Weber v. N. Loup River Pub. Power & Irrigation Dist., 854 N.W.2d 263 (Neb. 2014) (holding that the district court properly granted the defendant’s motion for summary judgment because (i) the plaintiff’s failure to pay irrigation charges was a condition precedent to the defendant’s contractual duty to deliver water to the plaintiffs’ land; (ii) the defendant did not waive the condition precedent when it waived the irrigation fees for one newly contracted tract of land; (iii) the defendant did not anticipatorily breach the contracts because the plaintiffs had already materially breached the contract through nonpayment; and (iv) the defendant was not negligent in its delivery of the water to the plaintiffs because the plaintiffs’ prior breach of the contracts relieved the defendant of any preexisting duty).

North Loup River Public Power and Irrigation District (“North Loup”) manages an irrigation system with many diversion dams and canals, including the Taylor-Ord Canal (“Canal”), which originates at the Taylor Diversion Dam (“Dam”). William and Dixie Weber (“the Webers”) had eight contracts with North Loup to irrigate their farmland from the Canal. The contracts stated that North Loup would provide water during the irrigation season to the Webers’ land in exchange for $2.50 per acre. The money was to be paid by the first day of December the year preceding the irrigation season. The contracts also stated that North Loup would withhold delivery of the water if the Webers failed to pay within four months of that date.

In June of 2010, the North Loup River experienced an uncommon amount of rainfall and flooding. On June 11, 2010, the flood completely destroyed the Dam and severely damaged the Canal. North Loup determined that the Dam was “beyond repair” and decided to rebuild a permanent dam. The landowners with contracts for irrigation water received no water that year due to the damage.

The Webers’ bill for the 2010 irrigation season was due December 1, 2009. At the time of the flood in June 2010, the Webers still had not paid their bill. The Webers finally paid their bill on April 13, 2011, but they did so “under protest.” In December of 2011, the Webers filed a complaint against North Loup alleging that North Loup had breached its contracts with them and negligently failed to provide water during the 2010 irrigation season. North Loup denied the allegations and asserted that the Webers had failed to fulfill a condition precedent of the contracts when they failed to pay the 2010 irrigation charges until April 13, 2011. After an evidentiary hearing, the District Court for Loup County (“district court”) granted North Loup’s motion for summary judgment, concluding that the Webers breached a condition precedent, thereby relieving North Loup of its duty to deliver water. The Webers appealed directly to the Supreme Court of Nebraska (“Court”).

On appeal, the Webers claimed that the district court erred in granting summary judgment to North Loup because issues of material fact existed regarding the Webers’ obligation to make an advanced payment for the 2010 irrigation season. Accordingly, the Webers claimed, North Loup anticipatorily breached its contract. The Court clarified that the “meaning of an unambiguous contract is a question of law.”

The Court applied the same general rules regarding contracts to the Webers’ contract. In doing so, the Court first considered whether the Webers’ payment of irrigation charges was a condition precedent to North Loup’s contractual duty to deliver water. Holding that it was, the Court found a condition in the terms of the contract that stated, “[North Loup] shall withhold and stop the delivery of water to the landowner in the event a default of payments herein required occurs and such default continues for a period of four months following the due date.” The Webers did not deny that they failed to pay their bill when due on December 1, 2009. Further, the Webers admitted that their bill continued to be in default for much longer than four months after the due date. Therefore, the Court reasoned that North Loup’s duty to provide water “never came to fruition,” negating the possibility of breach.

The Court further held that North Loup did not waive the condition precedent. The Webers argued that North Loup never decided whether it would waive the landowners’ 2010 irrigation charges due to the flood. Finding that waiver of a condition precedent requires a clear, unequivocal, and decisive action, the Court held that North Loup did not waive the condition precedent to the Webers’ contract. Although North Loup waived a different landowner’s irrigation charges in the 2010 year, the Court found that North Loup did so because the contract was only formed two months prior to the flood. The Court concluded that North Loup’s isolated wavier of the other landowner’s irrigation fees did not waive the condition precedent in its contract with the Webers.

The Court next considered whether North Loup anticipatorily breached the contracts. The Webers argued that North Loup anticipatorily breached the contracts when it decided to build a new dam rather than a temporary one, without an assessment of damages two months before the irrigation season. The Court disagreed and held that North Loup did not anticipatorily breach the contracts. The Court reasoned that the Webers breached the contracts before North Loup’s alleged breach. Because payment of the 2010 irrigation fees was both the Webers’ duty to perform and a condition precedent to North Loup’s duty to provide water, North Loup could not anticipatorily breach the contracts when the Webers had already materially breached them. The Court emphasized that the term was material because the Webers’ payment was one of their only obligations under the contracts.

Finally, the Court found that North Loup did not act negligently by failing to deliver water to the Webers, even though non-delivery of the water might have been a statutory violation. Neb. Rev. Stat. section 46-263 makes it a misdemeanor for a person in charge “of a ditch or canal used for irrigation purposes . . . to prevent or interfere with the proper delivery of water to the person or persons having the right thereto.” North Loup argued that the statute was inapplicable because it applied to “persons” and not to “public entities.” The Court did not address whether the statute applied to “public entities,” instead finding that the statute did not require North Loup to deliver water to “those having no right to the water.” The Court held that the Webers’ nonpayment of the irrigation fees relieved North Loup of its duty to deliver water. Because North Loup had no duty to deliver the water at all, the Court found that North Loup’s failure to deliver the water was not negligent.

Accordingly, the Court affirmed the district court’s grant of North Loup’s motion for summary judgment.

 

The title image features the Loup River in Nebraska. This file has been released to the public domain.


San Luis & Delta-Mendota Water Auth. v. Locke, No. 12–15144, 2014 WL 7240003 (9th Cir. Dec. 22, 2014) (holding that (i) the district court abused its discretion by improperly admitting extra-record declarations and substituting its own analysis for the Agency’s opinion; (ii) National Marine Fisheries Service (“NMFS”) acted within its discretion by using a non-scaled data model to set river flows where it adequately explained its decision and used additional studies to validate its decision; (iii) NMFS did not act arbitrarily or capriciously when determining the State Water Project’s and the Central Valley Project’s (“the Projects”) continued operations were likely to jeopardize viability and essential habitat of species because it demonstrated sufficient research to support its conclusions; and (iv) NMFS’s various reasonable and prudent alternative (“RPA”) recommendations and requirements were not arbitrary or capricious).

Over twenty-five million agricultural and domestic users in California’s arid Central Valley rely on the government’s extraction of water from its rivers. However, this extraction dramatically alters the rivers’ natural states and threatens the viability of the species that depend on the water. To resolve this conflict, the U.S. Department of the Interior’s Bureau of Reclamation (“Reclamation”) ordered the NMFS to evaluate under the Endangered Species Act (“ESA”) how the Projects’ continuing water extraction would impact certain endangered Salmonid species in the rivers.

In a 2009 Biological Opinion (“BiOp”), NMFS found that continuing extraction threatens species and proposed a solution. In response to the proposed remedies, San Luis & Delta–Mendota Water Authority and Westlands Water District (“the Water Districts”) filed suit against the Department of Commerce, the National Oceanic and Atmospheric Administration and NMFS (collectively, “the Federal Defendants”), to challenge whether the 2009 BiOp was developed arbitrarily or capriciously. On summary judgment, the United States District Court for the Eastern District of California (“district court”) found that NMFS violated the Administrative Procedure Act’s (“APA”) arbitrary or capricious standard when developing the BiOp and granted in part and denied in part the claims of both parties. The United States Court of Appeals for the Ninth Circuit (“court”) reviewed this case on appeal.

On appeal, the Federal Defendants asked the court to overturn the components of the BiOp that the district court struck down, and the Water Districts asked the court to overturn the district court’s holdings that were favorable to the BiOp. Before reviewing the 2009 BiOp, the court resolved the initial question of whether the district court erred in its own record review by supplementing the administrative record with extra-record declarations. The court noted that in making its determinations, a district court may only admit extra-record evidence to further understand whether an agency complied with the APA’s arbitrary or capricious standard. However, the district court heavily relied on extra-record scientific opinion to evaluate and question the 2009 BiOp. The court found the district court violated the general rule limiting a court’s review of agency action to the administrative record. Specifically, the court reasoned that the district court erroneously substituted the extra-record declarations for NMFS’s own analysis.

The court next determined whether NMFS complied with the procedural requirements of the APA. Because the ESA does not have its own standard of judicial review, the court evaluated the BiOp under the APA’s deferential arbitrary and capricious standard wherein a court will sustain an agency’s actions if there is a rational connection between the facts and conclusions. In determining the best method to prevent endangered fish species from being caught in a negative flow resulting from pumping the rivers, NMFS used raw salvage data from fish salvage facilities to provide a reasonable and prudent alternative (“RPA”) in its BiOp. The Water Districts challenged the use of raw salvage data instead of data scaled to fish populations and the district court held that using raw salvage data went against the grain of traditional science. Referencing its decision in San Luis & Mendota Water Authority v. Jewell (“Delta Smelt”), where the consulting agency also used raw salvage data, the court held that NMFS’s choice to use raw salvage data was within its substantial discretion. In Delta Smelt, the court determined an agency has substantial discretion to choose whichever available scientific model it wants to use. The court noted that NMFS adequately explained why the loss data usefully assisted it in identifying whether and how fish loss relates to negative flow velocity. Also, NMFS did not base maximum negative flow prescriptions on raw data alone, using other studies to help decide the specific flow requirements imposed. Finally, similar to the Delta Smelt BiOp, the incidental take statement (“ITS”) in this case used population data to scale incidental take, and the RPA used that information to create its flow restrictions. For these reasons, the court held that NMFS acted within its discretion in using non-scaled data models to restrict flows.

Next, the court considered whether NMFS arbitrarily or capriciously determined that the Projects’ continuing activity on the river would jeopardize the viability and the essential habitat of the species. First, the district court determined that NMFS’s designation of the winter-run Chinook as a species at a “high risk” of extinction was unsupported by the record. The court held that NMFS’s explanation of how a 2007 study of the winter-run Chinook influenced its opinion was sufficient to satisfy the requirement that an agency consider all relevant factors and offer an explanation for its conclusions. Second, the district court held that NMFS did not consider all of the relevant factors when it determined the Projects jeopardized orca viability because it failed to address a 2009 Orca BiOp’s contrary finding. The court found that NMFS did in fact discuss the 2009 Orca BiOp and distinguished the two different outcomes as dealing with different time frames and yielding different results. This was sufficient to show that NMFS considered the 2009 Orca BiOp when developing the 2009 Salmonid BiOp. Third, the district court found that NMFS’s conclusions that the Projects’ deviations from CV steelhead preferred spawning water levels significantly reduced spawnable habitat were arbitrary and capricious. The district court stated that NMFS’s use of “maximum habitat” as a benchmark for spawnable area was not a goal of the ESA. However, the record showed that NMFS looked to several studies to determine the point at which the Projects’ restriction of flows on the river would appreciably reduce habitat. The court found that NMFS explained why the studies provided an adequate baseline for developing minimum flows in the river and thus satisfied its obligations under the ESA. Additionally, the record adequately cited studies supporting NMFS’s conclusion that the Projects’ operations negatively impacted spawning gravel quality and quantity. Accordingly, the court held that these findings were not arbitrary or capricious.

Next, the district court held that NMFS failed to articulate the connection between the Projects’ operations, invasive species, and harm to the endangered species. However, the 2009 BiOp found: (i) the Projects’ operations were degrading the environment in the interior delta, making it ill-suited to many native species; (ii) continued Projects operations would cause fish outmigration through the main channels of the delta to divert into intersecting channels that split off from the main rivers; and (iii) fish that are drawn through intersecting channels and into the inner Delta have a lower survival rate than fish that remain in the main delta. Noting that NMFS’s analysis was not perfect, the court held that evidence to support NMFS’s conclusions could be reasonably discerned and that its analysis was therefore not arbitrary or capricious.

Finally, the court determined whether the challenged RPA actions were arbitrary or capricious. The district court reversed and remanded several of the BiOp’s RPA actions because NMFS did not explain how each RPA action was essential to avoiding jeopardy or how each action complied with the ESA’s non-jeopardy factors. Specifically, the district court found that NMFS failed to explain how each RPA action could be implemented in a manner consistent with the intended purpose of the action, consistent with the scope of the Agency’s authority and jurisdiction, and in an economically and technologically feasible way. The court noted that the district court’s analysis was erroneous. In so concluding, the court relied on the holding in Delta Smelt, which explained that the ESA only requires that an agency impose RPAs that are “not likely to jeopardize” the species or its habitat, rather than those that are “essential to avoiding jeopardy.” Applying that standard here, the court found that NMFS was not required to meet all of the non-jeopardy factors but only to conclude that the proposed RPA would not further jeopardize the listed species.

The district court invalidated several RPA actions on the grounds that they were not supported by scientific evidence, were not economically or technologically feasible, or were made arbitrarily or capriciously. Finding that the record showed sufficient evidence or reasonable support for all of the actions, the court reversed all of the district court’s holdings. In so doing, the court reasoned that Action IV.2.1, requiring Reclamation and DWR to implement specific flows on the San Joaquin River to a higher rate to increase survival and abundance, was traceable to the record even if also maximally protective of fish. The court found that Actions IV.2.3 and IV.3, reducing exports from two pumping plants from January through June and November through December, respectively, to mitigate the adverse effects of the negative flows on the Salmonid fish species migrating during those time frames, were also supported by data cited in the record. It upheld Action IV.4.2, requiring the California Department of Water Resources to implement specific measures to reduce pre-salvage fish loss and improve salvage efficiency, because contrary to the district court’s analysis, the ESA did not require NMFS to cite record evidence showing economic and technological feasibility. The court further upheld Action III.1.2, requiring Reclamation to make cold water releases from the New Melones Reservoir to provide more suitable temperatures for the CV steelhead to spawn, as supported by the record. Here, the court noted that Action III.1.2’s exception for when the projected temperatures could not be achieved was sufficiently limited in application because Reclamation must satisfy several procedural requirements before NMFS would grant an exception. The court found that NMFS’s decision to recommend Action III.1.3, requiring Reclamation to operate releases from the East Side Division reservoir to achieve a minimum flow schedule to help sustain the CV steelhead habitat, was properly documented. It reasoned here that the district court erred by failing to defer to the Agency’s interpretation of a scientific study. Finally, the court upheld Action III.2.2, requiring Reclamation to collaboratively develop an operational strategy to achieve floodplain inundation flows that would help restore floodplains and CV steelhead habitat in the Stanislaus River, as within NMFS’s discretion. The court emphasized again that the Agency was not required to explain the Action’s feasibility.

Finally, the court affirmed the portions of the district court’s holdings that upheld the 2009 BiOp. In so doing, the court echoed its holding in Delta Smelt that an agency need not distinguish between discretionary and non-discretionary actions. In holding that the BiOp’s indirect effects on fish mortality were actually direct effects requiring no further elaboration, the court noted that the effects occurred concurrently with the Projects and were therefore direct effects. Finally, the court held that Reclamation was not independently liable under the ESA because the BiOp was legally sound.

The court reversed the district court’s holdings that invalidated the BiOp and affirmed the district court with regard to the issues on cross-appeal. Accordingly, the court remanded for entry of summary judgment in favor of the Federal Defendants.

 

The title image features an aerial view of the Sacramento Valley in northern Central Valley of California. This image is licensed under the Creative Commons Attribution Share-Alike 2.0 Generic license and the owner does not endorse this blog.


Stockton E. Water Dist. v. United States, 761 F.3d 1344 (Fed. Cir. 2014) (holding that (i) the plain language of a Bureau of Reclamation contract required it only to make available the contractual amounts of water, not to deliver it; (ii) the trial court improperly focused its damages determination on the amounts of water the appellant actually requested under this contract, as compared to the amounts it would have requested but for the Bureau of Reclamation’s initial repudiations; and (iii) the United States waived its right to dispute the trial court’s award of cost of cover damages by failing to properly cross-appeal the issue).

In 1983, Central San Joaquin Water Conservation District (“Central”) and Stockton East Water District (“Stockton”) (collectively “the Districts”) contracted with the United States Bureau of Reclamation (“Reclamation”) for appropriations of water from the New Melones Reservoir (“Reservoir”) in California’s San Joaquin Valley. Central’s contract called for Reclamation to make available, after a ten-year buildup period, between fifty-six thousand and eighty thousand acre-feet of water annually.

To determine the type and location of the conveyance systems needed to distribute the anticipated water, Central retained an engineering firm, CH2M Hill, to help determine projected demand. After meeting with the area’s agricultural community, surveying their lands, and obtaining letters of intent, CH2M Hill concluded that Central would need at least seventy thousand acre-feet of water annually from the Reservoir. The conveyance system was completed in 1993 at a cost of $7.4 million.

The year before, in 1992, Congress enacted the Central Valley Project Improvement Act (“CVPIA”), requiring Reclamation to dedicate eight hundred thousand acre-feet of water to fish, wildlife, and habitat development. As a result, Reclamation informed the Districts that it would likely only be able to provide them with water in the wettest of years. Central brought suit against Reclamation for breach of contract and a takings claim, seeking injunctive and declaratory relief and damages. In 2006, the United States Court of Federal Claims (“trial court”) held a trial on liability. The trial court found for Reclamation on the breach of contract claims and dismissed a related takings claim. The Districts appealed, challenging the trial court’s judgment of non-liability for the years 1994, 1995, and 1999–2004. The United States Court of Appeals for the Federal Circuit (“Court”) affirmed the trial court’s judgment for the years 1994 and 1995, but reversed its finding of non-liability for the years 1999–2004 and remanded with instructions to determine damages. On remand, the trial court awarded Central $149,950 in cover damages but denied Central any expectancy damages.

On appeal, Central argued that the trial court misinterpreted the nature of the breach and therefore failed to consider all evidence relevant to damages. The trial court had found that Reclamation was obligated only to make available the specified quantities of water, and that “Central did not set forth persuasive evidence demonstrating how much New Melones water its farmers plausibly might have requested in the 1999–2004 non-breach world, one in which Reclamation made full allocations under the 1983 contract.” Central argued, on the other hand, that beginning in the eleventh year, “Reclamation was obligated to provide, and Central was obligated to pay, for at least 56,000 acre-feet of water per year regardless of whether Central actually requested that quantity or not.” Therefore, Central argued, the trial court should have considered evidence, such as the initial CH2M Hill demand estimates, to properly determine expectancy damages.

The Court disagreed with Central’s assertion that the trial court erroneously interpreted the nature of Reclamation’s breach, but agreed that the trial court erred in failing to award expectancy damages and in how to analyze those damages based on the facts of the case. Specifically, the trial court improperly “focused its damages analysis on Central’s failure to request at least the minimum amount of water specified in the contract in the years following Reclamation’s non-performance announcements.” Because the trial court failed to consider these years in the context of Reclamation’s repeated announcements from 1993–1999 that it would be unable to provide the minimum contractual amounts of water, the trial court assumed that Central’s requests for less than the minimum amount of water was due to a lack of demand by Central’s customers. This interpretation implied that Central did not have actual economic loss attributable to Reclamation’s contractual breach during those years.

Instead, to properly analyze expectancy damages, the Court held that the trial court needed to focus on what would have happened but for Reclamation’s initial repudiation in 1993. In other words, the trial court should have taken into account testimony and other data from the year 1993 onward that could have revealed the amount of water the farmers might have requested from Central if Reclamation had complied with the contract. The Court stated that, by 1994, Central was on notice that “Reclamation was not going to supply the contractual quantities of water,” and that “[a]t some point most people stop asking for what they have been told they are not going to get, and they make other plans to meet their needs.”

In Reclamation’s brief to the Court, it raised for the first time the argument that the cost of cover damages the trial court awarded to Central was incorrect. Reclamation claimed that the trial court erred by including the excess costs that Central paid South San Joaquin Irrigation District for water during certain breach years, because Central failed to take all the water made available by Reclamation during those years. Central argued that Reclamation waived its right to challenge the awarded amount by not properly filing a cross-appeal on the issue. The Court agreed.

Accordingly, the Court vacated the trial court’s judgment not to award expectancy damages and remanded with orders to make a damages determination consistent with the Court’s opinion

 

The title image features the New Melones Reservoir and is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. The owner of this image does not endorse the DU Water Law Review.


Lacano Invs., LLC v. Balash, 765 F.3d 1068 (9th Cir. 2014) (holding that the Eleventh Amendment barred patent owners’ action for declaratory judgment against Alaska state officials for the ownership of streambeds because it was the functional equivalent of an action to quiet title).

The federal government issued land patents to Lacano Investments, LLC, Nowell Avenue Development, and Ava L. Eads (collectively, “Patent Owners”) before Alaska joined the Union in 1959. Patent Owners alleged that the land patents gave them ownership of particular streambeds in Alaska. However, the Alaska Department of Natural Resources (“the Department”) contended that the streambeds were “state-owned.” The Department based this contention on its determinations in 2010 and 2011 that the waterways above the relevant streambeds were first navigable in 1959 and continued to be navigable. Further, the Submerged Lands Act of 1953 grants the state title and ownership of lands beneath navigable waters.

After the Department notified Patent Owners of its determination, Patent Owners argued that their title was unaffected by the navigability determination. Patent Owners relied on a different section of the Submerged Lands Act, under which streambeds granted by federal patents prior to statehood do not transfer to the state upon joining the Union. Patent Owners subsequently sued the Department, seeking a declaratory judgment that the navigability determinations violated the Submerged Lands Act and an injunction barring the Department from claiming title to the lands beneath the waterways. The United States District Court for the District of Alaska (“district court”) dismissed the complaint for lack of subject matter jurisdiction. Patent Owners appealed to the United States Court of Appeals for the Ninth Circuit (“court”).

The court first examined whether the district court’s dismissal for lack of subject matter jurisdiction was appropriate. On a motion to dismiss for lack of subject matter jurisdiction, courts must accept all factual allegations in the complaint as true. Patent Owners alleged in their complaint that the streambeds were not submerged or state-owned and argued that the court was required to accept this allegation as true. The court held this was not a factual allegation but a legal conclusion, and thus did not accept it as true. The court then looked beyond the complaint to extrinsic evidence of the Department’s claim to the streambeds. Specifically, it examined letters attached to the complaint in which the Department demonstrated Alaska’s claim of ownership to the lands in dispute. Accordingly, the court held that the district court’s dismissal for lack of subject matter jurisdiction was appropriate.

The court then considered whether the Eleventh Amendment’s provision of sovereign immunity barred Patent Owners’ action, and found in the affirmative. The Eleventh Amendment prohibits certain suits brought against a state by an individual without the state’s consent. However, the Ex parte Young doctrine allows actions where an individual seeks prospective or injunctive relief against state officials who would have to implement a state law that is inconsistent with federal law.

The court held that Patent Owners’ action did not fall within the Ex parte Young exception and was therefore barred by the Eleventh Amendment. Binding on this issue was Idaho v. Coeur d’Alene Tribe of Idaho, in which the Coeur d’Alene Tribe (“Tribe”) sued the State of Idaho for ownership and use of land under navigable riverbeds within the boundaries of the Tribe’s reservation. The Supreme Court (“Court”) in Coeur d’Alene held that the Eleventh Amendment barred the suit because the Tribe was seeking close to the functional equivalent of an action to quiet title, and because the Tribe’s identity as a sovereign nation further implicated Idaho’s sovereign interests. The Court held that federal courts lack jurisdiction over all actions where a plaintiff seeks relief that is close to the functional equivalent of a quiet title and dismissed the Tribe’s claim.

The court in this case found that, like the Tribe in Coeur d’Alene, Patent Owners’ claim was the functional equivalent of a quiet title because they wanted full enjoyment and use of the streambeds. Finding that this case presented the same issues as Coeur d’Alene, the court affirmed the district court’s judgment, but did not affirm its reasoning. Specifically, it determined that the district court’s attempt to assess the State of Alaska’s interest in the streambeds was not necessary, and that Patent Owners’ claim should be dismissed simply because it was “close to the functional equivalent” of a quiet title action.

The court turned next to Patent Owners’ three counterarguments. Patent Owners first alleged that Coeur d’Alene was no longer good law, and that the court should have applied the Supreme Court’s recent “straightforward inquiry” analysis in Verizon Md., Inc. v. Pub. Serv. Comm’n of Md. to determine whether the Ex parte Young doctrine exempted their action from the Eleventh Amendment prohibition. In Verizon, the Court directed lower courts to conduct a direct assessment of whether a complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective. While the court acknowledged the tension between the “straightforward inquiry” and the holding in Coeur d’Alene, it held that Coeur d’Alene remained binding. In so concluding, the court noted that Verizon did not overturn Coeur d’Alene and that a more recent Supreme Court decision affirmed Coeur d’Alene’s core holding on the issue.

Patent Owners next alleged that their case was the exact opposite factual situation of Coeur d’Alene. Patent Owners argued that the Tribe in Coeur d’Alene sought to divest Idaho’s longstanding title, whereas Alaska sought to divest the Patent Owners’ alleged longstanding title in this case. The court rejected Patent Owners’ argument, and held that the Coeur d’Alene decision relied on the principle that submerged lands beneath navigable waters are tied in a unique way to sovereignty, regardless of the length of the state’s claim to title.

Lastly, Patent Owners alleged that their case differed from Coeur d’Alene because the Tribe had independent sovereign authority such that its ownership of the land would effectively diminish Idaho’s regulatory authority. Patent Owners argued that, because they lacked independent sovereign authority, their ownership of the streambeds in question would not threaten Alaska’s regulatory power. However, the court held that the identity of the Tribe was not dispositive in Coeur d’Alene, as the Supreme Court in that case had already made its decision when it raised the further impacts to state sovereignty. In so concluding, the court noted that, like the land in Coeur d’Alene, the streambeds in this case had a unique legal status and that state ownership of them was necessary for sovereignty.

Accordingly, the court affirmed the district court’s dismissal of Patent Owners’ claim.

 

The title image features the streambed of Gold Creek in Alaska. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.


Pub. Lands Access Ass’n v. Bd. of Cnty. Comm’rs of Madison Cnty., 321 P.3d 38 (Mont. 2014) (holding that: (i) a public road right-of-way includes the land reasonably necessary for maintenance, repair, and enjoyment; (ii) remand was necessary to determine the width of the public right-of-way established by prescriptive use; (iii) public use of the right-of-way to access the Ruby River for recreational purposes was permissible; and (iv) access to the river through the public road right-of-way did not constitute an unconstitutional taking of the landowner’s property).

In Madison County, Montana, (“County”), Seyler Lane, Lewis Lane, and the Duncan District Road cross the Ruby River by way of bridges. The County built and maintains the three bridges, and all three roads are public. The public acquired use of Lewis Lane and the Duncan District Road through deed and statutory petition, respectively. The public acquired a right-of-way to Seyler Lane and Seyler Bridge through prescriptive use. Defendant James C. Kennedy (“Kennedy”) owns land that abuts Seyler Lane and Seyler Bridge. In 2004, with the County’s permission, Kennedy built a private fence along the public right-of-way.

In 2004, the Public Lands Access Association, Inc. (“PLAA”) sued the County, asserting that the fences intruded on the public’s right-of-way and prevented the public from accessing the river. The trial court determined that the Seyler Lane public right-of-way, acquired by prescriptive use, included only the paved and traveled portion of the road, and did not include the land beyond Kennedy’s fences. The trial court granted the County a separate secondary prescriptive right for any use reasonable and necessary for maintenance and repair. PLAA appealed the decision.

On appeal, the Montana Supreme Court (“Court”) determined that all four issues raised by PLAA boiled down to one question: whether the public had a right to use the Seyler Lane right-of-way to access the Ruby River? To answer this inquiry, the Court had to determine (i) the ultimate width of the Seyler Lane right-of-way established by prescriptive use; and (ii) the purpose for which the right-of-way may be used.

In deciding to grant the County a secondary easement, the trial court relied on Montana case law stating that secondary easement rights may be granted to owners of canal or ditch easements for the purpose of reasonable maintenance. However, the Court noted that what was at issue in this case, as compared to a private easement, was a county road right-of-way established by prescriptive use, and that when a county road is established, the public acquires the right-of-way “and the incidents necessary to enjoying and maintaining it.” Montana case law further prescribes, that when a public road, as opposed to a private easement, is established by prescriptive use, the public right-of-way includes areas necessary to maintain it and allow for safe and convenient use. Accordingly, since land for maintenance and repair was already included in the public right-of-way, the Court held that the trial court erred by granting the County a secondary easement for that specific purpose. And that by doing so, it essentially split and narrowed the public right-of-way, which already existed beyond the portion of the road actually traveled.

Having found that the public could use the Seyler Lane right-of-way beyond the traveled path, the Court remanded the issue back to the lower court to determine the exact width of the public’s easement. However, the Court first had to determine whether the trial court could consider evidence of past recreational use when making that determination. PLAA argued that in the original proceeding, the trial court erred by excluding evidence of historical recreational use. The Court held that while recreational use alone is not sufficient to establish prescriptive use, it may be considered as part of “the nature of the enjoyment by which the public road right-of-way was acquired and, thus, may be considered in determining the width of the public road right-of-way.” However, the Court stated that recreational uses that extended beyond the width necessary for maintenance and repair would have to be established by clear and convincing evidence through the statutory period. The Court also noted that a party seeking to admit evidence of recreational use could only admit use that pre-dated Montana’s 1985 statute, which prohibits establishment of a prescriptive easement if acquired by entering private property to reach surface waters.

The Court then turned to the issue of scope, and held that public use of the Seyler Lane right-of-way may include purposes outside those established during the adverse period. The trial court had determined that the public could not travel from the road to the water because the areas were designated only for maintenance and repairs by the County, and, in the alternative, the PLAA had failed to submit evidence of recreational use occurring during the original prescriptive period. Having already determined that the public’s right-of-way included those areas needed for maintenance and repair, the Court held that the use of a public road right-of-way established by prescriptive use was not limited to “the adverse usage through which the road was acquired.” The Court held that, as compared to private prescriptive use, the scope of a public road right-of-way is broader and is not limited to the adverse uses by which the public acquired it. It also includes uses that are reasonably incident to the historical uses, and uses that are reasonably foreseeable. In other words, PLAA was not required to show particular recreational uses of the right-of-way in order for the public to use it for that purpose now; it needed only to show that recreational use was incidental or reasonably foreseeable. The Court concluded that use of the Seyler Lane right-of-way to access the Ruby River was a “reasonably foreseeable use of a public road right-of-way that crosses a river.”

Finally, the Court addressed Kennedy’s cross-appeal of the trial court’s finding that the public could use the Lewis Lane and Lewis Bridge right-of-way, acquired through an express grant contained in the original deed, to access the Ruby River. The public acquired use of the Lewis Lane roadway and bridge after the County purchased the right-of-way from Kennedy’s predecessor-in-interest in 1910. Although the grant of the right-of-way was contained in the deed, Kennedy argued that the trial court erred in allowing the public to use the sixty-foot wide right-of-way to access the river for two reasons: (i) his predecessor never intended the right-of-way to be used for recreational purposes, such as fishing and wading; and (ii) granting public access to the Ruby River amounted to an unconstitutional taking of property because Kennedy owned the riverbed beneath the right-of-way.

The Court rejected Kennedy’s first argument because the Lewis Lane deed expressly granted a public easement without limitation as to its uses. Without clear intent otherwise, the court presumes that a dedicator intended the public to use the right-of-way “in such a way that is most convenient and comfortable for usage known at the time of dedication and to those justified by lapse of time and change of conditions.” Accordingly, the Court held that public access to the river was a convenient and comfortable public use justified by the lapse in time and change in the public’s use over that time.

The Court also rejected Kennedy’s second argument. Kennedy claimed that as the owner of the riverbed underlying a non-navigable stream, he had the right to exclude the public from accessing that section of the river. The Court, however, noted that it “is settled law in Montana” that the owner of a riverbed does not have the right to exclude the public from utilizing the riverbed of non-navigable waters and banks up to the high water mark. Therefore, the Court held that since Kennedy never had the right to control access to the water he had “no compensable interest” in the property he claims was taken.

Accordingly, the Court affirmed the trial court’s finding that allowing public access to the Ruby River did not constitute an unconstitutional taking. The Court, however, reversed the trial court on all other issues and remanded the case to the trial court to determine the definite singular width of the Seyler Lane public right-of-way.

 

The title image features the Upper Ruby River in Montana. This image is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License and the owner does not endorse this blog. 


Kauai Springs, Inc. v. Planning Comm’n of Kaua’i, 324 P.3d 951 (Haw. 2014) (holding that (i) the agency did not “approve” the applicant’s permits when it failed to grant or deny the applications by the statutory deadline, because the applicant assented to an extension through its conduct; (ii) under the public trust doctrine, applicants must affirmatively prove that a proposed private use will not affect a protected use; and (iii) the agency’s inquiry into the applicant’s legal standing and compliance with other agencies’ processes was not “unreasonable, arbitrary, or capricious” because, under the public trust doctrine, the agency had a duty to protect the public water resource for future generations).

Kauai Springs Inc. (“Kauai Springs”) is a small water bottling and distribution company located in Koloa, Kaua’i (“Property”). Kauai Springs’s water comes from an underground spring several miles from the Property. EAK Knudsen Trust (“Knudsen Trust”) owns the land where the underground spring is located. The water reaches the property through a private gravity-fed system owned by Knudsen Trust and operated by Grove Farm Company. In 2006 the County Planning Department of the County of Kaua’i determined that Kauai Springs did not have the proper permits to operate within an agricultural district, and issued a cease and desist letter. Kauai Springs then applied for three permits (“Use,” “Special,” and “Class IV Zoning”) to bring the plant into compliance, and allow Kauai Springs to expand its water harvesting and bottling operations.

The Planning Commission of Kaua’i (“Planning Commission”) held four public hearings on the matter and solicited comments from the Public Utility Commission (“PUC”) and the Department of Land and Natural Resources Commission on Water Resource Management (“Water Commission”). The Water Commission was concerned that if Kauai Springs modified its water source, additional permits from the Water Commission would be required.

Based on these comments and concerns, the Planning Commission denied Kauai Springs’s applications for all three permits. The Planning Commission stated that since there may be outstanding regulatory processes, it was the applicant’s responsibility to present evidence on the need for any additional permits required. Kauai Springs appealed the Planning Commission’s decision to the Circuit Court of the Fifth Circuit (“trial court”). The trial court reversed in part, vacated in part, and required the Planning Commission to issue the three permits. The Planning Commission then appealed the trial court’s decision to the Intermediate Court of Appeals (“ICA”). On appeal, the ICA vacated the trial court’s decision and remanded the case back to the Planning Commission.

The Supreme Court of Hawai’i (“Court”) granted certiorari review to address two issues raised by Kauai Springs: (i) whether the ICA erred when it concluded that Kauai Springs assented to the extension of the deadlines for the Use and Class IV permits; and (ii) whether the ICA erred in remanding the case to the Planning Commission.

The Court first considered whether Kauai Springs assented to extending the decision deadlines for the Use and Class IV permits. Haw. Rev. Stat. § 91-13.5 requires counties to set a maximum time for consideration of permits, and states that permits are “deemed approved” if the issuing agency fails to act within the specified time period. The relevant Kauai County ordinances set mandatory time limits, but stated that an application was not deemed approved if the applicant assented to the delay. Kauai Springs argued that it did not explicitly or implicitly consent to an extension of the decision deadline, and further that Haw. Rev. Stat. § 91-13.5 does not permit extensions of deadlines based on an applicant’s consent.

In construing the statute, the Court examined the relevant legislative history and found that the legislature was concerned that certain permits would require more time and consideration than the maximum time period allowed. The Court stated that it would violate public policy if permits were “deemed approved” before counties had an opportunity to thoroughly and accurately consider the permit’s merits. Therefore, the Court held that an issuing agency may take additional time to consider an application, if the applicant has consented to the extension and the agency’s need for the extension is justified.

Having determined that agencies may seek time extensions, the Court next examined whether Kauai Springs consented to an extension. The Court noted that Kauai Springs needed all three permits to operate its bottling facility, that it submitted one application for all three permits, and that all three permits required similar information. Since the Special permit had the latest review deadline, the Court held that Kauai Springs had implicitly assented to an extended deadline for the Use and Class IV Zoning permits. Accordingly, the Court concluded that since the Planning Commission entered its decision by the latest deadline, it had timely entered a decision on all three permits.

The Court next considered whether the ICA erred in remanding the case to the Planning Commission. The ICA stated in its opinion that the trial court failed to recognize the Planning Commission’s public trust duties, and that the Planning Commission was “required to make ‘appropriate assessments and require reasonable measures to protect the water resources,’ to employ a ‘higher level of scrutiny,’ and to place the burden on Kauai Springs to justify its proposed use of water in light of the public trust purposes.” However, the ICA also found that the Planning Commission’s denial of the permits was not based on the appropriate criteria, and remanded the case back to the Planning Commission to consider the application in light of its decision.

Kauai Springs disagreed with the ICA. Kauai Springs asserted that the trial court did recognize the Planning Commission’s public trust duties, however, it was not the trial court’s duty to “define the exact extent” of the Planning Commission’s public trust duties. Rather, Kauai Springs maintained, it was the trial court’s duty to make sure that the Planning Commission had all the necessary information, used reasonable measures, and appropriate assessments. Kauai Springs argued that the Planning Commission’s denial of the permits was “unreasonable, arbitrary, and capricious” because it had all the requisite information. Kauai Springs asserted the ICA’s decision paved the way for agency abuse, because it allowed agencies to issue unreasonable denials and then argue in court that it lacked the requisite information under the “guise of the public trust.”

Alternatively, the Planning Commission argued that the ICA properly remanded the case. It agreed with the ICA that the record lacked evidence on whether Kauai Springs’s existing or proposed use might affect water resources subject to the public trust. The Planning Commission maintained that its process was adequate, and that it properly adhered to its public trust duties throughout the deliberation. The Planning Commission asserted that the reason it denied Kauai Springs’s permit application was because Kauai Springs failed to prove that its use of water was consistent with the public trust.

The Court began its analysis by considering what principles should guide an agency when reviewing a permit for use of a public resource. Hawaii’s Constitution, Article XI section 7, requires the state to “protect, control, and regulate the use of Hawaii’s water resources for the benefit of its people.” Because the public trust “arises out of a constitutional mandate, the duty and authority of the state and its subdivisions to weigh competing public and private uses on a case-by-case basis is independent of statutory duties and authorities created by the legislature.”

Relying on In re Water Use Permits (“Waiahole I”), the Court annunciated three principles to guide agencies in preserving Hawaii’s waters for future generations. First, the Court affirmed the authority of the state to preclude assertions of vested water rights and to reexamine prior uses; pursuant to the public trust, there are no permanently vested rights to use water. Next, the Court held that the public trust creates an affirmative duty of the State to consider and protect the public trust in the planning and allocation of water resources. Finally, the Court held that under the public trust, there is a lack of “absolute priorities”; the State must consider each case independently and weigh competing public and private uses on a case-by-case basis.

The Court then reiterated the four purposes of the water resource public trust doctrine first announced in Waiahole I: (i) maintaining water in its natural state; (ii) protecting domestic water use; (iii) protecting Native Hawaiian and traditional and customary rights; and (iv) reservation of water by the State Water Code. The Court further explained that because private commercial use is not protected by the public trust, applications for the private commercial use of the state’s water should be examined with a “higher level of scrutiny.”

The Court held that this higher level of scrutiny requires state agencies to apply a presumption in favor of public use, enjoyment, and resource protection, and to place an affirmative burden on the applicant to prove that the proposed use is reasonable and beneficial in relation to other public and private uses. To do this, the applicant must demonstrate their actual needs, and show that the proposed use will not harm a public use. If the court or agency determines that private use will cause harm to a protected use, the applicant must then demonstrate that the resulting harm will nevertheless be reasonable and beneficial. This requires an affirmative showing that there is no practicable alternative water source. Finally, if the court or agency determines that the harm is reasonable and beneficial, and there is no alternative water source, the applicant must implement appropriate measures to mitigate the harm.

The Court then considered whether, pursuant to these guidelines, the Planning Commission acted arbitrarily when it denied Kauai Springs’s permit application. First, the Court rejected Kauai Springs’s argument that “the public trust doctrine imposes a duty to assess, but does not empower an agency to deny an application simply because it claims it lacks information within its power to obtain, thus shifting the burden to the applicant.” The Court stated that this was not only appropriate, but was the exact the reason why an agency should deny a proposed use of a public resource. Accordingly, the Court held that it was reasonable for the Planning Commission to require Kauai Springs to demonstrate its legal standing and authority to extract its water.

The Court agreed with the Planning Commission that Kauai Springs’s legal right to extract its water depended on whether the commercial supplier, Grove Farm Company, had the legal authority to sell the water to Kauai Springs. The Court found that the record was devoid of any water purchase agreement, and contained no evidence of Grove Country Farm’s right to make the public trust resource commercially available. Therefore, as part of the Planning Commission’s public trust duties to protect the water resource, the Planning Commission was authorized to reexamine Grove Farm Company’s prior use.

The Court then considered whether the Planning Commission’s demand that Kauai Springs ensure “the proposed use and sale of the water does not violate any applicable law administered by the [Water Commission], the [PUC], or any other applicable regulatory agency” was “unreasonable, arbitrary, or capricious.” The Water Commission was concerned that the water source may need to be modified to accommodate Kauai Springs’s proposed use, and those modifications would require additional permits from the Water Commission. The Court concluded that because the Water Commission raised concerns about specific requirements that may have been applicable to Kauai Springs it was reasonable for the Planning Commission to demand Kauai Springs show that it had complied with any necessary permits and applicable regulations.

Finally, the Court considered whether the case should be remanded to the Planning Commission for further findings. The Court found, contrary to the trial court and ICA’s opinions, that the Planning Commission’s findings of fact and conclusions of law were correct. However, the Court emphasized the necessity of clarity and completeness. The Court stated that “[c]larity in the agency’s decision is all the more essential . . . where the agency performs as a public trustee and is duty bound to demonstrate that it has properly exercised the discretion vested in it by the constitution and statute.” Therefore, the Court remanded the matter back to the Planning Commission for further findings consistent with its opinion.

Accordingly, the Court held that: (i) Kauai Springs assented to the extension of the deadlines for the Use and Class IV permits through its conduct; (ii) the Planning Commission did not deny Kauai Springs’s permits for “unreasonable, arbitrary, or capricious reasons”; and (iii) the case should be remanded to the Planning Commission for further clarity. The Court affirmed the ICA’s decision to the extent it vacated the judgment by the trial court and remanded the case to the Planning Commission.

Recktenwald, C.J., Concurring in Part and Dissenting in Part

Chief Justice Recktenwald concurred with the majority’s decision to the extent that it affirmed the ICA’s decision. Recktenwald dissented because he believed the majority’s approach to the public trust doctrine required permit applicants to prove too much, by requiring applicants to prove they were in compliance with all regulatory processes, including processes applicable to third parties outside of the applicant’s control. He stated that “[t]he public trust doctrine is a centerpiece of this state’s efforts to protect its scarce natural resources. The doctrine imposes significant duties on those who would use water resources, and the government agencies charged with protection of those resources.” Accordingly, Recktenwald argued for a public trust doctrine that starts with an analysis of the statutory or regulatory duties placed on the agency, then examines the additional duties imposed by the public trust doctrine, and finally requires the agency to reasonably assess the applicant’s compliance with processes required by other agencies.


In re SRBA

In re SRBA, Nos. 40974, 40975, 2014 WL 3810591 (Idaho Aug. 4, 2014) (holding that (i) the Snake River Basin Association (“SRBA”) court abused its discretion in defining an issue as basin-wide where it did not promote judicial economy, and (ii) the SRBA court did not abuse its discretion by ruling that the director of the Idaho Department of Water Resources (“IDWR”) may determine when storage water rights are considered “filled”).

This case evolved out of several individual SRBA cases that dealt with the issue of whether storage water rights holders may refill reservoirs, under priority, to account for water released for flood control when junior appropriators have not filled their rights for the first time. The State of Idaho and the Bureau of Reclamation argued that a remark was necessary to authorize storage water right holders to refill after releases of floodwater excess. Storage right decrees already existed without a remark for several irrigation districts across the Snake River Basin, and these districts worried that a remark requirement could negatively affect their storage water rights. Because the issue was so pervasive, the SRBA court combined dockets to adjudicate the issues in a basin-wide proceeding. The SRBA court designated the question of whether “Idaho law require[s] a remark authorizing storage water rights to ‘refill’ under priority, space vacated for flood control” as Basin-Wide Issue 17.

The SRBA court ruled that Basin-Wide Issue 17 was a question of law and would not consider any specific factual scenarios in ruling on the issue, noting that circumstances would differ from reservoir to reservoir. The SRBA court reasoned that it cannot consider specific facts in a basin-wide issue, and a remark is unnecessary because a storage water right cannot be refilled until junior appropriators have satisfied their allotments. The SRBA court did not address when a storage water right is considered filled because such a determination would require the development of a factual record.

The Supreme Court of Idaho (the “Court”) addressed two predominant issues on appeal. The Court first considered if the SRBA court correctly designated whether “Idaho law require[s] a remark authorizing storage rights to ‘refill,’ under priority, space vacated for flood control” as a basin-wide issue. Next, the Court considered whether the SRBA court abused its discretion by declining to define when a storage water right has been filled, leaving that determination to the discretion of the IDWR.

In addressing the first issue, the Court confirmed the SRBA court’s authority to designate a basin-wide issue. SRBA Administrative Order 1 gives the SRBA court the authority to combine cases with similar interests and claims into a basin-wide issue to promote judicial economy. Basin-Wide Issue 17 addressed whether water released for flood control counts towards the storage water right owner’s allotment. That is, the SRBA court sought to clarify whether refilling a reservoir after flood control releases counted as an initial or secondary fulfillment of the water storage right. The SRBA court determined that the question should be addressed exclusively as a matter of law in a basin-wide proceeding, and would not develop a factual record in order to answer it. However, the Boise Project Board, the Surface Water Coalition and others (the “Coalitions”) wanted the SRBA court to rule on when a storage water right is considered filled, not if the storage water right was considered filled under the circumstances articulated in Basin-Wide Issue 17. Fundamentally, the Coalitions never raised the question the SRBA court ultimately answered. Consequently, the Court found that the SRBA court’s designation of Basin-Wide Issue 17 did not promote judicial economy and was therefore made in error.

The Court clarified its first holding by explaining that the SRBA court did not abuse its discretion “in declining to designate the question of whether flood control releases count toward the ‘fill’ of a water right as a basin-wide issue,” but agreed that the question of fill presents a mixed question of law and fact. Because this question requires a factual record, the SRBA court can only address it on a case-by-case basis, and not in a basin-wide proceeding. Whether floodwater release counts towards reservoir fill would be an issue of first impression for the Court to consider, and could have extensive repercussions. The Court declined to issue such an important decision with no alleged injury and without a complete factual record.

Next, the Court ruled that the SRBA court was correct not to address when a storage water right is considered filled because that determination is an administrative function of the IDWR. The Coalitions argued that a storage water right is a property right, and therefore can only be dispensed by decree. Accordingly, they questioned whether the director of the IDWR (“the Director”) was determining property rights that should instead be determined by law.   The Court noted that the Director is required to allocate water rights based on the constitutional principal of beneficial use and according to the prior appropriations doctrine. Idaho Code section 42-602 requires the Director to be highly credentialed and to have at least five years of experience in specific fields including civil or agricultural engineering, geology, or hydrology. Tempered by these high standards, the law also affords the Director a high degree of deference in choosing a methodology to determine when a storage water right has been filled. Because the determination of storage water rights is allocated by law and overseen by a highly qualified officer, the Court found that the Director does not choose to whom the storage water rights belong, but rather to whom the law has allocated those rights. The Court further emphasized that the discretion to determine when those rights have been filled is implicit in the Director’s duty to allocate storage water rights according to the doctrine of prior appropriation.

Accordingly, the Court ruled that the SRBA court abused its discretion in designating Basin-Wide Issue 17 because doing so did not promote judicial economy. However, the Court held that the SRBA court did not abuse its discretion in declining to address the question of when a storage water right is filled, because that duty is reserved to the director of the IDWR.

 

The title image features the Snake River near the Grand Tetons. This image is part of the public domain.


Aransas Project v. Shaw, 756 F.3d 801 (5th Cir. 2014) (per curiam) (holding: (i) The Aransas Project had standing to bring action under the Endangered Species Act (“ESA”); (ii) the district court did not abuse its discretion by declining to abstain from exercising federal jurisdiction; (iii) the district court’s finding that twenty-three endangered whooping cranes died was not clearly erroneous; (iv) the district court erred in excluding the admission of defendants’ survey after trial, but the error was harmless because the district court concluded the survey lacked importance; (v) the district court’s application of the incorrect test for causation was clear error; and (vi) the district court failed to find that a future harm was “certainly impending,” and thus the grant of an injunction was an abuse of discretion).

The Aransas National Wildlife Refuge (“Refuge”) sits adjacent to San Antonio Bay in Texas. The San Antonio and Guadalupe Rivers provide freshwater inflows to this area, also known as the Guadalupe Estuary. The Refuge is the winter home of the Aransas-Wood Buffalo (“AWB”) flock— a flock consisting of approximately 300 birds. The freshwater inflows in the Guadalupe Estuary provide critical habitat for the flock. Texas owns the surface waters of the state and the Texas Commission on Environmental Quality (“TCEQ”) administers the capture and use of those waters through its permitting and regulatory powers.

During the winter of 2008-2009, the Refuge’s biologist recovered four crane carcasses and determined another nineteen missing cranes had died, a claimed loss of twenty-three cranes. Over the previous seventy years, authorities recorded the deaths of only twenty cranes. The whooping crane is an endangered species under the ESA. After the media publicized the crane deaths, a group of concerned citizens formed The Aransas Project (“TAP”), a non-profit dedicated to protecting the whooping cranes’ habitat. TAP sued the TCEQ, pursuant to the ESA’s citizen suit provision, alleging that TCEQ’s actions and omissions in managing the waters of the Guadalupe and San Antonio River Systems had harmed the flock and ultimately caused the death of twenty-three cranes. TAP sought declaratory and injunctive relief that would ensure sufficient water resources for the AWB flock.

TAP alleged a lengthy chain of events leading to liability: (i) TCEQ’s permitting and regulatory practices significantly reduced the amount of freshwater in the estuary; (ii) the reduction in available freshwater increased salinity in the estuary which decreased available food supplies; (iii) the reduction in available food led to emaciation and predation among the cranes; (iv) these conditions combined to cause the deaths of twenty-three cranes in the winter of 2008-2009; and (v) these deaths constituted illegal “takings” under the ESA.

Before trial, the U.S. District Court for the Southern District of Texas (“district court”) granted motions to intervene for the Guadalupe-Blanco River Authority, the Texas Chemical Council, and the San Antonio River Authority (“intervenor defendants”). The district court conducted an eight-day bench trial, took testimony from nearly thirty witnesses, and issued a 124-page opinion concluding that TCEQ’s permitting effected a taking under the ESA. The district court enjoined TCEQ from issuing any new permits, unless required for the public’s continued health and safety, until the agency applied to the U.S. Fish and Wildlife Service (“FWS”) for an Incidental Take Permit (“ITP”). ITPs allow an exception to the ESA’s prohibition on both purposeful and incidental harm and harassment of endangered species. ITPs require the development of a “Habitat Conservation Plan” to “minimize and mitigate” the impacts of incidental takings. TCEQ and the intervenor defendants appealed.

The U.S. Court of Appeals for the Fifth Circuit (“Court”) first addressed whether TAP had standing. On appeal, WDEQ challenged TAP’s standing for the first time. The Court spent little time addressing the issue, concluding that TAP’s allegations satisfied federal requirements for standing; TAP alleged an injury (crane deaths), a theory of causation (regulatory actions resulted in reduced water flows), and future deaths attributable to an ESA violation (continued crane deaths if not corrected).

The Court then discussed whether the district court erred by not abstaining to exercise federal jurisdiction. While the Court reviews an abstention decision under an abuse of discretion standard, it reviews de novo whether the elements of an abstention doctrine were satisfied. Courts may decline to exercise jurisdiction over a particular case, or abstain, if doing so would be prejudicial to the public interest—including cases involving basic issues of state policy that the federal courts should avoid. The Court analyzed five factors pursuant to the Burford abstention doctrine: (1) whether the cause of action arises under federal law; (2) whether the case requires inquiry into unsettled issues of state law or into local facts; (3) the importance of the state interest involved; (4) the state’s need for a coherent policy in that area; and (5) the presence of a special state forum for judicial review.

The Court found that factors one, two, and five weighed against abstention The ESA is a federal law, no “skein of state law” had to be untangled before resolving the federal case, and neither the TCEQ nor the Texas state courts had authority to provide a remedy. With respect to remedy, the Court found: (i) the Texas Water Code expressly prohibited granting water rights for environmental reasons; (ii) TCEQ was likely prohibited from providing water for cranes during an emergency (e.g., a drought); and (iii) Texas law provided no cause of action under which TAP could sue TCEQ in the state courts. The Court considered factor three – the importance of the state interest involved – a tossup. Although Texas had a strong interest in managing its natural resources, especially water, the federal interest in endangered species was equally strong. The only factor the Court found to weigh in favor of abstention was number four, the state’s need for a coherent policy in the management of its finite natural resources. Here, TCEQ administered the Texas Water Code pursuant to a regulatory scheme that balances water rights and stakeholder interests. The Court concluded that “[f]ederal intervention could easily upset that delicate balancing.” After balancing all five factors, the Court concluded the federal courts could avoid entanglement in Texas state law by “treading carefully.” Accordingly, the district court did not abuse its discretion in declining to abstain.

The Court then turned its attention to the district courts’ findings of fact and its imposition of liability upon the state defendants. Chief among its findings of facts, the district court, relying mainly on the Refuge biologists’ testimony, concluded that twenty-three whooping cranes died during the winter of 2008-2009 in the Refuge. The biologist made this determination by conducting fly-overs of the Refuge. He noticed nineteen known birds missing from their usual, territorial positions. Additionally, he found four crane carcasses. Because postmortem examinations of two of these birds indicated emaciation as a cause of death, the biologist concluded that twenty-three cranes died during the winter of 2008-2009. He opined that lower water levels adversely impacted the flock’s habitat. Despite the district court’s finding that the biologist’s opinions were reliable, the Court noted many problems with the methods and data used to conclude that twenty-three cranes had died. Despite this, the Court concluded that the district court’s finding that twenty-three cranes had died was not clearly erroneous.

The ultimate issue confronting the Court was whether TCEQ’s issuance of permits to take water from the Guadalupe and San Antonio Rivers was the proximate cause of the twenty-three whooping crane deaths during the winter of 2008-2009. In order to affix liability for a taking under the ESA, the effect of the defendant’s actions must be foreseeable. The ESA does not impose strict liability. The Court noted that causation requires more than mere fortuity; it cannot rest upon “remote actors in a vast and complex ecosystem.” The Court emphasized that the requirement of foreseeability acts as a limitation upon liability where, even if the links in the chain of causation can be connected, at some point liability becomes too remote.

The Court cited several cases where a sufficiently close connection existed between certain regulatory acts and violations of the ESA to satisfy the foreseeability test. In one case, the U.S. Forest Service permitted the removal of an excessive number of trees that were the home for red cockaded woodpeckers. In another case, right whales were “taken” because a state agency authorized fisherman to use gillnets and lobster traps in certain areas, and these devices were known to cause harm to the whales. In each of these cases, the government agency was held liable for a “direct” taking under the ESA.

In this case, the Court took issue with the district court’s finding that “‘[p]roximate causation exists where a defendant government agency authorized the activity that caused the take.’” The Court found the district court’s opinion lacking in findings of fact sufficient to show causation and prove liability under the ESA, and chastised the district court for finding causation “without even mentioning concepts of remoteness, attenuation, foreseeability, or the natural and probable consequences of actions.” Moreover, the Court found the district court expressly disregarded other circumstances that clearly weighed against a finding of causation. Chief among these other circumstances was a drought during the winter of 2008-2009 that experts considered an “outlier” among Texas’ cyclical drought conditions. Other variables included constantly changing weather, tides, and temperature, as well as varying degrees of water use by permittees. Ultimately, the Court concluded that a “fortuitous confluence” of “multiple, natural, independent, unpredictable and interrelated forces” caused the deaths of the whooping cranes in the Refuge. Calling this set of circumstances “the essence of unforeseeability,” the Court found causation lacking as a matter of law and vacated the district court’s finding of liability against the state defendants.

Last, the Court addressed the district court’s grant of an injunction. The Court held the district court erred in three ways in granting injunctive relief. First, the district court improperly based injunctive relief upon an improper proximate cause analysis. Hence, the Court’s vacation of the state defendants’ liability “commanded” the quashing of the injunction. Further, assuming arguendo that TCEQ’s actions did proximately cause the crane deaths, the district court erred in applying a “relaxed” standard for granting injunctions under the ESA and by finding a real and immediate threat of future injury to the cranes.

The district court had determined that a “relaxed” standard existed for granting injunctions under the ESA. The Court noted that, while this is true in that the balance of equities favor protecting wildlife under the ESA, an injunction still requires a showing of “certainly impending” future harm. Additionally, the Court found that even if the district court had applied the correct standard, it did not make sufficient factual findings to support that conclusion. The Court noted that, after 2008-2009, substantial evidence existed to the contrary, including: no evidence of unusual deaths, no evidence of dangerous salinity levels, no evidence of deficient blue crabs or wolfberries, no evidence of lack of a drinking water shortage in the Refuge, and no evidence of emaciated birds or extreme behavioral patterns. The Court concluded that “[i]njunctive relief for the indefinite future cannot be predicated on the unique events of one year without proof of their likely, imminent replication.”

Accordingly, the Court reversed the district court’s finding that TCEQ caused the whooping crane deaths and denied TAP’s request for injunctive relief.

 

The title picture features the Aransas National Wildlife Refuge and is licensed to Larry D. Moore under a Creative Commons Attribution-Sharealike 3.0 License. The owner of the image does not endorse this blog.