Pyramid Lake Paiute Tribe of Indians v. Nevada, 724 F.3d 1181 (9th. Cir. 2013) (holding that diversion of water to wetlands for the preservation of waterfowl habitat is not irrigation within the meaning of a decree governing water rights but rather constituted a wildlife use; wildlife use is separate from irrigation use).

The Truckee and Carson Rivers flow through the Truckee River Basin.  The flow from the Truckee River terminates in Pyramid Lake, where it provides the sole source of water for the Pyramid Lake Paiute Tribe (“Tribe”).  The Nevada Department of Wildlife (“NDOW”) and the Nevada Waterfowl Association (“NWA”) applied to transfer both consumptive and non-consumptive water rights from agricultural land in the Newlands Reclamation Project (“Project”).  The Project irrigated a substantial amount of land with water from the Truckee and Carson Rivers in order to turn wasteland into farmland.  Prior to the Project implementation, over irrigation was destroying the lands now served by the Project.  The Reclamation Act of 1902 authorized the Secretary of the Interior to develop the Project in order to prevent the land from becoming wasteland.  Additionally, Congress authorized Nevada conservation agencies to acquire and transfer water rights within the Project.

The NDOW and NWA sought to transfer the water from the Project to a wetland located at the end of the Carson River in order to support the growth of plants used by wildlife and thereby sustain the wildlife habitat.  If approved, the demand for water from the Truckee River would increase, thereby reducing the water flow into Pyramid Lake.  The Tribe and the United States disputed the application, contending that the use was not for irrigation within the meaning of the Alpine Decree (“decree”) that governed water rights in the Project.  The decree does not permit transfer of the non-consumptive portion of water rights to a use other than irrigation.

The issue was whether the NDOW and NWA’s proposed use constituted irrigation as defined by the decree.  The NDOW and NWA argued that the intended water use constituted irrigation because the water would support plant growth.  The Tribe and United States claimed that NDOW and NWA did not seek to transfer the rights for irrigation purposes but rather for the purposes of sustaining wildlife, not plant growth.  The State Engineer (“engineer”) approved the transfer application and found that the proposed water use constituted irrigation use because it involved plant growth.  The Tribe appealed to the District Court for the District of Nevada (“district court”).  The district court disagreed with the engineer, finding that the proposed water diversion for waterfowl habitat was not included in the decree’s definition of irrigation.  The NDOW and NWA appealed to the Court of Appeals for the Ninth Circuit (“court”).

The district court noted that irrigation use as stated in the decree was only applicable to agricultural uses, specifically uses to grow cash crops and pasture, finding the NDOW and NWA unable to prove otherwise.  The decree incorporated portions of Nevada law, including the Nevada water code (“code”).  The code defines wildlife purposes to include the establishment and maintenance of wetlands.  On appeal, the court first noted that the Tribe established a cognizable injury; the water flow into Pyramid Lake is essential to the Tribe’s cultural and economic life. The court also noted that the wildlife purposes definition is precisely what the NDOW and NWA sought to accomplish with the water right transfer.  Both the decree and code discuss irrigation solely within the context of agriculture, and both distinguish agricultural uses from wildlife purposes. However, the court found that neither indicates a water transfer application to sustain wildlife habitat constitutes irrigation.

Accordingly, the court held that the district court correctly concluded that the proposed water diversion for waterfowl habitat did not constitute irrigation as defined by the decree and affirmed the district court.

 

The title picture is of Pyramid Lake, located in western Nevada.


Casitas Mun. Water Dist. v. United States, 708 F.3d 1340 (Fed. Cir. 2013) (holding that (1) the municipal water district’s compensable water right was constitutionally limited by the amount of water the license granted for beneficial use and (2) a diversion potentially constituting a compensable taking of the water district’s water right had not yet occurred, rendering the district’s claim not ripe for adjudication).

Constructed pursuant to a contract between the Casitas Municipal Water District (“Casitas”) and the U.S. Bureau of Reclamation (“BOR”), the Ventura River Project (“Project”) provides water to residential, industrial, and agricultural customers in Ventura County, California.  Ownership of the Project remained with BOR while the agreement gave operational responsibilities to Casitas as well as a perpetual right to all the water that became available through the Project.  The contract also required Casitas to apply to the California State Water Resources Control Board (“SWRCB”) to appropriate the water necessary for the Project.  SWRCB issued Casitas the requisite license in May 1956, and Casitas began operating the Project three years later.  The license stipulated that Casitas could divert up to 107,800 acre-feet per year into the Project and put up to 28,500 acre-feet per year to beneficial use.

In order to avoid civil and criminal liability under the Endangered Species Act (“ESA”) following the listing of the West Coast steelhead trout, Casitas began exploring ways to mitigate the Project’s impact on the steelhead population in the Ventura River.  Following consultation with local water agencies and the National Marine Fisheries Service (“NMFS”), Casitas concluded that the most effective way to achieve mitigation would be to improve upstream access to steelhead habitats.  In 2003, NMFS issued an incidental take permit allowing Casitas and BOR to avoid ESA liability if they agreed to construct and maintain a fish ladder to allow migrating steelheads to safely bypass the Project.  NMFS also required Casitas to divert sufficient water from the Project in order to allow passage through the ladder.  Casitas opened the fish ladder under protest on December 9, 2004.

On January 26, 2005, Casitas filed suit in the United States Court of Federal Claims (“trial court”).  Casitas first asserted that the United States had breached the terms of the 1956 contract by forcing Casitas to divert water through the fish ladder.  Alternatively, Casitas asserted that, by imposing the diversion requirement, the United States had physically taken Casitas’ constitutionally protected property without just compensation, in violation of the Fifth Amendment.  The trial court dismissed the contract claim under the sovereign acts doctrine and entered summary judgment for the government on the takings claim.

Casitas appealed and the United States Court of Appeals for the Federal Circuit (“court”) affirmed the dismissal of Casitas’ contract claim.  The court reversed the granting of summary judgment on the takings claim, however, and remanded for further proceedings on that issue.  On remand, the trial court held that, for purposes of a takings claim, California law limits a licensee’s compensable water right to its right to beneficial use.  Even though NMFS had forced Casitas to divert water into the fish ladder, the trial court held that the diversion had not forced Casitas to actually deliver less water to its customers than it would have otherwise.  The trial court dismissed Casitas’ takings claim on grounds that the claim was not yet ripe and Casitas appealed.

On appeal, Casitas claimed that, in its first appeal, the court had held that a physical taking had already occurred due to the fish ladder diversion, and thus the trial court erred by conducting its own takings analysis on remand.  The court held that Casitas had interpreted its opinion in the first appeal too broadly.  First, Casitas erroneously relied on concessions that the government had only stipulated to in order to put the case in a posture for summary judgment.  Second, the court held that neither it nor the trial court had addressed the actual scope of Casitas’ water right prior to the appeal at bar.  The court held that the trial court had not erred in conducting a complete physical takings analysis on remand.   Moreover, the court upheld the trial court’s holding that under California water law, a court will not find a compensable taking unless the government action complained of has actually impacted a licensee’s beneficial use.

Casitas then challenged the trail court’s holding that the diversion through the fish ladder would not impinge on Casitas’ right to beneficial use until such time as the diversion caused Casitas to deliver to its customers less water than it otherwise would have.  The court found that this was the correct measure of a physical taking in this context and that Casitas had failed to show that the fish ladder diversion had actually impinged on Casitas’ deliveries to its customers.

Casitas also argued that its water license was evidence that the SWRCB had already determined that Casitas could beneficially use all 107,800 acre-feet of diversions allowed to it under the license.  Thus, Casitas argued, it had a compensable right to this entire amount.  The court first confirmed the trial court’s holding that California does not recognize a compensable property right in water that a licensee diverts but never puts to a beneficial use.  The court then held that a maximum limit on diversion in the license did not establish that the SWRCB had determined that Casitas could in fact put that maximum amount to beneficial use.  The court likewise pointed to the fact that the SWRCB had expressly limited Casitas’ beneficial use under the license to 28,500 acre-feet per year, thus limiting Casitas’ compensable right to that amount.

Casitas next claimed that diverting water for storage was a per se beneficial use, compensable under a takings claim.  The court disagreed, holding that California water law does not recognize storage as a per se beneficial use, but simply as a means to a beneficial end.  Likewise, the license itself limited Casitas’ right to an enumerated list of beneficial uses, mere storage not among them.

Casitas also asserted that its takings claim had begun to accrue the moment that NMFS took the regulatory action requiring Casitas to divert water through the fish ladder.  Casitas argued that it was this regulatory action potentially causing a property injury, here the NMFS diversion requirement, and not the injury itself that gave rise to its takings claim.  However, the court held that a physical takings claim only accrues when the physical act constituting the taking occurs, not at the time of the regulatory action potentially causing a taking.  Under this rubric, Casitas would have had to show that the fish ladder diversion had physically impinged on its right to beneficial use, which is to deliver water to its customers.  Because Casitas made no such showing, the court affirmed the trial court’s dismissal of Casitas’ takings claim as not ripe.

In conclusion, the Federal Circuit held that California water law limits a licensee’s compensable water right to the right to beneficial use.  The court held that Casitas’ takings claim was therefore not ripe because a governmental action physically impinging on its right to beneficial use had not yet occurred.  The court affirmed the trial court’s decision to dismiss Casitas’ complaint without prejudice.

 

The title picture is of Lake Casitas, located in southern California.


Bounds v. New Mexico ex rel. D’Antonio, 306 P.3d 457 (N.M. 2013) (holding that (i) the New Mexico Domestic Well Statute (“DWS”), requiring the state engineer to issue domestic well permits without also determining the availability of unappropriated water, did not violate prior appropriation principles as required by the New Mexico Constitution; and (ii) the plaintiffs failed to bring forth how the DWS deprived holders of senior appropriation rights of a property interest).

Horace Bounds (“Bounds”), a farmer and rancher in the Mimbres basin in southwestern New Mexico, brought forth a facial constitutional challenge against New Mexico’s DWS, which requires the state engineer to issue domestic well permits without also determining the availability of unappropriated water. On June 15, 2006, Bounds filed an action for declaratory judgment in the Sixth Judicial District Court (“district court”), arguing three counts in his complaint. The first count asked the district court to rule the DWS unconstitutional as it requires the state engineer to issue domestic well permits without also acknowledging the availability to unappropriated water, to the detriment of senior water holders and in violation of New Mexico’s prior appropriation standard. The second count asked for a ruling that the issuance of domestic well permits, in accordance with the DWS, constituted as a United States Constitution and New Mexico Constitution taking without compensation. Lastly, Bounds asked for an injunction preventing the state engineer from issuing new domestic well permits without also determining if unappropriated water was also available. The New Mexico Farm and Livestock Bureau (“NMFLB”), an independent and nongovernmental agency representing many farm and ranch families, filed a motion to intervene, which the district court granted. The state engineer then filed a motion for summary judgment arguing clear legislative intent in the language of the DWS.

The district court (i) ruled the DWS unconstitutional as a matter of law as it concluded that the DWS was an impermissible exception to the prior appropriation standard and (ii) found Bounds unable to show any injury to his existing senior water rights as a result of the DWS, thereby rejecting his takings claim. The state engineer appealed the district court’s constitutional holding to the Court of Appeals, which then reversed the district court’s holding and found the New Mexico Legislature had authority to enact statutes in pursuit of the administration of the appropriation and use of surface and groundwater. The Court of Appeals also recognized the prior appropriation doctrine, contained in Article XVI of the New Mexico Constitution, as setting forth only general and broad principles.  The Court of Appeals explained that the priority administration process is not stringently ruled by the priority doctrine because it is the Legislature’s duty to enact statutes that govern the administration of appropriation and the use of surface and groundwater. Bounds and NMFLB (“Petitioners”) then each filed petitions of certiorari to the Supreme Court of New Mexico (“Court”) to review the Court of Appeals’ constitutional holding.

The Court addressed two of the Petitioners’ challenges: (i) the DWS required the state engineer to issue domestic well permits without acknowledging whether there was unappropriated water available, thereby violating the prior appropriation doctrine required by the New Mexico Constitution; and (ii) the failure to provide notice prior to the state engineer’s issuance of those domestic well permits violated the Petitioners’ rights to due process.

First, the Court considered Petitioners’ facial constitutional challenge de novo. In considering a facial constitutional challenge, the Court considers only the text of the statute and not its application. Article XVI, Section 2 of the New Mexico Constitution states, “[P]riority of appropriation shall give the better right.” With the language of the DWS in mind, the Court argued that the language “better right” only gives guidance when two existing water rights are in conflict. The Court acknowledged that the DWS was a permitting statute; however, it was silent on how the state engineer planned to administer domestic well permits. Nothing in the DWS prevented the state engineer from administering domestic well permits in a similar fashion as to all other water rights, as the New Mexico Constitution requires. Mistakenly, Petitioners equated the issuance of a permit under the DWS with an absolute right to acquire and utilize that water pursuant to the issued permits. However, contrary to the Petitioners’ contentions, the DWS created a conditional right and not an absolute right. Therefore, because the DWS dealt with permitting and not administration, it did not facially violate prior appropriation standards as required by the New Mexico Constitution.

Second, the Court considered whether the DWS violated the Petitioners’ procedural and substantive due process rights. Procedural due process requires a governmental agency to give proper notice and to hear a case before the alleged deprivation of property. Substantive due process requires the Court to consider whether the government action interferes with rights implicit to ordered liberty. In order for the Court to rule, the Petitioners must show an actual and personal deprivation or injury. However, as the district court held, Petitioners, specifically Bounds, were unable to show any injury to their water rights. Although Bounds produced an expert witness, that expert failed to show the effect of the domestic wells on Bounds’ water rights. The Court then rejected the due process challenge, finding it to be too speculative.

Lastly, the Court addressed the Court of Appeals’ ruling that the prior appropriation doctrine set forth broad principles and nothing else. The Court specifically rejected this ruling and stated that it would inevitably lead to a large amount of Legislative and administrative discretion in regards to priority water rights.

Accordingly, the Court thereby affirmed the Court of Appeals that the DWS did not violate the United States Constitution and the New Mexico Constitution, and the DWS did not violate Petitioners’ due process rights.

 

 

 

The title picture is of Big Hatchet Peak located in southwestern New Mexico.  The picture is covered by the Creative Commons Attriubtion-Share Alike 2.5 Generic License.  This picture is attributed to streeyyr, and the use of this picture does not suggest streeyyr endorses this blog.