Case Name: Edith M. THAYER, a/k/a Edith Thayer, Individually and as Executrix of the Estate of Sid Thayer, Bruce L. Thayer, Joan L. Thayer, Herbert F. Luthy, Richard D. Howieson and Pearl Irene Howieson, Appellants (Some of defendants below), v. CITY OF RAWLINS, a Wyoming Municipal Corporation, Appellee (Plaintiff below)
Court: Supreme Court of Wyoming
Jurisdiction: Wyoming
Decision Date: 1979-05-04
Citations: 594 P.2d 951
Docket Number: No. 4991
Parties: Edith M. THAYER, a/k/a Edith Thayer, Individually and as Executrix of the Estate of Sid Thayer, Bruce L. Thayer, Joan L. Thayer, Herbert F. Luthy, Richard D. Howieson and Pearl Irene Howieson, Appellants (Some of defendants below), v. CITY OF RAWLINS, a Wyoming Municipal Corporation, Appellee (Plaintiff below).
Judges: Before RAPER, C. J., and McCLIN-TOCK, THOMAS, ROSE and ROONEY, JJ.
Reporter: Pacific Reporter 2d
Volume: 594
Pages: 951–964

Head Matter:
Edith M. THAYER, a/k/a Edith Thayer, Individually and as Executrix of the Estate of Sid Thayer, Bruce L. Thayer, Joan L. Thayer, Herbert F. Luthy, Richard D. Howieson and Pearl Irene Howieson, Appellants (Some of defendants below), v. CITY OF RAWLINS, a Wyoming Municipal Corporation, Appellee (Plaintiff below).
No. 4991.
Supreme Court of Wyoming.
May 4, 1979.
John A. MacPherson, and Catherine L. Dirck, Legal Intern, MacPherson, Golden & Brown, Rawlins, for appellants.
Steve D. Noecker, of Johnson & Noecker, Rawlins, and Frank J. Trelease, Stough-house, Cal., for appellee.
Before RAPER, C. J., and McCLIN-TOCK, THOMAS, ROSE and ROONEY, JJ.

Opinion:
ROSE, Justice.
This appeal concerns the rights of the defendant water users to effluent water discharged by the City of Rawlins. By virtue of water rights dating from 1900, the City of Rawlins has imported all of its municipal water supplies from the North Platte River and from Sage Creek, a tributary of the North Platte River. After using the water for municipal purposes, the City has historically discharged the resulting effluent into a channel, known as Sugar Creek, which connects with the North Platte River. In the past, the point of this discharge was above the points at which the defendants diverted the effluent for irrigation, stock water and other purposes. Defendants diverted the effluent pursuant to certificates of appropriations giving them priorities to the Sugar Creek effluent dating from 1914. To be in compliance with state and federal water-quality laws, the City must now meet certain minimum-quality standards before discharging water into Sugar Creek. To meet these standards, the City of Rawlins proposes to establish an aerated lagoon system at a location which will cause the purified water to reach Sugar Creek at a point below the defendants' point of diversion. In an effort to determine the legal effect of this proposal, the City sought and was granted a judgment declaring that the defendants were not entitled to compensation for the loss of this water. We will affirm the district court's judgment.
Certain aspects of this case justify a full and detailed explanation of the facts. According to an Agreed Statement of Facts, the City acquired water rights, in 1923, to water originating at the headwaters of Sage Creek, a tributary of the North Platte River. Thereafter, water wells — previously providing the City with water — were abandoned, and the City became totally dependent on the Sage Creek-North Platte water. This water, which is piped some 32 miles to the City, was supplemented by additional water rights obtained in 1966. The remainder of the water supplied to the City is by virtue of a water right obtained by assignment from the Union Pacific Water Company in 1964. This water is transported some 16 miles from the North Platte River to the City through another pipeline.
It is agreed that Sugar Creek consists of a channel which heads some 16 miles west of Rawlins. The channel parallels the south side of the Union Pacific Railroad from a point west of the City to a point about 4 miles east of Rawlins, where it bends north across the railroad and meanders northeasterly, eventually emptying into the Platte River. Originally, the channel of Sugar Creek was used as an open sewer for parts of Rawlins. Subsequently, sanitary sewer mains were installed and the sewage was carried to a point east of Rawlins where it was again disgorged into the Sugar Creek channel. Since the City began disgorging its waste waters into Sugar Creek, the defendants perfected certificates of appropriations, claiming the right to use water out of Sugar Creek at points below where the City disgorges its sewage.
Evidence adduced at trial indicates that whatever flow of water occurred in Sugar Creek below the City was attributable to the City's discharge of sewage. From April to October of each year, this discharge would amount to a daily average of 2.76 cubic-feet-per-second of water. Above the City, a flow occurred in Sugar Creek only after a rainstorm or during snow-melt. The City's expert classified Sugar Creek above the City as an ephemeral stream, or one that runs only in direct response to rainfall and high snow-melt events and not as a result of ground-water flow. In the 1930's, a diversion dam was constructed— apparently without approval of State authorities — which directs this flow into an area known as Hogback Lake. At trial, the City stipulated that it would not object to actions taken to prevent this flow from entering Hogback Lake or to the restoration of the natural channel of Sugar Creek for this purpose.
It is noted that the State of Wyoming was originally a named party to this suit. At trial, the City and the State of Wyoming stipulated that the State would withdraw from the action conditioned on the City's agreement that it would continue to discharge intermittently into Sugar Creek a majority of the sewage effluent it historically discharged into Sugar Creek, and that such waters would be available to water users downstream from the City's point of discharge, as well as to satisfy effluent appropriations in the North Platte River. When asked by the court whether this withdrawal carried the connotation that the State Engineer didn't want to administratively be involved in this matter, the attorney for the State responded that the State had jurisdiction over the use of the natural waters of the State and that this would go to the City's use of the water in question.
It is also noted that the City, in 1922, conveyed by deed all rights to water passing through the sewer pipe and reaching a 20-acre parcel of land, presently owned by Walter Olson and Olson Sisters Corporation, described in a State Engineer Certificate of Appropriation. The City admitted its obligation under this deed.
Subject to the above-mentioned stipulations, the district court found that Sugar Creek was not a natural stream and, therefore, the defendants' appropriations were invalid and did not entitle them to compensation by reason of the City's proposed actions. The court found that the City had the power to recapture all of its future sewage for the purpose of disposing of in it any manner it deemed appropriate. Finally, the court found that the State Engineer had no jurisdiction over the Rawlins facilities or the water in question, and that his approval was not required for the planned changes.
Defendants state their position as follows:
"I. The State Engineer and State Board of Control have jurisdiction over the proposed Rawlins facilities and waters of Sugar Creek which must be invoked before judicial determination is proper.
"II. Defendants have vested property rights that are established in Wyoming water law and are entitled to compensation before those water rights are taken away."
ENTITLEMENT TO COMPENSATION
Defendants premise their claim to compensation on the belief that Sugar Creek below the City of Rawlins has, due to the passage of a long period of time, become a natural stream subject to appropriation, thus entitling the defendants to protections afforded to other holders of water rights in the state.
Defendants also assert that Sugar Creek above the City is a natural stream. Frankly, we fail to see the importance of classifying the portion of Sugar Creek that lies above Rawlins. The extent to which the defendants have a right or interest in this upper flow of water is not at issue in this case. To the extent that they have a right to such waters — a question we do not here decide — the City has agreed not to interfere with a restoration of the natural channel of this portion of Sugar Creek. The importance of classifying Sugar Creek above the City is further lessened when it is realized that the water, for which defendants seek compensation, is derived solely from discharges that have their source in the North Platte River and tributaries thereof. These waters are entirely distinct from those, if any, originating in the Sugar Creek drainage basin above the City of Rawlins.
While it is true that these defendants have acquired certificates of appropriations, indicating a right to waters contained in Sugar Creek, we find that the validity of these permits — for purposes of protection from the City's proposed actions, and compensation — turns on an analysis of the parties' relative rights to the use of these imported waters. If the City, insofar as these defendants are concerned, has the unrestricted right to change its use and the point of discharge of these imported waters, then it matters little that these defendants hold water permits or have relied on these waters in the past for irrigation and other purposes. The issue of whether Sugar Creek has become a natural stream loses its importance in this context. If the City has the unrestricted right referred to above, then — with the possible exception of its relationship to certain jurisdictional matters — the determination of whether Sugar Creek below the City is a natural stream would be a resolution of a nonissue.
More than fifty years ago, this court stated, in Wyoming Hereford Ranch v. Hammond Packing Company, 33 Wyo. 14, 236 P. 764, 772 (1925):
". . . Even in this state, where the conservation of water for irrigation is so important, we would not care to hold that in disposing of sewage the city could not adopt some means that would completely consume it. It might, we think, be diverted to waste places, or to any chosen place where it would not become a nuisance, without any consideration of the demands of water users who might be benefited by its disposition in some other manner. . . . "
While we may not rely on the Wyoming Hereford Ranch decision for a disposition of the present case — due to significant factual distinctions — it is somewhat prophetic with respect to the clash, between concepts of western water law and the directives of environmental-protection statutes, now before us. We will not, however, attempt to decide all of the potential questions that are bound to arise as the demands for cleaner environment begin to impinge on the availability of sufficient supplies of water. For example, we are not asked in this case to theorize with respect to the rights of water users on the North Platte River in the event that the City had gone ahead with its original plan to entirely consume, through treatment, the waters it imports from the North Platte and its tributaries. These questions and others related thereto are bound to arise, but it is important to understand that they are not now before the court. See, gen., Comment, "Water Law — Cessation of Return Flow as a Means of Complying With Pollution Control Laws," 12 Land & Water L.Rev. 431 (1977); and Muys, "Quality v. Quantity: The Federal Water Pollution Control Act's Quiet Resolution in Western Water Rights Administration," 23 Rocky Mt.Min.L.Inst. 1013 (1977). As a result, our discussion and disposition of this case will be narrowly drawn.
The fundamental question becomes: Do the defendants have a right to compensation for a loss occasioned by the City's change in the point of discharge of imported waters? It has been stated that generally junior appropriators have vested rights in a continuation of stream conditions existing at the time of their appropriations, thus entitling them to resist changes in points of diversion or use which materially affect their rights. See, Farmers Highline Canal & Reservoir Co. v. City of Golden, 129 Colo. 575, 272 P.2d 629 (1954); and § 41-3 — 104, W.S.1977. However, an importer of water — at least insofar as these defendants are concerned — has the right to reuse, successively use and make disposition of imported waters. See, City and County of Denver Board of Water Commissioners v. Fulton Irrigating Ditch Company, 179 Colo. 47, 506 P.2d 144 (1972). Even though, at the time of the Fulton Irrigation Ditch decision, there was a statute authorizing the conclusion reached, the Colorado Supreme Court opined that the rule would be the same without the statute, subject to contrary contractual obligations. 506 P.2d at 147..
The right of the City to use such imported waters finds its roots in the common law of property and the Puritan ethic: One who by his own effort adds to the supply of a stream, is entitled to the water even though a senior priority might be without water. A person should reap the benefit of his own efforts, and a priority relates only to the natural supply of the stream at the time of appropriation. Clark, "Background and Trends in Water Salvage Law," 15 Rocky Mt.Min.L.Inst. 421, 434 — 144 (1969).
These concepts are not new to Wyoming water law, since they have been applied to protect the right of a senior appropriator to recapture waste and seepage water. See, Binning v. Miller, 55 Wyo. 451, 102 P.2d 54 (1940); and Bower v. Big Horn Canal Association, 77 Wyo. 80, 307 P.2d 593 (1957). See gen., Clark, supra, at 459 — 460; Burkart v. Meiberg, 37 Colo. 187, 86 P. 98 (1906); Green Valley Ditch Co. v. Schneider, 50 Colo. 606, 115 P. 705 (1911); and Tongue Creek Orchard Co. v. Town of Orchard City, 131 Colo. 177, 280 P.2d 426 (1955). The lower landowner using such water merely takes his chances as to future supplies, no matter how long he uses such water. Binning v. Miller, supra, 102 P.2d at 60.
Defendants seem to want this court to declare that the City has abandoned its right to make a change in the point of discharge of these imported waters. We indicated in Binning v. Miller, supra, that if the senior appropriator had allowed the lower landowner to use waste water for 35 years, but then legitimately began to use it himself, the lower landowner would have no right to complain — "The water is always different from year to year." 102 P.2d at 62. See, also, Stevens v. Oakdale Irrigation District, 13 Cal.2d 343, 90 P.2d 58 (1939). This question, in its broad sense, was raised but not answered in the Fulton Irrigation Ditch case, supra. See, gen., Williams, "Optimizing Water Uses: The Return Flow Issue," 44 U.Colo.L.Rev. 301, 318-321 (1973). We hold that in the imported-water context — which gives the importer the unre stricted right to reuse, successively use and make disposition — the importer's right to do these things is not subject to abandonment insofar as these defendants are concerned. It must be remembered that any other holding would be inconsistent with the fact that the defendants depend entirely on the City's sufferance — it is always free to terminate the importation. Under such circumstances, we are reluctant to declare an abandonment. This is particularly true in light of the fact that the City, as early as 1922, recognized its right to convey its rights in the effluent by deed. We would suggest that such a transaction places the user in a much more solid position. See, Williams, supra, at 321; and Wyoming Hereford Ranch v. Hammond Packing Co., supra.
JURISDICTION
Defendants assert that the State Engineer and the State Board of Control have authority to resolve their conflict with the City under Article 8, Wyoming Constitution , and three sets of statutory provisions: (1) Section 41-3-104, W.S.1977, dealing with changes of use or places of use; (2) section 41-3-305, W.S.1977, deal ing with the storage of direct-flow water rights; and (3) section 41-3-615, W.S.1977, dealing with the construction of diversion dams.
These propositions are, in part, based on the belief that Sugar Creek is a "natural stream" above and below the City of Raw-lins. As noted previously, we view it as irrelevant that Sugar Creek above the City might be considered a "natural stream." To the extent that it is somehow important, the defendants are faced with an adverse factual finding which we are not inclined to overrule.
With regard to Sugar Creek below the City, the defendants may well be correct that it is a natural stream. See, Binning v. Miller, supra, 102 P.2d at 60. Assuming, arguendo, that this is true, does this automatically give the State Engineer or the Board of Control jurisdiction over this controversy? We think not. As noted previously, the City — insofar as these defendants are concerned — has the unrestricted right to reuse, successively use, and make disposition of the imported waters in question. Unless there is some statutory provision to the contrary, there is nothing for the State Engineer or the Board to consider — there is only an application of certain legal principles which is within the function of the courts.
We turn, then, to the statutory provisions which purportedly vest the State Engineer or Board of Control with primary jurisdiction over the City's proposed actions. Defendants claim that the City's water-treatment proposal constitutes either a change or expansion in use — because the water will be used as a purifying agent, instead of only as a flushing agent — or a change in the • place of use, because the sewage will be transported for treatment to a place outside the city limits. The City, on the other hand, contends that there will be no change in use since the use will still be for municipal purposes, and that the place of use will remain with the City of Rawlins. The only change, according to the City, is a change in the place of discharge.
The difficulty in attempting to classify the changes required by water-pollution-control laws has been noted. Comment, supra, 12 Land & Water L.Rev. 431, 448. The Colorado Supreme Court has indicated that changes in points of discharge of sewage are not governed by the same rules as changes in points of diversion. Metropolitan Denver Sewage Disposal District No. 1 v. Farmers Reservoir and Irrigation Company, Colo., 499 P.2d 1190, 1193 (1972). See, City of Boulder v. Boulder & Left Hand Ditch Co., Colo., 557 P.2d 1182, 1185-1186 (1976). This conclusion has, in turn, been severely criticized. Williams, supra, at 304-311. We find no need, however, to put a label on what the City of Rawlins proposes to do, in order to determine whether the City must file a petition under § 41-3-104, supra.
The purpose of § 41-3 — 104, supra, is to provide a procedure for those wishing to change a water right and to place limitations on the quantity of water that can be transferred. Basin Electric Power Cooperative v. State Board of Control, Wyo., 578 P.2d 557, 561 (1978). We must ask why the City's proposal should be subjected to these procedures. The manifest result of a § 41-3-104 proceeding is the entry of a Board of Control order limiting the amount of water transferred by a change in use or a change in the place of use. Insofar as these defendants are concerned, we have already held that the City has the unrestricted right to reuse, successively use and make disposition of these imported waters. If these rights are not subject to restriction, it would be anomalous to require the City to submit to a procedure that assumes that restrictions are permissible and, indeed, required. As a result, we hold that the State Engineer and Board of Control have no jurisdiction, by virtue of § 41-3-104, supra, over the controversy between these parties.
Next, defendants would rely on § 41-3-305, supra. This statute requires Board of Control approval prior to the storage of water by a direct-flow appropriator. Defendants assert this will occur by virtue of the City's impoundment of the sewage in aerating lagoons for treatment. Simply stated, we find no indication of legislative intent that this provision should apply to the temporary holding of effluent waters for water-treatment purposes, especially when all of those waters are imported.
Finally, defendants rely on § 41-3-615, supra. This statute requires State Engineer approval prior to the construction of a diversion dam "to retain water above ten (10) feet in height." The uncontradicted evidence at trial was that, depending on how the holding ponds were constructed, water would be retained at an average height of five feet. Notwithstanding the fact that we fail to see how this provision relates to the question of compensation, the defendants have failed to prove its applicability.
We hold that the State Engineer and Board of Control have no jurisdiction of the controversy between these parties, nor do we see any reason in this case to draw upon the expertise of those agencies.
Affirmed for the reasons stated herein.
. We note at this point that due to the unique circumstances of this case — namely, that the defendants' use is dependent solely on the water imported by the City — there is no reason to apply the indispensable-party analysis contained in State v. Husky Oil Company of Delaware, Wyo., 575 P.2d 262 (1978).
. We will discuss the defendants' issues in reverse order, because our holding on the second issue is largely dispositive of the first issue.
. Article 8, Wyoming Constitution, provides:
"IRRIGATION AND WATER RIGHTS
"Sec. 1. Water is state property. — The water of all natural streams, springs, lakes or other collections of still water, within the boundaries of the state, are hereby declared to be the property of the state.
"Sec. 2. Board of control. — There shall be constituted a board of control, to be composed of the state engineer and superintendents of the water divisions; which shall, under such regulations as may be prescribed by law, have the supervision of the waters of the state and of their appropriation, distribution and diversion, and of the various officers connected therewith. Its decisions to be subject to review by the courts of the state.
"Sec. 3. Priority of appropriation. — Priority of appropriation for beneficial uses shall give the better right. No appropriation shall be denied except where such denial is demanded by the public interests.
"Sec. 4. Water divisions. — The legislature shall by law divide the state into four (4) water divisions, and provide for the appointment of the superintendents thereof.
"Sec. 5. State Engineer. — There shall be a state engineer who shall be appointed by the governor of the state and confirmed by the senate; he shall hold his office for the term of six (6) years, or until his successor shall have been appointed and shall have qualified. He shall be president of the board of control, and shall have general supervision of the waters of the state and of the officers connected with its distribution. No person shall be appointed to this position who has not such theoretical knowledge and such practical experience and skill as shall fit him for the position."
. Section 41-3-104, W.S.1977, provides:
"(a) When an owner of a water right wishes to change a water right from its present use to another use, or from the place of use under the existing right to a new place of use, he shall file a petition requesting permission to make such a change. The petition shall set forth all pertinent facts about the
existing use and the proposed change in use, or, where a change in place of use is requested, all pertinent information about the existing place of use and the proposed place of use. The board may require that an advertised public hearing or hearings be held at the petitioner's expense. The petitioner shall provide a transcript of the public hearing to the board. ' The change in use, or change in place of use, may be allowed, provided that the quantity of water transferred by the granting of the petition shall not exceed the amount of water historically diverted under the existing use, nor exceed the historic rate of diversion under the existing use, nor increase the historic amount consumptively used under the existing use, nor decrease the historic amount of return flow, nor in any manner injure other existing lawful appropriators. The board of control shall consider all facts it believes pertinent to the transfer which may include the following:
"(i) The economic loss to the community and the state if the use from which the right is transferred is discontinued;
"(ii) The extent to which such economic loss will be offset by the new use;
"(iii) Whether other sources of water are available for the new use.
"(b) In all cases where the matter of compensation is in dispute, the question of compensation shall be submitted to the proper district court for determination."
.Section 41-3-305, W.S.1977, provides:
"The holder or owner of an adjudicated water right to the direct use of the natural unstored flow of any surface stream of the state may store such direct flow so long as no other Wyoming appropriator or user is injured or affected thereby. Prior to the commencement of the storage of water under a direct flow water right, the appropriator shall submit a request for such storage in writing to the state engineer and shall obtain the approval of the state board of control. The state board of control may permit storage at any time so long as there is no inter ference with existing water rights or uses. The state engineer is authorized and empowered to prescribe such rules and regulations as may be necessary or desirable to enable him to effectively administer the provisions of this section."
. Section 41-3-615, W.S.1977, provides:
"Duplicate plans for any diversion dam across the channel of a running stream, above five (5) feet in height, or of any other diversion dam intended to retain water above ten (10) feet in height, shall be submitted to the state engineer for his approval, and it shall be unlawful to construct such a diversion dam until the said plans have been approved."