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May/June 2007
Volume I; Issue 2
Special Report:
Conservation Easements

First in Time, First in Right

By Fred Kelly Grant

Idaho’s Supreme Court has not always distinguished itself in the matter of protecting private property interests. In fact, several years ago, the court issued a decision that ignored statutory language, statutory intent, and constitutional principles and gave the federal government an unprecedented interest in Idaho’s waters.

That decision resulted in an uproar among Idaho voters, and an incumbent Justice was defeated by a noted water law expert. Just a few months later, before the newly elected Justice took office, the Court reviewed and reversed its decision, and left water control in Idaho’s hands. Of course, a spokesman for the Court announced that the election results had nothing to do with the reversal.

The Justice who was elected, Daniel Eismann, issued two monumental decisions for a unanimous Court on February 9, 2007: assuring the protection of stockwater rights for the Lowrys of LU Ranching and Paul Nettleton of Joyce Livestock. The opinions put the Court back in the business of applying the law as the people of Idaho created it in the state constitution, as the legislature implemented throughout the years, and as prior Idaho courts had interpreted it.

After tortured years of struggling through the water adjudication process, the Lowrys and Nettleton finally had their stockwater rights acknowledged for an early priority date. And, the Court finally announced that the federal government had no stockwater rights because it does not own any water stock on the federal grazing lands, thus they never had put the water to “beneficial use” as required by law. The positions taken by the Court rest on the very arguments that the Lowrys and Nettleton first urged years ago before the Special Master.

The two cases were announced on the same date, Joyce being given the opinion number 23, and the Lowry case, opinion number 24. In order to fully review the law as applied to the two cases, both decisions must be read. The bulk of the reasoning was stated in the Joyce case, and then applied in Lowry case.

A major difference between the issues in the two cases was that in Joyce (Nettleton), the lower court had disallowed the federal government’s claim to the water and in the Lowry case (LU), the lower court allowed the federal government’s claim.

The Court rebuked the Government’s contention that it possessed a stockwater right simply because the source of water was on federal grazing lands:

The United States has not, however, used any of the water at issue to water its livestock. The constitutional method of appropriation [prior appropriation doctrine] requires that the appropriator actually apply the water to a beneficial use. If that use is stock watering, then the appropriator must actually water stock.

Years ago, in the first hearing held by a Special Master in the LU case, the Lowrys themselves made this very argument, in virtually the same words. A few weeks later, in the Joyce case, Nettleton made the same argument, in virtually the same words.

The years of litigation anxiety could have been avoided had the United States Government accepted that clear statement consistent with Idaho’s case law as it had developed from Territorial days. But, the Government, encouraged perhaps by a willingness of most ranchers in the Snake River Basin Adjudication area to settle with the Government in order to avoid litigation, resisted right up to the Supreme Court’s decision.

The Idaho Court also acknowledged early priority dates for both LU and Joyce. It upheld the argument that both Lowry and Nettleton had repeatedly asserted: they were entitled to a priority date based on the date that water was first appropriated for stockwater use on the ranch premises.

The Court adopted both parties’ position, which stated that the stockwater rights are appurtenant to the private property of the ranch and therefore are conveyed with the private property every time title to the private property was sold to a new owner. The Court agreed that because the water rights were appurtenant to the private base property of the ranch, they were conveyed each time the ranch property was conveyed through the conveyance language relating to the land “and its appurtenances.”

The Government tried to avert the impact of this decision by arguing that in order to prevail, the Lowrys and Nettleton should have proved that each of the prior owners of the ranch property had the intent, the “mental element,” that they “understood or believed that a water right recognized by law could be obtained by the instream watering of livestock.” Since there was little evidence of actual mental intent of the early owners of the land, the Government could ride this argument to victory in virtually every case in which an historic priority date was at issue. The evidence presented showed that the prior owners had ranched and grazed cattle, and that they conveyed the ranch property and “its appurtenances.”

The Court rejected the Government’s argument:

The argument of the United States assumes that these ranchers [the historic settlers of the land], would have acquired a homestead and several hundred head of livestock without first making any investigation to see whether there was sufficient forage and water to support those livestock. In other words, the government’s argument assumes that these ranchers lacked common sense. It is inconceivable that a rancher would either homestead or purchase land and invest in hundreds of head of livestock without having made any investigation as to whether there was sufficient water available for the livestock to survive. The rancher’s hope was to raise horses, cattle, or sheep for market, not to have them die from lack of water. When putting livestock out onto the range, the rancher clearly wanted them to drink water from the available water sources.

…We have never required appropriators to be lawyers or seers. Water rights, based upon prior appropriation, were recognized by custom in the land that later became the State of Idaho, before there were any statutes or controlling court decisions on the issue.

After ruling for LU and Joyce, the Court then remanded the cases to the District Court for the fixing of early priority dates consistent with its decision that water rights were conveyed with private ranch property through the appurtenance language of deeds. It would appear from the lengthy, detailed discussion of the law in the two cases, that the District Court will have no choice but to now assign very early historic priority dates for both LU and Joyce.

The disappointment that arises from the case decisions is that the Court did not allow attorney fees to the ranchers. The Government, of course, has financed its continued opposition to Idaho legal principles, which were clear to anyone who would take the time to objectively review them.
It is not as though the Idaho Supreme Court suddenly made up the rules it applies in these two cases. The Court’s position is based upon at least two centuries of case law, the Idaho Constitution, as it was first adopted, and every statute passed by the Idaho legislature since Territorial days.

The position was argued by the Lowrys and Nettleton from the inception of the cases. But, the Government stubbornly held on, fighting and scrapping on taxpayers’ dollars, trying to escape the inevitable. The Lowrys and Nettleton, along with all other Idaho taxpayers, paid for the establishment of the Snake River Basin Adjudication, the new court building which was built to house the court to implement the Adjudication, the salaries of all the Special Masters, Judges and personnel who have handled the cases, and the expenses of the Government in trying to tear away from them private water rights.

Even an award of attorney’s fees would not have evened the burden, but it would have helped. The refusal to allow fees follows a general pattern in litigation involving the Government. If a property owner takes on the Government he/she pays for both sides of the litigation.

In this case, disallowance of fees aggravates the fact that the law upon which the ranchers won can be traced historically to an early Idaho Territorial Court decision, quoted by Justice Eismann:

“[Early emigrants to Idaho] found a new condition of things. The use of water to which they had been accustomed, and the laws concerning it, had no application here. The demand for water they found greater than the supply, as is the unfortunate fact still all over this arid region. Instead of attempting to divide it among all, thus making it unprofitable to any, or instead of applying the common-law riparian doctrine, to which they had become accustomed, they disregarded the traditions of the past, and established as the only rule suitable to their situation that of prior appropriation. This did not mean that the first appropriator could take all he pleased, but what he actually needed, and could properly use without waste. Thus was established the local custom, which pervaded the entire west, and became the basis of the laws we have today on that subject. Very soon these customs attracted the attention of the legislatures, where they were approved and adopted, and next we find them undergoing the crucial test of judicial investigation.”

That settlement of the law was written in an 1890 decision. If Special Masters and District Judges had paid more attention to those words, and the principles that must, in common sense, stem from them, Nettleton and the Lowrys would have won long ago.

But winning even today is better than the alternative.