HELENA — A state judge has dismissed the heart of a lawsuit by a conservative political group fighting state efforts to regulate it, after the group refused to disclose further financial records to the court.
The ruling late Monday by District Judge Jeffrey Sherlock of Helena is a major defeat for American Tradition Partnership (ATP), which until now has successfully attacked Montana’s campaign finance laws and regulations.
Attorney General and Gov.-elect Steve Bullock, whose office has fought a trio of lawsuits filed by ATP since 2010, on Tuesday called the ruling “the beginning of the end of ATP’s lawless activities in the state of Montana.”
The group will now have to disclose its political spending in Montana, he said.
Donald Ferguson, executive director of ATP, said the group disagrees with the ruling and will “continue to fight to protect our First Amendment right to speak free from government interference and regulation.”
ATP, formed initially as Western Tradition Partnership, calls itself a “grassroots organization dedicating to fighting the radical environmentalist agenda.” Since 2008, it has funded campaign-related material attacking legislative and various other candidates in Montana.
Two years ago, Montana’s political practices commissioner ruled that ATP is a political committee and must report its donors and spending.
ATP responded by suing the state to block that ruling, and has continued to fund campaign-related activity.
This year it sent a political mailer to Montana voters disguised as a newspaper called the “Montana Statesmen,” with articles attacking Bullock and other candidates.
Its lawsuit had been scheduled to go to trial next March, but Sherlock said ATP has engaged in “long-standing and pervasive” abuse of the pre-trial discovery process by refusing to provide court-ordered information on its structure, finances and members.
Because of that abuse, Sherlock agreed Monday to a state request to dismiss most of the lawsuit.
“This is an unusual case,” Sherlock wrote in his order. “Never in (my) 24 years on the bench has … a litigant flatly refused to comply with two discovery orders."
Sherlock also gave ATP another 10 days to comply with his orders to produce certain information and said if the group does not, he’ll rule that the group is a political committee that must comply with state regulations and pay penalties for not complying earlier.
Bullock said ATP has shown “disdain for the entire (legal) process that we have, and that it’s time for the group to comply with state law and report its political spending.
“With the (lawsuits) that they’ve brought, a piece of what we’ve been pushing for is disclosure and transparency,” he said. “At this point, they will have to disclose and be transparent.”
Ferguson said the group should not have to turn over financial information until a court rules that it can be regulated by the state.
The court hasn’t yet made that ruling, he said, but is requiring ATP to give those documents to the state, which can publicly release them.
“(ATP) has produced the information the court and the state need to determine whether the state even has jurisdiction over our speech and association activities,” Ferguson said. “The fact is, we are losing this case not on the merits, but on procedural tricks on the part of the state, and erroneous rulings by the court.”
ATP maintains it is a nonprofit, educational group informing voters about candidates’ positions on environmental issues, and therefore is not required to divulge its donors or spending.
In preparing for a trial on the lawsuit, the state asked ATP to provide information on its structure and officers, as well as how much money it has spent in Montana “educating” or trying to influence voters.
Sherlock ordered ATP to produce those documents by August, but the group missed that deadline and didn’t provide anything until a Nov. 1 hearing on the state request to sanction the group for refusing to produce the documents.
Those records included bank records on nearly $600,000 in donations from 2008, 2009 and 2010. However, the state and Sherlock said ATP still had not complied with his earlier order, refusing to provide tax records and information on its spending, officers and incorporation.
Sherlock said ATP “continues its attempt to evade or outright refuse to answer certain discovery,” and dismissed its lawsuit asking to overturn the 2010 commissioner’s ruling.
ATP and its allies have sued the state three times since 2010 over campaign laws, and until Monday, won some key rulings.
Its initial lawsuit led to U.S. Supreme Court throwing out Montana’s 100-year-old law that banned corporate spending on independent expenditures opposing or supporting candidates.
Another lawsuit led to a federal court ruling this year that erased Montana’s campaign contribution limits. That ruling is on appeal to the 9th U.S. Circuit Court of Appeals.