In re Eldorado Coop Canal Co.

In re Eldorado Coop Canal Co., 2016 MT 94 (April 26, 2016) (Wheat, J.) (5-0, aff’d)

Issue: (1) Whether the Water Court correctly concluded that the cumulative volume of water Eldorado may divert from the Teton River for the Eldorado, Truchot, Dennis, and Beattie rights is no more than 15,000 acre-feet per year; (2) whether the Water Court erred in choosing not to assign separate volume limits for each of Eldorado’s four sets of combined irrigation and stockwater rights for the Eldorado, Truchot, Dennis, and Beattie rights; and (3) whether the Water Court erred in limiting the flow rate of the Truchot right to 300 miner’s inches rather than 225 miner’s inches.

Short Answer: (1) Yes; (2) no; and (3) no.

Affirmed

Facts: The Teton River does not have a reservoir capable of stabilizing late season flows. It is common for stretches of the river to be completely dry by late summer. The Teton River is located in the Teton River Basin, 41O, which has not yet been finally adjudicated and is currently controlled by a Temporary Preliminary Decree.

Eldorado is one of four companies that divert water from the Teton, and is historically considered to be the most senior of the companies, claiming water rights decreed in Perry by the Eleventh Judicial District Court in 1908. The Perry decree established priority dates and flow rates for about 40 water rights; of those, Eldorado owns four — the Eldorado, Truchot, Dennis, and Beattie rights.

Eldorado filed statements of claims for its four decreed rights. The DNRC assigned each of the four named rights an irrigation and a stockwater component, for a total of eight claims. The Lower Teton Joint Objectors (LTJO) and Teton Coop Reservoir Co. (TCRC) were not able to reach an agreement with Eldorado, and in June 2012 the parties had a four-day trial in front of the water master.

Procedural Posture & Holding: The master issued a report in August 2013, and all parties filed objections. In November 2014, the Water Court issued an order amending and adopting the master’s report. Eldorado appeals, LTJO and TCRC cross-appeal, and the Supreme Court affirms.

Reasoning: (1) Eldorado argues the Water Court correctly reversed the master’s volume determination, but erred in setting the volume at 15,000 acre-feet a year. LTJO cross-appeals, arguing the master’s findings of 10,350 acre-feet a year should be reinstated. Volume determinations are constitutionally permissible as long as they do not improperly constrain the historical beneficial use of pre-1973 water rights. The governing statute says that a water judge has discretion to determine whether volume is necessary to administer the rights.

Volume is a factual finding, and the master was the trier of fact. The Water Court determined that the standard adopted by the master was not supported by substantial evidence. The Supreme Court disagrees, but does agree that the master’s application of Johnson’s volume standard to all four rights was clear error, and affirms the right result for a different reason. The Water Court is not free to substitute its judgment for master when reviewing factual findings. A difference of opinion regarding evidence presented does not equal clear error.

“Regardless, we have not been asked to determine whether the irrigable acreage within the place of use is correct, but to determine whether the volume quantification made by the Water Court is in error. We hold it is not.” ¶ 33. A water right as reflected on a statement of claim is taken as true on its face, unless proven otherwise by a preponderance. The Court agrees that none of the parties successfully met the burden of proof to establish a historic volume quantification that is either greater than or less than the amount on Eldorado’s statement of claim.

(2) LTJO argues the Water Court erred by assigning one maximum volume for all four Eldorado rights, arguing this allows Eldorado’s junior rights to be used out of priority. “A water right cannot be enlarged beyond the original beneficial use by the original appropriator to the injury of others.” ¶ 37. The Court holds it was not error for the Water Court to use a combined volume limitation for Eldorado’s four rights, as a water user who alleges injury from Eldorado’s use may pursue every remedy available under statute.

(3) Eldorado acquired 225 miner’s inches of the Truchot right in 1921. TCRC argues the Water Court erred by failing to limit the Truchot flow rate to 225 miner’s inches, as there was no evidence that 75 additional miner’s inches were transferred to Eldorado. However, the master found substantial evidence that the 75 additional inches were transferred to Eldorado, and the Water Court applied the proper standard of review in affirming that finding.