Tuesday, August 20, 2013

Delta Canal Company v. Frank Vincent Family Ranch

Last week, the Utah Supreme Court issued its opinion in Delta Canal Co. v. Frank Vincent Family Ranch LC.  In this case, Delta Canal Company, Melville Irrigation Company, Abraham Irrigation Company, Deseret Irrigation Company, and Central Utah Water Co. ("DMADC") brought a lawsuit seeking forfeiture of a portion of a water right owned by Frank Vincent Family Ranch ("Vincent").  DMADC alleged that Vincent and/or Vincent's predecessor had forfeited about 20% of the water right due to nonuse and/or abandonment.

The district court ruled in favor of Vincent, holding that DMADC was precluded from claiming partial abandonment or partial forfeiture.  The district court's ruling was based on its determination that because Vincent had not received his full flow of water each year, Vincent was protected by a statutory exception to forfeiture.  Part of the district court's ruling was that Utah law did not recognize partial forfeiture of a water right prior to 2002.  DMADC appealed the decision to the Utah Supreme Court.

The Utah Supreme Court began its analysis by examining whether partial forfeiture of a water right existed prior to 2002, which was the year when the Utah legislature amended Utah Code 73-1-4 to explicitly provide for partial forfeiture.  The Court noted that the doctrine of partial forfeiture had been enunciated in several prior Utah Supreme Court opinions, starting in 1897.  The Court next concluded that partial forfeiture is inherent in Utah's beneficial use regime, and that the only way to reconcile the forfeiture statue (73-1-4) with the beneficial use statute (73-1-3) is to conclude that partial forfeiture has always existed in Utah law.  The Court also noted that many other courts in the western United States have also concluded that partial forfeiture is inherent in the concept of beneficial use.

The Utah Supreme Court next tackled the issue of forfeiture versus abandonment of a water right.  The Court reiterated its statements from prior cases that abandonment and forfeiture are distinct legal concepts.  Forfeiture is governed by Utah Code 73-1-4.  Abandonment, on the other hand, is a common law principle that requires intent by the water right owner to give up the water right (something not required by the forfeiture statute) and does not have a time requirement (like the seven-year period of nonuse required by the forfeiture statute).

Finally, the Utah Supreme Court addressed some additional issues related to forfeiture.  The Court instructed that a forfeiture analysis should focus on volume (i.e., acre-feet) of water, and not on acres irrigated or on flow (i.e., cubic feet per second or cfs) limitations of a water right.  Perhaps the most interesting paragraph of the opinion is paragraph 41, which states:

"Finally, the number of acres irrigated is not determinative in a forfeiture analysis, though it may be relevant insofar as it indicates whether water usage is beneficial.  Farmers may reduce the total acres irrigated to grow a more water-intensive crop, or vice-versa, so long as they beneficially use their full entitlement.  The number of acres irrigated need not match the number listed on a proposed determination or a final decree from a general adjudication.  The central question in any forfeiture proceeding is whether the appropriator used all of its water allowance in a reasonable manner and for a beneficial purpose."

This paragraph is interesting because it conflicts with the current legal interpretations and policies of the Utah Division of Water Rights.  Accordingly, it will be interesting to see if the Division of Water Rights (who filed an amicus brief in this case), or perhaps even DMADC, will request the Utah Supreme Court to reconsider its opinion.

To read the full opinion, click here.

[UPDATE: The Utah Supreme Court issued an amended opinion to modify paragraph 41.  Click here to read more.]

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