Clallam County v. Department of Transportation, of the State of Washington, Washington State Department of Transportation v. Federal Highway Administration and Ray A. Barnhart, Administrator, Defendants

849 F.2d 424 CLALLAM COUNTY, et al., Plaintiffs-Appellees, v. DEPARTMENT OF TRANSPORTATION, OF the STATE OF WASHINGTON, et al., Defendants-Appellants. WASHINGTON STATE DEPARTMENT OF TRANSPORTATION, Plaintiff-Appellant, v. FEDERAL HIGHWAY ADMINISTRATION and Ray A. Barnhart, Administrator, Defendants- Appellees. No. 85-4124. United States Court of Appeals, Ninth Circuit. Argued and Submitted Sept. 3, 1986. Decided June 14, 1988. Thomas R. Garlington, Sr. Asst. Atty. Gen., Olympia, Wash., for defendants-appellants. Mark E. Fortier, Kargianis & Austin, Seattle, Wash., for plaintiffs-appellees. Appeal from the United States District Court for the Western District of Washington. Before FLETCHER, FERGUSON and REINHARDT, Circuit Judges. FLETCHER, Circuit Judge: 1 The Washington State defendants appeal the district court's interlocutory order granting a permanent injunction that prohibits the State from collecting tolls on the Hood Canal Bridge. The State contends that the district court misapplied 23 U.S.C. Sec. 129 (a) of the Federal-Aid Highway Act, 23 U.S.C. Sec. 101 et seq., in failing to consider the State's insurance proceeds and interest as "costs of construction." We agree.…