In 2015, the Environmental Protection Agency (“EPA”) and U.S. Army Corps of Engineers (“Corps”) issued a joint administrative rule, the “WOTUS Rule,” attempting to define the statutory term “waters of the United States” within the Clean Water Act (“CWA”) in order to more clearly define the agencies’ jurisdiction. Schroeder Law Offices summarized the background and scope of the WOTUS Rule in a 2015 blog. The WOTUS Rule was stayed in 2015. Three year later, and after a ruling from the Supreme Court of the United States, litigation over the WOTUS Rule continues. 

On January 22, 2018, the United States Supreme Court issued its unanimous opinion, written by Justice Sotomayor, which settled the jurisdictional question of where challenges to the WOTUS Rule must be filed. The Court held that challenges to the WOTUS Rule must occur in federal district court rather than courts of appeals. The case was remanded to the Sixth Circuit and dismissed for lack of jurisdiction.

This decision by the Supreme Court will likely prolong litigation on the merits of the WOTUS Rule because a decision by a district court for either party is likely to be appealed. Environmentalists have applauded the proposed changes in the rule, while coalitions like the American Farm Bureau Federation and American Petroleum Institute have said the rule will stifle economic growth and add burdensome regulation on farmers and business owners because of expansion of CWA jurisdiction.

On July 27, 2017 the EPA and Corps published a notice of a new proposed rulemaking in the Federal Register. The agencies proposed to replace the stayed 2015 WOTUS Rule with their pre-2015 regulatory procedure. The agencies solicited public comment on the proposed procedure, although, making clear they did not seek public comment on the substance of the pre-2015 rule.

On February 6, 2018, the agencies published the final rule in the Federal Register. The final rule suspends the applicability of the 2015 WOTUS Rule until February 6, 2020. The agencies assert that the suspension of the rule gives agencies the time needed to reconsider the regulatory definition of “waters of the United States.” As reported by Capital Press, the same day the agencies published their final rule a lawsuit was filed by the Attorneys General of New York, California, Connecticut, Maryland, Massachusetts, New Jersey, Oregon, Rhode Island, Vermont, Washington and the District of Columbia in the Southern District of New York. Another lawsuit was filed by numerous environmental groups in Charleston, South Carolina District Court. Both lawsuits challenge the two-year delay in applicability of the WOTUS Rule.

The attorneys general and environmental groups both take the same positions on two issues in their complaints. First, the parties allege the agencies failed to provide meaningful opportunity for public comment in violation of the Administrative Procedure Act (“APA”) because the agencies solicited comments solely on the procedure of the rule, proscribing comment on the substance of the pre-2015 rule. Second, the parties allege the agencies failed to consider all the relevant issues and offer a rational explanation for the suspension of applicability rule, another alleged violation of the APA.

The attorneys general and environmental groups differ in their last claim, however. The attorneys general claim that the CWA does not give the agencies authority to suspend the WOTUS Rule after its effective date passed. The environmental groups claim the agencies violated the APA by failing to publish the pre-2015 rule in the Code of Federal Regulations.

Stay tuned as Schroeder Law Offices brings you updates!

This article was drafted with the assistance of Law Clerk Derek Gauthier, a student at Lewis & Clark Law School.

The news of Dwight and Steven Hammond’s resentencing is an open platform for change in federal handling policies, but the fear incited by Ammon Bundy’s voluntary militia of protesters is clouding evidence that backs claims of federal government mismanagement. Protesters are against the Hammonds’ re sentencing and believe they were convicted unfairly under laws intended for acts of terror for which they’ve been given excessive sentences but are not explicitly calling upon the issue at hand, a reduction of the Hammonds’ sentences.

While much of the news coverage related to the Hammond family has broadcasted Ammon Bundy’s armed militia protest, the legal issue at its core is beginning to come into focus. Bundy and his supporters have set up camp on federal land, demanding that control over the asserted public land be remanded to its local people such as the Hammond ranching family. As the American Bar Assocation Journal suggests, the Hammonds became a cause celebre among anti-government activists in part because of mandatory minimum sentencing regarding disputed use of land with the federal government. Both Dwight and Steven Hammond had served their initially imposed sentences when the government successfully appealed to the San Francisco-based 9^th U.S. Circuit Court of Appeals. Under said appeal, the Hammonds were re-sentenced to the five-year mandatory minimum, re-trying the pair as if they were terrorists though initially sentenced for arson.

While Bundy’s actions are drawing attention to private land conflicts with federal government land rights, they are slowly distracting from the application of said protest: the plight of the Hammonds. At the center of this standoff are a pair of Oregon ranchers who were denied the chance to make their claim to the U.S. Supreme Court. The re-sentencing of the Hammonds turned them quickly from arsonists to terrorists, despite original claims that sentencing the two to the minimum mandatory sentence of five years was acknowledged by a federal district judge as “grossly disproportionate” and a violation of the Eighth Amendment’s ban on cruel and unusual punishment. A 2014 ruling by a panel of the court acknowledged that the Supreme Court has upheld longer sentences for comparable or less serious crimes. In March of 2015, the Supreme court rejected the Hammonds’ petitions for certiorari.

NINTH CIRCUIT UPHOLDS RULING — NPDES PERMITS ARE NOT REQUIRED FOR TRANSFERS OF WATER IN THE KLAMATH BASIN

ONRC Action v. United States Bureau of Reclamation (9th Cir. Or. Aug. 21, 2015)
cdn.ca9.uscourts.gov/datastore/opinions/2015/08/21/12-35831.pdf

The Ninth Circuit Court of Appeals was recently presented with the issue of whether the Bureau of Reclamation violated the Clean Water Act by discharging pollutants from the Klamath Straits Drain into the Klamath River without a permit. Finding that the waters of the Klamath Straits Drain and Klamath River were not meaningfully distinct, and applying the reasoning from Los Angeles County Flood Control Dist. v. Natural Resources Defense Council, 133 S. Ct. 710, (2013), the court concluded that a Clean Water Act permit was not required.

Background

The original case was filed in 1997 as a citizen’s suit under § 505(a) of the Federal Water Pollution Control Act, 33 U.S.C. § 1365(a), commonly referred to as the Clean Water Act. Plaintiff Oregon Natural Resources Council Action (“ONCR”), an environmental group, asserted that the Bureau of Reclamation and its commissioner violated the Clean Water Act by discharging pollutants from the Klamath Straits Drain into the Klamath River without a permit. The case was stayed for settlement negotiations for years, dismissed, and then reopened on motion. The magistrate judge’s report and recommendation granting the Bureau’s motion for summary judgment were adopted by the district court. The recommendation was based on the conclusion that the Klamath Straits Drain, which connects Lower Klamath Lake and the Klamath River is a water of the United States as defined by the Clean Water Act, and therefore a discharge of water from the Klamath Straits Drain to the Klamath River would be exempt from the Clean Water Act’s permitting system by the EPA’s Water Transfers Rule. The Water Transfers Rule defines water transfers as “an activity that conveys or connects waters of the United States without subjecting the transferred water to intervening industrial, municipal, or commercial use.” 40 CFR 122.3(i). Under the Rule, “water transfers” are exempt from the NPDES permitting requirements because the transfers do not result in the addition of a pollutant.

On appeal, ONCR raised the issues of whether the discharge of water from the Klamath Straits Drain and the Klamath River was exempted by the Water Transfers Rule and whether the adoption of the Water Transfers Rule was within the EPA’s authority.

The Ninth Circuit panel neatly sidestepped the issue of the validity of the Water Transfers Rule, relying on the holding in Los Angeles County Flood Control Dist. v. Natural Resources Defense Council, __ U.S. __, 133 S. Ct. 710, 184 L. Ed. 2d 547 (2013), which was issued after the district court entered its decision. In the Los Angeles Flood Control Dist., the Supreme Court held that the flow of water from one portion of a river through a concrete channel or other engineered improvement within a river, then back into the river did not constitute a discharge of a pollutant under the Clean Water Act. In summary, the Court held that that “pumping polluted water from one part of a water body into another part of the same body is not a discharge of pollutants under the Clean Water Act,” as no pollutants are being “added”. Id. at 711, citing to South Florida Water Management Dist. v. Miccosukee Tribe, 541 U.S. 95, 109-12 (2004).

In the ONCR case, the Ninth Circuit panel found that the record demonstrated that waters of the Klamath Straits Drain were not meaningfully distinct from those of the Klamath River. In reaching this conclusion it summarized the flow of water through the Klamath Irrigation Project as originating from the Klamath River, then flowing through parts of the Project into Lower Klamath Lake, and then flowing back to the Klamath River via the Klamath Straits Drain. While recognizing that the water was combined with other waters during its journey, including waters from the Lost River Basin, from spring-fed streams, and from runoff, the court concluded that a substantial portion of the water returned to the Klamath River through the Klamath Straits Drain came originally from the Klamath River and was not meaningfully distinct.

Further, despite the excavation and channelization of the previously existing natural waterway, as well as the addition of two pumping stations to ensure the flow of water through the Klamath Straits Drain, the Ninth Circuit viewed the Klamath Straits Drain as essentially an improved version of the previously existing natural water way. The panel relied on the district court’s finding that the Klamath Straits Drain provided a hydrological connection between the lake and river, just as the original Klamath Straits, and that if the headgates and pumps of Klamath Straits Drain were removed, waters would flow between the Klamath River and the Klamath Straits Drain. Because the waters flowing into the Klamath River from the Klamath Straits Drain were not meaningfully distinct from those in Klamath River, the court held that no permit was required under the Clean Water Act.

The validity of the EPA’s Water Transfer Rule has been the source of much litigation, some of which is ongoing. Unfortunately, the Ninth Circuit panel decision did not reach the question of whether the rule adopted by the EPA was properly within its authority and was therefore valid.

Turbid Waters: The Interaction Between Interbasin Transfer and the Clean Water Act

By Laura A. Schroeder and Kendall A. Woodcock

Introduction:

In Nevada, large scale interbasin transfer of water from rural areas is increasingly seen as a solution to the problem of dwindling water supply and steadily rising urban demand.  Whether such interbasin transfers are subject to permit requirements under the federal Clean Water Act (“CWA”) has major implications for the environment and the ability of municipal suppliers to secure additional water supplies.  Because of the vast scale of these projects and the number of competing, yet important, interests at stake, the treatment of interbasin transfers under the CWA is a hotbed of controversy.

Environmentalists’ concern is that terrestrial and aquatic habitats may be destroyed if CWA permitting requirements do not apply to interbasin transfers.  In contrast, water users, particularly municipal suppliers and irrigators, argue that applying the CWA permitting requirements to all interbasin transfers will jeopardize desperately needed water supplies, place an extreme burden on the administrative bureaucracy, and come with an astronomical economic cost.

Unfortunately, the law surrounding the treatment of interbasin transfers under the CWA is in flux, and the uncertainty poses a problem for both environmentalists and water users.   This article seeks to explore the controversial interaction between interbasin transfers and the federal CWA.   Ultimately, this article will propose that state law presents the best means of addressing the parties’ concerns while providing a stable legal framework in the interim.  

Interbasin Transfers: An Overview

An interbasin transfer occurs when water, either surface or groundwater, is moved from the basin of origin to another basin.  A “basin,” (also called a “drainage basin,” “watershed,” or “hydrographic region”) is a geographic area drained by a single major stream. A basin can also be a drainage system area comprised of streams or lakes.  The state of Nevada, for example, is comprised of 14 major “hydrographic basins,” which are further subdivided into 232 “hydrographic areas or sub-areas.”

Many of the interbasin transfers being litigated and discussed in the media involve large scale projects designed to convey water from rural areas to cities for municipal use.  However, interbasin transfers are not necessarily large in scale, nor do they always involve a change in use.

Regardless of their scope and nature, all interbasin transfers raise serious concerns about water quality and the environment.  Removing water from the originating basin may cause water table lowering, instream flows reduction, aquatic habitat degrading, subsidence, and soil erosion.  Additionally, interbasin transfers involve the mixing or co-mingling of diverse water sources.  In other words, any sediments or pollutants present in the originating waters will be transferred to the receiving waters unless regulations dictate water treatment.

The following sections describe the Clean Water Act framework created to address water quality concerns and the application of that framework to interbasin transfers.

The Clean Water Act: An Overview

The CWA was intended to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C. §1251(a).  Toward that end, the Act makes the “discharge of any pollutant by any person” into “navigable waters” from any “point source” without a National Pollutant Discharge Elimination System (NPDES) permit unlawful. 33 U.S.C. §1311(a)-(e).

The important terms, as defined by the CWA, include:

• “Discharge of a pollutant” means “any addition of any pollutant to navigable waters from any point source.”
• “Navigable waters” means “the waters of the United States.”
• “Pollutant” means “dredged spoil, solid waste,… chemical wastes, biological materials, radioactive materials, heat,… sand,… and industrial, municipal, and agricultural waste discharged into water.”
• “Point source” means “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, [or] container…from which pollutants are or may be discharged.”

See 33 U.S.C. §1362.

To simplify the issues, commentators often break the problem down into its component parts.  For an NPDES permit to be required under the Act, one must establish that there has been (1) an “addition” (2) of a “pollutant” (3) to “navigable waters” (4) from any “point source.”  The following discussion illustrates that the crucial inquiry for interbasin transfers centers on whether the transfer amounts to an “addition” of pollutants.

 Federal Case Law & Regulations: An Uncertain Future for Interbasin Transfers

The Miccosukee Tribe of Indians

In a 2004 case, South Florida Water Management District v. Miccosukee Tribe of Indians, 541 U.S. 95, (“Miccosukee”), the Supreme Court was asked to decide whether an “addition” of a pollutant “from a point source” occurred when a water management district pumped polluted waters from a drainage canal (basin 1) into an undeveloped wetland impoundment area (basin 2).

The South Florida Water Management District (“the District”) argued that it was not subject to the NPDES permit requirements.  First, the District contended that the NPDES program applies to a point source only when a pollutant originates “from” the point source, not when pollutants originating elsewhere merely pass through the point source, as was the case here.  Secondly, the District argued that the canal and wetland impoundment area are not distinct water bodies, but actually hydrologically indistinguishable parts of a single water body, thus there was no “addition” of a pollutant from one body of water to another.

The Supreme Court ruled against the District as to the first argument and remanded the second argument for further factual development.  Specifically, the Court held that the CWA “makes plain that a point source need not be the original source of the pollutant; it need only convey the pollutant to ‘navigable waters’.”  Miccosukee, 541 U.S. at 105.  The Court cited the CWA’s broad definition of “point source,” concluding that the District’s first argument was “untenable” as it  would exempt municipal waste water treatment plants from regulation under the CWA, when a primary goal of the CWA is to impose NPDES permitting requirements on such waste plants.  Miccosukee, 541 U.S. at 105 (citing 33 U.S.C. §1311(b)(1)(B)).

With regard to the District’s second argument, the Court agreed that an NPDES permit would not be required if the two bodies of water were not “meaningfully distinct,” but found that there was insufficient evidence in the record to make such a determination.  Miccosukee, 541 U.S. at 112.

Before remanding the case, the Court briefly addressed but did not rule on a new argument put forth by the Government as amicus curiae on appeal: the “unitary waters theory.”  This theory suggests that all water bodies falling within the definition of “navigable waters” should viewed as a whole for the purposes of determining whether there has been “any addition of any pollutant to navigable waters from any point source.”  In other words, according to the Government, once a pollutant is present in one part of the “waters of the United States,” the conveyance to a different part is not a “discharge of a pollutant” within the meaning of the Act.  See Brief for the United States as Amicus Curiae Supporting Petitioner at 19,South Florida Water Management District v. Miccosukee Tribe of Indians, 541 U.S. 95 (2004)(No. 02-626), 2003 WL 22137034.

The “unitary waters theory” remains an open question.  Likewise, the question remains as to whether interbasin transfers from one navigable body of water to another trigger the NPDES permit requirements under CWA.  At most, the Court acknowledged evidence for both sides of the theory.

EPA’s Water Transfers Rule

In response to Miccosukee, the EPA adopted a Water Transfers Rule that exempts water transfers, defined as “activity that conveys or connects waters of the United States without subjecting the transferred water to intervening industrial, municipal, or commercial use” from the NPDES permit requirement.  NPDES Water Transfers Rule, 73 Fed. Reg. 33,697, 33,708 (June 13, 2008)(codified at 40 C.F.R. 122.3(i) (2010)).

EPA offered several rationales for the rule.  First, the absence of the word “any” prior to the phrase “navigable waters” in the Act’s definition of “discharge of a pollutant” indicates Congress’ intent that NPDES permits would not be required for pollution caused by the engineered transfer of one “navigable water” to another.  Second, the EPA contends that “Congress intended to leave primary oversight of water transfers to state authorities in cooperation with federal authorities.”  73 Fed. Reg. 33,697, 33,701 (June 13, 2008).  The Government also expressed some concern that municipal supply networks might be put in jeopardy if permits were required for every engineered diversion and expensive treatment works were needed to comply with water quality criteria. See Miccosukee, 541 U.S. at 118.

Immediately after its enactment, the Water Transfers Rule was challenged by several environmental groups.  To date,Friends of the Everglades v. South Florida Water Management District, 570 F.3d 1210 (11th Cir. 2009) is the only case directly addressing the validity of the Water Transfers Rule.  In Friends of the Everglades, the Eleventh Circuit found the statute to be ambiguous, as “waters” can refer to either a single body of water or to several different bodies of water, and upheld the Water Transfers Rule as a reasonable interpretation of the Act under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  Friends of the Everglades, 570 F.3d at 1223.

It is not clear, however, that the Eleventh’s Circuit’s interpretation will ultimately prevail.  In 2006, the Second Circuit considered the proposed Water Transfers Rule under very similar circumstances and came to an opposite conclusion. SeeCatskill Mountains Chapter of Trout Unlimited, Inc. v. City of New York, 451 F.3d 77 (2d Cir. 2006) (“Catskills II”).

The Court in Catskills II found the language of the CWA plain and unambiguous: an interbasin transfer from a distinct water body resulting in the addition of a pollutant to the receiving water constitutes a discharge subject to NPDES regulation.  Although it was not directly presented with the question, the Second Circuit may have found the final Water Transfers Rule arbitrary and capricious and an impermissible interpretation of the plain language of the Act based on the reasoning set out in Catskills II.

If the federal Courts of Appeal remain split on the issue, the application of NPDES permit requirements to interbasin transfers will have to be settled by the Supreme Court.

Interbasin Transfers in Nevada: What Role for State Law?

In light of the uncertainty, state law may be the only way to provide water suppliers with certainty while addressing environmental concerns. Although Nevada has some provisions in place that specifically address concerns raised by interbasin transfers, there are some holes that should be considered.

For example, in determining whether an application for an interbasin transfer of groundwater must be rejected, the State Engineer is required to consider several factors in addition to those normally considered, including whether the applicant has demonstrated a need for the water, whether the receiving basin has a water conservation plan in place, whether the proposed plan is environmentally sound as it relates to the basin of origin, and whether the proposed transfer will unduly limit the future growth and development in the basin from which the water is exported. NRS 533.370(6).  There are also provisions in place that are designed to alleviate the economic impacts of interbasin transfers by allowing counties to impose fees on the water being transferred, or by allowing for the creation of a mitigation plan between  the county of origin and the applicant.  See NRS 533.438; NRS 533.4385.

Although these protections redress some of the concerns about the impact of interbasin transfers on basin of origin, there are currently no provisions in place addressing potential water quality impacts on the receiving basin.  If the state were to implement additional measures to cover regulation gaps, the cost and impact of interbasin transfers under the federal CWA would be greatly reduced.

Conclusion

Interbasin transfers, controversial though they may be, are here to stay.  Despite how the courts eventually interpret the CWA, an all or nothing approach (NPDES permit or no NPDES permit) doesn’t seem likely to satisfy all the parties.  The challenge is therefore left to Nevada and the other states, who ideally can use the flexibility of state law to address the social, environmental, and economic effects of interbasin transfers in a workable manner.

A summary of typical cases involving Schroeder Law Offices, P.C.

United States Court of Appeals, Ninth Circuit.

UNITED STATES of America , Plaintiff and Pyramid Lake Paiute Tribe of Indians, Appellant, v. ALPINE LAND & RESERVOIR COMPANY, a corporation, Defendant, and Nevada State Engineer; Rambling River Ranches, Inc., Appellees;
United States of America , Plaintiff-Appellee, v. Alpine Land & Reservoir Company, a corporation, Defendant, and Rambling River Ranches, Inc., Appellee, Larry Fritz; Gaylord Blue Equity Trust, Applicants-Appellees;
United States of America , Plaintiff-Appellant, Pyramid Lake Paiute Tribe of Indians, Intervenor-Appellee, v. Alpine Land & Reservoir Company, a corporation, Defendant, and Rambling River Ranches, Inc., Appellee, Larry Fritz; Gaylord Blue Equity Trust; Herbert Lohse, Applicants-Appellees.
Nos. 00-15688, 00-15690, 00-15692.

Court of Appeals of Oregon

GRANTS PASS IRRIGATION DISTRICT, Appellant, v. WATER RESOURCES DEPARTMENT and Water Resources Commission, Respondents.
(98-CV-0345;  CA A104582)

Affirmed.

Court of Appeals of Oregon

WATERWATCH OF OREGON, INC., an Oregon nonprofit corporation, Northwest Environmental Defense Center, an Oregon nonprofit corporation, and Oregon Trout, an Oregon nonprofit corporation, Appellants, v. BOEING AGRI-INDUSTRIAL COMPANY, an Oregon corporation, Oregon Water Resources Department, Martha Pagel, in her official capacity as Director, and Oregon Water Resources Commission, Respondents, and Inland Land Company, L.L.C., Intervenor-Respondent.
(96C-11192;  CA A95109)

Court of Appeals of Oregon

Peter KUSYK, Kurt Dalbey, John G. Eckmann, Randy Lovre, Barbara Lovre, Jack Harper, K. Thatcher Loen, Claudia Rohr and Beacon Homes, Inc., an Oregon corporation, Respondents, v. WATER RESOURCES DEPARTMENT FOR the STATE OF OREGON and Water Resources Commission for the State of Oregon, Appellants.
(CCV-96-1-443;  CA A100946)

Affirmed in part, vacated in part, and remanded.

Court of Appeals of Oregon

A.D. DORITY, Jr., Trustee of the A.D. Dority, Jr. Trust, Theo M. Dority, Trustee of the Theo M. Dority Trust, Arthur D. Dority, III, Diane M. Dority, Deri C. Dority, Meri Lee Dority Clarke, Mark McKay, Dean McKay, Mark McKay Farms, Inc., an Oregon corporation, and Dean McKay Farms, Inc., an Oregon corporation, Appellants, v. Irene HILLER, Trustee of the Irene Hiller Trust, John Coleman, William Coleman, Coleman Farms, Inc., an Oregon corporation, and Fairfield Farms, Inc., an Oregon corporation, Respondents.
(96C-11125;  CA A99563)

Affirmed.

Court of Appeals of Oregon

KINROSS COPPER CORPORATION, Appellant, v. STATE of Oregon, Respondent.
(960906900;  CA A98316)

Affirmed.

Court of Appeals of Oregon

A.D. DORITY, Jr., and Dan Dority, III, Respondents, v. WATER RESOURCES DEPARTMENT for the State of Oregon and the Water Resources Commission for the State of Oregon, Appellants.
96C-10450;  CA A94934.

Reversed and remanded.

Court of Appeals of Oregon

TEEL IRRIGATION DISTRICT, Petitioner on Review, v. The WATER RESOURCES DEPARTMENT OF the STATE OF OREGON and The Water Resources Commission for the State of Oregon, Respondents on Review.
CC 93-0201;  CA A81025;  SC S42457.

Court of Appeals judgment vacated in part and affirmed in part.
Circuit Court judgment affirmed in part and reversed in part.

Supreme Court of Oregon, En Banc.

In the Matter of the Air Contaminant Discharge Permit Application of Willamette Industries, Inc. LOCAL NO. 290, PLUMBERS AND PIPEFITTERS, and on behalf of Certain Individual Members Residing in Albany, Oregon, et al., and Royce Clouse, Respondents on Review, v. OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY and The Environmental Quality Commission of Oregon, Petitioners on Review, and WILLAMETTE INDUSTRIES, INC., Petitioner on Review.

In the Matter of the AIR CONTAMINANT DISCHARGE PERMIT APPLICATION OF GLENBROOK NICKEL COMPANY and In the Matter of the NPDES PERMIT APPLICATION OF GLENBROOK NICKEL COMPANY. LOCAL NO. 290, PLUMBERS AND PIPEFITTERS and Certain Individual Members, Respondents on Review, v. OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY, Petitioners on Review, and The ENVIRONMENTAL QUALITY COMMISSION OF OREGON, Defendant, and GLENBROOK NICKEL COMPANY, Petitioner on Review.
CC 9302-00754, 9204-02467;  CA A81725, A82407;  SC S42666, S42667, S42668, S42677.

Court of Appeals judgments reversed, Circuit Court judgments affirmed.

Supreme Court of Oregon, En Banc.

TEEL IRRIGATION DISTRICT, Respondent, v. The WATER RESOURCES DEPARTMENT for the State of Oregon and the Water Resources Commission for the State of Oregon, Appellants.
93-0201;  CA A81025.

Reversed in part and otherwise affirmed.
Edmonds, J., filed concurring opinion.

Supreme Court of Oregon, En Banc.

HERMISTON IRRIGATION DISTRICT, Appellant, v. The WATER RESOURCES DEPARTMENT for the STATE of Oregon and the Water Resources Commission for the State of Oregon, Respondents.
CV 930-396;  CA A80718.

Judgment vacated, and case remanded.

Supreme Court of Oregon, En Banc.

STATE ex rel. CIRCUS CIRCUS RENO, INC.;  Circus Circus Casinos, Inc.;  and Circus Circus Enterprises, Inc., Plaintiffs-Relators, v. Honorable Milo POPE, Judge of the Circuit Court for Grant County, Defendant.
No. SC S39868.

Peremptory writ to issue.

United States District Court, D. Nevada.

STATE ENGINEER OF THE STATE OF NEVADA, and Water Commissioners of the Sixth Judicial District Court, Petitioners, Pershing County Water Conservation District, Petitioner-Intervenor v. SOUTH FORK BAND OF THE TE-MOAK TRIBE OF WESTERN SHOSHONE INDIANS OF NEVADA; Marvin McDade, in his capacity as Chairman of the South Fork Band Council;  and the United States of America, as Trustee for the South Fork Band of the Te-Moak Tribe of Western Shoshone Indians of Nevada, Respondents.
No. CV-N-98-679-ECR(RAM).

Motion granted.

United States District Court, D. Nevada.

STATE ENGINEER OF THE STATE OF NEVADA, and Water Commissioners of the Sixth Judicial District Court, Petitioners, v. SOUTH FORK BAND OF THE TE-MOAK TRIBE OF WESTERN SHOSHONE INDIANS OF NEVADA; Marvin McDade, in his capacity a Chairman of the South Fork Band Council;  andthe United States of America, as Trustee for the South Fork Band of the Te-Moak Tribe of Western Shoshone Indians of Nevada, Respondents.
No. CV-N-00679-ECR (RAM).

Motions denied.

On December 31, 2014, the Oregon Court of Appeals decided WaterWatch of Oregon Inc., v. Water Resources Department, 268 Or. App. 187 (2014). The Court of Appeals reviewed three final orders for extensions of time for municipal water permits in the Clackamas River. After contested case hearings, the Water Resources department granted the extensions, subject to fish persistence conditions. WaterWatch of Oregon sought judicial review of the final orders granting the extension, challenging, among other things, the adequacy of fish persistence conditions.

As a matter of first impression, the court interpreted ORS 537.230(2)(c), which states:

“[T]he department finds that the undeveloped portion of the permit is conditioned to maintain, in the portions of waterways affected by water use under the permit, the persistence of fish species listed as sensitive, threatened or endangered under state or federal law. * * *.”

After extensive review of the legislative history of the statute, the court concluded that “the legislature intended that the undeveloped portions of the permits be subject to conditions—that is, fulfillment of the conditions are a prerequisite to diversion of the undeveloped portions—that preserve from decline the continued existence, or endurance, of listed fish species.”

The court interpreted the term “maintain * * * the persistence of fish species,” to focus on the “longterm preservation or endurance of fish population health in the affected waterway. . . . It does not express a policy that no habitat may be impaired or that no individual fish may be allowed to perish or leave.” So while the conditions imposed on a municipal extension of time to maintain fish persistence are required prior to diverting the undeveloped portion of the permit, the conditions must preserve from decline listed fish species over the long-term.

On December 11, 2013, the Oregon Court of Appeals issued a ruling interpreting the amended ORS 537.230(2) conditions. ORS 537.230(2) prescribes conditions for the Oregon Water Resources Department (“the Department”) to grant municipal permit extensions to complete construction and apply water to beneficial use in order to perfect water use rights. In this case, the City of Cottage Grove (“the City”) sought an extension, but then completed construction and application of water to beneficial use before the extension was granted. Based upon the language of the statute, the Department issued the extension without the ORS 537.230(2) conditions, and WaterWatch sought judicial review. The Oregon Court of Appeals reversed and remanded the Department’s final order.

In 2005, ORS 537.230(2) was amended by the passage of HB 3038 to allow municipal permittees to have up to 20 years to commence and complete construction of proposed water use infrastructure and apply water to beneficial use (as opposed to the previous 5-year deadline), so long as certain conditions are imposed. ORS 537.230(2) currently provides:

(2) The holder of a permit for municipal use shall commence and complete the construction of any proposed works within 20 years from the date on which a permit for municipal use is issued under ORS 537.211. The construction must proceed with reasonable diligence and be completed within the time specified in the permit, not to exceed 20 years. However, the department may order and allow an extension of time to complete construction or to perfect a water right beyond the time specified in the permit under the following conditions:

(a) The holder shows good cause. In determining the extension, the department shall give due weight to the considerations described under ORS 539.010 (5) and to whether other governmental requirements relating to the project have significantly delayed completion of construction or perfection of the right;

(b) The extension of time is conditioned to provide that the holder may divert water beyond the maximum rate diverted for beneficial use before the extension only upon approval by the department of a water management and conservation plan; and

(c) For the first extension issued after June 29, 2005, for a permit for municipal use issued before November 2, 1998, the department finds that the undeveloped portion of the permit is conditioned to maintain, in the portions of waterways affected by water use under the permit, the persistence of fish species listed as sensitive, threatened or endangered under state or federal law. The department shall base its finding on existing data and upon the advice of the State Department of Fish and Wildlife. An existing fish protection agreement between the permit holder and a state or federal agency that includes conditions to maintain the persistence of any listed fish species in the affected portion of the waterway is conclusive for purposes of the finding.

In the Cottage Grove Case, 2013 WL 6498547, 2013 Ore. App. LEXIS 1463 (December 11, 2013), the ORS 537.230(2)(b) and (c) conditions were tested. The City of Cottage Grove was issued a permit in 1977 with deadlines to complete construction in 1979 and apply water to beneficial use in 1980. The City was granted a number of extensions, ending in 1999.

In 2007, the City enlarged its water treatment plant and applied to the Department for an extension of time to perfect its water use right. Prior to being granted an extension, the City applied the full amount of water allowed under its permit to beneficial use. The Department thereafter approved the City’s extension, but without the ORS 537.230(2)(b) and (c) conditions because the Department determined that there was no undeveloped portion of the permit at the time of the most current extension. WaterWatch sought judicial review of the Department’s order approving the extension in the Oregon Court of Appeals. The Department thereafter issued a water right certificate to the City.

First, the Oregon Court of Appeals determined that WaterWatch’s action was no rendered moot by the issuance of a water right certificate. Although water right certificates may only be cancelled for certain statutory reasons (ORS 537.250(3)), and are generally “conclusive evidence of the priority and extent of the appropriation therein described” (ORS 537.270), the Court determined that the validity of the certificate was predicated upon the validity of the final order approving the extension application as a necessary prerequisite to the certificate. Therefore, if the final order approving the extension was reversed, the certificate could be cancelled as well.

Second, the Oregon Court of Appeals conducted statutory interpretation to determine whether the “undeveloped portion of the permit” should be measured at the time the extension application is considered by the Department (as argued by the Department and City), or whether it should be measured at the permit deadlines or previous extension deadlines (as argued by WaterWatch). The Court outlined the legislative history leading to the ORS 537.230 amendment, and concluded that the statutory amendment represented a compromise between environmental interests and municipal needs to engage in staged water development.

The Court ruled for WaterWatch, holding that the undeveloped portion of the permit before extension must be measured at the time specified in the permit or last extension. Otherwise, municipalities could avoid the ORS 537.230(2) conditions by developing additional amounts of water before applying for extensions. The Oregon Court of Appeals ruled that the Department’s failure to condition the permit extension on ORS 537.230(2)(b) and (c) was inconsistent with the statute. The Court reversed and remanded the Final Order for the Department to vacate the water right certificate and reconsider the permit extension in line with the Court’s decision.

The Cottage Grove Case is the first in a number of municipal extension judicial review cases. The statutory interpretation will affect numerous municipal entities throughout the State of Oregon, and require municipalities to implement water conservation management plans and protect the persistence of certain fish species when conducting staged water development that requires extensions of time. This will make staged development of water resources for municipal uses more challenging. It is currently unknown whether the Department or the City will seek review before the Oregon Supreme Court.

For a full version of this article, visit the Oregon State Bar Environmental & Natural Resources Section webpage, at: http://osbenviro.homestead.com/.

Stay tuned to Schroeder Law Offices Water Law Blog for more water news that could affect you!

Federal Judge Robert C. Jones called Schroeder Law Offices attorney Laura Schroeder and others to court today to end 29 years of litigation related to over 200 transfer applications filed by various farmers in the Newlands Project, Nevada.  These transfers were tied up for years by the Pyramid Lake Indian Tribe appeals to Nevada State Engineer rulings on the issues of lack of perfection, forfeiture and abandonment.

Decisions on these transfers were complicated by two factors:

1. The United States issued individual contracts for the storage water in the Newlands Project rather than through an irrigation district (now the Truckee-Carson Irrigation District); and
2. The Orr Ditch Decree and Alpine Decree issued water rights to the Newlands Project farmers in a lump acres allocation rather than describing the allowed decreed water rights for irrigation to particularly described acres.

Today’s final order from the bench at last closed the matter.  Ultimately, a few farmers gained approved water right transfers, many farmers lost water righted acres, and some farmers simply withdrew as the transfer process became too costly over the many years.  A confirming written order will follow shortly.

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.