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United States v. Alpine Land & Reservoir Co.

ELR Citation: 32 ELR 20475
Nos. Nos. 00-15688 et al., 279 F.3d 1189/(9th Cir., 02/14/2002)

The court reverses a district court's blanket equitable exemption of intra-farm transfers from Nevada's law of forfeiture and abandonment and holds that equity may be appropriate only in the forfeiture context under certain circumstances. In a prolonged litigation regarding water rights from the Truckee River and their impact on Pyramid Lake, a district court, in one of many decisions, exempted intra-farm transfers from the state water law on forfeiture and abandonment of water rights based on equitable considerations. Subsequently, the state water engineer applied this principle to outstanding water rights transfer applications.

The court first affirms the evidentiary standard that the district court applied in making its parcel-specific rulings on abandonment. Although a prolonged period of non-use may raise an inference of intent to abandon, it does not create a rebuttable presumption. Abandonment is to be determined from all the surrounding circumstances. The court next affirms the district court's holding that landowners have to demonstrate that they took affirmative steps to appropriate water prior to 1913 to be exempted from the state forfeiture statute. The court then holds that a prior decision in the litigation, United States v. Alpine Land & Reservoir Co., 878 F.2d 1217 (9th Cir. 1989) (Alpine II), forecloses the argument that the landowners did not know that they possessed ownership rights subject to the transfer requirements under state law. If transfer applicants moved water within their farm without complying with state transfer requirements, they did so at their own risk.

The court then holds that the equity should not be used to justify a generalized equitable exemption divorced from the facts of each particular case. Equitable relief, however, might be appropriate on a case-by-case basis to prevent individual transfer applicants from losing their water rights, such as where the circumstances justify protecting individual landowners from unjust outcomes. The court, therefore, reverses the district court to the extent that it provided blanket equitable relief for intra-farm transfers without requiring an individualized factual showing with respect to each transfer applicant. The court further holds that the district court erred in granting equitable relief to those landowners facing abandonment because the landowners may demonstrate that they did not abandon their water rights as a matter of law. Unlike abandonment, however, the court holds that equity may be appropriate on a case-by-case basis in the forfeiture context if a landowner can show that steps were taken to transfer water rights during the period of non-use but that those steps were thwarted by the government.

The full text of this decision is available from ELR (30 pp., ELR Order No. L-452).

Counsel for Plaintiff
Katherine J. Barton
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Michael L. Wolz, Deputy Attorney General
Attorney General's Office
100 N. Carson St., Carson City NV 89701
(775) 687-4170