In Re: Nicholas J. Lorusso
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2011 CA 0666 IN RE NICHOLAS J LORUSSO DATE OF JUDGMENT I DEC 2 9 2 011 ON APPEAL FROM THE LOUISIANA BOARD OF ETHICS NUMBER 2007 609 STATE OF LOUISIANA OrI FRANK P SIMONEAUX CHAIRMAN JAMES G BOYER VICE CHAIRMAN 0 DR ROBERT P BAREIKIS REV GAIL E BOWMAN GARY G HYMEL JEAN M INGRASSIA DR CEDRIC W LOWREY DR LOUIS W LEGGIO M BLAKE MONROSE SCOTT D SCHNEIDER AND DAVID GROVE STAFFORD JR John B Dunlap III Counsel for Plaintiff Appellant Jennifer A Fiore Nicholas J Lorusso Baton Rouge Louisiana Kathleen M Allen Counsel for Defendant Appellee Mike Dupree Baton Rouge Louisiana Louisiana Board of Ethics BEFORE WHIPPPLE KUHN GUIDRY HUGHES AND WELCH JJ IN a KUHN J Nicholas Lorusso appeals the declaratory decision of the Board of Ethics functioning as the Supervisory Committee on Campaign Finance Disclosure the Board wherein it declared that he was not permitted to amend the report he timely submitted to the Board as required by the Campaign Finance Disclosure Act to reflect that a 30 payment by him to his campaign for election to the state 00 000 house of representatives was a loan rather than a contribution For the reasons that follow we reverse and render FACTUAL AND PROCUEDURAL BACKGROUND Rep Lorruso was the successful candidate for the Louisiana State House of Representatives District 94 in an election held on March 10 2007 On March 1 2007 candidate Lorruso filed a campaign disclosure report in accordance with La S8 R1 4Utilizing the form provided by the Board candidate Lorruso 4B 1495 disclosed that on February 11 2007 he had given his campaign a 30 00 000 payment which was identified as a contribution After his successful campaign in a letter dated August 28 2007 Rep Lorruso requested an advisory opinion from the Board He stated that he had become aware of a clerical error in his campaign disclosure report and was requesting permission to correct his report According to his letter 1 See generally La R 18 1532 S 1481 2 La R 18 1495 states in relevant part A report shall be filed for a candidate for each S 4 4B regularly scheduled election in which the candidate participates according to the following schedule Each candidate shall file a report no later than the tenth day prior to the primary election which shall be complete through the twentieth day prior to the primary election 2 Specifically on February 11 2007 I wrote a personal check out of my private checking account in the amount of 30 to my 00 000 campaign fund The amount of my personal check was duly recorded on the Summary Page of my campaign disclosure report However this 30 was erroneously listed on Schedule A1 as a 00 000 contribution when in fact it should have been properly designated as a personal loan to my campaign fund on Schedule B Therefore I respectfully request that I be allowed to file a Supplemental Candidate Report to properly reflect on Schedule B s that the 30 personal check I wrote out of my private checking 00 000 account was in fact a loan instead of a contribution In response to his letter the Board issued an advisory opinion on September 14 2007 concluding that the Campaign Finance Disclosure Act prohibited amendment of the campaign disclosure report Rep Lorruso had timely filed before the election In so concluding the Board reasoned that any amendment and since the information would have been repayment would result in a violation inaccurately reported at a time it was pertinent to the voters Rep Lorruso filed a motion for reconsideration on December 21 2007 A minute entry in the record notes that on December 18 2009 the Board affirmed its earlier decision On May 12 2010 Rep Lorruso emailed the Board and requested a declaratory opinion regarding the recent finding on his request to amend his campaign disclosure report The request was taken up at a public hearing held on June 18 2010 A majority of the Board voted to reaffirm the earlier decision declining Rep Lorruso request On November 19 2010 a written opinion was s issued in conformity with the Board sruling Rep Lorruso timely appealed 3 The record does not contain notice of mailing of the Board opinion In his Notice of s Appeal Rep Lorruso represents that he received written notice on January 5 2011 and that his motion is timely See La R S 42 cross referencing 1142A which allows an appeal to 1D 1141 this court if application to the B is made within thirty days after the decision of the oard oard B becomes final The Board has conceded the timeliness of Rep Lorusso sappeal 3 VIABILITY OF THE APPEAL The Board asserts that this court is without authority to review its declaratory opinion in this matter Relying on Duplantis v Louisiana Board of Ethics 2000 1750 P 1 La 3 782 So 582 583 in which the Louisiana Supreme Court 01 23 2d considered whether it was proper for the court of appeal to review advisory opinions issued by the Board and held that the appellate courts are without jurisdiction to review such advisory opinions the Board suggests that the declaratory opinion it issued on November 19 2010 was in actuality an advisory opinion As such it urges the decision is not one that is reviewable by this court The Board buttresses its contention by asserting that the declaratory opinion before us merely provides advice to Rep Lorusso and therefore is subject to the Duplantis holding claiming that it 1 does not present a justiciable controversy 2 is not a ruling that is enforceable by Rep Lorusso 3 does not include any factual findings based on an investigation and adversarial hearing and 4 does not fall within the scope of the ambit of the Board constitutional authority s In reaching its conclusion that advisory opinions are not reviewable by the courts of appeal the Duplantis court examined the constitutional grant of power in La Const art X 21 which permitted the legislature to enact the Code of Ethics That provision states in relevant part that d of a board shall be ecisions appealable and the legislature shall provide the method of appeal 20001 at p 750 8 782 So at 587 2d The Duplantis court explained that an advisory opinion is usually initiated by correspondence rendered on a set of facts for which there is no investigation or adversarial hearing and leaves the applicant in no different position than before the issuance of the Board advice 20001750 at pp 8 9 782 So at s 2d 4 587 88 The Duplantis court contrasted the procedures required before the Board can find a violation of the Code of Ethics Those include among other things commencement by a sworn complaint notice and an investigation of the charges a public hearing legal representation of the accused the right to cross examine and call witnesses and the right to present evidence and the imposition of a wide range of penalties 2000 1750 at pp 910 782 So at 588 Based on these differences 2d the Duplantis court concluded that advisory opinions were not decisions under La Const Art X 21 2000 1750 at pp 8 14 782 So at 588 91 Looking at the 2d provisions of La R 42 set forth in Part III entitled Administration S 1142 Procedure and Enforcement of the Code of Ethics which provided the procedure for appellate review of decisions of the Board the Duplantis court determined the provision of La R 42 stating that a advisory opinion issued to any S 1142 ny person or governmental entity by the board or panel jurisdiction of the appellate court is subject to the supervisory was unconstitutional 20001750 at pp 13 14 782 So at 591 2d 1 the Subsequent to Duplantis by Acts 2008 1 st Ex No 24 Sess legislature amended the provisions of La R 42 S 1142 La S R 1142A 42 presently provides in relevant part Whenever action is taken against any public servant or person by the board or panel or by an agency head by order of the board or panel or whenever any public servant or person is aggrieved by any action taken by the board or panel he may appeal therefrom to the Court of Appeal First Circuit if application to the board is made within thirty days after the decision of the board becomes final Any refusal by the board or panel to issue a declaratory opinion or any preliminary procedural or intermediate action or ruling by the board or panel is subject to the supervisory jurisdiction ofthe appellate court as provided by Article V Section 10 of the Constitution of Louisiana Emphasis added 5 The legislature simultaneously modified Part III Administration Procedure and Enforcement of the Code of Ethics by enacting La R 42 which S 1141 1 addresses Declaratory opinions According to these provisions A Upon application of a public servant other person or agency board may declare rights status and other legal relations established by the provisions ofthis Chapter or by any other law within the its jurisdiction or under opinions issued by the board either before or after there has been a breach thereof The applicant may seek to have the board determine any question of construction or validity arising under the provisions of this Chapter or by any other law within its jurisdiction B The board power to declare rights status or legal relations s established by the provisions of this Chapter or by any other law within its jurisdiction or under opinions issued by the board or the construction of said laws or opinions is not limited or restricted to any proceeding where a declaratory opinion is sought in order to terminate a controversy or remove an uncertainty C The purpose of a declaratory opinion is to settle and afford relief from uncertainty and insecurity with respect to rights status and other legal relations established by the provisions of this Chapter or by any other law within the board jurisdiction or under opinions issued s by the board or the construction ofsaid laws and opinions D A declaratory opinion is a decision of the board The decision of the board on an application for a declaratory opinion shall be rendered after a public hearing and only after the requesting party all other interested parties and the board staff have been afforded full s and complete opportunity to present evidence testimony and argument A declaratory opinion of the board shall be considered a final decision and shall be reviewable by the Court of Appeal First Circuit pursuant to R 42 S 1142 E The board may refuse to render a declaratory opinion where such opinion if rendered would not terminate the uncertainty or controversy giving rise to the proceeding F When a declaratory opinion is sought the public servant other person or agency as necessary and appropriate for the rendition of a declaratory opinion who has or claims any interest which would be affected by the opinion shall be made a respondent and given notice of the request and of all public hearings conducted pursuant to the request 0 G The procedures for seeking a declaratory opinion and for the public hearing on such request shall be provided by rule adopted by the board pursuant to the Administrative Procedure Act We initially point out that despite the bequest of power given by the legislature in Subsection G of Article 1141 permitting the Board to adopt rules to 1 govern the procedure for applicants seeking a declaratory opinion we have found none But the record establishes that the Board took up Rep Larusso request for s a declaratory opinion in a public hearing conducted on June 18 2010 Mindful that the legislature did not otherwise define declaratory opinions in the Code of Ethics we turn to the Louisiana Code of Civil Procedure for guidance See La C art 11 technical terms must be given their technical meaning when the law involves a technical matter and art 13 laws on the same subject matter must be interpreted with reference to each other La C art 1871 explains the grant of P authority given to the courts to render declaratory judgments stating Courts of record within their respective jurisdictions may declare rights status and other legal relations whether or not further relief is or could be claimed No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for and the existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate The declaration shall have the force and effect of a final judgment or decree Declaratory judgments may be rendered whether or not further relief is or could be claimed La C art 1871 Nevertheless a declaratory judgment has the force P and effect of a final judgment or decree and may serve as the basis for a petition seeking further relief See La C arts 1871 and 1878 P The court may refuse however to render a declaratory judgment or decree 4 Thus we pretermit review ofthe propriety of Rep Lorusso srequest for a declaratory opinion by email 7 where such judgment or decree if rendered will not terminate the uncertainty or controversy giving rise to the proceeding La C art 1876 Our jurisprudence P has limited the availability of declaratory judgments by holding that courts will only act in cases of a present justiciable controversy and will not render merely advisory opinions Church Point Wholesale Beverage Co Inc a Tarver 614 2d So 697 701 La 1993 A justiciable controversy is a real and substantial controversy admitting of specific relief through a decree of conclusive character Am Waste Pollution Control Co v St Martin Parish Police Jury 627 So 158 161 La 1993 It has 2d been generally defined as a dispute between adverse parties with opposing claims ripe for judicial determination involving specific adversarial questions asserted by interested parties based on existing facts Prator v Caddo Parish 2004 0794 p 6 La 12 888 So 812 816 04 1 2d In the context of declaratory judgment a justiciable controversy must involve uncertain or disputed rights in an immediate and genuine situation and must be a substantial and actual dispute as to the legal relations of parties having real adverse interests Steiner v Reed 20101465 P 6 La App 1st Cir 2 57 So 11 11 3d 1188 11 92 Such a justiciable controversy must be distinguished from one that is merely hypothetical or abstract or one presenting an issue that is academic theoretical or based on a contingency that may or may not arise Id In this case we conclude that Rep Lorusso has presented a justiciable controversy insomuch as it is a request for a determination of his right to amend his campaign disclosure report ia request for resolution of an uncertain right and a e demand for relief presented in an immediate and genuine situation 8 Without an opportunity to amend his campaign disclosure report to indicate that the 30 00 000 payment was a loan rather than a contribution Rep Lorusso is unable to raise funds to reimburse his patrimony for that payment opportunity to amend Rep More importantly without an ostensibly fails to accurately disclose Lorusso information required to be reported under the Campaign Finance Disclosure Act A ruling in favor of Rep Lorusso would terminate the litigation Hence resolution of the issue of whether he is entitled to amend his campaign disclosure report constitutes a substantial and actual dispute as to the legal relations between Rep Lorusso and the Board each of whom has a real and actual interest in the resolution of the issue raised in Rep Lorusso srequest for declaratory relief Applying the present provisions of the law we conclude that we have jurisdiction to review the declaratory opinion issued on November 19 2010 because as a declaratory opinion which presents a justiciable controversy it is appealable under La R S 1 1141 42 D Accordingly we turn to our review of the merits of Rep Lorusso s justiciable controversy DECLARATORY RELIEF As set forth by the Board in its opinion the issue under review is whether Rep Lorusso may amend his campaign disclosure report filed on March 1 2007 to represent that the receipt of a 30 payment he made to his campaign was a 00 000 loan rather than a contribution as he indicated at the time he filed it In deciding that Rep Lorusso may not do so the Board relied on the provisions of La R S 18 1495 4to conclude that Rep Lorusso was required to file a campaign disclosure 5 If the opinion issued on November 19 2010 were not a declaratory opinion within the specifications set forth in La R 42 then it is an implicit refusal by the Board to issue a S 1141 1 declaratory opinion which under La R 42 would be subject to this court supervisory S 1142 s jurisdiction 9 form that under La R 18 S 1495 4the report was required to contain 5B information on the contributions received during the reporting period including the name and address of each person who contributed the aggregate amount of all contributions as well as the value of all inkind contributions received during the reporting period and that under La R 1 the report was required to S8 9 5B 1495 contain the date and amount of each loan made or received by the candidate along with the name and address of the lender The Board concluded that an amendment to allow Rep Lorusso to change the designation of the 30 payment he made to his campaign from a contribution 00 000 6 La R 18 provides in relevant part S 1495 5B Each report required to be in conformity with this Section shall contain the following information 4 Contribution sreceived during the reporting period for which the report is being completed shall be reported and the same shall be reported irrespective of the amount thereof as follows a The full name and address of each person who has made one or more contributions to and which have been received and accepted by the candidate during the reporting period the aggregate amount of such contributions except in kind contributions from each person and the date and amount of each such contribution and a brief description of each inkind contribution from each person the valuation thereof made by the candidate and the campaign treasurer and the date of the inkind contribution s b The aggregate amount of all contributions other than in kind contributions received and accepted during the reporting period c The aggregate valuation of in kind contributions received during the reporting period 9 The date and amount of each loan for campaign purposes made or received by the candidate to or from any person or political committee during the reporting period together with the full name and address of the lender of the recipient of the proceeds of the loan and of any person who makes any type of security agreement binding himself or his property directly or indirectly for the repayment of all or any part of the loan See also La R 18 defining a contribution and specifically providing that a S 1483 6 contribution does not include a loan and La R 18 defining a loan S 1483 10 10 to a loan apparently would ipso facto result in a finding of a violation of the duty a candidate has under La R 18 accurately disclose information required S 1505 1to to be reported to the Board as well as the imposition of civil penalties under La R S 4B 1505 18 8 In reaching its conclusion that Rep Lorusso cannot amend his report after the election to now disclose the receipt of a loan to his campaign the Board reasoned that the campaign disclosure report filed prior to the election discloses to the public and the electorate the identity of who is funding a candidate scampaign and what expenditures have been made with such funds At this juncture we point out that under the statutory duty of La R S 1 1505 18 having indicated that the information provided in his campaign disclosure report inaccurately disclosed the nature of his 30 payment Rep 00 000 Lorusso is apparently already subject to a potential violations complaint simply by requesting whether he is entitled to amend his report because the request itself points out the inaccuracy of the information he reported If he is not permitted to amend he has violated La R 18 because of his failure to disclose S 1505 1 accurately any information required to be reported by this Chapter By denying Rep Lorruso an opportunity to amend his campaign financial disclosure report the La R 18 states Failure to disclose or failure to disclose accurately any S 1505 1C information required to be reported by this Chapter shall constitute a violation of this Chapter 8 La R 18 provides in relevant part S 1505 4 B Any candidate or any other person required to file reports under this Chapter who knowingly and willfully fails to disclose or knowingly and willfully fails to accurately disclose any information required by this Chapter to be disclosed in the reports required herein may be assessed a civil penalty for each day until such information is disclosed by amendment to the appropriate report of such candidate political committee or other person Knowingly and willfully for purposes of this Subsection means conduct which could have been avoided through the exercise of due diligence 11 Board itself becomes an instrumentality in the continued inaccuracies contained in the campaign disclosure report Our review of the law has led us to the Louisiana Administrative Code Title 52 entitled Ethics which contains in Chapter 16 entitled The Board as Supervisory Committee of the Louisiana Campaign Finance Disclosure Act 1606 addressing registration and reporting as well as incomplete and incorrect forms Section 1606 promulgated in accordance with La R 42 states in S 11 34A pertinent part A The staff may without board action request additions and corrections to any report filed by a candidate or other person which would constitute a minor violation of the Campaign Finance Disclosure Act However the staff shall report any uncorrected or material violations of the Campaign Finance Disclosure Act to the oard B While it is evident that this rule does not directly address the situation that Rep Lorusso has presented implicit in its provisions is a procedure to permit additions and corrections to any report filed by a candidate We have however found no provisions in either the rules duly promulgated by the Board under its rulemaking powers see La R 42 and La R 18 or in the statutory scheme S 1134A S 1141 1G 9 La R 42states S 1134A 1 The board may adopt amend repeal and enforce rules and regulations in the manner provided by the Administrative Procedure Act to carry out the provisions and purposes of this Chapter and any other law within its jurisdiction Footnote omitted The board provide for procedural rules governing the establishment and implementation of time periods for the dismissal of a complaint the filing of a formal charge the notification of the parties of the rendition of a decision and the assessment of penalties 2 shall 10 Staff is defined in 101 of Chapter 1 of Title 52 as the ethics administrator the executive secretary and the employees of the Ethics Administration Program And Ethics Administration Program is defined in that same section as the unit of the Department of Civil Service and those employees who provide staff support for the Booard 12 adopted by the legislature which expressly provide a procedure for amending a timelyfiled but inadvertent and therefore inaccurate representation in a campaign disclosure form Since nothing in La R 18 or 1495 prohibits an amendment of a S 1495 4 5 campaign disclosure report and in light of the Board rule in 1606 of Title 52 of s the Louisiana Administrative Code which implicitly suggests that a procedure exists to permit additions and corrections to any report filed by a candidate because the failure to modify his campaign disclosure report to accurately reflect the requisite information mandated under La R 18 appears to constitute a S 1495 513 violation of the Code of Ethics we conclude that Rep Lorusso is permitted to amend his report In so concluding we do not express any opinion on either the propriety of the Board instituting violation charges against Rep Lorusso or the potential disposition of those charges should they duly be pursued against him in accordance with La R 18 and 1511 as well as S 1505 413 5 701 708 of the Louisiana Administrative Code Title 52 Chapter 7 entitled Complaints and any other applicable procedure relative to an alleged violation of the Code of Ethics involving an application of the Board burden of proof in a properly instituted s hearing conducted in accordance with due process DECREE For these reasons we find that Rep Lorusso may amend his March 1 2010 campaign disclosure form to accurately reflect the information he must disclose in the report he filed in conjunction with his campaign for the Louisiana State House of Representatives District 94 for an election held on March 10 2007 The s Board declaratory opinion is reversed Appeal costs in the amount of 391 are 16 13 assessed against the Board of Ethics functioning as the Supervisory Committee on Campaign Finance Disclosure REVERSED AND RENDERED 14 STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2011 CA 0666 IN RE NICHOLAS J LORUSSO GUIDRY J dissents with reasons GUIDRY J dissenting I respectfully disagree based on the facts and circumstances of this case that Rep Lorusso is entitled to amend his campaign finance disclosure form Title 52 Section 1606 of the Administrative Code states that staff may request additions and corrections to any report which would constitute a minor violation of the Campaign Finance Disclosure Act but shall report any uncorrected or material violations of the Campaign Finance Disclosure Act to the Board Therefore I disagree that implicit in this provision is a procedure requiring the staff to permit additions and corrections to any report Rather it seems that the staff has discretion if they are presented with a minor violation but material violations shall be reported to the Board Further at the Board hearing the ethics administrator noted that Mr Lorusso failed to present any corroborating evidence to the Board of human error in filling out the form other than his assertion in his requests to the Board that the 30 was actually intended to be a loan rather than a 00 000 contribution Accordingly absent any law to the contrary and particularly given the policy behind the enactment ofthe Campaign Finance Disclosure Act I find no abuse of the Board discretion in affirming the conclusion in its advisory opinion s that Mr Lorusso may not materially amend his finance report to reflect the 00 000 30 contribution as a loan
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