United States v. Alpine Land & Reservoir Co.

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.