UNITED STATES DISTRICT COURT DISTRICT OF MAINE DENNIS BAILEY, Plaintiff v.

STATE OF MAINE COMMISSION ON GOVERNMENTAL ETHICS AND ELECTION PRACTICES, et als. Defendants and ELIOT CUTLER Intervenor-Defendant ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Civil No. 1:11-cv-00179-NT

PLAINTIFFS STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY JUDGMENT Plaintiff Dennis Bailey his undersigned counsel and pursuant to D. Me. Local Rule 56(b), submits this Statement of Material Facts in Support of her Motion for Summary Judgment. 1. Petitioner/Plaintiff Dennis Bailey (Bailey) is a resident of the Town of Freeport,

Maine. (Bailey Dec. 1) 2. Bailey is presently the principal of a public relations firm named Savvy, Inc.

Savvys principal place of business is in Portland, Maine. (Bailey Dec. 3) 3. Bailey has a degree in Journalism from the University of Maine and from 1976 to

1990 Bailey worked as a journalist and reporter for the Lewiston Daily Sun, the Biddeford Journal Tribune, the Maine Times and the Portland Press Herald. In addition he also worked for more than seven years as a freelance reporter for The Wall Street Journal, Time Magazine, Life Magazine, People Magazine and Playboy. (Bailey Dec. 4) 1

4.

From 1990 to 1993 Bailey was press secretary to U.S. Congressman Tom

Andrews from Maine. (Bailey Dec. 5) 5. From 1993 to 1994 Bailey was press secretary to Tom Allen, a candidate for

governor, also from Maine. (Bailey Dec. 6) 6. From June 1994 to 2000 Bailey worked as press secretary and political advisor to

Angus King in his campaign for Governor and then continuing on as press secretary, policy advisor and speech writer to Governor King. (Bailey Dec. 7) 7. In 2000 Bailey left the employment of Governor King and started his own public

relations company named Savvy, Incorporated. Bailey still operates that firm. (Bailey Dec. 8) 8. Through his firm Bailey provides public relations and electoral and referendum

consulting services for clients for businesses, non-profits, individuals and referenda campaigns. (Bailey Dec. 9) 9. Bailey maintains a personal web publication in connection with his public

relations company, and he sometimes helps professional journalists with reporting or sourcing of stories. Since 1990, he has continued to use his journalism skills of researching, writing, and editing material on matters of public concern as a press secretary, a speech writer, and a public relations consultant. (Bailey Dec. 10) 10. In approximately late 2008 Bailey was hired by Rosa Scarcelli to provide public

relations services for her business company named Stanford Management. (Bailey Dec. 11) 11. In September 2009 Bailey stopped working for Stanford Management and went to

work as a political consultant for Ms. Scarcelli in her campaign to seek the Democratic Party nomination to be the Governor of Maine in the Democratic primary to be held in June 2010. (Bailey Dec. 12)

12.

While working for Scarcellis Democratic primary campaign, Bailey received

some research material compiled by Thomas Rhoads, Scarcellis husband, about the background and career of Eliot Cutler who was at that time an independent candidate for Governor of Maine. (Bailey Dec. 13) 13. The research provided by Mr. Rhoads had been done on his own time using

publicly accessible internet sites, including online newspaper archives. (Bailey Dec. 14; Rhoads Dep. 19:3-5, 32:17, ) 14. The research provided to Bailey by Rhoads was not used by the Scarcelli

campaign as part of Scarcellis campaign for the Democratic nomination for Governor. (Bailey Dec. 15; Scarcelli Dep. 72:17-23; Rhoades Dep. 32:17, 33:14-17) 15. Scarcelli lost the Democratic primary in June 2010 and thereafter was not a

candidate for Governor of Maine and Bailey stopped working for her. (Bailey Dec. 16) 16. Following Scarcellis loss in the Democratic primary, Bailey was hired as a

political consultant by Shawn Moody to advise Moody in his campaign as an independent candidate for Governor of Maine. During this time, Bailey had other business clients as well. (Bailey Dec. 17 and 18) 17. Beginning in late June or early July 2010, without informing Moody or seeking

his approval, Bailey independently undertook to confirm the research on Eliot Cutler that Bailey had been provided by Rhoads and in addition he did additional research himself using internet search tools such as Google. (Bailey Dec. 19) 18. In late June following Scarcellis loss in the Democratic primary, and without

informing Moody or seeking his approval, Bailey approached several news reporters and attempted to get them interested in the research on Eliot Cutler and to write or broadcast news

articles on the contents of the research. No reporter or broadcaster expressed interest. (Bailey Dec. 20) 19. After Scarcelli was no longer a candidate, and after his unsuccessful attempt to

interest a news reporter or broadcaster in the Eliot Cutler research, Bailey became aware of attempts by Rhoads to sell the Eliot Cutler research to the campaigns of one of the other then existing gubernatorial candidates. Bailey did not personally participate in any attempt to sell the information. (Bailey Dec. 21) 20. Because Bailey does not and did not own, have an interest in or control a

newspaper, magazine, or other periodical or a TV or radio station, Bailey decided in August 2010 the he would publish and publicly disseminate the Eliot Cutler research himself using the World Wide Web (the web). (Bailey Dec. 22-23) 21. Before publishing the Eliot Cutler research on the web, Bailey undertook to edit

and rewrite the materials provided to him by Rhoads. (Bailey Dec. 24) 22. On or about August 30, 2010, Bailey used the Eliot Cutler research to create a

website entitled The Secret File on Eliot Cutler, (hereinafter, the Cutler Files) which website was publicly accessible through the internet at www.cutlerfiles.com. (Bailey Dec. 25 and Bailey Ex. 1) 23. Bailey created the Cutler files because he had information that he believed the

public should know before casting their vote for Governor of Maine in the 2010 general election. (Bailey Dec. 26) 24. The content of the Cutler Files was substantiated by citations to more than 100

internet sites, many of which were articles, books and reports published by mainstream print journalism sources such as the Los Angeles Times. (Bailey Dec. 28 and 29)

25.

In order to make it interesting to the reader, The Cutler Files website also

contained photographs and various depictions of Cutler to illustrate various points made in the text, not unlike the editorial cartoons of most newspapers. (Bailey Dec. 30) 26. Bailey chose the name The Cutler Files in order to draw interest, but the

material contained on the publication was anything but secret. (Bailey Dec. 31) 27. After the initial posting of the Cutler Files website, Bailey made six subsequent

additions and changes in the site. Some of those changes involved the addition of substantial additional text. (Bailey Dec. 27) 28. Before creating the Cutler Files website, Bailey did not inform or seek the

approval of Shawn Moody or Rosa Scarcelli. (Bailey Dec. 31) 29. Neither Scarcelli nor Moody authorized Bailey to create the Cutler Files website

or to post the Eliot Cutler research to the website. (Bailey Dec. 32) 30. No one paid Bailey or reimbursed any of his expenses to create the Cuter Files.

(Bailey Dec. 33) 31. Baileys purpose in composing and creating the Cutler Files website was to

provide information to the public about Eliot Cutler, since Bailey believed that the information was being ignored by the mainstream print and broadcast media. (Bailey Dec. 34) 32. The Cutler Files website contained information about Mr. Cutlers time as a staff

member in the Carter administration, his work as a lawyer and lobbyist in China, and information about Mr. Cutlers property and investment holdings. (Bailey Dec. 35 and Bailey Ex. 1) 33. Bailey believed at the time, and he still believes, that all of the material on the site

about Mr. Cutler was the truth. (Bailey Dec. 36)

34.

The truthfulness of the information contained in the Cutler Files website has

never been controverted by Mr. Cutler or his supporters. (Bailey Dec. 37) 35. Mr. Cutler and others have objected to Bailey about the tone of the site, but not to

the truthfulness. (Bailey Dec. 38) 36. Mr. Cutler has never sued or threatened to sue Bailey for defamation, even though

Cutler could do so if he could show that Bailey put any factual statements in The Cutler Files knowing they were untrue or with reckless disregard for truthfulness. (Bailey Dec. 39) 37. The content of the Cutler Files was as much news as any other kind of political

reporting. (Bailey Dec. 41; Grosswiler Dec. 9, 15 and 16) 38. The Cutler Files contained both news and editorial opinion that was just like

that published in numerous magazines and journals including the Maine Times and Time Magazine. Like the Cutler Files, virtually all the articles in Time Magazine for which Bailey worked, plus journals such as The New Republic, The Nation, The National Review, and others, are combinations of fact and opinion. (Bailey Dec. 42; Grosswiler Dec. 9, 15 and 16) 39. Bailey published the Cutler Files website with the intent of providing useful

information to the Maine public that they could weigh and use in deciding who to vote for in the November 2010 gubernatorial election. (Bailey Dec. 43) 40. There was more news about the background of Mr. Cutler in The Cutler Files than

in anything reported by the mainstream press leading up to the November 2010 election. (Bailey Dec. 44) 41. The total amount spent on the research for the Cutler Files and to create and

maintain the Cutler Files website was $91.38. Of that total, Bailey spent $35.00 most of which

was simply for registering and hosting the website online and buying a few online news articles. (Bailey Dec. 40) 42. After the initial posting of the Cutler Files website by Bailey, Bailey made at least

six (6) subsequent additions and changes in the site, adding additional information on each occasion. ( Bailey Dec. 27) 43. According to Defendants expert, Jason Shepard, the Cutler Files contained

interesting pieces of information that were potentially useful for Maine voters in the 2010 gubernatorial election. (Shepard Dep. 66:1-5, 20-23) 44. According to Defendants expert, Jason Shepard, if a journalist as defined by

Shepard had produced the content of the Cutler Files it would be journalism. (Shepard Dep. 24:17-22) 45. According to Defendants expert, Jason Shepard, if the content of the Cutler Files

had been published by a newspaper or magazine it would have constituted journalism. (Shepard Dep. 60:20-22) 46. According to Defendants expert, Jason Shepard, the content of the Cutler Files

website was news. (Shepard Dep. 57:18-20) 47. When Bailey created the Cutler Files, he did not identify himself as the person

who financed the expenditure for the communication on the website nor did he include any statement that the website was not authorized by a candidate. (Bailey Dec. 45) 48. Prior to creating the Cutler Files website, Bailey was well-known in Maine for his

previous work as a reporter for several Maine newspapers, as press secretary to former U.S. Representative Tom Andrews and former Maine Governor Angus King, as media and policy

adviser to former Governor John Baldacci, and as one of the campaign coordinators of several statewide anti-casino campaigns. (Bailey Dec. 46) 49. Because he was so well known, Bailey was concerned that his identity would

detract from the information contained in the Cutler Files, and that the information contained in the blog would be evaluated in connection with him and his clients, rather than on its own merits, if he were publicly identified with the site. (Bailey Dec. 46) 50. In addition, because Bailey currently makes his living in the public relations and

communications field, he was concerned about personal and economic retaliation if his identity as the author of the Cutler Files was made public. (Bailey Dec. 47) 51. Bailey also knew that he was taking on a very public fight with a very wealthy

powerful individualone who might have turned out to be elected Governor. (Bailey Dec. 48) 52. Baileys original concern was in fact justified, since following the public

disclosure of his name as one of the authors of the Cutler Files, he has in fact received anonymous threatening phone calls. The situation became so intolerable that Baileys secretary quit. (Bailey Dec. 49) 53. In light of these concerns, Bailey made the choice to speak anonymously through

the Cutler Files. (Bailey Dec. 50) 54. By letter dated September 3, 2010, the Eliot Cutler Campaign filed a complaint

with the Maine Commission on Governmental Ethics and Election Practices (the Commission) alleging violations of Maines election laws by the persons who produced The Cutler Files and requesting an investigation of their complaint. (Agency Record as filed in Court by the Commission (Agency Record) at Court Docket Doc. No. 4-2, p. 75-76; Bailey Dec. 51)

55.

As part of its investigation the Commission interviewed Bailey and others and

examined a variety of records and documents. (Agency Record at Doc. No. 4-1, p. 46-51; Bailey Dec. 52) 56. Baileys counsel, along with attorneys from the Maine Civil Liberties Union and

the Electronic Frontier Foundation, urged the Commission to allow him to continue to publish the Cutler files website anonymously and shared with the Commission administrative material, including regulations and guidance, from the Federal Election Commission, that exempted internet news publications from election regulation, (Agency Record at Doc. 4-3, p. 19-38; 4-4; p. 38-43; 4-4, p. 44-49; 4-2, p. 36-37; Bailey Dec. 53 and 54) 57. Cutlers lawyers presented arguments to the Commission that the authors of the

Cutler Files had no right of anonymity and were not covered by any exemption that applied to news, commentaries and editorials by newspapers, magazines, TV, radio or other periodicals, (Agency Record at Doc. 4, p. 24-28; 4-1, p. 22-30; 4-4. p. 29-36; 4-2, p. 6-10) 58. Baileys lawyers also argued that there should be a de minimus exception to the

statutory disclosure requirements, since the total spent to research and publish The Cutler Files was only $91.38. (Agency Record at Doc. 4-3, p. 19-38; 4-4; p. 38-43; 4-4, p. 44-49; Bailey Dec. 55) 59. On September 13, 2010 Bailey received notice from the Commission that the

failure to include a statement on the Cutler Files website that the site was not authorized by a candidate constituted a violation of the Campaign Reporting Act. Thereafter, and within 10 days of receipt of that notice, Bailey added such statement to each page of the Cutler Files blog. (Bailey Dec. 56)

60.

Faced with the ongoing investigation by the Commission, Bailey discontinued

The Cutler Files on October 29, 2010. ( Bailey Dec. 57) 61. On January 31, 2011, the Commission issued a final determination finding that

Bailey had committed two violations of the Maine Campaign Reporting Act through the creation and maintenance of the Cutler Files. Notice of that final was received by Bailey on February 14, 2011. (Agency Record at Doc. No. 4-2, p. 58-65; Bailey Dec. 58 and Bailey Ex. 2) 62. In issuing its decision the Commission found as a fact that (1) Bailey and Rhoades

had spent less than $100 in producing the Cutler Files website, and (2) that the website was not authorized or approved by any candidate. (Agency Record at Doc. No. 4-2, p. 62-63) 63. The Commission found that Bailey had violated 21-A M.R.S.A. 1014(2) and

1014(2-A) because he did not include his name and address on the website. (Agency Record at Doc. No. 4-2, 64-65; Bailey Dec. 59) 64. The Commission also found that Bailey had violated 21-A M.R.S.A. 1014(2) by

not including a disclosure statement declaring that the communication was not authorized by a candidate. (Agency Record at Doc. No. 4-2, 64-65; Bailey Dec. 60) 65. In issuing its decision the Commission held that the Cutler Files did not qualify

for the statutory exemption for news, commentary and editorials in 21-A M.R.S.A. 1012(3)(B)(1). (Agency Record at Doc. No. 4-2, 64-65; Bailey Dec. 61 ) 66. As a result of its decision, the Commission fined Bailey $200. (Agency Record at

Doc. No. 4-2, p. 65; Bailey Dec. 62) 67. It is Baileys desire to in the future use a website or another form of internet

communication to engage in online political speech, including perhaps even anonymous online

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political speech, but at present he is fearful of doing so in light of the Commissions decision. (Bailey Dec. 64) 68. Websites like the Cutler Files (what are sometimes referred to as blogs) can

include news and commentary that are just as important and valid as that which appears in newspapers, television, and the radio. (Grosswiler Dec. 9) 69. Not all blogs are journalism, but neither is all content in those more traditional

media. (Grosswiler Dec. 9) 70. People who create blogs (bloggers) create journalism when they actively

collect, analyze, and report information and news, as well as when they write and publish opinion and commentary. These activities are what makes any particular activity journalism, and not whether a person is paid or unpaid, regularly or occasionally involved, or published in print, over the airwaves, through cable, or across the internet. (Grosswiler Dec. 9) 71. There is a long tradition of anonymous and pseudonymous journalism dating back

to the founding era, and it is a vital part of our nations history. The Editor-and-Chief of a popular libertarian blog, Daily Roast (http://www.mydailyroast.com/), uses the pseudonym Federal Farmer, in honor of the anti-Federalist pamphleteer whose identity has never been conclusively determined (though many scholars believe he was Richard Henry Lee). (Grosswiler Dec. 10) 72. Throughout the early years of the Republic, leading political figures published

writings under pseudonyms, including Thomas Jefferson and Benjamin Franklin. (Grosswiler Dec. 10) 73. One of the leading journalists of the Revolutionary War period, Samuel Adams,

published under the pen-name Vindex the Avenger. (Grosswiler Dec. 10)

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74.

Other examples of anonymous authors include Alexander Hamilton, John Jay and

James Madison who collectively wrote the Federalist Papers under the collective pseudonym of Publius. (Grosswiler Dec. 10) 75. In effect blogs are the modern day equivalent of nailing an anonymous

news/political flyer to a tree or post in the town square, which practice goes back to the earliest days of our country. (Grosswiler Dec. 10) 76. Blogs such as the Cutler Files are a vital part of the new media ecology. There

are tens of thousands of blogs and Web sites where nontraditional journalists report, analyze, and opine on a range of issuessome covered by their mainstream counterparts, and some not. Many of these efforts are serious and purposeful, and a number of them have gained substantial followings. (Grosswiler Dec. 11) 77. Though the technology has changed, the mode of journalism produced by

bloggers would have been familiar to the generation that drafted and ratified the United States Constitution. (Grosswiler Dec. 11) 78. Small presses, suffused with individual personality of the owner, were the rule.

One person, or a small group of people, were responsible for gathering the information, writing the articles, setting the type, running the press, and distributing the papers to the public. (Grosswiler Dec. 11) 79. Bloggers are less likely to have ink-stained hands than their antecedents, but

their activities are no different in kind from those of traditional so-called mainstream journalists. (Grosswiler Dec. 11)

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80.

News and commentary on blogs has fulfilled, and will continue to fulfill, one of

the central purposes of journalism: to serve as a watchdog against the government. (Grosswiler Dec. 12) 81. Blogs also serve a second purpose of informing the public of facts and opinions

that may not be carried in mainstream journalistic sources. (Grosswiler Dec. 12) 82. Blogs have done more than simply carry on the watchdog function of traditional

journalistic media; blogs have revitalized and reinvigorated journalism, particularly the watchdog function. (Grosswiler Dec. 12) 83. While political blogs often contain a point of view, that does not disqualify them

as journalism. Indeed, viewpoint-based journalism dominated the early years of the American Republic up through the early parts of the 20th Century and many of the newspapers during the early days of our country were explicitly either loyalist or revolutionary, ratification or antiratification, Republican or Federalist. (Grosswiler Dec. 13) 84. Even today many newspapers, magazines, and television networks embody

explicit political points of view, and yet they are widely recognized as forms of journalism. The fact that blogs engage in this same practice does not disqualify them from being classified as journalism. (Grosswiler Dec. 13) 85. Modern day 21st Century journalists themselves regard blogs as journalism.

Writers for the Washington Post and the New York Times increasingly cite blogs as credible news sources, and in 2010 the Associated Press announced that blogs should be cited as a news source by its writers. (Grosswiler Dec. 14)

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86.

Many bloggers have made important contributions to public understanding of

news events, and blogs have reinvigorated the watchdog function of journalism. (Grosswiler Dec. 14) 87. The information and facts contained in The Cutler Files is clearly news. It

provides information to the reader relating to an ongoing and important event, the 2010 gubernatorial election. (Grosswiler Dec. 15) 88. The Cutler Files is a combination of news and commentary, but that does not

make it any different from mainstream print journals such as The New Republic, The Nation, The National Review, Rolling Stone, The Weekly Standard, The American Spectator, Mother Jones and even Time and Newsweek. (Grosswiler Dec. 16) 89. The fact that Mr. Bailey is not a professional, paid journalist does not make The

Cutler Files any different in form or content from traditional mainstream newspapers, magazines or broadcast news. What matters is the content, not the profession of the writer. (Grosswiler Dec. 17) 90. If The Cutler Files had been read on TV by Sean Hannity or Bill OReilly or

Rachel Maddow or other news reporters or political commentators, it would have been exempt from the requirements of Maine election laws. But because Mr. Bailey published the article on his website or blog, it is subject to mandatory disclaimers requiring identification of the author. There is no rational basis for this distinction. (Grosswiler Dec. 18) 91. Regardless of whether Mr. Bailey can be personally classified as journalist, The

Cutler Files is news and is political commentary just as are the journals referred to above. (Grosswiler Dec. 19)

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Dated: February 9, 2012

/s/John M.R. Paterson John M.R. Paterson Ellen M. Palminteri BERNSTEIN SHUR 100 Middle Street Portland, Maine 04104-5029 (207) 774-1200 Zachary Heiden ACLU of MAINE 121 Middle Street Portland, Maine 04101 (207) 774-5444 Attorneys for the Plaintiff

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CERTIFICATE OF SERVICE I hereby certify that I have electronically filed the foregoing Petitioners Statement of Material Facts in Support of Motion for Summary Judgment with the Clerk of Court using the CM/ECF system, which will send notification of such filing to all counsel of record.

Dated: February 9, 2010

/s/ John M.R. Paterson John M.R. Paterson

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