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Vic and Jane Garber; Sandra Lange, Trustee of the Sandra K. Lange v. Wagonhound Land & Livestock Company

June 22, 2012

VIC AND JANE GARBER; SANDRA LANGE, TRUSTEE OF THE SANDRA K. LANGE TRUST; FRED AND WENDY LARSON; FRED SMITH; MICHAEL AND NITA WERNER; ROSS AND BIFF GORMAN; DR. KIRBY KIRKLAND; AND DAVE AND GLYNDA EDWARDS, APPELLANTS (PETITIONERS),
v.
WAGONHOUND LAND & LIVESTOCK COMPANY, LLC; VENJOHN OIL, INC., AND STEVEN M. VENJOHN, APPELLEES (RESPONDENTS).



Appeal from the District Court of Converse County The Honorable Keith G. Kautz, Judge

The opinion of the court was delivered by: Kite, Chief Justice.

Before KITE, C.J., and GOLDEN, HILL, and BURKE, JJ., and STEBNER, D.J., Retired.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.

[¶1] Wagonhound Land and Livestock Company, LLC (Wagonhound), VenJohn Oil, Inc., and Steven M. VenJohn (VenJohn) (collectively Applicants) filed a petition with the Wyoming State Board of Control (Board) seeking to change the place of use, point of diversion and means of conveyance for water appropriations attached to 174.8 acres. VenJohn owned the appropriations from the North Platte River and requested that the point of diversion and place of use of the rights be moved upstream to Wagonhound's land. Vic and Jane Garber, et al. (Objectors), who were intervening water right holders, objected to the petition, and the Board held a contested case hearing. The Board granted the Applicants' petition but reduced the transferred rights to 152.5 acres.

[¶2] The Objectors petitioned the district court for review of the Board's decision, and that court affirmed. They then appealed to this Court. We conclude that the Board's decision is supported by substantial evidence and is consistent with the law; consequently, we affirm.

ISSUES

[¶3] The Objectors present the following issues on appeal:

1. Whether the final decision of the Board of Control was supported by substantial evidence in the record.

2. Whether the final decision of the Board of Control was in violation of Wyo. Stat. § 41-3-104.

3. Whether the final decision of the Board of Control was in violation of Wyo. Stat. § 41-3-114.

The Applicants articulate a single issue: *fn1

I. Whether the decision of the Board of Control to grant in part and deny in part the Petition was supported by substantial evidence, and was not arbitrary, capricious, an abuse of discretion or contrary to law, in accordance with Wyo. Stat. § 16-3-114(c).

FACTS

[¶4] On October 4, 2007, Wagonhound and VenJohn filed a petition with the Board seeking to change the place of use, point of diversion and means of conveyance of water appropriations attached to 174.8 acres. The petition requested the transfer of VenJohn's water rights approximately thirty miles upstream from his land near Orin Junction to lands owned by Wagonhound northwest of Douglas, Wyoming. The Applicants proposed that additional water rights owned by Wagonhound be combined with the VenJohn rights to fill out acreage to be irrigated under three center pivot sprinklers on Wagonhound's land.

[¶5] The Objectors contested the petition on the ground that it violated the statutes governing changes in place of use, Wyo. Stat. Ann. § 41-3-104 (LexisNexis 2011), and changes in point of diversion and means of conveyance, Wyo. Stat. Ann. § 41-3-114 (LexisNexis 2011). They argued the petition was defective on its face because, with respect to the change of point of diversion and means of conveyance, the petition did not fully identify ownership of the appropriation or correctly state whether VenJohn was the sole owner of the facilities involved or had obtained the consent of other owners, as required by § 41-3-114. With respect to the change in place of use, Objectors contended that granting the petition would violate § 41-3-104 and injure them because the transferred water right would exceed the quantity of water historically diverted under the existing use; exceed the historic rate of diversion; increase the historic amount consumptively used; and decrease the historic amount of return flow.

[¶6] The Objectors further contended that granting the petition would decrease flows available to them because the new diversion point was upstream, whereas the historic diversion point was downstream and had contributions from intervening tributaries. Objectors maintained that the transferred water right should be decreased by 7.6% to account for the tributary contributions that would no longer be available to supply the transferred water right.

[¶7] The Board held a contested case hearing on April 17-18, 2008, and at its August 18, 2008, meeting voted to grant the petition in part and deny it in part. Specifically, the Board allowed the transfer of water rights attached to 152.5 of the requested 174.8 acres. The reduction consisted of 6.4 acres to account for a four percent (4%) loss of tributary inflows and 15.9 acres to account for lands VenJohn had historically irrigated with contract reservoir water rather than natural flow water rights. The Board conditioned its approval on the Applicants' submission of amended petition maps, showing, among several changes, the acreage reductions by the Board.

[¶8] After receiving the amended maps, the Board issued its written findings of fact, conclusions of law and order. The Board concluded that, with the reductions it made to the requested water right transfer, the petitioned change of place of use "will not allow a quantity of water to be transferred which exceeds the amount historically diverted under existing uses, exceeds the historic rate of diversion, increases the historic amount consumptively used, decreases the historic amount of return flow or in any manner injures other existing lawful appropriators within the meaning of Wyo. Stat. Ann. § 41-3-104." The Board further concluded that the change in point of diversion and means of conveyance for the petitioned water right "will not injuriously affect the rights of other appropriators within the meaning of Wyo. Stat. Ann. § 41-3-114(f)."*fn2

[¶9] The Objectors petitioned the district court for review of the Board's order, and that court upheld the Board's decision. The Objectors then appealed to this Court.

STANDARD OF REVIEW

[¶10] The Wyoming Administrative Procedure Act governs our review of agency action and provides in pertinent part:

To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall: . . .

(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:

(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

(B) Contrary to constitutional right, power, privilege or immunity;

(C) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;

(D) Without observance of procedure required by law; or

(E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.

Wyo. Stat. Ann. § 16-3-114(c) (LexisNexis 2011).

[¶11] In accordance with § 16-3-114(c), we review the agency's factual determinations by applying the substantial evidence standard, meaning we determine whether there is relevant evidence in the entire record which a reasonable mind might accept in support of the agency's conclusions. Dale v. S & S Builders, LLC, 2008 WY 84, ¶ 22, 188 P.3d 554, 561 (Wyo. 2008). Our review of any particular decision turns not on whether we agree with the outcome, but on whether the agency could reasonably conclude as it did based upon all of the evidence presented. Id. This Court has recognized that the Board of Control has a particular knowledge and expertise in the area of water use and nonuse, and we accord deference to that knowledge and expertise in our review of the Board's factual findings. Basin Elec. Power Co-op v. State Bd. ...


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