Appendix — Truckee-Carson Irrigation District v. United States

;\ Supreme Court, U.S.

| a) FILED

011224 FB 6 2002

OFFICE OF THE CLERK

No.

In the

Supreme Court of the United States

TRUCKEE-CARSON IRRIGATION DISTRICT;

Petitioner,

vs.

UNITED STATES OF AMERICA AND

PYRAMID LAKE PAIUTE TRIBE OF INDIANS,

Respondents.

On Petition for Writ of Certiorari

To The United States Court of Appeals

For the Ninth Circuit

APPENDIX TO PETITION FOR WRIT OF CERTIORARI

Michael J. Van Zandt*

Craig A. Pridgen

Elizabeth P. Ewens

McQUAID, METZLER,

BEDFORD & VAN ZANDT, LLP

Attorneys for Petitioners

221 Main Street, 16" Floor

San Francisco, CA 94105

Telephone: 415/905-0200

* Counsel of Record

TABLE OF CONTENTS

Opinion filed July 5, 2001 .......-e seer eee ee ersten A-1

Order dated May 14, 1999 .....-- secre reece rer reercees B-1

State Engineer’s Ruling 4116 .....------ eee eeeee reer C-1

Order dated November 8, 2001 ......-.-- eee enensacesenes D-1

USCS § 383 ....... POP Oe ETT eT TTT Tees erererr E-1

POE GRD BID onan nc nc cha cad esannsscssnecusasanes F-1

MRS SSISOGS 2. nnn ccc ccc cess ecceassscccasccescnss G-1

WIG osc sine cee w send suas dans eanennseasas H-1

es >. ee ee oe ee eee ee eee I-1

Orr Ditch Decree .. 0.20. cece ccc ccs c recs ces eccceseacees J-1

U.S. v. Alpine 983 F.2d .. 2... ee sec cee cere cceereeereccss K-1

U.S. v. Alpine 27 F.Supp. ....--seceeeeereeererseerresss L-1

Petition for Panel Rehearing August 20, 2001 .......-++++-- M-1

i

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

and

PYRAMID LAKE PAIUTE TRIBE OF INDIANS,

Petitioner, |

%*

ORR WATER DITCH COMPANY, et al.,

Defendants,

and

TOWN OF FERNLEY; TRUCKEE-CARSON IRRIGATION DISTRICT;

THE STATE ENGINEER,

Defendants-Appellees.

No. 99-16817

D.C. No. CV-N-A-3-LDG

Town of Fernley; Appeal of State Engineer Ruling No. 4116

OPINION ji

Appeal from the United States District Court for the District of Nevada

Lloyd D. George, District Judge, Presiding

Argued and Submitted

December 11, 2000 — San Francisco, California a

Filed July 5, 2001

Before: Mary M. Schroeder, Chief Judge, John T. Noonan and William A.

Fletcher, Circuit Judges.

Opinion by Judge William A. Fletcher;

Dissent by Judge Noonan

FOR PUBLICATION

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

and

PYRAMID LAKE PAIJUTE TRIBE OF INDIANS,

Petitioner,

v.

ORR WATER DiTCH COMPANY, et al.,

Defendants,

and

TOWN OF FERNLEY; TRUCKEE-CARSON IRRIGATION DISTRICT;

THE STATE ENGINEER,

Defendants-Appellees.

No. 99-16817

D.C. No. CV-N-A-3-LDG

Town of Fernley; Appeal of State Engineer Ruling No. 4116

SUMMARY

Real Estate/Water Rights

The court of appeals reversed a judgment of the district court. The

court held that the 1902 withdrawal of land from public entry for the

federal Newlands Reclamation Project (Project) in Nevada did not initiate

the appropriation of a water right subject to protection under the Nevada

anti-forfeiture statute.

Appellee town of Fernley, Nevada, applied to the Nevada State

Engineer to change the manner and place of use of 26 separate water use

permits in the Project. The federal government operated the Project, but

water rights in the project were held by individual landowners pursuant to

contracts between the landowners and the Department of the Interior. The

reservation of Appellants Pyramid Lake Paiute Tribe of Indians (Tribe)

surrounded Pyramid Lake. The Tribe opposed the application on the basis

that the current flow of the Truckee River into Pyramid Lake would be

diminished if the application were granted, thus adversely affecting the

Tribe's economy, culture, and hentage. The United States joined the Tribe

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in opposition to the transfer. The Tribe and the government contended that

the water rights at issue no longer existed because the prior holders of

those rights failed to exercise them for an extended period of time, and

thus the water rights were forfeited under Nevada statutory law, or

alternatively, were abandoned under Nevada common law.

The State Engineer rejected the Tribe's forfeiture argument,

concluding that the rights at issue were exempt from forfeiture under the

anti-forfeiture statute, as the appropriation of

the rights was "initiated" in 1902, when the United States initiated the

Project. He further found that the rights were not abandoned under the

common law as Nevada did not recognize a legal presumption in favor of

abandonment upon a showing of prolonged non-use, and absent such a

presumption the Tribe had produced no evidence of abandonment.

The Tribe and the government appealed the S.ate Engineer' s

ruling to federal district court. The district court affirmed the State

Engineer's decision. The Tribe and the government appealed.

[1] The Nevada forfeiture statute, which took effect on March 22,

1913, provides that a water right is forfeited if it is shown not to have been

exercised for five successive years. However, under an anti-forfeiture

provision, forfeiture does not apply to water rights that were vested, or for

which appropriations were initiated, before the forfeiture statute took

effect.

[2] In order for a given right to receive the protection of the

anti-forfeiture provision, an individual landowner must have taken

affirmative steps to appropriate water for his or her own use by the

statute's effective date. At the very least, he or she must have contracted

with the federal government for delivery of Project water prior to that date.

Thus, the State Engineer erred in concluding that all water rights were

initiated as of 1902. The district court made the same error in concluding

that because each individual Project water right had a "priority date" of

July 2, 1902, it was therefore initiated, within the meaning of the

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anti-forfeiture statute, on that same date.

[3] Water rights exempted under the anti-forfeiture statute are

subject to the common law principle of abandonment, which requires a

showing of subjective intent on the part of a water-right holder to give up

that right. [4] Under Nevada case law, although a prolonged period of

non-use may be taken into consideration in determining whether a water

right has been abandoned, such non-use does not raise a rebuttable

presumption of intent to abandon. [5] Abandonment is determined from all

the surrounding circumstances. Where there is evidence of a substantial

period of non-use combined with evidence of the construction of structures

which are inconsistent with irrigation, the payment of taxes or

assessments, alone, will not defeat a claim of abandonment. Where, on the

other hand, there is only evidence of non-use combined with the finding of

a payment of taxes or assessment, there will not be clear and convincing

evidence to establish abandonment.

Judge Noonan dissented, writing that the anti-forfeiture statute

exempted the water rights at issue, as the initiation date for all of those

rights was 1902, at the time the United States began the Project.

COUNSEL

Katherine J. Barton, U.S. Department of Justice, Washington, D.C., for

plaintiff-appellant United States of America.

Robert S. Pelcyger, Fredericks, Pelcyger & Hester, Louisville, Colorado,

for petitioner-appellant Pyramid Lake Paiute Tribe of Indians.

Ross B. de Lipkau, Marshall Hiss Cassas & de Lipkau, Reno, Nevada, for

defendant-appellee Town of Fernley.

Michael J. Van Zandt, McQuaid, Metzler, Bedford & Van Zandt, San

Francisco, California, for defendant-appellee Truckee-Carson Irrigation

District.

David Creekman, Carson City, Nevada, for defendant-appellee The State

Engineer.

OPINION

W. FLETCHER, Circuit Judge:

The town of Fernley, Nevada, has applied to the Nevada State

Engineer to change the manner and place of use of rights to roughly 280

acre-feet of water from the federal Newlands Reclamation Project. The

Pyramid Lake Paiute Tribe of Indians and the federal government oppose

the proposed transfers, contending that the water rights at issue have been

forfeited or abandoned under Nevada state law. The district court affirmed

the decision of the Nevada State Engineer that none of the water rights had

been forfeited or abandoned. We reverse and remand for further

proceedings.

I. Factual Background

The Newlands Reclamation Project ("the Project") diverts the flow

of the Truckee and Carson rivers to supply the needs of water users in

Nevada. The Project has two divisions,

named after the two rivers. At Derby Dam, the Project diverts part of the

flow of the Truckee River southward through the Truckee Canal to join the

Carson River at Lahontan Reservoir. From Lahontan Reservoir, the

augmented Carson flows east, where its water is distributed to users in and

around the city of Fallon, in what is known as the "Carson Division" of the

Project. The Project also diverts part of the water in the Truckee Canal

before it reaches the Lahontan Reservoir. The water from this diversion is

distributed to users in and around the town of Fernley, in what is known as

the "Truckee Division." Water from the Truckee River that is not diverted

through the Truckee Canal into either of the divisions flows north into

Pyramid Lake. The federal government operates the Newlands Project, but

water rights in the Project are held by individual landowners pursuant to

contracts between the landowners and the Department of the Interior. The

nature and extent of those water rights are determined, in large part, by

Nevada state law.

The town of Fernley seeks to satisfy its growing water needs by

acquiring water rights in the Truckee Division of the Project. This water

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has historically been used for irrigation purposes, but Fernley would use it

for municipal and industrial purposes instead.' Fernley filed an

application with the Nevada State Engineer to change the manner and

place of use of 26 separate water use permits it has acquired, totaling

roughly 280 acre-feet of Project water. This is a relatively small transfer,

but it raises questions common to many other transfers contemplated by

Fernley.”

The Pyramid Lake Paiute Tribe of Indians ("the Tribe") resides on

a half-million acre reservation in Nevada that surrounds Pyramid Lake, a

body of water the Supreme Court has described as perhaps "the most

beautiful desert lake in North America." Nevada v. United States, 463 U.S.

110, 114 (1983). Pyramid Lake once received the entire flow of the

Truckee River, but it now receives only what remains after the river has

been tapped by the Newlands Project. In years past, Project diversions

have adversely affected the size and ecology of the lake, threatening

several varieties of fish, one of which (the cui-ui) is an endangered

species. If Fernley’ s transfer application is granted, its water rights will be

‘Congress authorized municipal use of Project waters

in the Truckee- Carson-Pyramid Lake Water Rights

Settlement Act. Pub. L. No. 101-618 ° 209(a)(1), 104 Stat.

3289 (1990).

*2We note that Nevada has recently revised Nev. Rev.

Stat. § 533.060 and Nev. Rev. Stat. § 533.037, pertaining to

forfeiture and abandonment. These revisions, however, do

not affect this case because they do not apply to water rights

that have been challenged in a legal or administrative

proceeding pending on or before April 1, 1999. Moreover,

neither statute "constitute[s] a legislative declaration that the

law to be applied in any such pending proceeding is different

from or the same as set forth in this act." See Section 7 of ch.

15, Statutes of Nev. 1999, at 2364.

A-6

exercised and the current flow of the Truckee River into Pyramid Lake

will be diminished. See United States v. Alpine Land & Reservoir Co., 878

F.2d 1217, 1221 (9th Cir. 1989) ("Alpine IT"). The Tribe opposes Fernley's

application because its economy, culture, and heritage are linked to the

size of the flow of the Truckee River and to the health of Pyramid Lake.

The Tribe entered a timely opposition to Fernley's proposed

transfer, and the United States joined the Tribe in opposition to the

transfer. See 1990 Settlement Act, P.L. 101-618, 104 Stat. 3289 §§ 202,

209 (assigning Secretary of Interior the duty to protect the Tribe and the

resources of Pyramid Lake); Pyramid Lake Paiute Tribe of Indians v.

Morton, 354 F. Supp. 252, 256 (D.D.C. 1973), rev'd on other grounds, 499

F.2d 1095 (D.C. Cir. 1974). The Tribe and the government contend that

the water rights that Fernley seeks to transfer no longer exist because the

prior holders of those rights failed to exercise them for an extended period

of time. In water law parlance, they contend that the water rights have been

"forfeited" under Nevada statutory law, or have been "abandoned" under

Nevada common law.

The initial decisions on the proposed transfers were made by the

Nevada State Engineer pursuant to his authority under Nev. Rev. Stat. §§

533.345 and 533.370, and United States v. Alpine Land & Reservoir Co.,

503 F. Supp. 877, 885 (D. Nev_-1980) ("Alpine Decree"), aff'd as modified,

697 F.2d 851, 857-58 (9th Cir. 1983) ("Alpine I"), cert. denied, 464 U.S.

863 (1983). The State Engineer approved the transfer of all but a few of

the water rights at issue. He first entered factual findings that Fernley was

the bona fide owner of the water rights and that the town had been payitig

the operation and maintenance fees for those rights. He then made a

number of other legal and factual findings. We describe those that are

relevant to this appeal.

First, the Engineer rejected the argument that some of the water

rights at issue had been forfeited under Nev. Rev. Stat. § 533.060(2)

(1997).2 The Tribe and the government had agreed that Nevada law

protected from forfeiture water rights that had been "vested," or for which

appropriations had been "initiated," before the passage of the forfeiture

statute on March 22, 1913. See Nev. Rev. Stat. § 533.085. But they

contended that some of the water rights at issue were subject to forfeiture

because the rights had not vested, and appropriations had not been

initiated, before March 22, 1913. The Engineer disagreed, concluding that

under Nevada's "relation back" doctrine, appropriations of all of the rights

at issue were "initiated" within the meaning of Nev. Rev. Stat. § 533.085

in July 1902, when the United States government initiated the Newlands

Project. The Engineer therefore ruled that all of the water rights at issue

were exempt from forfeiture under Nev. Rev. Stat. § 533.085.

33For ease of reference in this opinion, we will refer

to the version of Nev. Rev. Stat. § 533.060(2) in effect before

the 1999 amendments to that statute without specifically

noting that we are referring to the pre-1999 version. The

statute, as it existed before 1999, provides: :

Except as otherwise provided . . . if the owner

or owners of any such ditch, canal, reservoir,

or any other means of diverting any of the

public water fail to use the water therefrom or

thereby for beneficial purposes for which the

right of use exists during any successive years,

the right to so use shall be deemed as having

been abandoned, and any such owner or

owners thereupon forfeit all water rights,

easements and privileges appurtenant thereto

theretofore acquired, and all the water so

formerly appropriated by such owner or

owners and their predecessors in interest may

be again appropriated for beneficial use the

same as if such ditch, canal, reservoir or other

means of diversion had never been

constructed, and any qualified person may

appropriate any such water for beneficial use.

A-8

Second, the Engineer rejected arguments that non-forfeited water

rights were abandoned under Nevada common law. He ruled that Nevada

did not recognize a legal presumption in favor of abandonment upon a

showing of prolonged non-use, and that in the absence of such a

presumption the Tribe had produced "no evidence" to indicate that

abandonment had occurred. The Tribe and the government appealed the

Engineer's rulings to federal district court in Nevada, pursuant to the

procedure approved by this court in Alpine I. See 697 F.2d at 857-58; see

also United States v. Orr Water Ditch Co., 914 F.2d 1302, 1308 (9th Cir. ©

1990). The district court affirmed and denied a later motion for

reconsideration. The Tribe and the government appeal to this court. We

reverse and remand.

II. Legal Background -

Water litigation is a weed that flowers in the arid West. The

federal courts first considered water rights issues in the Newlands Project

in 1913, in a quiet-title action instituted by the United States. Over thirty

years after that suit was initiated, a Nevada district court finally

adjudicated water rights in the Truckee Division of the Project. See United

States v. Orr Water Ditch Co., In Equity, Docket No. A-3 (D. Nev. Sept.

4,1944) ("Orr Ditch Decree"). Thirty-six years after that, we adjudicated

water rights in the Carson Division. See Alpine Decree, 503 F. Supp. at

877, aff'd, Alpine I, 697 F.2d at 851.

Of particular relevance to this case is a series of decisions

involving water rights in the Carson Division. Following the Alpine

Decree and our affirrnance of that decree in Alpine J, many water right

holders in the Carson Division sought to transfer water rights that were

appurtenant to other Project land to their own land. As in this case, the

Tribe opposed many of the transfer applications on the grounds that the

rights had been forfeited or abandoned. When the State Engineer ruled that

Nevada's statutory forfeiture provision did not apply to the water rights at

issue and that there was no evidence of abandonment, the Tribe appealed.

A-9

Initially, a district court affirmed the Engineer on the ground that Nevada

law did not apply at all, but in Alpine II we disagreed. We reversed and

remanded to the district court for review of the Engineer's findings on

forfeiture and abandonment based on state law. On remand, the district

court affirmed the Engineer's findings. Once, again, the Tribe appealed to

this court, and, in United States v. Alpine Land & Reservoir Co., 965 F.2d

731 (9th Cir. 1992), amended by United States v. Alpine Land & Reservoir

Co., 983 F.2d 1487 (9th Cir. 1993) ("Alpine IIT’), we once again reversed.

On the question of forfeiture, we held that the Engineer had erred

in determining that, because of the exemption created in Nev. Rev. Stat. §

533.085. Nevada's forfeiture statute did not apply to the water rights in

question. The Engineer had written, "The existing Newlands water rights

that are the subject of the change applications were vested in the name of

the United States when Congress authorized Lahontan Dam in 1902." Jd.

at 1495. We disagreed, noting that "the individual rights at issue. . . did not

vest in 1902 when the United States obtained Project-wide rights." Jd. at

1496. We concluded that individual water rights were exempted from the

Nevada forfeiture statute only if the rights were vested, or the

appropriations had been initiated, prior to 1913:

If the right vested before March 22, 1913, or if the

appropriation of the right was initiated in accordance with

the law in effect prior to that date, then it is not subject to

possible forfeiture under NRS 533.060.

Id. We therefore remanded for an individualized determination, for each

parcel at issue, of "whether and when the right vested, and under which

law appropriation was initiated." Jd; see also United States v. Alpine Land

& Reservoir Co., 27 F. Supp. 2d 1230 (D. Nev. 1998) ("Alpine IV")

(district court's opinion on remand).

On the question of abandonment, we held that the State Engineer

had abused his discretion by failing to conduct an individualized inquiry to

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determine whether each water right sought to be transferred had been

abandoned by the transferor property owner. Alpine IIT, 983 F.2d at 1494.

As of the time we write this opinion, the State Engineer has yet to make

the findings required under Alpine III. Therefore, while our cases

involving the Carson Division (in particular, Alpine II) set forth the legal

rules for adjudicating questions of forfeiture and abandonment of water

rights in the Newlands Project, this Truckee Division case presents the

first time we have been asked to review the State Engineer's application of

these rules.

Ill. The Law of Forfeiture and Abandonment

Water rights can be lost in Nevada either through forfeiture or

abandonment. In most cases, it is easier to establish forfeiture than

abandonment because forfeiture requires only a showing of non-use for

five successive years. Abandonment, on the other hand, is the

"relinquishment of the right by the owner with the intention to forsake and

desert it." In re Manse Spring, 108 P.2d 311, 315 (Nev. 1940) (citation

omitted). Abandonment therefore requires a showing of actual intent to

abandon. Non-use can provide "some evidence" of intent, see Jn re

Franktown Creek, 364 P.2d 1069, 1072 (Nev. 1961), but it is not by itself

sufficient to establish abandonment. In the case now before us, the Tribe

and the government argue that some of the water rights in question are

subject to forfeiture. Fernley argues that none of the water rights are

subject to forfeiture. The parties agree that all of the water rights are sub-

ject to abandonment.

A. Forfeiture

[1] Under Nevada law, a water right is forfeited if it is shown not

to have been exercised for five successive years. See Nev. Rev. Stat. §

533.060. However, Nevada law specifies that the forfeiture statute does

not apply to water rights that were vested or for which appropriations were

initiated before that statute took effect, on March 22, 1913:

Nothing contained in this chapter [establishing the

A-11

statutory rule of forfeiture] shall impair the vested right of

any person to the use of water, nor shall the right of any

person to take and use water be impaired or affected by

any of the provisions of this chapter where appropriations

have been initiated in accordance with law prior to March

22, 1913. =

Nev. Rev. Stat. § 533.085(1). If a water right is exempted from the Nevada

forfeiture statute, it may be lost only through abandonment.

We considered the relationship between Nev. Rev. Stat. § 53 3.060

and § 533.085 in our decision in Alpine III. In that case, the State Engineer

had determined that the forfeiture statute did not apply to the water rights

at issue because "[t]he existing Newlands water rights that are the subject

of the change applications were vested in the name of the United States

when Congress authonzed Lahontan Dam in 1902. 983 F.2d at 1495. The

Engineer assigned all Newlands Project water rights a single vesting date

for purposes of Nev. Rev. Stat. § 533.085 — the 1902 date on which

Congress initiated the Newlands Project. We rejected this approach in

Alpine IIT and instead held that a water right had to be vested, or that

appropriation of that right had to have been initiated, for the particular

parcel of land to which it was appurtenant for that

nght to be exempt from forfeiture under § 53 3.085. See 983 F.2d at

1495-97.

Given the purpose of § 533.085, this was a sensible construction

of the terms "vested" and "initiated" as used in that statute. The passage of

the Nevada forfeiture statute in 1913

made water rights more precarious. Prior to its passage, water rights could

be lost only through abandonment; now they could aiso be lost through

forfeiture. To the extent that a water right could be lost more easily after

the passage of the forfeiture statute, one "stick" in the "bundle of sticks"

that had previously comprised that water right had been taken away.

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For water-right holders whose rights had vested by 1913, or who

had already initiated appropriations of their rights by that date, the new

forfeiture statute could work unfairly because these holders had obtained

or initiated appropriations of their rights on the understanding that those

rights would not be subject to forfeiture. Indeed, with respect to those

individuals, the statute could be more than Just unfair; it could even be

unconstitutional, for its removal of one stick from the bundle of sticks

comprising a water right could be seen as an unconstitutional taking of

property. The Nevada legislature alleviated concerns about unfairness and

unconstitutionality by exempting both categories of holders from forfeiture

under § 53 3.060. If a holder either possessed a vested water right on

March 13, 1913, or had initiated appropriation of a water right by that

date, the right-holder was protected from forfeiture by § 533.085. In the

jargon of modern takings law, if a water right holder had an

investment-backed expectation as of the effective date of the statute, that

holder's water right was exempt from forfeiture.

Given the purpose of § 533.085, it does not make sense to read the

term "initiated" to refer to 1902, the date the United States initiated the

water rights for the entire Newlands Project. Such a reading would protect

water-right holders who had done nothing at all to acquire water rights as

of the date of the forfeiture statute. There was reason to protect individuals

whose investment-backed expectations would be violated by § 533.060,

and § 533.085 did so by exempting their rights from forfeiture. But there

was no reason to protect individuals who began the process of acquiring

water rights after the effective date of the statute, because they did so with

notice that any water rights they acquired .would be subject to forfeiture.

As we explained in Alpine III,

According to the Nevada Supreme Court, the Nevada

legislature included the provision exempting pre-1913

nghts from impairment to refrain from infringing upon

rights which had accrued at that time, so as to avoid any

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question of the constitutionality of the Act." Manse

Spring, 108 P.2d at 315.

* * *

The rights acquired by the farmers in the Project from the

United States were more akin to newly appropriated water

rights than to the rights such as those in Manse Spring that

had remained appurtenant to a particular tract of land and

had been passed with the land. In obtaining water rights

from the United States, the Project farmers were really in

the same position as farmers appropriating water from its

source. Accordingly, with the purpose of the statute in

mind, it would not make sense to grant to every farmer a

Project water right with a 1902 vesting date regardless of

when the farmer actually obtained the right to irrigate his

land. aa

* * *

If the right vested before March 22, 1913, or if the

appropriation of the right was initiated in accordance with

the law in effect prior to that date, then it is not subject to

possible forfeiture under NRS 533.060.

Alpine III, 983 F.2d at 1496 (emphasis added).

[2] We held in Alpine III that in order for a given water right to

receive the protection of Nev. Rev. Stat. § 533.085, that water right must

have vested, or an individual landowner must have "initiated"

appropriation of that right, before March 22, 1913. In other words, the

A-14

landowner must have taken affirmative steps to appropriate water for his

or her own use by that date. In practice, this means that the individual must

have (at the very least) contracted with the federal government prior to that

date for delivery of Project water. Accordingly, we hold that the State

Engineer erred in concluding that, for purposes of § 533.085, all water

rights in the Truckee Division were "initiated" when land for the Newlands

Project was withdrawn from public entry by the federal government in

1902. We further hold that the district court made the same error when, in

affirming the Engineer, it concluded that because each individual Project

water right has a "priority date" of July 2, 1902, it was therefore initiated,

within the meaning of § 533.085, on that same date.

We agree with the Engineer and the district court that the priority

date for all of the rights at issue in this case is 1902. The Orr Ditch Decree,

affirmed by the Supreme Court, established this priority date. See Nevada

v. United States, 463 U.S. at 117. But our holding in Alpine III did not

concern a priority date. Rather, it concerned the forfeiture exemption

provided by § 533.085.

In Alpine III, we remanded the case for a determination of vesting

and initiation dates for particular parcels. The district court to which we

remanded in Alpine III understood our holding in the same way we

understand it today, writing that Alpine III "drew a distinction between the

rights obtained by the United States and the rights appurtenant to

particular tracts of land" for purposes of Nev. Rev. Stat. § 533.085. Alpine

IV, 27 F. Supp. 2d at 1240. The district court accordingly directed the

Engineer to determine "when the individual landowner took the ‘first steps'

to appropriate the water appurtenant to his land, and not [to] rely on the

1902 priority date." Jd. at 1241. Failure to do so, the district court

observed, would be an abuse of discretion. See id.

Our reading of Alpine III is reinforced by the history of that

decision. After a petition for rehearing, the Alpine II panel modified its

opinion. The original language of the Alpine IJ] remand order appears at

A-15

965 F.2d 739:

On remand, in order to determine whether a water right

may have been forfeited, it first must be determined

whether when [sic] the right vested. Only if the right

vested after March 22, 1913 would it be subject to

possible forfeiture under NRS 533.060.

This language caused some concern to the appellees in that case, the State

Engineer and the Truckee-Carson Irrigation District ("TCID"). They

pointed out that Nev. Rev. Stat. § 533.085 protects not only the "vested

right of any person to the use of water" but also "the right of any person to

take and use water . . . where appropriations have been initiated in

accordance with law prior to March 22, 1913." Nev. Rev. Stat. 533.085

(emphasis added). TCID argued in its brief that " [t]he Court's focus on the

vesting date of these water rights ignores the fact that the same protection

afforded vested water rights was also extended to non-vested water rights

in the Nevada Water Law of 1913." It then stated that there was "no

question" that the water rights at issue were "initiated" prior to 1913. The

State Engineer's brief argued that Alpine III had ignored the principle of

"relation back" by separating "vesting date" from "priority date," and had

erred in distinguishing the water rights acquired by the federal government

from the Project farmers’ water rights. Once the farmers received their land

patents, the Engineer argued, "the Project farmers acquired the

Government's interest in the water rights, and once the water was put to

beneficial use, these rights dated back to 1902."

In response to the petition for rehearing, the Alpine JIT panel

modified its opinion so that the final paragraph of Section IV now reads:

On remand, in order to determine whether a water right

may have been forfeited, it first must be determined

whether and when the right vested, and under which law

appropriation was initiated. If the right vested before

A-16

March 22, 1913 or if the appropriation of the right was

initiated in accordance with the law in effect prior to that

date, then it is not subject to possible forfeiture under NRS

533.060.4

The panel thus rejected the argument that all appropriations were initiated

in 1902, and remanded for individual determinations.

B. Abandonment

[3] In addition to claiming that some of the water rights at issue in

this case have been forfeited under Nevada statutory law, the Tribe also

claims that some of them have been abandoned under Nevada common

law. Under Nevada law, abandonment is "the relinquishment of the right

by the owner with the intention to forsake and desert it." Manse Spring,

108 P.2d at 315. Abandonment thus requires a showing of subjective intent

on the part of the holder of a water right to give up that right.

Subjective intent is difficult to prove by direct evidence. Few

water-right holders say in front of witnesses, "I intend to abandon my

water rights." Therefore, indirect and circumstantial evidence must almost

always be used to show abandonment. Many states have adopted legal

presumptions designed to ease the burden upon the challenger and to

increase the likelihood that water will be put to beneficial use. In

particular, nearly all western states presume an intent to

abandon upon a showing of a prolonged period of non-use. See, e.g.,

Okanogan Wilderness League, Inc., v. Town of Twisp, 947 P.2d 732, 739

(Wash. 1997); In re Clark Fork Drainage Area, 908 P.2d 1353, 1356

(Mont. 1995); Consolidated Home Supply Ditch and Reservoir Co. v.

Town of Berthoud, 896 P.2d 260, 266 (Cob. 1995); State ex rel. Reynolds

v. South Springs Co., 452 P.2d 478, 482-83 (N.M. 1969); Yenizer v.

‘The underlined portions of the paragraph were

added or altered in the amended version of Alpine III.

A-17

Pian iii se seamen itt Sse ANAS ERLE RLS RT SN

Hemenway, 440 P.2d 7,13 (Wyo. 1968); Utt v. Frey, 39 P. 807, 809 (Cal.

1895).

The State Engineer ruled in this case, however, that Nevada does

not include such a presumption in its common law of abandonment, and

that the Tribe could not therefore shift the burden of proof to require

Fernley to show affirmatively that there was no intent to abandon merely

by showing a prolonged period of non-use. The district court agreed.

While we consider the State Engineer's interpretations of Nevada statutes

"persuasive," they are not controlling. We review the district court's

conclusions of law de novo. See Alpine II, 878 F.2d at 1222; Town of

Eureka v. State Engineer, 826 P.2d 948, 949 (Nev. 1992). On de novo

review, we agree with the district court.

[4] Under Nevada case law, a prolonged period of non-use may be

taken into consideration in determining whether a water right has been

abandoned, see Manse Spring, 108 P.2d at 316, and non-use "may

inferentially be some evidence of an intent to abandon." Franktown Creek,

364 P.2d at 1072. But Nevada law goes no further than an inference. It is

only a matter of degree, but a legal presumption is stronger than an

inference. None of the cases cited by Fernley explicitly disclaims a

presumption, but neither the Tribe nor the government cites any Nevada

decision showing that Nevada law has changed since our decision in

Alpine III, where we stated "[t]hough the longer the period of nonuse, the

greater the likelihood of abandonment, we find no support for a rebuttable

presumption under Nevada law." 983 F.2d at 1494 n.8; see also Alpine IV,

27 F. Supp. 2d at 1242. We acknowledge that Nevada appears to be the

only western state that maintains this position, but in our federal system it

is entitled to do so.’

SNevada has recently reaffirmed its commitment to a

limited view of the law of abandonment. As amended in

1999, Nev. Rev. Stat. § 533.060(4) now states (emphasis

added):

A-18

[5] On appeal to this court, the Tribe asserts that the State

Engineer was wrong to consider payment of operation and maintenance

fees as sufficient evidence to support a finding that the particular water

rights had not been abandoned. According to the Nevada Supreme Court,

abandonment is to be determined "from all the surrounding

circumstances," and those circumstances certainly include the payment of

assessments and taxes. Revert v. Ray, 603 P.2d 262, 264 (Nev. 1979); see

also Alpine IV, 27 F. Supp. 2d at 1243. But payment of fees is not the only

factor to be considered when there is conflicting evidence on the issue of

abandonment. Other important circumstances to be considered include

non-use of the water right, see Franktown Creek, 364 P.2d at 1072; Manse

Spring, 108 P.2d at 316, and the construction of structures incompatible

with irrigation. See Nev. Rev. Stat. § 533.045 (“When the necessity for the

use of water does not exist, the right to divert it ceases, and no person shall

be permitted to divert or use the waters of this state except at such times as

the water is required for a beneficial purpose."). In order to guide the

In a determination of whether a right to use

surface water has been abandoned, a

presumption that the right to use the surface

water has not been abandoned is created

upon the submission of records, photographs,

receipts, contracts, affidavits or any other

proof of the occurrence of any of the

following events or actions within a 10-year

period immediately preceding any claim that

the right to use the water has been

abandoned: (a) The delivery of water; (b) The

payment of any costs of maintenance and

other operational costs incurred in delivering

the water; (c) The payment of any costs for

capital improvements, including works of

diversion and irrigation; or (d) The actual

performance of maintenance related to the

delivery of the water.

A-19

al Nala SS hia A I Ll eR AN DRL EN Oe

district court and the State Engineer in this and other abandonment

proceedings, we endorse the district court's statement in Alpine IV:

Where there is evidence of both a substantial period of

nonuse, combined with evidence of an improvement which

is inconsistent with irrigation, the payment of taxes or

assessments, alone, will not defeat a claim of

abandonment. If, however, there is only evidence of

nonuse, combined with the finding of a payment of taxes

or assessments, the court concludes that the Tribe has

failed to provide clear and convincing evidence of

abandonment.

27 F. Supp. 2d at 1245.

IV. Application of the Law of Forfeiture and Abandonment

A. Forfeiture

As explained above, the State Engineer ruled that, for purposes of

Nev. Rev. Stat. § 533.085, the water rights at issue all have an initiation

date of 1902. He therefore found that none of the water rights is subject to

forfeiture under § 533.060. The Engineer also made alternate findings

based on the assumption that the water rights were not initiated in 1902

and were therefore subject to forfeiture.

In his alternative findings, the Engineer assumed that the water

rights appurtenant to parcels 1, 3, 8, 9, 10, 16, 19, and 20 were not

protected from forfeiture. Accordingly, the Engineer examined evidence

introduced by the Tribe to determine if any of these eight water rights were

not exercised during "any 5 successive years." Nev. Rev. Stat. § 533.060.

The Engineer evaluated the evidence presented for these parcels and

concluded that only one of the appurtenant water rights had been forfeited.

As to the others, he found that the Tribe had failed to prove the statutory

period of non-use "by clear and convincing evidence." Town of Eureka,

A-20

826 P.2d at 952.

The district court did not review the Engineer's alternative findings

with respect to forfeiture because it agreed with the Engineer that the only

applicable legal theory was abandonment. We are reluctant to review the

Engineer's findings without allowing the district court to do so first. Even

if we were willing to conduct such a review, however, we could not do so

on the record before us. While the record includes the Engineer’ s ruling, it

does not contain the evidence introduced in the proceeding before the

Engineer. We therefore remand to the district court. On remand, the

district court will have the opportunity to review the Engineer's forfeiture

findings on a parcel-by-parcel basis, and to incorporate into the district

court record the evidence submitted to the Engineer relevant to those

findings.

Despite the limitations imposed by the current state of the record,

it may be appropriate for us to comment on what we do have before us. We

are concerned that the Engineer may have misunderstood the "clear and

convincing evidence" standard necessary to establish forfeiture. For

example, we note his ruling that the Tribe failed to prove by clear and

convincing evidence that the water rights appurtenant to Parcel 1 have

been forfeited. The Engineer acknowledged that the Tribe introduced

evidence that the parcel had been described as "bare land, prepared for

cultivation" (based on interpretations of aerial photographs) in 1949, 1973,

and 1977; simply as "bare land" (based on an infrared aerial photograph)

in 1984; and as "bare land, buildings, and roads” in 1991. Another aerial

photograph taken in 1993 showed no evidence of irrigation. Testimonial

evidence indicated that the farm located on Parcel 1 was "in disrepair" and

was "not organized or prepared for cultivation." The Tribe also introduced

a map, prepared by the Bureau of Reclamation, which showed that Parcel

| had not been irrigated in any of the years between 1984 and 1989.

The Engineer's ruling does not refer to any contrary evidence, yet

he concluded that the Tribe had failed to establish by clear and convincing

A-21

EL

evidence that the water rights appurtenant to Parcel 1 had been forfeited.

In support of his conclusion, he wrote that there was no evidence of

non-use in the years between the aerial photographs, that the Bureau map

could be unreliable, that the aerial photographs may have been wrongly

interpreted, and that the on-the-ground surveys were not performed

frequently enough. In so concluding, the Engineer does not appear to have

required only clear and convincing evidence. See Albert H. Wohlers & Co.

v. Bartgis, 969 P.2d 949, 957 n.4 (Nev. 1999) (approving jury instruction

describing clear and convincing evidence as "evidence which is beyond a

mere preponderance of the evidence"); accord Topaz Mutual Co., Inc. v.

Marsh, 839 P.2d 606, 609 (Nev. 1992). He appears to have demanded

proof beyond a reasonable doubt, and perhaps even more than that. Our

review of the Engineer's forfeiture rulings on other parcels suggests that

his evaluation of the Tribe's evidence with respect to those parcels may

also have gone beyond a requirement of clear and convincing evidence.

B. Abandonment

The Tribe argued before the Engineer that some of the water rights

in question were abandoned under Nevada common law. As we have noted

above, the Engineer ruled correctly that Nevada law does not include a

legal presumption in favor of abandonment based on a showing of

prolonged non-use. He then stated, with respect to water rights subject to

abandonment:

Permanent improvements, such as farm buildings, roads

and canals, have been constructed on some of the parcels.

The Tribe feels that prolonged non-use coupled with the

existence of permanent improvements establishes

abandonment of the water rights. However, the Tribe

presented no evidence or testimony relating to the intent to

abandon these water rights.

The Engineer noted that the Town of Fernley had "kept the rights in good

A-22

standing" by paying the applicable fees for water delivery, and that "no

evidence in the record indicat[es] that any previous owner failed to pay the

assessments or in any way displayed an intent to abandon or forsake these

water rights." He then found that none of the water rignts in question had

been abandoned.

In appealing the Engineer's findings, the Tribe and the federal

government argued that he failed to consider evidence of abandonment

they had introduced. In particular, they argued that evidence of prolonged

non-irrigation combined with evidence of improvements inconsistent with

irrigation needs (for example, buildings) were sufficient to show that water

rights appurtenant to a given parcel of land had been abandoned. The

district court rejected their arguments, but did not review the evidence on a

parcel-by-parcel basis in its order, stating only that the Engineer "did not

ignore the Tribe's evidence."

The State Engineer's findings concerning abandonment are

reviewed in federal court to determine whether they are supported by

"substantial evidence." See Revert v. Ray, 603 P.2d at 264. We cannot

determine from its order whether the district court reviewed the Engineer’ s

findings for conformity with Nevada abandonment law, as articulated by

Nevada statutes and case law and by the district court in Alpine IV. We are

also unable to review those findings because the evidence introduced in

the proceeding before the Engineer has not been incorporated into the

district court record that is now before us. We therefore remand for further

proceedings. On remand the district court will have the opportunity to

review, on a parcel-by-parcel basis, the evidence before the Engineer to

determine whether it supports his findings on abandonment, and to include

in the record the relevant evidence presented to the Engineer.

As with his forfeiture findings, we think it may be appropriate to

comment briefly on the Engineer's abandonment findings. From his written

findings, it appears that the Engineer may have misapplied Nevada's clear

and convincing evidence standard in finding no abandonment, just as he

A-23

appears to have done in finding no forfeiture. For example, the Tribe and

federal government introduced a sub~*antial amount of circumstantial

evidence showing that the water rig «s appurtenant to Parcel 10 had been

abandoned. This evidence include J aerial photographs taken in 1949, 1973

and 1977 showing that Parcel 10 was "bare land"; descriptions of the land

in 1984 and 1991 indicating that it was not being used for agriculture; and

a photograph taken in 1993 showing that the land had been converted to a

residential subdivision. The Engineer nevertheless ruled that there was no

"clear and convincing evidence" that the water rights appurtenant to Parcel

10 had been abandoned, even though there was no contrary evidence to

show that those rights had ever been exercised. As with the Engineer's

findings with respect to forfeiture, these findings appear to rest on a

standard of proof higher than "clear and convincing evidence."

Conclusion

We reverse the decision of the district court and remand for further

proceedings consistent with this opinion.

NOONAN, Circuit Judge, dissenting:

In 1902, the United States initiated the appropriation of the water

rights here in dispute by the enactment of the Reclamation Act. See

Nevada v. United States, 463 U.S. 110, 115-117 |

(1983). In so doing, the United States acted as trustee on behalf of the later

individual owners of land within the Reclamation Project. Jd. at 126.

These water rights were consequently not subject to forfeiture and can

now be transferred as the State Engineer and the district court ruled. In

reaching the result it does, the majority silently but effectively departs

from what the Supreme Court of the Umted States has already determined.

There cannot be any argument that when the United States began

the Newlands Reclamation Project in 1902, it initiated the appropriation of

the relevant water rights. Nothing prior to the enactment of the 1902

statute initiated the appropriation. Anything after 1902 merely carried out

what had begun in 1902. This year was accordingly the priority date for

A-24

ownership of the water rights, and the Reclamation Act was the first step

in establishing beneficial ownership of the water for the individual

landowners. Their rights relate back "to the time when the first step was

taken to secure [them]." Ophir Mining Co. v. Carpenier, 4 Nev. 534,

543-44 (1869). The water rights are not forfeitable "where the

appropriations of the right have been initiated in accordance with law prior

to March 22, 1913." Nev. Rev. Stat. § 533.085.

Why is it that the majority does not reach this conclusion? First,

because it misinterprets Alpine III. That case was about vesting; this court

reversed the State Engineers's erroneous determination that water rights

had vested in 1902. Alpine III, 965 F.2d 731, 738 (9th Cir. 1992). When it

was brought to the court's attention that the court had said nothing about

the initiation of appropriation of rights (an issue not before it), the court

amended its disposition to remand the question of initiation. Alpine II, as

amended, 983 F.2d 1487, 1496 (9th Cir. 1993).

The majority engages in the speculation that the purpose of the

Nevada anti-forfeiture statute was to exempt "investment-backed

expectations." Nothing in the language of the statute evinces this purpose.

Where initiation of appropriation is begun there is no investment. There is

merely an assertion of title. As the anti-forfeiture statute protects both

vested rights and the first tentative step to vesting, there is no reason to

attribute to the statute a purpose to protect investment.

The majority admits that in 1902 "the United States initiated the

water rights for the entire Newlands Proj ect." The majority's second error

is implicitly to suppose that the Nevada legislature used "initiation of

appropriation" to mean something different from the first step in tbe

process of acquiring a water right. It makes perfect sense for the Nevada

legislation to protect the Nevada individuals tor whom the United States

acted. It makes no sense to suppose with the maiority that initiation of

appropriation means one thing for purposes of priority and a very different

thing for purposes of protection from forfeiture under § 533.085.

A-25

I concur with the court in its ruling on abandonment. I believe that

its ruling on forfeiture misinterprets Alpine III, Nevada law, and what is at

least implicit in Nevada v. United States, supra.

U.S. DISTRICT COURT DISTRICT OF NEVADA ENTERED &

SERVED MAY 14, 1999

CLERK, U.S. DISTRICT COURT, BY S/

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

UNITED STATES OFAMERICA,

Plaintiff,

PYRAMID LAKE PAIUTE TRIBE OF

INDIANS,

Petitioner,

V.

ORR WATER DITCH DO., et a!.,

Defendants.

Matter of Nevada State Engineer Ruling No. 4116, re: Application 56226

Case No. (Equity) A-3-LDG

ORDER

The Pyramid Lake Paiute Tribe of Indians (the Tribe) and the United

States of America (collectively the Appellants) each appeal the Nevada

State Engineer's Ruling No. 411 6 (#62, #63). The State Engineer, the

Town of Fernley, and the Truckee-Carson Irrigation District (Irrigation

District) have filed oppositions, and the United States and the Tribe have

replied.

Brief Factual Background

On July 2,1902, the United States commenced the Newlands

Reclamation Project, withdrawing over 200,000 acres of land in the

vicinity of Fallon, Nevada. With due diligence,the United States thereafter

commenced and proceeded with the construction of the related irrigation

B-1

|

:

:

works necessary to irrigate this land. Initially, and pursuant to the

Reclamation Act, Project water was intended to be used primarily for

irrigation, but could also be used for watering livestock and for domestic

purposes. In 1990, Congress enacted the Truckee-Carson-Pyramid Lake

Water Rights Settlement Act, Public Law 101-618 §200 eta!., (the

Settlement Act). Section 209(a) of the Settlement Act expressly permitted

Project water to be used for municipal purposes.

Fernley purchased water rights to about 280 acre-feet of Project

water from various landowners and applied to the State Engineer to change

the manner and place of use of these newly purchased water rights from

irrigation to municipal use. The United States and the Tribe protested

Fernley’s application. Following briefing, a hearing, and post-hearing

briefs, the State Engineer approved Ferniey’s application. The parties have

briefed this matter and the matter is now before the Court.

Issues on Appeal

Stated succinctly, the Appellants raise the following issues on

appeal. .

1. Whether the State Engineer erred in failing to recuse himself?

2. Whether the State Engineer erred in not requiring approval of

the Secretary of the

Interior as a prerequisite to any approval by the State

Engineer?

3. Whether the Secretary of the Interior allocated water rights to

each of the existing places of use identified on Fernley's Application?

4. Whether the State Engineer erred in finding that the water

rights purchased by Fernley are currently valid? Stated otherwise, did the

State Engineer err in finding that the subject water rights had been

perfected, were not abandoned and were not subject to forfeiture?’

In its moving papers, the United States also raised an

issue whether the State Engineer erred by allowing the

B-2

In considering these issues, the Court presumes that the State

Engineer's factual findings are correct, with the burden to show otherwise

resting upon the party attacking the State Engineer's ruling. N.RS. §

533.450(9). This Court reviews whether the findings are supportedby

substantial evidence and determines whether the State Engineer's findings

are an abuse of discretion. Town of Eureka v. State Engineer, 108 Nev.

163, 165 (1992). This Court does not weigh the evidence or substitute its

opinion for that of the State Engineer. The State Engineer's interpretation

of law is reviewed de novo. Id.

- Recusal of State Engineer

Both Fernley and the State Engineer argue that the Tribe cannot

raise this issue on appeal because it failed to properly raise this issue

below. The Tribe counters that it properly raised this argument to the State

Engineer at a pre-hearing status conference, but that the State Engineer

failed to address the issue in his ruling.

A review of the transcript of the pre-hearing status conference

indicates that the Tribe stated that it was raising its "standing motion" to

disqualify the State Engineer. In response, the Hearing Officer stated that

the motion should be raised at the hearing, not the status conference. The

Hearing Officer further noted that the Tribe intended to move to recuse the

State Engineer at the hearing and that he would consider a motion to

recuse made during the hearing. However, the Tribe did not follow through

on its intention; it did not move to recuse the State Engineer during the

hearing. Accordingly, the Tribe waived its right to argue that the State

Engineer should have recused himself by failing to properly raise the

motion during the hearing below.

Approval of the Secretary of the Interior

transfer of the full water duty of 4.5 acre-feet per acre. At

oral arguments, however, the United States formally

withdrew this issue.

B-3

The United States argues that the approval of the Secretary of the

Interior is a prerequisite to the State Engineer's approval of the proposed

transfer and change of use of the Project water rights at issue. In his ruling,

the State Engineer stated only that, prior to changing the manner and place

of use of the water, Fernley must comply with applicable federal law.

The United States offers two theories in support of its argument.

First, the Government asserts that its approval is required because at is the

"legal owner" of the water rights. Second, the Government suggests that

§209 of the Settlement Act requires that Fernley obtain the Secretary's

approval of the proposed change before seeking the State Engineer's

approval.

In response, Fernley, the Irrigation District, and the State Engineer

suggest that the United States does not have any ownership interest in the

water rights. Alternatively, if the United States does have an ownership

interest, such interest is "at most minimal" and does not include a right to

prohibit the beneficial and equitable owner of the water right from

changing the place and manner of use pursuant to state law. These parties

also point out that the United States has failed to identify any statute or

other provision of law that either expressly requires the approval of the

Secretary or requires that approval prior to the State Engineer's approval of

the transfer application.

The United States' argument fails for several reasons. First, the

United States' ownership rights in the water rights at issue are ‘at most

minimal." Nevada v. United States, 463 U.S. 110, 126 (1983). These

"minimal" ownership rights do not provide the United States the right to

require the beneficial and equitable owner of a water right seeking to

transfer the water right to obtain the approval of the United State prior to

seeking the approval of the State Engineer. Second, the State Engineer did

not rule that it was not necessary for Fernley to obtain approval from the

United States. Rather, he ruled that Fernley was required to comply with

all federal law regarding the proposed transfers.

B-4

Third, §209 of the Settlement Act fails to provide support for the

United States' position. Nothing in the language of §209 expressly requires

that a beneficial owner of a water right first obtain the approval of the

Secretary before submitting a transfer application to the State Engineer.

Rather, §209 more appropriately appears to be an expression by Congress

that the United States has consented and approved beneficial owners of

Newlands Project water rights changing the manner of use of their water

right from irrigation to municipal uses. Finally, the Court notes that the

United States has not indicated the procedure by which an owner of a

Project water right is to obtain the consent of the United States prior to

seeking the State Engineer's approval to transfer the place of use. In total,

the Court finds that the State Engineer did not err in ruling that Fernley

was required to comply with all applicable federal law prior to actually

changing the manner and place of use of the water rights at issue.

Allocation of Water Rights to the Places of Use Identified in

Fernley's Transfer Application. -

The United States argues that Fernley failed to establish that the

specific water rights they purchased were appurtenant to specific Project

land. Although the Government generally raises this issue as to Parcels I -

5,7-12, and 1 5 - 28, its arguments are premised only upon the water

rights deed related for Parcel 16. As such, the Court will consider the

United States' argument only as to Parcel 16.

The Government's argument is not based upon evidence admitted

at the hearing before the State Engineer. While a witness testified at the

hearing that the water right deed for Parcel 16 identified the specific land

to which rights were appurtenant, none of the parties offered the deed

itself as evidence. Rather, only after the hearing did the United States first

examine the water rights deed for Parcel 16. As a result of this belated

examination, the United States concluded that the deed does not

specifically identify the appurtenant land. Given that the United States

failed to argue or present any evidence on this issue to the State Engineer,

B-5

the Court cannot find error in the State Engineer's ruling.

Current Validity of the Water Rights

State Engineer's Conclusion that Nevada's Forfeiture Statute Does

Not Apply

The threshold question before the Court is whether the State

Engineer correctly found that each of the individual water rights vested on

July 2, 1902. Having carefully reviewed the entire record, and the history

of the Orr Ditch litigation, the Court finds that the State Engiteer did not

err. In the Orr Ditch Final Decree, the court awarded a July 2, 1 902,

priority date for all individual water rights within the Newlands Project

governed by the Decree. Accordingly, as the July 2, 1 902, priority date is

the law of the case, the State Engineer could not err when he applied this

priority date in considering these change-of-use applications. Further, this

conclusion is consistent with the Supreme Court's decision in Nevada v.

United States, 463 U.S. 110 (1 983), in which the Court determined that all

water rights for the Truckee were adjudicated by the Orr Ditch Final

Decree. Finally, finding that each individual Project water right has a July

2, 1 902, priority date is consistent with water law in general, and with

Nevada water law in particular.

Proper resolution of the issue whether the State Engineer erred

requires recognition that the priority of water rights, including Project

water rights, was a core issue in the Orr Ditch litigation from the filing of

the original complaint. The United States initiated the litigation in 1913,

"as a general all inclusive water adjudication suit which sought to

adjudicate all rights and claims in and to the water of the Truckee. and

required all parties to fully set up their respective claims." Nevada, 463

U.S. at 120. The United States expressly alleged that it sought a judicial

resolution of the priority of water rights for the Truckee River. As stated

by the Government in its amended complaint,

Until the several rights of the various claimants, parties

hereto, including the United States, to the use of the

B-6

waters flowing in said river and its said tributaries in

Nevada or used in Nevada have been settled, and the

extent, nature, and order in time of each right to divert said

waters from said river and its tributaries has been

judicially determined the United States cannot properly

protect its rights in and to the said waters, and to protect

said rights otherwise than as herein sought if they could be

protected would necessitate a multiplicity of suits.

Amended Complaint (emphasis added). Further, as noted by the Supreme

Court, "the primary purpose of the Government in bringing the Orr Ditch

suit in 1913 was to secure water rights for the irrigation of land that would

be contained in the Newlands Project. ..." Nevada, 463 U.S. at 121.

The United States, in essence, asked the court in 1913 to place

every user of Truckee River water in a line and, when placing those users

in the line, to place them in the order that they were allowed to take water.”

The benefits of creating such a line are obvious. First, those persons

standing in line will be limited to only those users who have already

obtained, or who are in the process of obtaining, a right to take water. All

other persons wanting to take water, but who had not yet commenced the

process of obtaining a right to take water, would have to go to the end of

the line when they started the process of appropriating water. Second, the

water users placed at the front of the line would be secure in the

knowledge that they would get water from the river in even the driest of

years. In contrast, although users placed at the back of the line would have

The Court recognizes that stream adjudications are

more complex than this simple model, involving other issues

such as the place of diversion and the nature and manner of

use. However, for present purposes this model is sufficient to

serve as a conceptual aid in resolving the issue of the priority

of the individual Project water rights.

B-7

Was Dain ck 0nd

ee ee

less assurance of receiving water in dry years, these lower priority users

could plan accordingly. In short, the creation of the line allows all users of

the river water to rely on the line, and their relative placement in line, to

plan their individual activities. Third, and as a result of the above, each

water right gains a relative value according to a user's place in line. For

example, persons that did not have a place in line, but who wanted to

purchase a spot in line, would know that a water right at the front of the

line would be more valuable than a water right at the back of the line.

Similarly, those at the front of the line would know that their rights would

be sought after by persons wanting to obtain water rights.

Each of these factors is revealed in the United States' complaint

initiating the stream adjudication. First, the United States sought to secure

spots in the line on behalf of the Tribe and the Newlands Project that it had

initiated in 1902. Second, the United States would obtain a spot for the

Tribe near the front of the line, while it would obtain a spot on behalf of

the Newlands Project only slightly further back. Both of these positions

were sufficiently close to the front of the line, however, that the Tribe and

the farmers in the Project would be assured of obtaining water every year.

Finally, by gaining a favorable placement for water designated for the

Newlands Project, the United States ensured the likelihood of success for

the Project. Farmers buying land from the United States within the Project

would also be purchasing the water right appurtenant to the land that

would permit the farmers to stand near the front of the water line, a right

essential to the successful farming of the land. (indeed, given the arid

conditions of the region, land is effectively useless for farming if the land

lacks a water right.) Each of these benefits was realized when, in 1 940,

the court entered the Orr Ditch Final Decree judicially recognizing and

creating a line for Truckee River water, and finally determining each and

every user's place in that line.

The value of judicially forming and recognizing a line for water,

and the reliance of all water users on the judicial recognition of that line, is

B-8

sufficiently great that the Supreme Court has held that even those persons

who were not standing in the line created by the Orr Ditch Final Decree

nevertheless have standing to enforce the Decree. In Nevada, the Tribe

filed a complaint seeking to obtain an additional place near the very front

of the Orr Ditch water line for an implied-reservation-of-water to maintain

the Pyramid Lake fishery. The Supreme Court held that the Tribe's

complaint was precluded by. res judicata. Every place in the line, the

Supreme Court noted, including a spot for the Tribe's

implied-reservation-of-water right for fishing, was litigated in the Orr

Ditch litigation. Further, the Supreme Court held that even post-Final

Decree appropriators, those persons who did not take a place in the Orr

Ditch line until after the line had been judicially recognized by the Decree,

could enforce the Final Decree as against the Tribe. As a result, if the

Tribe wished to divert additional water to maintain the fishery, it would

have to go not merely to the end of the line as judicially recognized in the

Final Decree, but would also have to stand in line after every post-Decree

appropriator. Thus, by judicially creating and recognizing the line, every

person standing in the line has the right to enforce the line and to stop

non-righted water users from cutting into line.

In addition, every person standing in line can enforce the line by

removing users who lose their right to use water from the line. Indeed, the

effort to remove users from the Truckee water line is at the heart of the

present review. In recent years, including the present matter, the United

States and the Tribe have engaged in an effort to remove from the water

line every user who has allegedly lost his right to stand in line. With each

user removed from the line, the line becomes shorter and the possibility of

obtaining water by users standing at the end of the line is increased.

Presumably, after Nevada, the Tribe has placed itself, or is seeking to

place itself, as one of the those users at the end of the line waiting for

Truckee River water.

One method of removing a user from a water line is to show that

B-9

the user has lost his spot in the line by forfeit. A water right, that is, a spot

in the water line, is forfeited when the owner of that right fails to exercise

his right to take water for five consecutive years, regardless of whether the

owner intended to give up his spot in line to take water. Under Nevada

‘ law, however, only those spots in line after the critical date of March 22,

1913, are subject to forfeiture. In Re Waters of Manse Springs, 60 Nev.

280, 290, 108 P.2d 311 (1940). Any spot in line prior to March 22, 1913,

is subject only to abandonment. Unlike forfeiture, to remove a user from

the water line for abandonment requires showing not only that the user has

not taken water, but that the user intended to abandon his spot in line.

4

:

j

3

;

:

Thus, given the less-onerous and burdensome nature of showing forfeiture,

the Tribe and the United States would prefer to attempt to remove users for

'\\__ forfeiture. Nevertheless, the Tribe and the United States can seek to apply

forfeiture to a user only if that user's place in line is behind March 13,

i 1913, and therefore subject to forfeiture.

The preference to remove users by forfeiture explains the Tribe's

and the United States' argument that the State Engineer erred when he

found that every individual Project landowner has a priority of July 2,

1902. In terms of the analogy to the water line, the State Engineer

concluded that each farmer was standing in line on the July 2,1902, spot

that the United States obtained on behalf of the farmers for the specific

and express purpose of irrigating the Project farm lands. The State

Engineer's finding effectively precludes the Tribe and the United States

from removing any Project landowner under the forfeiture standard. In this

3 review, the Tribe and the United States assert that the State Engineer

should have placed the individual farmers onto the spot corresponding

with the date they took their first step to obtain a water right-to obtain a

spot in the line-from the United States. The appellants expect that, when

the individual users are placed in line according to the date they first

sought a water right from the United States, many of the farmers will be

placed behind the critical March 22, 1913, spot.

Bee desea Asana Valea has tal te Rd TS IAT ALIS LI

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The argument that the State Engineer erred in placing the

individual Project landowners on the July 2, 1902, spot, however, assumes

that the farmers were not already standing on that spot pursuant to the Orr

Ditch Final Decree. The assumption does not withstand scrutiny.

Admittedly, the Final Decree does not expressly identify any Project _

farmer or landowner by name, or expressly assign a specific water right or

priority date to any individual Project landowner. Neither does the Final

Decree refer to individual Project water rights. Although the farmers are

not expressly named or otherwise identified in the Orr Ditch Final Decree,

each farmer has obtained a right to stand in line from the United States. In

effect, the United States transferred to each landowner a portion of the

right to stand in the Orr Ditch water line that the court awarded to the

United States. In turn, as relevant tothe Newlands Project, the United

States obtained its right to stand in line pursuant to Claim No. 3. As

awarded in the Orr Ditch Final Decree,

Subject to prior appropriations and vested rights permitted

and confirmed by the Act of Congress of July 26, 1 866,

the [United States] is entitled and allowed to divert, with a

priority of July 2, 1 902, through the Truckee Canal 1,500

cubic feet of water per second flowing in the Truckee

River for the irrigation of 232,800 acres of lands on the

Newlands Project...

Orr Difch Final Decree, at 12. This language is clear, the United States

was given a July 2, 1902, spot in line to divert water at the rate of 1500

cubic feef per second for the irrigation of Project lands.* The United

States then transferred, (and had already transferred), portions of its July 2,

’The award in Claim No. 3 also recognized other

beneficial uses to which the diverted water could be applied.

None of these other uses, however, is relevant to the present

discussion.

B-11

1902, spot in line to individual Project farmers so that they could actually

receive water and irrigate the Project lands, as required by the award.

Thus, as each individual landowner claims his right to stand in line

pursuant to the award of that right in Claim No. 3, each landowner benefits

from the awarded priority date of July 2, 1902.

The language of the Final Decree provides further evidence that

each Project landowner is already standing on the July 2, 1902, spot in the

Orr Ditch water line. The water rights awarded in Claim No. 3 are

expressly "for the irrigation of 232,800 acres of lands on the Newlands

Project," and other beneficial uses. As Congress recognized in the

Reclamation Act, "beneficial use shall be the basis, the measure, and the

limit of the right" to use water acquired under the Act, including the

Newlands Project. Just as beneficial use is the measure of the extent of a

water right, a user can stand in line and divert water only if the water

diverted will be placed to beneficial use. This concept is not surprising.

Water that is diverted but not placed to a beneficial use is wasted,

precluding its beneficial use by another user standing farther back in line

who would not otherwise receive water. Only those persons that

beneficially use water have the right to stand in line. In this case, the

beneficial users of Project water are the Project landowners, not the United

States; the Project landowners apply the water that is diverted to irrigate

Project land. Absent the Project landowners and otherapproved users of

Project water, the water diverted pursuant to Claim No. 3 would be

wasted. Thus, in contrast to the United States' "at most minimal" right to

the July 2, 1 902, spot in line, the Project landowners clearly stand on that

spot as the beneficial users and owners of the water rights, allowing them

to receive the water that the Orr Ditch Final Decree designated for the

irrigation of Project lands.

Finally, and perhaps most significantly, both the United States and

the Tribe are expressly enjoined by the Orr Ditch Final Decree from

asserting that the individual Project landowners have a priority date other

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than July 2, 1 902. As recognized by this Court in the Orr Ditch Final

Decree, the Decree binds not only the original parties to Orr Ditch

litigation, but also binds any and all persons claiming a water right

adjudicated by the Final Decree.

That the parties, persons, corporations, interveners,

grantees, successors in interest and substituted parties

hereinbefore named, and their and each of their servants,

agents, attorneys, assigns and all persons claiming by,

through or under them and their successors, in or to the

water rights or lands herein mentioned or described, are

and each of them is hereby forever enjoined and

restrained from asserting or claiming any rights in or to

the waters of the Truckee River or irs tributaries, or the

waters of any of the creeks or streams or other waters

hereinbe fore mentioned except the rights specified,

determined and allowed by this decree..."

Orr Ditch Final Decree, at 10 (emphasis added). The Supreme Court has

specificallyrecognized that the Decree is binding upon not only the United

States, but also the Tribe andthe Project landowners. "We hold that under

the circumstances described above, the interests of the Tribe and the

Project landowners were sufficiently adverse so that both are now bound

by the final decree entered in the Orr Ditch suit." Nevada, 463 U.S. at 143.

In this case, all parties, including the Tribe and the United States, are

enjoined from asserting that the water rights being exercised pursuant to

Claim No. 3 have a priority other than July 2, 1 902. Indeed, even the

Project landowners are enjoined from asserting that the priority date for

their water rights is other than July 2, 1 902. Stated simply, the Final

Decree enjoins all users of Truckee water from disputing or arguing that

those persons who take water pursuant to Claim No. 3, which includes the

individual Project landowners whose rights are at issue in this matter, are

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not standing on the July 2, 1902, spot in line. Thus, the Court finds that the

State Engineer did not err in finding that each individual Project water

right has a priority of July 2, 1902.

Nevertheless, the Court is cognizant of the several arguments that

have been raised suggesting that the priority date for individual Project

water rights has not been determined. One such argument is that the

priority date for individual Project water rights should be measured from

the date that the individual Project farmers took the first steps to obtain

water from the United States. In essence, the argument is made that Project

landowners taking irrigation water pursuant to Claim No. 3 should not be

placed on the July 2, 1902, spot that the United States obtained for the

purpose of irrigating Project land, but should be placed elsewhere in line.

The United States initiated both the Orr Ditch litigation and the

Alpine litigation for the express and specific purpose of securing a priority

date, a spot in line, that it would be transferring to individual farmers. As

has beem discussed above, the Orr Ditch Final Decree granted the relief

sought by the United States, awarding a July 2, 1902, priority date for the

irrigation rights within the Newlands Project, which award is binding upon

all users: of Truckee River water, including the United States, the Tribe,

and the individual farmers.

In the Alpine litigation, the court's placement of the individual

Project landowners onto the July 2, 1 902, spot in line is even clearer. The

court awarded the July 2, 1 902, priority date to the individual Project land

owners as follows:

The water rights on the Newlands Project covered by

approved water right applications and contracts are

appurtenant to the land irrigated and are owned by the

individual land owners in the Project. These rights have a

priority of July 2, 1902. The United States may have title

to the irrigation works, but as to the appurtenant water

rights it maintains only a lien-holder's interest to secure

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repayment of the project construction costs.

United States v. Alpine Land & Reservoir, 503 F.Supp. 877, 879 (D.Nev. 1

¥80). That this holding was not challenged, and thus became final, is not

surprising since the parties to the Alpine litigation agreed, before trial, that

the priority date of the individual Project landowners’ water rights was

July 2, 1902. Jd., at 885. In effect, all parties, including the United States

and the Tribe, agreed to resolve a core issue of the Alpine litigation, as

alleged by the United States in its complaint, as to where the individual

farmers were standing in the line for Carson River water.

The suggestion remains, however, that the Alpine Court's final

_ judgment awarding the farmer's a July 2, 1 902, spot in line somehow did

not resolve the issue of the farmer's proper place in line, because the

parties settled rather than litigated this core issue. This Court is extremely

concerned by the suggestion, as it calls into question the validity of every

final judgment this Court has entered as a result of the parties settling,

rather than litigating, claims alleged in the complaint. As in the Orr Ditch

litigation, the United States initiated the Alpine litigation to finally resolve

the dispute as to each Project farmer's place in line for Carson River water.

The parties agreed to the July 2, 1902, priority date for the very purpose of

resolving this claim. 7 -

The Court recognizes that the suggestion, (that the parties'

settlement agreement did not resolve the issue of the farmer's proper place

in line), arises from the fact that the agreed-upon priority date of July 2,

1902, was also material in resolving another of the United States' claims

brought in the Alpine Complaint: each farmer's water duty, the amount of

water to which each farmer was entitled. The United States argued that the

water duty was governed by the 1903 Cooperative Act. The trial court

noted, however, that the 1903 Cooperative Act did not apply because the

water rights for individual farmers had priority dates of July 2, 1902, as

stipulated by the parties before trial. If this stipulation is considered only

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in the context of the United States' water-duty claim, (thereby ignoring the

context of the overall litigation, including the United States' priority

claim), then one can reach the erroneous conclusion that the parties agreed

to the priority date solely for the purpose of resolving the applicability of

the 1903 Cooperative Act to the amount-of-water dispute. In turn, this

leads to the incorrect suggestion that the Project landowner's place in line

was not resolved by the Alpine Final Decree.

Nothing in the record of the Alpine litigation indicates that, in

agreeing upon a priority date, the parties did not intend to actually resolve

the core issue of the landowner's priority. Similarly, the record of the

Alpine litigation lacks any suggestion that the sole purpose in reaching this

agreement was to resolve whether the 1 903 Cooperative Act governed the

amount-of-water dispute. The Court cannot find any agreement or

language in the Alpine record indicating that thé parties intended to

reserve litigation of the issue of priority despite agreeing that the priority

date was July 2, 1902. Further, this Court cannot discern any language in

the Alpine Final Decree indicating that, in accepting the parties’ settlement

agreement, the Alpine trial court believed that the parties were not

resolving the core issue regarding the correct priority date for Project

landowners. Instead, the Alpine Final Decree indicates that the parties

agreed to the Project landowner's priority date for the purpose of resolving

the issue of the priority date. That the priority date was also relevant to the

trial court's resolution of another claim raised by the United States in its

complaint-the extent of each Project landowner's water duty-does not

render the agreement meaningless on the issue that the parties intended to

resolve when they entered into the stipulation: the priority date for each

farmer’s water right.

Proiect-Wide Rights

The Court would also note the suggestion that, as regards Project

water rights, the Alpine and Orr Ditch Final Decrees determined only

project-wide rights. Pursuant to this suggestion, individual rights,

B-16

including individual priority dates for water rights within the Newlands

Project, have not yet been determined. This suggestion appears to be based

upon the following language from Alpine II:

The governing decrees resulting from these proceedings

[the Orr Ditch and Alpine litigations] deal with the Project

as a whole. While these previous proceedings have settled

many issues, they have not determined whether the

particular Project properties involved in this case are

entitled to receive Project water.

878 F.2d at 1220-21. While this observation is correct, the suggestion that

priority dates have not been determined rests upon an impermissible

extrapolation of this observation. Whether particular Project property is

entitled to receive water requires resolution of the question, "Does a water

right exist for this specific piece of Project land?" The appellate court

correctly observed that this question has not yet been answered. In

contrast, the priority date of a water for a particular Project property

requires resolution of a very distinct question, "If a valid water right exists

for a particular property, what are its parameters?" The suggestion that the

priority date has not been determined confuses these very distinct

questions. Indeed, neither the Orr Ditch nor the Alpine Decree could

appropriately answer the former question as to the existence of a right for

specific Project property.

The United States filed its complaints on behalf of the Project

farmers. This limited the United States to seeking determinations of only

those issues applicable to the water rights of all Project farmers such as the

priority date and the water duty. As shown by the allegations of the

complaint, and as established in the Decrees, these issues were litigated

and resolved. In addition,-resolution of these issues was beneficial to all

non-Project water users. Non-project users would know the maximum

amount of water that could be appropriated by Project farmers, and would

B-17

the spot where the Project farmers' stood in the water line.

In contrast, resolution of the question whether a water right exists,

whether a farmer has the right to stand in line for a specific piece of

Project land, depends primarily upon three factors. Recognition of these

three factors shows that the question whether a right actually existed for a

particular piece of Project property, as opposed to the question of the

parameters of Project water rights, could not be adequately resolved by

either Decree. First, the existence of a water right requires a determination

whether a Project farmer obtained, from the United States, a right to stand

in line for the specific Project property. As noted in Alpine II, "IIt}he rights

of particular properties to receive Project water are based on contracts and

certificates issued by either the Secretary or the Truckee-Carson Irrigation

District (TCID)." While this issue might have been resolved as to some

properties in the Decrees, the Court notes that both the Orr Ditch and the.

Alpine litigations were initiated while the United States was still in the

process of transferring water rights. As a result, resolution of whether the

farmer had obtained a valid water right for particular Project property was

premature as to most of the Project properties when the United States filed

its complaints. Further, the identity of the specific pieces of property that

would receive water was not critical or relevant as to non-Project users

standing in line for water. Critical to non-Project users of Truckee water

was the determination of the maximum amount of water that could be

diverted by Project farmers, and the priority date pursuant to which the

farmers could divert that amount of water. The Orr Ditch Decree provided

this critical information as 1500 cfs of water with a priority of July 2,

1902. The Alpine Decree provided this critical information as 3.5 or 4.5

afa for those properties that, as of 1 980, had obtained a valid right to

water from the United States, with a priority of July 2, 1902.

The second factor in determining whether a valid water right exists

for a particular piece of property is whether the right has been, or is in the

process of being, timely perfected. "When any work is necessary to be

B-18

done to complete the appropriation, the law gives the claimant a

reasonable time within which to do it, and although the appropriation 1S

not deemed complete until the actual diversion or use of water, still if such

work be prosecuted with reasonable diligence, the right relates to the time

when the first step was taken to secure it." Ophir Mining Co. v. Carpenter,

4 Nev. 534, 543-544 (1869). As the United States did not apply water to

land, every farmer who obtained a water right from the United States was

required to perfect the water right awarded to the United States by actually

applying water to land, beneficially using the water to irrigate crops. As

with the question whether a farmer obtained a water right from the United

States, a determination of the issue whether each farmer perfected his right

would be premature as to many particular pieces of Project property. In

addition, determination whether a right had been perfected was not

necessary to the resolution of the Decrees. As relevant to those users

standing in line behind the farmers, the Decrees established the critical and

essential parameters of any water right: the water duty and the priority date

for each Project farmer.

The third factor relevant to a determination whether a valid water

right exists for specific Project property is whether a perfected right has

been abandoned or forfeited. This factor queries whether the farmer, after

obtaining a right to stand in line from the United States, and after

perfecting that right by actually standing in line and taking water, has left

the line? Again, given the nature of this factor, it could not have been

considered in either Decree. Neither Decree could predict which farmers

would abandon or forfeit their rights, and when those rights would be

abandoned. A valid water right that existed in 1910 or 1920 might cease to

exist in 1 985, after both Final Decrees had been entered. While the Orr

Ditch and Alpine Decrees could not resolve whether a water right existed

for a particular Project property, both Decrees could resolve the

parameters of the water rights sought by the United States on behalf of the

farmers. Specifically, the United States sought a determination of the

water duty and the priority date, the critical parameters of any water right.

B-19

As noted above, both Decrees resolved these parameters as 3.5 or 4.5 afa

of water, with a priority of July 2, 1902.

Treating Proiect Farmers as Obtaining Water from Source

Another argument that has been articulated is that, in determining

a priority date for individual Project water rights and applying the relation

back doctrine, the Court should engage in a legal fiction that the Project

farmers obtained their water rights from the source, rather than from the

United States. The argument fails, however, because it ignores that the

source of the water diverted and used by the farmers is the Truckee River.

As noted above, the Truckee river was subject to a full stream adjudication

initiated by the United States. This adjudication resolved, as of 1940, the -

water duty and priority date for all existing rights to water, perfected or

inchoate, whose source was the Truckee River system. Accordingly, res

judicata precludes both the Tribe and the United States from arguing that

the farmers should be treated as if they appropriated their water directly

from the Truckee, rather than as a transfer from the United States. As to

the priority date for Project water rights, the parties could have argued,

during the litigation of the United States' Orr Ditch complaint, that the

court should adopt the unique legal fiction that the Project farmers had

appropriated water directly from the Truckee instead of from the United

States. As this legal theory was not raised during the stream adjudication

determining the priority date of Project water rights; the parties are

precluded from raising the argument in this review of transfer applications.

The Court finds that the State Engineer did not err in recognizing

that the priority date for all individual Project water rights, as established

by the Orr Ditch Final Decree, is July 2, 1902. Accordingly, none of the

water rights at issue are subject to forfeiture.

Whether the State Engineer Ignored Clear and Convincing

Evidence of Intentional Abandonment.

The Tribe argues that, as to Parcels 1 and 10, the evidence

indicated that these parcels contained buildings precluding irrigation for

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three years. The Tribe suggests the State Engineer erred by ignoring "the

obvious implication" that the permanent structures evidenced an intent to

abandon a portion of the water right on these parcels. The Tribe further

argues that the State Engineer should have considered the combination of

non-use and the presence of buildings as meeting the Tribe's burden of

showing that the water right had been abandoned. As noted in footnote 8 in

Alpine III, Nevada has-not recognized that a prolonged period of non-use

raises a rebuttable presumption of abandonment. Alpine III, 983 F.2d at

1494. Thus, while evidence of non-use and the presence of buildings may”

be some evidence of an intent to abandon, such evidence standing alone

does not require a finding of abandonment. In his ruling, the State

Engineer did not ignore the Tribe's evidence, but clearly found that the

Tribe presented evidence both of prolonged non-use and of buildings on

the property. In light of this finding, the Court cannot agree with the

Tribethat the State Engineer did not consider the non-use and presence of

buildings, either singly or in combination, in considering whether the

Tribe met its burden of showing an intent to abandon.

The State Engineer's ruling is AFFIRMED.

DATED this 11" day of May, 1999.

S/

Lloyd D. George

United States District Judge

B-21

IN THE OFFICE OF THE STATE ENGINEER

OF THE STATE OF NEVADA

IN THE MATTER OF PROTESTED APPLICATION 56226, FILED TO

CHANGE THE MANNER AND RULING PLACE OF USE OF THE

WATERS OF THE TRUCKEE RIVER HERETOFORE DECREED IN

THE ORR DITCH DECREE, STOREY COUNTY, NEVADA.

RULING # 4116

GENERAL

I.

Application 56226 was filed on April 24, 1991, by the Town of

Fernley, to change the manner and place of use of 280.78 acre feet,’ a

portion of the waters heretofore decreed and set forth under Claim No. 3 of

the Orr Ditch Decree The Town of Femley wishes to change the manner

of use from the decreed use of irrigation, storage, power, domestic and

other purposes to municipal use and to change the place of use to the

Fernley utilities water service area. The point of diversion would remain

at Derby Dam, located within the N % SW 1/4 Section 19, T.20N., R.23E.,

M.D.B.&M.?

I.

Application 56226 was timely protested by the U.S. Bureau OT

‘The original quantity of water requested to be

changed under Application 56226 was 282.26 acre feet.

During the hearing, the Applicant withdrew Parcel No. 6, in

the amount of 1.48 acre feet, leaving the amount under

Application 56226 to be 280.78 acre feet.

Final Decree in United States v. Orr Water Ditch Co.,

In Equity, Docket No. A-3. (D. Nev. Sept. 4, 1944).

3Exhibit No. 2, Public Administrative Hearing before

the State Engineer, May 25, 1993.

— et

Reclamation (Bureau) on the grounds that:

The granting of this application could have detrimental effects on

the operation of the Newlands Project by:

1. Reducing the amount of water available to project water

users.

S Reducing the conveyance efficiency of the project

3. Other possible impacts of the proposed change in manner

of use and place of use of project water.

The Bureau of Reclamation requests that Application 56226,be

denied.‘

Il.

Application 56226 was also timely protested by the Pyramid Lake

Paiute Tribe of Indians (Tribe) on the grounds that:

¥ Pursuant to federal reclamation law, 43 U.S.C. § 389, said

application requires the approval of the Secretary of the Interior which has

not been obtained.

y § The approval of said application by the Secretary of the

Interior is not in the interests of the Newlands Reclamation Project or of

the United States because: (i) it would violate the Secretary's obligations

pursuant to the Endangered Species Act, 16 U.S.C. §§ 1531 et seq.; (ii) it

would-violate the Secretary's trust obligations to the Pyramid Lake Paiute

Tribe of Indians; (iii) it would violate the Secretary's duty to protect,

preserve and restore the Pyramid Lake fishery for the use and benefit of

the Pyramid Lake Paiute Tribe of Indians; and (iv) it would violate the

reserved right of the Pyramid Lake Paiute Tribe to the unappropriated

waters of the Truckee River that are needed to maintain, restore and

preserve the Pyramid Lake fishery.

Ba Granting or approving the above referenced application by

‘Exhibit No. 25, Public Administrative Hearing before

the State Engineer, May 25, 1993.

C-2

the State Engineer and/or the Secretary of the Interior would conflict with

and tend to impair the value of the Pyramid Lake Tribe's existing rights to

waters of the Truckee River because the Tribe is entitled to the use of all

the waters of the Truckee River which are not subject to valid, vested, and

perfected rights and the applicants do not have vested rights to use the

waters of the Truckee River on the proposed places of use described in

their applications.

4. Granting or approving the above referenced application by

the State Engineer would be detrimental to the public welfare in that it

would: (i) be likely to jeopardize the continued existence of Pyramid

Lake's two principal fish, the endangered cui-ui and the

threatened.Lahontan cutthroat trout; (ii) prevent or interfere with the

conservation of those endangered and threatened species; (ili) take or harm

those threatened and endangered species; (iv) adversely affect the

recreational value of Pyramid Lake; and (v) interfere with the purposes for

which the Pyramid Lake Indian Reservation was established.

3. On information and belief, said application involves the

transfer of an alleged water right that was never perfected in accordance

with federal and state law. Such an alleged water right cannot and should

not be transferred. :

6. On information and belief, said application involves the

transfer of alleged water rights that have been abandoned or forfeited.

Such alleged water rights cannot and should not be transferred.

r A On information and belief, said application should be

denied because it would increase the consumptive use of water within the

Newlands Project and/or increase the amount of water that is diverted to

the Project from the Truckee River. ; |

8. On information and belief, said application involves the

proposed transfer of alleged water rights from land that is not

impracticable to irrigate and therefore such alleged water rights are not

eligible for transfer to other lands.

C-3

9. The application should not be approved because the

applicants have not entered into a repayment contract with the United

States.

10. The application should not be approved because the

proposed use of the Newlands Reclamation Project's water rights is not

authorized by federal law.

11. The application should not be approved because the

proposed place of use is not within the authorized service area or

boundaries of the Newlands Reclamation Project.

tz. The application violates the provisions of Nevada law

which protect the endangered cui-ul.

13. The application should not be approved because the

applicant has not obtained permission of use federal facilities for the

transportation of the water it is seeking to obtain and transfer.

14. On information and belief, the water right that is the

subject of the application was obtained from a Newiands Project water

user who has violated the rules and regulations of the Secretary of the

Interior applicable to the Newlands Project. The Truckee-Carson

Irrigation District also has violated and is continuing LO violate those

rules and regulations. Approval of the application therefore would violate

the Order, Judgement and Decree entered in the case of Pyramid Lake

Paiute Tribe of Indians v. Morton, 354 F. Supp. 252 (D. D.C. 1973)

15. The Pyramid Lake Paiute Tribe of Indians will be

adversely affected if the above referenced application is granted because:

(i) it will result in greater diversions of Truckee River water away from

Pyramid Lake to the detriment of the threatened and endangered species

inhabiting Pyramid Lake; (ii) it will prevent the adequate enforcement

and encourage the continued violation of the Operating Criteria and

Procedures for the Newlands Reclamation Project; and (iii) it will imDair,

conflict and interfere with the Tribe's reserved right to the unappropriated

waters from the Truckee River that are needed to maintain, restore and

C-4

preserve the Pyramid Lake fishery and to fulfill the purposes of the

Pyramid Lake Indian Reservation.

THEREFORE the protestant requests that the above rererenced

application be denied and that an order be entered for such relief as the

State Engineer deems just and proper.*

IV.

On January 15, 1993, a Pre-Hearing Conference was held in the

matter of protested Application 56226. The Truckee-Carson irrigation

District (TCID) requested and was granted the status of an intervenor.°

V.

An administrative hearing before the State Engineer was held on

May 25, 1993.’

FINDINGS OF FACT

I.

In addressing change applications, the Orr Ditch Decree sets forth

the procedure to accomplish changes in the point of diversion, manner and

place of use.

The Orr Ditch Decree provides at page 88, that:’

Persons whose rights are adjudicated hereby, their

successors or assigns, shall be entitled to change, in the

manner provided by law the point of diversion, and the

place, means, manner or purpose of use of the waters to

which they are 50 entitled or of any part thereof, so far as

‘Exhibit No. 26, Public Administrative Hearing before

the State Engineer, May 25, 1993.

‘Transcript pp. 35-56, Pre-Hearing Conference before

the State Engineer, Januar.y 15, 1993.

7Exhibit No. 1, Public Administrative Hearing before

the State Engineer, May 25, 1993.

C-5

they may do so without injury to the rights of other

persons whose rights are fixed by this decree.*

The State Engineer finds that change Application 56226 is

properly before him for consideration and decision.

0.

The protestant Tribe requested that evidence and testimony

presented by the Tribe at the previous hearings on the Newlands Project

applications be included in the record on Application

562262 This request was opposed by the Applicant on the grounds that it

was not a party to any of the previous hearings.'° At the hearing, all

parties attempted to make this record complete and independent of any

previous hearings. The State Engineer finds that this record is complete

and that the record of previous hearings will not be included in this

record.

Ii.

The Bureau raised the issue of ownership of the water nghts

requested to be changed by Application 56226 and contended that the

®Recently, the Ninth Circuit Court of Appeals

interpreted this controlling provision. The Court concluded

that "the manner provided by law" means "[njot only state

water law substance, therefore, but procedure as well

governs Orr Ditch water rights.' United States v. Orr Water

Ditch Co., 914 P.2nd 1302, 1307-1303 (9th Cir. 1990).

Exhibit No. 8, Public Administrative Hearing before

the State Engineer, May 25, 1993.

10Fxhibit No. 10, Public Administrative Hearing

before the State Engineer, May 25, 1993.

C-6

Applicant had failed to establish a claim of ownership of these rights."'

The Bureau did not present any evidence or testimony that any other party

owned these water rights. Later, the Bureau accepted the Town of

Fernley's assertion that it had acquired these rights.”

The Applicant submitted evidence’’ and testimony'* which shows

the Town of Fernley paid the operation and maintenance fees or these

water rights that are charged by TOID. The Applicant's testimony

revealed that all of the water rights are owned by the Town of Fernley."”

Additionally, TCID, who keeps the ownership records for the water nghts

within the Newlands Project, certified to the State Engineer that deeds are

on file for these water rights that transfer ownership to the Town of

Fernley.'® The State Engineer finds that the owner of the water rights

requested to be changed by Application 56226 is the Town of Fernley.

IV.

The protestant Tribe claims that some of the water rights requested

to be changed by Application 56226 have been forfeited.’ A recent

decision of the Ninth Circuit Court of Appeals provides guidance as to

"Transcript p. 42, Public Administrative Hearing

before the State Engineer, May 25, 1993.

12Post Hearing Brief filed by the U.S. Bureau of

Reclamation, July 29, 1993.

13Exhibit No. 24, Public Administrative Hearing

before the State Encineer, May 25, 1993.

Transcript pp. 323-326, Public Administrative

Hearing before the State Engineer, May 25, 1993.

STranscript p. 211, Public Administrative Hearing

before the State Engineer, May 25, 1993.

Transcript p. 323-325, Public Administrative

Hearing before the State Engineer, May 25, 1993.

C-7

whether a water right is subject to forfeiture.'’ The Court stated:

On remand, in order to determine whether a water nght

may have been forfeited, it first must be determined whether and

when the right vested, and under which law appropriation was

initiated. If the nght vested before March 22, 1913, or if the

appropriation of the right was initiated in accordance with the law

in effect prior to that date, then it is not subject to possible

forfeiture under NRS 533.060."*

Previously, the State Engineer concluded that the water rights

19 “ere not

within the Newlands Project, as set forth in the Alpine Decree,

subject to Nevada's forfeiture statute because they had vested in the

United States upon the creation of the Project in 1902, prior to passage of

Nevada's forfeiture statute.””° On appeal, the Ninth Circuit analyzed

whether the water rights in the Newlands Project vested in 1902, and

concluded that they did not.’ Rather, the Court held that, as a matter of

Nevada law, "the rights could become vested in the individual landowners

only upon becoming appurtenant to a particular tract of land.””” However,

\7United States v. Alpine Land & Reservoir Co., 983

F.2d 1487 (9th Cir. 1993).

\8United States v. Alpine Land & Reservoir Co., 983

F.2d 1487, 1496 (9th Cir. 1993).

\9Final Decree in United States v. Alpine Land &

Reservoir Co., Civil No. D-183 BRT (D. Nev. Oct. 28, 1980).

2Umited States v. Alpine Land & Reservoir Co. , 983

F.2d 1487, 1490 (9th Cir. 1993).

1d. at 1495-96.

221d. at 1496. -

C-8

the Court did not analyze when the water rights in the Newlands Project

were initiated.

The State Engineer must now determine if the appropriations of

the water rights at issue here were initiated in accordance with the law in

effect prior to March 22, 1913. When a nght was initiated, that is its

priority date, depends upon when the "first step" to appropriate the water

was taken and is a matter of Nevada law.

The doctrine of relation back has long applied to water

appropriations due to the very nature of a water night and the fact that

perfecting the nght may take time. The Nevada Supreme Court explained

the doctrine of relation back in the following way.

When any work is necessary to be done to complete the

appropriation, the law gives the claimant a reasonable time

within which to do it, and although the appropriation is not

deemed complete until the actual diversion or use of water, still if

such work be prosecuted with reasonable diligence, the right

relates to the time when the first step was taken to secure it.”

Accordingly, even though the water was not placed to beneficial

use at the time that the first step was taken to secure the water right, so

long as the appropriator exercises due diligence, the perfection of the nght

relates back to the earlier date, the priority date.“ The state law

requirements of "due diligence" and "relation back" apply to reclamation

*°Ophir Mining Co. v. Carpenter, 4 Nev. 534, 543-44

(1869).

**United States v. Alpine Land & Reservoir Co. , 503 F.

Supp. 877 (D. Nev. 1980); 2 R. Beck, Waters and Water

Rights § 14.03(d)(1) at 195-97 (1991); Black's Law Dictionary

1158 (Sth ed. 1979) (relation back is the "principle that an

act done today is considered to have been done at an earlier

time").

C-9

projects.”°

In this case, the individual farmers could not begin to irrigate lands

within the Truckee Division of the Newlands Project until the United

States obtained water rights for the Project on July 2, 1902, and completed

construction on the Truckee Canal and Derby Dam in 1905.” In its

analysis regarding the vesting of water rights, the Ninth Circuit

distinguished between the water rights obtained by the United States for

the Newlands Reclamation Project in 1902, and the water rights

appurtenant to particular tracts of land2’ While this distinction proved

important as to when the water rights vested, this distinction has no

importance as to the priority date of water rights in the Truckee Division

of the Newlands Project because of the relation back doctrine. The State

Engineer finds that the relation back doctrine applies in this situation and

the first step taken in the appropriation of the water rights in the Truckee

Division of the Newlands Project occurred on July 2, 1902.

Additional evidence further bolsters this finding. Beginning in

1905, any person who wanted to initiate a water right in Nevada was

required to obtain a permit from the Nevada State Engineer. Act of March

1, 1905, ch. 46, § 3, 1905 Nev. Stat. 67. The water rights that are the

subject of Application $6226 were not initiated by an application to the

Nevada State Engineer. Instead, all of the water rights requested to be

changed under Application 56226 were initiated in accordance with the

Reclamation Act, as evidenced by the documents submitted to the United

254 R. Beck, Waters and Water Rights § 36.04(b) at

193 n.118 (1991).

26Nevada v. United States 463 U.S. 110, 116 (1983).

27United States v. Alpine Land & Reservoir Co., 983

F.2d 1487, 1495 (9th Cir. 1993).

C-10

States Department of Interior by the original water right holder.”

Therefore, the State Engineer finds that the appropriation of the water

rights requested to be changed under Application 56226 was initiated in

accordance with the law in effect prior to March 22, 1913.

V.

The Applicant assigned reference numbers to each parcel of land

comprising the existing place of use of the water rights that are the

subject of Application 56226. Each parcel of land is accompanied by a

"contract" for a water right from the United States Department of the

Interior.2? The contracts for the water rights appurtenant to parcels 2, 4, 5,

7, 11, 12, 14, 15, 17, 18, 21, 22, 23, 24, 25, 26, 27 and 28 were dated prior

to March 22, 1913.°° The contracts for the water rights appurtenant to

parcels 1, 3, 8, 9, 10, 16, 19 and 20 were dated after March 22, 1913. The

protestant Tribe claims that the water rights whose contracts were dated

after March 22, 1913, are subject to forfeiture.*' No claim of forfeiture is

made for those water rights whose contracts were dated prior to March 22,

1913. While not agreeing with this criterion for determining eligibility for

forfeiture, the State Engineer finds that the water rights appurtenant to

parcels 2, 4, 5, 7, 11, 12, 14, 15, 17, 18, 21, 22, 23, 24, 25, 26, 27 and 28

*8Exhibit No. 21, Public Administrative Hearing

before the State Engineer, May 25, 1993.

°Exhibit No. 2, Public Administrative Hearing before

the State Engineer, May 25, 1993. The Applicant assigned

numbers from 1 through 28, and number 13 was

intentionally left blank. Also, the water right appurtenant to

parc 1 6 was withdrawn at the hearing.

Exhibit No's. 20-9 and 21, Public Administrative

Hearing Dezore the State Engineer, May 25, 1993.

*!Post Hearing Brief filed by the Pyramid Lake Tribe

of Indians, August 16, 1993.

C-11

are not subject to forfeiture.

VI.

Of those parcels of land whose water right contracts were dated

after March 22, 1913, three parcels have been irrigated at some time

during the years 1984 through 1989. Evidence shows that 75% of parcel

numbers 8 and 19 and 100% of parcel 20 were irrigated during this

period.*? The State Engineer finds that a continuous five year period of

non-use has not occurred for the water rights appurtenant to parcels 8, 19

and 20.

Vil.

Of those parcels of land whose water right contracts were dated

after March 22, 1913, the protestant Tribe alleges that parcels 1, 3, 9, 10,

and 16 have not been irrigated for a significant period of time.”

Therefore, the Tribe feels that the water rights appurtenant to parcels 1, 3,

9, 10, and 16 should be declared forfeited. As stated earlier, the State

Engineer does not believe that these water rights are eligible for forfeiture.

Assuming arguendo that forfeiture applies to these water rights, the

following sets forth the standard of proof for forfeiture and analyzes the

evidence and testimony supporting the allegation of forfeiture for each of

these parcels.

The Nevada Supreme Court has held that there must be clear and

convincing evidence that the statutory period of non-use has occurred.”

The Court required this higher standard of proof because the law disfavors

Exhibit No. 20-8, Public Administrative Hearing

before the State Engineer, May 25, 1993.

3Exhibit No's. 20-6 and 20-7, Public Administrative

Hearing before the State Engineer, May 25, 1993.

“Town of Eureka v. Office of the State Enoineer of

Nevada, 108 Nev, 826 P.2d 948 (1992).

C-12

forfeitures.

Parcel 1 was described as being "bare land, prepared for

cultivation" for the years 1949, 1973, and 1977, based on aerial

photographs taken those years.** This may be interpreted as cultivated land

that happened to be lying fallow with no crop, at those times when the

aerial photographs were taken.** Parcel 1 was again described as "bare

land" in 1984, based on the infrared aerial photographs taken on June 19

and 20, 1984, by the Bureau. The Tribe's witness testified that "the farm

unit most likely was in disrepair. It wasn't organized or prepared for

cultivation...”*” However, there is no evidence or testimony showing how

that determination was made. The State Engineer has difficulty making a

finding of continuous non-use with evidence that the land was prepared for

cultivation in 1949, 1973 and 1977. Cultivation is generally associated

with irrigation. In addition, there was no evidence of non-use for the

years between those years the aerial photographs were taken. The State

Engineer finds that the testimony and evidence presented for the years

through 1984 do not prove by clear and convincing evidence that a

continuous five year period of non-use has occurred.

In support of its allegation of forfeiture, the protestant Tribe refers

to a composite map prepared by the Bureau.” This map was prepared to

show lands with surface water rights as of 1984 that were irrigated one or

more years from 1984 through 1989. The interpretation of the composite

map concluded that parcel 1 was not irrigated in any of those years.”

However, there is no evidence or testimony on the record indicating how

Exhibit No. 20-7, Public Administrative Hearing

before the State Engineer, May 25, 1993.

**Transcript pp. 90-91, Public Administrative Hearing

before the State Engineer, May 25, 1993.

*’Transcript p. 91, Public Administrative Hearing

before the State Engineer, May 25, 1993.

C-13

ET

the Bureau prepared the composite map or how the map was interpreted.

Several questions come to mind related to the determination that parcel |

was not irrigated: 1. Were aerial photographs taken each of the six

years and if so, were they interpreted by a qualified person? 2. Was

marcel 1 inspected on the ground each year? 3. Were any of the years

classified as dry years, in which the irrigator did not receive his full water

entitlement? If so, can a water right be forfeited for non-use 1 the parcel

was not delivered water? 4. What is the resolution of the aerial

photographs? Some of the parcels of land in Application 56226 are less

than 0.2 acre in area. Lacking answers to these questions, the State

Engineer finds that the Tribe failed to provide clear and convincing

evidence that parcel 1 was not irrigated for the years 1984 through 1989.

In 1991, parcel 1 was described as “bare land, buildings, and

roads.”*> The photograph taken in May, 1993, supports this land

description and shows no evidence of irrigation.”* While there is some

question about irrigation of the bare land in 1991 and 1992, there is little

doubt that the land on which the buildings stand could not have been |

irrigated since 1991, when the buildings were first observed. The State .

Engineer finds that the portion of parcel | on which the buildings stand

was not irrigated in 1991, 1992, and 1993, which is short of the statutory

five years, required for forfeiture.

Parcel 3, in 1949, was described as being “Bare land, prepared for

cultivation.” In 1973, 1984, and 1991, the land was described as “Farm

road." However, in 1977, the land was described as being irrigated.**

This apparent contradiction can be explained if parcel 3 was not located )

properly in the interpretation of the aerial photographs taken in 1949, ;

1973, 1984 and 1991. The Applicant's witness, who is familiar with this

area, testified that parcel 3 lies adjacent to the farm road, not on the farm

Exhibit No. 20-12, Public Administrative Hearing

before the State Engineer, May 25, 1993.

C-14

road.” He also testified that parcel 3 was irrigated in 1984. The State

Engineer finds that the record lacks clear and convincing evidence that a

five year period of non-use occurred with respect to parcel 3.

Parcel 9 was described as having buildings on it in 1977, 1984,

and 1991.*° The photograph taken in 1993, shows the buildings and no

sign of irrigation.” The existence of these buildings on the property

precludes irrigation. The State Engineer finds that a period of non-use,

greater than five years, has occurred with respect to parcel 9.

The land use history for parcel 10 is similar to that of parcel 1.

"Bare land prepared for cultivation” was observed in 1949, 1973, and

1977. “Bare land’ was observed in 1984, and a

building was observed in 1991.** The photograph taken in 1993, shows

homes in what appears to be a subdivision.** The State Engineer finds, in

the same manner as for parcel 1, that the evidence prior to 1991 is not

clear and convincing that irrigation did not take place. The State Engineer

further finds that parcel 10 has not been irrigated in 1991, 1992, and 1993,

which represents a period of non-use that is insufficient to declare a

forfeiture.

In the years 1973, 1977, 1984 and 1991, a building was observed

on parcel 16.** The 1993 photograph shows a fairly new building that

could not have been constructed as long as twenty years ago.** There is

no evidence or testimony on the record, whether the building observed in

1973, 1977, 1984 and 1991, is the same as that in the 1993 photograph.

The Applicant's witness testified that, as ditch water master for TCID, he

Personally turned irrigation water onto parcel 16, during the period 1984

Transcript pp. 249-252, Public Administrative

Hearing before the State Engineer, May 25, 1993.

“Transcript p. 244, Public Administrative Hearing

before the State Engineer, May 25, 1993.

C-15

through 1989 (later clarified as 1984 through 1986).*' The State Engineer

finds that the record lacks clear and convincing evidence that a five year

period of non-use occurred with respect to parcel 16.

Vil.

The protestant Tribe asserts that those water rights in Application

56226. whose contracts were dated prior to March 22, 1913, have been

abandoned.’ The Nevada Supreme Court held that abandonment is the

voluntary relinquishment of a water nght by the

owner, with the intention of forsaking and deserting it.” The Tribe

presented evidence® and testimony that some of the lands to which these

water rights are appurtenant, have not been irrigated for a significant

period of time. The Tribe feels that a prolonged and unexplained non-use

creates a rebuttable presumption of an intent to abandon.** However, the

Ninth Circuit Court of Appeals found that although the longer the period

of non-use, the greater the likelihood of abandonment, there was no

support for a rebuttable presumption under Nevada law.“

Permanent improvements, such as farm buildings, roads and

‘ITranscript pp 239-243, 245, Public Administrative

Hearing before the State Engineer, May 25, 1993.

421m re Waters of Manse Soring and its Tributaries, 60

Nev. 280, 285-290, 108 P.2d 311 (1940).

43Eyhibit No. 20, Public Administrative Hearing

before the State Engineer, May 25, 1993.

“Transcript pp. 89-100, Public Administrative

Hearing before the State Engineer, May 25, 1993.

45Post-hearing brief filed by the Pyramid Lake Paiute

Tribe of Indians, August 16, 1993.

United States v. Alpine Land and Reservoir Co., 983

F.2d 1487, 1494 (9th Cir. 1993).

C-16

ee

canals, have been constructed on some of the parcels.*’ The Tribe feels

that prolonged non-use coupled with the existence of permanent

improvements establishes abandonment of the water rights. However, the

Tribe presented no evidence or testimony related to the intent to abandon

these water rights.

Since the Town of Fernley has owned the water rights at issue

here, it has kept the nights in good standing, evidenced by paying the

TCID assessments '*''* and filing appropriate ownership documentation

with TCID.'* The TCID Project Manager testified that the assessments are

current.** There is no evidence on the record indicating that any previous

owner failed to pay the assessments or in any way displayed an ibtent to

abandon or forsake these water rights. The State Engineer finds that there

is insufficient evidence and testimony on the record to indicate an intent

to abandon these water rights.

IX.

The protestant Tribe alleges that the water right appurtenant to

parcel 16 has never been perfected and therefore, under Nevada law cannot

be changed.*“? The Tribe relied upon aerial photographs taken in 1949,

1973, 1977, 1984, 1990 and 1991, to make this allegation. Mr. Edwin

Brush, who was the ditch water master for TCID from 1955 to 1987,

testified that he personally turned water from the ditch onto parcel 16.”°

*7Exhibits 20-5 and 20-7, Public Administrative

Hearing before the State Engineer, May 25, 1993.

“Transcript p. 326, Public Administrative Hearing

before the State Engineer, May 25, 1993.

“Exhibit No. 20-6, Public Administrative Hearing

before the State Engineer, May 25, 1993.

°°50 Transcript pp. 239-243, Public Administrative

Hearing before the State Engineer, May 25, 1993.

C-17

The State Engineer finds that parcel 16 was irrigated and the water right

appurtenant to parcel 16 was perfected by putting the water to beneficial

use.

X.

The protestant Tribe contends that granting Application 56226

would impair the value of its Truckee River water rights because the Tribe

is entitled to all of the unappropriated Truckee River water.’ The question

of the availability of unappropriated water is not at issue. Application

56226 seeks only to change water already appropriated under the Orr

Ditch Decree. The State Engineer finds that approval of Application 56226

would not cause the Newlands Project to exceed the quantity of water

provided for in the Orr Ditch Decree. The State Engineer further finds that

there would be no impairment of any existing rights on the Truckee River

as a result of the approval of Application 56226.

XI.

The protestant Tribe feels that approval of Application 56226

would be detrimental to the public welfare in that it would jeopardize the

continued existence of Pyramid Lake's two principal fish, the endangered

cui-ui and the threatened Lahontan cutthroat trout and adversely affect the

recreational value of Pyramid Lake.’ The State Engineer recognizes and is

sympathetic’to public interest values closely tied to continued survival of

the species in the lower reaches of the Truckee River and Pyramid Lake.

However, Application 56226’seeks only to change the manner of use and

place of use of water already appropriated under the Orr Ditch Decree.

Therefore, the State Engineer finds that the Newlands water rights set

forth under the Orr Ditch Decree would not be exceeded if Application

56226 were approved.

The Ninth Circuit Court of Appeals addressed the Tribe's public

C-18

:

|

| 3

' .

interest argument.*' The Court stated:

The Tribe's public interest argument cannot be regarded as

anything short of an attempted collateral attack on the Orr Ditch

decree. "[EJveryone involved in Orr Ditch contemplated a

comprehensive adjudication of water rights intended to settle once

and for all the question of how much of the Truckee River each of

the litigants was entitled to." Nevada v. United States, 463 U.S. at

143, 103 S.Ct. at 2924. The Engineer found that the proposed

transfers would not cause the Project to exceed the overall

maximum water consumption provided for in the Orr Ditch and

Alpine decrees, and the record supports this finding. Indeed, the

Engineer found that these proposed transfers "cumulatively

represent a reduction in diversion from the existing places of use

which results in less demand on project water."

By establishing the maximum aggregate amount of water to which

the Project was entitled, the Orr Ditch decree necessarily

embodies an evaluation of the competing public interesis in

supplying Project farmers with sufficient water to grow their

crops, and Pyramid Lake with sufficient water to benefit

indigeneous[sic] fishes. Because the Tribe has asserted no threat

to the public interest apart from those considered in the Orr Ditch

decree's water rights allocation, the Engineer's conclusion that the

transfers do not conflict with the Tribe's water rights satisfies both

the public interest aspect and the conflicting rights aspect of

section 533.370(3). Moreover, the Engineer's conclusion that the

proposed transfers did not threaten to harm the lake's fishes is

supported by substantial evidence.

"United States v. Aloine Land & Reservoir Co., 878

F.2d 1217, 1224 (9th Cir. 1989).

C-19

The State Engineer finds that Application 56226 is not unlike

those applications considered by the Ninth Circuit Court of Appeals except

that, Application 56226 seeks also to change the manner of use to

municipal. Therefore, the State Engineer finds that the approval of

Application 56226 does not threaten to prove detrimental to the public

interest.

Xi.

The protestant Tribe feels that these applications cannot be

approved because they involve the change "from lands that are not

impracticable to irrigate and therefore such alleged water rights are not

eligible for transfer to other lands."> However, the Tribe does not present

any legal basis for this assertion. Nevada water aw allows the eligibility

for changing the place of use based on the impracticability to irrigate the

existing place of use, however, it does not limit changes only to those that

meet the eligibility.” In addition, the Ninth Circuit Court of Appeals

affirmed the fact that the State Engineer is not precluded by statute from

granting a change application where it is not impracticable to use the

water at the present site.*” Therefore, the State Engineer finds that

Application 56226 cannot be denied on the basis of the Practicability to

irrigate the existing place of use.

Xi.

The protestant Bureau feels that the approval of Application 56226

could result in a lower quantity of water flowing to the groundwater basin

in the Fernley area.‘ Under present irrigation practices in the Fernley area,

the Bureau's witness estimated that each acre of irrigated land returns

approximately 1.5 acre feet of the applied 4.5 acre feet, directly to the

*2NRS 533.040.

S3United States v. Alpine Land & Reservoir Co., 878

F.2d at 1217, 1227. (9thCir. 1989).

C-20

groundwater aquifer.** According to the Bureau's witness, none of this

water would recharge the groundwater aquifer if irrigation ceases and the

water is used for municipal purposes. The State Engineer finds that the

Bureau did not consider the fact that approximately half of the water

diverted for municipal use in the Fernley area, flows to the wastewater

treatment facility, whose effluent is discharged directly to the

groundwater basin via rapid infiltration basins.** The State Engineer

further finds that the Bureau failed to consider tnat at a conveyance

efficiency of 60%, an additional 3 AF/AC is lost to the groundwater

aquifer from transmission losses. The State Engineer finds that the flow

of water to the groundwater resource in the Fernley area would not be

significantly diminished as a result of changing the manner of use from

irrigation to municipal.

XIV.

The protestant Bureau contends that approval of Application

56226 would result in a reduction of the conveyance efficiency of delivery

of water within the Newlands Project.* The Bureau did not have any

quantitative evidence to support this contention but was very concerned

about the proposed year-round diversions, especially during the

non-irrigation season.** However, the Bureau has failed to consider that

the Truckee Canal has been used for over 90 years for year round delivery

of water to Lahontan Dam on the Carson River. A check of the stream

flow records collected by the United States Geological Survey reflects

“Transcript pp. 159-160, Public Administrative

Hearing before the State Engineer, May 25, 1993.

“Transcript pp. 273-276, Public Administrative

Hearing before the State Engineer, May 25, 1993.

**Transcript pp. 189-190, Public Administrative

Hearing before the State Engineer, May 25, 1993.

C-21

ae GSP Gi aE SEED

that the Truckee Canal rarely transports less than 25 cfs.*’ The State

Engineer finds that the diversion of water for municipal use as proposed

under Application 56226 would not lessen the efficiency of the

Truckee-Carson Irrigation District in the delivery of water.

XV.

The Town of Fernley by agreement with TCID, has paid

assessments to TCID for all the Newlands Project water rights it acquired,

including those rights requested to be changed under Application 56226."*

4 The State Engineer finds that approval of Application 56226 will not

adversely affect the cost of water for other water users within the district.

XVI.

In many stream systems, a portion of the water diverted for

rrigation. finds its way back to the stream as return flow. The return flow

is then available for diversion by downstream users. When the manner of

use is changed from irrigation to municipal, often there is no return flow

back to the stream. To account for this lack of return flow, the Alpine

Decree’? allows only the consumptive use portion or 2.99 acre feet per

acre to be changed to municipal use.

The Orr Ditch Decree’ contains no such limitation on the quantity

of water allowed in a change of manner of use. However, in many cases,

the return flow, in a change to municipal use in the Truckee Meadows, is

available to downstream users because the treated wastewater effluent is

discharged back into the Truckee River system. The State Engineer has

approved changes to municipal use, allowing the entire duty to be changed,

because there is no reduction in the quantity of water available to

downstream users.

In determining whether the consumptive use portion or the entire

duty of 4.5 acre feet per acre may be changed under Application 56226,

57See U.S.G.S. gage, Truckee Canal at Wadsworth

Station No. 10351300.

C-22

the State Engineer must evaluate the impact on the downstream flow of

water. The first step is to examine the fate of the return flow off of

irrigated land described in Application 56226 as the existing place of use.

This land was irrigated with water diverted through the Truckee Canal.

The return flow from this land did not flow back into the system and was

never available to downstream users.** Under Application 55226, where

the Town of Fernley would divert water for municipal use, the return flow

would also not return to the Truckee Canal, but instead, would be

discharged to the groundwater via the rapid infiltration basins.** The State

Engineer finds that the change to municipal use of the entire duty of 4.5

acre feet per acre, presents no adverse impacts on the downstream users.

XVI.

The protestants Bureau and Tribe believe that Application 56226

should be denied because the Town of Fernley has not complied with

Public Law 101-618, in that the Town has not requested approval from the

Secretary of the Department of the Interior.*° The State Engineer

recognizes the Secretary's authority and responsibility under Public Law

101-618, however, the State Engineer has no authority to enforce the

provisions of Public Law 101-618. The State Engineer finds that his

approval of Application 55226 in no way releases the Town of Fernley

from its responsibility to comply with all applicable federal, state, and

local requirements.

CONCLUSIONS

I.

The State Engineer has jurisdiction over the subject matter.*°

Il.

**Transcript p. 315, Public Administrative Hearing

before the State Engineer, May 25, 1993.

*°NRS 533.325 and Orr Ditch Decree, p. 88.

C-23

The State Engineer is prohibited by law from granting a permit

under an application to change where:

A. The proposed change, if within an irrigation district,

adversely affects the cost of water for other holders of

water rights in the district;

B. The proposed change lessens the district's efficiency in its

delivery or use of water;

c. The proposed change conflicts with existing rights;

or

D. The proposed change threatens to prove detrimental to the

public interest.

Il.

The Orr Ditch Decree sets forth the procedure and authority for

applications to change the point of diversion, place and manner of use of

decreed waters of the Truckee River.

IV.

The owner of the water rights requested to be changed under

Application 56226 is the Town of Fernley.

V.

None of the parties to this action made any claim that the water

rights whose contracts were dated before March 22, 1913, are subject to

forfeiture. The parcels affected are 2, 4, 5,7, 11, 12, 14, 15, 17, 18, 21,

22, 23, 24, 25, 26, 27 and 28. While not agreeing with this rationale for

the reasons more fully set forth below, the State Engineer concludes that

the water rights appurtenant to these parcels are not subject to forfeiture.

VI.

The contracts for the water rights appurtenant to parcels 8, 16, 19

and 20, were dated after March 22, 1913. Based on the evidence and

®NRS 533.370.

C-24

testimony on the record, the State Engineer concludes that these parcels

were irrigated during the alleged period of non-use. Therefore, even if the

forfeiture statute were found to apply, the water rights appurtenant to these

parcels can not be declared forfeited.

Vil.

The evidence and testimony supporting the allegation of forfeiture

of water rights appurtenant to parcel numbers 1 , 3 and 10 do not meet the

‘clear and convincing" standard. Therefore, the State Engineer concludes

that even if the forfeiture statute were found to apply, the water rights

appurtenant to these parcels can not be declared forfeited.

Viti.

There is clear and convincing evidence on the record indicating

that parcel 9 has not been irrigated for a period of time greater than five

years. If the forfeiture statute were found

to apply to the water right appurtenant to parcel 9, then this water right

should be declared forfeited. However, for reasons stated below, the State

Engineer concludes that the forfeiture statute does not apply to these water

rights.

IX.

The State Engineer concludes that none of the water rights at

issue here are subject to forfeiture under NRS 533.060. This includes the

water rights whose contracts were dated after March 22, 1913. The water

rights requested to be changed by Application 56226 were not initiated by

permits issued by the State Engineer, which was required under the

Nevada Water Law, in effect after March 22, 1913. Instead, the State

Engineer concludes that these water rights were initiated under the

Reclamation Act of 1902.

X.

The record in this Proceeding contains no evidence that there was

ever an intent to abandon any of the water rights requested to Ruling be

changed under Application 56226. Evidence shows that the operation and

C-25

maintenance changes have always been paid and are current

XI.

The State Engineer concludes that the water right appurtenant to

parcel 16 was perfected.

XI.

There is no evidence on the record that approval of Application

56226 will impair the value of any other existing rights or threaten to

prove detrimental to the public interest.

Xi.

The State Engineer concludes that approval of Application 56226

will not result in a lower quantity of water flowing to the groundwater in

the Fernley Area.

XIV.

Since water has historically been transported through the Truckee

Canal on a nearly continuous basis for over 90 years, the State Engineer

concludes that said diversions by the Town of Fernley would not lessen

the efficiency in the delivery of water to other users within TCID.

XV.

The State Engineer concludes that as long as the Town of Fernley

pays the appropriate charges, the approval of Application 56226 will not

adversely affect the cost of the water for other water users within TCID.

XVI.

The entire duty of 4.5 acre feet per acre may be changed to

municipal use under Application 56226 with no impacts on any exstng

rights.

XVI.

The State Engineer does not have the authority to enforce the

requirements of federal law, including Public Law 101-618.

RULING

The protests to the granting of Application 56226 are herewith

C-26

rere ree

ee

overruled and Application 56226 is approved in the amount of 280.78 acre

feet, subject to existing rights and the payment of statutory fees.

Respectfully submitted,

s/

R. Michael Turnipseed, P.E.

State Engineer

RMT/JCP/pm

Dated this 27" day of May, 1994

NOT FOR PUBLICATION

FILED NOV-8 2001

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff,

and

PYRAMID LAKE PAIJUTE TRIBE OF INDIANS,

Petitioner-Appellant,

v.

ORR WATER DITCH COMPANY, et al.,

Detendants,

and

TOWN OF FERNLEY; TRUCKEE-CARSON IRRIGATION DISTRICT;

THE STATE ENGINEER,

Defendants-Appellees.

No. 99-16817

D.C. No. CV-N-A-3-LDG

Town of Fernley; Appeal of State Engineer Ruling No. 4116

UNITED STATES OF AMERICA,

Plaintiff-Appellant

and

PYRAMID LAKE PAIUTE TRIBE OF INDIANS,

Petitioner,

Vv.

ORR WATER DITCH COMPANY, et al.,

Defendants,

and

TOWN OF FERNLEY; TRUCKEE-CARSON IRRIGATION DISTRICT;

D-1

a

THE STATE ENGINEER,

Defendants-Appellees.

No. 99-16817

D.C. No. CV-N-A-3-LDG

Town of Fernley; Appeal of State Engineer Ruling No. 4116

ORDER

Before: SCHROEDER, Chief Judge, NOONAN and W. FLETCHER,

Circuit Judges.

Chief Judge Schroeder and Judge W. Fletcher have voted to deny

the three petitions for rehearing and petitions for rehearing en banc filed

by Appellees Truckee Carson Irrigation District, State Engineer, and Town

of Fernley, respectively, on August 20, August 20, and August 22, 2001.

Judge Noonan voted to grant the same petitions for rehearing and

recommended granting the same petitions for rehearing en banc.

The full court has been advised of the petitions for en banc

rehearing, and no judge of the court has requested a vote on the petition for

rehearing en banc. Fed. R. App. P. 35(b).

The petitions for rehearing and the petitions for rehearing en banc

are DENIED.

§ 383. - Vested rights and State laws unaffected

Nothing in this Act shall be construed as affecting or intended to affect or

to in any way interfere with the laws of any State or Territory relating to

the control, appropriation, use, or distribution of water used in irrigation,

or any vested right acquired thereunder, and the Secretary of the Interior,

in carrying out the provisions of this Act, shall proceed in conformity with

such laws, and nothing herein shall in any way affect any right of any State

or of the Federal Government or of any landowner, appropriator, or user of

water in, to, or from any interstate stream or the waters thereof. (June 17,

1902, ch 1093, § 8 in part, 32 Stat. 390.)

NRS 533.060 Right to use limited to amount necessary; abandonment

of rights; no acquisition of prescriptive right; reservation of rights by

state.

1. Rights to the use of water must be limited and restricted to so

much thereof as may be necessary, when reasonably and economically

used for irrigation and other beneficial purposes, irrespective of the

carrying capacity of the ditch. All the balance of the water not so

appropriated shall be allowed to flow in the natural stream from which

such ditch draws its supply of water, and shall not be considered as having

been appropriated thereby.

2. Except as otherwise provided in subsection 4, if the owner or

owners of any such ditch, canal, reservoir, or any other means of diverting

any of the public water fail to use the water therefrom or thereby for

beneficial purposes for which the right of use exists during any 5

successive years, the right to so use shall be deemed as having been

abandoned, and any such owner or owners thereupon forfeit all water

rights, easements and privileges appurtenant thereto theretofore acquired,

and all the water so formerly appropriated by such owner or owners and

their predecessors in interest may be again appropriated for beneficial use

the same as if such ditch, canal, reservoir or other means of diversion had

never been constructed, and any qualified person may appropriate any such

water for beneficial use.

3. No prescriptive right to the use of such water or any of the

public water appropriated or unappropriated can be acquired by adverse

user or adverse possession for any period of time whatsoever, but any such

right to appropriate any of such water shall be initiated by first making

application to the state engineer for a permit to appropriate the same as

provided in this chapter and not otherwise.

4. The State of Nevada reserves for its own present and future use

all rights to the use and diversion of water acquired pursuant to chapter

F-]

462, Statutes of Nevada 1963, or otherwise existing within the watersheds

of Marlette Lake, Franktown Creek and Hobart Creek and not lawfully

appropriated on April 26, 1963, by any person other than the Marlette |

Lake Company. No such right may be appropriated by any person without i:

the express consent of the legislature.

[8:140:1913; A 1917, 353; 1949, 102; 1943 NCL § 789T|-INRS A 1979,

1161)

NRS 533.085 Vested rights to water not impaired.

1. Nothing contained in this chapter shall impair the vested

right of any person to the use of water, nor shall the right of any person to -

take and use water be impaired or affected by any of the provisions of this

chapter where appropriations have been initiated in accordance with law

prior to March 22, 1913.

y 5 Any and all appropriations based upon applications and

permits on file in the state engineer’s office on March 22, 1913, shall be

perfected in accordance with the laws in force at the time of their filing.

[84:140-1913; 1919 RL p. 3247; NCL § 7970]

§ 533.324. “Water already appropriated” defined

As used in NRS 533.325, 533.345 and 533.425, “water already

appropriated” includes water for whose appropriation the state engineer

has issued a permit but which has not been applied to the intended use

before an application to change the place of diversion, manner of use or

place of use is made.

HISTORY: 1993, CH. 181, § 1, p. 321.

NOTES:

EDITOR’S NOTE - Acts 1993, ch. 181, § 2, provides: “1. The legislature

declares that it has examined the past and present practice of the state

engineer with respect to the approval or denial of applications to change

the place of diversion, manner of use or place of use of water described in

section 1 of this act [NRS 533.324] and finds that those applications have

been approved or denied in the same manner as applications involving

water applied to the intended use before the application for change is

made.

“2 The legislature intends by this act to clarify rather than change

the operation of NRS 533.325, 533.345 and 533.425 with respect to the

approval or denial of applications to change the place of diversion, manner

of use or place of use of water described in section 1 of this act [NRS

533.324], and thereby to promote stability and consistency in the

administration of chapters 533 and 534 of NRS.

“3 The legislature hereby ratifies each approval granted by the

state engineer pursuant to NRS 533.325, 533.345 or 533.425 before the

effective date of this act [May 27, 1993] for a change of the place of

diversion, manner of use or place of use of water already appropriated if

the change is consistent with the interpretation of that term now codified in

H-1

a

section 1 of this act [NRS 533.324].”

Acts 1993, ch. 191, § 3, provides: “This act becomes effective

upon passage and approval [May 27, 1993], and, to the extent that it

ratifies previous decisions of the state engineer in the manner described in

section 2 of this act, applies retrospectively as well as prospectively.”

EFFECTIVE DATE — This section became effective May 27, 1993.

NRS 533.325 Application to state engineer for permit.

Any person who wishes to appropriate any of the public waters, or

to change the place of diversion, manner of use or place of use of water

already appropriated, shall, before performing any work in connection

with such appropriation, change in place of diversion or change in manner

or place of use, apply to the state engineer for a permit to do so.

(Part 59:140:1913; A 1919, 71; 1951, 132]}—(NRS A 1991, 859)

IN THE DISTRICT COURT OF THE UNITED STATES

IN AND FOR THE DISTRICT OF NEVADA

IN EQUITY, DOCKET NO. A3

The United States of America, plaintiff

VS.

1. Daisy Adams, successor to George Imes and Andrew

Drake, et al.

Solicitors for the United States: Ethelbert Ward, John F.

Truesdell and Oliver P. Morton, special assistants to the Attorney

General, William Woodburn, as former United States Attorney for

the District of Nevada; George Springmeyer. United States Attorney

for the District of Nevada, and R.O. Withers. Solicitors for numerous

defendants are as hereinafter designated.

It is hereby ordered that all persons herein named as owners,

grantors and successors be made and considered parties to this action

and that all parties herein named as grantees or successors be _

substituted for their respective predecessors, with all the nghts of

their grantors and respective predecessors.

ERRATA SUPPLEMENT

Page 8, first column, line 45, “the name of which was

changed to, and at the date o this Decree is Sierra Pacific Power

Company,” should be substituted for “succeeded by Truckee River

J-1

Sr re daniiniiamsiidaia a

Power Company, incorporated.”

Page 8, second column, 4" line from the end of subdivision

(W), the name ‘“Walliam” should be “William.”

In all tabulations where the same appears, the “Solicitor”

column should be eliminated.

Page 14, claim 50a, the name “Cardella” should be

“Gardella.”

Page 17, claim 78, the name “Degioranni” in both instances

should be “Degiovanni.”

Page 29, claim 209, the following descriptions of lands

should be inserted in appropriate columns as indicated:

In

1/4 of 1/44 Sec. T-N_ R-E

NW NW _ 31 19 20

SE NW 31 19 20

NE NW 31 19 20

NW NE 3l 19 20

SW NE 31 19 20

SE NE - 3l 19 20

NE NE 31 19 20

SW NW 31 19 20

NW NW 32 19 20

SW Sw 29. 19 20

Page 34, claim 272, the name “Reno Pressed Brick

Company” should be “Reno Press Brick Company.”

Page 37, claim 335, “283” in “Acre Feet” column should be

~— 7”

J-2 .

Page 39, claim 350a, “388” in “Acre Feet” column should be

7.

FINAL DECREE

This cause having been heretofore heard by the Court and,

following argument by counsel, the matter having been referred to

George F. Talbot, as Special Master, and the said Special Master

having thereafter rendered his report and made his findings, and the

same having been approved and adopted by the Court (except as

disallowed or modified by the Court) by a certain order termed

“Temporary Restraining Order” made and entered in said cause

under date of February 13, 1926:

NOW, THEREFORE, in accordance therewith, IT IS

HEREBY ORDERED, ADJUDGED AND DECREED AS

FOLLOWS:

That the parties, persons, corporations, intervenors, grantees,

successors in interests and assigns and substituted parties above and

hereinafter named and their successors in interest and assigns are,

and each of them is, as against every other one, hereby adjudged to

be the owners of the water rights hereinafter specified and set forth

and entitled and allowed to divert and use, from the Truckee River

and its tributaries and from the streams, springs, drain and waste

waters hereinafter mentioned, and by and through their respective

ditches, canals, flumes, dams and reservoirs, for the irrigation of

their respective hereinafter described lands, for generating electricity

and power, for municipal purposes, for supplyign the people living in

cities and towns, for reclamation of arid lands, for watering

livestock, for domestic uses and other beneficial purposes, water in

J-3

aes

:

the respective amounts and subject and according to the respective

dates of appropriation and priorities as hereinafter stated, found and

allowed.

TRUCKEE RIVER DIVERSIONS

Government Rights

INDIAN DITCH

Claim No. 1. By order of the Commissioner of the General

Land Office made on December 8, 1859, the lands comprising the

Pyramid Lake Indian Reservation were withdrawn from the public

domain for use and benefit of the Indians and this withdrawal was

confirmed by order of the President on March 23, 1874. Thereby

and by implication and by relation as of the date of December 8,

1859, a reasonable amount of the water of the Truckee River, which

belonged to the United States under the cession of territory by

Mexico in 1848 and which wa the only water available for the

irrigation of these lands, became reserved for the needs of the Indians

on the reservation.

For the irrigation of 3130 acres of Pyramid Lake Indian

Reservation bottom lands, plaintiff, the United States of America, is

entitled and allowed to divert from the Truckee River through the

Indian Ditch, the intake of which is to be on the left bank of the river

in Section 18, T. 22 N., R. 24 E., Mount Diablo Base and Meridian,

not exceeding 58.7 cubic feet of water per second to an amount not

exceeding 14,742 acre feet of water in any calendar year with a

priority of December 8, 1859; provided the amount of water so to be

diverted shall not exceed a flow of one miner’s inch, or one-fortieth

of one cubit foot per second per acre for the aggregate number of

acres of this land being irrigated during any calendar year and the

J-4

amount of water. applied to the land after an estimated transportation

loss of 15 percent, shall not exceed 85-100 of any inch or 85-100 of

one-fortieth of one cubic foot per second per acre for the total

number of acres irrigated, and provided that the amount of water so

diverted during any such year shall not exceed 4.71 acre feet per acre

for the aggregate number of acres of this land being irrigated during

that year, and further provided that the amount of water applied to

the land shall not exceed four acre feet per acre for the aggregate

number of acres of this land being irrigated during any calendar year.

This water is allowed for the United States and for the

Indians belonging on said reservation and for their use and benefit

and is not allowed for transfer by the United States to homesteaders,

entrymen, settlers or others than the Indians in the event that said

lands are released from the reservation or are thrown open to entry or

other disposal than assignment or transfer to the Indians.

Claim No. 2. In addition to water for the above mentioned

3130 acres of Pyramid Lake Indian Reservation bottom lands, the

Government is hereby and will be allowed to divert water from the

Truckee River, with a priority of December 8, 1859, to the amount of

one-fortieth of one cubic foot per second per acre for the irrigation of

2745 acres of Pyramid Lake Indian Reservation bench lands. The

water so allowed for bench lands may be diverted from the Truckee

River through the Truckee Canal or any other ditch now or hereafter

constructed as the plaintiff may desire or authorize; provided that the

amount of water for bench lands shall not exceed during any

calendar year 5.59 acre feet per acre diverted from the river, nor

exceed during any calendar year 4.1 acre feet per acre applied to the

lands, for the aggregate number of acres of this land being irrigated

during any year.

J-5

This water is allowed for the United States and for the

Indians belonging on said reservation and for their use and benefit

and is not allowed for transfer by the United States to homesteaders,

entrymen, settlers or others than the Indians in the event that said

lands are released from the reservation or are thrown open to entry or

other disposal than assignment or transfer to the Indians.

DERBY DAM AND TRUCKEE CANAL

Claim No. 3. Under the Reclamation Act of June 17, 1902,

the United States, acting by the Secretary of the Interior, on July 2,

1902, withdrew from public entry, excepting under the homestead

laws in accordance with the provisions of the Act, the lands required

for the Government’s first reclamation project, now known as the

Newlands Project. Thereupon and with due diligence the United

States proceeded with the construction of the Derby Dam across the |

Truckee River in the SW1/4 of Section 19, in T.20, N., R. 23, E., |

Mount Diablo Base and Meridian, and with the construction of the

Truckee Canal, with a carrying capacity of 1,500 cubic feet of water

per second, running from this dam a distance of 31 miles to the

Lahontan Reservoir on the Carson River, and with the construction _

of the Lahontan Reservoir on the Carson River, and with the

construction of the Lahontan Reservoir, with a storage capacity of

| 290,000 acre feet, and with the construction of about 250 miles of

lateral and sub-lateral irrigation canals sufficient for carrying water

for the irrigation of 151,000 acres. On April 30, 1919;-the

Government had expended for this project $6,252,000.00. The lands

so withdrawn for reclamation are naturally dry and arid and without

the application of water are of little or no value, but with irrigation

will produce valuable crops and furnish homes and support for a

large population. |

J-6

Subject to prior appropriations and vested rights permitted

and confirmed by the Act of Congress of July 26, 1866, the plaintiff

is entitled and allowed to divert, with a priority of July 2, 1902,

through the Truckee Canal 1,500 cubic feet of water per second

flowing in the Truckee River for the irrigation of 232,800 acres of

lands on the Newlands Project, for storage in the Lahontan

Reservoir, for generating power, for supplying the inhabitants of

cities and towns on the project and for domestic and other purposes,

and under such control, disposal and regulation as the plaintiff may

make or desire, provided that the amount of this water allowed or

used for irrigation shall not exceed, after transportation loss and

when applied to the land, 3.5 acre feet per acre for the bottom lands,

nor 4.5 acre feet per acre for the bench lands under the Newlands

Project.

LAKE TAHOE STORAGE

Claim No. 4. Under the Reclamation Act and for irrigation

and other beneficial uses on lands under said project and on lands

within the basins of the Truckee, Carson and Humboldt rivers in —

Washoe, Storey, Lyon, Churchill and Humboldt counties, in the State

of Nevada, and pursuant to notice posted, by direction and authority

of the Secretary of the Interior and for and on behalf of the United

States, on the right bank of the Truckee River at the site of the dam

in said river near Tahoe City and in Placer County, California, and

about 500 feet downstream from Lake Tahoe, on the 21" day of May,

1903, plaintiff is entitled to, and is allowed with a priority of that

date and during all seasons of the year, to have flow into and to hold

and store in lake Tahoe and in a reservoir made of said lake by a dam

at said site in said river constructed with the spillway crest thereof

six feet above the floors of the flow-ways of said dam as then

J-7

existing, all waters of or coming into said river or said lake, both

surface and under flow, to the extent of 3,000 cubic feet per second -

and to the extent of the capacity of said lake as a reservoir made by

said dam, to said height and subject to the continuous out-flow

through said river from said lake or reservoir so made by said lake or

dam, of such an amount of water as plaintiff may desire to release or

may discharge from said lake or reservoir not exceeding at any time a

flow of 3,000 cubic feet of water per second.

In addition to the above specified rights, the United States is

entitled to store, discharge and control water in Lake Tahoe as

provided in the judgment and decree filed and entered on June 4,

1915, in the case of the United States, plaintiff, versus The Truckee

River General Electric Company, a corporation defendant, in the

District Court of the United States in and for the Northern District of

California, Second Division, and subject to said decree the United

States shall be entitled to discharge from Lake Tahoe an amount of

water sufficient to deliver to the head of the Truckee Canal at the

Derby Dam, after transportation loss, 1,500 cubic feet per second.

The plaintiff is entitled and allwoed at will to release and discharge

any fo the water stored, or by this decree allowed to be stored, in

Lake Tahoe and to flow the same and any other water to which it is

entitled, acording [sic] to its priority, through the Truckee River to

the Derby Dam and there divert the same, through the Truckee Canal

for irrigation, for storage in the Lahontan Reservoir, for generating

power and for other purposes. The rights of said defendant Sierra

Pacific Power Company (formerly The Truckee River General

Electric Company) under said judgment and decree are hereby

recognized and confirmed.

Power Ditches

J-8

FARAD PLANT

Claim No. 5. The Sierra Pacific Power Company, a

corporation owner, is entitled an dallowed to divert at all times from

the Truckee River through the Farad Power Flume, which has its

intake on the north bank of the Truckee River in the S % of Lot 6 in

the NW 1/4 of Section 30, Township 18 North, Range Eighteen East,

sufficient water, with a priority of the year 1899, to deliver, after

transportation loss, to the wheel of the Farad Hydro-Electric power

plant, 325 cubic feet of water per second and sufficient additional

water with a priority of 1906 to deliver, after transportation loss, to

the wheel of the Farad Hydro-Electric power plant, 325 cubic feet of

water per second and sufficient additional water with a priority of

1906 to deliver, after transporation loss, to the wheel of said plant,

75 cubic feet of water per second, said plant being situate in the SE

1/4 of Section 12, Township 18 N.R. 17 E., for the generation of

electric power in said plant.

FLEISH PLANT

Claim No. 6. The Sierra Pacific Power Company, a

corporation owner, is entitled and allowed to divert at all times from

the Truckee River through the Fleish Power Ditch and Flume, which

has its intake on the east bank of the Truckee River in the SE 1/4 of

Section 6, Township 18, N.R. 18 E., sufficient water with a priority

of February 16, 1904, to deliver, after transportation loss

This text is long and has been trimmed here. Open the source document for the complete record.