OLYMPIA — A Washington Supreme Court hearing Tuesday on a record $18 million fine against the food industry touched on boycotts, death threats and whether companies have the same free-speech protection as civil rights workers.
The Grocery Manufacturers Association, a trade group, faces the penalty for failing to timely report the names of the companies that contributed $11 million in 2013 to defeat a GMO-labeling initiative.
An appeals court upheld the conviction, but found the violations were not intentional and slashed the penalty to $6 million — still by far the largest fine ever in the U.S. for a campaign violation.
GMA is appealing the conviction, and the state Attorney General's Office is seeking to restore the $18 million fine.
At the heart of GMA's case is whether companies and executives faced retaliation by engaging in political speech. After a bruising initiative battle in California in 2012, GMA set up a separate account to take in money from members. GMA then contributed $11 million under its name to the "no" campaign.
Under pressure from the state, GMA named the companies shortly before the election.
GMA attorney Robert Mitchell Jr. said he knew representatives of food companies who were threatened "with the kind of pain that would make the Spanish Inquisition feel like a slap on the wrist."
Justice Steven Gonzalez asked whether Internet trolling has changed how people should view vitriol. "Should we have thicker skin now?"
While there are more ways to make threats, "there remains a very serious security threat," Mitchell said.
Justice Barbara Madsen asked whether death threats and boycotts could be lumped together.
Mitchell said calls for boycotts infringed on the companies' right of association. "The boycotts in this case were aimed at forcing members to leave GMA," he said.
The U.S. Supreme Court set a precedent in 1958 for exempting organizations from state disclosure laws. The case stemmed from the state of Alabama seeking the membership list of the National Association for the Advancement of Colored People.
"Shouldn't we be concerned about those people who want to exercise some political speech who do have a legitimate concern based upon the message they want to convey?" Justice Charles Johnson asked.
Deputy Solicitor General Callie Castillo said the court "simply can't compare the rights of civil rights workers with a multi-national corporation (that) is trying to hide million of dollars of campaign contributions."
Asked Justice Debra Stephens: "Did I hear you correctly earlier when you said there is a difference between civil rights workers and multi-national corporations in terms of how we're going to treat their First Amendment protection?"
Castillo said GMA brought up death threats to justify not reporting the names of contributing companies. "GMA corporate members were trying to protect their economic brand images," she said.
Mitchell also accused the Attorney General's Office of selective enforcement. Food Democracy Action, a pro-GMO labeling group, was fined nearly $320,000 for failing to timely report the names of some 7,000 donors. The state did not seek to triple the fine by claiming the violations were intentional.
"Should we concerned about that?" Johnson asked.
Castillo said she did not know the details of the case against Food Democracy Action. "My understanding is the evidence did not bear out there was an intentional violation," she said.
The previous record fine for a campaign contribution was $3.8 million, levied by the Federal Elections Commission against the Federal Home Loan Mortgage Corp. in 2006.
GMA argues the penalty — even at $6 million — is unconstitutionally excessive. The appeals court didn't rule on that claim. If the Supreme Court upholds the conviction, the fine could be the subject of more litigation.
The state originally suggested a $42 million fine, triple the amount GMA collected in 2013 for political activities statewide. How a Thurston County Superior Court judge settled on $6 million — before tripling it to $18 million — is another example of how GMA has been arbitrarily treated, Mitchell said.
"We don't know where the $6 million figure came from," he said. "There are no standards to guide that either."
Mitchell said there was no proof that anyone was deceived. It was known that food and beverage companies opposed the initiative. "There is no evidence it made one wit of difference to the voters," he said.
Castillo said the high fine "matched the level of deceit."