Goshen Irrigation District v. Wyoming State Board of Control

Citations: 926 P.2d 943; 1996 Wyo. LEXIS 158; 1996 WL 628260Docket: 95-162

Court: Wyoming Supreme Court; October 31, 1996; Wyoming; State Supreme Court

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Goshen Irrigation District (GID) appeals a decision by the Wyoming State Board of Control that declared 66 cubic feet per second (c.f.s.) of GID's 100 c.f.s. supplemental water right in the Laramie River as abandoned. Basin Electric Power Cooperative (Basin) also appeals, arguing that GID abandoned 75 c.f.s. The court partially affirms and partially reverses the Board's decision. Key issues raised by GID include:

1. Basin's standing to initiate the partial abandonment action.
2. Whether the Board erred by considering unauthorized water releases from Basin's Grayrocks Reservoir in its decision.
3. The Board's jurisdiction over equitable matters and whether GID is entitled to a trial de novo if the Board lacks such jurisdiction.
4. The legality of the Board's declaration of partial abandonment given GID's prior use of all available water.
5. The retroactive application of Hofeldt v. Eyre, which addressed the abandonment of supplemental supply rights.
6. The need to reconcile the legislature's intent to support GID’s Laramie River pump station with existing laws regarding partial abandonment of water rights.

Basin contends that the Board should have declared an additional 9 c.f.s. abandoned, arguing that the evidence for GID’s water usage was insufficient and that test pumping conducted on April 1, 1994, did not constitute beneficial use, thus failing to prevent abandonment under Wyoming Statute 41-3-401(a).

GID, located in Goshen County, holds a 100 c.f.s. water right with a priority date of 1932, which is activated when its primary rights on the North Platte River are inadequate. Basin operates a power plant and holds a junior water permit from the Laramie River with a priority date of April 24, 1973, allowing it to store water in the Grayrocks Reservoir.

In 1992, the Wyoming Legislature approved the construction of a new pump station for GID downstream from Greyrocks Reservoir, designed to accommodate two pumps with a combined capacity of 68 c.f.s. The first pump was installed in November 1993 and began operation on April 1, 1994, while the second pump remains uninstalled. Basin expressed concerns about potential impacts on its power facility and initially relied on a 1975 agreement with GID regarding the use of supplemental water rights, which GID later claimed was not binding due to lack of approval by the State Engineer and Board of Control. Negotiations between the parties faltered, leading Basin to file a Petition for Declaration of Partial Abandonment on April 7, 1994. 

During the proceedings, it was established that GID's use of its supplemental water supply was limited to 17 days in late summer 1990 and that the diversion rate did not exceed 25 c.f.s. GID used the new pump at its full capacity on April 1, 1994. The Board of Control concluded that GID had partially abandoned its supplemental water right, reducing it to 34 c.f.s. Both parties subsequently petitioned the court for review of this decision.

Regarding standing, GID asserted that Basin lacked standing to pursue abandonment because it could not demonstrate injury or benefit from GID's water rights. GID argued that sufficient river flows historically met its needs, and therefore, the abandonment would not harm Basin. Standing requires a party to have a personal stake in the outcome, typically proven by showing a valid water right of equal or junior status, that both rights are from the same source, and that the petitioner would benefit or suffer injury from the abandonment. In this case, the first two conditions were met, leaving the court to determine if Basin would benefit from the abandonment of GID's rights.

The Board of Control found that various computer simulations illustrated the operation of the Greyrocks Reservoir and lower Laramie River, each based on differing parameters such as water rights utilization and GID's supplemental water rights. Exhibits I and M were identified as the most relevant simulations, reflecting assumed GID diversions of 100 c.f.s. and 35 c.f.s. respectively, without protection for Basin's agreement flows. These simulations closely mirrored recent operational conditions and demonstrated potential injury to Basin’s storage capacity, as the difference in diversions indicated greater availability of storage for the Laramie River Station during GID's likely usage months (June to September). The Board accepted the simulation results as indicative of a probable impact on Greyrocks Reservoir, estimating that the actual effect of GID's full usage would lie between the upper and lower limits established by Basin’s and GID’s simulations. 

Basin was determined to have standing to pursue abandonment proceedings against GID's supplemental water rights, showing potential injury from GID's full utilization. GID attempted to introduce the equitable defenses of estoppel and laches, but the Board declined to consider these defenses, citing public policy concerns related to water rights abandonment statutes. GID argued this was an error, believing its defenses should be prioritized; however, the conclusion reached was that even if their defenses were considered, GID would not succeed.

GID's equitable estoppel claim hinges on Basin's agreement with the State of Nebraska, which GID argues is illegal. However, Basin has independent standing to pursue an abandonment action, as it would face injury to its water rights if GID fully utilizes its supplemental rights. GID argues that Basin should be barred by laches due to a two-year delay in addressing GID's expansion plans, claiming that this delay caused substantial prejudice. Laches requires both unreasonable delay and a lack of diligence by the plaintiff. Basin's ongoing negotiations to settle differences with GID indicate that it was not negligent in its actions, thus disqualifying the application of laches.

Regarding the partial abandonment statute (W.S. 41-3-401), GID contends it should not apply retroactively. However, the court's earlier decision in Hofeldt v. Eyre suggests that such rulings apply both retrospectively and prospectively, barring substantial injustice to GID. GID has not demonstrated how it would face substantial injustice, especially since it had prior notice of potential abandonment issues. Lastly, GID asserts that the statute prohibits partial abandonment of its supplemental supply, referencing W.S. 41-3-401(f) as a potential exception, which the court finds unconvincing.

W.S. 41-3-401(f) stipulates that an irrigation appropriation cannot face partial abandonment due to nonuse if the appropriator maintained usable facilities for water diversion and there was insufficient water supply, despite diligent efforts to utilize available resources. The Board of Control determined that this statute does not apply in the current case because it requires the appropriator to have facilities capable of diverting the entire appropriation. This interpretation aims to prevent users from circumventing the statute by installing minimal diversion facilities while neglecting to use their full appropriation. GID argues that recent legislative appropriations for new pumps suggest a legislative intent to override the abandonment statute; however, the court asserts that repeals by implication are disfavored, especially in appropriations measures. The court concludes that the legislature did not intend to repeal the abandonment statute, emphasizing that appropriations measures serve specific funding purposes and should not alter existing substantive laws. This ensures that legislators can assume funds will be used lawfully without the risk of inadvertently changing prior statutes with each appropriation.

GID failed to demonstrate that the legislature was aware of its supplemental water supply's status regarding potential abandonment proceedings or that it intended to prevent such proceedings through appropriations. Consequently, there is no legislative intent to repeal substantive statutes via appropriations bills. Basin challenges the Board of Control's decision to abandon GID's supplemental supply of water, arguing that the finding of 34 cubic feet per second (c.f.s.) lacks substantial evidence. The Board's conclusion relied on a test conducted on April 1, 1994, but Basin contends that no measuring device was used to determine the actual pumped amount. Additionally, Basin argues that the pumping was merely a test and not a beneficial use, which is required to avoid abandonment. The court found insufficient evidence to support the Board's conclusion of 34 c.f.s., noting that the pumping was not measured, and the hydrographer's estimate was speculative and lacked expertise. The Board's findings were not adequately supported by the record, leading to a reversal and remand for a reassessment, ultimately reducing GID's supplemental right to 25 c.f.s. Substantial evidence must be relevant and allow a reasonable mind to accept the agency's conclusions, which was not met in this case.

The determination of the water pumped on April 1, 1994, is based solely on speculation, which invalidates its use for assessing supplemental water supply over the prior five years. The only substantiated figure in the record is the 25 c.f.s. diversion stipulated for GID in August/September 1990. Consequently, the Board's failure to mandate the abandonment of GID's supplemental right to 25 c.f.s. constitutes an error. While the Board's decision to partially abandon GID's Laramie River supplemental water right is upheld, its decision to set abandonment at 34 c.f.s. lacks substantial evidentiary support and is reversed, with instructions to adjust GID's right to 25 c.f.s. Additionally, GID argues that Basin's claims of injury or benefit depend on an agreement with the State of Nebraska regarding water releases, which GID contends violates Wyoming law, thus questioning its standing. However, the standing issue has been resolved independently of the agreement's validity.