Metropolitan Utilities District v. Merritt Beach Co.
179 Neb. 783, 1966 Neb. LEXIS 662, 140 N.W.2d 626 (1966)
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Rule of Law:
A municipal utility may withdraw ground water, even if largely recharged by an adjacent river, and transport it to another watershed for public use, provided the diversion adheres to the 'American doctrine' of reasonable use and the objectors fail to demonstrate actual injury to their established water rights or property interests.
Facts:
- The Metropolitan Utilities District (M.U.D.) needed an additional 60,000,000 gallons of water per day to serve the city of Omaha and its environs.
- M.U.D. planned to construct approximately 35 wells on 600 acres of land it purchased on the north bank of the Platte River and Cedar Island in Sarpy County, about 5 miles west of the Platte's confluence with the Missouri River.
- The proposed wells would pump groundwater, with expert testimony indicating that 4,000,000 gallons per day would come from underground sources and 56,000,000 gallons per day would be induced from the surface flow of the Platte River.
- The objectors, including Bellevue Rod and Gun Club, Mr. and Mrs. Gerald Merritt, Merritt Brothers Sand and Gravel Company, Merritt Beach Company, and Sarpy County, owned properties or property interests to the east and downstream from M.U.D.'s proposed well field.
- Expert hydrologists testified that the 'cone of influence' (the area where the water table would be lowered by pumping) would not extend to the objectors' properties.
- Experts estimated that the withdrawal of 56,000,000 gallons per day from the Platte River would lower the river's surface level at the objectors' location by no more than 1.1 inches.
Procedural Posture:
- The Metropolitan Utilities District (M.U.D.) applied to the Director of Water Resources of Nebraska for a permit to supplement its water supply.
- Numerous objectors, including Bellevue Rod and Gun Club, Mr. and Mrs. Gerald Merritt, Merritt Brothers Sand and Gravel Company, Merritt Beach Company, and the County of Sarpy, filed objections to M.U.D.'s application.
- After a hearing on the application and objections, the Director of Water Resources granted M.U.D.'s application.
- The objectors (appellants) appealed the Director of Water Resources' order directly to the Nebraska Supreme Court.
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Issue:
Can the Director of Water Resources lawfully grant a permit to a municipal utility to withdraw a large volume of groundwater, largely recharged by a surface river, and transport it to another watershed for public use, despite objections alleging unconstitutionality of the enabling statute, unlawful trans-watershed diversion, and impairment of vested riparian rights, where the objectors fail to demonstrate actual injury to their property interests?
Opinions:
Majority - Carter, J.
Yes, the Director of Water Resources can lawfully grant the permit to M.U.D. The court determined that constitutional challenges to a legislative act, raised for the first time on appeal from an administrative agency, are permissible because administrative agencies lack the judicial authority to rule on constitutionality. However, the objectors failed to demonstrate a sufficient injurious interest to challenge the statute's constitutionality, as expert evidence indicated their properties were outside the 'cone of influence' and the projected 1.1-inch drop in the Platte River would have a negligible effect on their underground water. While Nebraska's water law combines common law riparian rights with an appropriation doctrine, the common law rule for groundwater allowed unlimited withdrawal. The state now follows the 'American doctrine' of reasonable use, which permits the taking of water beyond a watershed if it causes no injury to appropriators or riparian owners, is for a public and beneficial purpose, and aligns with public policy by preventing waste. M.U.D. is a riparian landowner, not directly diverting from the river, and no proven injury to other water users was established. Therefore, the trans-watershed diversion was deemed reasonable, for a public and beneficial purpose, and in the public interest, justifying the Director's decision.
Dissenting - Spencer, J.
No, the Director should not have granted the permit, as the act in question is unconstitutional. Justice Spencer argued that the statute improperly delegates legislative power to the Director of Water Resources by failing to provide adequate criteria or standards to guide decisions. Furthermore, the objectors did demonstrate a sufficient interest to raise constitutional issues, given evidence that a test well lowered a nearby lake by 4 feet and the appropriation could constitute over one-third of the river's flow during low periods, with experts admitting uncertainty about actual effects without observation. The dissent contended that treating the induced river water as 'groundwater' ignores the reality that 56 million gallons per day would come from the Platte River, effectively making it a diversion of the river's subflow. Citing legal authority like Farnham, Waters and Water Rights, Justice Spencer asserted that water drawn from a stream by wells placed too close should be treated as part of the stream itself, and thus subject to rules against diversion, particularly when such diversion impacts downstream users, as in the Osterman case. The dissent also highlighted common law principles that prevent a riparian from drawing off subterranean waters if it draws off water from a defined surface channel, and emphasized that vested riparian rights cannot be abolished without compensation.
Analysis:
This case is a landmark decision in Nebraska water law, balancing traditional riparian rights with the evolving needs of a growing population. It significantly expands the permissible scope of groundwater withdrawal by municipalities, even when such withdrawals substantially rely on induced flow from surface rivers and involve trans-watershed diversions. The ruling underscores the shift towards the 'American doctrine' of reasonable use and prioritizes public beneficial use over strict common law limitations, especially where actual harm to other users cannot be definitively proven. The decision sets a precedent for how constitutional challenges to administrative agency actions can be raised and reviewed, emphasizing that the burden of demonstrating actual injury falls on the objectors.
