Klamath Irrigation District v. Oregon Water Resources Department

By treaty, three Native American tribes held federal rights to fish in the Klamath River basin near the Oregon-California border. In 1905, the federal government claimed all unappropriated water in the basin and constructed a dam between Upper Klamath Lake and the lower basin, along with an irrigation system. The federal government controlled the system, including releases of lake water into the basin. In 1909, Oregon enacted a law declaring that the state’s waters belonged to the public and reclaiming the authority to determine who could use those waters. The Oregon Water Resources Department (the agency) (defendant) later recognized that the Klamath Irrigation District (the district) (plaintiff) had a state-law right to receive lake water. Under an agreement with the United States Bureau of Reclamation, the district used that water to irrigate farms through a canal connected to the lake. Separately, the Endangered Species Act, federal treaties with the tribes, and a federal-court order required the federal government to maintain minimum water levels in the basin to preserve endangered fish and the tribes’ fishing rights. To satisfy those obligations, the federal government released lake water downstream without a state water-use permit, which reduced the water available to the district for irrigation. In 2018 and again in April 2020, the district obtained state-court orders requiring the agency to take control of the lake water. In May 2020, the district filed another state-court action seeking to compel the agency’s watermaster to prevent the federal government from releasing water through the dam for nonpermitted purposes and to allow the district to divert the water for irrigation instead. The agency moved to dismiss the lawsuit, arguing that the federal government was an indispensable party and pointing out that the federal government could not be compelled to join a state-court action. The state trial court denied the motion. The court then ruled that the agency had a legal obligation to protect the lake water as a scarce resource belonging to the people of Oregon and ordered the agency to take control of the lake. The agency appealed to the Oregon Court of Appeals.