In the long-running dispute over the waters of the Walker River, the Ninth Circuit Court of Appeals recently certified the following question of law to the Nevada Supreme Court:

• Does the public trust doctrine apply to rights already adjudicated and settled under the doctrine of prior appropriation and, if so, to what extent?”

The Nevada Supreme Court accepted the certified question and set a briefing schedule, setting off what is sure to be a flurry of activity from the parties and a slate of amici. [Mono County, et al. v. Walker River Irr. Dist., et al., 890 F.3d 1174 (9th Cir. 2018) (certifying question to Nevada Supreme Court); Mineral County, et al. v. Lyon County, et al., Nevada Supreme Court Case No. 75917 (July 18, 2018) (accepting certified question and directing briefing).]

Factual and Procedural Background

The Walker River runs from the Sierra Nevada Mountains in California into the Great Basin of Nevada, where it terminates in Walker Lake. The majority of precipitation and surface water flow into the Walker River Basin occurs in California, but most of the water is consumed by irrigators in Nevada. Since agricultural appropriations from the river and its tributaries first commenced in the mid-nineteenth century, the size and volume of Walker Lake have shrunk significantly, and the concentrations of total dissolved solids have risen to the point where the lake can no longer sustain a fishery. Disagreement exists as to the causes of these changes, but there is general consensus that upstream diversions play at least some part.

Litigation over the Walker River commenced in 1902 as a trans-border dispute in the U.S. District Court for Nevada between two ranching operations, one in California and one in Nevada. The case ended in 1919, but five years later, the United States commenced a new action in the same federal court seeking to establish a federally reserved water right for the Walker River Paiute Tribe (Tribe). The court issued a decree in 1936 (subsequently amended in 1940) that distributed water rights to the Tribe and various other claimants and that retained jurisdiction in the decree court for future modification.

In 1991, the Walker River Irrigation District filed a petition with the decree court to enforce its decreed rights in response to regulatory action by the California Water Resources Control Board to prevent the District from dewatering portions of the river. The Tribe and the United States filed counterclaims, asserting new rights for a reservoir built on the tribal land. In 1994, Mineral County moved to intervene, requesting that the court reopen and modify the decree:

• . . .to recognize the rights of Mineral County … and the public to have minimum [water] levels to maintain the viability of Walker Lake.

Invoking the public trust doctrine, Mineral County requests that the court require at least 127,000 acre-feet annually to reach Walker Lake.

In 2015, the decree court dismissed Mineral County’s complaint in intervention for lack of standing but nevertheless proceeded to address, in detail, the applicability of the public trust doctrine. The court concluded that the public trust doctrine could not be used to reallocate decreed rights without constituting a taking for which just compensation must be paid. Mineral County appealed.

The Ninth Circuit’s Decision

The Ninth Circuit held the U.S. District Court erred by dismissing Mineral County’s complaint in intervention for lack of standing. The court then proceeded to discuss the public trust doctrine jurisprudence in Nevada, noting that the Nevada Supreme Court expressly recognized the doctrine but “whether it permits reallocation of rights settled under the separate doctrine of prior appropriation” remains unsettled.

Analysis Under the LawrenceDecision

The Ninth Circuit’s analysis started with the case of Lawrence v. Clark County, 254 P.3d 606 (Nev. 2011), which involved the Nevada Legislature’s effort to transfer state owned land that may have been navigable when Nevada joined the United States. In Lawrence the Nevada Supreme Court formally recognized the public trust doctrine for the first time, although it pointed to several earlier decisions in which it had applied public trust principles. The court identified the doctrine as being:

• . . .based on a policy reflected in the Nevada Constitution, Nevada statutes, and the inherent limitations on the state’s sovereign power.

It set out a three-part test to assess whether the doctrine permits alienation of state land.

The earlier decisions cited by the court included Mineral County v. Nevada Dep’t of Conserv. & Nat. Res., 20 P.3d 800, 802-05 (2001), a state court iteration of Mineral County’s public trust claim, which had been dismissed in light of the federal decree court’s prior exclusive jurisdiction. In considering the case, however, Justice Robert Rose wrote a concurring opinion that expounded the public trust doctrine in Nevada water law. Although no subsequent Nevada Supreme Court decision formally adopted Justice Rose’s concurrence, the Lawrencecourt deemed it persuasive authority.

Public Trust Doctrine and Prior Appropriations in Nevada

After discussing this history of the public trust doctrine in Nevada, the Ninth Circuit analyzed the parties’ competing arguments as to whether Nevada would apply the doctrine to reallocate water rights long settled under the doctrine of prior appropriation. The court noted the polarity of the parties’ positions. On the one hand, Mineral County contended that, under the public trust doctrine, the Nevada State Engineer had to reconsider previous allocations to reserve a minimum flow to Walker Lake. On the other hand, invoking the importance of finality, Lyon County and the Walker River Irrigation District argued that water rights settled by decree are “vested” and “conclusive” and cannot be disturbed.

The Ninth Circuit questioned why a middle ground did not exist, citing the California Supreme Court’s decision in Nat’l Audubon Society v. Superior Court, 658 P.2d 709 (1983), which interpreted California’s public trust obligations in the context of the prior appropriation system. As the Ninth Circuit noted:

• . . the California Supreme Court outlined the competing values underlying the public trust doctrine and the doctrine of prior appropriation and, rather than deeming one doctrine supreme, balanced them.

The Ninth Circuit opined that a similar balancing approach appeared to be what Justice Rose described in his concurrence in the Mineral Countydecision.

Ultimately, the court concluded, it could not be certain how the Nevada Supreme Court would answer the question of:

• . . .whether, and to what extent, the public trust doctrine applies to appropriative rights settled under the Walker River Decree.

Noting the “significant implications for Nevada’s water laws,” the court decided that certification to the Nevada Supreme Court was the most appropriate path forward.

Conclusion and Implications

The widespread interest in the Ninth Circuit case is a probable harbinger of what’s to come in the Nevada Supreme Court. Beyond the numerous parties, multiple amici, including the State of California, a coalition of law professors and the Natural Resources Defense Council, weighed in on the public trust issue when it came before the Ninth Circuit. In all likelihood, these and others will submit amicus briefs in the Nevada Supreme Court as well.

As the driest state in the nation, Nevada exemplifies the competing demands on water resources that exist throughout the West. Most, if not all, of the state’s rivers and streams are adjudicated, resulting in decrees that set forth the respective rights in the water source. For that reason, the Nevada Supreme Court’s answer to the certified question of whether and how the state’s public trust obligation might weave into the state’s prior appropriation system, particularly where water rights are already adjudicated, will have far-reaching implications. Many others beyond the litigants in the long-running Walker River litigation will be closely following this case.

(Debbie Leonard)