Johnston v. Davis

• Citation: 500 F. Supp. 1323
• Decision Date: 03 November 1980
• Docket Number: No. C78-173B.,C78-173B.
• Parties: Matt JOHNSTON, Mike Johnston, Associated Enterprises, Inc., a Wyoming Corporation, and Bard Ranch Company, a Wyoming Corporation, Plaintiffs, v. R. M. DAVIS, Administrator of the Soil Conservation Service, United States Department of Agriculture, James Mitchell, Administrator for Watersheds of the Soil Conservation Service, United States Department of Agriculture, Frank Dixon, Soil Conservation Service State Conservationist for the State of Wyoming, United States Department of Agriculture, Ronnie Clark, Assistant State Conservationist for Water Resources for State of Wyoming, Soil Conservation Service, United States Department of Agriculture, Robert Berguland, Secretary of United States Department of Agriculture, Gordon Cavanaugh, Administrator, Farmers Home Administration, United States Department of Agriculture, Clyde Teague, Chief of Community Programs and Business and Industry for Farmers Home Administration Office in Wyoming, United States Department of Agriculture, Honorable Robert A. Hill, District Judge of the Second Judicial District of the State of Wyoming, Defendants, Toltec Watershed Improvement District, Intervenor.
• Court: U.S. District Court — District of Wyoming

500 F. Supp. 1323

Matt JOHNSTON, Mike Johnston, Associated Enterprises, Inc., a Wyoming Corporation, and Bard Ranch Company, a Wyoming Corporation, Plaintiffs, v. R. M. DAVIS, Administrator of the Soil Conservation Service, United States Department of Agriculture, James Mitchell, Administrator for Watersheds of the Soil Conservation Service, United States Department of Agriculture, Frank Dixon, Soil Conservation Service State Conservationist for the State of Wyoming, United States Department of Agriculture, Ronnie Clark, Assistant State Conservationist for Water Resources for State of Wyoming, Soil Conservation Service, United States Department of Agriculture, Robert Berguland, Secretary of United States Department of Agriculture, Gordon Cavanaugh, Administrator, Farmers Home Administration, United States Department of Agriculture, Clyde Teague, Chief of Community Programs and Business and Industry for Farmers Home Administration Office in Wyoming, United States Department of Agriculture, Honorable Robert A. Hill, District Judge of the Second Judicial District of the State of Wyoming, Defendants, Toltec Watershed Improvement District, Intervenor.

No. C78-173B.

United States District Court, D. Wyoming.

November 3, 1980.

Henry A. Burgess and Kim D. Cannon, Burgess & Davis, Sheridan, Wyo., for plaintiffs.

Charles E. Graves, U.S. Atty., Dist. of Wyoming, Cheyenne, Wyo., for defendants.

MEMORANDUM OPINION AND JUDGMENT

BRIMMER, District Judge.

This action was originally brought by the Plaintiffs, Matt Johnston, Mike Johnston, Associated Enterprises, Inc., a Wyoming corporation, and Bard Ranch Company, a Wyoming corporation, by their attorneys, Henry A. Burgess, Esq. and Kim D. Cannon, Esq., seeking to enjoin the Defendants, R. M. Davis, as Administrator of the Soil Conservation Service of the United States Department of Agriculture, James Mitchell as Administrator for Watersheds of the Soil Conservation Service, Frank Dixon as State Conservationist of the Soil Conservation Service, Ronnie Clark as Assistant State Conservationist of Water Resources for Wyoming Soil Conservation Service, and the Secretary of Agriculture, Administrator of the Farmers Home Administration, and the Chief of Community Programs and Business and Industry in Wyoming, of the Farmers Home Administration, called the "federal defendants" herein and represented by Charles E. Graves, Esq., United States Attorney for Wyoming, from committing federal funds for construction of the Toltec Reservoir or the taking of lands for its construction until an environmental impact statement (EIS) had been prepared and filed. The Court in 1978 required such an environmental impact statement to be prepared. When it was filed February 28, 1980, the federal defendants counterclaimed for a declaratory judgment approving its sufficiency and the declaring that the administrative procedures approving the Toltec Reservoir Project pursuant to the work plan under alternative (a) of the EIS is a reasonable exercise of administrative discretion. The Plaintiffs contend that the final EIS is not in compliance with the requirements of the National Environmental Policy Act (NEPA), principally because the Soil Conservation Service erred in its evaluation of the cost-benefit ratio of the project by using an interest rate of 3¼% in determining that ratio, and because there were no "satisfactory assurances" made in 1969 by the Toltec Watershed Improvement District, which has intervened in the case and represented by Fred W. Phifer, Esq., sufficient to justify that 3¼% interest rate.

This case is the latest effort of the plaintiffs, in a long history of litigation covering more than ten years and in which the parties have been once to the United States Supreme Court,¹ twice to the Wyoming Supreme Court,² and still have another case, a condemnation action, pending in the Wyoming State Court.³ The first case, started in 1970, sought a judgment preventing entry upon plaintiffs' ranch lands upon the ground that the Wyoming statutes creating watershed improvement districts were unconstitutional for offending the "one man, one vote" concept of equal protection under the Wyoming and United States Constitutions. The Wyoming Supreme Court in 1971 and the United States Supreme Court in 1973 held that there was no denial of equal protection. The next case, started in 1974 and decided in 1978, denied relief to the plaintiffs who sought to attack the reservoir storage permit of the improvement district which had been extended by the Wyoming State Engineer because litigation had unavoidably delayed construction and completion of the Toltec Reservoir. The Wyoming Supreme Court held that such litigation constituted good cause for the State Engineer's extension of time for construction of the reservoir. That opinion indicates that the condemnation action has been pending in the District Court of Albany County, Wyoming since October 1, 1974. A hearing on the necessity for the condemnation was held in February 1978 but no order was entered, and by mutual agreement of this Court and the Honorable Robert A. Hill, District Judge to whom that case was assigned, no action would be taken therein during the pendency of this action.

The Toltec Reservoir Project was proposed under Public Law 83-566, as amended (16 U.S.C. §§ 1001-1008), the Watershed Protection and Flood Prevention Act, by a group of landowners who live in the area of the reservoir in Albany County, Wyoming and have organized the Toltec Watershed Improvement District to act as sponsor of the project.

The reservoir project, for storage of 2352 acre feet of water on the North Laramie River, near Garrett, Wyoming, is expected to change 136 acres of irrigated land and 259 acres of rangeland to reservoir, dam, roads, and recreation facilities. (EIS Figure 1, Alternative A). The land to be acquired for the proposed reservoir is presently owned by Plaintiff, Associated Enterprises. In the project area, the streams primarily carry spring runoff, which passes through the area between mid-March and mid-May. If the ranchers want to have water for the summer and fall, they need to develop late storage by construction of a reservoir, and this natural reservoir site is the area's only possible site. (Defendants' Exhibit B). The original reservoir permit from the State Engineer was granted. The EIS states that of 4800 acres of pasture and hayland in the watershed, only 500 acres have a full water supply and the remaining 4300 acres have only 15% of the needed supply.

Although there was a 1912 reservoir permit filing on the site, nothing much was done toward constructing it until 1957 or two or three years thereafter when Glen Dunlap and Merlin Robbins, two of the ranchers in the area, started working to build it. Their efforts included making a filing of their own in 1959 and hiring their own surveyor, but as time went on, they felt the project was too big for them and they asked the Soil Conservation Service to help them (Tr. pp. 48-55). That agency prepared a Watershed Work Plan, dated October 1967, under the authority of the Watershed Protection & Flood Prevention Act (P.L. 566, 83d Cong., 68 Stat. 666), which was authorized on January 26, 1968 and signed by the Laramie River Soil and Water Conservation District on January 26, 1968, by the Toltec Watershed Improvement District on January 25, 1968, and by the Soil Conservation Service on May 26, 1968. That plan proposed construction of a multi-purpose reservoir, water measurement structure and recreation facilities at an installed cost of $643,000.00, with a cost-benefit ratio of 1.6:1.0, for supplemental irrigation water for 1745 acres of cropland, recreation, full utilization of water supplies and flood protection (Plaintiffs' Ex. 1). The Toltec Watershed Improvement District was first organized on January 18, 1968 by the ranchers of the area, except for the Plaintiffs. The referendum of January 26, 1970 (Plaintiffs' Ex. 16) on the proposal to issue bonds for the acquisition of land and construction of the Toltec Reservoir indicates that in that sparsely settled area of Wyoming, there were 6 ranchers with 6040 acres for the proposal and one, presumably the Plaintiffs, with 1040 acres against it. The minutes (Defendants' Ex. Y) indicate that the ranchers interested in the project have numbered between 6 and 8 and constituted a majority of the landowners in the district. It was necessary to reorganize the district in 1969 because of legal disputes in its initial organization, which was done with the petition for its reorganization in February, 1969 (Defendants' Ex. G) and loan applications were submitted for project funding by the Soil Conservation Service and the Farmers Home Administration. The Board of Supervisors of the Laramie Rivers Soil and Water Conservation District, on May 14, 1969 certified to the County Clerk and Secretary of State, pursuant to Section 41-8-110, W.S. 1977 that the Toltec Watershed Improvement District had been created, after a referendum held May 12, 1969, and on December 16, 1969 approved a resolution for a referendum, or issuance of bonds for construction, pursuant to §§ 41-8-114 and 41-8-110, W.S. 1977, notice was posted and published, and was approved by the landowners of the district on January 5, 1970. The State Engineer of Wyoming approved the transfer of the reservoir permit to the district on December 15, 1969, and did not approve a "top filing" on the reservoir site by Associated Enterprises, one of the corporate plaintiffs. The district was notified that the Project Work Plan was approved by the House Public Works Committee July 18, 1968 and by the Senate Public Works Committee September 12, 1968 (Defendants' Ex. D), which held a hearing on that date, in which the project was opposed on behalf of the corporate plaintiffs, Associated Enterprises, and by letter of April 14, 1969 the SCS State Conservationist advised the district that the project had been...