Petition for Writ of Certiorari — Caruso v. Oregon (No. 05-1034)

QUESTION:

Shall voters authorize levy of $0.003 per $1,000

of assessed valuation if Yamhill County People’s

Utility District is formed? YES NO

This measure may cause property taxes to in-

crease more than three percent.

The last sentence (the “3% warning”) is required by O.R.S.

§ 280.070(4) to appear on all local property tax levy elec-

tions verbatim.

Caruso contended that, as applied to the PUD

creation measure he and others had qualified for the

Yamhill County ballot, the 3% warning mandated by

O.R.S. § 280.070(4) was false, misleading to voters, and

highly destructive to the prospects for passage of the

measure by voters. It would tell voters that “This measure

may cause property taxes to increase more than three

percent,” when in fact the property tax increase proposed

was 1/10,000 of 3 percent. Thus, the 3% warning was false,

by a factor of 10,000, and appears on ballots well above

and far more prominently than any accurate explanation

of the size of the levy in the later “Summary.”

The District Court found this about the 3% warning:

(1) “Regardless of whether the three percent

warning overstates the potential tax conse-

quences of Measure 36-55 by a factor of 150

or 10,000, plaintiff contends correctly that

such language is inherently misleading and

hinders the conveyance of accurate informa-

tion to voters.” App. 32.

(2) “As noted above, the court adopts the rea-

soning set forth in Horton and finds that the

three percent warning constitutes false and

misleading language in the context of Meas-

ure 36-55.” App. 33.

(3) “For the reasons provided in Horton, the

court finds that the three percent warning

4

misleads voters to grossly overestimate the

tax consequences of the ballot measure to

'which the warning attaches. The inclusion

of the three percent warning in the title of

Measure 36-55 will inevitably cause voter

confusion and inhibit ‘the type of interactive

communication concerning political change

that is appropriately described as “core po-

litical speech.”’ Meyer, 486 U.S. at 420-21.”

App. 36.

The District Court also found these facts:

.

“Plaintiff’s ability to accurately explain the

tax consequences associated with Measure

36-55 to voters is impaired by state-

mandated language that is profoundly mis-

leading. By placing the ‘warning’ on the bal-

lot itself - a place where voters are likely

to give great weight to the government-

authored statement — defendants would

eliminate any chance for plaintiff to rebut or

clarify the issue to voters.” App. 37.

“By placing the false and misleading three

percent warning on the title of Measure 36-

55, the State of Oregon has ‘impedel[d] the

sponsors’ opportunity to disseminate their

views to the public.’” App. 37.

“Plaintiff's speech, as well as the speech of

future ballot measure proponents, is chilled

when the three percent warning is included

in the title of a ballot measure that has no

chance of ‘causing’ property taxes to increase

more than three percent. Other circulators

are less likely to obtain signatures for future

ballot initiatives involving local option taxes

and to engage in the political discourse ac-

companying that activity because they

would face the hurdle of convincing voters of

the false nature of the state-mandated

5

‘warning.’ Consequently, O.R.S. § 280.070(4)

‘discourages participation in the petition cir-

culation process....’ Buckley, 525 U.S. at

200.” App. 38-39.

In the incorporated Horton opinion, the District Court

concluded: _

Fundamental fairness in elections — a bedrock of

our democracy — would be eroded if the state

were allowed to require patently false “warnings”

to appear on ballot measure titles.

App. 54-55.

Thus, the District Court found that the 3% warning

was “patently false” and “profoundly misleading,” based

upon the evidence. The only testimonial evidence in the

record was the uncontested Declaration of Michael Caruso

(Excerpts of Record to Court of Appeals, ER 14-18). The

State offered no testimony and did not challenge on appeal

any of the District Court’s findings of fact as clearly

erroneous.

The District Court was able to assess the factual effect

of the 3% warning on public debate about a PUD measure,

even though the 3% warning did not actually appear on

the ballot in Yamhill County at the March 2004 election.

In November 2003, one month prior to filing of the Caruso

complaint, there was a similar PUD election in the adja-

cent Multnomah County, which includes Oregon’s largest

city, Portland. On October 17, 2003, the same Chief Judge

who ruled in Caruso found the same 3% warning to be in

violation of the rights of petitioners and voters in Mult-

nomah County, but county officials rushed the printing

and mailing of the ballots so that the 3% warning never-

theless appeared on essentially all of the 345,000 ballots in

Multnomah County on the same day that the District

6

Court ruled the 3% warning to be unconstitutional.’

Horton, App. 56-57. Opponents of the measure then placed

full-page advertisements in the major (and minor) news-

papers, using the “official” 3% warning statement as the

centerpiece argument against the measure. Declaration of

Michael Caruso, Appellant’s Excerpt of Record to Court of

Appeals, pp. 16-17 [hereinafter E.R.]. Thus, the Chief

Judge was well able to evaluate the credibility of Caruso’s

testimony that the 3% warning would (1) mislead voters

“at the most crucial time in exercising their rights to vote”

and (2) discourage “the efforts of petitioners in the other

counties to collect the necessary signatures,” because of

“this gigantic, unfair barrier to the enactment of the

measure by voters.” Jd., E.R. 17-18.’

The District Court ruled that placing the 3% warning

on the ballot violated Plaintiff’s rights under the First,

Fifth, and Fourteenth Amendments and that the statute

requiring that the 3% warning be placed on all ballot

measures proposing “local option taxes” was overbroad. The

District Court issued an injunction which incorporated a

limiting construction of the statute, allowing the State to

place the 3% warning only on ballots where it would be true

— where the measure itself would “cause property taxes to

increase more than three percent.” App. 41.

' All elections in Oregon are conducted by mail only. There are no

precinct polling places. All ballots in all elections are mailed to all

registered voters, who return their completed ballots by mail or

physical delivery to a county elections office or drop-off box.

* It took PUD supporters in Yamhill County over 6 months to

collect the necessary valid voter signatures. Caruso and others collected

the needed signatures in Yamhill County prior to the action by Mult-

nomah County to place the 3% warning on the November 2003 ballot

there.

ARGUMENT FOR ALLOWANCE OF THE WRIT

Allowance of the writ is warranted under Supreme

Court Rule 10(c), as the Court of Appeals has decided

important federal constitutional questions in a way that

conflicts with relevant decisions of this Court and involves

an important question of federal law that should be settled

by this Court.

We are aware of no case allowing a government to

mandate the placement of a slogan (or “tagline”), directly

upon an initiative or referendum ballot (within a fraction

of an inch of the boxes the “YES” and “NO”) when:

1. There is no mechanism under state law for

judicial review of the accuracy or fairness of

the state-mandated slogan.

2. The U.S. District Court trier of fact has

found that the mandatory slogan is “pat-

ently false” and “profoundly misleading” to

voters and “discourages participation in the

petition circulation process.”

If the government is free to put slogans directly on ballots,

whether or not they are false and/or misleading, then

democracy in the United States is in serious trouble. The-

Court of Appeals allows the State to dictate election

outcomes by placing on the ballot, immediately adjacent to

where the voter marks “yes” or “no”, a severely prejudicial

slogan that the Chief Judge of the U.S. District Court

found to be “patently false” and “profoundly misleading,”

on the basis of the evidence presented.

This Court in Cook v. Gralike, 531 U.S. 510, 121 S.Ct.

1029, 149 L.Ed.2d 44 (2001), ruled that the State cannot

mandate the appearance of a pejorative slogan (“disre-

garded voters’ instruction on term limits”) on ballots next

8 :

to the names of candidates.’ Now, the Court needs to

address the appearance of a state-mandated false and

misleading slogan next to the “yes” and “no” boxes for

ballot measures. Allowing such slogans on ballots sows the

seed for complete destruction of the initiative process,

which enables voters in 24 states to enact legislation,

independent of officeholders.

Here, it was the officeholders in the Oregon Legisla-

ture that adopted the statute that mandates the appear-

ance of the 3% warning, regardless of the truth. The Court

of Appeals decision here would allow any legislature to

destroy the initiative process by requiring that measures

presented to voters carry with them wildly inaccurate

slogans.

Further, if the Legislature can mandate such taglines,

then_so can the people using the initiative process. The

initiative process could well devolve into a battle of man-

datory ballot slogans, with the advocates of each position

on any issue seeking to enact laws to place their favored

* Indeed, it seems clear that the adverse labels handicap candi-

dates “at the most crucial stage in the election process — the

instant before the vote is cast.” Anderson v. Martin, 375

U.S. 399, 402, 84 S.Ct. 454, 11 L.Ed.2d 430 (1964). At the

same time, “by directing the citizen’s attention to the single

consideration” of the candidates’ fidelity to term limits, the

labels imply that the issue “is an important — perhaps

paramount — consideration in the citizen’s choice, which

may decisively influence the citizen to cast his ballot”

against candidates branded as unfaithful. /bid. While the

precise damage the labels may exact on candidates is dis-

puted between the parties, the labels surely place their tar-

gets at a political disadvantage to unmarked candidates for

congressional office. Thus, far from regulating the proce-

dural mechanisms of elections, Article VIII attempts to “dic-

tate electoral outcomes.” U.S. Term Limits, Inc. v. Thornton,

514 U.S., at 833-834, 115 S.Ct. 1842.

Cook v. Gralike, supra, 531 U.S. at 525-26.

9

slogans on all initiatives or referenda addressing their

particular subjects of interest. “Failure to fund schools

may cause your schools to collapse, teachers to be unquali-

fied, and your children to fail in life” could become a

popular slogan to mandate on every education-related levy.

The specific flaws in the Court of Appeals opinion include:

1. The Court of Appeals opinion employs a

“balancing test” instead of the required

“strict scrutiny” and misapprehends a mate-

rial point of law: This is not a ballot access

case. It is a public forum case involving a

state-mandated ballot slogan or tagline,

which requires strict scrutiny under Cook v.

Gralike, 531 U.S. 510, 121 S.Ct. 1029, 149

L.Ed.2d 44 (2001).

2. The Court of Appeals opinion conflicts with

Gralike v. Cook, 191 F.3d 911, 919-20 (8th

Cir. 1999), aff’d on other grounds, Cook v.

Gralike, 531 U.S. 510, 121 S.Ct. 1029, 149

L.Ed.2d 44 (2001), on application of the

First Amendment to state-mandated ballot

slogans or taglines.

3. The Court of Appeals opinion allows the

State to severely impair, if not destroy, the

ability of ballot measure petitioners and

supporters to communicate with voters, by

placing directly on the ballot, next to the

“YES” and “NO” boxes, a slogan about the

measure found by the District Court to be

“patently false” and “profoundly mislead-

ing,” on the basis of the evidence presented.

4. The Court of Appeals opinion disregards and

contradicts the factual findings made, on the

basis of evidence in the record, by the trier

of fact (District Court), which found that the

3% warning was factually false and mislead-

ing to voters. The Court of Appeals also

10

failed to apply the correct standard of review

of the District Court’s factual findings,

which is the “clear error” standard. The

Court of Appeals did not indicate which, if

any, of the District Court’s findings of fact

were clearly erroneous.

5. In rejecting plaintiff’s due process claims,

the Court of Appeals opinion countermanded

the District Court’s express finding that the

3% warning “would so mislead voters that

they would be unable to decipher the subject

of Measure 36-55,” while itself offering an

explanation of the 3% warning that depénds

upon mere speculation, with no evidence in

the record, about the detailed historical

knowledge about property taxes that some

Oregon voters might have.

6. The Court of Appeals opinion itself reflects a

misunderstanding of the Oregon system of

property tax limitations that was not offered

by any party in the case.

Fhis case also involves questions of exceptional

importance, governing how State or local governments can

heavily influence the outcome of any and all ballot meas-

ure elections by mandating that false or misleading

slogans appear on the ballot itself, as a part of the ques-

tion to be voted upon. Allowing governments to place

false and/or misleading slogans directly upon the

ballot is tantamount to allowing government itself

to predetermine the outcome of these elections.

If the Court of Appeals opinion stands, then legisla-

tors at all levels (including state and local voters through

11

the initiative process’) will be free to mandate false or

misleading statements directly upon ballots, as part of the

ballot questions, right next to the boxes for YES anc NO,

where the slogans will have very profound influence at

“the most crucial stage in the election process,” Cook, 531

U.S. at 252, and when the false statement cannot be

refuted by additional communication.

The potential examples are endless. Proponents of

school funding could enact a law that requires that all

school tax levy ballot questions display, as part of the

ballot question, a slogan such as that shown in bold (in

place of the current “3% warning”):

BALLOT TITLE MEASURE NO. 00-00

CAPTION:

AUTHORIZES SPECIAL LEVY FOR SCHOOL

DISTRICT 1.

QUESTION:

Shall voters authorize 3-year levy of $0.003 per

$1,000 of assessed valuation for school computer

classrooms?

Failure of this measure may cause your

schools to be inadequate and your children

to fail in life. YES NO

Proponents of mandatory criminal sentences could enact a

measure requiring that all ballot questions pertaining to

criminal sentencing display this warning: “Failure of this

measure may allow judges to let murderers and rapists

receive short sentences, putting them back on the streets.”

* Ballot measure proponents include sponsors ° initiatives,

referenda, and measures referred to the ballot by government bodies on

the whole gamut of governmental activities, only one of which is

property tax rate changes.

12

The Court of Appeals opinion would allow the man-

dated appearance of such partisan viewpoints on ballots. It

does not require that the slogan be accurate or not mis-

leading, only that it could conceivably be accurate in some

situations or be understood by some sub-class of voters

with very specialized knowledge of its “history” or special

interest (such as property owners). See 422 F.3d at 859-61

(noting that it “could be read as accurate” by a voter with

extensive knowledge or that there is ‘nore than an ‘infini-

tesimal possibility’ that property taxes will increase three

percent”).

Thus, the Court of Appeals opinion opens the

Pandora’s Box that Cook orders closed. Also, the

Court of Appeals opinion switches the roles of the Plaintiff-

Appellee Caruso and the Intervenor-Appellant State of

Oregon [hereinafter “State”] and expresses the incorrect

belief that it was Caruso who wanted to put a slogan on

the ballot.

But the fact that the ballot is “crucial” to an elec-

tion does not imply that Caruso therefore has a

First Amendment right to communicate a specific

message through it. To the contrary, the Supreme

Court in Timmons rejected the “contention that

[a political party] has a right to use the ballot it-

self to send a particularized message”: “Ballots

serve primarily to elect candidates, not as forums

for political expression.” 520 U.S. at 362-63, 117

S.Ct. 1364; accord Rubin, 308 F.3d at 1616 (“A

ballot is a ballot, not a bumper sticker.”).

422 F.3d at 856. But that is the opposite of the true

situation. It was the State that demanded to place

the slogan on the ballot, not Caruso. Caruso wanted

the specific message (the 3% warning) to be removed, as it

was “patently false” and “profoundly misleading,” as the

District Court concluded.

13

The Court of Appeals opinion encourages more

slogans to burden ballots in Oregon, in contradiction to the

teachings of Gralike and Cook, which struck down a

government-mandated ballot tagline on candidates, and

R. J. Reynolds Tobacco Co. v. Shrewey, 423 F.3d 906 (9th

Cir. 2005), which concluded:

[T]here are already several recognized instances

of constitutional limitations on government

speech and “government is no more free to disre-

gard constitutional and other legal norms when

it speaks than when it acts.” R.J. Reynolds To-

bacco Co. v. Bonta, 272 F.Supp.2d 1085, 1110

(E.D. Cal. 2003). For example, there may be in-

stances in which the government speaks in such

a way. as to make private speech difficult or im-

possible, or to interfere with some other constitu-

tional right, which could raise First Amendment

-concerns. See Warner Cable Communications,

Inc. v. City of Niceville, 911 F.2d 634, 638 (11th

Cir. 1990) (“[T]he government may not speak so

loudly as to make it impossible for other speak-

ers to be heard by their audience. The govern-

ment would then be preventing the speakers’

access to that audience, and first amendment

concerns would arise.”).

423 F3d at 923. And Reynolds involved government

speech that was not “patently false” or “profoundly mis-

leading.” .

Further, this Court affords an even greater level of

protection to communication pertaining to issues and

ballot meaSures. Buckley v. American Constitutional Law

Found., 525 U.S. 182, 119 S.Ct. 636, 142 L.Ed.2d 599

(1999); McIntyre v. Ohio Elections Comm'n, 514 U.S. 334,

115 S.Ct. 1511, 131 L.Ed.2d 426 (1995); Meyer v. Grant,

486 U.S. 414, 108 S.Ct. 1886, 100 L.Ed.2d 425 (1988).

Such communication from petitioners to voters is the most

highly protected speech and where First Amendment

14

protection is “at its zenith.” Buckley, 525 U.S. at 187.

Impairment of those communications by the State must be

narrowly tailored to «. hieve a critical state interest.

I. THE COURT OF APPEALS OPINION DISRE-

GARDS THE STANDARD OF CONSTITU-

TIONAL SCRUTINY ABSOLUTELY REQUIRED

BY COOK V. GRALIKE.

The Court of Appeals opinion errs by failing to apply

strict scrutiny to the 3% warning slogan on the ballot. It

faults Caruso for seeking the “right to communicate a

specific message through |[the ballot],” 422 F.3d at 856,

when it was the State, not Caruso, that placed the pejora-

tive message on the ballot, with no opportunity for judicial

review in any Oregon court for accuracy or fairness.’ The

Court of Appeals applied only the “flexible balancing

standard” applicable to candidate ballot access cases.

A. STRICT SCRUTINY APPLIES TO STATE-

MANDATED BALLOT SLOGANS OR TAG-

LINES.

This is a viewpoint discrimination case. The State has

converted the ballot into a “designated public forum” by

~

* The Oregon ballot title process provides for judicial review of the

accuracy of statements in the ballot title, except for the 3% warning,

which is mandated by statute. On local measures, the final authority on

whether a ballot title is “insufficient, not concise or unfair” is the trial

court of the county, which provides the “first and final review.” O.R.S.

§ 250.195. When others challenged the presence of the 3% warning on a

PUD ballot measure in Multnomah County in 2003, the Multnomah

County Circuit Court concluded that it was mandated by statute and

not subject to judicial review as to its accuracy. Horton v. Multnomah

County, Multnomah County Circuit Court No. 0308-08431.

15

singling out a slogan for the voter.” “Once it has opened a

limited forum, however, the State must respect the lawful

boundaries it has itself set.” Rosenberger v. Rector and

Visitors of University of Virginia, 515 U.S. 819, 8290, 115

S.Ct. 2510, 2517 132 L.Ed.2d 700 (1995). The government

may not pick and choose among slogans because it prefers

its own “skewed” viewpoint.’

A state-sponsored slogan is not a “ballot regulation.”

The Court of Appeals opinion relies upon a number of

cases which allow the state latitude in the mechanics of

elections (how candidates qualify for the ballot for exam-

ple, ._ nd the relationship between the voter and an inter-

mediary, such as a political party). But the U.S. Supreme

Court in Cook concluded that a government-mandated

slogan or tagline on the ballot is not a “time, place, and

manner” regulation that escapes strict scrutiny.”

* See Ark. Educ. Television v. Forbes, 523 U.S. 666, 677, 118 S.Ct.

1633, 140 L.Ed.2d 875 (1998); Cornelius v. NAACP Legal Defense &

Educ. Fund, Inc., 473 U.S. 788, 800, 105 S.Ct. 3439, 87 L.Ed.2d 567

(1985); Perry Educ. Ass’n v. Perry Local Educators’ Ass'n, 460 U S. 37,

45, 103 S.Ct. 948, 74 L.Ed.2d 794 (1983).

* Madison Joint School Dist. No. 8 v. Wisconsin Employment

Relations Comm'n, 429 U.S. 167, 175, n. 8, 97 S.Ct. 421, 426, n 8, 50

L.Ed.2d 376 (1976), illustrates that, while a forum may be limited, once

created its limitations are subject to strict scrutiny.

* The Court of Appeals opinion offers a confusing description of

Cook, implying that this Court rejected the First Amendment claim of

the plaintiffs. That is not correct. In fact, the 8th Circuit found the

tagline requirement contrary to the First Amendment. The U‘S.

Supreme Court majority opinion ruled it invalid under the Elections

Clause. The majority rejected the First Amendment arguments of the

defendant as not relevant to the Elections Clause but did not reach

the First Amendment arguments of the plaintiffs, having decided the

case on the Elections Clause. The concurring opinion of C.J. Rehnquist

and J. O'Connor concluded that the tagline violated the First Amend-

ment.

16

Seven sitting justices in Cook announced that

placing slogans on the ballot is not a “time, place,

and manner” restriction that avoids strict scrutiny,

Article VIII [the Missouri term limits tagline re-

quirement] is not a procedural regulation. It does

not reguiate the time of elections; it does not

regulate the place of elections; nor, we believe,

does it regulate the manner of elections. As to the

last point, Article VIII bears no relation to the

“manner” of elections as we understand it, for in

our commonsense view that term encompasses

matters like “notices, registration, supervision of

voting, protection of voters, prevention of fraud

and corrupt practices, counting of votes, duties of

inspectors and canvassers, and making and pub-

lication of election returns.” Smiley, 285 U.S., at

366, 52 S.Ct. 397; see also U.S. Term Limits, Inc.

v. Thornton, 514 U.S., at 833. In short, Article

VIII is not among “the numerous requirements

as to procedure and safeguards which experience

shows are necessary in order to enforce the fun-

damental right involved,” Smiley, 285 U.S., at

366, 52 S.Ct. 397, ensuring that elections are

“fair and honest,” and that “some sort of order,

rather than chaos, is to accompany the democ-

ratic process,” Storer v. Brown, 415 U.S. 724,

730, 94 S.Ct. 1274, 39 L.Ed.2d 714 (1974).

531 U.S. at 523-24. This part of Cook (Part IV of the Opinion

of the Court) was joined by six justices, and J. Kennedy also

agreed in his concurrence that the tagline requirements “do

not regulate the time or place of federal elections.” 531 U.S.

at 527. Cook requires that “every decision by the sovereign

serve some nonpartisan public purpose” and not be used to

“dictate electoral outcomes, to favor or disfavor a class of

candidates, or to evade important constitutional constraints.”

Vieth v. Jubelirer, 541 U.S. 276, 333, 124 S.Ct. 1769, 158

L.Ed.2d 546 (2004) (Stevens, J., dissenting).

17

The Court of Appeals opinion concludes that the 3%

warning “regulates only what is said through the ballot

itself,” 422 F.3d at 856, relying on Timmons v. Twin Cities

Area New Party, 520 U.S. 351, 358, 117 S.Ct. 1364, 137

L.Ed.2d 589 (1997). That was a ballot access case — hold-

ing that the third party had other means to get on the

ballot without “piggybacking” on another party’s ballot

line. Here, we are dealing with a state-mandated ballot

slogan or tagline, which is direct speech to voters on a

public issue and is governed by Cook.

Anderson v. Martin, 375 U.S. 399, 84 S.Ct. 454, 11

L.Ed.2d 430 (1964), held that a Louisiana statute requir-

ing the designation of a candidate’s race on the ballot

unconstitutional. In describing the effect of such a desig-

nation, the Court said: “[B]y directing the citizen’s atten-

tion to the single consideration of race or color, the State

indicates that a candidate’s race or color is an important —

perhaps paramount — consideration in the citizen’s choice,

which may decisively influence the citizen to cast his

ballot along racial lines.” Jd., at 402, and handicap the fair

process “at the most crucial stage in the election process —

the instant before the vote is cast.” Anderson v. Martin,

375 U.S. at 402.

Here, the 3% warning singles out the supposedly

adverse effect of the measure on the voter’s wallet. Not

presented are the benefits to the voter’s wallet from lower

electricity rates resulting from public ownership or bene-

fits of adequately-funded education, police protection, jails,

or other public services funded by property tax levies.

The Court of Appeals opinion says that Measure 36-55

was not singled out, because the 3% warning applies to all

local option levies. This misconceives the “singling out”

test. In candidate cases, candiaates are competing against

each other, sc one candidate cannot be singled out for

prejudicial treatment. In ballot measures, the competitors

are the “yes” and “no” sides. The 3% warning singles out the

“yes” side for impairment, with a profoundly misleading

18

statement about how much the measre will cost taxpayers.

There are no countervailing statements extolling the

benefits of the measure, such as lower electric rates, more

jails, etc. Even if there were, a true statement about the

benefits cannot overcome a “patently false” and “pro-

foundly misleading” statement about the cost of the

measure to taxpayers. The fact that every tax levy is

forced to suffer the same viewpoint discrimination does

not save O.R.S. § 280.070(4).

This emphasis on one viewpoint illustrates why any

government effort to restrict information to its own single

viewpoint “requires particular scrutiny, in part because

such regulation often indicates a legislative effort to skew

public debate on an issue, see, e.g., Schacht v. United

States, 398 U.S. 58, 63, 90 S.Ct. 1555, 1559, 26 L.Ed.2d 44

(1970).” RA.V. v. St. Paul, 505 U.S. 377, 431, 112 S.Ct.

2538, 120 L.Ed.2d 305 (1992) (JJ. Stevens, White and

Blackmun, concurring with plurality opinion by J. Scalia).

The law recognizes that there a situations where more

speech cannot “cure” a constitutional injury.”

This 3% warning on the ballot, adjacent to the “yes”

and “no” choices, is the ultimate “bigger and better soap-

box” which drowns out truthful speech:

We agree that the government may not speak so

loudly as to make it impossible for other speak-

ers to be heard by their audience. The govern-

ment would then be preventing the speakers’

* The State’s comment on the ballot may instill a lasting and

prejudicial effect in the minds of reasonable people in the manner of the

notorious, “do not think about a white bear” example, drawn from

psychological research and noted in State v. White, 303 Or. 333, 342,

736 P.2d 552, 557 (1987), quoting Lakeside v. Oregon, 435 U.S. 333,

345, 98 S.Ct. 1091, 1098, 55 L.Ed.2d 319 (1978) (Stevens, J., dissent-

ing). D. Schnieder and D. Wegner, Don’t Think of a White Bear,

JOURNAL OF PERSONALITY AND SOCIAL PSYCHOLOGY (1987).

19

access to that audience, and First Amendment con-

cerns would arise. For instance, if a city govern-

ment builds a better soapbox, equipped with

spotlights and powerful loudspeakers, next to the

longstanding antique soapbox in the city square,

and if government speakers dominate the new

soapbox, then speakers on the first soapbox do

not truly have the opportunity to communicate

their views even to those who might wish to hear

them. The city would indeed be “drowning out”

the voice of the private speakers.

Warner Cable Communications, Inc. v. City of Niceville,

911 F2d 634, 638 (11th Cir. 1990). Here, the Court of

Appeals opinion asserts that the misleading 3% warning

would stimulate further debate. In fact, as shown by the

evidence deemed credible by the trial court, the false

slogan actually allowed a further drowning out of any

accurate message, because utilities used the publication of

the sample baliot with the misleading 3% warning in huge

media advertisements, thus amplifying the damage.

B. STRICT SCRUTINY APPLIES WITH EVEN

GREATER FORCE TO STATE-MANDATED

SLOGANS OR TAGLINES ATTACHED TO

CITIZEN INITIATIVES.

The cases above show that this Court applies strict

scrutiny when a State mandates that a candidate’s name

on the ballot have a certain slogan or tagline. This should

apply with even greater force to state-mandated taglines

on ballot measures, as this Court recognizes that such

measures are where First Amendment protections are at

their zenith.

The First Amendment of the U.S. Constitution pro-

tects the rights of petitioners using a state’s initiative or

referendum process to communicate with voters.

~

20

In Buckley v. ACLF, supra, the Court struck down a

variety of statutes adopted by Colorado that inhibited the

opportunity for petitioners to communicate with voters.

Precedent guides our review. In Meyer v. Grant,

486 U.S. 414, 108 S.Ct. 1886, 100 L.Ed.2d 425

(1988), we struck down Colorado’s prohibition of

payment for the circulation of ballot-initiative

petitions. Petition circulation, we held, is “core

political speech,” because it involves “interactive

communication concerning political change.” /d.,

at 422, 108 S.Ct. 1886 (internal quotation marks

omitted). First Amendment protection for such

interaction, we agreed, is “at its zenith.” /d., at

425, 108 S.Ct. 1886 (internal quotation marks

omitted).

525 U.S. at 186-87.

In Meyer v. Grant, supra, the Court struck down state

law prohibiting the use of paid signature gatherers be-

cause:

It impedes the sponsors’ opportunity to dissemi-

nate their views to the public. ...

Appellees seek by petition to achieve political

change in Colorado; their right freely to engage

in discussions concerning the need for that

change is guarded by the First Amendment. . . .

The circulation of an initiative petition of neces-

sity involves both the expression of a desire for

political change and a discussion of the merits of

the proposed change.... This will in almost

every case involve an explanation of the nature

of the proposal and why its advocates support it.

486 U.S. at 420-21 (footnotes omitted).

Thus, communication about ballot measures appears

even more highly protected than communication about

candidates. In candidate elections, the First Amendment

21

does not forbid the federal government or state govern-

ments from banning corporate or labor union campaign

contributions or from limiting contributions made by

individuals. Nixon v. Shrink Missouri Government PAC,

528 U.S. 377, 120 S.Ct. 897, 145 L.Ed.2d 886 (2000). But

the Court has repeatedly held that the First Amendment

protections do forbid such restrictions in ballot measure

campaigns. First Nat. Bank of Boston v. Bellotti, 435 U.S.

765, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978); Citizens Against

Rent Control v. City of Berkeley, 454 U.S. 290, 102 S.Ct.

434, 70 L.Ed.2d 492 (1981). So, if the state cannot man-

date taglines for candidates on ballots, how can it possibly

mandate taglines for ballot measures, particularly when

the trier of fact has found that the tagline at issue is

“patently false” and “profoundly misleading”?

Here, placing a false and misleading statement

directly on the ballot which is used for voting cannot

possibly be considered other than “core political speech”

for which First Amendment protection is “at its zenith.”

Statements about the effects of adopting a ballot

measure, which appear directly on the ballot itseli,

constitute the most direct and credible possible

means of communication with voters. Requiring that

the ballot itself convey false and misleading information to

voters most severely impairs the First Amendment rights

of petitioners to communicate with voters on the substance

of the measure at issue.

The measure on the ballot was a presentation by

petitioners, on behalf of themselves and the registered

voters in Yamhill County who signed the petition for the

Yamhill County People’s Utility District (PUD) measure,

to all of the registered voters within the boundaries of the

proposed district. Forcing that presentation to include the

false and misleading 3% warning is a most direct and

severe infringement of the protected right of petitioners to

communicate accurate information to voters. It is a far

22

greater infringement than those found to be in violation of

the First Amendment in either Buckley v. ACLF or Meyer

v. Grant.

The government cannot, under the First Amendment,

force a false statement about a ballot measure upon the

citizens who circulated the petitions containing the ques-

tion and cannot force voters to read a false statement on

the ballot. Being force-fed false statements by government

itself, at the most intimate time in the exercise of democ-

racy, dilutes the informed choice of voters. “And the right

of suffrage can be denied by the debasement or dilution of

the weight of a citizen’s vote just as effectively as by

wholly prohibiting the free exercise of the franchise.”

Reynolds v. Sims, 377 U.S. 533, 555, 84 S.Ct. 13862, 1378,

12 L.Ed.2d 506 (1964).

In examining whether having a mandatory false

statement on the ballot discourages future petition circu-

lation, the Court of Appeals erred about the sequence of

communication when it concluded that the 3% warning

“leavies] circulators free to contest its accuracy in their

conversations with electors.” App. 16. To the contrary, the

vast bulk of voters will see the 3% warning only when they

are actually voting, when the false statement cannot be

refuted. This “handicap|s] them at the most crucial stage

in the election process — the instant before the vote is

cast.” Cook v. Gralike, supra, 531 U.S. at 525. This makes

the false 3% warning ballot slogan far worse than the

Colorado requirement, struck down in Buckley v. ACLF,

that circulators wear a badge stating “PAID” or “VOLUN-

TEER.” The message conveyed by those badges was (1)

true, not false or misleading; (2) not a substantive message

about the ballot measure; and (3) not conveyed at the

instant the vote is cast.

The Court of Appeals (App. 22) cites McLaughlin v.

N.C. Bd. of Elections, 65 F.3d 1215, 1227 (4th Cir. 1995),

23

for a proposition about “a State’s ballot language.” But

that case was not about ba ot language at all. It was

about language on petitions, not on ballots.

Il. THE COURT OF APPEALS OPINION SUB-

STITUTES SPECULATION ABOUT WHAT

HYPOTHETICAL SOPHISTICATED VOTERS

MIGHT KNOW IN PLACE OF THE TRIAL

COURT’S FINDINGS OF FACT.

The State did not claim, and the Court of Appeals did

not find, that any of the District Court’s findings of fact

were “clearly erroneous.” Instead, the Court of Appeals

opinion adopts its own, contrary findings of fact, including

facts not even asserted by the State at any level.

The Court of Appeals opinion concludes that the 3%

warning is not necessarily false and misleading to all

potential voters. 422 F.3d at 859-61. But whether a

statement is false or misleading to the “reasonable” person

is an issue for the trier of fact, particularly where the

District Court is striking down a state statute as contrary

to the First Amendment. Lovell ex rel. Lovell v. Poway

Unified Sch. Dist., 90 F.3d 367, 370 (9th Cir. 1996).

Whether a statement is misleading is a question of fact.

Meade v. Cedarapids, Inc., 164 F.3d 1218, 1221-22 (9th

Cir. 1999). Also for the trier of fact is the assessment of the

materiality of the statement to the conclusions likely to be

drawn by its recipient. Provenz v. Miller, 102 F.3d 1478

(9th Cir. 1996).

The Court of Appeals fails to recognize that the

testimony of a witness is evidence. It characterizes the

statements of witness Caruso as being “unsupported by

any evidence in the record.” App. 15-16. But his sworn

statements, accepted as factual and credible by the Dis-

trict Court, constituted the entirety of the testimony

offered at the trial court. The Court of Appeals also states,

24

incorrectly, that “the material facts are not in dispute.”

App. 18. Whether the 3% warning is false, is misleading to

voters, or has the effect of discouraging petition circulation

are all questions of fact, which were in dispute and were

resolved in favor of plaintiff at the District Court.

A. THE COURT OF APPEALS OPINION

SPECULATES THAT OREGON VOTERS

CAN CONCEIVABLY UNDERSTAND THE

3% WARNING, BASED UPON MISCON-

CEPTIONS OF OREGON LAW ON PROP-

ERTY TAXES.

The Court of Appeals opinion’s explanation of how one

could hypothetically comprehend the 3% warning is

lengthy and complex and assumes — without evidence in

the record — that voters know the long history of property

tax legislation in Oregon. Tellingly, the Court of Appeals

opinion itself errs in its understanding of this history, even

though it imputes such detailed and intricate knowledge

to voters who could have been in grade school when the 3%

limit on property value assessment annual increases was

adopted, eight years before the election at issue here.”

The Court of Appeals opinion only speculates — with

no basis in any record — that Oregon voters in 2004 in

Yamhill County “were likely aware of the constitutional

three-percent limit.” The Court (App. 19-20) relies on the

assumed content of voters’ pamphlets and press coverage

from 1996 or 1997, none of which is in the record or even

referred to by judicial notice. It is merely assumed to exist.

The Court of Appeals opinion notes that property

owners will be versed in this “history,” thus allowing the

10

The Court of Appeals opinion incorrectly refers to Measure 50

(1997) as the source of the 3% limit; the source was Measure 47 (1996).

25

words to have meaning for only propertied voters, not the

“reasonable” voter.

The Court of Appeals approach is based on assuming

vast knowledge by voters, including the Court’s own

misunderstandings about the Oregon Constitution, which

limits property valuation assessment increases, not

property tax increases, as incorrectly stated by the 3%

warning. Property valuation and tax rates are independ-

ent variables applied to any parcel of property. Regardless

of property valuations (upon which there was zero evi-

dence), tax rates can go up or down, as levies expire (for

paid-off bonds, for example) and other levies are added.

Oregon Constitution, Article XI, § 11(1)(b) states:

For tax years beginning after July 1, 1997, the

property's maximum assessed value shall not

" The Court of Appeals discussion contains errors about Oregon’s

property tax system, not offered in the briefing of any party. It conflates

limits applicable to increases in assessed value with limits on tax rates.

For example, the Court of Appeals (App. 19) states:

As discussed above, the Oregon Constitution provides that a

“property’s maximum assessed value shall not increase by

more than three percent from the previous tax year.” Or.

Const. art. XI, § 11(1)(b). But this limitation may be ex-

ceeded by local option taxes submitted to and approved by

voters in the taxing district. Jd. § 11(4)(aXA). When con-

strued in context, then, the three-percent warning could be

read as an accurate reminder that the local option tax pro-

posed by Measure 36-55 would not be subject to the limita-

tion imposed by the Oregon Constitution.

This is incorrect on many levels. The limitation on increases in maxi-

mum assessed value cannot “be exceeded by local option taxes submit-

ted to and approved by voters in the taxing district.” To the contrary,

the limit on assessed values remains exactly the same. It is also not

correct that “the local option tax proposed by Measure 36-55 would not

be subject to the limitation imposed by the Oregon Constitution”

(repeated also at App. 27). It would remain fully subject to that

limitation, which applies to assessed valuations and not to tax rates.

26

increase by more than three percent from the

previous year.

This limitation in the Oregon Constitution does not apply

to any increase in “property taxes” but instead applies only

to any increase in “assessed value.” Thus, the 3% warning

is not remotely accurate, even if all voters are assumed to

have perfect detailed knowledge of the Oregon property

tax system. That assessed value increases are capped at

3% per year does not mean that property tax increases are

capped at 3% per year, because taxing authorities can take

steps to change their rates of taxation, either up or down.

Accordingly, there is not even a factual foundation for the

statement contained in the 3% warning, even if perfect

knowledge for voters is assumed.

The Court of Appeals opinion requires that voters

disregard the actual language of the 3% warning (which

refers to “property taxes”) and substitute their presumed

sophisticated knowledge of the Oregon Constitution, which

refers to increases in assessed valuation only. The Panel

makes the same error in using the “common wisdom”

(asserted in the State’s Reply Brief only, but not a “fact”

and never offered in the form of evidence) “that real

market values, meanwhile, have been ‘generally rising.’”

There was absolutely no evidence on that subject in the

record. This assumed lock-step relationship between

assessed values and “property taxes” was not even as-

serted by the State, and it not true.

The District Court heard testimony and found the 3%

warning to be “patently false” and “profoundly mislead-

ing.” The Court of Appeals opinion disregards this finding

and instead imposed on Caruso a variety of erroneous

evidentiary burdens, such as proving that “real market

values for some properties may be decreasing,” 422 F.3d at

860, when that was never even an issue before the trial

court.

27

In essence, the Court of Appeals concludes that, if

property taxes happen to go up by 3% for some other

reason, then indeed adding this incredibly small levy at

issue could result in an overall increase of “more than

three percent.” But “could” means that there is only some

infinitesimal possibility that the 3% warning is true.

Under that standard, the State could present voters with

an unlimited number of grossly misleading statements.

The 3% warning language states:

“This measure may cause property taxes to in-

crease more than three percent.”

It refers to “cause.” It is inherently misleading to attribute

the cause of an event to a factor which comprises 1/10,000

of the cause (or perhaps 1/150 of the cause), while not

even mentioning the factor which comprises the rest of the

cause (property taxes increasing by 3% for some other

reason, if in fact they are increasing for other reasons,

upon which the State produced zero evidence)

As ballots are read and acted upon by voters, the term

“cause” should be given its ordinary meaning. Definitions

from ordinary dictionaries and legal dictionaries are

similar and require that the “cause” be the agent “that

produces an effect or result.” BLACK’S LAW DICTIONARY (7th

ed. 1999). “Legal cause” is defined as “proximate cause,”

which is “a cause that directly produces an event and

without which the event would not have occurred.” Jd.

The Court of Appeals opinion also misapprehends the

nature of Measure 36-55 itself. For example, it asserts

that an initiative measure, by law, may “embrace one

subject only.” 422 F.3d at 857. The State made no such

argument, as it is incorrect. PUD creation is not an “initia-

tive” subject to Oregon Constitution, Article IV, § 1(2)(d),

but a special process under Oregon Constitution, Article XI,

Section 12, which pertains only to PUDs. Space limits here

do not permit us to describe several other instances where

28

the Court of Appeals opinion relies on arguments and

assertions of fact not offered by any party.

B. THE COURT OF APPEALS OPINION

REQUIRES VOTERS TO HAVE EXTEN-

SIVE HISTORICAL KNOWLEDGE AND TO

SPONTANEOUSLY DISBELIEVE THE OF-

FICIAL 3% WARNING.

The Court of Appeals opinion says that the 3% warn-

ing could possibly be interpreted in a way that renders it

sometimes true. Under that standard, the State could

present voters with an unlimited number of grossly

misleading statements that, with special detailed knowl-

edge and references, some voters might be able to construe

in a way that would make them true.

Here, the Court of Appeals approach would require

each voter to disbelieve the official 3% warning and then

do her own complicated calculations in order to come to

the conclusion that the 3% warning is not correct. It would

require each voter to take the following steps:

1. Read on the ballot, immediately under the

_ question itself, that “This measure may

cause property taxes to increase more than

three percent”;

2. Spontaneously choose not to believe that

particular statement;

3. Plumb her memory for some ballot measure

in 1996 that limited annual growth in prop-

erty value assessments;

4. Conclude that the 3% warning must some-

how refer to property value assessments and

not with property taxes, even though it says

nothing about value assessments;

29

5. Use the per dollar rate of the proposed tax

($0.003 per $1,000 of assessed valuation) to

calculate a percentage increase in property

taxes that is a factor of 10,000 different from

the 3% stated on the ballot; and

6. Conclude that the 3% warning is wrong by a

factor of 10,000, even though the warning

appears with great prominence on the offi-

cial ballot.

Instead, the trial court heard evidence and concluded that

the voter would instead believe the 3% warning and be

profoundly misled by it.

II. THE COURT OF APPEALS OPINION RE-

VERSES THE DISTRICT COURT DECISION

FOR PLAINTIFF ON HIS FOURTEENTH

AMENDMENT CLAIMS ONLY BY DISREGARD.- —

ING THE TRIAL COURT'S FINDINGS OF FACT.

The U.S. District Court ruled in favor of Caruso on his

due process Fourteenth Amendment claims as well. The

Court of Appeals opinion’s reversal here depends upon its

adoption of its own findings of fact, contrary to the trial

court’s, on whether the 3% warning was so misleading that

it triggered the standard of National Audubon Society v.

Davis, 307 F.3d 835, 858 (9th Cir. 2002).

' Another District Court Judge in Oregon has com-

mented on the extreme degree of misinformation in the 3%

warning. Oregonians for Accountability v. Bradbury, 2004

WL 1969405 (D. Or. 2004) concluded that the explanatory

statement prepared by various state officials for statewide

Measure 38 (2004) was sufficient. Regarding the -Due

Process claim, the court concluded:

The summary of the measure and the explana-

tory statement (not to mention the full text of the

measure), which accompany the Estimate, make

30

abundantly clear what Measure 38 will do. In

contrast, I can see how the inclusion of the three

percent warning in the ballot title in Horton -

and Caruso arguably “would so mislead voters

that they would be unable to decipher the subject

of the [measure].” Caruso at 12.

2004 WL 1969405, p. 5 (emphasis in original).

As the District Court noted, “Defendants conceded at

the January 13, 2004, oral argument, ‘This is a tough

statute to uphold even under that test.’” App. 40.

Dated: February 3,.2006 Respectfully submitted,

JAY LAWRENCE FRIEDHEIM DANIEL W. MEEK

Admiralty Associates Attorney

820 Mililani Street 10949 S.W. 4th Avenue

Suite 503 Suite 1000

Honolulu, HI 96813 Portland, OR 97219

(808) 545-5454 voice (503) 293-9021 voice

(808) 528-1818 fax (503) 293-9099 fax

jlf@pixi.com dan@meek.net

Counsel of Record for Petitioner Attorney for Petitioner

APPENDIX INDEX FOR

PETITION FOR CERTIORARI

Page

Caruso v. Yamhill County, 422 F.3d 848 (9th Cir.

September 6, 2005) (No. CV-03-01731-ALH).......... App. 1

Caruso v. Yamhill County, 2004 WL 2005626 (D.

Or. January 14, 2004) (No. CV-03-01731-ALH) ...App. 29

Horton v. Multnomah County, Opinion and Order of

October 17, 2003 (No. CV-03-1257-HA)................ App. 43

Caruso v. Yamhill County, __ F.3d __ (9th Cir.

November 15, 2005) (No. CV-93-01731-ALH)....... App. 59

Oregon Constitution, Article XI, § 11(1).........000.00.. App. 60

O.R.S. § 250.195 Procedure for elector dissatisfied

with title of county measure ................0........0000000+ App. 62

O.R.S. § 280.070 Manner of holding elections for

local option tax or permanent rate limit; addi-

tional statements in ballot title ..........000000000.. App. 63

Yamhill County’s Official Ballot Title for Measure

No. 36-55 for election of March 9, 2004 ................ App. 65

App. 1

422 F.3d 848

United States Court of Appeals,

Ninth Circuit.

Michael CARUSO, Plaintiff-Appellee,

Vv

YAMHILL COUNTY, an Oregon municipal

corporation, by and through its COUNTY

COMMISSIONER, Defendant,

and

State of Oregon, Intervenor-Appellant.

No. 04-35155.

Argued and Submitted May-3, 2005.

Filed Sept. 6, 2005.

Stephen K. Bushong, Oregon Department of Justice,

Salem, OR, for the intervenor-appellant.

Daniel W. Meek, Portland, OR, for the piaintiff-

appellee.

Appeal from the United States District Court for the

District of Oregon; Ancer L. Haggerty, District Judge,

Presiding. D.C. No. CV-03-01731-ALH.

Before: HUG, TASHIMA, and CLIFTON, Circuit

Judges.

CLIFTON, Circuit Judge:

The State of Oregon appeals a district court order

declaring Or.Rev.Stat. § 280.070(4\(a) unconstitutional and

permanently limiting its enforcement. Section 280.070(4)(a)

requires that ballots for initiatives proposing local option

taxes include a statement: “This measure may cause prop-

erty taxes to increase more than three percent.” The district

court deemed this requirement constitutionally infirm,

App. 2

concluding that inclusion of the “three-percent warning”

violated appellee Michael Caruso’s First Amendment

rights as a petition circulator and his due process rights as

a voter. We conclude that the requirement does not violate

the U.S. Constitution, reverse the decision of the district

court, and vacate the injunction limiting enforcement of

section 280.070(4)(a).

I. BACKGROUND

The Oregon Constitution reserves to the people “the

initiative power, which is to propose laws and amend-

ments to the Constitution and enact or reject them at an

election independently of the Legislative Assembly.” Or.

Const. art. IV, § 1. Under Oregon law, the ballot titles for

initiatives that propose the imposition of a local option tax

must include an additional statement commonly referred

to as the “three-percent warning": “This measure may

cause property taxes to increase more than three percent.”

Or.Rev.Stat. § 280.070(4)(a).

Appellee Michael Caruso was among the chief peti-

tioners for an initiative measure which appeared on the

ballot for the March 9, 2004, Yamhill County Special

Election. Consistent with section 280.070(4)(a), the Yam-

hill County Commission adopted, on November 26, 2003,

the following ballot title for the measure:

App. 3

MEASURE 36-55

AUTHORIZES SPECIAL LEVY IF YAMHILL

COUNTY PUD' IS FORMED

QUESTION: Shall voters authorize levy of

$0.003 per $1,000 of assessed valuation if Yam-

hill County People’s Utility District is formed?

This measure may cause property taxes to in-

crease more than three percent.

SUMMARY: This measure may be passed only

at an election with at least a 50 percent voter

turnout.

If the Yamhill County People’s Utility District is

formed, this measure allows the District board cf

directors to impose a special levy on property

within the district. Funds raised from the levy

would be used to pay for an engineer’s report and

a later election to issue revenue bonds, if held.

This one-time levy will raise about $9,700.00.

The levy for a house with an assessed value of

$150,000 would be about 45 cents.

The estimated tax cost for this measure is an

ESTIMATE ONLY based on the best information

available from the county assessor at the time of

the estimate.

See also Or.Rev.Stat. § 250.035(1) (providing that the

ballot title of any non-sta-e initiative shall consist of a

caption, question, and summary).

' Formation of the Yamhill County People’s Utility District

(“PUD”) was proposed by Measure 36-54, which appeared on the same

ballot.

App. 4

Caruso challenged the constitutionality of section

280.070(4)(a) before the district court, asserting that the

required inclusion of the three-percent warning violated

his First Amendment rights as a petition circulator and

his due process rights as a voter. Caruso requested that

the district court declare the provision unconstitutivunal,

both as applied to Measure 36-55 and on its face, and

enter preliminary and permanent injunctions against its

enforcement.

With the parties’ consent, the district court consoli-

dated the hearing on Caruso’s motion for a preliminary

injunction with the trial on the merits. In an opinion

issued the day after the hearing, the district court held

section 280.070(4)(a) unconstitutional as applied and as

enacted. Adopting the reasoning set forth in a companion

decision, Horton v. Multnomah County, No. Civ. 03-1257-

HA, 2004 WL 1745789 (D.Or. Aug.4, 2004), the district

court deemed the three-percent warning “false and mis-

leading” because it implied that the initiative measure “by

itself” “may cause property taxes to increase more than

three percent” when the increase proposed by Measure 36-

55 was in fact much lower: only “$0.003 per $1,000 of

assessed valuation.”

The district court reasoned that section 280.070(4)(a)

was therefore constitutionally infirm. First, it impeded

Caruso’s ability to communicate the actual tax conse-

quences of Measure 36-55 and forced him to be associated

with the State’s misleading message. In light of these

burdens on “core political speech,” the district court

determined that section 280.070(4)(a) was subject to, and

did not survive, strict scrutiny under the First Amend-

ment. Second, section 280.070(4)(a) substantially chilled

protected speech. Specifically, because the three-percent

App. 5

warning applied to all initiatives proposing local option

taxes — including those which posed no threat of them-

selves increasing property taxes more than three percent —

it discouraged others from circulating such initiatives by

erecting the additional “hurdle of convincing voters of the

false nature of the state mandated ‘warning.’” Finally, the

three-percent warning obscured the actual subject of

Measure 36-55, upsetting the evenhandedness of the

election and working a fundamental unfairness on the

voters.

To remedy these constitutional infirmities, the district

court enjoined the government defendants from enforcing

section 280.070(4)(a) in relation to Measure 36-55, and,

more broadly, in relation to “all ballot measures that by

themselves cannot cause an increase in property taxes of

more than three percent.” The State of Oregon, which had

intervened to oppose Caruso’s claims, timely appealed.’

II. DISCUSSION

A. Mootness

Pursuant to the district court injunction, Measure 36-

55 appeared on the ballot for the March 9, 2004, Yamhill

County Special Election without the three-percent warn-

ing. The measure failed, with 3,250 voters favoring the

levy and 9,153 opposing it. The State argues that the

election rendered moot Caruso’s claim that section

280.070(4)(a) is unconstitutional as applied to the defeated

measure.

* The named defendant, Yamhill County, also participated in the

proceedings below. It did not appeal the judgment of the district vourt.

App. 6

As a general rule, a case is moot “‘when the issues

presented are no longer ‘live’ or the parties lack a legally

cognizable interest in the outcome.’” Schaefer v. Town-

send, 215 F.3d 1031, 1033 (9th Cir.2000) (quoting Powell v.

McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d

491 (1969)). There is an exception, however, for challenged

practices that are “‘capable of repetition, yet evading

review.” Id. (quoting Dunn v. Blumstein, 405 U.S. 330,

333 n. 2, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972)). Under this

exception, a court may consider the merits of a case that

would otherwise be deemed moot when “(1) the challenged

action is in its duration too short to be fully litigated prior

to cessation or expiration, and (2) there is a reasonable

expectation that the same complaining party will be

subject to the same action again.” Spencer v. Kemna, 523

U.S. 1, 17, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998) (altera-

tions and citation omitted).

Cases challenging election laws often fall within the

“capable of repetition, yet evading review” exception

“because the inherently brief duration of an election is

almost invariably too short to enable full litigation on the

merits.” Porter v. Jones, 319 F.3d 483, 490 (9th Cir.2003).

For this reason, “[ilf such cases were rendered moot by the

occurrence of an election, many constitutionally suspect

election laws ... could never reach appellate review.”

Joyner v. Mofford, 706 F.2d 1523, 1527 (9th Cir.1983).

Here, the State cannot seriously contest that the period

between adoption of the ballot title and election on the

measure — in this case, four months - is too brief to permit

“full litigation on the merits.” See Meyer v. Grant, 486 U.S.

414, 417 n. 2, 108 S.Ct. 1886, 100 L.Ed.2d 425 (1988)

(finding the “evading review” prong satisfied where the

App. 7

state “grantled] the proponents of an initiative only six

months in which to obtain the necessary signatures”).

The_ State more forcefully contests the expectation

that Caruso “will be subject to the same action again.” It

observes that there is no evidence in the record that

Caruso has circulated or intends to circulate another

initiative proposing the imposition of a local option tax.

Although this is true, we have rejected the analogous

argument that a candidate’s challenge to an election law is

not moot “only when [the] candidate plans to seek reelec-

tion.” Schaefer, 215 F.3d at 1033. In Schaefer, we observed

that the Supreme Court had proceeded to the merits of a

voter’s challenge to the residency requirements for voting

even though by the time of the Court’s decision, the voter

had resided in the state long enough to vote in the next

election. Jd. at 1033 (citing Blumstein, 405 U.S. at 331-33

& n. 2, 92 S.Ct. 995). We accordingly examined the merits

of a prospective candidate’s challenge to the residency

requirements for nomination even though by the time of

our decision, the contested seat had been filled and the

candidate “refuse|d} to disclose his intentions” for running

for state office in the future. Jd.; accord Merle v. United

States, 351 F.3d 92, 95 (3d Cir.2003) (disagreeing with the

suggestion that a candidate must allege his intent to run

in a future election to satisfy the “capable of repetition”

requirement).

Consistent with Schaefer, we conclude that Caruso’s

claims are not moot. Although Caruso has not expressed

an intention to circulate similar initiatives in the future,

enforcement of section 280.070(4)(a) is nevertheless “capa-

ble of repetition, yet evading review.” Accordingly, we

proceed to the merits.

App. 8

B. Constitutional and Statutory Context

We begin by setting forth the context in which we

must examine section 280.070(4)(a). Before 1997, property

in Oregon was assessed and taxed at its real market value.

See Or.Rev.Stat. § 308.232 (1995). Then, in 1997, Oregon

voters adopted Measure 50, which amended the Oregon

Constitution to limit the property taxes imposed by Ore-

gon counties. See Flavorland Yoods v. Wash. County

Assessor, 334 Or. 562, 54 P.3d 582, 583-84 (2002) (en

banc). First, Measure 50 “rolled back” a property’s maxi-

mum assessed value for the tax year beginning July 1,

1997, to its “real market value for the tax year beginning

July 1, 1995, reduced by 10 percent.” Or. Const. art. XI,

§ 11(1)(a). Second, “[flor tax years beginning after July 1,

1997,” Measure 50 provided that a “property’s maximum

assessed value shali not increase by more than three

percent from the previous tax year.” Jd. § 11(1)(b). Third,

Measure 50 established a “permanent limit on the rate of

ad valorem property taxes imposed” by each local taxing

district. Jd. § 11(3)(b). This limit is commonly referred to

as the “permanent rate.” See Shilo Inn v. Multnomah

County, 333 Or. 101, 36 P.3d 954, 958 (2001), modified by

334 Or. 11, 45 P.3d 107 (2002).

The limits imposed by Measure 50, however, were

subject to an exception for taxes submitted to and ap-

proved by the voters:

A local taxing district other than a school district

may impose a local option ad valorem property

tax that exceeds the limitations imposed under

this section by submitting the question of the

levy to voters in the local taxing district and ob-

taining the approval of a majority of the voters

voting on the question.

App. 9

Or. Const. art. XI, § 11(4)(a)(A). The conditions for submit-

ting local option taxes to the voters are provided for by

Oregon statutes. See Or.Rev.Stat. §§ 280.070-.075. These

statutes require that the ballot titles for such measures

include, in addition to the three-percent warning, “the

period during which the proposed local option tax will be

imposed,” “[t}he first fiscal year in which the proposed

local option tax will be imposed,” and “the total amount of

money to be raised by the proposed local option tax, in

dollars and cents.” Jd. §§ 280.070(4)(a), 280.070(5)a)-(b),

280.075(1). Against this constitutional and statutory back-

drop, we consider Caruso’s First and Fourteenth Amend-

ment challenges.

C. First Amendment

Caruso contends that section 280.070(4)(a) infringed

upon his complementary First Amendment rights “to

speak freely and ... to refrain from speaking at all.”

Wooley v. Maynard, 430 U.S. 705, 714, 97 S.Ct. 1428, 51

L.Ed.2d 752 (1977). Specifically, he contends that the

three-percent warning restricted his ability to communi-

cate accurately the tax consequences of Measure 36-55 and

forced him instead to be associated with the State’s

misleading communication. The district court agreed.

Where, as here, a district court sustains a constitutional

challenge to a restriction on speech, its findings of fact are

reviewed for clear error. Lovell ex. rel. Lovell v. Poway

Unified Sch. Dist., 90 F.3d 367, 370 (9th Cir.1996). Its

application of law to those facts and its ultimate determi-

nation that the restriction is unconstitutional, however,

are reviewed de novo. Mont. Right to Life Ass'n v. Eddle-

man, 343 F.3d 1085, 1090 (9th Cir.2003).

App. 10

1. Level of Scrutiny

We turn at the outset to the appropriate level of First

Amendment scrutiny, pausing first to reject the State’s

suggestion that no scrutiny is warranted because the

speech regulated by section 280.070(4)(a) is the govern-

ment’s. We have elsewhere identified “several recognized

instances of constitutional limitations on government

speech.” R.J. Reynolds Tobacco Co. v. Shewry, 384 F.3d

1126, 1140 (9th Cir.2004). For example, the First Amend-

ment may limit government speech that “makel[s] private

speech difficult or impossible,” id., or that attributes a

government message to a private speaker, see Johanns v.

Livestock Mktg. Ass’n, ___. U.S. ___-__s & nn. _ 7-8, 125 S.Ct.

2055, 2064-65 & nn. 7-8, 161 L.Ed.2d 896 (2005). Caruso

argues that section 280.070(4)(a) inflicted both types of

harm.

a. Election Laws

An election law that burdens First Amendment rights

is not necessarily subject to strict scrutiny, however. See

Clingman v. Beaver, _.. U.S. __, __, 125 S.Ct. 2029,

2038, 161 L.Ed.2d 920 (2005). Rather, such laws are

generally subject to a balancing standard, under which a

reviewing court weighs the “character and magnitude” of

the burden imposed against the interests advanced to

justify that burden. See e.g., Timmons v. Twin Cities Area

New Party, 520 U.S. 351, 358, 117 S.Ct. 1364, 137 L.Ed.2d

589 (1997); Burdick v. Takushi, 504 U.S. 428, 434, 112

S.Ct. 2059, 119 L.Ed.2d 245 (1992); Anderson v. Cele-

brezze, 460 U.S. 780, 789, 103 S.Ct. 1564, 75 L.Ed.2d 547

(1983). As the Supreme Court explained in Burdick, it has

typically applied this “more flexible” standard to election

laws because “{clommon sense, as well as constitutional

App. 11

law, compels the conclusion that government must play an

active role in structuring elections.” 504 U.S. at 433, 112

S.Ct. 2059; accord Clingman, 125 S.C+. at 2039 (explaining

that subjecting every electoral regulation to strict scrutiny

would “hamper the ability of States to run efficient and

equitable elections”).

To be sure, the Supreme Court has in several other

cases subjected election laws to strict scrutiny rather than

flexible balancing. See, e.g., McIntyre v. Ohio Elections

Comm'n, 514 U.S. 334, 345-46, 115 S.Ct. 1511, 131

L.Ed.2d 426 (1995); Meyer v. Grant, 486 U.S. 414, 420, 108

S.Ct. 1886, 100 L.Ed.2d 425 (1988). Unlike the cases

described above, these cases did not involve regulations of

the “voting process”; they instead involved regulations of —

or, more precisely, limitations on — “pure speech.” See

McIntyre, 514 U.S. at 345, 115 S.Ct. 1511; accord Camp-

bell v. Buckley, 203 F.3d 738, 745 (10th Cir.2000) (“[S]trict

scrutiny is applied where the government restricts the

overall quantum of speech available to the election or

voting process.”). Although these cases “do not lend them-

selves to a simple synthesis,” Campbell, 203 F.3d at 745,

we regard them as distinguishable in two respects.

First, unlike the provisions challenged in McIntyre

and Meyer (which respectively prohibited the distribution

of anonymous campaign literature, McIntyre, 514 U.S. at

336, 115 S.Ct. 1511, and the payment of petition circula-

tors, Meyer, 486 U.S. at 416, 108 S.Ct. 1886), section

280.070(4)(a) governs the political process more than it

does political speech. See McIntyre, 514 U.S. at 344, 115

S.Ct. 1511. Significantly, the provision regulates only

what is said through the ballot itself. See Timmons, 520

U.S. at 362-63, 117 S.Ct. 1364 (applying flexible balancing

where the challenged law burdened a political party’s

‘App. 12

ability to communicate through the ballot only); Rubin v.

City of Santa Monica, 308 F.3d 1008, 1015 (9th Cir.2002)

(similar). All other means of communication, including the

“interactive” discussions for which First Amendment

protection is “at its zenith,” Meyer, 486 U.S. at 422, 425,

108 S.Ct. 1886, fall outside the provision’s regulatory

scope.

Caruso responds that the ballot is not merely a means

of communication; it is the most direct and credible means

of communication. This argument has some force. Indeed,

the Supreme Court has characterized “‘the instant before

the vote is cast’” as “‘the most crucial stage in the election

process.” Cook v. Gralike, 531 U.S. 510, 525, 121 S.Ct.

1029, 149 L.Ed.2d 44 (2001) (quoting Anderson v. Martin,

375 U.S. 399, 402, 84 S.Ct. 454, 11 L.Ed.2d 430 (1964)).

But the fact that the ballot is “crucial” to an election does

not imply that Caruso therefore has a First Amendment

right to communicate a specific message through it. To the

contrary, the Supreme Court in Timmons rejected the

“contention that{a political party] has a right to use the

ballot itself to send a particularized message”; “Ballots

serve primarily to elect candidates, not as forums for

political expression.” 520 U.S. at 362-63, 117 S.Ct. 1364;

accord Rubin, 308 F.3d at 1016 (“A ballot is a ballot, not a

bumper sticker.”).

Caruso argues that cases such as Timmons are

inapposite because they involved candidates rather than

initiatives. We disagree. In Buckley v. American Constitu-

tional Law Foundation, Inc., 525 U.S. 182, 119 S.Ct. 636,

142 L.Ed.2d 599 (1999), a case involving ballot initiatives,

the Supreme Court expressly affirmed the Tenth Circuit’s

reliance on Timmons. See id. at 190, 119 S.Ct. 636. The

Supreme Court further affirmed that “States allowing

App. 13

ballot initiatives have considerable leeway to protect the

integrity and reliability of the initiative process, as they

have with respect to election processes generally.” /d. at

191, 119 S.Ct. 636. It is true that the Supreme Court has

elsewhere highlighted the differences between initiatives

and candidates, but it appears to have done so not because

the First Amendment is more protective of initiatives than

of candidates, but because elections on initiatives pose

lesser risks of quid pro quo corruption. See, e.g., First Nat'l

Bank v. Bellotti, 435 U.S. 765, 790, 98 S.Ct. 1407, 55

L.Ed.2d 707 (1978) (“The risk of corruption perceived in

cases involving candidate elections simply is not present in

a popular vote on a public issue.” (citations omitted)).

Caruso also observes that notwithstanding Timmons,

Chief Justice Rehnquist in Cook applied strict scrutiny to

an amendment governing the composition of Missouri

ballots. See Cook, 531 U.S. at 530-32, 121 S.Ct. 1029

(Rehnquist, C.J., concurring in the judgment). Specifically,

the amendment required that ballots label candidates for

congressional office who “DISREGARDED VOTERS’

INSTRUCTIONS ON TERMS LIMITS” or “DECLINED

TO PLEDGE TO SUPPORT TERM LIMITS.” 7d. at 514-

15, 121 S.Ct. 1029. Chief Justice Rehnquist described the

requirement as constitutionally suspect in part because it

was “not neutral as to issues or candidates.” Jd. at 532,

121 S.Ct. 1029. To the contrary, only one issue was se-

lected for comment and “only those candidates who fail[ed]

to conform to the State’s position receive(d] derogatory

labels.” Jd.

Caruso maintains that here, just as Chief Rehnquist

described in Cook, the State selected a single consideration

for comment on the ballot. As an initia) matter, we note

that Chief Justice Rehnquist’s opinion in Cook was a

App. 14

concurrence, joined only by Justice O’Connor. Id. at 530,

121 S.Ct. 1029. In contrast to Chief Justice Rehnquist’s

concurring opinion, the majority opinion reviewed Mis-

souri’s labeling requirement under the Tenth Amendment

and the Elections Clause rather than under the First

Amendment. 7d. at 518-27, 121 S.Ct. 1029. In fact, the

majority specifically rejected the respondents’ reliance on

“First Amendment cases upholding ‘time, place, and

manner’ regulations of speech,” explaining that

“(allthough the Elections Clause uses the same phrase as

that branch of our First Amendment jurisprudence, it by

no means follows that such cases have any relevance to

our disposition of this case.” Jd. at 527 n. 20, 121 S.Ct.

1029.

But even apart from its precedential value, we regard

Chief Justice Rehnquist’s concurring opinion as distin-

guishable. Unlike Missouri's labeling requirement, which

applied to “only those candidates who failfed] to conform to

the State’s position,” id. at 532, 121 S.Ct. 1029, Oregon’s

three-percent warning applies to all “measure[s} authoriz-

ing the imposition of local option taxes,” Or.Rev.Stat.

§ 280.070(4\(a). Accordingly, no measure or group of

measures is “singled out.” Compare Cook, 531 U.S. at 532,

121 S.Ct. 1029. And unlike congressional candidates, who

“may debate tax reform, Social Security, national security,

and a host of other issues,” id., initiative measures, by law,

may “embrace one subject only,” Or. Const. art. IV,

§ (2)d). For Measure 36-55, that subject was a one-time

increase in property taxes. The measure’s possible effect

on property taxes, then, was not simply one facet of many.

Finally, unlike the State of Missouri, which “ha[d] chosen

one and only one issue to comment on,” id., the State of

Oregon has chosen to comment not only on a measure’s

App. 15

possible effect on property taxes, but also on the rate of the

special levy, the voter turnout required to pass it, the

proposed uses for the funds, the total amount of funds

anticipated, and the estimated additional cost to property

owners.

Second, and also unlike the provisions challenged in

McIntyre and Meyer, section 280.070(4)(a) does not have

“the inevitable effect of reducing the total quantum of

speech on a public issue.” Meyer, 486 U.S. at 423, 108 S.Ct.

1886; accord McIntyre, 514 U.S. at 346, 115 S.Ct. 1511. In

Meyer, the Supreme Court determined that Colorado’ ban

on the use of the paid petition circulators “limit[ed] the

number of voices who will convey appellees’ message and

the hours they can speak,” thus restricting their ability to

reach a larger audience, “garner the number of signatures

necessary to place the matter on the ballot,” and “make

the matter the focus of statewide discussion.” 486 U.S. at

422-23, 108 S.Ct. 1886. The Court quoted the observation

made by the Colorado Supreme Court in another context:

“(T]he solicitation of signatures on petitions is work. It is

time-consuming and it is tiresome — so much so that it

seems that few but the young have the strength, the ardor

and the stamina to engage in it, unless, of course, there is

some remuneration.” Jd. at 423-24, 108 S.Ct. 1886 ‘quot-

ing Urevich v. Woodard, 667 P.2d 760, 763 (Colo.1983)).

In contrast, the effect of the three-percent warning on

the “total quantum of speech” is uncertain. In a declara-

tion submitted to the district court, Caruso predicted that

continued enforcement of the _ three-percent-werning

requirement would discourage petition circulators “as they

wlould] realize that all of their work can and will be

nullified by the false statement that will appear cn the

ballot.” But Caruso’s prediction — unsupported by any

App. 16

evidence in the record, compare Am. Constitutional Law

Found., 525 U.S. at 198, 119 S.Ct. 636 (describing the

testimony of several petition circulators who recounted the

harassment and fear that they and others had experienced

as a result of the requirement that they wear identifica-

tion badges) — is not the only plausible one. In fact, the

requirement “might encourage more speech,” Campbell,

203 F.3d at 745, with petition circulators working not only

to collect signatures, but also to inform voters that their

measures would not, by themselves, increase property

taxes more than three percent. Along these lines, we note

that the three-percent warning required by section

280.070(4)(a) is “separated from the moment the circulator

speaks,” leaving circulators free to contest its accuracy in

their conversations with electors. Compare Am. Constitu-

tional Law Found., 525 U.S. at 198-200, 119 S.Ct. 636

(explaining that Colorado’s affidavit requirement, unlike

its identification badge requirement, “exemplifies the type

of regulation for which McIntyre left room” because it

“must be met only after circulators have completed their

conversations with electors”).

b. Compelled Speech

Caruso contends that section 280.070(4)(a) should be

subject to strict scrutiny for the additional reason that it

forced him to be associated with the State’s message. See

Pac. Gas & Elec. Co. v. Pub. Utils. Comm’n, 475 U.S. 1, 32-

33, 106 S.Ct. 903, 89 L.Ed.2d 1 (1986); Wooley v. Maynard,

430 U.S. 705, 714, 97 S.Ct. 1428, 51 L.Ed.2d 752 (1977). Yet

unlike the requirements challenged in Pacific Gas & Electric

and Wooley, section 280.070(4)(a) does not require that

owners use their private property to transmit the State’s

message. See Pac. Gas & Elec. Co., 475 U.S. at 17-18, 106

App. 17

S.Ct. 903 (invalidating an order requiring a utility com-

pany “to use its property - the billing envelopes — to

distribute the message of another”); Wooley, 430 U.S. at

714, 97 S.Ct. 1428 (invalidating a New Hampshire law

requiring drivers to use their cars as a “‘mobile billboard’

for the State’s ideological message”). The provision instead

provides for the State’s message to be transmitted through

ballots, documents prepared, printed, and distributed by —

and therefore attributed to — State and local governments.

See Timmons, 520 U.S. at 356, 117 S.Ct. 1364; see also

Johanns, 125 S.Ct. at 2065, 125 S.Ct. 2055 (“[T}his second

[compelled speech] theory might ... form the basis for an

as-applied challenge — if it were established, that is, that

individual beef advertisements were attributed to respon-

dents.”).

Nor dues section 280.070(4)(a) require the “affirmation

of a belief.” Bd. of Educ. v. Barnette, 319 U.S. 624, 633, 63

S.Ct. 1178, 87 L.Ed. 1628 (1943). Oregon law requires that

the ballot title for a county initiative be prepared by the

district attorney, not by the petitioner. See Or.Rev.Stat.

§ 250.175(3). Indeed, in his declaration, Caruso opined

that voters view the three-percent warning as “an official

statement of government.” No part of section 280.070(4)(a)

required Caruso to affirm the government’s statement;

rather, he remained free to publicly dissociate himself

from it. See PruneYard Shopping Ctr. v. Robins, 447 U.S.

74, 88, 100 S.Ct. 2035, 64 L.Ed.2d 741 (1980).

We thus find the present appeal distinguishable from

both the election law cases and the compelled speech cases

in which the Supreme Court has applied strict scrutiny.

We accordingly apply the Supreme Court’s more flexible

balancing standard.

App. 18

2. Balancing Standard

Under this standard, “the rigorousness of [a reviewing

court's] inquiry into the propriety of a state election law

depends upon the extent to which a challenged regulation

burdens First and Fourteenth Amendment rights.” Bur-

dick, 504 U.S. at 434, 112 S.Ct. 2059. “[W]hen those rights

are subjected to ‘severe’ restrictions, the regulation must

be ‘narrowly drawn to advance a state interest of compel-

ling importance.’” Jd. (quoting Norman v. Reed, 502 U.S.

279, 289, 112 S.Ct. 698, 116 L.Ed.2d 711 (1992)). But

when those rights are subjected only to “‘reasonable,

nondiscriminatory’” restrictions, “‘the State’s important

regulatory interests are generally sufficient.’” Jd. (quoting

Anderson, 460 U.S. at 788, 103 S.Ct. 1564).

a. Burden

Caruso argues that section 280.070(4)(a) imposed a

“severe” burden on his communication with voters by

requiring that the ballot title for Measure 36-55 include

the “false and misleading” warning that “[t]his measure

may cause property taxes to increase more than three

percent.” This warning, Caruso maintains, implied that

Measure 36-55 by itself might cause property taxes to

increase more than three percent when the measure in

fact proposed a much lower increase of 0.0003 percent.

Because the material facts are not in dispute, “the charac-

ter and extent of the statute’s burden involves a question

of law,” which we review de novo. Krislov v. Rednour, 226

F.3d 851, 859 (7th Cir.2000) (citing (WIN) Wash. Initia-

tives Now v. Rippie, 213 F.3d 1132, 1137 (9th Cir.2000)).

Mindful of the constitutional backdrop against which

section 280.070(4\a) was enacted, we reject Caruso’s

App. i9

assumption that his is the only reasonable interpretation

of the three-percent warning. As discussed above, the

Oregon Constitution provides that a “property’s maximum

assessed value shall not increase by more than three

percent from the previous tax year.” Or. Const. art. XI,

§ 11(1)(b). But this limitation may be exceeded by local

option taxes submitted to and approved by voters in the

taxing district. Jd. § 11(4)(a)(A). When construed in con-

text, then, the three-percent warning could be read as an

accurate reminder that the local option tax proposed by

Measure 36-55 would not be subject to the limitation

imposed by the Oregon Constitution. In other words,

absent approval of Measure 36-55, maximum assessed

values and, in turn, property taxes could increase by no

more than three percent. Jd. § 11(1)(b). If the measure

were approved, however, property taxes could increase by

more than that amount. Jd. § 11(4)(a)(A).

Caruso offers several reasons to reject this reading: (a)

voters are unlikely to know of the constitutional three-

percent limit; (b) the constitutional three-percent limit

applies to maximum assessed values, not property taxes;

(c) there is only an “infinitesimal possibility” that other

property taxes will increase three percent; and (d) even if

other property taxes increased three percent, it would not

be Measure 36-55 that would “cause” total taxes to in-

crease more than that amount. We address these reasons

in turn.

As to voters’ knowledge, we note that Measure 50,

which imposed the three-percent limit, was adopted by

referendum. Flavorland Foods, 54 P.3d at 583-84. Before

the election on Measure 50, voters would have been

presented with summaries of its impact on the ballot and

in the voters’ pamphlet. Or.Rev.Stat. §§ 250.035(2\d),

App. 20

251.185(1). It is also likely that the ballot issue was the

subject of discussion and press coverage leading up to

election day. We further note that Measure 50 replaced

Measure 47, a “short-lived constitutional amendment”

which had been enacted by the voters by ballot initiative

the year before the approval of Measure 50, and which

included substantially the same property tax limitations.

See Flavorland Foods, 54 P.3d at 583 (explaining that

“‘Icjertain practical and technical difficulties in the appli-

cation of Measure 47 led the legislature to propose, and

the people to adopt, Measure 50 as its effective replace-

ment’” (quoting Shilo Inn, 36 P.3d at 958 n. 6)). As such,

voters would have been presented with substantially

identical summaries before the election on Measure 47 as

well. Accordingly, although voters might not have had

perfect knowledge of the Oregon property tax system, they

were likely aware of the constitutional three-percent limit,

which not only was the subject of two separate ballot

measures, both of which the voters approved, but which

also affected the calculation of property taxes for every

year since its adoption.

As to the difference between maximum assessed

values and property taxes and the likelihood that the

latter will increase by three percent, Caruso’s assertions

are undermined by other limitations imposed by Measure

50. Taken together, these limitations create more than an

“infinitesimal possibility” that property taxes will increase

three percent. As described above, in addition to imposing

the three-percent limit, Measure 50 “rolled back” proper-

ties’ maximum assessed values for the tax year beginning

July 1, 1997, and established a “permanent limit on the

rate of ad valorem property taxes imposed” by each local

taxing district. Or. Const. art. XI, § 11(1)(a)-(3)(b). The

App. 21

State informs us that real market values, meanwhile, have

been “generally rising.” The result is that for tax years

beginning after July 1, 1997, a property’s assessed value —

defined as “the lesser of: (a) The property's maximum

assessed value; or (b) The property’s real market value,”

Or.Rev.Stat. § 308.146 — is likely to equal its maximum

assessed value. And as maximum assessed values increase

by three percent per year, property taxes increase by the

same amount because they are imposed at the permanent

rate established by Measure 50."

Finally, as to the “cause” of a greater-than-three-

percent increase in property taxes, predictable three-

percent increases in property taxes suggest that local

option taxes may in fact “produce|]” an increase of more

than that amount. See Black’s Law Dictionary 234 (8th

ed.2004) (defining “cause” as “[s]omething that produces

an effect or result”). That is, absent approval of a local

option tax, maximum assessed values and, frequently,

assessed values and property taxes could increase by no

more than three percent. Or. Const. art. XI, § 11(1)(b). If a

local option tax is approved, however, it could produce an

increase of more than that amount. Jd. § 11(4)(a)(A).

J

* We do not dispute that the real market values for some properties

may be decreasing. For these properties, the likelihood that property

taxes would increase by three percent in a given year would be much

lower, because assessed values would likely equal decreasing real

market values rather than incrementally increasing maximum assessed

values. But particularly in the absence of evidence that a substantial

portion of Oregon properties fit this description, we decline to condition

application of section 280.070(4a) on the real market values of

individual properties. Deing so would effectively “tie the hands” of the

State. See Burdick, 504 U.S. at 434, 112 S.Ct. 2059.

App. 22

Certainly, the three-percent warning could also be

read to suggest that Measure 36-55 by itself might cause

property taxes to increase more than three percent, but we

regard its interpretation as an accurate reminder that the

measure would not be subject to the constitutional three-

percent limit to be at least as plausible. For this reason,

we do not characterize the burden imposed by section

280.070(4)(a) as “severe.” Rather, like the Fourth Circuit,

we believe that we may not declare a State’s ballot lan-

guage unconstitutionally burdensome “merely because it

could conceivably mislead some individuals and could have

been crafted more adroitly.” Cf. McLaughlin v. N.C. Bd. of

Elections, 65 F.3d 1215, 1227 (4th Cir.1995) (rejecting

constitutional challenges to the allegedly misleading

heading printed on voter petitions because the court could

not say that the language “permits of only one interpreta-

tion” (internal quotation marks omitted)).

b. Interest

Where, as here, a state election law imposes restric-

tions on speech that are not severe, “‘the State’s important

regulatory interests are generally sufficient’” to justify it.

Burdick, 504 U.S. at 434, 112 S.Ct. 2059 (quoting Ander-

son, 460 U.S. at 788, 103 S.Ct. 1564). The State maintains

that section 280.070(4)(a) advances its interest in remind-

ing -voters that approving a local option tax effectively

waives the constitutional three-percent limit. The suffi-

ciency of this interest presents a question of law, which we

review de novo. See McClure v. Galvin, 386 F.3d 36, 41-45

(1st Cir.2004).

The Supreme Court has consistently acknowledged

states’ legitimate interest in “fostering informed and

App. 23

educated expressions of the popular will.” Anderson, 460

U.S. at 796, 103 S.Ct. 1564; see, e.g., Eu v. S.F. County

Democratic Cent. Comm., 489 U.S. 214, 228, 109 S.Ct.

1013, 103 L.Ed.2d 271 (1989); Jenness v. Fortson, 403 U.S.

431, 442, 91 S.Ct. 1970, 29 L.Ed.2d 554 (1971). By requir-

ing inclusion of the three-percent warning as a “shorthand

designation” of an initiative’s potential tax consequences,

section 280.070(4)(a) “plays a role in the process by which

voters inform themselves for the exercise of the franchise.”

Cf. Tashjian v. Republican Party, 479 U.S. 208, 220, 107

S.Ct. 544, 93 L.Ed.2d 514 (1986) (observing that “party

labels provide a shorthand designation of the views of

party candidates on matters of public concern”); compare

McIntyre, 514 U.S. at 348-49, 115 S.Ct. 1511 (noting that

“in the case of a handbill written by a private citizen who

is not known to the recipient, the name and address of the

author add little, if anything, to the reader’s ability to

evaluate the document’s message”).

We are mindful that a state’s asserted interest in

informing voters will not necessarily justify the burdens

its regulations impose on First Amendment rights. For

example, “[a] state’s claim that it is enhancing the ability

of its citizenry to make wise decisions by restricting the

flow of information to them must be viewed with some

skepticism.” Anderson, 460 U.S. at 798, 103 S.Ct. 1564.

Skepticism is also warranted if a state goes beyond

“merely” providing information about candidates to “handi-

cap(ping]” them. Cook, 531 U.S. at 525, 121 S.Ct. 1029

(internal quotation marks omitted). Section 280.070(4)(a),

however, neither restricts information nor handicaps

initiatives. It instead provides additional information,

““open[ing] the channels of communication rather than...

closling] them,” and applies equally to all initiatives

App. 24

proposing local option taxes, leaving no measure at a

“political disadvantage.” Compare Anderson, 460 U.S. at

798, 103 S.Ct. 1564 (quoting Va. Pharmacy Bd. v. Va.

Consumer Council, 425 U.S. 748, 770, 96 S.Ct. 1817, 48

L.Ed.2d 346 (1976)); Cook, 531 U.S. at 525, 121 S.Ct. 1029.

We note, too, that the State enacted section 280.070(4)(a)

as part of a statutory scheme requiring that ballot titles

for local option taxes include not only the three-percent

warning, but also the rate, period, amount, and purpose of

the proposed option tax. See Or.Rev.Stat. §§ 280.070,

280.075. The State’s directing attention to this variety of

considerations is in our view more consistent with an

interest in informing voters than with an interest in

influencing them. Compare Anderson, 375 U.S. at 402, 84

S.Ct. 454 (“[B]y directing the citizen’s attention to the

single consideration of race or color, the State ... may

[djecisively influence the citizen to cast his ballot along

racial lines.”).

As stated above, the three-percent warning might

have been more clearly worded. For example, Article XI-A,

section 4 of the Oregon Constitution, which authorizes a

separate statewide property tax for the purpose of repay-

ing the principal and interest of bonds, provides that “said

tax levy hereby authorized shall be in addition to all other

taxes which may be levied according to law.” Or. Const.

art. XI-A, § 4. But because the three-percent warning,

even as presently worded, does not impose a severe burden

on Caruso’s First Amendment rights, “the State need not

narrowly tailor the means it chooses to promote [its

interests].” See Timmons, 520 U.S. at 365, 117 S.Ct. 1364.

The district court deemed section 280.070(4)(a) insuf-

ficiently tailored in a different respect: specifically, in its

application to all measures proposing the imposition of a

App. 25

local option tax; even those which by themselves cannot

cause property taxes to increase more than three percent.

The district court concluded that the general applicability

of section 280.070(4)(a) rendered it substantially over-

broad and therefore facially invalid. See Broadrick v.

Oklahoma, 413 U.S. 601, 615-16, 93 S.Ct. 2908, 37 L.Ed.2d

830 (1973).

We disagree. If, as the district court ordered, applica-

tion of section 280.070(4)(a) were limited to measures

which themselves could cause property taxes to increase

more than three percent, the statute would be rendered

largely ineffective in increasing the information available

to voters. Under a separate provision of Oregon law, the

ballot titles for measures proposing local option taxes must

declare the “dollar rate per thousand dollars assessed

value.” Or.Rev.Stat. § 280.060(1)(b). Voters can thus

readily identify ballot measures that themselves may

cause property taxes to increase more than three percent.

What voters are less likely to readily identify are those

ballot measures that propose lower dollar rates, but which,

if approved, will be levied outside the three-percent limit

imposed by the Oregon Constitution. See Or. Const. art.

XI, § 11(4)(a\A). In our view, then, the general applicabil-

ity of section 280.070(4)(a) does not burden substantially

more speech than is justified by the State’s important

interests.

In sum, we conclude that the First Amendment

burden imposed by section 280.070(4)(a) is not severe and

further that that burden is justified by the State’s impor-

tant interest in encouraging informed and educated

voting. We accordingly conclude that section 280.070(4)(a)

does not violate the First Amendment, either as applied to

Measure 36-55 or on its face.

App. 26

D. Fourteenth Amendment

In addition to his First Amendment claims, Caruso

asserts a Fourteenth Amendment claim, arguing that

required inclusion of the “false and misleading” three-

percent warning violates his rights to substantive due

process. We review the claim de novo. See Mont. Chamber

of Commerce v. Argenbright, 226 F.3d 1049, 1054 (9th

Cir.2000).

“Several appellate courts, including our own, have

held that an election is a denial of substantive due process

if it is conducted in a manner that is fundamentally

unfair.” Bennett v. Yoshina, 140 F.3d 1218, 1226 (9th

Cir.1998). To prevail on his substantive due process claim,

then, Caruso must demonstrate that “‘the state’s choice of

ballot language so upset|s] the evenhandedness of the

[election] that it workls] a ‘patent and fundamental

unfairness’ on the voters.’” Nat Audubon Soc’y, Inc. v.

Davis, 307 F.3d 835, 858 (9th Cir.2002) (quoting Burton v.

Georgia, 953 F.2d 1266, 1269 (11th Cir.1992)). The parties

agree that such an exceptional case would arise if, for

example, the ballot language were so misleading as to

deceive voters about the subject of the measure at issue.

See id.

Applying this standard in National Audubon Society,

we rejected a challenge to ballot material which allegedly

misled voters by understating the scope of proposed

changes to California law. Jd. at 859. The district court

there concluded that an argument favoring passage of the

proposition was not “materially misleading” in part be-

cause it “was not completely inaccurate.” Jd. at 858.

Rather, althougk. the argument allegedly understated the

App. 27

scope of the broader of two proposed bans, it accurately

described the narrower one. Id.

In addition, “other materials accompanying the ballot”

included arguments against the proposed changes. Id. at

858-59. We agreed that under those circumstances, “the

ballot materiai did not rise to the level of a substantive

due process violation.” Jd. at 859.

Like the material challenged in National Audubon

Society, the three-percent warning is “not completely

inaccurate.” To be sure, the three-percent warning might

have been read as a misleading suggestion that Measure

36-55 by itself might cause property taxes to increase more

than three percent. But, as described above, the warning

might also have been read, in context, as an accurate

reminder that the proposed local option tax would not be

subject to the three-percent limit imposed by the Oregon

Constitution. Moreover, although an average voter might

have read the three-percent warning as Caruso does “‘fi]f

{he} had to decide what he was voting on from the [warn-

ing] alone, .... he did not have to decide from this sum-

mary.” Burton, 953 F.2d at 1271 (quoting Kohler uv.

Tugwell, 292 F.Supp. 978, 981 (E.D.La.1968)). Instead, he

could look to “other materials” — including the text of Meas-

ure 36-55 and the remainder of the ballot title as it appeared

in the voters’ pamphlet and, indeed, on the ballot itself, see

Or.Rev.Stat. §§ 250.235, 251.315(1g), 280.060(1)(b) — which

indicated the actual increase proposed by Measure 36-55,

disclosing both the dollar rate of the proposed tax and the

estimated levy for a house with an assessed value of

$150,000. See Nat'l Audubon Soc’y, 307 F.3d at 858-59. We

are thus unpersuaded that the State’s choice of ballot

language rose to the level of a due process violation under

National Audubon Society.

App. 28

The fact that the three-percent warning would have

appeared in the baliot title for Measure 36-55 rather than

in an “avowedly partisan portion of the materials” does not

change our conclusion. Compare Natl Audubon Soc’y, 307

F.3d at 858 (internal quotation marks omitted). Because

the three-percent warning could have been interpreted

accurately, and because “other materials” would have

enforced this interpretation, we cannot say that including

the three-percent warning in the ballot title would have

“infected” the entire election with “patent and fundamen-

tal unfairness.” Burton, 953 F.2d at 1271 (internal quota-

tion marks omitted).

Ill. CONCLUSION

For the above reasons, we conclude that Or.Rev.Stat.

§ 280.070(4)(a) does not violate Caruso’s First Amendment

or Fourteenth Amendment rights. Accordingly, we reverse

the contrary determinations of the district court and

vacate the injunction permanently limiting the enforce-

ment of section 280.070(4)(a).

JUDGMENT REVERSED; INJUNCTION VA-

CATED.

App. 29

Not Reported in F.Supp.2d

United States District Court, D. Oregon.

Michael CARUSO Plaintiff,

v.

YAMHILL COUNTY, by and through

its County Commission Defendants,

THE STATE of Oregon, Intervenor.

No. Civ. 03-1731-HA.

filed Dec. 12, 2003.

Jan. 14, 2004.

terminated Jan. 28, 2004.

last filing Sept. 1, 2004.

Stephen K. Bushong, Trial Division, Oregon Depart-

ment of Justice, Salem, OR, Attorney to be Noticed, for

State of Oregon, (Intervenor Defendant).

John M. Gray, Jr., Office of County Counsel, Yamhill

County Courthouse, McMinnville, OR, Lead Attorney,

Attorney to be Noticed, for Yamhill County, (Defendant).

Daniel W. Meek, Portland, OR, Lead Attorney, Attor-

ney to be Noticed, for Michael Caruso, | Plaintiff).

Richard D. Wasserman, Department of Justice,

Appellate Division, Salem, OR, Lead Attorney, Attorney to

be Noticed, for State of Oregon, (Intervenor Defendant).

Linda K. Williams, Linda K. Williams, PC, Portland,

OR, Lead Attorney, Attorney to be Noticed, for Michael

Caruso, (Plaintiff).

Linda K. Williams, Portland, Oregon, Daniel W. Meek,

Portland, Oregon, for plaintiff.

John M. Gray, Yamhill County Legal Counsel,

McMinnville, Oregon, for defendant Yamhill County.

App. 30

Hardy Myers, Stephen K. Bushong, Oregon Depart-

ment of Justice, Salem, Oregon, for intervenor State of

Oregon.

OPINION and ORDER

HAGGERTY, Chief J.

Before the court is plaintiff’s Motion for Preliminary

and Permanent Injunction. The court heard oral argument

on January 13, 2004. For the following reasons, plaintiff’s

Motion for Preliminary and Permanent Injunction is

granted.

The parties do not dispute that the factual back-

ground and constitutional analysis involved here are

nearly identical to those involved in Horton v. Multnomah

County, CV 03-1257-HA. Given this identity of issues, the

court incorporates the reasoning set forth in its October

17, 2003, Opinion and Order (hereinafter “Horton”), in

which O.R.S. § 280.070(4) was held unconstitutional, both

as applied to the challenged ballot measure title and as

promulgated. The following background and analysis

supplement the court’s earlier ruling and explain the

minor differences between Horton and the case at bar.

BACKGROUND

This action involves Yamhill County Ballot Measure

36-55, which is scheduled to appear on the March 9, 2004,

ballot. On November 26, 2003, the Yamhill County Com-

mission adopted the title of Measure 36-55, which states

that the Measure authorizes the imposition of “a special

levy on property within the district. Funds raised from the

levy would be used to pay for an engineer’s report and a

App. 31

later election to issue revenue bonds, if held.” The funds

for the engineer’s report would be generated from a “one-

time levy” of “$.003 per $1,000 assessed valuation” of

property. The title of Measure 36-55 explains, “The levy for

a house with an assessed value of $150,000 would be about

45 cents.” However, the title also states, “This measure

may cause property taxes to increase more than three

percent.” This latter statement (“the three percent warn-

ing”) is the subject of the current constitutional challenge

Because Measure 36-55 authorizes a one-year local

option tax, it is subject to Oregon law requiring any

measure authorizing the imposition of a local option tax,

no matter how small, to include the three percent warn-

ing. O.R.S. § 280.070(4). Thus, even if a measure author-

izes a tax that would raise property taxes by a margin far

less than one percent, the statute mandates the inclusion

of three percent warning in the title.

Plaintiff contends correctly that the three percent

warning is inaccurate in the context of Measure 36-55. For

example, the title notes that a house with an assessed

value of $150,000 would incur a one-time obligation of an

additional 45 cents in taxes. That statement is factually

correct. However, the three percent warning leads voters

to believe that their property taxes might increase more

than three percent if Measure 36-55 passed. For a house

valued at $150,000, three percent of the assessed value is

$4,500. Read in this manner, the three percent warning

overstates the potential effect of Measure 36-55 by a factor

of 10,000 (45 cents is one ten-thousandth of $4,500).

The three percent warning also overstates the poten-

tial effect of Measure 36-55 if the warning is read to mean

that Measure 36-55 may increase an owner's current

App. 32

property taxes by three percent. The average property

owner in Yamhill County pays approximately $15.58 per

$1,000 of assessed valuation per year. At that rate, a house

valued at $150,000 would pay $2,337 in property taxes

annually. A three percent increase of that amount is

approximately $70. Under this reading, the three percent

warning overestimates the potential burden a taxpayer

might incur by more than 150 times of the Measure’s

actual impact. Regardless of whether the three percent

warning overstates the potential tax consequences of

Measure 36-55 by a factor of 150 or 10,000, plaintiff

contends correctly that such language is inherently mis-

leading and hinders the conveyance of accurate informa-

tion to voters.

STANDARDS

The court may issue a preliminary injunction under

the traditional test used by the Ninth Circuit. A prelimi-

nary injunction shall be issued if the moving party can

demonstrate “either (1) a likelihood of success on the

merits and the possibility of irreparable injury, or (2) the

existence of serious questions going to the merits and the

balance of hardships tipping in [its] favor.” Gilder v. PGA

Tour, Inc., 936 ¥ 24 417, 422 (9th Cir. 1991) (citing Diamon-

tiney v. Borg, 918 F.2d 793, 795 (9th Cir.1990)). “These two

formulations represent two points on a sliding scale in

which the required degree of irreparable harm increases

as the probability of success decreases.” Hunt v. National

Broadcasting Co., Inc., 872 F.2d 289, 293 (9th Cir.1989)

(quoting United States v. Odessa Union Warehouse Co-op,

833 F.2d 172, 174 (9th Cir. 1987)).

App. 33

As to the second formulation of the test, “serious

questions” are those “questions which cannot be resolved

one way or the other at the hearing on the injunction and

as to which the court perceives a need to preserve the

status quo... .” Republic of the Philippines v. Marcos, 862

F.2d 1355, 1362 (9th Cir.1988). Serious questions are

“substantial, difficult and doubtful” enough to require

more considered investigation. Jd. Such questions need not

show a certainty of success, nor even demonstrate a

probability of success, but rather “must involve a ‘fair

chance of success on the merits.’” Jd. (quoting National

Wildlife Fed’n v. Coston, 773 F.2d 1513, 1517 (9th

Cir.1985)). |

DISCUSSION

A. Jurisdiction and Preclusion

Unhke the procedural posture of Horton, defendants

do not contend that this court lacks jurisdiction to review

the constitutional challenges to the title of Measure 36-55.

Thus, the Rooker-Feldman issue presented in Horton is

absent here. See District of Columbia Court of Appeals v.

Feldman, 460 U.S. 462, 486, 103 S.Ct. 1303, 75 L.Ed.2d

206 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 44

S.Ct. 149, 68 L.Ed. 362 (1923). Additionally, defendants

have asserted no defense related to issue preclusion.

B. First Amendment Challenge

As noted above, the court adopts the reasoning set

forth in Horton and finds that the three percent warning

constitutes false and misleading language in the context of

Measure 36-55. By requiring the title of Measure 36-55 to

contain the three percent warning, O.R.S. § 280.070(4)

App. 34

offends the First Amendment and “impedes the sponsors’

opportunity to disseminate their views to the public.”

Meyer v. Grant, 486 U.S. 414, 419, 108 S.Ct. 1886, 100

L.Ed.2d 425 (1988) (citing with approval Grant v. Meyer,

828 F.2d 1446, 1453-1454 (10th Cir.1987)). Additionally, for

the reasons provided in Horton, the court finds that

plaintiff's right to be free from coerced government-

sponsored speech is violated by O.R.S. § 280.070(4).

Defendants contend that the First Amendment analy-

sis in Horton is erroneous because the three percent

warning is “state speech” and therefore does noi inhibit

plaintiff’s ability to communicate with voters ov impair

plaintiff’s rmght to be free from coerced government-

sponsored speech. The authority cited by defendants on

this point is unpersuasive. Timmons v. Twin City Area

New Party, 520 U.S. 351, 117 S.Ct. 1364, 137 L.Ed.2d 589

(1997), involved a constitutional challenge to Minnesota’s

antifusion law, which prohibited any political candidate

from appearing as the nominee of more than one political

party on a state election ballot. The Supreme Court upheld

the ban, finding that it did not “severely burden [the]

party’s associational rights.” Jd. at 359. Defendants at-

tempt to dramatically broaden this holding, claiming that

Timmons stands for the proposition that citizens have no

First Amendment right to communicate to voters through

the initiative process. To the contrary, the 7immons

opinion upheld the antifusion law because the law only

“slightly [limited] the party’s ability to send a message to

the voters” and because the law still enabled each political

party “to use the ballot to communicate information about

itself and its candidate to the voters, so long as that

candidate [was] not already someone else's candidate.” /d.

at 363. Thus, the Court upheld the fusion ban because it

App. 35

did not unduly interfere with the political parties’ consti-

tutional expression and merely established reasonable

electoral procedures.

Defendants also cite Rosenberger v. Rector and Visi-

tors of University of Virginia, 515 U.S. 819, 115 S.Ct. 2510,

132 L.Ed.2d 700 (1995), in which the Supreme Court

stated that “when the state is the speaker, it is entitled to

make content-based choices.” Jd. at 833. However, this

selective quotation referred to a state educational institu-

tion’s allocation of scarce resources based on academic

priorities. Jd. The case has no bearing on instances of

“state speech” that interferes directly with plaintiff’s core

political activity and ability to communicate to voters.

Defendants contend that plaintiff has no First

Amendment claim when the state as speaker places

untruthful and misleading statements on a ballot title.

This holds true, according to defendants, even when a

“warning” inhibits plaintiff’s own core political speech.

Taken to its logical extension, such an argument would

vbliterate plaintiff's First Amendment right to communi-

cate to voters. For example, a state body that opposes a

particular politician’s candidacy could place patently false

language beside the candidate’s name on the ballot. Based

on defendants’ argument, because the state is the

“speaker” in this example, it would be immunized from the

candid ate’s First Amendment challenge to the state's

inclusion of the label below his or her name.

The First Amendment protects the right of ballot

measure petitioners to communicate to voters. Meyer, 486

U.S. at 420-21. Plaintiff's attempt to explain the tax

consequences of Measure 36-55 to voters is a form of core

political speech, and restrictions on such speecn are

App. 36

subject to exacting scrutiny. Buckley v. American Constitu-

tional Law Found., Inc., 525 U.S. 182, 186-87, 119 S.Ct.

636, 142 L.Ed.2d 599 (1999). For the reasons provided in

Horton, the court finds that the three percent warning

misleads voters to grossly overestimate the tax conse-

quences of the ballot measure to which the warning

attaches. The inclusion of the three percent warning in the

title of Measure 36-55 will inevitably cause voter confusion

and inhibit “the type of interactive communication con-

cerning political change that is appropriately described as

‘core political speech.’” Meyer, 486 U.S. at 420-21.

The “state as speaker” argument does not alter the

analysis when the “state speech” infringes on plaintiff’s

First Amendment rights. The fact that the State of Oregon

authored the three percent warning, which defendant

Yamhill County adopted, dees not change the fact that

plaintiff’s own core political speech is impaired by the

three percent warning. In Buckley v. American Constitu-

tional Law Foundation, 525 U.S. 182, 119 S.Ct. 636, 142

L.Ed.2d 599 (1999), the Supreme Court struck down a

Colorado law requiring petition circulators to wear badges

that read either “VOLUNTEER?” or “PAID” because such a

restriction interfered with the circulators’ ability to com-

municate to voters, thereby infringing on the circulators’

core political speech. Jd. at 200. The “speech” at issue —

badges containing the words “VOLUNTEER” or “PAID” —

originated from the State of Colov.do. Under defendants’

reasoning, because the badges orizinated from the state,

the circulators in Buckley would have no First Amendment

claim. However, in Buckley, the Supreme Court was

concerned primarily with the effect the state-mandated

words had on the plaintiff's own protected activity. The fact

that Colorado was the “speaker” requiring state-generated

App. 37

words —- “VOLUNTEER’” and “PAID” — was immaterial to

the analysis.

Plaintiff is among the chief petitioners who gathered

signatures of registered voters to place Measure 36-55 on

the ballot for the March 9, 2004, election. Plaintiff has

spoken with hundreds of potential voters about Measure

36-55. Many of these voters support passage of Measure

36-55, but express great concern about the large tax

consequences they infer are associated with Measure 36-

55 based on the three percent warning. Plaintiff's ability

to accurately explain the tax consequences associated with

Measure 36-55 to voters is impaired by state-mandated

language that is profoundly misleading. By placing the

“warning” on the ballot itself - a place where voters are

likely to give great weight to the government-authored

statement — defendants would eliminate any chance for

plaintiff to rebut or clarify the issue to voters.

Unlike Timmons, where, despite the antifusion law,

the party’s ability to communicate to voters was limited

only “slightly” and where each political party was still

“able to use the ballot to communicate information about

itself and its candidate to the voters,” plaintiff cannot use

the baliot to accurately convey information about Measure

36-55 to voters. Timmons, 520 U .S. at 359. By placing the

false and misleading three percent warning on the title of

Measure 36-55, the State of Oregon has “impedeld] the

sponsors’ opportunity to dissemjnate their views to the

public.” Meyer, 486 U.S. at 419. As such, O.R.S. § 280.070(4)

is unconstitutional

For the reasons provided in Horton, the court finds

that enforcement of O.R.S. § 280.070/4), requiring inclu-

sion of the three percent warning in the title of Measure

App. 38

36-55, is subject to exacting scrutiny. Buckley, 525 U.S. at

192. As in Horton, defendants have failed to meet their

burden. Accordingly, the court finds that O-R.S. § 280.070(4)

is unconstitutional as applied to the title of Measure 36-55.

Further, the statute is unconstitutionally overbroad

and is therefore invalid on its face. The overbreadth

doctrine is an exception to the normal standards governing

facial challenges to state statutes. See Members of City

Council of Los Angeles v. Taxpayers for Vincent, 466 U.S.

789, 798-99, 104 S.Ct. 2118, 80 L.Ed.2d 772 (1984). A

statute is unconstitutionally overbroad if it infringes on a

substantial amount of protected activity “judged in rela-

tion to the statute’s plainly legitimate sweep.” Broadrick v.

Oklahoma, 413 U.S. 601, 615, 93 S.Ct. 2908, 37 L.Ed.2d

830 (1973); see also New York v. Ferber, 458 U.S. 747, 772,

102 S.Ct. 3348, 73 L.Ed.2d 1113 (1982). Such a finding

prohibits all enforcement of the law “until and unless a

limiting construction or partial invalidation so narrows it

as to remove the seeming threat or deterrence to constitu-

tionally protected expression.” Broadrick, 413 U.S. at 613.

The court finds that the three percent warning re-

quired by O.R.S. § 280.070(4) is unconstitutionally over-

broad. Although O.R.S. § 280.070(4) evinces the legitimate

goal of informing voters of the tax consequences of ballot

initiatives, the warning is required in the titles of all

“measure|s| authorizing the imposition of local option

taxes,” regardless of whether the measures have any

chance of “causing” a property tax increase of more than

three percent. O.R.S. § 280.070(4). Plaintiff's speech, as

well as the speech of future ballot measure proponents, is

chilled when the three percent warning is included in the

title of a ballot measure that has no chance of “causing”

property taxes to increase more than three percent. Other

App. 39

circulators are less likely to obtain signatures for future

ballot initiatives involving local option taxes and to engage

in the political discourse accompanying that activity

because they would face the hurdle of convincing voters of

the false nature of the state-mandated “warning.” Conse-

quently, O.R.S. § 280.070(4) “discourages participation in

the petition circulation process... .” Buckley, 525 U.S. at

200.

In compliance with Broadrick’s instructions regarding

limiting constructions and partial invalidation, Horton

invalidated O.R.S. § 280.070(4) only for those ballot

measures that cannot by themselves increase property

taxes more than three percent. Certainly, other solutions

would remedy the constitutional infirmity as well. For

example, the warning itself could be altered to explain

that the local option tax, which by itself cannot raise

property taxes more than three percent, could raise

property taxes more than three percent in conjunction

with a three percent increase in assessed property value.

However, the court declines to rewrite the three percent

warning to include such tautology; if the three percent

warning is to be rewritten, the task is best left to the

legislature. As explained in Horton, because O.R.S

§ 280.070(4) does not limit the applicability of the three

percent warning to only those measures that may “cause

property taxes to increase more than three percent,” the

statute is overbroad and, accordingly, unconstitutional.

C. Due Process

The court adopts the due process analysis expressed

in Horton, which struck down O.R.S. § 280.070(4), as

applied to the challenged measure. The same conclusion is

App. 40

reached by applying O.R.S. § ?86.070(4) to Measure 36-55.

The inherently misleading nature of the three percent

warning “so upset|s] the evenhandedness of the referen-

dum that it work[s] a patent and fundamental unfairness

on the voters.” National Audubon Society, Inc. v. Davis,

307 F.3d 835, 858 (9th Cir.2002). Defendants contend

incorrectly that Horton did not address the question of

whether the three percent warning “is so misleading that

voters cannot recognize the subject of the amendment at

issue.” State of Oregon’s Memorandum in Opposition to

Motion for a Preliminary Injunction at 7 (citing National

Audubon Society, 307 F.3d at 858). Defendants conceded at

the January 13, 2004, oral argument, “This is a tough

statute to uphold even under that test.” In fact, here, as in

Horton, the court finds that even under the strict reading

of National Audubon Society, the three percent warning

would so mislead voters that they would be unable to

decipher the subject of Measure 36-55. As stated, a Yam-

hill County voter who owns property valued at $150,000

will read the title of Measure 36-55 and believe that his or

her property taxes might increase $70 or $4,500, when in

fact the tax burden authorized by Measure 36-55 is no

more than 45 cents. The voter is misled to believe that the

subject matter of Measure 36-55 involves a potentially

significant tax increase. The court finds that voters will be

unable to recognize the subject of Measure 36-55 because

voters will be misled by a three percent warning that

overstates the potential tax consequences of Measure 36-

55 by a factor of at least 150 and at most 10,000. Accord-

ingly, plaintiff has shown a substantial likelihood of

success on the merits on his due process claim.

App. 41

D. Relief

Plaintiff has met his burden of showing success on the

merits and the likelihood of irreparable harm. The court

holds as a matter of law that O.R.S. § 280.070(4) is uncon-

stitutional as applied to Measure 36-55 and as promul-

gated. The irreparable harm of voter confusion and the

loss of a fair election caused by the inclusion of the three

percent warning in the title of Measure 36-55 cannot be

corrected through legal remedies. Accordingly, injunctive

relief is proper.

When crafting remedies in cases involving elections,

the Supreme Court has stated, “In awarding or withhold-

ing immediate relief, a court ... should act and rely upon

general equitable principles.” Reynolds v. Sims, 377 U.S.

533, 585, 84 S.Ct. 1362, 12 L.Ed.2d 506 (1964). The court

should consider the “timing of relief,” and whether the

relief would impose “unreasonable or embarrassing de-

mands on a State in adjusting to the requirements of the

court’s decree.” /d.

As noted above, the court finds that by requiring the

inclusion of the three percent warning in the titles of

ballot measures that have no possibility of “causing” an

increase in property taxes of more than three percent,

O.R.S. § 280.070(4) is overly broad. Because plaintiff has

succeeded on his facial challenge, defendants are perma-

nently enjoined from enforcing that provision for all ballot

measures that by themselves cannot cause an increase in

property taxes of more than three percent. The State of

Oregon is ordered to notify all county clerks of the invalid-

ity of O.R.S. § 280.070/4) in instances where ballot meas-

ures cannot by themselves cause property taxes to increase

enore than three percent.

App. 42

Given that plaintiff has succeeded on the merits of the

applied challenge to O.R.S. § 280.07)(4), the inadequacy of

legal remedies, and the likelihood of irreparable harm, the

court enjoins defendants from including the three percent

warning in the voter pamphlet and ballot title of Measure

36-55 under O.R.S. § 280.070(4). The burden placed on

defendants by this injunctive relief is slight, given that the

ballots for the March 9, 2004, Yamhill County election

have not been mailed. The effort required to remove the

three percent warning is insignificant as weighed against

the extreme voter confusion that would be caused by

inclusion of the warning in the title of Measure 36-55.

E. Consolidation

By the parties’ stipulation at oral argument, the

preliminary injunction hearing is consolidated with the

trial on the merits. Fed.R.Civ.P. 65(a\(2); University of

Texas v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68

L.Ed.2d 175 (1981).

The parties are ordered to submit a joint proposed

final judgment consistent with this Opinion and Order

within 10 days. If the parties are unable to agree on the

language of the preposed final judgment, they shall submit

their own versions and explain the differences between the

proposals.

IT IS SO ORDERED

App. 43

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

JOAN HORTON and

NANCY NEWELL

Plaintiffs, Civil No. 03-1257-HA

v. OPINION and ORDER

MULTNOMAH COUNTY,

OREGON and

JOHN KAUFFMAN,

Defendants,

THE STATE OF OREGON

and MARA WOLOSHIN,

Intervenors.

Linda K. Williams

10266 S.W. Lancaster Road

Portland, Oregon 97219

Attorney for plaintiff Horton

Daniel W. Meek

10949 S.W. 4th Avenue

Portland, Oregon 97219

Attorney for plaintiff Newell

Angnes Sowle

John S. Thomas

Multnomah County Attorney

501 S.E. Hawthorne Blvd,

Suite 500

Portland, Oregon 97214

Attorneys for dzfendants

App. 44

Charles F. Hinkle

Stoel Rives

900 S.W. Fifth Avenue,

Suite 2600

Portland, Oregon 97204

Attorney for intervenor Woloshin

HAGGERTY, Chief Judge:

Before the court is plaintiffs’ Motion for Preliminary

Injunction. The court heard oral argument on the Motion

today, October 17, 2003. For the following reasons, plain-

tiffs’ Motion for Preliminary Injunction is granted in part.

BACKGROUND

This action involves Multnomah County Ballot Meas-

ure 26-52, which appears on the November 4, 2003, ballot.

On September 4, 2003, Judge Janice Wilson of the Mult-

nomah County Circuit Court certified the title of Measure

26-52, which states that the Measure would “finance an

engineer’s report on revenue bonds for acquisition or

construction of the utility system and the cost of an elec-

tion to authorize revenue bonds, if held.” The funds for the

engineer’s report would be generated from a “one-year

special levy of $.003 per $1000 assessed” valuation of

property. The title certified by Judge Wilson explains that

“The levy for a house with assessed value of $150,000

would be about 45 cents.” However, the title also states,

“This measure may cause property taxes to increase more

than three percent.” This latter statement (“the three

percent warning”) is the subject of the current constitu-

tional challenge.

Because Measure 26-52 authorizes a one-year loca!

option tax, it is subject to Oregon law requiring any

App. 45

measure authorizing the imposition of a local option tax,

no matter how small, to include the three percent warn-

ing. O.R.S. § 280.070(4). Thus, even if a measure author-

izes a tax that will raise property taxes by far less than

one percent, the statute mandates that the three percent

warning be added to the title.

Plaintiffs correctly contend that the three percent

warning is inaccurate in the context of Measure 26-52. For

example, the title notes that a house with an assessed

value of $150,000 would incur a one-time obligation of an

additional 45 cents in taxes. Thet statement is factually

correct. However, the three percent warning leads voters

to believe that their property taxes might increase more

than three percent if Measure 26-52 passed. For a house

valued at $150,000, three percent of the assessed value is

$4,500. Read in this manner, the three percent warning

overstates the potential effect of Measure 26-52 by a factor

of 10,000 (45 cents is one ten-thousandth of $4,500).

The three percent warning also overstates the poten-

tial effect of Measure 26-52 if the warning is read to mean

that Measure 26-52 may increase an owner’s current

property taxes by three percent. The average property

owner in Multnomah County pays $21 per $1,000 of

assessed valuation per year. At that rate, a house valued

at $150,000 would pay $3,150 in property taxes annually.

A three percent increase of that amount is $94.50. In this

example, although Measure 26-52 would cause only an

increase in property taxes of 45 cents for a house valued at

$150,000, the three percent warning misleads voters to

believe that the measure may cause taxes to increase more

than $94.50. Under this reading, the three percent warn-

ing overestimates the potential burden a taxpayer might

incur by more than 200 times of the Measure’s potential

App. 46

impact. Regardless of whether the three percent warning

overstates the potential tax consequences of Measure 26-

52 by a factor of 200 or 10,000, plaintiffs correctly contend

that such language is inherently misleading and hinders

the conveyance of accurate information to voters.

STANDARDS

The court may issue a preliminary injunction under

the traditional test used by the Ninth Circuit. A prelimi-

nary injunction shall be issued if the moving party can

demonstrate “either (1) a likelihood of success on the

merits and the possibility of irreparable injury, or (2) the

existence of serious questions going to the merits and the

balance of hardships tipping in their favor.” Gilder v. PGA

Tour, Inc., 936 F.2d 417, 422 (9th Cir. 1991) (citing Dia-

montiney v. Borg, 918 F.2d 793, 795 (9th Cir.1990)). “These

two formulations represent two points on a sliding scale in

which the required degree of irreparable harm increases

as the probability of success decreases.” Hunt v. National

Broadcasting Co., Inc., 872 F.2d 289, 293 (9th Cir. 1989)

(quoting United States v. Odessa Union Warehouse Co-op,

833 F. 2d 172, 174 (9th Cir. 1987)).

As to the second formulation of the test, “serious

questions” are those “questions which cannot be resolved

one way or the other at the hearing on the injunction and

as to which the court perceives a need to preserve the

status quo... .” Republic of the Philippines v. Marcos, 862

F.2d 1355, 1362 (9th Cir. 1988). Serious questions are

“substantial, difficult and doubtful” enough to require

more considered investigation. Jd. Such questions need not

show a certainty of success, nor even demonstrate a

probability of success, but rather “must involve a ‘fair

App. 47

chance of success on the merits.” Jd. (quoting National

Wildlife Fed’n v. Coston, 773 F.2d 1513, 1517 (9th Cir.

1985)).

“There is one additional factor we must weigh. In

cases such as the one before us in which a party seeks

mandatory preliminary relief ... courts should be ex-

tremely cautious about issuing a preliminary injunction.”

Martin v. Int'l Olympic Comm.,740 F.2d 670, 675 (9th Cir.

1984) (citing Anderson v. United States, 612 F.2d 1112,

1114 (9th Cir.1980)).

DISCUSSION

A. Jurisdiction and Preclusior

A federal district court lacks jurisdiction to review “a

state-court judgment in a particular case.” Worldwide

Church of God v. McNair, 805 F.2d 888, 891 (9th Cir. 1986)

(citing District of Columbia Court of Appeals v. Feldman,

460 U.S. 462, 486 (1983)). Thus, dismissal is required “[ilf

the constitutional claims presented to a United States

district court are inextricably intertwined with the state

court's denial in a judicial proceeding... .” Feldman, 460

U.S. at 482 n.16.

On October 3, 2003, this court issued an Order finding

that it had jurisdiction to consider plaintiffs’ constitutional

challenges. Subsequent to that ruling, intervenor Woloshin

submitted the full transcript of the state court ballot

certification hearing before Judge Wilson. After a careful

review of the state court hearing, this court finds no

reason to deviate from its October 3, 2003, Crder and finds

that consideration of the constitutional claims here is not

App. 48

“inextricably intertwined” with the state court ballot title

certification.

Judge Wilson “dismissled] the [constitutional] chal-

lenges as improperly joined with the ballot title challenge.”

Transcript of September 2, 2003, hearing at 37. Judge

Wilson specifically held, “I’m not dismissing this with

prejudice, it is without prejudice.” Jd. at 38. In the course

of briefing following the October 3, 2003, Order, defen-

dants stated, “[A]s the record shows, Judge Wilson never

reached the [constitutional] question.” Defendants’ Sup-

plemental Memorandum in Response to Plaintiffs’ Motion

~for Preliminary Injunction at 4 n.2. Accordingly, an

evaluation of plaintiffs’ constitutional claims cannot be

“inextricably intertwined” with the state court’s determi-

nations.

As explained below, the findings of this court do not

conflict with the state court actions, and plaintiffs are not

precluded from bringing the constitutional claims here.

Judge Wilson announced that her findings were limited to

“a special statutory procedure.” Transcript of September 2,

2003, hearing at 36-37. That procedure requires the

certifying court to determine whether the proposed ballot

measure title is “insufficient, not concise or unfair.” O.R.S.

§ 250.195. In concluding that the language of the title was

“poorly drafted” but not “grossly misleading,” Judge

Wilson performed no more than what the “special statu-

tory procedure” requires of certifying courts. Transcript of

September 2, 2003, hearing at 100. This court’s function is

different; the task before this court is to determine

whether inclusion of the three percent warning in the title

of Measure 26-52 violates plaintiffs’ rights secured under

the First and Fourteenth Amendments of the United

States Constitution.

App. 49

B. First Amendment Right to Communicate

to Voters

The First Amendment of the United States Constitu-

tion, as applied to the states through the Fourteenth

Amendment, prohibits state governments from making

laws that abridge “the right of people peaceably to assem-

ble, and to petition the Government for a redress of griev-

ances.” U.S. Const amend I.

State action that constrains the political expression of

the citizenry is subject to “exacting scrutiny.” Buckley v.

Valeo, 424 U.S. 1, 16-17 (1976). Plaintiffs contend that the

three percent warning violates their First Amendment

right to communicate with voters. In Buckley v. American

Const. Law Found., 525 U.S. 182 (1999), the Supreme

Court struck down a Colorado statute requiring petition

circulators to wear badges that read either “VOLUN-

TEER” or “PAID.” The Court recognized that it must be

especially vigilant in protecting “core political speech,” and

that the First Amendment is “at its zenith” in protecting

such speech. /d. at 183.

In Meyer v. Grant, 486 U.S. 414 (1988), the Supreme

Court struck down a state statute banning the payment of

petition circulators because the law “necessarily reduced]

the quality of expression” of political actors. Jd. at 419

(citing Buckley, 424 U.S. at 19).

Defendants argue that the three percent warning is

not inaccurate. The Oregon Constitution was amended by

voters in 1997 to state, “For tax years beginning after July

1, 1997, the property’s maximum assessed value shall not

increase by more than three percent from the previous tax

year.” Oregon Const., Art. XI, § 11(1\(b). However, the

three percent limit may be exceeded if taxpayers approve a

App. 50

local option tax. As discussed above, Measure 26-52

authorizes the imposition of a local option tax of 45 cents

for properties valued at $150,000. Conceivably, defendants

argue, Multnomah County could raise the assessed valua-

tion of homes by exactly three percent, as permitted by the

Oregon Constitution, and the small tax increase author-

ized by Measure 26-52 would then “raise property taxes

more than three percent.” This interpretation of the three

percent warning is rejected.

As dictated by the cannon of statutory interpretation,

the language of ballot measures should be given their

plain meaning. United States v. Ventre, 338 F.3d 1047 (9th

Cir. 2003) (citing United States v. Gonzales, 520 U.S. 1

(1997)). The proposed Ballot Measure title states, “This

measure may cause property taxes to increase more than

three percent.”

O.R.S. § 280.070(4)(a); Multnomah County Ballot Measure

26-52. There is only one reasonable interpretation of this

language. A voter deciding how to vote on Measure 26-52

would read the above phrase and be led to believe that

Measure 26-52 by itself may “cause property taxes to

increase more than three percent.” The language of the

title plainly implies that the Measure, and the Measure

alone, may “cause” the increase. As such, the proposed

title misleads voters to believe that Measure 26-52 may

cause taxes to increase at a level far beyond the Measure’s

possible reach.

Like a statute that impairs the political speech of

petition circulators, Oregon’s law requiring the placement

of false language directly within the title of Measure 26-52

“impedes the sponsors’ opportunity to disseminate their

views to the public.” Meyer, 486 U.S. at 419 (citing with

App. 51

approval Grant v. Meyer, 828 F.2d 1446, 1453-1454 (10th

Cir. 1987)). Plaintiffs are among a group of citizens who

gathered nearly 10,000 signatures of registered voters to

place Measure 26-52 on the ballot for the November 4,

2002, election. Pla.utiffs’ ability to accurately expiain the

tax consequences associated with Measure 26-52 to voters

has been severel, impaired by state-mandated language

that is profoundly misleading.

As the Supreme Court has warned, “(T]he First

Amendment requires us to be vigilant in making those

judgments, to guard against undue hindrances to political

conversations and the exchange of ideas.” Buckley, 525

U.S. at 192 (citing Meyer, 486 U.S. at 421). Because the

state-mandated three percent warning interferes with

plaintiffs’ core political speech, it will survive constitu-

tional scrutiny only if the language is narrowly tailored to

serve a compelling government interest. Buckley, 525 U:S.

at 192. Defendants offer no acceptable justification for

presenting the distortive three percent warning in the title

of Measure 26-52. The use of the three percent warning in

this context does not survive strict scrutiny. Plaintiffs have

shown a substantial likelihood of success on the merits

because their First Amendinent speech: rights will be

harmed by the inclusion of the three percent warning in

the title of Measure 26-52.

C. First Amendment Right to be Free of Co-

erced Speech

The First Amendment prohibits the government from

forcing citizens to subscribe to or to be associated with state-

sponsored messages. In Wooley v. Maynard, 430 U.S. 705

(1977), the Supreme Court struck down a New Hampshire

App. 52

law requiring motorists to carry the message “Live Free or

Die” on their licence places. The Court found that re-

quirement interfered with citizens’ “individual freedom of

mind.” Jd. at 714.

Here, the State of Oregon requires the sponsors of

Measure 26-52 to include the three percent warning in the

ballot measure title. Because of its inaccuracy in this

context, the coerced content of the three percent warning

interferes with the “individual freedom of mind” of voters

to make informed voting decisions without state interfer-

ence. Likewise, as the sponsors of Measure 26-52, plain-

tiffs will be associated with the false warning, thereby

crediting to them a state-sponsored message to which they

do not subscribe. As such, their First Amendment right to

be free of coerced government-sponsored speech is violated

by the inclusion of the three percent warning in the title of

Measure 26-52.

As discussed above, defendants have offered no

rational basis for the inclusion of three percent warning in

the title of Measure 26-52. Accordingly, plaintiffs have

shown a substantial likelihood of success on the merits on

their First Amendment claims.

D. Facial Challenge

Although generally disfavoring facial statutory chal-

lenges, the Supreme Court requires lower courts to strike

down overly broad state restrictions that chil! protected

political expression. Broadrick v. Oaklahoma, 413 U.S.

601, 615-16 (1973). Content-neutral speech regulations are

subject to intermediate scrutiny and will be upheld if

defendants can show that the restriction: (1) advances an

important government interest and (2) does not. burden

App. 53

substantially more speech than necessary to further that

interest. Turner Broad. Sys., Inc. v. F-C.C., 512 U.S. 622,

662 (1994).

In this case, the Oregon legislature has attempted to

advance an important government interest through O.R.S.

§ 280.070(4). The statute was designed to inform voters of

the potential tax consequences associated with the pas-

sage of local option taxes. However, O.R.S. § 280.070(4)

burdens substantially more speech than is necessary to

achieve that end. The statute applies to all “measure|s]

authorizing the imposition of local option taxes,” regard-

less of whether the measures have any chance of “causing”

a property tax increase of more than three percent. O.R.S.

§ 280.070(4). The speech of ballot measure proponents is

severely chilled when the three percent warning is in-

cluded in the title of a ballot measure that has no chance

of “causing” property taxes to increase more than three

percent. Because O.R.S. § 280.070(4) does not limit the

applicability of the three percent warning to only those

measures that may “cause property taxes to increase more

than three percent,” the statute is overbroad and, accord-

ingly, unconstitutional.

E. Due Process

The Due Process Clause of the Fourteenth Amend-

ment requires fundamental fairness in elections. In the

context of reviewing past elections, the Ninth Circuit has

adopted a strict standard for evaluating due process

challenges to language included in ballot measures: “It

must be demonstrated that the State’s choice of ballot

language so upset the evenhandedness of the referendum

, that it worked a patent and fundamental unfairness on

App. 54

the voters.” National Audubon Society, Inc. v. Davis, 307

F.3d 835, 858 (9th Cir. 2002) (citing Burton v. State of

Georgia, 953 F.2d 1266, 1279 (11th Cir. 1992)).

Offering an incomplete reading of National Audubon,

defendants contend that due process is offended only if the

ballot language “is so misleading that voters cannot

recognize the subject of the amendment at issue.” Jd.

However, National Audubon followed an Eleventh Circuit

decision, Burton, 953 F.2d at 1579, which was limited to

“the context of a case such as this one” involving an

attempt to overturn the results of a previously held elec-

tion. Here, no election has been held, and no election

results need to be overturned. The more fitting test is

whether inclusion of the three percent warning in the title

of Measure 26-52 “so upset[s] the evenhandedness of the

referendum that it work[s] a patent and fundamental

unfairness on the voters.” Jd. Voters will suffer such an

unfairness because the title of Measure 26-52 contains a

“warning” that drastically overstates the potential tax

consequence of the Measure.

Even if the constitution required extreme voter

confusion, as was required in the particular circumstances

presented in National Audubon, such a case is presented

here where voters will be completely misled by a three

percent warning that overstates the potential tax conse-

quences of Measure 26-52 by a factor of at least 200 and at

most 10,900. The subject matter of a ballot measure that is

described as potentially raising voters’ taxes by a factor

200 times greater than its potential effect is obscured to

voters who expect the government to refrain from printing

misleading language on ballots within inches from the

space where they will mark “yes” or “no.” Fundamental

fairness in elections — a bedrock of our democracy — would

App. 55

be eroded if the state were allowed to require patently

false “warnings” to appear on ballot measure titles. The

court finds that plaintiffs have shown a substantial

likelihood of success on the merits on their due process

claim.

F. Relief

Plaintiffs have met their burden of showing probable

success on the merits and the possibility of irreparable

harm. The court holds, as a matter of law, that O.R.S.

§ 280.070(4) is unconstitutional as applied to Measure 26-

52 and as promulgated. The irreparable harm of voter

confusion and the loss of a fair election caused by the

inclusion of the three percent warning in the title of

Measure 26-52 cannot be corrected through legal reme-

dies. Accordingly, injunctive relief is proper.

Unlike the recent California recall election, this is not

a situation in which plaintiffs seek injunctive relief cancel-

ling a scheduled election. Southwest Voter Registration

Educ. Project v. Shelley, 344 F.3d 914 (9th Cir. 2003). In

that case, the Ninth Circuit found that “interference with

an election after voting has begun is unprecedented.” /d.

at 919. However, the “interference” the court references in

Southwest Voter Registration Education Project is defined

as the cancellation of an impending election. The plaintiffs

in that case sought to enjoin the October 7, 2003, guberna-

torial election “.-ause of alleged discrepancies in vote

calculations «ued by punch-card ballots. The court

noted:

{[E]Jnormous resources already {have been] in-

vested in reliance on the election’s proceeding on

the announced date. Time and money have been

App. 56

spent to prepare voter information pamphlets

and sample ballots, mail absentee ballots, and

hire and train poll workers. ... Candidates have

. calibrated their message to the political and

social environment of the time. They have raised

funds under current campaign contribution laws

and expended them in reliance on the election’s

taking place on October 7.

Id. (emphasis added). Unlike the plaintiffs in Southwest

Voter Registration Education Project, plaintiffs here do not

seek to postpone the regularly scheduled election set for

November 4, 2003. The time and money spent in prepara-

tion of the election will not go to waste because the elec-

tion will be held on November 4, 2003, as scheduied.

When crafting remedies in cases involving elections,

the Supreme Court has stated, “In awarding or withhold-

ing immediate relief, a court ... sheuld act and rely upon

general equitable principles.” Reynolds v. Sims, 377 U.S.

533, 585 (1964). The court should consider the “timing of

relief,” and v hether the relief would impose “unreasonable

or embarrassing demands on a State in adjusting to the

requirements of the court’s decree.” Jd.

The court takes notice of the fact that prie to the 8

a.m. hearing held today, defendants mailed 344,00 ballots

to Multnomah County voters. This number constitutes

over ninety-nine percent of the ballots for the election. The

ballots contain the constitutionally deficient three percent

warning. The court also takes note that at a hearing held

on October 15, 2003, defendants informed the court that

the mailing was not required until Tuesday, October 21,

2003. Given the unusual timing of defendants’ actions

under these circumstances, voters will begin receiving

their ballots on October 18, 2003. However, there are still

App. 57

opportunities to inform voters of the constitutional infir-

mity contained in the title of Measure 26-52.

The court finds that by requiring the inclusion of the

three percent warning in the titles of ballot measures that

have no possibility of “causing” an increase in property

taxes of more than three percent, O.R.S. § 280.070(4) is

overly broad. Because plaintiffs have succeeded on their

facial challenge, defendants are permanently enjoined

from enforcing that provision.

Moreover, the court holds that equity requires that

the voters of Multnomah County be informed of the

misleading nature of the three percent warning contained

in the title of Measure 26-52. — the following

injunctive relief is ordered:

Beginning Sunday, October 19, 2003, through Novem-

ber 4, 2003, defendants shall place notices in the full-run

editions of the Oregonian newspaper. The size of the

notices shall be ap}:roximately five column inches. The

notices shall run in each of the following sections of the

newspaper: the “A” section, metro, business, sports, and

living. The start date of the notices as well as their place-

ment shall conform to the publisher’s restrictions. If the ©

publisher’s restrictions prevent complete compliance with

this order, the notices shall comply with this order as fully

as is practicable. The notices shall contain the following

statement: “By Order of the United States District Court

for the District of Oregon, the Multnomah County Elec-

tions Division advises voters that the passage of Measure

26-52 by itself cannot cause prc. rty taxes to increase

more than three percent. This clarifies language printed in

the November 4, 2003, ballot that was found to be mislead-

ing.

App. 58

Additionally, defendants shall issue a press release no

later than October 21, 2003, which states: “By Order of the

United States District Court for the District of Oregon, the

Multnomah County Elections Division advises voters that

the passage of Measure 26-52 by itself cannot cause

property taxes to increase more than three percent. This

clarifies language printed in the November 4, 2003, ballot

that was found to be misleading.”

Finally, no later than October 21, 2003, the homepage

for the Multnomah County Elections Division shall include

the following statement: “By Order of the United States

District Court for the District of Oregon, the Multnomah

County Elections Division advises voters that the passage

of Measure 26-52 by itself cannot cause property taxes to

increase more than three percent. This clarifies language

printed in the November 4, 2003, ballot that was found to

be misleading.”

ITIS SO ORDERED

DATED this 17 day of October, 2003.

/s/ Ancer L. Haggerty

Ancer L. Haggerty

United States District Judge

App. 59

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MICHAEL CARUSO,

Plaintiff-Appellee,

STATE OF OREGON,

Intervenor-Appellant,

Vv.

YAMHILL COUNTY, an Oregon

municipal corporation, by and

through its County Commissioner,

Defendant.

No. 04-35155

D.C. No. CV-03-

01731-ALH

District of Oregon,

Portland

ORDER

(Filed Nov. 15, 2005)

Before: HUG, TASHIMA, and CLIFTON, Circuit Judges.

The panel has voted to deny the petition for rehearing.

Judge Clifton has voted to deny the petition for rehearing

en banc, and Judges Hug and Tashima so recommend.

The full court has been advised of the petition for

rehearing en banc and no judge of the court has requested

a vote on whether to rehear the matter en banc. Fed. R.

App. P. 35.

The petition for rehearing and the petition for rehear-

ing en banc are DENIED.

App. 60

Oregon Constitution, Article XI

Section 11. Property tax limitations on assessed

value and rate of tax; exceptions.

(1) (a) For the tax year beginning July 1, 1997, each

unit of property in this state shall have a maximum

assessed value for ad valorem property tax purposes

_that does not exceed the property’s real market value

for the tax year beginning July 1, 1995, reduced by 10

percent.

(b) For tax years beginning after July 1, 1997, the

property's maximum assessed value shall not increase

by more than three percent from the previous tax

year.

(c) Notwithstanding paragraph (a) or (b) of this

subsection, property shall be valued at the ratio of av-

erage mnaximum assessed value to average real mar-

ket value of property located in the area in which the

property is located that is within the same property

class, if on or after July 1, 1995:

(A) The property is new property or new im-

provements to property;

(B) The property is partitioned or subdivided;

(C) The property is rezoned and used consis-

tently with the rezoning;

(D) The property is first taken into account as

omitted property;

(E) The property becomes disqualified from ~

exemption, partial exemption or special assess-

ment; or

(F) A lot line adjustment is made with respect

to the property, except that the total assessed

App. 61

value of all property affected by a lot line ad-

justment shall not exceed the total maximum as-

sessed value of the affected property under

paragraph (a) or (b) of this subsection.

(d) Property shall be valued under paragraph (c) of

this subsection only for the first tax year in which the

changes described in ~ ragraph (c) of this subsection

are taken into account following the effective date of

this section. For each tax year thereafter, the limits

described in paragraph (b) of this subsection apply.

(e) The Legislative Assembly shall enact laws that

establish property classes and areas sufficient to

make a determination under paragraph (c) of this

subsection.

(f) Each property’s assessed value shall not exceed

the property’s real market value.

(g) There shall not be a reappraisal of the real

market value used in the tax year beginning July 1,

1995, for purposes of determining the property’s

maximum assessed value under paragraph (a) of this

subsection.

App. 62

O.R.S. § 250.195 Procedure for elector dissatisfied

with title of county measure.

(1) Any elector dissatisfied with a ballot title filed with

the county clerk by the district attorney or the county

governing body, may petition the circuit court of the

judicial district in which the county is located seeking a

different title and stating the reasons the title filed with

the court is insufficient, not concise or unfair. The petition

shall name as respondent either the district attorney or

county governing body, depending on who prepared the

ballot title, and must be filed not later than the seventh

business day after the title is filed with the county clerk.

The court shall review the title and measure to be initi-

ated or referred, hear arguments, if any, and certify to the

county clerk a title for the measure which meets the

requirements of O.R.S. § 250.035.

(2) An elector filing a petition under this section shall

notify the county clerk in writing that the petition has

been filed. The notice shall be given not later than 5 p.m.

on the next business day following the day the petition is

filed.

(3) The review by the circuit court shall be the first and

final review, and shall be conducted expeditiously to

insure the orderly and timely circulation of the petition or

conduct of the election at which the measure is to be

submitted to the electors.

App. 63

O.R.S. § 280.070 Manner of holding elections for

local option tax or permanent rate limit; additional

statements in ballot title.

(1) An election within a county for the purpose of approv-

ing a tax levy or tax rate under O.R.S. § 280.060 shall be

called by the county court or board of county commission-

ers and shall be held on a date specified in O.R.S.

§ 203.085.

(2) An election within a city for the purpose of approving

a tax levy or tax rate under O.R.S. § 280.060 or under

section 11(3)(c), Article XI of the Oregon Constitution,

shall be called by the governing body of the city and held

on a date specified in O.R.S. § 221.230.

(3) An election within a political subdivision other than a

county or city for the purpose of approving a tax levy or

tax rate under O.R.S. § 280.060 or under section 11(3)(c),

Article XI of the Oregon Constitution, shall be called by

the governing body of the subdivision and held on a date

specified in O.R.S. § 255.345.

(4) (a) The ballot title for a measure authorizing the

imposition of local option taxes shall contain the fol-

lowing additional statement:

This measure may cause property taxes to increase more

than three percent.

(b) The statements required by this subsection shall

not be considered for purposes of the word count limi-

tations under O.R.S. § 250.035.

(c) The statements required by this subsection shall

be placed after the question on the ballot title.

(5)

App. 64

As part of the question, the ballot title for a measure

authorizing the imposition of local option taxes shall state:

(6)

(a) The length in years of the period during which

the proposed local option tax will be imposed.

(b) The first fiscal year in which the proposed local

option tax will be imposed.

As part of the question, the ballot title for a measure

authorizing the establishment of a permanent rate limita-

tion shall contain the following information:

(7)

(a) The tax rate per $1,000 of assessed value of the

proposed permanent rate limitation.

(b) The first fiscal year in which the proposed

permanent rate limitation will be imposed.

The ballot title for a measure authorizing the imposi-

tion of local option taxes or a permanent rate limitation

shall be in compliance with O.R.S. § 250.036.

App. 65

YAMHILL COUNTY

ELECTION OF MARCH 9, 2004

BALLOT TITLE MEASURE NO. 36-55

CAPTION:

AUTHORIZES SPECIAL LEVY IF YAMHILL COUNTY

PUD IS FORMED

QUESTION:

Shall voters authorize levy of $0.003 per $1,000 of as-

sessed valuation if Yamhill County People’s Utility District

is formed?

This measure may cause property taxes to increase more

than three percent.

SUMMARY:

This measure may be passed only at an election with at

least a 50 percent voter turnout.

If the Yamhill County People’s Utility District is formed,

this measure-allows the District board of directors to

impose a special levy on property within the district.

Funds raised from the levy would be used to pay for an

engineer's report and a later election to issue revenue

bonds, if held.

This one-time levy will raise about $9,700.00. The levy for

a house with an assessed value of $150,000 would be about

45 cents.

The estimated tax cost for this measure is an ESTIMATE

ONLY based on the best information available from the

county assessor at the time of estimate.