Hill v. State ( 2017 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
03/10/2017 09:08 AM CST
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Nebraska Supreme Court A dvance Sheets
296 Nebraska R eports
HILL v. STATE
Cite as 296 Neb. 10
Greg Hill of Furnas County et al., appellants, v.
State of Nebraska and Nebraska Department of
Natural R esources, a state agency, appellees.
___ N.W.2d ___
Filed March 10, 2017. Nos. S-16-558, S-16-560.
1. Motions to Dismiss: Appeal and Error. A district court’s grant of a
motion to dismiss is reviewed de novo.
2. Motions to Dismiss: Pleadings: Appeal and Error. When reviewing
an order dismissing a complaint, the appellate court accepts as true
all facts which are well pled and the proper and reasonable inferences
of law and fact which may be drawn therefrom, but not the plaintiff’s
conclusion.
3. Property. A takings analysis begins with an examination of the nature
of the owner’s property interest.
4. Property: Title: Statutes. No compensation is owed in a takings claim
if the State’s affirmative decree simply makes explicit what already
inheres in the title itself, in the restrictions that background principles
of the State’s law of property and nuisance already place upon land
ownership.
5. Irrigation. Rights of irrigation in Nebraska exist only as they have been
created and defined by the law and are therefore limited in their scope
by the language of their creation.
6. Irrigation Districts: Waters. The adjudication of a water right gives to
an irrigation district and its predecessors in interest a vested right to the
use of the waters appropriated, subject to the law at the time the vested
interest was acquired and such reasonable regulations subsequently
adopted by virtue of the police power of the state.
7. Waters: Irrigation. The law gives to every citizen of the state the
right to appropriate for beneficial purposes the unappropriated pub-
lic waters of the state, and it protects him or her in the enjoyment
of this appropriation after his or her right is once vested. An appro-
priator takes this right, however, subject to the rights of all prior and
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HILL v. STATE
Cite as 296 Neb. 10
subsequent appropriators, and he or she cannot infringe upon their
rights and privileges.
8. States: Federal Acts. A compact, having received Congress’ blessing,
counts as federal law.
9. Agriculture: Crops: Irrigation. The inability to withdraw enough
water to grow a crop does not amount to being deprived of all economic
use of the land.
10. Administrative Law: Waters: Natural Resources Districts. Nebraska
has two separate systems for the distribution of its water resources:
One allocates surface water, and the other allocates ground water. The
Department of Natural Resources regulates surface water appropria-
tors, see Neb. Rev. Stat. § 61-201 et seq. (Reissue 2009 & Cum. Supp.
2016), and ground water users are statutorily regulated by the natural
resources districts through the Nebraska Ground Water Management and
Protection Act, see Neb. Rev. Stat. § 46-701 et seq. (Reissue 2009 &
Cum. Supp. 2016).
11. Administrative Law: Waters: Jurisdiction. Neb. Rev. Stat. § 46-715
(Cum. Supp. 2016) limits the Department of Natural Resources’ jurisdic-
tion to surface water.
Appeals from the District Court for Furnas County: James E.
Doyle IV, Judge. Affirmed.
David A. Domina, of Domina Law Group, P.C., L.L.O., for
appellants.
Douglas J. Peterson, Attorney General, Justin D. Lavene,
Emily K. Rose, and Kathleen A. Miller for appellees.
Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,
K elch, and Funke, JJ.
Heavican, C.J.
I. INTRODUCTION
In 2013 and 2014, the Nebraska Department of Natural
Resources (DNR) issued orders and sent closing notices to
holders of surface water permits for natural flow and storage in
the Republican River Basin (Basin). Appropriators Greg Hill,
Brent Coffey, James Uerling, and Warren Schaffert, represent-
ing themselves and a class of farmers who irrigate with water
delivered by the Frenchman-Cambridge Irrigation District
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HILL v. STATE
Cite as 296 Neb. 10
(FCID), subject to Nebraska’s allocation of water under the
Republican River Compact (Compact), filed suit, alleging two
regulatory takings claims against the State of Nebraska and
the DNR.
The district court consolidated the claims for the 2013 and
2014 crops, dismissed both claims, and denied the appropria-
tors’ requests for leave to amend. The appropriators appeal.
We affirm.
We find that the Compact, as federal law, supersedes the
appropriators’ property interests. We further find that the
DNR does not have a duty to regulate ground water; thus, a
failure by the DNR to regulate ground water pumping that
affects the Basin does not give rise to a cause of action for
inverse condemnation.
II. BACKGROUND
Under the Nebraska Ground Water Management and
Protection Act, the DNR is required to conduct an annual fore-
cast to determine whether the State’s projected water supply
from the Basin and projected consumption is sufficient to com-
ply with the Compact.1 The DNR conducted such a forecast
on January 1, 2013, and again on January 1, 2014. The DNR’s
forecasts for both years indicated that the State’s consumption
would exceed its allocation under the Compact. Therefore, in
each of those years, the DNR issued an order referred to as a
“Compact Call” in the Basin and issued closing notices on all
natural flow and storage permits.
The FCID owns water rights for surface water natural flow
within the Basin for irrigation purposes. The appropriators
allege that as a result of the DNR’s orders to close the natu-
ral waterflow and preclude the release of storage water, “‘the
entirety of FCID’s surface water appropriation bypassed [the
appropriators] and was diverted for the public use of sat-
isfying Nebraska’s obligation to the state of Kansas under
the Compact.’”
1
See Neb. Rev. Stat. § 46-715(6) (Cum. Supp. 2016).
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HILL v. STATE
Cite as 296 Neb. 10
The appropriators brought these actions on behalf of them-
selves and a class of water users consisting of “[a]ll FCID
water users in 2013 [and 2014] who did not receive their full
water allocation supply due to the acts, omissions, and takings
of [the State and the DNR] and who suffered damages due
to diminished or eliminated crop production yields of grow-
ing crops.” In their complaints, the appropriators alleged that
each holds prior appropriation rights to surface water and that
in each crop year, there was available surface water within
Nebraska’s allocated share of the Basin’s waters which was not
needed to meet Nebraska’s obligations under the Compact. The
appropriators further alleged that the available water was taken
from the appropriators and given to Kansas, in excess of the
requirements of the Compact, and constituted inverse condem-
nation of their water rights.
1. Basin “Interstate Compact”
Nebraska, the states of Kansas and Colorado, and the
United States of America are parties to the Compact. The
FCID and all class members own surface water appropria-
tions allowing diversion of surface water from the Basin for
beneficial use. The Basin has been the subject of the Compact
since 1943.
In Kansas v. Nebraska,2 the U.S. Supreme Court described
the river:
The Republican River originates in Colorado; crosses
the northwestern corner of Kansas into Nebraska; flows
through much of southwestern Nebraska; and finally cuts
back into northern Kansas. Along with its many tribu-
taries, the river drains a 24,900-square-mile watershed,
called the Republican River Basin.
The U.S. Supreme Court described the Compact as
apportion[ing] among the three States the “virgin water
supply originating in” . . . the . . . Basin. . . . “Virgin
2
Kansas v. Nebraska, ___ U.S. ___, 135 S. Ct. 1042, 1049, 191 L. Ed. 2d 1
(2015).
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water supply,” as used in the Compact, means “the water
supply within the Basin,” in both the River and its tribu-
taries, “undepleted by the activities of man.” Compact
Art. II. The Compact gives each State a set share of
that supply—roughly, 49% to Nebraska, 40% to Kansas,
and 11% to Colorado—for any “beneficial consumptive
use.” Id., Art. IV; see Art. II (defining that term to mean
“that use by which the water supply of the Basin is con-
sumed through the activities of man”). In addition, the
Compact charges the chief water official of each State
with responsibility to jointly administer the agreement.
See id., Art. IX. Pursuant to that provision, the States
created the Republican River Compact Administration
(RRCA). The RRCA’s chief task is to calculate the
Basin’s annual virgin water supply by measuring stream
flow throughout the area, and to determine (retrospec-
tively) whether each State’s use of that water has stayed
within its allocation.3
In 2002, the Compact was modified before the U.S. Supreme
Court via a “Final Settlement Stipulation” (FSS) approved
by the Court.4 Under the FSS, the parties agreed to use
the Compact’s administration accounting procedures and the
ground water model to determine Nebraska’s compliance with
the Compact. Based on those accounting procedures, Nebraska
must use 5-year averaging in normal allocation years and
2-year averaging during “water short” years. Nebraska is obli-
gated by the Compact to limit its consumption of the Basin’s
waters to its annual allotment.
After the FSS was adopted, the Nebraska Legislature enacted
the Nebraska Ground Water Management and Protection Act
(hereinafter Act).5 Under the Act, the DNR and the Basin’s
three natural resources districts “shall jointly develop an
3
Id.
4
Id., 135 S. Ct. at 1050.
5
See Neb. Rev. Stat. § 46-701 et seq. (Reissue 2010 & Cum. Supp. 2016).
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i­ntegrated management plan.”6 And, “[i]n developing an inte-
grated management plan, the effects of existing and potential
new water uses on existing surface water appropriators and
ground water users shall be considered.”7 The Act also requires
that the “ground water and surface water controls proposed for
adoption in the integrated management plan . . . (b) be suf-
ficient to ensure that the state will remain in compliance with
applicable state and federal laws and with any applicable inter-
state water compact or decree . . . .”8
The Act further requires that under the monitoring plans
imposed by the Act, the DNR must consult with the natural
resources districts to ensure compliance with the Compact. In
addition, the DNR shall
forecast on an annual basis the maximum amount of water
that may be available from streamflow for beneficial use
in the short term and long term in order to comply with
the requirement of subdivision (4)(b) of this section [the
Compact]. This forecast shall be made by January 1,
2008, and each January 1 thereafter.9
2. R elevant Sections of
Nebraska Constitution
The appropriators rely on the following sections of the
Nebraska Constitution.
Neb. Const. art. I, § 21: “The property of no person shall
be taken or damaged for public use without just compensa-
tion therefor.”
Neb. Const. art. XV, § 4: “The necessity of water for domes-
tic use and for irrigation purposes in the State of Nebraska is
hereby declared to be a natural want.”
6
§ 46-715(1)(a).
7
§ 46-715(2).
8
§ 46-715(4).
9
§ 46-715(6).
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HILL v. STATE
Cite as 296 Neb. 10
Neb. Const. art. XV, § 5: “The use of the water of every
natural stream within the State of Nebraska is hereby dedi-
cated to the people of the state for beneficial purposes, subject
to the provisions of the following section.”
Neb. Const. art. XV, § 6:
The right to divert unappropriated waters of every
natural stream for beneficial use shall never be denied
except when such denial is demanded by the public
interest. Priority of appropriation shall give the better
right as between those using the water for the same
purpose, but when the waters of any natural stream are
not sufficient for the use of all those desiring to use the
same, those using the water for domestic purposes shall
have preference over those claiming it for any other pur-
pose, and those using the water for agricultural purposes
shall have the preference over those using the same for
manufacturing purposes. Provided, no inferior right to
the use of the waters of this state shall be acquired by a
superior right without just compensation therefor to the
inferior user.
3. Procedural Background
(a) District Court Actions
The appropriators filed their initial action with respect to
the 2013 crop year in July 2014. The operative complaint as
to that crop year was filed on April 10, 2015. On October 30,
2015, the appropriators filed a complaint with respect to the
2014 crop year.
Other than the crop years at issue, for our purposes, both
complaints were identical and alleged that (1) water was taken
from the appropriators which was within Nebraska’s allocation
under the Compact, subject to capture in the Basin’s streams,
not required or used for compliance with the Compact, and not
taken for consumptive beneficial use for any superior or prior
legal use and (2) water was taken from the appropriators as a
result of the DNR’s failure to curtail excessive ground water
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HILL v. STATE
Cite as 296 Neb. 10
pumping which has depleted the Basin’s streams by preventing
water from reaching them. The appropriators claimed they suf-
fered a loss of crop production as a result of the DNR’s actions
and omissions.
On April 30, 2015, the State and the DNR filed a motion
to dismiss the appropriators’ amended complaint regarding the
2013 crop year. On September 28, the court entered an order
denying in part and in part sustaining the State and the DNR’s
motion to dismiss. On October 28, the State and the DNR filed
a motion for clarification and/or a motion for reconsideration
and a motion to extend the time to answer.
(b) May 19, 2016, Order
of Dismissal
A hearing on various outstanding motions was held January
14, 2016. On May 19, the district court issued its consoli-
dated order. As relevant, that order first vacated that portion
of its September 28, 2015, order denying the State and the
DNR’s motion to dismiss, then granted the State and the
DNR’s motions to dismiss both of the appropriators’ causes
of action.
III. ASSIGNMENTS OF ERROR
The appropriators assign, restated and consolidated, that
the trial court erred in holding that (1) the DNR’s streamflow
administration under the Compact was not a taking and that
thus, the regulatory action did not interfere with a legitimate
property interest under Neb. Const. art. I, § 21, and art. XV,
§ 6, and (2) the DNR did not have a duty to regulate ground
water in these cases.
IV. STANDARD OF REVIEW
[1,2] A district court’s grant of a motion to dismiss is
reviewed de novo.10 When reviewing an order dismissing a
10
Walentine, O’Toole v. Midwest Neurosurgery, 285 Neb. 80, 825 N.W.2d
425 (2013).
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complaint, the appellate court accepts as true all facts which
are well pled and the proper and reasonable inferences of law
and fact which may be drawn therefrom, but not the plain-
tiff’s conclusion.11
V. ANALYSIS
1. Whether DNR’s Streamflow A dministration
R esulted in Taking Under Neb. Const.
art. I, § 21, and art. XV, § 6
The appropriators argue that their property rights are supe-
rior to the Compact and that the State’s regulation amounts
to a permanent physical invasion. We reject both of these
assertions.
(a) Nature of Appropriators’
Property Interests
We first address the appropriators’ allegation that their prop-
erty rights are superior to the Compact. During oral argument,
the appropriators maintained that they hold prior appropriation
rights to use the water and that those rights “do not refer to
any Compact” and “are not conditioned on changes or compli-
ance in a Compact that didn’t exist” at the time the water use
permits were issued. We conclude that the appropriators’ rights
to use the water are subject to the Compact and are thus not a
compensable property interest when the right to use is limited
to ensure Nebraska’s compliance under the Compact.
The appropriators’ arguments on appeal are based on the
assumption that the appropriators have compensable property
rights. But because we conclude that the appropriators do not
have such rights, their takings argument must fail.
[3-7] A takings analysis begins with an examination of the
nature of the owner’s property interest.12 No compensation is
owed in a takings claim if the State’s affirmative decree simply
11
DMK Biodiesel v. McCoy, 285 Neb. 974, 830 N.W.2d 490 (2013).
12
See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S. Ct.
2886, 120 L. Ed. 2d 798 (1992).
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makes explicit what already inheres in the title itself, in the
restrictions that background principles of the State’s law of
property and nuisance already place upon land ownership.13
“Rights of irrigation in the state exist only as they have been
created and defined by the law and are therefore limited in
their scope by the language of their creation.”14
The adjudication of the water right gave to the [irrigation
district] and its predecessors in interest a vested right to
the use of the waters appropriated, subject to the law at
the time the vested interest was acquired and such reason-
able regulations subsequently adopted by virtue of the
police power of the state.15
Additionally,
[t]he law gives to every citizen of the state the right . . .
to appropriate for beneficial purposes the unappropriated
public waters of the state, and it protects him in the
enjoyment of this appropriation after his right is once
vested. He takes this right, however, subject to the rights
of all prior and subsequent appropriators, and he cannot
infringe upon their rights and privileges.16
Hinderlider v. La Plata Co.17 is instructive. In that case, the
plaintiff owned a ditch by which it diverted water from the
La Plata River in Colorado for irrigation, but the flow was
altered by the state to comply with an interstate compact. The
State of Colorado shut the headgate of the plaintiff’s ditch
pursuant to the requirements of the La Plata River Compact
entered into by Colorado and New Mexico. The compact
13
See id.
14
In re Complaint of Central Neb. Pub. Power, 270 Neb. 108, 111, 699
N.W.2d 372, 375 (2005).
15
State v. Birdwood Irrigation District, 154 Neb. 52, 55, 46 N.W.2d 884, 887
(1951).
16
Farmers Canal Co. v. Frank, 72 Neb. 136, 158, 100 N.W. 286, 294 (1904).
17
Hinderlider v. La Plata Co., 304 U.S. 92, 58 S. Ct. 803, 82 L. Ed. 1202
(1938).
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provided that each state should receive a definite share of
water, but that when the flow of the river was low, the “use of
the waters may be so rotated between the two States.”18
The Hinderlider Court held that the plaintiff’s “right adju-
dicated by the decree” for water apportionment from the river
was a “property right.”19 But the Court held that “the Colorado
decree could not confer . . . rights in excess of Colorado’s
share of the water of the stream; and its share was only an
equitable portion thereof.”20 Thus, “the apportionment made by
the [c]ompact cannot have taken . . . any vested right.”21 The
Court further determined that “the apportionment is binding
upon the citizens of each State and all water claimants, even
where the State had granted the water rights before it entered
into the compact.”22
Also instructive is Badgley v. City of New York.23 There, the
Second Circuit relied on Hinderlider and held that a state’s
administration of water in order to comply with a water com-
pact precluded damage claims for diminished waterflow. The
court reasoned that awarding damages to riparian right owners
was inappropriate because such “would hobble or possibly even
destroy the effect of Supreme Court decrees or Congressionally
approved interstate water compacts by subjecting those who
rely upon the provisions of the decrees or interstate compacts
to unreasonable damage burdens.”24 Moreover, the result would
be “inherently inconsistent with the supremacy of the Supreme
Court’s decree of equitable apportionment.”25
18
Id., 304 U.S. at 97.
19
Id., 304 U.S. at 102.
20
Id.
21
Id., 304 U.S. at 108.
22
Id., 304 U.S. at 106.
23
Badgley v. City of New York, 606 F.2d 358 (2d Cir. 1979).
24
Id. at 366.
25
Id.
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This court has addressed similar situations in regard to
ground water. In Spear T Ranch v. Knaub,26 this court addressed
a dispute over the depletion of stream water due to ground
water pumping. We held that “[a] right to appropriate surface
water . . . is not an ownership of property. Instead, the water
is viewed as a public want and the appropriation is a right
to use the water.”27 The court held that that the plaintiff had
no action in conversion or trespass, “‘since the plaintiff has
no private property interest in groundwater, at least not prior
to capture.’”28
In Bamford v. Upper Republican Nat. Resources Dist.,29 this
court held that a natural resources district’s cease and desist
order preventing landowners and tenant farmers from with-
drawing ground water from their wells until issuance of addi-
tional allocation did not amount to a taking of their land. The
court reasoned that
ground water, as defined in § 46-657, is owned by the
public, and the only right held by an overlying land-
owner is in the use of the ground water. [Citation omit-
ted.] Furthermore, placing limitations upon withdrawals
of ground water in times of shortage is a proper exercise
of the State’s police power.30
In Keating v. Nebraska Public Power Dist.,31 the Eighth
Circuit applied the legal reasoning set forth in Spear T Ranch
and found that the appellants’ permits to use surface water in
the Niobrara Watershed created property interests that were
limited by the “rights granted by the permit and is subject to
26
Spear T Ranch v. Knaub, 269 Neb. 177, 691 N.W.2d 116 (2005).
27
Id. at 185, 691 N.W.2d at 127.
28
Id.
29
Bamford v. Upper Republican Nat. Resources Dist., 245 Neb. 299, 512
N.W.2d 642 (1994).
30
Id. at 313, 512 N.W.2d at 652 (emphasis supplied).
31
Keating v. Nebraska Public Power Dist., 660 F.3d 1014, 1018 (8th Cir.
2011).
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constraints articulated by the permit.” The court then held that
“when the DNR determines that the watershed no longer has
the capacity to supply all permit holders, appellants no longer
have a legitimate claim of entitlement to use the surface water
and thus do not suffer a deprivation of a property right.”32
The Eighth Circuit reasoned that on the face of the permits,
the holders of permits “‘may be denied the use of water dur-
ing times of scarcity.’”33 Furthermore, “[u]nder Nebraska law,
the DNR is charged with administering the prior appropriation
system, which necessarily requires the DNR to determine the
capacity limits of a given stream and to determine what restric-
tions must be imposed to enforce the appropriation system.”34
Therefore, since “the issuance of Closing Notices does not
impact the property right bestowed by the permit to use the
surface water when there is sufficient capacity, the appellants
are not deprived of that property right.”35
[8] In the current cases, the DNR determined that 2013
and 2014 constituted a water short period and it decreased
allocation according to its predictions. We reject the appro-
priators’ argument that the Compact is an inferior use to the
use rights given to the appropriators under their permits. The
U.S. Supreme Court held that the “Compact, having received
Congress’s blessing, counts as federal law.”36 As federal law,
the allocations set forth under the Compact are the supreme
law in Nebraska and the DNR must ensure Nebraska remains
within its allocation under the Compact. Therefore, the appro-
priators’ right to use water is subject to the superior obligation
of the State to ensure compliance with the Compact.
While Nebraska law treats ground water differently from
stream water, and there is no evidence in the record whether
32
Id.
33
Id.
34
Id.
35
Id.
36
Kansas v. Nebraska, supra note 2, 135 S. Ct. at 1053.
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the permits articulated constraints on their face, Spear T Ranch
is instructive in the current case. This court’s holding in Spear
T Ranch shows the limits to a property right to water appro-
priation under Nebraska law. Because of the limitations of a
“use” property right, certain causes of action are not available
for ground water, “‘at least not prior to capture.’”37 Bamford
similarly concerns ground water, but it is applicable in the cur-
rent case because it indicates that the State has a right to place
restrictions on water usage during water short periods.
The right to use stream water is a “vested right,” but it is
inherently “subject to the law at the time the vested interest
was acquired and such reasonable regulations subsequently
adopted by virtue of the police power of the state.”38 We
find that the DNR’s decisions to decrease allocations in 2013
and 2014 were affirmative decrees which make explicit what
already inheres in the title itself.39 Based on our reasoning in
Bamford, we hold that under the Compact and the applicable
Nebraska statutes mentioned above, placing “limitations upon
withdrawals” during a year which the DNR predicted would
be a water short year is a “proper exercise of the State’s
police power.”40 In this case, there is no suggestion that the
DNR has exercised this power arbitrarily, capriciously, or
unreasonably.
Under the Act and the FSS set forth in Kansas v. Nebraska,41
the DNR must not administer water in “real time” to ensure
that the percentage allotted to Nebraska is met. Rather, the
DNR is obligated only to ensure that Nebraska “will remain
37
See Spear T. Ranch v. Knaub, supra note 26, 269 Neb. at 185, 691 N.W.2d
at 127.
38
State v. Birdwood Irrigation District, supra note 15, 154 Neb. at 55, 46
N.W.2d at 887.
39
See Lucas v. South Carolina Coastal Council, supra note 12.
40
See Bamford v. Upper Republican Nat. Resources Dist., supra note 29,
245 Neb. at 313, 512 N.W.2d at 652.
41
Kansas v. Nebraska, supra note 2.
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in compliance with” the Compact.42 Therefore, we agree with
the district court that the DNR fulfilled its duties under the
Compact and Nebraska statutes, which are within the reason-
able exercise of the State’s police power and are within the
DNR’s jurisdiction over streamflow administration. The DNR
applied the limits under the Compact to the appropriators’ per-
mits, which was a property interest subject to such reasonable
regulations by the State. Therefore, the appropriators have not
been deprived of a compensable property interest due to the
stream water regulations by the DNR.
(b) Whether DNR’s Regulation Amounts
to Permanent Physical Invasion
The appropriators next argue that the DNR’s regulatory
actions amount to a permanent physical invasion of their prop-
erty and that such regulation deprives them of all economi-
cally beneficial use of that property.
We turn first to the appropriators’ contention that the DNR’s
regulatory actions amount to a permanent physical invasion
of their property. The appropriators rely on several cases to
support this contention. One such case is Casitas Mun. Water
Dist. v. U.S.,43 in which the Federal Circuit held that “the
­government-caused diversion” of water away from the plain-
tiff’s land in which the government “directly appropriated
[the plaintiff’s] water for its own use” should be analyzed
as a physical taking. The court further held that “[w]here the
government plays an active role and physically appropriates
property, the per se taking analysis applies.”44
The appropriators cite Garey v. Nebraska Dept. of Nat.
Resources45 to support the proposition that the duty to pay
42
§ 46-715(4)(b).
43
Casitas Mun. Water Dist. v. U.S., 543 F.3d 1276, 1296 (Fed. Cir. 2008).
44
Id. at 1295.
45
Garey v. Nebraska Dept. of Nat. Resources, 277 Neb. 149, 759 N.W.2d
919 (2009).
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just compensation applies to the right to use and derive profits
from the water at issue here. In addition, they cite Western
Fertilizer v. City of Alliance46 and Dishman v. Nebraska Pub.
Power Dist.47 in support of their argument that they are enti-
tled to compensation for the deprivation of their rights to use
water for a beneficial purpose as a result of the Compact.
We find these cases to be inapplicable. Casitas does not
address water appropriation subject to an interstate com-
pact. The holding in Casitas applies when the “government
plays an active role and physically appropriates property.”48
And, as discussed above, in the current case, the DNR did
not appropriate property. Rather, the appropriators’ property
rights to use the water are subject to the DNR’s enforcement
of compliance with the Compact. Therefore, this case, and
the other cases cited by the appropriators on this point, are
not dispositive.
In addition, we note that Garey involves a property tax levy
and the waters of the Basin, but does not address water rights
in terms of a taking. Neither Western Fertilizer nor Dishman
involve damages alleged to have been caused by decreased
water appropriations as a result of a water compact. Therefore,
we find that the DNR’s regulation does not amount to a per-
manent physical invasion.
[9] We turn next to the appropriators’ argument that they
have been deprived of “‘“all economically beneficial use” of
[their] property.’”49 We find that the appropriators have not
alleged facts that show they have been deprived of all econom-
ically beneficial use of their property due to the DNR’s actions.
As we held in Bamford, the inability to “withdraw enough
46
Western Fertilizer v. City of Alliance, 244 Neb. 95, 504 N.W.2d 808
(1993).
47
Dishman v. Nebraska Pub. Power Dist., 240 Neb. 452, 482 N.W.2d 580
(1992).
48
Casitas Mun. Water Dist. v. U.S., supra note 43, 543 F.3d at 1295.
49
Brief for appellants at 18.
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water to grow a corn crop” does not amount to being deprived
of all economic use of the appropriators’ land.50
Further, the appropriators have shown there was a decrease
in production during the 2013 and 2014 growing seasons on
the appropriators’ land, but the data indicates there was still
production on the land. It does not appear, as the appropriators
allege, that the farmland has been converted into permanent
“dryland” because of a “total deprivation of beneficial use of
land for irrigation purposes.”51 We therefore reject the appro-
priators’ contention that the DNR’s regulation of stream water
led to a deprivation of all economically beneficial use of their
property. The appropriators’ first assignment of error is with-
out merit.
2. Whether A lleged Failure of DNR to
Curtail Ground Water Pumping
R esults in Taking
The appropriators argue that because ground water and
surface water are hydraulically connected, the DNR’s failure
to regulate ground water pumping depleted streamflow in the
Basin and amounted to a taking. The appropriators contend
that ground water pumping allows the State to do indirectly
what it is forbidden to do directly. Conversely, the State and
the DNR argue that the DNR has no authority to administer
the Basin’s ground water users for the benefit of surface water
appropriators. The district court agreed that the DNR had no
such authority and that the appropriators had not stated a claim
for inverse condemnation.
[10] This court has consistently held that the DNR has
no authority to regulate ground water. In In re Complaint of
Central Neb. Pub. Power,52 this court held that “the [DNR]
50
Bamford v. Upper Republican Nat. Resources Dist., supra note 29, 245
Neb. at 314, 512 N.W.2d at 652.
51
Brief for appellants at 32.
52
In re Complaint of Central Neb. Pub. Power, supra note 14, 270 Neb. at
117, 699 N.W.2d at 378.
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has no independent authority to regulate ground water users
or administer ground water rights for the benefit of surface
water appropriators.” The court reasoned that “Nebraska has
two separate systems for the distribution of its water resources:
One allocates surface water, and the other allocates ground
water.”53 Furthermore, “[t]he [DNR] regulates surface water
appropriators, see [Neb. Rev. Stat.] § 61-201 et seq. [(Reissue
2009 & Cum. Supp. 2016)], and ground water users are statu-
torily regulated by the natural resources districts through the
. . . Act . . . .”54
The Nebraska Constitution does not address the use of
ground water, and historically, the regulation of ground water
has been governed by the rule of reasonable use.55 The court
further stated:
[T]he Legislature has not developed an appropriation
system that addresses direct conflicts between users of
surface water and ground water that is hydrologically
connected. . . . [T]he lack of an integrated system was
reinforced by the fact that different agencies regulate
ground water and surface water.56
In Spear T Ranch v. Nebraska Dept. of Nat. Resources,57
this court addressed whether a surface water appropriator had
a claim against the DNR for failing to protect surface water
appropriators from hydrologically connected ground water
users. Spear T Ranch, Inc. (Spear T), claimed that the DNR
had “negligently failed to protect its appropriations by con-
trolling the amount of ground water taken from the [creek].”58
This court declined to find that the DNR had a “duty which
53
Id. at 116-17, 699 N.W.2d at 378.
54
Id. at 117, 699 N.W.2d at 378.
55
Id.
56
Id. at 117-18, 699 N.W.2d at 378-79.
57
Spear T Ranch v. Nebraska Dept. of Nat. Resources, 270 Neb. 130, 699
N.W.2d 379 (2005).
58
Id. at 132, 699 N.W.2d at 381.
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would require the [DNR] to resolve conflicts between surface
water appropriators and ground water users.”59 We concluded
that the DNR “has no common-law or statutory duty to
regulate the use of ground water in order to protect Spear T’s
surface water appropriations.”60 Therefore, we held that the
DNR’s “action or inaction did not amount to a taking or dam-
ages as alleged by Spear T. Because Spear T had no property
that was damaged or taken by the [DNR], Spear T could not
assert a cause of action for inverse condemnation.”61
The appropriators cite the Compact which, as the U.S.
Supreme Court explained in Kansas v. Nebraska, requires that
ground water pumping is counted toward water consumption
permitted by the Compact.62 As stated above, the DNR has
jurisdiction over “all matters pertaining to water rights for
irrigation, power, or other useful purposes except as such juris-
diction is specifically limited by statute.”63 Under § 46-715(b),
the DNR regulation must “be sufficient to ensure that the state
will remain in compliance with applicable state and federal
laws and with any applicable interstate water compact or
decree or other formal state contract or agreement pertaining
to surface water or ground water use or supplies.”64
However, as the State and the DNR argue, § 46-715 indi-
cates that the DNR has jurisdiction over only surface water,
while the natural resources districts have jurisdiction over
ground water. Section 46-715 provides that the DNR and the
natural resources districts “shall jointly develop an integrated
management plan for such river basin, subbasin, or reach.”65
And, “[i]n developing an integrated management plan, the
59
Id. at 136, 379, 699 N.W.2d at 384.
60
Id. at 138, 699 N.W.2d at 385.
61
Id. at 139, 699 N.W.2d at 386.
62
See Kansas v. Nebraska, supra note 2.
63
Neb. Rev. Stat. § 61-206(1) (Reissue 2009).
64
§ 46-715(4)(b).
65
§ 46-715(5)(b).
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effects of existing and potential new water uses on existing
surface water appropriators and ground water users shall be
considered.”66 The “integrated management plan shall include
. . . (c) one or more of the ground water controls authorized
for adoption by natural resources districts pursuant to sec-
tion 46-739; (d) one or more of the surface water controls
authorized for adoption by the department pursuant to section
46-716.”67 Section 46-739 further outlines the authorized con-
trols and procedures for the DNR to manage ground water.
Based on the terms of the FSS and the U.S. Supreme Court’s
opinion in Kansas v. Nebraska, Nebraska must account for
stream flow depletion due to its ground water pumping.68 The
DNR has jurisdiction over “all matters pertaining to water
rights for irrigation, power, or other useful purposes,” but
“such jurisdiction is specifically limited by statute.”69
[11] We find that § 46-715 limits the DNR’s jurisdiction
to surface water. This court’s opinions in Spear T Ranch
v. Nebraska Dept. of Nat. Resources,70 In re Complaint of
Central Neb. Pub. Power,71 and Spear T Ranch v. Knaub72
provide further support that the DNR does not have jurisdic-
tion over ground water due to Nebraska’s “two separate sys-
tems for the distribution of its water resources.”73 Therefore,
while the FSS requires that ground water be accounted for,
this does not grant jurisdiction to the DNR over ground
water. Instead, jurisdiction over ground water remains with
the natural resources districts. We note that § 46-715(2)
66
§ 46-715(2).
67
Id.
68
See Kansas v. Nebraska, supra note 2.
69
§ 61-206(1).
70
Spear T Ranch v. Nebraska Dept. of Nat. Resources, supra note 57.
71
In re Complaint of Central Neb. Pub. Power, supra note 14.
72
Spear T Ranch v. Knaub, supra note 26.
73
See In re Complaint of Central Neb. Pub. Power, supra note 14, 270 Neb.
at 117, 699 N.W.2d at 378.
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requires natural resources districts to include “one or more of
the ground water controls . . . pursuant to section 46-739” in
an integrated management plan and to consider “the effects
of existing and potential new water uses on existing surface
water appropriators and ground water users.” Because the
DNR does not have jurisdiction to regulate ground water, it
does not have the power or duty to regulate ground water.
Therefore, we affirm the district court’s conclusion that “an
alleged failure to exercise such nonexistent power or duty
does not give rise to a cause of action for inverse condemna-
tion.” The appropriators’ second assignment of error is with-
out merit.
VI. CONCLUSION
The district court did not err in dismissing both of the
appropriators’ claims, because (1) the Compact, as federal
law, supersedes the appropriators’ property interests and (2)
the DNR does not have a duty to regulate ground water; thus,
a failure by the DNR to regulate ground water pumping that
affects the Basin does not give rise to a cause of action for
inverse condemnation.
A ffirmed.