Opinion ID: 1275096
Heading Depth: 1
Heading Rank: 2

Heading: McKAY RESERVOIR WATER

Text: Teel contends that the Court of Appeals erred in concluding that the December 18, 1991, letter prohibiting Teel's use of McKay water was a final order and that Teel was time-barred from challenging it in circuit court. Teel argues that the December 18 letter was not a final order, because it was written by a watermaster who lacked authority to issue final orders and because the letter itself was tentative or preliminary and, therefore, lacked finality. ORS 183.310(5)(b). Teel also argues that, if the December 18 letter was a final order that Teel is time-barred from challenging, the department has violated Teel's due process rights under the Fifth and Fourteenth Amendments to the United States Constitution by depriving Teel of a protected property interest without notice and an opportunity to be heard. Finally, Teel argues that the February 5, 1993, letter is subject to judicial review, because the department issued it without probable cause and because substantial and irreparable harm will result if interlocutory relief is not granted. ORS 183.480(3). The department responds that the December 18, 1991, letter was a final order, as that term is defined in ORS 183.310(5)(b), and that Teel had 60 days from the date the order was served in which to challenge it. The department argues that, because Teel did not make a timely challenge, it is precluded from seeking judicial review of the decision to prohibit use of McKay water. The department further argues that the February 5, 1993, letter is not subject to judicial review, because it was not an order, but merely a confirmation of the December 18 final order. The issue is whether the circuit court had jurisdiction over Teel's 1993 petition for review of the department's 1991 ruling regarding McKay water. The Administrative Procedure Act (APA), ORS chapter 183, provides the jurisdictional basis for judicial review of the department's orders in this case. ORS 183.480 provides: (1) Any person adversely affected or aggrieved by an order or any party to an agency proceeding is entitled to judicial review of a final order, whether such order is affirmative or negative in form.         (3) No action or suit shall be maintained as to the validity of any agency order except a final order as provided in this section and ORS 183.482, 183.484, 183.490 and 183.500 or except upon showing that the agency is proceeding without probable cause, or that the party will suffer substantial and irreparable harm if interlocutory relief is not granted. In determining whether the December 18, 1991, letter was a final order, our first task is to consider what the legislature meant by the term final order. PGE v. Bureau of Labor and Industries, 317 Or. 606, 859 P.2d 1143 (1993) (In interpreting a statute, the court's task is to discern the intent of the legislature.). Because the legislature has defined final order in ORS 183.310(5)(b), our analysis of that question stops with the text of the APA itself. ORS 183.310(5)(b) defines final order as follows: `Final order' means final agency action expressed in writing. `Final order' does not include any tentative or preliminary agency declaration or statement that: (A) Precedes final agency action; or (B) Does not preclude further agency consideration of the subject matter of the statement or declaration. ORS 183.484, the jurisdictional provision for review of orders in other than contested cases, provides in part: (2) Petitions for review shall be filed within 60 days only following the date the order is served   . We initially address Teel's argument that the December 18, 1991, letter is not a final order, because its author, a watermaster, was not authorized to issue a final order. ORS 540.010 provides that the Water Resources Commission shall divide the state into water districts, and ORS 540.020 provides that the Water Resources Director shall appoint one watermaster for each water district. The director has general control over the watermasters. ORS 540.030(1). ORS 540.045(1)(a) provides that each watermaster shall: Regulate the distribution of water among the various users of water from any natural surface or ground water supply in accordance with the users' existing water rights of record in the Water Resources Department. ORS 540.045(4) defines existing water rights of record to include all completed permits. From the foregoing statutes, we conclude that ORS 540.045 authorizes the watermaster to issue final orders pertaining to a water user's rights under the terms of a permit. The December 18, 1991, letter, informing Teel that no stored water from McKay Reservoir will be allowed under permits 25920 and 25924, beginning with the 1991 irrigation season, communicated the watermaster's ruling on that subject. That is, the watermaster, acting on behalf of the department, was regulating Teel's use of water in accordance with Teel's existing water rights. We find no basis for concluding that the watermaster's statutory duty to regulate existing water rights does not include the authority to issue final orders. We next consider whether the December 18, 1991, letter was a final order. To resolve that matter, it is helpful to examine the context in which the letter was written. As noted, Teel had been using water from the Umatilla River and McKay since 1959 under two permits issued by the department. The purpose of the permits was to allow Teel to begin constructing diversion projects and the appropriation of water. It was anticipated that, when Teel completed the appropriation of water for a beneficial use, as evidenced by a final proof survey, Teel would obtain a certificate representing a vested, perfected water right. In December 1991, the department had completed, or was near completing, the final proof survey. The December 18 letter stated that the department was in the process of completing proposed certificates. Thus, in December 1991, Teel's status as a permittee was about to change to that of a holder of a perfected water right certificate. That examination of Teel's status as of December 1991 is important, because the question whether the December 18 letter was a final order subject to judicial review begs a further question, i.e., final as to what? There are two possibilities. First, the December 18 letter could have been a final order as to Teel's right to McKay water under the terms of the proposed certificate. Second, the letter could have been a final order as to Teel's right under the existing permits. If the December 18 letter was only a statement of Teel's rights under the proposed certificates, then the letter was not a final order subject to judicial review. As to unfinished proposed certificates, the December 18 letter was a preliminary statement of the department's position on Teel's use of McKay water, which preceded final agency action and which did not preclude further agency consideration of the subject matter of the statement or declaration. See ORS 183.310(5)(b) (defining final order). [6] However, the December 18, 1991, letter does not stop at stating what Teel's rights will be under the proposed certificates. It also states what Teel's rights are under the permits. The third paragraph of the letter states unequivocally: [N]o stored water from McKay Reservoir will be allowed under permits 25920 and 25924, beginning with the 1992 irrigation season. That paragraph constitutes a final order as to Teel's use of McKay water under the terms of the permits. It does not provide for any further agency consideration of the matter, short of the certification process. The paragraph clearly gave Teel notice that McKay water could not be used under the permits, beginning with the 1992 irrigation season. That notice is neither tentative nor preliminary. It constituted the department's final determination as to Teel's rights to McKay water under the permits. The December 18 letter was a final order as to Teel's rights to use McKay water under the permits. Teel, thus, had 60 days within which to petition for judicial review of that order. See ORS 183.484(2) (setting time limit). Teel's 1993 amended petition for judicial review did not challenge the department's proposed certificates. Rather, it challenged the department's determination as to Teel's rights under the permits. That challenge came too late. Teel could not obtain judicial review of the department's 1991 decision by seeking review of the February 5, 1993, letter. Teel also argues that to construe the December 18, 1991, letter as a final order that Teel may not now challenge would violate the Fifth and Fourteenth Amendments to the United States Constitution. Teel raises those constitutional issues for the first time before this court, and we decline to consider them. Teel argues that the department's February 5, 1993, letter is subject to judicial review under ORS 183.480(3). That letter, however, merely reiterates the department's 1991 position on Teel's use of McKay Reservoir water. The February 5 letter reads:  This letter is further confirmation that you may not use McKay Reservoir water on lands under permits 25920 and 25924. (Emphasis added.) Teel cannot revive its lost right to seek judicial review of the department's 1991 final order on the basis of a 1993 letter that merely reiterated the department's 1991 decision. See Carnine v. Oregon State Textbook Comm., 62 Or.App. 344, 349, 660 P.2d 201, rev. den. 295 Or. 259, 668 P.2d 381 (1983) (Petitioners cannot, under the guise of an attack on the 1979 decision, procure a de facto invalidation of the 1977 decision over which the circuit court did not have jurisdiction). The circuit court erred in setting aside what Teel argued was an order contained in the department's February 5 letter, and the Court of Appeals correctly reversed that portion of the circuit court's judgment. We agree with the Court of Appeals that the circuit court did not err in setting aside the department's May 1993 order. The department failed to challenge the third basis for the circuit court's decision: that the department's long-standing interpretation of the law is a rule, which cannot be changed without following rule making procedures. The department, therefore, is not entitled to reversal of the circuit court's decision on plaintiff's second claim seeking review of the May 1993 order limiting use of water to acreage specifically described in the permits. [7] However, we also agree with the Court of Appeals that an injunction is unwarranted in this case and that the circuit court erred in entering an injunction against the department. See Burke v. Children's Services Division, 288 Or. 533, 548, 607 P.2d 141 (1980) (refusing to assume that a state agency will, in the absence of an injunction, refuse to follow the law). The decision of the Court of Appeals on plaintiff's first claim (alternate acreage) is vacated as moot. Otherwise, the decision of the Court of Appeal is affirmed. The judgment of the circuit court is affirmed in part and reversed in part.