No. 95295-7

IN THE SUPREME COURT OF THE STATE OF WASHINGTON
S. MICHAEL KUNATH, et al.
Respondents,
v.
CITY OF SEATTLE, et al.
Appellants.
BRIEF OF AMICI CURIAE
CITIES OF OLYMPIA, PORT TOWSEND, PORT ANGELES
AND
ASSOCIATION OF WASHINGTON CITIES
Sheila M. Gall, WSBA #28570
General Counsel
Association of Washington Cities
1076 Franklin Street, SE
Olympia WA 98501-1346
Telephone: 360.753.4137

Mark Barber, WSBA #8379
City Attorney
Annaliese Bradow Harksen
WSBA #31132
Deputy City Attorney
City of Olympia
601 4th Avenue East
Olympia WA 98501-1112
Telephone: 360.753.8338

Heidi L. Greenwood, WSBA #38037
City Attorney
City of Port Townsend
250 Madison Street
Port Townsend, WA 98368-5738
Telephone: 360.379.5048

William E. Bloor, WSBA #4084
City Attorney
City of Port Angeles
321 E. 5th Street
Port Angeles, WA 98362-3206
Telephone: 360.417.4531

 TABLE OF CONTENTS
Page
TABLE OF CONTENTS…………………………………………………. i
TABLE OF AUTHORITIES……………………………………………...ii
I.

IDENTITY AND INTEREST OF AMICI.......……………………1

II.

STATEMENT OF THE CASE………..…………………………..4

III.

ARGUMENT……..……………………………………………….4

IV.

A.

Over fifty years ago, the Legislature stated its preference
for home rule in the Optional Municipal Code……….…...5

B.

The Legislature’s broad grant of authority to cities of
“all powers of taxation for local purposes” within
a municipality’s boundaries properly reflects the
legislative decision to implement the “home rule”
principle providing autonomy in local governance……….7
1.

Regardless whether Seattle’s tax is considered
an excise tax or a sui generis income tax, it is
permissible under the broad legislative
authority conferred by RCW 35A.11.020………...9

2.

Municipalities are expressly authorized by the
Legislature to levy excise taxes whether they
be first class cities or cities organized under
the Optional Municipal Code in Title 35A RCW…10

CONCLUSION…………………………………………………..12

CERTIFICATE OF SERVICE…………………………………………...iii

i

 TABLE OF AUTHORITIES
Page(s)
Case(s):
Watson v. City of Seattle, 189 Wn.2d 149, 167-168,
401 P.3d 1 (2017)…………………………………………………6, 10, 11
Statutes:
RCW 35A.11.020…………………………………………3, 5, 7, 9, 10, 11
RCW 35A.82.020………………………………………………………..10
RCW 35.22.570…………………………………………………….6, 7, 10
RCW 35.22.280(32)……………………………………………………..11
Other Authorities:
Hugh Spitzer, “Home Rule” vs. “Dillon’s Rule” for Washington Cities,
38 Seattle U. L. Rev. 809, 810, 840-41 (2015) ..………………...........4, 8

ii

 I. IDENTITY AND INTEREST OF AMICI
Olympia is a mid-sized municipality of 52,490 citizens, and is the
capital of Washington State. Its citizens rely upon local government for
traditional municipal services, including but not limited to fire protection,
law enforcement, utilities (water, sewer, solid waste, and storm water),
public works (streets, bridges, and other municipal construction), parks and
recreation.
Olympia is struggling, as are other Washington municipalities, with
societal changes creating funding needs unmet by state and federal
authorities. Homelessness, climate change and sea level rise are examples
of nontraditional areas that require revenue to address Olympia’s local
problems and service needs.
Port Townsend is a historic city on the Olympic Peninsula with
9,545 residents. It hosts thousands of visitors and tourists each year who
come to admire its Victorian architecture and beautiful setting.

Like

Olympia, Port Townsend provides its citizens with traditional municipal
services including public safety, utilities, public works, and parks. Port
Townsend recognizes that its home rule authority will be impaired if the
trial court’s ruling is affirmed, and so it joins in this motion for leave to file
a brief by amici curiae.

1

 Port Angeles, with a population of 19,370, is a mid-sized
municipality with many of the same characteristics of Olympia. Port
Angeles provides its citizens with a full range of municipal services and is
struggling to meet the demands increasingly placed on it to deal with needs
unmet by state and federal authorities such as lack of affordable housing,
homelessness, drug and mental health issues, living-wage jobs,
environmental stress, climate change and sea level rise, to name but a few.
The issue of local authority to address local problems – “home rule” – is
Port Angeles’ primary interest in the case before the Court.
Port Angeles is the only city in Washington State ever to face the
prospect of reverting backwards from a code city with home rule authority
to a second class city, fully subject to the limitations of Dillon’s Rule. 1 In
November 2017, in response to a citizen petition, a proposition was placed
on the general election ballot asking voters of the city whether Port Angeles’
classification should be changed from code city back to second class city.
That proposition failed (For: 20.93% / Against: 79.07%); but the prospect
of losing home rule authority is an issue of utmost importance to the City
of Port Angeles and a significant majority of its residents. Port Angeles has

Named after Judge J.F. Dillon in Clinton v. Cedar Rapids & M. R. R. Co., 24 Iowa 455
(1868).

1

2

 an acute interest in protecting the scope and breadth of local home rule
authority.
AWC is a private, non-profit corporation that represents
Washington’s cities and towns before the State Legislature, the State
Executive branch and regulatory agencies.

Membership in AWC is

voluntary; however, the association includes one-hundred percent
participation from Washington’s 281 cities and towns. A 25-member board
of directors oversees AWC’s activities. The association’s mission is to
serve its members through advocacy, education and other services. Among
AWC’s core values is support for local authority. While cities or towns have
differing policy views on revenues, AWC believes its mission includes
protecting local revenue authority for city services, such as infrastructure,
housing, and public safety, and this issue is significant to its members. If
the trial court’s ruling is permitted to stand, it would severely constrain
home rule taxation authority granted in RCW 35A.11.020 to the detriment
of AWC’s member cities and towns.
Amici have a strong interest in ensuring that cities and towns may
exercise the home rule taxation authority granted by the Legislature over
fifty years ago in the Optional Municipal Code, Title 35A RCW. This case
presents the Court with an opportunity to resolve confusion between the
doctrine of “Dillon’s Rule” which limits city powers, and the “home rule”
3

 approach adopted by the Legislature, which allows cities to exercise all
police powers possessed by state government so long as such local
ordinances do not conflict with general laws. By adopting the Optional
Municipal Code, the Legislature clearly expressed its preference for home
rule as the preferred choice of structuring the relationship between state
government and cities so that cities are empowered to “administer [their]
own affairs to the maximum degree” with “the right to determine the form
of government” and to “define the nature and scope of municipal services
involving matters of purely local concern.” 2
II.

STATEMENT OF THE CASE

Amici adopt the Statement of the Case set forth in the Opening Brief
of Appellant City of Seattle (App. Br. 3-7).
III.

ARGUMENT

After more than half a century, and despite a clear expression of
legislative intent and public policy by the Legislature, Dillon’s Rule
continues to be a source of ongoing legal debate among lawyers and before
the trial and appellate courts in Washington State.

From Amici’s

perspective, the heart of the parties’ dispute is whether Dillon’s Rule is still

Hugh Spitzer, “Home Rule” vs. “Dillon’s Rule” for Washington Cities, 38 Seattle U. L.
Rev. 809, 810 (2015); citing Ernest H. Campbell, Municipal Home Rule (Univ. of Wash.
Bureau of Gov’t Research & Serv., Research Memorandum No. 53. 1958).

2

4

 viable in view of the Legislature’s undeniable statement of purpose and
policy in the Optional Municipal Code, RCW 35A.01.010. The trial court’s
ruling seemingly applies Dillon’s Rule, holding “the Legislature must
specifically authorize the tax” Seattle imposed, and that Seattle must
identify “specific statutory authorization for its tax;” and that Seattle’s tax
is not authorized because “the general grant of taxing power recited in RCW
35A.11.020, standing alone, confers no specific authority on [Seattle] to
impose any tax, let alone the specific authority to impose an income tax.” 3
A.

Over fifty years ago, the Legislature stated its
preference for home rule in the Optional Municipal
Code.

In 1967, the Legislature enacted the Optional Municipal Code in
Title 35A RCW, stating its preference for home rule and granting charter
and optional municipal code cities broad unspecified powers.

Amici

believe the trial court misunderstood the proper analysis to be applied in the
context of the Legislature’s public policy expressed in RCW 35A.01.010
that the “purpose and policy of [the Optional Municipal Code] is to confer
upon two optional classes of cities created hereby the broadest powers of
local self-government consistent with the Constitution of this state” and that
“[a]ny specific enumeration of municipal powers contained in this title or

3

Kunath v. City of Seattle, Order on Cross Mots. for Summ. J. at 17 (Nov. 22, 2017).

5

 in any other general law shall not be construed in any way to limit the
general description of power contained in this title, and any such
specifically enumerated powers shall be construed as in addition and
supplementary to the powers conferred in general terms by this title.”
[Emphasis added.]

So its meaning would not be misunderstood, the

Legislature required that “[a]ll grants of municipal power to municipalities
electing to be governed under the provisions of this title, whether the grant
is in specific terms or in general terms, shall be liberally construed in favor
of the municipality.” [Emphasis added.]
Although Seattle is a first class city, the Legislature specifically
grants first class cities all powers conferred on other cities.

RCW

35.22.570. Contrary to the Legislature’s stated policy supporting home
rule, the trial court appears to have applied Dillon’s Rule that cities have
only those powers “specifically” granted to them by the Legislature. Amici
urge this Court to state that the Legislature’s intent was clear in 1967, and
it is still clear with regard to home rule; that Dillon’s Rule is inapplicable to
most cities including Seattle with respect to the power of taxation for either
the purpose of regulation or the lawful purpose of raising revenue to provide
for essential public services. Watson v. City of Seattle, 189 Wn.2d 149, 167168, 401 P.3d 1 (2017).

6

 B.

The Legislature’s broad grant of authority to cities of
“all powers of taxation for local purposes” within a
municipality’s boundaries properly reflects the
legislative intent to implement the home rule principle
providing autonomy in local governance.

Amici submit that the specific statutory language in RCW
35A.11.020 confers on the “legislative body of each code city [the] power
to organize and regulate [their] internal affairs within the provisions of this
title and its charter;” permitting each body to “adopt and enforce ordinances
of all kinds relating to and regulating its local or municipal affairs and
appropriate to the good government of the city.” Further, the legislative
body of each code city “shall have all powers possible for a city or town to
have under the Constitution of this state, and not specifically denied to code
cities by law. 4
The final paragraph of RCW 35A.11.020, provides that “[i]n
addition and not in limitation, the legislative body of each code city shall
have any authority ever given to any class of municipality or to all
municipalities of this state before or after the enactment of this title, such
authority to be exercised in the manner provided, if any, by the granting
statute, when not in conflict with this title.” This statute recognizes that
“[w]ithin constitutional limitations, legislative bodies of code cities shall

4

RCW 35.22.570 grants first class cities like Seattle all powers conferred on other cities.

7

 have within their territorial limits all powers of taxation for local purposes
except those which are expressly preempted by the state as provided in
RCW 66.08.120 [liquor tax], 82.36.440 [repealed in its entirety], 48.14.020
[insurance premium taxes], and 48.14.080 [insurance premium tax].
How did this express legislative delegation of taxation power come
to occur?

In 1965 the Legislature formed a special Municipal Code

Committee to develop legislation providing “a form of statutory home rule”
for cities.” 5 The committee’s report declared that Chapter 35A.11 of the
draft legislation “expresses the state legislature’s intent to confer the
greatest power of local self-government consistent with the State
Constitution, upon the cities and directs that the laws be liberally construed
in favor of the city as a clear mandate to abandon the so-called ‘Dillon’s
Rule’ of construction.” 6
The Municipal Code Committee’s recommendations led to
enactment of the Optional Municipal Code in 1967. 7 In drafting “the new
optional municipal code statute, the Municipal Code Committee engaged a
lawyer from the staff of the Association of Washington Cities—the primary

Hugh Spitzer, “Home Rule” vs. “Dillon’s Rule” for Washington Cities, 38 Seattle U. L.
Rev. 809, 840 (2015).
6
Id. at 840.
7
Id. at 840, citing CITIZENS ADVISORY COMM. TO THE JOINT COMM. ON
URBAN AREA GOV’T, CITY AND SUBURB—COMMUNITY OR CHAOS? (1962),
note 223, at 13.
5

8

 advocacy group for cities.” When enacted, the statute was “drafted in
answer to the plea of cities for more authority to run their affairs and impose
taxes to meet their financial burdens.” 8
The Legislature’s intent was to remove code cities from Dillon’s
Rule, as provided in RCW 35A.01.010. Amici believe the trial court erred
in applying Dillon’s Rule in construing that Seattle’s income tax is not
authorized because the general grant of taxing power in RCW 35A.11.020
confers no specific authority on Seattle to impose any tax.
1.

Regardless whether Seattle’s tax is
considered an excise tax or a sui generis
income tax, it is permissible under the
broad legislative authority conferred by
RCW 35A.11.020.

Properly viewed from the perspective of home rule principles,
Seattle’s tax authority is conferred by RCW 35A.11.020 to impose a tax on
income whether the tax is considered an excise tax or a sui generis income
tax. Amici concur with Seattle’s argument that the trial court’s ruling would
render RCW 35A.11.020 meaningless, and it should be reversed. This
Court should give effect to the legislative purpose and intent of RCW
35A.11.020.

8

Id. at 840-41.

9

 When viewed from application of home rule authority conferred on
Seattle as a first class city, and by extension through the Optional Municipal
Code, 9 Seattle should be able to lawfully raise revenue by the actions of its
legislative body for any lawful purpose. 10 The only constraints should be
where the Legislature has preempted tax authority 11 or where a municipality
seeks to tax governmental activities of another municipality and triggers
issues of governmental immunity. 12 Neither circumstance is present in this
case.
2.

Municipalities have been expressly
authorized by the Legislature to levy excise
taxes whether they be first class cities or
cities organized under the Optional
Municipal Code in Title 35A RCW.

As a first class city, Seattle is expressly authorized to impose excise
taxes under three statutes. The first statutory grant is RCW 35A.82.020, as
Seattle possesses the same excise tax authority granted to code cities to
“impose excises for regulation or revenue in regard to all places and kinds
of business, production, commerce, entertainment, exhibition, and upon all
occupations, trades and professions and any other lawful activity . . .” 13
RCW 35.22.570
Watson, supra, at 167-168.
11
RCW 35A.11.020 (liquor tax and insurance premium tax)
12
App. Br. at 48, citing King County v. City of Algona, 101 Wn.2d 789, 793, 681 P.2d
1281; City of Wenatchee v. Chelan Cnty. Pub. Util. Dist. No. 1, 181 Wn. App. 326, 330,
325 P.3d 419 (2014).
13
As stated previously, RCW 35.22.570 grants first class cities like Seattle all powers
conferred on other cities.
9

10

10

 Seattle properly argues that its income tax falls within its broad excise
authority.
The second statutory grant is found in RCW 35.22.280(32) which
authorizes Seattle to “grant licenses for any lawful purpose, and to fix by
ordinance the amount to be paid therefor. . .” This Court has held that the
licensing power granted to first class cities is dual, and that cities have the
right to impose license fees either for the lawful purpose of regulation or
taxes for the lawful purpose of raising revenue. 14
The third grant comes from RCW 35A.11.020 which confers upon
Seattle “all powers of taxation for local purposes” within Seattle’s
boundaries, subject only to constitutional and statutory constraints. This
grant of tax authority reflects the Legislature’s intent to implement the home
rule principle. This Court should recognize Seattle’s autonomy in local
governance, to exercise its powers in a way that do not violate constitutional
provisions, legislative enactments, or the city’s charter. 15 Amici submit that
Seattle’s personal income tax, whether characterized as an excise tax or a
sui generis income tax, is within the express grant of “all powers of taxation
for local purposes” under RCW 35A.11.020.

14
15

Watson, supra, 189 Wn.2d at 167-168.
Watson, supra, 189 Wn.2d at 166.

11

 V.

CONCLUSION

This Court should reverse the trial court’s ruling and clarify the
authority of first class and code cities to exercise home rule by applying
within their territorial limits all powers of taxation for local purposes except
those expressly preempted by the state or that implicate governmental
immunity.
RESPECTFULLY SUBMITTED this 17th day of October, 2018.
By: /s/ Sheila M. Gall
Sheila M. Gall, WSBA #28570
General Counsel
Association of Washington Cities
1076 Franklin Street SE
Olympia, WA 98501-1346
Telephone: 360.753.4137
Facsimile: 360.753.0149
Email: sheilag@awcnet.org

By: /s/ Mark Barber
Mark Barber, WSBA #8379
City Attorney
Annaliese Bradow Harksen
WSBA # 31132
Deputy City Attorney
City of Olympia
601 4th Avenue East
Olympia, WA 98501-1112
Telephone: 360.753.8338
Facsimile: 360.507.5791
mbarber@ci.olympia.wa.us
aharksen@ci.olympia.wa.us

By:/s/ Heidi L. Greenwood
Heidi L. Greenwood, WSBA #38037
City Attorney
City of Port Townsend
250 Madison Street
Port Townsend, WA 98368-5738
Telephone: 360.379.5048
Facsimile: 360.385.4290
Email: hgreenwood@cityofpt.us

By: /s/ William E. Bloor
William E. Bloor, WSBA #4084
City Attorney
City of Port Angeles
321 E. 5th Street
Port Angeles, WA 98362-3206
Telephone: 360.417.4531
Facsimile: 360.417-4529
Email: wbloor@cityofpa.us

12

 CERTIFICATE OF SERVICE
On October 17, 2018, I electronically filed the foregoing
document via the Washington State Appellate Courts Secure Portal,
which will automatically cause such filing to be served on counsel
for all other parties in this matter via the Court’s e-filing platform. I
certify that I am over the age of 18 and competent to make this
certification.
I certify under penalty of perjury pursuant to the laws of
the State of Washington that the foregoing is true and correct.
DATED: October 17, 2018, at Olympia, Washington.
By: /s/ Kari-Ann Pitharoulis
Kari-Ann Pitharoulis
Paralegal II, City of Olympia

iii

 OLYMPIA CITY ATTORNEY'S OFFICE
October 17, 2018 - 4:55 PM
Transmittal Information
Filed with Court:
Appellate Court Case Number:
Appellate Court Case Title:
Superior Court Case Number:

Supreme Court
95295-7
S. Michael Kunath, et al. v. City of Seattle
17-2-18848-4

The following documents have been uploaded:
952957_Briefs_20181017165428SC283251_5038.pdf
This File Contains:
Briefs - Amicus Curiae
The Original File Name was Amicus Curiae Brief.pdf
A copy of the uploaded files will be sent to:
Dawn.taylor@pacificalawgroup.com
EStahlfeld@freedomfoundation.com
JFlesner@perkinscoie.com
LRona@perkinscoie.com
Marisa.Johnson@seattle.gov
VLBabani@perkinscoie.com
aharksen@ci.olympia.wa.us
atabor@orrick.com
bth@pacificlegal.org
cindy.bourne@pacificalawgroup.com
claire@smithandlowney.com
ddunne@orrick.com
edwardss@lanepowell.com
ewb@pacificlegal.org
galexander@bgwp.net
greg.wong@pacificalawgroup.com
hgreenwood@cityofpt.us
jamie.lisagor@pacificalawgroup.com
kent.meyer@seattle.gov
knoll@smithandlowney.com
lawyer@stahlfeld.us
matt@davisleary.com
matt@tal-fitzlaw.com
matthew@davisleary.com
mcbrider@lanepowell.com
paul.lawrence@pacificalawgroup.com
phil@tal-fitzlaw.com
rmahon@perkinscoie.com
rmckenna@orrick.com
sea_wa_appellatefilings@orrick.com
sheilag@awcnet.org
spitzerhd@gmail.com
tricia.okonek@pacificalawgroup.com

 wbloor@cityofpa.us
Comments:
Sender Name: Kari Pitharoulis - Email: kpitharo@ci.olympia.wa.us
Filing on Behalf of: Mark Edward Barber - Email: mbarber@ci.olympia.wa.us (Alternate Email: )
Address:
PO Box 1967
601 4th Avenue E
Olympia, WA, 98507
Phone: (360) 753-8037
Note: The Filing Id is 20181017165428SC283251