Sub-file of A-3-LDG Re: Petition to Modify or Amend Final Decree

Filing 1512

ORDER granting #1173 Amended Motion to Modify or Amend the Final Decree Entered in this Case in 1944; denying as moot #1510 Motion for Case Management Conference. Signed by Judge Lloyd D. George on 9/30/2014. (Copies have been distributed pursuant to the NEF - KR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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UNITED STATES OF AMERICA,

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Plaintiff,

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v.

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Case No. 3:73-cv-00031-LDG

ORR WATER DITCH CO.,, et al.,

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ORDER

Defendants.

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Re: Petition to Amend or Modify Orr
Ditch Decree

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As the Court has previously recognized, there exists on a river system:
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a conflict between the pure theory of priority rights and the
practical realities of the river system. In effect, this conflict is
between the priority concept and the well-established principle
of western water law that water must be economically,
practically and beneficially used, so far as is possible. In this
Court's view, the waste of water must be avoided, for wasted
water benefits no one. Thus, the pure priority concept, which
would waste large amounts of water and other resources were it
to be strictly applied, must be modified.

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United States v. Alpine Land & Res. Co., 503 F.Supp. 877 (D. Nev. 1980). The Final
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Decree in this matter–the Orr Ditch Decree–embodies just such a modification, adjudging
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not only ownership and priority of water rights, but further establishing that such rights are
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subject to an obligation to divert only that amount of water that can be reasonably,

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economically and beneficially used. Management of a river system both protects vested

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water rights and furthers the efficient, beneficial use of water. To this end, the Orr Ditch

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Decree incorporated the Truckee River Agreement, which provides (among other things) a

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management framework for the operation of the river system through the upstream storage

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and release of the waters.

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Presently before the Court is a motion to amend or alter the Orr Ditch Decree. The

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Moving Parties ask this Court to adopt the Truckee River Operating Agreement (TROA),

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and supercede (with certain exceptions) the Truckee River Agreement (TRA) as the

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operating agreement for the river system. The Moving Parties indicate that the proposed

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modifications will govern the operation of reservoirs on the river system, will modify

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provisions concerning the “Floristan Rates,” will implement an interstate allocation of the

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waters of the Truckee River and Lake Tahoe basins, and will address claims of the

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Pyramid Lake Paiute Tribe to the remaining waters of the Truckee River water. The motion

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has been opposed. Having carefully considered the motion, all oppositions, and the

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exhibits, and the record of this litigation, the Court will grant the motion as requested.

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The Amended Motion to Alter or Amend the 1944 Final Decree (#1173) was filed by

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the United States of America, the State of Nevada, the State of California, the Pyramid

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Lake Paiute Tribe (Pyramid Tribe), the Truckee Meadows Water Authority (Water

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Authority), the Washoe County Water Conservation District (Conservation District) and the

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City of Fernley (collectively, the Moving Parties) pursuant to Section 205(a)(4) of the

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Truckee-Carson-Pyramid Lake Water Rights Settlement Act of 1990, Title II, Public Law

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101-618, 32 Stat. 3294, 3306 (the Settlem ent Act), and Rule 60(b)(5) of the Federal Rules

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of Civil Procedure. Previously, the Court determined that the Moving Parties were required

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to provide notice of this motion to all owners or potential owners of Decreed water rights.

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The Court further determined that such notice would be sufficient if (a) it provided each
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owner or potential owner of a Decreed water right with a short and plain statement

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summarizing the motion and the relief being sought, (b) it provided notice as to the

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methods by which each owner could readily access and read the full text of all relevant

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documents filed pertaining to this motion, and (c) and the Moving Parties provided a means

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by which each owner could readily access and read the full text of all filed documents. The

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Court further required procedures to ensure that all owners of Decreed water rights who

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elected to participate in the prosecution of this motion would have a means to be notified

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when documents were filed, would have a means to obtain a copy of such documents, and

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would have an opportunity to file responses. Oppositions to the motions have been filed by

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the Truckee-Carson Irrigation District (TCID) (#1469) (which opposition was joined by the

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City of Fallon (#1466) and Churchill County (#1474)), and respondents represented by

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Schroeder Law Offices (Schroeder Respondents) (#1465). Respondents represented by

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Martin Crowley of American Legal Services joined (#1475) the oppositions of both TCID

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and the Schroeder Respondents. In addition, responses hav e been filed by numerous

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owners of Decreed water rights who have elected to participate in these proceedings. See

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## 1217 - 1355, 1357 - 1360, 1364.

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As instructed by the United States Supreme Court in Rufo v. Inmates of Suffolk

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County Jail, 502 U.S. 367, 384 (1992), the modification of a consent decree is warranted

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when changes in either factual conditions or the law – or a combination of both – make

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compliance with the decree substantially more onerous, the decree proves unworkable

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because of unforeseen obstacles, or when continued enforcement of the decree without

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modification would be detrimental to the public interest. In light of this standard, and as

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further set forth in Rufo, a party seeking to modify a consent decree has the burden of

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showing (a) that changes in legal and factual circumstances warrant a modification, and (b)

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the proposed modification is suitably tailored to the changed circumstances.

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Both TCID and the Schroeder Respondents have raised various arguments

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suggesting that this Court’s authority to modify the Orr Ditch Decree is limited. They

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suggest the TRA remains a legally enforceable contract separate from the Orr Ditch

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Decree. As such, the terms of the TRA cannot be modified by this Court without the

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consent of all parties to that agreement, and all parties have not consented to the proposed

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modifications. The arguments are without merit. This Court has authority to modify all

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provisions of the Orr Ditch Decree, including those of the TRA, because the TRA no longer

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remains a contract separate from the Orr Ditch Decree, but was incorporated into the

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Decree. The United States, TCID, Washoe County Water Conservation District, Sierra

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Pacific Power Company, and individual water users signed the TRA. The TRA parties then

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filed the TRA with this Court and requested that it be incorporated into the Orr Ditch

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Decree. The Court granted that request, adopted the TRA, and made it part of the Orr

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Ditch Decree. In so doing, the TRA no longer existed solely as a contract between parties,

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but became part of a judicial decree subject to this Court’s continuing jurisdiction of this

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action. As such, this Court has authority to determine whether legal and factual

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circumstances have changed, whether those changes warrant modification of the Orr Ditch

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Decree (including those provisions incorporated from the TRA), and whether the proposed

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modifications are suitably tailored to the changed circumstances.

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The Moving Parties have submitted extensive evidence establishing both legal and

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factual changes in the circumstances of the Truckee River system since the entry of the

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Orr Ditch Decree. TCID concedes, and the Schroeder Respondents do not dispute, that

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changes in the law and facts have occurred since the Orr Ditch Decree was entered.

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Broadly stated, since the Orr Ditch Decree was entered, additional reservoirs in the

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Truckee River basin have been constructed and are being used for the management of

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water on the river system. Public awareness has increased, and has been acted upon,

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regarding the need to protect and preserve species, and to protect the quality of the
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environment. The United States has enacted legislation protecting species and water

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quality. The fish of Pyramid Lake have been legally listed for protection. The beneficial

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use of water has shifted (and continues to shift) away from agriculture and toward

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municipal and industrial uses, and other uses. The population depending on the water of

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the Truckee River has increased greatly and will continue to grow, while farmland irrigated

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with diverted water has decreased. The recognized beneficial uses of water have

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increased to include (among other uses) fish, wildlife and wetland purposes, water quality,

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and recreation. Efforts have been initiated and pursued to better m anage the river

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consistent with Decreed water rights, with some emphasis placed on increasing the

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quantity and quality of water flowing in the Truckee River to Pyramid Lake to enhance

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spawning flows. Litigation has resulted in judicial determinations affecting the manner in

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which water has or can be used. The necessity of maintaining a minimum flow in the

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Truckee River for purposes of generating electricity has dwindled. Congress enacted the

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Settlement Act, and in so doing recognized (a) the need to modify the management

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framework for operation of the river system, (b) the need to establish an interstate

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allocation of the waters of the Lake Tahoe and Truckee River basins as between California

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and Nevada, and (c) the need to resolve litigation concerning the Pyramid Tribe’s

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appropriation of water rights. In the Settlement Act, Congress directed the Secretary of the

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Interior to negotiate an operating agreement with the states of Nevada and California (after

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consultation with other parties designated by these sovereign parties). Congress further

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directed, in the Settlement Act, that the operating agreement shall provide for the operation

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of the river system to satisfy dam safety and flood control requirements; to provide for the

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enhancement of spawning flows in the Lower Truckee River for the Pyramid Lake fishery;

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to carry out the terms, conditions, and contingencies of the Preliminary Settlement

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Agreement as modified by the Ratification Agreement, to ensure that water is stored in and

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released from Truckee River reservoirs to satisfy the exercise of water rights in
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conformance with the Orr Ditch Decree and the Truckee River General Electric Decree.

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Congress also indicated, in the Settlement Act, that the operating agreement could include

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(but was not limited to) provisions regarding the administration of the operating agreement;

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means to assure compliance with the Preliminary Settlement Agreement; operations and

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procedures for using federal facilities to meet the Secretary’s responsibilities under the

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Endangered Species Act; operations of the river system that would not be changed;

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methods to diminish the likelihood of Lake Tahoe dropping below its natural rim;

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procedures for management and operation of the Truckee River reservoirs; procedures for

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operation of the Truckee River reservoirs for instream beneficial uses; operation of other

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reservoirs in the Truckee River basin to the extent the owners of affected storage rights

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become parties to the operating agreement; and procedures and criteria for implementing

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the interestate allocation of Truckee River water. Over the span of 20 years, the Moving

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Parties participated in the negotiations, and ultimately agreed upon the Truckee River

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Operating Agreement for the operation of the Truckee River system.

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TCID briefly observes that some of the changes identified by the Moving Parties

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were expected, that some of the changes were gradual, and that many of the changes

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occurred or began many years ago, including as soon as the Orr Ditch Decree was

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entered.1 The Court, however, is not limited to considering only changed circumstances

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that are unexpected or sudden, or of recent vintage, in determining whether the changes

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that have occurred since the entry of the Orr Ditch Decree render compliance with the

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Decree substantially more onerous, or in determining if the continued enforcement of the

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Decree without modification is detrimental to the public interest. Rather, in determining

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whether modification is warranted, the Court must consider all changed circumstances,

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TCID also asserts that it disputes the Moving Parties’ statements regarding
changed circumstances, but it offers no evidence that the changed circumstances identified
by the Moving Parties have not occurred.
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including the totality of all changed circumstances (regardless of whether some of those

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changed circumstances were expected, occurred long ago, or accrued slowly) since the

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signing of the Orr Ditch Decree.

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The proposed modifications to the Orr Ditch Decree seek the adoption of the TROA

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(superceding the TRA) as the management framework for the river system. As this Court

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has previously recognized, one of the critical tasks before this Court is to decide whether

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the management framework established in the TROA, as established within the four

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corners of that document and its protections to existing Orr Ditch Decreed Water Rights, is

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suitably tailored to the changed circumstances. The Court need not determine whether the

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TROA is perfectly tailored to the changed conditions, but only whether it is suitably tailored

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to the changed circumstances.2

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As is apparent from the arguments of the parties, and from a review of the TRA, a

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fundamental aspect of the TRA is the maintenance of the Floristan or Reduced Floristan

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Rates through the release of water from Lake Tahoe and Boca Reservoir. The Moving

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Parties argue that the maintenance of the Floristan (or Reduced Floristan) Rate prescribed

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by the TRA has become onerous and contrary to public interest as a result of the changed

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circumstances of the river system. Generally summarized, the Moving Parties argue that

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the flow rate required by the TRA is not responsive to the changing beneficial uses to which

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the water of the Truckee River is and will be placed. For example, as recognized in the

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Settlement Act, an operating agreement for the river system must provide for enhancing

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spawning flows in the Lower Truckee River. The Moving Parties assert that achieving a

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In opposing the motion, TCID argues that the TROA violates the TRA as
incorporated into the Orr Ditch Decree. W ithout doubt, the TROA includes provisions that
conflict with the TRA, but such conflict does not establish a “violation” of the Orr Ditch
Decree. Rather, the Court has considered each conf lict in determining that the conflicting
proposed modifications are suitably tailored to the changed circumstances. As a result, the
conflicts identified by TCID are necessarily resolved by superceding the conflicting
provisions of the TRA.
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flow conducive to the requirements of water users, while constrained by the Floristan Rates

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as required by the TRA, has become onerous.

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The opposing parties assert that the Floristan Rates can be modified under the TRA.

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As TCID points out, however, any modification to the Floristan Rates under the TRA

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requires the mutual consent of TMWA (as successor to Sierra Pacific Power), the

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Conservation District, and TCID (and any reduction below Floristan Rates is limited to the

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period between April 1 and October 31). Ironically, TCID also argues, elsewhere in its

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opposition, against the TROA’s provisions for dispute resolution, which require that all

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disputes under the TROA be first submitted to the Truckee River Special Hearing Officer.

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The decisions of the Hearing Officer are then reviewable by this Court. The Hearing

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Officer is appointed to a four-year term by the unanimous agreement of representatives of

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the four Sovereign Parties (the United States, California, Nevada, and the Pyramid Tribe).

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TCID asserts that “[t]hese provisions grant entirely too much decision making power for

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managing the Truckee River to the TROA Signatories.” The Court disagrees. The

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appointment of a Hearing Officer, which is required of the four sovereign parties, is an act

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attenuated from the management of the river system. Further, any hearings held by the

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Hearing Officer are public, and the decisions can be reviewed by this Court. By contrast,

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the modification of the Floristan Rates directly affects the management of the river system.

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The TRA, however, grants a unilateral veto to any proposed modification of the Floristan

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Rates to each of just three entities, and provides no mechanism to review a veto by any of

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those entities. The provisions for management of the Floristan Rates by the three entities

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was appropriate in 1944 when the Orr Ditch Decree was entered. Under the changed

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factual and legal circumstances, however, these same provisions now grant too much

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decision-making power for managing the Truckee River to the three entities, and as such

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have become onerous and unworkable for the operation of the river system.

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In addition, the Orr Ditch Decree lacks any provisions implementing the changed

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circumstances concerning the interstate allocation of water that has been reached between

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Nevada and California, the key elements of which were incorporated by Congress into the

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Settlement Act, and which become effective when TROA takes effect. The public interest

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is advanced by a modification of the Orr Ditch Decree that causes this interstate allocation

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of water to become binding on both Nevada and California.

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Subsequent to the Orr Ditch Decree, the Pyramid Tribe applied for and was granted

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the right to the remaining unappropriated water of the Truckee River under Nevada Permits

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48061 and 48494. As a primary purpose of the Orr Ditch Decree is to protect Truckee

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River water rights, the public interest is advanced by amending the Orr Ditch Decree to

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both confirm and incorporate the Pyramid Tribe’s claim to the water under Permits 48061

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and 48494, so that the Tribe’s rights to that water can be enforced under this Decree. The

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public interest is further advanced by amending the Orr Ditch Decree to recognize that the

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waters of the Truckee River and its tributaries are fully appropriated and closed to new

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appropriations.

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The opposing parties argue that it is impossible to determine whether the proposed

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modifications concerning the adoption of the TROA are suitably tailored to the changed

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circumstances because the TROA is a long and complex document. Having carefully

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reviewed the TROA, the Court agrees it is a long and complex agreement.3 That

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complexity, however, reflects the attendant complexity of establishing a management

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framework for operating a river system (spanning two states) that is subject to both flooding

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and drought conditions, the water of which is needed and used for both competing and

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complementary beneficial purposes by numerous interested parties, including the

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enhancement of spawning flows, carrying out the terms of the Preliminary Settlement

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The Court also finds the TRA to be a long and complex document, though not
as long and complex as the TROA.
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Agreement, and ensuring that an owner of Decreed water rights receives the amount of

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water to which that owner is legally entitled. Further, and more significantly, the Court has

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come to the firm conclusion that the complexity of the agreement results from the necessity

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of creating a flexible management framework that is suitably tailored to both the changed

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circumstances and the still changing circumstances of the river and the users of its water.

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As TCID itself notes, the TROA is the result of over 20 years of the Moving Parties

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negotiating each provision and operation, and the TROA itself reflects that its provisions

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address the operation of the river system in the context of the changed circumstances.

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Finally, despite the complexity of the TROA, the Court is of the firm determination that the

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arguments of the parties, as well as the evidence presented, have been more than

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sufficient to establish the understanding necessary to determine whether the proposed

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modifications are suitably tailored to the changed circumstances.

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The opposing parties also raise a more limited argument that the complexity of the

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proposed management framework of the TROA renders it unsuitably tailored to certain of

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the changed legal and factual circumstances because, when those specific circumstances

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are considered individually, the circumstances can be accommodated with little or no

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modification of the Orr Ditch Decree. The changed circumstances, however, have not

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occurred in isolation from other changes. For example, the changed circumstance

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resulting from the Court’s decision in Tribe v. Morton may not, of itself, require modification

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of the Orr Ditch Decree. The decision, however, is relevant in considering the changed

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circumstance of the Settlement Act’s requirement that the operating agreement provide for

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the enhancement of spawning flows. Thus, while Tribe v. Morton requires the Secretary to

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justify with precision any diversion of water, protecting the flow of water to Pyramid Lake,

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the Settlement Act warrants changes suitably tailored to better timing that flow for a

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beneficial purpose. Thus, the Court has considered the suitability of the proposed

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modifications of the Orr Ditch Decree against the context of the complex and diverse array

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of competing and complementary changed circumstances.

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Though the burden rests on the Moving Parties to show the proposed changes are

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suitably tailored to the changed circumstances, the Court has considered the various

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arguments of the opposing parties asserting reasons why the proposed changes are not

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suitably tailored. In considering these arguments, the Court has not shifted the burden to

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the opposing parties to show the modifications are not suitably tailored. The burden has, at

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all times, rested with the Moving Parties to show the modifications are suitably tailored.

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Nevertheless, in considering the opposing parties’ arguments, the Court has considered

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the merits of the arguments.
TCID and several of the individual responding parties have asserted various

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arguments suggesting that the proposed changes are not suitably tailored because they

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result in injuries to Decreed water rights. As accurately stated by TCID in its opposition:

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Both the Orr Ditch Decree and the Settlement Act contain provisions
designed to protect the interests of water rights owners. The Orr Ditch Decree
provides that the points of diversion and the place and manner of use may be
changed, so long as it is “without injury to the rights of other persons whose
rights are fixed by this decree.” Ex. 13 p. 88. Further, it prohibits anyone
“from ever taking, diverting, using or claiming any of the water so decreed, in
any manner or at any time so as to in any way interfere with prior rights of any
other persons or parties under this decree.” Id at p. 87. T he [Settlement Act]
(Ex.1), §210(b)(13) states:
Nothing in this title is intended to affect the power of the
Orr Ditch court or the Alpine court to ensure that the owners of
vested and perfected Truckee River water rights receive the
amount of water to which they are entitled under the Orr Ditch
decree or the Alpine decree. Nothing in this title is intended to
alter or conflict with any vested and perfected right of any
person or entity to use the water of the Truckee River or its
tributaries, including, but not limited to, the rights of landowners
within the Newlands Project for delivery of the water of the
Truckee River to Derby Dam and for the diversion of such
waters at Derby Dam pursuant to the Orr Ditch decree or any
applicable law.

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Likewise, TROA shall ensure water is stored and released . . . to satisfy the
exercise of water rights in conformance with the Orr Ditch decree . . ." Id,
§205(a)(2)(D).
The Court would further note that Section 1.C.1 of the TROA expressly provides:
Pursuant to Section 210(b)(13) of the Settlement Act, nothing in this
Agreement shall be construed to (a) affect the power of the Orr Ditch Court to
ensure that the owners of vested and perfected Truckee River water rights
receive the amount of water to which they are entitled under the Orr Ditch
Decree; or (b) alter or conflict with any vested or perfected right of any Person
to use the water of the Truckee River or its tributaries, including, but not
limited to, the rights of landowners within the Newlands Project for the
delivery of Truckee River water to Derby Dam and for the diversion of such
water at Derby Dam pursuant to the Orr Ditch Decree or any applicable law.
In addition, Section 1.C.2 of the TROA establishes:
If the implementation of any provision or provisions of this Agreement
would or does result in an owner of an Exercised Orr Ditch Decree Water
Right not receiving the amount of water to which that owner is legally entitled,
the Administrator shall, as soon as practicable, (a) implement a remedy
mutually acceptable to affected parties, or (b) make up the amount of water to
which the owner of the Exercised Orr Ditch Decree Water Right is legally
entitled, utilizing water of the Scheduling Party or Scheduling Parties who
benefitted as a result of implementation of the provision or provisions of this
Agreement which caused such result.

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In light of these provisions, the Court must conclude that the proposed modifications are

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not suitable if they alter this Court’s authority or power to ensure that owners of water rights

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receive the amount of water to which they are legally entitled. While TCID asserts several

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times that it is the only party injured by the TROA, the Court’s concern is not whether the

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farmers represented by TCID are the only users of Decreed water rights that will be injured,

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but whether they or any other owner of a Decreed water right will be injured. In making this

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determination, the Court has focused its considerations on whether the implementation of

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any provision or provisions of the TROA, or the operation of the river system under the

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TROA, will necessarily cause an injury or cause an injury that cannot be avoided,

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particularly if implementation causes an injury that cannot be remedied. Having considered

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each of the arguments raised by the opposing parties, the Court finds that the adoption of

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the TROA will not necessarily cause any such injury, or cause injuries that cannot be
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avoided, or cause injuries that cannot be remedied. Nevertheless, though the TROA will

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not necessarily cause injury, the Court must also recognize that no management

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framework for a complex river system, including the TRA, can eliminate all possibility of an

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injury occurring. That such “incidental” or “inadvertent” injuries are possible, however, does

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not render the entire management framework unsuitable, unless the framework fails to

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provide any remedy. The TROA contains provisions pursuant to which an owner who is

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injured because of the implementation of a provision or provisions of the Agreement is

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entitled to a mutually acceptable remedy or to have the shorted water made up from the

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water of the party that had benefitted. These remedy provisions suitably protect Decreed

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water rights, particularly as to incidental or inadvertent injuries resulting from the

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implementation of a provision of the TROA.

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An “injury” to a Decreed water right is not shown merely by establishing a shortage

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of water because an owner of a water right can be shorted water without violating the Orr

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Ditch Decree. Similarly, alterations of historical flows do not, of themselves, establish

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injury. Rather, an injury occurs when the owner receives less water than the amount to

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which the owner is legally entitled, which determination requires consideration not only of

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the amount of the water duty, but also its priority, and certain other conditions affecting the

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river system. Owners of the most junior Decreed water rights may not be legally entitled to

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receive any water when the amount of water in the river is insufficient to satisfy all Decreed

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water rights.

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TCID argues that operation of the river system under TROA will cause shortages in

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the Newlands Project in violation of the Settlement Act and the Orr Ditch Decree. In

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support of this argument, TCID asserts that the Final Environmental Impact Statement /

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Environmental Impact Report prepared for the TROA “expressly indicates that there will be

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additional shortages to the Newlands Project as a result of the operation of TROA.”

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(Emphasis added). The argument is without merit for several reasons. First, the inquiry
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required of this Court is not to determine whether non-injury shortages can occur if the river

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system is operated under the TROA, but whether injuries will occur. Under a pure priority

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system, a junior right will suffer a shortage of water when the amount of water available is

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insufficient to fully satisfy the needs of both the senior and the junior rights. A managed or

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regulated river system is not limited to ensuring that water is delivered according to

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seniority of right, but promotes an efficient use of water that avoids a waste of water to the

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detriment of a junior right. Nevertheless, even on a managed river system, a junior right is

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not injured when the full and proper exercise of a senior water right results in a shortage to

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the owner of the junior right. TCID’s argument fails because TCID has argued only that the

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FEIS/EIR shows additional shortages will occur, rather than arguing that the FEIS/EIR

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shows that injuries will occur, or otherwise showing that the additional shortages will

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constitute an injury.

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Second, TCID has not even shown that additional shortages will occur under the

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TROA. TCID misplaces its reliance on the FEIS/EIR, and in particular on Figure 3.23, to

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suggest that implementation of the TROA will cause additional shortages (regardless of

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injury) to the Newlands Project. A review of the FEIS/EIR establishes that the operations

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model in Figure 3.23 was obtained by applying the water supply conditions existing during

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two drought periods from 1931-35, and 1990-94, to various management systems,

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including “No Action,” and “TROA,” in the context of projected water usage for the year

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2033. The “No Action” management system represents the current management system,

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effectively management under the TRA, as it is the management system that will exist in

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2033 if no action is taken and the TROA is not implemented. The operations model also

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includes the shortages that would have occurred during these drought periods in the

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context of water usage and management in 2002, labeled as “Current.” TCID’s argument

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relies on improperly comparing the shortages occurring under the TRA for 2002 water

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usage and those of the TROA for 2033 water usage. The appropriate comparison is
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between “No Action” and “TROA,” which effectively compares the shortages occurring

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under both the TRA and the TROA management systems in the context of projected water

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usage for 2033, as applied to years of insufficient water supply that occurred during

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drought periods of the last century. Properly considered, Figure 3.23 of the FEIS/EIR

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establishes that the Newlands Project would suffer additional water shortages as a result of

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the projected changes in water usage between 2002 and 2033. However, the extent of

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those additional water shortages are nearly the same whether the river system is operated

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under the TROA or continues under the current management system. As such, and

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contrary to TCID’s argument, Figure 3.23 does not establish that the implementation of

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TROA will cause additional shortages. Rather, the additional shortages will occur

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regardless of whether the river system is operated pursuant to the TRA or the TROA.

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TCID also asserts that conditions that existed in 2008 and 2009 reveal that injuries

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will occur under the TROA. The argument is not well taken, as the argument omits critical

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facts well-known to this Court arising from breach of the Truckee Canal in January 2008.

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As a result of that breach, the Truckee Canal could not be used for any diversion for

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several months. When diversions could again occur, the amount that could be diverted

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was limited by restrictions imposed by this Court. In addition, while TCID establishes that

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farmers experienced a shortage of water in 2008, and a flow of 75 cubic feet per second in

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the Truckee Canal near the Wadsworth gage on July 31, 2009, TCID has not established

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that any farmer was injured (that is, suffered a shortage in violation of the Orr Ditch Decree)

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in either year, or that any farmer would have been injured in either of those years if the river

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system was being managed under the TROA framework when the canal breach occurred.

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TCID further argues that the TROA allows the use of “historical” flows in a fashion

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that injures existing water rights in violation of the Orr Ditch Decree. As this Court has

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previously ruled, a junior right is not and cannot be injured by a change in an historical use

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that precludes the diversion of water to which the owner of the junior right was never legally
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entitled. Absent the showing of a legal entitlement to historical flows, the alteration of those

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flows under the TROA does not injure existing rights in violation of the Orr Ditch Decree.

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TCID has not identified any provision of the TROA that will necessarily alter an historical

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flow that will cause an injury to the owner of a Decreed water right.

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TCID raises several arguments that certain provisions of the TROA permit changes

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in water use in violation of the Orr Ditch Decree. For example, TCID asserts that

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implementation of §§7.A.4(b)(3) and 7.C.1 violates the Orr Ditch Decree because the

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provisions improperly allow the conversion of a non-consumptive use of water for power

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generation to the consumptive use of Fish Credit Water. These arguments are without

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merit, as the provisions do not “permit” a change that violates the Orr Ditch Decree, but

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rather (a) identify proposed changes that the signatory parties agreed would be useful if

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TROA takes effect, but that are not necessary for TROA to take effect, and (b) establishes

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duties related to obtaining the necessary approvals for these changes in accordance with

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applicable law. As to these provisions, the appropriate forum to determine whether the

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proposed changes will violate the Orr Ditch Decree are the change application proceedings

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that commence before the State Engineer, and are reviewed by this Court.4

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Likewise, TCID’s argument that the TROA’s provisions allowing storage of the river

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system’s most junior water rights as Fish Credit Water or Water Quality Credit Water,

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which have been awarded to the Tribe, might in some cases “unfairly” give those junior

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rights a better and more reliable supply of water than the Claim 3 rights used for the

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Newlands Project. The appropriate inquiry, however, is whether the water can be stored

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without injury to a Decreed water right, not whether the Tribe obtains a benefit by storing

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the water that it is legally entitled to divert under the system’s most junior water rights. That

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TCID raises a similar argument that the TROA violates the “25% Rule.” The
argument fails for several reasons, not the least of which is that the State Engineer and this
Court have already ruled against TCID on this issue.
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the storage of the water benefits the flow of the river for fishery and water quality purposes

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further suggests that the proposed changes are suitably tailored to the changed

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circumstances.

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TCID also appears to make an argument that the storage of the consumptive use

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portion of a water right will cause an injury by altering the timing of flows that would

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otherwise be available for diversion. The argument is without merit. The timing of the

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return flows cannot be altered by the storage of the consumptive use portion of a water

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right. Return flows are, by definition, comprised solely of the non-consumptive portion of

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the water right and thus are not stored. Rather, the non-consum ptive portion of a water

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right remains in the river for diversion by those legally entitled to divert the water. Further,

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as only the consumptive-use portion is stored, no owner of other water rights will be legally

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entitled to divert the water when it is later released, and thus they cannot be injured by the

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timing of its release.

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TCID’s argument that the TROA violates the Tahoe-Prosser Exchange Agreement is

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without merit. That agreement was incorporated by the Truckee River General Electric

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Court into the Truckee River General Electric Decree. Thus, the appropriate forum for that

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argument is the Truckee River General Electric Court. (The Court would note, however,

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that the Moving Parties were required to submit, and have submitted, the TROA to that

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court for any necessary modifications to that decree. The Truckee River General Electric

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Court has approved the proposed modifications of that decree, thus determining that TROA

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does not violate the Tahoe-Prosser Exchange Agreement.)

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TCID argues that the usage of Donner Lake cannot occur as envisioned in the

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TROA, because TCID and TMWA jointly own the rights to store water in Donner Lake.

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TCID asserts that the TROA, however, treats water stored in Donner Lake as if the right

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was partitioned. As both TCID and the Moving Parties acknowledge, the issue of whether

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the water can be partitioned is currently in litigation, with an interlocutory judgment of
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partition having been entered, but appealed. As the Moving Parties point out, however, the

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TROA’s provisions for Donner Lake expressly provide that they do not control or alter the

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operation and obligations of TMWA and TCID with respect to Donner Lake, but rather that

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those provisions will only control if TMWA and TCID agree, or (absent an agreement) to

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the extent provided for in an order entered by a court of competent jurisdiction. Thus,

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contrary to TCID’s argument, the TROA, itself, limits the implementation of its provisions for

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the usage of Donner Lake to that permitted by agreement or by a ruling of a court of

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competent jurisdiction.

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Though the Court has not addressed every argument raised by each party

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individually, the Court has considered all arguments raised by all parties, including those

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who have individually participated in this motion. The arguments have assisted the Court

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in assessing the modifications proposed to the Orr Ditch Decree, and particularly in gaining

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a sufficient understanding of the TROA and its provisions to make this determination.

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Having considered all of the arguments, the Court concludes that it has authority to modify

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all provisions of the Orr Ditch Decree, that legal and factual circumstances have changed

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since the Orr Ditch Decree was entered, that those changes warrant modification of the Orr

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Ditch Decree, and that the proposed modifications, while complex and extensive, are

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suitably tailored to the extensive changes that have occurred, which changes reflect and

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establish the need to modify the existing operating framework for managing a complex river

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system to provide a flexibility necessary to manage water rights for competing and

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complementary uses, while also ensuring the protection of existing Decreed water rights.

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Accordingly, for good cause shown,

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THE COURT ORDERS that the Moving Parties’ Amended Motion to Modify or

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Amend the Final Decree Entered in this Case in 1944 (#1173) is GRANT ED; For clarity, the

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Court will enter the order modifying the Orr Ditch Decree separately;

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THE COURT FURTHER ORDERS that the Motion for Case Management
Conference (#1510) is DENIED as moot.

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DATED this ______ day of September, 2014.

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Lloyd D. George
United States District Judge

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