Four Steps to Writing a Water Transfer Protest

The right to appropriate water in Oregon is fixed by a vested right or by certificate issued by the Oregon Water Resources Department (Department).  In no circumstance is the right to use the water unlimited but is always limited to that which can be beneficially used. In the case of a certificated right, the use of water is restricted to the terms and conditions listed in the certificate. The certificate limits the use of water by: place of use, point of diversion, and type of use. Because water in Oregon remains appurtenant to the land on which it is used, if a water right holder wishes to alter his use in any way, he must file a transfer application with the Department.[1] A change in manner or place of use or a change in a point of diversion can be of particular concern to water users and other interested parties.  Concerned parties file a water transfer protest to the application to either enjoin or limit any water right transfer.  This article offers guidance in writing a protest to a water transfer and provides a brief discussion of some of the grounds that should be considered when filing a protest.

A Protest in Four Steps

1. Read the application, accompanying exhibits, and the Department’s proposed order. In reviewing these materials pay particular attention to any discrepancies, changes or additions between the original application, and the Department’s proposed order.  Also take care to note how the proposed use is different from the previous use.

2. Calendar the date the protest is due.  Protests are due within 30 days after the last publication of newspaper notice or the mailing of the Department’s weekly letter, whichever is later.[2]  Each published notice must include the date on which the last publication will occur. Neglecting to timely submit a protest forfeits the right to challenge the transfer. On the other hand, a timely submitted protest will require the Department to hold a hearing on the proposed transfer consistent with the provisions of ORS 183 pertaining to contested cases.

3. Make a public records request to the Department to copy the entire application file and any related files.  The Department file will contain information related to the historical and previously permitted use of the water.  The material in the Department file will be helpful for the protestant in developing arguments in the protest.  Documents in the file may also serve as evidence and exhibits relevant to the protest.

4. Draft the protest to include every factual and legal issue that can be made in good faith.  A protest should be based on various grounds and include all available protest issues in order to provide the Department with the greatest opportunity to deny or restrict the proposed transfer. Because an argument not raised in the first instance, may be later deemed waived, protestants should try to raise all legal and factual arguments possible. The protestant should reserve the right to amend the protest after the completion of discovery

A water transfer protest filed with the Department must be in writing and include:

1. the name, address and telephone number of the protestant;
2. description of the protestant’s interest in the proposed final order and if the protestant claims to represent the public interest, a precise statement of the public interest represented;
3. detailed description of how the action in the proposed final order would impair or be detrimental to the protestant’s interest;
4. a detailed description of how the proposed final order is in error or deficient and how to correct the alleged error or deficiency;
5. citation of legal authority supporting the protest, if known; and
6. fee if required.[3]

Issues To Raise in Protest 

The grounds for protesting a proposed final order will be unique to each application made.  However, the materials that follow describe a number of common factual grounds for protesting a proposed order from the Department granting a transfer.  Consider the following arguments when writing a protest:

1. The Application is Incomplete or Deficient

The application may be incomplete or deficient if:

• The application does not properly identify necessary elements of the existing water right and proposed transfer;
• The affidavit of non-use is unsatisfactory because affiant did not have ownership for past 15 years or more years.

A transfer application must include:

(1) the name of the owner,

(2) the previous use of the water;

(3) a description of the premises upon which the water is used;

(4) a description of the premises upon which it is proposed to use the water;

(5) the new use which is proposed to be made of the water;

(6) the reasons for making the proposed change; and

(7) evidence that the water has been used over the past five years according to the terms and conditions of the owner’s water right certificate or that the water right is not subject to forfeiture under ORS 540.610.[4]

An application failing to provide any of these items may be deemed incomplete or deficient.  The Department can not grant the transfer based on a deficient application without good cause.

2. Notice not given as required by statute

Upon the filing of a transfer application, the Department must give notice by publication in a newspaper having general circulation in the area in which the water rights are located.  Notice must be published at least once a week for a three week period and include the date on which the last notice by publication will occur.[5]

A request for a transfer involving only a change in place of use or for a change in the point of diversion of less than one-fourth mile, and where there are no intervening diversions between the old diversion and the proposed new diversion, does not require newspaper notice. In this circumstance, the Department must include notice of such application in the weekly notice published by the Department.[6]

Failure of the Department to provide notice can result in a due process violation.

 4. Proposed Order Includes Reopener Conditions

• The Department must make certain factual and legal determinations according to statute and cannot “put them off” to a later time with a reopener condition.

The Department is authorized under to issue of proposed final order containing modifications or conditions to the application so that the public welfare, safety and health are preserved.  As part of its initial review, the Department is obligated to make certain factual and legal determinations.[7]

As part of the public welfare safety and health consideration the Department must consider whether the proposed use is legally restricted or limited by statutes or rules, and whether there is water available for the proposed use, along with any other factual determination that Department concludes is relevant.[8]  These factual and legal determinations become the basis for the conditions that are made part of any proposed final order.  The determinations made by the Department are critical to the extent of the transfer granted that will be reflected in the permit or ensuing certificate.

A condition in a proposed order that allows the Department to abrogate its statutorily required legal and factual analysis creates a reopener condition and is improper.  A reopener condition allows Department to postpone statutory analysis and re-evaluate the proposed used after the water has been appropriated.  Reopener conditions are patently unfair to the water user.  A reopener condition does not necessarily have to be satisfied because the water user receives the permit with language that says that the department “may” require certain action from the user in the future.  Reopener conditions jeopardize the water users continued use of the water should the Department at a later time determine the permit canceled for failing to satisfy a condition.  A proposed final order that allows the Department to put off its statutorily required analysis is also improper because there is no authority for the Department make them.

5. Lack of Perfection: The current appropriator failed to perfect the water right. 

A water right is only valid if it has been perfected according to the terms of the authorizing permit and/or certificate.  Perfection is generally understood to occur when the water user puts the water to use with reasonable diligence.  A lack of perfection can be evidenced by any of the following:

• Construction not completed within the time set fourth in the permit;
• Application to beneficial use not completed within the time set fourth in the permit;
• Lack of diligence.

By statute, water appropriators are required to (1) commence construction work on their water right within the time required by law, (2) prosecute the construction work with reasonable diligence, (3) complete the construction work within the time required by law, or as fixed in the permit, or within such further time as may be allowed under ORS 537.230, and (4) apply the water to beneficial use within the time fixed in the permit.[9] The Department may cancel the permit if an appropriator fails to comply with the aforementioned.  The protestant who discovers that the water appropriator who has made an application for transfer has failed to perfect their right should object to the transfer by initiating a cancellation proceeding under ORS 540.610 – 540.670.

6. Abandonment or Forfeiture: The current water right holder has abandoned the water right. 

 A water right can be lost by abandonment or forfeiture upon showing one or more of the following:

• Lack of continuous use. No beneficial application on all or part of the place of use in any 5 year period looking back 20 years.
• Chosen and conscious neglect to develop demonstrates intent to abandon.
• Permanent, impermeable structures built over all or part of the place of use including buildings, roads, and ditches.

A perfected water right is conclusive evidence of the right to use the water.  The use under the right will continue indefinitely and is subject to loss only under the provisions of ORS 540.610.

ORS 540.610 is a forfeiture statute.[10] ORS 540.610 was passed in 1913 and originally enacted read ”Beneficial use shall be the basis, the measure, and the limit of all rights to the use of water in the state.  Whenever the owner of a perfected and developed water right ceases or fails to use the water appropriated for a period of five successive years, the right to use shall cease, and failure to use shall be conclusively presumed to be an abandonment of the water right.”   The word abandonment has since been removed from the text of the statute.

Forfeiture and abandonment are distinct legal theories. Abandonment is a common-law concept involving intentional relinquishment of a water right.  Abandonment requires intent coupled with actual nonuse.  Abandonment can be demonstrated by the presence of conscious neglect and/or permanent impermeable structures.  Additionally, the filing of a voluntary cancellation affidavit by the owner of the appurtenant land without a physical act of abandonment is considered by the Department to be sufficient intent to cancel the water right.[11]Forfeiture on the other hand is a creature of statute, which occurs only upon nonuse of the water for a prescribed period regardless of the appropriator’s intent. Forfeiture is an involuntary act and occurs when the water is not put to use for five consecutive years. A water right can be lost by abandonment or forfeiture.

With certain exceptions,[12] water that is not used for five or more consecutive years is presumed to be forfeited by statute.  Forfeited water is returned to public ownership and is subject to appropriation.

In order to defeat the presumption of forfeiture and retain the water right, the user must show one or more of the circumstances listed in ORS 540.610(2)(a – m).  Water rights are not subject to forfeiture if the owners use less water to accomplish the beneficial use, as long as they had a facility capable of using the full amount and were “ready, willing, and able to do so.”[13]  When a water user uses water from the designated source and for the designated purpose but from an unauthorized point of diversion for the statutory forfeiture period, the water right will not be forfeited.[14]  Forfeiture is not automatic.  The Department must initiate a legal proceeding and follow specific procedures to cancel a water right due to forfeiture.[15]

Forfeiture is only available within a specific statute of limitations. If the period of non-use ended more than 15 years ago, the water right of use may not be subject to cancellation by law.[16]  Unlike other states, Oregon applies statutory forfeiture to pre-code rights.[17]  However, the question of abandonment is relevant to determination of forfeiture.

7. Historical Use/Injury:  Only the amount of water historically used is available for a transfer.

Evidence of the following historical information may prevent or limit the extent of a proposed transfer:

• The water right has never been fully developed, i.e. only half of the appropriated amount has been historically applied, the remaining unused portion was forfeited or abandoned.
• Water users below the diversion point of the applicant had a right to rely on the applicant’s historical use and pattern of use (rotation) in developing their own use and would be otherwise injured by the change.
• A proposed transfer to historical point of diversion would result in injury.  
• Only the proven consumptive use should be transferred in order to avoid injury.
• Applicant on a delivery system that requires water flow volume from the right proposed for transfer to meet flow for transportation and evaporation needs.
• The proposed use exceeds the rate historically diverted.
• As proposed the proposed use will exceed the rate, duty and/or season of use provided by the existing right.

An appropriator is only entitled to transfer the amount of water that has been historically used.  Sometimes an appropriator will divert their full water right, while they have actually only used half of their right. The unused water may return back to the stream or river as “return flow.”  Any unused water that returns to the stream or river is “abandoned” or “forfeited” by the appropriator.  In order to avoid injury to other users, only water that has been historically used is allowed to be transferred.

8. New Application: The proposed transfer should be considered a new application. 

Since part or all of the water use was never perfected, or was abandoned or forfeited, the application is, to the extent of failure, a new application that must meet public interest criteria of a new application and be given a priority date equal to the date of the transfer application.

This argument is an extension of other arguments.  Because the current water right is not what it purports to be (for example, the of lack of perfection preludes a valid right, or because of forfeiture or abandonment the water right may be less than claimed on the permit or nothing), the requested transfer is actually a request for a new water right and should therefore be given a priority date to that effect.

9. Use is Not Beneficial:  The proposed use is not a beneficial use of the water.

 The transfer application may be protested as proposing a non beneficial use if the following, or similar facts exist:

• There is already sufficient water supply providing for the requested use so that additional supplies would constitute waste.
• Evidence that the use as applied for would be beneficial is not evidenced in the existing record.

One of the fundamental principles in Oregon water law is that the water must be put to a beneficial use.  Beneficial use “is the basis, measure, and the limit of all rights to the use of water in this state.”[18]  A right to divert and use water is valid only to the extent that the water is applied to a beneficial use for a specified purpose.  A wide variety of uses are considered beneficial including: domestic use, municipal water supply, irrigation, power development, industrial purposes, mining, public recreation, protection of commercial game fishing and wildlife, fire protection, navigation, scenic attractions, general agricultural use, nursery operations, temperature control, forest and range management, commercial use, storm water management, aquatic life, wetland enhancement, and other use to which the water may be applied for which it may have a special value for the public.[19]  However, even beneficial uses may be limited if the proposed source has been withdrawn from further appropriation or has been classified by the Department for more limited uses or quantities of use.[20]  Basin plans may further limit or prioritize uses.[21]  Oregon law has no explicit “use preference” except that in times of shortage, domestic purposes have first preference all other uses and agricultural purposes have preference over manufacturing. A transfer will only be approved if the proposed use is deemed beneficial.[22]

10. Interference with Existing Rights. 

If the proposed transfer would injure or interfere with the rights of other users, either senior or junior users, that transfer can not be granted. Evidence of interference can include:

• Reduced Return Flows
  • To the River
  • Other downstream Users
• Reduced Recharge to Underlying Aquifers and Surface Sources

A transfer may not injure other water users.  By statute, the Water Resources Commission must approve a transfer when the proposed change can be effected without injury to existing water rights.[23]  The Commission is required to find an ‘injury to an existing water right’ where “a proposed transfer would result in another, existing water right not receiving previously available water to which it is legally entitled.”[24]  Injury will likely exist where return flow or recharge is reduced by the proposed transfer.

11. No Evidence of Ownership or Rights to Delivery

An applicant for a water right permit must demonstrate either ownership of lands used for the appropriation or the right to traverse such lands.[25] The protestant can challenge the transfer by showing:

• Applicant has no proof that he has ownership, control or access to the existing or proposed point of diversion or place of use.

• Applicant has no evidence that he has an agreement with a district, ditch company, or Reclamation to obtain delivery.

Any transfer request proposing a diversion over non-owned lands must be accompanied by a declaration that the applicant has an easement or written authorization allowing access to the non-owned land.[26]  Additionally, the applicant must provide details about the proposed ditch, canal, or other work by which the water will be put to use.

12. Applicant Does Not “own” the Water Right

Evidence that the applicant does not own the water right can be shown by:

• No title instrument was filed with the application;
• Title search of appurtenant place of use evidences ownership of someone other than applicant;
• Applicant did not retain ownership of appurtenant water rights on sale;
• Applicant did not properly document ownership and continued to use severed water rights.

One of the more obvious flaws of a proposed transfer may be that the applicant lacks ownership of the water right.  The file from the Department will reveal whether the applicant is the owner of record of the water right, whether the applicant filed the appropriate documents identifying ownership, and if appurtenant property has been sold, whether the applicant retained and used the water rights after the sale.

13. Violates Existing Legal Agreement

A proposed transfer may be inappropriate due to:

• A delivery contract (reclamation, irrigation district)
• The proposed use is outside the boundaries of the irrigation district, outside the described contract area, outside the reservation.
• A rotation agreement
• A compact
• A reservation
• A treaty

Many water rights are subject to restrictions imposed by other legal agreements.  If the water right at issue is controlled by an outside agreement, a protestant should review the relevant documents and determine whether the proposed transfer would violate the terms.  Only a binding and legally enforceable agreement can prevent or limit a proposed transfer.

14. Violates Existing Water Right Adjudication/Decree

Water rights are sometimes subject to adjudications or decrees.  If the water right that is subject to the proposed transfer is subject to an adjudication or decree, a protestant should read the terms of the controlling adjudication and/or decree to determine whether any restrictions have been violated or would be violated by the proposed transfer. By reading the adjudication nor decree it may be revealed that the applicant is in violation of the terms and/or conditions of the use as prescribed.  A violation of the terms and/or conditions of a controlling adjudication or decree may be a basis for finding a lack of perfection and initiating a forfeiture proceeding.[27]

15. Violations of State Statutes/Rules

State statutes or rules may require special consideration for certain transfers and should be consulted in preparation of protesting a transfer.  For example, the SB 1010 Plan, passed in 1993, set the goal of reducing water pollution from agricultural sources and improving watershed health by implementing watershed plans that identify problems and solutions in watersheds.  A protestant, upon the appropriate factual circumstance, could argue that a transfer in a “problem” watershed may be restricted where increased pollution is likely to result.

16. Violations of Federal Act/Statutes/CFR

Federal legislation commonly evoked by water right transfers that should be considered include:

• Endangered Species Act
• Act establishing Reclamation Project
• Act establishing Reservation or Colony
• Clean Water Act

Federal acts, statutes, and regulations may also offer an effective means of protesting a transfer.  For example, the Endangered Species Act may limit any transfer that could negatively impact endangered and listed species either directly or indirectly.  Similarly, the Clean Water Act may limit any transfer that would violate the restrictions for the waterway (i.e., the transfer would result in a discharge in a pollutant that exceeds the total maximum daily load allowed for that pollutant on that water body).  It is important to consider relevant Federal acts, statutes, and regulations when protesting a water transfer.

These are only some of the various grounds on which a transfer application may be protested. Other grounds may exist based on the facts surrounding each application and water right.