Middle Niobrara NRD v. Department of Nat. Resources

to show how the charges have played out at trial works
against the party alleging inadequate assistance. Counsel,
too, faced that uncertainty. There is a most substantial
burden on the claimant to show ineffective assistance.
The plea process brings to the criminal justice system a
stability and a certainty that must not be undermined by
the prospect of collateral challenges in cases not only
where witnesses and evidence have disappeared, but also
in cases where witnesses and evidence were not presented
in the first place.
In addition to making sufficient allegations to warrant an
evidentiary 	hearing, 	defendants 	such 	as Yos‑Chiguil 	must
also bear “the substantial burden” to show that counsel was
ineffective.
M iddle Niobrara Natural resources district et al .,
appellaNts , aNd M ichael JacobsoN, appellee aNd
cross -appellaNt, v. departMeNt of Natural
resources , appellee aNd cross -appellee .
799 N.W.2d 305
Filed June 3, 2011. 	No. S‑09‑1311.
1. Administrative Law: Appeal and Error. In an appeal from a Department of
Natural Resources order, an appellate court reviews whether the director’s factual
determinations are supported by competent and relevant evidence and are not
arbitrary, capricious, or unreasonable. The department’s decision must also con‑
form to the governing law.
2. Administrative Law. Agency action is arbitrary and capricious if it is taken in
disregard of the facts or circumstances of the case, without some basis which
would lead a reasonable and honest person to the same conclusion.
3. ____. Agency action taken in disregard of the agency’s own substantive rules is
arbitrary and capricious.
4. Administrative Law: Appeal and Error. An appellate court independently
reviews questions of law decided by the director of the Department of Natural
Resources.
5. Jurisdiction: Judgments. A jurisdictional issue that does not involve a factual
dispute presents a question of law.
6. Statutes. The meaning and interpretation of a statute present a question of law.
7. Judgments. Whether a decision conforms to law is by definition a question
of law.
634 	281 NebRASkA RepoRTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:45 AM CST

8. Standing: Jurisdiction. Standing is fundamental to a court’s exercising jurisdic‑
tion, so a litigant or court can raise the question of standing at any time during
the proceeding.
9. Administrative Law: Waters: Standing: Proof. Generally, to be an “interested
person” under Neb. Rev. Stat. § 46‑713(2) (Cum. Supp. 2008), a litigant challeng‑
ing a fully appropriated determination by the Department of Natural Resources
must be asserting its own rights and interests, not those of a third party, and must
demonstrate an injury in fact sufficient to confer common‑law standing.
10. Political 	Subdivisions: 	Public 	Officers 	and 	Employees: 	Standing:
Constitutional Law: Statutes. Unless an exception applies, state officials and
political subdivisions generally do not have standing to challenge the constitu‑
tionality of statutes directing their duties.
11. Political Subdivisions: Standing. political subdivisions have standing to chal‑
lenge state action that adversely affects them or requires them to expend pub‑
lic funds.
12. Administrative Law: Waters. because the director of the Department of Natural
Resources cannot resolve a challenge to a call before the department issues its
annual evaluations, the department cannot premise its annual evaluations upon a
senior appropriator’s call.
13. Administrative Law. Agency regulations properly adopted and filed with the
Secretary of State of Nebraska have the effect of statutory law.
Appeal from the Department of Natural Resources. Reversed
and vacated.
Donald G. blankenau and Thomas R. Wilmoth, of blankenau
Wilmoth, L.L.p., for appellants.
Jon bruning, Attorney General, Marcus A. powers, and Justin
D. Lavene, for appellee Department of Natural Resources.
Michael Jacobson, pro se.
heavicaN, 	c.J., 	Wright, 	coNNolly, 	gerrard, 	stephaN,
MccorMack, and M iller-lerMaN, JJ.
coNNolly, J.
I. SUMMARY
Under 	the 	Nebraska 	Ground 	Water 	Management 	and
protection Act (the Act),1 the Department of Natural Resources
(Department) designated the portion of the Lower Niobrara
1 See Neb. Rev. Stat. §§ 46‑701 to 46‑754 (Reissue 2004 & Cum. Supp.
2008).
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	635
Cite as 281 Neb. 634

River basin upstream of the Spencer hydropower facility
fully appropriated. The appellants are four natural resources
districts (NRDs) that regulate ground water in the fully appro‑
priated boundary. They appeal the Department director’s 2009
order finding that in 2008, the basin was fully appropriated.
Michael Jacobson cross‑appeals. He owns and farms land in
the basin.
A “fully appropriated” designation requires the NRDs to
undertake significant and costly land management practices
to sustain a balance between water uses and water sup‑
plies.2 The overarching issue is whether the Department’s 2008
order designating the basin fully appropriated was an arbitrary
and capricious action. We conclude that it was and reverse
and vacate.
II. bACkGRoUND
1. Nebraska public poWer district’s
appropriatioN rights
Nebraska public power District (NppD) holds three surface
water appropriations in the Niobrara totaling 2,035 cubic feet
per second. The State approved these appropriation rights in
1896, 1923, and 1942. NppD uses its appropriations for pro‑
ducing electricity at the Spencer hydropower facility.
The Department’s 2008 fully appropriated designation was
triggered by a “call” for diversion rights by NppD. A call
by a senior appropriator, meaning an appropriator with an
earlier‑in‑time right to use the water,3 is a request that the
Department close the rights to divert water belonging to junior
appropriators upstream of the senior appropriator. Closures
require junior appropriators to stop diverting water from a river
or stream for the benefit of a senior appropriator.4 This action
increases the streamflow to satisfy the senior appropriator’s
right to divert water.
2 See § 46‑715(2).
3 See Neb. Rev. Stat. § 46‑203 (Reissue 2010).
4 See In re 2007 Appropriations of Niobrara River Waters, 278 Neb. 137,
768 N.W.2d 420 (2009).
636 	281 NebRASkA RepoRTS

2. the basiN
The Lower Niobrara River basin follows the Niobrara from
Mirage Flats Diversion Dam in northwest Nebraska to the
confluence of the Niobrara and Missouri Rivers in northeast
Nebraska. It encompasses about 8,900 square miles. Spencer
Dam is near Spencer in northeast Nebraska, close to the east‑
ern edge of the river basin. The Department’s fully appropri‑
ated designation for the portion of the river basin upstream of
Spencer Dam includes most of the river basin.
3. the act’s requireMeNts aNd the
departMeNt’s regulatioNs
beginning in 2006, unless the Department has already deter‑
mined that a river basin is fully appropriated or overappropri‑
ated, the Act requires the Department to complete, by January
1 of each year, an evaluation of the State’s river basins. The
Department must evaluate “the expected long‑term availability
of hydrologically connected water supplies for both exist‑
ing and new surface water uses and existing and new ground
water uses in each of the state’s river basins.”5 Simplified, the
Department can designate a river basin or one of its subparts
as fully appropriated if its evaluation shows that current uses
of hydrologically connected water will cause a river or stream
to be insufficient to satisfy, over the long term, three speci‑
fied purposes.6
Section 46‑713(3) is stated in the alternative. It permits the
Department to determine that a river basin or subpart is fully
appropriated if any of three specified circumstances exist. one
circumstance is present when the surface water is insufficient
to sustain existing natural flow, storage, or instream appropria‑
tions.7 The Department’s reports show that it assumes that a
basin’s ground water and surface water are interconnected: i.e.,
insufficient streamflow to sustain surface water appropriations
means that there is insufficient streamflow to sustain ground
water wells built in aquifers dependent upon recharge from the
5 § 46‑713(1)(a).
6 See § 46‑713(3).
7 See id.
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	637
Cite as 281 Neb. 634

river. So in determining whether a river basin is fully appropri‑
ated, the Department focuses only on whether a river’s surface
water is sufficient to sustain existing appropriations.
The Act requires the Department, in preparing its annual
report, to “rely on the best scientific data, information, and
methodologies readily available to ensure that the conclusions
and results contained in the report are reliable.”8 Also, the
Act requires the Department to “provide [in the report] suf‑
ficient documentation to allow these data, information, meth‑
odologies, and conclusions to be independently replicated
and assessed.”9
but the Act does not set a standard for determining whether
the surface water or streamflow of a river or stream is insuf‑
ficient. The Department’s regulations set the standard. The
regulations and reports show that in setting the standard, the
Department focuses solely on whether the surface water is
insufficient to sustain existing surface water appropriations
over the long term. The standard for determining the insuf‑
ficiency of surface water is whether a surface water appro‑
priator with the most junior right to divert water could divert
sufficient water to meet the Department’s specified irrigation
requirements. And the irrigation requirements are set percent‑
ages of the Department’s determination of the water needed
to fully irrigate a 70‑acre corn crop during two different peri‑
ods in the upcoming year.10 Summed up, if the most junior
appropriator could not divert the amount required under the
set percentages for either irrigation period, then the surface
water, and thus the river basin, is fully appropriated. The
NRDs dispute the Department’s 2008 methodology for this
calculation.
The Act also does not define hydrologically connected water
supplies. To determine the boundary of the fully appropri‑
ated land area in the basin with ground water that is hydro‑
logically connected to the river’s surface water, the Department
8 § 46‑713(1)(d).
9 Id.
10 457 Neb. Admin. Code, ch. 24, § 001.01A (2006).
638 	281 NebRASkA RepoRTS

applies an analytical formula. The NRDs also challenge this
methodology.
4. the departMeNt’s actioNs
froM 2006 to 2008
In its 2006 and 2007 reports, the Department determined that
the Lower Niobrara River basin was not fully appropriated. In
March 2007, NppD “placed a call” with the Department, ask‑
ing the Department to administer the Niobrara to satisfy its
appropriation rights.11 before 2007, NppD had not placed a
call for water in 50 years.
In May 2007, the Department issued closing notices. The
closing notices directed about 400 junior appropriators to stop
diverting water for the benefit of NppD’s hydropower facil‑
ity.12 Two junior appropriators immediately petitioned for an
administrative hearing to challenge the validity of NppD’s
appropriations.13 Soon after issuing the closing notices, the
Department temporarily lifted them to allow time for the
junior appropriators to enter into subordination agreements
with NppD. The Department reinstated the closings on August
1. Later, in county court, the two junior appropriators success‑
fully condemned part of NppD’s appropriation rights under
their constitutionally superior preference rights.14 The director
then dismissed as moot their petition challenging the validity
of NppD’s appropriations.15 This court reversed that decision
and remanded the cause for further proceedings.16
Meanwhile, in october 2007, the Department issued its
2008 report. The 2008 report concluded that the portion of
the Lower Niobrara River basin upstream of Spencer Dam
was fully appropriated. The Department based its decision on
NppD’s call. The Department did not designate the small por‑
tion of the river basin downstream of Spencer Dam as fully
11 See In re 2007 Appropriations of Niobrara River Waters, supra note 4.
12 See id.
13 See id.
14 See id.
15 See id.
16 See id.
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	639
Cite as 281 Neb. 634

appropriated. It applied its analytical formula to determine
the boundary for the basin. In January 2008, the former direc‑
tor made final the Department’s adjusted fully appropriated
determination.
5. the Nrds’ petitioNs
In February 2008, each affected NRD filed a petition for a
contested hearing. each alleged that (1) it had provided infor‑
mation to the Department that the river basin was not fully
appropriated; (2) the Department had failed to rely on the best
scientific data, information, and methodologies available; and
(3) the Department had failed to properly analyze whether
the current uses of hydrologically connected water supplies,
in the long term, would cause insufficient surface water or
insufficient streamflow to recharge aquifers supporting ground
water wells.
6. the departMeNt’s heariNg
To expedite the proceedings, the parties agreed to sub‑
mit 	their 	experts’ affidavits. 	The 	NRDs 	argued 	that 	the
Department’s order was unlawful or arbitrary and capricious,
and therefore invalid. They presented their expert’s affidavit,
in which he stated that he could not replicate the Department’s
conclusions.
The Department conceded that the only change in its fully
appropriated evaluation from January 2007 to January 2008
was NppD’s call. It presented the affidavit of its analyst who
had performed the Department’s evaluations. He stated that
he prepared a spreadsheet of the mean daily streamflow val‑
ues at the Spencer hydropower facility for the preceding 20
years (from 1987 to 2006). He compared these records against
NppD’s total appropriations (2,035 cubic feet per second) and
determined how many times the mean daily streamflow value
fell below NppD’s appropriations. He assumed for those days
that NppD would have closed, or shut off, the most junior
appropriator’s diversion rights. He concluded that the most
junior appropriator’s rights would have been closed so often
that it could not have diverted enough water to satisfy the
Department’s corn irrigation requirements.
640 	281 NebRASkA RepoRTS

The 	NRDs’ 	hydrology 	expert 	had 	reviewed 	all 	the
Department’s data and methodologies and peer‑reviewed litera‑
ture. He stated that the Department failed to include essential
streamflow data for the river, which data he retrieved from
other sources. even after retrieving this data, he could not
replicate the Department’s 20‑year averaging. He also could
not replicate its estimate of streamflow depletion because it
was unclear what data the Department had used. Finally, he
stated that it was impossible to assess the Department’s conclu‑
sions because the Department had not verified its results with
observed streamflow conditions.
The Department’s analyst responded in a second affidavit that
the Department does not include all of its data because if it did,
it could not economically publish the report. Instead, the report
states that the data is available upon request. The Department’s
analyst also did not estimate streamflow depletion or verify his
results with observations of streamflow conditions. He stated
that these measures were unnecessary when the Department’s
calculations showed an insufficient water supply without con‑
sidering the lag effect of ground water pumping.
7. the director’s order
In December 2009, the director rejected the NRDs’ chal‑
lenges. He concluded that under § 46‑713(1)(d), the NRDs had
failed to show that the Department’s data, information, method‑
ologies, and conclusions could not be independently replicated
and assessed. He relied on the 2008 report’s statement that the
Department’s data was available upon request.
The director rejected the NRDs’ argument that the Department
had failed to analyze whether the current uses of hydrologically
connected water supplies would result in insufficient stream‑
flow to recharge aquifers supporting ground water wells. He
concluded that under § 46‑713(3), the Department could focus
solely on whether the surface water was insufficient to sustain
existing surface water appropriations. He also concluded that
the Department had properly applied its regulatory criteria for
that determination. He stated, “[T]he process is based upon
whether a senior appropriator makes a valid call, and whether
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	641
Cite as 281 Neb. 634

the affected junior appropriator’s right is met [under the regula‑
tory] criteria due to the call.”
The director rejected the NRDs’ argument that the Department
could not rely on NppD’s call when a challenge to the call was
still pending. He stated that he knew from personal knowl‑
edge that NppD’s call was valid. And he reasoned that the
Department must timely issue its reports despite any pending
litigation: “In any event, having determined the senior call‑
ing right valid for purposes of the call prior to issuing closing
notices, no additional analysis is necessary by the Department
for purposes of the annual evaluation.”
In addition, the director concluded that the NRDs and
Jacobson had failed to show that the Department had not used
the best available scientific data and methodologies to deter‑
mine the basin’s fully appropriated boundary. He concluded
that the analytical formula was the best method available to the
Department. He also rejected Jacobson’s chemical analysis test
as a better methodology.
III. ASSIGNMeNTS oF eRRoR
The NRDs assign, restated and condensed, that the director
erred in the following rulings:
(1) The Lower Niobrara River basin is fully appropriated,
despite a pending challenge to the appropriations that triggered
the designation;
(2) the Department properly conducted its fully appropri‑
ated analysis, despite its use of a flow demand for the Spencer
hydropower facility that failed to take into account subordina‑
tion agreements, preference rights, and limitations on the face
of the appropriations;
(3) in the Department’s 2008 report concluding that the
basin was fully appropriated, the Department provided suffi‑
cient documentation to allow for independent replication and
assessment of its conclusions;
(4) section 46‑713 permits land to be designated as fully
appropriated even when ground water wells on such lands do
not, or would not, withdraw water from the Niobrara River;
(5) the Department complied with § 46‑713(1)(d), which
requires the Department to use the best available scientific
642 	281 NebRASkA RepoRTS

data, information, and methodologies to prepare its annual
report; and
(6) the Department properly delineated the areas of hydro‑
logically connected water supplies within the basin.
Additionally, the NRDs assign that the Department should
not have advocated for itself, instead of acting as a neutral
fact finder.
IV. STANDARD oF ReVIeW
[1] In an appeal from a Department of Natural Resources
order, we review whether the director’s factual determinations
are supported by competent and relevant evidence and are not
arbitrary, capricious, or unreasonable.17 The Department’s deci‑
sion must also conform to the governing law.18
[2,3] Agency action is arbitrary and capricious if it is taken
in disregard of the facts or circumstances of the case, with‑
out some basis which would lead a reasonable and honest
person to the same conclusion.19 Agency action taken in dis‑
regard of the agency’s own substantive rules is also arbitrary
and capricious.20
[4‑7] We independently review questions of law decided
by the director.21 A jurisdictional issue that does not involve
a factual dispute presents a question of law.22 The meaning
and interpretation of a statute present a question of law.23
17 See id.
18 See In re Application U-2, 226 Neb. 594, 413 N.W.2d 290 (1987).
19 Fleming v. Civil Serv. Comm. of Douglas Cty., 280 Neb. 1014, 792 N.W.2d
871 (2011).
20 See, Sierra Club v. Van Antwerp, 526 F.3d 1353 (11th Cir. 2008); Miss.
Dept. of Environ. Qual. v. Weems, 653 So. 2d 266 (Miss. 1995); Texas Mut.
Ins. v. Vista Community Medical, 275 S.W.3d 538 (Tex. App. 2008); Guier
v. Teton County Hosp. Dist., 248 p.3d 623 (Wyo. 2011).
21 See In re Applications T-851 & T-852, 268 Neb. 620, 686 N.W.2d 360
(2004).
22 Countryside Co-op v. Harry A. Koch Co., 280 Neb. 795, 790 N.W.2d 873
(2010).
23 See Travelers Indem. Co. v. Gridiron Mgmt. Group, ante p. 113, 794
N.W.2d 143 (2011).
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	643
Cite as 281 Neb. 634

Whether a decision conforms to law is by definition a question
of law.24
V. ANALYSIS
1. JurisdictioN
[8] because standing is a component of jurisdiction, we
first address the State’s argument that the NRDs and Jacobson
lacked standing to challenge the Department’s order.25 Standing
is fundamental to a court’s exercising jurisdiction, so a litigant
or court can raise the question of standing at any time during
the proceeding.26
After the director accepted the Department’s fully appropri‑
ated determination in 2008, the NRDs petitioned for a con‑
tested hearing under the Administrative procedure Act (ApA).27
In his 2009 order, the director treated the NRDs’ petition for a
contested hearing under the ApA as a petition for a contested
hearing under Neb. Rev. Stat. § 61‑206 (Reissue 2009). That
section gives the Department jurisdiction over all matters per‑
taining to water rights except as limited by statute. When the
Department makes a decision affecting water rights within
its jurisdiction, § 61‑206 authorizes it to hold a postdecision
hearing if the Department made its decision without a hearing.
The director interpreted “without a hearing” to mean without
a contested hearing and permitted the NRDs to challenge the
decision under § 61‑206.
but the director expressed doubt that the NRDs had stand‑
ing to challenge the fully appropriated designation, even
though he did not decide the issue. He doubted that the
NRDs could show that the order adversely affected their
interests merely because the designation triggered statutory
duties for the NRDs under § 46‑715. Section 46‑715 requires
the NRDs to participate in the development of an “integrated
24 Id.
25 See State ex rel. Reed v. State, 278 Neb. 564, 773 N.W.2d 349 (2009).
26 See Mutual Group U.S. v. Higgins, 259 Neb. 616, 611 N.W.2d 404
(2000).
27 See Neb. Rev. Stat. § 84‑913 (Reissue 2008).
644 	281 NebRASkA RepoRTS

management plan” for the river basin. It specifies the objec‑
tives that the plan must achieve and procedures that the NRDs
must implement.
on appeal, the Department does not explicitly argue that
the NRDs lacked standing. Instead, it concedes that comply‑
ing with their duties under § 46‑715 may impose costs on the
NRDs. It asserts that whether these costs constitute an adverse
impact for standing presents an issue of first impression.
Neither party has discussed the application of § 46‑713(2)
here, but we believe that it is relevant to whether the NRDs
had standing. Section 46‑713(2) requires the Department to
reevaluate its fully appropriated designation if it believes that
a reevaluation may lead to a different result. Its decision to
reevaluate can be “in response to a petition filed with the
[D]epartment by any interested person.”28 The petition is suf‑
ficient to trigger this reevaluation if it is “accompanied by
supporting information showing that . . . (b) the [D]epartment
relied on incorrect or incomplete information when the river
basin, subbasin, or reach was last evaluated.”29
The Legislature authorized an “interested person” to chal‑
lenge the Department’s determination by petitioning for a
reevaluation. We believe that it would be inconsistent with this
authorization for us to hold that an interested person could
not challenge the determination by petitioning for a contested
hearing on the same grounds under the ApA or § 61‑206(1).
So we view the only standing issue as whether the NRDs are
interested persons under § 46‑713(2).
Section 46‑706(1) defines “person” to include political sub‑
divisions, which include NRDs.30 but in Metropolitan Utilities
Dist. v. Twin Platte NRD,31 we held that an NRD does not have
standing to object to an appropriation application when it does
not have a water right that would be adversely affected by the
28 § 46‑713(2).
29 Id.
30 See, e.g., Metropolitan Utilities Dist. v. Twin Platte NRD, 250 Neb. 442,
550 N.W.2d 907 (1996).
31 Id.
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	645
Cite as 281 Neb. 634

application.32 We recently reiterated our holdings that a politi‑
cal subdivision must be asserting its own interests, rather than
a third party’s interests, and stated that it must show an injury
in fact.33
[9] The same standing rules apply to § 46‑713(2): Generally,
to be an “interested person” under § 46‑713(2), a litigant chal‑
lenging a fully appropriated determination by the Department
must be asserting its own rights and interests, not those of a
third party, and must demonstrate an injury in fact sufficient to
confer common‑law standing.
As in our earlier cases, the NRDs, as entities, did not claim
to have water rights adversely affected by the Department’s
fully appropriated designation. but unlike our earlier cases,
the Department’s action triggers duties for the NRDs that will
require them to spend public funds. Here, all of the NRDs
alleged that because of the Department’s order, they would
be required to take regulatory measures that will be costly to
taxpayers in their districts. And Neb. Rev. Stat. § 77‑3442(4)(c)
(Reissue 2009) supports this claim. It authorizes an NRD to
levy taxes in this circumstance. Specifically, the taxes are used
to “administer and implement ground water management activi‑
ties and integrated management activities” if the NRD has land
within a river basin, subbasin, or reach that the Department
has determined to be overappropriated or fully appropriated.34
So we consider whether the NRDs’ duties or expenditures cre‑
ate an exception to the requirement that they assert their own
rights and interests.
[10] Unless an exception applies, state officials and politi‑
cal subdivisions generally do not have standing to challenge
the constitutionality of statutes directing their duties.35 but the
NRDs are not challenging the legislation directing their duties
32 See, also, Ponderosa Ridge LLC v. Banner County, 250 Neb. 944, 554
N.W.2d 151 (1996).
33 Central Neb. Pub. Power Dist. v. North Platte NRD, 280 Neb. 533, 788
N.W.2d 252 (2010).
34 § 77‑3442(4)(c).
35 See, Prendergast v. Nelson, 199 Neb. 97, 256 N.W.2d 657 (1977); 16 Am.
Jur. 2d Constitutional Law § 149 (2009).
646 	281 NebRASkA RepoRTS

in the event of the Department’s action or any legislation.
They are challenging the validity of the.Department’s action
that compelled them to spend public funds. Holding that the
NRDs lacked standing here would leave political subdivisions
at the mercy of superior agencies with no redress for actions
that improperly or arbitrarily and capriciously require them to
spend public funds.
[11] Moreover, in Upper Big Blue NRD v. State,36 we implic‑
itly concluded that an NRD had standing to challenge the
Department’s fully appropriated designation under the Uniform
Declaratory Judgments Act. our decision in Upper Big Blue
NRD is consistent with the rule that political subdivisions have
standing to challenge state action that adversely affects them
or requires them to expend public funds.37 We conclude that
because the NRDs have fiduciary duties with regard to the
public funds that they are charged with raising and controlling,
they have standing to challenge state action that requires them
to spend those funds.
For the same reason, the NRDs have standing to appeal
under Neb. Rev. Stat. § 61‑207 (Reissue 2009). That statute
states in part, “If any county, party, or parties interested in
irrigation or water power work affected thereby are dissatisfied
with the decision or with any order adopted, such dissatisfied
county, party, or parties may appeal to the Court of Appeals
to reverse, vacate, or modify the order complained of.” We
recognize that § 46‑750 provides that a person aggrieved by a
Department order issued under the Act may appeal the order
in accordance with the ApA. but § 46‑750 does not provide
that an ApA review is the exclusive means of appealing a
Department order. because the director permitted the NRDs’
petition under § 61‑206, we conclude that the NRDs could
invoke appellate review under § 61‑207 here.
our conclusion that the NRDs have standing, however,
does not apply to Jacobson. The Department’s final fully
36 Upper Big Blue NRD v. State, 276 Neb. 612, 756 N.W.2d 145 (2008).
37 See, e.g., Pony Lake Sch. Dist. v. State Committee for Reorg., 271 Neb.
173, 710 N.W.2d 609 (2006); Kenney v. East Brunswick Tp., 172 N.J.
Super. 45, 410 A.2d 713 (1980).
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	647
Cite as 281 Neb. 634

appropriated designation requires the Department and an NRD
with land within the river basin to continue the stays issued
after the Department’s preliminary designation on the issuance
of increased or new water appropriations.38 but these stays
do not adversely affect existing rights to use ground water.39
because Jacobson failed to allege any actual or imminent harm
that would satisfy the requirement of an injury in fact and no
exception applies, we conclude that he lacked standing and we
thus need not address his cross‑appeal.
We turn now to the merits of the NRDs’ challenge.
2. 2008 fully appropriated desigNatioN
The NRDs contend that the Department failed to rely on the
best information available by hinging its analysis on NppD’s
call. They point out that in 2006 and 2007, the Department
had found that the surface water was relatively abundant and
that the river basin was not fully appropriated. They argued
that the Department’s analysis changed dramatically solely
because of NppD’s 2007 call. They further contend that the
director improperly assumed that NppD’s appropriations were
valid despite pending legal challenges. And they contend that
if that challenge results in a finding that NppD has for‑
feited its appropriations, the Department’s conclusion would
likely be the same as it was in 2006 and 2007—a basin not
fully appropriated.
[12] The Department counters that it cannot wait for the
outcome of a legal challenge to make its preliminary deter‑
mination whether the river basin was fully appropriated. That
is correct. We recognize that the Act requires the Department
to issue its annual report by January 1 of each year. but we
reject the Department’s contention that its investigation of
NppD’s water use at the dam was based on the best informa‑
tion available to the Department for its 2008 analysis. It is
precisely because the director cannot resolve a challenge to a
call before the Department issues its annual evaluations that
the Department cannot premise its annual evaluations upon a
38 See § 46‑714.
39 See id.
648 	281 NebRASkA RepoRTS

senior appropriator’s call. We also agree with the NRDs that
the director improperly assumed that NppD’s appropriations
were valid. The director’s reasoning that a challenge to a call
is irrelevant after the Department has issued closing notices is
incorrect. Until a challenge is decided, the director is not at
liberty to conclude that it is without merit.
Furthermore, the Department could have avoided this dis‑
pute by simply following its own regulations. We agree with
the director that § 46‑713(3)(a) permits the Department to des‑
ignate a river basin or subpart as fully appropriated by focusing
solely on whether surface water appropriations are sustainable.
but nothing in its regulations permits the Department to make
that determination by comparing a senior appropriation right to
the streamflow values at a specific diversion point or stream‑
flow gauge.
(a) The Department’s Failure to
Follow Regulations
Although the Department provided a copy of its 2005
regulations in the 2008 annual report, the Department’s 2006
regulations were in effect when it prepared that report. The
relevant provision is found at 457 Neb. Admin. Code, ch. 24,
§ 001.01A and is known as the Department’s 65/85 rule.
Summarized, the 65/85 rule requires the Department to pro‑
ject whether the most junior surface water appropriator can
divert sufficient water to satisfy two different standards: (1) 65
percent of the Department’s calculated annual corn irrigation
requirement from July 1 through August 31 and (2) 85 percent
of the Department’s calculated annual corn irrigation require‑
ment from May 1 through September 30. If the most junior
appropriator could not meet either one of these standards,
then the Department determines that the river basin is fully
appropriated.
but more important here, § 001.01A also specifies the infor‑
mation and fallback methodology that the Department must use
to make its projection:
The inability to divert will be based on stream flow data
and diversion records, if such records are available for the
most junior surface water appropriator. If these records
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	649
Cite as 281 Neb. 634

are not available, the inability to divert will be based on
the average number of days within each time period (May
1 to September 30 and July 1 to August 31) that the most
junior surface water appropriation for irrigation would
have been closed by the Department and therefore could
not have diverted during the previous 20 year period. In
making this calculation, if sufficient stream flow data
and diversion data are not available, it will be assumed
that if the appropriator was not closed, the appropriator
could have diverted at the full permitted diversion rate. In
addition the historical record will be adjusted to include
the impacts of all currently existing surface water appro-
priations and the projected future impacts from currently
existing ground water wells. The projected future impacts
from ground water wells to be included shall be the
impacts from ground water wells located in the hydro‑
logically connected area that will impact the water supply
over the next 25 year period.
(emphasis supplied.)
This regulation requires in unmistakable terms that the
Department use its streamflow data and diversion records to
project the most junior appropriator’s ability to divert sufficient
water. Further, because its averaging method for the preceding
20‑year period is a fallback methodology if the streamflow
data and diversion records are not available, the regulation
obviously requires the Department to use its current data
and records. This interpretation of the regulation is supported
both by its plain language and by changes made to the 2005
regulation.
Specifically, under the previous 2005 regulation—which was
not in effect for these proceedings—the only method for pro‑
jecting whether the most junior appropriator could divert suf‑
ficient water was to determine the percentage of time that the
appropriator could divert water during the previous 20 years
and then to project the lag impact of existing wells for the next
25 years. The Department’s 2006 amendment to its regulation
to make the averaging method the fallback method shows that
before 2008, the Department had changed its methodology to
use its current data and records. but in 2008, it did not use
650 	281 NebRASkA RepoRTS

its current data and records to determine that the basin was
fully appropriated.
[13] Agency regulations properly adopted and filed with
the Secretary of State of Nebraska have the effect of statu‑
tory law.40 The 2006 regulation is substantive. It supplies the
standard for determining whether the surface water in a river
or stream is insufficient to sustain existing appropriations. So
for a valid fully appropriated determination, the Department’s
action must conform to its rules which are in effect when the
action is taken.41 Nebraska’s statutes require the Department to
keep streamflow data and diversion records.42 The Department’s
reports show that it has them. So without any explanation for
its use of the fallback averaging methodology, we conclude that
the Department has failed to follow the methodology required
by its regulation.
Moreover, contrary to the director’s statements in his order,
even when the Department properly uses its 20‑year averaging
method, the methodology specified in the Department’s regula‑
tion does not hinge upon a call. Instead, it specifically requires
the Department to adjust the historical record “to include the
impacts of all currently existing surface water appropriations
and the projected future impacts from currently existing ground
water wells.” That is not what occurred in 2008.
As noted, the Department’s analyst stated that he com‑
pared NppD’s total appropriations to the mean daily stream‑
flow values at Spencer Dam for the preceding 20 years. but
the regulation does not permit this comparison analysis at a
specific diversion point. And that is not how the Department
applied the 20‑year averaging methodology in its 2006 and
2007 reports. A difference of 1 year (2006) in a 20‑year aver‑
age could not have varied the Department’s results this much
without a very significant drop in the 2006 streamflow rate.
Nothing in the Department’s report suggests that such a drop
40 In re Interest of Jorge O., 280 Neb. 411, 786 N.W.2d 343 (2010).
41 See, Robbins v. Neth, 273 Neb. 115, 728 N.W.2d 109 (2007); Schmidt v.
State, 255 Neb. 551, 586 N.W.2d 148 (1998).
42 See Neb. Rev. Stat. §§ 46‑227, 46‑230, and 46‑235(1) (Reissue 2010).
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	651
Cite as 281 Neb. 634

occurred. Instead, the Department conceded that the difference
was solely attributable to NppD’s call. A review of its previous
results shows that even if the Department had properly used
the fallback averaging methodology in 2008, it applied it in an
arbitrary manner.
(b) The Department’s Failure to Use
Consistent Methodologies
The Department cannot square its 2008 methodologies and
results with the results in its previous reports. Most important,
they show that the Department has not applied its 20‑year aver‑
aging methodology consistently. When using this method in
2006, the Department adjusted the river’s historical streamflow
values for the preceding 20 years by total appropriations exist‑
ing at the start of the 20‑year period. In 2007, the Department
adjusted the river’s historical streamflow values by total appro‑
priations existing at the time of its analysis. And in neither year
did the Department find that the basin was fully appropriated.
but in 2008, it did not adjust the streamflow values for the
upstream portion at all. Instead, it compared NppD’s appro‑
priations to the average streamflow values at Spencer Dam for
the preceding 20 years.
(i) 2006 Methodology for 20-Year Averaging
As discussed, the 2005 regulation required the Department
to perform an averaging of the previous 20‑year period to
determine the percentage of time that the most junior appro‑
priator could divert water. For the 2006 report, the Department
analyzed the 20‑year period from 1985 to 2004. The methodol‑
ogy statements in the 2006 report showed that if an appropria‑
tor with a priority date after the 20‑year period began had made
a call, the Department would reconstruct “the administrative
record as if all the surface water appropriations that existed as
of 2004 existed in 1985.” In its chapter on the Lower Niobrara
River basin, the Department noted that a 1991 call had resulted
in a 4‑day closing of junior appropriation rights. but because
the senior appropriator had a priority date before 1985, the
Department stated that it was not required to reconstruct the
administrative record.
652 	281 NebRASkA RepoRTS

Why are the 2006 methodology statements significant?
They show that regardless of whether a call was made, the
Department accounted for all appropriations that existed in
1985, at the start of the 20‑year period. This shows that the
Department accounted for all of NppD’s appropriations because
they all existed before 1985. The 2006 methodology statements
also show that the Department was not calculating the average
number of days that water was available for diversion based
upon what appropriators were actually diverting, but upon what
appropriators were authorized to divert. In other words, for any
days in which a senior appropriator could have made a call
because the streamflow was insufficient to meet its diversion
right, the Department would have assumed that the most junior
appropriator’s right to divert would have been closed.
(ii) 2007 Methodology for 20-Year Averaging
The 2006 regulations were in effect when the Department
prepared its 2007 report. but the Department failed to explain
why it did not use its current data and records to project
whether the most junior appropriator would be able to divert
sufficient water to meet the Department’s irrigation require‑
ments. Instead, it used the 20‑year averaging method then also.
In 2007, the Department analyzed the 20‑year period from
1986 to 2005.
Yet the methodology statements in the 2007 report showed
that the Department followed the 2006 regulation’s requirement
for adjusting the historical record when it used the averaging
method. The 2007 report specifically stated that “[t]he histori‑
cal record was adjusted to include the impacts of all currently
existing surface water appropriations . . . .” Currently existing
appropriations would have included all of NppD’s appro‑
priations. So in 2007, the Department also accounted for all of
NppD’s appropriations when it adjusted the historical record to
calculate the average number of available days in which water
was available for diversion in the preceding 20 years. In brief,
the Department accounted for all of NppD’s appropriations in
both 2006 and 2007 when adjusting the river’s streamflow val‑
ues. And yet, in both years, the Department concluded that the
river basin was not fully appropriated.
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	653
Cite as 281 Neb. 634

(iii) 2008 Report
In contrast to the Department’s previous reports, in the 2008
report, which is the subject of this appeal, the Department
divided the Lower Niobrara River basin into two sections:
upstream and downstream of Spencer Dam. It appears to
have applied its 2007 adjustment methodology to the down‑
stream portion of the river basin because its results for that
portion were identical to its previous results for the entire
basin. but for the upstream portion, the Department compared
NppD’s total appropriations to the mean daily streamflow
values only at Spencer Dam for the preceding 20 years. We
do not believe, however, that the variance in its methodology
is justified simply by NppD’s call when both the 2006 and
2007 reports accounted for NppD’s appropriations.43 Nor did
the Department explain how the streamflow values at the dam
related to streamflow values for other parts of the river or the
river as a whole.
A table illustrates the wide variance in the Department’s
results before and after it divided the river into upstream
and downstream portions. The variance exists because the
Department had not previously applied its 20‑year averaging
methodology as a comparison of NppD’s total appropriations
to the streamflow values at Spencer Dam.
Average Number of Days in Which Water Was Available
for Diversion Based on 20-Year Averages
July 1 to Aug. 31 	May 1 to Sept. 30
2006 	62 	153
(1985‑2004)
2007 	61.9 	152.9
(1986‑2005)
2008
(1987‑2006)
Upstream 	2.7 	24.6
Downstream 	61.9 	152.9
As the table illustrates, using the Department’s comparison
analysis to perform its 20‑year averaging dramatically reduced
43 See Girard v. City of Glens Falls, 173 A.D.2d 113, 577 N.Y.S.2d 496
(1991).
654 	281 NebRASkA RepoRTS

the number of days in which water was available for diversion
upstream of Spencer Dam.
Also, an unexplained difference exists in the Department’s
2008 results for the number of days that an appropriator would
need to divert water to meet the Department’s calculated
irrigation needs for a 70‑acre corn crop. Remember that the
Department concludes that a river basin is fully appropriated if
the most junior appropriator could not meet the required per‑
centages in either of two irrigation periods.
The Department did not change the number of acre‑inches
that a corn crop would require annually for the different irri‑
gation zones in the river basin. Nor did it change its formula
for converting the required acre‑inches into the number of
days that an irrigator would need to divert water to meet the
65‑percent and 85‑percent requirements in its two irrigation
periods. but in 2008, the Department did not calculate a range
of days to reflect the five different irrigation zones in the river
basin’s upstream portion. Instead, its calculation of the number
of diversion days needed to irrigate for the entire upstream
portion of the river basin equaled the number of days it had
previously said were needed only in the basin’s most western
irrigation zone.
Diversion Days Needed to Meet
Irrigation Percentages
To Meet 65% 	To Meet 85%
From July 1 to Aug. 31 	From May 1 to Sept. 30
2006 	23.9 to 37.2 	31.3 to 48.6
2007 	23.6 to 36.9 	30.9 to 48.3
2008
Upstream 	36.9 	48.3
Downstream 	23.6 to 25.6 	30.9 to 33.4
As the table illustrates, these variances in the Department’s
results show that it has not applied its methodologies in a
consistent manner to the upstream portion of the river basin.
And the Department failed to account for these variances
under its stated methodologies and regulations to show that
the change was not arbitrary.44 The Department may not apply
44 See Girard, supra note 43.
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	655
Cite as 281 Neb. 634

a particular methodology one year and arbitrarily decide to
ignore it the next. Nor is it free to disregard its own substan‑
tive rules.
We conclude that the Department’s 2008 fully appropriated
designation is arbitrary and capricious. The Department failed
to follow its own regulations to conclude that the basin was
fully appropriated. It also failed to apply its methodologies in
a consistent manner.
(c) The Department’s Failure to Comply
With § 46‑713(1)(d)
The NRDs also contend that the Department failed to com‑
ply with § 46‑713(1)(d). That section requires the Department
to use the best available scientific data, information, and meth‑
odologies to prepare its annual report. even if the Department
could in hindsight offer a reasonable explanation for the vari‑
ances in its results, § 46‑713(1)(d) requires it to “provide [in
the report] sufficient documentation to allow these data, infor‑
mation, methodologies, and conclusions to be independently
replicated and assessed.”45 We agree with the NRDs that many
of the Department’s conclusions could not be replicated and
assessed even if the Department had provided its raw data,
because methodology information is missing.
First, the report does not explain how the Department pro‑
jects whether the most junior appropriator can divert suffi‑
cient water based on its current streamflow data and diversion
records. We assume that the river’s streamflow rates would be
crucial to whether water is available for diversion. but nothing
in the report provides the Department’s determination of the
river’s streamflow rates. And even if the Department does not
rely on this information, it has failed to provide any analytical
framework for its determinations.
Similarly, 	the 	Department 	explicitly 	makes 	streamflow
values a necessary consideration in reaching a fully appro‑
priated determination under its averaging methodology. but
the Department has provided only the results of its 20‑year
45 Id.
656 	281 NebRASkA RepoRTS

averaging methodology in tables. It has not explained how
it adjusts the historical record of daily streamflow values to
account for all currently existing appropriations.
Further, even if the Department had provided the river’s
streamflow rates or values, its reports show that it maintains
many streamflow gauges in the river. And its analyst’s affi‑
davit shows that it records more than one daily reading at
these points. An independent party could not replicate and
assess the Department’s findings and methodologies with‑
out knowing whether its determinations of streamflow rates
or values represented the mean, median, or mode of the
Department’s daily readings. There is a similar failure to
explain how the Department performs its erosion analysis
under 457 Neb. Admin. Code, ch. 24, § 001.01C, which also
adjusts the historical record to account for the impact of
ground water pumping.
In sum, the Department’s procedures are opaque. because
the general statements in its regulations and reports are not suf‑
ficient for an independent party to replicate or assess its find‑
ings or methodologies, we conclude that the Department has
failed to comply with § 46‑713(1)(d).
because we conclude that the Department’s fully appropri‑
ated designation is invalid, we do not reach the NRDs’ conten‑
tion that the Department’s methodology for determining the
basin’s land boundary is not the best available.
VI. CoNCLUSIoN
We conclude that the NRDs had standing to challenge
the Department’s 2008 determination that the Lower Niobrara
River 	basin 	was 	fully 	appropriated. 	Jacobson, 	however,
lacked standing.
We conclude that the Department’s fully appropriated desig‑
nation was arbitrary and invalid. The Department failed to
comply with its own regulations when it determined that the
basin was fully appropriated by comparing the streamflow
values at a specific diversion point or streamflow gauge to a
senior appropriator’s total appropriation rights. A review of its
previous reports also shows a complete lack of consistency in
the way it has applied its 20‑year averaging methodology.
MIDDLe NIobRARA NRD v. DepARTMeNT oF NAT. ReSoURCeS 	657
Cite as 281 Neb. 634

Finally, we conclude that the Department has failed to
plainly describe its methodologies so that they can be repli‑
cated and assessed in compliance with § 46‑713(1)(d).
We hold that the Department’s 2008 fully appropriated
determination for the Lower Niobrara River basin was invalid.
We reverse and vacate the director’s order affirming that
determination.
reversed aNd vacated.
JaMes tierNey aNd Jeffrey tierNey, appellaNts ,
v. four h laNd coMpaNy liMited
partNership et al ., appellees.
798 N.W.2d 586
Filed June 3, 2011. 	No. S‑10‑103.
1. Judges: Recusal. A judge shall disqualify himself or herself in any proceeding in
which the judge’s impartiality might reasonably be questioned.
2. ____: ____. A trial judge should recuse himself or herself when a litigant dem‑
onstrates that a reasonable person who knew the circumstances of the case would
question the judge’s impartiality under an objective standard of reasonableness,
even though no actual bias or prejudice is shown.
3. Judges: Recusal: Waiver. A party is said to have waived his or her right to
obtain a judge’s disqualification when the alleged basis for the disqualification
has been known to the party for some time, but the objection is raised well after
the judge has participated in the proceedings.
4. Judges: Recusal: Time. The issue of judicial disqualification is timely if sub‑
mitted at the earliest practicable opportunity after the disqualifying facts are
discovered.
5. Judges: Recusal: Appeal and Error. A traditional harmless error analysis is
inappropriate for review of questions of judicial disqualification.
6. ____: ____: ____. The disqualification of a judge is not a disqualification to
decide erroneously. It is a disqualification to decide at all.
7. ____: ____: ____. The three‑factor special harmless error test in Liljeberg v.
Health Services Acquisition Corp., 486 U.S. 847, 108 S. Ct. 2194, 100 L. ed.
2d 855 (1988), should be used for determining when vacatur is the appropriate
remedy for a trial judge’s failure to recuse himself or herself when disqualified
under the Nebraska Code of Judicial Conduct.
8. Judges. When a judge is biased, his or her personal integrity and ability to
serve are thrown into question, placing a strain on the court that cannot easily
be erased.
petition for further review from the Court of Appeals, iNbody,
Chief Judge, and irWiN and carlsoN, Judges, on appeal thereto
658 	281 NebRASkA RepoRTS