                                        In the
                       Missouri Court of Appeals
                                Western District
PROTECT CONSUMERS' ACCESS                   )
TO QUALITY HOME CARE                        )
COALITION, LLC AND ELISA                    )   WD79100
PELLHAM,                                    )
                                            )   OPINION FILED:
               Appellants,                  )   November 17, 2015
                                            )
v.                                          )
                                            )
JASON KANDER, SECRETARY OF                  )
STATE OF MISSOURI AND NICOLE                )
R. GALLOWAY, STATE AUDITOR                  )
OF MISSOURI,                                )
                                            )
              Respondents.                  )

              Appeal from the Circuit Court of Cole County, Missouri
                        The Honorable Jon E. Beetem, Judge

 Before Special Division: James E. Welsh, Presiding Judge, Gary Dean Witt, Judge and
                             Anthony Rex Gabbert, Judge

      This appeal raised issues regarding the summary statement, fiscal note summary,

and fiscal note of an initiative petition filed with the Missouri Secretary of State. The

initiative petition seeks to require providers of certain in-home services and vendors of

consumer-directed services, which receive reimbursement from the State of Missouri

pursuant to the MO HealthNet Program, to pay a certain required percentage of the
revenue derived from these services to the individual performing the services in the form

of wages and benefits. Plaintiffs Protect Consumers' Access to Quality Home Health

Care Coalition, LLC and Elisa Pellham (collectively "Plaintiffs") appeal the Amended

Final Judgment of the trial court certifying the Official Ballot Title, including the

summary statement, fiscal note summary, and fiscal note, and denying all of Plaintiffs'

claims. We affirm in part, reverse in part, and remand for certification of a corrected

summary statement.

                                      FACTUAL BACKGROUND

       Jeffrey Mazur submitted to the Missouri Secretary of State ("Secretary") an

initiative petition sample sheet (the "Initiative") proposing a number of statutory

amendments in relation to Chapter 208.1 The Initiative seeks to provide that "in-home

service providers which receive payments made on behalf of an eligible needy person

pursuant to section 208.152, or other state statute providing for payments on behalf of

such persons" must pay at least 85% of the revenue received from those services on the

"wages and benefits" of the employee who performed those services. Section 208.152 is

part of the State of Missouri's system to provide for MO HealthNet (i.e., Medicaid)

payments on behalf of eligible persons. Similarly, the Initiative would require vendors of

"consumer-directed services" to pay at least 85% of the funds paid by the State for those

services to personal care attendants.

       The summary statement ("Summary Statement") prepared by the Secretary

provides the following:

       1
           All statutory references are to RSMo 2000 cumulative as currently supplemented, unless otherwise noted.

                                                         2
      Shall Missouri law be amended to require in-home service providers and
      vendors to pay an employee at least 85 percent of the state funds they
      received for the service provided by the employee to eligible individuals?

      The State Auditor's office (the "Auditor") followed its normal processes to prepare

a fiscal note ("Fiscal Note") and fiscal note summary ("Fiscal Note Summary").

      The Fiscal Note Summary prepared by the Auditor provides the following:

      State universities and governmental entities estimate one-time costs
      exceeding $100,000 with the total costs being unknown and increased
      annual costs of at least $115,000. Local governmental entities estimate no
      costs or savings from this proposal.

      Plaintiffs filed a timely Petition challenging the Summary Statement, Fiscal Note

Summary, and Fiscal Note as insufficient and unfair. The Circuit Court of Cole County

conducted a hearing and heard oral arguments on Plaintiffs' claims. The trial court

entered its Judgment, which was subsequently amended, that denied Plaintiffs' claims and

certified the Official Ballot Title, including the Summary Statement, Fiscal Note

Summary and Fiscal Note. Plaintiffs now appeal.

                             STANDARD OF REVIEW

      "De novo review of the trial court's legal conclusions about the propriety of the

secretary of state's summary statement and the auditor's fiscal note and fiscal note

summary is the appropriate standard of review when there is no underlying factual

dispute that would require deference to the trial court's factual findings.      Brown v.

Carnahan, 370 S.W.3d 637, 653 (Mo. banc 2012).




                                           3
                                                 ANALYSIS

                                                  Point One

        In Point One on appeal, the Plaintiffs argue the trial court erred in certifying the

Summary Statement because the Secretary's Summary Statement is insufficient and

unfair in that it fails to summarize the Initiative in a manner that will not deceive or

mislead voters.

        The statute that governs the promulgation of summary statements for petitions

states, in relevant part:

        [T]he secretary of state shall prepare and transmit to the attorney general a
        summary statement of the measure which shall be a concise statement not
        exceeding one hundred words. This statement shall be in the form of a
        question using language neither intentionally argumentative nor likely to
        create prejudice either for or against the proposed measure.

§ 116.334.1.

        Citizens may challenge proposed summary statements alleging they are

insufficient or unfair. §116.190; Mo. Mun. League v. Carnahan, 364 S.W.3d 548, 552

(Mo. App. W.D. 2011). "Insufficient means 'inadequate; especially lacking adequate

power, capacity, or competence.' The word 'unfair' means to be 'marked by injustice,

partiality, or deception.' Thus, the words 'insufficient [or] unfair' ... mean to inadequately

[or] with bias, prejudice, deception and/or favoritism state the [consequences of the

initiative]."2 Mo. Mun. League, 364 S.W.3d at 552 (quoting Cures Without Cloning v.

Pund, 259 S.W.3d 76, 81 (Mo. App. W.D. 2008)).

        2
          Section 116.190.3 uses the words, "insufficient or unfair" (emphasis added), while Cures Without Cloning
and other cases have used the word "and" in place of the word "or," when analyzing this provision. We note that the
proper consideration is whether the ballot title is "insufficient or unfair."

                                                        4
       The ballot title is sufficient if it "makes the subject evident with sufficient

clearness to give notice of the purpose to those interested or affected by the proposal."

Overfelt v. McCaskill, 81 S.W.3d 732, 738 (Mo. App. W.D. 2002) (superseded in part by

statutes) (quoting United Gamefowl Breeders Ass'n of Mo. v. Nixon, 19 S.W.3d 137, 140

(Mo. banc 2000)). "[E]ven if the language proposed by [Plaintiffs] is more specific, and

even if that level of specificity might be preferable, whether the summary statement

prepared by the Secretary of State is the best language for describing the referendum is

not the test." Id. (quoting Bergman v. Mills, 988 S.W.2d 84, 92 (Mo. App. W.D. 1999)).

"The critical test is 'whether the language fairly and impartially summarizes the purposes

of the measure so that voters will not be deceived or misled.'" Cures Without Cloning,

259 S.W.3d at 81 (quoting Bergman, 988 S.W.2d at 92).

       The Plaintiffs claim that the Summary Statement is insufficient or unfair in a

number of respects. The Plaintiffs argue the Summary Statement: (1) fails to inform

voters that the subject of the measure is in-home healthcare services for individuals in the

MO HealthNet Program; (2) wrongly and confusingly describes "personal care

attendants" as "employees"; (3) fails to describe who are "eligible individuals," and

"vendors," and (4) uses the misleading term "pay".

       Plaintiffs first argue that the Summary Statement is insufficient or unfair because

it fails to inform voters that the subject of the measure is in-home healthcare services for

individuals receiving services under the MO HealthNet Program. Plaintiffs point is well

taken. The Summary Statement is intended to give notice to voters of the subject of the

initiative so that they may make an informed choice on whether to investigate the matter

                                             5
further. Thus, we have said that the Summary Statement must "make[] the subject

evident with sufficient clearness to give notice of the purpose to those interested or

affected by the proposal." Overfelt, 81 S.W.3d at 738. "Sometimes it is necessary for the

secretary of state's summary statement to provide a context reference that will enable

voters to understand the effect of the proposed change." Brown, 370 S.W.3d at 654.

       The Summary Statement as currently drafted only uses the term "in-home service

providers" and fails to give any indication as to the underlying subject matter or the

individuals who would be affected by the Initiative. "In-home service providers" gives

no indication as to what types of services are contemplated or under what programs. At

the very least, the language must include a reference to MO HealthNet, the statutory

scheme that is explicitly referenced in the Initiative itself, which would give notice

regarding the subject matter and individuals who would be affected by the Initiative. We

decline to go further and require that the services being provided are described as

"healthcare" services, as requested by Plaintiffs, as the services provided by the vendors

of consumer-directed services include services that would not necessarily be considered

"healthcare."   See §208.900 (services provided by personal care attendants include

assisting customers with routine tasks, such as moving into and out of bed, consuming

food and drink, bathing and grooming, housekeeping, etc.) As the new language will

include a reference to MO HealthNet, this is sufficient to give fair and sufficient notice to

voters of the subject matter of the proposal.

       Second, Plaintiffs argue that the use of the term "employees" is misleading

because the Initiative, insofar as it pertains to "vendors" that receive payments under the

                                                6
"consumer-directed services program," would require 85% of the revenues received to be

paid to "personal care attendants" who are not employees. The point is also well taken.

Vendors that receive payments under the "consumer-directed services program" do not

necessarily have an employer-employee relationship with personal care attendants.

"Consumer-directed" is defined as "the hiring, training, supervising, and directing of the

personal care attendant by the consumer," who is the person receiving the services.

§208.900(2) (emphasis added). A "personal care attendant" is defined as "a person, other

than the consumer's spouse, who performs personal care assistance services for the

consumer." §208.900(6). Vendors, on the other hand, have an agreement with the State

"to provide services including monitoring and oversight of the personal care attendant,

orientation, and training of the consumer, and fiscal conduit services necessary for

delivery of personal care assistance services to consumers."          §208.900(10).   The

individual receiving the services is responsible for supervising the personal care

attendant, verifying wages, submitting time sheets, etc., whereas the vendor collects and

certifies time sheets, overseas the Medicaid reimbursement process, and transmits

payments. See §208.909. Referring to personal care attendants as "employees" of the

vendor is inaccurate and misleading. This can be easily remedied by including in the

Summary Statement a separate reference to personal care attendants.

      The remaining three objections to the proposed language by Plaintiffs are without

merit. Plaintiffs argue that "eligible individuals" should be changed to "eligible needy

individuals." We do not see any reason why the Secretary should be required to classify

the individuals receiving these services as "needy" and the Plaintiffs offer no reason why

                                            7
such a description is required to make the language sufficient or fair. Similarly, the

Plaintiffs would like "vendors" changed to "personal care assistance service vendors."

However, as explained above, the language of the Summary Statement will be changed to

specify that vendors will pay "personal care attendants," so this concern has already been

addressed. Finally, the Plaintiffs object to the term "pay" because it does not specify that

the pay is actually pre-tax wages and benefits. Such specificity in a summary is not

mandatory. The question is whether voters will be objectively informed as to the subject

matter of the initiative. "Pay" here is sufficient for this purpose and voters will be able to

inquire further as to the specifics of what constitutes "pay" by looking at the Initiative

itself.

          The trial court has the authority to modify the original Summary Statement based

on our findings above. See Cures Without Cloning, 259 S.W.3d at 83. Accordingly, we

reverse the judgment and remand the cause to the trial court for certification of the

following summary statement:

          Shall Missouri law be amended to require in-home service providers
          and vendors to pay an employee or personal care attendant at least 85
          percent of the state funds they received under the MO HealthNet
          Program for the service provided by the employee or the personal care
          attendant to eligible individuals?

                                           Point Two

          In Point Two on appeal, the Plaintiffs argue that the trial court erred in certifying

the Fiscal Note Summary because it is unfair and insufficient in that (A) it misrepresents

the information in the fiscal note concerning costs to state universities and (B) it fails to

account for any impact on the state's tax revenue.

                                                8
       Section 116.175.3 requires that the Auditor create a fiscal note and fiscal note

summary that states the measure's "estimated cost or savings, if any, to state or local

governmental entities." The summary can be no more than fifty words and can be neither

argumentative nor likely to create prejudice for or against the propose measure. Id.

       In the context of requiring a fair and sufficient fiscal note by the state
       auditor, "the words insufficient and unfair ... mean to inadequately and with
       bias, prejudice, deception and/or favoritism state the fiscal consequences of
       the proposed proposition." Hancock v. Secretary of State, 885 S.W.2d 42,
       49 (Mo.App.1994). Similarly, in examining the fairness and sufficiency of
       the fiscal note summary, the summary's words are considered sufficient and
       fair where they adequately and without bias, prejudice, or favoritism
       synopsize the fiscal note. See id. "[A] fiscal note summary is not judged
       on whether it is the 'best' language, only [on] whether it is fair." Missouri
       Mun. League, 303 S.W.3d at 583.

Brown, 370 S.W.3d at 654.

       The Auditor received information concerning three potential types of public costs

to the State of Missouri of this proposal. First, the Auditor received information from the

Missouri Department of Social Services regarding potential costs of at least $115,000

annually. These costs are not in dispute.

       Second, the Auditor received an email from Matthew Levsen, Associate Chief

Financial Officer of University of Missouri Health Care. The email stated that University

of Missouri Health Care determined that the Initiative "could create additional expenses

in excess of $100,000," which would be incurred "as the payment systems change for

health care services from 'fee for service' methodology to a more bundled or capitated

payment system." He added, however, that “[t]he amounts are not able to be estimated at




                                            9
this time due to the language of the petition itself and the future timeline of the payment

systems."

       Third, the Auditor received information from the Initiative's proponents that

indicated (1) employees and personal care attendants would receive an increase in wages

and benefits as a result of the Initiative and (2) more than 300 for-profit companies would

see a corresponding decrease in profits.

       The Fiscal Summary prepared by the Auditor states:

       State universities and governmental entities estimate one-time costs
       exceeding $100,000 with the total costs being unknown and increased
       annual costs of at least $115,000. Local governmental entities estimate no
       costs or savings from this proposal.

       Plaintiffs first argue that the reference to "universities" is misleading because only

one individual responded, Mr. Levsen, the Associate Chief Financial Officer of

University of Missouri Health Care. The Auditor responds that the opening line is used

in the collective for all of the response information received by the Auditor's Office and

not only to those entities that actually responded and that it was reasonable to infer that

Mr. Levsen's response was sent by the University of Missouri System as a whole.

       We agree with the Auditor that the use of the collective term "state universities

and governmental entities" is not unfair or insufficient, even if only one entity did in fact

respond. For the purposes of a summary, limited by statute to fifty words, it is reasonable

for the Auditor's office to state that this single estimated cost was the only estimate

provided by the state's universities. It would be unnecessarily cumbersome to require the

Auditor's office to more specifically categorize each response received in a summary.


                                             10
The Auditor is tasked with soliciting information from state and local governmental

entities to determine what probable affect the initiative would have on state and local

finances.   Framing the response as one collectively from the state universities and

governmental entities as a whole is not misleading or unfair.

      In addition, here it was a reasonable inference for the Auditor to make that the

response it received from Mr. Levsen represented the University of Missouri System as a

whole. The record shows that Mr. Levsen's response was made per the direction of Ryan

Rapp, Controller for the University of Missouri System, who was copied on the response.

(LF 151). As multiple universities are part of that system, it was reasonable to infer that

the response sent by Mr. Levsen, at the direction of the University of Missouri System

Controller, represented a response on behalf of the system as a whole.

      The Plaintiffs also argue that the inclusion in the summary of "one-time costs

exceeding $100,000 with the total costs being unknown" is not supported by the response

received from Mr. Levsen. We disagree. Mr. Levsen's response was clear that the

proposal "could create additional expenses in excess of $100,000" and that the expenses

"would be incurred as the payment systems change for health care services from 'fee for

service' methodology to a more bundled or capitated payment system."            The email

continues on to say that he is unable to give an estimate of the amounts "due to

uncertainty in the language and timeline of the change in the payment system." The

Auditor's conclusion that Mr. Levsen's estimate was a one-time cost was supported by

Mr. Levsen's statement that the costs would incurred due to the need to change the



                                            11
payment system. It was reasonable to infer that this cost was a singular cost as nothing in

Mr. Levsen's statement suggests that this cost would be recurring.

       Plaintiffs' argument that Mr. Levsen's cost estimate should not be included at all

because it is not definite enough must also fail. The Auditor must include submissions in

the fiscal note regarding the potential cost or savings to state or local government entities

as a result of the initiative. See Brown, 370 S.W.3d at 649-50. The role of the Auditor is

not to judge the merits of a fiscal impact submission, but only to examine to determine

whether the submission is complete, is relevant, has an identifiable source, and is

reasonable. Id. at 649. Mr. Levsen clearly stated that the costs to the university system

could be greater than $100,000 for the reason he provided but the actual costs were

indeterminate due to ambiguity in the Initiative's language and timing.                These

determinations will almost always be estimates and nothing more can be expected. It is

fair to characterize Mr. Levsen's estimate in the fiscal note summary as "one-time costs

exceeding $100,000 with the total costs being unknown."

       The Plaintiffs also argue that the Fiscal Note Summary is inadequate because it

fails to account for impact on the State's tax revenue. The Plaintiffs impose on the

Auditor a duty it does not have. Our Supreme Court has recently described the function

of the Auditor as it relates to fiscal notes and summaries of proposed initiatives as

follows:

       In preparing the fiscal note, the auditor sends copies of the proposed ballot
       initiative to various state and local governmental entities requesting the
       entities review the same and provide information regarding the estimated
       costs or savings, if any, for the proposed ballot initiative. See sec.
       116.175.1 (stating that the auditor "may consult with the state departments,

                                             12
      local government entities, the general assembly and others with knowledge
      pertinent to the cost of the proposal"). The auditor chooses local
      governmental entities based on geography, population, and form of
      government to ensure a good cross-section of local governments that might
      be affected by the proposal are represented. Proponents, opponents, and
      members of the public may submit fiscal impact submissions also;
      however, the auditor has no duty to notify members of the public when he
      receives an initiative petition from the secretary of state.
              The auditor does not analyze or evaluate the correctness of the
      returned fiscal impact submissions. Rather, he or she examines the
      submissions to determine whether they appear complete, are relevant, have
      an identifiable source, and are reasonable. The auditor studies each
      submission regarding completeness, determining whether the entity's
      response conveys a complete representation of what the entity intended to
      send and if it reasonably is related to the proposal. He also reviews the
      submission to ensure there are no missing pages or breaks in the continuity
      of information. With respect to reasonableness, the auditor examines the
      submission to establish whether it addresses or diverges from the particular
      issue. The auditor's determination of reasonableness is based on the
      auditor's experience in state government and overall knowledge and
      understanding of business and economic issues. If the auditor concludes a
      submission is unreasonable, he or she determines what weight the
      submission will be given when preparing the fiscal note summary. If the
      auditor has any questions regarding the submission of an entity or needs to
      clarify an incomplete submission, he or she may conduct a follow-up
      inquiry.
              The auditor then drafts the fiscal note and fiscal note summary based
      solely on the responses he or she receives. The responses submitted are
      listed verbatim in the fiscal note with only minor editing. The fiscal note
      summary is a compilation of the various proposals and is intended to advise
      the voters about the potential cost or savings, if any, from the adoption of
      the initiative.

Brown, 370 S.W.3d at 649-50. (footnotes omitted). In addition,

      [t]he auditor is not required to compel and second-guess reasonable
      submissions from entities but is able to rely on the responses submitted.
      Nor should the auditor wade into the policy debates surrounding initiative
      petitions, which an independent investigation would entail [ . . . ] It is not
      the auditor's role to choose a winner among these opposing viewpoints by
      independently researching the issue himself, double-checking economic
      theories and assumptions, and adopting one side's view over another's in the
      resulting fiscal note.

                                           13
Id. at 650.

       While the Auditor received general statements regarding potential impacts on the

economy by the proponents of the Initiative, the Auditor received no submission that

provided a projection of an increase or decrease of tax revenue to the State. Having

received no submission regarding an impact on state finances for the Fiscal Note, it

would be improper for the Auditor to include comment upon any impact to state finances

in the summary. The Plaintiffs do not identify a submission or projection that they

believe should have been included by the Auditor, but rather argue that based upon

Missouri's tax structure there must be some impact. The analysis provided by Plaintiffs

on appeal regarding possible tax consequences is mere conjecture and, regardless, it was

not timely provided to the Auditor for inclusion in the Fiscal Note. As explained above,

it is not the Auditor's responsibility to undertake an independent investigation and

comment upon a possible impact to state finances if no submissions are made to the

Auditor describing those impacts.

       Point Two is denied.

                                       Point Three

       In Point Three on appeal, the Plaintiffs argue the trial court erred in certifying the

Fiscal Note because it is unfair and insufficient in that it fails to undertake any

examination of the initiative's impact on small businesses as Plaintiffs allege is required

by Section 116.175.1. The fairness and sufficiency standards set out above are equally

applicable to fiscal notes. See Brown, 370 S.W.3d at 653.


                                             14
       Section 116.175.1 provides, in relevant part, as follows:

       [U]pon receipt from the secretary of state's office of any petition sample
       sheet, joint resolution or bill, the auditor shall assess the fiscal impact of the
       proposed measure.        The state auditor may consult with the state
       departments, local government entities, the general assembly and others
       with knowledge pertinent to the cost of the proposal. Proponents or
       opponents of any proposed measure may submit to the state auditor a
       proposed statement of fiscal impact estimating the cost of the proposal in a
       manner consistent with the standards of the governmental accounting
       standards board and section 23.140, provided that all such proposals are
       received by the state auditor within ten days of his or her receipt of the
       proposed measure from the secretary of state.

(emphasis added). Thus, the language of the statute explicitly provides that proponents

or opponents of a measure, if they submit a proposed statement of fiscal impact, must

comply with Section 23.140, which provides, inter alia, that the statement include

whether the legislation would have an impact on small businesses. See §23.140.2(6).

Proceeding back to Section 116.175.2, the Auditor is required to "prepare a fiscal note

and a fiscal note summary for the proposed measure [ . . . . ]" The fiscal note "shall state

the measure's estimated cost or savings, if any, to state or local governmental entities."

§ 116.175.3 (emphasis added).        As is clear from the language above, there is no

requirement that the Auditor include a statement regarding the impact to small businesses

in the fiscal note and nothing requires the Auditor to undertake its own investigation on

the measure's impact to small businesses.

       Oddly, the Plaintiffs do not recognize that, regardless, the Auditor did include a

statement regarding the fiscal impact to small businesses in the Fiscal Note.               The

Auditor's practice is to include all submissions in the fiscal note, including statements

regarding impacts to small businesses, if they are timely received and meet the Auditor's

                                              15
standards for inclusion, described supra. As is required by Sections 116.175 and 23.140,

the proponents of the measure included a statement of impact to small businesses that

was included in the Fiscal Note. The Auditor followed its standard practice here and

nothing in the statute requires anything further.

       Point Three is denied.

                                      CONCLUSION

       The judgment is reversed with regard to the Summary Statement and remanded to

the circuit court for certification of a summary statement as follows:

       Shall Missouri law be amended to require in-home service providers
       and vendors to pay an employee or personal care attendant at least 85
       percent of the state funds they received under the MO HealthNet
       Program for the service provided by the employee or the personal care
       attendant to eligible individuals?

In all other respects, the judgment is affirmed.




                                           __________________________________
                                           Gary D. Witt, Judge

All concur




                                             16
