Writings and observations

Klamath water users like decision

An Oregon Supreme Court decision in the case Klamath Water District et al v. United States, a case referred to it (partially) from the 9th Circuit Court of Appeals, is being roundly praised by water user advocates.

The Oregon court said the referrals “ask whether, as a matter of state law, the farmers and irrigation districts that use water from a federal reclamation project have an equitable property interest in a water right to which the United States holds legal title and whether an equitable property interest in a water right is subject to adjudication in the ongoing Klamath Basin water rights adjudication.”

In background, the court said “The Federal Bureau of Reclamation manages the Klamath Project, which stores and supplies water to farmers, irrigation districts, and federal wildlife refuges in the Klamath River basin. The plaintiffs in the underlying federal litigation are farmers and irrigation districts that use water from the Klamath Project for irrigation and other agricultural purposes. As a result of drought conditions in 2001, the Bureau terminated the delivery of water to plaintiffs that year in order to make water available for three species of endangered fish. Claiming a property right in the water, plaintiffs brought an action in the United States Court of Federal Claims, alleging that the United States had taken their property in violation of the Fifth Amendment and, alternatively, that the United States had breached its contractual obligation to deliver water to them. The United States asked the federal claims court to abstain from deciding plaintiffs’ takings claim until an ongoing state water rights adjudication determined what, if any, property rights plaintiffs had in the water from the Klamath Project.”

In response, the court concluded:

In summary, in answering the Federal Circuit’s questions, we have assumed that the United States appropriated the right to use the waters described in its notice and that it presently holds legal title to that water right. We also have assumed that plaintiffs are asserting only an equitable or beneficial property interest in the water right to which the United States holds legal title. Who presently holds legal title to that water right and the scope of that right are questions for the Klamath Basin adjudication, and we express no opinion on those issues. Given those assumptions, we have answered the court’s questions as follows:

1. The 1905 Oregon act did not preclude plaintiffs from acquiring an equitable or beneficial property interest in a water right to which the United States holds legal title. Moreover, under the 1905 act, a formal written release from the United States is not necessary for plaintiffs to have acquired an equitable or beneficial property interest in the water right that the United States appropriated.

2. Under Oregon law, whether plaintiffs acquired an equitable or beneficial property interest in the water right turns on three factors: whether plaintiffs put the water to beneficial use with the result that it became appurtenant to their land, whether the United States acquired the water right for plaintiffs’ use and benefit, and, if it did, whether the contractual agreements between the United States and plaintiffs somehow have altered that relationship. In this case, the first two factors suggest that plaintiffs acquired a beneficial or equitable property interest in the water right to which the United States claims legal title, but we cannot provide a definitive answer to the court’s second question because all the agreements between the parties are not before us.

3. To the extent that plaintiffs assert only an equitable or beneficial property interest in the water right to which the United States claims legal title in the Klamath Basin adjudication, plaintiffs are not “claimants” who must appear in that adjudication or lose the right. As a general rule, equitable or beneficial property interests in a water right to which someone else claims legal title are not subject to determination in a state water rights adjudication.

Nancie G. Marzulla, lead counsel for the Klamath water users, remarked that “We are thrilled with this decision. The trial judge obviously was wrong on Oregon law and plainly misapprehended how federal reclamation law operates. We are glad that we now have some definitive guidance and direction for the trial court as we go forward to complete this litigation.”

The firm also said in a statement, “The Oregon Supreme Court held that the Oregon legislature in 1905 did not give away all of its water rights in the Klamath Reclamation Project to the federal government. Further, the Court stated that whatever rights the federal government did acquire in 1905 were for the benefit of the water users: ‘[I]n acquiring water rights under the aegis of the Reclamation Act, the United States was not acting for its own benefit, but for the benefit of the persons who Congress intended would put the water to beneficial use reclaiming the land’ — in other words, the farmers who are the plaintiffs in this lawsuit. Finally, the Oregon Supreme Court held that the Klamath Basin adjudication that is currently underway does not deprive the water users of the ability to pursue their taking claim in federal court, explaining that ‘[a] person asserting only a beneficial or equitable property interest in a water right is not a ‘claimant’ who must appear in the Klamath Basin adjudication and file a claim to determine that interest.’”

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