Headworks Hand Crafted Ales, Inc. v. Wash. State Liquor & Cannabis Bd.

540 P.3d 863

HEADWORKS HAND CRAFTED ALES, INC., dba Headworks Brewing, Appellant,

v.WASHINGTON STATE LIQUOR AND CANNABIS BOARD, Respondent.

No. 84927-1-I

Court of Appeals of Washington, Division 1.

Filed January 2, 2024

Daniel James Neilsen, Law Office of Daniel J. Neilsen, PLLC, 23745 225th Way Se Ste. 205, Maple Valley, WA, 98038-5294, for Appellant.

Jason Willis Miller, Office of the Attorney General of Washington, P.O. Box 40100, Olympia, WA, 98504-0100, for Respondent.

PUBLISHED OPINION

Hazelrigg, A.C.J.

¶1 After multiple warnings, the Washington State Liquor and Cannabis Board (LCB) issued an administrative violation notice (AVN) to Headworks Hand Crafted Ales Inc. dba Headworks Brewing due to its failure to comply with the pandemic-related mask mandate issued by the state Department of Health in 2020. Headworks seeks judicial review of the final order that affirmed the violation and argues that the LCB did not have statutory authority to issue the AVN, and, alternatively, the LCB's action violated constitutional due process. Because the LCB has statutory authority to issue the AVN under Title 66 RCW and the failure to comply with the statewide mask mandate posed a "threat to public safety" under WAC 314-11-015(3)(c), we affirm the final order.

FACTS

¶2 On February 29, 2020, due to the outbreak of the novel coronavirus infection disease (COVID-19), Governor Jay Inslee issued Proclamation 20-05, which declared a state of emergency for all counties in Washington.¹ The governor exercised his emergency powers under RCW 43.06.220 and issued several subsequent proclamations amending the original including Proclamations 20-25 through 20-25.20 which prohibited certain activities unless specific conditions were met. On June 24, 2020, the secretary of health issued Order 20-03, directing everyone in Washington to wear a face covering in "any indoor or outdoor public setting."² Although the secretary amended the order on May 15, 2021 to exempt fully vaccinated people,³ the order was subsequently amended on August 19, 2021 to reinstitute the face covering mandate regardless of vaccination status "when in a place where any person from outside their household is present."⁴ On September 13, 2021, the governor amended Proclamations 20-25 through 20-25.16 to incorporate the secretary of health's face covering order and all subsequent amendments thereto.⁵ Proclamations 20-05 through 20-25 as well as Order 20-03 and its subsequent amendments, are collectively referred to herein as the "mask mandate."

¶3 Headworks is a brewery located in Enumclaw, Washington that is open to the public and offers alcoholic beverages to its customers. Headworks applied for and was issued a license to sell alcohol by the LCB. On September 8, 2021, the LCB received a public complaint that Headworks employees and customers were not adhering to the mask mandate. Three days later, LCB enforcement officers conducted a check of the premises and observed the bartender not wearing a mask. During a follow-up visit the next week, LCB Enforcement Officer Richard Steinbach observed three Headworks employees working in the brewery without masks. After Steinbach informed Headworks manager, Gino Santamaria, of the public complaint and masking requirements, Santamaria stated that Headworks would neither refuse service to unmasked patrons nor require employees to wear masks. On September 20 and October 5, 2021, the LCB received additional public complaints concerning Headworks’ failure to comply with the mask mandate.

¶4 On October 8, 2021, Steinbach returned to the brewery and observed three Headworks employees working without masks. At the time, there were approximately 15-25 patrons at the establishment. Steinbach contacted two of the employees, explained that they were required to wear masks, and informed them that Headworks would receive a written warning for noncompliance with the mask mandate. On October 13, the written warning was issued and, in it, the LCB directed Headworks to comply with the mask mandate and advised that further noncompliance would result in a violation of WAC 314-11-015. The written warning also included a copy of the secretary of health's Order 20-03.6,⁶ along with a document providing guidance on the COVID-19 facial covering requirements for employers and businesses.

¶5 That November, the LCB received three more public complaints about Headworks’ continued failure to follow the mask mandate. In response, Steinbach called Santamaria, notified him of the complaints, and said that he would conduct a check of the premises in the following week to determine whether Headworks was in compliance with the masking requirements. During the phone call, Santamaria asked what would qualify as a legitimate exemption from the mask mandate and Steinbach stated that Headworks "would need to determine that on their own and it would need to be a case-by-case basis with each employee." Steinbach also "offered one suggestion of having those employees who want a medical exemption from wearing a mask to provide a doctor's note as a way for them as the employer to give credibility to that process." Santamaria responded that it would be a violation of the employees’ rights to require a doctor's note in order to validate a mask exemption. According to Steinbach, his "take-away from that conversation was that Headworks Brewing did not believe in the legality of the mask mandate and thus was not enforcing the mask wearing by their employees."

¶6 On November 23, Steinbach returned to the brewery and observed three employees, including Santamaria, working without face coverings. Steinbach met with Santamaria who continued to question the legality of the mask mandate and told Steinbach that Headworks employees were not required to wear masks because the mandate was not a law. After Steinbach's inspection, the LCB issued Headworks an AVN on December 2, 2021. The AVN referenced WAC 314-11-015, established that the violation was for a COVID-19 related complaint, and imposed a penalty of a five-day license suspension or $500 fine in lieu of suspension.

¶7 Headworks appealed the AVN and requested an administrative hearing. Accordingly, the LCB requested assignment of an administrative law judge (ALJ) and issued "LCB Complaint No. L-27,636" which was based on the original AVN. The complaint provided that, on November 23, 2021, Headworks "failed to adopt or enforce minimal safety precautions to prevent the spread of the COVID-19 virus as required by the Governor's Proclamations 20-05 & 20-25, et seq. , and associated orders of the Secretary of Health." The complaint alleged that Headworks’ noncompliance "presented a threat to public safety, in violation of WAC 314-11-015(3)" and provided the penalty pursuant to WAC 314-29-020. Headworks "did not contest the material facts of the November 23, 2021 incident." Both parties filed motions for summary judgment. The ALJ issued an initial order that granted LCB's motion for summary judgment and affirmed complaint L-27,636.

¶8 Headworks then filed a petition for review of the initial order with the LCB. On review, the LCB affirmed the initial order and adopted the findings of fact and conclusions of law contained therein as the final order of the board. Headworks sought reconsideration of the final order, but the LCB denied the petition for reconsideration.

¶9 Headworks timely appealed.

ANALYSIS

I. Procedural Posture and RAP 10.3

¶10 Headworks seeks review of the final order of the board entered after an adjudicative proceeding, but does not assign error to the substance of the final order or any findings of fact or conclusions of law therein. Rather, in its opening brief, Headworks asserts that assignments of error are "not strictly necessary" and cites to RCW 34.05.570(2), writing "this is a challenge to the validity of agency rules brought under Washington's Administrative Procedure Act [(APA)]." This framing suggests that Headworks may have misinterpreted the interplay between the Rules of Appellate Procedure and the two options for review governed by RCW 34.05.570(2), either pursuant to a petition for declaratory judgment challenging the validity of the rule or "in the context of any other review proceeding under this section." Headworks did not file a petition for declaratory judgment "challenging the validity of a rule" as described in RCW 34.05.570(2)(a) and (b)(i), which may have rendered explicit assignments of error repetitive since the entire purpose of such an action is plain.⁷ However, because Headworks opted to pursue its challenge through "any other review proceeding" under the APA, here, review of the AVN, express identification of the purported errors of the board were required under the RAPs.

¶11 Contrary to Headworks’ contention, "[e]rror assigned to administrative orders must comply with RAP 10.3." Patterson v. Superintendent of Pub. Instruction , 76 Wash. App. 666, 676, 887 P.2d 411 (1994). The appellant's brief is required to provide a "separate concise statement of each error" alleged and this court "will only review a claimed error which is included in an assignment of error." RAP 10.3(a)(4), 10.3(g). See also RAP 10.3(h) (Appellants challenging an administrative order must "set forth a separate concise statement of each error which the party contends was made by the agency."). Because Headworks’ opening brief contains no assignments of error, it fails to comply with RAP 10.3. Only after the LCB had argued in its response that Headworks’ noncompliance with RAP 10.3 is a basis for this panel to deny the relief sought did Headworks begrudgingly assign error as follows: "The Board improperly found that the enforcement of the Mask Mandate ... was within [the LCB's] power to enforce as a ‘Threat to Public Safety’ under WAC 314-11-015(3)." As a general rule, we "will not review an issue raised and argued for the first time in a reply brief." Bergerson v. Zurbano , 6 Wash. App. 2d 912, 926, 432 P.3d 850 (2018). However,...