## United States Court of App eals

F O R T H E E I G H T H C I R C U I T

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No. 1 0- 24 41

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Gerar d J . Keati ng , in di vi du al ly and on * be ha lf o f al l p ers on s s im il arl y si tu at ed ; * Ja ne t A. Keat in g, i nd iv id ua ll y an d o n * be ha lf o f al l p ers on s s im il arl y si tu at ed
, *

* Pl ai nt iff s- App el la nt s, *

* Fran k R . Krejci, i nd iv id ua ll y an d o n * Ap pe al fro m th e Uni te d S ta te s be ha lf o f al l p ers on s s im il arl y si tu at ed ; * Di st ric t Co ur t fo r th e Ja ne Krejci, i nd iv id ua ll y

an d o n * Di st ric t o f Neb ras ka

. be ha lf o f al l p ers on s s im il arl y si tu at ed ; * Tim ot hy Peter so n, i nd iv id ua ll y an d o n * be ha lf o f al l p ers on s s im il arl y si tu at ed ; * Lin da Pet ers on , in di vi du al ly and on * be ha lf o f al l p ers on s s im il arl y si tu at ed
, *

* Pl ai nt iff s, *

* Dary l Bu tt erfi el d, i nd iv id ua ll y an d o n * be ha lf o f al l p ers on s s im il arl y si tu at ed ; * Mak al a Bu tt erfi el d, i nd iv id ua ll y an d o n * be ha lf o f al l p ers on s s im il arl y si tu at ed
, *

* Pl ai nt iff -Ap pe ll an ts , *

*

v. *

* Neb ras ka Pu bl ic Po wer Dis tri ct , * in th ei r of fic ia l ca pa ci ti es ; * Neb ras ka Depa rtment o f Nat ur al * Res ou rces , in th ei r of

fic ia l ca pa ci ti es ; *Den ni s L. Ras m us se n, i n t he ir o ffi ci al * cap aci ti es ; M ary A. Hardi ng , in th ei r * of fic ia l ca pa ci ti es ; Ro na ld W . Larse n, * in th ei r of fic ia l ca pa ci ti es ; Larr y

A. * Lin st ro m , in th ei r of

fic ia l ca pa ci ti es ; * Darre ll J. Nel so n, i n t he ir o ffi ci al * cap aci ti es ; Ed ward J. Sch ro ck , in th ei r * of fic ia l ca pa ci ti es ; Ken L. Schm ie di ng , * in th ei r of fic ia l ca pa ci ti es ; Gar y

G. * Tho m ps on , in th ei r of

fic ia l ca pa ci ti es ; * Larry G. Kun cl , in th ei r of fic ia l * cap aci ti es ; Vi rg il L. Froe hl ic h, i n t he ir * of fic ia l ca pa ci ti es ; Way

ne E. Boyd, in * th ei r of fic ia l ca pa ci ti es ; An n S al om an * Bl eed , in th ei r of

fic ia l ca pa ci ti es ; * Bri an Dun ni ga n, i n t he ir o ffi ci al * cap aci ti es ; Do es , 1-1 00
, *

* Defen da nt s- App el le es

. *

*

----- ----- ----- ----- ----- ----- - *

* St at e o f Co lo rad o, St at e o f Mo nt an a; * St at e o f Nev ad a; Sta te of Ne w Mex ic o; * St at e o f Nor th Dako ta ; St at e o f * W y om in g; Sta te of S ou th Dako ta , *

* Am ic i o n B eh al f of * App el le es

. *

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Su bm it te d: Marc h 1 7, 2 01 1 Fi le d: Nov em

be r 7, 2 01 1

__ __ __ __ __ _ Befo re SM ITH, BRIGHT, and SHEPHERD, Circ ui t J ud ge s.

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-SHEPHERD, Cir cu it Ju dg e.

Sev eral Neb ras ka farm ers fil ed su it un de r 42 U.S.C. § 19 83
, al le gi ng th ei r du e
pr oc es s rig ht s were vi ol at ed whe n Neb ras ka of fic ia ls o r d e r e d t he farm ers to ceas e dr awin g wate r fro m th e Nio b r a ra W at ers he d wit ho ut pr ov id in g a pr ed ep riv at io n he ari ng

. W e rev ers ed th e di st ric t co ur t’s pr io r di sm is sa l an d rem an de d th e m at te r to th e co ur t wit h sp eci fic in st ru ct io ns

. On rem an d, th e di st ric t co ur t de te rm in ed th at 1
th ere was no de pr iv at io n of a pr op ert y rig ht an d en te red su m m ary jud gm en t in fav or of ap pe ll ees

. The di st ric t co ur t al so de cl in ed to ex erci se ju ris di ct io n ov er pe nd en t
st at e la w cl ai m s , di sm is si ng th os e cl ai m s wit ho ut pr ejud ic e. W e ag ree wit h th e di st ric t co ur t’s d et erm in at io n a nd affi rm it s t ho ro ug h a nd well -rea so ne d d eci si on

.

I.

A mo r e ex te ns iv e ex pl an at io n of th e fact ua l ba ck gr ou nd of th is cas e i s

av ai la bl e in ou r pr io r op in io n, se e Keat in g v . Neb. Pu b. Po wer Dis t., 5 62 F.3 d 92 3,
92 5- 92 6 (8 th Ci r. 20 09 ), th us we wil l pr ov id e on ly an ab br ev ia te d fact ua l ba ck gr ou nd he re. Due to a de crea se in wate r le ve ls i n t h e N i o b r a ra W at ers he d, in 20 06 th e Neb ras ka Pu bl ic Po wer Dis tri ct (NPPD) req ue st ed th at th e Neb ras ka Dep art m en t of
Natu ral Res ou rces (DNR) is su e Cl os in g Not ic es to hu nd red s of farm ers an d ran ch ers who he ld su rfac e wate r ap pr op ria ti on pe rm it s th at were jun io r to th os e pe rm it s hel d b y N P P D

. In th e su m

m er of 20 07
, th e DNR is su ed su ch Cl os in g Not ic es to jun i o r
pe rm it ho ld ers wit ho ut pr ov id in g th em no ti ce or a he ari ng pr io r to th e is su an ce of th e Cl os in g Not ic es

. The ap pe ll an ts fil ed su it
, arg ui ng th at th e Cl os in g Not ic es effe ct ed

a pr op ert y de pr iv at io n, an d acco rd in gl y th ey were en ti tl ed to th e p r o c e d u ral du e
pr oc es s pr ot ect io ns of a pr ed ep riv at io n he ari ng

. The di st ric t co ur t di sm is se d th e su it
, h o l d in g th at th e cl ai m was no t rip e an d th at ap pe ll an ts ha d no t ex h a u s t e d ad m in is tra ti ve rem ed ie s p rio r to fil in g t he co m pl ai nt

.

The Hon or ab le Ly le E. St ro m , Uni te d St at es Dis tri ct Ju dg e fo r th e Dis tri ct of 1 Neb ras ka

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-W e rev ers ed th e di st ric t co ur t’s di sm is sa l an d rem an de d th e m at te r to th e

di st ric t co ur t. W e di rect ed th e di st ric t co ur t on re man d to de te rm in e (1 ) whe th er a de pr iv at io n of a pr op ert y rig ht ha d oc cu rred
, (2 ) if a d e p r i v a ti on ha d oc cu rred
, whe th er th e de pr iv at io n was su bjec t to an ex cep ti on t o t h e r e qu ire m en t th at a
pr ed ep riv at io n pr oc es s be pr ov id ed
, an d (3 ) if th e de pr iv at io n was no t su bjec t to su ch

an ex cep ti on , whe th er th e DNR’s de cl arat or y or de r pr oc ed ur es were co ns ti tu ti on al ly ad eq ua te pre de pr iv at io n p ro ced ur es . Keati ng , 56 2 F .3d at 9 30

.

On rem an d, th e di s t r i c t co ur t di rect ed th e pa rti es to fil e cro ss m ot io ns fo r

su m m ary jud gm en t an d he ld a he ari ng on th e mo t i o n s

. The co ur t de te rm in ed th at al th ou gh th e ap pe ll an ts he ld a pr op ert y rig ht th at en ti tl ed th em to us e th e su rfac e
wate rs of th e Nio br ara Ri ve r, t h a t rig ht was qu al ifi ed an d su bjec t to th e DNR’s ad m in is tra ti on of th e ap pr op ria ti on syste m. A l s o , t he di st ric t co ur t he ld th at th e DNR’s ad mi ni st rat io n of th e syste m di d no t cau se th e ap pe ll an ts to su ffer a de pr iv at io n of th ei r pr op ert y rig ht s. Acco rd in gl y , th e di st ric t co ur t gr an te d su m m ary jud gm en t i n fa vo r of

th e ap pe ll ees

.

In th is se co nd ap pe al
, th e ap pe ll an ts arg ue th ey are en ti tl ed to a pr ed ep riv at io n he ari ng pr io r to th e DNR co nd uc ti ng it s ad m in is tra ti on of th e Nio br a r a Wa t e r sh ed

an d is su in g Cl os in g Not ic es

. Sp eci fic al ly, ap pe ll an ts se ek a pr ed ep riv at io n he ari ng
to ch al le ng e th e va li di ty of th e NPPD’s pe rm it s on th e gr ou nd s th at th e NPPD was no t be ne fic ia ll y us in g it s a p p r op ria ti on to pr od uc e po wer an d to ch al le ng e th e DNR’s de te rm in at io n o f wat er s carc it y

.

II.

W e rev ie w th e di st ric t co ur t’s gr an t of su m m ary jud gm en t de no vo , vi ewin g th e fact s in th e li gh t m os t fav or ab le to th e no nm ov in g pa rty. See Irv in g v. Dor m ire
, 58 6
F.3 d 64 5, 64 7 ( 8 t h C i r

. 2 0 0 9)

. W e wil l affi rm th e gr an t of su m m ary jud gm en t if

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-“t h e r e i s no ge nu in e di sp ut e as to an y m at eri al fact an d th e m ov an t is en ti tl ed t o

jud gm en t as a m at te r of

law.” Fe d. R. C iv . P. 56 (a).

Und er th e Fo ur te en th Am en dm en t, “ [n ]o St at e sh al l

. . . de pr iv e an y pe rs on of

. . . pr op ert y , wit ho ut du e pr oc es s of la w

. . . .” In ad dr es si ng a pr oc ed ur al du e
pr oc es s q u e st io n, a co ur t m us t fir st de te rm in e whe th er st at e act io n ha s de pr iv ed an in di vi du al of a pr ot ect ed pr op ert y in te res t, an d on ly aft er fin di ng su ch a de pr iv at io n do es th e co ur t co ns id er whe th er av ai la bl e pr oc ed ur es fo r ch al le ng in g th e de pr iv at io n

sa ti sf y th e req ui rem en ts of du e pr oc es s. Log an v. Zim m erm an Bru sh Co ., 45 5 U.S.
42 2, 42 8 (1 98 2)

. The Su pr em e Co ur t “ us ua ll y ha s he ld th at th e Co ns ti tu ti on req ui res

so m e ki nd of he ari ng be f o r e t h e St at e de pr iv es a pe rs on of li be rty or pr op ert y .” Zin erm on v. Bu rch , 49 4 U.S. 1 13 , 12 7 (1 99 0)

.

“ ‘T o ha ve a pr op ert y in te res t in a be ne fit
, a pe rs on cl earl y m us t ha ve m or e th an

an ab st r a c t n e e d o r d es ire ’ an d ‘m or e th an a un il at eral ex pe ct at io n of it

. He m us t, in st ead
, ha ve a le gi ti m at e cl ai m of en ti tl em en t to it .’ ” Town of Cas tl e Ro ck v. Gon zal es , 54 5 U.S. 74 8, 75 6 (2 00 5) (q uo ti ng Bd

. of Reg en ts v. Ro th
, 40 8 U.S. 56 4,
57 7 (1 97 2) ). “ Su ch en ti tl em en ts are, ‘of co ur se , . . . no t crea te d by th e Co ns ti tu ti on

. Rat he r, th ey are cre a t e d an d th ei r di m en si on s are de fin ed by ex is ti ng ru le s or

un de rs ta nd in gs th at st em fro m an in de pe nd en t so ur ce su ch as st at e la w.’ ” Id

. (q uo ti ng Pau l v . Davi s, 4 24 U.S. 69 3, 7 09 (19 76 )).

The pa rti es ag ree th at a wate r pe rm it en ti tl in g th e ho ld er t o u se su rfac e wat er wit hi n th e cap aci ty li m it s of th e Nio br ara W at ers he d rep res en ts a pr op ert y rig ht un de r Neb ras ka la w. See Lou p Ri ve r Pu b. Po wer Dis t. v. N. Lou p Ri ve r Po wer & Irr. Dis t., 5 N.W .2d 24 0, 24 7- 48 (Neb

. 19 42 ) (“ A rig ht of ap pr op ria ti on , un de r ou r Co ns ti tu ti on , whe th er fo r irr ig at io n o r fo r po wer p ur po se s, i s a p ro pe rty rig ht whi ch is en ti tl ed to th e sa m e pr ot ect io n as an y ot he r pr op ert y rig ht .”). Tha t rig ht
, ho wev er, is no t on e of

own ers hi p of the su rfac e wate r pr io r to cap tu re. Sp ear T Ran ch
, In c. v. Knau b, 69 1
N.W .2d 11 6, 12 7 (Neb

. 20 05 ) (“ A rig ht to ap pr op ria te su rfac e wate r ho wev er, is no t

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-an own ers hi p of pr op ert y

. In s t e a d
, t h e w at er is vi ewed as a pu bl ic wan t an d th e

ap pr op ria ti on is a rig ht to us e th e wate r.”). As th e di st ric t co ur t ex pl ai ne d, th e ho ld er of a su rfac e wate r pe rm it acq ui res th e rig ht s gr an te d by t he pe rm it an d is su bjec t to

co ns tra in ts art ic ul at ed by th e pe rm it

. Here, th e ap pe ll an ts ’ pe rm it s al lo w th em to us e
sp eci fic am ou nt s of su rfac e wate r so lo ng as th ere is su ffi ci en t cap aci ty, su bjec t to th e rig ht s of se ni or ap pr op ria to rs an d su bjec t to reg ul at io n by th e St at e th ro ug h th e DNR.

App el la nt s arg ue th at w h e n th e DNR ad m in is te rs th e Nio br ara in a m an ne r whi ch req ui res pe rm it ho ld ers to st op ta ki ng wate r, th e st at e sh ou ld co nd uc t a he ari ng
t o g i v e pe rm it ho ld ers who are be in g is su ed Cl os in g Not ic es an op po rtu ni ty to ch al le ng e th e DNR’s d et erm in at io n t h at th ere is a sc arci ty req ui rin g ad m in is tra ti on

an d to ch al le ng e th e va li di ty of an y se ni or ap pr op ria to r’s pe rm it

. W e reje c t t hi s
arg um en t be cau se whe n th e DNR de te rm in es th at th e w a t ers he d no lo ng er ha s th e
cap aci ty to su pp ly al l pe rm it ho ld ers , ap pe ll an ts no lo ng er ha ve a le gi ti m at e cl ai m of

en ti tl em en t to us e th e su rfac e wate r an d th us do no t su ffer a de pr iv at io n of a pr op ert y rig ht

.

On th e face of th e pe rm it s, pe rm it ho ld ers are warn ed th at th ere are pe rio ds of ti m e whe n wate r su pp ly on th e Nio br ara Ri ve r is in su ffi ci en t to m eet th e de m an ds of al l ap pr op ria to rs an d th at pe rm it ho ld ers are “ he reb y gi ve n no ti ce th at [th ey ] m ay be de ni ed th e us e of wate r du rin g ti m es of sc arci ty.” Und er Nebras ka la w, th e DNR is charg ed wit h ad m in is te rin g th e pr io r ap pr op ria ti on system , w hic h ne ce ssa ri ly re qui re s th e DNR to de te rm in e th e cap aci t y l i mits of a gi ve n st ream an d to de te rm in e wha t

res tri ct io ns m

us t be im po se d to en fo rce th e ap pr op ria ti on syste m

. Neb

. Rev

. S t a t. § 61 -2 06 (1 ) (“ The Dep art m en t of Natu ral Res ou rces is g i ve n juri sd ic ti on ov er al l

m at te rs p e r t a i n i n g to wate r rig ht s fo r irr ig at io n, po wer, or ot he r us efu l pu rp os es

e xc ep t as su ch juri sd ic ti on is sp eci fic al ly li m it ed by st at ut e.”). The pr op ert y r i g h t he ld by ap pe ll an ts is ex pr es sl y co nd it io ne d on th e DNR’s de te rm in at io n of wate rs he d

cap aci ty, an d th eref

or e a pp el la nt s ha ve no le gi ti m at e cl ai m to th e wate r whe n th e DNR de te rm in es th at th ere is a sc arci ty an d t h a t th e is su an ce of Cl os in g Not ic es is

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-ne ces sa ry to sa ti sf y th e ne ed s of se ni or ap pr op ria to rs

. See Id ah o Dep ’t of W at er Res

. Am en de d Fi na l Ord e r C r e at in g W at er Dis t. No. 17 0, 22 0 P.3 d 31 8, 33 1- 32 (Id ah o 20 09 ) (“ A wate r us er ha s no pr op ert y in te res t in be in g free fro m th e St at e’s reg ul at io n of wate r di st rib ut io n in acco rd an ce wi t h t h e pr io r ap pr op ria ti on do ct rin e

. . . .”).
Bec au se th e is su an ce of Cl os in g Not ic es do es no t im pa ct th e pr op ert y rig ht be st owe d by th e pe rm it to us e th e su rfac e wate r whe n th ere is su ffi ci en t cap aci ty, th e ap pe ll an ts

are no t de pr iv ed of th at pr op ert y rig ht

. W e a g r e e w i t h t he di st ric t co ur t th at
ap pe ll an ts ha ve no t su ffer e d a de pr iv at io n of th ei r pr op ert y rig ht s by th e DNR’s

act io ns , th us we do no t ad dr es s th e rem ai nd er of ap pe ll an ts ’ arg um en ts pe rta in in g to th ei r du e p ro ces s cl ai m s.

Fi na ll y , t h e d i s t ric t co ur t was pe rm it te d to di sm is s wit ho ut pr ejud ic e th e
pe nd en t s ta te -la w ul tra vi res cla im in li gh t o f it s g ran t o f su m m ary jud gm en t o n t he

se ct io n 19 83 cl ai m

. See Carn eg ie -Me ll on Uni v. v. Co hi ll
, 4 8 4 U

. S

. 3 43
, 35 0 n.7 (1 98 8) (“ [I]n th e us ua l cas e in whi ch al l fed eral -la w cl ai m s are el im in at ed be fo re tri al
, th e ba la nc e of fact or s to b e co ns id ered un de r th e pe nd en t juri sd ic ti on do ct rin e– jud ic ia l eco no m

y , co nv en ie nc e, fai rn es s, an d co m it y –wi ll po in t to ward de cl in in g to ex er c i s e ju r is di ct io n ov er th e rem ai ni ng st at e-l aw cl ai m s.”) ; Gib so n v. W eb er, 43 1 F.3 d 33 9, 34 2 (8 th Ci r. 20 05 ) (“Co ng res s un am bi gu ou sl y ga ve di st ric t

co ur ts di sc ret io n in 28 U

. S

. C. § 13 67 (c) to di sm is s su pp le m en ta l st at e la w cl ai m s whe n a ll fed eral cla im s h av e b een di sm is se d.” ).

III.

Acco rd in gl y , we affi rm

.

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