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Columbia Riverkeeper v. Port of Vancouver USA

Supreme Court of Washington, En Banc

March 16, 2017

COLUMBIA RIVERKEEPER, and NORTHWEST ENVIRONMENTAL DEFENSE CENTER, Petitioners,
v.
PORT OF VANCOUVER USA; JERRY OLIVER, Port of Vancouver USA Board of Commissioners President; BRIAN WOLFE, Port of Vancouver USA Board of Commissioners Vice President and NANCY I. BAKER, Port of Vancouver USA Board of Commissioners Secretary, Respondents. SIERRA CLUB, Plaintiff,

          FAIRHURST, C.J.

         This case involves a dispute about how the regulatory schemes of the State Environmental Policy Act (SEPA), chapter 43.21C RCW, and the energy facilities site locations act (EFSLA), chapter 80.50 RCW, apply to a lease agreement between respondents, the Port of Vancouver USA and its board of commissioners[1] (Port), and Tesoro Corporation and Savage Companies (hereinafter Tesoro). The lease agreement permits Tesoro to construct a petroleum based energy facility on the Port's property. The agreement remains contingent on review by, and certification from, the Energy Facility Site Evaluation Council (EFSEC), the primary decision-making authority in the field of energy facilities siting and regulation under EFSLA.

         EFSLA incorporates by reference numerous regulations from SEP A, including WAC 197-11-714(3) and -070(1)(b) which preclude agencies "with jurisdiction" from taking actions that would "[l]imit the choice of reasonable alternatives" prior to the issuance of an environmental impact statement (EIS). The Port entered into the lease agreement with Tesoro prior to EFSEC's issuance of an EIS. Columbia Riverkeeper, Sierra Club, and Northwest Environmental Defense Center (hereinafter Riverkeeper) sued the Port, alleging, inter alia, that the lease agreement limited the choice of reasonable alternatives available to the Port, thereby violating SEPA.

         On summary judgment, the trial court dismissed Riverkeeper's SEPA claims in favor of the Port, holding that the contingencies contained within the lease preserved reasonable alternatives available to the Port. The Court of Appeals affirmed, concluding that the lease did not violate SEPA, although it did so by finding WAC 197-11-070 and its "reasonable alternatives" provision applied only to EFSEC and the governor, rather than the Port, and the lease did not limit EFSEC 's or the governor's choices of "reasonable alternatives." Columbia Riverkeeper v. Port of Vancouver USA, 189 Wn.App. 800, 817, 357 P.3d 710 (2015), review granted, 185 Wn.2d 1002, 366 P.3d 1243 (2016).

         In assessing the Port's compliance with SEPA, we must address the question whose reasonable alternatives cannot be limited? We affirm the holding of the Court of Appeals. The Port's lease with Tesoro does not violate SEPA. But we do so on the trial court's grounds. WAC 197-11-070 applies to all agencies with authority to "approve, veto, or finance all or part" of a project, which includes the Port. WAC 197-11-714(3), Because the Port's lease is subject to the condition precedent that EFSEC and the governor approve the project, inclusive of EFSLA's stated environmental priorities and EFSEC's environmental review function, and the Port retains mutual authority to approve development, construction, and operations plans for the facility, the Port did not violate WAC 197-11-070 when it entered into the lease prior to EFSEC's completion of an EIS.

         I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         A. Factual background

         In October 2013, the Port entered into a lease agreement with Tesoro. The agreement permits Tesoro to construct a petroleum based energy facility on the Port's property along the Columbia River that would be capable of receiving by train up to 360, 000 barrels of crude oil per day. The terminal could also store up to two million barrels of crude oil or other petroleum products in above ground tanks. The facility would store and blend petroleum products before loading them for shipment by rail or by marine vessel via the Columbia River.

         The lease contains a preliminary, but comprehensive, description of the facility. The Port and Tesoro must mutually approve final "specifications and designs ... for the development, construction, and operation of the Facility" and "work diligently and in good faith" to finalize the plans. Clerk's Papers (CP) at 288-89. According to the lease, Tesoro may not occupy or develop the property until Tesoro has obtained "all necessary licenses, permits and approvals ... for the Permitted Use, " which necessarily includes EFSEC certification. CP at 288. If "any or all of the conditions precedent" noted above are not satisfied, either party may terminate the lease. CP at 281, 288.

         Tesoro initiated the energy site certification process by contacting EFSEC and informing it of the facility plans. EFSEC determined that the energy facility would likely have a significant adverse impact on the environment, which necessitated completion of an EIS pursuant to RCW 43.21C.030(2)(c). In its Determination of Significance Scoping Notice, EFSEC designated itself as the lead SEPA agency for preparing the EIS. CP at 170. The Determination of Significance Scoping Notice also scheduled the initial SEPA hearings to begin on October 28 and 29, 2013, approximately one week after the Port and Tesoro executed the lease. CP at 169. When this case began, the SEPA environmental analysis was ongoing.

         B. Procedural history

         Riverkeeper initially brought suit against the Port on October 2, 2013, alleging that the Port had excluded the public from deliberations concerning the lease and thereby violated the Open Public Meetings Act of 1971 (OPMA), chapter 42.30 RCW. After the Port and Tesoro executed the lease, Riverkeeper amended the complaint to include two SEPA violations. First, Riverkeeper complained that the Port violated SEPA because it executed the lease prior to completion of the EIS. Second, Riverkeeper alleged that the Port's execution of the lease constituted an "action" under SEPA, and that the "action" limited the choice of reasonable alternatives before the completion of the EIS in violation of WAC 197-11-070. CP at 14-15. In all, the amended complaint included six claims.

         The Port moved for summary judgment on all six claims. The trial court dismissed both SEPA claims, but reserved judgment on the four OPMA claims pending additional discovery. On the first SEPA claim, the trial court reasoned that the Port did not violate SEPA because under EFSLA, the lease was exempt from the EIS requirement. On the second SEPA claim, the trial court concluded the contingencies in the lease guaranteed that it did not limit the reasonable alternatives under SEPA.[2] CP at 991. The trial court also found the SEPA claims were of "substantial public importance" and granted Riverkeeper's CR 54(b) motion for immediate appeal. CP at 1016.

         In a unanimous published opinion, the Court of Appeals affirmed the trial court's summary judgment decision. Riverkeeper, 189 Wn.App. at 800. As to the first SEPA claim, like the trial court, the Court of Appeals found that there was no SEPA violation because EFSLA exempts the lease from the EIS requirement. Id. at 813. Regarding the second SEPA claim, the Court of Appeals, in departing from the trial court's grounds, ruled that when a project, like the one at issue, is subject to EFSLA, SEPA precludes only actions that limit the reasonable alternatives available to EFSEC and the governor. Id. at 817-18. Whether the Port's reasonable alternatives were limited by entering into the lease was, therefore, "immaterial" to the Court of Appeals. Id. at 818.

         The Court of Appeals reached this holding by first concluding the regulations under SEP A and EFSLA were in conflict and, as a result, the SEP A regulation at issue-WAC 197-1 l-070(1)(b)[3]-did not unambiguously provide which agency's alternatives cannot be limited. Id. at 816. It went on to resolve the ambiguity through application of the general-specific rule. The court held that EFSLA, as the more specific regime, applied. Id. at 817. And because EFSLA vested discretion solely within the governor and EFSEC, WAC 197-1 l-070(1)(b) limited only the alternatives of EFSEC and the governor. Id. at 816-18.

         Now, only Columbia Riverkeeper and Northwest Environmental Defense Center appeal, and they do so on just the second SEPA claim-whether the Port violated WAC 197-11-070 by entering into the lease prior to EFSEC's issuance of an EIS because the lease limits the Port's reasonable alternatives. We granted the petition for review. Riverkeeper, 185 Wn.2d at 1002.

         II. ISSUES

         A. Do SEPA and EFSLA regulations conflict?

         B. Does WAC 197-11 -070(1)(b) apply to the Port?

         C. Does the conditions precedent clause and the Port's retained mutual approval authority within the lease satisfy the Port's obligation under the regulation's "reasonable alternatives" provision?

         III. ANALYSIS

         "We review the propriety of summary judgment rulings de novo, viewing the facts in the light most favorable to the nonmoving party. Summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Save Our Scenic Area v. Skamania County, 183 Wn.2d 455, 463, 352 P.3d 177 (2015). Neither party contends a genuine issue of material fact remains. At issue is the interpretation of WAC 197-11-070(1)(b) and its application to the lease between the Port and Tesoro.

         Statutory and regulatory interpretation is a question of law that we also review de novo. Jametsky v. Olsen, 179 Wn.2d 756, 761-62, 317 P.3d 1003 (2014) (citing Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002)); City of Seattle v. Burlington N. R.R. Co., 145 Wn.2d 661, 665, 41 P.3d 1169 (2002). We interpret administrative regulations using rules of statutory construction. Overlake Hosp. Ass'n v. Dep't of Health, 170 Wn.2d 43, 51, 239 P.3d 1095 (2010) (citing City of Seattle v. Allison, 148 Wn.2d 75, 81, 59 P.3d 85 (2002)). The purpose of our inquiry is to determine legislative intent and interpret the statutory provisions in such a way so as to carry out that intent. Jametsky, 179 Wn.2d at 762. If possible, we give effect to the plain meaning of the statute as a pronouncement of legislative intent. Id. When attempting to ascertain a statute's plain meaning, we may consider the "context of the entire act as well as any 'related statutes which disclose legislative intent about the provision in question.'" Id. (quoting Campbell & Gwinn, 146 Wn.2d at 11).

         If a statute is subject to more than one reasonable interpretation, we consider it ambiguous. Id. (citing City of Seattle v. Winebrenner, 167 Wn.2d 451, 456, 219 P.3d 686 (2009)). After determining that a statute is ambiguous, "we 'may resort to statutory construction, legislative history, and relevant case law for assistance in discerning legislative intent.'" Id. (quoting Christensen v. Ellsworth, 162 Wn.2d 365, 373, 173 P.3d 228 (2007)).

         A. SEPA and EFSLA regulations do not conflict

         1. SEPA provides decision makers with the environmental impacts of proposed actions

         The legislature enacted SEPA in 1971 to inject environmental consciousness into governmental decision-making. See WAC 197-11-714(1). SEPA was intended

(1) [t]o declare a state policy which will encourage productive and enjoyable harmony between humankind and the environment; (2) to promote efforts which will prevent or eliminate damage to the environment and biosphere; (3) and [to] stimulate the health and welfare of human beings; and (4) to enrich the understanding of the ecological systems and natural resources important to the state and nation.

RCW 43.21 CO 10 (alteration in original). SEPA expressly acknowledges that "each person has a fundamental and inalienable right to a healthful environment and that each person has a responsibility to contribute to the preservation and enhancement of the environment." RCW 43.21C.020(3). SEPA's primary focus is on the decision-making process. 24 Washington Practice: Environmental Law And Practice § 17.1, at 192 &n. 8 (2d ed. 2007) (citing Save Our Rural Env't v. Snohomish County, 99 Wn.2d 363, 662 P.2d 816 (1983)). As such, SEPA seeks to ensure that environmental impacts are considered and that decisions to proceed, even those completed with the knowledge of likely adverse environmental impacts, be "rational and well-documented." Id. at 192.

         SEPA requires that agencies complete an EIS prior to undertaking "major actions significantly affecting the quality of the environment." RCW 43.21C.030(2)(c). The EIS is to be completed by the "responsible official"[4] and must include

(i) the environmental impact of the proposed action;
(ii) any adverse environmental effects which cannot be avoided should the proposal be implemented;
(iii) alternatives to the proposed action;
(iv) the relationship between local short-term uses of the environment and the maintenance and enhancement of ...

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