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Riverkeeper v. Port of Vancouver USA

Supreme Court of Washington, En Banc

June 8, 2017

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.

          WIGGINS, J.

         Washington's Open Public Meetings Act (OPMA) requires that "[a]ll meetings of the governing body of a public agency shall be open and public ., . except as otherwise provided in this chapter." RCW 42.30.030. An exception to this open meeting mandate permits governing bodies to enter executive session "[t]o consider the minimum price at which real estate will be offered for sale or lease when public knowledge regarding such consideration would cause a likelihood of decreased price." RCW 42.30.110(1)(c). The parties dispute the scope of this exception as applied to five executive sessions conducted by the Port of Vancouver USA (the Port). The scope of this "minimum price" exception is a matter of first impression.

         We now hold that a government entity may enter executive session to discuss the minimum acceptable value to sell or lease property, but not to discuss all factors comprising that value. To the extent that various factors directly alter the lowest acceptable value, the governing body may discuss how these factors impact the minimum price; but general discussion of the contextual factors themselves must still occur at an open public meeting. As a result, we reverse the trial court's partial summary judgment in favor of the Port and remand for further proceedings consistent with our analysis.


         I. Factual History[1]

         In 2013, the Port negotiated a lease for a large rail terminal on public land with two private companies, Tesoro Corporation and Savage Companies. The two companies formed a joint venture to contract with the Port, creating Tesoro Savage Petroleum Terminal LLC. As approved, the Tesoro-Savage lease would be "the Port's largest single revenue generator, " worth "upwards of $200 million to the Port." Resp'ts' Br. at 8 (Port Br.).

         The new project would receive large quantities of petroleum products by rail for export. Located on approximately 42 acres of the Port's property, the facility would handle roughly 120, 000-360, 000 barrels of petroleum products each day. Transporting these products would require between two and six trains per day, each train a mile and a half long in length. Once at the terminal, the petroleum products would then be loaded onto ships for export.

         The Port evaluated the project in the context of its threefold mission to "1) maximize marine business and development, 2) maximize industrial business and development, and 3) generate and sustain diversified revenues." Clerk's Papers (CP) at 2491. Together, these three aims are part of a common effort "to enhance economic development for the benefit of our community." Id. at 1415. Because the Port's focus is fundamentally economic, the lease's benefits are similarly financial- both for the Port and for "the local community." Port Br. at 8.

         For the Port, the lease's most obvious economic benefit is the monthly rent. Other financial benefits to the Port take the form of different kinds of fees: area maintenance fees, rail access fees, rail maintenance fees, wharfage fees, and service and facilities fees.[2] For the community, economic benefits involve new jobs and anticipated increases in regional spending. Id. (noting that the project will provide "hundreds of construction jobs and other permanent jobs for the community"). According to the Port, the project would indirectly generate an estimated 2, 700 local jobs peripheral to the project, as well as "$61 million in annual local purchases."

         The lease's terms and associated benefits were negotiated by the Port's staff. While staff kept the Port's board of commissioners updated through summary documents and one-on-one conversations, commissioners had "no involvement with the negotiations of [the] lease." Id. at 9. According to the Port's executive director, Todd Coleman, commissioners generally render a decision only at the end of a lease approval process, when the board deliberates and votes to either accept or deny a lease.

         Port staff is also responsible for determining the appropriate lease price. Staff recommends a minimum price, and the commissioners confirm that the number is reasonable.[3] According to the commissioners, they "are not directly involved" with setting the minimum price and "expect the staff to do the research."

         In the case of the Tesoro-Savage lease, the Port's staff first presented the project to the entire board of commissioners in executive session-a meeting closed to the public. The Port commonly holds executive sessions; according to Commissioner Brian Wolfe, they occur "[a]bout 95 percent of the time" that a public meeting is also held. The Port meets in executive session in order to prevent "poaching" by other ports; seen as rivals for valuable tenants, neighboring ports might undercut a fledgling lease deal. Id. at 1471.

         In order to avoid this "poaching, " the Port discusses "basically all topics" related to real estate in executive sessions. Id. These topics, in turn, influence the price at which real estate will be offered for lease. For example, the Port describes the components "that must be identified and analyzed to determine [the lease's] ultimate price" as including

the amount of property to be leased; the market value of any existing feature or amenities of the site; the duration of the lease; any required investments or improvements by the Port; the Port's expected return on investment in the short and long term, and whether the lease represents the highest return to the Port for that location; the projected flow of potential revenue streams; the feasibility of the lease rate, including the financial strength of the tenant, the stability of the tenant's business industry, and any tenant risks that must be mitigated;[4] and the direct and indirect economic benefits for the local community (including family-wage jobs).

         Opp'n to Mot. for Discr. Review at 3-4. Because changes to any of these terms would change the acceptable lease price for a particular property, the terms themselves were the subject of executive session discussion.

         The Port held at least seven executive sessions to discuss the Tesoro-Savage project between March and July 2013. Two of the meetings are not at issue on this appeal because the trial court denied the Port's motion for summary judgment seeking dismissal of claims as to those two meetings. In their briefing, the parties generally agree as to the contents of the remaining five meetings as to which the trial court granted summary judgment of dismissal.

         A. March 26, 2013 Executive Session

         In this executive session, the Port's staff presented the Tesoro-Savage lease terms to the board of commissioners. The Port discussed the values staff had negotiated for the base lease rate, wharfage fees, dockage fees, and rail fees, as well as the proposed duration of the exclusivity agreement. The Port also discussed another unrelated real estate matter and a litigation issue.

         6. July 9, 2013 Executive Session

         In this executive session, the Port discussed the implications of Tesoro-Savage forming a limited liability company. According to Commissioner Wolfe, there was some concern that the new joint venture entity might be "merely a shell without adequate assets, " unable to perform environmental cleanup if necessary. The Port also discussed unrelated national security and litigation matters.

         C. July 16 and 17, 2013 Executive Sessions

         Over two days totaling approximately eight hours, the Port's discussion in these back-to-back executive sessions was broad-ranging. Topics included "what type of crude would flow through the facility and its risks, timelines for Tesoro-Savage to begin and complete construction, the length of the operating term, and whether extensions would be allowed . . . ." Port Br. at 11.

         D. July 23, 2013 Executive Session

         In this executive session, held before a vote in public later that day, the Port contemplated requiring the Port's approval of Tesoro-Savage's safety plan before the project could commence operation. This new lease term had been proposed the night before, after substantial public comments in a public workshop.

         Outside of these executive sessions, [5] the Port also held public workshops in May, June, and July 2013, taking public comments at each one. Two formal public meetings were then held, the first on July 23, 2013, before this lawsuit was filed. This first meeting presented an overview of the lease to the public, followed by the commissioners' public vote approving the lease.

         The second meeting took place after this action was filed. Due to faulty announcement procedures in connection with the first public meeting, see infra note 8, the Port decided to operate under the assumption that the July 23 vote was not effective. In what the Port described as "an abundance of caution, " it held a new open meeting and conducted a new vote on October 22, 2013. The meeting lasted about two hours and the Port again approved the lease.

         II. Procedural History

         On October 2, 2013, Columbia Riverkeeper, Sierra Club, and Northwest Environmental Defense Center sued the Port and its commissioners.[6] All three plaintiffs (collectively Riverkeeper) are nonprofit organizations dedicated to environmental issues. Columbia Riverkeeper in particular is concerned with the restoration and protection of the Columbia River Basin.

         In its first amended complaint, Riverkeeper claimed that the Port's July 22, 2013, executive session included topics that should have been discussed in a public meeting. As a result, Riverkeeper asked that the meeting and the lease approval be declared invalid and that the Port be required to retrace its steps before reapproving the lease. See Report of Proceedings (RP) (July 24, 2015) at 7 (quoting Riverkeeper's counsel requesting that "[t]he lease ... be declared null and void until defendants retrace their steps and disclose the content of their unlawful deliberations").

         After the Port held its second formal public meeting on October 22, Riverkeeper filed an amended complaint on October 31, 2013. This revised complaint noted the additional meeting and added various State Environmental Policy Act (SEPA) claims.[7]Ch. 43.21 CRCW.

         On summary judgment, the trial court held that any problems associated with the July 22 meeting were adequately corrected by the October 22 meeting and vote, and by the adoption of a "revised executive session announcement procedure." CP at 948. The new announcement procedure consisted of a checklist allowing the Port to indicate which statutory exception an executive session invoked.[8] The court continued the remainder of the OPMA claims, pending further discovery.

         After discovery, Riverkeeper filed its second amended complaint. This complaint alleged further OPMA violations by the Port at meetings conducted between February and July 2013-a period that includes the five executive sessions now before us.

         In a second summary judgment order, the trial court held that each of the five executive sessions complied with the OPMA. The court further found that genuine issues of material fact precluded summary judgment as to the April 9 and July 22 executive sessions. The trial court's order specifically embraced the Port's interpretation of the OPMA's "minimum price" exception: "[F]actors other than a bare numeric term are essential to an ultimate determination of price, and ... the statute includes a necessary degree of latitude beyond the bare numeric terms." The court found that discussing issues relevant to price was a necessary part of considering the price itself, holding that the Port could discuss in executive session "(1) information that would give the customer an advantage in negotiating a lower price; and (2) information that would give a competitor an opportunity to negotiate with the Port's customer, thus creating a bidding process that would decrease the Port's price."

         The court then concluded that interpretation of the "minimum price" exception was "a question of first impression ... as to which there is substantial ground for a difference of opinion and immediate review of the order may materially advance the ultimate termination of the litigation." The remaining proceedings were stayed pending appellate review.

         Riverkeeper filed a petition for discretionary review by this court, seeking review of three issues: (1) the trial court's interpretation of the OPMA, (2) the trial court's determination that five of the Port's meetings were lawful and that two remained inconclusive, and (3) the trial court's mootness ruling related to Riverkeeper's request for injunctive relief against the lease.[9] We granted review of the trial court's interpretation of the OPMA's "minimum price" exception and the determination that the five meetings-on March 26, July 9, July 16, July 17, and July 23, 2013-were lawful. The trial court's mootness ruling solely concerned errors associated with the July 22 meeting, which is not before us; as a result, we did not grant review of the mootness issue.[10]

         Because we disagree with the trial court's interpretation of the "minimum price" exception, we reverse the grant of summary judgment for each of the five meetings.


         We review summary judgments de novo. Scrivener, 181 Wn.2d at 444. Summary judgment is appropriate where there is no genuine issue of any material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). We construe evidence and inferences from the evidence in favor of the nonmoving party. Scrivener, 181 Wn.2d at 444.

         The construction and meaning of a statute is a question of law that we also review de novo. Dep't of Ecology v. Campbell & Gwinn, LLC,146 Wn.2d 1, 9, 43 P.3d 4 (2002). When possible, the court derives legislative intent from the plain language enacted by the legislature, considering the text of the provision in question, the context of the statute in which the provision is ...

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