Category Archives: Court Reports

Ctr. for Biological Diversity v. U.S. Fish & Wildlife Serv.

Christine Romo  ·  

Ctr. for Biological Diversity v. U.S. Fish & Wildlife Serv., WL 4497680 (D.Nev. 2012) (holding that action brought by the Center for Biological Diversity challenging the Fish and Wildlife Service’s involvement in a Memorandum of Agreement failed because: (i) the Center for Biological Diversity lacked standing to assert claim under the Property Clause and the Endangered Species Act; (ii) Fish and Wildlife Service was not required to perform an environmental statement or environmental assessment because the Memorandum of Agreement did not constitute a major federal action; (iii) the National Wildlife Refuge System Improvement Act did not apply to Fish and Wildlife Service’s decision to sign the Memorandum of Agreement because the groundwater pumping project occurred outside the National Wildlife Refuge’s boundaries).

In March 2002, the State Engineer of Nevada issued Order No. 1169 (“Order”).  The order accepted applications for new groundwater rights in various groundwater basins, as well as ordered a study of the effect of pumpage on pre-existing water rights.  The study was ordered to last a minimum of five years, during which at least fifty percent of the currently approved water rights in the Coyote Springs Valley groundwater basin were going to be pumped for at least two successive years.

The Fish and Wildlife Service (“FWS”), Southern Nevada Water Authority (“SNWA”), Coyote Springs Investment LLC (“CSI”), Moapa Valley Water District (“MVWD”), and the Moapa Band of Paiute Indians (“Tribe”) entered into the Memorandum of Agreement (“MOA”) in April of 2006.  The MOA guaranteed that proper conservation measures were established prior to any potential effects resulting from the required groundwater pumping pursuant to the State Engineer of Nevada’s 2002 Order.  These conservation measures included: the creation of a recovery implementation program, habitat restoration and recovery procedures, protection of in-stream flows, and the formation of a hydrologic review team to guarantee precise monitoring and data collection.

In anticipation of entering into the MOA with the SNWA, CSI, MVWD, and the Tribe, the FWS issued the Programmatic Biological Opinion (“BiOp”).  The BiOp evaluated the execution of the MOA.  Ultimately, the FWS concluded that the proposed signing of the MOA, in and of itself, would not result in the pumping of any groundwater.  Therefore, the FWS’s becoming a signatory to the MOA was not likely to jeopardize the existence of the Moapa dace (a federally listed endangered species that the FWS had previously assigned the highest recovery priority possible).

The Center for Biological Diversity (“Center”) brought an action against FWS in August of 2010.  The Center alleged that FWS’s decision to sign the MOA violated: (1) the Property Clause of the United States Constitution, (2) the National Environmental Policy Act (“NEPA”), (3) the Endangered Species Act (“ESA”), and (4) the National Wildlife Refuge System Improvement Act.

First, the district court of Nevada found that the Center lacked standing to assert a claim under the Property Clause.  The district court agreed that the Center had not shown the requisite elements of causation and redressability and, therefore did not meet its challenge of the MOA.  Additionally, the district court reasoned that the MOA itself did not authorize any pumping, but rather was primarily concerned with establishing conservation measures to assist, not harm, the endangered Moapa dace.  Any harm to the fish was a result of the State Engineer of Nevada’s order, which authorized the groundwater pumping, not the MOA.

Second, the district court held FWS’s decision to sign the MOA without first completing an environmental assessment (“EA”) or environmental impact statement (“EIS”) did not violate NEPA.  NEPA requires an EIS for every major Federal action significantly affecting the quality of the human environment.  In order to determine whether an EIS is necessary, an agency may first prepare an EA.  An EIS is not mandatory when a proposed federal action would not change the status quo. When an agency decides that a project does not require an EIS without first conducting an EA, courts review the decision under the reasonableness standard.  Ultimately, the court found that FWS’s decision not to complete an EA or EIS, before entering into the MOA, was not an unreasonable course of action because the MOA did not constitute a major federal action.

Third, the district court found that the Center lacked standing to assert a claim against the FWS for its failure to undertake action against the State Engineer of Nevada for authorizing the groundwater pumping.  Section 7 of the ESA demands that federal agencies confer with the FWS to insure that any action carried out by such agency is unlikely to threaten the existence of any endangered or threatened species.  Ultimately, the court reasoned that the FWS’s action of entering into the MOA did not jeopardize the Moapa dace because the MOA involved conservation measures that would have a positive effect on the population of the Moapa dace, not a negative one.

Next, the district court concluded that FWS’s decision to sign the MOA did not violate the National Wildlife Refuge System Improvement Act (“Act”).  The Center argued that by agreeing in the MOA not to assert injury to its water right until flow fell to 2.7 CFS, the FWS allowed a percentage of the Refuge water right and spring complex to be used in association with the groundwater pumping pronounced in the MOA.  Ultimately, the district court found that FWS’s signing of the MOA did not violate the Act because the groundwater pumping project occurred outside the boundaries of the national wildlife refuge and, therefore the Act was inapplicable.

Ultimately, the district court granted summary judgment in favor of FWS and argued that the Center’s action failed because it challenged an agreement (the MOA), designed to aid, not harm the endangered Moapa dace.  In addition, the district court concluded that the MOA was not the authority permitting the pumping of water from the Coyote Spring Valley basin and, therefore the Center’s action lacked merit.

In re Yakima River Drainage Basin

Shannon Love  ·  

In re Yakima River Drainage Basin, 296 P.3d 835 (Wash. 2013) (holding in the dispute between the Yakima Nation and non-tribal landowners over Yakima River Basin water rights: (1) the Nation acreage must be re-calculated, (2) the Nation does have a right to water storage, (3) non-tribal users do have excess water rights within certain limitations, (4) and the future use exception should be narrowly applied).

The Yakima River Basin has been the subject of several cases and agreements going back to the 1855 Treaty between the United States and the Yakima Nation (“Nation”), which created the Yakima Reservation.  Under the Winters Doctrine, the creation of a reservation also establishes an implied water right to meet all present and future water needs on the reservation.  In 1908, the United States created a “Code Agreement” dividing water rights on the Yakima River, twenty-five percent to the Nation and seventy-five percent to non-tribal water users in the Basin on the north side of the Ahtanum Creek (“Northside users”).  In 1977, the Washington Department of Ecology (“DOE”) filed an action to determine surface water rights in to Yakima River Basin.

Since 1977, several adjudications took place culminating in the current case in point between the United States, the Nation, DOE, Ahtanum Irrigation District (“AID”), John Cox Ditch Company, Department of Natural Resources (“DNR”), and several individual water users including the La Salle High School, the Brules, Jerome Durnil, and Albert Lantrip.  The Supreme Court of Washington (“Court”) considered the following issues on appeal: (1) whether cases and agreements prior to and since 1977 determined Northside users’ water rights or Nation acreage, which is the measure of water necessary to irrigate all the irrigable acreage on a reservation, (2) whether non-Nation water users have a right to excess water, (3) whether there is a right to storage for the Nation, and (4) whether the court correctly applied the future use exception.

First, the Court decided the threshold question of whether previous litigation on the Yakima River Basin determined the terms of Northside users’ water rights.  The Court ruled United States v. Ahantum Irr. Dist. litigation in 1956 was an adjudication of the water rights for the Northside users; as a result, the Court need not adjudicate those rights again.  After settling this threshold question, the Court moved on to the question of what acreage the Nation held.  The Court reversed the trial court’s determination on the Nation’s acreage because it believed the trial court relied on old documents that were approximate claims rather than findings of fact.  As a result, the Court remanded the quantification of the Nation’s acreage.

Next, the Court turned to the question of whether previous agreements or cases provided a right to storage of water from the Yakima River to the Nation.  The Court held a plain language reading of the Pope Decree, the most recent federal court opinion on the Yakima River Basin, created a right to water storage for the Nation.  The Court remanded the case to allow the trial court to include a storage right in its calculations of the Nation’s acreage.

The Court then turned to the question of whether Northside users had a right to take in any excess water from the Yakima River after the Nation received its share.  The Court agreed with the trial court’s ruling in favor of granting excess water rights for qualifying Northside users.  The right to excess water existed regardless of whether or not there would ever be excess water.  However, the Court also upheld limitations the trial court placed on the excess water rights.  Based on its reading of the Pope Decree, the Court held that Northside users only have excess water rights until July 10, each year.  Additionally, the Pope Decree imposed a time limit of either thirty or forty-five days during which the Northside user could collect excess water.  While the John Cox Company alone challenged its forty-five day period, the Court upheld the trial court’s ruling, validating the forty-five day period, because the trial court based its decision on a sufficient amount of evidence, including ten years of water flow data indicating when there was usually excess water.  The Court then refused to allow excess water rights to extend to junior rights users, which would be any users not recognized by the Pope Decree.  Parties recognized by the Pope Decree could actually trace their water rights back through the 1908 Code Agreement and prior litigation.  The Court reasoned then that entities not party to the Code Agreement were not included in the Pope Decree and, as such, do not have a place in the allocation of water rights for the Yakima River Basin.

After settling the issues of water use, the Court turned to the question of how to correctly apply the future use exception.  The Court reversed the trial court because it applied the exception too broadly.  The Court held the exception applied only in narrow circumstances.  Resuming irrigation, rather than taking actual steps toward development, did not fit the exception.

Accordingly, the Court remanded the case to the trial court for further factual findings on the Nation’s practicably irrigable acreage and excess water rights, upheld the Northside users’ excess water rights within certain limitations, and reversed the trial court’s determination on an individual Northside user’s future development excuse for nonuse of water rights.

Town of Minturn v. Tucker

Winslow Taylor  ·  

Town of Minturn v. Tucker, 293 P.3d 581 (Colo.  2013) (holding substantive error existed in stipulations between parties and therefore the water court retained jurisdiction to correct substantive errors pursuant to statute).

The Town of Minturn (“Minturn”) filed applications in the Colorado District Court for Water Division No. 5 (“water court”) for new water rights and changes to existing water rights in 2005 and 2007.  Over thirty parties challenged the applications and Minturn subsequently entered into agreements with all opponents.  Among these opponents were J. Tucker, Trustee’s (“Tucker”) predecessors in interest, Battle Mountain Corporation, Battle Mountain Limited Liability Company, and Sensible Housing Co., Inc.  These stipulations contained provisions stating the parties would not oppose entry of water decrees containing terms and conditions that were no less restrictive than what was contained in the stipulations.  At some point after entry of the decrees, Minturn discovered the stipulations based several consumptive use calculations on billing statements, which made the monthly calculations off by one month and not reflective of actual monthly historical use numbers.  Minturn petitioned the water court to correct the decrees.  Tucker was the only opponent to these decree corrections.  The water court granted the petition, and Tucker appealed.

The Colorado Supreme Court (“Court”) reviewed the case de novo.  Minturn first argued Colo. Rev. Stat.  § 37-92-304(10) provides the water court with authority to correct substantive or clerical errors in decrees.  The Court began by analyzing the plain language of the statute and determined it plainly provided water courts the authority to correct substantive errors that could adversely affect a water right.  The Court then looked to Minturn’s petitions to determine whether they alleged facts sufficient to establish a prima facie showing of clerical error.  After examining the petitions, the Court determined there was in fact a prima facie showing, and upon such a showing, it became the duty of the water court to admit and consider all pertinent testimony to establish the intent of the original decree.

The Court then reviewed the evidence the water court examined and held the water court did not abuse its discretion in deciding the parties intended to use the actual consumptive use, and not the mistaken data provided by the billing company.  The language of the stipulations and the initial decrees included specific language stating that the historic actual use of the applicant was the amount the parties intended to use in the decree.

The Court then considered whether the water court afforded Tucker an opportunity to rebut the evidence.  Tucker supplied a supplemental response and affidavit, but did not provide expert testimony to rebut Minturn’s expert testimony.  Because the water court afforded Tucker an opportunity to provide contrary evidence, it did not abuse its discretion in giving more weight to Minturn’s expert than to Tucker.

In sum, Minturn met the criteria established in Colo. Rev. Stat.  § 37-92-304(10) to petition the water court to correct substantive errors, and the water court did not abuse its discretion in correcting the errors.

The Court next addressed the “no less restrictive” provisions of the stipulations to determine whether they precluded the water court from altering decrees.  The stipulations between the parties contained language stating the parties would not oppose a decree as long as the decree contained terms and conditions that were no less restrictive than those in the stipulations.  Tucker argued any increase in the monthly limitations was per se less restrictive on Minturn, and thus against the intent of the plain language of the stipulations.  Minturn argued that while the monthly use totals would be different, the yearly consumptive use was identical.  The Court examined the stipulations, and determined the phrase “no less restrictive” was open to more than one reasonable interpretation, and therefore was ambiguous.  The Court then stated that because it was ambiguous, they would look to the facts and circumstances surrounding the stipulations to determine the intent of the parties.  The Court examined the language of all the stipulations and concluded the intent of the parties was to use the “historical actual use” as the basis of the calculations, and the erroneous amounts submitted went against the intent of the parties.

The Court next looked at whether the corrected decrees were no less restrictive, as intended by the parties to the stipulations.  The Court examined the actual historic use of Minturn and determined the corrected amounts entered by the water court correlated to the historic use, and thus were within the intent of the stipulations.  Furthermore, the water court’s conclusion that no other vested rights would be injuriously affected was based on sufficient evidence.  While Tucker argued his rights would be injuriously affected, he did not provide any evidence of this assertion.  However, the Court also found if Tucker had evidence of an injurious effect, Colo. Rev. Stat.  § 37-92-304(6) allowed the water court to retain jurisdiction over the adjudication for five years on the question of injury to vested rights.

Therefore, the Colorado Supreme Court affirmed the decision of the water court.

New Zealand Māori Council v. Attorney General

Will Stenzel, Esq. & Dr. Jacinta Ruru  ·  

New Zealand Māori Council v Attorney General, SC 98/2012 [2013] NZSC 6 (Supreme Court of New Zealand) (holding the partial privatization of Mighty River Power will not impair to a material extent the New Zealand government’s ability to remedy any breach of the Treaty of Waitangi with respect to Māori water rights; the proposed sale of shares in Mighty River Power is consistent with the principles of the Treaty; the proposed sale of shares is reviewable by the Court for consistency with the principles of the Treaty; the proposed sale of shares is not in breach of the Waikato-Tainui Raupatu Claims Settlement Act 2010; the consultation between the New Zealand government and Māori following the recommendation of the Waitangi Tribunal was consistent with the principles of the Treaty).

In this case, the New Zealand Supreme Court upheld the Government of New Zealand’s (Government’s) partial privatization of a major hydroelectric power producer, despite valid Māori claims to ownership and control over the underlying water rights.  The decision has national and international implications for freshwater management and the nature of water rights.

Mighty River Power Limited produces and markets 15-18% of New Zealand’s electricity, with 60% of this coming from hydroelectricity.  Mighty River Power is currently a state-owned enterprise.  In 2012 the Government sought to privatize 49% of the company pursuant to the State-Owned Enterprises Amendment Act 2012.  The Government will also seek to partially privatize Meridian Energy Limited and Genesis Energy Limited, accounting for an additional 47% of New Zealand’s energy production, again with a substantial portion of this coming from hydroelectricity.  These privatizations will involve similar issues.

The Māori parties claimed privatization of Mighty River Power is inconsistent with the Government’s obligations under the 1840 Treaty of Waitangi (“Treaty”).  Partial privatization would impair the Government from settling ongoing misuse and misappropriation of Māori proprietary water rights, which would in turn violate the Treaty.

The permanent Waitangi Tribunal (“Tribunal”), which was established to determine Treaty breaches, recommended that the privatization should not proceed until nationwide consultation with Māori could be held.  One approach considered by the Tribunal was “shares plus,” a combination of Māori-held shares and control in the partially-privatized company.

The Government disagreed with the Tribunal’s recommendations and the dispute proceeded to litigation.  The High Court found in favor of the Government, as did the Supreme Court on direct appeal in a unanimous opinion.  The Supreme Court heard the case on a “tight timetable” and cautioned, “That circumstance and the fact that some of the arguments touch on fundamental elements of the New Zealand legal order prompt caution in straying beyond matters essential to disposition of the appeal.”  In the weeks following the decision, hundreds of thousands of New Zealand citizens registered to purchase shares in the privatized portion of Mighty River Power, to be listed on the New Zealand and Australian stock exchanges.  One estimate of the money that will be raised by the sale is U.S. $1.5 billion.

The Supreme Court decision considers, among other issues, whether the Government followed the proper procedure for privatizing a major state-owned enterprise, the Court’s power to review the Government’s decision to do so, and whether the Government properly considered the Tribunal’s recommendations.  This court report focuses on a major water rights issue of interest to U.S. practitioners, specifically the nature of water rights in New Zealand, and how Māori water rights may fit into that legal framework.

The Tribunal found that Māori rights and interests in water bodies were essentially ownership rights, and that those rights were guaranteed by the Treaty.  Specifically, the Tribunal identified the proprietary water rights guaranteed by the Treaty as the exclusive right to control access to and use of water.  These rights are based on historical control and management of water bodies, such as restrictions on travel over waterways.  Māori do not claim sole or exclusive ownership and control over water, but maintain there are ongoing breaches of their residual water rights established and protected by the Treaty.

The Government does not dispute that Māori have water rights established by the Treaty.  The Government also concedes that, at least in some cases, these claims can be described as “residual property rights.”  However, the Government claims that, under Common Law, “no one owns the water” until contained (for example, put in a tank or bottled), and that New Zealand law does not provide for ownership of water in rivers and lakes.

Consistent with this view, perpetual water rights do not currently exist under New Zealand law.  Water resource consents granted pursuant to the Resource Management Act (“Act”) are limited to a maximum of 35 years.  Water resource consents are considered limited proprietary interests.  However, depending on their terms, resource consents can be subject to modification, limitation for instream flow protection or other values (through water conservation orders), negative impact due to granting additional consents, or as pertinent to this case, to redress the Government’s Treaty obligations.  Mighty River Power’s hydropower resource consents contemplate for review due to any Treaty settlement.

The High Court found “there can be no doubt” that the Māori have “claims of a type of proprietary interest in freshwater . . . including . . . the source of water used by [Mighty River Power] to generate electricity.”  However, the High Court also supported the Government’s view that, “There are only two forms of property in New Zealand, real and personal.  A resource consent is neither.”  The High Court added that, in the case of Mighty River Power, “[t]he hoped for Māori control…is expressly prohibited, citing that the Māori would have at best a minority interest in the resulting privatized company,” that the hydropower project is already in place, and that there are corporate issues with granting one group of shareholders greater rights.  The High Court suggested that the Māori could gain greater say in the New Zealand-wide management of water through revision of the Act rather than through the privatization process.  The Act is in fact going through extensive review and revision, as described below.

Like the High Court, the Supreme Court confirmed the Māori water rights, but struggled with what forms those rights could take.  One problem cited by the Court is that “the [Māori] were not very specific as to…relief which is substantially in prospect and would become materially harder to obtain post-privatization.”  The Court summarized the possible forms of settlement as: (1) the “shares plus” concept; (2) “modern water rights” in the form of water permits issuable by the Māori as a regulating authority; or (3) royalty payments for water use.

The Supreme Court also agreed with the High Court that, in this instance, granting the Māori exclusive control over water may be practically impossible, finding, “The [Māori] are not seeking, and in any event the [Government] could not agree to, settlements which would be inconsistent with the continuing efficient operation of the current power-generating capacity.”  The Court added, “Since it is however implausible to suggest that the use of the water could be withheld from the generation of electricity . . . in effect proprietary recognition through the water permits is likely to be of value as reparation only to provide a basis for payment to Māori of royalties in respect of the particular waters used” and that both Mighty River Power minority shareholders and other power producers would resist such payments.

Nevertheless, the Court cited previous settlements broadly recognizing Māori rights to water and waterways as indicative of the Government’s willingness to recognize those rights subsequent to privatization.  In particular, the Court found that Māori claims to the Waikato River “have received substantial redress,” while nevertheless remaining incomplete.  The Supreme Court also noted that the 35-year limit for water resource consents was established by the Act to ensure that the Government could remedy Treaty violations even if the Government transferred water rights.

The Supreme Court decision could be interpreted as tacitly supporting essentially a dual system of water rights in New Zealand.  “Modern water rights,” i.e. resource consents, will remain subject to the Government’s “no one owns the water” view; while Māori proprietary rights may be recognized, at least in some instances, as possessing greater ownership indicia of ownership and control.  This approach would be somewhat analogous to Native American tribal water rights established by Winters v. United States, 207 U.S. 564 (1908), in the sense that the Māori rights are established by the Treaty independent of any subsequent permitting process.  However, this approach would be different than that established by Winters in that the rights granted Māori would be an different type of water right than those granted through the subsequent permitting process.  An additional interpretation of the decision is that Māori ownership of permanent water rights could be recognized unless exclusive control would be practically impossible, for example due to prior establishment of a major hydroelectric project.

This case is one component of major changes to, and arguably a crisis in, New Zealand freshwater management.  First, the issues in this case will arise in negotiations and/or litigation regarding the upcoming partial privatization of Meridian Energy Limited and Genesis Energy Limited.  Second, the Tribunal will continue its inquiry into remedying the Government’s treaty violations of Māori water rights.  The Supreme Court noted that the Government “will be required to respond to” the Tribunal’s recommendations.

Third, the Government is in the midst of revising the Act, including the sections regarding water allocation and quality.  This process involves Māori stakeholders on multiple levels, and Government has committed not to issue additional water resource consents until this process is finished.  Shortly after the Supreme Court’s decision, the Government released a framework for “freshwater reform for 2013 and beyond” discussion, proposals, and comment.  Possible changes to freshwater management include limitations on or changes to water conservation orders.

Fourth, the Court issued its decision in the midst of an historic drought, which has reduced agricultural production and brought a renewed concern for areas of the New Zealand with over-allocated water supplies.  The drought has heightened calls for changes to freshwater management.  The question of “who owns water,” and what water rights are, will remain an important issue in the course of these changes, which in turn will provide examples for other countries seeking to effectively manage a limited freshwater resource.

 

Will Stenzel, Esq. is a Colorado water law attorney visiting New Zealand with his spouse, who is on a U.S. State Department Fulbright grant at the University of Otago.  Stenzel is a visiting staff member at at the law school.

Dr. Jacinta Ruru is an Associate Professor at the University of Otago Law School in New Zealand. Her research focuses on exploring indigenous people’s legal rights to land and water.

Sources:

Aoraki Water Trust v. Meridian Energy Ltd., 2 NZLR 268 [2005] (citing that subsequent water permit is subject to priority in time, and not to be devalued by subsequent permits during the permit term).

Maree Baker-Galloway, Public Lecture, Mar. 21, 2013, 7:00 p.m., Burns Hall, Dunedin, New Zealand.

David Hargreaves, Ensuring Strong Demand for Mighty River Power shares in Australia is Key to the Government’s Partial Privatization Plan, Interest.co.nz, (Mar. 5, 2013, 8:17 AM), http://www.interest.co.nz/opinion/63413/opinion-ensuring-strong-demand-mighty-river-power-shares-australia-key-government%E2%80%99s-pa

Mighty River Power Commerce Committee: Financial Review FY2011/HY2012, Mighty River Power (Apr. 5, 2012), http://www.mightyriver.co.nz/PDFs/Results/Presentations/MIGHTY-RIVER-POWER_CommerceCommittee_financial-rev.aspx.

New Zealand Ministry of Economic Development, New Zealand Energy Data File, 2011 Calendar Year Edition, (2012), http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-data-and-modelling/publications/energy-data-file/energydatafile-2011.pdf

New Zealand Ministry of the Environment, Fresh Start for Fresh Water reforms 2012, (2011), http://www.mfe.govt.nz/issues/water/freshwater/fresh-start-for-fresh-water/.

New Zealand Ministry of the Environment, Freshwater Reform 2013 and Beyond, (Mar. 2013), http://www.mfe.govt.nz/publications/water/freshwater-reform-2013/freshwater-reform-2013.pdf.

New Zealand North Island Hit by Worst Drought in 30 Years, BBC News Asia (Mar. 15, 2013, 5:45 GMT), http://www.bbc.co.uk/news/world-asia-21797095.

Waitangi Tribunal, The Stage 1 Report on the National Freshwater and Geothermal Resources Claim, WAI2358, (Dec. 7, 2012), http://www.waitangi-tribunal.govt.nz/scripts/reports/reports/2358/C2257DAB-CB5D-481F-9018-6A4F35044D0B.pdf.

Brian Fallow,  From here on every drop counts, The New Zealand Herald (March 14, 2013, 5:30 AM): http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10871078

 

San Luis Unit Food Producers v. United States

Holly Taylor  ·  

San Luis Unit Food Producers v. United States, No. 11-16122, 2013 WL 765206 (9th Cir. Mar. 1, 2013) (holding that the Reclamation Act, Central Valley Project Act, and San Luis Act, do not impose a duty on the Bureau of Reclamation to provide farmers with their preferred amount of water from the Central Valley Project).

In 1902, Congress passed the Reclamation Act, providing for the construction and operation of water collection, storage, and distribution projects in several of the Western States, to reclaim arid lands and support agriculture. The nation’s largest reclamation project, the Central Valley Project (“CVP”), managed by the United States Bureau of Reclamation (“Bureau”), provides water to California’s Central Valley. In 1960, Congress passed the San Luis Act, authorizing the construction and operation of the San Luis Unit, an integral part of the CVP. In 1992, Congress passed the Central Valley Project Improvement Act (“CVIPA”), amending the purposes formerly enumerated for the CVP. The CVIPA established that river regulation, improvement of navigation, and flood control were the first priority of the CVP. The CVIPA listed irrigation, domestic uses, fish and wildlife protection, and restoration as a second priority. For several decades, the Bureau delivered enough water to adequately irrigate farmers’ lands in the area. However, when the Bureau began allowing significant amounts of water to flow free for the restoration of fish and wildlife, it significantly decreased the amount of water delivered to irrigation districts. As a result, the Bureau caused a decrease in the amount of irrigation water available to farmers and farming entities in the Central Valley.

A group of farmers (“Farmers”) sued the Bureau, claiming that various statutes, including the Reclamation Act, CVP Act, and San Luis Act, required the Bureau to deliver an amount of water to irrigation contractors consistent with historic use. The District Court for the Eastern District of California granted summary judgment in favor of the Bureau and the Farmers appealed. The United States Court of Appeals for the Ninth Circuit (“Court of Appeals”) granted a de novo review.

The Farmers claimed that the Bureau violated its statutory duties (1) to “operate” the San Luis Unit in a manner that fully utilizes it for irrigation above other purposes, (2) to “exercise” its water rights to San Luis water, and (3) to “recoup Project costs.”

Asserting that the Bureau has a duty to operate the San Luis Unit in a manner fully utilizing the water for irrigation purposes, Farmers cited 43 U.S.C. § 521. Section 521 authorizes the Secretary of the Interior to contract with users to supply water for non-irrigation purposes from a project irrigation system as long as there is no detriment to irrigation purposes. The Farmers alleged that the Bureau’s re-allocation of water to support fish and wildlife was detrimental to the irrigation project and caused their injury. The Court of Appeals found that the Bureau did not contract to provide water for the protection of fish and wildlife, but was required to do so by CVPIA. Thus, the Court of Appeals determined that the Farmers did not identify a contract that caused the harm.

The Farmers also cited the CVP Act’s provision for the sale of electric energy, to allow full utilization of the CVP and accomplish the CVP’s purposes of river regulation, irrigation, and other uses. The Farmers again claimed that the Bureau must use CVP project water for irrigation purposes before other non-irrigation purposes. The Court of Appeals concluded that the Bureau did deliver water to irrigation contractors and that the CVP Act does not require the delivery of any particular amount of water.

The Farmers also relied on the San Luis Act, which states that the “principle purpose” of the San Luis Unit is to provide water for irrigation and specifies necessary water capture, storage, and distribution features of the unit. The Farmers alleged that the statutory language created a mandatory duty to deliver the Farmers’ preferred amount of irrigation water prior to supplying water for fish and wildlife protection efforts. The Court of Appeals determined that the statute did not create a duty to distribute a specific amount of water for irrigation, but merely described the necessary engineering features of the San Luis Unit.

Further, the Farmers claimed that the Reclamation Act directed the Secretary of the Interior to use Bureau funds for the operation and maintenance of reclamation projects. The Farmers proclaimed that the word “operation” meant “utilization of the works as fully practicable,” and that the Bureau must operate projects to the fullest practicable extent for irrigation before supplying water for non-irrigation purposes. The Court of Appeals ultimately determined that the Reclamation Act does not affirmatively require any particular managerial action on the part of the Bureau.

The Farmers also claimed the Bureau had a duty, under the Reclamation Act, to exercise its water rights within the San Luis Unit and to provide water to irrigation districts consistent with the amount historically used. The Reclamation Act does require the Bureau to comply with any state water law restrictions that are consistent with federal law. Under section 1702 of the California Water Code, the State Water Resources Control Board (“Board”) cannot grant a permit holder’s application for a change in the “purpose of use” unless the change will not injure any legal user. The Farmers claimed that the Bureau’s reduction in water collection, to support fish and wildlife protection efforts, changed the “purpose of use” and caused their injury and, thus, was a violation of section 1702. The Court of Appeals found that the plain meaning of section 1702 required the Board to make a “no injury” finding, but that section 1702 is in no way controlling over actions of the Bureau.

The Farmers’ next claimed the Reclamation Act provides that water rights acquired under the act belong to the land irrigated and are measured by beneficial use. The Farmers asserted they were entitled to the amount of water historically put to beneficial use. The Court of Appeals determined that the statement that “the beneficial use of water is the ‘measure’ of a water right,” was too vague to be interpreted as a directive to the Bureau to deliver the Farmer’s preferred amount of irrigation water.

The Farmers’ also cited the San Luis Act, providing that construction of the San Luis unit would not begin until the Secretary of the Interior was able to secure the necessary water rights to satisfy the purposes of the Unit. The Farmers alleged that non-irrigation use or non-use of water compromised the Bureau’s ability to satisfy the purposes of the Unit and, therefore, was impermissible under the San Luis Act. The Court of Appeals, however, found that the statute only imposed a condition on the construction of the San Luis Unit and did not require that the Bureau deliver a certain amount of irrigation water prior to providing for fish and wildlife protection efforts.

Lastly, the Farmers claimed that the Bureau was required to recover the costs associated with the construction, operation, and maintenance of the CVP through the sale of more irrigation water. The Court of appeals disagreed, determining that Congress intended those benefiting from reclamation projects to recover costs and the Secretary of the Interior to determine how to best recoup those costs. Therefore, the Court of Appeals determined that the Farmers could not compel the Bureau to sell more irrigation water in order to recoup costs.

The Court of Appeals affirmed the District Court’s decision to grant summary judgment to the Bureau reasoning that none of the statutes raised by the Farmers imposed a duty on the Bureau to deliver the preferred amount of water to the Farmers’ irrigation contractors.

Cent. Basin Mun. Water Dist. v. Water Replenishment Dist. of S. Cal.

Alex Bayee Besong  ·  

Cent. Basin Mun. Water Dist. v. Water Replenishment Dist. of S. Cal., 150 Cal. Rptr. 3d 354 (2012) (certified for partial publication) (holding that a water replenishment district did not have to comply with the California Environmental Quality Act prior to declaring a water emergency because it did not have any environmental impact and declaration of a water emergency was a ministerial act for which the Water Replenishment District had no authority to modify existing physical solutions imposed by prior water rights adjudications).

The Water Replenishment District of Southern California (“WRD”) declared a “water emergency” in the Central Basin, a groundwater basin within Los Angeles County, on November 19, 2010.  Under the terms of a judgment (“the Judgment”) from the Superior Court of Los Angeles County dating back to 1991, WRD may declare a water emergency when the basin resources “risk degradation.”  A water emergency declaration enlarges the portion of water that a pumper may carry over to another year, thereby preserving a pumper’s right to water longer than usual.  Therefore, a pumper can extract a greater amount of water than his annual allotment during a water emergency because of an extended overextraction period.  The Judgment was an equitable decree aimed at alleviating overdrafts and depletion of water resources in a given area consistent with California’s Constitutional mandate to prevent waste.  However, a declared water emergency is limited to a one-year duration.

The Central Basin Municipal Water District (“CBMWD”) challenged the WRD’s declared water emergency on the ground that it did not comply with the California Environmental Quality Act (“CEQA”).  CEQA is a broad environmental law, mirroring many provisions of the National Environmental Policy Act, which applies to most public agency decisions to approve projects with potential adverse effects on the environment.  CBMWD argued that WRD “ignored the significant environmental impacts” associated with declaring a water emergency.  CBMWD argued that WRD should have considered effects of increased short-term holding and long-term pumping by water users which occur as a result of a water emergency declaration.  CBMWD also argued that WRD did not contemplate the effects of delayed replacement of overextracted groundwater because a water emergency increased pumpers’ carry over rights from one to five-years.

WRD demurred to CBMWD’s petition, and the Superior Court of Los Angeles County (“Superior Court”) sustained WRD’s demurrer.  The Superior Court found in favor of WRD because the Judgment explicitly authorized WRD to declare the water emergency.  Although WRD was a public agency usually subject to CEQA, WRD was acting as an agent of the court in implementing the terms of the Judgment.  The Superior Court reasoned that groundwater usage authorized by the governing Judgment is exempt from CEQA because the Judgment approved the Watermaster’s authority to resolve groundwater usage issues in the Central Basin.  CBMWD appealed to the Second District, Division 8, California Court of Appeal (“Appeals Court”).

The Appeals Court held that CEQA was inapplicable in a water emergency declaration.  It explained that CEQA distinguished between ministerial and discretionary projects.  CEQA applies only to discretionary projects, for which the agency must prepare an environmental impact report (“EIR”).  The Appeals Court further explained that ministerial projects are ones in which WRD may not shape the process to address environmental concerns.  The Appeals Court specifically held that the declaration of a water emergency has no environmental impact and therefore is not a project within the definition of CEQA.  The Appeals Court also held that WRD had no discretion to alter the terms of the Judgment even if an EIR was prepared.  Therefore, even if WRD considered the environmental effects of declaring a water emergency, an EIR would have no effect because WRD simply had no discretion to modify carry over rights or delayed replenishment.

The Appeals Court further held that even if CEQA was applicable, the Judgment’s physical solution trumped CEQA.  The Appeals Court explained that where an existing judgment or decree implementing a Constitutional mandate is in place establishing a physical solution, the agency cannot act in contravention of the physical solution.  Therefore, WRD had no discretionary authority and only the court had the power to act.

Accordingly, the Appeals Court affirmed the trial court’s ruling and allowed WRD’s declared water emergency to stand.

Tri-State Generation & Transmission Ass’n v. D’Antonio

James Fogg  ·  

Tri-State Generation & Transmission Ass’n v. D’Antonio, 289 P.3d 1232 (N.M. 2012) (holding the New Mexico State Engineer’s adoption, by legislative direction, of new Active Water Management regulations for the administration of water rights in priority constitutional against separation of powers, due process, and vagueness claims).

In 2003, the New Mexico Legislature (“Legislature”) enacted N.M. Stat. Ann § 72-2-9.1, directing the New Mexico Office of the State Engineer (“State Engineer”) to adopt rules to administer water allocations efficiently and in priority.  In 2004, the State Engineer responded by developing the Active Water Resource Management regulations (“AWRM”), allowing the State Engineer to identify water districts in need of management and appoint water masters to those districts.  Under AWRM, the masters evaluate their respective district’s supply and manage the allocation of that supply according to users’ priority dates.

AWRM establishes “administrable water rights” to impound, store, or release water according to the elements determined by a court or the State Engineer.  When the task falls to the latter, the Engineer determines the users’ priority date using a hierarchy of (i) final adjudicatory decrees; (ii) adjudicatory subfile orders; (iii) offer of judgments; (iv) hydrographic surveys; (v) issued licenses; (vi) issued permits; and (vii) historic, beneficial uses.  The State Engineer publishes the priority dates; users may appeal the determinations.  Tri-State Generation and Transmission Association (“Tri-State”), an electric power cooperative with water rights, filed suit challenging AWRM on separation of powers, due process, and vagueness grounds.

The District Court of Socorro County (“district court”) found § 72-2-9.1 violated Article III, Section 1 of the New Mexico Constitution because the State Engineer’s authority to determine priority dates originated from the century-old § 72-2-9 granting weight to licenses and adjudications only.  Therefore, the district court reasoned, the State Engineer could only consider evidence of adjudications or licensing ((i), (ii), (iii), and (v) above) when determining administrable rights.  The district court found the remaining provisions of AWRM unconstitutionally beyond the scope of the State Engineer’s statutory authority, in violation of due process, and contrary to constitutional guarantees of inter se adjudication of water rights.

The New Mexico Court of Appeals (“Court of Appeals”) affirmed in part.  The Court of Appeals held that because § 72-2-9.1 granted no new authority to the State Engineer to adopt AWRM, the regulations unconstitutionally exceeded the State Engineer’s authority.  The Court of Appeals, however, reversed the district court’s due process ruling as speculative.  The State Engineer petitioned and Tri-State cross-petitioned to the New Mexico Supreme Court (“Court”).  The Court considered four issues on appeal.

First, the Court considered the State Engineer’s authority to implement AWRM.  Applying two canons of statutory construction, the Court held the Legislature intended to expand the State Engineer’s authority by enacting § 72-2-9.1.  The Court reasoned that enacting legislation entitled, “An Act Relating to Water Providing Authority for State Engineer…” indicates a grant of legislative authority by its plain meaning.  Further, the statute’s placement within the statutory framework did not limit this intent because the Legislature only indicated that a new section be drafted, not that it be placed in a specific sub-section.

Second, the Court looked at Tri-State’s claim that AWRM violated separation of powers because only inter se adjudication could determine water rights in New Mexico.  The Court distinguished adjudication from administration, holding the State Engineer constitutionally permitted to administer the water supply.  The Court noted that while the State Engineer lacks the authority to adjudicate water rights, nothing in the New Mexico Constitution requires adjudication.  Instead, the New Mexico Constitution offers broad terms that the waters of the State “be subject to appropriation for beneficial use, in accordance with the laws of this state.”  The Legislature, the Court held, constitutionally delegated the task of administering water to the State Engineer.

Third, the Court addressed Tri-State’s claim that AWRM violated procedural due process requirements.  The Court held there was no violation for three reasons.  First, to prevail, Tri-State needed to establish deprivation of liberty or property without being afforded adequate procedural protections.  According to the Court, because water rights establish a right to use water, not own water, regulation is an exercise of police power, not deprivation.  Second, regulation by the State Engineer, where permitted, upholds the system of prior appropriation.  Because AWRM establishes a system for the administration of priority dates, the Court held, it upholds prior appropriation; inter se adjudication is not required.  Finally, a claim is ripe for review only when a party presents an actual controversy stemming from non-speculative harm.  Tri-State asserted a claim that a lack of water would destroy their property.  The Court held Tri-State’s claim unripe for review because the State Engineer had yet to make a priority determination as to Tri-State’s rights and Tri-State had yet to appeal any forthcoming determination.

Finally, the Court considered Tri-State’s claim that AWRM was impermissibly vague.  The Court explained that a statute violates due process when it is so vague that people of ordinary intelligence guess at its meaning and differ as to its application.  The Court held § 72-2-9.1 was not impermissibly vague because it provided an express hierarchy with examples and gave sufficient notice to those potentially affected.

Accordingly, the Court reversed the Court of Appeals’ decision regarding the separation of powers claim; affirmed, in part, the Court of Appeal’s speculative due process decision; and held the statute not impermissibly vague.

 

United States v. Alpine Land & Reservoir Co.

Christopher Butler  ·  

United States v. Alpine Land & Reservoir Co., 2012 WL 4442804 (D. Nev. 2012) (holding the state engineer did not err in: (i) finding special administration rules under the Alpine Decree require a change in point of diversion from one segment to another on the Carson River must result in a change in priority date; (ii) finding a constructive point of diversion, rather than a physical point of diversion, for the purposes of retaining priority would violate Nevada water law; and (iii) granting change applications, as filed, would harm existing rights).

The United States Fish and Wildlife Service (“FWS”) filed seven applications with the Nevada State Engineer to change the place of use of its water rights.  Each of the water rights was from the Carson River and listed the point of diversion as Buckland Ditch. Buckland Ditch is a point in Segment 7(e) of the Carson River as designated by the Alpine Decree.  The State Engineer denied the applications, reasoning the applications, as filed, would harm existing rights holders.  The State Engineer found that the applications would harm existing rights holders because the actual point of diversion would have been the Carson Dam, a point in Segment 8 downstream of the Buckland Ditch.  FWS appealed the State Engineer’s ruling.

The United States District Court for the District of Nevada (“district court”) created the Alpine Decree in a previous ruling as a means of administering Carson River water rights.  In the summer, some segments of the river are dry, while downstream segments have sufficient flows due to underground drainage or return flows from irrigation.  During these conditions, it is physically futile for upstream junior appropriators to satisfy downstream senior appropriators’ calls because the river is often dry.  Historically, farmers in the Carson River region administered the river in segments through mutual cooperation and practical experience with the physical limitations.  The Alpine Decree formally divided the Carson River into eight segments and required autonomous administration of each segment.

FWS appealed, claiming the State Engineer erred in: (1) interpreting the Alpine Decree to require a change in priority when the rights point of diversion is changed to another segment; (2) finding a constructive point of diversion, rather than a physical point of diversion, for the purposes of retaining priority would violate Nevada water law; (3) applying the wrong legal standard; (4) relying on an extra-record comment when interpreting the Alpine Decree; and (5) denying the applications rather than granting them with conditions.

First, the district court found the State Engineer correctly interpreted the Alpine Decree to require a change in priority date when a change in point of diversion application contemplated moving water rights from one segment to another on the Carson River.  Nevada water law typically permits a rights holder to change the point of diversion without losing priority of right.  However, the Alpine Decree modifies this right and limits it to changes within the original segment on the Carson River.  The district court reasoned that the Alpine Decree was consistent with Nevada water law, provided the new point of diversion is in the same segment as the original water right.  Additionally, the district court reasoned that to continue recognizing the date of priority for such a change would be contrary to the principle of reducing waste, one the Alpine Decree intended to alleviate.

Next, the district court held that establishing a constructive point of diversion, rather than a physical point of diversion, for the purposes of retaining priority would violate Nevada water law.  FWS admitted it intended to divert proposed transfer water at Carson Dam, not Buckland Ditch.  However, FWS argued that Buckland Ditch was a valid point of diversion because it served as the constructive point of diversion.  Though Buckland Ditch was not the physical point of diversion, it was the point of diversion for administrative and accounting purposes.  The district court held that FWS’s cited precedent did not address the issue of a constructive point of diversion, was not relevant in context for this matter, and was limited to appropriations without diversions.

Next, the district court ruled the State Engineer did not err in finding the applications, as filed, would harm existing water rights holders. FWS proposed to divert and transfer water within a new segment of the river.  The proposed transferred water rights would conflict with existing water rights in multiple sections of the river.  Therefore, the district court found that the State Engineer did not err in finding the applications would harm existing rights holders.

Next, the FWS argued the State Engineer relied on an extra-record comment when interpreting the Alpine Decree.  During a conference, the Federal Water Master made an extra-record comment to the State Engineer about the historical practice of requiring a change of date of priority.  The district court found the comment irrelevant because interpretation of the Alpine Decree was a matter of law concerning loss of priority when a water user changes the point of diversion from one segment to another.

Finally, the district court rejected FWS’s argument the State Engineer erred in denying the applications, rather than granting them with conditions, because the applications did not provide an accurate location of diversion.  Additionally, FWS did not demonstrate any conditions that would have protected the public from adverse impacts of the applications.

Accordingly, the district court denied FWS’s petition challenging the State Engineer’s ruling.