Conservation Northwest v. Franz

• Court: Washington Supreme Court
• Decided: July 21, 2022
• Docket: 99183-9
• Status: Published

Opinion

NOTICE: SLIP OPINION (not the court’s final written decision)

The opinion that begins on the next page is a slip opinion. Slip opinions are the written opinions that are originally filed by the court. A slip opinion is not necessarily the court’s final written decision. Slip opinions can be changed by subsequent court orders. For example, a court may issue an order making substantive changes to a slip opinion or publishing for precedential purposes a previously “unpublished” opinion. Additionally, nonsubstantive edits (for style, grammar, citation, format, punctuation, etc.) are made before the opinions that have precedential value are published in the official reports of court decisions: the Washington Reports 2d and the Washington Appellate Reports. An opinion in the official reports replaces the slip opinion as the official opinion of the court. The slip opinion that begins on the next page is for a published opinion, and it has since been revised for publication in the printed official reports. The official text of the court’s opinion is found in the advance sheets and the bound volumes of the official reports. Also, an electronic version (intended to mirror the language found in the official reports) of the revised opinion can be found, free of charge, at this website: https://www.lexisnexis.com/clients/wareports. For more information about precedential (published) opinions, nonprecedential (unpublished) opinions, slip opinions, and the official reports, see https://www.courts.wa.gov/opinions and the information that is linked there. FILE For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. THIS OPINION WAS FILED IN CLERK’S OFFICE FOR RECORD AT 8 A.M. ON SUPREME COURT, STATE OF WASHINGTON JULY 21, 2022 JULY 21, 2022 ERIN L. LENNON SUPREME COURT CLERK

IN THE SUPREME COURT OF THE STATE OF WASHINGTON ) CONSERVATION NORTHWEST, ) WASHINGTON ENVIRONMENTAL ) No. 99183-9 COUNCIL, and OLYMPIC FOREST ) COALITION, En Banc ) Appellants, ) ) Filed :___________ July 21, 2022 MIKE TOWN, an individual; ) HOLLY KOON and MAX DUNCAN, ) a married couple; LINDA LORENZ, an ) individual, PETER BAHLS, an ) individual; SCOTT WALLACE, an ) individual, and MARCY GOLDE, an ) individual, ) Plaintiffs, ) v. ) ) COMMISSIONER OF PUBLIC LANDS, HILARY FRANZ (in her ) official capacity), WASHINGTON ) STATE DEPARTMENT OF ) NATURAL RESOURCES, and the ) WASHINGTON STATE BOARD ) OF NATURAL RESOURCES, ) ) Respondents, ) ) WAHKIAKUM COUNTY, PACIFIC ) COUNTY, SKAMANIA COUNTY, ) MASON COUNTY, LEWIS COUNTY, ) CONCRETE SCHOOL DISTRICT, ) QUILLAYUTE VALLEY SCHOOL ) DISTRICT NO. 402, NASELLE-GRAYS ) RIVER SCHOOL DISTRICT, ) DARRINGTON SCHOOL DISTRICT, ) CLALLAM COUNTY FIRE DISTRICT ) For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. No. 99183-9

NO. 4, CLALLAM COUNTY FIRE ) DISTRICT NO. 5, PORT OF PORT ) ANGELES, AMERICAN FOREST ) RESOURCE COUNCIL, and CITY OF ) FORKS, ) ) Intervenor-Respondents. ) )

WHITENER, J.—The respondents in this case, the Commissioner of Public

Lands, Washington State Department of Natural Resources, and the Board of

Natural Resources (collectively DNR) manage approximately three million acres of

forested state-owned lands. Although the precise acreage has fluctuated over time,

several hundreds of thousands of acres of land were initially granted to the State of

Washington by the federal government pursuant to the Omnibus Enabling Act of

1889, ch. 180, 25 Stat. 676 (Enabling Act). This significant land grant was made “for

the support of common schools” and other state institutions. Individual counties have

also granted land to the State pursuant to RCW 79.22.040 with the explicit

understanding that they are held in trust for the benefit of those counties (county

beneficiaries). RCW 79.64.110(1) (certain percentage of revenue generated from

leasing or selling resources from these lands must be distributed to county that

granted land in question). The case before us concerns DNR’s land management

strategies applicable to these federal land grants (“state lands”) and county land

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grants (“forest board lands”), which involves harvesting timber from these lands to

generate revenue for state institutions and counties.

The petitioners in this case, a group of individuals and nonprofit organizations

(collectively Conservation NW), challenge DNR’s land management strategies on

the grounds that they violate the mandate under Washington Constitution article

XVI, section 1 that “[a]ll the public lands granted to the state are held in trust for all

the people.” Conservation NW argues that DNR’s strategies prioritize maximizing

revenue from timber harvests and undercut its obligation to manage granted lands

for the broader public interest, which would be better served by prioritizing

conservation and efforts to mitigate climate change, wildfires, and land erosion.

DNR contends that it has a trustee obligation to manage the state and forest board

lands specifically for the state institutions enumerated in the Enabling Act and the

county beneficiaries. DNR acknowledges that its land management strategies do

generate revenue but not “at the expense of forest health,” as Conservation NW

suggests. Br. of Resp’ts at 32. DNR emphasizes that its strategies necessarily comply

with other laws, such as the Endangered Species Act, 16 U.S.C. §§ 1531-1544, and

the sustained harvest act, RCW 79.10.300-.340, which are designed to restrict timber

harvests to limit negative effects on our ecosystem.

The trial court dismissed Conservation NW’s lawsuit against DNR based on

its conclusion that County of Skamania v. State, 102 Wn.2d 127, 685 P.2d 576

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(1984), conclusively established that DNR was a trustee under the Enabling Act. As

discussed in Section III.A, infra, while Skamania correctly concluded DNR is

obligated as a trustee to manage state lands for the beneficiaries enumerated in the

Enabling Act, its holding is not determinative of the issues before us.

Although the Enabling Act did not use express trust language, its terms

restricting the disposition of state lands and the resources derived from those lands

demonstrate that the federal government intended the lands to be held in trust for the

benefit of enumerated state institutions. Our constitution, including article XVI,

section 1, was drafted in accordance with the provisions of the Enabling Act. The

general provision that granted lands must be held in trust for all Washingtonians

does not preclude DNR from exercising its discretion to generate revenue from

timber harvests on granted lands. Of note, DNR is expressly required by statute to

harvest timber from forest board lands and may conduct other compatible activities

in its discretion. As DNR emphasizes, generating revenue from timber harvests helps

boost local economies and maintain state institutions. Because the general

population of Washington stands to gain from increased economic, educational, and

governmental stability, DNR’s land management strategies do not violate article

XVI, section 1. Although there are likely multiple alternative ways to generate

revenue from state lands, because DNR’s land management strategies are neither

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unconstitutional nor arbitrary and capricious, we are not empowered to weigh in on

DNR’s exercise of its discretion in managing state and forest board lands.

We affirm the trial court’s dismissal of the case on the alternate grounds set

forth below.

I. FACTS AND PROCEDURAL HISTORY In January 2020, Conservation NW filed suit against DNR, 1 challenging two

resolutions approved by the Board of Natural Resources in December 2019, which

relate to the conservation of marbled murrelet 2 habitat as well as timber harvests on

state and forest board lands. The first was “Resolution No. 1559,” the Marbled

Murrelet Long-Term Conservation Strategy (Marbled Murrelet Strategy), which

replaced an interim conservation plan in DNR’s 1997 habitat conservation plan with

a long-term strategy to minimize and mitigate “any incidental take” of marbled

murrelet habitat through DNR’s other activities, including timber harvests, in

compliance with the Endangered Species Act, 16 U.S.C. § 1539. The second was

“Resolution No. 1560,” the sustainable harvest level calculation (“Harvest

Calculation”), which set the “sustainable harvest level” for timber culled from

“forested State Trust lands in Western Washington” in accordance with the public

1 Wahkiakum County and several other parties were permitted to intervene as defendants. 2 The marbled murrelet is a type of seabird that is recognized as a federally “threatened” species. Marbled Murrelet, WASH. STATE DEP’T OF NAT. RES., https://www.dnr.wa.gov/marbledmurrelet [https://perma.cc/45JS-NJVD].

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lands act, RCW 79.10.320. Clerk’s Papers at 277-79. The Harvest Calculation set an

annual harvest level of 465 million board feet of timber for fiscal years 2015-2024

to compensate for an arrearage in timber volumes from previous years, while also

complying with DNR’s other policies, including the Marbled Murrelet Strategy.

Conservation NW alleged that the Marbled Murrelet Strategy and the Harvest

Calculation violated DNR’s trust mandate under article XVI, section 1 to hold “[a]ll

the public lands granted to the state . . . in trust for all the people.” Id. at 10-12 (first

alteration in original). Conservation NW sought (i) declaratory judgment that DNR

was required under article XVI, section 1 “to not only manage forests to produce

revenue from timber harvest[s], but also to promote the broader public interest,”

(ii) constitutional writs of certiorari to review the Marbled Murrelet Strategy and the

Harvest Calculation, and (iii) invalidation of the two resolutions. Id. at 10, 62. The

Thurston County Superior Court dismissed the case on the merits, reasoning that

Skamania established that DNR was obligated as a trustee to manage state and forest

board lands for the state institutions enumerated in the Enabling Act and the county

beneficiaries.

Conservation NW timely sought direct review from this court, arguing that

the trial court’s dismissal was erroneous because Skamania’s holding is limited to

timber sales but not DNR’s management of granted lands. Conservation NW argues

that DNR does not owe a private trust duty that mandates revenue maximization for

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the benefit of the state institutions enumerated in the Enabling Act or the county

beneficiaries that have granted land under RCW 79.22.040; instead, Conservation

NW argues, DNR’s trustee obligation is to manage all granted lands for the benefit

of “all the people” of Washington pursuant to article XVI, section 1. Statement of

Grounds for Direct Review at 14-15. Conservation NW urges that prioritizing other

activities—instead of timber harvests—that would mitigate the damaging effects of

climate change, deforestation, and habitat degradation would better serve the

interests of “all the people.”

DNR contends that there is a clear trust obligation created by the Enabling

Act and RCW 79.22.040 that requires it to manage state and forest board lands for

the benefit of enumerated state institutions and counties. DNR urges that its land

management strategies do not conflict with its broader trust mandate under article

XVI, section 1 because timber harvests help fund public institutions and boost local

economies, and the general population of Washington (i.e., “all the people”) also

derives a benefit from the availability of timber-related jobs as well as having stable

and well-funded public systems of education and governance.

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II. ISSUES 1. Did the Enabling Act create a trust? 2. Do DNR’s land management strategies violate its obligations under article XVI, section 1 such that its Harvest Calculation and Marbled Murrelet Strategy should be reversed? III. ANALYSIS A. Creation of a trust under the Enabling Act The first issue before us is whether the Enabling Act created a trust, which is

a question of statutory interpretation we review de novo. Williams v. Tilaye, 174

Wn.2d 57, 61, 272 P.3d 235 (2012).3 Our primary objective is to give effect to the

legislative intent behind the Enabling Act by examining the plain language of the

statute and giving “it its reasonable interpretation.” Wash. Water Jet Workers Ass’n

v. Yarbrough, 151 Wn.2d 470, 477, 90 P.3d 42 (2004). We consider the ordinary

meaning of the words of the text “as determined at the time they were drafted” and

may refer to historical context of the provisions in question to guide our analysis. Id.

With respect to the Enabling Act, specifically, its provisions “should be given a

3 The parties do not contest that DNR has trust obligations to the county beneficiaries who granted land under RCW 79.22.040. One amicus urges that forest board lands are not implicated in article XVI, section 1 because they are the product of statute. See Br. of Amicus Curiae Wash. State Ass’n of Counties at 20-25. Although Conservation NW asserts that forest board lands are only “indirectly” affected by article XVI, section 1, we do not deem this to be a concession that forest board lands are not implicated in this appeal. Article XVI, section 1 broadly applies to “[a]ll the public lands granted to the state.” While this could only logically apply to the federal land grants at the time of drafting, the language does not limit its constitutional mandate to those lands and those lands alone. WASH. CONST. art. XVI, § 1 (asserting all public lands granted to State are held in trust and later applying restrictions on disposition of land specifically granted by federal government). We therefore consider DNR’s obligations under article XVI, section 1 with respect to both state and forest board lands, taking into account statutory requirements applicable specifically to forest board lands as necessary.

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liberal, and not a narrow and restricted, construction for the purpose of carrying out

its purpose and intent.” State ex rel. Bookstore v. Potts, 141 Wash. 110, 117, 250 P.

1090 (1926).

Several previous cases have referred to the lands granted by the Enabling Act

as being held in trust by the State. See, e.g., id. at 111-12 (“[T]he Enabling Act . . .

under which Washington territory became the state of Washington, made donations

of the public land owned by the Federal government to the state for various purposes,

one of which was for public buildings at the state capital. Under that act, to the land

thus donated the state became the absolute owner of the title, which it holds in trust

for the purposes therein specified.”); State ex rel. State Capitol Comm’n v. Clausen,

134 Wash. 196, 201, 235 P. 364 (1925) (“Although the state owns the lands, it holds

them in trust for a particular purpose . . . ‘there is a sacred obligation imposed on its

public faith.’” (internal quotation marks omitted) (quoting Alabama v. Schmidt, 232

U.S. 168, 173, 34 S. Ct. 301, 58 L. Ed. 555 (1914))); see also Pub. Util. Dist. No. 1

of Okanogan County v. State, 182 Wn.2d 519, 546-47, 550, 342 P.3d 308 (2015)

(PUD No. 1) (“We have interpreted [section 17 of the Enabling Act and article XVI,

section 1] as creating an enforceable trust with concomitant fiduciary duties on the

State.”); Skamania, 102 Wn.2d at 132 (“Every court that has considered the issue

has concluded that [the federal land grants under the Enabling Act] are real,

enforceable trusts that impose upon the State the same fiduciary duties applicable to

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private trustees.”); In re Rights to Waters of Stranger Creek, 77 Wn.2d 649, 650 &

n.1, 466 P.2d 508 (1970) (referring to federally granted lands as “public trust lands”

dedicated to support enumerated state institution beneficiaries in the Enabling Act).

No opinion has examined, however, precisely how the Enabling Act created a trust

when it did not use any express trust language; many of these opinions relied instead

on reasoning from other jurisdictions (and other enabling acts) to support the

conclusion that a trust exists. Bookstore, 141 Wash. at 111-12 (relying on Clausen,

134 Wash. at 201-02, which referenced Supreme Court and Fifth Circuit Court of

Appeals cases considering land grants to states of Alabama and Louisiana); PUD

No. 1, 182 Wn.2d at 547-58 (referencing Supreme Court decision interpreting

Arizona enabling act); Skamania, 102 Wn.2d at 132, 137 (referencing decisions

interpreting Arizona, New Mexico, and Oklahoma enabling acts and other federal

land grants in Alaska and Nebraska).

The Supreme Court’s decision in Papasan v. Allain, 478 U.S. 265, 269-70,

106 S. Ct. 2932, 92 L. Ed. 2d 209 (1986), made clear that other jurisdictions’

interpretation of their enabling acts does not necessarily determine DNR’s

obligations under Washington law. As the Supreme Court highlighted, despite

significant overlap in enabling acts over the decades, only some used express trust

language while others lacked such language and seemed to be “outright gifts” to be

held in fee absolute. Id. at 270, 289 n.18. Because “the interest transferred to the

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State depends on the federal laws that transferred that interest,” we must examine

this state’s Enabling Act to determine whether it created a trust. Id. at 289 n.18 (“If

the federal law provided for the transfer of an absolute fee interest, the lands are

owned outright by the State. On the other hand, if the federal law created a trust with

the State as a trustee, the State is bound to comply with the terms of that trust.”).

“A trust is created only if the settlor properly manifests an intention to create

a trust relationship.” RESTATEMENT (THIRD) OF TRUSTS § 13 (AM. L. INST. 2003);

accord In re Est. of Madsen, 48 Wn.2d 675, 678, 296 P.2d 518 (1956) (trust requires

“explicit declaration of trust or circumstances which show beyond doubt that a trust

was intended to be created”). Trusts in real property must be evidenced in writing,

Pacheco v. Mello, 139 Wash. 566, 573-74, 247 P. 927 (1926), but the settlor does

not need to use express trust language (i.e., “trust” or “trustee”) to create a trust.

RESTATEMENT (THIRD) OF TRUSTS § 13 cmt. b. Instead, express trusts may be created

by an “act of the parties” where one party accepts “property with the express or

implied understanding that he is not to hold it as his own absolute property, but to

hold and apply it for certain specified purposes.” Tucker v. Brown, 199 Wash. 320,

330-31, 92 P.2d 221 (1939) (emphasis added). In the absence of explicit trust

language, evidence of a settlor’s “intention to impose enforceable duties” weighs in

favor of finding that a trust exists. RESTATEMENT (SECOND) OF TRUSTS § 25 (AM. L.

INST. 1959).

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On February 22, 1889, the United States government passed the Enabling Act

to admit the states of Washington, Montana, North Dakota, and South Dakota to the

Union. The federal government granted Washington several hundreds of thousands

of acres of land “for the support of common schools” that were to be “held,

appropriated, and disposed of exclusively for the purposes” of those schools. 4

Enabling Act §§ 10, 17. The Enabling Act actually contemplated support for a much

broader group of institutions (not just schools), providing that granted lands were

intended to create and maintain a variety of state institutions, including charitable,

educational (universities, agricultural and scientific schools), penal, and reformatory

institutions as well as other government buildings. Id. §§ 11, 12, 16, 17.

The Enabling Act was a mechanism “to encourage western migration” by

providing new states, like Washington, with the means to generate and maintain a

permanent fund to support its public institutions. PUD No. 1, 182 Wn.2d at 547-58

(citing MATTHIAS NORDBERG ORFIELD, FEDERAL LAND GRANTS TO THE STATES

WITH SPECIAL REFERENCE TO MINNESOTA 41 (1915)); see Enabling Act §§ 11, 13.

4 Although information in the record varies regarding the precise acreage, DNR represents that it manages approximately three million acres of state forestlands. Br. of Beneficiary Resp’ts at 6; Br. of Resp’ts at 4; Clerk’s Papers at 10; Managed Lands, WASH. STATE DEP’T OF NAT. RES., https://www.dnr.wa.gov/managed-lands [https://perma.cc/EBP4-PA6D]. Several hundred thousand acres of these lands were granted to the State by various counties pursuant to RCW 79.22.040. Such lands are “held in trust and administered and protected by [DNR] in the same manner as other state forestlands,” but they do not fall under the Enabling Act. RCW 79.22.040; Chuckanut Conservancy v. Dep’t of Nat. Res., 156 Wn. App. 274, 287, 232 P.3d 1154 (2010). Unlike federally granted lands, revenue generated from forest board lands must be distributed to the county that granted the land. RCW 79.64.110; Chuckanut Conservancy, 156 Wn. App. at 287.

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To that end, the Enabling Act provided “[t]hat upon the admission of each of said

States into the Union” certain lands, excluding certain permanent reservations, “are

hereby granted to said States for the support of common schools.” Enabling Act § 10.

Sections 16 and 17 specified the quantities of land originally granted to the State,

providing 90,000 acres “for the use and support of agricultural colleges,” Enabling

Act § 16, and

[f]or the establishment and maintenance of a scientific school, one hundred thousand acres; for State normal schools, one hundred thousand acres; for public buildings at the State capital, in addition to the grant hereinbefore made for that purpose, one hundred thousand acres; for State charitable, educational, penal, and reformatory institutions, two hundred thousand acres.

Id. § 17. This section went on to provide that the State would not be entitled to any

other land grants except as specified in the Enabling Act and that “the lands granted

by this section shall be held, appropriated, and disposed of exclusively for the

purposes herein mentioned, in such manner as the legislatures of the respective

States may severally provide.” Id. The Enabling Act also imposed several

requirements on the State. First, it was to create and maintain a public school system.

Id. § 4. Second, the State was required to sell or otherwise dispose of granted lands

only by public sale and for full market value. Id. § 11. Third, in the event the State

elected to rent or lease the lands for certain agricultural, mineral, oil, gas, or

hydrocarbon exploration, or timber harvest purposes, it was required to distribute

the proceeds of these activities to maintain and support the enumerated state

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institutions. Id.5 Further, the Enabling Act provided that the federal government

would pay the State five percent of certain land sale proceeds “to be used as a

permanent fund, the interest of which only shall be expended for the support of

common schools.” Id. § 13.

These provisions make clear that the federal government intended to create a

trust whereby the State accepted control of the granted lands with the express

understanding that the lands were not its absolute property but, instead, were to be

held and used exclusively for the enumerated purposes. See Tucker, 199 Wash. at

330-31; RESTATEMENT (THIRD) OF TRUSTS § 13; RESTATEMENT (SECOND) OF

TRUSTS § 25; see also PUD No. 1, 182 Wn.2d at 536 (State may hold property either

in “‘a proprietary capacity, as individuals generally hold property,’” or in “‘a

governmental capacity, that is, in trust for the public use’” (quoting State v. Super.

Ct., 91 Wash. 454, 458, 157 P. 1097 (1916))). Although the Enabling Act in and of

itself “had no binding effect, for it was no more than a proposition or offer of a

contract,” its provisions became legally enforceable “after the state had accepted the

terms of the enabling act by framing and passing a constitution, and Congress had

approved the constitution, and the president of the United States had issued a

proclamation to that effect.” Boeing Aircraft Co. v. Reconstruction Fin. Corp., 25

5 As amended by Pub. L. No. 91-463, 84 Stat. 987 (1970); Pub. L. No. 90-41, 81 Stat. 106 (1967); 62 Stat. 170 (1948); 47 Stat 150 (1932).

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Wn.2d 652, 658, 171 P.2d 838 (1946). The federal government specifically

conditioned admission to the Union on the State’s creation of a constitution and form

of government that complied with “all the provisions of [the Enabling Act],”

Enabling Act § 8, and the state accepted these conditions in framing its constitution.6

The Washington Constitution was ratified approximately seven months after

the Enabling Act was passed and provided, in part, that “[a]ll the public lands granted

to the state are held in trust for all the people.” WASH. CONST. art. XVI, § 1. Article

XVI, section 1 governs the “disposition of” school and granted lands and requires

that any sale or other disposition of said lands must be for “the full market value of

the estate or interest disposed of.” Id. Subsequent sections govern the “manner and

terms of sale” of public lands, investment of the permanent common school fund

(which was contemplated by section 11 of the Enabling Act), and investment of

higher education permanent funds. WASH. CONST. art. XVI, §§ 2-6.

6 The Enabling Act provided:

[a]nd if the constitutions and governments of said proposed States are republican in form, and if all the provisions of this act have been complied with in the formation thereof, it shall be the duty of the President of the United States to issue his proclamation announcing the result of the election in each, and thereupon the proposed States which have adopted constitutions and formed State governments as herein provided shall be deemed admitted by Congress into the Union under and by virtue of this act on an equal footing with the original States from and after the date of said proclamation.

Enabling Act § 8.

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On November 11, 1889, President Benjamin Harrison proclaimed “the fact

that the conditions imposed by Congress on the State of Washington to entitle that

State to admission to the Union have been ratified and accepted and that the

admission of the said State into the Union is now complete.” Proclamation No. 8, 26

Stat. 1552-53 (Nov. 11, 1889).

The federal government was clear in its intent regarding the State’s perpetual

duty to hold and manage granted lands for specified purposes, and the State’s

acceptance of this duty is proved by the fact of its admission to the Union. It is

important to note that although Conservation NW refers to article XVI, section 1 as

a “constitutional trust mandate,” our constitution did not, in and of itself, create a

trust. As discussed above, trusts require a grant of property by a trust settlor; only

the federal government and various counties have granted land to the State, not the

State itself. Article XVI, section 1, therefore, is better understood as a reflection of

an existing trust mandate. In this case, the only logical conclusion is that article XVI,

section 1 recognizes the trust mandate that was created by the Enabling Act.

Accordingly, we hold that the Enabling Act created a trust for the beneficiaries

enumerated therein. 7

7 Our conclusion is reinforced by the fact that our legislature has recognized that “state lands” are held in trust for the enumerated state institutions originally set forth in the Enabling Act (schools, universities, agricultural colleges, scientific schools, government buildings, and charitable, educational, penal, and reformatory institutions). RCW 79.02.010(15) (governing public lands management). Further, although not determinative of DNR’s trust obligations under Washington

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B. DNR’s obligations as trustee and under article XVI, section 1 Now that we have determined that a trust was created by the Enabling Act,

the sole issue in dispute is whether DNR’s challenged land management strategies—

the Harvest Calculation and the Marbled Murrelet Strategy—violate its obligations

under article XVI, section 1. We begin by reciting the general duties DNR bears as

a trustee.

The creation of a trust imposes several key duties on the trustee. The trustee

must carry out the intent of the settlor as determined by the terms of the trust.

RESTATEMENT (THIRD) OF TRUSTS § 76; see Townsend v. Charles Schalkenbach

Home for Boys, Inc., 33 Wn.2d 255, 261-62, 205 P.2d 345 (1949) (“If the trustees

law, our conclusion also finds support in decisions from Montana, North Dakota, and South Dakota, which were admitted to the Union under the same Enabling Act as Washington. The highest court of each of these states has held that the Enabling Act created a trust and that federally granted land was to be held in trust for the beneficiaries enumerated in the act. Bryant v. Bd. of Exam’rs, 130 Mont. 512, 515, 305 P.2d 340 (1956) (“As to all these lands Montana takes title as does a trustee of an express trust, charged with the duty of devoting the trust property both the corpus and the income to the purpose specified in the instrument (here the Enabling Act) by which the trust is created.”), overruled on other grounds by State v. State Bd. of Exam’rs, 131 Mont. 188, 194, 309 P.2d 336 (1957); State ex rel. Bd. of Univ. & Sch. Lands v. City of Sherwood, 489 N.W.2d 584, 585 (N.D. 1992) (“When North Dakota was admitted to the Union in 1889, it received several million acres of land from the public domain for the support and maintenance of schools. This land, commonly known as school trust land, is held in trust by the State and carries numerous restrictions upon transfer.” (citations omitted)); Kanaly v. State ex rel. Janklow, 368 N.W.2d 819, 821-22 (S.D. 1985) (“Several provisions of the Enabling Act empowered the new state to designate and dedicate various acreages of federal land to different educational institutions on the condition that the proceeds of any disposition constitute a permanent fund for the support of the public schools for which the land had been granted. The South Dakota Constitution, adopted in 1889, mirrored the permanent trust fund requirement of the Enabling Act. Article VIII, § 7, of the South Dakota Constitution provides that all lands or money received for educational or charitable institutions from the United States or other sources, and the proceeds therefrom, shall remain perpetual funds, and shall be inviolably used for the specific objects of the original gifts.”).

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refuse or fail to carry out the intention of the creator of the trust, it is the duty of

courts of equity to require them to act or to appoint other trustees in their stead.”).

The trustee owes a duty of undivided loyalty to trust beneficiaries (i.e., the essential

purpose of the trust) designated by the settlor of the trust. RESTATEMENT (SECOND)

OF TRUSTS §§ 169-85; Skamania, 102 Wn.2d at 134; Monroe v. Winn, 16 Wn.2d

497, 508, 133 P.2d 952 (1943). With respect to trusts in land, specifically, the trustee

owes a general duty “to use reasonable care and skill to make the trust property

productive” through leasing or managing it to generate income. RESTATEMENT

(SECOND) OF TRUSTS § 181 & cmt. a (noting terms of trust will dictate whether

trustee must use land to generate income, give beneficiaries possession of land, or

simply hold land without generating income as in the case of temporary trusts).

Finally, if a trust instrument gives the trustee discretion with respect to the

management of the trust property, the trustee’s exercise of discretion is subject to

the court’s control only when necessary to prevent an abuse of that discretion.

RESTATEMENT (SECOND) OF TRUSTS § 187 & cmt. a; see Monroe, 16 Wn.2d at 508.

As Conservation NW points out, “[t]he question of how granted lands are held

was left entirely to the State of Washington.” Appellants’ Opening Br. at 22. The

Enabling Act, while providing that “the lands granted by this section shall be held,

appropriated, and disposed of exclusively for the purposes herein mentioned,” left

the precise manner of such holding, appropriation, and disposition (i.e., the day-to-

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day management of the trust) to the discretion of our legislature. Enabling Act § 17

(granted lands to be controlled “in such manner as the legislatures of the respective

States may severally provide”). Our legislature created DNR as an agent of the State

to oversee and carry out the management of “forest and land resources in the state,”

including the state and forest board lands at issue. RCW 43.30.010.

Because DNR is an administrative agency of the State, we review de novo its

land management strategies to discern whether DNR “has exercised its discretion in

accordance with [the] law.” RCW 34.05.574(1); Wash. Indep. Tel. Ass’n v. Wash.

Util. & Transp. Comm’n, 149 Wn.2d 17, 24, 65 P.3d 319 (2003). We will reverse

DNR’s actions only if Conservation NW, as the party bearing the burden of proof,

has shown them to be unconstitutional, in excess of DNR’s statutory authority,

arbitrary and capricious, or performed without legal authorization. RCW

34.05.570(1)(a), (4)(c); Dep’t of Ecology v. Theodoratus, 135 Wn.2d 582, 598, 957

P.2d 1241 (1998) (“Agency action is arbitrary and capricious where it is willful and

unreasoning and taken without regard to the facts and circumstances.”); Hillis v.

Dep’t of Ecology, 131 Wn.2d 373, 381, 932 P.2d 139 (1997). Conservation NW does

not challenge DNR’s actions on the basis of its statutory powers or legal

authorization, so our analysis will focus on whether DNR’s actions were

constitutional and whether they were arbitrary and capricious.

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Conservation NW argues that the terms of the Enabling Act apply only to

DNR’s activities that involve selling or disposing of granted lands and resources

derived from them, and not those that involve its day-to-day management, which

should prioritize land use for the benefit of all Washingtonians under article XVI,

section 1. Statement of Grounds for Direct Review at 14. Conservation NW urges

that DNR’s decision to prioritize (or maximize) generating revenue from timber

harvests is actually detrimental to the broader public interest because it does not

provide a stable (or significant) source of income and undermines efforts to conserve

natural resources and habitat, combat climate change, and prevent wildfires and land

erosion.8 Id. at 3. DNR counters that generating revenue from timber sales

strengthens the enumerated state institutions and counties and, in turn, has a positive

effect on the general population, which stands to gain from having stable educational

and governmental institutions, adding that timber harvests have the indirect benefit

of providing jobs that boost local economies. 9 DNR adds that its land management

strategies do not aim to maximize revenue “at the expense of forest health.” Br. of

8 Several amici have filed briefs in support of this position. See Amicus Br. of Climate Action Families at 4, 14-15; Amicus Curiae Br. of Judith Billings and Barbara Schaad-Lamphere at 6, 19, 23-27; Br. of Amici Curiae Earth Law Ctr. et al. at 19-21; Amicus Br. of Ernest Niemi at 20, 29; Br. of Amici Curiae Mason County Climate Justice at 14-15. 9 Several amici have filed briefs supporting this position. See Br. of Amici Curiae Wash. State School Dirs.’ Ass’n at 7; Br. of Amicus Curiae Ass’n of Wash. Bus. at 6-8; Wash. Forest Prot. Ass’n, Amicus Curiae Br. at 4, 6; Br. of Amicus Curiae Skagit County at 10; Br. of Amicus Curiae Wash. Council of Machinists at 14-16; Br. of Amicus Curiae Wash. State Ass’n of Counties at 10- 11.

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Resp’ts at 32. Instead, DNR contends that it manages state and forest board lands in

compliance both with its trustee obligation to obtain the fair market value of any

transferred interest in the land and with its obligation to harvest resources, such as

timber, from these lands in a manner that limits negative effects on our ecosystem

in compliance with other laws, such as the Endangered Species Act, 16 U.S.C.

§§ 1531-1544, and the sustained harvest act, RCW 79.10.300-.340.

It is important to note that we must be mindful of the principle that our state

constitution and the Enabling Act “should be construed in harmony.” Drinkwitz v.

Alliant Techsystems, Inc., 140 Wn.2d 291, 312, 996 P.2d 582 (2000); see Wash.

Water Jet Workers Ass’n, 151 Wn.2d at 484 (“Where history suggests that there was

more than one purpose behind a constitutional provision, logic dictates that the

provision should be interpreted such that it satisfies each purpose.”). Article XVI,

section 1 was drafted and later approved as being in conformity with the provisions

of the Enabling Act. See Enabling Act § 8; Proclamation No. 8. We also presume

that DNR’s trust obligation with respect to forest board lands under chapter 79 RCW

was not drafted in a way that conflicts with article XVI, section 1. See State ex rel.

Peninsula Neigh. Ass’n v. Dep’t of Transp., 142 Wn.2d 328, 342, 12 P.3d 134 (2000)

(“The construction of two statutes shall be made with the assumption that the

Legislature does not intend to create an inconsistency. Statutes are to be read

together, whenever possible, to achieve a ‘harmonious total statutory scheme . . .

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which maintains the integrity of the respective statutes.’” (alteration in original)

(citation and internal quotation marks omitted) (quoting Employco Pers. Servs., Inc.

v. City of Seattle, 117 Wn.2d 606, 614, 817 P.2d 1373 (1991))). Logically, DNR’s

land management strategies must align with its obligations under the Enabling Act,

RCW 79.22.040, and article XVI, section 1. See RCW 34.05.570(4)(c).

Conservation NW advances a commendable argument that the management

of state and forest board lands should also combat climate change and conserve and

protect our crucial ecosystem. However, DNR’s decision to generate revenue from

timber harvests does not undercut its obligations under the Enabling Act or article

XVI, section 1. As discussed above, both laws were drafted with the overarching

purpose of supporting state institutions. Enabling Act § 11; WASH. CONST. art. XVI,

§ 1. Both laws contemplated that the state lands would be sold, leased, and/or

exploited for the natural resources available within or on them. Enabling Act § 11;

WASH. CONST. art. XVI, §§ 1-4. Both laws also clearly directed that revenue derived

from state lands was to be applied for the exclusive purpose of supporting

enumerated state institutions. Enabling Act §§ 11, 13; WASH. CONST. art. XVI, §§ 5-

6. Conservation NW presents DNR’s position to be that under Skamania, DNR is

required to prioritize revenue maximization from federally granted lands regardless

22 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. No. 99183-9

of the environmental toll. DNR does not advance such an argument, nor would

Skamania support it. 10

As this court has recognized, the Enabling Act did not restrict the State to a

specific actual use of the granted lands, contemplating instead that the State would

either sell the lands or use them for income-generating activities. PUD No. 1, 182

Wn.2d at 547-48; see Enabling Act § 11. There appear to be myriad ways DNR

could choose to generate revenue from the state and forest board lands or otherwise

put them to use for the benefit of the enumerated beneficiaries. 11 See RCW 79.10.120

(providing that DNR “may” adopt “multiple uses” of granted lands consistent with

its trust obligations, such as recreational areas, scientific studies, special events,

scenic areas, etc.). While there is nothing in the Enabling Act that requires DNR to

generate revenue specifically from timber harvests on state lands,12 DNR may elect

10 Contrary to Conservation NW’s briefing, DNR cites Skamania (along with much earlier precedent) to support its position that it owes an undivided duty of loyalty to the beneficiaries enumerated in the Enabling Act, not that it must prioritize revenue maximization. Br. of Resp’ts at 18-23, 30; see Skamania, 102 Wn.2d at 139 (unilateral termination of timber contracts violated DNR’s fiduciary duty to obtain full market value for trust assets according to explicit terms of Enabling Act). 11 See, e.g., Daniel Jack Chasan, A Trust for All the People: Rethinking the Management of Washington’s State Forests, 24 SEATTLE U. L. REV. 1, 42 (2000) (arguing that public trust doctrine applies to all public lands and requires government to balance “the environmental and aesthetic values of the granted lands . . . against the state’s duty to earn money for the schools; those values must be safeguarded for all the people and preserved for future generations”). 12 Conversely, DNR is obligated by statute to harvest timber from forest board lands, while also ensuring such lands are “protected, and cared for . . . to ensure natural reforestation.” RCW 79.22.070(1); see RCW 79.22.040 (forest board lands to be “administered and protected . . . in the same manner as other state forestlands”). DNR could also, however, provide for “multiple uses” of forest board land as long as such uses are consistent with its trust obligations to the county beneficiaries. RCW 79.10.120.

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to do so because of the discretion the Enabling Act granted to the State in the day-

to-day management of federally granted lands. Enabling Act § 17. Timber harvests

enable DNR to make state lands productive, which aligns generally with its duties

as trustee of a land trust. RESTATEMENT (SECOND) OF TRUSTS § 181 & cmt. a.

Further, as DNR points out, generating revenue for the enumerated beneficiaries is

advantageous to “all the people” of Washington because they stand to benefit from

having stable and financially viable public systems of education and governance.

Conservation NW has not established that DNR’s land management strategy is

unconstitutional or otherwise in violation of its obligations under the Enabling Act,

RCW 79.22.040, or article XVI, section 1. See RCW 34.05.570(1)(a), (4)(c).

Even accepting, arguendo, that we were of the opinion that timber harvests

should not be prioritized over other activities (such as those suggested by

Conservation NW), we still would not be empowered to reverse DNR’s Harvest

Calculation or Marbled Murrelet Strategy as arbitrary and capricious for the reasons

already discussed—DNR’s position is a defensible exercise of its discretion to make

state and forest board lands productive properties. Theodoratus, 135 Wn.2d at 598

(“If there is room for two opinions, a court will not find arbitrary and capricious

action even if the reviewing court believes the agency’s decision wrong.”).13 Our

13 We do not address the other two grounds for reversal because Conservation NW does not challenge DNR’s statutory authority or allege that the approval of the Harvest Calculation or the Marbled Murrelet Strategy was performed without legal authorization. See RCW 34.05.570(4)(c).

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inquiry into the propriety of DNR’s exercise of its discretion ends here. RCW

34.05.570(4)(c). We affirm the trial court’s dismissal of the case.

IV. CONCLUSION The Enabling Act created a trust that requires the State, through its agency,

DNR, to manage state lands for the benefit of enumerated state institutions. DNR is

likewise obligated by statute to manage forest board lands for the benefit of the

counties who granted land to the State. DNR is not required to harvest timber from

state lands (although it is required to do so with respect to forest board lands), but it

may elect to do so to generate revenue for its beneficiaries. The land management

strategies at issue, which relate to DNR’s timber harvest activities, do not conflict

with the constitutional mandate that all granted public lands shall be held in trust for

“all the people” in Washington. Using granted state and forest board lands as

productive trust property aligns with DNR’s general trustee duties and provides a

benefit to the general population by boosting local economies as well as maintaining

stronger and better-funded public systems of education and governance. We

recognize the important compelling interests in conservation and environmental

health raised by Conservation NW and various amici, but these policy issues must

be left to the legislature. DNR’s discretionary land management strategies are neither

unconstitutional nor arbitrary and capricious. Accordingly, we affirm the trial court’s

dismissal of the case on the alternate grounds set forth above.

25 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.

WE CONCUR.