State, Dept. of Ecology v. Theodoratus

• Citation: 957 P.2d 1241,135 Wn.2d 582
• Decision Date: 02 July 1998
• Docket Number: No. 64527-2,64527-2
• Court: Washington Supreme Court
• Parties: STATE of Washington, DEPARTMENT OF ECOLOGY, Respondent, v. George THEODORATUS, Appellant.

Page 582

135 Wn.2d 582

957 P.2d 1241

STATE of Washington, DEPARTMENT OF ECOLOGY, Respondent, v. George THEODORATUS, Appellant.

No. 64527-2.

Supreme Court of Washington,

En Banc.

Argued Sept. 24, 1997.

Decided July 2, 1998.

Thomas D. Mortimer, Seattle, Amicus Curiae on behalf of Washington Water Utilities Council

John Woodring, Olympia, Amicus Curiae on behalf of Washington Association of Realtors and Building Industry Association of Washington.

Rachael Paschal, Seattle, Amicus Curiae on behalf of Center for Environmental Law & Policy and Washington Environmental Council.

Charles Lean, Olympia, for Appellant.

Christine Gregoire, Attorney General, Philip Thomas McDonald, Assistant Attorney General, Deborah Lenora Mull, Assistant Attorney General, Olympia, for Respondent.

MADSEN, Justice.

The primary issue in this case is whether a final certificate of water right, i.e., a vested water right, may be issued based upon the capacity of a developer's water delivery system, or whether a vested water right may be obtained only in the amount of water actually put to beneficial use. Here, the Pollution Control Hearings Board concluded that under the circumstances in this case system capacity, or a "pumps and pipes" measure, would be the method of quantification for purposes of the final certificate of water right. Clerk's Papers (CP) at 20. Accordingly, the Board held that the Department of Ecology could not condition Appellant's extension of time in which to perfect a water right by providing that actual beneficial use of water

would be the measure of that right. We conclude that state statutory and common law does not allow for a final certificate of water right to be issued based upon system capacity. We affirm the superior court's reversal of the Board's decision, with some modification.

FACTS

In 1973, Appellant George Theodoratus and Ray Drake formed a limited partnership to build a residential development near the Skagit River in Skagit County, and applied to the Department of Ecology for a water right to serve the development. The application was approved pursuant to a "Report of Examination" issued July 24, 1973. The report included language purporting to create a vested water right which would entitle the applicant to a water certificate issued under RCW 90.03.330 once a water supply system was capable of delivering water, even though some or most of the lots were vacant. Quantification of a water right based upon system capacity, rather than the amount of water used, is referred to as a "pumps and pipes method." This method has been used by the Department for at least the past 40 years, and hundreds of permits have been issued with pumps and pipes language.

Appellant's water system will ultimately be responsible for serving Appellant's development and an additional 30 residential units outside the development under a coordinated water system plan approved by the State Department of Health. Construction of Appellant's water system began in 1973 with the installation of one well. To date, water lines are available to 93 of the 253 lots platted in the development.

The permit originally granted to Appellant called for completion of the development by 1980. Due to various litigation, the project was delayed several times. A recession in the 1980's in the area also slowed the project. The Department granted several extensions to Appellant. From 1985 to 1992 the Department file was inactive. In 1992 The Board struck the conditions which required actual application of water to beneficial use as a measure of the final certificate of water right to be issued. The Board concluded that "[t]he 'pumps and pipes' interpretation correctly expresses the application of water to a beneficial use in the context of this case." CP at 20. The Board held that Appellant may validly appropriate water for all the lots his system is capable of serving and such appropriation would result in a vested water right entitled to a water right certificate.

Appellant requested an extension to 2001, which the Department at first denied. Appellant appealed the denial. The Department then changed its decision and granted an extension to January 1, 2001. The Department placed four conditions on the extension. Numbers 1, 2, and 4 provide (1) that the extension would be the last under Appellant's groundwater permit; (2) that monthly measurements of groundwater withdrawals and connections would be required, and (4) that any prior inconsistent conditions were superseded. Condition (1) has been withdrawn by Ecology. The third condition basically provides that a vested water right would be determined based upon actual application of water to beneficial use, not on system capacity. There is no question that this third condition reflected a significant change in the basis for issuance of a final certificate of water right. Appellant appealed the new conditions.

The Department appealed to superior court. That court reversed, holding that the Department had discretion to condition Appellant's permit extension by providing that a final certificate of water right would be issued in the amount of water actually put to beneficial use. The court held that beneficial use is not defined by the capacity of the system, that the determination of reasonable beneficial use will be made at the time a final certificate of water right is at issue, and then a certificate will issue for the instantaneous and annual quantity of water that has been put to actual beneficial use. The court further held, however, that Appellant appeals the superior court decision, and the Department cross-appeals, contending the superior court's definition of beneficial use is in error.

"[r]easonable use ... may include a recognition of variable conditions, including the capacity of a public water system's completed delivery system to the extent the water will be beneficially used for a normal increase in population within a reasonable period of time." CP at 399-400.

ANALYSIS

Proceedings before the Pollution Control Hearings Board are governed by the Administrative Procedure Act, RCW 34.05. When reviewing the Board's decision, this court sits in the same position as the superior court and applies the standards of review in RCW 34.05.570 directly to the agency record. Tapper v. Employment Sec. Dep't, 122 Wash.2d 397, 402, 858 P.2d 494 (1993). Where the construction of statutes is concerned, the court engages in de novo review under the error of law standard. City of Pasco v. Public Employment Relations Comm'n, 119 Wash.2d 504, 507, 833 P.2d 381 (1992); RCW 34.05.570(3)(d). As the agency charged with administration of the relevant statutes, Ecology's interpretation of those statutes is entitled to great weight if they are ambiguous. Pasco Police Officers Ass'n v. City of Pasco, 132 Wash.2d 450, 458, 938 P.2d 827 (1997).

Determination of Water Right

Application of water to "beneficial use" and "perfection" of an appropriative right are terms of art, with well-established meanings in western water law. Water must actually be put to a beneficial use before a water right vests. "The principle that water must be used for a beneficial purpose is a fundamental tenet of the philosophy of water law in the West." Department of Ecology v. Acquavella, 131 Wash.2d 746, 755, 935 P.2d 595 (1997). "Beneficial use" refers to both the type of use and the measure and limit of the water right. Id.; Department of Ecology v Grimes, 121 Wash.2d 459, 468, 852 P.2d 1044 (1993); Neubert v. Yakima-Tieton Irrigation Dist., 117 Wash.2d 232, 237, 814 P.2d 199 (1991). In the present case, there is no doubt that water for Appellant's development is a beneficial use in the first sense, i.e., an acceptable "type of use" of water. It is the latter sense that is in dispute here. Appellant appears to equate system capacity with beneficial use insofar as the term means the measure and limit of the water right, and the Board agreed. This equation is in error. Relevant statutes, case law, and recent legislative history leave no doubt that quantification of Appellant's water right for purposes of issuing a final certificate of water right must be based upon actual application of water to beneficial use, not upon system capacity.

Water in Appellant's system will be drawn from wells, which means that the appropriated water is groundwater. Appropriations of public groundwater are governed by RCW 90.44. Issuance of a final certificate of groundwater right is provided for in RCW 90.44.080. Surface water provisions must also be examined because RCW 90.44.060 provides that statutes concerning surface water appropriations, RCW 90.03.250 through RCW 90.03.340, apply to groundwater appropriations, including issuance of groundwater permits and groundwater right certificates.

Although construction of a water supply system is necessary when appropriating water, the statutes also require actual application of water to beneficial use in order to perfect a water right. RCW 90.03.260 provides that an application for a permit to appropriate water shall include, among other things, the time within which water system construction will be completed "and the time for the complete application of the water to the proposed use. " (Emphasis added.) RCW 90.03.290 provides that a water right permit shall be issued if the Department finds that "there is water available for appropriation for a beneficial use, and the appropriation thereof as proposed in the application will not impair existing rights or be detrimental to the public welfare[.]" If these requirements are satisfied the Department "shall issue a permit stating the amount of water to which the applicant shall be entitled and the beneficial use or uses to which it may be applied...." Id.

RCW 90.03.320 provides that when a permit is issued, actual construction work on a project for which the permit has been granted shall commence within a reasonable time as prescribed by the...