A federal district court judge — not a Nevada state court — has jurisdiction in a water rights dispute even though the dispute involves decisions of the Nevada State Engineer, the Ninth U.S. Circuit Court of Appeals has ruled.
The decision is the second Ninth Circuit ruling in the last six months stemming from disputes over water allocation between federal and local governments in Churchill County, Nevada, east of Reno. The ruling emerged after a series of "dueling injunctions" in federal and state court.
In 1996, the U.S. Fish & Wildlife Service announced a plan to reallocate water from the Newlands Reclamation Project in response to a 1990 federal law designed to resolve a series of complex water-rights issues involving native tribes and environmentalists. Among other things, the Service has been charged with the task of reallocating enough water to restore 25,000 acres of wetlands in the Lahontan Valley. Under the plan, the Service expects to buy rights to 55,000 acre-feet of water from within the Carson Division of the Newlands project, and acquire 35,000 acre-feet through other means. The Carson Division is located in Churchill County, Nevada, near the City of Fallon.
Fallon, Churchill County, and the Sierra Pacific Power Co. have all pursued litigation to try to block the water transfers. Last year, for example, the three parties won a Ninth Circuit ruling that the Fish & Wildlife Service should have prepared a programmatic environmental impact statement under the National Environmental Policy Act early in the process, rather than a final EIS later on. (See CP&DR Legal Digest, December 1998.)
However, Churchill County also filed a protest with Nevada State Engineer Michael Turnipseed seeking to block the Fish & Wildlife Service's request for Turnipseed to reallocate the water. Under the legal settlements that originally adjudicated the water, known as the Alpine and Orr Ditch decrees, the state engineer's approval is required when a reallocation would alter the manner and use of the water in way that the legal settlements did not contemplate.
In the protest, Churchill County argued that the water transfer would deplete the county's groundwater supply, harm its tax base, and create a dust hazard. After a public hearing in 1996, Turnipseed granted one of the Fish & Wildlife Service's reallocation requests. Churchill County then appealed Turnipseed's decision to the Third Judicial District Court, a Nevada state court. Before the Third Judicial District, Turnipseed argued that only federal courts have jurisdiction over alterations of federally adjudicated water rights.
Turnipseed and the federal government asked U.S. District Court Judge Lloyd D. George to enjoin the Nevada state court from further proceedings. Churchill County then filed a motion in state court, asking the state court judge to enjoin the federal proceeding. Both the federal and state judges then issued injunctions against the other.
Churchill County appealed the federal court injunction to the Ninth Circuit in San Francisco, arguing that the federal courts have only limited jurisdiction in the matter.
A three-judge panel of the Ninth Circuit ruled that the federal courts do, in fact, have jurisdiction over Turnipseed's rulings. "We have consistently interpreted both the Alpine and Orr Ditch Decrees to provide for federal district court review of decisions of the State Engineer regarding applications to change the place of diversion or manner or place of use of water rights derived from the Alpine and Orr Ditch Decrees," Judge Wallace Tashima wrote for the panel.
In reaching this conclusion, Tashima referred to a whole series of lawsuits interpreting the two decrees, most recently United States v. Orr Water Ditch Co., 914 F.2d 1302 (9th Cir. 1990).
Churchill County had argued that the Fish & Wildlife Service's application to Turnipseed is not subject to federal court review because federal jurisdiction permitted under the decrees "is highly extraordinary‚ and limited to cases involving the federal interests in the Newlands Reclamation Project."
The Ninth Circuit rejected this argument, noting that even if jurisdiction is limited to "highly extraordinary" circumstances, this "does not mean the district court may exercise jurisdiction only in rare instances." Rather, according to the Ninth Circuit, the language refers to the highly extraordinary circumstance of the district court's appellate jurisdiction over the water allocation as spelled out in the two decrees.
Tashima's ruling also concluded that the federal courts have exclusive jurisdiction over reallocation under the decrees, meaning state courts do not have jurisdiction. In addition, the Ninth Circuit rejected Churchill County's argument that Judge George had abused his discretion because he did not need to impose an injunction in order to retain his supposedly limited jurisdiction over the case. The Ninth Circuit noted that federal courts are empowered to enjoin state court proceedings that interfere with federal judgments.
In a similar vein, the Ninth Circuit also rejected Churchill County's argument that Judge George's injunction amounted to a direct federal district court review of state court decision, which is not permitted. The Ninth Circuit reasoned that Judge George's ruling was based not on his interpretation of state law, but on his conclusion that the state court had improperly ruled on a matter over which the federal court had jurisdiction.
United States v. Alpine Land & Reservoir Co., No. 97-17011, and
United States v. Orr Water Ditch Co., No. 97-17016, 99 C.D.O.S. 2569, 99
Daily Journal D.A.R. 3352 (filed April 8, 1999).
For U.S. Government: Lois J. Shiffer, Assistant Attorney General, Sacramento, (916) 554-2100.
For State of Nevada: David C. Creekman, Deputy Attorney General, (775) 687-4170.
For Churchill County: Richard G. Campbell, Campbell & Stone, Reno, (775) 332-0707.