Partial forfeiture of water rights: Oregon compromises traditional principles to achieve flexibility.

• Author: Koehl, Krista

1. INTRODUCTION

   "Use it or lose it" is a fundamental tenet of the prior appropriation system of western water law.(1) Many western states have codified this common-law principle in their forfeiture statutes.(2) The forfeiture statutes provide that a water user who fails to use her water right for the statutory period, usually five consecutive years, loses that right.(3) Many western states also apply the forfeiture rule when part of the right has not been used for the statutory time period, so that the water user forfeits the unused portion of that right.(4) This policy is referred to as partial forfeiture. In 1997, the Oregon legislature enacted Senate Bill 869, which changed the partial forfeiture doctrine in Oregon to achieve flexibility and encourage conservation.(5)

   The Oregon forfeiture statute states that if an owner of a water right "ceases or fails to use all or part of the water appropriated :for a period of five successive years, the failure to use shall establish a rebuttable presumption of forfeiture of all or part of the water right."(6) In order to defeat the presumption and avoid forfeiture of all or part of the right, the owner must show that one of the statutorily defined defenses applies.(7) Senate Bill 869 added a new defense, applicable only to rebut the presumption of partial forfeiture.(8)

   The enacted law states that the user does not forfeit part of the right if "[t]he user has a facility capable of handling the entire rate and duty authorized under the right, and ... is otherwise ready, willing and able to make full use of that right."(9) This new legislation, which became effective October 14, 1997, essentially codified an earlier informal advisory letter from the Oregon Department of Justice to the Water Resources Commission regarding the partial forfeiture of water rights.(10) The Attorney General determined that the case law permitted irrigators to change cropping patterns without the threat of partial forfeiture.(11) The previous statute seemed to encourage wasteful use because a user might irrigate more water than a crop needed or grow a high-water-use crop simply to avoid losing part of that right. (12) However, the language of the new provision is not limited to this narrow context.

   The broad language raises two questions. First, does the new partial forfeiture defense apply to any situation, even if the irrigator cannot demonstrate that nonuse was due to a change in cropping patterns? Second, how will the new law affect other aspects of water rights, such as the incentive to use Oregon's conserved water statute,(13) as irrigators will no longer fear partial forfeiture? The amendment also creates uncertainty for current and future water appropriators: How will it affect transfers of water rights when the historical use is less than the paper right? What is the effect on junior users who grow up around the senior's actual use of water, when the senior user decides to exercise the full paper right?

   As one considers the practical implications, a broader issue also arises: Is this new law a step in the right direction, considering the traditional principles of water law in the West? Oregon's new partial forfeiture defense compromises two bedrock principles of western water law, "use it or lose it" and "beneficial use without waste," to accomplish flexibility and encourage conservation. Promoting water conservation is an important goal. However, the current statute assumes that "use less, have less" is a bad policy and unfair to irrigators.(14) This assumption is at odds with the principles of use it or lose it and beneficial use without waste. In contrast to Senate Bill 869, other western states continue to define forfeiture as a failure to beneficially use all or part of the right, adhering to the use it or lose it policy. Case law supports this policy and demonstrates that use it or lose it and beneficial use without waste are essential to the prior appropriation system to promote efficiency and optimal use of a scarce resource.(15)

   This Article suggests that the benefits of Oregon's new partial forfeiture defense do not outweigh the departure from the concepts of beneficial use without waste and use it or lose it. Part II of the Article briefly reviews the principles and policies of prior appropriation, particularly the use it or lose it doctrine. Part III compares Oregon's old forfeiture statute with the new statute, evaluates the legislative purpose of the statute, and discusses the meaning of the new statute. Part IV concludes that the legal rationale for the statute is weak, and, considering both the statute's practical implications and the policies of the prior appropriation system, the statute takes a step in the wrong direction, away from certainty and best use of Oregon's scarce resource.

2. FUNDAMENTAL PRINCIPLES AND POLICIES OF THE PRIOR APPROPRIATION SYSTEM

   A brief background in the basic principles and policies of western water law is necessary to understand the implications of Oregon's new law. Generally, states west of the 100th meridian are governed by the prior appropriation system, in contrast to the riparian system of the East.(16) The prior appropriation system originated in mid-nineteenth century mining camps, because the riparian system of the East was unsuited for the arid West.(17)

   In the East, water rights are appurtenant to the land adjacent to the water course.(18) If the settlers had used the riparian system of the East, location would have determined the existence of water rights, "regardless of the relative productive capacities of riparian and nonriparian lands."(19) Because water was scarce in the West and important to the miners' viability, the mining camps abandoned the riparian system and developed customary practices that emphasized principles such as "beneficial use" and "first in time, first in right."(20) These new rules were better suited for arid conditions, "affording protection to enterprises based on feasibility of diversion of water and application to lands whether or not contiguous to water courses."(21) The following fundamental principles developed from the miners' customs, which both the courts and state legislatures continue to recognize today: 1) first in time, first in right; 2) beneficial use without waste; and 3) use it or lose it.(22)

   1. First in Time, First in Right

      Water use in the West is governed by a priority system based upon the first in time, first in right principle.(23) The first person to divert water from the watercourse and put it to beneficial use has a right to continued use of the water.(24) When a water right is appropriated, the right acquires a "priority date," and all subsequent appropriations are junior rights.(25) In times of shortage, a senior user may "put a call on the river" to protect her right against the junior users.(26) Therefore, junior users may not use any water until the senior user has taken all of the water to which she is entitled.(27) This system of priority is completely opposite from the riparian system which requires sharing water in times of shortage.(28) The mining society developed this rigid priority system in order to ensure reliability for the more senior users.(29)

   2. Beneficial Use Without Waste

      A water right is limited by the concept of beneficial use.(30) A water right is not absolute: it is only a right to use water, or a usufructuary right.(31) Beneficial use encompasses two interrelated limitations to the usufructuary right: 1) quantity requirements, and 2) character of the use.(32) First, the quantity of the appropriated water right is expressed in terms of "beneficial use."(33) The water right is valid only for the amount of water actually put to beneficial use.(34) Therefore, the amount of water depends in part upon the purpose of the beneficial use.(35) In addition, wasted water is considered a nonbeneficial use; users do not have a right to waste water.(36) Second, beneficial use refers to the purpose or type of use. The use must fall "within a general category acknowledged to be beneficial."(37) Originally, these were limited to consumptive uses, such as mining, agricultural, industrial, municipal, domestic, stock-raising, and hydropower, which required the user to divert water from the watercourse.(38) Since the 1970s, courts and legislatures have redefined beneficial use to include nonconsumptive uses, or instream uses, such as recreational and environmental preservation.(39) Oregon led this trend.(40) and recognizes instream water rights for recreation, navigation, pollution abatement, and preservation of fish, wildlife, and other ecological values.(41) Further, a water right is applicable only for the particular category of beneficial use stated in each water right certificate.(42)

   3. Use It or Lose It

      The use it or lose it principle provides for the loss of the appropriated water if it is not put to a beneficial use.(43) The principle that a water right is lost if not beneficially used originated from the diligence rule of the early mining camps:

      The amount of water to which title could be obtained was limited to the amount needed for the purposes of use just as the extent of the mining claim was limited to the area the miner could work out in a reasonable time.... Diligence in construction of the diversion system and continued use were required to hold title to water just as similar standards in working the mine were required to hold title to it.(44) The early settlers adopted the diligence rule, use it or lose it, to promote beneficial use and certainty of water rights:

      Because water is so scarce and essential, the fullest beneficial use of water is not advanced where a right holder is permitted to continue to hold a water right through long periods of nonuse when other persons could make valuable use of the water to which the dormant right related. Similarly, new appropriators who make substantial investments in reliance on another's nonuse are...