Utter v. Bldg. Indus. Ass'n of Wash.

IN THE SUPREME COURT OF THE STATE OF WASHINGTON
ROBERT F. UTTER and FAITH IRELAND, NO. 89462-1
in the name ofthe STATE OF
WASHINGTON,
ENBANC
Petitioners,
v.
BUILDING INDUSTRY ASSOCIATION Filed JAN 2 2 2015
OF WASHINGTON,
Respondent.
GORDON McCLOUD, J.-Retired Justices Robert Utter and Faith Ireland
(plaintiffs) sued the Building Industry Association of Washington (BIAW), alleging
that BIAW violated Washington's Fair Campaign Practices Act (FCPA), chapter
42.17 A RCW, in part by failing to register as a political committee during the 2007-
2008 campaign season. The trial court granted BIAW' s motion for summary
judgment and dismissed the case on the ground that there was no material factual
dispute and BIAW was entitled to judgment as a matter oflaw, but it denied BIAW's
Utter eta!. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
request for attorney fees. The Court of Appeals, following reconsideration,
ultimately affirmed; it stated in dicta that there was an issue of fact as to whether
BIAW met the statutory definition of a "political committee," but held only that the
plaintiffs' case did not meet the procedural prerequisites to filing a citizen suit. Utter
v. Bldg. Indus. Ass'n of Wash., 176 Wash. App. 646, 672-73, 310 P.3d 829 (2013).
The Court of Appeals also affirmed the trial court's denial of BIAW's request for
attorney fees. !d. at 67 4-77.
The plaintiffs petitioned this court, and we accepted review. Utter v. Bldg.
Indus. Ass 'n of Wash., 179 Wash. 2d 1021, 336 P.3d 1165 (2014). The BIAW cross
petition~d on the attorney fees claim, but we denied review. !d. We reverse the
Court of Appeals and hold that (1) the plaintiffs' suit was not procedurally barred
under our State's citizen suit provision and (2) the plaintiffs have presented sufficient
evidence to raise a genuine issue of material fact about whether BIAW met the
statutory definition of a "political committee."
FACTS
The nonprofit BIAW formed the for-profit BIAW Member Services
Corporation (BIAW-MSC) in 1993. BIAW and BIAW-MSC share the same
leadership-BIAW's president, vice president, first vice president, secretary,
treasurer, and immediate vice president are also the officers ofBIAW-MSC. BIAW
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and BIA W-MSC also share the same staff; they are paid by one organization or the
other depending on the nature of their work.
BIA W established BIAW-MSC largely to administer a "retro program" under
rules established by the Department of Labor and Industries (L&I). Clerk's Papers
(CP) at 175. Under the retro program rules, members can pool their workers
compensation risks and, at the end of the reporting period, obtain a refund if the
actual claims add up to less than the expected claims. See RCW 51.18.010. L&I
typically pays the refund to BIAW, the organization eligible to receive the refund,
and then BIAW deposits the refund into the bank account ofBIAW-MSC. A portion
of the refund amount is eventually distributed to BIAW's local associations. BIAW
calls its retro program the "Return on Industrial Insurance program" (ROil).
It is undisputed that in 2007, the ROil refund was much greater than
anticipated. As a result, in 2007, BIAW, or BIAW-MSC (this is disputed), asked
the local associations to pledge any refund amount in excess of their budget
projections to aid in the upcoming governor's race. Ultimately those funds were
transferred to ChangeP AC, a political action committee.
On July 25, 2008, the plaintiffs sent a letter to the attorney general (AG)
stating that the plaintiffs suspected BIAW and BIAW-MSC had each violated the
FCP A by failing to register as a political committee and failing to report
contributions and expenditures. The AG referred the complaint to the Public
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Disclosure Commission (PDC) that same day for investigation. The PDC
investigation concluded that BIAW was not a political committee but that BIAW-
MSC may have been. The AG sued BIAW-MSC, but not BIAW. BIAW-MSC
settled.
The plaintiffs then sued BIAW under the citizen suit provision of the PCPA,
which permits citizens to file a "citizen action" alleging violations of the act if they
give notice of a violation in writing to the AG and the AG "fail[s] to commence an
action hereunder." RCW 42.17 A.765(4)(a)(i). Plaintiffs alleged thatBIAW violated
the PCP A by failing to register as a political committee, by improperly coordinating
expenditures with Mr. Dino Rossi (gubernatorial candidate in 2008), and by
exceeding contribution limits. BIAW moved for summary judgment on several
grounds. The trial court granted BIAW' s motion without explaining its reasoning
but denied BIAW's request for attorney fees under RCW 42.17A.765(4)(b). 1
Plaintiffs appealed the grant of summary judgment only as to the political committee
claim, and BIAW cross appealed the denial of attorney fees.
The Court of Appeals reversed the trial court's grant of summary judgment in
an unpublished opinion but then granted BIAW's motion for reconsideration. 176
1
"In the case of a citizen's action that is dismissed and that the court also finds was
brought without reasonable cause, the court may order the person commencing the action
to pay all costs of trial and reasonable attorney fees incurred by the defendant." RCW
42.17A.765(4)(b).
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Wn. App. 646. On reconsideration, in a published opinion, the Court of Appeals
stated in dicta that the plaintiffs had raised an issue of fact sufficient to prevent
summary judgment. !d. at 656. But the appellate court affirmed the trial court's
dismissal of the case on a procedural ground. It explained that the PDC investigation
into BIAW constituted an "action" by the AG under the citizen suit provision, thus
precluding the plaintiffs from commencing their own "action." !d. at 670-74. It also
affirmed the trial court's denial ofBIAW's request for attorney fees. !d. at 674-77.
Plaintiffs petitioned this court for review, and we granted it. 179 Wash. 2d 1021.
We denied BIAW' s cross petition on the attorney fees issue. !d. There are thus only
two issues before the court. The first question is whether the PDC investigation
precludes plaintiffs from suing BIAW under the citizen suit provision. As discussed
below, the answer to that question is no. We therefore also address the second
question, that is, whether the trial court erred in granting summary judgment to
BIAW on the political committee issue. The answer to that question is yes, because
some aspects of the political committee issue present triable questions of fact.
ANALYSIS
I. STANDARD OF REVIEW
This case requires us to interpret several provisions of the FCP A. We review
matters of statutory interpretation de novo. State v. Wentz, 149 Wash. 2d 342, 346, 68
P.3d 282 (2003). The provisions of the FCPA, moreover, "shall be liberally
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construed to promote complete disclosure of all information respecting the financing
of political campaigns and lobbying, and the financial affairs of elected officials and
candidates, 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." RCW 42.17 A.OO 1.
We likewise review a trial court's order granting summary judgment de novo.
Mohr v. Grantham, 172 Wash. 2d 844, 859, 262 P.3d 490 (2011). In conducting this
review, we view all the evidence in the light most favorable to the nonmoving party.
ld. Summary judgment is appropriate "if ... there is no genuine issue as to any
material fact and ... the moving party is entitled to a judgment as a matter of law."
Civil Rules (CR) 56(c).
II. THE CITIZEN SUIT PROVISION
A statute gives Washington citizens the right to sue for unfair campaign
practices. But there is a prerequisite. The citizen must first give notice of a violation
in writing to the AG; the citizen may then sue if the AG "failed to commence an
action hereunder within forty-five days after the notice." RCW 42.17 A.765( 4)(a)(i).
The Court of Appeals held that where the AG refers a complaint to the PDC for
investigation after receiving such notice from a citizen, the referral itself counts as
"'commenc[ing] an action."' Utter, 176 Wash. App. at 672-73 (quoting RCW
42.17 A.765 (4)(a)(i)). Thus, according to the Court of Appeals, where the AG refers
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for investigation or investigates a complaint, the notice-giving citizen may not sue
even if the AG declines to sue. Id.
Our review involves statutory interpretation of RCW 42.17A.765. That
statute is titled "Enforcement." Its first three subsections define various ways the
AG may enforce the fair campaign statutes:
( 1) The attorney general and the prosecuting authorities of political
subdivisions of this state may bring civil actions in the name of the state
for any appropriate civil remedy, including but not limited to the special
remedies provided in RCW 42.17A.750.
(2) The attorney general and the prosecuting authorities of political
subdivisions of this state may investigate or cause to be investigated the
activities of any person who there is reason to believe is or has been
acting in violation of this chapter, and may require any such person or
any other person reasonably believed to have information concerning
the activities of such person to appear at a time and place designated .
. . to give such information under oath and to produce all ... documents
which may be relevant or material to any investigation authorized under
this chapter.
(3) When the attorney general or the prosecuting authority of any
political subdivision of this state requires the attendance of any person
to obtain such information ... , he or she shall issue an order setting
forth the time when and the place where attendance is required and shall
cause the same to be delivered to or sent by registered mail to the person
at least fourteen days before the date fixed for attendance. The order
shall have the same force and effect as a subpoena ....
RCW 42.17A.765 (emphasis added). Finally, subsection (4) provides a mechanism
for citizen, as opposed to AG, enforcement:
A person who has notified the attorney general and the prosecuting
attorney in the county in which the violation occurred in writing that
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there is reason to believe that some provision of this chapter is being or
has been violated may himself or herself bring in the name of the state
any of the actions (hereinafter referred to as a citizen's action)
authorized under this chapter.
RCW 42.17A.765(4) (emphasis added). A "person" may "bring" such a "citizen's
action," however, only if "[t]he attorney general and the prosecuting attorney have
failed to commence an action hereunder within forty-five days after the notice."
RCW 42.17A.765(4)(a)(i) (emphasis added).
The Court of Appeals reasoned that subsections (2) and (3) above, permitting
the AG to instigate an investigation and issue orders to facilitate the investigation,
constituted "actions ... authorized under this chapter." RCW 42.17A.765(4). Thus,
the Court of Appeals concluded that if the AG refers a complaint for investigation,
then it has not "failed to commence an action hereunder." RCW
42.17 A.765(4)(a)(i). In sum, therefore, if the AG merely investigates, the citizen
cannot sue. Utter, 176 Wash. App. at 672-74.
We must therefore decide what it means for the AG to "commence an action"
under RCW 42.17A.765(4)(a)(i). The Court of Appeals equates the word "action"
in RCW 42.17A.765(4) with the investigatory enforcement mechanisms laid out in
subsections (2) and (3). But only subsection (1) uses the word "actions"-it says,
"The attorney general and the prosecuting authorities of political subdivisions of this
state may bring civil actions .... " RCW 42.17A.765(1). The other subsections
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refer to investigatory mechanisms the AG may use to enforce fair campaign laws
and make no mention of"actions." 2
Moreover, the word "action," as used in "failed to commence an action
hereunder," RCW 42.17 A.765(4)(a)(i), has a context. The introductory paragraph
immediately preceding that phrase clearly grants citizens the right to "bring in the
name of the state any of the actions (hereinafter referred to as a citizen's action)
authorized under this chapter." RCW 42.17A.765(4) (emphasis added). This
sequencing suggests that "commenc[ing] an action" in subsection (4)(a)(i) refers
back to the same type of action as the "citizen['s] action" in subsection (4)(a)-the
immediately preceding introductory paragraph using the word "action." This
sequencing also suggests that "commenc[ing] an action" in subsection (4)(a)(i) does
not include the other nonaction enforcement steps available to the AG per the
previous subsections-that is, "investigat[ing]," RCW 42.17 A. 765(2), "requir[ing]"
a person to appear, id., or "issu[ing] an order," RCW 42.17A.765(3).
Further, as a matter of plain language, "an action" and the phrase "commence
an action" are legal terms of art that mean "a lawsuit" or "to sue." See, e.g., BLACK's
LAW DICTIONARY 35 (lOth ed. 2014). In accordance with that plain meaning, the
2 Subsection (3) does contain the word "actions," but it is used in a context irrelevant
to this case: "In any case where the order is not enforced by the court according to its terms,
the reasons for the court's actions shall be clearly stated in writing . . . . " RCW
42.17 A.765(3).
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statute does not use the term "action" in isolation but refers to "bring[ing],"
"fil[ing]," and, in the specific provision at issue, "commenc[ing]" an action. RCW
42.17A.765(1), (4), (5). "Commence an action" does not mean "to investigate" in
ordinary legal terminology. See, e.g., Goldmark v. McKenna, 172 Wash. 2d 568, 575,
259 P.3d 1095 (2011) (attorney general has power to commence actions); Waples v.
Yi, 169 Wash. 2d 152, 159, 234 P.3d 187 (2010) (action is "commence[d]" by filing
complaint (citing CR 3(a))); State v. Conte, 159 Wash. 2d 797, 810, 154 P.3d 194
(2007) (discussing attorney general's power to "bring an action"); Whitney v.
Buckner, 107 Wash. 2d 861, 865, 734 P.2d 485 (1987) (right of access to courts
includes right to "bring" or "commence" "actions"); Berge v. Gorton, 88 Wash. 2d 756,
761, 567 P.2d 187 (1977) (attorney general has power to "commence actions"). The
Court of Appeals' interpretation is, thus, probably not what the voters intended. 3
In addition, the Court of Appeals' interpretation causes absurd results. If
subsections (2) and (3) are authorized "actions" under chapter 42.17 A RCW, then
they are also "citizen's actions." RCW 42.17A.765(4) ("A person who has notified
the [AG] may himself or herself bring in the name of the state any of the actions
(hereinafter referred to as a citizen's action) authorized under this chapter."). Thus,
3 The statute at issue was created through the initiative process. We interpret
initiatives according to the general rules of statutory construction. City of Spokane v.
Taxpayers of City of Spokane, 111 Wash. 2d 91, 97, 758 P.2d 480 (1988) (citing Hi-Starr,
Inc. v. Liquor Control Bd., 106 Wash. 2d 455, 460, 722 P.2d 808 (1986)).
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under the Court of Appeals' interpretation, if the AG fails to act, a citizen could
investigate on his or her own in the name of the state, personally issue orders with
the same authority as a subpoena; require the appearance of other citizens to answer
questions, and take all the other steps authorized by subsections (2) and (3) above
for the AG. That is not a reasonable interpretation of the statute.
The plaintiffs also argue that as a practical matter, the AG initially refers all
complaints to the PDC for investigation. Thus, if the Court of Appeals'
interpretation were correct, the PDC-a government agency-would unilaterally bar
all citizen suits for violation of Title 42 RCW just by investigating. The voters
cannot possibly have intended to create a citizen's right to sue when the government
will not but allow the government to bar every one of those suits with a procedural
quirk
BIAW argues, however, that there is a difference between a routine referral
of a complaint and a case like this one, where the PDC conducts a substantial
investigation and makes a recommendation to the AG regarding the merits of a case.
BIAW thus asserts that a more formal investigation by the PDC constitutes an
"action" under the statute, while a less formal investigation does not. BIAW offers
no citation for this distinction, nor does it explain how to tell the difference between
them.
We decline BIAW' s invitation to have the courts engage in an after-the-fact
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analysis of whether a particular investigation was thorough enough to qualify as an
"action," especially without established standards to help the courts make such a
determination. Moreover, BIAW's interpretation would defeat the purpose of
providing for citizen suits in the first place, because the AG likely declines to sue in
exactly those instances where the PDC investigation concludes that no violation
occurred. The statute is obviously based on the notion that the government may be
wrong, and then it is up to citizens to expose the violation. 4
Finally, BIA W argues that this court has held that the citizen suit provision
was constitutional "because it applied only in those instances where the state took
'no action,' investigatory or otherwise, at the end of the statutory notice periods."
BIAW's Suppl. Br. at 10 (emphasis omitted) (quoting Fritz v. Gorton, 83 Wn.2d
275,314,517 P.2d 911 (1974)). Thus, BIAW argues, interpreting "action" here to
4 BIAW, in a brief responding to amici arguments, also argues that "commence an
action" must include "investigation" because otherwise citizens could sue even where the
PDC pursues an administrative action based on an investigation of a citizen's complaint,
as it is permitted to do under RCW 42.17 A.755. BIAW argues it would be an absurd result
to permit both a PDC administrative action and a citizen suit. First, the PDC in this case
did not commence any action, administrative or judicial; thus, this question is not
presented. Second, BIAW does not explain why that result is absurd. Through
administrative enforcement, the PDC may issue orders requiring the respondent "to cease
and desist from the activity that constitutes a violation" and "may assess a penalty in an
amount not to exceed ten thousand dollars." RCW 42.17A.755(4) (emphasis added). The
amounts at issue in a lawsuit are significantly higher. For example, BIA W-MSC settled
the AG's suit against it for $584,000. When a citizen wins a suit under the FCPA, "the
judgment awarded shall escheat to the state,'' less the citizen's costs and attorney fees.
RCW 42.17A.765(4)(b). A PDC action thus serves as significantly less of a deterrent to
illegal campaign practices.
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exclude "investigation" renders the citizen suit provision unconstitutional.
The cited case does not make the holding BIAW attributes to it. Instead, we
said:
In our view, the qui tam provision of initiative section 40(4)
poses no problem of constitutional dimension. We note respondents'
assertion that they fear the threat of frivolous and unwarranted
harassment suits. In this connection we can also note that should the
suitor fail in his action the trial court, upon finding lack of reasonable
cause, may reimburse the defendant for his costs and attorney's fees.
In view of the current high costs of legal services, we regard this as no
small deterrent against frivolous and harassing suits. Additionally, the
plaintiff in such cases is required to give the Attorney General a 40-day
notice of an alleged violation. The litigant may then proceed only after
the service of a second 10-day notice results in no action on the part of
the Attorney General.
We feel that these specified safeguards are ample protection
against frivolous and abusive lawsuits. Should, however, the courts
experience a significant number of palpably frivolous lawsuits, this
court may not be without the tools to fashion a remedy within its rule-
making powers.
Fritz, 83 Wash. 2d at 314 (emphasis omitted). Thus, Fritz does not support BIAW' s
argument on this point.
We hold that RCW 42.17 A.765 precludes a citizen suit only where the AG or
local prosecuting authorities bring a suit themselves, and it does not preclude a
citizen suit where the AG declines to sue. 5
5We do not address the question of whether administrative action by the PDC
against an entity would preclude a citizen suit, as discussed in note 2, supra.
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III. . THE DEFINITION OF "POLITICAL COMMITTEE"
We next consider whether the trial court erred in granting summary judgment
to BIAW. Specifically, we must decide if the plaintiffs have raised a genuine issue
of material fact regarding whether BIAW fell within the statutory definition of a
"political committee" during the relevant time period. We hold that they have.
A. Plaintiffs Have Raised a Genuine Issue ofMaterial Fact about Whether BIAW
Fell under Washington's Definition of a "Political Committee" During the
2007-2008 Campaign Season
A "political committee" is required to file a statement of organization with the
PDC, RCW 42.17 A.205(1), and make a variety of detailed disclosures. Id.; see also
RCW 42.17 A.235. The central issue here is whether BIAW (as opposed to BIAW-
MSC) was a political committee and therefore violated the law by failing to file and
disclose.
RCW 42.17 A.005(37) defines "political committee":
"Political committee" means any person (except a candidate or an
individual dealing with his or her own funds or property) having the
expectation of receiving contributions or making expenditures in
support of, or opposition to, any candidate or any ballot proposition.
(Emphasis added.) Thus, under this statute, an entity becomes a "political
committee" with reporting requirements if it "expect[s]" to "receiv[e] contributions"
or "mak[ e] expenditures" regarding an upcoming election. !d. The statute does not
say what proportion of the entity's purpose, if any, must be devoted to "expect[ed]"
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expenditures to qualify as a political committee with reporting requirements. Id.
To provide some background for our discussion of this definition and how it
applies to this case, we begin by reviewing the few prior Washington decisions
interpreting that statutory definition. This court has addressed the definition of
"political committee" in only one relevant case, State v. (1972) Dan J. Evans
Campaign Comm., 86 Wash. 2d 503, 546 P.2d 75 (1976). 6 The relevant portion is only
one paragraph, and since that paragraph represents almost all this court's
jurisprudence on the issue, we quote it in full:
In the instant case, the Dan Evans Committee made a single
contribution of $500 to the Early Birds Fund of the Washington
Republican Central Committee, a political committee obligated to
disclose the contribution. The record reflects no expenditures for the
purpose of supporting or opposing a specific candidate or ballot
proposition. No other contributions of a similar nature were made.
There is no competent evidence in the record to indicate that the Dan
Evans Committee solicited, received, or even had the expectation of
receiving contributions to be used in support of or in opposition to
candidates or ballot propositions. To require reporting and disclosure
by the Dan Evans Committee or other persons who make a single
contribution to a political committee under these circumstances (in the
absence of other qualitative facts) would result in an unnecessary and
unreasonable duplication and extension of the act's detailed and
somewhat lengthy reporting requirements. Where the surrounding
facts and circumstances indicate that the primary or one ofthe primary
purposes of the person making the contribution is to affect, directly or
6 We have held that the words "in support of, or opposition to, any candidate" in the
statutory definition did not render the statute vague, but that holding is not relevant here.
Voters Educ. Comm. v. Wash. State Pub. Disclosure Comm 'n, 161 Wash. 2d 470, 490, 166
P.3d 1174 (2007).
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indirectly, governmental decision making by supporting or opposing
candidates or ballot propositions, then that person becomes a 'political
committee' and is subject to the act's disclosure requirements. See
Attorney General Opinion 1973, June 8, 1973. The primary purpose of
the Dan Evans Committee was not to influence the political process by
supporting or opposing candidates or ballot propositions through
expenditures of its funds, but to pay for miscellaneous expenses
incurred by Governor Evans and his staff in connection with his
position as a public official. Plaintiffs contention to the contrary
creates no material issue of fact.
!d. at 508-09 (some emphasis added). This discussion first uses the language "the
primary or one ofthe primary purposes" to describe what it takes to trigger reporting
requirements based on election expenditures. Id. at 509 (some emphasis added).
But it actually concludes that the committee in that case lacked "the primary
purpose[ ]" of influencing an election without going on to address whether it also
lacked a primary purpose of doing so. !d. (some emphasis added). Thus, although
this case has been cited for adopting a looser "a primary purpose" test triggering
filing and reporting requirements under the "expenditure" prong of RCW
42.17 A.005(37), rather than the more restrictive "the primary purpose" test as the
prerequisite, the case does not clearly express that as a holding.
The Court of Appeals, however, has so held, in only one case (not counting
the instant case). According to the Court of Appeals:
The Act sets forth two alternative prongs under which an
individual or organization may become a political committee and
subject to the Act's reporting requirements. "'Political committee"'
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means any person ... having the expectation of receiving contributions
or making expenditures in support of, or opposition to, any candidate
or any ballot proposition." RCW 42.17.020(33). Thus, a person or
organization may become a political committee by either (1) expecting
to receive or receiving contributions, or (2) expecting to make or
making expenditures to further electoral political goals.
State ex rei. Evergreen Freedom Found. v. Wash. Educ. Ass 'n, 111 Wash. App. 586,
598, 49 P.3d 894 (2002) (EFF) (alteration in original). The EFF court then stated
that, according to this court in Dan J Evans, an entity will not become a political
committee with filing and disclosure requirements under the "expenditure" prong
unless it also has the support of a political candidate or initiative as the "'primary or
one of the primary purposes.'" Id. at 598-99 (quoting Dan J Evans, 86 Wash. 2d at
509).
The parties make statutory and constitutional arguments about how to
interpret, and to apply, these "primary purpose" tests. As this summary shows, our
prior precedent does not fully answer those questions. Clearly, though, an entity can
meet the definition of a "political committee" under either the "receiving
contributions" or "making expenditures" portion of the statutory definition, plus
whatever "purpose" test might also be added on to that statutory definition. We
address whether the plaintiffs' claims survive under either the contribution prong or
the expenditure prong of the statute, and we deal with the controversy over the
"purpose" test under the expenditure prong-the only prong under which BIAW
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raises it.
1. Contribution Prong
The Court of Appeals in this case stated that "the evidence does not create a
genuine issue of material fact as to the contribution prong." Utter, 176 Wash. App. at
656. It explained, "The issue is whether BIAW or BIAW-MSC expected to receive
and ultimately did receive the ... funds [contributions] from the local associations."
Id. (emphasis added). It then concluded that because BIAW-MSC, not BIAW,
ultimately received the contributions in its account and then disbursed them to a
registered political committee, ChangeP AC, there was no issue of fact as to whether
BIAW expected to receive contributions. Id.
But the contribution prong, as the Court of Appeals stated correctly earlier in
its opinion, asks whether an organization "expects to receive or receives
contributions toward electoral goals. "Id. at 655 (emphasis added) (citing EFF, 111
Wash. App. at 599). Not whether it expects to receive and receives. That
interpretation is in line with the statutory language: "'Political committee' means
any person . . having the expectation of receiving contributions or making
expenditures." RCW 42.17A.005(37). "Expectation" clearly applies to
"contributions" (and also "expenditures").
The plaintiffs therefore have the better of the argument when they say that the
ultimate disposition of the funds does not answer the contribution question; the
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expectation is what matters. And here, as plaintiffs explain, they have presented
evidence tending to show that BIAW expected contributions.
This is clear from the statutory definition of "contribution" and the plaintiffs'
evidence tending to show such "contributions." A "contribution" is defined in part
as a "pledge," RCW 42.17 A.005(13)(a)(i), and an organization must register as a
political committee "within two weeks after organization or within two weeks after
the date the committee first has the expectation of receiving contributions or making
expenditures in any election campaign, whichever is earlier." RCW 42.17 A.205(1 ).
The plaintiffs filed multiple contemporaneous documents soliciting pledges for
"BIAW" as well as documents stating that pledges were made "to BIAW." E.g., CP
at 419, 432, 433, 435. This includes, for example, an e-mail from Daimon Doyle,
then BIAW and BIAW-MSC president, dated March 12, 2007, stating, "Attached
are the following documents: the formal resolution (rossi-lution) that we will be
asking our 15 locals to support as well as some talking points .... We ... need to
be extra careful ... since Dino is not a declared candidate we can't raise money for
him therefore all official references are for a '08 candidate for Governor." CP at
410. The "rossi-lution" itself stated:
WHEREAS BIAW is committing 100% of excess retro dollars to the
2008 gubernatorial election,
WHEREAS participation of local associations is necessary for success,
NOW THEREFORE BE IT RESOLVED THAT,
19
Utter et al. v. Bldg. Indus. Ass'n ofWash., No. 89462-1
The following local associations pledge that all Retro Marketing
Assistance funds received in 2007, beyond the amount budgeted for the
year, will be sent to the BIAW and placed in the BIAW 2008
gubernatorial election account, to be used for efforts in the 2008
gubernatorial race.
CP at 411. The plaintiffs also point to meeting minutes of local associations that
appear to make pledges directly to BIAW. For example, "[i]t was MSPU [motion,
seconded, passed, unanimous] to give BIAW the excess of budgeted funds ... to
help in the governor race in 2008." CP at 433. Numerous additional documents-
e-mails, meeting minutes, agendas, and organizational resolutions-also state that
"BIAW" is soliciting funds to support its candidate in the upcoming election. See
generally CP at 410-55.
The Court of Appeals and BIAW explain that this evidence does not prove
anything about BIAW' s intentions or expectations because "BIAW submitted
evidence that 'BIAW' was used generically to refer to BIAW-MSC, BIAW, or
both." Utter, 176 Wash. App. at 656. Therefore, "[t]he documents to which Utter and
Ireland point fail to create an issue of fact." I d.
BIAW' s premise does not lead to its conclusion. Instead, the fact that
"BIAW" could refer to either or both BIAW and BIAW-MSC means that the use of
"BIAW" in the documents at issue does not clarify to which organization the
documents refer. The admittedly dual meaning of "BIAW" means that two
20
Utter eta!. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
interpretations are possible. 7 It leaves an open question of fact about which
interpretation is correct in each context. The BIAW' s officers' declarations
explaining that BIAW was really asking the local organizations to pledge to
ChangePAC, not BIAW, e.g., CP at 153, are not sufficient to support summary
judgment in light of the plaintiffs' evidence, either. As the plaintiffs point out, the
ultimate collection of the pledged funds and distribution to ChangePAC, which does
seem to have been accomplished by BIA W-MSC, occurred after the date that the
plaintiffs first filed their complaint with the AG's office. And, as noted above, the
legal question is which organization had the expectation of receiving contributions.
The ultimate acquisition of such funds may certainly be a fact relevant to
determining whether an organization expected to receive funds; similarly, BIAW's
practice of using "BIAW" to refer to both "BIAW" and "BIAW -MSC" is also a fact
relevant to making that determination. But neither fact is dispositive, since BIAW
itself acknowledges that "BIAW" sometimes really does mean just "BIAW."
Plaintiffs have established a genuine issue of material fact that precludes
summary judgment on the contribution prong.
2. Expenditure Prong
BIA W argues that for plaintiffs to prove BIAW is a "political committee"
7 See, e.g., Anthis v. Copland, 173 Wash. 2d 752, 756, 270 P.3d 574 (2012) (statute
subject to two reasonable interpretations is ambiguous).
21
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
under the expenditure prong, plaintiffs must show that ( 1) BIAW made or expected
to make expenditures in support of a candidate and (2) BIAW had "the primary
purpose" of supporting an election candidate or initiative. We deal with each
argument in turn.
1. There Is a Material Question of Fact about Whether BIAW (as
Opposed to BIAW-MSC) Expended or Expected To Expend Funds
The plaintiffs argue that BIAW, not BIAW-MSC, expected to and then
actually made the expenditures at issue here. The plaintiffs point to the doubtful
ownership of the ROil funds (for example, if BIAW receives the funds and then
gives them to BIAW-MSC with the express purpose that BIAW-MSC spend them
to help elect Dino Rossi, who is "expending" those funds?). They also rely on a
number of documents that BIAW filed with the PDC stating that BIAW was
expending funds. For example, one typical document states that the "Building
Industry Assn ofWA" expended $233,648.89 to support candidate Dino Rossi. CP
at 253.
BIAW responds that this expenditure, and the other documented expenditures
also listing "BIAW" as the entity expending funds, was really made by BIA W-
MSC-but there was not enough room on the PDC forms to fill in the full name .
.BIAW further asserts that the PDC investigation found that it was BIAW-MSC that
expended the funds, not BIAW, and that that is dispositive.
22
Utter eta!. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
The Court of Appeals agreed with BIAW. It stated that most of the plaintiffs'
documents did not create any issue of fact as to the expenditure prong, 8 and it relied
on the PDC report that formed the basis for the AG's decision not to sue BIA W.
Utter, 176 Wash. App. at 658. 9
The concurrence/dissent similarly argues, "In this circumstance, we should
defer to the PDC's findings because of its expertise in this area, and particularly
because of the PDC's fact-finding role, in which it weighed and evaluated
conflicting evidence, in reaching its determination that only the BIAW subsidiary,
BIAW-MSC, qualified as a political subcommittee." Concurrence/dissent at 4. The
concurrence/dissent also states that the PDC is "the agency created by and charged
with enforcing the FCPA." Concurrence/dissent at 6.
The Court of Appeals and the concurrence/dissent err for three reasons: first,
8
The Court of Appeals found there was a factual question as to the expenditure
prong based on BIA W's 2008 Internal Revenue Service (IRS) form, which stated that
BIA W made political expenditures in the amount of $165,214. Utter, 176 Wash. 2d at 659.
BIA W argues that was simply a mistake and therefore does not create an issue of fact. The
plaintiffs have, however, likely raised an issue of fact as to who made the expenditures
based on BIAW's submissions to the PDC naming itself and not BIAW-MSC. Again,
BIAW' s argument that "BIAW" can refer to either entity or both entities seems to create,
rather than resolve, the factual question. Also, BIAW' s argument that its 2008 IRS form
contained a clerical error might well be accepted by a fact finder but, in light of all the other
evidence, it is not sufficient to support summary judgment.
9While the trial court in this case did not explain its reasoning, its summary
judgment order states that it considered the PDC's "Executive Summary and Staff
Analysis" and the PDC's "Report of Investigation." CP at 833.
23
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
the PDC's legal conclusions here concern statutory interpretation ofthe FCPA, and
we therefore apply de novo, not deferential, review; second, the PDC's factual
conclusions about whether a set of documents definitively establishes BIAW' s
independence from BIAW-MSC is neither technical nor complex, so we need not
defer; and third, the PDC's decision on this point was not an "agency determination"
and thus once again, we do not defer.
First, the PDC's conclusion that BIAW is not a political committee is based
at least in part on its interpretation of the FCP A, a statute. "Where statutory
construction is concerned, the error of law standard applies." Pub. Uti/. Dist. No. 1
ofPend Oreille County v. Dep 't ofEcology, 146 Wn.2d 778,790, 51 P.3d 744 (2002)
(citing RCW 34.05.570(3)(d)). To apply this standard, "the court determines the
meaning and purpose of a statute de novo, although in the case of an ambiguous
statute which falls within the agency's expertise, the agency's interpretation of the
statute is accorded great weight, provided it does not conflict with the statute." Id.
(citing Postema v. Pollution Control Hr'gs Bd., 142 Wash. 2d 68, 77, 11 P.3d 726
(2000)). Because the FCPA is not ambiguous, we need not defer to the PDC's
conclusion that BIAW was not a political committee in our de novo review.
Second, we recognize that the PDC based its conclusion partly on an
assessment of facts; but "substantial deference to agency views" applies mainly to
factual matters that are "complex, technical, and close to the heart of the agency's
24
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
expertise." Hillis v. Dep 't of Ecology, 131 Wash. 2d 373, 396, 932 P.2d 139 (1997).
The question about the meaning of documents listing "BIAW," not "BIAW-MSC,"
is neither complex nor technical. The question before us-whether documents
listing "BIAW," not "BIAW-MSC," as the entity that solicited and obtained pledges
merely raises a material question of fact about whether they mean "BIAW" or
"BIAW-MSC"-is even less complex or technical. The limited amount of technical
knowledge required to evaluate these documents also militates against judicial
deference.
Finally, the PDC's investigation informing the AG of the beliefs of the PDC
staff was not an agency determination to which courts must defer. It was a decision
against taking action and against seeking a final determination. RCW 42.17A.755
states:
(1) The commissiOn may (a) determine whether an actual
violation of this chapter has occurred; and (b) issue and enforce
an appropriate order following such a determination.
(2) The commission, in cases where it chooses to determine
whether an actual violation has occurred, shall hold a hearing
pursuant to the administrative procedure act, chapter 34.05 RCW,
to make a determination. Any order that the commission issues
under this section shall be pursuant to such a hearing.
(3) In lieu of holding a hearing or issuing an order under this
section, the commission may refer the matter to the attorney
general or other enforcement agency as provided in RCW
42.17A.105.
25
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
(6) An order issued by the commission under this section shall
be subject to judicial review under the administrative procedure
act, chapter 34.05 RCW.
Thus, when the PDC chooses to determine if a violation occurred, it must either hold
an official hearing under the Administrative Procedure Act or refer the matter to the
AG in accordance with RCW 42.17A.105. RCW 42.17A.105(5), the only section
relevant to the nondetermination at issue here, states that the PDC shall, "[u]pon
complaint or upon its own motion, investigate and report apparent violations of this
chapter to the appropriate law enforcement authorities." A report concluding that
the PDC does not believe any violation requires reporting or other agency action
does not fall under any of the statutory categories that we could interpret as
constituting an agency action.
Indeed, as a practical matter, if the trial court can rely on the PDC's
conclusions to grant summary judgment, the effect will be similar to the effect of
holding that a PDC investigation alone precludes citizen suits. Such a holding would
make citizen suits virtually impossible because it is precisely those situations where
the PDC finds no violation occurred that the AG will likely refuse to sue. The Court
of Appeals therefore erred when it deferred to the PDC report.
Without deference to the PDC report, we are left with BIAW' s argument that
the actual expenditures all came from BIAW-MSC, not BIAW. But RCW
26
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
42.17 A.205(1) states that a political committee must register "within two weeks after
the date the committee first has the expectation of . .. making expenditures in any
election campaign." (Emphasis added.) And a political committee includes an
organization "having the expectation of . . . making expenditures." RCW
42.17A.005(37). The plaintiffs' evidence that BIAW, not BIAW-MSC, solicited
pledges from its local associations, and that those local associations pledged "to
BIAW," not BIAW-MSC or ChangePAC, raises a question of fact as to whether
BIAW had an expectation of making political expenditures, regardless of who
actually ended up expending the funds.
n. We Endorse the "A" Primary Purpose Test and Hold That There Is
a Material Question of Fact about Whether BIAW (as Opposed to
BIAW-MSC) Satisfied That Test
a. The Reporting Statute Contains No "Purpose" Test At All; To
Construe That Statute as Constitutional, We Must Infer "a
Primary Purpose" Test
RCW 42.17 A.005(37) does not say anything about whether an entity will be
treated as a "political committee" even if influencing an election is a minor part of
its mission. This is, however, an important First Amendment issue, and both parties
seem to agree that some "purpose" test must be, or has been, added on to the statute
to construe it properly.
In this case, the Court of Appeals described the applicable "purpose" test as
follows: "an organization must have as its primary purpose, or one of its primary
27
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
purposes, to affect, directly or indirectly, governmental decision making by
supporting or opposing candidates or ballot propositions." Utter, 176 Wash. App. at
657 (emphasis added) (citing Dan J Evans, 86 Wash. 2d at 509). It explicitly declined
to address BIAW's contention that this "one of its primary purposes" test violates
the First Amendment. Id. at 654 n.4.
The Court of Appeals correctly determined-in dicta-that the numerous
statements made by BIAW officials and submitted as evidence by plaintiffs raised a
question of fact as to whether a primary purpose of the BIAW was to elect Dino
Rossi. But the evidence does not appear to raise a question of fact as to whether that
was the primary purpose of BIAW-BIAW existed long before the 2007-2008
campaign season and has many other purposes. See, e.g., CP at 153 (declaration of
Tom McCabe, former BIAW officer, stating that BIAW's main purposes are
"membership and education"). So we cannot resolve the issue of whether there is a
question of fact without determining the correct test first.
BIAW argues that permitting regulation based on a primary purpose of the
entity being the support or opposition of a "candidate or . . . ballot proposition,"
RCW 42.17A.005(37), as opposed to the primary purpose of that entity, is
unconstitutional under Buckley v. Valeo, 424 U.S. 1, 96 S. Ct. 612, 46 L. Ed. 2d 659
(1976) (per curiam). Specifically, BIAW argues that defining "political committee"
to include organizations with "a" primary purpose of supporting a candidate rather
28
Utter et al. v. Bldg. Indus. Ass'n of Wash., No. 89462-1
than "the" primary purpose of supporting a candidate violates the First Amendment
to the United States Constitution because it chills political speech. Plaintiffs, for
their part, would also read some "purpose" test into the statute-they cite the "a"
primary purpose test first stated by this court in Dan J. Evans and then adopted by
the Court of Appeals in EFF, in both cases without discussion of any constitutional
implications. BIA W relies on a Fourth Circuit case adopting the "the primary
purpose'.' test to satisfy First Amendment concerns, N.C. Right to Life, Inc. v. Leake,
525 F.3d 274, 289 (4th Cir. 2008). BIAW's Suppl. Br. at 14-15. Plaintiffs point
out, however, that the exact argument BIAW makes was rejected by the Ninth
Circuit two years later in Human Life of Washington Inc. v. Brumsickle, 624 F.3d
990 (9th Cir. 2010). That case specifically addressed what it perceived as
Washington's "a primary purpose" test and concluded it did not violate the First
Amendment: "We disagree with Human Life's reading of Buckley, and we reject its
invitation to adopt a bright-line rule prohibiting all regulation of groups with 'a'
primary purpose of political advocacy." Brumsickle, 624 F.3d at 1009. Brumsickle
and Leake thus represent a circuit split on this issue.
There is likely no question of fact about whether the primary purpose of
BIAW is to support candidates or initiatives. Thus we must decide whether to
expressly approve the purpose test we first enunciated, though arguably as dicta, and
certainly without considering the constitutional implications, in Dan J. Evans-that
29
Utter eta!. v. Bldg. Indus. Ass'n ofWash., No. 89462-1
the support of a candidate or initiative must be "the primary or one of the primary
purposes" of a person expending funds for the State to subject them to regulation as
a political committee based on their expected expenditures. 86 Wash. 2d at 509
(emphasis omitted).
Seven circuits have addressed this question. Brumsickle, as noted above,
considered the question in the context of Washington law. It applied the "exacting
scrutiny" standard of review mandated by Buckley, 424 U.S. at 16, and Citizens
United v. Federal Election Commission, 558 U.S. 310, 366-67, 130 S. Ct. 876, 175
L. Ed. 2d 753 (2010), for evaluating the constitutionality ofthe campaign disclosure
(as opposed to contribution or expenditure limit) statutes, ruled that there was a
substantial relationship between Washington's "informational interest and its
decision to impose disclosure requirements on organizations with a primary purpose
of political advocacy," and approved of what it perceived as our "a" primary purpose
test. Brumsickle, 624 F .3d at 1009-11. Brumsickle was followed by the First Circuit
in National Organization for Marriage v. McKee, 649 F.3d 34, 59 (1st Cir. 2011).
That court stated that endorsement of the "the" primary purpose test could "yield
perverse results" because
"a small group with the major purpose of re-electing a Maine state
representative that spends $1,500 for ads could be required to register
as a [political action committee (PAC)]. But a mega-group that spends
$1,500,000 to defeat the same candidate would not have to register
30
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
because the defeat of that candidate could not be considered the
corporation's major purpose."
Id. (quoting Nat'l Org. for Marriage v. McKee, 723 F. Supp. 2d 245, 264 (D. Me.
201 0) ). The Seventh Circuit agreed with Brumsickle and McKee and held that state
campaign disclosure laws are not overbroad for lacking "the major purpose" test.
Ctr. for Individual Freedom v. Madigan, 697 F.3d 464, 491 (7th Cir. 2012). And,
most recently, the Second Circuit followed suit, stating, "We join the Circuits that
have considered PAC definitions in this context after Citizens United and hold that
the Constitution does not require disclosure regulatory statutes to be limited to
groups having 'the major purpose' of nominating or electing a candidate." Vt. Right
to Life Comm., Inc. v. Sorrell, 758 F.3d 118, 136 (2d Cir. 2014). Thus, four of the
seven circuits that have addressed the question have found that state disclosure
requirements need not be limited to organizations with "the" major (or primary)
purpose of electioneering to comply with the First Amendment.
The Eighth Circuit has not directly answered the question, but it has
recognized the circuit split and appears to engage in a sort of balancing test. It has
held that "the major purpose" of an organization is an "important consideration" in
determining the extent of permissible regulation. Iowa Right To Life Comm., Inc. v.
Tooker, 717 F.3d 576, 592 (8th Cir. 2013). It also found, however, that some
31
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
regulation is permissible without "[the] major purpose" test, depending on the type
and extent of regulation. I d. at 594.
The Fourth and Tenth Circuits have rejected state disclosure requirements that
lack "the major purpose" test. The Tenth Circuit, though, does not appear to
distinguish between a test that uses "a" major purpose and one that uses "the" major
purpose. See Colo. Right To Life Comm., Inc. v. Coffman, 498 F.3d 1137, 1155 (lOth
Cir. 2007) (referring to legislation that used the phrase "a major purp?se" as
including "the very 'major purpose' test at issue"). Thus it appears that only the
Fourth Circuit has unequivocally rejected a state law that requires "a" primary
purpose of electioneering rather than "the" primary purpose to subject a
campaigning entity to filing and disclosure requirements. Leake, 525 F.3d at 287
("the importance the plaintiffs attach to the definite article is correct"). Since Leake
was decided, the First, Second, Seventh, and Ninth Circuits have rejected its
reasonmg.
We agree with the majority of circuits that have addressed this issue. As
discussed, the statutory definition of "political committee" contains no limitation
regarding the purpose of such a committee. Reading some stringent purpose
requirement, like the "a" primary purpose test, into our statute is necessary to satisfy
First Amendment concerns. Adopting the even more stringent "the" primary
purpose test, however, would likely contravene the intent of the voters to extend the
32
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
reach of this state's filing and disclosure requirements as much as possible and is not
necessary to satisfy the First Amendment. Brumsickle, 624 F.3d at 1009.
Additionally, Washington courts have previously espoused an "a" primary purpose
test. Dan J. Evans, 86 Wash. 2d at 509; accord EFF, 111 Wash. App. at 598-99.
b. Plaintiffs Have Raised a Genuine Issue of Fact under
Washington's "a" Primary Purpose Test
The plaintiffs have established a question of fact as to whether BIAW had the
support of a candidate as one of its primary purposes during the 2007-2008 campaign
season. For example, the plaintiffs submitted BIAW board of director meeting
minutes stating that "BIAW' s number one priority this campaign season would be
to help Rossi get elected." CP at 608. A letter from BIA W's 2008 president Brad
Spears to BIAW members whose memberships were about to expire states that
"BIAW is putting forth the largest political effort in the entire history of the
association 'to re-elect' Dino Rossi as governor." CP at 406. Minutes of a local
association's directors' meeting state, "On behalf of BIAW, Brad Spears spoke to
the Board [and] talked about how we have a Governor who is unfriendly to our
industry .... BIA W has decided that with this scenario all of our efforts for the next
two years need to be expended on electing a new Governor in 2008." CP at 418-19.
And an issue ofBIA W's newsletter, Building Insight, contains an article titled "An
33
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
Open Letter to all [Master's Building Association] Members from BIA W Senior
Officers," which states:
As the Building Industry Association of Washington's (BIAW) 2008
Senior Officers, it is a pleasure and an honor to serve as the leaders of
this great association. Our primary goal this year has been to unify
BIAW members and local associations behind a coordinated, all out
effort to elect Dino Rossi as Governor . . . . BIAW is running an
aggressive and truthful campaign to elect Dino. It is our hope and
desire that you will join us in this endeavor and encourage your local
association (MBA of King and Snohomish Counties) to actively
participate with us to achieve this goal.
CP at 368 (emphasis added).
BIAW argues that all the statements by BIAW officers about BIAW were in
fact statements in their capacities as BIAW-MSC officers about BIAW-MSC. We
discussed this argument above; it is an argument for the trier of fact. The BIAW
officer declarations saying that BIAW's main purposes are "membership and
education," CP at 153, are not sufficient to support a grant of summary judgment in
light of the plaintiffs' evidence.
B. The Decision in WBBT Does Not Collaterally Estop BIA W from Denying
That It Owns the Funds at Issue Here
The parties argue about whether a recent case, In re Washington Builders
Benefit Trust, 173 Wash. App. 34, 45, 293 P.3d 1206 (WBBT), review denied, 177
Wash. 2d 1018 (2013), conclusively proves thatBIAW owned the ROil funds that were
handled through BIAW-MSC's accounts. WBBT concerned a trust established by
34
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
BIAW, the Washington Builders Benefit Trust, for the purpose of holding and
investing the ROil funds BIAW got from L&I under its retro program. The WBBT
case is extremely complicated and involved complaints by participants in the retro
program that BIAWand BIAW-MSC, trustees of the trust, were "retaining interest
earned on deposited funds, commingling funds, and failing to provide statutorily
required accountings" as well as "violat[ing] their fiduciary duties under the trust
agreement in expending funds earmarked for marketing and promotion of the plan."
WBBT, 173 Wash. App. at 43. Part of the case involved determining what
organizations controlled the funds that were supposed to go into the trust and when
they controlled them. WBBT found, for example, that "[i]n July of each year, the
BIAW-Member Services Corporation transferred an additional 10 percent
marketing assistance fee to its money marketing accounts, which fee was distributed
to BIAW." !d. at 50-51.
The plaintiffs argue that BIAW is collaterally estopped from denying it owns
the funds at issue here because that issue was litigated in WBBT and BIAW lost.
But, as BIAW points out, a prerequisite to application of collateral estoppel is that
the identical issue was litigated. BIAW is correct that the issue in WBBT is not
identical to the issue here: who controls funds for purposes of determining whether
a trustee violated fiduciary duties or contractual obligations is not the same issue as
who expended or expected to expend funds for political committee registration
35
Utter eta!. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
purposes. In addition, in the absence of collateral estoppel, plaintiffs cannot rely on
WBBT to create an issue of fact any more than BIAW can rely on the PDC
investigation to argue that there is no issue of fact.
C. We Do Not Reach BIAW'S Argument That Reporting Requirements for
Political Committees Would Be Unconstitutionally Onerous as Applied to
BIAW
BIAW argues that the reporting requirements for political committees would
be unconstitutionally onerous as applied to BIAW if it were considered a "political
committee."
As discussed above, BIAW is correct that political committee registration
requirements are subject to "exacting scrutiny." Brumsickle, 624 F .3d at 1005
(citing Citizens United, 558 U.S. at 366-67). Under exacting scrutiny, the question
of whether any applicable registration requirements, as applied to BIAW during any
relevant time period, would have resulted in an unconstitutionally onerous burden
involves a strong factual component-it would require a court to address the specific
reporting requirements and balance the burden of the disclosure requirements for the
specific time period in that particular case against the government's interest in
providing the public with campaign finance information. See Brumsickle, 624 F .3d
at 1008, 1013. We do not have a sufficient factual record to determine whether any
applicable reporting requirements as applied to BIAW at the relevant time would
have been onerous or would have been substantially related to the government's
36
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
interest, nor have the parties briefed this issue in depth. This constitutional issue is
thus not ripe for review.
D. The ''Attribution" Statute Applies Only to Aggregate Contributions and Not
to the Definition of "Political Committee"
Plaintiffs argue that the FCPA permits automatic attribution of contributions
or expenditures by one organization to a parent or controlling organization for
purposes of defining a "political committee." BIAW argues that the FCPA permits
such automatic "attribution" only for purposes of contribution limits and not for
purposes of determining whether an organization has received contributions or made
expenditures that require it to register as a political committee. 10
The plaintiffs rely mainly on just one sentence from RCW 42.17A.455, which
states, in relevant part:
For purposes of this chapter:
... All contributions made by a person or political committee whose
contribution or expenditure activity is financed, maintained, or
controlled by a trade association, labor union, collective bargaining
organization, or the local unit of a trade association, labor union, or
collective bargaining organization are considered made by the trade
association, labor union, collective bargaining organization, or local
unit of a trade association, labor union, or collective bargaining
organization.
10
The following organizations have submitted an amici briefing in support of
BIA W's argument on this particular point: Washington State Labor Council, SEIU
Healthcare 775NW, UFCW 21, Washington Education Association, SEIU Healthcare
1199NW, and SEIU Local 925.
37
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
RCW 42.17 A.455(2). The plaintiffs assert that this statute applies to the definition
of "political committee"-"any person ... having the expectation of receiving
contributions or making expenditures in support of, or opposition to, any candidate
or any ballot proposition." RCW 42.17 A.005(37). "'Expenditure' includes a ...
contribution." RCW 42.17 A.005(20). Thus, plaintiffs argue that since "[a]ll
contributions made by a person or political committee whose contribution or
expenditure activity is ... controlled by a trade association ... are considered made
by the trade association," RCW 42.17 A.455(2), if BIAW-MSC made contributions
or expenditures and plaintiffs show BIAW controlled BIAW-MSC, then all of
BIAW-MSC's contributions or expenditures are automatically attributed to BIAW.
Plaintiffs' argument is largely based on the fact that RCW 42.17 A.455 begins, "For
purposes of this chapter" and the "chapter" is all of chapter 42.17 A RCW. They
point out that there is no good reason to apply this "attribution" statute only to
contribution limits, except that it would be very inconvenient for the defendants.
BIAW counters that the attribution statute does not apply to the definition of
"political committee" but only to limits on campaign contributions. BIAW points
out that the statute at issue was created by a citizens' initiative 20 years after the
definition of "political committee" was codified (also as a result of a citizens'
initiative), and that the text of the initiative in the voter's pamphlet gave no indication
that the initiative was intended to expand registration obligations. Rather, BIAW
38
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
argues, the initiative was labeled "AN ACT Relating to the regulation of political
contributions and campaign expenditures." LAWS OF 1993, ch. 2, § 1 (Initiative
Measure No. 134, approved Nov. 3, 1992). Part III of the initiative, where the
attribution rule appears, is labeled "CONTRIBUTIONS." Id. § 4. And the other
sections in Part III address contribution limits, not reporting requirements. Further,
BIAW argues that the legislation contains a statement of the voters' intent (which
also appeared in the language of the initiative}:
(2) By limiting campaign contributions, the people intend to:
(a) Ensure that individuals and interest groups have fair and equal
opportunity to influence elective and governmental processes;
(b) Reduce the influence oflarge organizational contributors; and
(c) Restore public trust in governmental institutions and the
electoral process.
RCW 42.17 A.400 (emphasis added). 11
The Court of Appeals agreed with the BIAW that the attribution statute did
not apply to the definition of "political committee" but only to caps on campaign
11 BIA W also contends that our court has acknowledged that the attribution statute
was intended to apply to contribution limits, not to the determination of who is a "political
committee." We did state that "[RCW 42.17A.455] specifies a relationship between
entities in which those entities are considered a single entity for purposes of campaign
contribution limits." Edelman v. State ex rel. Pub. Disclosure Comm 'n, 152 Wash. 2d 584,
590, 99 P.3d 386 (2004) (emphasis added). However, that statement was likely dicta-the
court in Edelman was not presented with the question whether the attribution statute could
apply outside the campaign contribution limits context.
39
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
contributions. The Court of Appeals and BIAW rely heavily on American Legion
Post No. 149 v. Washington State Department of Health, 164 Wash. 2d 570, 192 P.3d
306 (2008), to reach this conclusion. In American Legion, this court ignored a
statutory provision resulting from an initiative that stated that the statute applied to
"'[t]his chapter."' Id. at 586-91 & n.7. But we held that the phrase did not mean
what it said because "such a reading would eviscerate much of the [Smoking in
Public Places] Act[, ch. 70.160 RCW,] and interfere with the express intent of the
voters." !d. at 588-89. Those are strong words. And even so, there was a vigorous
dissent signed by several justices arguing that "this chapter" is entirely
unambiguous. Id. at 637 (J.M. Johnson, J., dissenting). By contrast, applying the
attribution statutes to the definition of "political committee" would not eviscerate
the FCPA or interfere with the express intent of the voters to "(a) [e]nsure that
individuals and interest groups have fair and equal opportunity to influence elective
and governmental processes; (b) [r]educe the influence of large organizational
contributors; and (c) [r]estore public trust in governmental institutions and the
electoral process." RCW 42.17 A.400(2).
Nevertheless, the bulk of the textual analysis supports BIAW's argument. The
initiative's statement of intent declares that the people intend to accomplish the goals
of the initiative "[b]y limiting campaign contributions." RCW 42.17 A.400(2). The
initiative itself contains no indication that it would impose expanded reporting
40
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
requirements related to the definition of "political committee," and the sections
surrounding the attribution section all relate to limits on making contributions.
Further, a comparison of the definition of "political committee" in RCW
42.17 A.005(37) with the attribution rule in RCW 42.17 A.455 reveals that the two
statutes are difficult to reconcile if they are supposed to apply to each other. For
example, a political committee has an expectation of "receiving contributions or
making expenditures," RCW 42.17 A.005(3 7) (emphasis added), while a
"contribution made by" a person can be considered "made by" a controlling entity
under RCW 42.17 A.455(2) (emphasis added). Political committees are defined by
making expenditures, not making contributions. Cross-referencing is cumbersome,
if not impossible. This favors BIAW' s argument that the statutes were never
intended to be read together.
Finally, plaintiffs' proposed interpretation poses constitutional problems. As
discussed above, Brumsickle upheld Washington's disclosure laws on the ground
that they satisfy the First Amendment's exacting scrutiny test, which examines
whether the law's requirements "are substantially related to a sufficiently important
governmental interest." Brumsickle, 624 F.3d at 1005. Washington's disclosure
laws are constitutional on their face because they serve an important government
interest and use a narrowly tailored means that does not force overburdensome or
duplicative reporting. !d. at 1013. If we interpret the second sentence of RCW
41
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
42.17A.455(2)-the attribution rule-to apply to the definition of "political
committee," then that definition of "political committee" is no longer narrowly
tailored. A union or trade organization with "a" primary purpose of electioneering,
which never received or expected election "contributions" itself but did speak freely
to its members about how to vote, could nevertheless become subject to the
disclosure requirements. Such an application of the attribution statute would
significantly broaden the definition of "political committee" and thus would
arguably flunk the First Amendment test under not just Brumsickle but also Buckley
(upon which Brumsickle is based).
We construe statutes to avoid constitutional doubt. State v. Robinson, 153
Wn.2d 689,693-94, 107 P.3d 90 (2005). This interpretive principle of constitutional
avoidance mandates that we choose the interpretation of the attribution rule that
limits its applicability to aggregation of contributions. That resolution avoids any
constitutional problem and also comports with the stated intent of the voters and the
statutory scheme as a whole. 12
CONCLUSION
12
Plaintiffs briefly make the same argument about another "[a]ttribution" statute,
RCW 42.17 A.460. (Boldface omitted.) But that statute does not include the language "for
the purposes of this chapter." Without that language, the plaintiffs' argument is
significantly less convincing than the one we rejected above, and we therefore reject that
one as well.
42
Utter et al. v. Bldg. Indus. Ass 'n of Wash., No. 89462-1
We (1) hold that the PDC's investigation did not preclude the plaintiffs'
citizen suit because the AG's referral of the plaintiffs' complaint to the PDC did not
"commence an action" within the meaning of the citizen suit statute, (2) hold that
the plaintiffs have presented evidence sufficient to raise a genuine issue of material
fact as to the contribution prong of the "political committee" definition, (3) adopt
the version of the "primary purpose" test that includes organizations that have the
support of a candidate or initiative as "one of' their primary purposes and hold that,
consequently, the plaintiffs have presented evidence sufficient to raise a genuine
issue of material fact as to the expenditure prong of the "political committee"
definition, (4) hold that the WBBT case does not collaterally estop BIAW from
denying ownership of the funds at issue, ( 5) decline to reach the constitutional
"onerous burden" issue, which is not ripe for review, and (6) hold that the so-called
"attribution" rule applies only to contribution limits and not to the determination of
who is a "political committee." We reverse the Court of Appeals and remand this
case for further proceedings in the superior court.
43
Utter ex rel. State v. BIAW, No. 89462-1
WE CONCUR:
44
Utter, et al. v. Bldg. Indus. Ass 'n of Wash.
No. 89462-1
MADSEN, C.J. (concurring/dissenting)-! agree with the majority that the
attorney general's (AG) referral of the plaintiffs complaint to the Public Disclosure
Commission (PDC) did not "commence an action" within the meaning of the citizen suit
statute, RCW 42.17A.765(4). Nevertheless, in my view, neither reversal of summary
judgment nor further proceedings are warranted in this case because the AG's
commencement of a lawsuit against Building Industry Association of Washington's
(BIA W) nonprofit arm precludes a further citizen suit against BIA W under RCW
42.17A.765(4)(a)(i) and because the PDC's determination resolves any fact question
regarding BIA W' s culpability. I would affirm the trial court's grant of summary
judgment.
Discussion
The Fair Campaign Practices Act (FCP A), chapter 42.17 A RCW, imposes
specified reporting obligations on "political committees," as defined by RCW
42.17 A.005(3 7) (discussed below). The task of enforcing those campaign disclosure
requirements falls primarily to the State. See, e.g., RCW 42.17A.755 (authorizing the
PDC to investigate alleged violations, initiate administrative enforcement proceedings,
No. 89462-1
Madsen, C. J. concurring/ dissenting
and levy fines not to exceed $10,000), .750(2) (authorizing the PDC to refer violators for
criminal prosecution), .765(1)-(3) (authorizing the AG and other prosecuting authorities
to investigate and bring civil enforcement actions). The act also grants limited
enforcement powers to citizens under the citizen suit provision, RCW 42.17 A.765(4).
That provision, however, precludes citizens from filing a civil lawsuit unless the "[t]he
attorney general and the prosecuting attorney have failed to commence an action
hereunder" and "have in fact failed to bring such action" within the statutory time
periods. RCW 42.17 A.765( 4)(a)(i), (iii).
The following relevant facts are undisputed. BIA W is a statewide nonprofit trade
association representing the interests of local building association members. BIA W-
Member Services Corporation (BIAW-MSC) is a wholly owned subsidiary ofBIAW and
is a for-profit corporation formed by BIA Win 1993 to run the Return on Industrial
Insurance Program 1 for BIAW members. BIAW and BIAW-MSC share the same staff
and officers, and such personnel commonly refer to both entities by the generic shorthand
"BIA W." Following an "exhaustive"2 investigation by the PDC, prompted by plaintiffs'
claims that BIA W and its subsidiary were violating the FCPA, the PDC issued a report
finding only that a discrete portion of the funds handled by BIA W-MSC within the 2007-
2008 election cycle fell within FCPA reporting requirements; the report otherwise
exonerated the BIAW organization. Based on that report, the AG commenced suit
1
BIAW-MSC manages and processes BIAW members' Department of Labor and Industries
overpayment refunds, referred to as the ROil or "retro" program. Clerk's Papers (CP) at 175.
2
Plaintiffs described the PDC's investigation to the trial court as "exhaustive." CP at 215 (Pl.'s
Opp. To Mot. for Summ. J. at 4).
2
No. 89462-1
Madsen, C.J. concurring/dissenting
against BIAW-MSC for violation of the FCPA. Thereafter, the plaintiffs filed a citizen's
suit against BIAW for violations of the FCPA. The trial court granted BIA W' s summary
judgment motion, and the Court of Appeals affirmed, holding that the plaintiffs' citizen
suit is barred because the AG commenced "an action" precluding a citizen suit when the
AG forwarded the plaintiffs' letter to the PDC for investigation. Utter v. Bldg. Indus.
Ass'n ofWash., 176 Wash. App. 646,674,310 P.3d 829 (2013).
The majority reverses the Court of Appeals and holds that "RCW 42.17 A.765
precludes a citizen suit only where the AG or local prosecuting authorities bring a suit
themselves, and it does not preclude a citizen suit where the AG declines to sue."
Majority at 13 (emphasis added). In so holding, the majority relies on the plain language
of the citizen suit statute, which provides in relevant part "[a] person ... may ... bring
... a citizen's action ... only if .. . [t]he attorney general and the prosecuting attorney
have failed to commence an action hereunder within forty-five days after the [specified]
notice." RCW 42.17A.765(4)(a)(i) (emphasis added); see also majority at 8. This
provision "seeks to give private citizens ... the right to enforce the Act only if the state
has not acted." State ex rel. Evergreen Freedom Found. v. Wash. Educ. Ass 'n, 111 Wn.
App. 586, 608, 49 P.3d 894 (2002) (EFF I) (emphasis added); see also State ex rel.
Evergreen Freedom Found. v. Nat'! Educ. Ass 'n, 119 Wash. App. 445, 453, 81 P.3d 911
(2003) (EFF II) (noting that the "clear intent" of the citizen's suit statute is that "the AG
or county prosecutor's 'commencement of an action' within the proscribed time period
precludes a citizen's action").
3
No. 89462-1
Madsen, C.J. concurring/dissenting
Here, the AG did commence a timely lawsuit against BIAW, via its for-profit
subsidiary. The AG filed that lawsuit on the basis of the PDC determination that BIA W-
MSC qualified as a political committee and had failed to comply with the reporting
requirements of the PCPA. 3 Accordingly, the AG filed suit against the BIA W subsidiary
that the PDC's investigation found to be culpable.
In this circumstance, we should defer to the PDC' s findings because of its
expertise in this area and particularly because of the PDC's fact-finding role, in which it
weighed and evaluated conflicting evidence, in reaching its determination that only the
BIA W subsidiary, BIA W-MSC, qualified as a political committee. "[S]ubstantial
judicial deference to agency views [is] appropriate when an agency determination is
based heavily on factual matters, especially factual matters which are complex, technical,
and close to the heart of the agency's expertise." Hillis v. Dep 't of Ecology, 131 Wash. 2d
373, 396, 932 P.2d 139 (1997). '"[I]t is well settled that due deference must be given to
the specialized knowledge and expertise of an administrative agency.'" Port of Seattle v.
Pollution Control Hr 'g's Bd., 151 Wash. 2d 568, 595, 90 P.3d 659 (2004) (alteration in
original) (quoting Dep 't of Ecology v. Pub. Utility Dist. No. 1 of Jefferson County, 121
Wn.2d 179,201, 849 P.2d 646 (1993), aff'd, 511 U.S. 700, 114 S .Ct. 1900, 128 L. Ed.
3
The PDC concluded that "[ d]uring 2006-June 2008, BIAW did not solicit or receive
contributions to support or oppose candidates or ballot propositions, nor did it contribute to
candidates or political committees or use its general treasury for other campaign-related
expenditures." CP at 57 (emphasis omitted). The PDC further determined that "the solicitation,
receipt, and retention of local association Retro program refunds by BIAW -MSC in the amount
of $584,527.53" for campaign purposes qualified BIAW-MSC as a political committee,
triggering reporting requirements for the noted funds. CP at 59.
4
No. 89462-1
Madsen, C.J. concurring/dissenting
2d 716 (1994)). "In the course of judicial review, due deference will be given to the
specialized knowledge and expertise of the administrative agency." English Bay Enters.,
Ltd. v. Island County, 89 Wash. 2d 16, 21,568 P.2d 783 (1977); Schuh v. Dep't of Ecology,
100 Wash. 2d 180, 187,667 P.2d 64 (1983) (same); see also Cashmere Valley Bank v. Dep't
of Revenue, 181 Wash. 2d 622, 634-37, 334 P.3d 1100 (2014) (agency determination is not
binding on this court, but its adjudicatory action is generally granted some deference;
considerable deference given to interpretation by agency charged with enforcing statute;
we accord deference to an interpretation oflaw in matters involving the agency's special
knowledge and expertise); see also PT Air Watchers v. Dep 't of Ecology, 179 Wash. 2d 919,
925, 319 P.3d 23 (2014) (burden of demonstrating the invalidity of agency action is on
the party asserting invalidity; this court affords deference to agency's interpretation of the
law where agency has specialized expertise in dealing with such issues, but this court is
not bound by an agency's interpretation of statute; board's order should be upheld unless
we find that the board erroneously interpreted or applied the law or the board's order is
not supported by substantial evidence).
Because the AG filed suit against the BIAW subsidiary determined by the PDC
experts to be culpable, the plaintiffs cannot now file a citizen's suit against a different
part of that same organization. Restated, because the AG has not "failed to commence a
[timely] action" against BIAW, via that organization's culpable subsidiary, the plaintiffs'
citizen suit against the BIAW parent association is barred. RCW 42.17A.765(4)(a)(i);
5
No. 89462-1
Madsen, C.J. concurring/ dissenting
see also EFF I, 111 Wash. App. at 608; EFF II, 119 Wash. App. at 453. For this reason
alone, summary judgment to BIA W should be affirmed.
Even if the AG has not acted sufficiently against BIAW to bar suit under RCW
42.17 A.765( 4)(a)(i), we should nevertheless sustain the grant of summary judgment. I
disagree with the majority's view that summary judgment is inappropriate because a fact
question exits regarding whether BIA W qualified as a "political committee" 4 under the
FCPA. Majority at 14. The majority holds that the plaintiffs' evidence, which names
"BIA W" as soliciting pledges from its local associations, raises a question of fact
regarding whether BIA W had an expectation of receiving contributions and making
political expenditures. !d. at 18-21, 24-25. The majority's analysis relies one-mails and
local building associations' meeting minutes indicating that pledges were solicited for
and made to "BIA W." !d. at 19-20.
This is not a case where there has yet to be a weighing of evidence and
determination of witnesses' credibility. Such determination and fact-finding has already
been performed by the PDC, the agency created by and charged with enforcing the
FCPA. See RCW 42.17A.l00 (establishing the PDC), .105 (describing the duties of the
PDC); see also EFF I, 111 Wash. App. 586, 606. The FCPA empowers the PDC to
"investigate ... apparent violations of [the FCPA]" upon complaint or its own motion
and to "[e]nforce [the FCPA] according to the powers granted it by law." RCW
4
The PCP A defines "political committee" as "any person (except a candidate or an individual
dealing with his or her own funds or property) having the expectation of receiving contributions
or making expenditures in support of, or opposition to, any candidate or any ballot proposition."
RCW 42.17 A.005(3 7) (emphasis added).
6
No. 89462-1
Madsen, C.J. concurring/dissenting
42.17 A.1 05(5), (8). Powers granted to the PDC include, but are not limited to, the
authority to "(a) determine whether an actual violation of this chapter has occurred; and
(b) issue and enforce an appropriate order following such a determination." RCW
42.17A.755(1). In lieu of issuing such order, the PDC may refer the matter to the AG.
RCW 42.17A.755(3).
In its report, the PDC noted "Examples of Solicitation by BIAW-MSC," which
included e-mails and minutes from local builders associations. Clerk's Papers at 67
(emphasis added and omitted). The report explained, "The emails demonstrate that these
[local] associations responded to BIA W-MSC solicitation and agreed to donate a portion
oftheir Retro program refund for use in the 2008 Governor's campaign." !d. Excerpts
from the report noted as follows:
Joel White, Executive Officer of the Spokane Home Builders Association:
Mr. White stated in part in his July 2, 2007 e-mail: "Our Board of Directors
authorized BIA W to keep any proceeds from the ROil program over the
$275,000 we budgeted in 2007 to be used for the Governor's race in 2008
"
Bill Quehrn, Building Industry Association ofWhatcom County: Mr.
Quehrn stated in part in his July 11, 2007 e-mail: "The vote was to allow
BIA W to withhold $10,000 for our current check ... The enthusiasm over
another shot at the governor's office by Dino was unanimously welcomed."
!d. (emphasis added and omitted) (alterations in original). The PDC report further noted:
Jeff Danks, Controller for the Master Builders Association of King &
Snohomish Counties (MBA-K&S) confirmed in an e-mail:
"I was present at the board meeting when Mr. Doyle made his
solicitation to the [MBA-K&S]. The [MBA-K&S] was asked to
agree to give back to BIA W any amount for the 2007 ROil refund
7
No. 89462-1
Madsen, C.J. concurring/dissenting
above what was originally expected and that money was to be used
for the 2008 Governor's race."
!d. (emphasis added and omitted). The PDC report also gave an example of a local board
minute entry stating:
The April30, 2007 Minutes of the MBA-K&S Board of Directors meeting
state that BIA W President Daimon Doyle was in attendance and provided
information about the 2007 Legislative Session. The minutes also state:
"Daimon then went on to explain the reason he was in attendance,
which was to ask the Association to donate the excess proceeds of
the ROil return to BIAW's election fund to support a gubernatorial
candidate in 2008. He discussed fundraising for the upcoming
election year 2008, and stated that the senior officers introduced a
resolution asking each of the 15 locals to donate the excess retro
funds beyond what they budgeted to the gubernatorial fund."
!d. (emphasis added and omitted).
As can be seen, the PDC had before it the same type of evidence that the majority
now says creates a fact question: e-mails and meeting minutes identifying "BIA W" as
soliciting funds. But the PDC considered that evidence in context and as fact-finder
weighed the evidence, determined the credibility of witnesses and resolved the fact
question in rendering its decision. 5 The evidence supports the PDC's factual
determinations, and there is no indication that the PDC misapplied any portion of the
5
Although thee-mails and minute entries identified "BIA W," the PDC concluded that the
solicitations were in fact made by BIAW-MSC. See CP at 57, 59, 67, 69, 77. In so deciding, the
PDC conducted "interviews under oath" ofBIA Wand BIAW-MSC personnel, and additionally
considered revenue reports of BIA W and BIA W-MSC and declarations by BIAW and BIAW-
MSC officers, administrators, and staff. CP at 76.
8
No. 89462-1
Madsen, C. J. concurring/dissenting
FCPA. 6 We should defer to the PDC's determination that BIAW does not qualify as a
political committee under the FCP A.
Finally, I disagree with the majority's view that the PDC report does not warrant
our deference under the circumstances of this case. First, the PDC report is properly
before us for consideration. In conducting our de novo review of the trial court's grant of
summary judgment to BIA W, we consider the record that was before the trial court. 7
Fraternal Order of Eagles, Tenino Aerie No. 564 v. Grand Aerie of Fraternal Order of
Eagles, 148 Wash. 2d 224, 253, 59 P.3d 655 (2002). Here, the PDC report was before the
trial court without objection, it was argued by the parties during the summary judgment
proceedings, and it was considered by the trial court in granting the summary judgment
motion. Accordingly, it is proper for us to give due consideration to the PDC report.
Next, the majority says that (1) we should not defer to the PDC report to the extent
that the PDC is applying the FCPA, majority at 24; (2) the PDC's factual determination
of the significance of the reference to "BIAW" in e-mails and other documents does not
6
The plaintiffs assert that the PDC investigation was "flawed" because the PDC "accepted at
face value" BIAW's contention that BIAW-MSC, and not BIAW, controlled and handled the
funds in question and solicited campaign contributions and made expenditures. Pet'rs' Reply to
Pet. for Review and Response to Cross-Pet. for Review at 5. But it is the PDC's role as fact-
finder to weigh the evidence and make determinations as it did here. We defer to such factual
determinations. See Hillis, 131 Wash. 2d at 396.
7
While the plaintiffs asserted to the trial court that the PDC had been duped and that the trial
court was not bound by the "PDC's exercise ofprosecutorial discretion," there is no indication in
the record that plaintiffs otherwise challenged the PDC report or objected to the report's
admission and its consideration by the trial court. CP at 213. Plaintiffs first asserted that the
PDC report was inadmissible in their reply brief to Division One. See Appellants' Reply Br. &
Resp. to Cross-Appeal at 8. That is too late. State v. Chen, 178 Wash. 2d 350, 358, 309 P.3d 410
(2013) (declining to address an argument raised for the first time in a reply brief); Cowiche
Canyon Conservancy v. Bosley, 118 Wash. 2d 801, 809, 828 P.2d 549 (1992) (issues first raised in
reply are too late to warrant consideration).
9
No. 89462-1
Madsen, C.J. concurring/dissenting
warrant deference because this is not a complex or technical inquiry, majority at 24-25;
and (3) the PDC report was not an "agency determination [or action] to which courts
must defer." Majority at 25-26. I disagree.
In my view, we should defer to the PDC report in this circumstance because there
is no indication that the PDC in any way misapplied the FCP A. Nor is this a case in
which the PDC failed to act or acted ultra vires. As noted, the FCP A grants the PDC
authority to determine whether a violation of the FCPA has occurred and gives the PDC
the option of holding a hearing regarding such determination or referring the matter to the
AG. See RCW 42.17A.755(1)-(3). Here, the PDC referred the matter to the AG, who
filed suit against the only entity that the PDC determined to be culpable, the BIAW
subsidiary BIAW-MSC. This did not offend the FCPA and thus warrants our deference.
See Schuh, 100 Wash. 2d at 187 (reversing where trial and appellate court failed to give
appropriate deference to agency expertise).
I also disagree with the majority's view that the PDC's resolution of conflicting
evidence in reaching its determination does not warrant our deference. The majority
oversimplifies the fact inquiry at issue as involving only who is identified by the term
"BIA W" appearing in e-mails and meeting minutes, contending that such inquiry is not
complex or technical and does not involve any particular agency expertise. Majority at
24-25. The point here is that the PDC's determination involved analysis of revenue
reports as well as the consideration of other evidence including declarations and
"interviews under oath" of organization personnel. See note 5, supra. That calculus,
10
No. 89462-1
Madsen, C .J. concurring/dissenting
which involved the assessment of financial materials, credibility determinations, and the
weighing of all such evidence, not only informed the PDC's determination of culpability
as to BIAW-MSC only, but reaching that determination necessarily resolved the question
of fact that the majority says is raised here by the reference to "BIA W" in the noted
documents. Under these circumstances, we should defer to the PDC's factual
determination. See Hillis, 131 Wash. 2d at 396 Gudicial deference to agency views is
appropriate when an agency determination is based heavily on factual matters close to the
heart of the agency's expertise).
I also disagree with the majority's view that we can disregard the PDC report
because it does riot qualify as an "agency action." Majority at 26. As discussed above,
the PDC may determine violations of the FCPA, and has the option ofholding a hearing
or referring the matter to the AG. See RCW 42.17 A.755(1)-(3). The PDC pursued the
latter option, and the AG filed suit against BIAW-MSC, all in compliance with the
FCPA. Under the circumstances of this case, we should defer to the PDC report.
In sum, as discussed, the findings and determinations contained in the PDC report
required the PDC to weigh the evidence presented and draw upon its expertise in
reaching its conclusions. In doing so, the PDC determined that BIA W was not a political
committee, but BIAW's nonprofit subsidiary, BIA W-MSC, had engaged in conduct that
ran afoul of the f'CP A warranting referral to the AG for further action. The trial court
considered the PDC report and apparently deferred to it in granting BIA W's motion for
11
No. 89462-1
Madsen, C.J. concurring/dissenting
summary judgment. Such deference under the circumstances of this case was proper and
should be echoed by this court as well. See Hillis, 131 Wash. 2d at 396.
Conclusion
The events in question that prompted the citizen inquiry in this case occurred the
better part of a decade and two election cycles ago. One plaintiff is now deceased. The
concern that prompted the citizen letter that started this process and the gravamen of the
citizen complaint has been addressed. The citizen letter to the AG was answered by a
thorough PDC investigation that otherwise exonerated BIAW, but found grounds for
further action against BIAW-MSC, which the AG pursued and which BIAW-MSC
settled. 8 While a citizen suit in this case against the BIA W nonprofit association is not
procedurally barred by the AG's action of forwarding the citizen inquiry to the PDC for
consideration, the AG's subsequent filing of a lawsuit against BIAW's for-profit
subsidiary renders an additional citizen suit against BIAW under RCW 42.17 A. 765(4)
unavailable under the facts of this case. Additionally, the PDC determination of the
factual question ofBIAW's culpability in my view renders further citizen action to
address that issue improper.
It is time for the parties to move on. In this case, the system (i.e. the statutory
scheme of the FCPA as interpreted and employed by the PDC and AG) has worked as
8
As part of that settlement, BIAW -MSC, the for-profit subsidiary of BIAW, agreed to register as
a political committee and file all campaign finance disclosure reports to the PDC concerning
campaign contributions it received in 2007; it agreed to pay hundreds of thousands of dollars in
fines, and it agreed to pay hundreds of thousands of dollars more without court intervention in
the event of any FCP A violation through 2016.
12
No. 89462-1
Madsen, C. J. concurring/dissenting
intended. Concerned citizens notified the proper authorities about questionable election
activity. The agency with expertise in this area investigated, determined culpability, and
recommended litigation action to the AG, which the AG pursued, resulting in settlement
and correction of the actions that prompted the citizen letter in the first place. In my
view, further litigation in this matter is not warranted. Judicial economy compels that we
affirm the trial court's grant of summary judgment.
13
No. 89462-1
Madsen, C.J. concurring/dissenting
I
14