Morse v. Oregon Division of State Lands

• Decision Date: 13 February 1979
• Citation: 285 Or. 197,590 P.2d 709
• Parties: , 9 Envtl. L. Rep. 20,459 John MORSE, Carmen Bader, Gary Bader, G. Gary Barnhart, Peter Gordon, Emily Ashworth, Marsha Brown, Richard Azmitoky, Betty Lindstrom, Al Peavey, Fran Peavey, Al Crocker, Raymonde Mattioli, Ron Potts, Sarah Bermen, David Smalley, Don Mosher, Forrest Taylor, Jack Crabtree, George Green, Karl N. Kujac, Lorance Eickworth, Clara Eickworth, Jim Sims, Horace Byler, Margaret Byler, Carol Ach, Bill Hillar, Oregon Shores Conservation Coalition, Bay Area Environmental Committee, Oregon Environmental Council, Southwestern Oregon Chapter of Steelheaders, Barry Oyler, Mark Lindemeyer, Leonard Hall, Holly Hall Kosikowski, Herman Lilienthal, Jean Lilienthal, Jim Fraser, Jack Vera, and Robert Moore, Respondents, v. OREGON DIVISION OF STATE LANDS, William S. Cox, Director of the Division ofState Lands, City of North Bend, and Western Bank, et al., Petitioners. CA 10946; SC 25912.
• Court: Oregon Supreme Court

Page 709

590 P.2d 709

285 Or. 197, 9 Envtl. L. Rep. 20,459

John MORSE, Carmen Bader, Gary Bader, G. Gary Barnhart,

Peter Gordon, Emily Ashworth, Marsha Brown, Richard

Azmitoky, Betty Lindstrom, Al Peavey, Fran Peavey, Al

Crocker, Raymonde Mattioli, Ron Potts, Sarah Bermen, David

Smalley, Don Mosher, Forrest Taylor, Jack Crabtree, George

Green, Karl N. Kujac, Lorance Eickworth, Clara Eickworth,

Jim Sims, Horace Byler, Margaret Byler, Carol Ach, Bill

Hillar, Oregon Shores Conservation Coalition, Bay Area

Environmental Committee, Oregon Environmental Council,

Southwestern Oregon Chapter of Steelheaders, Barry Oyler,

Mark Lindemeyer, Leonard Hall, Holly Hall Kosikowski, Herman

Lilienthal, Jean Lilienthal, Jim Fraser, Jack Vera, and Robert Moore, Respondents, v. OREGON DIVISION OF STATE LANDS, William S. Cox, Director of

the Division ofState Lands, City of North Bend,

and Western Bank, et al., Petitioners.

CA 10946; SC 25912.

Supreme Court of Oregon, In Banc.

Argued and Submitted Dec. 4, 1978.

Decided Feb. 13, 1979.

Peter S. Herman, Senior Counsel, Salem, argued the cause for petitioner Division of State Lands. With him on the brief were James A. Redden, Atty. Gen., Walter L. Barrie, Sol. Gen., and James C. Rhodes, Deputy Atty. Gen., Salem.

Donald J. Morgan, of Wood, Tatum, Mosser, Brooke & Holden, Portland, argued the cause and filed a brief for petitioner City of North Bend.

G. Jefferson Campbell, Jr., of Newhouse, Foss, Whitty & Roess, Coos Bay, argued the cause and filed a brief for petitioner Western Bank.

George T. Gant and Ronald L. Gould, of McNutt, Gant & Ormsbee, Coos Bay, filed a brief for the Port of Coos Bay as amicus curiae.

Bruce H. Anderson, of Coons & Anderson, Eugene, argued the cause and filed a brief for respondents.

HOLMAN, Justice.

The issue in this case is whether the Director of the Division of State Lands had authority to issue an estuarian land fill permit. The Court of Appeals held that the Director lacked authority to issue the permit, 34 Or.App. 853, 581 P.2d 520 (1978). This court granted the Director's petition for review.

Pursuant to Oregon's fill and removal law, ORS 541.605 to 541.665, the City of North Bend filed with the Division of State Lands an application for a permit to fill 32 acres of Coos Bay for the purpose of extending a runway at its municipal airport. The permit was granted and respondents, as persons claiming to be adversely affected by the proposed fill, requested a contested hearing. Following the hearing, the Director granted the application on the condition that the City mitigate the loss of estuarial resources by removing an old spoil island adjacent the permitted fill. Respondents sought judicial review and the Court of Appeals reversed, holding that the order was inconsistent with the Division's administrative rule requiring that land-fill projects be for a water-related purpose. Morse v. Division of State Lands, 31 Or.App. 1309, 572 P.2d 1075 (1977), rev. denied, 281 Or. 431 (1978). The parties are in agreement that the airport extension is not for a water-related use.

Thereafter, the Director, by temporary rule, removed from the administrative regulations of the Division the requirement that fills be for a water-related activity. ¹ The City then renewed its application for the fill and, following a hearing on the permit in which the respondents participated, the Director issued a final order granting the renewed application. The testimony was largely that which had been taken pursuant to the previous application, and certain of the findings of fact made upon the first application were incorporated in the findings upon the second application. The Director found that the fill would reduce the water surface area and tidal prism of the Coos Bay estuary, that it would displace clams as well as other organisms and would eliminate some casual navigation of the recreational kind.

In an attempt to mitigate the harm to the estuary caused by the fill, the Director ordered the City to return certain diked submersible lands to the tidal influence rather than requiring a removal of the spoil island as directed on the first application. Respondents again appealed and the Court of Appeals held that the permit was beyond the authority of the Director because the public trust doctrine was intended to be incorporated into the statute and that the doctrine prohibited fills for nonwater-related uses. The opinion left open the question of whether the legislature has authority to modify the public trust doctrine. We granted review.

We agree that it is unnecessary to decide whether the legislature has authority to impinge upon the public trust doctrine but for a different reason than that given by the Court of Appeals. Contrary to that of the Court of Appeals, our conclusion is that the doctrine does not prohibit other than water-related uses in situations like the present one. Limitation upon the power of the state to permit alienation of the use of its waters is discussed in Shively v. Bowlby, 152 U.S. 1, 14 S.Ct. 548, 38 L.Ed. 331 (1894), and Illinois Central Railroad v. Illinois, 146 U.S. 387, 13 S.Ct. 110, 36 L.Ed. 1018 (1892). Illinois Central, which is considered to be the bellwether case, involved a situation in which the City of Chicago and the State of Illinois had granted the right to the railroad to the bed of Lake Michigan for an area a mile in length along the shore and a mile out into the lake, which encompassed substantially the entire lake bed available for the harbor of the city of Chicago. Because of the public interest, the Jus publicum, in the use of the waters, the court held that the governmental authorities had exceeded their power in granting the use of the bed of the lake to the railroad which could, for all practical purposes, impede navigation except as desired or permitted by the railroad. At the same time it confirmed the right of the railroad to fill and destroy the shallow part of the harbor which was not fit for practical navigation and even went so far as to send the case back to the lower court for a determination whether certain areas had sufficient depth to be navigable.

There is no claim in the present case that the fill for the airport covers a part of the bed of the bay over which the waters are used for other than very casual navigation of the recreational kind. ² It should also be pointed out that in Illinois Central the purported right had been given to private use and not to another public use as is the case here. Subsequently, Shively v. Bowlby, supra, defined the holding of Illinois Central as follows:

" * * * (I)t was recognized as the settled law of this country that the ownership of, and dominion and sovereignty over, lands covered by tide waters, or navigable lakes, within the limits of the several states, belong to the respective states within which they are found, with consequent right to use or dispose of any portion thereof, when that can be done without Substantial impairment of the interest of the public in such waters, and subject to the paramount right of Congress to control their navigation so far as may be necessary for the regulation of commerce. * * *." (Emphasis added.) 152 U.S. at 47, 14 S.Ct. at 565.

The dispute in Shively was over the ownership in tidelands, and the Supreme Court set forth the following language of the Supreme Court of Oregon in the same case, 22 Or. 410 at 427, 30 P. 154 " * * * The whole question is for the state to determine for itself. It can say to what extent it will preserve its rights of ownership in them, or confer them on others. Our state has done that by the legislation already referred to, and our courts have declared its absolute property in and dominion over the tide lands, and its right to dispose of its title in such manner as it might deem best, unaffected by any 'legal obligation to recognize the rights of either the riparian owners, or those who had occupied such tide lands,' other than it chose to resign to them, subject only to the paramount right of navigation and the uses of commerce. * * *." 152 U.S. at 56, 14 S.Ct. at 569.

The Supreme Court then said:

"By the law of the state of Oregon, therefore, as enacted by its legislature and declared by its highest court, the title in the lands in controversy is in the defendants in error; and, upon the principles recognized and affirmed by a uniform series of recent decisions of this court, above referred to the law of Oregon governs the case." 152 U.S. at 57, 14 S.Ct. at 569.

In a discussion of Illinois Central in Sax, "The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention," 68 Mich.Law.Rev. 473, 489 (1970), we find the following:

"The Supreme Court upheld the state's claim and wrote one of the very few opinions in which an express conveyance of trust lands has been held to be beyond the power of a state legislature. It is that result which has made the decision such a favorite of litigants. But the Court did not actually prohibit the disposition of trust lands to private parties; its holding was much more limited. What a state may not do, the Court said, is to divest itself of authority to govern the whole of an area in which it has responsibility to exercise its police power; to grant almost the entire waterfront of a major city to a private company is, in effect, to abdicate legislative authority over navigation."

The article states, after a review of the cases, that

" * * * what one finds in the cases is not a niggling preservation of every inch of public trust property against any change, nor a precise maintenance of every historical pattern of use. * * *.

" * * *.

"These traditional cases suggest the extremes of the legal constraints upon the states; no grant may be made to A private party if that grant is of such amplitude that the state will effectively have given up its authority to govern, but a grant is not illegal solely Because it diminishes in some degree the...