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TABLE
OF CONTENTS
TABLE
OF CONTENTS
TABLE OF AUTHORITIES
PROPOSITIONS OF LAW
ARGUMENT
TABLE
OF AUTHORITIES
Billups
v. Scott, 253 Neb. 287, 571 N. W.2d 603 (1997)
Brown Lumber Co. v. L. & N. R Co., 299
U. S. 393 (1937)
Far EastConference v. United States, 342 U.S.
570 (1952)
Fed. Mar. Bd v. Isbrandtsen Co., 356 U.S. 481,
(1958)
Great Northern Railway Co. v. Merchants Elevator
Co., 259 U.S. 285 (1922)
Humphrey Feed & Grain, Inc. v. Union P. R R
Co., 199 Neb. 189,257 N. W. 2d 391 (1977)
In re Interest of Battiato, 259 Neb. 829 (2000)
Nader v. Allegheny Airlines, Inc., 426 U.S.
290 (1976)
Nat'l Communications Ass'n, Inc. v. Am. Tel. &
Tel. Co., 46 F.3d 220 (2d Cir. 1995)
Reiter v. Cooper, 507 U.S. 258 (1993)
Sorensen v. Mitchell Irrigation, 129 Neb. 586
(1935)
State v. Birdwood Irrigation District, 154
Neb. 52 (1951)
Tassy v. Brunswick Hosp. Ctr. Inc., 296 F.3d
65 (2d Cir. 2002)
Texas & Pacific Railway Co. v. Abilene Cotton
Oil Co., 204 U.S. 426 (1907)
United States v. Philadelphia Nat'l Bank, 374
U.S. 321 (1963)
United States v. Radio Corp. of America, 358
U.S. 334 (1959)
United States v. W Pac. RR Co., 352 U.S. 59
(1956)
Statutes
NEB.
REV. STAT. § 13-1612
NEB. REV. STAT. § 46-226
NEB. REV. STAT. § 61-206
NEB. REV. STAT. § 46-656.05(3)
NEB. REV. STAT § 46-656.05(4)
NEB. REV. STAT. 46-656.25
2004 NEB. LAWS LEGISLATIVE BILL 962
LB 962, § 52
LB 962, § 53
LB 962, § 54
LB 962, § 55
LB 962, § 56
LB 962, § 58
LB 962, § 59
LB 962, § 79
LB 962, § 90
Secondary
Sources
BLACK'S
LAW DICTIONARY (pocket ed. 1996)
Robert B. von Mehren, The Antitrust Laws and Regulated
Industries: The Doctrine of Primary Jurisdiction,
67 HARV. L. REV. 929 (1954)
RICHARD R. POWELL, POWELL ON REAL PROPERTY (Release
91. June 2000)
PROPOSITIONS
OF LAW
Appellant
relies on the propositions of law set forth in its initial
brief together with the following:
I.
THE PRIMARY JURISDICTION DOCTRINE APPLIES WHENEVER ENFORCEMENT
OF A CLAIM, ORIGINALLY COGNIZABLE IN THE COURTS, REQUIRES
THE RESOLUTION OF ISSUES THAT HAVE BEEN PLACED WITHIN
THE SPECIAL COMPETENCE OF AN ADMINISTRATIVE BODY IN
ACCORDANCE WITH THE PURPOSES OF A REGULATORY SCHEME.
Humphrey Feed & Grain, Inc. v. UnionP. R R Co.,
199 Neb. 189,257 N. W. 2d 391 (1977).
II.
THE DOCTRINE DOES NOT APPLY IN RELATION TO A QUESTION
WHICH, WHILE PROPERLY DETERMINABLE BY AN ADMINISTRATIVE
TRIBUNAL, DOES NOT INVOLVE A QUESTION OF FACT, BUT ONE
OF PURE LAW, IS DETERMINABLE APART FROM THE EXERCISE
OF ADMINISTRATIVE DISCRETION, AND THE REQUISITE UNIFORMITY
OF DETERMINATION IS ATTAINABLE OTHERWISE THAN BY CONFINING
DETERMINATION OF THE QUESTION TO THE ADMINISTRATIVE
TRIBUNAL.
Interest of Battiato, 259 Neb. 829, 838 (2000).
ARGUMENT
I.
Introduction
The
Court requested additional briefs and arguments from
the parties addressing the following four issues:
(1)
The doctrine of primary jurisdiction.
(2) Primary jurisdiction in light of the Ground Water
Management and Protection Act and the recent adoption
of LB 962.
(3) The effect, if any, of the adoption of LB 962 on
this appeal.
(4) Whether the Nebraska Ground Water Management and
Protection Act or LB 962 have abrogated any common law
remedies that the appellant might have, or provide an
adequate remedy at law.
II.
Primary jurisdiction is a judicially created doctrine
originally applied to ensure consistency and uniformity
when determining technical, factual issues in regulated
industries, but is not applicable in this appeal for
several reasons.
"Primary
jurisdiction" was first introduced as a doctrine
in the United States Supreme Court in Texas &
Pacific Railway Co. v. Abilene Cotton Oil Co.,
204 U.S. 426 (1907). It was principally established
to ensure consistency and uniformity in regulated industries.
In Texas & Pacific Railway Co., the oil
company sued the railroad in state court, alleging that
it had charged unreasonable and discriminatory rates
for interstate shipments of cotton seed. The Supreme
Court held that the plaintiff was required to pursue
its claims with the Interstate Commerce Commission,
giving birth to the doctrine of primary jurisdiction.
The Supreme Court's decision in Texas & Pacific
Railway Co., was motivated by the uniformity that
would result if the Commission were permitted to resolve
questions about the reasonableness of the rates that
it had the responsibility to set and enforce. The Court
stated,
For
if, without previous action by the Commission, power
might be exerted by courts and juries generally to
determine the reasonableness of an established rate,
it would follow that unless all courts reached an
identical conclusion a uniform standard of rates in
the future would be impossible, as the standard would
fluctuate and vary, dependent upon the divergent conclusions
reached as to reasonableness by the various courts
called upon to consider the subject as an original
question. Id. at 440.
According
to Robert B. von Mehren, The Antitrust Laws and
Regulated Industries: The Doctrine of Primary Jurisdiction,
67 Harv. L. Rev. 929, (1954), the early primary jurisdiction
cases which followed Texas & Pacific Railway Co.,
involved technical questions relating to regulated industries
such as railroads, water and air transportation, electricity,
and communications.
A
second basis for the doctrine was recognized in Great
Northern Railway Co. v. Merchants Elevator Co.,
259 U.S. 285 (1922), which involved a dispute over the
tariff charged on interstate corn shipments. For the
first time the Supreme Court cited administrative expertise,
as well as uniformity, as a potential basis for invoking
the doctrine. In explaining why determination might
be left to the Interstate Commerce Commission, Justice
Brandeis wrote:
It
is required because the inquiry is essentially one
of fact and of discretion in technical matters; and
uniformity can be secured only if its determination
is left to the Commission. Moreover, that determination
is reached ordinarily upon voluminous and conflicting
evidence, for the adequate appreciation of which acquaintance
with many intricate facts of transportation is indispensable,
and such acquaintance is commonly to be found only
in a body of experts. Id. at 291.
The
Court declined to apply the primary jurisdiction doctrine
in Great Northern Railway, but the case indicated
a change in the principal rationale that would support
the application of the doctrine in future cases. Several
decades later, in United States v. W. Pac. RR Co.,
352 U.S. 59, 64 (1956) the Supreme Court stated,
In
the earlier cases emphasis was laid on the desirable
uniformity which would obtain if initially a specialized
agency passed on certain types of administrative questions.
More recently the expert and specialized knowledge
of the agencies involved has been particularly stressed.
The
Court stated uniformity and need for administrative
expertise are two factors which are part of the same
principle, citing Far East Conference v. United
States, 342 U.S. 570 at 574-575 (1952), an antitrust
case, in which it had held:
[I]n
cases raising issues of fact not within the conventional
experience of judges or cases requiring the exercise
of administrative discretion, agencies created by
Congress for regulating the subject matter should
not be passed over. This is so even though the facts
after they have been appraised by specialized competence
serve as a premise for legal consequences to be judicially
defined. Uniformity and consistency in the regulation
of business entrusted to a particular agency are secured,
and the limited functions of review by the judiciary
are more rationally exercised, by preliminary resort
for ascertaining and interpreting the circumstances
underlying legal issues to agencies that are better
equipped than courts by specialization, by insight
gained through experience, and by more flexible procedure."
Id. at 64-65.
The
Supreme Court later repeated this principle in discussing
the role of the Federal Maritime Board in another antitrust
case: "[i]t is recognized that the courts, while
retaining the final authority to expound the statute,
should avail themselves of the aid implicit in the agency's
superiority in gathering the relevant facts and in marshaling
them into a meaningful pattern." Fed Mar. Bd
v. Isbrandtsen Co., 356 U.S. 481, 498 (1958).
Yet
the Court has stated, "[ n]o fixed formula exists
for applying the doctrine of primary jurisdiction. In
every case the question is whether the reasons for the
existence of the doctrine are present and whether the
purposes it serves will be aided by its application
in the particular litigation." United States
v. W. Pac. RR Co., 352 U.S. 59, 64 (1956)
Primary
jurisdiction is not to be confused with "exclusive
jurisdiction", already addressed in earlier briefs.
Nor is it equivalent to the requirement of exhaustion
of administrative remedies which essentially states
"[w]here relief is available from an administrative
agency, the plaintiff is ordinarily required to pursue
that avenue of redress before proceeding to the courts;
and until that recourse is exhausted, suit is premature
and must be dismissed." Reiter v. Cooper,
507 U.S. 258, 269 (1993). Relief, of course, is not
available from an administrative agency. In contrast,
the doctrine of primary jurisdiction is committed to
the sound discretion of the court. "That doctrine
requires judicial abstention in cases where protection
of the integrity of a regulatory scheme dictates preliminary
resort to the agency which administers the scheme."
United States v. Philadelphia Nat'l Bank, 374
U.S. 321, 353 (1963).
The
Nebraska Courts have adopted the judicial doctrine of
primary jurisdiction but applied it sparingly. "The
primary jurisdiction doctrine applies whenever enforcement
of a claim, originally cognizable in the courts, requires
the resolution of issues that have been placed within
the special competence of an administrative body in
accordance with the purposes of a regulatory scheme."
Humphrey Feed & Grain, Inc. v. Union P. R R
Co., 199 Neb. 189 at 206,257 N. W. 2d 391 (1977).
"The effect of the application of the doctrine
of primary jurisdiction is to preclude resort to the
courts in the first instance, or to preclude the court
from supplying a remedy, or passing upon particular
issues until the issues have been passed upon by the
administrative agency." Id at 207. "Whether
the purposes of the administrative act require that
the administrative agency should first pass on a question
depends on whether the question raises issues of policy
that should be considered by the administrative agency
in the interests of uniformity and administrative expertise."
In re Interest of Battiato, 259 Neb. 829, 837
(2000).
The
Court in Battiato also stated,
Preliminary
resort to the administrative agency is required where
the inquiry is essentially one of fact and of discretion
in technical matters and when uniformity can be secured
only if determination is made by that agency. The
effect of the application of the doctrine of primary
jurisdiction is to preclude resorting to the courts
in the first instance, or to preclude a court from
supplying a remedy, or passing upon particular issues
until the issues have been passed upon by the administrative
agency. The nature of the controverted question and
the nature of the inquiry necessary for its solution
are the determining factors in regard to application
of the doctrine of primary jurisdiction. In re
Interest of Battiato, 259 Neb. 829, 837 (2000)
The
issue before the Battiato Court was whether
certain administrative regulations provided for payment
of attorney fees. The Court held in that case, cited
by Appellees in support of their motion for additional
briefing and argument on the subject of primary' jurisdiction,
that primary jurisdiction was inappropriate because
the primary issue was one of law and the doctrine of
primary jurisdiction would not be followed when a pure
question of law was at issue.
Another
instance when primary jurisdiction is not applicable
is when uniformity can be achieved without resort to
the administrative agency. The Battiato Court
cited Brown Lumber Co. v. L. &N. R. Co.,
299 U. S. 393 (1937), stating,
The
doctrine does not apply in relation to a question
which, while properly determinable by an administrative
tribunal, does not involve a question of fact, but
one of pure law, is determinable apart from the exercise
of administrative discretion, and the requisite uniformity
of determination is attainable otherwise than by confining
determination of the question to the administrative
tribunal. Interest of Battiato, 259 Neb.
829, 838 (2000).
The
Court is not obligated to invoke primary jurisdiction
when no specific expertise is needed to resolve the
issue at hand. The Supreme Court's decision in Nader
v. Allegheny Airlines, Inc., 426 U.S. 290 (1976),
is particularly appropriate. The plaintiff in Nader
brought a common law fraudulent misrepresentation claim
based on the defendant airline's policy of overbooking
its flights. Declining to refer the case to the Civil
Aeronautics Board under the primary jurisdiction doctrine,
the Court held:
Referral
of the misrepresentation issue to the Board cannot
be justified by the interest in informing the court's
ultimate decision with "the expert and specialized
knowledge," United States v. Western Pacific
R. Co., of the Board. The action brought by petitioner
does not turn on a determination of the reasonableness
of a challenged practice - a determination that could
be facilitated by an informed evaluation of the economics
or technology of the regulated industry. The standards
to be applied in an action for fraudulent misrepresentation
are within the conventional competence of the courts,
and the judgment of a technically expert body is not
likely to be helpful in the application of these standards
to the facts of this case. Id. at 305,306.
(Internal citation omitted.)
Having
reviewed applicable federal and state case law, it seems
apparent that application of primary jurisdiction is
neither appropriate nor desirable in the present case.
First, the issue before the Court is a question of law.
Second, no specific competence is necessary to resolve
the issue. Third, the Court is in a better position
to bring consistency and uniformity than a natural resources
district. Fourth, the doctrine of primary jurisdiction
is only applicable to administrative agencies, not political
subdivisions, such as natural resources districts.
The
principle question before the Court is the right to
the use of hydrologically connected water as between
a surface water appropriator (herein "Appropriator")
and a ground water irrigator (herein "Pumper")
when there is insufficient water to satisfy the surface
water appropriation. The question is not whether the
water in Pumpkin Creek is hydrologically connected to
water pumped from ground water irrigation wells. That
has been established in the Rules and Regulations of
the Pumpkin Creek Management Subarea attached to the
Appellees initial brief. A factual or technical determination
is not required. Instead, definition and determination
of the rights to use hydrologically connected water
is necessary; clearly a question of law.
Special
knowledge of hydrology or competence in water management
beyond normal prudence and wisdom is unnecessary to
resolve this issue. More pertinent is knowledge of both
" statutory law and case law pertaining to Appropriator
rights and ground water use affecting these rights.
Indeed, one must question whether the North Platte Natural
Resources District ("NPNRD") has demonstrated
any specific knowledge or skill in resolving conflicts
between Appropriators and Pumpers since Pumpkin Creek
was dry before Spear T filed its complaint and remains
dry today.
Not only is expert or specialized knowledge unnecessary,
the NPNRD is not in a position to implement a consistent
and uniform solution to conflicts between Appropriators
and Pumpers. There are 23 natural resources districts
in Nebraska. It is highly likely that the NPNRD would
initiate one "solution" while the NRDs governing
the Republican River and the Niobrara would implement
others. Some NRDs might interpret the law such that
they would take steps to protect Appropriators while
others, like the NPNRD, would take no steps to provide
relief to the injured Appropriator.
In
fact, Nebraska's obligation to deliver certain quantities
of water to Kansas under the Republican River Compact
will certainly require reduction in ground water use
in that basin to ensure compliance with the compact.
There is no similar interstate pressure on the NPNRD.
Thus, "primary jurisdiction" as proposed by
Appellees will promote lack of uniformity and inconsistency
across Nebraska.
Primary
jurisdiction is also inappropriate because the NRDs
are not agencies, which would generally have statewide
authority, but rather, political subdivisions with 23
limited geographical areas. NEB. REV. STAT. § 13-1612.
Aside from the obvious geographical limitations, a political
subdivision is vastly different from an agency.
Board
members of the natural resources districts are elected
by the public. As mentioned in other briefs, Pumpers
outnumber Appropriators approximately eight to one.
It follows that Pumpers will have more political clout
and certainly a much better opportunity to elect ground
water friendly members to the Board of the local natural
resources district. One need only look at the latest
allocation established by the NPNRD for the Pumpkin
Creek Management Subarea to see this political influence.
Ground water users were allocated 14" of water
and Appropriators were allocated nothing.
Aside
from the apparent bias of NRDs toward Pumpers, no specific
expertise is required to become a board member of an
NRD. Anyone can run for a seat on the board. Therefore,
arguments that NRDs provide a technical expertise and
expert knowledge superior to the Court ring hollow,
if such technical expertise and expert knowledge were
relevant, which they are not.
Examining
the captioned case in light of the historical use by
the courts of primary jurisdiction makes it clear there
is no justification for finding primary jurisdiction
in the NPNRD as suggested by Appellees. No special skill
or expertise is necessary, even if the NPNRD could offer
it. It would not ensure uniformity and consistency,
but in fact would ensure the opposite. Finally, the
doctrine is applicable to administrative agencies not
political subdivisions.
Does
the recent adoption of 2004 Neb. Laws Legislative Bill
962 (hereafter referred to as "LB 962") change
this analysis? No, it does not.
III.
The Ground Water Management and Protection Act as modified
by LB 962 contains nothing which would make application
of "primary jurisdiction" appropriate.
As
explained previously, primary jurisdiction is a judicial
doctrine, application of which is entirely within the
discretion of the court. It is not some lesser form
of "exclusive jurisdiction" which is a legislative
mandate directing a specific entity to exclusively address
issues of a particular nature. Being a judicial doctrine,
it is not for the legislature to advocate primary jurisdiction
in the NRDs in the Ground Water Management and Protection
Act ("GWMPA"). If they attempted to do so,
it would necessarily result in the NRDs having "exclusive
jurisdiction" raising certain constitutional issues
discussed later. As Spear T noted in previous briefs,
nowhere does the GWMPA provide NRDs with exclusive authority
or responsibility for determining conflicts between
Appropriators and Pumpers. Neither does LB 962.
The
question then becomes whether the GWMPA as modified
by LB 962 presents such a comprehensive regulatory scheme
that the Court should defer to the NPNRD for resolution
of the claim by Spear T Ranch, or whether the issues
posed in the case require specific knowledge necessary
to resolve the claim which only the NPNRD possesses.
Analysis of the GWMPA as modified by LB 962 and the
Spear T claim will clearly show that primary jurisdiction
is not appropriate in the case on appeal.
The
Court has said in Humphrey v. Union Pacific Railroad,
199 Neb. 189 at 206,257 N. W. 2d 391 (1977), "[t]he
primary jurisdiction doctrine applies whenever enforcement
of a claim, originally cognizable in the courts, requires
the resolution of issues that have been placed within
the special competence of an administrative body in
accordance with the purposes of a regulatory scheme."
This might be called the "uniformity" basis
for primary jurisdiction. There are several reasons
the GWMPA as modified by LB 962 does not establish the
uniformity basis for primary jurisdiction which would
justify deferral to the NPNRD for resolution of the
Spear T claim.
First,
the water at issue is hydrologically connected water,
not simply ground water. Nebraska's water management
scheme is in the present state of chaos because the
State has blindly insisted on creating two systems of
water management - one for ground water and the other
for surface water when the two are nearly always connected
in Nebraska. Appellees have been quick to point out
the legislative finding in NEB. REV. STAT. § 46-
656.05(3) which states,
(3)
Natural resources districts already have significant
legal authority to regulate activities which contribute
to declines in ground water levels and to nonpoint
source contamination of ground water and are the preferred
entities to regulate, through ground water management
areas, ground water related activities which are contributing
to or are, in the reasonably foreseeable future, likely
to contribute to conflicts between Pumpers and surface
water appropriators or which may be necessary in order
to resolve disputes over interstate compacts or decrees,
or to carry out the provisions of other formal state
contracts or agreements;
However,
in regard to hydrologically connected water, one cannot
make consumptive use of ground water without affecting
the surface water. In fact, the very next legislative
finding in § NEB- REV. STAT. 46-656.05(4) states
(4)
The Department of Natural Resources is responsible
for regulation of surface water resources and local
surface water project sponsors are responsible for
much of the structured irrigation utilizing surface
water supplies, and these entities should be responsible
for regulation of surface water related activities
which contribute to such conflicts or provide opportunities
for such dispute resolution;
If
surface water and ground water are connected, but each
is regulated by a different entity, how can the court
defer to one if primary jurisdiction is applied? This
is even more confusing with passage of LB 962.
LB
962 adds a requirement that the DNR, not the NRD, prepare
an evaluation of the "expected long-term availability
of hydrologically connected water supplies for both
existing and new surface water uses and existing and
new ground water uses in each of the state's
river basins" by January 1 of each year beginning
in 2006. LB 962, § 53. (Emphasis added.) Based
on this study, the DNR will determine whether the river
basin, subbasin, or reach is presently "fully appropriated".
LB 962, §53. Section 53 (3) of LB 962 states "[a]
river, subbasin, or reach is deemed fully appropriated
if the department determines that then-current uses
of hydrologically connected surface water and ground
water in the river basin, subbasin, or reach cause or
will in the reasonably foreseeable future cause"
among other things, "(a) the surface water supply
to be insufficient to sustain over the long term the
beneficial or useful purposes for which existing natural
flow or storage appropriations were granted. . .".
Upon
a finding that a river basin, subbasin, or reach is
fully appropriated, the DNR is required to place an
immediate stay on new appropriations, advise licensed
well contractors of the finding, and notify the relevant
NRD who is required to issue a stay on new well construction
in the area determined by the DNR to include
hydrologically connected surface water and ground water,
LB 962, § 54. The stay also prohibits increasing
acres irrigated by existing appropriations or wells,
and the stays remain in effect until final determination
as to whether the river basin, subbasin, or reach is
fully appropriated, LB 962, § 54. Prior to final
determination, consultations are made with appropriate
stakeholders and public hearings are held by the
DNR. Within thirty days of final hearing, the DNR
advises the NRD of its final determination. If that
determination is that the river basin, subbasin, or
reach is fully appropriated, the DNR decides whether
to continue the stays in regard to surface water use,
LB 962, § 54(5). However, within 90 days of the
DNR determination, the NRD may hold hearings to decide
whether to terminate stays relative to water wells,
and must decide within 45 days after that final hearing
whether to terminate the stays. LB 962, § 54(7,
8). The finding that a river basin, subbasin, or reach
is fully, appropriated, results in a requirement that
the NRD and DNR jointly develop an integrated management
plan. LB 962, § 55.
If
the NRD and the DNR do not agree on the plan, the geographic
area, the goals and objectives, or the controls to be
imposed, or any incentive programs, the dispute is submitted
to the Governor for his referral to the Interrelated
Water Review Board. LB 962, § 58, Upon eventual
approval of a plan, DNR enforces those controls relevant
to Appropriators and the NRD enforces controls on Pumpers.
LB 962, § 59. How then can the Court defer conflict
resolution between Pumpers and Appropriators over hydrologically
connected water when different entities govern enforcement
of controls over each?
A
second reason the uniform regulatory scheme basis for
primary jurisdiction is inappropriate lies in the difference
between "regulating ground water" and determining
conflicts between Pumpers and Appropriators. Regulation
is the process of controlling by rule or regulation.
BLACK'S LAW DICTIONARY 532 (pocket ed. 1996). The GWMPA
as modified by LB 962, contains no rules or regulations
defining the rights as between an Appropriator and Pumper
who are in conflict over the same water. It provides
no mechanism at all for one of these parties to seek
redress for its injury. If so, it would result in the
NPNRD deciding questions of law which, as stated earlier,
is not appropriate under the doctrine of primary jurisdiction,
nor is it desirable.
Earlier
it was pointed out that uniformity would not be obtained
deferring decision making to the NRDs because there
are 23 different natural resources districts. Each one
could make a different determination, or use different
controls for the same problem.
Not
only is the structure of the NRDs contrary to uniformity,
the issue regarding priority to hydrologically connected
water is not typical of the historical use of primary
jurisdiction. Application of primary jurisdiction has
often been based on the Court's concern for uniformity
in the imposition of rates or tariffs. While providing
a historical overview of the doctrine of primary jurisdiction
in the case of Tassy v. Brunswick Hosp. Ctr., Inc.,
296 F.3d 65 (2d Cir. 2002), the court observed:
The
concern for consistency and uniformity is more prevalent
in cases involving issues of broad applicability such
as the reasonableness of rates or tariffs. See Nat'l
Communications Ass'n, Inc. v. Am. Tel. & Tel.
Co., 46 F.3d 220,224-25 (2d Cir. 1995). United States
v. Radio Corp. of America, 358 U.S. 334 (1959), for
example, was an antitrust action arising out of an
attempt by NBC, a subsidiary of Radio Corp. of America,
to exchange the television station that it owned in
Cleveland for one in Philadelphia. In discussing the
history of the primary jurisdiction doctrine, the
Court noted that this Court consistently held that
when rates and practices relating thereto were challenged
under the antitrust laws, the agencies had primary
jurisdiction to consider the reasonableness of such
rates and practices in the light of the many relevant
factors including alleged antitrust violations, for
otherwise sporadic action by federal courts would
disrupt an agency's delicate regulatory scheme, and
would throw existing rate structures out of balance.
(page number unavailable from electronic source; Internal
citations omitted.)
Aside
from uniformity, the other general reason courts apply
the primary doctrine is the specific knowledge and expertise
which an administrative agency may possess which a court
does not. This is not applicable in this appeal. First,
resolution of the Spear T claim does not require special
knowledge or technical expertise of hydrology. As pointed
out earlier, the issues raised by the Spear T claim
are questions of law and the Court held in In re
Interest of Battiato, 259 Neb. 829, 837 (2000),
that primary jurisdiction does not apply to questions
of law. Even so, paraphrasing the Court's statement
holding in Nader v. Allegheny Airlines, Inc.,
426 U.S. 290 (1976), the standards to be applied in
an action for conversion or nuisance are within the
conventional competence of the courts, and the judgment
of a technically expert body is not likely to be helpful
in the application of these standards to the facts of
this case. Furthermore, NRDs are not administrative
agencies, but political subdivisions without the administrative
expertise sought by the courts in technical matters.
The
usual basis for primary jurisdiction, uniformity and
administrative expertise, are not applicable in the
case on appeal. Nor does anything in the GWMPA as modified
by LB 962 provide a basis for application of primary
jurisdiction. In fact, the increased involvement of
the DNR under LB 962, along with the failure of the
GWMPA as amended by LB 962, to clearly define rights
and priorities, emphasizes the need for the Court's
determination of the conflicts between Appropriators
and Pumpers.
IV.
Adoption of LB 962 has no affect on this Appeal.
The
three issues before this Court on Appeal are:
(1) Whether the District Court lacks jurisdiction of
the subject matter of the action;
(2) Whether the Complaint fails to state a claim upon
which relief can be granted; and
(3) Whether the Complaint fails to join necessary and
indispensable parties.
Unfortunately,
LB 692 has no affect on any of these issues.
In
regard to the first issue, whether the District Court
lacks jurisdiction to hear an Appropriator's complaint
against a Pumper, significant discussion took place
at the first oral argument as to whether the GWMPA provided
the NRDs with exclusive jurisdiction to address conflicts
between Appropriators and Pumpers. Spear T argued that
there was no specific language designating the NRDs
as exclusive decision makers in these conflicts. In
addition, the Constitution establishes the district
court as a court of general jurisdiction and to read
the Ground water Protection Act as denying access of
an injured party to the district court would render
the GWMPA unconstitutional. Neither case law nor statutory
law was produced supporting the claim that NRDs had
exclusive jurisdiction to resolve conflicts between
Appropriators and Pumpers. The conclusion seemed clear
- District Courts are not restricted from hearing a
complaint brought by an aggrieved Appropriator and,
in fact, are the preferred and constitutionally designated
entity. To alter this outcome, LB 962 would have to
overcome these obstacles. It does not.
LB
962 simply does not state that all conflicts between
Appropriators and Pumpers will be resolved by the NRDs.
The GWMPA modified by LB 962 is concerned with management
of basins not conflicts between individuals. Consequently,
no process is provided for bringing complaints of individuals,
no priority of rights is established to hydrologically
connected water, and no guidance is issued for resolving
conflicts between Appropriators and Pumpers.
To
fully appreciate the lack of impact on the present appeal,
it is necessary to again review the process envisioned
by GWMPA including LB 962. LB 962 provides that a ground
water management area may be established to accomplish
the objective of preventing or resolving conflicts between
users of ground water and surface water which are hydrologically
connected. LB 962, § 52. Prior to establishment,
the plan must be approved by the Director of the DNR
or if not approved, the NRDs must have submitted an
explanation responding to the Director's reasons for
not approving.
LB
962 then adds a requirement that the DNR, not the NRD,
prepare an evaluation of the "expected long-term
availability of hydrologically connected water supplies
for both existing and new surface water uses and existing
and new ground water uses in each of the state's river
basins" by January I of each year beginning in
2006. LB 962, § 53. Based on this study, the DNR
will determine whether the river basin, subbasin, or
reach is presently "fully appropriated". LB
962, §53. Section 53(3) of LB 962 states "[a]
river, subbasin, or reach is deemed fully appropriated
if the department determines that then-current uses
of hydrologically connected surface water and ground
water in the river basin, subbasin, or reach cause or
will in the reasonably foreseeable future cause"
among other things, "(a) the surface water supply
to be insufficient to sustain over the long term the
beneficial or useful purposes for which existing natural
flow or storage appropriations were granted ... “
Upon
a finding that a river basin, subbasin, or reach is
fully appropriated, the DNR is required to place an
immediate stay on new appropriations, advise licensed
well contractors of the finding, and notify the relevant
NRD who is required to issue a stay on new well construction
in the area determined by the DNR to include hydrologically
connected surface water and ground water. LB 962, §
54. The stay forbids increasing acres irrigated by existing
appropriations or wells, and the stays remain in effect
until final determination as to whether the river basin,
subbasin, or reach is fully appropriated. LB 962, §
54. Prior to final determination, consultations are
made with appropriate stakeholders and public hearings
are held by the DNR. Within thirty days of final hearing,
the DNR advises the NRD of its final determination.
If that determination is that the river basin, subbasin,
or reach is fully appropriated, the DNR decides whether
to continue the stays in regard to surface water use.
LB 962, § 54(5). However, within 90 days of the
DNR determination, the NRD may hold hearings to decide
whether to terminate stays relative to water wells,
and must decide within 45 days after that final hearing
whether to terminate the stays. LB 962, § 54(7,
8).
The
finding that a river basin, subbasin, or reach is fully
appropriated, results in a requirement that the NRD
and DNR jointly develop an integrated management plan
within three years of the determination unless both
agree to a two year extension. LB 962, § 55. The
integrated management plan must include the following:
(a)
Clear goals and objectives with a purpose of sustaining
a balance between water uses and water supplies so
that the economic viability, social and environmental
health, safety, and welfare of the river basin, subbasin,
or reach can be achieved and maintained for both the
near term and the long term; (b) a map clearly delineating
the geographic area subject to the integrated management
plan; (c) one or more of the ground water controls
authorized for adoption by natural resources districts
pursuant to section 79 of this act; and (d) one or
more of the surface water controls authorized for
adoption by the department pursuant to section 56
of this act. LB 962, §55(2).
Section
79 concerning ground water controls is the present NEB.
REV. STAT. 46-656.25 which remains relatively unchanged
by LB 962. Surface water controls under § 56 consist
of increased monitoring and enforcement, prohibition
of additional appropriations, and use of good conservation
techniques. However, LB 962 § 55(2) specifically
states that "[n]othing in the integrated management
plan for a fully appropriated river basin, subbasin,
or reach shall require a natural resources district
to regulate ground water uses in place at the time of
the department’s preliminary determination
that the river basin, subbasin, or reach is fully appropriated,
but a natural resources district may voluntarily adopt
such regulations." (Emphasis added.) This is critical
to the case at hand because it demonstrates that even
if the Department of Natural Resources determines that
the current uses of hydrologically connected water are
resulting in insufficient surface water for the purpose
for which the appropriation was granted, that is irrigation
well pumping, the NRD is not required to act.
One
must conclude that LB 962 has no effect on this appeal
regarding jurisdiction of the district court to hear
this case because it does not specifically address the
issue, it provides no definition of the rights as between
Appropriators and Pumpers concerning hydrologically
connected water, and, the NRD is not required to regulate
Pumpers despite a determination that their use results
in insufficient streamflow to satisfy the appropriation.
LB
962 does not address the second issue on appeal either.
It does not define the rights of Appropriators and Pumpers
when they come into conflict over hydrologically connected
water. Neither does LB 962 determine priority to such
water. LB 962 does not change the status of the use
of a surface water appropriation as a vested property
right. Spear T is left with common law and constitutionally
granted rights upon which to state its claim.
Finally,
LB 962 does not address necessary parties to a lawsuit
governing the taking or interference with or unreasonable
use of a surface water appropriation by a Pumper. As
one can see from the overview of LB 962 provided above,
it is not intended as a regulatory scheme to settle
disputes between Appropriators and Pumpers to hydrologically
connected water. Therefore it does not speak to the
parties who should be involved.
The
review of LB 962 as it pertains to hydrologically connected
water is revealing. The "interjection of the Department
of Natural Resources in the process indicates a concern
that surface water interests were not being represented
in the GWMPA. Perhaps because that Act focused on ground
water management. However, the Governor's Commission
which drafted LB 962 seemed to discern that ground water
is usually connected to surface water and ground water
cannot be regulated in a vacuum without addressing its
effects on surface water.
Another
obvious point drawn from LB 962 is the cumbersome administrative
process which is being put in place to manage water
resources in the State. While the DNR and NRD must work
together to produced integrated management plans, it
falls upon each to enforce that aspect of the plan within
their jurisdiction: surface water controls are enforced
by the DNR and ground water controls are enforced by
NRDs. This conjures the image of an Appropriator trying
to ride two horses with one foot on each. Sooner or
later, the rider is going to take a spill.
Not
so obvious is that LB 962 does not offer prompt relief,
if any, for an injured party. The first determination
by the DNR as to whether a subbasin is fully appropriated
is not due until January 1, 2006. The NPNRD and DNR
then have up to five years to implement an integrated
plan. Assuming the integrated plan contains controls
to return water to Pumpkin Creek, Spear T may have no
water to use for at least seven years. Realistically,
return of water to the Creek is highly unlikely given
the fact that the NRD is under no obligation to regulate
existing Pumpers.
There
are provisions in LB 962 for referral to an Interrelated
Water Review Board in the event the DNR and NRD cannot
agree on a plan. LB 962, § 58. Furthermore, if
one of these entities is not enforcing its responsibilities
under a plan, the new Water Board can transfer those
enforcement responsibilities to the other entity. LB
962, § 59. However, this move to replace must be
initiated by the NRD or DNR, not an individual who is
being harmed by an entity's inaction.
Experience
indicates the Appropriators will bear the consequences
of this cumbersome administrative process. In the case
on appeal, no significant steps have been taken to address
the plight of Spear T. The DNR has done nothing to protect
the surface water rights of Spear T despite common law
and statutory obligations. Sorensen v. Mitchell
Irrigation, 129 Neb. 586 (1935), State v. Birdwood
Irrigation District, 154 Neb. 52 (1951), NEB. REV.
STAT. §§ 46-226 and 61-206. As for the NRD,
it has established an allocation of fourteen inches
for Pumpers in the Amended Rules and Regulation for
the Pumpkin Creek Ground Water Management Sub-Area,
despite indications that any more than an eight inch
allocation will not sustain the water table.
The
common refrain from these entities is "it's not
my responsibility". The DNR claims it is a ground
water issue. The NRD asserts this is surface water.
The future does not bode well for Spear T and similarly
situated Appropriators if they must rely on the cumbersome
administrative process envisioned by LB 962.
In
all fairness, LB 962 may have been effective in preventing
the Spear T disaster had it been implemented thirty
years ago. It attempts to provide tools as did the GWMPA
to manage basins on a forward-looking basis. When harm
has already occurred, it appears powerless to provide
a resolution.
Spear
T alleged in its Complaint that pumping by ground water
irrigators drained Pumpkin Creek and denied them use
of its surface water appropriation. Under LB 962, the
NRD is not required to regulate those Pumpers whose
use was initiated before July 1, 1997, and for use initiated
after July 1, 1997, the NRD may choose to implement
the lightest of controls. LB 962, § 55. While an
NRD may voluntarily take action, it is highly unlikely
when Pumpers outnumber Appropriators 8 to 1. As a result,
LB 962 has no effect on this appeal.
V. Neither the Nebraska Ground Water Management
and Protection Act or LB 962 abrogate any common law
remedies the appellant might have, nor do they provide
an adequate remedy at law.
Before
discussing the ramifications of the GWMPA and LB 962
on the common law remedies of Spear T, it is necessary
to understand some of the factual basis for Spear T's
claim as found in Spear T's Complaint. The captioned
case is before the Court on Spear T's appeal of an order
granting the Appellees' Rule 12 motions. As noted in
Spear T's initial brief, under the new Nebraska rules
of pleading, a Rule 12 motion has essentially replaced
the demurrer. However, on appellate review the same
rule applicable to demurrers should apply to the ruling
on the Rule 12 motions. That is, the court is required
to accept as true all the facts which are well pled
and the proper and reasonable inferences of law and
fact which may be drawn therefrom. Billups v. Scott,
253 Neb. 287,571 N. W.2d 603 (1997).
Spear
T claimed that the Appellees' ground water pumping has
drained Pumpkin Creek denying Spear T use of its surface
water appropriation. Professor Richard Powell provides
a clear explanation of the dynamics involved between
ground water wells hydrologically connected to surface
water:
When
water is pumped from the ground, the static water
level around the well is lowered. This depression
in the surface of the water table roughly resembles
an inverted cone. As the level of the water is drawn
down further, this cone extends progressively further
from the well. When the cones of two or more wells
overlap, or the cone reaches a point of ground water
recharge, such as a stream bed, interference results.
This interference generally tends to involve a reduction
in ground water pressure (which assists in lifting
the water to the surface) or in a lowering of the
water table below the bottom of one of the wells or
in a diversion of surface water into ground water
supplies. RICHARD R. POWELL, POWELL ON REAL PROPERTY
65-145,65-146 (Release 91. June 2000) (Emphasis supplied.)
In
regard to Pumpkin Creek, Spear T contends that the reduced
pressure in the wells acts as a vacuum sucking the water
out of the creek, taking water meant for Spear T's water
appropriation. The Creek no longer has water in it and
the water table in Pumpkin Creek Basin continues to
drop. This is the point Spear T finds itself as it examines
the GWMPA and LB 962 for relief. It is obvious that
the only way to return water to Pumpkin Creek so that
Spear T can use its appropriation is to reduce the amount
of ground water pumped in Pumpkin Creek Basin whether
by shutting in some wells, allocating Pumpers an amount
of water less than the sustainable amount, or
establishing a watering rotation which results in use
of ground water less than the sustainable amount.. Therefore,
if the GWMPA modified by LB 962 is to provide an adequate
remedy at law for Spear T and other similarly situated
Appropriators, an Appropriator must be assured that
ground water consumption will be curtailed if the Appropriator
proves up its case. Unfortunately, the GWMPA modified
by LB 962 provides no such assurance.
The
responsibilities of the DNR and NRD are outlined in
the previous section. The NRD may establish a management
area, as they have done in the Pumpkin Creek Basin.
Under both GWMPA and LB 962, an NRD is limited to implementing
controls on ground water use. These controls are found
in NEB. REV. STAT. 46-656.25 as modified by § 79
of LB 962. While the NRD is obligated to adopt one or
more controls for a management area, it is not required
to implement a specific control. Following are the controls
which NRD may choose from (as amended by § 79):
(a)
It may allocate the amount of ground
water that may be withdrawn by Pumpers;
(b) It may adopt a system of rotation
for use of ground water;
( c) It may adopt well-spacing requirements
more restrictive than those found in sections 46-609
and 46-651;
(d) It may require the installation
of devices for measuring ground water withdrawals from
water wells;
(e) It may adopt a system which requires
reduction of irrigated acres pursuant to subsection
(2) of section 80 of this act;
(f) It may limit or prevent the expansion
of irrigated acres or otherwise limit or prevent increases
in the consumptive use of ground water withdrawals from
water wells used for irrigation or other beneficial
purposes;
(g) It may require the use of best
management practices;
(h) It may require the analysis of
water or deep soils for fertilizer and chemical content;
(i) It may impose mandatory educational
requirements designed to protect water quality or to
stabilize or reduce the incidence of ground water depletion,
conflicts between Pumpers and surface water Appropriators,
disputes over interstate compacts or decrees, or difficulties
fulfilling the provisions of other formal state contracts
or agreements;
(j) It may require water quality monitoring
and reporting of results to the district for all water
wells within all or part of the management area;
(k) It may require district approval
of (i) transfers of ground water off the land where
the water is withdrawn or (ii) transfers of rights to
use ground water that result from district allocations
imposed pursuant to subdivision (l)(a) of this section
or from other restrictions on use that are imposed by
the district in accordance with this section. Such approval
may be required whether the transfer is within the management
area, from inside to outside the management area, or
from outside to inside the management area, except that
transfers for which permits have been obtained from
the Department of Natural Resources prior to the operative
date of this section or pursuant to the Municipal and
Rural Domestic Ground Water Transfers Permit Act shall
not be subject to district approval pursuant to this,
subdivision. If the district adopts rules and regulations
pursuant to this subdivision, such regulations shall
require that the district deny or condition the approval
of any such transfer when and to the extent such action
is necessary to (A) ensure the consistency of the transfer
with the purpose or purposes for which the management
area was designated, (B) prevent adverse effects on
other Pumpers or on surface water Appropriators, (C)
prevent adverse effects on the state's ability to comply
with an interstate compact or decree or to fulfill the
provisions of any other formal state contract or agreement,
and (D) otherwise protect the public interest and prevent
detriment to the public welfare;
(l) It may require, when conditions
so permit, that new or replacement water wells to be
used for domestic or other purposes shall be constructed
to such a depth that they are less likely to be affected
by seasonal water level declines caused by other water
wells in the same area;
(m) It may close all or a portion of
the management area to the issuance of additional permits
or may condition the issuance of additional permits
on compliance with other rules and regulations adopted
and promulgated by the district to achieve the purpose
or purposes for which the management area was designated;
and
(n) It may adopt and promulgate such
other reasonable rules and regulations as are necessary
to carry out the purpose for which a management area
was designated. (Emphasis added to demonstrate the discretionary
nature of these controls.)
It
should be evident that some of these controls are very
mild such as installation of water meters, use of best
management practices, and mandatory educational requirements.
Implementation of any of these controls satisfies the
statutory requirement for a management area, and, of
course, has no direct effect on the amount of ground
water pumped. Further, the NRD can require allocation
but set the allocation so high that it has little effect
on irrigation practices and actually reduces the water
table.
Should
an integrated management plan be required after a finding
that Pumpkin Creek Basin is fully appropriated, the
NRD chooses from these same controls. It is not obligated,
however, to regulate ground water use in existence at
the time the basin was found to be fully appropriated.
And, in the worse case for Pumpers, controls would apply
only to wells in which use was initiated after July
I, 1997.
It
is apparent that an Appropriator cannot be assured ground
water consumption will be restricted if the Appropriator
demonstrates it is harmed by the ground water consumption,
whether reasonable or not. Furthermore, there is no
provision for an injured Appropriator to bring an action.
The
GWMPA with a slight modification under LB 962 does provide
that a person aggrieved by an order of the NRD, Director
of Environmental Quality, or DNR may appeal the order
under the Administrative Procedure Act. LB 962, §90.
However, this action is limited to grievances caused
by an NRD, DEQ or DNR order, not by the actions of a
Pumper. Since the controls listed above are discretionary,
it would be difficult for an Appropriator to succeed
on an appeal of such an order.
The
addition of LB 962 brings promise that the DNR will
classify Pumpkin Creek Basin as fully appropriated,
order stays and implement an integrated management plan
with the NRD. However, the DNR can only issue stays
on surface water use. While the NRD is required to order
stays on new well construction and increased irrigation
acreage upon notice of a fully appropriated basin, it
is not required to regulate existing wells and can,
in fact, lift the stays after public hearings. Because
existing wells will not be addressed, the GWMPA as modified
by LB 962 will not afford an adequate remedy to Spear
T or other similarly situated Appropriators.
Much
of the same analysis is applicable to the question of
whether the GWMPA and LB 962 abrogate the common law
remedies of Spear T. As stated earlier, there is no
specific language establishing the GWMPA as modified
by LB 962 as the exclusive vehicle for determining conflicts
between Appropriators and Pumpers over hydrologically
connected water. However, if required to rely solely
on the GWMPA as modified by LB 962 for its relief, Spear
T is effectively denied a remedy. It has been explained
that an aggrieved party cannot initiate action under
the GWMPA as modified by LB 962. The best an injured
party can hope for is that the NRD will order controls
reducing existing well water consumption. There is no
requirement in the Act forcing the NRD to do so and
impractical to expect it because of the constituency
of the members constituting the NRD board.
The
Nebraska GWMPA as amended by LB 962 is a forward looking
tool for managing ground water on a basin by basin approach.
It is a regulatory philosophy for managing ground water
with opportunity to address future problems with hydrologically
connected waters if the Department of Natural Resources
is included. It is simply not designed to address existing
claims and injuries such as those brought to the Court
by Spear T. The Act provides no forum for an injured
party to seek redress, nor does it prohibit an injured
party from pursuing an action in district court.
Dated
the 26th day of May 2004.
Respectfully
submitted,
SPEAR T RANCH, INC., Appellant
By: Thomas D. Oliver, NSBA #21574
Attorney for Appellant
110 West 9th Street
P. O. Box 670
Bridgeport, NE 69336
(308) 262-2933 |
