Rand Props., LLC v. Filippini, No. 66933, 2016 WL 1619306 (Nev. Apr. 21, 2016) (holding that: (i) a person who has acquired a right to a quantity of water from a stream may take it at any point of the stream and may change the character of use as long as it does not affect the rights of others; (ii) stock water rights on public lands pass by chain of title in Nevada; and (iii) a private party may convey a stock water appropriation certificate).

On June 7, 2011, Daniel and Eddyann Filippini (“Filippini”) filed a complaint to adjudicate stock and irrigation water rights on Trout Creek against Julian Tomera Ranches, Inc. (“Tomera”), and Rand Properties, LLC. (“Rand”). The Sixth Judicial District Court, Lander County adjudicated the case on April 8, 2013, and established priority dates for each party’s stock and irrigation water rights. Rand appealed to the Supreme Court of Nevada on grounds that the district court erred in its finding of priority dates, stock water rights title passage, and conveyance of a stock appropriation certificate.

First, Rand asserted that its priority date began in 1869, and that the district court erred by finding that Rand’s priority date began in 1901. The district court found that a change in the place of use on Trout Creek by Rand’s predecessors in interest created a new appropriation instead of a continuation of the chain of title because it occurred before statutory enactment of a law allowing for one to change the place of use. By setting a later priority date, the district court did not rule on whether Rand had proper title to its claim dating to 1869.

The Court overturned the district court, finding it relied on an erroneous conclusion of law. The Court looked to Nevada common law and held that a person who has acquired a right to a quantity of water from a stream may take it at any point of the stream, and he may change the character of its use at will as long as it does not affect the rights of others. The Court then vacated and remanded the issue for further proceedings as to Rand’s connection to the chain of title.

Second, Rand argued that the district court did not sufficiently explain its decree that Filippini’s priority date began in 1871 through a connection by title to a predecessor in interest named James Hughes and lacked the evidentiary support of a conveyance. The petitioner claimed that Filippini did not offer evidence that established a connection of title between 1891 and 1897. The Court concluded the district court’s ruling relied upon was insufficient. Under the district court’s ruling, it did not need to rule on the connection of title because it held that Rand’s priority date did not predate 1897. Accordingly, the Court vacated and remanded for further proceedings on the issue.

The Court then turned to the district court’s finding that a predecessor in interest named J.R. Bradley established the domestic stock water priority date held by Filippini in 1862 because Bradley’s outfit drank and diverted water from Trout Creek. The district court found that federal grazing permits acted as a proxy for establishing stock water rights and that proof of a chain of title is unnecessary for stock water rights on public lands owned by the United States and that each party held federal grazing permits. The Court disagreed, finding that stock water rights on public domains pass by chain of title in Nevada and that federal grazing rights and water rights are separate issues. Subsequently, the Court vacated and remanded to the district court to find on the issue of the party’s current rights to the disputed stock water that had passed by a chain of title.

Finally, the Court overturned the district court’s decision to prohibit the conveyance of a grazing certificate to Rand. Leroy Horn originally secured the certificate, certificate 12160, by building the Trout Creek pipeline to water his 600 cattle on a federal grazing allotment in 1979. In 1989, Horn agreed to sell his grazing preferences to Tomera and to sell Badger Ranch to Filippini in a three-way contract. The contract included the federal grazing privileges and all water rights, including stockwatering rights used in connection with the land. However, when Rand purchased Trout Creek Ranch from Broughton in 2009, the deed purported to convey certificate 12160 to it. On appeal, Rand argued that, because a Nevada statute requires conveyance of water rights by deed, Tomera cannot be the proper owner, and Rand was a bona fide purchaser nonetheless.

The district court relied on a Nevada statute prohibiting conveyance of stock water appropriation certificates to conclude that Rand could not own certificate 12160. The district court found that Rand could not put the water to beneficial use under the statute since it did not possess a grazing preference for 600 cattle at the place of use. The Court concluded that the district court erred in determining that the statute prohibited the conveyance to Rand; although the statute prevents issuance of a certificate from the State Engineer, it does not prohibit conveyance of certificates by a private party. Nevertheless, the Court found that Tomera could be the proper owner, since the conveyance occurred prior to the enactment of the statute requiring a person to obtain title to a certificate by deed. The Court then vacated and remanded to the district court to properly review Rand’s bona fide purchaser defense.

Accordingly, the Court reversed the judgment of the district court and remanded for further proceedings.

 

Dalton Kelley

A stock watering tank in Nevada. Flickr user Thure Johnson, Creative Commons.


Background

The Colorado River Basin (“the Basin”) spans parts of seven western states: Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming.  The Basin currently provides water to around 40 million people and 4 million acres of irrigated agricultural land, making it one of most important watersheds in the western United States.  Beginning in January of 2010 and lasting for three years, the Department of the Interior funded a supply and demand study of water use in the Basin through the Bureau of Reclamation and its WaterSMART program.  Completed in December 2012, the published full report of the Colorado River Basin Water Supply and Demand Study (“Study”) can be found in the links provided below.

 

The Study

The Study evaluated future imbalances in the watershed over the next 50 years, up to year 2060.  The Study, however, did not result in any decision on how exactly the future imbalances will be addressed.  Performed in four phases, the Study (1) assessed the water supply of the watershed; (2) assessed the demands for water within the basin; (3) analyzed the reliability of the computer models; and (4) developed and evaluated strategies to decrease the imbalance. The Study found the average imbalance between supply and demand for water would be more than 3.2 million acre-feet.  Most of this imbalance is due to an increase in demand from municipal and industrial users because of an estimated doubling of the population within the Basin.  The study estimated that by 2060 the population could be approximately 76.5 million people.

 

It is important to note that any future water supply and demand scenarios predicted within the watershed are highly uncertain because an infinite number of possibilities exist.  While no study will be exact, the Bureau of Reclamation analyzed four different scenarios for both supply and demand.  On the supply side, four scenarios exist: (1) an Observed Resample scenario that looked at water tends over the past 100 years; (2) a Paleo Resampled scenario that looked at water trends over the past 1,250 years; (3) a Paleo Conditioned scenario that looked at water trends over the past 1,250 years but conditioned on the water values observed over the past 100 years; and (4) a Downscaled GCM Projected scenario estimating that the climate will continue to warm substantially over the next few decades.  This last scenario estimated that the natural water flow within the basin will decrease by approximately 9% over the next 50 years.  On the demand side, four scenarios also exist: (1) a Current Projected Growth model; (2) a Slow Growth model; (3) a Rapid Growth model; and (4) an Enhanced Environment Growth model accounting for enhanced environmental stewardship.  All the scenarios were then run in different combinations through the Colorado River Simulation System in RiverWare software, obtaining a range of potential future system conditions.

 

The Study next evaluated more than 150 options and strategies on how to resolve imbalances in the watershed.  The options and strategies can be generally organized into four groups.  The first group included options that increase water supply such as reuse, desalination, and importation.  The second group included options that reduce water demand from both M&L and agricultural conservation.  The third group included options that modify operations such as transfers & exchanges and water banking.  Finally the last group included options that focus on governance and implementation of water such as stakeholder committees, population control, and reallocation.

 

Finally, the Study listed ten general areas of options and strategies seeking to resolve water imbalances that are realistic to implement within the watershed: water conservation and reuse; water banks; watershed management; augmentation; water transfers; tribal water; environmental flows; data and tool development; climate science research; and partnerships.  The Bureau of Reclamation closed public comments on the Colorado River Basin Water Supply and Demand Study on April 19, 2013, and all comments will be summarized and considered in planning activities.

 

Brief Comments on the Study

The best solution laid out in the Study is water conservation.  Because irrigated agriculture is responsible for approximately 70% of watershed water use, conservation is this sphere could result in significant savings.  Effective conservation can also occur in cities by reducing water use in outdoor landscapes because half of all city water use is involved in such endeavors.  With desalination technology rapidly evolving, it could become another very attractive option.  Desalination projects do occur in other countries, but the energy cost and cost of recovery are still very high.


Sources:


Las Vegas is deceptive, when one visits the area water is visible everywhere—in fountains, swimming pools, and on golf courses.  Las Vegas literally means “the meadows” in Spanish, and was named for the artesian springs that created an oasis in the middle of the desert.  Now, however, due to the over-consumption of the artesian springs, Las Vegas is an artificial oasis created by technology and engineers for tourists.  These technologies bring water to a place where no water exists.  Since Las Vegas only receives about four inches of rain a year, the city obtains most of its water from the Colorado River; yet that water is rapidly dwindling and some predict by the year 2060, the river will be short by 3.2 million acre-feet a year.  The water has fallen so much in Lake Mead that the Southern Nevada Water Authority (“SNWA”) is currently inserting another pipe into Lake Mead due to its falling water levels.  The reality of the Colorado River being overdrawn has forced SNWA to begin to look elsewhere for its water.

The SNWA has attempted to come up with alternative solutions for Las Vegas and the surrounding areas to conserve water and become sustainable.  These solutions include the groundwater project (which involves taking water from four rural valleys in eastern Nevada’s White Pine and Lincoln counties), turf removal plans, and recycling water.

Groundwater Project

Currently, Las Vegas obtains about 10 percent of its water supply from groundwater, and the rest comes from the Colorado River.  In order to obtain the groundwater from four rural valleys in eastern Nevada, in 1989, the Las Vegas Water District first submitted the groundwater plan to the State Engineer.  The SNWA was formed in 1991 and it continued to pursue groundwater in eastern Nevada.  In 2012, the State Engineer granted SNWA the water rights in Spring, Cave, Delamar, and Dry Lake valleys.  SNWA submitted a proposal to the Bureau of Land Management (“BLM”) in order to build a pipeline to transport the water to Las Vegas and the surrounding areas.  The BLM has given the SNWA permission to build 263 miles of pipeline to divert the water from the valleys to Southern Nevada, and in May 2013, BLM granted rights-of-way across federal land for the Groundwater Development Project.  The SNWA hopes that this project will reduce Nevada’s reliance on the Colorado River.

Although the groundwater project could help the Las Vegas area with their water troubles in the future, there is much opposition to it.  First, many in agriculture do not want to sacrifice their water and land for Las Vegas’ groundwater project.  The SNWA would be pumping the water out of rural Nevada and diverting the water from farms to the city.  While the SNWA has already bought much of the agricultural land that would be affected by the project for inflated prices, many farmers refuse to sell their land.  As the farmers sell their land and move out of the eastern counties, many small businesses who rely on their patronage will also go out of business and be forced to move.

Opposition also comes from environmentalists who are worried that if the SNWA begins to withdraw water, there will be less water for native desert plants.  According to environmentalists, if the water table is drawn down too far, the plants will begin to die, which could result in a dust bowl.  Finally, many species of wildlife will also be adversely affected if the water is diverted from eastern Nevada to Las Vegas because their habitats will be permanently altered due to lowering water levels.

Turf Removal and Water Recycling

Contrary to what many people believe, it is the residents of Las Vegas who waste the most water and not the resorts.  The resorts use only about three percent of diverted water from the Colorado River.  The remainder of the water is used by residents to water their lawns.  In order to combat and lessen the outdoor use of water, Las Vegas and surrounding areas have used “cash for turf removal” as a way to conserve water in Nevada.  The turf-removal program is very important because the water can evaporate easily in the hot desert and it cannot be collected and recycled for later use.  The turf-removal program encourages residents of Las Vegas to remove their lawns and replace them with plants that are native to the desert, which require less water than the grass that is normally planted outside of homes.  The replacement of lawn for native desert plants is called xeriscaping.  Las Vegas has also been trying to conserve water by capturing water that has been used by residences and resorts and recycling it. This water can be used to irrigate golf courses or it could be treated and sent back into the Colorado River.

Conclusion

Las Vegas has a major influence on the way that Nevada treats its water.  The culture of over-consumption provides most of the economic support for Nevada and Las Vegas provides most of the jobs for Nevada.  Although Las Vegas is trying to reduce its reliance on the Colorado River, it is doing it at a cost to rural areas and farmers and ranchers.  However, taking water from other areas of the United States is not enough to make Las Vegas a sustainable city and the SNWA must find other solutions in order to fulfill the city’s need for water.


Sources:

 


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 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.