Fort Vannoy Irr. v. Water Resources Comm.

• Decision Date: 11 July 2007
• Docket Number: A130508.,T8366.
• Citation: 214 Or. App. 88,162 P.3d 1066
• Parties: FORT VANNOY IRRIGATION DISTRICT and Herman Baertschiger, Jr., Petitioners, v. WATER RESOURCES COMMISSION and Ken-Wal Farms, Inc., aka Fort Vannoy Farms, Inc., Respondents.
• Court: Oregon Court of Appeals

162 P.3d 1066

214 Or. App. 88

FORT VANNOY IRRIGATION DISTRICT and Herman Baertschiger, Jr., Petitioners, v. WATER RESOURCES COMMISSION and Ken-Wal Farms, Inc., aka Fort Vannoy Farms, Inc., Respondents.

T8366.

A130508.

Court of Appeals of Oregon.

Argued and Submitted April 12, 2007.

Decided July 11, 2007.

Emil R. Berg argued the cause and filed the briefs for petitioners.

Denise G. Fjordbeck argued the cause for respondent Water Resources Commission. With her on the brief were Hardy Myers, Attorney General, Mary H. Williams, Solicitor General, and Brendan C. Dunn, Assistant Attorney General.

Ross Day, Portland, argued the cause for respondent Ken-Wal Farms, Inc. With him on the brief was Oregonians In Action Legal Center.

Before HASELTON, Presiding Judge, and ARMSTRONG and ROSENBLUM, Judges.

ARMSTRONG, J.

This is a petition for review of a final order of the Water Resources Commission (the commission) upholding the Water Resources Department's approval of the application of Ken-Wal Farms, Inc. (applicant). Applicant sought to modify the water rights of five water rights certificates for irrigation of applicant's farm from the Rogue River and its tributaries by consolidating seven points of water diversion within the Fort Vannoy Irrigation District (the district) into two points of diversion outside of the district's control. The district contends that the commission erred in approving the application and seeks a reversal and remand with instructions to disapprove the application. We review pursuant to ORS 183.482 and reverse and remand the commission's order.

Applicant owns property within the district just outside of Grants Pass and draws water for irrigation from the Rogue River and its tributary, Vannoy Creek. Applicant filed an application with the department to consolidate seven water diversion points within the district's system to two diversion points on applicant's land that are beyond the district's control. Applicant owns the land appurtenant to the diversion points that it proposed to change and three of the five water right certificates (certificates 3247, 15340, and 2803). The two remaining certificates (8942 and 8943) are in the district's name, and the points of diversion relating to those certificates are the subject of this petition. The district did not consent to or join in the transfer request. There are no allegations that the proposed changes will result in injury to existing water rights. The department approved applicant's request. The district objected to the proposed changes, asserting that, as owner of certificates 8942 and 8943, it is the holder of the water use subject to transfer under those certificates and a necessary party to any application regarding a change in diversion points under those certificates.

An administrative law judge (ALJ) from the Office of Administrative Hearings conducted the hearing and prepared a proposed order under OAR 137-003-0580(6), rejecting the district's challenge.¹

In its final order, the commission also rejected the district's challenge. The commission acknowledged that "[t]he issue of ownership of a water right within an irrigation district is a recurring question." It determined, however, that it did not need to decide whether either the district or applicant "owns" the water rights subject to the district's two certificates. Rather, the commission reasoned, to resolve the question of the necessity of the district's approval, it was necessary only to refer to the statutes and administrative rule setting forth the requirements for a change in a diversion point, and, the commission concluded, those provisions do not require a water district's approval of a change in a diversion point.

ORS 540.510 provides that the "holder of any water use subject to transfer" may apply to the department to transfer or change the use, place of use, or diversion point of the water. Under ORS 540.505(4), "water use subject to transfer"

"means water use established by:

"(a) An adjudication under ORS chapter 539 as evidenced by a court decree;

"(b) A water right certificate;

"(c) A water use permit for which a request for issuance of a water right certificate under ORS 537.250 has been received and approved by the Water Resources Commission under ORS 537.250; or

"(d) A transfer application for which an order approving the change has been issued under ORS 540.530 and for which proper proof of completion of the change has been filed with the Water Resources Commission."

ORS 540.520(1) provides that "whenever the holder of a water use subject to transfer" desires to apply for a transfer, the holder shall submit an application to the department. ORS 540.520(2)(a) provides that the application shall include:

"(a) The name of the owner;

"(b) The previous use of the water;

"(c) A description of the premises upon which the water is used;

"(d) A description of the premises upon which it is proposed to use the water;

"(e) The use which is proposed to be made of the water;

"(f) The reasons for making the proposed change; and

"(g) Evidence that the water has been used over the past five years according to the terms and conditions of the owner's water right certificate or that the water right is not subject to forfeiture under ORS 540.610."

The department's applicable administrative rule, OAR 690-015-0060(13) (1999), provided, additionally, that the application shall include the

"[n]ame of deeded owner of the land to which the water right is appurtenant. A copy of the recorded deed to the subject lands shall accompany the application. If the applicant is not the deeded owner, the applicant shall provide a notarized and signed statement from the deeded owner authorizing the change."

If the proposed change can be effected without injury to existing water rights, the commission is required to approve the transfer and fix a time limit within which the approved changes must be completed. ORS 540.530(1).

The commission noted that applicant is the owner of the land appurtenant to the water rights under certificates 8942 and 8943. Although the commission did not address the issue,² it appears to have reasoned that, as the owner of the appurtenant land, applicant is the "holder of a water use subject to transfer" under ORS 540.520 and entitled to seek a change in the diversion point for the water use. Explaining that there is no requirement in ORS 540.510, ORS 540.520, or OAR 690-015-0060 for an irrigation district's consent to a transfer of a diversion point within the district, the commission concluded that the district's possible ownership of the water rights under certificates 8942 and 8943 is immaterial, because, under the statute and rule, only the appurtenant land owner, and not the irrigation district, must consent to a change in a diversion point:

"[U]nder the applicable rules and statutes the only permission that is required is that of the owner of the land to which the water right is appurtenant. There is no support in the text and context of the rules and statutes for [the district's] claim that an applicant within an irrigation District who applies to the Department for a change in point of diversion must also receive the permission of the irrigation district. To the contrary, the statutory scheme specifically identifies when and where an irrigation district is authorized to act on transfers and when district permission to make a transfer is necessary, highlighting the absence of such a requirement for a standard transfer application under ORS 540.520.

"Throughout ORS chapter 540 the legislature provided for district participation in and authorization of specific types of transfers. For example, districts are authorized to initiate permanent or temporary changes of place of use within district boundaries, but a district must obtain the landowner's consent to the transfer. ORS 540.570 to ORS 540.580. Where a landowner has not used a water right for four years, a district, after the fourth year of non use, may petition to transfer the water right to a different place of use within the district boundaries. ORS 540.572. If an owner wants to temporarily transfer a water right to alternate acreage within a district, the owner must obtain the district's consent. ORS 540.570(2).

"The above statutes demonstrate that the legislature recognized a district's interest in moving water around within a district's boundaries and provided for district participation and authorization for transfers to alternate acreage within the district boundaries. There are no provisions for district authorization of other types of transfers initiated by district landowner/patrons with appurtenant water rights. The specificity with which irrigation district participation in transfers is set out, clearly indicates that if the legislature had intended to require irrigation district approval of standard transfer applications it would have done so. To read a requirement of irrigation district approval into a transfer application under ORS 540.520 would be contrary to the legislative intent to limit district participation, as evidenced by the statutory text and context, and contrary to the directive in ORS 174.010 not to insert what has been omitted."

In reasoning that the provisions for transfer applications do not require district authorization, the commission sidestepped the question whether the district itself, as the owner of the certificates, is the entity that must seek a transfer of a diversion point under those certificates.

The district seeks judicial review and continues to assert that an irrigation district in whose name a water right certificate is issued is both the owner and holder of the water use and the entity that must seek a transfer of that water use under ORS 540.510. The district claims that, as the owner of the water rights granted by certificates 8942 and 8943, it is the only entity entitled to seek a change in the diversion point identified in those...