Wetlands/Inverse Condemnation: Washington Appellate Court Addresses Application of Subsequent Purchaser Doctrine – JD Supra

Case Report: Stephens v. Town of Steilacoom – A Nexus of Property Rights, Environmental Regulation, and Sustainable Development Goals

Introduction and Case Summary

An October 14, 2025, opinion by the Court of Appeals of Washington in the case of Mark D. Stephens & Lynn Stephens v. Town of Steilacoom addressed a conflict between private property development and municipal environmental management. The court’s decision centered on the application of the subsequent purchaser doctrine in an inverse condemnation claim. This case provides critical insights into the legal challenges at the intersection of urban development (SDG 11), water management (SDG 6), ecosystem protection (SDG 15), and the role of legal governance (SDG 16) in balancing these interests. The court ultimately affirmed the dismissal of the property owners’ claims, holding they lacked standing as subsequent purchasers.

Factual Background and Alignment with SDG 11 & SDG 6

In an effort to advance urban water management, consistent with SDG 6 (Clean Water and Sanitation) and SDG 11 (Sustainable Cities and Communities), the Town of Steilacoom approved and installed a stormwater management system between 2010 and 2014. This system included a bioswale and a drainage pipe adjacent to the property later purchased by Mark and Lynn Stephens. The previous owners of the property had commissioned a report which identified the presence of wetland areas on the land, a critical component of local ecosystems.

In 2018, the Stephens purchased the property. Despite receiving the report from the previous owners indicating the presence of wetlands, they proceeded with development preparations. These actions included clearing vegetation and discharging fill dirt into the wetland area, which prompted a stop-work order from the Town and a cease-and-desist letter from the United States Army Corps of Engineers. This conflict highlights the tension between private development initiatives and the regulatory frameworks designed to protect vital natural resources, a core challenge in achieving sustainable urban growth.

Legal Proceedings and Institutional Frameworks (SDG 16)

The Stephens initiated legal action against the Town, invoking legal mechanisms under SDG 16 (Peace, Justice and Strong Institutions) to resolve the dispute between citizens and a municipal government. Their suit included the following six causes of action:

1. Quiet title;
2. Injunctive relief;
3. Trespass;
4. Nuisance;
5. Inverse condemnation; and,
6. Substantive due process violation under 42 U.S.C. § 1983.

After proceedings in both federal and state courts, the Superior Court of Pierce County granted the Town’s motion for summary judgment. The court agreed with the Town’s argument that the Stephens’ claims were barred by the subsequent purchaser doctrine, as they were on notice of the wetland’s existence via the report provided at the time of purchase. The Stephens appealed this decision.

Court of Appeals Analysis: Balancing Property Rights and Public Interest

The Court of Appeals affirmed the lower court’s ruling, focusing on the legal principle that a subsequent purchaser cannot sue for an alleged “taking” of property that occurred before their ownership. The court’s analysis reinforced the stability of land-use regulations essential for long-term sustainable planning.

• Lack of Standing: The court held that the Stephens, as subsequent purchasers, lacked standing to bring an inverse condemnation claim. The alleged taking occurred when the Town implemented its stormwater plan, which was before the Stephens owned the property.
• Purpose of the Doctrine: The ruling emphasized that the subsequent purchaser doctrine prevents a new owner, who may have paid a reduced price for property due to an existing condition, from also recovering damages for that same condition.
• Notice Immateriality: The court, citing precedent, stated that whether the Stephens had notice of the wetland was immaterial to the application of the doctrine. The key factor was the timing of the alleged governmental action relative to the property purchase.
• Related Claims Subsumed: All related tort claims, such as trespass and nuisance, were deemed subsumed by the inverse condemnation claim. The court clarified that this subsumption occurs when a government entity is the defendant and the damages sought relate to the loss of property rights, regardless of the success of the primary claim.

Implications for Sustainable Development

The court’s decision carries significant implications for the implementation of the Sustainable Development Goals, particularly in the context of urban planning and environmental law.

• SDG 15 (Life on Land) & SDG 6 (Clean Water and Sanitation): The ruling indirectly reinforces the protection of wetlands and water management systems. By limiting the ability of subsequent landowners to challenge pre-existing environmental conditions resulting from municipal actions, the decision provides legal stability for cities implementing crucial stormwater and ecosystem-preservation projects.
• SDG 11 (Sustainable Cities and Communities): The case underscores the importance of due diligence in property transactions and the need for transparent land-use planning. It highlights how legal frameworks can support municipal efforts to create resilient and sustainable infrastructure, even when such projects alter the characteristics of private land.
• SDG 16 (Peace, Justice and Strong Institutions): The judgment clarifies the application of established legal doctrines in environmental disputes. It demonstrates how strong institutions apply legal principles to create predictable outcomes, balancing individual property rights with the broader public interest in environmental protection and sustainable development.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses a legal dispute concerning land development, stormwater management, and wetland protection, which connects to several Sustainable Development Goals (SDGs). The primary SDGs addressed are:

• SDG 6: Clean Water and Sanitation: This goal is relevant due to the focus on stormwater management and the protection of a wetland, which is a critical water-related ecosystem.
• SDG 11: Sustainable Cities and Communities: The case involves urban planning and infrastructure within the “Town of Steilacoom,” specifically concerning drainage systems and land use regulations designed to make the community resilient and environmentally sound.
• SDG 15: Life on Land: This is directly addressed through the efforts to protect a wetland ecosystem from degradation caused by development activities, such as clearing vegetation and discharging fill dirt.
• SDG 16: Peace, Justice and Strong Institutions: The entire article is a report on a legal case, showcasing the role of institutions (municipal government, U.S. Army Corps of Engineers, and the court system) in enforcing environmental regulations, resolving disputes, and upholding the rule of law regarding property rights and environmental protection.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, several specific SDG targets can be identified:

1. SDG 6: Clean Water and Sanitation

   • Target 6.6: “By 2020, protect and restore water-related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes.”
     
     Explanation: The central conflict of the article is the protection of a wetland. The “stop work order from the Town” and the “cease-and-desist letter” from the “United States Army Corps of Engineers” regarding the “discharge of fill dirt into the wetland” are direct actions aimed at protecting this water-related ecosystem from destruction.

2. SDG 11: Sustainable Cities and Communities

   • Target 11.5: “By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters…”
     
     Explanation: The article mentions that the Town of Steilacoom approved the “installation of a stormwater plan, and a bioswale and a drainage pipe.” These are infrastructure measures designed to manage runoff, which helps mitigate local flooding, a common water-related disaster in developed areas.

3. SDG 15: Life on Land

   • Target 15.1: “By 2020, ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains and drylands…”
     
     Explanation: The legal actions taken by the Town and the Army Corps of Engineers enforce regulations designed to conserve the wetland. The previous owners’ report identifying “wetland areas… on a portion of the property” and the subsequent legal battle to prevent it from being filled in are directly related to the conservation of an inland freshwater ecosystem.
   • Target 15.5: “Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity…”
     
     Explanation: The Stephens’ actions of clearing “all vegetation” and trucking in “fill dirt” represent a direct threat of habitat degradation. The stop-work and cease-and-desist orders are the “urgent and significant actions” taken by regulatory bodies to halt this degradation.

4. SDG 16: Peace, Justice and Strong Institutions

   • Target 16.3: “Promote the rule of law at the national and international levels and ensure equal access to justice for all.”
     
     Explanation: The article details a complete legal process where the Stephens brought a suit against the Town. The case progressed from a local court to the “United States District Court” and then to the “Court of Appeals of Washington.” This demonstrates the functioning of the rule of law and the mechanisms available for seeking justice and resolving disputes.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article does not provide quantitative data but implies several qualitative indicators that can be used to measure progress:

• Indicator for Target 6.6 & 15.1 (Protecting Ecosystems): The existence and enforcement of regulations to protect wetlands serve as a key indicator. The article points to this through the “stop work order from the Town” and the “cease-and-desist letter” from the “United States Army Corps of Engineers.” These actions are tangible evidence of institutional efforts to prevent the loss of water-related ecosystems (Indicator 6.6.1: Change in the extent of water-related ecosystems over time).
• Indicator for Target 11.5 (Disaster Risk Reduction): The implementation of a “stormwater plan, and a bioswale and a drainage pipe” by the Town is an indicator of local government strategy and investment in infrastructure to mitigate water-related risks like flooding.
• Indicator for Target 16.3 (Rule of Law): The detailed account of the lawsuit, including the initial filing, motions for summary judgment, removal to a federal court, remand, and appeal, serves as an indicator of a functioning legal system that provides access to justice for resolving disputes between citizens and government entities. The application of legal principles like the “subsequent purchaser doctrine” indicates the presence of an established and followed legal framework.

4. Table of SDGs, Targets, and Indicators

Source: jdsupra.com