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Lane v. Port of Seattle

Court of Appeals of Washington, Division 1

November 25, 2013

Arthur LANE; John Allerton, and Kenneth Gorohoff, Appellants,
PORT OF SEATTLE; King County; BNSF Railway Company; GNP RLY, Inc.; and City of Redmond, Respondents.

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David Florian Jurca, Bradley H. Bagshaw, Helsell Fetterman LLP, Seattle, WA, for Appellants.

Lori Marie Bemis, McGavick Graves, Tacoma, WA, James Edward Haney, Ogden Murphy Wallace, P.L.L.C., Paul J. Lawrence, Gregory J. Wong, Pacifica Law Group LLP, Ramer Bundlie Holtan Jr., David Nelson Bruce, Duncan Emerson Manville, Savitt Bruce & Willey LLP, Timothy George Leyh, Katherine See Kennedy, Calfo Harrigan Leyh & Eakes LLP, Randall Thor Thomsen, Seattle, WA, Maurice (MARTY) L. Brimmage, Lacy M. Lawrence, Benjamin L. Mesches, Haynes and Boone, LLP, Dallas, TX, for Respondents.


[178 Wn.App. 113] ¶ 1 The Port of Seattle purchased the Eastside Rail Corridor from Burlington Northern Santa Fe Railway Company (BNSF) for [178 Wn.App. 114] $81.4 million and sold portions

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to fellow respondents King County and the city of Redmond. Appellants contend the Port lacked statutory authority to make the purchase because the northern part of the corridor lies outside the port district and will not be used to run cargo to or from existing port facilities. We conclude the Port acted within its statutory powers.

¶ 2 In 2003, Burlington Northern announced its intention to sell the Eastside Rail Corridor, a 42-mile rail line that runs from Renton to Snohomish and includes a spur line running east to Redmond.

¶ 3 The main north-south line of the corridor was built in the late 1800s as a narrow, single-track line to move freight along the east side of Lake Washington. Then known as the Lake Washington Beltline, it provided freight service for nearly a century. The Redmond Spur, which began operating in the 1880s, was also built to move freight.

¶ 4 The southern portion of the corridor, between Renton and just south of Woodinville, is located entirely within King County, as is the Redmond Spur. The southern portion and the Spur are within the port district, the boundaries of which are coterminous with King County.

¶ 5 The northern portion of the corridor, running from just south of Woodinville to Snohomish, lies mostly in Snohomish County, outside the port district. At the north end, the tracks connect to the interstate rail line along which Burlington Northern transports freight to and from the Midwest over Stevens Pass. GNP Railway Inc. holds the right to transport freight from the interstate line to businesses located along the northern portion of the line between Woodinville and Snohomish. Currently, that freight traffic is intermittent and slow.

¶ 6 Burlington Northern decided to sell the corridor after determining that it was no longer economically viable for freight use due in part to increased maintenance costs and changing land use patterns that have brought about higher property values, causing industrial businesses to move elsewhere.

[178 Wn.App. 115] ¶ 7 Burlington Northern offered public entities the first crack at acquiring the Eastside Rail Corridor. In 2005, King County emerged as a potential buyer. The County was interested in preserving the corridor for transportation and trail uses and did not want to see it parceled out in a way that would interfere with those uses. In 2006, the County approached the Port about joining in the purchase.

¶ 8 In 2009, having obtained assurances from various public entities that they would contribute toward the purchase price, the Port entered into a purchase and sale agreement to buy the northern portion and the Redmond Spur from Burlington Northern for $81,449,000. Burlington Northern agreed to donate the southern portion to the Port. Both agreements closed on December 21, 2009, as a single, interdependent transaction with each agreement conditioned on the other. The transaction was also conditioned on federal approval of " railbank" status for the portions of the corridor inside King County. On the same closing date, the County and the Port signed an interlocal agreement whereby Burlington Northern would continue using the northern portion for freight service, and the Port would place the southern portion and the Spur into " railbanked status" under the National Trails System Act, known as the " Rails to Trails Act," 16 U.S.C. § 1247(d). Under the act, the railroad right-of-way can be converted to trail use as long as it remains preserved for future rail reactivation. The County agreed to assume responsibility as the interim trail user to develop and maintain the railbanked segments of the corridor.

¶ 9 Since the 2009 purchase, several public entities have paid the Port for parts of the corridor. Of the Port's initial outlay of $81.4 million, the sum of nearly $58 million has been recouped in this manner as of the date of our appellate record. In June 2010, the city of Redmond paid $10 million to purchase 3.9 miles of the Redmond Spur for regional light rail, utility, and infrastructure improvements. In December 2010, Puget Sound Energy paid $13.8 million for a utility easement along the length of the corridor. In April [178 Wn.App. 116] 2012, Sound Transit paid $13.8 million for a transportation easement in the southern portion and the Spur, plus a fee interest in a one-mile segment in Bellevue for the East Link light rail route. That same month, the

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Port sold an interest in a short section of the southern portion to the city of Kirkland for $5 million. Finally, King County agreed to pay the Port $15 million to purchase the southern portion for future commuter rail use and to obtain an easement in part of the northern portion. Each of these agreements includes a provision complying with the federal railbanking statute, meaning ownership is subject to future rail use.

¶ 10 Plaintiffs Arthur Lane, John Allerton, and Kenneth Gorohoff filed suit in July 2010 to invalidate the purchase of the northern portion and the Redmond Spur as an unlawful expenditure of taxpayer funds. They named the Port, Burlington Northern, King County, the city of Redmond, and GNP Railway, Inc., as defendants because each entity had acquired an interest in the corridor or could be adversely affected by rescission of the $81.4 million deal. They claim the Port lacked statutory authority to purchase the corridor. However, they seek to unwind only the Port's acquisition of the northern portion and the Spur. According to their complaint, the plaintiffs wish to leave undisturbed the donated southern portion of the corridor that King County plans to develop for trail use.

¶ 11 In a comprehensive and well-reasoned opinion issued on December 9, 2011, the trial court granted the defendants' motions for summary judgment, dismissing the plaintiffs' claims with prejudice. This appeal followed.

¶ 12 As a threshold issue, the Port asserts that the plaintiffs' case is barred because it was brought as a taxpayer challenge to property taxes and the plaintiffs failed to pay their taxes under protest, which is a statutory precondition for such a suit. RCW 84.68.020; Longview Fibre Co. v. Cowlitz County, 114 Wash.2d 691, 695, 790 P.2d 149(1990). This issue is moot. The plaintiffs dropped their initial requests for property tax refunds and now seek only [178 Wn.App. 117] declaratory relief and rescission of the purchase. The trial court did not err by hearing their challenge.

¶ 13 This court reviews summary judgment de novo. Tracfone Wireless, Inc. v. Dep't of Revenue, 170 Wash.2d, 273, 280-81, 242 P.3d 810 (2010). Summary judgment is appropriate only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. CR 56(c).

¶ 14 As a municipal corporation, a port is limited in its powers to those expressly granted, those necessarily or fairly implied in or incident to the powers expressly granted, and those essential to its declared purposes. Christie v. Port of Olympia, 27 Wash.2d 534, 545-46, 179 P.2d 294 (1947). From the earliest days of port districts in Washington, their statutory powers have included the acquisition of " rail and water transfer and terminal facilities within such districts." Laws of 1911, ch. 92, § 1. The Port does not rely on this early statute, as it does not attempt to characterize the corridor as a " transfer and terminal" facility. Rather, the primary issue as framed by the parties is whether the necessary authority is found in RCW 53.08.290. RCW 53.08.290 codifies two separate statutes, one enacted in 1980 and one in 1981.

¶ 15 The construction of statutes is a question of law reviewed de novo. Whatcom County Fire Dist. No. 21 v. Whatcom County, 171 Wash.2d 421, 433, 256 P.3d 295 (2011). In determining whether a statute conveys a plain meaning, " that meaning is discerned from all that the Legislature has said in the statute and related statutes which disclose legislative intent about the provision in question." Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash.2d 1, 11, 43 P.3d 4 (2002). " Plain meaning ‘ is to be discerned from the ordinary meaning of the language at issue, the context of the statute in which that provision is found, related provisions, and the statutory scheme as a whole.’ " Lake v. Woodcreek Homeowners Ass'n, 169 Wash.2d 516, 526, 243 P.3d 1283 (2010), quoting State v. Engel, 166 Wash.2d 572, 578, 210 P.3d 1007 (2009).

[178 Wn.App. 118] THE 1980 STATUTE: " IN CONNECTION WITH"

¶ 16 The first statute we must consider is Laws of 1980, chapter 110, entitled an act

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" providing for facilities by port districts for the movement of ...

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