WAGONER COUNTY RURAL WATER DISTRICT NO. 2 v. GRAND RIVER DAM AUTHORITY

WAGONER COUNTY RURAL WATER DISTRICT NO. 2 v. GRAND RIVER DAM AUTHORITY
2010 OK CIV APP 95
Case Number: 107078
Decided: 05/07/2010
Mandate Issued: 10/08/2010
DIVISION II
THE COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA, DIVISION II

WAGONER COUNTY RURAL WATER DISTRICT NO. 2, WAGONER COUNTY RURAL WATER DISTRICT NO. 7, WAGONER COUNTY RURAL WATER DISTRICT NO. 9, CHEROKEE COUNTY RURAL WATER DISTRICT NO. 11, PEGGS WATER COMPANY and TRI-B NURSERY, INC., Plaintiffs/Appellants,
v.
GRAND RIVER DAM AUTHORITY, Defendant/Appellee.

APPEAL FROM THE DISTRICT COURT OF CRAIG COUNTY, OKLAHOMA

HONORABLE TERRY H. MCBRIDE, TRIAL JUDGE

AFFIRMED

Steven M. Harris, C. Matthew Bickell, DOYLE HARRIS DAVIS & HAUGHEY, Tulsa, Oklahoma, for Plaintiffs/Appellants
James M. Reed, John T. Richer, HALL, ESTILL, HARDWICK, GABLE, GOLDEN & NELSON, P.C., Tulsa, Oklahoma, for Defendant/Appellee

JOHN F. FISCHER, PRESIDING JUDGE:

¶1 Wagoner County Rural Water District No. 2, Wagoner County Rural Water District No. 7, Wagoner County Rural Water District No. 9, Cherokee County Rural Water District No. 11, Peggs Water Company and Tri-B Nursery, Inc., (Water Districts), appeal from an order of the district court dismissing their First Amended Petition. The appeal has been assigned to the accelerated docket pursuant to Oklahoma Supreme Court Rule 1.36(b),

BACKGROUND

¶2 Each of the Water District plaintiffs is required to pay the Grand River Dam Authority for water. The Water Districts filed suit alleging that the GRDA does not have any rights to the water for which they are being charged. The GRDA moved to dismiss pursuant to

STANDARD OF REVIEW

¶3 Appellate review of GRDA's motion to dismiss is governed by the standard set forth in National Diversified Business Services, Inc. v. Corporate Financial Opportunities, Inc.,

A motion to dismiss for failure to state a claim upon which relief can be granted may not be sustained unless it should appear without doubt that the plaintiff can prove no set of facts in support of the stated claim for relief.

Id.

A motion for summary disposition submits the controversy to the court for application of the pertinent law to uncontroverted facts. The tendered evidentiary materials will warrant summary relief if all material facts are undisputed and supportive of but a single inference that favors the movant.

Id.

ANALYSIS

¶4 The dispositive issue in this appeal requires a determination of the ownership of the water sold by the GRDA to the Water Districts. If the GRDA owns the right to sell the water at issue, then the Water Districts cannot state any cognizable legal theory to support their claim, and the district court properly dismissed their petition.

¶5 The material facts in this case are not in dispute. The four water districts were organized pursuant to the Rural Water, Sewer, Gas and Solid Waste Management Districts Act,

The GRDA was created in 1935.

There is hereby created within the State of Oklahoma a conservation and reclamation district to be known as "Grand River Dam Authority", hereinafter called the district, and consisting of that part of the State of Oklahoma which is included within the boundaries of the Counties of Adair, Cherokee, Craig, Delaware, Mayes, Muskogee, Ottawa, Osage, Pawnee, Payne, Lincoln, Logan, Tulsa, Wagoner, Sequoyah, Haskell, Latimer, Pittsburg, McIntosh, Creek, Okmulgee, Nowata, Washington and Rogers. Such district shall be, and is hereby declared to be, a governmental agency of the State of Oklahoma, body politic and corporate, with powers of government and with the authority to exercise the rights, privileges and functions hereinafter specified, including the control, storing, preservation and distribution of the waters of the Grand River and its tributaries, for irrigation, power and other useful purposes and reclamation and irrigation of arid, semiarid and other lands needing irrigation, and the conservation and development of the forests, minerals, land, water and other resources and the conservation and development of hydroelectric power and other electrical energy, from whatever source derived, of the State of Oklahoma.

82 O.S.2001 § 861. The GRDA is authorized to "control, store and preserve, within the boundaries of the district, the waters of Grand River and its tributaries, for any useful purpose, and to use, distribute and sell the same within the boundaries of the district." 82 O.S.2001 § 862(a). Nonetheless, the Water Districts argue that the GRDA does not "control, store and preserve" the water they are being sold. That argument is alternatively based on an interpretation of a United States Supreme Court decision and interpretation of Oklahoma statutes.

I. The Federal Law Argument

¶6 The right to water consists of two basic but not mutually exclusive interests. One is public and the other private. As to the public interest, the general rule is that the United States owns the superior right to navigable water. See e.g., U.S. v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 62, 33 S. Ct. 667, 671 (1913), in which the Supreme Court held that title to real property:

is subordinate to the public right of navigation, and however helpful in protecting the owner against the acts of third parties, is of no avail against the exercise of the great and absolute power of Congress over the improvement of navigable rivers. That power of use and control comes from the power to regulate commerce between the states and with foreign nations. It includes navigation and subjects every navigable river to the control of Congress.

Generally, states own the superior right to non-navigable water.

[F]ew public interests are more obvious, indisputable, and independent of particular theory than the interest of the public of a state to maintain the rivers that are wholly within it substantially undiminished, except by such drafts upon them as the guardian of the public welfare may permit for the purpose of turning them to a more perfect use.

Hudson County Water Co. v. McCarter

¶7 The private interest consists of two rights, riparian and appropriative. Franco-American Charolaise, Ltd. v. Okla. Water Res. Bd.,

¶8 In 1956, the GRDA sued the United States over the right to generate electric power from the Fort Gibson reservoir. The GRDA had recovered compensation when Fort Gibson dam was built for a 70-acre tract of land condemned, for the flow of the Grand River over that land, and for the costs of relocating its electric power transmission lines. The GRDA also claimed it had been deprived of its exclusive power to generate hydroelectric power within the Grand River water district. The Court of Claims found that the Government was liable for taking the GRDA's water power rights, and the Government appealed. The decision on which the Water Districts rely, United States v. Grand River Dam Auth.,

¶9 The three dam projects on the Grand River had been incorporated into the Flood Control Act by Congress in 1941. Fort Gibson was completed as "an integral part of a comprehensive plan for the regulation of navigation, the control of floods, and the production of power on the Arkansas and its tributaries." Id. at 230, 80 S. Ct. at 1135. Although recognizing state ownership of non-navigable waters, the Supreme Court found "no constitutional reason why Congress cannot, under the commerce power treat the watersheds as a key to flood control on navigable streams and their tributaries." Id. at 232, 80 S. Ct. at 1136. Pursuant to the Commerce Clause, U.S. Const., art. I, § 8, cl. 3, the Court found this interest "superior" to any state interest. Relying on Omnia Commercial Co. v. United States,

¶10 This case does not hold, as the Water Districts argue, that the GRDA failed to prove that it had any right to the water in the Fort Gibson reservoir. In fact, the Supreme Court specifically refused to reach the issue argued by the United States: the federal government's right to navigable water preempts state created property rights to non-navigable water. The case merely holds that the right of the GRDA to produce electricity from the Fort Gibson reservoir was inferior to the right of the federal government to do so.

¶11 As previously discussed, many and often competing interests may have legitimate claims to the same water. The fact that one interest may be superior to another does not extinguish the inferior interest; it merely establishes the priority of the superior use. Further, "the existence of unexercised federal regulatory power does not foreclose state regulation of its water resources, [or] of the uses of water within the state . . . ." Sporhase v. Nebraska,

Although it still may be an obstruction in fact, [it] is not so in contemplation of law. We have already said, and the principle is undoubted, that the act of the legislature of Virginia conferred full authority to erect and maintain the bridge, subject to the exercise of the power of Congress to regulate the navigation of the river. That body having, in the exercise of this power, regulated the navigation consistent with its preservation and continuation, the authority to maintain it would seem to be complete. That authority combines the concurrent powers of both governments, state and Federal, which, if not sufficient, certainly none can be found in our system of government.

Id.

¶12 Finally, the Water Districts' reliance on

The owner of any works for the storage, diversion or carriage of water, which contain water in excess of his needs for irrigation or other beneficial use for which it has been appropriated, shall be required to deliver such surplus, at reasonable rates for storage or carriage, or both, as the case may be, to the parties entitled to the use of the water for beneficial purposes. . . .

¶13 The Water Districts argue that section 105.21 conveys to the United States ownership of, or at least the right to sell, water in the Fort Gibson reservoir, because the federal government owns the Fort Gibson dam. No other authority is cited for this proposition and no reported case has interpreted this statute. Nonetheless, the Water Districts' construction is irreconcilable with other provisions in the Waters and Water Rights Act. Section 105.9 requires that any "federal governmental agency . . . intending to acquire the right to the beneficial use of any water shall . . . before taking the same from any constructed works, make an application to the Board . . . ." Section 105.29 requires officers of the United States "authorized by law to construct works for the utilization of waters within the state" to notify the Water Resources Board of their intent to utilize specified water within the State. The Board may approve, reduce or reject the United States' intended utilization. The fact that the United States has the right to build a dam for flood control and hydroelectric generating purposes does not establish the federal government's ownership of the water affected. As previously discussed, the fundamental right to the water of the Grand River, including that water within the Fort Gibson reservoir, belongs to the State of Oklahoma and has been transferred to the GRDA. The Water Districts therefore fail to establish that the United States has the right to sell the water at issue.

II. The State Law Argument

¶14 The Water Districts' State law argument relies on two statutes. The first,

¶15 Other than these statutory citations, the Water Districts cite no authority to support their construction of these statutes. Nonetheless, principles of statutory construction are generally accepted.

The determination of legislative intent controls statutory interpretation. The intent is ascertained from the whole act based on its general purpose and objective. In construing statutes, relevant provisions must be considered together whenever possible to give full force and effect to each. To ascertain intent, we look to the language of the pertinent statute. We presume that the Legislature intends what it expresses. Except when a contrary intention plainly appears, terms are given their plain and ordinary meaning.

Oklahoma Ass'n For Equitable Taxation v. City of Oklahoma City,

¶16 First, the Water Districts' construction of section 890 is inconsistent with its interpretation of section 887. The water flowing out of Fort Gibson reservoir and excluded from GRDA authority pursuant to section 890 flowed into that reservoir from waters included within the Grand River water district, and waters that the Water Districts concede are specifically included within the GRDA's authority pursuant to section 887. Although the authority of the GRDA over water below the Fort Gibson dam may be limited, the non-navigable nature of that water does not change until it reaches the Arkansas River.

¶17 Second, the Water Districts' construction of section 887 is unacceptably narrow. The designation of particular waters, the Pensacola and Markham Ferry reservoirs, as non-navigable does not require the conclusion that all reservoirs not designated are navigable. This is particularly true when the statute begins with the designation of the Grand River as non-navigable. The State's ownership depends on the non-navigable nature of the water, not the State's articulation of that fact.

¶18 Third, the Water Districts' construction of section 887 fails to reconcile the authority granted to the GRDA pursuant to sections 861 and 862:

There is hereby created within the State of Oklahoma a conservation and reclamation district to be known as "Grand River Dam Authority" . . . consisting of that part of the State of Oklahoma which is included within the boundaries of the Counties of Adair, Cherokee, Craig, Delaware, Mayes, Muskogee, Ottawa, Osage, Pawnee, Payne, Lincoln, Logan, Tulsa, Wagoner, Sequoyah, Haskell, Latimer, Pittsburg, McIntosh, Creek, Okmulgee, Nowata, Washington and Rogers.

Within that district, the GRDA has the right to "the control, storing, preservation and distribution of the waters of the Grand River and its tributaries."

¶19 Finally, the GRDA has been charging, and the Water Districts have been paying the GRDA, for the water at issue for a substantial period of time even before the Water Districts began their legal challenges to the GRDA's right to do so.

It is a well settled rule that the contemporaneous construction of a statute by those charged with its execution and application, especially when it has long prevailed, while not controlling, is entitled to great weight and should not be disregarded or overturned except for cogent reasons, and unless it be clear that such construction is erroneous. The courts are especially reluctant to overturn a long standing executive or departmental construction where great interests have grown up under it and will be disturbed or destroyed by the announcement of a new rule, or where parties who have contracted with the government upon the faith of such construction will be prejudiced.

Oral Roberts Univ. v. Oklahoma Tax Comm'n

CONCLUSION