On April 19, 2022, Clark County District Court Judge Bita Yeager issued a decision vacating the Nevada State Engineer’s (State Engineer) June 15, 2020, Order 1309. Under Order 1309, the State Engineer merged seven independently designated hydrographic basins into one basin known as the Lower White River Flow System (LWRFS) to be conjunctively managed. The State Engineer did so based on scientific evidence as to the previously delineated basins’ hydrological connection. In creating a “superbasin” that would be conjunctively managed, however, the State Engineer effectively undermined the priority of senior water right holders within the individual basins. The court found that the State Engineer not only had no statutory authority to create the LWRFS superbasin and lacked the authority to conjunctively manage the superbasin, but in the administrative processes resulting in Order 1309, had also violated petitioners’, or water right holders, due process rights.
Background
Order 1309 was the result of an evidentiary proceeding initiated by the State Engineer’s Jan. 11, 2019, Interim Order 1303. Interim Order 1303 invited interested stakeholders to submit evidence related to four questions. Following the stakeholders’ submittal of initial reports and rebuttal reports, the State Engineer held a two-week evidentiary hearing in September and October 2019 for the presentation and cross-examination of the stakeholders’ witnesses. In Order 1309, the State Engineer combined seven previously delineated hydrographic basins into the new LWRFS and set a cap on groundwater extractions from the LWRFS of no more than 8,000 acre-feet per year.
Lack of Statutory Authority
Judge Yeager found that the Nevada Revised Statutes do not provide the State Engineer with the authority to create or conjunctively manage the LWRFS superbasin. The court found that the hydrographic basins upon which Nevada groundwater rights have been based for at least 50 years are “immutable administrative units” regardless of whether the unit accurately reflects a particular water source, or physical groundwater basin. As such, the hydrographic basins are legal constructs first that are then subsequently defined by a geographic boundary, and not the other way around, as was the effect of Order 1309. These basins cannot be combined into a single basin for joint administration. Regardless of whether the best available science points to hydrological connectivity between the seven basins, science cannot be “the sole governing principle to dictate the Nevada State Engineer’s decision.” The court found that this would create a “slippery slope in the changes that could be made in the boundaries of the basins and how they are managed.” By redefining and combining seven established basins, the State Engineer essentially stripped senior right holders in each of the seven basins of their priority rights and rendered certain water rights valueless because of the State Engineer’s restrictions on pumping in the entire LWRFS. Rather than a water right holder’s priority relating to fellow right holders in the historically designated basins, under Order 1309, water right holders’ priorities would be based upon the priority of all right holders within the new LWRFS superbasin.
Prior appropriation, or the idea of “first in time, first in right,” is a fundamental principle of Nevada water law where the value of the water right comes from the priority and is considered a type of property. If the State Engineer was able to change the boundaries of existing basins solely on scientific advancements, water right holders would be insecure in their priority. The court found that the State Engineer does not have the authority to alter or reorder priority rights of water right holders through conjunctive management. As such, Order 1309 was found to violate the prior appropriation doctrine.
Violations of Due Process
The court also found that the State Engineer had violated petitioners’ constitutional due process rights by failing to appropriately notify the petitioners or provide an opportunity to comment on Order 1309’s potential policy changes. The Nevada Constitution protects against the deprivation of property without due process. Nevada water rights are considered real property interests. Water right holders were not provided notice that Order 1309 would result in a management protocol for the LWRFS superbasin and thus did not have an opportunity to comment on the potential conjunctive or joint administration of LWRFS. Petitioners did not have the opportunity to, and were actively discouraged from, addressing policy issues related to the management of LWRFS. Judge Yeager found this to further compound the due process violation. The State Engineer also failed to disclose the criteria he would use to evaluate the hydrologic connectivity of the basins and to determine the new consolidated basin boundary, which afforded petitioners no opportunity to directly address the appropriateness of these criteria.
Because Judge Yeager found that the State Engineer exceeded his statutory authority and violated the petitioners’ rights to due process, the court did not make a finding as to whether Order 1309's factual findings, i.e., hydrologic connectivity of the basins and the maximum quantity that might be annually pumped from the LWRFS, were supported by substantial evidence. The court's vacating Order 1309 means that the seven basins that made up the LWRFS will continue to be managed individually and the priority of water right holders in each respective basin will be maintained.
At this time, the State Engineer has not indicated whether he will appeal Judge Yeager’s ruling or whether he will develop a mechanism to manage the seven individual basins in a manner that accounts for the scientific evidence upon which he relied in Order 1309.
This document is intended to provide you with general information regarding a court decision striking down the Nevada State Engineer's Order 1309. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.