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Originally published Monday, March 19, 2012 at 2:57 PM

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Judge rules liquor initiative is constitutional; foes plan appeal

Reversing course, a Cowlitz County judge says the voter-approved, liquor-privatization measure does not violate one-subject rule. An appeal to the state Supreme Court is likely.

Seattle Times business reporter

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Reversing his earlier decision, a Cowlitz County judge Monday ruled that a liquor-privatization measure voters overwhelmingly approved in November does not have two subjects, and is therefore constitutional.

"Although no one likes to say they were wrong, and judges least of all, I think I was previously," Superior Court Judge Stephen Warning told a tiny courtroom packed with lawyers representing the state; Costco Wholesale, which wrote the voter initiative; and liquor distributors, which opposed it.

The judge's ruling came in a lawsuit backed by distributors and others who want to invalidate Initiative 1183, claiming it is unconstitutional because it addresses more than one subject. The case now is likely headed to the state Supreme Court, possibly in a matter of weeks.

Time is crucial, because the state is unwinding itself from the liquor business and is to stop selling spirits June 1.

A little more than two weeks ago, Warning issued a ruling in the suit that was confusing to all sides. He said the voter measure had two subjects — liquor and $10 million in funding for public safety not directly tied to liquor — but he mostly upheld the initiative anyway and called for a trial to determine whether inclusion of that $10 million caused voters to approve a measure they otherwise would have rejected.

On Monday, David Burman, an attorney with Perkins Coie in Seattle, argued on behalf of Costco and other I-1183 supporters that the judge should reconsider that decision. He said voters know that liquor and safety are related and that the measure did not have two subjects after all.

Michael Subit, the attorney for distributors and others, argued that the judge's earlier finding of two subjects in the initiative made the measure unconstitutional.

"Most of what we heard today [from the state and Costco] we've heard before," he said.

Burman apologized to the judge for not making his points clear earlier.

Subit said he will file an appeal directly to the Supreme Court, bypassing an intermediary appeals court. He said the high court could hear the case in "a matter of weeks" if it wants to.

The state Liquor Control Board is already holding an auction that would give private parties the right to operate each of the board's 167 state-run liquor stores, which are to close in late May.

New owners and retailers with large footprints, like Costco, can start selling liquor June 1 under the initiative.

Subit said the judge's decision surprised him. "Motions for reconsideration are rarely granted," he said. "We think the judge had it right the first time."

Karin Moore, co-general counsel for the Wine & Spirits Wholesalers of America, said, "We're disappointed, but this is just the first step."

Mary Tennyson, the senior state attorney general who argued for the constitutionality of Initiative 1183, said, "I think he made the right decision."

The state is legally required to defend voter initiatives in court and was joined by attorneys for a coalition of businesses that backed I-1183. They included Costco, which donated a record $19 million to help pass the measure. (It initially contributed more, but an unspent portion was refunded.)

Reacting to the judge's ruling Monday, Bruce Beckett, vice president of government affairs for the Washington Restaurant Association, an initiative supporter, said, "We're obviously delighted the judge revisited his previous decision and look forward to the implementation [of I-1183] continuing."

The opposition, led by wine and spirits wholesalers, raised $12 million to fight I-1183. Beer wholesalers and others outspent Costco to defeat a similar initiative in 2010 that voters rejected.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com. On Twitter @AllisonSeattle.

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