Teton Coop Canal Co. v. Teton Coop Reservoir Co.

Teton Coop Canal Co. v. Teton Coop Reservoir Co., 2018 MT 20 (Feb. 13, 2018) (Baker, J.) (5-0, aff’d)

Issue: Whether the water court erred by (1) apportioning volume limits for Teton Canal’s 1890 water right claims and the junior 1936 Eureka Reservoir claims; (2) removing Eureka Reservoir as storage under the 1890 Notice but allowing Glendora Reservoir’s storage capacity to be added; (3) permitting Teton Canal to store its 1890 direct flow water in the Eureka Reservoir during irrigation season; and (4) allowing Teton Canal a year-round period of diversion for the 1890 Notice.

Short Answer: (1) No, (2) no, (3) no, and (4) no.

Affirmed

Facts: In Teton Canal I, the Court held that (1) the 1890 Notice was specific to the Glendora Canal and Glendora Reservoir; (2) Teton Canal could not claim the Eureka Reservoir under the 1890 Notice; and (3) the Eureka Reservoir could not relate back to the 1921 Notice. The Court remanded to the Water Court to assign a priority date to Teton Canal’s Eureka Reservoir water rights.

In 1901, the district court decreed a water right of 3,000 miner’s inches to Teton Canal’s predecessor, Montana Land and Water Co. (MLWC). Teton Canal’s water rights were again adjudicated in Perry, decreeing 3,000 miner’s inches to Teton Canal under the 1890 Notice.

The 1890 Notice was specific to the Glendora Canal and Glendora Reservoir. The water court found that Glendora Reservoir stored water for Teton Canal until the development of the Eureka Reservoir in 1937. The Eureka Reservoir originally had a storage capacity of 4,000 acre feet, but was expanded by 750 acre feet in 1947 and 750 acre feet in 1957. Its present capacity is 5,500 acre feet.

The water court found no credible evidence that any water was stored at the Eureka site before the reservoir was developed in 1937. Although off-season diversions occurred before Eureka Reservoir was added to the system, there is no evidence to determine the nature or extent of those diversions prior to 1963.

Procedural Posture & Holding: On remand, the water court assigned 8,095 acre feet under the 1890 Notice—8,000 acre feet of direct flow and 95 acre feet of storage—and a December 7, 1936 priority date to 3,905 acre feet of storage in the Eureka Reservoir. The court further held that all of Teton Canal’s water right claims have a year-round period of diversion. Teton Canal appeals, and the Supreme Court affirms.

Reasoning: (1) The Court concludes that the Dec. 7, 1936 priority date is supported by substantial evidence. Teton Canal argues that the water court exceeded the scope of the remand. The Supreme Court disagrees. “Because the administration of a water right must include elements that are specific to that water right, it follows that when the priority date of a water right is disturbed on appeal, the Water Court has discretion to consider whether other elements of the right are affected.” ¶ 18. The Court concludes there was substantial evidence to support the water court’s assignment of 8,000 acre feet to direct flow under the 1890 Notice and 4,000 acre feet to the 1936 Declaration.

(2) Storage may not be added to a direct flow water right if the stored water reflects a separate right with its own priority date. The Court held in Teton Canal I that the Eureka Reservoir was a new appropriation that must be administered under a different priority date. The water court did not err in ruling that Eureka Reservoir’s water right claims are separate rights with a priority date junior to the 1890 Notice direct flow rights. Although the Eureka Reservoir cannot be storage under the 1890 Notice, Teton Canal was permitted to move its place of storage from the Glendora Reservoir to the Eureka Reservoir. The water court did not err in appropriating the Glendora Reservoir storage capacity under the 1890 Notice and assigning the total volume limit for the 1890 Notice as 8,095 acre feet.

(3) Teton Reservoir argues that the water court erred by allowing Teton Canal to temporarily store water during irrigation season in the Eureka Reservoir for use during the same irrigation season, and that temporary storage of direct flow cannot be considered beneficial use. The water court’s language does not allow Teton Canal to add storage to the direct flow. Montana law allows a direct flow water user to add storage as long as the flow and volume of water used do not increase and the period of diversion is not expanded.

(4) The water court’s determination that Teton Canal’s 1890 Notice should have a year-round period of diversion is supported by the evidence, and is not clearly erroneous.