Court Opinion

ID: 9790416
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:52:40.723042+00
Date Added: 2024-06-11T07:37:29.410577
License: Public Domain

PANELLI, J., Concurring.
I concur in the majority opinion except for part A.l of the discussion, which concerns the definition of materiality in prosecutions for perjury under the Political Reform Act of 1974. In my view, the first of the majority’s two definitions is so subjective that it will be difficult to apply fairly or predictably. According to the majority, “an omission or misstatement of fact is material if there is a substantial likelihood that a reasonable person would consider it important in evaluating (1) whether a candidate should be elected to, or retained in, public office, . . .” (Maj. opn., ante, at pp. 406-407.) The problem is that a reasonable person may properly consider anything to be important in evaluating whether a candidate should be elected to public office. The law gives citizens, acting in the capacity of voters, absolutely unrestricted and unreviewable discretion to vote for or against a candidate for any reason whatsoever, even for an invalid reason (e.g., race, sex, religion) that would offend constitutional principles if used as the basis for another decision. A juror asked to apply this standard to determine whether a candidate’s omission from a disclosure statement was “material” is asked, essentially, to consult his subjective biases.
In my view, the source of the problem is the majority’s effort to make too much of the analogy to proxy statements. (See maj. opn., ante, at pp. 405-406.) In the context of economic behavior it made sense for the United *422States Supreme Court, interpreting the federal securities laws, to refer to a hypothetical “reasonable shareholder”—an ordinarily risk-averse investor motivated by the desire to maximize value. (See TSC Industries, Inc. v. Northway, Inc. (1976) 426 U.S. 438, 449 [48 L.Ed.2d 757, 766, 96 S.Ct. 2126].) In contrast, there does not exist an objective standard by which we can measure the reasonableness of a person’s behavior as a voter.
The analogy to proxy statements involves other difficulties, as well. Unlike a candidate’s financial disclosure statement, a proxy statement is intended to solicit votes. Accordingly, a candidate for a corporation’s board of directors may discuss in a proxy statement such things as the candidate’s experience, the corporation’s business plans, and other subjects of relevance to the question of who should run the company. In this broad context it made sense for the high court to hold that “[a]n omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote.” (TSC Industries, Inc. v. Northway, Inc., supra, 426 U.S. at p. 449 [48 L.Ed.2d at p. 766].)
A campaign disclosure statement has a much more limited purpose; it definitely is not a solicitation for votes. The Political Reform Act requires only disclosures related to financial matters and repeatedly informs us that the purpose of doing so is to inhibit “improper practices” (Gov. Code, § 81002, subd. (a)), to avoid “conflicts of interest” (id., § 81002, subd. (c)), and to ensure that officials “perform their duties in an impartial manner, free from bias caused by their own financial interests or the financial interests of persons who have supported them” (id., § 81001, subd. (b)).
Perhaps the majority’s treatment of the materiality issue is motivated by the desire to make the candidate’s disclosure statement more than it was intended to be. One senses this in the majority’s reliance on Government Code section 81002, subdivision (a), which mentions the goal of “fully informing” the voters. (Maj. opn., ante, at p. 406.) But that statute, read in context, does not fairly imply a purpose beyond the revelation of financial improprieties.1
Financial disclosure has a history in this state which the majority does not consider. In City of Carmel-by-the-Sea v. Young (1970) 2 Cal.3d 259, 269 [85 Cal.Rptr. 1, 466 P.2d 225, 37 A.L.R.3d 1313], we held a predecessor of the Political Reform Act unconstitutionally vague because it required disclosure of assets “without regard to the nature or locale of the asset or whether it bears the remotest relation to the duties of the public office *423. . . .” Informed by our decision in that case, the Legislature and the people subsequently approved financial disclosure requirements closely tailored to the goal of preventing conflicts of interest and other financial improprieties. (See County of Nevada v. MacMillen (1974) 11 Cal.3d 662, 671 [114 Cal.Rptr. 345, 522 P.2d 1345] [interpreting former Gov. Code, § 3600 et seq.]; Political Reform Act of 1974, added by initiative measure approved by the electors at the Primary Elec, of June 4, 1974 [codified as Gov. Code, § 81000 et seq.].)
With its subjective definition of “materiality,” the majority appears to endorse a concept of disclosure even broader than that which we rejected in City of Carmel-by-the-Sea v. Young, supra, 2 Cal.3d 259. Under the Political Reform Act, “[e]very person who signs and verifies any report or statement required to be filed under this title which contains material matter which he knows to be false is guilty of perjury.” (Gov. Code., § 81004, subd. (b).) According to the majority, materiality is now to be decided by 12 jurors, instructed to decide whether voters would have considered the candidate’s omission or misstatement important in deciding how to vote. While I do not doubt the Legislature’s, or the people’s, constitutional power to broaden the disclosure that candidates for public office are required to make, we should not do so ourselves.2

 “Receipts and expenditures in election campaigns should be fully and truthfully disclosed in order that voters may be fully informed and improper practices may be inhibited.” (Gov. Code, § 81002, subd. (a), italics added.)

 Rather than borrow a standard of materiality from federal securities law, I would defer to the electorate by looking to the Political Reform Act, itself. The people, in their “[findings and declaration,” clearly articulated the fundamental purpose of financial disclosure: “Public officials, whether elected or appointed, should perform their duties in an impartial manner, free from bias caused by their own financial interests or the financial interests of persons who have supported them.” (Gov. Code, § 81001, subd. (b).)
Faithful to the intent of the act, one might instruct jurors about materiality as follows, essentially in the statutory language: “A false statement in a required report is material if it is of substantial importance in determining whether a [public official is] [candidate would be] able to perform the duties of his or her office free from bias caused by his or her own financial interests or the financial interests of persons who have supported him or her.”