Court Opinion

ID: 9557535
Source: CourtListenerOpinion
Date Created: 2023-08-21 16:51:54.390005+00
Date Added: 2024-06-11T09:05:55.603928
License: Public Domain

Springer, J.,
with whom Steffen, C. J.,
agrees, dissenting:
The trial court, in its remand order of August 31, 1992, recognized the State Engineer’s failure to abide by NRS 533.370(3),1 which commands the State Engineer to “refuse to issue the requested permit” where “its proposed use . . . threatens to prove detrimental to the public interest.” In its remand order (hereinafter “Remand”), the trial court ruled that the State Engineer had not, in issuing the subject permits, properly considered vital public interest issues raised by the protestants and sent the matter back to the State Engineer with instructions on how to proceed properly in accordance with the law. Because the State Engineer refused (or at least failed) to comply with the district court’s orders, and because crucial public policy issues relating to this huge inter-basin water transfer remain unconsidered and undecided by the State Engineer, I dissent.
In its Remand, the trial court gave explicit and quite appropriate instructions to the State Engineer as to how he should proceed:
First, the trial court instructed the State Engineer that by law *754he was “charged with determining whether granting certain permits threatened to prove detrimental to the ‘public interest.’ ”
Second, the trial court recognized the “lack of any specific legislative criteria to be evaluated in determining the public interest, or any threat thereto” and that “the legislature [had] declined to define ‘public interest,’ or the factors that should be considered in defining this term.” The legislature, thus, had “delegated the responsibility for defining the ‘public interest’ to the state engineer.”
Third, the trial court ruled that the “bald,” unsupported and conclusory “finding by the state engineer that the granting of a permit does not threaten to prove detrimental to the public interest is, by itself, insufficient” and that “[s]uch a finding of ultimate fact must be accompanied by additional findings concerning the basic evidentiary facts relied upon to support the finding of ultimate fact.” Citing Nova Horizon, Inc. v. City Council of Reno, 105 Nev. 92, 98, 769 P.2d 721, 724 (1989).
Fourth, the trial court ruled that the “basic evidentiary facts” relating to the public interest must be weighed in a manner that “necessarily entails a balancing of myriad competing interests.”
In sum, then, the trial court quite properly refused to accept the State Engineer’s “bald finding that approving the change applications will not be detrimental to the public interest.”2 In accordance with this ruling the trial court remanded the application proceedings to the State Engineer, ordering (1) that the Engineer furnish an administrative definition of the meaning of the statutory expression, “threatens to prove detrimental to the public interest,” (2) that the State Engineer make “additional findings concerning the basic evidentiary facts relied upon to support” his conclusion on the public interest issue, (3) that the State Engineer make the required public interest adjudication based upon his “additional findings” of fact and by the process of “a balancing of myriad competing interests.”
The trial court’s rulings on remand were absolutely necessary because, as put by the trial court, the courts are “entitled to know and review the State Engineer’s factual bases for this finding” of no threat to the public interest. The basic and jurisdictional defect in this case that has not been overcome arises out of the State Engineer’s ignoring entirely the trial court’s order of remand. The State Engineer refused to define the crucial term “threatens to prove detrimental to the public interest.” The State Engineer *755refused to make the “additional” findings of fact that he was ordered to make in order to provide a “factual basis” for his rulings. The State Engineer refused to balance the “myriad competing interests” that were presented by the applicants and by the protestants, Lassen County and the Pyramid Lake Paiute Tribe. I cannot begin to understand why the trial court permitted the State Engineer to get away with ignoring the proper orders contained in the Remand. It is difficult to understand why this court would permit this to happen.

DEFINING THE “PUBLIC INTEREST” AND “THREATS THERETO”

NRS 533.370(3) comprises an unequivocal mandate to the State Engineer, commanding that the State Engineer refuse to issue any permit where the proposed use “threatens to prove detrimental to the public interest.” Because the legislature did not define the quoted term, the duty to define what is a threat to the public interest becomes the administrative duty of the State Engineer; yet the State Engineer adamantly refuses to perform this duty. The State Engineer’s impertinent response to the district court’s order to define administratively the subject statutory expression was to compile an odd medley of thirteen “principles,” none of which have the slightest thing to do with the subject of how the public interest should be treated in matters relating to the use of water in this state. These “principles” are set out in the body of the majority opinion. The irrelevance of the State Engineer’s rambling, unresponsive statement of “principles” is immediately apparent. Rather than defining the statutory public interest phrase, the State Engineer listed a bunch of statutory citations together with a recitation of a number of things that he believes a hypothetical applicant for a water use permit “must” do in order to be successful. For example, the State Engineer recited among his thirteen “principles” the quite obvious requirements that an applicant “must demonstrate the amount, source and purpose of the appropriation,” and “must demonstrate the magnitude of the use of water.” The statement of “principles” also recited a number of things that the State Engineer “may” do (“may cooperate with federal authorities,” “may monitor and regulate the water supply”). The irrelevant and uncalled-for “principles” or “guidelines” compiled by the State Engineer merely comprise a useless summary of readily accessible statutory water law.
None of the recited principles makes any reference at all to the dispositive issue in this case, the threat or lack of threat to the public interest. After compiling his list of statutory “mays” and “musts,” the State Engineer relied on these statutory abstracts *756(rather than on an intelligible definition of the meaning of a threat to public interest) as support for his post-Remand conclusion that the proposed project was not a threat to the public interest — when in truth, the statutory references have no palpable connection to the only issue presented in this controversy. It is very clear that the State Engineer’s itemization of readily-available statutory “principles” or guidelines does not comply with the district court’s mandate on remand and certainly provides no definition of the term, “threatens to prove detrimental to the public interest.”
It was not at all difficult for the State Engineer to provide a useful, administrative definition of the subject statutory expression. There are numerous examples of definitions of the public interest as it relates to water matters that can be taken from statutes and judicial decisions of other states.3 As can be seen in *757the statutes cited in the margin, other states have defined the public interest in water matters and have suggested a broad range -of factors that present themselves as being worthy of consideration in any controversy in which it is claimed that the public interest is threatened.4 If the State Engineer had defined the statutory, public interest language and furnished standards by which he was going to evaluate claimed threats to the public interest under NRS 533.370(3), then he would have been in a position to have gone on and made the required findings of fact. From these findings he could have based a proper adjudication that was in compliance with NRS 533.370(3). Because the State Engineer failed to define the public interest — or, rather, because he refused to abide by the instruction of the district court that he do so — the trial court thereby erred in affirming the State Engineer’s approval of the permits in complete disregard of the necessary conditions imposed by the Remand. The State Engineer, rather clearly, granted permit applications which should, under NRS Chapter 533, have been “refused.”

STATE ENGINEER’S REFUSAL TO MAKE FACT FINDINGS AND TO BALANCE COMPETING INTERESTS

The root of most of the defects in the State Engineer’s administrative handling of these applications is the absence of a workable definition of “threatens to prove detrimental to the public interest”; but there are other reasons why the permits should be disallowed and the matter returned to the State Engineer. The State Engineer’s refusal or failure to make the ordered “additional findings” is also sufficient of itself to warrant sending this case back to the State Engineer, so that he can do it right. I will not dwell on this point other than to say that the trial court in its *758Remand was obviously right when it concluded that the “bald” finding that the public interest was not threatened by these inter-basin water exchanges “must be accompanied by additional findings concerning the basic evidentiary facts relied upon to support” such a conclusion. I also agree with the trial court that such a conclusory finding was “not sufficient to permit judicial review” and that a reviewing court (including this one) “is entitled to know and review the State Engineer’s factual bases for this finding” of no threat to the public interest. See Nova Horizon Inc., 105 Nev. 92, 769 P.2d 721. This failure on the part of the State Engineer clearly calls for a remand to that administrative agency rather than the bland approval given by this court to the State Engineer’s derelictions in the administrative process.

STATE ENGINEER’S FAILURE TO BALANCE COMPETING INTERESTS

An even more significant dereliction on the part of the State Engineer (because of its dire implications in the future) is the State Engineer’s refusal to consider the competing interests, public versus private, that are presented by the protest filed by the Paiute Tribe and by Lassen County. These protestants maintain that they have offered unattended-to alternatives to the Honey Lake Project and to the inter-basin water exchanges approved by the State Engineer which are far superior to the approved proposal and which are beneficial to rather than detrimental to the public interest. The State Engineer has steadfastly refused to consider public and private competing interests or to take into account alternative plans for water use and water conservation offered by the protestants.
The State Engineer told the district court (and now tells this court) that he had no authority to interfere with decisions made by local government and that he acted in the assumption that he was compelled to grant permits after approvals of the project were made on the local level. When the State Engineer announced that he would not “interfere with the decisions and responsibilities of Washoe County,”5 he was abdicating his responsibility under NRS 533.370(3) and, as well, under NRS 540.011(1), which declares the “critical nature of the state’s limited water resources” and provides that the “policy of the state [is] to encourage efficient and nonwasteful use of these limited supplies.” When the State Engineer told the district court that he did not have the power to interfere with the decisions of Washoe County in water matters, he was acting in direct contravention of NRS 533.370(3), which does not permit him to issue a *759“requested permit” if the “proposed use” threatens the public interest. If the public interest is threatened, it matters not what decision Washoe County or any other governmental subdivision might make relative to a proposed water use. If it is contended (as is the case here) that the proposed water use presents a threat to the public interest of the people of this state, the State Engineer must weigh competing interests and then decide whether the public interest is threatened in the manner claimed and, if such a threat exists, must “refuse to issue the requested permit,” even though Washoe County had made a contrary decision.
It is clear that the State Engineer’s authority and his responsibility to protect this State’s “limited water resources” and to ensure “efficient and nonwasteful use of these limited supplies,” supersede all local governmental power. This is not to say, of course, that the State Engineer is placed in the position of having to choose among all possible water uses every time he is faced with a grant or do-not-grant decision on a water permit application. All that the statute requires of the State Engineer in the controversy at hand is that he define the term “threatens to prove detrimental to the public interest,” that he make findings of fact relative to the protestants’ contention that the granting of the “proposed use” was a threat to the public interest, that he “balance” the competing public and private interests called to his attention by the protestants, that he adjudicate the protestants’ contention that the project in question threatened to prove detrimental to the public interest, and that he furnish reasons for his decisions. The State Engineer did none of these things.
The State Engineer claims that it is sufficient for him merely to consider the “four corners” of the applications themselves and that he has no duty to go further than this. It is difficult to accept the contention that the critical public interest issues presented by this case can be resolved merely by inspection of the application documents themselves. Sound judgment as to whether permitting this massive inter-basin water transfer is a threat to the public interest cannot be made without some consideration being given to the alternatives offered by the protestants to the granting of this application.
The existence of a more desirable alternative is one of the factors which enters into a determination of whether a particular proposal would serve the public convenience and necessity. That the Commission has no authority to command the alternative does not mean that it cannot reject the proposal.
City of Pittsburgh v. Federal Power Comm’n, 237 F.2d 741, 751 n.28 (D.C. Cir. 1956). In the present case, although the State *760Engineer “has no authority to command the alternative,” this does not mean that the State Engineer cannot reject the proposal if he determines that the proposal poses a threat to the public interest.
Protestants (appellants herein) raised a number of public interest issues. For example, protestants presented evidence during the hearings below that granting the change applications threatened to prove detrimental to nearby Pyramid Lake and was a danger to two species of fish, the Lahontan cutthroat trout, a threatened species, and the cui-ui, an endangered species. Testimony was also presented that granting the applications would have an adverse effect on nearby wetlands, plant life and the wildlife in and around the basin. Evidence was presented that approval of the applications could result in increased dust pollution. Obviously, neither this court nor the district court can afford a meaningful review of the State Engineer’s decrees absent some discussion and fact-findings on the foregoing public interest issues.
Protestants also raised public interest issues relative to the State Engineer’s refusal to consider available alternatives to the project that protestants offered during the administrative proceedings. The trial court’s Remand pointed out the necessity of the “balancing of myriad competing interests”; yet, the State Engineer refused to consider proposed alternatives, a refusal which protestants claim will result in unnecessary, wasteful or uneconomical water uses.
The State Engineer has strongly resisted any suggestion that he is obliged to consider available alternatives to the water exchanges which he has approved, claiming that it is not his job to make choices as to optimum water usage. As mentioned, the State Engineer is correct in stating that he is not obliged to decide which of several possible water uses is optimal; but this is not to say that he is not obliged to examine available alternatives, presented formally as a protest, in making a judgment on the public interest issue. If, for example, a protestant were to claim in an application hearing, first, that granting of the application would not be cost effective, would be wasteful of water and would have an extremely adverse environmental effect and, second, that a readily available alternative would avoid all such “threat[]s” to the public interest, then the State Engineer could not properly and legally turn a deaf ear on the claims of such a protestant. Such claims call for careful consideration and for findings of fact that would justify the State Engineer’s conclusions that granting of the subject applications either was or was not a threat to the public interest.
Protestants offered to the State Engineer an alternative called *761the “Negotiated Settlement.”6 The protestants claimed that rejection of that alternative and granting of the applications would result in a threat of detriment to the public interest. Protestants claim that the offered alternative is manifestly superior to the now-approved multimillion dollar Honey Lake Project (which incurs a substantial public expenditure) and would produce at least two-thirds more water. It appears from this record that the State Engineer has refused to consider any alternatives to the project. Without considering the alternatives to the Honey Lake Project presented by the protestants, the State Engineer was clearly unable to make an informed judgment as to whether granting the applications threatens to prove detrimental to the public interest.
Of course, even if the State Engineer were to conclude that options proffered by the protestants were superior, economically or environmentally, to those accepted by Washoe County and by the State Engineer, this alone would not mean that the granting of the applications necessarily threatened to prove detrimental to the public interest. The point is that when protestants come in and furnish evidence of a proposed water use plan that they claim is far superior to that accepted by the County and the State Engineer, the State Engineer may not ignore such evidence and is required to give some cognizance to these claims. The State Engineer is not in a position to make a considered yes or no decision as to whether a public interest threat is present until he has made some evaluation of the opposing claims. If, for example, in a hypothetical situation, the State Engineer had granted a comparable inter-basin permit and was told by protestants that there was a readily-available alternative plan that would clearly conserve many thousands of acre-feet of water per year in evaporation or other water loss, then, naturally, the State Engineer would be bound to take a look at such an alternative plan to determine if accepting the plan proposed by the pending applications would be clearly wasteful and thus a threat to the public interest.
*762The decisions of local governmental officials in water matters might in some instances prove to be a threat to the public’s interest in water conservation. The Legislature has told the State Engineer that he must inquire into matters relating to overall public interest in all water permit matters. In cases where the issue of public interest has been expressly raised by protestants to the application, it is the duty of the State Engineer to make findings and to adjudicate the public interest issue required to be considered by the language of the statute. Under the present opinion he is freed in the future from having to perform this statutory duty.

PUBLIC TRUST DOCTRINE

Before a prospective user of water is allowed to use available water, an application for the right to use that water must be filed with the State Engineer and approved by the State Engineer. The State Engineer’s refusal to consider alternatives to the project is not consistent with the exercise of his functions as the trustee of water resources in Nevada and his responsibility to insure that “all sources of water supply with the . . . state whether above or beneath the surface of the ground” is managed as an asset belonging to the public.7 NRS 533.025. In refusing to consider any of the alternatives presented by the protestants to the use proposed by the applicants, the State Engineer has violated his trust and has failed to consider adequately the public’s interest in its water resources.
Consideration of alternatives is necessary in order to permit the State Engineer to make informed findings and conclusions relative to comparative cost-effectiveness, efficiency, waste avoidance and environmental impact. The public interest requires the largest possible economic use of state waters. Ormsby County v. Kearney, 37 Nev. 314, 142 P. 803 (1914). Whether the Honey Lake Project or the Negotiated Settlement or some other water use plan offers the most economic use of state waters is a question unanswered in these proceedings and is a question that should have been answered by the State Engineer. As mentioned before, the State Engineer has no authority to command the alternative, but the State Engineer does have the power to reject a proposal in *763cases, for example, where there are clearly superior alternatives. In such a case, the public interest would not be served by approving a substantially inferior and wasteful proposal.
The State Engineer’s failure or refusal to find facts and his failure or refusal to balance the various, conflicting public and private interests presented by the protestants invalidate all of the administrative proceedings and decisions of the State Engineer. The State Engineer is guilty of a number of clear violations of Nevada’s water law and particularly of failing to comply with the public interest requirements of NRS 533.370(3). Under such circumstances it is difficult to see how the State Engineer’s granting of these permits can possibly be permitted to stand.

CONCLUSION

This appeal involves purely legal questions which can be decided by this court “without deference to the agency’s decision.” Mirage v. State, Dep’t of Administration, 110 Nev. 257, 259, 871 P.2d 317, 318 (1994). Not only did the State Engineer act in defiance to the trial court’s Remand, the State Engineer clearly acted in contravention of Nevada water law and in violation of NRS 533.370(3). I have enumerated a number of errors of law which call for reversal and for a remand to the State Engineer; but the consequence of this decision that gives me the most concern is that henceforth the State Engineer is allowed, if not directed, to ignore the clear mandate of NRS 533.370(3) relative to the interest of all Nevadans in making the best possible use of their limited water resources. This is unfortunate. The judgment of the majority of this court “threatens to prove detrimental to the public interest”; therefore, I dissent.

NRS 533.370(3) provides:
533.370 Approval or rejection of application by state engineer: Conditions; procedure.
3. Except as otherwise provided in subsection 5, where there is no unappropriated water in the proposed source of supply, or where its proposed use or change conflicts with existing rights, or threatens to prove detrimental to the public interest, the state engineer shall reject the application and refuse to issue the requested permit. Where a previous application for a similar use of water within the same basin has been rejected on these grounds, the new application may be denied without publication.
(Emphasis supplied.)

The only finding or conclusion by the State Engineer relating to the public interest was the following “bald finding”:
The State Engineer finds no evidence that approval of the subject change applications would be detrimental to the public interest.

For example, reference may be made by the State Engineer to the Alaska Statute, section 46.15.080, which states, in pertinent part:
(b) In determining the public interest, the commissioner shall consider
(1) the benefit to the applicant resulting from the proposed appropriation;
(2) the effect of the economic activity resulting from the proposed appropriation;
(3) the effect on fish and game resources and on public recreational opportunities;
(4) the effect on public health;
(5) the effect of loss of alternate uses of water that might be made within a reasonable time if not precluded or hindered by the proposed appropriation;
(6) harm to other persons resulting from the proposed appropriation;
(7) the intent and ability of the applicant to complete the appropriation;
(8) the effect upon access to navigable or public waters.
The Idaho Supreme Court has ruled that the state water agency must consider the economic consequences of a proposed water use to protect the “public interest.” Shokal v. Dunn, 707 P.2d 441, 449 (Idaho 1985). The Idaho Supreme Court turned to the Alaska statute for guidance because the Alaska water permit statute states in detail what broad public interest concerns the relevant administrative agency must consider, including the economic effect of the proposed water use. Id. at 449. The Idaho Supreme Court approved and adopted the public interest elements listed in the Alaska statute, but warned that those elements “are not intended to be a comprehensive list.” Id. The Idaho Supreme Court determined that state agencies must examine the economic effect of any proposed appropriation of water to protect the public welfare.
The Nebraska Legislature enacted a statute which directs the Director of Water Resources to consider: (1) the economic, environmental, and other benefits of the proposed inter-basin transfer and use; (2) any adverse impacts of the proposed inter-basin transfer and use; (3) any current beneficial uses being made of the unappropriated water in the basin of origin; (4) any reasonably foreseeable future beneficial uses of the water in the basin of origin; (5) the economic, environmental, and other benefits of leaving the water in the basin of origin for current or future beneficial uses; (6) alternative sources of water supply available to the applicant; and (7) alternative sources of water available to the basin of origin for beneficial uses. Neb. Rev. Stat. § 46-289 (1986).

The majority expresses great concern about “[t]he State Engineer’s lack of resources” and the costs to the state that might arise out of the State Engineer’s conscientiously following the statute and making the required adjudication that a particular water use does not pose a threat to the public interest. There is nothing in the record to support the majority’s conjectural apprehensions; and, even, if there were, this is a legislative matter. If the legislature were to conclude that protecting the public interest in water-use matters is too costly, it is free to repeal the statute that commands that the State Engineer “shall . . . refuse to issue” permits which threaten to be detrimental to the public interest.
This court has not, to date, considered the mandate of NRS 533.370(3); and it would seem safe to say that the public interest issue is not one that has been of great trouble to the State Engineer. In cases, however, where massive inter-basin water exchanges are involved and bona fide protests raising public interest issues are filed, we see no way in which the State Engineer can, under the present statutory structure, avoid defining terms, finding facts and rendering an adjudication on this issue, even when the merits of an application have been affirmatively treated by local governmental entities.

State Engineer’s Supplemental Ruling No. 3787A at 19.

The “Negotiated Settlement” is legislation which was passed by the United States Congress. The purposes of the Negotiated Settlement are: (1) to equitably divide the disputed Tahoe river waters; (2) to make good on obligations owed to the injured American Indian tribes; (3) to settle and avoid litigation; and (4) to improve the habitat of local fish and migratory waterfowl.
To these ends, the Negotiated Settlement allocates the Lake Tahoe Basin waters, provides for payments to the Pyramid Lake Indian Tribe, and includes provisions to improve and protect wetland habitat. For a thorough discussion of the Negotiated Settlement, the reader is referred to E. Leif Reid, Ripples from the Truckee: The Case for Congressional Apportionment of Disputed Interstate Water Rights, 14 Stan. Envtl. L.J. 145 (1995).

Under the Public Trust Doctrine, the state government, as trustee of all public natural resources, owes a fiduciary obligation to the general public to maintain public uses unless an alternative use would achieve a countervailing public benefit. See Nat. Audubon Soc. v. Super. Ct. of Alpine Cty, 658 P.2d 709, 712 (Cal. 1983). Thus, the Public Trust Doctrine serves to protect public expectations in natural resources held in common against destabilizing change. Joseph L. Sax, Liberating the Public Trust Doctrine from Its Historical Shackles, 14 U.C. Davis L. Rev. 185, 188 (1980).