Article in Livestock Market Digest
Posted with permission of author

By Heather Smith Thomas

One of the most devastating government “takings” in the history of the U.S. is in progress in Klamath County, Oregon.  This movement to get farmers and ranchers off their privately owned lands has been brewing for many years but came to a head after a sequence of events this spring and summer shut off long-time water rights and deprived landowners of their ability to irrigate or water their livestock.

This area in Oregon runs more than 100,000 head of cattle in the upper basin (above Klamath Lake—Oregon’s largest lake) during the summer, and is farming country in the irrigated land below the lake.  The water use for ranching and farming has had a convoluted history, which first gained national attention in 2001.  Using the Endangered Species Act at their tool, environmentalists, local tribes and federal authorities forced a shut-off of the water to the farmers below the lake, claiming this was necessary to protect endangered fish.

At that time, the rural community and ranchers in the upper basin rallied around the farmers to fight a legal battle to avert that crisis and restore irritation water to 1,500 farms below the lake.  Eventually the water was restored to the farms after much effort.  The National Academy of Science showed that incorrect science had been used by the groups forcing the shut-off.  Then government agencies, local tribes and certain environmental group took a different strategy to divest the upper basin ranchers of their traditional water usage.

Roger Nicholson, a stockman in the upper basin, says this is a huge issue and has the potential of destroying every western ranch.  The precedent here in Oregon could be used elsewhere to halt irrigation, eroding traditional water rights.  The current issue might be characterized as the desire of the federal government to take over state water rights, aided by environmental groups that want the land to go back to wilderness.

“As a bit of background, my family’s ranch has been here since the 1890’s.  We’ve added other ranches to it, but the majority of our land already had state adjudicated water rights which had held up in court,” says Nicholson.

The Federal Government sued local ranchers in the 1970’s to try to gain water and water rights on the former Klamath Indian Reservation lands.  This case became known as the Adair case and was eventually tried before the Ninth Circuit Court of Appeals.

Even though the Klamath tribes did not have a land base (having sold their reservation many years before), the Adair case granted the tribe rights for hunting, fishing and gathering–since the Indians didn’t specify that they were selling those rights with the land when they sold it.  The court system ruled that they did indeed still have these rights, and granted the tribe a water right for hunting, fishing and gathering, for a moderate standard of living, as they used it in 1979 and not historically.

“By doing this, the court opened Pandora’s Box.  The 9th Circuit decision went on to say they were not going to create a wilderness servitude on the agricultural land with this decision, but the end result is that it’s been in court ever since.  The 9th Circuit had established the parameters of the water right but left the quantification to be done within the state courts,” he explains.

This gave the State of Oregon the empowerment to adjudicate the Klamath Basin water.  “This was the first time an adjudication had taken place in the state for Federal Reserve Rights (water on federal lands such as BLM and Forest Service), even though many agricultural rights had already been adjudicated,” he says.  This led to decades of state court adjudication proceedings.

“The federal government took a cheap shot in the closing days of the Clinton administration and sued us again and reopened the Adair case—taking it to the federal district court in Portland, Oregon.  Judge Panner decided that case.  He decided that the moderate standard of living was meaningless; he wanted to maintain productive fish habitat through ideal flow in the streams.  We took Judge Panner’s decision back to the 9th Circuit court which unanimously overturned it.  Judge Panner was told that the Adair decision was to go to state court for qualification as originally authored, without interference from any other court,” Nicholson says.

A state court of administrative law was assigned to make quantification decisions.  “That court, in the quantification phase used as a legal basis the Judge Panner ruling which had already been vacated.  The net result is that the state process essentially awarded all the water to the Indians on the wrong legal basis,” explains Nicholson.

“Thus it goes into full force and effect, and now you see the irrigated lands that satisfied the needs of more than 100,000 head of cattle are gone.  It has destroyed our community.”  After the shut-off this spring there was not going to be even enough water for livestock to drink.

“There is a provision in the state water law that says during a drought designation livestock water is put ahead of everything else.  Because we have a drought designation in our area this summer, we do have stock water.  But we had to take action to ensure that we could water our animals, and without a drought designation in this part of the state we will lose it; there is no legal provision to maintain it,” he says.  Many ranchers and farmers are in a serious situation.

The water issue is now in the quantification phase in the local circuit court which will handle all the exceptions to the OWRD order that came through the administrative phase.  “But this phase is scheduled for about 10 years.  Ranchers can’t hang on that long and they can’t afford attorney fees without any production from their land.  Essentially this has put them out of business, including me,” says Nicholson.

Klamath County is huge and encompasses a lot of grazing land.  It is in the top 3% of all counties in the U.S. for numbers of stocker cattle and cow/calf operations.  “It also has a tremendous connection with the Sacramento and San Joaquin valleys, with Klamath County supplying summer pasture and the California counties supplying winter pasture.  This water shut-off is affecting hundreds of families, and many agriculture-related businesses.  I talked with some of the businessmen in Klamath Falls and their sales are down 50% from what they were earlier.  The cattle situation will have a dramatic negative effect on feedlots in the Northwest; they are very dependent upon the cattle coming out of Klamath County to satisfy their need for numbers,” he explains.

This nullification of traditional water rights is a “taking” of private property.  “But the opposing groups will just say that they had never had their day in court and now they show that we have nothing—and that the tribes/environmentalists should have had the water all along.  The very dangerous part of this is that there has been enough legal precedent established at this point that if we don’t totally overturn this, it will happen again all across the West, wherever there are tribes that decide they want the water.  I recently had 2 people call me from Montana, emphasizing the fact that we have to overturn this, or they may be vulnerable, too.  It will be a taking of all water and water rights across our cattle lands, and we can’t survive without the water,” says Nicholson.

“It’s a huge case with tremendous precedential implications—more than we can imagine.  Seemingly the end justifies the means for the state government of Oregon; they have facilitated this and enabled it to happen because of their desire to establish full in-stream flows.  It’s a political decision,” he says.

“They are trying to satisfy a wide variety of interests and issues, mainly the fisheries and the in-stream flow issues.  Yet the in-stream flow issues were never a real problem earlier.  I can give an example, on a particular creek that I was involved with, showing the absurdity of their claims,” Nicholson says.

“I have about 1000 acres of irrigated land that lie on the former Indian reservation—part of the allotments that were the former Indian homesteads.  The way the reservation was set up, it allowed every Indian to have a piece of private property.  As part of that process, the federal government installed the first Indian irrigation project in Klamath County, on Fort Creek.  The tribe, assuming they owned all the water at that time, deeded out part of that water to their individual Indian people to convert them to an agricultural way of life.  Subsequently federal case law allowed those same Indians to turn around and sell that property, with the water rights, to gain more benefit from their property if and when they did sell it,” he explains.

“My family—myself and my father—bought several of those allotments through the years, with the water.  And now this court decision essentially takes that water and puts it right back into the title of the tribe itself.  I don’t think that’s a very American way to do business,” says Nicholson.

“The creek itself also demonstrates the absurdity of the issue.  Fort Creek, the stream that the water was to come out of, flows 75 second feet of water, spring fed, year round.  It never varies, year round, since there’s no run-off water in it from snow melt.  It’s just spring water, from a very productive spring.  But the state, for aquatic purposes, had the in-stream flow rights at 25 second feet of water from that stream.  Out of the 75 second feet, we used 25 second feet.  The net result was a full-time flow of 50 second feet in the creek—which was twice what they said was necessary to support aquatic life.  It was working fine the way it was, but the state still shut off our water,” he says.

“This has become an intolerable situation.  We have livestock without a home and yearlings moving to market early, people putting their cows on the market, and there doesn’t seem to be any chance for positive results for quite a while.  Our only choice is to either continue with the court case or somehow obtain a settlement.  It needs to be emphasized that this is not a temporary drought shut-off but instream flow levels are set so high that this is a permanent shut down,” he says.

Even if the ranchers decide to sell, their property isn’t worth very much now.  “The economist who works for us says that the hit this year, with the decline in the county’s economy as well as land values is somewhat over $500 million.  This is pretty hard to recover from, ever.  Within the area, the state of Oregon totally controls ground water.  They’ve closed this basin down and won’t even allow people to drill wells to remedy the situation.  Not only do they not allow drilling new wells, but the governor’s office has told us that there’s a good chance they are going to shut down the existing wells,” says Nicholson.

It seems like the goal is to get people off the land and have it go back to wilderness, something the 9th Circuit prohibited.  “This situation has been going on for a long time, and I’ve led various groups that have stood up to it.  In 2005 we signed a settlement agreement with the Klamath tribe that would have avoided all of this.  The agreement was signed by the tribes and myself in Washington D.C. and was heralded as the end of this potentially contentious situation.  Two weeks later the Department of Interior announced that it would not allow the Klamath tribe to settle,” he says.

“Several weeks thereafter, a high-ranking Interior official told me that the reason they did this was that Interior feels there is a shortage of water all over the western states and this is their chance to gain a major block of water simply for the price of litigation, realizing that the ranchers could not stay with the cost of litigation.  He stated that if it ever went to the Supreme Court we would probably win, but they would easily destroy us before it got that far,” says Nicholson.

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