CHAPTER 8 WATER RIGHTS LITIGATION FOR THE NATURAL RESOURCES PRACTITIONER

• Jurisdiction: United States

Natural Resources & Environmental Litigation II
(May 1996)
CHAPTER 8
WATER RIGHTS LITIGATION FOR THE NATURAL RESOURCES PRACTITIONER
John B. Draper
Montgomery & Andrews, P.A.
Santa Fe, New Mexico

TABLE OF CONTENTS

SYNOPSIS PAGE

I. INTRODUCTION

II. APPROPRIATIVE WATER RIGHTS LITIGATION

A. Procedural Contexts

1. Basinwide Adjudications

2. Initiation and Modification of Water Rights

3. Private Suits

B. Issues: Old and "New"

III. INTERSTATE WATER LITIGATION

A. Allocation

B. Enforcement

IV. ENDANGERED SPECIES ACT ISSUES IN WATER RIGHTS LITIGATION

A. Potential Impact on Instate Litigation

B. Potential Impact on Interstate Litigation

V. FEDERAL RESERVED WATER RIGHTS LITIGATION

A. Indian Reserved Rights

B. Non-Indian Reserved Rights

C. Procedural Issues

1. McCarran Amendment

2. Federal Settlement Efforts

VI. CONCLUSION

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I. INTRODUCTION¹

^{This paper is intended to give an overview of the substantive issues and peculiar procedural issues that appear in current water rights proceedings. Other papers of this special institute address developments in the rules of procedure and evidence, the use of expert witnesses, and trial strategies in general. It will therefore be the province of this paper to treat the special features of water rights proceedings that may differ from other natural resources court and administrative proceedings.}

^{II. APPROPRIATIVE WATER RIGHTS LITIGATION2}

A. Procedural Contexts

Proceedings involving the creation, transfer, modification, determination, and protection of water rights based on the doctrine of prior appropriation generally arise in three settings: water rights adjudications in state or federal court, permit proceedings before state agencies or commissions, and private suits for declaratory judgment, damages or injunction in state or federal courts.

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1. Basinwide Adjudications

General state stream system adjudications occur in most of the western states, but the form that they take varies.³ In New Mexico, stream adjudications may be initiated by the State Engineer or by a private person or entity.⁴ Such adjudications may be brought in either state or federal court if they involve federal rights.⁵ The State Engineer Office performs a hydrographic survey,⁶ on the basis of which the State Engineer makes an offer of judgment to each potential water right claimant. Once the existence and scope of a water right are established by agreement or trial as between the State Engineer and the claimant, that subfile order is subject to inter se objections from all other claimants.⁷ The inter se phase is typically accomplished for the whole basin or subbasin at a time. Special inter se proceedings are sometimes allowed with respect to large water rights claims, such as those of an irrigation district or an Indian tribe. Interlocutory appeals are common. Larger adjudications have proven very difficult to bring to a final conclusion.⁸

In Colorado, since the enactment of the Water Right Determination and Administration Act of 1969, adjudication of surface and groundwater rights has been the duty of the Division Water Courts established by the Act. A water court was established for each of the seven major drainage basins of the state, and a water judge was designated from among the state trial court judges in that division.⁹ Previously, piecemeal adjudications by the trial courts of general

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jurisdiction of surface water rights had taken place, often confined to particular parts of streams, with the earlier adjudication being given wholesale priority over the later.¹⁰ At the same time, ground water right claimants were given the opportunity and the obligation to file by 1972 to have their well rights adjudicated with a priority date as of the date of first appropriation.¹¹ The structural differences between Colorado and permit states, like New Mexico, have resulted in different mechanisms for controlling existing ground water pumping. In Colorado it tends to be attempted by state engineer regulations,¹² while in New Mexico it is attempted primarily in the adjudication court.¹³

2. Initiation and Modification of Water Rights

In addition to court proceedings to define existing rights, i.e., the stream adjudications just discussed, the ongoing administration of water rights necessitates either court or agency proceedings in which such matters can be heard and the owners of existing water rights may be afforded due process protections. All prior appropriation states except Colorado have an administrative permit procedure.¹⁴ In the permit states, no water right can be initiated without a permit.¹⁵ New Mexico accomplishes this in administrative proceedings before the State Engineer after notice and protest¹⁶ from which there is a de novo appeal to the trial courts of general jurisdiction.¹⁷ This applies to both surface and ground water, and it applies not only to efforts to establish new water rights but also to change point of diversion, place of use, and type of use.¹⁸ These proceedings, given the full and over-appropriation of many stream systems, will typically require dedication of offsetting water rights to avoid injury or impairment

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of prior water rights. A specific right of replacement was enacted in 1980.¹⁹ In addition to water rights, the State Engineer's approval must be obtained to engage in mine dewatering, which is not considered a beneficial use (nor is it waste) in New Mexico.²⁰

In Colorado, the determination and modification of surface water rights is a matter for the division water courts in proceedings in which the State Engineer is typically a party. Tributary ground water rights are established and modified, however, in proceedings before the State Engineer directly, with appeal to the courts.²¹ Ground water rights in designated ground water basins are established and modified by applications to the Colorado Ground Water Commission²² , with appeals to the courts.²³ The Ground Water Commission itself establishes designated ground water basins.²⁴

The standards for establishing new rights or transferring the point of diversion, place of use, or type of use, of existing rights is typically that there be no injury to existing rights by reason thereof. Absent such injury, however, there is typically a constitutional right under state constitutions to make such changes in the water right as the owner may desire on the basis that a water right is a property right and entitled to constitutional protection. The focus, nevertheless, of most such proceedings is whether injury or impairment will be visited upon other rights by reason of the granting of the application. Objections of this nature can be met by the applicant by proposing what is variously called an augmentation plan, a mitigation plan, a plan of replacement, or simply a dedication of offsetting water rights. The adequacy of such offsets, as to their timing, amount and location, is often hotly contested.

Computer modelling is often resorted to in order to assess the sufficiency of offsetting augmentation or mitigation plans. Thus, the contested issues often revolve around the reliability of the applicant's model and the conclusions of his experts with regard to the sufficiency of the offsets.

The computerized hydrologic model has become an increasingly common element of water rights litigation. Outside of private lawsuits, juries are uncommon. Usually, the facts are tried to an administrative expert such as a state engineer or to a water judge who has extensive experience in trying water cases. Having an expert trier of facts allows a more efficient presentation of evidence and tends to minimize the lawyerly theatrics that might otherwise occur. This is not to say that the presentation of expert evidence, including computerized hydrologic

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models, to an expert trier of fact, is always without drama. Few things are more dramatic than the presentation of the ultimate hydrologic quantifications in a case or the revelation of an unjustified assumption or significant mistake in the other side's modelling or analysis. A lawyer must always work closely with his or her experts, both to develop one's own case and to adequately analyze and cross-examine the other side's case. If possible, it is always good to work with someone who has testified before and has a track record of thoroughness, the ability to explain himself, and a resilience to cross-examination.

One of the most useful things that a lawyer can do in preparing for a water rights trial or hearing is to come to a thoroughgoing understanding of the technical issues related to one's own case and to that of one's opponent.²⁵ In fact, it is critical that the attorney come to such an understanding as early as possible in the preparation of the case. Often the interplay between the legal view point of the lawyer and the technical view point of the expert will lead to refinements of position that neither person could come to alone.

3. Private Suits

In addition to the regulatory and adjudicatory proceedings that arise out of state water codes which are discussed above, common law causes of action continue to be available. That is, the enactment of water codes which have the primary purpose of protecting existing rights is not considered to have displaced the previously existing causes of action that a prior water right owner might have had.²⁶ Thus, in New Mexico, a domestic well owner has a cause of action for damages against a subsequent irrigation well nearby, despite the fact that the plaintiff had an opportunity to participate in the permit proceeding for the later right and failed to do so.²⁷ This is true in most other western states, as well, but it does beg the question whether a cause of action outside the administrative scheme exists. Injunctions will also lie to ensure continuing protection of prior rights.²⁸

B. Issues: Old and "New"

It may be...