Monday, January 25, 2016

Utah Alunite Corp. v. Jones

Last week, the Utah Court of Appeals issued a decision in the case of Utah Alunite Corp. v. Jones. The case answers a question regarding what parties may appeal a decision of the Utah Division of Water Rights ("Division") on a water right application.

In 2006, the Iron County Water Conservancy District ("District") filed an application to appropriate water in the Wah Wah Valley. Approximately 300 people filed protests on the application. The Utah School and Institutional Trust Lands Administration ("SITLA") did not file a protest, despite being a major landowner in the valley. The Division did not make a decision on the District's application, choosing instead to delay a decision so that hydrologic data could be gathered.

In 2012, SITLA and its lessee, Utah Alunite Corporation ("UAC"), filed an application to appropriate water in the valley. The District protested SITLA's application, asserting that the District's pending application to appropriate was prior to, and therefore superior to, SITLA's application.

In 2014, the Division issued decisions granting both applications. However, the Division determined that SITLA's application was subject to the District's senior right. SITLA and UAC sought judicial review of both decisions before the district court. The district court concluded that SITLA and UAC could not challenge the Division's decision approving the District's application because SITLA and UAC had not protested the District's application or sought to intervene in the Division's proceeding on the District's application. SITLA and UAC appealed to the Utah Court of Appeals.

The Utah Court of Appeals decision focused on whether SITLA and UAC had standing to appeal the Division's decision approving the District's application. The Court noted that the Utah Water Code provides that a "person aggrieved by an order of the state engineer may obtain judicial review." Under this standard alone, SITLA and UAC would have standing to appeal, because they were adversely affected by the Division's approval of the District's application. However, the Court also noted that the Utah Water Code required that an aggrieved person may seek judicial review only in accordance with the Utah Administrative Procedures Act ("UAPA"). UAPA provides that a "party aggrieved may obtain judicial review." The Court determined that there was a meaningful distinction between an "aggrieved person" and an "aggrieve party," and that a person must meet both requirements in order to appeal a Division order. In other words, the person seeking appeal must both (1) be a person with an actual or potential injury resulting from the order, and (2) have been a party (applicant, protestant, or intervenor) to the Division's proceeding. The Court concluded that although SITLA and UAC were aggrieved persons, they were not aggrieved parties, and therefore they lacked standing to pursue the appeal. Thus, the Court affirmed that SITLA and UAC lacked standing to pursue the appeal, and the dismissal of the case was upheld.

To read the entire opinion of the Utah Court of Appeals, click here.

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