Courtney v. Goltz

868 F. Supp. 2d 1143, 2012 WL 1309518, 2012 U.S. Dist. LEXIS 53980
CourtDistrict Court, E.D. Washington
DecidedApril 17, 2012
DocketNo. 11-CV-0401-TOR
StatusPublished

This text of 868 F. Supp. 2d 1143 (Courtney v. Goltz) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Courtney v. Goltz, 868 F. Supp. 2d 1143, 2012 WL 1309518, 2012 U.S. Dist. LEXIS 53980 (E.D. Wash. 2012).

Opinion

ORDER GRANTING MOTION TO DISMISS

THOMAS O. RICE, District Judge.

BEFORE THE COURT is Defendants’ motion to dismiss for failure to state a claim (ECF No. 7). The Court heard oral argument on the motion on April 12, 2012. Michael E. Bindas and Jeanette Petersen appeared on behalf of the Plaintiffs, James Courtney and Clifford Courtney. Assistant Attorney General Fronda Woods ap[1145]*1145peared on behalf of the Defendants, Jeffrey Goltz, Patrick Oshie, Philip Jones, and David Tanner. The Court has reviewed the motions, the responses, the record and files herein and is fully informed.

BACKGROUND

This lawsuit is a challenge to certain Washington statutes and administrative regulations that require an operator of a commercial ferry to obtain a certificate of “public convenience and necessity” from the Washington Utilities and Transportation Commission (“WUTC”) before commencing operations. Plaintiffs allege that these statutes and regulations, as applied to their proposed ferry services on Lake Chelan, violate their right “to use the navigable waters of the United States” under the Privileges or Immunities Clause of the Fourteenth Amendment. Defendants, all members of the WUTC, have moved to dismiss the Complaint for failure to state a claim on the ground that Plaintiffs do not have a Fourteenth Amendment right to operate a commercial ferry on Lake Chelan.

FACTS

The following facts are drawn from Plaintiffs Complaint and are accepted as true for purposes of this motion. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Plaintiffs James Courtney and Clifford Courtney (“the Courtneys”) live in Stehekin, Washington. Stehekin is a small, unincorporated community of approximately 75 residents located at the northwestern-most tip of Lake Chelan. Stehekin is a very isolated community: the only means of accessing the town are by boat, seaplane, or on foot. Most residents and visitors reach Stehekin via a ferry operated by Lake Chelan Boat Company. At present, this is the only commercial ferry operating on the lake.

The Courtneys would like to establish a competing ferry service on Lake Chelan. They believe that a competing service is needed for two main reasons. First, they believe that a second ferry, based in Stehekin, would better serve the needs of Stehekin residents than the existing ferry based in Chelan.1 Second, they believe that a second ferry would allow more tourists and visitors to reach Stehekin, thereby increasing patronage of Stehekin businesses— many of which are owned by the Courtneys. To date, however, the Courtneys have been unable to obtain the requisite certificate of “public convenience and necessity” from the WUTC or otherwise obtain permission to operate a ferry on Lake Chelan.

The Courtneys’ efforts to establish a competing ferry service have taken several forms. First, in 1997, James Courtney submitted a formal application to the WUTC for a certificate of “public convenience and necessity” pursuant to RCW 81.84.010 and 020. The WUTC’s evaluation of this application culminated in a two-day evidentiary hearing at which the WUTC took testimony from James and others about (1) the need for an additional ferry; and (2) the financial viability of the proposed service.2 The WUTC ultimately [1146]*1146denied James’s application, finding that the proposed service was not required by “the public convenience and necessity,” and that, in any event, James lacked the financial resources to sustain the proposed service for twelve months. The WUTC further concluded that James had failed to carry his statutory burden of establishing that the incumbent carrier “ha[d] failed or refused to furnish reasonable and adequate service.” See RCW 81.84.020(1).

Second, beginning in 2006, James attempted to establish an “on-call boat transportation service” based in Stehekin. Because James intended to use docks owned by the United States Forest Service in conjunction with this service, he applied to the Forest Service for a “special use permit.” The Forest Service subsequently contacted the WUTC to verify that James’s proposed use of its docks would comply with state law. In October of 2007, WUTC staff advised the Forest Service that the proposed service was exempt from the statutory “public convenience and necessity” requirement. In March of 2008, however, WUTC staff reversed course and advised James directly that he would need to obtain a certificate before commencing his on-call service.

Four months later, in July of 2008, WUTC staff reversed course once again and advised James that the on-call service would be exempt from the certificate requirement. The Forest Service, recognizing the apparent confusion among the WUTC staff, subsequently requested an “advisory opinion letter” on the issue from Defendant David Danner in August of 2009. For reasons that are unclear from the existing record, Defendant Danner declined to respond.

Also in 2008, Clifford Courtney contacted the WUTC and proposed two alternative boat transportation services. The first proposal was a “charter” service whereby Clifford would hue a private boat to transport patrons of his lodging and river rafting businesses between Chelan and Stehekin. The second proposal was a service whereby Clifford would “shuttle” his customers between Chelan and Stehekin in his own private boat.

In September of 2008, Clifford sent a letter to Defendant Danner seeking guidance about whether either proposed service would require a certificate of “public convenience and necessity.” Defendant Danner responded that, in his opinion, both services would require a formal certificate. Specifically, Defendant Danner opined that even private boat transportation, offered exclusively to paying customers of Clifford’s lodging and river rafting businesses, would be a service “for the public use for hire” for which a formal certificate was required pursuant to RCW 81.84.010. Defendant Danner did, however, inform Clifford that his opinion was merely advisory in nature and that Clifford was free to seek a formal ruling on the issue from the full Commission.

Frustrated by the WUTC’s responses to their formal application and subsequent proposals, the Courtneys contacted the Governor of the State of Washington and several state legislators in February of 2009. The Courtneys explained the perceived need for a competing ferry service on Lake Chelan and urged their legislators to relax the ferry operator certification requirement. In response, the State Legislature directed the WUTC to study the appropriateness of statutes and regulations governing commercial ferry operations on Lake Chelan. Pursuant to this mandate, the WUTC studied the issue and delivered a formal report to the State Legislature in January of 2010. See Washington Utilities and Transportation Commission, Appropriateness of Rate and Service Regulation of Commercial Ferries Operating on Lake Chelan: Report to the Legis[1147]*1147lature Pursuant to ESB 589k, January 14, 2010 (hereinafter “Ferry Report”).3

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Bluebook (online)
868 F. Supp. 2d 1143, 2012 WL 1309518, 2012 U.S. Dist. LEXIS 53980, Counsel Stack Legal Research, https://law.counselstack.com/opinion/courtney-v-goltz-waed-2012.