Case Title: Redrock Valley Ranch v. Washoe County

Citation: 127 Nev. Adv. Op. No. 38

Docket Number: 

State: nevada

Court: Nevada Supreme Court

Date: 2011-07-07T00:00:00Z

Document:
427 Nev, Advance Opinion 38
IN THE SUPREME COURT OF THE STATE OF NEVADA

REDROCK VALLEY RANCH, LLC, A No, 55695

NEVADA LIMITED LIABILITY

COMPANY,

Appellant, | FHL ED
v8.

WASHOE COUNTY, APOLITICAL —_ | WL OF 2011

SUBDIVISION OF THE STATE OF |

NEVADA,

Respondent. |

J

 

 

Appeal from a district court order denying a petition for
judicial review of a county's special use permit denial, Second Judicial
District Court, Washoe County; Brent T. Adams, Judge.

Affirmed,

Prezant & Mollath and Stephen C. Mollath, Reno; Parsons Behle &

Latimer and Ross E. de Lipkau and Alysa M. Keller, Reno,
for Appellant.

 

Richard A. Gammick, District Attorney, and Nathan J. Edwards, Deputy
District Attorney, Washoe County,
for Respondent.

‘Thomas J. Hall, Reno,
for Amici Curiae Northern Nevada Citizens for Water Conservation, Inc.,
Vernon R. Banks, and Paula Banks.

 

BEFORE CHERRY, GIBBONS and PICKERING, JJ.

 

 
OPINION

By the Court, PICKERING, J.:
Redrock Valley Ranch, LLC (RVR) proposes to export water
from one hydrographic basin to another in northern Nevada, Both bi

 

lie in Washoe County. ‘The State Engineer approved the transfer
applications, but Washoe County declined to grant RVR a special use
permit for the pipelines, pump houses, and other infrastructure needed to
make the water exportation plan a reality. ‘The district court upheld the
denial of the special use permit, and RVR appeals.

Washoe County gave mixed signals concerning the project.
RVR contends that the inconsistent positions taken by Washoe County,
together with the State Engineer's approval of the transfer applications,

 

required Washoe County to grant RVR’s special use permit appli
We disagree and affirm.
L

RVR filed seven applications with the State Engineer to
change the place and manner of use of, and to appropriate, water for
irrigation, domestic, and municipal purposes. RVR proposed to move the
water approximately 16 miles from Red Rock Valley Hydrographic Basin
to the Lemmon Valley Hydrographic Basin. Initially, Washoe County
joined others in protesting the transfer applications. Later, Washoe
County and RVR entered into a stipulation whereby RVR agreed to limit
its interbasin transfer request to 1,273.39 acre-feet annually (afa), and, in
exchange, Washoe County would withdraw its protests.

After a hearing, the State Engineer issued Ruling No. 5816.
In this ruling, the State Engineer approved RVR's transfer applications as

2

 

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to 856 afa of water, subject to submission of a monitoring and mitigation
plan, The ruling approved transfer of an additional 418 afa of water, for a
total of 1,273 afa, if RVR met certain conditions. As required by NRS
533.370, the State Engineer made findings that these changes in use
would not conflict with existing rights or protectable interests in domestic
wells, or threaten to prove detrimental to the public interest.

Meanwhile, RVR entered into an agreement with the Truckee
Meadows Water Authority (TMWA). This agreement gave TMWA a right
of first refusal to purchaso RVR's transferable water rights. It also
required RVR to apply to Washoe County for a special use permit for the
water transfer facilities.

RVR’s special use permit application outlined plans for 16.5
miles of pipelines, three well houses, a booster pump station, two small
surge tanks, a 25,000-gallon water tank, backup generators, a small
telemetry antenna, and paved access roads. The proposed project would
adjoin single-family homes in Sierra Rancho Estates and Red Rock
Estates in Washoe County. The water was not designated for any
particular development but to assure redundancy and future availability.

While the special use permit application was pending, the
Regional Water Planning Commission amended the Washoe County
Comprehensive Regional Water Management Plan (Water Management
Plan). The amendment noted RVR's water rights as a potentially
available water resource; Washoe County is a voting member of the
Regional Water Planning Commission.

 
‘The Washoe County Development Code requires five findings
jue. Washoe County Code § 110.810.30.! The
fourth required finding is that “{iJssuance of the permit will not be

for a special use permit to i

 

significantly detrimental to the public health, safety or welfare; injurious

 

!Washoe County Code section 110,810.30 stat.

 

in its entirety:

Prior to approving an application for a special use
permit, the Planning Commission, Board of
Adjustment or a hearing examiner shall find that
all of the following are true:

(a) Consistency. The proposed use is consistent
with the action programs, policies, standards and
maps of the Comprehensive Plan and the
applicable area plan;

() Improvements, Adequate utilities, roadway
improvements, sanitation, water supply, drainage,
and other necessary facilities have been provided,
the proposed improvements are properly related to
existing and proposed roadways, and an adequate
publie facilities determination has been made in
accordance with Division Seven;

(© Site Suitability. The site is physically suitable
for the type of development and for the intensity of
dovelopment;

(@) Issuance Not Detrimental, Issuance of the
permit will not be significantly detrimental to the
public health, safety or welfare; injurious to the
property or improvements of adjacent properties;
or detrimental to the character of the surrounding
area; and

 

(©) Effect_of a Military Installation, Issuance of
the permit will not have a detrimental effect on
the location, purpose or mission of the military
installation.

 

 
nee

to the property or improvements of adjacent properties; or detrimental to
the character of the surrounding area...” Id.
RVR’s special use permit application went first to the Washoe
County Department of Community Development, where staff
recommended approval and limiting review to the impact of the facilities,
not whether the water should be exported? After a public hearing,
however, the Washoe County Board of Adjustment denied the special use
permit application. ‘The Board of Adjustment determined that the fourth
finding required by Washoe County Code section 110.810.30—that
ssuance of the special use permit would not be significantly detrimental

to the public, adjacent properties, or surrounding area—could not be

 

made,

RVR appealed the Board's denial to the Washoe County
Commission. Members of the public, including the North Valleys Citizen
Advisory Board, opposed the project. Public concerns included: increased
fire risk, impacts to existing wells, impacts to wildlife and livestock,
chemical storage, visual impacts, risk of loss of wetlands, noise pollution,
and air quality issues. The Commission questioned the need for the
project. The area’s economy had decayed between March 2006, when RVR
filed its transfer applications with the State Engineer, and May 2009,
when the special use permit application came before the Washoe County
Commission. Another Washoe County water importation project—Fish
Springs—authorized importation of 8,000 acre-feet of water, yet that

2Later, at the Washoe County Commission hearing, the Washoe
County District Attorney's Office disagreed with staff on the scope of
project review.

 
water was going unused. This led the Commission to ask if the project!
benefits justified its risk:

 

Finally, the Commission received testimony
and a report from a hydrologic consultant, Dr. Tom Myers, who opined
that the project would be detrimental to the hydrology of the area,
contradicting the State Engineer's findings.

Citing policy conflicts, noise, community character, public

  

health, and property value is:
It stated that it could not find, as required by Washoe County Code section

1es, the Commission denied RVR's appeal.

110,810.30, that issuance of the permit would “not be significantly
detrimental to the public he

property or improvements of adjacent properties; or detrimental to the

 

Ith, safety or welfare; injurious to the

character of the surrounding area,”

RVR sued Washoe County for judicial review under NRS
278.0233, declaratory relief,
or denial of a request for a special use permit is a discretionary act,” which

 

ind damages. Recognizing that “[tJhe grant

limits judicial review to the record before the agency or local governmental
entity involved, City of Las Vegas v, Laughlin, 111 Nev. 557, 558, 893 P.2d
383, 384 (1996), the district court confined its review to the record before
the Washoe County Commission and denied relief It concluded that
substantial evidence supported Washoe County's decision to deny RVR's
application for a special use permit and that the denial did not amount to
an abuse of discretion.

“The district court declined to consider supplemental exhibits from
the State Engineer's hearing because RVR did not establish these were
part of the record before the Washoe County Commission.

 

 
os

Our review of the district court's decision is de novo, Kay v.
Nunez, 122 Nev, 1100, 1105, 146 P.3d 801, 805 (2006), and we affirm,
Ih

On appeal, RVR argues that Washoe County did not have
authority to deny the special use permit application. In its view, the State
Engineer proceedings had both preemptive and preclusive effect and, had
Washoe County not delved into issues outside its authority, substantial
evidence was lacking to support the denial. Even though judicial review of
a special use permit’s denial normally is deferential, see Laughlin, 111
Nev. at 558, 893 P.2d at 384, RVR argues for de novo review here because
Washoe County arrogated to itself discretion belonging exclusively to the
State Engineer. See Tighe v. Las Vegas Metro, Police Dep't, 110 Nev. 632,
634-35, 877 P.2d 1032, 1034 (1994) (while the court “will affirm [an]
agency's decision if it is supported by substantial evidence,” and may not
“substitute [its] judgment for that of the agency as to the weight of
evidence ...the construction of a statute is a question of law and
independent appellate review, rather than a more deferential standard of
review, is appropriate”).

RVR takes too restrictive a view of Washoe County's
authority, particularly in light of Serpa v, County of Washoe, 111 Nev.
1081, 1085, 901 P.2d 690, 693 (1995). We conclude that the State
Engineer's ruling neither preempted nor precluded Washoe County from
denying RVR's application for a special use permit for the reasons it did
and that substantial relevant evidence supported Washoe County's denial
of the special use permit.

A

NRS 533.370 vests the State Engineer with authority to

decide whether to reject or approve an application for an interbasin

 
os

transfer of groundwater. ‘This statute works in tandem with other
“Nevada water law statutes [that] define separate roles for the State
Engineer and Washoe County”; it does not preempt Washoe County's
authority over political, social, and economic decisions relating to water.
Pyramid Lake Paiute Tribe v. Washoe Co,, 112 Nev. 743, 749-50, 918 P.2d
697, 701-02 (1996). As this court held in Serpa, 111 Nev. at 1085, 901
P.2d at 693, “[t]here is no state law indicating that the ruling of the State
Engineer preempts a county or other governmental entity from enacting
zoning laws that impose limitations on water use that are more restrictive
than those of the State Engineer.” A county may limit water use “as long
as those restrictions are consistent with the relevant long-term
comprehensive plans, Nevada law, and notions of public welfare.” Id,

In this case, the State Engineer made a finding that “the
applications . .. will not threaten to prove detrimental to the public
interest.” No question the wording is similar to the fourth finding
required for issuance of a Washoe County special use permit: “[iJssuance of
the permit will not be significantly detrimental to the public health, safety
or welfare; injurious to the property or improvements of adjacent

 

properties; or detrimental to the character of the surrounding area . .
Washoe County Code § 110.810.30. However, the public interest finding
made by the State Engineer does not obviate local social, political, and
economic concerns. Compare Pyramid Lake Paiute Tribe, 112 Nev. at 749-
50, 918 P.2d at 701-02 (the State Engineer lacks the staffing and statutory
charge for such determinations), with Serpa, 111 Nev. at 1084, 901 P.2d at
692 (the county's discretion to independently define “orderly physical
growth and development . .. which will cause the least amount of natural

 
 

resource impairment,” NRS 278,230(1)(a), “necessarily includes the ability
of a county government to determine water availability for itself”).

Here, the Washoe County Commission limited the bases for
denying the permit to policy conflicts, noise impacts, changes to
community character, public health issues, and lowering of property
values. It determined that adequate, less risky water supply alternatives
existed to the plan RVR proposed, Although the public presented concerns
that fell within the State Engineer's purview, such as impacts to existing
wells, the State Engineer's ruling did not, and could not, limit Washoe
County's ability to reject the special use permit for the social and economic
reasons discussed above, which are separate and distinct from the issues
addressed by the State Engineer.

RVR distinguishes Serpa, arguing that unlike the project in
that case,

 

8 project earned regional approval by its mention as a
“{plotentially available water resource” in the 2009 amendments to the
Water Management Plan. This reads more into the project’s mention in
the Water Management Plan than is fair. “Potential” means “[pJossible as
opposed to actual.” XI Oxford English Dictionary 224 (2d ed. 1989)
Describing a water resource as “potentially available” is like saying it is
“possibly available,” as distinguished from “actually available.” Such a
description does not connote approval.

‘The Water Management Plan recognizes that cities and

counties, including Washoe County, “will be the final authorities regarding
necessary infrastructure improvements.” See Sustainable Growth v,
Jumpers, LLC, 122 Nev. 53, 65 n.35, 128 P.3d 452, 461 n.35 (2006) (while
master plans deserve deference from state and local agencies, they should
not be considered “a legislative straightjacket from which no leave may be

 

 
taken” (internal quotation marks omitted)). Here, Washoe County's land
use ordinances, Washoe County Code sections 110.810.00 and
110.810.030, together with its comprehensive plan (North Valleys Area
Plan),* provided the framework upon which Washoe County rested its
denial of RVI

 

special use permit application. Its authority to act in
regard to RVR's special use permit application was not preempted by NRS
533.370 or State Engineer Ruling No. 5816,

B.
RVR next argues that, since Washoe County did not appeal

 

the State Engineer's ruling, issue and claim preclusion attach to that
decision. To RVR this means that, whatever authority it might otherwise
have, Washoe County could not, in the context of this special use permit
application, redetermine any issue or claim that was or could have been
decided by the State Engineer in connection with Ruling No. 5816, Put
another way, RVR extrapolates from the State Engineer's authority in
NRS 533,370 and its vietory in Ruling No. 6816, a mandatory finding by
Washoe County that the special use permit would not “be significantly
detrimental” to the public.

Issue and claim preclusion “protect the finality of decisions
and prevent the proliferation of litigation,” Littlejohn v, United States, 321

 

“Goal 18 of the North Valleys Area Plan is to “[mJaintain and
enhance the value of wetlands and their associated habitats for their
groundwater recharge, aesthetic, environmental, _educational,
recreational, effluent reuse, storm water runoff and flood control
purposes.” Rather than 100 percent of the valley's perennial yield, the
North Valleys Area Plan Policy NV.1.3 limits new development units as
part of land use designation change to 85 percent of the sustainable water
yield.

 

 
2

 

F.8d 915, 919 (th Cir. 2008), but do not apply unless specific
requirements are met. See Five Star Capital v. Ruby, 124 Nev. 1048,
1055, 194 P.3d 709, 713 (2008). Among other requirements, for issue
preclusion to attach, “the issue decided in the prior [proceeding] must be
identical to the issue presented in the current [proceeding]"; for claim
preclusion “the subsequent action {must be] based on the same claims or
any part of them that were or could have been brought in the first case.”
Id, at 1054-56, 194 P.3d at 713 (footnotes omitted).®
An agency decision can result in issue or claim preclusion as to
subsequent decision made by another court or a different agency. See
University & Cmty. Coll, Sys, v, Sutton, 120 Nev. 972, 984, 103 P.8d 8, 16
(2004); Britton v, City of North Las Vegas, 106 Nev. 690, 692, 799 P.2d
568, 569 (1990). But “care should be taken before one agency is forced to
sive collateral effect to the decisions of another.” 2 Charles H. Koch, Jr.,
Administrative Law and Practice § 5:72 (8d ed. 2010). While “{plublie
interest is part of every agency's decision ... public interest for one agency
is not the same as public interest for another.” Id, In the interagency
setting, “preclusion may be defeated by finding such an important
difference in the function of different agencies that one does not have the
authority to represent the interests of the other.” Holmberg v. State Div,
8Claim preclusion is a nonstarter in this case, given the State
Engineer's lack of institutional capacity to grant or deny @ local special use
permit. Citing Willerton v. Bassham, 111 Nev. 10, 17 n.6, 889 P.2d 823,
827 n.6 (1996), Washoe County asserts that the State Engineer's ruling is
a stipulation-based judgment and, therefore, issue preclusion cannot
apply. We do not need to decide the impact Washoe County’s stipulated

withdrawal from the State Engineer proceeding had on RVR’s ability to
assert issue preclusion since we reject issue preclusion on other grounds.

uw

 
of Risk Management, 796 P.2d 823, 826 (Alaska 1990) (citing Porter &
Dietsch, Inc, v, B.T.C., 605 F.2d 294 (7th Cir, 1979).

Washoe County and the State Engineer play distinct roles in
managing water in the context of land use and development, Pyramid
Lake Paiute Tribe, 112 Nev. at 749, 918 P.2d at 701. The Legislature has
charged the State Engineer with evaluating proposed water
appropriations, requiring the State Engineer to deny a permit “where
there is no unappropriated water in the proposed source of supply, or
where its proposed use or change conflicts with existing rights or with
protectable interests... or threatens to prove detrimental to the public
interest.” NRS 633,370(6).6 In contrast, Nevada counties are “authorized
and empowered to regulate and restrict the improvement of land and to
NRS 278.020(1). ‘The
State Engineer's public interest mandate doos not extend to land use

 

control the location and soundness of structures.’

concerns, such as zoning and related matters, Serpa, 111 Nev. at 1085,
901 P.2d at 692-93, and the grant or denial of a special use permit is for
the county, not the State Engineer to decide.

‘Nevada's counties have the authority, indeed the obligation, to
make political and economic decisions concerning water project
alternatives. Pyramid Lake Paiute Tribe, 112 Nev, at 750-51, 918 P.2d at
701-02. This authority exists separate and apart from the public interest
finding required from the State Engineer. Id, Although there may be

 

"We note that NRS 533.370 was amended July 1, 2011. A.B. 115,
‘76th Leg. (Nev. 2011). However, the amendments do not apply here
because RVR’s application was filed before July 1, 2011. Id. Our
references are to the prior, applicable version of the statute,

 

 

 

 
one

some overlap between the public interest considerations of the State
Engineer and that of the Nevada counties, most of the issues the Washoe
County Commission considered—increased fire risk, impacts to wildlife
and livestock, chemical storage, visual impacts, noise pollution, property
values, community character, air quality issues, and impact on existing
land uses—fall squarely within the purview of the counties under NRS
Chapter 278, See Serpa, 111 Nev. at 1084, 901 P.2d at 692.7

“The availability of issue preclusion is a mixed question of law
and fact,” in which “legal issues predominato” and, “[olnce it is determined
[to be} available, the actual decision to apply it is left to the discretion of
the” tribunal in which it is invoked. Sutton, 120 Nev. at 984, 103 P.3d at
16. Even giving RVR the benefit of the doubt on the identity of some of

the issues (and assuming is

 

ie preclusion applies despite Willerton,

 

discussed supra note 6), we cannot conclude that the Washoe County
Commission abused its discretion in rejecting issue preclusion on the
record it had.

 

‘Of note, the Legislature requires the State Engineer to consider the
need for the water project as part of the application analysis. NRS
583.370(6)(a). ‘The Washoe County Commission considered need as well,
determining that the community did not need the project because water

 

from another recently approved project was going unused, making it a less
risky alternative to simply maintain the status quo. The State Engineer
may rely on the counties to determine need in light of competing
alternatives, Pyramid Lake Paiute Tribe, 112 Nev. at 752, 918 P.2d at 703,
80 issue preclusion with respect to the need determination is doubtful,
especially given the profound change in the area's economy.

   

 
c

RVR next complains that Washoe County violated the
stipulation entered into before the State Engineer when it denied the
special use permit. A written stipulation is a species of contract. See
Lehrer McGovern Bovis v, Bullock Insulation, 124 Nev. 1102, 1118, 197
P.8d 1032, 1042 (2008). Contract interpretation is a question of law and,
as long as no facts are in dispute, this court reviews contract issues de
novo, looking to the language of the agreement and the surrounding
circumstances. Id, In addition, because public policy favors the
settlement of disputes, stipulations should not be easily set aside. Mullins
v. Oates, 179 P.3d 930, 937 (Alaska 2008).

Here, RVR and Washoe County entered into a stipulation
whereby RVR agreed to request less water from the State Engineer and, in
exchange, Washoe County agreed to drop its protests to the water right
applications, Washoe County did not agree to issue a special use permit
as part of the stipulation, nor do the surrounding circumstances indicate
such an agreement. The stipulation concerned the proceedings before the
State Engineer, not RVR’s later application for a special use permit,

D.

RVR’s final challenge is to the sufficiency of the evidence
before the Washoe County Commission. It argues that the Washoe
County Commission had no evidence that the project did not meet the
requirements of Washoe County Code section 110.810.030(d), see supra
note 1, and that the Commission went beyond the scope of special use
permit review, which it contends is limited to determining “if the uses
have the potential to adversely affect other land uses, transportation

systems, or public facilities in the vicinity,” as set forth in the Washoe

 

 
8

 

County Code's stated purpose for its special use permit section. Washoe
County Code § 110.810.00.

A public agency may rely on public testimony in denying a
special use permit. Laughlin, 111 Nev. at 559, 893 P.2d at 385, Here, 34
members of the public testified at the Commission hearing about
increased fire risk, impacts to existing wells, impacts to wildlife and
livestock, chemical storage, visual impacts, noise pollution, and air quality
issues. That testimony provides substantial evidence to support Washoe
County's conclusion that it could not make the required finding that the
special use permit would not be “be significantly detrimental” under
Washoe County Code section 110.810.0(4). See Stratosphere Gaming
Corp. v. City of Las Vegas, 120 Nev. 523, 628, 96 P.3d 766, 760 (2004)
(significant public opposition afforded “substantial evidence” for the denial
of a site development plan application, defining “substantial evidence” as
“that which a reasonable mind might accept as adequate to support a
conclusion” (internal quotations omitted)). Even if the development code
limited Washoe County's discretionary review, the public testimony
indicates that the project would adversely affect adjacent land uses. A
reasonable person could consider the public testimony adequate to support
Washoe County's decision.

  

We therefore affirm.
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Pickering
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Gibbons
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