Supreme Court won't hear water rights case 

Decision means two victorious ranch families can’t recover attorney fees

By SEAN ELLIS
Idaho Farm Bureau Federation

January 04, 2008


POCATELLO - Chalk one up for Goliath (in this case, the federal government), even though he got whupped by David (two Idaho ranching families).

By refusing to hear a landmark Idaho water rights case, the U.S. Supreme Court has made it official: An individual can defeat the U.S. government in court in every major battle but lose the war.

The court declined to hear a case involving two Idaho ranching families who fought the government for nearly a decade over federal rangeland water rights.

That means the two families, who were victorious in their cases, cannot recover attorney fees. Essentially, they've reached the end of their road in legal terms and face a bleak financial outlook after a long battle to defend their stock-watering rights.

The two ranches were vindicated earlier this year when the Idaho Supreme Court ruled the federal government does not hold federal rangeland water rights. The ranches won on every major point and the court even said the government's argument reflected "a serious misunderstanding of water law."

However, in a serious setback to the ranching operations, the court also ruled they could not recover attorney fees from the government. Considering they owe about $1.5 million combined - an amount roughly equal to the value of the ranches - that's no small matter.

The two Owyhee County ranches, Joyce Livestock Co. and LU Ranching Co., appealed the court's decision not to award them attorney fees to the U.S. Supreme Court. They found out Oct. 31 the court would not hear their appeal.

"We knew going in the Supreme Court took a mighty small percentage of cases," said LU Ranching owner Tim Lowry. "We were hoping against hope they'd take this one. But they didn't."

Lowry said their next step would be "to figure out how to get the attorneys paid. Our options are pretty limited."

The Idaho Supreme Court agreed with the ranches on virtually every point in their battle with the federal government over water rights on land covered by federally administered grazing allotments.

The operations ended up fighting the government in state court after the Bureau of Land Management challenged their stock watering rights during the Snake River Basin Adjudication.

Though the fight was long and complex, the court's logic in deciding in favor of the ranching operations was simple when broken down.

The court ruled that while the operations' predecessors staked their water claims by grazing livestock beginning in 1898, the BLM couldn't put the water to beneficial use because it doesn't own cattle.

But it's the court's ruling on attorney fees that has threatened the financial viability of the ranches.

Before he took the fight to court, Lowry said, government attorneys warned him they would challenge him all the way to the U.S. Supreme Court and that the fight would cost him the value of his ranch in attorney fees.

Because they knew they were right, Joyce Livestock and LU Ranching refused to be intimidated. In the end, they were proven right. Unfortunately, in one for the "How does that happen?" department, the government's threat to break them financially also came true.

In a nutshell, the two ranches won their case on every major point. But in the end, because they can't recover attorney fees, they have lost from a financial standpoint.

The ranches based their claim to be allowed to recover attorney fees on the Equal Access to Justice Act, which provides for the award of attorneys' fees to individuals and small businesses that prevail in litigation against the government.

The act is designed to deter the U.S. , with its deep pockets, from litigating against private parties without any basis in law by penalizing it when it does so. It levels the playing field by enabling these parties to litigate their claims against the U.S. despite limited financial resources and the likelihood of great litigation expense.

But the court denied the ranches' claim based on its interpretation of a jurisdictional issue - whether a private citizen can receive an award of attorney fees under the EAJA from a state court adjudicating water rights where the U.S. appeared in the adjudication under the McCarran Amendment's waiver of sovereign immunity.

The court ruled the EAJA does not authorize state courts to award attorney fees against the U.S.

The ranching operations pointed out that Congress enacted the act as a means to enable individuals to fight against unreasonable governmental action. Limiting EAJA to federal courts, they argued, would create "an incentive for the executive branch to engage in forum shopping when subjecting small businesses and individuals to unreasonable governmental action."

Lowry said the loss of attorney fees means the government can thumb its nose at landowners in fights over natural resources. They can now take the stance that "It doesn't matter if we're right or wrong, we'll force you to settle."

But, looking at it in a different light, the fight could also prove to be advantageous to other landowners who face similar government action.

The Idaho Supreme Court ruled the U.S. did not act frivolously or without foundation in asserting its water rights claim. However, the fact that the government doesn't hold federal rangeland stock water rights is now settled law in Idaho .

So, if the government forces the issue on another landowner, the individual would not have to fight them step by step since it is settled law.

"The law is pretty clear now," Lowry said. "The Idaho Supreme Court has spoken on it and pretty clearly."

If the government does push the issue in light of the Supreme Court ruling, he added, "it would be absolutely frivolous and without merit" and the individual would presumably be allowed to recover attorney fees because of that.

Sean Ellis is publications editor for Idaho Farm Bureau Federation. He can be reached at 208-239-4347 or e-mail sellis@idahofb.org. 

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