Nevada State Court Upholds Water Rights

by Margaret Byfield

The Fifth Judicial District Court of the State of Nevada in the Monitor Valley water adjudication has issued a written opinion upholding the State of Nevada Water Engineer’s Determination Order. The Order had been issued last fall confirming that the private landowners held senior water rights in the Monitor Valley basin and that the federal government had a right only to negligible use of the water. Wayne Hage, one of the landowners in the adjudication, was awarded 20,000 acre feet of water, while the government was only awarded 3 acre feet. The federal government contested the decision to the State Court. A hearing was held September 30th where the State Court upheld the Engineers decision.

During the 1970’s and 80’s, the Federal Government had filed claim to the privately held water rights in Monitor Valley, forcing the state to begin an extensive water adjudication. The action by the government is one of the main issues that later prompted the takings case Hage v. United States. Not only did the government lay claim to Hage’s water rights, but in some cases even fenced out Hage’s cattle from springs and transported Hage’s water into US Forest Service facilities.

The action by the federal government is not unlike that which ranchers across the West are facing today. The federal land management agencies have been laying claim to water rights that have been privately held since settlement in every western state. It is one of the most widespread attempts at taking private property today. Everyday, more and more western landowners are being forced into state adjudication processes to retain title to their water rights. They have been forced to defend rights, which have been recognized by Congress and the courts since the West was settled. Until recently, with the rise of the environmental movement, these rights have been respected by every branch of the government except the executive branch. Since Secretary of the Interior Bruce Babbitt was appointed, taking the West’s water has been one of the administrations top priorities.

In the Monitor Valley water adjudication, the federal government raised and lost many of the arguments they are making in other water adjudication’s. In this recent decision dealing with stock water rights, the court concludes the government’s position is contrary to Nevada State law and the prior appropriation water doctrine that governs western water law.

In their brief, the federal government argued that neither federal nor state law allows private parties to obtain stock watering rights on federal lands. They argued that the government’s "tacit consent to grazing on public domain" gave them no right to the water. They further argued that as the owner and manager of the land they owned the water rather than the users of the land. They also argued that "under Nevada law, water rights are appurtenant to the land where water is used." Their position could not be more contrary to the law, which the court pointed out.

"This Court rejects these arguments and believes Congress wanted state law to govern water rights and allowed private individuals to obtain vested stock water rights on public land. … Owners and managers of public land can get water rights, but only after adjudication by the state engineer pursuant to state statute. The state engineer properly found that the federal government has not established vested water rights. The Nevada doctrine of appurtenance does not support the federal government. Under Nevada law, stock water rights can be appurtenant to base ranches rather than the land where livestock drink."

One argument made by the federal government included one they have raised west wide. They argued that by allowing livestock use of the federal lands, the federal government in effect put the water to beneficiary use and therefore, acquired a vested stock water right. Under Nevada law as with most western states, to prove a water right you have to first put it to beneficial use. The federal government is attempting to show they made beneficial use because they allowed livestock grazing. The court disagreed.

"Though ownership and management of federal public land for livestock grazing may constitute beneficial use and appropriation, ownership and management of public land alone does not create valid water rights under Nevada state law."

As to the federal government’s arguments that the water right stays with the land, the court again disagreed.

"This Court rejects the federal government’s argument. A water right is not necessarily appurtenant to the land where the water is used. … Stock water rights can be appurtenant to the livestock owner’s land rather than where they drink. This Court finds the water right perfected by Hage et al’s predecessors in interest appurtenant to the base ranches."

The government also argued that Congress intended for the law of range land management to govern stock water rights in the west. The court also ruled against this argument.

"Congress intended that state law and local custom determine the acquisition of water rights by private individuals on public land in the mid-19th century. … Water for stock is not included in or preempted by rangeland management policy."

The government then argued that the Nevada State Engineer interpreted the General Mining Law of 1866 incorrectly when concluding that the laws allow the states to administer water on federal lands. Again the court disagreed with the government.

"Case law supports the state engineer’s reading. … the General Mining Law of 1866 and the Desert Lands Act of 1877 show Congress’ intent to allow states to administer water on public land."

The Court further held that not only do the state regulations apply to private parties by also to the federal government.

"Congress granted to the states control over water rights. Under the McCarran Amendment, 43 U.S.C. Section 666, state regulations apply to federal agencies. Federal agencies may and must obtain water rights under state statutes just as private individuals must."

In a last attempt to convince the court that the federal government should be awarded the vested stock water rights now held by Hage, they argued that the State Engineer’s ruling violated "public policy." "Awarding the stock water rights to the owner of livestock rather than the owner of the land upon which stock are grazed and watered, interferes with the ability of the United States to manage and administer public grazing lands, as directed by Congress, for the people of the whole country."

"This Court disagrees. The statutes governing the adjudication of vested water rights do not give the state engineer the authority to consider public policy in adjudicating vested water rights. The statutes give the state engineer the authority to consider only ‘proofs.’ The state engineer thus acted appropriately."

The federal government also argued that the state engineer awarded more water than Hage can use and that the amount of water should be limited to the amount of livestock restricted by the federal grazing permits. Again the court disagreed and upheld the state engineer’s ruling that Hage submitted substantial proofs showing that their predecessors in interest were first in right, first in time, properly put the water to beneficial use, and that those rights have been properly passed to the current owners. Hage holds senior vested stock watering rights, while the federal government is only entitled to diminutive use, junior to any other right.

The Fifth Judicial State Court’s ruling is an important victory for western water rights, and for the takings case Hage v. United States. Judge Loren Smith in the U.S. Court of Federal Claims case had adopted the State Water Engineer’s Determination Order in his preliminary decision on the ownership of property rights issued in November 1998. The State Court’s ruling further bolsters the takings case.

There is a remaining issue to be settled by the Nevada State District Court that will impact the Claims Court case. The federal government has argued that Wilderness designation on the Pine Creek allotments should give them a reserved water right. The federal attorneys have been encouraged in their quest for western water control by a recent Idaho Supreme Court decision, which recognized a federal reserved water right from unappropriated waters in an Idaho Wilderness area. While the Hage attorneys disagree with several points in the Idaho Supreme Court’s decision, the primary difference between the Idaho case and the Monitor Valley case is there is no unappropriated water on the Pine Creek Ranch allotments. The Nevada State Water Engineer said in his final Order of Determination that any reserved water right for wilderness on the Pine Creek Ranch allotments would be junior to the Pine Creek Ranch rights and would not allow for any diversion or consumption by the federal government and their environmentalists friends.

The Hage attorneys will argue that a reserved water right for wilderness is precluded by existing Acts of Congress and court precedent. They will argue that no recognition should be given to the federal reserved water right claim. A briefing schedule was set to address this argument, the outcome of which is critically important to the western states. The opening briefs were filed December 1, 1999.

So far, we have won every round in both the U.S. Court of Federal Claims and the Nevada State Water Adjudication. Already, the tandem actions leave a trial of solid property rights precedents for landowners and have environmentalists scrambling to prepare for appeal. Not one of these milestones could have been achieved without the members of Stewards of the Range. Plaintiff’s look forward to the next decision from the Claims Court expected to define the private property rights in the federal lands.

Permission to reprint is granted in whole or in part with attribution
to Stewards of the Range. Copyright 2002