McCook Lake Recreation Area v. Dakota Bay, LLC

2025 S.D. 53

• Court: South Dakota Supreme Court
• Decided: September 24, 2025
• Docket: 30795, 30796, 30822, 30823
• Status: Published

Opinion

#30795, #30796, #30822, #30823-a-JMK 2025 S.D. 53

IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA

****

#30795, #30822

IN THE MATTER OF MCCOOK LAKE RECREATION AREA ASSOCIATION’S PETITION FOR DECLARATORY RULING REGARDING APPROPRIATIVE PERMITS AND SHORELINE ALTERATIONS __________________________________________________________

IN THE MATTER OF WATER PERMIT APPLICATION NO 8744-3, DAKOTA BAY, LLC

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#30796, #30823

IN THE MATTER OF MCCOOK LAKE RECREATION AREA ASSOCIATION’S PETITION FOR DECLARATORY RULING REGARDING APPROPRIATIVE PERMITS AND SHORELINE ALTERATIONS __________________________________________________________

IN THE MATTER OF WATER PERMIT APPLICATION NO 8744-3, DAKOTA BAY, LLC

APPEAL FROM THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUIT UNION COUNTY, SOUTH DAKOTA

ARGUED APRIL 29, 2025 OPINION FILED 09/24/25 ****

THE HONORABLE TAMI BERN Judge

JOHN M. HINES DAVID C. BRIESE of Crary Huff, P.C. Sioux City, Iowa Attorneys for appellant McCook Lake Recreation Area Association.

MARTY J. JACKLEY Attorney General

JENNIFER L. VERLEGER Assistant Attorney General Pierre, South Dakota Attorneys for appellee South Dakota Chief Engineer and Water Rights Program.

STACY R. HEGGE of Gunderson, Palmer, Nelson & Ashmore, LLP Pierre, South Dakota

DEAN A. FANKHAUSER of Tigges, Bottaro & Lessmann, LLP Sioux City, Iowa Attorneys for appellees Dakota Bay, LLC and Michael Chicoine. #30795, #30796, #30822, #30823

KERN, Justice

[¶1.] Dakota Bay, LLC, owns a number of lots adjacent to McCook Lake in

Union County. Michael Chicoine, the owner of Dakota Bay, planned to construct an

1,800-foot-long, 110-foot-wide canal extending across his property to connect to the

southeast corner of McCook Lake. To begin this project, Chicoine first applied to

South Dakota Game Fish and Parks (GF&P) for a shoreline alteration permit.

After consultation with GF&P, Chicoine applied for a permit to appropriate water

from an existing irrigation well on his property (the well permit) to initially fill and

maintain the water level in the canal which would be lined with an 18-inch fat clay

liner. After learning of Chicoine’s plans, the McCook Lake Recreation Area

Association (Association) filed a petition with the South Dakota Department of

Agriculture and Natural Resources (DANR) Water Management Board (Board)

seeking a declaratory ruling that Chicoine and Dakota Bay must apply for and

obtain a permit to appropriate water from McCook Lake before obtaining a

shoreline alteration permit. The Association also opposed Dakota Bay’s application

for the well permit.

[¶2.] After a hearing, the Board granted Chicoine/Dakota Bay’s well permit

application and denied the Association’s petition for declaratory ruling. The

Association appealed both decisions to the circuit court and the court issued a

memorandum opinion affirming the Board’s decisions. The Association appealed

and during oral argument before this Court, the parties agreed that the cases

should now be consolidated. We agree and render a consolidated opinion.

-1- #30795, #30796, #30822, #30823

Factual and Procedural History

[¶3.] McCook Lake is an oxbow of the Missouri River located in Union

County. The soil in several places around the lake is prone to substantial leaching,

causing the lake to lose much of its water throughout the year. To combat the

water loss, the Association holds a water right and water permit to pump water

from the Missouri River into McCook Lake from March 1 through December 1 each

year to raise and maintain its water levels.1 Through a pumping pipeline system

built and maintained by the Association, it can pump up to 12,000 gallons per

minute of water directly from the Missouri River into McCook Lake.

[¶4.] Chicoine submitted an application for a shoreline alteration permit to

GF&P on December 31, 2021, seeking to build a waterway extending south “from

McCook Lake in order to provide lake access to existing residential lots, future lots

to be developed and the potential relocation of the McCook Lake Boat Ramp for the

city of North Sioux City, SD.” The project entailed:

[E]xcavat[ing] a waterway (canal) having a 90-foot wide water surface to allow for 2-way no-wake boat travel to and from residential lots and the proposed relocated boat ramp. Proposed water depth of 8.0 feet with a flat bottom and 2:1 side slopes. Possible private boat docks on both sides leaving a boat travel width of about 46 feet. . . . The excavated area will consist of an 11-foot deep, 110-foot wide canal that is approximately 1,800 feet in length.

1. Water Right No. 5878A-3 authorizes the Association to appropriate 12.89 cubic feet of water per second (cfs) from the Missouri River. Water Permit No. 6479-3 added an additional appropriation of 13.85 cfs for a total appropriation of 26.7 cfs. In addition to the temporal restrictions on the Association’s right to pump, it can only appropriate water if the water level of the Missouri River is sufficiently high and when the water elevation of McCook Lake falls below the ordinary high-water mark of 1,090.3 feet above mean sea level (fmsl). -2- #30795, #30796, #30822, #30823

[¶5.] The Association learned of Chicoine’s shoreline alteration application

and filed a petition for a declaratory ruling with the Board pursuant to SDCL 1-26-

15 and ARSD 74:02:01:46 on March 10, 2023, seeking a declaration “that the

alteration of a public water body by a private party requires a permit for

appropriation of water[.]” In an accompanying letter to the Board, the Association

explained that it believed the construction of the canal would cause higher rates of

leaching and evaporation and that the canal would appropriate water from McCook

Lake “to meet the evaporation and seepage los[s]es from the Canal.” The

Association also asserted that it did not have the funds or pumping capacity to fill

the canal and lake in dry years.

[¶6.] Due to the porous soil type in the area of the proposed canal, GF&P

recommended that Chicoine install a clay liner in the canal to prevent or minimize

water loss. However, GF&P expressed concern that if the water level in the canal

fell and the clay liner was exposed, it could dry out, which could cause the liner to

crack or float. In response, Chicoine proposed that he could use water from an

existing irrigation well on his land to initially fill the canal and maintain a water

level sufficient to prevent the liner from drying out.2 To do so, Chicoine applied for

the well permit (Water Permit Application No. 8744-3) seeking a one-time

appropriation of 20.61 acre-feet of water to initially fill the canal and 7.99 acre-feet

of water annually to ensure the liner remains wet. GF&P decided to hold Chicoine’s

2. Chicoine holds Water Permit No. 6557-3, allowing him to appropriate water from the well to irrigate 60 acres of farmland. GF&P consulted with the DANR Water Rights Program and informed Chicoine that he would need to obtain a new water appropriation permit to use the irrigation well water for a new purpose. -3- #30795, #30796, #30822, #30823

shoreline alteration application in abeyance pending the resolution of his well

permit application.

[¶7.] In support of his application, Chicoine provided the calculations

performed by Dakota Bay’s engineer, Scott Gernhart, detailing the amount of water

needed to fill the canal and the estimated amount of water needed to replace water

lost through evaporation and seepage.3 Gernhart’s explanatory comments also

indicate that he did not account for rainfall in his calculations and that less water

may be required in some years based on the amount of rainfall actually received. At

a flow rate of 1.55 cubic feet per second, Gernhart calculated that the canal could be

filled after 9.3 days of continuous pumping from the irrigation well.

[¶8.] Nakaila Steen, a Natural Resources Engineer with the DANR Water

Rights Program,4 prepared a report assessing the availability of water for the canal.

The irrigation well draws water from the Missouri: Elk Point aquifer which “is

3. Gernhart calculated that it would take 7.90 acre-feet of water to replace water lost to evaporation and .09 acre-feet of water to replace water lost to seepage each year.

4. The Water Rights Program operates under DANR and is responsible for monitoring the state’s surface and ground water levels. See Organization, South Dakota Dep’t of Agriculture & Natural Resources, https://danr.sd.gov/OfficeOfWater/WaterRights/default.aspx (last visited Sep. 16, 2025). In the permitting process, the Water Rights Program helps applicants complete their applications, prepares public notices, and calculates the amount of water available for appropriation. Id. The chief engineer of the Water Rights Program makes a recommendation to approve, defer, or deny each application. Contested cases are set for a hearing before the Board, which is a “quasi-judicial citizen’s board consisting of seven members appointed by the Governor.” Application and Hearing Procedures, South Dakota Dep’t of Agriculture & Natural Resources, https://danr.sd.gov/OfficeOfWater/WaterRights/PermitForms/HearingProced ures.aspx (last visited Sep. 16, 2025); SDCL 1-41-15 (creating the Water Management Board). -4- #30795, #30796, #30822, #30823

hydrologically connected to the Big Sioux, Lower Vermillion-Missouri and Lower

James-Missouri aquifers, and the Big Sioux, James, Missouri, and Vermillion

Rivers[.]” Steen calculated that the aquifer’s annual recharge rate would exceed its

average annual withdrawal rate and, therefore, concluded that “there is a

reasonable probability unappropriated water is available from the Missouri: Elk

Point aquifer for the proposed appropriation.” Steen also evaluated whether the

appropriation requested in Chicoine’s application would unlawfully impair the

rights of other water rights permit holders authorized to draw water from the

Missouri: Elk Point aquifer. After considering the saturated thickness of the

aquifer, the unconfined nature of the aquifer at the well location, and the absence of

prior well interference complaints from other users of the aquifer in the area, Steen

concluded that the proposed appropriation “will not impose unlawful impairments

on existing users with adequate wells.”5

[¶9.] The Chief Engineer of the Water Rights Program, Eric Gronlund,

recommended that the Board approve Application No. 8744-3 subject to the

following qualifications:

1. The well approved under Water Permit No. 8744-3 is located near domestic wells and other wells which may obtain water from the same aquifer. Water withdrawals shall be controlled so there is not a reduction of needed water supplies in adequate domestic wells or in adequate wells having prior water rights.

5. Steen later testified that an “adequate well” is “[a] well that is capable of allowing the inlet of a pump to be placed 20 feet into the saturated aquifer material, and if there is not 20 feet present, as near to the bottom as possible.” -5- #30795, #30796, #30822, #30823

2. The Permit holder shall report to the Chief Engineer annually the amount of water withdrawn from the Missouri: Elk Point aquifer.

3. Water Permit No. 8744-3 authorizes a total diversion of up to 28.6 acre-feet of water the first year when use begins and then up to 7.99 acre-feet annually from the Missouri: Elk Point aquifer.

The Chief Engineer also filed a petition opposing the Association’s request for

declaratory ruling, asserting that the Association’s petition was “an improper

collateral attack on a pending water permit application” and “oppose[d] any

contention that the mere construction of a canal constitutes an appropriation of

water.” Further, the Chief Engineer opposed the Association’s claim that it has a

right to the waters of McCook Lake because the Association’s permitted water

rights pertain only to the waters of the Missouri River.

[¶10.] The Board notified the public on June 1, 2023, that it would consider

the well permit application during its July 12, 2023, meeting and invited public

comment on the application. The Board received well over 200 public comments

with the vast majority opposing the approval of the application. The Association

filed a petition formally opposing the application on June 12, asserting that the

Chief Engineer did not adequately evaluate whether issuing the permit would

unlawfully impair the Association’s water rights or negatively impact the water

levels in McCook Lake. The Association claimed that the canal could leak which

would cause the lake to drain. Because the Association pumps water at its own

expense to keep the lake full, they claimed that the addition of the canal would

require them to pump more water from the Missouri River, which “may be

impossible to do[.]” The Association also challenged Dakota Bay’s calculations

-6- #30795, #30796, #30822, #30823

regarding the amount of water needed to fill and maintain the water levels in the

canal and argued that the Chief Engineer could not adequately assess the

application without receiving and reviewing detailed plans for the construction and

design of the canal.

[¶11.] Because the declaratory ruling and well permit application were

related, the Water Rights Program filed a motion to schedule a special meeting of

the Board. At its July 12, 2023 meeting, the Board granted the motion and

scheduled a special meeting on August 2, 2023, for consideration of Chicoine’s well

permit application and the Association’s petition for declaratory ruling, although

the matters were not consolidated.

[¶12.] The Association’s counsel issued two subpoenas duces tecum on June

30, 2023, commanding Kevin Robling, Secretary of the South Dakota Department of

Game Fish, and Parks, and Ann Mines Bailey, “Attorney for SD Department of

Agriculture and Natural Resources,” to appear and provide documents for

inspection. During the Board’s July 12 meeting, Mines Bailey moved to quash the

subpoena issued to her on the basis that it was issued directly by counsel without

the Board’s authority or permission as required by SDCL 1-26-19.1. Additionally,

she argued that the subpoena improperly listed her title in that she represented

only the Chief Engineer and Water Rights Program, not DANR.6 Further, she

asserted that the subpoena sought privileged information and was improperly

6. The Water Rights Program is a program within DANR. SDCL 46-2-4.1 requires that the Chief Engineer be advised by counsel from the Attorney General’s Office. Mines Bailey informed the Board that she represents only the Chief Engineer and Water Rights Program and that she did not have access to documents held by DANR. -7- #30795, #30796, #30822, #30823

served. Mines Bailey also challenged the relevance of certain documents requested

by the subpoena.

[¶13.] Counsel for GF&P also moved to quash the subpoena for Secretary

Robling on the basis that the subpoena was issued without the Board’s authority

and was overly broad. The Board Chairman noted that he had not received a copy

of the subpoenas. The Board granted the motions to quash “based upon arguments

of counsel and after considering SDCL 1-26-18, 1-26-19, 1-26-19.1 and 15-6-45.”

The Association’s counsel subsequently filed a motion with the Board requesting

that the Board issue a subpoena ordering Secretary Robling to appear and testify

during the August 2 meeting. The Prehearing Chairman granted the motion but

revised the subpoena to permit Secretary Robling or his designee with knowledge of

the relevant matters to appear on his behalf.

[¶14.] The Water Rights Program filed a prehearing brief outlining the basis

of its opposition to the Association’s petition for declaratory ruling. First, it

challenged the scope of the Association’s requested relief. The Association sought a

declaratory ruling “that the alteration of a public water body by a private party

requires a permit for appropriation of water[.]” Such a ruling, the Water Rights

Program asserted, was overly broad and would result in a precedent requiring any

person seeking to alter a shoreline to also apply for and receive a permit to

appropriate water. To narrow the scope of the question before the Board, the Water

Rights Program pointed to the language of the public notice, which restricted the

issue to Chicoine’s construction of the canal and requested that the Board limit the

relief granted to the scope of the public notice.

-8- #30795, #30796, #30822, #30823

[¶15.] Regarding the Association’s claim that the canal would appropriate

water from McCook Lake, the Water Rights Program argued that the initial fill

would constitute an appropriation, but that the fill could be completed using the

one-time appropriation from the irrigation well requested in the well permit

application. After the initial fill, the Water Rights Program asserted that “the

water in the canal becomes inseparable from the waters of McCook Lake.” Finally,

the Water Rights Program argued that the construction of the canal would not

constitute an unlawful impairment of the Association’s water rights because it did

not affect their ability to pump water from the Missouri River to fill McCook Lake

and the Association does not have a water right in the waters of McCook Lake.

Counsel for Chicoine and Dakota Bay provided a notice of appearance on July 21,

2023, and filed a petition opposing the Association’s petition for declaratory ruling

and joined the Water Rights Program’s prehearing brief.

Association’s Petition for Declaratory Ruling

[¶16.] At the August 2, 2023 hearing, the Board first considered the

Association’s petition for declaratory ruling. The Board heard testimony from five

witnesses: Julie Burhoop, Dirk Lohry, Kip Rounds, Eric Gronlund, and Chicoine.

The parties stipulated to several facts including the existence of the Association’s

water right and water permit to appropriate water from the Missouri River and the

fact that Chicoine applied for a shoreline alteration permit and submitted Water

Permit Application No. 8744-3. Consistent with the specifications provided on the

shoreline alteration application, the parties stipulated that “[t]he finished canal will

-9- #30795, #30796, #30822, #30823

be approximately 110-feet wide, 11-feet deep with a flat bottom, and approximately

1,800 feet in length.”

[¶17.] The Association first called Julie Burhoop, who serves as the vice

president of communications for the Association. Burhoop testified that the

Association spends between $50,000 and $150,000 per year to pump water and fill

McCook Lake. The Association receives $25,000 per year from the city of North

Sioux City, but otherwise funds the pumping operation through fundraising.

Burhoop explained that the Association starts pumping in the spring as soon as the

water levels in the Missouri River are high enough and pumps continuously until

the water level in the lake reaches an elevation of 1,088 fmsl.7

[¶18.] The Association also called its president, Dirk Lohry, and admitted

Exhibit 5, a graph showing the weekly water levels in the lake over the last ten

years. Lohry testified that he began manually measuring the water level after “the

flood of 2011.” In the spring of each year, Lohry explained that the Association

begins pumping water into the lake causing the water level to rise rapidly.

Conversely, the water level in the lake drops quickly in the fall when the

Association stops pumping water from the Missouri River. Over the last ten years,

Lohry testified that the water level fell between zero and six feet per year with an

average of 3.7 feet per year.

7. Under the terms of its water right and water permit, the Association is authorized to pump anytime the water level falls below 1,090.3 fmsl, the ordinary high-water mark set by DANR. Thus, in wet years with higher natural precipitation, the Association may not be entitled to pump water at all if the lake level never falls below 1,090.3 fmsl. However, in years where the natural water level is low, the Association aims to fill the lake to a level of 1,088 fmsl. -10- #30795, #30796, #30822, #30823

[¶19.] Lohry testified that the lake and canal are “hydrologically connected”

meaning that, “[i]f the lake goes down, the canal level goes down. If the canal level

would somehow go up, then the lake level would go up because water finds its own

level.” Based on the plans that he reviewed regarding the canal, Lohry believed the

bottom of the canal would be at an elevation of 1,082 fmsl. Therefore, Lohry

testified that, in his opinion, if the water in the lake fell below that level, the canal

would be empty. Like many oxbow lakes, Lohry testified that McCook Lake is

“drying up” and the water level is artificially maintained only through pumping.

The Association pumps 11,000 gallons per minute “plus or minus 1,000” when they

fill the lake and between 5,000 and 11,000 gallons per minute to maintain the water

level once the lake is full.

[¶20.] The Association next called Kip Rounds, the former aquatic habitat

and access biologist for GF&P. In that role, Rounds reviewed shoreline alteration

applications, including Chicoine’s application. Rounds testified that an individual

may need to apply for a shoreline alteration permit before engaging in a wide

variety of activities below the ordinary high-water mark of a lake. For example, a

permit would be required before removing vegetation which alters the lake bottom;

installing a sea wall below the ordinary high-water mark; or installing rip rap to

stabilize the shoreline. After reviewing Chicoine’s permit application, GF&P’s

engineers believed that the soil in the area where the canal would be constructed

was “susceptible to potential seepage” and they recommended that a clay liner be

installed to mitigate the amount of water lost. However, if the clay liner dries out,

-11- #30795, #30796, #30822, #30823

Rounds testified that it could crack, at which point it would not prevent water loss

from seepage.

[¶21.] The Association finally called Eric Gronlund, the Chief Engineer, who

testified that in his opinion, Chicoine and Dakota Bay did not need to obtain a

water permit because the canal would not appropriate water from McCook Lake.

Gronlund testified that water from the canal and lake would move back and forth

freely depending on the water elevation. However, Gronlund testified that Chicoine

planned to build a two-foot berm at the entrance to the canal from McCook Lake

which would help the canal retain water even if the lake’s water level dropped

below the level of the berm.

[¶22.] Gronlund also testified regarding the history of the water rights

permitting process in South Dakota. He explained that South Dakota, like other

western states, uses the prior appropriation model. Under prior appropriation, also

known as “first in time, first in right,” an appropriator who establishes their rights

first has priority over all subsequent appropriators. In this context, Gronlund

defined appropriation as “taking control and possession” of public water. Gronlund

explained that there are several different types of water permits authorizing a

person or entity to appropriate water for various purposes and durations. A

standard or conditional water permit authorizes an ongoing appropriation of water.

An individual or entity can also seek a temporary permit for construction, testing,

and drilling. Gronlund explained that these types of permits are frequently issued

for road construction and filling lagoons and that a temporary permit could be used

to initially fill the canal in this case from Chicoine’s well.

-12- #30795, #30796, #30822, #30823

[¶23.] Regarding the Association’s water right and water permit, Gronlund

testified that the Association’s water rights extend only to the waters of the

Missouri River. Once the water is released into McCook Lake, Gronlund testified

that the water again becomes public water, and the Association does not have any

special right to it. According to Gronlund, nobody holds an appropriative permit to

the waters of McCook Lake. Regarding the well permit application, Gronlund

testified that the annual appropriation would not be sufficient to fill the lake but

would be enough to supplement the canal.

[¶24.] Gronlund also testified that projects similar to Dakota Bay’s canal

have occurred on other water bodies in the state without first obtaining a water

appropriation permit. For example, Gronlund testified that Sunset Harbor and

Harbor Bay are manmade canals which extend from Lake Madison, and that

Marion Gardens in Fort Pierre is a manmade canal built off the Missouri River. In

all three cases, the projects altered the shoreline, but did not require a permit to

appropriate water.

[¶25.] The Water Rights Program’s counsel also called Gronlund in its case-

in-chief. Gronlund explained that the canal “would be part of McCook Lake” rather

than a separate structure or body of water. In Gronlund’s opinion, the canal would

not increase the amount of seepage from McCook Lake and would not change the

volume of water in the lake. However, Gronlund acknowledged on cross-

examination by the Association that the capacity of the canal could constitute an

increase in the volume of the lake, assuming the canal was filled.

-13- #30795, #30796, #30822, #30823

[¶26.] At the conclusion of the proceeding, the Board unanimously denied the

Association’s petition for a declaratory ruling on the basis that “the building of the

canal . . . is not an appropriation of water and doesn’t require a permit from this

department or the water board.”

Water Permit Application

[¶27.] The Board then considered the well permit application and heard

testimony from four witnesses: Steen, Chicoine, Rounds, and Lohry. The Water

Rights Program first called Steen who had worked for the Water Rights Program as

an engineer for three years. In this role, she reviewed water permit applications

and conducted field work measuring lake levels through observation wells. Steen

reviewed Dakota Bay’s water permit application and issued a report to the Chief

Engineer analyzing the availability of water from the Missouri: Elk Point aquifer

and whether Dakota Bay’s proposed use of water would unlawfully impair the

rights of others authorized to draw water from the aquifer.

[¶28.] To calculate the availability of unappropriated water, Steen compared

the annual recharge to the aquifer, which Steen defined as “[w]ater entering the

aquifer through any means,” with the annual withdrawal, defined as “[t]he

intentional removal of water from an aquifer.” Steen estimated that the aquifer’s

annual recharge rate was 114,593 acre-feet per year and its annual withdrawal

rate, including Chicoine’s proposed appropriation, was 100,591 acre-feet per year.

Accordingly, Steen testified that “there is a reasonable probability that

unappropriated water is available for the proposed appropriation.”

-14- #30795, #30796, #30822, #30823

[¶29.] Regarding unlawful impairment of other users’ water rights, Steen

referenced a map she created, which was admitted as Exhibit 605, which plotted the

location of all known domestic wells and wells holding water rights and water

permits to the aquifer.8

Steen testified that in her opinion “there is a reasonable probability any

interference from the proposed appropriation will not cause an unlawful

impairment on existing water right and permit holders and domestic uses with

adequate wells.” Her opinion was based on factors including “[t]he tremendous

resource that the Missouri: Elk Point aquifer is, the saturated aquifer thickness at

the existing well site, the volume requested by this application is small, and that

8. The map depicts the location of the irrigation well in relation to the southeastern tip of McCook Lake where the proposed canal would be constructed. Based on other information in the record, it appears that the canal would be constructed between the southeastern tip and the irrigation well marked with a black star in a pink circle. However, the canal would not extend the entire length between those two points. -15- #30795, #30796, #30822, #30823

this well has been diverting at this rate since 2005 without any well interference

complaints within the entire aquifer.”

[¶30.] Steen also responded to the Association’s contentions that the approval

of the permit would unlawfully impair its water right and permit by undermining

its efforts to keep McCook Lake full. Steen explained that the Water Rights

Program “generally only look[s] at water rights completed into the same water

source. If we aren’t seeing an unlawful impairment within that water source at

that time, we would not expect to see an unlawful impairment from permit users in

outside water sources.” Steen explained that, although it was not within the scope

of her review, she “would not anticipate a Missouri: Elk Point water right or a

permit to unlawfully impair a Missouri River water right at this time, given what

[she] knows for water availability in the river and from what we are seeing on how

observation wells react in the aquifer.” In summation, Steen testified that she did

not believe “approval of this permit would have a measurable effect on the waters of

McCook Lake.”

[¶31.] During cross-examination by the Association, Steen testified that she

was unaware of a statute or rule limiting her review of unlawful impairment to

water rights and permits in the same water source and acknowledged that “[i]t’s

possible” that a water right from one source could impair a water right in another

source. However, she reaffirmed her position that if unlawful impairment is not

occurring in the proposed water source (here, the Missouri: Elk Point aquifer), she

would not expect to see unlawful impairment in other water sources (e.g., the

Missouri River). Steen testified that she did not review the canal design

-16- #30795, #30796, #30822, #30823

specifications, soil type, or whether the amount of water requested would be

sufficient to prevent the canal liner from drying out and cracking. She emphasized

that the Water Rights Program does not participate in calculating the amount of

water necessary to accomplish a particular project or purpose, such as filling and

maintaining a canal, and instead relies on the figures provided by the applicant to

calculate availability and the risk of unlawful impairment.

[¶32.] Chicoine testified on behalf of Dakota Bay about his plans for the

construction and use of the canal. Chicoine explained that Dakota Bay owns land

near McCook Lake, including the land that the canal would be constructed on,

which is currently farmland. Chicoine testified that building the canal would give

him better access to his property, turn 15 existing lots into lakefront properties, and

provide for better public access to the lake. Concerning public access, Chicoine

testified that the existing boat ramp “is very steep and the parking is very poor” and

he intends to install a public boat ramp on the canal. In his view, Chicoine believed

the canal would provide additional recreational opportunities that would benefit the

public and wildlife by creating more habitat for fish.

[¶33.] During cross-examination, Chicoine was questioned about some of the

details of the canal project. Chicoine testified that the canal would be lined with an

18-inch fat clay liner to prevent seepage. In the event that the liner was damaged,

Chicoine explained that he would endeavor to promptly fix it, and that he would

pump water into the canal to maintain the integrity of the rest of the liner. In

response to questions from the Board, Chicoine testified that the amount of water

requested in the application was determined by his engineer, Scott Gernhart, who

-17- #30795, #30796, #30822, #30823

calculated the estimated annual evaporation and seepage loss from the canal.

Chicoine testified that he intends to pump water every year into the canal and

plans to regularly monitor the water levels in the canal to determine when water

needs to be added. Chicoine agreed to comply with any requirements imposed by

the Board, including monitoring and pumping a specified amount of water each year

to maintain the canal, if requested.

[¶34.] After Chicoine’s testimony, the Association moved for judgment as a

matter of law, asserting that Dakota Bay did not carry its burden of proving that

the appropriation would have a beneficial use, that it was in the public interest, and

that it did not unlawfully impair the Association’s water rights. The Association

argued that because Dakota Bay did not call Gernhart to testify or produce evidence

regarding the canal’s design, the Board could not evaluate the amount of water

needed to keep the canal liner from failing. The Chairman reserved ruling on the

motion until the close of the evidence.

[¶35.] The Association called Rounds to testify about GF&P’s concerns with

the canal liner. Rounds testified that after reviewing Chicoine’s application,

GF&P’s engineers were concerned that if the liner dried out, it could crack, float, or

otherwise fail resulting in water seeping into the ground at a higher rate. Rounds

testified that GF&P would not continually monitor the liner or check for damage.

[¶36.] During cross-examination, Rounds testified that if GF&P develops

concerns about a project, they will communicate those concerns to the applicant.

Rounds stated that Chicoine had been active in addressing the concerns raised and

submitted the water permit application in response to GF&P’s request to provide a

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means of keeping the liner wet. Rounds testified that keeping the liner from drying

out would be a beneficial use of water which would “benefit everybody[.]”

[¶37.] The Association called Lohry as its final witness. Counsel attempted

to elicit testimony regarding Lohry’s concerns about the integrity of the canal liner.

Counsel for the Water Rights Program and Dakota Bay objected to this line of

questioning on relevance grounds, which the Chairman sustained concluding that

“the question before the board is not whether the liner will fail or is of a certain

quality. We are just here to decide whether the four factors are met on the water

permit.” The Chairman, however, overruled one objection, permitting Lohry to

testify that if the pump in the irrigation well fails or Chicoine chooses not to pump

water into the canal, the Association will bear the burden of ensuring the canal

remains filled.

[¶38.] After the close of the evidence, the Chairman denied the Association’s

earlier motion for judgment as a matter of law and the parties presented their

closing arguments. The Water Rights Program and Dakota Bay argued that the

Board should approve the application because Dakota Bay met its burden of

establishing the availability of unappropriated water, a beneficial use in the public

interest, and that the permit would not unlawfully impair other permit holders’

rights. The Association argued that Dakota Bay failed to prove beneficial use,

public interest, and lack of unlawful impairment of its water rights. The

Association requested that the Board either deny the application or defer ruling

until Dakota Bay provided more information on the design details for the

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construction of the canal and liner and their plans to ensure that the liner would be

properly maintained.

[¶39.] The Board voted to approve the application with four votes in favor

and one abstention. The Chairman directed counsel for the Chief Engineer to draft

proposed findings of fact and conclusions of law for both cases. After the

Association filed its objections, the Board’s counsel prepared the final findings and

conclusions addressing the Association’s objections as required by SDCL 1-26-25.

The Board approved the findings of fact and conclusions of law during its meeting

On September 22, 2023.

[¶40.] Regarding the Association’s petition for declaratory ruling, the Board

found that “[o]nce constructed, the canal extends the shoreline of the lake and

becomes part of the lake.” The Board concluded that to complete the initial fill of

the canal after construction, Chicoine could apply for a temporary permit under

SDCL 46-5-40.1. However, the Board found that “[t]he construction of the proposed

canal does not constitute an ongoing appropriation of McCook Lake water and,

therefore, does not require a standard or traditional water right.” Accordingly, the

Board denied the Association’s petition for declaratory ruling.

[¶41.] Regarding Chicoine’s well permit application, the Board found that

“there is a reasonable probability that there is unappropriated water available to

fulfill the amount requested by the application” and that the diversion of the

requested water will not unlawfully impair preexisting water rights or domestic

water uses. Additionally, the Board found that “[t]he proposed use for recreation is

a beneficial use” and “this appropriation of water for recreation is in the public

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interest.” Based on these findings, the Board approved Chicoine’s well permit

application.

[¶42.] The Association appealed the Board’s rulings to the circuit court.

Regarding the declaratory ruling, the Association challenged the Board’s

determination that the canal construction project did not require a water right

permit because it would not result in an “ongoing appropriation” of McCook Lake

water. Concerning the well permit application, the Association argued that the

Board erred by approving the application because the record did not establish that

the proposed appropriation would be a beneficial use or in the public interest. The

Association also challenged the Board’s decision to quash its subpoenas arguing

that SDCL 15-6-45(a) expressly allows an attorney of record to issue a subpoena

without requesting leave from the Board.

[¶43.] The parties appeared before the circuit court on April 9, 2024, and

presented oral argument. The court took the matter under advisement and issued a

memorandum decision on July 2, 2024, affirming the Board’s decisions to approve

Chicoine’s well permit application and deny the Association’s request for

declaratory ruling. The circuit court also affirmed the Board’s decision to quash the

subpoenas, holding that although “[t]he clear language of both SDCL 15-6-45(a) and

SDCL 1-26-19.1 supports [the] Association’s position that the subpoenas were

validly issued by its attorney without leave of the Board[,]” the Association failed “to

effect service pursuant to SDCL 15-6-45(c) making the Board’s decision to quash

valid on that basis alone.” The court concluded that even if the Board erroneously

quashed the subpoenas, the Association did not establish prejudice.

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[¶44.] The Association appeals, raising the following issues for our review:

1. Whether the circuit court erred in affirming the Board’s decision that Chicoine/Dakota Bay’s proposed canal construction did not require a permit to appropriate water from McCook Lake.

2. Whether the circuit court erred in affirming the Board’s ruling that Dakota Bay, LLC, carried its burden of establishing that the use of water described in Water Permit Application No. 8744-3 was a beneficial use and in the public interest.

[¶45.] The Chief Engineer filed a notice of review, raising the following issue:

3. Whether the circuit court erred by concluding that the Rules of Civil Procedure applied to a hearing before the Water Management Board.

Analysis

[¶46.] Our standard of review of agency decisions is governed by SDCL 1-26-

36. See Matter of Ehlebracht, 2022 S.D. 46, ¶ 22, 978 N.W.2d 741, 749 (“The

provisions of SDCL 1-26-36 delineate the standard for a circuit court’s review of an

administrative agency’s decision, and the same rules apply on appeal to this Court.”

(citation modified)). We review the Board’s findings of fact under the clearly

erroneous standard.9 In re Water Right Claim No. 1927-2, 524 N.W.2d 855, 857

(S.D. 1994). Issues of law “are fully reviewable by this Court under the de novo

9. We take this opportunity to reiterate that the appropriate standard of review for agency findings is the clearly erroneous standard. SDCL 1-26-36. We recognized the abrogation of the substantial evidence standard in Sopko v. C & R Transfer Co., Inc., following the amendment of SDCL 1-26-36 in 1978. 1998 S.D. 8, ¶ 7, 575 N.W.2d 225, 228–29; see also Kirwan v. City of Deadwood, 2023 S.D. 20, ¶ 29, 990 N.W.2d 108, 116 (noting that the clearly erroneous standard and substantial evidence standard “are not interchangeable”). -22- #30795, #30796, #30822, #30823

standard.” Blazer v. S.D. Dep’t of Pub. Safety, 2024 S.D. 74, ¶ 15, 15 N.W.3d 488,

493 (citation omitted).

[¶47.] We review “[q]uestions of statutory interpretation and application . . .

under the de novo standard of review with no deference to the circuit court’s

decision.” McKie Ford Lincoln, Inc. v. Hanna, 2018 S.D. 14, ¶ 10, 907 N.W.2d 795,

798 (citation omitted). “The starting point when interpreting a statute must always

be the language itself.” Blazer, 2024 S.D. 74, ¶ 18, 15 N.W.3d at 493 (citation

omitted). “When the language in a statute is clear, certain and unambiguous, there

is no reason for construction, and the Court’s only function is to declare the meaning

of the statute as clearly expressed.” Id. (citation omitted). “In conducting statutory

interpretation, we give words their plain meaning and effect, and read statutes as a

whole.” Id. at 493–94 (citation omitted).

1. Whether the circuit court erred in affirming the Board’s decision that Chicoine/Dakota Bay’s proposed canal construction does not require a permit to appropriate water from McCook Lake.

[¶48.] South Dakota, like other arid western states, abolished the common

law rule of riparian water rights in favor of a system of prior appropriation. See

Parks v. Cooper, 2004 S.D. 27, ¶ 43, 676 N.W.2d 823, 837. Under this system, “all

water within the state is the property of the people of the state, but the right to the

use of water may be acquired by appropriation as provided by law.” SDCL 46-1-3.

“[T]he state shall determine what water of the state, surface and underground, can

be converted to public use or controlled for public protection.” SDCL 46-1-1.

[¶49.] “A person may request the water management board to issue a

decision on the applicability of a statutory provision, rule, or order pertaining to a

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submitted factual situation within the board’s jurisdiction[.]” ARSD 74:02:01:46.

Accordingly, the Association requested that the Board “issue a Declaratory Ruling

finding that the expansion of a public body of water for private use or gain (such as

by altering the shoreline of a lake and connecting a ‘canal’) requires a permit to

appropriate water.” “Except as otherwise provided . . . , no person may appropriate

the waters of this state for any purpose without first obtaining a permit to do so.”

SDCL 46-1-15. Accordingly, if a person appropriates the waters of the state, they

must obtain a permit. Thus, the question before the Board was whether the

construction of the canal would result in an appropriation of waters from McCook

Lake.

[¶50.] We have not previously had occasion to consider the definition of the

term “appropriate” as it is used in SDCL chapter 46-1, and it is not defined by

statute or administrative rule. Therefore, we endeavor to discover its ordinary

meaning beginning with dictionary definitions. See Jackson v. Canyon Pl.

Homeowner’s Ass’n, Inc., 2007 S.D. 37, ¶ 11, 731 N.W.2d 210, 213. Black’s Law

Dictionary defines “appropriation” as “[t]he exercise of control over property, esp.

without permission; a taking of possession.” Appropriation, Black’s Law Dictionary

(12th ed. 2024). “Possession” has several relevant definitions, including “[t]he fact

of having or holding property in one’s power; the exercise of dominion over

property[,]” “[t]he right under which one may exercise control over something to the

exclusion of all others; the continuing exercise of a claim to the exclusive use of a

material object[,]” and “[t]he detention or use of a physical thing with the intent to

hold it as one’s own.” Possession, Black’s Law Dictionary (12th ed. 2024). Using

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definitions similar to these, the Water Rights Program argues that appropriation

requires exclusive possession. After the canal is initially filled, which will be

accomplished through the well permit, Gronlund testified that the canal and lake

will become one body of water. Because the water will flow freely between the canal

and McCook Lake, the Water Rights Program argues the canal will not appropriate

water from McCook Lake.

[¶51.] The Association points to a definition found in Merriam-Webster’s

online dictionary, which provides that “appropriate” means “to set apart for or

assign to a particular purpose or use.” Appropriate, Merriam-Webster’s Online

Dictionary, https://www.merriam-webster.com/dictionary/appropriate (last visited

Sep. 16, 2025). The Association asserts that Merriam-Webster’s definitions

establish that “appropriate” means “to take possession of, to set aside, or assign for

a particular use.” However, Merriam-Webster additionally defines “appropriate” as

“to take exclusive possession of.” Id. (emphasis added). Regardless, under its

reading of the Merriam-Webster definitions, the Association argues that when it

fills McCook Lake every year, “that same water will flow from McCook Lake into

the canal” and “[t]he water will be taken possession of, set aside, or used to

maintain water levels in the canal to benefit the private development, properties,

and parties adjacent to the canal.”

[¶52.] While there may be different definitions of the term “appropriate”

depending on the context in which it is used, when formulating a definition for

appropriation as it is used in SDCL chapter 46-1, we must also consider the fact

that the concept of water appropriation is firmly rooted in the legal framework of

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jurisdictions allocating water under the principles of prior appropriation.

Therefore, to guide our analysis of this question, we look to definitions adopted by

other jurisdictions. In Colorado, the Legislature has defined “appropriation” as “the

application of a specified portion of the waters of the state to a beneficial use

pursuant to the procedures prescribed by law[.]” Colo. Rev. Stat. Ann.§ 37-92-

103(3)(a). The Supreme Court of Colorado determined that appropriation “consists

of an actual diversion of water with the intent to apply it to a beneficial use and

application of that water to a beneficial use.” V Bar Ranch LLC v. Cotten, 233 P.3d

1200, 1208 (Colo. 2010) (en banc).

[¶53.] The Supreme Court of Nebraska similarly stated that, “[a]n

appropriation right is a right to divert unappropriated surface water for beneficial

use.” In re Appropriation A-7603 v. Neb. Dep’t of Nat. Res., 868 N.W.2d 314, 321

(Neb. 2015). The United States Supreme Court also recognized an element of

exclusivity in that, “[a]n appropriator is entitled to the ‘exclusive control [of his

appropriated water] so long as he is able and willing to apply it to beneficial uses[.]’”

Montana v. Wyoming, 563 U.S. 368, 380 (2011) (second alteration in original). After

consideration of these definitions, it is evident that three consistent elements

emerge in the context of an appropriation of water. It is apparent that

“appropriation” includes a taking of possession or exercise of control over water to

the exclusion of others to be put to a beneficial use.

[¶54.] The Board found that “[o]nce constructed, the canal extends the

shoreline of the lake and becomes part of the lake.” This finding is supported by

Gronlund’s testimony that the water in the lake and canal would move freely

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depending on the water elevation and Lohry’s testimony that the canal and lake

would be “hydrologically connected” because “water finds its own level.” Gronlund

also testified that Chicoine’s plans for the construction of the canal did not include a

barrier separating the lake from the canal. In light of this testimony, the record

establishes that Dakota Bay and Chicoine will not take exclusive possession or

exercise exclusive control over the waters in the canal and, therefore, the Board

correctly determined that the construction of the canal will not result in the

appropriation of water from McCook Lake.10

[¶55.] The Association raises an alternative, but related, argument that the

canal is a “water work” which requires a water appropriation permit to construct.

SDCL 46-5-9 provides that “[n]o person may begin or carry on any construction of

10. The Association specifically challenges the Board’s determination that the construction of the canal will not result in an “ongoing appropriation” of water. In the Association’s view, the Board adopted a new legal standard without a statutory basis. But a careful review of the Board’s findings reveals that the Board’s reference to an “ongoing appropriation” was made in the context of the types of permits available. In findings of fact (FF) 25, the Board found that the canal project did not require a “standard or traditional water right” because there was no “ongoing appropriation” of water. In FF 26, the Board noted that the initial fill of the canal can be achieved through a “temporary permit for the use of public waters for construction, testing, or drilling purposes pursuant to SDCL § 46-5-40.1.”

When viewed in context, we are not convinced that the Board adopted or applied a new legal standard requiring an “ongoing appropriation” of water. The Board referenced Gronlund’s testimony explaining the types of appropriative permits “including a standard or traditional type of permit which is required for an appropriation that occurs annually and a temporary permit for the use of public waters for construction, testing, and drilling purposes which has a limited duration.” Thus, the Board’s reference to an “ongoing appropriation,” paired with its finding that a standard or traditional water permit was not needed, reflects simply that the Board did not believe that after the initial fill, the canal would appropriate water from McCook Lake. -27- #30795, #30796, #30822, #30823

works for storing or carrying water until a permit to appropriate the water has been

issued.” The Association argues that a permit was required because “Dakota Bay’s

proposed canal is indisputably a water works, uses water from McCook Lake, stores

water, and has the potential to be a beneficial use of water.” The Board focused

exclusively on the arguments regarding appropriation and did not make findings or

conclusions on this issue.

[¶56.] The Association does not argue that the canal will carry water,

therefore the only question is whether it will be a “work[] for storing . . .water[.]”

“Store” is ordinarily defined as “[t]o keep . . . in safekeeping for future delivery in an

unchanged condition” or to “lay away, accumulate[.]” Store, Black’s Law Dictionary

(12th ed. 2024); Store, Merriam-Webster’s Online Dictionary, https://www.merriam-

webster.com/dictionary/store (last visited Sep. 16, 2025). We have not yet had the

opportunity to determine what constitutes a work for storing water under SDCL 46-

5-9, however our prior decisions provide guidance.

[¶57.] In Robbins v. Rapid City, we discussed a proposed contract between

the United States and the city of Rapid City whereby the United States would

construct a dam to collect water from a stream to be stored in a reservoir. 23

N.W.2d 144, 179 (S.D. 1946). Under the contract, the United States would release

the stored water throughout the year into Rapid Creek to be taken by the city for

use in its water system. Id. at 187. We considered the ownership of the water when

held at various points in the system and concluded that when the water entered the

city’s water mains, it was owned by the city. Id. We assumed, but did not decide,

that the water was owned by the United States when it was accumulated and stored

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prior to being released. Id. at 180. Similarly, Belle Fourche Irrigation District v.

Smiley concerned the diversion of waters from the Belle Fourche River through a

series of dams to be stored in reservoirs and subsequently used for irrigation,

domestic, and municipal purposes. 176 N.W.2d 239, 241 (S.D. 1970). In both cases,

the “stored” waters were accumulated or diverted from another source and held

until they were released for a particular purpose. See also Bd. of Cnty. Commr’s of

Cnty. of Arapahoe v. Crystal Creek Homeowner’s Ass’n, 14 P.3d 325, 332 (Colo. 2000)

(reservoir to collect and store water in wet years to be used in dry years and to

regulate the flow of water throughout the year).

[¶58.] Here, the canal does not “store” water in the manner contemplated in

Robbins and Smiley. The canal would hold water depending on the water elevation,

but the water in the canal is not subject to a possessory interest, nor is there an

intent to remove the water to be put to another use. Plainly, the canal is not a

holding place to accumulate water until the water is needed elsewhere.

Accordingly, we conclude that the canal is not a “work for storing water” as used in

SDCL 46-5-9 and Dakota Bay is, therefore, not required to obtain a permit to

appropriate water from McCook Lake prior to beginning construction.

2. Whether the circuit court erred in affirming the Board’s ruling that Dakota Bay, LLC, carried its burden of establishing that the use of water described in Water Permit Application No. 8744-3 was a beneficial use and in the public interest.

[¶59.] “A permit to appropriate water may only be issued if there is

reasonable probability that unappropriated water is available for the applicant’s

proposed use, the proposed diversion can be developed without unlawful

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impairment of existing domestic water uses and water rights, the proposed use is a

beneficial use, and the permit is in the public interest[.]” SDCL 46-2A-9. If the

Chief Engineer’s recommendation to grant or deny the permit application is

contested pursuant to SDCL 46-2A-4(4) or 46-2A-23, the matter is scheduled for a

hearing before the Board. “If the Water Management Board determines, based

upon the evidence presented at the hearing, that the applicable requirements for

the permit . . . have been met, it shall approve the permit[.]” SDCL 46-2A-7.

[¶60.] On appeal, the Association does not challenge the first two factors of

availability and unlawful impairment. Thus, we turn to whether the proposed

appropriation of water will be a beneficial use and whether granting the permit is in

the public interest. These two factors are intertwined. “Beneficial use” is broadly

defined by statute as “any use of water within or outside the state, that is

reasonable and useful and beneficial to the appropriator, and at the same time is

consistent with the interests of the public of this state in the best utilization of

water supplies[.]” SDCL 46-1-6(3).

[¶61.] The Board found “that the proposed use of the water for recreation, to

fill the proposed canal and replace losses of water due to evaporation or seepage,

constitutes a beneficial use.” The Board further found “that placing the water to

this beneficial use is in the public interest.” Indeed, the record contains

considerable support for these findings. Chicoine testified that the canal would

create additional lakefront property and space for boating, jet skiing, and fishing.

The canal would also provide an opportunity for better public access to McCook

Lake given Chicoine’s plans to construct a new public boat ramp. Rounds testified

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that pumping water from the irrigation well to ensure the canal liner would not dry

out was a beneficial use of water. The Association does not challenge the conclusion

that recreational opportunities on the lake and the maintenance of the canal liner

would be beneficial uses for the water and in the public interest.

[¶62.] However, the Association asserts that the evidence presented was

insufficient because Dakota Bay did not offer in support of its application the design

details or specifications of the canal and the calculations used to determine the

amount of water requested. With an eye towards potential future problems, the

Association argues that “[i]f the canal cannot hold water, or if the amount of water

authorized by the water permit is insufficient to satisfy the concerns raised by

[GF&P], then pumping water into the canal would not only be unbeneficial but

would also be wasteful.” On this same basis, it further argued that “no public

interest is served if the water is pumped into a canal that is inadequately designed

or built.”

[¶63.] While it is true that Chicoine did not provide detailed plans for the

construction of the canal, he introduced evidence regarding some of the project

specifications relevant to his permit application. The shoreline alteration

application shows that the canal will be 1,800 feet long, 110 feet wide, and 11 feet

deep, and Chicoine testified that it will be lined with an 18-inch fat clay liner. The

Board also received Chicoine’s exhibit showing Gernhart’s conclusions regarding the

amount of water needed to initially fill the canal and to offset any ongoing water

loss from evaporation and seepage. This foundational evidence provided the Board

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with the rationale for the amount of water requested and the details of the project

sufficient for it to determine where the water would be used and for what purpose.

[¶64.] The Legislature empowered the Board to exercise powers of “general

supervision of the waters of the state, including measurement, appropriation, and

distribution thereof,” and to “regulate and control the development, conservation,

and allocation of the right to use the waters of the state according to the principles

of beneficial use and priority of appropriation[.]” SDCL 46-2-9 and 46-2-11. The

Legislature also made a series of policy determinations regarding the use of water,

including that “the waste or unreasonable method of use of water [should] be

prevented[.]” SDCL 46-1-4. Accordingly, it is within the purview of the Board to

determine whether appropriated water is being wasted. However, the statutory

procedure for granting a permit to appropriate water does not require that the

Board speculate about whether an appropriation which begins as a beneficial use

will become wasteful at some point in the future.11

[¶65.] An examination of the relevant statutory provisions establishes that

the requirement of beneficial use is an ongoing obligation. “Beneficial use is the

11. DANR suggests in its brief that if the Board was required to consider the future success of a project prior to issuing a water permit, “no water permit would ever be able to be granted.” As an illustration of the problems attendant to adding a future success criteria, DANR provides the following examples: “When irrigation permits are granted to farmers, the Chief Engineer and the Board do not inquire about what kinds of crops the farmers will grow, what types of fertilizer they plan to use, what expected yields are, or what specific irrigation manufacturers will provide equipment. . . . Similarly, the beneficial use of the Association’s own recreational permit to pump water from the Missouri River to maintain lake levels is not dependent on showing how many boats use the lake, how many fish are caught, how many kids swim in the summer, or even whether the lake level is maintained.” -32- #30795, #30796, #30822, #30823

basis, the measure and the limit of the right to the use of waters[.]” SDCL 46-1-8.

While an applicant may initially be granted a permit to appropriate water, the

failure to “use beneficially any part of the water for the purpose for which it was

appropriated” for a statutorily defined period results in the loss of the right to

appropriate the water. SDCL 46-5-37. If a permit holder violates the terms of their

permit, the Board has the authority to revoke the permit. SDCL 46-1-12. The Chief

Engineer can also order a person to discontinue the use of water that they do not

have the legal right to use. SDCL 46-2-18. If a permit holder wishes to change the

use of their appropriated water, the Board considers anew whether the

appropriation “is for a beneficial use and in the public interest” prior to granting the

amended permit. SDCL 46-2A-12. Indeed, Chicoine submitted the permit

application here despite his existing permit to appropriate water from the irrigation

well because he sought to use the water to fill and maintain the canal rather than

for irrigation.

[¶66.] These provisions provide mechanisms through which the Chief

Engineer and the Board can reassess the allocation of water based on its actual use.

It is through these provisions that the Board can determine, based on the unique

facts of the application before it, whether water is being put to an improper use or is

being wasted contrary to the public policy of the state. However, prior to granting a

permit to appropriate water, the only nonspeculative information available to the

Board is the intended use of the water. Here, the Board was presented with

testimony that the water would be used to fill and maintain the structural integrity

of the canal, which would have a recreational purpose. Accordingly, Dakota Bay

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provided sufficient evidence for the Board to determine that the proposed use of the

appropriated water would be a beneficial use that is consistent with the interests of

the public. Based on our review of the record, these findings were not clearly

erroneous.

3. Whether the circuit court erred by concluding that the rules of civil procedure applied to a hearing before the Water Management Board.

[¶67.] The Chief Engineer challenges the circuit court’s application of the

rules of civil procedure to the proceedings before the Board. The applicability of the

rules of civil procedure is a question of law, which we review de novo. Abdulrazzak

v. Bd. of Pardons & Paroles, 2020 S.D. 10, ¶ 9, 940 N.W.2d 672, 675 (“[W]e review

‘legal questions arising under the rules of civil procedure de novo, utilizing our

established rules for statutory construction.’” (citation omitted)). On appeal to the

circuit court, the Association asserted that the Board erred by quashing the two

subpoenas duces tecum issued by the Association’s counsel. The circuit court

concluded that the subpoenas were validly issued by counsel under both SDCL 1-26-

19.1 and 15-6-45(a) but that the Association failed to effect proper service, thereby

rendering the subpoenas invalid.12 Ultimately, the court concluded that even if the

Board erred in quashing the subpoenas, the Association did not establish prejudice.

12. It appears that the subpoena issued to Mines Bailey was served on an administrative assistant working for DANR rather than personally on Mines Bailey. Under the rules of civil procedure, subpoenas are to be served in the same manner as a summons, except that a subpoena may not be served by publication. SDCL 15-6-45(c). The circuit court concluded that personal service was required and that the service on the administrative assistant or through mailing to counsel was ineffective. -34- #30795, #30796, #30822, #30823

[¶68.] The Chief Engineer argues that the procedure in a contested case

before the Board is governed exclusively by the Administrative Procedures Act

(APA) set forth in SDCL chapter 1-26. The Association did not file a brief in

response to the Chief Engineer’s notice of review. However, the Association argued

to the circuit court that the subpoenas were properly issued by counsel under the

rules of civil procedure because SDCL 15-6-45(a) provides that an attorney of record

can issue a subpoena “in any action or proceeding, or collateral hearing, civil or

criminal[.]” (Emphasis added.) Further, the rule provides that “[w]hen an attorney

issues a subpoena, the attorney must contemporaneously transmit a copy thereof to

the clerk of the court, or to the secretary or other filing officer of the board or

tribunal in which the matter is pending, for filing.” Id. (emphasis added). The

Association argued that the Board is a “board or tribunal” as used in SDCL 15-6-

45(a) and that requiring parties to request a subpoena from the Board would allow

the Board, “without any guiding principles or standards, to deny a subpoena and

thus deny a party’s ability to present evidence.”

[¶69.] “SDCL 15-6-1 provides that the rules of civil procedure govern the

procedure in the circuit courts. Unless otherwise provided by statute or by

proclamation of this court, such rules apply to no other proceedings.” Perrine v.

S.D. Dep’t of Lab., 431 N.W.2d 156, 159 (S.D. 1988). SDCL 1-26-19.1 provides, in

relevant part:

Each agency and the officers thereof charged with the duty to administer the laws of this state and rules of the agency shall have power to administer oaths as provided by chapter 18-3 and to subpoena witnesses to appear and give testimony and to produce records, books, papers and documents relating to any

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matters in contested cases and likewise issue subpoenas for such purposes for persons interested therein as provided by § 15-6-45.

Accordingly, SDCL 1-26-19.1 authorizes an agency to issue subpoenas on its own

behalf and “upon application of any person having a cause or any matter pending in

court or before such agency, officer or tribunal” as provided by SDCL 15-6-45(a).

SDCL 1-26-18 provides that a party to a contested case “may have subpoenas issued

to compel attendance of witnesses and production of evidence in the party’s behalf.”

Thus, a party in a contested case, such as the Association, can request that the

Board issue subpoenas under its authority in SDCL 1-26-19.1 to assist with the

party’s presentation of their case. However, neither SDCL 1-26-19.1 nor any other

provision of the APA provide authority for attorneys of record to issue subpoenas in

such proceedings. Accordingly, we conclude that the provisions of the rules of civil

procedure authorizing attorneys of record to issue subpoenas do not apply to

administrative proceedings of contested cases governed by SDCL chapter 1-26.

Parties in contested proceedings must request that subpoenas be issued on their

behalf by the administrative agency, officer, or tribunal presiding over the

proceedings.

[¶70.] Although the circuit court erroneously relied on the rules of civil

procedure, we affirm the circuit court’s conclusion that the Board did not abuse its

discretion by quashing the subpoenas. We review a decision to quash a subpoena

for an abuse of discretion. Bruggeman by Black Hills Advoc., LLC v. Ramos, 2022

S.D. 16, ¶ 34, 972 N.W.2d 492, 504. “[A] [circuit] court may still be upheld if it

reached the right result for the wrong reason.” Aggregate Const. Inc. v. Aaron Swan

& Assocs., Inc., 2015 S.D. 79, ¶ 14 n.3, 871 N.W.2d 508, 512 n.3 (citation omitted).

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Under the APA, counsel improperly issued subpoenas without authority from the

Board. Accordingly, the Board did not abuse its discretion and the circuit court

correctly affirmed the Board’s determination.

Conclusion

[¶71.] We conclude that the circuit court properly affirmed the Board’s denial

of the Association’s petition for declaratory ruling seeking a declaration that the

alteration of the shoreline of McCook Lake to construct a canal requires a permit to

appropriate water from McCook Lake. The Board correctly concluded that the

proposed construction of the canal will not result in an appropriation of water from

McCook Lake and appropriately denied the Association’s petition on that basis.

Additionally, we affirm the circuit court’s ruling that the Board did not err by

finding that Dakota Bay’s proposed use of water from the irrigation well is a

beneficial use in the public interest. We also affirm the circuit court’s ruling that

the Board did not abuse its discretion by quashing the Association’s subpoenas but

hold that the procedure for issuing subpoenas in administrative proceedings is

governed by the APA, rather than the rules of civil procedure.

[¶72.] SALTER, DEVANEY, and MYREN, Justices, and MOWERY, Circuit

Court Judge, concur.

[¶73.] MOWERY, Circuit Court Judge, sitting for JENSEN, Chief Justice,

who deemed himself disqualified and did not participate.

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