Washington AG to press for $18 million fine against foodmakers

An appeals court has sent a record fine of $18 million against grocery manufacturers back to a lower court judge for further deliberations.

Washington Attorney General Bob Ferguson said his office will seek to restore an $18 million fine against the Grocery Manufacturers Association, which an appeals court overturned Wednesday.

The Court of Appeals in Tacoma upheld GMA’s conviction and left in place a $6 million judgment for shielding the names of food and beverage companies that contributed to a campaign against a GMO-labeling initiative in 2013. The court ruled, however, that a lower court judge erred by finding that GMA intentionally broke the law and tripling the penalty.

“We won on every issue except one — the trebling of the penalty — and we intend to appeal on that issue,” Ferguson said in a written statement. “GMA intentionally violated Washington state campaign finance laws, and they must be held accountable.”

A GMA spokesman said the association was reviewing the decision and considering its next steps.

Even at $6 million, the fine would be the largest campaign-finance penalty in U.S. history. The Federal Home Loan Mortgage Corporation paid a $3.8 million penalty in 2006 to the Federal Elections Commission.

Thurston County Superior Court Judge Anne Hirsch levied and then tripled the fine in 2016 after ruling GMA intentionally didn’t identify the brand-name companies that spent $11 million to defeat Initiative 522.

The three-judge appeals court ruled that doing something that turned out to be illegal wasn’t the same as intending to break the law.

“The fact that GMA deliberately engaged in conduct that the trial court later determined was a violation of the (law) does not mean that GMA intended to violate” the law, Judge Bradley Maxa wrote for the court.

The appeals court sent the case back to Hirsch for further deliberations on whether the penalty should be tripled.

The court did not address GMA’s contention that the penalty violated the U.S. Constitution’s prohibition on excessive fines.

GMA also cited constitutional rights in wanting to protect its members from criticism for opposing a ballot measure that would have required labels on most foods and drinks with genetically modified ingredients. The association said its members went through a bruising campaign the year before on the same issue in California.

“GMA presented minimal evidence that their members suffered adverse consequences because of their opposition to the California GMO initiative,” Maxa wrote.

The court also rejected GMA’s argument that voters weren’t misled because they knew the contributions came from “grocery manufacturers.”

Maxa wrote that the description was too broad. “Knowing the names of the companies actually funding GMA’s efforts — and particularly the types of products those companies sell — would be valuable to voters,” he stated.

PepsiCo, Nestle USA, Coca-Cola, Kraft Foods, General Mills and Conagra all donated more than $1 million, according to PDC records.

GMA disclosed the names of 34 companies shortly before the election and after receiving a notice from the Public Disclosure Commission that it was violating the law. GMA argues its cooperation argues in favor of leniency, but that argument was rejected by Hirsch and the appeals court.

All together, GMA raised $14.6 million in 2013 to oppose GMO-labeling measures nationwide. The attorney general’s office suggested tripling that figure and fining GMA $43.8 million. The previous record fine in Washington for campaign violations was $975,000 paid by the Washington Education Association in 2008.

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