “core political speech,” and the constitutionality of the provision depends on the severity of the burden imposed and its justification. See Meyer v. Grant, 486 U.S. 414, 421–22, 428 (1988) (holding that a Colorado statute prohibiting payment of initiative petition circulators imposed an unjustified burden on core political speech and therefore violated the First and Fourteenth Amendments). Courts in other jurisdictions have upheld bans on per-signature compensation for circulators. See, e.g., Prete v. Bradbury, 438 F.3d 949, 962 (9th Cir. 2006) (distinguishing Meyer because the per-signature ban simply “prohibit[ed] one method of payment”); Person v. N.Y. State Bd. of Elections, 467 F.3d 141, 143 (2d Cir. 2006) (to similar effect); Initiative & Referendum Inst. v. Jaeger, 241 F.3d 614, 618 (8th Cir. 2001) (to similar effect). The Sixth Circuit, however, struck an Ohio law that limited circulator compensation to pay “on the basis of time worked.” Citizens for Tax Reform v. Deters, 518 F.3d 375, 377 (6th Cir. 2008). The court reasoned that “[w]hile petitioners are not constitutionally guaranteed an endless variety of means, when their means are limited to volunteers and to paid hourly workers who cannot be rewarded for being productive and arguably cannot be punished for being 14 JAIME A. MOLERA et al. v. KATIE HOBBS et al. Opinion of the Court unproductive, they carry a significant burden in exercising their right to core political speech.” Id. at 386–87. ¶38 The constitutionality of § 19-118.01(A) is not before us. Regardless, we are further persuaded to reject Challengers’ broad interpretation of the statutory restriction to minimize any First Amendment infringement on core political speech. See Slayton, 166 Ariz. at 92. ¶39 Second, the legislative history for § 19-118.01(A) supports a narrow interpretation of “based on.” See Rosas, 249 Ariz. at 28 ¶ 13. The legislature found that other states had “enacted prohibitions on payment per signature” to “reduce fraud in the signature collecting process,” and that evidence “suggest[ed] that circulators paid by the hour [] have a higher validity rate than those paid by the signature.” 2017 Ariz. Sess. Laws. ch. 52, § 5 (1st Reg. Sess.). The bill’s sponsor similarly testified at a House committee hearing that the provision would end “the practice of paying circulators per signature.” The House rules attorney, apparently aware that the legislature was swimming in constitutionally choppy waters, explained at another hearing that “after lots of discussion” among lawyers, the proposed “restriction against petition circulators being paid on a per signature basis” was likely constitutional because it was “similar enough” to the ban upheld in Prete that it “could be upheld.” The legislature’s focus on eradicating the practice of per-signature payments, and its awareness of the constitutional implications of restricting other circulator compensation methods, demonstrate it intended a narrow application of the term “based on.” ¶40 Finally, we are persuaded to apply a narrow interpretation of “based on” by considering the practical application of Challengers’ broader view. See Rosas, 249 Ariz. at 28 ¶ 13. Interpreting “based on” as a “broad connection between two things” would mean that circulators’ compensation could not relate in any way to their only assigned task— collecting signatures. Taken to its logical conclusion, Challengers’ interpretation would prohibit a sponsor from requiring circulators to gather any number of signatures as doing so would constitute payment “based on the number of signatures collected.” Such a result would be peculiar considering the legislature permits the practice of paying circulators to collect signatures, see A.R.S. § 19-118, and it would likely violate the First and Fourteenth Amendments as described in Meyer. 15 JAIME A. MOLERA et al. v. KATIE HOBBS et al. Opinion of the Court ¶41 Turning to the record here, we agree with the superior court that Petition Partners’ graduated hourly wage scales did not violate § 19118.01(A). Petition Partners paid circulators “based on” the number of hours worked each week at fixed hourly rates, regardless of the number of signatures collected. Its prospective adjustment to hourly rates in light of a circulator’s past productivity did not make subsequent payments at the new rate “based on the number of signatures collected.” Payment at the new rate remained payment for the hours worked rather than the number of signatures collected. ¶42 The superior court likewise did not err by rejecting the challenge to the spin-the-wheel program as violating § 19-118.01(A). The court ruled that Challengers had failed to prove a “correlation to actual number of signatures turned in and a circulator’s ability to ‘spin the wheel.’” It further found that “[t]his program appeared to be used to enhance morale among petition circulators” rather than to compensate for signatures. We defer to the court’s factual findings if supported by sufficient evidence, but we review whether Challengers proved a violation of § 19-118.01(A) de novo. See Helvetica Servicing, Inc. v. Pasquan, 249 Ariz. 349, 352 ¶ 10 (2020). ¶43 The record supports the court’s factual findings. Petition Partners advertised that a circulator could spin the wheel once or twice, depending, in part, on the number of self-reported signatures collected. If the program operated that way, whether it violated § 19-118.01(A) would be a closer question. But the evidence at trial showed that a circulator did not have to collect any number of signatures to spin the wheel. ¶44 Circulator Colby Jensen testified he “[didn’t] know of any prerequisites” to spin the wheel, including “the number of signatures [a circulator] collected.” He characterized the program as “a fun thing at the end of turn-in to keep everyone from getting depressed having to stand in a parking lot around a ton of people for hours,” and said he never saw anyone turned away from spinning the wheel who wanted to. ¶45 Petition Partners manager Tom Bilsten similarly described the program as a “show” and stated that the number of self-reported signatures did not disqualify a circulator from spinning the wheel. He said Petition Partners “did not deny anyone an opportunity to spin the wheel as long as they were an employee in good standing and they were nice to people.” Bilsten emphasized that Petition Partners never conditioned a spin-the16 JAIME A. MOLERA et al. v. KATIE HOBBS et al. Opinion of the Court wheel opportunity on the number of signatures collected by a circulator. Owner Andrew Chavez echoed this testimony, stating that “people who actually didn’t get their signatures . . . spun the wheel too.” ¶46 In light of this evidence, the superior court did not err in ruling that the spin-the-wheel program did not violate § 19-118.01(A). Because circulators did not spin the wheel in exchange for collecting a specific number of signatures but did so as a consequence of employment, the prizes were not payments “based on the number of signatures collected.” B. Identifying disqualified signatures ¶47 Challengers next argue the superior court incorrectly disqualified only signatures collected by circulators during the weeks they participated in one or more of the bonus programs that violated § 19-118.01(A). They assert that § 19-118.01(A) disqualifies all signatures collected by those circulators even when they were paid in compliance with that statute. We disagree. ¶48 Section 19-118.01(A) could reasonably mean that all signatures ever gathered by a circulator are disqualified or that only signatures gathered when the circulator was paid in violation of the statute are disqualified. We adopt the latter interpretation because it serves the legislative purpose in reducing fraud in the signature collecting process, see supra ¶ 39, while imposing a lesser burden on core political speech, see supra ¶¶ 37–38. C. Preliminary injunction ¶49 Challengers finally argue the superior court erred by refusing to preliminarily enjoin the Initiative from the ballot to permit them to conduct discovery to identify the number of signatures collected during the weeks circulators were paid bonuses in violation of § 19-118.01(A). We review the denial of a preliminary injunction for an abuse of discretion. Valley Med. Specialists v. Farber, 194 Ariz. 363, 370 ¶ 21 (1999). ¶50 The superior court ruled that Challengers did not have a strong likelihood of successfully voiding enough signatures to keep the Initiative from the ballot. See Apache Produce Imps., LLC v. Malena Produce, Inc., 247 Ariz. 160, 164 ¶ 10 (App. 2019) (listing “a strong likelihood of success” on the merits as a consideration in ruling on a preliminary injunction request). Although the court found that 146 circulators 17 JAIME A. MOLERA et al. v. KATIE HOBBS et al. Opinion of the Court received weekly compensation that included improper payments, the record did not reflect exactly how many signatures were collected during those weeks. Regardless, the court reasoned that even if those circulators worked forty hours per week and collected twelve signatures per hour— the maximum collected by the most productive circulators—only 70,080 signatures would be voided. Because the Secretary had approved 377,456 signatures, subtracting the voided signatures would leave more than the 237,645 signatures required to place the measure on the ballot. ¶51 Challengers argue that their inability to demonstrate a likelihood of success on the merits was “tied to [the Committee’s] failure to maintain sufficient records,” and so the Committee “should bear the burden of proving that the circulators who were improperly paid collected too few ballots to enjoin the Initiative.” Even if we agreed, we fail to see how enjoining the Initiative to permit discovery would have remedied insufficient record-keeping or a misplaced burden of proof. Regardless, we reject Challengers’ implicit premise that the Committee was obligated to maintain any records linking circulator compensation to the number of signatures collected. Neither § 19-118.01(A) nor any other authority cited by Challengers required such record-keeping. ¶52 We also disagree that Challengers’ burden to prove the invalidity of petition signatures by clear and convincing evidence, see Leach v. Reagan, 245 Ariz. 430, 437 ¶ 30 (2018), shifted to the Committee to prove that the number of signatures collected under the improper bonus programs were too few to disqualify the Initiative. The caselaw relied on by Challengers shifts the burden of coming forward with evidence, not the burden of proof, “[w]hen proof of a negative assertion lies ‘peculiarly within the knowledge of the adverse party.’” See Woerth v. City of Flagstaff, 167 Ariz. 412, 419 (App. 1990) (quoting Sw. Cotton Co. v. Ryan, 22 Ariz. 520, 533 (1921)); see also Parker v. City of Tucson, 233 Ariz. 422, 432 ¶ 24 n.9 (App. 2013). Here, Challengers were not tasked with proving a negative by establishing the number of signatures that were collected by 146 circulators during the weeks in which they received payment in violation of § 19118.01(A). ¶53 In sum, the superior court did not err by ruling that Petition Partners’ graduated hourly rate scale and spin-the-wheel program complied with § 19-118.01(A). The court correctly disqualified only signatures collected by circulators during the pay periods in which they were paid bonuses that violated § 19-118.01(A), and properly denied Challengers’ request for a preliminary injunction. In light of our holding, 18 JAIME A. MOLERA et al. v. KATIE HOBBS et al. Opinion of the Court we need not address the Committee’s arguments that the court erred by invalidating any signatures under § 19-118.01(A).