IN COURT OF APPEALS
Office of Administrative Hearings,
Stephen Jankowski, et al.,
Filed April 26, 2006
Administrative Hearings Office
File No. 12-6326-16420
Alain M. Baudry, Morgan L. Holcomb, Maslon Edelman Borman & Brand, L.L.P., 3300 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402-4140 (for respondent Steven Riley)
Erick G. Kaardal, William F. Mohrman, Mohrman & Kaardal, P.A., Suite 4100, 33 South Sixth Street, Minneapolis, MN 55402 (for relators Stephen Jankowski, et al.)
Considered and decided by Peterson, Presiding Judge; Shumaker, Judge; and Hudson, Judge.
S Y L L A B U S
I. Because administrative decisions rendered in the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 (2004) are subject to judicial review by certiorari and the hearing process provides an administrative remedy for statutory violations without altering the district court’s original jurisdiction to determine whether a criminal statute has been violated or removing from the executive branch of government the authority to decide whom to prosecute and what charges to file, the administrative-hearing process does not violate the separation-of-powers doctrine expressed in Minn. Const. art. III, § 1.
II. Because the rights and remedies provided by the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 did not exist when the Minnesota Constitution was adopted and the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 is not a criminal prosecution, a respondent to a complaint filed according to Minn. Stat. § 211B.32, subd. 1, is not entitled to a trial by jury under Minn. Const. art. I, §§ 4, 6.
III. Because Minn. Stat. §§ 211B.31 to .37 only establish a process for considering alleged violations of the substantive provisions of chapters 211A and 211B and do not impose any restrictions on speech, the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 does not violate First Amendment rights.
IV. To prove a violation of Minn. Stat. § 211B.06, subd. 1 (2004), a complainant must prove by clear and convincing evidence that a statement in campaign material is false and that the person who made the statement knew that it was false or made the statement while subjectively believing that the statement was probably false.
V. The disclaimer requirement of Minn. Stat. § 211B.04 (2004) directly regulates the content of pure speech in violation of the First Amendment.
O P I N I O N
In this proceeding arising out of a complaint about the content of certain campaign material, relators challenge the determination of respondent Office of Administrative Hearings (OAH) that relators violated Minn. Stat. §§ 211B.04 and .06 (2004) and must pay civil penalties. Relators argue that (1) the administrative-hearing process established by Minn. Stat. §§ 211B.31 to .37 (2004) (a) violates the separation-of-powers doctrine, (b) violates relators’ constitutional right to trial by jury, and (c) unconstitutionally intrudes on relators’ First Amendment rights; (2) respondent Steven Riley lacked standing to file a complaint under Minn. Stat. § 211B.32; (3) the panel of administrative-law judges that heard Riley’s complaint erred in finding that relators violated Minn. Stat. § 211B.06, subd. 1; and (4) the disclaimer requirement of Minn. Stat. § 211B.04 is an unconstitutional restriction on relators’ First Amendment rights. We reverse.
At a June 2003 council meeting, the council instructed city staff to put a sign on the property indicating that it was for sale and to also advertise the property on the city’s website. But no “for sale” sign was ever placed on the property. Instead, the property was advertised only via a link on the city’s website.
also expressed an interest in the Siwek property. Like Swanson, Mattila sought
the December 16, 2003 council meeting, the city had received four or five
letters of interest regarding the property, including Swanson’s letter. Mattila did not submit a letter of
in the year, Swanson had appointed Sykes as acting mayor, which authorized her
to perform the mayor’s duties in the event of his absence. As acting mayor, Sykes took over running the
December 16, 2003 council meeting when Swanson recused himself. After discussing the appraisals, on
Plack, who was a member of the Greenfield City Planning Commission and had run unsuccessfully for mayor in 2000, was present at the December 16, 2003 council meeting. Plack became outraged when he learned that Swanson and Mattila were considering bidding on the Siwek property. The next day, Plack drove by the Siwek property and saw that there was no “for sale” sign on it. Plack also called the state auditor’s office and spoke with attorney David Kenney, who told Plack that the sale of city-owned property to the mayor or a council member would be illegal.
January 2004, Kenney contacted
The city received three sealed bids on the Siwek property, none of which included special assessments. Neither Swanson nor Mattila submitted a bid. At the February 3, 2004 city council meeting, the council rejected all three bids as too low and decided to hire a realtor to market the property.
they were frustrated by what they perceived as arrogance and a lack of
communication by the city council and dissatisfied about a city ordinance
governing the use of all-terrain vehicles, Plack and another
filed to run for mayor in the November 2004 election. In a position statement issued as part of his
mayoral campaign, Plack encouraged voters to vote for him for mayor and Leonard
Jankowski and Walsh for city council. In
October 2004, Plack compiled a campaign mailing to send to all
The cover letter included in the mailing described Swanson’s and Mattila’s interest in the Siwek property and the city council’s decision at its December 16, 2003 meeting to authorize city staff to begin negotiations with interested parties. The final paragraph of the letter stated:
Why should you vote for Tom Swanson,
Roger Mattila or Cindy Sykes after they attempted to illegally profit (in the
case of Swanson and Mattila) or allow the profiting (in the case of Sykes) from
their elected positions. Every tax payer
Throw them out on November 2!
Stephen Jankowski, an attorney and Leonard Jankowski’s son, reviewed the cover
letter, approved its contents, and agreed to have the material sent out under
his name. The campaign material did not
contain a disclaimer, but the envelope had a sticker on it stating, “This
publication is not circulated on behalf of any candidate or ballot
question.” The packet was delivered to
Riley filed a complaint with the OAH alleging that Stephen Jankowski and Leonard Jankowski violated Minn. Stat. § 211B.06 (2004) by preparing and disseminating false campaign material. Riley filed two additional complaints alleging that Plack and Walsh violated Minn. Stat. § 211B.06 by disseminating false campaign material. An administrative-law judge (ALJ) determined that all four claims stated prima facie violations of Minn. Stat. § 211B.06, and the chief ALJ ordered that the four claims be joined for disposition under Minn. Stat. § 211B.33, subd. 4 (2004). A panel of ALJs granted Walsh’s motion to dismiss the claim against her and granted Riley’s motion to add claims against relators and Leonard Jankowski for failing to have a proper disclaimer on the campaign material as required by Minn. Stat. § 211B.04 (2004).
Following a two-day evidentiary hearing on the complaints, a panel of ALJs issued an order that dismissed the claims against Leonard Jankowski; found that relators had violated Minn. Stat. §§ 211B.04 and .06; ordered relators to each pay civil penalties of $2,400 for violating Minn. Stat. § 211B.06 and $600 for violating Minn. Stat. § 211B.04; and referred the matter to the Hennepin County Attorney’s Office for further consideration pursuant to Minn. Stat. § 211B.35, subd. 2 (2004). This certiorari appeal follows.
I. Does the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 (2004) violate the separation-of-powers doctrine expressed in article III, section 1, of the Minnesota Constitution?
II. Were relators’ rights to trial by jury violated in the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37?
III. Were relators’ First Amendmant rights violated in the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37?
IV. Did respondent Riley lack standing to file a complaint under Minn. Stat. § 211B.32?
V. Did the ALJ panel that heard respondent Riley’s complaint err in finding that relators violated Minn. Stat. § 211B.06, subd. 1 (2004)?
VI. Is the disclaimer requirement of Minn. Stat. § 211B.04 (2004) an unconstitutional restriction on relators’ First Amendment rights?
Relators argue that the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 (2004) violates the separation-of-powers doctrine expressed in article III, section 1, of the Minnesota Constitution.
We review a statute’s constitutionality de novo. We presume statutes to be constitutional and exercise the power to declare a statute unconstitutional with extreme caution and only when absolutely necessary. The party challenging the constitutionality of the statute bears the burden of establishing beyond a reasonable doubt that the statute violates a constitutional right.
ILHC of Eagan, L.L.C. v.
In the hearing
process, the OAH, an executive-branch agency, considers complaints alleging
violations of Minn. Stat. §§ 211A.01 to .14 (2004), which establish
financial-reporting requirements for political candidates and committees acting
to influence the election of political candidates or to promote or defeat a
ballot question, and Minn. Stat. §§ 211B.01 to .21 (2004), which regulate
campaign practices. To initiate the
hearing process, “[a] complaint alleging a violation of chapter 211A or 211B must
be filed with the [OAH].” Minn. Stat.
§ 211B.32, subd. 1. If an expedited
probable-cause hearing is not required, the ALJ
assigned to review the complaint must hold a probable-cause hearing on the
complaint not later than 30 days after receiving the assignment.
The panel must determine whether the violation alleged in the complaint occurred and must make at least one of the following dispositions:
(a) The panel may dismiss the complaint.
(b) The panel may issue a reprimand.
(c) The panel may find that a statement made in a paid advertisement or campaign material violated section 211B.06.
(d) The panel may impose a civil penalty of up to $5,000 for any violation of chapter 211A or 211B.
(e) The panel may refer the complaint to the appropriate county attorney.
A party aggrieved by a final decision on a complaint . . . is entitled to judicial review of the decision as provided in sections 14.63 to 14.69; however, proceedings on a complaint . . . are not a contested case within the meaning of chapter 14 and are not otherwise governed by chapter 14.
Minn. Stat. § 211B.36, subd. 5.
Relators contend that the authority exercised by the OAH in the hearing process is different from the authority exercised by the OAH in other administrative proceedings because the hearing process does not involve an administrative agency that regulates or oversees campaign practices. Instead, the OAH considers individual complaints alleging statutory violations, finds facts and determines whether statutory provisions have been violated, and issues final decisions regarding the complaints. Relators contend that as a matter of constitutional law, the inherently judicial functions of hearing and deciding charges alleging violations of chapters 211A and 211B cannot be delegated to an agency in the executive branch of state government.
Minnesota Constitution article III, section 1 states:
The powers of government shall be divided into three distinct departments: legislative, executive and judicial. No person or persons belonging to or constituting one of these departments shall exercise any of the powers properly belonging to either of the others except in the instances expressly provided in this Constitution.
Minnesota Supreme Court has explained the limits of legislative authority to
delegate quasi-judicial power to the executive branch of state government. In Breimhorst
v. Beckman, 227
powers of determination do not partake of the finality of an adjudication, in
that the commission is without final authority to decide and render an
enforceable judgment, which is the essence of the judicial power. [The commission’s] awards and determinations
are not enforceable by execution or other process until a binding judgment is
entered thereon by a regularly constituted court. Administrative or quasi-judicial
determinations which are merely preparatory to an order or judgment to be
rendered by a court cannot be properly termed judicial. In addition, the legislature not only denied
an enforceable finality to the commission’s powers of factual determination, but
also made their exercise subordinate to the judiciary by providing for a review
by certiorari by this court of errors of law and on the ground that the
commission’s findings or orders are unsupported by the evidence. . . . In State ex rel. Yaple v. Creamer,
is not in violation of state constitutional provisions for the division of the powers of government or for the vesting of the judicial power in the courts, as long as the commission’s awards and determinations are not only subject to review by certiorari, but lack judicial finality in not being enforceable by execution or other process in the absence of a binding judgment entered thereon by a duly established court.
In Wulff v. Tax Court of Appeals, 288 N.W.2d 221, 222 (Minn. 1979), the petitioners argued that the existence of the tax court as an independent agency of the executive branch of state government violated the separation-of-powers doctrine in article III, section 1, of the state constitution. In holding that the existence of the tax court did not violate the separation-of-powers doctrine, the supreme court stated:
We believe that the criteria set out in Breimhorst mark the outside limit of
allowable quasi-judicial power in
That decision was mandated in great part by the important social issues presented. The critical need for a method of compensating victims of work-related accidents justified the delegation in that case. Such a pressing need is not present here.
This case presents additional problems because of the legal effect of Tax Court decisions. Unlike decisions of most administrative agencies, such as the one reviewed in Breimhorst, which require judicial enforcement, Tax Court decisions, upon filing, automatically become orders of the court. It is precisely this type of impingement by other branches of government on the judiciary that concerns us.
In view of the aforementioned, we are reticent to approve such a legislative scheme. There are, however, additional factors which influence our decision. One is the unique nature and history of taxation. . . .
* * * Taxation is primarily a legislative function, and the steps taken under the authority of the legislature are administrative in character, in which judicial assistance may be invoked as a matter of convenience, because, with its assistance, the rights of parties and the interests of the public can be best protected and conserved. But the legislature might have authorized such proceedings to be conducted from beginning to end before or by administrative officers or bodies. Such functions are not judicial in the strict sense.
Recognizing that this feature of taxation does distinguish it from many other areas of present or future administrative adjudication, we have more latitude in permitting such delegation.
Citing two provisions of the state constitution, the petitioners also argued in Wulff that the existence of the tax court unconstitutionally encroached on the jurisdiction of the district court. The statute that created the tax court provided:
The tax court shall have statewide jurisdiction. Except for an appeal to the supreme court or any other appeal allowed under this subdivision, the tax court shall be the sole, exclusive, and final authority for the hearing and determination of all questions of law and fact arising under the tax laws of the state, as defined in this subdivision, in those cases that have been appealed to the tax court and in any case that has been transferred by the district court to the tax court.
Under the state
constitution, “[e]very person is entitled to a certain remedy in the laws for
all injuries or wrongs which he may receive to his person, property or
character, and to obtain justice freely and without purchase, completely and
without denial, promptly and without delay, conformable to the laws.”
By providing this power to transfer, the legislature is not encroaching on the original jurisdiction of the district court. Because this power is discretionary, the decision to hear a case or to transfer it is entirely the court’s. This legislative grant takes nothing from the district court that it does not voluntarily relinquish. At the same time, we find no violation of Minn. Const. art. 1, s 8, since an individual with a tax dispute does not go remediless. A remedy is provided by the tax court, subject to and including judicial review.
In analyzing the framework created by the tax statutes in question, it is crucial to note that the taxpayer always has the option to file in district court. This is perhaps the saving feature of this statutory scheme. Because the taxpayer has this opportunity to elect a judicial determination, because any transfer to the Tax Court is discretionary with the district court, and because there is always an ultimate check on administrative power in the form of review as of right in this court, we are satisfied that the Tax Court statute does not usurp judicial functions nor deprive taxpayers of constitutional rights. Therefore, in its present form, it is not an impermissible delegation by the legislature.
recently, in Holmberg v. Holmberg,
588 N.W.2d 720 (
“all powers, duties, and responsibilities conferred on judges of district court to obtain and enforce child and medical support and parentage and maintenance obligations,” including the power to issue subpoenas, conduct proceedings according to administrative rules in district court courtrooms, and issue warrants for failure to appear. In addition, ALJs may modify child support orders, even those granted by district courts. While ALJs cannot preside over contested parentage and contempt proceedings, they can grant stipulated contempt orders and uncontested parentage orders if custody and visitation are also uncontested.
Holmberg court held that the administrative
child-support process violated the constitutional constraints on separation of
powers for three separate and independent reasons: the administrative process infringed on the
district court’s original jurisdiction; ALJ jurisdiction was not inferior to
the district court’s jurisdiction; and the administrative process empowered
nonattorneys to engage in the practice of law, “infringing on the court’s
exclusive power to supervise the practice of law.”
In determining if the original jurisdiction of the courts is being usurped, we look at the origins of the rights and relief, equitable or statutory, an agency oversees. . . . The Wulff court determined that the type of function delegated, judicial or legislative, plays a critical role in determining whether an administrative action impinges on the district court’s original jurisdiction.
Unlike the tax court, the administrative child support process encompasses an area of the law which arises in equity. Family dissolution remedies, including remedies in child support decisions, rely on the district court’s inherent equitable powers. Thus, cases involving family law fall within the district court’s original jurisdiction. The legislature’s delegation of an area of the district court’s original jurisdiction calls for this court’s close scrutiny.
. . . .
. . .
. . . .
The indicia that the Breimhorst court utilized in determining whether there was adequate judicial oversight are neither exclusive nor rigid. Rather, the Breimhorst court’s analysis points to the importance of a flexible review standard when considering whether a statute violates separation of powers. While supreme court decisions following Breimhorst have relied, in part, on public policy to affirm legislatively created administrative schemes, they have also been shaped by the existence of adequate judicial checks on administrative actors, the function delegated, ALJ decision appealability, voluntariness of entry into the administrative system, and whether the legislative delegation is comprehensive or piecemeal.
a. Citing Holmberg, relators argue that because the complaint filed against them with the OAH alleges a violation of Minn. Stat. § 211B.06 (gross misdemeanor to intentionally participate in production or dissemination of false political advertising or campaign material), delegating adjudication of the complaint to the OAH is an unconstitutional delegation of the district court’s original jurisdiction in criminal cases. But the fact that the OAH has been given authority to determine whether Minn. Stat. § 211B.06 has been violated does not mean that the proceeding before the OAH is a criminal case.
Relators’ argument appears to be based on a misreading of Minn. Stat. § 211B.32, subd. 1, which requires a complaint alleging a violation of chapter 211A or 211B to be filed with the OAH and states that “[t]he complaint must be finally disposed of by the [OAH] before the alleged violation may be prosecuted by a county attorney.” Relators appear to read this subdivision to mean that filing a complaint in the OAH is a necessary first step in a criminal prosecution for violating chapter 211A or 211B. But a county attorney may prosecute violations of chapter 211A and 211B. Minn. Stat. §§ 211A.08, subd. 3, 211B.16, subd. 3. And the plain language of Minn. Stat. § 211B.32, subd. 1, requires only that when a complaint has been filed, the OAH must finally dispose of the complaint before a county attorney can prosecute the same alleged violation. Nothing in the statutory language requires a county attorney to wait for a complaint to be filed before prosecuting a violation or limits a county attorney’s authority to prosecute an alleged violation when no complaint has been filed or after a final disposition under Minn. Stat. § 211B.35. The statute only requires that the administrative process and a criminal prosecution not occur simultaneously.
Even if we
consider the language of Minn. Stat. § 211B.32, subd. 1, to be ambiguous, we
conclude that the legislature did not intend the proceeding in the OAH to be a
criminal proceeding because the legislature specifically provided that in a
proceeding in the OAH, the standard of proof for an alleged violation of Minn.
Stat. § 211B.06 is clear and convincing evidence and the standard of proof
for any other alleged violations of chapter 211A or 211B is a preponderance of
Because the proceeding in the OAH is not a criminal prosecution, delegating the adjudication of complaints filed under Minn. Stat. § 211B.32, subd. 1, to the OAH is not an unconstitutional delegation of the district court’s original jurisdiction in criminal cases. A proceeding in the OAH and a criminal prosecution for any violation of chapter 211A or 211B are separate proceedings.
b. Relators argue that Minn. Stat. §§
211B.31 to .37 establish a court that is not inferior to the district court, in
violation of Minn. Const. art. III, § 1, and
Minnesota Constitution article VI, section 1, states, “The judicial power of the state is vested in a supreme court, a court of appeals, if established by the legislature, a district court and such other courts, judicial officers and commissioners with jurisdiction inferior to the district court as the legislature may establish.”
Relators contend that the factors that the Holmberg court considered when determining whether the child-support administrative-review process violated the separation-of-powers doctrine included the function delegated; the appealability of ALJ decisions; the adequacy of judicial checks on administrative actors; the voluntariness of entry into the administrative system; and whether the legislative delegation was comprehensive or piecemeal. Relators argue that applying these factors to the administrative-review process established under Minn. Stat. §§ 211B.31 to .37 demonstrates that the legislature has established an adjudicative body with powers that are not inferior to the district court.
(1) Relators argue that there are no checks
on the ALJ panels at the district court level and that an order from an ALJ
panel has judicial finality. But
relators also acknowledge that a party who is aggrieved by a final decision of
an ALJ panel “is entitled to judicial review of the decision as provided in
[Minn. Stat. §§] 14.63 to 14.69.” Minn.
Stat. § 211B.36, subd. 5.
(2) Relators argue that the function delegated to the ALJ panels is the power to determine whether a criminal statute has been violated and to finally dispose of a criminal case by issuing a fine, which, relators contend, is an inherently judicial function. But, as we have already discussed, the proceeding in the OAH is not a criminal proceeding, and, therefore, any disposition rendered by an ALJ panel cannot be the final disposition of a criminal case. Furthermore, one of the statutory dispositions that an ALJ panel may make is to “refer the complaint to the appropriate county attorney.” Minn. Stat. § 211B.35, subd. 2(e). If the legislature had intended the disposition made by an ALJ panel to be the final disposition of a criminal case, there would be no reason for allowing the panel to refer the complaint to a county attorney.
Also, relators’ contention that an ALJ panel may dispose of a complaint by issuing fines ignores the plain language of the statute, which states, “The panel may impose a civil penalty of up to $5,000 for any violation of chapter 211A or 211B.” Minn. Stat. § 211B.35, subd. 2(d). Although calling the penalty that an ALJ panel may impose a civil penalty, rather than a fine, does not, by itself, mean that a proceeding before the panel is a civil proceeding, the Minnesota Supreme Court has explained that
determining whether an action is “criminal or civil,” the intent of the
legislature and the purpose of the penalty controls.
State by Humphrey v. Alpine Air Prods., Inc., 500 N.W.2d 788, 792 (
“Whether the sanction involves an affirmative disability or restraint, whether it has historically been regarded as a punishment, whether it comes into play only upon a finding of scienter, whether its operation will promote the traditional aims of punishment -- retribution and deterrence, whether the behavior to which it applies is already a crime, whether an alternative purpose to which it may rationally be connected is assignable for it, and whether it appears excessive in relation to the alternative purpose assigned are all relevant to the inquiry, and may often point in differing directions.”
The civil penalty that an ALJ panel may impose does not involve any affirmative restraint. Although paying money is a punishment, it has historically been viewed as serving nonpunitive purposes. Alpine Air Prods., 500 N.W.2d at 792. Some violations of chapters 211A and 211B require a finding of scienter and some do not. Presumably, a civil penalty will deter violations of chapters 211A and 211B, but these violations are already subject to criminal penalties under Minn. Stat. §§ 211A.11 and 211B.19, and the civil penalty permitted under Minn. Stat. § 211B.35, subd. 2(d), is rationally connected to the alternative purpose of providing a range of dispositions in an expeditious proceeding for considering complaints alleging violations during the course of ongoing political campaigns, when it is unlikely that either a civil or criminal action could be completed before election day. Finally, the maximum $5,000 civil penalty does not appear excessive in relation to this purpose.
(3) Quoting two phrases from Holmberg, 588 N.W.2d at 726, relators contend that “the Court in Holmberg held that ‘the right to appellate review does not provide sufficient judicial oversight . . .’ because ‘many participants in the administrative process lack the resources to mount an appeal.’” Relators argue that the same is true here in that the typical respondent in a proceeding before the OAH “would be a political candidate who has already likely overextended himself or herself for the campaign” and who “would be especially hard pressed to pursue an appeal.” But in making this argument, relators have quoted the two phrases from Holmberg out of context and have misstated the basis for the holding in Holmberg. The two phrases that relators quoted appear in the following paragraph from Holmberg:
Under the criteria by which our court has measured the constitutional validity of specific statutory schemes, the administrative child support process raises grave separation of powers concerns. With its creation of the administrative process, the legislature has delegated to an executive agency the district court’s inherent equitable power. This delegation infringes on the district court’s original jurisdiction. Not only are ALJs given responsibilities and powers comparable to a district court, but ALJs also have the power to modify district court decisions. Finally, although appellants encourage us to rely on the availability of appellate review to conclude that there is adequate judicial supervision of the administrative process, the right to appellate review does not provide sufficient judicial oversight of this mandatory, albeit piecemeal, process. We find their contention particularly troubling in this instance, as many participants in the administrative process lack the resources to mount an appeal.
588 N.W.2d at 725-26 (emphasis added).
When the two quoted phrases are read in the context of the entire paragraph in which they appear, it is apparent that the supreme court did not hold in Holmberg that the right to appellate review does not provide sufficient judicial oversight because many participants in the administrative process lack the resources to mount an appeal. The supreme court found multiple reasons why appellate review did not provide sufficient judicial oversight to overcome the separation-of-powers concerns arising out of the administrative process in Holmberg and merely observed that the claim that appellate review was sufficient to overcome these concerns became even more troubling when many of the people who used the administrative process lacked the resources to mount an appeal to obtain even this insufficient oversight.
(4) Citing a concurring opinion in Meath v. Harmful Substance Compensation Bd.,
550 N.W.2d 275, 284 (
opinion in Meath recognized two
different circumstances under which actions taken by an administrative entity are
not “judicial” acts because the actions are not final. The first circumstance was present in Breimhorst and Wulff, where the administrative actions taken were not final
because judicial review was available.
(5) Finally, relators argue that by failing to apply the hearing process established under Minn. Stat. §§ 211B.31 to .37 to other election statutes, the legislature established a piecemeal process for enforcing election statutes. The only other election statute that relators cite is chapter 10A, Minn. Stat. §§ 10A.01 to .37 (2004), which regulates campaign finance and public disclosure of expenditures related to political activity. Section 10A.02 creates the Campaign Finance and Public Disclosure Board and grants the board authority to enforce the provisions of sections 10A.01 to .37. The authority of the board with respect to sections 10A.01 to .37 appears similar in some respects to the authority of the OAH with respect to chapters 211A and 211B, and it is not apparent why the legislature chose to grant authority for regulating campaign activity to more than one administrative entity.
But considering all of the factors that relators have cited as reasons why the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 violates the separation-of-powers doctrine, we conclude that the process is much more similar to the process in Breimhorst, which the supreme court concluded did not violate the separation-of-powers doctrine, than to the process that the supreme court invalidated in Holmberg.
The powers of the ALJs in Holmberg significantly exceeded the powers granted to ALJs under Minn. Stat. §§ 211B.31 to .37. As the supreme court stated in Holmberg, the statute that created the child-support administrative review process explicitly granted “ALJs all powers, duties, and responsibilities conferred on judges of district court to handle child support cases. Arguably, ALJs are even superior in some respects as ALJs are empowered to modify child support orders granted by district courts.” Holmberg, 588 N.W.2d at 724-25 (quotation and citation omitted). In contrast, ALJs considering unfair-campaign-practices complaints only have authority to hear evidence and determine whether the violation alleged in the complaint occurred, and, depending on their determination, render one or more of five specific statutory dispositions. Unlike the ALJs in Holmberg, they cannot modify a district court decision; their decisions are not granted the same deference as a district court order on appeal; and they do not take the place of the district court in criminal proceedings to enforce the provisions of chapters 211A and 211B as the Holmberg ALJs did in certain child-support cases.
c. Relators argue that Minn. Stat. §§
211B.31 to .37 violate the separation-of-powers doctrine by removing from the
executive branch the power to decide whom to prosecute and what offenses to
charge. “Under our separation of powers
doctrine, the power to decide whom to prosecute and what charge to file resides
with the executive branch.” Johnson v. State, 641 N.W.2d 912, 917 (
argument that Minn. Stat. §§ 211B.31 to .37 usurp the district court’s original
jurisdiction in criminal cases, this argument appears to be based on the mistaken
belief that filing a complaint in the OAH is the necessary first step in a
criminal prosecution for violations of chapters 211A and 211B. As we have already explained, a proceeding in
the OAH is not a criminal proceeding, and Minn. Stat. §§ 211B.31 to .37 do not
alter a county attorney’s authority to prosecute violations of chapters 211A
We conclude that relators have not met their burden of establishing beyond a reasonable doubt that the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 violates the separation-of-powers doctrine.
argue that their right to trial by jury was violated by the administrative
hearing process established under Minn. Stat. §§ 211B.31 to .37. “In all criminal prosecutions the accused
shall enjoy the right to a speedy and public trial by an impartial jury of the
county or district wherein the crime shall have been committed, which county or
district shall have been previously ascertained by law.”
Relators argue that if the administrative-hearing process is a civil proceeding, they are entitled to a jury trial under Minn. Const. art. I, § 4, which states, “The right of trial by jury shall remain inviolate, and shall extend to all cases at law without regard to the amount in controversy.”
is intended to continue, unimpaired and inviolate, the right to trial by jury
as it existed in the
Relators cite no authority that the rights and remedies provided by the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 existed when the Minnesota Constitution was adopted. Instead, they argue that the complaint against them alleged a violation of Minn. Stat. § 211B.06, which, they contend, is virtually identical with a defamation claim, and, therefore, makes the complaint a cause of action at law for which they are entitled to a jury trial. We disagree.
Minn. Stat. § 211B.06, subd. 1, states:
A person is guilty of a gross misdemeanor who intentionally participates in the preparation, dissemination, or broadcast of paid political advertising or campaign material with respect to the personal or political character or acts of a candidate, or with respect to the effect of a ballot question, that is designed or tends to elect, injure, promote, or defeat a candidate for nomination or election to a public office or to promote or defeat a ballot question, that is false, and that the person knows is false or communicates to others with reckless disregard of whether it is false.
“In order for a statement to be considered
defamatory it must be communicated to someone other than the plaintiff, it must
be false, and it must tend to harm the plaintiff’s reputation and to lower him
in the estimation of the community.” Stuempges v. Parke, Davis & Co., 297
N.W.2d 252, 255 (
argue that the administrative-hearing process established under Minn. Stat.
§§ 211B.31 to .37 is an unconstitutional intrusion on their First
Amendment rights. Citing Brown v. Hartlage, 456
United States Supreme Court concluded that the
read the Supreme Court’s use of the phrase “absolute accountability for factual
misstatements” as part of the court’s explanation why the
Relators have not met their burden of establishing beyond a reasonable doubt that the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 is an unconstitutional intrusion on their First Amendment rights.
argue that Riley lacked standing to file a complaint under Minn. Stat. § 211B.32. But relators did not raise this issue before
the ALJ panel. Generally, failure to
raise an issue in an administrative proceeding precludes review on appeal. REM-Canby,
Inc. v. Minn. Dept. of Human Servs., 494 N.W.2d 71, 76 (
The ALJ panel determined that relators violated Minn. Stat. § 211B.06, subd. 1, and ordered each of them to pay a $2,400 civil penalty for the violations. Relators argue that the ALJ panel’s conclusion that relators violated Minn. Stat. § 211B.06, subd. 1, is based on erroneous findings that relators made a false statement and that they made the statement with actual malice.
Actual malice is a term of art; it means that the defendant acted with knowledge that the publication was false or with reckless disregard of whether it was false or not. For example, as the Supreme Court has noted, a statement may have been made with actual malice if it is fabricated by the defendant, is the product of his imagination, * * * is based wholly on an unverified anonymous telephone call [or if] the publisher’s allegations are so inherently improbable that only a reckless man would have put them in circulation. Moreover, actual malice does not mean that the defendant acted with ill will or spite.
Notably, the standard for reckless disregard for truth is a subjective one; reckless disregard does not mean recklessness in the ordinary sense of extreme negligence. Instead, reckless disregard requires that a defendant make a statement while subjectively believing that the statement is probably false.
Chafoulias v. Peterson, 668 N.W.2d 642, 654-55 (
Under Minn. Stat. § 211B.06, subd. 1:
A person is guilty of a gross misdemeanor who intentionally participates in the preparation, dissemination, or broadcast of paid political advertising or campaign material with respect to the personal or political character or acts of a candidate . . . that is designed or tends to elect, injure, promote, or defeat a candidate for nomination or election to a public office . . . that is false, and that the person knows is false or communicates to others with reckless disregard of whether it is false.
In a hearing before an ALJ panel, the complainant bears the burden of proof, and a violation of Minn. Stat. § 211B.06 relating to false statements in campaign materials must be proved by clear and convincing evidence. Minn. Stat. § 211B.32, subd. 4. This means that to prove that relators violated Minn. Stat. § 211B.06, subd. 1, the complainant needed to prove by clear and convincing evidence that the campaign materials that relators distributed contained a statement that was false and either that relators knew that the statement was false or that they recklessly disregarded whether the statement was false.
The ALJ panel concluded that “[t]he Complainant has shown by clear and convincing evidence that the cover letter [in the materials distributed to Greenfield residents] contained a false statement, namely, that Swanson, Mattila and Sykes attempted to use their elected positions to allow Swanson and Mattila to profit illegally.” The panel also found that “[t]he Complainant has shown by clear and convincing evidence that [relators] knew that no illegal conduct was committed or attempted by Swanson, Mattila and Sykes or they communicated the false statement with reckless disregard for its falsity.”
In a memorandum, the panel explained its findings:
There is no evidence in the record that either Swanson or Mattila attempted to engage in illegal conduct. Instead the record established that they appropriately sought legal advice from the City Attorney and acted reasonably based on that advice. When the City Attorney’s advice changed, Swanson and Mattila took no further action with respect to their interest in the Siwek property. Swanson and Mattila did not intend to do anything illegal and their preliminary inquiries regarding the property and subsequent recusal at the December 16 City Council meeting cannot properly be characterized as an attempt to engage in illegal conduct.
Respondents Plack and Stephen Jankowski were aware prior to October 2004 that neither Swanson nor Mattila submitted a bid on the Siwek property. They were also aware that the most Mattila did with respect to purchasing the Siwek lots was to orally express an interest in the property and to recuse himself from the decision to begin negotiations at the December 16, 2003 City Council meeting. Nothing in Swanson or Mattila’s behavior can fairly be characterized as “attempting to illegally profit from their elected positions.” This is a very serious allegation. The Complainant has established by clear and convincing evidence that Respondent Plack and Stephen Jankowski knew the statement was false or at least communicated the statement with a reckless disregard of whether it was false.
Respondents Plack and Stephen Jankowski also accused Cindy Sykes of “attempting to allow the illegal profiting.” The evidence established that all Ms. Sykes did was take over the running of the December 16, 2003 City Council meeting once Mayor Swanson recused himself and vote along with the other Council members in support of the motion to authorize staff to begin negotiations with parties interested in purchasing the Siwek property. Nothing in this conduct amounts to “allowing” Swanson and Mattila to “attempt to illegally profit from their elected positions.”
. . . Even if Plack and Stephen Jankowski believed the accusation (as they testified), they did so only with a distorted interpretation of Swanson’s, Mattila’s and Sykes’ actions and they must bear the consequences of their reckless disregard for whether the accusation was false.
This explanation demonstrates that the ALJ panel incorrectly analyzed whether relators acted with actual malice. The first three paragraphs of the explanation address whether it was true that there was an attempt to engage in illegal conduct. A false statement is a required element of a violation of Minn. Stat. § 211B.06, subd. 1, and the ALJ panel needed to determine whether the statement was false. But whether the statement was false was not the issue to be decided with respect to actual malice. When determining whether relators acted with actual malice, the issue was whether relators knew that the statement that Swanson, Mattila, and Sykes attempted to use their elected positions to allow Swanson and Mattila to profit illegally was false or made the statement with reckless disregard of whether it was false or not. Even if everything that Swanson, Mattila, and Sykes did was completely legal, if relators did not understand the applicable law, they could mistakenly believe that there was an attempt to act illegally and, consequently, they would not know that their statement was false.
ALJ panel found that at the December 16, 2003 council meeting, Carson informed
the council that Swanson and Mattila had made inquiries regarding the Siwek
property and that Sykes took over running the council meeting and voted to
authorize city staff to begin negotiations with people interested in purchasing
the Siwek property. Relator Plack was at
the meeting, and after learning that Swanson and Mattila were considering
bidding on the Siwek property, Plack called the state auditor’s office and
spoke with David Kenney, an attorney with the office, who “indicated to Plack
that the sale of city owned property to the Mayor or a council person would not
be legal.” The panel also found that in
January 2004, Kenney called city attorney Carson and “told
We do not disagree with the ALJ panel that these events could demonstrate that Swanson and Mattila did not intend to do anything illegal and that as soon as they learned that their purchasing the property would be a conflict of interest, they abandoned any attempt to do so. But the events could also be perceived by relators as demonstrating that with Sykes’ assistance at the December 16 council meeting, Swanson and Mattila took preliminary steps to attempt to purchase the Siwek property, which Plack learned from the state auditor’s office would not be legal, and abandoned their purchase attempts after the state auditor’s office informed the city attorney that cities could not sell land to members of the city council or the mayor.
Because relators could perceive these events in this way, the ALJ panel’s findings do not support its conclusion that relators knew that their statement was false. The ALJ panel concluded that relators could believe their accusation “only with a distorted interpretation of Swanson’s, Mattila’s and Sykes’ actions and they must bear the consequences of their reckless disregard for whether the accusation was false.” But this conclusion fails to recognize that with respect to actual malice, “‘reckless disregard’ does not mean ‘recklessness’ in the ordinary sense of extreme negligence. Instead, ‘reckless disregard’ requires that a defendant make a statement while subjectively believing that the statement is probably false.” Chafoulias, 668 N.W.2d at 654-55 (citations omitted). Instead of determining whether relators subjectively believed that their accusation was probably false, the ALJ panel determined whether relators’ claimed interpretation of Swanson’s, Mattila’s, and Sykes’ actions was a reasonable interpretation. Because the panel acted under an erroneous theory of law, it erred in determining that relators acted with actual malice. Therefore, we reverse the panel’s conclusion that relators violated Minn. Stat. § 211B.06, subd. 1, and the civil penalties imposed for the violations. Because we reverse the panel’s conclusion on this basis, it is not necessary for us to determine whether the panel erred in determining that relators’ statement was false.
The ALJ panel determined that relators violated the disclaimer requirement in Minn. Stat. § 211B.04(a) and ordered each of them to pay a $600 civil penalty for the violations. Relators argue that the disclaimer requirement is an unconstitutional restriction on their First Amendment rights. Minn. Stat. § 211B.04(a) states:
A person who participates in the preparation or dissemination of campaign material other than as provided in section 211B.05, subdivision 1, that does not prominently include the name and address of the person or committee causing the material to be prepared or disseminated in a disclaimer substantially in the form provided in paragraph (b) or (c) is guilty of a misdemeanor.
used in this statute, “‘[c]ampaign material’ means any literature, publication,
or material that is disseminated for the purpose of influencing voting at a
primary or other election, except for news items or editorial comments by the
McIntyre v. Ohio Elections Comm’n,
a notice, placard, dodger, advertisement, sample ballot, or any other form of general publication which is designed to promote the nomination or election or defeat of a candidate, or to promote the adoption or defeat of any issue, or to influence the voters in any election . . . unless there appears on such form of publication in a conspicuous place or is contained within said statement the name and residence or business address of the chairman, treasurer, or secretary of the organization issuing the same, or the person who issues, makes, or is responsible therefor.
McIntyre produced and distributed leaflets expressing her opposition to a
proposed school levy.
reversing the decision of the Ohio Supreme Court, the United States Supreme
Court explained that “an author’s decision to remain anonymous, like other
decisions concerning omissions or additions to the content of a publication, is
an aspect of the freedom of speech protected by the First Amendment.”
[the statute] does not control the mechanics of the electoral process. It is a regulation of pure speech. Moreover, even though this provision applies evenhandedly to advocates of differing viewpoints, it is a direct regulation of the content of speech. . . . Furthermore, the category of covered documents is defined by their content—only those publications containing speech designed to influence the voters in an election need bear the required markings. Consequently, we are not faced with an ordinary election restriction; this case “involves a limitation on political expression subject to exacting scrutiny.”
Supreme Court then rejected
As this case demonstrates, the prohibition encompasses documents that are not even arguably false or misleading. It applies not only to the activities of candidates and their organized supporters, but also to individuals acting independently and using only their own modest resources. It applies not only to elections of public officers, but also to ballot issues that present neither a substantial risk of libel nor any potential appearance of corrupt advantage. It applies not only to leaflets distributed on the eve of an election, when the opportunity for reply is limited, but also to those distributed months in advance. It applies no matter what the character or strength of the author’s interest in anonymity.
Under our Constitution, anonymous pamphleteering is not a
pernicious, fraudulent practice, but an honorable tradition of advocacy and of
dissent. Anonymity is a shield from the
tyranny of the majority. It thus
exemplifies the purpose behind the Bill of Rights, and of the First Amendment
in particular: to protect unpopular
individuals from retaliation—and their ideas from suppression—at the hand of an
intolerant society. The right to remain
anonymous may be abused when it shields fraudulent conduct. But political speech by its nature will
sometimes have unpalatable consequences, and, in general, our society accords
greater weight to the value of free speech than to the dangers of its
In 1998, after McIntyre was decided, Minn. Stat. § 211B.04 was amended by adding a subsection (f), which states:
This section does not apply to an individual who acts independently of any candidate, committee, political committee, or political fund and spends only from the individual’s own resources a sum that is less than $300 in the aggregate to produce or distribute campaign material that is distributed at least 14 days before the election to which the campaign material relates.
In 2003, the
In response to [an opinion by the Office of the Minnesota Attorney General determining that Minn. Stat. § 211B.04 was unconstitutional], the legislature debated how best to amend Minn. Stat. § 211B.04. Many legislators were concerned that anonymity would fuel irresponsible allegations. . . .
In the end, the legislature chose to amend § 211B.04 in the narrowest possible fashion, essentially exempting the exact factual scenario before the Court in McIntyre. . . .
The Supreme Court’s holding in McIntyre, however, is far broader than subsection (f) allows. While a more limited disclaimer requirement
might indeed pass constitutional scrutiny,
2004, the legislature amended Minn. Stat. § 211B.04(f) by broadening the
exception from the disclaimer requirement to apply to both individuals and
associations and to apply to expenditures of less than $500 and to materials
distributed at least seven days before an election. 2004
This court is not bound to follow Kelley. See Northpointe Plaza v. City of Rochester, 457 N.W.2d 398, 403 (Minn. App. 1990) (noting state courts are not bound by federal court decisions even as to construction of federal statutes), aff’d, 465 N.W.2d 686 (Minn. 1991); Jendro v. Honeywell, Inc., 392 N.W.2d 688, 691 n.1 (Minn. App. 1986) (noting although statutory construction of federal law by federal courts is entitled to due respect, this court is bound only by statutory interpretations of Minnesota Supreme Court and United States Supreme Court), review denied (Minn. Nov. 19, 1986); see also Rasheed v. Chrysler Corp., 517 N.W.2d 19, 27 n.20 (Mich. 1994) (“Although federal precedent is persuasive, it is not binding on state courts.”). But we see no basis for concluding that the federal district court’s conclusion that section 211B.04 is overbroad is incorrect. Even with the amendments that broaden the exception from the disclaimer requirement, there may be circumstances in which the disclaimer requirement is violated by completely truthful anonymous statements made by individuals acting independently from any candidate and using their own resources. Respondents have not identified an overriding state interest that permits section 211B.04 to limit such political expression under the exacting scrutiny that we must apply.
this court will narrowly construe a statute “to limit its scope to conduct that
falls outside first amendment protection while clearly prohibiting its
application to constitutionally protected expression.” In re
Welfare of R.A.V., 464 N.W.2d 507, 509 (
D E C I S I O N
Relators have not established beyond a reasonable doubt that the administrative-hearing process established under Minn. Stat. §§ 211B.31 to .37 violates the separation-of-powers doctrine. Neither relators’ right to trial by jury nor relators’ First Amendment rights were violated by the administrative process established under Minn. Stat. §§ 211B.31 to .37. Because the ALJ panel acted under an erroneous theory of law in determining that relators acted with actual malice, the panel erred in concluding that relators violated Minn. Stat. § 211B.06, subd. 1. Because Minn. Stat. § 211B.04(a) directly regulates the content of pure speech in violation of the First Amendment, the ALJ panel may not impose civil penalties on relators for violating Minn. Stat. § 211B.04(a).
 Circumstances under which an expedited probable-cause hearing is required are set forth in Minn. Stat. § 211B.33, subd. 2(b) and (c). There is no claim that an expedited probable-cause hearing was required in this case
 The supreme court noted that this statute was clarified by 1978 Minn. Laws ch. 672, § 1, which added a subdivision 6, which reads: “A case arising under the tax laws of this state, as defined in subdivision 5, which was pending on July 1, 1977 may be transferred to the tax court by the district court in which it was pending.”
Minn. Stat. § 211B.05, subd. 1, applies to paid advertisements in print and broadcast news media.
 Paragraphs (b) and (c) set out in detail the required format of a disclaimer.