Seattle 420, LLC v. Wash. State Liquor & Cannabis Bd.
| Decision Date | 12 July 2021 |
| Docket Number | No. 80904-1-I,80904-1-I |
| Parties | SEATTLE 420, LLC, dba BELLEVUE MARIJUANA, a Washington limited liability company, Appellant, v. WASHINGTON STATE LIQUOR AND CANNABIS BOARD, a governmental agency of the State of Washington, Respondent. |
| Court | Washington Court of Appeals |
UNPUBLISHED OPINION
HAZELRIGG, J. — The Washington State Liquor and Cannabis Board (WSLCB) revoked the retail cannabis license of Seattle 420, LLC in July 2018 after issuing a violation to the store as the result of a controlled purchase; its third violation involving minors in a two year period. The retailer sought multiple administrative appeals, contending that the WSLCB lacked authority to engage in its controlled purchase program because it did not engage in rule making surrounding the program. After the superior court affirmed the WSLCB, this court granted review. Seattle 420 renewed its argument first made in the superior court proceedings that Engrossed Substitute Senate Bill (ESSB) 53181 is retroactive and would provide less severe penalties such that Seattle 420's license would not havebeen cancelled after the third violation. ESSB 5318 is not retroactive and the superior court did not err in upholding the determination of the WSLCB. For these reasons, we affirm.
FACTS
In July 2018, two enforcement officers from the Washington State Liquor and Cannabis Board (WSLCB) conducted a compliance check at Seattle 420, LLC's retail marijuana store, which it operated as Bellevue Marijuana. The compliance officers were assisted by a 20-year-old investigative aide (IA). The IA was able to enter the store and successfully purchase marijuana once inside, despite being underage. An enforcement officer issued an Administrative Violation Notice (AVN) for selling marijuana to a minor and allowing a minor to frequent a restricted area in violation of WAC 314-55-079 and RCW 69.50.357. This was Seattle 420's third violation involving minors in two years, which led to the cancellation of its license based on former WAC 314-55-520 (2015).
During the administrative review of the AVN, both parties filed cross-motions for summary judgment. Seattle 420's summary judgment motion argued the controlled purchase was illegal because the controlled purchase program lacked proper authority, was based on a misinterpretation or misapplication of the law, and based on an unlawful procedure because the WSLCB had failed to engage in rule making which it asserted was required under RCW 69.50.560(2). It further argued that the actions of the WSLCB as to the IA controlled purchase program were arbitrary and capricious. The administrative law judge (ALJ) denied Seattle 420's motion and granted WSLCB's motion, affirming both the AVN andaccompanying penalties. Seattle 420 filed a petition for review to the WSLCB. On March 5, 2019, the WSLCB affirmed the initial order, waived the monetary penalty, and ordered the cancellation of Seattle 420's license effective April 11, 2019.
Seattle 420 filed a petition for judicial review in King County Superior Court and moved to stay the license cancellation pending review. The motion to stay was denied. Seattle 420 sought an emergency stay and discretionary review from this court. The emergency stay was denied and Seattle 420 stipulated to withdrawal of the request for discretionary review as moot.
In the superior court, Seattle 420 brought a new argument that Engrossed Substitute Senate Bill (ESSB) 5318 should be applied retroactively to eliminate cancellation as the penalty for a third violation based on the sale of marijuana to a minor. ESSB 5318 went into effect on July 28, 2019 and was intended to "[r]evise the [U]niform [C]ontrolled [S]ubstances [A]ct2 with regard to compliance and enforcement provisions for marijuana licensees."3 This argument was rejected, along with the other arguments Seattle 420 raised before the superior court which mirrored those it presented at the various stages of review below. The court acknowledged that ESSB 5318 directed WSLCB to create new penalties, but noted that because that process was not yet complete at the time of the hearing, it had "no authority to retroactively apply 'new rules' that ha[d] not yet been adopted." The superior court affirmed the final order of the WSLCB and Seattle 420 now appeals to this court.
ANALYSIS
On appeal, Seattle 420 argues that it was error for WSLCB to revoke its license because the WSLCB lacked authority to engage in a controlled purchase program since it had not gone through rule making.4 As an initial matter, it is important to hone in on Seattle 420's challenge as it fails to identify any manner by which the absence of rule making would invalidate the results of the WSLCB's compliance actions. It does not dispute that the sale of marijuana to a minor occurred. Seattle 420 simply makes the wholesale assertion that, without rule making, the compliance checks are improper and, as a result, the AVNs it accrued relating to minors are invalid and its license should be reinstated. This is not correct.
The Washington Administrative Procedure Act (APA)5 governs our review of the WSLCB's final order. RCW 34.05.570; Top Cat Enter., LLC v. City of Arlington, 11 Wn. App.2d 754, 759, 455 P.3d 225 (2020). "This court sits in the same position as the superior court, applying the standards of the APA directly to the record before the agency." Topcat, 11 Wn. App. 2d at 759. The burden of establishing the invalidity of the agency's action is on the party who is asserting such a claim. RCW 34.05.570(1)(a). We will only overturn an agency's legal determination if the agency engaged in an unlawful procedure or decision-makingprocess, failed to follow a prescribed procedure, or erroneously interpreted or applied the law. RCW 34.05.570(3). Here, Seattle 420 challenges the ALJ's grant of WSLCB's motion for summary judgment after Seattle 420 appealed the violation that resulted in cancellation of its license. "[W]here the original administrative decision was on summary judgment, the reviewing court must overlay the APA standard of review with the summary judgment standard." Verizon Nw., Inc. v. Wash. Emp't Sec. Dep't, 164 Wn.2d 909, 916, 194 P.3d 255 (2008). "Accordingly, we view the facts in the record in the light most favorable to the nonmoving party." Id. "Summary judgment is appropriate only where the undisputed facts entitle the moving party to judgment as a matter of law." Id.
Here, the parties do not dispute the underlying facts of this case. There is only a purely legal question as to whether rule making was required in order for the agency to engage in a controlled purchase program under RCW 69.50.560.
We first consider whether RCW 69.50.560 contains a requirement for rule making. Our court reviews the interpretation of a statute de novo. Robinson v. Am. Legion Dep't of Wash., Inc., 11 Wn. App. 2d 274, 288, 452 P.3d 1254 (2019). "The primary goal of statutory construction is to carry out legislative intent." Cockle v. Dep't of Labor & Indus., 142 Wn.2d. 801, 807, 16 P.3d 583 (2001). The best evidence of the legislature's intent is the language in the statute. In re Marriage of Schneider, 173 Wn.2d 353, 363, 268 P.3d 215 (2011). When "the statute's meaning is plain on its face, then the court must give effect to the plain meaningas an expression of legislative intent." Dep't of Ecology v. Campbell & Gwynn, LLC, 146 Wn.2d 1, 9-10, 43 P.3d 4 (2002). The plain meaning of a statute is to be discerned from the ordinary meaning of the language under scrutiny, in addition to the context of the statute in which the language is found, related provisions, and the statutory scheme as a whole. Jongeward v. BNSF Ry. Co., 174 Wn.2d 586, 594, 278 P.3d 157 (2012). "It is of course the rule that the courts are obliged to interpret a statute, if possible, so that no portion of it is superfluous, void, or insignificant." Snow's Mobile Homes, Inc. v. Morgan, 80 Wn.2d 283, 288, 494 P.2d 216 (1972).
If there are multiple reasonable interpretations of a statute's plain meaning, it is ambiguous. Nelson v. Dep't of Labor & Indus., 198 Wn. App. 101, 110, 392 P.3d 1138 (2017). In instances of ambiguity as to a statute's meaning, then the court relies on principles of statutory construction, legislative history, and relevant case law to decipher the legislative intent. Cockle, 142 Wn.2d at 808.
RCW 69.50.560 provides in relevant part:
The statute expressly delegates authority to the WSLCB to engage in a controlled purchase program. Seattle 420's argument is that the reference to rule making in subsection (2) applies to the entirety of the statute. The relevant portion of RCW 69.50.560(2) reads:
(Emphasis added). The WSLCB argues that the statutory...
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