Upper Eagle Reg’l Water Auth. v. Wolfe, 371 P.3d 681 (Colo. 2016) (holding that an owner of multiple water rights can choose to divert and make absolute any of its in-priority, conditional water rights and is not required to make absolute a senior conditional water right before a junior conditional water right, so long as the owner lives with his or her choice and does not injure the rights of other water users).

Effective as of March 25, 2004, the Upper Eagle Regional Water Authority (the “Authority”) formed a water service agreement with the Edwards Metropolitan District and the Cordillera Metropolitan District.  Under the agreement, the Cordillera Metropolitan District gave certain water rights and facilities to the Authority, which in turn provided water services to the Cordillera area.  The rights conveyed to the Authority included the SCR Diversion Point No. 1 conditional water right (the “Senior Lake Creek Right”), with a priority year of 1989, and the Eagle River Diversion Point No. 2 conditional water right (the “Junior Eagle River Right”), with a priority year of 1991.  Pursuant to the agreement, the Authority would limit use of both conditional water rights to irrigation, domestic, commercial, and fire protection purposes, with diversions to occur at the Edwards Drinking Water Facility.

On July 4, 2004, a day on which there was no call on the Colorado and Eagle Rivers, the Authority diverted 0.716 cubic feet per second (“cfs”) of water at the Edwards Drinking Water Facility on the Eagle River for beneficial use in the Cordillera area.  The Authority allocated 0.47 cfs of this diversion to its Junior Eagle River Right.  On December 29, 2004, the Authority filed an Application for a Finding of Reasonable Diligence and to Make Water Right Absolute (“Application”).  The Application requested confirmation that the Authority had made absolute 0.47 cfs of the Junior Eagle River Right at the Edwards Drinking Water Facility for irrigation, domestic, commercial, and fire protection purposes during free conditions.  The State and Division Engineers (the “Engineers”) opposed the Application.

The Engineers initially argued the Authority must make diversions in accordance with the “seniors first” policy, requiring that users first attribute diversions to senior absolute water rights, then to senior conditional rights, and finally, junior conditional rights.  A Water Court granted the Engineers’ motion for summary judgment in part and denied the Authority’s claim for making 0.47 cfs of the Junior Eagle River Right absolute.  The court held the Authority did not have discretion to choose a junior water right over a senior water right when both rights decreed the same point of diversion for the same purposes at the same place of use.

The Authority appealed the Water Court’s decision, arguing that it should have the discretion to choose the conditional water right it wants to divert and use.  The Colorado Supreme Court reviewed de novo the Water Court’s conclusions of law.

The Court only examined whether Authority had to attribute its diversion to a senior water right.  The Engineer partially based its argument on a previous Colorado Supreme Court holding, which required that applicants seeking to make a conditional water right absolute first show they appropriated water in excess of an existing absolute decree.  The Court rejected that argument by distinguishing the facts of this case as involving a choice between two conditional rights rather than a choice between a conditional right and an absolute right.  The Court reasoned that the previous case was not compatible, because the Authority had to attribute one of its conditional rights to a needed water diversion.

The Engineers then argued that application of a “seniors first” policy here would help effectively administer the prior appropriation system and “correctly express” the Colorado Constitution and state statutes.  The Engineers believed that if the Court allowed the Authority to freely select among its conditional water rights, the Authority could change its attribution of diversions from one day to the next.  The Engineers claimed that this potential behavior was dangerous because it could allow the Authority to make absolute more water rights than it actually needed.  The Court did not accept the Engineers’ argument.

The Court ruled that once the Authority makes 0.47 cfs of the Junior Eagle River Right absolute, it must live with that choice; the only way the Authority could later perfect its other conditional water rights is through showing with quantifiable evidence that it requires more water than 0.47 cfs of the Junior Eagle River Right to fulfill the need of the Cordillera area.  The Court summarized that, absent any evidence of waste, hoarding, or injury to the rights of other water users, the Authority may choose which of its conditional water rights it wishes to divert and make absolute.

Accordingly, the Court reversed the order of the Water Court that the July 4, 2004 diversion must be allocated to the Senior Lake Creek Right, and remanded the case with instructions to make 0.47 cfs of the Junior Eagle River Right absolute.

Tina Xu

Image: Flowing water on the way up to Hanging Lake located in Glenwood Canyon, Colorado. Flickr User Zach Dischner, Creative Commons.


Najas Realty, LLC v. Seekonk Water Dist., 821 F.3d 134 (1st Cir. 2016) (holding that a real estate developer and home builder failed to state facts sufficient to establish a facially plausible claim to relief in their complaint, which alleged that a water district and its superintendent deprived them of federal and state constitutional rights when the superintendent raised valid objections of public concern against the construction of a subdivision).

In 2012, Najas Realty, LLC (“Najas”) purchased a ten-acre parcel of land (the “Property”) in Seekonk, Massachusetts (the “Town”) and filed a preliminary subdivision plan application to develop a ten-lot subdivision (the “Pine Hill project”).  The Seekonk Board of Health met to discuss the application.  The Seekonk Water District’s Superintendent, Robert Bernardo, attended the meeting and expressed concerns that Pine Hill project could potentially impact one of the Town’s wells, Well GP-4.  Bernardo asserted that a malfunctioning septic system servicing a nearby middle school caused high nitrate levels in the soil around GP-4.  As a solution, the Board of Health required that Najas perform a nitrate loading analysis.

After the Seekonk Board of Health initially met, Bernardo expressed concerns at two other meetings that the Pine Hill project’s septic system could increase nitrate levels and expose unborn babies and nursing infants to “Blue Baby Syndrome,” and that nitrate contamination requires high clean-up costs.  Najas rejected these claims.

After these meetings, Najas completed its nitrate loading analysis and submitted a definitive subdivision plan. Najas claimed the plan satisfied regulatory requirements for septic systems and kept nitrate levels in the GP-4 area within regulatory limits.  The Board of Health initially voted to approve the analysis.  After approval, the Planning Board held a public hearing. At the hearing, Bernardo claimed the nitrate loading analysis’ data was false.  In response, the Planning Board reviewed and denied the Pine Hill project.  Najas then appealed to the Massachusetts Land Court.

The appeal led to a settlement allowing Najas to proceed if it reduced the number of lots from ten to nine and shortened the subdivision’s road length.  The Planning Board reviewed the revised plan at another public meeting.  Bernardo again attended and voiced concerns about water contamination issues.  The Planning Board approved the revised Pine Hill project.  The Seekonk Water District then filed a petition to the Planning Board to rescind or modify the approved plan.  The Planning Board denied the petition, and the Pine Hill project continued in accordance with the revised plan.

Najas, joined by Petra Building Corporation (“Petra”) (collectively, “Plaintiffs”), filed a complaint in the United States District Court for the District of Massachusetts against the Seekonk Water District and Bernardo (collectively, “Plaintiffs”), asserting claims under the United States Constitution and analog claims under the Massachusetts Constitution.  The complaint asserted: (1) Defendants retaliated against the Plaintiffs for asserting First Amendment rights to petition and freedom of speech; (2) Defendants violated Plaintiffs’ Fourteenth Amendment equal protection rights by singling them out; (3) Defendants violated Plaintiffs’ Fourteenth Amendment due process rights by opposing the plan; and (4) Defendants tortuously interfered with Plaintiffs’ business.  The district court granted judgment on the pleadings in favor of the Defendants, stating that Najas and Petra failed to state a viable claim.  Subsequently, Plaintiffs submitted a second complaint, which the district court also dismissed in a final judgment.

Plaintiffs appealed to the United States Court of Appeals for the First Circuit, claiming the district court required too much at the pleading stage and the complaint was sufficient to deny a motion for judgment on the pleadings.  The court reviewed the appeal de novo.

The court started its analysis noting that for constitutional claims under 42 U.S.C. § 1983, plaintiffs must prove the conduct complained of was committed under color of state law and that the conduct worked as a denial of rights secured by the United States Constitution.  The court accepted that Bernardo acted under the color of state law, and proceeded by determining whether he encroached on the Plaintiffs’ constitutional rights.

To begin, the court analyzed whether Bernardo had retaliated against the Plaintiffs’ First Amendment right to petition and freedom of speech.  The court stated a cognizable retaliation claim under the First Amendment requires plaintiffs show the conduct was constitutionally protected and that a causal connection existed between the protected conduct and the retaliatory response.  The court found it was unclear whether Najas’s conduct was protected petitioning conduct or free speech comprising commentary on a matter of public concern.  Instead, the court evaluated the test’s second prong, whether the Plaintiffs had established a causal connection between the protected conduct and the retaliatory response.

For this element, Najas pointed to Bernardo’s accusation that the data submitted for the Pine Hill project was “fabricated, false, inflammatory, and baseless.”  The court first discussed the retaliatory conduct and found the record offered no indication that Bernardo did not genuinely hold his concerns.  Graphs revealed “variable and sometimes excessive” nitrate levels from in the monitoring the area dating back to 1995.  The record also showed that members on the Board of Health previously expressed concerns regarding nitrate levels before Bernardo spoke at the initial meeting.  The court also took judicial notice that the Environmental Protection Agency has linked excessive nitrate levels to Blue Baby Syndrome and that nitrate contamination requires high clean-up costs. Therefore, the court found the Plaintiffs’ allegations of retaliatory conduct were conclusory and that Bernardo had a duty to raise objections about potential public health impacts that he believed were valid.

The court then discussed whether Bernardo violated the Defendants’ protected First Amendment right to free speech on a matter of public concern.  Matters of public concern are those “relating to any matter of political, social, or other concern.”  The court found Bernardo had not committed such a violation because, as superintendent, he had an obligation to speak out on matters of public concern.

Next, the court analyzed the claim that Bernardo violated the Plaintiffs’ Fourteenth Amendment equal protection rights by singling them out for unique reasons.  To prevail on this claim, the complaint had to show the Defendants were motivated by bad faith or malicious intent to injure when they treated the Plaintiffs differently from others similarly situated and without a rational basis for doing so.  However, the court found the Plaintiffs failed to explain how other developers and builders were similarly situated because they did not provide basic information, such as when other projects were located, and when they were built.

After the equal protection claim, the court examined the Plaintiffs’ substantive due process claim under the Fourteenth Amendment.  To assert a viable substantive claim, plaintiffs must prove deprivation of an established life, liberty, or property interest, and that the deprivation occurred through governmental action that shocks the conscience.  The court found it unclear what deprivation occurred, and noted the Plaintiffs “oddly” claimed that by opposing the project, Defendants deprived them of life and liberty.  The court instead analyzed the claim as a deprivation of property.

Substantive due process claims regarding deprivation of property cases are only available in “horrendous situations.”  The court found that, at worst, the Defendants actions were “doggedly persistent,” and this did not amount of “brutal, meaning, and harmful” conduct as is necessary in such a claim.

Finally, the court analyzed the Plaintiffs’ claim that Bernardo intentionally interfered with a business expectation, opportunity, and advantage.  Here, the court addressed whether Bernardo’s actions directly attempted to interfere with business relations.  The court granted Bernardo immunity for his actions under Massachusetts common law, where public officials who act in good faith and exercise judgment and discretion are not liable for errors in making decisions.  Here, the court again stated that the Plaintiffs’ complaint failed to state a plausible claim for bad faith or malice intent.

Accordingly, the court affirmed the order of the district court.

Kole Kelley

Image: Drawbridge on the Seekonk River, a tidal extension of the Providence River. Flickr user rprata, Creative Commons.

 


Fairfield Cnty. Bd. of Comm’rs v. Nally, 34 N.E.3d 873 (Ohio 2015) (holding that a new Total Maximum Daily Load for pollutant discharges into a watershed was a rule as defined under the Ohio Administrative Procedure Act and, as such, should have been properly promulgated to afford interested parties their rights to notice and be heard before the rule’s submission to the U.S. Environmental Protection Agency for approval).

The Federal Water Pollution Control Act, or Clean Water Act, seeks to restore and maintain the integrity of U.S. waters through (i) technology-based effluent limitations on “point sources” discharging pollutants; and (ii) water-quality standards for protecting the use of identified water bodies. The Clean Water Act also requires each state to identify waterways that are too impaired to implement applicable water-quality standards and then rank waterways based on pollution severity. States must then develop a Total Maximum Daily Load (TMDL), which establishes a maximum amount of the specified pollutant that may be discharged into the waterway without violating water-quality standards. Once the U.S. Environmental Protection Agency (“EPA”) approves a state’s TMDL, the state must implement that TMDL.

Pursuant to these requirements, the Ohio Environmental Protection Agency (“Ohio EPA”) developed a document in 2005 called the “Total Maximum Daily Loads for the Big Walnut Creek Watershed” (“TMDL report”), which the EPA subsequently approved. Using stream-survey data from 2000 of Blacklick Creek—one of the 54 “stream segments” in the Big Walnut Creek watershed—the report put forth new phosphorous discharge limits for Blacklick Creek. The Tussing Road Water Reclamation Facility (“Tussing Road plant”), owned by Fairfield County (“the county”), is one of the sources subject to the report’s new limitation. In 2006, the county applied for and received a renewed National Pollutant Discharge Elimination System (“NPDES”) permit for the Tussing Road plant. The new permit included the TDML-derived phosphorous discharge limitation.

The county appealed this limit to the Environmental Review Appeals Commission (“ERAC”), which found that while the Ohio EPA had a valid basis for imposing the limit, it failed to consider whether such a limit was feasible. Thus, the ERAC vacated the phosphorous limit and remanded the case to the Ohio EPA. Subsequently, the county appealed the ERAC’s finding that the Ohio EPA had a valid foundation for imposing the limit, and the Ohio EPA cross-appealed (asserting that the TMDL had been federally approved and that federal law required Ohio EPA to set the phosphorous limit). The Tenth District Court of Appeals (“lower court”) affirmed the ERAC’s order, finding that there was sufficient factual foundation for a phosphorous limitation and rejecting the county’s assertions that the new limitation lacked meaningful review and, therefore, violated due process. The county appealed to the Supreme Court of Ohio (“Court”).

The Court first considered whether the TMDL was a “rule” within the requirements of Chapter 119 of the Ohio Administrative Procedure Act, which defines a “rule” as any “standard, having a general and uniform operation, adopted, promulgated, and enforced by any agency.” Because the TMDL sets a new legal standard—applied by the Ohio EPA—to “all current and future dischargers in the Big Walnut Creek watershed,” the Court observed that the limit fell within Chapter 119’s definition of “rule.” Additionally, the Court disagreed with the agency’s argument that the TMDL is merely a tool for implementing its pre-existing legal obligation. Examining the consequences of a TMDL, the Court determined that even though the Ohio EPA allocated limits individually to different point sources, the same standards and procedures applied to each; thus, the TMDL had “general and uniform effect.” Finally, the Court noted that the TMDL creates new legal obligations. The results of the TMDL development process were new mandatory loading reductions rather than “mere enforcement of compliance with existing authority,” as argued by the Ohio EPA. Thus, the Court held this indicated that the TMDL was indeed a rule subject to rulemaking procedures.

The Court then addressed the county’s second argument—that the TMDL itself establishes a new water-quality standard and therefore requires rulemaking procedures. Previously, the Ohio EPA had promulgated a narrative standard for phosphorous in the Ohio Administrative Code, requiring limitations on phosphorous “to the extent necessary to prevent nuisance growths of algae, weeds, and slimes that result in a violation of water quality criteria.” However, the TMDL imposes a numeric limit for phosphorous for all water bodies in the Big Walnut Creek watershed. The Court found that this new numeric limit constituted a water-quality standard; therefore it should have been first promulgated as a rule under Chapter 119.

Because the TMDL was a rule, the Court held that the Ohio EPA should have complied with Chapter 119’s rulemaking procedures, which include providing public notice, an opportunity for public comment, and a public hearing before using the TMDL-derived target in an NPDES permit. The Court found that while the Ohio EPA did make a draft of the TMDL available for public review before submission to the EPA, that act alone did not satisfy the rulemaking procedural requirements. Because agencies must give the public certain due process rights before a rule attains final federal approval, the Court held that Ohio EPA’s failure to do so ultimately deprived NPDES permit holders of their rights to notice and be heard regarding the rule.

Accordingly, the Court affirmed the lower court’s judgment, vacating the new phosphorous standard and remanding the cause to the Ohio EPA.

Justice O’Donnell concurred as to the ruling, but agreed with the court of appeals’ reasoning. Justice O’Connell observed that the Ohio Administrative Code allows water-quality standards to be either numeric or narrative in nature, and the Ohio EPA had already promulgated the narrative standard for phosphorous limits (quoted above). Because TMDLs merely provide the factual and technological data needed to implement Ohio water-quality standards, Justice O’Donnell argued that TMDLs are not administrative rules and need not be promulgated as such. In O’Donnell’s view, TMDLs are not legal standards, but objective, factual determinations that the Ohio EPA makes to interpret and implement the water-quality standards. Accordingly, Justice O’Donnell would affirm the court’s ruling on the grounds that the Ohio EPA did not challenge the lower court’s determination that the Ohio EPA failed to consider the technical feasibility and economic reasonableness of the limit, rather than the Court’s ruling that the TMDL was a rule.

Katy Rankin

Image: Turtle Pond Panorama, Three Creeks Metro Park, where Big Walnut Creek is joined by its principal tributaries Alum Creek and Blacklick Creek, Columbus Ohio.  Flickr user Raymond Wald, Creative Commons.


Alaska Wilderness League v. Jewell, 788 F.3d 1212 (9th Cir. 2015) (affirming the district court’s ruling that: (i) the Bureau of Safety and Environmental Enforcement’s approval of the challenged oil spill response plans was not arbitrary and capricious; (ii) the Endangered Species Act did not require the Bureau of Safety and Environmental Enforcement to consult with any environmental agencies before approving oil spill response plans; (iii) the Bureau of Safety and Environmental Enforcement was entitled to Chevron deference for its interpretation of the Oil Pollution Act; and (iv) the National Environmental Policy Act did not require the Bureau of Safety and Environmental Enforcement to do an environmental impact statement before approving an oil spill response plan).

The Outer Continental Shelf Lands Act (“OCSLA”) outlines the procedure for exploration and development of oil and gas resources offshore. This process has four stages. First, the Secretary of Interior creates a five-year leasing program under which operators may search and mine for oil and gas. Second, the Secretary must approve the leases under agreed upon terms and conditions. Third, the lessee must provide the Secretary with a plan of exploration and an Oil Spill Response Plan (“OSRP”) pursuant to the Clean Water Act (“CWA”). Fourth, after searching for oil and gas, and successfully finding either, the lessee has must submit a production and development plan to the Secretary for approval.

At the third stage, the Secretary of the Interior has delegated its power to the Bureau of Safety and Environmental Enforcement (“BSEE”) to approve OSRPs to prevent and respond to oil spills. The CWA requires these plans at four levels: national, regional, local, and individual. At the individual level, owners and operators must propose an OSRP for approval that outlines their response to a potential “worst case discharge” of oil or some other hazardous substance.

Shell Gulf of Mexico Inc. and Shell Offshore Inc. (collectively “Shell”) acquired three leases for offshore exploration and production—two leases in the Beaufort in 2005 and 2007, and one in the Chukchi Seas in 2008. Shell complied with all regulations at the time for intended exploration, but due to the Deepwater Horizon oil spill in 2010, the Secretary of the Interior placed a temporary moratorium on all offshore drilling. The United States Department of Interior required owners and operators to provide new information in all OSRPs after the moratorium ended. To comply with the new criteria, Shell updated its OSRPs for its three leases. BSEE approved the updated Beaufort and Chukchi Seas OSRPs.

Alaska Wilderness League, a coalition of environmental groups, sued Secretary of Interior, Sally Jewell, in her official capacity because of the approval of Shell’s three OSRPs. Shell intervened as a co-defendant. On cross-motions for summary judgment, the United States District Court for the District of Alaska (“district court”) ruled in favor of Jewell and Shell. Alaska Wilderness League appealed to the United States Court of Appeals, Ninth Circuit (“Court”). The Court reviewed the granting of summary judgment de novo and reviewed the record of the agency’s action under the arbitrary and capricious standard.

First, Alaska Wilderness League argued BSEE’s approval of the OSRPs was arbitrary and capricious because Shell assumed it would be able to recover ninety to ninety-five percent of any oil spilled in either of the seas via mechanical means. A figure that Alaska Wilderness League claimed was unrealistic and that Shell failed to support with any evidence. The Court did not agree with Alaska Wilderness League’s interpretation, finding instead that Shell could store, not recover, ninety to ninety-five percent of any spilled oil. Further, the Court found that BSEE did not rely on this information in approving Shell’s OSRPs. Therefore, the Court found that the record did not support Alaska Wilderness League’s argument. Accordingly, the Court concluded BSEE’s approval of the OSRPs was not arbitrary and capricious.

The Court next addressed Alaska Wilderness League’s argument that BSEE failed to consult with other agencies in order to comply with the Endangered Species Act (“ESA”). The Court disagreed. The Court reasoned that ESA only triggers consultation when the agency’s involvement is discretionary, and, in this case, BSEE’s approval of the OSRPs was non-discretionary. Therefore, the Court held that ESA did not require BSEE to do a consultation.

The Court then went through a two-step Chevron deference analysis to assess BSEE’s interpretation of the applicable sections of the CWA. At step one of its Chevron analysis, whether the statute in question is ambiguous, the Court found that the CWA was ambiguous in both its structure and its language. The Court found the CWA has ambiguous language because of three pertinent sections: (i) 33 U.S.C. § 1321(j)(5)(A)(i) requires an operator to “prepare and submit . . . a plan for responding, to the maximum extent practicable, to a worst case discharge;” (ii) § 1321(j)(5)(D) lists six requirements that the OSRP “shall” meet; and (iii) § 1321(j)(5)(E)(iii) states that if the OSRP meets all six requirements, then BSEE “shall” approve it.

Specifically, the Court found the text ambiguous as to whether BSEE has the discretion to consider any additional environmental factors in making its determination of an OSRP. The Court found that the “maximum extent practicable” language in § 1321(j)(5)(A)(i) suggested the agency had discretion in its approval of an OSRP. However, the Court also found §§ 1321(j)(5)(D) and 1321(j)(5)(E)(iii) to be a laundry list of requirements that an OSRP must meet. If an OSRP meets those requirements, then BSEE must approve the plan; removing any agency discretion. Additionally, the Court found the statute’s structure ambiguous because of the discretionary language in one section, and the rigid language in the one following it. The Court found this difference created “a statute whose halves do not correspond to each other – giving rise to ambiguity that calls for Chevron deference.” Under this finding of ambiguity, the Court found it must defer to BSEE’s interpretation of the statute as long as its interpretation is reasonable.

The Court then underwent the second step of the Chevron analysis to determine whether BSEE’s interpretation was reasonable. Courts must defer to an agency’s interpretation of an ambiguous statute as long as that interpretation is reasonable. The Court found that BSEE’s interpretation of the statute was reasonable. BSEE argued that § 1321(j)(5)(A)(i) mandated it to promulgate regulations that help operators follow the OSRP requirements listed in § 1321(j)(5)(D). Then, separately, § 1321(j)(5)(D)-(E) lists exactly what the OSRP shall include and the agency shall approve. The Court agreed with BSEE’s interpretation that the statute mandated the agency to publish regulations to outline how operators can comply with the list. The Court also agreed with BSEE’s interpretation that it could not consider anything more than the list when granting an OSRP. The Court, having found BSEE’s interpretation to be reasonable, deferred to the agency’s interpretation.

The Court also found that BSEE’s interpretation was consistent with longstanding agency policy. The Court explained how BSEE has a history of regulating in conformity with the goals of the Oil Pollution Act that amended the CWA. The legislative history of the Oil Pollution Act suggests that Congress meant to create specific requirements of OSRPs, not guidelines open to interpretation by the courts or agencies.

Lastly, the Court addressed Alaska Wilderness League’s four additional arguments. First, Alaska Wilderness League argued that the similarity in language between the requirements listed in § 1321(j)(5)(E) and the section of the statute governing federal response plans to spills subjected the approval of OSRPs to ESA consultation. However, the Court disagreed with this interpretation. Under the sections of the statute governing federal response plans, an ESA recommendation may prompt agency action, but the plan “shall include, but not be limited to” a number of factors. This federal response plan requirement, unlike that in § 1321(j)(5)(E), does not limit the factors to those listed.

Second, Alaska Wilderness League argued that the regulations contain no language to support approval of the OSRPs just because they address the clean up plan to some degree. The Court quickly dismissed this argument. The Court found that the statute states that the purpose of the OSRP is to prepare a response plan for an accident at sea resulting in release of oil, and that Congress ordered these plans be in compliance with “the Oil Pollution Act’s amendments to the Clean Water Act.” The Court deferred to BSEE’s interpretation that the OSRPs were sufficient and justly approved, despite any explicit language governing BSEE’s decision.

Third, Alaska Wilderness League argued that BSEE had discretion over whether OSRPs met the criteria in § 1321(j)(5)(E), thus triggering ESA consultation. The Court found this argument to be at odds with previous Supreme Court’s rulings. The Supreme Court previously held that “ESA cannot defeat an agency’s nondiscretionary statutory directive.” The Court held that BSEE’s act of granting OSRPs was nondiscretionary, and so it did not trigger any interagency review under ESA.

Lastly, Alaska Wilderness League claimed that BSEE violated the National Environmental Policy Act (“NEPA”) by failing to do an environmental impact statement (“EIS”) before approving the OSRPs. Under NEPA, all federal agencies must conduct an EIS before conducting any “major Federal action” that significantly affects the environment. However, the Court noted that there is an exception to this requirement when the environmental impact is the result of a decision over which the agency had no discretion. The Court ruled that because BSEE had no discretion over the approval of the OSRPs under the statute, it also had no discretion over the environmental impacts, making BSEE exempt from performing an EIS.

Accordingly, the Court affirmed the district court’s ruling.

D.W. Nelson, Senior Circuit Judge, dissenting.

Senior Circuit Judge Nelson agreed with the majority’s ruling that BSEE acted appropriately when it approved the OSRPs in question, but dissented to all other aspects of the majority opinion. Specifically, the dissent agreed with Alaska Wilderness League’s contention that BSEE’s action was discretionary, triggering an ESA consultation.

The dissent also disagreed with the majority’s finding that BSEE was exempt from performing a NEPA analysis. The dissent did not agree with the majority’s interpretation of the NEPA exception. The dissent argued that as a regulator of environmental consequences “the [BSEE] did in fact possess the kind of discretion that necessitated NEPA review.”

William James Tilton

Image: Deepwater Horizon oil spill, Gulf of Mexico. Flickr user Green Fire Productions, Creative Commons.


Askins v. Ohio Dep’t of Agric., 809 F.3d 868 (6th Cir. 2016) (holding that i) the Clean Water Act’s citizen suit provision does not apply to notification requirements; ii) the Clean Water Act’s notification requirement is not a condition of a National Pollutant Discharge Elimination System permit; iii) the Clean Water Act does not permit a cause of action against non-polluting regulators for violations of procedural regulations; and iv) the U.S. Environmental Protection Agency’s decision not to hold a hearing was not a failure to perform a non-discretionary duty, and as such was not actionable under the Clean Water Act).

This was an appeal from The United States District Court for the Northern District of Ohio, which dismissed all of appellants’, Larry and Vickie Askins (“Askinses”), claims.  The Ohio Environmental Protection Agency (“Ohio EPA”) administers the National Pollutant Discharge Elimination System (“NPDES”) under the U.S. Environmental Protection Agency’s (“U.S. EPA”) approval.  In 2001, the Ohio legislature authorized the Ohio Department of Agriculture (“ODA”) to apply to the U.S. EPA to transfer authority from Ohio EPA to ODA, so that ODA could administer part of the state-NPDES program.  The Clean Water Act (“CWA”) permits such a transfer, but requires the U.S. EPA’s permission prior to transfer.  The Askinses alleged that the transfer took place in 2001, while the Ohio EPA didn’t seek permission until some five years later.  As such, the Askinses sued under the CWA’s citizen suit provision, alleging various violations of the CWA.

The lower court held that the Askinses failed to state a claim under the CWA, the U.S. EPA did not fail to perform a non-discretionary duty under the CWA, and the U.S. EPA, the Ohio EPA, and the ODA did not violate the CWA.  The Askinses appealed to the Sixth Circuit Court of Appeals (“Court”), arguing that the CWA’s citizen suit provision permitted their cause of action.

First, the Court considered whether the Askinses could maintain a citizen suit action for a violation of the CWA’s notice requirement under Section 1314.  The Court reasoned that the notice requirement at issue is not an enumerated provision requiring compliance, and as such, the citizen suit provision does not encompass alleged violations of the requirement.

Next, the Court considered whether the notification requirement was a “condition.”  The Court concluded that the notification requirement serves as a timing mechanism, which triggers a state’s ability to apply to administer the NPDES program, as opposed to a substantive requirement.  Further, the notification requirement referred to EPA approval of a state’s permit program, not a state’s approval of individual permits.  Finally, the Court concluded that the Askinses’ reading of the notification requirement as a condition was contradictory to NPDES requirements, specifically that state and federal permit conditions be the same.  As such, the Court held that the CWA’s notification requirement is not a permit “condition.”

Third, the Court determined whether there existed a private cause of action against regulators for violations of procedural regulations.  The Court concluded that if Congress intended the citizen suit provision to permit the Askinses’ claim, it would have included language in the explicitly enumerated circumstances permitting suit.  Further, if the citizen suit provision were so expansive as to permit this claim, the provision’s remedies would give it more teeth than the U.S. EPA itself has, by way of the provision’s shorter notice period and availability of civil penalties and costs.  This is not the case because Congress intended the citizen suit provision to supplement the regulators’ authority.  Finally, cases that considered other, identical citizen suit provisions reached the same conclusion as this Court.  Therefore, the Court held, the CWA citizen suit provision did not permit a private right of action against a non-polluting regulator for procedural violations.

Finally, the Court considered whether the U.S. EPA failed to perform a non-discretionary duty.  The Court held that the CWA does not require the U.S. EPA to hold a hearing.  Should the U.S. EPA choose to hold a hearing, the CWA requires it to withdraw approval of a state-NPDES program after hearing, proper notice, and time to address the issue.  That is to say, the CWA does not require a hearing in the first place; therefore it is not a non-discretionary duty.  The U.S. EPA did not hold a hearing in the present case, so no non-discretionary duties arose.  Thus, the CWA did not permit the Askinses’ citizen suit.

Accordingly, the Court affirmed the lower court’s dismissal for lack of subject-matter jurisdiction.

Tim Berrier


Forbes v. Forbes

Forbes v. Forbes, 341 P.3d 1041 (Wyo. 2015) (holding: i) water rights are real property that parties must disclose during discovery proceedings; and ii) trustees cannot transfer water rights to individual trust members because it is not in the best interest of all beneficiaries).

Six members of the Forbes family formed the Beckton Ranch Trust (“BRT”) in 1920. The trust holds certain parcels of land with water and ditch rights in Sheridan County, Wyoming. Presently, the BRT has nineteen beneficiaries, and William “Cam” Forbes (“Cam”) is the acting trustee. Some time in 2009 or 2010, the Wyoming Board of Control (“WBC”) asked Cam to correct discrepancies between permitted water rights and actual water usage on BRT land. Acting as trustee, Cam filed four petitions for changes in place of use. In 2012, the WBC granted the petitions transferring the water rights onto Cam and his sister’s, Julia Forbes (“Julia”), land. Cam did not notify any of the other trust beneficiaries of the transfer. Citing other issues with his siblings’ management of the BRT, Cam’s brother, Waldo E. “Spike” Forbes (“Spike”) resigned as trustee and sued to remove the remaining trustees, alleging that they breached their duty of loyalty to the trust. Spike sought removal of his siblings as trustees of BRT. During discovery, Cam did not disclose the water rights transfers. Spike learned of them from another source during pretrial proceedings.

After the Sheridan County District Court removed Cam and Julia as trustees, the siblings appealed to the Wyoming Supreme Court (“Court”). Cam and Julia argued that the trial court erred in removing them as trustees and finding that they profited from the transfer.

The Court held in favor of Cam and Julia because Spike did not include the water rights transfers in his original complaint for breach of loyalty, and he failed to amend his complaint to include the specific water rights claim. He thus did not give fair notice that the water rights were at issue. Because the trial court used the water rights exhibits as part of its decision to remove Cam and Julia as trustees, the Court found that the trustees did not have sufficient notice. The Court noted that the parties could have resolved the issue by asking for a continuance on the basis of the surprise evidence. Even though the defendant trustees did not ask for a continuance, they made numerous objections to the inclusion of the water rights transfers in evidence. The Court found this argument against their removal as trustees persuasive.

The Court did find that Spike should have disclosed the water rights transfers during discovery. The interrogatory that called for “details of all transactions of real property” included information regarding water rights of the BRT. The Court did not find that there was enough specificity in the pleading regarding the water rights to properly sanction Cam and Julia under the Wyoming Rules of Civil Procedure 37(c). Therefore, it declined to remove them as trustees of the BRT.

Next, the Court considered whether Cam’s transfer of water rights on behalf of himself and sister breached his duty of loyalty to the BRT beneficiaries. Because of the trust’s specific language, and Cam’s failure to distinguish between his own property and property held by the BRT, he did not manage the trust in the sole interest of the beneficiaries. The Court concluded that that self-dealing alone constituted a breach of the duty of loyalty. However, the Court noted that Cam’s breach of duty of loyalty did not warrant his removal as a trustee of the BRT.

Accordingly, the Court reversed the district court’s order removing Cam and Julia as trustees of the BRT.

Sarah Rice

Image: Thermopolis, Wyoming.  Flickr user m01229, Creative Commons.


Teton Co-op Canal Co. v. Teton Coop Reservoir, 365 P.3d 442 (Mont. 2015) (holding: (i) the Water Court’s finding that Teton Canal’s predecessors in interest did not develop a certain diversion point was clearly erroneous because they developed the diversion point to build Glendora Canal; (ii) the Water Court’s finding that the Eureka Reservoir’s priority date related back to the 1890 Notice was incorrect because the 1890 Notice did not contemplate the Eureka Reservoir; and (iii) the Water Court, on remand, must determine Eureka Reservoir’s priority date).

In 1890, Teton Canal’s predecessors filed an appropriation notice (“1890 Notice”) for claims along the Teton River for irrigation purposes. Immediately following the 1890 Notice, Teton Canal’s predecessors constructed the Glendora Canal. In 1891, the predecessors filed another larger claim along the Teton River (“1891 Notice”). The 1891 Notice listed a diversion point two miles from the Glendora Canal’s diversion point. Both the 1890 and 1891 Notices described part of the purpose of appropriation as to create reservoirs.

In 1893, Teton Canal’s predecessors sold their interests to a company that later transferred those interests to Russell Shepherd. Shepherd subsequently became involved in a court case adjudicating water rights on the Teton River (“Perry case”). During the Perry case, Shepard transferred his rights to Teton Canal. In 1908, the Perry court issued a decree that effectively extinguished the claims made under the 1891 Notice. While Teton Canal demonstrated interest in developing a reservoir, it had not done so by 1926, the year when the United States General Land Office inspected the site. Teton Canal finally constructed the reservoir in 1937.

In 1982, Teton Canal submitted claims for six distinct water rights along the Teton River in order to comply with the requirements of the Montana Water Use Act of 1973. All six claims listed an identical priority date: April 18, 1890. The point of diversion, the Eureka Canal, was also the same for all six claims. Water distributors, Teton Coop Reservoir Co. (“Teton Reservoir”), Lower Teton Joint Objectors, and the Farmer’s Co-op Canal, all objected to Teton Co-op Canal’s claims to the Eureka Reservoir. Teton Canal settled with all of the objectors besides Teton Reservoir. After conducting evidentiary hearings, the Montana Water Court (“Water Court”) issued an order in favor of Teton Canal. The Water Court held that Teton Canal’s water rights claims related back to the 1890 Notice. Teton Reservoir appealed the judgment of the Water Court to the Supreme Court of Montana (“Court”).

On appeal, Teton Reservoir argued that the Water Court erred in determining that Teton Canal’s claims to the Eureka Reservoir related back to the 1890 Notice. The Court reviewed the Water Court’s findings of fact under the clearly erroneous standard and its conclusions of law for correctness.

The Court first examined whether Teton Canal’s predecessors intended to include the Eureka Reservoir in the 1890 Notice. Teton Reservoir argued that the Water Court erred in determining that Teton Canal’s predecessors did develop the diversion point described in the 1890 Notice. Teton Reservoir also asserted that the Water Court disregarded evidence clearly demonstrating that Teton Canal’s predecessors built the Glendora Canal, which corresponded with descriptions of the 1890 diversion point. The Court reviewed the evidence including maps and testimony from an engineer who had helped construct the Glendora Canal. The Court determined that the Teton Canal’s predecessors did develop the 1890 diversion point when they created the Glendora Canal. Thus, the Court held that the Water Court’s clearly erred in finding the predecessors had never developed the diversion point.

Teton Reservoir next argued that the 1890 Notice did not contemplate the Eureka Reservoir; rather, the 1891 Notice, which the court had since nullified, first asserted the Eureka Canal as a new diversion point. Conversely, Teton Canal argued that it consolidated its practices to include the Eureka Reservoir in the 1890 Notice. The Water Court found that the 1890 Notice contemplated multiple reservoirs including the Eureka Reservoir. On appeal, the Court assessed whether Teton Canal’s claims could relate back to the 1890 Notice. The Court reviewed the evidence and agreed with Teton Reservoir. The Court found that Teton Canal’s predecessors intended the Glendora Reservoir to be part of the 1890 Notice, but intended the Eureka Reservoir to be a part of the nullified 1891 Notice. The Court held the Water Court misinterpreted the nullified 1891 Notice and, therefore, the Water Court was incorrect in finding that Eureka Reservoir had a priority date of 1890.

The Court then addressed Teton Canal’s argument that the Eureka Reservoir is a part of the 1890 Notice because the diversion point “simply moved” to a point upstream following the nullification of the 1891 Notice. The Court noted that the law required “reasonable diligence” on the part of Teton Canal and its predecessors to develop the Eureka Reservoir. In analyzing the reasonable diligence prong, the Court examined evidence of the course of conduct of Teton Canal following the Perry court decree. Because Teton Canal took forty-five years to build the Eureka Reservoir, the Court concluded that Teton Canal failed to proceed with reasonable diligence in developing the Eureka Reservoir site. Therefore, the claims could not relate back to the 1890 Notice, and the Water Court erred in concluding that Teton Canal “aggressively pursued” the development of the reservoir.

Finally, the Court considered what priority date it should assign to the Eureka Reservoir. Teton Reservoir asserted the year should be 1936, the year when construction on the reservoir began. Because Teton Canal did not provide an alternate date, the Court remanded this question to the Water Court.

Accordingly, the Court reversed the order of the Water Court and remanded the case for proceedings consistent with this opinion.

Brian Hinkle

Image: Eureka Reservoir, Montana.  Flickr user Sam Beebe, Creative Commons.


Eureka Cnty. v. State Eng’r of Nev., 359 P.3d 1114 (Nev. 2015) (holding that the State Water Engineer provided insufficient evidence to support his finding that the applicant could mitigate the impact of appropriation on existing water rights).

In 2005, General Moly, Inc. (“General Moly”) began to apply for water rights in anticipation of the molybdenum mine that it sought to construct in Eureka County (“Eureka”). The following year, General Moly created a subsidiary, Kobeh Valley Ranch, LLC (“KVR”), to take charge of the proposed mine’s water rights. KVR submitted multiple applications for water rights between 2006 and 2010.

Eureka and several senior water rights holders in the area objected to KVR’s applications because, inter alia, they conflicted with existing rights. The Nevada State Engineer (“Engineer”) held several hearings on the matter and ultimately found that, although KVR’s applications would impact existing rights, KVR could fully mitigate the impact. Thus, the Engineer granted all of KVR’s applications and required that KVR develop a mitigation plan (“3M Plan”) to alleviate any impact.

Eureka, as well as Kenneth F. Benson, Diamond Cattle Company, LLC, and Michel and Margaret Ann Etcheverry Family, LP (“Benson-Etcheverry”), petitioned the Seventh Judicial District Court, Eureka County (“district court”) for judicial review of Engineer’s ruling. The district court did not grant the petition because it found that the Engineer’s ruling had substantial evidence and that conflict avoidance through mitigation comported with the requirements of the Nevada statute. Eureka and Benson-Etcheverry appealed the district court’s denial of judicial review to the Nevada Supreme Court (“Court”) and asked the Court to determine whether the Engineer may consider mitigation abilities when assessing the conflicts between a proposed water right application and existing rights.

The Court first addressed whether the Engineer complied with the controlling state statute, Nevada Revised Statute § 533.370. The statute requires that “where [a] proposed use or change conflicts with existing rights . . . the State Engineer shall reject the application and refuse to issue the requested permit.” The Court declined to decide if the statute allowed the Engineer to grant applications on the condition of future mitigation. Instead, the Court focused on whether Engineer’s ruling had substantial evidence.

The Court analyzed the record and found that although the Engineer labeled existing water right holders as “likely to be impacted,” expert testimony portrayed this labeling as a significant understatement. Specifically, two experts for KVR admitted that the proposed pumping would cause flows to cease and stock watering wells to dry up. Because the requested appropriations could “completely deplete” the water sources underlying existing rights, the Court ruled that KVR’s applications fit undeniably within the statutory requirement of a “conflict.”

Next, the Court considered the Engineer’s evidentiary support for his reliance upon the 3M Plan to resolve the water rights conflicts. The Court limited its analysis to a determination of whether substantial evidence supported the Engineer’s decisions. The Engineer found that “flow loss can be adequately and fully mitigated by [KVR] should predicted impacts occur[,]” but neither the Engineer nor KVR articulated which techniques would comprise this mitigation plan or what evidence suggested that mitigation would truly restore senior water rights. The Court found that rather than requiring KVR to propose a mitigation plan before he granted appropriation rights, the Engineer required KVR to submit such a plan after he granted all of its change and use permits. The Court warned that granting water rights before submission of a mitigation plan could interfere with the due process rights of those who wish to protest an application because the challenge could only result in vacating the mitigation proposal. The Court did not adopt Engineer’s and KVR’s assumption that an effective 3M Plan could circumvent the statute’s “conflict” stricture. Instead, the Court ruled that Engineer provided insufficient evidence to support his theory of mitigation and thereby violated the requirements of the state statute by granting KVR its applications in spite of imminent impact.

Accordingly, the Court reversed the order of the district court and remanded the case.

 

The featured image is of an open pit mine in southern Arizona.  This photo is from the public domain.