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In re SRBA Case No.39576

Supreme Court of Idaho

January 2, 2018

BLACK CANYON IRRIGATION DISTRICT, Appellant,
v.
STATE OF IDAHO and SUEZ WATER IDAHO, INC., Respondents.

         2018 Opinion No. 1

         Appeal from the Snake River Basin Adjudication, State of Idaho. Hon. Eric J. Wildman, District Judge.

         District court judgment, affirmed.

          Sawtooth Law Offices, PLLC, and McDevitt & Miller, Boise, for appellant Black Canyon Irrigation District. Andrew J. Waldera argued.

          Hon. Lawrence G. Wasden, Idaho Attorney General, Boise, for respondent State of Idaho. Michael C. Orr, Deputy Attorney General argued.

          Givens Pursley, LLP, Boise, for respondent for Suez Water Idaho, Inc. Michael P. Lawrence argued.

          BURDICK, Chief Justice.

         This water rights appeal flows from two consolidated subcases, numbers 65-23531 and 65-23532, litigated in the Snake River Basin Adjudication (SRBA). The subcases concern the United States' late claims (Late Claims) filed in January 2013, which assert "supplemental beneficial use storage water rights" claims under the constitutional method of appropriation to store water in priority after flood-control releases. The special master recommended that the

          State's motion for summary judgment be granted, concluding the Late Claims should be disallowed because, as the Director of the Idaho Department of Water Resources (Director) recommended, the Late Claims assert rights that had not been claimed when the underlying water rights were adjudicated and decreed. Alternatively, the special master concluded the Late Claims should be disallowed because, as intervenor Black Canyon Irrigation District (BCID) asserted, the decreed water rights already authorize the rights the Late Claims now assert, and hence, the Late Claims are unnecessary. The district court agreed with the special master insofar as the Late Claims were precluded. However, the district court rejected the special master's alternative recommendation that the Late Claims were duplicative of the rights already decreed and unnecessary. The district court entered judgment reflecting these conclusions. BCID timely appeals and we affirm the district court for the reasons below.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         The United States has been decreed rights to 700, 000 AFY in Cascade Reservoir, and 163, 000 AFY in Deadwood Reservoir. These water rights were decreed in the Payette Adjudication, and when that adjudication was consolidated with the SRBA, they were decreed again in the SRBA. The Payette Adjudication and the SRBA were both general adjudications.[1]No objection was made to the water rights as they were decreed in the Payette Adjudication and the SRBA.

         The specific decrees provide in relevant part as follows[2]:

Right

Reservoir

Purpose

Period of Use

Quantity

Priority

65-2927A

Cascade

Irrigation Storage

01-01 to 12-31

697, 500 AFY

12/24/1937

Irrigation from Storage

01-01 to 12-31

697, 500 AFY

12/24/1937

Power Storage

01-01 to 12-31

697, 500 AFY

12/24/1937

Power from Storage

01-01 to 12-31

697, 500 AFY

12/24/1937

65-2927B

Cascade

Municipal Storage

01-01 to 12-31

2, 500 AFY

12/24/1937

Municipal from Storage

01-01 to 12-31

2, 500 AFY

12/24/1937

65-9483

Deadwood

Irrigation Storage

01-01 to 12-31

163, 000 AFY

12/31/1926

Irrigation from Storage

04-01 to 11-01

163, 000 AFY

12/31/1926

65-2917

Deadwood

Power Storage

01-01 to 12-31

163, 000 AFY

12/31/1926

Power from Storage

01-01 to 12-31

163, 000 AFY

12/31/1926

         The decrees grant the United States rights to water in specific quantities, which are "essentially equal to the active capacit[ies] of Cascade and Deadwood Reservoirs."

         Cascade and Deadwood Reservoirs are on-stream reservoirs created by dams. Annual stream flows frequently exceed the Reservoirs' capacities, and accordingly, the United States, through the Bureau of Reclamation (BOR), manages flood-control releases. Flood-control releases generated disputes in the SRBA and led to Basin-Wide Issue 17, where water rights holders sought resolution of what "effect flood control releases have on storage water rights" where the decrees lack "refill" remarks. See In re SRBA, 157 Idaho 385, 390, 336 P.3d 792, 797 (2014). While Basin-Wide Issue 17 was being litigated in the district court, on January 31, 2013, the United States filed the Late Claims at issue here. The Late Claims assert "supplemental beneficial use storage water rights" claims under the constitutional method of appropriation as follows:

Subcase

Reservoir

Purpose

Period of Use

Quantity

Priority

65-23531

Cascade

Irrigation Storage

10-01 to 09-30

1, 066, 653 AFA

09/30/1965

Irrigation from Storage

01-01 to 12-31

697, 500AFA

09/30/1965

Power Storage

10-01 to 09-30

1, 066, 653 AFA

09/30/1965

Power from Storage

01-01 to 12-31

697, 500AFA

09/30/1965

Municipal Storage

10-01 to 09-30

1, 066, 653 AFA

09/30/1965

Municipal from Storage

01-01 to 12-31

2, 500 AFA

09/30/1965

65-23532

Deadwood

Irrigation Storage

10-01 to 09-30

268, 113 AFA

09/30/1965

Irrigation from Storage

04-01 to 11-01

163, 000 AFA

09/30/1965

Power Storage

10-01 to 09-30

268, 113 AFA

09/30/1965

Power from Storage

01-01 to 12-31

163, 000 AFA

09/30/1965

         The Late Claims surfaced after the Idaho Department of Water Resources (IDWR) shifted to a computerized water accounting system in 1993. That shift brought about the change from a "physical fill" system of accounting to a computerized "paper fill" system of accounting. The physical fill system is summarized as follows:

Upon completion of the flood control releases, the reservoirs refill with spring runoff to the point of maximum physical fill. When the dam has refilled, typically in early June to mid-July, the stored water, including the "refill" water, is allocated to those holding storage rights in the reservoirs and is available for irrigation purposes.

         In a paper fill system, by contrast,

All water entering the . . . Reservoirs is counted toward the initial paper fill of the reservoirs. When flood control water is passed through the reservoirs the water passed for flood control is not deducted from the storage accounting of the reservoir, even though it is no longer physically stored in the reservoir.

         The United States filed the Late Claims to assert "supplemental beneficial use storage water rights - separate water rights with a junior priority - which, in conjunction with existing storage water rights, would allow Reclamation to complete one physical fill of its reservoirs in years when it must release water for flood control." The district court granted the filing of the Late Claims on May 22, 2013. On December 30, 2013, the Director issued its reports recommending disallowance of the Late Claims for the sole reason that they were "not claimed in prior adjudication." On March 20, 2014, the United States timely objected, and on August 26, 2014, the district court entered an order retaining jurisdiction over the subcases pertaining to the Late Claims. On November 14, 2014, the district court granted Suez Water Idaho, Inc.'s (Suez)[3]motion to participate "on a limited basis for purposes of participating in proceedings related to the application of law" because that limited participation resulted in no "undue delay or prejudice to the existing parties." Thereafter, on January 9, 2015, the district court referred the subcases to the special master and assigned the power "to conduct all proceedings necessary to issue a recommendation . . . ."

         On May 11, 2015, BCID moved to participate. BCID, an irrigation district, is the principal spaceholder in Cascade Reservoir and has beneficial interests in the United States' decreed water rights. See United States v. Pioneer Irrigation Dist., 144 Idaho 106');">144 Idaho 106, 115, 157 P.3d 600, 609 (2007). The special master permitted BCID's participation. Unlike Suez, BCID was granted party status.

         On August 25, 2015, the State moved for summary judgment, contending, in part, that the Late Claims were precluded. BCID responded by contending summary judgment should be granted in its favor as the non-movant, asserting the decreed water rights already authorize the rights the Late Claims now assert, and hence, the Late Claims are unnecessary. On November 19, 2015, the special master entered an order recommending the State's motion for summary judgment be granted, concluding the Late Claims were precluded. The special master did not reach BCID's contention that summary judgment should be granted in its favor as the non-movant. The parties then filed motions to alter or amend the special master's order. As relevant here, BCID contended the Late Claims were unnecessary because, as BCID asserted, the existing rights already authorize the water rights asserted in the Late Claims. On April 22, 2016, the special master affirmed his recommendation that the Late Claims were precluded; however, the special master agreed with BCID that the existing rights already authorize the water rights asserted in the Late Claims. Accordingly, the special master ultimately recommended disallowance of the Late Claims because (1) they were precluded, and (2) as "an additional basis for disallowance, " they were unnecessary because the existing rights already authorize the water rights asserted in the Late Claims.

         When the parties challenged different recommendations of the special master, the district court adopted the special master's recommendation that the Late Claims were precluded. However, the district court rejected the special master's "alternative basis for disallowance" recommendation, reasoning that the special master lacked the power to address BCID's arguments implicating the scope of the existing decrees. BCID timely appeals the district court's ruling that the Late Claims are precluded and rejection of the special master's "alternative basis for disallowance."

         II. ISSUES ON APPEAL

         1. Are the Late Claims precluded?

         2. Did the special master exceed the district court's orders of reference?

         3. Are the State and Suez entitled to attorney fees on appeal?

         III. ...


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