King Fuji Ranch, Inc. v. Wash. State Office of the Attorney Gen.

• Citation: 21 Wash.App.2d 520,512 P.3d 904
• Decision Date: 07 December 2021
• Docket Number: 37662-1-III,C/w No. 37689-3-III
• Parties: In the MATTER OF CONFIDENTIAL CONSUMER PROTECTION INVESTIGATION. King Fuji Ranch, Inc., King Fuji Ranch, MT Taggares, Inc. dba Arete Vineyards, Bench One, Inc., King Organics, Inc., Appellants, v. Washington State Office of the Attorney General, Respondent.
• Court: Court of Appeals of Washington

21 Wash.App.2d 520

512 P.3d 904

In the MATTER OF CONFIDENTIAL CONSUMER PROTECTION INVESTIGATION.King Fuji Ranch, Inc., King Fuji Ranch, MT Taggares, Inc. dba Arete Vineyards, Bench One, Inc., King Organics, Inc., Appellants,

v.Washington State Office of the Attorney General, Respondent.

No. 37662-1-III

C/w No. 37689-3-III

Court of Appeals of Washington, Division 3.

FILED DECEMBER 7, 2021

Ordered Published Date MAY 12, 2022

Gary Edward Lofland, Gary Lofland, Sean McKenna Worley, Meyer, Fluegge & Tenney, P.S., 230 S 2nd St., Ste. 101, Yakima, WA, 98901-2865, for Appellant.

Patricio Antonio Marquez, John Matthew Geyman, Office of the Attorney General of Washington, 800 Fifth Ave., Ste. 2000, Seattle, WA, 98104-3188, for Respondent.

Siddoway, J. ¶ 1 After King Fuji Ranch, Inc. and related entities (King Fuji) were served with a civil investigative demand by the Washington State Attorney General's Office (AGO), King Fuji petitioned the Grant County Superior Court to vacate the demand.¹ It was unsuccessful and now appeals trial court orders denying its request to vacate the demand and granting the AGO's motion to enforce it.

¶ 2 The subject matter of the AGO's investigation falls within the scope of activity prohibited by the Consumer Protection Act, chapter 19.86 RCW (CPA), which the AGO is authorized to enforce. Conduct by King Fuji that may have violated the federal Immigration and Nationality Act (INA)² might be evidence that helps demonstrate a CPA violation, but contrary to King Fuji's arguments, that alone does not give rise to federal preemption. For that reason, and because the civil investigative demand was not an unreasonable search and did not invade King Fuji's private affairs without authority of law as alleged by King Fuji, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶ 3 King Fuji is an agricultural business that grows apples and wine grapes. It recruits some of its workers from other countries using the H-2A visa process provided by federal law. Eligibility for the visas requires demonstrating that the job openings cannot be filled with United States (U.S.) workers. As part of making that demonstration, King Fuji is required by federal law to submit a job order for approval by the state workforce agency designated by the state—in Washington, the Employment Security Department (ESD). The job order must identify the positions available and their hours, pay, and qualifications. Once the ESD approves a job order submitted by King Fuji, it begins recruiting U.S. workers and refers each U.S. worker who applies for the job opportunity. 20 C.F.R. § 655.121(c), (d).

¶ 4 In 2019, the AGO received information that King Fuji might have provided misleading information in the process of hiring H-2A workers the year before. It learned that the president of King Fuji had submitted a job order to the ESD in May 2018 for 101 farmworker/laborer positions stating, as job requirements, that previous work experience was preferred and specifying "[t]hree (3) months tree fruit experience." Clerk's Papers (CP(A)) at 402, 404.³ It learned that on the same day, King Fuji's operations manager had e-mailed CSI Visa Processing, S.C., a farm labor contractor in Mexico, about its need to hire 101 workers for the season, but had provided different job requirement information. In his e-mail to CSI, the operations manager explained that King Fuji's only recruiting criteria for this "next group of guys," based on its experience with workers in prior seasons, was

• Age – 35 and under

• Married

• Experience – Must be new to H2A program

• Desired States/Regions:

• 1/3 of group from State of Jalisco

• 1/3 of group from State of Nayarit

• 1/3 of group from South regions of Mexico (Oaxoca/Veracruz)

CP(A) at 411 (boldface omitted). King Fuji eventually received federal certification that there were not sufficient U.S. workers available for the 101 positions it had available in 2018 and that its employment of H-2A workers would not adversely affect the wages and working conditions of U.S. workers.

¶ 5 The foregoing information led the AGO to serve a civil investigative demand on King Fuji on September 23, 2019. A civil investigative demand, or CID, is an investigative tool authorized by the CPA. The CID stated,

The Demand is made pursuant to RCW 19.86.110. The Attorney General believes you have knowledge relevant to the subject matter of an investigation now in progress. Said investigation involves possible past or current violations of RCW 19.86.020 (unfair or deceptive acts or practices in the conduct of any trade or commerce), including but not limited to representations or omissions to obtain certification that there are insufficient U.S. workers for particular crop production and harvest in the area and permission to hire foreign guest workers.

CP(A) at 207. The CID included 16 interrogatories and 15 requests for production and required a response within 30 days. It was accompanied by orders the Attorney General had obtained several days earlier, ex parte, in a Thurston County Superior Court action entitled In re Confidential Consumer Protection Investigation , 2021 WL 5813794. The orders prohibited King Fuji from disclosing the existence or contents of the CID to anyone but its counsel, retained jurisdiction over subsequent proceedings, and sealed the case file.

¶ 6 King Fuji responded by filing an action in Grant County Superior Court prior to the CID's return date. It requested a declaratory judgment that the AGO lacked authority for its investigation since the regulation of immigration is exclusively vested in the federal government. It sought an extension of the return date for the CID until the AGO's authority to issue it could be resolved. On the same day, King Fuji filed a motion in the Thurston County action seeking an order changing venue of that action to Grant County.

¶ 7 Both parties filed motions in the Thurston County action thereafter, and in midDecember 2019, the Thurston County Superior Court entered an order transferring the case to Grant County. It provided that its earlier orders prohibiting disclosure and sealing the file "shall remain in force and effect for 45 days or until further order of Grant County Superior Court or this court." CP(A) at 332. The Grant County court later denied the AG's motion to maintain and enforce the nondisclosure order and order sealing the file.

¶ 8 In February 2020, the AGO filed a petition in the transferred action for enforcement of its CID. King Fuji responded by filing a motion to vacate the CID in the action it had commenced. King Fuji argued that the INA "permits employers to hire temporary non-immigrant agricultural workers (H-2A workers) and provides the exclusive process by which the services of these workers may be obtained and utilized." CP(S) at 75 (footnote omitted). Accordingly, it argued, state law was preempted. It also argued that the CID was an unlawful search and invasion of its private affairs under the federal and Washington Constitutions.

¶ 9 In responding to the motion to vacate the CID, the AGO denied King Fuji's allegations that the " ‘real focus’ " of its investigation was " ‘alleged false statements to the federal government in the H-2A application’ " and that its investigation was a " ‘disguised attempt to bring a lawsuit to claim that fraud was perpetrated on the federal government.’ " CP(S) at 102, 113 (quoting King Fuji's motion to vacate). Rather, the AGO argued, "the CID is focused on investigating King Fuji's possible false and misleading statements and omissions to U.S. workers , not the federal government." CP(S) at 102. It explained, "The CID only seeks information about King Fuji's communications and representations to [the U.S. Department of Labor] so the State may compare the representations made to U.S. workers and determine whether those representations were false or omitted material information about the job opportunities." Id.

¶ 10 The AGO argued that its CID met a three-part test for reasonableness under the United States Constitution's Fourth Amendment, which the Washington Supreme Court applied to CIDs in Steele v. State , 85 Wash.2d 585, 594, 537 P.2d 782 (1975) : its inquiry was within the AGO's authority, the demand was not too indefinite, and the information sought was reasonably relevant. On the issue of its authority, the AGO argued that actions of an employer that have the capacity to deceive the general labor pool, such as misleading job postings, violate the CPA.

¶ 11 In King Fuji's reply in support of its motion to vacate, it led by insisting that the superior court must "determine the purpose of the AG's investigation." CP(S) at 118. It argued that "[a]lthough the AG shifts the focus, the stated purpose remain[s] constant," emphasizing the language of the CID that the violations of RCW 19.86.020 under investigation include representations or omissions "to obtain certification that there are insufficient U.S. workers for particular crop production and harvest in the area and permission to hire foreign guest workers." CP(S) at 118 (boldface omitted).

¶ 12 After hearing argument of the cross motions, the trial court denied the motion to vacate and granted the State's motion to enforce the CID. Its order enforcing the CID required the AGO and King Fuji to meet and confer in good faith on the scope of documents and information to be produced by King Fuji and provided that if agreement could not be reached, the court would resolve whatever issues remained. King Fuji appeals both orders.

ANALYSIS

¶ 13 Among conduct that the CPA declares unlawful are "unfair or deceptive acts or practices in the conduct of any trade or commerce." RCW 19.86.020. "Trade" and "commerce" are defined by the act to include "any commerce directly or indirectly affecting the people of the state of Washington." RCW 19.86.010(2). The act includes a mandate that it be liberally construed to serve its beneficial purposes. RCW 19.86.920. The AGO "may bring an action in the name of the...