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District Court judge strikes down state-backed groundwater market for violating "first in time, first in right" rule

Daniel Rothberg
Daniel Rothberg

A District Court judge ruled this week that state officials approved a program to address a longstanding water rights imbalance in Eureka County “contrary to Nevada water laws.” 

Pending an appeal or a stay, the ruling puts the brakes on a closely watched groundwater market in Diamond Valley, where the state has, for decades, allowed irrigators to pump more than twice the amount of water than is sustainable, causing groundwater levels to decline.

A spokesperson for the state engineer, Nevada’s top water regulator, declined to comment on the ruling or whether the state will appeal the decision to the Supreme Court. Jake Tibbitts, the natural resources director for Eureka County, said that the county would decide how to move forward after seeking input from the irrigators involved in crafting the groundwater plan.

“They are going to have to take the lead in providing some direction,” he said.

In a ruling filed April 27 for the Seventh Judicial District, which includes Eureka County, District Judge Gary D. Fairman wrote that the court “has empathy for the plight of the ranchers and farmers in Diamond Valley, given the distressed state of the basin’s aquifer.”

“It is unfortunate that the State Engineer and/or the Nevada Legislature did not vigorously intervene 40 years ago when effects of over appropriation were first readily apparent,” he wrote, concluding the plan was “contrary to Nevada water laws, laws that this court will not change.” 

In 2019, the state engineer approved a groundwater management plan to gradually reduce pumping. The plan established a market-based system whereby rights could be bought and traded as shares. And it had the backing of a majority of irrigators, as required by statute.

Under the plan, each share represented a certain amount of water. Over time, the amount of water represented by the share would decrease. By shrinking the water associated with each share, officials planned, over 35 years, to gradually reduce the significant over-pumping that had come, over four decades, to support the livelihoods of ranchers and farmers in the valley.

State officials and many irrigators saw the plan as preferable to curtailment.

In Western water law, the priority to use water is awarded to those who claimed it first: “First in time, first in right.” Irrigators with the priority are known to have “senior water rights.” Irrigators with a later priority are known to have “junior water rights.” Under a strict application of the law, “junior” users are required to curtail all use before “senior” users lose a single drop of water. 

If “senior” users are not getting their allocation, regulators can cut off — or curtail — those with a lower priority until the issue is resolved. But curtailment can come at a high cost, and it’s a tool that regulators try to use only after exhausting other potential solutions. Local officials have long warned that curtailment in Diamond Valley would cripple hay farming and ranching operations.

And in Diamond Valley, the difference between “junior” and “senior” can be a matter of days.

“The distinction in Diamond Valley is very arbitrary,” said Debbie Leonard, a lawyer representing local irrigators organized through the Diamond Natural Resources Protection and Conservation Association. “This is the exact type of situation that the Legislature wanted to [address].”

The plan is now in its second year, and Tibbitts said irrigators have invested thousands of dollars in improvements to continue their operations with less water over the long term.

“A lot of investment has gone in to push the limits of what we can do,” he said.

But the first-of-its-kind plan decreased the water available for almost all irrigators, regardless of their priority. Under the plan, those with senior rights would receive more shares, but they would still see their overall entitlements cut.

That did not sit well with several irrigators with senior rights. They argued that the “first in time, first in right” doctrine, embedded in Nevada water law, protected their entitlements from being reduced. In February 2019, they appealed the state’s order approving the plan and asked the court to overturn it.

The state had argued that the formula awarding more shares to irrigators with senior rights satisfied the “first in time, first in right” requirements in Nevada water law. The state had also argued that the Legislature had given irrigators broad leeway to create groundwater plans for a basin that had been deemed “Critical Management Area” under a statute passed in 2011. 

But the judge disagreed. 

“The community based solution approved by the State Engineer allows junior rights’ holders who, by over pumping for more than 40 years have created the water shortage in Diamond Valley, to be able to approve a [plan] that dictates to senior rights’ holders that they can no longer use the full amount of their senior rights,” he wrote in the ruling. “This is unreasonable.”

Without the plan, the judge noted that there were still ways to reduce pumping in the basin. He said litigants offered several alternatives that included funding a water rights purchase program, upgrading to more irrigation systems and a rotating water use schedule. 

“Many of these alternatives were also considered by the Diamond Valley users in developing the [plan] and are recommendations, but not requirements of the plan,” Fairman wrote. 

David Rigdon, an attorney for the appellants, said the ruling was significant. 

“What they were trying to do is write an entire new water law for Diamond Valley,” he said.

The court ruling also tested the breadth of two newer elements of Nevada water law. Diamond Valley was the state’s first Critical Management Area, a designation that requires irrigators in a basin to craft a groundwater plan within 10 years or face curtailment to reduce water use. 

Leonard said the ruling could undermine the 2011 statute. She said the law was meant to create exceptions in some cases. Without senior rights holders sharing in the burden of cuts, she said there are few tools — other than curtailment — to reduce water in a Critical Management Area.

The Legislature intended to provide local communities with flexibility to depart from a strict application of state water law, if the plan was approved by a majority of water users, Leonard added. Leonard did not say whether her client planned to appeal.

Although the ruling could constrain the options available to Diamond Valley irrigators, Tibbitts said opportunities to use less water exist, regardless of whether an appeal is filed. Under state law, the basin has until 2025 to develop a groundwater plan, giving the county breathing room.

“There are some options there,” he said. “It's not a huge sky-is-falling thing at this point."


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