State Of Washington v. Grocery Manufacturers Association

CourtCourt of Appeals of Washington
DecidedNovember 10, 2020
Docket49768-9
StatusPublished

This text of State Of Washington v. Grocery Manufacturers Association (State Of Washington v. Grocery Manufacturers Association) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Of Washington v. Grocery Manufacturers Association, (Wash. Ct. App. 2020).

Opinion

Filed Washington State Court of Appeals Division Two

November 10, 2020

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II STATE OF WASHINGTON,

Respondent, No. 49768-9-II Consolidated with v. No. 50188-1-II

GROCERY MANUFACTURERS ASSOCIATION, PUBLISHED OPINION Appellant.

GROCERY MANUFACTURERS ASSOCIATION,

Appellant,

v.

STATE OF WASHINGTON,

Respondent.

MAXA, J. – The State filed a complaint alleging that the Grocery Manufacturers

Association (GMA) failed to comply with the Fair Campaign Practices Act (FCPA), chapter

42.17A RCW, relating to a failed 2013 Washington ballot initiative, Initiative 522 (I-522). I-522

would have required all packaged food products to identify ingredients containing genetically

modified organisms (GMOs). The trial court found on summary judgment that GMA had

committed multiple FCPA violations by not registering as a political committee and failing to

disclose the source of millions of dollars of donations GMA made to the “No on I-522” No. 49768-9-II / 50188-1-II

campaign. After a bench trial, the court imposed a $6 million civil penalty against GMA for

multiple violations of the FCPA and trebled the penalty to $18 million based on a finding that

GMA’s violation of the law was intentional.

GMA appealed, raising a number of statutory and constitutional issues. This court

affirmed the trial court’s ruling that GMA violated the FCPA by failing to register as a political

committee and rejected GMA’s constitutional challenges. However, the court held that the trial

court erred in ruling that GMA did not need to subjectively intend to violate the law to be subject

to treble damages under the FCPA. The court remanded the penalty for reconsideration under

the proper legal standard without reaching GMA’s argument that the total $18 million penalty

was an excessive fine under the Eighth Amendment to the United States Constitution.

On review, the Supreme Court affirmed that GMA violated the FCPA by failing to

register as a political committee and also by concealing the source of contributions, and affirmed

this court’s constitutional holdings. But the court reversed on the requisite intent for treble

damages, holding that the trial court had statutory authority to award treble damages. The court

remanded the case to this court for consideration of GMA’s Eighth Amendment excessive fines

claim.

GMA argues that the $18 million penalty constitutes an excessive fine because it is

grossly disproportionate to the gravity of the FCPA violations, which GMA characterizes as

solely a reporting offense that did not harm the voting public. The State argues that the penalty

is not an excessive fine because GMA not only failed to register as a political committee, it

intentionally concealed its members’ contributions to the No on I-522 campaign. The State

asserts that these actions harmed the public by preventing Washington voters from knowing the

identity of the companies that were spending millions of dollars to defeat the initiative.

2 No. 49768-9-II / 50188-1-II

We hold that the $18 million penalty does not violate the Eighth Amendment’s excessive

fines clause. Therefore, we affirm the trial court’s imposition of an $18 million civil penalty on

GMA.

FACTS

Background

Some of the relevant facts in this case are set out in this court’s opinion and the Supreme

Court’s opinion in GMA’s first appeal. State v. Grocery Manufacturers Ass’n, 5 Wn. App. 2d

169, 425 P.3d 927 (2018) (GMA I), rev’d in part, 195 Wn.2d 442, 461 P.3d 334 (2020) (GMA

II). In addition, the trial court made extensive findings of fact before imposing the civil penalty.

GMA did not challenge those findings, so they are verities on appeal.

GMA is a nationwide trade association that represents hundreds of food, beverage, and

consumer product companies. Generally, GMA seeks to promote reasonable and national food

labeling requirements.

In 2012, GMA opposed a ballot proposition in California, Proposition 37, which would

have required producers of packaged food products to label products containing GMOs. Later

that year, GMA learned about a similar proposed ballot initiative in Washington, I-522. In

January 2013, GMA began planning for an aggressive campaign in Washington to oppose I-522

while at the same time avoiding state financial disclosure requirements. As part of the

opposition campaign, GMA created the Defense of Brands (DOB) account to collect funds from

some of its member companies and to use them to oppose I-522. Two purposes of the account

were to “shield the contributions made from GMA members from public scrutiny” and to

“eliminate the requirement and need to publicly disclose GMA members’ contributions on state

campaign finance disclosure reports.” Clerk’s Papers (CP) at 4059.

3 No. 49768-9-II / 50188-1-II

GMA made its first contribution to the No on I-522 campaign from the DOB account in

May 2013. GMA solicited over $14 million in contributions from its member companies for the

DOB fund and paid $11 million of that amount to the No on I-522 political committee. The

payments to the No on I-522 campaign were attributed solely to GMA, with no indication of

which member companies had provided the funds. In fact, contributing GMA members were

instructed how to respond if they received inquiries about GMA’s contributions, “in part to

divert attention from the true source of the funds, namely, the individual GMA members.” CP at

4061. And in June, GMA removed the names of its members from its website.

Until October 17, GMA did not register with the Public Disclosure Commission (PDC) as

a political committee or file any required political committee reports that would have disclosed

the contributing members. GMA registered only after receiving a violation notice from the PDC.

GMA first disclosed the members who contributed to the DOB account on October 17, a few

weeks before the election. And GMA never fully disclosed the total contributions to the DOB

account. The trial court found that there were at least 47 reports required under the FCPA that

GMA failed to timely or properly file.

Procedural History

The State sued GMA for failing to register as a political committee, failing to report

financial contributions, and concealing the true source of contributions. The State sought a base

penalty of $14,622,820 trebled to $43,868,460. This amount apparently was based primarily on

the amount in the DOB fund that GMA failed to timely disclose.

On summary judgment, the trial court ruled that GMA was required to register as a

political committee under former RCW 42.17A.005(37) (2011) when it created the DOB

account, that GMA violated various FCPA reporting and disclosure requirements for political

4 No. 49768-9-II / 50188-1-II

committees, and that GMA violated RCW 42.17A.435 by concealing the source of the

contributions it made to oppose I-522.

After a bench trial on the issue of penalties, the court imposed a $6 million civil penalty

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Austin v. United States
509 U.S. 602 (Supreme Court, 1993)
United States v. Bajakajian
524 U.S. 321 (Supreme Court, 1998)
State v. (1972) Evans Campaign Committee
546 P.2d 75 (Washington Supreme Court, 1976)
Vec v. State Public Disclosure Com'n
166 P.3d 1174 (Washington Supreme Court, 2007)
State Of Washington v. Grocery Manufacturers Association
425 P.3d 927 (Court of Appeals of Washington, 2018)
State Public Disclosure Comm, V Food Democracy Action
427 P.3d 699 (Court of Appeals of Washington, 2018)
Black v. Cent. Puget Sound Reg'l Transit Auth.
457 P.3d 453 (Washington Supreme Court, 2020)
State v. Grocery Mfrs. Ass'n
461 P.3d 334 (Washington Supreme Court, 2020)
Voters Education Committee v. Public Disclosure Commission
161 Wash. 2d 470 (Washington Supreme Court, 2007)
Doe v. Reed
177 L. Ed. 2d 493 (Supreme Court, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
State Of Washington v. Grocery Manufacturers Association, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-of-washington-v-grocery-manufacturers-association-washctapp-2020.