A historic agreement between the federal government, two states, and a private power company means that four dams on the Klamath River are potentially slated for decommissioning and removal. The Klamath River flows from Oregon through California before finally emptying into the Pacific Ocean. The amended Klamath Hydroelectric Settlement Agreement (“KHSA”), signed on April 6th, 2016, may bring unexpected success to a decade-long negotiation involving big energy, tribal water rights, historic wildlife habitat preservation, and the intermingling of state and federal government regulatory agencies.

The first Klamath agreement was formally executed in 2010, and brought together the federal government, the state governments of Oregon and California, PacifiCorp, a large electric cooperative, and over forty additional signatories, including the Yurok and Karuk Tribes. Repeated congressional inaction halted the prior agreement’s implementation after Congress again failed to act before adjourning for the year on December 31, 2015.  On February 2, 2016, the Department of Interior, together with the Department of Commerce, California, Oregon, and PacifiCorp announced they agreed to amend the KHSA, which the parties eventually signed in April. The amended KHSA is the culmination of the Klamath Basin Restoration Agreement executed in 2010 and the Upper Klamath Basin Comprehensive Agreement signed in 2014.

In September, PacificCorp submitted the revised KHSA to the Federal Energy Regulatory Commission (“FERC”) for public review. On October 17, 2016, Interior Secretary Sally Jewell issued a letter to the Commission backing the dam removal.

Initially, the disputes in the Klamath Basin emerged as environmental and conservation groups (such as the Nature Conservancy, American Rivers, and Trout Unlimited) sought to restore 420 miles of historic salmon runs and riparian habitat. Moreover, these groups sought to eliminate the toxic algae blooms proliferating in the idle backwaters above the dams.

The most significant barrier to restoration of the river has been a dispute over the cost of retrofitting the aging infrastructure using modern technology and, alternatively, the cost of dismantling and removing the century-old structures and preparing the land to return to its original state.  According to several studies, the retrofit option would not only result in reduced electricity generation, but would also cost millions of dollars more than the removal.  However, the economic impacts extend beyond the estimated 450 million dollar cost of removal. A group of nearly one hundred, individual property owners have voiced opposition over the impact that dam removal would have on their lakefront property values adjacent to the reservoirs created by the dams.  Thus, a decrease in private property values could also accompany the dam removals.

Under the revised agreement, the states of California and Oregon will create a nonprofit entity, the Klamath River Renewal Corporation, which will take over Pacificorp’s current ownership of the dams.  This new owner will decommission and eventually remove the dams using existing federal authority. Both PacifiCorp ratepayers and a 2014 voter-approved water bond from the State of California has already generated funding for the decommission.

Notably, the most recent amendment lacks many government participation requirements from the original KHSA agreement.  The original agreement required Congress to pass legislation opening up significant funding, as well as the formal release of PacifiCorp from virtually any liability associated with the dam removal process. Congress’s inaction prompted the parties to exclude the Congressional participation requirement from the revised agreement.

In her recent letter of support to the FERC, Secretary Jewell called the plan a “unique opportunity to restore [a] magnificent [r]iver,” which  could help “re-write a painful chapter in our history” but still “[protect] the many interests in the Basin.” Secretary Jewell cited four key reasons for the Interior Department’s support: 1) the likely cost of removal is well below the funds that have already been obtained, 2) reservoir bottom sediment testing showed that chemical concentration levels were safe for release downstream, 3) the removal will result in the reopening of more than four hundred miles of salmon habitat, nearly doubling Chinook salmon production, and 4) the removal would improve water quality.

Although the agreement facilitates the removal of the dams, critics believe it fails to solve many of the problems it originally intended to fix, including resolving disputes over water rights, as well as effectively addressing specific allocations to farmers, wildlife refuges, and Native American tribes.  Notably, the Hoopa Valley Tribe did not sign the KHSA agreement amid concerns regarding certain provisions.  Further, the Klamath Tribes of Oregon did not sign the agreement, because its tribal members had yet to approve it through a popular vote.

While some issues may remain unresolved, the agreement represents an example of multiple entities and interests cooperating to effectuate the removal of the dams.  This agreement, if successful, may be an example and model for future change in the realm of water agreements. Curtis Knight, executive director of non-profit group California Trout expressed cautious optimism about the agreement, “[d]am removal is an essential first step, but certainly not the only step, in this process. California Trout remains committed to the comprehensive vision behind the hard-won Klamath Agreements, which identified a balanced approach to water use, environmental restoration, and community sustainability throughout the basin.”

DeWitt Patrick Mayfield

Image: PacifiCorp’s John C. Boyle Dam in Oregon, one of four dams slatted for decommission under the Agreement. Wikimedia user Bobjgalindo, Creative Commons.

Sources:

Bettina Boxall, Klamath River Dams Moving Toward Removal Despite Congressional Barriers, L.A. Times (Feb. 3, 2016), http://www.latimes.com/local/lanow/la-me-klamath-river-dams-20160203-story.html.

Thadeus Greenson, Feds Announce New Klamath Accord to Remove Dams by 2020, North Coast Journal (Feb. 2, 2016), http://www.northcoastjournal.com/NewsBlog/archives/2016/02/02/feds-announce-new-klamath-accord-to-remove-dams-by-2020.

Paige Blankenbuehler, On The Klamath, A Surprising Win For River Advocates, HIGH COUNTRY NEWS (Feb. 5, 2016), https://www.hcn.org/articles/how-conservatives-handed-environmentalists-what-they-wanted-klamath-dam-removal-without-concessions.

Peter Firmite, Remove 4 Dams on Klamath, Study Urges, S.F. Chronicle (Apr. 4, 2013), http://www.sfgate.com/science/article/Remove-4-dams-on-Klamath-study-urges-4411365.php.

Press Release, Dep’t. of Interior, Parties Agree to New Path to Advance Klamath Agreement (Feb. 2, 2016), available at https://www.doi.gov/pressreleases/parties-agree-new-path-advance-klamath-agreement.

Thadeus Greenson, UPDATED: California, Oregon Governors to Make ‘Major Announcement’ on Klamath, NORTH COAST JOURNAL (Apr. 4, 2016, 11:10 AM),  http://www.northcoastjournal.com/NewsBlog/archives/2016/04/04/california-oregon-governors-to-make-major-announcement-on-klamath.

Press Release, PacifiCorp, Parties Agree to New Path to Advance Klamath Agreement, (Feb. 2, 2016), http://www.pacificorp.com/about/newsroom/2016nrl/klamath-agreement.html.

Jonathan J. Cooper, Officials Sign Unusual Pact to Tear Down Hydroelectric Dams, ASSOCIATED PRESS (Apr. 6, 2016, 6:45 PM), http://bigstory.ap.org/article/235ba2f92ded43f3a8af971a52da17f2/officials-sign-unusual-pact-tear-down-klamath-dams.

Press Release, Dep’t. of Interior, Two New Klamath Basin Agreements Carve out Path for Dam Removal and Provide Key Benefits to Irrigators (last updated Apr. 14, 2016), available at https://www.doi.gov/pressreleases/two-new-klamath-basin-agreements-carve-out-path-dam-removal-and-provide-key-benefits.

Dan Bacher, Tribes, State and Feds Sign Klamath Dam Removal Agreement, DAILY KOS (Apr. 7, 2016, 1:36 AM), http://www.dailykos.com/stories/2016/4/7/1511799/-Tribes-State-and-Feds-Sign-Klamath-Dam-Removal-Agreement.

Will Houston, ‘Milestone’ moment: Klamath River dam removal plan submitted to feds, TIMES STANDARD NEWS (Sept. 23, 2016, 10:41 PM), http://www.times-standard.com/article/NJ/20160923/NEWS/160929892.

David Smith, Jewell supports dam removal in FERC letter, THE SISKIYOU DAILY NEWS (Oct. 16, 2016 8:59 AM)  http://www.siskiyoudaily.com/article/20161019/NEWS/161019616.

Letter from Sally Jewell, Secretary, U.S. Department of the Interior, to Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission (Oct. 17, 2016), available at https://bloximages.chicago2.vip.townnews.com/heraldandnews.com/content/tncms/assets/v3/editorial/3/2f/32f4ad9f-9d5d-5656-a7c4-3a4d5d4eacc2/5806b3b857502.pdf.pdf.


“CONFLICTS AND COOPERATION: THE PAST, PRESENT, AND FUTURE OF INTERSTATE WATER COMPACTS”

Denver, Colorado                          April 8, 2016

THE COLORADO RIVER SYSTEM:  PERSPECTIVES FROM THE LOWER BASIN

Ted Kowalski, Chief of the Interstate, Federal & Water Information Section of the Colorado Water Conservation Board, moderated a panel at the University of Denver Water Law Review Annual Symposium featuring three speakers addressing different perspectives from the Lower Basin.

The first speaker was Bill Hasencamp, Manager of Colorado River Resources, Metropolitan Water District of Southern California (“MWD”).  Hasencamp represented the municipal provider perspective on the panel.  MWD covers a one trillion dollar economy, 5,200 square mile service area, and—as one of the largest water providers in the country— approximately nineteen million residents.  Hasencamp explained how the drought in the 1990s forced Southern California to rethink the way it rationed water.  In response to the drought, Southern California devised an integrated resource plan for meeting reliability needs of the region.  The plan focused on agricultural to urban transfers and augmenting the dry year water supply with storage.  According to Hasencamp, the plan was effective, but maintaining the water supply has been a challenge for several reasons.

One challenge has been the geography of the delta between Northern and Southern California.  According to Hasencamp, the state water project receives water from the Sacramento River that comes into the delta from the North.  The pumps for both the state water and central valley project are both in the South.  Therefore, in order for the water to move between Northern and Southern California, it must move through the delta.  Unfortunately, fish swim too close to the pump and, in order to protect them, state and federal environmental regulations have forced Southern California to reduce pumping with increasing frequency.  Hasencamp explained that this year alone, during the worst drought in California’s history, California lost nearly a million acre-feet of water because fish were swimming too close to the intake.  In addition to fisheries, other long-term risks on the delta include seismic concerns with the bay area fault, as well as rising seal levels.  Hasencamp warned that if catastrophe hit, the delta could become an inland sea, and that this might prohibit the pumping of water for years.

Hasencamp then asserted that the focus needs to be on getting the delta functioning again in a way that will protect the environment and meet the water needs of the state.  Hasencamp explained that MWD believes the way to do that is through tunnels under the delta.  With tunnels, if a catastrophe occurred and the delta failed, Southern California would not lose pumping as the state could still receive water from the river upstream.  Tunnels would also ensure that Southern California could obtain water in a way that protects fish from pumps.  The plan is currently up for approval and Hasencamp is hopeful that it will pass.

Another challenge for California has been the apportionment on the Colorado River.  Hasencamp explained that a series of compacts and agreements give each state a certain allocation of the Colorado River.  After fifty years, California saw a dramatic reduction in its apportionments under the Colorado River Compact.  As a result, the state had to develop a plan to limit water intake in order to live within the reduced allocation.  In response, California developed a plan with other states to keep the Colorado River Aqueduct full until the year 2016.  Through the combination of special surplus water and agricultural to urban transfers, the aqueduct would theoretically have stayed full until 2016.  However, Hasencamp described a catch in the plan: Lake Mead had to remain at least two-thirds full.  Unfortunately, as he explained, MWD did not anticipate the worst drought in the history of the Colorado Basin.  As a result, Southern California did not receive the anticipated water from the river and instead had to shift its focus locally toward developing recycling, desalination, groundwater recovery, and conservation plans.  Hasencamp briefly discussed some of these plans including implementing agricultural conservation measures with Imperial Irrigation District (“IID”) to grow the same crops with less water; lining the American and Coachella canals; developing programs to incentivize farmers not to grow crops; entering a water sharing agreement with Nevada; and developing the Lake Mead Storage Program.  Hasencamp explained that even as the drought in California continues, extra water does exist.  Unfortunately, California cannot pump the water so they are still receiving drought allocations.  In conclusion, he suggested that fixing the delta would help to alleviate this tension.

The second speaker was Chuck Cullom, Manager of Colorado River Programs, Central Arizona Project (“CAP”).  He represented an agricultural and urban perspective.  To begin, Cullom gave a brief overview of the Colorado River System describing it as “the engine of the west.”  While not even in the top twenty largest rivers in North America, the Colorado has four times the annual run-off in storage capacity.  CAP delivers water to four million people in Arizona, provides water for cities and irrigation, and has the most diverse customer classes in the Colorado River system, serving eleven tribes, ten irrigation districts, and ten cities.

Like Hasencamp, Cullom emphasized the steady decline in Lake Mead and the implications it had for CAP.  Currently, the Lower Basin runs at a deficit of about 1.2 million acre-feet every year.  In accordance with the compact, MWD and California have invested billions to reduce their water use from 5.1 to 4.4 million acre-feet, and, still, Lake Mead is declining.  The decline undermines the effectiveness of these cooperative agreements.  Cullom explained that from CAP’s perspective, it must bear the burden of this shortage from what, it believes, is a shared obligation.  The Colorado River system is a linked system of seven states in the Lower Basin.  As the reservoir declines, the reductions grow.  When Lake Mead evaporates, apportionments do not factor in that reduction.  But through cooperative agreements, states have been able to define what shortages will look like in the Lower Basin.

During the first anticipated shortage, Cullom clarified that CAP’s underground water storage will diminish and agriculture customers could be cut by more than half.  In light of the persistent long term risk of shortage, CAP has developed several responses.  First, it has invested millions into storing water underground to protect users from shortages.  Second, like MWD and IID partners in California, CAP has begun storing water in Lake Mead to prop the reservoir up in order to avoid immediate shortage issues and reduce the risk of long-term shortage issues.  CAP has reduced annual diversion by between 140,000-180,000 acre-feet.  By the end of this year, CAP will have stored 345,000 acre-feet in Lake Mead.

Cullom concluded by emphasizing that the structural deficit creates a long-term risk to all Lower Basin Colorado River users and undermines the ability to become cooperative and collaborative partners.  CAP is attempting to follow the lead of California in developing proactive steps to reduce its use, but also is looking to collaborate and cooperate with Lower Basin partners to assist and share in those additional reductions.

The final speaker was Kevin Kelly, General Manager of IID.  He represented the irrigation perspective in a district with the largest number of agricultural to urban transfers in the nation.  According to Kelly, because California has been exceeding its 4.4 million acre-foot entitlement to the Colorado River, IID entered into transfer agreements to bring California “back in line.”  As Kelly explained though, “the only dangling question mark is the Salton Sea.”

According to Kelly, Imperial Valley is an economically-challenged community with 450,000 acres in active cultivation.  Because of the vast farmland and economic nature of the community, the recession of the Salton Sea will have devastating impact on the Imperial Valley.  When the Salton Sea issue first arose, the state of California took responsibility for handling it, focusing primarily on restoration.  However, as Kelly explained, California failed to fulfill its responsibility.  In 2014, in order to bring this issue to the forefront, IID filed a petition with its own state water board.  It informed California of its failure to meet the task of tackling the Salton Sea problem and requested the state board resolve the Salton Seat question as a condition of the transfers.

By the year 2047, 74,000 acres of lakebed will lay exposed, and the water elevation will be negative 249,090 feet.  To address the issue, IID suggests filling up the lakebed with habitat and renewable energy projects.  Kelly argued that renewable energy projects would be especially effective because the same exposed lakebed in the Salton Sea happens to correspond with this hemisphere’s largest untapped geothermal resource.  Kelly asserted that this resource could replace the lost generation at the San Onofre nuclear plant.  Yet, unlike the plant, the Salton Sea would have virtually no emissions.

Kelly noted that California has the most aggressive renewable portfolio standard in the nation as well as the most ambitious greenhouse gas reduction bills.  But in the last four years since San Onofre went down, air in California has become markedly more polluted.  According to Kelly, geothermal energy should be an integral part of the solution to filling up the exposed lakebed.  Kelly argued that IID could not enter another quantification settlement agreement when it is struggling to implement the first one.  At the end of his speech, he posed a rhetorical question: When you pit agriculture against all the other uses in California, who decides whose economic project is more important?  Kelly answered: “In a diversified economy in the southwest, agriculture needs to count for something.”

Neillie Fields


I. Introduction

Under the doctrine of prior appropriation, the acquisition of water rights is based on the principle: first in time, first in right. As a result, this system has the capacity to create winners (the senior water rights holders) and losers (the junior or no water rights holders). In times of drought, this problem is exacerbated.

In Estate of Steed v. New Escalante Irrigation Co., the Supreme Court of Utah rejected a proposal for balancing the interests of senior and junior water rights owners. Instead, the court concluded that “both parties cannot ‘win’ [because] the law simply favors the first user.” The court stated that “when there is not enough water to satisfy the needs of all users, the user who depends upon another’s seepage and runoff will suffer.”

Citing a strong policy of conservation underlying its water law as the reason for its decision, the court refused to recognize that return flows—resulting from the inefficient irrigation practice existing at the time—were legitimate means of supplying water rights to others. Although acknowledging that water users may appropriate wastewater and obtain protection against junior appropriators, the court stated that Utah water law encourages improvements in irrigation efficiency and the junior water appropriator of wastewater cannot compel the continued wasteful use of water. The adoption of improved and more efficient conservation technologies thereby brought benefits to the irrigator, including increased crop production and lower irrigation costs, but unfortunately, this development occurred at the expense of junior water-right holders. The result is increased pressure on an already over-appropriated Western water system and a greater divide between the “winners” and “losers.” While the court encouraged farmers to conserve and efficiently use water to ensure they retain all of their allocated water rights, this ruling discouraged the spread of water rights to different uses.

In the face of a changing climate and increasing urbanization in the West, water transfers could help arid regions meet growing demands for water through implementation of voluntary market-based sales and leases of water rights. Water rights may be transferred by sale, lease, or exchange. A water transfer is a voluntary agreement that results in a change in the type, time or place of use of a water right. A transfer may not exceed the quantity of rights held by the transferor, but may change the use of the water, the location, the time it is released, and the point of diversion. Water transfers are a means of making water available to those who don’t hold senior water rights. Water transfers can facilitate and enable the use of water, as necessary, for agricultural, municipal, industrial energy and environmental uses. Such transfers afford the opportunity to maximize the use of the available water supplies and promote the most efficient use of water.

Transfers of water could also be used to mitigate the impact of the holding in Estate of Steed, which ultimately promoted the inefficient use of water. Water transfers could potentially help balance the interests of senior and junior water rights owners by encouraging the water rights holder to better conserve his or her water and lease the remaining water rights for a limited time. As a result, this water will become available for junior water rights holders for the market price.

While voluntary water transfers have occurred for years, there are many barriers that water appropriators face when attempting to transfer water, including the lack of accurate and reliable information. Currently there is a high demand for water to be transferred from agriculture to uses that return higher economic benefits. This is most clearly evidenced by the circumstances of farmers in Northern California who hold senior water rights. With droughts plaguing arid climates, farmers are finding that their most valuable asset is no longer their crops, but rather their water rights. Therefore, farmers often face a choice between fallowing a field to lease out that water or continuing to farm the land without leasing any of the water rights.

This economic dilemma—which results in either an inefficient use of water resources or a loss in profits for a farmer—may soon disappear with changes in technology. Recently, farmers have found a third option that allows them to continue farming the land while implementing efficiency measures to significantly reduce water use for the same crop yield and then leasing that saved water to others in a high-demand market. A new technology, Sustainable Water and Innovative Irrigation Management (SWIIM), could provide the information necessary to help facilitate water transfers, and, thus, maximize the utility of this precious and dwindling resource. SWIIM helps farmers (1) conserve water; (2) more easily prove conservation efforts and successes to regulators more easily; and, (3) lease their excess water to municipalities, industrial users, or other farmers and individuals seeking additional water resources.

II. Non-Use, Forfeiture, and the Difficulty of Proving Conservation Encourage Waste—the Law Behind Estate of Steed

Water rights acquired by prior appropriation may be lost if the allocated water is not fully consumed each year. The general rule is that as soon as the water leaves an appropriator’s land and enters, or is destined for, a natural stream, it becomes subject to appropriation by other users. Typically, in farming only a portion of the allocated water is actually consumed for irrigation. The amount that does return to the stream—return flow—thereafter becomes available for others to divert.

Appropriators may also lose their water rights if they do not use their water for a significant period of time. Non-use for a significant period of time, coupled with intent to relinquish water rights, is sufficient to constitute abandonment of a water right. However, because water is such a scarce commodity, it is rare that a right holder will have the requisite intent to abandon a right. More likely, the water right holder may lose its water right despite the absence of any intent to do so under a forfeiture statute for non-use. Under the forfeiture statute for non-use, those appropriators who fail to beneficially use all of their allotted water, risk losing the rights to this water.

Although conserving water is a beneficial use and therefore will not result in a reduction of water rights, the burden is on the appropriator to prove such conservation to the authorities. Unfortunately, calculating the amount of water conserved is very complicated and an imprecise. Accordingly, rather than risk losing valuable water rights, appropriators, like the farmers in the Estate of Steed, are thereby discouraged from adopting more efficient methods of operation and conserving water to lease. Instead, water appropriators have a financial incentive to use all of their water rights, however inefficient such use may be, to avoid the risk of forfeiture. This logical consequence of our current system promotes the inefficient and illogical incentive to flood lands and reuse instead of applying that extra water to a more productive use that will return higher environmental, economic, and social benefits.

The transfer of water is further complicated when the water rights are conveyed separately or there is a different use contemplated. The laws of water take extra precaution by ensuring that the rights of other stream appropriators are not negatively impaired. This special protection comes in the form of the no-harm rule.

In sum, farmers who reduce water use do not necessarily see their “savings” translate into that same amount of conserved water being available to lease to someone else for a different—and possibly more important—use. Rather many farmers conclude that the lack of information available to senior appropriators makes it extraordinarily difficult to transfer water, and the possibility of losing their unused water rights is too great to risk implementing more efficient conservation technologies. As a result, these right holders have been notoriously resistant to water conservation because the legal system has created a financial disincentive that actually promotes inefficient use. In effect, the overly complicated process of transferring water actually discourages water conservation and creates a perverse motivation for farmers to overwater their crops merely to avoid losing water rights.

III. The Short-Term Solution: Transfer of Water

Water transfers could be one method of allowing water managers to combat drought-riddled areas and repurpose existing water resources for new and more beneficial uses. Transfers of water could help improve farming practices, further energy development, and meet the demands of increasing urbanization. States can also develop new infrastructure and storage capabilities, implement conservation and efficiency initiatives, and promote water reuse projects.

In general, water transfers are done on an ad-hoc basis and there are barriers to overcome. In particular, measurement poses a difficult problem for authorities attempting to regulate use. This problem is exacerbated by the limited data available on the amount of water used. However, SWIIM can help facilitate the transfer of water; and thereby help farmers sell their extra water so it could be utilized for other uses. SWIIM has the capacity to accomplish these tasks by allowing farmers to assess all of their economic options. The program instructs the farmer on what crops can be grown, the expected yields that can be anticipated from each of these various crop options, and the amount of water required to achieve the various crop yields. SWIIM is also a tool that provides a guide to the farming interest in how to sell or lease water rights, thereby enabling the farm to retain a sufficient amount of their water rights to continue productive farming. Most importantly, this new system can work in a manner that is consistent with the western doctrine of prior appropriation and still help expedite water transfers. As a result, the prior appropriation doctrine may continue serving as the legal framework to guide the allocation of water resources, while incorporating the flexibility to meet evolving needs through the promotion of more efficient utilization of water rights in a rapidly changing environment.

SWIIM’s software enables farmers to lease their extra water to others. This program allows farmers to quote the availability of water and provide it to other users who need this resource—sharing the water for the best and most efficient use. Farmers who hold the most senior water rights in a region will no longer have the economic incentive to flood their fields with little regard for efficiency. Instead, this program creates a new opportunity for both the farmer in particular and society in general, whereby the farmer maximizes the economic return on the use of water and others can receive the benefit of a limited resource that would otherwise be unavailable.

To utilize the program, the farmers must enter detailed information about past use of their land and water rights and then identify measures that they are willing to adopt to reduce water use. Using data from irrigation districts, field instruments, weather reports, satellites, and low-altitude flights, the SWIIM software calculates in real time how much of a farm’s water is consumed and how much returns to underground flows—thereby ensuring that farmers do not jeopardize their rights if they choose to sell or lease their conserved water. Using the information provided, an algorithm developed jointly with the U.S. Department of Agriculture informs farmers how to conserve water, by adopting efficient measures such as a targeted drip-irrigation system that will not result in reduced productivity.

IV. Conclusion

With an influx of population and industries settling in the water-scarce West, combined with an increasingly arid climate, SWIIM could help evaluate and facilitate how society utilizes water transfers as a means of allocating a vital resource. This technology will enable stakeholders to learn from other’s experiences with water transfers, thereby facilitating more informed and efficient decisions with respect to the use of their water rights. SWIIM facilitates water transfers to other uses while avoiding inflicting harm to agricultural economies and surrounding communities.

The law encourages implementation of improvements in water systems to promote the conservation of water. However, to effectively implement such improvements, water rights owners should not be penalized for conserving water. Instead, there should be an incentive system to economically reward implementing water conservation practices. SWIIM offers a market-based solution that could be regulated to ensure there is equal water distribution to municipalities and individuals in need of this vital resource. The purpose of water transfers and the utilization of the SWIIM system, is not to “dry” up the farm. Rather, it is to move the water efficiently where needed, without adverse economic consequences to the senior right holder. When we “free-up” the water, we can grow as a society, conserve water and utilize the flexibility that the prior appropriation doctrine is intended to allow.

Managing California’s complex water storage and delivery system is a never-ending balancing act between supply, demand and environmental considerations, particularly during a severe drought. As water scarcity reaches unprecedented extremes in the West, SWIIM technology could help mitigate the impact in the region. It provides one method of managing drought and is a welcome new addition to the state’s water market.

References

See generally Gunnison Irrigation Co. v. Gunnison Highland Canal Co., P. 852 (1918).

See generally Estate of Steed v. New Escalante Irr. Co., 846 P.2d 1223, 1228 (Utah 1992).

SWIIM home, http://www.swiimsystem.com/home.aspx, (last accessed September 23, 2015).

DAVID H. GETCHES, WATER LAW IN A NUTSHELL (5th ed. 2015).

Hallie Jackson and Elizabeth Chuck, Farmers Faced With Whether to Grow Crops or Sell Water, April 4, 2015, http://www.nbcnews.com/storyline/california-drought/grow-crops-or-sell-water-california-farmers-face-dilemma-n335696.

Greta Kraul, Airbnb for water seeks to help farmers transfer surplus, S.F. GATE (April 21, 2015) http://www.sfgate.com/business/article/Airbnb-for-water-seeks-to-help-farmers-transfer-6215032.php.

A. DAN TARLOCK ET AL., WATER RESOURCE MANAGEMENT A CASEBOOK IN LAW AND PUBLIC POLICY (Robert C. Clark et al. eds., 7th ed. 2002).

“The Story of Regenesis Management Group: Balancing Water Use for Profit and Conservation” (PDF). COLORADO WATER, NEWSLETTER OF THE WATER CENTER OF COLORADO STATE UNIVERSITY 28 (1): 19.

Lorraine Chow, Can This ‘Airbnb for Water’ Help Drought-Stricken Farmers?, ECO WATCH, (April 27, 2015) http://ecowatch.com/2015/04/27/swiim-app-drought-farmers/.

Greta Kraul, Airbnb for water seeks to help farmers transfer surplus, S.F. GATE (April 21, 2015) http://www.sfgate.com/business/article/Airbnb-for-water-seeks-to-help-farmers-transfer-6215032.php.

Larua Bliss, It’s About to Get Easier For California Farmers to Conserve Water—And Sell It, CITY LAP (July 10, 2015) http://www.citylab.com/weather/2015/07/its-about-to-get-easier-for-california-farmers-to-conserve-waterand-sell-it/398144/.

Jennifer Najjar

Image: An aerial shot of Ririe Dam in Bonneeville, Idaho.  Flickr user Sam Beebe, Creative Commons.

 


Editor’s Note: This piece is part of a six-part collaborative series between the University of Denver Water Law Review and the Stanford Environmental Law Journal that examines the upcoming Ninth Circuit case, Aqua Caliente Band of Cahuilla Indians v. Coachella Valley Water District and the development of the doctrine of federal reserved rights to water.

Agua Caliente raises pressing issues at the intersection of Federal Indian law and water law that have yet to be conclusively resolved by the U.S. Supreme Court. Among these issues are whether federal reserved water rights apply to groundwater and the scope and circumstances under which aboriginal water rights, with a priority date of time immemorial, may be claimed. This piece explores in depth the Agua Caliente’s claim to aboriginal rights to groundwater, and how the district court ruled on this claim in its March 20, 2015 ruling on summary judgment.

Background on Federal Indian Water Rights

Although the law of Indian water rights remains in flux, water rights potentially available to federally recognized tribes fall into two categories: 1) federal reserved, or Winters, water rights and 2) aboriginal, or Winans, water rights. Both types are at issue in Agua Caliente, and while this post primarily discusses the Agua Caliente Band’s aboriginal water rights claim, an overview of both types of rights provides useful background.

First, tribes may be entitled to federal reserved water rights. The U.S. Supreme Court first recognized reserved water rights in Winters v. United States, 207 U.S. 564 (1908), which concerned the Fort Belknap Indian reservation in Montana. The Milk River flows through the Fort Belknap reservation, and, at the time of the case, a number of non-Indian Montanans had obtained state appropriative rights to the river’s water. The federal government sought to restrain these state-sanctioned users from diverting water upstream of the reservation, and the question arose whether the Indian reservation possessed water rights through which it could restrain other appropriators. In response to this question, the Court held the reservation did possess water rights because, in setting aside the Fort Belknap Indian reservation, the federal government reserved water sufficient to fulfill the purpose of the reservation. In other words, if by treaty the United States reserved land to provide a tribal agricultural homeland, the resulting Indian reservation and its occupants would possess federal reserved water rights to the quantity of water necessary to fulfill that agricultural purpose. Later courts, such as Arizona v. California, 373 U.S. 546 (1963), clarified that these rights apply to waters appurtenant to the reservation and have a priority date commensurate to the date of the treaty or other federal action reserving the lands.

In addition to reserved water rights, tribes have invoked aboriginal water rights carrying a priority date of time immemorial. The key Supreme Court case supporting such rights is United States v. Winans, 198 U.S. 371 (1905). While Winans was not a water rights case, it contains a principle of Indian law applicable to water rights, namely that treaties and other federal actions are not a grant of rights to the Indians, but rather a grant of rights from them. Thus, according to Winans, tribes retain rights that they did not explicitly cede in a treaty or other agreement. In the case of Winans, these retained rights included hunting and fishing.

The central case recognizing the Winans principle with respect to water rights is United States v. Adair, 723 F.2d 1394 (9th Cir. 1983). There, the Ninth Circuit held the Klamath Tribe of Oregon possessed aboriginal title to certain lands, hunting, and fishing rights, and “by the same reasoning, an aboriginal right to the water used by the Tribe as it flowed through its homeland.” Id. at 1413. While the Klamath Tribe ceded title to most of its ancestral lands by treaty, the Tribe retained exclusive use and occupancy rights. Relying on Winans, the Adair court found that there was “no indication in the treaty, express or implied, that the Tribe intended to cede any of its interest in those lands it reserved for itself.” Id. at 1414. Thus, the court held, the Tribe possessed a continuing water right on the Klamath Reservation to support its hunting and fishing lifestyle. This right, the court explained, carried a priority date of “time immemorial.” Id.

Reserved and Aboriginal Rights in Agua Caliente

The Agua Caliente Band of Cahuilla Indians (“Agua Caliente” or “Tribe”) is a federally recognized tribe with a reservation in southern California’s Coachella Valley. The Tribe has used and occupied the land constituting and surrounding their current reservation for generations. The Tribe’s ancestral homeland in the Coachella Valley forms part of the Sonoran desert, where water is scarce, particularly in California’s current drought. In 2013, the Agua Caliente sued the Coachella Valley Water District and the Desert Water Agency seeking, among other requests, a declaration that the Tribe possesses both federal reserved and aboriginal rights to the Valley’s groundwater. This lawsuit began in the United States District Court for the Eastern District of California.

The parties to the suit agreed to break the action into three phases. Phase I, which was decided in March 2015, addressed two primary legal questions: (1) whether the Agua Caliente held federal reserved rights to groundwater under the Winters doctrine, and (2) whether the Tribe held aboriginal rights to groundwater. The court held the Tribe’s federal reserved water right included a right to groundwater. The court found the reservation’s purpose was to provide a tribal homeland, and thus the Tribe possessed a federal reserved water right sufficient to fulfill that purpose. The court reasoned that this right extended to the groundwater beneath the Tribe’s land as an appurtenant source of water. See Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, Case No. EDCV 13-883-JGB, 2015 WL 1600065 (E.D. Cal., Mar. 20, 2015) at 7-10 (hereinafter “Agua Caliente”). Because the extension of the Winters doctrine to groundwater has not been settled by the U.S. Supreme Court, this constitutes a major victory for the Tribe.

The Eastern District, however, denied the Tribe’s aboriginal rights claim. This section recounts the parties’ arguments in this case.

i. The Parties’ Arguments

The aboriginal rights arguments in Agua Caliente centered on federal statutes enacted in the wake of California joining the United States. In 1848, Mexico ceded land that would become the State of California to the United States in the Treaty of Guadalupe Hidalgo. Shortly thereafter, in 1850, California was admitted to the Union and became a state. And just one year later, the U.S. Congress passed the Act of 1851, which sought to protect the property rights of former Mexican citizens and to settle land claims in California. The Act required those claiming property rights to file their claims within two years.

Coachella argued that the 1851 Act required all claims to land to be submitted, and that the Agua Caliente’s failure to submit a claim within the two-year period set forth in the Act meant that any claims to the land were extinguished in 1853. Likewise, Coachella argued that the record lacked sufficient factual support for Agua Caliente’s aboriginal groundwater rights claim. In particular, Coachella emphasized the lack of evidence that Agua Caliente reservations had any wells in use, but rather that they only used surface water.

Agua Caliente countered that the 1851 Act did not extinguish their aboriginal rights. Agua Caliente did not dispute that they failed to file a claim in the two-year window of the Act. Instead, they argued that the Act, which on its terms pertained to “each and every person claiming lands in California by virtue of any right or title derived from the Spanish or Mexican government,” Plaintiff’s Brief at 20 (citing An Act to Ascertain and Settle the Private Land Claims in the State of California, 9 Stat. 631 (March 3, 1851)), did not apply to them because their claim to land did not stem from the Spanish or Mexican government. Rather, they claimed aboriginal rights based on use and occupation since time immemorial, and did not rely upon title derived from the Spanish or Mexican government. To buttress this argument, Agua Caliente also pointed to an 1853 Act passed by the U.S. Congress to transfer California lands in which the United States retained a proprietary interest to the United States. Because this 1853 Act included an exception for “land in the occupation or possession of any Indian tribe,” the Tribe argued that this provision explicitly recognized as valid the kind of aboriginal title that they asserted. In making this argument, Agua Caliente also attempted to distinguish a series of U.S. Supreme Court cases finding aboriginal rights to be extinguished by the Act of 1851. It did so on the ground that those U.S. Supreme Court cases addressed “Indian land rights that fell within the purview of the 1851 Act,” but that Agua Caliente’s land rights did not fall within the purview of the 1851 Act.

Likewise, because an 1850 law passed by the U.S. Congress created a treaty commission for the purpose of clearing aboriginal title claims of non-missionized Indians, Agua Caliente argued that they did not fall within the scope of the Act of 1851. The Act of 1851, their argument went, did not apply to Indians outside the zone of missionization because the 1850 Act covered their claims. Agua Caliente also noted that they had negotiated a treaty with the United States in 1852 that set aside a reservation, but that they were not notified of the U.S. Senate’s failure to ratify the treaty for some time.

Finally, Agua Caliente argued that even if their aboriginal land rights had been extinguished by the 1851 Act, they subsequently reestablished title by continuing their exclusive use and occupancy of the land and water on their ancestral lands.

ii. The Court’s Ruling

The court’s ruling on summary judgment granted the Agua Caliente federal reserved rights to groundwater, but denied the claim for aboriginal groundwater rights. It rejected both of Agua Caliente’s aboriginal rights arguments, finding that the Tribe’s failure to file a claim in accordance with the Act of 1851 extinguished any aboriginal water rights. Moreover, the court held that even if the 1851 Act did not extinguish these aboriginal rights, the establishment of a reservation in 1876 “effectively re-extinguished that right.” Agua Caliente at 13.

Although the court did not explicitly address Coachella’s argument that no factual support demonstrated groundwater use in the relevant time period, the court did note that aboriginal rights to groundwater are not founded upon use of groundwater itself, but rather derive from a right to occupancy. See Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, Case No. EDCV 13-883-JGB, 2015 WL 1600065 (E.D. Cal., Mar. 20, 2015) at 13 fn. 12 (“[N]o such freestanding aboriginal rights exists, all derive from a right to occupancy.”). Accordingly, proof of actual groundwater use was not necessary.

The court’s decision to deny aboriginal rights to Agua Caliente relies fairly heavily on U.S. Supreme Court precedent regarding the Act of 1851. Although the argument that an aboriginal right does not stem from Spanish or Mexican authority and that property rights not stemming from Spanish or Mexican authority are not covered by this Act appears persuasive on its face, past U.S. Supreme Court decisions have interpreted the Act of 1851 as requiring tribes claiming aboriginal land rights to have filed a claim pursuant to the Act to preserve their occupancy rights. The main case finding otherwise, Cramer v. United States, 261 U.S. 219 (1923), upon which Agua Caliente relied heavily, contains some language favorable for the Tribe. See, e.g., id. at 231 (“The Indians here concerned . . . and their claims were in no way derived from the Spanish or Mexican governments.”). Nevertheless, while the U.S. Supreme Court has not affirmatively stated that all aboriginal land claims in California fall within the ambit of the Act of 1851, the Ninth Circuit in U.S. ex rel Chunie v. Ringrose, 788 F.2d 638 (9th Cir. 1986), effectively interpreted the line of U.S. Supreme cases as doing just that. The Chunie court distinguished Cramer on the ground that the tribe in that case did not occupy the land in question at the time of the Act of 1851. Interestingly, the Eastern District did not address Agua Caliente’s argument about the 1850 treaty commission, so the court’s exact perception of that argument remains unclear. Nevertheless, the Eastern District did not find it persuasive enough to rule in the Tribe’s favor on the aboriginal water rights claim.

The Eastern District’s assertion that the creation of a reservation for the Tribe in 1876 reservation extinguished aboriginal rights, however, appears inconsistent with prior case law on aboriginal water rights. As put forward in Winans, reservations are not a reservation of rights to tribes, but rather a reservation of rights from them—a reservation of those not granted. Accordingly, the Ninth Circuit in Adair, 723 F. 2d at 1414, noted, concerning the aboriginal water rights it found to exist for the Klamath Tribe, “[t]he rights were not created by the 1864 Treaty, rather, the treaty confirmed the continued existence of these rights.” The Eastern District here, citing Hagen v. Utah, 510 U.S. 399, 412 (1994) instead explained that reservation means “the United States withdraws land which it then ‘set[s] apart for public uses.’” The Eastern District used this statement to support the assertion that “an aboriginal right of occupancy is fundamentally incompatible with federal ownership.”  Agua Caliente at 13. This assertion, of unclear origin or legal underpinning, contradicts Adair, which recognized a continued aboriginal right of occupancy on a federal reservation. Adair, 723 F. 2d at 1414.

Conclusion

First, in our estimation, the Eastern District should have refrained from foraying into the counterfactual that the Tribe might have reclaimed its aboriginal title between the Act of 1851 and the 1876 establishment of its reservation. Alternatively, just as the Ninth Circuit did in Adair, the court could have conducted a robust interpretation of the executive order that established the reservation in 1876 to determine whether or not it reserved any remaining aboriginal rights. We feel that it is a legal error to conclude that a reservation automatically extinguishes any aboriginal rights that may exist without even examining the text of the order establishing the reservation. However, because the Tribe has elected not to appeal the aboriginal rights portion of this ruling, the order and its flawed reasoning will remain on the books.

Case law surrounding the presence of aboriginal water rights remains murky. Although Agua Caliente ultimately prevailed on their reserved water rights claim in this case, recognition of aboriginal rights can be crucial to tribes, primarily when 1) a federal reserved rights claim is not available; or 2) the priority date guaranteed by a reserved right is not early enough to preserve a tribe’s access to water. Given the lack of clarity in aboriginal water rights, erroneous decisions in this arena are not surprising. Appellate courts should work to make the law here more clear when the opportunity to do so arises to provide better guidance to lower courts attempting to make sense of the confusing state of the doctrine.

Although this piece has focused on the legal underpinnings of aboriginal rights, it is worth acknowledging that, from the perspective of basic fairness, these legal underpinnings are themselves seriously flawed. During this time period, eighteen tribes in California negotiated treaties with the United States that were never ratified. No one bothered to notify the tribes of this fact. Combined with the Act of 1851, these actions left many California tribes homeless. On top of this, these tribes had to endure state-sanctioned attempts to get rid of the Indian population. There are some tools within the law, such as aboriginal water rights, that can be used to advance tribal interests, but that does not change this country’s history of using the law itself to subjugate the people who have lived here the longest, a history that is still present in certain strains of modern legal doctrine.

Richard Griffin and Claudia Antonacci, JD Candidates, Stanford Law School, Class of 2017

Image: Warner’s hotsprings and the village of Aqua Caliente, California ca. 1900.  Flickr user Ashley Van Haeften, Creative Commons.

SOURCES:

Winters v. United States, 207 U.S. 564 (1908).

Arizona v. California, 373 U.S. 546 (1963).

United States v. Winans 198 U.S. 371 (1905).

United States v. Adair, 723 F.2d 1394 (9th Cir. 1983).

Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, Case No. EDCV 13-883-JGB, 2015 WL 1600065 (E.D. Cal., Mar. 20, 2015).

An Act to Ascertain and Settle the Private Land Claims in the State of California, 9 Stat. 631 (March 3, 1851).

U.S. ex rel Chunie v. Ringrose, 788 F.2d 638 (9th Cir. 1986).

Agua Caliente Memorandum of Points and Authorities in Support of Motion for Summary Judgment on Phase I Issues.

Coachella Valley Water District Memorandum of Points and Authorities in Support of Motion for Summary Judgment or in the Alternative, for Partial Summary Judgment.

United States Bureau of Indian Affairs, Who We Are, http://www.bia.gov/WhoWeAre/RegionalOffices/Pacific/WeAre/.


Editor’s Note: This piece is part of a six-part collaborative series between the University of Denver Water Law Review and the Stanford Environmental Law Journal that examines the upcoming Ninth Circuit case, Aqua Caliente Band of Cahuilla Indians v. Coachella Valley Water District and the development of the doctrine of federal reserved rights to water.

Tribal Participation in the Sustainable Groundwater Management Act

In 2014, the California Legislature passed the Sustainable Groundwater Management Act (SGMA), which implements a comprehensive framework for the regulation of groundwater in California.[1]  SGMA relies on local agency leadership to achieve “sustainable groundwater management,” defined as the management and use of groundwater without an “undesirable result,” such as unreasonable reduction of groundwater storage, degradation of quality, seawater intrusion, or land subsidence.  Under the new law, certain high- and medium-priority basins will be required to adopt sustainable groundwater management plans the end of January 2022, and to attain sustainable groundwater management by 2040.[2]  While SGMA contains several provisions pertaining to tribes, it raises many more questions than it answers about how the new regulations will affect the more than one hundred federally recognized Indian tribes that reside in California.

Much of the uncertainty about SGMA’s impact on tribes and vice versa stems from the fact that federally recognized tribes are sovereign entities that often fall outside of state regulation; tribes have a government-to-government relationship with the U.S. federal government.  This means that, with regard to their federal water rights, federal tribes can effectively ignore SGMA if they so choose, which poses potential problems for the state and local sustainability agencies, because sustainably managing an aquifer generally requires managing the total amount of water removed from the aquifer by all users.  If a local sustainability agency cannot control—or doesn’t even know—the amount of groundwater used by a tribe, it will be more difficult for that agency to manage its groundwater basin.  As a result, SGMA seeks to pull federal tribes into local considerations of groundwater management and conservation; it provides that tribes “may voluntarily agree to participate in the preparation or administration of a groundwater sustainability plan” and are “eligible to participate fully in planning, financing, and management.”[3]  Still, the Act does not—and cannot—require that federally recognized tribes participate or in fact do anything at all.

The question of whether to participate in the SGMA process raises complex issues for tribes, and since the first deadlines under SGMA have not yet passed, the tribes appear to be in a “wait and see” mode—they are waiting to see how the process takes shape and plays out before deciding whether to participate.  To date, no tribe has fully begun participating in a local SGMA process of developing a sustainability agency or groundwater plan.  In part, this is likely the result of tribes’ concerns that participating in the SGMA process—a state law to which they are not subject—will impinge on their sovereignty.  Tribes may not want to be forced to report to the state; instead, they wish to preserve their government-to-government relationship at the federal level.  For similar reasons, tribes may be hesitant to share their groundwater data and knowledge about the hydrogeology of any aquifers underlying their reservation.  Moreover, even if tribes are interested in coordinating with local agencies or the state, they may lack institutionalized mechanisms for doing so, because historically many of them have coordinated with federal, rather than state, agencies.  Collaborating with local entities under a state law may be an uncomfortable posture and new procedure for tribes.  Thus, for those tribes who may be interested in participating, establishing a formal relationship between tribes and the state that doesn’t entail the state regulating tribes will be a major challenge moving forward.

But if tribes opt not to participate in the SGMA process, what does that mean for the basins that they overlie?  It could mean future havoc for basin plans if tribes assert federally reserved water rights after the basin plans are established.  SGMA guidance documents have appropriately emphasized how to contact and invite tribes to participate, but they have not named the risks of not including tribal participants.[4]   If a tribe asserts a federally reserved water right after a basin plan has been established, it may render the basin plan ineffective by bringing the total amount of groundwater extracted from the basin above the amount required to achieve “sustainable groundwater management.”

The potential for this situation to arise is the result of the nature of the water rights that federal tribes living on reservations may be able to claim.  Under the Winters doctrine, when Congress reserves land for an Indian reservation, Congress also reserves water rights for the tribes living on the reservation.[5]  Those tribes have a right to the amount of water necessary to fulfill the purposes for which the reservation was created, which can include the amount needed to farm all the “practically irrigable acreage” on the reservation.[6]  That “reserved” water right is a federal right and thus usually paramount to rights later perfected under state law.[7]  As a result, unlike holders of state water rights, tribes with federal water rights need not follow the reasonable and beneficial use doctrines that are part of the California water law regime for both groundwater and surface water rights.  Nor do they lose the water right from non-use—federally reserved water rights are not subject to abandonment, so tribes may come forward and assert a water right at any time—including potentially after a basin plan has been established under SGMA.

The concern that tribes will disrupt existing water allocation regimes by suddenly claiming or exercising their reserved water rights is not new, however.  Historically, tribal claims of federally reserved water rights were made with respect to surface water, which presented complex issues for the appropriative rights systems employed in western states like California because they affected the priority of existing rights.  Whereas priority date under the state system is based on the date when the appropriation was initiated, federally reserved water rights have a priority date that goes back at least as far as the date on which the reservation lands were set aside.[8]  As a result, a tribe claiming a federally reserved right to surface water today could bump down in priority all the rights established after the date on which the reservation was created.

Potential Interactions Between Federally Reserved Groundwater Rights and California’s Groundwater Regime

Similar problems arise in the context of groundwater, which recent case law, including the Eastern District of California’s decision in Agua Caliente, suggests can also be the subject of federally reserved water rights.[9]  California manages state groundwater rights under a water rights system that merges three different types of water rights—overlying, or correlative rights; appropriative rights; and prescriptive rights.[10]  The California Supreme Court first recognized correlative and appropriative rights to groundwater in 1903 in the landmark case Katz v. Walkinshaw.[11]  Under this groundwater rights regime, users whose land lies above an aquifer are vested with overlying rights, which allow groundwater extraction for use on the overlying land subject only to the limitation that the amount extracted is reasonable for use on the overlying parcels compared to the demands of other overlying users.[12]  Appropriative rights are established according to a first-in-time, first-in-right system and relate to groundwater extraction for use on property that does not overlie the aquifer.  These rights are junior to overlying rights—appropriators may only use “surplus” water, or water in excess of what is required by overlying users and that will not result in aquifer overdraft.[13]  Finally, prescriptive rights can be created by the open and adverse continuous use of groundwater in an overdrafted basin for the prescriptive period, which in California is five years.  Thus appropriative rights can shed their junior status as compared to overlying rights if they become prescriptive rights through this process.  How federally reserved rights to groundwater will interact with or fit into this complex state groundwater rights system remains largely an open question.

If the tribe’s land overlies a groundwater source, it may begin pumping under the correlative rights doctrine, making a claim to the correlative right of “reasonable use” under state law.[14]  Under that state law correlative right, if there is insufficient water to meet the demands of all overlying landowners, then each must reduce their use in relation to the other overlying landowners.[15]

If, however, the tribe claimed their groundwater right was a federally reserved right, three potential scenarios could occur.  First, if the date of creation of the tribe’s groundwater right preceded perfection of all other overlying groundwater rights, the tribe’s right would probably be absolute and superior, rather than correlative, to others.[16]  Granting a tribe its entire allotment in this scenario would likely follow the California Supreme Court’s rule for coordinating state surface water appropriative and riparian rights, which provides that appropriative rights supersede subsequent riparian rights and vice versa.[17]  Riparian surface water rights, like overlying groundwater rights, are correlative.[18]  As a result, the tribe’s federally reserved right could effectively preempt the state water rights of other users, thus making sustainable groundwater management more difficult, especially in times of scarcity or if the tribe’s water right is large relative to the total amount of water available in the basin.

In a second scenario, all overlying groundwater rights could predate a tribe’s reserved right.  Under this scenario, because federal reserved rights cannot interfere with prior state water rights,[19] the tribe’s right would likely be satisfied after the overlying rights, similar to a state appropriative groundwater right.

Finally, in a third scenario, the date of the creation of the tribe’s groundwater right could fall between the dates when other overlying groundwater rights in the basin vested.  In this scenario, three potential outcomes exist for coordinating overlying users’ rights with the tribe’s reserved right to groundwater: 1) the tribe’s right might be enjoyed in its entirety, preempting all subsequent overlying users, with all overlying users (including those predating the tribe’s reserved right) sharing in shortage, which means all overlying users reduce use proportionally if there is not enough water to meet their total demand; 2) because some overlying rights precede the tribe’s reserved right, the tribe’s right might be satisfied after all overlying rights; or 3) the tribe’s right might, together with other overlying state groundwater rights holders, reduce use proportionally in times of shortage.  This scenario—where a tribal reserved right is created subsequent to some overlying groundwater rights but before some others—mimics a scenario left unresolved in California surface water law when a surface water appropriative right is both predated by and followed by separate correlative, riparian rights to the same waterbody.  According to the authors of one water law casebook, in this surface water situation, “[i]f you cannot find a solution [to this quandary], do not worry.  Neither can we.  To our knowledge, moreover, no court has ever confronted this Gordian knot in a published opinion.  This issue typically does not arise because title to most private land in California was acquired before rival appropriative water rights were perfected.”[20]  Because tribes like the Agua Caliente Band of Cahuilla Indians, located in Southern California’s Coachella Valley, may hold reserved rights to groundwater with priority dates around the time when overlying groundwater rights first vested—the Agua Caliente’s Winters right to groundwater would date to 1876—this “Gordian knot” might become more common as tribal reserved rights to groundwater are increasingly recognized.[21]

In addition, tribes sometimes pump water from an aquifer and deliver it to lands that do not overlie that aquifer.  Under California groundwater law, this situation would make them state law appropriators.  If the tribe claimed a federal reserved right to groundwater in this distant aquifer, however, their reserved right would probably function like reserved rights to surface water: the tribe’s groundwater right would be fulfilled before appropriators with priority dates after the establishment of their reservation and after appropriators with earlier priority dates.[22]  Meanwhile, a tribal reserved right to groundwater that it uses on lands that do not overlie an aquifer might be fulfilled subsequent to all overlying groundwater rights, like state appropriative rights, or in conjunction with overlying groundwater rights as described above.

These complexities highlight the importance of aboriginal rights to groundwater—tribal reserved rights with priority dates of time immemorial.  Aboriginal groundwater rights with a priority date of time immemorial would almost certainly resolve the legal headaches described above, with tribal rights trumping all state groundwater rights.  Another post in this series discusses the aboriginal rights claim in the Agua Caliente case.

Ultimately, under either the correlative rights or the Winters doctrines, a federally recognized tribe on a reservation overlying an aquifer could claim a right to the groundwater at any time, even if it has not previously been pumping.  With a claim under the state correlative rights system, this would likely pose a fairly manageable problem for groundwater managers, since the tribe’s right would be limited by what is reasonable use in relation to other overlying users.  But an absolute, non-correlative, federally reserved claim to groundwater might frustrate basin plans and the established groundwater rights regime.  This is not to say that tribes are in any way at fault for unsustainable groundwater management in California; in fact, aquifer overdraft throughout the state is largely the result of historic non-enforcement of the groundwater rights regime except through litigation and adjudication in some basins.  Rather, the intersection of tribes’ federally reserved rights to groundwater and the California groundwater regime engenders extreme legal complexities and uncertainty that may have unintended consequences for groundwater management under SGMA.

Further uncertainty for basin managers might arise from questions like: if a reservation both overlies an aquifer and is crossed by surface water, may a tribe decide which water resource to make the subject of its federally reserved right (i.e., whether to claim a federally reserved right in the surface water or the groundwater)?  Can it make a claim to some of both the surface water and the groundwater?  If a reservation overlies two different aquifers, may a tribe claim a federally reserved right in one and a correlative right in the other?  Given that courts have only somewhat recently begun to find federally reserved rights in groundwater, these and many other questions about the interaction between California’s groundwater rights system and federally reserved groundwater rights remain unresolved.  In the end, it is in the interest of state and local agencies to attempt to overcome hurdles like tribes’ concerns about sovereignty in order to coordinate with them on groundwater to ensure that SGMA can be implemented effectively while respecting tribal water rights.

Elizabeth Vissers, J.D. Candidate, Stanford Law School, expected 2017; M.S. Student, Emmett Interdisciplinary Program in Environment and Resources, Stanford School of Earth, Energy & Environmental Sciences, expected 2017

Mary Rock,  J.D. Candidate, Stanford Law School, expected 2017; M.S. Student, Emmett Interdisciplinary Program in Environment and Resources, Stanford School of Earth, Energy & Environmental Sciences, expected 2017

Philip Womble, J.D., Stanford Law School, 2016; Ph.D. Candidate, Emmett Interdisciplinary Program in Environment and Resources, Stanford School of Earth, Energy & Environmental Sciences, expected 2019

Image: Shasta Dam, California.  Wikimedia Commons user Apaliwal, Creative Commons.

[1] 2014 Cal ALS 346, 2014 Cal SB 1168, 2014 Cal Stats. ch. 346 [hereinafter “Sustainable Groundwater Management Act” or “SGMA”].

[2] Philip Womble & Richard Griffin, Two Interactions Between California’s Sustainable Groundwater Management Act and the Public Trust Doctrine, Stan. Envtl. L.J. Blog (Apr. 29, 2015, 2:40 PM PST), http://journals.law.stanford.edu/stanford-environmental-law-journal-elj/blog/two-interactions-between-californias-sustainable-groundwater-management-act-and-public-trust#sthash.yaHnd6gB.dpuf.

[3] Sustainable Groundwater Management Act, ch. 346, §10720.3(c).

[4] See Kristin Dobbin, et al., Collaborating for Success: Stakeholder Engagement for Sustainable Groundwater Management Act Implementation (July 2015), http://www.waterboards.ca.gov/water_issues/programs/gmp/docs/local_asst/sgma_stakeholderengagement_whitepaper.pdf.

[5] Winters v. United States, 207 U.S. 564 (1908).

[6] See Arizona v. California, 530 U.S. 392 (2000).

[7] SGMA recognizes this.  Section 10720.3(d) provides that “federally reserved water rights to groundwater shall be respected in full.  In case of conflict between federal and state law in that adjudication or management, federal law shall prevail.”

[8] Winters v. United States, 207 U.S. 564 (1908); see United States v. Winans, 198 U.S. 371 (1905) (possibly supporting the notion that federally reserved rights could go back as far as time immemorial).

[9]  Cappaert v. United States, 426 U.S. 128 (1976); Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water Dist., No. EDCV 13-883-JGB, 2015 U.S. Dist. LEXIS 49998 (C.D. Cal. Mar. 20, 2015); see also Stephen V. Quesenberry et al., Tribal Strategies for Protecting And  Preserving Groundwater, 41 Wm. Mitchell L. Rev. 431, 453 & n.97 (2015) (commenting that “many . . . state and federal courts have found reserved rights in groundwater” and listing cases).

[10] Womble & Griffin, supra note 2.

[11] 141 Cal. 116 (1903).

[12] Womble & Griffin, supra note 2.

[13] Id.

[14] Wright v. Goleta Water District, 174 Cal. App. 3d 74 (relegating an unexercised right and making the newest pumper subordinate to others is inappropriate).  Tribes would be considered the same as any other overlying user, and could thus make a claim under state law to the amount of water that is reasonable compared to the demands of other overlying users.

[15] While this has historically not been enforced, the implementation of SGMA will hopefully ensure that it is enforced in the future.

[16] Quesenberry et al., supra note 9, at 456. See also Judith Royster, Winters in the East: Tribal Reserved Rights to Water in Riparian States, 25 Wm. & Mary Envtl. L. & Pol’y Rev. 169, 182 (2000) (stating that “[t]ribal [reserved] water rights are, therefore, paramount over subsequent state-law water rights.”).

[17] Haight v. Costanich, 184 Cal. 426 (1920).

[18] Pleasant Valley Canal Co. v. Borror, 72 Cal. Rptr. 2d 1 (Cal. App. 5th Dist. 1998).

[19] Royster, supra note 16, at 182.

[20] Barton H. Thompson et al., Legal Control of Water Resources 209 (5th ed. 2013).

[21] Like riparian surface water rights, overlying rights to groundwater would vest when a current landowner’s predecessor in interest originally received a land patent from the U.S. government. Many of these rights would date to the mid-19th century.  See Lux v. Haggin, 10 P.674, 725 (Cal. 1886).  Any reserved groundwater rights held by California Indian Rancherias that were created in 20th century would be accordingly be junior to most, if not all, overlying groundwater rights in this scenario.

[22] Royster, supra note 16, at 182.


Editor’s Note: This piece is part of a six-part collaborative series between the University of Denver Water Law Review and the Stanford Environmental Law Journal that examines the upcoming Ninth Circuit case, Aqua Caliente Band of Cahuilla Indians v. Coachella Valley Water District and the development of the doctrine of federal reserved rights to water.

This post explores the intersection of two topics that have historically been neglected in interstate water allocation, and in particular in interstate compacts: groundwater and tribal reserved rights to water.  Against the backdrop of the Agua Caliente case currently before the Ninth Circuit of the U.S. Court of Appeals, which raises the potential for broader recognition of tribal reserved rights to groundwater, this post focuses on interstate dimensions of recognizing such rights.  Interstate waters may be allocated in three ways: 1) an equitable apportionment decree from the U.S. Supreme Court; 2) legislation by the U.S. Congress that allocates water between states; or 3) interstate compacts.  This piece focuses on how tribal reserved rights have been dealt with under interstate compacts.

Federal Reserved Rights and Groundwater

The recognition of federally reserved Indian rights to surface water is well entrenched in water law jurisprudence, dating back to U.S. Supreme Court cases such as Winters in 1908.  As the Agua Caliente case before the Ninth Circuit highlights, tribal reserved rights to groundwater remain less established.  We first set out some background for tribal reserved rights claims to groundwater.  Then, we explore the interaction between federally reserved Indian and state rights to groundwater in the context of interstate allocations.

Even within individual states, the recognition of tribal groundwater claims may be problematic when addressing the allocation and governance of water rights.  While rights to surface water are well established, tribal rights to groundwater were typically not considered when initial allocations of water rights occurred.  Independent of tribal reserved rights, states have experienced difficulty in formulating regulatory frameworks to conjunctively manage both surface water and groundwater, particularly where different state water rights systems apply for surface water and groundwater.  The introduction of tribal reserved rights to groundwater, which may predate current claims, could have cascading effects on long-established uses of water.  The displacement of these claims and the unsettling of long-settled expectations of continued use pose an issue that we feel should be prophylactically addressed.

Interstate Allocations and Federal Reserved Rights

Inconveniently, aquifers do not always follow state lines.  In the case of transboundary aquifers, which extend across two or more states, it is unclear how federally reserved rights interact with the different states’ allocations from the aquifer.  At least two possible approaches exist: either 1) the federal reserved right takes priority, with the remaining groundwater allocated between the states; or 2) the federal allocation is taken from the allocation of the state in which the federal reserve is located.  The Supreme Court followed the latter approach in Arizona v. California, which allocated Colorado River water between these states.  In that case, the Special Master upheld the federal government’s reserved rights claim to water on behalf of various tribes, and the Special Master to the U.S. Supreme Court determined in his report that “all consumption of mainstream water within a state is to be charged to that state, regardless of who the user may be” (Rifkind, Special Master’s Report, at p. 247).  Thus, water used on Indian reservations would be chargeable to the state within which the use was made.  The Supreme Court accepted this analysis, but it did not explain why.

Nevertheless, while the limited jurisprudence on this issue would take reserved rights from the allocation of the state in which the reservation is located, Arizona v. California may not establish a general rule for the allocation of Indian water rights.  Importantly, it seems that all parties (including the United States) agreed to this approach, so that the merits of an alternative approach may not have been fully ventilated.  Further, any broadly applicable rule may be limited by the Special Master’s reliance on the specific legal framework in that case, including the 1928 Boulder Canyon Project Act and pre-existing federal contracts for the delivery of water in the region.

Of the 24 interstate compacts dealing with the allocation of interstate water resources listed on the National Center for Interstate Compacts database, only nine mention Indian rights, and none use the phrase “federally reserved rights.”  The compacts that do refer to Indian rights generally do not deal with this issue beyond a boilerplate acknowledgement that nothing in the compact “shall be construed as affecting the obligations of the United States of America to Indian tribes,” such as the Colorado River Compact of 1922 and the Klamath River Compact of 1957.

Unfortunately, should a tribal claim to the use of surface water or groundwater be made, this boilerplate language is not helpful in divining who is responsible for satisfying such rights.  One exception to the silence on this issue is the Snake River Compact, which explicitly states that reserved Indian rights are to be deducted from the state allotments in which the reservation is located.  Similarly, the California-Nevada Compact of 1969, which is not technically in force as it never gained U.S. Congressional approval, specifically notes that “there is allocated to Nevada for use on the Walker River Indian Reservation a maximum of 13,000 acre-feet per year.”

Charging tribal reserved rights to state allocations, however, is not the only possible approach.  In Montana v. Wyoming, the Special Master noted Montana’s position that because the Northern Cheyenne Tribe’s water rights predated the Yellowstone River Compact of 1950—they dated to as early as 1881—the Tribe’s rights should take priority over both states’ post-1950 rights.  In 1991, Montana and the Tribe had agreed to the Northern Cheyenne-Montana Compact, which assigned the Tribe a 20,000 acre-foot storage right with a priority date “equal to the senior-most right for stored water in the Tongue River Reservoir,” which is April 21, 1937 (Thompson, second interim report, at 158).  Wyoming, however, expressed its concern that Montana should not be able to “give away” water rights to the Tribe and then ask Wyoming to curtail its own rights to make up any shortfall for Montana users.  Because neither the Tribe nor the United States were parties to the case, the Special Master did not consider the case to be an appropriate venue to decide the nature of the Tribe’s water rights.  Accordingly, this question remains to be decided another day.

Meanwhile, interstate compacts similarly neglect groundwater; only six interstate compacts contain any mention of groundwater, and these references are fairly cursory.  In the Bear River Compact and Klamath River Compact, for instance, groundwater is mentioned to clarify that it falls outside the scope of the surface water apportionment in the Compacts.  By contrast, the Alabama-Coosa-Tallapoosa River Basin Compact provides that “[w]ater resources” or “waters” means “all surface waters and ground waters contained or otherwise originating within the ACT Basin,” signaling an intention that the Compact applies to both sources.  The Upper Niobrara River Compact of 1962 treads a middle ground, as it is confined to surface water apportionment, but expresses an intention to later apportion groundwater as soon as “adequate data on ground water of the basin are available.”  Studies have subsequently been undertaken in the Upper Niobrara Basin, but some fifty years later, the Compact has not been updated to encompass groundwater.  In the absence of express wording in the relevant compact, the Supreme Court has found that surface water allocations can be extended to groundwater; this appears to represent the default position.  For instance, in Kansas v. Nebraska, the Supreme Court found that, although the Republican River Compact did not address groundwater, it could be framed to prevent groundwater use within a state that affected interstate surface water flows.

Who Should be Responsible for Satisfying Federal Rights?

Accordingly, how should future courts, and states while negotiating compacts, approach the allocation of liability to satisfy federal reserved rights water claims? As adverted to above, the dominant theory and practice is that, unless provided otherwise, reserved rights shall be charged to state allocations.  The possible basis for this approach is the argument that a compact made between states and ratified by Congress estops Congress from later asserting a federal interest to modify the specific allocation identified in the compact.  This is because compacts are authorized by the Compact Clause in the U.S. Constitution and then approved by Congress, so they may enjoy some measure of quasi-constitutional status.  However, Professor A. Dan Tarlock suggests that this legal position may be outdated in light of cases suggesting that an interstate compact cannot limit Congressional exercise of its power to regulate interstate commerce (see, e.g., Pennsylvania v. Wheeling).  A related explanation is a pragmatic one founded in the very purpose of interstate compacts.  That is, states enter into compacts, surrendering some of their sovereignty, to secure certainty of supply.  Allowing later federal claims to modify this allocation would risk upsetting and reopening established interstate compacts.  Professor Tarlock suggests that the best approach is to treat Indian claims as “analogous to interstate waters allocated to another state by interstate compact” (Tarlock, at p. 653).  This would involve federal claims being satisfied out of the state’s allocation.  Within that framework, he suggests that federal reserved rights would usually take priority over state uses (see, e.g., Hinderlider v. La Plata & Cherry Creek Ditch Co.).

Conversely, other states have taken the position that satisfaction of Indian rights is a basin-wide responsibility.  There are compelling arguments in support of this approach; it may be unfair to charge one state with responsibility for satisfying the entirety of a federal reserved claim to water in a shared water basin because in some cases, the quantum of the potential federal right may be greater than the state’s entire allocation (as may be the case in Arizona), or federal claims may arise in relation to already over-allocated basins.  This would upset the affected state’s interests under the compact and drastically change the nature of the bargain struck.

On a principled level, prior federal reserved rights generally preempt all subsequent state claims.  Therefore it is misleading for a state to talk about “giving away” water rights, as Wyoming argued in Montana v. Wyoming, because the federal reserved right was never within the state’s power to give.  Moreover, the concern expressed by the Tribe in that case was that characterizing their reserved rights as falling within the state’s allocation could result in relegation of that right.  Although in that case, this concern rests largely on the terms of the Yellowstone River Compact itself, broader vindication of tribal rights may weigh in favor of a basin-wide response.  This issue arises when we consider the dynamics of tribal water settlements, which are usually negotiated between the federal government, tribes and the relevant state.  A state that is required to satisfy any tribal settlement with its own water allocation alone may be more likely to take a hard-nosed approach to negotiations than one that has greater resources available from the basin.  Moreover, because the McCarran Amendment of 1952 waives federal sovereign immunity for adjudication tribal reserved water rights, these proceedings often take place in state courts, which have traditionally been seen as less sympathetic to Indian interests than federal courts.  Therefore, any federally reserved allocation arguably should not factor into the quantity of water that is available for division between states.

This distinction may be easier to draw on paper than in practice, particularly when states allocate water before federal claims are officially recognized, because it assumes that the federal reserved right is both fixed and quantifiable.  This is not necessarily the case, particularly when states are negotiating compacts where inchoate federal claims exist that have not yet been advanced.  That is, in order to reserve water for potential federal claims, it would be necessary to first identify the scope of such claims.  Moreover, where less information exists to guide management of groundwater, it may not be feasible to preemptively identify how much water needs to be set aside to insure against all possible future claims.  This is by no means a straightforward undertaking, and it would most likely require engagement with relevant federal and tribal interests.  The risk of this approach is that quantifying federally reserved rights is in itself a vexed and lengthy process, and so interstate co-management of water basins could be delayed.

While these issues complicate the matter, we suggest they are not insurmountable.  The existence of federally recognized tribes and reservations overlying groundwater is easily ascertainable, so it may be that, where possible, states should proactively reserve water based on the “practicably irrigable acreage” standard.  Further, an approach that prioritizes federal reserved rights may well encourage earlier, more meaningful engagement with tribal stakeholders when states negotiate water allocations.  Ultimately, it is important that tribal water rights are not undermined through the willful failure of states to address these issues.

Conclusion

These issues will only become more contentious and problematic as demand for water continues to grow, and as a changing climate leads to increasingly drought and scarcity in some parts of the American Southwest.  Greater demands will be placed on already stressed aquifers as groundwater is increasingly looked to as a supplemental source.  States should look not only to collaboration with both tribal and private parties, but to other states in attempting to proactively address these inevitable problems.

Sarah Hoffman, L.L.M. Candidate, Stanford Law School, expected 2016

Miles Muller, J.D. Candidate, Stanford Law School, expected 2018

Image: Tahquitz Rock, part of the San Jacinto Mountains in Idyllwild, California.  Flickr user Don Graham, Creative Commons.

SOURCES

Cases / Compacts

Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water Dist., No. EDCV 13-883-JGB, 2015 U.S. Dist. LEXIS 49998 (C.D. Cal. Mar. 20, 2015).

Alabama-Coosa-Tallapoosa River Basin Compact, Pub. L. No. 105-105, 111 Stat. 2233 (1997).

Bear River Compact, Pub. L. No. 85-348, 72 Stat. 38 (1958).

California-Nevada Compact for Jurisdiction on Interstate Waters, Cal. Water Code § 5976 (West 2016).

Hinderlider v. La Plata & Cherry Creek Ditch Co., 304 U.S. 92 (1938).

Kansas v. Nebraska, 574 U.S. ___ (2015).

Klamath River Compact, 71 Stat. 497 (1957).

Pennsylvania v. Wheeling, 59 U.S. 421 (1856).

Snake River Compact, 64 Stat. 29 (1950).

Upper Niobrara River Compact of 1962, Pub. L. No. 91-52, 83 Stat. 86 (1969).

Winters v. United States, 207 U.S. 564 (1908).

McCarran Amendment of 1952, 43 U.S.C. § 666 (1988).

Secondary Sources

A. Dan Tarlock, One River, Three Sovereigns: Indian and Interstate Water Rights, 22 LAND & WATER L. REV. 631 (1987).

Barton Thompson, SECOND INTERIM REPORT OF THE SPECIAL MASTER, MONTANA V. WYOMING, Oct. Term 2014 (Dec. 29, 2014).

DOUGLAS S. KENNEY, NATURAL RES. LAW CTR., UNIV. OF COLO. SCH. OF LAW, WATER ALLOCATION COMPACTS IN THE WEST: AN OVERVIEW (2002).

John Leshy, Interstate Groundwater Resources: the Federal Role, 14 HASTINGS W.-NW. J. ENVTL. L. & POL’Y 1475 (2008).

National Center for Interstate Compacts, State Search, http://apps.csg.org/ncic/.

Simon Rifkind, REPORT OF THE SPECIAL MASTER, ARIZONA V. CALIFORNIA, Oct. Term 1960 (Dec. 5, 1960).

Robert T. Anderson, Indian Water Rights, Practical Reasoning, and Negotiated Settlements, 98 CAL. L. REV. 1133 (2010).


Casitas Mun. Water Dist. v. United States, 708 F.3d 1340 (Fed. Cir. 2013) (holding that (1) the municipal water district’s compensable water right was constitutionally limited by the amount of water the license granted for beneficial use and (2) a diversion potentially constituting a compensable taking of the water district’s water right had not yet occurred, rendering the district’s claim not ripe for adjudication).

Constructed pursuant to a contract between the Casitas Municipal Water District (“Casitas”) and the U.S. Bureau of Reclamation (“BOR”), the Ventura River Project (“Project”) provides water to residential, industrial, and agricultural customers in Ventura County, California.  Ownership of the Project remained with BOR while the agreement gave operational responsibilities to Casitas as well as a perpetual right to all the water that became available through the Project.  The contract also required Casitas to apply to the California State Water Resources Control Board (“SWRCB”) to appropriate the water necessary for the Project.  SWRCB issued Casitas the requisite license in May 1956, and Casitas began operating the Project three years later.  The license stipulated that Casitas could divert up to 107,800 acre-feet per year into the Project and put up to 28,500 acre-feet per year to beneficial use.

In order to avoid civil and criminal liability under the Endangered Species Act (“ESA”) following the listing of the West Coast steelhead trout, Casitas began exploring ways to mitigate the Project’s impact on the steelhead population in the Ventura River.  Following consultation with local water agencies and the National Marine Fisheries Service (“NMFS”), Casitas concluded that the most effective way to achieve mitigation would be to improve upstream access to steelhead habitats.  In 2003, NMFS issued an incidental take permit allowing Casitas and BOR to avoid ESA liability if they agreed to construct and maintain a fish ladder to allow migrating steelheads to safely bypass the Project.  NMFS also required Casitas to divert sufficient water from the Project in order to allow passage through the ladder.  Casitas opened the fish ladder under protest on December 9, 2004.

On January 26, 2005, Casitas filed suit in the United States Court of Federal Claims (“trial court”).  Casitas first asserted that the United States had breached the terms of the 1956 contract by forcing Casitas to divert water through the fish ladder.  Alternatively, Casitas asserted that, by imposing the diversion requirement, the United States had physically taken Casitas’ constitutionally protected property without just compensation, in violation of the Fifth Amendment.  The trial court dismissed the contract claim under the sovereign acts doctrine and entered summary judgment for the government on the takings claim.

Casitas appealed and the United States Court of Appeals for the Federal Circuit (“court”) affirmed the dismissal of Casitas’ contract claim.  The court reversed the granting of summary judgment on the takings claim, however, and remanded for further proceedings on that issue.  On remand, the trial court held that, for purposes of a takings claim, California law limits a licensee’s compensable water right to its right to beneficial use.  Even though NMFS had forced Casitas to divert water into the fish ladder, the trial court held that the diversion had not forced Casitas to actually deliver less water to its customers than it would have otherwise.  The trial court dismissed Casitas’ takings claim on grounds that the claim was not yet ripe and Casitas appealed.

On appeal, Casitas claimed that, in its first appeal, the court had held that a physical taking had already occurred due to the fish ladder diversion, and thus the trial court erred by conducting its own takings analysis on remand.  The court held that Casitas had interpreted its opinion in the first appeal too broadly.  First, Casitas erroneously relied on concessions that the government had only stipulated to in order to put the case in a posture for summary judgment.  Second, the court held that neither it nor the trial court had addressed the actual scope of Casitas’ water right prior to the appeal at bar.  The court held that the trial court had not erred in conducting a complete physical takings analysis on remand.   Moreover, the court upheld the trial court’s holding that under California water law, a court will not find a compensable taking unless the government action complained of has actually impacted a licensee’s beneficial use.

Casitas then challenged the trail court’s holding that the diversion through the fish ladder would not impinge on Casitas’ right to beneficial use until such time as the diversion caused Casitas to deliver to its customers less water than it otherwise would have.  The court found that this was the correct measure of a physical taking in this context and that Casitas had failed to show that the fish ladder diversion had actually impinged on Casitas’ deliveries to its customers.

Casitas also argued that its water license was evidence that the SWRCB had already determined that Casitas could beneficially use all 107,800 acre-feet of diversions allowed to it under the license.  Thus, Casitas argued, it had a compensable right to this entire amount.  The court first confirmed the trial court’s holding that California does not recognize a compensable property right in water that a licensee diverts but never puts to a beneficial use.  The court then held that a maximum limit on diversion in the license did not establish that the SWRCB had determined that Casitas could in fact put that maximum amount to beneficial use.  The court likewise pointed to the fact that the SWRCB had expressly limited Casitas’ beneficial use under the license to 28,500 acre-feet per year, thus limiting Casitas’ compensable right to that amount.

Casitas next claimed that diverting water for storage was a per se beneficial use, compensable under a takings claim.  The court disagreed, holding that California water law does not recognize storage as a per se beneficial use, but simply as a means to a beneficial end.  Likewise, the license itself limited Casitas’ right to an enumerated list of beneficial uses, mere storage not among them.

Casitas also asserted that its takings claim had begun to accrue the moment that NMFS took the regulatory action requiring Casitas to divert water through the fish ladder.  Casitas argued that it was this regulatory action potentially causing a property injury, here the NMFS diversion requirement, and not the injury itself that gave rise to its takings claim.  However, the court held that a physical takings claim only accrues when the physical act constituting the taking occurs, not at the time of the regulatory action potentially causing a taking.  Under this rubric, Casitas would have had to show that the fish ladder diversion had physically impinged on its right to beneficial use, which is to deliver water to its customers.  Because Casitas made no such showing, the court affirmed the trial court’s dismissal of Casitas’ takings claim as not ripe.

In conclusion, the Federal Circuit held that California water law limits a licensee’s compensable water right to the right to beneficial use.  The court held that Casitas’ takings claim was therefore not ripe because a governmental action physically impinging on its right to beneficial use had not yet occurred.  The court affirmed the trial court’s decision to dismiss Casitas’ complaint without prejudice.

 

The title picture is of Lake Casitas, located in southern California.


Background

The Colorado River Basin (“the Basin”) spans parts of seven western states: Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming.  The Basin currently provides water to around 40 million people and 4 million acres of irrigated agricultural land, making it one of most important watersheds in the western United States.  Beginning in January of 2010 and lasting for three years, the Department of the Interior funded a supply and demand study of water use in the Basin through the Bureau of Reclamation and its WaterSMART program.  Completed in December 2012, the published full report of the Colorado River Basin Water Supply and Demand Study (“Study”) can be found in the links provided below.

 

The Study

The Study evaluated future imbalances in the watershed over the next 50 years, up to year 2060.  The Study, however, did not result in any decision on how exactly the future imbalances will be addressed.  Performed in four phases, the Study (1) assessed the water supply of the watershed; (2) assessed the demands for water within the basin; (3) analyzed the reliability of the computer models; and (4) developed and evaluated strategies to decrease the imbalance. The Study found the average imbalance between supply and demand for water would be more than 3.2 million acre-feet.  Most of this imbalance is due to an increase in demand from municipal and industrial users because of an estimated doubling of the population within the Basin.  The study estimated that by 2060 the population could be approximately 76.5 million people.

 

It is important to note that any future water supply and demand scenarios predicted within the watershed are highly uncertain because an infinite number of possibilities exist.  While no study will be exact, the Bureau of Reclamation analyzed four different scenarios for both supply and demand.  On the supply side, four scenarios exist: (1) an Observed Resample scenario that looked at water tends over the past 100 years; (2) a Paleo Resampled scenario that looked at water trends over the past 1,250 years; (3) a Paleo Conditioned scenario that looked at water trends over the past 1,250 years but conditioned on the water values observed over the past 100 years; and (4) a Downscaled GCM Projected scenario estimating that the climate will continue to warm substantially over the next few decades.  This last scenario estimated that the natural water flow within the basin will decrease by approximately 9% over the next 50 years.  On the demand side, four scenarios also exist: (1) a Current Projected Growth model; (2) a Slow Growth model; (3) a Rapid Growth model; and (4) an Enhanced Environment Growth model accounting for enhanced environmental stewardship.  All the scenarios were then run in different combinations through the Colorado River Simulation System in RiverWare software, obtaining a range of potential future system conditions.

 

The Study next evaluated more than 150 options and strategies on how to resolve imbalances in the watershed.  The options and strategies can be generally organized into four groups.  The first group included options that increase water supply such as reuse, desalination, and importation.  The second group included options that reduce water demand from both M&L and agricultural conservation.  The third group included options that modify operations such as transfers & exchanges and water banking.  Finally the last group included options that focus on governance and implementation of water such as stakeholder committees, population control, and reallocation.

 

Finally, the Study listed ten general areas of options and strategies seeking to resolve water imbalances that are realistic to implement within the watershed: water conservation and reuse; water banks; watershed management; augmentation; water transfers; tribal water; environmental flows; data and tool development; climate science research; and partnerships.  The Bureau of Reclamation closed public comments on the Colorado River Basin Water Supply and Demand Study on April 19, 2013, and all comments will be summarized and considered in planning activities.

 

Brief Comments on the Study

The best solution laid out in the Study is water conservation.  Because irrigated agriculture is responsible for approximately 70% of watershed water use, conservation is this sphere could result in significant savings.  Effective conservation can also occur in cities by reducing water use in outdoor landscapes because half of all city water use is involved in such endeavors.  With desalination technology rapidly evolving, it could become another very attractive option.  Desalination projects do occur in other countries, but the energy cost and cost of recovery are still very high.


Sources: