Author Archives: JD Lauritzen

Skyline mine expansion starts water fight in Emery County

Skyline mine expansion starts water fight in Emery County

In late March, the Huntington-Cleveland Irrigation Company filed a request for agency action to appeal a decision of the Utah Division of Oil, Gas, and Mining that approved an application by Canyon Fuel Company that sought a permit to initiate coal mining operations in the Flat Canyon Lease Addition for the Skyline Mine.

Huntington-Cleveland Requests Agency Action on Skyline Mine Permit

According to the request for agency action, “[t]he [a]ddition will allow Canyon Fuel to modify its mine plan to include Flat Canyon Federal Coal Lease Tract UTU-7714 as part of its existing Surface Mining Control and Reclamation Act permit.”  Huntington-Cleveland says that its request for agency action was filed in order to seek “a hearing before the Board of Oil, Gas and Mining … on the Division’s approval of the Permit and the hydrologic and water conditions imposed by the Division,” as well as a request that “the Board modify the Permit,” or “remand the Permit back to the Division for further proceedings with Canyon Fuel and Huntington-Cleveland to develop sufficient conditions to minimize impacts to the hydrologic balance.”

Hearing Held to Determine Fate of Skyline Mine Permit

A hearing on the request for agency action took place on April 26, 2017 at 10:00 am.  As set forth in the notice of hearing, the purpose of the hearing will be to address the request for an Order:

  1. Modifying the Permit issued for the Flat Iron Addition to the Skyline Mine to require:
  2. A) Automated continuous or daily monitoring of flows into Electric Lake and the connection of such monitoring sites to Emery County’s ExacTraq system consistent with the Loughlin Report’s recommendations; and B) Imposing conditions and limitations to require the discharge of water pumped from the mine to Electric Lake rather than Eccles Creek, except in emergencies and situations in which Electric Lake is at capacity; or
  3. In the alternative, vacate the decision approving the Permit for the Flat Iron Addition, and remand the matter to the Division with instructions for the Division to work with Canyon Fuel and Huntington-Cleveland to develop sufficient conditions to minimize disturbances to hydrologic balance;
  4. Making such findings and orders in connection with this Request as it deems necessary; and
  5. Providing for such other and further relief as may be just and equitable under the circumstances.

Huntington-Cleveland Holds Senior Water Rights Dating Back to 1885

Huntington-Cleveland is the rightful holder of several state-appropriated water rights, including the most senior water right in the Huntington drainage, which dates back to 1885.  Huntington-Cleveland states that it relies on its state-appropriated water rights “to provide water for its many shareholders, which include nearly all of the agricultural users in northern Emery County as well as the municipalities of Huntington, Cleveland, and Elmo for culinary drinking water.” Huntington-Cleveland says it also “provides water for PacifiCorp/Rocky Mountain Power, its largest shareholder, for the operation of the Huntington Power Plant, a major employer and economic driver in Emery County.”

According to Huntington-Cleveland, the water in the Huntington drainage is collected and stored in the Boulger Reservoir.  The Boulger Reservoir is located within the Huntington drainage and the Flat Canyon Lease Addition for the Skyline Mine.  The water is used to fulfill Huntington-Cleveland’s water rights appropriated by the state.  Huntington-Cleveland says that other nearby reservoirs also supply water to Huntington Cleveland.  “Huntington-Cleveland believes these water sources are hydrologically located to other water sources located within the [Flat Canyon Lease Addition for the Skyline Mine] and Huntington Creek.

Skyline Mine Begins Flooding in 2001

In August 2001, part of the Skyline Mine was unexpectedly flooded while mining operations were underway in the mine.  Consequently, Electric Lake, which Huntington-Cleveland claims supplies it with water, began to drain.  In response to the lake losing water, Huntington-Cleveland says Canyon Fuel and PacifiCorp, which own Electric Lake, drilled three separate wells in James Canyon for the purpose of pumping water into Electric Lake.  Huntington-Cleveland says that of the three wells drilled, only one continues to pump water to this day, and that, between October 2015 and March 2016, the pump pumped nearly 13,700,000 gallons of water per day.  In all, as of March 2016, Huntington-Cleveland believes that the pump has pumped some 79,000 acre-feet of water from the mine, and that the amount of water being pumped from the mine is only increasing over time.

Following the unexpected flooding of the Skyline Mine in 2001, certain tests were conducted to determine the source of the flooding.  These tests revealed “(a) faults at the bottom of the lake adjacent to the mine workings; (b) bubbles from methane gas, a well-known feature of coal formations, emanating along the faults; and (c) sediment being sucked downward into the ground as the vehicle stirred up sediment at the bottom of the lake,” Huntington-Cleveland says.  Various other studies that were completed at the same time revealed “substantial quantities of surface water in the vicinity of Electric Lake [that] were being diverted in the mine.”  However, other studies reached differing conclusions, and, as a result, there is consensus regarding the source of the water that continues to flood the mine.  Huntington-Cleveland worries that the mining of the Flat Canyon Lease Addition for the Skyline Mine will only increase flooding into the mine, which will run parallel to the western shore of the Electric Lake.

Canyon Fuel Seeks to Broaden its Mining Operations in 2015

In October 2015, Canyon Fuel filed an application to broaden its mining operations into the Flat Canyon Lease Addition for the Skyline Mine.  In response, Huntington-Cleveland requested an informal conference to discuss the application, as well as its concerns that the “required sufficient hydrological protections to ensure that the expanded mining operations would not upset the hydrologic balance as required by Utah law and the Division’s regulations and impair its water rights.”  Following an informal conference in July 2016, the division retained the services of Loughlin Water Associates, LLC to independently evaluate whether Canyon Fuel’s proposed monitoring was sufficient to detect the potential impact on water rights.

Loughlin ultimately determined that Canyon Fuel’s plan was not “adequate … to prevent impacts to … water rights and Electric Lake.”  As a result, Loughlin recommend to the division that Canyon Fuel put in place additional monitoring and data protocols to detect the loss of water from Electric Lake.

Following Loughlin’s report, Canyon Fuel resubmitted its application to the division, which included several changes, but did not include a plan to monitor Huntington Creek or other significant sources of inflows into Electric Lake or Huntington Creek.  Instead, Canyon Fuel’s plan relied on quarterly reporting.  Huntington-Cleveland also says that Canyon Fuel’s monitoring plan as set forth in its application “relied on monitoring to address the potential water rights impacts of its trans-basin diversion of water pumped in the mine into the Price River Drainage, rather than including limitations or conditions on the out-of-basin discharge of this water.”

Canyon Fuel Issued Permit to Expand Mining Operations

In early February 2017, the division issued its approval of Canyon Fuel’s application and issued Canyon Fuel its permit to expand its mining operations into the Flat Canyon Lease Addition for the Skyline Mine.  As set forth by Huntington-Cleveland in their request for agency action and hearing:

Although the Division included a condition that required Canyon Fuel to submit cumulative monthly flow data for discharges into Electric Lake and Eccles Creek, it did not require automated continuous or daily monitoring as Loughlin recommended. Most importantly, the Division also did not limit or condition the discharge of water pumped from the mine into the Price River Drainage.

Huntington-Cleveland Appeals

In response to the decision to issue the permit, Huntington-Cleveland filed its appeal and request for agency action and hearing.  In its request, Huntington-Cleveland made several arguments regarding why the permit should be modified, or in the alternative, why the matter should be remanded back to the division for further proceedings.  First, Huntington-Cleveland argued that the division erred by failing to require automated continuous or daily monitoring of the inflows into Electric Lake as recommended by Loughlin.  According to Huntington-Cleveland, the division is authorized under its own rules and regulations to require the monitoring suggested by Loughlin.  Huntington-Cleveland says the division’s “failure to exercise [its] authority and require conditions that its own independent expert recommended is arbitrary, capricious, and contrary to its obligation to minimize the impacts of Canyon Fuel’s coal mining activities to the hydrologic balance.”

Second, Huntington-Cleveland argued that the division failed to put in place sufficient protections as it relates to the trans-basin diversion of water from the Huntington Drainage into the Price River Drainage.  In the eyes of Huntington-Cleveland, the division is “obligated by law to and should have imposed conditions that limit and regulate the amount of water discharged into Eccles Creek. More specifically, the Division should have required Canyon Fuel to discharge as much of the waters pumped from the mine as possible into Electric Lake, and allowed discharges to Eccles Creek only in emergencies or situations in which Electric Lake is at full capacity.”

Finally, Huntington-Cleveland argued that it is entitled to protections that minimize any impairment to its state-appropriated water rights.  In its request, Huntington-Cleveland sets forth:

As the Loughlin Report notes, the closer proximity of the Addition to Electric Lake heightens the concerns of water right impairment and necessitates steps to expand the Application “to protect water rights and to show that no impacts to Electric Lake are occurring in the future.”  Moreover, common sense and Utah law as discussed above dictates that one cannot divert millions of gallons of water a day and thousands of acre-feet per year from a closed basin without some impairment.  Under Utah law it is the burden of the applicant to demonstrate otherwise.  Therefore, the Division does not need to wait until Huntington-Cleveland has collected detailed flow measurements quantifying impairment to its water rights to enact the Loughlin Report’s recommendations regarding automated continuous or daily flow monitoring and to require conditions and restrictions on trans-basin diversions to minimize impacts to the hydrologic balance and Huntington-Cleveland’s water rights.

Mining Rights v. Water Rights

It will be interesting to see whether or not the Oil, Gas and Mining Board grants Huntington-Cleveland’s request to modify the permit it issued, or whether, in the alternative, the permit is remanded back to the division for further consideration.  Furthermore, the dispute between the mine and Huntington-Cleveland will serve as a case study in mining rights v. water rights in the newly dawned Trump era.  We will continue to follow this story, and will provide further updates as they become available.

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Copyright 2017

9th Cir. to decide tribal rights to groundwater

9th Cir. to decide tribal rights to groundwater

As the U.S. Supreme Court pointed out some forty years ago in its opinion in Colorado River Water Conservation Dist. v. United States, “It is probable that no problem of the Southwest section of the Nation is more critical than that of scarcity of water.”  The Supreme Court’s words still ring true today, as evidenced by the legal battle between the Agua Caliente Band of Cahuilla Indians and the Coachella Valley Water District over whether the tribe’s federally reserved water rights extend to groundwater.  The case is now set to be decided by the Ninth Circuit Court of Appeals following a California district court’s decision that the Agua Caliente Indian tribe had a reserved right in groundwater underlying the tribe’s reservation.

Agua Caliente Sues Water District and Others in 2013 Over Groundwater Rights

In May 2013, the Agua Caliente tribe filed a complaint in federal court against the Coachella Valley Water District and several others seeking to have the court declare that the tribe has a federally reserved right to groundwater underlying the Coachella Valley, and to further enjoin the defendants from overdrafting the groundwater to the injury of the tribe.  In their complaint, the Agua Caliente tribe claims that they have lived in the Coachella Valley since before California was admitted to the Union in 1850.  The tribe sets forth that they have continually used both surface water and groundwater resources for “cultural, domestic and agricultural subsistence purposes,” including “stock watering and agricultural irrigation.”

Agua Caliente Says Their Water Rights are Senior to Those of the Defendants

Furthermore, the tribe claim that the “establishment of the Reservation pursuant to federal law impliedly reserved to the Tribe and its members the right to surface water and groundwater sufficient to accomplish the purposes of the reservation, including establishing a homeland for the Tribe and its members.”  More specifically, the tribe claims their reserved rights “are the most senior” in the region, and, as a result, the tribe may prevent the defendants from adversely impacting the quantity and quality of their water.

Agua Caliente Tribe Claims of “Overdraft”

Beyond their claims of seniority, the Agua Caliente tribe alleges that the groundwater underlying the Coachella Valley is in a continual state of “overdraft,” meaning that the water flowing from the underground aquifer exceeds the water flowing into the aquifer.  The defendants claim that they try to recharge the valley’s groundwater by importing water from the Colorado River.  However, the tribe claims that water from the Colorado River is of inferior quality.

Lastly, the tribe alleges in its complaint that the “Tribe and its members have established a homeland in the Coachella valley, including housing, schools, government offices, and cultural and commercial enterprises,” for which the Tribe relies upon its reserved groundwater resources.”  Accordingly, the tribe says it seeks relief in order to “satisfy the present and future needs of the Tribe and its members” and to protect the tribe’s reserved water rights from overdraft and degradation.

Parties Agree to Trifurcate Case

During the litigation of the case, the parties agreed to trifurcate the case into three phases.  Phase I seeks to resolve the legal questions surrounding the Agua Caliente tribe’s federally reserved rights to groundwater under the Winters doctrine, as well as the tribe’s aboriginal rights to groundwater.  The other two phases of the litigation are dependent upon a resolution of the tribe’s rights under Phase I.  If the case ever proceeds to Phase III, the California district court will undertake the fact-intensive tasks of quantifying the Agua Caliente’s rights to groundwater and pore space, and crafting appropriate injunctive relief.

The Parties’ Cross-Motions for Summary Judgment

All four parties to the case filed motions for summary judgment.  In their motion, the tribe argued that federal law recognizes the tribe’s reserved right to groundwater, and that the tribe also holds aboriginal title to the land in the Coachella Valley to which groundwater rights attach.  The U.S. government’s motion echoes that of the tribe’s, emphasizing the supremacy of federal water rights over those created by state law.  However, the government does not support the tribe’s claim of aboriginal ownership.

Conversely, the Coachella Valley Water District argued that Congress extinguished the tribe’s aboriginal groundwater rights, and that Winters rights impliedly reserved for the tribe do not extend to groundwater, and that even if they extend to groundwater, the purposes of the Agua Caliente tribe’s reservation will not entirely fail without a reserved right to groundwater.  The Desert Water Agency’s motion mirrored that of the water district’s, contending that the tribe has no federal reserved right in groundwater, and the tribe’s aboriginal water rights claim was extinguished by statute long ago.

District Court Says Tribe Has Federal Reserved Right to Groundwater

On the parties’ cross-motions for summary judgment, the California district court ruled that the Agua Caliente tribe has a federally reserved water right in the groundwater underlying their reservation pursuant to the Winters doctrine.  However, the district court determined that the tribe’s claim to an aboriginal groundwater right failed, explaining that “[t]he Act of 1851 extinguished the Tribe’s aboriginal occupancy right, and even if the Tribe re-established such a right it was not continuous and exclusive and continuous once the United States created the Agua Caliente’s reservation.”  As a result, the district court said the tribe could not assert an “original occupancy right,” so defendants were entitled to summary judgment on the aboriginal issue.  Following the district court’s decision, the defendant filed a petition for permission to immediately appeal the court’s summary judgment decision to the Ninth Circuit.

Winters Doctrine Front and Center on Appeal

On appeal, the key question will be the Court’s interpretation of the Winters doctrine.  Under the Winters doctrine, when the federal government sets aside lands for a reservation, it impliedly reserves sufficient water to fulfill the purposes of the reservation.  Even still, the Winters case involved only questions related to rights to surface water in rivers and streams, and does not even address federal reserved rights to groundwater.

In the time since Winters, a number of tribal reserved water right cases have been litigated and adjudicated as it relates to surface water sources.  Only three cases, arising in state courts, have addressed the groundwater issue in the context of the Winters doctrine.  And the determinations of the three state court cases ranged from finding no tribal reserved rights to groundwater (In re Gen. Adjudication of All Rights to Use Water in the Big Horn River Sys.), to finding conditional reserved rights to groundwater (In re the General Adjudication of All Rights to Use Water in the Gila River System and Source), to finding fully unconditional reserved rights to groundwater (see Confederated Salish & Kootenai Tribes of the Flathead Reservation v. Stults).

Despite Lack of Clarity in the Law, Tribes have Successfully Negotiated Rights to Groundwater

While the state court decisions fall on both sides of the groundwater issue, several tribes have been able to secure reserved rights to groundwater through water settlements.  In fact, of the nearly 30 water settlements that were enacted between 1978 and 2010, approximately one-half contain some provisions addressing rights to groundwater for tribes; though there has been little uniformity in the groundwater provisions of these water rights settlements.  For example, some of these settlements specified a quantity of groundwater for use or set a limit on tribal pumping of groundwater, while other settlements provided tribal communities with the express right to use groundwater beneath their lands.  But will these settlements have any impact on the Ninth Circuit’s decision?

Water District Argues Tribe Does Not Impliedly Exist

In its appellate brief, the water district argues that the U.S. Supreme Court has narrowly construed the reserved right doctrine because the doctrine conflicts with Congress’s policy of deference to state water law.  The water district says that, under this narrow construction, the tribe’s claimed reserved right in groundwater fails.  The water district claims that the tribe’s “claimed reserved right is not necessary to accomplish the primary reservation purposes and prevent these purposes from being ‘entirely defeated,’ and thus does not impliedly exist” under the Supreme Court’s narrow construction of the reserved right doctrine.

Agua Caliente Tribe Argues Government May Reserve Groundwater

In response, the Agua Caliente tribe asserts that “[a] federal reservation of land impliedly includes the reservation of water necessary to accomplish the purposes of the reservation,” and that “[a] Winters right is a fully vested and perfected federal property right in reserved water that exists from the date of a reservation’s establishment.”  The tribe says the district court correctly concluded “like every other court that has considered a similar question, that water is necessary to accomplish the purposes of the Agua Caliente Reservation.”  Similarly, the tribe claimed the district court also correctly concluded that the Winters doctrine applies to groundwater, and that the Ninth Circuit held more than forty years held that “the United States may reserve not only surface water, but also underground water.”

U.S. Government and Amici Lend Support to Tribe’s Arguments

The United States’ brief, as well as those of two amici, the SCA Tribal Chairmen’s Association and a number of law professors, support the tribe’s contentions.

Ninth Circuit’s Decision Could Have Lasting Impact on Western Water Law

All eyes will be fixed on the Ninth Circuit regarding its decision in the Agua Caliente case because it may have a significant impact on Western water law, including a number of settlements between other water conservancy districts and various Indian tribes.  If the Ninth Circuit upholds the District Court’s determination of federal reserved rights to groundwater for the Agua Caliente Tribe, the case will likely go back to the District Court to determine the limits of the reserved groundwater rights and how to quantify those rights.

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Copyright 2016

What amounts to an obstruction of water rights in Utah?

What amounts to an obstruction of water rights in Utah?

In a recent case before the Utah Court of Appeals, neighboring landowners went to battle over the purported obstruction and interference of an existing water right.  In Clearwater Farms, LLC v. Giles, The appellant (“Clearwater”) contended that the lower district court erred when it rejected the appellant’s claims for damages “on the basis that [the appellee (“Gileses”)] did not cause and interference or obstruction of [the appellant’s] water rights.”  However, the court of appeals disagreed, agreeing with the district court that the appellee’s actions, including failing to cooperate with the appellant, calling the Sheriff, and posting no trespassing signs, did not constitute an obstruction under Utah law.

Clearwater and Gileses as Adjacent Landowners

Clearwater and the Gileses are adjacent landowners in an unincorporated part of Utah County near Lake Shore.  In 1996, the Gileses purchased their parcel of farmland adjacent to the Clearwater property.  Two years later, an individual named Morley, Clearwater’s predecessor, purchased a twenty-one acre parcel of farmland directly to the north of the Gileses’ property.  The next year, the Gileses subdivided their property into two separate building lots, which the Giles built a house on each of the subdivided lots.  As a condition of the subdivision approval, the Gileses were required to improve a segment of a farm lane road that cut across the Gileses land and dead-ended on Clearwater’s property.

Gileses Agree to Allow Morley to Build Pump House to Irrigate his Property

At one time, an irrigation ditch, referred to as the Morley ditch, ran along the west side of the farm lane.  Before the Gileses purchased their property, the ditch provided irrigation to the Morley property.  However, due to flooding of the Spanish Fork river and a subsequent rise in the farmland’s elevation on account of growing silt deposits, it became impossible to properly irrigate the Morley property from the ditch.  As a result of the rising elevation on the Morley property, the Gileses agreed to allow Morley to construct a pump house along-side the farm lane.  The pump house was to house an electric pump, which was attached to a six-inch pipe that would allow Morley to adequately irrigate his property.

Morley Uses Pump House Until 2003, Then Cuts Pipe and Leaves in Ditch

After agreeing to the pump house, Morley buried a six-inch pipe in the irrigation ditch, leaving only a swale to identify the pipe’s location.  Morley used the pump house to irrigate his property until 2003 when he decided that the cost of running the pump made its continued use impracticable.  In 2009, Morley cut the six-inch pipe and left it lying in the ditch, and then built an entirely new pump house on his property, complete with a diesel pump to transport water from a diversion point further north on the Spanish Fork River at a cheaper cost.  The following year, Clearwater purchased the property from Morley, as well as several other parcels of land adjacent to the Gileses’ property in order to construct a few homes.

Clearwater Seeks to Install Larger Pipe, Gileses Unwilling to Cooperate

In 2011, the neighboring landowners ran into trouble when Clearwater sought to remove the six-inch pipe from the Morley ditch and replace it with a fort-two-inch pipe.  According to the facts recounted by the court of appeals, the Gileses were not cooperative in Clearwater’s efforts to replace the six-inch pipe.  In fact, when Clearwater took the initial steps to install the larger pipe, the Gileses called local law enforcement to their property to stop any efforts to install the larger pipe.

Ultimately, the parties came to an agreement in April 2012, which agreement provided Clearwater with an easement across the Gileses’ property for utilities and water.  Even still, Clearwater claimed that, because of the delay in reaching the agreement, Clearwater was unable to irrigate its property for the 2011 growing season.  Eventually, Clearwater filed the instant suit to, among other things, recover “damages for lost crop revenue that allegedly resulted from the Gileses’ interference with, and obstruction of, Clearwater’s rights to transport water through the Morley ditch during the 2011 growing season.”

Clearwater’s Damages Claim Rejected

Following a bench trial, the lower district court rejected Clearwater’s damage claim, “conclude[ing] that Clearwater was not entitled to damages for lost crop revenue, because the Gileses had not obstructed Clearwater’s water rights.”  Clearwater subsequently appealed.

Clearwater Argues That District court Erred in Rejecting Its Damages Claim

On appeal, Clearwater claimed that “the district erred in not awarding damages against the Gileses ‘for obstructing and restricting Clearwater’s ability to improve [its] existing water easement.’”  Clearwater argued to the court of appeals that “it lost crop revenue because of the Gileses’ obstruction and interference.”  Clearwater premised its claim for damages on two Utah statutes, Utah Code Ann. §§ 73-1-15 (prohibition against obstructing a watercourse) and 73-1-7 (allows for expansion of existing canals and ditches).  Clearwater asserted that § 73-1-7 “creat[ed] its own cause of action,” which Clearwater said is “independent” of § 73-1-15.

Clearwater’s Three Theories of Obstruction

Before delving into whether the district court erred, the court of appeals recounted the facts surrounding the dispute over the ditch.  The court of appeals explained that, when Clearwater first approached the Gileses about installing the larger pipe in the ditch, the Gileses objected, stating that there “would [be] no cooperation.”  Even over the Gileses’ objection, Clearwater decided to move forward with their plans to install the larger pipe in the ditch.  At some point, the contractor hired by Clearwater to perform a gas line probe parked a track hoe in front of the abandoned pump house.  Upon a mistaken belief that the track hoe belonged to Clearwater, the Gileses called the sheriff.

After arriving at the abandoned pump house, the sheriff stated that, in his opinion, the larger pipe should not be installed until after the dispute had been resolved.  As a result, upon the sheriff’s suggestion, the Gileses placed several no trespassing signs on the pump house and “told Clearwater not to enter the pump house or make any improvements to the water delivery system.”  In response, Clearwater sought to obtain a TRO, which would allow Clearwater to proceed with the pipe installation.  But Clearwater never followed through with the “restraining order petition, because, according to Clearwater, the assigned judge was unavailable at the time.”  Clearwater never gave an explanation why they did not seek to have their petition for a TRO heard by a different judge.

Gileses’ Conduct Not an Obstruction

As it relates to § 73-1-15, Clearwater “argue[d] that the district court erred in rejecting its claim for damages under Utah Code section 73-1-15 on the basis that the Gileses did not cause an interference or obstruction of Clearwater’s water rights.”  Section 73-1-15 reads in pertinent part:

Whenever any person has a right-of-way of any established type or title for any canal or other watercourse it shall be unlawful for any person to place or maintain in place any obstruction, or change of the water flow by fence or otherwise, along or across or in such canal or watercourse, except as where said watercourse inflicts damage to private property, without first receiving written permission for the change and providing gates sufficient for the passage of the owner or owners of such canal or watercourse. That the vested rights in the established canals and watercourse shall be protected against all encroachments. That indemnifying agreements may be entered as may be just and proper by governmental agencies.

Under the language of the statute, Clearwater argued that § 73-1-15 “provides that ‘watercourse[s] shall be protected against all encroachments,’ and that ‘maintain[ing] in place any obstruction’ is a violation of the statute.”  Furthermore, Clearwater, in quoting the section liability provision, set forth that “a person who violated this section ‘is liable for damages or other relief and costs in a civil action to any person injured by that act.’”  Clearwater asserted that the Gileses’ lack of cooperation, call to the sheriff, and posting of no trespassing signs constituted an obstruction under the statute.

Clearwater Admits Gileses “Never Physically Prevented” Them from Digging Ditch or Installing Larger Pipe

At the outset of its discussion over the alleged obstruction, the court of appeals noted that Clearwater had acknowledged that the Gileses “never physically prevented Clearwater from digging a ditch or installing a pipe, and that the Gileses only verbally told Clearwater they would resist, would not allow the installation and would not cooperate.”  The district court found that the Gileses’ resistance was made up of a call to the Sheriff, and that, at no time, did the Gileses take the law into their own hands.  The district court concluded, “Simply put, [the Gileses] never placed any physical obstruction or changed the water flow along any ditch. There was no water flowing in a ditch to be interfered with.”

Trujillo v. Jenkins Explains What Constitutes an Obstruction Under the Statute

Relying in part on the Utah Supreme Court’s decision in Trujillo v. Jenkins, the court of appeals agreed with the lower district court that the Gileses’ actions did not amount to an obstruction under the statute.  In Trujillo, the supreme court was faced with the question of whether the owners of an irrigation ditch would be subject to criminal liability for constructing a fence alongside the ditch.  In explaining the meaning of § 73-1-15, the supreme court stated:

Section 73-1-15 prohibits changing the water flow or placing an obstruction along a ditch. Fencing a ditch would not necessarily violate either prohibition. First, placing a fence along a ditch would not change the ditch’s water flow. Second, fencing a ditch would not necessarily obstruct the ditch. To obstruct means to block or close up by an obstacle . . . to hinder from passage, action, or operation.

Thus, according to the supreme court, obstruction under the statute meant either a change in the ditch’s water flow or to block or close off the ditch, hindering the water’s passage through the ditch.  According to the court of appeals, “Both of [the supreme court’s] meanings imply the use of some type of a physical barrier that is actually placed in the ditch and that is in contact with the water thereby changing its flow.”

Lack of Cooperation, Calling the Sheriff, and Posting No Trespassing Signs Not an Obstruction

In the instant case, the court of appeals could not conclude that the Gileses’ actions in any way constituted an obstruction as explained in Trujillo.  As explained by the court of appeals:

Regarding the phone call to the sheriff, we cannot see how this action alone would “place or maintain in place any obstruction, or change of the water flow . . . along or across” the ditch.  Further, the Gileses’ phone call to the sheriff and his subsequent arrival did not “change the ditch’s water flow” or “block or close up by an obstacle . . . to hinder from passage.”  The Gileses merely asserted their belief that Clearwater had no right to expand the size of the pipe in the Morley ditch from six inches to forty-two inches.  And although this position was contrary to Clearwater’s assertion that it could freely exercise its water rights by expanding the circumference of the pipe, the Gileses’ recourse to the sheriff (who simply voiced his opinion that the larger pipe should not be installed until the parties’ dispute was resolved), and their installation of no-trespassing signs, may have raised a legal quandary for Clearwater, but those actions do not amount to an obstruction under the statute.  In effect, the Gileses’ actions seem more like the mere assertion of a contrary legal position.  And neither the sheriff’s opinion nor the signs “block or stop up” or “close up or close off” the waterway.  Nor did they change the waterway’s course or impede Clearwater’s access to it.”

Clearwater’s Section 73-1-7 Arguments Suffer From the Same Defects

Turning to Clearwater’s damages theory under § 73-1-7, the court of appeals determined that Clearwater’s claim under that section of the Utah Code “suffer[ed] from similar defects and our prior reasoning is equally applicable.  Clearwater argued that § 73-1-7, which allows for expansion of existing canals and ditches, “gave it the affirmative right to replace the six-inch pipe with a forty-two-inch pipe.”  However, in the view of the court of appeals:

But what Clearwater has not done on appeal is demonstrate how the Gileses’ actions—refusing to cooperate, calling law enforcement, or posting a “no trespassing” sign on the pump house—impeded it in some way from exercising “the right to use or enlarge [a] canal or ditch already constructed.”  As previously discussed, the Gileses merely asserted their belief that Clearwater had no right to expand the existing pipe in the Morley ditch to forty-two inches.  Although the Gileses’ position was contrary to Clearwater’s, the simple assertion of a position that is at odds with Clearwater’s did not stop Clearwater from asserting and exercising its rights.  Certainly Clearwater could have moved forward and exercised what it believed it had the right to do, i.e., enlarge the six-inch pipe to forty-two inches.  But as previously discussed, Clearwater was faced with a risk-benefit calculation.  And Clearwater has not persuaded us that the actions taken by the Gileses impeded it from exercising what it claims to be its right to enlarge the six-inch pipe in the Morley ditch.  Therefore, we affirm the district court’s ruling.

Only Actual Obstructions Count Under the Statute

The major takeaway from the Clearwater decision is that, in order to amount to an obstruction under the statute, there must be an actual obstruction, i.e. one which restricts the flow of water or changes its flow in some way, and not just a perceived obstruction.  Or, in other words, mere lack of cooperation, contacting law enforcement, and/or posting no trespassing signs, that does nothing to change the flow of the water, or in some way impedes the water’ flow, will not amount to an obstruction.  As the court of appeals aptly pointed, if Clearwater truly wanted to install the larger pipe, then they should have followed through on their attempt to obtain a TRO.  Because they did not, they were left in the unenviable position of arguing to the court of appeals that words and/or veiled threats amounted to an obstruction.  That they could not do.

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Copyright 2016

Level of Service Standard

Level of service standard class action denied appeal

A group of property owners who paid impact fees (“water availability charge”) recently sought to challenge a district court’s decision granting partial summary judgment in favor of the Washington County Water Conservancy District, which found that the level of service standard that allowed the impact fees to be assessed was legal and reasonable as a matter of law.  However, the Utah Supreme Court declined to grant interlocutory review to the class of property owners, holding that the case was not properly certified under Utah Rule of Civil Procedure 54(b), and declining to exercise its discretion to grant interlocutory review under Utah Rule of Appellate Procedure 5(a).

Property Owners Sue Over “Water Availability Charge”

In, Washington Townhomes v. Washington County, a group of property owners who were required to pay a “water availability charge” filed suit against the Washington County Water Conservancy District alleging that the impact fees were in contravention of the Utah Impact Fees Act, U.C.A. §§ 11-36a-201 to -205, and that those impact fees amount to a taking under both the U.S. Constitution and the Utah Constitution.

Water Conservancy District Defends Its Impact Fees

The Washington County Water Conservancy District responded to the property owners’ allegations by claiming that the impact fees “were based on a ‘level of service’ standard imposed on the water conservancy district by the Utah Division of Drinking Water.”  According to the Washington County Water Conservancy District, the level of service standard is mandatory, and that the water conservancy district is “required to follow the [Utah Division of Drinking Water] standard in planning and building its infrastructure.”  Additionally, the Washington County Water Conservancy District has set forth that the “level of service standard is a ‘legislative’ judgment that survives scrutiny under the Impact Fees Act and constitutional takings provisions.”

Water Conservancy District Granted Partial Summary Judgment

In the lower court, the Washington County Water Conservancy District sought and obtained partial summary judgment on the property owners’ claims.  There, the trial court held “that the Level of Service adopted by and for the purposes of the District‘s 2006 Capital Facilities Plan and Impact Fee Analysis based upon a standard established by the [Utah Division of Drinking Water] was legal and reasonable as a matter of law.”  Upon a stipulation of the parties, the trial court certified the matter for an immediate appeal under Rule 54(b), concluding that “a determination of this critical threshold issue at the appellate level would be the most efficient use of judicial resources,” and that the trial court could see “no just reason for delay.”  The class of property owners thereafter appealed.

Utah Supreme Court Declines to Hear Appeal

On appeal, the Utah Supreme Court declined to hear the property owners’ appeal, citing two grounds for its decision.  First, the supreme court held that the case had not been properly certified under Rule 54(b) “because there was no ‘judgment as to one or more but fewer than all of the claims or parties’ at issue,” as required by the rule.  Second, the supreme court held that, even though it could exercise its discretion to grant interlocutory review under U.R.A.P. 5(a), it declined to do so in this case.

District Court’s Rule 54(b) Certification Improper

In discussing the Rule 54(b) issue, the supreme court noted that “the district court certified its decision granting the District‘s motion for partial summary judgment as a matter meriting an immediate appeal,” and that the district court had “purportedly cued the case up for ‘a determination of [a] critical threshold issue at the appellate level’ by finding that there was ‘no just reason for delay.’”  The supreme court said that while it appreciated the district court’s and parties’ “interest in appellate guidance … [t]he statutory and constitutional standards of relevance to this dispute are less than a model of clarity,” and that even though “appellate clarification of the operative legal standards could conceivably advance the ultimate disposition of this case,” that was “not the only question under rule 54(b).”

Generally, a party may not appeal anything but a final judgment; however, there are exceptions to that general rule.  Among those exceptions is a certification under Rule 54(b).  Under Rule 54(b), in order “[t]o qualify for certification … a district court decision must constitute a ‘judgment as to one or more but fewer than all of the claims or parties’ at issue in the case.”  In cases where a partial judgment is entered, a district court “may certify the case for an immediate appeal if it decides that ‘there is no just reason for delay.’”  Absent such a certification under Rule 54(b), an appellate court lacks jurisdiction to hear any appeal.

District Court’s Decision Did Not Constitute a Judgment

In the present case, the Utah Supreme Court determined that “[t]he district court‘s decision did not finally dispose of any claim and did not finally adjudicate the interests of a party.”  Rather, the supreme court said the district court’s decision only “decided a threshold issue of possible relevance to the ultimate disposition of the plaintiffs’ claims.  And that is insufficient under rule 54(b).”

The supreme court explained that, in order “[t]o dispose of the plaintiffs‘ statutory or constitutional challenges at issue, the district court would have had to enter judgment awarding (or declining to award) one of the remedies they sought—a declaration that the impact fees imposed by the District are ‘null and void and of no effect,’‖ or a ‘damage award … for all damages suffered as a result of the imposition and collection of illegal Impact Fees and exactions.’”  However, no such judgment was entered in this case, as the supreme court pointed out:

The district court did not reach the question whether the impact fees imposed by the District were “null and void and of no effect,” or whether plaintiffs were entitled to damages for the imposition of improper impact fees.  It considered only the legality and reasonableness of the level of service standard “adopted by and for the purposes of the District‘s 2006 Capital Facilities Plan and Impact Fee Analysis based upon a standard established by the [Utah Division of Drinking Water].”

The legality and reasonableness of the District’s level of service standard may (or may not) be relevant to the ultimate disposition of the plaintiffs‘ statutory and constitutional claims.  But there is no question that the district court’s decision did not render a “judgment as to one or more but fewer than all of the claims or parties” at issue in the case.  And we find a lack of jurisdiction under rule 54(b) on that basis.

Supreme Court Declines to Allow Immediate Appellate Review

Having determined that the matter had not been properly certified for immediate appellate review under Rule 54(b), the Utah Supreme Court turned to its “appellate discretion to treat a ‘timely appeal from an order certified under Rule 54(b)’ as a ‘petition for permission to appeal an interlocutory order” under U.R.A.P. 5(a).  The supreme court explained that U.R.AP. 5(a):

[G]ives us discretion to consider the briefs filed on appeal as a petition for permission to pursue an interlocutory appeal. But it does not require that we reach the merits of the interlocutory appeal. We retain the discretion to deny a petition under appellate rule 5(a)—to treat the improperly certified appeal as a petition for interlocutory review, but to decline to grant the interlocutory appeal. And we take that route here.

An interlocutory appeal is appropriate where appellate intervention is necessary “to adjudicate principles of law or procedure in advance as a necessary foundation upon which the trial may proceed.”  Where that is so, an appellate decision may promote “the desired objective of efficiency in procedure” despite the fact that it is interposed before a final judgment.

Supreme Court Rejects Arguments Over Immediate Appealability

Both the class of property owners and the Washington County Water Conservancy District argued to the supreme court that the aforementioned standard had been met in this case.  The parties claimed that the supreme court’s “input on the reasonableness or legality of the District‘s ‘level of service’ standard will advance the timely disposition of this case.”  Additionally, the parties “insist[ed] … that the district court’s decision implicates threshold ‘principles of law’ that will serve as a ‘necessary foundation’ on which further proceedings will be based.

In response, the Utah Supreme Court “concede[d] that there are important issues highlighted by the parties that will affect further proceedings in the district court.”  Even still, the supreme court “decline[d] to resolve them because we find an inadequate basis for doing so on the record before us on this appeal.”

Parties Contest Level of Service Standard

A primary disagreement highlighted by the parties’ briefing involved “the legal and practical effect of the level of service standard adopted by the [Utah Division of Drinking Water],” which the Washington County Water Conservancy District suggests is rendered “reasonable as a matter of law under the Impact Fees Act and under the takings provisions of the Utah and U.S. Constitutions,” on account of the fact that the “standard was adopted legislatively either by the District or the by the [Utah Division of Drinking Water].”

The Utah Supreme Court said the conservancy district’s “legislative” argument raised a threshold issue under the holding in Dolan v. Tigard.  In Dolan, the U.S. Supreme Court established a takings standard as it related only to impact fees that are imposed on an “adjudicative” basis, but said nothing about impact fees imposed on a “legislative” basis.  Even still, the supreme court recognized that the water conservancy district may be arguing that legislative adoption in the present case is akin to the adjudicative imposition in Dolan: “Because the impact fee regime at issue here—including the level of service standard that underlies it—was purportedly adopted legislatively, the District may be asserting that its approach should survive scrutiny on that basis,” the Utah Supreme Court said.  The court said that the property owners understood the water conservancy district’s arguments the same way.

The “Kings’ X” Theory

The property owners claimed that the water conservancy district’s “legislative” argument was effectively one that would “immunize” the level of service standard  from review under a “King’s X” sort of theory.  “This approach suggests that the Dolan standard does not control here—that plaintiffs’ real beef is with the legislatively adopted [Utah Division of Drinking Water] standard, and that such a challenge may be subject only to rational basis or reasonableness review.”  However, the supreme court said “it [was] unclear whether this is the District‘s position. At oral argument the District seemed to disavow the ‘King’s X’ position.”

Water Conservancy District Argues Level of Service Standard Survives Under Dolan

The supreme court then explained that the Washington County Water Conservancy District had advanced an alternative argument as to why the Dolan standard should apply in its briefing.  According to the court:

Because it views itself legally bound to build infrastructure and facilities as dictated by the [Utah Division of Drinking Water] level of service standard, the District insists that this standard is by definition a precise, accurate measure of the impact of new development on the District—and thus one that would survive under Dolan.  Thus, the District rejects the plaintiffs‘ assertion that it is somehow bound to assess the level of impact of new development on the basis of actual water usage.  It claims that such usage data is beside the point as a legal matter—that the District is bound to follow the [Utah Division of Drinking Water] standard, and thus that plaintiffs cannot establish that the governing “level of service can or should be limited to the ‘measure of demand that [a] new home will impose,‘ rather than take into account the systematic components required for a safe and reliable public water supply system and which are part of the ‘state standard of demand’” imposed by [the Utah Division of Drinking Water].

Property Owners Disagree That Level of Service Standard Survives Scrutiny

The supreme court said the property owners’ briefing disagreed with the above premise to some extent, including that “the [Utah Division of Drinking Water] ‘requirements were never intended to be used for calculating impact fees,’ and insisting that a reasonable level of service standard would be based on evidence of actual water usage rather than the [Utah Division of Drinking Water‘s] historical standard.”  The property owners also challenged the theory that “a legislatively adopted impact fee would not be subject to heightened review under Dolan.”  Alternatively, the property owners argue that “the District‘s decision should be considered adjudicative rather than legislative.  And they accordingly insist that the Dolan standard applies, and that their case is a challenge to the District‘s impact fee analysis and not to the underlying [Utah Division of Drinking Water] level of service standard.”

Utah Supreme Court Ultimately Dismisses Appeal

The Utah Supreme Court responded to these arguments by saying that, while “[t]he briefing on these and other issues has highlighted ‘principles of law’ that may provide ‘a necessary foundation upon which the trial may proceed,’” it “could not render a conclusive judgment.”  Accordingly, the court dismissed the matter on jurisdictional grounds; however, “recognizing that there are important threshold questions presented that may provide a ‘necessary foundation upon which the trial may proceed.’”

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Copyright 2016

Utah Quality Growth Commission

Utah Quality Growth Commission enters watershed fray

In late August, the Utah Quality Growth Commission served as the latest forum for the seemingly never-ending debate between Salt Lake City water officials and private landowners over watershed management issues.  Private landowners have continually claimed that Salt Lake City’s “over-zealous” watershed protection has severely limited the landowners’ ability to develop their property in the Cottonwood canyons.

Utah Quality Growth Act of 1999

In 1999, the Utah Legislature passed the Quality of Growth Act.  The Act was intended to address the myriad issues created by the “rapid growth of population and housing in Utah, particularly within the grater Wasatch area.”  As a result, the Act was aimed at “create[ing] new opportunities for local governments seeking to preserve open lands.”  According to the Legislature, “The Act supports critical land conservation, home ownership, housing availability, efficient development of infrastructure and efficient use of land. The act applies to cities and counties on a purely voluntary basis, and mandates nothing.”

Utah Quality Growth Commission Membership

As part of the Act, the Legislature created the Utah Quality Growth Commission, which consists of approximately 13 members that are appointed by Governor and approved by the Utah Senate.  Membership of the Commission consists of:

1) two persons at the state government level, one of whom must be from the Department of Natural Resources; 2) six elected officials at the local level, three of whom must be nominated by the Utah Association of Counties and three of whom must be nominated by the Utah League of Cities and Towns; 3) one person nominated by the Utah Home Builders Association; 4) one person nominated by the Utah Association of Realtors; 5) two persons from the agricultural community, nominated by Utah farm organizations; and 6) one person selected from the private profit or nonprofit sector.  Commission members are appointed to four-year terms, with a limit of two consecutive terms of service.

Utah Quality Growth Commission Authority

Pursuant to Utah Code Ann. § 11-38-202, the Utah Quality Growth Commission has the authority to:

1) make recommendations to the Legislature on how to define more specifically quality growth areas within the general guidelines provided to the commission by the Legislature; 2) advise the Legislature on growth management issues; 3) make recommendations to the Legislature on refinements to this chapter; 4) conduct a review in 2002 and each year thereafter to determine progress statewide on accomplishing the purposes of this chapter, and give a report of each review to the Political Subdivisions Interim Committee of the Legislature by November 30 of the year of review; 5) administer the program in this chapter; 6) assist as many local entities as possible, at their request, to identify principles of growth that the local entity may consider implementing to help achieve the highest possible quality of growth for that entity; and 7) fulfill other responsibilities and duties imposed by the Legislature or this chapter.

The Utah Quality Growth Commission is also responsible for administering the Utah’s LeRay McAllister Critical Land Conservation Fund, the funding of which “shall be used for preserving or restoring open land and agricultural land.”  The Commission’s board is overseen by Chairman David Mansell, a real estate agent, and Logan City Councilwoman Holly Daines.

Utah Quality Growth Commission Takes Up Watershed Issue

Pursuant to its authority under the Quality Growth Act, the Utah Quality Growth Commission has purportedly taken up the watershed issue in anticipation that the Utah Legislature may seek input from the Commission during its next session if the Legislature decides to revisit Salt Lake City’s authority over canyon lands outside the city’s boundaries.  As set forth by the Commission:

Water is the lifeblood for Utah’s economy and quality of life.  Without water, this growth is impossible. Because we are growing so fast, we must become better stewards of our limited water resources.  For this reason, The Commission recently undertook an effort to evaluate how the watersheds in Utah are managed and in particular, the granting and application of Extra Territorial Jurisdiction by the state to Cities of the First Class (A City whose population exceeds 100,000) and other issues.

Save Our Canyons Takes Issue With Commission’s Involvement

However, the Utah Quality Growth Commission’s voluntary involvement in the watershed management battle has not necessarily been well-received.  An email from Save Our Canyons to its members, titled “Attack on the Watershed,” asked the members to turn out against “a little known state organization struggling for funding and battling to remain relevant [that] is taking aim at Salt Lake City’s watershed protections.”

Others opposed to the Utah Quality Growth Commission’s involvement in the watershed management issues have accused Commission staffer John Bennett of being the pocket of developers.  In a memo to the other members of the Commission, Bennett said that even though he had “been accused of being in the pocket of developers,” he believed the commission was justified in speaking up because of its “responsibility to look at how to promote growth on a quality basis and how to conserve lands.”

“The reason I was willing to go down this path is that this commission is uniquely charged at looking at the tension between conservation and development,” Bennett added.

Salt Lake City’s “Extra-Territorial” Agreement With the Utah Legislature at Heart of Watershed Issue

At the heart of the watershed issue is an “extra-territorial” agreement between Salt Lake City and the Utah legislature, which Bennett said during the recent Commission meeting, effectively gives Salt Lake City veto power over land-use decisions in the Cottonwood canyons, even though those canyons are outside the city’s boundaries.  Bennett added that frustration has grown on the part of communities such as Sandy and Millcreek, who are currently looking for ways to annex parts of the canyons and ski resorts.

“The issue is: How do we resolve this tension between people who want to recreate and protecting the watershed?  Those two things are both critical, and we need to figure out a way to achieve that,” Bennett said.

Salt Lake City Criticizes Commission’s Statements Made During Commission Meeting

However, not everyone agreed with Bennett’s characterization of things during the meeting.  For example, Laura Briefer, director of Salt Lake City’s public utilities department, took issue with what she said were “many” inaccurate statements made by Bennett, as well as others, at the meeting.  Among those inaccurate statements, Briefer said, was the “implication that it’s a relationship of conflict” between Salt Lake City and other communities.  Briefer also said Bennett and others improperly implied that Salt Lake City does not invest in the Cottonwood canyons’ infrastructure.  Above all, Briefer said she was “frustrated” by what she heard from the Commission during the meeting.

Opponents of Salt Lake City’s Control Over the Watershed Accuse City of Having Monopoly on Water

Those opposed to Salt Lake City’s control over the canyons, said they felt like Salt Lake City was holding a monopoly on water, and that it was unfair to subject Salt Lake County residents to ordinances or other regulations put in place by an elected body the residents did not vote for.  For example, Kyle Buxton, a landowner and irrigation company supervisor in Big Cottonwood Canyon, said during the meeting that he and his family have been personally cited 38 times over watershed issues in just the past three years.

In addition to Buxton, canyon property owners Evan Johnson and Norm Henderson, irrigation company president Paul Southam and Dave Robinson, a negotiator for several property owners and Republican candidate for Salt Lake County mayor, laid out a litany of complaints about how city water officials unfairly stymied their ability to use their lands.

Evan Johnson, an owner of a ski-in/ski-out lot near Cecret Lake, told the Commission that Salt Lake city had cut-off his access to water and devalued his property.  “The watershed regulation is abused and we’re bullied,” Johnson said. “… My property is inside four water districts, and I can’t get a drop of water. I can’t get any water because Salt Lake City told them not to service me.”

Salt Lake City Fires Back at Landowners

In response to the landowners’ complaints, Salt Lake City Councilwoman Erin Mendenhall said, “It feels like some sour grapes over decisions you didn’t like in the Mountain Accord process and failed litigation efforts,” and the Utah Quality Growth Commission had provided the landowners “a place to have a pulpit.”

Commission Adjourns Hearing Without Deciding on Any Formal Recommendations

Following the contentious debate between canyon landowners and Salt Lake City officials, the Commission, which has no regulatory power, adjourned the meeting without deciding on any formal recommendations.  Even still, Briefer was not too excited about one of the recommendations the Commission said it might consider: eliminating Salt Lake City’s extra-territorial jurisdiction entirely and turn over water management authority to counties.

“This is the first time I’ve ever seen this recommendation,” said Briefer, who added that she has concerns about counties’ ability to manage critical water resources. Still, she added, Salt Lake City’s public utilities department is “happy to listen.”

“We have a lot of collaborative relationships in our watershed management,” Briefer said. “To me, that’s the bottom line.”

Commission Issues Draft Report

In a blog post, the Utah Quality Growth Commission states that it “has spent the last couple of months reviewing the management of [U]tah watersheds and related issues.  Most of our work has focused on the management of the Wasatch Canyon Watersheds.”  As part of those efforts, the Commission has produced a draft report to the Legislature.

Who Will Ultimately Control the Watershed?

While it remains to be seen what, if anything, the Utah Quality Growth Commission will recommend to the Legislature regarding the battle between Salt Lake City and canyon landowners over watershed management, the Commission has placed itself firmly in the middle of the fray between the parties.  It will be interesting to see what role the Commission plays in the upcoming legislative session if the Legislature takes of the watershed issue.  Without any formal regulatory authority, the Commission will likely serve as a consultant for the Legislature, who will ultimately decide if control of the watershed will remain in the hands of Salt Lake City, or if it will be left to the individual counties or other municipalities.

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Copyright 2016


Water Use Authorization not an Enforceable Contract

Is a Water Use Authorization an enforceable contract?

In a recent case before the Utah Court of Appeals, the issue of whether a Water Use Authorization can constitute an enforceable contract came before the court.  In Brasher v. Christensen, the Utah Court of appeals was asked to overturn the trial court’s determination that a 2013 Water Use Authorization was not an enforceable contract.  Ultimately, the court of appeals upheld the lower court’s decision, finding that “the 2013 WUA was not, by itself, an enforceable contract.”  Furthermore, the court of appeals determined that the trial court did not err when it determined that there was no meeting of the minds to establish an oral contract between the parties.

Brasher’s Need for More Water

Appellee/Defendant Vikki Christensen owns a 260-acre farm in Emery County, Utah, which ownership includes the rights to use irrigation water on the farm.  Christensen’s water rights “are represented by 780 shares of stock in the Huntington-Cleveland Irrigation Company (HCIC).”  Appellant/Plaintiff Reed Brasher owns or leases some 100 acres of land in Emery County.  Brasher raises cattle and grows alfalfa to feed his cattle on those 100 or so acres.

During the summer and fall months, Brasher allows his cattle to graze on 60 acres of irrigated pasture.  During the winter and spring months, Brasher feeds his cattle alfalfa that is farmed from his approximately 30 acre alfalfa farm.  Brasher, like Christensen, owns water stock in HCIC.  However, his shares in HCIC are sufficient to irrigate only 45 acres of his 100 acre farm.  As a result, Brasher must lease enough water to irrigate the remaining 55 acres of his farm to feed his cattle.

Brasher Enters into Water Use Authorization Agreement with Ms. Christensen

In order to irrigate the remaining acreage of his farm, Brasher entered into an agreement with Christensen, whereby Brasher leased 215 class A water shares.  As part of their negotiations, Brasher asked Christensen to lease him the water “until further notice,” but Christensen declined.  Brasher and Christensen both signed a Water Use Authorization form provided by HCIC, which set forth the 2012 start of Brasher’s water lease.

Brasher’s Water Rights Cutoff

On the Water Use Authorization form, Brasher checked the box next to “until further notice,” despite the fact that Christensen told Brasher she was unwilling to agree to such an open-ended lease term.  In light of Brasher’s actions, HCIC contacted Christensen to determine whether she actually intended to lease Brasher the water “until further notice.”  Christensen informed HCIC that she did not, and that Brasher’s lease was just for the 2012 season, ending on October 31st.

Brasher Approaches Christensen With Offer to Buy Farm and Lease Water Shares

In February 2013, Brasher became aware that he could qualify for a subsidized federal program to install sprinkler irrigation on his farm through the National Resources Conservation Service (“NRCS”), so long as he could establish access to sufficient water shares.  Brasher contacted Christensen to inquire whether she would be interested in leasing him water during the 2013 season.  Christensen declined Brasher’s offer, explaining that she was not sure that the water Brasher was interested in leasing would be available.  After several more failed attempts by Brasher to lease the water from Christensen, Brasher told Christensen that he had $5,000 in earnest money and asked Christensen if she would meet with him to discuss the details of his offer.

In March 2013, Brasher, Christensen, and Christensen’s friend, Nedra Swasey, met to discuss Brasher’s offer at Christensen’s home.  Before the meeting, Christensen purportedly told her friend that she would not lease the water to Brasher unless he offered to buy the farm.  Brasher brought two forms with him to the meeting: a blank Water Use Authorization form and a blank Offer to Purchase Real Estate form.  After Brasher and Christensen negotiated the terms of their real estate deal, Ms. Swasey filled in the forms supplied by Brasher, and both parties signed it.

The agreement allowed Brasher to take possession of Christensen’s farm on March 25, 2013, but allowed Christensen to remain in the farmhouse until April 2, 2014.  The agreement further required Brasher to pay Ms. Christensen $5,000 earnest money, but Brasher never paid that money to Christensen.

Brasher and Christensen Also Discuss Water Use Authorization Form

As part of their meeting, Brasher and Christensen also discussed the terms of the potential waters shares lease.  Brasher filled out the Water Use Authorization form, and both parties signed the form.  The Water Use Authorization form read in pertinent part, ““In accordance with a lease and/or other agreement, I Vikki Christensen am authorizing Reed Brasher to call for: 215 shares of Class A Water from my [HCIC] water account starting at the beginning of 2013 irrigation season.”  At the close of their meeting, Brasher left a check for approximately $1,300 with Christensen as payment for the water shares lease.  However, Christensen never cashed that check.

Brasher Falsifies Water Use Authorization Form

Christensen kept with her the signed Real Estate Purchase Offer, and Brasher took the signed Water Use Authorization form to make copies for the parties, but never returned a copy to Christensen.  Instead, Brasher delivered the signed Water Use Authorization form to HCIC.  The Water Use Authorization form delivered to HCIC set forth that the water shares lease would continue until “the end of 2018 irrigation season,” and that it was payable 3/15 each year.”

During trial, it was revealed that Brasher had added the aforementioned terms after meeting with Christensen.  It was also revealed during trial that Christensen told Brasher that she needed to discuss the terms of both the Real Estate Purchase Offer and the Water Use Authorization before proceeding with the deal and that the water shares lease was contingent upon Brasher buying the farm.  Brasher told the trial court that the water shares lease was independent of the offer to purchase the farm and that Christensen only told him that she needed to discuss the offer to purchase the farm with her attorney, and not the Water Use Authorization, before proceeding.

Christensen Nixes Deal

Between March 13th and 24th, Brasher attempted to call Christensen a number of times to determine if she in fact wanted to accept his offer.  Christensen never returned any of Brasher’s calls.  Finally, the day before Brasher was to take possession of the farm, Brasher and Christensen spoke over the phone.  Brasher told the trial court that, after the phone call ended, he was under the belief that his offer would not be accepted.

Brasher Begins Drawing Water Even Though Deal was Rejected

Even though his offer to purchase the farm was not accepted, Brasher began drawing water at the beginning of April, on the belief that the water lease was independent of the offer to purchase the farm.  After Brasher began drawing water, HCIC contacted Christensen to confirm that she wanted to lease Brasher water through the 2018 water season.  Christensen told HCIC the she did not want to lease the water to Brasher, instructing HCIC to stop providing water to Brasher.  As a result, HCIC cutoff Brasher’s water.  Upon finding out that HCIC had terminated his water shares, Brasher allocated his own HCIC water shares to his alfalfa fields and sold all but a few of his cows.

Trial Court Dismisses Brasher’s Claims for Damages

Subsequently, Brasher sued Christensen for damages arising out of the loss of his alfalfa crop for the 2013 year and for losses related to his cattle operation, which amounted to approximately $150,000.  Following a bench trial, the trial court dismissed Brasher’s complaint, “determining that the WUA was not an enforceable contract but rather an instruction from one shareholder to HCIC to deliver water to another person, and that there was no meeting of the minds as to the terms of an oral contract between the parties to lease water.”  Brasher appealed.

On appeal, the Utah Court of Appeals was faced with two issues: 1) whether the trial court erred when it determined that the 2013 Water Use Authorization was not an enforceable contract; and 2) whether the trial court erred when it determined that there was no meeting of the minds to establish an oral contract.

A Water Use Authorization is Not an Enforceable Contract

As to the first issue, the court of appeals upheld the lower court’s determination that the 2013 Water Use Authorization agreement did not, in and of itself, constitute an enforceable contract.  There, the court of appeals concluded:

[T]he trial court correctly determined that the 2013 WUA was not an enforceable contract.  In particular, it seems clear that the terms of the form did not require offer and acceptance or consideration.  The “WUA instructs HCIC to deliver water to one of the parties for a period of time,” nothing more.  And as the trial court held, the WUA “by its very terms” expressly conditions its enforceability upon “a lease and/or agreement,” contemplating that the parties have reached a separate agreement as to the lease of HCIC stock.  The terms of the form detail no offer by one party, no acceptance by another, and no consideration.  The form is devoid of language establishing a contractual relationship between Brasher and Christensen.  Consequently, the trial court correctly concluded that the 2013 WUA was not, by itself, an enforceable contract between Brasher and Christensen.

No “Meeting of the Minds,” No Oral Contract

Turning to the second issue, whether there was a meeting of the minds sufficient to establish an oral contract, the court of appeals held:

We therefore conclude that the trial court’s finding was supported by evidence and that the court did not clearly err when it found that Christensen told Brasher she needed to discuss the terms of the WUA and the Offer with her family and attorney “before anything was final.”  We further conclude that because Brasher testified that he believed the two agreements were independent of each other and Christensen testified to the contrary—that she intended them to be contingent upon each other—the trial court did not err when it concluded there was no meeting of the minds sufficient to create an oral contract.

Two Key Takeaways

The main takeaway from the court of appeals’ ruling is that a Water Use Authorization, while able to authorize a party to use water from the shares of another, does not, standing alone, create an enforceable contract among the parties.  As a result, even if a party is authorized to use water from another party’s shares, there is no ability to enforce that agreement, absent more.  Additionally, even where a Water Use Authorization does not constitute an enforceable contract, the parties may still enter a binding oral agreement over the water shares, but only if there is a meeting of the minds.

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Copyright 2016

Cache County Water Conservancy District

Cache County Water Conservancy District on ballot

For more than a century now, Cache Valley communities have been able to keep water flowing from homeowners taps and farms properly irrigated without help from a formal water conservancy district.  However, as this November’s election arrives, Cache County voters will attempt (for a third time) to form the Cache County Water Conservancy District, which state politicians and local engineering firms say is needed to protect Cache Valley’s water resources.

Proposed Purpose of the Cache County Water Conservancy District

Cache County has said of the proposed water conservancy district:

The purpose of a District in Cache County is to protect and conserve our long-term agricultural, environmental and municipal water interests with an emphasis on securing our allocation entitlements pursuant to the Bear River Development Act.  The County has experienced increased demands related to water issues and reduced resources to meet the demand.  A district would promote water conservation and safeguard adequate amounts of water for the inhabitants of the areas included within the District at a reasonable cost and in a reasonable manner of delivery.

Nearly Unanimous Support for Putting Cache County Water Conservancy District on the Ballot

Cache County Water Manager Bob Fotheringham has said that the time for Cache Valley to have its own water conservancy district has finally come, and that such an entity will even the playing field for Cache Valley residents.  “I believe that the benefit of having the district is so we can manage water better than we’ve managed it in the past and meet the needs of Cache Valley,” Fotheringham has explained.

Fotheringham’s excitement for the establishment of the Cache County Water Conservancy District has seemed to attract the support of a number of other government officials across Cache Valley.  In fact, 18 of 19 municipal governments voted unanimously to allow the Cache County Water Conservancy District ballot measure to be voted on this November.  The lone dissenting vote was cast by River Heights.

Opponents See Cache County Water Conservancy District as a Way to Levy More Taxes and Access Untapped Bear River

While the water conservancy district measure has made the ballot in November, not everyone is in favor of creating the Cache County Water Conservancy District.  Zack Frankel, executive director of the Utah Rivers Council, has said that the formation of a water conservancy district will be nothing more than another level of government bureaucracy separating Cache Valley residents from their water.  Frankel has also said that the creation of a water conservancy district is just an excuse for Cache County to assess property taxes, which will amass millions of dollars for the county to spend on water projects, including projects on the largely undeveloped Bear River, which Cache County is entitled to 60,000 acre-feet of the approximately 220,000 acre-feet of water that could be developed pursuant to the Bear River Development Act.

Cache County Water Conservancy District Will Be Independent Entity

While the question of whether Cache County Ultimately needs a water conservancy district will be decided by voters in November, it is important to understand the proposed structure of the Cache County Water Conservancy District, including how much the conservancy district can tax residents.  Cache County has said, “The final organization and governance of the District would be created based on input from the citizens.  The District Board of Trustees can include up to eleven members and must include a majority of elected officials.  Input and communication about the formation of the Board are needed to ensure the District serves all water users in the District area and is a fit for Cache County’s needs.”  Furthermore, once created, the Cache County Water Conservancy District will function as an “independent entity to plan, safeguard, and manage water resources for the benefit of the public in the geographic area they represent.

Third Time is the Charm?

As noted, this will be the third time that voters will go to the polls over the fate of the Cache County Water Conservancy District.  The other two attempts to create a water conservancy district in Cache County have failed because voters have never felt comfortable forming a district made up of appointed individuals who have the ability to assess taxes.  The reality is Utah’s water conservancy districts use taxpayer money to build infrastructure like pipelines and dams, pay salaries and lobbyists and even build new buildings. But when a citizen has beef with how this money is spent, there’s no recourse at the ballot box.

Even still some have admitted that a water conservancy district is “the perfect example of taxation without representation.  According to Dan McCool, director of the University of Utah’s Environment and Sustainability and Studies program, “They can tax, they can borrow, but they are in most cases unelected by the public at large.”

10 of 11 Board Members to be Elected

So, what is different this time around?  First, water conservancy district board members may now be elected pursuant to a change in the Utah Code in 2010, which allows water conservancy district board members to be elected or appointed.  Additionally, Utah Code § 17B-2a-1005 requires that a majority of a water conservancy’s board members be elected as opposed to appointed.  Cache County has said that 10 of the water conservancy district’s board will be elected, while the 11th board member will be appointed to represent the interests of the agricultural community.

“There will be no other district in the state that will be operated like this district because it is a new way to manage,” Fotheringham says.  “I think we’ve resolved those issues for people and I believe it’s going to be transparent; it’s going to be accountable and it’s going to do what the people in the area of Cache Valley want it to do, and that’s what we need.”

Conservation Focus

Second, Cache County has said that water conservancy districts have become more and more focused on water conservation following the pronouncement by Utah’s governor in 2000 to reduce per capita water use 25% by 2050.  Cache County says that since that time, Utah as a whole has conserved 18%, but that Cache County has only been able to conserve 6%.  Accordingly, Cache County says, by way of the Cache County Water Conservancy District, its citizens can become more involved in the conservation process.

Tapping Into the Bear River

Third, Cache County has maintained that plans to development the Bear River has progressed since the last time the issue was on the ballot.  Property to build a pipeline from Box Elder County to Salt Lake County, and that reservoir sites in Box Elder County and Cache County are currently being evaluated for construction by water conservancy districts up and down the Wasatch Front.  While any pipeline will not be completed until at least 2035, Cache County has said that the formation of the Cache County Water Conservancy District will provide “the needed structure and authority to form regional contracts that must be in place to utilize Cache County’s Bear River water allocation.”

Cache County Population Growth

Fourth, Cache County population has grown by some 30% in recent years.  According to Cache County, “The population for the County given in the 2000 census was 91,391.  The 2010 census population for the County was 112,656 with a projected population for 2013 of 120,046.”  As a result, Cache County says the growing population will only increase the demand for water and will reduce any current excess water supplies.

Groundwater Management Plan

Finally, the groundwater management plan enacted in September 1999 limited the amount of water that can be drawn from underground aquifers in Cache County.  As it stands now, Cache County says that existing water rights (usually agricultural water rights) have to be used as replacement water.  Cache County says, if formed, the Cache County Water Conservancy District, will allow “for more efficient conversion of water from agricultural to municipal use with the ability to bank water rights.  A conservancy district is needed to have the resources and focus to develop the Bear River allocation.  The developed allocation can help preserve agricultural land by giving an alternative source for water rights in areas that currently have no water rights, such as bench areas, as these areas are developed.”

Increased Property Taxes

As it relates to taxation, the proposed Cache County Water Conservancy District will have the authority to assess taxes.  Cache County has said the water conservancy district may impose a maximum property tax of “0.0001 per dollar before certain activities are commenced, 0.0002 per dollar after certain activities are commenced, and 0.0003 per dollar if an additional levy is necessary to pay maturing bonds or debts.”  In practice, Cache County has said that the tax will play out as follows: “the tax on a $188,000 residence would be $10.34 using a tax rate of 0.0001, $20.68 using a tax rate of 0.0002, and $31.01 using a tax rate of 0.0003.”

Cache County has said the creation of the Cache County Water Conservancy District and a corresponding tax will allow Cache County to protect its shrinking interest in water from the Bear River, provide Cache County residents with a board that is focused on water issues and has the authority to make water decisions and agreements that will protect Cache Valley’s water, and will help the county to carry out the Cache Valley Water Master Plan.

Will Voters Go for it This Time?

While Cache County has offered a host of reasons for adopting the Cache County, will it achieve its objectives, or is its creation just another way to tax Cache Valley residents and provide special water projects to a select group of residents or businesses as opposed to the public at large?  Time will tell, but at least Cache Valley residents will control the issue via the ballot box.  All eyes will be keenly fixed on election night in November.

* Photo Cred.:

Copyright 2016

UEP and TCWW in Fight over Short Creek Water Rights

TCWW in UEP crosshairs over Short Creek water rights

In January 2015, United Effort Plan trust (“UEP”) filed suit against Twin City Water Works (“TCWW”), alleging that for a number of years TCWW has unlawfully pumped water from UEP land without compensating UEP.  Additionally, UEP claimed that the utility was funneling revenues generated from Hildale and Colorado City residents to FLDS leaders and TCWW employees, while at the same time charging residents unreasonably high rates (i.e., $12,000 impact fee for a water meter) and providing little or no benefit to residents in return.

UEP Taken Over by State Amid Concerns About FLDS Trying to Bankrupt UEP

The UEP was formed decades ago by FLDS church leaders seeking to manage residents’ “consecrated” properties under a communal system, but Utah’s court system took over the management of the UEP a decade ago amid concerns that FLDS leaders were defaulting on their responsibility to defend trust members’ holdings and driving the trust toward insolvency.  The state’s management of the UEP trust created a situation where FLDS members have been pitted against the trust they had established in an ongoing adversarial relationship.

UEP’s Lawsuit Seeks Control of Water Distributed From UEP Land

UEP’s lawsuit seeks control of the water distributed from UEP owned land, as well as back payment for water taken from the land without compensation to UEP.  It has been alleged that TCWW earned and disbursed more than $4.3 million between 2002 and 2009, none of which was paid to UEP, and that $1.7 million of that was diverted for purposes wholly unrelated to TCWW.  UEP also seeks to have the court put in place a new system of water distribution management to ensure that TCWW is not allowed to take water from UEP land without providing compensation in the future.

Judge Westfall Takes Question of Who Should Control Short Creek Water Rights Under Advisement

The question of who will control the water rights in the Short Creek area is now in the hands of Fifth District Judge G. Michael Westfall.  Late last month, after accepting an agreement between TCWW and UEP, which resolved a number of the issues regarding water rights in the border towns of Hildale and Colorado City, Judge Westfall took under advisement arguments over who has the right to control the water in the neighboring municipalities.

Over the objection of TCWW, Judge Westfall agreed with UEP, ruling that the Fifth District had jurisdictional authority to decide who has control over the water on the Arizona side of the border.  TCWW had argued to Judge Westfall that a Mohave County (Arizona) court should decide the issue, but Judge Westfall disagreed.  As a result, for now, the fate of the water on the Arizona side of the border lies in the hands of a Utah judge.

UEP Argues Its Ownership of the Land Gives it Right to Control Water

In support of its argument that it is entitled to control the water between Hildale and Colorado City, UEP attorney, William Walker, argued that, on account of the fact that UEP owns the land, the law gives UEP sole control over collecting underground water through a “right of fiduciary” and to control surface water via existing property rights.

TCWW Compares Easement to Hunting Permits

In response, James Spendlove, the attorney for the TCWW utility, compared access to underground water to a hunting permit, arguing that, so long as an individual has a permit to hunt animals and is allowed to be on the land, then that person has the right to kill and take the animal and benefit from the meat without having to give the meat back.  Spendlove told the court that UEP granted TCWW an easement some forty years ago to allow TCWW to place its well equipment on UEP’s land and draw water from the ground under the land.  Spendlove also noted that TCWW has an Arizona permit for it well operations.

UEP Says Easement Granted Access Only

UEP replied that the easement granted to TCWW gave the utility access to the water, but it did not vest any control over the water rights in TCWW.  According to UEP, such rights would have to be conveyed in a separate document, and that TCWW rejected the idea of easement rights to the water, alleging that TCWW had the right to take the water by way of “unrecorded leases.”  TCWW has been unable to produce these alleged “unrecorded leases,” UEP told the court.

UEP’s Suit One of Many Legal Woes for TCWW

Judge Westfall has not given a timetable for his decision.  Even still, the battle over the water rights in Hildale and Colorado City is not the only legal trouble the TCWW has had to face over the last year or so.

Utah AG’s Office Sues TCWW Over Illicit Funding of FLDS Church

In March 2015, the Utah Attorney General’s Office filed a lawsuit against TCWW, which asked Washington County, Utah’s Fifth District Court to close down the utility.  The lawsuit was filed as part of the efforts to disrupt the allegedly illicit funding of the FLDS church.  According to the complaint: “The officers of (Twin City Water Works) are not properly discharging their duties, have no knowledge of the operations of the nonprofit corporation, and appear incapable of ensuring that the nonprofit properly uses its revenue to improve, maintain, and expand the TCWW water system.”

“The TCWW water system is in very poor condition, and it appears that little revenue, if any, has been used for the maintenance, expansion, or development of the TCWW water delivery system,” the attorney general’s complaint summarizes.

Willie Jessop Sues TCWW Seeking to Tie Utility to FLDS Church

Just one month later, Hildale businessman and former security representative for the FLDS church, Willie Jessop, filed his own suit against TCWW, seeking to tie the utility to the FLDS church, which owes Jessop approximately $30 million dollars by way of a default judgment entered against the church in 2012.

TCWW Pleads Guilty to Tax Evasion

The TCWW utility also pleaded guilty to tax evasion last year, acknowledging it had failed to pay corporate tax on income of $112,634 per year between 1996 and 2013.  The plea agreement stated the company owed $147,624.61 in back taxes, plus another $223,000 in interest and penalties.

No Water Without Compensation

While it remains to be seen what Judge Westfall will decide as it relates to water rights in the Short Creek Area, it is clear that the UEP wants a new system put in place to ensure TCWW cannot remove water from UEP land without compensating UEP.  Like others suing the utility, UEP appears increasingly concerned that revenues generated by TCWW are neither being paid to UEP nor are being used to maintain the TCWW water system.  Instead, those funds appear to be lining the pockets of FLDS leaders and TCWW employees.

Hildale/Colorado City Residents Real Losers in Water Rights Dispute

Beyond UEP, the big losers in the battle over water rights in the Short Creek area are the residents in Hildale and Colorado City that are being victimized via unreasonably high rates charged by TCWW.  Hildale instituted a steep hike in impact fees for water services in March 2015.  UEP employees said the hike in impact fees frustrated efforts to sell some vacant lots without water and sewer at an auction earlier in the month.

Another issue affecting the auction was the cost of constructing an 8-inch water main to some of the properties.  “The city is telling them these lots will not be served until we get an 8-inch main to serve the entire area because we can’t just take 1-inch, 2-inch lines off of a 1-inch, 2-inch line,” UEP employee Jethro Barlow said.  UEP attorney Jeff Barlow said a problem with the requirement is Hildale is asking each resident to pay for the entire stretch of pipe to their property, so at $25,000 per block, a resident four blocks from the access point would pay $100,000. So would any other residents within the 4-block area, he said.

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Copyright 2016