Waterwatch of Or., Inc. v. Water Res. Dep't

• Citation: 342 P.3d 712,268 Or.App. 187
• Decision Date: 31 December 2014
• Docket Number: A148870, A148872, A148874.,S32410, S37839, S46120, S35297, S43170, S3778, S9982, S22581
• Parties: WATERWATCH OF OREGON, INC., an Oregon nonprofit corporation, Petitioner, v. WATER RESOURCES DEPARTMENT, a state agency; Water Resources Commission, a state agency; City of Lake Oswego, an Oregon municipal corporation; City of Tigard, an Oregon municipal corporation; North Clackamas County Water Commission, an Oregon municipal corporation; Sunrise Water Authority, an Oregon municipal corporation; and South Fork Water Board, an Oregon municipal corporation, Respondents. Waterwatch of Oregon, Inc., an Oregon nonprofit corporation, Petitioner, v. Water Resources Department, a state agency; Water Resources Commission, a state agency; North Clackamas County Water Commission, an Oregon municipal corporation; Sunrise Water Authority, an Oregon municipal corporation; City of Tigard, an Oregon municipal corporation; City of Lake Oswego, an Oregon municipal corporation; and South Fork Water Board, an Oregon municipal corporation, Respondents. Waterwatch of Oregon, Inc., an Oregon nonprofit corporation, Petitioner, v. Water Resources Department, a state agency; Water Resources Commission, a state agency; South Fork Water Board, an Oregon municipal corporation; City of Tigard, an Oregon municipal corporation; North Clackamas County Water Commission, an Oregon municipal corporation; Sunrise Water Authority, an Oregon municipal corporation; and City of Lake Oswego, an Oregon municipal corporation, Respondents.
• Court: Court of Appeals of Oregon

268 Or.App. 187
342 P.3d 712

WATERWATCH OF OREGON, INC., an Oregon nonprofit corporation, Petitioner
v.
WATER RESOURCES DEPARTMENT, a state agency;

Water Resources Commission, a state agency;

City of Lake Oswego, an Oregon municipal corporation;

City of Tigard, an Oregon municipal corporation;

North Clackamas County Water Commission, an Oregon municipal corporation;

Sunrise Water Authority, an Oregon municipal corporation;

and South Fork Water Board, an Oregon municipal corporation, Respondents.

Waterwatch of Oregon, Inc., an Oregon nonprofit corporation, Petitioner
v.
Water Resources Department, a state agency;

Water Resources Commission, a state agency;

North Clackamas County Water Commission, an Oregon municipal corporation;

Sunrise Water Authority, an Oregon municipal corporation;

City of Tigard, an Oregon municipal corporation;

City of Lake Oswego, an Oregon municipal corporation;

and South Fork Water Board, an Oregon municipal corporation, Respondents.

Waterwatch of Oregon, Inc., an Oregon nonprofit corporation, Petitioner
v.
Water Resources Department, a state agency;

Water Resources Commission, a state agency;

South Fork Water Board, an Oregon municipal corporation;

City of Tigard, an Oregon municipal corporation;

North Clackamas County Water Commission, an Oregon municipal corporation;

Sunrise Water Authority, an Oregon municipal corporation;

and City of Lake Oswego, an Oregon municipal corporation, Respondents.

S32410, S37839, S46120, S35297, S43170, S3778, S9982, S22581
A148870, A148872, A148874.

Court of Appeals of Oregon.

Argued and Submitted Nov. 15, 2013.
Decided Dec. 31, 2014.

342 P.3d 714

Lisa A. Brown argued the cause for petitioner. With her on the briefs was Brad P. Hill.

J.W. Ring, Portland, argued the cause for respondents City of Lake Oswego, North Clackamas County Water Commission, Sunrise Water Authority, and City of Tigard. With him on the brief was Christine L. Hein, Mark P. Strandberg, and Wren Bender McKown & Ring, LLLP.

Christopher D. Crean, Portland, argued the cause for respondent South Fork Water Board. With him on the brief were Chad A. Jacobs and Beery, Elsner & Hammond, LLP.

Denise G. Fjordbeck, Senior Assistant Attorney General, argued the cause for respondents Oregon Water Resources Department and Oregon Water Resources Commission. On the brief were Ellen F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor General, and Erin C. Lagesen, Assistant Attorney General.

Richard M. Glick, Michael J. Gelardi, and Davis Wright Tremaine LLP, filed an amici curiae brief for Oregon Water Utilities Council and The League of Oregon Cities.

Before ARMSTRONG, Presiding Judge, and NAKAMOTO, Judge, and EGAN, Judge.

Opinion

NAKAMOTO, J.

268 Or.App. 190

Petitioner Water Watch of Oregon, Inc. seeks judicial review of three separate final orders issued in contested cases by the Water Resources Department (the department) that were decided based on a consolidated record, and which we have consolidated for purposes of argument and opinion. In those three orders, the department granted to respondents the City of Lake Oswego,¹ the South Fork Water Board, and the North Clackamas County Water Commission² (collectively, the municipal parties) extensions of time to perfect water rights under their respective permits for water diversions from the lower 3.1 miles of the Clackamas River. In granting the extensions, the department was required to condition the “undeveloped portion” of the municipal parties' permits “to maintain * * * the persistence of fish species

342 P.3d 715

listed as sensitive, threatened or endangered under state or federal law.” ORS 537.230(2)(c). Petitioner asserts that the department's conclusion that the fish-persistence requirement has been met by the conditions that the department placed on the municipal parties' permits is not supported by substantial evidence and is contrary to law. Petitioner also challenges the department's modification of the administrative law judge's findings of fact and the department's procedural handling of evidence submitted by petitioner.

We conclude that the department's determination that the permits, as conditioned, will maintain the persistence of listed fish species in the affected waterway lacks both substantial evidence and substantial reason. The department based its decision on the distinction between a short-term drop below persistence flows, which will not affect the persistence of listed fish species, and a long-term drop below persistence flows, which will affect the persistence of listed fish species. However, the record lacks

268 Or.App. 191

substantial evidence of what a short-term drop below persistence flows means versus a long-term drop. Additionally, the department failed to adequately explain how its findings support its conclusion that the undeveloped portions of the permits, as conditioned, will maintain the persistence of the listed fish species when, on their face, the conditions fail to ensure that diversion of the undeveloped portions of the permits will not contribute to long-term drops below persistence flows. We reject all of petitioner's remaining arguments on judicial review, and we reverse and remand all three final orders to the department for further consideration.

I. BACKGROUND

A. Overview

The municipal parties are holders of eight separate water-right permits for municipal use that have points of diversion in the lower 3.1 miles of the Clackamas River (affected reach or lower reach).³ The holder of a permit for municipal water use must complete construction of any works within 20 years of obtaining the permit and put the water right to complete use within the time frame specified in the permit. ORS 537.230(2). A municipal water holder can obtain an extension of time of those deadlines if the department finds that three statutory conditions have been satisfied.⁴ Id. At issue in these cases is the department's

268 Or.App. 192

application of the third statutory condition

342 P.3d 716

in granting the municipal parties' requested extensions.

That condition required the department to find that the “undeveloped portion” of the municipal parties' permits are “conditioned to maintain, in the portions of waterways affected by water use under the permit, the persistence of fish species listed as sensitive, threatened or endangered under state or federal law.” ORS 537.230(2)(c). The statute requires the department to “base its finding on existing data and upon the advice of the State Department of Fish and Wildlife.” Id. By rule, the department's finding is limited to effects “related to streamflow as a result of use of the undeveloped portion of the permit and further limited to where, as a result of use of the undeveloped portion of the permit, [the Oregon Department of Fish and Wildlife (ODFW) ] indicates that streamflow would be a limiting factor for the subject listed fish species.” OAR 690–315–0080(2).

With that background in mind, we turn to the record developed below.

B. Water permits

1. Lake Oswego

The City of Lake Oswego is the holder of two water right permits at issue in these cases. Permit S–32410, which was granted to the city on October 19, 1967, authorizes the city to use up to 50.0 cubic feet per second (cfs) of water from

268 Or.App. 193

the Clackamas River. “Construction of the water development project was to be completed by October 1, 1969, and complete application of water was to be made on or before October 1, 1970.” Permit S–37839, which was granted to the city on June 27, 1975, authorizes the city to use up to 9.0 cfs of water from the Clackamas River. “Construction of the water development project was to be completed by October 1, 1977, and complete application of water was to be made on or before October 19, 1978.”

The city had received multiple prior extensions of times for both permits, with the most recent extensions setting all permit deadlines on October 1, 2000. On July 1, 2003, the city submitted to the department the current requests to extend the deadlines on both permits to October 1, 2040. The undeveloped portion of Permit S–32410 is 25.0 cfs, and Permit S–37839 is 9.0 cfs.

2. North Clackamas County Water Commission

North Clackamas County Water Commission (North Clackamas)⁵ is the holder of three water-right permits at issue in these cases. Permit S–46120, which was granted to the City of Gladstone on January 18, 1982, and transferred to North Clackamas in 2005, authorizes North Clackamas to use up to 8.0 cfs of water from the Clackamas River. “Construction of the water development project was to be completed by October 1, 1983, and complete application of water was to be made on or before October 1, 1984.” The department granted two prior extensions of time for Permit S–46120, with the most recent extending all permit deadlines to October 1, 1993. On June 22, 2006, North Clackamas...