Spear T Ranch, Inc. v. Knaub

Majority - Connolly, J.

Yes, a surface water appropriator may have a common-law claim against a ground water user for interference where the ground water withdrawal has a direct and substantial effect on a hydrologically connected watercourse and unreasonably causes harm. The Supreme Court of Nebraska recognized that despite the hydrological connection between surface and ground water, Nebraska water law has historically maintained two separate, non-integrated systems. The court rejected Spear T's arguments that the statutory prior appropriation rules for surface water should apply to ground water conflicts, reasoning that this approach lacks statutory or case law support, relies on a legal fiction of 'underground streams,' and could lead to unreasonable outcomes by shutting down all hydrologically connected wells. The court also rejected a claim for conversion, explaining that a surface water appropriation grants a right to use water, not an ownership interest in the water itself. Instead, the court adopted the Restatement (Second) of Torts §§ 858 and 850A to govern disputes between users of hydrologically connected surface and ground water. This approach acknowledges the interconnectedness of water resources and provides a flexible framework for balancing the competing interests of users. Specifically, a ground water user is not liable unless their withdrawal 'has a direct and substantial effect upon a watercourse or lake and unreasonably causes harm to a person entitled to the use of its water.' The court emphasized that the determination of 'unreasonable harm' is a fact-specific inquiry guided by the factors outlined in Restatement § 850A. The court further held that the Nebraska Ground Water Management and Protection Act (GWMPA) does not abrogate (eliminate) this common-law claim. It reasoned that the GWMPA contains no express abrogation, its legislative findings indicate preservation of common law for ground water disputes, and it provides administrative rulemaking procedures rather than adjudicative remedies for individual disputes. The court also determined that the doctrine of primary jurisdiction, which would defer to an administrative body, was inappropriate because the case involved pure questions of law and the Natural Resources Districts (NRDs) lack statutory authority to award damages or provide comprehensive remedies, potentially leading to inconsistent outcomes across districts. Lastly, the court concluded that all other well users in the basin were not indispensable parties because a plaintiff is not required to join all joint tortfeasors. While Spear T's complaint alleged a direct and substantial effect on Pumpkin Creek and resulting harm, it did not explicitly state that the appellees 'unreasonably caused' that harm. Therefore, the complaint initially failed to state a claim under the newly adopted Restatement standard, but Spear T should be granted leave to amend its complaint to meet this standard. The district court's dismissal with prejudice was reversed, and the case was remanded for further proceedings.