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Clawson v. State, Dept. of Agriculture, Div. of Water Resources

Court of Appeals of Kansas

December 20, 2013

Mary CLAWSON, Trustee, and Clawson Land Partnership, Appellees/Cross-appellants,
v.
STATE of Kansas, DEPARTMENT OF AGRICULTURE, DIVISION OF WATER RESOURCES, Appellant/Cross-appellee.

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Syllabus by the Court

1. Under K.S.A.2012 Supp. 82a-724, final orders of the Kansas Department of Agriculture, Division of Water Resources are reviewed under the Kansas Judicial Review Act, K.S.A. 77-601 et seq. Pursuant to K.S.A.2012 Supp. 77-621(c), a court reviewing an administrative action shall grant relief only if it determines that the agency violated one or more of the provisions listed therein.

2. On appeal, an appellate court exercises the same statutorily limited review of an agency's action as does the district court, as though the appeal had been made directly to the appellate court.

3. The party asserting that an agency's action is invalid bears the burden of proving the invalidity.

4. An agency's interpretation of a statute is not accorded any significant deference on judicial review; therefore, whether an agency has exceeded its statutory authority requires the court to interpret the statutes establishing the agency. In this case, the chief engineer's authority is governed by the Kansas Water Appropriation Act, K.S.A. 82a-701 et seq.

5. K.S.A.2012 Supp. 77-621(c)(7) has always provided that appellate courts review an agency's factual findings to ensure substantial evidence supports them " in light of the record as a whole." However, as amended, K.S.A.2012 Supp. 77-621(d) now defines " in light of the record as a whole" to include evidence that both supports and detracts from an agency's finding. Thus, appellate courts must determine whether the evidence supporting the agency's factual findings is substantial when considered in light of all the evidence. Substantial evidence is such evidence as a reasonable person might accept as being sufficient to support a conclusion.

6. The appropriation doctrine is based upon the premise that all unused water belongs to all of the people of the state. The first person to divert water from any source and use it for beneficial purposes has a prior right thereto. In other words, first in time, first in right. This doctrine is said to reward development by giving the early appropriator the fruits of his or her industry. The rule gives greater certainty of rights while affording a more flexible administration of the law and encourages free enterprise by protecting a developer's investment. It discourages waste of a valuable resource and distributes

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the resource in response to demonstrated need.

7. K.S.A. 82a-706 grants the chief engineer of the Kansas Department of Agriculture's Division of Water Resources the authority to enforce and administer the laws of this state pertaining to the beneficial use of water, and the chief engineer shall control, conserve, regulate, allot, and aid in the distribution of the water resources of this state for the benefit and beneficial uses of all of its in habitants in accordance with the rights of priority of appropriation.

8. K.S.A.2012 Supp. 82a-711 provides that an application for a water appropriation made in good faith and in proper form must be approved by the chief engineer, provided the application does not impair an existing water right or prejudicially and unreasonably affect the public interest.

9. Once perfected, water rights are considered real property. However, a water right does not constitute ownership of the water itself; it is only a usufruct, a right to use water. Other than for domestic use, the Kansas Water Appropriation Act eliminates the notion that a landowner has absolute title to water in contiguous streams or underground; it bases water rights upon the time of use and the actual application of water for beneficial uses. A landowner cannot simply own water without using it.

10. It is a well-established rule of law that Kansas administrative agencies have no common-law powers. Any authority claimed by an agency or board must be conferred in the authorizing statutes either expressly or by clear implication from the express powers granted. Where an agency has no specific statutory authority to retain jurisdiction, it has no ability to reconsider or modify its final orders.

11. An agency's final order is generally considered to be an action which determines the legal rights and duties of the parties. A final order terminates the litigation on the merits and leaves nothing to be done except to enforce the result. It should be more than a procedural ruling, and finality should be interpreted in a pragmatic way.

12. A nonfinal agency action is to be considered preliminary, preparatory, procedural, or intermediate with regard to subsequent agency action. An order cannot be final if the matter is still under active consideration by the agency tribunal. However, the fact that ministerial tasks remain to be done does not establish that the matter is still under active consideration and does not render a final agency decision nonfinal.

13. The chief engineer cannot retain jurisdiction on a water right appropriation by merely declaring it. Language in the water appropriation permit granting the chief engineer continuing jurisdiction has no force and effect.

14. The chief engineer does not retain jurisdiction to modify a final order during the water appropriation perfection period. The chief engineer's ability to modify the water appropriation permit based on the applicant's actual beneficial use of water is merely enforcement of the final order consistent with the Kansas Water Appropriation Act and constitutes a ministerial act only. Once a water appropriation permit has been issued, the chief engineer is no longer actively considering whether such permit is in the public interest.

15. The chief engineer does not have the statutory power to retain jurisdiction to reduce the approved rate of diversion or quantity of the water rights authorized to be perfected once the Kansas Department of Agriculture issues a final order granting a water appropriation permit. The Kansas Water Appropriation Act does not authorize the chief engineer to reevaluate and reconsider an approval once a permit has been issued.

16. Under K.S.A.2012 Supp. 77-621(c), a court reviewing an administrative agency's action may grant relief if it determines that the agency, among other things, has acted beyond the jurisdiction conferred by law, has erroneously interpreted or applied the law, or has acted unreasonably, arbitrarily, or capriciously. An action is unreasonable when it is taken without regard to the benefit or harm to all interested parties.

17. The chief engineer has broad statutory authority to impose a monitoring plan and require any water user to install meters,

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gages, or other measuring devices, including electronic rate loggers.

18. There is an insufficient record before this court to determine whether the chief engineer's monitoring plan is unreasonable in the present case.

Burke W. Griggs, of Division of Water Resources, Kansas Department of Agriculture, for appellant/cross-appellee.

David M. Traster, of Foulston Siefkin LLP, of Wichita, for appellees/cross-appellants.

Aaron Popelka and Myndee M. Reed, for amicus curiae The Kansas Livestock Association.

Before LEBEN, P.J., McANANY and POWELL, JJ.

POWELL, J.

In this appeal, we are called upon to answer the question of what limits exist on the exercise of state agency power by the chief engineer of the Kansas Department of Agriculture's Division of Water Resources (DWR) when the regulated activity involves a precious and increasingly scarce resource— water. Mary Clawson and the Clawson Land Partnership (Clawson) obtained 10 approvals and permits from the chief engineer of the DWR to appropriate water. Under the terms and conditions of the water appropriation permits, the chief engineer imposed a specific monitoring plan and retained jurisdiction to reduce the approved rates of diversion and the quantities of the water rights authorized to be perfected as may be deemed in the public interest. After exhausting administrative remedies, Clawson challenged these terms and conditions in the district court of Meade County. The district court upheld the requirements of the specified monitoring plan but found the chief engineer could not retain jurisdiction to reduce the rates of diversion and the quantities of the water rights authorized to be perfected after the issuance of the permits.

The DWR appeals the district court's finding that the chief engineer cannot retain jurisdiction to make reductions in the approved rates of diversion and the quantities of the water rights authorized to be perfected. Clawson cross-appeals, contending the monitoring plan, which requires Clawson to install electronic rate loggers, is unduly burdensome and oppressive. We agree with the district court that the chief engineer cannot retain jurisdiction once the Kansas Department of Agriculture issues a final order and that the chief engineer's monitoring plan is within his statutory authority, but we also find that there is insufficient evidence in the record to determine whether the monitoring plan is unreasonable; therefore, we affirm in part, reverse in part, and remand with instructions.

FACTUAL AND PROCEDURAL HISTORY

On September 20, 2002, Clawson applied to the DWR's chief engineer for two new appropriations of groundwater in Meade County, which were assigned file Nos. 45-250 and 45-251. On January 14, 2003, Clawson applied to the chief engineer for eight new appropriations of groundwater in Meade County, which were assigned file Nos. 45-403, 45-404, 45-405, 45-406, 45-407, 45-408, 45-409, and 45-410. While Kansas law requires a decision on applications within 150 days, nearly 1 1/2 years passed before all 10 applications were dismissed by the chief engineer on May 26, 2004. The chief engineer concluded that the additional water permits would impair existing water rights. Clawson requested a hearing on the dismissals, over which Chief Engineer David Pope presided in August 2005.

Nearly 2 years passed after the hearing without a decision. Pope then retired on June 16, 2007. David Barfield succeeded Pope as the DWR's chief engineer and assumed the role of hearing officer. After another roughly 2-year wait, on May 8, 2009, Barfield finally issued an order reopening the Clawson record because there was not enough information to determine whether the pumping of groundwater would impair senior water right holders.

On May 26, 2009, Clawson filed a motion seeking reconsideration or administrative review of Barfield's order by the Secretary of Agriculture. The Secretary granted administrative

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review on June 9, 2009. The parties submitted briefs, and on July 10, 2009, the Secretary issued an order directing the chief engineer " to approve the applications and issue the permits within sixty (60) days in accordance with applicable statutes and regulations."

Thereafter, on August 27, 2009, the chief engineer issued Clawson's 10 permits with the following terms, ...


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