POPE RESOURCES, LP, a Delaware limited partnership; OPG PROPERTIES, LLC, a Washington limited liability company, Respondents,
THE WASHINGTON STATE DEPARTMENT OF NATURAL RESOURCES, a Washington State agency, Petitioner.
concluding that the Department of Natural Resources (DNR) is
a potentially liable party under Washington's Model
Toxics Control Act (MTCA), ch. 70.105 RCW, the Court of
Appeals below rejected the prior interpretation of that
statute in Unigard Insurance Co. v. Leyen, 97
Wn.App. 417, 983 P.2d 1155 (1999) and Taliesen Corp. v.
Razore Land Co., 135 Wn.App. 106, 144 P.3d 1185 (2006).
See Pope Res., LP v. Dep't of Nat. Res., 197
Wn.App. 409, 422, 389 P.3d 699 (2016) ("Because the
language of the provision in MTCA differs from the language
in CERCLA [Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C.
§§ 9601-9675], Taliesen's and
Unigard's holdings relying on an interpretation
of CERCLA liability are not persuasive."). We granted
review to resolve this split in the Court of Appeals and to
provide guidance for interpreting MTCA.
reverse the Court of Appeals and hold that DNR is not an
"owner or operator" of the Port Gamble Bay facility
within the meaning of MTCA. As did the courts in
Unigard and Taliesen, we recognize
MTCA's affinity with CERCLA, under which the control
retained by DNR is insufficient to support its liability for
environmental contamination of the Port Gamble Bay facility.
1853 and 1995, the Port Gamble Bay facility in Kitsap County
operated as a sawmill and forest products manufacturing
facility by Pope & Talbot and its corporate predecessors.
In 1890, some 37 years after Puget Mill Co., predecessor to
Pope & Talbot, began operating the sawmill, the
legislature authorized the disposal of certain occupied
state-owned aquatic lands, including the tidal lands within
Port Gamble Bay. Clerk's Papers (CP) at 249-55. In 1893
and 1913, Puget Mill Co. purchased tidelands around the mill
facility and on the east and west sides of Port Gamble Bay
from the State of Washington. CP at 266. DNR issued the first
lease for Pope & Talbot's use of the Port Gamble Bay
submerged lands in 1974. CPat103.
1985, "Pope & Talbot's Board of Directors and
shareholders approved a 'Plan of Distribution' ... to
transfer 71, 363 acres of its timberlands, timber, land
development, and resort businesses in the State of Washington
... to Pope Resources, a newly formed Delaware limited
partnership." Pope & Talbot, Inc. v.
Comm'r, 162 F.3d 1236, 1237 (9th Cir. 1999).
"The Partnership paid no consideration for the
Washington Properties, " id, although Pope
Resources and Olympic Property Group (Pope/OPG) claim they
assumed a $22.5 million mortgage in consideration.
Appellants' Opening Br. at 5. However, the Ninth Circuit
Court of Appeals affirmed the tax court's valuation of
the transferred properties at between $46.7 and $59.7
million. Pope & Talbot, Inc., 162 F.3d at 1238,
1242. Pope Resources in turn leased the mill area to Pope
& Talbot. CP at 77. Pope & Talbot ceased mill
operations in 1995. CP at 231. The record indicates that
Pope/OPG now seek to develop their Port Gamble holdings for a
large, high-density community with a marina. CP at 153-55.
of the Port Gamble site stems in part from the operation of
sawmill buildings to saw logs for lumber, operation of chip
barge loading facilities and a log-transfer facility,
particulate sawmill emissions from wood and wood waste
burning, in-water log rafting and storage, and creosote
treated pilings placed throughout the bay to facilitate
storage and transport of logs and wood products. "Logs
were generally stored, rafted, and sorted in-water throughout
the Bay." CP at 78. It is uncontested that
DNR did not control the finances of the facility at Port
Gamble, manage the employees of the facility, manage the
daily business operations of the facility, or have authority
to operate or maintain environmental controls at the
facility. DNR did not control Pope and Talbot's decisions
regarding compliance with environmental laws or regulations,
or Pope and Talbot's decisions regarding the presence of
pollutants. DNR did not authorize the release of any
hazardous substances on this site.
CP at 269.
entering into a consent decree with the Washington Department
of Ecology in 2013 "to provide for remedial action at a
portion(s) of the facility . . . where there has been a
release or threatened release of hazardous substances, "
CP at 73, Pope/OPG filed a complaint in 2014 seeking a
declaration that DNR is liable for natural resources damages
and remedial costs, and for contribution of costs. CP at
3-10. The Kitsap County Superior Court granted summary
judgment in favor of DNRin2016. CP at 368-70. The Court of
Appeals reversed, holding that DNR is an "owner or
operator" with potential liability under MTCA. Pope
Res., 197 Wn.App. at 412. DNR appealed, and we granted
review. Pope Res., LP v. Dep't of Nat. Res., 188
Wn.2d 1002, 393 P.3d 357 (2017).
MTCA imposes liability for environmental contamination on the
"owner or operator" of a subject facility, or any
person who owned or operated the facility at the time of the
hazardous substance release or disposal. RCW
70.105D.040(1)(a), (b). MTCA "owner or operator"
liability extends to the following "person[s], " as
defined in RCW 70.105D.020(24): an "individual, firm,
corporation, association, partnership, consortium, joint
venture, commercial entity, state government agency, unit of
local government, federal government agency, or Indian
tribe." Each liable person "is strictly liable,
jointly and severally, for all remedial action costs and for
all natural resource damages resulting from the releases or
threatened releases of hazardous substances." RCW
70.105D.041(2). Liable persons have a right to seek
contribution from other potentially liable persons. RCW
The Court of Appeals Conflated the Terms "Owner "
and "Operator " under MTCA
Court of Appeals erroneously concluded "that DNR is
liable under MTCA as an 'owner or operator' of the
Site." Pope Res., 197 Wn.App. at 418. At the
center of its error lies the conflation of these terms,
leading the Court of Appeals to misconstrue DNR's
delegated management authority as an "ownership
interest" in the Port Gamble Bay facility. Then, relying
on this faux ownership interest, the Court of Appeals
mischaracterized DNR's leasing authority as indicating
operational control over the Pope/OPG facility. Id.
at 420-21. The result is a patchwork drawn from distinct
legal doctrines that fails to adequately describe DNR's
role at Port Gamble Bay.
plain language of MTCA states that an "owner" is
"[a]ny person with any ownership interest in the
facility." RCW 70. 105D.020(22)(a). An
"operator" is any person "who exercises any
control over the facility." Id. Although the
terms "owner" and "operator" are joined
in the phrase "owner or operator" in MTCA, this
does not reduce their independent meaning, given the absence
of express legislative intent to alter the distinct real
property and business operation legal doctrines corresponding
with these terms.
to the Court of Appeals' view, MTCA follows CERCLA in
defining who is liable for environmental contamination. The
primary intent of MTCA is that "[p]olluters should pay
to clean up their own mess. Initiative 97 would make them do
that. Polluters are forced to clean up their
wastes." State of Washington Voter's Pamphlet,
General Election 6 (Nov. 8, 1988). MTCA assigns
liability to the following persons "with respect to a
facility: (a) [t]he owner or operator of the facility; [and]
(b) [a]ny person who owned or operated the facility at the
time of disposal or release of hazardous substances."
RCW 70.105D.040(1). This is substantially the same language
used in CERCLA with one exception. See 42 U.S.C.
§ 9607(a)(1) (persons liable include "the owner and
operator of... a facility"). The parallel construction
from the definition of "owner or operator" recurs
throughout MTCA, which defines "facilities" by
applying this dyad:
"Facility" means (a) [operational fixtures and
assets such as] any building, structure, installation,
equipment, pipe or pipeline (including any pipe into a sewer
or publicly owned treatment works), well, pit, pond, lagoon,
impoundment, ditch, landfill, storage container, motor
vehicle, rolling stock, vessel, or aircraft, or (b) [real
property locations and assets such as] any site or area where
a hazardous substance, other than a consumer product in
consumer use, has been deposited, stored, disposed of, or
placed, or otherwise come to be located.
RCW 70. 105D.020(8). Other than adding vessels under MTCA,
this is substantially the same definition for
"facility" under CERCLA, 42 U.S.C. § 9601(9).
parent statute to MTCA, CERCLA, has consistently been
interpreted to avoid fusing the separate legal doctrines that
underlie the terms, "owner" and
"operator." See Craig N. Johnston &
Melissa Powers, Principles of Environmental Law 162-63 (2016)
("The prima facie elements of ownership liability are
generally very straightforward: Does the defendant own the
facility .... The question of who may qualify as an
'operator' under CERCLA is somewhat trickier.").
Because MTCA was heavily patterned after CERCLA, Washington
courts have recognized "federal cases interpreting
similar 'owner or operator' language in the federal
act are persuasive authority in determining operator
liability." Taliesen, 135 Wn.App. at 127
(citing Unigard, 97 Wn.App. at 428).
Court of Appeals erroneously concluded that DNR has
"owner or operator" liability by conflating these
distinct statutory terms and entangling independent legal
doctrines regarding real property ownership, statutory
delegation, and business facilities operations. The court
neglected to make concrete findings of any real property
ownership interest or any facility-level operational control
based on facts in the record. Its reasoning thereby creates
the risk that persons with no ownership interest and who lack
facility-level operational control may nonetheless be named
potentially responsible parties under MTCA. When MTCA is
properly construed, it is clear that DNR, regardless of
whether it is a person under MTCA, is neither an
"owner" nor an "operator" subject to
liability for the Port Gamble Bay facility.
DNR Is Not Liable under MTCA as an "Owner " at
Port Gamble Bay
Court of Appeals incorrectly held that DNR has an
"ownership interest" in the Port Gamble Bay
facility. Pope Res., 197 Wn.App. at 420. In so
doing, the court interposed ownership attributes
into the State's delegation of aquatic lands
management to DNR. See id. at 419 (wrongly
assuming that delegated responsibility to manage aquatic
lands resembles a property right and, consequently, an
"ownership interest" in the Pope/OPG facility).
Despite a record bereft of any deeds, grants, patents, or
other instruments conveying "any ownership
interest" to DNR, the Court of Appeals deemed DNR an
owner by mistaking its delegated management authority for a
real property right, and then concluding that "DNR's
authority includes those rights associated with an ownership
interest." Id. at 420. This was error.
undisputed that the State of Washington owns the aquatic
lands at Port Gamble Bay. Indeed, Pope/OPG conceded as much
and also acknowledged before the trial court that "the
State of Washington cannot be liable under MTCA." CP at
308; see also Pope Res., 197 Wn.App. at 418 (noting
parties' stipulation that the State owns lands at Port
Gamble Bay). Pope/OPG nonetheless sued DNR, arguing that
"DNR has every incident of ownership other than
fee." Resp'ts' Suppl. Br. at 10. Not so; the
legislature reserved for the State the full bundle
of rights comprising an ownership interest when it declared
that "the state owns these aquatic lands in fee and has
delegated to the department the responsibility to manage
these lands for the benefit of the public." RCW
79.105.010; see also RCW 79.105.020 (the purpose of
the aquatic lands statutes "is to articulate a
management philosophy to guide the exercise of the
state's ownership interest and the exercise of the
department's management authority"). DNR's
interest is solely as the State's management agent. The
limitation on DNR's role has constitutional roots because
the State of Washington, not DNR, owns the beds and shores of
all navigable waters in this state. Const, art. XVII, §
1. Upon entering the Union, the State of Washington obtained
title to the beds of its navigable waters under the equal
footing doctrine, U.S. Const. art. IV, § 3, cl. 1. Under
this doctrine, "the people of each of the Thirteen
Colonies at the time of independence 'became themselves
sovereign; and in that character hold the absolute right to
all their navigable waters and the soils under them for their
own common use, subject only to the rights since surrendered
by the Constitution to the general government.'"
Idaho v. Coeur d'Alene Tribe,521 U.S. 261, ...