## Facts

- Trout Co. applied to appropriate 100 c.f.s. from Billingsley Creek near Hagerman, Idaho, for a fish hatchery and hydropower project.
- Local residents and water users, including Edward Shokal and the Reeds, filed protests.
- The Idaho Department of Water Resources (IDWR) held a hearing and issued (and later amended) Permit No. 36-7834 granting the appropriation.
- On judicial review, the district court reversed and remanded, finding IDWR’s analysis inadequate as to the applicant’s financial ability and the “local public interest,” and clarifying that the applicant bears the primary burden to show statutory compliance while protestants bear the burden of going forward on harms unique to themselves.
- On remand, IDWR held additional hearings and conditionally granted the permit, requiring further showings related to water quality, effluent control, monitoring, and revised design/construction plans.
- During the remand proceedings, the Director limited protestants’ ability to challenge the revised plans by excluding testimony and exhibits prepared or enhanced within a specified period, restricting responses to the modified proposal.
- A second district judge again reversed and remanded for a new hearing and issued detailed guidance on evaluating “local public interest.”
- Trout Co. and the Director appealed; protestants cross-appealed.

## Issues

1. Whether IDWR’s procedures during the remand proceedings denied protestants a full and fair opportunity to present evidence and cross-examine witnesses concerning revised project plans.
2. What standard governs an applicant’s showing of financial ability to complete a proposed water project.
3. How “local public interest” under Idaho Code § 42-203A must be defined and applied in evaluating applications for new water appropriation permits, including environmental and recreational considerations.

## Decision

- The Idaho Supreme Court affirmed the district court’s order remanding the matter to IDWR for a new hearing due to procedural error that limited meaningful participation by protestants regarding the revised proposal.
- The Court approved IDWR’s “reasonably probable” standard for financial ability, rejecting a requirement that financing be secured at the time of the permit decision.
- The Court construed “local public interest” broadly to include environmental and recreational values (including fish and wildlife habitat and water quality), and modified the district court’s detailed guidance rather than adopting it in full.

## Legal Principles

- In contested water-permit proceedings, affected protestants must be afforded a meaningful opportunity to be heard, including the ability to present relevant evidence and cross-examine witnesses on materially revised project proposals.
- An applicant need not prove financing is presently in hand; it is sufficient if the record supports a finding that it is reasonably probable the applicant can secure financing and complete the project within the statutory timeframe.
- “Local public interest” under Idaho Code § 42-203A is a broad inquiry that includes effects on existing users and the community, and encompasses non-consumptive values such as recreation, fish and wildlife habitat, and water quality.
- The applicant bears the primary burden to demonstrate the statutory criteria for permit issuance; a protestant alleging a harm peculiar to the protestant bears the burden of going forward with evidence of that particularized harm.

## Conclusion

The court required IDWR to conduct a new hearing because the remand process improperly constrained protestants’ ability to challenge revised plans, while confirming that financial capability may be shown by reasonable probability and that “local public interest” demands an explicit, broad assessment that includes environmental and recreational impacts.


Shokal v. Dunn, 707 P.2d 441 (Idaho 1985)