On January 29, 2009, the Supreme Court of Oregon accepted certified questions from the United States Court of Appeals for the Federal Circuit related to a case involving multiple plaintiffs, including various irrigation districts and individuals, against the United States and the Pacific Coast Federation of Fishermen's Associations. The case concerns the management of the Klamath Project by the Federal Bureau of Reclamation, which provides water to farmers and irrigation districts in the Klamath River basin. Extensive memoranda were submitted by the parties and the Oregon Water Resources Department, which participated as amicus curiae, articulating positions for and against the acceptance of the certified questions. The court referenced ORS 28.200, which allows for the acceptance of certified questions, and cited precedents to justify its decision.
In 2001, drought conditions led the Bureau to halt water deliveries to plaintiffs to protect three endangered fish species. The plaintiffs asserted a property right to the water, filing a takings claim in the Court of Federal Claims against the United States, alleging unconstitutional property deprivation. The Court ruled that plaintiffs had no equitable right to the water used for irrigation, citing a 1905 Oregon statute that granted the United States rights to unappropriated Klamath Basin water. Consequently, the Court concluded that the plaintiffs' takings claim failed due to the lack of an equitable interest in the water.
The plaintiffs appealed to the Federal Circuit, which identified a central issue at the intersection of federal and state law. The Reclamation Act of 1902, which aimed to facilitate irrigation in arid and semiarid western lands, was highlighted. This Act allows for the Secretary of the Interior to make water from irrigation projects available but stipulates that this must conform to state laws regarding water control and appropriation. Section 8 of the Act specifies that water rights acquired under the Act are linked to the irrigated land and that beneficial use is the determining factor for these rights.
Both parties acknowledged challenges related to Section 8, as western states require beneficial use before water appropriation. The prolonged construction of federal reclamation projects risked others appropriating the water first. To address this, Oregon enacted a 1905 law stating that if a U.S. official filed notice of intent to utilize unappropriated waters, those waters would be considered appropriated by the United States, barring further appropriation under state law unless formally released. An official from the United States Geological Survey posted a notice in 1905 claiming all unappropriated waters of the Klamath River for various beneficial uses, including irrigation.
The Bureau of Reclamation notified the state engineer of its intent to utilize all Klamath Basin waters in Oregon for the Klamath Project under the Reclamation Act. Following this, the Bureau submitted plans and proof of authorization for the Project. Plaintiffs argued in the Federal Circuit that rights to Klamath River water were acquired by the United States through compliance with a 1905 state law, claiming that while the United States had rights, it did not hold exclusive use. They contended that farmers and irrigators receiving water developed at least an equitable interest when they utilized it, citing three Supreme Court cases that supported their position on the beneficial interest of landowners within reclamation projects.
The United States countered that state law governed water appropriation and rights for federal projects, affirming that the 1905 Oregon statute barred the plaintiffs' claims to an equitable interest. Although the U.S. acknowledged the cases cited by the plaintiffs, it maintained that these decisions were fact-specific and not a blanket rule applicable to all western states. The U.S. claimed it acquired rights to all unappropriated waters in the Klamath River upon filing the notice and asserted that a formal written release was necessary for the plaintiffs to obtain any water rights. Consequently, the Federal Circuit certified three questions for further consideration, particularly regarding the implications of the 1905 Oregon statute on the rights of irrigation districts and landowners concerning the water appropriated by the United States.
Landowners receiving water from the Klamath Basin Reclamation Project may have a beneficial or equitable property interest in the water rights acquired by the United States. Similarly, irrigation districts may also hold such interests. The first certified question examines if the 1905 Oregon statute, under which the United States appropriated water rights for the Klamath Project, prevents others from claiming beneficial or equitable interests in those rights. The second question builds on the first, inquiring if beneficial use of the water by recipients from the Klamath Project establishes a beneficial or equitable interest under Oregon law, assuming the 1905 statute is not an absolute barrier.
The third question pertains to whether individuals can assert a legal or equitable property interest in Klamath Project water without undergoing a separate state adjudication of surface water rights in the Klamath River basin. Each of these questions relates to state law and may significantly impact the plaintiffs' federal takings claim. The resolution of these questions could determine whether the plaintiffs can claim equitable interests in the water rights, particularly if the 1905 Act is found to preclude their claims or if they did not rely on rights determined in the pending state adjudication.
The certified questions appear to meet the five statutory criteria outlined in Western Helicopter Services, indicating their legal relevance and potential to resolve federal claims, though the Oregon Water Resources Department has raised objections to their acceptance. The United States and the Pacific Coast Federation of Fishermen's Associations have also submitted responses aligning partially with the state's objections.
Plaintiffs assert that the state and other parties are attempting to relitigate issues already resolved by the Federal Circuit. The state argues that plaintiffs' litigation strategy in the Court of Federal Claims renders the Federal Circuit's certified questions irrelevant to the takings claim. However, it is suggested that the Federal Circuit would not have certified the questions if it believed they were improper, as indicated by a dissenting opinion from Judge Gajarsa. The majority's decision to certify suggests confidence in the relevance of state law issues. The United States claims that a 1905 Oregon statute provides a complete defense to the plaintiffs' property interest and contends that the plaintiffs' strategy makes the third certified question relevant.
The state also mentions factual disagreements between the parties, specifically regarding plaintiffs' litigation strategy in a certain paragraph of their submitted statement of facts. Despite this disagreement, the Federal Circuit concluded that it would not impede the acceptance of the certified questions. The state further emphasizes the significance of the ongoing state water rights adjudication, established in 1975, which aims to comprehensively determine water usage rights in the Klamath River basin. The state proposes that the certification questions should not be resolved until the context of this adjudication is established and warns that a decision on these questions may lead the United States to withdraw from the adjudication, undermining its comprehensiveness.
The Klamath Basin adjudication is recognized as a comprehensive proceeding where Congress waived the United States' sovereign immunity. The court acknowledges the Federal Circuit's certification order, which indicates that state law questions are relevant to the plaintiffs' federal takings claims. The primary issue is not whether these state law questions should be resolved, but which court—this court or the Federal Circuit—should address them. Concerns from the state and others center on the federal court's decision not to stay proceedings until the state water rights adjudication concludes. Regardless of the merits of that decision, it does not prevent this court from accepting the certified questions.
While some parties have requested rephrasing or specific ordering of the questions, the court declines to do so at this stage, noting that parties have yet to submit briefs on the merits of the state law issues. The court believes the questions are adequately open-ended and can be addressed flexibly as needed. It emphasizes that it retains the discretion to decline to answer or to rephrase questions after full briefing. The certified questions have been accepted.
Additionally, the court references that the Bureau made approximately 70,000 acre-feet of water available in July 2001. It cites the Court of Federal Claims' conclusion that the plaintiffs’ interests in water were either contractual or, if derived from patents or permits, were junior to those held by the United States and certain tribes. The court previously granted summary judgment for the United States regarding plaintiffs' claims of property interest in water. Later, it recognized the sovereign acts doctrine as a defense against the plaintiffs' breach of contract claim.
The parties' arguments are summarized to contextualize the Federal Circuit's inquiries without expressing any opinion on their merits. Plaintiffs contended that if Oregon law diverged from the Reclamation Act's section 8 proviso, the latter would take precedence. The United States countered, claiming the proviso's scope is narrower than the plaintiffs suggested. If the United States' position holds that plaintiffs have renounced any reliance on property interests adjudicated in the ongoing state water rights case, the resolution of the third question could serve as an alternate basis for adjudicating the federal action. Additionally, in United States v. Oregon, the Ninth Circuit ruled against the United States, stating that prior individual water rights determinations in the Klamath Basin did not negate the comprehensiveness of the pending water rights adjudication under the McCarran Amendment. This ruling diminishes concerns regarding the United States potentially withdrawing from the state adjudication, as it suggests that any issues addressed in the Federal Circuit's inquiry would not undermine the adjudication's comprehensiveness.
