United States v. Barthelmess Ranch Corporation, 386 Mont. 121 (2016) (holding: (i) the U.S. Bureau of Land Management could perfect stockwatering appropriation claims in its reservoirs irrespective of contentions rooted in historic water use from the same source and (ii) the United States owned reserved water rights for stockwatering in a pothole lake on federal grazing land pursuant to an Executive Order).

The United States Bureau of Land Management (“BLM”) filed six water right claims in Montana. These included five reservoir claims rooted in Montana law, and a reserved water right in Pothole Lake, a natural feature located on a federal land reservation. The BLM claimed to use each water source, all located wholly or partially on federal land, for wildlife and stockgrazing for grazing permittees, the latter being the primary focus in the following discussion.

The BLM’s five reservoir claims relate to the agency’s acquisition of Funnells Reservoir in 1951, and its construction of the Windy Day Reservoir in 1955, Tallow Creek Reservoir in 1936, North Flat Creek Reservoir in 1937, and the Sharon Reservoir in 1961. The sources of contention regarding the BLM’s water right claims, including Pothole Lake, stemmed from the respective holders of property interest in surrounding land (“Objectors”). The Objectors claimed proper ownership of BLM’s water rights, claiming instead their own right that derived from ancestral free grazers who, prior to the reservoir construction, owned and grazed livestock on the appurtenant land.

BLM claimed a reserved water right in Pothole Lake pursuant to two legal frameworks: (1) the Stock Raising Homestead Act enacted in 1916, which permitted the Secretary of the Interior to reserve lands containing “waterholes or other bodies of water needed or used by the public for watering purposes”; and (2) the Public Water Reserve No. 107 (“PWR 107”) enacted pursuant to a 1926 Executive Order, which “reserved all springs and water holes on vacant, unappropriated, and unreserved public land throughout the country.” The Objectors claimed, however, that ancestral free grazers owned and watered stock in the same area.

The BLM moved for summary judgment for all objections and the Montana Water Court consolidated them into this single case. The water court first addressed the validity of the Objectors’ claims to BLM reservoirs. The water court recognized as undisputed that the BLM developed the Windy Day, North Flat Creek, Tallow Creek, and Sharon Reservoirs with a stockwater right priority date coinciding with their respective completion and since consistently used the reservoirs for stockwatering. Then, after addressing the common law elements for valid water appropriation, the water court determined that impounding water into a reservoir is a sufficient diversion and the sole contention rested on whether the BLM applied the water to beneficial use. The Objectors claimed that the BLM itself did not own livestock or use reservoir water and thus under Montana law, BLM could not perfect its stockwatering claims.

However, the water court examined principles from a governing precedent, Bailey v. Tintinger, that “an appropriation of water for the use of others was complete upon the completion of the diversion system [in this case the reservoirs] and making the water available for use by others.” When extending this principle to the present case, the water court determined that Montana law did not require that BLM own and graze livestock to perfect water rights and complete appropriation.

Similarly, the water court found it undisputed that BLM consistently used Funnels Reservoir since acquiring its property interest. Thus under Montana law, BLM also acquired any appurtenant water rights.

Although the Objectors claimed prior use by their ancestral free grazers precluded BLM’s six water right claims, this contention ran counter to the core principle of water rights governed by Montana law that “multiple appropriators can enjoy rights from the same source.” The water court also clarified that the Objectors’ claimed stockwatering by direct uses from water sources, not by reservoir impoundments, and it followed that the Objectors’ claims differed from the subsequent BLM reservoir claims.

The water court next addressed the Objectors’ claim to Pothole Lake and determined that PWR 107 reserved Pothole Lake’s respective land and water.

The Objectors appealed. The Montana Supreme Court (“Court”), under the “clearly erroneous” standard, reviewed two issues on appeal: (1) whether the BLM held stockwatering rights in constructed reservoirs under Montana law and (2) whether the BLM owned reserved water rights for stockwatering in Pothole Lake. The Objectors made multiple contentions and the Court rejected each as invalid when evaluating them pursuant to relevant federal and Montana law.

The first issue raised three primary contentions. First, the Court confirmed that BLM appropriated water. However, Objectors argued that irrespective of a capability to appropriate water, the BLM failed to meet the requirements for perfecting water rights because it did not charge grazers for reservoir use. The Court quickly dismissed this contention when reiterating that Bailey expressly recognized that, “as long as the water is made available for sale, rental, or distribution or disposal to others, it is a valid appropriation.” Additionally, the Court acknowledged that Montana public policy encourages capable individuals and entities to appropriate water and make it available for use by others. Further, the Court recognized that Montana law commits to “recognizing the ability to appropriate water for its ultimate use by a third party.”

Second, the Objectors argued that even if BLM could appropriate water, it did not do so by impounding water in reservoirs because “simply facilitat[ing] use of water already appropriated” by ancestral free grazers did not constitute a valid appropriation. Again, the Court dismissed this contention as unsupported by Montana water law and public policy when noting, “multiple appropriators can claim water rights from the same source, and that the first in time has the best right.” Along that vein, the first user on a water source does not obtain the right to exclude all others from claiming water from the same source. The Court noted, for example, if Objectors held viable stockwatering claims based on ancestral free grazers, then those rights would be senior to those claimed by BLM because each right has its own priority in time.

Third, the Objectors contended that by developing new reservoirs, the BLM “simply modified” prior stockwatering practices by ancestral free grazers rather than creating a new appropriation. The Court acknowledged, however, that although a direct-flow water user can construct reservoirs to stabilize available water without creating new appropriations, the BLM claimed no such direct-flow water rights. BLM only claimed new rights to stored water with mid-twentieth century appropriation dates, which created separate rights with their respective priority dates.

Once resolving the contentions, the court then emphasized its unwillingness to depart from the “bedrock principles” of Montana water law that multiple appropriators can perfect claims from the same water source and thus the water use by ancestral free grazers did not preclude the BLM from claiming water rights to the same source. Further, Montana public policy encourages the benefits arising from allowing appropriations that make water available to third party users.

The second issue led the Court to determine the broad language of PWR 107 reserving “every spring or waterhole, located on unsurveyed public land” encompassed Pothole Lake. Therefore, the BLM maintained a reserved stockwatering right on federal land and the Objectors raised no valid contentions to undermine this established right.

Accordingly, the court affirmed the water court holding that the BLM maintained valid appropriations in its reservoirs under Montana law and the BLM owned reserved water rights for stockwatering in Pothole Lake pursuant to PWR 107.

Justice Laurie McKinnon, dissenting.

Justice McKinnon disagreed with the majority’s application of Bailey to conclude that the BLM put water to beneficial use and completed an appropriation. Instead, the dissent argued that the majority expanded Bailey’s narrow exception that applied to public service corporations. The Bailey court determined that to require a corporation to perfect a water right upon showing of an actual beneficial use would be impractical because corporations could not perfect a water right until a third party put water to a beneficial use. Here, the dissent argued the majority misinterpreted that exception to include “anyone” who “distributes” water could perfect a water right. In so doing, the dissent raised foundational legal principles to conclude that beneficial use “ is one that inures to the benefit of the appropriator.” Along that vein, the dissent contended that the ancestral free grazers inured to their benefit when their cattle grazed and drank water, and thus completed a valid appropriation. Conversely, the dissent further argued the BLM did not perfect a water right because it “never owned the livestock that appropriated the water or grazed federal lands” and thus, irrespective of reservoir construction, the BLM did not appropriate water under Montana law.

Gia Austin

Image: Cattle graze on a pasture near Browning Montana. Flickr user Mark Stevens, Creative Commons.

 


University Of Denver Water Law Review Annual Symposium 2017: At The Confluence: The Past, Present, and Future of Water Law

        Denver, Colorado                         April 7, 2017

Ethical and Professional Standard for Lawyers & Engineering Experts in Water Court Litigation and Dispute Resolution

 

The final panel at the 2017 University of Denver Water Law Review Annual Symposium consisted of Stephen Leonhardt, a Partner at Burns, Figa & Will, PC, Kevin Rein, Deputy State Engineer of the Colorado Division of Water Resources, Ema Schultz, Assistant Attorney General with the Colorado Department of Law, and Janet Williams, Chairman at Leonard Rice Engineers, Inc.

Stephen Leonhardt opened the panel by giving a roadmap of the many rules governing lawyers in water court proceedings that include the Colorado Rules of Professional Conduct, Colorado Rules of Civil Procedure, Water Court Rules, Federal Rules of Evidence, and Colorado Rules of Evidence. Mr. Leonhardt noted the role lawyers play as zealous advocates, but said that lawyers must also follow the rules of professional conduct, act with candor, adhere to confidentiality requirements, and satisfy certain disclosure responsibilities. Mr. Leonhardt mentioned that the rules pertaining to disclosure have changed, and that the Federal Rules of Civil Procedure were amended in 2010 to narrow the disclosure requirements; the current rule requires disclosure of the facts or data considered by the witness in forming the expert’s opinion. Mr. Leonhardt then explained that the Colorado Rules of Civil Procedure were amended similarly. Under the current rules, draft expert reports are generally protected from disclosure or discovery, except for those identifying facts, data, or assumptions that the expert considered in forming their opinion. Mr. Leonhardt further stated that under Water Court Rules the duty of the expert witness is to the court and to assist the trier of fact and not to the attorney.

Next, Janet Williams addressed the ethical obligations and principles for engineers serving as experts. Ms. Williams noted that engineers owe a duty of honesty and impartiality to the public, their employers, and clients. Further, Ms. Williams stated that an engineer’s role as an expert witness is to provide objective, unbiased, independent judgment to help the water judge determine the facts in dispute. Ms. Williams discussed several factors that help an engineer maintain objectivity. These factors included the importance credibility plays in the industry, the objection process in which opposing counsel reviews the expert report for bias, and the peer review that occurs in expert meetings.

Ema Schultz then spoke and addressed the duty of the Attorney General in water court litigation from her perspective. As the exclusive legal representative of the State, Ms. Schultz noted that the Attorney General has the duty to set consistent legal policy and to consider the larger interests of the State and its citizens when determining the course of litigation. As Assistant Attorney General, Ms. Schultz stated that her role is to advocate for her clients, coordinate the litigation process, and provide legal advice for water administrators.

Kevin Rein, the Deputy State Engineer of the Colorado Division of Water Resources (“DWR”), concluded the panel by discussing the role the DWR plays in the court. Mr. Rein discussed the DWR’s role as the administrator of water rights, and their statutory responsibility to oversee water compacts and to use their technical and legal expertise to assist the court to ensure that the court’s decrees comply with those compacts. Mr. Rein stated that the DWR prioritizes being objective, comprehensive, and transparent when it consults with the water court.

At the end of the panel an audience member asked the question of whether the DWR or the Attorney General had any ethical obligations to fully inform the water court whether the position they take in a particular case is consistent with their past administrative actions. Kevin Rein discussed his hope that the actions of DWR in the field and the DWR’s positions taken in the court would be consistent, especially as it applies to similar structures or similar water rights. Mr. Rien could not think of a situation where this had occurred, but stated that in a situation where this were true, the DWR would want to disclose this to the water court. Ema Schultz added that this was largely because the goal of the engineers in the case is to be able to administer the decree on the ground. Stephen Leonhardt expanded on this topic by noting that he had seen a few times over the years where administration had recently changed. Mr. Leonhardt asked the other panelists their thoughts on the disclosure of past administrative practices up until the recent change. Mr. Rein explained that as the DWR’s understanding of what is happening evolves and is refined over time, and when DWR looks at facts and issues surrounding administration through that finer lens, there might be the need to do something different from what a past administration have done.

 

Reggie Norris


Public Interest Environmental Law Conference 2017: One Cause, One Voice

Eugene, Oregon        March 2–5, 2017

Protecting and Restoring Free Flowing Rivers

 

Presented by: Douglas W. Wolf, Center for Biological Diversity; Drevet Hunt, Lawyers for Clean Water; and Konrad Fisher, Klamath Riverkeeper.

This panel explored a series of legal tools available for attorneys to protect and restore instream flows.

To begin, Douglas Wolf discussed legal tools that the Center for Biological Diversity (the “Center”) and other organizations use to fight harmful seasonal flow diversions on the Gila River. Specifically, Wolf explained how the Center uses critical habitat of the endangered fish to protect Instream flow using the Endangered Species Act (“ESA”). The Gila River begins in an arid watershed in New Mexico. Heavy spring flows from snowmelt safeguard the river’s water quality. However, under a series of settlements and agreements, water users are allowed to store the heavy spring snowmelt from the Gila River and divert it for irrigation and other purposes. In addition to harming the Gila River’s water quality, diverting spring snowmelt harms the loach minnow, a tiny fish listed as a threatened species. To avoid being flushed down the river during heavy snowmelt, the loach minnow spends most of its time near the Gila River’s banks where the flow is less intense. But snowmelt diversions pose a risk to this habitat because the water gets diverted from these same edges of the river.

Wolf explained how the Center used the risk to the loach minnow’s critical habitat to help protect the Gila River’s instream flows. In 2009, the Center won a lawsuit against the United States Fish and Wildlife Service arguing that the previous designation of five hundred river miles of critical habitat for the loach minnow was insufficient. In 2012, The Fish and Wildlife Service not only designated 710 miles of critical habitat, but also listed the loach minnow as an endangered species. Saving the loach minnow’s critical habitat and adding it to the endangered species list helped protect instream flows in the Gila River.

The next panelist, Drevet Hunt, discussed three examples of litigation tactics used to restore instream flows: the ESA, California’s constitution, and the state’s fish and game code. First, Hunt discussed how petitioners sued under Section 9 of the ESA to increase instream flows on the Shasta River below the Dwinnell Dam in California. They argued the dam blocked historic runs of the endangered coho salmon and constituted an unpermitted taking. In 2013, petitioners settled with the dam’s operators, who agreed to obtain an incidental take permit and create a long-term flow and habitat restoration plan to encourage coho salmon populations.

Hunt next discussed how California attorneys use the state’s constitution to protect instream flows. In 2014, Lawyers for Clean Water used a section of the constitution that forbids waste and the unreasonable diversion and use of water to sue the State Water Resources Control State Board over the City of Buenaventura’s over-pumping of the Ventura River. Buenaventura’s over-pumping affected eleven endangered species and reduced local steelhead populations by ninety-six percent. This litigation is still pending, but the state has made some efforts in working to enhance Ventura River flows.

Third, Hunt explored how petitioners successfully used Section 5937 of California’s Fish and Game Code against dam operators to restore instream flows. This section of the code mandates that owners of dams “allow sufficient water at all times to pass . . . over, around or through the dam, to keep in good condition any fish that may be planted or exist below the dam.” In one example, a federal court even enforced this law against a federal dam operator, the United States Bureau of Reclamation.

Last, Konrad Fisher discussed the impacts of diversions on the Klamath River. Fisher began by discussing some fundamental changes he would like to see in how the public approaches water quantity issues. Fisher acknowledged that rivers provide food and recreation, create jobs, improve ecosystems, and play integral roles in human culture and religion. One way to protect those values, Fisher suggested, is to frame water diversions through percentages rather than total quantities. He argued the public would be more understanding of water quantity issues if, for example, water settlements apportioned seventeen percent of flows for fish. Fisher encouraged a cultural shift and a movement towards voluntary instream flow restoration as the only way to properly approach a long-term sustainable water use model.

Matthew Kilby

Image: Section of the Middle Gila River in Arizona. Flickr user Desert LCC, creative commons.