In Re 2007 Admin. of Appropriations

768 N.W.2d 420, 278 Neb. 137
CourtNebraska Supreme Court
DecidedJuly 17, 2009
DocketS-08-823
StatusPublished
Cited by66 cases

This text of 768 N.W.2d 420 (In Re 2007 Admin. of Appropriations) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re 2007 Admin. of Appropriations, 768 N.W.2d 420, 278 Neb. 137 (Neb. 2009).

Opinion

768 N.W.2d 420 (2009)
278 Neb. 137

In re 2007 ADMINISTRATION OF APPROPRIATIONS OF THE WATERS OF THE NIOBRARA RIVER.
Jack Bond and Joe McClaren Ranch, appellants,
v.
Nebraska Public Power District and Department of Natural Resources, appellees.

No. S-08-823.

Supreme Court of Nebraska.

July 17, 2009.

*422 Donald G. Blankenau and Thomas R. Wilmoth, of Husch, Blackwell & Sanders, L.L.P., Lincoln, for appellants.

Jon Bruning, Attorney General, Justin D. Lavene, and Marcus A. Powers for appellee Department of Natural Resources.

Stephen D. Mossman, of Mattson, Ricketts, Davies, Stewart & Calkins, Lincoln, for appellee Nebraska Public Power District.

HEAVICAN, C.J., CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

CONNOLLY, J.

SUMMARY

In this appeal, we address the interplay of preference rights and appropriation rights in a surface water dispute. The Department of Natural Resources (Department) has exclusive original jurisdiction to determine the validity of surface water appropriations.

This appeal presents the issue whether the Department retained jurisdiction over a junior appropriators' challenge to a senior appropriator's right to surface water after the junior appropriators obtained a condemnation award to use the water under their constitutionally superior preference rights.

The Department determined that the condemnation award rendered the appropriation dispute moot and that it lacked jurisdiction for further proceedings. On appeal, however, it has reversed its position and agrees with the junior appropriators. It now argues that the relief requested in the administrative hearing was distinct from the junior appropriators' preference rights. It requests that we remand the cause to it for further proceedings. But the other appellee and senior appropriator, Nebraska Public Power District (NPPD), contends that the Department correctly determined that the case was moot. We hold that the case is not moot.

BACKGROUND

OVERVIEW OF SURFACE WATER RIGHTS

Nebraska's laws governing surface water management, regulation, and allocation present a mosaic of private and public rights. This appeal centers on two of those rights: appropriation rights and preference rights.

*423 An appropriation right is the right to divert unappropriated stream water for beneficial use.[1] Under the prior appropriation system, each appropriator's right to divert unappropriated waters from a stream for a beneficial purpose receives a date of priority. An appropriation's priority date is the date when the Department approves the appropriator's right to divert water.

In a perfect world, there would be sufficient water to satisfy all appropriations for a given stream. But when a stream has insufficient water to satisfy all appropriation rights on it, the appropriator first in time is first in right.[2] That is, a senior appropriator with an earlier priority date has the right to continue diverting water against a junior appropriator with a later appropriation date when both appropriators are using the water for the same purpose.[3] But when the appropriators use the water for different purposes, a junior appropriator may nonetheless have a superior preference right over senior appropriators.

Under the Nebraska Constitution and statutes, when there is insufficient water to satisfy all appropriations, certain water uses take preference over others, despite the appropriators' priority dates.[4] So in times of shortage, aggrieved water users with superior preference rights may exercise their constitutional preference to obtain relief when the prior-appropriation system would otherwise deny such users access to water.[5] Those using the water for domestic purposes have preference over those claiming it for any other purpose.[6] And those using water for agricultural purposes have preference over those using it for manufacturing and power purposes.[7] And so, the junior appropriators' use of the diverted water for agricultural purposes took preference over NPPD's use of the water for power generation.[8]

Simply having a superior preference right, however, does not give that appropriator unfettered use of the water. An appropriator having a superior preference right, but a junior appropriation right, can use the water to the detriment of a senior appropriator having an inferior preference right. But the junior appropriator must pay just compensation to the senior appropriator.[9] So, although NPPD's appropriation right was senior to that of the junior appropriators, the junior appropriators could continue to divert water if they compensated NPPD.[10]

Under Nebraska's statutes, if an irrigation district or appropriator with a superior preference right cannot agree with a power generator on the compensation for use of the water, then the appropriator can commence a condemnation proceeding in county court to determine the compensation.[11] In a condemnation proceeding, the county court appoints appraisers, who then *424 return an award.[12] The compensation award cannot be greater than the cost of replacing the power that the power plant would have generated if it had retained use of the water.[13] For the Department, whether the parties agree on the compensation or the junior appropriators obtain a condemnation award, the result is the same: the Department cannot order the junior appropriators to cease diverting water to satisfy the senior appropriation for the period agreed to by the parties or contained in the condemnation award.

This explanation of the rights at issue and the governing statutory schemes should provide a lens through which to view our analysis.

ADMINISTRATIVE PROCEEDING

Jack Bond and Joe McClaren Ranch (collectively junior appropriators) own real property in Cherry County, Nebraska. In 2006, the Department granted them surface water appropriation rights on the Niobrara River. The rights granted each the ability to divert certain quantities of water from the river for agricultural use.

Near Spencer, Nebraska, downstream from the appropriators' properties, NPPD owns and operates a hydropower facility on the Niobrara River. The hydropower facility has been in operation since 1927. NPPD claims to hold surface water appropriations for the facility, the most recent of which dates to 1942.

In the spring of 2007, NPPD claimed that the Niobrara lacked sufficient water to satisfy all appropriation rights. NPPD requested that the Department administer the river so that it allowed NPPD to use the water according to its senior appropriation right. On May 1, after concluding that there was insufficient water for all appropriations, the Department issued closing notices. The junior appropriators and about 400 other junior water users received closing notices. The closing notices directed them to cease water diversions for the benefit of NPPD's hydropower facility.

The junior appropriators questioned the closing notices. So on May 11, 2007, they filed an administrative hearing request with the Department to determine whether the closing notices were validly issued.[14] The junior appropriators alleged that NPPD may have abandoned its appropriation rights, in whole or in part, and if it had, then no valid appropriation right justified the closing notices.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Anderson Excavating Co. v. City of Omaha
Nebraska Court of Appeals, 2020
Vasquez v. CHI Properties
302 Neb. 742 (Nebraska Supreme Court, 2019)
Vasquez v. Chi Props., LLC
302 Neb. 742 (Nebraska Supreme Court, 2019)
Applied Underwriters v. S.E.B. Servs. of New York
297 Neb. 246 (Nebraska Supreme Court, 2017)
deNourie & Yost Homes v. Frost
893 N.W.2d 669 (Nebraska Supreme Court, 2017)
Jesse B. v. Tylee H.
883 N.W.2d 1 (Nebraska Supreme Court, 2016)
In re Appropriation A-7603
291 Neb. 678 (Nebraska Supreme Court, 2015)
In re Interest of Nathaniel M.
Nebraska Supreme Court, 2014
LaSalle Bank Natl. Assn. v. Brown
2014 Ohio 3261 (Ohio Court of Appeals, 2014)
In re 2007 Appropriations of Niobrara River Waters
288 Neb. 497 (Nebraska Supreme Court, 2014)
CitiMortgage, Inc. v. Patterson
2012 Ohio 5894 (Ohio Court of Appeals, 2012)
Federal Home Loan Mortgage Corp. v. Schwartzwald
2012 Ohio 5017 (Ohio Supreme Court, 2012)
Keating v. Nebraska Public Power District
713 F. Supp. 2d 849 (D. Nebraska, 2010)
Wetovick v. County of Nance
782 N.W.2d 298 (Nebraska Supreme Court, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
768 N.W.2d 420, 278 Neb. 137, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-2007-admin-of-appropriations-neb-2009.