Daily Development for
Wednesday, August 12, 1998

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

WATERS AND WATER RIGHTS; APPROPRIATION RIGHTS; BENEFICIAL USE: Washington Supreme Court affirms major shift in water policy developers must actually put water to use in subdivisions in order to perfect right "pumps and pipes" capacity is not measure of quantity of water right.

Washington Department of Ecology v. Theodaratus, 957 P.2d 1241 (Wash. 1998)

Most Western states administer water use rights through an elaborate statutory appropriate system, first developed in California as a response to the new demands placed upon water supply by placer mining activities, but spreading through the water poor West from Arizona to Kansas. Under this system, the State owns all underground water, and licenses persons to use the water according the time at which they establish an approved claim for a "beneficial use." The user must initiate the use promptly and continue it at the identified level. Failure to continue a beneficial use at the stated level is a demonstration that there is not really a need for a priority water right at this extraction point, and the water right is lost.

The system has the virtue of predictability and generally simplicity, but it obviously can lead to gross inefficiencies and inequities. Developers in Washington think that the latest interpretation of that state's appropriation statute creates just such a gross inefficiency.

For at least forty years, the Washington Department of Ecology and its predecessors had administered the state's appropriation water rights system by permitting developers to acquire perfected water rights by showing that they had constructed "pipes and pumps" for a stated capacity. Thus, these developers established a priority claim for their future customers buyers of homes within the area served by the water system even if those buyers did not initiate water use for five years, ten years, or more following the issuance of the permit.

Now, however, the Department of Ecology has determined that it will grant permits only to the extent that water actually is drawn down for the approved use. Consequently, if the developer does not sell out the development in very short order, and if the buyers do not promptly initiate water usage, the priority right will be lost for late arising users. The priority will remain for those purchasers initiating their usage in the set time.

The Department of Ecology based its position squarely on the language of the statute, which carries out a basic theory of water appropriation that honors the user and does not reserve rights for those who are not users. Of course, there's the little problem that the Department and its predecessors had ignored that theory for over forty years, giving rise to practices in the development industry that relied upon a different scheme for determining water rights. The developers argued on appeal that they would be unable to get financing to construct water systems if there was no guarantee that a water right would be available to generate the revenues to pay off the system. The court responded simply that these problems ought to be addressed to the legislature, as "the law is the law."

Comment 1: There are appropriate systems throughout the American west, and certainly some of those systems, in not all, require that water users initiate their use as a condition of reception of a permit. Before Washington developers get too exorcized, one hopes that they will study the experience of other states.

Comment 2: Appropriation rights were a crude attempt to establish a system to address the problem arising when there is a distinct lack of a critical natural resource water to serve all competing demands. In the modern age, it's probably more a matter of money than of absolute availability. Deeper wells and longer pipelines will provide water to those who want it at a price. It may be time to rethink the whole water appropriation process, at least as to future permits, and this case may give Washington state the opportunity to do just that.

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