Somach Synopsis – Mineral County v. Lyon County

This decision impacts how the public trust is viewed specifically in Nevada, but it also provides insights into public trust law in the western U.S. If you are concerned about any reallocation of water for a public trust reason, this case informs efforts to reallocate water.  We track the public trust doctrine application throughout various western states as it evolves. (via Ramsey Kropf, Shareholder)

On September 17, 2020, the Nevada Supreme Court issued a decision on whether Nevada’s public trust doctrine permits reallocation of water rights previously settled under Nevada’s prior appropriation doctrine. The majority found that the public trust doctrine does not permit such reallocation.

Decision Background: Contested Water Rights in Walker River Basin

The litigation arose from contested water rights in the Walker River Basin, which originates in the Sierra Nevada mountains in California and ends at Walker Lake in Mineral County, Nevada. In response to the declining water quality of Walker Lake, Mineral County moved to intervene in ongoing litigation in federal district court over the 1936 Walker River Decree (Decree), which adjudicated rights in the Walker River Basin under the prior appropriation doctrine. Mineral County sought to modify the Decree to ensure minimum flows into Walker Lake under the public trust doctrine.

After Mineral County’s complaint in intervention was dismissed by the district court, it appealed to the Ninth Circuit Court of Appeals, which determined that Mineral County had standing to assert its public trust claim. The public trust claim came before the Nevada Supreme Court as one of two questions certified by the Ninth Circuit, who in reviewing the merits of Mineral County’s claim, asked the state court to define the scope of the public trust doctrine as it applies to Nevada’s system of water rights. Specifically, the Ninth Circuit asked the Nevada Supreme Court to determine whether Mineral County could seek to ensure that minimum flows reached Walker Lake on the theory that the public trust doctrine permits reallocating rights previously settled under the prior appropriation doctrine.

Nevada is a prior appropriation state, and as codified in Nevada’s water statutes, individual water rights are determined by priority of beneficial use.  But as the Nevada Supreme Court noted, Nevada has also embraced public trust principles, recognizing that the state serves as trustee for public resources and, accordingly, public land and all waters of the state must be used in the best interests of the residents of Nevada.  The Court concluded that the public trust doctrine applies to prior appropriated rights, but importantly, that the doctrine has always inhered in the state’s water law.  Specifically, the Court held that Nevada’s existing statutory scheme ensures that the state is fulfilling its public trust duties by charging the State Engineer with approving and rejecting applications for diversion, and requiring the State Engineer to reject any permit applications detrimental to the public interest.

However, because the State Engineer is also expressly prohibited “from carrying out his or her duty ‘in a manner that conflicts with any applicable provision of a decree or order issued by a state or federal court,’” the Court found that “[t]he statutory water scheme in Nevada therefore expressly prohibits reallocating adjudicated water rights that have not been abandoned, forfeited, or otherwise lost pursuant to an express statutory provision.” Moreover, the Court concluded that permitting Mineral County’s request for reallocation of water under the public trust doctrine “would create uncertainties for future development in Nevada . . . .”

Moreover, the Court concluded that permitting Mineral County’s request for reallocation of water under the public trust doctrine “would create uncertainties for future development in Nevada . . . .”

Two dissenting justices argued that while Nevada’s water statutes may share and promote the same core principles as the public trust doctrine, this was not sufficient to justify the majority’s decision to “override the public trust doctrine or render it superfluous.” Noting the highly deferential review of water right decisions by the State Engineer under Nevada’s statutory scheme, the dissent further criticized the majority’s interpretation as eliminating any judicial “remedy or action to be taken to protect from the irreversible depletion of this state’s most precious natural resource.”

The complete docket for Mineral County v. Lyon County, including the Nevada Supreme Court’s decision, is available here.

For additional information on the Nevada Supreme Court’s decision, please contact Michelle Chester at mchester@somachlaw.com.

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