Lawyers discuss the history and importance of reasonable use law, and ponder its future use
The California Water Law Symposium, now in its eleventh year, is a unique collaboration among Northern California law school students that focuses on discussion and analysis of California water issues by leading water law and experts. At the symposium, six panels tackled a variety of issues, including the Russian River frost protection regulation, agricultural water efficiency, and fair pricing and the right to human water.
To kick off the symposium, Professor Paul Kibel with Golden Gate University School of Law, Harrison “Hap” Dunning with the UC Davis School of Law, and John Leshy with UC Hastings College of the Law discussed the importance of the history of reasonable use law.
PAUL KIBEL, Golden Gate University School of Law
To introduce the topic of California’s reasonable use law, Professor Paul Kibel started with a story. “In 1926 the California Supreme Court issued its decision in the case of Herminghaus versus Southern California Edison,” he said. “The Herminghaus litigation involved a dispute between a downstream [riparian] user, water rights user, proposed upstream hydroelectric project under an appropriate waterway. The downstream riparian user had a ranch in which they frequently diverted the entirety of the river for pasture to irrigate the grasses on the land, and the downstream riparian user claimed that the upstream hydroelectric project was going to interfere with that riparian use.”
“But at trial, little or no information was actually submitted about the actual livestock use of the grassland,” Mr. Kibel said. “It was summarily alleged this was the use, but they didn't talk about the types of livestock and the numbers that will run on the land. In its 1926 decision in Herminghaus, California Supreme Court found that the extent to which the grasses were actually used for grazing was legally irrelevant. And they reached this on the basis that they said in a dispute between a riparian and a non-riparian, the riparian's water use is ‘not limited by any measure of reasonableness.'”
The decision was broadly criticized, because even in 1926, the state was facing strained freshwater sources, he said. “To many it just seemed untenable for the law to uphold a doctrine in which the unreasonable and wasteful use of water by anyone was found to be legitimate,” he said.
Mr. Kibel noted that this led to an amendment to the California Constitution in 1928 that stated, ‘it is hereby declared that because of the conditions prevailing in the state, the
general welfare requires that the waste and unreasonable method of use of water be
prevented. … Such right does not and shall not extend to the waste or unreasonable use or unreasonable method of use or unreasonable method of diversion of water.'
This language in the California Constitution was adopted virtually wholesale into the California water code, so the provisions of the California Constitution and the California water code provide the statutory basis for what we're calling California reasonable use law, Professor Kibel said.
He then cited some examples of the ways the Reasonable Use law has been relied on either by the courts of by the State Water Board since that time.
Example 1: Erickson versus Queen Valley Ranch Company, California Court of Appeals, 1971. “This was a case that involved the transmission of water in an earthen canal,” he said. “At trial they found that five-sixths of the water conveyed in this earthen canal was lost through a combination of evaporation into the air and saturation into the ground. The trial court upheld that these transmission losses — five-sixths of the water — were reasonable under the California Constitution and water code. The Erickson Court of Appeal reversed, finding by holding the transmission losses amounting to five-sixths of the flow are reasonable and consistent with local custom, the court effectually placed the seal of judicial approval on what appears to be an inefficient and wasteful means of transmission. Finding a reasonableness for ‘transmission loss amounting to five-sixths of the diverted flow fails to respond to the demands of constitutional policy.’”
Example 2: State Water Board’s Resolution 7578, 1975. “The State Water Board adopted Resolution 7578, which dealt with the use of inland freshwater for cooling power plants,” he said. “The resolution was titled Water Quality Control Policy on the Use of Disposal of Inland Waters. Resolution 7578 set up an order of priority in which what sources of water could or should be used for the cooling of power plants. In order of priority, they were: wastewater, recycled water, grey water, ocean water, brackish water, and at the end, inland water. The purpose here was to reduce or phase out the use of potable freshwater as a source of power plant cooling.”
He said this is notable because of what was written in the section called Basis of Policy. “This State Water Board resolution found ‘there is a limited supply of inland water resources in California. Basin planning conducted by the State Water Board has shown that there is not available water for new allocations in some basins. The use of inland waters for power plant cooling needs to be carefully evaluated to assure proper future allocations of inland waters for all other uses. The loss of inland waters through evaporation in power plant cooling facilities may be considered an unreasonable use of inland waters when general storage has occurred.’ And then they specifically cite the provisions of the California Constitution and the California water code in support of it.”
Professor Kibel pointed out that Resolution 7578 was not limited to surface waters; it included both surface waters and groundwater. “So we see that 40 years ago the State Water Board already looking to its authority under Reasonable Use Law to regulate and impose limitations on the use of groundwater,” he said.
Example 3: State Water Board versus Forni, Court of Appeal, 1976. “This involved the State Water Board regulation relating to the Napa River and restricting the use of direct diversions from the Napa River for frost protection in a challenge to that. The regulation that had been adopted by the State Water Board had noted that the simultaneous diversions of the Napa River often resulted in the river being dried up so that other users, there was no in-stream flow for them to exercise their rights.”
“The California Court of Appeal concluded ‘the claim that Forni's direct diversion of water constitutes an unreasonable use and an unreasonable method of use is predicated on the premise that the direct company results in a great temporary scarcity of water during the crucial frost period. We find no merit in Forni's assertion that the Water Board has exceeded its authority by declaring that the direct diversion of water in the frost protection period constitutes an unreasonable method of use in the meaning of the California Constitution and water code,’” said Professor Kibel.
Example 4: U.S. versus State Water Resources Control Board, California Court of Appeal, 1986. “This decision became known as the Racanelli decision, based on the judge that authored it,” he said. “There were a lot of issues in the Racanelli decision, but the part that I want to focus on is there was a challenge to whether the State Water Board had authority in developing a water quality plan for the Delta to impose restrictions on the State Water Project and the Central Valley Project to maintain water quality standards in connection with selenium and with saltwater intrusion.”
The Court of Appeal held that ‘the Water Board determined that changed circumstances revealed new information about the adverse effects of the projects on the Delta that necessitated revised water quality standards. Accordingly the Board had the authority to modify the projects' permits and curtail the use of water on the grounds that the projects' use and diversion of the water had become unreasonable. We perceive no legal obstacles to the Board's determination that particular methods of use had become unreasonable by the deleterious effects on water quality.’
Example 5: The Sustainable Groundwater Management Act of 2014: “Why I'm noting this is that there are several provisions within this law that confirm and indicate that the legal basis for some of the provision in this law are grounded on the reasonable use law provisions in the California Constitution and the Water Code,” he said.
“In the uncodified finding section of the 2014 Groundwater Law, it says ‘the people of the state have primary interest in the protection, management and reasonable beneficial use of the water resources of the state, both surface and ground water,’” he said. “In Section 10720 on legislated intent in the 2014 law, they state that the purpose of the law is to enhance local management of groundwater consistent with Section 2, Article 10 of the California Constitution, which is the Reasonable Use provision in the California Constitution. And we find also in Section 10720, “Groundwater management pursuant to this part shall be consistent with Section 2, Article 2 of the California Constitution.’”
“So since the adoption in 1928 of these constitutional provisions, we've seen a number of instances in which both the courts and the State Water Board have relied on its authority for the regulation of water resources,” Professor Kibel said.
Professor Kibel then gave an idea to consider. “Think about reasonable use Law in terms of potentially being both a shield and a sword,” he said. “By shield, I mean that we've had a number of cases in which the reasonable use provisions of the California Constitution and the California water code were relied upon to uphold the authority of the State Water Board to take action. This is what I mean by using reasonable use Law really more as a shield — to confirm what an agency is already doing. And there's a fairly extensive body of reasonable use Law being used as a shield.”
“There's a more limited body of authority of reasonable use law being used as a sword,” he continued. “By sword, I mean appealing directly to the courts to impose restrictions on water use or water diversion in the absence of agency action. The Erickson case involved a court ruling that the five-sixth losses during transmission were unreasonable; they weren't upholding anything that Fish and Game or the State Water Board said. They were relying directly on their authority for the court.”
“My point is simply this,” he said. “We should think about using reasonable use law going forward to have in our minds that there are separate bodies of law that support its use as a sword and as a shield.”
And lastly, Professor Kibel addressed the usage of the term ‘reasonable use law versus the term ‘reasonable use doctrine'. “Now we have many other areas of law where there are constitutional and statutory provisions involved. Let's think of equal protection. Do we speak of the equal protection doctrine? No. We speak of equal protection law. Takings. Do we speak of the takings doctrine? No. We speak of takings law. And yet, often when we talk about this area of law, we use the word “doctrine.” And the question I just want to put out there, and I'm not going to answer it, is to think about why we do that.”
He then concluded by quoting the definition of doctrine and the definition of law as is written in Black's Law Dictionary: Doctrine is defined as a legal principle that is widely adhered to. Law is defined as the body of authoritative grounds for judicial and administrative action.
“Not quite the same thing,” Professor Kibel said.
HARRISON “HAP” DUNNING, Professor Emeritus, UC Davis School of Law
It was then Professor Harrison “Hap” Dunning's turn to share his thoughts.
Professor Hap Dunning said he would discuss three things. The first is the pre-1928 reasonable use Law which has been referred to as the common law of reasonable use. “Reasonable use is an idea that didn’t spring out in 1928 in a constitutional amendment. It had been around a long time before,” he said. “I want to comment on some of the post-1928 cases, and then I want to talk about reasonableness regarding future groundwater extraction, and opportunities I think exist for the State Water Resources Control Board to act possibly in the area.”
The oldest water right that is central in common law is the riparian right, or the right of the landowner to use water in the adjacent stream or the stream flowing over the landowner's land, he explained. “Initially courts talked about this in terms of what they referred to as the natural flow theory that held that every riparian is entitled to have the stream's natural flow undiminished except for domestic use. That was the sole exception but that wasn't very viable, particularly in places like New England, where you had mill economy developing, and the courts moved away from natural flow theory to something else.”
In California, it was Lux versus Haggin in 1886 that case that really settled that California would continue to have riparian rights unlike the rest of the western states, Professor Hap Dunning said. “It's sort of a treatise on the whole state of California water law at that time,” he said. “But on the riparian question, the reasoning really was very simple. It was simply that time, the state of California adopted the common law, and the common law included the riparian water right.”
The case also decided that riparians can divert for any consumptive use, including irrigation, he said. “That was the big one. This was litigation that involved some of the giants in the San Joaquin Valley,” he said. “Lux said that you can divert for any consumptive purpose, including irrigation, if reasonable. And here's the critical point. They said what's reasonable “depends on all the circumstances.” Depends on all the circumstances. Now what are some of the circumstances that one would look at if you examine the riparian use patterns?” A case in 1916 mentioned some of the things that a court would deem to be relevant, such as seasonal variation in flow, the amount of land irrigated, the extent of river frontage, and the comparative profit of the various uses, he said.
California also recognizes appropriative water rights, which goes back to 1855. “As with riparian disputes, courts in disputes among appropriators imposed a reasonableness requirement,” he said, giving the example of Antioch versus the Williams Irrigation District in 1922. In that case, Antioch sued 27 upstream appropriators who were taking water for rice farming at the time when the rice industry was just developing in the Sacramento Valley. “Antioch was afraid they were going to get salty water, because as the amount of freshwater coming down through the Sacramento River system diminished, you had seawater pushing inward, which was a danger to Antioch,” Professor Dunning said. “So Antioch actually argued that it had riparian rights, and that was rejected by the court. The court addressed their non-riparian water rights, and said, ‘Well, yes, they have rights. But,’ they said, ‘It's not reasonable to shut down this whole burgeoning rice industry up in the Valley just to deal with Antioch's salt problem, or potential salt problem.’ So there we have reasonableness in the context of non-riparians.”
“Thirdly, reasonableness has been used where riparians have been challenging appropriators, as in the case of the 1909 Miller and Lux case,” he said. “All of that had been done by the time you got to Herminghaus in 1926, and you had this one remaining situation where you had an appropriator challenging a riparian. .. So they had the Herminghaus ruling that led rather directly to 1928 amendment.”
Professor Dunning then gave some comments on some of the post-1928 reasonable use opinions that built on the conclusion in Lux that reasonableness depends on the circumstances. “If you really took that literally — reasonableness depends on the circumstances — it would make for a terribly unstable system,” he said. “You could have a right to divert for irrigation in July, but not in August, because circumstances have changed. The water situation has changed. But in a small number of Article 10 reasonable use cases that we have, the courts have tended not to do it quite that way. They've tended to fashion pretty broad rules.”
In the case, Tulare Irrigation District versus Lindsay-Strathmore Irrigation District, people were using water in the winter to flood their fields to drown gophers, and the court said, ‘that's not reasonable.’ “Now, it's surprising in a way, because suppose you had a flood going on, would it be hard to take some of the floodwater and use that to drown the gophers? But the court, kind of across the board, said no, no, no. Water is for irrigation, power, municipal supply, not for drowning gophers.”
A more extreme case was Joslin versus Marin Municipal Water District out in Marin County, 1967, said Professor Dunning. “It was an inverse condemnation action that involved a small sand and gravel company that had been depending on the flow of a creek to bring sand and gravel to its site. Marin Municipal Water District had come in and built a dam upstream that cut off the flow of sand and gravel. … The court just said across the board it's not reasonable as a matter of law to use water in the amassing of mere sand and gravel.” So across the board, this is just like drowning gophers. No. Sand and gravel? No. That's not what we're going to use our water for.”
Professor Dunning said that to him, the most significant reasonable use case since the 1928 Amendment involves the Imperial Irrigation District. “It was a landowner, John Elmore, adjacent to the Salton Sea, whose land was being flooded and he complained about this,” Professor Dunning said. “He said it's being flooded because the Imperial Irrigation District is allowing excessive tailwater to leave their service area and flow into the Salton Sea, the level is rising, and it's flooding his land.”
“He made a complaint to the Department of Water Resources and the Department of Water Resources investigated; they concluded indeed water was being wasted and referred the matter to the State Water Resources Control Board,” he said. “The Board went through its process and concluded that there was water waste, there was excessive tailwater, there were canal spills and canal seepage, and so they ordered IID, Imperial Irrigation District, to develop a conservation plan.”
The decision was upheld at two different Court of Appeal decisions in 1986 and 1990. “The reason I think it's important is that it was one important step in a rather protracted process which led eventually to IID transferring water to urbanized areas of southern California. IID holds rights on the Colorado River to a vast amount of water,” he said. “Well over half of the state of California's entitlement belongs to IID, and people in the urban areas — Los Angeles and San Diego — certainly knew this. … And now, after lots of litigation and lots of different activity, it's actually happening. That's why I consider those two decisions from the Court of Appeal so important -because I think they historically probably conclude that they played a part in pushing that process along.”
With respect to the future use of reasonableness in California water law, Professor Dunning said he thought the State Water Resources Control Board should consider the reasonableness provision with some of the more serious overdraft situations that around the state.
“There's some interesting litigation that's been going on with regard to the Paso Robles area in San Luis Obispo,” he said. “There, the County Board of Supervisors about a year and a half ago enacted … a county ordinance that says there's a two-year moratorium on new or expanding crop production on conversion of dry farmland into irrigated land. That's a lot of what was happening – grazing land being turned into vineyard, or new development depending on a well, or increased consumption of groundwater. That's been litigated, and there's a recent trial court decision from the Superior Court in San Luis Obispo County, in which they upheld the moratorium, and they actually cited to one of the older reasonable use cases, one in 1933 in Chow versus City of Santa Barbara.”
“I think this is going to be a problem,” continued Professor Dunning. “We have the legislation that sets up an extremely protracted process, even in the critically overdrafted basins that are of high concern. You don't have to have your groundwater sustainability plans in place for five years, and after that, there's 20 years to achieve the sustainability goal. That's not accounting for litigation, which may obviously hold the whole thing up. So we're looking at decades and decades and decades of people working on this.”
He said that there may be some areas where the local leadership might act in an aggressive affirmative manner. “But I think in some areas, they're not going to do that. They're going to hold out. And the way the legislation's written, the state only comes in as a backup. If everything kind of falls apart, the state can come in.”
“In some of the more drastic groundwater overdraft situations, I think it would be very appropriate for the State Water Resources Control Board to think about the authority under the Reasonable Beneficial Use provisions of the Constitution in appropriate cases to go forward,” he concluded.
JOHN LESHY, UC Hastings College of Law
John Leshy began by offering some thoughts on why using water efficiently and conservatively is important. “January is usually San Francisco's wettest month,” he said. “Since 1850 it averages four and a half inches of rain have fallen in San Francisco in January. So far in 2015, zero, none. No rain forecast in the next seven days. We have regained, so it looks like it's going to stay that way, and we'll break the record. That's never happened in 165 years.”
“The driest January to date was less than a tenth of an inch, set in 2014,” he continued. “The drought that we are in was compounded by record heat. Last year was the hottest year on record overall. 14 of the last hottest 15 years have been since the year 2000. So like all climate deniers out there like to say, I'm no scientist, but I'm worried.”
“Focusing on conservative many more efficient uses of California's dwindling water supplies, dwindling snow pack, declining ground water, et cetera, will almost certainly continue and grow,” he said. “One way to grapple with that problem obviously is to take reasonable beneficial use seriously.”
Mr. Leshy said he would be talking about the federal law. “You might ask what does state water law and the state constitution have to do with federal law and federal water policy?” he said. “Well, it turns out it actually has a good deal to do with it, because much of the water delivered in California, especially all of that delivered through the Central Valley Project, is actually delivered primarily through state water law.”
He explained that when the Reclamation program was established by Congress in 1902, Section 8 in the Reclamation Act basically made the water rights for the federal reclamation projects obtain through state law. “Therefore state water law governs the water rights of the federal Central Valley Project and other federal reclamation projects, with one limitation or one exception.”
“The United States Supreme Court told us back in 1978 that state water law controls the operation of these federal reclamation projects unless it is contrary to clear Congressional directives,” he said. “Now, you can look around for clear Congressional directives to the contrary, but you won't find too many that apply to the Central Valley Project.”
“There is actually a very interesting and obscure and usually ignored feature of Section 8,” he said. “It also contains, as a matter of federal law, a requirement of beneficial use. I say obscure, because people have hardly ever paid any attention to it. It is not at all clear what that means, whether it sort of incorporates state law, mimics state law, borrows state law and applies it to federal law, or sits out there as an independent federal requirement distinct from the state beneficial use requirement.”
“But I think it's very safe to say that practice under Section 8 has been look to state law; don't look to whatever that federal beneficial use directive says,” Mr. Leshy said. “And the Interior Department that administrates the federal Central Valley Project has acted that way.”
Mr. Leshy then talked about the law as it applied to the case with Imperial Irrigation District, which receives their water from the federally-managed Colorado River system. “After the State Water Board had told IID to conserve, there was a very complicated effort to bring California's use of the Colorado River water down from more than five million acre-feet a year to what it's entitled to, which is 4.4 million acre-feet a year,” he explained. “The pressure on IID to conserve water and to transfer some of that water to coastal use all came wrapped up in a very big package called QSA, or Quantification Settlement Agreement.”
“In those negotiations, IID got a little cold feet about conserving,” he said. “And the Interior Department leaned on them pretty hard and actually cut their water allocation, and although they didn't quite say this, in essence, applying the State Water Board decision and the state conservation requirements to the federal contractor, IID. So federal projects are subject to reasonable beneficial use state requirements, generally speaking. I think that's a fair and accurate statement.”
So how has that benefitted the larger picture of managing California water? “I want to go back to Paul's mention of reasonable beneficial use as a sword and as a shield,” he said. “As a shield, it's a defense to a takings action. That's very important to think about. Legally reasonable beneficial use is not just a nice policy goal. It's not just something, a good thing to try to achieve. When a court or a legislature or a state water board requires efficiency, conservation, avoiding waste, and measures to do all that, it's not simply regulating – it is defining the property right. Very important decision, because in defining the property right, you're basically saying if you're wasting water, you don't have a property right to do that. When the court or the water board or the legislature says you can't waste, it is saying you don't have a property right; you cannot then turn around and sue and say they've just taken my property right. The California Constitution defines the property. So one cannot, in California, acquire a property right to waste water. You simply can't.”
Reasonable use is a perfect defense to any takings plan, he said. “Any governmental action that limits water use, in my judgment, in California under the reasonable beneficial use doctrine, is not raising a question of attaining of a property right,” he said. “So when it regulates and limits water use to avoid waste, the government should always make it absolutely clear that it is defining what reasonable and beneficial use is. That's pretty simple and straightforward, I think.”
Mr. Leshy then considered the other side, reasonable use as an offense. “Could environmental groups or Delta water users or upstream water users complain about somebody else's water uses violating reasonable and beneficial use?” he said. “Can you use that as a tool to force the government, legislature, or state water board, in particular, to order water users to conserve? Can courts be persuaded to use this doctrine in an affirmative way?”
“This is a lot harder frankly, because there's a lot of inertia in the system and because people are worried that we are going to take water rights,” he said. “The government has large discretion, courts and agencies are traditionally relatively aggressive. Despite that, the good cases out there, they're really relatively few.”
Mr. Leshy said that it signals to him that this doctrine is being used in only very limited ways, he said. “But on paper, it's powerful. And it raises all kinds of interesting issues. Can you challenge the purpose of the use of groundwater? Can you say growing alfalfa in California is not a reasonable and beneficial use? You can, actually, on paper. There are cases to support it.”
“In 1899, California Supreme Court said where water is so precious, it should not be used for mere matters of taste and fancy, while those who need water for useful purposes go without,” he said. “It used to be alfalfa was essential. Could it be in 10 or 20 years that as a matter of taste and fancy, the California government could outlaw its use as not reasonable and beneficial? Possible. What is reasonable and beneficial in one era is not necessarily reasonable and beneficial in another era.”
Mr. Leshy noted that all these cases say it depends on the facts, and it changes over time. “So to quote the California Supreme Court, ‘one of the beneficial uses at one time can become, because of changed conditions, a waste of water at a later time.’ Is reasonable and beneficial use going to change in a drought of biblical proportions that we seem to be in? Priority is not controlling in that sense, because all water rights, even senior water rights, prior to time, are subject to reasonable and beneficial use determination.”
Mr. Leshy said he didn’t want to oversimplify it because it is quite complicated. “One person's waste is another person's use,” he said. He noted that in the Erickson case regarding the leaky ditch, the court talked a fair amount about how the leaky ditch supported a lot of vegetation, and in the case of the IID, that waste fed the Salton Sea, which might be waste to somebody, but not to the Audubon Society or bird fanciers. “So because water's so interconnected, it’s quite complicated to tease out what reasonable and beneficial use might be.”
Markets could be used to solve the problem, as economists have suggested, he said. “A lot of economists have said that the way you solve the waste inefficiency problem is you let water move to its highest use, and let people with more demand and more money buy the water from the people who are wasting it and using it inefficiently, and just let the market solve these problems,” he said. “There's some sense to that, and water markets are growing slowly.”
“My prediction would be that actually we're going to do both,” he said. “We're going to use markets, and we're going to use reasonable and beneficial use determinations to push people into the markets.”
That is what happened in the Imperial Valley, he said. “IID came under regulatory constraints because it was using enormous quantities of water,” he said. “The State Water Board started coming down on them, and in the end, there was a big negotiation that took years which resulted in IID both conserving and freeing up water for market transfers to southern California.”
“I think we're going to see a lot more of that around California — this sort of combination of reasonable and beneficial use regulatory pressure redefining these water rights and negotiations to let market forces sort of help solve the problem,” he said.
Mr. Leshy said that’s another point about reasonable and beneficial use is that we actually don't know in California where most of the water is used. “We don't know who has water rights to what amount of water for most of the water in the state,” he said. “You think about how in California water, we fight over every drop. Well, we kind of do fight over every drop, but we actually have no idea who has water rights. We have exceptionally few adjudicated basins in Southern California. We have no idea about groundwater rights.”
This applies to surface water rights as well, he said. “We have a very limited idea about who has surface water rights that claim a priority prior to 1914, because that's when the Water Commission Act was adopted. And, except in a very few places, we have no idea about riparian rights, which exist everywhere. How reasonable and beneficial use fits into that near total lack of information is pretty remarkable.”
Mr. Leshy said this presents both a challenge and an opportunity. “It's a challenge, because how can you determine reasonable and beneficial use when you don't know what water rights or even the claims that are out there?” he said. “On the other hand, it's an opportunity, because it gives the government the opportunity to almost start with a clean slate and basically say, okay, this is how water is going to be used, and the challenge that we face with limited supplies in the future.”
“So in the end, I think we're going to do a lot more arguing about reasonable and beneficial use in the next, say, 20 years than we have done in the last 87 since it was made a part of the fundamental law of California,” Mr. Leshy concluded.
Coming up tomorrow …
More from the California Water Law Symposium with a panel discussion on reasonable use and the Russian River frost protection regulation.
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