In re Big Horn River System

• Decision Date: 10 March 2003
• Docket Number: No. 02-239.,02-239.
• Parties: In re The General Adjudication of All Rights to Use Water in the BIG HORN RIVER SYSTEM and All Other Sources, State of Wyoming Phase III. John Max Stutzman and Roberta Lee Stutzman, Appellants (Petitioners/Intervenors).
• Court: Wyoming Supreme Court

85 P.3d 981

2004 WY 21

In re The General Adjudication of All Rights to Use Water in the BIG HORN RIVER SYSTEM and All Other Sources, State of Wyoming Phase III.

John Max Stutzman and Roberta Lee Stutzman, Appellants (Petitioners/Intervenors).

No. 02-239.

Supreme Court of Wyoming.

March 10, 2003.

Representing Appellant: S. Joseph Darrah and Christopher M. Brown of Darrah & Darrah, P.C., Powell, Wyoming. Argument by Mr. Darrah.

Representing the State of Wyoming: Patrick J. Crank, Attorney General; Jenifer E. Scoggin¹, Assistant Attorney General; and Keith S. Burron, Special Assistant Attorney General, of Associated Legal Group, LLC. Argument by Ms. Scoggin.

Representing the United States: Thomas L. Sansonetti, Assistant Attorney General, Environment & Natural Resources Division, and John L. Smeltzer, Attorney, Department of Justice, Washington, D.C.; Matthew H. Mead, United States Attorney, and Carol Statkus, Assistant United States Attorney, Cheyenne, Wyoming. Argument by Mr. Smeltzer.

Before LEHMAN, KITE, and VOIGT, JJ.; BURKE and KAUTZ, D.JJ.

KITE, Justice.

[¶ 1] John Max Stutzman and Roberta Lee Stutzman, individual irrigators within the Shoshone Reclamation Project, claimed rights to use a proportionate share of the water stored in the Buffalo Bill Reservoir, which is owned and operated by the federal Bureau of Reclamation, and sought to have those rights adjudicated in the Big Horn River general adjudication. We hold the district court properly dismissed the Stutzmans' claims as untimely.

ISSUES

[¶ 2] The Stutzmans present the following issues:

1. Whether the Petition for Intervention requests an adjudication of contract claims or asserts a claim for the quantification, prioritization, and recognition of vested property rights?

2. Whether the district court erred in finding that the Appellants' request for adjudication of the right to beneficially use water stored in Buffalo Bill Reservoir was barred under the doctrine of res judicata?

3. Whether the doctrine of laches was improperly applied to a W.R.C.P. § 12(b)(6) Motion to Dismiss Appellants' Petition For Intervention for the purposes of adjudicating the Appellants' right to beneficially use stored water when no evidence was presented to support the doctrine of laches by the district court?

4. Whether Appellants' constitutional right to due process of law was violated when the district court failed to recognize Appellants' vested water rights which were purchased and conveyed from the United States by the issuance of patents as well as the issuance of Buffalo Bill Reservoir permits by the State Engineer containing conditions that the stored water was to be used on Shoshone Reclamation Project lands?

[¶ 3] Appellee, state of Wyoming, presents the following issues:

1. Whether the District Court correctly determined that all rights to use water from Buffalo Bill Reservoir were fully adjudicated in this general adjudication in 1985 and therefore Appellants' efforts to revisit the adjudication of those rights are barred.

2. Whether the District Court correctly determined that Appellants' claims based on federal water right applications, patents and contracts are not properly before the court in this general adjudication.

3. Whether Appellants have been denied due process in the adjudication of rights to use water in Buffalo Bill Reservoir.

[¶ 4] Appellee, United States of America, presents the following issues:

1. Whether the district court properly denied Appellants' motion to intervene on the grounds that Appellants seek to litigate a contract dispute with the United States that is not within the district court's jurisdiction under this general stream adjudication; and

2. Whether the district court properly denied Appellants' motion to intervene on the basis of statutory limitations and laches.

FACTS

[¶ 5] This appeal arises out of the continuing, comprehensive adjudication of the water rights in the Big Horn River system initiated in 1977 pursuant to Wyo. Stat. Ann. § 1-37-106 (LexisNexis 2003) and the McCarran Amendment, 43 U.S.C. § 666 (1976). The adjudication's primary purpose was to determine what water rights the federal government reserved for the Wind River Indian Reservation's benefit. See In re General Adjudication of All Rights to Use Water in the Big Horn River System, 899 P.2d 848, 850 (Wyo.1995)

(Big Horn V). We have summarized the vast factual and legal background of this litigation in prior appeals to this Court. See In re General Adjudication of All Rights to Use Water in the Big Horn River System, 803 P.2d 61 (Wyo.1990)

(Big Horn II); In re General Adjudication of All Rights to Use Water in the Big Horn River System, 835 P.2d 273 (Wyo.1992); In re General Adjudication of All Rights to Use Water in the Big Horn River System, 753 P.2d 76, 83-86 (Wyo.1988),

cert. granted in part, 488 U.S. 1040, 109 S.Ct. 863, 102 L.Ed.2d 987, aff'd sub nom., Wyoming v. United States, 492 U.S. 406, 109 S.Ct. 2994, 106 L.Ed.2d 342 (1989) (Big Horn I). The case as a whole was divided into three phases: Phase I, Indian reserved water rights; Phase II, non-Indian federal reserved water rights; and Phase III, state water rights evidenced by a permit or certificate. Big Horn I,

753 P.2d at 85.

[¶ 6] This appeal falls in Phase III of the adjudication. The Stutzmans' farmland is located within the Shoshone Reclamation Project in Park County, Wyoming. Specifically, the Stutzman property is located in the Garland Division of the project, and they are members of the Shoshone Irrigation District. The Shoshone Reclamation Project is a federal reclamation project constructed and operated by the federal Bureau of Reclamation (BOR) pursuant to the Reclamation Act of 1902, 43 U.S.C. § 371 et seq., (as amended), and governing regulations. See, e.g., 43 C.F.R. § 426.1 et seq. The project lies on the Shoshone River, a tributary of the Big Horn River, and its centerpieces are the Buffalo Bill Dam and Reservoir, approximately 6 miles west (upstream) of Cody. Through the operation of the reservoir, the BOR provides water for irrigation, power generation, municipal supply, recreation, and other beneficial uses. With respect to irrigation, the BOR provides reservoir water to four irrigation districts—the Shoshone, Deaver, Willwood, and Heart Mountain—under contracts with each district. The irrigation districts, in turn, supply water under terms and conditions set out in contracts, to individual users like the Stutzmans.

[¶ 7] The Shoshone Reclamation Project dates back to 1899. In that year, the state of Wyoming issued a direct-flow permit (Permit 2111) to William "Buffalo Bill" Cody and Nate Salisbury, authorizing the diversion of Shoshone River water through the "Cody and Salisbury Canal" for the irrigation of a 60,000-acre tract of land adjacent to the Shoshone River that the United States had segregated to the state. See United States v. Ide, 277 F. 373, 375 (8th Cir.1921). After Congress enacted the Reclamation Act in 1902, Wyoming relinquished the segregated land back to the United States—along with the rights granted in Permit 2111—to allow the United States to construct a reclamation project on the land. Id. Section 8 of the Act provides, "Nothing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this Act, shall proceed in conformity with such (state water) laws." The courts have consistently noted that Section 8 imposed "upon the United States ... a duty to obtain water rights for reclamation projects." Nevada v. United States, 463 U.S. 110, 142, 103 S.Ct. 2906, 77 L.Ed.2d 509 (1983). Consistent with that requirement, in 1904, the United States applied for a permit (Permit 492R) to construct a dam and reservoir on the Shoshone River. In 1905, the United States applied for a second permit (Permit 751R) to allow enlargement of the dam and reservoir described in the prior permit.

[¶ 8] The state engineer approved both permits. In approving Permit 492R with a priority date of 1904, he authorized the construction of a reservoir to hold 159,000 acre feet of water and observed that "[t]he Water to be stored in the reservoir herein described [is] to be used on the lands described in [an] enlargement of permit 2111." In approving Permit 751R with a priority date of 1905, the state engineer authorized an increase in storage capacity to 456,600 acre feet with no reference to the lands upon which the water would be used. Both permits provided that the proposed reservoir was to store water for "irrigation, the development of power for irrigation purposes, domestic purposes, and other beneficial uses." By 1910, the United States completed the initial construction of the dam and reservoir under the authority granted in Permits 492R and 751R.

[¶ 9] In that same year, the United States filed an application for a permit (Permit 10138) to divert water from the Shoshone River via the Corbett Dam and Garland and Frannie Canals for the irrigation of 90,000 acres of land within the Shoshone Reclamation Project, including certain lands not designated in Permit 2111. This permit, approved by the state engineer as a "secondary" permit, stated that the source of the water supply was the Shoshone River supplemented by the storage in Shoshone (now Buffalo Bill) Reservoir. Under the statutes effective at that time, permits for the application of water impounded under reservoir permits were required and were deemed "secondary" permits. W.S.C. § 744 (1910). The United States completed construction of the bulk of the Garland Division by 1917. See United States v. Ickes, 70 F.2d 771, 772 (D.C.Cir.1934)

(describing project). Thereafter, in 1920, the United States filed an application for another secondary...