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April 17, 2020  |  Written by J. Palmer Hilton, Richard S. Deitchman

Baley v. United States: Water Users in the Klamath Project Petition the U.S. Supreme Court for Certiorari

On March 13, 2020, water users in the Klamath Reclamation Project (Project) petitioned the United States Supreme Court to review the Federal Circuit Court of Appeals’ decision in Baley, et al. v. United States, et al. (Baley).  The decision denied the water users’ takings claims for the 2001 Project water shutoff on water law grounds.  A copy of the petition for writ of certiorari is available here.  The petition explains that the Federal Circuit improperly deemed the Bureau’s regulatory action under the Endangered Species Act to constitute adjudication and administration of water rights for tribal purposes, and thereby sidelined Oregon’s adjudication and administration of water rights in the Klamath Basin.  The water users argue that the appellate ruling is contrary to western water law because it circumvents deference to state water rights administration by allowing federal regulators to determine and enforce their own rights outside the state system.  The petition further argues that the Federal Circuit’s ruling is at odds with the Reclamation Act, McCarran Amendment, and state prior appropriation doctrines, which subject federal reclamation projects to state water law, including priority administration.  The water users seek U.S. Supreme Court review on this important federalism issue and they assert that all water rights, whether they are state or federal reserved rights, must be subject to the same state administrative rules and priority designations.

Numerous amici filed briefs in support for granting review.  Among the amici, Oregon Water Resources Congress (OWRC), Association of California Water Agencies (ACWA), the American Farm Bureau Federation (AFBF), the Middle Rio Grande Conservancy District (MRGCD), the Pacific Legal Foundation (with the counties and other water users located in the Project area), and a group of law professors present additional practical arguments regarding the implications to water administration in all of the western states in the event the Federal Circuit’s decision stands.

OWRC consists of water suppliers serving Oregon’s agricultural industry, including in the Klamath Basin.  OWRC’s brief argues that the Federal Circuit’s decision:  (1) upends western water law by circumventing state management of their own water resources and disregarding priority; (2) allows federal agencies to cut off water users within a river basin as long as it includes federal reserved rights; and (3) harms abilities of states, local government, and water management entities to undertake long-term planning based on unforeseen federal involvement.

ACWA is a coalition of more than 430 California water agencies responsible for 90% of water deliveries in the state of California.  ACWA argues that the Federal Circuit decision: (1) amounts to federal overreach seeking to illegally reallocate water stored under California law that is not within the scope of natural flow and reserved rights; and (2) will potentially result in critical water shortages that could destabilize the California economy and agricultural industry.  ACWA argues that the Federal Circuit decision ignores state law regarding protection of stored water upon which water entities rely for effective administration and distribution of water.  ACWA argues that the Federal Circuit’s decision not only affects current stored water by cutting off flows beyond the federal reserved rights, but it leaves the door open for future uncertainty as to stored water.  California is dependent on predictable water supply chains to the extent that a small reallocation can disrupt the whole system leading to a shortfall of water resources for the agriculture industry that supplies nearly 40% of the nation’s fresh fruit and vegetables.

AFBF is a national organization that represents the economic and social interests of American farmers and ranchers.  AFBF argues that the Federal Circuit decision would be detrimental to farmers by allowing federal agencies to perform allocations of water outside the predictable state administrative schemes relied upon for more than a century.  AFBF explains that allowing federal allocation in this manner would create a system in which federal agencies can supersede state water right holders and claim water rights at their sole discretion.  This result would wreak havoc on farmer and rancher abilities to predict and rely on a priority system for water rights given the potential for sudden federal overreach.

MRGCD is a political subdivision of the State of New Mexico, responsible for delivering water to irrigators in the Middle Rio Grande Valley, much like the water delivery agencies in the Project.  Rio Grande irrigators were involved in similar litigation that resulted in a different outcome – there the court held that denial of water use to right holders is a taking requiring compensation (though the matter was later resolved differently).  MRGCD makes a number of practical arguments in support of the petition:  (1) the Bureau of Reclamation’s independent quantification of federal reserved water rights violates due process and has the potential for breaching trust duties owed to tribes; (2) allowing the Bureau of Reclamation’s independent quantification of rights gives the agency unfair leverage over other water right holders preventing equitable settlements; and (3) the Baley holding leaves irrigators no remedy to protect their water rights given the United States immunity to suit absent a full system adjudication.

The Pacific Legal Foundation with Siskiyou, Modoc and Klamath counties and a group of additional, non-Project water users in the Klamath Basin, as well as a group of law professors led by James Huffman with expertise in the subject matter also filed their amicus briefs this week, making additional arguments to support the Petition.

At this time, a response by the United States is not expected until May 14, 2020.

For additional information on this case, please contact Rich Deitchman at rdeitchman@somachlaw.com or Palmer Hilton at philton@somachlaw.com or call at (916) 446-7979.

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