Tuesday, February 7, 2017

Prior Appropriation – First in Time, First in Right

Overview

Water has a significant influence on agriculture in the United States.  Over time, different systems for allocating water have developed.  Most of the United States west of the 100th Meridian utilizes the prior appropriation system for purposes of allocating water.  The prior appropriation system is based on a recognition that water is more scarce, and establishes rights to water based on when water is first put to a beneficial use.  The doctrine grants to the individual first placing available water to a beneficial use, the right to continue to use the water against subsequent claimants.  Thus, the doctrine is referred to as a “first in time, first in right” system of water allocation. The oldest water right on a stream is supplied with the available water to the point at which its state-granted right is met, and then the next oldest right is supplied with the available water and so on until the available supply is exhausted.  In order for a particular landowner to determine whether such person has a prior right as against another person, it is necessary to trace back to the date at which a landowner's predecessor in interest first put water to a beneficial use.  The senior appropriator, in the event of dry conditions, has the right to use as much water as desired up to the established right of the claimant to the exclusion of all junior appropriators. 

Water rights in a majority of the prior appropriation states are acquired and evidenced by a permit system that largely confirms the original doctrine of prior appropriation.  The right to divert and make consumptive use of water from a watercourse under the prior appropriation system is typically acquired by making a claim, under applicable procedure, and by diverting the water to beneficial use.  The “beneficial use” concept is basic; a non-useful appropriation is of no effect.  What constitutes a beneficial use depends upon the facts of each particular case.

As applied to groundwater, the prior appropriation doctrine holds that the person who first puts groundwater to a beneficial use has a priority right over other persons subsequently desiring the same water.  This doctrine is applied in many western states that also follow the prior appropriation doctrine with respect to surface water.  In many of these states, appropriation rights are administered through a state-run permit system.

A water dispute testing the application of the prior appropriation doctrine to groundwater rights in western Kansas had a recent significant development.  Today’s post explaining the case are the thoughts of Professor Burke Griggs of Washburn School of Law.  Prof. Griggs is part of our Rural Law Program at the law school.  Before joining the law school in 2016, Prof. Griggs   represented the State of Kansas in federal and interstate water matters, and has advised Kansas' natural resources agencies on matters of natural resources law and policy. He has also been engaged in the private practice of law. 

Facts of the Case

On February 1, 2017, the Haskell County Kansas District Court issued its latest decision in Garetson Bros. v. American Warrior et al., (Dist. Ct. No. 2012-CV-09).  The case involves a longstanding dispute between rival groundwater pumpers in southwestern Kansas (just west of the 100th Meridian). Applying a fundamental principle of Kansas water law—first in time, first in right— the court protected the plaintiffs’ senior well and groundwater right from impairment by issuing a permanent injunction prohibiting the use of the defendants’ junior rights.  Although the case stands for the simple proposition that the prior appropriation doctrine grants senior rights holders the right to enjoin junior groundwater diversions which are impairing their senior rights, the court’s application of the doctrine to groundwater rights which access the Ogallala Aquifer may well produce regulatory and political reactions that are anything but simple.  

In terms of Kansas water law, the case is relatively straightforward. The Garetsons own a senior, vested (pre-1945) groundwater right, which depends on the same local source of groundwater supply as two neighboring and junior groundwater rights held by American Warrior, an oil and gas production company.  In 2005, the Garetsons filed an impairment complaint with the Kansas Department of Agriculture’s Division of Water Resources (DWR), so that DWR could investigate and resolve the dispute according to K.A.R. § 5-4-1a, which sets forth a detailed procedure for addressing impairment complaints for water from Ogallala Aquifer water sources.  For reasons not set forth in the decision, the Garetsons withdrew their complaint in 2007, but later in 2012 sued to obtain an injunction against American Warrior’s pumping, claiming a senior water right under the Kansas Water Appropriation Act (“KWAA”).  In November of that year, the trial court appointed the DWR as a fact-finder pursuant to the limited reference procedure set forth at K.S.A. § 82a-725.  The DWR filed its first report on April 1, 2013, which found that the Garetson well was being impaired by the two American Warrior wells.  Based on the DWR’s uncontested finding of impairment, the Garetsons obtained a preliminary injunction shortly thereafter. After several rounds of motion pleading, the DWR issued its second report on March 27, 2014, also finding impairment, and the court issued a second temporary injunction on May 5 of that year, ordering the curtailment of pumping from the defendant’s two wells. 

The Appellate Decision and Remand

The defendants timely filed an interlocutory appeal to reverse the temporary injunction.  In 2015, the Kansas Court of Appeals affirmed the district court’s granting of the injunction and remanded the case back to Haskell County. Garetson Bros. v. Am. Warrior, Inc., 347 P.3d 687, 51 Kan. App. 2d 370 (2015), rev. den., No. 14-111975-A, 2016 Kan. LEXIS 50 (Kan. Sup. Ct. Jan. 25, 2016).

The resolution of the central issue on appeal effectively decided the issue on remand.  The issue centers on the two distinct definitions of “impairment” under the KWAA. Within the context of reviewing new applications for water rights pursuant to K.S.A. §§82a-711 and 82a-711a, the DWR uses one definition: “impairment shall include the unreasonable raising and lowering of the static water level . . . at the [senior] water user’s point of diversion beyond a reasonable economic limit (emphasis added). However, when the DWR is called upon to protect senior water rights from impairment by already-existing junior water rights, that impairment standard does not include the “beyond a reasonable economic limit” qualifier. K.S.A. §§ 82a717a, 82a-716. Because this dispute concerned the latter situation, the Court of Appeals declined defendant-appellant’s efforts to apply the former definition of impairment, and upheld the injunction.

Remanded back to Haskell County, and before a different judge, the court held hearings in October of 2016. Central to the record in the case were the findings by both the Kansas Geological Survey and the DWR that groundwater levels were declining in the area, and that the defendants’ junior groundwater pumping was responsible for substantially impairing the plaintiffs’ senior right. With these principal conclusions established in the record, the court applied the standard test for permanent injunctions, and found that a permanent injunction should issue in this case. In making that finding, the trial court judge followed the “ordinary definition of impair” [pursuant to K.S.A. §§ 82a-716 and 82a-717] which the legislature intended should apply in situations such as this, where the senior right holder seeks injunctive relief to protect against diversions by junior water right holders, when the diversion “diminishes, weakens, or injures the prior right.”  In deciding that an injunction against the defendant’s junior rights should issue, the court declined to adopt a remedy suggested by the DWR in its second report—that the junior water rights surrounding Garetson’s (including those owned by non-parties) could be allowed to operate on a limited and rotating basis. In declining to adopt that remedy, the court stressed that it “does not wish to draft an order that would micro-manage future use” by the junior rights.

Conclusion

The prior appropriation doctrine means what it says when it comes to protecting senior water rights to the Ogallala Aquifer - first in time is first in right.  In addition, “impairment” means “impairment,” unqualified by economic reasonableness. Whether Kansas irrigators and the Kansas legislature can accept such clarity will be the subject of a subsequent post, where we will speculate on what type of legislative reaction the case might provoke.

https://lawprofessors.typepad.com/agriculturallaw/2017/02/prior-appropriation-first-in-time-first-in-right.html

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