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Willamette Water Co. v. WaterWatch of Oregon, Inc.

Court of Appeals of Oregon

November 15, 2017

WILLAMETTE WATER CO., an Oregon corporation, Petitioner,
v.
WATERWATCH OF OREGON, INC., an Oregon non-profit corporation; and Oregon Water Resources Commission, Respondents.

          Argued and submitted November 22, 2016

         Oregon Water Resources Commission S87330.

          Alan M. Sorem argued the cause for petitioner. With him on the opening brief was Saalfeld Griggs PC. With him on the reply brief were Stephanie L. Schuyler and Saalfeld Griggs PC.

          Lisa A. Brown argued the cause and fled the briefs for respondent WaterWatch of Oregon, Inc.

          Denise G. Fjordbeck, Assistant Attorney General, argued the cause for respondent Oregon Water Resources Commission. With her on the briefs were Ellen F. Rosenblum, Attorney General, and Paul L. Smith, Deputy Solicitor General.

          Before Ortega, Presiding Judge, and Egan, Judge, and Lagesen, Judge.

         Case Summary: Willamette Water Co. (company) petitions for judicial review of a final order of the Water Resources Commission (commission), denying the company's permit application under ORS 537.130. The company argues that the commission's conclusion was based on (1) an erroneous interpretation of one of its administrative rules, OAR 690-005-0035(4), (2) an erroneous interpretation of ORS 537.230, and (3) a factual finding not supported by substantial evidence. Held: The Court of Appeals rejected the company's arguments. The commission did not erroneously interpret the rule or statute at issue. The company did not demonstrate that the commission's interpretation of OAR 690-005-0035(4) was [288 Or.App. 779] not plausible, in view of the rule's text, context, or other applicable source of law. The finding that the permit would take a minimum of 10 years to complete established that the company's proposal did not comport with ORS 537.230; it would have been error for the commission to approve a permit for a nonmunicipal water use when the facts before the commission established that the work under the permit could not be completed within the five-year period specified in ORS 537.230. Finally, nonexcluded portions of an affidavit provided substantial evidence for the challenged factual finding.

         Affirmed.

         

         [288 Or.App. 780]LAGESEN, J.

         Petitioner Willamette Water Co. (company) petitions for judicial review of a final order of the Water Resources Commission (commission). In that order, the commission denied the company's application under ORS 537.130 for a permit to divert 34.0 cubic feet per second (cfs) of water from the McKenzie River for a quasi-municipal use. The commission determined that the statutory presumption that the company's proposed use was in the public interest was overcome because the proposed use did not comport with the commission's rules, and also because the company could not complete the construction of its proposed project within five years, as required by the terms of ORS 537.230(1).[1]Following a consideration of the statutory "public interest" factors listed in ORS 537.170(8), the commission further determined that it was unable to conclude that the issuance of the permit would "not impair or be detrimental to the public interest." For those reasons, the commission concluded it could not approve the company's permit request.

         On review, in two assignments of error, [2] the company challenges that conclusion, contending it is based on an erroneous interpretation of one of the commission's administrative rules, an erroneous interpretation of a pertinent statutory provision, and a factual finding that is not supported by substantial evidence. The company seeks a reversal of the order or a remand to the commission with a direction to approve its application. Because we reject the company's arguments, we do neither and affirm.[3]

         [288 Or.App. 781] I. BACKGROUND

         A. Regulatory Framework

         "All water within the state from all sources of water supply belongs to the public." ORS 537.110. A person or entity seeking to appropriate public surface waters in Oregon generally must obtain a permit. ORS 537.130. To obtain a permit, the person or entity must submit an application to the Water Resources Department (the department). ORS 537.140(1)(a). If the application is "complete and not defective, " and does not propose a use prohibited by ORS chapter 538, the department must conduct a preliminary review of the application, and notify the applicant of the results of that preliminary review. ORS 537.150. If the applicant does not direct the department to stop processing the application, the department must "complete application review and issue a proposed final order approving or denying the application or approving the application with modifications or conditions." ORS 537.153(1).

         ORS 537.153 sets forth the framework for the department's review process. ORS 537.153(2) provides that there is a rebuttable presumption that a water use proposed in a permit application is in the public interest:

"In reviewing the application under subsection (1) of this section, the department shall presume that a proposed use will not impair or be detrimental to the public interest if the proposed use is allowed in the applicable basin program established pursuant to ORS 536.300 and 536.340 or given a preference under ORS 536.310(12), if water is available, if the proposed use will not injure other water rights and if the proposed use complies with the rules of the Water Resources Commission. This shall be a rebuttable presumption [.]"

         The statute then specifies how the presumption may be rebutted, providing that the presumption

"may be overcome by a preponderance of evidence that either:
[288 Or.App. 782] "(a) One or more of the criteria for establishing the presumption are not satisfied; or
"(b) The proposed use will impair or be detrimental to the public interest as demonstrated in comments, in a protest under subsection (6) of this section or in a finding of the department that shows:
"(A) The specific public interest under ORS 537.170(8) that would be impaired or detrimentally affected; and
"(B) Specifically how the identified public interest would be impaired or detrimentally affected."

ORS 537.153(2).

         If the department determines that the presumption has been established, then it must include that determination in its proposed final order on the permit application. ORS 537.153(3)(g). If the presumption is rebutted, the director of the department or, when appropriate, the commission, must evaluate whether the proposed use is consistent with the public interest before issuing a final order on the ...


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