In the future, landowners are likely to see the value of their property appreciate, or fall, based on three little digits: H2O.
Legal battles around the highly politized issue of water rights often pit agricultural interests against urban growth. And as courts rule on these issues, they reshape the future landscape regarding how water will be shared.
Courts have some ground rules on the subject, most notably the Equitable Apportionment Doctrine. Recently, in Mississippi v. Tennessee, the Supreme Court of the United States extended that doctrine to aquifers, a move setting an important precedent.
In the 2021 decision, the court addressed a case where the state of Mississippi brought legal action against Tennessee for damages tied to the pumping of groundwater by the city of Memphis, from the Middle Claiborne Aquifer. The state initially wanted some $615 million in damages.
Mississippi's position was that without this pumping, which it described as "stealing," the water in the aquifer would have stayed in the state of Mississippi (i.e., "under" the state") for centuries. Aquifers are underground layers of water-bearing permeable rock or other materials that can extend for long distances.
The position was that the water belonged to Mississippi and that Memphis was involved in a tortious taking. Furthermore, the pumping of this water by Memphis (using wells within its own state boundaries) meant Mississippi could only access water in the aquifer by drilling deeper, more expensive wells. Mississippi argued that equitable apportionment, meaning that each of the states had an equal right to use the water, did not apply because this was water under the ground.
The Supreme Court disagreed with Mississippi. The court held that the waters of the aquifer, although underground, were still subject to the judicial remedy of equitable apportionment.
WHAT IS EQUITABLE APPORTIONMENT?
Equitable Apportionment is a doctrine going back to 1907, with the goal of setting out some kind of fair allocation of a shared water resource between states. The idea is that states have equal rights to reasonable use of shared water resources. The fine point on this often becomes how you define "reasonable."
The court has applied the doctrine to interstate rivers and streams and even where pumping of groundwater affected the flow of interstate surface waters. The Mississippi case, however, was the first time the court looked at equitable apportionment's application to interstate aquifers.
All agreed that the city of Memphis' pumping had contributed to a cone of depression in the aquifer extending miles into northern Mississippi. This cone of depression had, or would, reduce groundwater storage and pressure in northern Mississippi. Nevertheless, the court denied the idea that any state has exclusive ownership or control of interstate aquifer waters flowing within its boundaries.
STATE WATER RIGHTS VARY EAST TO WEST
A report from Oklahoma State University noted that in areas where there is plenty of water and low demand, there isn't a lot of controversy when it comes to water rights. But where demand is high, conflict over water can determine success or failure of agricultural enterprises, limit growth and development of cities, and determine profitability of industries.
The distinction between water rights and property ownership is becoming more critical for landowners to understand. Just buying a piece of property doesn't guarantee the water rights come with it. And even where water rights are part of the property sale, those rights may be limited when the area is water-stressed due to drought or other issues.
TWO TYPES OF WATER RIGHTS
Laws vary by state, but in general, most states to the east of the Mississippi River use riparian water rights. These grant water rights to property owners whose land physically touches a river, pond or lake. The right transfers with the land and is valid even if the water is never used.
The other common type of water right, appropriative rights, allocates water based on historical use, not land ownership. These rights are usually tied to seniority, and they can be lost if they aren't used. This system is more common west of the Mississippi River. Some states, like California, use a hybrid of the systems.
Before buying land, or investing in an ag business, it's important today to know what water rights come with the deal and how those rights might be affected in times of drought or supply stress.
To read more about Mississippi v. Tennessee, go here: https://www.supremecourt.gov/….
Editor's Note: Law of the Land is provided for informational purposes only and is not intended as legal advice or legal services. Victoria Myers is an attorney licensed in the state of Alabama and a senior editor with DTN/Progressive Farmer magazine.
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