Property Rights in Water Are Different

Further confirmation that property rights in water really are different — and more limited — than property rights in other resources is provided by the June 16 decision of the California Court of Appeals in the case of Light v. State Water Resources Control Board.   The court rejected a challenge by property owners in the Russian River basin to a state water board regulation that will restrict surface water diversions to protect endangered salmon. The regulation was adopted in response to disastrous strandings of salmon that occurred in April 2008 when large volumes of water were drained from the river and sprayed on vineyards and orchards to prevent frost damage.   The board’s new regulation is designed to protect the salmon by controlling similar future diversions of water.

The court rejected plaintiffs’ argument that the board lacked the authority to implement this new program by curtailing the exercise of riparian and so-called pre-1914 appropriative water rights.  While conceding that the board lacks permitting authority over these types of water rights, the court affirmed that under the “rule of reasonableness” (recognized by the California Constitution since 1928) the board can regulate these water rights to prevent unreasonable use of water: “That the Board cannot require riparian users and pre-1914 appropriators to obtain a permit before making reasonable beneficial use of water does not mean the Board cannot prevent them from making unreasonable use.”

While not a takings case, the court’s opinion indicates very clearly that any takings claim that might be filed based on this new regulation would fail:  “The Lights contend the ‘vested rights’ doctrine prevents the Board from ‘redefining’ an existing beneficial use as unreasonable. The position has been rejected repeatedly. It is now recognized that, since enactment of Article X, Section 2, ‘there can no longer be any property right in the unreasonable use of water.’’

The Court also indicated that the California public trust doctrine would bar plaintiffs or other agricultural operators from claiming that restricting water diversions to prevent harm to salmon could give rise to a valid takings claim.  Quoting the landmark National Audubon case, the court affirmed that the public trust doctrine “prevents any party from acquiring a vested right to appropriate water in a manner harmful to the interests protected by the public trust.”

With the prospect of more severe water shortages in the future due to climate change, the state board order at issue in this case may be a harbinger of things to come.