Washington State moves to Dismiss case involving Corruption and Nepotism.

Why Washington State’s Motion to Dismiss Should Fail: The Emerald City Collective Case

By Sophia Veracity

Washington State is attempting to dismiss a discrimination lawsuit by Emerald City Collective on procedural grounds, arguing the case is too old to be heard. That argument ignores both the law and the facts on the record. When examined under Washington and federal civil rights standards, the State’s motion to dismiss is legally weak and should fail.

At the heart of the dispute is a simple question: when did Emerald City Collective discover that it was harmed by unlawful discrimination? The State insists the clock started in 2017, when the nonprofit was denied a marijuana retail license. Emerald City Collective argues the clock started in 2022, when it first learned—through public meetings and records—that the Washington State Liquor and Cannabis Board (LCB) quietly gave certain applicants “other ways to apply.”

That distinction matters, and the law is clear.

The Discovery Rule Controls the Timeline

Federal civil rights claims brought in Washington, including claims under 42 U.S.C. §§ 1981 and 1983, borrow the state’s three-year statute of limitations for personal injury actions under RCW 4.16.080(2). Ordinarily, that period begins when a plaintiff knew or reasonably should have known of the injury.

But courts do not stop the analysis there. Washington and federal courts apply the discovery rule, which delays the start of the limitations period until the plaintiff knew or reasonably could have known not only that it was harmed, but that the harm was caused by unlawful conduct. The Washington Supreme Court affirmed this principle in Green v. A.P.C., 136 Wn.2d 87 (1998), and the Ninth Circuit reinforced it in Lukovsky v. City & County of San Francisco, 535 F.3d 1044 (9th Cir. 2008), and Bagley v. CMC Real Estate Corp.

A license denial, standing alone, is not proof of discrimination. Discrimination is revealed through disparate treatment, preferential access, and unequal application of rules. Emerald City Collective alleges it did not—and could not—know that white-owned applicants were being given alternative application pathways until 2022, when those practices surfaced through public forums and records, including statements from LCB officials contrasting past rigid processes with more flexible approaches.

If discovery occurred in 2022 and the lawsuit was filed in 2024, the case is timely under settled law. The State’s attempt to anchor the statute of limitations to the 2017 denial ignores the reality that the discriminatory mechanism itself was undisclosed.

Objective Evidence of Concealment, Not Delay

Courts are skeptical of late-filed claims only when plaintiffs had access to the relevant facts earlier and failed to act. That is not what is alleged here. According to Emerald City Collective, the LCB never disclosed that certain applicants were given “other ways to apply.” There was no public notice, no transparent process, and no indication that staff were selectively guiding applicants behind closed doors.

The issue came into sharper focus in 2022, during public LCB forums on social equity licensing, where officials, including Director of Licensing Rebecca Smith (a named defendant), discussed flexible eligibility criteria and contrasted them with historical practices. These revelations support the conclusion that discriminatory conduct was inherently undiscoverable in 2017 and only became apparent years later. Under these circumstances, the discovery rule and equitable tolling are not loopholes—they are safeguards against concealed discrimination, as recognized in Merck & Co. v. Reynolds, 559 U.S. 633 (2010).

The Case Background: A Pattern of Exclusion

Emerald City Collective, a Black-owned nonprofit led by Mike Asai, operated as one of Seattle's early medical cannabis dispensaries starting in 2011. Under Washington's 2015 Cannabis Patient Protection Act (ESSB 5052), which reconciled medical and recreational markets, Emerald applied for a retail license in 2016. It was designated Priority 2—behind repeat applicants who swept all available spots—and its application was administratively withdrawn in 2017.

The priority system was facially neutral, but Emerald alleges it was administered with systemic racial bias: white applicants received undisclosed flexibilities, arbitrary approvals, or preferential treatment, while Black-owned entities like Emerald were rigidly excluded. This echoes allegations in prior cases, such as Manning v. Barr (W.D. Wash. 2020), involving similar claims of discrimination in Washington's cannabis licensing.

Emerald finally received a license in 2023 but seeks damages for years of lost opportunity in a billion-dollar industry where Black ownership remains disproportionately low.

The State's Motion: Prioritizing Procedure Over Accountability

In its September 2025 motion to dismiss, the State argues the claims are untimely, implausible, and barred by failure to exhaust administrative remedies. It incorporates 2016-2017 documents showing Emerald knew of its denial and insists no tolling applies.

Yet, as noted in legal reporting on the filing, these arguments overlook the concealed nature of the alleged bias. Emerald's October 2025 response abandons weaker claims and emphasizes diligence: investigation began in May 2022, post-public revelations, making the 2024 filing timely.

Failure to Exhaust Administrative Remedies Does Not Bar the Claim

The State also argues Emerald cannot sue because it failed to appeal the 2017 denial administratively. That misunderstands the lawsuit's nature.

Emerald challenges a pattern of racial discrimination and systemic bias, not a routine licensing decision. Washington courts hold that independent constitutional claims are not waived by skipping administrative appeals (see R.L. v. Department of Social & Health Services). A 2017 appeal could not have uncovered hidden preferential treatment—misconduct unknown at the time.

Why Dismissal Is Unlikely

At the motion-to-dismiss stage, courts accept plaintiff's allegations as true and assess only plausibility (Ashcroft v. Iqbal). Emerald has plausibly alleged discovery in 2022, backed by concrete facts like public LCB discussions on licensing flexibilities.

With the motion noted for an October 2025 hearing before Judge James L. Robart and no ruling as of December 2025, denial—at least in part—is the probable outcome, allowing discovery into 2016 records.

The Stakes

This case is not about reopening an old denial. It is about accountability in an industry built on reforming past injustices from the War on Drugs, which disproportionately harmed communities of color. Former LCB Director Rick Garza acknowledged in 2020 engagements that the system created an "unequal playing field," excluding many.

If agencies can conceal favoritism and run out the clock on excluded parties, civil rights protections ring hollow. Courts exist to prevent that.

For these reasons, Washington State’s motion to dismiss should fail, and Emerald City Collective should have its day in court.