Estermann v. Bose, 296 Neb. 228

Background

N-CORPE, a joint interlocal entity formed by four Nebraska Natural Resources Districts (NRDs) under the Interlocal Cooperation Act (ICA), pursued condemnation in county court to obtain a flowage/right-of-way easement across Estermann’s land to augment streamflow into Medicine Creek and help Nebraska comply with the Republican River Compact.
Estermann filed a district-court action seeking injunctive relief to stop the condemnation and N-CORPE’s water discharges, alleging (inter alia) that N-CORPE lacks eminent-domain authority, failed to obtain required permits/approvals (DNR, NRDs, and RRCA), violated Nebraska common law on groundwater transfers, and that the taking was not for a public use.
The district court denied temporary injunctive relief, concluded N-CORPE had condemnation authority under the ICA, rejected Estermann’s permit/standing/forum challenges, denied leave to amend as futile, and granted N-CORPE summary judgment, dismissing Estermann’s complaint.
Estermann appealed; the Nebraska Supreme Court reviewed de novo legal issues (statutory interpretation, futility of amendment) and for abuse of discretion the denial of leave to amend, while applying summary-judgment standards to material facts.
The Supreme Court affirmed: it held N-CORPE may exercise eminent domain through the joint-entity mechanism in the ICA; DNR and NRD permits/approvals Estermann challenged were not required under the circumstances; RRCA approval relates to augmentation-credit accounting (not a prerequisite to physical implementation); common-law transfer limitations were superseded by statutory authority allowing NRDs to develop, store, transport, and provide water; and the condemnation served a public use (Compact compliance).

Issues

Issue	Plaintiff's Argument (Estermann)	Defendant's Argument (N-CORPE)	Held
Whether N-CORPE has eminent-domain authority	ICA does not expressly grant eminent-domain power to interlocal entities; only Legislature may delegate such power	ICA (§13-804) allows participating public agencies to jointly exercise powers they individually hold; NRDs each have eminent-domain power (§2-3234) so N-CORPE can exercise it	Held: N-CORPE authorized to exercise eminent domain as joint entity under ICA
Whether DNR conduct-water permit (§46-252) was required	N-CORPE’s augmentation adds water to stream and thus needs a conduct-water permit and DNR oversight	N-CORPE is not guaranteeing delivery/quantity downstream or monitoring a protected quantity; project augments basin flow, not a §46-252 protected conduct	Held: No §46-252 conduct-water permit required for N-CORPE’s operations
Whether ground-water-transfer permit (§46-613.01) was required for interstate transfer	N-CORPE is effectively transporting water that will reach Kansas and thus needs a transfer permit	Project does not withdraw/transport groundwater “for use in another state”; purpose is basin augmentation for Compact compliance, not delivery to Kansas users	Held: §46-613.01 permit not required for N-CORPE’s augmentation project
Whether NRDs’ internal permits/approvals were required or were waived	Middle Republican and Twin Platte NRDs’ rules require permits for such activity; N-CORPE lacked those written permits	Those NRDs voted to participate on N-CORPE board and thereby approved the project through their participation, effectively waiving separate permits	Held: NRD-level permits were not required; NRDs’ participation constituted approval
Whether RRCA approval was prerequisite to project implementation	FSS language requires RRCA approval of augmentation plans prior to implementation	RRCA approval concerns augmentation-credit accounting (to receive Compact credit), not physical construction/operation; implementation does not require prior RRCA sign-off	Held: RRCA approval not a prerequisite to construction/operation; amendment asserting lack of RRCA approval was futile
Whether denial of leave to amend was erroneous	Proposed amendment to add RRCA-approval claim should have been allowed	Amendment was offered after discovery and summary-judgment motion; claim is not legally viable on the record (futile)	Held: Denial affirmed; appellate review de novo on futility and amendment would not create triable issue
Whether common-law prohibition against exporting groundwater bars N-CORPE	Nebraska common law disallows transferring groundwater off overlying land	Statutes grant NRDs authority to develop, store, transport, and provide water and to use augmentation as part of integrated management plans (§2-3238, §46-715) — legislative exception	Held: Common-law prohibition does not bar N-CORPE; statutory scheme permits the augmentation/transport used here
Whether condemnation served a public use	Project primarily benefits private irrigators; thus taking is private	Purpose is Compact compliance and statewide public interest; private benefits incidental	Held: Condemnation serves a public use (Compact compliance); summary judgment appropriate

Key Cases Cited

Thompson v. Heineman, 289 Neb. 798 (Neb. 2015) (describing eminent-domain principles and legislative delegation)
In re Referral of Lower Platte South NRD, 261 Neb. 90 (Neb. 2001) (Nebraska common law disallows exporting groundwater absent legislative authorization)
Kubicek v. City of Lincoln, 265 Neb. 521 (Neb. 2003) (joint entity under ICA can exercise combined statutory authority of its creators)
Burlington Northern Santa Fe Ry. Co. v. Chaulk, 262 Neb. 235 (Neb. 2001) (public-use requirement for eminent domain)
Burger v. City of Beatrice, 181 Neb. 213 (Neb. 1967) (condemnation invalid when dominant purpose is private use)
Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (U.S. 1982) (groundwater allocation and state regulatory authority discussed)
Bailey v. First Nat. Bank of Chadron, 16 Neb. App. 153 (Neb. Ct. App. 2007) (standard for leave to amend and futility analysis)
Hayes v. County of Thayer, 21 Neb. App. 836 (Neb. Ct. App. 2014) (amendment after discovery/summary-judgment requires substantial record support to avoid futility)