State v. Evergreen Freedom Found.

192 Wash.2d 782

432 P.3d 805

STATE of Washington, Respondent,

v.EVERGREEN FREEDOM FOUNDATION d/b/a Freedom Foundation, Petitioner.

No. 95281-7

Supreme Court of Washington.

Argued June 28, 2018

Filed January 10, 2019

Philip Albert Talmadge, Talmadge/Fitzpatrick/Tribe, 2775 Harbor Avenue SW, Third Floor, Suite C, Seattle, WA 98126-2138, Mark Christopher Lamb, The North Creek Law Firm, 12900 NE 180th Street, Suite 235, Bothell, WA 98011-5773, for Petitioner.

Linda Anne Dalton, Chad Corwyn Standifer, Attorney General Office Campaign Finance, P.O. Box 40100, Olympia, WA 98504-0100, for Respondent.

MADSEN, J.

¶ 1 This case involves statutory interpretation concerning application of the reporting requirements contained in the Fair Campaign Practices Act (FCPA), chapter 42.17A RCW. The specific issue is how the FCPA reporting requirements in RCW 42.17A.255 and the definition in RCW 42.17A.005(4) ("ballot proposition")¹ are to be applied in the context of local initiatives. For the reasons explained below, we hold that under the circumstances of this case, pro bono legal services, which Evergreen Freedom Foundation provided to initiative proponents, were reportable to the Public Disclosure Commission (PDC) under the above noted statutes. We affirm the Court of Appeals’ reversal of the trial court’s CR 12(b)(6) dismissal of the State’s FCPA regulatory enforcement action and remand to the trial court for further proceedings.

FACTS

¶ 2 In 2014, Evergreen Freedom Foundation (EFF) staff created sample municipal ordinances and ballot propositions for citizens to use to advance certain causes to their local city councils or commissions. Local residents in the cities of Sequim, Chelan, and Shelton utilized those samples in filing two ballot propositions in each city, one to require collective bargaining negotiation sessions to be publicly conducted and the second to prohibit union security clauses in city collective bargaining agreements.

¶ 3 The proponents submitted the proposed measures to their local city clerks along with signatures they had gathered in support of the measures. They asked their respective city councils or commissions either to pass the measures as local ordinances or, if the councils or commissions did not agree, to alternatively place each measure on the local ballot for a vote. None of the cities passed the measures as ordinances or placed the ballot propositions on the local ballots.²

¶ 4 In response, EFF employees, who are attorneys, participated in lawsuits against each jurisdiction on behalf of the local resident proponents. Each suit sought a judicial directive to the respective city to put each measure on the local ballot. Each lawsuit ended in a superior court dismissing the case, and those decisions were not appealed.

¶ 5 EFF did not file any campaign finance disclosure reports with the PDC identifying the value of the legal services it provided to the resident proponents in support of the local ballot propositions.³ In February 2015, the attorney general received a citizen action complaint about EFF’s failure to report the value of legal services it provided in support of these local ballot measures.⁴ The State conducted an investigation and then filed a civil regulatory enforcement action against EFF in Thurston County Superior Court, alleging that EFF failed to report independent expenditures it made in support of the noted local ballot propositions.⁵

¶ 6 EFF moved to dismiss the State’s enforcement action, asserting that the local propositions were not "ballot propositions" as defined in RCW 42.17A.005(4). Clerk’s Papers at 24. EFF argued that because the local initiative process generally requires signatures to be gathered and submitted before the ballot propositions are filed with the local elections official, the local propositions were not "ballot propositions" under RCW 42.17A.005(4) and, therefore, no disclosure was required unless and until the proposition became a "measure" placed on a ballot. Id. at 19-33.

¶ 7 The State opposed the motion and the statutory interpretation asserted by EFF. The State argued that EFF’s reading of the statute would effectively exclude from public disclosure all funds raised and spent on local ballot propositions until they advanced to the ballot, contrary to the stated purpose and intent of the FCPA.

¶ 8 The superior court granted EFF’s motion for dismissal under CR 12(b)(6) (failure to state a claim). It found the statutes at issue here to be "ambiguous and vague." Verbatim Report of Proceedings at 23. The superior court further found that the State had not "sufficiently established that this situation involved a ballot measure that gave them the opportunity to require that such be reported," explaining that "such" meant "legal services that were provided on a pro bono basis before the matter ever went to any kind of vote." Id. at 23-24.

¶ 9 The State sought direct review and this court transferred the case to Division Two of the Court of Appeals. Order, State v. Evergreen Freedom Found., No. 93232-8, 2017 WL 1177091 (Wash. Mar. 29, 2017). The Court of Appeals reversed, holding in a partially published opinion that "under the only reasonable interpretation" of the definition of "ballot proposition" in the FCPA, the local initiatives qualified as ballot propositions at the time EFF provided legal services because the initiatives had been filed with local election officials. State v. Evergreen Freedom Found., 1 Wash. App. 2d 288, 293, 404 P.3d 618 (2017) (published in part). The Court of Appeals also rejected EFF’s argument that reporting requirements could apply only to electioneering that occurs once a proposition has been placed on the ballot. Id. at 306, 404 P.3d 618.

The court concluded that RCW 42.17A.255 does not violate EFF’s First Amendment rights. Id. at 307, 404 P.3d 618. In the unpublished portion of the opinion, the Court of Appeals rejected EFF’s other arguments, including that the statute is unconstitutionally vague. Evergreen Freedom Found., No. 50224-l-II, slip op. (unpublished portion) at 22-24, http://www.courts.wa.gov/opinions/pdf/D2%2050224-l-II%20Published%20Opinion.pdf. EFF petitioned for review, which this court granted. State v. Evergreen Freedom Found., 190 Wash.2d 1002, 413 P.3d 11 (2018).

ANALYSIS

Standard of Review

¶ 10 This court reviews issues of statutory construction and constitutionality de novo. State v. Evans, 177 Wash.2d 186, 191, 298 P.3d 724 (2013) ; Columbia Riverkeeper v. Port of Vancouver USA, 188 Wash.2d 421, 432, 395 P.3d 1031 (2017). When possible, this court derives legislative intent from the plain language enacted by the legislature; "[p]lain language that is not ambiguous does not require construction." Evans, 177 Wash.2d at 192, 298 P.3d 724. However, if more than one interpretation of the plain language is reasonable, the statute is ambiguous, and the court must then engage in statutory construction. Id. at 192-93, 298 P.3d 724. The court may then look to legislative history for assistance in discerning legislative intent. Id. at 193, 298 P.3d 724.

¶ 11 In construing a statute, the fundamental objective is to ascertain and carry out the people’s or the legislature’s intent. See Lake v. Woodcreek Homeowners Ass’n, 169 Wash.2d 516, 526, 243 P.3d 1283 (2010). This court looks to the entire " ‘context of the statute in which the provision is found, [as well as] related provisions, amendments to the provision, and the statutory scheme as a whole.’ " State v. Conover, 183 Wash.2d 706, 711, 355 P.3d 1093 (2015) (quoting Ass’n of Wash. Spirits & Wine Distribs. v. Wash. State Liquor Control Bd., 182 Wash.2d 342, 350, 340 P.3d 849 (2015) ); see also G-P Gypsum Corp. v. Dep’t of Revenue, 169 Wash.2d 304, 310, 237 P.3d 256 (2010) ("enacted statement of legislative purpose is included in a plain reading of a statute").

The meaning of words in a statute is not gleaned from [the] words alone but from "all the terms and provisions of the act in relation to the subject of the legislation, the nature of the act, the general object to be accomplished and consequences that would result from construing the particular statute in one way or another."

Burns v. City of Seattle, 161 Wash.2d 129, 146, 164 P.3d 475 (2007) (internal quotation marks omitted) (quoting State v. Krall, 125 Wash.2d 146, 148, 881 P.2d 1040 (1994) ); see also Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash.2d 1, 11, 43 P.3d 4 (2002) (clarifying "plain meaning" is "discerned from all that the Legislature has said in the statute and related statutes which disclose legislative intent about the provision in question").

FCPA Background and Application

¶ 12 In 1972, voters in Washington adopted Initiative 276 (1-276), which established the PDC and formed the basis of Washington’s campaign finance laws. Voters Educ. Comm. v. Pub. Disclosure Comm'n , 161 Wash.2d 470, 479, 166 P.3d 1174 (2007). I-276 is codified in portions of chapter 42.17A RCW, which is now known as the FCPA. RCW 42.17A.909. I-276 was designed, in part, to provide the public with full disclosure of information about who funds initiative campaigns and who seeks to influence the initiative process. See LAWS OF 1973, ch. 1, § 1. In I-276, the people declared that it would be

the public policy of the State of Washington:

(1) That political campaign and lobbying contributions and expenditures be fully disclosed to the public and that secrecy is to be avoided.

....

(10) That the public’s right to know of the financing of political campaigns and lobbying and the financial affairs of elected officials and candidates far outweighs any right that these matters remain secret and private.

(11) ... The provisions of this act shall be liberally construed to promote complete disclosure of all information respecting the financing of political campaigns and lobbying.

LAWS OF 1973, ch. 1, § 1 (emphasis added); see also RCW 42.17A.001(1), (10), (11). With a 72 percent supporting vote, Washington voters adopted I-276 and...