Recent Developments in Water Rights

About the author: Jesse J. Richardson Jr. is lead land use attorney for the Land Use and Sustainable Development Law Clinic and associate professor of law for the West Virginia University College of Law. Richardson can be reached at [email protected].

Jesse J. Richardson Jr.

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The Water Systems Council recently released the fourth edition of Who Owns the Water, a 50-state review of groundwater rights in the U.S. The third edition was released in October 2009, and since that time, there have been a number of significant developments in groundwater rights across the country. This article focuses on four major recent developments in water rights: regulatory takings, increased federal assertion of water rights, restrictions on exempt wells and increasing conflicts between states.

Water Rights & Takings

A section on water rights and takings was added to the third edition of Who Owns the Water to address the court cases dealing with the issue of when government regulation infringes on private property rights. An Ohio Supreme Court decision in 2006 started the trend of increasing court battles over water rights and regulatory takings—a trend that has accelerated, with a number of notable cases decided since 2009. The Texas Supreme Court, in particular, has decided two significant takings cases involving groundwater. Both cases involved the Edwards Aquifer Authority. Federal courts also have decided important water rights cases centering on regulatory takings in recent years.

Regulatory takings may be proven in three ways. Two methods, referred to as “per se” takings, are less difficult to prove. The default method involves a balancing test and is extremely difficult to prove. Recent cases in federal and state courts have allowed landowners to use the “physical taking” argument, which is a per se taking. Environmental government agencies have fought the use of this method, but courts are increasingly approving of the theory. If this trend continues, government agencies may be forced to impose fewer regulations or compensate the owners of water rights for restrictions.

Federal Assertion of Water Rights

The federal government has increasingly asserted that it holds superior water rights in many cases. In some cases, the federal government has used the legal doctrine of “federal reserved water rights” to advance its cause. This doctrine holds that when the federal government sets aside land for a federal park, Indian reservation or other federal use, it impliedly reserves water rights sufficient to carry out the purpose of the federal reservation.

Although the doctrine is settled law, in recent years the federal government has attempted to expand its reach. For example, in a case in Arizona, the federal government and environmental groups assert that a developer should not be able to use groundwater for a housing development because the withdrawal of groundwater may interfere with federal reserved water rights. No data support this claim, and the extent of the federal reserved water rights are presently part of a large adjudication and have not yet been determined. The Arizona Court of Appeals recently rejected these claims in large part, but an appeal is expected.

The federal government also has asserted control over water involved in federal projects. A brief filed in the U.S. Supreme Court case of Texas v. New Mexico argues that the water that Texas and New Mexico both claim belongs to the federal government. This assertion is not the main focus of that court case, however, so the Supreme Court may not address the issue.

Exempt Well Restrictions

The third main development involves exempt wells in the West. “Exempt well” is a misnomer, since the term refers to groundwater withdrawals bound by less stringent regulations than other withdrawals under the prior appropriation (“first in time, first in place”) doctrine. Although these withdrawals, mainly for domestic or agricultural purposes, are allowed without proof of priority, senior appropriators and the government may issue calls on these uses. In the event of shortages, priority still applies in virtually every state.

The Supreme Court of New Mexico, in Bounds v. State of New Mexico, upheld the New Mexico domestic well statute in the face of a challenge by a senior water rights holder. Since Bounds, however, exempt well disputes have continued, most prominently in Montana and Washington state.

An environmental group successfully challenged Montana’s domestic well regulation in Clark Fork Coalition v. Tubbs. The exempt well issue has been bouncing between the administrative agency, the courts and the state legislature for several years. A compromise bill was passed, then vetoed by Gov. Steve Bullock prior to the Supreme Court of Montana decision. A new compromise bill has been agreed upon, and is expected to pass in the coming legislative session. However, a veto is again a distinct possibility.

In the recent Supreme Court of Washington case Whatcom County v. Hirst, a dispute continues over the roles of county governments and the state agency in regulating domestic wells. A series of court cases has dealt with the issue, each refining the analysis somewhat. In response to the decision in Hirst, some counties have issued moratoria on domestic wells, but many are unclear on how to move forward. Several bills are being considered for the coming state legislative session, and a plethora of other proposals have been put forth.

Exempt well issues involve land use and growth management, as well as water rights. This combination adds to the emotion and difficulty of these cases. Exempt well issues likely will continue to dominate the water debate in the West for years to come.

Conflicts Between States

Finally, states increasingly are involved in high-stakes debates over water rights. At present, at least three major water cases are before the U.S. Supreme Court. First, Texas and New Mexico dispute respective responsibilities under the Rio Grande Compact. Groundwater rights are implicated, as one of Texas’ claims is that wells near the river have removed water that should be delivered to Texas. The federal government also has staked claims on the water involved.

In another interstate dispute over groundwater, Mississippi claims that Tennessee has literally stolen its groundwater. The parties are arguing that case before a special master, and important decisions are likely to come forth in 2017.

Last, and certainly not least, the longstanding battle between Alabama, Florida and Georgia over water rights has produced a number of court decisions in the lower courts. The U.S. Supreme Court urged Florida and Georgia to find common ground in the case pending before it by Jan. 26. Important decisions are likely to be made in that case in the near future as well.

Although many other water rights issues are being debated, this article summarizes four of the major developments. 2017 looks to be a year in which some answers will become apparent in many pending cases. However, more questions likely will be raised, meaning that the debates will rage on for many years to come.