STATE EX REL.(CAT) v. Murphy
| Decision Date | 08 April 2004 |
| Docket Number | No. 73745-2.,73745-2. |
| Citation | 151 Wash.2d 226,88 P.3d 375 |
| Parties | STATE ex rel. CITIZENS AGAINST TOLLS (CAT), a Washington non-profit Corporation, Appellant, v. Michael J. MURPHY, Washington State Treasurer and Chair of the Washington State Finance Committee; Douglas B. MacDonald, Secretary of Transportation; Washington State Department of Transportation; Aubrey Davis, Chair of the Washington State Transportation Commission; and the Washington State Transportation Commission, Respondents, and Tacoma Narrows Constructors, a Joint Venture, Intervenor. |
| Court | Washington Supreme Court |
Shawn Newman, Olympia, Preston Gates & Ellis, Stephen Smith, Seattle, for Appellant.
Christine Gregoire, Attorney General, Thomas Morrill, Deborah Cade, Assistant Attorneys General, for Respondents.
This case involves several challenges to construction of a second Tacoma Narrows Bridge. Citizens Against Tolls (CAT) seeks reversal of the trial court's grant of summary judgment in favor of Michael Murphy, Washington State Treasurer and Chair of the Washington State Finance Committee; Douglas MacDonald, Washington State Secretary of Transportation; Washington State Department of Transportation (WSDOT); Aubrey Davis, Chair of the Washington State Transportation Commission; and the Washington State Transportation Commission (WSTC) (collectively, the State). The principal issues are (1) whether the State violated existing state bidding laws when WSDOT executed a design-build agreement and the personal service contracts relating to the Tacoma Narrows Bridge project, (2) whether Engrossed House Bill (EHB) 2723 conflicts with RCW 47.10.846, (3) whether the State violated chapter 47.05 RCW (), and (4) whether EHB 2723 violates article II, section 19 of the Washington Constitution. We conclude that summary judgment was properly granted and affirm the trial court.
In 1993, the legislature enacted the Public-Private Transportation Initiatives act (PPI Act). Ch. 47.46 RCW. Under the PPI Act, the secretary of transportation is authorized to select up to six demonstration project proposals from private entities, so that the private entities can work with WSDOT on public projects. RCW 47.46.030. The construction of the second Tacoma Narrows Bridge was one of the six projects selected under the PPI Act.
In May 1994, three separate firms submitted proposals for the second Tacoma Narrows Bridge after WSDOT sent requests for proposals to interested parties. In August 1994, WSDOT selected a proposal submitted by United Infrastructure Washington (UIW). On June 15, 1999, WSDOT executed a development agreement with UIW (original UIW agreement). Under that agreement, UIW was responsible for developing and financing the project as well as for hiring all necessary contractors, including a design-build contractor.
On July 6, 1999, Peninsula Neighborhood Association (PNA), a nonprofit corporation from Gig Harbor, filed a lawsuit against WSDOT, alleging that the PPI Act is unconstitutional and that WSDOT violated various state laws in developing the Tacoma Narrows Bridge project. On November 9, 2000, this court found that the PPI Act is constitutional but that WSDOT violated former RCW 47.56.270 (1983), former RCW 47.56.271 (1983) and RCW 47.56.240 because the original UIW agreement allowed UIW to toll the existing Tacoma Narrows Bridge and to fix toll rates. State ex rel. Peninsula Neighborhood Ass'n v. Dep't of Transp., 142 Wash.2d 328, 340-46, 12 P.3d 134 (2000). As a result, we found the original UIW agreement unenforceable. Id. at 347, 12 P.3d 134.
In July 2001, the legislature added a new requirement that WSDOT develop a competitive bidding process for soliciting a design-build contract. LAWS OF 2001, ch. 226, § 2; RCW 47.20.780.1 Then, in March 2002, the legislature passed EHB 2723, titled "AN ACT Relating to modifying the Public-Private Transportation Initiatives Act by authorizing state financing and administration of toll facilities; RCW 47.56.010, 47.46.030, 47.46.040, 47.46.050, 47.46.060, 47.56.030, 47.56.270, 47.56.271, 39.46.070, and 47.56.245; reenacting and amending RCW 43.84.092; adding new sections to chapter 47.46 RCW; and creating new sections." Laws of 2002, ch. 114; EHB 2723, 57th Leg., Reg. Sess. (Wash.2002). EHB 2723 took effect on June 13, 2002 and was aimed at removing impediments to construction of the second Tacoma Narrows Bridge, such as the prohibition against tolling the existing bridge, which resulted in this court's ruling in Peninsula Neighborhood Ass'n that the original UIW agreement was unenforceable. Final Legislative Report, 57th Leg., Reg. Sess. 112 (Wash.2002).
Under section 13 of EHB 2723, if a proposal is or has been selected, subsequent agreements may be made to implement portions of the proposal that modify the proposal or that do not incorporate all the features of the proposal. Any such modified agreement does not require the solicitation or consideration of additional proposals for all or any portions of the services rendered under that modified agreement. EHB 2723, § 13. Additionally, EHB requires that projects under the PPI Act comply with all applicable rules and statutes in existence at the time the agreement is executed. EHB 2723, § 14.
On July 16, 2002, WSDOT and UIW executed an amended development agreement (amended UIW agreement), modifying the original UIW agreement.2 Under the amended UIW agreement, WSDOT, rather than UIW, was responsible for hiring a design-build contractor. On the same day, WSDOT executed a design-build agreement (Design-Build Agreement) with Tacoma Narrows Constructors (TNC). Under the Design-Build Agreement, WSDOT was to pay $615 million to TNC. Additionally, it provided for a price increase of approximately $3 million for each month of delay with the first increase due on September 30, 2002.
WSDOT also concluded at least three personal service contracts between March and May 2002 relating to the Tacoma Narrows Bridge project.
On July 23, 2002, the Washington State Finance Committee, consisting of Governor Gary Locke, Lieutenant Governor Brad Owen, and State Treasurer Michael Murphy, met and passed a resolution approving the sale of $285 million in Referendum 49 bonds. RCW 43.33.010. Of that amount, $158 million would be used for the design and construction of the second Tacoma Narrows Bridge. Referendum 49 authorized the sale of bonds to finance transportation projects upon request by WSTC. RCW 47.10.843.
Under RCW 47.10.846, the bonds issued under Referendum 49 are a general obligation of the State. The principal and interest on the bonds shall be first payable from the proceeds of a state excise tax on motor vehicle and special fuels. Additionally, the statute provides that the legislature will continue to impose the taxes on motor vehicle and special fuels in amounts sufficient to pay, when due, the principal and interest on all bonds issued under Referendum 49. RCW 47.10.846.
Pursuant to EHB 2723, toll revenues derived from the bridge project will be used to reimburse the motor vehicle fund in the state treasury. EHB 2723, § 12. EHB 2723 also opened up the possibility of tolling the existing Tacoma Narrows Bridge. EHB 2723, § 21.
The state finance committee was scheduled to meet on September 18, 2002, to conduct the bond sale so that WSDOT could meet the "notice to proceed" requirement by September 30, 2002. Clerk's Papers (CP) at 153, 801. The sale of the bonds was necessary to cover progress payments and mobilization costs.
CAT is a nonprofit organization from Gig Harbor concerned about tolling as a result of the Tacoma Narrows Bridge project. On July 11, 2002, CAT sent a letter to the attorney general requesting legal action, alleging that EHB 2723 violates various state laws and the state constitution. After a couple of exchanges, the attorney general's office declined the request on August 14, 2002. On August 30, 2002, CAT filed suit against the State in Thurston County Superior Court. CAT claimed that (1) Referendum 49 violates article VIII, section 1(i) of the state constitution because the amount of the debt established by Referendum 49 was not approved by three-fifths of each legislative house;3 (2) the use of toll revenue to pay off the bonds financing the Tacoma Narrows Bridge project violates RCW 47.10.846; (3) EHB 2723 violates article II, section 19 of the state constitution; (4) the Design-Build Agreement and other personal service contracts related to the Tacoma Narrows Bridge project violate the state bidding laws; and (5) the Tacoma Narrows Bridge project violates the priority programming statute.
On September 3, 2002, the State moved for an order shortening time to hear its motion for summary judgment. However, the actual motion to shorten time was not filed until October 16, 2002. CAT received notice of the hearing on the morning of September 3, several hours before the hearing. The trial court granted the motion to shorten time and the State was ordered to file its motion for summary judgment by September 5, 2002. CAT's response was due on September 11, 2002. The State's reply was due on September 12, 2002. Oral argument on the motion was set on September 13, 2002.
In its motion for summary judgment, the State responded to CAT's claims but also contended that the statute of limitations had run for certain of these claims. CAT filed its response on September 11, 2002. In the meantime, CAT asked several legislators for their interpretation of EHB 2723, obtained a copy of the amended UIW agreement and the Design-Build Agreement, and identified three personal service contracts relating to the Tacoma Narrows Bridge project executed by WSDOT. The State's reply brief was filed on September 12, 2002, but CAT received it only on the morning of September 13, 2003, the date scheduled for oral argument. CAT resisted summary judgment, arguing that it needed...
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