Washington Supreme Court Issues Significant Vesting Decision
On December 29, the Washington Supreme Court issued Snohomish County, et al. v. Pollution Control Hearings Bd., a significant decision interpreting the statutory vested rights doctrine.
First, some necessary background: under the federal Clean Water Act, the state Department of Ecology (Ecology) is responsible for administering the National Pollutant Discharge Elimination System (NPDES) permitting program, including issuing permits for owners and operators of municipal separate storm sewer systems (or MS4s), among them many local jurisdictions.
At issue in this case was a provision in a 2013 MS4 permit requiring local jurisdictions to adopt a local storm water management program by June 30, 2015 that “shall apply to all [development] applications submitted after July 1, 2015 and shall apply to [development] projects approved prior [to] July 1, 2015, which have not started construction by June 30, 2020.”* Several local jurisdiction permittees and a building industry group appealed this portion of the permit to the Pollution Control Hearings Board (PCHB), claiming it violated the statutory vested rights doctrine by forcing them to retroactively apply new storm water regulations to completed development applications. The PCHB upheld the provision in the 2013 permit, but the Washington Court of Appeals reversed, holding that storm water regulations adopted pursuant to the permit are “land use control ordinances” within the meaning of the vested rights statutes (e.g., RCW 19.27.095 and RCW 58.17.033). In reaching this conclusion, the Court of Appeals rejected Ecology’s argument that the statutes do not apply to state-mandated environmental regulations. The court also dismissed Ecology’s federal preemption argument on the basis that Ecology had flexibility to achieve the federal requirements.
*Please note that in 2016 the permits were amended to use the term "applications" rather than "projects approved" for those applications submitted prior to the July 1, 2015 date in the original permit. This is consistent with the concept that vesting occurs at time of application, not at the time of project approval. The new permit language is below:
Phase I Permit: "The local program . . . shall apply to all applications submitted after June 30, 2015, and shall apply to applications submitted no later than June 30, 2015, which have not started construction by June 30, 2020."
Phase II Permit: "The local program . . . shall apply to all applications submitted on or after January 1, 2017 and shall apply to applications submitted prior to January 1, 2017, which have not started construction by January 1, 2022."
Washington Supreme Court’s Decision
The Washington Supreme Court, in a unanimous decision, reversed the Court of Appeals and held that local ordinances adopted to implement the MS4 requirements are not “land use control ordinances” within the meaning of the vested rights statutes and therefore not among the laws subject to the statutes’ protections. The court rejected arguments that “land use control ordinances” are ones that have a restraining or directing influence on the use of the land. Instead, the court concluded that “land use control ordinances” mean only those adopted as a matter of local discretion, not ordinances implementing a state mandate. Specifically, the court stated that:
[T]he vested rights doctrine grew out of a concern that municipalities were abusing their discretion with respect to land use and zoning rules. That concern is not present in the [MS4] Permit, as the State has mandated local governments to implement a storm water management program that may take the form of storm water regulations.
In the opinion, the court analyzed the legislative history of the vesting statutes. Specifically, the court determined that the exemption of State Environmental Policy Act (SEPA) requirements from the vesting statutes demonstrated legislative intent to limit the vested rights doctrine to local ordinances, not state or federally mandated requirements adopted through local ordinance. In reaching this conclusion, the court distinguished several prior vesting cases and looked to acts of the legislature showing it was aware of the 2013 permit requirement. In short, the court found that “[t]he storm water regulations are mandatory state regulations, rather than discretionary local regulations. The vesting doctrine therefore does not excuse compliance with the requirements of the 2013 [permit].”
Implications of this Decision
This case could have implications beyond state-permit-mandated storm water regulations. For example, local shoreline master programs are mandated by the Shoreline Management Act and must be approved by Ecology before being implemented by local governments, the Growth Management Act requires local jurisdictions to adopt regulations to protect environmentally critical areas, and the State Building Code mandates the core elements of local building codes. Indeed, one might be able to argue that most modern local development regulations are mandated by the Growth Management Act. Further litigation will determine whether the court’s rationale extends to those types of regulations.
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