State Fights Big Pharma Challenge to IM 26 with Weak Application of Petition Law

Petition law mattered to the state when the Attorney General wanted to nail Annette Bosworth and Chad Haber. But two lawsuits this summer have the state taking the position that violations of petition law don’t really matter.

On Monday, Sixth Circuit Court Judge Patricia Devaney decided that an arbitrary, extra-statutory deadline is more important than removing from the ballot illegal candidates who undeniably violated petition law. That same afternoon, that same judge held a pre-trail conference with Big Pharma’s lackeys and the A.G.’s office in Johnson v. Krebs, the pharmaceutical industry’s effort to keep IM 26, the prescription drug price cap, off the November ballot. In the latter action, the state is saying that violations of state laws on payment of petition circulators do not affect the validity of illegally gathered petition signatures.

In its first round of subpoenaed depositions last month, Big Pharma’s lawyers at Redstone Law got multiple individuals who signed circulators’ oaths for the IM 26 petition to say that they were paid by the signature, not by the hour. In addition to circulator depositions, Big Pharma’s lawyers include “Exhibit M,” the contract between the ballot question committee sponsoring IM 26 and Media One, the Sioux Falls company that handled the paid portion of the petition drive:

In this contract, Media One states that “Consultant, circulators and Media One will be paid on an ongoing basis as determined necessary based upon rate of signature capture.”

Additionally, Big Pharma submits “Exhibit G,” the agreement between Media One and Maryland petition circulator John Adams:

Article 4(a) of this agreement specifies that “A total of $____ shall be paid to Company petition circulators for ____ signatures collected.” Media One redacted the omitted figures as proprietary information, but with or without numbers in the blanks, the clause seems to make clear that circulators were to be paid based on signatures collected, not time spent collecting signatures.

SDCL 12-13-28 says ballot question petition circulators may not receive pay based on the number of signatures they collect. SDCL 2-1-1.2 says circulators must provide signers with a form declaring “whether the petition circulator is a volunteer or paid petition circulator and, if a paid circulator, the amount the circulator is being paid.” IM 26 paid circulators handed out forms saying they were “being paid $10 per hour.” Circulators told Big Pharma under oath that no one on the petition drive was even keeping track of hours, and Exhibit G, Article 4 shows that circulators received forms of payment different from their legally required handouts to signers.

Big Pharma’s lawyers throw these pay violations in the bucket and point to SDCL 2-1-14, which says, “All signatures secured in a manner contrary to the provisions of this chapter may not be counted.” IM 26 circulators broke laws in securing signatures, contends Big Pharma; therefore, the signatures they secured may not be counted.*

To defend the Secretary of State’s counting of those signatures and IM 26’s place on the ballot, the state responds in its June 28 brief with SDCL 2-1-11, my favorite “liberal construal” statute, which provides that “the real intention of the petitioners may not be defeated by a mere technicality.” The state contends that the above violations are mere technicalities. “The principle and the presumption of validity do not mean that the law need not be followed,” says the state. “Rather, the South Dakota Supreme Court has held that the requirements of the law must be ‘substantially complied with in order to render the petition valid.'”

The state says paying petitioners by signature instead of hour doesn’t matter, since that restriction rests under Chapter 12-23, and the can’t-count-illegally-secured signatures is under Chapter 2-1. The circulator-pay statute slaps the employer with a Class 2 misdemeanor ($500 and/or 30 days in county jail) but says nothing about invalidating signatures.

The circulator-pay declaration is in Chapter 2-1, but the state says the alleged discrepancy between the $10/hour circulator handout said and the per-signature (or, more accurately, “per set” of completed petition sheets) payments to which deposed circulators testified doesn’t matter, because the law doesn’t really care how much circulators are being paid, just that signers know whether they are paid or volunteer:

The overriding purpose of SDCL § 2-1-1.2’s requirement of a statement of compensation is to alert a potential signer who is soliciting their signature and whether the circulator is paid or is a volunteer. Here, it is undisputed that the paid circulators had a statement available verifying that they were compensated for their services.

While the other requirement is disclosure of the amount of compensation, the statement of whether a circulator is paid or is a volunteer substantially meets the intent of the statute. Whether the Court determines that the circulators were paid $10 per houe or compensated under a different scheme, the potential signers were alerted to the fact that their signature was being solicited by a paid circulator. To find the failure to disclose the offering of permissible discretionary bonuses or the imposition of signature requirements for the circulators (as allowed by SDCL § 12-13-28), would be to dismiss the intent of those who signed the petitions on a “mere technicality” [Attorney General’s office, Johnson v. Krebs, Respondent’s Response to Applicants’ Motion for Summary Judgment, 2018.06.28, p. 8].

The state and Big Pharma still have to argue the facts of the case. But if the state’s interpretation of “substantial compliance” with petition law stands, consider the implications for ballot question sponsors:

1. The annoying and unconstitutional compelled-speech forms circulators must carry need not specify any pay amount. Simply stamping “Paid” or “Volunteer” on those forms should “substantially comply” with petition law’s “overriding” intent of making that distinction. The phrase “and, if a paid circulator, the amount the circulator is being paid” in SDCL 2-1-1.2 (initiated measures), SDCL 2-1-1.1 (initiated constitutional amendments), and SDCL 2-1-3.1 (referred laws) is apparently extraneous verbage expressing no Legislative intent.
2. We can budget our petition drives much more efficiently. Forget unpredictable and hard-to-document hourly pay and uncertain bonus schemes. Offer $2 per valid signature. That’s $50,000 for a safe 25,000 signatures on an initiated measure or referred law and $100,000 for a safe 50,000 signatures on an initiated constitutional amendment. Budget another $10,000 to pay the $500 misdemeanor fine for up to twenty paid circulators. Violating the pay-per-signature ban no longer jeopardizes the petition; it just adds a minor cost to doing business, a cost that only comes up if someone notices and files a complaint.

Big Pharma and the state still have to go rounds on the facts of the case; the state maintains that Big Pharma still has not proven circulators were not paid $10 per hour. But so far, the state’s defense relies on a remarkable weakening of petition law, which runs counter to its own recent prosecutions of petition violators Annette Bosworth and Chad Haber and to the Legislature’s trend toward making petition law far more strict on the pretext of preventing exactly the sort of violations alleged in the IM 26 petition drive.

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p.s. #1: In an interesting twist, Big Pharma and the state have agreed to limit this petition challenge to the Secretary of State’s random sample and not the entire petition. Instead of reviewing all 22,091 signature the Secretary says she received, the court will only look at the 710 signatures randomly sampled to validate the petition. Both parties say the move is to save the court time and money. The move could signal that Big Pharma isn’t as sure of its analysis of the entire petition as it is of its ability to kick 65 more signatures out of the sample on top of the 200 Secretary Krebs already rejected.

*p.s. #2: Big Pharma has arguments beyond pay. The complainants charge that several “circulators” admit they were merely “witnesses” signing oaths for illegal out-of-state mercenaries who did the actual circulating. Big Pharma says circulators must be residents of South Dakota [SDCL 12-1-3(11)] and must personally witness each voter signature [SDCL 2-1-10].