Summary Judgment Denied in Bassett Case, But Four-Part Test Issue Survives to Hearing

On January 8, 2016, the Plaintiffs’ summary judgment motion in the matter of Magdalena Bassett, et al., vs. Dep’t of Ecology was argued before Judge Gary Tabor of the Thurston County Superior Court. Bassett is a declaratory judgment action challenging the validity of the Dungeness River Basin instream flow protection rule. The complaint alleges that Ecology exceeded its statutory authority in several respects, including failure to allocate water according to the maximum net benefits to the public, as required by the Water Code and the Water Resources Act of 1971. Judge Tabor allowed only one legal issue to be briefed on summary judgment — whether the four-part test for issuance of new water rights was required before Ecology adopts a minimum instream flow water right by rule. The Supreme Court opinion in Swinomish Tribal Community v. Ecology two years earlier implied that the four-part test was required for instream flow rules, because the same statute that the Court held required the four-part test for reservations adopted by rule (RCW 90.03.345) also applies equally to minimum instream flows — both are appropriations with priority dates that are adopted by rule rather than by application for permits. After hearing arguments by Tom Pors on behalf of Plaintiffs, Stephen North on behalf of Ecology, and Dan Von Seggern on behalf of the Intervenor Center for Environmental Law & Policy (CELP), Judge Tabor denied Plaintiffs’ motion for summary judgment but kept the issue alive for a hearing on the full administrative record.

Judge Tabor stated from the bench, “[I]n ruling that I do not find that there is an absolute legal requirement that there be the four-part test, that does not necessarily imply that a four-part test might not be appropriate in this case.” Thus, he denied Ecology’s request for summary judgment that the four-part test is never required for adoption of minimum flow rules as a matter of law. Judge Tabor considered arguments that the entire statutory scheme for water rights appropriation and instream flow protection required some sort of public interest evaluation, such as “maximum net benefits to the public” before all available waters in a basin were appropriated for instream flows. He stated further, “[S]o maximum benefits test, that certainly may be an issue in the administrative review, and there’s some suggestion that based on that rule the four-part test might be required.”

A summary judgment ruling in favor of Plaintiffs would have resulted in the invalidation of the Dungeness Rule because it is uncontested that Ecology did not make four-part test findings before adopting minimum flows in the Dungeness Rule. In fact, Ecology has never made four-part test findings or conducted a maximum net benefits test before adopting any of its 29 instream flow protection rules, many of which have the unintended effect of closing basins to new appropriations for domestic, municipal or other uses without rigid water for water replacement mitigation.

A hearing on the administrative record in the Bassett case is expected before the end of the year. Please contact Tom Pors if you have questions about the Dungeness Rule challenge or challenging other instream flow protection rules that exceeded Ecology’s statutory authority.

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How to Fix the Water Availability Train Wreck

Last summer I presented a paper at the LSI Water Law in Washington seminar on problems with the status quo relating to water availability laws and regulations in Washington State. The paper proposed potential solutions to the rural water supply dilemma and water rights permitting breakdown after the Swinomish v. Ecology decision. Months later, the Department of Ecology and stakeholders in the Rural Water Supply Strategies Task Force briefly debated the idea I suggested of defining impairment specifically for minimum flows and closed streams and using a values-based standard for determining impairment and evaluating mitigation. Predictably, environmental groups and native American tribes balked at any new legal standards and defended the status quo, in which most minimum flow regulations have the unintended effect of closing entire basins to new appropriations of water and mitigation options are extremely limited. It is no easy task to fix problems four decades in the making, especially after the State’s own solutions have been rejected by the Supreme Court. These are, unfortunately, polarizing issues.

I recently updated my solutions paper to reflect the Supreme Court’s decision in the Foster v. Ecology and City of Yelm decision on October 8, 2015, which tossed out OCPI as authority not only for out-of-kind mitigation but for any non-temporary use of water. Motions for reconsideration are still pending in that case, but it has an immediate impact on Ecology’s water rights permitting program and the rural water supply dilemma. You can read my paper concerning the Foster decision here.

I believe that the keys to solving these problems are recognizing that: (1) the status quo is not the best way to protect and enhance instream functions and values, and (2) the fundamental nature of minimum flow water rights differs from out-of-stream appropriations in so many important respects that impairment analysis and mitigation evaluation must be better matched to the purposes for which minimum flows are adopted in order to accomplish the goals of providing water for both fish and people. Much can be accomplished by interpreting the intent of groundwater provisions in existing instream flow rules. Impairment and water availability criteria must be developed that protect instream values instead of focusing only on proxy flow numbers that were established without considering the maximum net benefits for the public. This can be accomplished without retreating on the fundamental policy of protecting instream resources and without violating treaty rights.

Reasonable minds can differ on this subject. However, when the system of instream flow protection and water allocation for other purposes is broken, as it is now, stakeholders and the government need to consider workable alternatives to the status quo. It should not be about winners and losers in a regulatory battle for control of the public’s water. It is time to focus on how the public benefits most from both instream flow protection and reasonable use of water for growing populations. Until we correct the legal water availability issues related to the current one molecule impairment standard for minimum flow water rights, it’s the lawyers who will get the most benefit from the status quo.

You can download and read my updated solutions article here. Please feel free to comment on this blog or directly to the author.

UPDATE on OWL v. KGH: PCHB Won’t Budge on Need for Hearing

Following the PCHB’s July 31, 2014 order (see my August 19, 2014 post), all parties to the case filed a second set of motions in an attempt to avoid a complicated and uncertain hearing on the merits. In an order dated December 12, 2014, the PCHB refused the bait offered by both parties. Its reasons highlight the difficulty in using existing regulatory authorities to resolve the virtual closure of the state’s water supply to new uses as a result of the instream flow regulations adopted by Ecology.  For a discussion of those broader issues, see my article, “How Messed Up is Washington’s Water Allocation System after Swinomish Indian Tribal Community v. Ecology,” published earlier on this blog.

The respondents, Kennewick General Hospital (KGH) and Department of Ecology (Ecology), entered into a conditional stipulation that they were willing to modify the Report of Examination (ROE) to include an additional condition that KGH’s water right permit be subject to and incorporate the regulatory minimum flows at WAC 173-563-040. The stipulation was conditioned on the PCHB’s determination that there were no remaining issues of fact and its dismissal of the appeal, which the respondents sought via a renewed summary judgment motion. By conditioning the permit on both the existing instream flow regulations and the agreed mitigation package in the ROE, the respondents believed that there was no need for a hearing on the PCHB’s remaining issue after its original summary judgment ruling:

“Does the permit provide adequate conditions that will retain base flows to preserve the instream flow values enunciated in RCW 90.54.020(3), and to protect those values from impairment, considering cumulative impacts to the flows of the Columbia River from additional appropriations?”

Given the complexity of the PCHB’s construction of this issue for hearing, it is understandable that the respondents would try to find a cleaner and more certain approach. The PCHB’s issue as framed not only incorporated a new and untested standard (impairment of instream flow “values”) which it described as “unclear and ambiguous,” it also raised a number of potential appellate issues. Does Ecology or the PCHB have authority to consider cumulative impacts to streamflow beyond their basic duty to prevent impairment of senior water rights? Did the legislature mean something different by requiring protection of “base flows” and authorizing (but not requiring) the setting of minimum instream flows by rule? By agreeing to have its permit subject to the applicable instream flow regulations, the respondents assumed that there could no longer be impairment of those minimum instream flows.

The appellants, Okanogan Wilderness League (OWL) and Center for Environmental Law and Policy (CELP), opposed the respondents’ motion and filed their own cross-motion seeking alternative remedies. First, OWL and CELP asserted that if Ecology and KGH reached a settlement it mooted the case, therefore the PCHB was obligated to vacate its July 31, 2014 summary judgment order and remand the matter for processing a new water right decision that would be subject to the right of a new appeal. Alternatively, appellants asserted that if the PCHB denies the respondents’ motion and retains the case, it should issue a final judgment under CR 54(b) on the legal question whether Ecology has authority to utilize out-of-kind mitigation to address impairment of water rights. A CR 54(b) order allows an “interlocutory appeal” of a discreet claim while the remaining issues stay pending before the PCHB.

The PCHB rejected KGH and Ecology’s motion, essentially declaring that the impairment standard for the alternative process of WAC 173-531A-060 (mitigation through consultation) is not the same as (and may be greater than) the adopted minimum instream flows under Chapter 173-563 WAC. It did not help respondents’ renewed summary judgment argument that Ecology officials had earlier testified that the minimum instream flows were “obsolete” and that the mitigation through consultation process was designed to protect higher or different standards resulting from listings under the Endangered Species Act.

The PCHB also rejected appellants’ cross-motion on the basis that an appeal of the out-of-kind mitigation issue would require further factual development and consideration of a record that explains the scope of impairment, the scope and use of out-of-kind mitigation, and the relation between them.

The bottom line is that multiple legal issues and an “unclear and ambiguous” impairment standard remain to be resolved as this first appeal involving the mitigation through consultation process heads toward a hearing before the PCHB. The mitigation flexibility offered to water right applicants and fisheries managers in WAC 173-531A-060 (part of the John Day/McNary Pool regulation) is clearly complicated by the question of Ecology’s statutory authority to allow out-of-kind mitigation and the uncertain standard of what constitutes impairment of an “instream value” and how that impairment can be mitigated. The legislature could help water right applicants, Ecology, fisheries managers, and environmental organizations by defining these standards and/or clarifying Ecology’s authority. The reasons for such legislative action were outlined in my earlier articles.

 

OWL v. KGH: PCHB Decision Opens Door to New Impairment and Mitigation Standards

     The Pollution Control Hearings Board has ruled that the Washington State Department of Ecology has “implied authority” to allow out-of-kind mitigation for impacts to instream flows.[1] The Board’s carefully crafted ruling regarding its own jurisdiction also acknowledges Ecology’s authority to amend numeric instream flow rules and subsequently approve new appropriations without minimum flow conditions.

     The Board’s summary judgment ruling in OWL v. KGH rejected arguments by two environmental groups that would have extended last year’s Supreme Court ruling in Swinomish Indian Tribal Community v. Ecology[2] to water rights permitting decisions. Underlying the Board’s decision is its finding that minimum instream flows set by rule are “regulatory” and can be amended, whereas “base flows” are statutory and must be protected from impairment by new water right permits even if regulatory instream flows are made “inapplicable” to a class of water uses.

     While concluding that out-of-kind mitigation is not “per se unlawful,” the decision complicates what is expected to become one of Ecology’s principal fixes to water allocation regulatory problems in the post-Swinomish era. What precisely are “base flows” that must be protected from impairment and how do they differ from “minimum flows” set by regulation? How can one establish non-impairment of these base flows on a case-by-case basis, especially if future rule amendments bypass established minimum instream flows that the Supreme Court has described as water rights with priority dates that must be protected from impairment?

Click here for a complete copy of my article on the OWL v. KGH decision.

[1] Okanogan Wilderness League (OWL) and Center for Environmental Law and Policy (CELP) v. State of Washington Department of Ecology and Kennewick General Hospital (KGH), PCHB No, 13-146, Order on Motions for Summary Judgment (July 31, 2014).

[2] Swinomish Indian Tribal Community v. Ecology, 178 Wn.2d 571, 311 P.3d 6 (2013).

Court Upholds OCPI Finding for City of Yelm Water Right Permit

On May 8th, Judge Christine Schaller upheld a new water permit for the City of Yelm that was  based on what the Department of Ecology calls its “gold standard” for OCPI findings.  Judge Schaller ruled in favor of respondents City of Yelm and Department of Ecology and against appellant Sara Foster and intervenor Center for Environmental Law and Policy (CELP).  The Foster appeal contended that Ecology could not grant a water right based on the “overriding considerations of public interest” exception at RCW 90.54.020 after the Supreme Court’s decision in Swinomish v. Ecology,  which purported to narrow the scope of OCPI and prevent it from being used to impair adopted minimum instream flows.

In the first phase of this appeal before the Pollution Control Hearings Board, the Board’s OCPI analysis for the Yelm permit included twelve detailed factors and concluded that the regional mitigation plan that Yelm participated in met the statutory standard for allowing an impact to instream flow when the benefits of the proposal clearly outweighed its environmental harm.  Among the twelve factors were exhaustion of every feasible option to provide in-kind mitigation before turning to out-of-kind mitigation and consultation with stakeholders.

Judge Schaller ruled from the bench that the OCPI scenario in Swinomish (involving rulemaking to create reservations with no mitigation) was distinguishable from the scenario approved by Ecology and the Board, where approval of the permit application was based on a comprehensive mitigation plan.  An order to effectuate the ruling is being drafted.  While an appeal is possible and could bring the OCPI statute to the Supreme Court in another context, the ruling keeps open a narrow door for thoroughly and thoughtfully mitigated municipal water right applications.