In Brooks v. Byler et al., Marion County Circuit Court Case No. 19CV27798, the Marion County Circuit Court rebuked the Oregon Water Resources Department’s (OWRD) attempt to regulate groundwater users based on OWRD’s blanket determination that all wells within 500 feet of surface water in the Upper Klamath Basin can be shut off in favor of senior surface water rights. Although this decision concerns a rule that only applies in the Upper Klamath Basin, the court’s reasoning could impose significant limits on OWRD’s authority to regulate groundwater use by rule throughout Oregon.

The appeal arose out of OWRD’s attempt to curtail the use of wells under OAR 690-025-0040(6), which purports to give OWRD the authority in the Upper Klamath Basin to “regulate wells that are located a horizontal distance equal to or less than 500 feet from a source of surface water rights whenever a valid call for surface water is made and the Department is regulating in accordance with the users’ existing rights of record.” The petitioners challenged OWRD’s order on the basis that OWRD lacked the statutory authority to promulgate OAR 690-025-0040, and that the rule deprived them of their water rights without due process.

The court found OWRD’s action impermissible on both grounds advanced by the petitioners. First, the court found that ORS 537.525(9)—which reads, “Whenever … impairment of or interference with existing rights to appropriate surface water … exists or impends, controlled use of the groundwater concerned be authorized and imposed … by the commission under the police power of the state”—was merely a policy statement, and not a legislative delegation of authority to enact whatever rules OWRD believes to further the legislature’s goals. The closest that the legislature had come to authorizing the type of rule that OWRD had promulgated in OAR 690-025-0040 were the critical groundwater statutes, ORS 537.730 et seq. The court found that OAR 690-025-0040 was in substance a critical groundwater area designation, but that OWRD had not followed the only process the legislature had provided to make such designations as set forth in ORS 537.730. The court therefore ruled that OWRD’s failure to follow the necessary protocols for designating a critical groundwater area was sufficient to invalidate the application of OAR 690-025-0040 to the petitioners.

The court’s analysis under the Due Process Clause of the 14th Amendment has potentially more far-ranging implications to OWRD’s authority. The court found that junior groundwater rights cannot be regulated in favor of senior surface water rights on the basis of area-wide findings made in a rulemaking proceeding, where the junior holders had no opportunity to put on evidence and cross-examine the government’s witnesses. Critically, the court ruled that a water right holder’s ability to challenge the validity of an administrative rule falls short of Due Process requirements due to the deferential standard of review applicable to rule challenges, namely, whether a “limited kind of record from a rulemaking proceeding” contains substantial evidence to support the agency’s rule. This logic could substantially limit OWRD’s ability to adopt rules similar to OAR 690-025-0040 in which OWRD asserts the right to regulate wells based on blanket determinations of hydraulic connectivity between entire classes of wells and surface water bodies, and could instead require individual findings and the opportunity for adjudicatory proceedings for each well that OWRD seeks to regulate.

According to reports, OWRD is not planning to appeal the court’s ruling, meaning the Court of Appeals will not have the opportunity to settle the questions raised by this case soon.

If you have water rights and are wondering how this decision could affect you, please do not hesitate to contact the attorneys on this page.

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