...The Property Right in Water 2. Context for Application of the Rule in Oregon: Transfer Proceedings 3. Defining Legal Injury 4. Contours of the Rule Part I: Legal Definitions of Return Flow 5. Contours of the Rule Part II: Hydrologic Definitions of Return Flow III. OBSTACLES TO INSTREAM FLOW PROTECTION A. Practical Limitations B. "Creative "Administrative Challenges to Instream Transfers 1. ENAF Is Enough?: Estimated Average Natural Flow as a Ceiling for Instream Rights 2. Another "Beneficial Use" Ceiling 3. NOT "Ready, Willing, and Able?". A Creative Application of the Forfeiture Law C. Formal Opposition to Instream Transfers 1. Big Trouble on Little Creek: The Water Trust's Contested Case Hearing a. Regulation of Junior Rights Is Not Legal Injury b. Water Right Transfers in Oregon Begin with the Presumption that the Entire "Paper" Right is Transferable c. A Water Right Holder Is Not Entitled to the Undiverted Portion of Another Right Holder's Water d. Changing the Historic "Shape" of a Water Right Is Not Injury If the Change Is Within the Extent Allowable Under the Right e. Continued "Subirrigation" from Adjacent Lands After an Instream Transfer Does Not Constitute Enlargement f. Efficiency of a Water User's Conveyance System Is Not an Injury Consideration 2. Imposing the "No Injury Rule" Come Hell or High Water: Watermaster Opposition a. The Standard for Proving Return How Requires More Than Mere Speculation b. Timing of Return Flow Must be Taken into Account c. Instream Applicants Should Pay Close Attention to Irrigation Season Limitations d. Return Flow Entering the River at a Point Above a Downstream Junior's POD Should be Subtracted to the Extent of Potential Injury IV. ACHIEVING STREAMFLOW PROTECTION BY MODELING SUCCESS A. A Measurement Model: Washington's Measurement Requirement B. Austin Ranch: Changing Use Without Risk of Injury C. Private, Market Solutions on the Lostine River V. RECOMMENDATIONS FOR THE FUTURE A. First-Tier Recommendations 1. Enact a Comprehensive Measurement Requirement 2. Treat Instream Transfers Equally with Consumptive Uses in Transfer Proceedings B. Second-Tier Recommendations 1. Strive for Creative Solutions Within the Existing Legal and Regulatory Regime 2. Look for Private Solutions VI. CONCLUSION

I. INTRODUCTION

This Comment explores streamflow protection issues as they intersect and conflict with existing water regulation practice in the state of Oregon. Numerous factors make the protection of streamflows for ecological benefit difficult. These factors include: the practical limitations of managing a complex and unpredictable natural system; the administrative reluctance stemming from local opposition to non-consumptive uses and years of enforcing the status quo; and the formal, legal opposition on the part of those who fear that protecting streamflows will interfere with their own rights. The difficulties represent not only conscious choices but inhere in the antiquated doctrines of Western water law. This Comment explores particular impediments to streamflow protection raised by the prohibition against legal injury to others' water rights. By illuminating the practical, regulatory, and legal parameters of injury analysis and superimposing this framework on the realities of Oregon's administrative and legal regulation of streamflow, this Comment seeks to assist parties in navigating the complexities of instream transfers. Outside of Oregon's state lines, the hope is that this analysis will aid parties in other western states and the states themselves, as they develop streamflow protection laws and policies.

The Comment begins with an overview of Oregon's streamflow protection laws and the administrative and regulatory processes designed to apply the law on the ground. (1) Next, the prohibition against injury to existing water rights is examined in detail. (2) With this background in mind, the practical, (3) administrative, (4) and legal (5) challenges to implementing streamflow protection are discussed. Central to this Comment is the analysis of these challenges and the questions they raise--are they based in sound law and policy? Do they treat streamflow protection on an equal legal footing with other types of water use? What can be learned from a close examination of these hurdles? Finally, the Comment concludes with a discussion of successful models of streamflow protection and a summary of recommendations for the future.

II. OREGON WATER LAW: FIRST IN TIME, FIRST IN RIGHT

Because water in the arid West is a limited resource, a system for distributing it during times of shortage has become an entrenched part of Western law. (6) This law is called the "prior appropriation doctrine." The most basic tenet of the doctrine is that the first person to appropriate water from a source has the most senior right and will therefore be the last appropriator cut off during times of shortage. (7) Conversely, later appropriators, called juniors, will be required either to shut off or diminish the amount of their diversions dung shortages to leave water in the river for the seniors. (8)

A. Instream Water Rights

Oregon was one of the first states in the West to protect water instream when it removed streams feeding waterfalls in the Columbia River Gorge from appropriation to protect the streams' "scenic beauty." (9) This step was followed by the establishment of minimum perennial stream flows in 1955. (10) Minimum flow protection had limited effect, however, because the flows took precedence only over appropriations later than 1955. In 1987, the Oregon legislature took the final step toward meaningful instream protection by creating a legal right to maintain streamflows. The Instream Water Rights Act (11) (the Act) begins by declaring that instream uses are beneficial uses (12) and have an equal legal footing with "any other water right for which a certificate has been issued." (13)

Instream rights are created in several ways. First, the Act converted the minimum perennial stream flows set in 1955 to instream rights with a priority date according to the date the minimum flow was established. (14) Because of the late priority dates of these rights, however, their importance is minimal. Instream rights can also be created by state agencies. The Oregon departments of Fish and Wildlife, Environmental Quality, and Parks and Recreation are empowered to request instream rights for public use. (15) Again, these rights post-date the 1987 Act and are therefore at the back of the prior appropriation line. (16) The only method of creating senior instream rights, and therefore the most important method, is the purchase, lease, or gift of a water right by a private party for conversion to instream use. (17) Existing water rights of any seniority may be leased for temporary conversion to an instream use or may be sold for permanent conversion. (18) Short-term leases are by far the most popular of these options and are therefore the primary vehicle in Oregon for creating instream rights. (19)

Short-term lease agreements are not to exceed five years. (20) These agreements allow landowners, who are unwilling to transfer their rights instream permanently, the freedom to do so for a trial period. In addition, landowners who are not using water, and are therefore at risk of forfeiting their right, can lease the right instream, stopping the clock on forfeiture by putting their water to "use." (21) Instream lease agreements also enjoy the freedom to split the season between instream and out-of-stream uses. (22)

B. Nuts and Bolts: On the Ground Regulation of the Right to Use Water in Oregon

In practical terms, the "first in time, first in right" priority system is difficult to administer. (23) Two primary impediments to meaningful regulation of water rights are a lack of accurate measurement of diversions and a lack of resources to direct towards enforcement efforts. (24) State employees called watermasters, whom the director of the Oregon Water Resources Department (OWRD) appoints, carry out on-the-ground regulation of water rights in Oregon. (25) Oregon is divided into twenty-one districts roughly following watershed boundaries. (26) Watermasters and their staff are charged with the general duty of distributing water among users according to their rights. (27) As part of their duty to oversee the distribution of water, watermasters are also charged with preventing wasteful practices. (28) However, actions by the state of Oregon against wasteful water users are rare and only occur in extreme instances of waste. (29)

C. The Mechanics of Leaving Water Instream

Maintaining flows instream requires a watermaster to regulate--i.e. reduce or shut off completely--the point of diversion (POD) of out-of-stream appropriators junior to the instream right, thereby allowing the proper amount of water to flow in the river. Though simple in theory, achieving instream flow requires careful planning and intimate knowledge of the river system. Instream rights are defined and protected as either points or reaches. (30) When an instream flow is protected at a point, the watermaster is charged with ensuring that at least as much water as is called for by the instream right passes that point. The preference, however, is that instream rights be defined as "fiver reaches." (31) In general, a senior instream right that has been acquired from an existing user and that is protected as a reach is maintained from the old POD where the landowner once diverted water out of the river--to the mouth of the river. (32) Instream rights can also be separated into several reaches, each with a different instream rate, to mitigate against injury to other users or to account for natural conveyance losses. (33) If mitigation for loss of return flow is necessary, the instream right will be reduced by the amount of return flow at the point where return flow previously entered the stream. If this point cannot be identified, the right will be reduced at the old POD. (34) Alternatively, if a river passes through a reach where natural flow losses occur by seepage from the river bottom, the instream right will be reduced to reflect this natural decrease. (35)

The preceding discussion highlights the importance state regulators place on protecting existing rights from interference by instream rights. Before an instream right is created, either by request from a state agency or by conversion from an existing right, OWRD analyzes the proposal for potential injury to other users. The doctrine controlling this review is called the "no injury" rule. It has deep roots in Western water law and is the forum for a majority of the challenges faced by applicants for streamflow protection. This comment focuses on application of the doctrine in the context of an existing user who wishes to transfer their right instream.

D. The "No Injury Rule"

Under the no injury rule, junior appropriators are protected by maintenance of the stream conditions that existed at the time of their appropriation. (36) These conditions are not limited to natural conditions but include anthropogenic stream influences such as water returning to the river from an irrigated field. (37) Understanding the rule requires a step-by-step explanation beginning with a description of the nature of the property right in water, a discussion of the context in which the rule is applied, and, finally, an in-depth discussion of the legal and practical contours of the rule itself.

1. The Property Right in Water

Once a water right has been issued by OWRD, the right to use the water becomes a fully vested property interest. (38) Like an owner of real property, appropriators are entitled to enjoy their right free from injury by other property owners. However, the comparison to real property ownership only goes so far because a water right, while a vested property right, is limited to a right of use. (39) "Ownership" of Oregon waters lies with the people of Oregon. (40) The no injury rule therefore preserves juniors' use of water rather than their ownership.

2. Context for Application of the Rule in Oregon: Transfer Proceedings

Application of the no injury rule is most common in proceedings called "transfers," (41) where decisions can be made to change from one water use to another or from a specific place of use to a new location such as in-stream. The key question in transfers is how much of the water right may be transferred. Oregon is called a "paper right" state because transfers begin with the assumption that the entire certificated amount is transferable. (42) Other western states define water subject to transfer based on historical patterns of use. (43) In these states, ff a user historically used less than their allotted right, that pattern of use defines the permissible future use of the right.

Despite the "paper" status of Oregon water rights, appropriators in Oregon can nonetheless lose some or all of their water right through historical non-use. (44) Non-use of water for a period of five or more years creates a rebuttable presumption of forfeiture. (45) However, Oregon law exempts from forfeiture any water right under the following circumstance:

if the owner of a ... water right uses less water to accomplish the beneficial use allowed by the right, the right is not subject to forfeiture so long as (a) [t]he user has a facility capable of handling the entire rate and duty authorized under the right; and (b) [t]he user is otherwise ready, willing and able to make hill use of the right. (46)

In other words, no forfeiture results from using less than the "paper right" if the user is ready, willing, and able to use the full amount. The critical impact of this law is that downstream juniors, who historically depended on the unused portion of an upstream senior's right, are not legally entitled to that water if the senior meets the "ready, willing, and able" requirement. (47)

Under this doctrine, the face of the water right certificate is the first place to look at the beginning of a transfer proceeding. The parties then must work from this amount to determine how much water can be transferred without injury.

3. Defining Legal Injury

OWRD bars transfers when there is a determination that the change will injure other water users. (48) In Oregon, injury occurs when an "existing water right [is] not receiving previously available water to which it is legally entitled." (49) Another species of legal injury, enlargement, occurs when a water right is expanded beyond what is set out in the certificate. (50) The crux of the injury analysis is determining what water was "previously available" and, thereby, what water juniors are legally entitled to. The question of what water was "previously available" is decided using the doctrine of "return flow." The concept of return flow is often confused with similar terms and physical phenomenon. Understanding the doctrine therefore requires familiarity with both legal and scientific concepts of return flow.

4. Contours of the Rule Part I: Legal Definitions of Return Flow

Oregon courts have adopted the definition of return flow as water that returns to the natural course of the stream from which it was taken after being applied by an appropriator. (51) "Possession" of water lasts until it "wastes back or percolates from lands ... or leaves the control of the owner of such lands." (52) Stated differently, discharging excess irrigation water back into its source after use, absent the intention of recapture or reuse, effects an abandonment. (53) Downstream users are then free to appropriate the returned water. (54)

Two similar situations confuse the doctrine. First, ff the appropriator recaptures the water on her land before it rejoins its source, the water does not become "return flow." (55) The appropriator has not lost control nor effectively abandoned the water. Second, ff the water finds its way onto adjacent lands or into a ditch or stream other than its original source after application, the "return flow" label does not attach. Appropriators who rely on this water, called "seepage" or "waste water," cannot compel continuation of the irrigation practice that results in the seepage. (56) The key difference in this scenario is that the water has yet to commingle with its natural source and is therefore not legally appropriable.

Once defined as return flow, however, water is appropriable by downstream water users and "can not afterward be taken out by the original appropriator to the injury of other rights which have attached and vested to it." (57) In other words, an upstream senior may not deprive downstream juniors of return flow by changing the use of water on her land or by changing the point of return of used water to the river below the downstream junior's point of diversion. (58) As is often the case, using broad legal definitions risks oversimplifying reality. In the field, return flows...

NOTE: All illustrations and photos have been removed from this article.



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