August 8, 2017

Are there federal reserved rights to groundwater?

By Damien M. Schiff Senior Attorney
The Coachella Valley, a sere and torrid land (photo by Tim Shell)

That is the question being asked of the United States Supreme Court in two cert petitions filed last month, Desert Water Authority & Coachella Valley Water District v. Agua Caliente Band of Cahuilla Indians. Succinctly, the doctrine of federal reserved water rights creates a presumption that when the federal government withdraws land from the public domain (for, say, an Indian reservation or a national forest), the government also impliedly reserves the right to sufficient water to fulfill the purpose of the land withdrawal. Sounds reasonable enough, right? Well, not quite.

The trouble is that, at least as applied to groundwater, the doctrine raises a significant risk of the uncompensated taking of non-federal rights—a point that the Ninth Circuit Court of Appeals entirely failed to address in its decision below, but which we highlight in our amicus brief supporting the cert petitions.

Federal reserved water rights haven’t been the subject of much takings analysis. The reason for that inattention owes to the form of water right that is usually in play in reserved water rights disputes. Typically, such rights have been asserted in contexts where the governing state law is prior appropriation, a doctrine which adheres to the rule of “first in time, first in right.” For a federal reserved water right, the priority date is the date the reservation was created; any right with an appropriation date later than that is necessarily junior to the reserved right. In the usual scenario, a federal reserved water right operates like a background principle of property law.

That is significant because government regulation that is consistent with such a background principle does not violate the Fifth Amendment’s prohibition on the taking of private property for public use without just compensation. Thus, federal reserved water rights cannot infringe appropriative rights acquired after a reservation, because any apparent infringement merely reflects a limitation inherent in the title of appropriators who are junior to the reserved (and thereby senior) water right.

But the constitutional fit between a federal reserved water right in groundwater and the rights of other groundwater users is much poorer, because groundwater often is governed by legal regimes other than prior appropriation. In fact, prior appropriation is only one of several state-law systems regulating groundwater, which include “absolute dominion,” “riparianism,” and “correlative rights.” Although differing among themselves in the particulars, none of these non-appropriation regimes depends on seniority of use.

It therefore follows that 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, does it make sense to presume without specific evidence that the federal government intended to take the property rights of its citizens? The Ninth Circuit’s decision gives no attention to this critical point. That is why PLF believes that the Supreme Court should take up the case.

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Desert Water Authority & Coachella Valley Water District v. Agua Caliente Band of Cahuilla Indians

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.

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