"Who Owns the Water?
(Caution, it's a trick question):
Understanding the
Fundamentals of Water
Management Law
Russell McGlothlin
Brownstein Hyatt Farber Schreck rmcglothlin@bhfs.com
(805) 882 1418
1

2




Who/What Gets the Water?
Under What Conditions?
Are Policy and Law in Synch?
3


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.
4

~
5

6

7

8


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
9

10

11

12


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.
13

With Few Exceptions, All States
Apply Some Form of Beneficial and Reasonable Use Limitation on the Right to Use Water
14


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???
15

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 --
Chow v. Santa Barbara (1933);
Gin

Flooding of Fields to Kill Gophers --
Tulare Irr. Dist. v. Lindsay-Strathmore
Irr. Dist.
(1935)
16

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
17

Riparianism
Origins 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 2 nd
Restatement of Torts
18


Riparian Owner Possessed the
Right to the “Full” Flow of the
Stream “Undiminished as to
Quality or Quantity”

“Domestic” Uses Allowed

Pre-Industrial England
19


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
20

 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
21


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
22

 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
23


May Apply to Use Off of Riparian Tract

Defined by Historical Quantity of Use

Priority Based Upon First-In-Time, Firstin-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)
24

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
25

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
26

 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)
27

We Choose Both!!

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
28

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
29

30




Often Separate Law Applies
Historically Viewed as an
Occult
Groundwater Law Not as Well
Developed in Some States
31

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
32

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
33


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)
34

California
Percolating 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 -
Pomeroy (1899)
Los Angeles v.
35

36


Absolute Ownership/Rule of
Capture

Common Law Reasonable Use

Correlative Rights

2 nd Restatement of Torts § 858

Prior Appropriation
37

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
38


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), 2 nd Restatement of
Torts § 858 (3 States)
39





Landowner Can Produce Groundwater
Without Liability Unless the Withdrawal : a) Harms Neighboring Landowner’s
Groundwater Production; b) Exceeds Reasonable Share of Supply; or c) 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
40


Like Appropriative Rights to
Surface Water

Defined by Historical Quantity of Use

Priority Based Upon First-In-
Time, First-in-Right
41

California
Overlying 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
42

 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
43


Source Subterranean
Stream
Percolating
Groundwater
Type of Right

Riparian
Or
Overlying
Owner
Appropriator
44


Adverse Basin Effects

Prescriptive Rights

Ramp-Down

Doctrine of Intervening Public Use
45

46


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)
47

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
48

49

 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)
50

51








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
52




Can be 100’s or even 1000’s of Parties
Can take decades
Can cost $$ millions
53


Typically Well-Structured Rules

Watermaster – Often Composed of
Stakeholders Board

Subject to Court’s Retained
Jurisdiction

Clearly Defined Water Rights

Rights Typically Transferable
54


Can be 100’s or even 1000’s of
Parties

Can take decades

Can cost $$ millions

Could we legislate a more efficient process?
55


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)
56


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?
57


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
58

59

60

61

62





Population Growth
Climate Change
Environment and In-Stream
Flow Requirements
Fixing a Broken Delta
63





DWR, California Water Plan, 2005 Update
Precipitation/Runoff Timing
Variable Quantity
Location of Supply
When?
64






Power Plant Cooling
Hydropower
Fuel Production (e.g., H2 and Biofuels)
Mining and Refining
Renewable Energy Too
65






Pumping and Conveyance
Desalinization and Treatment
Conveyance (>3500 kwh per acrefoot to deliver water from Delta to
So. Cal.)
Wastewater Treatment
~19% of State’s Energy
Consumption
66

Projections for ~ 10 million
Additional People in California to
48.1 Million by 2030
67




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
68

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.
69

Will CA/Southwest import (“steal”) water from northern locations?
I doubt it . . . at least not any time soon
70


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
71




Water, Business and
Markets
Water and the Poor
Drinking Water
Contamination
72




Has Become a Recent Target
Recently in the Great Lakes
Compact
Is Bottled Water a
Distinguishable Water Product
73

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
74


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)
75


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
76






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
77

78