State ex rel. Wash. State Pub. Disclosure Comm'n v. Food Democracy Action

427 P.3d 699

STATE of Washington, EX REL., WASHINGTON STATE PUBLIC DISCLOSURE COMMISSION, Respondent,

v.FOOD DEMOCRACY ACTION! and Food Democracy Action! Yes on I-522 Committeed to Label GMOs in Washington, Appellant.

No. 49932-1-II

Court of Appeals of Washington, Division 2.

Filed October 2, 2018

Kenneth Scott Kagan, Law Office of Kenneth S. Kagan, PLLC, 600 1st Ave. Ste. 512, Seattle, WA, 98104-2253, for Appellant.

Linda Anne Dalton, Atty. Gen. Office Campaign Finance, PO Box 40100, Olympia, WA, 98504-0100, Stephen Todd Sipe, Attorney at Law, 1125 Washington Street Se, Olympia, WA, 98504-0100, for Respondents.

PUBLISHED OPINION

Melnick, J. ¶ 1 Food Democracy Action! (Food Democracy) appeals from a judgment imposing civil penalties against it for violations of state campaign finance disclosure laws.¹ Food Democracy solicited and received contributions to support Initiative 522 (I-522). In turn, it contributed the money in its own name to the Yes on I-522 political committee. After the general election and vote on I-522, and after the Public Disclosure Commission (PDC) began an investigation, Food Democracy registered as a political committee and filed reports disclosing the contributions it received from over seven thousand contributors.

¶ 2 Food Democracy argues that the trial court erred in concluding it concealed the source of its campaign contributions. It contends that only intentional conduct amounts to concealment. Food Democracy also argues, for the first time on appeal, that the trial court erred by imposing statutorily authorized civil penalties for the state campaign finance disclosure law violations.

¶ 3 We affirm.²

FACTS

¶ 4 I-522 appeared on the state ballot in November 2013, in the general election. It concerned the labeling of genetically engineered foods.

¶ 5 In early July 2013, Food Democracy sent e-mails to its members soliciting contributions in support of the I-522 campaign. Food Democracy raised $295,661.58.

¶ 6 In the three months before the election, Food Democracy made five payments, for a total of $200,000, directly to the Yes on I-522 political committee. Food Democracy made those contributions in its own name. It did not disclose that the money it contributed to the I-522 campaign came from over seven thousand individuals, most of whom lived outside the state. The Yes on I-522 political committee filed a report with the PDC stating that the $200,000 in contributions came directly from Food Democracy.

¶ 7 Food Democracy had some familiarity with the state campaign finance disclosure reporting requirements. An e-mail Food Democracy sent to its members referenced the "public disclosure records filed in Washington State" by the No on 522 political committee. Clerk’s Papers (CP) at 130. As of two weeks before the election, Food Democracy’s website stated that:

Washington State law requires [that Food Democracy] collect and report the name, mailing address, and the contribution amount for each individual whose contributions exceed $25 and the employer and occupation for each individual whose contributions exceed $100 in an election cycle. [The] contribution will be used in connection with Washington State elections and is subject to the limits and prohibitions of the Washington State Public Disclosure Commission.

CP at 135-36. However, before the election, Food Democracy did not report the names of any individuals who contributed funds that Food Democracy then contributed in its own name.

¶ 8 Eight days before the election, the Attorney General’s Office received a citizen action letter³ alleging that Food Democracy violated state campaign finance disclosure laws. The Attorney General’s Office forwarded the letter to the PDC. The PDC opened an investigation within eight days of the election.

¶ 9 After the PDC began investigating Food Democracy, and after the election, Food Democracy registered as a political committee⁴ (C-1pc Form), identified its treasurer and depository accounts, and filed the required reports. Former RCW 42.17A.205(1), (2)(d) (2012).⁵

¶ 10 Food Democracy filed twelve contribution reports (C-3 Forms), covering the period between July 31 through October 31. The reports detailed the weekly contributions Food Democracy deposited into their depository account for the three months prior to the election. Former RCW 42.17A.235(3). Those reports were the first filings disclosing the individuals who had contributed to Food Democracy in relation to the I-522 campaign. Food Democracy filed all of the C-3 Forms seventeen days after the election. They were between 18 and 109 days late.

¶ 11 Food Democracy also filed five summary reports (C-4 Forms), summarizing its financial activities and itemizing its expenditures from July until after the election. Former RCW 42.17A.235(2). Food Democracy filed all of the C-4 Forms on January 15, 2014, well after the election.

¶ 12 The State filed a complaint in Thurston County Superior Court seeking statutorily authorized civil penalties, costs, and fees under former RCW 42.17A.750(1)(c)-(d), (f). The complaint alleged that Food Democracy violated state campaign finance disclosure laws because it failed to timely register as a political committee, it failed to timely identify a treasurer or a depository account for collected funds, it failed to timely file required reports, and it concealed the identity of the individuals from whom it received its $200,000 in contributions to the Yes on I-522 political committee. The complaint also alleged Food Democracy acted either intentionally or negligently.

¶ 13 Food Democracy filed an answer admitting that it failed to comply with the registration and reporting requirements; however, it denied that its actions amounted to concealment of the source of its contributions.

¶ 14 The State filed a motion for partial summary judgment. Food Democracy opposed the State’s motion and argued that its actions did not amount to concealment under former RCW 42.17A.435.

¶ 15 The trial court granted partial summary judgment in favor of the State. The only contested issue remaining for trial involved the amount of penalties, costs, and fees.

¶ 16 Food Democracy did not appear for trial. The State called witnesses and the court admitted evidence in support of the State’s requests for civil penalties, costs, and fees authorized under former RCW 42.17A.750 and .765.

¶ 17 The State abandoned any argument that Food Democracy intentionally concealed the source of its contributions and did not seek treble damages for intentional violations of the state campaign finance disclosure laws. Former RCW 42.17A.765(5).

¶ 18 The trial court entered judgment against Food Democracy. It imposed a total penalty on Food Democracy of $319,281.58, including a penalty of $295,661.58 equaling the amount Food Democracy raised; a penalty of $18,000 for the 18 late reports ($1,000 per report for 18 reports);⁶ and a $5,620 penalty for the cumulative number of days the reports were late ($5 per day for 1,124 days).⁷ In addition, the court awarded the State $2,131.32 in investigation costs, $90,590.20 in attorney fees, and $325 in trial costs.

¶ 19 Food Democracy appeals.

ANALYSIS

I. CONCEALMENT

¶ 20 Food Democracy argues that the court erred in granting summary judgment and by concluding that it concealed the source of its campaign contributions because former RCW 42.17A.435 only prohibits intentional or knowing conduct. We disagree.

¶ 21 We review orders granting summary judgment de novo. Utter ex rel. State v. Bldg. Indus. Ass’n of Wash. , 182 Wash.2d 398, 406, 341 P.3d 953 (2015). A court properly grants summary judgment if, viewing "all the evidence in the light most favorable to the nonmoving party, ... ‘there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.’ " Utter , 182 Wash.2d at 406, 341 P.3d 953 (second omission in original) (quoting Civil Rules (CR) 56(c) ).

¶ 22 We review questions of statutory interpretation de novo. Utter , 182 Wash.2d at 406, 341 P.3d 953. In interpreting statutes, our goal "is to ascertain and carry out the legislature’s intent." Jametsky v. Olsen , 179 Wash.2d 756, 762, 317 P.3d 1003 (2014). We begin our analysis with the statute’s plain meaning. Gunn v. Riely , 185 Wash. App. 517, 524, 344 P.3d 1225 (2015). "All words must be read in the context of the statute in which they appear, not in isolation or subject to all possible meanings found in a dictionary." State v. Lilyblad , 163 Wash.2d 1, 9, 177 P.3d 686 (2008). A statute’s "plain meaning is derived from the context of the entire act as well as any ‘related statutes which disclose legislative intent about the provision in question.’ " Jametsky , 179 Wash.2d at 762, 317 P.3d 1003 (quoting Dep’t of Ecology v. Campbell & Gwinn, LLC , 146 Wash.2d 1, 11, 43 P.3d 4 (2002) ). Only if the statute is ambiguous do we look to interpretive aids, such as canons of construction and case law. Gunn , 185 Wash. App. at 524, 344 P.3d 1225.

¶ 23 State campaign finance disclosure provisions are to be,

liberally construed to promote complete disclosure of all information respecting the financing of political campaigns and lobbying, ... and full access to public records so as to assure continuing public confidence of fairness of elections and governmental processes, and so as to assure that the public interest will be fully protected.

Former RCW 42.17A.001.

¶ 24 The statute prohibiting concealment of campaign contributions provides:

No contribution shall be made and no expenditure shall be incurred, directly or indirectly, in a fictitious name, anonymously, or by one person through an agent, relative, or other person in such a manner as to conceal the identity of the source of the contribution or in any other manner so as to effect concealment .

Former RCW 42.17A.435 (emphasis added).

¶ 25 This language does not require intentional or knowing conduct. The plain meaning contains no exception for unintentional conduct that results in the concealment...