Public Trust Doctrine disallows reallocation of adjudicated water rights, Nevada Supreme Court says.

On Sept 17, the Nevada Supreme Court[i] ruled after oral arguments in the Walker Case”[ii] [iii]  that the public trust doctrine is embedded in current water law[iv] and disallows the relocation of adjudicated water rights for anything other than its intended purpose.

Defeated in this case was the argument by attorneys for Mineral County and the Walker Lake Working Group’s that Nevada state officials failed in their fiduciary obligation to protect Walker Lake under the public trust doctrine. As a result, they claimed, Walker Lake has progressively and severely degraded to the point where several of the Lake’s core public trust uses and values have been lost, at least, for the time being.

Mineral County et al. wanted water previously appropriated diverted to sustain the dying Walker Lake.

The Justices recognized that the Walker Basin could not meet the county’s needs without reallocating adjudicated water rights. However, they point out that: “our states water rights statutes forbid reallocation adjudicated water rights, adding that “water rights holders have certainty and finality in their water appropriations so that they may effectively direct water usage to its beneficial use, without undue uncertainty or waste.”

“We cannot use the public trust doctrine as a tool to uproot an entire water system, particularly where finality is firmly rooted in our statutes,” the three majority justices said.

Going further, The Justices say that: “water rights cannot be reallocated under the public trust [doctrine],” and “rights holders must continually use water beneficially or lose those rights.” Therefore, the Justices held “that the public trust doctrine does not permit reallocating water rights already adjudicated and settled under the doctrine of prior appropriation.”

The Justices added that: “To allow the state otherwise to allocate waters without due regard for the public trust would permit the state to evade its fiduciary duties, and this we cannot sanction.”

“Participants in water adjudications are entitled to rely on the finality of decrees[v] as much as, if not more than, parties to other types of civil judgments,” the Justices argued.

The Justices pointed out the importance of finality in economic development by saying that: “Municipal, social, and economic institutions rely on the finality of water rights for long-term planning and capital investments. Likewise, agricultural and mining industries rely on the finality of water for capital and output, which impacts other businesses and influences the prosperity of the state. To permit reallocation would create uncertainties for future development in Nevada and undermine the public interest in finality and thus also the management of these resources consistent with the public trust doctrine.”

Also, they pointed to NRS 533.045 and NRS 533.060 as ending the right to divert water when unused. “When the necessity for the use of water does not exist, the right to divert it ceases and no person shall be permitted to divert or use the waters of this State except at such times as the water is required for a beneficial purpose,” They said.

They added that “The balance of the water not so appropriated [for economic and beneficial use] must be allowed to flow in the natural stream . . . and must not be considered as having been appropriated thereby.”

The Justices pointed out that Nevada’s public trust doctrine derived not only from common law but from Nevada’s Constitution, its statutes, and the inherent limitations on the state’s sovereignty. [vi]

They pointed to Article 8, Section 9 of the Nevada Constitution, known as the gift clause. That article states:  “The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.” According to the Justices, “this clause limits the Legislatures’ ability to dispose of the public’s resources, at the core of which lays the principle that the state acts only as a fiduciary for the public when disposing of the public’s valuable property.” [vii]

[T]he public trust doctrine, like the gift clause, requires the state to serve as trustee for public resources,” the Justices said:  “Moreover, we noted that the Legislature effectively codified the principles behind the public trust doctrine through NRS 321.0005 and NRS 533.025.

The Justices reinforced the Legislature’s declaration that:  “[t]he waters of all sources of water supply within the boundaries of the State whether above or beneath the surface of the ground, belongs to the public.” [viii]  the Justices clarified that the public trust doctrine applies to all state waters, whether navigable or non-navigable and the lands underneath navigable waters. To limit the public trust doctrine to only navigable waterways and the lands below would ignore the fact that flowing water that feeds into the navigable waters is allocated along the way.

Endnote:

[i] Before the Court En Banc. Author: Stiglich, J. Majority: Gibbons/Hardesty/Stiglich/Cadish. Concurring in part and dissenting in part: Pickering/Silver. fn1 [The Honorable Ron D. Parraguirre, Justice, voluntarily recused himself from participation in the decision of this matter.] 136 Nev. Adv. Opn. No. 58. En Banc. (SC).

[ii] MINERAL COUNTY, et al., Appellants. vs. LYON COUNTY; CENNTENNIAL LIVESTOCK; BRIDEGPORT RANCHERS; SCHROEDER GROUP; WALKER RIVER IRRIGATION DISTRICT; STATE OF NEVADA DEPARTMENT OF WILDLIFE; AND COUNTY OF MONO, CALIFORNIA.

[iii] The issue came before the Supreme Court as the result of two Ninth Circuit Court of Appeals orders which certified these two questions of Nevada state law to the Supreme Court for decision pursuant to NRAP 5.

v] , NRS 533.210(1) provides that: “The decree entered by the court, as provided by NRS 533.185, shall be final and shall be conclusive upon all persons and rights lawfully embraced within the adjudication.

[vi] Id. at 398, 254 P.3d at 612.

[vii] Lawrence, 127 Nev. at 399, 254 P.3d at 612.

[viii] NRS 533.025.