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Klamath Irrigation Dist. v. United States

Citation: 40 ELR 20079
No. No. S056275, (Or., 03/11/2010)

The Oregon Supreme Court answered three certified questions from the Federal Circuit Court of Appeals relating to whether plaintiffs, farmers and irrigation districts that use water from a federal reclamation project in the Klamath River basin have an equitable interest in a water right to which the United States holds legal title. The first question asked whether a 1905 Oregon statute precluded plaintiffs from acquiring a beneficial or equitable interest in the water right. Based on the text and context of the statute, the court answered “no.” Under the act, a formal written release from the United States is not necessary for plaintiffs to have acquired such an interest. The second question asked whether beneficial use alone is sufficient to acquire a beneficial or equitable interest in a water right to which another person holds title. The court again answered “no,” holding that, under Oregon law, whether plaintiffs acquired such an interest turns on three factors: whether plaintiffs put water to beneficial use with the result that it became appurtenant to their land; whether the United States acquired the water right for plaintiffs’ use and benefit; and, if it did, whether the contractual agreements between the United States and plaintiffs altered that relationship. Here, the first two factors suggest that plaintiffs acquired an interest in the water right. But since not all of the parties’ agreements are before the court, a definitive answer to the second question cannot be provided. The third question asked whether Oregon State law recognizes any property interest in the use of Klamath Basin water that is not subject to the Klamath Basin adjudication. The court answered “yes.” To the extent plaintiffs assert only an equitable or beneficial property interest in the water right, plaintiffs are not “claimants” who must appear in the adjudication or lose the right. As a general rule, equitable or beneficial property interests in a water right to which someone else claims legal title are not subject to determination in a state water rights adjudication.