Churchill Cnty. v. State Eng'r (In re Nev. State Eng'r Ruling No. 5823)

• Decision Date: 31 May 2012
• Docket Number: No. 52963.,52963.
• Citation: 277 P.3d 449,128 Nev. Adv. Op. 22
• Court: Nevada Supreme Court
• Parties: In re NEVADA STATE ENGINEER RULING NO. 5823. Churchill County, Nevada, a Political Subdivision of the State of Nevada; and Pyramid Lake Paiute Tribe, Appellants, v. State Engineer, The State of Nevada, Department of Conservation and Natural Resources, Division of Water Resources; Aspen Creek, LLC; Dayton Valley Investors, LLC; Lyon County; Stanton Park Development, Inc.; Carson Tahoe Regional Healthcare; R & B Land Investments; Dennis Smith; and Marcia Bennett Smith, Respondents.

277 P.3d 449

128 Nev. Adv. Op. 22

In re NEVADA STATE ENGINEER RULING NO. 5823.Churchill County, Nevada, a Political Subdivision of the State of Nevada; and Pyramid Lake Paiute Tribe, Appellants,

v.State Engineer, The State of Nevada, Department of Conservation and Natural Resources, Division of Water Resources; Aspen Creek, LLC; Dayton Valley Investors, LLC; Lyon County; Stanton Park Development, Inc.; Carson Tahoe Regional Healthcare; R & B Land Investments; Dennis Smith; and Marcia Bennett Smith, Respondents.

No. 52963.

Supreme Court of Nevada.

May 31, 2012.

Arthur E. Mallory, District Attorney, and Craig B. Mingay, Deputy District Attorney, Churchill County, for Appellant Churchill County.

Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP, and Don Springmeyer and Christopher W. Mixson, Las Vegas, for Appellant Pyramid Lake Paiute Tribe.

Allison, MacKenzie, Pavlakis, Wright & Fagan, Ltd., and Karen A. Peterson, Carson City, for Respondent Carson Tahoe Regional Healthcare.

Catherine Cortez Masto, Attorney General, and Bryan L. Stockton, Deputy Attorney General, Carson City, for Respondent Nevada State Engineer.

George N. Benesch, Reno, for Respondent Lyon County.

Holland & Hart LLP and Alex J. Flangas, Reno, for Respondent R & B Land Investments.

J.M. Clouser & Associates, Ltd., and Justin M. Clouser, Minden, for Respondents Dennis Smith and Marcia Bennett Smith.

Law Offices of John P. Schlegelmilch, Ltd., and Sandra–Mae Pickens, Yerington; Thorndal Armstrong Delk Balkenbush & Eisinger and Brent T. Kolvet, Reno, for Respondent Stanton Park Development, Inc.

Robertson & Benevento and G. David Robertson and Jarrad C. Miller, Reno, for Respondents Aspen Creek, LLC; and Dayton Valley Investors, LLC.

Brownstein Hyatt Farber Schreck, LLP, and Gary M. Kvistad and Bradley J. Herrema, Las Vegas; Brownstein Hyatt Farber Schreck, LLP, and Michael A. Gheleta and Geoffrey M. Williamson, Denver, Colorado, for Amicus Curiae Town of Minden, Nevada.

Before the Court En Banc.

OPINION

By the Court, PICKERING, J.:

NRS 533.450(1) affords judicial review “in the nature of an appeal” to “[a]ny person feeling aggrieved by any order or decision of the State [Water] Engineer ... affecting the person's interests.” The appeal “must be initiated in the proper court of the county in which the matters affected or a portion thereof are situated.” Id. In this case, we consider what the statute means by “matters affected.” The district court held that the phrase refers to the point of diversion of the applicants' existing or proposed water rights, nobody else's. It further held that filing for review in an improper county does not just misplace venue, a defect that may be cured or waived, but defeats subject matter jurisdiction, requiring dismissal. Thus, since the protesters filed their appeals in Churchill County, where their rights or interests allegedly would be affected, as opposed to Lyon County, where the applicants' groundwater appropriations lie, the district court summarily dismissed. By then, NRS 533.450(1)'s 30–day limit on seeking judicial review had passed.

We conclude that the district court read the statute too restrictively. We therefore vacate the jurisdictional dismissal and remand for further proceedings consistent with this opinion.

I.

A.

This case concerns State Engineer Ruling 5823, allocating groundwater rights in the Dayton Valley Hydrographic Basin (the Basin). Most of the applications considered in Ruling 5823 asked to change the point of diversion, place, and manner of use of existing groundwater appropriations. However, two were for new groundwater appropriations. The Basin lies wholly within Lyon County.

Appellants Churchill County and the Pyramid Lake Paiute Tribe (the Tribe) protested the applications before the State Engineer. They maintain that the Basin is “severely over-appropriated.” Because the Basin's groundwater is hydrologically connected to the surface waters of the Carson River, which flows into the Lahontan Reservoir, they argued to the State Engineer that approving the applications in Lyon County would deplete these waters, in which they have an interest, in neighboring Churchill County.

Churchill County holds decreed surface water rights in the Carson River, but the Tribe does not. Nonetheless, the Tribe reasons that the applications considered in Ruling 5823 affect its interests because depleting the Carson River surface water will decrease inflow into the Lahontan Reservoir. In turn, Newlands Reclamation Project senior water rights holders would be entitled to divert Truckee River surface water to compensate for insufficient flows from the Carson River. This water diversion would decrease the Truckee River's flow into Pyramid Lake, thus affecting the Tribe's interests.

In Ruling 5823, the State Engineer rejected both Churchill County's and the Tribe's protests and granted all pending applications.

B.

Churchill County and the Tribe appealed, invoking NRS 533.450(1), which reads in pertinent part as follows:

Any person feeling aggrieved by any order or decision of the State Engineer, acting in person or through the assistants of the State Engineer or the water commissioner, affecting the person's interests, when the order or decision relates to the administration of determined rights or is made pursuant to NRS 533.270 to 533.445, inclusive, or NRS 533.481, 534.193, 535.200 or 536.200, may have the same reviewed by a proceeding for that purpose, insofar as may be in the nature of an appeal, which must be initiated in the proper court of the county in which the matters affected or a portion thereof are situated, but on stream systems where a decree of court has been entered, the action must be initiated in the court that entered the decree.

Deeming themselves “aggrieved” and the “matters affected or a portion thereof” to be situate in Churchill County, the County and the Tribe filed their appeals in the Third Judicial District Court in Churchill County. In addition, the Tribe filed a separate appeal in the federal court that had issued the decree governing use of Carson River water, United States v. Alpine Land & Reservoir Co., 503 F.Supp. 877, 879–81 (D.Nev.1980), aff'd as modified,697 F.2d 851 (9th Cir.1983) (the Alpine decree), relying on the clause of exception in NRS 533.450(1) (“but on stream systems where a decree of court has been entered, the action must be initiated in the court that entered the decree”).¹

The State Engineer responded to the Third Judicial District Court appeals with a demand to change venue from Churchill to Lyon County. At the time, the Third Judicial District comprised both Churchill and Lyon Counties. In practical terms, therefore, all the State Engineer sought was an intradistrict change of venue, from one county court to another, within the same judicial district.² Respondents Aspen Creek, LLC, and Dayton Valley Investors, LLC (collectively, Aspen Creek), went further, filing a motion to dismiss that challenged subject matter jurisdiction. Although some of the other respondents joined Aspen Creek's motion to dismiss, the State Engineer did not, standing on his venue challenge.

The motions to change venue and to dismiss both argued that, under NRS 533.450(1), “the proper court of the county in which the matters affected or a portion thereof are situated” was the Third Judicial District Court in Lyon County, because that is where the applicants' water rights are or would be located. Not surprisingly, Churchill County and the Tribe disagreed. In their view, NRS 533.450(1) by its terms (“or a portion thereof ...”) contemplates more than one possible forum and, in using the phrase “matters affected,” refers not just to an applicant's interests but to a protester's as well. Thus, the district courts in either Churchill County or Lyon County could entertain their appeals.

Similar arguments were made to the Alpine decree court on motions to dismiss the Tribe's parallel federal appeal. The Alpine decree court ruled before the district court in this case did. United States v. Alpine Land & Reservoir Co., Case Subfile No. 3:73–cv–00203–LDG, Equity No. 3:73–cv–00183–LDG (D.Nev. July 3, 2008) ( Alpine 2008 order). It accepted arguendo (as do we) that Ruling 5823 affected the Tribe's rights in the Truckee River, as adjudicated in United States v. Orr Water Ditch Co., Equity No. A–3 (D.Nev.1944) (the Orr Ditch decree), due to the alleged impact on the surface waters of the Carson River outlined above. Nonetheless, the Alpine decree court rejected the Tribe's argument that this qualified its appeal under the clause in NRS 533.450(1) providing, “but on stream systems where a decree of court has been entered, the action must be initiated in the court that entered the decree.” According to the Alpine decree court, alleging that a State Engineer's ruling affects federally decreed water rights does not thereby “confer jurisdiction” on the decree court. Alpine 2008 Order, slip op. at 3. “Rather,” the court continued, NRS 533.450(1) reposes exclusive jurisdiction in the court where the applicant's actual or proposed water rights are located, meaning in the context of Ruling 5823 “that such jurisdiction is in the proper court in Lyon County, as that is the county in which the Dayton Valley Hydrographic Basin is located.” Id. Accordingly, the Alpine decree court dismissed the Tribe's appeal of Ruling 5823.

The district court in this case accepted Aspen Creek's invitation to take judicial notice of the Alpine 2008 order. It “agree[d] with the Alpine court that it is the location of the water rights of the applicant that determines which court has jurisdiction to hear an appeal from a State Engineer's decision.” Given the admitted fact that “[t]he rights granted or altered in State Engineer Ruling 5823 are located in Lyon County,” it concluded that it did not have “subject matter jurisdiction over th[e] appeal.” Lacking subject matter jurisdiction, the district court deemed itself...