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

• Court: United States State Supreme Court of Washington
• Citation: 182 Wash.2d 398,341 P.3d 953
• Decision Date: 22 January 2015
• Docket Number: No. 89462–1.,89462–1.
• Parties: Robert F. UTTER and Faith Ireland, in the name of the State of Washington, Petitioners, v. BUILDING INDUSTRY ASSOCIATION OF WASHINGTON, Respondent.

182 Wash.2d 398
341 P.3d 953

Robert F. UTTER and Faith Ireland, in the name of the State of Washington, Petitioners,
v.
BUILDING INDUSTRY ASSOCIATION OF WASHINGTON, Respondent.

No. 89462–1.

Supreme Court of Washington,
En Banc.

Jan. 22, 2015.

Reversed and remanded.

Madsen, C.J., concurred in part, dissented in part, and filed opinion.

[341 P.3d 955]

Eric D. ‘Knoll’ Lowney Marc Zemel Smith & Lowney PLLC Michael E. Withey Law Offices of Michael Withey Seattle, WA, for Petitioner.

Harry J.F. Korrell III, Robert J. Maguire, Davis Wright Tremaine LLP, Seattle, WA, for Respondent.

James D. Oswald, Schwerin Campbell Barnard Iglitzin & Lav, Seattle, WA, for Amicus Curiae on behalf of Washington COAlition for Open Government.

Katherine George, Harrison–Benis, LLP, Seattle, WA, Amicus Curiae on behalf of Washington COAlition for Open Government, Roger Leed, League of Women Voters of Washington.

Howard Mark Goodfriend, Smith Goodfriend PS, Seattle, WA, Scott L. Nelson, Public Citizen Litigation Group, Washington, DC, for Amicus Curiae on behalf of Public Citizens, Inc.

William R. Maurer, Institute for Justice/WA State Chapter, Bellevue, WA, for Amicus Curiae on behalf of Karen Sampson, Institute for Justice.

Dmitri L. Iglitzin, Schwerin Campbell Barnard Iglitzin & Lav, Seattle, WA, for Amicus Curiae on behalf of Washington State Labor Council, Seiu Healthcare 775nw, Ufcw 21, Washington Education Association, Seiu Healthcare 1199nw, Seiu Local 925.

James D. Oswald, Schwerin Campbell Barnard Iglitzin & Lav, Seattle, WA, for Amicus Curiae on behalf of Seiu Healthcare 775nw, Ufcw 21, Washington Education Association, Seiu Healthcare 1199nw, Seiu Local 925.

GORDON McCLOUD, J.

¶ 1 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 42.17A 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 of law, but it denied BIAW's 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. Id. at 674–77, 310 P.3d 829.

¶ 2 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 petitioned on the attorney fees claim, but we denied review. Id. We reverse the Court of Appeals and hold that (1) the plaintiffs' suit was not procedurally barred under our State's citizen

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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

¶ 3 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 of BIAW–MSC. BIAW and BIAW–MSC also share the same staff; they are paid by one organization or the other depending on the nature of their work.

¶ 4 BIAW 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 of BIAW–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” (ROII).

¶ 5 It is undisputed that in 2007, the ROII 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 ChangePAC, a political action committee.

¶ 6 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 FCPA by failing to register as a political committee and failing to report contributions and expenditures. The AG referred the complaint to the Public 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.

¶ 7 The plaintiffs then sued BIAW under the citizen suit provision of the FCPA, 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 42.17A.765(4)(a)(i). Plaintiffs alleged that BIAW violated the FCPA 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.

¶ 8 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 Wash.App. 646, 310 P.3d 829. 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. Id. at 656, 310 P.3d 829. 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.” Id. at 670–74, 310 P.3d 829. It also affirmed the trial

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court's denial of BIAW's request for attorney fees. Id. at 674–77, 310 P.3d 829.

¶ 9 Plaintiffs petitioned this court for review, and we granted it. 179 Wash.2d 1021, 336 P.3d 1165. We denied BIAW's cross petition on the attorney fees issue. Id. 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

¶ 10 This case requires us to interpret several provisions of the FCPA. 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 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 42.17A.001.

¶ 11 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. Id. 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

¶ 12 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 42.17A.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, 310 P.3d 829 (quoting RCW 42.17A.765(4)(a)(i)). Thus, according to the Court of Appeals, where the AG refers for investigation or investigates a complaint, the notice-giving citizen may not sue even if the AG declines to sue. Id.

¶ 13 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...