Lu Ranching Co. v. US

• Decision Date: 03 April 2003
• Docket Number: No. 27599.,27599.
• Citation: 138 Idaho 606,67 P.3d 85
• Parties: In re Snake River Basin Adjudication Case No. 39576. LU RANCHING CO., Movant-Appellant, v. UNITED STATES of America and State of Idaho, Participants-Respondents.
• Court: Idaho Supreme Court

67 P.3d 85

138 Idaho 606

In re Snake River Basin Adjudication Case No. 39576.

LU RANCHING CO., Movant-Appellant, v. UNITED STATES of America and State of Idaho, Participants-Respondents.

No. 27599.

Supreme Court of Idaho, Boise, November 2002 Term.

April 3, 2003.

McQuaid, Meltzer, Bedford & Van Zandt, LLP, San Francisco, California, for appellant. Elizabeth P. Ewens argued.

U.S. Department of Justice, Washington, for respondent United States of America. William B. Lazarus argued.

Hon. Alan G. Lance, Attorney General, Boise, for respondent State of Idaho. Harriett A. Hensley argued.

SCHROEDER, Justice.

The LU Ranching Co. (LU Ranching) challenges the procedures for giving notice to interested parties involved in the Snake River Basin Adjudication (SRBA), maintaining that they violate the minimum due process requirements established by Section I of the Fourteenth Amendment of the United States Constitution and Article I of the Idaho State Constitution. In the alternative LU Ranching requests this Court to grant it relief from default judgments entered against it. The United States of America (United States) and the State of Idaho (State) stipulate to the facts but oppose LU Ranching's legal positions.

I. BACKGROUND AND PRIOR PROCEEDINGS

LU Ranching is a family-owned cattle operation in Southern Idaho and is the preference holder and grazing user of the Cliffs, South Mountain, Cow Creek Individual, McKay FFR, Chimney Pot FFR, and Lowry FFR federally administrated grazing allotments. In 1992 LU Ranching filed 17 state-law based water right claims for domestic/de minimis stock water rights in Basin 55—land which LU Ranching uses pursuant to a Bureau of Land Management permit and which is within Idaho Department of Water Resource Area 6. In 1993 the United States also filed de minimis stock water rights claims in Basin 55.

In 1997 pursuant to Idaho Code §§ 42-1409, 42-1411, 42-1412, an investigator for the Idaho Department of Water Resources (IDWR) reviewed water rights claims and prepared a Director's Report for Reporting Area 6 and all the state-based domestic and stock water claims of LU Ranching and the United States. The report detailed and listed all existing and applied for water rights claims. On July 30, 1997, LU Ranching was personally served by first class mail with a letter of notice entitled: Notice of Director's Report Reporting Area 6 (IDWR Basins 51, 55, and 61) for Small Domestic and Stock Water Rights. The notice stated in relevant part:

A complete copy of the Director's Report, listing all of these domestic and stock water rights claimed under both state and federal law, is available at the SRBA courthouse in Twin Falls and the locations listed on the third page of this notice. Copies of the report can be made, but you may be charged for copying and mailing.

....

The complete Director's Report contains recommendations to the SRBA Court on your water right and all other small domestic and stock water rights in your area. The Court will decide how it will decree all water rights. The Director's recommendations in the full report are listed in two sections of the report:

....

Also included in the complete Director's Report are descriptions of the United States' claims for domestic and stockwater rights under federal law. The Director does not investigate these claims and makes no recommendations whether they should be granted or not. Sometimes the United States claims one right under both federal and state law. These are called "dual based" claims.

If you want to review someone else's water right you need to look at the complete Director's Report which is available at the SRBA courthouse in Twin Falls and the locations listed on the third page of this notice. Copies of the report can be made, but you may be charged for copying and mailing.

....

If you disagree with any element of the recommendation for your water right or anyone else's water right and want to be heard in court, file an objection with the SRBA Court.

The notice stated that all objections to water rights as listed in the report must be received by the SRBA court before December 5, 1997, which gave LU Ranching 120 days within which to file. The notice also stated that IDWR would file its recommendation to the SRBA court after that deadline, and that the SRBA court would issue partial decrees on uncontested claims after February 3, 1998. Further, the notice stated that a notice would be sent on court dates for objections that were filed, but that no other notices would be forthcoming on any other adjudications or decisions. The notice also provided the following information:

If you have questions about the SRBA, public information brochures are available at any IDWR office. Maps and aerial photography of this reporting area, as well as assistance in using the maps and the photography, are available at the two IDWR offices in Boise. You are also welcome to call IDWR at any of its offices on the SRBA Court. You may also want to contact an attorney to assist you.

The notice set forth the addresses and phone number of the SRBA court and the various Department of Water Resources offices. LU Ranching was not informed of any actual conflict to its water claims, except as it would find if it reviewed the Director's Report. This procedure tracks exactly the requirements set forth in I.C. §§ 42-1411(5) and (6) and 42-1412. On August 7, 1997, the SRBA court published its docket sheet informing participants that the Director's Report had been filed. In December of 1997 the United States, under I.C. § 42-1412 and AO1, filed timely objections to LU Ranching's claims in Basin 55, asserting that the United States was the rightful owner of those lands and that LU Ranching had no rightful claim to the water. LU Ranching neither filed a timely counter objection to the United States' claims in Basin 55 nor a response to the United States' objections to LU Ranching's claims. Only in March of 2000 did LU Ranching examine the Director's Report to identify stock claims filed by the United States. Meanwhile, in April of 2000, the SRBA had completed entering partial decrees on Basin 55, granting the United States its beneficial use claims and reserved water rights claims.

The State of Idaho did file timely objections to the United States' water claims in Basin 55. They were adjudicated and settled. The State of Idaho appears here solely to defend the procedures used by the SRBA. In August of 2000 LU Ranching filed a motion in the SRBA to set aside these partial decrees on the basis of mistake, inadvertence, surprise, and/or excusable neglect pursuant to rule 60(b)(1) of the Idaho Rules of Civil Procedure and on the basis that the notice LU Ranching received did not meet the minimum requirements for due process as mandated by the Idaho and United States Constitutions. Both arguments were rejected by the SRBA court. LU Ranching filed its appeal.

II. LU RANCHING'S DUE PROCESS RIGHTS WERE NOT VIOLATED

A. Standard of Review

LU Ranching is challenging the constitutionality of Idaho Code §§ 42-1409, 42-1411, 42-1412 and Regulation AO1. Such a challenge is a question of law over which this Court exercises free review. Goodman Oil Co. v. Idaho State Tax Comm'n, 136 Idaho 53, 55, 28 P.3d 996, 998 (2001). The challenge must show the statute to be unconstitutional as a whole, without any valid application. State v. Newman, 108 Idaho 5, 11 n. 7, 696 P.2d 856, 862 n. 7 (1985). Factors to be considered in determining the adequacy of process are the importance of the private interest at stake, the risk of an erroneous deprivation of rights given the processes at hand and the probable value, if any, of additional or substitute procedural safeguards, and the government's interest, "including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail." Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903, 47 L.Ed.2d 18, 33 (1976).

B. Due Process

Some of the factors in Mathews v. Eldridge are apparent. The private interest at stake is great. The right to water is a permanent concern to farmers, ranchers and other users. The importance of the government's interest is great, as the steward of a finite resource that is the lifeblood for much of the state's economy and quality of life. The other elements to be considered require more analysis.

LU Ranching contends that requiring parties to sift the Director's Reports so that they notify themselves as to claims potentially or actually adverse to their own is too onerous and risks the deprivation of water rights, maintaining that water right claimants who object to or knowingly file conflicting claims against other known and identified water claimants must personally serve such parties when pursuing adverse decrees. LU Ranching relies upon Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983) and Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), which stand for the proposition that minimum due process requires notice reasonably calculated under all the circumstances to apprise interested parties of the pendency of the action and affords them an opportunity to present their objections. LU Ranching also cites Bear Lake County v. Budge, 9 Idaho 703, 75 P. 614 (1904), which was a water law case that held reasonable service in that case was personal service when the defendants were known and located.

Mullane concerned an adjudication of a common trust fund in which the only notice given of the commencement of the action was notice by publication in a newspaper, as directed by New York law. Mullane, 339 U.S. at 307-12, 70 S.Ct. at 654-56, 94 L.Ed. at 867-72. This was held to be adequate in regards to all beneficiaries whose whereabouts could not be ascertained but inadequate for beneficiaries whose places of residency were known by the special guardian of the...