Saturday, January 12, 2019

Salt Lake City Corp. v. Haik

The Utah Court of Appeal recently issued its decision in the case of Salt Lake City Corporation v. Haik. This case is a continuation of a long-standing water dispute between Salt Lake City and Mark Haik. (To read about prior cases in this dispute, click here, here, and here.)

Mark Haik and Pearl Raty are two of six owners of a portion of a water right from Little Cottonwood Creek that was decreed in the 1910 Morse Decree. In 1934, the then-owners of the water right entered into an agreement with Salt Lake City under which the City was granted use of most of the water right during the non-irrigation season. In 1950, a portion of the water right (represented by Water Right No. 57-7800) was moved from the Creek to a well through a change application that was certificated. In 2000, the then-owner of WR 57-7800 filed a change application to return the water back to the Creek. After this change application was approved, WR 57-7800 was conveyed to the six owners, who each filed a change application to move the water to be used for cabins at Albion Basin in Little Cottonwood Canyon. Two of the change applications were approved, but Haik's and Raty's change applications remained unapproved.

This lawsuit was initiated by the City as a judicial review of the two approved change applications, but the City also brought claims challenging the nature and validity of Haik's and Raty's water rights. Haty brought counterclaims against the City, asserting that the City was obligated to serve water to her property in Little Cottonwood Canyon. During the proceedings, the City acquired the rights associated with the two approved change applications, thereby leaving only the claims and counterclaims involving Haik and Raty. Ultimately, the district court concluded that Haik's and Raty's water rights had been forfeited due to nonuse and that the City did not have obligations to serve water to Ray's parcel. Accordingly, the district court issued a judgment in favor of the City. Haik and Raty appealed to the Utah Court of Appeals and argued that the district court had made several errors.

First, Haik and Raty asserted that the City lacked standing to bring its claims. The Court disagreed and determined that the City met the "traditional test" for standing because both parties had rights to draw water from the same source (Little Cottonwood Creek), and therefore was impacted by Haik and Raty's rights to divert and use water from the Creek.

Second, Haik and Raty asserted that the district court lacked subject matter jurisdiction because the City had not exhausted its administrative remedies. Haik and Raty argued that the City could not bring an action against them until the Division of Water Rights issued decision on their pending change applications. The Court noted that the City was not appealing a decision of the Division relative to the change applications; rather, the City was bringing a claim asserting forfeiture of the underlying water right -- which is a determination that can only be made by a court, and not by the Division. Thus, the Court determined that the district court had subject matter jurisdiction over the case.

Third, Haik and Raty argued that the district court had incorrectly determined that their water rights had been forfeited due to nonuse of more than seven years. Haik and Raty had presented evidence that their water had been diverted and used by successors to the original water right, but the Court held that this evidence was insufficient and did not meet the statutory requirements for beneficial use because Haik and Raty did not have agreements in place for other people to use the water. The City, on the other hand, had presented clear evidence that Haik and Ray had not made any beneficial use of the water since 2003. The Court also determined that the district court had applied the correct legal analysis for total forfeiture and that the City's forfeiture claims were not barred by the applicable statute of limitations. Thus, the Court affirmed the total forfeiture of Haik's and Raty's water rights.

Fourth, Raty asserted that the district court had incorrectly determined that the City did not have an obligation to serve water to Raty's parcel in Little Cottonwood Canyon. Raty asserted that the City had obligations to serve water to her property based on Article XI, Section 6 of the Utah Constitution, which provides that municipalities must preserve, maintain, and operate its water resources to serve its inhabitants. But the Court determined that Raty was not an inhabitant of the City because here property is located outside of the City's municipal boundaries. Raty also asserted that the City had denied her due process. But the Court determined that Raty did not have a protectable property interest, but rather had nothing more than a unilateral expectation of water service. Raty also asserted an equal protection claim under Article I, Section 24 of the Utah Constitution. The Court, however, determined that the City's decision to not serve her property was a proper exercise of its permissive right to serve water to people outside of its boundaries. Finally, Raty asserted that the City should be regulated by the Utah Public Service Commission. The Court disagreed, and noted that the Utah Constitution prohibits the Commission from regulating municipalities.

Based on these determinations, the Utah Court of Appeals affirmed the district court's decision on all points. The result is that Haik's and Raty's water rights are forfeited in their entirety, and the City is not obligated to provide water service to Raty's parcel in the Albion Basin.

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

Tuesday, January 8, 2019

New Policy Regarding Domestic Duty Considerations

On December 28, 2018, the State Engineer issued a new policy regarding the amount of water required for domestic (culinary) use. Historically, the Division of Water Rights has used a "duty" of 0.45 acre-feet per residence per year, which is based on an estimated 400 gallons per day. Recent studies have shown that due to conservation efforts, water efficient appliances, and other considerations, Utah households only use about 70 gallons per person per day. Thus, a home with four people will only use about 280 gallons per day, or 0.314 acre-feet per year.

The State Engineer notes that 0.45 acre-feet per residential connection is still a safe number to use, and it is the number that the Division will continue to use for domestic use if there is no evidence to suggest otherwise. However, the Division "will consider reduced amounts of water required per connection in applications filed if the projected usage rate numbers are based on scientific evaluations and the water used is measured and reported to the Division of Water Rights through the Water Use Program." The policy does not provide additional explanation regarding what evidence and "scientific evaluations" will be sufficient to convince the Division to depart from the standard requirement of 0.45 acre-feet per residential connection.

The policy also notes that part-time residences (such as cabins) may only require 0.16 acre-feet per year or less, which is a decrease from the current requirement of 0.25 acre-feet per year. The same considerations outlined above would apply in getting the Division to approve part-time residences with a diversion limit of less than 0.25 acre-feet per connection.

To read the full policy, click here.

New Policy Regarding Muncipal Use Water Rights

On December 28, 2018, the State Engineer issued a new policy for extending the list of those allowed to hold municipal water rights. This new policy is an expansion of the State Engineer's policy on municipal use water rights issued in December 2010.

Prior to 2010, only public entities, such as cities, towns, and districts, could hold municipal water rights. The 2010 policy extended municipal use rights to "public water suppliers," as defined in Utah Code section 73-1-4. Public water suppliers are generally larger water providers that serve more than 100 connections or 200 residents on a year-round basis. The new policy extends municipal use rights to "public water systems," which are smaller water providers that serve at least 15 connections or 25 individuals for a minimum of 60 days each year.

If public water systems wish to have municipal use water rights, they will need to file change applications on their water rights to convert them to municipal use. Additionally, all municipal water use will have to be metered and reported to the Division's Water Use Program.

It is important to note that even though the smaller "public water systems" will be allowed to hold municipal use water rights, they are still not qualified as "public water suppliers" and will therefore not be entitled to the special protections provided to public water suppliers under Utah Code sections 73-1-4 and 73-3-12.

To read the full policy, click here.

New Policy Regarding Depletion Limitations on Certificates

On December 28, 2018, the State Engineer issued a new policy regarding depletion limitations on certificates. The policy reiterates that when a new certificate is issued for a newly appropriated water right or for a change application, the certificate sets limitations for diversion and depletion amounts. Once the depletion limits are set through a certificate, the depletion limits cannot revert to their prior (and higher) amounts.

Consider the following example. A landowner has an irrigation water right that allows him to divert 1 acre-foot to irrigate 0.25 acres. This water right has a depletion limit of 0.5 acre-feet, based on a 50% depletion rate for irrigation in the area. The landowner files a change application to allow the water to be used for the domestic use of 1 home (0.45 acre-feet of diversion) and irrigation of 0.1375 acres (0.55 acre-feet of diversion). The diversion limit would remain 1 acre-foot, but the depletion limit would be reduced from 0.5 acre-feet to 0.365 acre-feet ((0.45 acre-feet of domestic use x 20% depletion rate) + (0.55 acre-feet of irrigation use x 50% depletion rate)). The change application is then approved and certificated. Later, the home burns down, and the landowner files a new change application to revert the water right back to irrigation. The new, lower depletion rate will limit the amount of irrigation. In other words, the landowner will no longer be able to divert 1 acre-foot to irrigate 0.25 acres, but will only be able to irrigate 0.1825 acres with a diversion limit of 0.73 acre-feet and a depletion limit of 0.365 acre-feet.

To read the full policy, click here.

Monday, January 7, 2019

New Policy Regarding Corrected Certificates

On December 28, 2018, the State Engineer issued a new policy about issuing corrected certificates. Certificates are issued by the Division of Water Right to complete the process of appropriating a new water right or changing the use of a water right through a Change Application. In the past, the Division has treated the certificates as "set in stone." As a result, when there was a clear error in the proof or certificate process, it has proven challenging to get the Division to correct the errors. This new policy is meant to address such circumstances.

The State Engineer emphasizes that the goal and primary effort is, and will continue to be, to issue certificates carefully and accurately. However, the State Engineer acknowledges, and provides examples of, situations where errors have occurred in the certificate process. The State Engineer notes that the Division is not obligated under statute to reissue certificates based on errors and omissions, but that "it seems the appropriate thing to do to reflect the actual beneficial use of water." Although this policy appears to give considerable latitude to Division staff to correct erroneous certificates, the State Engineer does provide some guidelines:
  • Before a certificate is corrected, the Division may require the applicant to prepare and submit a revised proof.
  • A corrected certificate should only be issued to reflect the actual beneficial uses, places of use, and points of diversion that existed at the time of proof, provided that these uses were consistent with the approved application that was being certificated.
  • Corrections should only occur on a showing of clear error.
  • Because certificates are prima facie evidence of a right, corrected certificates are not preferred and may lead to problems.
To read the full policy, click here.

New Policy on Beaver Dam Analogue Construction

The State Engineer has issued a new policy regarding the construction of beaver dam analogues (BDAs), which are small, man-made impoundments of water on natural streams. Proponents assert that BDAs enhance stream channels and streamflows, diminish erosion, increase the health of riparian zones, prevent fire damage during wildfires, and help restore damaged streams in wildfire burn areas. Opponents assert that BDAs impound water belonging to downstream water users, increase evaporation and evapotranspiration of the water, and diminish the water flowing downstream to satisfy water right holders.

Based on these considerations and concerns, the State Engineer issued a policy of December 28, 2018, with respect to BDA construction. The following are some of the key points in the new policy:
  • Any BDA construction will require that a Stream Alteration Permit is filed and approved by the Division of Water Rights.
  • During the Permit review process, the regional engineer will make a determination if any water rights will be impacted by the BDA.
  • If water rights will be impacted, the applicant will have to compensate downstream uses for the impairment. It is contemplated that this will be accomplished by the applicant acquiring a water right and filing a Temporary Change Application on the water right to cover the anticipated impacts. It is assumed that the impacts of the BDA to the water system will stabilize during the one year that the Temporary Change Application is in place.
  • If no water rights will be impacted, the only approval required from the Division of Water Rights is the Stream Alteration Permit.
  • In emergency situations (e.g., in areas affected by wildfires where it is critical to stabilize streams and help diminish debris flows), no water right will be required. The only approval required from the Division of Water Rights will be the Stream Alteration Permit.
To read the full policy, click here.

Thursday, December 27, 2018

Public Meeting Concerning the General Adjudication in Lehi Area

The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the Lehi area in the Provo River Division of the Utah Lake/Jordan River Drainage (Area 55, Book 4). The Lehi area generally includes the area between 300 North (Lehi) on the north, Utah Lake on the south, the Jordan River on the west, and 1200 East (Lehi) on the east (see map below). The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the Lehi area
When: January 9, 2019, 6:00 to 7:00 pm
Where: Lehi Elementary School, 65 N. Center Street, Lehi
Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 365729844), 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 Lehi Subdivision, Provo River Division, of the Utah Lake and Jordan River drainage in Utah County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the Lehi area to survey existing water rights and investigate water user's claims. In light of this work, the public is invited to a public meeting. 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 Lehi area, please contact the Division of Water Rights at 801-538-5282.
Agenda:
1.  Introduction (Blake Bingham, P.E. - Assistant State Engineer)
2.  Adjudication Process Presentation
3.  Public Comments and Questions

A live stream broadcast of the public meeting will also be available online at this link.

For more information about this meeting, click here.

Saturday, October 27, 2018

Public Meeting Concerning the General Adjudication in Draper Area


The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the Draper area in Salt Lake County East Division of the Utah Lake/Jordan River Drainage (Area 57, Book 26). The Draper area generally includes the area between 12300 South on the north, the Utah County-Salt Lake County boundary on the south and the east, and the Jordan River on the west (see map below). The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the Draper area
When: November 14, 2018, 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. 365729843), 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 Draper 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 Draper area to survey existing water rights and investigate water user's claims. In light of this work, the public is invited to a public meeting. 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 Draper area, please contact the Division of Water Rights at 801-538-5282.

Agenda:
1.  Introduction (Blake Bingham, P.E. - Assistant State Engineer)
2.  Adjudication Process Presentation
3.  Public Comments and Questions

A live stream broadcast of the public meeting will also be available online at this link.

For more information about this meeting, click here.
 




Wednesday, October 17, 2018

Public Meeting Regarding Groundwater Management Plan for Parowan Valley

The Utah Division of Water Rights has set a public meeting to discuss the development of a Groundwater Management Plan for Parowan Valley. The following information is from the public meeting notice:

What: Public Meeting
Who: Parowan Valley Water Users
When: December 11, 2018, 6:00 p.m.
Where: Parowan City Office, 35 East 100 North, Parowan, Utah
Purpose: The purpose of the meeting is to discuss the development of a groundwater management plan for Parowan Valley. 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 have groundwater rights in the Parowan Valley area (Area 75), you may want to attend the public meeting, as the Groundwater Management Plan could have a significant impact on your water rights.

For more information about the meeting, click here.

For current water right policies in the Parowan Valley area, click here.

Saturday, October 6, 2018

EnerVest Ltd v. Utah State Engineer

The Utah Supreme Court recently issued its opinion in the case of EnerVest, Ltd. v. Utah State Engineer. The case focused on the issue of who has standing to appeal a district court's decision on an objection to a proposed determination.

Minnie Maud Creek is a stream in Duchesne County that is tributary to the Green River. The General Adjudication for Minnie Maud Creek was initiated in 1956, and the State Engineer issued a Proposed Determination in 1964. The Minnie Maud Reservoir and Irrigation Company ("MMRIC") was awarded twelve water rights in the Proposed Determination. Four objections were filed, which challenged eight of MMRIC's water rights.

In 2012, EnerVest filed a petition to expedite a hearing on the objections, which were still pending. The district court granted the hearing, but limited the scope to the question of whether MMRIC was correctly listed as the owner of the water rights. Several parties participated in the hearing, including EnerVest and Michael Carlson, who had not filed objections to the Proposed Determination, and the Hammerschmid Trust, who had filed an objection. EnerVest and the Hammerschmid Trust argued that MMRIC did not own the water rights, and Carlson argued that MMRIC did own the water rights. The district court agreed with Carlson, and ruled that MMRIC was correctly listed as the owner of the water rights in the Proposed Determination.

EnerVest and the Hammerschmid Trust appealed the decision to the Utah Supreme Court. During the pendency of the appeal, the Hammerschmid Trust voluntarily dismissed their appeal, leaving EnerVest as the sole appealing party. Carlson then challenged EnerVest's standing to continue the appeal.

The Utah Supreme Court first had to determine if the appeal was proper under Rule 54(b) of the Utah Rules of Appellate Procedure, which allows appeals for individual claims within a larger case. The Supreme Court concluded that the appeal was not proper for under Rule 54(b) because the district court did not offer a rationale for why the immediate appeal was necessary and because the district court's rulings were not final.

The Supreme Court then had to determine if the appeal was proper under Rule 5(a) of the Utah Rules of Appellate Procedure, which allows interlocutory appeals (i.e., appeals before a case is final). As part of this determination, the Supreme Court examined whether EnerVest had standing to pursue the appeal. The key fact in this analysis was that neither EnerVest nor its predecessor-in-interest had filed an objection to the Proposed Determination, and a party who does not timely object to a Proposed Determination acquiesces to the Proposed Determination as published. Because EnerVest had already acquiesced to the Proposed Determination, it lacked standing to appeal the district court's decision upholding the Proposed Determination. Furthermore, EnerVest could not pursue the Hammerschmid Trust's interests in the appeal. As the Supreme Court noted, "a non-objecting party's interests can piggyback on another party's objection, but only as far as the objecting party is willing to travel. Once the objecting party chooses to end its objection's journey, the non-objecting party cannot take over.

Based on these determinations, the Supreme Court dismissed the appeal for lack of appellate jurisdiction.

**On January 11, 2019, the Utah Supreme Court issued an amended opinion in this case. This article has been updated to reflect the amended opinion. To read the full amended opinion, click here.