Opinion ID: 1162719
Heading Depth: 3
Heading Rank: 1

Heading: The Initiation of the Adjudication

Text: The SLD and the Arizona Department of Water Resources (DWR) [5] compiled a mailing list for the service of the summons by translating United States Geological Survey topographical maps of the watershed areas into assessor format. The Arizona Department of Revenue (DOR), the central depository for county assessors' real property records, took the assessor-format list and developed a list of the names and addresses of all property owners in the watersheds. The summons was sent via certified mail, return receipt requested, as mandated by A.R.S. § 45-253(A)(2), [6] to each person on this mailing list. See, e.g., San Pedro River Watershed Water Rights Adjudication Notification Process Report, WC-79-0001 to -0004, consolidated, Docket No. 1155, at 3 (hereinafter San Pedro Notification Report). [7] A notification package, which included, inter alia, a copy of the summons and a statement of claimant form, was also sent by certified mail to federal, state, and local governments and agencies, Native American communities, and irrigation districts within the watersheds. Id. at 3, 6. Finally, all well owners of record and all known holders of water rights within the watersheds were sent, among other information, instructions relating to the adjudication process and a statement of claimant form via first class mail. Id. at 7. [8] Together, SLD and DWR mailed over 849,000 summons informing recipients of the pendency of the adjudication and notifying them of the procedure for submitting their water rights claims. This mailing constituted the statutorily-mandated notification of all known potential claimants. A.R.S. § 45-253(A)(2); see also former A.R.S. §§ 45-232, 45-234, 45-235. [9] SLD and DWR also provided notice of the adjudication by publication. See A.R.S. § 45-253(B); former A.R.S. § 45-232. Various legal notices were published in newspapers in communities in or near the watershed areas. For the San Pedro River adjudication, for example, the following notices were among those published (including, in parentheses, the number of consecutive weeks of once-a-week publication): 1. Statement of initiation of adjudication (two weeks). 2. Rules, dates, and places for taking testimony ( i.e., submitting statements of claimant) (two weeks). 3. Order extending filing deadline and setting subsequent places for submitting statements of claimant (four weeks). 4. Extension of filing deadline (four weeks) 5. Republication of summons, prior orders (four weeks). San Pedro Notification Report at 3-6. Persons who received the summons  as well as persons who otherwise received actual notice of the adjudication  and who did not submit statements of their claims before the applicable deadline now may be precluded by statute from asserting any claims to rights in the adjudicated watersheds. See A.R.S. § 45-254(E). [10] The statutory treatment of persons who did not receive actual notice of the pending adjudication is more lenient: such persons may intervene in the adjudication by filing their claims within one year of the deadline for the filing of claims by persons with actual notice. See id. [11]
The issue of due process arises because those persons who did not receive actual notice of the adjudication may, under § 45-254(E), lose claims to water rights without having an opportunity to defend their claims. Water rights are property rights. 6 Edward Clyde, Waters and Water Rights § 530 (R. Clark ed. 1972); A. Dan Tarlock, Law of Water Rights and Resources § 7.06[1][b] (1991); 93 C.J.S. Waters § 1 (1956 & Supp. 1991); id. § 181 (although a water right may be incorporeal, and only a right to the use of the water, it is, nevertheless, a private property right which will be treated and protected as such); see also Gillespie Land & Irrig. Co. v. Buckeye Irrig. Co., 75 Ariz. 377, 257 P.2d 393 (1953). Consequently, holders of water rights are constitutionally entitled to due process in any adjudication that could deprive them of those rights. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 656-57, 94 L.Ed. 865 (1950) (deprivation of ... property by adjudication [must] be preceded by notice and opportunity for hearing appropriate to the nature of the case); Mervyn's Inc. v. Superior Court, 144 Ariz. 297, 300, 697 P.2d 690, 693 (1985) ([A]ny procedure which deprives an individual of a property interest must satisfy due process.). Notice is sufficient for due process purposes if it is reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections or claims. Mullane, 339 U.S. at 314, 70 S.Ct. at 657. In Mullane, the Supreme Court considered a statute permitting notice by publication to beneficiaries concerning an accounting of their interests in a common pool of 113 trusts. Id. at 307-310, 70 S.Ct. at 654-55. The Court held that due process required notice by mail to all beneficiaries who could be located through reasonable efforts.
In the present case we have no doubt that the notice of the adjudication was constitutionally sufficient as to those potential claimants who received the summons by certified mail. Of more concern are those property owners who, for one reason or another, did not receive a summons by mail. We are convinced, however, that these persons were accorded due process through the notices published in the newspapers. Although notice by publication is not sufficient due process for persons whose identity and address could be established through reasonable efforts, Mullane, 339 U.S. at 318, 70 S.Ct. at 659, publication notice is sufficient for those persons whose interests or whereabouts could not with due diligence be ascertained. Id. at 317, 70 S.Ct. at 659. SLD and DWR's efforts in assembling the mailing list and serving 849,000 summons on all record owners of property in the watersheds meet the standard of due diligence and demonstrate that the agencies' endeavors to notify interested persons went far beyond mere pretense. See id. at 315, 70 S.Ct. at 657 ([P]rocess which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.). Cf. Pioneer Fed. Sav. Bank v. Driver, 166 Ariz. 585, 589, 804 P.2d 118, 122 (Ct.App. 1990) (publication notice insufficient where mortgagee failed to consult readily available sources for mortgagor's address before obtaining default deficiency judgment).
The Opponents argue that the procedures for notifying potential claimants were constitutionally infirm because holders of liens on real property with appurtenant water rights  potential claimants whose identities were reasonably ascertainable  were not included on the mailing list for the service of the initial summons. We disagree. The United States Supreme Court has held that a reasonably identifiable mortgagee is entitled to personal service or mailed notice informing it of a pending tax sale and of its statutory redemption right. Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983). We recognize that mortgagees and other lienors have a property right, the value of which could be diminished by the loss of water rights appurtenant to the encumbered property, and that they are therefore entitled to due process under Mennonite. Once it is determined that due process applies, the question remains what process is due. Goss v. Lopez, 419 U.S. 565, 577, 95 S.Ct. 729, 738, 42 L.Ed.2d 725 (1975) (quoting Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 2600, 33 L.Ed.2d 484 (1972)). Because the decision in Mennonite was controlled by the analysis in Mullane,  Mennonite, 462 U.S. at 798, 103 S.Ct. at 2711, we look to Mullane to determine whether, under the circumstances, the mortgagees and other lienholders who received notice by publication were accorded due process. See Rosewell v. Chicago Title & Trust Co., 99 Ill.2d 407, 76 Ill.Dec. 831, 834, 459 N.E.2d 966, 969 (1984) (construing  Mennonite as a decision in line with Mullane  and focusing on the adequacy of the procedural requirements of Illinois' tax sale statute), appeal dismissed, 467 U.S. 1237, 104 S.Ct. 3503, 82 L.Ed.2d 813 (1984). Mullane held, as we have recognized above, that due process requires that notice be reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action. 339 U.S. at 314, 70 S.Ct. at 657, quoted in Dixon v. Picopa Constr. Co., 160 Ariz. 251, 261, 772 P.2d 1104, 1114 (1989). Mullane cautioned, however, that [a] construction of the Due Process Clause which would place impossible or impractical obstacles in the way could not be justified. Mullane, 339 U.S. at 314, 70 S.Ct. at 647. We believe that requiring SLD and DWR to search title records for the names of all mortgagees and lienholders on approximately 800,000 parcels of land, and then to mail the initial summons to all of them, would have constituted an unreasonable burden. See Rosewell, 76 Ill.Dec. at 833-34, 459 N.E.2d at 968-69 (The names and addresses of the party against whom the taxes were last assessed is readily available in the county tax records; the addresses of all mortgagees, lienholders and other interested parties can only be ascertained by costly and time-consuming title searches on the 121,000 delinquent parcels of land.). Cf. Schroeder v. New York, 371 U.S. 208, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962) (publication notice insufficient for due process where owner of condemned property readily determinable from deed and tax records). For the mortgagees and other lienors, notice by publication met the requirements of due process. [12]
The Opponents also argue that another group of potential claimants  lessees of state and federal land and government permit holders  were denied due process because their identities were reasonably ascertainable yet they were not specifically included on the mailing list for the service of the initial summons. We do not agree. First, most or all lessees and permittees of the federal government were likely to have been included on the SLD and DWR mailing lists of real property owners because federal regulations make ownership of private base property a prerequisite to the receipt of grazing and livestock permits. See 43 C.F.R. §§ 4110.1, 4110.2-1 (1990) (Bureau of Land Management regulations); 36 C.F.R. §§ 222.1(b)(3), 222.3(c) (1990) (Forest Service regulations); Garcia v. Andrus, 692 F.2d 89, 91 (9th Cir.1982) (discussing base property). Second, we have balanced the uncertain and, at most, derivative interests of such persons in the water rights adjudication against the difficulty and expense of identifying and serving them. See Tulsa Professional Collection Servs. v. Pope, 485 U.S. 478, 484, 108 S.Ct. 1340, 1344, 99 L.Ed.2d 565 (1988) (The focus is on the reasonableness of the balance, and, as Mullane itself made clear, whether a particular method of notice is reasonable depends on the particular circumstances.); Mullane, 339 U.S. at 314, 70 S.Ct. at 657 (balancing state's interest in its notice procedures against individual interest to be protected by due process). We conclude that in these circumstances publication notice to lessees and permittees was sufficient for due process. See Mullane, 339 U.S. at 317, 70 S.Ct. at 659 (not unreasonable for the State to dispense with more certain notice to those [interested persons] whose interests are either conjectural or future); see also Matter of Rights to Use Waters of Yakima River, 100 Wash.2d 651, 674 P.2d 160 (1983) (due process does not require service of process on all individual water users who receive water from distributing entities; service on those entities sufficient).
The issue of notice for due process purposes is not merely a question of the mode of notification employed. Due process also requires that the notice be of such nature as reasonably to convey the required information. Mullane, 339 U.S. at 314, 70 S.Ct. at 657. That is, the content of the notice must be sufficient to apprise interested parties of the pendency of the action and to make them aware of the opportunity to present their objections. Id. We believe that the summons more than adequately informed potential claimants of the nature of the proceedings. The summons opened, for instance, with the following statement: You are hereby summoned and required to appear and to assert any claims to water that you may have in the Lower Gila River Watershed, on or before January 20, 1987. The above action is a general adjudication of rights to use water in the Gila River System and Source in which all rights to use water appropriable under A.R.S. Sec. 45-131 and water subject to claims based upon federal law will be determined pursuant to Sec. 45-251 et seq. [13] The summons also contained basic information on the purpose and scope of the adjudication, instructions on acquiring and filing the forms for statements of claimant, notice that failure to file such statements would result in claim preclusion, the deadline for filing, and references to the statutory bases for the adjudication. See Closed Basin Landowners Ass'n v. Rio Grande Water Conserv. Dist., 734 P.2d 627, 633-34 (Colo. 1987) (content of published summary of filings sufficient notice under Mullane ). The Opponents argue that the content of the notice afforded potential claimants was constitutionally deficient for two reasons: first, because the summons did not inform potential claimants of rights to effluent and groundwater that such claims might be subject to the adjudication; and second, because the summons did not provide sufficiently specific information about the issues they would be required to litigate.
The Opponents argue that the summons was deficient because it did not specify that the rights of those treating, producing, or utilizing effluent could be affected by the adjudication. It is true that the summons did not specifically mention effluent, but we do not believe it follows that the summons was therefore constitutionally inadequate. The summons stated that the general adjudication would determine all rights to use water appropriable under [then] A.R.S. Sec. 45-131. Section 45-131, which has since been renumbered as § 45-141, [14] provided that: The waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels, whether perennial or intermittent, flood, waste or surplus water, and of lakes, ponds and springs on the surface, belong to the public and are subject to appropriation and beneficial use.... (Emphasis added.) [15] We believe that the reference in the summons to all rights to use water appropriable under A.R.S. Sec. 45-131, coupled with that section's provision that waters of all sources ... are subject to appropriation, was sufficient to put effluent users on notice that the right to use effluent was subject to this adjudication and that such users should file their claims.
We also reject the Opponents' contention that the summons provided inadequate notice to potential claimants of rights to use groundwater. The summons specifically instructed that all groundwater users should inform the Court of their groundwater use on the appropriate court-approved statement of claimant form to defend that use in the event that other claimants assert that the groundwater is either appropriable under A.R.S. Sec. 45-131 or subject to claims based upon federal law. [16] In addition, the instructions accompanying the statement of claimant forms explicitly stated that all groundwater users should file claims. Assuming that groundwater users were constitutionally entitled to notice, they were sufficiently notified of the need to file claims. The Opponents argue further that the notice was inadequate to inform owners of real property that this adjudication might adversely impact the right to develop and use such groundwaters at some future date, and that they should therefore file statements of claimant forms. Separate Brief on behalf of Arizona Public Service Co., Magma Copper Co., and Farmers Investment Co. at 4. In support of this argument, the Opponents point out that the summons refers to groundwater users, implying current rather than current and future groundwater users. They also point to language in DWR's instructions for filing statement of claimant forms that might have dissuaded this group of potential future users from filing claims: Should a claim be filed for some potential future use? No. Under the Arizona system of water law, water rights cannot be established or reserved for some potential future use. Water rights can only be established through proper legal appropriation and putting the water to actual beneficial use. Id. at 10. We do not believe this rendered the summons inadequate. First, it would hardly have been possible for the drafters of the summons to predict and account for the consequences of every potential future legal determination, or to recognize and address directly every subset of potential water claimants. Cf. Mullane, 339 U.S. at 317, 70 S.Ct. at 659 (not unreasonable for the State to dispense with more certain notice to those [interested persons] whose interests are either conjectural or future). Second, we believe that the instructions contain a correct statement of the law and were not misleading. Appropriative water rights are based on current beneficial use, not reservation for future uses. See A.R.S. § 45-141(B) (Beneficial use shall be the basis, measure and limit to the use of water.). Consequently, real property owners claiming a right to use underground water at some future time would  absent present beneficial use or a claim based on federal law  have no appropriative claims to assert in the adjudication. Finally, the summons informed property owners that the legal issue of when underground water is appropriable might be litigated in the adjudication. The instructions merely recited the then current state of the law: Arizona law recognized no right to reserve water for some potential future use. See John D. Leshy & James Belanger, Arizona Law Where Ground and Surface Water Meet, 20 Ariz. St.L.J. 657, 698 (1988). Those wishing to contest that general principle were not asserting a right to property; Arizona law recognized no such property right. See id.; Town of Chino Valley v. City of Prescott, 131 Ariz. 78, 82, 638 P.2d 1324, 1328 (1981). Those wishing to contest the validity of the general law or argue for a change were  and are  free to petition to intervene or to appear as amicus and present their arguments. Having no legally recognized property right in potential, future groundwater use, they have no due process rights of which they can be deprived by the summons or the instructions which accompanied it.
The Opponents' final due process argument regarding the summons is that the notice to all potential claimants was constitutionally inadequate because the summons did not adequately inform them of the specific issues they must be prepared to meet. The Opponents cite Nelson v. Jacobsen, 669 P.2d 1207, 1212 (Utah 1983), in which the court held that notice of an impending trial to an unrepresented defendant [was constitutionally deficient] because it described the nature of the proceedings against him in such ambiguous terms that it deprived him of adequate time to prepare his defense. The Nelson court itself, however, recognized that due process is not a technical concept that can be reduced to a formula with a fixed content unrelated to time, place, and circumstances. Id. at 1213. Indeed, in reaching its ruling, the court was particularly concerned that the defendant, who did not realize that an order setting a hearing actually referred to the scheduling of a jury trial, was unrepresented and that the notice was ambiguous or misleading. Id. The decision in Nelson was thus directed at a specific set of circumstances and did not pronounce a rule for all cases. Our decision, grounded, like Nelson, in the principles of Mullane, is directed at a different set of circumstances. Nelson does not alter our belief that the summons adequately and unambiguously informed potential claimants of the nature of the proceeding and the steps that they had to take, at the threshold, to preserve their claims.