Court Opinion

ID: 1040920
Source: CourtListenerOpinion
Date Created: 2013-09-16 21:17:41.262221+00
Date Added: 2024-06-11T11:51:41.248929
License: Public Domain

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

ROBERT UTTER and FAITH IRELAND,
in the name of the STATE OF                     No. 66439-5-1
WASHINGTON,                                     Consolidated w/66737-8-

                       Appellants,
                                                ORDER GRANTING
                                                RESPONDENT'S MOTION FOR
                                                RECONSIDERATION, WITHDRAWING
                                                OPINION FILED OCTOBER 29, 2012
                                                AND SUBSTITUTING OPINION
BUILDING INDUSTRY ASSOCIATION
OF WASHINGTON,

                       Respondent.

       On October 29, 2012, this court filed its unpublished opinion in the aboyg- ^
entitled action. Respondent/cross-appellant has moved for reconsideration. The ^
court has taken the matter under consideration and has decided to grant the rr^tioriB:

for reconsideration.

       IT IS HEREBY ORDERED that the respondent/cross-appellant's motion for

reconsideration is granted;

       IT IS FURTHER ORDERED that the unpublished opinion of this court filed in

the above-entitled action on October 29, 2012 be withdrawn and that the attached

published opinion be substituted in i^s plao

       Dated this   I\P^ day of

       fex.J.
      IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

ROBERT UTTER and FAITH IRELAND,
in the name of the STATE OF                               No. 66439-5-1
WASHINGTON,                                               Consolidated w/No. 66737-8-1

                       Appellants,
                                                          DIVISION ONE
                                                                                                 r/~\   — i
       v.

                                                                                                 cr>

BUILDING INDUSTRY ASSOCIATION                             PUBLISHED OPINION
OF WASHINGTON,

                       Respondent.                        FILED: September 16. 2013 CO
                                                                                    <£

       Spearman, A.C.J. — Under the Fair Campaign Practices Act (FCPA),

chapter 42.17A RCW, political committees are subject to certain registration and
reporting requirements.1 An organization is considered a political committee "by
either (1) expecting to receive or receiving contributions, or (2) expecting to make

or making expenditures to further electoral political goals." Evergreen Freedom
Found, v. Washington Educ. Ass'n. 111 Wn. App. 586, 599, 49 P.3d 894 (2002)

(EFF). These alternative means are the contribution prong and the expenditure

prong, respectively. Id. at 598. In 2008, Robert Utter and Faith Ireland brought a
citizen's action against the Building Industry Association of Washington (BIAW),
asserting that it met the definition of a political committee under the contribution

       1While the parties' briefs refer to the former statutes, all references in our opinion are to
the recodified statutes as they appear in chapter 42.17A RCW.
No. 66439-5-1 Consolid. w/No. 66737-8-1/2

prong and the expenditure prong through its support for Dino Rossi's 2008

gubernatorial campaign. Therefore, Utter and Ireland claimed, BIAW violated the

FCPA by failing to register and report as a political committee. Before filing their

lawsuit against BIAW, Utter and Ireland sent a notice of intent to the Washington

State Attorney General's office (AG), stating that they would file a lawsuit against

BIAW and BIAW-MSC for violations of the FCPA if the State did not. The AG

referred the allegations to the Public Disclosure Commission (PDC) for

investigation. Based on the PDC's conclusions, the AG filed a lawsuit against

BIAW-MSC but did not file a lawsuit against BIAW.

       On BIAW's motion for summary judgment, the trial court found there was

no genuine issue of material fact in dispute and dismissed Utter and Ireland's

lawsuit. It denied BIAW's request for attorney's fees. Utter and Ireland appeal

from summary judgment and BIAW cross-appeals the denial of attorney's fees.

We conclude that while the evidence creates an issue of material fact that BIAW

was a political committee under the expenditure prong, Utter and Ireland's claim

is barred by RCW 42.17A.765(4), where the AG caused their allegations to be

investigated, determined BIAW was not a political committee, and did not file a
lawsuit. Accordingly, we affirm. We also affirm the trial court's denial of attorney's

fees to BIAW and do not award fees on appeal.

                                       FACTS

       BIAW is a non-profit affiliate of the National Association of Home Builders

(NAHB), whose mission is to promote the common interests of Washington's
No. 66439-5-1 Consolid. w/No. 66737-8-1/3

building industry. It has approximately 13,500 members, primarily home builders.

Members first join and pay dues to one of BIAW's fifteen local associations

throughout the state, then automatically become members of BIAW and NAHB.

Among other activities, BIAW does advocacy work in all branches of government,

helps local associations recruit new members, runs an educational program, and

organizes conferences. BIAW's sources of revenue include membership dues,

income from interest and investments, health insurance fees, and fees from

educational programs.

       In 1993, BIAW created a wholly owned, for-profit subsidiary, BIAW

Member Services Corporation (BIAW-MSC), to provide certain services to BIAW
members. BIAW-MSC's primary function is to administer a worker's

compensation insurance retrospective rating program ("retro program") pursuant
to Department of Labor and Industries' rules.2 BIAW-MSC generates revenue
from the retro program from an up-front enrollment fee and from a back-end,
incentive fee of 10 per cent of any refund earned by the program in a given year,

referred to as a Marketing Assistance Fee (MAF). BIAW-MSC also runs other
programs such as health insurance, life insurance, and educational seminars. It
contributes a portion ofits revenues to independent expenditures and to political
action committees (PACs), such as ChangePAC. BIAW and BIAW-MSC share

        2MSC was created to "'reduce the risk of tax liability for BIAW... for administering a for-
profit retro program."' Retro programs allow members to pool their worker's compensation risks
and provide a chance for the pool to earn a refund of a portion of its premiums, when the group's
combined claims are less than its premiums. See Washington Administrative Code (WAC) 296-
17-90455.
No. 66439-5-1 Consolid. w/No. 66737-8-1/4

the same leadership and staff, with staff salaries allocated between the entities

based on the type of work performed. BIAW-MSC itself does not have any

members.

       By spring 2007, one of BIAW's main efforts was supporting Rossi's 2008

gubernatorial campaign. As part of this effort, BIAW senior officers requested the

local associations to pledge excess MAF funds from their retro programs to

support the campaign. Senior officers drafted a "Rossi-lution" that stated:
       WHEREAS BIAW is committing 100% of excess retro dollars
       to the 2008 gubernatorial election,

       WHEREAS, participation of local associations is necessary
       for success
       NOW THEREFORE BE IT RESOLVED THAT
       The following local associations pledge that all Retro Marketing
       Assistance funds received in 2007, beyond the amount budgeted
       for the year, will be sent to the BIAW and placed in the BIAW 2008
       gubernatorial election account, to be used for efforts in the 2008
       gubernatorial race.

Eleven of the fifteen local associations agreed to participate in this effort, which

ultimately raised $584,527.53.

       On July 25, 2008 and September 9, 2008, in accordance with RCW
42.17A.765(4), Utter and Ireland sent notices of intent to the Washington State
Attorney General (AG), stating that they would file a lawsuit against BIAW and
BIAW-MSC for violations of the FCPA if the State did not. They claimed BIAW

was legally responsible for violations of the FCPA, even though the independent
expenditures in question were handled through the accounts of BIAW-MSC.
No. 66439-5-1 Consolid. w/No. 66737-8-1/5

      The AG referred Utter and Ireland's allegations to the Public Disclosure

Commission (PDC), which completed an investigation and issued a report. The

PDC determined that BIAW-MSC requested permission from the local

associations to withhold a portion of the MAF funds and handled those portions

of the withheld funds. On August 20, 2008, BIAW-MSC contributed from its

general treasury fund $584,527.53—the amount raised from the MAF funds—to

ChangePAC and provided ChangePAC a list of the 11 local associations and the

amount contributed by each association. The next day, ChangePAC reported the

receipt of the contributions as coming from the local associations.

      The PDC report concluded:

      While [PDC] staff maintains the entire BIAW-MSC general fund
      would not be considered a political committee, the solicitation,
       receipt, and retention of local association Retro program refunds by
       BIAW-MSC in the amount of $584,527.53 qualifies that discrete
       portion of BIAW-MSC funds as a political committee pursuant to
       [RCW42.17A.005(37)].

Based on the report, the PDC advised the AG that BIAW-MSC committed

"multiple apparent violations of [RCW 42.17A] by failing to register as a political
committee and report the contributions it solicited, received and retained from its

local associations in 2007, and by failing to report expenditures to ChangePAC in

2008 with the contributions received." The report concluded that BIAW was not a

political committee under RCW 42.17A.005(37). It found that during 2006 to
June 2008, BIAW did not solicit or receive contributions to support or oppose

candidates or ballot propositions, contribute to candidates or political committees,
No. 66439-5-1 Consolid. w/No. 66737-8-1/6

or use its general treasury for other campaign-related expenditures. Accordingly,

the report did not recommend action against BIAW.

       On September 19, 2008, the AG filed a lawsuit against BIAW-MSC in

superior court, alleging that BIAW-MSC was required to register as a political

committee with respect to the MAF funds and to file PDC reports. The AG

alleged that BIAW-MSC conducted an illegal fundraising campaign and violated

RCW 42.17A.435 by concealing its solicitation and receipt of $584,527.53 in

campaign contributions toward 2008 electoral activities. BIAW-MSC and the AG

settled the lawsuit. As part of the settlement, BIAW-MSC agreed to file a political

committee registration form and campaign finance disclosure reports with the

PDC.

       The AG did not file a lawsuit against BIAW. Utter and Ireland filed a

lawsuit against BIAW on October 6, 2008 and filed an amended complaint on

October 13. They claimed BIAW itself qualified as a political committee and was

therefore required to register and report.3 They asserted that although the
transfers and expenditures at issue were processed through BIAW-MSC

accounts, the evidence showed that BIAW "orchestrated the entire violation,

made all decisions, and the parties making the illegal donations believed they

were donating to the BIAW." They argued that the funds belonged to BIAW

and/or its members and that BIAW-MSC was a "mere conduit" for them.

       3Utter and Ireland also claimed that BIAW exceeded the campaign contribution limits
under RCW 42.17A.405 and improperly coordinated with Dino Rossi. They voluntarily dismissed
that claim and it is not at issue on appeal.
No. 66439-5-1 Consolid. w/No. 66737-8-1/7

       The BIAW filed a motion for summary judgment. The trial court granted

BIAW's motion, finding there was no genuine issue of material fact in dispute and

BIAW was entitled to judgment as a matter of law. Utter and Ireland appeal.

                                          DISCUSSION

       Utter and Ireland contend the evidence creates a genuine issue of material

fact that BIAW was a political committee under the contribution prong and the

expenditure prong. BIAW responds that the entire activity forming the basis of
Utter and Ireland's claims was conducted by BIAW-MSC. We agree with Utter and

Ireland that the evidence creates an issue of fact under the expenditure prong.

However, we conclude the AG's actions preclude Utter and Ireland's citizen

action.4

                                      Summary Judgment

       We review summary judgment decisions de novo, engaging in the same

inquiry as the trial court. Michak v. Transnation Title Ins. Co., 148 Wn.2d 788,
794-95, 64 P.3d 22 (2003). Summary judgment is proper if the pleadings,
depositions, answers, and admissions, together with the affidavits, show that
there is no genuine issue of material fact and the moving party is entitled to
judgment as a matter of law. CR 56(c). "When ruling on a summary judgment
motion, the court is to view all facts and reasonable inferences therefrom most
favorably toward the nonmoving party." Lvbbert v. Grant Countv. State of Wash.,

           4 We decline to address BIAW's constitutional claims.
                                                  7
No. 66439-5-1 Consolid. w/No. 66737-8-1/8

141 Wn.2d 29, 34, 1 P.3d 1124 (2000) (citing Weyerhaeuser Co. v. Aetna Cas. &

Sur. Co.. 123 Wn.2d 891, 897, 874 P.2d 142 (1994)).

       Under RCW42.17A.005(37), "political committee" includes any

organization that has "the expectation of receiving contributions or making

expenditures in support of, or opposition to, any candidate or any ballot

proposition." This definition contains two alternative prongs under which an entity

is considered a political committee: (1) the contribution prong and (2) the

expenditure prong. EFF, 111 Wn. App. at 599.

                                Contribution prong

       Under the contribution prong, an organization is considered a political

committee if it expects to receive or receives contributions toward electoral goals.

EFF, 111 Wn. App. at 599. Utter and Ireland contend contemporaneous

documents show that BIAW solicited and received pledges, in the form of MAF

funds, from the local associations. For example, the "Rossi-lution" signed by

heads of the local associations refers to "BIAW" throughout. Documents from the

local associations refer to "BIAW" in discussing the local associations'

participation in the MAF fundraising effort and their decisions to pledge funds.

Other documents show that throughout the fundraising effort, senior officers

represented themselves as "BIAW senior officers" and BIAW president Daimon

Doyle signed correspondence seeking pledges as "BIAW President." Utter and

Ireland contend that BIAW was required to register within two weeks of having

                                         8
No. 66439-5-1 Consolid. w/No. 66737-8-1/9

the expectation of receiving the pledges for MAF funds from the local

associations and was required to report the pledges when received.

       BIAW does not dispute that pledges are treated as contributions under the

FCPA; rather, it disputes that it was the entity that expected to receive the

contributions at issue. It contends that BIAW-MSC received the withheld MAF

funds from the local associations and BIAW-MSC donated to ChangePAC. It

points out that the MAF funds are generated from a BIAW-MSC program and are

revenue to BIAW-MSC, not BIAW. As for the use of "BIAW" in the

contemporaneous documents, BIAW contends that while BIAW and BIAW-MSC

are legally separate entities with different functions, both are referred to internally
as "BIAW." It explains that when its board of directors or any officers direct

actions by "BIAW," BIAW and/or BIAW-MSC staffensures that the appropriate
entity _ whether BIAW or BIAW-MSC —actually carries them out to comply with
regulatory and tax obligations.

       We conclude the evidence does not create a genuine issue of material

fact as to the contribution prong. The issue is whether BIAW or BIAW-MSC

expected to receive and ultimately did receive the MAF funds from the local
associations. The evidence shows that BIAW-MSC administered the retro

program from which the funds were generated and wasformed in part to run the
program; BIAW-MSC actually received the fees from the local associations and
then contributed them to ChangePAC; and these transactions were made

through BIAW-MSC's accounts. BIAW submitted evidence that "BIAW" was used
No. 66439-5-1 Consolid. w/No. 66737-8-1/10

generically to refer to BIAW-MSC, BIAW, or both. The documents to which Utter

and Ireland point fail to create an issue of fact.

                                  Expenditure prong

       Under the expenditure prong, an organization is considered a political

committee by expecting to make or making expenditures to further electoral

political goals. EFF, 111 Wn. App. at 599. An additional requirement under this

prong is that an organization must have as its primary purpose, or one of its

primary purposes, to affect, directly or indirectly, governmental decision making

by supporting or opposing candidates or ballot propositions. State v. (1972) Dan

J. Evans Campaign Comm.. 86 Wn.2d 503, 509, 546 P.2d 75 (1976).

       Utter and Ireland contend the evidence shows that BIAW made or

expected to make electoral expenditures. Alternatively, even ifthose

expenditures are attributed to BIAW-MSC, Utter and Ireland argue, BIAW

"financed" or "controlled" BIAW-MSC's expenditures and BIAW-MSC's

expenditures should therefore be considered made by BIAW under RCW

42.17A.455(2). Finally, they contend electoral activity was one of BIAW's primary

purposes during the 2008 election cycle. We consider these issues in turn.

       a. Whether BIAW made electoral expenditures

       First, Utter and Ireland contend the following evidence shows that BIAW

made $233,648.89 in independent expenditures and over $6.4 million in electoral

expenditures to other political committees during the 2008 election cycle:

                                           10
No. 66439-5-1 Consolid. w/No. 66737-8-1/11

   •   PDC "Cash Receipts Monetary Contributions" report dated October
       13, 2008 stating that "Building Industry Association o" [sic] made an
       aggregate total contribution of $6,169,175 to ChangePAC.
   •   PDC reporting form for "Electioneering Communications" dated
       October 14, 2008 stating that "Building Industry Assn of WA" made
       "total C-6 expenses" of $233,648.99 in relation to Rossi.
   •   BIAW reported making in-kind contributions of staff time to
       ChangePAC and It's Time for a Change.

       BIAW responds that the expenditures reflected in these PDC documents

are BIAW-MSC expenditures. It contends there was not enough room on the

forms for the full name "Building Industry Association of Washington Member

Services Corporation" and that the PDC discouraged the use of acronyms. BIAW

contends the PDC recognized this issue in its investigation when it wrote,

regarding BIAW-MSC's expenditures from 2006 to 2008:

       BIAW-MSC pays for staff members who provide support for
       reportable independent expenditures, electioneering
       communications, and contributions to political committees. In these
       instances, PDC reports show BIAW as the entity providing the
       support. PDC reports should identify BIAW-MSC as providing the
       support.

BIAW points to its income statements and BIAW-MSC's income statements to

show that BIAW-MSC made the expenditures. It also points to the statement by

its executive vice president, Tom McCabe, in a declaration that "BIAW does not

contribute to any political candidates or political action committees. Nor does it

make political expenditures." It notes that, as a non-profit entity, it must report to

the IRS both revenue and expenses on its Form 990, and contends there are no

electoral expenditures noted on the 2008 form.

                                          11
No. 66439-5-1 Consolid. w/No. 66737-8-1/12

        We agree with BIAW that the evidence fails to create an issue of material

fact that BIAW-MSC made the expenditures shown in the PDC reports. This

issue involves the identity of the entity — BIAW or BIAW-MSC—that made the

expenditures in question. Along with the other evidence to which BIAW points,

the contents of its 2008 Form 990 are inconsistent with BIAW having been the

entity that made the expenditures reflected in PDC reports.

        However, we conclude that BIAW's 2008 Form 990 itself creates an issue

offact that BIAW made electoral expenditures.5 Part IV, Line 3 of the form asks,

        5BIAW submits to this court an amended and corrected Form 990, contending that it
shows that BIAW did not spend any funds on electoral activities. The amended Form 990 shows
that BIAW's answer to Part IV, Line 3 (asking, "Did the organization engage in direct or indirect
political campaign activities on behalf of or in opposition to candidates for public office?") was
"no." Exhibit A to Declaration of Art Castle. In a Supplemental Information to Form 990 submitted
to the IRS, BIAW explained,

        The organization is amending the 2008 Form 990 to correctly answer Form 990,
        Part IV, Line 3. The organization only incurs lobbying expenditures, no political
        expenditures or activities, and, therefore, should have answered this question
        'no'. As a result, Schedule C, Part l-A is no longer completed. Schedule C, Part
        lll-B remains the same to properly disclose lobbying expenditures and
        nondeductible dues information.

        BIAW requests this court to consider and rely upon the corrected Form 990, citing RAP
9.11, which provides:

        The appellate court may direct that additional evidence on the merits of the case
        be taken before the decision of a case on review if: (1) additional proof of facts is
        needed to fairly resolve the issues on review, (2) the additional evidence would
        probably change the decision being reviewed, (3) it is equitable to excuse a
        party's failure to present the evidence to the trial court, (4) the remedy available
        to a party through postjudgment motions in the trial court is inadequate or
        unnecessarily expensive, (5) the appellate court remedy of granting a new trial is
        inadequate or unnecessarily expensive, and (6) it would be inequitable to decide
        the case solely on the evidence already taken in the trial court.'

RAP 9.11. Ordinarily, under the rule, the appellate court will "direct the trial court to take
additional evidence and find the facts based on that evidence." Id.
        We decline to direct additional evidence to be taken under RAP 9.11. BIAW does not
explain why the requirements of the rule are met here. Ifthis matter were remanded, the trial
court could consider the evidence at its own discretion.

                                                   12
No. 66439-5-1 Consolid. w/No. 66737-8-1/13

"Did the organization engage in direct or indirect political campaign activities on

behalf of or in opposition to candidates for public office? If "Yes," complete

Schedule C, Part 1." BIAW answered "Yes" and attached Schedule C. On form

Schedule C, which contains the heading "Political Campaign and Lobbying

Activities," next to the entry for "Political expenditures," BIAW responded,

"$165,214." While political expenditures do not necessarily equate to electoral

expenditures, BIAW, as the moving party, fails to show that none of the $165,214

noted on Form 990 was spent on electoral activity.

       b. Whether BIAW "controlled" BIAW-MSC's expenditures

        Utter and Ireland also contend that even if there is no evidence that BIAW

made electoral expenditures, the evidence creates an issue of material fact that

BIAW "controlled" BIAW-MSC's expenditures as defined in RCW42.17A.455(2).6
They contend that if BIAW controlled BIAW-MSC's expenditures, BIAW-MSC's

expenditures are considered made by BIAW.

       The preliminary issue we must decide is whether RCW 42.17A.455(2)

applies in this context, so that any electoral expenditures made by BIAW-MSC

are considered made by BIAW — for the purpose of determining whether BIAW

is a political committee — if BIAW "financed, maintained, or controlled" BIAW-

MSC's contribution or expenditure activity. RCW42.17A.455 provides:

        6 In addition, Utter and Ireland contend that RCW 42.17A.460 makes BIAW responsible
even if it carried out the contribution through BIAW-MSC. We decline to consider this argument
because Utter and Ireland make only a passing reference to the statute and do not explain why
the evidence showed the statute applies.
                                               13
No. 66439-5-1 Consolid. w/No. 66737-8-1/14

      For purposes of this chapter:

      (1) A contribution by a political committee with funds that have all
      been contributed by one person who exercises exclusive control
      over the distribution of the funds of the political committee is a
      contribution by the controlling person.

      (2) Two or more entities are treated as a single entity if one of the
      two or more entities is a subsidiary, branch, or department of a
      corporation that is participating in an election campaign or making
      contributions, or a local unit or branch of a trade association, labor
      union, or collective bargaining association that is participating in an
      election campaign or making contributions. All contributions made
      by a person or political committee whose contribution or
      expenditure activity is financed, maintained, or controlled by a trade
      association, labor union, collective bargaining organization, or the
      local unit of a trade association, labor union, or collective
      bargaining organization are considered made by the trade
      association, labor union, collective bargaining organization, or local
      unit of a trade association, labor union, or collective bargaining
      organization.

      (3) The commission shall adopt rules to carry out this section and is
      not subject to the time restrictions of RCW 42.17A.110(1).

RCW42.17A.455 (emphases added).

      Utter and Ireland argue that under the plain language "[f]or purposes of

this chapter," RCW 42.17A.455 applies to all other provisions of chapter 42.17A

RCW, including RCW42.17A.005(37), which defines "political committee." BIAW

contends that under RCW 42.17A.455, campaign contributions from a

corporation and its controlled entities are aggregated only in determining whether

a campaign contribution cap has been reached, not in determining whether an

entity is a political committee under RCW42.17A.005(37). It cites Edelman v.

State ex rel. Pub. Disclosure Comm'n, 152 Wn.2d 584, 590, 99 P.3d 386 (2004)

in support, pointing to the court's statement that "[RCW 42.17A.455] specifies a

                                        14
No. 66439-5-1 Consolid. w/No. 66737-8-1/15

relationship between entities in which those entities are considered a single entity

for purposes of campaign contribution limits."

       When interpreting a statute, we first look to its plain language. State v.

Gonzalez, 168 Wn.2d 256, 271, 226 P.3d 13, cert, denied, 131 S. Ct. 318, 178 L

Ed.2d 207(2010) (citing State v. Armendariz, 160Wn.2d 106, 110, 156 P.3d 201

(2007)). If the plain language is subject to one interpretation only, our inquiry

ends. jd. However, even the language "for purposes of this chapter" may not be

determinative, as illustrated by a case cited by BIAW, Am. Legion Post #149 v.

Wash. State Dep't of Health, 164 Wn.2d 570, 192 P.3d 306 (2008).

       In 1985, the state legislature had adopted the clear indoor air act, which

limited smoking in some public places. Am. Legion Post# 149. 164 Wn.2d at 581

(citing LAWS OF 1985, ch. 236). The act exempted "private facilities" and

"private enclosed workplace[s], within a public place, from the smoking ban. jd.

(citing former RCW 70.160.020(2) (1985), amended by LAWS OF 2006, ch. 2 §

2; RCW 70.160.060). In 2006, Washington voters enacted Initiative Measure

901, which expanded the prohibition on smoking in public places by amending

the definition of a "public place'" to include facilities such as schools, bars,

bowling alleys, and casinos. \± at 581-82 (citing LAWS of 2006, ch. 2). Initiative

901 also prohibited smoking in "'any place of employment.'" jd. at 582 (citing

RCW 70.160.030, .020(3)). Chapter 70.160 RCW is now entitled the smoking in

public places act. (the Act), id, at 581-82.

                                           15
No. 66439-5-1 Consolid. w/No. 66737-8-1/16

       American Legion Post #149, a private, nonprofit fraternal organization,

owned and operated a private facility open to members and guests. The

organization employed several workers to run the facility, k± at 582-83. At issue

was whether the Act prohibited smoking in the Post's facility. Id. at 581. The Act

prohibits smoking "in a public place or in any place of employment." RCW

70.160.030. "'Public place'" is defined as "that portion of any building or vehicle

used by and open to the public, regardless of whether the building or vehicle is

owned in whole or in part by private persons or entities, the state of Washington,

or other public entity." RCW 70.160.020(2). The final sentence of the definition of

a "'[pjublic place'" provides, "This chapter is not intended to restrict smoking in

private facilities which are occasionally open to the public except upon the

occasions when the facility is open to the public." RCW 70.160.020(2). A "'[pjlace

of employment'" is defined as "any area under the control of a public or private

employer which employees are required to pass through during the course of

employment. . . ." RCW 70.160.020(3).

       The Post argued that smoking was not prohibited in its facility, pointing to

RCW 70.160.020(2). Am. Legion Post #149, 164 Wn.2d at 587. It contended that

"chapter" referred to the entire Act, chapter 70.160 RCW, and that ifvoters had

wanted the exception to apply only to the definition of a "public place," the

initiative should have modified that sentence. Id. at 587-88.

       The court first explained,

       '[l]n determining the meaning of a statute enacted through the
       initiative process, the court's purpose is to ascertain the collective

                                          16
No. 66439-5-1 Consolid. w/No. 66737-8-1/17

      intent of the voters who, acting in their legislative capacity, enacted
      the measure....' Where the language of an initiative enactment is
      'plain, unambiguous, and well understood according to its natural
      and ordinary sense and meaning, the enactment is not subject to
      judicial interpretation. .. .' In construing the meaning of an initiative,
      the language of the enactment is to be read as the average
      informed lay voter would read it.

Am. Legion Post #149, 164 Wn.2d at 585 (internal quotation marks and citations

omitted). Furthermore, the court noted,

      An initiative must be read in light of its various provisions, rather
      than in a piecemeal approach, and in relation to the surrounding
      statutory scheme. A court must, when possible, give effect to every
      word, clause and sentence of a statute. The goal is to avoid
      interpreting statutes to create conflicts between different provisions
      so that we achieve a harmonious statutory scheme. If there is an
       apparent conflict between two provisions, the more specific and
       more recently enacted statute is preferred. Only if the language is
       ambiguous may the court examine extrinsic sources such as a
       voter's pamphlet.

Id. at 585-86 (internal quotation marks and citations omitted).

       The court held that the Post's interpretation of RCW 70.160.020(2) was

inconsistent with the surrounding statutory scheme, voters' intent in enacting

Initiative 901 to protect employees from smoking regardless of whether they

worked in a public place, and relevant principles of statutory construction, jd. at

588. The exception for private facilities was part of the definition of a "public

place" and was not repeated under the definition of a "place of employment." jd.

The court concluded that "the exception for private facilities is an exception to the

definition of a 'public place' and does not apply to the prohibition against smoking

in 'any place of employment.'" JdL at 591. Thus, the language "this chapter" did

not refer to the entire act, chapter 70.160 RCW.

                                          17
No. 66439-5-1 Consolid. w/No. 66737-8-1/18

        Am. Legion Post #149 supports the proposition that the language "for

purposes of this chapter" does not necessarily mean a provision will apply to

every other provision in the chapter at issue. It also leads us to conclude we may

look at the context and purpose of a statute and the surrounding statutory

scheme. Here, as BIAW and amici7 note, RCW 42.17A.005 and RCW
42.17A.455 were enacted through different initiatives. Washington's campaign

finance reporting and disclosure rules, including the definition of "political

committee" contained in RCW 42.17A.005(37), were enacted by voters in 1972

with the passage of Initiative Measure No. 276. Twenty years later, RCW

42.17A.455 was adopted when voters approved Initiative 134, State of

Washington Voters Pamphlet, General Election 8, 11 (Nov. 3, 1992) to the

legislature.

        We conclude that voters' intent in enacting the relevant portion of 1-134

(codified as RCW 42.17A.455) was to attribute contributions for the purpose of
determining whether campaign contribution limits had been reached. 1-134

focused on capping campaign contributions, as reflected by its short title and

ballot title:

        Official BallotTitle: Shall campaign contributions be limited; public
        funding of state and local campaigns be prohibited; and campaign
        related activities be restricted.

        7Washington State Labor Council, SEIU Healthcare 775NW, UFCW 21, Washington
State Education Association, SEIU Healthcare 1199NW, and SEIU Local 925. Amici each
finance, maintain, or control a political action committee that makes candidate contributions,
contributions to political committees, and/or independent expenditures in support of, or in
opposition to, various candidates and ballot propositions. Amici Brief 1. None ofthe amici are
registered as a political committee.
                                                18
No. 66439-5-1 Consolid. w/No. 66737-8-1/19

          Short Title: AN ACT Relating to the regulation of political
          contributions and campaign expenditures ....

Initiative Measure No. 134 (1-134) contained the following codified statement of

intent:

          By limiting campaign contributions, the people intend to:

          (a) Ensure that individuals and interest groups have fair and equal
          opportunity to influence elective and governmental processes;
          (b) Reduce the influence of large organizational contributors; and
          (c) Restore public trust in governmental institutions and the
          electoral process.

RCW 42.17A.400(2). The Washington Supreme Court observed that this

legislation "sought to accomplish the initiative's purpose by establishing

campaign contribution limits." Edelman, 152 Wn.2d at 587. There is no indication

in the language of the initiative informing voters that Part III, Section 6 (codified

as RCW 42.17A.455) would expand the obligations of entities required to register

and report as political committees.

          The text and structure of the initiative also support the proposition that the

language following "for purposes of this chapter" in RCW 42.17A.455 is aimed at

determining whether campaign contribution limits have been reached. What was

codified as RCW 42.17A.455 was Section 6 of Part III (entitled "Contributions") of

1-134. The first section of Part III—Section 4—limits the amount that can be

contributed to candidates. Section 5 addresses attribution of contributions by

family members, Section 6 addresses attribution of contributions by controlled

entities, and Section 7 provides that "earmarked" contributions made through a

third party are attributed to the original contributor. None of these sections states

                                            19
No. 66439-5-1 Consolid. w/No. 66737-8-1/20

that it is directed solely to determining whether contribution limits in Section 4

have been met, although that is the evident purpose of the sections in Part III.

       Finally, limiting RCW 42.17A.455 to the campaign contribution context is

consistent with the definition of political committee itself. Under the plain

language of the definition of "political committee" in RCW42.17A.005(37), the

organization must itself make expenditures to be considered a political

committee. See RCW42.17A.005(37). ("'Political committee' means any person

(except a candidate or an individual dealing with his or her own funds or

property) having the expectation of receiving contributions or making

expenditures in support of, or opposition to, any candidate or any ballot

proposition."). But if RCW 42.17A.455 is applied in the context of defining a

political committee, a trade association, labor union, collective bargaining

organization (or the local unit of any such entity) can be a political committee

even if it does not itself make any political expenditures, so long as it finances,

maintains, or controls the contribution or expenditure activity of a political

committee. We conclude that RCW 42.17A.455 does not apply so that BIAW-

MSC's electoral expenditures are attributed to BIAW, for the purpose of

determining whether BIAW is a political committee, if BIAW financed, maintained,

or controlled BIAW-MSC's contribution or expenditure activity.

       c.   Whether electoral activities were one of BIAW's primary purposes

       Finally, we must determine whether there was a genuine issue of material

fact that electoral activities were one of BIAW's primary purposes. The following

                                          20
No. 66439-5-1 Consolid. w/No. 66737-8-1/21

non-exclusive factors are considered: (1) the organization's stated goals and

mission; (2) whether the organization's conduct furthers its stated goals and

missions; (3) whether the stated goals and mission would be substantially

achieved by a favorable outcome in the election; and (4) whether the

organization uses non-electoral means to achieve its stated goals. EFF, 111 Wn.

App. at 600. "[Ijfthe organization has merely restated its primary political purpose

in broad nonpolitical terms, the organization's purpose will likely be achieved in

an upcoming election. But if electoral political activity is merely one means the

organization uses to achieve its legitimate broad nonpolitical goals, electoral

political activity cannot be said to be one of the organization's primary purposes."

EFF. 111 Wn. App. at 600.

       We conclude that while BIAW's mission statement8 does not support a

finding that electoral activity is one of BIAW's primary purposes as a general

matter, the evidence in the record, viewed in the light most favorable to Utter and

Ireland, nonetheless creates an issue of fact as to whether BIAW's conduct

during the 2008 election cycle furthered its stated goals and missions, whether

       8 BIAW's mission statement reads:

       The Building Industry Association of Washington is the voice of the housing
       industry in the state of Washington. The association is dedicated to
       ensuring and enhancing the vitality of the building industry for the benefit of
       its members and the housing needs of its citizens.

       To accomplish this purpose, the association's primary focus is to educate,
       influence and affect the legislative, regulatory, judicial and executive
       agencies of Washington's government. The Building Industry Association
       of Washington will offer its membership those services which can best be
       provided on a state wide basis and will disseminate information concerning
       the building industry to all associated members and the public.
                                                21
No. 66439-5-1 Consolid. w/No. 66737-8-1/22

BIAW's stated goals and mission would be substantially achieved by Rossi

winning the election, and whether BIAW used non-electoral means to achieve its

stated goals during that time. There is evidence from which it may be inferred

that supporting Rossi's campaign was a top priority for BIAW leading up to the

2008 election and that BIAW made significant efforts toward that end. This

evidence includes the following:

   •   June 29, 2007 meeting minutes for BIAW's Board of Directors show
       that BIAW president Daimon Doyle announced that he was
       encouraged by the support from the local associations to contribute
       to BIAW's 2008 governor fund and that so far over $550,000 had
       been raised. Rossi was a guest speaker at this meeting and
       thanked BIAW members for their support.
   •   In a letter to BIAW members asking them to contribute at least 10
       percent of their refunds from the retro program to the 2008
       gubernatorial race, Doyle wrote:
           The next Governor will, in my opinion, make the most significant
           impact on the long-term success of our industry and our
           businesses. He or she will be the driving force for a change in
          our state's business climate—either for better or worse in 2008
          and beyond. He or she will appoint the Directors of the
          Departments of Ecology and Labor & Industries—both agencies
          that have direct (and potentially very negative) impacts on our
          industry and our individual businesses. He or she will set the
          tone in all areas of a government that is pervasive in our lives.
          No single individual in this state has a greater influence on our
          future than the Governor. Getting the right person in office is
          critical.

          If every member were to contribute just 10% of their refund, we
          would begin the 2008 Governor's race with a war chest in
          excess of $3.7 million! Combined with substantial funds that
          have already been committed by BIAW and its local
          associations, I believe that we can make a tremendous impact
          on an election that was so close it took two re-counts to
           complete last time.
   •   In a March 9, 2007 email to other BIAW leaders, Doyle wrote, "In
       light of recent attacks on our entire industry by the legislature, we

                                         22
No. 66439-5-1 Consolid. w/No. 66737-8-1/23

       have never been more in need of a pro-housing Governor than now

   •   In a March 22, 2007 email, Doyle wrote:
           Our State government has become very anti-business and in
           many respects anti-builder. This year is just one example of how
           our industry can be majorly affected by the legislation passed in
           Olympia. Add to that, our opponents—those who want tighter
           environmental restrictions and have pledged to dismantle the
           Retro program—are huge supporters of the current incumbents.
           With one vote shy of a 2/3 majority in both the House and
           Senate, it would take huge sums of money and many years of
          effort to win back even one of those two bodies. However, the
           change of just one individual, the Governor, would have a
           profound effect on this state. Regardless of what the legislature
           votes out, the Governor has the veto pen.. .. We must get a
           pro-housing Governor in office and 2008 will be our best
           opportunity.
   •   In January 2008, newly elected BIAW president Brad Spears
       announced, "One of my priority goals as the 2008 President of the
       Building Industry Association of Washington is to replace anti-small
       business and anti-affordable housing Governor Gregoire with her
       pro-small business and affordable housing challenger Dino Rossi."
   •   February 27, 2008 meeting minutes for BIAW's Board of Directors
       show that Spears announced that BIAW's number one priority this
       campaign season would be to help Rossi get elected. Spears
       reported that the General Membership luncheon, which was well
       attended, featured Rossi as the guest speaker and that Rossi had
       delivered a "great speech." jd. Four recent polls showed that if the
       election were held today, Rossi would win. Spears had met with
       leaders across the state and nation who shared their respect for
       BIAW due to its successes and efforts. Spears also reported that
       candidates came to BIAW because they knew BIAW had the
       resources, will, and tools in place to get the job done. jd.
   •   In promoting the main benefits of BIAW membership, BIAW cited its
       "Political Program": "BIAW's experienced team of lobbyists and
       members . .. work to elect 'business friendly' candidates

       We conclude that the evidence created a genuine issue of material fact

that BIAW made electoral expenditures and that electoral activities were one of

its primary purposes during the 2008 election.

                                        23
No. 66439-5-1 Consolid. w/No. 66737-8-1/24

                  Preclusive Effect of Attorney General's Actions

      BIAW contends that Utter and Ireland's lawsuit was precluded under RCW

42.17A.765(4).9 Though notfor the reasons asserted by BIAW, we agree and
affirm the trial court's dismissal of Utter and Ireland's claims on summary

judgment.

       RCW42.17A.765(4) provides:

      (4) A person who has notified the attorney general and the
      prosecuting attorney in the county in which the violation occurred in
      writing that there is reason to believe that some provision of this
       chapter is being or has been violated may himself or herself bring in
      the name of the state any of the actions (hereinafter referred to as a
      citizen's action) authorized under this chapter.
              (a) This citizen action may be brought only if:
              (i) The attorney general and the prosecuting attorney have
              failed to commence an action hereunder within forty-five
              days after the notice;
              (ii) The person has thereafter further notified the attorney
              general and prosecuting attorney that the person will
              commence a citizen's action within ten days upon their
              failure to do so;
              (iii) The attorney general and the prosecuting attorney have
              in fact failed to bring such action within ten days of receipt of
              said second notice; and
              (iv) The citizen's action is filed within two years after the date
              when the alleged violation occurred.

RCW42.17A.765(4). Thus, a citizen's action may be brought in the name of the

State if the State has failed to commence an action. See also Vance v. Offices of

Thurston Countv Comm'rs, 117 Wn. App. 660, 670, 71 P.3d 680 (2003) (a

plaintiff can bring a citizen's action under former RCW 42.17.400 only if
"authorities fail to act after receiving notice of possible violations."); Crisman v.

       9The trial court did not reach this argument in BIAW's motion for summary judgment.
                                             24
No. 66439-5-1 Consolid. w/No. 66737-8-1/25

Pierce Countv Fire Protection Dist. No. 21. 115Wn. App. 16, 22, 60 P.3d 652

(2002) (citizen enforcement action may be brought "only after notice to and

failure by the attorney general and the prosecuting attorney to act."). A "citizen's

action" refers to "any of the actions .. . authorized under this chapter." RCW

42.17A.765(4). The statute permits the following actions:

       (1) The attorney general and the prosecuting authorities of political
       subdivisions of this state may bring civil actions in the name of the
       state for any appropriate civil remedy, including but not limited to
       the special remedies provided in RCW42.17A.750.

       (2) The attorney general and the prosecuting authorities of political
       subdivisions of this state may investigate or cause to be
       investigated the activities of any person who there is reason to
       believe is or has been acting in violation of this chapter, and may
       require any such person or any other person reasonably believed to
       have information concerning the activities of such person to appear
       at a time and place designated in the county in which such person
       resides or is found, to give such information under oath and to
       produce all accounts, bills, receipts, books, paper and documents
       which may be relevant or material to any investigation authorized
       under this chapter.

       (3) When the attorney general or the prosecuting authority of any
       political subdivision of this state requires the attendance of any
       person to obtain such information or produce the accounts, bills,
       receipts, books, papers, and documents that may be relevant or
       material to any investigation authorized under this chapter, he or
       she shall issue an order setting forth the time when and the place
       where attendance is required and shall cause the same to be
       delivered to or sent by registered mail to the person at least
       fourteen days before the date fixed for attendance. The order shall
       have the same force and effect as a subpoena, shall be effective
       statewide, and, upon application of the attorney general or the
       prosecuting authority, obedience to the order may be enforced by
       any superior court judge in the county where the person receiving it
       resides or is found, in the same manner as though the order were a
       subpoena. The court, after hearing, for good cause, and upon
       application of any person aggrieved by the order, shall have the
       right to alter, amend, revise, suspend, or postpone all or any part of

                                         25
No. 66439-5-1 Consolid. w/No. 66737-8-1/26

       its provisions. In any case where the order is not enforced by the
       court according to its terms, the reasons for the court's actions shall
       be clearly stated in writing, and the action shall be subject to review
       by the appellate courts by certiorari or other appropriate
       proceeding.

RCW42.17A.765(1-3).

       The issue before us is what constitutes "action" by the State. Utter and

Ireland contend that because the AG's lawsuit named only BIAW-MSC, not

BIAW, Utter and Ireland were free to file a lawsuit against BIAW. BIAW contends

that under the statute's plain language, so long as the State files a lawsuit (which

it did here, against BIAW-MSC) based on any allegations in a citizen's notice

letter, the citizen may not bring an action.

       There are few cases addressing when a citizen's action under RCW

42.17A.765 may be brought. In one such case, EFF, the Evergreen Freedom

Foundation filed an administrative complaint against the Washington Education

Association (WEA) with the AG, alleging various violations of the Public

Disclosure Act, former chapter 42.17 RCW, in WEA's efforts opposing two

statewide initiatives in the 1996 general election, jd. at 592, 594. We noted that

EFF was "free to file a citizen's lawsuit on the issues that either the [PDC] or the

AG did not act on." jd. at 594. We concluded that where the PDC acted on

certain allegations against WEA by filing an administrative action based on those

allegations, those specific allegations could not be included in EFF's citizen's

action. What we did not have occasion to decide in EFF is whether the AG or the

PDC "fail[sj to commence an action" under RCW 42.17A.765(4) when it takes

                                          26
No. 66439-5-1 Consolid. w/No. 66737-8-1/27

action under RCW 42.17A.765(2) or (3) but declines to bring a civil action under

subsection (1).

       Where a "citizen's action" refers to any of the actions authorized under

chapter 42.17A RCW, we think it logical that an "action" by the AG or the PDC

also refers to any of the actions authorized under RCW42.17A.765. Thus, we

conclude that if the State takes an action under RCW42.17A.765—such as

completing an investigation and obtaining information under subsection (2)—

within the 45-day period under subsection (4)(a)(i) or the ten-day period under

subsection (4)(a)(iii), a citizen's action may not be brought. To hold otherwise

would mean that even where the State has thoroughly investigated an allegation

and determined it to be without merit, a citizen action could still be filed in the

State's name. In other words, as we observed in EFF, "every watchdog group

would be able to demand that the PDC find the watchdog's allegations

meritorious or the watchdog could sue in superior court." IcL at 609.

       Here, on July 25, 2008, Utter and Ireland sent a 45-day notice letter to the

State in which they alleged that BIAW and BIAW-MSC qualified as political

committees under both the contribution and expenditure prongs. The same day,

the AG forwarded the letter to the PDC for it to investigate Utter and Ireland's

allegations. Utter and Ireland sent a ten-day notice letter on September 9, 2008.

By September 11, the PDC had completed an investigation and issued a "Report

of Investigation" regarding its findings and conclusions. On September 19, the

                                          27
No. 66439-5-1 Consolid. w/No. 66737-8-1/28

AG filed suit against BIAW-MSC. Utter and Ireland filed their lawsuit against

BIAW on October 6.

       As to the allegations against BIAW under the contribution prong, the PDC

determined that the contributions in question had actually been received by

BIAW-MSC. See CP at 66. The PDC concluded that the evidence supported the

allegation that BIAW-MSC committed "multiple apparent violations of RCW 42.17

by failing to register as a political committee and report the contributions it

solicited, received and retained from its local associations in 2007, and by failing

to report expenditures to ChangePAC in 2008 with the contributions received."

CP at 59. Regarding the allegations against BIAW under the expenditure prong,

the PDC noted that it had reviewed BIAW's revenues and expenditures for 2006,

2007, and the first six months of 2008. The PDC concluded that BIAW "does not

solicit or receive contributions to support or oppose candidates or ballot

propositions, and does not contribute to candidates or political committees."10 CP
at 69. Based on the results of PDC's investigation and report, the AG filed a

lawsuit against BIAW-MSC in Thurston County but decided not to file a lawsuit

against BIAW.

        The State took an action against BIAW under RCW 42.17A.765 when it

caused the PDC to investigate the allegations that BIAW was a political

        10 We recognize that the PDC'sconclusion that BIAW did not make any expenditures to
further electoral political goals appears to conflictwith our determination that the evidence
(BIAW's tax Form 990) creates an issue of fact as to whether BIAW was a political committee
under the expenditure prong. We note, however, that it is still unclear whether any of the "political
expenditures" in BIAW's Form 990 constituted electoral expenditures; as we noted, BIAW simply
has not provided the evidence to clarify what this money was spent on. The PDC may have
determined that none of the political expenditures constituted electoral expenditures, or it may not
have relied on the Form 990 that is in the record before this court.
                                                 28
No. 66439-5-1 Consolid. w/No. 66737-8-1/29

committee and then declined to file a lawsuit based on the PDC's conclusion that

BIAW did not receive contributions or make expenditures to further electoral

political goals and was not a political committee. While a citizen's action should

be permitted where the State refuses to investigate or determine the merit of a

citizen's complaint, to permit a citizen to bring a lawsuit where the State has

investigated the allegations or caused them to be investigated, determined them

to lack merit, and decided it will not bring an action is inconsistent with the notion

that the citizen's action is brought "in the name of the state."

                          Cross-Appeal of Attorney's Fees

       BIAW sought attorney's fees from Utter and BIAW for bringing a citizen's

action "without reasonable cause" under RCW 42.17A.765(4)(b). It also sought

an award of fees against the State, claiming fees were due under RCW

42.17A.765(5) for the State's failure to intervene in the action.

       A trial court's denial of a motion for attorney's fees is reviewed for abuse

of discretion. Highland School Dist. No. 203 v. Racy. 149 Wn. App. 307, 312, 202

P.3d 1024 (2009). "Discretion is abused when it is exercised on untenable

grounds or for untenable reasons." Id. (citing State ex rel. Carroll v. Junker, 79

Wn.2d 12, 26, 482 P.2d 775 (1971)).

       First, BIAW sought fees from Utter and Ireland under RCW

42.17A.765(4)(b), which provides:

       If the person who brings the citizen's action prevails, the judgment
       awarded shall escheat to the state, but he or she shall be entitled to
       be reimbursed by the state of Washington for costs and attorneys'
       fees he or she has incurred. In the case of a citizen's action that is

                                          29
No. 66439-5-1 Consolid. w/No. 66737-8-1/30

       dismissed and that the court also finds was brought without
       reasonable cause, the court may order the person commencing the
       action to pay all costs of trial and reasonable attorneys' fees
       incurred by the defendant.

The purpose of this provision is "to prevent frivolous and harassing lawsuits."

EFF, 111 Wn. App. at 615 (internal citation omitted). "Frivolous" lawsuits and

actions "without reasonable cause" have been defined as those that "cannot be

supported by any rational argument on the law or facts." Bill of Rights Legal

Foundation v. Evergreen State College, 44 Wn. App. 690, 696-97, 723 P.2d 483

(1986) (applying RCW 4.84.185, providing for attorney's fees in actions that are

"frivolous and advanced without reasonable cause"). "[Ajllegations that, upon

careful examination, prove legally insufficient to require a trial are not, for that

reason alone, frivolous." Id. (quoting Hughes v. Rowe, 449 U.S. 5, 101 S. Ct.

173, 178, 66 L Ed. 2d 163 (1980)).

       We conclude the trial court did not abuse its discretion in denying BIAW's

fee request. BIAW cites the following evidence that Utter and Ireland's lawsuit

was brought without reasonable cause: (1) their claims were precluded by the

AG's action against MSC; (2) the evidence indicated that the actions at issue

were those of MSC; (3) the PDC and AG determined their claims lacked merit

and declined to pursue claims against BIAW; (4) the urgency of the suit was

manufactured to disrupt the campaign of and generate negative publicity

regarding Rossi; (5) Utter and Ireland were motivated by a desire to punish BIAW
for political speech they did not like; and (6) their litigation tactics unreasonably

increased the cost of litigation.

                                           30
No. 66439-5-1 Consolid. w/No. 66737-8-1/31

       These reasons do not demonstrate an abuse of discretion by the trial

court. The first involves a disputed legal issue that the trial court did not resolve

given the basis of its decision. The second reason continues to be disputed by

the parties on appeal. The third does not show that the lawsuit was without a

reasonable basis because it is apparent that Utter and Ireland disagree with the

conclusions of the PDC and the AG. As for the fourth and fifth reasons, Utter and

Ireland's motives and concerns in filing suit, do not factor into whether they had

reasonable cause to bring the lawsuit or whether it was frivolous. Nor does the

standard take into consideration a plaintiff's litigation tactics.

       BIAW also claims the trial court abused its discretion in denying its request

for attorney's fees from the State under RCW 42.17A.765(5), which provides:

       In any action brought under this section, the court may award to the
       state all costs of investigation and trial, including reasonable
       attorneys' fees to be fixed by the court. Ifthe violation is found to
       have been intentional, the amount of the judgment, which shall for
       this purpose include the costs, may be trebled as punitive
       damages. Ifdamages or trebled damages are awarded in such an
       action brought against a lobbyist, the judgment may be awarded
       against the lobbyist, and the lobbyist's employer or employers
       joined as defendants, jointly, severally, or both. If the defendant
       prevails, he or she shall be awarded all costs of trial, and may be
       awarded reasonable attorneys' fees to be fixed by the court to be
       paid by the state of Washington.

An award of fees pursuant to RCW42.17A.765(5) is discretionary. San Juan

Countv v. No New Gas Tax, 160 Wn.2d 141, 165, 157 P.3d 831 (2007).

       BIAW contends fees were due to it because the AG failed to intervene

despite concluding that Utter and Ireland's claims were barred. Utter and Ireland

                                           31
No. 66439-5-1 Consolid. w/No. 66737-8-1/32

point out the State was never given notice of BIAW's motion for attorneys' fees,

let alone given an opportunity to appear and contest such motion.

       We agree with Utter and Ireland. The State was not a party to this action,

and BIAW cites no authority to support the proposition that the State must pay

costs and fees in a case where it does not intervene and the defendant prevails.

Furthermore, it is speculative to suggest the trial court would have dismissed this

case in the event that the State had intervened.

       Furthermore, we deny BIAW's request for attorney fees on appeal under

RAP 18.9 and RCW 4.84.185. We do not agree that Utter and Ireland's appeal is

frivolous.

       Affirmed.

WE CONCUR:                                                          >
                                                                        &£X

         6^,X                                      V^KW^ >i
  ORDER GRANTING RESPONDENT'S MOTION FOR RECONSIDERATION,
 WITHDRAWING OPINION FILED OCTOBER 29, 2012; AND SUBSTITUTING
                                     OPINION

        On October 29, 2012, this court filed its unpublished opinion in the above-

entitled action. Respondent/cross-appellant has moved for reconsideration. The

court has taken the matter under consideration and has decided to grant the

motion for reconsideration.

                                         32
No. 66439-5-1 Consolid. w/No. 66737-8-1/33

       IT IS HEREBY ORDERED that the respondent/cross-appellant's motion

for reconsideration is granted;

       IT IS FURTHER ORDERED that the unpublished opinion of this court filed

in the above-entitled action on October 29, 2012 be withdrawn and that the

attached opinion be substituted in its place.

                                         33