State Water Ownership and the Future of Groundwater Management.

• Author: Ayres, Samuel T.

NOTE CONTENTS INTRODUCTION 2217 1. THE DOCTRINE OF STATE WATER OWNERSHIP IS UNSETTLED AND CONFUSED 2228 A. State Ownership Claims Originated as Inward-Facing Attempts to Bolster State Control of Water 2229 B. As Water Ownership Claims Were Turned Outward, the Supreme Court Limited Their Reach--But a Key Question Remains 2242 1. The Settled Limits of State Water Ownership 2242 2. The Unresolved Confusion Over State Ownership 2245 II. STATES CAN OWN GROUNDWATER FOR PURPOSES OF STATE LAW 2253 A. States' Almost Unfettered Authority to Define the Property Character of the Water They Control Allows Them to Assign Ownership to the State 2254 B. The Supreme Court Has Recognized--Not Abrogated--States' Authority to Characterize Groundwater as State-Owned Subject to Certain Limits 2263 l. The History and Holding of Sporhase 2263 2. Misreading Sporhase 2266 C. Qualified State Water Ownership Is--or Should Be--a Limited, Inward- Looking Possessory Interest 2273 l. The Basis of State Water Ownership 2274 2. The Difference Between State Water Ownership and Other Forms of State Resource Ownership 2275 3. The Extent of State Water Ownership 2277 4. The Nature of the Property Interest 2279 5. State Water Ownership and Private Rights 2281 III. REJECTING QUALIFIED STATE OWNERSHIP COULD IMPERIL STATES' ABILITY TO CONSERVE GROUNDWATER 2284 A. Denying State Ownership Could Lead to More Successful Takings Claims 2289 1. State Ownership as a Stronger Background Property Principle When Read Literally 2293 2. State Ownership as a Safe Harbor in Physical Takings 229s B. Denying State Ownership Could Let Insurance Companies Avoid Pollution Remediation 2299 C. Denying State Ownership Could Thwart States' Ability to Stop Groundwater Theft 2304 IV. ACKNOWLEDGING QUALIFIED STATE OWNERSHIP WILL NOT IMPAIR GROUNDWATER LAW OR POLICY IN OTHER WAYS 2310 A. Recognizing State Ownership Will Not Muddy Water Doctrine 2310 B. Recognizing State Ownership Will Not Empower States to Deprive Tribes of Their Water 2313 C. Recognizing State Ownership Will Not Exacerbate Interstate Water Conflicts 2318 1. Background on Mississippi v. Tennessee 2318 2. Mississippi's Claim 2321 3. A Missed Opportunity to Clarify State Ownership 2322 CONCLUSION 2325 "Whence comes this ventriloquism which maketh the constitution say that which it sayeth not? The constitutional provision... is made to mean only that water can not be owned by any one because it can not stand still!" (1) INTRODUCTION

Consider three recent scenes from the drought gripping the American West. (2)

Over the past decade and a half, industrial farming operations have bought up tens of thousands of acres in the Arizona desert for a simple reason: to pump up as much groundwater as they can--and then leave. (3) No law will stop them from sucking the aquifers dry. While no state west of the Hundredth Meridian is more reliant on groundwater, (4) Arizona allows users in these regions to pump as much as they can put to "reasonable use," which includes farming. (5) Lured by the lack of regulation and long growing season, Saudi and Emirati dairy companies have turned huge swaths of desert green, raising hay to feed cows back in the Gulf. (6) Pecan and pistachio conglomerates have planted tens of thousands of acres of nut orchards. (7) In regions that follow the "law of the largest pump," these companies brought the biggest. (8) Fearing the aquifers' impending depletion, typically regulation-averse farmers and politicians have sought increased oversight, to no avail. (9) Under the continued strain of climate change, Arizona might yet change course by restricting groundwater pumping, or even revamping the legal regime that governs groundwater property rights. If it did, could the dairy and nut agribusinesses claim that Arizona has effected a taking and so must compensate them for the value of their lost water?

For years in eastern Montana, a Louisiana company allegedly dumped toxic waste generated by oil and fracking operations in the Bakken. (10) During the oil boom at the time, operations in North Dakota alone produced millions of tons of chemical- and oil-saturated earthen waste, and an untold amount of radioactive material. (11) The Louisiana company dumped the waste near homes, an area with a particularly high water table. (12) Montana sued the company, seeking heavy fines and demanding it pay for cleanup. (13) In turn, the company's insurers went to court to avoid having to cover these costs. (14) If, in a situation like this, (15) the company were found to have polluted groundwater in the area, would its liability insurance policy cover the loss ?

And last summer, as California's agricultural valleys budded under drought, water thieves ran rampant. (16) They sucked water from whatever source would yield it--including groundwater wells. (17) In response, law enforcement tried to use drones and satellite imagery to track trucks carrying conspicuous water tanks in their beds. (18) It was a losing battle. Even as farmers obeyed state orders to cut back, they reported that illegal overpumping of groundwater was "lowering production in their wells." (19) Water theft of this kind has been reported everywhere from Colorado to eastern Washington. (20) Perhaps officials in these states will want to rely on their states' criminal codes to prosecute this for what it is: theft. Could they?

In each of these scenarios, this Note contends that the question of whether states can own their groundwater is both important and overlooked. In response to this perennially muddied legal question, this Note argues for a crystal-clear doctrine of qualified state ownership. (21) The stakes of this inquiry are high: if states do not own their groundwater, private takings claims would be more likely to succeed, and states would be more hesitant to restrict pumping; (22) insurance companies would have to pay fewer claims; (23) and states would be unable to prosecute groundwater theft under their larceny statutes. (24)

Groundwater is poised to become even more important. In the coming decades, the United States--especially its arid West (25)--stands to become hotter, drier, and more populous. (26) These changes, driven in part by climate change, will continue to strain the country's already stressed water resources. (27) Continuing a trend that has intensified since the mid-twentieth century, the country will have to go underground to satisfy its water needs. (28)

As climate change increases our reliance on groundwater, it will reduce the amount available. Hotter temperatures deprive aquifers of the snowpack they need to recharge, and rising seas threaten to poison coastal groundwater with salt. (29) Storms and wildfires leave contaminated wells in their wake. (30) And erratic weather and punishing droughts--like the one that now afflicts ninety percent of the West--exacerbate the overpumping problem, as communities frantically drill wells to replace the vanishing rivers and reservoirs. (31)

For the foreseeable future, the heavy burden of aquifer management will fall primarily on states. (32) Groundwater is notoriously difficult to manage, (33) and the patchwork of often-antiquated state laws that govern private use of groundwater frequently permits overpumping. (34) As a result, from the High Plains to the agricultural valleys of California, (35) groundwater supplies are being depleted at alarming rates. (36) Some--like the Ogallala Aquifer servicing much of the High Plains--will never replenish. (37) The question of whether states can own the water within their borders sporadically bubbles to the surface of water law. (38) Foreshadowing a future of increased competition over water above and below ground, (39) the Supreme Court this Term decided the first-ever interstate groundwater dispute. (40) Mississippi sued Tennessee claiming that it was the victim of a "heist." (41) Mississippi alleged that Tennessee and Memphis, through the city's water utility and at the direction of the state, were taking Mississippi's groundwater from wells on the Tennessee side of the border. (42) This claim, and the more than fifteen years of litigation it launched, (43) proceeded from an assertion that the people of Mississippi own all the groundwater within the state's territory. (44) As Mississippi v. Tennessee was the first contest between states over an aquifer, commentary on the case understandably focused on how it would shape interstate water disputes in the decades ahead, (45) largely ignoring how the Court's handling of Mississippi's ownership claim might affect water management within states. This Note aims to fill that gap.

Like Mississippi, many states, particularly those in the West, declare by constitutional provision or statute that the people of the state or the state itself owns the waters within its territory. (46) Such pronouncements might be read as merely shorthand for individual states' authority to regulate a resource that no one owns. Or they might mean what they say: the people of a particular state have a proprietary interest in its water, including its uncaptured groundwater. (47) To endorse this second option is to affirm "state ownership."

One thing is clearly settled: claims of absolute state water ownership--good against all comers and in all legal contexts--are invalid. Most importantly, this means that a state's claim to own its water is largely meaningless beyond its borders. Although state ownership claims originated as inward-looking attempts by new states to assert control over their surface water, states soon turned these claims outward in disputes with other states and with the federal government. (48) However, early in the twentieth century, the Supreme Court held that state ownership claims are irrelevant when it comes to surface-water contests. (49) When it rejected Mississippi's ownership argument in Mississippi v. Tennessee this Term, (50) the Supreme Court harmonized groundwater and surface-water...