On September 16, 2011 the Nebraska Supreme Court upheld the constitutionality of a 2007 law that allowed local natural resources districts ("NRDs") to levy an occupation tax to manage water resources.  The case, Kiplinger v. Nebraska Department of Natural Resources et al., 283 Neb. 237 (2011), arose following the adoption of LB 701 by the Nebraska Legislature in 2007.  The Legislature adopted the law to empower NRDs to impose a tax to collect necessary funds to manage water resources.  The central feature to the tax is that it is limited to persons who have indicated their intent to irrigate in the next season.  Persons may opt out of the tax on an annual basis by agreeing not to irrigate. Landowners objecting to the tax filed suit in the District Court of Lancaster County, Nebraska against the NRDs and the Dept. of Natural Resources.  The landowners argued that the tax violated a variety of Nebraska constitutional provisions, including that the tax was tantamount to a property tax.  The District Court held the tax was constitutional and the Supreme Court affirmed.  The NRDs were represented by water lawyers at Blankenau Wilmoth.

On July 8, 2011 several senior water right holders in the State of Idaho filed “calls” for water administration with the Idaho Department of Water Resources (“IDWR”).  The senior appropriators alleged that junior ground water pumpers materially injured their surface water rights for fish propagation and demanded that IDWR issue closing notices.  Because administration could impact the use of hundreds of irrigators, municipalities and commercial/industrial entities, IDWR declined to take immediate action and, on July 28, 2011, scheduled a prehearing conference to develop a schedule to consider the calls.  The approach taken by IDWR is intended to ensure closing notices are properly issued to avoid wrongful harm to other water users and to avoid litigation.  No order scheduling an evidentiary hearing has yet been released.

The Corps of Engineers maintains extensive infrastructure, including six of the country’s largest reservoirs, on the mainstem of the Missouri River.  One of the dominant functions of those facilities is to prevent widespread damage from flooding.  Yet, runoff above Sioux City, for May and June 2011 totaled 24.3 million acre feet, just shy of the normal annual runoff in the Basin.  In response, the Corps has made record releases from all the mainstem dams for months.  These operations have destroyed private agricultural lands, flooded public property, compromised infrastructure and closed multiple highways and river crossings.  In the wake of these floods, potential federal liability has become a hot button issue.  Litigants, however, face major hurdles in the Federal Tort Claims Act and the Flood Control Act of 1928.  Under the former, the federal government is exempt from liability for discretionary actions.  Under the latter, the government cannot be sued for damages resulting from federally supported damage reduction projects or floodwaters.  Only once these immunity bars are overcome might a court entertain claims of negligence or other malfeasance.  While the laws’ immunity provisions are broad, they can be overcome and will likely be tested in the coming months.

On July 29, 2011, the Nebraska Supreme Court dismissed an appeal by the Frenchman-Cambridge Irrigation District (“FCID”) from an order of the Nebraska Department of Natural Resources (“DNR”) for lack of standing.  Frenchman-Cambridge Irrigation District v. Department of Natural Resources, 281 Neb. 992 (2011).  The case arose when FCID brought an administrative action before the DNR to reevaluate portions of the Republican River Basin to determine whether those portions should be declared overappropriated rather than fully appropriated.  FCID argued that Neb. Rev. Stat. § 46-713(4)(a) allows DNR to declare a river basin to be overappropriated if that basin was subject to an “interstate cooperative agreement” as of July 16, 2004.  FCID further argued that the Republican River Compact was an interstate cooperative agreement within the meaning of the statute.  At the time this issue was before the DNR, DNR and FCID stipulated that the District was an “interested party” entitled to raise its claims.  After the agency matter concluded, but before the Supreme Court held argument, the Court decided Central Nebraska Public Power District v. North Platte NRD, 280 Neb. 533, 788 N.W.2d 252 (2010) (“Central”).  At argument, DNR explained that the Central decision made clear that a party must properly plead facts sufficient to establish standing and that parties could not simply stipulate to this threshold jurisdictional standard.  The Supreme Court agreed stating: “The requirement of standing is fundamental to a court’s exercising jurisdiction, and litigants cannot confer subject matter jurisdiction on a judicial tribunal by either acquiescence or consent.” Supra at 1001.  The Court’s decision should alleviate the concerns raised by irrigation district representatives following the Central decision.  Contrary to those representatives, irrigation districts are not prohibited from raising such claims but rather must allege proper facts to demonstrate standing, just like any other party.