Clark Fork Coal. v. Tubbs

Clark Fork Coal. v. Tubbs, 380 P.3d 771 (Mont. 2016) (holding that the Montana Department of Natural Resources and Conservation’s (“DNRC”) rule that required groundwater developments to be physically connected was inconsistent with the plain language of the statutory “combined appropriation” exception to the exemption of certain groundwater developments from the permit requirement).

Montana uses a comprehensive permit system for water appropriation.  Groundwater appropriations of less than thirty-five gallons per minute and ten acre-feet per year can be exempt from the permit requirement.  The law also contains an exception to this exemption.  Under the Act, groundwater appropriators must acquire a permit if the “combined appropriation” from two or more wells or developed springs that draw from the same source exceeds thirty-five gallons per minute and ten acre-feet per year.  Over time, the DNRC promulgated rules to further define “combined appropriation.”  The first of these rules (“the 1987 rule”) explained that groundwater developments need neither to “be physically connected nor have a common distribution system to be considered a ‘combined appropriation.”  The DNRC replaced this rule in 1993 with a rule (“the 1993 rule”) that instead requires a physical connection to exist between appropriations to count as combined.  Using the Act and the 1993 rule, exempt appropriations of groundwater rose by about 3,000 each year, totaling about 113,000.  These appropriations consume large quantities of water.

In response, the Clark Fork Coalition (the “Coalition”), senior water users affected by this consumption, petitioned the DNRC to declare the 1993 rule inconsistent with the statute.  After the DNRC refused, the Coalition petitioned the First Judicial District Court, Lewis and Clark County to invalidate the 1993 rule as inconsistent with the Act and to reinstate the 1987 rule.  The lower court agreed with the Coalition, reinstated the 1987 rule, and further directed the DNRC to initiate rulemaking to develop a new rule consistent with this ruling.  While the DNRC did not appeal the decision, the Montana Well Drillers Association, the Montana Association of Realtors, and the Montana Building Industry Association (the “Well Drillers”) did.  On appeal, the Montana Supreme Court considered whether the lower court erred when it invalidated the 1993 rule, reinstated the 1987 rule, and directed the DNRC to initiate a new rulemaking.

The Court broke the first question into two parts: whether the rule was inconsistent with the plain language of the statute and whether the legislature’s subsequent amendments adopted the interpretation of the 1993 rule.  The Court explained that, when deciding if a rule is inconsistent with statutory language, it must first ascertain the plain language meaning of the statute.  If a statute does not have a plain language meaning, then it is ambiguous.  Once the Court determines whether there is a plan language meaning, it will determine whether a rule is inconsistent or in conflict with the statute.  If it determines there is an inconsistency or conflict, then the rule is invalid.  The Court explained that an agency’s “subsequent inconsistent rules” do not create ambiguity in a statutory terms.  Then the Court explained that statutory amendments do not change the intent of unchanged language.

Applying these rules, the Court examined the plain language meaning of “combined appropriation” using dictionary definitions and grammar rules.  First, it explained that “appropriation” refers to a quantity of water removed.  Second, the Court explained that because “combined” precedes “appropriation,” “combined appropriation” means a combined quantity of water, not a physically combined groundwater development.  This placement does not allow “combined” to modify anything but “appropriation.”  Because the term refers to quantity, and not method of removal, the Court determined that the 1993 rule “effectively swallow[s] up the underlying exception” because it limits the exception to structurally combined appropriations by enabling groundwater appropriators to pump beyond the statutory limit as long as they did not physically combine their pumping systems.  This contradicts the intent of the legislature because it allows combined appropriations of a greater quantity than authorized by statute.  The Court went on to explain that the legislature’s amendments, which continually lowered the quantity allowed for exempt ground developments but left the combined appropriation language untouched, did not adopt the 1993 rule interpretation of the term because it did not modify the combined appropriation language.  Therefore, the intent of the combined appropriation language remained the same, consistent with the plain meaning of the original words and unchanged by the 1993 rule’s interpretation.  The Court rejected DNRC’s 1993 rule.

The second question, whether the lower court erred by reinstating the 1987 rule, appeared to the Court as a question of first impression.  The Court first looked to federal Administrative Procedure Act (“APA”) case law that replaced an invalidated rule with the previous valid rule.  Then it compared this approach to the similar approach for invalidated statutes and looked through the Montana APA for potential inconsistencies. Finding no inconsistencies, the Court adopted the federal approach to invalidated rules and held that lower court did not err by reinstating the 1987 rule.

Finally, the Court considered the Well Driller’s argument that the lower court could not require the DNRC to initiate rulemaking consistent with the order.  The Court reasoned that, because courts have the authority to “pronounce a judgment and carry it into effect,” the lower court could require rulemaking to be consistent with its order.  However, the Court agreed that the District Court could not compel DNRC to initiate a new rulemaking.  Because it is the DNRC’s responsibility to adopt necessary rules, it is the DNRC’s decision whether or not to keep the reinstated 1987 rule.

Accordingly, the Court partially affirmed the lower court’s decision invalidating the 1993 rule.

Justice Jim Rice, dissenting.

Justice Rice dissented.  He did not find the plain language of the statute “clear on its face.” He found it strange that the Court’s ruling implied that the “DNRC inexplicably misinterpreted and misapplied a clear statute for the past 23 years.”  Rather, he thought the Court found the significant increase in exempt appropriations startling and acted as a legislative body to correct a perceived policy failing.

             N. Rioux Jordan

Image: The Clark Fork River, which runs through Montana. Flickr User Micah Sheldon, Creative Commons.

State Eng’r of New Mexico v. Diamond K Bar Ranch, LLC, 385 P.3d 626 (N.M. 2016) (holding: (i) waters diverted from an out-of-state river into New Mexico by ditch remained unappropriated waters of New Mexico subject to the regulatory authority of the New Mexico State Engineer; and (ii) the landowners’ use of water in excess of existing permitted water rights was an illegal use of surface water).

The Animas River flows south from Colorado into New Mexico.  The Ralston Ditch, located in southern Colorado, diverts water from the Animas River into New Mexico.  The Echo Ditch Decree (“Decree”) established the rights of Petitioner, Diamond K Bar Ranch, LLC (“Diamond”) to water diverted by the Ralston Ditch.  The State Engineer of New Mexico (“State Engineer”) brought suit against Diamond for using river waters in excess of the permitted quantity under the Decree.

Diamond claimed it was entitled to appropriate more water than provided in the Decree and filed a motion to dismiss alleging (1) that the State Engineer lacked the regulatory and constitutional authority to enjoin them from the use of river waters when the water was transported by a ditch from Colorado into New Mexico and (2) that the Ralston Ditch was exempt from permitting requirements because it was a “community ditch.”  A district court denied Diamond’s motion to dismiss but certified its ruling for interlocutory appeal.  The appellate court quashed Diamond’s interlocutory appeal and the New Mexico Supreme Court granted Diamond’s petition for writ of certiorari.

The Court first considered Diamond’s argument that the Ralston Ditch was not a “natural watercourse” that flowed into New Mexico and thus not subject to the State Engineer’s authority because the water became private at the point of diversion.  The Constitution of the State of New Mexico broadly granted the State Engineer the authority to regulate the unpermitted appropriation of water of “every natural stream” within the state of New Mexico.  Diamond primarily relied on Turley v. Furman, in which the court found that the New Mexico State Engineer did not have the jurisdictional authority to grant a permit for the construction of a new diversion in Colorado.  Distinguishing Turley v. Furman, the Court noted that the State Engineer made no attempt to exercise authority over the appropriation of out of state waters or the construction of a new out of state ditch, but instead regulated the appropriation of New Mexico surface waters for use on lands in New Mexico.

The Court also recognized that New Mexico allows only a usufructuary right to water and that a person cannot have a private ownership in the corpus of the water.  Accordingly, the Ralston Ditch alone could not create a water right.  The Court rejected Diamond’s argument that waters diverted into New Mexico by ditch conveyance was “by artificial means” and thus rendered its use private because the water never flowed “in a natural stream” within the state of New Mexico.  The Court held that the waters diverted from the Animas River into the Ralston Ditch remained natural, unappropriated waters, subject to the regulation of the State Engineer.

The Court next addressed Diamond’s argument that it was not required to obtain a permit to divert water from the Ralston Ditch waters because it was an existing community ditch.  Community ditches are early New Mexico diversion that do not require a diversion permit pursuant to N.M.S.A. Section 72-5-2.  The Court recognized that the Ralston Ditch was a community ditch constructed in the 1880s and that Diamond’s pre-1907 water rights did not require a permit for the under N.M.S.A. Section 72-5-2.  However, citing several New Mexico statutes, the Court recognized that the exemption applied only to the place of diversion and not to the quantity of water appropriated, and that community ditch users remained subject to the regulation by the State Engineer.  The State Engineer alleged that Diamond had used an amount of water that exceeded its permitted right and that Diamond had used the water to irrigate lands not appurtenant to such rights.  The State Engineer also had authority to regulate Diamond’s water consumption because the Decree stated that “the State Engineer must approve any change” in water use, regardless of whether the ditch is a community ditch.  The Court acknowledged that the Ralston Ditch to the Decree.  The Court held that although Diamond had a vested water right as a community ditch user, they were still subject to regulation by the State Engineer.

Accordingly, the Court affirmed the district court’s denial of Diamond’s motion to dismiss and remanded the case for trial.

Reggie Norris

Image: A New Mexico ditch. Flickr User Mike Tungate, Creative Commons.

Kelly v. Teton Prairie LLC, 376 P.3d 143 (Mont. 2016) (holding: (i) the district court properly applied the prior appropriation doctrine against a junior rights holder who failed to adhere to a call for water; (ii) the junior water right holder failed to meet its burden in establishing the futile call doctrine as an affirmative defense; and (iii) the district court had proper jurisdiction and authority to grant injunctive relief to the senior water right holder).

The Teton River (“River”) flows through Teton and Chouteau Counties in Montana.  The River primarily relies on melting snowpack to maintain its late season flow and has a long history of water right disputes stemming from farming and ranching operations.  Steven Kelly (“Kelly”) was a senior appropriator who held water rights for stockwater purposes and domestic use.  Teton Prairie LLC (“Teton”) was a junior appropriator, located upstream from Kelly, and held water rights for irrigation.  In August 2013, Kelly observed that he was not receiving the full extent of his water rights.  Kelly’s attorney sent a round of call letters to junior appropriators, including Teton, instructing them to cease diversion of water from the river.  Despite the call, Teton continued to divert water.  Kelly filed suit, seeking injunctive relief in its claims of wrongful interference with a water right and wrongful diversion of water by a junior water right holder.    A Montana district court granted Kelly’s motion for summary judgment and enjoined Teton from making out-of-order diversions after the receipt of call letters from senior appropriators, such as Kelly.  Teton appealed to the Supreme Court of Montana.

The Court first considered whether Teton violated the prior appropriation doctrine.  The Court explained that the Montana Water Use Act explicitly recognized the prior appropriation doctrine.  Under the Prior Appropriation Doctrine, the first to take possession of water on the public domain and put it to beneficial use becomes the “first in right.”  The Court noted that the senior appropriator is entitled receive his full appropriation and junior appropriators must take notice of the senior’s call and stop diversions until the senior’s appropriation right was fully maximized.  The Court rejected Teton’s argument that Kelly’s call was invalid because Kelly had made calls to “selective” junior appropriators, instead of making the call based on the strict order of reverse priority.  The Court noted that when a senior water right holder’s interest is injured, any and all junior water right holders are equally answerable for the injury.  The Court concluded that senior appropriators need not follow a strict order of calls, as such a requirement would conflict with the purpose of the doctrine.  The Court upheld the district court’s finding that Teton had violated the prior appropriation doctrine by improperly ignoring a call for water by Kelly.

The Court next addressed the futile call doctrine, which is an affirmative defense for a junior right holder who elects not to honor a senior appropriator’s call.  Montana has never explicitly adopted the doctrine.  The futile call doctrine excuses a junior right holder from a call when the outcome would result in no beneficial use by the senior right holder.  The burden is on the junior right holder to show that no usable water would reach the senior appropriator’s point of diversion because of carriage loss.  The Court rejected Teton’s application of the doctrine, noting expert testimony, which revealed that usable water could have traveled to Kelly’s point of diversion had Teton ceased its diversion.

Finally, the Court addressed whether the district court’s grant of injunction was proper.  The Court noted that the district court had the jurisdiction, authority, and sound discretion to grant an injunction in water right disputes.  The Court rejected Teton’s argument that the injunction’s scope was too broad, reasoning that the district court order only required Teton to refrain from activity that would violate the prior appropriation doctrine and Montana law. Finding no instance of manifest abuse by the district court, the Court affirmed the grant of injunctive relief to Kelly.

Accordingly, the Court affirmed the judgment of the district court.

Reggie Norris

Image: A farm in Bozeman, Montana. Flickr User Tim Evanson, Creative Commons.

County of Boulder v. Boulder & Weld Cnty. Ditch Co., 367 P.3d 1179 (Colo. 2016) (holding that the water court correctly denied the County of Boulder’s change of use application because it failed to meet its burden of proving an accurate historical consumptive use analysis).

Beginning in the early 1990s, the County of Boulder (the “County”) entered into a series of transactions to acquire the Bailey Farm, a 290–acre property historically used for irrigated agriculture and gravel mining.  The County aimed to develop the Bailey Farm into an open-space park featuring two ponds made from gravel pits filled with groundwater.  The ponds would expose groundwater and increase evaporation, requiring the County replace lost water through an augmentation plan under Colo. Rev. Stat. § 37-90-137.  To meet this requirement, the County filed an application in the District Court for Water Division No. 1 for underground water rights, approval of a plan for augmentation, a change of water rights, and an appropriative right of substitution and exchange.  Each component was interdependently linked.  The application hinged on approval of the change in water rights.  The County sought to change fifty inches of its Martha M. Matthews Ditch surface water right (“MM water right”), used historically to irrigate the Bailey Farm (the “Bailey Farm Inches”), into  an augmentation plan.  Boulder and Weld County Ditch Company (“BW Ditch”) opposed the County’s application, claiming injury from the proposed change.

At trial, the County submitted two historical consumptive use (“HCU”) analyses examining the Bailey Farm Inches to prove BW Ditch would not suffer injury.  Both analyses included a prorated estimate that assumed previous users delivered the Bailey Farm Inches entire to 101 acres of the Bailey Farm.  The County’s first analysis assumed full delivery of all fifty Bailey Farm Inches to Bailey Farm from 1950 to 2000; however, BW Ditch records later revealed the HCU analysis overestimated actual consumption by thirty-seven percent from 1973 to 2000.  As a result, the County supplemented the original HCU analysis with BW Ditch’s correct numbers from 1973 to 2000 and the same estimated numbers for 1950 to 1972.  The court cited three fatal deficiencies in the County’s HCU analysis.

First, the County inaccurately calculated actual use of the Bailey Farm Inches.  BW Ditch claimed the County overstated the number of acres the Bailey Farm Inches historically irrigated, which would unlawfully enlarge the Bailey Farm Inches water right and injure down-stream users.  Second, the County failed to prove the Bailey Farm Inches irrigated the seventy–acre parcel of land that the County purported.  Specifically, the County assumed without support that the Bailey Farm Inches irrigated the entire Bailey Farm and based the HCU analysis on these figures.  Finally, the County ignored the historical consumption of other water rights by conducting a parcel-specific analysis, rather than ditch-wide analysis.  The water court rejected the County’s findings as inaccurate and insufficient to meet the County’s burden of proving HCU, and consequently dismissed the entire application because the County could not demonstrate an absence of injury to others or that the proposed change in water rights would not fully compensate for the anticipated loss.  The County appealed the court’s determination.

On appeal, the Colorado Supreme Court affirmed the water court’s holding.  The Court divided its analysis into two stages.  First, the Court discussed applicable principles of Colorado water law.  Second, the Court discussed whether the County provided an accurate HCU analysis.

In its discussion of legal principles, the Court explained why an accurate HCU analysis is necessary for persons exposing groundwater through gravel pits.  It first explained the interaction between surface and ground water rights, and the Water Right Determination and Administration Act of 1969, which integrated the prior appropriation of surface with ground water while maximizing beneficial use of water.  Integrating surface rights with groundwater often requires augmentation plans.  Augmentation plans allow users out-of-priority groundwater diversions, so long as he or she adequately replenishes the diversion from existing water rights to protect senior water rights.  Water districts only approve augmentation plans that do not injure other users.  A careful accounting of actual water use may help demonstrate lack of injury and prevent the unlawful expansion of water rights.

Next, the Court examined long-established principles regarding changes of water rights and HCU analyses.  The Court noted that the amount of water changed must reflect the actual amount of water used and exist within the water’s contemplated use at the time of appropriation. This limitation comes from the principle that water rights derive from both appropriation and beneficial use.  Once diverted, the water’s beneficial use becomes the basis, measure, and limit of the water right. The Court also explained that modification of use itself cannot injure other water users.  Courts often intertwine these principles, as an expansion of a water right’s previous use often reduces the amount of water in return flow.  Thus, established principles allow water rights holders to change only as much water as they historically consumed in the manner contemplated by those rights.

The Court then analyzed whether the County upheld its burden in proving a reliable HCU.  The Court first found the County did not accurately report historical consumption of Bailey Farm Inches.  As the applicant, the County had to prove that previous users of the Bailey Farm Inches actually used the water as calculated in the HCU analysis. Despite this change, the Court found the inaccurate estimate cast serious doubt on the validity of the remaining figures and, thus, the entire report.  The County failed to provide a convincing explanation for their inaccurate HCU.  Thus, the Court affirmed the water court’s decision that the County failed to carry its burden of accurately quantifying the amount of Bailey Farm Inches actually used on the Bailey Farm.

The Court also held that County did not show the Bailey Farm Inches historically irrigated the entire Bailey Farm.  Covering a total of 101 acres, the Bailey Farm existed as two main parcels: a thirty-one-acre parcel and a seventy-acre parcel.  To carry its burden, the County had to prove that the 101 acres of the Bailey Farm claimed was within the lawful place of use and historically irrigated with Bailey Farm Inches.  The County failed to offer definitive proof that the larger portion of the Bailey Farm in fact received Bailey Farm Inches for irrigation.  Specifically, the Court pointed to the lack of evidence on the record demonstrating the seventy-acre parcel received any of the Bailey Farm Inches.  Without actual evidence showing past users irrigated the seventy-acre parcel with Bailey Farm Inches, the Court could not accept the analysis.  Moreover, the Court also explained that even if the seventy-acre parcel fell within the lawful place of use, the County would still have to prove that the MM water right was actually used on that land over time.  At first, different entities appropriated the Bailey Farm Inches to use in different properties.  Over time, the owners consolidated the properties. Because of the convoluted past, the water court required an accurate accounting of actual past use.  Absent actual proof of historical use, the water court declined to rely on the County’s HCU.  In committing these two errors, the County failed to prove the HCU and, thus, failed to prove a lack of injury to other water users.

The Court also rejected the County’s request for an appropriative right of substitution and exchange.  The Court found the County could not supplement its augmentation plan through a water lease with the City of Lafayette because the lease alone could not satisfy the County’s replacement obligations.

Accordingly, the Court affirmed the ruling of the water court and denied the County’s change of use application.

 Connor Pace

Image: A Western irrigation ditch. Flickr User Shaun Fischer, Creative Commons.

Curry v. Pondera Cty. Canal & Reservoir Co., 370 P.3d 440 (Mont. 2016) (holding that: (i) the Water Court did not err in concluding that the number of shares issued by water company determined the company’s rights; (ii) water supply company’s rights corresponded to size of service area as opposed to a historical place of use; and (iii) the Water Court erred in determining water supply company put storage rights to beneficial use prior to 1973).

The Curry Cattle Company (“Curry”) is a private landowner in Montana and owns shares to irrigation rights in the Birch Creek Flats (“Flats”). Curry obtained these rights in 1988, some of which are the oldest rights in the Marias River Basin. Pondera County Canal & Reservoir Co. (“Pondera”) provides land owners in Pondera County with water shares for beneficial use. Pondera possesses water rights to divert from Birch Creek, as well as a complete distribution system to serve the area.

This case originates from a dispute between the parties regarding waters in the Birch Creek. Pondera’s predecessors in interest secured some of the water rights in question through the Carey Land Act (“Act”), a federal law meant to encourage relocation the American West. In response, Montana set up the Montana Carey Land Board (“MCLB”), which sought to meet the requirements laid out in the Act. The Act functioned by setting up operating companies comprised of shareholders who had rights to water as determined by acres of land owned. Under the Act, the operating company maintains ownership of the water rights for a service area. In this case, the service area is accompanied by 72,000 water shares. Land owners in the service area may acquire these water shares. Pondera’s predecessors operated under the Act and began appropriating water for irrigation and sale in the late 1800s, eventually organizing as the Pondera Canal Company. The Company officially registered as an operating company under the requirements of the Carey Act in 1927. As currently aligned, individual stockholders own the Pondera Company, which distributes water as such on a per-share basis.

Disagreement over the priority of the Curry’s rights under this scheme existed for some time before this case. In 2004, Pondera communicated to Curry that its water share was less than previously believed. Curry rejected this assertion and continued to put more water to beneficial use than Pondera believed it was entitled. In 2005 Pondera locked Curry’s head gate, leading Curry to file a complaint alleging Pondera interfered with their water rights.

The Water Court initially ordered a preliminary injunction against Pondera to unlock the head gate. In 2008, the Water Court held an a six-day hearing to determine the correct quantity under the water right. The water master held in favor of Curry, finding the beneficial historic use of its water right established its water quantity. In 2014, the Water Court issued an order amending and partially adopting the master’s report. The Water Court determined that the rights in question instead correspond to the number of shares MCLB authorized for the project. Curry appealed this order to the Montana Supreme Court (“Court”).

The Court reviewed de novo five distinct issues resulting from the order of the Water Court. The Court also reviewed whether Water Court conducted its review of the master’s findings properly under a clear error standard.

The Court first reviewed the Water Court’s determination that a stockholder’s actual historic use limits the water rights of an entity organized under the Carey Land Act. Before the Court, Curry argued that beneficial use is the touchstone of water law in Montana, and therefore the Water Court improperly placed Pondera’s rights above all others by allowing it to retain ownership over water that was not put towards beneficial use. In opposition, Pondera argued that its beneficial use was not shown through actual irrigation, but by putting water into sale and service for shareholders. The Court reviewed the history of Montana water law and relied on a 1912 Montana Supreme Court case, Bailey v. Titinger, which held that either system capacity or company need would determine the extent of rights, to clarify the doctrine of beneficial use. The Court noted Montana public policy encourages public service corporations in the endeavor of irrigation. Therefore, the Court held that the Water Court did not err in determining that water rights paralleled the actual shares issued, and that sale of water unquestionably constituted a beneficial use.

The Court next confronted the issue of the Water Court’s grant of a service area to Pondera rather than a place of use based on historically irrigated land. Curry contended that the Water Court misinterpreted Bailey in entitling Pondera to a service area larger than the historical place of use. Pondera argued that the service area was the appropriate boundary for determining place of use. The Court began by discussing the concept of appurtenance of water to the land as a general rule in Montana law. The Court then explained that due to the movement of water inherent in the scheme of the Carey Act, a strict requirement of appurtenance was not applicable in this case. The Court noted that under the Act, the individual stock certificate’s appurtenant land did not define the overall place of use. Relying on Bailey, the Court affirmed the Water Court by holding that the idea of a service area is the proper method of satisfying the Carey Act’s place of use requirement. The Court declined to determine the exact size of the service area at this stage of litigation.

The Court also considered whether there was any evidence of water use by irrigators on the Birch Creek Flats prior to 1973. The water master found some evidence of historic use on the Flats, including some releases from storage facilities that eventually flowed into canals utilized by non-Pondera water users, but determined that these releases did not amount to Pondera use warranting inclusion of the Flats within the service area boundary. However, the Water Court found that there was evidence of Pondera water being used on the Flats prior to 1973, and concluded that the Flats should be considered as falling within the boundaries of the Pondera service area. The Court evaluated the use of water in the Flats based on Pondera’s actions, and disagreed with the Water Court’s conclusion that Pondera put the water to beneficial use on the Flats prior to 1973. The Court reversed this portion of the decision and remanded for further consideration.

The Court next examined whether the Water Court erred by substituting its judgment for that of the master regarding the “Gray Right.” Curry argued that the judgment of the Water Court was erroneous regarding the flow rate of the Gray Right. Pondera in turn argued that the Master’s report contained contradictory findings and therefore the Water Court’s judgment was not erroneous. The Court held that the Water Court applied the appropriate standard of review to the Master’s findings, and the Water Court’s determination of the flow rate for the Gray Right was not clearly erroneous.

Finally, the Court considered whether the Water Court’s tabulation of the parties’ respective claims to water rights should have included volume measurements when it did not. Pondera contended that the tabulations should have included volume. The Court held that while such measurements would undoubtedly be helpful, this was a matter of discretion for the Water Court.

Accordingly, the Court partially affirmed the Water Court by finding Pondera’s water rights corresponded to actual shares allotted under the Carey Act and extended to its entire service area, and reversed and remanded the determination with respect to the acreage determination.

Brian Hinkle

Image: Swift Dam on Birch Creek in Pondera County, Montana. Flickr User Sam Beebe, Creative Commons.

United States v. Washington, 827 F.3d 836 (9th Cir. 2016) (holding: (i) the fishing clause in the Stevens Treaties guaranteed Indian tribes the right to off-reservation fishing, with an inferred promise that sustainable fish populations would be available for tribal harvest; (ii) the State violated the fishing clause by constructing and operating barrier culverts that interfered with fish migration; and (iii) the permanent injunction appropriately ordered the State to correct barrier culverts).

In 1854 and 1855, multiple Pacific Northwest Indian tribes (“Tribes”) entered into the Stevens Treaties (“Treaties”), in which, inter alia, tribes relinquished land known as the “Case Area” to what is now the State of Washington (“State”) in exchange for a guaranteed right to off-reservation fishing.  Pursuant to this “fishing clause,” tribes had the right to take fish “at all usual and accustomed grounds and stations . . . in common with all citizens of the Territory.”  These Tribes rely on salmon fishing and engage in commercial salmon fishing, consume salmon to meet dietary needs, and use salmon in cultural and religious ceremonies.  Tribes and the State have long been in conflict over these fishing rights.  This case stems from a United States suit brought on behalf of Tribes in 1970 to resolve these persistent conflicts.

When building roads over streams, State road builders historically constructed culverts under the roads to allow natural stream flow.  However, these culverts interfere with salmon migration.  The culverts prevent juvenile salmon from migrating to sea where they mature, prevent mature salmon from returning to their spawning grounds, and prevent young salmon from freely locating food and avoiding predators.  As a result, salmon numbers diminished.

In 2001, the Tribes filed a request for determination with the United States District Court for the Western District of Washington (“district court”), which sought to impose a duty upon the State to abstain from constructing culverts that degraded fish habitat and reduced adult fish populations.  The United States joined the Tribes’ request for determination and sought declaration from the district court that the fishing clause in the Treaties imposed a duty upon the State to abstain from constructing or maintaining culverts that interfered with the fishery resource in way that “deprive[d] the Tribes of a moderate living from the fishery.”    Additionally, both the Tribes and the United States individually sought a permanent injunction from the district court requiring that the State open culverts that interfered with salmon migration, and requiring the State to remedy culverts that substantially reduced fish migration, respectively.

The district court ruled against the State on two grounds: (i) that the fishing clause imposed a duty upon the State to abstain from constructing or operating culverts that interfered with fish migration in a manner that reduced salmon that would “otherwise be available for Tribal harvest”; and (ii) that the State operated culverts that violated this duty.

In 2013, after failed settlement efforts, the district court issued a Memorandum of Decision, in which it found that the Treaties purported to assure Tribes that they would forever have an adequate salmon supply.  The district court reasoned that culverts, in part, degraded salmon habitat by inhibiting the free migration of adult and juvenile salmon, which resulted in reduced Tribal harvests that prevented tribal members from earning a living and caused “cultural and social harm to the Tribes in addition to economic harm.”  On the same day, the district court issued a permanent injunction ordering the State, in consultation with the United States and Tribes, to compile a list of state-owned barrier culverts within the Case Area and required the State to correct all listed culverts in a manner that provided fish passage.  The State appealed.

On review in the United States Court of Appeals, Ninth Circuit (“court”), the State contended that the Treaties did not impose a duty on the State to abstain from constructing barrier culverts, and objected to the scope of the district court’s injunction

First, the court determined the State’s duties under the Treaties.  The court found that the State misconstrued the Treaties by characterizing their primary purpose as “opening up the region to settlement”; the court instead deemed the primary purpose as establishing a reliable means to sustain tribal livelihoods once the Treaties took effect.  The court, relying on Supreme Court precedent, construed treaties between tribes and the United States in favor of the tribes. Along that vein, the court reasoned the Tribes understood that the Treaties would provide not only access to usual and accustomed fishing places, but also to sustainable salmon populations; thus, regardless of explicit language, the court would infer that promise.

The court then reviewed the facts presented to the district court regarding the State’s culverts and recognized their effects within the Case Area as “block[ing] approximately 1,000 linear miles of streams suitable for salmon habitat.”  Therefore, the culverts precluded sufficient salmon populations that would maintain a moderate living for the Tribes.  The court further reasoned that replacing or modifying culverts to increase salmon migration would render more mature salmon available for Tribal harvest.

Next, the court addressed the appropriateness of the district court’s injunction and rejected the State’s contentions.  The State contended that the Tribes did not provide sufficient evidence that the culverts significantly caused the salmon’s decline. However, the court determined that the Tribes had presented extensive evidence.  Specifically, the Tribes presented a report prepared by state agencies, which acknowledged culverts as a type of barrier to fish migration and as “correctable obstacles.”  The State also contended that the district court’s injunction ordered the State to correct almost all state-owned barrier culverts without evidence that such corrections would improve salmon migrations.  However, the court reiterated that the State’s own evidence illustrated that once salmon habitat is accessible by un-blocking barrier culverts, “hundreds of thousands of adult salmon” would be available to Tribes.

Accordingly, the court affirmed the district court’s holdings and concluded that the district court did not abuse its discretion by issuing the permanent injunction.

Gia Austin

Image: A coho salmon spawning on the Salmon River in the Pacific Northwest. Flickr User BLMOregon, Creative Commons.

Rangen, Inc. v. Idaho Dep’t of Water Res., 371 P.3d 305 (Idaho 2016) (affirming the district court’s ruling that: (i) the Idaho Department of Water Resources’ approval of a mitigation plan that deferred consideration of injury to other water users was not an abuse of discretion; (ii) a mitigation plan that included curtailment and insurance as contingencies was adequate to assure protection to senior priority rights; and (iii) construction of a water pipeline across private land to a place of beneficial use did not constitute an unlawful taking under Idaho’s eminent domain laws).

On December 13, 2011, Rangen, Inc. (“Rangen”) filed a petition for a delivery call with the Idaho Department of Water Resources (“IDWR”), alleging groundwater pumping by junior appropriators in the Eastern Snake Plain Aquifer (“ESPA”) materially injured its water rights.  In response, IDWR’s director (the “Director”) issued an order that curtailed some junior-priority groundwater pumping in the ESPA.  The order allowed junior-priority groundwater users to avoid curtailment by participating in an approved mitigation plan providing 9.1 cubic feet per second (“cfs”) of water to Rangen.  Idaho Ground Water Appropriators, Inc. (“IGWA”), who represented junior priority users in ESPA, submitted several mitigation plans to IDWR.  On October 8, 2014, the Director conditionally approved IGWA’s Fourth Mitigation Plan (the “Plan”), which required IGWA build and maintain a pumping station, pipeline, and other necessary facilities for the transport of water (“the “Magic Springs Project”).  Under the Plan, SeaPac of Idaho, Inc. agreed to sell or lease 10 cfs of water to IGWA.  IGWA would then pump that water to Rangen through the Magic Springs Project.

The conditional plan hinged on IGWA obtaining approval for its Application of Transfer from SeaPac of Idaho, Inc.  The Director declined to rule on the Application of Transfer in the order.  The Plan also required IGWA to purchase an insurance policy that covered Rangen’s losses of fish attributable the Magic Springs Project’s failure.  Last, the Director ordered Rangen state in writing that it would accept the water delivered and the construction of the Magic Springs Project on its land.  If the conditions failed, IDWR would suspend the Plan.  Nevertheless, IGWA constructed the Magic Springs Project’s pipeline during the conditional period.

After approval, Rangen petitioned the district court to review the Director’s decision.  The district court affirmed the decision.  Rangen then appealed to the Supreme Court of Idaho, challenging that: 1) the Director abused his discretion when he deferred consideration of potential injury to other water users until proceedings on IGWA’s Application for Transfer; 2) the Director erred by approving a plan with inadequate contingency provisions; and 3) the Director’s order constituted an unlawful taking of Rangen’s property and should be set aside.

First, the Supreme Court of Idaho held the Director did not abuse his discretion by deferring consideration of potential injury to other water users until the proceedings on IGWA’s Application for Transfer.  Here, Rangen argued the Director did not have discretion to defer consideration of injury to water users under Conjunctive Management Rule (“CMR”) 43.03j and that it was unreasonable to ignore those factors.  CMR 43.03 and subsection j state the Director “may” consider “whether the mitigation plan is consistent with the conservation of water resources, the public interest or injures other water rights, or would result in the diversion and use of ground water at a rate beyond the reasonably anticipated average rate of future natural recharge.” The Court began its analysis by interpreting the CMR’s regulatory language.

The Court found that a plain reading of the CMR gave the Director discretion to defer consideration because the word “may” was permissive rather than imperative.  The Court compared the regulatory language to its interpretation in another case that required the Director consider several factors in determining injury prevention.  The case was distinguishable as it referred to a different subsection that stated, “the mitigation plan must include. . . .”  After undertaking this analysis, the Court turned to Rangen’s assertion that it was unreasonable to ignore the factors under CMR 43.03j.

Rangen claimed it was unreasonable for the Director not consider CMR 43.03j for two reasons.  Rangen first claimed the Director would not find injury to other users because IGWA had completed construction of its pipeline and accordingly had failed to consider potential injury to other users.  The Court rejected this argument, finding it unclear how potential injury to users would occur without consideration, as the Plan provided other users with the opportunity to raise issues at the later proceeding.  Furthermore, Rangen failed to submit any evidence to the court showing the Direct would allow construction based on the pipeline’s construction and IGWA bore the risk burden when it built the pipeline early.  Rangen also argued the Director should have conducted the injury analysis in the Plan because the later transfer proceeding went forward under a different regulatory provision than CMR 43.03j.  In response, the Court again pointed to the Director’s discretion provided by the CMR.  After determining the Director did not abuse his discretion by delaying Application of Transfer Proceedings, it turned to Rangen’s challenge that the Plan did not include adequate contingency provisions.

The Court found the contingencies were adequate because the IDWR did not avoid curtailment of junior-priority rights in the event that the Plan became unavailable.  CMR 43.03c requires mitigation plans “assure protection of the senior priority right in the event the mitigation water sources becomes unavailable.”  Under this regulation, Rangen argued curtailment was not a contingency because it was a natural and legal consequence that occurs without mitigation, and that the benefits of curtailment can take years to materialize and would not immediately remedy its injury.  The Court rejected this argument, finding the Plan offered sufficient protection to Rangen’s right through the combination of a curtailment and insurance.  It noted the insurance policy would provide as a safeguard if curtailment failed to provide a remedy.  Rangen then challenged that the insurance plan’s adequacy for compensating potential losses it would suffer if a shortage occurred.  The Court allayed these concerns by stating the insurance policy covered exactly the type of injury Rangen discussed.

Finally, the Court turned to Rangen’s argument that IDWR’s order constituted an unlawful taking of senior owner’s property.  Rangen argued the Director’s order amounted to an unlawful taking because it forced senior owners to choose between granting IGWA an easement or risk losing water that they were entitled to because the order allowed IGWA to suspend its mitigation obligation if Rangen did not allow the pipeline’s construction.  The Court found that even if it interpreted the Director’s order to require Rangen to grant IGWA an easement because Idaho’s constitutional eminent domain power extends to property of public use after just compensation.  Under the Idaho Constitution, right of ways for the construction of pipelines to convey water to the place of beneficial use fall under that power.  This would allow the state to take the property after just compensation.  Since Rangen did not allege that it was not provided just compensation, the Court rejected this claim.

Accordingly, the Court upheld the district court’s partial affirmation of the Director’s order conditionally approving the Plan.

Dalton Kelley

Image: No Trespassing sign in Idaho. Flickr User Makis Siderakis, Creative Commons.

New Mexico, ex rel. State Engineer v. Trujillo, 813 F.3d 1308 (10th Cir. 2016) (holding that a special master in a general stream adjudication properly granted summary judgment against an individual who objected to a district court’s proposed order limiting her water use to 0.5 acre-feet per year (“AFY”)).

This case came before the Tenth Circuit Court of Appeals as an individual challenge to a general stream adjudication initiated by New Mexico to determine water rights in the Nambe-Pojoaque-Tesuque Basin (“Basin”), which originates in the Sangre de Cristo Mountains.  Elisa Trujillo held a domestic well permit allowing her to divert underground water in the Basin.  The individual adjudication of water rights led to the conflict between Trujillo and New Mexico.  In 1983, the United States District Court for the District of New Mexico prevented the state from issuing domestic well permits in the Basin unless the water was used for household purposes only.  This permit provision specifically excluded using water for irrigation.   In 1985, Trujillo’s predecessor-in-interest received a domestic well permit in accordance with the 1983 injunction (prohibiting irrigation) and was granted a maximum use of 3.0 AFY.

In 1994, the district court directed a special master to determine the appropriate amount of water rights for all permits granted after 1982, including Trujillo’s.  The doctrine of beneficial use controls how much water is granted to each permit, and under the New Mexico Constitution, is the amount of water that can be used beneficially and with purpose; water rights are limited based on that use.

Because of the 1994 order by the district court, Trujillo’s permit was amended to limit water use to either 3.0 AFY or the historic, beneficial use, whichever was less.  The court allocated 0.5 AFY for domestic wells unless permit holders showed a greater beneficial use.  In 2006, the district court required permit holders to show (1) why the permit should not be adjudicated to 0.5 AFY and (2) why the water rights should not be otherwise adjudicated consistent with the terms of the domestic well permit in order to obtain more AFY.  Essentially, the burden was placed on the permit holder to prove a need for more than 0.5 AFY in keeping with the doctrine of beneficial use.

Trujillo’s permit was originally designated for domestic use, and in 1985, the permit allowed for up to 3.0 AFY of water.  The state’s proposed order restricted Trujillo’s water use to indoor purposes and limited the amount to 0.5 AFY based on historic beneficial use.  Trujillo objected to her permit’s prohibition on outdoor use and the limitation of 0.5 AFY.  The State offered into evidence an affidavit by an expert witness stating that, on average, permits for a domestic well use 0.4 AFY per household. Trujillo failed to prove that she had the right to use more than 0.5 AFY under the doctrine of beneficial use for a purpose other than as allowed in the permit. In 2010, the Special Master granted summary judgment in favor of New Mexico.

After the Special Master issued the order, Trujillo filed several motions, including an objection to the 2010 order of summary judgment, two motions to quash the 1983 injunction, and a motion to reconsider the district court’s overruling of her objection to the order of summary judgment.  In 2015, the district court issued an order adjudicating Trujillo’s domestic water rights as part of a regional general stream adjudication.  The 2015 order issued by the district court imposed identical conditions on Trujillo’s domestic water rights as had been stated in the 2010 order: a limit of 0.5 AFY with a prohibition on outdoor use including irrigation.  The Court did not find this to be a final ruling subject to its jurisdiction because Trujillo and other permit holders may object to the order during the inter se stage before the district court enters a final judgment on September 15, 2017.  Therefore, the Court did not have jurisdiction under 28 U.S.C. § 1291 to review 2015 order by the district court.  The pragmatic finality doctrine is an exception under § 1291 and may be applied in order to expedite appellate review. However, the Court did not apply the pragmatic finality doctrine to Trujillo’s appeal, instead finding jurisdiction under 28 U.S.C. § 1291(a), which permits interlocutory appeals.

Accordingly, the Court had jurisdiction to review the Special Master’s summary judgment order issued in 2010.  The Court upheld the district court’s ruling from 2010 and the subsequent order in 2015. On appeal, Trujillo did not present the court with evidence of her beneficial indoor use.  Trujillo failed to raise an argument against the 2010 decision upon which the 2015 decision was based.  Contrary to New Mexico law, Trujillo argued that her permit alone created the water right.  Beneficial use is the basis from which all water rights within the state may be legally measured and limited, and Trujillo gave no evidence of her beneficial use for indoor purposes in excess of the allocated 0.5 AFY.

Therefore, the Court affirmed the district court’s order for summary judgment in favor of the state of New Mexico.

Margaret Casey

Image: The Río Grande del Norte National Monument, which is west of the Sangre de Cristo Mountains in New Mexico. Flickr User Bureau of Land Management, Creative Commons.