A Kitsap County judge has dismissed with prejudice all claims made against the state by the developer of the controversial pit-to-pier project along Hood Canal.

That developer – Hood Canal Sand and Gravel – is not giving up its fight to nullify an easement granted by the state Department of Natural Resources to the U.S. Navy for tidelands along the Hood Canal shoreline, which has effectively blocked its plan to build a pier for loading gravel onto barges for shipment to local and international markets.

“We're going to be appealing the decision,” said Dan Baskins, project manager for developer Hood Canal Sand and Gravel's Thorndyke Resource Operation Complex, also known as T-ROC.

“We decided to move on to the [state] Court of Appeals because it can make a decision that is binding.”

Thorndyke Resource’s Central Conveyor and Pier project, also known as the Fred Hill Materials proposal, would use a 4-mile conveyor belt to transport gravel from the former Fred Hill Materials Shine extraction pit to a proposed 998-foot pier 5 miles south of the Hood Canal Bridge. Each year, some 6.75 million tons of gravel would be loaded onto barges and shipped through the Hood Canal, and under the bridge, to markets throughout the Pacific Northwest and beyond.

The developer originally filed suit in August 2014 in both U.S. District Court and Jefferson County Superior Court, alleging Department of Natural Resources (DNR) officials violated state and federal laws when granting the Navy a 55-year conservation easement on July 7, 2014 aimed at protecting Navy operations by restricting development on more than 4,800 acres of state-owned, aquatic tidelands along the Hood Canal coastline from the Hood Canal Bridge south to the Jefferson-Mason county line.

In Jefferson County Superior Court, visiting judge Sally Olsen granted May 20 a summary judgment in favor of the state defendants, writing “...the court finds that there are no genuine issues of material fact in dispute in this case...”

“It's hard to understand the decisions she made because there's no analysis,” Baskins said. “That tells us a lot. This is nothing unexpected. This is an early round.”

In October 2014, a U.S. District Court judge dismissed with prejudice the developer's claims against state defendants – the state of Washington, DNR and Commissioner of Public Lands Peter Goldmark – finding the developer had no right to sue a state agency and its officials in federal court.

The developer's claims against federal defendants – the United States of America, Department of the Navy, Secretary of the Navy Ray Mabus and real estate contracting officer Michael Brady of the Naval Facilities Engineering Command Northwest – remain in U.S. District Court, according to the U.S. Attorney's Office in Seattle.

“We're still in the procedural rounds at the federal level,” Baskins said. “The Navy is still trying to throw out the case without it being heard. We'll be addressing that later in June. The facts of the case will prevail.”

The 21-page suit not only asks the court to nullify the easement, it asks the court for an injunction to prevent the state and Navy from enforcing the easement, which restricts private development and preserves Navy access to canal waters for military exercises.

As an adjacent property owner, the developer wants to be added to a list of exceptions or third parties whose rights are reserved under the easement, allowing it to move ahead with plans to build a pier directly across the canal from the submarine base at Bangor.

The suit argues that Goldmark, DNR and the Navy acted “arbitrarily and capriciously” in not including the company on a list of exceptions, violating the company's due process rights.

“...Defendant's actions in granting the easement to the United States Navy, and establishing fair market value for that easement, were not unlawful, arbitrary or capricious,” Olsen wrote in her judgment regarding the Navy's purchase of the easement for $720,000 based on several appraisals the developer claimed never occurred.

“Plaintiff's difference of opinion is not a sufficient basis to establish that DNR's actions were 'arbitrary and capricious,” assistant attorney general Edward Callow wrote in an April 17 declaration.

“Since statehood, private entities have attempted to assert rights to the beds of the state's navigable waters that they simply do not have.”

The developer claimed it had a vested right to use those tidelands as it had applied for a lease in 2003 under name Fred Hill Materials. Cyrilla Cook, the policy unit supervisor in DNR's aquatics division, wrote in her April 20 declaration that DNR never received such an application.

In her judgment, Olsen points out the state has discretion to lease tidelands to an abutting property owner, but is not required to do so.

Fred Hill Materials began the permit process in 2003. After Fred Hill Materials filed for bankruptcy in 2012, Thorndyke Resource took over the pit-to-pier project.

The Navy applied for its easement in September of 2012, while the developer applied in June 2013, according to court documents.

In defending the state's granting an easement to the Navy, Callow wrote, “This project would directly interfere with the Navy's national security interests in protecting Naval Base Kitsap; would jeopardize the Hood Canal ecosystem; and would prohibit the public from using state-owned aquatic lands in the area of the proposed dock for the entire length of time the dock exists.”

John Fabian, leader of the roughly 5,000-member Hood Canal Coalition, is also concerned with the project's potential environmental impact, as well as the risk associated with running barges under the Hood Canal Bridge.

Baskins said the alternative seems no more reasonable.

“There's some confusion as to why we would continue to do this,” Baskins said. “We're confident that what we're doing is very benign and very straightforward. It makes no sense to run trucks from pits in the cascade foothills when you have a source that is marine accessible and so easy to mine and transport.”

Fabian said he's not surprised the developer plans to appeal, but predicts it will be unsuccessful.

“Logic may not be one of their strengths, but I think persistence is,” Fabian said, pointing out the developer apparently has the financial resources to stay the course, especially considering it spent $200,000 on lobbyists in Washington, D.C. in 2014, according to the Center for Responsive Politics, a nonpartisan, nonprofit research group that tracks money in U.S. politics.

“One has to ask how deep are their pockets or their sponsors' pockets. They have the finances coming from somewhere to support an appeal.”