Opinion

TPC, LLC v. Water Resources Dept.

  • 308 Or. App. 177
  • 482 P.3d 121
Court
Court of Appeals of Oregon
Filed
Dec 30, 2020
Status
Published
On the bench
Ortega
Cited by
1 cases
Authority
More cited than 44.3%

The opinion

177

Argued and submitted November 6, 2019, reversed and remanded with

instructions to dismiss petitions December 30, 2020

TPC, LLC,

an Oregon limited liability company,

Petitioner,

and

Taylor A. HYDE

and John L. Hyde,

as General Partners of the

Hyde Family Limited Partnership,

Petitioners-Respondents,

v.

OREGON WATER RESOURCES DEPARTMENT

and Danette Watson, in her official capacity

as District #17 Watermaster,

Respondents-Respondents,

and

KLAMATH TRIBES,

Intervenor-Appellant.

TPC, LLC,

an Oregon limited liability company,

Petitioner,

and

Taylor A. HYDE

and John L. Hyde,

as General Partners of the

Hyde Family Limited Partnership,

Petitioners-Respondents,

v.

OREGON WATER RESOURCES DEPARTMENT

and Danette Watson, in her official capacity

as District #17 Watermaster,

Respondents-Appellants,

and

KLAMATH TRIBES,

Intervenor.

178 TPC, LLC v. Water Resources Dept.

Marion County Circuit Court

16CV27427, 17CV26962; A167380

482 P3d 121

This case involves final orders issued in 2016 and 2017 by the Oregon Water

Resources Department (OWRD) that curtailed petitioners’ use of their surface

water rights in the Williamson River, which is located in the Klamath Basin, in

favor of senior water rights held by the Klamath Tribes and the United States

as trustee for the Klamath Tribes. The parties’ water rights in the Williamson

River were established as determined claims in a 2013 OWRD final order that

adjudicated water right claims in the Klamath Basin. Exceptions to that 2013

order, including exceptions filed by the parties in this case, are currently on

review in Klamath County Circuit Court under the process provided for in ORS

chapter 539. Petitioners sought judicial review of the 2016 and 2017 curtailment

orders in Marion County Circuit Court, arguing that a provision in a stipulation

entered into by petitioners, the United States, the Klamath Tribes, and OWRD

in the Klamath Basin adjudication—a provision that was not incorporated into

the 2013 adjudication order—prohibited OWRD from issuing the 2016 and 2017

curtailment orders. Marion County Circuit Court concluded that OWRD was

subject to the provision in the stipulation, as urged by petitioners, and remanded

the curtailment orders. Held: Marion County Circuit Court did not have subject

matter jurisdiction over petitioners’ claim. Exclusive subject matter jurisdiction

over the precise claim brought by petitioners was with Klamath County Circuit

Court under the process in ORS chapter 539.

Reversed and remanded with instructions to dismiss petitions.

Thomas M. Hart, Judge.

Edmund Clay Goodman argued the cause for appellant

Klamath Tribes. Also on the briefs was Hobbs Straus Dean

& Walker LLP.

Dominic M. Carollo argued the case for respondents John

L. Hyde and Taylor A. Hyde. Also on the brief were Nathan

Ratliff and Yockim Carollo LLP.

Carson L. Whitehead, Assistant Attorney General, argued

the cause for respondents Oregon Water Resources

Department and Danette Watson. Also on the briefs were

Ellen F. Rosenblum, Attorney General, and Benjamin

Gutman, Solicitor General.

Carson L. Whitehead, Assistant Attorney General, argued

the cause for appellants Oregon Water Resources

Department and Danette Watson. Also on the briefs were

Ellen F. Rosenblum, Attorney General, and Benjamin

Gutman, Solicitor General.

Cite as 308 Or App 177 (2020) 179

Dominic M. Carollo argued the case for respondents John

L. Hyde and Taylor A. Hyde. Also on the brief were Nathan

Ratliff and Yockim Carollo LLP.

James A. Maysonett argued the cause on behalf of

amicus curiae United States. Also on the brief were Billy

J. Williams, Kelly Zusman, Jeffrey Bossert Clark, and Eric

Grant.

Before Ortega, Presiding Judge, and Shorr, Judge, and

James, Judge.

ORTEGA, P. J.

Reversed and remanded with instructions to dismiss

petitions.

180 TPC, LLC v. Water Resources Dept.

ORTEGA, P. J.

This case involves final orders issued in 2016 and

2017 by an Oregon Water Resources Department (OWRD)

watermaster1 which curtailed petitioners’2 use of their sur-

face water right in the Williamson River, which is located in

the Klamath Basin, in favor of senior water rights held by

the Klamath Tribes and the United States as trustee for the

Klamath Tribes. The parties’ water rights were established

as determined claims in a 2013 OWRD final order that

adjudicated water right claims in the Klamath Basin. That

2013 adjudication order is currently on review in Klamath

County Circuit Court. To settle contests to petitioners’ water

right claim brought by the United States and the Klamath

Tribes in that adjudication, petitioners, the United States,

and the Klamath Tribes entered into a stipulation, which

OWRD also signed (the Hyde Agreement). The OWRD adju-

dicator incorporated part of the Hyde Agreement into the

2013 adjudication order.

In 2016 and 2017, the Klamath Tribes made a call

for water to the district watermaster, which led to the orders

at issue in this case that curtailed petitioners’ use of their

water right. Petitioners sought judicial review of those cur-

tailment orders in Marion County Circuit Court, arguing

that a provision in the Hyde Agreement that the adjudicator

did not incorporate into the 2013 adjudication order prohib-

ited OWRD from issuing the curtailment orders. Petitioners

did not join the Klamath Tribes or the United States in their

petitions, and the Klamath Tribes intervened for the lim-

ited purpose of seeking to dismiss the action for failure to

join the Tribes. Marion County Circuit Court permitted the

Tribes to intervene but denied the Tribes’ motion to dismiss

and, on cross-motions for summary judgment by petitioners

and OWRD, concluded that OWRD was subject to the pro-

vision in the Hyde Agreement, as urged by petitioners, and

remanded the curtailment orders.

1

OWRD and the watermaster, in her official capacity, are both named par-

ties in this case. For ease of reference, we refer only to OWRD throughout this

opinion.

2

The parties have stipulated to the dismissal of petitioner TPC, LLC, as a

respondent on appeal, and it is no longer a party to this case. Our use of the term

“petitioners” throughout this opinion refers only to the Hyde petitioners.

Cite as 308 Or App 177 (2020) 181

OWRD appeals from that judgment, arguing that it

is not bound by the Hyde Agreement. The Klamath Tribes

also appeal, arguing that Marion County Circuit Court

erred in denying their motion to dismiss. Additionally, the

United States filed an amicus brief on appeal, taking up

the argument made by OWRD below that Marion County

Circuit Court lacked subject matter jurisdiction over peti-

tioners’ claim, because, under ORS chapter 539, exclusive

jurisdiction for the particular claim they asserted rests in

Klamath County Circuit Court, where the Klamath Basin

adjudication order is currently being litigated by the par-

ties in this case. We conclude that Marion County Circuit

Court did not have subject matter jurisdiction over peti-

tioners’ claim and, thus, reverse and remand with instruc-

tions to Marion County Circuit Court to dismiss the

petitions.

The relevant background facts are undisputed. In

2013, under the process set forth in ORS chapter 539, the

director of OWRD, through an adjudicator, issued a final

order that adjudicated about 730 surface water right claims

in the Klamath River Basin (the KBA order). The Klamath

River Basin adjudication (the KBA or the adjudication)

included surface water right claims in the Williamson River

and its tributaries, which feed into Upper Klamath Lake.3

Petitioners’ determined claim, Claim 33, is “at and near the

headwaters of the Williamson River” with a priority date in

1864. The determined claims of the Klamath Tribes and the

United States, as trustee for the Klamath Tribes, include

Claims 625 through 629 and 631 through 640, which are

for instream flows in the Williamson River and its tributar-

ies, and Claim 623, which is for maintenance of minimum

water levels in Klamath Marsh, into which the Williamson

River flows. All of those claims have a priority date of “time

3

The KBA order describes the Williamson River:

“The Williamson River rises in large springs along the toe of Booth

Ridge in the northeasterly portion of the basin. It flows northward for some

distance before turning west and entering Klamath Marsh. From Klamath

Marsh it flows southerly into Upper Klamath Lake. Between Klamath Marsh

and Upper Klamath Lake, the Williamson has two significant tributaries.

The first, Spring Creek, which enters the Williamson above the town of

Chiloquin, exhibits almost constant flow; the second, Sprague River, joins

the Williamson just sought of Chiloquin.”

182 TPC, LLC v. Water Resources Dept.

immemorial.” 4 Thus, under the KBA order, the Klamath

Tribes’ water rights have seniority over petitioners’ water

right.5 Many parties to the adjudication filed exceptions to

the KBA order, including petitioners, the United States,

and the Klamath Tribes, which are discussed below. Those

exceptions are currently on review in Klamath County

Circuit Court.

During the adjudication, the United States and the

Klamath Tribes contested petitioners’ water right claim

(Claim 33). In 2005, petitioners, the United States, the

Klamath Tribes, and OWRD signed a stipulation to settle

those contests to petitioners’ claim—the Hyde Agreement.

The Hyde Agreement was a filed document in that contested

case and is headed with the caption of the contested case,

case number, claim number, contest numbers, and the plead-

ing title, “Stipulation to Resolve Contests.” The opening line

of the document states, “Claimants Dayton and Gerda Hyde

(‘Claimants’), Contestant United States, and Contestant

Klamath Tribes (‘Tribes’), collectively referred to as the

‘Parties,’ and the Oregon Water Resources Department

(‘OWRD’), stipulate and agree as follows.” (Footnote omit-

ted.) After setting forth stipulated facts in section A, the

Hyde Agreement provides, in part, in section B:

“1. (a) Claimants, Contestants and OWRD agree

that Claim 33 should be approved by the Adjudicator as

described below: [setting out a description of the water

right]

“(b) The exercise of the water right described herein

is subject to maintaining a flow of at least one-half of the

4

The Klamath Tribes’ water rights to instream flow in the Williamson River

watershed to support hunting and fishing were confirmed in its 1864 Treaty with

the United States and “necessarily carry a priority date of time immemorial.”

United States v. Adair, 723 F2d 1394, 1414 (9th Cir 1983), cert den, 467 US 1252

(1984).

5

Once the KBA order issued, OWRD had regulatory authority over the

adjudicated claims, including authority to regulate junior water users in favor

of senior water users, as required by Oregon law, which has adopted the prior

appropriation system. See, e.g., ORS 540.045(1) (describing watermasters’ reg-

ulation duties); ORS 539.130(4) (providing that OWRD’s determination orders

are “in full force and effect”); ORS 539.170 (providing that, pending the circuit

court judgment, division of water on the stream shall be made in accordance with

OWRD’s determination orders).

Cite as 308 Or App 177 (2020) 183

total flow in the Williamson River upstream of the current

north boundary of Claimants’ property * * *. * * *

“(c) Claimants’ use of their water right upstream of

the current north boundary of Claimants’ property * * *

will not be curtailed in favor of any senior water right now

held or later acquired by the United States or the Klamath

Tribes. The United States and the Klamath Tribes agree

that they will not place any call on the Williamson River

that will result in the curtailment of Claimants’ use of

water in excess of the principles set forth in paragraph

B.1.(b), above. To ensure implementation of this provi-

sion, the United States and the Klamath Tribes hereby

request that the Adjudicator’s Findings of Fact and Order

of Determination place a condition implementing the prin-

ciples set forth in paragraph B.1.(b), above, thereby pre-

venting exercise, upstream of the current north boundary

of Claimants’ property, * * * of any rights adjudicated in

favor of the United States on behalf of the Klamath Tribes

in Claim No. 633. The United States and the Klamath

Tribes also request that the same provision be placed on

any rights adjudicated in favor of the Klamath Tribes with

respect to the portion of the Klamath Tribes’ Claim No. 612

that incorporates Claim 633 filed by the United States on

behalf of the Klamath Tribes.

“(d) Claimants and Contestants anticipate that it will

be unnecessary to invoke the provisions of paragraph

B.1.(b), above, due to the Conservation Easement discussed

below and attached hereto as Exhibit 2. However, to the

extent that one or more of the Parties determines that reg-

ulation of the river is necessary, such regulation will be

conducted subject to the availability of the watermaster to

carry out this work. * * *

“(e) Claimants agree to grant to the Tribes a Con-

servation Easement on the property above the bound-

ary described in paragraph B.1.(b). * * * Enforcement of

any provision of the Conservation Easement will be done

through proceedings of the Easement itself, and will not

be cause for filing exceptions in the Circuit Court to the

Adjudicator’s findings of fact and order of determination.

***

“(f) Claimants also hold Water Right Certificates Nos.

37002 and 8615. Claimants do not intend to exercise their

water rights under these Certificates in a manner so as to

184 TPC, LLC v. Water Resources Dept.

cause depletion of water in the Williamson River in amounts

greater than those identified in paragraph B.1.(b). To

ensure that such a result does not occur, Claimants hereby

file Affidavits of Diminution with OWRD, and request that

Certificate Nos. 37002 and 8615 be diminished in accor-

dance therewith. * * *

“(g) Claimants also agree that they will not exercise

any water rights that they may hereafter acquire or receive

in such a manner so as to cause depletion of water in the

Williamson River in amounts greater than those identi-

fied in paragraph B.1.(b). To ensure that such a result does

not occur, claimants hereby agree to make appropriate

requests to OWRD to place conditions on such right(s) nec-

essary to prevent such exercise.

“2. The Parties agree that under the terms and provi-

sions of this Stipulation, the Contests have been satisfacto-

rily resolved, and such resolution ends the need for further

proceedings before the Administrative Law Judge on the

Contests.

“3. Based on the Stipulation of the Parties that Claim

33 and the Contests can be resolved without the need for

further proceedings, OWRD adjudication staff hereby rec-

ommends to the Adjudicator that Claim 33 be withdrawn

from the Office of Administrative Hearings. OWRD adjudi-

cation staff further recommends that Claim 33 be approved

in the Findings of Fact and Order of Determination issued

by the Adjudicator in accordance with the terms of Section

B.1. above.

“4. If the Finding[s] of Fact and Order of Determination

issued by the Adjudicator for Claim 33 does not conform to

the terms set forth in paragraph B.1., above, the Parties

reserve any rights they may have to file exceptions to the

Findings of Fact and Order of Determination as to Claim

33 in the Circuit Court for Klamath County, and reserve

any rights they may have to participate in any future pro-

ceedings authorized by law concerning Claim 33.”

In the determination order for Claim 33, the adju-

dicator determined with respect to the Hyde Agreement as

follows:

“The [Hyde] Agreement executed between the Claimants,

OWRD, the United States of America, and the Klamath

Tribes is adopted and incorporated as if set forth fully

Cite as 308 Or App 177 (2020) 185

herein, with the exception of paragraphs B.1.(c), B.1.(d),

B.1.(e), B.1.(f), and B.1.(g); these paragraphs are not perti-

nent to the determination of a water right claim.”

Thus, the KBA order established petitioners’ water right as

described in the Hyde Agreement in B.1.(a) and with the

limitation set out in B.1.(b), which was incorporated into the

determined water right as a “further limitation.” However,

none of the other paragraphs in section B.1. were incorpo-

rated into any water right established under the KBA order.

As noted above, petitioners, the United States,

and the Klamath Tribes filed exceptions to the KBA order.

Petitioners filed exceptions to the Tribes’ established claims

in the Williamson River, taking exception to the omission

of a limitation on the Tribes “to not exercise the rights held

or acquired by [the Tribes] in a manner that will curtail

[petitioners’] exercise of the rights held by them as described

and limited in” the Hyde Agreement. As relevant here, the

United States filed exceptions to petitioners’ established

claim, excepting to parts of the determination as unsup-

ported in the record, and the Tribes filed a request to also be

heard on the United States’ exception. The exceptions to the

KBA order are currently being litigated in Klamath County

Circuit Court.

In 2016 and 2017, the Klamath Tribes called on the

OWRD watermaster for the district to enforce the Tribes’

senior water rights in the upper Williamson River and

Klamath Marsh, because instream flows and water levels

in the marsh were below or projected to fall below the estab-

lished levels for the Tribes’ claims. See ORS 540.045 (duties

of watermasters). The watermaster then issued final orders

in other than contested cases in 2016 and 2017 that ordered

petitioners to cease all use of water from the Williamson

River. Those are the orders at issue in the case. Petitioners

sought review of those orders in Marion County Circuit

Court under ORS 536.0756 and ORS 183.484, which governs

6

ORS 536.075 provides, in part:

“(1) Any party affected by a final order other than contested case issued

by the Water Resources Commission or Water Resources Department may

appeal the order to the Circuit Court of Marion County or to the circuit court

of the county in which all or part of the property affected by the order is

186 TPC, LLC v. Water Resources Dept.

judicial review of final orders in other than contested cases.

Petitioners sought review on the basis that OWRD was

barred by the Hyde Agreement from enforcing the Klamath

Tribes’ call for water.7 We describe petitioners’ petitions in

more detail below in our analysis.

The Klamath Tribes filed a limited motion to inter-

vene for the purpose of bringing a motion to dismiss for fail-

ure to join the Tribes in the petitions as a necessary and

indispensable party that cannot be joined due to its sover-

eign immunity. Marion County Circuit Court granted that

limited motion to intervene, but denied the Klamath Tribes’

motions to dismiss, concluding that the Tribes are not an

indispensable party.8 OWRD also brought a motion to dis-

miss, arguing that Marion County Circuit Court lacked

subject matter jurisdiction, because exclusive jurisdiction

rested in Klamath County Circuit Court, where the excep-

tions to the KBA order were being heard. Marion County

Circuit Court denied that motion.

During the litigation of the Klamath Tribes’ motion

to dismiss, petitioners for the first time asserted that the

Hyde Agreement was an enforceable “rotation agreement”

under ORS 540.150 and OAR 690-250-0080.9 As a result,

situated. The review shall be conducted according to the provisions of ORS

183.484, 183.486, 183.497 and 183.500. * * *

“* * * * *

“(7) The provisions of this section shall not apply to any proceeding

under ORS 537.670 to 537.695 or ORS chapter 539.”

7

Petitioners also alleged a claim for relief on the basis that OWRD’s enforce-

ment of the Klamath Tribes’ call for water was futile under OAR 690-250-0020.

Petitioners dropped that claim from both of their petitions.

8

Petitioners’ 2016 and 2017 petitions for judicial review of the curtailment

orders raised nearly identical claims, and the Klamath Tribes brought identical

motions to intervene and to dismiss in those proceedings. Marion County Circuit

Court later consolidated the review of the 2016 and 2017 curtailment orders,

resulting in a general judgment for both matters.

9

ORS 540.150 provides:

“To bring about a more economical use of the available water supply,

water users owning lands to which are attached water rights may rotate in

the use of the supply to which they may be collectively entitled. Whenever two

or more water users notify the watermaster that they desire to use the water

by rotation, and present a written agreement as to the manner of rotation,

the watermaster shall distribute the water in accordance with the written

agreement.”

Cite as 308 Or App 177 (2020) 187

the Tribes provided notice to the OWRD watermaster that

it was voluntarily terminating any such claimed rotation

agreement, as allowed by OAR 690-250-0080(2). The United

States also provided an acknowledgement of the Tribes’ ter-

mination and provided its own notice of termination to the

watermaster.

Petitioners and OWRD then filed cross-motions

for summary judgment. OWRD reasserted its argument

that Marion County Circuit Court lacked subject matter

jurisdiction over petitioners’ claim and, separately, argued

that OWRD could not be compelled to enforce a provision

in the Hyde Agreement. Petitioners argued that the Hyde

Agreement was a written agreement for the distribution of

water (a “rotation agreement”) under ORS 540.150 that the

watermaster had to follow and that OWRD had agreed in

writing to not enforce a call for water by the Tribes against

petitioners. Marion County Circuit Court denied OWRD’s

motion and granted petitioners’ motion. That court entered

a general judgment that provided, in relevant part:

“2. The Court has jurisdiction, pursuant to ORS

183.484, to review the 2016 and 2017 Final Orders

OAR 690-250-0080 provides:

“(1) Appropriators may rotate use of the supply to which they may be

collectively entitled. The nature of potential agreements are subject to the

limitations in section (3) of this rule.

“(2) An agreement shall identify the duration of the agreement which

shall be no less than one irrigation season. The agreement shall not be ter-

minated within an irrigation season, and the rotation agreement shall be

signed by all participants and dated. A copy of the agreement shall be filed

with the watermaster for the area. Unless the rotation agreement provides

otherwise, any member of the agreement may notify the watermaster after

the end of the irrigation season, and before the beginning of the next season’s

use, that they are terminating the agreement.

“(3) A watermaster shall distribute water only under those enforceable

agreements that include the provisions of section (2) of this rule. A water-

master shall not implement a rotation agreement that violates existing water

statutes, court decrees, instream water rights, minimum flows, other rules

of the Commission, or interferes with the rights of any appropriator not a

member of such agreement. If distribution of water by the rotation agreement

requires substantially more of the watermaster’s time than distribution

among the relative priorities, then the watermaster may require payment by

the appropriators for an assistant watermaster, as described in ORS 540.100.

“(4) The agreement may contain language describing how a call from

an appropriator or minimum flow senior to one or more appropriators in the

rotation will be honored.”

188 TPC, LLC v. Water Resources Dept.

providing that Petitioners could not divert water from the

Williamson River in 2016 and 2017.

“3. OWRD is a party to the Hyde Agreement and is

bound by its terms.

“4. The Hyde Agreement qualifies as a rotation agree-

ment pursuant to ORS 540.150 and OAR 690-250-0080.

“5. As a contract signed by the agency, the Hyde

Agreement is a final order as defined in ORS 183.310(6)(b).

“6. The Hyde Agreement is enforceable by OWRD, both

(1) as a rotation agreement pursuant to ORS 540.150 and

OAR 690-250-0080 and, independently, (2) as a final order

under ORS 183.310(6)(b) that is binding on OWRD.

“* * * * *

“8. The Final Orders are unlawful because they violate

the terms of the Hyde Agreement.

“* * * * *

“13. The 2016 and 2017 Final Orders are hereby

REMANDED to OWRD WITH INSTRUCTIONS that

OWRD comply with the terms of the Hyde Agreement,

such that, so long as the Hyde’s use of their water rights

does not exceed one-half of the total flow in Williamson

River upstream of the north boundary of Claimants’ prop-

erty, OWRD will not enforce any water rights now held

or later acquired by the United States or the Klamath

Tribes, except as provided for under Section B.1.(d) of the

Hyde Agreement, if enforcement of such water rights would

result in curtailment of the Hyde’s use of their water right

upstream of the current north boundary of their property,

as described in the Hyde Agreement.”

In addressing the appeal of that judgment, we begin

with the issue of subject matter jurisdiction. “Subject matter

jurisdiction is the authority to deal with the general subject

involved.” State v. Murga, 291 Or App 462, 466, 422 P3d 417

(2018). “Subject matter jurisdiction exists when the consti-

tution, the legislature, or the common law has directed a

specific court to do something about a specific kind of dis-

pute.” Id. “Circuit courts have subject matter jurisdiction

over all actions, unless a statute or rule of law divests them

of jurisdiction.” Id. A lack of subject matter jurisdiction can

be raised at any time. Id. at 465. “If a court lacks subject

Cite as 308 Or App 177 (2020) 189

matter jurisdiction over a claim brought before it, it must dis-

miss the proceeding.” Kleikamp v. Board of Commissioners

of Yamhill County, 301 Or App 275, 282, 455 P3d 546 (2019).

Here, the issue is whether Marion County Circuit

Court lacked subject matter jurisdiction because exclusive

jurisdiction to decide the precise issue raised by the peti-

tions for judicial review of the curtailment orders rested

in Klamath County Circuit Court, where the KBA judicial

review was already ongoing. To address that issue, we first

provide an overview of the applicable statutory provisions.

As described, this case involves enforcement of the

distribution of water on the Williamson River, which was

done through the watermaster’s curtailment orders, which,

in turn, were OWRD final orders in other than contested

cases. ORS 536.075(1). For such final orders, ORS 536.075

provides that a “party affected by a final order other than

contested case” may appeal that order in Marion County

Circuit Court, or in the court where the affected property

is located, and that “[t]he review shall be conducted accord-

ing to the provisions of ORS 183.484, 183.486, 183.497 and

183.500.” ORS 536.075(1). ORS 536.075(5) provides that the

filing of the petition for judicial review stays enforcement of

the order, “unless the commission or the department deter-

mines that substantial public harm will result if the order is

stayed.” The review provided for in ORS 536.075 “shall not

apply to any proceeding under ORS 537.670 to 537.695 or

ORS chapter 539.” ORS 536.075(7).

The KBA and judicial review of the KBA order are

governed by ORS chapter 539, which provides the procedure

for general stream adjudications, such as the KBA. See ORS

539.005(1) (“The Legislative Assembly declares that it is

the purpose of this chapter to set forth the procedures for

carrying out a general stream adjudication in Oregon.”). As

such, the determinations from the KBA cannot be reviewed

under the review mechanism provided for in ORS 536.075.

Instead, ORS chapter 539 sets out the exclusive judicial

review mechanism for such an order. As part of the notice

OWRD must provide to claimants or other parties of the

right to inspect evidence for a general stream adjudica-

tion, the OWRD “shall also state in the notice the county

190 TPC, LLC v. Water Resources Dept.

in which the determination will be heard by the circuit

court; provided, that the cause shall be heard in the county

in which the stream or some part thereof is situated.” ORS

539.090. Then, after the OWRD issues an order of determi-

nation of the water rights to the stream, such as the KBA

order, OWRD is required to gather all the original evidence

and file it with the order in the circuit court “wherein the

determination is to be heard.” ORS 539.130(1). Upon that

filing, that court is to issue an order for a hearing on the

determination, notice of which OWRD is to provide to all

claimants. ORS 539.130(2) - (3). Unlike for judicial review

under ORS 536.075, for stream adjudications under ORS

chapter 539, “[t]he determination of the [OWRD] shall be

in full force and effect from the date of entry in the records

of [OWRD], unless [stayed by a bond under] ORS 539.180.”

ORS 539.130(4).

ORS 539.150 governs the court proceedings to

review OWRD’s determination. It provides in relevant part

that “the proceedings shall be like those in an action not

triable by right to a jury” and, “[a]t any time prior to the

hearing provided for in ORS 539.130, any party or parties

jointly interested may file exceptions in writing to the find-

ings and order of determination, or any part thereof, which

exceptions shall state with reasonable certainty the grounds

and shall specify the particular paragraphs or parts of the

findings and order excepted to.” ORS 539.150(1). “After final

hearing the court shall enter a judgment affirming or modi-

fying the order of the director as the court considers proper,

* * * [and] [a]n appeal may be taken to the Court of Appeals

from the judgment in the same manner and with the same

effect as in other cases in equity.” ORS 539.150(4).

ORS chapter 539 further provides that, “[w]hile

the hearing of the order of the Water Resources Director

is pending in the circuit court, and until a certified copy of

the judgment, order or decree of the court is transmitted to

the director, the division of water from the stream involved

in the appeal shall be made in accordance with the order of

the director.” ORS 539.170. Thus, under ORS chapter 539,

unlike under ORS 536.075, the KBA order and the deter-

minations made in that order are not automatically stayed

Cite as 308 Or App 177 (2020) 191

pending judicial review and are required to be enforced by

the OWRD until the circuit court judgment issues. See also

ORS 539.130(4) (“The determination of the [OWRD] shall be

in full force and effect from the date of entry in the records

of [OWRD], unless [stayed by a bond under] ORS 539.180.”).

Here, petitioners filed petitions for judicial review

in Marion County Circuit Court for review of the curtail-

ment orders, which were final orders in other than contested

cases. As such, jurisdiction to review those orders typically

lies with Marion County Circuit Court under ORS 536.075,

which is what that court held in this case. That, however,

does not resolve the jurisdictional issue here presented,

which is whether the subject matter of the petitions herein

was nonetheless within the scope of the exclusive jurisdic-

tion of Klamath County Circuit Court, as provided in ORS

chapter 539, because petitioners’ claims were bound up with

the KBA, a proceeding under ORS chapter 539.10

We first recognize that that question presents an

issue of subject matter jurisdiction that is different from

how we would typically discuss subject matter jurisdiction

in the circuit courts, which are courts of general jurisdic-

tion. That is so, because the statutes create exclusive juris-

diction by way of a special proceeding in a particular circuit

court, instead of by way of a forum that is distinct from the

circuit courts. Under ORS chapter 539, once a stream adju-

dication is initiated, the special judicial review mechanism

10

We note that subject matter jurisdiction is the appropriate lens with which

to view this case and not venue. “Jurisdiction refers to a court’s authority to act

whereas ‘venue concerns the particular location where it is appropriate for the

court to exercise that authority.’ ” Dept. of Human Services v. R. M. S., 280 Or App

807, 810, 383 P3d 417 (2016) (quoting Kohring v. Ballard, 355 Or 297, 312, 325 P3d

717 (2014)). ORS chapter 539 contains both jurisdictional and venue aspects—

that is, it both creates an exclusive judicial process in a particular circuit court

for the stream adjudication and provides which circuit court is the appropriate

location for that judicial process to occur. See generally ORS chapter 539 (provid-

ing exclusive process for stream adjudications); see also ORS 536.075(7) (remov-

ing stream adjudications from circuit court judicial review under ORS 536.075);

ORS 539.090 (providing that the proper location for the circuit court determina-

tion in a stream adjudication is the county in which the stream is located). This

case, however, is not about whether petitioners chose the proper location for their

claim—an issue of venue. It is about whether Marion County Circuit Court could

hear that claim at all—an issue of subject matter jurisdiction—because that

claim fell within the exclusive stream adjudication process for which jurisdiction

had been established in Klamath County Circuit Court under ORS chapter 539.

192 TPC, LLC v. Water Resources Dept.

that is required by that adjudication process is noticed to

occur in a particular, identified circuit court. ORS 539.090.

And, once that particular court is identified, subject mat-

ter jurisdiction for that stream adjudication can only be in

that identified court, ORS 539.130, because, at the same

time, the legislature has divested all of the circuit courts

of the general judicial review mechanism for agency orders,

ORS 536.075(7), with respect to any proceeding under ORS

chapter 539. Thus, to state it more simply, under ORS

chapter 539, exclusive subject matter jurisdiction for a

stream adjudication is vested in a particular circuit court

once the stream adjudication process under that chapter is

initiated.

In this case, the parties appear to generally agree

that Klamath County Circuit Court has exclusive subject

matter jurisdiction to review the KBA order. We also con-

clude that that is the correct view under the controlling stat-

utes, as explained above. The more critical issue, and the

one on which the parties do not agree, is whether the subject

matter of this case, which was initiated in Marion County

Circuit Court as a judicial review of an agency order in an

other than contested case, nonetheless falls within Klamath

County Circuit Court’s exclusive subject matter jurisdiction

in the KBA. Our case law in the land use context provides

useful guidance for answering that question.

There are two parallel review mechanisms in the

land use context that can present a subject matter juris-

diction issue akin to the one presented here. Under ORS

197.825, jurisdiction over land use matters is divided

between the Land Use Board of Appeals (LUBA) and the

circuit courts. LUBA has exclusive jurisdiction to review

“any land use decision or limited land use decision of a local

government.” ORS 197.825(1). The circuit courts retain

jurisdiction of enforcement actions to enforce LUBA’s orders

and for “declaratory, injunctive or mandatory relief,” to

enforce a comprehensive plan or land use regulation. ORS

197.825(3). “In effect, ORS 197.825 draws a ‘jurisdictional

line’ between ‘the land use decision and review process and

the enforcement process.’ ” Flight Shop, Inc. v. Leading Edge

Aviation, Inc., 277 Or App 638, 643-44, 373 P3d 177 (2016)

(quoting Clackamas County v. Marson, 128 Or App 18, 22,

Cite as 308 Or App 177 (2020) 193

874 P2d 110, rev den, 319 Or 572 (1994)). Although not a per-

fect analogy, that line is similar to the line we must draw in

this case—between the exclusive review process for stream

adjudications under ORS chapter 539 and review of orders

in other than contested cases under ORS 536.075, such as

the curtailment orders in this case.

In determining where to draw that line in the land

use context, we have held that a circuit court lacks subject

matter jurisdiction to decide an enforcement action when the

substance of the claim brought involves issues that are sub-

ject to an ongoing land use decisional process, or could have

been brought in a prior land use decisional process. In Flight

Shop, Inc., the defendant had sought and obtained county

approval for a refueling station. The plaintiff appealed that

approval to LUBA, which remanded for further proceedings.

While those proceedings were ongoing, the plaintiff sought

enforcement of the land use regulations against the defen-

dant in circuit court seeking injunctive relief and statutory

fines on the basis that the defendant did not have required

approval for the refueling station, and, separately, to force

removal of a canopy built over the fuel tanks, which was

not made part of the site plan. 277 Or App at 646, 648. The

circuit court determined that it lacked subject matter juris-

diction over the enforcement action, and we agreed.

We explained that the dispute over the approval

of the refueling station was pending before the county

and could again be appealed to LUBA. As such, it was a

land use decision matter for the county or LUBA, but not

the circuit court. Id. at 646. We noted that the plaintiff’s

requested remedies of an injunction to prevent defendant

from operating its fueling station and an order to remove

the fuel tanks “underscore the impropriety of circuit court

intervention,” because whether or not such remedies would

be proper would have required predicting the outcome of

the land use decisional process. Id. at 646-47. Similarly, we

concluded that the circuit court did not have jurisdiction to

consider the canopy, because it was built after the defendant

obtained a building permit for it—a land use decision that

the plaintiff could have challenged when it was issued on the

basis that it was not made part of the defendant’s site plan.

Id. at 648.

194 TPC, LLC v. Water Resources Dept.

Similarly, in Rogue Advocates v. Board of Comm. of

Jackson County, 277 Or App 651, 661, 372 P3d 587 (2016),

rev dismissed, 362 Or 269 (2017), we concluded that the cir-

cuit court lacked subject matter jurisdiction over a claim

in a land use enforcement action that sought injunctive

relief to halt “illegal” operations. In that case, “[a]t the time

that plaintiff filed their enforcement action, the land use

decisional process had yet to determine * * * which activi-

ties were unlawful alterations of a lawful nonconforming

use and which of the structures were unlawful for want

of a floodplain development permit.” Id. The plaintiff thus

sought to interject the circuit court into determining what

was an “illegal” operation, which was part of the ongoing

land use decisional process.

Returning to this case, to determine whether

Marion County Circuit Court had subject matter jurisdiction

to review petitioners’ claim, we begin with the allegations

and requested relief in the petitions as viewed through the

lens of Oregon’s water law. Under Oregon’s prior appropria-

tion system, regulating water rights depends on the priority

date of respective water rights. When there is a shortage

of water, the senior water right holder is entitled to receive

their entire share of water before the next most senior water

right holder can receive their share, and so on. See Benz v.

Water Resources Commission, 94 Or App 73, 81, 764 P2d 594

(1988) (“[U]nder the law of prior appropriations, see, e.g., ORS

537.120, a senior appropriator who applies water to a benefi-

cial use and thereafter continues to do so holds a water right

that is superior to any water right obtained by a subsequent

junior appropriator.”). This system of water regulation is

enforced though OWRD’s watermasters, who, among other

duties, must “[r]egulate the distribution of water among the

various users of water from any natural surface or ground

water supply in accordance with the users’ existing water

rights of record in the Water Resources Department.” ORS

540.045(1)(a) (emphasis added); see also ORS 540.045(4) (“As

used in this section, ‘existing water rights of record’ includes

all completed permits, certificates, licenses and ground

water registration statements filed under ORS 537.605 and

related court decrees.”); ORS 539.170 (“While the hearing

of the order of the Water Resources Director is pending in

Cite as 308 Or App 177 (2020) 195

the circuit court, and until a certified copy of the judgment,

order or decree of the court is transmitted to the director,

the division of water from the stream involved in the appeal

shall be made in accordance with the order of the director.”).

In accordance with that duty, the OWRD, through the dis-

trict watermaster, issued the curtailment orders in this

case.

In their second amended petition challenging the

2016 order, petitioners asserted a single claim for relief

based on the Hyde Agreement, which was attached as an

exhibit. That claim for relief alleged, in relevant part:

“20. The [Hyde Agreement], Exhibit B, prohibits the

exercise of the water rights that [OWRD], through issuance

of the Final Orders, are enforcing.

“21. [OWRD] ha[s] made no investigation of the cur-

rent flow of the Williamson River on Petitioners’ land, or

the flow of the Williamson River at the point where it exits

Hyde Partnership’s land. [OWRD] ha[s] failed to make any

determination of whether under the terms of the [Hyde

Agreement] the Klamath Tribes and United States have a

right to make a call for enforcement of the Order. [OWRD]

ha[s] failed to make any determination that [OWRD] ha[s]

the authority under the terms of Oregon law and the [Hyde

Agreement] to enforce the water rights of the Klamath

Tribes and United States in a manner that prevents [peti-

tioners] from diverting and putting to beneficial use one

half of the total flow of the Williamson River.

“22. Pursuant to ORS 540.150, OAR 690-240-0080,

[governing “rotation agreements”] and the common law,

[OWRD is] required to distribute water in accordance

with written agreements between water users * * * [and]

[p]ursuant to those authorities, [OWRD is] prohibited from

enforcing the Klamath Tribes’ and United States’ provi-

sional water rights in a manner inconsistent with the

[Hyde Agreement].

“23. [OWRD’s] actions in issuing the Final Orders and

alleged enforcement of the water rights of the Klamath

Tribes and United States in the Upper Williamson River

violate the [Hyde Agreement] between the parties and

OWRD, was outside the range of discretion delegated to the

agency by law; and/or inconsistent with an agency rule, an

officially stated agency position, or a prior agency practice;

196 TPC, LLC v. Water Resources Dept.

and/or otherwise in violation of a statutory provision; and/

or not supported by substantial evidence.”

In their amended petition challenging the 2017

order, petitioners also asserted a single claim for relief

based on the Hyde Agreement, which was attached as an

exhibit. That petition alleged the identical allegations

found in paragraphs 20 and 21 set out above. Additionally,

the petition alleged that OWRD’s “actions in issuing the

Final Orders and alleged enforcement of the water rights

of the Klamath Tribes and United States in the Upper

Williamson River violate the [Hyde Agreement] between

the parties and OWRD, and is not supported by substantial

evidence.”

Petitioners sought substantively the same relief in

both petitions, which was described in the 2016 petition as

follows:

“A. A declaration that the Final Orders and the enforce-

ment of the Final Orders violated the terms of the [Hyde

Agreement], was outside the range of discretion delegated

to the agency by law; and/or inconsistent with an agency

rule, an officially stated agency position, or a prior agency

practice; and/or otherwise in violation of a statutory provi-

sion; and/or not supported by substantial evidence;

“B. A judgment reversing, setting aside, and/or vacat-

ing the Final Orders;

“C. An injunction prohibiting [OWRD] from enforcing

any call for water to fulfill the United States’ provisional

water rights, when the effect of the enforcement of those

water rights violates, or would violate, the terms of the

[Hyde Agreement].

“D. An award of Petitioners’ reasonable attorney fees

and costs pursuant to ORS 183.497;

“E. And such other relief the Court deems just and

equitable.”

Petitioners additionally sought in their 2017 petition “[a]n

injunction prohibiting [OWRD] from enforcing a call for

water to fulfill the United States’ water right for minimum

elevation levels for the Klamath Marsh.”

Cite as 308 Or App 177 (2020) 197

The core claim in the petitions is that OWRD could

not enforce the United States’ and Klamath Tribes’ water

rights according to the terms of those rights in the KBA

order, but rather was required to enforce them, if at all, as

set out in paragraph B.1.(c) (the no-call provision) of the Hyde

Agreement. The relief petitioners sought further lays bare

that core claim, because petitioner sought declarations and

injunctions prohibiting OWRD from enforcing the United

States’ and Klamath Tribes’ water rights in any manner

other than according to the terms of the Hyde Agreement.

That claim, and its requested relief, however, is

irreconcilably bound up with the KBA, because it required

Marion County Circuit Court to decide whether the Hyde

Agreement placed a limitation on the Klamath Tribes’

KBA-determined water right claims. The KBA adjudicator

had already rejected that notion, concluding that the no-call

provision in the Hyde Agreement was “not pertinent to the

determination of a water right claim.” That decision is cur-

rently on review before Klamath County Circuit Court in its

review of the KBA order.

That petitioners were asking Marion County Circuit

Court to interject itself into the water right determination

process under ORS chapter 539 is made more apparent by

the statutes that OWRD is required to follow pending the

KBA order judicial review process. OWRD, and its water

masters, are required by statute to regulate the distribu-

tion of water according to the water rights on record and

the OWRD’s stream determination orders. ORS 540.045(1);

ORS 539.170. Outside of a rotation agreement, as provided

in ORS 540.150, the statutes do not allow OWRD to regu-

late the distribution of water according to anything that is

not part of the water rights on record (as defined by ORS

540.045(4)) and stream determination orders, of which the

no-call provision in the Hyde Agreement was not. Thus,

petitioners were calling on Marion County Circuit Court to

make water right determinations with respect to the United

States’ and Klamath Tribes’ water rights claims made in

the KBA, which it could not do, because the jurisdiction to

do so rests solely with Klamath County Circuit Court under

ORS chapter 539.

198 TPC, LLC v. Water Resources Dept.

Further, even if petitioners’ allegation in its 2016

petition that the Hyde Agreement is a rotation agreement11

is separately parsed out from their single claim, that allega-

tion does not lead to a different result, because the allegation

contains no facts that would bring the claim within Marion

County Circuit Court’s subject matter jurisdiction, having

only made an assertion of law—that the Hyde Agreement

is an enforceable rotation agreement. The alleged facts to

support that claim can only be found within the four cor-

ners of the Hyde Agreement, which was attached to the peti-

tion. The text of the Hyde Agreement is plainly not separa-

ble from the KBA, whether it is characterized as a rotation

agreement or something else.

To begin with, the Hyde Agreement was a filed

document in the contested case for petitioners’ Claim 33

in the KBA, having the case caption—which was entitled

“Stipulation to Resolve Contests”—as the heading for the

agreement. The heart of the document, section B, set forth

the agreement. As discussed in the fact section, section B.1.(a)

set forth the agreement that Claim 33 should be approved

by the adjudicator as described in the Hyde Agreement, and

section B.1.(b) set forth the agreed limitations on petition-

ers’ exercise of their water right. Those two provisions were

incorporated into the KBA order as to petitioners’ deter-

mined water right claim, which is currently subject to pend-

ing exceptions before Klamath County Circuit Court.

Section B.1.(c), also called the no-call provision and

the basis of petitioners’ claim in this case, provided that it

was to be implemented by requesting that the adjudicator

adopt a limitation on the exercise of the United States’ and

Klamath Tribes’ Claim 633:

“(c) Claimants’ use of their water right upstream of

the current north boundary of Claimants’ property * * *

11

Again, ORS 540.150 provides:

“To bring about a more economical use of the available water supply,

water users owning lands to which are attached water rights may rotate in

the use of the supply to which they may be collectively entitled. Whenever two

or more water users notify the watermaster that they desire to use the water

by rotation, and present a written agreement as to the manner of rotation,

the watermaster shall distribute the water in accordance with the written

agreement.”

Cite as 308 Or App 177 (2020) 199

will not be curtailed in favor of any senior water right now

held or later acquired by the United States or the Klamath

Tribes. The United States and the Klamath Tribes agree

that they will not place any call on the Williamson River

that will result in the curtailment of Claimants’ use of

water in excess of the principles set forth in paragraph

B.1.(b), above. To ensure implementation of this provision,

the United States and the Klamath Tribes hereby request

that the Adjudicator’s Findings of Fact and Order of

Determination place a condition implementing the princi-

ples set forth in paragraph B.1.(b), above, thereby prevent-

ing exercise, upstream of the current north boundary of

Claimants’ property * * * of any rights adjudicated in favor

of the United States on behalf of the Klamath Tribes in

Claim No. 633. The United States and the Klamath Tribes

also request that the same provision be placed on any rights

adjudicated in favor of the Klamath Tribes with respect

to the portion of the Klamath Tribes’ Claim No. 612 that

incorporates Claim 633 filed by the United States on behalf

of the Klamath Tribes.”

(Emphases added.) The adjudicator did not incorporate

any limiting provision on the United States’ and Klamath

Tribes’ determined claims as requested, and that failure

is also currently subject to pending exceptions in Klamath

County Circuit Court.

Under the Hyde Agreement, the provisions B.1.(a),

B.1.(b), and B.1.(c), were all dependent upon the adjudicator’s

adoption of those provisions, as provided in section B.4.:

“4. If the Findings of Fact and Order of Determination

issued by the Adjudicator for Claim 33 does not conform to

the terms set forth in paragraph B.1., above, the Parties

reserve any right they may have to file exceptions to the

Findings of Fact and Order of Determination as to Claim

33 in the Circuit Court for Klamath County, and reserve

any rights they may have to participate in any future pro-

ceedings authorized by law concerning Claim 33.”

Section B.4. was adopted by the adjudicator into the KBA

order.

Petitioners cannot now attempt to get around the

determinations in the KBA order and the ORS chapter 539

review process, and obtain an automatic stay of OWRD’s

200 TPC, LLC v. Water Resources Dept.

statutory obligation under ORS 539.170 to distribute water

according to the determined claims pending that review

process, by seeking to separately enforce in a different

forum the provisions in the Hyde Agreement that the KBA

order omitted. It is akin to what the plaintiffs in Flight

Shop, Inc. sought to do when they asked the circuit court

to enforce land use regulations against the defendant while

the land use decisional process about the disputed land use

on the defendant’s property was still ongoing. 277 Or App at

646, 648. The circuit court in that case lacked subject mat-

ter jurisdiction to do so, and so did Marion County Circuit

Court in this case. Whether the no-call provision of the Hyde

Agreement is a required limitation on the United States’

and the Klamath Tribes’ water rights claims, as part of the

stipulation to settle contests, is currently part of the ongoing

KBA litigation, and it is subject to Klamath County Circuit

Court’s exclusive jurisdiction under ORS chapter 539. By

seeking to have Marion County Circuit Court instead treat

the Hyde Agreement as separately enforceable under ORS

540.150 or otherwise, petitioners sought to have Marion

County Circuit Court interject itself into that ongoing lit-

igation and decide for itself whether the Hyde Agreement

limited the United States’ and Klamath Tribes’ determined

claims.

The remedies sought by petitioners further high-

light why Marion County Circuit Court does not have sub-

ject matter jurisdiction. Petitioners sought all the same rem-

edies as previously discussed, which sought to place direct

limitations on the United States’ and Klamath Tribes’ deter-

mined water rights through an injunction against OWRD

from enforcing those determined claims. The determination

of those water right claims, however, is within the exclusive

jurisdiction of Klamath County Circuit Court.

Because Marion County Circuit Court lacked sub-

ject matter jurisdiction over the claim brought by petition-

ers, we reverse and remand with instructions to dismiss the

petitions for judicial review.

Reversed and remanded with instructions to dis-

miss petitions.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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