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"Who Owns the Water? (Caution, it's a trick question):

Russell McGlothlinBrownstein Hyatt Farber Schreck

rmcglothlin@bhfs.com(805) 882 1418

Understanding the Fundamentals of Water Management Law

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"Whiskey is for drinking; water is for

fighting over."

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Water Law & Policy Who/What Gets the Water? Under What Conditions? Are Policy and Law in

Synch?

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The Qualifications Confusing

States Use Different Approaches

Frequent Exceptions to the Rules

The Law is Sometimes Not Well-Suited for the Science

Not Always Logical/Practical

Goal = Introduction. Basic Understanding.

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“Things should be as simple as

possible, but not simpler.”

 ~

Albert Einstein

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Water Policy Questions

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Water Policy Questions

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Water Policy Questions

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What Defines Water Use Law in the U.S.?

Mostly State Law (Federal Reserve Rights = Exception)

Three Approaches: Riparianism, Prior Appropriation, and Hybrids

Surface Water vs. “Groundwater”

Who Regulates/Manages?

Groundwater Law is Less Developed and is Still Evolving

Private Water Rights to Use Water – Publicly Regulated

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Tragedy of the Commons

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Water is a Unique Resource Because it is Shared and Transient

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Are Water Rights Property?

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Public v. Private CA Water Code section 102: All Water

Within the State is the Property of the People of the State, but the Right to the Use of Water May be Acquired by Appropriation in the Manner Provided by Law.

Initiation of Water Use Subject to Public Interest Review and Ongoing Police Power Regulatory Oversight; Inherent Aspect of the Right

Think Zoning

Key Point: Right to Use = Property Right Subject to Regulatory Regime

Debate Over Where to Draw the Line? Public Trust, Regulatory Takings, etc.

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Beneficial and Reasonable Use

Limitation

With Few Exceptions, All States Apply Some Form of Beneficial and Reasonable Use Limitation on the Right to Use Water

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What is Unreasonable/ Non-Beneficial?

Speculation? Water Rights in “Cold Storage?”

Reasonable Efficiency or Optimal Use? (Alfalfa, Golf Courses, Artificial Lakes in the Desert?)

Harm to Environmental and Other Public Trust Considerations?

Is Good Public Policy Served by Allowing Courts to Determine Optimal Use? Legislature?

Alternative: Markets??? Challenges???

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CA Examples of Unreasonable Methods of Use and Non-Beneficial

Purposes of Use

Use of Full Flow of Stream to Maintain Accretion (Sediment Buildup) to Downstream Riparian Land -- Gin Chow v. Santa Barbara (1933);

Flooding of Fields to Kill Gophers --Tulare Irr. Dist. v. Lindsay-Strathmore Irr. Dist. (1935)

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Three Approaches to Water Law: the Old, the New, and

the Ugly

Riparianism (The Old): Land with Water = Riparian Water Rights

Prior Appropriation (The New): Land is Irrelevant – First-in-Time is First-in-Right

Hybrid (The Ugly): Riparianism and Prior Appropriation

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RiparianismOrigins in English Common

Law

Riparian Right - the Right to Divert Water from a Water Body Adjoining Land for Use on Adjoining Land

The Right is an Incident of the Rights to the Land (i.e., Part of the “Bundle” of Rights)

Essentially Two Doctrines: Natural Flow - Right to the Entire

Flow of the Stream - Minor Exceptions

Reasonable Use - Right to Divert for “Reasonable” Uses. Related Doctrines: Correlative Rights Doctrine and 2nd Restatement of Torts

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Natural Flow Doctrine(Old English Rule)

Riparian Owner Possessed the Right to the “Full” Flow of the Stream “Undiminished as to Quality or Quantity”

“Domestic” Uses Allowed

Pre-Industrial England

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Reasonable Use Doctrine

(New American Rule)

Natural Flow Doctrine Not Well Suited for the Industrial Age

Courts and Legislatures Amend Old English Common Law to Allow for Irrigation and Industrial Uses So Long as Water is Used Reasonably

Correlative Rights Doctrine Adopted in Some States – Riparians Share Supply

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Riparian Rights Appurtenant to Land; Right to Use

Water from Adjoining Water Body

Traditionally Must be on Riparian Land (Exceptions Apply)

Reasonable Use

Rights May be Correlative (i.e., Riparians Share the Supply)

Right May be Inchoate (i.e., Dormant) - Not Dependent on Historical Use

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Criticism of Riparian Rights - The Need for Certainty

Unrecorded, Unknown Quantity – Can Preempt Vested, Long-Standing Uses

Uncertainty Deters Long-Term Planning and Investments in Water Rights and Infrastructure

Dormant Rights Impair Administration of Water Rights Because of Uncertainty

Not Well Suited for Water-Scarce Environments

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Prior Appropriation

Developed in Western Mining Camps Because Riparianism Was Not Well-Suited for Miners (Miners Were Largely Trespassers on Public Lands)

Water Disputes Rapidly Escalate

Perfection of Right Through Posting Notice at Place of Diversion and Commencing Diversion

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Appropriative Rights May Apply to Use Off of Riparian

Tract

Defined by Historical Quantity of Use

Priority Based Upon First-In-Time, First-in-Right

May be Forfeited (i.e., Lost) by Non-Use

May Require State Permit California: State Water Resources

Control Board Colorado: Division of Water Resources

(State Engineer) New Mexico: Office of State Engineer Nevada: Division of Water Resources

(State Engineer)

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Riparianism vs. Prior Appropriation

Riparianism – Mostly in Eastern States and Those Along the Mississippi (the Old)

Prior Appropriation – Mountain and Western States (the New)

Hybrid States – Dual System States. Generally, Recognize Riparian Rights that Vested Before the State Changed to an Appropriative System. (e.g., Kansas, Nebraska, North and South Dakota, Oregon, Texas, Washington)

California – the True Dual System State

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California Water Law

Riparian Rights are First Priority Rights

Appropriative Rights are Second Priority Rights

Surface Water Regulated by the State

Percolating Groundwater Regulated by Local/Judicial Management if Regulated

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Riparianism v. Prior Appropriation

Conflict Between Miners (Appropriators) and Landowners Who Possessed Land Under Mexican Land Grants (Riparians)

California Supreme Court Addresses the Conflict in Lux v. Haggin (1886)

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And the Winner Is . . .

Court Reasons that California’s Adoption of the English Common Law Included Adoption of the Riparian Doctrine

However, Court also Acknowledges Prior Appropriation but Renders Appropriative Rights “Junior” in Priority to Riparian Rights

We Choose Both!!

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Uncertainty fostered in California by

riparian/overlying rights California’s water law is a

source of uncertainty because it endorses riparian/overlying rights and appropriative rights, with riparian/overlying rights being senior in priority

Dormant riparian rights are a principal source of uncertainty in California – In re Long Valley

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QUESTIONS???

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What About Groundwater?

Often Separate Law Applies Historically Viewed as an

Occult Groundwater Law Not as

Well Developed in Some States

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What is “Groundwater”?

What’s the Issue? The Demarcating Line Between “Independent” Groundwater and Groundwater That is Surface Water “Dependent” (Feeds or is Fed by Surface Watercourse)

Other Terms - Percolating Groundwater vs. Subterranean Stream; Surface Water Underflow; Groundwater Flowing within Relatively Impermeable Beds and Banks (Known and Defined Channel)

What is at Stake? Who Regulates? Can I Get a Permit? Can I Be Sued or Sue? Other Legal Implications

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Difficult Issue Because it Pits Countervailing

Interests Against One Another

Want Certainty to Support Decisions to Plan and Invest in Water Resources

Want “Rational” System that Appreciates the Hydrologic Connection Between Surface Water and Groundwater

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Potential Approaches Rigid Separation – If It’s Under the

Surface, It’s Groundwater (e.g., Oklahoma)

Fully Integrated System – It’s All One (e.g., Nebraska Gives Local Districts Authority to Designate Integrated GW/SW Management Areas)

Bright Line – Location of Groundwater (e.g., (1) Within 1,000 ft of Stream and Less than 200 ft Deep; or (2) Colorado - Will Withdrawal Deplete SW Waterbody Within 100 Years by More Than 1/10 of 1% of the Amount Withdrawn?)

Character of Groundwater – Focus on Geology/Hydrogeology (e.g., Groundwater Flowing with Relatively Impermeable Beds and Banks)

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CaliforniaPercolating Groundwater

v. Subterranean Stream Percolating Groundwater: Vagrant,

Wandering Drops Moving By Gravity in Any and Every Direction Along the Path of Least Resistance – City of Los Angeles v. Hunter (1909)

Subterranean Stream (“Groundwater Flowing in Known and Definite Channel”)• Subsurface Channel Present;• Channel Possess Relatively Impermeable

Beds and Banks• Course of Channel Capable of Being

Known with Reasonable Inference; and• Groundwater is Flowing in the Channel

Beds and Banks Test - Los Angeles v. Pomeroy (1899)

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Groundwater Law:The Approaches

Absolute Ownership/Rule of Capture

Common Law Reasonable Use

Correlative Rights

2nd Restatement of Torts § 858

Prior Appropriation

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Rule of Capture

(Absolute Dominion)

Rule of Capture = Get It and It’s Yours

The Water Hog Doctrine

8 States Have Adopted or Indicated a Preference for Rule. Texas has the “Most Pure” Capture Rule, But Now Manages by Groundwater Districts

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Reasonable Use and Correlative Rights

Common Law Reasonable Use - Capture Rule But Water Must be (a) Used on Overlying Land, and (b) Put to Reasonable Use

Correlative Rights – Based Upon Reasonable Use Doctrine - Sharing of Supply Among Overlying Landowners. Share of Supply May be Based on Acres Owned, Water Needs, etc.

At Least 34 States Use Some Form of Reasonable Use Doctrine – Common Law Reasonable Use (25 States), Correlative Rights (6 States), 2nd Restatement of Torts § 858 (3 States)

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Second Restatement of Torts § 858

Landowner Can Produce Groundwater Without Liability Unless the Withdrawal:a) Harms Neighboring Landowner’s

Groundwater Production;b) Exceeds Reasonable Share of

Supply; orc) Has a Direct and Substantial Effect

on Watercourse or Lake, Which Unreasonably Harms Person Entitled to Use of Watercourse or Lake

Reasonableness Determined in Reference to Variety of Considerations

3 States Have Formally Adopted (Michigan, Ohio, and Wisconsin)

Might be Used to Define Reasonableness in Other States

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Appropriative Rights to Groundwater

Like Appropriative Rights to Surface Water

Defined by Historical Quantity of Use

Priority Based Upon First-In-Time, First-in-Right

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CaliforniaOverlying Groundwater

Rights: Similar to Riparian Rights

Overlying Rights to a Groundwater Aquifer Are Analogous to Riparian Rights to a Surface Water Body

Same Legal Characteristics Apply to Both Forms of Right

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Riparian/Overlying Rights

Appurtenant to Land; Right to Use Water from Adjoining Surface Water Body/Underlying Aquifer

Use Must be on Riparian/Overlying Land

First Class Right (Senior to Appropriative Rights)

Rights are Correlative (i.e., Equal Legal Footing) with Other Riparians/Overlying Owners; Conflicts Between Riparians/Overlying Land Owners Settled Pursuant to Reasonable Use Considerations

Right May be Inchoate (i.e., Dormant), and Thus is Not Dependent on Historical Use; Only Limited in Quantity by Reasonable and Beneficial Use Criteria

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CaliforniaThe Water Rights

Table Source

Type of Right

Subterranean Stream

Percolating Groundwater

RiparianOr Overlying Owner

Appropriator

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Overdraft . . .

Adverse Basin Effects

Prescriptive Rights

Ramp-Down

Doctrine of Intervening Public Use

The Rules Change . . .Maybe

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What is Overdraft? Groundwater extractions in excess of

safe yield

Safe yield defined as “the maximum quantity of water which can be withdrawn annually from a groundwater supply under a given set of conditions without causing an undesirable result.” City of Los Angeles v. City of San Fernando (1975)

“Undesirable results” = water quality degradation, seawater intrusion, land subsidence, or uneconomic use of groundwater

Continual drop in water levels over time, even after wet years, leading to undesirable results - City of Pasadena v. City of Alhambra (1949)

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What is the Effect of Overdraft on Groundwater

Rights?

Overlying Owners Entitled to Enjoin Appropriators (Junior Appropriators Reduced/Eliminated First)

Adversity Commenced for Purposes of Prescriptive Rights

Prescriptive Rights May be Obtained After Satisfaction of the Four Elements of Prescription (Actual, Open and Notorious, Adverse, Exclusive and Continuous for Five Years)

Nuances Apply

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Legal Rights to Store Water Underground

In California “Developer” of Stored Groundwater Has Exclusive Right to Recapture the Stored Groundwater – Los Angeles v. Glendale (1943) and Los Angeles v. San Fernando (1975)

Overlying Landowners Likely Cannot Exclude Water Developers from Storing Water Under Their Lands so Long as No Harm Occurs (County v. Park County Sportsmen’s Ranch (Colorado 2002))

In California There is Some Uncertainty Over Who Has Prior Right to Store in the Event of Competition for Storage Space (Central Basin Storage Conflict)

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QUESTIONS???

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Who Manages? State Local Public Agency Courts, Adjudications, and

Watermasters Joint Power Agency Voluntary Coalitions Trend is Management

Follows Scarcity Groundwater Management

Evolving – Often Starts with Reporting and Monitoring

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Adjudication

Can be 100’s or even 1000’s of Parties

Can take decades Can cost $$ millions

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Post Adjudication

Typically Well-Structured Rules

Watermaster – Often Composed of Stakeholders Board

Subject to Court’s Retained Jurisdiction

Clearly Defined Water Rights

Rights Typically Transferable

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Adjudication Challenges

Can be 100’s or even 1000’s of Parties

Can take decades

Can cost $$ millions

Could we legislate a more efficient process?

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Regulatory Restrictions What Constitutes

Reasonableness/Beneficial Use?

In-Stream Flow Requirements

Public Trust Doctrine

Are These Regulatory Restrictions Merely Boundaries on the Exercise of Water Rights or Are They Determinative Factors that Shape the Rights Themselves?

Amendment of State-Issued Permits?

Debate Continues . . . Casitas Municipal Water District v. United States (Fed. Gov. Held Liable for Physical Takings for Impairment of Water Rights)

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Public Trust Doctrine Origins in Roman Law

Traditionally Limited to Public Ownership of Submerged Land Under Tidal or Navigable Waters

Some State Have Expanded the Doctrine to into Water Use Context to Determine Whether a New Water Use is in the Public Interest

Some Application to Water in at Least 12 States: South Dakota, Idaho, Iowa, Minnesota, New Mexico, Montana, North Dakota, Oregon, Utah, Wyoming, California and Hawaii

Hawaii and California Go the Furthest.

A Few States (Hawaii, New Hampshire) Extend Doctrine to Non-Navigable Waters and Groundwater

Is Application of the Public Trust Doctrine to Water Withdrawal and Use Good Policy? Are There Better Alternatives?

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Federal Reserved Rights

Elements: (1) Federal Reserved Land, (2) Intent to Reserve Water, and (3) Only for Primary Purpose of the Reservation

Not Dependent Upon Historical or Continuous Use

Indian Reservations are Commonly Asserted Federal Reserved Right

Appurtenant to Benefited Federal Land; Cannot “Per Se” Transfer the Right

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QUESTIONS???

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Perspectives and Hot Issues

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Water on the Move

                                                            

                                                                                                                                                                                                                                                                                                                                                  

        

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Water in CaliforniaLooking Forward

Population Growth Climate Change Environment and In-Stream

Flow Requirements Fixing a Broken Delta

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Climate Change Impacts?

DWR, California Water Plan, 2005 Update

Precipitation/Runoff Timing Variable Quantity Location of Supply When?

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Energy Production Requires Water

Power Plant Cooling Hydropower Fuel Production (e.g.,

H2 and Biofuels) Mining and Refining Renewable Energy

Too

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Water Production, Treatment, and

Distribution Requires Energy

Pumping and Conveyance Desalinization and Treatment Conveyance (>3500 kwh per

acre-foot to deliver water from Delta to So. Cal.)

Wastewater Treatment ~19% of State’s Energy

Consumption

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Population Growth Will Challenge Water

Supplies

Projections for ~ 10 million Additional People in California to 48.1 Million by 2030

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Water for Consumption v.

Water For Environment

On Average, California Receives About 200 MAF/Year from precipitation and imports

Roughly 100 MAF/Year Available for Use by Urban (11%), Agriculture (41%), Environmental Protection (48%)

Human Consumption ~ 80% Agriculture and 20% Municipal and Industry

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Use of Water in California

Figure shows water usage from public water supply, minus use for industry and irrigation, divided by population taking public water (no well water included). Counties along the coast tend to use much less water per resident than inland counties.

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NAFTA and Water

Will CA/Southwest import (“steal”) water from northern locations?I doubt it . . . at least not any time soon

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Smarter Water Planning

Local (e.g., So. Cal) Wet Year Capture and Storage

Wet Year Transfers and Storage (e.g. Cross Delta)

Maximum Conservation (Ag and Urban)

Maximum Recycled Water

Maximum Conjunctive Use and Groundwater Storage

Consensual Ag to Urban Transfers. Many Win/Win Opportunities (e.g., Dry-Year Fallowing and Groundwater Substitution)

Regional Planning

Overcome the “Politics”

Anticipate Higher Prices

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Politics and People Water, Business

and Markets Water and the

Poor Drinking Water

Contamination

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Bottled Water: Resident Evil or False

Villain

Has Become a Recent Target

Recently in the Great Lakes Compact

Is Bottled Water a Distinguishable Water Product

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Improving California Water Law to Meet Evolving

Challenges

Advance Water Rights Certainty

Corral Correlative Rights (Riparian/Overlying Rights)

Foster Greater Opportunity for Conjunctive Use

Improve Transfer Market/Opportunities

Market-Based Credits as a Catalyst

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Transfers

Imperial Irrigation District Transfer to SDCWA, CVWD, and MWD Through MWD’s Colorado Aqueduct

Southern Nevada Water Authority - Pipe Up to 200,000 AFY of Groundwater from Clark, Lincoln and White Pine Counties (Up to 250 Miles)

Cross-Delta Conveyance (Aka, Peripheral Canal)

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Market-Based Exchanges

Ability to Trade “Credits” Established by Conservation and Augmentation Projects

Opportunity for Integrated Investment in Regional and State-Wide Water Supply

MWD System May be Ideal Opportunity

Larger, State-Wide Opportunities

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Got Storage?

Groundwater Storage (Local, Regional and State-Wide Opportunity)

More Surface Water Storage? Politics, Politics, Politics . . . Creative? (In-Delta Storage) Improve Opportunities and

Legal Certainty for Groundwater Storage

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Water and Our Future