State v. Grocery Mfrs. Ass'n, 461 P.3d 334

Background

The Grocery Manufacturers Association (GMA) created a segregated "Defense of Brands" (DOB) account in 2013, solicited optional member contributions (over $14M), and transferred $11M to the "No on 522" committee opposing Washington Initiative 522 (GMO labeling).
GMA did not register as a political committee or file PDC disclosure reports during the 2013 election cycle; it later registered the day after the State sued and then filed reports "in excess of caution."
The State sued for violations of the Fair Campaign Practices Act (FCPA), including failure to register/disclose and statutory prohibitions on concealment; the trial court found multiple violations, assessed a $6M base civil penalty, and trebled it to $18M after finding the violations intentional.
The Court of Appeals affirmed liability and constitutionality but reversed the trebling, requiring subjective knowledge of illegality for intentionality. Both parties sought review.
The Washington Supreme Court: affirmed that GMA was a political committee and that FCPA disclosure requirements are constitutional as applied; affirmed the concealment violation; held the ordinary meaning of "intentional" (intent to accomplish an unlawful act, not knowledge the act is unlawful) applies for treble penalties; reversed the Court of Appeals on trebling and remanded the excessive-fines challenge for further review.
The Supreme Court awarded attorney fees on review to the State and remanded for the Court of Appeals to consider whether the penalty violates federal/state excessive-fines provisions.

Issues

Issue	Plaintiff's Argument (State)	Defendant's Argument (GMA)	Held
Whether GMA was a "political committee" in 2013	GMA became a political committee under the contribution prong because it solicited segregated member contributions for political purposes.	GMA argued a "primary purpose" test must apply to the contribution prong, so it was not a political committee unless opposing I-522 was a primary purpose.	Affirmed: GMA was a political committee under the contribution prong as narrowed by the segregated-funds requirement; no additional primary-purpose requirement is needed.
Whether FCPA registration/disclosure requirements are unconstitutional as applied	Disclosure furthers the important government interest in informing voters; applying the FCPA to GMA is permissible.	Compelled disclosure would chill association/speech and risk reprisals against contributing members, so the law is unconstitutional as applied.	Affirmed: Exacting scrutiny satisfied; State interest is sufficiently important and GMA’s evidence of a "reasonable probability" of reprisals was inadequate.
Whether GMA violated the FCPA concealment prohibition (RCW 42.17A.435)	GMA engaged in acts beyond mere nonreporting (creating DOB, soliciting funds with intent to hide contributors, advising members how to deflect inquiries), amounting to concealment.	GMA contended concealment requires an independent act intended to mislead beyond mere failure to register/report.	Affirmed: Even assuming an independent-act requirement, undisputed evidence shows GMA engaged in affirmative concealment acts and thus violated the statute.
Proper standard for "intentional" violations and treble damages; excessive-fines challenge	State urged trebling allowed where violations were intentional (ordinary meaning).	GMA argued trebling requires subjective intent to violate the law (knowledge of illegality); also challenged the penalty as excessive.	Reversed Court of Appeals: "Intentional" means intent to accomplish an illegal act (no requirement of subjective knowledge of illegality). Treble damages remain discretionary; excessive-fines claim remanded for review of proportionality.

Key Cases Cited

Buckley v. Valeo, 424 U.S. 1 (1976) (disclosure laws are subject to exacting scrutiny and serve the important interest of informing the electorate)
Citizens United v. Fed. Election Comm'n, 558 U.S. 310 (2010) (upholding disclosure principles and describing when disclosure burdens association/speech)
Human Life of Wash. Inc. v. Brumsickle, 624 F.3d 990 (9th Cir. 2010) (FCPA-style disclosure requirements survive exacting scrutiny on their face)
Utter ex rel. State v. Building Indus. Ass'n of Wash., 182 Wn.2d 398 (2015) (organizations may become political committees for an election cycle; prongs for committee status)
State v. (1972) Dan J. Evans Campaign Comm., 86 Wn.2d 503 (1975) (adoption of primary-purpose narrowing for the expenditure prong)
NAACP v. Alabama ex rel. Patterson, 357 U.S. 449 (1958) (disclosure can be enjoined where revelation would lead to a reasonable probability of threats, reprisals, or harassment)
Brown v. Socialist Workers '74 Campaign Comm. (Ohio), 459 U.S. 87 (1982) (evidence of threats and harassment can justify exemption from disclosure)
State v. Conte, 159 Wn.2d 797 (2007) (analysis of mens rea and interaction between civil concealment provisions and criminal statutes)
United States v. Bajakajian, 524 U.S. 321 (1998) (Eighth Amendment excessive-fines proportionality principle)
United States v. $100,348.00 in U.S. Currency, 354 F.3d 1110 (9th Cir. 2004) (factors for determining whether a fine is grossly disproportional)