Central Platte Natural Resources District v. City of Fremont

Caporale, J. I. STATEMENT OF CASE Following an evidential hearing, the director of the Department of Water Resources denied each of the seven applications presented by the applicant-appellant, Central Platte Natural Resources District, for permits allowing it to divert certain waters in order to develop its Prairie Bend II project, as described in part III hereinafter. The district assigns six errors to the director, which may be summarized — 254 — as claiming (1) that the director’s order of denial is contrary to and not supported by competent and relevant evidence and is therefore arbitrary, capricious, and unreasonable, and (2) that in any event, the director did not consider the issues in the proper sequence. We affirm. II. SCOPE OF REVIEW In an appeal from the department, an appellate court’s review of the director’s factual determinations is limited to deciding whether such determinations are supported by competent and relevant evidence and are not arbitrary, capricious, or unreasonable. Central Platte NRD v. State of Wyoming, 245 Neb. 439, 513 N.W.2d 847 (1994); In re Applications A-16027 et al., 242 Neb. 315, 495 N.W.2d 23 (1993) (Landmark Project), modified on other grounds 243 Neb. 419, 499 N.W.2d 548; In re Application A-16642, 236 Neb. 671, 463 N.W.2d 591 (1990) (Long Pine Creek). However, on questions of law, which include the meaning of statutes, a reviewing court is obligated to reach its conclusions independent of the legal determinations made by the director. See Central Platte NRD, supra. III. BACKGROUND Through seven applications dealing with various segments of the project, the district seeks to divert waters from the Platte River and a tributary of Prairie Creek in order that it might store the diverted waters and thus replenish the supplies of irrigation waters now being withdrawn from the ground water sources underlying the project lands and to improve water quality for municipal, domestic, and livestock uses through such ground water recharge. The applications would require the withdrawal of waters at various times during the year at the Prairie Diversion Dam near Kearney, Nebraska. The main supply canal would deliver the waters from that point to a main storage reservoir, the North Prairie Reservoir, and to four smaller reservoirs. Waters stored in the North Prairie Reservoir and the smaller reservoirs would then be moved through canals and pipelines to 24 recharge ponds. The reservoirs and storage ponds would leak the stored waters into the ground water aquifer underlying the project area. — 255 — IV. ANALYSIS With that brief background, we turn our attention to the summarized assignments of error and supply such additional facts as the issues require. 1. Evidential Support for Order We begin our study of the evidential support for the director’s order of denial questioned in the first summarized assignment of error by noting that while one of the applications identifies a “Tributary to Prairie Creek” as the source of the waters sought to be diverted, the director concluded that because the evidence focused “almost exclusively upon the Platte River valley,” that application must be denied for a lack of evidential support. In urging that contrary to the director’s finding the record does in fact contain competent and relevant evidence concerning the Prairie Creek tributary, the district refers us to the testimony of a hydrologist and to several exhibits. Although it is true that the hydrologist’s testimony concerns the subject application individually, it does not provide enough information to assess the application. A review of the exhibits reveals that they concern not the subject application individually, but the entire project as a whole. These circumstances lead us to conclude that notwithstanding the director’s somewhat confusing observation concerning the need for a separate denial of the Prairie Creek application, he nonetheless correctly ruled that the applications are to be considered “as a single package.” The district next asserts that the director’s order is arbitrary, capricious, or unreasonable because there is no competent and relevant evidence which supports his findings, including the finding that the project would jeopardize the continued existence of the whooping crane, an endangered and threatened species. A decision is arbitrary when it is made in disregard of the facts or circumstances and without some basis which would lead a reasonable person to the same conclusion. In re Application A-16642, 236 Neb. 671, 463 N.W.2d 591 (1990) (Long Pine Creek). A capricious decision is one guided by fancy rather than by judgment or settled purpose; such a deci — 256 — sion is apt to change suddenly; it is freakish, whimsical, humorsome. Id. The term “unreasonable” can be applied to an administrative decision only if the evidence presented leaves no room for differences of opinion among reasonable minds. Id. The evidence demonstrates that the Department of Water Resources requested formal consultation regarding these applications with the Nebraska Game and Parks Commission. The consultation was devoted to evaluating the effects of the project on 11 endangered and threatened species, including the whooping crane. The commission thereafter issued an opinion that “[t]he project will not jeopardize the continued existence of the whooping crane [assuming] that the exact site of the diversion structure will be determined so as to ensure that whooping crane roosting habitat will not be adversely affected.” The testimony of one of the authors of the foregoing opinion further made clear that the conclusion that the project would not jeopardize the whooping crane was based on the assumption that the diversion structure for the project would not be located in any whooping crane roosting habitat. The record establishes that there were 20 confirmed sightings of whooping cranes in the Platte River Valley from April 4, 1943, through April 4, 1988, and the director noted a biologist had personally observed whooping cranes in the immediate vicinity of the Prairie Bend diversion dam. The director further observed that the proposed diversion dam is in the same location as crane-watching blinds operated by the U.S. Fish and Wildlife Service. Additionally, a letter from the acting field supervisor of the Nebraska-Kansas Field Office of the U.S. Fish and Wildlife Service to the acting regional director of the Bureau of Reclamation stated in part: A remaining concern, which only recently came to light, is the resolution of the proposed location for the Prairie Diversion Dam. This location, which has been discussed with members of your Grand Island staff, needs further evaluation because of recent whooping crane sightings in the vicinity and land acquisition by the State of Wyoming. In November of 1986, three whooping cranes roosted in the Platte River channel about — 257 — 1,800 feet upstream of the proposed dam site. Furthermore, the dam currently would be sited within the property recently purchased by the Wyoming Water Development Commission for the purpose of offsetting whooping crane roosting habitat impacts attributable to the proposed Deer Creek project. For these reasons, we believe the diversion dam as proposed may need to be relocated. The director further noted that although the water depth for whooping crane roosting sites should be less than 12 inches, a hydrologist testified that the depth of the waters which would pond behind the dam structure would be 4 feet and that upstream approximately one-half mile, the depth would be 1 to 2 feet. In 1978, the U.S. Department of the Interior designated a 3-mile-wide, 58-mile-long reach from Lexington to Denman, Nebraska, “whooping crane critical habitat.” This area includes the proposed damsite. Although others might weigh this evidence differently, under that state of the record, it cannot be said that the director’s finding that the proposed project would jeopardize the endangered whooping crane is not supported by competent and relevant evidence. Because the analysis which follows in part IV(2) hereof establishes that this evidentially supported finding in and of itself makes the director’s order a reasoned one and thus not one which fairly can be characterized as arbitrary, capricious, or unreasonable, we must conclude that the first summarized assignment of error is without merit. 2. Sequence of Consideration In the second summarized assignment of error, the district contends that the director erred in failing to consider the issues in the proper sequence. The district first argues that the Nebraska Constitution and Neb. Rev. Stat. § 46-235 (Reissue 1993) “plainly require, as a first step in the analysis of an application, the determination of whether there is unappropriated waters.” Brief for appellant at 13. According to the district, as the director made no finding concerning the presence or absence of unappropriated waters, he could not have reached the constitutionally required consideration of the pub258 lie interest, and the director’s order must, on that basis alone, be reversed. Even if we assume for the purposes of this analysis that the director’s order does not implicitly find the existence of unappropriated waters, it must be noted that Neb. Const, art. XV, § 6, provides, in part, that “[t]he right to divert unappropriated waters of every natural stream for beneficial use shall never be denied except when such denial is demanded by the public interest.” Section 46-235(1) implements that constitutional provision as follows: For applications other than those to appropriate public waters for induced ground water recharge, if there is unappropriated water in the source of supply named in the application, if such application and appropriation when perfected are not otherwise detrimental to the public welfare, and if denial of the application is not demanded by the public interest, the Department of Water Resources shall approve the application .... It is clear that neither article XV, § 6, nor § 46-235(1) requires that the director engage in a particular sequential consideration of the issues presented by an application. The constitutional right to divert waters is not absolute; only unappropriated waters are subject to that right and then only if the public interest does not demand that the application to divert such waters be denied. Thus, if the director determines that the public interest demands that an application be denied, it matters not whether the waters sought to be diverted were or were not appropriated. In either case, the director is empowered to deny the application. Neb. Rev. Stat. § 46-234 (Reissue 1993) (“[i]f there is no unappropriated water in the source of supply ... the Department of Water Resources may refuse such application”); § 46-235. The district’s second argument in regard to this summarized assignment of error is that the director made no finding that the public interest demanded denial of the applications. But that is simply not so; as set forth in part IV(1) above, the director specifically and reasonably found that the project will jeopardize the continued existence of the endangered and threatened whooping crane. — 259 — The question is whether this finding satisfies the constitutional and statutory requirement that the denial of the applications be “demanded by the public interest.” In other words, the crucial inquiry at this point becomes what is meant by the phrase “public interest” and the term “demanded.” Neither expression is defined by the Constitution. And while the Legislature has provided various factors for the director to take into consideration in determining whether the public interest demands that the right to appropriate waters should be denied in the context of instream appropriations and interbasin transfers, it has not done so for the type of appropriation involved here. Compare § 46-235(1) with Neb. Rev. Stat. §§ 46-289 and 46-2,116 (Reissue 1993). Nonetheless, the Legislature has given considerable guidance as to what is in the public interest so far as the appropriation of waters generally is concerned. Neb. Rev. Stat. § 37-432 (Reissue 1993) provides, in part: (1) That it is the policy of this state to conserve species of wildlife for human enjoyment, for scientific purposes, and to insure their perpetuation as viable components of their ecosystems; (2) That species of wildlife and wild plants normally occurring within this state which may be found to be threatened or endangered within this state shall be accorded such protection as is necessary to maintain and enhance their numbers; (3) That this state shall assist in the protection of species of wildlife and wild plants which are determined to be threatened or endangered elsewhere pursuant to the Endangered Species Act by prohibiting the taking, possession, transportation, exportation from this state, processing, sale or offer for sale, or shipment within this state of such endangered species and by carefully regulating such activities with regard to such threatened species. Moreover, Neb. Rev. Stat. § 37-435(3) (Reissue 1993) provides, in pertinent part: All other state agencies shall, in consultation with and with the assistance of the commission, utilize their — 260 — authorities in furtherance of the purposes of the [Nongame and Endangered Species Conservation] act by carrying out programs for the conservation of endangered species and threatened species listed pursuant to section 37-434 and by taking such action necessary to insure that actions authorized, funded, or carried out by them do not jeopardize the continued existence of such endangered or threatened species or result in the destruction or modification of habitat of such species which is determined by the commission to be critical. For purposes of this subsection, state agency shall mean any department, agency, board, bureau, or commission of the state or any corporation whose primary function is to act as, and while acting as, an instrumentality or agency of the state, except that state agency shall not include a natural resources district or any other political subdivision. In upholding the constitutionality of § 37-435(3) against the claim of the Upper Big Blue Natural Resources District that the statute impermissibly limited or altered the substantive right to divert unappropriated waters for irrigation purposes, we recognized that article XV, § 6, was not self-executing. See In re Applications A-16027 et al., 243 Neb. 419, 499 N.W.2d 548 (1993) (Landmark Project). Determining that our task in that case was to determine whether the challenged statute permissibly implemented and effectuated the policies found in the relevant constitutional provisions, specifically the language found in article XV, § 6, we wrote: In the legislative declaration to the Nongame and Endangered Species Conservation Act (NESCA), of which § 37-435(3) is a part, the Legislature stated that “nongame, threatened, and endangered species have need of special protection and ... it is in the public interest to preserve, protect, perpetuate, and enhance such species of this state through preservation of a satisfactory environment and an ecological balance. ” (Emphasis supplied.) . . . The stated legislative intent behind NESCA is to conserve wildlife species for human enjoyment, for scientific purposes, and to ensure their perpetuation as viable components of their ecosystems, as well as to — 261 — assist in the protection of endangered species pursuant to the federal Endangered Species Act. . . . . . . Section 37-435(3) provides for the establishment and implementation of conservation programs to effectuate the protection of endangered species as a public interest. The Legislature’s determination of a public interest and the corresponding implementing statutes are not unreasonable, arbitrary, discriminatory, or confiscatory. The limitations that § 37-435(3) places on the diversion of unappropriated waters permissibly effectuate the provisions of Neb. Const, art. XV, §§ 4, 5, and 6. (Emphasis in original.) In re Applications A-16027 et al., 243 Neb. at 424, 499 N.W.2d at 552. We have held that while a legislature may not, under the guise of regulating in the public interest, impose conditions which are on their face unreasonable, arbitrary, discriminatory, or confiscatory, whether legislation is in the public interest is generally a question for legislative determination. In re Applications A-16027 et al., supra. Given that rule and our determination that the Legislature acted constitutionally in declaring the protection of endangered or threatened species to be in the public interest, the question becomes whether this public interest demanded that the district’s applications be denied. As the Department of Water Resources is a state agency within the meaning of the Nongame and Endangered Species Conservation Act, § 37-435(3), the issuance of a permit through its director would qualify as an “action” taken by a state agency. The director therefore may not issue permits which would jeopardize the continued existence of an endangered or threatened species, or result in the destruction or modification of their habitat. Little Blue N.R.D. v. Lower Platte North N.R.D., 210 Neb. 862, 317 N.W.2d 726 (1982), overruled in part on other grounds, In re Applications A-16027 et al., 242 Neb. 315, 495 N.W.2d 23 (1993) (Landmark Project). Thus, we need not at this time formulate a prescriptive definition of the term “demanded,” for the only way to satisfy the public interest, as declared in § 37-435(3), is by denying per — 262 — mits to appropriate waters when doing so would jeopardize the continued existence of an endangered or threatened species. Consequently, the director’s evidentially supported finding that the district’s proposed project would jeopardize the continued existence of the endangered whooping crane demanded that the district’s applications be denied. That being so, the second summarized assignment of error is likewise without merit. V. JUDGMENT For the foregoing reasons, the director’s order is, as first noted in part I above, affirmed. Affirmed. Fahrnbruch, J., not participating.