A federal “reservation” of groundwater implicates takings liability for users exercising state water rights

The Agua Caliente tribe resides on a federal reservation that consists of a patchwork of parcels throughout California’s Coachella Valley. The tribe runs several commercial enterprises on the land, including casinos, hotels, and the like. Under California law, the tribe shares rights to the valley’s groundwater with other cities, water agencies, and individuals whose property overlies the water. Under the federal reservation of water rights doctrine, however, whenever the federal government withdraws land from the public domain (for an Indian reservation or national forest) it impliedly reserves the right to sufficient water to fulfill the purpose of the law withdrawal.

The problem is that there is a poor constitutional fit between a federal reserved water right in groundwater and the rights of other groundwater users because groundwater often is governed by legal regimes such as “absolute dominion,” “riparianism,” and “correlative rights,” which do not depend on seniority of use. The insertion of a federal reserved groundwater right into such a non-appropriation jurisdiction will frustrate the existing groundwater rights of overlying owners substantially more than in a prior appropriation system. Such a right’s assertion in a non-appropriation context will result in competing uses’ being deemed unreasonable per se, or in their subordination to the reserved right’s full satisfaction. Either outcome puts overlying owners in a substantially weaker position because their rights will no longer be truly correlative (or, for that matter, riparian or absolute) as compared to a trumping federal reserved right. Such an overriding effect could well result in a taking of non-federal groundwater rights. Given that the doctrine of reserved rights is based on implied intent, PLF believes it makes no sense to presume without specific evidence that the federal government intended to take the property rights of its citizens.