Arbitrary and capricious: Rule of law binds agencies

Rob McKenna
Rob McKenna The Olympian

After five years and thousands of hours of public testimony, it took a Cowlitz County judge just five seconds to say what many of us have long suspected: some state regulators are out of control, and important parts of the state regulatory process are now tools of activist groups.

Cowlitz County Superior Court Judge Stephen Warning made his comments in response to a dispute over access to the Columbia River for the Millennium Bulk Terminals project. They suggest a level of frustration not often seen from the bench. The Millennium case is a striking example of how agency regulatory processes can be appropriated by activists seeking to deny or block projects that don’t align with their political agendas.

Judge Warning, though, saw through that strategy. His October ruling is based on the principle that the rule of law must be applied evenly, regardless of politics. Regulatory agencies must not exceed the authority granted to them by our elected representatives in the Legislature.

The dispute before Judge Warning involves a lease from our state Department of Natural Resources currently held by Northwest Alloys, and its sublease with Millennium Bulk Terminals. Millennium’s proposed coal export terminal in Longview, Washington, has been under local and state regulatory review for a record five years, and counting. At issue is whether Northwest Alloys and Millennium can build a dock under the lease.

Just prior to leaving office this year, former DNR Lands Commissioner Peter Goldmark denied the requested sublease, citing fiscal issues — not environmental issues — for the denial. Three activist groups, including Columbia Riverkeeper, Washington Environmental Council, and Sierra Club asked the court to consider environmental issues in reviewing Goldmark’s decision. In July, Warning denied them their request, noting that the lease denial must rest on the words in Goldmark’s denial letter.

Warning again took up the lease issue and whether DNR acted legally in denying the sublease. He did not mince words, calling DNR’s decision “arbitrary and capricious,” highlighting how out of line the DNR decision really was.

We’ve seen this sort of agency activism before on this particular project. In September, the State Ecology Director denied Millennium a water permit based on nine factors, none of which had anything to do with water. The director has taken to Twitter on multiple occasions to issue comments about the project, the tenor of which seems more befitting an activist than regulator.

All of this casts doubt on our state regulatory process. Businesses and individuals hoping for a fair and timely review of their projects in our state are now likely to think twice before starting a project here. In the case of Millennium, they’re five years and $15 million into this process. Other investors are unlikely to have this kind of time or money for such a protracted process.

Homeowners have also been affected by serious regulatory delays. Just ask rural landowners who have been dramatically affected by the Hirst water rights decision. They can share similar stories of wasted time and endless fees for wells they cannot dig, on land they cannot sell — dream homes that have become regulatory nightmares.

Abuse of the regulatory process further political aims is an affront to our democracy and must not go unchecked. Judge Warning said as much in as little as three words. Let’s hope they speak loud enough for all to hear them and end such abuse.

Rob McKenna served two terms as Washington’s attorney general. He is currently in private practice with Orrick, Herrington & Sutcliffe LLP, where he serves as a partner and co-chair of the firm’s public policy group.