The South Dakota Supreme Court says an Attorney General's ballot explanation of an initiated measure satisfies state law. That measure, which voters will consider in November, requires a cap of 36 percent interest and fees on short-term loans.
Justices upheld a lower court's refusal to look at studies showing that capped interest rates can destroy the short-term lending industry.
During oral arguments in February, plaintiffs' lawyer Alan Simpson said the Attorney General's opinion should include the damage done to the industry.
"This case arises because it's not always clear what the purpose and effect of a statute is," Simpson said. "Sometimes proponents will draft something which is misleading or may require reference to either other laws or other facts."
Simpson said Sixth Circuit Judge Kathleen Trandahl should have considered studies submitted by plaintiffs indicating a 36 percent cap has eliminated short-term lending in other states.
But the Supreme Court holds that Trandahl wasn't required to sort through 100 pages of extraneous information to determine if there was something in there worthy of judicial notice.
The high court says state law requires the Attorney General to offer an objective summary to educate voters, relying on language in the proposed measure. And even if the true purpose of the initiated measure is to end short-term lending in South Dakota, no language in the measure says so, and the measure doesn't prohibit continued operation of the industry.
Justices suggest that the solution to educating the public further is political dispute and advocacy.
