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Archive for the ‘Water Permitting’ Category

‘Ghost claims’ of dead pioneers haunt South Dakota water rights

Posted on: September 26th, 2016
by David Ganje

Author Seth Tupper Journal staff

It’s a safe bet that neither John P. Plunkett nor Edward Lynch will show up to defend their water rights when a state board considers terminating them later this year.

That’s because Plunkett and Lynch are dead — and have been for a long time.

Yet their joint rights to divert water from Rapid Creek live on, because they obtained the rights in 1896, more than a decade before the government of South Dakota began regulating the use of water.

The grandfathered status of the old Plunkett-Lynch water rights means they are still technically in force, as are 437 other sets of water rights filed prior to the adoption of state water-use laws in 1907. Many of the rights are for large amounts of water, and some are attached to famous names like Seth Bullock, the legendary lawman of the Deadwood gold-rush era who still technically owns a water right on the Redwater River in Butte County.

One modern expert refers to the pre-regulatory water rights as “ghost claims,” and their potential to haunt modern water management is highlighted by the Plunkett-Lynch case. The case could soon be the subject of an adversarial hearing involving state regulators who want to cancel the water rights and a local rancher, Richard Rausch, who wants to keep the rights attached to the land he leases…..

To read the entire article, visit the Rapid City Journal here.

Also available via FarmForum.net

Tribal Water Rights – The Road to Securing Water

Posted on: September 8th, 2016
by David Ganje

Tribal Water Rights – The Road to Securing Water
By David L Ganje

“Water is perhaps the most valuable tribal resource remaining and is one of the most significant potential forces of change. The potential size of tribal water rights should not be underestimated.” – Western Water Policy Review Advisory Commission

A Canadian Judge – in making a legal decision — recently recited two important principals of British law, both of which are found in US law. The Judge stated there are two legal maxims, one at common law and the other at the law of equity: First, the law comes to the aid of those who are vigilant, not those who sleep on their rights. Second the legal principle of equity comes to the aid of those who are vigilant, not those who sleep on their rights. Upper Great Plains tribes today must be vigilant in obtaining reserved but yet undetermined water rights. This involves two choices. Litigation or negotiation. In this article I argue that the Upper Great Plains tribes should undertake first, active, public and aggressive negotiation, and then if unsuccessful, litigation to recover water rights. But for the current water rights negotiation by the Standing Rock Sioux tribe, reserve language found in the successful Mni Wiconi Rural Water Supply Project and language found in some tribal water codes, Upper Great Plains tribes have not taken an official position with the BIA claiming reserved water rights. This silence is a mistake. My argument is this: treaties and case law have given Upper Great Plains tribes a property right, which is a right to use and access groundwater and surface water. However Upper Great Plains tribes have not fully sought and claimed that right. Both groundwater and surface water reserved rights must be championed by Upper Great Plains tribes.

While Standing Rock has taken the first step in opening negotiations with the State of South Dakota and North Dakota on the matter of water rights, the US Department of Interior has yet failed to assign a representative from its Indian water rights division to participate in these negotiations. Standing Rock is taking the right action; it is putting on the table the reservation’s water claims and doing it in a serious forum. Standing Rock has not by these negotiations abrogated its claims, and will preserve the tribe’s water rights throughout the negotiations without prejudice to its right to refuse any proposed terms or accept any proposed settlement terms. Having recognized this strategically proper first step by the tribe it is important to disclose the failure of the Department of Interior to participate in the negotiations. The DOI’s failure to participate in the ongoing talks is wrong and contradicts that department’s statutory duties regarding Indian tribes in the US. Interior Secretary Sally Jewell, who has publicly stated the administration’s commitment to resolving water rights, should immediately direct a staff person to actively participate in these water talks.

Some tribes have not yet adopted tribal water codes – legal guides for the tribal community for the management and use of water. Tribes should consider the creation of an official water code as a relevant step to securing water rights. Some tribes may have to amend the tribal constitution in order to properly pass a tribal water code. But it is worth the effort.

Tribal rights to water is a treaty right. It cannot be lost through non-assertion. Indian reserved water rights may be asserted at any time, cannot be lost by nonuse, and are assigned priority dates based on the date for the establishment of reservation. In legal theory the loss of water rights would require abrogation by a tribe or the federal government before the rights could be extinguished. Such an abrogation is in reality irrelevant because this has not and will not happen. Abrogation is not therefore the issue at hand.

It is a mistake to assume that any non-Indian interest group or government agency will make efforts to preserve, advocate for or even address these reserved yet undetermined tribal water rights. The US Army Corps of Engineers (Corps), for example, recognized in congressional testimony in 2004 that the tribes have claims to reserve water rights. Having taken that position, the Corps nevertheless in 2012 proposed a new program to produce revenue for the US government by selling what it called “surplus water” from Missouri River reservoirs. In proposing this new program for the sale of so-called surplus water the Corps created a 204-page report to support its argument for the proposed project. The Corp’s report provided statistics, projections and data but ignored and failed to discuss the existing water rights of tribes. Indian tribes are not subject to the Corps’ general authority to create or impose surplus water regulations.

It has not proven so historically, and it is not to be expected that non-tribal government agencies, whether trust-based or regulatory, have any strong reason to advance tribal water rights. No politician or bureaucrat will seriously address tribal water rights as long as the institution he represents have unchallenged bureaucratic control over water management. The only change preferred by a bureaucracy-in-charge is a change resulting in an expansion of the bureaucracy’s own power. That has been the case, for example, with the slow accretion of non-Indian interests and water demands placed on existing water in the Missouri River. As time goes on there will be less and less water to claim.

The Corp’s recent surplus money project is an example of an agency asserting itself over available water. It matters not whether the available water is called surplus water, water behind a damn, groundwater, or instream flows. A claim was made to the water. The claim did not exist before the Corps did the study and asserted the claim. Had the Corp’s project been successful, that water would have been that much more water taken away and earmarked for management and control by a bureaucracy.
Litigation of reserved water rights is one of the two alternative means to secure water rights discussed in this article. Water rights litigation is a complex, time consuming legal playing field. Much can be achieved, but the time, well known litigation risks and money involved must be kept in mind.

The Crow Creek Reservation recently started water rights litigation in the United States Court of Federal Claims asking for both money damages as well as a request for a ruling quantifying the tribe’s reserved surface water rights to the Missouri River. The Crow Creek complaint calls for money damages, as mentioned, and for a judgment that the tribe is ‘entitled to declaratory and injunctive relief including judgment requiring Defendant (the United States) to establish and measure the reserved water rights held by the tribe, and to quantify the reserved water rights held by the tribe, and to assert water rights on behalf of the tribe and to record legal title to water held in trust for the benefit of the tribe.’

The complaint lists the type of relief that should be requested in reserved water rights litigation. The complaint filed by Crow Creek, however, has problems:

  1. The court in which the complaint was filed does not have full jurisdiction to award the complete relief requested in the complaint. By the reorganization statutes of the Court of Federal Claims is has authority to render declaratory judgments only in matters regarding contract or procurement disputes.
  2. The court is unlikely to get into its main jurisdictional issue: money damages in favor of the tribe. It is unlikely to do this because there is no existing water rights determination or quantification by statute, final decree, or water agreement from which the court could calculate a money damages amount. And, further, the important matter of Indian water rights under the Winter’s doctrine is beyond the general expertise of the Court of Claims.
  3. One of the important requests in the complaint is for injunctive relief. This is also beyond the jurisdiction of the Court of Claims. Bowen v. Massachusetts, 487 U.S. 879, 905 (1988) (“[W]e have stated categorically that ‘the Court of Claims has no power to grant equitable relief.’’
  4. The relevant requests in the Crow Creek complaint are requests for an injunction, for a declaration of rights, for the establishment of water rights and for quantification of water rights. The Court of Claims however has only incidental or collateral jurisdiction over these requests making it unlikely that the court would take on such important, significant and historical remedies.
  5. The complaint does not include a necessary party if it is attempting to finalize tribal surface water rights. The state of South Dakota also has water rights to the river. The state is not named in the lawsuit. The Court of Claims cannot impose duties or obligations regarding water rights or the allocation of the tribe’s claim when a relevant party is not included in the suit.
  6. Any adjudication against or settlement with the United States under the pending complaint would be incomplete as stated in the complaint. Groundwater is an integral part of all Indian reserved water claims. The majority of courts in the United States addressing Indian reserved water rights have acknowledged that Indian reserved water rights also apply to groundwater. The reserved water claims of the Crow Creek reservation, one must assume, also include groundwater. However, the Crow Creek complaint for damages for loss of water resources makes no claim for reserved tribal groundwater rights.

Tribes in the US have found success through water rights negotiations with State and Federal bodies. With an appreciation for the uncertainty of litigation, negotiating is the best first step. Negotiations should be pursued in the following fashion. The master water rights Settlement Agreement should include: an agreement setting forth rights to use and administer waters; and an agreement quantifying reserved water rights for historic and current as well as planned uses; and if there is a specific project planned by a tribe, then that project is to be negotiated and drafted as a separate agreement but integrated as a part of the master Settlement Agreement. Any Settlement Agreement would become effective if the Congress passes a Settlement Act and the President signs the act into law. Once the Settlement Act becomes law, the Secretary of the Interior must execute the Settlement Agreement and the Settlement Contract.

An advantage of multiple party negotiations: actual representatives are present sitting across the table. These face to face negotiations bring out the real differences between the parties without hiding behind silence, animosity or evasive politics. If the negotiated terms do not satisfy the rights of tribes, they are not bound to accept the terms. The final outcome of the negotiations is to be decided by the tribe.

The Snake River Water Settlement Act is a recent example of successful Indian water right’s negotiations. Although the US Senate is not an owíčhota of wisdom and justice, the Senate report discussing the Snake River Water Settlement Act addresses the issue of litigation of water rights versus negotiated water agreements:

“The shortcomings of the general stream adjudication process [this is a fancy phrase for litigation] as a device for water rights dispute resolution have led to an increasing number of agreed-to water rights settlements on streams in the western States where the parties, including Indian tribes, negotiate and compromise among themselves as to quantity, priority dates and other issues, and where the Federal government contributes money to the settlement in order to achieve various goals that could not otherwise be achieved within the confines of a general stream adjudication.”
Sen. Rep. 108-389, at 2-3

The Snake River water agreements provided, among other terms, designated water for a variety of tribal uses on the reservation; recognition of allotment water rights and a due process requirement for tribal regulation of such rights; a right to access and use of springs and fountains on federal lands in off-reservation areas; and instream flow minimums at over two hundred locations. When protecting a people’s rights, it is good to hesitate and think. However, it is not good to hesitate and think and then not act.

Water rights granted to tribes are the most important example in American law of treaty-based reserved rights. Tribes do not however dwell alone in the world of water rights. Tribes should abandon silence on the subject, stick their elbows in the table now and publicly assert their water rights. A tribe cannot secure what it does not itself assert.

Civil Water Wars On The Prairie

Posted on: August 19th, 2016
by David Ganje

A couple of years ago I was invited to speak at the annual Eastern South Dakota Water Conference.  I told the audience that when one reviews natural resources oil is fashionable and gold is sexy but the essential natural resource is water. 

This article discusses a very recent South Dakota case involving water rights and injunctions. Water disputes can be resolved by the legal remedy of injunction. South Dakota law allows courts to grant a standing and continuous injunction, permanently ordering a party to stop an activity. An injunction is usually used where money won’t do the trick. The harmed or affected party in a water dispute is usually the property owner filing the lawsuit. It is his/her decision to request a particular legal remedy which then sets the legal stage. A claim in water disputes is often in trespass or in nuisance. The requested remedy may be for money damages or for an injunction. Some parties seek both an injunction and money damages – that’s what the party did in the new South Dakota case discussed in this article. It should be stated that an ‘injunction’ is a legal remedy. It is not the legal basis for a claim. The South Dakota Supreme Court politely calls these water dispute incidents drainage events.

The law has requirements in order to obtain a permanent injunction. Certain tests apply. Money must not be sufficient as a remedy, or it must be too difficult to determine how much money would be proper. The case under discussion held that permanent injunctions may only be given if one or more of certain specified conditions exist. If it is possible that a harmed party could calculate relief by the payment of money or that the party could prevent future judicial proceedings without the use of an injunction, a permanent injunction cannot be granted.

The South Dakota case arises out of a dispute between two neighbors over surface water flow. Mr. Magner alleged that the Brinkmans were altering their land in such a way that caused water to flow and pool onto Magner’s land. Magner brought suit, requesting money to repair the damages caused by the water flow as well as an injunction forcing the Brinkmans to reverse changes made that led to the water pooling. In the first part of the trial, the jury awarded Magner money to cover damages that already happened. During the lawsuit, Magner revised his claim to request an injunction ordering the Brinkmans to pay for preventative landscaping on Magner’s land. This landscaping was intended to prevent future damages. After considering this new request, the trial court granted Magner’s late request for an injunction, ordering the Brinkmans to pay money to cover the costs of a landscaping plan.

The Brinkmans appealed this decision, arguing that the lower court erred in granting Magner’s revised injunction. The Supreme Court reversed the trial court. The Court reasoned that the injunction was not statutorily authorized – therefore it could not be granted. Magner said that he could use a specific amount of money to prevent future damages. The Court found this to be a case where money relief would be sufficient both to prevent future lawsuits and to make Magner whole. In addition the amount of money was easily determined in the case – the harmed party had proposed a specific dollar amount. The fact that Magner could request an amount of money that would solve the problem and prevent future injury defeated the request for an injunction. The Court said that the Plaintiff’s money damage request as a part of its future damages claim shows that harm to the property could be “easily measured in (money) damages.” In other words, if the harmed party shows his loss in terms of dollars, he is stuck with ‘dollars’ as his remedy.

The American court system, reflecting society, has a predilection for using money damages as a preferred remedy for resolving legal disputes. The preference for requesting money damages is a mistake when a party is considering his legal options in efforts to protect the integrity and value of property while that property sits in harm’s way. How can one translate into ‘money damages’ a future harm to one’s real estate that is imminent and immediate but that has not yet occurred? Further, how can one accurately predict a ‘dollar equivalent’ to property damaged by water flow? The takeaway: if you are the harmed party in a water dispute, think carefully of the remedy you request.  Money is fleeting.

David Ganje practices law in the area of natural resources, environmental and commercial law.

Is the Trump Option Available In SD For Condemnation?

Posted on: February 13th, 2016
by David Ganje

Is the Trump Option Available In SD For Condemnation?

Eminent domain is one of the toughest and most controversial legal powers available to a government, but the South Dakota legislature has so far failed to manage it properly. Eminent domain allows a governmental body to convert privately owned land to another use, often over the objections of the current landowner. The Donald Trump Option is the right of a private party to use eminent domain.  This is done by developers, pipeline companies and hotel builders alike. This process is commonly known as a ‘taking’ or ‘condemning the land.’ There are rules, of course. A landowner must be paid “just compensation” for the condemnation of his land. Further, the land that is to be taken may only be taken to further a beneficial public use.

The ability to exercise eminent domain is so powerful that it almost always remains the final legal option. The use of eminent domain is not solely limited to governments. Private parties as well as corporations may exercise the immense power of eminent domain. For example, South Dakota law states that “Any person may exercise the right of eminent domain…to acquire as a public use any property or other rights necessary for application of water to beneficial uses.” Private parties as well as corporations may exercise the immense power of eminent domain.

The law allows a private party to manage water rights by a taking. The statute states, “except as otherwise provided…no person may appropriate the waters of this state for any purpose without first obtaining a permit to do so.” The power of eminent domain may used if the taker puts water to a beneficial use. For this reason, a party may not successfully exercise eminent domain without first having a water permit.

This right to take comes into play when a party seeks access to land he doesn’t own in order to access water. What is a beneficial use? South Dakota law is intentionally vague on this subject. It says beneficial use is the use of water “that is reasonable and useful and beneficial to the appropriator, and at the same time is consistent with the interests of the public.” For courts, this is a balancing test, as opposed to a concrete definition. The question in eminent domain cases, then, is whether or not a proposed use of water fits this vague legislative definition of ‘beneficial use.’ The Supreme Court has implied that it can. As a result, eminent domain cases involving water can span an enormous berth of cases, with those claiming eminent domain seeking water for everything from irrigation to oil extraction.

There is irony in too much of what the South Dakota legislature does. Counties and municipalities are forbidden from using eminent domain for the benefit of a private party. Yet the field is wide open for private parties to use eminent domain for a private party’s benefit.

Whether it is a taking to obtain water rights or land for a pipeline, the matter of ‘just compensation’ to be given to the landowner is paramount. I have advocated in prior blog articles the need to revisit the matter of just compensation. This issue applies to a government or private taking.  The ‘valuation process’ should be changed.  The SD Supreme Court has stated that the state legislature has the authority to create the method of compensation in a condemnation proceeding.  The State Constitution is interestingly stronger from a landowner’s perspective than is the US Constitution on the issue of eminent domain.

State Senator Monroe, or his speechwriter, state that that my argument (and that of 5 states and counting as of 2012) is wrongheaded. He has stated, “We have well established legal mechanisms to compensate property owners and treat them fairly.”  Good negotiations by a landowner may result in more favorable compensation. But the playing field should be level between the land taker, who has the power of the law to take, and the landowner.  Senator Monroe’s refusal to look at the issue is a belittlement of efforts to protect property rights.

I do not know whether the Senator has had a pipeline run through his property under an eminent domain proceeding. A taking is not a normal market transaction because the landowner has no choice.  A landowner can’t walk away from the table. The legal process of taking private property is just as important as the right to free speech, freedom of religion and the protection against unreasonable search and seizures.

There are several problems with South Dakotan condemnation law. The law should be revised to include written disclosures following the requirements of Wyoming law. Wyoming law provides new rights for landowners in all condemnation proceedings, whether initiated by the government or private parties. SD law should require that the taker show the details of the proposed project plan and the written basis behind any compensation offer. An additional provision that should be changed is the legal taking procedure. Currently the procedure does not allow the landowner the recovery of all of his court costs, appraisal costs, expert witness fees and attorney’s fees even in the event he should prevail in the case. This forces landowners to fear spending money defending their own land, something that a citizen should never have to do. SD law should provide that a landowner is entitled to an award of all court costs, appraisal costs, expert witness fees and attorney’s fees if the taker failed to negotiate in good faith, or if the compensation awarded by the court or jury exceeds the amount of money offered by the taker to the landowner. Until then, the playing field will remain skewed in favor of takers.

David Ganje. David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law in South Dakota and North Dakota. The website is Lexenergy.net

Does Eminent Domain Apply to Water Rights?

Posted on: February 7th, 2016
by David Ganje

Does Eminent Domain Apply to Water Rights?

Eminent domain is one of the toughest and most controversial legal powers available to a government. The doctrine of eminent domain allows a governmental body to convert privately owned land to another use, often over the objections of the current landowner. This process is commonly known as ‘condemning the land.’ There are rules, of course. A private landowner must be paid “just compensation” for the condemnation of their land. I have written several blog articles regarding the matter of just compensation. Further, the land that is to be taken must be taken to further a beneficial public use.

The ability to exercise eminent domain is so powerful that it almost always remains a final legal option left to state and government bodies. In North Dakota, a little-known law allows private citizens to exercise eminent domain. North Dakota law states that “The United States, or any person, corporation, limited liability company, or association [may] exercise the right of eminent domain to acquire for a public use any property or rights existing when found necessary for the application of water to beneficial uses.” Private citizens as well as corporations may exercise the immense power of eminent domain – but only when it comes to using water for a beneficial use.

North Dakota evaluates whether or not a citizen is able to put water to a beneficial use through a permit system. The law requires “any person, before…appropriating waters of the state…, shall first secure a water permit from the state engineer.” There are few sources of water (groundwater, surface water, river water, etc.) within the limits of the state that are not subject to such a water permit. The power of eminent domain can only be harnessed in order to put water to a beneficial use. For this reason, a citizen cannot successfully exercise eminent domain without first having a water permit.

The right of eminent domain may come into play when a private citizen or corporation wants to use water for a beneficial use, but needs access to land they don’t own in order to access water. What is a beneficial use? North Dakota law is intentionally vague on this subject. It says beneficial use is the use of water for “a purpose consistent with the best interest of the people of the state.”

Traditionally the landowner who desires the use of a water source, having first secured a state permit, will negotiate an easement with the landowner who owns the land on which the water sits. But this does not always work out. Such was the case in Mougey Farms v. Kaspari, a 1998 North Dakota Supreme Court case. The plaintiff, Mougey, owned farmland neighboring the defendant Kaspari’s land. Kaspari’s land also bordered the Sheyenne River. Mougey wanted to use the Sheyenne River as a water supply to irrigate his land. To that purpose Mougey approached Kaspari to negotiate a lease of his land in order to build a water transport system connecting Mougey’s irrigation system to the Sheyenne River. Kaspari agreed, the two signed a lease, and the irrigation system was built across Kaspari’s land without incident. The lease began in 1979 and continued for almost seventeen years.

In 1996 Kaspari informed Mougey that the lease would not be renewed, and Mougey would no longer be allowed to transport water from the Sheyenne River to Mougey’s farmland. This left Mougey without a source of water for irrigation. Mougey brought suit with an eminent domain claim against Kaspari’s land – in other words, he brought a suit to condemn the part of Kaspari’s land on which the water pipeline stood, asking for the right to continue piping water from the river to his irrigation system. Though this argument was rejected in the lower court, the North Dakota Supreme Court held that “irrigation of farmland under a perfected water permit issued by the State Engineer is a beneficial use of water consistent with the best interests of the people of North Dakota, which we conclude satisfies the ‘public use’ requirement.” The Supreme Court of North Dakota held that a private citizen could exercise the power of eminent domain in order to condemn part of his neighbor’s land, so long as the condemnation was in support of an approved public use of water.

The law lays out what public uses trigger the right of eminent domain. It states, “oil, gas, coal, and carbon dioxide pipelines and works” and the plants for supplying the above, together with “lands, buildings, and all other improvements” needed to for the purpose of “generating, refining, regulating, compressing, transmitting, or…development and control” are all public uses capable of triggering eminent domain.

The question is whether or not use of water fits a category. Is the use one that supports “generating, refining, regulating, compressing, transmitting,” or “development and control” of oil and/or natural gas? This issue may be considered regarding one of the most important uses of water in the oil and gas industry, hydraulic fracturing. There are parallels that can be drawn between the use of water for irrigation seen in Mougey Farms and the use of water for hydraulic fracturing.

Energy developers and landowners should be aware of this eminent domain statute and the possibility of its use. Both parties need to remember that when water rights are involved in a public use, the prospect of eminent domain is conceivable. The North Dakota Supreme Court teaches us that the ‘eminent domain of water statute’ allows individuals or companies to acquire for public use property when found necessary for using water for beneficial purposes.

David Ganje. David Ganje of Ganje Law Offices practices in the area of natural resources, environmental and commercial law in South Dakota and North Dakota. The website is Lexenergy.net