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case number 24-1241, Purgatory Recreation I versus United States.

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Good morning.

[00:00:13] Speaker 04:
May it please the court?

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I'm Steve Bushong, and I'm here representing the appellants in this case.

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I will try my best to save a couple minutes for rebuttal, but I'll go ahead and jump in.

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So this dispute involved

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the Purgatory Resort's water rights on East Fork of Hermosa Creek.

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So water rights are separate, distinct, and valuable property rights in Colorado.

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And what they do is they allow the owner of that water right the ability to divert water and put it to a beneficial use, such as snowmaking in this case.

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So a couple of the key facts that were cited in the complaint.

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In the 1991 exchange, the Forest Service acquired

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part of Purgatory's predecessors' land in that watershed, but only one of the water rights.

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It didn't acquire the rest of them.

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And the US knew about the rest of those water rights.

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In fact, three of them were decreed on the very land that the Forest Service acquired.

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And second point.

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in the facts.

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The Forest Service has always recognized the validity of these water rights.

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It had the ability in the Colorado Water Courts to oppose, and it either chose not to, or in one case, it did oppose, and it stipulated to the water right in the Colorado Courts.

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And in 2003, the Forest Service worked with Purgatory to develop a water master plan, and that plan specifically relied on these water rights.

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Also in 2008, the Forest Service worked again with Purgatory to develop new ski trails, new snowmaking that again relied on these water rights.

[00:01:59] Speaker 01:
Well, even though the statute of limitations had arguably expired, I suppose that the Forest Service could have said, that's the defense.

[00:02:09] Speaker 01:
We're going to choose not to assert it.

[00:02:12] Speaker 01:
But they never said that.

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There's nothing in the record on that.

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Is that correct?

[00:02:17] Speaker 04:
No.

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What happened was,

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Precisely, Your Honor, is starting in the early 2000s, Purgatory filed an application for a special use permit.

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And the Forest Service came back and said, well, we need to do some environmental analysis.

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And then that was done.

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And then in 2003, another permit application was filed.

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And the Forest Service came back and said, well, we have concerns with the trout back in the creek, right?

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So then at that point,

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The Purgatory and the Forest Service started working together.

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It had in-person meetings and communications to try to develop what the terms and conditions might look like on that permit.

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And then Purgatory submitted another application for a special use permit that, again, the Forest Service said, well, not enough information.

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We need more information.

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And in that letter, the Forest Service even said,

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we're working together on developing a well testing protocol that'll work for both sides.

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So the special use permit was so your client could do what?

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I need a special use permit to do what?

[00:03:26] Speaker 04:
Right, so the special use permits, your honor, are required to go back and access, even if you have an access easement, you still have to file for a special use permit to go back and in this case it was to drill a test well

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to be able to begin developing these water rights that had already been decreed and are already vested property rights in Colorado.

[00:03:50] Speaker 01:
But that's only because you're going over land that now the National Forest Service owned.

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You wouldn't have needed that if the National Forest Service didn't own that land, isn't that correct?

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That's right.

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When that was private land, you would not need a forest service permit.

[00:04:11] Speaker 01:
Well, one other thing I'm just not completely clear about.

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Why weren't there, the record probably says this and I just missed it, but why didn't Purgatory find alternative access that was not over National Forest Service land?

[00:04:29] Speaker 04:
Well, those water rights are, were decreed, the three in particular were decreed on private land and that private land was then exchanged

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with the Forest Service.

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And under Colorado law and federal law, there would be an implied easement way of necessity to access the water rights that were not conveyed.

[00:04:48] Speaker 01:
That wasn't my answer.

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My question is, let's assume that purgatory said, well, we think we have rights over the Forest Service land, but we may lose that.

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Don't we have another way to access that water?

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Was there anything in the record about whether they could have

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drilled wells and gotten the groundwater aquifer on a different location or access the direct stream off of National Forest Service land.

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I'm not sure it decides this case, but I'm just curious if there were alternatives available.

[00:05:23] Speaker 04:
So that was actually looked at.

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I'm not sure how much of it was actually pled in the complaint, because that's what we have.

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But those were looked at.

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One thing that was pled in the complaint was in response to the Forest Service, there was an effort to

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to go up the mountain and drill a deeper well, all the way down to the same aquifer, and that was unsuccessful.

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The other thing, too, is to also answer your initial question.

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So this is all now forest service land, so there's no way to access the decreed

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points of diversion for those water rights without going on through Forest Service property.

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Right.

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So one of your problems is that in Western Water Law, you have to take your water at a certain point unless you get the state to approve a different point of diversion.

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That is correct.

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And where you are right now, your point of diversion is located on the Forest Service.

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That is correct, especially after the land exchange.

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Some of the water rights were originally decreed on Forest Service land.

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Some were decreed on private land.

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But now they're all on Forest Service.

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Did anyone from the Forest Service ever specifically tell you they disagreed that you had an easement?

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Do you have any communications, anything from the Forest Service that we can look at where they would have disputed your easement?

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Not that I recall until the Forest Service came in in 2010.

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So after all of these meetings and all these efforts, the Forest Service came in to a water court proceeding and said, okay, we're not going to allow you to access your water right.

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That is the first time there was a clear definitive statement that they were excluding the access that the parties have been working to try and develop terms and conditions.

[00:07:12] Speaker 01:
Isn't that apparent?

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that they were saying, unless and until we were to grant you a sup, you obviously can't come across this land.

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That's our power over you.

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And the reason we're exercising it is because we're not sure that we want to give up that water rights.

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I think they were consistent throughout that they had the power still to keep you from entering their land to get these water rights.

[00:07:44] Speaker 04:
Well, Your Honor, respectfully, one thing I would point out.

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So the test that this court has applied when the quiet title claim involves an easement instead of fee title is called the peaceable coexistence standard, right?

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And it's been applied a couple of times, Kane County and the San Juan County cases.

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In Kane County, they said the determinative issue is whether the government's actions, and I quote,

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amounted to a claim of exclusive control or whether it permitted the United States ownership interests in the plaintiff's right of way to peaceably coexist.

[00:08:21] Speaker 01:
The peaceable coexistence was always that Purgatory didn't have access to that property.

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That was the status quo.

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It was peaceable.

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At no point was Purgatory

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taking water out of that land over forest service land as the peaceable status quo?

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Well, Your Honor, the water rights are conditional water rights.

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To perfect them, you have to go in and divert them and put them to use.

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That's what Purgatory attempted to do after the exchange occurred, right?

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And under Colorado law, as well as federal law, when there is a

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conveyance of land and a certain property interest is not conveyed.

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The law implies that easement by necessity to access those water rights.

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I don't think anyone disputes that, but I think maybe the question would be

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At what point was it apparent to your client that the Forest Service was not going to let you access your easement?

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I mean, at the point where that became clear, whichever one it was, I mean, you're on notice that you have to do something.

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Would you agree with that?

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Yes.

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Okay.

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And prior to 2010,

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Purgatory and this is what's been pled in the complaint.

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Purgatory and the Forest Service were working together to develop protocol on how the water rights could be utilized and accessed without impacting the trout.

[00:10:04] Speaker 01:
But what you were on notice of almost right from the beginning was that the Forest Service

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was saying what was exercising the right that you cannot come on this land to access that water.

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We have the power to preclude you from access, and we are doing that until and unless there's a change in the circumstances, e.g.

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that we come up with a plan with you.

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And until that happens, yes, we are exercising our right to preclude you from the land.

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That's obvious because they never went on the land and started drilling.

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They knew they couldn't.

[00:10:41] Speaker 04:
Well, one thing, too, that I believe we set forth in the brief, the law that both parties had to abide by was that even if purgatory has a common law easement to access its water rights, it still has to apply for a special use permit.

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And the United States has the ability to regulate the access through that special use permit.

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So that's the law that the parties were working within.

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So yes, in the sense that purgatory had to apply, that's what the law requires.

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And the fact that the Forest Service was regulating it, they have the ability to do that.

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They just can't regulate it out of existence.

[00:11:17] Speaker 03:
I guess your position is that your easement is still private property, but it can be regulated to some degree by the Forest Service.

[00:11:28] Speaker 04:
Yes, and we cited the Ginks cases and other cases that actually give the Forest Service that authority.

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And that's what the parties were working to do.

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And I think another important factual component of that issue

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is that it wasn't just the Forest Service that wanted to protect the trout.

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Purgatory had already committed to doing that in its water.

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It had to.

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So they were both trying to accomplish the same goal.

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Purgatory had also already voluntarily subordinated its senior water right to a decreed in-stream flow water right in Colorado.

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And that was done before the exchange.

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And then Purgatory also got rid of all of its vested property rights and reservoirs in that watershed.

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All of that was done to protect the trust.

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So the parties were working together to accomplish the same goal, working on the terms and conditions.

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How can we do this?

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Drill down deeper, move the wells around.

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What are the different options we have to allow for the terms and conditions on the permit so you can use your water rights?

[00:12:29] Speaker 01:
But what was not done was asking the Forest Service to grant an extension, a waiver or an extension of the statute of limitations, agreeing not to assert it.

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That is not in the pleadings, but actually that was discussed.

[00:12:44] Speaker 01:
Well, we got to limit ourselves to the pleadings, yeah.

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Right.

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And so the complaint was initiated less than 12 years after the 2010 statement where the Forest Service said

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And I think the important point too is the Forest Service supervisor, the long time one, testified under oath that the Forest Service position evolved and changed until they decided in 2010 when they opposed that water court case that they weren't going to allow the access.

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And I think that's important.

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In our view, that's like an admission against interest.

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Council, I think Judge Matheson's asking a question.

[00:13:23] Speaker 05:
I'm sorry, Judge.

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We just, Judge Ebell was just making the point, working off the pleadings, we're working off the complaint.

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And your complaint sets for two claims, one under the Quiet Title Act and the other for declaratory release.

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And my question goes to the relationship between those two claims.

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Why

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You have reference in the complaint to the Flipma statute, the Anilka statute and takings.

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And my question is, why aren't those claims, if they are claims, inextricably linked to the Quiet Title Act claim?

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In other words, if you lose on the Quiet Title Act claim because it's untimely, why don't you lose on everything?

[00:14:24] Speaker 04:
Your honor, so under the Declaratory Judgment Act claim, clearly it was pled broadly and probably does have some overlap with the Quiet Title Act.

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I think two of the claims that we've really pressed upon both in district court and here is that

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two of them were really completely separate because they involve just the water rights, looking at the required forfeiture of a water right for in stream flows, which is outside of the Forest Service's ability under federal law, right?

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And contrary to the McCarran Amendment that subjects the Forest Service to state law, that was one

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for example, of the specifically requested release for declaratory judgment.

[00:15:01] Speaker 01:
But you look at Anilka, it does not provide relief.

[00:15:05] Speaker 01:
It has to be implied.

[00:15:06] Speaker 01:
There's nothing in there about specifically, here's the relief.

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And it seems to me that the relief is the quiet title action.

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And the US Supreme in the Ninth Circuit, rather,

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In Ray US, which ambiguous site, but it's 67F4, 1006 concluded that quiet title action is the exclusive means by which a plaintiff contain, can claim an easement in land.

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That is, this is an easement.

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It's not an easement by adverse possession.

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They're claiming an easement through regulation.

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And I suppose maybe through implied conduct,

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But it still isn't, ultimately it comes down to they are claiming an easement.

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And that's a property right, which is always resolved by quiet title actions.

[00:16:01] Speaker 04:
Yes, and we do understand that the Anilka and Flipma, part of the reason why they were applicable under the Quiet Title Act was we

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were claiming easements also under those statutes and Jenks links those statutes with.

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So it's just multiple ways of claiming you have an easement.

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But once you claim an easement for any basis, it's got to get resolved as a property right under the Quiet Title Act.

[00:16:26] Speaker 04:
I agree with that.

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But under the declaratory judgment claims that were made, some of those claims were very specific to the water rights.

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And one of the problems there is the Quiet Title Act does not allow you

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to seek a quiet title claim of relief for water rights.

[00:16:42] Speaker 01:
For what?

[00:16:42] Speaker 04:
For water rights.

[00:16:44] Speaker 04:
The Quiet Title Act excludes water rights from its purview.

[00:16:47] Speaker 03:
I mean, your claim as to the water rights themselves, that's more of a state court or state administrative agency type of claim, though, isn't it?

[00:16:57] Speaker 03:
I mean, how is this court going to declare your rights to a stream

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I mean, that's something we generally don't do.

[00:17:08] Speaker 04:
That is correct.

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But those rights already exist.

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They've already been decreed.

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They're vested property rights.

[00:17:14] Speaker 03:
Then what do you need from us?

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I'm sorry, Judge Matheson.

[00:17:18] Speaker 03:
Go ahead.

[00:17:19] Speaker 05:
Well, I was asking the same thing, Judge Carson.

[00:17:22] Speaker 05:
It seems to me that no one's contesting that you have the water rights.

[00:17:26] Speaker 05:
So why do you need a declaration from this court?

[00:17:31] Speaker 05:
Are we just back to the easement?

[00:17:34] Speaker 04:
We're back to the easement on most of it, but the couple of issues that we specifically identified for declaratory relief that pertain only to the water rights is a forfeiture of the water rights for in-stream flows, which the Forest Service does not have the legal right to do, and they're circumventing the law on that.

[00:17:55] Speaker 04:
So we're challenging the lawfulness of that action.

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It also ends up resulting in a taking of the property, if that were to be allowed.

[00:18:04] Speaker 05:
So we were also raised a taking claim under... Can I just ask you about the takings claim?

[00:18:12] Speaker 05:
Are you saying that the takings claim has occurred?

[00:18:16] Speaker 05:
When did the taking occur or has it occurred?

[00:18:23] Speaker 04:
That is a great question because the 2010 statement

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by the Forest Service could be construed to initiate the taking when they said, we're not going to allow you to access your water rights.

[00:18:35] Speaker 01:
However, after that, they're not taking your water rights.

[00:18:40] Speaker 04:
They worked with Purgatory to try to develop terms and conditions on that.

[00:18:43] Speaker 01:
But you agree that they're not taking your water rights.

[00:18:47] Speaker 01:
So the question is, if it's taking, you've got to have something that you're taking.

[00:18:52] Speaker 01:
It has to be a right.

[00:18:53] Speaker 01:
It's not a water right.

[00:18:54] Speaker 01:
What is it?

[00:18:55] Speaker 01:
You're saying it's an easement right.

[00:18:57] Speaker 01:
That's what our case is all about.

[00:18:59] Speaker 01:
Do you have an easement right?

[00:19:00] Speaker 01:
You didn't have an easement declared.

[00:19:02] Speaker 01:
You didn't have an easement reserved.

[00:19:04] Speaker 01:
You're not really claiming it by adverse possession.

[00:19:06] Speaker 01:
So do you have a right, an easement right?

[00:19:09] Speaker 01:
It's not a water right we're addressing here at all.

[00:19:12] Speaker 04:
Well, there's an easement right by necessity that was asserted.

[00:19:16] Speaker 04:
But we also asserted also the vested property right and water rights that what the Forest Service, the effect of what the Forest Service is trying to do is unlawful.

[00:19:26] Speaker 03:
And that's an inverse condemnation claim.

[00:19:28] Speaker 04:
Like a regulatory claim.

[00:19:30] Speaker 04:
Right.

[00:19:31] Speaker 01:
But are they using your water rights?

[00:19:34] Speaker 04:
They are not using them.

[00:19:35] Speaker 04:
They don't claim to own them.

[00:19:36] Speaker 04:
But by requiring the forfeiture of those rights to the stream for in-stream flows, they are prohibiting

[00:19:44] Speaker 04:
Purgatory from using the water.

[00:19:45] Speaker 03:
Will you have a remedy for that in the claims court though?

[00:19:48] Speaker 03:
Don't you?

[00:19:50] Speaker 04:
We raised it here is for declaratory relief because we believe what the Forest Service is doing will result in a taking.

[00:19:59] Speaker 04:
But yes, if if this that is allowed to occur, we would have to go to the claims court.

[00:20:05] Speaker 04:
The problem is is it would be similar to an uncompensable damage because the resort is relying on these water rights, right?

[00:20:12] Speaker 01:
Or you could probably also, couldn't you, go to the water court and somehow make a statement there that you are asserting the rights, but you're denied the right to physically claim it, but you are continuing to assert them and you want your rights to be preserved.

[00:20:29] Speaker 04:
I mean, we are in water court in a case that's been stayed to allow these issues to come forward in federal court.

[00:20:38] Speaker 01:
If you have that other option, you don't know how it's going to turn out, but it is a venue.

[00:20:41] Speaker 04:
But I don't know if the water court honestly would have jurisdiction over federal actions.

[00:20:48] Speaker 01:
No, but they might have jurisdiction to declare that about whether you have lost your water rights as a result of that or not.

[00:20:56] Speaker 04:
That is the Forest Service's position in that case.

[00:20:59] Speaker 01:
But there is a forum to resolve that, and that's the state water right court.

[00:21:07] Speaker 04:
Right, but if there's no access to the decreed point of diversion?

[00:21:12] Speaker 04:
and there's no other way to get to those water rights, then those actions are going to result in a potentially loss of the water rights.

[00:21:22] Speaker 01:
That's not a question before us, nor within our expertise.

[00:21:25] Speaker 01:
That'll have to be by the water court.

[00:21:27] Speaker 01:
It's going to have to resolve all that, I suppose.

[00:21:30] Speaker 04:
Well, the reason we came before federal court was because purgatory claims an easement to access its water rights.

[00:21:38] Speaker 03:
OK.

[00:21:38] Speaker 03:
Well, thank you, counsel.

[00:21:39] Speaker 03:
You're out of time.

[00:21:41] Speaker 03:
Judge Matheson?

[00:21:43] Speaker 03:
Do you have anything else?

[00:21:45] Speaker 05:
Let me just ask you, you just said potential loss of water rights.

[00:21:50] Speaker 05:
Doesn't that make your takings, your request for a declaration on takings premature?

[00:21:58] Speaker 05:
In other words, it isn't right.

[00:22:03] Speaker 04:
In Duke Power and Eastern Enterprises, the US Supreme Court did allow a Declaratory Judgment Act claim for individuals threatened with a taking.

[00:22:13] Speaker 04:
And so part of the, if we were gonna be here in district court, litigating over those access easements, the district court would have all the facts before it to also determine whether that would be, that threatened action would be a taking, even though it hasn't occurred yet.

[00:22:33] Speaker 03:
Okay.

[00:22:33] Speaker 03:
Thank you, counsel.

[00:22:34] Speaker 04:
Thank you.

[00:22:43] Speaker 00:
Good morning, Your Honor, and may it please the court to marry around you for the United States.

[00:22:48] Speaker 00:
I'd first like to draw the court's attention to the plaintiff's complaint at paragraph 62 and that page one of their reply brief where they confirm that one of the reasons they applied for a special use permit was for the specific reason of getting access to their conditional water right.

[00:23:06] Speaker 00:
So one of the reasons they actually sought the permit was for access.

[00:23:12] Speaker 00:
Now, they applied.

[00:23:14] Speaker 03:
Let me stop you for a minute.

[00:23:16] Speaker 03:
But they have to, right?

[00:23:17] Speaker 03:
So even, well, first, let me ask you this.

[00:23:19] Speaker 03:
Do you disagree that they have an easement or that they at one time had an easement?

[00:23:24] Speaker 00:
We do not agree that they had an easement.

[00:23:27] Speaker 00:
That was never, and you can read the complaint, it was never asserted to the Forest Service that we have an easement, Forest Service, and we're applying because we simply have to.

[00:23:37] Speaker 00:
That was never stated.

[00:23:38] Speaker 00:
The Forest Service never said, we know you have an easement.

[00:23:42] Speaker 03:
But you've never, I mean, until all this, you never said they don't either.

[00:23:46] Speaker 03:
Like during this, if they had one, you would agree that they would still have conditions placed on their access.

[00:23:54] Speaker 00:
They would have conditions, but what they're claiming is they have an actual right in the land.

[00:23:59] Speaker 00:
That's different from as a part of a permit, we get access.

[00:24:04] Speaker 00:
They were coming to the Forest Service to get access.

[00:24:08] Speaker 00:
And indeed, they never accessed the land as they concede in their reply brief at page seven.

[00:24:13] Speaker 03:
Well, let me ask you this.

[00:24:14] Speaker 03:
What would have happened if they would have driven a truck down to the point of diversion and started drilling a well?

[00:24:21] Speaker 00:
in terms of you're saying what would the Forest Service have done because they accessed the land?

[00:24:26] Speaker 03:
You would have noticed them for trespass.

[00:24:29] Speaker 00:
Most likely simply because the Forest Service knew of no existence of an either.

[00:24:32] Speaker 03:
Right.

[00:24:32] Speaker 03:
I mean, so they, I mean, a lot of times this gets circular because you say, well, they never, they never exercised their rights.

[00:24:38] Speaker 03:
They came to us to ask if they could get on.

[00:24:40] Speaker 03:
Well, of course they did because if they just went down there, you would have, you would have, you would have charged them with trespass.

[00:24:46] Speaker 03:
And then you'd have had litigation over whether they were trespassing.

[00:24:50] Speaker 00:
Well, and the fact that there is an issue as to who has a right over the land simply illustrates that there was a trigger, there was a quiet title dispute that needed to be resolved.

[00:25:04] Speaker 00:
If plaintiff's predecessors believed that they had a reservation in this land,

[00:25:10] Speaker 00:
And then at any point, the Forest Service did anything, like, for example, in your hypothetical, said there was a trespass.

[00:25:17] Speaker 00:
If there was anything that the Forest Service did that indicated they were asserting any sort of adverse interest in this alleged right in the property, then it was incumbent upon plaintiffs to then bring a quiet title action to settle this dispute, to determine who has the right over the specific parcel of land.

[00:25:37] Speaker 01:
So I take, I mean, what I understand your argument to be is, at least for me, the take home point is that we need to keep in mind that we're not asked to decide access rights.

[00:25:51] Speaker 01:
or water rights, or even, I should have said water rights, or particularly even access rights, we're asked simply, has the statute of limitations run?

[00:26:01] Speaker 01:
That's it.

[00:26:01] Speaker 00:
That's absolutely right, Your Honor.

[00:26:03] Speaker 01:
A lot of this- All this other stuff we can say isn't before us.

[00:26:06] Speaker 00:
Indeed, indeed.

[00:26:07] Speaker 00:
And it's easy to get caught up in who exacts those sorts of things.

[00:26:10] Speaker 00:
It's simply, when did plaintiffs predecessor or plaintiffs realize- They know.

[00:26:15] Speaker 01:
that there was a potential challenge.

[00:26:17] Speaker 01:
Exactly.

[00:26:19] Speaker 03:
So most fundamental.

[00:26:21] Speaker 03:
But those things matter to determining when they had notice.

[00:26:25] Speaker 03:
Because if their position is, we had an easement and you knew about it, and your position is we never knew about it, and we were hostilly challenging your possession, at some point, back and forth,

[00:26:43] Speaker 03:
when they were filing their special use permit, the responses were things like, we don't have enough resources.

[00:26:50] Speaker 03:
We're sending it back because it's insufficient.

[00:26:53] Speaker 03:
We need information.

[00:26:54] Speaker 03:
You didn't submit enough information.

[00:26:57] Speaker 03:
Those are like four letters that went back and forth there.

[00:27:01] Speaker 03:
But never in there was something that said, you don't have access.

[00:27:06] Speaker 03:
We're never gonna let you on.

[00:27:08] Speaker 03:
It was,

[00:27:10] Speaker 03:
You didn't give us enough information.

[00:27:12] Speaker 03:
We don't know.

[00:27:13] Speaker 03:
I mean, so the facts, I mean, even though we don't have to necessarily decide title, the communications matter, don't they, for us to determine when they were on notice that they had to file?

[00:27:28] Speaker 00:
First, the fact that the Forest Service... Answer that for me first.

[00:27:34] Speaker 03:
The communications matter for us to determine

[00:27:39] Speaker 03:
when they were on notice.

[00:27:41] Speaker 00:
The communique.

[00:27:42] Speaker 00:
Well, actually, no, because in 1991, this was all established when the warranty deed was was executed.

[00:27:48] Speaker 03:
Would you agree with me that basically all of the implied water infrastructure rights in western water law were implied?

[00:27:58] Speaker 03:
I mean, ditches that run across Forest Service land, diversions that are on public land, where the Forest Service or the federal government owns the land, but there's nothing in writing as to who owns what.

[00:28:16] Speaker 03:
But there have been held to be implied rights to access those ditches, access those diversions.

[00:28:22] Speaker 00:
I can't speak to the general status of things, but indeed, there can be implied rights.

[00:28:28] Speaker 00:
But when you have a land exchange or the sale of property, which you had in this case, and what we have here is plaintiff's predecessor sold some land.

[00:28:38] Speaker 00:
And according to plaintiffs now, they reserved an easement.

[00:28:43] Speaker 00:
One would think that if that were the case, that at some point plaintiffs would know, well, actually, at the time of the execution, plaintiff's predecessor would have said, well, hold on.

[00:28:54] Speaker 00:
I'm reserving an easement, and would have recognized the easement and placed that information expressly in the agreement, for example, the exchange agreement and the deed.

[00:29:04] Speaker 00:
What's important in this case, though,

[00:29:06] Speaker 00:
is that the deed and the agreement are not silent as to the aspect of reservation.

[00:29:12] Speaker 00:
It's not a question of us saying, well, gee, the agreement and the deed were silent.

[00:29:17] Speaker 00:
So that means possibly there could have been an implied reservation or not.

[00:29:23] Speaker 00:
They weren't silent.

[00:29:25] Speaker 00:
To the contrary, they have a specific provision for identifying any interest that was to be reserved by the plaintiff's predecessor.

[00:29:34] Speaker 00:
A specific provision that identified any interest such as an implied easement.

[00:29:40] Speaker 01:
Well, read that language, because does it say such as employment easement?

[00:29:45] Speaker 00:
No.

[00:29:45] Speaker 00:
What I'm saying is it speaks to, are there any reservations?

[00:29:49] Speaker 00:
That's what both documents say.

[00:29:50] Speaker 03:
What does it say?

[00:29:51] Speaker 03:
Read the language.

[00:29:52] Speaker 00:
It says reservations.

[00:29:54] Speaker 00:
It has reservations, which is a category, and it says no.

[00:29:57] Speaker 00:
What that means, because it doesn't qualify a certain type of reservation, a hidden reservation, it says reservation.

[00:30:05] Speaker 00:
That's properly and fairly construed as any reservation.

[00:30:09] Speaker 00:
The answer is no.

[00:30:10] Speaker 00:
It's an express no.

[00:30:11] Speaker 00:
It's an unqualified no.

[00:30:13] Speaker 00:
It's an affirmative no, which is a declaration that there were no reservations.

[00:30:18] Speaker 00:
And if indeed this implied easement existed, you would think the plaintiff's predecessor would have thought, well, Jeepers, I can't go forward with two documents, one of which is a deed that says there are no reservations.

[00:30:32] Speaker 00:
It was incumbent upon the predecessor at that time to either put in that there was a reservation or to know that after 1991, when that deed was recorded,

[00:30:42] Speaker 00:
The United States had a fair claim to ownership of all of the land unencumbered by any unnamed or additional or unidentified easement.

[00:30:55] Speaker 03:
Does the United States make a claim to the water rights themselves?

[00:30:59] Speaker 00:
No, we don't.

[00:31:00] Speaker 03:
You do understand, don't you, that water rights are pertinent to a piece of land and that if they're not reserved, they pass under a general warranty deed.

[00:31:11] Speaker 00:
I'm not familiar with that circumstance.

[00:31:13] Speaker 00:
What I have is what we have before us.

[00:31:15] Speaker 03:
Right.

[00:31:16] Speaker 03:
I'm just pointing out that that might be inconsistent with your position.

[00:31:19] Speaker 03:
You may be very well right.

[00:31:22] Speaker 03:
The best practice would have certainly been to draw a plat out and reserve an easement to go down there where you can drill your wells.

[00:31:33] Speaker 03:
It's not sure it's that simple.

[00:31:36] Speaker 00:
And I do know a little bit about appurtenance, and I should shut up right now, just in case.

[00:31:41] Speaker 00:
But you're saying the water right would be appurtenant to the land.

[00:31:44] Speaker 00:
Yes.

[00:31:46] Speaker 00:
Our position is there's no ownership interest, there's no property interest, there's no right in the land, so there's no appurtenance to take place.

[00:31:55] Speaker 00:
Right.

[00:31:56] Speaker 03:
That wasn't really my point, but I got it.

[00:31:58] Speaker 00:
Yeah.

[00:32:00] Speaker 00:
OK.

[00:32:01] Speaker 00:
So what we have established.

[00:32:03] Speaker 05:
Can I just ask you about what the statute requires for notice?

[00:32:11] Speaker 05:
Right.

[00:32:12] Speaker 05:
Quiet Title Act says the action accrues on the date the plaintiff knew or should have known of the claim of the United States.

[00:32:25] Speaker 05:
Are you saying that the predecessors have actual notice of the Forest Service's position, or are you arguing that they should have known what the Forest Service's position was?

[00:32:41] Speaker 05:
And in terms of the cases that have applied this statute, what does the law require by way of notice?

[00:32:53] Speaker 05:
Could you help us with what the notice requirement is?

[00:32:59] Speaker 00:
So as of 1991, with the recording of the warranty deed, the plaintiff's predecessor had actual notice that the United States had claim of ownership to all of the lands that were conveyed that hadn't been accepted in the... Without a reservation of easement legally.

[00:33:18] Speaker 00:
Correct.

[00:33:18] Speaker 01:
But that, of course,

[00:33:20] Speaker 01:
an easement by adverse possession can occur later.

[00:33:24] Speaker 01:
We know that doesn't happen here because there never was adverse possession.

[00:33:27] Speaker 01:
There was no possession at all.

[00:33:29] Speaker 01:
So then we'd have to ask, well, what other kinds of easements could there be?

[00:33:34] Speaker 01:
There could be an implied easement.

[00:33:36] Speaker 01:
but you can't have an implied easement when you have an express preclusion of any other easements.

[00:33:41] Speaker 01:
So those are the only two kinds of easements I'm aware of over the land.

[00:33:47] Speaker 01:
We're not talking about rights over the water.

[00:33:51] Speaker 01:
Are there any other kinds of easements that are potentially at play here other than legally bestowed easements and implies easements or adverse possession easements?

[00:34:02] Speaker 01:
And we know that didn't apply.

[00:34:03] Speaker 01:
because they never had possession of the access.

[00:34:05] Speaker 01:
That's what the complaint's all about.

[00:34:07] Speaker 01:
So other than those three kinds of easements, are there any other legal kinds of easements you know about that exist in the law?

[00:34:14] Speaker 00:
Not that have been alleged or asserted in the complaint, no, Your Honor.

[00:34:18] Speaker 00:
And just touching back on the matter of notice.

[00:34:21] Speaker 00:
So we had actual notice in 1991, and plaintiffs themselves have conceded that one obtains constructive notice upon the recording

[00:34:30] Speaker 00:
of a deed, for example.

[00:34:31] Speaker 00:
And so that occurred in 1991 here.

[00:34:35] Speaker 00:
So we had constructive notice as well.

[00:34:37] Speaker 00:
And to get to the point of what the stand, this is a very important point, the standard by which this court determines whether quiet title action has accrued, this court has adopted longstanding and well-established principles and standards, three of which are particularly relevant here in this case.

[00:34:56] Speaker 00:
Of course, the court knows them.

[00:34:57] Speaker 00:
But in this particular case, they bear

[00:35:00] Speaker 00:
repeating, the government's asserted interest or claim in the property need not be clear and unambiguous.

[00:35:09] Speaker 00:
Indeed, the government's asserted interest could actually be an invalid claim.

[00:35:14] Speaker 00:
Second, the plaintiffs cannot wait until the government's assertion of a property interest crystallizes into a well-defined or open disagreement.

[00:35:26] Speaker 00:
where there are circumstances that are less than clear, it's still incumbent upon the plaintiff to bring their quiet title action in a timely fashion.

[00:35:37] Speaker 01:
any evidence that would put a reasonable person on notice that there may be a problem.

[00:35:43] Speaker 01:
Not that there is a problem, but that there may be a problem.

[00:35:46] Speaker 00:
Yes, Your Honor.

[00:35:47] Speaker 00:
And all that's necessary for triggering the statute of limitations, because as this Court has recognized, it's an exceedingly light trigger, is that the claimant knew or should have known that the government had asserted or was asserting some adverse interest

[00:36:04] Speaker 00:
in the property that's at issue.

[00:36:06] Speaker 00:
And indeed, we had that first and foremost in 1991 and at the very latest in 2006.

[00:36:13] Speaker 03:
Let me ask you about your deed.

[00:36:15] Speaker 03:
I have two questions.

[00:36:16] Speaker 03:
The first one's about your deed, 1991 deed position.

[00:36:22] Speaker 03:
In all implied easement by necessity cases, there was an unlimited transfer of rights

[00:36:34] Speaker 03:
in a warranty deed.

[00:36:35] Speaker 03:
And even though it was unlimited, it is implied because they retained a piece of property within the tract that was sold.

[00:36:48] Speaker 03:
that there's an implied easement by necessity to get to that property.

[00:36:53] Speaker 03:
I'm afraid that your position would swallow up the doctrine of easement by necessity.

[00:36:59] Speaker 03:
I guess, tell me if your position would be that because there was something that said no reservations, that somehow makes it different than just a warranty deed that gave everything with no exclusions and one that specifically said no reservations.

[00:37:14] Speaker 00:
Your Honor, I believe it certainly is.

[00:37:16] Speaker 00:
There are two things about this case that distinguish them from the scenario you're suggesting, one of which is the specificity and detail that these two documents, the agreement and the deed, include.

[00:37:28] Speaker 00:
So we have this exhaustive list, for example, of all of the encumbrances.

[00:37:33] Speaker 00:
There were many encumbrances to which the land conveyance was subject.

[00:37:36] Speaker 00:
And then we have the language that title was to be free, good title, free of all encumbrances,

[00:37:42] Speaker 03:
That's that's every warranty deed.

[00:37:44] Speaker 00:
So so you would follow it up with a specific provision that says no.

[00:37:49] Speaker 00:
And as I said, it makes it's not reasonable that the predecessor could have sat with two documents, one of which was recorded and said, I'm good with that, knowing very well that for some reason I'm hiding the fact that I've reserved a right or an easement over the land.

[00:38:05] Speaker 03:
Well, I think it was almost certainly a mistake, as are all implied easement-by-necessity cases.

[00:38:13] Speaker 03:
Everybody at the end of those cases wishes they would have put an easement in there.

[00:38:17] Speaker 03:
So I get your position on that.

[00:38:19] Speaker 03:
Let me ask you another one.

[00:38:22] Speaker 03:
And this sort of has to do with the ability of the government to regulate a vested property, a recognized E. I'm not asking you to admit they have a recognized easement.

[00:38:34] Speaker 03:
I want you to assume there is a recognized easement and that we were to say no, they didn't have notice and that the district court says yes, they have an easement.

[00:38:46] Speaker 03:
Is it your position that they would then be able to go directly to the property, drive on it, and start drilling a well?

[00:38:54] Speaker 03:
Or would they have to negotiate some kind of use permit with the government?

[00:39:01] Speaker 00:
They wouldn't have to negotiate a use

[00:39:04] Speaker 00:
access, they wouldn't have to negotiate for access, but whatever they were proposing on the lands, they would have to get authority from the Forest Service.

[00:39:14] Speaker 00:
Well, one would think they would walk up to the Forest Service and say, here's my, either I have an implied, and these are the circumstances, an implied easement, or here's this paper that says I have an

[00:39:25] Speaker 03:
No, I get it.

[00:39:26] Speaker 03:
What I'm trying to drill down on are positions such as, if they had this right, why were they negotiating with us?

[00:39:34] Speaker 03:
I mean, that may not be your position.

[00:39:38] Speaker 03:
But it seems that it's a fair statement that everybody should be able to agree that just because they have an easement doesn't mean that they can just go do whatever they want with it on the Forest Service land.

[00:39:50] Speaker 03:
They have to engage with the Forest Service

[00:39:55] Speaker 03:
about how they're going to use it.

[00:39:56] Speaker 00:
Yes.

[00:39:57] Speaker 03:
OK.

[00:39:58] Speaker 03:
And so, I mean, they have their argument is that's what they were doing.

[00:40:03] Speaker 03:
And so, I mean, I understand your position is different on it than theirs, but I just I want to make sure we're not talking in absolutes on these things.

[00:40:11] Speaker 00:
I understand, Your Honor.

[00:40:12] Speaker 00:
And with all due respect, if they walked into day one, let's say 2001, when they first started negotiating with the Forest Service,

[00:40:20] Speaker 00:
If they had in the back of their minds that they had an easement and the Forest Service denied year one their permit, denied year two, denied three and four, at some point it's reasonable to think plaintiffs or their predecessors would have thought, wait a minute, if they believe that they needed to come to the Forest Service for both access and to be able to use the easement and the Forest Service kept saying no, at some point we're reaching

[00:40:51] Speaker 00:
the point at which they said, I think we have a problem.

[00:40:54] Speaker 00:
We have a title problem, at least, that we need to file an action and get clear on this.

[00:40:59] Speaker 03:
I mean, not to quibble with you, but in 2001, the Forest Service responded with, we don't have enough resources to process your client, your application.

[00:41:08] Speaker 03:
In 2003, they said we're sending it back because it's insufficient.

[00:41:12] Speaker 03:
In 2004, they said we need more information.

[00:41:15] Speaker 03:
And in 2006, they said we're sending it back because you didn't submit enough information.

[00:41:20] Speaker 00:
And each time,

[00:41:21] Speaker 00:
That that plaintiffs, that's not no plaintiffs can stir that to mean they couldn't access the property.

[00:41:28] Speaker 00:
And indeed, as they say in the reply brief, we have never access the property.

[00:41:32] Speaker 00:
They believe they needed the Forest Service's approval to access the property, which gave no part of the I think he still agree.

[00:41:40] Speaker 02:
I think he still agrees with that.

[00:41:42] Speaker 00:
It gave no indication to either party that they were asserting a right to the easement.

[00:41:49] Speaker 00:
And if that was at all a question in their minds as to what it was the Forest Service was doing in each of those pieces of correspondence, it was incumbent upon them to bring an action to clarify that.

[00:42:03] Speaker 00:
I see I've run way over time.

[00:42:05] Speaker 03:
Well, we gave him six minutes, so you're fine.

[00:42:08] Speaker 03:
Judge Matheson, do you have anything else you'd like to ask counsel?

[00:42:12] Speaker 05:
I'm just curious, why shouldn't the, let's say that the exchange agreement 1991 triggered the 12 year period, why shouldn't the efforts that were made between 2001 and 2007 support equitable tolling of the statute of limitations?

[00:42:46] Speaker 00:
Why would they support the equitable tolling of it?

[00:42:49] Speaker 05:
Is that your question?

[00:42:51] Speaker 05:
Is the statute subject to equitable tolling?

[00:42:55] Speaker 00:
I don't believe it is, Your Honor.

[00:42:57] Speaker 00:
And that's not been raised as an issue here.

[00:42:59] Speaker 05:
I understand.

[00:43:00] Speaker 05:
I'm just asking.

[00:43:02] Speaker 00:
I don't believe so.

[00:43:04] Speaker 00:
I do not believe that it can be told.

[00:43:08] Speaker 00:
I could be incorrect on that.

[00:43:10] Speaker 00:
But because it wasn't briefed, I'm going to retract that statement.

[00:43:14] Speaker 00:
I do not know, Your Honor.

[00:43:16] Speaker 05:
Okay, that's fine.

[00:43:18] Speaker 05:
I just carry it.

[00:43:21] Speaker 03:
Okay, thank you, counsel.

[00:43:23] Speaker 03:
And you're out of time.

[00:43:25] Speaker 03:
And unless Judge Matheson, do we want to give any rebuttal or are we all good?

[00:43:30] Speaker 03:
Okay, I think we're, I think we're good.

[00:43:34] Speaker 03:
This case will be submitted and counselor, excuse, thank you both for your excellent arguments.