On September 17, 2020, the Nevada Supreme Court issued an opinion answering two questions posed to it by the United States Court of Appeals for the Ninth Circuit. The questions in Mineral Cty. v. Lyon Cty., 136 Nev. Adv. Op. 58 (2020) concern how the public trust doctrine might affect water rights under the system of prior appropriation. Specifically, the court addressed whether the public trust doctrine would permit the reallocation of water rights that had already been adjudicated and settled under the doctrine of prior appropriation. If yes, the court was also asked to consider whether such a reallocation would constitute a taking under the Nevada Constitution. Ultimately, the Nevada Supreme Court determined that the public trust doctrine would not permit the reallocation of previously settled water rights under the Nevada system.

The Public Trust Doctrine & Prior Appropriation in Nevada

The Public Trust Doctrine

The public trust doctrine traces its origins back to Roman law. At its most basic, the doctrine recognizes the public right to certain natural resources, including running water. Under the doctrine, the sovereign or state is entrusted with the care of these natural resources for the public’s long-term benefit.

In the United States, the public trust doctrine has traditionally been applied to commerce and fishing in navigable waters. The states have held the navigable waters and the beds beneath them in trust for the citizens and ensured that the public’s ability to engage in navigation, commerce, and fishing on those waters was protected. Over the years, the public trust doctrine has expanded so that states may protect other interests along with those traditionally protected. Fish populations, wildlife habitat, and recreation are other interests that states may seek to protect under the public trust doctrine.

The state of Nevada has traditionally recognized the public trust doctrine. In 1970, the Nevada Supreme Court declared that “[w]hen a territory is endowed with statehood one of the many items its sovereignty includes is the grant from the federal government of all navigable bodies of water within the particular territory, whether they be rives, lakes or streams.” State Eng’r v. Cowles Brothers, Inc., 86 Nev. 872, 874 (1970). In 2011, the same court formally adopted the public trust doctrine, noting that the doctrine was rooted in Nevada’s constitution, statutes, and the inherent limitations on the state’s powers. According to the court, “because the state holds such property in trust for the public’s use, the state is simply without power to dispose of public trust property when it is not in the public’s interest.” Lawrence v. Clark Cty., 127 Nev. 390, 400 (2011).

Prior Appropriation

Along with the public trust doctrine, Nevada also utilizes the doctrine of prior appropriation. Prior appropriation is a method of determining water rights. It is often used in western states with arid climates where water is scarce. In Nevada, the system of prior appropriation grants the rights holder an appropriative right that allows the use of a specific quantity of water for a specific beneficial purpose. Under prior appropriation, water rights are granted on a “first-in-time, first-in-right” basis. Therefore, a senior rights holder will have their water needs met before any junior rights holder with water rights in the same body of water.

Water users in prior appropriation states do not have to own land over which water flows to have a right to use the water. Unlike states that use the riparian system, where a user’s rights to water are usually tied to whether they own the land that water is located on, a prior appropriator must put the water to beneficial use in order to hold onto their water rights. What counts as a beneficial use can vary across jurisdictions, but in Nevada includes irrigation, power, municipal supply, beneficial use, mining, livestock watering, and recreation. A water rights holder in a prior appropriation system who stops putting their water to beneficial use is at risk of losing their water rights.

Mineral County v. Lyon County

Underlying the recent decision from the Nevada Supreme Court is a long-running litigation over the water rights in the Walker River Basin. Understanding that litigation is necessary for understanding why the Ninth Circuit sent its questions to the Nevada Supreme Court.

Disputes over water rights in the Walker River Basin have been ongoing since the early 1900s. In 1936, the United States District Court for the District of Nevada issued the Walker River Decree (“the Decree”) which adjudicated the water rights of various claimants under the doctrine of prior appropriation. By adjudicating the water rights through the Decree, the court formerly established the water rights for users in the Walker River Basin. In 1994, Mineral County sought to intervene in the Decree to ensure minimum flows into Walker Lake, noting the decline of the lake and the impact that had on the economy in Mineral County. However, granting Mineral county’s request would require reallocating water rights that had already been adjudicated under the Decree.

After decades of litigation, Mineral County appealed the case to the Ninth Circuit which put two questions of law before the Nevada Supreme Court which had to be answered before the Ninth Circuit could make a final ruling. The first question was whether the public trust doctrine in Nevada would permit reallocating rights already adjudicated and settled under the doctrine of prior appropriation. If yes, the Ninth Circuit then asked whether the reallocation of such adjudicated rights would constitute a taking under the Nevada Constitution that would require payment of just compensation.

Ultimately, the Nevada Supreme Court concluded that the public trust doctrine as implemented through Nevada’s water statutes does not permit the reallocation of water rights already adjudicated and settled under the doctrine of prior appropriation. Because the answer to the first question was no, the court did not reach the second question.

According to the court, the public trust doctrine applies to rights already adjudicated and settled under the doctrine of prior appropriation because Nevada has recognized that the public trust doctrine applies to all waters in the state since the state’s admission to the Union. This means that when the water rights in Walker River Basin were settled, they were settled according to the public trust doctrine for the benefit of the public.

Additionally, the Nevada Supreme Court concluded that Nevada’s comprehensive water statutes are already consistent with the public trust doctrine because they require water allocations to be made according to public interest and beneficial use. Under Nevada state law, beneficial use as been declared a public use, meaning that any water which is used beneficially is necessarily used for the benefit of the public. N.R.S. 533.050. The court concluded that the public trust doctrine did not permit reallocating rights already adjudicated and settled under the system of prior appropriation because the prior appropriation system requires water rights holders to continually use water beneficially or lose those rights, and in Nevada beneficial use is always in the public’s interest. Therefore, there is no need to reallocate water rights under the public trust doctrine because a rights holder who fails to use their rights the public’s interest will lose them.

Because the court concluded that the public trust doctrine could not be used to reallocate already adjudicated water rights, it did not have to consider whether a reallocation of rights would be considered a taking under the Nevada constitution.

Conclusion

Although this decision applies only in Nevada, the issue of how the public trust doctrine interacts with the system of prior appropriation has been of interest among water users and other groups for years. Particularly in western states, where prior appropriation has been the system for allocating water rights for decades, there is uncertainty over how the public trust doctrine will affect water rights as the doctrine gains prominence.

For water users in jurisdictions where the issue has yet to be addressed by the courts or legislature, the Nevada Supreme Court’s decision is an example of how the issue may be interpreted. Any water user in a prior appropriation jurisdiction that has not yet determined how the public trust doctrine could affect previously settled water rights could be affected by this issue going forward.

To read the court’s opinion in Mineral Cty. v. Lyon Cty., click here.

For more National Agricultural Law Center resources on water law, click here and here.