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Emerald Enterprises, LLC v. Clark County

Court of Appeals of Washington, Division 2

March 13, 2018

CLARK COUNTY, a Washington State County, Respondent.

          MELNICK, J.

         At issue in this case is whether Clark County can lawfully ban the retail sale of marijuana within its unincorporated areas.[1] Emerald argues that a Clark County ordinance (Ordinance) prohibiting the retail sale of marijuana in its unincorporated areas violates article XI, section 11 of the Washington Constitution because it forbids what Washington's Uniform Controlled Substances Act (UCSA) permits, thwarts the state statutory scheme's legislative purpose, and exercises power the UCSA did not confer on local governments. Emerald also contends the Ordinance is either expressly or impliedly preempted by chapter 69.50 RCW. We uphold the Ordinance.


         I. Background

         On November 6, 2012, Washington voters approved Initiative 502 (1-502). LAWS OF 2013, ch. 3. The expressed purposes of 1-502 included allowing law enforcement to "focus on violent and property crimes, " generating "new state and local tax revenue for education, health care, research, and substance abuse prevention, " and taking "marijuana out of the hands of illegal drug organizations." Initiative 502, LAWS OF 2013, ch. 3, § 1.

         The legislature subsequently codified 1-502 within Washington's Uniform Controlled Substances Act (UCSA).[2] Former ch. 69.50 RCW (2014). As amended, the UCSA legalized[3] the limited production, processing, and sale of recreational marijuana to persons twenty-one years and older. Former RCW 69.50.360 (2014). It also created a regulatory state licensing system through the Washington State Liquor and Cannabis Board (Board). Former RCW 69.50.325-.369 (2014).

         The Board adopted rules governing marijuana sales. Former ch. 314-55 WAC (2014) (adopted pursuant to statutory authority provided at RCW 69.50.345). In October 2013, the Board established the application requirements for marijuana retailer licenses. Former WAC 314-55-015 to -050, -079, -081 (2014). After determining the maximum number of stores per county, the Board held a lottery for licenses from prospective retailers. Former WAC 314-55-081(1) (2014). Before granting any license, the Board conducted mandatory background checks, including any history of administrative violations. Former WAC 314-55-020(3) (2014). Cities, counties, or other authorities could object to a business receiving a license. Former WAC 314-55-020(1), -050(9) (2014). However, the final decision to issue a retail license remained with the Board. Former WAC 314-55-050 (2014).

         In January 2014, at the Board's request, the Attorney General's Office (AGO) issued an opinion regarding the authority of local governments to ban marijuana businesses.[4] The AGO opinion analyzed both field and conflict preemption, and opined that state law did not preempt local government action in this area. According to the AGO, local governments retained the authority to enact local bans on marijuana sales.

         On May 27, 2014, Clark County (County) passed an Ordinance, which banned, as applicable here, the retail sale of recreational marijuana within unincorporated Clark County. Clark County Code (CCC) 40.260.115.[5] It forbade the sale of retail recreational marijuana so long as the federal government listed marijuana as a controlled substance. CCC 40.260.115(B)(4). It did not do the same for medical marijuana. CCC 40.260.115(B)(3).

         Notwithstanding the Ordinance, Emerald applied to the Board for a retail license to sell marijuana in the unincorporated area of Clark County. The County objected. RCW 69.50.33 l(7)(b). Nonetheless, in September 2014, the Board issued Emerald's license for the retail sale of recreational marijuana.

         II. Procedural Facts

         A. Cowlitz County Proceeding

         Emerald challenged the Ordinance and sought declaratory and injunctive relief in Cowlitz County Superior Court. Emerald argued that the UCSA preempted the Ordinance. Emerald and the County filed cross motions for summary judgment on the preemption issue. The AGO intervened on behalf of the County. In December 2014, the superior court ruled that the UCSA did not preempt the Ordinance. The trial court granted summary judgment in favor of the County and the AGO. This appeal followed.[6]

         B. Clark County Proceeding

         With the 2014 appeal stayed, Emerald moved ahead with development plans. In September 2015, Emerald applied for a building permit to make improvements to the retail space it rented in a commercial building in the County. Emerald described the proposed use as '"General retail . . . . Business will sell novelties, crafts, collectibles, and general merchandise.'" CP (49395-1) at 24. On December 2, 2015, the County issued Emerald a building permit authorizing the planned improvements.

         Emerald then began Board-licensed retail sales of marijuana in the County in December 2015. By January 2016, the County became aware of Emerald's activities and ordered Emerald to cease all sales of marijuana and marijuana products. The County also revoked Emerald's building permit.

         Emerald appealed to the Clark County Hearing Examiner (Examiner), who ruled in favor of the County. The Examiner found that Emerald sold marijuana in violation of the General Commercial Zoning District, and had obtained its building permit based on a misrepresentation. Pursuant to the Land Use Petition Act (LUPA), [7] Emerald appealed to the Clark County Superior Court, which affirmed the Examiner. This appeal followed.


         State Law Does Not Preempt The Ordinance

         Emerald's consolidated appeal asserts a single assignment of error involving preemption, i.e. that the "trial court erred in finding that [the Ordinance] does not irreconcilably conflict with state law." Br. of Appellant at 2. Specifically, Emerald argues that the Ordinance violates article XI, section 11 of the Washington Constitution because it irreconcilably conflicts with the UCSA. In addition, Emerald contends that the Ordinance is either expressly or impliedly preempted by I-502 and the UCSA. We disagree.

         A. Legal Principles

         We review "an order granting summary judgment de novo, engaging in the same inquiry as the trial court." Weden v. San Juan County, 135 Wn.2d 678, 689, 958 P.2d 273 (1998). Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c).[8]

         Emerald argues the Ordinance is preempted by state law and thus unconstitutional. Under article XI, section 11 of the Washington Constitution, counties may make and enforce all regulations that do not conflict with state law. Constitutional preemption challenges are reviewed de novo. Watson v. City of Seattle, 189 Wn.2d 149, 158, 401 P.3d 1 (2017).

         B. County Police Powers Under the Washington Constitution

         In Washington, local governments wield significant regulatory powers. See WASH. CONST. art. XI, § 11. They derive from Article XI, section 11 which states, "Any county, city, town or township may make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws." This provision, known as "home rule, " presumes that local governments are autonomous. See Watson, 189 Wn.2d at 166. "The scope of [a county's] police power is broad, encompassing all those measures which bear a reasonable and substantial relation to promotion of the general welfare of the people." State v. City of Seattle, 94 Wn.2d 162, 165, 615 P.2d 461 (1980).

         We therefore presume that the County has the regulatory authority to enact the Ordinance and the County's ordinance is valid unless preempted. Wash. Const, art. XI, § 1; Cannabis Action Coal. v. City of Kent, 183 Wn.2d 219, 225-26, 351 P.3d 151 (2015); State v. Kirwin, 165 Wn.2d 818, 825, 203 P.3d 1044 (2009); HJS Dev., Inc. v. Pierce County, 148 Wn.2d 451, 477, 61 P.3d 1141 (2003). Because enacted ordinances are presumed constitutional, Emerald has the burden of showing unconstitutionality beyond a reasonable doubt. Pierce County v. State, 150 Wn.2d 422, 430, 78 P.3d 640 (2003); Weden, 135 Wn.2d at 693.

         C. The USCA Does Not Irreconcilably Conflict with the Ordinance

         We consider an ordinance to be consistent with article XI, section 11 unless it either "prohibits what the state law permits, " "thwarts the legislative purpose of the statutory scheme, " or "exercises power that the statutory scheme did not confer on local governments." Dep't of Ecology v. Wahkiakum County, 184 Wn.App. 372, 378, 337 P.3d 364 (2014). Emerald argues that the Ordinance irreconcilably conflicts with the UCSA for all three reasons, and is therefore unconstitutional under article XI, section 11. We disagree.

         1. The Ordinance Does Not Prohibit What State Law Permits

         Emerald contends that the Ordinance prohibits what the UCSA permits. We disagree.

         A local law "must yield" to a state statute on the same subject matter if'"a conflict exists such that the two cannot be harmonized.'" Weden, 135 Wn.2d at 693 (quoting Brown v. City of Yakima, 116 Wn.2d 556, 561, 807 P.2d 353 (1991)); WASH. CONST., art. XI, § 11. The focus of the inquiry is on the substantive conduct proscribed by the two laws. For example, Kirwin held that an ordinance may punish littering more harshly than state law because both prohibit the same underlying conduct. 165 Wn.2d at 826. No conflict exists "if the provisions can be harmonized." Parkland Light & Water Co. v. Tacoma-Pierce County Bd. of ...

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