State Supreme Court Decides Permit Fee Case

— from the SJ County Prosecutor’s Office —

The Supreme Court [on Oct 11] ruled that challenges to the reasonableness of land use permit fees are allowed, provided the 21-day time limit in state law that applies to the permit is met.

The decision ends a lawsuit filed in which the applicants for building permits waited almost three years to challenge the building permit fees as excessive.

“The 21-day limit for challenging building and land use permit fees is well-known state law,” said Prosecutor Randall Gaylord. “The question for the court was whether the permit fee is part of the building permit.”

Judge Eaton agreed with the County and dismissed the case. That decision was affirmed by the Court of Appeals, and again by the Supreme Court.

The Supreme Court, in a 5-4 decision agreed with the County’s argument which pointed out that “[t]he land use decision ‘on an application’ includes a constellation of smaller decisions that precedes approval or disapproval of the land use request,” and that “[t]hese decisions are part-and-parcel of the permit decision and inextricable linked to the permit itself.”

Community Treasures, whose permit fees were paid by Frank Penwell, and John Evans sued the county for themselves and requested a class action for all others who paid fees for three years prior to the suit. By their calculation an overcharge occurred of almost a million dollars, and they requested a refund for themselves and others plus attorney fees.

Mr. Gaylord added that this case was especially significant from a financial standpoint because the county’s insurance contract does not cover refund of fees, and the case was a potential liability. Since the case was filed the County has undertaken a detailed study of its building permit fees and made slight modifications.

Friday Harbor attorneys Nicholas Power and Stephen Brandli represented Community Treasures and Evans. Prosecutor Randall Gaylord represented San Juan County.