COMPLAINT FOR DECLARATORY JUDGMENT AND...

PEST Committee, et al v. Ross Miller, the Secretary of State Complaint for Declaratory Relief

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LAW OFFICES OF KERMITT L. WATERS

Kermitt L. Waters, Esq. Nevada Bar No. 2571 704 South Ninth Street Las Vegas, Nevada 89101 Telephone: (702) 733-8877 Facsimile: (702) 731-1964

Attorney for Plaintiffs

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

) PEST COMMITTEE, a Nevada Ballot Advocacy ) No. Group; TONY BADILLO, an individual; JACK ) LIPSMAN, an individual; AL MAURICE, an ) COMPLAINT FOR DECLARATORY individual, ) JUDGMENT AND INJUNCTIVE ) RELIEF Plaintiffs, ) vs. ) ) ROSS MILLER, in his official capacity ) as Secretary of State for the State of Nevada. ) ) Defendant. ) )

INTRODUCTION

1. In the 2008 election cycle in the State of Nevada, twelve different initiative petitions were

filed by citizens groups attempting to amend the Nevada Constitution or the Nevada Statutes. All

twelve were challenged by political opponents claiming that the Secretary of State should not

certify any of the proposed initiatives, and not one is currently left standing. All twelve were

challenged as violating the provisions of Nevada Revised Statutes (hereinafter NRS) § 295.009.

NRS §295.009 requires that a proposed initiative petition not be more than one subject, and that it

must include a description of effect that is not more than 200 words. Because there are no


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standards as to what constitutes a single subject, and because citizens groups fear fighting court

battles against powerful special interest groups who can afford to wage a perpetual expensive

legal fight, and then they request attorney’s fees and costs against the citizen groups, plaintiffs

bring this action under the First and Fourteenth Amendments to the United States Constitution.

2. Plaintiffs claim that NRS §295.009’s continued enforcement by the Secretary of State

violates the Free Speech Clause of the First Amendment, the right to Freedom of Association, the

right to Petition the Government for a redress of grievances. Plaintiffs also claim that NRS §

295.009’s definition of a single subject is overbroad, vague and ambiguous, and that it’s

continued enforcement constitutes a Prior Restraint against free speech. Because of the legal

harassment, costs, and uncertainty of whether they can survive a legal challenge, many citizen

groups, such as the Plaintiffs, forego from fear their right to file and circulate an initiative

petition, rather than exercise their Free Speech rights to do so. The continued enforcement by the

Nevada Courts and the Secretary of State of the NRS §295.009 and NRS §295.061 severely chills

free speech, because Plaintiffs and citizen groups have learned by experience that they are almost

certain to be challenged in state court and lose claiming that their initiative petition covers more

than one subject, no matter how it is worded. Ironically, under the Nevada single subject statute,

the First Amendment to the United States Constitution would violate the single subject standard

of Nevada, since it contains five different clauses; freedom of religion, freedom of speech,

freedom of the press, freedom of association and the right to petition the government for a redress

of grievances.

3. Plaintiffs PEST Committee had previously filed an initiative petition known as Prevent

Employers from Seizing Tips (PEST I) and were challenged in state court by Wynn Resorts LLC,

the Nevada Restaurant Association, the Nevada Manufacturer’s Association and a host of other


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business groups. On March 11, 2008, Plaintiffs attempted to remove their case to federal court.

Four months later, on July 15, 2008, the federal court remanded the case back to state court.

Wynn Resorts LLC and the other business groups filed a motion requesting attorney’s fees for

being the prevailing party in federal court. They demanded that the initiative petition be dropped.

(See Exhibit 1, Motion for Attorney’s Fees by Nevada Restaurant Association, Wynn Resorts

LLC, et al v. PEST Committee, et al. filed on July 29, 2008.) They were willing to drop their

Motion for Attorney’s Fees, if the PEST Committee was willing to withdraw the initiative with

the Secretary of State.

JURISDICTION AND VENUE

4. The Plaintiffs bring this action for Declaratory and Injunctive relief pursuant to 28 USC

§§ 2201 and 42 USC §1983 and 42 USC § 1985 requesting this Honorable Court to declare

Nevada Revised Statutes (NRS) §§295.009 and 295.061 in violation of the First and Fourteenth

Amendments to the United States Constitution. The plaintiffs also ask this Court enjoin the

statute’s enforcement by the Secretary of State and the state courts of Nevada.

5. Because this cause of action is based upon a federal constitutional claim, this Court has

jurisdiction pursuant to 28 USC §§§ 1331, 1343(a)(3) and (a)(4).

6. If this Court does not accept jurisdiction, Plaintiffs right to exercise their First Amendment

rights in the form of filing an initiative petition will prejudiced, because the state courts of Nevada

have already determined that that NRS 295.009 is constitutional and does not infringe on

Plaintiffs First Amendment rights under the United States Constitution. The deadline to submit

those signatures for verification is November 11, 2008, that is, one week after the general

election.

7. Venue is proper in the District of Nevada pursuant to 28 USC §1391.

8. Because this cause of action involves no claim for damages, but only a request for

declaratory and prospective injunctive relief, the Eleventh Amendment does not bar this civil

action. See, Culinary Workers Union v. Del Papa, 200 F. 3rd 614, 619 (9th Cir. 1999).


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9. These statutes have already harmed protected speech and continue to affect the political

speech of these parties, therefore, a case and controversy exists for which the PEST Committee

has standing to bring this civil action. See SOC v. County of Clark, 152 F. 3rd 1136, 1143 (9th

Cir. 1998) amended 160 F. 3rd 541 (9th Cir. 1998).

THE PARTIES

10. The PEST COMMITTEE is a ballot advocacy group organized for proposing a ballot

initiative for the 2008 general election. The committee members filed the proper paperwork with

the Secretary of State on January 5, 2008. The PEST Committee filed their first proposed

initiative, Prevent Employers from Seizing Tips on January 16, 2008. As mentioned above, they

withdrew their initiative petition, made changes to it, and then re-filed it on September 17, 2008.

11. Tony Badillo is the Chairman of the ballot advocacy group. Tony Badillo is the head of

the International Union of Gaming Employees and is a retired casino dealer.

12. Al Maurice is also one of the organizers of the PEST Ballot Advocacy Group. Al Maurice

currently works as a dealer at the Mirage Hotel and Casino.

13. Jack Lipsman is the last organizer of the PEST COMMITTEE. He too is a retired casino

dealer, since all the dealers currently working at Wynn Resorts LLC are afraid they will lose their

jobs, if they exercise their Free Speech rights to engage in the initiative process attempting to

change the law regarding their tips that are being taken.

14. Ross Miller, hereinafter, the Defendant, is the Secretary of State for the State of Nevada.

He is sued in his official capacity as the Secretary of State.

STATEMENT OF FACTS

15. On January 16, 2008, the PEST Committee filed a proposed initiative entitled; “Prevent

Employers from Seizing Tips” (PEST) with the Secretary of State of Nevada, Ross Miller. (See


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Exhibit 2, Pest Initiative I). Within 15 business days of filing their petition and using the unique

standing given to them by NRS § 295.061, the PEST Committee was sued in state court by Wynn

Resorts, the Nevada Restaurant Association and other powerful business groups to prevent the

PEST Initiative from being placed on the ballot. Wynn Resorts LLC is the only casino in Nevada

that currently takes tips that are given directly to its employees.

16. NRS §295.061 allowed these business parties the authority to act under color of state law.

Wynn Resorts and their business allies alleged that the proposed initiative petition was in

violation of NRS §295.009. These groups claimed that the proposed initiative contained more

than one subject, which it did not. They also claimed that the description of effect on the proposed

initiative was misleading, which it was not. The state court plaintiffs further claimed that the

initiative somehow called for an increase in government spending without including a necessary

tax provision as required by Nevada Constitution Article 19, section 6, which it did not.

17. Lastly, the state court plaintiffs alleged that the proposed initiative was unconstitutional on

its face, and violated the Equal Protection Clause of the 14th Amendment of the U.S. Constitution,

which it did not. They claimed, that if enacted, the proposed initiative would create two classes

of employers: employers who would be eligible to receive tips, and those who would not be

eligible to receive tips. Without the provisions of NRS 295.061, groups opposing an initiative

petition prior to an election would have no standing to make a pre-election challenge.

18. As already mentioned above, based upon this allegation of a Federal Question in the

Wynn Resort’s group state court complaint, the PEST Committee filed a Notice of Removal to

Federal Court on March 11, 2008. The Secretary of State and the state court plaintiffs opposed

removal to federal court and filed a Motion to Remand the case back to state court. Twice, the

Federal Judge in Reno had the issue of removal jurisdiction briefed, and specifically asked


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questions about the equal protection federal claims that had been raised by the state plaintiffs. On

July 15, 2008, the Federal District Judge granted the Motion to Remand the case back to state

court.

19. The remand order reasoned that courts, both state and federal, were reluctant to accept pre-

election challenges to initiative petitions, since they wanted to avoid the practice of issuing

advisory opinions on initiatives that might not ever be approved by the voters. In none of the

cases cited by the Federal Judge was there a procedure like NRS 295.061 giving an automatic

right to file a pre-election challenge. Since the federal removal jurisdiction was contingent on the

state court complaint by Wynn Resorts LLC and the other business parties, the Federal Judge

stated that their federal pre-election challenge was without merit, and remanded the case to state

court. The Court also ruled that in a minority of jurisdictions, courts would accept a pre-election

challenge “if” a proposed initiative was unconstitutional on its face. The Wynn Plaintiffs had

alleged in the federal count, that the PEST initiative was unconstitutional on its face.

20. As previously stated above, on July 29, 2008, the Wynn Resorts plaintiffs filed a Motion

in federal court for Attorney’s Fees, based upon the attempt by the PEST Committee to remove

the case to Federal Court. The Motion for Removal was based upon the federal claim that the

state court plaintiffs had asserted. On August 9, 2008, the PEST Committee agreed to withdraw

their initiative petition in order to have the Motion for Attorney’s Fees withdrawn. (See attached

Exhibit 3, Withdrawal of Initiative Petition). Because the PEST Committee members have

limited financial resources, they feared a large judgment against them for attorney’s fees and

costs, and therefore they agreed to drop their initiative petition. On August 13, 2008 the Motion

for Attorney’s fees was withdrawn, and the Federal Judge signed the order dismissing the request

for Attorney’s fees.


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21. In order to remove one of the colorable objections by one of the state court plaintiffs, the

PEST Committee amended their original initiative petition and re-filed it on September 17, 2008.

( See Exhibit 4, Prevent Employers from Seizing Tips II). The new initiative petition is similar to

the petition they filed on January 15, 2008. Plaintiff PEST Committee expects with 100%

certainty, that they will be immediately sued in state court by the same parties who will again

complain they are violating the Single Subject Rule or that the 200 word Description of Effect is

somehow misleading no matter how simple or clearly that it is worded.

22. This complaint is an action seeking declaratory and injunctive relief and challenges the

sweeping and irrational restrictions on the ability of private citizens to file initiative petitions in

the State of Nevada to exercise their political speech. This is an overbreadth and vagueness

challenge to NRS 295.009 and NRS 295.061. This is also a facial constitutional challenge under

the Free Speech clause of the First and Fourteenth Amendment to the United States Constitution

alleging that the initiative and referendum process has been stifled by the above cited statutes.

The Single Subject Rule has caused a “chilling effect” among plaintiffs and other citizens wishing

to propose “content based” changes to Nevada Law. These particular Nevada statutes fail to

provide proper notice of what is permitted or what is prohibited, leaving persons of common

intelligence to guess as to the meaning and application of those standards. This “chilling effect”

creates an impermissible risk of suppression of speech by delegating overly broad discretion to

state officers. For example, the various decisions in state court interpreting NRS 295.009 are so

irrational as to defy the normal understanding of the English language. These decisions give no

guidelines to any citizen wishing to exercise political speech through the political process.

23. The application of these statutes under color of state law also constitute a “prior restraint”

on core “political speech” for PEST and other citizen groups who wish to file and circulate


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initiative petitions to make changes in Nevada Law. These statutes also infringe the Free Speech

rights of citizens wishing to receive the arguments about initiative, to exercise their rights by

signing the initiative petition, and then to vote on the initiative at the subsequent election.

24. Plaintiffs allege violations of plaintiff’s rights of freedom of association as guaranteed by

the First Amendment, and they allege also violations of their Due Process Rights under the

Fourteenth Amendment to the United States Constitution.

25. Since the passage of NRS 295.009 and NRS 295.061 in June 2005, almost every initiative

proposed by private citizens, has been challenged and removed in total or in part under a theory,

that the subject matter or content of the proposed initiative, involved more than a single subject.

NRS 295.061 gives unique standing and authority to any person opposed to the proposed

initiative the right to challenge that initiative from appearing on the ballot by suing in the First

Judicial District Court based in Carson City, Nevada. Defending a lawsuit in Carson City is a

very inconvenient forum and very expensive for most of the residents of this state. This right to

challenge takes place before the signatures are submitted to the Secretary of State for verification

and prior to the election.

26. Citizen groups like PEST fear that if the District Judge, or thereafter, the State Supreme

Court, changes one word in the initiative petition, then all the signatures gathered so far would

have been gathered in vain, and they will have to start the signature gathering process all over

again. Plaintiffs groups like PEST are still subject to further legal challenges from their

opponents, such as a challenge to the new language, or after the signatures are submitted, a

challenge to the “legal sufficiency” of the signatures. The threat of a legal challenge is always

looming over their head.


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27. For the appellate record, the First Judicial District is the district where the state capital is

located. It is the district where the Secretary of State has his principal business location. The

First Judicial District only has two district court judges. These two judges have no special

training in election law, and have no additional expertise over any other state court judge, which

they readily admit in their own decisions.

28. There are no clear and definite standards and guidelines under NRS 295.009 to help

determine whether the political speech in an initiative involves more than a single subject under

NRS 295.009. If the state District Court Judge concludes without any guidelines or standards

that the proposed initiative involves more than one subject, then the initiative is ordered removed.

The same process takes place at the Nevada Supreme Court. This lack of guidance or standards

creates an impermissible risk of suppression of ideas.

A. History of the Single Subject Rule (NRS 295.009)

29. Nevada Revised Statutes §§ 295.009 and 295.061 states as follows:

“NRS 295.009 Requirements for petition: Must embrace one subject; must include description. 1. Each petition for initiative or referendum must: (a) Embrace but one subject and matters necessarily connected therewith and pertaining thereto; and (b) Set forth, in not more than 200 words, a description of the effect of the initiative or referendum if the initiative or referendum is approved by the voters. The description must appear on each signature page of the petition. 2. For the purposes of paragraph (a) of subsection 1, a petition for initiative or referendum embraces but one subject and matters necessarily connected therewith and pertaining thereto, if the parts of the proposed initiative or referendum are functionally related and germane to each

other in a way that provides sufficient notice of the general subject of, and of the interests likely to be affected by, the proposed initiative or referendum.” (emphasis added). (Added to NRS by 2005, 2837) “NRS 295.061 Challenge to description of petition; challenge to legal sufficiency of petition. 1. Except as otherwise provided in subsection 3, whether an initiative or referendum embraces but one subject and matters necessarily connected therewith and pertaining thereto, and the description of the effect of an initiative or referendum required pursuant to NRS 295.009, may be challenged by filing a complaint in the First Judicial District Court


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not later than 15 days, Saturdays, Sundays and holidays excluded, after a copy of the petition is placed on file with the Secretary of State pursuant to NRS 295.015. All affidavits and documents in support of the challenge must be filed with the complaint. The court shall set the matter for hearing not later than 15 days after the complaint is filed and shall give priority to such a complaint over all criminal proceedings.

2. The legal sufficiency of a petition for initiative or referendum may be challenged by filing a complaint in district court not later than 7 days, Saturdays, Sundays and holidays excluded, after the petition is certified as sufficient by the Secretary of State. All affidavits and documents in support of the challenge must be filed with the complaint. The court shall set the matter for hearing not later than 15 days after the complaint is filed and shall give priority to such a complaint over all other matters pending with the court, except for criminal proceedings. 3. If a description of the effect of an initiative or referendum required pursuant to NRS 295.009 is challenged successfully pursuant to subsection 1 and such description is amended in compliance with the order of the court, the amended description may not be challenged.” (Added to NRS by 1999, 3560; A 2005, 2839; 2007, 326, 1251)

30. The original Constitution of the State of Nevada was approved by the residents of Nevada

in 1864. As part of the original constitution, Section 16 to the Nevada Constitution provided for

procedures to amend the Constitution, but in the original Nevada Constitution, the only avenue to

amend the Constitution was through the state legislature. Article 16, Section 1 provided that any

amendments to the Nevada Constitution would originate in the Senate or Assembly, and if

approved by a majority of each house, would then be sent to the residents of the state for approval

by the voters at the next statewide general election. Constitutional amendments beginning in the

state legislature are required to be approved by two successive legislative sessions, and require

approval by the voters just once.

31. In 1912, in response to the political abuses by the railroad companies in the United States,

and in particular, California and Nevada; Article 19, sections 2 and 3, were added to the Nevada

Constitution. These sections provided for the citizens of Nevada to propose their own

amendments to the state constitution, and not have to wait for their elected legislators to act on

amending the constitution. Historically, the railroad companies were known as the Robber


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Barons, controlled the politicians, and made sure that the politicians did not pass laws that

directly affected their business interests. The Casino control over the politicians today seems no

different. Constitutional amendments initiated by citizens groups are required to be approved by

the voters at two succeeding general elections. Nevada is the only state in the union requiring that

constitutional amendments must be approved by the voters twice.

32. A few years earlier, in 1904, Article 19, section 1 had been approved by the citizens of

Nevada. Article 19, section 1, provided for a referendum for approval or disapproval of a statute

enacted by the legislature. This referendum power gave the citizens a veto power over a statute or

bill of which they did not approve.

33. For almost a century, the process to qualify initiative petitions in Nevada remain

unchanged until 2004, when the Americans Civil Liberties Union challenged the requirement to

obtain signatures in 13 of the 17 counties. In 2006, the Ninth Circuit affirmed this Court’s

decision striking down Nevada’s Thirteen Counties rule. See ACLU of Nevada v. Lomax, 471

F.3rd

1010 (9th Cir. 2006). In total disregard of the Federal Court’s decision at both the trial and

appellate levels, the legislature passed NRS 295.012 requiring that signatures would have to be

gathered in all 17 counties. Rather than respecting the “one-man, one-vote” principle, the

Legislature chose to make it more difficult to qualify initiative petitions to satisfy the concerns of

the mining and casino industries. Legislative responses like the 17 County Rule or the Single

Subject Rule show that the Legislature has no concern for respecting the constitutional rights of

the citizens of Nevada to genuinely engage in the initiative process. The Legislative response

also shows that they have an ongoing agenda to block the efforts of citizens to be able to make

amendments to Nevada statutes or the Nevada Constitution.

34. In 2004, two ballot initiatives were on the ballot involving drastic changes to medical


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malpractice lawsuits limiting “pain and suffering damages.” One petition was sponsored by a

group of trial lawyers. Another initiative was sponsored by doctors and insurance companies.

Both initiatives were long and confusing, but at the statewide general election in 2004, the voters

read through all the confusing language and political attacks, and voted down both measures.

Using the confusion of these two ballot initiatives as a pretext to reform the initiative process, the

Nevada Legislature passed Senate Bill 224. When signed by Governor Kenny Guinn, SB 224

became NRS 295.009 and 295.061 requiring that initiatives proposed by the citizens pursuant to

Article 19, sections 2 and 3, would be required to embrace one subject, and also that a description

of effect would be required.

35. Although the provisions of Article 19 of the Nevada Constitution contained many

detailed provisions, no where in the Nevada Constitution was there a restriction that when

citizens are attempting to propose an amendment to the constitution or the Nevada Statutes,

that it would be limited to one subject. With the passage of SB224, the Nevada Legislature

attempted to amend the Nevada Constitution by statute, circumventing the amendment process

that required that any amendments to the Nevada Constitution had to be approved by a vote of

the people.

36. The Nevada Legislature is required by the Nevada Constitution, Article 4, section 17, that

“each law enacted by the Legislature shall embrace but one subject, and matter, properly

connected therewith…” In practice, the laws passed by the legislature are defined by the Nevada

Courts by their subjects in a very broad sense, whereas laws proposed by citizens are defined by

the Nevada Courts in an irrationally narrow or specific sense. The restrictions on the Legislature

to amend the Constitution or statutes are imposed on them by the Nevada Constitution. The


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restrictions on the citizens to amend the Constitution or the state statutes are imposed by SB224, a

statute passed in 2005.

37. SB 224, authored by Senator Randolph Townsend and Assemblywoman Heidi Gansert,

when finally passed embraced three subjects. According to the legislative history and specifically

the Legislative Counsel’s Digest, SB 224 was an act relating to “elections.” The

Townsend/Gansert bill amended NRS 294A to require a nonprofit corporation to file a list of its

officers with their names and addresses with the Secretary of State, before they would be allowed

to solicit or receive campaign contributions to affect the outcome of any election. Although the

stated subject was elections, in a narrower sense, this section of SB224 could be categorized as

dealing with the subject of “campaign finance.”

38. Secondly, SB224 added a new section, NRS 295.009 so that each proposed initiative must

embrace but one subject, and matters necessarily connected therewith. In its broadest sense, this

section dealt with elections, but analyzed less abstractly, the addition of NRS 295.009 could be

classified under the subject of the “language of initiative petitions.”

39. Thirdly, SB224, also required that each petition for an initiative or referendum must include

on each page of the petition, a 200 word summary or “description of effect”. Lastly, this bill

made technical changes to the requirements of political action committees by requiring them to

provide their telephone numbers as well as their addresses before they could engage in any

action in the State of Nevada.

40. During the legislative debates, in a twist of irony, Senator Bob Beers noted that the

Legislature had just passed a bill that itself seemed a violation of the Legislature’s own single

subject rule; and secondly, he noted that it would be difficult to determine whether a proposed

initiative involved more than one subject. Also, during those debates, the Legislative Counsel,


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Ms. Brenda Erdoes justified the seeming violation of SB224 saying that proposed legislation is

to be read broadly, and that all of the subjects in SB224 could come under the category of

“Elections” or at its very narrowest, “Election Procedures.”

B. The Legal Challenges to Initiatives Using the Single Subject Rule

41. Two years ago, the sponsors of the People’s Initiative to Stop the Taking of Our Land

(PISTOL) after spending over $300,000 dollars in the signature gathering process and after

gathering 136,000 signatures, submitted their signatures to be certified by the Secretary of State.

The Secretary of State certified the legal sufficiency of the signatures presented by the PISTOL

group and was prepared to put the initiative on the ballot as Question 2.

42. As soon as PISTOL qualified for the ballot, it was challenged by a group of citizens calling

themselves, Nevadans for the Protection of Property Rights. Ironically, according to the

campaign and expense reports filed by this group which raised over $550,000 in contributions in a

single month came mostly from casinos and developers. PISTOL was challenged in state court

under a claim that the initiative violated the Single Subject rule. Ironically, PISTOL had been

written and approved by the Legislative Counsel Bureau after Assemblywoman Sharron Angle

had requested that a Property Owner’s Bill of Rights be drafted in response to the Kelo eminent

domain decision at the United States Supreme Court in June 2005. In 2006, the provisions of

NRS 295.061 allowed the challenge after the certification of the signatures, but the 2007

Legislature changed that. In 2008, the challenges under 295.009 had to be made within 15 days

of the initial filing of the initiative petition with the Secretary of State’s office.

43. In defending the state action, a constitutional challenge was raised at the Nevada Supreme

Court alleging that NRS 295.006 violated the Nevada Constitution, since the Legislature had no

right to create restrictions by passing a statute that in essence “amended” the provisions of the


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Nevada Constitution. The Nevada Supreme Court held that PISTOL violated the single subject

rule, and removed what they believed to be provisions unrelated to the subject of eminent domain.

It also held that the legislature had the right to pass legislation that “enhanced” the ability of

citizens to circulate initiative petitions. Although 295.009 clearly “restricts” the constitutional

right of citizens to amend their constitution, the Nevada Supreme Court clearly held that the

Legislature, by statute, could take away the power of citizens guaranteed to them by their state

constitution. (See Heller v. Nevadans for the Protection of Property Rights, 111 Nev. 123, 2006)

44. For the 2008 election cycle, as of the filing of this complaint, seven different groups filed

proposed initiative petitions with the Secretary of State.

45. On September 4, 2007, former Assemblywoman Sharron Angle through her group, We the

People, filed an initiative entitled: “Nevada Property Tax Restraint Initiative” (aka Nevada’s

Proposition 13). This initiative was challenged in state district court in Carson City by the AFL-

CIO claiming that it violated the 200 Word Description of Effect Rule of NRS 295.009. On

October 3, 2007, We the People withdrew their initiative to have it re-written to prevent the legal

challenge and costs associated with defending the challenge. On February 22, 2008, We the

People file a modified version of their previous initiative, naming this one; “Property Tax Reform

Initiative for Nevada.” Nearly six months passed from the time that We the People started the

process of trying to qualify a constitutional amendment for the 2008 ballot. We the People had

less than three months to gather the necessary signatures. They missed the May 20, 2008

deadline, but were able to convince the Nevada Supreme Court that the May 20th deadline was

unconstitutional.

46. After submitting the required number of signatures, they were challenged on a new ground

by the Nevada State Educators Association. This new ground claims that the signatures submitted


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did not meet the “legal sufficiency” standard, and therefore the Secretary of State should not

certify the initiative for the November 2008 election. As of this writing, just last week, a retired

District Court Judge ruled that the signatures gathered in Clark County would not be counted,

primarily because they were bound incorrectly, and for other hyper technical reasons. Since the

ballots are being printed in mid-September, the Nevada Supreme Court will not have time to

qualify the initiative for the ballot.

47. The Nevada State Educators Association filed an initiative known as “Save our Schools

with Additional Funding” on November 21, 2007. On the fifteenth day, which was the last day to

file a challenge, the Nevada Resort Association challenged the content of the language in the

initiative as violating NRS 295.009 in that it constituted more than one subject. The two alleged

subjects were first: raising the gaming tax on the casinos, and secondly, designating that the

money would be spent on education.

48. After briefs and arguments and a hearing on the matter, Justice Miriam Shearing, a retired

Supreme Court Justice sitting by special appointment as a District Judge in the 1st Judicial District

of Nevada, found that the NSEA initiative violated the Single Subject rule in that the NSEA could

not earmark where the tax revenue would be allocated, otherwise, it would be two subjects.

49. After making the changes in the language of the initiative, the NSEA re-filed their initiative

petition, and once again, the Nevada Resort Association sued to remove the Save Our Schools

initiative off the ballot. The NSEA brokered a deal with Wynn Resorts and several other casinos,

and agreed not to submit the signatures that they gathered to the Secretary of State.

50. The Ballot Advocacy Group named the People’s Amendments to Restore, Integrity,

Openness and Trust (PATRIOT) on December 12, 2007 filed two companion initiatives to

increase the tax on casinos. One initiative was entitled: It’s Time for Gaming’s Fair Share, and


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the other was named, It’s Time for Gaming’s Fair Share and Eliminate Property Taxes. On

January 4, 2008, the fifteenth and final day to mount a legal challenge, the Nevada Resort

Association sued to remove the PATRIOT Initiatives from the ballot on three grounds: (1) that the

proposed initiatives constituted a revision to the entire constitution as an unconstitutional

delegation of legislative power arguing that only the Nevada Legislature had the power to raise

taxes, (2) that the tax and spend provisions violated the Single Subject Rule, (3) that the

Description of Effect was materially false and misleading.

51. After a hearing on February 15, 2008, the Honorable William Maddox ruled that the

PATRIOT Initiatives were an unconstitutional delegation of legislative power, but more

importantly, the Court held that since the PATRIOT Initiatives attempted to direct how the money

would be spent, by attempting to earmark the spending of the money, PATRIOT had violated the

Single Subject Rule of NRS 295.009. The Court made this order, despite the fact that Article 19,

section 6 of the Nevada Constitution provides that any citizen sponsored initiative that proposes

to spend money, must also, include a necessary tax. If Article 19, section 6 of the Constitution

requires that all spending measures, must include a second clause that also includes the necessary

tax increase, then the statutory provisions of NRS 295.009 preventing two subjects in one

initiative creates an irrational, statutory Catch 22. The Honorable William Maddox did not get

to the question of whether the Descriptions of Effect were misleading. The judge also denied

PATRIOT’s request to have a jury trial on the factual issue in dispute.

52. The PEST initiative, submitted by the PEST Committee was filed on January 15, 2008. It

too was challenged in state court claiming that it violated the single subject rule, that the

description of effect is false and misleading, that it violated Article 19, section 6 of the Nevada

Constitution, and lastly, and that it violated the Fourteenth Amendment to the U.S. Constitution.


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As stated above, the PEST Committee removed the state court complaint to federal court, where

the state plaintiffs challenged the right of the federal courts to determine the legal validity of the

Fourteenth Amendment Equal Protection Claim they had raised. The federal judge declined to

hear the case, citing cases that questioned the wisdom of state and federal courts to intervene in

pre-election challenges for initiative petitions.

53. Two other groups have also filed initiative petitions since the commencement of this

lawsuit. The Clean and Open Government Amendment and the Tax Backed Lobbying Ban were

both filed on February 25, 2008 by Christopher Hansen of the American Independent Political

Party of Nevada. On February 29, 2008, the Education Enhancement Act and the Funding

Nevada’s Priorities Act were filed by former State Treasurer Bob Seale, and the Nevada

Taxpayer’s Protection Act was filed by former State Controller Steve Martin on March 5, 2008.

According to recent press reports, the last three initiatives are being financed by the Venetian

Hotel and Casino and their owner, Sheldon Adelson. These initiative petitions were also

challenged, and the state court judge ruled that they did not violate the single subject rule. On

appeal, the Nevada Supreme Court avoided the issue of the Single Subject Challenge, and instead,

ruled that the Adelson signatures had been collected on the 2006 affidavit form, which was the

wrong form and ordered that the Adelson petitions not be certified. The 2006 affidavit form had

been incorrectly provided in the 2008 Secretary of State’s handbook. The proper 2008 affidavit

form also was included in the Secretary of State’s handbook, but the Supreme Court ruled that

using the form provided by the Secretary of State was not “substantial compliance” with the

requirements of the signature gathering requirements.

54. The pattern of lawsuits prematurely to remove ballot questions before a single signature is

gathered became the norm in the 2008 election cycle.


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55. An integral part of citizen participation in democracy is the ability to be able to file an

initiative petition when all attempts to change the law through the legislative process or the courts

has failed. Proponents, such as Plaintiffs, or the other groups that are “attempting” to get

initiatives on this year’s ballot have a long history of trying to appeal to the legislative process to

seek the change in the law that they feel is necessary. With respect to PEST, they on behalf of

their members have even been trying to fight Wynn Resorts with the current version of NRS

608.160, which clearly indicates that no one, including an employer can take an employee’s tips.

The Plaintiffs on behalf of various dealers who have tried to legally challenge the practice, have

been unable to make any headway before the Administrative Law Judges and the state court

judges in Clark County.

56. Because of frustration with the legislative and judicial roadblocks that they encountered, the

PEST Committee has filed this initiative petition and this lawsuit to ask that the citizens of

Nevada be allowed to vote on whether their proposed changes to the law should be enacted.

C. The Constitutional Deficiencies of NRS 295.009 and NRS 295.061

57. The requirements of NRS 295.009 requiring that proposed initiatives be limited to a

single-subject and must include a 200 word description of effect are a prior restraint on free

speech, since it requires a permit-like restriction on content from the state court judges in Carson

City before allowing a citizen’s group to begin the signature gathering process.

58. Permit requirements and permit-like restrictions on content like NRS 295.009 that is

political speech are a burden on free expression in a public forum and a prior restraint.

59. Content-based permit requirements of NRS 295.009 on core political speech for free

expression are presumptively unconstitutional, subject to strict scrutiny and may only be justified

if narrowly tailored to a compelling government interest. Content-neutral time, place and manner


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regulations are subject to intermediate scrutiny and must leave open ample avenues of

communication, be supported by a substantial government interest, and not restrict substantially

more speech than is necessitated by that interest.

60. The Single Subject Rule of NRS 295.009 is content-based. Specifically, it restricts

proposed initiative petitions, which can only be classified as core political speech, to one subject

and matters necessarily connected therewith…if the parts of the proposed initiative or referendum

are functionally related and germane to each other in a way that provides sufficient notice of the

general subject of, and of the interests likely to be affected…” The stated justification of NRS

295.009 is to regulate the content of that political speech out of an alleged concern for its effect

upon the reader and or the listener.

61. The State of Nevada does not have a substantial or compelling government interest in

applying the permit-like restriction of 295.009 to initiative proponents, nor is there a clear and

present danger for its vague and overbroad restrictions, which are not narrowly tailored to its

asserted interests to remove PEST or any other citizen sponsored initiative from the ballot.

62. The State of Nevada has established vague and overbroad standards (e.g. matters

necessarily connected therewith…functionally related and germane to each other…) that abuses

and gives rise to strategically filed lawsuits by powerful business interests, i.e. the quasi-state

actors who are taking advantage of the vague and overbroad standards that delegate overly broad

discretion to the decision maker, such that each and every lawsuit challenging an initiative

petition creates an impermissible risk of content-based suppression of ideas.

63. The State of Nevada through NRS 295.009 and NRS 295.061 has allowed the Secretary of

State and the state court judges to remove initiatives without a compelling state interest at the

request of powerful political opponents.


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64. As allowed by NRS 295.061, within fifteen (15) days of filing an initiative petition,

sponsors of a content based initiative petition like Plaintiffs and other citizen groups are subject to

a lawsuit in the First Judicial District Court of the State of Nevada based in Carson City by

special interests opposed to the changes in the law proposed by the initiative petition. The pretext

for the lawsuits as explained above always is that the proposed language violates the Single

Subject Rule, or that the Description of Effect is false and misleading.

65. In combination, NRS 295.009 and NRS 295.061 creates special standing for any private

individual to stand in the shoes of a quasi-attorney general and challenge any proposed initiative.

Both these statutes allow “unbridled discretion” in the state court judges and the political

opponents of these initiatives to abuse these statutes and to chill the core political speech of

citizens initiatives that run counter to their own interests. These statutes permit them to target the

content of the speech and to defeat initiatives they disagree with for political reasons.

66. NRS 295.009 and NRS 295.061 places “unbridled discretion” in the state court judge to

whom the case is assigned. The decision to grant or deny permission to allow the proposed

initiative to go forward to the signature gathering process for a chance to be placed on the general

election ballot turns on the loosely defined terms of “but, one subject.. and matters necessarily

connected therewith.. (and) functionally related and germane to each other..”

67. The standards for denial for permission to gather signatures and have a content-based

initiative petition on the ballot places unconstitutional burdens on free speech in a public forum.

This lack of standards has had a “chilling effect” on Plaintiffs and on those citizen groups who are

uncertain whether they will be sued by opponents of their content based initiative. Plaintiffs and

citizens groups are “chilled” because they are uncertain how broadly or narrowly a judge will

interpret the standard of a single subject.


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68. The standards for denial for permission for Plaintiffs to gather signatures and have a

content-based initiative petition on the ballot are a prior restraint in a public forum.

69. The standards for denial for permission for Plaintiffs to gather signatures are not

supported by a substantial or compelling governmental interest and are not sufficiently narrowly

tailored to any such interest.

FIRST CLAIM FOR RELIEF

42 U.S.C § 1983/First and Fourteenth Amendments

NRS 295.009 and NRS 295.061

70. The allegations set forth in all the foregoing paragraphs are incorporated herein by

reference.

71. Plaintiffs enjoy the First and Fourteenth Amendment rights to assemble and engage in free

speech by proposing initiatives for which quasi-permit type restrictions are required under the two

Nevada statutes regarding the Single Subject Rule and the Description of Effect.

72. The acts and practices of the Defendant and his agents, were performed under color of

state law, and, therefore constitute actions of the State within the meaning of the Fourteenth

Amendment to the United States Constitution and 42 USC 1983.

73. NRS 295.009 and 295.061 provide that any person opposed to a proposed ballot initiative

may sue to remove it under a colorable theory that it encompasses more than one subject. These

statutes provide no guidelines or standards to assist the state court judges or even Defendant

Miller whether a proposed ballot question constitutes more than one subject. Thus, these two

statutes are used by the State of Nevada to delegate authority to private citizens who are adverse

political groups to arbitrarily violate the Plaintiffs’ First Amendment’s guarantee of freedom of

speech and of the right to petition the government.


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74. NRS 295.009 and 295.061 contains vague and overbroad prohibitions which, because

precision is lacking, subject Plaintiffs and other sponsors of an initiative to enforcement abuse.

75. Although these statutes purport to balance the rights of the public with those of persons

who desire to enjoy First Amendment freedoms in terms of their right to vote, they are in fact a

political mode of regulating, preventing, controlling speech, of being abused and suppressing First

Amendment rights. They lack any administrative guidelines or procedure, or any real guidance

for the state judges by which proposed initiatives can be reviewed to determine their validity.

These statutes are unconstitutional on their face and/or as applied to the Plaintiffs in this case.

76. Content-based permit requirements imposed on Plaintiffs for free expression are

presumptively unconstitutional, subject to strict scrutiny and may only be justified if narrowly

tailored to a compelling government interest.

77. Content-neutral time, place and manner regulations imposed on Plaintiffs are subject to

intermediate scrutiny and must leave open ample alternative avenues of communication, be

supported by a substantial governmental interest, and not restrict substantially more speech than is

necessitated by that interest.

78. NRS 295.009 and 295.061 as imposed on Plaintiffs are not supported by compelling or

substantial government interests.

79. NRS 295.009 and 295.061 as imposed on Plaintiffs arbitrarily restrict certain expressive

political activities without a rational basis for doing so.

80. NRS 295.009 and 295.061 as imposed on Plaintiffs are not narrowly tailored to their

asserted interests.

81. NRS 295.009 and 295.061 as imposed on Plaintiffs are vague and overbroad.


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82. NRS 295.009 and 295.061 as imposed on Plaintiffs give unbridled discretion to the state

court judges to approve or reject initiatives based upon the content of the language in the

initiative.

83. NRS 295.009 and 295.061 as imposed on Plaintiffs are not valid time, place and manner

regulations.

84. On their face and/or as applied, these two statutes are unconstitutional as to Plaintiffs

under the First and Fourteenth Amendments of the United States Constitution.

85. There is an actual controversy between the parties as herein set forth. The Plaintiffs are

suffering irreparable injury and are threatened with irreparable harm in the immediate future by

reason of the acts herein complained. A substantial loss or impairment of freedom of expression

has already occurred and will continue to occur so long as Defendant’s enforcement and NRS

295.009 and NRS 295.061 continue.

86. Plaintiffs will suffer irreparable harm and injury and have no plain, adequate or speedy

remedy at law to address the wrongs herein complained of other than this action. Any other

remedy to which Plaintiffs might receive would be attended by such uncertainties and delays as to

deny substantial relief, involve a multiplicity of suits, and cause further irreparable injury,

damage, and inconvenience to the Plaintiffs and to those similarly situated. The award of

damages is not adequate to protect them from the continuing abuse of the state judicial process

and the “chilling effect” it has upon the exercise of Plaintiffs constitutional rights.

PRAYER FOR RELIEF

87. WHEREFORE, Plaintiffs respectfully pray that this Court:

a. Assume jurisdiction over this action.


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b. Declare that the NRS 295.009 and NRS 295.061 is unconstitutional on its face and/or

as applied by the District Court Judges and that State Supreme Court of Nevada.

c. Enter a preliminary and permanent injunction against Defendant Ross Miller, their

successors and assigns, and all persons acting in concert therewith and all persons

subject to Federal Rule of Civil Procedure 65’s scope from enforcing the above

statutes or from removing the proposed initiative on the basis of NRS 295.009 and

NRS 295.061.

d. Grant leave to amend the pleadings to add additional parties if this Court later deems

are necessary for complete relief.

e. Award plaintiffs’ attorney’s fees, costs, and such other and further relief as may be just

and equitable.

f. That this Court maintain jurisdiction over the Secretary of State and all persons or

agencies of the State of Nevada acting in concert to deny the First Amendment rights

to Plaintiffs and other citizen groups in the State of Nevada wishing to exercise their

right to file an initiative petition.

g. Order such additional relief as the Court may deem just and proper.

DATED: September 17th, 2008

By:____________________________

LAW OFFICES OF KERMITT L. WATERS

Kermitt L. Waters, Esq.


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EXHIBIT 1

Motion for Attorney’s Fees by Nevada Restaurant

Association, Wynn Resorts LLC, et al v. PEST Committee, et

al dated July 29, 2008


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EXHIBIT 2

PEST Initiative I filed January 15, 2008


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EXHIBIT 3

Withdrawal of PEST Initiative I filed with Secretary of State on August 6, 2008


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EXHIBIT 4

PEST Initiative II filed September 17, 2008

COMPLAINT FOR DECLARATORY JUDGMENT AND...

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