Majority of justices unswayed by group's argument it was protecting members from harassment

The Washington State Supreme Court has reinstated an $18 million fine against the Consumer Brands Association for failing to disclose donors in a 2013 campaign against a state ballot measure, but left the door open for a possible reduction in the penalty.

CBA—formerly the Grocery Manufacturers Association—was fined $6 million by a Washington state judge in 2016 for violating state campaign finance disclosure laws. The judge then trebled the penalty to $18 million after concluding the association had intentionally set out to withhold information about its campaign donors.

A state appeals court later upheld the verdict but lowered the fine back to $6 million, saying it could not be proven that CBA intentionally set out to break the law. (The ballot measure CBA opposed, which would have required labels on foods with genetically modified ingredients, was shot down by voters.)

The state supreme court heard oral arguments on the case last year. CBA's attorneys asked for the verdict to be overturned, saying association members had the right to seek anonymity on political matters to avoid death threats and other harassment.

Five of the supreme court's nine justices rejected that argument in their April 16 decision, finding the evidence from CBA that businesses were targeted for their opposition to GM labeling weak at best. They also concluded the argument was an "after-the-fact" justification as the association had only made passing mentions of reprisals at the summary judgement stage of the case.

As for the $18 million fine, the majority found the appeals court applied too narrow a definition on the meaning of intentional in its rationale for lowering the penalty. However, they did not reach a conclusion on a separate question on whether the base $6 million penalty violated protections against excessive fines found in both the U.S Constitution and Washington state constitution. They noted the state had requested an "unprecedented" fine in the case.

The justices sent the excessive penalty question back to appeals court, cautioning "our affirming the trial court's statutory authority to impose a treble penalty in this case does not necessarily mean that either the base penalty or the treble penalty that was actually imposed is constitutional."

Still, Washington State Attorney General Bob Ferguson celebrated the ruling in a statement, calling it "a tremendous victory for fair and transparent elections."

"GMA's unlawful conduct was intentional—and unprecedented," he said. "They concealed from Washingtonians $14 million contributed by their members to win an election in Washington state. My philosophy is straightforward—penalties must be more than a cost of doing business for those, like GMA, who intentionally violate our transparency laws."

CBA is a much different organization now than four years ago, when the initial verdict was handed down. In addition to the name change, it has a new CEO, a smaller staff and a narrower focus on consumer-facing products.

Current CBA CEO Geoff Freeman declined to comment on the specifics of the case when contacted by CEO Update, saying it was focused on the industry response to the COVID-19 pandemic.

"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," he said. "We couldn't be more proud of the men and women going to work to make that possible every day."