In re 2007 Appropriations of Niobrara River Waters

this court. Accordingly, respondent is directed to pay costs
and expenses in accordance with Neb. Rev. Stat. §§ 7-114 and
7-115 (Reissue 2007) and Neb. Ct. R. §§ 3-310(P) and 3-323
of the disciplinary rules within 60 days after an order imposing
costs and expenses, if any, is entered by the court.
Judgment of disbarment.
in re 2007 administration of appropriations of the
Waters of the niobrara river .
Jack bond and Joe mcclaren ranch , appellants , v.
nebraska public poWer district and department
of natural resources , appellees.
820 N.W.2d 44
Filed April 13, 2012. 	No. S-11-006.
1. Administrative Law: Statutes: Appeal and Error. In an appeal from the
Department of Natural Resources, an appellate court’s review of the director’s
factual determinations is limited to deciding whether such determinations are
supported by competent and relevant evidence and are not arbitrary, capri-
cious, or unreasonable; however, on questions of law, the appellate court is
obligated to reach its conclusions independent of the legal conclusions made by
the director.
2. Actions: Appeal and Error. The law-of-the-case doctrine reflects the principle
that an issue litigated and decided in one stage of a case should not be relitigated
at a later stage.
3. ____: ____. The law-of-the-case doctrine is a rule of discretion, not jurisdiction.
4. Actions: Final Orders: Appeal and Error. The law-of-the-case doctrine requires
a final order. A party is not bound by a court’s findings in an order that it was not
required to appeal.
5. Administrative Law: Parties. When an administrative agency acts as the pri-
mary civil enforcement agency, it is more than a neutral fact finder and is a
required party.
6. Administrative Law: Waters. The Department of Natural Resources is the offi-
cial agency of the state in connection with water resources development and has
the authority to resolve disputes, investigate the validity of water rights, engage
in water administration, and issue and enforce orders.
7. Administrative Law: Due Process. In formal agency adjudications, as in
court proceedings, due process requires a neutral, or unbiased, adjudicatory
decisionmaker.
8. Administrative Law: Presumptions. Administrative adjudicators serve with a
presumption of honesty and integrity.
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	629
Cite as 283 Neb. 629
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:42 AM CST

9. Administrative Law: Waters: Proof. Neb. Rev. Stat. § 61-206(1) (Cum. Supp.
2006) states that the burden of proof in a hearing before the Department of
Natural Resources shall be on the person making the complaint, petition, or
application.
10. Legislature: Administrative Law: Waters: Jurisdiction. The Legislature has
given the Department of Natural Resources jurisdiction over all matters pertain-
ing to water rights for irrigation, power, or other useful purposes except as such
jurisdiction is specifically limited by statute.
11. Administrative Law: Waters: Jurisdiction. The Department of Natural
Resources has jurisdiction to hear and adjudicate all matters pertaining to water
rights for irrigation and other purposes, including jurisdiction to cancel and ter-
minate such rights.
12. Administrative Law. Administrative agencies have no general judicial powers,
notwithstanding that they may perform some quasi-judicial duties.
13. Administrative Law: Estoppel. Normally, equitable estoppel has not been
applied in administrative proceedings.
14. Administrative Law: Waters: Time. Two methods of loss of appropriation
rights exist independent of statutory procedure for cancellation by the Department
of Natural Resources. These two methods may be classified as abandonment of
water rights or nonuser of such rights for the period of statutory limitations relat-
ing to real estate.
15. Statutes: Legislature: Presumptions: Judicial Construction. When the
Legislature enacts a law affecting an area which is already the subject of other
statutes, it is presumed that it did so with full knowledge of the preexisting
legislation and the decisions of the Supreme Court construing and applying
that legislation.
16. Statutes: Intent. Statutes which effect a change in the common law or take
away a common-law right should be strictly construed, and a construction which
restricts or removes a common-law right should not be adopted unless the plain
words of the statute compel it.
17. Administrative Law: Waters: Evidence. In a proceeding before the Department
of Natural Resources pursuant to Neb. Rev. Stat. § 61-206(1) (Cum. Supp. 2006),
the department shall receive any evidence relevant to the matter and also has
the discretion to conduct additional investigation to settle the issues raised by
the parties.
Appeal from the Department of Natural Resources. Reversed
and remanded with directions.
Donald G. blankenau and Thomas R. Wilmoth, of blankenau
Wilmoth, L.L.P., for appellants.
Jon bruning, Attorney General, Justin D. Lavene, and
Marcus 	A. 	Powers 	for 	appellee 	Department 	of 	Natural
Resources.
630 	283 NebRASkA RePoRTS

Stephen D. Mossman and Patricia L. vannoy, of Mattson,
Ricketts, Davies, Stewart & Calkins, for appellee Nebraska
Public Power District.
heavican, c.J., connolly, gerrard, stephan, mccormack,
and miller-lerman, JJ.
mccormack , J.
I. NATURe oF CASe
Junior river water appropriators Jack bond and Joe McClaren
Ranch 	filed 	a 	request 	for 	hearing 	before 	the 	Nebraska
Department of Natural Resources (Department), challenging
the validity of the Department’s administration of water in
response to a call for administration placed by the Nebraska
Public Power District (NPPD). The Department joined the
matter as a party litigant against the junior appropriators.
Following a hearing, the director of the Department deter-
mined that the water administration was proper and denied
the junior appropriators’ challenge to the sufficiency of the
closing notices issued to upstream junior appropriators. The
junior appropriators appealed. The main question on appeal is
whether the issues of nonuse and abandonment alleged by the
junior appropriators were properly before the Department. For
the following reasons, we reverse the order and remand the
cause with directions.
II. bACkGRoUND
1. overvieW of surface Water rights
before setting forth the specific facts of this case, we begin
with an overview of controlling Nebraska law. Nebraska’s laws
governing surface water management, regulation, and alloca-
tion present a mosaic of private and public rights.1
An appropriation right is the right to divert unappropriated
streamwater for beneficial use.2 Under the prior-appropriation
system, 	each 	appropriator’s 	right 	to 	divert 	unappropriated
1 See In re 2007 Appropriations of Niobrara River Waters, 278 Neb. 137,
768 N.W.2d 420 (2009).
2 Neb. Rev. Stat. § 46-204 (Reissue 2010).
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	631
Cite as 283 Neb. 629

waters from a stream for a beneficial purpose receives a date of
priority. An appropriation’s priority date is the date when the
Department approves the appropriator’s right to divert water.
In a perfect world, there would be sufficient water to satisfy
all appropriations for a given stream.3 but when a stream has
insufficient water to satisfy all appropriation rights on it, the
appropriator first in time is first in right.4 That is, a senior
appropriator with an earlier priority date has the right to con-
tinue diverting water against a junior appropriator with a later
appropriation date when both appropriators are using the water
for the same purpose.5
When the appropriators use the water for different purposes,
however, a junior appropriator may nonetheless have a superior
preference right over senior appropriators. Under the Nebraska
Constitution and statutes, when there is insufficient water to
satisfy all appropriations, certain water uses take preference
over others, despite the appropriators’ priority dates.6 So, in
times of shortage, aggrieved water users with superior pref-
erence rights may exercise their constitutional preference to
obtain relief when the prior-appropriation system would other-
wise deny such users access to water.7
Those using the water for domestic purposes have prefer-
ence over those claiming it for any other purpose.8 And those
using water for agricultural purposes have preference over
those using it for manufacturing and power purposes.9 Thus,
the junior appropriators’ use of the diverted water for agricul-
tural purposes took preference over NPPD’s use of the water
for power generation.10
3 In re 2007 Appropriations of Niobrara River Waters, supra note 1.
4 Neb. Rev. Stat. § 46-203 (Reissue 2010).
5 § 46-204. See, also, State, ex rel. Cary, v. Cochran, 138 Neb. 163, 292
N.W. 239 (1940).
6 See, Neb. Const. art. Xv, § 6; § 46-204; Neb. Rev. Stat. § 70-668 (Reissue
2009).
7 Id.
8 Id.
9 Id.
10 See id.
632 	283 NebRASkA RePoRTS

Simply having a superior preference right does not give that
appropriator unfettered use of the water. An appropriator hav-
ing a superior preference right, but a junior appropriation right,
can use the water to the detriment of a senior appropriator
having an inferior preference right. but the junior appropriator
must pay just compensation to the senior appropriator.11 So,
although NPPD’s appropriation right was senior to that of the
junior appropriators, the junior appropriators could continue to
divert water if they compensated NPPD.12
Under Nebraska’s statutes, if an irrigation district or appro-
priator with a superior preference right cannot agree with a
power generator on the compensation for use of the water, then
the appropriator can commence a condemnation proceeding in
county court to determine the compensation.13 In a condemna-
tion proceeding, the county court appoints appraisers, who then
return an award.14 The compensation award cannot be greater
than the cost of replacing the power that the power plant would
have generated if it had retained use of the water.15 For the
Department, whether the parties agree on the compensation
or the junior appropriators obtain a condemnation award, the
result is the same. The Department cannot order the junior
appropriators to cease diverting water to satisfy the senior
appropriation for the period agreed to by the parties or con-
tained in the condemnation award.
Additionally, in Nebraska, water rights may be lost by non-
use,16 abandonment,17 or statutory forfeiture.18 The question
presented in this appeal is whether, under the governing statu-
tory scheme, a junior appropriator may allege abandonment
11 Neb. Rev. Stat. § 70-669 (Reissue 2009).
12 See id. See, also, Neb. Rev. Stat. § 76-711 (Reissue 2009).
13 Neb. Rev. Stat. § 70-672 (Reissue 2009). See, generally, Neb. Rev. Stat.
§§ 76-701 to 76-726 (Reissue 2009).
14 § 76-706.
15 § 70-669.
16 See State v. Nielsen, 163 Neb. 372, 79 N.W.2d 721 (1956).
17 Id.
18 Neb. Rev. Stat. § 46-229 (Reissue 2010).
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	633
Cite as 283 Neb. 629

and statutory forfeiture to challenge the validity of a senior
appropriator’s rights before the Department.
2. administrative proceeding
We now turn to the specific facts presented in this appeal.
The junior appropriators own real property in Cherry County,
Nebraska. In 2006, the Department granted them surface water
appropriation rights on the Niobrara River. The rights granted
each junior appropriator the ability to divert certain quantities
of water from the river for agricultural use.
NPPD owns and operates a hydropower facility on the
Niobrara River near Spencer, Nebraska, which is located
approximately 145 miles downstream from the junior appropri-
ators’ properties. NPPD’s predecessor acquired certain appro-
priations of water from the Niobrara River, which NPPD
currently holds. NPPD currently holds three appropriations,
A-359R, A-1725, and A-3574, which amount to a total of 2,035
cubic feet per second (cfs).
on March 2, 2007, NPPD placed a written call for admin-
istration. 	NPPD 	claimed 	that 	the 	Niobrara 	River 	lacked
sufficient water to satisfy all the appropriation rights and
requested that the Department administer the water on the
Niobrara River to satisfy NPPD’s senior appropriations for
the Spencer facility. When the Department determines water
administration is necessary, the Department sends closing
notices to individuals holding junior water rights upstream
from the senior appropriator, which directs the individuals
to cease diverting surface water so the water will reach the
senior appropriator.
When a call for administration is received, the Department
reviews its records to determine whether the calling appro-
priator is using water according to its permits. The Department
then measures the riverflow at or near the calling appropriator’s
point of diversion to determine whether the calling appro-
priator is receiving the full allocation of surface water under
the permits.
on March 12 and April 3, 5, and 23, 2007, the Department
measured the flow of the Niobrara River to determine whether
the Spencer facility was receiving flows sufficient to satisfy
634 	283 NebRASkA RePoRTS

its appropriations. The measurements taken on March 12 and
April 3 and 23 established that no administration was required,
as streamflows were high enough to satisfy NPPD’s appro-
priations. The April 5 measurements revealed that flows were
trending downward, but the Department determined that it was
not necessary to administer water, because the Spencer facility
was closed for maintenance and thus no beneficial use of water
would be made.
on April 30, 2007, the Department conducted a stream
measurement which indicated the total discharge of water to be
1,993.73 cfs, which was insufficient for the permits associated
with the Spencer facility which allows NPPD to divert 2,035
cfs. The Department concluded that there was insufficient water
for all appropriations. on May 1, the Department issued clos-
ing notices to individuals holding junior water rights upstream
of the Spencer facility. The junior appropriators and about 400
other junior water users received closing notices. The closing
notices directed them to cease water diversions for the benefit
of NPPD’s Spencer facility.
on May 11, 2007, the junior appropriators filed an admin-
istrative hearing request with the Department to determine
whether the closing notices were validly issued pursuant to Neb.
Rev. Stat. § 61-206(1) (Cum. Supp. 2006). The junior appro-
priators alleged that NPPD may have abandoned its appropria-
tion rights, in whole or in part, and that if it had, then no valid
appropriation right justified the closing notices. Alternatively,
the junior appropriators alleged that they were not subject
to the closing notices under the futile call doctrine—even if
NPPD had a valid appropriation right, any call for water would
be futile, because it would not result in additional water reach-
ing NPPD’s facility.
The Department appeared as a party in the proceeding to
advocate for the validity of the closing notices issued. The
junior appropriators objected to the Department’s appearing as
a party litigant. The Department then appointed an independent
attorney to act as hearing officer in the matter, who ruled that
the Department was a proper party.
The Department mailed opening notices in early May, allow-
ing the junior appropriators to continue diverting water from
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	635
Cite as 283 Neb. 629

the river. And NPPD requested that the Department withhold
water administration until August 1, 2007, “to allow time for
NPPD to get in place Subordination Agreements with junior
upstream irrigators, should they so desire.”
on July 31, 2007, while the proceeding was still pending,
the Department measured the flow of the Niobrara River near
butte, Nebraska, and determined the total discharge measure-
ment was 902.72 cfs. The Department issued new closing
notices to the junior appropriators on August 1.
on August 17, 2007, the junior appropriators filed a petition
for condemnation of NPPD’s water rights in the boyd County
Court. In their petition, the junior appropriators stated that they
still disputed the validity of NPPD’s appropriation right, but
that “[b]ecause resolution of this issue may take several irriga-
tion seasons,” they elected to exercise their preference rights.
The county court appointed appraisers who established a com-
pensation award for NPPD for 20 years. NPPD appealed the
appraisers’ valuation of the condemnation award to the district
court. That appeal has been stayed pending resolution of the
present appeal.
on october 1, 2007, the Department informed the junior
appropriators that the August 1 closing notices were lifted
until further notice, due to maintenance at the Spencer facility.
based on the condemnation award, the junior appropriations
have remained “open” and no further closing notices have
been issued.
Following 	the 	condemnation 	proceeding, 	NPPD 	filed 	a
motion to dismiss the administrative proceeding before the
Department, arguing the condemnation award had mooted the
appropriation controversy. The Department dismissed the pro-
ceeding for lack of jurisdiction, and the junior appropria-
tors appealed. In a previous appeal in this case, we reversed
the Department’s order and determined that the case was
not moot.19
We recognized that the junior appropriators’ condemna-
tion award provides them with a 20-year superior preference
over NPPD. However, because the junior appropriators must
19 In re 2007 Appropriations of Niobrara River Waters, supra note 1.
636 	283 NebRASkA RePoRTS

compensate NPPD for the water they divert from the river, a
determination that NPPD had abandoned or forfeited its appro-
priations would immediately benefit the junior appropriators.
Accordingly, the cause was remanded for further proceedings
before the Department.
on remand, the junior appropriators objected to the reap-
pointment of the independent attorney who conducted the
original hearing. The Department appointed a second inde-
pendent attorney to sit as hearing officer for the proceedings.
The junior appropriators then moved for leave to amend their
request for hearing. The junior appropriators sought to add a
claim based on estoppel, and asserted that they had obtained
information that established that NPPD had not called for
water in over 50 years and that the Department had never
issued a closing notice for NPPD’s benefit. The hearing
officer overruled the junior appropriators’ motion to amend.
Thereafter, NPPD filed a request to impose rules of evidence
and a motion in limine seeking to preclude the introduc-
tion of evidence that the Spencer facility allegedly wastes
water through leakage and disrepair. The hearing officer
granted both of NPPD’s motions, over the junior appropria-
tors’ objections.
The final hearing was held on the merits of the junior appro-
priators’ original request in the administrative proceeding on
July 27 and 28, 2010. The junior appropriators challenged the
form of the proceeding, challenged the Department’s admin-
istration of the call placed by NPPD which resulted in the
issuance of the closing notices, and sought a determination of
the validity of NPPD’s water appropriations on the bases that
NPPD had abandoned or statutorily forfeited all or a portion
of its appropriations and that NPPD’s appropriations do not
form a legally sufficient foundation for the closing notices.
The junior appropriators also argued that the Department’s
administration of NPPD’s call was faulty, because the junior
appropriators are not subject to the closing notices under the
doctrine of futile call.
The hearing officer reserved ruling on exhibits 17, 18,
26, and 46, which were offered by the junior appropriators.
exhibits 17, 18, and 26 are copies of the 2006, 2007, and
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	637
Cite as 283 Neb. 629

2008 “Annual evaluation of Availability of Hydrologically
Connected Water Supplies,” respectively. exhibit 46 is a photo-
graph of Spencer Dam. on August 10, 2010, the hearing officer
issued a written order overruling the objections to the exhibits
and received each into evidence. on December 20, the direc-
tor issued his final order and found for the Department and
NPPD. In the order, the director stated that the hearing officer
had reserved ruling on exhibits 17, 18, 26, and 46; determined
the exhibits were not relevant to the issues presented; and sus-
tained the objections to their admission. The final order did not
address the hearing officer’s previous order which had received
the exhibits into evidence.
The director determined that the junior appropriators had
initiated a challenge to the Department’s administration of their
water rights pursuant to § 61-206. The director determined that
the proceeding qualified as a “contested case” and assigned
the burden of proof to the junior appropriators because they
initiated the action by filing the request for hearing before the
Department. According to the director, NPPD did not bear the
burden of proof because the call for water administration was
an informal request for Department investigation which did not
initiate the proceeding. The director also determined that the
Department was a proper party to the proceeding, because the
junior appropriators’ allegations challenged the Department’s
method of carrying out its ministerial duty of water administra-
tion as provided by § 61-206.
The director noted that the junior appropriators did not
invoke the Department’s jurisdiction over NPPD pursuant to
Neb. Rev. Stat. §§ 46-229 to 46-229.05 (Reissue 2010). The
director thus determined that the junior appropriators did not
properly question NPPD’s water rights as provided under
§§ 46-229 to 46-229.05. A determination of whether NPPD’s
water rights should be canceled or modified was therefore
deemed irrelevant to the action brought under § 61-206.
However, the director also stated that the junior appropria-
tors failed to offer any evidence that NPPD or its predeces-
sors had evidenced any intent to abandon the water rights.
The director further noted that there was no limitation on
appropriation A-359R due to NPPD’s failure to obtain a lease
638 	283 NebRASkA RePoRTS

agreement with the State, because A-359R was issued prior to
the statute requiring appropriators to enter into a contract with
the State to lease the use of all water appropriated. The junior
appropriators did not offer evidence to establish prescription,
and the director stated that the doctrine of prescription has not
been recognized in Nebraska. The director stated that had the
junior appropriators sought a determination under §§ 46-229 to
46-229.05, their claims would have failed as a result of a lack
of proof.
The director ultimately found that the junior appropria-
tors failed to meet their burden of proof to challenge the
Department’s futile call analysis and denied their challenge to
the propriety of the closing notices issued against them. The
junior appropriators timely appealed.
III. ASSIGNMeNTS oF eRRoR
The junior appropriators assign that the director erred in
(1) aligning the Department as a party litigant; (2) assigning
the burden of proof to the junior appropriators; (3) granting
NPPD’s motion in limine precluding evidence that part of
the water called for was being wasted; (4) refusing to allow
the junior appropriators to amend their request for hearing
and refusing to hear evidence on the issue of whether the
Department and NPPD should be estopped from calling for
water administration; (5) “ejecting” certain exhibits from the
record after the hearing officer had received them into evi-
dence and the hearing had concluded; (6) ruling that the junior
appropriators’ claims directed at NPPD’s rights were precluded
because the junior appropriators did not independently initiate
a proceeding pursuant to §§ 46-229 to 46-229.05; (7) ruling
that NPPD had not lost a portion of its appropriations allowing
it to call for water administration; (8) concluding that NPPD
could call for the full amount of its appropriations without
regard to subordination agreements, stream gauge error, and
explicit limitations contained in A-359R; and (9) concluding
that the Department conducted a proper futile call analysis
to determine whether water used by the junior appropria-
tors would reach the NPPD’s Spencer facility in beneficially
usable amounts.
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	639
Cite as 283 Neb. 629

Iv. STANDARD oF RevIeW
[1] In an appeal from the Department, an appellate court’s
review of the director’s factual determinations is limited to
deciding whether such determinations are supported by compe-
tent and relevant evidence and are not arbitrary, capricious, or
unreasonable; however, on questions of law, the appellate court
is obligated to reach its conclusions independent of the legal
conclusions made by the director.20
v. ANALYSIS
We first address the junior appropriators’ procedural objec-
tions to the form of the proceedings below. The junior appro-
priators argue that the Department erred in aligning itself
as a party litigant in the proceedings below, rather than act-
ing as a neutral arbiter. The junior appropriators also claim
that the Department erred in assigning the burden of proof
to the junior appropriators below. The junior appropriators
claim that the hearing officer erred in failing to allow them
to amend their original petition. Finally, the junior appro-
priators assert that the Department inappropriately limited the
scope of the proceeding to exclude the issues of nonuse and
abandonment.
1. laW- of -the -case doctrine
NPPD asserts that the junior appropriators’ assignments of
error relating to the burden of proof and the Department’s align-
ment as a party are barred under the law-of-the-case doctrine.
NPPD argues that because there was an adverse decision prior
to the original appeal, the junior appropriators were required to
raise the issues at that time. because the issues were not raised,
NPPD contends both are barred and the determinations below
must stand.21
[2] The law-of-the-case doctrine reflects the principle that
an issue litigated and decided in one stage of a case should
20 See In re Applications T-851 & T-852, 268 Neb. 620, 686 N.W.2d 360
(2004).
21 See County of Sarpy v. City of Gretna, 276 Neb. 520, 755 N.W.2d 376
(2008).
640 	283 NebRASkA RePoRTS

not be relitigated at a later stage.22 Under the law-of-the-case
doctrine, an appellate court’s holdings on questions presented
to it in reviewing the trial court’s proceedings become the law
of the case; those holdings conclusively settle, for purposes of
that litigation, all matters ruled upon, either expressly or by
necessary implication.23
[3,4] However, the law-of-the-case doctrine is a rule of
discretion, not jurisdiction.24 And the doctrine requires a final
order. A party is not bound by a court’s findings in an order
that it was not required to appeal.25
As a general rule, administrative determinations are not final
when they are interlocutory, incomplete, provisional, or not yet
effective.26 And this court has recognized that in administrative
proceedings, review of preliminary or procedural orders is gen-
erally not available, primarily on the ground that such a review
would afford opportunity for constant delays in the course of
administrative proceedings for the purpose of reviewing mere
procedural requirements or interlocutory directions.27
During the proceedings that took place prior to the original
appeal in this case, the junior appropriators objected to the form
of the proceedings, asserting the arguments discussed above.
The original hearing officer issued an “order on objection to
Form of Proceedings” on July 25, 2007. In the order, the hear-
ing officer determined that the Department was a proper party
and that the junior appropriators bore the burden of proof.
Following those determinations, the director dismissed the
case for lack of jurisdiction. The junior appropriators timely
appealed and assigned that the director erred in determin-
ing that the Department lacked subject matter jurisdiction in
22 Smeal Fire Apparatus Co. v. Kreikemeier, 279 Neb. 661, 782 N.W.2d 848
(2010), disapproved on other grounds, Hossaini v. Vaelizadeh, ante p. 369,
808 N.W.2d 867 (2012).
23 Money v. Tyrrell Flowers, 275 Neb. 602, 748 N.W.2d 49 (2008).
24 Smeal Fire Apparatus Co. v. Kreikemeier, supra note 22.
25 Id.
26 Chase v. Board of Trustees of Nebraska State Colleges, 194 Neb. 688, 235
N.W.2d 223 (1975).
27 Houk v. Beckley, 161 Neb. 143, 72 N.W.2d 664 (1955).
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	641
Cite as 283 Neb. 629

dismissing the case. The junior appropriators did not argue that
the hearing officer erred in overruling its objections to the form
of the proceeding. NPPD now asserts that the junior appro-
priators are bound by the hearing officer’s procedural rulings.
We disagree.
The hearing officer’s “order on objection to Form of
Proceedings” was not a final order from which the junior
appropriators could appeal. The order was an interlocutory
order limited to the junior appropriators’ procedural objections.
And the hearing officer’s procedural rulings were not addressed
by the director in the final order which dismissed the case.
Nor were they relevant to the final order. Thus, the procedural
rulings were not the subject of a final, appealable order at the
time of the previous appeal. And our determination in the pre-
vious appeal did not conclusively settle these matters, either
expressly or by necessary implication. Accordingly, the law-of-
the-case doctrine does not apply to bar the issues. As the junior
appropriators are not bound by the procedural rulings, we now
address the merits of the procedural assignments of error.
2. department as proper party
The junior appropriators first argue that the director erred
in aligning the Department as a party litigant. In support of
their argument, the junior appropriators rely on the plain
language of § 61-206. Section 61-206(1) provides that when
a hearing is requested following a Department decision, the
Department “shall receive any evidence relevant to the matter
under investigation.” The junior appropriators argue that this
indicates that the Department’s role is limited to factfinding in
the instant case.
[5,6] An administrative agency is a neutral factfinding body
when it is neither an adversary nor an advocate of a party.28
However, when an administrative agency acts as the primary
civil enforcement agency, it is more than a neutral fact finder
and is a required party.29 The Department is the official agency
28 Metropolitan Util. Dist. v. Aquila, Inc., 271 Neb. 454, 712 N.W.2d 280
(2006).
29 Id. (citing Becker v. Nebraska Acct. & Disclosure Comm., 249 Neb. 28,
541 N.W.2d 36 (1995)).
642 	283 NebRASkA RePoRTS

of the state in connection with water resources development
and has the authority to resolve disputes, investigate the valid-
ity of water rights, engage in water administration, and issue
and enforce orders.30
In the final order, the director addressed the junior appro-
priators’ continuing objection to the Department’s acting as
a party:
[T]he Appropriators’ Request challenged the facts found
by the Department and the manner in which it car-
ried out its ministerial duties. [T]he action filed by the
Appropriators should have been labeled as a complaint
against the Department. The substance of the original
pleading is challenging the Department’s method of car-
rying out its ministerial duty. Therefore, the Department
is a proper party to this proceeding. NPPD may make a
request for administration, but the Department determines
when administration is to occur. NPPD would not have
the facts gathered by the Department prior to initiat-
ing water administration—only Department employees
have that knowledge. The [Administrative Procedure Act]
and the Department’s Rules of Practice and Procedure
describe 	procedures 	to 	follow 	in 	those 	situations 	in
which the Department may be both a party and a neutral
fact finder.
The junior appropriators’ request for hearing followed the
Department’s issuance of closing notices for the purpose of
administering water. The junior appropriators challenged the
validity of the closing notices and, necessarily, the validity of
the Department’s water administration. The Department is the
primary civil enforcement agency charged with the adminis-
tration and enforcement of water rights. Accordingly, it was
proper for the Department to advocate for the validity of its
administration. We agree with the director’s determination
that the Department is a proper party to these proceedings.
The junior appropriators’ arguments to the contrary are with-
out merit.
30 See § 61-206(2) and (3).
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In addition, the junior appropriators appear to argue that the
Department’s alignment as a party amounts to a violation of
due process. Procedural due process limits the ability of the
government to deprive people of interests which constitute
“‘liberty’” or “‘property’” interests within the meaning of
the Due Process Clause.31 A right of appropriation is not one
of ownership of surface water prior to capture.32 Although the
interest does not equate to ownership, we have nevertheless
recognized that an appropriation right is a property right which
is entitled to the same protection as any other property right.33
Thus, the adjudication proceedings below involved important
property interests of the appropriators.
[7,8] In formal agency adjudications, as in court proceed-
ings, due process requires a neutral, or unbiased, adjudica-
tory decisionmaker.34 Administrative adjudicators serve with
a presumption of honesty and integrity.35 but combining pros-
ecutorial and adjudicative functions presents a danger to the
due process requirement of impartiality.36 When advocacy
and decisionmaking roles are combined, “‘true objectivity, a
constitutionally necessary characteristic of an adjudicator,’”
is compromised.37
but the mere fact that investigative, prosecutorial, and adju-
dicative functions are combined within one agency does not
31 Murray v. Neth, 279 Neb. 947, 955, 783 N.W.2d 424, 432 (2010) (citing
Stenger v. Department of Motor Vehicles, 274 Neb. 819, 743 N.W.2d 758
(2008)).
32 Spear T Ranch v. Knaub, 269 Neb. 177, 691 N.W.2d 116 (2005).
33 Loup River P. P. D. v. North Loup River P. P. & I. D., 142 Neb. 141, 5
N.W.2d 240 (1942).
34 Murray v. Neth, supra note 31.
35 Id.
36 Id. (Miller-Lerman, J., concurring in part, and in part dissenting; Connolly,
J., joins) (citing Botsko v. Davenport Civil Rights Com’n, 774 N.W.2d 841
(Iowa 2009)).
37 Murray v. Neth, supra note 31, 279 Neb. at 963, 783 N.W.2d at 437
(Miller-Lerman, J., concurring in part, and in part dissenting; Connolly,
J., joins) (quoting Howitt v. Superior Court, 3 Cal. App. 4th 1575, 5 Cal.
Rptr. 2d 196 (1992)).
644 	283 NebRASkA RePoRTS

give rise to a due process violation.38 In addition, the fact that
an agency adjudicator has a supervisory role over agency actors
involved in the investigatory or prosecutorial functions of the
agency does not establish a procedural due process claim.39
Such combinations inhere in the very nature of the adminis-
trative process before an agency.40 In considering what due
process requires, we must bear in mind “‘the way particular
procedures actually work in practice.’”41
The separation of functions within an administrative agency,
allotting the prosecutorial function to a staff of attorneys or
other personnel who will not participate in the eventual deci-
sion, is a common and recommended feature of administra-
tive enforcement activity.42 It has been recognized that there
can never be a merger of prosecutorial and judicial functions
in an administrative agency exercising quasi-judicial func-
tions.43 Further, it has sometimes been concluded that some
mixture of judicial and prosecutorial functions is acceptable
in administrative proceedings where the person performing
the quasi-prosecutorial function is not also a member of the
decisionmaking board or tribunal.44
38 Botsko v. Davenport Civil Rights Com’n, supra note 36; Morongo Band
v. State Water Control Bd., 45 Cal. 4th 731, 199 P.3d 1142, 88 Cal. Rptr.
3d 610 (2009); Colonial Pipeline Co. v. Morgan, 263 S.W.3d 827 (Tenn.
2008); PERS v. Stamps, 898 So. 2d 664 (Miss. 2005).
39 R. A. Holman & Co. v. Securities and Exchange Commission, 366 F.2d 446
(2d Cir. 1966); Botsko v. Davenport Civil Rights Com’n, supra note 36.
40 Botsko v. Davenport Civil Rights Com’n, supra note 36; Alcoholic Beverage
Control v. Appeals Bd., 40 Cal. 4th 1, 145 P.3d 462, 50 Cal. Rptr. 3d 585
(2006); Martin-Erb v. MO Com’n on Human Rights, 77 S.W.3d 600 (Mo.
2002).
41 Murray v. Neth, supra note 31, 279 Neb. at 960, 783 N.W.2d at 435
(Miller-Lerman, J., concurring in part, and in part dissenting; Connolly, J.,
joins) (quoting Withrow v. Larkin, 421 U.S. 35, 95 S. Ct. 1456, 43 L. ed.
2d 712 (1975)).
42 La Petite Auberge v. R. I. Com’n for Human Rights, 419 A.2d 274 (R.I.
1980).
43 Phillips v. Bd. of Fire and Police Comm’rs, 24 Ill. App. 3d 242, 320
N.e.2d 355 (1974).
44 Ladenheim v. Union County Hospital Dist., 76 Ill. App. 3d 90, 394 N.e.2d
770, 31 Ill. Dec. 568 (1979).
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Here, the record does not indicate that the Department
improperly combined the roles of advocate and adjudicator.
The record shows that the proceedings were conducted by an
independent attorney not employed by the Department. The
director issued the final order in the case, and a Department
staff member, who is an attorney, represented the Department
at the hearing.
The record does not reflect, and the junior appropriators do
not argue, that the director or the Department attorney had any
communication regarding the outcome of these proceedings or
that the director requested the attorney to gather or present spe-
cific evidence. Accordingly, the record does not reflect that the
advocacy and adjudicatory roles were impermissibly combined
below to affect the fairness and impartiality of the director in
making the ultimate adjudication. The Department’s alignment
as a party thus did not violate the requirements of procedural
due process.
3. burden of proof
The junior appropriators assert that NPPD should have
the burden of proving the validity of its appropriations pur-
suant to § 61-206(1), because it initiated this action with
its call for water administration. because the junior appro-
priators raised issues outside the call for administration, we
determine the junior appropriators bear the burden of proving
their allegations.
[9] The Department is authorized to hold hearings on
complaints, petitions, or applications, and if a final deci-
sion is made without a hearing, “a hearing shall be held
at the request of any party to the proceeding.”45 Section
61-206(1) states that the burden of proof in a hearing before
the Department shall be on the person making the complaint,
petition, or application.46
The director determined:
The proceeding before the Department was initiated by
the Appropriators filing the May 11, 2007, Request[.]
45 § 61-206(1).
46 See, also, In re Applications T-851 & T-852, supra note 20.
646 	283 NebRASkA RePoRTS

The contents of the Appropriators’ Request, when read
in full, is a complaint about the Department’s factual
determinations which led to water administration affect-
ing the Appropriators. The bases of the Request con-
cern facts that were investigated by the Department to
determine whether water administration should occur.
Those include, but are not limited to, whether the call-
ing water rights exist and whether the doctrine of futile
call when applied to NPPD’s call would negate clos-
ing of Appropriators’ rights. Thus, the Appropriators
brought the action, the action is a complaint regarding
the Department’s administration of water rights on the
Niobrara River, and the Appropriators bear the burden
of proof.
Regarding the junior appropriators’ argument that NPPD initi-
ated the proceeding with its call for water administration, the
director found:
NPPD’s letter . . . requesting the Department honor its
“call” for water administration was not a complaint, peti-
tion, or application as defined in the statutes and rules
governing the Department. Under the provisions of the
Department’s Rules of Practice and Procedure, 454 Neb.
Admin. Code Chapter 7, a contested case proceeding
would not have started with a letter asking for water
administration. Under Chapter 7, § 003.02, informal pro-
ceedings are allowed. NPPD’s letter . . . was an informal
request that the Department conduct ongoing investiga-
tions relative to Spencer Hydropower Plant for purposes
of determining when water administration should occur
based upon the plant’s surface water appropriations.
The term “application” has consistently been limited to
circumstances where a party applies for a new right or seeks
to modify existing rights. For example, in Central Platte
NRD v. State of Wyoming,47 this court determined that the
applicant bore the burden of proof under the predecessor to
47 Central Platte NRD v. State of Wyoming, 245 Neb. 439, 513 N.W.2d 847
(1994). See, also, Ponderosa Ridge LLC v. Banner County, 250 Neb. 944,
554 N.W.2d 151 (1996).
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	647
Cite as 283 Neb. 629

§ 61-206, where the party was applying for a new instream
flow appropriation. We have also determined that NPPD bore
the burden of proof when filing an application with the
Department to transfer two existing water rights to new loca-
tions.48 Surface water administration does not require a party’s
application, as administration is a ministerial duty of the
Department.49 That being the case, we agree that NPPD did
not initiate the proceeding below.
Furthermore, as will be discussed fully below, because the
junior appropriators sufficiently raised additional issues regard-
ing the validity of NPPD’s appropriations, the “request for
hearing” was more akin to a petition in the general sense.
Accordingly, we agree that the junior appropriators initiated
the proceeding and thus bore the burden of proof on the issues
raised in the request for hearing.
4. request to amend pleading
The junior appropriators assert that the director erred in
refusing to allow them to amend their request for hearing and
refusing to hear evidence or argument that the Department and
NPPD should be estopped from calling for water administra-
tion. We determine that the director correctly determined the
Department is without general equitable jurisdiction, and the
denial of the junior appropriators’ request to amend therefore
does not amount to an abuse of discretion.
The administrative regulations which govern the Department
state that “[a] petition may be amended at any time before an
answer is filed or is due if notice is given to the Respondent or
his or her attorney. In all other cases, a Petitioner must request
permission to amend from the Hearing officer.”50 The hearing
officer’s grant of such a request is discretionary:
A Hearing officer may also allow, in his or her dis-
cretion, the filing of supplemental pleadings alleging
facts material to the case occurring after the original
pleadings were filed. A Hearing officer may also permit
48 See In re Applications T-851 & T-852, supra note 20.
49 See State, ex rel. Cary, v. Cochran, supra note 5.
50 454 Neb. Admin. Code, ch. 7, § 007.04A (2005).
648 	283 NebRASkA RePoRTS

amendment of pleadings where a mistake appears or
where amendment does not materially change a claim
or defense.51
on remand, the junior appropriators filed a “Motion for
Leave to File First Amended Request for Hearing Concerning
May 1, 2007 Closing Notices and Stay of Issuance of Future
Closing Notices.” With this motion, the junior appropriators
sought to amend their original pleading to allege that “both [the
Department] and NPPD should be equitably [e]stopped from
issuing or requesting any further Closing Notices.” The junior
appropriators argued that the Department should be equitably
estopped from issuing closing notices in favor of NPPD and
that NPPD should be estopped from requesting any further
closing notices.
NPPD objected to the junior appropriators’ request to amend,
which the hearing officer sustained. The hearing officer rea-
soned that an amendment would be futile, because the junior
appropriators failed to allege sufficient facts to support a theory
of equitable estoppel, the Department lacks the authority to
grant equitable relief, and the Department cannot be estopped
from performing its statutorily defined duties.
[10,11] The Legislature has given the Department jurisdic-
tion “over all matters pertaining to water rights for irrigation,
power, or other useful purposes except as such jurisdiction is
specifically limited by statute.”52 In cases involving disputes
arising under this statutory scheme, we have noted that the
Department has jurisdiction to hear and adjudicate all matters
pertaining to water rights for irrigation and other purposes,
including jurisdiction to cancel and terminate such rights.53
However, we do not read § 61-206(1) as authorizing the
Department to exercise general equitable jurisdiction.
51 Id., § 007.04b.
52 § 61-206(1). See In re 2007 Appropriations of Niobrara River Waters,
supra note 1.
53 Koch v. Aupperle, 274 Neb. 52, 737 N.W.2d 869 (2007); State ex rel.
Blome v. Bridgeport Irr. Dist., 205 Neb. 97, 286 N.W.2d 426 (1979);
Hickman v. Loup River Public Power Dist., 173 Neb. 428, 113 N.W.2d 617
(1962).
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	649
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[12,13] The Department has no independent authority to
regulate ground water users or administer ground water rights
for the benefit of surface water appropriators.54 As a general
rule, administrative agencies have no general judicial powers,
notwithstanding that they may perform some quasi-judicial
duties.55 only a judicial tribunal, and not an administrative
agency acting as a quasi-judicial tribunal, can provide relief
that is “‘within the general power of the court’” to provide.56
equity jurisdiction exists independently of statute and comes
from the Constitution, a higher source than a legislative enact-
ment.57 And, normally, equitable estoppel has not been applied
in administrative proceedings.58
because we agree the Department lacks the authority to
grant equitable relief, we determine that the junior appro-
priators’ proposed amendment would have been futile and that
therefore, the hearing officer did not err in denying the request.
In addition to its futility, the amendment would have materi-
ally changed the claims raised in the original pleading. The
junior appropriators’ original pleading did not assert a theory
of equitable estoppel, and the amendment was requested almost
3 years after the original pleading was filed. It was within the
hearing officer’s discretion to deny the junior appropriators’
request to amend. The junior appropriators’ arguments to the
contrary are without merit.
5. scope of proceedings
The junior appropriators assert that the director erred in lim-
iting the scope of the proceeding to exclude their claims that
NPPD had abandoned or statutorily forfeited its appropriations.
The director determined that the junior appropriators failed to
54 In re Complaint of Central Neb. Pub. Power, 270 Neb. 108, 699 N.W.2d
372 (2005).
55 Stoneman v. United Neb. Bank, 254 Neb. 477, 577 N.W.2d 271 (1998) (cit-
ing Ventura v. State, 246 Neb. 116, 517 N.W.2d 368 (1994)).
56 Id. at 492, 577 N.W.2d at 281 (quoting Ventura v. State, supra note 55).
57 Hall v. Hall, 123 Neb. 280, 242 N.W. 607 (1932).
58 See Furstenberg v. Omaha & C. B. Street R. Co., 132 Neb. 562, 272 N.W.
756 (1937).
650 	283 NebRASkA RePoRTS

properly initiate a cancellation proceeding to determine the
validity of NPPD’s appropriations pursuant to §§ 46-229 to
46-229.05 and that therefore, the proceedings were limited by
the provisions of § 61-206(1). The director noted:
[T]he modification of the adjudication statute § 46-229
in 1993 made the cancellation of an appropriation the
sole authority of the Director of the Department and sets
out the process that must be followed to cancel a water
appropriation. Consequently, unlike in the past, no auto-
matic loss of water rights occurs under the current statu-
tory framework.
The director further stated:
Had Appropriators requested an adjudication of NPPD’s
water rights by referencing §§ 46-229 through 46-229.05,
then the Department would have followed the provisions
the Legislature has prescribed. . . . However, that was not
the process the Appropriators chose to pursue. Instead,
they challenged the Department’s administration of the
call requested by NPPD.
We find no authority to support the director’s determination
that the junior appropriators’ request for hearing pursuant to
§ 61-206(1) prevented the Department from determining the
validity of NPPD’s appropriations in regard to the allega-
tions of abandonment and forfeiture. Furthermore, the statu-
tory process for cancellation is not the sole method by which
appropriations may be challenged. Thus, the director erred in
refusing to address the issues raised by the junior appropriators
in this regard.
(a) Methods of Cancellation
NPPD asserts that “Nebraska statutes clearly state that appro-
priations may be canceled only under the statutory procedure
laid out in Neb. Rev. Stat. §§ 46-229.02 to 46-229.05, and
recent case law uses the statutory procedure exclusively.”59 This
is an incorrect statement of law. While the statutes do provide
the Department with a cancellation procedure, the statutes do
not abrogate the common-law methods of cancellation.
59 brief for appellee NPPD at 41.
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	651
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[14] The current language of § 46-229 was amended in
1993. Prior to that amendment, in State v. Nielsen,60 this
court recognized two methods of loss of appropriation rights
independent of statutory procedure for cancellation by the
Department. “These two methods may be classified as aban-
donment of water rights, or nonuser of such rights for the
period of statutory limitations relating to real estate.”61 Nielsen
defined abandonment as “‘“the relinquishment of a right by
the owner thereof, without any regard to future possession by
himself or any other person, but with the intention to forsake
or desert the right.”’”62
At the time Nielsen was decided, § 46-229 provided that in
the event that an appropriation ceased to be used for a ben-
eficial or useful purpose, that right ceased. Section 46-229.02
provided the cancellation procedure for the Department in the
event of such statutory forfeiture. However, we stated that the
procedure referred to in §§ 46-229 to 46-229.05 is not exclu-
sive.63 In addition, we noted that the common-law methods of
canceling appropriation rights were independent of the statu-
tory procedure for cancellation.64
In 1993, the Legislature amended § 46-229 to state:
All appropriations for water must be for some benefi-
cial or useful purpose and, except as provided in sections
46-290 to 46-294, when the appropriator or his or her
successor in interest ceases to use it for such purpose
for more than three consecutive years, the right may
be terminated only by the Director of [the Department]
following a hearing pursuant to sections 46-229.02 to
46-229.05.65
NPPD and the Department claim this amendment, because it
states “only by the Director of [the Department] following a
60 State v. Nielsen, supra note 16. See, also, In re Applications T-61 and T-62,
232 Neb. 316, 440 N.W.2d 466 (1989).
61 State v. Nielsen, supra note 16, 163 Neb. at 381, 79 N.W.2d at 728.
62 Id. (citing State v. Oliver Bros., 119 Neb. 302, 228 N.W. 864 (1930)).
63 State v. Nielsen, supra note 16.
64 Id.
65 1993 Neb. Laws, L.b. 302, § 2 (codified at § 46-229 (Reissue 1993)).
652 	283 NebRASkA RePoRTS

hearing pursuant to sections 46-229.02 to 46-229.05,” has abro-
gated the common-law methods providing the cancellation of
appropriation rights. We disagree.
[15] When the Legislature enacts a law affecting an area
which is already the subject of other statutes, it is presumed
that it did so with full knowledge of the preexisting legislation
and the decisions of the Supreme Court construing and apply-
ing that legislation.66 As this court previously determined in
Nielsen, because § 46-229 did not provide the exclusive method
by which an appropriation could be lost, the Legislature is pre-
sumed to have had that knowledge when it enacted L.b. 302.
We will not read the statute to effect a change in that interpre-
tation absent specific language which compels it.
[16] Furthermore, statutes which effect a change in the com-
mon law or take away a common-law right should be strictly
construed, and a construction which restricts or removes a
common-law right should not be adopted unless the plain
words of the statute compel it.67 The plain and unambiguous
language of §§ 46-229 to 46-229.05 merely provides the pro-
cedure by which the Department must abide when terminating
an owner’s or a successor’s appropriation right. This language
does not explicitly address the common-law theories of aban-
donment and nonuse. Absent express statutory provision, we
must construe § 46-229 in a manner which does not restrict or
remove the common-law method of cancellation. As such, we
determine that § 46-229 is a procedural provision that does not
abrogate the common law. NPPD and the Department’s asser-
tions to the contrary are without merit.
(b) Adjudicating Cancellation
The junior appropriators argue that § 61-206(1) does not
limit the issues presented in their request for hearing to the
66 Dalition v. Langemeier, 246 Neb. 993, 524 N.W.2d 336 (1994).
67 Stoneman v. United Neb. Bank, supra note 55; Popple v. Rose, 254 Neb.
1, 573 N.W.2d 765 (1998), abrogated on other grounds, A.W. v. Lancaster
Cty. Sch. Dist. 0001, 280 Neb. 205, 784 N.W.2d 907 (2010); Guzman v.
Barth, 250 Neb. 763, 552 N.W.2d 299 (1996). See, also, Tadros v. City of
Omaha, 273 Neb. 935, 735 N.W.2d 377 (2007); Spear T Ranch v. Knaub,
supra note 32.
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	653
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validity of the Department’s water administration and related
closing notices. They assert that §§ 46-229 to 46-229.05
were referenced throughout the proceeding and that the sub-
stance of the request effectively raised these issues before the
Department and provided the requisite notice to the parties.
The junior appropriators state that § 61-206(1) was utilized
simply because the Department had already rendered a deci-
sion by issuing closing notices to the junior proprietors and
that this procedure does not limit what issues the hearing
may address.
Section 46-229.02 imposes procedural obligations by which
the Department must abide prior to canceling appropriations
sua sponte:
(1) If, based upon the results of a field investigation
or upon information, however obtained, the department
makes preliminary determinations (a) that an appropria-
tion has not been used, in whole or in part, for a benefi-
cial or useful purpose or having been so used at one time
has ceased to be used, in whole or in part, for such pur-
pose for more than five consecutive years and (b) that the
department knows of no reason that constitutes sufficient
cause, as provided in section 46-229.04, for such nonuse
or that such nonuse has continued beyond the additional
time permitted because of the existence of any applicable
sufficient cause, the department shall serve notice of such
preliminary determinations upon the owner or owners of
such appropriation and upon any other person who is an
owner of the land under such appropriation.
When the Department makes a preliminary determination of
nonuse for more than 5 years, the Department is then required
to give notice to the appropriator, provide the appropriator
reasons for the Department’s preliminary determination, and
allow the appropriator the opportunity to contest that determi-
nation.68 based on the appropriator’s response, the Department
may issue an order canceling the appropriation in whole or in
part,69 inform the appropriator that it has provided sufficient
68 § 46-229.02(1).
69 § 46-229.02(2).
654 	283 NebRASkA RePoRTS

information for the Department to conclude that the appropria-
tion should not be canceled,70 or issue an order canceling the
appropriation in part, based on and to the extent of the owner’s
agreement.71 If none of these foregoing circumstances apply,
the Department must hold a hearing on the cancellation of
the appropriation.72
but the junior appropriators’ challenge is not predicated on
a preliminary determination by the Department. The above
procedural provisions thus are not binding on the junior
appropriators here. The junior appropriators filed their request
for hearing pursuant to § 61-206(1), which states in rel-
evant part:
The Department . . . is given jurisdiction over all mat-
ters pertaining to water rights for irrigation, power,
or other useful purposes except as such jurisdiction is
specifically limited by statute. . . . It may have hearings
on complaints, petitions, or applications in connection
with any of such matters. . . . Upon any hearing, the
[D]epartment shall receive any evidence relevant to the
matter under investigation and the burden of proof shall
be upon the person making the complaint, petition, and
application.
The director correctly stated that §§ 46-229 to 46-229.05
provide the procedure the Department must follow to cancel
appropriations. but the statutes do not preclude a party from
challenging the validity of an appropriator’s rights before the
Department, and there is no provision dictating how such chal-
lenge may be initiated.
Section 46-229.02 provides that the Department can raise
the issue of whether a party’s water rights should be canceled
or modified sua sponte, “upon information, however obtained.”
(emphasis supplied.) Thus, another landowner should be able
to raise such an issue in hearings before the Department
brought under § 61-206(1). When information regarding for-
feiture has been obtained by the Department, the statutory
70 § 46-229.02(3).
71 § 46-229.02(4).
72 § 46-229.02(5).
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	655
Cite as 283 Neb. 629

scheme directs the Department to make a preliminary determi-
nation as to whether such appropriations should be canceled
pursuant to statute. In addition, when a party alleges abandon-
ment, the Department should conduct proceedings to determine
those issues.
[17] Moreover, § 61-206(1) plainly provides a method by
which 	a 	landowner 	may 	request 	adjudicatory 	proceedings
before the Department. The language of § 61-206(1) contains
no limitation on the issues which may be raised at such pro-
ceedings. It states, “Upon any hearing, the [D]epartment shall
receive any evidence relevant to the matter under investigation
. . . .” Neb. Rev. Stat. § 61-201(1) (Reissue 2009) also allows
the Department to conduct additional investigation on mat-
ters raised before rendering a final decision. Accordingly, in a
proceeding before the Department pursuant to § 61-206(1), the
Department shall receive any evidence relevant to the matter
and also has the discretion to conduct additional investigation
to settle the issues raised by the parties. In the final order, the
director effectively concluded that forfeiture is irrelevant to
priority. but common sense dictates that a right that has been
abandoned cannot take priority over one that has not.
We see no reason why the Department should require appro-
priators to jump through additional hoops when seeking a
determination of the status of this significant property interest.
When relevant to a hearing before the Department, the issue of
abandonment or forfeiture should be heard and decided. The
manner in which the proceeding was initiated does not limit the
Department’s authority to do so.
In In re Applications T-61 and T-62,73 we similarly held that
it was improper for the Department to limit the scope of the
issues determined based on the procedure used to initiate the
proceeding. The appellant there contended that consideration
of nonuse in a hearing on an application for transfer is not a
proper procedure.74 We disagreed:
When an application is made to transfer water rights
which no longer exist because of nonuse, the director may
73 In re Applications T-61 and T-62, supra note 60.
74 Id.
656 	283 NebRASkA RePoRTS

cancel the rights in the transfer proceeding if the evidence
shows that the rights have expired through nonuse. It
should be obvious that a right which does not exist should
not be transferred.75
We find no authority limiting the relevant issues raised in a
hearing brought pursuant to § 61-206(1), as long as such issues
fall under the Department’s authority as provided by statute.
(c) Pleading Abandonment and
Statutory Forfeiture
There is no indication that §§ 46-229 to 46-229.05 have
been applied or should be interpreted to impose special plead-
ing requirements on a party. Sections 46-229 to 46-229.05 do
not prohibit a junior appropriator from challenging the validity
of a senior appropriation. The junior appropriators properly
raised a challenge to NPPD’s appropriations based on the
common-law theory of abandonment. In addition, the junior
appropriators properly raised a statutory challenge pursuant to
§ 46-229. Thus, we determine the director’s decision to limit
the scope of the proceeding to exclude the cancellation issue
and any relevant evidence was contrary to law.
As Nebraska is a notice-pleading jurisdiction, the junior
appropriators were not required to plead legal theories or cite
appropriate statutes, so long as the pleading gave fair notice
of the claims asserted.76 The junior appropriators’ request for
hearing specifically alleged that NPPD had “abandoned or
statutorily forfeited all or a portion” of its appropriations. Thus,
because the Department and NPPD had notice of the issues of
abandonment and forfeiture, the issues were sufficiently raised.
Accordingly, it was error for the Department to refuse to deter-
mine the validity of NPPD’s appropriations based on these
allegations and any relevant evidence.
The final order notes that “[e]ven if the Appropriators
brought this matter to the attention of the Department by
challenging NPPD’s appropriations instead of challenging the
Department’s administration, their claims would fail as a
75 Id. at 324, 440 N.W.2d at 471.
76 Mahmood v. Mahmud, 279 Neb. 390, 778 N.W.2d 426 (2010).
IN Re 2007 APPRoPRIATIoNS oF NIobRARA RIveR WATeRS 	657
Cite as 283 Neb. 629

result of a lack of proof.” It is unclear whether the director
intended this statement to operate as a hypothetical determina-
tion of the issue or as a binding determination of the issue on
the merits.
The Department is directed to fully address the issue on
remand. because the Department improperly limited this issue
and excluded potentially relevant evidence, we are unable
to address the merits of the junior appropriators’ arguments
that NPPD’s appropriations should be terminated in whole or
in part.
It should be noted that in a proceeding canceling water
appropriations for statutory nonuse, the Department bears the
burden to establish nonuse for the statutory period.77 However,
the proceeding below was not a proceeding canceling appro-
priations. The junior appropriators invoked the Department’s
authority to challenge the validity of NPPD’s appropriations on
the theories of abandonment and statutory forfeiture. The junior
appropriators therefore bear the burden of proof to establish the
allegations contained in their petition.
our conclusion is dispositive of this appeal, and we decline
to consider the remaining assignments of error.
vI. CoNCLUSIoN
We conclude the Department erred in refusing to determine
the junior appropriators’ challenge to the validity of NPPD’s
appropriations. on remand, the Department is directed to deter-
mine whether NPPD’s appropriations have been abandoned or
statutorily forfeited in whole or in part.
reversed and remanded With directions.
gerrard, J., not participating in the decision.
Wright, J., not participating.
77 In re Water Appropriation A-4924, 267 Neb. 430, 674 N.W.2d 788 (2004);
In re Water Appropriation A-5000, 267 Neb. 387, 674 N.W.2d 266
(2004).
658 	283 NebRASkA RePoRTS