Appeals court upholds ferry decision



SPOKANE — A federal appeals court has rejected efforts to operate a private ferry on Lake Chelan to compete with a monopoly on service to the remote town of Stehekin.

The 9th U.S. Circuit Court of Appeals on Monday upheld a 2012 decision by a federal judge in Spokane that dismissed a lawsuit seeking to create competition for the only ferry licensed by the state government.

“In this case, the state of Washington has a vital interest in regulating traffic on its navigable waterways,” the appeals court ruled.

The monopoly, coupled with stringent rules on rates and terms of service, “has historically been adopted for industries believed to have characteristics of a `natural monopoly,”‘ the ruling said.

The lawsuit brought by brothers Jim and Cliff Courtney of Stehekin was initially dismissed last year by U.S. District Court Judge Thomas Rice. Their lawyer Michael Bindas said the next step is to appeal the 9th Circuit ruling to the U.S. Supreme Court.

“We will ask the U.S. Supreme Court to address the constitutionality of that monopoly,” said Bindas, an attorney with the free-market advocate group Institute for Justice.

The Courtneys have tried for the past 16 years to launch a ferry on the scenic lake. But to do so, they must obtain a certificate of public convenience and necessity from the state of Washington, which will only give its OK if the existing ferry company consents or the applicant can prove competing service is needed.

The Lake Chelan Boat Co. has had the exclusive right since 1929 to provide ferry service on Lake Chelan and carries about 25,000 passengers each year. Critics complain that the ferry schedule does not allow people to spend much time in Stehekin, which can only be reached by ferry, floatplane or on foot.

The Courtneys own several tourism-related businesses in the area, including Stehekin Valley Ranch. The town is within the popular Lake Chelan National Recreation Area.

Jim Courtney applied for a certificate but was denied after the existing ferry company protested. He and his brother then tried to launch a limited boat service for patrons of Stehekin-based businesses, but the state also stalled that effort.

The Courtney brothers argued that preventing them from operating a ferry violated their constitutional right to use the navigable waters of the United States. The federal courts have disagreed.

In 2009, state lawmakers directed the Washington Utilities and Transportation Commission to study ferry service on Lake Chelan, after some residents complained. But the commission ruled that the current service ensures basic, year-round passenger transportation.