Friday, December 22, 2017

Big Development for Water in the West - Federal Implied Reserved Water Rights Doctrine Applies to Groundwater


Water issues are big in the West.  Couple that fact with the fact that the Federal Government owns about 28 percent of the land area of the United States, with approximately 50 percent of that amount is concentrated in 11 Western states (excluding Alaska).  Recently, a federal appeals court held that that the federal implied reserved water rights doctrine categorically extends to groundwater.  The court’s decision could have significant implications for the usage of water in the West – a very big issue for affected farmers and ranchers.  It could also have an impact on water policy. 

For today’s blog post, I asked Washburn Law School’s water law expert, Prof. Burke Griggs, to take a look at the recent case and project the important implications for agriculture and Western water policy in general.  Here’s what Burke had to say:

Western Water Rights

Across the West, most water rights are granted under and governed by state law. Federal law touching on water rights has generally deferred to state law, most prominently in legislation such as the General Mining Law of 1872, the Desert Land Act of 1877, and the Reclamation Act of 1902. Since Winters v. United States, 207 U.S. 564 (1908), however, the Supreme Court has recognized that Native American tribes can be entitled to water rights under federal law, rights that supersede many of these state rights. Specifically, when the United States withdraws land from the public domain and reserves it for a particular federal purpose—as for a reservation intended to be the permanent home for a Native American tribe—then the federal government has impliedly reserved sufficient unappropriated water supplies required to effect the purpose of the reservation. These federal implied rights are based upon the belief that the United States, when establishing Indian reservations, “intended to deal fairly with the Indians by reserving for them the waters without which their lands would have been useless.” Arizona v. California, 373 U.S. 546, 600 (1963).

The Winters doctrine thus reserves water to the extent it is necessary to accomplish the purpose of the reservation, and it only reserves water if it is appurtenant, or connected to, the land that has been withdrawn and reserved. Once established, however, Winters rights vest on the date of the reservation, and are thus superior to the rights of future appropriators; and unlike most state-law granted water rights, they are also immune from abandonment. Because most western states follow the prior appropriation doctrine—first in time, first in right—Winters inserted a substantial exception into the operation of their water rights systems. This was due both to the seniority of tribal rights (which antedate most state law water rights, since most Indian reservations were established in the nineteenth century) and the size of the rights (which are large, because they must be sufficient to satisfy irrigation rights - the usual, agrarian purpose of the reservations). For example, the Winters right of the Kickapoo Tribe in Kansas dates from 1834—twenty years before Kansas became a territory pursuant to the Kansas-Nebraska Act of 1854, and twenty-seven years before it became a State. 

Since the 1970’s, many western tribes have obtained recognition of their Winters rights, primarily through state law water-rights adjudications. The United States holds substantial water rights across the West, not only in its trustee capacity for Native American Tribes, but also for national monuments, national forests, and other public lands. But because the United States generally enjoys sovereign immunity from state court proceedings, Congress enacted the McCarran Amendment, 43 U.S.C. § 666, which waives that sovereign immunity so that the United States must participate in such state court adjudications. Because, pursuant to Winters, tribes frequently hold some of the most senior and largest water rights in the basins at issue, the extent of their Winters rights has figured prominently in these adjudications.  In addition, because groundwater has become a major source of supply for irrigators and other water users across the West since Winters, these state-court adjudications have been forced to address the issue of whether Winters rights extended to groundwater.

For the most part, state courts have held that Winters rights do extend to groundwater. See, e.g., In re Gen. Adjudication of All Rights to Use Water in Gila River Sys. & Source, 989 P.2d 739 (Ariz. 1999). The logic behind such an extension should be uncontroversial, at least from a hydrological standpoint; surface and groundwater supplies are connected to one another. As the Arizona Supreme Court wrote in the Gila case, “some [Indian] reservations lack perennial streams and depend for present and future survival substantially or entirely upon pumping of underground water. We find it no more thinkable in the latter circumstance than in the former that the United States reserved land for habitation without reserving the water necessary to sustain life.” Id. at 746.  State courts and federal district courts deciding the issue of whether Winters rights extend to groundwater have mostly held in the affirmative, or have refused to exclude groundwater from the scope of Winters. See, e.g., Tweedy v. Texas Co., 286 F. Supp. 383 (D. Mont. 1968) and Confederated Salish and Kootenai Tribes v. Stults, 59 P. 3d 1093 (Mont. 2002); see also United States v. Washington Dep’t of Ecology, 375 F. Supp. 2d 1050 (W.D. Wash. 2005). Wyoming has held otherwise. See In re the General Adjudication of All Rights to Use Water in the Big Horn River System, 753 P.2d 76 (Wyo. 1988), aff’d by an equally divided Court, Wyoming v. United States, 492 U.S. 406 (1989). 

Recent Case

In Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, 849 F.3d 1262 (9th Cir. 2017), the court held that the federal implied reserved water rights doctrine, first established in Winters, categorically extends to groundwater.  The case is notable as the first federal appellate case to reach a decision on this issue, and its reasoning follows multiple state court decisions across the West.  On November 27, 2017, the U.S. Supreme Court denied certiorari in the first phase of the case, allowing the Ninth Circuits holding to stand.  Coachella Valley Water District v. Agua Caliente Band of Cahuilla Indians, No. 17-40, Vide No. 17-42, 2017 U.S. LEXIS 7044 (U.S. Sup. Ct. Nov. 27, 2017).

Background.  The case arose as a declaratory judgment action (where the court determines the rights of the parties without ordering any action be taken or that damages be awarded) brought by the Agua Caliente Band of Cahuilla Indians (“Tribe”), seeking a declaration that the Tribe was entitled to federal water rights that supersede state law—including rights to groundwater that lie beneath the tribe’s reservation. The most important of these rights, as noted above, is the federal implied reserved water right first established in Winters

The Agua Caliente case was brought outside of the context of a state-court adjudication. Indeed, in many respects, the case does not present the usual facts of a reserved water rights claim. The Tribe’s reservation in the Coachella Valley of California dates to 1876-77, and consists of approximately 31,000 acres interspersed in a checkerboard pattern amid several cities within Riverside County, including Palm Springs, Cathedral City, and Rancho Mirage. By placing the Tribe on the reservation, the United States sought to protect the Tribe and, in the words of the Commissioner of Indian Affairs in 1877, secure them “permanent homes, with land and water enough.” Unfortunately, the Coachella Valley receives less than six inches of precipitation annually, and the Whitewater River System—the only supply of surface water in the area— can only provide between 4,000 and 9,000 acre-feet of water every year, most of which flows during the winter months. Therefore, almost all of the water in the valley comes from the underlying aquifer—the Coachella Valley Groundwater Basin (“Basin,”) which supports nine cities, 400,000 people, and 66,000 acres of farmland. Given the size of this cumulative demand, it is no surprise that pumping vastly exceeds recharge in the basin by 240,000 acre-feet per year. By 2010, the aquifer had become over-drafted by 5.5 million acre-feet. The Tribe, however, does not pump groundwater from its reservation lands. Rather, it obtains most of its water supplies by purchasing groundwater from the defendant water agencies—the Coachella Valley Water District and the Desert Water Agency (“water agencies”). (The Tribe also holds a small surface-water right from the Whitewater River, pursuant to a 1938 state court decree.)

Trial court.  Alarmed by the state of groundwater overdraft in the Basin, the Tribe brought its suit against the water agencies in 2013, seeking a declaration that the Tribe had Winters rights extending to the groundwater supplies in the Basin. In 2014, the United States, acting in its trustee capacity for the Tribe, successfully intervened in the case, and also alleged that the Tribe enjoyed Winters rights. In 2015, the district court held that the reserved rights doctrine applies to groundwater, and that the United States had reserved appurtenant groundwater for the Tribe when it established the Tribe’s reservation in the Coachella Valley. The water agencies perfected an interlocutory appeal whereby the appellate court (the U.S. Court of Appeals for the Ninth Circuit) would rule on the issue of Winters rights before the trial concluded. 

Ninth Circuit.  Given the diversity of state court decisions concerning whether Winters rights extend to groundwater, and the lack of a federal appellate decision on the issue, the appeal provided the first opportunity for a federal appeals court to rule on the issue. In a straightforward decision, the Ninth Circuit upheld the trial court’s decision extending Winters rights to groundwater. The court based its decision on three related holdings. First, it held that the United States clearly intended to reserve water under federal law when it created the Tribe’s reservation. The appellant water agencies argued that Winters and its progeny should not apply in this case, because the Tribe has been able to satisfy its water needs by purchase from them.  Thus, according to the water agencies, the Tribe should be treated as any other private water user obtaining its water rights under state law.  The Ninth Circuit disagreed, noting that the underlying purpose of the reservation was to establish a tribal homeland supporting an agrarian society.  That purpose would be entirely defeated, the court reasoned, without sufficient water supplies held under federal law. Thus, the Tribe was entitled to a reserved water right for the Agua Caliente Reservation. 

Next, the Ninth Circuit held that the Tribe’s Winters right extended to groundwater. In so holding, the court cited the Arizona Supreme Court’s holding in the Gila River case.   It was necessary for the Tribe to access groundwater in the Coachella Valley Basin because surface supplies were clearly inadequate—a reservation without an adequate supply of surface water must be able to access groundwater as well. Thus, the court held that the reservation and establishment of the Agua Caliente Reservation carried with it an implied federal reserved right to use water from the aquifer.

Neither of the Ninth Circuit’s first two holdings seems controversial, given the logic and the scope of Winters and its progeny.  However, the third and final holding addressed a more complicated issue: how the Tribe’s Winters right exists in relation to water rights recognized under California state water law. California (like Nebraska and Arizona, to name two) follows the reasonable use/correlative rights doctrine for groundwater.  At the Ninth Circuit, the water agencies argued that the Tribe’s state law water rights rendered its claim for Winters rights unnecessary.  Their argument was layered: 1) because the Tribe enjoys correlative water rights under California law; and 2) because the Tribe has not drilled for water under the Agua Caliente Reservation; and 3) because the Tribe held some (but not sufficient) surface water rights under state law pursuant to the 1938 state court adjudication of the Whitewater River, then the Tribe, according to the water agencies, did not need a federal reserved right to prevent the purposes of the reservation from being entirely defeated. The Ninth Circuit rebuffed the agencies’ argument.  It determined that 1) the Tribe’s Winters rights pre-empted state water rights; 2) the Tribe’s lack of groundwater pumping did not defeat those Winters rights, because they are immune from abandonment; and 3) the proper inquiry was not one of current necessity, but whether water was envisioned as necessary for the reservation’s purpose at the time the reservation was created. Thus, the Ninth Circuit held, the issue of the Tribe’s state law-based water rights did not affect the existence of its Winters water right. In sum, the Ninth Circuit’s analysis produced a categorical holding: Winters always applies as a matter of federal pre-emption, regardless of how a state allocates groundwater rights.

Supreme Court Review?

The Ninth Circuit’s decision provoked substantial amicus participation on appeal to the Supreme Court. States as legally diverse as Minnesota and Nevada, as well as property-rights advocacy groups such as the Pacific Legal Foundation, submitted amicus briefs. Both the appellants and the amici supporting them made two general arguments in opposition to the Ninth Circuit’s holding:  1) that Winters should be limited to surface water supplies governed by state-law prior appropriation regimes (such as Montana, where Winters originated); and 2) that the Ninth Circuit’s holding will interfere with and even take long-established groundwater rights secured under state law. The Supreme Court’s denial of certiorari, like all of its denials, did not give its reasons.


The arguments involved Agua are important arguments to make, especially as groundwater has become the dominant supply of water across the West. However, the logic of Winters presents formidable obstacles to limiting its scope to surface water supplies only—especially in the Coachella Valley and other desert basins which lack substantial surface water supplies. The Court’s denial of certiorari has allowed the Ninth Circuit’s decision to stand.

The Ninth Circuit’s decision also has important implications for California, which enacted the Sustainable Groundwater Management Act (SGMA) in 2014, an ambitious act that requires local “groundwater sustainability agencies” to establish sustainable groundwater management plans during the next decade or so. Because the Ninth Circuit’s decision establishes strong (and largely non-negotiable) rights for tribes within California’s groundwater basins, it probably complicates the already formidable task of achieving the necessary goal of groundwater management at the level of sustainability.

Across the West, the other implications of the decision likely depend upon what remains the primary vehicle through which tribal rights are clearly established: basin-wide adjudications of water rights undertaken in state courts pursuant to the McCarran Amendment.

P.S.  Absent anything of major significance in the ag law and tax world next week, this is the final post of 2017.  However, that doesn’t mean that I will be sitting idly by.  I will be continuing to prep two courses for the spring semester – one for the law school and one for Kansas State University.  I will also be updating my treatise for the changes triggered by the new tax law and other relevant developments, and preparing materials for the Jan. 10 seminar/webinar on the new tax law.  In addition, travel begins on Jan. 4 as I head for engagements in Illinois and Tennessee before the Jan. 10 event.  Radio and TV interviews also continue as usual next week.  The next post is scheduled for January 1 and will be Part 1 of the top ten ag law and tax developments of 2017. 

To all of my readers, have a wonderful Christmas with your families!  See you on January 1.

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