IN RE APPROPRIATION A-7603
No. S-14-906
Nebraska Supreme Court
August 21, 2015
291 Neb. 678
Nebraska Advance Sheets; Water Division 2-A; Broken Bar Nine Living Trust, appellant, v. Nebraska Department of Natural Resources, appellee.
Administrative Law: Statutes: Appeal and Error. In an appeal from the Department of Natural Resources, an appellate court‘s review of the director‘s factual determinations is limited to deciding whether such determinations are supported by competent and relevant evidence and are not arbitrary, capricious, or unreasonable; however, on questions of law, which include the meaning of statutes, a reviewing court is obligated to reach its conclusions independent of the legal conclusions made by the director. - Irrigation: Statutes: Intent: Appeal and Error. Statutory law on the subject of irrigation and the decisions of the appellate courts dealing therewith show a clear intention to enforce and maintain a rigid economy in the use of the public waters of the state.
- Waters: Irrigation: Administrative Law. Concerning the administration of public waters, one purpose of the State is to avoid waste and to secure the greatest benefit possible from the waters available for appropriation for irrigation purposes.
- Waters. It is the policy of statutory law to require a continued beneficial use of appropriated waters.
- ____. An appropriator will not be permitted to retain an interest in public waters, to which he has a valid appropriation, which is not put to a beneficial use.
- Waters: Irrigation: Property: Words and Phrases. In the context of an appropriation for irrigation, beneficial use requires actual application of the water to the land for the purpose of irrigation.
- Waters: Irrigation: Abandonment. At common law, an appropriation of water for irrigation purposes may be lost by nonuse or abandonment.
Administrative Law: Words and Phrases. A decision is arbitrary when it is made in disregard of the facts or circumstances and without some basis which would lead a reasonable person to the same conclusion. - Words and Phrases. A capricious decision is one guided by fancy rather than by judgment or settled purpose.
- Administrative Law: Words and Phrases. The term “unreasonable” can be applied to an administrative decision only if the evidence presented leaves no room for differences of opinion among reasonable minds.
Appeal from the Department of Natural Resources. Affirmed.
Jovan W. Lausterer, of Bromm, Lindahl, Freeman-Caddy & Lausterer, for appellant.
Douglas J. Peterson, Attorney General, Justin D. Lavene, and Emily K. Rose for appellee.
HEAVICAN, C.J., WRIGHT, CONNOLLY, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ.
MILLER-LERMAN, J.
NATURE OF CASE
Water appropriation A-7603, “Water Division 2-A” (Appropriation), was a surface water right to divert a specified volume of water from the North Loup River to “be used for irrigation purposes only.” The Broken Bar Nine Living Trust (Trust), the appellant, held the Appropriation and the lands covered by it. The Nebraska Department of Natural Resources (Department), the appellee, issued a “Notice of Preliminary Determination of Nonuse of [the Appropriation]” to the Trust. After a hearing, the Department concluded that the lands designated under the Appropriation had not been irrigated for more than 5 consecutive years and that the Trust had failed to establish sufficient cause for nonuse under
The parties generally do not dispute the underlying facts of this case. In its “Order of Cancellation” dated September 9, 2014, the Department made the following findings of fact, which are supported by the record:
- [The Appropriation] is a permit currently shown in the Department‘s records in the name of the . . . Trust with a priority date of May 27, 1955, to divert 1.15 cubic feet per second (cfs) of water from the North Loup River at points of diversion located in the S1/2 of Section 10 and the NE1/4NE1/4 of Section 15, Township 22 North, Range 20 West of the 6th P.M. in Loup County, for irrigation of the following described lands (Exhibit 10):
Township 22 North, Range 20 West of the 6th P.M. in Loup County Acres Section 10: Lot 5 24.8 Lot 6 (E1/2SW1/4) 32.6 Lot 7 (SW1/4SE1/4) 16.1 Section 15: NE1/4NW1/4 3.9 NW1/4NE1/4 33.8 NE1/4NE1/4 12.5 SE1/4NE1/4 2.4 TOTAL 126.1 - Based upon a verified field investigation report, a Notice of Preliminary Determination was issued on July 26, 2013, in accordance with
Neb. Rev. Stat. §§ 46-229.02 and46-229.03 [(Reissue 2010)] stating that it appeared that all of the water appropriation for irrigation of lands described above had not been used for more than five consecutive years and that the Department knew of no reason that constitutes sufficient cause as provided in . . .§ 46-229.04 . - A contest was filed on August 23, 2013, by [the] legal representative for [the] Trust.
- Department staff reviewed the contest and on June 12, 2014, filed a motion for hearing.
Notice of a hearing was issued on June 26, 2014, and a corrected notice was mailed on July 1, 2014, in accordance with . . . §§ 46-229.02(5) and46-229.03 .- A hearing was held in Lincoln, Nebraska, on July 31, 2014, as provided by . . .
§ 46-229.04 . - The Department . . . appeared and was represented by its attorney. [A] Department staff member . . . was called as a witness. The Department entered several exhibits, including a verified field investigation report which was entered into evidence as Exhibit 1. The field report indicates that all of the lands included under [the Appropriation] have not been irrigated for more than five consecutive years. [The Department staff member‘s] testimony showed that there was sufficient water in the North Loup River for [the] Appropriation.
- [The] attorney . . . for [the] Trust [appeared]. In his opening statement, [the attorney] stated, “I would concur in that I think it‘s important for the Director and the Department to know that the . . . Trust is not arguing that there was agricultural beneficial use of the [A]ppropriation in question during the relevant five-year time span.”
[The Trust] called . . . one of the trustees . . . as a witness. [The trustee‘s] testimony described the purpose of the [T]rust, which included providing income to support his grandmother during her lifetime. [The trustee] also described the rental agreement the [T]rust had with its tenant, and the poor shape that the existing irrigation equipment was in.
[The Trust] entered several exhibits, including: pictures of the irrigation equipment; lease agreements; an unsigned copy of a trust; and the death certificate of . . . the recipient of the trust.
Under examination and cross examination, [the trustee] marked on Exhibit 9 several areas of land that
9. In his opening statement, [the attorney for the Trust] stated that the owners were arguing that they met the exceptions for nonirrigation under . . .
Attached to the original Contest filed by [the Trust] was a document marked Exhibit “A” in which the Trust asserted that
In its analysis, the Department first determined that
The Department referred to the controlling statutes in its order. Section
(1) At a hearing held pursuant to section
46-229.03 , the verified field investigation report of an employee of the [D]epartment, or such other report or information that is relied upon by the [D]epartment to reach the preliminary determination of nonuse, shall be prima facie evidence for the forfeiture and annulment of such water appropriation. If no person appears at the hearing, such water appropriation or unused part thereof shall be declared forfeited and annulled. If an interested person appears and contests the same, the [D]epartment shall hear evidence, and if it appears that such water has not been put to a beneficial use or has ceased to be used for such purpose for more than five consecutive years, the same shall be declared canceled and annulled unless the [D]epartment finds that (a) there has been sufficient cause for such nonuse as provided for in subsection (2), (3), or (4) of this section or (b) subsection (5) or (6) of this section applies.
Section
(4) Sufficient cause for nonuse shall be deemed to exist for up to fifteen consecutive years if such nonuse was a result of one or more of the following:
(a) Federal, state, or local laws, rules, or regulations temporarily prevented or restricted such use;
(b) Use of the water was unnecessary because of climatic conditions;
(c) Circumstances were such that a prudent person, following the principles of good husbandry, would not have been expected to use the water;
(d) The works, diversions, or other facilities essential to use the water were destroyed by a cause not within the control of the owner of the appropriation and good faith efforts to repair or replace the works, diversions, or facilities have been and are being made;
(e) The owner of the appropriation was in active involuntary service in the armed forces of the United States or was in active voluntary service during a time of crisis;
(f) Legal proceedings prevented or restricted use of the water; or
(g) The land subject to the appropriation is under an acreage reserve program or production quota or is otherwise withdrawn from use as required for participation in any federal or state program or such land previously was under such a program but currently is not under such a program and there have been not more than five consecutive years of nonuse on that land since that land was last under that program.
The [D]epartment may specify by rule and regulation other circumstances that shall be deemed to constitute sufficient cause for nonuse for up to fifteen years.
Subsection (5) of
The Department concluded that “the verified field investigation report information is correct, and that the land under [the Appropriation] has not been irrigated from the North Loup River for more than five consecutive years.” The Department noted that two fields of the land at issue were last irrigated 8 years before and that thus, they had been irrigated in the past 15 years. The Department further stated that the rest of the land under the Appropriation had not been irrigated for more than 15 years.
The Department determined that there was no evidence to show that the excusable reasons provided in
With respect to the two tracts of land that had been irrigated in the past 8 years, the Department determined that none of the excusable reasons for nonuse provided in
In general, it appears that the reason for nonuse was that the Trustees chose to lease the property to an individual that wanted to raise cattle and did not want to irrigate due to age, difficulty of irrigation, lack of good equipment, and the tenant‘s intended use of the land.
Based on its determinations, the Department ordered that the Appropriation be canceled.
The Trust appeals.
ASSIGNMENTS OF ERROR
Restated, the assignments of error which the Trust has both assigned and argued are as follows: (1) The Department‘s finding that the Appropriation should be canceled is arbitrary,
STANDARD OF REVIEW
[1] In an appeal from the Department, an appellate court‘s review of the director‘s factual determinations is limited to deciding whether such determinations are supported by competent and relevant evidence and are not arbitrary, capricious, or unreasonable; however, on questions of law, which include the meaning of statutes, a reviewing court is obligated to reach its conclusions independent of the legal conclusions made by the director. In re 2007 Appropriations of Niobrara River Waters, 288 Neb. 497, 851 N.W.2d 640 (2014).
ANALYSIS
Summary of Relevant Nebraska Surface Water Law.
At issue in this case is the Appropriation which authorized the Trust to divert up to a specified volume of water from the North Loup River to “be used for irrigation purposes only” using “the least amount of water necessary for the production of crops in the exercise of good husbandry.” Before addressing the specific issues in this appeal, we set forth some general principles regarding Nebraska surface water law applicable to this case.
[2,3] The Nebraska Constitution declares the necessity of water for domestic use and for irrigation purposes in this state to be a natural want.
Our statutory law on the subject of irrigation and the decisions of this court dealing therewith show a clear
intention to enforce and maintain a rigid economy in the use of the public waters of the state. It is the policy of the law in all the arid states to compel an economical use of the waters of natural streams. One of the very purposes of the State in the administration of public waters is to avoid waste and to secure the greatest benefit possible from the waters available for appropriation for irrigation purposes. Farmers Canal Co. v. Frank, 72 Neb. 136, 100 N.W. 286 [(1904)].
State v. Birdwood Irrigation District, 154 Neb. 52, 55, 46 N.W.2d 884, 887 (1951).
[4,5] This case involves an appropriation of surface water for irrigation. An appropriation right is a right to divert unappropriated surface water for beneficial use.
[6] In the context of an appropriation for irrigation, we have ruled that beneficial use requires “actual application of the water to the land for the purpose of irrigation.” Hostetler v. State, 203 Neb. 776, 781, 280 N.W.2d 75, 78 (1979). Appropriators who fail to comply with the beneficial use requirement are subject to cancellation of their rights to use the water by the Department pursuant to proceedings brought under
Appropriation Statutes.
The framework for our consideration of this appeal is found in chapter 46 of the Nebraska Revised Statutes pertaining to
Section
All appropriations for water must be for a beneficial or useful purpose and . . . when the owner of an appropriation or his or her successor in interest ceases to use it for such purpose for more than five consecutive years, the right may be terminated only by the director [of the Department] pursuant to sections
46-229.02 to46-229.05 .
Sections
Section
Regarding
if it appears that such water has not been put to a beneficial use or has ceased to be used for such purpose for more than five consecutive years, the same shall be declared canceled and annulled unless the [D]epartment finds that (a) there has been sufficient cause for such
nonuse as provided for in subsection (2), (3), or (4) of this section or (b) subsection (5) or (6) of this section applies.
As noted above,
The provisions of
(4) Sufficient cause for nonuse shall be deemed to exist for up to fifteen consecutive years if such nonuse was a result of one or more of the following:
(a) Federal, state, or local laws, rules, or regulations temporarily prevented or restricted such use;
(b) Use of the water was unnecessary because of climatic conditions;
(c) Circumstances were such that a prudent person, following the principles of good husbandry, would not have been expected to use the water;
(d) The works, diversions, or other facilities essential to use the water were destroyed by a cause not within the control of the owner of the appropriation and good faith efforts to repair or replace the works, diversions, or facilities have been and are being made.
Arbitrary, Capricious, or Unreasonable.
As we understand it, the Trust is generally challenging the scheme by which an appropriation once conferred can be canceled. That is, the Trust claims that the act of cancellation is arbitrary, capricious, or unreasonable. We find no merit to this claim.
[7] To the extent the Trust contends that once an application for an appropriation has been approved, the appropriation
[8-10] To the extent the Trust contends that the Department‘s processing of this case and its decision are arbitrary, capricious, or unreasonable, we also reject this argument. We addressed such a challenge in In re Water Appropriation A-4924, 267 Neb. 430, 434, 674 N.W.2d 788, 791 (2004), wherein we stated:
In an appeal from the Department, an appellate court‘s review of the director‘s factual determinations is limited to deciding whether such determinations are supported by competent and relevant evidence and are not arbitrary, capricious, or unreasonable. City of Lincoln v. Central Platte NRD, 263 Neb. 141, 638 N.W.2d 839 (2002). A decision is arbitrary when it is made in disregard of the facts or circumstances and without some basis which
would lead a reasonable person to the same conclusion. Bethesda Found. v. Buffalo Cty. Bd. of Equal., 263 Neb. 454, 640 N.W.2d 398 (2002). A capricious decision is one guided by fancy rather than by judgment or settled purpose. In re Application of Neb. Pub. Serv. Comm., 260 Neb. 780, 619 N.W.2d 809 (2000). The term “unreasonable” can be applied to an administrative decision only if the evidence presented leaves no room for differences of opinion among reasonable minds. Pittman v. Sarpy Cty. Bd. of Equal., 258 Neb. 390, 603 N.W.2d 447 (1999).
The record in this case shows that the field investigation report by a Department staff member was introduced at the hearing as evidence that the Appropriation should be canceled. Section
We have recognized the burden-shifting analysis described above in our cases. In In re Water Appropriation A-4924, supra, we noted that the Department bore the burden to establish nonuse for the statutory period and that this fact could be established by the verified report of the Department. Once the report has been presented, then the appropriator must show cause why the appropriation should not be terminated. That is, the language of the statute clearly indicates that the burden is upon the appropriator to present evidence showing either that water was taken, contrary to the report filed by the Department, or that some excuse existed for nonuse.
In this case, the Trust did not contend that the water had been put to a beneficial use for irrigation during the prior 5 consecutive years. Once it had been established that the
Evidence Regarding Excuse for Nonuse: § 46-229.04(4)(a) to (d).
The Trust contends that its evidence established sufficient cause for nonuse under
Section
We recognize that administration of the Trust required adherence to good faith, see
Section
Section
The Trust asserts that properly running a cattle operation invariably underutilizes an appropriation. The Trust refers us to the record which shows that the tenant used the property and minimal water in a cow-calf operation; the Trust asserts that in doing so, it followed the principles of good husbandry, thus excusing nonuse. We reject the Trust‘s argument.
It is fundamental under
We have previously rejected an argument similar to that proffered by the Trust. In Hostetler, supra, we rejected the contention that the use of creek water subject to an appropriation for irrigation to water cattle was a use within the meaning of the appropriation. It would be an illogical reading of
We reject the Trust‘s statutory construction which would effectively have us endorse a nonpermitted use of some amount of water as an excuse for nonuse of the one described in the appropriation. We do not agree with the Trust‘s reading of
Section
The Trust refers us to evidence that a “Vermeer boom” was destroyed in a windstorm “prior to 2000” and that it obtained quotes for the costs of replacing the nonfunctioning irrigation equipment. Nothing in the record suggests meaningful good faith efforts were made to repair such equipment after 2000, and the quotes to which the Trust refers were obtained after the Department issued its “Preliminary Determination of Nonuse,” and there is no evidence that repairs have been pursued. In an earlier case, we found unpersuasive the “diversion of some amount of water” only after the Department‘s inspection showed nonuse for the statutory period. See Hostetler v. State, 203 Neb. at 781, 280 N.W.2d at 78. Similarly, we agree with the Department that obtaining a quote without more only after the “Preliminary Determination of Nonuse” was issued did not establish good faith efforts at repair or sufficient cause for nonuse under
CONCLUSION
For the reasons explained above, we determine the Trust failed to establish sufficient cause to excuse its nonuse of the Appropriation and we therefore affirm the Department‘s “Order of Cancellation.”
AFFIRMED.
STEPHAN, J., not participating.