Today- September 30, 2009, the Federal Circuit Court of Appeals issued a major decision in favor of Stockton East Water District and the Central San Joaquin Water Conservation District determining that the US Bureau of Reclamation and the Districts have binding contracts for specified quantities of water to which Reclamation is obligated to provide.

The underlying trial court, the Court of Claims found, Reclamation failed to provide those specified quantities from 1990 to 2004.  Accordingly the Court remanded the case to determine the amount of damages owed by the US Bureau of Reclamation to the Stockton and Central San Joaquin districts.

By Attorney Therese Ure & Law Clerk Nicole Widdis

This session, the Oregon Senate passed Senate Bill 311 legislation to amend the Oregon Tort Claims Act (OTCA). The OTCA limits the amount of money damages a plaintiff can receive from a state entity in a civil wrong (aka tort) case. OTCA passed originally in 1967 without limits on tort damages committed by state actors such as officers, employees and agents of the state entity. The 1991, OTCA amendments eliminated tort claims against public officers, employees or agents, when the tort arose from an omission occurring in the performance of a duty. These amendments additionally required the state entity or public body, in lieu of the individual, to be substituted in a lawsuit as the sole defendant.

After 1991, the OTCA effectively left many tort plaintiffs in the position of suing solely the public body. Additionally in section 30.270, the OTCA limited the recoverable damages to a range of $50,000.00 to $500,000.00 (depending on the number of plaintiffs and types of damages). Parties brought suits arguing these statutory limitations violate the Remedy Clause of the Oregon State Constitution, Article 1, Section 10. This section states that “…every man shall have remedy by due course of law for injury done him in his person, property or reputation.” However, in 2002 the Oregon Supreme Court found in Jensen v. Whitlow, that the OTCA on its face (in other words, as written), was not unconstitutional.

In December 2007, the Oregon Supreme Court determined the OTCA violated the Remedy Clause of the Oregon Constitution when applied to a medical malpractice case. In Clarke v. Oregon Health Sciences University, the plaintiff’s damages totaled over $17 million. However, OTCA party limitations required Oregon Health Sciences University (OHSU) to be substituted as the sole defendant. The damages recoverable by the plaintiff under these OTCA limitations capped the damages to $200,000. The Court determined that the statute as applied in this case clearly denied the plaintiff a constitutionally sufficient remedy. However, the Court went on to say the OTCA is constitutional as written. The Court ruled that while it was legal for the legislature to limit OTCA remedies, it was not permissible to eliminate the ability of the plaintiff to sue individual defendants (OHSU employees) whose negligence might have caused the injuries.

In 2009 the Oregon Legislature addressed this ruling in Senate Bill 311 which amends certain parts of OTCA, and repeals the previous statute setting damage limitations. New damage limits range in the millions rather than thousands of dollars. Furthermore, the new legislation widens the number of parties a plaintiff in these tort cases may sue, and sets the damages limits with respect to the state, officers, employees and agents acting within the scope of their employment or duties. The legislation will regulate liability limits for the state and other public bodies, and makes clear that OHSU, a state entity, is covered by the legislation. The OTCA legislation does not allow punitive damages.

Finally, the new legislation creates a legislative Task Force to study the impact of the new legislation and the operation of other laws governing tort liability of public bodies. The new laws will take effect July 1, 2009.

Sources: Oregon Senate Bill 311, 75th Oregon Legislative Assembly. Clarke v. Oregon Health Sciences University, 343 Or. 581, 175 P.3d 418 (2007). Jensen v. Whitlow, 334 Or. 412, 51 P.3d 599 (2002).

By Law Clerk Nicole Widdis

The Eleventh Circuit Court of Appeals, in an order filed today, was the first court to interpret a recent Environmental Protection Agency (EPA) regulation, the Water Transfers Rule (40 C.F.R. § 122.3(i)), which affects the Clean Water Act National Pollution Discharge Elimination System (NPDES).

The case before the Court involved litigation brought by environmental groups and the Miccosukee Tribe of Indians claiming the South Florida Water Management District was violating the Clean Water Act by pumping waters polluted by a “loathsome concoction of chemical contaminants into Lake Okeechobee.” The EPA joined the case on the side of the Water District arguing that a NPEDS permit was not necessary. The trial court concluded the District violated the Clean Water Act and ordered the executive director of the Water District to apply for a NPDES permit.

The big issue in the case and on appeal was the meaning of the word “addition.” The Clean Water Act bans the discharge of any pollutant without a permit, and “discharge” is defined as “any addition of any pollutant to navigable waters from any point source.” Unfortunately for the courts and many litigants, the Clean Water Act did not define “addition.”

The EPA argued that no permit was necessary for the water district in this case, because the water was already polluted when it passed through the pumps (the point sources) into the lake, and that “navigable waters” means all of the United States navigable waters as a whole. Thus, according to the EPA no pollutants were added to the navigable waters as they passed through district managed pumps to the lake. The metaphor used by the U.S. Supreme Court describing this “unitary waters theory” is a soup pot. When you scoop soup into a ladle and then pour it back into the pot you have not “added” any soup to the pot. Under the unitary waters theory, all of the United States navigable waters are one pot of soup.

Previous courts rejected the unitary waters theory. The difference here is that the 11th Circuit could include consideration of the Water Transfers Rule recently adopted by the EPA to support a unitary waters theory. In order to apply the Water Transfers Rule, the Court had to determine whether the language of the Clean Water Act was “ambiguous.” Both sides of the controversy argued reasonable but conflicting interpretations of the “navigable waters” language. Does it mean one collective group of water, or does it mean any distinct body of water? The Court determines that since it could mean either, the language was ambiguous.

Because of the ambiguity, the Court was required to defer to EPA’s Water Transfers Rule enacted by the EPA, because it matched one of the reasonable interpretations of the statute. Thus, unless and until the EPA rescinds their rule or Congress overrides it, all bodies of navigable water in the United States are to be considered one body of water for the purpose of NPDES permits.

Since South Florida Water District was not adding the pollutants to the water initially, and was merely transferring polluted water from one place to another, the District was not required to obtain a permit, something the environmental groups in the case find contrary to the purpose of the Clean Water Act.

Eleventh Circuit Case: Friends of the Everglades, Florida Wildlife Federation et al. v. South Florida Water Management District, et. al. D.C. Docket No. 02-80309-CV-CMA, Order filed June 4, 2009.

By Law Clerk Nicole Widdis

The Truckee-Carson Canal breached in early 2008, however the litigation continues. See Water Law Blog entries from April 24 and 30, 2008 for background on the matter.

The latest attempt by the homeowners in this case to limit the amount of water going down the canal was heard in Nevada Federal District Court for three days beginning May 11, 2009. The homeowners renewed their 2008 motions for a preliminary injunction to stop water going down the canal. However this year, the homeowners put a new spin on their request. They asked the court to make a ruling that if there was a mere forecast of a storm event, that the water in the canal would have to be dropped from 350 CFS flow to 100 CFS flow.

On May 12, 2009, the federal judge in Nevada denied the preliminary injunction, without prejudice. This means that though the court has denied the request at this time, the parties are free to renew their request for injunction at a later date. The flow in the canal will remain at the 350 CFS flow which is the maximum flow allowed in the canal under the 2008 court order. The court also ordered post-trial briefing on some of the issues discussed at the hearing. In other words, this case will continue to be litigated. Stay tuned.

The Nevada Federal District Court case numbers for these matters are: 03:08-cv-00246-LDG-RAM, 3:08-cv-00621-LDG-RAM; and, 3:08-cv-00285-LDG-RAM.

By Laura Schroeder 

Recently, a New Mexico court ruled that the State Engineer is required to review all new applications for exempt domestic wells.  Prior to the ruling, those drilling exempt wells were merely required to file for a “permit” that would be automatically approved by the State Engineer.  The recent ruling requires the State Engineer to review each new application to insure the proposed exempt domestic well will not deny water to any prior users in the same watershed. 

The decision settles a conflict between New Mexico’s traditional principal of prior appropriation of water and a law passed in the 1950s exempting domestic wells from permitting requirements, regardless of their affect on prior users in the watershed.  The Court concluded that those with senior priority rights should not be denied access to the water they hold rights to, even by exempt domestic users.   

Groups supporting the decision applauded it for “closing a loophole” in New Mexico water law.  Those who saw the ruling as a victory noted that increased exempt domestic well drilling was a threat to New Mexico’s water supplies.  Others groups focused on limiting growth in New Mexico’s complemented the decision for its recognition of New Mexico’s finite water resources.  Conversely, the decision will make bringing water to new developments that rely on exempt domestic wells troublesome for developers.            

In the 1950s, at the time the exemption for domestic wells was passed, only a small number of new exempt wells were drilled each year.  Today the State Engineer’s office issues between 7000 and 8000 new exempt well permits on an annual basis.  

The case was originally brought by New Mexico farmers Horace and Jo Bounds against the State Engineer for permitting exempt wells in their watershed when the Bounds were denied a full historic allotment of water under their water rights.  The Court’s ruling did not prohibit exempt wells or revoke any permits already issued.  In the Boundses’ case, the decision did not free up any water in their watershed.   

The new requirement will do little to change wells already permitted, it will dramatically increase the State Engineer’s workload, creating a need for an increase in the State Engineer’s staff.  The State Engineer has not yet indicated whether the decision will be appealed.  He did remark that he agreed with the decision, despite being on the losing side.  He further noted that prior to the decision there were ongoing attempts to get the New Mexico legislature to fix the problem in light of the old exempt domestic well law’s likely unconstitutionality.  
   
   

The Federal Court made its decision on the jurisdictional question by sending the case back to Lyon County District Court last week. See http://www.kesq.com/Global/story.asp?S=8229832 for more information.

Interestingly, many farmers have still not received water that is due to them as insufficient flows continue in the Truckee-Carson Canal. Crops are being stressed and damaged.

Many meetings are taking place in Fernely and Fallon with the Bureau of Reclamation to help resolve these issues. Obviously, if enough water is not diverted from the Truckee River over to the Carson River via the Canal, the amount of water allocated to Fallon side water users in the project, as well as those in Fernley will diminish. With the “water year” already at 90% of the allocation, there may not be enough water to fulfill the allocation if Truckee water is not available.

We encourage your attendance to voice your concerns at these meetings! The next meeting is scheduled for Thursday, May 1, 2008, from 6:00 – 9:00 PM at the Lahontan Elementary School, Multi-Purpose Room,1099 Merton Drive, Fallon.

In the aftermath of the January 2008 flood after the Truckee-Carson Canal break, many lawsuits have been filed.  These suits have been filed in both state and federal courts in Nevada and present many questions as to which Court holds jurisdiction to hear these issues.  Proper jurisdiction depends on the parties to the lawsuit as well as the subject matter of the action.

Recently, an action for an injunction to stop certain amounts of water from flowing down the Truckee-Carson Canal was filed for fear that the higher water levels and amounts of water would cause additional damages to them and potentially cause another ditch break.  While this action was limited to the parties involved and served in the pending lawsuit, this caused an uproar by Newlands Project water users.  Many users have contemplated intervening in this action as the reduced amount of water going over to the project has and will directly affect project water deliveries to the users on the Canal itself, and downstream in the project.

The action for an injunction has questionable subject matter jurisdiction because it was not filed with the Decree Court that administers the water deliveries affected. How can a Court that does not have subject matter jurisdiction of the waters affected make any affective order?

The Alpine and Orr Ditch were Decreed in Federal Court and that court retains jurisdiction to administer the Decree that defines exactly how much water each user is entitled to receive and where that water is to be delivered. Thus, presumably an action to limit the amount of water delivered down the Canal should be brought in the Decree Court. The problem is that those seeking the injunction may not have standing in the Decree Court because they have no water rights issued by the Decree Court.

An interesting question still to be decided.

Personal service means just what it says! On March 28, 2008, in United States v. Alpine Land and Reservoir Co., Judge Lloyd D. George reaffirmed that only those 281 individual water right holders who returned their acknowledgement of service must defend the Pyramid Lake Paiute Tribe’s suit challenging the existence of their water rights. The Court’s recent order went on to confirm that those 1300 water right holders who had determined not to mail back an acknowledgment of the Tribe’s mailed service are dismissed.

Importantly, Judge George recognized our continued attempts in the last decade to dismiss the suit for lack of prosecution. Because of those efforts made by Schroeder Law Offices, PC on behalf of its clients, the Court determined that purchasers of lands with challenged water rights who had been served, ie mailed in the acknowledgements, are not bound by the currently filed petition. So the best news might be that of the 281 acknowledged individuals, those that sold the property along with the challenged water rights can also be dismissed.

Unless the Tribe refiles its petition against those dismissed, the number of individuals with challenges to the existence of their water rights is becoming quite small. Good news for Newlands Farmers! The end IS in sight!

The Oregon Supreme Court will hear oral arguments and review the Oregon Court of Appeals decision in the case Fort Vannoy Irrigation District v. Water Resources Commission. The review arises from a 2002 dispute between the irrigation district and a district landowner. The landowner submitted an application to the Oregon Water Resources Department (“OWRD”) seeking to transfer the points of diversion of five water rights certificates to two new consolidated points of diversion. The proposed new points of diversion would be located out of the district facilities and would be beyond the control of the irrigation district. Two of the water right certificates made part of the transfer were issued in the name of the irrigation district.

The irrigation district protested transfer applications and initiated a contested case hearing in which it argued that the landowner could not request a transfer on the water rights issued in the name of the irrigation district without the district’s permission. The irrigation district argued it was a co-owner of the water rights and thus any transfer would require its involvement. OWRD participated in the contested case and argued against the irrigation district’s co-ownership position. The administrative law judge (“ALJ”) issued a final order rejecting the irrigation district’s position. The Water Resources Commission agreed with the ALJ decision and issued a final order dismissing the irrigation district’s protest and approving the land owners transfer application. In it’s final order, the Commission acknowledged that “the ownership of a water right certificate within an irrigation district is a recurring question” but ultimately determined it did not need to resolve the question of ownership because under the transfer rules (ORS 540.505 et. seq.) “the only permission that is required is that of the owner of the land to which the water right is appurtenant.”

The irrigation district filed a petition for judicial review of the Commission’s decision. Last summer, the Oregon Court of Appeals reversed the Commission’s order. The Court of Appeals held that an irrigation district holding a water rights certificate is the “holder of a water use subject to transfer” under ORS 540.510 and thus is the entity authorized to seek the change requested. A copy of the Court of Appeals decision can be found here: http://www.publications.ojd.state.or.us/A130508.htm.

The Supreme Court’s review of the case will be narrow. The issue on review before the Supreme Court is whether the property owner to whose land a water right certificate is appurtenant is a “holder of any water use subject to transfer” under ORS 540.510, such that the owner may apply to change the point at which the water is diverted from its source. The case will be heard on May 13, 2008 at 10:30 am, at the Enterprise High School in Enterprise Oregon.