I-1183 Challenge Update

By Hunter O. Ferguson, Stoel Rives

With a little more than two months remaining before I-1183 is scheduled to take full effect on June 1, 2012, the implementation of the initiative will turn on whether the Cowlitz County Superior Court concludes that section 302 of the initiative cannot be severed from the other provisions approved by voters last fall. On March 2, the Court entered partial summary judgment in Washington Association for Substance Abuse and Violence Provisions v. State, upholding all provisions of I-1183 except section 302, which requires that $10 million be spent annually on public safety programs from revenues raised through new alcohol license created by the initiative. The Court held that section 302 violates the single-subject rule of article II, section 19 of the Washington Constitution because section 302 is a general spending measure unrelated to the regulation of the distribution and sale of liquor and therefore has no rational unity with the subject expressed in the title of the bill.  But after concluding that severance of section 302 would not frustrate the underlying purpose of I-1183 concerning privatization and deregulation, the Court declined to strike down I-1183 in its entirety. Instead, it will hold further hearings on the issue of severability commencing on March 19.

The issues to be resolved at the scheduled hearings are (a) which party bears the burden of showing that it cannot be reasonably believed that Washington voters would have passed I-1183 without section 302 and (b) whether, in fact, it cannot be reasonably believed that Washington voters would have passed I-1183 without section 302. On the burden of proof issue, the Court is expected to rule that the plaintiffs bear the burden, as there is a presumption under Washington law in favor of severability. See State v. Harris, 12 Wn. App. 906, 918, 99 P.3d 902 (2004). On the substantive question of voter intent, the plaintiffs likely will have a difficult time of proving that voters would not have approved I-1183 without section 302 because courts view the inclusion of a severability clause in a statute as and indication that voters would have approved the remainder of the statute without the invalid portion. I-1183 contained such a severability clause in section 304.

As far as the plaintiffs’ other arguments attacking the constitutionality of I-1183, the Court rejected them. Although the Court agreed with the plaintiffs that the licensing fee scheme created by I-1183 is more appropriately characterized as a tax, the word “fee” in the initiative’s title was not deceptive because the initiative explicitly provides that licensees will be required to pay to the state a percentage of their sales revenues. Regarding the plaintiffs’ other single-subject arguments, the Court ruled different provisions effecting a different deregulation of the distribution of spirits and wine, provisions concerning alcohol advertising, and a repeal of purposive policy statements under the prior regulatory scheme all bore a rational unity to the underlying subject of a comprehensive revision to the regulation of liquor distribution and sales. Therefore, such provisions do not violate the single-subject rule.

Whatever the outcome of the upcoming hearings on severability, there likely will be an appeal concerning the constitutionality of I-1183, and we will continue to analyze the issues as this litigation wends it way through the courts.

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