SPORHASE v. NEBRASKA EX REL. DOUGLAS

Transcript: 

ORAL ARGUMENT OF RICHARD A. DUDDEN, ESQ. ON BEHALF OF APPELLANTS

Chief Justice Burger: We will hear arguments first this morning in Sporhase and Moss against Nebraska.

Mr. Dudden, you may proceed whenever you are ready.

Mr. Dudden: Thank you, Your Honor.

Mr. Chief Justice and may it please the Court:

We bring before you this morning a constitutional law question involving the commerce clause.

Nebraska's law prohibits the transportation of water into another state unless that state has reciprocal legislation.

Colorado has no reciprocal legislation.

In 1971 the Nebraska Department of Water Resources issued a well registration number for the well that is in question today.

This registration filing noted on its face that the land in Colorado was to be irrigated.

The well was then used by the Appellants' predecessors to irrigate the agricultural land in Nebraska.

But later on in 1971, the Appellants purchased this land from their predecessors and renewed their intentions to irrigate the Colorado land.

They obtained approval to proceed from the manager of the local water management district.

This approval included the conveyance of water by pipeline from the well located in Nebraska to the Appellants' adjacent land in Colorado.

The well itself is located only a few feet from the Colorado state line.

If you were to look on page 112 of the joint appendix, there is a map that would show you the location of the real estate involved and the proximity of the well to the State of Colorado.

Unidentified Justice: How deep is the well?

Mr. Dudden: The well is approximately 300 feet deep, Your Honor.

Unidentified Justice: How expensive to put it in?

Mr. Dudden: Mr. Justice White, the--

Unidentified Justice: Is that in the record?

Mr. Dudden: --It is in the record, but I can answer that question.

He expended approximately $45,000 for the installation of the underground pipe and the installation of the pivot sprinkler irrigation equipment.

Unidentified Justice: I suppose if he had put it six feet on the other side of line, he'd have had the same problem, I suppose?

Mr. Dudden: Yes, he would, Your Honor, because when you use a pivot sprinkler irrigation system you pipe approximately 1300 feet to the center of the field.

Unidentified Justice: But he would have the same exportation problem.

Mr. Dudden: Into Nebraska?

Unidentified Justice: Yes.

Mr. Dudden: Yes, Your Honor.

Colorado has an absolute prohibition from transporting water into Nebraska.

Unidentified Justice: Do you think Colorado's absolute prohibition is less vulnerable to commerce clause attack than Nebraska's?

Mr. Dudden: No, I do not, Your Honor.

Unidentified Justice: So you don't rely on the exception for reciprocity that Nebraska makes?

Mr. Dudden: No, I do not.

The land upon which the water--

Unidentified Justice: But don't you rely on the fact that Nebraska... with a permit he could do it?

Mr. Dudden: --If the Appellant had a permit in Nebraska--

Unidentified Justice: Yes, but the authorities could give him a permit under Nebraska law.

Mr. Dudden: --No, they could not, because Colorado does not have a reciprocity statute today--

Unidentified Justice: I see.

Mr. Dudden: --to allow water to be transported from Colorado into Nebraska.

That's the crux of the case, Your Honor.

Unidentified Justice: Okay, yes.

Mr. Dudden, may I ask... this, of course, is a commerce clause case, isn't it?

Mr. Dudden: Yes, it is.

Unidentified Justice: I notice that the state argues at pages 22 and 23 of its brief that Congress has enacted any number of statutes... I think they say 37 of them... which expressly operate to exempt regulation, allocation and distribution of water from the application of the interstate clause, leaving it to the individual states.

And I don't see that you've addressed that argument.

Have you?

Mr. Dudden: I think we have, Your Honor.

I haven't in my oral argument.

However, we are relying on the Mining Act, the Desert Land Act, and the Reclamation Act of 1902.

It is our position that none of those acts direct attention to water.

Unidentified Justice: Well, may I ask, have you any section of your brief which addresses that particular argument?

I don't see a reply brief, for example.

Mr. Dudden: No, we do not have that in our brief in chief, Your Honor, and we did not prepare a reply brief, in view of the number of briefs that had been submitted covering the issue.

Unidentified Justice: Well, of course, if Congress... if they were right and Congress has done that, that's the end of this case, isn't it?

Mr. Dudden: It would be.

But Congress has not done that, Your Honor.

Unidentified Justice: But we're going to have to find out for ourselves, are we?

Mr. Dudden: That is correct.

Unidentified Justice: Except that you're going to address it in your oral argument.

Mr. Dudden: Yes, I am.

The land upon which the water is to be used from the Nebraska well is immediately adjacent to and contiguous with the Nebraska land, as you will note on the map.

Only a small gravel road... and it's not a highway... separates these tracts.

Based upon the approval by the district, the Appellant invested a large sum of money, approximately $45,000, to install the underground pipelines and irrigation equipment, and commenced irrigating the 140-acre tract located in Colorado.

In 1976, the Nebraska Department of Water Resources issued a letter to the Appellants ordering them to cease transporting water from Nebraska into Colorado.

Suit was brought by Nebraska against the Appellants in the state court to enjoin them from irrigating the Colorado land from the Nebraska well.

At that point in time the Appellants argued that the law, the Nebraska law, was unconstitutional and was in violation of the commerce clause.

The Nebraska Supreme Court, however, affirmed the state court's injunction and held the law constitutional, including the mandatory reciprocity requirements which were included in the Nebraska statutes.

However, in that opinion Nebraska's Chief Justice Krivosha vigorously dissented on the reciprocity issue.

This appeal followed.

Nebraska held that water is not an article of interstate commerce, and therefore the court concluded that the commerce clause did not apply to the reciprocity requirement.

The question before this Court today is whether water is a subject of commerce clause standards.

We know if this were any other natural resource the Nebraska statute requiring reciprocity would be unconstitutional under the commerce clause.

This Court in the Great Atlantic & Pacific Tea Company case said that a state cannot discriminate or unduly burden interstate commerce and that a mandatory reciprocity clause or requirement is unconstitutional.

The question, then, is whether water is different from all other resources for commerce clause purposes.

Nebraska argues that water is unique and should be exempted from commerce clause standards, and they argued this for three reasons:

First, Nebraska has defined water under its state law as being publicly owned.

We acknowledge that in Nebraska water is publicly owned and that Nebraska is the public trustee of that water.

Unidentified Justice: When does its character change, if it does change, from public to private?

Mr. Dudden: Your Honor, in Nebraska the constitution declares that water is publicly owned by the state and that the state is the trustee of that water for its... for persons, cities, municipalities, corporations, and any other entity.

Unidentified Justice: That's up to a point.

After you've got it in a water glass, what about that?

Mr. Dudden: My understanding or my feeling is, Your Honor, that Nebraska believes that water is publicly owned at all points in time, not when it is converted to use and not when it is converted, for example, to personal property, such as being drawn from a well; that any water in the state, regardless of where it is located, is publicly owned by the state.

Unidentified Justice: Well, you think that nobody can transfer a water right in Nebraska and get paid for it?

Mr. Dudden: No, that is not... we do not have that position, Your Honor.

Unidentified Justice: Well, that isn't the Nebraska law, is it?

Mr. Dudden: No.

The publicly owned philosophy, Justice White, as I understand it, would be acting as a public trustee for persons who desire to withdraw the water and put it to a beneficial use.

Unidentified Justice: Go ahead.

Mr. Dudden: And we acknowledge that public trustee ownership.

And as long as a person, any person, desires to withdraw water in Nebraska, they may do so upon applying for permission.

The Court in the Hughes versus Oklahoma case, this Court, held that a declaration of public ownership, such as has been done in Nebraska, is a mere fiction and makes no difference for commerce clause purposes.

In the Oklahoma case, Oklahoma claimed public ownership of natural minerals much in the same way that Nebraska is now attempting to claim public ownership of water.

Both in Nebraska and Oklahoma, that claimed ownership is regulatory in nature and is not proprietary or commercial.

Since Nebraska is acting as a market regulator and not as a market participant, it is our position that Nebraska cannot discriminate against interstate commerce.

Because Nebraska feels this way, they have presented three arguments.

The second argument is that water is different because Congress by federal act has authorized the western states to restrict interstate transportation of water.

While Congress may enact such legislation, it is our position that it must do so in clear and unmistakable language.

Congress has not acted in clear and unmistakable language with regard to this subject.

Nebraska has relied for its basic references in connection with the federal laws on the Mining Act of 1866, the Desert Land Act of 1877, and the Reclamation Act of 1902, alleging that these acts constitute authorizations for the states to prohibit or restrict the interstate transportation of water.

However, none of these acts contain what this Court has said, an affirmative grant of power to the states to burden interstate commerce.

They have... none of these acts contain that power.

In the Mining Act Congress opened up mineral lands for use and development by citizens and confirmed the vested water rights.

In the Desert Land Act they opened up desert lands for development by citizens and confirmed vested water rights.

Unidentified Justice: Well, didn't the case, the Portland Cement case, in the thirties say that the Desert land Act severed the waters from the land and gave the control of the waters to the states?

Mr. Dudden: Your Honor, I believe that that case and the case of California versus the United States basically concluded that in operating under those acts they must recognize the state water laws.

But they did not say that the states had the power to preclude under interstate commerce.

It was directed to a joining of hands on those acts with the then current state laws.

And in the Reclamation Act of 1902, Congress provided for the sale of public lands, the proceeds of which were to be used to fund the creation of irrigation projects.

Therefore, while we agree that Congress could authorize the states to prohibit water exports, much as they exempted the insurance industry under the McCarran amendment, it is clear that none of the acts cited by Nebraska exempt water from commerce.

Finally, Nebraska argues that water is physically unique.

However, a western water law specialist, Professor Corker, would disagree with that theory.

Professor Corker has written that water, from whatever source, is not economically different from other resources.

He points out that a beneficial exchange of goods is a motivating force in trade and commerce and concludes that this free market motivation should be equally potent when one of the commodities is water and--

Unidentified Justice: Well, isn't that up to the states, though, to a certain extent, to say whether or not a particular natural resource is subject to ordinary commerce within or without the state?

Certainly, if they say it is subject to commerce within the state, they can't say it's not subject to commerce without the state.

But as I understand your description of the Nebraska water law, it's that no one acquires a ownership in water.

It's simply the right to use it subject to the public trust.

Mr. Dudden: --That is correct.

Unidentified Justice: So really, Nebraska has taken a position contrary to the one you attribute to Mr. Corker, hasn't it?

Mr. Dudden: Well, I don't... Nebraska has taken the position that they can preclude the transportation of water across state lines by requiring other states to have reciprocal statutes.

We don't argue that Nebraska should not... that Nebraska does not have the power to control water.

What we're arguing is that they do not have the power to control water to the extent that they can restrict commerce.

Unidentified Justice: Well, what if your client decided that they wanted to sell topsoil and wanted to take all the topsoil off of the 140 acres, or whatever it is that you're talking about, and simply ship it to someone else in another state, and the State of Nebraska says, no, topsoil simply isn't a marketable commodity, we're not going to allow you to ship topsoil anywhere because it's just too bad for the land?

Mr. Dudden: I think it would depend, Justice Rehnquist, on how Nebraska worded their law with regard to the preclusion to transport it across state lines.

In this particular instance, they are requiring the neighboring state to have a reciprocity clause in their law in order to allow that water to be transported.

In other words--

Unidentified Justice: I thought you didn't rely on that?

Mr. Dudden: --In other words, their tests are reasonable use, waste and private welfare for the State of Nebraska.

And then they add, and in addition, you may not transport water into another state unless that state reciprocates with Nebraska.

We're contending that that is one step too far, and that in-state water users should be afforded the same equal treatment as out-state water users under the commerce clause.

Unidentified Justice: I thought you didn't rely on the reciprocity provision.

Mr. Dudden: Well, we are... I'm not sure, Your Honor, how to interpret the word "rely", what you mean by the word "rely".

Unidentified Justice: Well, that that was an important part of your case or, you know, a significant part of your case, that the Nebraska law provided for reciprocity.

Mr. Dudden: Nebraska law requires reciprocity.

Unidentified Justice: Yes.

Mr. Dudden: And without relying on that, without that statute being in or of record in Nebraska, the Appellant in this instance would be eligible for a permit to use water in Colorado.

Unidentified Justice: Well, do you think your case is stronger than if Nebraska had an absolute prohibition against the interstate transportation of water?

Mr. Dudden: I think that an absolute prohibition of the interstate transportation of water and the Nebraska statute are identical today.

Unidentified Justice: So you would be making the same arguments?

Mr. Dudden: Yes, I would.

Unidentified Justice: Do you contend that Colorado's prohibition against shipping out of state, water out of state, is also unconstitutional?

Mr. Dudden: Yes, I do, Your Honor.

Unidentified Justice: Then I suppose it really doesn't... if you were right on that... does Colorado follow the same rule of law that Nebraska does on water rights?

Mr. Dudden: No, their basic foundational law is different in terms of ownership.

Unidentified Justice: Do they treat it just like Oklahoma?

Mr. Dudden: They do not consider themselves to be public trustees of the water.

Unidentified Justice: Is their law substantially the same as Oklahoma's in that earlier case?

Mr. Dudden: Yes.

Unidentified Justice: Or Texas, whichever it was.

Mr. Dudden: Similar, similar... not the Texas law.

No, not the Texas law.

The Texas law is the old English law, which is absolute ownership.

And if you're talking about the Aldus case, Your Honor--

Unidentified Justice: Yes.

Mr. Dudden: --no, Colorado's law is a modified law and is a modified American law.

You have--

Unidentified Justice: In your complaint, you didn't, or did you, expressly attack the constitutionality of the Colorado statute?

Mr. Dudden: --No, we have not attacked the Colorado statute.

Unidentified Justice: If you persuaded the Court that that statute is invalid, then I suppose you would have... then the reciprocity provision of the Colorado statute would have no longer been a bar.

Mr. Dudden: That's correct.

Unidentified Justice: But you--

--But you didn't raise that.

It wasn't the Colorado statute that is interfering with your business.

Mr. Dudden: Was it?

Unidentified Justice: It isn't.

Mr. Dudden: It is not, no.

The Nebraska statute is interfering with the Appellants' rights to water.

Unidentified Justice: Now, tell me again.

Under Nebraska law, can... are water rights transferable between private parties?

Mr. Dudden: Yes, they are, Your Honor.

Unidentified Justice: For money?

Mr. Dudden: For money.

Unidentified Justice: And are they... are they... can they be separated from the land?

Mr. Dudden: Yes, I believe they could be.

However, in most instances, Your Honor, the transfer of water for money is involved in the price of the land.

Unidentified Justice: Exactly, exactly.

Mr. Dudden: The farmer is buying the right to irrigate.

Unidentified Justice: But I suppose... but water rights are adjudicated, aren't they?

Mr. Dudden: Yes, they are.

And Your Honor--

Unidentified Justice: And so, if you're going to buy a piece of land, you get either a title opinion or title insurance with respect to the water rights too, I suppose.

Mr. Dudden: --Generally not.

Generally, it's a very simple regulatory procedure.

A person owning a piece of land with a water registration simply makes a written request to the Nebraska Department of Water Resources and instructs them to transfer it to the next person.

Unidentified Justice: And there's no problem in doing that?

Mr. Dudden: No, none at all, Your Honor.

Unidentified Justice: What if I in Nebraska... what if your client wanted to... wanted to sell his water right to an adjoining landowner?

Mr. Dudden: Today, my client today?

If it were in Colorado--

Unidentified Justice: No, not in Colorado; in Nebraska.

Mr. Dudden: --In Nebraska?

Unidentified Justice: In Nebraska.

You want to separate the land from the water and sell the water right.

Can you do that in Nebraska?

Mr. Dudden: He could do that, Your Honor, but the water registration specifically provides for the water to be used on agricultural land.

They call it overlying agricultural land.

Unidentified Justice: All right.

But you can transfer it to another piece of agricultural land?

Mr. Dudden: Yes, he could.

Unidentified Justice: And in that sense... and he could be paid for it?

Mr. Dudden: Yes, in Nebraska.

Unidentified Justice: In Nebraska.

Now, in that sense it's an article of commerce.

Mr. Dudden: Absolutely, absolutely.

Unidentified Justice: But he cannot... he could not under this law, I take it, sell that water right to somebody in Colorado?

Mr. Dudden: That is correct, Your Honor.

Unidentified Justice: Suppose it's very good water that your client has on his land.

Could he bottle it and sell it over in Omaha and Lincoln?

Mr. Dudden: Nebraska has... the Nebraska Supreme Court has approved the commercial sale of water for drinking purposes the Metropolitan Water District case.

Unidentified Justice: Well, that gives some hint that it's an article of commerce, doesn't it?

Mr. Dudden: I felt that it did, Your Honor, yes.

That's our position.

Unidentified Justice: Is there a limitation on the areas within Nebraska to which you can transfer agricultural water?

Is there a limitation to the particular aquifer or valley?

Mr. Dudden: The statute itself does not provide for a limitation.

There is a lot of activity with regard to inter-transportation between basins at the present time, Your Honor.

Unidentified Justice: Well, have the courts or the administrative agencies taken any position?

Mr. Dudden: They are taking positions.

They are just starting to take positions.

Unidentified Justice: I thought Nebraska law forbade on its face... where did I read that?

the inter-basin transfer of water except where a municipality is involved?

Mr. Dudden: That is correct, that is correct.

Unidentified Justice: So it's just a flat ban on transferring water from one watershed to another?

Mr. Dudden: From one watershed to another, yes.

But that--

Unidentified Justice: So you can't take it out of the one basin?

Mr. Dudden: --Yes, that's correct.

Unidentified Justice: Even... nobody can permit that, I take it?

Mr. Dudden: Not at the present times, no.

Unidentified Justice: Counsel, the State of Nebraska has also argued that we should look at the interstate compacts that have been approved by Congress--

Mr. Dudden: Yes.

Unidentified Justice: --as an indicator that Congress believes that states are free to allocate and direct the transfer of water within their boundaries.

Mr. Dudden: Yes, they do, Justice O'Connor.

Interstate compacts, however, are for purposes of states agreeing to use water from one state and move it into another.

We have just such an impact... just such a compact, called the Platte River Compact, in this area, where the State of Nebraska and the State of Colorado joined together and agreed to allow water to be withdrawn from the Platte River in Colorado and transported by canal into Nebraska.

This was approved by Congress.

It's our position that these compacts do not in any case, in any specific instance, represent a specific, clear language by the Congress to remove water from interstate commerce.

They simply are agreements or contracts between the states to help the states transport water back and forth among themselves, actually contrary to our position, because here Nebraska is attempting to keep water from being transported from Colorado into Nebraska, when the compacts generally are to allow water to go from one state to another by state agreement.

It is our position that the purpose of the commerce clause is to encourage a national market for all resources and to encourage maximum economic efficiency in the use of these resources.

The mandatory reciprocity clause in the Nebraska law is hostile to this area and idea.

Reciprocity is not necessary to remove other states' embargoes, because the commerce clause by itself creates the necessary reciprocity.

Furthermore, our Chief Justice has said, in the opinion of the Sporhase case that reciprocity is unnecessary to carry out Nebraska's conservation goals.

The reciprocity of the Nebraska statute has no connection to the need or availability of water, and it is clear that the remaining part of Nebraska's law would be adequate without the reciprocity provisions, as it already provides for reasonable uses, conservation and concern for public welfare.

Unidentified Justice: Now, your clients' well is in a critical ground water basin?

Mr. Dudden: Yes, it is.

Unidentified Justice: But nevertheless, you were given permission to dig the well and withdraw water?

Mr. Dudden: That is correct, Your Honor.

I would like to point out that the well was not in a critical township or critical area at the time that it was approved and drilled.

Unidentified Justice: I see.

Mr. Dudden: And that the withdrawal from that well has always been used in all calculations by the district and by the state in connection with withdrawals of water in that area.

To allow our client to continue to use this well for the purpose which he is doing today would make no difference on the use or public welfare off the State of Nebraska.

It's our position that we don't need to have discrimination against interstate commerce or interstate uses of water and there is no justification for it.

What our Appellant asks of this Court is that the commerce clause is exactly what the commerce clause provides, and that would be that in-state water users and out of state water users be afforded equal treatment.

Unidentified Justice: Do you think... do you think that if, say, someone decided that it'd be a good idea to buy all the water they could in Colorado from private owners and use it to transport coal in a slurry pipeline from there down to New Orleans, and that everybody agreed that if the project were carried out it would dry up all of the eastern slope, do you think Colorado would have any... I take it you would say that it could not keep that water from being sold out of state?

Mr. Dudden: Your Honor, there are... I don't think that's a problem, and the reason I don't is--

Unidentified Justice: Well, I didn't... it may not be a problem.

But what if it was?

Mr. Dudden: --That would be a serious problem if people were able to--

Unidentified Justice: Well, what about the state power?

Mr. Dudden: --I don't believe the state has the power to do that.

Unidentified Justice: So it would have to leave it to Congress?

Mr. Dudden: Yes.

Unidentified Justice: Even in an emergency, the state would not have the power?

Mr. Dudden: I find it difficult to conceive of an emergency, Chief Justice Burger, that would warrant that use of--

Unidentified Justice: Well, Mr. Dudden, what about as a conservation measure, the state... notwithstanding the water may be subject to interstate commerce?

Mr. Dudden: --As a conservation matter?

Unidentified Justice: Yes.

Does the state have that authority even as to--

Mr. Dudden: Yes.

The states today have the--

Unidentified Justice: --Well, in the instance that my brother White put to you, would that not be an appropriate and constitutional conservation measure?

Mr. Dudden: --I think each situation, of course, would have to be very carefully reviewed on its own independent facts.

Unidentified Justice: Well, you mean you could conserve, conservation in the sense you conserve it for use inside the state, is that it?

Mr. Dudden: Well, I think that each state has--

Unidentified Justice: I thought you were saying that you couldn't possibly keep water at home like that?

Mr. Dudden: --Well, I think that each state has current law that allows them to review each individual application and determine whether or not those uses proposed meet the current statutes.

We don't need a prohibition of transporting water from one state to another to protect the states today and to protect their water and the citizens' water.

Unidentified Justice: Do you think Congress could by a statute preempt Nebraska's law?

Mr. Dudden: I think Congress by statute could specifically say in clear language that each state has the right to--

Unidentified Justice: No, I want to run it... I'm asking you to run it the other way, that Congress could remove any barriers that state law might erect to the transportation of water in interstate commerce.

Mr. Dudden: --No, I do not.

Unidentified Justice: You do not what?

You don't Congress has that power?

Mr. Dudden: I do not think Congress has that power.

But I believe Congress has the power to allow the states to control water themselves and take water out of interstate commerce.

Unidentified Justice: If you think water is an article of interstate commerce, which it is in a lot of places, you mean Congress couldn't insist... remove state barriers to interstate trade in water?

Mr. Dudden: As long as their statutes do not interfere with the interstate clause of the United States Constitution, they might be able to do that.

Unidentified Justice: You mean an act of Congress would interfere with the commerce clause?

Mr. Dudden: It could not.

But they could give the power to the states to remove water from interstate commerce.

Unidentified Justice: The commerce clause is basically just a grant of power to Congress.

Mr. Dudden: That's correct.

Unidentified Justice: I'm at a loss to see how an act of Congress pursuant to the commerce clause could interfere with the commerce clause.

Well, go ahead.

Mr. Dudden: Your Honors, that concludes my argument.

Thank you very much.

Chief Justice Burger: Very well.

Mr. Anderson?

ORAL ARGUMENT OF GEORGE RODERIC ANDERSON, ESQ. ON BEHALF OF APPELLEE

Mr. Anderson: Thank you, Your Honor.

Mr. Chief Justice, may it please the Court:

Before we go too far in the argument, I think counsel both agree on what issue we're discussing today, whether the commerce clause applies to natural... to water as a natural resource.

I think before we get too far into that, that I would like to, in light of Appellants' remarks, address specifically some areas of Nebraska law that have been discussed in your questioning of Appellant here today.

I would like to clear some things up.

In answer to some questions directed by Justice White, Appellant was saying that... Appellants' counsel was saying that water rights may be transferred and severed from the land in the state of Nebraska.

Now, as we read the Sporhase decision in the Nebraska Supreme Court, which is... which is printed in the appendix, and I'm reading from page 119 of that appendix... our court spoke upon its feelings on that, and it said:

"Neither the courts nor the legislature of Nebraska have considered Nebraska ground water as an article of commerce."

"Free transfer and exchange of ground water in a market setting have never been permitted in this state, since the water itself is publicly owned."

"The public, through legislative action, may grant to private persons the right to the use of public-owned waters for private purposes."

--irrigation or drinking; that's my parens...

"but as the Olson opinion demonstrates with its emphasis on sharing in times of shortage, the public may limit or deny the right of private parties to freely use the water when it determines that the welfare of the state and its citizens is at stake."

"Even where it appears that water itself is being marketed, as in municipal water supply arrangements, it is the value of the cost of distributing the water that is the basis of rate structure and not the value of the water itself."

Appellant recognizes in its brief at page 13 that water used for irrigation, agricultural irrigation, must be applied to the overlying land.

That's the overlying land of the ground water from which it is pumped.

That means under Nebraska law, as it is understood by the Attorney General of that state and by those who apply those statutes in Nebraska, that water may not be transferred.

It may not be severed from the land.

It is not and cannot be sold.

Unidentified Justice: Now, I was under the impression that your friend, in response to a question, said that a farmer out in rural areas of Nebraska who had especially good water could bottle it and send it into Omaha and sell it.

Do you agree with that?

I thought he said that the Supreme Court had--

Mr. Anderson: There is no doubt... that specific question has never arisen, Your Honor, and there is no doubt that water is... can be used for drinking, and that there is no doubt that water can be used for consumption in agriculture, in any sort of function.

However, water itself cannot be severed from the land.

It is not... a water right is not a separate title.

Unidentified Justice: --Well, after you've got it in quart or gallon bottles in a supermarket in Omaha, is it an article of commerce, or is just the bottle an article in commerce?

Mr. Anderson: Your Honor, if someone is selling water in Nebraska, which I do not know about, they... it would be an article of commerce at that point, just, Your Honor, as water can be an article of commerce in Texas, I suppose, once it's possessed.

But water, agricultural water, irrigation water, is not subject to private ownership.

Unidentified Justice: Now, it's your position, counsel, that the owner of farmland could not sell water rights to be used on an adjacent parcel of farmland?

Mr. Anderson: That's correct, Your Honor, under Nebraska law.

Unidentified Justice: Even in the same basin?

Mr. Anderson: Yes, Your Honor.

Yes, Your Honor.

Unidentified Justice: Are you speaking not only of ground water, but of irrigation water generally?

Mr. Anderson: Irrigation water generally... now, irrigation water, there is... storage water is... you're paying for the transfer of the water, that's right.

Unidentified Justice: Well, I'm asking--

Mr. Anderson: I'm speaking of--

Unidentified Justice: --You do irrigate some farmland in the North Platte Valley, don't you?

Mr. Anderson: --That's correct.

Unidentified Justice: And the source of the water is the river.

Mr. Anderson: That's correct.

Unidentified Justice: And it's stored in a reservoir.

Mr. Anderson: That's correct.

Unidentified Justice: And taken out?

Mr. Anderson: That's correct.

Unidentified Justice: And you have water rights and farmers have individual water rights.

Mr. Anderson: Farmers have individual water rights for the natural flow of that water, yes, Your Honor.

Unidentified Justice: Well, they're entitled to use it on their land.

Mr. Anderson: That's correct, and then cast it off.

Unidentified Justice: Can that water be sold off the land?

Can it be transferred?

Mr. Anderson: No, Your Honor.

Unidentified Justice: Those waters, what do they call them?

Rights, shares, or what?

Mr. Anderson: A right of appropriation, Your Honor.

And that right of appropriation cannot be transferred from that land.

If you do not use that appropriation on that land for three consecutive years, that appropriation is subject to cancellation.

It ceases.

It cannot be used to transfer to some other land.

It cannot be used to transfer to your brother-in-law or to sell to someone else for a profit, for any money.

Unidentified Justice: Well, you certainly get some money for it when you sell your land.

Mr. Anderson: Your Honor, it is part of the land.

It carries no value separate from the land.

The land will... the value of the land will vary depending upon such things as the--

Unidentified Justice: The value of the land will vary on whether it's got some water rights attached to it.

Mr. Anderson: --Just as it will vary, Your Honor... that's correct.

Well--

Unidentified Justice: Not all land does.

Mr. Anderson: --No.

But Your Honor, it'll vary depending on whether you have an aquifer below it and whether you have you... whether it can grow the crop that you want, whether it's adjacent to a city or metropolitan area, what the type of soil is, whether it's rolling or non-rolling.

None of those can be severed from the land, just as water cannot.

Unidentified Justice: When you say that ground water has to be used on the overlying land, well, you're certainly talking about a bigger piece of land than the land that surrounds the pipe within six feet.

I suppose you're talking about the owner can use the water on all the land he owns.

Mr. Anderson: Well, that's not necessarily so, Your Honor.

Unidentified Justice: Well, adjacent to the--

Mr. Anderson: Well, that's true.

I don't know of any particular case which has defined--

Unidentified Justice: --Well, let's take this case.

Let's take this case.

There's no suggestion that this particular gentleman who wants to export this water could use the water, his ground water, on all the land he owns in Nebraska, in this particular piece?

Mr. Anderson: --He owns--

Unidentified Justice: How many acres does he own in Nebraska?

Mr. Anderson: --I can't tell you exactly.

He owns some contiguous land, Your Honor, and I don't believe that there is any contest, there has been no contest, of his--

Unidentified Justice: But some of the land that he owns in Colorado... the land he owns in Colorado is just as close to the well as the land he owns in Nebraska.

Mr. Anderson: --Oh, closer than some, some land is closer, that's correct.

But Your Honor, we must recognize that water is--

Unidentified Justice: So all you're saying... but certainly some of the land in Colorado, anyway, would be called overlying.

Mr. Anderson: --I don't agree with that, Your Honor.

Unidentified Justice: Well, I wouldn't think you would.

Mr. Anderson: You can't say it's overlying when you have a state boundary between them.

You can't... this is a recognized boundary between tracts of land.

It is a legally recognized boundary, and water, Your Honor--

Unidentified Justice: You say, here's a piece of land that's within 100 feet of the well.

The only thing is it's in Colorado.

And you say that isn't overlying, although there's a part of that land in Nebraska that is 2,000 feet from the well and you would call it overlying?

Mr. Anderson: --Well, I didn't say that 2,000 feet from the well would necessarily be overlying, Your Honor.

I would say that water is treated as being allocated to states, and states are the unit by which water is apportioned.

This Court has apportioned water to states in their equitable apportionment decrees and judgments.

The various states and Congress have negotiated and approved interstate compacts which have apportioned and allocated water between the states.

Both of these approaches have conceived of water as being treated, as being subject to the complete control and management and regulation by the states of this water.

Unidentified Justice: Counsel, what if Nebraska just repealed its reciprocity provision and issued a permit to this gentleman to transfer the water to Colorado.

Would that violate any interstate compact?

Mr. Anderson: That would not, Your Honor.

The question really arises because the question--

Unidentified Justice: Well then, of what relevance is the interstate compact that you're talking about?

Mr. Anderson: --The interstate compact is of two relevances, Your Honor.

One is that it shows that the state is treated as the unit which manages the water, number one, and that a state boundary has a meaning in water law, as in law over water as a natural resource.

Number two, it shows Congress' deference, or exemption, if you will, to the states to the management of water resources.

Water is different than other natural resources.

Unidentified Justice: Mr. Anderson, may I go back to the law of Nebraska with respect to the problem?

Confining ourselves to the law within the state of Nebraska to adjacent farms, and there's a well on one and not a well on the other, can the one on the... how does the second farm get water?

What kind of legal arrangement may it make to get water to its land from the neighboring farm which has a well?

Mr. Anderson: In Nebraska, you mean?

Unidentified Justice: Yes.

Just Nebraska, just Nebraska.

I just want to get the adjacent parcel problem sort of outlined.

Mr. Anderson: We have... if I understand your question, we have two farms.

One--

Unidentified Justice: One has a well and one does not.

The one without a well wants to get water from his neighbor.

Can he do it legally and get a legally binding agreement that will entitle him to get such water?

Mr. Anderson: --No, Your Honor, he cannot.

He must drill his own well or he must appropriate water from a water source, a stream, if he has access to that.

Or if he is on an irrigation canal--

Unidentified Justice: He cannot get any legal protection for his rights to obtain water from a neighbor who happens to have a well?

Mr. Anderson: --Your Honor, he doesn't--

Unidentified Justice: There's no provision in Nebraska law for that problem?

Mr. Anderson: --Your Honor, we have such a thing as irrigation districts, and people who don't have water underlying their land... we have two types of water, Your Honor, underground water, what we call ground water--

Unidentified Justice: That's what I'm talking about.

I want to get away from the Platte River problem.

Mr. Anderson: --Surface water.

He would then, if he has no source of underground water, if there's no sufficient aquifer there... and there is land like that... we have a predominant situation--

Unidentified Justice: His neighbor does have, is my hypothesis.

Is there any way in which he can get a legally binding commitment from his neighbor to get the water he needs?

Mr. Anderson: --No.

Unidentified Justice: The answer is no.

Mr. Anderson: No, Your Honor, not ground water.

His remedy is surface water.

And that's... this is Nebraska water law, that a person... that the overlying land owner--

Unidentified Justice: Well, if I could just add one, there is no surface water in that area.

Mr. Anderson: --Pardon me?

Unidentified Justice: If I add to Mr. Justice Stevens' question--

Mr. Anderson: Okay.

Unidentified Justice: --there is no surface water in the area.

Mr. Anderson: Then, Your Honor, there's such a thing in Nebraska--

Unidentified Justice: It's dry land.

It's dry land, then?

Mr. Anderson: --It's dry land farming, just as the Appellant is doing with the land in this case.

Unidentified Justice: Does he get the same answer if the land on which the well was located purchased the adjacent property from his neighbor?

Or leased it?

Mr. Anderson: If he owned... if one man owned two tracts of land, then there would be some leeway to pumping the water.

I suppose it would depend how close it is, Your Honor.

Unidentified Justice: Suppose they're adjacent.

Mr. Anderson: Well, they're adjacent, but I don't know what sort of distances we're talking about.

If we're talking about two miles, if we've got one farm in one section and one farm in another, probably not, Your Honor, to bridge sections.

You know, you're familiar with section lines, or with townships--

Unidentified Justice: So you would give the same status to section lines that you do to state boundaries?

Mr. Anderson: --Not necessarily, Your Honor.

State boundaries have a much more important legal importance, because states are the units by which water is managed.

Unidentified Justice: Well, I thought maybe you were going to say that the rule would be that if the adjoining land was outside the reaches of the aquifer you couldn't use it on that land.

Mr. Anderson: Aquifers, Your Honor, are not of fixed boundaries.

Unidentified Justice: Well, I know.

But usually if the land has got potential value somebody has tried to drill a well on it, and they've found out that it's too deep or they just don't find water.

And so they would like to transfer water from somewhere else.

Mr. Anderson: Transfer of water is not permitted, of ground water, Your Honor, in Nebraska.

And we have a lot of dry land farming in Nebraska.

I guess that's what--

Unidentified Justice: Here's a piece of dry land and he leases it to the fellow who has drilled a well and found water.

Can the fellow who has the well use the water on the adjoining piece of land?

Mr. Anderson: --Your Honor, water is attached to the land.

If the land is merged some way, then... if someone wants to acquire water, they can acquire the land and they acquire the water.

But the water cannot then be transferred to some far-away land.

It cannot be used for non-agricultural purposes.

In this case--

Unidentified Justice: It isn't far away.

It's right next door.

It's right across--

Mr. Anderson: --Well, it's entirely possible that under a set of circumstances, Your Honor, that would be the case.

Unidentified Justice: --Let me ask another irrelevant question, probably.

The Sporhases are residents of Colorado, are they not?

Mr. Anderson: That's correct, Your Honor.

And to be fair, contained in the Colorado amicus brief it was mentioned that the Nebraska reciprocity statute is not the only problem to the Appellants.

Appellants had applied to the Colorado authorities for a permit to have a well on the Colorado tract and were denied that, because the water is over-appropriated in Colorado under the Colorado system.

Unidentified Justice: My question now, however, is, if they lived on the Nebraska side you'd still be taking the same position?

Their Colorado residence is immaterial so far as you're concerned?

Mr. Anderson: Oh, yes, very definitely, Your Honor.

They own... yes, it doesn't matter who.

The statute applies equally to all, Your Honor, as appears from the face of it.

Appellants never applied for a permit, Your Honor.

They were never denied and there was never any decision upon whether the permit should be granted.

They were pumping water without attempting to comply with the Nebraska statute.

Unidentified Justice: Well, but I thought the law was, and the Supreme Court said, they couldn't get a permit anyway, because there was no reciprocity.

Mr. Anderson: The law is now, after they were enjoined, that they can't get a permit.

But they never applied for a permit, Your Honor.

They never took the first step.

Unidentified Justice: Let me go back--

--Go ahead.

Let me go back to my earlier question.

Now I am frankly confused.

Your friend said that ground water could be taken out of the ground, put in bottles, shipped over, carried over by truck or otherwise to Omaha, and sold in the supermarkets.

I wasn't sure what your answer was, but I wish you would clear it up.

Can they do that with ground water now?

Mr. Anderson: No.

No, Your Honor.

Unidentified Justice: So there's a sharp disagreement between the two of you on that particular hypothetical.

I think in light of the Nebraska Supreme Court's decision in this case, in which they say that the Nabraskam constitutional provision which says that the use of water of every natural stream within the state of Nebraska is dedicated to the people of the state for beneficial purposes, subject to the provisions of this section, and that that section applies to ground water, people could not exercise ownership of it and deprive others.

They have to use it and let it flow on, and they can't--

--They're not depriving others.

Mr. Anderson: --sell that water.

Unidentified Justice: They aren't depriving others.

They're trying to share it with them, when they send it over to Omaha in a bottle.

But you say they can't do that?

Mr. Anderson: I don't believe that under the decision in the Sporhase case, which is the definitive discussion of ground water, the rights to ground water, that they could do that, Your Honor, no.

Unidentified Justice: Mr. Attorney General, what is spring water?

Mr. Anderson: Spring water?

Unidentified Justice: Is that ground water?

Mr. Anderson: It's... spring water, I believe, Your Honor, would be ground water--

Unidentified Justice: I was thinking about it, because that's the water that's usually bottled.

Mr. Anderson: --that has naturally reached surface and become surface water.

Unidentified Justice: Yes, that's usually the water that's bottled, is spring water, isn't it?

If it was spring water--

Mr. Anderson: I suppose so, yes.

Unidentified Justice: --from a spring, it couldn't be transferred?

Mr. Anderson: Not... well, it's my understanding that under this case, Your Honor, under the Sporhase decision, that ground water would not be able to be sold.

Now, we have a different... I think we have to realize that there is a different treatment for municipal or drinking water than there is for agricultural and irrigation water.

The MUD case, which was referred to by the Appellant, is a case which does deal with transportation of water, and that is an exception to the general rule.

The general rule applies to agricultural irrigation water.

However, the rule on municipal drinking water is that it may be taken from the sources of water to the municipalities, as--

Unidentified Justice: That goes for ground water, too, doesn't it?

Mr. Anderson: --That's correct, Your Honor.

Unidentified Justice: So that my landowner may transfer water to the municipality?

Mr. Anderson: Well, Your Honor, the municipality is the landowner in that case, and they said that that... the municipality is not charging for the ground water, it is charging for the cost of distributing that water, not the value of the water itself.

Unidentified Justice: Mr. Anderson, if Colorado had a reciprocity statute that would satisfy the Colorado requirement for reciprocity, I take it that the Nebraska statutes would permit the issuance of a permit to take the water out of the state?

Mr. Anderson: Not necessarily so, Your Honor.

Unidentified Justice: Now, here's what the Supreme Court says: "The statute allows such transfers"... namely, transfers across state lines...

"conditioned on the receipt of a permit from the director of the."

"Department of Water Resources, who may grant the permit if the transfer is reasonable, is not contrary to conservation, and the use of ground water."

That's what the Supreme Court says.

Now, I'm reading from A-7 in the jurisdictional statement.

Page 119.

Mr. Anderson: Thank you.

One of the conditions that has to be met is, not contrary to the use of ground water, and the use of ground water in the state is use with--

Unidentified Justice: Well, I agree they might forbid it.

But it would not... they could also permit it--

Mr. Anderson: --Oh, yes, Your Honor.

Unidentified Justice: --in which event it seems to me that there is a provision... there is a situation in which water may be transferred outside the state.

Mr. Anderson: I think that this case... that this situation would only apply to municipal water purposes, Your Honor.

This, in reading the legislative history, this enactment was enacted for municipal water purposes, so that the City of Superior, Nebraska, could acquire a municipal water supply from Kansas.

The distinction--

Unidentified Justice: Mr. Anderson, may I ask a question, please.

Even absent this reciprocity provision, could not Nebraska prevent the taking of the water in any area where it was determined that it was a critical water area and it should not be used?

Couldn't Nebraska achieve the same result absent a reciprocity provision like this?

Mr. Anderson: --Well, it could.

It could, Your Honor, if it applied the same standard to both the in-state and out of state uses.

And we do in this case... we wouldn't... if the commerce clause applies, then we would have to be uniform for both in-state and out of state uses.

And the real question is--

Unidentified Justice: And it might reach the same end result in an area where the water supply is low or critical, right?

Mr. Anderson: --Well, it might, Your Honor.

The problem is--

Unidentified Justice: Then how do you explain the statement in your brief where you talk about what might happen if we were to invalidate the reciprocity provision, and where you say the other alternative is the application of a silent de facto reciprocity consideration?

What did you mean by that?

Mr. Anderson: --Well, by that I meant, Your Honor, that the state is looking at trying to balance their exports and their imports, and in order to ensure that there is water on the land that is in the state, and that one of the considerations--

Unidentified Justice: Well, were you saying that even if we were to invalidate it you'd consider... you would do the same thing you're now doing?

Mr. Anderson: --No, no, Your Honor.

Unidentified Justice: I didn't understand the statement.

Mr. Anderson: No, that is not the case.

But the state is attempting to maintain a static water table in this particular area, or in all areas of the state, particularly this control area and this critical township where the well is located and where there is a great deal of control.

The problem... the reason that it is so important to look at the... whether the commerce clause applies in this case is because if we reach the question of whether the reciprocity statute is... the reciprocity clause should be considered, evaluated, we then are concluding that the commerce clause applies to water.

And we don't think that the commerce clause does apply to water, for the three reasons, for one of the three reasons that either Congress has deferred to the states by its specific enactment of statutes again and again--

Unidentified Justice: Any particular one?

You've got 37 of them cited here.

You mean all of them?

Mr. Anderson: --All of those statutes contain some language which defers to the states, Your Honor.

Unidentified Justice: Well, has Congress said in so many words in any of these statutes that the commerce clause shall not apply to ground water?

Mr. Anderson: It has not--

Unidentified Justice: And that states are free to regulate it?

Has it said that in so many words?

Mr. Anderson: --Well, it certainly has in so many words, yes, Your Honor.

It says in--

Unidentified Justice: Which statute?

Mr. Anderson: --Section 8 of the 1902 Reclamation Act, Your Honor:

"Nothing in this Act shall be--"

Unidentified Justice: Where are you reading from, now?

Mr. Anderson: --I don't have the--

Unidentified Justice: Well, I guess it's at page 23 of your brief, isn't it?

Mr. Anderson: --That's--

Unidentified Justice: Where you cite Section 8?

Mr. Anderson: --Yes, Your Honor, 23 of my brief says:

"Nothing in this Act shall be construed as affecting or intending to affect or in any way interfere with the laws of any state or territory relating to the control, appropriation, use or distribution of water used in irrigation or any vested right acquired thereunder."

and that the United States shall comply with those laws.

And this is repeated over and over again, in the Flood Control Act of 1944--

Unidentified Justice: In pretty much those words?

Mr. Anderson: --Pretty much, and they go... I think, Your Honor, that by these 37 Acts, by the repeated ratification and approval of interstate compacts negotiated by the states, Congress has specifically recognized that the states have the power to manage the water.

This Court has recognized that in their decrees of--

Unidentified Justice: If you're right about this, what's left of the commerce clause argument?

Mr. Anderson: --There's nothing left with respect to the natural resource water, and water is a unique natural resource.

Unidentified Justice: Well, I know, but for purposes of this case.

Mr. Anderson: That is determinative of this case, Your Honor.

Unidentified Justice: Well, of course, the argument on the other side is that up to a point they left it with the states.

But there's nothing specific in these Acts that speak about interstate commerce or against... or authorizing the restrictions of the movement of water to another state.

Mr. Anderson: There is specifically, Your Honor, in the interstate compacts and in these statutes a restriction upon water.

The state manages the water and by their management decisions they restrict the water.

In, for instance, this case, Colorado does not permit by its decisions water now to be exported out of the state in this region.

The Appellants applied for a permit to use water on their overlying land and it was denied.

Anyone applying in the state of Colorado to export water could not export it.

Their management of the water of Colorado prevents exportation, and that then gets us into a commerce clause review.

And Congress has said that the state statutes are controlling in this area and that therefore a commerce clause review is not necessary.

Unidentified Justice: Is it not correct that if your argument based on these, the Reclamation Act and the other statutes, is valid, that the City of Aldus case should be overruled?

Mr. Anderson: I don't think so, Your Honor, because the Aldus case deals with a completely different state management--

Unidentified Justice: In other words, you think all these statutes just say that the water is not an article of commerce if the state law is such as Nebraska's?

That's what these statutes all add up to?

Mr. Anderson: --I think we... I think we have to recognize, Your Honor, that where... I think Aldus and the Hudson case and our approach in this case are all consistent.

Water is a unique natural resource in a state where it is dedicated to the people and not treated as a commodity.

At no point in time is agricultural irrigation water, or water at all, in Nebraska treated as a commodity, as an article of commerce.

It is not sold.

And under that legal framework, as is true with the eleven states that filed, generally, the eleven states that filed briefs in our support, water is not reachable by the commerce clause, and the reason for that is Congressional deference.

And also, I think we can look to the legal theory of the Usery case, where water in the state of Nebraska and elsewhere within the arid western states has become an area of traditional functioning by the states.

It's part of the state sovereignty.

It is just as important to the people of that state as is fire protection, as is police protection, as is health, sanitation, parks and recreation, which are those areas mentioned in the Usery case, and which were discussed in your case last week of the Long Island Railroad case.

The Usery case does apply, and in Nebraska there are day to day decisions being made relating to the economics, the life, of drinking water, all of the social interests of the people of Nebraska, as in Arizona, as in Colorado and Utah and the other western states, that relate directly to those people's everyday lives.

Unidentified Justice: Now let me take you back to that quote from California against the United States that has been referred to in the colloquy.

I read that, the language of this Court, as being limited to water used in irrigation.

Now, is in your view all the water that we're talking about used in irrigation?

This isn't... this would not affect bottling the water, ground water, and selling it in supermarkets in Omaha, as you suggested.

Mr. Anderson: We're not--

Unidentified Justice: This is irrigation.

Mr. Anderson: --I didn't suggest that, Your Honor.

We are dealing with irrigation in the case at bar, and the Supreme Court was ruling, our Nebraska Supreme Courts, was ruling on that in the case.

I think that as far as irrigation water goes in agriculture, it is not subject to ownership, to sale to market-setting, and it is not subject to the commerce clause.

We would urge, Your Honor, that you affirm the Nebraska Supreme Court finding that water is a unique resource, different from the other natural resources of natural gas, et cetera, and would affirm the Nebraska Supreme Court.

Thank you.

Chief Justice Burger: Thank you.

You have two minutes remaining, counsel.

Do you have anything further?

REBUTTAL ARGUMENT OF RICHARD A. DUDDEN, ESQ. ON BEHALF OF APPELLANTS

Mr. Dudden: Thank you, Your Honor.

Mr. Chief Justice and may it please the Court:

I think it is important to point out that if this mandatory reciprocity requirement were eliminated that there still would remain on the books and records of the Nebraska statutes adequate law to allow the state of Nebraska to evenhandedly control and regulate water.

They would do this by determining reasonable uses and setting forth those reasonable uses, so that people could calculate whether or not they were making reasonable use of the water, by conducting administrative hearings and by issuing well permits specifically restricting the use of water as to the particular purpose requested.

They do not need to have a mandatory reciprocal requirement in order to control water in Nebraska.

I would like to point out to the Court that there is no case in the state of Nebraska that specifically defines overlying land, and that has been discussed quite a bit this morning.

I would also like to mention that it is our opinion that Congress does have the power to regulate concerning water, as has been asked by this Court.

But the question that's really before the Court today is: What is the law under the commerce clause when Congress has not clearly and unmistakeably legislated on the question?

It is our position that, in view of all of the Acts that have been mentioned in counsel's opposing brief by the State of Nebraska, none of those Acts use clear and unmistakeable language--

Unidentified Justice: What you're saying is, if we're to say that Congress has said the states are free and there's no commerce clause, whatever it may be, Congress gives it up, they have to say so in explicit words?

Mr. Dudden: --That is correct.

And I'm saying further, they have not done so.

Thank you very much, Your Honor.

Chief Justice Burger: Thank you, gentlemen.

The case is submitted.