Water rights issue one to watch in Washington State: White Paper issued on Methow Valley vs. DOE

The Washington State Department of Ecology (DOE) claims that irrigation withdrawals cause pollution! DOE issued a Notice of Violation Order against Methow Valley Irrigation District (MVID) that claims use of their legal water right reduces stream flow and "causes pollution."  If not challenged, the legal implications will set the precedent for all water users in the State of Washington.

The conclusion reached in a White Paper written by Galen G. Schuler of Perkins Coie LLP, states that  "the MVID appeal before the PCHB [Hearing Board] is more than an enforcement dispute between MVID and Ecology.  It raises a pivotal and far-reaching issue whether water pollution control authorities may be used to regulate water rights.  This is an issue of first impression that has not been resolved by the tribunals and courts of Washington State.  If it is resolved in Ecology's favor, it opens the door to a revolution in the management of water resources and regulation of water rights.

Following is the "White Paper" about the lawsuit in Methow Valley over water rights written by Schuler:

PERKINS COIE LLP

June 21, 2002

REGULATING THE QUANTITY OF A WATER RIGHT THROUGH ENFORCEMENT ORDERS UNDER RCW 90.48

Galen G. Schuler

Clean Water –Stormwater Conference
June 18, 2002

 

In a December 27, 2001 Notice of Violation and an April 29, 2002 Order, the Washington Department of Ecology ("Ecology") required the Methow Valley Irrigation District ("MVID") to reduce instantaneous and annual surface water diversions from the Twisp and Methow Rivers.  As authority for this action, Ecology relied on the Washington Water Pollution Control Act, ch. RCW 90.48.  Because the Methow and Twisp Rivers are listed as water quality limited segments for temperature and instream flow, Ecology maintains that MVID water diversions violate water quality standards.  Ecology's interpretation of RCW 90.48 crosses a new threshold by regulating the exercise of water rights to achieve water quality objectives.  If Ecology's application of RCW 90.48 is correct, the exercise of numerous water rights throughout Washington State could be found in violation of water quality standards and subject to limitation or revision.

I.  BACKGROUND

On December 27, 2001, Ecology issued a notice of violation to MVID pursuant to RCW 90.48.120, asserting that irrigation diversions of surface water were a source of pollution in violation of RCW 90.48.080.  See Attachment 1.  The notice was based on the following facts:(1) MVID diverts water from the Methow and Twisp Rivers; (2) both rivers are listed under Section 303(d) of the federal Clean Water Act as water quality limited segments for temperature and instream flow; (3) Ecology maintains that MVID diverts more water than is necessary for the land and crops served by the ditch; (4) 90.03.400 makes willful or negligent use of water a misdemeanor; (5) Ecology issued an order to MVID in 1988 requiring a reduction in diversion or evaluation of irrigation; and (6) MVID and Ecology have engaged in an evaluation/litigation/negotiation process for more than a decade.

Based on these facts, Ecology made the following determination:

Ecology has determined that the Methow Valley Irrigation District, by reducing water quantities in both the Methow and Twisp Rivers through diversions, to levels that will no longer support certain beneficial uses, and because insufficient instream flow has been determined to be pollution, has violated and has the potential to violate RCW 90.48.080 . . . .

Attachment 1, p.3 (emphasis added).

In a lengthy filing, MVID responded to Ecology's notice of violation by recounting the history of litigation and negotiation among Ecology, MVID, the Yakama Indian Nation, and the Washington Department of Fish & Wildlife.  MVID contested Ecology's interpretation and application of RCW ch. 90.48, and it characterized Ecology's notice of violation as an abuse of state authority to gain negotiating leverage in  ongoing settlement negotiations among MVID, Ecology, the Yakama, and the Bonneville Power Administration.

Unmoved by MVID's response or the results of settlement negotiations, Ecology issued an order on April 29, 2002, which requires MVID to limit its diversions to a specified cap on the water rights of the district and its members.  See  Attachment 2.  The order purports to require MVID to comply with RCW 90.03 and RCW 90.48, but it does not identify specific statutory sections requiring compliance.  It does, however, recount findings of fact as a basis for the order: (1) Ecology maintains that the MVID irrigation system is inefficient; (2) the Twisp and Methow Rivers are listed under 303(d) for inadequate instream flow; (3) the Conservation Commission has identified the Twisp River as a high priority for salmon recovery; and (4) alleged wasteful diversion and use of water during low water years adversely affects aquatic resources when the State's minimum flows adopted under WAC 173-548 are not achieved.  The order does not address issues or arguments raised in MVID's response to Ecology's notice of violation.

On May 16, 2002, MVID filed an appeal of Ecology's order with the Pollution Control Hearings Board.  The appeal questions Ecology's authority under Washington law to regulate and/or revise a water right under RCW 90.03 and RCW 90.48.  In addition, the appeal raises several issues of due process, and it asserts a civil rights claim against Ecology under federal law for damages and attorneys fees.

II.  LEGAL ISSUES

While the due process and civil rights issues raised by MVID are clearly important, this paper focuses on Ecology's authority to regulate the exercise of water rights based on water quality effects.  Because Ecology has interlaced its authority and process for protection of water quality with authority and standards for management of water rights, this paper will also briefly address issues of water law.

A.        Does RCW 90.48 Provide Ecology With Authority To Regulate Water Use As A Source of Pollution?

While Ecology's April 29, 2002 order does not reference a specific section of statute that is the basis for enforcement of water quality requirements, Ecology's notice of violation is based squarely on a determination that MVID has violated RCW 90.48.080.  Attachment 1, p.3.  On its face, this statute appears to prohibit only unlawful discharges of pollutants:

It shall be unlawful for any person to throw, drain, run, or otherwise discharge into any of the waters of this state, or cause , permit or suffer to be thrown, run, drained, allowed to seep or otherwise discharged into such waters any organic or inorganic matter that shall cause or tend to cause pollution of such waters according to the determination of the department, as provided in this chapter.

RCW 90.48.80.

Conventionally, RCW 90.48.080 is described as a prohibition against unpermitted point source discharges.  Tiegs v. Watts, 135 Wn.2d 1, 20-21 (1998); Miotke v. City of Spokane, 101 Wn.2d 307, 325-26 (1984).  There is no reported legal precedent for applying RCW 90.48.080 to actions other than discharges even if those actions could be shown to adversely affect water quality. 

Ecology's order against MVID requires an unprecedented, if not bold, interpretation of RCW 90.48.080 to find that the diversion of water for an existing water right causes a violation of the statutory prohibition against discharge of pollutants.  For this interpretation, Ecology relies on two rules: (1) the definition of "pollution" and (2) a catch-all enforcement rule by which Ecology may regulate "water quality effect sources."  Ecology has defined pollution to include "alteration of the physical, chemical, or biological properties of any waters of the state, including change in temperature . . . ."  WAC 173-201A-020.  The definition goes on to describe "such discharge" that would render water "harmful, detrimental, or injurious to . . . legitimate beneficial uses, or to . . . fish, or other aquatic life."  Id.  Consistent with RCW 90.48.020, the definition of pollution is largely understood as a description of discharge activities, and this is particularly the case for the harm alleged by Ecology in the case of MVID (injury to beneficial uses, fish, and aquatic life).  However, Ecology appears to rely on the broadly-worded statement on "alteration" of the properties of waters of the state as encompassing diversion of water.

In support of this interpretation, Ecology references the decision in Washington State Dept. of Ecology v. PUD No. 1 of Jefferson County, 121 Wn.2d 179 (1993), aff'd, 511  U.S. 700 (1994), which affirmed the authority of Ecology to impose instream flow conditions on the issuance of a Federal Energy Regulatory Commission ("FERC") license for a hydroelectric project.  In that case, FERC required the applicant to obtain a certificate of compliance with state water quality standards pursuant to Section 401 of the Clean Water Act, which requires federal agencies to certify that their actions comply with state water quality standards.  Jefferson County held that "man-induced alteration of stream flow level is 'pollution'," and that it was appropriate for Ecology to use the Section 401 certification process to impose an instream flow condition to assure compliance with RCW 90.54.020(3)(a).  Id. at 187-189.

Based on Jefferson County, Ecology reasons as follows:

Water withdrawals can completely eliminate a water use, and because maintaining the uses of water is the whole point of water quality standards, any distinction between water quality and quantity is artificial.

Attachment 1, p.3.  This proposition should be tempered with a few additional observations.  First, Ecology's statement is made in a vacuum that does not exist.  Any elimination of the "artificial" distinction between water quality and water quantity must be reconciled with the very real statutory framework and common law governing water rights and water resource management. 

Jefferson County should be limited to the context of federal licensing for a newly proposed use of water.  In that circumstance, all parties agreed that Section 401 certification of compliance with state water quality standards was required.  The dispute was whether instream flows conditions could be imposed on a new water use for the protection of water quality.  The Washington Supreme Court answered "yes" based on compliance with RCW 90.54.020 – a prospective water resource management statute that requires protection for water quality in allocation decisions.  Nothing in RCW ch. 90.54 authorizes modification or limitation of existing water rights to achieve water quality objectives.  RCW 90.54.920 ("Nothing in this act shall affect or operate to impair any existing water rights").  Moreover, Ecology's enforcement action against MVID is not based on 401 certification or compliance with RCW 90.54.020.

In its notice of violation, Ecology couples a broad interpretation of "pollution" with a catch-all regulation on protection of water quality, which provides that "[t]he director shall, through the issuance of regulatory permits, directives and orders, as are appropriate, control miscellaneous waste discharges and water quality effect sources. . . ."  WAC 173-201A-160(2) (emphasis added).  Ecology considers the MVID diversion to be a water quality effect source. 

While the language of the rule can be read to include any activity that affects water quality, it is notable that the enforcement rule includes the word "source."  In the state and federal water pollution control framework, there are two kinds of sources – point sources and nonpoint sources.  Either type of source may introduce pollutants into water through discrete points (point sources) or through dispersed land or water based activities (nonpoint sources).  Diversion of irrigation water does not fall within the meaning of either point source or "nonpoint source."  See WAC 173-201A-020 ("'Nonpoint source' means pollution that enters any waters of the state from any dispersed land-based or water-based activities . . . .") (emphasis added).  Water diversion probably is not a pollution "source" because it does not cause anything  to "enter" waters of the state. 

Finally, while an expansive interpretation of Ecology's definition of pollution and "water quality effect source" may be argued to include diversion of water, the rules must be construed and applied within the limitations of statutory authority and prohibitions that the rules are designed to enforce.  Because RCW 90.48.080 prohibits only unlawful discharges, it is difficult to agree with Ecology's expansive interpretation of its own rules to rewrite state law and apply RCW 90.48.080 to diversion and use of water rights.

B.        Even Assuming Ecology Has Authority To Regulate Water Use As a Source of Pollution, Has It Justified Its Order?

It is questionable whether a water diversion is an action that can be found to violate RCW 90.48.080, but even if it were, further procedural and factual justification would be required to prove such a violation.

In its MVID enforcement action, Ecology appears to have adopted a troubling position that any diversion of water from a stream listed under 303(d) for temperature or flow may be a violation of state water quality standards.[1]  This approach seems to dispense with causation or fault.  If so, the implications for water rights and water resource management in Washington State are dramatic. 

In 1998, there were over 300 water bodies listed throughout the state as water-quality impaired for temperature or instream flows.  See Attachment 3.  Under Ecology's theory of water quality enforcement, surface diversions from these water bodies could be limited or curtailed in an attempt to achieve water quality standards.  Many of the state's major municipal and irrigation water systems divert water from listed streams.  In addition, rights to ground water in hydrological continuity with listed streams could also be regulated and limited to achieve water quality standards.  See Postema v. Pollution Control Hearings Board, 142 Wn.2d 68, 93 (2000) (Ecology may deny/condition water rights where there is hydraulic continuity and impairment of existing surface rights including instream flow).  Moreover, owners of water rights would find it difficult to undertake proactive steps to assure compliance with water quality standards because they would probably not be eligible for (nor advised to obtain) national pollution discharge elimination system (NPDES) permits to lawfully "pollute."

Also troubling is Ecology's premature application of section 303(d) of the federal Clean Water Act to an irrigation diversion without clear legal authority, scientific justification, or appropriate process.  Under the Clean Water Act, Ecology is required to develop a comprehensive total maximum daily load ("TMDL") of a particular pollutant for a particular water-quality limited stream.  33 U.S.C. § 1313(d)(1)(C),(D); see generally, Pronsolino v. Nastri, __ F.3d __ , 2002 U.S. App. LEXIS 10308 (9th Cir. May 31, 2002).  It is intended to be a rigorous scientific process that is also subject to public notice and comment and approval by the Environmental Protection Agency ("EPA") prior to implementation.  As part of a TMDL, Ecology is required to apportion waste load allocations (proportionate discharge reductions) to point sources and load allocations (best management practices) to nonpoint sources of the offending pollutant.  40 C.F.R. § 130(2)(g)-(i).  Through this comprehensive process, Ecology is forced to ensure that all causes of a water quality problem, including baseline natural conditions, are scientifically assessed and the burden for achieving improved water quality is equitably apportioned among "polluters."  Here, Ecology appears to have singled out MVID to bear the burden of a load allocation for flow and/or temperature on the Methow and Twisp Rivers, but Ecology has not completed the process of developing a TMDL that considers all causes including the natural environmental baseline for flows and temperatures.  And, even if Ecology had completed the process, it would remain doubtful that Ecology has the authority to enforce a load allocation by modifying an existing water right.

Under Ecology's theory of water quality compliance, the only certainty of compliance for a water user would appear to depend on whether the owner of a water right is making efficient use of that right.  Among the factual findings in Ecology's notice of violation and order are statements that MVID diverts water from 303(d) listed streams and that Ecology considers MVID to be wasteful or inefficient under standards for beneficial use.  Unfortunately, the standards for beneficial use and efficiency are highly uncertain and contingent on variable conditions of soil, season, crop, and the relative quality of a particular water year along a continuum between flood and drought.  See Department of Ecology v. Grimes, 121 Wn.2d 459 (1993) (applying a "reasonable efficiency" test).  The standards for beneficial use are also determined by local custom and the economies of water conveyance for a particular group of landowners with water rights that are distributed through a shared irrigation system.  Id.  In short, there are no clear and objective standards by which a water user might determine whether their use is reasonably efficient or vulnerable to reallocation based on a water quality violation order from Ecology.

In any event, if Ecology's justification for taking enforcement action on water quality boils down to questions of reasonable efficiency and beneficial use on water law, it begs the question why Ecology would take enforcement action under RCW ch. 90.48 rather than, or in addition to, statutes and processes for the administration of water rights.

C.        Is Ecology Following the California Model?

One possible explanation of Ecology's approach to MVID is the example provided by California, where courts have allowed the State Water Resources Control Board (the "Board") to exercise authority over water rights as a means to reallocation of rights to satisfy water quality standards.  In United States v. State Water Resources Control Board, 182 Cal. App. 3d 82, 98 (Cal. Ct. App. 1986), the California Court of Appeals held that California's Water Resources Control Board was authorized to regulate water rights to balance competing beneficial uses including protection of instream flows for fish and wildlife.  Accordingly, the court held that the Board could modify permits for existing water rights to equally apportion responsibility for maintaining water quality.  Id.  The court's decision was based on the broad statutory powers of the Board to manage water for beneficial uses in the public interest, including instream uses for recreation and protection of fish and wildlife.  Id. at 103-104 ("When determining appropriative water rights, the Board is expressly empowered to protect water quality as a matter of statewide interest.").  The court's decision was also supported by California's expansive interpretation of the public trust doctrine in National Audubon Soc'y v. Superior Court of Alpine County, 658 P.2d 709 (1983), which held that existing water rights diverted from nonnavigable tributaries to navigable water could be reallocated to protect the public trust.

If Ecology seeks to follow the California model, there are two major obstacles.  First, Washington's courts have held that the public trust doctrine does not provide Ecology with authority or duties for the management and modification of water rights.  R.D. Merrill v. Pollution Control Hearings Board, 137 Wn.2d 118, 134 (1999); Rettkowski v. Department of Ecology, 122 Wn.2d 219, 232 (1993).  Second, Ecology has not based its action against MVID on an express statutory authorization for the modification of appropriative water rights for the protection of water quality.  Rather, Ecology appears to have based its order on RCW 90.48.080 (prohibiting unlawful discharges) and on RCW 90.03.400 (prohibiting waste of water).

D.        Ecology's Enforcement Action Leaves Many Questions Unanswered Under Water Law.

Hidden within Ecology's effort to enforce water quality requirements is what appears to be a more conventional approach to regulation of water rights.  It is therefore surprising that Ecology has ventured a bold and unprecedented application of RCW 90.48.080 when Ecology believes that its MVID order is justified under RCW 90.03.400. 

Under water law, MVID claims water rights dating from the turn of the century (1900).  Ecology maintains that MVID is not entitled to the full use of its claimed rights based on changes in historic use and on an alleged adverse effects on salmon recovery and Ecology's instream flow rights.  See WAC 173-548-020.  While there is no doubt that Ecology may claim and protect its instream flow rights in the Methow and Twisp, Ecology's instream rights have a priority date of 1976 and are junior to the MVID right.  RCW 90.03.345; RCW 90.22.030; WAC 173-548-070.  Consequently, Ecology's MVID order cannot successfully assert a theory that MVID's valid, senior water rights have impaired or damaged Ecology's junior instream flow rights.

In its notice of violation, Ecology claims a violation of RCW 90.03.400, which makes unlawful the unauthorized use of water to which another is entitled or the willful or negligent waste of water "to the detriment of another."  Ecology appears to support this theory on grounds that MVID is not making beneficial or reasonably efficient use of all the water it diverts and has therefore wasted water to the detriment of another.  The only other water right mentioned in Ecology's order is the State's instream flow right.  It appears, therefore, that Ecology is alleging that MVID has wasted water to the detriment of the State's instream flow rights.  Like Ecology's interpretation of RCW 90.48.080, such a claim also appears to be without reported precedent.

Ecology's allegations could also be construed as a claim against MVID for abandonment or relinquishment, but Ecology has not alleged or followed that process.  See RCW 90.14.130; RCW 90.14.200.  Rather, Ecology has followed the process for a cease and desist order under RCW 43.27A.190, with an opportunity for appeal to the PCHB.  This approach may raise interesting questions under Rettkowski, which prohibits Ecology and the PCHB from adjudicating competing water rights claims by a cease and desist order based on Ecology's own determination of priority and scope for a water right.

III.  CONCLUSION

The MVID appeal before the PCHB is more than an enforcement dispute between MVID and Ecology.  It raises a pivotal and far-reaching issue whether water pollution control authorities may be used to regulate water rights.  This is an issue of first impression that has not been resolved by the tribunals and courts of Washington State.  If it is resolved in Ecology's favor, it opens the door to a revolution in the management of water resources and regulation of water rights.

 

Attachment 1
Notice of Violation

 

Attachment 2
Order

Attachment 3
WQLS List for Temperature and Flow
Washington State, 1998

 

WRIA

Waterbody

Parameter

1

Anderson Creek

Temperature

1

Bertrand Creek

Instream Flow

1

Boulder Creek

Temperature

1

Canyon (Lake) Creek

Temperature

1

Canyon Creek

Temperature

1

Cavanaugh Creek

Temperature

1

Cornell Creek

Temperature

1

Fishtrap Creek

Instream Flow

1

Gallop Creek

Temperature

1

Hoff Creek

Temperature

1

Howard Creek

Temperature

1

Nooksack River M.F.

Temperature

1

Nooksack River S.F.

Instream Flow

1

Nooksack River S.F.

Temperature

1

Racehorse Creek

Temperature

1

Roaring Creek

Temperature

1

Whatcom Creek

Temperature

3

Carpenter Creek

Temperature

3

Coal Creek

Temperature

3

Cumberland Creek

Temperature

3

Day Creek

Temperature

3

Fisher Creek

Temperature

3

Hansen Creek

Temperature

3

Indian (Big) Slough

Temperature

3

Joe Leary Slough

Temperature

3

Jones Creek

Temperature

3

Mud Lake Creek

Temperature

3

Nookchamps Creek

Temperature

3

Otter Pond Creek

Temperature

3

Red Creek

Temperature

3

Turner Creek

Temperature

3

Wiseman Creek

Temperature

4

Finney Creek

Temperature

4

Grandy Creek

Temperature

4

Jackman Creek

Temperature

5

Deer Creek

Temperature

5

Higgins Creek

Temperature

5

Little Deer Creek

Temperature

5

Pilchuck Creek

Temperature

5

Stilliguamish River

Temperature

5

Stilliguamish River N.F.

Temperature

5

Stilliguamish River S.F.

Temperature

7

Pilchuck River

Temperature

7

Skykomish River

Temperature

7

Snohomish River

Temperature

7

Snoqualmie River

Temperature

7

Snoqualmie River S.F.

Temperature

7

Wallace River

Temperature

8

Fairweather Bay Creek

Temperature

8

Issaquah Creek

Temperature

8

May Creek

Temperature

8

Sammamish River

Temperature

9

Gale Creek

Temperature

9

Green River

Temperature

9

Hill