3G AG LLC v. Idaho Dep't of Water Res.
| Decision Date | 18 May 2022 |
| Docket Number | Docket No. 48769 |
| Citation | 509 P.3d 1180 |
| Parties | 3G AG LLC, an Idaho limited liability company, Petitioner-Appellant, v. IDAHO DEPARTMENT OF WATER RESOURCES, Respondent, and A&B Irrigation District, Burley Irrigation District, Milner Irrigation District, American Falls Reservoir District #2, Minidoka Irrigation District, North Side Canal Company and Twin Falls Canal Company, Intervenors-Respondents. In the Matter of Application for Transfer No. 83160 in the Name of Jeffrey and Chana Duffin. |
| Court | Idaho Supreme Court |
Holden Kidwell Hahn & Crapo, P.L.L.C. Idaho Falls, for Appellants. Robert L. Harris argued.
Lawrence G. Wasden, Idaho Attorney General, Boise, for Respondent Idaho Department of Water Resources. Michael C. Orr argued, and Garrick L. Baxter appeared.
Baker Rosholt & Simpson, LLP, Twin Falls, for Intervenors A&B Irrigation District, Burley Irrigation District, Milner Irrigation District, North Side Canal Company, and Twin Falls Canal Company.
Fletcher Law Office, Burley, for Intervenors American Falls Reservoir District #2 and Minidoka Irrigation District. William Kent Fletcher argued.
This appeal concerns the denial of an application to transfer a ground water right that currently benefits 53.9 acres which also has an entitlement to surface water rights. The transfer application sought to unstack these two overlapping rights by transferring the ground water right to irrigate a different property, which would double the number of acres being irrigated. The Idaho Department of Water Resources ("IDWR") denied the transfer because, among other reasons, approving it would cause an "enlargement" in the use of water as proscribed by Idaho Code section 42-222(1). On judicial review, the district court agreed with the denial and affirmed. We affirm the decision of the district court.
This appeal centers around IDWR's denial of Application 83160, brought by Jeffrey and Chana Duffin ("Duffin"), to transfer the licensed ground water right 35-7667 (the "ground water right" or "35-7667") to a different parcel of land. During the appeal of this case, 3G AG LLC ("the LLC") "purchased from Duffin the property where water right 35-7667—the water right subject to Transfer No. 8316 which is the subject of this appeal—is located." As a result of the transfer of ownership, the LLC sought to substitute itself for Duffin. Because there was no objection to the substitution, it was allowed.1 The material facts leading up to the denial are undisputed.
In 1977, IDWR granted a ground water permit for 35-7667 to irrigate the existing place of use in this appeal (i.e., the 53.9 acres). The application for the permit reported that there were no other water "rights" used for the "same purposes" at this place of use. IDWR's analysis of the application reached the same conclusion. The then owner of the 53.9 acres eventually submitted proof of beneficial use for the ground water permit on June 11, 1992. That date became the priority date, and four years later, IDWR examined whether the permit for 35-7667 should be processed into a licensed ground water right. During this time, IDWR's field exam notes explained that the same place of use for 35-7667 (the 53.9 acres) was also benefited by a surface water entitlement through 60 shares in the Aberdeen-Springfield Canal Company (the "surface water entitlement"). Nevertheless, IDWR's field report later documented that there were no overlapping water "rights" benefiting the 53.9 acres.
In 2001, IDWR granted a license for the ground water right. The license stated, among other things, that it had a maximum diversion rate of 1.1 cubic feet per second; it had a maximum diversion volume of 220-acre feet; the source was ground water; and the beneficial use was irrigation. The license also contained a condition that "[t]his right when combined with all other rights shall provide no more than 0.02 [cubic-feet per second] per acre nor more than 4.0 [acre-feet annually] per acre at the field headgate for irrigation of the lands above."
Seven years later, in 2008, the Idaho Legislature adopted IDWR's comprehensive management plan for the Eastern Snake Plain Aquifer ("the ESPA"). This plan was prepared by IDWR in response to "declining aquifer levels and spring discharges and changing Snake River flows that resulted in insufficient water supplies to satisfy existing beneficial uses." One objective of the plan is to "reduce the withdrawals" from the ESPA. Another objective is to "increase recharge" to the ESPA. Most of the recharge water comes through the Snake River, or its tributaries. This includes surface water recharge through the Aberdeen-Springfield Canal Company's water entitlements. In sum, the plan governs roughly 2.1 million irrigated acres on top of the ESPA. Of these acres, approximately 871,000 acres are irrigated from surface water, 889,000 acres are irrigated from ground water, and 348,000 acres are irrigated from both sources.
One year after implementing the plan, IDWR issued a guidance document for processing water right transfers under Idaho Code section 42-222(1) (the "Transfer Memo"). The Transfer Memo explains that a transfer application, under section 42-222(1), is required whenever a water right holder desires to change one, or multiple, water right "elements" on a licensed or decreed right. This includes changes to the point of diversion or place of use. The Transfer Memo goes on to explain the requirements for an acceptable transfer application. It also elaborates upon what may constitute "enlargement" in use of a water right. Part of its guidance as to whether approving a transfer will enlarge the use of a water right addresses "stacked" or overlapping water rights benefiting the same place of use.
In 2012, Duffin acquired ownership of the property to which the ground water right and surface water entitlement attached. Three years later, in 2015, IDWR approved Duffin's application to divide the ground water right so that the place of use was identified as the 53.9 acres that the right presently benefits. The license was amended to reflect this change, but otherwise remained the same. Five years after that, in 2017, Duffin ceased using the ground water right to irrigate the 53.9 acres and instead began exclusively using the surface water entitlement.
Two years later, in 2019, Duffin submitted Transfer Application 83160 to change the point of diversion and place of use for the ground water right to benefit a different property. In the application, Duffin reported that the existing place of use (the 53.9 acres) would still be irrigated with the surface water entitlement if the transfer were approved. The local watermaster did not oppose the proposed transfer. However, a notice of protest to the transfer was filed by A&B Irrigation District, Burley Irrigation District, Milner Irrigation District, American Falls Reservoir District #2, Minidoka Irrigation District, North Side Canal Company, and Twin Falls Canal Company (collectively "the Coalition"). The Coalition objected to the transfer, arguing that approving it would cause an enlargement in use of the ground water right and injure existing water rights.
After numerous status conferences, Duffin and the Coalition agreed that an evidentiary hearing was not needed because the material facts were not in dispute. Subsequently, the parties filed a statement of stipulated facts. From this, the hearing officer requested briefing on how to resolve the sole legal question: whether Duffin's application satisfied the transfer criteria set forth in Idaho Code section 42-222(1) such that the transfer must be approved. After the parties submitted their briefing, the hearing officer issued a preliminary order denying Duffin's application to transfer the ground water right.
Duffin petitioned for reconsideration. The hearing officer granted the petition in part and issued an amended preliminary order. However, this order still denied Duffin's transfer application. In August of 2020, the amended preliminary order became final after it was adopted in whole by the director of IDWR (the "Final Order"). The Final Order made the following findings, among others, based on the stipulated facts: the ground water right has been exclusively used to irrigate the existing place of use (the 53.9 acres) since at least April 1, 1980; the same place of use is also benefited by a surface water entitlement that has been appurtenant to it since at least 1970; the two rights have never been used together in the same year to irrigate the existing place of use; the ground water right has been used to irrigate the existing place of use up to 2017; and from 2017 to the present day, the surface water entitlement has been used to irrigate the place of existing use.
The Final Order applied these facts to this Court's discussion of the term "enlargement" in Barron v. Idaho Department of Water Resources , 135 Idaho 414, 18 P.3d 219 (2001). Barron dealt with a transfer application proposing to unstack overlapping ground and surface water rights. As discussed below, the...
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