• Who Owns the Water? Part 2, (Channelized) Surface Water

    What’s your favorite place to sit back and listen to the world? Mine is the porch of an old log cabin up in the Blue Ridge. The greatest thing about that place is that it sits high up over a stream as it drops through a steep gorge–high up, but still close enough to hear the water flowing and falling, constantly, soothingly. That movement of water through our world is absolutely fundamental to life as we know it.  That’s one reason that the sound of a mountain stream or of ocean waves (or in their absence, an urban fountain or garden water feature) is so deeply satisfying to humans. But that incessant movement of water also makes it hard to fit into traditional, naive notions of property rights. In two earlier posts, I discussed some ways in which water, especially groundwater and stormwater,  challenge and extend our understanding of property.  Now let’s consider surface water when it is collected into streams, rivers and lakes, again focusing on the law of North Carolina (which is very similar to the law of most eastern states in the U.S.).  In this entry I’ll refer to water collected into streams, rivers and lakes as “surface water” even though there is a lot more to be said about “diffuse” surface water, aka “stormwater,” but that must await Part 3.

    North Carolina is a riparian state, meaning that anyone who owns land adjoining surface water has the right to make reasonable use of that water. In other words, you can’t separate the right to use water in a stream from the ownership of the land beside the stream. This is different from the law in most of the western United States, where one may acquire rights to use water in a stream from whomever made earlier uses of that water–a system called “prior appropriation.” In the West, the right to use the water can be legally separated from the ownership of land beside the water; not so in North Carolina or, generally, in the eastern states.

    Riparian rights are the closest one gets in North Carolina to “ownership” of flowing surface water. So it’s important to understand the extent and limits of riparian rights.  Their extent and limits today differ from their historical extent.  The concept of riparianism goes way back, at least to the Roman Empire. The Roman Emperor Justinian I produced a codification of  law between 529 and 534 A.D. that spelled out a fundamental principle of riparianism then and, with the European conquest of North America and the importation of English common law, on into colonial Carolina:

    Aqua currit et debet currerer, ut currerer solebat

    or, “water runs, and should run, as it has always run.” In other words, a riparian could make use of water on his property, but could not materially change the quantity, quality or location of a stream channel in making use of that water. Today we call this idea the “natural flow doctrine.” It worked fine for riparians who just needed enough water for household use, plus small numbers of livestock and a garden.

    However, the natural flow doctrine was ill-suited for an Industrial Revolution based initially on water power–the damming of streams to turn water wheels, which necessarily changed flow regimes. So 19th century courts in the Carolinas, as elsewhere in the United States, morphed riparian rights from “natural flow” to “reasonable use,” a vague idea but one well-suited for case-by-case judicial decision making.  The core idea was that a riparian could make changes in the quantity, quality and stream morphology so long as those changes were economically productive, weren’t wasteful, and didn’t cause undue harm to other riparians. I have noted in another post the great legal historical work of Prof. Morton Horwitz in explaining this transformation, and also the fact that North Carolina’s legislature had already made statutory changes to the natural flow doctrine shortly after statehood to deal with drainage problems (aka “diffused surface water” or “stormwater”).

    Legislatures elsewhere in the eastern United States have continued to refine the common law idea of riparianism, so that many knowledgeable commentators now speak of eastern water law as “regulated riparianism.” North Carolina is usually included on the list of regulated riparian states because of the passage of the Water Use Act of 1967, which allows the Environmental Management Commission, a State agency in DENR, to limit water extraction in areas of the State where there is some imbalance between supply and demand. See G.S. 143-215.13. In practice this has only been done to address over-pumping of groundwater, and then only in a fifteen-county area of the central coastal plain, and after a decade of fights over the rule. North Carolina is one of the only states in the United States that does not require a permit for extraction of surface water, no matter how large the withdrawal or the consumptive use, so it’s accurate to rank the state as one of, if not the very least, regulated states for surface water withdrawals. We have “regulated” riparianism in the same way that a guy who straps a folding chair to a couple of pontoons has a bass boat: technically, at best, but not functionally.  This lack of government attention to withdrawals has worked well in times of plentiful water.  It is not a good system, though, for managing scarcity, if and when future droughts occur.

    Outside the capacity use area(s), then, “ownership” of surface water in North Carolina means the right of a riparian to extract a reasonable amount of water for economically productive use, along with a handful of other traditional riparian rights, all subject to regulation by the State. The most important of these additional riparian rights are:

    • access for swimming, boating, and fishing
    • access to the navigable part of a stream, including the right to wharf out if necessary to reach navigable water
    • the right to accretions, which are increases in land caused by deposition of rocks and sediment in the stream channel.

    How reasonable is a given use of water by a riparian, when another riparian claims to be injured by the use? The Romans and their Latin language gave us the word riparian, and also the word “rival,” and it is no coincidence that “rival” sounds like our word “river.” In Latin, a “rivalis”  or rival was one who shared the same stream, a fellow riparian. (Or one who shared the same mistress). In cases between water rivals, it is difficult to predict outcomes in states like North Carolina that rely mainly on the common law. There are many ancient cases that are hard to reconcile with modern economy and science, and there are few judges or lawyers who understand water law. The result is great uncertainty. It’s easy for courts to place undue reliance on the wrong old case or concept.

    For example, in 2011 the North Carolina Court of Appeals decided a major case (L&S Water Power v. Piedmont Triad Rural Water Authority, 712 S.E.2d 146 (N.C. Ct. App. 2011) that pitted the rights of small hydro producers in the Deep River against a regional water authority that built a new reservoir to provide drinking water to the central piedmont area around Greensboro and High Point. The small hydro producers claimed that the dam impaired their ability to generate electricity and that this amounted to a taking of their property. The water authority countered that the State had given it a permit requiring a certain schedule of releases of water from the reservoir, that the downstream effects of this release schedule had been studied and found to be reasonable by the State, and that at times the releases actually augmented, rather than reducing, flows in the river. The court held for the hydro producers, finding that the undammed flows were essentially a property right that was taken on the occasions that flows were reduced upstream. A major link in the court’s chain of reasoning came from cases involving stormwater drainage problems, which cases held that entities (like the water authority) that had eminent domain power did not get the benefit of riparian “reasonable use” doctrine and were essentially strictly liable for any injury to riparian interests. The court viewed the hydropower producers as holding riparian rights, even though the power they generate from the water is not used on their riparian lands.

    I believe the decision in L&S Water Power rested on several mistakes that amount to a failure to understand water law. Its result is to give riparians in North Carolina an argument to own an actual amount of flow in a stream, at least in cases where their rivals are public entities (or others with eminent domain power, perhaps including energy utilities and oil and gas drillers). This turns the water law clock back toward the days of “natural flow” doctrine. Perhaps the result could prove useful to future environmental litigants who oppose water extraction. However it turns out, it doesn’t seem to square with the thrust of most legislation at the State level these days, which is mostly focused on increasing economic production. It does square with a general public and political turn against public sector interests. But water has a way of dissolving people’s normal, naive lines and categories, including “public” versus “private” and including the nature of property itself.

    The concept of navigability is important to understanding riparian rights, not just because access to the navigable part of a stream is one of those rights, but also because navigability is fundamental to the question of where the public’s water rights begin to limit the riparian owner’s rights.  This raises a profound issue–where exactly in the landscape does the “publicness” of water start? The importance and breadth of this question are why the concept of navigability has become so complicated. It may be the most complicated and most often misunderstood concept in N.C. (or even U.S.) water law.

    It starts with the ancient idea that streams are and have always been “highways of commerce.” It evolves into several different ideas of navigability, depending on the purpose behind the question “is this stream navigable” and depending also on whether one applies federal law or state law to answer the question. Navigable by what—log raft? small boat? ocean-going vessel?  Navigable when–during seasonal high flows? year-round? Navigable after or only before removal of obstacles in the channel? Navigable at time of statehood, or before (Indians in canoes) or after?  Does the need to portage a particularly difficult drop defeat navigability?  The different answers to all these questions have been used in different senses of “navigability” in water law.

    For answering legal questions about ownership of water rights, one important sense of navigability is called “navigability for title.” This concerns ownership of the bed of a stream, not the water itself. But ownership of the stream bed is critical to one of the most important ways that humans use flowing surface water, which is to build dams and store the water. Navigability (and the choice of the right test for it) is at the heart of a case pending now in federal court, a case challenging the right of Alcoa to have dams in the Yadkin River without a clear chain of title to the river bottoms.  The fact that in 2015 there are questions worth having a trial over with regard to the legality of dams built almost 100 years ago illustrates the uncertainty surrounding water law in North Carolina: many actions have been taken and investments made in the waters of the state based on custom and usage that lack a strong legal foundation. The Alcoa case is fascinating on many fronts–the briefs and arguments center on the work of historians who try to explain the river’s role in the 1790s when North Carolina became a state. Oddly, though, at this pretrial stage, the judge (guided by the parties) appears to want to apply a test of navigability based on whether boats big enough to carry substantial cargo could navigate the relevant segment of Yadkin River (a federal test), when the State test for navigability centers more on the ability to float log rafts, portaging when necessary.

    The concept of navigability comes up in many and suprising ways. Different senses of navigability have been used to test the limits of the federal government’s regulatory power over water under the Federal Power Act (with an important early precedent involving a dam on the New River just north of the North Carolina/Virginia line); the extent of federal regulatory power over wetlands and ephemeral and intermittent streams (the subject of a forthcoming rule from the Environmental Protection Agency and U.S. Army Corps of Engineers that will attempt to clarify some of the murkiest issues in environmental law over the past thirty years); and, for example, to determine how far inland someone doing work in a river can be required to purchase longshoreman’s insurance.

    One the questions I’ve been asked regularly through the years goes something like this: “we have a nice development featuring a lake; very, you know, high end; a gated community. But these local yahoos keep floating in on boats and fishing on our lake. Sometimes with no shirt on and beer bellies hanging out! Can we fence them out or have them arrested for trespassing?” To which the answer is: unless the lake is spring fed, it has one or more stream inlets, and if those inlets or the stream itself before being dammed were “navigable” then the lake itself is navigable, with public rights to navigate and fish there, so no, you probably can’t legally fence them out. As long as they have legal access to the stream that feeds the lake or to the lake itself (that is, they don’t have to trespass over someone’s land to get their boat into the water), your “ownership” of the lake doesn’t give you the right to exclude the public.

    This is an important way in which water rights differ from rights to land or personal property: a core part of those property rights is the right to exclude other people. Economists add the idea that exclusion shouldn’t be too costly. Economists also add the useful idea of “rivalrous consumption”: for traditional private property, if the owner consumes it, it’s not available for others to consume. Surface water has both “costly exclusion” as it moves around the state, and a certain amount of non-rivalrous consumption: just because I floated my boat on that water, there’s no reduction in your ability to float on the same water (ignoring Heraclitus’ observation, “no one steps twice into the same water”). This makes flowing surface water something of a “public good” (or another finer-grained category of economic good, a “common pool resource”).

    There are special considerations for reservoirs that deserve mention in a discussion of water and property. In sum, with regard to reservoirs:

    • The legal test of water ownership goes back to navigability before the dam was built. If the stream is navigable, under whatever test is appropriate, the public has right to go on that water.
    • The reality is that control of access to the water makes many reservoirs “de facto” privately owned
    • Dam operations are a major real-world factor in water law. To understand water rights on a given stream, you need to know who owns any upstream dams, and how their operations are regulated.

    Through the years, the federal government has often proclaimed that it leaves questions of water allocation to the states. In reality, though, the federal funding that is behind the construction of many of our nation’s most important dams has left federal agencies in control of the operation of the dams. Since a dam operator (for larger dams) has control over when and how much water exits the dam into the stream below, the actions of that operator and the release schedule are intimately tied up in questions of rights to water in the stream. Further, many dam owners (public and private) control the land around the reservoirs behind dams, meaning they also control who can extract water from the reservoir. This ability to exclude others is tantamount to ownership of the stored water itself. So once again, water provides a unique lens for analyzing property rights.

    Property rights are often described as a “bundle of rights,” such as the right to exclude others, the right to consume the thing that is owned, the right to sell it, to subdivide it, and so forth. Water law teaches us that property ownership is better understood not just as a bundle of rights, but also as a set of responsibilities, or a web of relationships between stakeholders. There are

    • riparians, upstream and downstream;
    • rival users of water;
    • the public, which may have the traditional rights of navigation, fishing and commerce that we call “public trust rights”;
    • users of the water away from the stream itself, such as the public water systems on which most Americans depend for drinking and cleaning;
    • users in general who have these conflicting needs for water purity (to drink or produce food and goods from it) and for water as a coolants, solvent and cleanser, to carry away wastes; and
    • dam owners and operators.

    These conflicting interests in water are balanced very differently in different places, as can be seen in the contrast between North Carolina cities that have made their streams an amenity (Wilmington, for example, with Asheville working hard on it) versus cities that are stuck with the remnants of the long era when uses along the water were just industrial (waste removal), leaving  a waterfront that people mostly avoid (Fayetteville, for example).

    When it comes to water disputes and the property rights involved in them, I suggest you forget the “bundle of rights” metaphor. Ask instead:

    What’s the legal relationship between the stakeholders, as defined by courts, legislatures and executive branch agencies?

    The essence of water law practice is giving a reliable, probabilistic answer to that question.

    With water our “ownership” as riparians comes with a dose of responsibility–to downstream users and to the public generally. Where that responsibility starts is a hotly contested matter, as witness the fighting over the soon-to-emerge federal rule that again attempts to define “waters of the United States.”  In part 3 of this series on water ownership, I’ll consider a major aspect of the “responsibility” side: who’s accountable when water gets out of the places where we want it and into places we don’t want it, like other people’s yards and houses?

    For now, it’s time for me to return to the soothing sounds of flowing water by heading back out to the cabin porch.

    Richard Whisnant joined the School of Government (then the Institute of Government) in 1998. Prior to that, he was general counsel with the NC Department of Environment, Health & Natural Resources. He had previously practiced environmental law with Robinson, Bradshaw & Hinson, in Charlotte, North Carolina, and was a clerk for the Hon. Sam J. Ervin III on the US Court of Appeals for the Fourth Circuit. Whisnant earned a BA from the University of North Carolina at Chapel Hill and an MPP and JD from Harvard University.

    4 thoughts on “Who Owns the Water? Part 2, (Channelized) Surface Water”

    • mark therrell says:

      “Who Owns the Water? Part 2, (Channelized) Surface Water”

      Thank you Mr. Whisnant, for a fascinating article.

      As you may be aware, there are many new products coming onto the market for “pico-hydro” power solutions, intended for remote, off-grid residences near rivers, or for grid tied hybrid-solar solutions for residences or small farms along rivers.

      These systems can include very small turbines, (several pounds in weight), that require the diversion of some amount (usually very small amount) of surface water from a river, through a sluice or penstock, then back into the river, to take advantage of the river’s head (or drop of the landscape), to turn the turbine. Yet other systems include in-river turbines, (some floating, some fixed to the river bed or bank), that require little or no modification to the bank or riverbed, that take advantage of the rivers natural flow to produce small but useful amounts electricity.

      In NC rivers, when such systems do not affect the navigability of the water way, reduce or change the natural flow of the river, quality of the water, or affect up or down stream neighbors.. do they fall under the NC riparian “right to make reasonable use of the water”?

      Are there any cases you are aware of that demonstrate a landowner along a navigable river using that river for personal hydro power, or for tying into the grid to produce power (in order to reduce his power bill), where he was prevented from doing so by local, state or federal law?

      Do you know if any federal, state or local permits are generally required to make use of a river in this way by a land owner in NC?

      Do you know any “water-Law” specialists in NC who would be capable of providing assistance to someone like me, who is interested in creating an environmentally friendly source of renewable power in the form of “pico hydro” along a river bordering his property?

      Thank you for the article and for any advice you may have.

      • Richard Whisnant says:

        I’m not aware of a NC case directly on point to your question about pico-hydro, but I believe the Piedmont Triad Regional Water Authority case discussed in this blog entry can (and will) be read by courts to support the idea that small-scale hydro producers are entitled to the “reasonable use” riparian right. Even though power production was not part of the ancient bundle we now call “riparian rights,” the use of water by a riparian owner to generate small amounts of electricity (or other power) for use on the riparian property itself is very close to the original idea of riparianism (making use of small amounts of water for family consumption, livestock watering, small-scale irrigation, etc.). Given the PTRWA hydro owners were generating electricty for off-property sales, and that didn’t bother the court in terms of riparian rights, I doubt that tying into the grid would defeat the riparian rights of pico-hydro producers. I think the main regulatory concern you would face, assuming the stream in question falls under the federal test of navigability for regulatory purposes (the subject of the current debate over the “waters of the US” rule), is ensuring compliance with the U.S. Army Corps of Engineers’ permit requirements for structures and for ditching/draining around streams. There are a series of nationwide permits issued by the USACE with different thresholds and different requirements for pre-construction notice to the Corps. I’d suggest you research NWP (nationwide permits) 17, 51 and 52 to see whether any or all might apply to the technology that interests you. As for water law specialists, there are not as many here as you’d find in states with less precipitation or more regulation, but I am sure that the major law firms with environmental groups as well as the major consulting engineering firms that do work in and around streams all have someone who deals with USACE permits, so I think by asking around you could find someone to give you particularized advice. Good luck and thanks for the interesting comment.

    • Joe Everett says:

      If a navigable impounded body of water along a non-navigable stream is joined by several parcels of land owned by several entities is there any obligation of the using parties to observe any projected property lines. I have recently encountered two situations where the owner of the dam asserts legal claim to the surface of the water over his property. In both cases the owner of the majority of the dam complained about someone floating a boat in water that was in all likelihood over their property. In both cases the person had legally accessed the water from another owner’s shore-frontage.

      • Richard Whisnant says:

        the deciding factor in this kind of case, in NC, is whether the stream was navigable before it was dammed. The test of navigability is a State test, namely, could the stream have been floated by canoes with furs, or rafts of logs, or anything that once was used on rivers as a means of commerce? If so, the water itself was and remains subject to public trust rights, meaning the public can be on the water, anywhere, as long as they get to the water without trespass. If not, the fact that the dam now makes a “navigable” pool doesn’t change the character of the water–its legal use is restricted to riparians (those who own land along the shore). To resolve this kind of case often requires historical research to see what kind of flow was present before the dam went in. Note also that even if the pond is non-navigable and thus privately owned, I do not know whether there is law to support the argument about property lines being extended. There are cases like that in coastal waters, where neighbors might fight over exactly where one can locate and run a pier out to navigable water. But I have not run across such a case on an inland pond, so in a dispute between riparian neighbors on such a pond, I just don’t know if there’s a legal basis to say “this person can only go on this part of the pond, but the neighbor controls that part of the pond.”

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