CHAPTER 9 EXAMINATION OF TITLE TO WESTERN WATER RIGHTS

• Jurisdiction: United States

Mineral Title Examination III
(Feb 1992)
CHAPTER 9
EXAMINATION OF TITLE TO WESTERN WATER RIGHTS
Scott L. Campbell
Davis Wright Tremaine
Baise, Idaho

TABLE OF CONTENTS

SYNOPSIS

Page

Overview of the Nature of Water Rights in the Western United States -- Surface Water

Usufructuary Right

Riparian Rights Doctrine

Historical Basis

American Origins

Statutory Modification of Common Law

Elements of the Riparian Rights

Transfer of Riparian Rights

Prior Appropriation Doctrine

Historical Basis

Elements of the Doctrine

The Dual System of Water Rights

Prior Appropriation States

General Theories

California Theory

Oregon Theory

Colorado Theory

California Oregon Power Case

Texas Doctrine

Riparian Doctrine Rejected

Dual System States

Administrative Permit Systems

History and Operation

Constitutional Validity

Procedure

Notice

Nature of Permit

Review of Administrative Decision

Public Interest Restriction

Public Interest Denials

Public Trust Doctrine

General

New Rights

Existing Water Rights

Intent to Appropriate

Demonstration of Intent

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Relation Back Doctrine

Administrative Decision

Diversion of Water

Physical Diversion

Instream Flows

Beneficial Use

Historical Basis

Diversion System

Waste

Water Right Transfers

General Concepts

Appurtenancy Requirements

Protection of Junior Water Rights

Beneficial Consumptive Use

Loss of Water Rights

Abandonment

Forfeiture

Defenses to Forfeiture and Abandonment

Prescription

Water Quality Limitations on Water Rights

Overview of the Nature of Water Rights in the Western United States -- Groundwater

Prior Appropriation Doctrine

States

Constitutional Validity

Exempt Groundwater

Regulation of Priorities

Ground/Surface Right Conflict

Critical Groundwater Area Designations

Reasonable Pumping Levels

Groundwater Mining

Regulation

Conjunctive Management of Surface and Groundwater Rights

Generally

Colorado

New Mexico

Water Rights Adjudications

Introduction

Nature and Function

McCarren Act

General Adjudication

Nature of Proceeding: Administrative or Judicial

Jurisdiction

Joinder

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Notice

Evidence of Water Use

Hydrologic Surveys

Notice of Claim

Evidentiary Status

Federal Claim Status

Entry of Decree

Basic Title Examination Considerations

Separate Ownership of Land and Water Right

Sale or Assignment of Water Right

Conveyance of Land with Appurtenances

Reservation of Water Right

Conveyance of Water Rights Separate From Real Property

Transfer of Water Rights Represented by Mutual Irrigation Company Stock Certificates

Mortgage of Water Right

Requisite Elements for Valid Conveyance

Assignment of Water Permits

Executed Parol License

Privity of Estate between Claimant and Original Appropriator

Documents of Title to Water Rights

Real Property Records

Deeds

Abstracts of Title

Notice of Claim -- Posted Notice

Court Records

Decrees of Adjudication

Transcripts

Clerk of the Court

Administrative Agency Record

Applications for Permit

Water Permit

Licenses

Transfer Application/Approvals

Decrees

Water Master Records -- Annual Reports

Adjudication Claims

Miscellaneous Documents

Bureau of Land Management

U.S. Bureau of Reclamation

Irrigation District/Canal Company Records

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The purpose of this paper is to provide an overview of the nature of water rights in the 19 western states¹ and a review of issues commonly encountered in evaluations of title to water rights. The discussion will include an examination of the fundamentals of ownership of water rights, the historical basis of the prior appropriation doctrine, a distinction between the prior appropriation states and the states utilizing a blend between prior appropriation and the riparian doctrine. This paper will also examine the administrative basis for creation of water rights, including a discussion of the public interest limitation as well as the concepts of beneficial use, transfer of water rights, and loss of water rights.

While the primary focus of the paper is surface water rights, the nature of water rights as it pertains to ground water will also be discussed. In this portion of the paper the prior appropriation doctrine will be analyzed, together with the concepts of enforcement of priorities, ground water mining, and conjunctive management of surface and ground water rights.

The paper will also include a discussion of the procedure for water rights adjudications. This discussion will include a review of the McCarren Act,² the nature of the proceedings, the jurisdiction of the court, evidence of water use, and entry of a decree.

Finally, the paper will discuss basic title examination considerations and the specific documents of title to water rights. This discussion will include a review of the pertinent real property records, court records, administrative agency records, and miscellaneous documents.

This paper is not intended to be a comprehensive dissertation on the topics described above. Instead, it will endeavor to provide a basic overview of the fundamentals of western water law and the basics of title examination of water rights. Because a core level understanding

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of the fundamental elements of water rights is necessary to appreciate the corollary elements of title, the paper will begin with a discussion of those fundamentals.

OVERVIEW OF THE NATURE OF WATER RIGHTS IN THE WESTERN UNITED STATES — SURFACE WATER

.Usufructuary Right

All western states declare that surface waters are public or owned by the state in trust for the people of the state and are open to appropriation for beneficial use.³ In essence, acquisition of a water right, by any of the various mechanisms, creates only a right to use the water, subject to certain conditions specified by case law, statute or regulation. Title to the water itself is held by the state, in trust, for the benefit of its citizens.⁴

Unlike property rights in other resources such as land and hard-rock minerals, water rights are incomplete property rights. Water resources can be classified as either stock or flow. An aquifer which is depleted in excess of the annual rate of recharge is classified as a stock resource and a surface stream is a flow resource.⁵ The fixed or variable quantity of the source gives society a strong interest in how the resource is allocated among different users over time.⁶ Additionally, defining the amount of the resource that will be available for use on a constant basis is impossible. As a result, any claim to water sources must be somewhat temporary or subject to reduction. Essentially, it is difficult to define exclusive property rights in water compared to real property because of the contingent nature of the ability to use the resource.⁷

RIPARIAN RIGHTS DOCTRINE

.Historical Basis

The courts and legislatures in the 19th century developed water law concepts on the basis of capture, either by land ownership or direct appropriation, with subsequent legislative

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clarification of the ground rules of capture.⁸ Roman law, with its emphasis on classification, divided things into two categories: owned or unowned. Things common to all, such as air and running water were classified as res communes or res nullius, things owned by no one.⁹ Anything in the res communes or res nullius category was considered to be part of the negative community. Things in the negative community could not be privately owned without some further act of appropriation.¹⁰

The common law adopted the Roman law classifications to establish the principal that no one could obtain title to water, but could only obtain a usufructuary privilege to use the water of a stream.¹¹

The common law ultimately classified water as "publici juris" to allow the state to modify the common law. The idea of the negative community was then characterized as the act of ownership of water in trust for the public.¹²

AMERICAN ORIGINS

The present day doctrine of riparian rights arose in America in the late 18th and early 19th century, when controversies concerning the development of mill power resulted in the adoption of the doctrine. The 1827 decision of Tyler v. Wilkenson¹³ is usually credited with the introduction of riparian rights in the American legal system.¹⁴

In Tyler, the court declared that all riparian owners had equal rights to the river and that no one "has a right to diminish the quantity which will, according to the natural current, flow to the proprietor below, or to throw it back upon a proprietor above." This statement is usually

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cited as the origin of the natural flow theory.¹⁵ This "natural flow theory" was qualified by the restriction that there may be a reasonable diminution of the flow.

The riparian rights doctrine has been under virtual constant attack in the western United States since its adoption. Riparianism was extensively debated in California in the late 19th and early 20th century. There was concern that the doctrine would block access to water and allow monopolization of the resource.¹⁶ California and other dual system states solved this by allowing the appropriation of surplus water.¹⁷

STATUTORY MODIFICATION OF COMMON LAW

The common law of riparian rights has been modified by legislation, as water has been viewed as more scarce in relation to competing demands, and the need to manage its use has increased. At first, states modified the common law of riparian rights to eliminate sources of uncertainty which constituted impediments to the construction of desired water resource projects.¹⁸ One of the early forms of water rights regulation was a statute to remove the common law constraints on multi-purpose project development.¹⁹

.Elements of the Riparian Rights Doctrine

A riparian right is a right to use a portion of the flow of a water course that arises by virtue of the ownership of land bordering a stream.²⁰ The word riparian is derived from the Latin "repa" which means...