Opinion ID: 783261
Heading Depth: 3
Heading Rank: 1

Heading: The Newlands Reclamation Project and the Pyramid Lake Paiute Indian Tribe

Text: 12 The Newlands Reclamation Project was the first federal reclamation project created under the Reclamation Act of June 17, 1902. 5 In 1902, the government withdrew close to 250,000 acres in western Nevada from public use for the Project, diverting waters from the Truckee and Carson Rivers to irrigate a large area near Fallon, Nevada to facilitate conversion to farmland. See Alpine V, 291 F.3d at 1066. The United States sold water rights associated with the Project land to users within the project, and individual landowners hold the water rights pursuant to contracts between the landowners and the Department of Interior. See United States v. Orr Water Ditch Co., Equity No. A-3 (D.Nev. Sept. 4, 1944) ( Orr Ditch Decree ). Since 1926, the Truckee-Carson Irrigation District (TCID) has operated the Project subject to administrative regulations and orders promulgated by the U.S. Bureau of Reclamation (BOR). 13 The Pyramid Lake Paiute Tribe's Reservation was established in 1859 when the federal government set aside nearly half a million acres in western Nevada for the Tribe. Pyramid Lake, widely considered the most beautiful desert lake in North America, Nevada v. United States, 463 U.S. 110, 114, 103 S.Ct. 2906, 77 L.Ed.2d 509 (1983) (citation omitted), is the central feature of the Tribe's reservation, and its sole source of water is the Truckee River. The Project's diversion of water from the Truckee River caused the surface area of Pyramid Lake to decrease over the years, threatening the survival of indigenous fish species. See Alpine V, 291 F.3d at 1066. 14 We described the long and difficult history of the relevant litigation leading up to this case in Alpine V. See id. at 1065-71. Therefore, we do not re-state it here. However, we note that several issues raised in this case were resolved in the long series of Alpine cases that were described in detail in the Background section in Alpine V. Where applicable, therefore, when addressing the issues raised here we refer to several of these cases throughout the opinion. 15 B. The Change Applications in Appeal Nos. 01-15665, 15814, 15816 (Ruling on Remand No. 4798) 16 After our remand in United States v. Alpine Land & Reservoir Co., 878 F.2d 1217, 1229 (9th Cir.1989) ( Alpine II ) for proceedings with respect to perfection, forfeiture, and abandonment, the State Engineer proceeded to consider approximately 200 transfer applications. By 1992, the Engineer had issued rulings on the applications and the United States and the Tribe appealed those rulings to the district court. On April 20, 1992, the district court granted a joint motion of the lead parties to defer consideration of those rulings, pending a decision by this court on legal issues raised in the appeal of the district court's ruling on the original 25 applications relating to forfeiture and abandonment filed after Alpine I. 17 We resolved those issues in United States v. Alpine Land & Reservoir Co., 983 F.2d 1487 (9th Cir.1993) ( Alpine III ), and on September 3, 1998, the district court remanded all of the pending transfer application cases, including the applications at issue in the consolidated cases in this appeal, to the State Engineer. The State Engineer re-opened the evidentiary hearings on the applications on the issue of perfection, abandonment, and forfeiture (including the ones at issue in Appeal Nos. 01-15665, 01-15814, and 01-15816). Following the district court's memorandum order in United States v. Alpine Land & Reservoir Co., 27 F.Supp.2d 1230, 1241 (D.Nev.1998) ( Alpine IV ), which upheld the State Engineer's determination that intrafarm transfers were exempt from Nevada's abandonment and forfeiture statutes, the State Engineer once again re-opened hearings on these applications to allow additional evidence on certain issues, including whether an application involved an intrafarm transfer of water rights. 18 Following these evidentiary hearings, the State Engineer issued Ruling No. 4798. The Engineer considered 40 transfer applications in Ruling No. 4798, and of those applications the Engineer found that thirty of them at least in part involved proposed transfers where the existing and proposed places of use [were] both within the farm unit owned by the applicants and that, as a result, the proposed transfers constituted intrafarm transfers not subject to the doctrines of forfeiture and abandonment according to the District Court's September 3, 1999 Order. 19 Four of the transfer applications considered were approved in part because they involved on-farm dirt-lined ditches that the State Engineer found to have appurtenant water rights. The State Engineer made a General Finding of Fact that the parcels used for ditches within existing irrigable areas of water-righted farms have the same legal status and appurtenant water rights as parcels actually under irrigation. Nev. State Eng'r Ruling on Remand No. 4798 at 36-37 (Sept. 24, 1999). As to six of the forty transfer applications, the Tribe asserts that the Engineer erred in concluding that the Tribe had not shown clear and convincing evidence of non-use or intent to abandon by the landowner. 20 Three transfer applications that were denied have been appealed by Louis Guazzini, Jr. (Application 47809, parcels 3 and 4), 6 Isabelle Winder (Application 49111, parcel 1), and Darrell and Patricia Norman (Application 49285, parcel 1). The Tribe and the United States appealed the approval of transfers included in Ruling No. 4798 to the district court, and on February 22, 2001 the court upheld the Engineer's ruling in all respects. 21 C. Appeal Nos. 01-16224, 16241 (Ruling on Remand No. 4825) 22 During the evidentiary hearings that preceded the State Engineer's Ruling No. 4798, certain transfer applicants (including the seven applicants involved in appeal numbers 01-16224 and 01-16241) filed petitions with the State Engineer requesting that he summarily approve and certify without an administrative hearing that their transfer applications were intrafarm and therefore entitled to equitable relief from any claim of forfeiture and abandonment under Alpine IV. 23 In Ruling 4825, the State Engineer agreed that the transfer applications and the applicants' intrafarm transfer claims could be decided without an administrative hearing. Indeed, the applicants agreed that they would not dispute the Tribe's evidence relating to non-use of water rights (without admitting its validity) and waive any cross-examination of the Tribe's witnesses. As part of the General Findings of Fact Applicable to All Applications Under Consideration in this Ruling, the Engineer noted in Part III, Equity, that in some situations ... intrafarm transfers of water rights within the Newlands Project should be upheld as a matter of equity, and the principles of forfeiture and abandonment would not apply. Nev. State Eng'r Ruling No. 4825 at 23 (Dec. 21, 1999) (citing Alpine IV ). However, the Engineer proceeded to make findings of fact with respect to each parcel before approving the transfers. Id. 24 Furthermore, the State Engineer made the same general findings of fact regarding on farm, dirt-lined ditches as the Engineer made in Ruling 4798. Several transfer applications at issue in the present appeal included requests to transfer water rights that were from parcels of land used for dirt-lined ditches rather than for the cultivation of crops. In General Finding of Fact IX, the Engineer found that, in the early days of the Project, the Reclamation Service (predecessor to the Bureau of Reclamation) did not exclude dirt-lined ditches from the irrigable areas of project farms and therefore the ditches were water righted. Id. at 36. 25 In Alpine V, the Tribe and the United States appealed the district court's affirmance of several transfer applications, including applications for intrafarm transfers. We established several principles in Alpine V. First, with respect to abandonment, we noted that we were controlled by our earlier holding in United States v. Orr Water Ditch Co., 256 F.3d 935, 945 (9th Cir.2001), 7 and upheld the Engineer's determination that a prolonged period of non-use of water rights does not create a rebuttable presumption of the landowner's intent to abandon those rights. Alpine V, 291 F.3d at 1072. We further noted that Orr Ditch controls whether payment of Project operation and maintenance assessments is evidence of a lack of intent to abandon: abandonment is to be determined `from all the surrounding circumstances,' and those circumstances certainly include the payment of assessments and taxes. Id. at 946 (citing Orr Ditch, 256 F.3d at 946). However, the payment of fees and taxes is only one factor to be considered. As we advised in Orr Ditch, [o]ther important circumstances to be considered include non-use of the water right and the construction of structures incompatible with irrigation. 256 F.3d at 946 (citations omitted). In Orr Ditch, we further endorsed the district court's statement in Alpine IV regarding how it would view evidence of abandonment: 26 Where there is evidence of both a substantial period of nonuse, combined with evidence of an improvement which is inconsistent with irrigation, the payment of taxes or assessments, alone, will not defeat a claim of abandonment. If, however, there is only evidence of nonuse, combined with the finding of a payment of taxes or assessments, the court concludes that the Tribe has failed to provide clear and convincing evidence of abandonment. Id. (quoting 27 F.Supp.2d at 1245) 27 In Alpine V, we concluded that, [a]t a minimum, proof of continuous use of the water right should be required to support a finding of lack of intent to abandon. In addition, each landowner should be required to present evidence that he or she attempted unsuccessfully to file for a change in place of use, or at least inquired about the possibility of a transfer and was told by the government or TCID that such a transfer was not permitted. Alpine V, 291 F.3d at 1077. 28 The appellants in Alpine V also requested that we reconsider our ruling in Alpine III that 1902 was not the relevant priority date for determining the application of the Nevada forfeiture statute. Id. at 1073. In Alpine V we declined the invitation, citing our holding in Orr Ditch that landowners cannot claim 1902 as the date their water rights were initiated, but rather that they had to demonstrate that they took affirmative steps to appropriate water prior to 1913 to be exempt from the state forfeiture statute. Id. 29 Furthermore, as explained below, in Alpine V we explicitly rejected a blanket exemption from the operation of forfeiture and abandonment laws for intrafarm transfers. Id. at 1076.