Utah Alunite Corporation v. Jones

2016 UT App 11THE UTAH COURT OF APPEALS
UTAH ALUNITE CORPORATION AND UTAH SCHOOL AND
INSTITUTIONAL TRUST LANDS ADMINISTRATION,
Appellants,
v.
KENT T. JONES AND CENTRAL IRON COUNTY WATER
CONSERVANCY DISTRICT,
Appellees.
Opinion
No. 20140924-CA
Filed January 22, 2016
Fifth District Court, Beaver Department
The Honorable Paul D. Lyman
No. 140500015
David L. Mortensen, Richard R. Hall, and Andrew T.
Wojciechowski, Attorneys for Appellant Utah
Alunite Corporation
John W. Andrews, Attorney for Appellant Utah
School and Institutional Trust Lands Administration
Sean D. Reyes, Julie I. Valdes, and Norman K.
Johnson, Attorneys for Appellee Kent T. Jones
Shawn E. Draney, Scott H. Martin, and Dani N.
Cepernich, Attorneys for Appellee Central Iron
County Water Conservancy District
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES
J. FREDERIC VOROS JR. and KATE A. TOOMEY concurred.
ORME, Judge:
¶1 Appellants Utah Alunite Corporation (UAC) and Utah
School and Institutional Trust Lands Administration (SITLA)
appeal the dismissal of a petition seeking judicial review of the
Utah Alunite Corporation v. Jones
decision of Kent L. Jones, Utah’s State Engineer, approving the
application of Central Iron County Water Conservancy District
(the Water District) to appropriate water in the remote Wah Wah
Valley in west-central Utah. Because SITLA and UAC, although
aggrieved persons, did not become aggrieved parties under
Utah’s Administrative Procedure Act (UAPA) in this
proceeding, they lack standing, and we dismiss their appeal.
BACKGROUND
¶2 On October 17, 2006, the Water District filed an
application to appropriate water in the Wah Wah Valley. Weeks
later, the State Engineer published notice of the application as
required by law. See Utah Code Ann. § 73-3-6(1)(a) (LexisNexis
Supp. 2015).1 Approximately 300 protestants filed petitions
objecting to the Water District’s application; SITLA—a
substantial landowner in the valley from which the water was to
be appropriated—did not.2
¶3 Almost six years later, in August 2012, while the State
Engineer was still considering the Water District’s application,
SITLA and UAC, which had leased lands from SITLA with an
eye to mining the extensive alunite3 deposits in the Wah Wah
Valley, jointly filed a competing application to appropriate water
in the valley. Soon after, the Water District filed a protest to
Appellants’ joint application.
1. Although the various statutes at issue in this case have all
been amended or renumbered since 2006, these changes are
inconsequential in the context of this case. Therefore, for ease of
reference, we cite to the most recent version of these statutes.
2. The parties agree that, at that time, UAC was not yet a ‚going
concern.‛
3. According to Appellants, alunite is ‚a sulfate mineral ore used
in the production of potash and alumina.‛
20140924-CA 2 2016 UT App 11Utah Alunite Corporation v. Jones
¶4 Finally, in May 2014, some eight years after the Water
District initially filed its application,4 the State Engineer issued a
set of decisions granting water rights to both the Water District
and Appellants. Appellants’ grant, however, was made ‚subject
to the [Water] District’s senior right.‛ Characterizing the
decisions as an effective denial of their application, in light of the
higher-priority grant to the Water District, Appellants sought to
challenge both orders and commenced actions for judicial review
of both decisions in district court. As to the State Engineer’s
decision addressing the water rights of the Water District, the
4. Although Utah’s appellate courts have occasionally criticized
administrative agencies for excessive delay in the resolution of
matters entrusted to them, see, e.g., Provo City v. Labor Comm’n,
2015 UT 32, ¶¶ 40–42, 345 P.3d 1242 (criticizing ‚the
administrative system‛ for six-year delay in review and decision
concerning application for disability benefits); Olsen v. Labor
Comm’n, 2011 UT App 70, ¶¶ 26–27, 249 P.3d 586 (criticizing
agency’s 38-month delay in processing an application for
disability benefits as ‚unreasonable‛ and potentially harmful to
‚claimant*s+ who ha*ve+ been erroneously denied benefits‛), in
this case the delay appears to be justified because the State
Engineer’s decision depended on hydrological data for the Wah
Wah Valley drainage area. Counsel for the State Engineer
explained during oral argument before this court that, at the
time the Water District filed its application, the State Engineer
lacked meaningful data about this desolate area of Utah’s west
desert on which to base his decision. Thus, the majority of the
time that the applications were under review was spent
developing a factual record from which the State Engineer could
calculate a sustainable appropriation of water from the valley.
Furthermore, counsel for the State Engineer advised us that Las
Vegas’s designs on water from the same general area added a
further complication to resolution of this matter. See generally
Brian Maffly, Court Rejects Las Vegas' Groundwater Rights to Rural
Valleys, Salt Lake Trib. (Dec. 12, 2013), https://perma.cc/3BBG-
8PZP.
20140924-CA 3 2016 UT App 11Utah Alunite Corporation v. Jones
district court concluded that it lacked subject-matter jurisdiction
because Appellants were not parties to the informal adjudication
of the Water District’s application and because they had not
exhausted their administrative remedies by timely protesting (in
the case of SITLA) or seeking to intervene (in the case of UAC).
Accordingly, the district court dismissed Appellant’s petition.
This appeal followed.
ISSUE AND STANDARD OF REVIEW
¶5 Appellants challenge the district court’s interpretation of
Utah Code section 73-3-14 and UAPA, arguing that their status
as aggrieved persons vests them with standing to bring this
appeal. ‚‘We review questions of statutory interpretation for
correctness, affording no deference to the district court’s legal
conclusions.’‛ Wasatch County v. Okelberry, 2015 UT App 192,
¶ 38, 357 P.3d 586 (quoting Marion Energy, Inc. v. KFJ Ranch
P'ship, 2011 UT 50, ¶ 12, 267 P.3d 863).
ANALYSIS
¶6 ‚[S]tanding is a jurisdictional requirement that must be
satisfied before a district court may even entertain the question
of whether the state engineer’s decision was consistent with the
requirements of Utah law.‛ Washington County Water
Conservancy Dist. v. Morgan, 2003 UT 58, ¶ 6 n.2, 82 P.3d 1125.
Thus, if UAC and SITLA lacked standing at the district court
level, we must dismiss the appeal because the ‚lack of standing
deprives us of jurisdiction over *the+ appeal.‛ See Packer v. Utah
Attorney General’s Office, 2013 UT App 194, ¶ 21, 307 P.3d 704.
¶7 And so we turn to section 73-3-14: ‚A person aggrieved
by an order of the state engineer may obtain judicial review‛ of
that order. See Utah Code Ann. § 73-3-14(1)(a) (LexisNexis 2012).
Appellants believe that this phrase is the alpha and omega of
standing to seek judicial review of an adverse decision of the
20140924-CA 4 2016 UT App 11Utah Alunite Corporation v. Jones
State Engineer. But it is not. Section 73-3-14(1)(a) goes on to say
that such an aggrieved person may seek judicial review only ‚in
accordance with Title 63G, Chapter 4, Administrative
Procedures Act, and this section.‛ Id. The explicit reference to
UAPA in section 73-3-14(1)(a) establishes that there are two
essential requirements for achieving standing to obtain judicial
review of a decision made by the State Engineer. First, one must
be an aggrieved person, that is, an interested person with an
‚actual or potential injury‛ resulting from the State Engineer’s
decision. Washington County Water Conservancy Dist., 2003 UT 58,
¶ 14. Second, by reason of section 73-3-14’s incorporation by
reference of UAPA, the aggrieved person must also be a party.
See Utah Code Ann. § 63G-4-401(1) (LexisNexis 2014) (‚A party
aggrieved may obtain judicial review of final agency action*.+‛)
(emphasis added). Thus, although a person may be negatively
impacted by a decision from the State Engineer that is adverse to
his or her interests—and thus be ‚aggrieved‛ in a general
sense—that person does not have standing to seek judicial
review unless he or she becomes a party, pursuant to UAPA, in
the proceeding sought to be reviewed. See id. § 73-3-14(1)(a)
(2012).
¶8 That ‚aggrieved person‛ and ‚aggrieved party‛ are not
co-extensive terms is confirmed by the separate definitions of
‚person‛ and ‚party‛ under UAPA. See id. § 63G-4-103(1)(f)–(g)
(2014). According to UAPA, a ‚person‛ is ‚an individual, group
of individuals, partnership, corporation, association, political
subdivision or its units, governmental subdivision or its units,
public or private organization or entity of any character, or
another agency,‛ id. § 63G-4-103(1)(g), while a ‚party‛ is ‚the
agency or other person commencing an adjudicative proceeding,
all respondents, all persons permitted by the presiding officer to
intervene in the proceeding, and all persons authorized by
statute or agency rule to participate as parties in an adjudicative
proceeding,‛ id. § 63G-4-103(1)(f). Therefore, only members of
the broader group of aggrieved persons who become parties—
i.e., those who commence an adjudicative proceeding, or are
respondents in that proceeding once commenced, or are
20140924-CA 5 2016 UT App 11Utah Alunite Corporation v. Jones
permitted by the State Engineer ‚to intervene in the
proceeding,‛ or are otherwise ‚authorized by statute or agency
rule to participate as parties in an adjudicative proceeding‛—
have standing to challenge the State Engineer’s decision. See id.See also id. § 73-3-14(1)(a) (2012) (requiring a "person aggrieved"
to meet the requirements of UAPA in order to obtain judicial
review of the State Engineer's decision).
¶9 There is no question that Appellants, although parties in
their own parallel administrative proceeding, were not parties to
the adjudicative proceeding commenced by the Water District’s
application under UAPA.5 Appellants did not commence the
proceeding; the Water District did—six years before Appellants
expressed any interest in the water. Furthermore, Appellants
were not protestants in that proceeding even though some 300
other persons and entities jumped into the fray and even though
SITLA could have filed a timely protest if concerned about the
Water District’s appropriation of water in the Wah Wah Valley.
And although intervention in the proceeding commenced by the
Water District was prohibited because the adjudication was
informal, see id. § 63G-4-203(1)(g) (2014), Appellants never
requested that the State Engineer convert the proceeding to a
formal adjudication, which would have allowed them to seek
intervention. Therefore, although Appellants are aggrieved
persons, they lack standing because only persons that are both
aggrieved and qualify as parties—aggrieved parties—have
5. Appellants do not contend otherwise. The thrust of their
position is that as aggrieved persons whose position was well
known to the State Engineer, by means of their status as parties
in another proceeding dealing with the same water, they had all
the standing they needed to seek judicial review of a
determination by the State Engineer that adversely affected
them, even though they had not technically been parties in the
proceeding culminating in that determination.
20140924-CA 6 2016 UT App 11Utah Alunite Corporation v. Jones
standing under section 73-3-14 and UAPA to contest a decision
of the State Engineer.6 See id. § 73-3-14(1)(a) (2012).
¶10 Our decision may seem to elevate form over substance
because the State Engineer undisputedly knew of Appellants’
interest in the Wah Wah Valley water and the adverse impact his
decision would have on them. And his decision was clearly
inimical to their interests. But deviating from the clear legislative
mandate of section 73-3-14 to force another outcome, sensible
though it might be in the narrow confines of this case, would
potentially skew other cases through the creation of bad
precedent that could not be limited—at least not in a principled
way—to the unique facts of this case. Moreover, as previously
mentioned, Appellants had available to them a number of
options and administrative remedies of which they failed to take
advantage. SITLA could have filed a protest as an interested
party after the State Engineer published notice of the Water
District’s application,7 see id. § 73-3-7(1), and UAC, as SITLA’s
lessee, could then likely have ‚piggybacked‛ on SITLA’s protest.
Appellants also could have requested that the State Engineer
convert the process into a formal adjudication. See id. § 63G-4-
6. Thus, persons that are parties under UAPA, but lack a legally
cognizable grievance, likewise lack standing. See Washington
County Water Conservancy Dist. v. Morgan, 2003 UT 58, ¶¶ 14–16,
82 P.3d 1125 (concluding that parties without a grievance lacked
standing to appeal); Badger v. Brooklyn Canal Co., 922 P.2d 745,
750 n.9 (Utah 1996) (same). So a party who is not also an
‚aggrieved person‛ lacks standing just as fully as does an
‚aggrieved person‛ who is not also a party.
7. As the State Engineer points out in his brief, ‚as a landowner
[in the Wah Wah Valley] with inevitable water needs, SITLA had
an interest in the water when the State Engineer published notice
of [the Water District’s+ Application in November 2006.‛ That it
did not file a protest is particularly curious in light of the fact
that some 300 other interested parties saw fit to do so.
20140924-CA 7 2016 UT App 11Utah Alunite Corporation v. Jones
202(3) (2014). Had the informal adjudication been converted into
a formal proceeding, Appellants could then have sought
intervention in the case. See id. § 63G-4-207(1). Had Appellants
requested formal adjudication, and had the State Engineer
refused to grant it or refused to allow Appellants to intervene
after converting the case to a formal proceeding, we could have
reviewed that decision, and this appeal and the appeal from the
order addressing UAC’s application could have been
consolidated. See id. § 63G-4-403(4)(h)(i) (providing that
discretionary agency actions taken in formal adjudication are
reviewed for abuse of discretion).
¶11 Under the actual circumstances and posture of this case,
however, Appellants were not parties and thus lack standing to
obtain judicial review of the State Engineer’s decision permitting
the Water District’s appropriation of water in the Wah Wah
Valley. Appellants’ rights to challenge the allocation of Wah
Wah Valley water are constrained by the contours of the case
they initiated.
CONCLUSION
¶12 Appellants were not parties to the proceeding concerning
the Water District’s application and therefore lacked standing
under UAPA to seek judicial review of the State Engineer’s
determination made in that proceeding even though they were
aggrieved by it. Absent such standing, the district court lacked
jurisdiction over Appellant’s judicial review petition and
correctly dismissed it. And absent such standing, we lack
jurisdiction over this appeal, which is hereby dismissed.
20140924-CA 8 2016 UT App 11