DocketNumber: No. CV 00 0504071 S
Judges: AURIGEMMA, JUDGE.
Filed Date: 12/12/2001
Status: Non-Precedential
Modified Date: 7/5/2016
By agreement of the parties, the facts which formed the basis of the declaratory ruling were to be hypothetical and were not investigated or corroborated by the Commission. Thus, the facts connected with this Appeal are essentially undisputed. The defendant stipulated to the fact as set forth in the Plaintiff's Petition for Declaratory Ruling and the Exhibits attached thereto. On or about November 24, 1999, all of the plaintiffs submitted a Petition For Declaratory Ruling pursuant to Connecticut General Statutes §
The Commission may impose a civil penalty on any person who knowingly enters into a contingent fee agreement in violation of subsection (b) of Section
1-97 or terminates a lobbying contract as a result of the outcome of an administrative or legislative action. The civil penalty shall be equal to the compensation which the registrant was required to be paid under the agreement".
Specifically, the plaintiffs asked the Commission to rule on the following questions: CT Page 16373
1. Does §
1-99 (a) of the Connecticut General Statutes permit imposition of a civil penalty of more than Two Thousand ($2,000.00) Dollars against a person who (I) knowingly enters into a contingent fee agreement, (2) knowing that the activity which is required under the contract is lobbying activity, as defined under Connecticut General Statute1-91 , and (3) who further knows that the entering into of the contingent fee agreement violates section1-97 (b) of the Connecticut General Statutes?2. Does Section
1-99 (a) of the Connecticut General Statutes permit imposition of a civil penalty of more than Two Thousand ($2,000.00) Dollars against a person who (1) knows that he is entering into a contingent fee agreement, and (2)(a) knows that the services required are lobbying services as defined under Connecticut General Statute §1-91 , but (b) does not know that said conduct violates Section1-97 (b) of the Connecticut General Statutes?3. Does Section
1-99 (a) of the Connecticut General Statutes permit imposition of a civil penalty in excess of Two Thousand ($2,000.00) Dollars per violation permitted under Connecticut General Statutes §1-99 against a person who (a) knowingly enters into a contingent fee agreement (b) did not intend to provide services which would be defined as lobbying services under Connecticut General Statue1-91 , (c) did not believe that he was providing such services, and (d) did not believe that he was violating Section1-97 (b), or intend to violate said Section?4. Does Connecticut General Statute §
1-99 (a) permit the imposition of a civil penalty in excess of Two Thousand ($2,000.00) Dollars for knowingly entering into a contingent fee agreement against anyone other than the party to the contingency fee agreement?5. Does Section
1-99 (a) of the Connecticut General Statutes permit the imposition of a civil penalty of no more than Two Thousand ($2,000.00) Dollars against a person who enters into a contingent fee agreement without knowing at the time of entering into the CT Page 16374 agreement that the services called for by the agreement would violate Connecticut General Statute §1-97 (b)?6. Does Section
1-99 (a) of the Connecticut General Statutes require that in order for the imposition of a civil penalty in excess of Two Thousand ($2,000.00) Dollars, the person entering into a contingent fee agreement within the parameters of Connecticut General Statute §1-97 (b) must know that the required services under the contingent fee agreement are lobbying services as defined by §1-91 at the time of entering the contingent fee agreement?
On or about January 7, 2000, the Commission issued a notice granting the Petition, and setting the matter down for a hearing. A hearing on the Petition for Declaratory Ruling was held before the Commission on June 16, July 7, and July 26, 2000.
The facts underlying the Petition and the Commission's Declaratory Ruling are based upon two underlying transactions between the State of Connecticut Office of the Treasurer and two venture capital investment firms, IAI Ventures, Inc. and Crescendo III, L.P. Former Treasurer Christopher Burnham determined to invest certain assets of the State's pension fund holdings with IAI Ventures. In a separate and wholly unrelated transaction, former Treasurer Paul Silvester determined to invest certain other assets of the State's pension fund holdings with Crescendo.
Truro is a limited liability corporation formed under the laws of the State of Connecticut. Truro's President is plaintiff George Finley. Peter Kelly and John Droney are partners in Truro.
On August 14, 1997, Truro executed a written agreement with IAI Ventures, Inc. Under this agreement, Truro was obligated to assist IAI Ventures, Inc. in identifying a limited number of large financial institutions as potential members of IAI World Fund in exchange for a fee contingent upon the amount of the State's investment in IAI's fund. The contract entered into between Truro and IAI Ventures Inc. specifically forbids Truro from engaging in any attempts to explain, sell, or even recommend the investment.
On December 27, 1994, Finley received a legal opinion from Attorney Paul McCormick, interpreting Connecticut General Statutes §
Before making any inquiries of Treasurer Burnham Truro obtained an opinion from a nationally renowned expert in securities law compliance concerning the actions required to comply with state and federal securities law. Attorney Richard Kraut advised Truro that it could not engage in the (1) sale, solicitation of offers, recommendations of a security to an investor, (2) provision of advice to investors, or (3) negotiations with prospective buyers, and that it could have no involvement in the investments, and that any fees received by Truro as a result of its activities must be disclosed to the Treasurer in writing.
In 1997, Finley, on behalf of Truro, asked then Treasurer Christopher Burnham if the Treasurer's office was interested in investing in venture capital investments. Treasurer Burnham stated that the Treasurer's Office was interested in both direct and indirect venture capital transactions. Finley told Treasurer Burnham of the existence of IAI Ventures Inc. Treasurer Burnham indicated that he would be interested in meeting the principals of IAI Ventures Inc.
Thereafter, Finley set up and attended a meeting between IAI Ventures Inc. and the Treasurer's office. Finley did not provide any investment advice to the Treasurer, and did not engage in any sales conduct involving the securities. Negotiations which ultimately led to the State's investment in the fund were conducted by IAI Ventures Inc., the Treasurer, their attorneys, and the office of the Attorney General. Neither Finley, Kelly, nor Droney participated in any manner in either the explanation of the investment product nor the negotiations of the terms of the State's participation in the Fund.
The Office of the Treasurer, acting through Treasurer Bumham and his investment committee, conducted a due diligence investigation of both IAI Ventures Inc. and the proposed investment. Truro did not participate in the closing of the fund transaction.
Neither Finley nor Truro registered with the Ethics Commission as a lobbyist. However, as set forth below Truro did disclose the fees it received from IAI Ventures, Inc. in writing with the Office of the Treasurer.
After months of negotiations between the Office of the Treasurer and IAI Ventures Inc., in which none of the plaintiffs had any involvement, CT Page 16376 the Office of the Treasurer entered into a written agreement to invest in the IAI Venture fund. The Office of the Treasurer agreed in writing that no representations or warranties were made to the State other than those set forth in the Offering Memorandum, the Partnership Agreement and the Subscription Documents.
On August 15, 1997, Truro filed an unsolicited and voluntary disclosure of the type and amount of its fee under the IAI Ventures, Inc. contract in writing with the Office of the Treasurer. On August 15, 1997, the Office of the Treasurer acknowledged, in writing, that it had received the unsolicited and voluntary written disclosure statement filed by Truro.
St. James is a limited liability company formed under the laws of the State of Connecticut, still in existence. The president of St. James is plaintiff George Finley. John Droney is a partner in St. James. St. James, through its president, George Finley, entered into a contractual agreement with Crescendo Ventures III, LLC and Crescendo Venture Management, LLC (hereinafter referred to jointly as "Crescendo") concerning the Crescendo III, LP Fund (the "Fund") that was almost identical to Truro's agreement with IAI Ventures. The contract between St. James and Crescendo expressly limited the role of St. James to identification of institutional funds which might be interested in investing in the securities offered and sold by Crescendo, in exchange for a fee contingent upon the amount of the State's investment in Crescendo's fund.
Like the agreement between Truro and IAI Ventures, Inc., the agreement between St. James and Crescendo was characterized by Mr. Finley as a "solicitation agreement." It contained the same prohibitions on engaging in securities work as the agreement between Truro and IAI Ventures.
After entering into the agreement with Crescendo, Mr. Finley and Mr. Droney inquired of then Treasurer Paul Silvester as to whether the Treasurer's Office was interested in investing in Crescendo. After determining that the Treasurer was interested, Mr. Finley and Mr. Droney set up a meeting between the Treasurer and the principals of Crescendo that resulted, following further negotiations, in an agreement by the Treasurer's Office to invest in the Crescendo III, LP Fund. St. James voluntarily filed an unsolicited disclosure with the Office of the Treasurer describing the type and amount of the fee it would receive.
Attorney Ralph Elliot, an expert in the field of ethics and the law, testified at the hearing that in his opinion, based on the facts set forth above, neither Truro, St. James, nor any of the individual Plaintiffs were lobbyists, or engaged in lobbying within the meaning of CT Page 16377 §
John A. Speziale, former Chief Justice of the Connecticut Supreme Court, provided a sworn and uncontested affidavit that in his opinion the conduct described in the facts set forth above and adduced before the Commission did not constitute lobbying. In addition, former Chief Justice Speziale opined that the evidence revealed that the plaintiffs did not know, and had no reason to know, that these limited contacts with the Treasurer's Office might be construed as lobbying.
In a ruling dated July 27, 2000, the Commission concluded that the hypothetical set of facts presented in the plaintiffs' petition constituted "lobbying" for purposes of §
Discussion of Law and Ruling
At oral argument the plaintiffs requested the court to find aggrievement and the court found that the plaintiffs were aggrieved. The defendant has not contested that the plaintiffs have a specific personal and legal interest that has been specially and injuriously affected by the decision of the Commission. Local 1303 Local 1378 v. FOIC,
Section
Sec.
1-91 (k) "Lobbying" means communicating directly or soliciting others to communicate with any official or his staff in the legislative or executive branch of government or in a quasi-public agency, for CT Page 16378 the purpose of influencing any legislative or administrative action.Sec.
1-91 (a) "Administrative action" means any action or nonaction of any executive agency of the state with respect to the proposal, drafting, development, consideration, amendment, adoption or repeal of any rule, regulation or utility rate, and any action or nonaction of any executive agency or quasi-public agency, as defined in section1-79 , regarding a contract, grant, award, purchasing agreement, loan, bond, certificate, license, permit or any other matter which is within the official jurisdiction or cognizance of such an agency.Sec.
1-97 (b)No person shall be employed as a lobbyist for compensation which is contingent upon the outcome of any administrative or legislative action.Sec.
1-99 (a) The commission, upon a finding made pursuant to section1-93 that there has been a violation of any provision of this part, shall have the authority to order the violator to do any or all of the following: (1) Cease and desist the violation of this part; (2) file any report, statement or other information as required by this part; or (3) pay a civil penalty of not more than two thousand dollars for each violation of this part.The commission may prohibit any person who intentionally violates any provision of this part from engaging in the profession of lobbyist for a period of not more than two years. The commission may impose a civil penalty on any person who knowingly enters into a contingent fee agreement in violation of subsection (b) of section
1-97 or terminates a lobbying contract as the result of the outcome of an administrative or legislative action. The civil penalty shall be equal to the amount of compensation which the registrant was required to be paid under the agreement.
In an appeal from an agency final decision under the Administrative Procedure Act, the court's "ultimate duty is to determine, in view of all of the evidence, whether the agency, in issuing its orders, acted unreasonably, arbitrary, illegally, or in abuse of its discretion."Dolgner v. Alander,
Cases that present pure questions of law, however, invoke a broader standard of review than is ordinarily involved in deciding whether, in light of the evidence, the agency has acted unreasonably, arbitrarily, illegally or in abuse of its discretion. . . . Furthermore, when a state agency's determination of a question of law has not previously been subject to judicial scrutiny . . . the agency is not entitled to special deference." (Internal quotation marks omitted.) Connecticut Light Power Co. v. Texas-Ohio Power, Inc.,
243 Conn. 635 ,642 ,708 A.2d 202 (1998).
Macdermid, Inc. v. Dept. of Environmental Protection,
The foregoing statutes have not previously been the subject of judicial scrutiny. Therefore, this court must make an independent evaluation as to their meaning and reach of the statutes in issue.
In interpreting the meaning of a statute, the court must attempt to determine the intent of the legislature as expressed by the common and approved usage of the words in the statute. Town of Winchester v.Connecticut State Bd. of Labor Relations,
In order for a person to be engaged in "lobbying" within the meaning of Connecticut General Statutes §
Section
The plaintiffs urge the court to construe
The plaintiffs also argue that a phone call to the Treasurer's office to set up a meeting, and the attending of a meeting falls within an exception to the definition of "lobbying" contained in the Ethics Commission Regulations. Section
The defendant argues, in essence, that the statutory definition of "lobbying" includes conduct which indirectly influences executive agency actions. Thus, it argues that an introductory phone call and meeting without any other contact is "lobbying" because the ultimate purpose of such conduct was to cause the Treasurer's investment with IAI and Crescendo. Since the Treasurer did ultimately invest with those entities, the argument goes, even though the plaintiffs did not recommend the investment, or make any other qualitative statements about IAI or Crescendo, they have engaged in lobbying.
The defendant has characterized the plaintiffs' conduct as "door opening" and has ruled that door opening constitutes lobbying. This ruling CT Page 16381 is based in large part on the defendant's reliance on one of its own advisory opinions, Advisory Opinion No. 95-11. In Advisory Opinion No. 95-11, the Commission was asked to interpret the terms "Representative of a Manufacturer" and "Salesperson" as those terms are used in regulation promulgated by the Commission, Regulation of Connecticut State Agencies. §
One of the fundamental purposes behind the expansion of the definition of administrative lobbying was to regulate the "door opening" which takes place when an individual becomes involved, on behalf of a client, in the State contracting process.
This statement cited to no legislative history, did not define what is meant by "door opening", and did not explain what is meant by involvement in the state contracting process. Yet the defendant relied on it in this case to support its claim that the plaintiffs engaged in lobbying.
The plaintiffs argue that the Commission's Declaratory Ruling in this case was based on the Commission's improper attempt to enforce its advisory opinion as a regulation that has not been properly adopted.Salmon Brook Convalescent Home v. Commission on Hospitals and HealthCare,
each agency statement of general applicability, without regard to its designation, that implements, interprets, or prescribes law or policy. . . . The term includes the amendment or repeal of a prior regulation, but does not include (A) statements concerning only the internal management of any agency not affecting private rights or procedures available to the public, (B) declaratory rulings issued pursuant to Section
4-176 , or (C) intra-agency or interagency memoranda.
The Commission claims that its reliance on its prior interpretations of CT Page 16382 the statutes are permissible under Sweetman v. State ElectionsEnforcement Comm.,
"The criteria that determine whether administrative action is a ``regulation' are neither linguistic nor formalistic. . . . The test is, rather, whether ``a rule has a substantial impact on the rights and obligations of parties who may appear before the agency in the future.' Salmon Brook Convalescent Home, Inc. [v. Commission on Hospitals Health Care,
177 Conn. 356 ,362 ,417 A.2d 358 (1979)]." (Citations omitted.) Maloney v. Pac,183 Conn. 313 ,325-26 ,439 A.2d 349 (1981). "This does not mean . . . that every administrative decision which may have precedential significance beyond the facts and party before it becomes ipso facto a regulation. Eagle Hill Corp. v. Commission on Hospitals Health Care,2 Conn. App. 68 ,76 ,477 A.2d 660 (1984). Instead, "administrative agencies must necessarily interpret statutes which are made for their guidance," and they may do so without reference to regulations. Connecticut Life Health Ins. Guaranty Assn. v. Jackson,1573 Conn. 352 ,356 ,377 A.2d 1099 (1977). "To rule otherwise would be to ignore the subtle and intricate interaction of law and fact. It is inherent in our judicial system of dispute resolution that the interpretation of statutes, like the development of the common law, grows out of the filtering of a set of facts through the law, as seen by the administrator or judge. The result of this application is a hybrid, composed in part of fact, in part of law, which by its existence contributes to the interpretation of a statute." Id., 356-57.
As the Court in Sweetman stated, not every Agency interpretation of a statute constitutes a regulation. However, the plaintiffs correctly point out that the Commission's advisory opinions are binding only on the Commission. The advisory opinions are merely the Commission's prior interpretations of the statutes in question. Prior interpretations do not give the Commissions interpretations in this case any added validity. It remains for the court to determine whether those interpretations comport with the intent of the legislature. CT Page 16383
Section
Any person may petition an agency . . . for a declaratory ruling as to . . . the applicability to specified circumstances of a provision of the general statutes. . . .
The plaintiffs argue that the Commission has avoided its responsibilities under under Section
The court agrees that the Commission's version of the evidence has added facts not set forth in the Petition. The Petition contained no facts articulating either that the plaintiffs are highly connected individuals or that they used any connections to help secure government contracts. The Petition makes clear that at no time did any of the plaintiffs (1) provide advice to either Treasurer; (2) attempt to do anything to effect the purchase of any securities by either Treasurer; (3) participate in any negotiations; (4) in any way effectuate any transactions with either Treasurer. The Petition alleges only that the plaintiffs identified an opportunity and made inquiries for informational purposes. It further alleges that the Treasurer's Office acknowledged in writing "that no representations or warranties were made to the State other than those set forth in the Offering Memorandum, the Partnership Agreement, and the Subscription Documents."
The court must determine whether the a telephone call to set up an informational meeting, and attending that meeting constitutes lobbying within the meaning of Connecticut General Statutes §
Finally this court's interpretation of §
No person may, directiy or indirectly, receive a finder's fee in connection with any investment transaction involving the state . . . or any political subdivision of the State.
Conn. Gen. Stat. Section
compensation in the form of cash, cash equivalents or other things of value paid to or received by a third party in connection with an investment transaction to which the state . . . is a party for any services, and includes, but is not limited to, any fee paid for lobbying, as defined in subsection (k) of Section1-91 , and as defined by the Ethics Commission, in consultation with the Treasurer, in the regulations adopted under subparagraph (c)(ii) of subdivision (3) of this subsection. . . .
Conn. Gen. Stat. Section
As Public Act 00-43 and its legislative history strongly suggest, before the enactment of Public Act 00-43 making inquiries of the Treasurer and setting up a meeting did not constitute lobbying.
The definition of "Finder's Fee" as adopted by the legislature precludes the receipt of any fee, contingent or otherwise, for any activity, lobbying or otherwise, performed in connection with any state investment. The Statute is quite specific in using the language ". . . includes, but is not limited to, lobbying. . . ." Therefore, it appears that the legislature intended to encompass within the ban on finder's fees any activity which did not previously rise to the level of lobbying. Under the new law the activities of the plaintiffs in making inquiries and setting up a meeting are now prohibited, but as they were not made for the purpose of influencing administrative action under the prior law, they were not previously prohibited. Conn. Agencies Reg.
Now, however, a person may not receive a finder's fee for performing those same acts if done in connection with investment services. In order to fully explicate what acts would preclude the payment of a finder's fee, the new legislation requires the adoption of new regulations.
The legislative history of Public Act 00-43 confirms that "door opening" and "finder's fees" were not illegal prior to the passage of that Public Act. Ethics Commission Executive Director, Alan Plofsky, argued against passage of the legislation:
. . . the timing of this legislation could not be worse. . . . [B]y the end of this month we will have 12 complaints formally filed. . . . These complaints involve the very issues of finder's fees. . . . [I]t . . . could be an impediment to our investigation.
(Hearings before the Finance, Revenue and Bonding Committee, pp. 000817-000818).
We feel that what's commonly known as a finder's fee, which is a contingent fee for arranging business with the Treasurer's office is barred, is illegal and can be sanctioned by the Ethics Commission dollar for dollar.
(Comments before the Finance, Revenue and Bonding Committee, March 14, 2000, p. 000819).
The legislature obviously disagreed, for if the then-existing legislation contained such a ban, there would have been no reason to pass Public Act 00-43. In this new law the legislature has created a category of illegal activity, prohibiting the payment of a finder's fee for what the defendant has called door-opening.1
The declaratory ruling here was based on the Commission's conclusion that the plaintiffs' hypothetical conduct did constitute lobbying. As stated above, this court does not agree with that conclusion because it was based on an incorrect interpretation of §
1) Yes, assuming lobbying occurred; CT Page 16386
2) No;
3) No;
4) No;
5) No;
6) Yes.
This court will address the Commission's interpretation of Connecticut General Statutes §
The Commission's answers to questions 1, 2, 3, 5 and 6 were all based upon its conclusion that §
for the Commission to impose a civil penalty "equal to the amount of compensation the registrant was required to be paid" two findings are required: 1. that the person knowingly entered into a contingent fee agreement; and 2. that the agreement is in violation of §1-97 (b).
This court concludes that the foregoing is an erroneous interpretation of the law. See Connecticut General Statutes §
The Commission may impose a civil penalty on any person who knowingly enters a contingent fee agreement in violation of subsection (b) of Section1-97 or terminates a lobbying contract as the result of the outcome of an administrative or legislative action. The civil penalty shall be equal to the amount of compensation which the registrant was required to be paid under the agreement.
Before the Commission may impose the penalty of complete forfeiture it must find, based upon a preponderance of record evidence, that a person (1) knowingly entered into a contingent fee agreement, and (2) knowingly violated §
Section
The penalty of forfeiture, conversely, applies only to those instances in which any person knowingly enters into a contingent fee contract in violation of Section
The foregoing interpretation of the statute is supported by the rules of statutory construction, the definition of the terms used in the statute, the nature of the statute, and the practical effect of the interpretation.
In interpreting the meaning of a statute, the court must attempt to determine the intent of the legislature as expressed by the common and approved usage of the words in the Statute. Town of Winchester v.Connecticut State Bd. of Labor Relations,
The forfeiture penalty may only be applied in those situations in which a person knowingly enters into a contingent fee contract in violation of Section
The Commission has no power to discipline a person who enters into a contingency fee contract which has nothing to do with lobbying. Under the power vested in the Commission under §
Courts must apply legislative enactments in accordance with their plain terms. State v. Maim,
The Commission mistakenly concluded that a person need know only that he was entering into a contingency fee contract in order for the penalty of forfeiture to apply. Under this interpretation of the statute the term "knowing" would modify only the term "contingency fee contract," and would make the phrase "in violation of subsection (b) of Section
The Commission's interpretation of the statute ignores not only the plain meaning of the words, but also the lack of punctuation between the phrases. The sentence which permits the imposition of a forfeiture contains no commas setting off "knowing" from "in violation of subsection (b) of Section
Punctuation is a recognized aid to statutory construction. State v.Dennis,
Section
Restrictions on the right to contract are a constitutional exercise of the police power. The Connecticut Supreme Court has repeatedly stated that these penal Statutes must be strictly construed. Dental Commissionv. Tru-Fit Plastics, Inc., op. cit (exercise of police power designed to serve public health penal in nature, conduct or acts proscribed must be sufficiently explicit to meet constitutional requirements); Bailey v.Kozlowski,
A penal statute must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties. Brazo v. Real Estate Commission,
The Commission found that §
Furthermore, the conclusion that §
Contrary to the Commission's argument, the plaintiffs have not pled ignorance, and have not acted in total disregard of the law. Rather, the undisputed evidence before the Commission was that plaintiffs considered whether their conduct violated the law; were provided with, and relied upon, a legal opinion that their conduct did not violate the statute; reported the entirety of their conduct to the Banking Commission and the Treasurer's office, and were assured that they acted appropriately.
As set forth above, the legislature's passage of Public Act 00-43 leads to the conclusion that prior to that Public Act, it was at least unclear, even to the legislature, that "door opening" for a fee constituted lobbying. Therefore, the plaintiffs could not have knowingly violated the prohibition against contingent fee lobbying. CT Page 16391
Question Four of the Petition asked:
Does Connecticut General Statute §1-99 (a) permit the imposition of a civil penalty in excess of Two Thousand ($2,000.00) Dollars for knowingly entering into a contingent fee agreement against anyone other than the party to the contingency fee agreement?
The defendant answered this question in the affirmative. The statutory interpretation employed by the Commission to arrive at that answer was truly procrustean.
Section
The inescapable conclusion of reading those two provisions is that if a penalty of forfeiture is to be imposed under §
When the language used in a statute is clear and unambiguous, its meaning is not subject to modification by construction. State v. Simmons,155 Conn. 502 ,504 ,234 A.2d 835 ; Hurlbut v. Lemelin,155 Conn. 68 ,73 ,230 A.2d 36 . It is not the function of courts to read into clearly expressed legislation provisions which do not find expression in its words; Lenox Realty Co. v. Hackett,122 Conn. 143 ,150 ,187 A. 895 ; nor is it our function to substitute our own ideas of what might be a wise provision in the place of a clear expression of the legislative will. Connelly v. Bridgeport,104 Conn. 238 ,249 ,132 A. 690 . The statute must be applied as its words direct.
Dental Commission v. Tru-Fit Plastics, Inc.,
The Record facts before the Commission are unequivocal that only the limited liability companies — Truro and St. James — entered into the contingency fee contracts. The unambiguous terms of Section
The defendant has based its ruling that individuals who did not enter into a contingency fee contract may be subject to forfeiture by ignoring the statutory definitions and resorting to a convoluted analysis of "communicator lobbyists," "client lobbyists," and "business organizations." The defendant has conceded the following basis for such invalid analysis: permitting individuals to escape forfeiture liability "would read into exisiting law a broad regulatory loophole that would eviscerate the legislature's intent in adopting the Code of Ethics for Lobbyists." Brief of Defendant-Appellee at p. 37. The legislative intent of these statutes cannot be distorted to fit the Commission's idea of what the law should punish. Sometimes legislation contains loopholes. If the Commission believes that §
Connecticut law does recognize limited circumstances in which the separate identity of a corporation or limited liability company will be ignored. Those circumstances are limited to situations in which a finding of fraudulent, evasive or manipulative purposes is established in forming or maintaining the corporation. S.F.A. Folio Collections, Inc. v.Bannon,
There was no evidence before the Commission which would have permitted the Commission to disregard the corporate entity of Truro or St. James under Angelo Tomasso, Inc. Therefore, there was no basis to find that any "person" other than Truro and St. James could be subject to the forfeiture CT Page 16393 penalty of §
For all the foregoing reasons the plaintiffs' appeal is sustained. The court concludes as a matter of law that (1) the evidence before the Commission establishes that plaintiffs did not engage in lobbying, or were exempt from lobbying; (2) the plaintiffs did not knowingly enter into a contingent fee agreement in violation of Section
By the court,
Aurigemma, J.
Paul Bailey's, Inc. v. Commissioner of Motor Vehicles ( 1975 )
Local 1303 & Local 1378 of Council No. 4 v. Freedom of ... ( 1983 )
Colli v. Real Estate Commission ( 1975 )
Lenox Realty Co. v. Hackett ( 1936 )
Town of Winchester v. Connecticut State Board of Labor ... ( 1978 )
Brazo v. Real Estate Commission ( 1979 )
Dental Commission v. Tru-Fit Plastics, Inc. ( 1970 )
Eagle Hill Corp. v. Commission on Hospitals & Health Care ( 1984 )