1. 111 Water Rights Usufructuary Rights and Valuation Oct. 21, 2016 Matthew Emrick Ron Garland

2. Overview Usufructuary Rights Usufructuary Rights What are they in general What are they in general How are they acquired How are they acquired Water Rights Overview in the Context of a Right of Use Water Rights Overview in the Context of a Right of Use Surface water rights Surface water rights Groundwater rights Groundwater rights 2

3. Overview Other aspects of use on the scope of water rights and potential valuation Other aspects of use on the scope of water rights and potential valuation Valuing Water Rights as a right of USE Valuing Water Rights as a right of USE 3

4. Usufructuary Rights The right to enjoy the use and advantages of another's property short of the destruction or waste of its substance. Oxford English Dictionary The legal right of using and enjoying the fruits or profits of something belonging to another. Merriam Webster Thomas Jefferson said, "The earth belongs in usufruct to the living." Thomas Jefferson said, "The earth belongs in usufruct to the living." 4

5. Usufructuary Rights Rights to use property of another: Easements Easements Licenses Licenses Profit à Prendre Profit à Prendre 5

6. Usufructuary Rights Water Rights Significant difference - all water in California belongs to the State. Generally, cannot acquire right of use of public property. Significant difference - all water in California belongs to the State. Generally, cannot acquire right of use of public property. Water Code 102 - All water within the State is the property of the people of the State, but the right to the use of water may be acquired in the manner provided by law. Water Code 102 - All water within the State is the property of the people of the State, but the right to the use of water may be acquired in the manner provided by law. 6

7. 777 Water Rights Overview Keep in mind at all times: A right to USE water – not a right of possession. Scope of property right to water is based on USE

8. 888 Surface Water Rights What is a SURFACE Water ? What is a SURFACE Water ? Water flowing in natural channels: (Wat. Code, §§ 1200-1201) Water flowing in natural channels: (Wat. Code, §§ 1200-1201) Rivers and Streams Rivers and Streams Ponds and Lakes Ponds and Lakes Washes, sloughs, seasonal creeks Washes, sloughs, seasonal creeks Subterranean streams flowing through known and definite channels. (Wat. Code, § 1200.) Subterranean streams flowing through known and definite channels. (Wat. Code, § 1200.)

9. 999 Surface Water Rights California has what is known as the “Dual System” of Water Rights. California has what is known as the “Dual System” of Water Rights. Two types of Surface Water Rights: Two types of Surface Water Rights: Riparian Rights Riparian Rights Appropriative Rights Appropriative Rights

10. 10 Riparian Rights HISTORY Riparian water rights were developed under English common law and originally applied in the Eastern states. Riparian water rights were developed under English common law and originally applied in the Eastern states. The early legislature of California adopted the English common law and with it the law of riparian water rights. (Gin S. Chow v. City of Santa Barbara (1933) 217 Cal. 673.) The early legislature of California adopted the English common law and with it the law of riparian water rights. (Gin S. Chow v. City of Santa Barbara (1933) 217 Cal. 673.) California is one of the few Western States that recognize Riparian Rights. California is one of the few Western States that recognize Riparian Rights.

11. 11 Riparian Rights Acquiring the Right Riparian water rights are acquired by the ownership of riparian land. Riparian water rights are acquired by the ownership of riparian land. Riparian land is land that: Riparian land is land that: abuts a water course. Size of frontage not relevant to the amount of water that can be diverted; abuts a water course. Size of frontage not relevant to the amount of water that can be diverted; entirely within the watershed of the water course; and entirely within the watershed of the water course; and has never been severed from an abutting parcel. has never been severed from an abutting parcel. (Generally, a watershed is: an area of land where water drains to a common point.)

12. 12 Severance A’s rights severed when: B A C

13. 13 Riparian Rights No permit required from SWRCB. No permit required from SWRCB. The right to take water from an abutting stream is considered part and parcel of the riparian property. The right to take water from an abutting stream is considered part and parcel of the riparian property.

14. 14 Riparian Rights But Scope of the Right is based on USE Riparian rights can only be used on riparian lands. In this respect, riparian water rights are much more limited than appropriative rights. Riparian rights can only be used on riparian lands. In this respect, riparian water rights are much more limited than appropriative rights. Water taken under a riparian right must be put to an actual use and not wasted. (Article X, § 2; Wat. Code, § 100.) Water taken under a riparian right must be put to an actual use and not wasted. (Article X, § 2; Wat. Code, § 100.)

15. 15 Riparian Rights Correlative Rights – Right Defined by Use Each riparian owner is allowed to divert and use a proportional share of the water from a stream necessary for their uses without harming other riparian users. Each riparian owner is allowed to divert and use a proportional share of the water from a stream necessary for their uses without harming other riparian users. No specific quantity of water – scope defined by actual use. No specific quantity of water – scope defined by actual use. During a shortage all users must cut back on their use proportionally so that all can use some of the available water. During a shortage all users must cut back on their use proportionally so that all can use some of the available water.

16. 16 Riparian Rights Priority Against Other Riparians: no priority of use against other riparian rights holders. Correlative rights. All share alike. Against Other Riparians: no priority of use against other riparian rights holders. Correlative rights. All share alike. Against Appropriators: Against Appropriators: Riparian rights generally given preference over appropriative rights. Riparian rights generally given preference over appropriative rights. Unexercised riparian right may lose priority in adjudicative process. (In re Waters of Long Valley Creek Stream System, 599 P.2d 656 (Cal. 1979).) Unexercised riparian right may lose priority in adjudicative process. (In re Waters of Long Valley Creek Stream System, 599 P.2d 656 (Cal. 1979).)

17. 17 Riparian Rights Storage – temporary not permanent right to Storage for riparian right Storage – temporary not permanent right to Storage for riparian right There is generally no right to the long term or SEASONAL storage of water under a riparian right. There is generally no right to the long term or SEASONAL storage of water under a riparian right. Short term, temporary regulatory storage, however, may be allowed depending on the circumstances. Short term, temporary regulatory storage, however, may be allowed depending on the circumstances.

18. 18 Riparian Rights Waters Subject to Riparian Rights Natural flow of streams Natural flow of streams Subsurface streams and the subsurface flow of surface streams Subsurface streams and the subsurface flow of surface streams Lakes and Ponds Lakes and Ponds Sloughs Sloughs

19. 19 Appropriative Rights History and Background History and Background Gold rush on public lands. Gold rush on public lands. Miners local custom of “First in time, is first in right” for diverting water on arid, public lands. Miners local custom of “First in time, is first in right” for diverting water on arid, public lands. California courts adopt prior appropriation rule: California courts adopt prior appropriation rule: Water diverted away from stream and used on any land; Water diverted away from stream and used on any land; Right to a specific quantity of water; and Right to a specific quantity of water; and Right is transferable. Right is transferable.

20. Appropriative Rights Prior to 1914 – “right” acquired by actual “use.” Not associated with any specific property – however, are considered an “appurtenance” to the property the water is used on. Not associated with any specific property – however, are considered an “appurtenance” to the property the water is used on. Transfers with the Property on sale – even if not specified in the Deed. Transfers with the Property on sale – even if not specified in the Deed. 20

21. 21 Appropriative Rights Pre-1914 Rights Before 1914, Right acquired simply by three factors: Before 1914, Right acquired simply by three factors: Notice of intent to divert water; Notice of intent to divert water; Actual diversion of water; and the Actual diversion of water; and the Application of the water to some beneficial use. Application of the water to some beneficial use. Codification of the law – 1872 Civil Code provisions - posting and recording of a notice to establish priority date in addition to actual diversion and use. Codification of the law – 1872 Civil Code provisions - posting and recording of a notice to establish priority date in addition to actual diversion and use.

22. Appropriative Rights After 1914 - Right acquired by Permit from SWRCB. Scope of use in Permit. Still a Right of Use – must develop use within time frame set forth in the Permit. Still a Right of Use – must develop use within time frame set forth in the Permit. Ultimately, amount of water that can be used is not based on amount in Permit – but on amount actually used. Ultimately, amount of water that can be used is not based on amount in Permit – but on amount actually used. 22

23. 23 Appropriative Rights 1914 Water Commission Act: 1914 Water Commission Act: Establishes a permitting and licensing system. (Wat. Code, § 1200 et seq.) Establishes a permitting and licensing system. (Wat. Code, § 1200 et seq.) Administered by the State Water Resources Control Board (SWRCB). Administered by the State Water Resources Control Board (SWRCB).

24. 24 Priority of Use Oldest Rights have priority of use. Oldest Rights have priority of use. First in time is first in right. (Joerger v. Pacific Gas & Electric Co. (1929) 207 Cal. 8, 26.) First in time is first in right. (Joerger v. Pacific Gas & Electric Co. (1929) 207 Cal. 8, 26.) In times of shortage, water is allocated among all appropriative users along a stream according to this time-based priority system: In times of shortage, water is allocated among all appropriative users along a stream according to this time-based priority system: “As between appropriators... a prior appropriator is entitled to take all the water he needs, up to the amount that he has taken in the past, before a subsequent appropriator may take any.” Pasadena v. Alhambra (1949) 33 Cal.2d 908, 926. “As between appropriators... a prior appropriator is entitled to take all the water he needs, up to the amount that he has taken in the past, before a subsequent appropriator may take any.” Pasadena v. Alhambra (1949) 33 Cal.2d 908, 926.

25. 25 Appropriative Rights Scope of the Right Scope of the Right Priority – “Relation Back” Priority – “Relation Back” Priority does not start at the time water is actually used – “relates back” to the first act in perfecting the right. (Kelly v. Natoma Water Co. (1856) 6 Cal. 105.) Priority does not start at the time water is actually used – “relates back” to the first act in perfecting the right. (Kelly v. Natoma Water Co. (1856) 6 Cal. 105.) The water right “vests” upon the completion of the final act of perfecting the right - - actual beneficial use. The water right “vests” upon the completion of the final act of perfecting the right - - actual beneficial use. BUT priority “relates back” to the notice of intent to first TAKE the water (notice). BUT priority “relates back” to the notice of intent to first TAKE the water (notice).

26. 26 Appropriative Rights Amount of Right to Water: Defined by use. Defined by use. Allowed reasonable time to develop amount of use. Allowed reasonable time to develop amount of use.

27. 27 Appropriative Rights Changing the Purpose and Place of Use Changing the Purpose and Place of Use Pre-1914 Rights: may change the purpose of use (e.g. from agricultural to domestic), the location of the use or the location of the diversion point as a matter of right so long as the change does not adversely impact other users. (Wat. Code, § 1706.) Pre-1914 Rights: may change the purpose of use (e.g. from agricultural to domestic), the location of the use or the location of the diversion point as a matter of right so long as the change does not adversely impact other users. (Wat. Code, § 1706.) Post 1914 Rights: Post-1914 appropriators however must obtain the permission of the SWRCB to change location of use, location of diversion or type of use. (Wat. Code, § 1701.) Post 1914 Rights: Post-1914 appropriators however must obtain the permission of the SWRCB to change location of use, location of diversion or type of use. (Wat. Code, § 1701.)

28. 28 Appropriative Rights Waters Subject to Appropriation Waters Subject to Appropriation Surface waters of a stream or a lake. (Wat. Code, § 1201; Duckworth v. Watsonville Water & Light Co. (1907) 150 Cal. 520, 528-530.) Surface waters of a stream or a lake. (Wat. Code, § 1201; Duckworth v. Watsonville Water & Light Co. (1907) 150 Cal. 520, 528-530.) Spring waters flowing across multiple parcels of land or into a stream. (Ely v. Ferguson (1891) 91 Cal. 187, 190.) Spring waters flowing across multiple parcels of land or into a stream. (Ely v. Ferguson (1891) 91 Cal. 187, 190.) Subterranean streams flowing through known and definite channels. (Wat. Code, §§ 1200, 1201.) Subterranean streams flowing through known and definite channels. (Wat. Code, §§ 1200, 1201.) Foreign water. Water from one stream (or other water source) that is discharged into another stream. It is water that does not naturally flow into a particular stream. Foreign water is subject to appropriation. (Stevens v. Oakdale Irrigation District (1939) 13 Cal.2d 343.) Foreign water. Water from one stream (or other water source) that is discharged into another stream. It is water that does not naturally flow into a particular stream. Foreign water is subject to appropriation. (Stevens v. Oakdale Irrigation District (1939) 13 Cal.2d 343.)

29. 29 Groundwater Rights Groundwater is treated distinctly from surface water in California. Groundwater is treated distinctly from surface water in California. Generally, the state asserts no permitting authority over groundwater. (Wat. Code, §§ 1200, 1201.) Generally, the state asserts no permitting authority over groundwater. (Wat. Code, §§ 1200, 1201.) Some local jurisdictions, Counties and Cities, are beginning to regulate the use of groundwater to some extent; however, the issue of ownership is still controlled by long-standing and well established judicial authority. Some local jurisdictions, Counties and Cities, are beginning to regulate the use of groundwater to some extent; however, the issue of ownership is still controlled by long-standing and well established judicial authority.

30. 30 Groundwater Rights Two Types of Groundwater Rights: Two Types of Groundwater Rights: Overlying Groundwater Rights. Overlying Groundwater Rights. Appropriative Groundwater Rights. Appropriative Groundwater Rights.

31. 31 Overlying Groundwater Rights Similar to a riparian right. Similar to a riparian right. A property right to use groundwater. A property right to use groundwater. Ownership of land overlying a groundwater source grants right to use that water. Ownership of land overlying a groundwater source grants right to use that water.

32. 32 Overlying Groundwater Rights Right is obtained by the ownership of property overlying a groundwater source: Right is obtained by the ownership of property overlying a groundwater source: “An overlying water right is analogous to that of a riparian owner’s right in a stream; it is the right to take water from the ground underneath the land for use on the land. The right is based on the ownership of the land...” (Tehachapi-Cummings County Water District v. Armstrong (1975) 49 Cal.App.3d, 992.) No Permit required from the SWRCB. No Permit required from the SWRCB. Although permits may be required to drill a well or to export the water outside of a county or in some cases to other overlying properties. (See generally Baldwin v. County of Tehama (1994) 31 Cal.App.4th 166.) Although permits may be required to drill a well or to export the water outside of a county or in some cases to other overlying properties. (See generally Baldwin v. County of Tehama (1994) 31 Cal.App.4th 166.)

33. 33 Overlying Groundwater Rights Water Subject to Overlying Rights “Percolating” groundwater. Groundwater that resides in an underground basin or which percolates in the soil. (Vineland Irr. Dist. v. Azusa Irrigating Co. (1899) 126 Cal. 486). “Percolating” groundwater. Groundwater that resides in an underground basin or which percolates in the soil. (Vineland Irr. Dist. v. Azusa Irrigating Co. (1899) 126 Cal. 486). Groundwater in California is presumed to be percolating and the burden of proof is on any person asserting that the water is not percolating. (Los Angeles v. Pomeroy (1899) 124 Cal. 597). Groundwater in California is presumed to be percolating and the burden of proof is on any person asserting that the water is not percolating. (Los Angeles v. Pomeroy (1899) 124 Cal. 597).

34. 34 Overlying Groundwater Rights Water Subject to Overlying Rights (continued) Overlying rights do not attach to: Overlying rights do not attach to: subterranean stream flows: subterranean stream flows: Subsurface channel exists Subsurface channel exists Impermeable bed and banks Impermeable bed and banks Channel is known or capable of being known Channel is known or capable of being known Water flows in the channel. Water flows in the channel. (North Gualala Water Company v. State Water Resources Control Board, (2006) 139 Cal.App.4th 1577 (“impact test” rejected). (North Gualala Water Company v. State Water Resources Control Board, (2006) 139 Cal.App.4th 1577 (“impact test” rejected). 34

35. 35 Overlying Groundwater Rights Correlative Rights – Scope based on USE Overlying rights are correlative – like riparian rights. (Katz v. Walkinshaw (1902) 141 Cal. 116.) Overlying rights are correlative – like riparian rights. (Katz v. Walkinshaw (1902) 141 Cal. 116.) All overlying users have an equal right to take sufficient water to meet their needs. Id. All overlying users have an equal right to take sufficient water to meet their needs. Id. During times of shortage all users must share their water proportionately with all other users taking groundwater from the same basin. Id. During times of shortage all users must share their water proportionately with all other users taking groundwater from the same basin. Id.

36. 36 Overlying Groundwater Rights Land On Which Right Can be Used Property overlying the percolating groundwater. (Burr v. Maclay Rancho Water Co. (1908) 154 Cal. 428). Property overlying the percolating groundwater. (Burr v. Maclay Rancho Water Co. (1908) 154 Cal. 428). If the water is used on non-overlying property, the water loses its characterization as an overlying right. Id. If the water is used on non-overlying property, the water loses its characterization as an overlying right. Id.

37. 37 Overlying Groundwater Rights Reasonable and Beneficial Use Applies As with surface water rights, overlying groundwater rights are subject to reasonable use and cannot be used in a wasteful manner. (Katz v. Walkinshaw (1902) 141 Cal. 116). As with surface water rights, overlying groundwater rights are subject to reasonable use and cannot be used in a wasteful manner. (Katz v. Walkinshaw (1902) 141 Cal. 116).Though

38. 38 Groundwater Appropriation Rights are acquired by USE. By the pumping of water from one parcel of property overlying a groundwater basin for use on property lying outside of the basin. Rights are acquired by USE. By the pumping of water from one parcel of property overlying a groundwater basin for use on property lying outside of the basin. Not acquired with Property ownership Not acquired with Property ownership NO PERMIT is required to obtain the right, although other permits for drilling the well or for transporting water to other areas may be required by certain local municipalities and counties. (See generally Baldwin, supra, 31 Cal.App.4th 166.) NO PERMIT is required to obtain the right, although other permits for drilling the well or for transporting water to other areas may be required by certain local municipalities and counties. (See generally Baldwin, supra, 31 Cal.App.4th 166.)

39. 39 Groundwater Appropriation Priority Subordinate to Overlying Uses: A groundwater appropriator’s right to use water is subordinate to all of the overlying users in a basin. Subordinate to Overlying Uses: A groundwater appropriator’s right to use water is subordinate to all of the overlying users in a basin. First In Time, First In Right: Among groundwater appropriators, the right to pump water is not based on correlative rights as are overlying users. Instead, appropriators’ rights to pump water from a particular basin are subject to a “first in time” based priority system similar to surface water appropriators. First In Time, First In Right: Among groundwater appropriators, the right to pump water is not based on correlative rights as are overlying users. Instead, appropriators’ rights to pump water from a particular basin are subject to a “first in time” based priority system similar to surface water appropriators.

40. 40 Groundwater Appropriation Water Subject to Appropriation Percolating Groundwater Percolating Groundwater Appropriators entitled to divert and use only water that is in surplus of the needs of all the overlying users. Appropriators entitled to divert and use only water that is in surplus of the needs of all the overlying users. Surplus water is that quantity of groundwater in excess of the water needed to meet the needs of the overlying users. Surplus water is that quantity of groundwater in excess of the water needed to meet the needs of the overlying users. Burden is on the appropriator to show there is Surplus Water available. Burden is on the appropriator to show there is Surplus Water available. In times of overdraft, there is no surplus water. In times of overdraft, there is no surplus water.

41. 41 Groundwater Appropriation Land On Which Appropriative Right Can Be Used Unlike overlying uses, appropriators may use the water on any property including non-overlying lands outside of the ground water basin. Unlike overlying uses, appropriators may use the water on any property including non-overlying lands outside of the ground water basin. Municipalities are deemed appropriators, even if the City overlies a groundwater basin. (San Bernardino v. Riverside (1921) 186 Cal. 7). Municipalities are deemed appropriators, even if the City overlies a groundwater basin. (San Bernardino v. Riverside (1921) 186 Cal. 7).

42. 42 Other Rights to Water Spring Waters: What Are Spring Waters: “Water rising to the surface of the earth from below and either flowing away in the form of a small stream or standing as a pool or small lake” De Wolfskill v. Smith (1907) 5 Cal.App. 175, 181.

43. 43 Other Rights to Water Spring Waters: What Rights Are There to Spring Waters: What Rights Are There to Spring Waters: Contained On Property: where the water from a naturally occurring spring remains entirely within the boundaries of a parcel of property, then the water from the spring generally belongs to the property owner. Simmons v. Inyo Cerro Gordo Mining and Power Co. (1920) 48 Cal.App. 524 Contained On Property: where the water from a naturally occurring spring remains entirely within the boundaries of a parcel of property, then the water from the spring generally belongs to the property owner. Simmons v. Inyo Cerro Gordo Mining and Power Co. (1920) 48 Cal.App. 524 No SWRCB Permit needed to use this water. No SWRCB Permit needed to use this water.

44. 44 Other Rights to Water Spring Waters: What Rights Are There to Spring Waters: What Rights Are There to Spring Waters: Flowing Off Property: if the water from the spring flows onto other properties or into a stream, the flow is treated as a stream. Flowing Off Property: if the water from the spring flows onto other properties or into a stream, the flow is treated as a stream. Property owner has riparian rights to flow (if property is riparian to flow). Property owner has riparian rights to flow (if property is riparian to flow). Permit from the SWRCB may be needed to appropriate this water if no Riparian Rights. Permit from the SWRCB may be needed to appropriate this water if no Riparian Rights.

45. 45 Additional Aspects of Water Rights in the Context of a Right of Use

46. Beneficial Use All water must be put to a Beneficial Use. All water must be put to a Beneficial Use. No matter what a Permit might state or what the prior amount of water used - ALL water is limited to the amount of water that are put to a Beneficial Use. No matter what a Permit might state or what the prior amount of water used - ALL water is limited to the amount of water that are put to a Beneficial Use. No matter what the nature of the right – it is defined and limited by Beneficial Use. No ownership of the “corpus” of the water. No matter what the nature of the right – it is defined and limited by Beneficial Use. No ownership of the “corpus” of the water. 46

47. Beneficial Use Beneficial Uses: Drinking water, irrigation, industrial use, mining, fire suppression, dust control. Water Code 106. More recently: recreation and fish and wildlife. (Cal. Code Regs., tit. 23, §§ 659-672.) Beneficial Uses: Drinking water, irrigation, industrial use, mining, fire suppression, dust control. Water Code 106. More recently: recreation and fish and wildlife. (Cal. Code Regs., tit. 23, §§ 659-672.) Beneficial Uses: Water to control gophers, water to wash off public roads by private parties, growing marijuana (?) for non- medical use. NOT Beneficial Uses: Water to control gophers, water to wash off public roads by private parties, growing marijuana (?) for non- medical use. 47

48. Beneficial Use Beneficial Use. Remember - All Water rights in California are measured by the amount of water being used beneficially. All Water rights in California are measured by the amount of water being used beneficially. Does not matter what a permit or license states or what past history of use was – measure/scope of the water right is defined by beneficial use. Does not matter what a permit or license states or what past history of use was – measure/scope of the water right is defined by beneficial use. 48

49. 49 Reasonable Use The right to water or to the use or flow of water in or from any natural stream or water course in this State is and shall be limited to such water as shall be reasonably required for the beneficial use to be served. (Cal. Const., art. X, § 2; see also Wat. Code, § 100.) The right to water or to the use or flow of water in or from any natural stream or water course in this State is and shall be limited to such water as shall be reasonably required for the beneficial use to be served. (Cal. Const., art. X, § 2; see also Wat. Code, § 100.) 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. (Cal. Const., art. X, § 2; see also Wat. Code, § 100.) 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. (Cal. Const., art. X, § 2; see also Wat. Code, § 100.)

50. 50 Reasonable Use Test Test For Reasonable Use: A balancing of competing water uses dependant on the facts and public policy. United States v. State Water Resources Control Board (1986) 182 Cal.App.3d 82 A balancing of competing water uses dependant on the facts and public policy. United States v. State Water Resources Control Board (1986) 182 Cal.App.3d 82 A use may be for a beneficial purpose, but nevertheless be found to be unreasonable use. A use may be for a beneficial purpose, but nevertheless be found to be unreasonable use. What is a “Reasonable” use of water can change over time. Dynamic. What is a “Reasonable” use of water can change over time. Dynamic. “What is a beneficial use at one time may, because of changed conditions, become a waste of water at a later time.” Tulare Irrigation District v. Lindsay-Strathmore Irrigation District (1935) 3 Cal.2d 489, 567. “What is a beneficial use at one time may, because of changed conditions, become a waste of water at a later time.” Tulare Irrigation District v. Lindsay-Strathmore Irrigation District (1935) 3 Cal.2d 489, 567.

51. Reasonable Use Why It Matters No vested right to use water unreasonably, or use an unreasonable amount of water, or to waste water. No vested right to use water unreasonably, or use an unreasonable amount of water, or to waste water. Can lose or limit long held right to water without compensation Can lose or limit long held right to water without compensation Who Decides Courts Courts SWRCB SWRCB 51

52. Reasonable Use Examples of Reasonable Use: Tulare Irrigation District v. Lindsay-Strathmore Irrigation District (1935) 3 Cal.2d 489. Erickson v. Queen Valley Ranch Company (1971) 22 Cal.App.3d 578. Gin S. Chow v. City of Santa Barbara (1933) 217 Cal. 673 Jordan v. City of Santa Barbara (1996) 46 Cal.App.4 th 1245. Joslin v. Marin Mun. Water Dist. (1967) 67 Cal.2d 132 Imperial Irrigation District v. State Water Resources Control Board (1990) 225 Cal.App.3d 548 State Water Resources Control Board Cases (2006) 46 Cal.App.4 th 1245 52

53. 53 Public Trust Another limit on USE of surface waters Another limit on USE of surface waters What is the Public Trust: What is the Public Trust: The State has a duty to protect the use of navigable waters by the public. The State has a duty to protect the use of navigable waters by the public. The State owns the navigable waters and the land underneath them as trustee for the public. The State owns the navigable waters and the land underneath them as trustee for the public. What is a Public Trust “use”: What is a Public Trust “use”: Modern view: also protects environmental resources, recreation and aesthetics. Modern view: also protects environmental resources, recreation and aesthetics.

54. 54 Public Trust What waters does the Public Trust apply to: What waters does the Public Trust apply to: Bays, estuaries, tidelands; Bays, estuaries, tidelands; Surface waters; Surface waters; Naturally occurring navigable waters; and Naturally occurring navigable waters; and Tributaries to navigable waters. National Audubon Society v. Superior Court (1983) 33 Cal.3d 419. Tributaries to navigable waters. National Audubon Society v. Superior Court (1983) 33 Cal.3d 419.

55. 55 Public Trust Application of Public Trust to surface water rights: Application of Public Trust to surface water rights: Water rights in navigable waters and non-navigable tributaries to navigable waters are subject to the public trust. Water rights in navigable waters and non-navigable tributaries to navigable waters are subject to the public trust. No vested right to harm the public trust. No vested right to harm the public trust. Public Trust must be protected “whenever feasible. – a very high standard in favor of the environment. Public Trust must be protected “whenever feasible. – a very high standard in favor of the environment. Public trust protection is on-going. Public trust protection is on-going. Can change water allocation even after substantial investment and reliance. Can change water allocation even after substantial investment and reliance.

56. 56 Public Trust Issues for Consideration Issues for Consideration Public trust use does not automatically take precedence over a water right. Balancing of trust and water uses. Public trust use does not automatically take precedence over a water right. Balancing of trust and water uses. Causes uncertainty. Causes uncertainty.

57. 57 Loss of Water Rights Severance: Severance: All rights can be severed or separated from property. All rights can be severed or separated from property. Riparian rights may be destroyed on severance. Riparian rights may be destroyed on severance. Appropriative rights can survive severance but no longer attach to the property. Appropriative rights can survive severance but no longer attach to the property.

58. 58 Loss of Water Rights Prescription – Use of Other Owner’s Rights: What Is It: A claimed prescriptive water right, like a prescriptive easement claim, includes use that is: (1) actual, (2) open and notorious, (3) hostile and adverse to the original owner, (4) continuous and uninterrupted, (5) under a claim of right, (6) for the statutory period of five years. (Civ. Code, § 1007; Brewer v. Murphy (2008) 161 Cal. App. 4th 928, 938; see also People v. Shirokow (1980) 26 Cal.3d 301.)

59. 59 Loss of Water Rights Prescription: SURFACE WATER: SURFACE WATER: Early court cases recognized the right to acquire surface water by prescription. (E. Clemens Horst Co. v. Tarr Mining Co. (1917) 174 Cal. 430, 438-440.) Early court cases recognized the right to acquire surface water by prescription. (E. Clemens Horst Co. v. Tarr Mining Co. (1917) 174 Cal. 430, 438-440.) May not gain appropriative rights through prescription. People v. Shirokow (1980) 26 Cal.3d 301. Requires NOTICE in the form of an application to the State Water Resources Control Board. May not gain appropriative rights through prescription. People v. Shirokow (1980) 26 Cal.3d 301. Requires NOTICE in the form of an application to the State Water Resources Control Board. May potentially gain riparian rights through prescription if you are a riparian user too. May potentially gain riparian rights through prescription if you are a riparian user too.

60. 60 Loss of Water Rights Prescription: Groundwater : Groundwater : Long history of Prescriptive Groundwater Rights being recognized as valid. (City of Pasadena v. City of Alhambra (1949) 33 Cal.2d 908.) Long history of Prescriptive Groundwater Rights being recognized as valid. (City of Pasadena v. City of Alhambra (1949) 33 Cal.2d 908.) Cannot acquire rights of use against a public agency or state by prescription. Cannot acquire rights of use against a public agency or state by prescription.

61. 61 Loss of Water Rights Prescription: Groundwater (cont.): Groundwater (cont.): Subordination or loss of unused overlying rights – a prescription for the future?: Subordination or loss of unused overlying rights – a prescription for the future?: “Although we do not address the question here, Wright does suggest that, in theory at least, a trial court could apply the Long Valley riparian principles to reduce a landowner’s future overlying water right use... “ (City of Barstow v. Mojave Water Agency (2000) 23 Cal.4 th 1224.)

62. 62 Loss of Water Rights Loss by Non-Use: Forfeiture: Appropriative rights, both pre-1914 and post-1914 rights, are subject to forfeiture if the rights are not used for a period of five (5) consecutive years. (Wat. Code, §§ 1240, 1241.) Appropriative rights, both pre-1914 and post-1914 rights, are subject to forfeiture if the rights are not used for a period of five (5) consecutive years. (Wat. Code, §§ 1240, 1241.) A forfeiture may be of an entire water right, a portion of the water right or to a portion of the year, or both. (Smith v. Hawkins (1898) 120 Cal. 86, 88.) A forfeiture may be of an entire water right, a portion of the water right or to a portion of the year, or both. (Smith v. Hawkins (1898) 120 Cal. 86, 88.) Forfeiture does not occur when the ability to divert is limited by availability of water supply. (Huffner v. Sawday (1908) 153 Cal. 86.) Forfeiture does not occur when the ability to divert is limited by availability of water supply. (Huffner v. Sawday (1908) 153 Cal. 86.) “May” be revived by a new use of the forfeited right. “May” be revived by a new use of the forfeited right.

63. 63 Loss of Water Rights Loss of Use of Other Water Rights: Loss of Use of Other Water Rights: Riparian and Overlying Rights: Mere non use does not extinguish riparian rights or overlying groundwater rights. But may lose priority of unexercised rights. Riparian and Overlying Rights: Mere non use does not extinguish riparian rights or overlying groundwater rights. But may lose priority of unexercised rights. Riparian Riparian In re Waters of Long Valley Creek Stream System (1979) 25 Cal.3d 339, the California Supreme Court held that an unexercised water right that creates uncertainty as to other water rights is an unreasonable use. Loses Priority.

64. Loss of Water Rights Overlying Rights: “Although we do not address the question here, Wright does suggest that, in theory at least, a trial court could apply the Long Valley riparian principles to reduce a landowner’s future overlying water right use... “ (City of Barstow v. Mojave Water Agency (2000) 23 Cal.4 th 1224.) Overlying Rights: “Although we do not address the question here, Wright does suggest that, in theory at least, a trial court could apply the Long Valley riparian principles to reduce a landowner’s future overlying water right use... “ (City of Barstow v. Mojave Water Agency (2000) 23 Cal.4 th 1224.) Appropriative Groundwater: Statutory forfeiture does not apply to Appropriative Groundwater rights – but may be deemed abandoned if not used or subject to prescription. Appropriative Groundwater: Statutory forfeiture does not apply to Appropriative Groundwater rights – but may be deemed abandoned if not used or subject to prescription. 64

65. Valuation Scenarios Valuation Scenario #1 Client has a license from the SWRCB for an appropriative right to divert 20 cfs from the Truckee River. Client has a license from the SWRCB for an appropriative right to divert 20 cfs from the Truckee River. Client has diverted 15 cfs for the last 10 years. Client has diverted 15 cfs for the last 10 years. Discussion: Discussion: What is the amount of water client is entitled to divert? 65

66. Valuation Scenario #2 Client owns a well on property. Well capacity is 100 gpm. Client owns a well on property. Well capacity is 100 gpm. Client has not pumped water from the well for 50 years but previously pumped up to 80 gpm for agricultural uses on 200 acres. Client has not pumped water from the well for 50 years but previously pumped up to 80 gpm for agricultural uses on 200 acres. Discussion: Discussion: What is the amount of water the client is entitled to pump from the well? 66

67. Valuation Scenario #3 Client owns riparian water rights. Client owns riparian water rights. Client irrigates 50 of her total 100 acres all of which are riparian to the adjacent stream. Has never irrigated the entire 100 acres of property. Client irrigates 50 of her total 100 acres all of which are riparian to the adjacent stream. Has never irrigated the entire 100 acres of property. Uses about 150 afy of water. Uses about 150 afy of water. Discussion: Discussion: What is the amount of water the client is entitled to divert? 67

68. Valuation Scenario #4 Client owns a well on property. Client owns a well on property. Well capacity is 100 gpm. Well capacity is 100 gpm. Client is presently not using the well and has not used it for over 30 years. Client is presently not using the well and has not used it for over 30 years. Public agency condemns the well for its own use as a domestic well. Public agency condemns the well for its own use as a domestic well. Discussion: P Discussion: Potential issues related to valuation of the well? 68

69. Valuation Scenario #5 Client owns a well on property. Client owns a well on property. Well capacity is 100 gpm. Well capacity is 100 gpm. Client is presently not using the well and has not used it for over 30 years. Client is presently not using the well and has not used it for over 30 years. Public agency condemns new well on the property for use as a domestic well. Public agency condemns new well on the property for use as a domestic well. Discussion: P Discussion: Potential issues related to valuation of the well? 69

70. Valuation Scenario’s in the context of Use Court Cases Valuation Scenario #6: Your property owner is claiming inverse condemnation. Your property owner owns riparian rights along a stream. Uses water for sand and gravel mining operations. Large dam built upstream resulting in reduced water to your client’s property. Cannot operate sand and gravel business because of reduced water. 70

71. Issues to consider: Your client’s riparian right has priority over upstream public agency dam which is an appropriative right. Your client’s use of water is confirmed over the prior 60 years. Water from Dam will be used for municipal drinking water. No water yet put to use. 71

72. HELD: Your client’s riparian rights have no value because their “use” is unreasonable. Your client’s riparian rights have no value because their “use” is unreasonable. Unreasonable to have so much water flow to your client’s property for their sand and gravel operation compared to the value of upstream municipal project. Unreasonable to have so much water flow to your client’s property for their sand and gravel operation compared to the value of upstream municipal project. Joslin v. Marin Mun. Water Dist. (1967) 67 Cal.2d 132 72

73. Valuation Scenario #7: Your client has pre-1914 appropriative rights with a priority before the 1880’s. Your client has pre-1914 appropriative rights with a priority before the 1880’s. Your client has a large un-lined irrigation canal that diverts water to her property. Your client has a large un-lined irrigation canal that diverts water to her property. Client has kept great records showing that her family has diverted up to two-thirds of the flow of the water to the property since the first diversion. Client has kept great records showing that her family has diverted up to two-thirds of the flow of the water to the property since the first diversion. 73

74. Issues for Consideration: Ditch is un-lined but well maintained. Ditch is un-lined but well maintained. Most ditches in the area are un-lined. Most ditches in the area are un-lined. Transportation loses are about two-thirds of the water diverted. Transportation loses are about two-thirds of the water diverted. Downstream property owners are looking to obtain permits from the SWRCB to divert water – such permits would be junior to your client’s rights. Downstream property owners are looking to obtain permits from the SWRCB to divert water – such permits would be junior to your client’s rights. 74

75. HELD: The amount of water that attaches to your client’s rights is the water that actually is used beneficially – e.g. one-third of the amount of water not lost by transportation. Not the capacity of the Ditch; not the amount of water actually used. The amount of water that attaches to your client’s rights is the water that actually is used beneficially – e.g. one-third of the amount of water not lost by transportation. Not the capacity of the Ditch; not the amount of water actually used. Transportation losses have to come from that amount or line/pipe the ditch. Transportation losses have to come from that amount or line/pipe the ditch. Unreasonable to use so much water when others along the stream could put water to beneficial use. Unreasonable to use so much water when others along the stream could put water to beneficial use. Erickson v. Queen Valley Ranch Company (1971) 22 Cal.App.3d 578 75

76. Valuation Scenario #8 Client owns dam and stores water. Client owns dam and stores water. Client has permit from the SWRCB to store up to 1000 afy in the dam and reservoir. Client has permit from the SWRCB to store up to 1000 afy in the dam and reservoir. Currently diverts 500 afy from reservoir. Currently diverts 500 afy from reservoir. SWRCB orders Client to release 200 AFY for fish purposes during drought. SWRCB orders Client to release 200 AFY for fish purposes during drought. 76

77. HELD: No value to water required to be released because your client has not yet been put that water to a beneficial use. HELD: No value to water required to be released because your client has not yet been put that water to a beneficial use. Casitas Mun. Water Dist.. v. Daley 708 F.3d 1340 (Fed. Cir. 2013) 77

78. Valuation Scenario #9: Your client owns property adjacent to a river. Your client owns property adjacent to a river. Your client claims riparian rights to the river. Your client claims riparian rights to the river. A local public agency drills well on your property without consent to divert the underflow of the river. A local public agency drills well on your property without consent to divert the underflow of the river. Your client is not presently diverting any water at all under their riparian rights. Your client is not presently diverting any water at all under their riparian rights. No evidence Public Agency interfering with your clients ability to divert water from the stream. No evidence Public Agency interfering with your clients ability to divert water from the stream. 78

79. HELD: Your client is entitled to compensation despite no present beneficial use and no showing of actual interference with right. Your client is entitled to compensation despite no present beneficial use and no showing of actual interference with right. (1984) 161 Cal. App. 3d 456 Santa Clarita Water Co. v. Lyons (1984) 161 Cal. App. 3d 456 79

80. QUESTIONS: 80