Benton Cty. Water Conservancy Bd. v. Dep't of Ecology

3 Wn.3d 59

[No. 101838-0. En Banc.]

Argued January 23, 2024. Decided April 11, 2024.

Benton County Water Conservancy Board, Petitioner, v. The Department of Ecology, Respondent.

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Stephens, J., delivered the opinion for a unanimous court. Owens, J., did not participate in the disposition of this case.

Nature of Action: A water conservancy board sought judicial review of the Department of Ecology’s refusal to accept and record certain administrative divisions of water rights.

Superior Court: The Superior Court for Benton County, No. 21-2-01214-03, Alex Ekstrom, J., on February 24, 2022, entered a summary judgment in favor of the board.

Court of Appeals: At 25 Wn. App. 2d 717 (2023), the court reversed the judgment and dismissed the petition for

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judicial review, holding that the board did not establish standing to challenge the department’s administrative division decisions.

Supreme Court: Holding that the board lacked standing to challenge the department’s administrative division decisions because the board did not demonstrate how it suffered injury-in-fact from the department’s refusal to accept certain administrative division forms pursuant to department policy, the court affirms the decision of the Court of Appeals.

James L. Buchal (of Murphy & Buchal LLP), for petitioner.

Robert W. Ferguson, Attorney General, and Matthew Janz and Clifford H. Kato, Assistants, for respondent.

¶1 Stephens, J. — While the Department of Ecology (Department) principally manages our state’s water resources, county water conservancy boards hold largely coextensive authority with the Department to process voluntary water right transfers between water right holders. This case focuses on the relationship between the Department and the Benton County Water Conservancy Board (Board) and requires us to determine whether the Board has standing under the Administrative Procedure Act (APA), ch. 34.05 RCW, to challenge a department policy concerning certain water right transfers.

¶2 We hold that the Board lacks standing to challenge Department Policy 1070, used to administratively confirm the division of a water right between multiple property owners who own land to which the water right is appurte-

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nant. The Board has not demonstrated how it suffered injury-in-fact from the Department’s refusal to accept certain administrative division forms pursuant to the policy. The Board suffered no prejudice and its interests would not be redressed by invalidating the policy. Accordingly, we affirm the Court of Appeals.

BACKGROUND FACTS AND PROCEDURAL HISTORY

¶3 The Department manages Washington’s water resources, in part, by processing water right transfers between water right holders. See RCW 90.03.380(1), .255. Water conservancy boards are county specific, independent, public entities, statutorily authorized to help "expedit[e] voluntary water [right] transfers." RCW 90.80.005(3), .020(1), .060(2). Boards hold largely the same authority as the Department to review water right transfer applications, subject to the Department’s mandatory oversight. RCW 90.80.055(1), (2), .080(4). The Department’s review of board actions is appealable to the Pollution Control Hearings Board. RCW 90.80.090; WAC 173-153-180.

¶4 RCW 90.03.380 permits water right transfers so long as "such change results in no increase in the annual consumptive quantity of water used under the water right," also known as historic beneficial use. To effectuate a transfer, a water right holder must file a change application with the Department. Id. This process requires public notice before the Department can grant the requested change. Id.

¶5 The Department also administers the state’s trust water rights program. RCW 90.14.140(2)(h). Water right holders may either temporarily or permanently transfer their water rights to the State for the state’s beneficial use. RCW 90.42.040(1), .080(1). The transfer of water rights into the trust program is necessarily independent of any transfer of land.

¶6 RCW 90.54.030(1)-(2) requires the Department to "[d]evelop a comprehensive water resource data program"

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including "an information management plan" and to "[c]ollect, organize[,] and catalog existing information and studies" about water resources in the state. The statute does not mandate that the Department record water right ownership information. Pursuant to RCW 90.54.030, the Department maintains information about all water right transfers, including those put into the trust program, in its water right tracking system.

¶7 When a water right is appurtenant to land shared by multiple property owners, the property owners may ask the Department to administratively confirm the division of the water right. The Department uses Policy 1070, titled "Administrative Policy for Recording the Agreed Division of Water Rights Among Multiple Property Owners," to track the division of a water right in these circumstances. Clerk’s Papers (CP) at 16. The result is a "superseding document describing [each property owner’s] share of the original water right." Id. at 17. Policy 1070 does not "convey any ownership rights outside of what is agreed to by" the property owners of the land. Id. at 22. It merely "clarif[ies] the apportioning of [the water] right[ ] as agreed to by all the property owners." Id. at 17.

¶8 The dispute at the heart of this case is evidenced by two administrative division requests. In 2015, Plymouth Ranch LLC placed portions of its water rights into the state’s trust program. Plymouth thereafter sold some of the land but retained the water rights. In 2020, Plymouth placed additional water rights into the trust program. In 2021, Plymouth sold a portion of the water rights in trust to Frank Tiegs LLC.

¶9 On Plymouth’s and Tiegs’s behalf, the Board filed an administrative division confirmation request under Policy 1070 with the Department. The Department rejected the request, citing "several technical deficiencies," including that (1) Tiegs did not own any land to which the water rights were appurtenant, (2) the division request listed incorrect parcel numbers, and (3) the division request

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lacked the signatures of three other property owners who owned the land to which the water rights were appurtenant. Dep’t’s Opening Br. at 12 (Wash. Ct. App. No. 38803-4-III (2022)). The Department claimed it did not deny the application because the water rights at issue were held in trust. To complete the water right transfer to Tiegs, the Department recommended the parties follow the public notice process in RCW 90.03.380. The Department also noted it was "unusual and outside the scope of a County Water Conservancy Board to file these administrative documents on behalf of applicants." CP at 32. Plymouth and Tiegs chose not to appeal the Department’s decision. Tiegs instead filed a new application with the Board pursuant to the recommended process set out in RCW 90.03.380.

¶10 In a prior instance in 2012, the Department denied an administrative division request filed by the Board for T&R Farms Inc. on the ground that the request violated RCW 90.03.380.¹ The Board filed a writ of mandamus in superior court in 2013. Finding that the Department’s role in processing the division of water rights was merely ministerial, the court required the Department to accept the administrative division. The Department did not appeal. The 2012 request did not reference whether water rights had been placed in the trust program.

¶11 In 2021, the Board sought judicial review of what it described as the Department’s categorical "refusal … to administratively confirm division of water rights ‘parked’ in … [the] trust water program." Id. at 1, 3. Referring to its disagreements with the Department with respect to the T&R Farms and Plymouth/Tiegs division requests, the Board claimed the Department’s "ongoing refusal to administratively confirm changes in water rights ownership [was] arbitrary and capricious, … causing … injury to the Board’s performance of its statutory duties and to water

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rights holders of Benton County." Id. at 7. The superior court granted judicial review and the Board moved for summary judgment, seeking to enjoin the Department from declining the Board’s administrative division requests.

¶12 The Board filed a declaration by its chair, Darryll Olsen, in support of its motion. The declaration states that the Department’s actions "threaten[ ] to frustrate the orderly changes and transfers of water rights by voluntary changes in ownership among those appearing before [the Board]." Id. at 176. According to Olsen, it is "ordinary practice" for a water right conveyance to "remove[ ] appurtenancy to land," and applicants of such transfers often "seek an order from the Board approving use of the water right somewhere else."Id. at 176-77. He states that "[t]he most common type of application received by the Board" is that at issue in the Plymouth/Tiegs case, when a water right holder wants to "sell a portion of the water right to a new owner," and that these applications are "typically accompanied with or preceded by the filing" of an administrative division request with the Department. Id. at 177. The Department then inputs information from accepted administrative divisions into its water right tracking system, which the Board uses and relies on to "confirm water right ownership before accepting applications to change or transfer the use of the water right pursuant to RCW 90.03.380." Id. at 177-78, 230. Therefore, Olsen claims, the Department’s ongoing "refusal to record certain ownership changes in the System interferes with the [Board]’s processing of such applications, because the Board cannot process change/transfers that lack clear ownership information." Id. at 178-79.

¶13 At the summary judgment hearing, the Department argued that the Board lacked standing because it failed to prove injury-in-fact. The Department explained it had denied the...