Sullivan v. Lincoln Cty. Water Dist.

Consolidated appeals from a district court order granting petitions for judicial review in a water law matter and from a post-judgment order denying motions for attorney fees. Eighth Judicial District Court, Clark County; Bita Yeager, Judge.

Aaron D. Ford, Attorney General, Heidi Parry Stern, Solicitor General, Jeffrey M. Conner and Kiel B. Ireland, Deputy Solicitors General, and James N. Bolotin, Senior Deputy Attorney General, Carson City, for Adam Sullivan, P.E., Nevada State Engineer.

Taggart & Taggart, Ltd., and Paul G. Taggart and Thomas P. Duensing, Carson City; Steven C. Anderson, Las Vegas, for Southern Nevada Water Authority.

Scott Lake, Reno, for Center for Biological Diversity.

Dotson Law and Robert A. Dotson and Justin C. Vance, Reno; Steven D. King, Dayton, for Muddy Valley Irrigation Company.

Dylan V. Frehner, District Attorney, Lincoln County; Great Basin Law and Wayne O. Klomp, Reno, for Lincoln County Water District.

Allison MacKenzie, Ltd., and Karen A. Peterson and Alida C. Mooney, Carson City, for Vidler Water Company, Inc.

Robison, Sharp, Sullivan & Brust and Kent R. Robison and Hannah E. Winston, Reno; Brownstein Hyatt Farber Schreck, LLP, and Bradley J. Herrema, Las Vegas; Coulthard Law PLLC and William L. Coulthard, Las Vegas; Wingfield Nevada Group and Emilia K. Cargill, Coyote Springs, for Coyote Springs Investment, LLC.

Dyer Lawrence, LLP, and Francis C. Flaherty and Sue S. Matuska. Carson City,

for Nevada Cogeneration Associates Nos. 1 and 2.

Kaempfer Crowell and Severin A. Carlson and Sihomara L. Graves, Reno, for The Church of Jesus Christ of Latter-Day Saints.

Marquis Aurbach and Christian T. Balducci, Las Vegas, for Apex Holding Company, LLC, and Dry Lake Water, LLC.

McDonald Carano LLP and Lucas Foletta, Sylvia Harrison, and Jane Susskind, Reno, for Georgia-Pacific Gypsum, LLC, and Republic Environmental Technologies, Inc.

Parsons Behle & Latimer and Gregory H. Morrison, Reno, for Moapa Valley Water District.

Schroeder Law Offices, P.C., and Laura A. Schroeder, Caitlin R. Skulan, and Therese A. Ure Stix, Reno, for Bedroc Limited, LLC, City of North Las Vegas, and Western Elite Environmental, Inc.

Timothy M. Clausen and Michael D. Knox, Reno, for Sierra Pacific Power Company.

BEFORE THE SUPREME COURT, EN BANC.

OPINION

By the Court, LEE, J.:

This case examines whether the State Engineer has the authority to redesignate multiple existing hydrographic basins as one "superbasin" based on a shared source of water for purposes of the water’s administration and management. We also look at whether the State Engineer complied with due process in creating the super basin at issue here.

In Order 1309, the State Engineer determined that the waters of seven basins were interconnected in a manner such that withdrawals from one basin affected the amount of water in the other basins. Consequently, the State Engineer combined those basins, for administration purposes, into one superbasin. Further, the previously granted appropriations of water exceeded the rate of recharge in the superbasin, now known as the Lower White River Flow System (LWRFS). The State Engineer found that permitted groundwater pumping from that flow system may reduce the amount of water available to parties with vested surface water rights, including rights to waters from the Muddy River, a vital source of water for Las Vegas. Additionally, the State Engineer determined that no more than 8,000 afa, and perhaps less, could be appropriated from the flow system without affecting the vested rights and other public interests.

Respondents, owners of water rights throughout the new superbasin, petitioned for judicial review in the district court, alleging that the State Engineer lacks authority to conjunctively manage surface waters and groundwater and to jointly administer the multiple basins that form the LWRFS. They also asserted that the State Engineer violated their due process rights in issuing Order 1309. The district court largely agreed with respondents and granted their petitions for judicial review. The State Engineer and others interested in the flow of water throughout the LWRFS appealed.

We hold that the State Engineer has authority to conjunctively manage surface waters and groundwater and to jointly administer multiple basins and thus was empowered to issue Order 1309. We also conclude that the State Engineer did not violate due process protections because respondents received notice and had an opportunity to be heard. Accordingly, we reverse the district court’s order insofar as it granted respondents’ petitions for judicial review and dismissed appellants’ petitions for judicial review and remand this matter to the district court for further proceedings as to the State Engineer’s factual determinations. We further affirm in part and reverse in part the district court’s conflicting order on whether appellants had notice that the State Engineer would adjudicate the absence of a conflict to Muddy River rights. Finally, we do not reach the merits of the attorney fees issue here, given our reversal of the order granting petitions for judicial review.

FACTS AND PROCEDURAL HISTORY

In 2001, the State Engineer considered pending applications to appropriate groundwater from several basins that sit just north of Las Vegas. The groundwater is from an

underground water resource known as the carbonate rock aquifer system, or the LWRFS, a large area of underground water whose rate of recharge and boundaries were unknown at the time. The State Engineer held those applications in abeyance and instead issued Order 1169. In Order 1169, he opined that groundwater in the various basins originated from the same carbonate rock aquifer system and that pumping groundwater from one basin might reduce the flow of water to other basins, including to the springs supplying the fully appropriated Muddy River.¹ He indicated that it was unclear how much additional groundwater could be appropriated without causing adverse effects throughout the LWRFS. In order to determine the effects of additional pumping, the State Engineer ordered water rights holders in Coyote Springs Valley, one of the subject basins, to conduct a pump test to obtain further information by stressing the aquifer. During the pump test, the water rights holders in Coyote Springs Valley pumped at least 50% of their permitted water rights over a period of two years.

Based on the results of the pump test, the State Engineer issued Order 1169A in 2012. In that order, the State Engineer determined that the increased pumping resulted in an unprecedented decrease in water flow to the highest elevation springs fed by the carbonate rock aquifer system.

The State Engineer found that the pump test measurably reduced flows in the headwater springs that feed the Muddy River, which was fully appropriated for use prior to 1905 under the Muddy River Decree. Rights holders under the Muddy River Decree hold prestatutory vested water rights, and the State Engineer is statutorily required to not impair these types of water rights. Further, the springs and tributary headwaters of the Muddy River are the only habitat of the Moapa Dace, a fish protected under the Endangered Species Act. As a result, the State...