EUREKA CTY. VS. DIST. CT. (SADLER RANCH, LLC)
Citation2017 NV 111
Date Filed2017-12-28
Docket72317
Cited0 times
StatusPublished
Full Opinion (html_with_citations)
133 Nev., Advance Opinion I I I
IN THE SUPREME COURT OF THE STATE OF NEVADA
EUREKA COUNTY; DIAMOND No. 72317
NATURAL RESOURCES PROTECTION
& CONSERVATION ASSOCIATION;
JASON KING, P.E., NEVADA STATE
ENGINEER, DIVISION OF WATER
FILED
RESOURCES, DEPARTMENT OF DEC 2 8 2017
CONSERVATION AND NATURAL
RESOURCES; BAUMANN FAMILY
TRUST; BURNHAM FARMS, LLC;
GALEN BYLER; MARIAN BYLER;
CONLEY LAND & LIVESTOCK, LLC;
DAMELE FARMS, INC.; DIAMOND
VALLEY HAY COMPANY, INC.; FRED
L. ETCHEGARAY; JOHN J.
ETCHEGARAY; MARY JEAN
ETCHEGARAY; LW & MJ
ETCHEGARAY FAMILY TRUST;
EUREKA MANAGEMENT CO., INC.;
GALLAGHER FARMS LLC; JAYME L.
HALPIN; SANDI HALPIN; TIM
HALPIN; HIGH DESERT HAY, LLC;
J&T FARMS, LLC; J.W.L.
PROPERTIES, LLC; MARK MOYLE
FARMS LLC; J.R. MARTIN TRUST;
CHERYL MORRISON; MATT
MORRISON; DEBRA L. NEWTON;
WILLIAM H. NORTON; PATRICIA
NORTON; D.F. & E.M. PALMORE
FAMILY TRUST; STEWARDSHIP
FARMING, LLC; SCOTT BELL;
KRISTINA BELL; DON BERGNER;
LINDA BERGNER; JAMES
ETCHEVERRY; MICHEL AND
MARGARET ANN ETCHEVERRY
FAMILY LIMITED PARTNERSHIP;
MARK T. AND JENNIFER R.
ETCHEVERRY FAMILY TRUST;
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MARTIN P. AND KATHLEEN A.
ETCHEVERRY FAMILY TRUST;
LAVON MILLER; KRISTI MILLER;
LYNFORD MILLER; SUSAN MILLER;
ALBERTA MORRISON; AND DONALD
MORRISON,
Petitioners,
vs.
THE SEVENTH JUDICIAL DISTRICT
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF
EUREKA; AND THE HONORABLE
GARY FAIRMAN, DISTRICT JUDGE,
Respondents,
and
SADLER RANCH, LLC; ROGER
ALLEN; AND JUDITH ALLEN,
Real Parties in Interest.
Original petition for a writ of prohibition, or in the alternative,
certiorari or mandamus, in a water law action.
Petition granted.
Theodore Beutel, District Attorney, Eureka County; Allison MacKenzie,
Ltd., and Karen A. Peterson and Willis M. Wagner, Carson City,
for Petitioner Eureka County.
Adam Paul Laxalt, Attorney General, and Justina A. Caviglia, Deputy
Attorney General, Carson City,
for Petitioner Jason King, RE.
McDonald Carano Wilson LLP and Debbie A. Leonard and Michael A. T.
Pagni, Reno,
for Petitioners.
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Parsons Behle & Latimer and Robert W. Marshall and Gregory H.
Morrison, Reno,
for Real Parties in Interest Roger Allen and Judith Allen.
Taggart & Taggart, Ltd., and David H. Rigdon, Paul G. Taggart, and Rachel
L. Wise, Carson City,
for Real Party in Interest Sadler Ranch, LLC.
BEFORE HARDESTY, PARRAGUIRRE and STIGLICH, JJ.
OPINION
By the Court, HARDESTY, J.:
Water in Diamond Valley, Nevada, is over-appropriated and
has been pumped at a rate exceeding its perennial yield for over four
decades. In 2014, the Office of the State Engineer found that groundwater
levels in southern Diamond Valley had fallen over 100 feet. A vested, senior
water rights holder has asked the district court to order the State Engineer
to curtail junior water rights in the Diamond Valley Hydrographic Basin
No. 153 (Diamond Valley). In this writ proceeding, we must determine
whether junior water rights holders are entitled to notice of and an
opportunity to participate in the district court's consideration of this
curtailment request. Because the district court's consideration of the
matter at the upcoming show cause hearing could potentially result in the
initiation of curtailment proceedings, we conclude that due process requires
junior water rights holders in Diamond Valley be given notice and an
opportunity to be heard.
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FACTS AND PROCEDURAL HISTORY
Real party in interest Sadler Ranch purchased its real property
and water rights in Diamond Valley in September 2011. The acquired
ranch was established in the mid-19th century, and thus, Sadler Ranch
claims to be a pre-statutory, vested, senior water rights holder in Diamond
Valley. Of the two major springs on Sadler Ranch's property, one has
noticeably diminished in flow and the other has stopped flowing completely.
In 2014, Sadler Ranch petitioned the State Engineer for
replacement water to offset the loss from its springs but was ultimately
awarded a fraction of the volume of water it requested. Dissatisfied with
the State Engineer's replacement water award, Sadler Ranch petitioned the
district court in April 2015 to order the State Engineer to initiate
curtailment proceedings regarding junior water rights in Diamond Valley
and to reimburse Sadler Ranch for damage to its senior water rights. The
district court subsequently allowed dozens of parties to intervene in the
litigation, including petitioners Eureka County and Diamond Natural
Resources Protections & Conservation (collectively, Eureka County) and all
of the other petitioners listed in the instant petition. The State Engineer
then proposed to designate Diamond Valley as a critical management area
(CMA). 1 Sadler Ranch moved to stay the proceedings pending the outcome
of the State Engineer's action, which the district court granted. In August
2015, the State Engineer officially designated Diamond Valley as a CMA
pursuant to his authority under NRS 534.110(7)(a).
CMA is a "basin in which withdrawals of groundwater consistently
exceed the perennial yield of the basin." NRS 534.110(7)(a). A basin must
be designated a CMA for at least 10 consecutive years before the State
Engineer is required to curtail withdrawals in that basin. NRS 534.110(7).
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After determining that the State Engineer's CMA designation
was not going to help its water dispute, Sadler Ranch filed an amended
petition for curtailment. In its amended petition, Sadler Ranch requested
the district court to either (1) direct the State Engineer to begin curtailment
proceedings, or (2) issue an order curtailing pumping based on the State
Engineer's knowing and intentional refusal to follow Nevada law. The
district court entered an order granting in part and denying in part the
State Engineer's motion to dismiss, finding that Sadler Ranch's amended
petition pleaded sufficient facts to conclude that the State Engineer's failure
to order curtailment was an abuse of his discretion. The same day, the
district court entered an alternative writ of mandamus directing the State
Engineer to begin curtailment proceedings or show cause why the State
Engineer has not done so.
In August 2016, the State Engineer filed a motion arguing that
Sadler Ranch must provide notice to all Diamond Valley appropriators who
may be affected by the district court's decision at the upcoming show cause
hearing. Eureka County joined in the motion. Sadler Ranch opposed the
motion, arguing that the upcoming hearing to show cause would not result
in a final order of curtailment that requires notice and that the State
Engineer was the proper party to give notice to Diamond Valley
appropriators because he maintains the records of water rights holders.
In October 2016, the district court denied the State Engineer's
motion. The district court reasoned that even if it ordered curtailment at
the upcoming show cause hearing, "the 'how' and 'who' of curtailment could
not be decided until a future proceeding." The district court concluded that
due process was not required until that future proceeding. The district
court also reasoned that any potential unnotified parties were already
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adequately represented by the diverse interests of the dozens of interveners
and, because NRCP 24 prevents parties from intervening in an action when
their interests are already adequately represented, it would be illogical to
notify parties of a proceeding they cannot then join.
Eureka County subsequently filed a motion for reconsideration
and was joined by the State Engineer. The district court denied Eureka
County's motion to reconsider, again finding that unnotified appropriators
were already adequately represented and that due process had not attached
because the upcoming show cause hearing would not curtail any specific
parties' rights. In February 2017, Eureka County filed the instant writ
petition.
DISCUSSION
The writ petition should be entertained
"This court has original jurisdiction to issue writs of mandamus
and prohibition." MountainView Hosp., Inc. v. Eighth Judicial Dist. Court,
128 Nev. 180, 184,273 P.3d 861, 864
(2012); see Nev. Const. art. 6, § 4. "A
writ of mandamus is available to compel the performance of an act which
the law requires as a duty resulting from an office, trust or station, or to
control a manifest abuse or an arbitrary or capricious exercise of discretion."
Cote H. v. Eighth Judicial Dist. Court, 124 Nev. 36, 39,175 P.3d 906
, 907-
08 (2008) (internal quotation marks and alterations omitted). Because a
writ petition seeks an extraordinary remedy, this court has discretion
whether to consider such a petition. Cheung v. Eighth Judicial Dist. Court,
121 Nev. 867, 869,124 P.3d 550, 552
(2005).
Generally, extraordinary writ relief is only available where
there is no "plain, speedy and adequate remedy in the ordinary course of
law." NRS 34.170; Intl Game Tech., Inc. v. Second Judicial Dist. Court, 124
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Nev. 193, 197, 179 P.3d 556, 558 (2008). However, we have previously
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stated that "fw]hile an appeal generally constitutes an adequate and speedy
remedy precluding writ relief, we have, nonetheless, exercised our
discretion to intervene under circumstances of urgency or strong necessity,
or when an important issue of law needs clarification and sound judicial
economy and administration favor the granting of the petition." Nev. Yellow
Cab Corp. v. Eighth Judicial Dist. Court, 132 Nev., Adv. Op. 77, 383 P.3d
246, 248 (2016) (quoting Cote H., 124 Nev. at 39,175 P.3d at 907-08
).
We choose to entertain the instant writ petition as one for
mandamus since it appears the district court arbitrarily and capriciously
exercised its discretion by denying the State Engineer's motion. 2 See Cote
H., 124 Nev. at 39, 175 P.3d at 908. The parties do not dispute the district
court's contention that at some point in the proceedings due process will
attach but dispute when due process must be provided for junior water
rights holders. Judicial economy favors answering the due process question
now rather than on appeal after the hearings are held. Additionally, even
though there is only one basin in Nevada currently designated as a CMA,
there are a number of other basins that are currently over-appropriated and
may require curtailment proceedings in the future. Thus, addressing the
due process concerns now will clarify the notice requirements in water
rights curtailment actions.
Due process requires notice be given to all junior water rights holders
We review constitutional challenges de novo, including a
violation of due process rights challenge. Callie v. Bowling, 123 Nev. 181,
183,160 P.3d 878, 879
(2007). The Nevada Constitution protects against
2 Because we entertain this writ petition as one for mandamus, we
deny petitioners' alternative requests for a writ of prohibition and a writ of
certiorari.
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the deprivation of property without due process of law. Nev. Const. art. 1,
§ 8(5). Procedural due process requires that parties receive "notice and an
opportunity to be heard." Callie, 123 Nev. at 183,160 P.3d at 879
(internal
quotation marks omitted). In Nevada, water rights are "regarded and
protected as real property." Application of Filippini, 66 Nev. 17, 21-22,202 P.2d 535, 537
(1949).
In the lower court proceedings, Eureka County, the State
Engineer, Sadler Ranch, and the district court all agreed that water rights
are property rights protected by due process. The dispute concerns when
due process rights attach and at what stage in the proceedings notice must
be given. Eureka County characterizes the upcoming show cause hearing
as the decision on whether curtailment should begin. The State Engineer
argues that because Nevada has a strict priority system for water rights,
the "who" is already determined by the priority date once the court
determines whether to curtail. Eureka County agrees that not every
Diamond Valley appropriator will be affected by the possible curtailment,
but it maintains that junior appropriators below the cutoff date will
certainly be affected, and some will have been notified after their only
meaningful opportunity to protect their rights has passed.
Sadler Ranch argues that notice is not required because, even
if Sadler Ranch is successful at the upcoming show cause hearing, the result
would merely be the initiation of more detailed proceedings, at which point
due process will be required. The district court agreed with Sadler Ranch's
characterization, stating that due process will only attach when the court is
faced with the later decisions regarding the specific "how' and 'who' of
curtailment."
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We hold that in order to comply with constitutional due process,
notice to junior water rights holders is required before the upcoming show
cause hearing. The district court characterizes the show cause hearing as
merely determining whether future proceedings are required. However, in
its show cause order, the district court directed that:
immediately upon receipt of this writ, the State
Engineer begin the required proceedings to order
curtailment of pumping in Diamond Valley on the
basis of priority of right, or, that you show cause
why you have not done so and why this Court
should not order you to begin the required
proceedings to order curtailment and why this
Court should not order curtailment of pumping in
Diamond Valley.
Based on the language of the order, it appears that one possible outcome of
the show cause hearing is a judicial determination forcing curtailment to
begin. Any junior water rights holders notified after that decision will only
be able to argue that the curtailment cutoff date should be below their
priority level, rather than arguing for a solution other than curtailment at
all.
The district court appears to be taking a "wait and see"
approach to the notice issue because there is a possibility curtailment may
not be ordered at the upcoming hearing, and thus, the expense and delay of
providing notice would have been unnecessary. However, because the
language in the show cause order indicates that the district court may enter
an order forcing curtailment to begin, junior water rights holders must be
given an opportunity to make their case for or against the option of
curtailment. Notice must be given at an appropriate stage in the
proceedings to give parties meaningful input in the adjudication of their
rights. Hamdi v. Rumsfeld, 542 U.S. 507, 533 (2004) ("It is equally
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fundamental that the right to notice and an opportunity to be heard must
be granted at a meaningful time and in a meaningful manner." (quoting
Fuentes v. Shevin, 407 U.S. 67, 80 (1972) (other quotation marks and
citations omitted))). Thus, junior water rights holders must be notified
before the curtailment decision is made, even if the specific "how" and "who"
of curtailment is decided in a future proceeding. As to the district court's
determination that the junior water rights holders' interests were already
adequately represented, we conclude that real property rights, including
water rights, are unique forms of property and those with an ownership
interest cannot be adequately represented by others. See Dixon v. Thatcher,
103 Nev. 414, 416,742 P.2d 1029, 1030
(1987) (holding that "real property
and its attributes are considered unique").
The district court expressly relied on Desert Valley Water Co. v.
State, 104 Nev. 718,766 P.2d 886
(1988), in drawing its conclusion that
notice need not be given at this stage in the proceedings. Desert Valley dealt
with the State Engineer's denial of a company's numerous applications to
pump underground water. Id. at 719,766 P.2d at 886
. The company
appealed the State Engineer's decision to the district court and noticed the
State Engineer pursuant to NRS 533.450. Id. The district court dismissed
the appeal because the company failed to provide notice to other persons or
entities affected by the State Engineer's denial of the applications as
required by the statute. Id. We reversed the district court, stating that "a
decision concerning the allocation of water affects every citizen of Nevada"
and that notice only needed to be served "at a minimum, upon those parties
who have participated in the proceedings." Id. at 720,766 P.2d at 887
.
The district court's reliance on Desert Valley is misplaced
because that case dealt with providing notice of an appeal, as required by
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statute, rather than notice required by due process prior to the deprivation
of a property right. The appeal concerned the denial of one company's
applications to pump water, which is not a vested right, and thus, this
court's comments on the required notice for such an appeal are inapplicable
to the instant petition, which involves the possibility that parties may have
their existing water rights curtailed. Thus, here, the district court's
exercise of its discretion to deny the junior water rights holders their due
process rights to notice and the opportunity to be heard at the upcoming
show cause hearing was arbitrary and capricious. See Cote H., 124 Nev. at
39, 175 P.3d at 908; Hamdi,542 U.S. at 533
.
Additionally, real parties in interest Roger and Judith Allen
argue that the upcoming show cause hearing will only determine a "pure
question of law. . . regarding how and when the State Engineer must
address overpumping, if at all," and involving every junior water rights
holder in the litigation is unnecessary as it will not help resolve that
question. The Allens argue that petitioners have failed to identify any
question of fact at issue that would impact the question of whether
curtailment is required, and allowing hundreds of potential litigants to
participate in the proceedings will not help the district court decide how to
apply Nevada water law to the underlying facts of the case. However, we
conclude that all Diamond Valley water rights holders should be given
notice of the upcoming show cause hearing regardless of whether the
district court is deciding only a "pure question of law." Further, the district
court's order setting the hearing suggests some factual questions may be
considered. As described above, the language of the show cause order leaves
open the possibility that the district court will order curtailment
proceedings, thus affecting unnotified parties' property rights. Despite
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determining questions of law, the district court is still allowing evidentiary
hearings, and for that reason, we conclude that unnotified water rights
holders must be allowed to present their arguments and evidence as well.
Finally, Sadler Ranch argues that Eureka County's writ
petition is just a tactic to delay curtailment. Sadler Ranch contends that
because of the State Engineer's past delays and continued failure to correct
the water situation, Sadler Ranch's wells are drying up, which impairs
Sadler Ranch's water rights without due process. However, Sadler Ranch
acknowledges that at some point in future proceedings, the district court
will require all Diamond Valley water rights holders to be given notice. It
does not appear unduly burdensome to give notice now rather than at a less
meaningful time in future proceedings. Notice will still have to be given
before water rights are curtailed, whether now or before a future
proceeding. 3
CONCLUSION
Because the upcoming show cause hearing may result in a court
order to begin curtailment proceedings, resulting in possible deprivation of
property rights, due process requires junior water rights holders in
Diamond Valley to be given notice and an opportunity to be heard before
the district court conducts the hearing. Therefore, we grant the petition
and direct the clerk of this court to issue a writ of mandamus vacating the
district court's order denying the State Engineer's motion for Sadler Ranch
to provide notice to all affected appropriators in Diamond Valley and direct
3 Based on our disposition, we decline to address petitioners'
arguments concerning the interpretation of NRS 534.110 and real parties
in interest's unclean hands arguments. Both are more appropriately vetted
in the district court during the upcoming hearings.
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the district court to enter an order requiring that notice be provided to all
junior water rights holders in Diamond Valley prior to any show cause
hearing being conducted in the district court.
, J.
We concur:
241ska
Parraguirre
r
_Astsu_s. J.
Stiglich
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