Court Opinion

ID: 9898033
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:27:57.729111+00
Date Added: 2024-06-11T09:14:52.087823
License: Public Domain

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                                                                         FILED
                                                                    FEBRUARY 28, 2023
                                                                 In the Office of the Clerk of Court
                                                                WA State Court of Appeals, Division III

                   IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                                      DIVISION THREE

       BENTON COUNTY WATER                           )         No. 38803-4-III
       CONSERVANCY BOARD,                            )
                                                     )
                            Respondent,              )
                                                     )
          v.                                         )         PUBLISHED OPINION
                                                     )
       WASHINGTON STATE DEPARTMENT                   )
       OF ECOLOGY,                                   )
                                                     )
                            Appellant.               )

               PENNELL, J. — The Benton County Water Conservancy Board petitioned the

       superior court for judicial review under the Administrative Procedure Act, chapter 34.05

       RCW, seeking to enjoin the Department of Ecology’s refusal to accept and record certain

       agreed administrative divisions of water rights. The trial court ruled in favor of the Board,

       but we reverse. The Board has not established standing to challenge Ecology’s

       administrative division decisions. The petition must therefore be dismissed.

                                 WATER RIGHTS BACKGROUND

               Since the water code was initially adopted in 1917, Washington’s waters have

       been considered public property, not subject to private ownership. RCW 90.03.010;

       RCW 90.44.040. 1 Although private individuals cannot own water, they can acquire the

               Surface water rights are addressed in chapter 90.03 RCW. Ground water rights
               1

       are addressed in chapter 90.44 RCW. This case involves only surface water rights.
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       right to appropriate water for beneficial use. Id. This is what is known as a water right.

       Dep’t of Ecology v. U.S. Bureau of Reclamation, 118 Wn.2d 761, 766, 827 P.2d 275

       (1992).

              Water rights attach to the “land or place upon which the same is used.”

       RCW 90.03.380(1). Nevertheless, in appropriate circumstances, the right “may be

       transferred to another or to others and become appurtenant to any other land or place

       of use.” Id. The Washington Legislature has tasked the Department of Ecology with

       processing applications to change or transfer water rights. Id. The change application

       process is not automatic. Before approving an application to change a characteristic of a

       water right, including its place of use, Ecology must assess whether the change can be

       made without injury or detriment to existing rights. Id. This involves assessing whether

       the water right has been “beneficially used to its full extent.” Okanogan Wilderness

       League, Inc. v. Town of Twisp, 133 Wn.2d 769, 779, 947 P.2d 732 (1997). If Ecology

       approves a change application, it must issue a certificate, record the certificate internally,

       and make a duplicate copy available for the county auditor. RCW 90.03.380(1).

              An assessment of the term “beneficial use” is critical to understanding the contours

       of a water right. “‘[B]eneficial use’ encompasses two principles. . . . First, ‘beneficial

       use’ refers to the types of activities for which water may be used (e.g., irrigation or

                                                     2
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       agriculture) . . . . Second, ‘beneficial use’ determines the measure of a person’s water

       right (i.e., a person is entitled to the amount of water he or she has traditionally put to

       beneficial use).” Cornelius v. Dep’t of Ecology, 182 Wn.2d 574, 605, 344 P.3d 199

       (2015).

              If a water right holder ceases putting water to beneficial use, the right may

       be subject to relinquishment. See RCW 90.14.130-.180; Dep’t of Ecology v. Aquavella,

       131 Wn.2d 746, 757-58, 935 P.2d 595 (1997). When a water right is relinquished, it

       reverts to the State of Washington. RCW 90.14.130.

              A water right holder can avoid relinquishment by temporarily transferring its

       water right to the State through its trust water rights program, which is managed by

       the Department of Ecology. RCW 90.14.140(2)(h). “Trust water rights acquired by the

       [S]tate shall be held in trust and authorized for use by the [D]epartment [of Ecology] for

       instream flows, irrigation, municipal, or other beneficial uses consistent with applicable

       regional plans for pilot planning areas, or to resolve critical water supply problems.”

       RCW 90.42.040(1). A water right temporarily donated to the trust water rights program

       eventually reverts back to the certificate holder, retaining its original use characteristics.

       RCW 90.42.080(9).

              Over the years, the State has adopted procedures for facilitating uncontested water

                                                      3
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       right transfers. Water conservancy boards were created to administer uncontested

       transfers, changes, amendments, or other alterations of water rights within a board’s

       geographic jurisdiction. See RCW 90.80.005, .020, .030, .070. All board decisions are

       subject to approval by the Department of Ecology. RCW 90.80.080; WAC 173-153-150.

       Ecology generally has 45 days to affirm, reverse, or modify an action by a conservancy

       board. RCW 90.80.080(4); WAC 173-153-150(5)(c). Ecology’s decision is subject to

       appeal to the Pollution Control Hearings Board. RCW 90.80.090; WAC 173-153-180.

              The Department of Ecology has also adopted an internal policy entitled the

       “Administrative Policy for Recording the Agreed Division of Water Rights Among

       Multiple Property Owners.” Clerk’s Papers (CP) at 152-54 (some capitalization omitted).

       Originally adopted in 2003, this policy is also commonly known as “POL-1070.” Id.

       POL-1070 enables Ecology to track and record an agreed division of water rights when

       multiple parties own a piece of land to which a single water right is appurtenant. Id. at

       152. Pursuant to POL-1070, Ecology has promulgated “Form ECY 070-88,” entitled

       “Request for Administrative Confirmation of Division of a Water Right.” Id. at 10-12;

       see also id. at 153-54. POL-1070 enables property owners requesting a division of water

       rights to receive superseding water-rights documents.

              POL-1070 was not adopted pursuant to a statutory mandate. Instead, POL-1070

                                                     4
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       appears to have been adopted as a way of streamlining the apportionment of water rights

       pursuant to a division in ownership that reflects “the historic beneficial use of water on

       the property” to which the right attaches. Id. at 153. POL-1070 states in multiple instances

       that it does not prevent “a water right holder from seeking a change via RCW 90.03.380

       . . . or other applicable statutes.” Id. at 152-53.

                           THE BOARD’S POSITION REGARDING
                         ADMINISTRATIVE DIVISIONS AND POL-1070

              The Benton County Water Conservancy Board believes Ecology has been

       misusing POL-1070 in an effort to interfere with the alienation of water rights. According

       to the Board, Ecology refuses to confirm agreed divisions of water rights if the water

       rights are temporarily placed in trust. The Board claims this is problematic because a

       division confirmation “operates as a sort of quit claim deed to update the ownership

       records in Ecology’s Water Rights Tracking System.” Id. at 5. 2 The Board claims that

       when Ecology refuses to authorize a division request, it interferes with the Board’s

       ability to perform its legislatively authorized function of processing water right transfer

       applications. The Board also complains that by refusing to process divisional requests

              2
               The authority cited in support of this claim is RCW 90.14.010 and
       RCW 90.54.030, which require Ecology to maintain records for the efficient
       administration of our state’s waters.

                                                       5
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       for rights that are temporarily held in trust, Ecology is not maintaining an accurate record

       of water rights ownership, in violation of statutory mandates. See RCW 90.14.010;

       RCW 90.54.030.

                              FACTS AND PROCEDURAL HISTORY

              In 2015, Plymouth Ranch, LLC, temporarily donated a portion of its water right,

       G4-26018C, to Ecology’s trust water program. At some point after the donation,

       Plymouth Ranch sold a portion of its property, but retained the water rights associated

       with that property, some of which were those donated to the trust water program. In

       June 2020, Plymouth Ranch extended its water right donation of portions of G4-26018C

       through the year 2030, and donated additional water rights to the trust program, including

       portions of water rights G4-26464C and G4-31006C.

              Soon after Plymouth Ranch extended its donation, it sold the trusted portions of

       water rights G4-26018C and G4-26464C to Frank Tiegs, LLC. Tiegs did not own the land

       to which those water right certificates were appurtenant. In June 2021, Plymouth and

       Tiegs filed a request for administrative confirmation of a division of a water right, using

       Form ECY 070-88. 3 CP at 45-46.

              The administrative division documents were submitted by the Benton County
              3

       Water Conservancy Board on behalf of Plymouth Ranch and Frank Tiegs, LLC.

                                                    6
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

              Ecology denied the request for administrative confirmation of division, referencing

       POL-1070. In an August 2021 letter directed to Plymouth and Tiegs, Ecology identified

       several deficiencies in the requested administrative divisions which it stated “must be

       addressed prior to Ecology agreeing to divide” the certificates. Id. at 31. One of the

       problems identified by Ecology was the fact that Tiegs did not own the property within

       the authorized place of use. Ecology’s denial of the administrative division informed

       Plymouth and Tiegs of their right to appeal Ecology’s decision to the Pollution Control

       Hearings Board within 30 days of receipt of the denial. No appeal was filed.

              In September 2021, the Board petitioned the Benton County Superior Court under

       the Administrative Procedure Act (APA), chapter 34.05 RCW, for judicial review of

       Ecology’s decision. The Board stated it had the power to “‘sue or be sued’” and was

       bringing the action because Ecology’s refusal to administratively divide water rights

       interfered with the Board’s statutory duty to process water right transfer applications. CP

       at 2 (quoting RCW 90.80.060)). The Board claimed it was entitled to judicial review of

       Ecology’s actions under the APA because Ecology’s denial of voluntary division requests

       was “‘outside the statutory authority of the agency or the authority conferred by provision

       of law’” or “‘arbitrary or capricious.’” Id. at 8 (quoting RCW 34.05.570(4)(c)(ii)-(iii)).

       Alternatively, the Board claimed Ecology’s ongoing refusal to administratively divide

                                                    7
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       water rights placed in trust represented an agency rule that was not promulgated pursuant

       to required rulemaking procedures, as outlined in RCW 34.05.570(2).

                                              ANALYSIS

              This case comes to us as a challenge to agency action under the APA. A

       preliminary issue under the APA is standing. The Board, as the petitioner for judicial

       review, bears the burden of establishing standing. KS Tacoma Holdings, LLC v.

       Shorelines Hr’gs Bd., 166 Wn. App. 117, 127, 272 P.3d 876 (2012). We review de novo

       the question of whether this burden has been met, without deference to the superior court.

       In re Est.of Becker, 177 Wn.2d 242, 246, 298 P.3d 720 (2013); Patterson v. Segale, 171

       Wn. App. 251, 257, 289 P.3d 657 (2012).

              Under the APA, a party has standing to obtain judicial review of an agency action

       if that person is aggrieved or adversely affected by the agency action. RCW 34.05.530.

       A party is aggrieved or adversely affected when three conditions are present:

                 (1) The agency action has prejudiced or is likely to prejudice that
              person;
                 (2) That person’s asserted interests are among those that the agency was
              required to consider when it engaged in the agency action challenged; and
                 (3) A judgment in favor of that person would substantially eliminate or
              redress the prejudice to that person caused or likely to be caused by the
              agency action.

                                                    8
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       Id. The first and third of the aforementioned prongs “are generally called ‘injury-in-fact’

       requirements, while the second is called the ‘zone of interest’ prong.” Allan v. Univ. of

       Wash., 92 Wn. App. 31, 36, 959 P.2d 1184 (1998) (quoting St. Joseph Hosp. & Health

       Care Ctr. v. Dep’t of Health, 125 Wn.2d 733, 739, 887 P.2d 891 (1995)), aff’d, 140

       Wn.2d 323, 997 P.2d 360 (2000). A petitioner must satisfy all three prongs in order to

       establish standing. Id.

              We focus our analysis on the APA’s injury-in-fact prongs. The Board argues it has

       suffered an injury-in-fact as a result of Ecology’s handling of POL-1070. According to

       the Board, Ecology’s refusal to accept all agreed divisions of water rights under POL-

       1070 interferes with the Board’s ability to accurately track ownership of water rights and

       process change applications. We disagree. 4

              The Board’s criticisms of Ecology stem from a mischaracterization of POL-1070.

       According to the Board, the administrative division of water rights under POL-1070 and

       Form ECY 070-88 operates as a type of quit claim deed, which Ecology is duty-bound

       to record. But the only authority offered by the Board for the analogy to a quit claim deed

              4
                The Board also claims it has standing because it has the power to “sue and be
       sued.” RCW 90.80.060(1). The right to sue is fairly ubiquitous and is insufficient to
       confer standing under the APA.

                                                     9
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       is its own statements. See CP at 5, 123, 171. No statute, regulation, or policy states

       that POL-1070 operates as a ministerial, quit claim deed process.

              By its plain terms, POL-1070 was adopted to streamline the apportionment

       of water rights stemming from certain types of simple property divisions. 5 The benefit

       of POL-1070 is to avoid the more cumbersome change application process under

       RCW 90.03.380. POL-1070 was not created pursuant to a legislative mandate. Thus,

       Ecology is not duty-bound to process division requests that do not meet Ecology’s

       chosen criteria. The fact that a request to divide water rights fails to meet the criteria set

       by Ecology in POL-1070 does not mean that the parties to the request have not validly

       transferred ownership in a water right. It simply means the parties must use a separate

       process, such as a change application under RCW 90.03.380, to determine how the water

       right will be apportioned.

              The Board seems to suggest that if Ecology is not using POL-1070 as a method

       of recording water right transfers, it is failing its statutory duty to maintain water right

       records under RCW 90.54.030. We disagree. While the legislature has tasked Ecology

       with maintaining water right records, it has not directed Ecology to do so in a specific

              5
                As previously explained, POL-1070 applies only to the unique situation where a
       piece of land with one appurtenant water right is divided up between multiple owners.

                                                     10
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       No. 38803-4-III
       Benton County Water Conservancy Bd. v. Dep’t of Ecology

       manner. Ecology admits it uses POL-1070 as a tool for documenting certain divisional

       water right transfers. But this does not mean it is the only tool for documenting changes in

       water rights. The Board’s claim that Ecology’s limited use of POL-1070 means Ecology

       is failing in its record-keeping duties amounts to nothing more than conjecture. This is

       insufficient to establish an injury-in-fact as required for APA standing. Freedom Found.

       ex rel. State v. Bethel Sch. Dist., 14 Wn. App. 2d 75, 86, 469 P.3d 364 (2020).

              The Board has not demonstrated any injury-in-fact resulting from Ecology’s

       application of POL-1070. It has therefore failed to establish standing pursuant to the

       APA. RCW 34.05.530(1), (3). The trial court’s decision granting relief under the APA

       must therefore be reversed.

                                            CONCLUSION

              The trial court’s order of summary judgment in favor of the Benton County Water

       Conservancy Board is reversed. The petition for judicial review is dismissed for lack of

       standing.

                                                 _________________________________
                                                 Pennell, J.

       WE CONCUR:

       ______________________________            _________________________________
       Fearing, J.                               Staab, J.

                                                   11