Taking groundwater.

• Author: Owen, Dave
• Position: II. Groundwater, Takings, and the Courts B. Key Lessons from the Cases through Conclusion, with footnotes, p. 280-307

2. Key Lessons from the Cases

   While the geographic distribution and growing number of groundwater/takings cases are both intriguing, the more important lessons from the cases arise from their reasoning and outcomes. Below, I describe several of the central themes.

   1. Groundwater Use Rights as Property

      One of the first lessons from the cases involves the status of groundwater use rights as constitutional property. In the American legal tradition, and particularly in the American west, water rights are commonly thought of as a subspecies of property rights, and lawyers commonly believe--or sometimes simply assume--that those rights are subject to constitutional protection. (172) Nevertheless, in recent years, a few commentators have questioned that assumption. (173) They raise a mix of assertions, arguing both that water rights are not uniformly established as constitutional property and that constitutionalized water rights are unjustified in theory and harmful in practice. (174) Similar claims sometimes emerge in litigators' briefs. In the Day litigation, for example, some amici argued that constitutionalizing a property right to in situ groundwater would sound the death knell for sensible regulation. (175) That view also finds some support from comparisons with the laws of other countries. Many have effectively rejected regulatory takings protection for groundwater use rights, or for property rights more generally, without losing their ability to support advanced resource-based and industrial economies. (176)

      Nevertheless, the American groundwater/takings cases provide little support for arguments against treating water rights as constitutional property. Many cases clearly state that groundwater use rights qualify as constitutional property and are protected by the takings doctrine. (177) Day exemplifies these cases, as does McNamara v. City of Rittman, a recent Ohio Supreme Court case. (178) There, the court unequivocally concluded, "Ohio recognizes that landowners have a property interest in the groundwater underlying their land and that governmental interference with that right can constitute an unconstitutional taking." (179) A few cases do not address the issue, some address it ambiguously, (180) and some have stressed that the constitutional protection for water rights is weak. (181) But I found only one decision that clearly rejected the idea of a property right in groundwater. In Village of Tequesta v. Jupiter Inlet Corp., a 1979 decision, the Florida Supreme Court concluded a discussion of groundwater rights with the emphatic statement that "[t]his 'right to use' is not 'private property' as contemplated by article X, section 6, [of the] Florida Constitution requiring full compensation before taking for a public purpose." (182) That statement is entirely consistent with conceptions of water rights as sub-constitutional property. But within American groundwater jurisprudence, that statement also is unique.

      Of course, even if groundwater use rights traditionally count as property rights, not every takings plaintiff will have a valid claim to hold such rights. In some states, the underlying right extends only to reasonable uses on overlying land, or to a reasonable share of the resource, and a plaintiff whose use exceeds those constraints lacks a colorable claim to own the property that forms the basis for her takings claim. (183) Similarly, in western states that have integrated groundwater use rights into their prior appropriation systems, an overlying landowner may not have any property interest in the use of groundwater beneath his land, and a junior appropriator has no property right to uses that interfere with his seniors. (184) Consequently, a key litigation issue in several groundwater/takings cases has been whether the plaintiff actually owns the allegedly taken property. (185) But even when courts have answered that question in the negative, they generally have done so because that particular plaintiff lacked a property interest, not because the state excludes groundwater use rights from the realm of property. (186)

      Obviously that finding is not fatal to the normative or theoretical arguments against constitutionalizing groundwater rights, or water rights more generally. Sometimes historical practices are misguided, and sometimes precedent should be overturned. (187) But the prevalence of constitutionally protected groundwater rights nevertheless creates two challenges for arguments against treating water rights as property. First, while sometimes property law traditions merely reflect the unjust power dynamics of an earlier age, on many other occasions they do reflect received wisdom and traditions born of experience. (188) Second, stability in property law, as in most areas of law, is valuable in its own right; change can disrupt expectations and plans. (189) For both of those reasons, the prevalence of a legal practice therefore should create a presumption--albeit a weak and rebuttable one--that continuing the practice makes some sense.

   2. Deference to Regulatory Authority

      The tradition of treating water rights as constitutional property also allows us to consider whether the perceived dangers of constitutionally protected water rights have come to fruition. Among the commentators and litigants who have argued against constitutionalizing water rights, the primary fear has been that constitutional protection of water rights will inevitably lead to severe restrictions on governments' ability to regulate those rights. As one environmental group's amicus brief in the Day litigation direly put it, "[i]f this theory were to prevail in this Court, groundwater conservation in Texas would be finished." (190) In the Day litigation, those warnings led, somewhat ironically, to a counterargument from the plaintiffs' supporting amici, some of whom took pains to explain that property rights can be and routinely are subject to extensive regulatory oversight. (191) But in the broader property rights debate, the environmentalists' fears are almost exactly concordant with property rights advocates' hopes. For most property rights advocates, constitutional property rights are a means to anti-regulatory ends. (192) That debate raises the question: have past courts' treatment of groundwater use rights as constitutional property led to doctrinal restrictions on groundwater regulation?

      There is little evidence that they have. In the pool of decisions available on Lexis and Westlaw, government defendants have done quite well, winning the vast majority of the cases. (193) Even where government defendants have lost, the loss has often been on a motion to dismiss or for summary judgment, and the case has continued onward. (194) Only four courts have found a taking. (195) In two of these cases, the court did not order payment of damages, (196) and in one controversy, a subsequent damages claim failed. (197) Only in Bragg v. Edwards Aquifer Authority, the most recent case out of Texas, has a court found a taking and concluded that compensation should be paid. (198) Case outcomes cannot reveal all the ways in which constitutionalized water rights are affecting water management, for fears of takings claims may affect regulatory approaches even if few takings claims actually prevail. (199) Nevertheless, case outcomes do offer at least some evidence of actual practices, and these outcomes therefore provide ample reason to think that constitutionalized groundwater rights can coexist with robust government regulation.

      The reasoning of the decisions also supplies ample support for government regulatory authority. In decision after decision, courts have explained, often in great detail, the essential importance of groundwater use regulation. For example, in Southwest Engineering Co. v. Ernst, (200) the Arizona Supreme Court observed:

      The supply of ground water within the territorial boundaries of the state, or any particular groundwater basin therein, is not unlimited and even though in some instances the limits thereof may be difficult to apprehend, ultimately and inevitably at one time or another it will become necessary to restrict the use merely because the available users and uses exceed the available supply. (201) Similarly, in Bamford v. Upper Republican Natural Resources District, (202) the Nebraska Supreme Court succinctly summarized the prevailing view when it concluded "placing limitations upon withdrawals of ground water in times of shortage is a proper exercise of the State's police power." (203) Neither statement is at all exceptional.

      In accordance with that view, courts have often affirmed the ability of state legislatures and local governments to change state groundwater law, even where the changes effectively infringe rights that previously were unlimited. That affirmation comes from old and new cases, from relatively conservative and relatively liberal states, and from states with all sorts of common-law groundwater doctrines. (204) For example, the Oklahoma Supreme Court recently rejected a challenge to regulatory legislation imposing new limits on groundwater use. It premised its decision largely on "[t]he general rule ... that the Legislature may restrict the use and enjoyment of the state's water resources by exercise of its police power for the preservation of the public health, safety and welfare without compensating the property owner." (205) In Ernst, the 1955 Arizona Supreme Court case quoted above, the court stressed the same point, stating: "We do not doubt that it is the proper sphere of the legislature, in the interest of the general welfare, to say when that time [for groundwater use restrictions] has arrived ...," (206) Again, neither statement is anomalous. (207) Moreover, a contrary narrative, in which groundwater use regulation represents government run amok, makes rare appearances in groundwater decisions almost exclusively in dissents. (208)

      Finally, the cases have either...