Free Motion to Amend/Correct - District Court of Arizona - Arizona

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INSTITUTE FOR JUSTICE Timothy D. Keller (019844) Jennifer M. Perkins (023087) 398 S. Mill Avenue, Suite 301 Tempe, AZ 85281 P: 480-557-8300/F: 480-557-8305 INSTITUTE FOR JUSTICE William R. Maurer (WSBA 25451) 1 811 First Avenue, Suite 625 Seattle, WA 98104 P: 206-341-9300/F: 206-341-3911 Attorneys for Plaintiffs IN THE UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ASSOCIATION OF AMERICAN PHYSICIANS AND SURGEONS, a nonprofit corporation; MATT SALMON, a citizen of the State of Arizona; DEAN MARTIN, a citizen of the State of Arizona; and LORI DANIELS, a citizen of the State of Arizona, Plaintiffs, v. ) ) ) ) ) ) ) ) ) ) ) JAN BREWER, in her official capacity ) as Secretary of State of the State of ) Arizona; DAVID PETERSEN, in his ) official capacity as Treasurer of the ) State of Arizona; TERRY GODDARD, ) in his official capacity as Attorney ) General of the State of Arizona; and )

Civil Action No. No. CV 04-0200-PHX-EHC

Memorandum In Support Of Notice Of Amendment, Or, Alternatively, Motion For Leave To File Amended Complaint 2 (Oral Argument Requested)

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Admitted pro hac vice. The Amended Complaint submitted with Plaintiff's Motion For Leave To File Amended Complaint substitutes various parties for some listed in the original caption. Until the Amended Complaint is accepted for filing, however, Plaintiff will continue to use the original caption. The new caption will also reflect the substitution of public officers pursuant to Fed. R. Civ. P. 25(d).

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) ) ) ) ) ) ) ) Defendants. ) _________________________________) I. INTRODUCTION

LESLIE "GENE" LEMON, DAVID G. McKAY, KATHLEEN S. DETRICK, ERMILA JOLLEY, and MARCIA BUSCHING, in their official capacity as members of the ARIZONA CITIZENS CLEAN ELECTIONS COMMISSION,

Pursuant to Fed. R. Civ. P. 15(a), 15(d), 20(a), and 21, Plaintiff Dean Martin ("Plaintiff") moves to amend the Complaint in this matter to (i) join new parties, specifically to add AZ Free Enterprise Club's Freedom Club PAC and Arizona Taxpayer Action Committee (together, the "Proposed Plaintiffs") as plaintiffs, and remove a defendant, (ii) clarify the constitutional claims, and (iii) update the facts to reflect events that have occurred since the filing of the Complaint in 2004. Since 2004, all original plaintiffs except one are currently not involved in state politics. Additionally, the law that is the subject of this suit--the Arizona Citizens Clean Elections Act (the "Act")-- has been amended. Moreover, Martin's election to the office of State Treasurer has placed him in the unusual position of being both a plaintiff and defendant in this case, which creates unusual difficulties for all counsel involved in this suit. Plaintiff therefore wishes to amend the Complaint to add the Proposed Plaintiffs because they are currently harmed by the Act, to remove the State Treasurer as a named defendant, and to challenge the law as amended.

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Defendants will suffer no undue prejudice if Plaintiff is allowed to amend the Complaint. This case has existed since 2004 and amending the Complaint to reflect current circumstances and interests benefits Defendants as well as Plaintiff by providing Defendants and this Court with a more accurate, precise, and up-to-date Complaint to which to respond. Moreover, by permitting amendment, the constitutionality of the Act and the Commission's implementation of it can be examined in one case, thus allowing a comprehensive resolution and preventing overlapping litigation and extra expense for Defendants. Finally, this Court has not yet entered a case scheduling order on remand and there is thus no trial date or discovery cut-off approaching that might prejudice Defendants' interests. Substantively, amendment is appropriate because the proposed amendment is not futile. This Court retains subject matter jurisdiction and may allow the amendment of the Complaint to include new plaintiffs, even if other plaintiffs have been mooted out. In such circumstances, leave to amend should be granted. Pursuant to L. R. Civ. P. 15(a)(1), a "red-lined" version of the proposed Amended Complaint is attached to this Memorandum as Attachment A. Pursuant to L. R. Civ. P. 15(a)(2), an original copy of the proposed Amended Complaint has been lodged with the

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Clerk of the Court and attached to this Memorandum as Attachment B. II. STATEMENT OF FACTS

On January 29, 2004, the Association of American Physicians and Surgeons (AAPS), Matt Salmon, Dean Martin, and Lori Daniels, filed a Complaint against the following Arizona governmental officials in their official capacities: Secretary of State

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Jan Brewer, State Treasurer David Peterson, Attorney General Terry Goddard, and Commission Members Leslie "Gene" Lemon, David McKay, Kathleen S. Detrick, Ermila Jolley, and Marcia Busching. The Complaint alleged that the Act and Defendants' implementation of the Act violated the Constitution. Docket 1 (Compl.). Plaintiffs also sought a preliminary injunction. Docket 2 (Mot. Prelim. Inj.). On March 12, 2004, Defendants moved to dismiss the Complaint, as did Steven S. Poe and the Clean Elections Institute, Inc. (the "Intervenors"), who also filed a motion to intervene the same day. Docket 9 (Mot. Intervene); Docket 11 (Intervenors' Mot. Dismiss); Docket 13 (Def. Mot. Dismiss). Both Defendants and Intervenors filed responses to the motion for a preliminary injunction. Docket 10 (Intervenors' Resp. Mot. Prelim. Inj.) and 12 (Defs. Resp. Mot. Prelim. Inj.). No Answer has been filed by Defendants or Intervenors. On July 8, 2004, this Court denied Plaintiffs' Motion for a Preliminary Injunction. Docket 32 (Order Den. Mot. Prelim. Inj.). On March 10, 2005, this Court granted Defendants' and Intervenors' Motion to Dismiss. Docket 37 (Order Grant. Mot. Dismiss). Plaintiffs appealed to the Ninth Circuit. Docket 39 (Notice Appeal). That court reversed the order granting the Motion to Dismiss with regard to Martin,

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concluding that his Complaint stated a cause of action and remanded Martin's case "with instructions to permit further development." Ass'n of Am. Physicians & Surgeons, 494 F.3d 1145, 1146 (9th Cir. 2007). The court dismissed the other plaintiffs because their claims were moot in that they were not affected by the Act at the time of Ninth Circuit

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review. Ass'n of Am. Physicians & Surgeons, 486 F.3d 586, reh'g granted 494 F.3d 1145 (9th Cir. 2007). III. ARGUMENT

Because Defendants and Intervenors have never filed a responsive pleading, Plaintiff may amend the Complaint by right. However, to the extent that leave of this Court is necessary to make such an amendment, Plaintiff should be permitted to amend the Complaint as indicated in the proposed Amended Complaint because amendment would not unduly prejudice Defendants and Intervenors and such amendment would not be futile. Finally, Plaintiff should be able to join the Proposed Plaintiffs because the claims of the Proposed Plaintiffs arise out of the same series of transactions or occurrences as Plaintiff's claim and these claims all present common questions of law. A. Plaintiff May Amend the Complaint by Right

Rule 15(a) of the Federal Rules of Civil Procedure provides that a "party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served...." Fed. R. Civ. P. 15(a). Defendants and Intervenors have never filed a responsive pleading, just motions to dismiss. It is well established that a motion to dismiss is not a responsive pleading for purposes of Rule 15(a). See Shaver v.

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Operating Eng'rs Local 428 Pension Trust Fund, 332 F.3d 1198, 1201 (9th Cir. 2003); Phillips v. Borough of Keyport, 179 F.R.D. 140, 145 (D.N.J. 1998) ("[I]t is clear that a motion to dismiss, a motion to strike or a motion for summary judgment is not a responsive pleading for purposes of Fed. R. Civ. P. 15(a))."). Thus, courts routinely permit parties to amend their pleadings on remand after appeal from an order granting a

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motion to dismiss so long as a responsive pleading has not been filed. See Brever v. Rockwell Int'l Corp., 40 F.3d 1119, 1131 (10th Cir. 1994) ("Furthermore, because we remand this case on the grounds that Ms. Pitts did state claims ... and because defendants still have not filed a responsive pleading, Ms. Pitts remains entitled to her one amendment as a matter of right."); Doe v. Harris, 696 F.2d 109, 114 n.10 (D.C. Cir. 1982) ("Doe's complaint remains unanswered. On remand Doe may amend the complaint to confine it to relief he now seeks."). In particular, the Ninth Circuit has held that neither the filing nor granting of a motion to dismiss terminates the right to amend. Schreiber Distrib. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). 3 Nonetheless, some courts have not followed this rule. See Phillips, 179 F.R.D. at 146 ("The right to amend as a matter of course must terminate at some point. This is so even if a responsive pleading has not been filed, and even if the order of dismissal is not affirmed.") (footnote omitted); In re "Agent Orange" Prod. Liab. Litig., 220 F.R.D. 22, 24 (E.D.N.Y. 2004) ("Dismissal of a complaint functions much as would a responsive pleading."). Thus, in the alternative, Plaintiff also moves this Court for leave to amend. By making such a motion, Plaintiff does not waive his right to amend by filing a motion for leave to amend. See Pure Country, Inc. v. Sigma Chi Fraternity, 312 F.3d 952, 956

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In that regard, some circuits similarly hold that a party may add parties to a suit as a matter of right prior to a responsive pleading because seeking to add a party constitutes seeking to amend the complaint and thus a motion pursuant to Rule 21 is not necessary at that stage. See, e.g., U.S. ex rel. The Precision Co. v. Koch Indus., 31 F.3d 1015, 1018 (10th Cir. 1994). This rule applies to joinder pursuant to Rule 20(a) as well. See 4 James Wm. Moore et al., Moore's Federal Practice § 20.02 ("If the defendant has not yet served a responsive pleading, the plaintiff has a right to amend and need not seek leave of court to join permissive parties.").

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(8th Cir. 2002) ("[S]eeking leave to amend does not, by itself, invoke the district court's discretionary authority to deny leave if the amendment would otherwise fall within the purview of the first sentence of Rule 15(a)."). B. Plaintiff Should Be Permitted to Amend the Complaint Pursuant to Rule 15

Rule 15(a) of the Federal Rules of Civil Procedure also provides for the amendment of pleadings with the leave of the Court and requires that "leave shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). 4 In the absence of any apparent or declared reason, such as futility of amendment, undue delay, bad faith, dilatory motive, undue prejudice, or repeated failure to cure pleading deficiencies, the leave sought should, as the rules require, be "freely given." Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962); see also Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990) (Rule 15(a) is to be applied with "extreme liberality"). Similarly, Federal Rule of Civil Procedure 15(d) permits a party to serve a supplemental pleading "upon reasonable notice and upon such terms as are just . . . setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented." Fed. R. Civ. P. 15(d). A motion to supplement pleadings under Rule 15(d) is properly made when a party seeks to plead
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To the extent that this Court deems all or part of this Motion more appropriately brought pursuant to Fed. R. Civ. P. 21, Plaintiff respectfully requests that this Court construe it as such. See 3 James Wm. Moore et al., Moore's Federal Practice § 15.16 ("Once the defendant files a responsive pleading, ... the standards for adding parties are the same under both Rule 15 and Rule 21, since the plaintiff is required to obtain leave of court under both Rules." (collecting cases)).

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events that have happened since the date of the pleading sought to be supplemented. Flaherty v. Lang, 199 F.3d 607, 614 n.3 (2nd Cir. 1999). A motion to amend under Rule 15(d) is the appropriate method of adding parties based on events that have occurred since the commencement of the action. See Pratt v. Rowland, 769 F. Supp. 1128, 1131 (N.D. Cal. 1991) (plaintiff moved to file supplemental complaint to add new defendants). Rule 15(d) motions are evaluated under the same standards used to evaluate motions to amend pleadings under Rule 15(a). Forbes & Wallace, Inc. v. Chase Manhattan Bank, 79 F.R.D. 563, 565 (S.D.N.Y. 1978). Plaintiff satisfies the standards for amendment under both Rule 15(a) and 15(d) and this Court should therefore grant leave to amend. 1. Amendment Is Necessary to Reflect Changed Circumstances Since Filing

As is apparent, events that have transpired since the filing of the Complaint have made it incomplete in that it names plaintiffs that are no longer parties. In addition, the Legislature has changed the Act. Amendment is required to allow all parties wishing to challenge the amended Act to present their claims regarding the Act's continued violations of their constitutional rights in one case, thus allowing comprehensive resolution of the constitutionality of the Act and to avoid overlapping litigation. This Court would thus further the interests of justice by allowing both Plaintiff and the Proposed Plaintiffs to litigate all their claims regarding the Act in one action. This benefits all parties and furthers the conservation of judicial resources by avoiding the burden and expense of forcing the Proposed Plaintiffs to file a separate lawsuit

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maintaining separate claims regarding the same law that Martin challenges. Plaintiff therefore should be able to amend the Complaint pursuant to both Rule 15(a) and (d) to recognize new facts that have occurred since the filing of the original Complaint and to add new parties that have an interest in the law in question. 2. Defendants Would Suffer No Undue Prejudice

This Court has not yet entered any scheduling order on remand. Accordingly, there is no pending trial date, discovery cut-off, or other deadline that will limit the time in which Defendants will have to investigate and defend against the Amended Complaint. Allowing Plaintiff to amend the Complaint will thus not unduly prejudice Defendants by subjecting them to unreasonable time deadlines. See Morton Int'l Inc. v. A.E. Staley Mfg. Co., 106 F. Supp. 2d 737, 745 (D.N.J. 2000) (noting lack of prejudice in light of absence of trial date). Plaintiff brought this timely motion after remand on good faith, without a dilatory purpose, and within a reasonable time of remand. In essence, both Plaintiff and Defendants are at the beginning of this case and amending the Complaint should have no effect on Defendants whatsoever. In the absence of any undue prejudice, amendment is appropriate. See 3 James Wm. Moore et al., Moore's Federal Practice § 15.15 (undue

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prejudice a "key factor[]" in deciding whether leave is warranted). 3. Amending the Complaint Is Not Futile

This Court may deny a motion for leave to amend if amendment of the Complaint would be futile. Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2004). An amendment is futile when the amended complaint could not withstand a motion to dismiss. Allen v.

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City of Beverly Hills, 911 F.2d 367, 374 (9th Cir. 1990). Amendment here is proper and is certainly not futile because (i) Plaintiff's claims remain live, therefore this Court retains jurisdiction over this case and may permit amendment to add new plaintiffs; (ii) the substantive constitutional issues raised by this case have been the subject of subsequent development by both the U.S. Supreme Court and the Ninth Circuit since this case was originally filed; and (iii) the Ninth Circuit has recognized that the Act in question raises First Amendment issues and therefore an amended complaint should withstand a motion to dismiss. a. This Court Retains Subject Matter Jurisdiction and May Permit Amendment to Add New Parties

Parties that remain in a case in which other parties have been mooted out may substitute new parties with similar interests. In Diggs v. Housing Authority of the City of Fredrick, the district court considered a civil rights claim involving public housing policies. 67 F. Supp. 2d 522 (D. Md. 1999). Some plaintiffs were mooted out because they no longer lived in public housing and the defendants argued that the remaining plaintiffs should not be able to amend the complaint to add new plaintiffs residing in public housing. The district court rejected that argument, noting that the case before it was not entirely moot because some plaintiffs retained a legally cognizable interest and, therefore, the court retained its subject matter jurisdiction over the case. Id. at 529. Because the court retained subject matter jurisdiction, it could consider the motion to amend the complaint. Similarly, because Martin's case is not moot, this Court retains

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subject matter jurisdiction over this proceeding and may issue an order granting leave to file an amended complaint adding new plaintiffs with similar issues. b. Campaign Finance Law Has Changed Since 2004

Defendants may argue that, on the substance, any arguments made by a political committee still cannot survive a motion to dismiss. However, the Supreme Court and Ninth Circuit's treatment of campaign finance laws has changed since this Court first considered this case in 2004. Since then the Supreme Court has decided two cases striking down regulations of political campaigns. See Fed. Election Comm'n v. Wisconsin Right to Life, Inc., __ U.S. __, 127 S. Ct. 2652, 2674, 168 L. Ed. 2d 329 (2007) (striking down application of a portion of McCain-Feingold law); Randall v. Sorrell, __ U.S. __, 126 S. Ct. 2479, 2488-89, 165 L. Ed. 2d 482 (2006) (striking down Vermont's expenditure and contribution limits). Moreover, the Ninth Circuit has also recently stressed that factual development is essential in cases challenging campaign finance regulations. Citizens for Clean Gov't v. City of San Diego, 474 F.3d 647 (9th Cir. 2007). In that case, the Ninth Circuit held that campaign finance restrictions must be supported by some quantum of empirical evidence needed to satisfy heightened judicial scrutiny and that the government could not rely on

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pure conjecture. Id. at 653-54. The court noted that because the government bears the burden of producing evidence in First Amendment cases, any empirical evidence must offset any evidence produced by the plaintiff, as well. Id. at 653. In light of these decisions, the Amended Complaint could clearly survive a motion to dismiss and Plaintiff and the Proposed Plaintiffs are entitled to develop facts supporting their claims.

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c.

The Political Committee Claims Are Similar to Martin's

Finally, the claims of the new plaintiffs are substantively similar to Martin's claims in that both sets of claims argue that the Act's provision seeking to equalize campaign-funding result in a violation of First Amendment and Equal Protection rights. See Attach. B (First Amend. Compl. ¶¶ 45-54). The Ninth Circuit found that Martin has stated a cause of action. Ass'n of Am. Physicians & Surgeons, 494 F.3d 1145, 1145 (9th Cir. 2007). In light of this conclusion, similar claims by political committees are not futile. C. Plaintiff Should Be Permitted To Join The Proposed Plaintiffs Under Rule 20(a).

Plaintiff is entitled to amend the Complaint to join the Proposed Plaintiffs as plaintiffs under Rule 20(a) of the Federal Rules of Civil Procedure, which permits a party to join all persons as plaintiffs "if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences if any question of law or fact common to all these persons will arise in the action." Fed. R. Civ. P. 20(a). "The purpose of Rule 20 is to `promote trial convenience and expedite the final determination of disputes, thereby preventing multiple lawsuits.'" Culhane Commc'ns, Inc. v. Fuller, 489 F. Supp. 2d 959, 962 (D.S.D. 2007) (quoting Mosley v. General Motors Corp., 497 F.2d 1330, 1332 (8th Cir. 1974)). Rule 20(a) is to be liberally construed to promote judicial economy and to allow related claims to be tried within a single proceeding. See League to Save Lake Tahoe v. Tahoe Reg'l Planning Agency, 558 F. 2d 914, 917 (9th Cir. 1977). Joinder is

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"strongly encouraged" and the courts favor the broadest possible scope of action consistent with fairness to the parties. Culhane, 489 F. Supp. 2d at 962 (emphasis added). To satisfy Rule 20(a), a moving party must demonstrate that (i) the right to relief asserted by each plaintiff relates to or arises out of the same transaction or occurrence or the same series of transactions or occurrences; and (ii) the case raises some question of law or fact common to all parties. Desert Empire Bank v. Ins. Co. of N. Am., 623 F. 2d 1371, 1375 (9th Cir. 1980). "[A]ll `logically related' events entitling a person to institute a legal action against another generally are regarded as compromising a transaction or occurrence." Mosley, 497 F.2d at 1333. Here, joinder of the Proposed Plaintiffs is appropriate under Rule 20(a). The claims against the Commission all flow from the Commission's systemic implementation of the Act and the subsequent unconstitutional pattern of restriction on the free speech rights of independently funded candidates and the political committees supporting such candidates or opposing their opponents. See Coughlin v. Rogers, 130 F. 3d 1348, 1350 (9th Cir. 1997) (joinder inappropriate without allegations of systemic pattern of events). Defendants have engaged in a pattern or policy of violating

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constitutional rights by implementing the Act. Moreover, Plaintiff and the Proposed Plaintiffs share claims raising common issues of law ­ namely, the restriction on their First Amendment rights effectuated by the Act and its implementation. Plaintiff thus satisfies both prongs of Rule 20(a) and is entitled to join the Proposed Plaintiffs.

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IV. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests that this Court (i) grant the Motion for leave to amend, and (ii) order the Clerk of the Court to accept the First Amended Complaint for filing. RESPECTFULLY SUBMITTED this 27th day of November, 2007. INSTITUTE FOR JUSTICE

s/Timothy D. Keller Timothy D. Keller (019844) Jennifer M. Perkins (023087) 398 S. Mill Avenue, Suite 301 Tempe, AZ 85281 P: 480-557-8300/F: 480-557-8305 INSTITUTE FOR JUSTICE William R. Maurer (WSBA #25451) 5 811 First Avenue, Suite 625 Seattle, WA 98104 P: 206-341-9300/F: 206-341-8311

Admitted pro hac vice.

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