Garber v. Wagonhound Land and Livestock Co.

Garber v. Wagonhound Land and Livestock Co., 279 P.3d 525 (Wyo. 2012) (holding that evidence was sufficient to establish that a transfer of reduced water right would not exceed historic consumption or diversion under existing use or diminished return flow; transfer would not injure other lawful appropriators; and Wyoming State Board of Control reasonably reduced the right available for transfer by four percent to account for loss of tributary inflow resulting from transfer).

In the fall of 2007, VenJohn and Wagonhound (“Petitioners”) petitioned the Wyoming State Board of Control (“Board”) to change the place of use, point of diversion, and means of conveyance for water appropriations on 174.8 acres held by VenJohn for use on Wagonhound’s property. Intervening landowners (“Objectors”) objected to the petition, and the Board held a contested hearing. The Board voted to approve the transfer of water rights attached to 152.5 acres, which included reductions to account for lands VenJohn historically irrigated with contract reservoir water and a four percent loss of tributary inflow as a result of the transfer. Objectors appealed the Board’s decision to the District Court of Converse County, Wyoming. The district court upheld the Board’s decision, and Objectors appealed to the Supreme Court of Wyoming. The Wyoming Supreme Court (“court”) affirmed.

Wagonhound’s property is located approximately 30 miles upstream from VenJohn on the North Platte River. Two tributaries, LaBonte Creek and Wagonhound Creek, enter the North Platte between the historic and proposed points of diversion. These creeks are subject to low or no flow during the late summer. Wagonhound planned to use the addition of VenJohn’s water rights to irrigate crops under three central pivot sprinklers—a system very similar to the system VenJohn historically used.

Objectors first argued that granting the petition would violate the statute governing changes in place of use of water rights, Wyo. Stat. § 41-3-104, which prohibits the transfer of water rights that results in an increase in either the quantity of water used or the rate of diversion under the existing use. Objectors based their claim on the assumption that Wagonhound would divert at the maximum allowable rate under the right for the entire irrigation season and thereby exceed VenJohn’s historic diversion and use by 328 acre-feet. The court applied the substantial evidence standard of review and rejected this assumption, noting that such maximum diversions would be highly unlikely or impossible. The court held that the Board correctly determined the amount available for transfer based on the acreage VenJohn historically irrigated consistent with the duty of water.

Objectors next argued that the transfer would violate the § 41-3-104 prohibition against increasing the historic amount consumptively used under the existing use. Objectors based their claim on the fact that Wagonhound’s complex irrigation system could apply water from the VenJohn right to any of the fields fed by the system, regardless of whether the land was attached to a VenJohn right. The court rejected Objector’s argument as speculative and dismissive of the ability of authorities to regulate water resources. Instead, the court held that on-the-ground factors such as climate and soil type provided evidence to support the Board’s decision.

Objectors further argued that transfer of the VenJohn right would violate § 41-3-104 by reducing return flows. Objectors supported their argument by claiming that Wagonhound diverted water into lined ponds that would allow less return flow than VenJohn’s unlined ponds. The court held that the Board’s decision was reasonable, considering evidence that both VenJohn and Wagonhound’s systems allowed similarly low amounts of return flows.

Objectors also argued that the transfer would violate § 41-3-114 by causing injury to the rights of other appropriators. Objector’s claimed that any negative change in flow resulting from the transfer would injure junior appropriators by increasing the likelihood of an allocation year and regulation of junior rights. The court upheld the Board’s decision that, based on expert testimony, the transfer would not result in measureable changes to the flow of the North Platte that could injure other appropriators.

Objectors also argued that the transferred right should be reduced by 7.6 percent to account for lost tributary inflow resulting from the transfer, as opposed to the four percent reduction approved by the Board. The Objectors based their reduction calculation on an historic average of annual flows at VenJohn’s diversion point, while Petitioner’s expert consultant espoused a calculation based on historic median flow to better account for the disparity between dry months and flood events. The Court deferred to the Board’s expertise and applied a 4 percent reduction, noting the complexity involved in such inflow calculations.

Finally, Objectors argued that the court should reverse the Board’s decision to allow amendment of the petition to meet the §41-3-114 requirement that a petition fully identify ownership of an appropriation or establish sole ownership by the petitioner. The original petition failed to identify the ownership interests of three individuals, and the Board directed Petitioners to amend the petition maps to reflect these omitted interests. The court upheld the Board’s decision, noting that Objectors failed to explain how the Board’s process was inappropriate, in violation of statutory or Board rules, or injurious to other landowners.

Therefore the court rejected Objectors’ arguments and affirmed the decision of the Board allowing for the transfer of the VenJohn right to Wagonhound.