OLYMPIA — A record-shattering fine levied against the Grocery Manufacturers Association for concealing the identities of the food and beverage companies that spent $11 million to defeat a GMO-labeling initiative in 2013 was upheld Thursday by the Washington Supreme Court.
In a 5-4 decision, justices overruled an appeals court and reinstated an $18 million fine against the industry trade group, now known as the Consumer Brands Association.
The majority said a Thurston County judge was justified in tripling a $6 million base penalty because the association intentionally shielded its members from public disclosure by making the contributions under its name.
Justice Mary Yu, in the majority opinion, said that it was enough that the trade association intentionally did the acts that led to the violation, even if it didn’t know the acts were illegal. “The violator is not required to subjectively know that its conduct is illegal,” Yu wrote.
Justice Charles Johnson, in a dissenting opinion, criticized the majority’s reasoning. “Under the majority’s interpretation, essentially any violation is now subject to trebling,” he wrote.
The $18 million fine, imposed by Superior Court Judge Anne Hirsch, towers over other penalties for illegal campaign contributions. The previous record was $3.8 million, levied in 2006 by the Federal Elections Commission against the Federal Home Loan Mortgage Corp.
The Supreme Court’s decision doesn’t fully settle whether the fine will stand. The court did not rule on whether the penalty violates the Eighth Amendment’s prohibition on excessive punishment. Yu sent the case back to the appeals court to “scrutinize carefully” whether the fine is constitutional.
Washington Attorney General Bob Ferguson said the fine was “appropriately the largest campaign finance penalty ever assessed.”
“My philosophy is straightforward — penalties must be more than a cost of doing business for those, like GMA, who intentionally violate our transparency laws,” he said in a statement.
GMA changed its name in January to the Consumer Brands Association.
“We’ll review the ruling on this legacy issue in due time, but right now we, and our industry, are rightly focused on providing Americans with the essential products they need to stay home and stay safe,” the association’s president and CEO, Geoff Freeman, said in statement.
All nine justices agreed that the trade group should have registered as a political action committee and filed reports. They differed on whether the penalty was fair.
The attorney general’s office sought a $43 million fine — triple the some $14 million GMA collected from its members in 2013 for political activities nationwide. GMA spent $11 million on the Washington initiative.
In his dissent, Johnson noted that a pro-GMO labeling group, Food Democracy Action!, failed to register as a political committee and file reports. The state sued, obtaining a $319,281 judgment, but did not seek triple damages.
“This case seems to exemplify an arbitrary and subjective selection of an organization involved in the political process,” Johnson wrote.
Hirsch did not seem to “properly consider” prior campaign penalties, according to Johnson. “It is concerning that the penalty imposed in this case is an extreme outlier,” he wrote.
Justice Barbara Madsen signed Johnson’s dissent.
In a separate dissent, Justice Sheryl Gordon McCloud said the penalty wrongly “double counted” GMA’s violations under two separate laws. One law requires registering as a political committee and filing reports. The other law forbids concealing spending. Justice Charles Wiggens signed the dissent.
Joining Yu in the majority opinion were Justices Steven Gonzales, Susan Owens, Mary Fairhurst and Debra Stephens.