By Stephen Odell
The Oregon Court of Appeals ruled that water rights holders could not independently secure judicial review, outside the statutory process prescribed for general stream adjudications, of administrative orders curtailing their rights issued in response to calls the Klamath Tribes made on the basis of senior water rights determinations that the Oregon Water Resources Department (OWRD or Department) had reached in the ongoing Klamath Basin Adjudication. [TPC, LLC v. Oregon Water Resources Department, 308 Or.App. 177 (Or.App. Dec. 30, 2020).]
Background
OWRD initiated the process for a general stream adjudication of the Klamath River Basin (Basin) in 1975 by issuing notices that it would begin an investigation for a proper determination of claims to water rights within the Basin. The administrative portion of that process culminated some forty years later when, in 2013, the Department issued Findings of Fact and an Order of Determination resolving the adjudication of some 730 surface water right claims within the Basin (KBA Order).
Included within the scope of the KBA Order is Claim 33, at and near the headwaters of the Williamson River with a priority date of 1864, as well as various claims of the Klamath Tribes and United States, both for instream flows in the river and its tributaries and to maintain minimum water levels in Klamath Marsh, all of which have a priority date of “time immemorial” pursuant to the Tribes’ 1864 Treaty. 308 Or.App. at 181-82. In 2005, to settle contests to Claim 33 that the United States and Klamath Tribes had brought in the Klamath Basin Adjudication, both of those parties, Claimants (“the Hydes”), and OWRD entered into an agreement (Hyde Agreement). In formulating the KBA Order, OWRD incorporated portions of the Hyde Agreement into its terms, but notably, declined to incorporate its “No-Call Provision.” That provision expressly provides that the Hydes’s ability to use their water right may not be curtailed in favor of any senior water right held by the United States or Klamath Tribes and that neither of those parties may place a call on Williamson River water that would result in the curtailment of such use, so long as the Hydes’s exercise of their water right maintains a flow of at least one-half of the total flow in the river upstream of their property. Id. at 182-83. The OWRD Adjudicator demurred from incorporating the Hyde Agreement’s No-Call Provision into the KBA Order based on his determination that it is “not pertinent to the determination of a water right claim.” Id. at 184-85.
Pursuant to the Oregon General Stream Adjudication statute, ORS Chapter 539 (GSA Statute), many claimants filed exceptions to the KBA Order, including the Hydes, Klamath Tribes and United States. Id. at 182, All of these exceptions are currently undergoing judicial review in the Klamath County Circuit Court per the process laid out in the GSA Statute. Id. Notwithstanding these exceptions, because the GSA Statute provides that OWRD is to enforce its administrative determinations made in the course of a general stream adjudication pending judicial review and resolution of such determinations, the District is implementing its KBA Order, including only those provisions of the Hyde Agreement that were expressly adopted into that order, which, as noted above, does not include the No-Call Provision. Id. at 190-91 (citing ORS § 539.170).
As a result, in 2016 and 2017 the Klamath Tribes placed a call on the OWRD watermaster in reliance on the KBA Order to enforce their senior water rights in the upper Williamson River and Klamath Marsh given that water levels in those years were below or projected to fall below what was necessary to fulfill the Tribes’ claims as determined in that order. Id.at 185. These calls in turn led to OWRD orders that curtailed the use of the Hydes’s water right. The Hydes responded by filing petitions seeking judicial review of those curtailment orders in Marion County Circuit Court pursuant to the Oregon Administrative Procedure Act. ORS §§ 183.484 & 536.075.
The Circuit Court Ruling
In addressing the Hydes’s petitions for review, the first and most salient issue before the Marion County Circuit Court was whether it lacked subject-matter jurisdiction over them and to review the curtailment orders because the issues they raise fall within the exclusive subject-matter jurisdiction of the KBA under the GSA Statute. The court found it did have jurisdiction under the Oregon Administrative Procedure Act (APA) to review the curtailment orders. 308 Or.App. at 187-88. On the merits, the court then ruled that the curtailment orders violated the terms of the Hyde Agreement and, on that basis, remanded them to the Department with instructions to comply with the agreement. Id. at 188. Both OWRD and the Tribes appealed from the court’s judgment, and the United States was granted leave to participate as an amicus curiae in the appeal. Id. at 182.
The Court of Appeals’ Opinion
Appropriately, as did the Circuit Court, the Oregon Court of Appeals commenced its analysis by examining the issue of subject-matter jurisdiction. Id. at 188-91. In this regard it first noted that all of the parties properly acknowledged that, pursuant to the GSA Statute, the Klamath County Circuit Court has exclusive jurisdiction to perform judicial review of the KBA Order, but differed as to whether review of the curtailment orders for compliance with the separate Hyde Agreement entered into incidental to that adjudication fell within the ambit of that review. Id. at 192. The Appeals Court explained that it viewed its task as drawing a jurisdictional line:
. . .between the exclusive review process for stream adjudications under ORS chapter 539 and review of orders in other than contested cases under ORS 536.075, such as the curtailment orders in this case. Id. at 193.
Looking to Land Use Statutes for Guidance
To help inform its analysis, the court first looked to a rough analogue it found exists in the context of Oregon Land Use Law statutes that differentiate between matters to be determined exclusively by the Land Use Board of Appeals (LUBA) and those that otherwise fall within the jurisdiction of the county Circuit Courts of the state. Id. at 192-94.
The Appeals Court then trained its focus on “the allegations and requested relief in the [Hydes’s] petitions as viewed through the lens of Oregon’s water law.” Id. at 194. In doing so, the court framed the core claim in those petitions as asserting that OWRD was legally precluded from issuing the challenged curtailment orders to satisfy the United States’ and Klamath Tribes’ water rights as determined by the Department in its KBA order, but rather was required to enforce such rights in accordance with the No-Call Provision of the Hyde Agreement, to which OWRD was also a party. Id. at 197. Upon examining that claim and the relief the Hydes sought, the Appeals Court determined that they were inextricably bound up with the KBA Order because they put the Marion County Circuit Court in a position where it was called upon to decide whether the Hyde Agreement placed a limitation on the Klamath Tribes’ KBA-determined water right claims. Id. As a result, the Appeals Court determined that the Hydes’s petitions sought to have the Marion County Circuit Court “interject itself into the water right determination process under ORS chapter 539,” which runs afoul of the exclusive jurisdiction the GSA Statute confers on the court specifically prescribed to review such determinations, the Klamath County Circuit Court. Id.
The Issue of Enforcement of the Hyde Agreement as a ‘Rotation Agreement’
Having resolved the gravamen of the matter regarding whether the Hydes’s petitions fell within the exclusive jurisdiction of the Klamath County Circuit Court under the GSA Statute, the Appeals Court turned to the subsidiary issue of whether the Hyde Agreement nevertheless should be separately enforced as a “rotation agreement.” Id. at 198-99. These agreements, authorized by ORS § 540.150, allow “water users owning lands to which are attached water rights [to] rotate in the use of the supply to which they may be collectively entitled,” and OWRD is then called upon to regulate the distribution of water in accordance with their terms. The Appeals Court made short shrift of this argument, concluding that, regardless of whether the Hyde Agreement qualifies as a Rotation Agreement under the statute, it is not segregable from the KBA Order, and therefore, any efforts to enforce it outside the exclusive judicial review process prescribed by the GSA Statute in Klamath County Circuit is improper as a jurisdictional matter. Id.
Finally, circling back to where it began its analysis, the Appeals Court was influenced by precedent arising in the context of Oregon’s Land-use statutes holding that attempts to seek review of claims in Oregon Circuit Courts that raise issues regarding the validity of a specific land use proposal that is still pending in the land-use decision and review process were subject to dismissal because they fell exclusively within LUBA’s jurisdiction. Id. at 200 (citing Flight Shop, Inc. v. Leading Edge Aviation, Inc., 277 Or.App. 638 (2016)).
Conclusion and Implications
In summary, the Appeals Court held that the Hydes’ petitions asking the Marion County Circuit Court to independently enforce the No-Call Provision of the Hyde Agreement effectively reflect an attempted end run around the ongoing KBA proceedings in the Klamath County Circuit Court in which exceptions to the KBA Order, including those related to Claim 33, are undergoing judicial review.
Although approximately two-thirds of Oregon waters are adjudicated, the Klamath Basin is
the only major basin to undergo an adjudication under the GSA Statute in around the last half-century. As a result, the Appeals Court’s jurisdictional ruling can be viewed as largely discrete and limited to its particular facts. At the same time, it may make water rights holders even more leery of having their rights determined as part of a general stream adjudication, given that it establishes rather definitively that they will have no recourse to secure review of whatever determinations OWRD makes in its administrative orders other than the singular process prescribed by the GSA Statute, which the KBA proceedings have shown can prove to be rather protracted and cumbersome.
The Appeals Court opinion is at the following link:
