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.


Joe McClaren Ranch, L.L.C. v. Neb. Pub. Power Dist. (In re 2007 Admin. of Waters of the Niobrara River), 851 N.W.2d 640 (Neb. 2014) (holding that: (i) the legislative history of the statutes governing the procedures by which the Nebraska Department of Natural Resources cancels water rights was not relevant to the issues of common law abandonment or statutory forfeiture, but its improper admission by the Department was harmless; (ii) NPPD’s failure to call for administration of the Niobrara River prior to 2007 was not evidence of an intent to abandon its water rights; (iii) forfeiture of water appropriations through nonuse is governed by the period of limitations relating to real estate, and the Department’s factual findings demonstrated that NPPD did not statutorily forfeit its appropriations; (iv) the Department’s policy of allowing senior appropriators to place a call for the full amount of its water despite the existence of subordination agreements is not arbitrary, capricious, or unreasonable; and (v) the Department’s determination that it conducted a futile call analysis where appropriate was not arbitrary, capricious, or unreasonable).

Joe McClaren Ranch (“McClaren”) applied for an appropriation to divert water from the Niobrara River in 2006. Weinreis Brothers Partnership (“Weinreis”) held five water rights with priority dates between 1969 and 2006. The Nebraska Public Power District (“NPPD”) held three water appropriations for hydropower generation at its Spencer plant with priority dates of 1896, 1923, and 1942. The NPPD’s three appropriations for the Spencer plant amounted to a total water discharge of 2,035 cubic feet per second (“cfs”). The Spencer plant is located approximately 145 miles downstream from the McClaren and Weinreis properties.

In early 2007, the water resources manager at NPPD placed a call for administration on the Niobrara because he learned that the Nebraska Department of Natural Resources (“Department”) was not proactively administering the portion of the Niobrara near Spencer. On April 30, 2007, the Department took a measurement roughly ten miles upstream from the Spencer plant showing a discharge of only 1,993.73 cfs.

On May 1, 2007, the Department issued closing notices to approximately 400 junior appropriators, including McClaren and Jack Bond, Weinreis’s successor in interest, directing them to cease water diversions from the Niobrara. The junior appropriators filed a request for a hearing with the Department. After the hearing, the Department found that the administration of the Niobrara was proper.

The junior appropriators appealed to the Nebraska Supreme Court (“Court”). The Court reversed and remanded, finding that the Department had improperly excluded the issues of abandonment and statutory forfeiture from nonuse. After the second hearing on remand, the Department again found that the administration of the Niobrara was proper, and NPPD had not abandoned or statutorily forfeited its appropriations. The junior appropriators appealed.

On appeal, the Court first considered whether the Department erred by relying on evidence from the hearing officer, who took judicial notice of the legislative history L.B. 302, an amendment to Neb. Rev. Stat. § 46-229. First, the Court noted that the Administrative Procedure Act permits agencies to take judicial notice of legislative history. For a court or agency to inquire into a statute’s legislative history, the statute must be open to construction. The Court had previously held that L.B. 302 is unambiguous; that by its plain language, it addresses only the procedure by which the Department must abide in order to terminate an owner’s appropriation right and does not address the common law theories of abandonment or nonuse. Therefore, the legislative history was irrelevant to the issues being considered on remand. However, because no relevant evidence was excluded, and the Department made findings of fact supported by other relevant evidence, the Court concluded that the decision to admit the legislative history was harmless.

Next, the Court considered whether the Department erred in finding that the junior appropriators failed to prove NPPD abandoned its appropriations in whole or in part. The junior appropriators argued that NPPD failed to call for administration of the river, or enter into more subordination agreements before 2007, demonstrating intent to abandon its appropriations. The Court found no Nebraska case law establishing that a failure to call for administration demonstrates intent to abandon. Instead, the Court found persuasive a Colorado Supreme Court case, which held that there is no requirement that a senior appropriator must place a call for administration of the river in order to effectuate its water rights. The Court explained that the emphasis is on whether there is evidence demonstrating intent to abandon a right, rather than on whether there is evidence showing that the user acted to preserve its rights. In finding that NPPD did not intend to abandon its appropriations, the Department noted that the Spencer plant had been in operation since 1927; NPPD had spent a significant amount of funds to staff, operate, and maintain the facility; and the water resources manager at NPPD was under the assumption that the Niobrara was proactively administered by the Department.

The Court then considered whether the Department erred in finding the junior appropriators failed to prove NPPD statutorily forfeited its appropriations in whole or in part. The Department applied the cancellation proceedings provided for in Neb. Rev. Stat. §§ 46-229 through 46.229.05. The Court stated that the issue on appeal was common law nonuse, which is governed by Neb. Rev. Stat. § 25-202, the period of statutory limitations relating to real estate. Under § 25-202, a lack of beneficial use for over ten years may result in the loss of an appropriation. The Court concluded that though the Department relied on the incorrect statute, it made factual findings that did not support a finding of nonuse. For example, in 2006 NPPD used its full 2,035 cfs. Based on the factual findings, the Court concluded that there was no ten-year nonuse period and NPPD did not statutorily forfeit its appropriations.

The Court next considered whether the Department erred in issuing closing notices without taking into account the subordination agreements and express limitations in NPPD’s appropriations. A subordination agreement allows junior appropriators to pay a fee to the senior appropriator in exchange for the right to continue to divert water out of priority. The junior appropriators argued that the Department’s policy of allowing a senior appropriator to place a call for its full amount of water, while having subordination agreements with junior appropriators, allows senior appropriators to collect both money and water. However, a field office supervisor for the Department testified that NPPD’s subordination agreements were taken into account, and the Department’s policy was to not send closing notices to junior appropriators who have a subordination agreement. Therefore, “a senior appropriator is not allowed to simultaneously enforce its right against, and collect compensation from, the same junior appropriator.” Accordingly, the Court held that the Department’s policy was not arbitrary, capricious, or unreasonable, and the Department was entitled to deference for its technical expertise in this area.

Finally, the Court considered whether the Department erred in failing to conduct a futile call analysis. The junior appropriators asserted that it is the duty of the administrative officers, prior to issuing closing notices, to determine whether or not a usable amount of water can be delivered. In this case, the evidence showed that the Department did not conduct a futile call analysis because the Niobrara is a “wet river.” The Court held that the Department is entitled to deference in this area, and the Department’s determination that it conducted futile call analyses where appropriate was supported by competent and relevant evidence.

Accordingly, the Court upheld the Department’s determination that administration of the Niobrara was proper, and that NPPD had not abandoned or statutorily forfeited its appropriations in whole or in part.

Connolly, J., Dissenting.

Justice Connolly argued that the Niobrara has too many appropriations, and the Department’s method of administration is fundamentally flawed. Connolly noted that, based on recorded historical flows, the Department would be able to shut down junior appropriators for about 97 percent of the time from July to January, and almost 87 percent of the time from February to June. He argued that to permit NPPD to shut down these junior appropriators in 2007, after not having done so for sixty years, would be unjust and contrary to the nature of its permits.

Connolly also argued that NPPD had forfeited the right to demand 550 cfs under its 1942 appropriation. NPPD’s 1942 appropriation had a limitation in it allowing for water to be denied during times of scarcity. Connolly noted that since 1942 the Department had approved over 400 new surface appropriations. NPPD failed to object to the majority of the applications, despite its knowledge that the river was over appropriated and of the conditional clause contained in its permit. Accordingly, Connolly argued that NPPD’s acquiescence to the Department’s activities should have constituted a forfeiture of its right to demand the 550 cfs under the 1942 appropriation.

 

The title picture features the Niobrara River Norden Chute in Nebraska. The owner of this image released it to the public domain. 


Telford Lands LLC v. Cain, 303 P.3d 1237 (Idaho 2013) (holding that (i) the servient landowners were not denied due process, (ii) there was reasonable necessity for condemnation of an easement, (iii) the beneficial use of water allowed irrigators to exercise eminent domain, (iv) the required good faith effort to purchase property must only be made prior to filing a lawsuit, and (v) the district court erred in dismissing the servient landowners’ counterclaim for trespass).

This case involved three ranchers: Telford Lands LLC (“Telford Lands”), Mitchell D. Sorensen, and PU Ranch (collectively, “the Ranchers”). In 2009, the Ranchers collectively constructed pipelines to carry water from their respective wells to a ditch in an unused portion of the Moore Canal, which conveyed the water to the Ranchers’ farmlands. One of the pipelines, disputed here, crossed a one-hundred-foot-wide strip of land owned by Donald and Carolyn Cain (“the Cains”). The Ranchers contended that the Cains gave them oral permission to run the pipeline across their property, but the Cains protested the pipeline’s location in August of 2009. After unsuccessful attempts to negotiate a purchase of an easement, in May of 2010 the Cains dug up the pipeline, punctured a hole in it to disable its flow, and sent a letter to the Ranchers informing them of their actions. Thereafter, the Ranchers filed an action against the Cains seeking damages, condemnation of an easement across the Cains’ property for the pipeline, and specific performance pursuant to the Cains’ oral agreement. The Cains subsequently filed an answer and a counterclaim for trespass.

The Ranchers filed a motion for partial summary judgment regarding the condemnation claim, which the Cains matched with their own motion for summary judgment seeking the dismissal of all of the Ranchers’ claims. The Seventh Judicial District of Butte County (“district court”) granted the Ranchers’ motion for summary judgment regarding the condemnation claim, and dismissed the Ranchers’ remaining claims. The Cains appealed.

On appeal, the Supreme Court of Idaho (the “Court”) first reviewed whether the Cains were denied due process of law. The Cains argued that they were denied due process of law when the Ranchers constructed a pipeline across their property before paying just compensation. The Cains further argued that because the Ranchers were in possession of the Cains’ land before initiating a condemnation proceeding, the district court should have granted the Cains’ trespass claim. The Court, however, concluded that because the Cains did not raise the issue of due process in district court but waited until after the district court entered a judgment for condemnation, the Cains thereby waived their right to raise the issue.

Second, the Court reviewed whether the district court erred in holding that there was a reasonable necessity for condemning an easement. The Cains argued that Telford Lands and PU Ranch voluntarily gave up their respective transport agreements and should not be able to create the necessity for condemning an easement by giving up the alternative means for transporting their water; that Mr. Sorensen should not be able to condemn an easement where another method of transporting his water was available; and finally, that the Ranchers’ transport agreements for other water rights indicated that the Moore Canal was a reasonable and available alternative to the disputed pipeline for transporting the water. The Court held that the Moore Canal was not reasonably adequate or sufficient for the Ranchers’ conveyance needs, and that the Idaho Constitution, article 1, section 14, therefore authorized the taking of private land for public use. In so concluding, the Court validated the district court’s determination that the Ranchers were failing to receive their full proportionate share and that the disputed pipeline would eliminate loss. The Court noted that the Ranchers’ use of the Moore Canal would result in a conveyance loss ranging from 35-40 percent and that the disputed pipeline did not have a material effect on the Cains’ use of their property. Therefore, the Court concluded that the Ranchers’ utilization of reasonable measures to reduce conveyance loss was in support of the State of Idaho’s strong policy to secure the maximum use and benefit of its water resources. The Cains argued that the district court ignored conditions placed on Telford Lands’s and PU Ranch’s water rights requiring them to transport water via the Moore Canal and, according to the Cains, displaying an already-existing means to transport water from the Ranchers’ wells. The Court upheld the district court’s finding that the condition’s language was merely for descriptive purposes and had no binding effect on the Ranchers’ condemnation claim.

Third, the Court reviewed whether the Ranchers were entitled to exercise the right of eminent domain while their lands were under irrigation. The Court found no language, in the case the Cains cited or in any constitutional provisions or statutes, supporting the Cains’ desired restrictions. Pursuant to Idaho law, the Court limited the issue to whether the Ranchers would put the water to a beneficial use after it traveled through the disputed pipeline. Finding that the Ranchers would put the water to beneficial use, the Court rejected the Cains’ argument and held that the Ranchers were entitled to exercise eminent domain.

Fourth, the Court reviewed whether the Ranchers’ complaint was facially deficient. The Cains argued that the Ranchers’ complaint was deficient because it did not contain a legal description of the property and it did not adequately allege a good faith attempt to purchase the property. As to the first argument of deficiency, the Court noted that the Cains did not raise this issue until after the district court’s judgment and therefore declined to address it. As to the second argument of deficiency, the Cains argued that good faith negotiations to purchase must have been made prior to the pipeline’s installation, and that the Ranchers’ construction of the pipeline before obtaining a determination and executing a payment of just compensation made their complaint deficient. The Court, however, pointed to the Idaho Code section 7-707(7), which states that good faith negotiations must take place only prior to the filing of the lawsuit. After the Cains were not able to present authority suggesting the contrary, the Court rejected the Cains’ argument and determined the Ranchers’ complaint was not facially deficient.

Fifth, the Court reviewed whether the district court erred in failing to dismiss Telford Lands as a party. The Cains argued that Telford Lands lacked standing to pursue a claim for condemning a right-of-way across their property. The Court found that the district court properly dismissed the Cains’ motion to dismiss Telford Lands as a party to the condemnation claim. In so concluding, the Court upheld the district court’s finding that Telford Lands shared in costs with the other Ranchers, Telford Lands’s well produced the most water and was necessary to produce a sufficient flow, and Telford Lands had a two-year lease to use water from the Old Moss Well, which flowed through the disputed pipeline. On appeal, the Cains contended that temporary leaseholders do not have the private power of eminent domain. The Court cited Idaho Constitution article 1, section 14, in finding that an easement for temporary use can be condemned. However, the Court noted that easements for temporary use must be limited to the time that the party can use the land burdened by the condemned easement. Because the district court’s judgment did not limit the right of Telford Lands to use the disputed pipeline only for the duration of its two-year water lease, the Court remanded this issue.

Lastly, the Court reviewed whether the district court erred in dismissing the Cains’ counterclaim for trespass. The Court noted that there was conflicting evidence as to whether the Ranchers installed the disputed pipe with the Cains’ permission. There was also nothing in the record to suggest that the Cains intended to abandon the claim, and the Ranchers never addressed the district court’s dismissal of the Cains’ counterclaim. The Court therefore vacated the district court’s dismissal of the Cains’ counterclaim and remanded the case for further proceedings regarding this issue.

Accordingly, the Court vacated and remanded the portions of the district court’s judgment that dismissed the Cains’ counterclaim and provided Telford Lands with a perpetual easement, but affirmed the remainder of the judgment granting the condemnation of an easement across the Cains’ property.

The title image is a file created by an employee of the United States Department of Agriculture as part of an official duty and as such is part of the public domain. The USDA does not endorse this blog. 

 


Noble v. Dep’t of Fish & Wildlife, 326 P.3d 589 (Or. 2014) (holding that the Department of Fish and Wildlife implausibly interpreted the fish passage rule, which requires that fishways provide fish passage at all flows within the design streamflow range, and erroneously decided that it was unnecessary to calculate the design streamflow range for channel-spanning fishways).

Property owners (“Petitioners”) expended significant resources improving fish habitat on their portion of a stream feeding into Beaver Creek, which historically supported cutthroat trout and other migratory fish. Petitioners challenged the Oregon Department of Fish and Wildlife’s (“ODFW”) approval of “channel-spanning fishways” associated with two dams downstream from their property. The dams at issue were constructed long ago, without any water rights or permits, and obstructed the stream, creating small ponds. The dam owners later obtained permits through the state Water Resources Department (“WRD”) allowing them to store up to one acre-foot of water during certain months of the year. The permits required that: (i) the owners pass all live flow outside of the defined storage season; (ii) no water be appropriated for any out of reservoir uses, or for the maintenance of water levels or fresh water conditions; and (iii) the owners install outlet pipes to evacuate water to satisfy prior downstream water rights. Additionally, the dam owners were required to provide adequate fish passage as determined to be necessary by ODFW.

The dam owners, having committed to providing year-round fish passage, installed channel-spanning fishways, which were subsequently approved by ODFW. Channel-spanning fishways provide fish passage only when water is moving over the top of the dam. Petitioners sought reconsideration of ODFW’s fishway approvals.

Or. Rev. Stat. § 509.585(2) prohibits the construction or maintenance of any artificial obstruction across “waters of [the] state that are inhabited, or historically inhabited, by native migratory fish without providing passage” for those fish. Or. Admin. R. 635-412-0035(2)(a) requires that such fishways provide fish passage at all flows within the design streamflow range; meaning the entire range of flows within the obstructed stream, except the highest and lowest five percent. However, ODFW did not calculate the stream’s “design flow range,” or determine when fish passage was required, prior to approving the fishways. ODFW determined that it was unnecessary to calculate a design flow range because the fishways used the entire flow of the stream and provided fish passage whenever water flowed past the dam. The Petitioners argued that this approach did not account for water leaving the ponds as a result of evaporation, seepage, or the evacuation of water through the outlet pipes. ODFW argued that these waters were not in the stream and, thus, would not be considered “streamflow.”

After a hearing, the administrative law judge determined that ODFW had complied with all applicable statutes and rules in approving the fishways. ODFW affirmed the administrative law judge’s conclusion and issued a final order announcing that “fish passage is required ‘year-round’ only where there is adequate flow to allow migration through the fishways.” Further, the agency concluded that “streamflow” meant only that water which passed over the dams and did not include water lost to evaporation, seepage, or evacuation.

Upon judicial review, the Court of Appeals determined that ODFW plausibly interpreted the terms “year-round fish passage” and “streamflow,” rejected the Petitioners’ argument that ODFW’s interpretations were inconsistent with Or. Rev. Stat. § 509.585(2), and affirmed ODFW’s final order. The Supreme Court of Oregon (“Court”) accepted the Petitioners’ petition for review to consider ODFW’s interpretation and application of its own rules.

To resolve the drafters’ intent and interpret an administrative rule, the Court considers the text of the rule and the rule’s regulatory and statutory context. According significant deference to the agency’s interpretation, the Court is required to affirm the agency’s interpretations so long as it constitutes a “plausible” reading of the rule.

The Court began its analysis by interpreting the meaning of Or. Admin. R. 635-412-0035(2)(a), which requires that fishways “provide fish passage at all flows within the design streamflow range.” The Court first addressed ODFW’s final order assertion that the definition of “design streamflow range” limits the agency’s calculation of streamflows to the period that native migratory fish require fish passage. Because the dam operators in this case chose to provide year-round fish passage, the Court concluded that a determination as to when fish passage was required was irrelevant.

The Court then addressed Petitioners’ argument that dam owners must provide “year-round fish passage” at all flows in the stream—not the fishway—falling within the design streamflow range. ODFW construed the phrase “year-round fish passage” to mean only that the channel-spanning fishway structure must always be “on,” making fish passage available whenever there was enough water flowing over the dam, within the fishway, to allow for fish migration. ODFW asserted that channel-spanning fishways provide fish passage “as a matter of law” whenever sufficient streamflow exists for fish to migrate. However, as Or. Admin. R. 635-412-0035(2)(a) was adopted with traditional diversion-style fishways in mind, as opposed to channel-spanning fishways, the Court determined that the phrase “year-round fish passage” must have a meaning that was plausible within that context. Traditional fishways were not always “on,” but operated as a result of purposeful diversion of water into the fishway. Thus, the Court determined that, when ODFW adopted the rule, it intended “year-round fish passage” to mean fish passage throughout the year, whenever the flow “within the stream” falls within the “design streamflow range.”

Having resolved the proper meaning of “year-round fish passage,” the Court turned its attention to ODFW’s interpretation of the term “streamflow.” ODFW had not promulgated a definition of the term “streamflow,” but had defined the terms “stream” and “channel,” both of which contemplate waters moving within a defined bed. ODFW argued that, in the case of channel-spanning fishways, the “stream” is the water that flows over the dam. This does not include water stored behind the dam that later evaporates, or water that is released downstream through outlet pipes, because these waters do not move within a defined bed. In evaluating the plausibility of ODFW’s interpretation, the Court looked to the rule’s context and contemplated the mandate, set forth in Or. Admin. R. 635-412-0020(1), which states that “[n]o person shall construct or maintain any artificial obstruction across any waters of this state that are inhabited, or were historically inhabited, by native migratory fish without providing passage for native migratory fish.” The Court also considered Or. Admin. R. 635-412-0005(18), which provides that the “fish passage” required by Or. Admin. R. 635-412-0020(1) is passage that meets the biological/life cycle needs of historically present native migratory fish.

The Court determined that, under ODFW’s interpretation, where “streamflows” would only include water flowing over the dam, the necessity for providing fish passage would be determined only by the height of the dam and configuration of outlet pipes, and not by the biological needs of the fish. Applying ODFW’s definition, a high dam would meet the requirements of the fish passage rule if all outflow passed through the outlet pipes and no water passed over the dam at all. The Court found that ODFW’s interpretation of “streamflows” conflicted with the requirement that operators provide fish passage that meets the biological and life cycle needs of fish and, therefore, ODFW’s interpretation was implausible. Recognizing that ODFW might argue that its approach to “design streamflow range” requirements differed for large dams with fish ladders, the Court noted that ODFW was free to engage in proper rulemaking procedures to issue different rules for various categories of dams and fishways. However, until it did so, the agency was bound by the promulgated rules.

The Court next considered ODFW’s argument that its interpretation was necessitated by conflicting statutory obligations. ODFW argued that its interpretation struck a balance between its obligation under the fish passage statute, and its obligation to protect the right of property owners to maintain small ponds on their property, even where dams, which might interfere with fish passage, created those ponds. The Court noted that the statutes referred to by ODFW created such rights only so long as they did not injure other water rights or existing fish resources. Further, the Court determined that, as the right of property owners to maintain small ponds did not conflict with the requirement that such artificial obstructions provide fish passage, these statutes did not create conflicting obligations on the part of ODFW.

Lastly, the Court considered ODFW’s contention that, because the authority to control the existence and design of dams was delegated to WRD, it must accept the existence and configuration of any WRD-permitted dam. ODFW argued that it had no authority to regulate when water flows through the dam’s outlet pipes, and therefore it must consider that water unavailable for fish passage and base its fish passage requirements on only the “streamflow” that passes over the dam. The Court, unpersuaded by this argument, pointed out that ODFW really has “no control over any aspect of streamflow,” and determined that this did not relieve the agency of its duty to require dam owners to provide fish passage within a “design streamflow range.”

Accordingly, the Court concluded that ODFW implausibly interpreted Or. Admin. R. 635-412-0035(2)(a). And because ODFW relied upon this interpretation as the basis for its determination not to calculate the design streamflow range, the Court held that the agency’s determination was erroneous. The Court reversed the decision of the Court of Appeals and the Final Order on Reconsideration of the ODFW, and remanded the case back to ODFW to determine the design streamflow range and determine whether the fishways in question provide passage at all flows within that range during the period of time that ODFW determines fish passage is required.

 

The title picture is one view of Beaver Creek. This image is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License to M.O Stevens who does not endorse this blog.