In Citizens for Responsible Development in The Dalles, the Oregon Court of Appeals reversed and remanded the decision of the Oregon Department of State Lands (DSL or the Department) to issue a wetland removal fill permit to Walmart®. Walmart sought to build a store on a 66-acre site in The Dalles, which required a removal fill permit because the site included just over two acres of wetlands. [Citizens for Responsible Development in The Dalles v. Wal-Mart Stores, Inc., 295 Or.App. 310 (2018).]

Statutory Framework

The governing statute, ORS 196.825, provides in part:

(1) The Director of the Department of State Lands shall issue a permit applied for under ORS 196.815 if the director determines that the project described in the application:

Is consistent with the protection, conservation and best use of the water resources of this state as specified in ORS 196.600 to 196.905; and

(b)Would not unreasonably interfere with the paramount policy of this state to preserve the use of its waters for navigation, fishing and public recreation. . . .

(3) In determining whether to issue a permit, the director shall consider all of the following:

The public need for the proposed fill or removal and the social, economic or other public benefits likely to result from the proposed fill or removal. When the applicant for a permit is a public body, the director may accept and rely upon the public body’s findings as to local public need and local public benefit.

Permit Issuance and Departmental Appeal

Upon Walmart’s application, DSL issued a removal fill permit with required mitigation. DSL’s findings included that:

• . . the record is inconclusive with regard to whether the project, for which the fill or removal is proposed, will address a public need . . .[l]ikewise, the record is inconclusive regarding the social, economic or other public benefits that may result from the proposed project.

Petitioner Citizens for Responsible Development in The Dalles challenged the issuance of the permit and requested a contested case hearing. Petitioner argued DSL lacked the authority to issue the permit because the record was inconclusive as to whether the proposed project addressed a public need. The Administrative Law Judge issued a proposed order granting the permit, and the Department issued the final order granting it. Petitioner appealed.

The Court’s Decision

The appellate court’s analysis centered on the Oregon Supreme Court’s decision in Morse v. Oregon Division of State Lands, 285 Or. 197 (1979). In that case, the court interpreted a prior version of the removal fill statute, ruling that “[i]n the absence of a finding that the public need predominates, there is no basis for the issuance of the permit.” DSL argued Morseno longer controls because the text of ORS 196.825 requires only that DSL consider the public need for a proposed project. Petitioner countered that, although the statute has been amended since Morse, the legislature did not intend to alter the conclusion in Morse that the statute requires DSL to find a public need for a proposed project in order to grant a removal fill permit.

The court agreed with petitioner, citing a number of statements in the legislative history of the post-Morsestatutory revisions indicating that the revisions were intended to codify the court’s ruling in Morse. The court also found support in 1000 Friends of Oregon v. Division of State Lands, 46 Or.App. 425 (1980). In that case:

• . . .[r]elying on Morse’s construction of the statute, [the 1000 Friends court] noted the agency had not found that the project satisfied a public need. . .[and]. . .reversed the order granting the permit.

As the Citizens for Responsible Developmentcourt explained:

• . . .[t]he fill and removal permit statute has been amended a number of times since 1979, but the operative language of the 1979 version of the statute and the current version is substantively equivalent. Implicit in the 1000 Friends holding is the conclusion that the 1979 amendments codified the core holding in Morse.

DSL also argued the Morse holding was limited to estuarine fills, the type of fill at issue in that case. The court rejected that argument, as it did not see:

• . . .a persuasive reason that ORS 196.825 would treat wetland and estuarine fills differently when they are both treated the same in the statutory scheme as ‘waters of the state.’

Finally, the court added, the Oregon Supreme Court’s recent decision in Coos Waterkeeper v. Port of Coos Bay, 363 Or. 354 (2018), “does not undercut our conclusion about the import of Morse on the construction of ORS 196.825.”[1]Although the Coos Waterkeepercourt concluded “that Morse does not bear on the construction of the term ‘project’ in ORS 196.825” that:

• . . .does not affect the core principle recognized in Morse and codified by the legislature in 1979, which requires DSL to find that the public need for a proposed project predominates before DSL has the authority to issue a wetland fill and removal permit for the project.

Conclusion and Implications

The court’s ruling reiterates that DSL must make a finding of public need before issuing a wetland removal fill permit. Applicants should be sure to provide sufficient information in their permit application to enable DSL to make such a finding.

(Alexa Shasteen)