Arizona Public Service Co. v. Long
160 Ariz. 429, 773 P.2d 988 (1989)
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Rule of Law:
Municipal sewage effluent is a unique category of water not subject to Arizona's surface or groundwater codes, allowing cities to sell or otherwise dispose of it as they see fit. Downstream users who appropriate discharged effluent cannot compel the city to continue that discharge.
Facts:
- Several Arizona municipalities ('the Cities') collect and treat sewage, the source water for which is a mix of groundwater and diverted surface water from the Salt and Verde Rivers.
- In 1973 and 1981, the Cities contracted to sell this treated sewage effluent to a group of electric utilities ('the Utilities') for use as a cooling agent at the Palo Verde Nuclear Generating Station.
- The nuclear plant is located approximately 50 miles from the Cities' treatment plants, and the Utilities constructed a $290 million pipeline to transport the effluent.
- A Tumbling T Ranches and the Gladdens ('A Tumbling T parties') are downstream agricultural users who have established appropriative rights to the flow of the Gila and Hassayampa Rivers.
- For years prior to the contracts, the Cities discharged their treated effluent into the Salt River, a tributary of the Gila, and this discharged effluent came to constitute most of the water A Tumbling T parties diverted to satisfy their rights.
- Under the new contracts, the effluent would be transported directly to the nuclear plant via pipeline, ceasing the historical discharge into the river that the A Tumbling T parties relied upon.
- John F. Long, a property developer, is also a party challenging the contracts.
Procedural Posture:
- Two separate lawsuits challenging the contracts were filed in the trial court and subsequently consolidated.
- The A Tumbling T parties and the Longs filed motions for summary judgment, asking the court to declare the contracts void.
- The Cities and the Utilities filed cross-motions for summary judgment, asking the court to uphold the contracts.
- The trial court granted summary judgment in favor of the Cities and the Utilities, ruling that the contracts were not void because effluent is not regulated under state surface or groundwater laws.
- The A Tumbling T parties and the Longs (appellants) appealed the trial court's judgment to the appellate court.
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Issue:
Is a municipality, which has historically discharged its treated sewage effluent into a natural stream, legally obligated by Arizona's water codes to continue this discharge for the benefit of downstream appropriators, thereby preventing the municipality from selling the effluent for use elsewhere?
Opinions:
Majority - Howard, Court of Appeals Judge
No. A municipality is not legally obligated by Arizona's water codes to continue discharging its effluent for the benefit of downstream appropriators and is free to sell it for use elsewhere. The court holds that sewage effluent is a unique category of water, distinct from either surface water or groundwater, and is therefore not subject to regulation under the Surface Water Code or the Groundwater Code. Citing the persuasive reasoning of Wyoming Hereford Ranch v. Hammond Packing Company, the court concluded that municipalities must have wide discretion to dispose of what is essentially a 'noxious bi-product' in an economically and environmentally sound manner. While downstream users can appropriate effluent once it is discharged into a natural stream (as 'waste water' under A.R.S. § 45-141(A)), this right is contingent and does not grant them the power to compel the original user to continue the discharge. The court found that the abandonment statutes do not apply, as the Cities did not fail to use their appropriated water; rather, the effluent is the result of that use.
Concurring-in-part-and-dissenting-in-part - Haire, Court of Appeals Judge
No, but the majority's reasoning is flawed and the downstream appropriators may still have a claim. While agreeing that the Cities can sell the effluent, this opinion disagrees that effluent loses its character as surface or groundwater. Instead, the sale of effluent should be considered part of the municipality's 'beneficial use' of its original water right. The dissent's key point is that the majority wrongly dismissed the issue of abandonment. By historically discharging a portion of its appropriated water for over five years, the Cities may have abandoned their right to that non-consumptive portion of their water right. Therefore, the downstream appropriators may have acquired a vested right to the continued flow of that abandoned portion, and the case should be remanded for a factual determination on this issue.
Analysis:
This decision established municipal effluent as a legally distinct and marketable water resource in Arizona, separate from the state's highly regulated surface and groundwater supplies. It grants municipalities significant flexibility in water management, allowing them to treat effluent as a revenue-generating asset rather than a liability requiring disposal. The ruling solidifies the principle that rights to 'waste water' are inherently precarious and cannot prevent the original appropriator from increasing their efficiency or changing their use. By explicitly declining to create a regulatory framework for effluent, the court placed the responsibility on the Arizona legislature to govern this increasingly valuable resource, highlighting a significant gap in the state's comprehensive water law.
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