Clallam County v. Western Washington Growth Management Hearings Board

¶1 Armstrong, J. — The Western Washington Growth Management Board (Board) invalidated Clallam County’s preexisting agricultural uses exemption from the County’s critical areas ordinance. The superior court reversed the Board. Protect the Peninsula’s Future appeals that ruling, arguing that the Growth Management Act, chapter 36.70A RCW, permits reasonable regulation of such uses and that the superior court erred in finding that substantial evidence did not support the Board’s decision. We reverse the trial court and remand to the Board. FACTS ¶ 2 On December 28, 1999, Clallam County (County) adopted Critical Areas Ordinance (CAO) No. 681, codified at chapter 27.12 of the Clallam County Code. Protect the Peninsula’s Future (PPF) and the Washington Environmental Council challenged portions of the ordinance before the Western Washington Growth Management Hearings Board. The Board found that Clallam County Code (CCC) 27.12.035(7), the subject of this appeal, substantially interfered with the Growth Management Act (GMA) goals. CCC 27.12.035(7) created an exemption from the critical areas ordinance for ongoing, preexisting agricultural uses in critical areas or their buffers. ¶ 3 The Board concluded that the County could not completely exempt ongoing agricultural uses from the GMA regulation because such uses significantly impacted the 130 environment. The Board also concluded that balancing the GMA’s goals and requirements could be done only for designated agricultural resource lands,1 not for all agriculture. |4 The Board found that CCC 27.12.035(7)’s exemption for existing agricultural activities was not limited to agricultural resource areas, was written too broadly, failed to protect critical areas, and did not comply with the GMA. It further found that the provisions of CCC 27.12.035(7), allowing existing and ongoing agricultural activities within the buffers established for major new development or within 50 feet of Type 5 waters, substantially interferes with the GMA’s goals to protect the environment and shorelines. See RCW 36.70A.020(10), .480; RCW 90.58.020. The buffers for major new development ranged from 150 feet to 50 feet for Type 1 through Type 4 streams.2 ¶ 5 On remand, the County limited CCC 27.12.035(7)’s agriculture exemption to lands classified as farm and agricultural land in the open space tax program created by chapter 84.34 RCW and required that all activities on the land comply with best management practices. The amended ordinance exempted: Existing and ongoing agriculture that was conducted prior to the effective date of this chapter on lands designated as critical areas or their associated buffers; provided, that such lands are classified as farm and agricultural land pursuant to Chapter 84.34 RCW; provided further, that all activities occurring on such lands employ best management practices (BMPs). For the purposes of this exemption, acceptable BMPs shall include: (a) activities carried out consistent with farm plans issued and authorized by the Natural Resources Conservation Service (NRCS); (b) activities that demonstrate consistency with total maximum daily loads (TMDL) established by the Department 131 of Ecology for specific operations; and/or (c) activities that demonstrate consistency with standard BMPs published by the NRCS, as now or hereafter amended. Written confirmation by the administrating agency that applicable BMPs are being met will constitute evidence of eligibility for this exemption. CCC 27.12.035(7). ¶ 6 On October 26, 2001, the Board ruled that the amended exemption still did not comply with the GMA. It found that reducing protection for critical areas solely because the areas qualified for open space taxation did not balance agricultural goals with critical area goals. The Board concluded that reducing the critical area protection for all properties enrolled in the open space taxation program (chapter 84.34 RCW) substantially interferes with Goal 10 of the GMA (protecting the environment and enhancing water quality and availability) and was not appropriately balanced by consideration of Goal 8 (maintaining and enhancing agriculture). ¶ 7 The County appealed the Board’s decision to Clallam County Superior Court. The court reversed the Board, concluding that it had “erroneously interpreted and applied the GMA and its decision was not supported by evidence that is substantial when reviewed in light of the whole record before the Court.” Clerk’s Papers at 7. PPF appeals only the agricultural exemption issue. ANALYSIS I. PPF’s Procedural Arguments ¶ 8 PPF argues that the County’s issues are barred by res judicata, collateral estoppel, and failure to exhaust administrative remedies. PPF reasons that the Board decided in January 2001 that the County’s agriculture exemption to critical areas did not comply with the GMA. The County did not appeal this decision, but reworked the ordinance. Thus, according to PPF, the County’s present appeal is barred. Further, PPF argues that the County did 132 not exhaust its administrative remedies because it failed to raise this issue of whether the GMA mandate to protect critical areas requires regulation of preexisting uses that harm these areas. The County responds that res judicata and collateral estoppel do not apply because this appeal is part of an ongoing proceeding and that it exhausted its administrative remedies. ¶ 9 Res judicata, or claim preclusion, applies to quasi-judicial administrative agency decisions. Lejeune v. Clallam County, 64 Wn. App. 257, 264-65, 823 P.2d 1144 (1992) (citing State v. Dupard, 93 Wn.2d 268, 274, 609 P.2d 961 (1980)). Collateral estoppel, or issue preclusion, also applies to these decisions. Christensen v. Grant County Hosp. Dist. No. 1, 152 Wn.2d 299, 307, 96 P.3d 957 (2004). Claim preclusion bars a party from asserting the same claim or cause of action in a subsequent proceeding. Hilltop Terrace Homeowner’s Ass’n v. Island County, 126 Wn.2d 22, 31, 891 P.2d 29 (1995). Issue preclusion bars relitigation of an issue in a subsequent proceeding involving the same parties, even if a different cause of action is asserted. Christensen, 152 Wn.2d at 306 (citing 14A Karl B. Tegland, Washington Practice: Civil Procedure § 35.32, at 475 (1st ed. 2003)). ¶ 10 A party must exhaust its administrative remedies before appealing to superior court. Citizens for Mount Vernon v. City of Mount Vernon, 133 Wn.2d 861, 866, 947 P.2d 1208 (1997) (citing RCW 34.05.534). Under RCW 36.70A.300(5), a party aggrieved by a final Board decision may appeal to superior court. Here, the October 26, 2001, order was the Board’s final decision.3 |11 The various stages of this litigation are part of a single proceeding. The County attempted to redraft its critical areas ordinance after the first Board decision and the County properly appealed to the superior court when the Board ruled against it a second time. After the superior 133 court reversed the Board, PPF appealed to this court. PPF’s procedural arguments fail. II. Standard of Review ¶ 12 In reviewing a superior court’s ruling on a Board decision, we apply the Administrative Procedure Act4 standards directly to the agency record. City of Redmond v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 136 Wn.2d 38, 45, 959 P.2d 1091 (1998) (citing Tapper v. Employment See. Dep’t, 122 Wn.2d 397, 402, 858 P.2d 494 (1993)). Under RCW 34.05.570(3)(d), we can grant relief if the agency has misinterpreted or misapplied the law — questions we consider de novo. Honesty in Envtl. Analysis & Legislation (HEAL) v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 96 Wn. App. 522, 526, 979 P.2d 864 (1999). Generally we give deference to an agency’s interpretation of the law if it has expertise in dealing with the issue. HEAL, 96 Wn. App. at 526. We can also grant relief from a Board decision if substantial evidence does not support it. RCW 34.05-.570(3)(e). Substantial evidence is evidence sufficient to persuade a fair-minded person that the Board’s order is correct. HEAL, 96 Wn. App. at 526. The party challenging the agency action bears the burden of showing that the action is invalid. RCW 34.05.570(l)(a). Here, the County bears the burden of demonstrating that the Board’s decision was invalid. But because the legislature has clearly stated its intent to give counties considerable discretion in land use planning under the GMA, we give no deference to a “board’s ruling that fails to apply this ‘more deferential standard of review’ to a county’s action.” Quadrant Corp. v. State Growth Mgmt. Hearings Bd., 154 Wn.2d 224, 238, 110 P.3d 1132 (2005). III. Preexisting Agricultural Uses ¶ 13 PPF argues that the GMA requires the County to regulate preexisting agricultural uses in critical areas. The 134 County disagrees. No court has decided whether the GMA allows reasonable regulation of preexisting agricultural uses located in designated critical areas. fl4 Under the GMA, cities and counties with certain populations and rates of growth must adopt development regulations “to assure the conservation of agricultural, forest, and mineral resource lands.” RCW 36.70A.060(1). Regulations adopted under subsection (1) “may not prohibit uses legally existing on any parcel prior to their adoption.” RCW 36.70A.060(1). The GMA also requires all counties to adopt development regulations for critical areas. RCW 36-.70A.060(2). “Critical areas” include (a) wetlands, (b) areas with a critical recharging effect on aquifers used for potable water, (c) fish and wildlife habitat conservation areas, (d) frequently flooded areas, and (e) geologically hazardous areas. RCW 36.70A.030(5). Counties must “include the best available science” when they develop their critical areas regulations and give special consideration to “conservation or protection measures necessary to preserve or enhance anadromous fisheries.” RCW 36.70A.172(1). When adopting development regulations, counties must balance numerous GMA goals. RCW 36.70A.020. One of these goals is to “[m]aintain and enhance natural resource-based industries, including productive . . . agricultural. . . industries [and] [e]ncourage the conservation of. . . productive agricultural lands.” RCW 36.70A.020(8). ¶ 15 Unlike RCW 36.70A.060(1), subsection (2) is silent on whether it applies to preexisting uses. PPF argues that this demonstrates the legislature’s intent that critical areas regulations apply to preexisting uses because it would have written in an exemption, as it did subsection (1), had it intended otherwise. f 16 Our primary goal in interpreting a statute is to determine and give effect to the legislature’s intent. King County v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 142 Wn.2d 543, 555, 14 P.3d 133 (2000) (quoting Nat’l Elec. 135 Contractors Ass’n v. Riveland, 138 Wn.2d 9, 19, 978 P.2d 481 (1999)). We begin with the statute’s plain language and ordinary meaning. King County, 142 Wn.2d at 555. And we interpret all the statutory provisions and their relation to each other to determine intent. Skagit Surveyors & Eng’rs, L.L.C. v. Friends of Skagit County, 135 Wn.2d 542, 564, 958 P.2d 962 (1998). ¶ 17 In passing the GMA, the State did not require all counties to adopt development regulations governing natural resource lands under RCW 36.70A.060(1). But it did require all counties, regardless of size and population, to adopt critical areas development regulations under RCW 36-.70A.060(2). And RCW 36.70A.060(2) does not contain subsection (l)’s exemption for preexisting uses.5 ¶ 18 Still, subsection (2) specifies development regulations, suggesting that the County must adopt regulations that concern only development proposals, necessarily a prospective concept. But section .030(7) defines “Development regulations” and “regulation” as “controls placed on development or land use activities.” And, section .172(1) requires counties and cities to use the best available science in “developing policies and development regulations to protect the functions and values of critical areas.” Thus, the GMA defines “development regulations” more broadly than simply future development regulations; it includes controls placed on land use activities. RCW 36.70A.030. And in protecting critical areas, counties and cities must use the best available science to promulgate not just development regulations, but policies intended to protect critical areas. RCW 36.70A.172. With this language, the legislature signaled its intent that the counties regulate critical areas, 136 including existing uses, to advance the GMA’s goals. RCW 36.70A.020. ¶ 19 As we have discussed, we generally give considerable deference to a Board’s interpretation of statutes with which it regularly deals. Ferry County v. Concerned Friends of Ferry County, 121 Wn. App. 850, 856, 90 P.3d 698 (2004), review granted in part by 153 Wn.2d 1016, 106 P.3d 243 (2005). The western and eastern Washington Boards have both interpreted the GMAto allow regulation of preexisting agricultural uses in critical areas. See, e.g., Friends of Skagit County v. Skagit County, No. 96-2-0025, W. Wash. Growth Mgmt. Hr’gs Bd. Final Dec. and Order (Wash. Jan. 3, 1997), 1997 WL 8935 at 7; Larson Beach Neighbors v. Stevens County, No. 03-1-0003, E. Wash. Growth Mgmt. Hr’gs Bd. Final Dec. and Order (Wash. Feb. 10, 2004), 2004 WL 3404211 at *14. ¶ 20 PPF argues that the only published decision addressing an agricultural exemption, Whidbey Environmental Action Network (WEAN) v. Island County, 122 Wn. App. 156, 181-82, 93 P.3d 885 (2004), review denied, 153 Wn.2d 1025 (2005),6 necessarily implies that the GMA’s mandate to protect critical areas applies to preexisting agricultural uses. ¶ 21 In WEAN, Island County adopted an agricultural exemption to its CAO for “ ‘[e]xisting and on-going agricultural activities when undertaken pursuant to best management practices to minimize impacts to critical areas.’ ” WEAN, 122 Wn. App. at 182 (alteration in original) (quoting Island County Code (ICC) 17.02.107(E)(1) (now codified at 17.02.040(E)(1)). The Board ruled that this exemption complied with the GMA as to land zoned rural agricultural. But it ruled that the County had inappropriately balanced nondesignated agricultural uses against critical area protections by applying the agricultural activities exemption to land in the general rural zoning classification. The court 137 affirmed the Board on a different basis, holding that the County had failed to produce evidence that there was a need to extend the exemption to more than just designated agricultural lands. WEAN, 122 Wn. App. at 183. Although WEAN did not consider the question before this court, it did not disapprove of regulating preexisting agriculture in critical areas. ¶ 22 We conclude that the plain language of chapter 36.70A RCW demonstrates the legislature’s intent that GMA counties and cities exercise some measure of control over preexisting uses in critical areas. Reading a broad exemption into critical areas regulation for preexisting uses would frustrate, not further, the legislature’s intent. IV. The Board’s Decision f23 Clallam sought to exercise such control by exempting certain agriculture from its critical areas ordinance. But the Board invalidated the exemption, finding that: [A]n important aspect of [the exemption] is that it is not limited to designated [agricultural resource land]. The exemption allows any “agricultural activity” lawfully operated prior to the effective date of the ordinance. While presumably the entire 7,500 acres of designated [agricultural resource land] would qualify, so would potentially thousands of other acres. The County has no way of knowing the extent of the exemption’s coverage, particularly given the lack of definition of “agricultural activities.” Administrative Record (AR), Index 9, at 10. f 24 The Board was particularly concerned that “adopting a process that involves reduction of CA [critical areas] protections for lots as small as 1 acre is not a proper, nor allowable, balancing of GMA goals.” AR, Index 30, at 10. ¶ 25 The Board may have been at least partially mistaken, however. As of May 2001, the County had identified 6,995 acres of agricultural resource land and 21,753 acres of chapter 84.34 RCW qualified land. The Board’s record also included a transcript of a Clallam County Board of Com 138 missioners’ work session in which a planning biologist estimated that even less land (about 15,000 or 16,000 acres) would qualify in 2002. V. Chapter 84.34 RCW ¶ 26 The County argues that limiting the agriculture exemption to chapter 84.34 RCW qualified land is consistent with the GMA’s goals of maintaining natural resource industries, retaining open space, and preserving historically significant lands. See RCW 36.70A.020; RCW 84-.34.010. RCW 84.34.010 provides: The legislature hereby declares that it is in the best interest of the state to maintain, preserve, conserve and otherwise continue in existence adequate open space lands for the production of food.... The legislature further declares that assessment practices must be so designed as to permit the continued availability of open space lands for these purposes. ¶ 27 The purpose of chapter 84.34 RCW is “to encourage owners to retain their land for farm use and to resist the trend to sell agricultural land for urban subdivision.” Van Buren v. Miller, 22 Wn. App. 836, 837, 592 P.2d 671 (1979). The statute recognizes:7 that if farmland adjacent to a city is assessed at its highest and best use upon comparable sales of adjacent farmland which is being used for urban purposes, the assessed value would be grossly disproportionate to the use. Thus, as to land which is in open spaces, the assessment is to be reached considering not comparable sales of similar land to real estate developers, but rather by comparable farm leases made by other farmers of their land. Van Buren, 22 Wn. App. at 837-38. 139 ¶ 28 Under the GMA, counties must balance protecting the environment (including water quality) and maintaining natural resource industries including agriculture. See RCW 36.70A.020(8), (10). In 1997, the legislature replaced the preponderance of the evidence standard of review for local GMA regulations in RCW 36.70A.320(3) with the more deferential clearly erroneous standard. Laws or 1997, ch. 429, § 20. It did so “[i]n recognition of the broad range of discretion that may be exercised by counties . . . consistent with the requirements of [the GMA].” RCW 36.70A.3201. And the legislature “intend [ed] for the boards to grant deference to counties and cities in how they plan for growth, consistent with the requirements and goals of [the GMA].” RCW 36.70A.3201. The “ultimate burden and responsibility for . . . harmonizing the planning goals” of the GMA rests with each county. RCW 36.70A.3201. ¶ 29 The Board has apparently adopted a policy favoring exemptions to critical areas ordinances only for designated agricultural resource lands. Island County Citizens’ Growth Mgmt. Coalition v. Island County, No. 98-02-0023c, W. Wash. Growth Mgmt. Hr’gs Bd. Compliance Hearing Order (Nov. 17, 2000), 2000 WL 1729640 at 6, and Final Dec. and Order (June 2, 1999), 1999 WL 396745 at *32-33; Friends of Skagit County v. Skagit County, No. 96-2-0025, W. Wash. Growth Mgmt. Hr’gs Bd. Compliance Hr’g Order (Sept. 16,1998), 1998 WL 637160, at *23. To the extent the Board decided that the County’s exemption must be limited to designated resource lands, it erred. Such a policy runs counter to the GMA’s emphasis on balancing the goals of preserving farmlands and protecting the environment and fish and wildlife — a balancing that the County is entitled to engage in with its local circumstances in mind; and a balancing to which the Board must give the County considerable deference. See Quadrant, 154 Wn.2d at 237-38. ¶ 30 Moreover, the GMA specifically recognizes the importance of rural lands and rural character. RCW 36-.70A.011. The legislature has found that in defining its rural element, a county should foster land use patterns that 140 preserve rural lifestyle and provide opportunities for small-scale, rural-based employment and self-employment. RCW 36.70A.011. A county must include in its GMA plan a rural element containing land not designated agriculture, which rural element “shall permit rural development, forestry, and agriculture in rural areas.” RCW 36.70A.070-(5)(b). These policy statements show a legislative intent to foster both designated agriculture under RCW 36.70A.170 and rural agriculture that is not designated. We conclude that the County may balance the preservation of nondesignated agriculture against preservation of the environment under critical areas regulation. Accordingly, the County may frame its critical areas exemption more broadly than to include just designated farm land. ¶ 31 This is not to say that the Board must approve the County’s current exemption plan. If the County, to meet its local conditions, wants to exempt a number of small farms, it must then show that by using best available science it has tailored the exemption to reasonably ameliorate potential harm to the environment and fish and wildlife. And the regulations must specifically address any threatened harm peculiar to the number and size of farms exempted. If the Board finds that the County has not met this burden, on remand the County may either reduce the amount of exempt land or more strictly control the more broadly exempted land. ¶ 32 In conclusion, we hold that the Board correctly ruled that preexisting agricultural uses are not exempt from all critical areas regulation. The Board erred in ruling that the County may exempt only designated agricultural resource land from full critical areas regulation. The County may expand its exempt agricultural land to meet its local conditions. But the County must balance such expanded exemption with corresponding restrictions that take into account the specific harms threatened by the expanded class of farm lands. Because the Board has not yet addressed the County’s BMP (best management practices) restrictions, we do not address the parties’ arguments on this issue. 141 ¶ 33 We affirm in part, reverse in part, and remand to the Board for further proceedings. Houghton, J., concurs. Footnotes [1] The GMA required, counties and cities to designate agricultural resource lands, i.e., “Agricultural lands that are not already characterized by urban growth and that have long-term significance for the commercial production of food or other agricultural products.” RCW 36.70A.170(l)(a); see also RCW 36-.70A.060G). [2] See CCC 27.12.900(67)(a)-(e). [3] PPF cites to a “January 2001” final order at “AS, 6,” but it appears to have confused this with the final order of October 26, 2001 at Administrative Record 9. [4] Ch. 34.05 RCW. [5] The original House bill did exempt existing uses from critical areas regulation. But the exemption was removed from the final bill. A legislative report explains that “The restriction is removed from the GMA that interim development regulations to protect natural resource lands and critical areas may not prohibit prior permitted uses. Interim development regulations to protect natural resource lands may not prohibit uses legally existing on any parcel prior to the adoption of the interim development regulations.” H.R. 52-1025, 52nd Wash. Leg., 1st Spec. Sess., at 4 (1991). Thus, the legislature intended to prevent interim natural resource land regulations from prohibiting existing uses but not critical areas regulations. [6] The parties cite to the previous opinion in this case, which appeared at 118 Wn. App. 567, 76 P.3d 1215 (2003), but that opinion was superseded on June 7, 2004, by this noted opinion. The original references to rural residential zoning were changed to general rural zoning. [7] RCW 84.34.065 provides in relevant part: The true and fair value of farm and agricultural land shall be determined by consideration of the earning or productive capacity of comparable lands from crops grown most typically in the area averaged over not less than five years, capitalized at indicative rates. The earning or productive capacity of farm and agricultural lands shall be the “net cash rental,” capitalized at a “rate of interest” charged on long term loans secured by a mortgage on farm or agricultural land plus a component for property taxes.