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

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

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

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

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

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

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

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


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

ONRC Action v. U.S. Bureau of Reclamation, 798 F.3d 933 (9th Cir. 2015) (holding that the district court properly granted summary judgment in favor of the Bureau of Reclamation because the two water sources at issue were not “meaningfully distinct” and did not require the governmental entity to obtain a permit under the Clean Water Act).

In 2012, ONRC Action, an Oregon-based environmental group, filed a complaint in the United States District Court for the District of Oregon contending that the Bureau of Reclamation (“Bureau”) discharged pollutants from the Klamath Straits Drain (“KSD”) into the Klamath River without a permit, in violation of the Clean Water Act (“CWA”). The Bureau filed a motion for summary judgment and ONRC Action filed a cross-motion for partial summary judgment. A magistrate judge issued a report and recommendation in favor of the Bureau because of the Water Transfers Rule, which the Environmental Protection Agency (“EPA”) adopted through regulation. The district court adopted the magistrate’s report and recommendation finding summary judgment in favor of the Bureau and denying ONRC Action’s motion for partial summary judgment. ONRC Action appealed to the Ninth Circuit Court of Appeals (“Court”).

In 1905, Congress authorized the Klamath Irrigation Project (“Project”) to provide irrigation to approximately 210,000 acres of land in Oregon and California through a system of dams, pumps, drains, tunnels, and canals. The Project draws water from the Klamath River and Upper Klamath Lake, and eventually conveys the water from Lower Klamath Lake back into the Klamath River through the KSD. In the early 20th Century a natural waterway called the Klamath Straits connected the Lower Klamath Lake and the Klamath River. A local railroad severed the Klamath Straits in 1917, but the Bureau restored flow in the 1940s when it created the KSD. The KSD includes two pumping stations that keep water flowing within a certain operating range; however, the pumps are not always active. The KSD generally follows the historic pathway of the Klamath Straits, with only a slight deviation passing through marshland that acted as a historical hydrological connection between the water bodies.

To resolve whether the district court correctly granted summary judgment in favor of the Bureau, the Court looked to recent Supreme Court precedent in determining whether Lower Klamath Lake and Klamath River were “meaningfully distinct” water sources. The Court cited Los Angeles County Flood Control Dist. v. Natural Resources Defense Council (“L.A. County”), where the Supreme Court held that pumping water between different parts of a water body is not a discharge of pollutants under the CWA. The Supreme Court went on to add that a water transfer is a discharge of pollutants only if the bodies of water are “meaningfully distinct.” As a result of the Supreme Court’s holding in L.A. County, the Court did not rule on whether the Water Transfers Rule applied to the KSD discharge, nor whether the rule was within the EPA’s authority.

Finally, the Court compared the KSD-Klamath River transfer to L.A. County and South Florida Water Management District v. Miccosukee Tribe. Like the riverbed in L.A. County, the KSD is an improved version of a natural waterway that previously existed. Further, the water that the KSD transfers into the Klamath River originated in that river. The last point the Court made is that if the Bureau removed the pumps and headgates it placed in the 1940s the Klamath Straits would convey water between the Klamath River and Lower Klamath Lake, finalizing the argument that the waters are not meaningfully distinct. The Court emphasized this point because whether the CWA required the Bureau to obtain a permit turned on whether the two water bodies were meaningfully distinct.

Accordingly, the court affirmed the summary judgment in favor of the Bureau.

Featured image is of the Klamath River in California.  The image is part of the public domain.

Alaska Eskimo Whaling Comm’n v. U.S. Env’t Prot. Agency, 791 F.3d 1088 (9th Cir. 2015) (holding the Clean Water Act neither requires the EPA to satisfy each of the criteria in the statute when issuing an oil exploration waste discharge permit, nor determine reasonable alternatives to on-site disposal of wastes, and that the Clean Water Act does not require the EPA to incorporate the Alaska Eskimo Whaling Commission and oil companies’ agreed migrating measures into discharge permits).

The Alaska Eskimo Whaling Commission (“AEWC”) represents several native Alaskan villages engaged in subsistence hunting of bowhead whales in the Beaufort Sea. The AEWC challenged a wastewater discharge permit (“Permit”) that the Environmental Protection Agency (“EPA”) issued to oil exploration companies. The Permit authorized discharge of thirteen waste streams into the Beaufort Sea. The Permit mandated limitations and monitoring requirements, which barred discharge during the fall bowhead whale-hunting season. Despite these measures, the AEWC claimed that the EPA failed to adequately consider how the authorized discharges would impose on subsistence communities’ fall whale hunt. The AEWC contended that the discharges would divert the whales further from their migratory routes, making the hunt less productive and more dangerous.

The United States Court of Appeals for the Ninth Circuit (“Court”) had jurisdiction to review the Permit, in accordance with the National Pollutant Discharge Elimination System (“NPDES”) provisions within the Clean Water Act (“CWA”). AEWC petitioned the Court to remand the Permit to the EPA for further proceedings leading to additional restrictions.

The Court reviewed the action under the arbitrary and capricious standard of the Administrative Procedure Act, which generally states that the EPA’s action is presumed to be valid and must be affirmed if a “reasonable basis” exists for its decisions.

The EPA produced three documents to explain its decision: (i) the Response to Comments, which included all the comments the EPA received from the community when drafting the Permit; (ii) its Ocean Discharge Criteria Evaluation (“ODCE”); and (iii) its Environmental Justice Analysis.

In the Response to Comments, the EPA wrote that non-contact cooling water would not cause an unreasonable degradation to the marine environment because its analysis indicated the discharge’s temperature would dissipate within “100 meters of the discharge location.” In the ODCE, the EPA stated that authorized discharges would dissipate and dilute to “approximately 600:1 at 100 meters from the discharge point.” However, the day before oral argument, the EPA submitted a letter to the Court that acknowledged a mistake in the record, in which the model it cited in support of its statements did not include non-contact cooling water, but actually referred to drilling-related effluents.

Faced with this discovery, the Court remanded to the EPA to reconsider its determination that non-contact cooling water discharge would not cause “unreasonable degradation of the marine environment,” and to submit specific evidence regarding the effects of that discharge on the bowhead whale migration.

The AEWC next argued that the EPA failed to base its decision on two considerations listed in the CWA for determining degradation of marine waters. The Court determined that the CWA set forth considerations that the EPA must follow when “promulgating its own regulations, not the criteria that EPA must apply to each permitting decision it makes.” The Court concluded that those criteria did not apply to this case.

Finally, the Court weighed whether the EPA’s application of its regulatory criteria was arbitrary or capricious. To begin this inquiry, the Court examined 40 C.F.R § 125.123 that provides criteria under which the EPA issues discharge permits. Paragraph (a) of the statute states that “[i]f the director on the basis of available information . . . determines prior to permit issuance that the discharge will not cause unreasonable degradation of the marine environment after application of any necessary conditions . . . he may issue an NPDES permit containing such conditions.”

In support of its position, the AEWC first contended that paragraph (c) of the statute applied to this case. That paragraph stipulates that the EPA must determine there were no other reasonable alternatives other than on-site disposal of materials. However, the Court held that there was no evidence in the record, nor in the regulations, to support the claim that paragraph (c) applied to this proceeding.

Second, the AEWC argued the evidence did not support a finding that discharges other than non-contact cooling water will not cause an “unreasonable degradation of the marine environment.” The AEWC’s challenge of the EPA’s evidentiary analysis was based on two CWA criteria: i) the potential impact the discharge will have on human health; and ii) “[s]uch other factors relating to the effects of the discharge as may be appropriate.”

The Court disagreed with the AEWC, holding that the record was “replete with evidence” that the EPA fully considered the AEWC’s concerns and that it considered the CWA’s criteria in making its determination. Therefore, the Court held that the EPA was not arbitrary or capricious in issuing the Permit.

Third, the AEWC argued that the EPA did not provide a rational explanation of how the EPA’s monitoring program would prevent conflict with subsistence use and that the EPA acted arbitrary and irrational in relying on such monitoring programs. Again, the Court disagreed with the AEWC. It found that the detailed description of the monitoring program included requirements for monthly monitoring, post-drilling reports, and ongoing monitoring of marine mammal deflection during discharges. Based on these requirements, the Court held there was no basis for concluding that the EPA’s design and implementation of the monitoring program was arbitrary or capricious.

Finally, the AEWC contended that the EPA should adopt the same mitigation measures that the National Marine Fisheries Services (“NMFS”) adopted. These are the same measures the AEWC, Shell Gulf Oil of Mexico, and Shell Offshore, Inc. agreed to in a separate Conflict Avoidance Agreement. The Court held that the EPA was not required to adopt those terms because the AEWC identified no legal authority requiring such measures. The Court found no measures that would mandate the EPA to incorporate the NMFS mitigation measure or the Conflict Avoidance Agreement into the Permit.

Accordingly, the Court remanded to the EPA for a determination of whether the discharge of non-contact cooling water would cause an “unreasonable degradation of the marine environment,” and denied the petition in all other respects.

Featured image is from 1899 and is of whalers on the Arctic Ocean.

In the Matter of Water Rights, 361 P.3d 392 (Colo. 2015) (holding that: (i) the Colorado Ground Water Commission had jurisdiction to make the initial determination of whether the water at issue was designated ground water; and (ii) a portion of the storm runoff water at issue was “designated ground water” under the Groundwater Management Act, rather than surface water).

The Colorado Ground Water Commission (“Commission”) held hearings in 1967 and 1968 in order to resolve the proper designation of a ground water basin in the Upper Black Squirrel Creek Basin (“Basin”). It found that “‘virtually all’ of the water in the basin was underground water, and water flowed on the surface only ‘during and immediately following’ periods of heavy rainfall from summer storms.” The water was also not adjacent to a continuously flowing natural stream and would never reach a tributary system. As such, the Commission determined that the Basin qualified as a designated ground water basin, and entered its findings in a final order (the “1968 Order”).

The Meridian Service Metropolitan District (“Meridian”) proposed a development in the Basin area. Its development would result in an increase in surface water runoff due to the creation of impermeable surfaces. In 2011, Meridian filed an application for such surface water rights in the District Court for Water Division No. 2 (“Water Court”). In its application, Meridian sought conditional rights to divert and store runoff water from an unspecified Upper Black Squirrel Creek tributary. Opposers challenged the Water Court’s jurisdiction to hear the matter because while Meridian characterized the water in its application as “storm run-off,” the water directly recharges the Basin and is therefore designated ground water subject to the Commission’s administration. The Water Court agreed that Meridian’s application presented a jurisdictional question, and the Water Court and stayed its proceedings while Meridian initiated a case before the Commission.

A hearing officer for the Commission concluded that the water Meridian sought to appropriate was designated ground water and not surface water. The hearing officer reasoned that, except for Meridian’s development of impermeable surfaces, falling precipitation in the Basin would either recharge the aquifer, evaporate, or hydrate plants. The Commission affirmed the hearing officer’s conclusion, and Meridian appealed to the El Paso County District Court (“District Court”). The District Court agreed with the Commission and concluded that naturally falling precipitation would not reach a tributary system, and as such, the surface streams are “‘only streams because they are man-made.’” Therefore, the District Court denied Meridian’s application for surface water rights.

On appeal, Meridian made four arguments before the Supreme Court of Colorado (“Court”). It argued: (i) the Commission did not have subject matter jurisdiction to hear the case; (ii) the Commission improperly classified the storm runoff as designated groundwater water; (iii) claim preclusion barred the Commission from finding that a portion of water was designated ground water; and (iv) public policy concerns weighed in its favor.

The Court first addressed Meridian’s jurisdictional-based argument in which Meridian argued that the Water Court, not the Commission, had jurisdiction over the case because the issues involved conditional rights and surface water. In support of this argument, Meridian referenced The Water Right Determination and Administration Act of 1969 (“1969 Act”), which grants water courts jurisdiction over “water matters” in the state. The 1969 Act, however, “applies only to the administration of surface and underground water that is in or tributary to natural streams.” In contrast, The Colorado Groundwater Management Act (“Management Act”) grants the Commission jurisdiction over designated ground water issues. More importantly, in the case of a jurisdictional conflict between the deciding bodies, jurisdiction vests with the Commission to initially determine if designated ground water was at issue. The water court only obtains jurisdiction if the Commission concludes that the contested water is not designated ground water. Accordingly, because this case involved a jurisdictional issue, the Court rejected Meridian’s argument and found that the Commission had jurisdiction to make an initial determination.

Next, the Court turned to the issue of classification. Meridian contended that the District Court erred by finding that the water at issue was designated ground water, and not surface water. In making a determination, the Court first looked at the Management Act, which defines “designated ground water” as “ground water which in its natural course would not be available to and required for the fulfillment of decreed surface rights.” The Management Act also defines “ground water” as “any water not visible on the surface of the ground under natural conditions.” Considering these definitions and the record, the Court upheld the District Court’s finding that the water Meridian sought to divert was not simply surface water. The Court found ample support in the record to conclude that a portion of the water Meridian sought to appropriate was the result of man-made impermeable surfaces and did not occur naturally, except during heavy rain events. The Court also rejected Meridian’s definitional arguments based on case law because the facts of the cases were too dissimilar.

The Court then turned to Meridian’s argument that claim preclusion prevented the Commission from finding that a portion of the water at issue was designated ground water. Meridian contended that claim preclusion occurred because the Commission stated in its 1968 Order that only water in the Basin was designated ground water. The Court found that claim preclusion did not apply because the earlier and present proceedings did not involve identical claims for relief. Additionally, the runoff water at issue in this case, created in part by Meridian’s development, could not have been a part of a lawsuit in 1968.

Finally, the Court addressed Meridian’s public policy argument and held that the District Court’s reasoning, and not Meridian’s, was consistent with public policy for three reasons. First, the Court reasoned that allowing people to own a previously untapped water supply, resulting from development that replaced natural land conditions, would be contrary to public policy. Second, the Court found that it could not condone Meridian’s application because doing so would result in a type of unprecedented “‘super decree’” that would allow Meridian access to the water “free from both the call of the Arkansas River and the Commission’s oversight.” Third, even though only four percent of precipitation recharges the aquifer, the Court found that granting Meridian’s application would have resulted in an overall reduced rate of recharge, which would harm senior designated ground water users.

Accordingly, the Court affirmed the District Court’s holding on all four issues.

The featured image is of the Adur Flood Plain in the United Kingdom.  Bob Embleton holds the copyright to this image and its use is not his endorsement of the Water Law Review.

Gulf Restoration Network v. McCarthy, 783 F.3d 227 (5th Cir. 2015) (holding that: (i) the EPA’s refusal to regulate pollution resembled a rejection of a rulemaking petition, which is presumptively reviewable by the courts; (ii) the Clean Water Act possesses sufficiently specific language to allow for judicial review; and (iii) the EPA may refrain from making a necessity determination if it uses the language of the Clean Water Act to explain its decision).

In July 2008, a group of nonprofit environmental organizations, led by the Gulf Restoration Network (“Network”), petitioned the Environmental Protection Agency (“EPA”) to regulate the high levels of nitrogen and phosphorous pollution that have entered waters in the Mississippi River Basin and created what the petition called a “dead zone” in the northern Gulf of Mexico. The EPA denied this petition, deciding that it could create more efficient regulations by working cooperatively with the states. Network then filed suit in the United States District Court, Eastern District of Louisiana, alleging that the EPA violated both the Administrative Procedure Act (“APA”) and the Clean Water Act (“CWA”). The relevant section of the CWA stipulates that the EPA can directly create water standards if: (i) the state-created standards do not satisfy the requirements of the CWA; or (ii) the administrator decides that a new or improved standard is necessary. The district court ruled that the Supreme Court’s decision in Massachusetts v. EPA required the EPA to make the requested necessity determination before denying the petition, and the court remanded the matter to the EPA to conduct such a determination. The EPA appealed the decision to the United States Court of Appeals, Fifth Circuit (“Court”).

The Court began its inquiry by reviewing the district court’s holding that it possessed subject matter jurisdiction to review the EPA’s action. Generally, the United States government and its agencies possess sovereign immunity and are not subject to civil actions unless they consent to suit. Congress waived this immunity in the APA, which created a general presumption that the courts have the requisite jurisdiction to review final actions of an agency. The Court recognized two circumstances in which sovereign immunity remains: (i) when a statute prohibits judicial review; and (ii) when the agency action falls within the agency’s legal discretion. The Court found that the first circumstance did not apply in this case, and that the second circumstance could only apply to agency actions for which the applicable statute provides no “meaningful standard” of review.

Before considering whether the CWA provided a meaningful standard of review, the Court considered whether this type of agency action was categorically reviewable, presumptively reviewable, or presumptively unreviewable. When an agency acts affirmatively, the courts apply a presumption of reviewability. Because the EPA decided not to act, the presumption depends on the activity in question. If the EPA refused to perform a rulemaking function, then the Court would consider the action presumptively reviewable; if the EPA refused to engage in an enforcement action, then the Court would consider the action presumptively unreviewable. The Court declined to define the EPA’s action as categorically reviewable, as Network argued, and instead the Court found that judicial review should only occur after careful review of the statute.

Next, to determine which presumption applied, the Court considered whether the EPA’s actions resembled denial of a rulemaking petition or an enforcement action. Due to the breadth of Network’s request to regulate pollution, the Court held that the EPA’s refusal to conduct such regulation aligned with a denial of a rulemaking petition. The Court rejected the EPA’s comparison to an issuance of a Notice of Deficiency (“NOD”), a mechanism of the Clean Air Act that the Court held to be an enforcement action in its prior decision in Public Citizen, Inc. v. EPA. The Court distinguished the NOD as a punitive measure to correct inadequate state measures. The Court turned to the language of the CWA, which uses the word “or” to separate the EPA’s power to correct state inadequacies from its power to conduct a necessity determination. The Court found that this disjunctive indicates that the necessity determination does not require any finding of state inadequacies. The Court noted that an action to correct state inadequacies would reflect an enforcement action, but the necessity determination more closely resembles a rulemaking feature. The Court also considered the consequences of noncompliance with each measure: the EPA may sanction states for failure to correct inefficiencies after the agency issues an NOD, but the CWA does not authorize the EPA to impose any sanctions for noncompliance. Finally, the Court described the CWA’s general notification process, during which the EPA must prepare and publish its proposed regulations. Unlike the sanctions following an NOD, this general notification does not entail any direct notification to affected states. The Court thus concluded that the EPA’s refusal to make a necessity determination resembled denial of a petition for rulemaking, not an enforcement action. Therefore, the action warrants a presumption of reviewability.

With this presumption in place, the Court then considered whether the language of the CWA provided a “meaningful standard” to apply when reviewing a denial of a rulemaking petition. The Court turned to Massachusetts, in which the Supreme Court ruled that the EPA may decline to exercise its rulemaking power by providing a reasonable explanation “grounded in” the language of the controlling statute, not merely a self-directed policy explanation. The Court then answered two questions: (i) whether the “necessity determination” section of the CWA contains sufficiently specific language to allow judicial review; and (ii) whether the EPA did, in fact, have the discretion to decide against making a necessity determination.

First, the Court found the CWA to possess sufficiently specific language; the CWA dictated that water quality standards “shall be established taking into consideration their use and value for public water supplies, propagation of fish and wildlife, recreational purposes, and . . . use and value for navigation.” The specificity of these considerations provides the EPA with a basis for explanation, thereby allowing for judicial review. The Court further concluded that the “mandatory language” of these sections of the CWA suggests reviewability. Courts have found provisions with discretionary and suggestive language, such as the agency “may” regulate, to be unreviewable. However, the relevant sections of the CWA dictate that the Administrator “shall” create new standards when necessary. Thus, the Court held that it possessed subject matter jurisdiction to review the EPA’s action.

Second, the Court disagreed with the trial court’s finding that the EPA lacked discretionary authority to decline a necessity determination. The Court revisited the ruling in Massachusetts, holding that the case’s “reasonable explanation” standard also applies to this section of the CWA. Massachusetts’ holding requires the district court to analyze the EPA’s explanation and determine whether the explanation reflects the language of the CWA. Noting the highly deferential nature of this standard, the Court described the EPA’s burden as “slight”. Nevertheless, the Court ruled that the EPA must provide such an explanation to the district court to justify the agency’s refusal.

Accordingly, the Court vacated the order of the district court and remanded the case for proceedings consistent with its ruling.

Featured image is of the Mississippi River taken by NASA.  Image is part of the public domain.

Frees v. Tidd

Frees v. Tidd, 349 P.3d 259 (Colo. 2015) (holding that the owner of a servient estate, whose property is subject to a ditch easement conveying water under a senior priority, may obtain a junior conditional right to use the same water for non-consumptive hydropower use if he or she can make an initial showing that water is available).

David Frees, George Frees, and Shirley Frees (“Frees”) own an irrigation water right with an 1890 priority, which has diverted at most 6.4 cubic feet per second (“cfs”) of water from Garner Creek. The Garner Creek Ditch No. 1 headgate delivered the water into a ditch that crossed property owned by Charles and Barbara Tidd (“Tidds”) in Saguache County. Across the Tidds’ property, the Frees owned an easement for delivery of their water right.

In 2010, the Tidds applied for a 0.41 cfs conditional water right for non-consumptive hydropower use. The Tidds initially filed for a right to divert from Garner Creek Ditch, but they amended their application to identify Garner Creek itself as the source of appropriation. In 2014, the District Court, Alamosa County (“water court”) issued a decree, giving the Tidds a conditional water right with a 2010 priority date. The water court determined that water was available for the Tidds’ proposed non-consumptive hydropower use and that the Frees could not exclude the Tidds from use. The water court reasoned that the Frees only owned the right to use the water for irrigation purposes, not the water itself. In order to apply the decreed water for their proposed hydropower use, the Tidds needed to make modifications to the ditch thereby altering the Frees’ easement. Subsequently, both parties outlined and agreed to terms and conditions to a decree that would ensure against any material injury to the Frees’ water right. Nevertheless, the Frees appealed the decree to the Colorado Supreme Court (“Court”), arguing that Colorado law prevented the Tidds from appropriating the same physical water the Frees had already appropriated through their 1890 irrigation priority.

On appeal, Justice Hobbs, writing for the majority, first addressed the Frees’ contention that the water they diverted “ha[d] a label on it.” Relying on the Tenth Circuit’s opinion in Public Service Co. of Colorado v. Federal Energy Regulatory Commission, the Frees argued that their “label” prohibited the Tidds from using the water for any purpose. The Court rejected this argument, concluding that the language came from problematic dicta and, therefore, did not support the Frees’ position. Instead, the Court explained that the Tidds’ use of water was consistent with Public Service Company’s use of the Green Mountain Reservoir water in the Tenth Circuit opinion.

Accordingly, the Court stated that Public Service Co. of Colorado did not support the Frees’ position. The Court found that the Frees owned the right to use the water for irrigation, which the Court distinguished from owning the physical water itself. Therefore, the Frees’ ownership interest in the water did not prevent the Tidds from also using the water.

Additionally, the Frees argued that the water court lacked the power to order another appropriation unless there was un-appropriated water available to assign to that decree. The Court explained that this argument directly contradicted the intent and requirements of the Water Right Determination and Administration Act of 1969. The fundamental goal of the 1969 Act was to promote, without injury, “flexibility” in the use and appropriation of the public’s water, concurrently and in succession. The Court also relied on previous case law and the Colorado Constitution for support of the same proposition. Previous cases reiterated the notion that the Constitution guarantees the right to use a specified amount of groundwater to the exclusion of others not in priority. However, this right is not the right to exclude others from using the same water if multiple users can use the water without injury.

Next, the Court addressed the Frees’ contention that Colorado law required the Tidds to appropriate new water. The Court rejected this argument, explaining that Colorado law did not require a conditional water right applicant to appropriate new water. Instead, Colorado law requires the applicant to show that there is water available that he can put to beneficial use. The “can and will” doctrine promulgated in section 37-92-305(9)(b) of the Colorado Revised Statutes requires: “an applicant for a conditional water rights decree to prove the availability of water under river conditions existing at the time of the application as a threshold requirement to establishing that there is a substantial probability that the project can and will be completed with diligence and within a reasonable time.”

The Court found that the question of water availability linked directly to the question of whether decreeing a new appropriation would injure senior water rights. In order to meet this statutory requirement, a new appropriator must convince the water court that its diversion will not injure senior appropriators and that water is available. The Court determined that under the terms of the 2010 decree, which protected against any injury to the Frees’ irrigation water right, water was available for the Tidds’ decreed use.

Accordingly, the Court affirmed the water court’s conditional water right decree.

Márquez, J., Dissenting

Justice Márquez, joined by Justice Coats, dissented. Justice Márquez raised several issues: the scope of the right to appropriate, the lack of support for the decision in prior precedent, the potential for unintended consequences, and the Court’s intrusion into the realm of legislative policy and decision-making. The dissent argued that although the Tidds’ conditional water right had a 2010 priority, the Tidds would actually be diverting pursuant to the Frees’ 1890 priority. The dissent observed that, under the majority’s decision, a new appropriator could intercept water that was only available in light of a senior appropriator’s diversion. The majority’s decision would effectively allow the junior appropriator to gain an “overvalued water right by ‘diverting’ under an earlier priority date.”

The dissent also disagreed with the majority’s interpretation of Public Service Co. of Colorado. The dissent argued that the majority’s analysis overlooked the crucial fact in that case: Public Service Company received more water than Colorado law would have otherwise granted. Contrary to the majority’s interpretation, the dissent argued that Public Service Co. of Colorado “stands for the proposition that a downstream user cannot obtain a vested water right in already appropriated water simply by applying that water to a beneficial, non-consumptive use.”

The dissent also questioned, among other things, what would happen if the Frees changed the water diversion point. Because the potential answers proved problematic, Justice Márquez advised the Court to defer to the legislature on “novel, out-of-priority diversions, rather than upholding a conditional water right in the unique circumstances of this case and thereby establishing a potentially dangerous precedent.”

Featured image is part of the public domain.

San Antonio, Los Pinos & Conejos River Acequia Pres. Ass’n v. Special Improvement Dist. No. 1 of the Rio Grande Water Conservation Dist., 351 P.3d 1112 (Colo. 2015) (en banc) (affirming the water court’s decision in holding: (i) the water court correctly rejected challenges to issues previously affirmed by appellate courts; (ii) objections to an annual replacement plan pending resolution does not justify a stay on the plan; (iii) the Closed Basin Project water was an adequate source of replacement water; (iv) the annual replacement plan’s treatment of augmentation plan wells did not violate the water management plan; and (v) the omission of the augmentation plan wells lifespan did not render the annual replacement plan invalid).

In 2011, under San Antonio, Los Pinos & Conejos River Acequia Pres. Ass’n v. Special Improvement Dist. No. 1, 270 P.3d 927 (Colo. 2011) (“San Antonio”), the Colorado Supreme Court (“Court”) affirmed a May 2010 decree (“Decree”) issued by the District Court for Water Division No. 3 (“water court”) for Special Improvement District No. 1 (“Subdistrict”) of the Rio Grande Water Conservation District. The Decree states that, along with specific decreed conditions, the amended water management plan (“Plan”) established a “satisfactory methodology and procedure” to determine injurious depletions due to well pumping within the Subdistrict and to acquire replacement water. The Plan’s appendices established requirements for the Subdistrict to develop an annual replacement plan (“ARP”) to support the operation of the Plan. The water court retained jurisdiction to ensure operation of the Plan and to prevent injury in conformity with the terms of the Decree.

The Subdistrict submitted the initial ARP to the State Engineer for approval in 2012. The State Engineer determined that the ARP was sufficient to remedy injurious depletions without injuring senior water rights and approved the ARP on May 1, 2012. Several senior surface water rights holders (“Objectors”) raised objections to the ARP and challenged the approval.

The water court reviewed the objections and made several pretrial rulings. The Objectors appealed two of the rulings. The first was whether the water court appropriately denied a motion to halt all pumping until resolving protests to the ARP. The Objectors based this motion on the reasoning that the ARP was an extension of the Plan and subject to groundwater management rules and regulations. The water court clarified that the Plan was complete with the Court’s decision in San Antonio and that the ARP was an operating tool created annually to predict stream depletions and establish replacement of depletions. As such, the water court saw no requirement to halt operation of an ARP until all challenges are resolved.

The Objectors also took issue with the water court’s decision regarding the supporters’ motion to dismiss ten of the Objector’s challenges. The water court partially granted the motion and dismissed eight of the challenges. The water court reasoned that the challenges should be dismissed because they questioned methodologies approved by the Decree and affirmed in San Antonio. The water court concluded that it was barred from reconsidering those issues. The remaining two challenges the water court addressed were whether the water produced by the Closed Basin Project was a suitable source of replacement water and whether the treatment of augmentation plan wells violated the Plan. First, the water court maintained that the basin water was a suitable source of replacement water, as established in the Decree, and that challenges to “salvaged” water rights of basin water were a collateral attack on the Basin decree. Second, the water court determined that the treatment of augmentation plan wells was appropriate, and while the failure to include a list of augmentation wells was improper, this failure did not invalidate the 2012 ARP.

Following the trial, the water court upheld the State Engineer’s approval of the 2012 ARP. The Objectors appealed to the Court, and argued: (i) the water court could address issues previously decided; (ii) the ARP could not go into effect with open challenges; (iii) the replacement water source was not appropriate use of water; (iv) the inclusion of augmentation plan wells violated the Decree; and (v) the omission of a list of wells invalidated the 2012 ARP.

First, the Objectors claimed that the water court’s retained jurisdiction required it to hear all challenges to the Plan, regardless of the Court’s affirmation of the Plan and Decree. Reviewing the Court’s decision in San Antonio, the Court verified that the Decree was still appropriate and continued to meet its stated objectives. Consequently, the Court determined the water court correctly dismissed the challenges regarding previously decided issues.

Second, the Objectors claimed that the ARP is an extension of the Plan. Thus, the Objectors argued, the ARP should be subject to the rules and regulations of groundwater management plans and should not be effective until all protests are resolved. However, the Court determined that prior decisions affirming the Plan deemed the Plan complete. In addition, the Court found that the Plan established the ARP as an operating “tool.” The Court discussed that halting the implementation of the ARP every year to address objections would be impractical because it would ultimately stop the Plan from ever going into effect. Therefore, the Court affirmed the water court’s finding that the ARP is an extension of the plan and is not subject to a stay pending the resolution of all challenges.

Third, the Objectors argued that using basin water as replacement water in the 2012 ARP was not permissible. The Court noted that the basin waster is a result of a federal reclamation effort to help meet obligations under the Rio Grande Compact (“Compact”). The Objectors claimed that using basin water interferes with the State’s ability to meet Compact obligations and, furthermore, falls under the definition of salvaged water managed by the priority system. Below, the water court determined that the basin water was a suitable source of replacement water as set forth in the basin decree, allowing the Subdistrict to simultaneously meet Compact obligations and replace injurious depletions. The water court also found that using basin water provided the opportunity to reduce curtailments upriver, benefitting senior water right owners. Finally, the water court found the salvaged water claim was an improper collateral attack on the basin decree. The Court agreed with the water court’s analysis and affirmed the water court’s finding that the basin water was adequate and suitable to prevent injury to senior surface right holders. The Court further stated that the basin water provided a suitable source of replacement water in the 2012 ARP, and that the water usage falls within the decreed purposes.

Fourth, the Objectors contended that the inclusion of augmentation plan well pumping in the calculation of the Subdistrict’s groundwater use violated the Plan. The Court noted that the Decree established that Subdistrict landowners with augmentation plan wells may, but are not required to, opt out of the Plan. The Court held that including the augmentation plan wells was appropriate and found that including augmentation plan wells as Subdistrict wells did not injure senior surface right holders. Therefore, the Court allowed the 2012 ARP to include wells covered by augmentation plans and held it did not violate the Decree.

Finally, the Objectors claimed that the ARP’s omission of a comprehensive list of augmentation plan wells violated the Plan, and rendered the 2012 ARP invalid pursuant to the doctrine of substantial compliance. The Court agreed with the water court that this was a minor omission as the Subdistrict and the State Engineer made good faith efforts to comply with the Plan. Thus, the Court found that the failure was an oversight caused by the unfamiliarity of the process and did not invalidate 2012 ARP.

Accordingly, the Court affirmed the water court’s decision and upheld the approval of the ARP.

The featured image is of the State Bridge, Spanning the Rio Grande River, Del Norte, in Rio Grande County, Colorado.  The image is part of the public domain.

Sierra Club, Inc. v. Bostick, 787 F.3d 1043 (10th Cir. 2015) (holding that by issuing Nationwide Permit 12 and verifying that the construction of the TransCanada pipeline was covered under the permit, the United States Army Corps of Engineers did not violate the National Environmental Policy Act, the Clean Water Act, or its own nationwide permit).

The U.S. Army Corps of Engineers (“Corps”) has the authority, under Section 404(e) of the Clean Water Act, to issue nationwide permits authorizing activities that involve the discharge of dredged material into waters and wetlands. The Corps issued a nationwide permit, Nationwide Permit 12 (“Permit”), which permitted anyone to build utility lines in waters as long as the construction did not result in a loss of greater than one-half acre of water for each single and complete project.

TransCanada Corporation (“TransCanada”), sought to build the Gulf Coast Pipeline (“Pipeline”), an oil pipeline which would cross 2,000 waterways and expand across 485 miles. The Corps verified, in several letters, that the Permit permitted construction of TransCanada’s pipeline. Based off the Corp’s verification, TransCanada constructed, completed, and began using the Pipeline.

Concerned about the Pipeline’s effect on the environment, Sierra Club, Inc., Clean Energy Future of Oklahoma, and East Texas Sub Regional Planning Commission (collectively “the environmental groups”) challenged the Corps’ authority to issue Nationwide Permit 12. The United States District Court for the Western District of Oklahoma (“district court”) entered judgment in favor of the Corps. The environmental groups appealed to the United States Court of Appeals, Tenth Circuit (“Court”). The environmental groups asserted three major claims on appeal: (i) that the Corps violated the National Environmental Policy Act (“NEPA”) when it issued the Permit and letters without considering the risk of oil spills and the cumulative impacts on the environment; (ii) that Nationwide Permit 12 violates Section 404(e) of the Clean Water Act because it permits activities that cause more than minimal environmental impacts and because it defers a part of the minimal-impact determination to project-level personnel; and (iii) that the Corps violated its own Permit when it failed to conduct an analysis of the Pipeline’s cumulative effects on the environment.

The Court first addressed the claim that the Corps violated NEPA when it failed to consider the risks of oil spills and the Pipeline’s cumulative impacts. The Court held that the environmental groups waived their NEPA claims. The Court noted that the Corps met the NEPA requirements because, under NEPA, no further analysis is required beyond an environmental assessment if the assessment indicates that the environmental impact of the proposed action is insignificant. Further, the Court noted that a party challenging NEPA compliance must raise any relevant objections to the proposed project during the public comment period. A party waives its claim if it does not raise it during such period, unless the environmental assessment’s flaw is an obvious flaw or the issue is otherwise brought to the agency’s attention.

Additionally, the Court analyzed whether the risk of an oil spill was an obvious flaw in the assessment. The Court determined that the environmental groups were required, and failed, to show that the Corps’ assessment for the construction, maintenance, and repair of utility lines contained an obvious flaw. The Court found that the Corps appropriately considered the impacts from the construction of the Pipeline—the permitted activity—and not the impact associated with operation of the Pipeline, which fell under the authority of other agencies. Additionally, the Court noted that even if the Corps knew about the risk of oil spills from other sources, it made no difference because the duty to assess that risk belonged to another agency. Second, the Court addressed whether the environmental groups waived their claim that the Corps violated NEPA by failing to consider the pipeline’s cumulative impact. The Court held that the environmental groups waived their claim because no commentator raised this objection during the relevant public comment period.

Next, the Court analyzed the environmental groups’ argument that NEPA required the Corps to conduct an environmental analysis before issuing the verification letters to TransCanada, because the letters constituted “major Federal actions.” The Court disagreed with the environmental groups and held that the Corps complied with NEPA. The Court noted that NEPA requires agencies to conduct an analysis of potential impacts of all major Federal actions, but that the letter would only constitute a “major Federal action” if such verification resulted in a significant impact. The Court found that the Corps considered the impact of the construction of an oil pipeline when it issued Nationwide Permit 12, and that the letters only verified that TransCanada’s actions were covered by the Permit. Therefore, the Court held there was no need for the Corps to conduct a second environmental assessment.

The Court then considered the environmental groups’ argument that the Corps violated the Clean Water Act when it issued Nationwide Permit 12. The environmental groups argued the Permit violated the Clean Water Act in two ways: (i) because the Permit allows activities that have more than minimal environmental impacts; and (ii) because it defers a part of the minimal-impact determination to project-level personnel. The Court held that the Corps did not violate Section 404(e) when it issued Nationwide Permit 12 because it used its long-standing practice for assessing impacts based on its technical expertise. The Court found the environmental groups failed to show that the Corps’ test did not adequately control aquatic impact.

The Court then considered the Corps’ interpretation of Section 404(e) as allowing the Corps to use project-level personnel in portions of the minimal-impact analysis. When analyzing the case under Chevron, the Court noted that there was no direction from Congress as to whether assigning project-level personnel such duties is permissible. Because Congress had not directly spoken on the issue, the Court determined that the Corps’ interpretation of Section 404(e) was permissible because nationwide permitting is complicated and the Corps’ interpretation provided a reasonable safeguard from unforeseen impacts. The Court reasoned that the Corps recognized that it could not predict every potential use of Nationwide Permit 12, but that it made an assessment of all predictable uses—including construction of an oil pipeline—so the Corps did not need to conduct a new environmental analysis. Additionally, the Court noted that the use of project-level personnel did not affect the public’s ability to comment on the proposed permits because the Corps prepares a written impact evaluation of authorized activity; it only defers aspects of the evaluation that it cannot practically undertake before the start of a project.

Lastly, the Court addressed the environmental groups claim that the Corps violated its own Permit when it failed to document its cumulative impact analysis in the verification letters and in its administrative records regarding the analysis. The Court held that there was no violation because the Corps has never required district engineers to include the analysis in a verification letter, as long as the record supported the letter. The Court found that in this case the record included sufficient facts to support that the district engineers considered cumulative impacts.

Therefore, the Court found that the environmental groups waived their NEPA claims by failing to object during the appropriate public comment period. The Court rejected the remainder of the environmental groups’ arguments. The Court held that, by issuing Nationwide Permit 12 and verifying the construction of TransCanada’s pipeline under the Permit, the Corps did not violate NEPA, the Clean Water Act, or its own Permit.

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

The featured image is of the Trans-Alaska Pipeline crossing the South Fork Koyukuk River.  The image is part of the public domain.