Thursday, December 27, 2012

Beryl-Enterprise Groundwater Management Plan

On December 21, 2012, the Utah Division of Water Rights adopted the Beryl-Enterprise Groundwater Management Plan.  The objectives of the Plan are to "limit the groundwater withdrawals to safe yield, protect the physical integrity of the aquifer, and protect water quality."  The Beryl-Enterprise area has been an area where groundwater has been pumped faster than it can be recharged (also known as groundwater mining).  The Division has determined that although the safe yield for groundwater in the area is approximately 34,000 acre-feet per year, current groundwater depletion in the area is approximately 65,000 acre-feet per year. 

To address this issue, the Plan provides that total water depletion in the area will be reduced over time until the depletion matches the safe yield.  In other words, over time, water rights will be eliminated, with the "newest" water rights being eliminated first.  Over the first 40 years, the depletion will be reduced by 10%.  For each ten-year period thereafter, the depletion will be reduced by an additional 5%.  It is expected that by the year 2130, enough water rights will have been eliminated that the groundwater will stabilize. 

The Plan leaves open the opportunity for water users in the area to participate in a voluntary arrangement to manage withdrawals other than by priority date.

To read the entire Plan, click here.

For more information about the Plan, click here.

For a list of the Beryl-Enterprise water rights listed by priority, click here.

Monday, December 17, 2012

Hardy v. Eagle Mountain City

Last week, the Utah Court of Appeals issued its opinion in Hardy v. Eagle Mountain City.  The opinion addresses issues of appurtenance of water rights and trust deeds.

The plaintiffs in the case were lenders who loaned money to a development company.  The loan was secured by a trust deed and promissory note.  The trust deed secured two parcels of land and "all water rights . . . and appurtenances thereunto belonging."  The development company later conveyed a 160 acre-foot water right to a sister company, who in turn conveyed the water right to Eagle Mountain City and received "banked water entitlements" in exchange.  When the development company defaulted on its loan, the lenders attempted to foreclose on the 160 acre-foot water right, asserting that the water right was encumbered by the trust deed.  This lawsuit followed.

The district court ruled in favor of the lenders, and issued a decree of foreclosure under which the lenders were allowed to foreclose on the remaining banked water entitlements.  Eagle Mountain City appealed the decision to the Utah Court of Appeals.

One of the primary arguments put forward by the City was that the trust deed was ambiguous, and that the trial court therefore should have considered extrinsic evidence regarding the parties' intent.  The Court of Appeals began its analysis by noting that a trust deed is a conveyance document for purposes of the relevant code section: Section 73-1-11.  The Court then determined that none of the exceptions listed under 73-1-11(1) applied in this case.  The City had argued that because the promissory note had specifically mentioned other water rights that were put up as collateral, that the exception for "convey[ing] a part of the water right" should apply.  The Court rejected this argument on two bases.  First, the Court held that the trust deed--and not the promissory note--was the relevant conveyance document, and the trust deed had conveyed all appurtenant water rights.  Second, the Court held that even if the promissory note could be considered a conveyance document, the exception still would not apply because the promissory note listed other, separate water rights, and not a portion of the 160 acre-foot water right.  The Court also determined that the language in the deed covering "all water rights . . . and appurtenances thereunto belonging" was unambiguous.  Accordingly, the Court rejected the City's argument of ambiguity, and interpreted the trust deed based on its unambiguous language.  The Court of Appeals also upheld the district court's determination that the water right was appurtenant to one of the parcels of land listed in the trust deed.

The Court of Appeals also upheld the district court's alternative determination that the conveyance from the development company to its sister company was a fraudulent transfer, as no value was given by the sister company.  Furthermore, the Court of Appeals upheld the district court's determination that the City did not qualify as a good-faith transferee for value. 

In the end, the Court of Appeals affirmed the district court's decision in its entirety and upheld the lenders' ability to foreclose on the banked water entitlements.

To read the full opinion, click here.

Thursday, November 15, 2012

Historic Property Effect Evaluations

Last year, the Utah Division of Water Rights began requiring a Historic Property Effect Evaluation (“HPEE”) to be submitted with water right applications, including applications to appropriate, change applications, and exchange applications.

Recently, the state historic preservation officer and the Division of Water Rights have made a policy change, and a HPEE is no longer required on water right applications.

Monday, October 1, 2012

Stern v. Metropolitan Water District of Salt Lake & Sandy

A few months ago, the Utah Supreme Court issued its ruling in Stern v. Metropolitan Water District of Salt Lake & Sandy.  This case relates to the Point of the Mountain Aqueduct ("Aqueduct") that was constructed by Metropolitan Water District of Salt Lake & Sandy ("Metropolitan Water"), specifically to the portion of the Aqueduct that was constructed in the old easement for the Draper Canal.

The Draper Canal ("Canal") was constructed in the early 1900s by Utah Lake Irrigation Company ("ULIC"). Rights to construct the Canal across private property were obtained from property owners by voluntary transfer (i.e., deed) or by condemnation judgments. Some of the deeds and judgments referenced that the easement would be used for "canal purposes only." Shortly after its construction, the Canal was conveyed to Draper Irrigation Company. For decades, Draper Irrigation used the Canal to convey irrigation water to its shareholders.  Over the years, the canal was also used by Salt Lake County and then Draper City for storm water purposes. In the 1990s, Draper Irrigation Company piped much of its water distribution system and ceased using the portion of the Canal at issue in this case. In 2001, Draper Irrigation Company conveyed the Canal to Draper City so that it could be used for storm water purposes as well as a public trail. Soon afterward, Metropolitan Water negotiated with Draper City to construct the Aqueduct in the Canal easement. The Aqueduct was buried, but some cement structures rose above ground. The Aqueduct transports culinary water to Salt Lake City and others in the Salt Lake Valley.

Four landowners whose property borders the Aqueduct brought suit, alleging that the construction of the Aqueduct exceeded the scope of the Canal easement. The landowners also alleged that the Canal easement had been abandoned. The district court ruled in favor of Metropolitan Water, and the landowners appealed to the Utah Supreme Court.

The Court first examined the portion of the Canal that had been acquired by a stipulated judgment of condemnation. The landowners asserted that the only property interest that ULIC could have obtained through condemnation was an easement interest, and not fee simple ownership. The Court concluded, however, that because it was a stipulated judgment of condemnation, and not a contested judgment, there was no reason why ULIC could not have obtained fee simple ownership of the property. Thus, the Court concluded that Draper City owned the land, and could allow the Aqueduct to be constructed on it.

The Court then examined another portion of the Canal that had been acquired by deed. The landowners asserted that these deeds from their predecessors-in-interest to ULIC conveyed only an easement right and not fee simple ownership. The Court disagreed, and held that the deeds did pass fee simple ownership because the deeds used the phrase "conveys and warrants," which demonstrates intent to pass ownership and not just grant an easement. The Court did hold, however, that the language in the deed limiting use to "canal purposes only" was a covenant that ran with the land.

The Court then had to determine the scope of the "canal purposes only" limitation and determine whether it prohibited an enclosed and buried pipeline to convey culinary water. The Court first determined that "canal purposes" could include conveyance of culinary water. This determination was based largely on the fact that in the early 1900s, canals were used to convey water used for domestic and culinary purposes.  The Court then determined that an open canal could be enclosed. This determination was based largely on prior Utah cases that allow ditch and canal owners to improve their methods of conveyance, provided that the improvements are reasonable and do not materially alter the burden on the land.  Finally, the Court determined that district court had failed to apply the standard regarding reasonableness and material alteration of the burden.  Accordingly, the Court remanded the case to the district court for additional proceedings on the issues of whether Metropolitan Water's improvements related to the Aqueduct were performed reasonably and whether the improvements materially altered the burden on the land.

In a final note, the Court upheld the district court's conclusion that Draper Irrigation had not abandoned the Canal easement. The Court specifically noted that even when Draper Irrigation had ceased using the Canal to convey irrigation water, the Canal was still being used to convey storm water.

To read the full opinion, click here.

Saturday, September 29, 2012

How Do I Protest a Water Rights Application?

The Utah Division of Water Rights' administrative process for change applications, applications to appropriate, exchange applications, and other water right applications includes advertising of the application and a protest period.  During the twenty-day protest period, an interested party can file a protest with the Division in opposition to the application. Although some regional offices keep protest forms at their office, there are no protest forms on the Division's website, and a protest form is not required.  The protest can be submitted in the form of a letter.  There are, however, a few rules to remember when preparing and filing a protest:
  • Clearly identify the water right number, application number, and name of the water right owner/applicant.
  • Cite specific reasons for the protest. You may want to review, and possibly cite to, the Utah Water and Irrigation Code for relevant law and requirements regarding the application at issue (for example, Utah Code sections 73-3-3 and 73-3-8 provide requirements for approval of a change application)
  • State whether or not you request a hearing on the application.
  • Include your name and mailing address so that the Division can send you notice of any hearings, notice of the Division's decision, and other notifications regarding the application.
  • Include a $15 protest fee. Keep in mind that the fee is per application, not per protest. Accordingly, if you are filing one protest regarding three different applications, the fee would be $45.
  • The protest must be filed (and not just postmarked) by the last day of the protest period.
Update (10/23/2017): The Division now allows for protests to be submitted online. More information here.

Thursday, August 2, 2012

Magna Water Company v. Strawberry Water Users Association

The Utah Court of Appeals recently issued its opinion in the case of Magna Water Company v. Strawberry Water Users Association.  This case relates to rights use return flow of imported water from the Strawberry Valley Project.

The Strawberry Valley Project is a federal project that imports water from the Colorado River drainage into the Utah Lake basin.  When the water is used for irrigation and other purposes, a portion of the water returns to the natural hydrological system, generally through seepage into the groundwater aquifer or as surface runoff to streams and lakes. Both the federal government and the Strawberry Water Users Association ("SWUA") claim the right to recapture and reuse this return flow after it commingles with the natural hydrological system.

SWUA petitioned the district court for an interlocutory decree regarding use of the return flow in the general adjudication of the Utah Lake and Jordan River drainage. The State Engineer issued a proposed determination supporting the recapture and reuse of the Strawberry Valley Project water.  Magna Water Company and others ("the Objectors") filed an objection to the proposed determination, asserting that the State Engineer's recommendations in the proposed determination departed from Utah law and that Objectors' water rights and interests would be adversely affected. The district court ruled that the Objectors lacked standing, and therefore could not participate in the court proceedings.  Accordingly, the court dismissed the Objectors' claims.  The Objectors then appealed to the Utah Court of Appeals.

The Court of Appeals first examined whether the Objectors had "traditional standing."  The Court held that the Objectors did not meet the first prong of the traditional standing test, which is the showing of a distinct and palpable injury.  The Objectors had argued that the recapture and reuse of return flow would result in reduced diversions from the Objectors' wells.  The Court, however, concluded that the Objectors' wells were upgradient from and not affected by Utah Lake and the Jordan River. Thus, the Court upheld the district court's determination that the Objectors had failed to show injury, and were therefore not entitled to traditional standing.

The Court of Appeals next examined whether the Objectors had "alternative standing."  The test for alternative standing is that the party must show that it is an appropriate person to raise issues of significant public importance.  The Court determined that the Objectors were appropriate persons because they had the interest necessary to effectively assist the court in developing and reviewing relevant factual and legal issues.  The Court also determined that the recapture and reuse recommendations contained in the proposed determination were of significant public importance because many water users will be affected by the proposed determination and because the recapture and reuse issues are uncharted areas of law in Utah. Thus, the Court held the Objectors had alternative standing.

In the end, the Court of Appeals held that the district court had erred in dismissing the Objectors' claims, and the case was sent back to the district court for further proceedings, with the Objectors' participation.

To read the full opinion, click here.

Monday, July 2, 2012

Meguerditchian v. Smith

The Utah Court of Appeals recently issued an opinion in the case of Meguerditchian v. Smith, which addressed an issue related to Utah water rights.

In the case, Mr. Meguerditchian had obtained a court judgment of approximately $55,000 against Mr. Smith in a breach of contract case.  Mr. Meguerditchian filed for and received a writ of execution, under which the sheriff was instructed to sell Mr. Smith's personal and real property to satisfy the judgment. The notice for the sheriff's sale indicated that the property to be sold would include Mr. Smith's interest in Water Right #51-224 and "other rights of [Mr. Smith] in water rights and/or interests in water wells located in Sanpete County, Utah."  At the sale, Mr .Meguerditchian purchased Water Right #51-224 for $30,000 and the other unspecified water rights for $3,000.  Mr. Smith then asked the district court to set aside the sale.

The district court concluded that the water rights were worth at least $150,000, and that the sales price had therefore been grossly inadequate. The district court also concluded that the description of the water rights in the notice of sale had been insufficient.  The court ruled that the insufficient descriptions may have caused confusion and discouraged bidders.  Based on these determinations, the district court set aside the sheriff's sale of the water rights.  Mr. Meguerditchian appealed the decision to the Utah Court of Appeals.

The Court of Appeals noted that the Utah Rules of Civil Procedure require that notice of a sheriff's sale include "a particular description of the property to be sold."  The Court concluded that the notice of sale's description of Water Right #51-224 was sufficient to allow for the sale of the 3.275 acre-feet of water that Mr. Smith owned under Water Right #51-224.  Accordingly, the Court reversed the district court's decision on this point, and held that the sale was proper.  It appears, however, that the Court of Appeals upheld the district court's determination with respect to the other unspecified water rights, which appear to be Mr. Smith's segregations from Water Right #51-224.

To read the full opinion, click here.

Wednesday, June 13, 2012

Utah Stream Access Coalition v. State of Utah


The Fourth District Court of Utah (Judge Derek Pullan) recently issued a ruling on the motions for summary judgment filed in the Utah Stream Access Coalition v. State of Utah case regarding stream access on the Provo River. 
The court begin its ruling by holding that to the extent that Utah Code section 73-29-103 purports to interpret the Constitution and determine the constitutionality of HB 141, it violates Article V of the Utah Constitution.  The court noted that Article V, Section1 prohibits the legislature from exercising the powers of the judicial branch, and that it is the judiciary’s responsibility to determine what the Constitution means and whether a statute violates the Constitution.  The court noted, however, that “[a]t best, the statute constitutes an expression of legislative intent and nothing more.”
The court next held that Article XVII, Section 1 of the Utah Constitution recognizes and confirms public ownership of water in the state, as well as the public easement derived from that ownership.  The defendants had argued that the public easement recognized in the JJNP and Conatser cases is a creature of statute, but the court held otherwise.  The court cited prior case law and Utah history to support its conclusion that “public ownership of natural waters has always been, independent of any statutory grant.”  The court concluded that this also encompassed corollary rights, including the public’s recreational easement recognized in JJNP and Conatser.
Next, the court held that the Utah legislature has the authority to regulate use of waters owned by the public and the recreational easement derived therefrom.  The court noted that public ownership of the water and recreational easement does not eliminate the legislature’s authority to regulate; rather, the public ownership is the basis for the regulatory authority. 
The court then had to determine whether HB 141 did more than regulate use.  USAC contended that HB 141 essentially transferred a public asset to private ownership without compensation.  The court, however, did not agree with this contention.  The court concluded that HB 141 regulates the extent to which the public may use the public easement, but did not transfer or destroy the easement.
The court next had to determine whether the legislature’s regulatory authority is limited by Article XX of the Utah Constitution.  Article XX, Section 1 of the Utah Constitution provides that public lands are held by the State in trust for the benefit of its citizens, and may be disposed of for a public purpose or as provided by law.  The court concluded that the recreational easement constitutes an interest in land, and is therefore covered by Article XX.  However, because HB 141 did not dispose of the easement, it did not implicate the trust responsibilities imposed by Article XX.
Finally, the court reached the question of whether the public trust doctrine applies.  The court first looked at the federal public trust doctrine.  The court concluded that because HB 141 did not give the public easement to a private party, the federal public trust doctrine does not apply.  The court then noted that Utah case law recognizes a state public trust doctrine, under which the State regulates the use of water as trustee for the benefit of the people, and that this public trust doctrine applies to both navigable and non-navigable waters.  The court noted, however, that the nature and scope of the state public trust doctrine has not been well-defined in case law, and that the parties in this case had not had sufficient opportunity to brief the issue of the state public trust doctrine.  The court noted that “considerable deference” should be given to legislative decisions relating to the use of state waters, but that regulations that are illegal, arbitrary, capricious, or in clear violation of trust purposes are subject to judicial review.  The court asked the parties to submit additional briefing on the state public trust doctrine, after which the court will make a decision on this issue, which appears to be the sole remaining issue in the case.

Thursday, May 3, 2012

Where Can I Get Copies of Proposed Determinations?

As discussed in a prior article, an important part of a General Adjudication is the publication of the Proposed Determination.  Unless an objection is submitted, the Proposed Determination is the governing document until a final Decree is issued. 

Copies of Proposed Determinations are available on the Utah Division of Water Rights' website.  Click here to access the list of Proposed Determinations available online, which are listed in order of water right areas.

Tuesday, March 13, 2012

2011 Utah Groundwater Report

Each year, the United States Geological Survey (USGS) publishes a report on groundwater conditions in Utah. The report is prepared and published in cooperation with the Utah Division of Water Resources, the Utah Division of Water Rights, and the Utah Division of Water Quality. The report is a valuable resource containing information on well construction, groundwater withdrawal, groundwater level changes, groundwater quality, and much more.

The 2011 report is available online and can be accessed by clicking here.