In Re 2007 Admin. of Appropriations
278 Neb. 137, 768 N.W.2d 420 (2009)
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Rule of Law:
An administrative challenge to the validity of a senior water appropriation is not rendered moot by a junior appropriator's separate condemnation proceeding to exercise a constitutionally superior preference right, as these represent distinct legal remedies enforcing separate rights.
Facts:
- Jack Bond and Joe McClaren Ranch (junior appropriators) owned real property in Cherry County, Nebraska, and in 2006, were granted surface water appropriation rights on the Niobrara River for agricultural use.
- Nebraska Public Power District (NPPD) owned and operated a hydropower facility downstream on the Niobrara River, claiming senior surface water appropriation rights dating back to 1942 for power generation.
- Under Nebraska law, when water is insufficient to satisfy all appropriations, agricultural purposes have a constitutionally superior preference right over power generation purposes, provided the junior appropriator compensates the senior appropriator for the water.
- In spring 2007, NPPD claimed that the Niobrara River lacked sufficient water to satisfy all appropriation rights.
- The Department of Natural Resources (Department) concluded there was insufficient water and, to satisfy NPPD's claimed senior appropriation, began issuing notices to junior water users, including Jack Bond and Joe McClaren Ranch, directing them to cease water diversions.
Procedural Posture:
- On May 11, 2007, Jack Bond and Joe McClaren Ranch filed an administrative hearing request with the Nebraska Department of Natural Resources (Department) to determine the validity of the closing notices issued against them.
- One junior appropriator appealed the Department's issuance of new closing notices (while the administrative hearing was pending) to the Nebraska Court of Appeals (case No. A-07-858).
- On October 10, the Nebraska Court of Appeals sustained motions for summary dismissal by both Nebraska Public Power District (appellee) and the Department (appellee), dismissing the appeal for lack of a final order.
- On August 17, 2007, Jack Bond and Joe McClaren Ranch filed a petition for condemnation of NPPD's water rights in Boyd County Court; appraisers were appointed and established a compensation award for NPPD for 20 years.
- After the condemnation award, the Department (appellee) and Nebraska Public Power District (appellee) filed motions with the Department's director to dismiss the administrative proceeding, arguing that the condemnation had mooted the appropriation dispute and that the junior appropriators lacked standing.
- The Department's director concluded that the condemnation award divested the Department of jurisdiction, determined the junior appropriators lacked standing, and dismissed the administrative proceeding.
- Jack Bond and Joe McClaren Ranch (appellants) appealed the director's order to the Supreme Court of Nebraska.
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Issue:
Does a junior appropriator's initiation of a condemnation proceeding to exercise superior preference rights, and subsequent receipt of a compensation award, render moot an administrative challenge to the validity of a senior appropriator's water rights before the Department of Natural Resources?
Opinions:
Majority - Connelly, J.
No, a junior appropriator's initiation of a condemnation proceeding to exercise superior preference rights, and subsequent receipt of a compensation award, does not render moot an administrative challenge to the validity of a senior appropriator's water rights before the Department of Natural Resources. The court first clarified the distinction between 'standing' and 'mootness.' Standing refers to a party's personal stake at the commencement of litigation, while mootness refers to events occurring after litigation begins that eradicate the requisite personal interest, preventing meaningful relief. The junior appropriators clearly had standing when they filed their administrative request, and the Department has original, exclusive jurisdiction over surface water appropriation disputes. The court determined the case was not moot because the junior appropriators retained a legally cognizable interest in the outcome of the administrative proceeding. Although their condemnation award provided them a 20-year superior preference, they were still obligated to compensate NPPD. A determination that NPPD had abandoned or forfeited its appropriation rights would immediately eliminate this compensation obligation, providing a direct benefit to the junior appropriators. The court also rejected the argument that the election of remedies doctrine barred the junior appropriators' administrative relief. It explained that seeking condemnation for a superior preference right and challenging the validity of a senior appropriation right are separate means of enforcing distinct water rights. Condemnation proceedings are the statutory method to enforce a constitutionally superior preference right when appropriation procedures are unavailable, but they do not preclude a challenge to the underlying appropriation's validity. Forcing junior appropriators to choose between these procedures would compel them to relinquish their preference rights to challenge an inferior appropriation's validity, which would be inconsistent with Nebraska's constitutional preference rights.
Analysis:
This case offers a critical clarification on the doctrines of mootness and election of remedies within the context of Nebraska's complex surface water management system. By distinguishing 'mootness' from 'standing,' the Supreme Court reinforced that a case remains active so long as there is any meaningful relief to be obtained, even if circumstances have changed. More importantly for water law, the decision prevents water users from being forced into an impossible choice between immediately exercising constitutionally superior preference rights (which often require compensation) and administratively challenging potentially invalid senior appropriation rights (which could negate the need for compensation). This ensures a more robust protection of both prior appropriation and preference rights, allowing for parallel legal avenues to fully resolve water disputes and secure property value for water users.
