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n:tnu,-~ , .. CHAPTER 1 GROUNDWATER PROPERTY RIGHTS IN NEBRASKA INTRODUCTION This policy Issue study is concerned With a very narrow, bullmportant Issue in groundwater law. namely the speclilcatlon of property fights to the groundwater resource.' Tile nature of a land- owner's property interest In the waler found beneath his land has two major impacts. First. it determines. In large measure. the power of the state 10 regulate or restrict groundwater usage without constitutional impediments. Under some formulations of groundwater property rights virtually any form of regulation would be con- stitutionally suspect. Under alternative form- ulations of groundwater properly rights. con- stitutional barriers to (and protection from) reg- ulation would be virtually nonexistent. Secondly. in those areas where no regulations eXist (most of the state at the time of this writing). the landowner's property right in the groundwater will be the primary factor governing his relation- ship with other users 01 groundwater. For both reasons a clear understanding of the nature and extent 01 private property rights in groundwater is the essential first step toward sound manage- ment of the resource Nebraska indeed is fortunate to be In a POSItion to consider policy alternatives for the specifica' tion of groundwater property rights. In most. if not all. other states the nature of private property rights to water is well settled and some states are seriously constrained by the existence of vested rights. AswHI become apparent during the course of this chapter. pnvate groundwater property rights in Nebraska remain very flexible giving the state an unprecedented opportunity to use. manage. and conserve the resource wisely. Groundwater property rights In Nebraska have slowly evolved beginning with Olson v City of Wahoo2 and culminating with State v Sporhase:?' and the enactment of LB 375 by the 1982 Nebraska Legislature. Throughout this period. groundwater property fights remained highly conjectural. The most recent case. Sporhase. resolved many previously unanswered questions while raiSing many others. The slow development of Nebraska groundwater law largely is explain- ed by the relative abundance of groundwater in the state. Abundant water supplies postpone user conflicts that lead to the formation of judicial precedents. Each of the limited judicial pre- cedents defining groundwater property rights in Nebraska IS discussed below as are LB 375 and other relevant Nebraska statutes. An attempt then is made to pull them together in a way that defines the Nebraska groundwater property right ANALYSIS OF NEBRASKA DECISIONS 1. Olson v. City 01 Wahoo' (1933) Olson. decided in 1933. contains the first pro- nouncement of the Nebraska Supreme Court directly addreSSing groundwater property rights. Plaintiff Olson sued the City of Wahoo alleging that a new city well had lowered the water level In his gravel pit to the point where commercial pumping of sand and gravel had become im- practical. Wahoo argued that any reduction in the water level was the result of extremely dry weather conditions rather than a consequence of the new well. The trial court held thaI, while plaintiff proved that the water level in his pit had been lowered. he failed to prove that the city's pumping caused the decline. The supreme court eventually affIrmed the lower court decision, but not until they had discussed two competing theories of groundwater property rights. Wahoo argued that the court should adopt the English Rule of Absolute Ownership articulated in Acton v. Blundell.S Under the English Rule no proprietary interest in groundwater exists until it is reduced to capture. The rule thus is more properly thought of as a rule of non-ownership rather than a rule of absolute ownerShip. In any 1.1