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Center For Environmental Law & Policy v. State of Washington Department of Ecology

Court of Appeals of Washington, Division 2

June 26, 2019

CENTER FOR ENVIRONMENTAL LAW & POLICY, AMERICAN WHITEWATER, and SIERRA CLUB, Appellants,
v.
STATE OF WASHINGTON DEPARTMENT OF ECOLOGY, Respondent.

          LEE, A.C.J.

         In 2015, the Department of Ecology (Ecology) promulgated an administrative rule that establishes minimum instream flows of 850 cubic feet per second (cfs)[1] for the lower reach of the Spokane River during summer months (Rule). Ecology's primary basis for establishing a minimum instream flow was to protect and preserve fish habitat within the river.

         The Center for Environmental Law & Policy (Center), [2] the Sierra Club, [3] and American Whitewater (collectively CELP) challenge the validity of this Rule, arguing that it exceeds Ecology's statutory authority and is arbitrary and capricious. Specifically, CELP relies on a provision of the Water Resources Act of 1971 (WRA) to argue that Ecology was required to establish a minimum instream flow that protects multiple enumerated instream values, not just fish. CELP also argues that the Rule violates the public trust doctrine and challenges Ecology's exclusion of certain documents containing instream flow recommendations from its rule-making file.

         We hold that the Rule is not reasonably consistent with the WRA, and therefore, it exceeds Ecology's rule-making authority. We also hold that the Rule was adopted without regard to the attending facts and circumstances, and is therefore arbitrary and capricious. However, we reject CELP's challenges based on the public trust doctrine and adequacy of Ecology's rule-making file. Accordingly, we hold that the Rule is invalid.

         FACTS

         A. The Spokane River

         The Spokane River is a shared resource between Washington and Idaho. It begins in northwestern Idaho, flows west through the City of Spokane, and eventually connects to the Columbia River in eastern Washington.

         The Spokane River is an important economic, recreational, and cultural attraction in the Spokane area. Spokane residents regularly use the river for boating, tubing, swimming, and fishing. The river also draws regional visitors when its flows are sufficient to support boating opportunities. A number of small businesses depend on the river to provide recreation-based activities, including river rafting, kayaking, tubing, and guided fishing trips. The river is a central feature of the region's identity, and Spokane residents view the river as an integral part of their community.

         B. Avista Corporation's Dams

         Stream flow[4] on the Spokane River is controlled by a series of dams owned and operated by Avista Corporation. Avista operates its dams under a license issued by the Federal Energy Regulatory Commission (FERC) in 2009. The license requires Avista to maintain specific minimum stream flows in the Spokane River throughout the year. Between June 16 and September 30, Avista must operate its Upper Falls and Monroe Street dams to provide minimum stream flows of 850cfs.

         As part of the relicensing process, Avista conducted several studies to evaluate the potential influence of its operations on the natural resources in its hydroelectric project area. Some of these studies examined the general habitat characteristics and spawning activity of trout and mountain whitefish in the Spokane River. Two studies evaluated the relationship between effective fish spawning and stream flows in various reaches of the river. Avista also conducted a Whitewater paddling instream flow assessment study, which assessed Whitewater boating opportunities on the Spokane River at different stream flows. Nearly all Whitewater survey participants preferred flows higher than 1, 353 cfs to support boating on the lower reach of the river (downstream of the Upper Falls and Monroe Street dams).

         C. Ecology Rulemaking

         1. The Spokane Valley-Rathdrum Prairie Aquifer and Municipal Water Supply

         The Spokane Valley-Rathdrum Prairie Aquifer underlies the Spokane River. It is the sole source of municipal water supply for the area. The aquifer and the river are highly interactive. Any withdrawal of water from the aquifer has a direct and immediate impact on river flows. Increased groundwater use from the aquifer has led to a decrease in river flows. In the early 1990s, Ecology determined that the river's low flows in late summer were continuing to decline. This prompted Ecology to stop issuing new groundwater rights allowing withdrawals from in the aquifer.

         2. Instream Flow Rulemaking

         The state Water Code, chapter 90.03 RCW, authorizes Ecology to set minimum stream flows for a river or stream through a collaborative process with watershed planning groups.[5] RCW 90.03.247(2);[6] RCW 90.82.080(1)(a)(ii). Ecology began working with watershed planning groups in 1998 to develop instream flow protection for the Spokane River. The watershed planning groups were unable to achieve consensus regarding the minimum instream flows that should be adopted for the Spokane River. Because the members of the watershed planning unit were unable to reach consensus, Ecology initiated rulemaking under the Washington Administrative Procedures Act (APA) to establish minimum instream flows. RCW 90.82.080(1)(a)(ii), (c).

         Ecology commenced formal rulemaking in January 2014. Ecology's draft Rule proposed a minimum instream flow of 850 cfs for the downriver reach of the Spokane River between June 16 and September 30, as measured at the Spokane gage, [7] which is located downstream of the Monroe Street dam. Ecology based this instream flow on the recommendation of the Washington Department of Fish and Wildlife's (WDFW) instream flow biologist Hal Beecher. Beecher initially recommended a minimum instream flow between 900 and 1, 050 cfs from July 1 to September 30, as measured at the Spokane gage. Several years later, in May 2012, Beecher recommended minimum instream flow of 850 cfs between June 16 and September 30, as measured at the Spokane gage. Beecher's 2012 instream flow recommendation was based on the above discussed trout and whitefish spawning studies, which were conducted as part of Avista's dam relicensing process in 2009. Beecher later qualified this recommendation and emphasized that the proposed summer flows were "not perceived by [him] as enhancement, rather as a floor." Administrative Record (AR) at 14233.

         During the rulemaking comment period, Ecology received hundreds of public comments critical of the 850 cfs minimum instream flow in its proposed Rule. Many of these comments asked Ecology to conduct additional studies on how the proposed 850 cfs minimum instream flow at the lower reach of the river would impact recreation, aesthetics, navigation, water quality, temperature, and broader ecosystem values. Other commenters asked Ecology to assess climate change and interstate implications of the proposed Rule. Small recreational business owners commented that they would be unable to provide recreational river activities, such as float and canoe trips, at the proposed 850 cfs summer flows.

         The Center and the Sierra Club sent Ecology a combined comment letter criticizing the proposed Rule, along with 43 electronic documents covering a range of topics, including the return of anadromous fish to the Columbia River, scenic and aesthetic flows in the Spokane River, climate change, fish studies, interstate water issues, and recreational use of the river. The Center and the Sierra Club also provided Ecology with a photographic inventory of 37 key observational points located on the downriver reach of the Spokane River, obtained at five different summer flows. One of these photos showed researchers floating the river in a hard shell kayak in July 2015 at about 770 cfs. Another photo showed people floating down the river in tubes at 770 cfs. And another photo showed a boat navigating the river at 770 cfs. However, the Center and the Sierra Club cautioned that this 770 cfs flow would be unsuitable for larger commercial rafts. American Whitewater, a nonprofit river conservation organization, also sent Ecology a letter in which it claimed, based on surveys it conducted, that acceptable flows for kayaking, canoeing, and rafting the Spokane River were between 1, 500 cfs and 15, 000 cfs, with 5, 000 cfs as an optimal flow.

         Ecology claimed that it considered all of these comments and materials it received during the rulemaking process. Specifically, Ecology stated that it "considered the recreational, aesthetic, and navigational values at multiple stages throughout the process of establishing these instream flows for the river." AR at 3283. However, Ecology rejected the recreational flow criteria of the river in establishing instream flows. Ecology "chose[] not to establish instream flow values based on those recreational needs expressed during the FERC process or any other process including this comment period." AR at 2985.

         Instead, Ecology "chose to rely on studies offish habitat to establish instream flow levels." AR at 3283. Ecology made clear throughout rulemaking that its proposed minimum instream flows were "based upon fish habitat studies," and were "needed for fish survival, including both whitefish and redband trout." AR at 79, 66. Ecology summarily concluded that instream flows that protect fish habitat would also protect the recreational and aesthetic values of the river.

         Ecology adopted the Rule in January 2015, and it became effective in February 2015. The Rule establishes minimum instream flows of 850 cfs on the lower reach of the Spokane River, as measured at the Spokane gage downstream of the Monroe Street dam.[8] WAC 173-557-050.

         A minimum instream flow established by administrative rule, including Ecology's 2015 Rule, is an appropriation of water with a priority date of the rule's effective date. RCW 90.03.345. Water appropriated prior to adoption of the Rule are senior water rights and are not affected by the Rule. However, appropriations after the Rule is established are junior water rights and are interruptible if flow on the Spokane River decreases below the minimum instream flows specified in the Rule. Ecology plans to use the minimum instream flows established by the Rule to manage future water withdrawals from the Spokane River and the aquifer that underlies it. The Rule also establishes Washington's legal interests in the water of the river and aquifer in the event of interstate conflict.

         D. Petition to Amend the Rule

         In February 2016, CELP submitted a joint petition asking Ecology to amend the Rule and increase the 850 cfs summer minimum instream flows as measured at the Spokane gage.[9] Ecology denied the petition in April.

         In May, CELP brought suit against Ecology, challenging the validity of the instream flow Rule under the APACELP claimed that the portion of the Rule setting minimum summer instream flows at 850 cfs exceeded Ecology's statutory authority and was arbitrary and capricious. CELP also argued that Ecology had failed to fulfill its responsibilities under the Public Trust Doctrine in adopting the Rule.

         CELP also filed a motion to supplement the record before the superior court with three documents related to the Avista dam relicensing process and watershed resource planning processes for the region. The specific documents CELP requested be added to the rule-making file were: (1) Ecology's comments to FERC during Avista's dam relicensing, (2) an April 23, 2007, memo in which Beecher noted that habitat rearing at the Spokane gage peaks at 1040 cfs, and (3) a June 30, 2004, document in which Beecher recommended a minimum discharge of 700 cfs at the Post Falls dam. Ecology opposed the motion and submitted declarations in opposition. Three of the agency's rule writers submitted declarations, stating that the documents were not in their custody during the rulemaking process and that they did not consider them when making decisions to set summer minimum instream flows at 850 cfs.

         The superior court denied CELP's motion to supplement the record with these three documents. The superior court later denied CELP's petition challenging the validity of the Rule.

         CELP petitioned for direct review at the Washington Supreme Court. After briefing was complete, the Supreme Court transferred the case to this court.

         ANALYSIS

         A. Validity of the Rule

         CELP argues that the 850 cfs summer minimum instream flow established in Ecology's Rule is invalid because it exceeds Ecology's statutory authority and is arbitrary and capricious. We agree.

         1. Legal Principles

         A challenge to the validity of an administrative rule is reviewed under the APA. Swinomish Indian Tribal Cmty. v. Dep't of Ecology, 178 Wn.2d 571, 580, 311 P.3d6 (2013). Under the APA, an agency rule may only be invalidated if it: (1) is unconstitutional, (2) exceeds the agency's statutory authority, (3) was adopted without complying with statutory rule making procedures, or (4) is arbitrary or capricious. RCW 34.05.570(2)(c). The validity of an agency rule is a question of law, which we review de novo. Wash. Rest. Ass'n v. State Liquor Control Bd., 200 Wn.App. 119, 126, 401 P.3d 428 (2017).

         Administrative agencies only possess those powers expressly granted to them by statute or those impliedly authorized by their enabling statutes. Lenander v. Dep't of Ret. Sys., 186 Wn.2d 393, 404, 377 P.3d 199 (2016). When an agency acts within its rule making authority, the agency's rule is presumed valid, and the burden of demonstrating invalidity rests with the challenger. Wash. Fed'n of State Employee, v. Dep't of Gen. Admin, 152 Wn.App. 368, 378, 216 P.3d 1061 (2009); RCW 34.05.570(1)(a). The party attacking the validity of a rule must show compelling reasons why the rule conflicts with the legislation's intent and purpose. Wash. Fed'n of State Employees, 152 Wn.App. at 386.

         '"Administrative [r]ules must be written within the framework and policy of the applicable statutes.'" Wash. State Hosp. Ass'n v. Dep't of Health, 183 Wn.2d 590, 595, 353 P.3d 1285 (2015) (internal quotation marks omitted) (quoting Swinomish, 178 Wn.2d at 580). An agency exceeds its statutory authority if it adopts a rule that is not reasonably consistent with the controlling statutes. Id.

         2. Ecology Exceeded its ...


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