In re Nevada State Eng’r Ruling No. 5823

In re Nevada State Eng’r Ruling No. 5823, 277 P.3d 449 (Nev. 2012) (holding that jurisdiction over the appeal of a decision by a state water engineer is not limited to the county where the applicant’s water rights lie, but rather could be heard by a court in the county where a party was affected by the decision).

State Engineer Ruling 5823 allocated groundwater rights in the Dayton Valley Hydrographic Basin (“Basin”) located in Lyon County.  Churchill County and the Pyramid Lake Paiute Tribe (“Appellants”) believed that the Basin was already over-appropriated and the new allocations would negatively affect their interests.  They filed appeals in the Third Judicial District Court in Churchill County (“District Court”), invoking Nev. Rev. Stat. § 533.450(1) which provides judicial review “in the nature of an appeal” to anyone who is affected by a decision of the State Water Engineer.

The statute also provides that an appeal “must be initiated in the proper court of the county in which the matters affected or a portion thereof are situated.”  The State Engineer demanded the venue change from Churchill to Lyon County asserting improper venue, but Appellants believed that Nev. Rev. Stat. § 533.405(1) allowed for more than one possible forum and that either court was proper.

The Pyramid Lake Paiute Tribe filed a separate appeal in federal court, United States v. Alpine Land & Reservoir Co., Case Subfile No. 3:73 cv 00203 LDG (D.Nev. 2008), making similar arguments to those in their District Court appeal.  The federal court case, which was decided before the District Court case began, ruled against the Pyramid Lake Paiute Tribe and dismissed their appeal.

The District Court then heard this case.  It held that it is the location of the water rights of the applicant that determines which court has jurisdiction to hear an appeal from a State Engineer’s decision.  Therefore, it lacked subject matter jurisdiction, and could not change the venue.

After Appellants filed this appeal, the Ninth Circuit Court of Appeals vacated Alpine, based on United States v. Orr Water Ditch Co., 600 F.3d 1152 (9th Cir. 2010) (“Orr Water Ditch”) which rejected the proposition that the location of the applicant’s water rights determines jurisdiction under Nev. Rev. Stat. § 533.450(1).  Then, the Supreme Court of Nevada (“Court”) reviewed this case de novo to determine whether the District Court had subject matter jurisdiction in light of the Ninth Circuit’s decision to vacate Alpine.

The Court analyzed the language of Nev. Rev. Stat. § 533.450(1), in particular the phrase “matters affected or a portion thereof.”  It held that the phrase signifies multiple potential forums and that if “a portion” of the “matters affected” are located in a certain county then it is a proper forum for all of the “matters affected.”  The Court further held that Respondents view that “matters affected” only refers to their interests, not those of the Appellants, is unreasonable.

The Court followed the Orr Water Ditch decision and stated that potential problems could occur if only the court of the county where the applicant’s water rights lie had jurisdiction.  The Court noted that the District Court’s decision was at odds with Orr Water Ditch, which, while not mandatory precedent, was persuasive.  The Court then concluded that subject matter jurisdiction was not limited to the location of an applicant’s water rights and the District Court erred in dismissing Appellant’s appeals for lack of subject matter jurisdiction.

Accordingly, the Court vacated and remanded the judgment of the District Court.