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Shadowy Arizona political nonprofit faces lawsuit over robocalls

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Tuesday, Feb. 12, 2013
By Sean Peick
Cronkite News

PHOENIX _ The Phoenix-based political group Americans for Responsible Leadership is facing a lawsuit in Colorado alleging that the nonprofit made illegal robocalls to cellphones.

The suit, filed last week in U.S. District Court in Denver, alleges that Denver resident Marlo Edholm, the plaintiff, received five prerecorded calls from the group promoting Mitt Romney between Nov. 2 and Nov. 5.

Under the Telephone Consumer Protection Act, it is illegal to call a cellphone using either an autodialing system or a prerecorded message. It has exceptions for emergencies and when recipients consent to being called.

The lawsuit seeks class-action status, contending that Edholm was likely not alone.

“Our suspicion is that there are probably thousands of these calls that went out on the eve of this election in an effort to influence voters,” said Joseph Mellon, lead counsel for the plaintiff.

Americans for Responsible Leadership, which doesn’t have to disclose its donors because of how it’s filed with the Internal Revenue Service, dispenses what’s often referred to as dark money.

It contributed $1.5 million against two ballot propositions in Arizona, both of which failed in November. Proposition 121 would have changed Arizona’s primary system to a nonpartisan one, while Proposition 204 would have established a 1 cent-per-dollar sales tax to benefit education and other causes.

The group made national headlines last year over $11 million it contributed to campaigns in California. Taken to court by that state’s Fair Political Practices Commission, Americans for Responsible Leadership disclosed that the money came through two other dark money groups.

According to filings with the Arizona Corporation Commission, one of the founders of Americans for Responsible Leadership is Robert Graham, who recently was elected chairman of the Arizona Republican Party. Graham is the president and CEO of RG Capital, an investment advisory company in Scottsdale.

Kirk Adams, former speaker of the Arizona State House of Representatives and an unsuccessful candidate for Congress last year, was listed in the most recent filings as the group’s president.

Barrett Marson, a spokesman for the group, said that Americans for Responsible Leadership had followed Federal Communications Commission rules and regulations and would defend against the lawsuit vigorously.

“Americans for Responsible Leadership made millions of phone calls around the country in last year’s election, and this is the only complaint we’ve ever been made aware of about calls to cellphones,” Marson said.

Americans for Responsible Leadership had yet to designate a lawyer to represent it in this case. Marson said the group hadn’t been served with the lawsuit as of late last week.

The court documents propose that the class for the suit be defined as “all persons within the United States who received one or more non-emergency telephone calls from ARL to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice, and who did not provide prior express consent for those calls.”

The suit contends that Edholm, the Denver resident, and others who received calls are entitled to damages of between $500 and $1,500 for each robocall. It seeks an injunction prohibiting Americans for Responsible Leadership from making such calls in the future.

Derek Bambauer, an associate professor at the University of Arizona’s James E. Rogers College of Law, said that the case’s future likely hinges on its potential class-action status.

“If they don’t get this certified as a class, the lawsuit goes away,” he said, adding that the then-diminished amount of financial punishment usually outweighs whatever the plaintiff hopes to gain from the suit.

According to a year-end report filed with the Federal Election Commission, Americans for Responsible Leadership spent nearly $5.6 million on pro-Romney phone calls from Oct. 31 through election day on Nov. 6. Most of the money was paid to Direct Response Group LLC , a Phoenix-based company, while $150,000 was paid to Victory Phones, a company with a Michigan mailing address and described on its website as “a leader in automated telephony services and data compilation.”

Messages left with both companies weren’t returned by late Tuesday afternoon.