The lawsuit brought by brothers Jim and Cliff Courtney was dismissed Tuesday by U.S. District Court Judge Thomas Rice. The brothers plan to appeal the decision.
The Courtneys for the past 15 years have tried to launch a competing ferry on Lake Chelan, but have been blocked by state law. To provide ferry service on the scenic lake, they must obtain a "certificate of public convenience and necessity" from the state. The state will only issue a certificate if the lake's existing ferry company consents or the applicant can prove that competing ferry service is needed.
"We are confident the decision will be reversed on appeal and that Jim and Cliff's right to operate on the lake will be vindicated," said Michael Bindas, an attorney with the free-market advocate group Institute for Justice, who represents the Courtney brothers.
"The Washington Utilities and Transportation Commission is very pleased with the decision," said Fronda Woods, an assistant attorney general who represented the state agency.
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 near Stehekin, including Stehekin Valley Ranch.
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 denied that. They filed their lawsuit last October.
"Government ought to welcome entrepreneurship, especially during a recession," said Jim Courtney. "Instead, Washington state is prohibiting new businesses from forming."
The Courtney brothers argued that preventing them from operating a competing ferry violated their right to use the navigable waters of the United States, which is protected by the 14th Amendment. Rice disagreed.
In 2009, state lawmakers directed the Washington Utilities and Transportation Commission to study the ferry service on Lake Chelan, after some residents complained. But the commission ruled that the current service ensures basic, year-round passenger transportation between and Chelan and surrounding communities that have no alternative options.
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