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Montgomery County v. Fraternal Order of Police

Court of Special Appeals of Maryland

April 3, 2015

MONTGOMERY COUNTY, MARYLAND, ET AL.
v.
FRATERNAL ORDER OF POLICE, ET AL

Page 1053

Appeal from the Circuit Court for Montgomery County. Ronald B. Rubin, Judge.

Argued by: Marc P. Hansen, County Attorney & Edward B. Lattner, Chief (Charles L. Frederick, Haley M. Roberts Division of Human Resources & Appeals all of Rockville, MD) on the brief for Appellant.

Argued by: William J. Chen, Jr. (Chen & McCabe, LLP of Rockville, MD) Marth L. Handman (Marth L. Handman PC of Gaithersburg, MD) all on the brief for Appellee.

Panel: Deborah S. Eyler, Leahy, Sharer, J. Frederick, (Retired, Specially Assigned), JJ.

OPINION

Page 1054

[222 Md.App. 281] Deborah S. Eyler, J.

Montgomery County (" the County" ); Isiah Leggett, the County Executive; and Patrick Lacefield, the Director of the County's Office of Public Information (" OPI" ), challenge a declaratory judgment entered by the Circuit Court for Montgomery County ruling that they acted without authority and contrary to law by using County funds to campaign for the passage of a local ballot question. The Fraternal Order of Police, Montgomery County, Lodge 35, Inc. (" the FOP" ), and two police officer members, Michael Kane and Mario Mastrangelo,[1] [222 Md.App. 282] cross-appeal from the court's denial of their claims for monetary relief.

We hold that the County acted within its powers and not illegally by spending County funds to campaign in favor of the particular ballot issue; and that Leggett and Lacefield did not violate any laws. Accordingly, we shall reverse the judgment of the circuit court. Our resolution of the appeal necessarily resolves the cross-appeal.

FACTS AND PROCEEDINGS

The Montgomery County Code establishes the collective bargaining rights of County employees, including Montgomery County Police Department (" MCDP" ) officers below the rank of lieutenant. See Montgomery County Code (" Code" ) (2004), § § 33-75 - 33-85. Prior to the events central to this case, one such collective bargaining right held by these police officers was the right to engage in " effects bargaining." " Effects bargaining" is collective bargaining about the effects of certain decisions that are reserved to the discretion of the County Executive, such as budget allocations and changes in the organizational structure of County agencies. Fraternal Order of Police Lodge 35 v. Montgomery Cnty., 436 Md. 1, 5, 80 A.3d 686 (2013).

On July 19, 2011, the Montgomery County Council unanimously passed Bill 18-11, amending the Code to eliminate effects bargaining for MCPD police officers below the rank of lieutenant. Leggett signed Bill 18-11 into law on August 1, 2011. Unhappy with the bill, the FOP, as the exclusive bargaining representative for the affected MCPD police officers, petitioned

Page 1055

the bill to referendum. Its petition was certified by the Montgomery County Board of Elections on November 18, 2011. As a result, Bill 18-11 was suspended from taking effect " until thirty days after its approval by a [222 Md.App. 283] majority of the registered voters voting thereon." Montgomery County Charter (" the Charter" ) § 115.[2]

The referendum on Bill 18-11 was designated to appear on the November 6, 2012 General Election ballot as " Question B." The ballot question asked: " Shall the Act to modify the scope of collective bargaining with police employees to permit the exercise of certain management rights without first bargaining the effects of those rights on police employees become law?" A " Yes" vote would approve Bill 18-11 and allow it to take effect.

Early in the summer of 2012, the FOP launched a campaign against Question B. In August of 2012, Leggett, acting in his capacity as County Executive, decided that the County would mount its own campaign to encourage the electorate to vote " Yes" on Question B. Leggett directed Lacefield, as Director of the OPI,[3] to coordinate the Question B campaign and authorized him to spend up to $200,000 in funds appropriated for OPI's fiscal year 2013 budget for that purpose. OPI is an office in the executive branch of the County government. See Code, § 1A-201(a). Its responsibilities include " [s]erv[ing] as a focal point for communications with citizens and community organizations" ; [e]stablish[ing] and maintain[ing] a public information program" ; and " [c]arry[ing] out related matters as may be assigned." Code § 2-64H.

Lacefield obtained legal advice from the County Attorney about the propriety of the County's using funds from OPI's [222 Md.App. 284] budget for the Question B campaign. In a " Memorandum" dated September 19, 2012, and entitled " Government Speech - Effects Bargaining Referendum," the County Attorney reiterated prior oral advice he had given Lacefield on that matter. He opined that a County-funded campaign to advocate for a " Yes" vote on Question B would be " legal and appropriate" because the County is " entitled to engage in speech supporting and explaining its policies, including speech that advocates support of a ballot measure." The County Attorney also advised that state and local prohibitions against County employees' engaging in " political activity" during work hours are directed toward " partisan political activity," i.e., actions taken for or against a candidate or a slate of candidates associated with a particular political party, and do not apply to activities in support of a ballot measure.[4]

Page 1056

In the Question B campaign, Lacefield used excerpts from the record of the County Council hearings on Bill 18-11, particularly the testimony of the Chief of Police and MCPD lieutenants espousing that effects bargaining was harming the operation of the MCPD, to create advocacy material, such as mailers, posters, flyers, yard signs, bumper stickers, and advertising for County buses. He also spoke with some of the MCPD managers about their views on effects bargaining. A " fact sheet" prepared by OPI about Question B provides a useful summary of the County's position. It states that effects bargaining means that the Chief of Police must bargain with the FOP on " the effects of any and all management decisions" and that this interferes with his ability to run the MCPD in the most " efficient and productive way." (Emphasis in original.) The " fact sheet" notes that the County's police force is the only one in Maryland with the right to effects bargaining and that no other County employees have this [222 Md.App. 285] right in their union contracts. It emphasizes that eliminating effects bargaining is not an attack on unions and that the FOP will remain entitled to bargain on wages, benefits, hours, working conditions, and leave. It gives examples of how effects bargaining was hampering the Chief of Police in his management of the MCPD, including that a proposed new " Use of Force" policy had been sent to the FOP for approval in June 2008 but remained pending years later.

In mid-September of 2012, the County began featuring a " Vote for Question B" graphic on the homepage of its website. Visitors who clicked on that graphic were directed to a separate page that gave additional information advocating for the passage of Question B. In addition, the County included advocacy materials on Question B in its electronic newsletter, " the Paperless Airplane," which was disseminated to about 125,000 County residents five times between September 14, 2012, and election day.

By mid-October of 2012, the County had installed on the interiors and exteriors of all County-operated Ride-On buses signs emblazoned with some version of the following statement: " Who Do You Think Should Run the County Police? The Police Chief or Union Leaders? Vote FOR Question B." The signs were marked with the County seal and " Montgomery County Office of Public Information." [5]

The County also expended OPI funds on a mailing campaign urging recipients to " Vote for Question B." It hired an outside consulting firm to design the two mailers, identify target recipients, and obtain mailing lists. It paid the firm $13,095. In the week before the election, the County sent the two mass [222 Md.App. 286] mailings to more than 163,000 County households, at a cost of over $90,000.

Aside from the outside consulting firm, most of the work on the County's campaign in favor of Question B was performed by County employees. OPI staff designed signs, bumper stickers, t-shirts, and flyers. Employees in the County Department of General Services (" DGS" ) distributed

Page 1057

signs and posters to County facilities, including libraries and recreation centers.

Leggett personally reached out to local Democratic and Republican party officials, speaking to the Democratic Party Ballot Question Advisory Committee, the Democratic Central Committee, and the Republican Central Committee. Both parties supported passage of Question B.

In all, the County spent $122,350.17 in OPI funds on the Question B campaign. This sum exceeded 10% of OPI's budget for fiscal year 2013.

During the campaign, the FOP challenged the County's right to spend public funds on a political campaign and argued that the County was making false and misleading statements about effects bargaining. On September 20, 2012, it filed a complaint with the County Inspector General. The Inspector General did not respond until November 8, 2012, two days after the election. He advised the FOP that the County's activities were consistent with the legal advice it had received from the County Attorney and were taken in good faith. With respect to the allegation that the County's campaign was misleading, the Inspector General advised that his office had reviewed the complained of statements and had found all of them to be reasonable.

In the meantime, on October 17, 2012, the FOP filed a complaint about the County's activities with the Office of the State Prosecutor. By letter of October 22, 2012, the State Prosecutor advised Leggett and the County Council that his office had received a complaint that the County was expending public funds and using County employees to push for passage of Question B; that this conduct might be a violation of state [222 Md.App. 287] campaign finance laws; and that his office would be opening an investigation into these activities to determine if any criminal violations had occurred.

The County Attorney immediately responded to the State Prosecutor's letter, explaining his opinion that the County was not subject to state election laws governing campaign finance activity. Thereafter, the State Prosecutor closed his investigation and asked the Office of the Attorney General to render an opinion on the legality of the County's campaign. No such opinion was issued.

The day before the election, the FOP filed the instant action against the County, Leggett, and Lacefield. It alleged generally that the County had spent public funds to campaign for the passage of Question B; had directed certain of its employees to participate in the campaign during work hours; had hired outside individuals to distribute campaign materials; and that all these activities could " greatly diminish the likelihood that Question B [would] be defeated." The FOP claimed that approval of Question B, which would result in Bill 18-11 taking effect, might " reasonably [cause the FOP to] sustain pecuniary losses due to increased and protracted litigation over whether disputed issues with the County are mandatory subjects of bargaining or effects on employees of the employer's exercise of an employer right."

The FOP further alleged that the County's use of public funds to campaign for passage of Question B was " ultra vires and without any authority of law" because it was not a proper governmental function; the County was neither expressly nor impliedly authorized by the Home Rule Amendment or the Express Powers Act to advocate on a ballot question; the expenditures should have been made through a " ballot issue committee" registered with the State Board of Elections (" State Board" ), pursuant to Md. Code (2003, 2010 Repl. Vol., 2012 Supp.), sections 1-101(f)

Page 1058

and 13-202 of the Election Law Article (" EL" ); and the County had not registered any such committee. It alleged, moreover, that the County had no authority to direct County employees to work on the campaign [222 Md.App. 288] and, in fact, those employees are prohibited by State and local law from engaging in political activity while on the job. The FOP sought a judgment declaring that the County was acting illegally; holding Leggett and Lacefield personally liable for the " wrongful and illegal expenditure of public funds" ; ordering Leggett and Lacefield to reimburse the County, with interest, for the wrongful expenditures; and awarding it attorneys' fees and costs.

On November 6, 2012, the voters in Montgomery County approved Question B by a margin of 58.05% to 41.95%. Bill 18-11 became law as a result.

Thereafter, the FOP amended its complaint to reiterate its prior allegations and set forth ten counts.[6] In Counts 1 through 6, it sought declaratory and injunctive relief against Leggett and Lacefield (Counts 1, 2, and 3) and the County (Counts 4, 5, and 6). It alleged that Leggett and Lacefield were a " political committee" within the meaning of the Election Law Article and that they had failed to comply with the requirements imposed upon political committees in the campaign finance title of that article. It sought a declaration that Leggett and Lacefield had violated those laws and directing them to comply with them (Count 1). It claimed that Leggett and Lacefield had engaged in " electioneering and campaign activities" during work hours in violation of Md. Code (1957, 2011 Repl. Vol.), section 13-105 of Article 24 (Count 2); and in violation of sections 405, 406, and 408 of the Charter, section 19A-14 of the Code, and section 3-8 of the County personnel regulations (" MCPR" ) (Count 3).

The FOP again alleged that the County had no legal authority to engage in electioneering and campaign activities, and sought a declaration to that effect (Count 4). It also sought a declaration that the County, through Leggett and Lacefield, [222 Md.App. 289] illegally engaged in electioneering and campaign activities in violation of the campaign finance title of the Election Law Article (Count 5) and in violation of the above-referenced provisions of the Charter, the Code, and the MCPR (Count 6).

In the remaining counts, the FOP sought damages. It alleged in Counts 7 and 8 that Leggett and Lacefield had engaged in " misconduct in office" in violation of Article 6 of the Maryland Declaration of Rights, and that their actions to promote the passage of Question B were taken with willful and reckless disregard for the law and amounted to malfeasance. The FOP asked the court to find that these actions were illegal, order Leggett and Lacefield to personally " pay . . . and reimburse[ [the County] for the cost of all electioneering and campaign activity" relative to Question B, and order an accounting. In Count 9, captioned " Taxpayer Cause," the FOP alleged that Leggett and Lacefield had engaged in illegal electioneering activity with " tax-derived funds" and by doing so had caused an increase in the FOP's taxes. In Count 10, the FOP sought damages against the County, Leggett, and Lacefield for violation of its state constitutional rights.

Finally, the FOP made a general request for attorneys' fees and costs.

Page 1059

The County, Leggett, and Lacefield moved to dismiss the amended complaint, arguing, among other reasons, that the FOP lacked standing and that its action was barred by the doctrine of laches. They also moved for summary judgment. The FOP filed a cross-motion for summary judgment. The motions were denied and the case was tried to the court for nine days, from February 18 to February 28, 2014. Most of the testimony and other evidence concerned the nature of the County's campaign in favor of Question B.

On March 21, 2014, the court issued a memorandum opinion and order. In its " Findings of Fact," it found that the County, Leggett, and Lacefield had " engaged in electioneering and conducted a political campaign" advocating for the passage of Question B and had spent at least $122,000 on that campaign. The court found that the campaign had used [222 Md.App. 290] County employees from OPI and DGS and other departments. The court summarized the campaign activities as follows:

[T]he County's political campaign included two targeted mass mailings during the week before the election; advertising on County Ride-On buses; advocacy on the County's website; hiring a political consultant; hiring individuals to disseminate campaign material at the polls during early voting and on Election Day; using County employees, while on the clock, to design and produce campaign material and to disseminate posters, flyers and yard signs; and using County email lists to disseminate campaign materials to voters.

The court found that Leggett " subjectively believed, in good faith, that effects bargaining was deleterious to the efficient operations of the police force" and that all of the County's statements about Question B and effects bargaining were " true" or made without an intent to mislead. It further found that, " as a direct consequence of the County's campaign activities on Question B, the FOP incurred expenses over and above the expenditures that it otherwise would have spent to promote voter disapproval of Question B." It did not quantify how much more the FOP had spent than it otherwise would have spent, finding only that the FOP had spent a total of $169,619 on its campaign against Question B.[7]

In its " Conclusions of Law," the court opined that the FOP had standing to bring suit because it had " suffered some special damage, 'differing in character and kind from that suffered by the general public' as a result of the repeal of effects bargaining" (quoting Weinberg v. Kracke, 189 Md. 275, 280, 55 A.2d 797 (1947) (footnote omitted)), and that the County had not made a showing of unreasonable delay or prejudice sufficient to support its laches defense.

Turning to the merits of the FOP's claims, the court analyzed the right to referendum under state law, concluding that [222 Md.App. 291] a ballot question arising from a referendum petition does not differ in any significant respect from " any another contested, partisan election." It rejected the County's argument that under the " government speech doctrine" it was entitled to speak on topics of public importance to its function and role as a government and that Question B was such a topic. The court concluded that that doctrine shields state and local governments from First Amendment challenges to their use of a public forum to advocate for policies supported

Page 1060

by the government but is not a source of power for the " unlimited unregulated spending of public funds by a governmental entity to influence a contested election."

Emphasizing that, as a charter county, the County derives its power from the State, the court concluded that, although the County has " inherent power" to " appropriate funds for any public purpose," " [e]ngaging in political electioneering simply is not 'essential or indispensable' to running a municipal government." (quoting River Walk Apartments, LLC v. Twigg, 396 Md. 527, 543, 914 A.2d 770 (2007)). The court concluded that the County lacks inherent power to engage in a political campaign, and is not granted such power by the Express Powers Act; therefore it has no power to engage in a political campaign, and its doing so was ultra vires.

The court analyzed out-of-state cases, most of which were decided in the 1970s and 1980s, and found they supported its legal conclusions. These cases, some of which we shall discuss later in this opinion, hold in broad terms that it is not an appropriate municipal function for a local government to weigh in on one side of a contested ballot measure. They distinguish between government communications designed to inform the public about government policies and programs and government communications that " proselytize and try to influence the outcome of an election contest." The court found that, in the instant case, the County's Question B campaign was not " informational," but was " partisan and political."

The court determined that Leggett and Lacefield were subject to the campaign finance and reporting laws in Title 13 [222 Md.App. 292] of the Election Law Article, opining that these laws apply to the " campaign activities of all persons, regardless of their office." It found that Leggett and Lacefield were a " political committee," as that term is defined in EL section 1-101(gg), and that they had failed to register with the State Board or to otherwise comply with the campaign finance reporting requirements in the EL Article. Finally, the court found that Leggett and Lacefield improperly directed County employees to participate in the campaign for Question B during work hours, in violation of section 13-105 of Article 24, the Charter, the Code, and the MCPR.

The court declined to award monetary relief, stating:

[Counts 7, 8, 9 and 10] have as a common element the notion that Leggett and Lacefield committed wrongdoing under color of their office and should personally be held to account in some form of monetary relief. Assuming, without deciding, that these claims have validity, the court nonetheless declines to require either defendant to personally pay any form of monetary award. In the court's view, they are entitled to at least " qualified immunity" to the extent the plaintiffs seeks to hold them personally liable. The conduct of both individual defendants involved performance of discretionary duties and did not " violate clearly established statutory or constitutional rights of which a reasonable person would have known." [ Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982).] This is a case of first impression. " If the law at the time was not clearly established, an official could not reasonably be expected to anticipate subsequent legal developments, nor could he fairly be said to 'know' that the law forbade conduct not previously identified as unlawful." [ Id. ]

(Footnotes omitted.) On these bases, the court dismissed, with prejudice, Counts 7, 8, 9, and 10. It directed the parties to submit a draft order to that effect and a draft declaratory judgment.

Page 1061

On April 1, 2014, the court entered its " Declaratory Judgment." As relevant here, it " Ordered, Adjudged, Decreed, [222 Md.App. 293] and Declared" that Leggett and Lacefield were a " political committee" that was required to comply with the campaign finance and reporting requirements of the Election Law Article, but failed to do so (Count 1); that Leggett and Lacefield caused County employees to participate in political activities during work hours in violation of section 13-105 of Article 24 (Count 2) and in violation of the Charter, the Code, and the MCPR (Count 3); that the County had no legal authority to engage in electioneering and that its Question B campaign was ultra vires (Count 4); and that the County was not subject to Title 13 of ...


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