## Facts

- Diamond Valley is a groundwater-dependent farming region in Eureka County, Nevada, and the Diamond Valley Hydrologic Basin had been over-appropriated and over-pumped for decades, with withdrawals exceeding perennial yield.
- In 2011, Nevada enacted NRS 534.037 and NRS 534.110(7), creating a process for the State Engineer to designate an over-appropriated basin a critical management area (CMA) and for water-right holders to propose a groundwater management plan (GMP) intended to lead to removal of the CMA designation.
- Under NRS 534.037, the State Engineer may approve a GMP if, after considering specified factors (including hydrology and other listed considerations), the Engineer finds the plan will lead to removal of the CMA designation.
- The statutory scheme also provides that if a basin remains designated as a CMA for 10 years, the State Engineer must restrict withdrawals based on priority rights.
- The State Engineer designated the Diamond Valley basin as a CMA.
- A majority of the basin’s water-right holders developed a GMP aimed at returning the basin to sustainable use over a 35-year period.
- The GMP required reductions from all users, including senior right holders, but structured the reductions so that seniors could continue to withdraw more than juniors.
- The State Engineer approved the GMP.
- Several senior right holders, including Diamond Valley Ranch, LLC, sought judicial review, arguing that Nevada’s prior-appropriation doctrine and related water statutes barred approval of a plan that imposed reductions on seniors rather than curtailing juniors first.
- The district court granted the petitions for judicial review and invalidated the GMP.
- The State Engineer, Eureka County, and GMP supporters (including Diamond Natural Resources Protection & Conservation Association) appealed.

## Issues

1. Whether NRS 534.037 and NRS 534.110(7) authorize the State Engineer to approve a CMA groundwater management plan that departs from strict “first in time, first in right” administration by requiring scaled reductions from all right holders, including seniors.
2. Whether the State Engineer’s approval of the Diamond Valley GMP complied with the CMA statutes, such that the district court erred by setting the approval aside.

## Decision

- The Nevada Supreme Court reversed the district court’s order granting judicial review and reinstated the State Engineer’s approval of the Diamond Valley GMP.
- The court held that the Legislature gave the State Engineer discretion under NRS 534.037 and NRS 534.110(7) to approve a GMP for a CMA even if the plan does not mirror strict prior-appropriation curtailment.
- The court concluded the Diamond Valley GMP satisfied the CMA statutory requirements because it was designed to achieve conditions for removal of the CMA designation and the Engineer acted within the authority the statutes confer.

## Legal Principles

- NRS 534.110(7) and NRS 534.037 establish a specific CMA framework for addressing chronic groundwater overuse, including the use of a GMP as a management tool aimed at ending the CMA designation.
- Under NRS 534.037, the State Engineer may approve a GMP if the Engineer considers the mandatory statutory factors and determines the plan will lead to removal of the CMA designation.
- The CMA/GMP statutes authorize an alternative to immediate strict-priority administration within the CMA planning process; a GMP may impose basin-wide reductions that include senior users, so long as the plan meets statutory requirements.
- The statutory requirement that, after a CMA has remained in place for 10 years, the State Engineer must restrict withdrawals based on priority rights does not eliminate the Engineer’s authority to approve a qualifying GMP within the CMA regime.
- On judicial review, courts may not invalidate an approved GMP simply because it departs from traditional priority administration if the Legislature has authorized the State Engineer to approve a plan meeting the CMA statutes’ criteria.

## Conclusion

Diamond Natural Resources Protection & Conservation Association v. Diamond Valley Ranch, LLC held that Nevada’s CMA statutes (NRS 534.037 and NRS 534.110(7)) give the State Engineer discretion to approve a groundwater management plan designed to end a basin’s CMA status even when the plan uses scaled, shared pumping reductions that affect senior right holders, and the district court therefore erred in overturning the Engineer’s approval of the Diamond Valley GMP.


Diamond Natural Resources Protection & Conservation Association v. Diamond Valley Ranch, LLC, 511 P.3d 1003 (2022)