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In the Matter of the Petition For v. Idaho Department of Water Resources and Gary Spackman

August 2, 2012

IN THE MATTER OF THE PETITION FOR DELIVERY CALL OF A&B IRRIGATION DISTRICT FOR THE DELIVERY OF GROUND WATER AND FOR THE CREATION OF A GROUND WATER MANAGEMENT AREA. A & B IRRIGATION DISTRICT, PETITIONER-APPELLANT,
v.
IDAHO DEPARTMENT OF WATER RESOURCES AND GARY SPACKMAN, IN HIS OFFICIAL CAPACITY AS INTERIM DIRECTOR OF THE IDAHO DEPARTMENT OF WATER RESOURCES, DEFENDANTS-RESPONDENTS, AND THE IDAHO GROUND WATER APPROPRIATORS, INC.; THE CITY OF POCATELLO; FREMONT MADISON IRRIGATION DISTRICT; ROBERT & SUE HUSKINSON; SUN-GLO INDUSTRIES; VAL SCHWENDIMAN FARMS, INC.; DAVID SCHWENDIMAN FARMS, INC.; DARRELL C. NEVILLE; SCOTT C. NEVILLE; STAN D. NEVILLE, CROSS-APPELLANTS.



Appeal from the District Court of the Fifth Judicial District, State of Idaho, Minidoka County. Hon. Eric J. Wildman, District Judge.

The opinion of the court was delivered by: Burdick, Chief Justice

2012 Opinion No. 115

Stephen W. Kenyon, Clerk

District court decision affirmed.

This case involves the Director (Director) of the Idaho Department of Water Resources' (IDWR) application of the Rules for Conjunctive Management of Surface and Ground Water Resources (CM Rules), IDAPA 37.03.11, in response to a ground water to ground water delivery call filed by the A&B Irrigation District (A&B). The Director's Final Order found that A&B was not materially injured and was affirmed by the district court on nearly all points. A&B now appeals to this Court, contending that the Director and the district court erred in their analyses. Cross-appeals by the City of Pocatello (Pocatello) and the Idaho Ground Water Appropriators, Inc. (IGWA) allege that the district court erred by requiring that the Director's finding of no material injury must be supported by clear and convincing evidence, rather than a preponderance of the evidence. We affirm the decision of the district court.

I. FACTUAL AND PROCEDURAL BACKGROUND

1. Introduction and History

The A&B Irrigation District is located in south-central Idaho near the town of Rupert. Underlying the A&B project is the Eastern Snake Plain Aquifer (ESPA), which serves as the project's water source.*fn1 As described by the district court, the ESPA is predominately composed of fractured quarternary basalt that, at some locations, may have an aggregate thickness that exceeds several thousand feet, decreasing to shallower depths in the Thousand Springs area. The northern two-thirds of the project are dominated by basalt while the southern third is composed of basalt layered with sediment. "Snake River basalt is the principal water-bearing formation, and it yields water copiously to wells." The United States Bureau of Reclamation (USBR) describes the southern third as an area "[w]here the flow sheets are made up of dense, and massive basalt and/or is covered, penetrated, or innerbedded with fine sediment, the water yield is small to moderate. One such area is in the southwest part of Unit B located mostly in T9S/R22E where several low yielding wells are found."

With this understanding of the hydrogeologic environment, the USBR constructed the North Side Pumping Division of the Minidoka Project. The project was begun in the early 1950s with the intention of developing arable land in Jerome and Minidoka Counties. At this time aquifer levels had peaked, and by the time the project was completed in 1963 the levels began to decline. As a result, roughly half of the project's wells had been redrilled by 1965.

Originally, the project had an open discharge design where water was pumped from the ground into surface ponds and delivered through open lateral systems to the user. This system experienced a conveyance loss estimated at eight percent. In the 1980s, A&B began converting its gravity flow system to sprinkler irrigation, which reduced conveyance losses to five percent.

2. A&B's Senior Water Right 36-2080.

A&B's delivery call is based on its senior water right, 36-2080. This water right was licensed by IDWR in 1965 and authorized the diversion of 1,100 cfs from 177 individual points of diversion in order to irrigate 62,604.3 acres. A&B also irrigates roughly 4,000 additional "enlargement acres" under this water right. Water right 36-2080 did not identify a specific place of use with each diversion point.*fn2

In 2003, the Snake River Basin Adjudication (SRBA) partially decreed the water right in a decree that is substantially similar to the 1965 license. One difference between the partial decree and the license is that the decree states that A&B, pursuant to transfer, is authorized to divert water from 188 points of diversion. Of those 188 authorized points of diversion, 177 of A&B's wells are currently in active production. These individual wells comprise over 130 separate "well systems."

3. A&B's 1994 Delivery Call and Subsequent Procedure

On July 26, 1994, A&B filed a petition for delivery call, which sought both an administration of junior-priority ground water rights from the ESPA and a designation of the ESPA as a ground water management area (GWMA).*fn3 Among other things, the petition alleged that junior priority groundwater pumping from the ESPA had, since 1959, lowered the water table an average of twenty feet and up to forty feet in some areas, which resulted in a 126 cfs reduction of A&B's diversion rate. On May 1, 1995, A&B, IDWR, and others entered into an agreement that stayed the petition for delivery call until a Motion to Proceed was filed with the Director. That Motion to Proceed was filed electronically by A&B on March 16, 2007, and sought the same outcome as in the original delivery call. At a September 20, 2007 status conference the Director notified the parties that the stay was lifted from the 1994 delivery call and that retired Chief Justice Gerald Schroeder (Hearing Officer) was appointed to oversee a hearing "and issue a recommendation pursuant to IDAPA Rule 37.01.01.410, .413 . . . ." Those sections of the administrative code are IDWR's Rules for Conjunctive Management of Surface and Ground Water Resources (CM Rules).

Shortly after the stay was lifted, the Director, in accordance with Rule 42, issued an Order Requesting Information that asked A&B to provide IDWR with information that the Director deemed relevant in making a determination of injury. On January 29, 2008, the Director issued a final order (January 2008 Final Order) finding that A&B was not materially injured and denying A&B's request to designate the ESPA as a GWMA. A&B then filed a petition for rehearing.

A&B's petition was granted, and after some preliminary matters a hearing commenced on December 3, 2008. At the hearing, evidence and testimony was presented by IDWR, A&B, IGWA, and Pocatello. On March 27, 2009, the Hearing Officer issued an Opinion Constituting Findings of Fact, Conclusions of Law and Recommendations (Recommendations). Among the Hearing Officer's pertinent findings:

[T]he Idaho Ground Water Act is applicable to the administration of water rights involved in this case, including those rights that preexisted the adoption of the Ground Water Act in 1951, and are subject to administration consistent with the subsequent amendments to the Act.

It is proper to consider the system as a whole.

[T]here is an obligation of A&B to take reasonable steps to maximize the use of [interconnection] to move water within the system before it can seek curtailment or compensation from juniors.

Crops may be grown to full maturity on less water than demanded by A&B in this delivery call.

The conditions in the southwest area that make the recovery of water from the wells difficult do not justify curtailment or other mitigation.

That A&B has not been required to exceed reasonable pumping levels.*fn4

The recommendations of the Hearing Officer were accepted by the Director in a Final Order Regarding the A&B Irrigation District Delivery Call (Final Order) issued on June 30, 2009. In response, A&B filed a Petition for Review with the district court.

The district court issued an order and accompanying memorandum on May 4, 2010.*fn5 This order affirmed the Director's Final Order on all pertinent substantive issues, but found that the Director erred by applying an improper evidentiary standard when analyzing whether A&B was materially injured. The district court remanded for the purpose of applying the clear and convincing evidence standard. After receipt of petitions for rehearing, the district court issued a memorandum decision and order affirming its prior ruling. On November 23, 2010, the district court filed a judgment pursuant to its May 4, 2010 Memorandum Decision and Order on Petition for Judicial Review. A&B timely filed a Notice of Appeal to this Court on December 29, 2010. Pocatello timely filed a Notice of Appeal to this Court on December 30, 2010, and IGWA timely filed a Notice of Appeal on January 4, 2011.

II. ISSUES ON APPEAL

1. Whether the Director erred in concluding that A&B's 1948 water right is subject to the provisions of the 1951 Idaho Ground Water Act (I.C. §§ 42-226 to 42-239) and its subsequent amendments.

2. Whether the Director erred in finding that A&B has not been required to pump water beyond a "reasonable ground water pumping level" even though the Director failed to identify a specific pumping level.

3. Whether the Director erred in failing to analyze water availability at the 177 individual wells or points of diversion for purposes of an injury analysis to A&B's senior water right; and whether the Director unconstitutionally applied the CM Rules by finding that A&B must interconnect individual wells or well systems across the project before a delivery call can be filed.

4. Whether the district court erred in imposing the "clear and convincing" evidence standard on the Director's determination of material injury in a delivery call.

III. STANDARD OF REVIEW

Judicial review of a final decision or order of the Director is governed by the Idaho Administrative Procedure Act (IDAPA), title 67, chapter 52 of the Idaho Code. I.C. § 47- 1701A(4).

In an appeal from the decision of a district court acting in its appellate capacity under the IDAPA, this Court reviews the agency record independently of the district court's decision. Barron v. Idaho Dept. of Water Res., 135 Idaho 414, 417, 18 P.3d 219, 222 (2001). This Court "shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact." I.C. § 67-5279(1). This Court "instead defers to the agency's findings of fact unless they are clearly erroneous. In other words, the agency's factual determinations are binding on the reviewing court, even where there is conflicting evidence before the agency, so long as the determinations are supported by substantial competent evidence in the record." Urrutia v. Blaine Cnty., 134 Idaho 353, 357, 2 P.3d 738, 742 (2000) (internal citations omitted).

When the agency was required by the provisions of this chapter or by other provisions of law to issue an order, the court shall affirm the agency action unless the court finds that the agency's findings, inferences, conclusions, or decisions are:

(a) in violation of constitutional or statutory provisions;

(b) in excess of the statutory authority of the agency;

(c) made upon unlawful procedure;

(d) not supported by substantial evidence on the record as a whole; or

(e) arbitrary, capricious, or an abuse of discretion.

If the agency action is not affirmed, it shall be set aside, in whole or in part, and remanded for further proceedings as necessary.

I.C. § 67-5279(3). Even if one of these conditions is met, this Court will still affirm the agency action "unless substantial rights of the appellant have been prejudiced." I.C. § 67-5279(4); see also Barron, 135 Idaho at 417, 18 P.3d at 222.

IV. ANALYSIS

A. The Director did not err in concluding that A&B's 1948 water right is subject to the provisions of the 1951 Idaho Ground Water Act (I.C. §§ 42-226 to 42-239) and its subsequent amendments.

A&B argues that the district court erred when it concluded that the Idaho Ground Water Act (GWA), I.C. §§ 42-226 to 42-239, applies to A&B's water right 36-2080. More specifically, that a plain reading of I.C. § 42-226 precludes the Director from applying the 1951 Ground Water Act to A&B's 1948 water right.*fn6

1. Standard of Review

"The interpretation of a statute 'must begin with the literal words of the statute; those words must be given their plain, usual, and ordinary meaning; and the statute must be construed as a whole. If the statute is not ambiguous, this Court does not construe it, but simply follows the law as written.'" Verska v. Saint Alphonsus Reg'l Med. Ctr., 151 Idaho 889, 893, 265 P.3d 502, 506 (2011) (quoting State v. Schwartz, 139 Idaho 360, 362, 79 P.3d 719, 721 (2003)). "We have consistently held that where statutory language is unambiguous, legislative history and other extrinsic evidence should not be consulted for the purpose of altering the clearly expressed intent of the legislature." Id. (quoting City of Sun Valley v. Sun Valley Co., 123 Idaho 665, 667, 851 P.2d 961, 963 (1993)).

[W]e have never revised or voided an unambiguous statute on the ground that it is patently absurd or would produce absurd results when construed as written, and we do not have the authority to do so. 'The public policy of legislative enactments cannot be questioned by the courts and avoided simply because the courts might not agree with the public policy so announced.'

Id. at 896, 265 P.3d at 509 (quoting State v. Village of Garden City, 74 Idaho 513, 525, 265 P.2d 328, 334 (1953)).

2. Analysis

As currently written, I.C. § 42-226 states, inter alia, that "[t]his act shall not affect the rights to the use of ground water in this state acquired before its enactment." A&B argues that the statute unambiguously does not apply to their water right, which has a priority date of 1948. IDWR responds that a lone sentence does not have the ability to exempt water right 36-2080 from the provisions of the GWA.

The district court held that A&B's reasoning would lead to an absurd result and must be rejected. When read in isolation, the above line from I.C. § 42-226 appears to exempt water right 36-2080 from the provisions of the GWA. But as the district court held, "when construing the Act in its entirety, and specifically taking into account the plain language of I.C. § 42-229, it becomes clear that the Legislature intended a distinction between the 'right to the use of ground water' and the 'administration of all rights to the use of ground water.'" To analyze whether the district court erred, the starting point is the original language of the Ground Water Act.

a. 1951 Ground Water Act

As originally written, the Ground Water Act was divided into sections, two of which are pertinent to this issue. Section 1 of the 1951 Ground Water Act states that:

Ground waters are public waters--It is hereby declared that the traditional policy of the state of Idaho, requiring the water resources of this state to be devoted to beneficial use in reasonable amounts through appropriation, is affirmed with respect to the ground water resources of this state as said term is hereinafter defined. All ground waters in this state are declared to be the property of the state, whose duty it shall be to supervise their appropriation and allotment to those diverting the same for beneficial use. All rights to the use of ground water in this state however acquired before the effective date of this act are hereby in all respects validated and confirmed.

1951 Idaho Sess. Laws, ch. 200, § 1, pp. 423-24 (approved March 19, 1951) (emphasis added). In its original form, Section 4 of the 1951 Ground Water Act*fn7 provided that:

The right to the use of ground water of this state may be acquired only by appropriation. Such appropriation may be perfected by means of diversion and application to beneficial use or by means of the application permit and license procedure in this act provided. All proceedings commenced prior to the effective date of this act for the acquisition of rights to the use of ground water under the provisions of chapter 2 title 42, Idaho Code, may be completed under the provisions of said chapter 2 and rights to the use of ground water may be thereby acquired. But the administration of all rights to the use of ground water, whenever or however acquired or to be acquired, shall, unless specifically excepted therefrom, be governed by the provisions of this act.

1951 Idaho Sess. Laws, ch. 200, p. 424 (emphasis added).

The emphasized language from Section 4 is still present in the statute despite numerous opportunities for the Legislature to remove it. The Ground Water Act was first amended in 1953, with the most notable change being the ...


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