CHAPTER 7 WATER RIGHT LITIGATION1
| Jurisdiction | United States |
(Dec 1989)
WATER RIGHT LITIGATION1
White & Jankowski
Denver, Colorado
Water right litigation falls into two categories. Fairly straightforward, simple matters which are often uncontested. A small remainder, the extraordinarily complex and contested matters addressed in this paper.2 About this small residue, only one universal truth exists — each case is time-consuming and expensive. Legal and factual issues are convoluted; trial preparation takes a long time. Stakes are high; litigators and their clients are justifiably cautions. Most importantly, the rules of the game, the substantive and evidentiary law, are in the midst of change.
CONTENTS
I. Types of complex water right litigation
A. Based on federal law
1. Reserved water rights
2. Interstate compacts
3. Equitable apportionment
B. Based on state law
1. Establishment of water rights
2. Manipulation of existing water rights
3. Enforcement and regulation of water rights
4. Abandonment and forfeiture of water rights
C. Based on local governmental regulation
II. Tidbits of Trendy Gossip—a selection of contemporary problems in complex water litigation
A. Elements of proof, i.e. what in the world constitutes a prima facie case?
B. Trial strategy—balancing the "facts," evolving jurisprudence and the fickle winds of "public" policy—what are the real issues?
C. The role of professional (career and inhouse) expert
III. Conclusion
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I. Types of complex water right litigation
What kind of cases are we talking about? It is helpful to view them in terms of the source of the law3 upon which claims and defenses may be based: federal, state and local. For many years, water right issues were considered to be questions purely of state law. Since World War II, however, the federal role has increased dramatically. In addition, during the past few years, in an effort to respond to environmental and economic concerns of their constituents, local government officials have stuck in their oar as well. What follows is not an exhaustive listing of complex litigation issues. They are, however, those which seem to dominate the current legal scenery.
A. Based on federal law
The federal influence on complex water litigation is usually based on the assertion of water right claims by the United States itself or on the existence of doctrines of federal law affecting the rights of others.
1. Reserved water rights
During this century, extensive water rights have been awarded to the United States throughout the public domain states. Initially,4 water rights were implied when the United States reserved a parcel of land for an Indian reservation. Eventually, "reserved" rights were recognized for the amount of water necessary to carry out the primary purpose of any federal reservation of land. Those land reservations typically were made early, preceding or simultaneously with the issuance of patents to private persons for nearby lands. Because a reserved right carries a priority as of the date of the land reservation, it is usually more senior than water rights obtained under state law. Consequently, the existence of federal reserved rights, together with the amount of water associated with those rights, are critical issues on most western stream systems and spawn remarkably complex litigation.5 For example, the water rights of forty-seven Indian reservations are now being determined in nine western states, in which thirty-two general adjudications are underway, involving a total of 650,000 water right claims by 265,000 parties.
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2. Interstate compacts
Since most western rivers cross state boundaries, those states frequently enter into compacts, approved by Congress, under which the states agree among themselves how the water is to be divided between their users.6 As with any contractual arrangement, especially one couched in governmental prose, the passage of years allows disputes to germinate. Disputes between states concerning the meaning or application of compact language are generally heard by the United States Supreme Court (or its master) under the Court's original adjudication. Recent litigation includes that between Texas and New Mexico over the Pecos River Compact,7 between Colorado and Kansas over the Arkansas River Compact,8 and by Oklahoma and Texas against New Mexico over the Canadian River Compact.9
3. Equitable apportionment
In the event that states are unable to agree on the allocation of interstate waters, they may seek relief as between themselves under the United States Supreme Court's original jurisdiction. In that event, the Court fashions an equitable remedy. Such a dispute between Wyoming and Nebraska is now before the Court.10
B. Based on state law
Water right litigation is frequently thought of as being a specialized area of practice for each state. While the emergence of litigation based on federal law or local governmental regulations is ever increasing, private parties still obtain water rights primarily under state law. Complex litigation in state courts or before state agencies generally involve matters such as the establishment of water rights, the manipulation of existing water rights to meet new needs, the enforcement and regulation of water rights by the state, and abandonment or forfeiture of water rights.
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1. Establishment of water rights
Among the various states, there are a variety of approaches to obtaining water rights.11 Among the western states, however, water rights, for the most part, are obtained under the prior appropriation doctrine.12 Within that doctrine are at least two jurisdictional variations, the mandate version and the permit version of the prior appropriation doctrine. In mandate states, such as Colorado and Montana, water rights are obtained by individual actions, then confirmed by court decree in water right adjudication. In the permit states, water rights are generally obtained by state administrative actions—generally in the form of approval of the water right permit application—from which judicial review is available.13 Of course, after the water right is established, it is not at all unusual for disputes to arise over the meaning of the decree, certificate, or permit. Those are usually resolved by declaratory judgment.14
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2. Manipulation of existing water rights
In many parts of the West, the most valuable water rights were obtain a hundred years ago, primarily for agricultural purposes. Today, however, market forces dictate that those water rights can be more profitably used for municipal or industrial purposes. Consequently, an active water rights market has been established. Once existing water rights are acquired, however, it becomes necessary to in some way change them from their original purpose to the currently desired purpose, all without losing their original priority date. That manipulation of existing water rights takes a number of forms, including simply changing the place, type, or timing of use, the creation of a plan of augmentation or substitute supply, exchanges of water rights, etc.15
3. Enforcement and regulation of water rights
As stream systems become fully developed, conflicts inevitably arise over the use of their water. The prior appropriation doctrine is simple in concept, the owner of the senior priority is satisfied first. With tens of thousands of water rights on a major river, however, the opportunity for conflict is seldom overlooked. Consequently, enforcement actions against water users who are taking water out of priority are becoming increasingly common. Typically, enforcement actions are brought by state administrative officials who are charged with the administration of the priority doctrine.16 As an adjunct or aid to that enforcement, those state officials, typically the state engineer, may promulgate rules and regulations for the use of water within a river system. By doing so, the state is often able to ease its enforcement burden of proof. In a straightforward enforcement action, the burden lies on the state to establish that diversion of water is not only out of priority and is causing material injury to senior water rights. On the other hand, in seeking to restrain a violation of rules and regulations, the burden of proof is easily shifted to the water user to show that he is not in violation of the
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adopted rules and regulations.17 Enforcement actions also may be brought, of course, by other water users seeking injunctive relief.18
4. Abandonment and forfeiture of water rights
Although frequently used interchangeably, "abandonment" and "forfeiture" usually have distinct meanings. Abandonment typically occurs where a water user no longer desires to use his water right and stops doing so. Subsequently, he or his successor may attempt to resurrect the water right. In that case, other water users who have grown to rely on the water frequently bring an abandonment action.19 On the other hand, many states have forfeiture statutes providing that non-use for a specified period of time will cause the water right to be lost or forfeited. Under those statutes, it is usually state administrative officials who bring actions seeking the forfeiture or cancellation of an unused water right.20
C. Based on local governmental regulation
Many local governments, particularly counties, have grown frustrated with state water law systems which provide a playground only for water users. Viewing water as an important resource within their county, officials frequently desire to preserve or protect the water-based environment. To do so, the local jurisdiction will adopt regulations which nominally regulate the construction of water facilities but which, as a practical matter, have the intended effect of limiting diversions of water to the locations outside the...
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