Wednesday, December 28, 2016

Bresee v. Barton

The Utah Court of Appeals recently issued its opinion in the case of Bresee v. Barton. The case dealt with issues of joint use of a pipeline and condemnation of an easement for water use.

The Bresees owned a piece of land that was surrounded on three sides by the Bartons' farmland. The Bartons irrigated their farmland with a combination of water from an irrigation company and water from a well on their property. Both sources of water were conveyed in a mainline through the Bartons' property. The Bresees also owned shares in the irrigation company, but did not have a way to convey their irrigation water to their property other than by using the Bartons' mainline. The Bresees (like their predecessors) entered into agreements with the Bartons under which the Bresees could convey their irrigation water through the Bartons' mainline in exchange for the Bartons being allowed to farm part of the Bresees' property. After a few years, a dispute arose between the Bartons and the Bresees, and the agreement was terminated. Shortly thereafter, the Bresees entered onto the Bartons' property, dug down to the mainline, installed a T-connection, and ran a water line back to the Bresees' property. Upon discovering this action, the Bartons removed the T-connection and restored the mainline to its prior state.

The Bresees then filed an action in district court claiming an easement to convey their water through the mainline. The Bresees relied on various legal theories, including eminent domain (condemnation). The district court first granted summary judgment against the Bresees, determining that the Bresees did not have an easement to use the Bartons' mainline. Following a trial, the district court again determined that the Bresees had no easement to access the Bartons' mainline, and consequently ruled in favor of the Bartons. The district court awarded trespass damages, punitive damages, and attorney fees to the Bartons. The Bresees appealed the decision to the Court of Appeals.

In its decision, the Court of Appeals reviewed Utah Code section 73-1-6, which gives a private right of condemnation for reservoirs, dams, canals, ditches, pipelines, and other water conveyance facilities. The Court noted prior case law that condemnation is allowed only if the plaintiff "does not interfere with the rights and use of the defendant's water." In this case, the Bartons had asserted that if the Bresees used the mainline, it would interfere with the Bartons' use of their water shares and water rights. The Bartons' assertions were supported by affidavit testimony. Although the Bresees had attempted to counter the Bartons' assertions through affidavit testimony of their own, the Bresees' affidavits had been struck by the district court because the affidavits contained legal conclusions, lacked foundation, and included inadmissible hearsay. This effectively meant that the Bartons' claims of interference were undisputed. Accordingly, the Court of Appeals concluded that the district court had properly concluded that the Bresees could not condemn an easement in the mainline due to the considerable interference that would result to the Bartons. Accordingly, the Court of Appeals upheld the district court's ruling in favor of the Bartons.

To read the full text of the opinion, click here.

Wednesday, November 9, 2016

Public Meeting Concerning the General Adjudication in Rose Park Area

The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the Rose Park area in Salt Lake County East Division of the Utah Lake / Jordan River Drainage (Area 57, Book 5). The Rose Park area is generally from Main Street on the east to the Jordan River on the west, and from South Temple on the south to the Salt Lake County / Davis County line on the north (see map below). The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the Rose Park area
When: November 30, 2016, 6:00 to 7:00 pm
Where: Department of Natural Resources, Room 1050, 1594 W. North Temple, Salt Lake City
Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 360057298), the State Engineer is authorized and ordered to conduct a general determination of the rights to the use of all water, both surface and underground, within the drainage area of the Rose Park Subdivision, Salt Lake County East Division, of the Utah Lake and Jordan River drainage in Salt Lake County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the Rose Park area to survey existing water rights and investigate water user's claims. Representatives from the Division of Water Rights will be available during this time to discuss the adjudication process, review water rights within the area, and answer questions. If individuals cannot attend, but have questions regarding the adjudication process or water rights within the Rose Park area, please contact Blake Bingham at (801)538-7345.
Agenda:
1.  Introduction (Blake Bingham, P.E. - Adjudication Program Manager)
2.  Adjudication Process Presentation
3.  Public Comments and Questions

The meeting will also be available for remote viewing on YouTube at this link.

For more information about the public meeting, click here.

Friday, November 4, 2016

What Is a Notice to File Statement of Water User's Claim?

Across the State of Utah, there are numerous ongoing General Adjudications, which are court actions to determine all water rights in a given area. Some General Adjudications have been in the process for decades, while other General Adjudications have just begun. Recently, the Utah legislature passed a law that modifies how General Adjudications are administered by the courts and the Utah Division of Water Rights. These new General Adjudications are generally being done in small chunks; i.e., rather than trying to adjudicate a whole river basin at once, the large area is divided into much smaller "subdivisions." For example, the Division has recently initiated General Adjudications in the Rose Park Area, the Jordan Park Area, the West Mill Creek Area, and the Nibley Park Area in Salt Lake County.

If the Division thinks you might own a water right in an adjudication area, or if you are the owner of land in an adjudication area, the Division will include you in the adjudication process. The first notice you will generally receive is a letter letting you know that an adjudication has begun. The letter will generally provide information about a public meeting to discuss the adjudication process. Also included will be a Summons, which is necessary due to the fact that a General Adjudication is a court process.

After the public meeting is held, the next notice you will generally receive is a "Notice to File Statement of Water User's Claim." This Notice alerts you that if you wish to assert a water right within the adjudication area, you must file a Water User's Claim within 90 days. If you do not file a Water User's Claim within the 90-day time period, you will likely lose your water right and/or all right to assert a water right. With this Notice, the Division sends a Water User's Claim form. If the Division has information that you own a particular water right, the Water User's Claim will already be filled out with the water right information that the Division has on its records. If the Division does not have information that you own a water right, the Water User's Claim form will be blank.

Due to the nature of the General Adjudication, it is incumbent that anyone wishing to assert a water right file a Water User's Claim within the 90-day time period. If you need help determining if you can claim a water right or filling out a Water User's Claim, contact me to set up an initial consultation.

Thursday, November 3, 2016

Public Meeting Regarding Groundwater Management Plan in Iron County

The Utah Division of Water Rights has set a public meeting to discuss developing a groundwater management plan for Cedar Valley in Iron County. The following information is from the public meeting notice:

What: Public Meeting
Who: Cedar Valley Water Users
When: December 8, 2016, 6:00 pm
Where: Cedar High School Auditorium, 703 West 600 South, Cedar City
Purpose: The purpose of the meeting is to discuss the process for developing a groundwater management plan for Cedar Valley in Iron County. Personnel from the Division of Water Rights will be available to take all questions and comments provided by the general public and interested parties.
If you are unable to attend the meeting, but would like to provide input, please send your written comments to:
Division of Water Rights
646 North Main St
P.O. Box 506
Cedar City, UT 84721-0506
Agenda:
1. Welcome/Introduction
2. Groundwater Management Plan Discussion
3. Public Questions/Comments

For more information on the meeting, click here.

Tuesday, November 1, 2016

What Is a Special Master's Notice and Order to Show Cause?

This blog articles provides an explanation of a "Special Master's Notice and Order to Show Cause Why Objection to State Engineer's Proposed Determination Should Not Be Dismissed," and what should be done in response to such a Notice.

A General Adjudication is a court action to determine all water rights in a specific area. The Division of Water Rights plays an important role in the General Adjudication, including the preparation of a Proposed Determination, which is a recommendation to the court of the status and quantification of all water rights in the area.

Several decades ago, a General Adjudication was initiated in the Utah Lake and Jordan River area, which area covers all or parts of Salt Lake County, Utah County, Wasatch County, Summit County, and Sanpete County. This large area was divided into smaller "subdivisions," and Proposed Determinations were issued for many of these subdivisions. As allowed by law, some water users filed objections to water rights in the Proposed Determinations. In some circumstances, water users filed objections on their own water rights. For example, a water user may have felt that the Proposed Determination quantified his/her water right for less water than should have been allowed. In other circumstances, water users filed objections on other people's water rights. For example, a water user may have felt that a neighboring user was granted more water than should have been allowed.

These objections, which were filed with the district court, were never fully resolved through the court process. Accordingly, these objections have remained unsettled for several decades. In order to help get these objections resolved, the district court has appointed a Special Master to handle the objections. To get the process started, the Special Master is sending out a "Special Master's Notice and Order to Show Cause Why Objection to State Engineer's Proposed Determination Should Not Be Dismissed" for each objection. The Notice is being sent to each objector and/or successor-in-interest to each objector. Because decades have passed since the objections were originally filed, in many cases the people receiving these notices may have no idea that their predecessor filed an objection.

If a person receives a Notice, they will need to determine whether they want to pursue the objection. If they elect to pursue the objection, they will need to file the "Notice of Intent to Proceed with Objection Proceeding" with the court within 35 days of the date of the Notice. The Special Master will then set a scheduling conference in order to set a schedule for the objection to proceed through the court process.

If you have received a Notice and need assistance understanding the objection and determining whether to proceed with the objection, contact me to set up an initial consultation.

Saturday, October 22, 2016

Little Cottonwood Tanner Ditch Co. v. Sandy City

The Utah Supreme Court recently issued its opinion in the case of Little Cottonwood Tanner Ditch Co. v. Sandy City. The opinion addresses the important issue of when and under what circumstances a water decree can be modified by a court.

The facts of this case go back almost 140 years. In 1878, the several railroad companies entered into an agreement with five ditch companies to acquire water from Little Cottonwood Creek. Under the agreement, the railroads were given the right to use one-tenth of the water in the Creek in exchange for a payment of $25 per month. The railroads' interest in the agreement were later assigned to Salt Lake County Water Company (SLCWC). In 1902, a general adjudication of Little Cottonwood Creek was initiated in court. In 1910, the court issued its final decree adjudicating the water rights, which is commonly referred to as Little Cottonwood Morse Decree. As part of the Decree, the court terminated the 1878 agreement and replaced it with a provision that required SLCWC to pay $75 per month to the five ditch companies in exchange for the right to use one-tenth of the ditch companies' water from the Creek.

In later years, SLCWC's interest was conveyed to Sandy City and Sandy Irrigation Company (Sandy). Because the Decree did not include any provisions for the payment to increase based on inflation or increased water value, Sandy continued to pay $75 per month for the water for more than 100 years. In 2013, three of the ditch companies (Little Cottonwood Tanner Ditch Company, Richards Irrigation Company, and Walker Ditch Company) sought to increase the payment amount. These ditch companies filed a motion with the district court to modify the payment provision contained in the Decree. The district court concluded that it did not have the authority to re-open the Decree, and therefore denied the motion. The ditch companies then appealed the decision to the Utah Supreme Court.

The canal companies asserted that prior Utah Supreme Court decisions had created a common-law rule that permitted the Decree to be re-opened and the payment provision to be modified. The Court reviewed these prior decisions, beginning with Orderville Irrigation Co. v. Glendale Irrigation Co. This case acknowledged that a water decree is not "the usual type of judgment" and that a court "has continuing jurisdiction, when properly invoked, to see its provisions are being complied with" and when "there are uncertainties in the decree which give genuine dispute as to the rights of the parties concerning the use of such waters." The Court determined that these principles enunciated in Orderville are limited to asking a court to enforce a water decree, and do not include or permit a party to ask a court to modify or change any term of a water decree.

The Court also looked at the Salt Lake City v. Salt Lake City Water & Electric Power Co. case. In this case, the parties sought court action to resolve disputes that had arisen regarding how the parties paid of operation of pumps pursuant to a prior water decree. The decision noted that if "conditions requiring it have arisen that can be established by proper evidence, the lower court has ample power to modify the decree so as to reflect equity and justice under all circumstances to all the water users." The Court again distinguished this language and determined that it only applied to water infrastructure and not to water rights and water use.

After distinguishing these two cases, the Court then reviewed the language of the Decree and determined that the Decree language did not specifically provide for the district court's continuing jurisdiction over the Decree, such that the court could re-open the Decree and modify the payment provision. Accordingly, the Court concluded that the district court had properly dismissed the ditch companies' motion to amend the Decree. The Court did note, however, that there may be other procedural paths that the ditch companies could pursue to invoke the district court's jurisdiction, such as initiating a separate legal action for contract reformation.

To read the full text of the opinion, click here.

Wednesday, October 19, 2016

Recording of Jordan Park Area Adjudication Meeting

If you were unable to attend the October 18, 2016 public meeting concerning the Proposed Determination in the Jordan Park Area, but would like to get more information about the proceedings, you can view a recording of the meeting by clicking here.

Friday, October 7, 2016

Washington Townhomes LLC v. Washington County Water Conservancy District

The Utah Supreme Court recently issued its decision in the case of Washington Townhomes LLC v. Washington County Water Conservancy District. The case started as a class action lawsuit by property owners and developers who paid impact fees to Washington County Water Conservancy District. These plaintiffs asserted that the impact fees violated the Utah Impact Fees Act and constituted a taking under the state and federal constitutions. The District defended its impact fees by asserting that the fees were based on a "level of service" standard imposed by the Utah Division of Drinking Water, and by asserting that its adoption of the level of service standard was a legislative judgment that should survive judicial scrutiny.

The district court agreed with the District, and concluded that the level of service that was adopted by the District and that was based on DDW standards was "legal and reasonable as a matter of law." Accordingly, the court granted partial summary judgment in favor of the District. Additionally, pursuant to a stipulation of the plaintiffs and the District, the court certified that the case could be immediately appealed under Rule 54(b) of the Utah Rules of Civil Procedure. The case was then appealed to the Utah Supreme Court.

The Supreme Court did not get to the substantive question of whether the impact fees were properly based on the DDW standards. Rather, the Supreme Court dismissed the appeal on jurisdictional grounds. The Supreme Court determined that although the district court's ruling made an important determination in the case context, the ruling did not qualify for appeal certification under Rule 54(b) because the ruling did not finally dispose of any claim and did not finally adjudicate the interests of a party to the case.

The Supreme Court further considered whether to exercise its discretion to treat the appeal as a petition for interlocutory appeal under Rule 5 of the Utah Rules of Appellate Procedure. The Supreme Court noted the precedent that an interlocutory appeal is appropriate "to adjudicate principles of law or procedure in advance as a necessary foundation upon which the trial may proceed." Although the Supreme Court noted that the level of service question was an important issue in the case, the Supreme Court declined to accept the appeal because it determined that the district court's ruling was unclear and had unanswered factual and legal questions. For example, the Supreme Court felt that there was an unanswered question as to whether the District was legally required to build infrastructure and facilities in accordance with the DDW level of service standards. Accordingly, the Supreme Court declined to accept the appeal, dismissed the appeal, and sent the case back to the district court for further proceedings.

To read the full text of the opinion, click here.

Monday, September 26, 2016

Public Meeting Concerning the Proposed Determination in the Jordan Park Area

The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the Jordan Park area in Salt Lake County East Division of the Utah Lake / Jordan River Drainage (Area 57, Book 5). The Jordan Park area is generally from 300 West on the east to the Jordan River on the west, and from 2700 South on the south to South Temple on the north (see map below). The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the Jordan Park area
When: October 18, 2016, 6:00 to 7:00 pm
Where: Department of Natural Resources, Room 1040, 1594 W. North Temple, Salt Lake City
Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 360057298), the State Engineer is authorized and ordered to conduct a general determination of the rights to the use of all water, both surface and underground, within the drainage area of the Jordan Park Subdivision, Salt Lake County East Division, of the Utah Lake and Jordan River drainage in Salt Lake County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the Jordan Park area to survey existing water rights and investigate water user's claims. Representatives from the Division of Water Rights will be available during this time to discuss the adjudication process, review water rights within the area, and answer questions. If individuals cannot attend, but have questions regarding the adjudication process or water rights within the Jordan Park area, please contact Blake Bingham at (801)538-7345.
Agenda:
1.  Introduction (Blake Bingham, P.E. - Adjudication Program Manager)
2.  Adjudication Process Presentation
3.  Public Comments and Questions

For more information on the meeting, click here.
Update: To view a recording of the meeting, click here.

Friday, July 29, 2016

HEAL Utah v. Kane County Water Conservancy District

The Utah Court of Appeals recently issued its decision in the case of HEAL Utah v. Kane County Water Conservancy District. The primary issue in the case was whether the State Engineer had properly approved change applications for water use at a proposed nuclear power plant.

In 2009, two change applications were filed by Kane County Water Conservancy District and San Juan County Water Conservancy Districts (collectively, "the Districts") to move significant amounts of water upstream for use at a proposed nuclear power plant near Green River in Emery County. The Districts and Blue Castle Holdings, Inc., the developer of the power plant, had entered into water lease agreements that were contingent upon approvals of the change applications to move the water. After the change applications were published, the Division of Water Rights received nearly 80 protests. The Division held a hearing on the change applications in January 2010. In 2012, the Division issued two separate orders approving the change applications. HEAL Utah, a nonprofit organization that advocates for clean air and clean energy, appealed Division's approvals to the district court. The district court held a trial in the case, and ruled that the change applications met the statutory criteria and were therefore properly approved. HEAL Utah then appealed the district court's decision to the Utah Court of Appeals.

The Court began its opinion with a discussion of the change application process, the Colorado River Compact, and the procedural background of the case. The Court also laid out the standards of review, including that a change application is to be approved if "there is reason to believe" that (1) there is unappropriated water in the source, (2) the proposed use will not impair other water rights or interfere with the more beneficial use of water, (3) the proposed plan is physically and economically feasible and would not be detrimental to the public welfare, and (4) the applicant has the financial ability to complete the project. The Court then analyzed each of these factors based on the facts presented in this case.

First, the Court determined that there was reason to believe that there was unappropriated water in the Green River, despite the fact that Utah's allocation of the Colorado River system is "oversubscribed." The Court noted that although there are approved Utah filings--including the Districts' filings--that exceed Utah's 1.4 million acre-feet of allocated water, Utah is currently only using about 1 million acre-feet. The Court also concluded that it was proper for the Division to rely on water released from Flaming Gorge Reservoir in determining the availability of water in the Green River.

Next, the Court determined that there was reason to believe that the proposed changes would not unreasonably affect public welfare or the natural stream environment. HEAL Utah asserted that approval of the change applications would undermine the fish recovery programs on the Green River and would negatively impact the agricultural economy that depends on the Green River. The Court, however, determined that HEAL Utah had "failed to meet its burden of persuasion" on these issues.

Finally, the Court determined that there was reason to believe that the proposed changes were feasible and not speculative. The Court noted that although the power plant project is anticipated to cost between $15 and $20 billion dollars, Blue Castle had shown a financial ability to complete the project, including the $17.5 million already raised and spent on the project thus far. The Court also noted that "considerable evidence" had been presented to the district court that supported a conclusion that the project was feasible based on its location and the economic considerations associated with producing power for a growing Utah population. The Court clarified that the project was not speculative because Blue Castle has proposed a site for the plant, invested money to develop the plant, offered a detailed description for the proposed use of the water, and entered into contracts to develop the project (as distinguished from the Western Water case from 2008, in which an application was found to be speculative because the applicant had no lands, facilities, customers, or contracts to support its plan).

Based on these determinations, the Court affirmed that the change applications had been properly approved.

To read the full text of the opinion, click here.

Brasher v. Christensen

The Utah Court of Appeals recently issued its decision in the case of Brasher v. Christensen. A central issue in the case was whether a Water Use Authorization constituted a contract for the lease of irrigation water shares.

Christensen owns a farm in Emery County and has shares of stock in Huntington-Cleveland Irrigation Company ("HCIC"). Brasher owns and leases farmland in Emery County, and also owns shares of stock in HCIC. But Brasher needed additional shares in order to irrigate all of his land. In 2012, Brasher leased 215 Class A shares from Christensen. Brasher asked to lease the water on an indefinite basis, but Christensen declined. Both parties signed a Water Use Authorization ("WUA") form provided by HCIC. On the WUA, Brasher checked the box that indicated that the lease would continue"until further notice." HCIC contacted Christensen regarding the WUA, and Christensen instructed HCIC that the lease was for 2012 only. In 2013, Brasher contacted Christensen about leasing shares again. Christensen originally declined, until Brasher indicated an interest in purchasing Christensen's farm. The parties met and negotiated two documents: an Offer to Purchase Real Estate and a new WUA. Christensen took the Offer with her so that she could review it. Brasher took the WUA and filed it with HCIC -- although the district court later determined that Brasher had added terms to the WUA after Christensen had signed it and without Christensen's knowledge. Ultimately, Christensen decided not to accept the Offer to purchase her farm. Christensen also notified HCIC to stop providing water under her shares to Brasher. Brasher sued for damages for crop loss and for losses associated with his cattle operation due to not having water.

After a trial was conducted, the district court dismissed Brasher's complaint. The district court concluded that the WUA was not an enforceable contract and that there was not a meeting of the minds between the parties to form a contract for lease of the water shares. Brasher appealed to the Court of Appeals.

The Court first reviewed whether the WUA was an enforceable contract for the lease of shares. The Court noted that the essential elements of an enforceable contract are (1) offer and acceptance, (2) consideration, and (3) competent parties. The Court determined that these elements were not met because the WUA form did not require offer, acceptance, or consideration. Rather, the WUA was simply a form used to instruct a third party (HCIC) to deliver water to one of a parties for a period of time. The WUA form was "devoid of language establishing a contractual relationship." Indeed, the Court noted that the WUA form expressly conditions its enforceability upon a separate agreement between the parties. Accordingly, the Court upheld the determination that the WUA was not a enforceable lease contract.

The Court then reviewed whether there was a meeting of the minds between Brasher and Christensen that would support an oral contract for lease of the water shares. The Court determined that there was no meeting of the minds because Christensen had told Brasher that she needed to discuss the Offer and WUA with her family and attorney before anything was final and because Christensen had intended that the Offer and WUA were contingent upon each other.

Based on these determinations, the Court of Appeals upheld the dismissal of Brasher's complaint against Christensen.

To read the full text of the opinion, click here.

Clearwater Farms LLC v. Giles

The Utah Court of Appeal recently issued a decision in the case of Clearwater Farms LLC v. Giles. The case involves a dispute between two neighboring landowners regarding alleged interference with an irrigation water system. (The case also involves a dispute between the landowners regarding an easement for a road, which is not discussed herein.)

In 1996, the Gileses purchased a piece of farmland next to the Spanish Fork River. About two years later, Morley purchased a piece of farmland north of and adjacent to the Gileses' property. A year later, the Gileses divided their property into two parcels and constructed a home on each parcel. A ditch crossed the Gileses' property and conveyed irrigation water to the Morley property. Due to increased difficulty conveying water through the ditch, the Gileses allowed Morley to construct an electric pump and pump house on the Gileses' property, which was attached to a 6-inch pipeline that was buried in the location of the old ditch. Morley used this water system until approximately 2003, when he installed a diesel pump and new pump house on his own property. The 6-inch pipeline on the Gileses' property was no longer used, but remained in place.

Clearwater purchased the Morley property in 2010 with the intent of building homes on the property. In 2011, Clearwater sought to remove the 6-inch pipe on the Gileses' property and replace it with a 42-inch pipe, but the Gileses opposed the larger pipe, including calling the sheriff and posting no trespassing signs on the old pump house. In 2012, the parties were able to reach an agreement to allow an easement across the Gileses' property for utilities and water pipelines. But Clearwater filed suit claiming damages for being unable to irrigate during the 2011 season. The district court concluded that Clearwater was not entitled to damages for lost crop revenue because the Gileses had not obstructed Clearwater's water rights. Clearwater appealed this decision to the Court of Appeals.

Clearwater asserted claims under two statutes: Utah Code sections 73-1-15 and 73-1-7. The Court first reviewed Clearwater's claims under section 73-1-15, which provides that "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." The Court concluded that the statute's language requires a physical barrier or obstruction to be placed in the ditch or water system that is in contact with the water and actually changes the water's flow. The court therefore determined that the Gileses actions of refusing to cooperate, calling the sheriff, and posting no trespassing signs did not amount to "obstructions" under the statute; rather, they were "more like the mere assertion of a contrary legal position." The court also noted that Clearwater had a relatively speedy way to resolve the issue through a motion for a temporary restraining order, which Clearwater failed to pursue.

The Court next reviewed Clearwater's claims under section 73-1-7, which provides a water user with a right to enlarge another person's existing ditch or canal to carry additional water. Clearwater asserted that this statute evidenced a public policy favoring the ability of a party to increase the size of a ditch or pipeline. The court noted that in 2011, the statute had been substantially amended, which included a clarification that the statute only applied to ditches and canals, but not pipelines. But the pre-2011 statute was at issue, and the Court therefore had to determine if the pre-2011 language of the statute extended to and included pipelines. The Court concluded that it did not, because the plain meaning of the term "ditch" does not encompass an enclosed pipe. The Court also again noted that the Gileses' actions did not impede Clearwater from exercising the rights that Clearwater asserted it had.

Based on these determinations, the Court affirmed the decision of the district court in favor of the Gileses.

To read the full text of the opinion, click here.

Tuesday, June 28, 2016

Special Master Appointed

In a prior blog post, it was noted that the Utah Division of Water Rights had requested that the Third District Court appoint a Special Master to assist in resolving objections in the Utah Lake/Jordan River general adjudication. The process of selecting a Special Master has been ongoing for several months. Today, Judge Laura Scott issued an order appointing a Special Master. Rick L. Knuth was selected to serve as the Special Master.

The Special Master's duties, as provided by the order, include:
1--Actively manage objections, including scheduling, notifying the parties, holding status and settlement conferences, and holding hearings.
2--Encourage the parties to settle matters in dispute.
3--Designate subcases within the general adjudication case.
4--Identify the parties affected by a proposed settlement, provide notice to the affected parties, and hear objections to a proposed settlement.
5--Take evidence, oversee discovery, rule on procedural motions, and rule on substantive motions with a report and recommendation to the court.
6--Prepare a final report and recommendation for each subcase containing findings of fact and conclusions of law.

For more information about the Special Master selection process, click here.

Wednesday, June 22, 2016

Public Meeting Concerning the Proposed Determination in the West Mill Creek Area

The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the West Mill Creek area in Salt Lake County East Division of the Utah Lake / Jordan River Drainage (Area 57, Book 5). The West Mill Creek area is from Main Street on the east to the Jordan River on the west, and from approximately 2700 South on the north to approximately 4100 South on the south. The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the West Mill Creek area
When: July 12, 2016, 6:00 to 7:00 pm
Where: Department of Natural Resources, Room 1050, 1594 W. North Temple, Salt Lake City
Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 360057298), the State Engineer is authorized and ordered to conduct a general determination of the rights to the use of all water, both surface and underground, within the drainage area of the West Mill Creek Subdivision, Salt Lake County East Division, of the Utah Lake and Jordan River drainage in Salt Lake County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the West Mill Creek area to survey existing water rights and investigate water user's claims. Representatives from the Division of Water Rights will be available during this time to discuss the adjudication process, review water rights within the area, and answer questions. If individuals cannot attend, but have questions regarding the adjudication process or water rights within the West Mill Creek area, please contact Blake Bingham at (801)538-7345.
Agenda:
1.  Introduction (Blake Bingham, P.E. - Adjudication Program Manager)
2.  Adjudication Process Presentation
3.  Public Comments & Questions

For more information on the meeting, click here.

Wednesday, June 15, 2016

Public Meeting Regarding Water Rights from Farm Creek

The Utah Division of Water Rights has scheduled a meeting to discuss the water rights from Farm Creek, near Hanna and Tabiona in Duchesne County. The meeting will be held from 8:30 am to 10:30 am on Thursday, June 30, 2016 at the Division of Water Rights' office in Vernal (318 North Vernal Avenue). All water users who have rights in Farm Creek are encouraged to attend.

For more information about the meeting, click here.

Monday, May 30, 2016

Dansie v. Public Service Commission

The Utah Court of Appeals recently issued its ruling in the case of Jesse H. Dansie Family Trust v. Public Service Commission and Hi-Country Estates Homeowners Association. This case originates from a well lease agreement between the Dansie Trust's predecessor (Jesse Dansie) and Hi-Country's predecessor (Gerald Bagley/Foothills Water Company), in which Mr. Dansie agreed to allow Bagley's water system to be connected to his well for a period of 10 years. In exchange, Mr. Dansie was given a number of free residential hook-ups to the water system and the right to receive up to 12 million gallons of water per year, in perpetuity, at no cost. In 1985, Foothills applied to the Utah Public Service Commission ("PSC") to operate the water system as a public utility. The following year, the PSC held a hearing regarding rates for the water system, in which the PSC reviewed the well lease and found that it was "grossly unreasonable" and that it would be "unjust and unreasonable" to expect the water systems' active customers to bear the burden of the well lease. The PSC required Mr. Dansie and his family to pay pro-rata costs for water delivered to them.

In 1993, Hi-Country took over control of the water system, developed a new well, and disconnected the water system from the Dansie well. Hi-Country also disconnected the water lines to the Dansies due to the Dansies' refusal to pay the pro-rata costs of water delivery, as ordered by the PSC.  Thereafter, the PSC decertified Hi-Country as a public utility because Hi-Country was providing water service only to its members.

Following lengthy litigation and several appellate court rulings, it was ultimately held that the well lease was an enforceable contract. In 2011, the Utah Court of Appeals ruled that the Dansies were entitled to their contractual rights to free hook-ups and free water "unless the PSC intervenes and determines otherwise."

Following the 2011 decision, the Hi-Country water system was again brought under PSC jurisdiction, and Hi-Country filed for a new general rate case. The Dansies filed a petition to intervene, which was granted. The PSC held a rate hearing and issued an order in which it concluded--in a manner similar to its ruling in 1986--that the well lease was "void and unenforceable as against the public interest." The Dansies appealed the ruling to the Court of Appeals.

The Court of Appeals reviewed the issue of whether the PSC exceeded its jurisdiction when it concluded that the well lease was void and unenforceable. The Court noted that the PSC has been granted broad and sweeping jurisdiction to supervise and regulate public utilities in the state in order to protect the public interest. The Court also noted that the PSC has statutory authority to determine if a public utility contract is unjust, unreasonable, discriminatory, preferential, or in violation of any law, and that the PSC is at liberty to disregard such contracts altogether in they conflict with a reasonable rate determined by the PSC. The Court therefore concluded that the PSC did not exceed its jurisdiction, and declined to change the PSC's decision that the well lease is "unreasonable, unjust, and not in the public interest." Accordingly, the Court upheld the order of the PSC.

The attorneys at Smith Hartvigsen are pleased to have represented Hi-Country in this case.

To read the full opinion, click here.

Monday, April 4, 2016

Water Rights Certification Course

The Rural Water Association of Utah, in conjunction with the Utah Division of Water Rights, offers a two-day water rights training course. The course covers a variety of water right topics, including priority, change applications, water rights vs. water shares, water right title, well regulations, and much more. At the end of the training course, there is a certification exam that you can take.

This course is very informative, and I highly recommend it to anyone wanting to learn about Utah water rights. I took the course when it was first offered in 2014 (in fact, I was the first person to complete the certification exam), and I learned a lot from attending.

The course is being offered on April 14-15, 2016. For more information about the course, click here.


Saturday, March 19, 2016

2016 Legislature: Bills That Passed


H.B. 222: Nonuse Application Amendments
House Bill 222 amends Utah's statute regarding nonuse applications. The bill inserts language into the statute to provide (1) that one or more successive overlapping change applications do not protect a water right that is already subject to forfeiture due to nonuse, and (2) that the approval of one or more nonuse applications does not constitute beneficial use of the water for purposes of calculating the 15-year period during which a forfeiture action must be brought. 
To view this bill, as enrolled, click here.

H.B. 305 (Second Substitute): Water Rights and Resources Amendments
The Legislature passed Rep. Joel Briscoe's (D-Salt Lake) House Bill 305, which is intended to improve the accuracy of water use data. The bill instructs the Drinking Water Board to require a certified water operator of a public water supplier, or professional engineer performing the duties of an operator, to verify the accuracy of water use and supply data submitted to the Division of Drinking Water. It also provides that the Division of Water Rights may collect and validate water use data. The bill further requires the Division of Water Rights to enact rules specifying the type of water use data that will be reported and how that data will be verified.
To view this bill, as enrolled, click here.

H.B. 464 (Third Substitute): Wildfire on Public Lands and Watersheds
The Utah Legislature passed House Bill 464 to require the Conservation Commission within the Department of Agriculture and Food to work with Utah State University and certain conservation districts to study the environmental and economic impacts of wildfire on public lands in Utah. Among other things, the study will analyze the impacts of wildfire on the state's watersheds and air quality. The Legislature also authorized a one-time, $200,000 appropriation from the General Fund to carry out the study.
To view this bill, click here.

H.C.R. 1: Concurrent Resolution on Waters of the United States
On March 1, Governor Herbert signed House Concurrent Resolution 1, a concurrent resolution expressing his and the Legislature's joint disapproval of the so-called "Waters of the United States" rule. The Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers finalized the rule last year to resolve uncertainty the U.S. Supreme Court created in its divided Rapanos v. United States decision regarding the extent of Clean Water Act (CWA) jurisdiction. The rule has drawn praise from conservation groups and the ire of farmers, industry, and at least 30 states, including Utah, which have filed challenges in courts across the country to stop the rule.
The resolution, which Rep. Mike Noel (R-Kanab) introduced, criticizes the rule as an "unlawful exercise of federal regulatory authority" that will improperly expand the CWA to include dry land and infringe on the ability of states to manage their water resources. It would also express support for Attorney General Sean Reyes's ongoing efforts to vacate the rule. The rule is currently on hold pursuant to a nationwide stay the Sixth Circuit Court of Appeals issued in October while it determines which courts have jurisdiction to hear the various court challenges.
To view this bill, as enrolled, click here.

H.J.R. 4 (First Substitute): Water Infrastructure
House Joint Resolution 4 urges Utah's congressional delegation to support the efforts of Utah water users to secure title transfer of reclamation projects and associated water rights from the federal government to local water user organizations. The project specifically mentioned in the joint resolution are the Strawberry Valley Project, Moon Lake Project, Emery County Project, Sanpete Project, and Provo River Project.
To view this bill, as enrolled, click here.

S.B. 23 (Second Substitute): Protected Purchaser Amendments
Senate Bill 23 modifies the definition of a "protected purchaser" in the Investment Securities chapter of the Utah Uniform Commercial Act. The bill adds additional requirements for a purchaser of a share of stock in a water company to qualify as a protected purchaser. The standard requirements of a protected purchaser are (1) give value, (2) not have notice of an adverse claim, and (3) obtain control of the certificate.  A purchaser of a share of stock in a water company will also need to show that he, or his predecessors in interest, (1) paid assessments on the share for at least four of the prior seven years, or (2) used water available under the share for at least four of the prior seven years.
To view this bill, as enrolled, click here.

S.B. 28: Water System Conservation Pricing
Senate Bill 28, sponsored by Sen. Scott Jenkins (R-Plain City) and recommended by the Natural Resources, Agriculture, and Environment Interim Committee, sailed through the legislature and was passed on February 10th.  It now awaits the Governor's signature.  It requires retail water providers to establish a tiered rate structure where the price per unit of water increases as the quantity of water delivered increases from tier to tier.  Many water retailers already use tiered pricing as a conservation incentive and to obtain assistance from state revolving loan funds.  Each retailer retains the flexibility of identifying the size and number of tiers or blocks of water and of setting the increasing rate applicable to each tier.  This bill mandates this pricing approach for all "retailer water providers," a term that is already defined by statute as entities which supply culinary water to more than 500 end user connections.  The bill also requires that the end users be given, at least annually, notice of: (1) the amount of water used, (2) the billing cycle or period; and (3) the tiered rates.
To view this bill, as enrolled, click here.

S.B. 75: Adjudication Amendments
Senate Bill 75 makes a number of changes to the general adjudication statutes found in Title 73, Chapter 4 of the Utah Code. As with other general adjudication amendments that have passed in the last few years, this bill seeks to take more responsibility from the Division of Water Rights and puts it on the water users to ensure that timely and proper water claims are filed.
A substantial change is with respect to the hydrographic survey maps. Previously, these surveys of water use were completed as an initial step by the Division of Water Rights, and were the primary source of information that the Division then used to complete Water User's Claims for the water users to review and sign. Under the bill, no survey will be done in the preliminary stages of the adjudication; rather, the hydrographic survey maps will be prepared late in the process-at the same time that the proposed determination is prepared-using the data from the submitted claims to prepare the maps.
Other significant provisions of the bill include:
  -Changing the term "Water User's Claims" to "Statements of Claim"
  -Allowing the Division to accept electronic Statements of Claim
  -Providing a mechanism for water users to ask the Division for an extension of time to file their Statements of Claim
  -Providing additional notice and a public meeting regarding unclaimed rights of record, which will occur after claim are due but before a proposed determination is published. Owners of the unclaimed rights of record may object to the list of unclaimed rights (i.e., assert that their rights should be included in the general adjudication), but the claimants will have to demonstrate that their failure to file a timely statement of claim was excused by circumstances beyond their control, mistake, or other justification.
To view this bill, as enrolled, click here.

S.B. 80 (Second Substitute): Infrastructure Funding Amendments
Senate Bill 80, sponsored by Senator Stuart Adams (R-Layton), moved well through the process and was substituted twice, and then held until the very last day because it includes a budget appropriation.  As substituted, the bill redirects over time a 1/16% sales tax rate from the Transportation Fund back to the water community and places it in the new Water Infrastructure Restricted Account that was created last year.  By 2021, all of these sales tax revenues will go to the new water fund.  This sales tax rate was originally destined for water project funding but got diverted to major transportation needs, most of which have now been met.  Now that the state has identified $33 billion in costs for essential water infrastructure need between now and 2060, there is a clear need for these sales tax funds back in the Water Infrastructure Account.
To view this bill, as enrolled, click here.

S.B. 251 (Third Substitute): Water Infrastructure Funding Amendments
Senate Bill 251, sponsored by Senator Stuart Adams (R-Layton), came out late in the session on March 1st, was substituted three times, and then one version passed the Senate and another the House.  On the last day, the two bodies agreed on a compromise version and passed that version.  The bill, among other things, requires new procedures to be established for funding state water projects on the Bear and Colorado Rivers and funds certain studies related to those projects.
To view this bill, as enrolled, click here.

S.C.R. 1: Concurrent Resolution Encouraging Universal Metering of Water Systems
Senate Concurrent Resolution 1, sponsored by Sen. Scott Jenkins (R-Plain City) and recommended by the Natural Resources, Agriculture, and Environment Interim Committee, encourages public water suppliers to implement metering of water on "all retail public and private water systems," including secondary water systems, because water users tend to voluntarily conserve more water when they know how much water they are actually using.  It flew through both houses and on to the Governor's desk, who signed the resolution on February 24, 2016.
To view this bill, as enrolled, click here.

2016 Legislature: Bills That Did Not Pass

H.B. 82: Property Taxing Authority for Public Water
The Utah Legislature failed to act on House Bill 82 during the 2016 Legislative session. The bill would have modified the maximum property tax rate that water districts served by the Colorado River Compact to the Upper Basin can charge. Currently, Section 17B-2a-1006 of the Utah Code allows Upper Basin water districts to increase the amount of property taxes they may impose on individuals and businesses up to a maximum of 0.004 per dollar of taxable value of taxable property. H.B. 82 would have continued the current maximum rate through fiscal year 2020, but would have lowered the rate to 0.002 beginning in fiscal year 2021. The fiscal note for the bill estimated that the legislation may have decreased the amount of property taxes Upper Basin districts can impose by about $33.6 million beginning in fiscal year 2021. The fiscal note also observed that districts could make up the decrease through user fees.
To view the bill, click here.

H.B. 257: Water Funding Revisions
House Bill 257, which sought to send some of the State sales tax to the Water Infrastructure Restricted Account, was similar to S.B. 80, which did pass.
To view the bill, click here.

H.B. 283: Public Utility Easement Amendments
The Legislature failed to act on House Bill 283 during the 2016 Session. The bill would have required public utilities to provide notice to affected property owners within 48 hours after the utility disturbs property subject to a public utility easement. The required notice would have described the name, address, and phone number of the utility company. Telephone corporations and electrical corporations with less than 30,000 customers would not have been subject to this requirement.
To view the bill, as substituted, click here.

H.B. 309: Sales and Use Tax Earmark Amendments
Rep. Daniel McCay (R-Riverton) sponsored House Bill 309 seeking to repeal the 1/16th % sales tax that has been dedicated to water funds within the Utah Department of Natural Resources.  This bill was assigned to the House Standing Tax and Revenue Committee, but was never considered by that committee or otherwise acted upon
To view the bill, click here.

H.B. 326: Special and Local District Transparency Amendments
Rep. Justin Fawson (R-North Ogden) sponsored House Bill 326 seeking to, among other things: (1) change the election process for district trustees; (2) place districts under the jurisdiction of cities and/or counties and grant them authority to audit districts; and (3) changing the process for dissolving districts.  This bill was assigned to the House Standing Political Subdivisions Committee, but was never considered by that committee or otherwise acted upon.
To view the bill, click here.

H.B. 432: Governmental Nonprofit Entity Compliance Amendments
Rep. Kim Coleman (R-West Jordan) sponsored House Bill 432 seeking to re-classify private nonprofit organizations that have governmental entities as shareholders or members that together have a "controlling interest" in the organization as "governmental nonprofit corporations."  All such re-classified organizations would then become subject to governmental regulatory laws such as the "Open and Public Meetings Act," the "Government Records Access and Management Act" (GRAMA), and other governmental reporting acts.  This bill was assigned to the House Standing Tax and Revenue Committee, which voted to substitute the bill, but it was never considered thereafter or otherwise acted upon.
To view the bill, as substituted, click here.

H.B. 457: Water Quality Revisions
The Legislature failed to pass House Bill 457 to revise the Utah Water Quality Act to provide that inadvertent releases of water from publicly owned culinary water systems do not constitute a "discharge of a pollutant," which the Act prohibits absent compliance with specific requirements. The bill did provide, however, that inadvertent discharges from a publicly owned culinary water system will qualify as a "discharge of a pollutant" if they are caused by misconduct, a primary cause of pollution, and released in violation of numeric water quality standards.
To view this bill, click here.

H.B. 218: Utah Revised Nonprofit Corporation Act
S.B. 116: Water Law - Nonprofit Corporation Amendments
House Bill 218 and Senate Bill 116 were identical bills that sought to amend two provisions of the Utah Revised Nonprofit Corporation Act. First, the bills sought to exempt shares of stock in water companies from the general rule in the Act that memberships in nonprofit corporations may not be transferred. This proposed change was primarily in response to the Utah Supreme Court's decision in the Southam v. South Despain Ditch Co. case from 2014. Second, the bills sought to clarify that shareholders in water companies have an undivided interest in the property and water rights of the company and that they are entitled to the use of water and right to change the use of water under the Utah water code.
To view HB 218, click here.
To view SB 116, click here.