Freedom Foundation, V Public Disclosure Commission

• Court: Court of Appeals of Washington
• Decided: February 9, 2021
• Docket: 53889-0
• Status: Unpublished

Opinion

Filed Washington State Court of Appeals Division Two

February 9, 2021

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II FREEDOM FOUNDATION, a Washington No. 53889-0-II nonprofit organization,

Appellant ,

v. UNPUBLISHED OPINION

WASHINGTON STATE PUBLIC DISCLOSURE COMMISSION, a State of Washington government agency, and SERVICE EMPLOYEES INTERNATIONAL UNION POLITICAL EDUCATION & ACTION FUND, an IRS 527 political committee,

Respondent.

MAXA, J. – The Freedom Foundation (Foundation) filed an administrative complaint with

the Washington State Public Disclosure Commission (PDC), alleging that Service Employees

International Union Political Education and Action Fund (SEIU PEAF) had violated the Fair

Campaign Practices Act (FCPA), chapter 42.17A RCW. The PDC dismissed the Foundation’s

complaint and issued a warning letter to SEIU PEAF.

The Foundation filed a petition for judicial review under the Administrative Procedures

Act (APA), chapter 34.05 RCW, challenging the PDC’s dismissal of its complaint regarding

SEIU PEAF. The superior court dismissed the Foundation’s petition under CR 12(b)(6) based

on a lack of standing. The Foundation appeals the superior court’s dismissal of its petition. No. 53889-0-II

We follow this court’s recent decision in Freedom Foundation v. Bethel School District,

14 Wn. App. 2d 75, 469 P.3d 364 (2020), review denied, 478 P.3d 83 (2021), which addressed

the same standing issue and concluded that the Foundation did not have standing to seek judicial

review of the PDC’s dismissal of its complaint to the PDC. Accordingly, we affirm the superior

court’s order dismissing the Foundation’s petition for judicial review.

FACTS

SEIU PEAF is registered as an out-of-state political committee with the PDC. Since

August 2004, SEIU PEAF has filed form C5 reports with the PDC to report contributions or

expenditures to or on behalf of Washington candidates or political committees.

In February 2019, the Foundation filed a complaint with the PDC alleging that SEIU

PEAF had failed to timely and accurately file its C5 reports in violation of an FCPA provision,

RCW 42.17A.250. RCW 42.17A.250 sets forth the campaign finance requirements for out-of-

state political committees. SEIU PEAF responded to the allegations against it, conceding

inadvertent errors on at least four occasions regarding its C5 reports.

The PDC reviewed the complaint, the PDC contribution and expenditure database for

SEIU PEAF activities, the C5 forms and amended C5 forms filed by SEIU PEAF, and the

response to the complaint filed by SEIU PEAF.

In May, the PDC sent a letter to the Foundation responding to the Foundation’s complaint

regarding SEIU PEAF. The letter outlined the PDC’s findings regarding the Foundation’s

allegation, and stated that the facts did not amount to an actual violation warranting further

investigation. The letter further stated that the PDC would be formally warning SEIU PEAF

regarding the importance of filing timely and accurate C-5 reports. The letter concluded by

stating that the PDC was dismissing the Foundation’s remaining allegations against SEIU PEAF.

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The Foundation filed a petition for judicial review of the PDC’s decision to dismiss the

Foundation’s complaint to the PDC regarding SEIU PEAF’s conduct. The PDC filed a motion to

dismiss under CR 12(b)(6), arguing that the Foundation lacked standing to seek judicial review

under the APA. The superior court granted the PDC’s motion to dismiss.

The Foundation appeals the superior court’s order dismissing the petition for judicial

review.

ANALYSIS

A. STANDARD OF REVIEW – CR 12(b)(6)

We review de novo a trial court’s ruling on a CR 12(b)(6) motion to dismiss. Wash.

Trucking Ass’n v. Emp’t Sec. Dep’t, 188 Wn.2d 198, 207, 393 P.3d 761 (2017). Dismissal is

appropriate where it appears beyond doubt that a plaintiff will be unable to prove any set of facts

that would justify recovery. Id. We assume the truth of the allegations in the plaintiff’s

complaint and may consider hypothetical facts not included in the record. Id.

B. STANDING FOR JUDICIAL REVIEW UNDER THE APA

The Foundation argues that it can seek judicial review under the APA based on both (1)

individual standing and (2) associational standing on behalf of its members. We disagree.

1. Legal Principles

We review standing de novo. City of Burlington v. Wash. State Liquor Control Bd., 187

Wn. App. 853, 861, 351 P.3d 875 (2015). A person has standing to obtain judicial review of an

agency action under the APA if that person is aggrieved or adversely affected by the agency

action. RCW 34.05.530. A person is aggrieved or adversely affected only when three conditions

are present:

(1) The agency action has prejudiced or is likely to prejudice that person;

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(2) That person’s asserted interests are among those that the agency was required to consider when it engaged in the agency action challenged; and

(3) A judgment in favor of that person would substantially eliminate or redress the prejudice to that person caused or likely to be caused by the agency action.

RCW 34.05.530. The first and third conditions together are the “injury-in-fact” requirements, and

the second condition is the “zone of interest” requirement. Freedom Foundation, 14 Wn. App. 2d

at 86. All three conditions must be present for a person to have standing. Id. The person

challenging the agency action has the burden to prove standing. Id.

The “injury in fact” element requires the petitioner to show that the agency decision

caused some specific and perceptible harm. Id. There must be an invasion of a legally protected

interest. Snohomish County Pub. Transp. Benefit Area v. Public Emp’t Relations Comm’n, 173

Wn. App. 504, 513, 294 P.3d 803 (2013). And “[c]onjectural or hypothetical injuries are

insufficient to confer standing.” Freedom Foundation, 14 Wn. App. 2d at 86. Finally, the

petitioner must show that a favorable decision likely – not merely speculatively – will redress the

injury. Patterson v. Segale, 171 Wn. App. 251, 259, 289 P.3d 657 (2012).

The “zone of interest” requirement “limits judicial review of an agency action to litigants

with a viable interest at stake, rather than individuals with only an attenuated interest in the

agency action.” City of Burlington, 187 Wn. App. at 862. This requirement asks whether the

legislature intended the agency to consider the petitioner’s interests when taking the challenged

action. Id. at 863.

An organization that otherwise does not have individual standing may have associational

standing on behalf of its members. Associational standing is established when (1) the members

of the organization otherwise would have standing to sue in their own right, (2) the interests that

the organization seeks to protect are germane to its purpose, and (3) neither the claim nor the

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relief requires the participation of the organization's individual members. Wash. State Nurses

Ass’n v. Cmty. Health Sys., Inc., 196 Wn.2d 409, 415, 469 P.3d 300 (2020). The first two prongs

are constitutional, but the third prong is judicially created for administrative convenience and

efficiency. Id.

2. Individual Standing – Injury-in-Fact Requirement

The Foundation argues that the PDC’s dismissal of its complaint against SEIU PEAF

caused injury-in-fact because (1) it was a party to the PDC complaint; and (2) it suffered a

competitive harm to its interests as a result of SEIU PEAF’s FCPA violations. We disagree.1

a. The Foundation’s Complainant Status

The Foundation argues that the PDC’s dismissal of its complaint against SEIU PEAF

necessarily caused prejudice because it was a party to that complaint. This court rejected an

identical argument in Freedom Foundation, 14 Wn. App. 2d at 87-88. We follow Freedom

Foundation.

In Freedom Foundation, the Foundation filed a PDC complaint against a school district

regarding its processing of payroll deductions. Id. at 79. The PDC found that the evidence did

not support a violation and closed the matter. Id. The Foundation sought judicial review under

the APA. Id. The Foundation argued that it had standing to seek judicial review because it was

a party to the PDC complaint. Id. at 85.

First, the court referenced WAC 390-37-030(1), which states, “When a complaint is filed

with the PDC other than by PDC staff pursuant to WAC 390-37-040, neither the complainant nor

any other person shall have special standing to participate or intervene in any investigation or

1 Because we hold that the Foundation cannot satisfy the injury-in-fact requirement, we do not address the zone of interest requirement.

5 No. 53889-0-II

consideration of the complaint by the commission or its staff.” The court stated, “The FCPA

does not confer standing on a complainant, and a complainant does not have the ability to

participate in any proceeding unless requested by the PDC.” Freedom Foundation, 14 Wn. App.

2d at 87.

Second, the court referenced RCW 34.05.010(12), which states that under the APA, a

party to an agency proceeding is “(a) A person to whom the agency action is specifically

directed; or (b) A person named as a party to the agency proceeding or allowed to intervene or

participate as a party in the agency proceeding.” RCW 34.05.010(12). The court stated:

Freedom Foundation was not a party to the PDC complaint. The PDC action was not specifically directed toward Freedom Foundation, and it was not named or allowed to intervene as a party in any PDC proceeding. Rather, Freedom Foundation retained the status of a complainant and submitted documentary evidence to the PDC during its preliminary investigation. Because Freedom Foundation was not a party to the complaint, it fails to show how its complainant status resulted in a specific and perceptible harm when the PDC denied its complaint.

Freedom Foundation at 87-88.

The Foundation relies on this court’s unpublished decision in Automotive United Trades

Organization v. Washington Public Disclosure Commission, No. 50652-1-II, (unpublished)

(Wash. Ct. App. May, 14, 2019) [AUTO], http://www.courts.wa.gov/opinions/pdf/D2%2050652-

1-II%20Unpublished%20Opinion.pdf. In that case, the PDC declined to take action on AUTO’s

citizen action notice and issue a decision letter. Id. at 1. AUTO filed a petition for judicial

review more than 30 days after the PDC’s decision, which was beyond the APA’s appeal

deadline. Id. at 3. However, AUTO argued that the deadline was extended because it did not

realize that the decision would result in prejudice until later and therefore it did not have standing

to seek judicial review until that time. Id. at 4. This court rejected this argument because AUTO

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should have known that the decision letter would cause it “specific and perceptible harm,” and

therefore held that AUTO’s petition for review was untimely. Id. at 5.

The Foundation argues that AUTO is directly on point, and stands for the proposition that

a complainant suffers specific and perceptible harm when the PDC dismisses a complaint. But

this court rejected this argument in Freedom Foundation:

But in AUTO we did not consider whether a complainant had standing to petition for review. Rather, we held that the complainant failed to timely file its petition for review, thus, the complainant was time-barred from filing the action. AUTO did not consider the question presented in this case.

14 Wn. App. 2d at 88.

Accordingly, we reject the Foundation’s first argument regarding injury-in-fact and

conclude that the Foundation’s status as a complainant does not confer standing.

b. Competitive Harm

The Foundation argues that it can satisfy the injury-in-fact requirement because it

suffered “competitive harm” in that SEIU PEAF’s FCPA violations frustrated the Foundation’s

interest in assuring enforcement of the FCPA’s policies. The Foundation also claims that

competitive harm will result because in the future union-affiliated entities who the Foundation

routinely opposes will be able to cite to the PDC’s decision.

This court in Freedom Foundation rejected the same argument. 14 Wn. App. 2d at 88-

89. The court stated:

Here, Freedom Foundation cannot show an economic or competitive injury. Freedom Foundation identifies no direct economic effect or material adverse injury from the PDC’s denial of the complaint. Further, Freedom Foundation fails to show any specific or perceptible harm. The mere fact that an unfavorable result could become precedent to Freedom Foundation’s potential future litigation is not a harm under RCW 34.05.530.

Id. at 89 (emphasis added). We follow Freedom Foundation.

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The Foundation cites to Snohomish County Public Transportation, 173 Wn. App. 504. In

that case, a public transportation agency sought judicial review of a decision by the Public

Employment Relations Committee (PERC). Id. at 508-09. PERC’s decision concerned an unfair

labor practice complaint which had the effect of withholding the benefit of a rule affecting the

transportation agency’s negotiation with employee unions. Id. at 514.

This court held that the transportation agency had standing based on an economic injury

because the decision adversely affected the agency’s ability to negotiate with the unions. Id. at

513-14. Therefore, the transportation agency was able to demonstrate a direct economic effect of

losing this bargaining leverage. Id. at 514. But here, unlike the transportation agency in

Snohomish County Public Transportation, Freedom Foundation cannot demonstrate a direct

economic effect stemming from the PDC’s decision.

The Foundation also cites to Seattle Building and Construction Trades Council v. The

Apprenticeship and Training Council, 129 Wn.2d 787, 920 P.2d 581 (1996). In that case, the

Trades Council sought judicial review of a decision by the state Apprenticeship Council. Id. at

790. The Apprenticeship Council’s decision involved approving the standards for and

registration of a competing apprenticeship program over the protest of the Trades Council

without an adjudicatory hearing, which would likely alter competitive conditions for existing,

approved programs. Id. at 796. Specifically, the evidence showed that the entry of additional

programs into the apprenticeship market would mean more competition for attracting qualified

apprentices among existing, approved programs. Id.

The Supreme Court held that the Trades Council had standing based on a probable

economic injury. Id. But here, unlike the petition in Trades Council, the Foundation does not

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demonstrate an immediate or probable economic or competitive injury resulting from the PDC’s

dismissal of the complaint.

Accordingly, we reject the Foundation’s second argument regarding injury-in-fact and

conclude that the Foundation fails to show that it suffered competitive harm.

3. Associational Standing Analysis

The Foundation argues that it has associational standing because the Foundation has

members who were harmed by the PDC’s failure to address SEIU PEAF’s FCPA violations. We

disagree.

The Foundation vaguely asserts that all of its supporters were harmed by the PDC’s

decision not to punish SEIU PEAF’s illegal activities. At the same time, the Foundation argues

that the PDC’s dismissal of its complaint against SEIU PEAF affects everyone who participates

in representative democracy in Washington.

However, as stated above, to obtain standing a petitioner must show that that the agency

decision caused some specific and perceptible harm, not some conjectural or hypothetical injury.

Freedom Foundation, 14 Wn. App. 2d at 86. And “a petitioner’s interest ‘must be more than

simply the abstract interest of the general public in having others comply with the law.’ ”

Thompson v. City of Mercer Island, 193 Wn. App. 653, 663, 375 P.3d 681 (2016) (quoting

Chelan County v. Nykreim, 146 Wn.2d 904, 935, 52 P.3d 1 (2002)). The Foundation’s vague

assertions fail to show how any of its members were specifically and perceptibly harmed by the

PDC’s decision or why they have more than an abstract interest in enforcement of the FCPA.

Accordingly, we hold that the Foundation fails to show that it has associational standing.

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4. Summary

The Foundation cannot show it has individual standing or associational standing to seek

judicial review of the PDC’s dismissal of its complaint regarding SEIU PEAF. Therefore, we

hold that the trial court did not err when granting the PDC’s motion to dismiss the Foundation’s

petition based on lack of standing. Because the Foundation lacks standing, we do not address the

Foundation’s argument that the PDC lacked statutory authority to dismiss its complaint.

CONCLUSION

We affirm the superior court’s order dismissing the Foundation’s petition for judicial

A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2.06.040, it is so ordered.

MAXA, J.

We concur:

SUTTON, A.C.J.

CRUSER, J.