Public Utility District No. 1 v. State of Washington and Peter Goldmark

FILED
MAY 7,2013
In the Office of the Clerk of Court
W A State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
PUBLIC UTILITY DISTRICT NO.1 OF ) No. 29121-9-111
OKANOGAN COUNTY, a municipal ) Consolidated with
corporation, ) No. 29123-5-111
)
Respondent! )
Cross Appellant, )
)
v. )
)
STATE OF WASHINGTON, PETER )
GOLDMARK, Commissioner of Public )
Lands, )
)
Respondent! ) PUBLISHED OPINION
Cross Appellant, )
)
ood )
)
CONSERVATION NORTHWEST, a )
nonprofit corporation, )
)
Appellant, )
)
and )
)
CHRISTINE DAVIS, a single person, )
TREVOR KELPMAN, a single person, )
DAN GEBBERS and REBA GEBBERS, )
husbood ood wife, ood WILLIAM C. )
No. 29121-9-III; No. 29123-5-III
PUDv. State
WEAVER, custodian for Christopher C. )
Weaver, a minor, )
)
Respondents, )
KULIK, J. - More than 15 years ago, the Okanogan County Public Utility District
No.1 (PUD) began the process required to construct a new transmission line and
substation between Pateros and Twisp in the Methow Valley. Following a decade of
environmental review and litigation, PUD obtained an environmental impact statement
(BIS). Next, PUD needed to obtain easements over the proposed land. PUD negotiated
with approximately 85 percent of the property owners for easements on their land.
Ultimately, PUD filed a petition for condemnation against the remaining property owners.
This included the State, l which owned school trust lands that were required for the
project.
Conservation Northwest (CNW), a group engaged in conservation activities, filed
a motion to intervene. The court granted CNW's motion. Both CNW and the State filed
motions for summary judgment, arguing that PUD lacks the authority to condemn school
trust land. The State stipulated to the entry of the order on public use and necessity,
which addressed the narrow issues of whether the transmission line project was a public
1 We refer to the following parties collectively as the "State:" Christine Davis,
Trevor Kelpman, Dan Gebbers, Reba Gebbers, William Weaver, Peter Goldmark, and the
2
No. 29121-9-III; No. 29123-5-III
PUDv. State
use and whether the easements sought were reasonably necessary for that use.
The court denied the State's and CNW's motions, granted summary judgment in
favor of PUD, and entered findings of fact, conclusions of law, and an order on public use
and necessity.
CNW appealed, challenging the order of summary judgment, in addition to the
order on public use and necessity. PUD then cross appealed, challenging the trial court's
order granting intervention to CNW. The State also appealed the summary judgment
order, contending that PUD had no statutory authority to condemn the State trust lands at
issue here.
We conclude that the State trust lands may be condemned as a matter oflaw. We
affirm summary judgment in favor of PUD and the denial of summary judgment to the
State and CNW. Given that we affirm the trial court's order on the PUD's condemnation
authority, we need not address the PUD's cross appeal challenging CNW's limited
intervention.
FACTS
Introduction. In 1889, Washington became a state. At that time, the federal
government granted to Washington approximately three million acres of land for
State of Washington.
3
No. 29121-9-III; No. 29123-5-III
PUDv. State
educational purposes and the support of common schools. Enabling Act, ch. 180,
§§ 10, 11,25 STAT. 676 (1889). The lands consisted of sections 16 and 36 of each
township in Washington. Id. Section 11 of the Enabling Act reserved these lands for
"school purposes only" and set forth certain restrictions on their sale and lease to ensure
that the lands would derive to the sole benefit of Washington schools. Id. This concern is
echoed in the Washington Constitution. The Constitution provides that all "public lands
granted to the state are held in trust for all the people" and restricts the manner in which
such trust lands may be disposed. CONST. art. XVI, § 1.
The Department of Natural Resources (DNR) is the state agency charged by the
legislature with the management of these lands. In 1957, the management responsibilities
were consolidated in DNR, which was created to provide effective and efficient
management of these state lands. RCW 43.30.010, .030. Peter Goldmark, the elected
Commissioner of Public Lands (Commissioner), serves as the administrator ofDNR. The
Commissioner is a member of the Board of Natural Resources that establishes policies
regarding the appropriate management of state lands and resources. RCW 43.30.205,
.215.
4
No. 29121-9-III; No. 29123-5-III
PUDv. State
DNR has been granted the exclusive statutory authority and discretion to lease trust
lands for various purposes, including commercial, agricultural, and recreational uses.
RCW 79.13.010.
In 1996, Okanogan PUD proposed a new transmission line to improve electrical
service to the citizens of Methow Valley. PUD sought to construct the transmission line
and substation between Pateros and Twisp (hereinafter the "project,,). 2
From the initial planning for the project in 1996, the project has been subject to
extensive scrutiny. Gebbers v. Okanogan County Pub. Util. Dist. No.1, 144 Wn. App.
371,376, 183 PJd 324, review denied, 165 Wn.2d 1004, 198 PJd 511 (2008). As part of
the review, PUD and the U.S. Forest Service prepared a draft EIS seeking input from
citizens, environmental groups, and governmental agencies. Fifteen alternatives were
identified and six alternatives and a no-action alternative were approved for
consideration. PUD conducted two public hearings, held several public meetings, and
responded to over 400 public comment letters. Id. A final EIS was released in March
2006, and PUD made its selection later that month. Id.2A lengthy discussion of the project is contained in this court's opinion in Gebbers
v. Okanogan County Pub. Util. Dist. No.1, 144 Wn. App. 371, 183 PJd 324, review
denied, 165 Wn.2d 1004, 198 P.3d 511 (2008).
5
No. 29 12 l-9-III; No. 29l23-5-II1
PUDv. State
Following 10 years of environmental review, the superior court and this court
affinned PUD's decisions regarding the project and the sufficiency of the final EIS. Id. at
393. We held that the environmental effects of the project were adequately disclosed,
discussed, and substantiated in the fmal EIS. We also held that PUD did not act
arbitrarily and capriciously in selecting the transmission line route. Id. The Supreme
Court denied review. Gebbers, 165 Wn.2d at 1004.
PUD negotiated the easements required for the project with approximately 85
percent of the property owners along the transmission line route, but eventually filed
eminent domain proceedings against the remaining owners, including the State. The State
lands in question are school trust lands managed by the DNR. PUD filed its amended
petition for condemnation on April 14, 2010.
At summary judgment on the condemnation petition, CNW argued that the
proposed Pateros-Twisp transmission line would bisect the largest contiguous publicly
owned shrub-steppe habitat in the Methow Valley and would have multiple adverse
environmental impacts, including the introduction of noxious weeds, fragmentation of
wildlife habitat, increased fire risk, and exacerbating erosion and sedimentation.
The State argued that it leased these lands for cattle grazing to generate money for
trust beneficiaries and to preserve this land as a part of the trust corpus for the benefit of
6
No. 29121-9-111; No. 29123-5-111
PUDv. State
future generations. To this end, the State had entered into enforceable leases for the use
of these parcels and had issued pennits to allow for cattle grazing on certain parcels. In
total, the proposed Pateros-Twisp transmission line would cross state trust lands that are
subject to five active grazing leases and two grazing pennit range areas. These leases and
pennits actively generate income to benefit Washington schools.
However, the leases on the property generate less than $3,000 annually for the
school beneficiaries, not including DNR administrative costs. PUD's proposed easements
pass over no more than an estimated 4 percent of the area of anyone lease and as little as
0.02 percent for one of the leased areas. PUD modified the project to eliminate all
pennanent road construction within the project.
Intervention. Prior to the hearing on public use and necessity, CNW filed a motion
to intervene as a respondent in support of the State. It is undisputed that CNW has no
legal or equitable property interest in the trust lands. CNW states: "The issue at stake in
this litigation ... directly affects Conservation Northwest's ability to continue its work as
a representative and protector of state trust land and its ability to protect its own interests
as an organization involved in land conservation." Clerk's Papers (CP) at 603. Despite
opposition by PUD, the superior court granted limited intervention under CR 24.
7
No. 29121-9-111; No. 29123-5-111
PUDv. State
Motions for Summary Judgment. Following intervention, both CNW and the State
filed separate motions for summary judgment, arguing that the PUD does not have the
authority to condemn school trust lands. PUD also filed a motion for summary judgment.
The court rejected this statutory argument and concluded that PUD has the express
authority to condemn school trust lands under RCW 54.16.020 and .050. The court also
rejected the contention that school trust lands cannot be subject to condemnation because
they are dedicated to a public use.
The trial court entered orders denying summary judgment to CNW and the State,
and granting summary judgment to PUD on the issue of condemnation authority.
Because the State did not otherwise oppose an order on public use and necessity, the court
also entered its "Findings of Fact, Conclusions ofLaw, and Order on Public Use and
Necessity." CP at 14-18.
Appeals. CNW filed a notice of appeal challenging the summary judgment in
PUD's favor, as well as the order on public use and necessity. PUD then cross appealed
the order granting intervention to CNW. The Attorney General declined to appeal the
trial court's decision despite the Commissioner's request that it do so. Subsequently, the
State filed a contingent notice of appeal of the order denying summary judgment and the
order on public use and necessity. Later, the Washington Supreme Court ruled that the
8
No. 29121-9-III; No. 29123-5-III
PUD v. State
Attorney General was required to prosecute an appeal on behalf of the Commissioner.
Goldmark v. McKenna, 172 Wn.2d 568, 259 P.3d 1095 (2011). The State then continued
this appeal with special counsel.
ANALYSIS
After the PUD filed its condemnation petition, the State and CNW filed separate
motions for summary judgment arguing that PUD does not have the authority to condemn
the school trust lands. The State concedes that PUD has the statutory authority to
condemn, but the State argues that the school trust lands in question are not subject to
condemnation because they are already devoted to a particular use by law. CNW argues
that chapter 54.16 RCW does not grant PUD express authority to condemn. CNW
abandoned this argument on appeal. CNW adopts the State's arguments. CNWargues
that state school lands are dedicated to a public use as a matter of law.
This court reviews the trial court's summary judgment orders de novo. Moeller v.
Farmers Ins. Co., 173 Wn.2d 264,271,267 P.3d 998 (2011). We engage in the same
inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853,860,93
P.3d 108 (2004).
The property in dispute is designated school trust land. Significantly, chapter 1,
section 6(e) of the LAWS OF 1931, codified at RCW 54.16.050, specifically authorizes
9
No. 29121-9-III; No. 29123-5-III
PUDv. State
public utility districts to condemn school lands for transmission lines. RCW 54.16.050
reads, in part, that a public utility district
may take, condemn and purchase, purchase and acquire any public and
private property, franchises and property rights, including state,
county, and school lands, and property and littoral and water rights,for
... transmission lines, and all other facilities necessary or convenient.
(Emphasis added.)
The PUD statute itself does not contain any limitation on the type of state land that
may be condemned. RCW 54.16.050. However, the definition of "state lands" in the
public lands act, Title 79 RCW, excludes lands "devoted to or reserved for a particular
use by law." RCW 79.02.01O(14)(h).3 The critical issue here is whether these school
lands are dedicated to a particular purpose or use and, therefore, are not subject to
condemnation.
A. Dedicated to a Public Purpose. On appeal, the State argues that all school
trust lands are dedicated to a public purpose and are, therefore, per se exempt from
condemnation.
The State's argument is not persuasive for several reasons. First, the public lands
act defines "state lands" as including school trust lands "that are not devoted to or
We refer to the current version ofRCW 79.02.010; subsequent amendments
3
renumbered the sections and were not substantive.
10
No. 29121-9-III; No. 29123-5-III
PUDv. State
reserved for a particular use by law." RCW 79.02.010(14)(h). This means that not all
school lands are so reserved or there would be no need for the qualifier. Second, the
State's interpretation would render meaningless the many statutes that specifically allow
local government to condemn state and school trust lands. See, e.g., RCW 8.12.030
(cities and towns); RCW 53.34.170 (port districts), and RCW 54.16.050 (public utility
districts).
Finally, the State's argument ignores Washington Supreme Court precedent. In
Roberts v. City o/Seattle, 63 Wash. 573, 574, 116 P. 25 (1911), the city of Seattle
instituted an action to condemn a 30-foot strip of university grounds. The court
concluded that no provision in the Enabling Act or the Constitution provided that school
lands could not be sold. Id. at 575. The court held that the fact that school trust lands are
devoted to the purpose of financing education was insufficient to exempt the property
from condemnation. Moreover, the court stated:
It is also argued that the land taken was already devoted to a public
use-that of education-and therefore cannot be taken for another public
use. There is nothing in the record to indicate that the 30-foot strip ofland
in question is actually in use by the university, and there is nothing to
indicate that the taking of the strip of land will impair the use of the land
remaining. On the other hand, the record shows that the remaining land
will be benefited. Under this condition it may be taken.
Id. at 576.
11
No. 29121-9-III; No. 29123-5-III
PUDv. State
Dedication to a public use reserves the land from subsequent sale. Contrary to the
assertions of the State, dedication to a public use requires more than simply putting the
property to a productive use. The Washington Supreme Court has described dedication
as: (1) dedication by act of the 1egislature;4 (2) "platted, dedicated, and reserved" land for
a public use;5 (3) segregating the land from the public domain and appropriating it to the
public by "due dedication,'.6 and dedication by some "official act or declaration.,,7 Most
significantly, the Supreme Court held that devotion to the purpose of education is
insufficient to prevent condemnation. Roberts, 63 Wash. at 576.
The State reads State v. Jefferson County, 91 Wash. 454, 157 P. 1097 (1916) to
hold that sovereign lands cannot be condemned. However, Jefferson County, which did
not involve trust lands, held that the authority to sell or condemn sovereign lands must not
be presumed, but must be expressly conferred by statute. See Jefferson County, 91 Wash.
4 State v. Jefferson County, 91 Wash. 454,455-56, 157 P. 1097 (1916) (waterway
permanently reserved from sale by statute).
5 Id. at 455.
6 City ofTacoma v. Taxpayers ofTacoma, 49 Wn.2d 781, 797,307 P.2d 567(1957), rev'd on other grounds, 357 U.S. 320, 78 S. Ct. 1209,2 L. Ed. 2d 1345 (1958).
While this case did not explain how the land was dedicated, the case stated that the land
was "dedicated."
7 City ofTacoma v. State, 121 Wash. 448, 452, 209 P. 700 (1922). PUD argues
that "dedicated to a public use" is the functional equivalent of "devoted to or reserved for
a particular use by law." See RCW 79.02.010(14)(h).
12
No. 29121-9-III; No. 29123-5-III
PUDv. State
at 458-59. And the PUD condemnation statute expressly allows for the condemnation of
school lands. RCW 54.16.050.
Since Roberts, the Supreme Court has continued to approve the condemnation of
school trust lands, and other types of trust lands, even though they exist for the purpose of
serving various trust beneficiaries. See City ofSeattle v. State, 54 Wn.2d 139, 147,338
P.2d 126 (1959); City ofTacoma v. State, 121 Wash. 448,453,209 P. 700 (1922). The
State argues that Roberts, City ofTacoma, and City ofSeattle are erroneous. The trial
court disagreed, and so do we.
In City ofSeattle, the city of Seattle instituted a condemnation proceeding to
acquire state school and capitol building lands for use in its proposed Tolt River aquifer.
City ofSeattle, 54 Wn.2d at 141. The court concluded that the city had the power to
condemn state property that was not dedicated to a public use. Id. at 147. In City of
Tacoma v. Taxpayers ofTacoma, 49 Wn.2d 781, 801,307 P.2d 567 (1957), rev 'd on
other grounds, 357 U.S. 320, 78 S. Ct. 1209, 2 L. Ed. 2d 1345 (1958), the court
concluded that the city lacked the statutory authority to condemn state lands previously
dedicated to a public use. State lands not dedicated to a public use are subject to
condemnation. City ofSeattle, 54 Wn.2d at 147. Here, the school lands are not dedicated
to a public use and are, therefore, subject to condemnation.
13
No. 29121-9-III; No. 29123-5-III
PUDv: State
B. Reservation from Sale. As stated above, under RCW 79.02.010(14)(h), school
trust lands are reserved if they are "devoted to or reserved for a particular use." In City of
Seattle, the court found that the capitol building trust lands-which are ofthe same
character as school trust lands-were not devoted to or reserved for a particular use by
law:
It is admitted by the state in this action that the capitol building
lands which the city of Seattle seeks to condemn are not devoted to or
reserved for a particular use but are subject to sale. If the legislature had
intended to exempt such state lands from condemnation, it would seem that
it would have expressly so limited the term "state lands," as used in
RCW 8.12.030.... This the legislature did not see fit to do, and the realtor
suggests no reason why such a limitation should be inferred.
City ofSeattle, 54 Wn.2d at 147.
In other words, reservation from sale is critical to determining whether public
lands have been reserved for a particular purpose. In Fransen v. Board ofNatural
Resources, state forest lands were found to be reserved for a particular purpose by law
because they are'" forever reserved from sale.'" Fransen v. Bd ofNatural Res., 66
Wn.2d 672,673,404 P.2d 432 (1965) (quoting former RCW 76.12.120, recodified as
RCW 79.22.050 (Laws of2003, ch. 334, § 220)). Jefferson County explained that
dedicated land is '" severed from the mass of public lands, [so] that no subsequent law, or
proclamation, or sale would be construed to embrace it, or operate upon it.' " Jefferson
14
No. 29121-9-III; No. 29123-5-III
PUDv. State
County, 91 Wash. at 459 (quoting State v. Whitney, 66 Wash. 473, 488, 120 P. 116(1912».
School lands are subject to sale. The lands at issue here are not devoted to or
reserved for a particular use by law. Moreover, the school trust lands here are not
dedicated to a public use. The State cannot show that the trust lands at issue have been
dedicated to a public use. Likewise, the State cannot argue that these trust lands are
dedicated to a public use simply because they may be actively managed by DNR.
The fact that the State leased the trust lands for grazing does not reserve those
lands for a particular use by law. Even trust lands subject to grazing leases shall not be
sold during the life of the lease. RCW 79.11.290. And here, the specific leases involved
reserve the State's right to sell the property, reserving the right to sell upon 60 days'
notice.
In short, the sale of leased school trust lands is simply limited to certain conditions,
but these conditions are insufficient to fall within the statutory language of "devoted to or
reserved for a particular use by law." RCW 79.02.010(14)(h).
Furthermore, leased lands are not devoted to a particular use by RCW 79.13.370.
This provision merely states that once a grazing lease is issued, the lessee may only use
the land for the purposes set forth in the lease. Id.15
No. 29121-9-111; No. 29123-5-111
PUDv. State
C. Trusts. CNW argues that school lands are exempt from condemnation because
they are public trusts.
The Washington Enabling Act and Constitution impose an express trust and
corresponding trust management principles on state trust lands, including the land at issue
here. County o/Skamania v. State, 102 Wn.2d 127, 132,685 P.2d 576 (1984) (citing
Washington Enabling Act § 11,25 STAT. 676 (1889), amended by Act of August 11,
1921,42 STAT. 158, and Act of May 7, 1932,47 STAT. 150; CONST. art. XVI, § 1); see
1996 Op. Att'y Gen. No. 11 (Question 1); O'Brien v. Wilson, 51 Wash. 52,97 P. 1115(1908); United States v. 111.2 Acres o/Land, 293 F. SUpp. 1042, 1048-49 (E.D. Wash.
1968), aff'd, 435 F.2d 561 (9th Cir. 1970).
In 0 'Brien v. Wilson, the Washington Supreme Court rejected the application of
adverse possession statutes to common school trust lands, holding that '" [Washington]
accepted the trust, and by its Constitution solemnly covenanted with the United States to
apply the granted lands to the sole use of its schools according to the purpose of the grant,
and prohibited the sale of any portion of the granted land except at public sale.'"
O'Brien, 51 Wash. at 56-57 (quoting Murtaugh v. Chicago, Milwaukee & St. Paul Ry.,
102 Mn. 52,55, 112 N.W. 860 (1907)).
16
No. 29121-9-III; No. 29123-5-III
PUDv. State
In short, the examination of the language of Washington's Enabling Act and
Constitution reveal that state trust lands are administered under trust management
principles to benefit public schools as the trust beneficiaries and are subject to statutory
controls and authority.
Regardless of the trust's purpose, the legislature granted PUDs the authority to
condemn state trust lands. RCW 54.16.050 authorizes the condemnation of state and
school lands.
A statute shall not be interpreted in a manner that renders a provision meaningless
or creates an absurd or strained result. Pierce County v. State, 144 Wn. App. 783, 852,
185 P.3d 594 (2008). The State and CNW assert that the PUD does not have authority to
condemn trust land generally or the trust land here. But following this logic, RCW
54.16.050 would have meaningless terms that would create an absurd result.
D. Easements. Regardless of whether a sale is at issue, by the State's own
admission, easements can be granted over trust lands for grazing. Here, PUD does not
seek fee ownership of school trust lands. In addition to PUD's express condemnation
authority under RCW 54.16.050, the legislature also reserved PUD's right to condemn
easements over state lands in DNR's land management statutes:
The foregoing sections relating to the acquiring of rights-of-way and
overflow rights through, over and across lands belonging to the state, shall
17
No. 29121-9-III; No. 29123-5-III
PUDv. State
not be construed as exclusive or as affecting the right of municipal and
public service corporations to acquire lands belonging to or under control of
the state, or rights-of-way or other rights thereover, by condemnation
proceedings.
RCW 79.36.580.
The State contends the trust lands at issue are dedicated to a public use because
they are actively managed by DNR. But all school trust land is managed by DNR in some
capacity as required under state law. See, e.g., RCW 79.10.090 (requiring periodic
analysis of all trust lands).
E. Compatibility. The State maintains that the courts look only at dedication to a
public use when determining whether condemnation is allowed.
The State misinterprets several precedents in making this assertion. For example,
in City o/Tacoma the condemnation at issue involved the right to divert water from a fish
hatchery and the right to condemn a 250-foot strip of the school lands. City o/Tacoma,
121 Wash. at 450. In analyzing whether Tacoma could condemn the right to divert waters
flowing past the fish hatchery, the court explained:
This property is now devoted to a public use, and if the proposed diversion
ofthe waters of the North fork would destroy this public use, or so damage
it as to preclude its successful operation, our inquiry would end here.
Id. at 453.
18
No. 29121-9-III; No. 29123-5-III
PUDv. State
The court ultimately found that the public use would not be destroyed and that
diversion would even benefit the hatchery. Id. Citing Roberts, the Supreme Court held
that condemnation was permissible, despite the fact that the property was already devoted
to a public use. Id. The court also held that Roberts authorized the condemnation of the
250-foot strip of school trust lands. Id.PUD points out, and the State does not dispute, that the easements will not destroy
the current uses of the State's trust land. In fact, PUD takes the position that the proposed
easements will benefit the economic purpose behind the trust lands by providing revenue
through compensation for the easements while still allowing the continuation of grazing.
Significantly, the State does not challenge its own leases, which contain specific
provisions that address the condemnation of all or part of the leased land "by any public
authority." CP at 240 (section 10.06). These provisions not only recognize that
condemnation can occur, they allow for continuation of the leases after condemnation if
the parties desire.
When managing the grant lands, DNR may consider only those factors consistent
with ensuring the economic value and productivity of the federal grant land trusts. See,
e.g., 1996 Op. Att'y Gen. No. 11 (Question 5(c». The condemnation of the easements
will not negatively impact the economic productivity of the trusts.
19
No. 29121-9-III; No. 29123-5-111
PUDv. State
F. Conclusion. We affinn the denial of summary judgment to the State and
CNW and affinn the order on public use and necessity. Given our disposition in
favor of the PUD, we need not address its cross appeal related to the trial court's
grant of limited intervention to CNW.
WE CONCUR:
~I
20