TPC, LLC v. Or. Water Res. Dep't

308 Or.App. 177

482 P.3d 121

TPC, LLC, an Oregon limited liability company, Petitioner,

and

Taylor A. Hyde and John L. Hyde, as General Partners of the Hyde Family Limited Partnership, Petitioners-Respondents,

v.OREGON WATER RESOURCES DEPARTMENT and Danette Watson, in her official capacity as District #17 Watermaster, Respondents-Respondents,andKlamath Tribes, Intervenor-Appellant.

TPC, LLC, an Oregon limited liability company, Petitioner,

and

Taylor A. Hyde and John L. Hyde, as General Partners of the Hyde Family Limited Partnership, Petitioners-Respondents,

v.Oregon Water Resources Department and Danette Watson, in her official capacity as District #17 Watermaster, Respondents-Appellants,andKlamath Tribes, Intervenor.

A167380

Court of Appeals of Oregon.

Argued and submitted November 6, 2019.

December 30, 2020

Edmund Clay Goodman, Portland, argued the cause for appellant Klamath Tribes. Also on the briefs was Hobbs Straus Dean & Walker LLP.

Dominic M. Carollo argued the case for respondents John L. Hyde and Taylor A. Hyde. Also on the brief were Nathan Ratliff and Yockim Carollo LLP.

Carson L. Whitehead, Assistant Attorney General, argued the cause for respondents Oregon Water Resources Department and Danette Watson. Also on the briefs were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.

Carson L. Whitehead, Assistant Attorney General, argued the cause for appellants Oregon Water Resources Department and Danette Watson. Also on the briefs were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.

Dominic M. Carollo argued the case for respondents John L. Hyde and Taylor A. Hyde. Also on the brief were Nathan Ratliff and Yockim Carollo LLP.

James A. Maysonett argued the cause on behalf of amicus curiae United States. Also on the brief were Billy J. Williams, Kelly Zusman, Jeffrey Bossert Clark, and Eric Grant.

Before Ortega, Presiding Judge, and Shorr, Judge, and James, Judge.

ORTEGA, P. J.

This case involves final orders issued in 2016 and 2017 by an Oregon Water Resources Department (OWRD) watermaster¹ which curtailed petitioners’² use of their surface water right in the Williamson River, which is located in the Klamath Basin, in favor of senior water rights held by the Klamath Tribes and the United States as trustee for the Klamath Tribes. The parties’ water rights were established as determined claims in a 2013 OWRD final order that adjudicated water right claims in the Klamath Basin. That 2013 adjudication order is currently on review in Klamath County Circuit Court. To settle contests to petitioners’ water right claim brought by the United States and the Klamath Tribes in that adjudication, petitioners, the United States, and the Klamath Tribes entered into a stipulation, which OWRD also signed (the Hyde Agreement). The OWRD adjudicator incorporated part of the Hyde Agreement into the 2013 adjudication order.

In 2016 and 2017, the Klamath Tribes made a call for water to the district watermaster, which led to the orders at issue in this case that curtailed petitioners’ use of their water right. Petitioners sought judicial review of those curtailment orders in Marion County Circuit Court, arguing that a provision in the Hyde Agreement that the adjudicator did not incorporate into the 2013 adjudication order prohibited OWRD from issuing the curtailment orders. Petitioners did not join the Klamath Tribes or the United States in their petitions, and the Klamath Tribes intervened for the limited purpose of seeking to dismiss the action for failure to join the Tribes. Marion County Circuit Court permitted the Tribes to intervene but denied the Tribes’ motion to dismiss and, on cross-motions for summary judgment by petitioners and OWRD, concluded that OWRD was subject to the provision in the Hyde Agreement, as urged by petitioners, and remanded the curtailment orders.

OWRD appeals from that judgment, arguing that it is not bound by the Hyde Agreement. The Klamath Tribes also appeal, arguing that Marion County Circuit Court erred in denying their motion to dismiss. Additionally, the United States filed an amicus brief on appeal, taking up the argument made by OWRD below that Marion County Circuit Court lacked subject matter jurisdiction over petitioners’ claim, because, under ORS chapter 539, exclusive jurisdiction for the particular claim they asserted rests in Klamath County Circuit Court, where the Klamath Basin adjudication order is currently being litigated by the parties in this case. We conclude that Marion County Circuit Court did not have subject matter jurisdiction over petitioners’ claim and, thus, reverse and remand with instructions to Marion County Circuit Court to dismiss the petitions.

The relevant background facts are undisputed. In 2013, under the process set forth in ORS chapter 539, the director of OWRD, through an adjudicator, issued a final order that adjudicated about 730 surface water right claims in the Klamath River Basin (the KBA order). The Klamath River Basin adjudication (the KBA or the adjudication) included surface water right claims in the Williamson River and its tributaries, which feed into Upper Klamath Lake.³ Petitioners’ determined claim, Claim 33, is "at and near the headwaters of the Williamson River" with a priority date in 1864. The determined claims of the Klamath Tribes and the United States, as trustee for the Klamath Tribes, include Claims 625 through 629 and 631 through 640, which are for instream flows in the Williamson River and its tributaries, and Claim 623, which is for maintenance of minimum water levels in Klamath Marsh, into which the Williamson River flows. All of those claims have a priority date of "time immemorial."⁴ Thus, under the KBA order, the Klamath Tribes’ water rights have seniority over petitioners’ water right.⁵ Many parties to the adjudication filed exceptions to the KBA order, including petitioners, the United States, and the Klamath Tribes, which are discussed below. Those exceptions are currently on review in Klamath County Circuit Court.

During the adjudication, the United States and the Klamath Tribes contested petitioners’ water right claim (Claim 33). In 2005, petitioners, the United States, the Klamath Tribes, and OWRD signed a stipulation to settle those contests to petitioners’ claim—the Hyde Agreement. The Hyde Agreement was a filed document in that contested case and is headed with the caption of the contested case, case number, claim number, contest numbers, and the pleading title, "Stipulation to Resolve Contests." The opening line of the document states, "Claimants Dayton and Gerda Hyde (‘Claimants’), Contestant United States, and Contestant Klamath Tribes (‘Tribes’), collectively referred to as the ‘Parties,’ and the Oregon Water Resources Department (‘OWRD’), stipulate and agree as follows." (Footnote omitted.) After setting forth stipulated facts in section A, the Hyde Agreement provides, in part, in section B:

"1. (a) Claimants, Contestants and OWRD agree that Claim 33 should be approved by the Adjudicator as described below: [setting out a description of the water right]

"(b) The exercise of the water right described herein is subject to maintaining a flow of at least one-half of the total flow in the Williamson River upstream of the current north boundary of Claimants’ property * * *. * * *

"(c) Claimants’ use of their water right upstream of the current north boundary of Claimants’ property * * * will not be curtailed in favor of any senior water right now held or later acquired by the United States or the Klamath Tribes. The United States and the Klamath Tribes agree that they will not place any call on the Williamson River that will result in the curtailment of Claimants’ use of water in excess of the principles set forth in paragraph B.1.(b), above. To ensure implementation of this provision, the United States and the Klamath Tribes hereby request that the Adjudicator's Findings of Fact and Order of Determination place a condition implementing the principles set forth in paragraph B.1.(b), above, thereby preventing exercise, upstream of the current north boundary of Claimants’ property, * * * of any rights adjudicated in favor of the United States on behalf of the Klamath Tribes in Claim No. 633. The United States and the Klamath Tribes also request that the same provision be placed on any rights adjudicated in favor of the Klamath Tribes with respect to the portion of the Klamath Tribes’ Claim No. 612 that incorporates Claim 633 filed by the United States on behalf of the Klamath Tribes.

"(d) Claimants and Contestants anticipate that it will be unnecessary to invoke the provisions of paragraph B.1.(b), above, due to the Conservation Easement discussed below and attached hereto as Exhibit 2. However, to the extent that one or more of the Parties determines that regulation of the river is necessary, such regulation will be conducted subject to the availability of the watermaster to carry out this work. * * *

"(e) Claimants agree to grant to the Tribes a Conservation Easement on the property above the boundary described in paragraph B.1.(b). * * * Enforcement of any provision of the Conservation Easement will be done through proceedings of the Easement itself, and will not be cause for filing exceptions in the Circuit Court to the Adjudicator's findings of fact and order of determination. * * *

"(f) Claimants also hold Water Right Certificates Nos. 37002 and 8615. Claimants do not intend to exercise their water rights under these Certificates in a manner so as to cause depletion of water in the Williamson River in amounts greater than those identified in paragraph B.1.(b). To ensure that such a result does not occur, Claimants hereby file Affidavits of Diminution with OWRD, and request that Certificate Nos. 37002 and 8615 be diminished in accordance therewith. * * *

"(g) Claimants also agree that they will not exercise any water rights that they may hereafter acquire or receive in such

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