Save the Date – July 25, 2017 LSI Water Law in Washington Seminar

Tom will be moderating a panel of distinguished speakers at this year’s LSI Water Law in Washington seminar on July 25, 2017 in Seattle. The panel topic is, “Local Water Resource Planning after the Hirst Decision, the evolving interplay between water resource planning under the Growth Management Act and state water law.” Other speakers scheduled to participate include Joe Mentor with the developer perspective, Rachel Pachal Osborne with the environmental perspective, Assistant AG Alan Reichman with the state government perspective, and Kittitas County Commissioner Paul Jewel with the local government perspective. Registrations are being taken online at: http://www.lawseminars.com/seminars/2017/17WATWA.php

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Upcoming Seminars and Speaking Engagements

Tom will be speaking at three upcoming seminars on water rights topics.

On Thursday, April 14, 2016, at 10:30 to 11:30 a.m., Tom will address the Washington Association of Sewer & Water Districts at the Yakima Convention Center in Yakima, Washington on the topic, “Water Availability and Permitting Issues.”

On Thursday, June 16, 2016, at 3:00 p.m., Tom will co-instruct on the subject “New Mitigated Water Rights,” at The Seminar Group’s “Water Rights in Central Washington” seminar in Wenatchee, Washington.

Law Seminars International has also invited Tom to co-chair this year’s Water Law in Washington seminar in Seattle. A date has not yet been set, but it will likely take place in late July. Tom also co-chaired this seminar last year.

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.

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.

2015 Water Law in Washington Seminar Agenda

I am very excited about co-hosting this year’s annual  Water Law in Washington seminar by Law Seminars International. We have a stellar line up of professional speakers and will cover numerous current issues of interest to water law practitioners, water users and resource managers. Beginning with an optional “Water Law 101” presentation on the fundamentals of water law, the conference will have a special focus on recent decisions addressing drought year water rights permitting and management, in-stream flow rules and the rural water supply dilemma, recent cases addressing the intersection of land use
and water rights law, and the role of science in water management.

The two-day conference will be held in Seattle on July 28 and 29, 2015.  Click here for a brochure and registration information.  I hope to see you there!

Supreme Court Upholds Constitutionality of Municipal Water Law (Again)

In what appears to have been an agonizing 6-3 decision by the Washington Supreme Court (it took over 20 months to issue a decision after oral argument), the municipal water law of 2003 (MWL)[i] has been upheld against an as-applied constitutional challenge.  The new decision in Cornelius v. Ecology[ii] resolves substantial uncertainty about the legal effect of the MWL as applied to water rights that meet the MWL’s statutory definition of “municipal water supply purposes” but were issued prior to 2003 with a “domestic” or “community domestic” purpose of use.

Appellant Scott Cornelius and others challenged decisions by the Department of Ecology approving several water right change applications by Washington State University, contending that most of WSU’s water rights were relinquished for nonuse prior to the MWL, and that “resurrection” of these relinquished rights violated separation of powers and due process. This was the first “as-applied” challenge to the MWL after the Supreme Court upheld the MWL against facial constitutional challenges in Lummi Indian Nation v. State, 170 Wn.2d 247, 241 P.3d 1220 (2010).

The key distinction between Justice Owens’ majority opinion and Chief Justice Madsen’s dissent is in their characterization of the nature of the problem resolved by the legislature in 2003, and the constitutionality of applying that resolution retroactively. To understand this distinction, it is necessary to review the history of water rights relinquishment law and the case that led to the MWL, Ecology v. Theodoratus, 135 Wn.2d 582, 957 P.2d 1241 (1998).

Washington’s water laws are based on the prior appropriation doctrine — “first in time is first in right.” This system focuses on the beneficial use of water as the measure of a water right and the means of perfecting those rights. However, many decades ago Ecology and its predecessor agency issued permits and certificates based on a user’s need and capacity rather than on actual beneficial use. This capacity approach, called “pumps and pipes,” was rejected by the Supreme Court in Theodoratus as the basis for perfecting a water right.[iii] The Court, however, stated that its decision did not involve “municipal water suppliers, which are treated differently under the statutory scheme. In 1967, the legislature adopted statutory relinquishment for nonuse of water without legal excuse for a period of five consecutive years. RCW 90.14.130 et seq.  Water rights that are “claimed for a municipal water supply purpose” are exempt from statutory relinquishment. However, despite the importance of this distinction between “municipal” and other purposes, the statutes did not define who qualified as a “municipal water supplier” or which uses qualified as “municipal water supply purposes.” This ambiguity particularly impacted water systems not owned by cities but that functioned liked municipal water systems, such as those owned by universities, water districts, public utility districts, cooperatives and homeowners associations, and privately-owned and regulated water service companies.

The uncertainty after Theodoratus concerning the validity of “pumps and pipes” certificates and relinquishment led to the legislature’s adoption of the MWL, which defined “municipal water supplier” and “municipal water supply purposes” and declared that water right certificates issued prior to September 8, 2003 for “municipal water supply purposes” based on system capacity were in good standing. The constitutionality of these provisions and others were challenged in Lummi Indian Nation. While the Court held in that case that the MWL did not facially violate separation of powers or due process, it left for another day whether the MWL would violate these constitutional provisions “as-applied” to the facts in a particular case. That case was Cornelius, which brings me back to the key distinction between the majority and dissenting opinions.

Justice Owens’ majority opinion concluded that the meaning of “municipal” in the context of water rights purpose of use and relinquishment was undefined and ambiguous prior to the 2003 MWL and constituted a “labeling problem” that the legislature sought to resolve in passing the MWL. She noted that prior to 1967, for instance, Ecology did not have a reason to be precise about distinguishing municipal and domestic uses, and could have issued domestic supply certificates to entities that functioned as municipal and vice versa, a situation that it recognized in the record relating to WSU. The majority refused to elevate “form over substance” and held that under the MWL, WSU is deemed to have always been a municipal water supplier. That construction of the MWL’s problem and solution led directly to the majority’s conclusion that separation of powers was not violated because it did not upset any adjudicated facts (there had been no finding prior to the MWL that WSU’s water rights were non-municipal or relinquished for nonuse). Similarly, the majority concluded that Cornelius’s due process rights were not violated because the MWL did not “resurrect” any senior water rights. Because WSU’s water rights were always “municipal” despite their label, they were always in good standing and the retroactive application of the MWL did not alter their status or priority compared to Cornelius’s junior water rights.

Chief Justice Madsen’s dissent did not recognize the existence of the same definitional ambiguity prior to the MWL, and would have found WSU’s rights already relinquished by nonuse because they were domestic, not municipal. That distinction is key because all of Cornelius’s constitutional claims stem from the concept that the MWL changed the status of WSU’s water rights from relinquished and invalid domestic rights to municipal rights in good standing. If the dissent had prevailed, the MWL as applied to the facts of the case would have violated separation of powers by retroactively altering the legal status of a water right, and would have violated Cornelius’s due process rights by resurrecting a senior water right with priority over Cornelius’s junior water right in a water-short basin.

The majority decision in Cornelius resolves a state-wide uncertainty affecting an unknown number of water rights issued prior to the MWL which meet the “municipal water supply purposes” definition, but which may have experienced a five-year or more nonuse period prior to 2003.  Such water rights can now be categorized as municipal and exempt from statutory relinquishment, with the result that communities dependent on such rights can rely on them for future growth (subject, of course, to availability and senior water rights).

Please call Tom Pors at (206) 357-8570 if you have any questions about the Cornelius case or municipal water rights in general. He can assess the scope, validity, and flexibility of your municipal water rights portfolio in light of the MWL and Cornelius decision. Click here to download a printable version of this article.

[i] Laws of 2003, 1st Spec. Sess., ch. 5. (2E2SHB 1338).

[ii] Cornelius v. Wash. Dept. of Ecology, Wash. State Univ., and Wash. Pol. Ctrl. Hearings Bd., Case No. 88317-3 (2015).

[iii] Theodoratus was the developer of a subdivision and private water system who contested an Ecology condition on approval of an extension to his water right permit that would measure his water right based on actual beneficial use rather than the capacity of his water system. The Court upheld the condition as the proper basis for certifying water rights.

Ecology Director Denies Petition to Repeal Skagit Instream Flow Rule

On January 15, 2015, Ecology Director Maia Bellon denied the latest petition to amend or repeal the 2001 Skagit Basin Instream Flow Rule (Chapter 173-503 WAC), which had been reinstated as a result of the Washington Supreme Court’s decision in Swinomish Indian Tribal Community v. Ecology. The petition was filed in NOvember 2014 by attorney Bill Clarke on behalf of a group of realtors, builders, farmers and the Just Water Alliance. The rationales of the petition were numerous, and included inconsistencies with the 1996 Skagit MOA and state statutes by prohibiting new permit-exempt wells in rural areas. In particular, the petition asserted that the Skagit Rule was damaging water resource management efforts around Washington State, that efforts to provide relief to Skagit Basin property owners through mitigation were being misspent, and that the mitigation effort “perpetuates a fundamentally flawed, unlawful, and unfair regulation.”

Director Bellon’s response perpetuates Ecology’s questionable interpretation of its obligations under the Water Resources Act (chapter 90.54 RCW) as requiring the protection of instream flows at levels higher than natural flows, which results in de facto closures of basins to new year-round consumptive uses of water, without first accounting for out-of-stream needs for human consumption and economic growth. In the Skagit, hundreds of rural property owners are in legal limbo with no valid water right for their homes and others cannot obtain building permits until mitigation is in place, which is not guaranteed. Director Bellon admitted that the situation in the Skagit is difficult, but stated that “[U]nder current law, we could not successfully develop a rule for the Skagit Basin that would create available water for future community growth in rural areas, without a high likelihood of being legally challenged.”

The January 15 letter contains a glimmer of hope for rural property owners in the Skagit. The petition also requested an alternative remedy that Ecology interpret the Skagit Rule as not requiring tributary-based mitigation for permit-exempt uses, and that compliance with the Rule will solely be based on measurement of impacts at the Skagit River main stem gauge in Mount Vernon. This would allow rural property owners in tributary basins to obtain building permits with permit-exempt well systems once a mitigation package for the main stem Skagit River is in place, a feasible project that is expected to be announced in the near future. Ecology agreed that a plain language interpretation of the Skagit Rule would allow junior permit-exempt groundwater uses that would not interfere with instream flows as measured at the Mount Vernon gauge. However, Director Bellon warns that such solutions may be challenged by third parties and would not meet the public interest test for applications that require permits under the Water Code.

With the Fox v. Skagit County case awaiting a final order, the ball is now in Skagit County’s court to determine whether this solution for permit-exempt groundwater uses should be implemented without further action by Ecology or third parties, including the Swinomish Tribe, potentially risking legal challenges against the County. The Petitioners may also challenge the validity of the Skagit Rule in court under the Administrative Procedure Act.