California-Oregon Power Co. v. Beaver Portland C. Co.

• Decision Date: 05 November 1934
• Docket Number: No. 6874.,6874.
• Citation: 73 F.2d 555
• Parties: CALIFORNIA-OREGON POWER CO. v. BEAVER PORTLAND CEMENT CO. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

73 F.2d 555 (1934)

CALIFORNIA-OREGON POWER CO. v. BEAVER PORTLAND CEMENT CO. et al.

No. 6874.

Circuit Court of Appeals, Ninth Circuit.

November 5, 1934.

COPYRIGHT MATERIAL OMITTED

A. E. Reames, of Medford, Or., for appellant.

John K. Kollock, of Portland, Or., and Gus Newbury, of Medford, Or., for appellees.

Before WILBUR, SAWTELLE, and MACK, Circuit Judges.

MACK, Circuit Judge.

Plaintiff is the owner of land on the east side of the Rogue river, a meandering non-navigable stream in Oregon, directly opposite land on the west side, the legal title to which is in defendant city of Gold Hill; defendant Cement Company has possession of the city's land under an executory contract of purchase. Ownership in each case extends to the thread of the stream. Pursuant to its plan to build a dam and power plant on the west side of the river, Cement Company exploded charges of dynamite in reefs in the river bed but entirely west of the thread of the stream, for the purpose of permitting a freer flow of water down the west side of the river and of securing an available supply of broken rock for the construction of the dam. Plaintiff, claiming that the prosecution of these operations would divert the water from its land on the east side of the river and interfere with its rights as a riparian owner on the stream, sought an injunction to prevent defendants carrying on further blasting operations, removing the blasted rock from the bed of the stream, and doing anything else that would change the bed of the stream or lessen the flow of water over plaintiff's side of the river bed. The injunction as prayed for was denied but, to insure that some water would continue to flow down the plaintiff's side of the stream, defendants were enjoined from reducing the surface elevation of the water at the contemplated point of diversion below 1,070.056 feet above sea level. From this decree, plaintiff alone appeals.

Plaintiff's principal contentions are that by the rule of the common law a riparian owner on a nonnavigable stream has a vested right to the natural flow of the stream not substantially diminished or diverted from its natural course; that this rule of "continuous flow" was part of the law of Oregon when plaintiff's lands were acquired by its predecessors from the government in 1885; and that the vested property right thus created is protected as against changes in the Oregon law by the Federal Constitution. Defendants deny that the common law rule created vested claims of continuous flow; they base their own claims on adjudicated rights and permits under the Oregon Water Code of 1909 (Laws Or. 1909, p. 319).

1. This Code establishes a comprehensive system for the adjudication of water rights; there is therein provision both for the determination of existing rights and for the acquisition of new rights. Section 11 of the Code provides: "Upon a petition to the state engineer signed by one or more water users upon any stream, requesting the determination of the relative rights of the various claimants to the waters of that stream, it shall be the duty of the state engineer, if, upon investigation he finds the facts and conditions are such as to justify, to make a determination of the said rights. * * * In case suit is brought in the circuit court for the determination of rights to the use of water, the case may, in the discretion of the court, be transferred to the state engineer for determination as in this act provided." Or. Code Ann. 1930, § 47-601. In either case the determination of the state engineer does not become final until confirmed by the circuit court of the county in which the determination is had. Id. § 47-614. Section 45 of the Water Code provides: "Any person, association or corporation hereafter intending to acquire the right to the beneficial use of any waters shall, before commencing the construction, enlargement or extension of any ditch, canal or other distributing or controlling works, or performing any work in connection with said construction, or proposed appropriation, make an application to the state engineer for a permit to make such appropriation." Id. § 47-501. After the appropriation is completed, the party is entitled to a certificate of water rights, from the state engineer, like that granted after an adjudication. Id. § 47-508.

In the operation of its power plant, Cement Company purposes utilizing a maximum of 1,397 second feet of water. Of this amount, 295 second feet have been recognized in an adjudication under the Code; the other 1,102 second feet are covered by water permits issued by the state engineer under section 45. Plaintiff, although it denies that it was a party to that adjudication and therefore bound by that decree, does not contest defendants' right to use the 295 second feet. It contends, however, that that amount is now available to defendant without necessitating any change in the river bed. Defendants' permits for the other 1,102 second feet, plaintiff contends, are "mere options," which cannot justify interference with the rights of other riparian owners.

The District Judge, as an alternative ground for the denial of the injunctive relief sought, relied upon plaintiff's failure to avail itself of the procedure provided by the Water Code for the determination of its rights. An invitation to further proceedings in the state courts was thought by him to be implicit in the earlier opinion of this court in a related controversy between the same parties, City of Gold Hill v. California Oregon Power Co., 35 F.(2d) 317 (1929), in which the questions now at issue were expressly reserved from decision. Cf. Pacific Livestock Co. v. Silvies River Irr. Co., 200 F. 487 (C. C. A. 9, 1912).

The procedure established by the Water Code is in part at least administrative; it has been sustained in that aspect against constitutional attack both by the Oregon courts and the United States Supreme Court. In re Willow Creek, 74 Or. 592, 144 P. 505, 146 P. 475 (1914); Pacific Live Stock Co. v. Lewis, 241 U. S. 440, 36 S. Ct. 637, 60 L. Ed. 1084 (1916). Therefore the question arises whether or not plaintiff should have been relegated to the state tribunals on the principle that one who seeks injunctive relief in the federal courts must first exhaust the administrative remedies which the state provides. Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 S. Ct. 67, 53 L. Ed. 150 (1908); Porter v. Investors' Syndicate, 286 U. S. 461, 52 S. Ct. 617, 76 L. Ed. 1226 (1932). In both of these cases, the injunction was sought against the administrative body itself on constitutional grounds; in the instant case, the suit is between private parties and jurisdiction is based solely on diversity of citizenship. The principle of comity, which dissuades the federal court from enjoining the enforcement of state administrative determinations before they have been concluded, may be equally applicable, however, to justify a refusal to entertain a private suit which would in effect check or prevent the functioning of the administrative body. The decree of the court might in such a case conflict with adjudications by the administrative body of other water rights on the same stream and thus create just such a chaotic condition as the administrative determination of the water rights is designed to prevent.

In Oregon a suit involving water rights may be instituted in the state circuit court, and in the discretion of the court, the issues may be referred to the state engineer for preliminary determination. But the circuit court, whether in reviewing the state engineer's determination or in making an original disposition of the suit, is not acting in an administrative capacity; its determination is res adjudicata as to all parties and issues properly before it. Abel v. Mack, 131 Or. 586, 283 P. 8 (1929); Cf. In re Waters of Walla Walla River, 141 Or. 493, 502, 16 P. (2d) 939, 943 (1932). To compel plaintiff first to establish its rights in the circuit court of the state would therefore result in denying it entirely its right to begin proceedings in the federal courts. Cf. Railroad and Warehouse Commission v. Duluth Street Ry. Co., 273 U. S. 625, 47 S. Ct. 489, 71 L. Ed. 807 (1927); City Bank Farmers' Trust Co. v. Schnader, 291 U. S. 24, 54 S. Ct. 259, 78 L. Ed. 628 (1933). Whether the circuit court would be required to refer such a case as this to the state engineer for preliminary determination is at least doubtful. It has been reversed for failure to do so when the evidence was conflicting and the rights of those not party to the suit were likely to be affected. Oregon Lumber Co. v. East Fork Irrigation District, 80 Or. 568, 157 P. 963 (1916); Pacific Livestock Co. v. Balcombe, 101 Or. 233, 199 P. 587 (1921). But in the instant case, the rights of only the immediate parties are involved. Moreover, it is doubtful whether the administrative procedure provided by the state is adapted to the determination of such claims as those of plaintiff. The function of an adjudication under the Code is primarily to allocate definite quantities of water on the basis of prior or contemplated use. Plaintiff, however, claims the right to an indefinite quantity of water, namely the natural flow of the stream, on the basis of its riparian ownership. As the Oregon court has said: "By reason of the fact that the old riparian right doctrine does not provide for a fixed quantity of water to be apportioned to different persons or tracts of land, the rule * * * cannot be worked out or applied under the Water Code of 1909 in the adjudication of the relative rights of the various claimants to the use of water of a stream system." Re Water Rights of Hood River, 114 Or. 112, 162, 227 P. 1065, 1081 (1924).¹

Thus plaintiff stands on rights alleged to have become vested independently of the Water Code and the procedure thereby established. In the light of all of these considerations, we conclude that the principle that one must exhaust the...