The Klamath Adjudication: Will It Ever End?

Oregon’s determination of the relative water rights in the Klamath River Basin – the Klamath Basin Adjudication (KBA) – began in 1975. This spring the last contested case was heard. To an outside observer, it might appear that this three-decade-plus affair is at last nearing its end. There has understandably been a certain sense of relief about the coming conclusion of this astonishingly long and expensive process. Despite the temptation to conclude that the worst is over and the end is near, such optimism is premature: in fact a great deal more remains of this KBA. Arguably even more difficult legal labors lie ahead. This article describes the years-long process still remaining before it can finally be said that the KBA is finished.

Background

In order to describe what is to come, it is necessary first to look back.[1] The KBA is conducted pursuant to Oregon Revised Statutes (ORS) Chapter 539, governing the determination of water rights that predate Oregon’s 1909 Water Rights Act. Many users have a potential claim to pre-1909 rights. These include various agencies of the United States, irrigation districts, large numbers of individual irrigators, and the Klamath Tribes, who have sought to determine their rights to waters in the Klamath Basin to support the hunting and fishing rights reserved to them in the 1864 treaty creating the Klamath Reservation. To begin the process of adjudicating all these varied claims, the Oregon Water Resources Department (OWRD) in 1975 notified over 25,000 local property owners that it was initiating the adjudication, and that parties intending to claim water in the basin would need to file a notice of intent to state a claim. About 1,200 notices were filed.

Shortly afterward, the adjudication progress was held up by two litigation detours, each in federal court. In the first case, the federal court was asked to determine whether the Tribes had any water rights at all. Litigation continued until 1983, when the Ninth Circuit issued its landmark decision in U.S. v. Adair,[2] ruling that the Tribes did retain certain rights to water to support their traditional hunting and fishing activities on the reservation. The Court left it to the state of Oregon to quantify this right.

In the meantime, OWRD was required to investigate the Klamath River and related waters, establishing baseline information that would be used by all the parties going forward. Once this large task was completed, OWRD moved ahead, providing a second opportunity to file claims, including federal claims, by February 1991. Approximately 300 private claims were filed. However, the United States and the Tribes contested Oregon’s authority to force them to participate in the adjudication processes before a state administrative agency, resulting in another trip to the Ninth Circuit. In 1994, the Court issued its decision in U.S. v. Oregon,[3] requiring this participation. Four hundred additional federal claims were filed in 1996-97, twenty-one years after the process began.

Upon completion of claims filing, OWRD prepared a preliminary evaluation of each claim, followed by open inspection. OWRD noticed all interested parties of the right to inspect the evidence, which they did. Finally, the contest period began,[4] and upon receipt of contests, OWRD set a schedule for hearings. Under Oregon law, most administrative hearings are held before the Office of Administrative Hearings (OAH), and these were no exception. After lengthy pre-hearing processes, an OAH Administrative Law Judge (ALJ) took evidence from the claimants and contestants. The claims over the federal reserved water rights of the Klamath tribes, including claims filed by the U.S. Bureau of Indian Affairs on the Tribes’ behalf, were heard last. These were consolidated by water body (each of the four rivers tributary to Upper Klamath Lake, the Klamath Marsh, the so-called Seeps and Springs, Upper Klamath Lake itself, and the Klamath River), and the ALJ’s decisions are due between December 2011 and March 2012.

To OWRD …

While the ALJ’s rulings will close an important chapter in the KBA, they will also mark the beginning of several more. The function of OAH is to provide a recommended decision to the OWRD, and the ALJ’s rulings will be styled as “proposed orders.”[5] Each proposed order is a significant undertaking, to be based on the complete record, and including findings as to each issue of fact and as to each ultimate fact required to support the proposed order, along with a statement of the underlying facts supporting each finding; conclusions of law based on the findings of fact and applicable law; an explanation of the reasoning that leads from the findings of fact to the legal conclusion(s); and the action the ALJ recommends OWRD take as a result of the facts found and the legal conclusions made.[6]

The parties then file exceptions. If the recommended action in a proposed order is adverse to any party, that party may file exceptions and present argument to OWRD stating its case against the ALJ’s recommendations.[7] OWRD may request that the ALJ review the exceptions and either provide a response or revise a proposed order as the ALJ sees fit.[8] However, the ALJ cannot consider new evidence unless OWRD requests further hearing.[9] Upon consideration of all timely exceptions and argument, OWRD must issue a final order.[10] Parties may petition for reconsideration or rehearing of the final order within 60 days, but through resolution of such request, the final order stands.[11]

“As soon as practicable” after OWRD has compiled all the data necessary to do so, OWRD must prepare its findings of fact and conclusions related to the relative water rights in the basin and issue what the law calls its “findings and order of determination,” setting out OWRD’s position on all of the rights to water in the basin.

OWRD’s order of determination is a critically important step in the KBA process, because at this point OWRD’s conclusions may take the force of law. Unless stayed, the order of determination “shall be in full force and effect from the date of its entry in the records of the department.”[12] OWRD must also issue certificates to each person awarded rights in the determination.[13] During the pendency of the circuit court proceedings described below, “and until a certified copy of the judgment, order or decree of the court is transmitted to [OWRD], the division of water from the stream involved in the appeal shall be made in accordance with the order of [OWRD].”[14] Immediate implementation of the order of determination may be avoided by requesting a stay pending judicial decree, but this requires a bond and commitment by the party requesting stay to pay any damages arising as a consequence.[15]

… to the Courts …

Upon completion of the order of determination, OWRD must certify the order and file it and its supporting evidence with the Klamath County Circuit Court.[16] After some additional preliminaries,[17] any party may file exceptions in the circuit court to OWRD’s findings and order of determination, which exceptions must “state with reasonable certainty the grounds and shall specify the particular paragraphs or parts of the findings and order excepted to.”[18]

In the highly unlikely event that no exceptions are filed, the court could immediately enter a decree affirming OWRD’s determination.[19] Otherwise, the court hears the exceptions. “The court may, if necessary, remand the case for further testimony, to be taken by [OWRD] or by a referee appointed by the court for that purpose. Upon completion of the testimony and its report to the director, [OWRD] may be required to make a further determination.”[20] After the hearing and assuming no further testimony or findings, the court “shall enter a judgment affirming or modifying the order of the director as the court considers proper.”[21] The decree is then sent to OWRD, which keeps it on record and issues instructions to watermasters to effect the decree.[22]

After all this, “[a]n appeal may be taken to the [Oregon] Court of Appeals from the judgment.”[23] After the Court of Appeals rules, the parties must petition for review by the Oregon Supreme Court. Although it is never possible to predict whether review will be granted, the importance of the Klamath Basin Adjudication, together with the federal issues that the courts will be required to address, make the case a good candidate. The decision of the Oregon Supreme Court is appealable only to the Supreme Court of the United States.[24] While it is no more possible to predict the cases the U.S. Supreme Court will hear, the case may again be a good candidate. Barring attempts to remove the case to district court earlier or secure federal review through a declaratory action, appeal to the U.S. Supreme Court would be the only available means to secure federal judicial review of rulings on any legal conclusions related to federal reserved water rights.

After all appeals are exhausted, OWRD or any party has six months in which to apply for rehearing of the judgment.[25] Once that is resolved, the KBA is finally done.

… and Beyond?

In its thirty-sixth year of adjudication, we are nearing a preliminary determination on the relative rights to waters of the Klamath Basin. As explained above, the process is by no means over. OWRD must make its ruling, and the issues will then go to the courts. Whether the process plays out in Oregon courts, federal courts, or both, we can be sure that it will be with us for many years to come. That, of course, assumes that no court remands to OWRD for further work – and another climb up through the courts.

For further information, please contact Douglas MacDougal, Adam Orford, or any member of the firm’s Water Resources group.