Where Do Political Subdivisions Stand Before Administrative Agencies?
Recently, in In re Application A-18503, 286 Neb. 611, 838 N.W.2d 242 (2013), the Nebraska Supreme Court had the opportunity to set out the contours of standing for a political subdivision, as well as an individual, to participate as a party in a contested case before a state agency proposing to act on an application to appropriate water. In In re A-18503, a divided Court held that no one has standing to object to the agency’s approval of the application because neither the individual nor the political subdivision alleged an injury in fact due to the agency’s approval of the application.
In In re Application A-18503, the Department of Natural Resources (“DNR”) had before it an application for the appropriation of over 400 cfs of water from the Niobrara River, an application that sought to appropriate water for which the necessary flow was almost never available.[i] Natural Resources Districts (“NRDs”) alleged that if the application was granted, a fully appropriated designation was likely under DNR’s then-current regulations, and due to the depletion of water available for appropriation in light of the approval, the NRDs would be forced to expend public funds pursuant to their statutory duties and responsibilities.
Because a designation of the basin as fully appropriated was not certain to result from DNR’s approval of the application, the majority In re Application A-18503 found the NRDs assertion of injury to be too remote and speculative to establish standing.[ii]
The holding in In re Application A-18503 merits a closer look at standing principles, and raises a number of questions regarding the ability of a political subdivision to establish standing when an agency’s proposed action will impair or alter the political subdivision’s ability to carry out its statutory duties and responsibilities.
In order to establish common law standing, a party must allege an injury in fact.[iii] The injury must be to the party itself, and must be distinct and palpable, as well as actual or imminent.[iv] Such injury must be fairly traced to the challenged action and be redressed by a favorable decision.[v] When interpreting common-law standing, the Court has looked to federal case law for guidance.[vi]
However, where constitutional or statutory provisions are inconsistent with the common law, the common law rules regarding standing do not apply.[vii] Statutes and agency regulations, which have the effect of statutory law[viii], have conferred broader standing than the common law.[ix] As such, the Court has looked to the legislative intent of a given statutory scheme and liberally interpreted standing principles.[x]
Statutes may also establish rights forming the basis of a party’s standing. [xi]The Court has held that where a political subdivision has expended time and money implementing its statutory duties, it should be allowed to participate in an action that may dismantle its efforts.[xii]
Prior to In re Application A-18503, the Court held that to have standing, a political subdivision must assert its own interests – not those of third parties.[xiii] Specifically, NRD could not establish standing by alleging that approval of an application by DNR may affect water rights of individuals located within an NRD to confer standing.[x]
The requirement that a political subdivision assert injury to its own interests was met in Middle Niobrara NRD v. Dept. of Natural Resources, wherein NRDs challenged DNR’s designation of the Lower Niobrara River Basin as fully appropriated. Under the Nebraska Ground Water Management and Protection Act (“NGWMPA”), NRDs and DNR are required to engage in an ongoing analysis of the availability of water and, when DNR designates a basin as fully appropriated, are to jointly develop integrated management plans (“IMPs”) to implement regulatory actions, including stays on the approval of new applications for the use of ground and surface water. [xiv]
The NRDs’ asserted injury in Middle Niobrara was that each would have to levy taxes and expend public funds pursuant to DNR’s fully-appropriated designation; the Court reasoned that DNR’s action required NRDs to implement regulatory measures that would be costly to the taxpayers located within each of the NRDs, as such, the NRDs established an actual injury to their statutory rights and responsibilities.[xv]
Importantly, the Middle Niobrara Court held, “Holding that the NRDs lacked standing here would leave political subdivisions at the mercy of superior agencies with no redress for actions that improperly or arbitrarily and capriciously require them to spend public funds.”[xvi]
The Middle Niobrara case highlights the interplay between agencies and political subdivisions that concurrently administer and regulate the use of water. The Court has noted that DNR itself “has no independent authority to regulate ground water users or administer ground water rights for the benefit of surface water appropriators… different agencies regulate ground water and surface water.”[xvii]
However, when DNR grants a surface water application that results in a fully-appropriated designation, DNR effectively regulates the use of ground water by triggering stepped-up regulation and expenditures by NRDs as to ground water use. And, under the GWMPA, NRDs may, jointly with DNR, develop an IMP in the absence of a fully appropriated designation to proactively manage the use of water.[xviii] Thus, actions by DNR prior to a determination of a basin as fully-appropriated can and do trigger actions by NRDs pursuant to their statutory rights and responsibilities.
The majority holding in In re Application A-18503 failed to recognize the reality of water administration and regulation in Nebraska, and uncouples review of and participation in DNR’s actions from the NRDs’ concurrent enforcement of clearly delineated duties and responsibilities to conjunctively manage water use. In effect, the only parties that would be directly affected by DNR’s approval of an application have no incentive to challenge it. Such interpretation of standing is likely to impair the ability of NRDs to fulfill their statutory responsibilities because they have been barred from participation before DNR in actions which trigger such duties – a result the Court explicitly sought to avoid in Middle Niobrara.[xix]
In re Application A-18503 calls into question the ability of a political subdivision with clearly delineated statutory duties to participate as a party in an agency’s action that triggers those very duties. The effect of In re Application A-18503 has yet to be determined, but given the reality that state agencies often dictate the interpretation of statutes that also trigger action by various political subdivisions, establishing standing may be unlikely absent a number of statutory amendments.
[i] In re Application A-18503, 286 Neb. 611, 630, 838 N.W.2d 242, 255 (2013)(dissent, J. Connolly).
[ii] In re Application A-18503, 286 Neb. 611, 618, 838 N.W.2d 242, 247-48 (2013).
[iii] Cent. Nebraska Pub. Power & Irr. Dist. v. N. Platte Natural Res. Dist., 280 Neb. 533, 542, 788 N.W.2d 252, 260 (2010).
[iv] Frenchman-Cambridge Irr. Dist. v. Dep’t of Natural Res., 281 Neb. 992, 998, 801 N.W.2d 253, 258 (2011).
[v] Butler Cnty. Sch. Dist. 12-0502 v. Freeholder Petitioners 1 through 10, 283 Neb. 903, 907, 814 N.W.2d 724, 728 (2012).
[vi] See, e.g., Ponderosa Ridge LLC v. Banner Cnty., 250 Neb. 944, 948, 554 N.W.2d 151, 156 (1996), citing Whitmore v. Arkansas, 495 U.S. 149, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990); Concerned Citizens of Kimball Cnty., Inc. v. Dep’t of Envtl. Control of State, 244 Neb. 152, 505 N.W.2d 654 (1993), citing Hunt v. Washington Apple Advertising Comm’n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977); and Field Club Home Owners League v. Zoning Bd. of Appeals of Omaha, 283 Neb. 847, 852, 814 N.W.2d 102, 106 (2012), citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).
[vii] Hall v. Progress Pig, Inc., 254 Neb. 150, 157, 575 N.W.2d 369, 374 (1998); In re Application A-18503, Water Div. 2-D., 286 Neb. 611, 637, 838 N.W.2d 242, 259 (2013) (dissent by J. Connolly).
[viii] Robbins v. Neth, 273 Neb. 115, 121, 728 N.W.2d 109, 115 (2007).
[ix] Schauer v. Grooms, 280 Neb. 426, 437, 786 N.W.2d 909, 920 (2010), citing Metropolitan Utilities Dist. v. Twin Platte NRD, 250 Neb. 442, 550 N.W.2d 907 (1996).
[x] See, e.g. Trailblazer Pipeline Co. v. State Bd. of Equalization & Assessment, 232 Neb. 823, 827, 442 N.W.2d 386, 388 (1989).
[xi] National Federation Of The Blind Of Nebraska, Inc., V. Outlook Nebraska, Inc., 2011 WL 4802643, *3 (D.Neb.), citing Warth v. Seldin, 422 U.S. 490, 500 (1975).
[xii] Butler County School District , et al v. Freeholder Petitioners, et al. 283 Neb. 903, 908, 814 N.W.2d 724, 729 (2012).
[xiii] Cent. Nebraska Pub. Power & Irr. Dist. v. N. Platte Natural Res. Dist., 280 Neb. 533, 788 N.W.2d 252 (2010).
[x] Metropolitan Utilities Dist. v. Twin Platte NRD, 250 Neb. 442, 550 N.W.2d 907 (1996).
[xiv] Neb. Rev. Stat. § 46-701 et. seq.
[xv] Middle Niobrara NRD v. Dept. of Natural Resources, 281 Neb. 634, 799 N.W.2d 305 (2011)
[xvi] Middle Niobrara Natural Res. Dist. v. Dep’t of Nat. Res., 281 Neb. 634, 647, 799 N.W.2d 305, 315 (2011).
[xvii] In re Cent. Nebraska Pub. Power & Irr. Dist., 270 Neb. 108, 117, 699 N.W.2d 372, 378 (2005).
[xviii] Neb. Rev. Stat. § 46-715(b).
[xix] Middle Niobrara Natural Res. Dist. v. Dep’t of Nat. Res., 281 Neb. 634, 647, 799 N.W.2d 305, 315 (2011).