Tori Sundheim 1
LL.M. Candidate, J.D., McGeorge School of Law
July 21, 2014
In California Oregon Power Co. v. Beaver Portland Cement Co., the United States Supreme Court addressed whether federal land patents issued to western settlers pursuant to federal land disposition laws such as the Homestead Act also conveyed federal common law riparian rights to water. The Court held that federal land patents did not include riparian water rights as a matter of federal law. Instead, the Court held that by the 1877 Desert Land Act, Congress had severed water resources from the federal public domain lands; as a result, the states were and are free to develop and enforce their own laws addressing water allocation.
Background and Overview
After the western portion of the United States was acquired, the federal government was confronted with allocating water resources in a manner that promoted settlement and cultivation of the land. At the time, the primary water rights system in the U.S. derived from the rainy East, which applied a common law rule called “riparian rights,” under which land with a surface watercourse such as a stream flowing across or bordering that land entitles the landowner to the natural flow of that stream. In a shortage, riparian owners are entitled to a correlative or equitable share of water. Riparian principles did not make as much sense in the West, where much of the land and climate is arid, resulting in more frequent shortages and more need for certainty.
Riparian principles were impractical in the West in part because those principles limited water use to riparian land, yet the arid western lands could not be developed without transmitting water long distances. Consequently, as the West began to develop, settlers created general rules throughout the region — that is, local laws, legal decisions, and customs that recognized a different practice from the common riparian law of the East; this different practice was known as the doctrine of prior appropriation. Prior appropriation allows persons to put water to beneficial use on non-riparian land according to a “first in time, first in right” system, providing certainty in a shortage.
At the same time that the appropriative rights system was developing, however, riparian owners (those who owned land with adjacent water sources) in the West continued to assert their claims to water rights as if the land were located back East. In California Oregon Power, the U.S. Supreme Court was confronted with the question of whether common law riparian rights should be recognized in the West as a matter of federal law.
The Rogue River, a non-navigable body of water within Oregon’s boundaries, formed the boundary between Beaver Portland Cement Co.’s land to the west of the river and California Oregon Power Co.’s land to the east of the river. Beaver Cement operated upstream from Oregon Power and began drilling and blasting operations in its side of the riverbed. The blasting was intended to free the channel in order to put state-recognized appropriative water rights to use, and to secure rock for a dam.
Oregon Power filed an action to enjoin Beaver Cement from continuing these operations, claiming they interfered with Oregon Power’s common law riparian rights. Oregon Power claimed the federally authorized land patent acquired by its predecessor in title carried with it common law riparian rights. Thus, while Beaver Cement claimed appropriative water rights under state law, Oregon Power claimed common law riparian water rights under federal law. To resolve the dispute, the court had to decide which law to apply.
The district court held: (1) the patent carried with it common law riparian rights; but (2) such water rights, as property rights, were subject to the states’ police power. The district court upheld the application of Oregon’s Water Code of 1909 and found in favor of Beaver Cement. Other states like California and Washington had similar problems in the past but dealt with them differently. To resolve these conflicts, the Supreme Court took this issue on appeal.
The Supreme Court described the main issue as whether the land patents issued pursuant to a federal land disposition law, the Homestead Act, carried with them common law riparian water rights. In 1862, Congress enacted the Homestead Act.2 The Homestead Act of 1862 authorized the acquisition of certain federal lands within the states at little cost. In 1885, Oregon Power’s predecessor purchased a land patent from the United States under the 1862 Homestead Act.
On July 26, 1866, Congress enacted a Mining Act authorizing acquisition of lands in the public domain for mining purposes.3 Section 9 of the Act confirmed the validity of the law of prior appropriation, stating “[w]henever, by priority of possession, rights to the use of water … have vested and accrued, and … are recognized and acknowledged by the local customs, laws, and the decisions of courts, the possessors and owners of such vested rights shall be maintained and protected … and the right of way for the construction of ditches and canals … is acknowledged and confirmed.”4 In 1870, this section of the 1866 statute was amended to provide, “[a]ll patents granted, or preemption or homesteads allowed, shall be subject to any vested and accrued water rights, or rights to ditches and reservoirs used in connection with such water rights…”.5 These rights were not limited to those acquired before 1866, but also reach into the future to further the policy of appropriation of nonnavigable waters on the public domain.6
Finally, in 1877, Congress enacted the Desert Land Act.7 The Desert Land Act allowed the entry and reclamation of desert lands within western states, including Oregon. It stated, “[a]ll surplus water over and above such actual appropriation and use, together with the water of all … sources of water supply upon the public lands and not navigable, shall remain and be held free for the appropriation and use of the public for irrigation, mining and manufacturing purposes subject to existing rights.”8
In analyzing these statutes together, the Court found that the federal government, as the owner of the public domain, possessed the power to dispose of land and water separately, and that patents issued under the Homestead Act after the adoption of the Desert Land Act did not include common law riparian rights.9 Reading the “natural meaning” of the Desert Land Act into the land patent, the Court held that grantees take legal title to nonnavigable water consistent with the customs, laws, and judicial decisions of the state in which they are located, declaring that such waters”…are subject to the plenary control of the designated states… with the right to determine to what extent the rule of appropriation or the common-law rule of riparian rights should apply.”10
Applying the rule, the Court found that the Rogue River is non navigable and wholly within the state of Oregon. Moreover, the Court found that Congress, through the land disposition laws, did not “bind or purport to bind the states to any policy,” but instead recognized that the public interests furthered by state and local doctrines should not be impeded.11 Thus, the Court held that Oregon was free to decide whether or not to recognize riparian rights as a matter of state law.
California Oregon Power establishes that by virtue of federal land disposition laws, Congress severed water from the public domain lands. This severance permitted the states to apply their individual customs, laws, and judicial decisions to solve water allocation issues. This is why the law of prior appropriation is encouraged, but not required in the West, and why Western states may choose to either recognize or eliminate riparian water rights.
1California State Bar Licensed; LL.M. Water Resources Candidate 2014, McGeorge School of Law; J.D. 2013, McGeorge School of Law; B.B.A. 2009, Goizueta Business School, Emory University; Founder and Managing Advisor, California Water Law Journal. I would like to thank the wonderful Advisors on the California Water Law Journal and Steven Bloxham for their valuable suggestions and edits. This is the beginning of the Journal’s case law series. The article is meant to be an objective expression of the Court’s findings in the case and does not represent the views of the California Water Law Journal, McGeorge School of Law, UC Davis King Hall School of Law, or any of the clients or firms with which I work.