Daily Decisions: Court of Appeals Dismisses Complaint for Doing Exactly What Previous Opinion Instructed

Wendy Birnbaum can’t seem to catch a break. Way back in 2005 she applied to Pierce County for a permit to build an RV park and campground. She waited until August 2006 for a hearing on the application. A month later, the hearing examiner issued its decision: Birnbaum needed to submit more information for review. So she submitted a revised plan in December 2006. A second hearing was scheduled for May 2007, but it was pushed off until June 2007 and then — for apparently unknown reasons — delayed until December 2009. That’s more than two years later! During that time, Birnbaum submitted numerous updates and additional information to the County.

Birnbaum’s permit was finally approved in March 2010 — five years after she applied. She promptly sued the County alleging (a) that the County’s delays failed to comply with relevant time limits and (b) that the County’s requests for additional information were arbitrary and capricious. The trial court dismissed Birnbaum’s claims under CR 12(b)(6). Birnbaum appealed.

RCW 64.40.020 provides a limited cause of action for damages to individuals who “have filed an application for a permit.” That’s the statute under which Birnbaum sued. It provides for relief for either (a) “acts of an agency which are arbitrary, capricious, unlawful, or exceed lawful authority,” or (b) “failure to act within time limits established by law.” In Birnbaum v. Pierce County (Division 1, April 16, 2012), the Court of Appeals analyzed the relevant statutory framework and used the interplay of the provisions to deny Birnbaum any relief. Accordingly, I think a brief summary of the framework is useful:

There are definitional limits on this cause of action. The relevant “act” is defined as either “a final decision by an agency” or “the failure of an agency to act within time limits.” And the recoverable “damages” include only “reasonable expenses and losses, other than speculative losses or profits, incurred between the time a cause of action arises and the time [plaintiff] is granted relief.” See RCW 64.40.010.

And of course, there is a limitations period: “Any action to assert claims . . . shall be commenced only within thirty days after all administrative remedies have been exhausted.”  RCW 64.40.030.

The Court evaluated Birnbaum’s claim as two separate causes of action: one for delay and one for arbitrary and capricious requests for information. With respect to the “delay” claim, the County was by law required to issue a decision on Birbaum’s application within 120 days. Clearly, it did not do so. But no matter, the Court of Appeals held that the statute of limitations barred Birnbaum’s claim. Because there is “no adequate administrative remedy for failure to timely process a permit,” the statute began to run as soon as the 120 period expired. So Birnbaum should have sued the County after 121 days when it had failed to give a decision on her permit. When she failed to do so, her claim expired.

While the Court’s decision is textually sensible under a very strict reading of the statute, it seems a bit harsh for a number of reasons. First, the Court gets to this result by splitting Birbaum’s claim — one claim for delay and one claim for the County’s actions in requesting information. According to the Court, therefore, Birnbaum should have sued after 120 days for the delay, and then if, later on, there were other things she didn’t like about the County’s actions, each additional action should have resulted in another separate complaint and a separate case within 30 days of that action. Seems unwise to me. I think the statute could be read to allow for one claim within 30 days of the final agency action and the exhaustion of any related administrative remedies. Moreover, while apparently Birnbaum “agreed” that there is no administrative remedy available for delay, I think the proper administrative remedy would be to just keep pushing forward with the action before the County. If I’m the court (and I’m not!) I’d want to give an administrative agency an opportunity to cure or resolve any defects in its procedure before I had to take on the case. Under this rule, you’re just going to get a lawsuit filed every 121 days after each petition request.

Another reason this holding is harsh: The Court admits in a footnote that in a prior opinion the Court specifically instructed plaintiffs to sue for delay damages after a permit is issued. The Court says that was dicta and sure, maybe it technically is, but goodness gracious that’s rough on Birnbaum when that is exactly what she did here.

Anyway, after determining that Birnbaum was SOL because of the SOL on her “delay” claim, the Court turned to her “arbitrary and capricious” claim. The Court observed that Birnbaum’s claim did not challenge the actual language or restrictions in the permit she received. Instead, she challenged the County’s actions during the period before the permit was issued. But here’s where Birnbaum gets trapped. The statute only applies to “acts” of agencies which are either (1) a final decision or (2) a failure to act within time limits. We know that she was out on #2. But on #1, she was not challenging the final decision; she was challenging requests and delays leading up to the final decision. And according to the Court, the statute’s definition of “damages” includes only losses between (i) the relevant “act” and (ii) the court’s ultimate award of relief. Since Birnbaum claimed no damages related to the period between (i) the final permit decision and (ii) her filing suit, the Court concluded that her claim was not cognizable under the “arbitrary and capricious” prong of the statute.

It seems to me that there are two key facts here: For all of the acts about which Birnbaum complained (1) there was no adequate administrative remedy (at least according to the Court) and (2) the acts occurred before the final decision. Therefore, there were no remedies to exhaust and the statute of limitations began running right away — even in the middle of Birnbaum’s attempts to get her permit application granted. I would prefer a rule that tolled the SOL until the County issued a final decision on the application, or at least a rule that interpreted the continuation of the application process as an administrative remedy that needs to be exhausted before filing a claim. But the Court’s strict interpretation of the statute will likely lead to more piecemeal litigation of claims and dual-track litigation where a person must simultaneously sue the County in superior court while still advancing her permit application before the County. Ugh.

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One thought on “Daily Decisions: Court of Appeals Dismisses Complaint for Doing Exactly What Previous Opinion Instructed

  1. Pingback: Monday Morning Mash-up: April 23, 2012 | Ziff Blog

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