Events v. State
| Decision Date | 28 June 2022 |
| Docket Number | 55475-5-II |
| Parties | SEATTLE EVENTS, a Washington Nonprofit Corporation, MULTIVERSE HOLDINGS, LLC, a Washington Limited Liability Company, and UNIVERSAL HOLDINGS, LLC, a Washington Limited Liability Company, Appellants, v. STATE OF WASHINGTON, The WASHINGTON STATE LIQUOR AND CANNABIS BOARD (WSLCB), an agency of the State of Washington, and the members of the WSLCB, JANE RUSHFORD, OLLIE GARRET, RUSS HAUGE, in their official capacities only, and RICK GARZA, Director of the WSLCB, in his official capacity, only, Respondents. |
| Court | Court of Appeals of Washington |
SEATTLE EVENTS, a Washington Nonprofit Corporation, MULTIVERSE HOLDINGS, LLC, a Washington Limited Liability Company, and UNIVERSAL HOLDINGS, LLC, a Washington Limited Liability Company, Appellants,
v.
STATE OF WASHINGTON, The WASHINGTON STATE LIQUOR AND CANNABIS BOARD (WSLCB), an agency of the State of Washington, and the members of the WSLCB, JANE RUSHFORD, OLLIE GARRET, RUSS HAUGE, in their official capacities only, and RICK GARZA, Director of the WSLCB, in his official capacity, only, Respondents.
No. 55475-5-II
Court of Appeals of Washington, Division 2
June 28, 2022
LEE, J.
Seattle Events, Multiverse Holdings, LLC, and Universal Holdings, LLC (collectively Seattle Events) unsuccessfully challenged statutory and regulatory restrictions on marijuana advertising. Seattle Events appeals the superior court's order finding that the challenged marijuana advertising restrictions do not violate the Washington or United States Constitution, granting summary judgment dismissal of all claims against the State, denying Seattle Events' cross-motion for summary judgment, and denying Seattle Events' motion for reconsideration of its summary judgment order. Seattle Events argues that the superior court erred by failing to apply a more protective analysis under the Washington Constitution, by failing to apply strict scrutiny,
and by finding that the challenged restrictions satisfy the traditional Central Hudson[1] test for commercial speech.
We hold that the superior court did not err by not applying a more protective analysis under the Washington Constitution, by not applying strict scrutiny, or by finding that the challenged restrictions satisfy the traditional Central Hudson test for commercial speech. Therefore, we affirm both the superior court's order granting the State's summary judgment motion for dismissal of all claims against the State and denying Seattle Events' cross-motion for summary judgment and the superior court's order denying Seattle Events' motion for reconsideration.
FACTS
A. BACKGROUND-STATUTORY SCHEME FOR MARIJUANA ADVERTISING
In 2012, Washington voters passed Initiative 502, which allows licensed retailers to sell marijuana to consumers. Initiative 502, LAWS OF 2013, ch. 3. Initiative 502 required the Liquor and Cannabis Board (Board) to create "reasonable time, place, and manner restrictions and requirements regarding advertising of marijuana, useable marijuana, and marijuana-infused products." LAWS OF 2013, ch. 3, § 10(9). The initiative stated that these restrictions should be designed to "[m]inimiz[e] exposure of people under twenty-one years of age to [marijuana] advertising." LAWS OF 2013, ch. 3, § 10(9)(b).
The legislature enacted restrictions on marijuana advertising in 2013 and amended those restrictions in 2017. See former RCW 69.50.369 (2017).[2] As relevant here, these amended restrictions include a ban on marijuana advertising within 1,000 feet of schools, playgrounds, recreation centers, child care centers, parks, libraries, and game arcades, unless that location is restricted to people aged 21 or older. Former RCW 69.50.369(1).[3] Further, outdoor signs are prohibited in arenas, stadiums, shopping malls, fairs that receive state allocations, farmers markets, and video game arcades, unless that location is restricted to adults. Former RCW 69.50.369(7)(b)(i).[4]
However, licensed retail stores can use billboards or outdoor signs that state the business name, nature of the business, and directions to the business. Former RCW 69.50.369(7)(c).[5] And the restrictions on outdoor advertising do not apply to brand name advertisements at facilities that are being used for adult-only events or to in-store advertisements, as long as those advertisements are not in a window facing outward. Former RCW 69.50.369(7)(e).[6]
When enacting the 2017 amendments, the legislature made the following findings:
The legislature finds that protecting the state's children, youth, and young adults under the legal age to purchase and consume marijuana, by establishing limited restrictions on the advertising of marijuana and marijuana products, is necessary to assist the state's efforts to discourage and prevent underage consumption and the potential risks associated with underage consumption. The legislature finds that these restrictions assist the state in maintaining a strong and effective regulatory and enforcement system as specified by the federal government. The legislature finds this act leaves ample opportunities for licensed marijuana businesses to
market their products to those who are of legal age to purchase them, without infringing on the free speech rights of business owners. Finally, the legislature finds that the state has a substantial and compelling interest in enacting this act aimed at protecting Washington's children, youth, and young adults.
LAWS OF 2017, ch. 317, § 12.
The Board issued parallel regulations providing that marijuana advertisements cannot be placed within 1,000 feet of school grounds, playgrounds, recreation centers, child care centers, parks, libraries, or game arcades unless the location is restricted to persons aged twenty-one or older, or if a physical marijuana store exists within that 1,000 feet buffer. WAC 314-55-155(1)(b)(i).[7] In addition, the regulations provide that marijuana businesses can display two permanent outdoor signs at their store, as long as the signs are each 1,600 square inches or less and only state the name, nature, and location of the business. WAC 314-55-155(2)(a)(i).[8] The
regulations also allow marijuana advertising signage at adult-only events, as long as those signs are not visible outside the event and only state the brand's name. WAC 314-55-155(2)(d).[9]
B. EVENTS LEADING UP TO SEATTLE HEMPFEST 2019
Seattle Events, individually, is a nonprofit organization and does business as Seattle Hempfest. Multiverse Holdings, LLC, and Universal Holdings, LLC, are licensed marijuana retailers.
Seattle Hempfest's annual production cost is paid in part by donations and contributions. Other parts of the production cost are paid by vendors who rent space at the event and advertise their businesses, subject to compliance with state and city regulations.
In April 2019, the Board issued Bulletin 19-01 (later withdrawn and superseded), which stated that marijuana businesses could not advertise in certain locations. This bulletin cited RCW 69.50.369 and WAC 314-55-155, and stated that marijuana licensees "cannot have any sign or advertisement at any event, if the event is located at or within 1,000 feet of one of the listed
restricted areas." Clerk's Papers (CP) at 44. The bulletin also noted that there was an exception under former RCW 69.50.369(7)(e)(ii) that allows outdoor advertisements at adult-only facilities.
Multiverse and Universal both wanted to support Seattle Hempfest 2019 as contributors and have booths at the event. But due to Bulletin 19-01, Multiverse and Universal were unsure whether their booth could bear their business names, logos, or address without violating former RCW 69.50.369 or WAC 314.55.155. Other sponsors and participants expressed similar concerns and chose to not participate in Seattle Hempfest 2019. Ultimately, Multiverse and Universal participated in Seattle Hempfest 2019.
C. PROCEDURAL HISTORY
Seattle Events sued the State, the Board, and several Board members when Bulletin 19-01 was still in effect. An amended complaint filed on June 10, 2019 challenged the portion of former RCW 69.50.369 that created restrictions on "'any sign or other advertisement,'" especially as applied by the Board to political speech. CP at 10. Seattle Events sought a preliminary injunction against the Board's enforcement of Bulletin 19-01 at Hempfest.
After the suit was filed, the Board issued Bulletin 19-03, which superseded Bulletin 19-01, in June 2019.[10] Bulletin 19-03 clarified that non-commercial speech was exempt from the advertising restrictions. The parties stipulated that Bulletin 19-03 resolved issues raised in Seattle Events' motion for preliminary injunction.
Seattle Events filed a second amended complaint in January 2020. This second amended complaint no longer challenged the Board's bulletins and instead squarely challenged former RCW
69.50.369(1) and (7)(b) and (e), along with WAC 314-55-155(1)(a)(iii), (1)(b)(i), (2)(a)(i), and (2)(d). The second amended complaint sought injunctive relief under the First Amendment to the United States Constitution and article I, sections 1, 4, and 5 of the Washington Constitution.
The parties filed cross-motions for summary judgment. Both parties argued that the Central Hudson test for commercial speech under the First Amendment applied. The superior court granted summary judgment in favor of the State "for the reasons articulated by the [State], with the sole exception being that the Court finds that the regulations at issue are of a 'lawful activity.'" CP at 575. Seattle Events filed a motion for reconsideration, which the superior court denied.
Seattle Events sought direct review from our Supreme Court.[11] Our Supreme Court transferred the case to this court.[12]
ANALYSIS
A. STANDARD OF REVIEW
We review a superior court's order granting summary judgment de novo and engage in the same inquiry as the trial court. Crisostomo Vargas v. Inland Washington, LLC, 194 Wn.2d 720, 728, 452 P.3d 1205 (2019). Summary judgment is proper if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Meyers v. Ferndale Sch. Dist., 197 Wn.2d 281, 287, 481 P.3d 1084 (2021). A material fact is one upon which the outcome of the litigation depends. Keck v. Collins, 184 Wn.2d 358, 370 n.8, 357 P.3d 1080 (2015).
Here, there are no genuine issues of material fact and the State is entitled to judgment as a matter of law.
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