Yale Law Journal – State Water Ownership and the Future of Groundwater Management

abstract. Climate change—bringing worse drought and more erratic
weather—will both increase our need for groundwater and shrink the amount
available. Managing dwindling groundwater reserves poses stark legal and policy
challenges, which fall largely on the states. But in many states, antiquated
legal regimes allow for an unrestricted race to pump aquifers dry. As a result,
from the High Plains to the agricultural valleys of California, the nation’s
aquifers are being depleted. Some will never replenish.

Against this
backdrop, this Note addresses a question that the Supreme Court confronted—but
failed to clarify—this Term: can states own the groundwater within their
borders? Many states, particularly in the West, claim to own waters within
their territory. Over the course of the twentieth century, the Court settled
that these water-ownership claims are largely meaningless beyond states’
borders: states cannot rely on these claims to thwart federal supremacy or
prevail in water contests with other states or the federal government. However,
many scholars, courts, and litigants go one step further. They conclude that,
in any context, state water-ownership claims cannot mean that the state
has a proprietary ownership of its water. Instead, they argue,
“ownership” is merely a fictive shorthand for the state’s authority to regulate
a resource that no one really owns.

This Note
disagrees. Clarifying a perennially muddied question of water law, it shows
why, for state-law purposes, states can own their share of groundwater. More
importantly, it demonstrates how denying that fact could imperil sound
groundwater management when we need it most.

author. Yale Law School, J.D. expected 2022. I am
particularly thankful to Claire Priest for her enthusiastic supervision of the
paper that grew into this Note and to Carol Rose for helping me refine and
enliven it. I am also deeply grateful for the incredibly generous assistance I
received from professors at other schools: Dave Owen and Michael Pappas helped
me develop my inchoate ideas and provided extensive guidance on multiple
drafts, and Burke Griggs provided careful feedback and encouragement at later
stages. For reviewing drafts and/or having conversations that are woven into
this Note, I am further indebted to Gregory Ablavsky,
James Campbell, Alison Gocke, Phil Kaplan, John Leshy,
David Schleicher, David Schorr, Barton Thompson, Jr., and Gerald Torres; Brad Roberts
and Bill Sherman at the Washington State Attorney General’s Office; and members
of the attorneys general offices in California, Colorado, and Oregon. At the
Yale Law Journal, I thank the first-year editors for their diligent
editing; Kayla Crowell, Thaddeus Talbot, Joe Linfield, and Rachel Sommers for
their perceptive feedback; Josh Altman and Sammy Bensinger for shepherding this
Note to completion; and most of all Max Jesse Goldberg, whose keen insights and
wholehearted engagement with this Note leavened it significantly. This deep
bench helped me avoid a number of errors and
omissions; any that remain are my own. This Note is dedicated to my wife.

Introduction

“Whence comes this ventriloquism which maketh the
constitution say that which it sayeth not? The
constitutional provision . . . is
made to mean only that water can not be owned by any
one because it can not stand still!”

Consider three recent
scenes from the drought gripping the American
West.

Over the past decade
and a half, industrial farming operations have bought up tens of thousands of
acres in the Arizona desert for a simple reason: to pump up as much groundwater
as they can—and then leave.
No law will stop them from sucking the aquifers dry. While no state west of the
Hundredth Meridian is more reliant on groundwater,
Arizona allows users in these regions to pump as much as they can put to
“reasonable use,” which includes farming.
Lured by the lack of regulation and long growing season, Saudi and Emirati
dairy companies have turned huge swaths of desert green, raising hay to feed
cows back in the Gulf.
Pecan and pistachio conglomerates have planted tens of thousands of acres of
nut orchards. In regions that follow the “law of the
largest pump,” these companies brought the biggest.
Fearing the aquifers’ impending depletion, typically regulation-averse farmers
and politicians have sought increased oversight, to no avail. Under the continued strain of climate
change, Arizona might yet change course by restricting groundwater pumping, or
even revamping the legal regime that governs groundwater property rights. If it
did, could the dairy and nut agribusinesses claim that Arizona has effected a taking and so must compensate them for the value
of their lost water?

For years in eastern
Montana, a Louisiana company allegedly dumped toxic waste generated by oil and
fracking operations in the Bakken.
During the oil boom at the time, operations in North Dakota alone produced
millions of tons of chemical- and oil-saturated earthen waste, and an untold
amount of radioactive material. The Louisiana company dumped the waste near
homes, an area with a particularly high water table. Montana sued the company, seeking heavy
fines and demanding it pay for cleanup. In turn, the company’s insurers went to
court to avoid having to cover these costs. If, in a situation like this, the company were found to have polluted
groundwater in the area, would its liability insurance policy cover the loss?

And last summer, as
California’s agricultural valleys buckled under drought, water thieves ran
rampant.
They sucked water from whatever source would yield it—including groundwater
wells. In response, law enforcement tried to use
drones and satellite imagery to track trucks carrying conspicuous water tanks
in their beds. It was a losing battle. Even as farmers
obeyed state orders to cut back, they reported that illegal overpumping of
groundwater was “lowering production in their wells.” Water theft of this kind has been reported
everywhere from Colorado to eastern Washington.
Perhaps officials in these states will want to rely on their states’ criminal
codes to prosecute this for what it is: theft. Could they?

In each of these
scenarios, this Note contends that the question of whether states can own
their groundwater is both important and overlooked. In response to this
perennially muddied legal question, this Note argues for a crystal-clear
doctrine of qualified state ownership.
The stakes of this inquiry are high: if states do not own their groundwater,
private takings claims would be more likely to succeed, and states would be
more hesitant to restrict pumping; insurance companies would have to pay fewer
claims;
and states would be unable to prosecute groundwater theft under their larceny
statutes.

Groundwater is poised
to become even more important. In the coming decades, the United
States—especially its arid West—stands
to become hotter, drier, and more populous.
These changes, driven in part by climate change, will continue to strain the
country’s already stressed water resources.
Continuing a trend that has intensified since the mid-twentieth century, the
country will have to go underground to satisfy its water needs.

As climate change increases our reliance on groundwater, it
will reduce the amount available. Hotter temperatures deprive aquifers of the
snowpack they need to recharge, and rising seas threaten to poison coastal
groundwater with salt. Storms
and wildfires leave contaminated wells in their wake.
And erratic weather and punishing droughts—like the one that now afflicts
ninety percent of the West—exacerbate the overpumping problem, as communities
frantically drill wells to replace the vanishing rivers and reservoirs.

For the foreseeable
future, the heavy burden of aquifer management will fall primarily on states.
Groundwater is notoriously difficult to manage,
and the patchwork of often-antiquated state laws that govern private use of
groundwater frequently permits overpumping.As a result, from the High Plains to
the agricultural valleys of California,
groundwater supplies are being depleted at alarming rates.
Some—like the Ogallala Aquifer servicing much of the High Plains—will never
replenish. The
question of whether states can own the water within their borders
sporadically bubbles to the surface of water law. Foreshadowing a future of increased
competition over water above and below ground,the Supreme Court this Term decided the first-ever interstate
groundwater dispute. Mississippi sued Tennessee claiming that it
was the victim of a “heist.” Mississippi alleged that Tennessee and
Memphis, through the city’s water utility and at the direction of the state,
were taking Mississippi’s groundwater from wells on the Tennessee side of the
border. This claim, and the more than fifteen years
of litigation it launched, proceeded from an assertion that the people
of Mississippi own all the
groundwater within the state’s territory. As Mississippi v. Tennessee was the
first contest between states over an aquifer, commentary on the case
understandably focused on how it would shape interstate water disputes in the
decades ahead, largely ignoring how the Court’s handling of
Mississippi’s ownership claim might affect water management within
states. This Note aims to fill that gap.

Like Mississippi,
many states, particularly those in the West, declare by constitutional
provision or statute that the people of the state or the state itself owns the
waters within its territory. Such pronouncements might be read as merely
shorthand for individual states’ authority to regulate a resource that no
one owns. Or they might mean what they say: the people of a particular
state have a proprietary interest in its water, including its uncaptured
groundwater. To endorse this second option is to affirm
“state ownership.”

One thing is clearly
settled: claims of absolute state water ownership—good against all
comers and in all legal contexts—are invalid. Most importantly, this means that
a state’s claim to own its water is largely meaningless beyond its borders.
Although state ownership claims originated as inward-looking attempts by new
states to assert control over their surface water, states soon turned these
claims outward in disputes with other states and with the federal government. However, early in the twentieth century, the
Supreme Court held that state ownership claims are irrelevant when it comes to
surface-water contests. When it rejected Mississippi’s ownership
argument in Mississippi v. Tennessee this Term, the Supreme Court harmonized groundwater and
surface-water doctrine. Further, it is similarly clear that states
may not rely on their purported ownership of surface water or groundwater to
thwart federal supremacy.

To elaborate, the
first part of this Note’s answer attempts to resolve the doctrinal puzzle of
state water ownership in the modern era. It argues that a state can have
nonabsolute—or what this Note calls qualified—possessory ownership. This
ownership extends only to the state’s share of groundwater, arises from the
state’s authority to define the property character of that water, and is valid
for state-law purposes. A state’s share is the water it can use and allocate to
private citizens—which may not encompass all the water within a state’s
borders.
Where state ownership exists, it derives from the state’s ability to allocate public
and private property interests in its share. As such, if they so choose, the
people of a state can give themselves—that is, the state—possessory ownership
of that water.
But, as state property law, that ownership is subject to federal supremacy.

This conception of
state ownership is a modest one compared to states’ historical claims of
absolute ownership of all water within their borders.
Some state courts would find it unremarkable. Nevertheless, justifying the basis and
limits of this qualified ownership is particularly important for two reasons.
First, doing so clarifies a chronically confused area of water law. This
more modest conception of ownership is ill-defined even when state courts
recognize it and
other commentators gesture toward it. By
defining state ownership’s nature and extent in the modern era, this Note
clarifies the difference between states’ police power and their proprietorship,
and corrects legal positions from opposing sides. On the one hand, it disagrees
with scholars, courts, and litigants who argue that even for intrastate
purposes state ownership can only be fictive. Contrary to what this group often
concludes, this Note shows that the Supreme Court has not abrogated (and could
not abrogate, absent a specific conflict of federal and state law) the power of
a state to define for purposes of state law the property character of the water
that it controls. On
the other hand, this Note also refutes the assertion states have continued to
make—often to the detriment of Native American tribes—that they can own all
water within their territory, not just the water that is theirs to use. This
Note clarifies why state groundwater-ownership claims are rendered void when
the water at issue is the object of federal and Indian reserved water rights.

This Note builds upon
this articulation of state ownership to explain the second reason why
clarifying state groundwater ownership is important: doing so impacts states’
practical ability to manage this critical resource. Treating state ownership as a complete
fiction—as opponents suggest—creates serious and often unappreciated
ramifications that hinder sound groundwater policy. Returning to the scenes
above, this Note explores three examples—takings challenges, insurance
coverage, and water theft—where denying the validity of state ownership
jeopardizes states’ ability to manage their groundwater. This inquiry comes at
a time when many states have recently begun or are poised to exert greater
control over their groundwater, transitioning the property laws and the
regulations that govern its use.

Facilitating
groundwater management is singularly important. A large common-pool resource
hidden below ground and accessible to anyone with a big enough pump,
groundwater invites overuse. State-imposed limits are necessary to
prevent a race to suck it up. Chronic overdraft—consistently drawing water from
an aquifer faster than it can recharge—has profound economic, legal, and
environmental consequences.
Among other ills, permitting a free-for-all empowers big pumps to the detriment
of small ones. Lowering the water table makes it more expensive for every
pumper and can displace other users. From Arizona to California, megafarms’
voracious pumping has ejected homeowners and driven smaller farmers out of
business.
Not long after the agribusinesses moved into the desert, nearby residents in
Arizona suddenly found that their home wells were too shallow to reach water,
spitting out sand instead; “chas[ing] the water downward” would have required
money that these families did not have, so they were forced to move elsewhere.
Designating groundwater as a state-owned resource, this Note argues, gives
states greater ability to impose restrictions that avoid these unjust outcomes,
protect property rights, and conserve groundwater reserves.

While many scholars
are concerned that allowing ownership to seep into water law creates doctrinal
confusion, these three examples demonstrate the
practical effects of rejecting the concept entirely. Further, making water state-owned carries
important rhetorical force, inserting the public into the conversation about
management and shaping the expectations of rightsholders. That water is the people’s property in a
literal sense means that the regulatory interaction between the state and users
is not a matter of private rights versus nothing or versus a vaguer “public
interest,” but rather comprises an effort to balance private property rights on
one side with the public’s equally concrete property right on the other.