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Public Utility District No. 1 of Okanogan County v. State

Supreme Court of Washington, En Banc

January 29, 2015

Public Utility District No. 1 of Okanogan County, Petitioner ,
The State of Washington et al., Petitioners, Christine Davis et al., Respondents

Argued February 25, 2014.

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Appeal from Okanogan County Superior Court. 09-2-00679-4. Honorable Jack Burchard.

Paul J. Lawrence and Sarah C. Johnson (of Pacifica Law Group LLP ), for petitioners.

P. Stephen DiJulio, Adrian U. Winder, and Michael S. Schechter (of Foster Pepper PLLC ); and Michael D. Howe, for respondents.

Elizabeth A. Pauli, William C. Fosbre, Peter S. Holmes, and Kelly N. Stone on behalf of the City of Tacoma and the City of Seattle, amici curiae.

Eric Christensen on behalf of Washington Public Utility Districts Association, Washington Electric Rural Cooperative Association, and Public Utility District No. 1 of Snohomish County, amici curiae.

Philip A. Talmadge on behalf of Western States Land Commissioners Association, amicus curiae.

AUTHOR: Justice Debra L. Stephens. WE CONCUR: Chief Justice Barbara A. Madsen, Justice Susan Owens, Justice Mary E. Fairhurst, Justice Charles K. Wiggins, Justice Sheryl Gordon McCloud, Stephen J. Dwyer, Justice Pro Tem. AUTHOR: Justice Steven C. Gonzá lez. WE CONCUR: Justice Charles W. Johnson.


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Stephens, J.

[182 Wn.2d 524] ¶ 1 This case arises from the protracted history between Public Utility District No. 1 of Okanogan County (PUD) and the Department of Natural Resources (DNR) [1] over the installation of an electrical transmission line through school lands managed by DNR in the Methow Valley. At issue is whether PUD is statutorily authorized to condemn a right of way through school trust lands for the construction of a transmission corridor and, if so, whether the particular school lands are nonetheless exempt from condemnation as a result of their trust status as school lands or present use for cattle grazing. The trial court and Court of Appeals concluded that PUD is statutorily authorized to condemn school lands and that the particular school lands at issue are subject to condemnation. We affirm.

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¶ 2 PUD is a nonprofit, public utility district tasked with the conservation of the state's water and power resources and the supply of public utility services to residents in Okanogan County. See Laws of 1931, ch. 1, § 1. To supply electricity to the region, PUD operates a high voltage transmission line connecting Twisp, Okanogan, and Pateros (the Loup-Loup line) and a lower voltage distribution line from Pateros to Twisp (the Methow-Valley Floor line). The existing system has long experienced reliability, capacity, and line loss problems. Gebbers v. Okanogan County Pub. Util. Dist. No. 1, 144 Wn.App. 371, 375, 183 P.3d 324 (2008). As a result, residents have suffered excessive and costly line losses and frequent power outages. Id. These problems are expected to increase as the service population in that region grows. Id.

¶ 3 In 1996, PUD proposed the installation of a new higher capacity transmission line from Pateros to Twisp that would run roughly parallel to the existing Methow-Valley Floor line. Progress on the project slowed when PUD was required to conduct an extensive environmental impact study (EIS). In 2003, PUD and the United States Forest Service (USFS) held a public scoping period, encouraging members of the public, environmental groups, and governmental agencies to assist them in identifying areas of public concern. In 2004, PUD and the USFS released a scoping report. The report identified 15 alternatives, but only 6 alternatives and a no-action alternative were ultimately approved for detailed consideration in light of the project's objectives. [2] In January 2005, PUD released an extensive draft EIS report describing the viability of each alternative [182 Wn.2d 526] and its anticipated impact on air and soil quality, erosion, vegetation, fish, and wildlife. Id. at 376. PUD thereafter held several public hearings and meetings and responded to over 400 letters submitted during the comment period. Id.

¶ 4 In February 2006, PUD indicated its preferred plan was " Alternative 2," which involved the installation of a new transmission line from Pateros to Twisp (the Pateros-Twisp line). Id. at 376-77. The Pateros-Twisp line meets all of the project's objectives, provides a secondary backup power source for the area, and is significantly less expensive than simply upgrading the existing Loup-Loup line. Id. at 377-78. The Pateros-Twisp line is a modified version of the original 1996 plan. Methow Transmission Project Summary: Final Envtl. Impact Statement at S-6 (Mar. 2006), The principal change eliminated all permanent road construction, requiring PUD to use temporary track roads, hand-dig holes, and deliver structures by helicopter. Id.

¶ 5 Installation of the Pateros-Twisp line requires PUD to obtain an 11.6-mile easement across school lands managed by DNR. Br. of Resp't PUD-PUD Statutory Condemnation Auth. at 7-8. These lands were granted to the State in trust for the people and for the support of a common school fund. They comprise a portion of the largest publicly owned tract of shrub-steppe habitat in the Methow Valley. Appellant/Cross-Resp't Conservation Northwest's Suppl. Br. at 1. The lands are currently leased for cattle grazing and generate approximately $ 3,000 of annual income for the benefit of Washington schools. Clerk's Papers (CP) at 232, 252, 273, 298, 319. The grazing leases expressly recognize that they are subject to the easement rights of others and provide remedies in the event that all or part of [182 Wn.2d 527] the land is condemned by a public authority. See, e.g., id. at 233, 240.

¶ 6 PUD released a final EIS report on March 7, 2006, indicating its preference for Alternative 2. Gebbers, 144 Wn.App. at 376. The PUD commissioners officially

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selected Alternative 2 for the project later that month. Id. Various citizen groups subsequently filed suit challenging the sufficiency of the EIS report under the State Environmental Policy Act, chapter 43.21C RCW, and the prudence of the commissioners' selection. 144 Wn.App. at 378-79. The trial court dismissed these challenges, and the Court of Appeals affirmed. Id. at 393. We denied review. Gebbers v. Okanogan County Pub. Util. Dist. No. 1, 165 Wn.2d 1004, 198 P.3d 511 (2008).

¶ 7 While the EIS challenges were pending, PUD applied for the necessary easements through the school lands using DNR's easement application process. CP at 125-26. Between May 2007 and February 2010, PUD and DNR communicated extensively about the proposed easements. Id. PUD submitted a formal application in October 2008 and was told the application would take approximately two to three months to process. Id. at 126. PUD's application has been pending now for over five years. PUD Answer to Amicus Curiae Br. of Western States Land Comm'rs Ass'n at 16. And, approximately 18 years have passed since the project was proposed in 1996.

¶ 8 In 2010, PUD filed a petition to condemn the necessary easements for the project. Prior to condemnation hearing on public use and necessity, Conservation Northwest (CNW), a group engaged in conservation activities, moved to intervene. CP at 594-606. DNR objected. The trial court granted CNW limited intervention to address the scope of PUD's condemnation authority. Id. at 506-08. CNW and DNR filed separate motions for summary judgment, arguing PUD does not have the authority to condemn the subject school lands given their trust status and present use as grazing land. Id. at 460-505. The trial court denied [182 Wn.2d 528] CNW's and DNR's motions and granted summary judgment in favor of PUD, concluding PUD has the authority to condemn the subject school lands. Id. at 22-24. [3]

¶ 9 The Court of Appeals affirmed the trial court's determination that PUD has the authority to condemn the relevant school lands, but did not address the propriety of CNW's intervention. Pub. Util. Dist. No. 1 of Okanogan County v. State, 174 Wn.App. 793, 301 P.3d 472 (2013). The court held that the subject school lands were not exempt from condemnation because they were not dedicated to a public use by virtue of their trust status or reserved for a particular purpose in light of their grazing leases. Id. at 802-07. Additionally, the court held that even if the lands were devoted to a public use or reserved for a particular purpose, PUD could still condemn an easement through them because PUD's proposed use is compatible with DNR's present use. Id. at 807-08.

¶ 10 DNR petitioned for review on the issue of condemnation, and PUD sought cross review on the issue of intervention. We granted review. Pub. Util. Dist. No. 1 of Okanogan County v. State, 178 Wn.2d 1025, 312 P.3d 652 (2013).


I. Limited Intervention of Conservation Northwest

¶ 11 The trial court granted CNW limited intervention under CR 24 to address whether PUD has the authority to condemn school lands. As a threshold matter, PUD contends that CNW's intervention in this case is contrary to law. PUD argues that RCW 8.12.120 supersedes CR 24 and allows only those with compensable land interests (i.e., those with real property interests) to be parties in a [182 Wn.2d 529] condemnation proceeding. Alternatively, PUD argues that the trial court's CR 24 analysis was in error. We disagree.

A. RCW 8.12.120 Does Not Prohibit Intervention by Those Challenging a Condemnor's Authority To Condemn Certain Property

¶ 12 Chapter 8.12 of the Revised Code of Washington sets out the process of condemnation

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proceedings brought by public utility districts. [4] RCW 8.12.120 in particular provides that in condemnation proceedings, a jury shall " ascertain the just compensation to be paid to any person claiming an interest" in the property taken or damaged. Accordingly, the statute requires that " [s]uch person shall first be admitted as a party defendant to said suit by such court." Id. PUD contends that CNW cannot intervene in this case because it has no compensable property interest and thus is not a party defendant who must be joined under RCW 8.12.120.

¶ 13 PUD's analysis makes a critical misstep by reading RCW 8.12.120 as restricting a court's power of joinder. While the statute requires the joinder of particular parties, it does not prohibit a court from exercising its authority under the court rules to join individuals challenging a condemnor's authority with respect to certain property. In City of Tacoma v. Taxpayers of Tacoma, 49 Wn.2d 781, 793, 307 P.2d 567 (1957), [5] we acknowledged the special statutory scheme for condemnation actions but held it did not prevent a court from hearing an action questioning the scope of a condemnor's authority. At issue was whether [182 Wn.2d 530] Thurston County had jurisdiction to consider a challenge to the city of Tacoma's power to condemn lands that were not located in either Pierce County (where the action had commenced) or Thurston County (where the action was transferred). The trial court concluded it did not have jurisdiction over the matter because condemnation actions are in rem actions and the subject lands were outside the court's geographical reach. Id. at 794. We reversed, explaining that an action regarding the scope of an entity's condemnation powers is " not a condemnation action." Id. at 793. The teaching point of Taxpayers of Tacoma is that chapter 8.12 RCW should not be read restrictively. While this is a condemnation action, there is no conflict between joining party defendants under RCW 8.12.120 and joining others under the civil rules.

¶ 14 We have long recognized the ability of adjacent landowners to question the power of a condemnor to take certain property notwithstanding their lack of compensable land interests in the matter. See State ex rel. N. Pac. Ry. v. Superior Court, 136 Wash. 87, 90-91, 238 P. 985 (1925) (listing cases). PUD's reliance on Port of Grays Harbor v. Bankruptcy Estate of Roderick Timber Co., 73 Wn.App. 334, 869 P.2d 417 (1994), and Public Utility District No. 1 of Snohomish County v. Kottsick, 86 Wn.2d 388, 545 P.2d 1 (1976), is unavailing. Neither case questioned the scope of a condemnor's authority. Instead, they concerned whether certain individuals qualified as " condemnee[s]" under RCW 8.25.075(1) so as to entitle them to an award of attorney fees. Port of Grays Harbor, 73 Wn.App. at 337; Kottsick, 86 Wn.2d at 389-90. In this case, CNW does not seek to assert a property interest or to claim entitlement to fees, but rather simply to challenge the scope of PUD's condemnation authority. Because RCW 8.12.120 does not address this situation, we consider whether CNW's intervention was proper under CR 24.

[182 Wn.2d 531]B. The Trial Court Did Not Abuse Its Discretion in Allowing CNW To Intervene under CR 24

¶ 15 CR 24 provides two independent means by which a party can intervene. Vashon Island Comm. for Self-Gov't v. Wash. State Boundary Review Bd., 127 Wn.2d 759, 765, 903 P.2d 953 (1995). Subsection (a) addresses when a party is entitled to intervene as a matter of right, and subsection (b) addresses the conditions for permissive intervention. CR 24(a), (b). The trial court

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granted CNW limited intervention under CR 24(b). We affirm. [6]

¶ 16 We review a trial court's decision granting permissive intervention under CR 24(b) for abuse of discretion. In re Recall Charges Against Butler-Wall, 162 Wn.2d 501, 507, 173 P.3d 265 (2007). " 'An abuse of discretion exists only when no reasonable person would take the position adopted by the trial court.'" Westerman v. Cary, 125 Wn.2d 277, 304, 892 P.2d 1067 (1994) (internal quotation marks omitted) (quoting In re Dependency of J.H., 117 Wn.2d 460, 472, 815 P.2d 1380 (1991)). An error of law necessarily constitutes an abuse of discretion. Sales v. Weyerhaeuser Co., 163 Wn.2d 14, 19, 177 P.3d 1122 (2008).

¶ 17 CR 24(b) states in pertinent part that " anyone may be permitted to intervene in an action ... [w]hen an applicant's claim or defense and the main action have a question of law or fact in common." It further provides that " [i]n exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties." CR 24(b)(2). PUD argues that CR 24(b) plainly requires that permissive intervenors have an independent claim or defense in addition to commonality of law or fact. Suppl. Br. of Resp't PUD at 3; Br. of Appellant PUD on Intervention at 24; Reply Br. of Appellant PUD on Intervention at 12, 13 [182 Wn.2d 532] n.15. According to PUD, a claim or defense is independent only if it is different from those brought by the existing parties. [7] PUD ...

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