Seattle 420 Llc, V. Washington State Liquor And Cannabis Board
80904-1
| Wash. Ct. App. | Jul 12, 2021Background
- In July 2018 WSLCB officers assisted by a 20‑year‑old investigative aide (IA) conducted a controlled purchase at Seattle 420 (Bellevue Marijuana); the IA successfully bought marijuana while underage.
- WSLCB issued an Administrative Violation Notice (AVN) for sale to a minor and allowing a minor in a restricted area; it was Seattle 420’s third minor‑related violation in two years and led to license cancellation under former WAC 314‑55‑520.
- Seattle 420 challenged the AVN administratively (ALJ denied relief), the WSLCB affirmed (waiving monetary penalty but cancelling the license), and the superior court affirmed the final order.
- On appeal Seattle 420 argued (1) WSLCB lacked authority to run a controlled purchase program without rule making (statutory and APA arguments) and (2) ESSB 5318 (2019) should apply retroactively to avoid cancellation.
- The Court of Appeals held WSLCB had statutory and implied authority to conduct controlled purchases without prior rule making and that ESSB 5318 is not retroactive; it affirmed the agency order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RCW 69.50.560 requires WSLCB to adopt rules before conducting controlled purchases | The statute’s reference to rules in subsection (2) applies to subsection (1), so rule making is required before controlled purchases | The statute expressly authorizes controlled purchase programs in (1); the rule reference in (2) limits exemptions from criminal liability and does not bar (1) | RCW 69.50.560(1) plainly authorizes controlled purchases; subsection (2) does not impose a rulemaking prerequisite for (1) |
| Whether the APA independently requires WSLCB to engage in rule making before operating the program | The enforcement program is punitive in effect and thus constitutes a “rule” requiring formal rule making under the APA | The program is an enforcement mechanism to determine statutory violations; penalties flow from existing statutes and rules, so AP A rulemaking is not required to run compliance checks | The APA does not require rulemaking here; the controlled purchase program is enforcement, not a new rule altering substantive rights |
| Whether failure to promulgate rules invalidates the AVN/license cancellation | Without rule‑adopted procedures, compliance checks (and resulting AVNs) are invalid and license must be reinstated | The sale to a minor occurred; absence of rulemaking does not undo the underlying statutory violation or the AVN based on that violation | The absence of agency rulemaking did not invalidate the AVN or cancellation; Seattle 420 failed to show an unlawful procedure or reversible error |
| Whether ESSB 5318 (2019) applies retroactively to alter penalties and avoid cancellation | ESSB 5318 was intended to soften penalties and should be applied retroactively to eliminate cancellation | Statutory amendments are presumptively prospective; ESSB 5318 effects substantive change and is not curative or remedial; it does not expressly provide retroactivity | The bill is not remedial or expressly retroactive; it does not apply retroactively and does not alter the result in this case |
Key Cases Cited
- Top Cat Enter., LLC v. City of Arlington, 11 Wn. App.2d 754, 455 P.3d 225 (2020) (appellate standard: court applies APA standards to agency record)
- Verizon Nw., Inc. v. Wash. Emp’t Sec. Dep’t, 164 Wn.2d 909, 194 P.3d 255 (2008) (when agency decision was on summary judgment, appellate review overlays APA with summary judgment standard)
- Brown v. Vail, 169 Wn.2d 318, 237 P.3d 263 (2010) (agencies possess powers expressly granted and those necessarily implied to effectuate statutory duties)
- Turek v. Dep’t of Licensing, 123 Wn.2d 120, 864 P.2d 1382 (1994) (implied authority doctrine: agencies may adopt means necessary to accomplish legislative directives)
- Dep’t of Ecology v. Campbell & Gwynn, LLC, 146 Wn.2d 1, 43 P.3d 4 (2002) (statutory interpretation requires giving plain meaning to unambiguous text)