City of Puyallup v. Pierce Cnty.

500 P.3d 216

CITY OF PUYALLUP, Appellant,

v.PIERCE COUNTY, a Washington governmental unit; Knutson Farms, Inc.; and Running Bear Development Partners, LLC, Respondents.

No. 54474-1-II

Court of Appeals of Washington, Division 2.

Filed December 14, 2021

Joshua Adam Whited, Peter J. Eglick, Eglick & Whited PLLC, 1000 2nd Ave. Ste. 3130, Seattle, WA, 98104-1046, Joseph N. Beck, City of Puyallup, 333 S Meridian, Puyallup, WA, 98371-5904, for Appellant.

Cort O'connor, Todd Andrew Campbell, Pierce County Prosecutor's Office, 955 Tacoma Ave. S Ste. 301, Tacoma, WA, 98402-2160, Margaret Yvonne Archer, William Theodore Lynn, Attorneys at Law, 1201 Pacific Ave. Ste. 2100, Tacoma, WA, 98402-4314, for Respondents.

PUBLISHED OPINION

Veljacic, J.

¶1 Pierce County issued a mitigated determination of nonsignificance (MDNS) under the State Environmental Policy Act (SEPA) for a warehouse distribution project bordering the City of Puyallup. Puyallup attempted to assume lead agency status so it could issue a determination of significance (DS) and prepare an environmental impact statement (EIS). The County refused to accept Puyallup's jurisdiction, and Puyallup sued. In City of Puyallup v. Pierce County , 8 Wash. App. 2d 323, 326-27, 438 P.3d 174 (2019), this court held that Puyallup had jurisdiction under SEPA regulation WAC 197-11-948, to assume lead agency status, issue a DS, and complete an EIS. On remand, the superior court adopted the County's proposed order and ruled that this court's opinion, consistent with WAC 197-11-948, rendered decisions that were based on the County's MDNS void, but allowed other County decisions related to this project to remain effective.

¶2 Puyallup appeals, arguing that the superior court's order is inconsistent with this court's opinion and asks us to hold that all County decisions on the project are void ab initio , and that the entire application process must start anew.

¶3 We conclude that neither the superior court's order, nor Puyallup's proposed order, correctly states the law. Accordingly, we reverse and remand for further proceedings.

FACTS

¶4 In 2014, Knutson Farms Inc. and Running Bear Development Partners LLC applied to Pierce County for approval of a warehouse and distribution facility bordering the City of Puyallup. Pierce County , 8 Wash. App. 2d 323, 438 P.3d 174. The project was within Puyallup's road and sewer infrastructure, and its approval was required for design elements pertaining to that infrastructure. Id . at 327, 438 P.3d 174. The County conducted its SEPA evaluation and issued an MDNS. Id . at 328, 438 P.3d 174.

¶5 Puyallup notified the County that it was assuming lead agency status, but the County refused to acknowledge Puyallup's jurisdiction over the project. Id . 329-30, 438 P.3d 174. The County subsequently approved the project's application. Id . at 330, 438 P.3d 174. Puyallup sued the County in superior court over the jurisdictional dispute. Id . The parties filed cross-motions for summary judgment, and the superior court granted the County's motion, ruling that Puyallup did not have jurisdiction to assume lead agency status. Id . ¶6 Puyallup appealed, and in its opinion, this court held that Puyallup had jurisdiction to assume lead agency status because the project application required approvals from Puyallup related to Puyallup's road and sewer infrastructure. Id . at 351-52, 438 P.3d 174. This court also held that an MDNS is equivalent to a DNS under WAC 197-11-948(1). Id . at 351, 438 P.3d 174. Before this court issued its opinion in that case, Puyallup separately appealed three decisions to the Pierce County Hearing Examiner under the County's administrative appeals procedure. First, Puyallup appealed the approval of the project's short plat. Second, Puyallup appealed the County's MDNS requesting that the County instead issue a DS. Third, Puyallup appealed the issuance of a permit to allow the project to construct a stormwater outfall into the Puyallup River. Such appeals were denied, and Puyallup appealed to the superior court under the Land Use Petition Act (LUPA), challenging multiple decisions within the County's short plat approval.

¶7 While the LUPA appeal was pending in superior court, this court, issued its opinion in Pierce County , which held that Puyallup could assume lead agency status. See 8 Wash. App. 2d 323, 438 P.3d 174. On remand to the superior court, both the County and Puyallup submitted proposed language for the order in the interest of establishing the legal effect of Puyallup assuming lead agency status. Puyallup's proposed order states:

All County reviews, decisions, permits, and approvals related to the Knutson Farms project are null and void ab initio. The underlying review processes may be recommenced once the Final EIS is issued by the City of Puyallup. Until then, all County reviews, decisions, permits, and approvals for the Knutson Farms warehouse project are on hold.

CP at 44.

¶8 The County's proposed order states:

Decisions by Pierce County based upon the MDNS issued for the Knutson Farms warehouse project are null and void, and the applications are returned to the status of pending applications. Pierce County shall issue no final decisions on the Knutson Farms warehouse project until an EIS is completed.

CP at 160.

¶9 The superior court adopted the County's order. Puyallup appeals the superior court's order.

ANALYSIS

I. STANDARD OF REVIEW

¶10 We review questions of law including statutory and regulatory interpretation de novo. Columbia Riverkeeper v. Port of Vancouver USA , 188 Wash.2d 80, 90, 392 P.3d 1025 (2017).

II. LEGAL PRINCIPLES OF SEPA

¶11 SEPA requires agencies to examine the environmental impacts of public and private projects prior to authorizing such projects. Pierce County , 8 Wash. App. 2d at 331, 438 P.3d 174. SEPA's regulatory framework designates a "lead agency" for projects, and such agency must conduct review of every project that may have an adverse environmental impact to determine the level of environmental impact analysis required to approve the project. Id . ; WAC 197-11-050.

¶12 The lead agency makes a threshold determination deciding whether the project requires an EIS and preparation of such statement, if required. WAC 197-11-050(2) ; WAC 197-11-797 ; WAC 197-11-330. The lead agency documents the threshold determination in a DNS, a DS, or a MDNS. WAC 197-11-310 ; WAC 197-11-350.

¶13 Issuing a DS recognizes that the project will have "a probable significant adverse environmental impact." WAC 197-11-360. By contrast, a DNS recognizes that the project will not have a probable significant adverse environmental impact. WAC 197-11-340. Similarly, an MDNS recognizes that due to mitigations identified in the determination, the project will not have a probable significant adverse environmental impact. WAC 197-11-350. Neither a DNS nor an MDNS requires an EIS, but a DS does. WAC 197-11-360 ; WAC 197-11-402(1).

¶14 After the lead agency issues a DNS or MDNS, an agency with jurisdiction may, upon review, assume lead agency status. WAC 197-11-948 ; Pierce County , 8 Wash. App. 2d at 345, 438 P.3d 174. Assuming lead agency status places the new agency into the same position as the former lead agency, and the regulation states in relevant part that "all other responsibilities and authority of a lead agency under this chapter shall be transferred to the new lead agency." WAC 197-11-948(3). Additionally, the regulations command the new lead agency to issue a DS and "expeditiously prepare an EIS." WAC 197-11-948(2)-(3). Additionally, under WAC 197-11-390(2)(b), "[t]he responsible official's threshold determination: ... Shall not apply if another agency with jurisdiction assumes lead agency status under WAC 197-11-948." Therefore, under the regulations, assuming lead agency status voids the prior lead agency's DNS or MDNS. WAC 197-11-390(2)(b) ; WAC 197-11-948(3).

¶15 A DNS or MDNS that fails to comply with SEPA is also void, and the lead agency that issued it must revisit the determination. See Weyerhaeuser v. Pierce County , 124 Wash.2d 26, 42, 873 P.2d 498 (1994) (holding an EIS was inadequate as a matter of law and therefore invalid and must be revised). Decisions based on a void determination are also void. See King County v. Wash. State Boundary Review Bd. , 122 Wash.2d 648, 667, 860 P.2d 1024 (1993).

¶16 However, the regulations and case law do not envision the application process starting over completely. See Weyerhaeuser , 124 Wash.2d at 42, 47, 873 P.2d 498 ; Klickitat County Citizens Against Imported Waste v. Klickitat County , 122 Wash.2d 619, 647, 632, 860 P.2d 390 (1993). In Weyerhaeuser , the court merely ruled that the inadequate EIS "must be revised." 124 Wash.2d at 47, 873 P.2d 498. The court did not hold or even imply that the existing reviews conducted as part of an inadequate SEPA process are also void.

¶17 Similarly, in Klickitat County , the court evaluated whether the lead agency violated SEPA when, per a court order invalidating the prior SEPA determination, it completed a revised EIS unusually quickly. 122 Wash.2d at 646-47, 860 P.2d 390. That court reasoned that the EIS was completed so quickly because the agency relied on information gathered in a prior process. Id . at 647, 860 P.2d 390. The court went on to conclude that the agency's use of such documents and reviews was "logical." Id . at 647, 860 P.2d 390.

¶18 The regulations similarly do not envision voiding all prior work conducted on a SEPA evaluation that has been voided. See WAC 197-11-948(2) ; WAC 197-11-070. Under WAC 197-11-948(2), upon an agency with jurisdiction assuming lead agency status, the regulation instructs that the new DS "shall be based only upon information contained in the environmental checklist attached to the DNS transmitted by the first lead agency." The entity empowered to issue a permit may make decisions throughout the application process so long as they do not "(a) Have an adverse environmental impact; or (b) Limit the...