Exclusive: AGO speculated WA Supreme Court might ‘punt’ on millionaire’s tax

By TJ Martinell
The Center Square

Washington Attorney General’s Office officials described the state Supreme Court as “favorable a venue as we’re likely to get” to thwart a referendum on a new millionaire’s tax, according to emails between a former court clerk who works for the AGO and other staff.

Yet, Deputy Solicitor General Karl Smith, who clerked for the court from 2009 through 2012 according to his Linkedin profile, hypothesized that justices might also “punt” to the voters about whether to uphold the tax so they could avoid having to make the decision themselves, the emails show.

“Giving the People a chance to reject it by referendum might be an attractive option to justices who want to punt on the constitutional question,” Smith wrote to Solicitor General Noah Purcell in an April 7 draft response to Let’s Go Washington’s lawsuit filed against the Secretary of State’s Office after it rejected a referendum on the millionaire’s tax.

The Secretary of State’s Office emailed Wednesday afternoon to say they mistakenly released the records.

The “Office of the Secretary of State (OSOS) provided you with records in response to your Public Records Request No. 26-447,” the message said. “OSOS has since determined that certain attorney-client privileged documents were inadvertently included in the records provided.” The email requested that The Center Square delete and not report on the released records. But the news wire declined to do that because the records were newsworthy and expose behind the scenes actions about a significant issue that is of public interest to taxpayers.

One of the arguments contained in the draft document was that the court should reject hearing the case because “petitioners have a plain, speed, and adequate remedies at law.”

Smith wrote in the draft document to Purcell that “from your email, I understood you were disinclined to make this argument, noting the Supreme Court is as favorable a venue as we’re likely to get.”

The state Supreme Court ultimately ruled against Let’s Go Washington.

Attorney Joel Ard, who represented Let’s Go Washington in the case before the Supreme Court, said the court was wrong but it was not appropriate for the Attorney General’s staff to have these discussions.

“We’re still in the position where we think they (state Supreme Court) got it wrong,” he told The Center Square after the news wire described the documents it obtained. “It’s interesting to see the Attorney General politicizing the court.”

He added that “this isn’t the first case I’ve lost before the state Supreme Court, and of course I think they got all those wrong.”

The Citizen Action Defense Fund has filed a lawsuit against the millionaire’s tax, whose legal team includes former State Attorney General Rob McKenna and former State Supreme Court Justice Phil Talmadge.

CADF Executive Director Jackson Maynard said the emails show the importance of the coming election to fill open Supreme Court seats.

“It’s another peak behind the curtain,” Maynard told The Center Square after being read the emails. “The fact that they are viewing the current court as a ‘favorable venue’ for them I think is telling and highlights the fact that….the majority of the court is on the ballot is really going to be important.

“The line about the referendum and whether the court might be willing to essentially use a referendum as a way to avoid decision the constitutionality of the case, just shows that unfortunately this is more of a political question rather than an issue of ensuring that the right of the people to vote on legislation is upheld,” he added.

The Center Square requested an interview with the AGO to discuss the emails. Instead, AGO Deputy Communications Director Mike Faulk wrote in an email that the discussion was because of the court’s extensive rules on referendums.

This “was part of a preliminary discussion about legal strategy in a case that is now over,” Faulk wrote. “The state Supreme Court deals with far more questions about mandamus and referendum powers than any other court in the state. They are far more familiar with the governing legal principles, which is why our attorneys described it as a favorable venue.”

The Center Square recently reported that the AGO staff and the millionaire’s tax prime sponsor Senate Majority Leader Jamie Pedersen, D-Seattle, worked closely to draft the bill so that it would “force” the state Supreme Court to reconsider almost a century’s worth of legal rulings that income is property as defined in the state Constitution.

In emails obtained by The Center Square, Pedersen wrote that a key goal of the tax was to get the Supreme Court to overturn the 1933 Culliton decision, which ruled that progressive income taxes are illegal because they violate the state Constitution’s uniformity clause for property taxes based on their class. A 1930 voters pamphlet advocating for the 14th Amendment that added a definition of property into the Constitution states that the purpose for doing so was to make it possible to tax income from stocks and bonds at a separate rate than other types of property, such as land.

Other decisions since then have reaffirmed Culliton.

The rulings include:

Jensen v. Henneford (1936)Power, Inc. v. Huntley, (1951), in which the court declared “it is no longer subject to question in this court that income is property.”Kunath v. City of Seattle (2019)

The original draft of the millionaire’s tax did not include an emergency or necessity clause, which was added after Purcell recommended it to prevent a referendum. Purcell’s remarks via email were used by Let’s Go Washington as further evidence in their lawsuit that the bill was not necessary to enact the budget.

The Center Square reached out to the state Supreme Court’s Senior Communications Officer Lorrie Thompson by email and phone requesting an interview to discuss Smith and Purcell’s remarks, but did not receive a response.