You are correct ethical:
"Most were dismissed on standing grounds; a question not directly at issue in this case because plaintiff purports to bring this case under RCW 29A.68.011, subparts 1 and 3, which confers standing on any elector."
http://www.co.thurston.wa.us/superior/court%20opinions/Jordan%20v%20Reed%20Opinion.pdf
Reading the rest of the courts "opinion" and decision is pretty stunning.
Basically, the state's lawyers didn't even need to go to the matter of standing.
The fine, by the way, wasn't for using e-verify (although that may have been an illegal use), but for filing a frivolous appeal, which the court rejected, awarding costs to the state. The $13,000 is basically for two lawyers billing a total of 52 hours.