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City of Sierra Vista v. Sierra Vista Wards System Voting Project - 5/14/2012

Arizona Court of Appeals Division Two Holds That (1) A.R.S. §§ 16- 918(C) and 16-924(B) Authorize A Single Civil Penalty For the Failure to File a Campaign Finance Report.


Sierra Vista Wards System Voting Project (the “Project”) is a political committee that failed to timely file a campaign finance report as required by A.R.S. § 16-913.  The city clerk sent notices to the chairman and treasurer of the Project informing them the Project was late in filing its finance report and stating that a late penalty was accumulating.  The city attorney sent an Order Requiring Compliance to the treasurer of the Project and, three weeks later, sent an Order Assessing a Civil Penalty.

The city then filed an action to reduce the penalties to a monetary judgment and moved for summary judgment. The trial court granted judgment against the Project “in the amount of $7,075 for its accumulated penalties,” and against the treasurer “in the amount of $1000.”  The Project appealed, claiming there were disputed issues of fact regarding its request for an administrative hearing pursuant to § 16-924.

The City maintained that the Project forfeited its right to an administrative hearing by failing to timely request a hearing within twenty days of the Order Requiring Compliance. The Court of Appeals disagreed, noting that the City’s position was based on a mistaken reading of the statutes as authorizing the imposition of separate civil penalties — one against the Project, and a second against the treasurer individually.  But § 16-924(B) authorizes a civil penalty of $1,000 and is “the basic penalty” applicable to violations of the campaign finance laws.  Section 16-924(A) provides that the basic penalty applies “[u]nless another penalty is specifically prescribed.”  For late filings of finance reports, § 16-918(C) specifically prescribes a civil penalty of $25 per day.  When read together, the Court of Appeals concluded, the legislative intent was to impose a single civil penalty.  The trial court erred in imposing separate civil penalties against the Project and its treasurer. The Court of Appeals further concluded that the statutory scheme permits only one administrative hearing to challenge a civil penalty and that the Project timely requested a hearing within thirty days of the Order Assessing a Civil Penalty.

The Project also argued on appeal that the civil penalties were improperly assessed in excess of statutory authority.  The Court of Appeals agreed, concluding that § 16-924 “demonstrates a legislative intent to cap civil penalties authorized by title 16, chapter 6, article 1, at $1,000 unless otherwise provided.”   Thus the civil penalty authorized under § 16-918(C) is capped at $1000 pursuant to § 16-924. 

The Court did not reach the constitutional issues raised by the Project. 

The Court affirmed in part and reversed in part the summary judgment in favor of the city and remanded for further proceedings.

Judge Vásquez authored the opinion; Judges Kelly and Espinosa concurred.

Posted by: Grace Rebling

Posted On: 5/29/2012