IN THE NEBRASKA SUPREME COURT

THE CENTRAL NEBRASKA PUBLIC POWER AND IRRIGATION DISTRICT,
A Public Corporation and Political Subdivision of the State of Nebraska,
Appellant,

vs.

IRRIGATION WELL OWNERS,
Appellees,

and

NEBRASKA DEPARTMENT OF NATURAL RESOURCES,
Appellee.

APPEAL FROM THE NEBRASKA DEPARTMENT OF NATURAL RESOURCES

BRIEF OF APPELLEE NEBRASKA DEPARTMENT OF NATURAL RESOURCES

JON BRUNING, #20351
Attorney General
David D. Cookson, # 18681
Justin D. Lavene, #22178
Assistant Attorneys General
2115 State Capitol
Lincoln,NE 68509-8920
Tel: (402) 471-2682
dcookson@notes.state.ne.us
jlavene@notes.state.ne.us
Attorneys for Appellee Nebraska Department of Natural Resources.

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATEMENT OF JURISDICTION

STATEMENT OF THE CASE

PROPOSITIONS OF LAW

STATEMENT OF FACTS

ARGUMENT

INTRODUCTION

I. THE DEPARTMENT OF NATURAL RESOURCES DOES NOT HAVE THE AUTHORITY TO REGULATE GROUND WATER USERS FOR THE BENEFIT OF SURFACE WATER APPROPRIATORS

A. The Legislature has Delegated the Authority to Regulate Surface Water to the Department of Natural Resources

B. The Legislature has Delegated the Authority to Regulate Ground Water to the Natural Resource Districts

C. The Legislature is Responsible for Declaring Public Policy in Regard to the Administration of Surface Water and Ground Water

II. RULINGS BY THE U.S. SUPREME COURT WITH REGARD TO HYDROLOGICALLY CONNECTED GROUND WATER AND INTERSTATE COMPACT ACCOUNTING DO NOT ALTER OR AFFECT NEBRASKA'S WATER LAW STRUCTURE

CONCLUSION

PROOF OF SERVICE

TABLE OF AUTHORITIES
CASES

Ainsworth Irrigation District v. Harms, 170 Neb. 228, 102 N. W.2d 429 (1960)

Arizona v. California, 376 U.S. 340, 84 S.Ct. 755 (1964)

Bamford v. Upper Republican Natural Resources District, 245 Neb. 299, 512 N. W.2d 642 (1994)

Beatrice Gas Co. v. Thomas, 41 Neb. 662, 59 N.W. 925 (1894)

Drainage Dist. No. I of Lincoln County v. Suburban Irr. Dist., 139 Neb. 460, 298 N. W .131 (1941)

Holmes v. Circo, 196 Neb. 496, 244 N. W.2d 65 (1976)

In re Application A-16642, 236 Neb. 671,463 N. W.2d 591, (1990)

In re Referral of Lower Platte South Natural Resources District, 261 Neb. 90, 621 N. W.2d 299 (2001)

Kansas v. Colorado, 514 U.S. 673, 115 S.Ct. 1733 (1995)

Kansas v. Nebraska, 530 U.S. 1272, 120 S.Ct. 2764 (2000)

Meng v. Coffee, 67 Neb. 500,93 N. W. 713 (1903)

Morrissey v. Department of Motor Vehicles, 264 Neb. 456, 647 N.W.2d 644 (2002)

Nebraska v. Wyoming, 325 U.S. 589, 65 S.Ct. 1332 (1945)

Nebraska v. Wyoming, 507 U.S. 584, 113 S.Ct. 1689 (1993)

Nebraska v. Wyoming, 515 U.S. 1, 115 S.Ct. 1933 (1995)

Olson v. City of Wahoo, 124 Neb. 802,248 N. W. 304 (1933)

Texas v. New Mexico, 446 U.S. 540, 100 S.Ct. 2911 (1980)

Texas v. New Mexico, 462 U.S. 554, 103 S.Ct. 2558 (1983)

Volquardson v. Hartford Ins. Co. of the Midwest, 264 Neb. 337, 647 N.W.2d 599 (2002)

STATUTES

Neb. Rev. Stat. § 2-3201 (Cum. Stipp. 2002)
Neb. Rev. Stat. §46-202(1) (Reissue 1998)
Neb. Rev. Stat. §46-203 (Reissue 1998)
Neb. Rev. Stat. § 46-204 (Reissue 1998)
Neb. Rev. Stat. § 46-226 (Cum. Stipp. 2002)
Neb. Rev. Stat. § 46-233(1-2) (Cum. Stipp. 2002)
Neb. Rev. Stat. §46-233(3) (Cum. Stipp. 2002)
Neb. Rev. Stat. § 46-235(1) (Cum. Stipp. 2002)
Neb. Rev. Stat. § 46-602 (Supp. 2003)
Neb. Rev. Stat. § 46-609 (Reissue 1998)
Neb. Rev. Stat. § 46-613 (Reissue 1998)
Neb. Rev. Stat. § 46-613.02 (Cum. Stipp. 2002)
Neb. Rev. Stat. §§ 46-636 and 46-637 (Cum. Stipp. 2002)
Neb. Rev. Stat. § 46-638 et seq
Neb. Rev. Stat. § 46-656 et seq
Neb. Rev. Stat. § 46-656.05(3) (Cum. Stipp. 2002)
Neb. Rev. Stat. §46-656.05(4) (Cum. Stipp. 2002)
Neb. Rev. Stat. § 46-656.07(2) (Cum. Stipp. 2003)
Neb. Rev. Stat. §46-656.08 (Reissue 1998)
Neb. Rev. Stat. §§ 46-656.50 through 46-656.60 (Cum. Stipp. 2002)
Neb. Rev. Stat. § 46-675 et seq
Neb. Rev. Stat. § 46-691 (Supp. 2003)
Neb. Rev. Stat. §61-205 (Reissue 2003)
Neb. Rev. Stat. § 61-206 (Reissue 2003)
Neb. Rev. Stat. §61-206(1) (Cum. Supp. 2002)
Neb. Rev. Stat. §61-207 (Cum. Supp. 2002)
Neb. Rev. Stat. §70-601 et seq. (Reissue 1996)

OTHER AUTHORITIES

Neb. Const. Art. XV, § 4, 5, 6
Neb. Const. Art. XV, § 5
Neb. Const. Art. XV, § 6
Laws of 1889 Ch. 68, Art. 1 §1
1941 Legis. J., 55th Legis. Sess
1941 Neb. Laws 460
1957 Neb. Laws 598
1996 Neb. Laws 108
2004 Neb. Laws 962
Richard S. Harnsberger and Norman W. Thorson, Nebraska Water Law and Administration, 9-10 (1984)
Richard S. Harnsberger, et al., Groundwater: From Windmills to Comprehensive Public Management, 52 Neb. L. Rev. 179, 240 (1973)
Stephen D. Mossman, 'Whiskey is for Drinkin' but Water is for Fightin' about': A First-Hand Account of Nebraska's Integrated Management of Ground and Surface Water Debate and the Passage o fL.B. 108. 30 Creighton L. Rev. 67 (1996)

STATEMENT OF JURISDICTION

This Court has jurisdiction pursuant to Neb. Rev. Stat. § 61-207 (Cum. Supp. 2002) which allows any party interested in irrigation and dissatisfied with any decision or order adopted by the Department of Natural Resources ("Department") to appeal such decision or order to the Nebraska Court of Appeals to reverse, vacate, or modify the order complained of entered.

STATEMENT OF THE CASE

A. Nature of the Case.

Appellee accepts Appellant's statement found in the Appellant's Brief as correct other than to state that Appellant's assertion that the Department has jurisdiction to grant the relief sought by Central Nebraska Public Power and Irrigation District ("Central") pursuant to Neb. Rev. Stat. § 61-206 (1) (Cum. Supp. 2002) is incorrect as a matter of law.

B. Issues Actually Tried to the Agency below.

Appellee does not accept Appellant's statement as correct. The issue actually tried by the agency below was as follows: Whether the Department of Natural Resources has the legal authority to regulate ground water use under the prior appropriation doctrine.

C. Rulings of the Agency below.

Appellee does not accept Appellant's statement as correct. The ruling of the agency below was as follows: The Department of Natural Resources summarily dismissed Central's Amended Complaint for lack of jurisdiction to grant the relief requested.

D. Scope of Review.

Appellee generally accepts Appellant's statement found in the Appellant's Brief as correct.

PROPOSITIONS OF LAW

I. SURFACE WATER APPROPRIATION RIGHTS WERE CREATED BY STATUTORY AND CONSTITUTIONAL PROVISIONS AND THE EXTENT OF THE RIGHTS ARE THEREFORE LIMITED TO THOSE ENACTMENTS.

Drainage Dist. No. I of Lincoln County v. Suburban Irr. Dist., 139 Neb. 460, 298 N.W.131 (1941); Neb. Const. art. XV, sec. 6; Neb. Rev. Stat. §46-203 (Reissue 1998)

II. THE DEPARTMENT OF NATURAL RESOURCES IS GIVEN JURISDICTION OVER ALL MATTERS PERTAINING TO WATER RIGHTS FOR IRRIGATION, POWER, OR OTHER USEFUL PURPOSES EXCEPT AS SUCH JURISDICTION IS SPECIFICALLY LIMITED BY STATUTE

Neb. Rev. Stat. §61-206 (Reissue 2003).

III. THE LEGISLATURE HAS MADE THE DEPARTMENT OF NATURAL RESOURCES RESPONSIBLE FOR REGULATION OF SURFACE WATER RESOURCES, INCLUDING THE PRIORITY AND AMOUNT OF EACH SURFACE WATER APPROPRIATION.

Neb. Rev. Stat. §46-656.05(4) (Cum. Supp. 2002); Ainsworth Irrigation District v. Harms, 170
Neb. 228, 102 N. W.2d 429 (1960); Neb. Rev. Stat. §61-205 (Reissue 2003); Neb. Rev. Stat. § 61-206 (Reissue 2003).

IV. NATURAL RESOURCES DISTRICTS ARE THE PREFERRED ENTITIES TO REGULATE GROUND WATER RELATED ACTIVITIES WHICH ARE CONTRIBUTING TO OR ARE LIKELY TO CONTRIBUTE TO CONFLICTS BETWEEN GROUND WATER USERS AND SURFACE WATER APPROPRIATORS.

Neb. Rev. Stat. § 46-656.05(3) (Cum. Supp. 2002); Neb. Rev. Stat. §46-656.08 (Reissue 1998).

V. THE DEPARTMENT OF NATURAL RESOURCES IS RESPONSIBLE FOR REGULATION OF SURFACE WATER RESOURCES AND SHOULD BE RESPONSIBLE FOR REGULATION OF SURFACE WATER RELATED ACTIVITIES WHICH CONTRIBUTE TO CONFLICTS BETWEEN GROUND WATER USERS AND SURFACE WATER USERS.

Neb. Rev. Stat. § 46-656.05(4) (Cum. Supp. 2002).

VI. THE HISTORY OF OUR IRRIGATION LAWS AND CONSTITUTIONAL PROVISIONS IS THAT THE EXPRESSED PURPOSE OF OUR LAWGIVERS IS TO LIMIT THE RIGHT OF APPROPRIATION FOR IRRIGATION TO THE WATERS OF THE "NATURAL STREAMS" OF THE STATE. NO OTHERS ARE EMBRACED IN THE PUBLIC DEDICATION THUS MADE.

Drainage Dist. No. I of Lincoln County v. Suburban Irr. Dist., 139 Neb. 460, 298 N. W.131 (1941).

STATEMENT OF FACTS

Central is a political subdivision of the State of Nebraska pursuant to Neb. Rev. Stat. § 70-601, et seq. (Reissue 1996). (T3). Central holds numerous surface water appropriations for storage, storage use and direct flow. (T2-7). Central owns and operates Lake McConaughy and uses its water for hydro-power production, irrigation, recreation, and environmental enhancement. (T2-7).

On May 3,2004, Central filed with the Department of Natural Resources ("Department") an Amended Complaint Against Unpermitted Diversions ("Amended Complaint"). (T2-7). Central's Amended Complaint alleged violations of "unpermitted diversions of the waters of the Platte River and its tributaries by the persons identified as registered irrigation well owners located in the Platte River watershed ("Irrigation Well Owners"), as listed in the Department's database, upstream of Central's diversion dam," located in Lincoln County, Nebraska. (T2-3). Central alleges that the Irrigation Well Owners "are diverting the waters of the Platte River and its tributaries without having first sought and obtained appropriations from the Department" and that these unpermitted diversions represent a deprivation of water which would otherwise be available for diversion pursuant to Central's appropriations. (T3-5).

Central requested the following in its prayer for relief: 1) that each of the Irrigation Well Owners be ordered to cease unpermitted diversions; 2) that Central's appropriations, described in the Amended Complaint, be declared prior and superior to the unpermitted diversions of the Irrigation Well Owners; 3) that the Department take all necessary and appropriate actions to protect Central's appropriations; and 4) that the Department take all necessary and appropriate actions to enforce the regulation of unpermitted diversions. (T7).

On July 1, 2004, the Director of the Department issued an Order summarily dismissing Central's Amended Complaint for lack of jurisdiction to grant the relief requested. (T172-174). Central filed its Notice of Appeal with the Department on July 15, 2004.

ARGUMENT

INTRODUCTION

Notwithstanding Central's prayer for relief, what is it that Central really wants. Central wants all ground water irrigation in the State of Nebraska to be placed under the prior appropriation system. Central wants all ground water irrigations wells to be regulated by the Department, not the Natural Resource Districts ("NRDs"). Central wants the Department to declare that ground water irrigation wells are junior to surface water appropriations in the State. Central wants junior ground water irrigation wells to be shut off for the benefit of senior surface water appropriators. Finally, Central wants to obtain through judicial ruling what it has not received by legislative action. Central wants to have current water law and policies, as enacted by the Legislature pursuant to the Groundwater Management and Protection Act, LB 108, and LB 962, declared null and void.

The proper administration of water resources has been an important issue in Nebraska for many years. Recent drought conditions have highlighted the need for proper regulation and administration of both ground water and surface water. Based upon the need to update and improve Nebraska's water management, the Legislature took action on the recommendations of the Nebraska Water Policy Task Force and passed LB 962 this past year. Although many changes have been made with regard to how Nebraska regulates water in the State, one thing has remained a constant: ground water is regulated by Natural Resource Districts under the doctrine of beneficial use and correlative rights, and surface water is regulated by the Department of Natural Resources under the prior appropriation system.

I. THE DEPARTMENT OF NATURAL RESOURCES DOES NOT HAVE THE AUTHORITY TO REGULATE GROUND WATER USERS FOR THE BENEFIT OF SURFACE WATER APPROPRIATORS.

"The use of the water of every natural stream within the State of Nebraska is hereby dedicated to the people of the state for beneficial purposes, subject to the provisions of the following section." Neb. Const. Art. XV, § 5 (emphasis added).

"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. . . ." Neb. Const. Art. XV, § 6 (emphasis added).

"The water of every natural stream not heretofore appropriated within the State of Nebraska, including the Missouri River, is hereby declared to be the property of the public and is dedicated to the use of the people of the state, subject to appropriation. Neb. Rev. Stat. § 46- 202(1) (Reissue 1998) (emphasis added).

Surface water is defined as all waters found on the surface of the earth flowing in a clearly defined channel. Richard S. Harnsberger and Norman W. Thorson, Nebraska Water Law and Administration, 9-10 (1984) (emphasis added).

"The Department of Natural Resources is responsible for regulation of surface water resources . . ." Neb. Rev. Stat. § 46-656.05(4) (Cum. Supp. 2002) (emphasis added).

"Ground water means that water which occurs in or moves, seeps, filters, or percolates through ground under the surface of the land; . . ." Neb. Rev. Stat. § 46-656.07(2) (Supp. 2003) (emphasis added).

"Natural resources districts . . . are the preferred entities to regulate, through ground water management areas, ground water . . ." Neb. Rev. Stat. § 46-656.05(3) (Cum. Supp. 2002) (emphasis added).

"The Department of Natural Resources is given jurisdiction over all matters pertaining to water rights for irrigation, power, or other useful purposes except as such jurisdiction is specifically limited by statute." Neb. Rev. Stat. § 61-206(1) (Reissue 2003) (emphasis added).

Pursuant to the above cited Constitutional provisions and statutory authority: 1) a natural stream is surface water and only surface water is subject to appropriation under the prior appropriation system; 2) the Department only has authority to regulate and administer surface water and can only place surface water under the prior appropriation system; 3) NRDs are responsible for the regulation of ground water and the Department has no jurisdiction or authority to regulate ground water other than limited oversight and administration responsibilities.

The Department properly found that the "Legislature has not given the Department of Natural Resources any independent authority to regulate or administer ground water users for the benefit of surface water appropriators." (T173). Without such legislative authority, the Department properly dismissed Central's Amended Complaint for lack of jurisdiction.

The Legislature is the proper body to implement the State's water policy and in so doing the Legislature has delegated the authority to regulate surface water to the Department and the authority to regulate ground water to the NRDs, including hydrologically connected ground water by the passage of LB 108 in 1996. To the extent that Central claims the Department has the authority to place ground water under the prior appropriation system and to regulate ground water for the protection of surface water appropriations, Central's claims are without merit and the Department was correct in dismissing Central's Amended Complaint for lack of jurisdiction.

A. The Legislature has Delegated the Authority to Regulate Surface Water to the Department of Natural Resources.

Nebraska statutory and case law authorizes the Department to administer surface water appropriations as between other surface water appropriators, but does not authorize the Department to protect those rights as against ground water users. It is well established that the Department only has that authority which the Legislature has specifically conferred upon it by statute. In re Application A-16642, 236 Neb. 671,705,463 N.W.2d 591, 613 (1990). The Legislature has specifically stated that "[t]he Department of Natural Resources is responsible for regulation of surface water resources. . ." Neb. Rev. Stat. § 46-656.05(4). Also, the "method for determining the priority and amount of appropriation shall be fixed by the Department." Ainsworth Irrigation District v. Harms, 170 Neb. 228, 237, 102 N.W.2d 429, 434 (1960); Neb. Rev. Stat. § 46-226 (Cum. Supp. 2002). Pursuant to statute, the Legislature has only authorized the Department to regulate and protect surface water appropriators from other surface water appropriators. Neb. Rev. Stat. §§ 61-205, 61-206 (Reissue 2003). There is no similar authorization for the Department to regulate or protect surface water appropriators from ground water irrigators.

Nebraska has had clearly defined legislation relating to surface water flowing in a natural stream since 1895 when the doctrine of prior appropriation was first adopted. When the water laws of this state were passed, they related to surface water and surface water appropriations only. Surface water is defined as all waters found on the surface of the earth flowing in a clearly defined channel. Richard S. Harnsberger and Norman W. Thorson, Nebraska Water Law and Administration, 9-10 (1984).

For surface water usage, Nebraska utilizes a priority system based on prior appropriation and focuses "on the application of the water to a beneficial use, rather than on the ownership of riparian land, and its use of a first-in-time, first-in-right approach to conflicts between users, as opposed to the riparian's system of equality among riparians." In re Application A-16642, 236 Neb. 671, 684,463 N. W.2d 591, 601 (1990). The Nebraska system of surface water prior appropriation is clearly set forth in Neb. Rev. Stat. § 46-203 (Reissue 1998), which simply states: "As between appropriators, the one first in time is first in right." This prior appropriation rule applies to surface water while, in contrast, this Court and the Legislature have determined that the right to use ground water derives from ownership of the overlying land. See Bamford v. Upper Republican Natural Resources District, 245 Neb. 299, 305, 512 N.W.2d. 642, 647 (1994); Olson v. City of Wahoo, 124 Neb. 802, 809-810248 N. W. 304, 307 (1933).

The Legislature set forth statutes to regulate surface water pursuant to the prior appropriation doctrine and granted the Department the authority to implement its policy. It is the Department's responsibility to interpret the statutes in order to carry out the will of the Legislature. As with other agencies, the Department is given deference in interpreting its own statutes and regulations. Morrissey v. Department of Motor Vehicles, 264 Neb. 456, 459, 647 N.W.2d 644, 649 (2002).

For over 100 years the Department has interpreted Nebraska statutes as only granting its agency the authority to regulate surface water. If the Department had been interpreting the statutes incorrectly, it would seem very likely that the Legislature would have made some type of correction and/or clarification for the Department, or its predecessors, during the past 100 years. The Legislature has not corrected the Department's interpretation of its responsibility to regulate surface water, and surface water only. In fact the Legislature has codified the Department's lack of authority to regulate ground water under the prior appropriation doctrine by drafting the Ground Water Management and Protection Act and its subsequent amendments, including LB 962. Therefore, the Department is properly operating within its grant of authority by the Legislature with regard to surface water management in Nebraska.

The Legislature has also set out the procedures for granting surface water appropriations in the State, and the Department implements those procedures. The entity or individual desiring a surface water right must file an application containing specific information with the Department. Neb. Rev. Stat. § 46-233(1-2) (Cum. Supp. 2002). The Department will record the application and examine it for obvious defects. Neb. Rev. Stat. §46-233(3) (Cum. Supp. 2002). If there is unappropriated surface water in the source of surface water named in the application, the Department will then authorize the application and the date of the filing becomes the priority date of the surface water right. Neb. Rev. Stat. §46-235(1) (Cum. Supp. 2002). This filing date ensures a priority against any other surface water appropriator who has a later filing date. These priority dates are determined and fixed by the Department. Neb. Rev. Stat. § 46-226 (Cum. Supp. 2002). In times of water shortage, the appropriator with the earlier, or senior, priority date will have a better right for use of the water over those appropriators with a later, or junior, priority date. Neb. Rev. Stat. § 46-204 (Reissue 1998). This procedure grants the Department the ability ,to protect senior surface water appropriators against junior surface water appropriators when the surface water supply is insufficient to meet the demand of all surface water users. The Legislature has not created similar statutory authority for the Department to regulate ground water use. As stated above, neither statute nor common law imposes any duty on the Department to affirmatively protect the interests of surface water appropriators, such as Central, from ground water use.

The Nebraska Supreme Court has found that appropriation rights were created by statutory and constitutional provisions and the extent of the rights are therefore limited to those enactments. Drainage Dist. No. I of Lincoln County v. Suburban Irr. Dist., 139 Neb. 460, 468, 298 N.W. 131, 135 (1941). Therefore, no common law duty can be imposed upon the Department to defend the surface water appropriation rights from ground water users.

Surface water appropriation rights are limited by the findings of the Nebraska Supreme Court in Drainage Dist. No.1, 139 Neb. at 468,298 N. W. at 135, which held "... the system of irrigation which was a subsequent development of [Nebraska] law has its foundation and source in statutory enactments and constitutional provisions. Rights of irrigation in this State only exist as thus created and defined, and are necessarily limited in their scope by the language of their creation." The Court in Drainage Dist. No.1, went on to hold:

From the history of our irrigation laws and constitutional provisions, it clearly appears that the expressed purpose of our lawgivers, as now existing, is to limit the right of appropriation for irrigation to the waters of the "natural streams" of the state. No others are embraced in the public dedication thus made.

139 Neb. at 470, 298 N. W. at 136 (emphasis added). The Court even stated this proposition before the prior appropriation system was codified in the Nebraska Constitution. At a time when surface water rights were still governed by the riparian system, the Nebraska Supreme Court held in Meng v. Coffee, 67 Neb. 500, 502,93 N.W. 713,714 (1903), that the common-law rules as to the rights and duties of riparian owners were in force in this state, except as modified by statute, and in Beatrice Gas Co. v. Thomas, 41 Neb. 662, 667, 59 N. W. 925, 927 (1894), that such riparian laws in relation to surface waters were not applicable to subterranean waters.

It is acknowledged that the Court in Drainage Dist. No. 1 was not dealing with surface water appropriation rights against ground water users, but the issues involved are applicable to the case at hand. The drainage ditches in Drainage Dist. No. 1, were man-made and the court found that "their inherent nature exclude them from the class or kind of waters to which our laws of appropriation are now applicable." 129 Neb. at 471,298 N. W. at 136 (emphasis added). In a similar fashion, the pumping of hydrologically connected ground water is a separate and distinct occurrence for which the prior appropriation doctrine does not apply, and for which the Department does not have the authority to regulate.

It should be noted for the Court that Drainage Dist. No. 1 was decided after the Supreme Court's ruling in Olson, 124 Neb. 802,248 N. W. 304. In Olson the Court adopted the "American Rule" for the administration of ground water use:

The American rule is that the owner of land is entitled to appropriate subterranean waters found under his land, but he cannot extract and appropriate them in excess of a reasonable and beneficial use upon the land which he owns, especially if such use is injurious to others who have substantial right to the waters, and if the natural underground supply is insufficient for all owners, each is entitled to a reasonable proportion of the whole. . . .

124 Neb. at 811, 248 N. W. at 308. The Court in Olson also recognized the principle stated in Meng and Beatrice Gas, that the laws of surface water to not apply to ground water. Olson at 809-810,248 N.W. at 307.

For Central's claim to be correct, the Court in Olson would never have adopted the correlative rights doctrine for ground water use and instead would have applied the doctrine of prior appropriation. However, even after the recognition of the "American Rule" for ground water administration in Olson, the Court still found in Drainage Dist. No. 1 that the express purpose of the Legislature, at that point in time, from the laws then enacted, was to limit the right of appropriations for irrigation to the waters of the "natural streams" of the State of Nebraska. Drainage Dist. No 1, 139 Neb. at 470,298 N. W. at 136. If this Court grants Central's requested relief, then this Court must overturn Olson and every case after Olson that applies the "American Rule" for ground water administration.

Upon closer analysis of the case law asserted by Central, one thing becomes quite apparent: There is no common law duty imposed on the Department to protect surface water appropriators from ground water users. Although many of the cases involve whether or not ground water use should be accounted for in interstate water allocation compacts, none of the cases deal with a state's ability to decide how to regulate and administer the water resources within its borders. Nebraska has chosen to regulate ground water and surface water with two separate and distinct entities.

Since the Legislature is the branch of the government vested with the authority to create and enforce water policy in this state, In re Referral of Lower Platte South Natural Resources District, 261 Neb. 90, 94,621 N. W .2d 299,303 (2001), the Court cannot create a common law duty which would be in contravention with the policy adopted by the Legislature. Holmes v. Circo, 196 Neb. 496, 504, 244 N. W.2d 65, 70 (1976). Therefore, this Court should affirm the decision of the Department since no common law duty is imposed on the Department to protect surface water appropriation rights from users of hydrologically-connected ground water.

B. The Legislature has Delegated the Authority to Regulate Ground Water to the Natural Resource Districts.

"The Legislature has the power to determine public policy with regard to ground water. . ." In re Referral of Lower Platte South Natural Resources District, 261 Neb. at 94,621 N.W.2d at 303. In setting public policy, the Legislature has made it clear that the NRDs, and not the Department, are authorized to regulate ground water in the Nebraska. The Legislature codified the NRDs' authority to regulate ground water by stating:

Natural resources districts already have significant legal authority to regulate activities which contribute to declines in ground water levels and to nonpoint source contamination of ground water and are the preferred entities to regulate, through ground water management areas, ground water related activities which are contributing to or are, in the reasonably foreseeable future, likely to contribute to conflicts between ground water users and surface water appropriators. . .

Neb. Rev. Stat. § 46-656.05(3) (emphasis added). In order to effectuate the policy set forth by the Legislature to conserve ground water, NRDs, through the Nebraska Groundwater Management and Protection Act, have been granted the authority to:

(1) Adopt and promulgate rules and regulations necessary to discharge the act;

(2) Require such reports from ground water users as may be necessary;

(3) Require meters to be place on any water wells for the purpose of acquiring water use data;

(4) Conduct investigations and cooperate or contract with agencies of the United States, agencies or political subdivisions of this state, public or private corporations, or any association or individual on any matter relevant to the administration of the act;

(5) Report to and consult with the Department of Environmental Quality on all matters concerning the entry of contamination or contaminating material into ground water supplies;

(6) Issue cease and desist orders . . . to enforce any of the provisions of the act or of orders or permits issued pursuant to the act, to initiate suits to enforce the provisions of orders issued pursuant to the act, and to restrain the construction of illegal water wells or the withdrawal or use of water from illegal water wells.

Neb. Rev. Stat. § 46-656.08 (Reissue 1998) (emphasis added).

Although the Legislature has delegated the authority to regulate ground water to NRDs, the Department is required to handle various procedural matters related to ground water use. The Department is involved in limited areas of ground water administration such as the registration of ground water wells, various well spacing requirements, wells located within fifty feet of a river, and a limited oversight function with regard to integrated management plans.

For every ground water well completed, a registration form must be completed and filed with the Department. Neb. Rev. Stat. § 46-602 (Supp. 2003). If a registration form is not filed, the well will be considered an illegal well and the owner of the well is subject to penalties, as described in Neb. Rev. Stat. § 46-613.02 (Cum. Supp. 2002). The Department is also responsible for the spacing of ground water wells as set forth in Neb. Rev. Stat. § 46-609 (Reissue 1998). Ground water transfer permits are also granted by the Department under various conditions. Neb. Rev. Stat. §§ 46-613 (Reissue 1998), 46-638 et seq., 46-675 et seq., and 46-691 (Supp.2003). The Department has a limited oversight function with regard to integrated management plans that are jointly adopted by the Department and NRDs to help resolve conflicts between ground water and surface water. Neb. Rev. Stat. § 46-656 et seq. Finally, the Department is required to take into account any effects of ground water pumping that occurs within fifty feet of the bank of a channel of any natural stream before allowing such ground water well to be used. Neb. Rev. Stat. §§ 46-636 and 46-637 (Cum. Supp. 2002).

As NRDs are responsible for the management of ground water, the only way that the Department could be responsible for failing to protect a surface water appropriator against a ground water irrigator is if the Legislature determines that ground water and surface water should be managed as one and the same. Thus far, the Legislature has treated management of surface water and ground water, including hydrologically connected surface water and ground water, as separate and distinct. The Nebraska Supreme Court has endorsed the Legislature's regulatory scheme. See Bamford, 245 Neb. 299, 512 N.W.2d 642.

C. The Legislature is Responsible for Declaring Public Policy in Regard to the Administration of Surface Water and Ground Water.

The Legislature has a long history of formulating Nebraska's water law. Over the course of many years the Legislature has determined how water is to be managed and who should be responsible for such water administration. The first enactment of water rights and irrigation laws was chapter 68 Laws of 1889, Section 1, art. 1 of chapter 93a of the Compiled Statutes of 1881, with amendments 1882-1889, which provided:

[t]he right of the use of running water, flowing in a river or stream or down a canyon, or ravine, may be acquired by appropriation by any person or persons, company or corporation organized under the laws of the state of Nebraska; Provided, [t]hat in all streams not more than fifty feet in width, the rights of the riparian proprietors are not affected by the provisions of this act. (Emphasis in the original and added).

This Act went through various amendments until adopted at the Nebraska Constitutional Convention of 1920 as Neb. Const. Art. XV, §§ 4, 5, and 6, which provide,

Sec. 4. Water a public necessity. The necessity of water for domestic use and for irrigation purposes in the State of Nebraska is hereby declared to be a natural want.
Sec. 5. Use of water dedicated to people. The use of the water of every natural stream within the State of Nebraska is hereby dedicated to the people of the state for beneficial purposes, subject to the provisions of the following section.
Sec. 6. Right to divert unappropriated waters. 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 purpose, and those using the water for agricultural purposes shall have the preference over those using the same for manufacturing purposes ...
(Emphasis added).

Once again it is highlighted, from the above Constitutional provisions, that when the water laws of this state were first adopted, they related to surface water and surface water appropriations only. It is a highly relevant fact that at the time the above Constitutional provisions were drafted around 1919, the State of Nebraska did not have the type or amount of ground water irrigation that we have today. High capacity wells with center pivot systems simply did not exist. As pointed out in Central's brief, the adoption of Neb. Const. Art. XV, § 6, simply codified a change of doctrine with regard to surface water rights by incorporating the provisions of the prior appropriation system and extinguishing the riparian system of surface water rights.

Under the previous riparian system, only landowners whose property was adjacent to a body of surface water had a right to use that water. Thus, the change to the prior appropriation system, away from the riparian system, only altered the manner in which surface water rights were administered. This change had nothing to do with the rights of an individual to use ground water underneath the overlying land. As noted above, surface water is defined as all waters found on the surface of the earth flowing in a clearly defined channel. Richard S. Harnsberger and Norman W. Thorson, Nebraska Water Law and Administration, 9-10 (1984). A natural stream, as stated in Neb. Const. Art. XV, § 6, is surface water and surface water only.

Until the passage of LB108 in 1996, the Legislature consistently maintained a legislative policy that ground water and surface water should be managed as separate and distinct resources. This longstanding Legislative intent was specifically stated by the Legislature when it originally required registration and spacing requirements for irrigation wells and established groundwater preferences in 1957. The statement of intent by the Chairman of the Public Works Committee on LB 598 set forth the following:

However, it is firmly established that the constitutional and legislative provisions governing the use of surface water do not apply to the use of under-ground water. Until this session of the Legislature, no laws had been enacted pertaining to the use of such water.

1957 Neb. Laws 598 (emphasis added). This statement highlights the Legislature's public policy determination that surface water and ground water are to be managed in Nebraska as separate and distinct resources. In accordance with the Legislature's determination that ground water and surface water are to be managed as separate and distinct resources, the Legislature has given authority to regulate and manage these resources to two separate entities, the Department and NRDs.

The Legislature at one time did contemplate having the Department regulate ground water. In 1941, the Legislature introduced LB 460 which stated:

Sec. 6. The administration of the provision of this act is hereby vested in the department of roads and irrigation [predecessor to the Department of Natural Resources], whose policy shall be to effectuate as far as possible the best utilization of the ground water resources of the state, with due regard for all existing rights to the use of ground waters and as provided herein.

1941 Neb. Laws 460 (emphasis added). Although this bill was introduced and referred to committee, the scheduled hearing was cancelled and the bill was withdrawn almost immediately. 1941 Legis. J., 55th Legis. Sess., pp. 304,442,520,523. Ground water continued to be largely unregulated in Nebraska until the creation of the NRDs in 1969. Neb. Rev. Stat. § 2-3201 (Cum. Supp.2002). The Legislature has spent many years analyzing and formulating Nebraska's water policy. The current statutory framework continues to hold to the principle that ground water and surface water are managed as separate and distinct resources and are managed by different entities.

Although the authority to manage ground water and surface water is different, there has recently been an attempt to consider integration of surface and ground water management by the passage of LB108 in 1996. 1996 Neb. Laws 108. LB108 revised the Ground Water Management and Protection Act to consider the possibility of a hydrological connection between ground water and surface water and the fact that these connected waters may need to be managed differently than unconnected ground water and surface water. Stephen D. Mossman, 'Whiskey is for Drinkin' but Water is for Fightin' about': A First-Hand Account of Nebraska's Integrated Management of Ground and Surface Water Debate and the Passage of L.B. 108. 30 Creighton L. Rev. 67 (1996).

In areas where it is determined that ground water and surface water are hydrologically connected, LB108 created a cooperative process to determine if there may be a need to form an integrated ground water management area. Such determination as to whether an integrated management area may need to be established would be made by the applicable NRD and the Department. Mossman at 94. Studies and investigations would follow this determination and then a final decision would be made concerning what the relationship is between surface water and ground water. Id. at 94-95. The affected NRD would then decide what the consequences of this connection would be. Id. at 93-100. As a result, any action to manage ground water use must be adopted by the local NRD, not the Department.

Nothing in LB108 or the Ground Water Management and Protection Act permits the Department to regulate ground water on its own. The Department may however, require an NRD to establish a management area and formulate a joint action plan with the Department, but only when it is determined that hydrologically connected ground water and surface water are contributing, or likely to contribute to disputes over interstate compacts or decrees or with difficulties in fulfilling the provisions of other formal state contracts or agreements. Neb. Rev. Stat. §§ 46-656.50 through 46-656.60 (Cum. Supp. 2002). These statutes, however, are inapplicable to the case at hand because this case does not involve an interstate compact or decree, or a state contract or agreement.

Furthermore, the Legislature recently amended Nebraska's water law to address perceived problems with the current law and expand upon the enactment of LB108. LB962, which was passed by the Legislature this year, increases the authority and provides additional management tools for the Department and NRDs to cooperatively manage areas of hydrologically connected ground water and surface water. 2004 Neb. Laws 962. As with LB 108, however, nothing in LB962 grants the Department additional authority to independently regulate ground water. Notwithstanding the cooperative process, the separate and distinct methods of managing ground water and surface water as between the Department and NRDs has been maintained.

It is the Legislature that declares the public policy of the State of Nebraska through the enactment of statutes. Volquardson v. Hartford Ins. Co. of the Midwest, 264 Neb. 337, 345, 647 N.W.2d 599, 607 (2002). It is clear that the Legislature has not granted authority for the Department to regulate ground water uses. As the Department does not have authority to protect surface water appropriators from the effects of ground water irrigation, Central's Amended Complaint is without merit and the Court should uphold the decision of the Department.

II. RULINGS BY THE U.S. SUPREME COURT WITH REGARD TO HYDROLOGICALLY CONNECTED GROUND WATER AND INTERSTATE COMPACT ACCOUNTING DO NOT ALTER OR AFFECT NEBRASKA'S WATER LAW STRUCTURE.

As cited in Central's Brief, there have been numerous court cases involving interstate water compacts that involve the issue of whether to include hydrologically connected ground water into compact accounting. See e.g., Arizona v. California, 376 U.S. 340, 84 S.Ct. 755 (1964); Kansas v. Colorado, 514 U.S. 673,115 S.Ct. 1733 (1995); Kansas v. Nebraska, 530 U.S. 1272, 120 S.Ct. 2764 (2000); Nebraska v. Wyoming, 325 U.S. 589,65 S.Ct. 1332 (1945); Nebraska v. Wyoming, 507 U.S. 584, 113 S.Ct. 1689 (1993); Nebraska v. Wyoming, 515 U.S. 1, 115 S.Ct. 1933 (1995); Texas v. New Mexico, 446 U.S. 540, 100 S.Ct. 2911 (1980); Texas v. New Mexico, 462 U.S. 554, 103 S.Ct. 2558 (1983). However, none of these cases deal with an individual state's ability to pass laws and manage their water resources within their borders, independent of the other States' laws.

Interstate compacts simply set forth an apportionment of the available water resources between two or mores states. The court cases cited above, in part, involve whether ground water should be accounted for under the various water compacts. Although the United States Supreme Court has, in several instances, ruled that hydrologically connected ground water is to be included in the calculation of proper compact accounting, it has never made a determination with regard to how, or by whom, states are to regulate that ground water. The State of Nebraska has, time and again, stated that the Department has the authority to regulate surface water and surface water only, and that NRDs are responsible for the regulation of ground water. More importantly, the State of Nebraska has never argued, in any interstate water compact dispute, that ground water should be placed under the prior appropriation system in this State. The Department simply does not have the jurisdiction to grant the relief requested by Central, which is to place hydrologically connected ground water under the prior appropriation system and to shut down such ground water wells if they cause depletions to the surface water flows.

The Department is not arguing that some ground water wells are not hydrologically connected to surface water flows. Nor is the Department denying that hydrologically connected ground water wells can cause depletions to stream flows. The Department is simply stating that the Department does not have jurisdiction or authority, pursuant to Nebraska law, to regulate hydrologically connected ground water wells for the benefit of surface water appropriators. The authority to regulate hydrologically connected ground water lies with the NRDs. Neb. Rev. Stat. § 46-656 et seq., as amended by LB 962; see also, Bamford, 245 Neb. 299, 512N. W.2d. 642.

Central in its brief, and Professor Aiken in his unpublished law review article, have put forth their respective "opinions" and "theories" as to why hydrologically connected ground water should be placed under the prior appropriation system. They believe that doing so would be a sound public policy for the State. It is the Legislature, however, who is responsible for setting the State's public policy with regard to the administration of water resources and it is the Legislature who has chosen to administer surface water rights and ground water rights pursuant to its current statutory scheme. The Legislature has created a legal structure that includes the creation of NRDs to regulate ground water, the passage of the Nebraska Ground Water Management and Protection Act ("GWMPA"), Neb. Rev. Stat. § 46-656 et seq., to ensure proper management of ground water, and the passage of LB108 and LB962 to help resolve conflicts between surface water and ground water. If Nebraska's legal structure with regard to managing ground water and surface water as separately regulated resources were abandoned by this Court, there would simply be no need for the NRDs to regulate, for the GWMPA to set proper management, or for LB 108 or LB 962 to help resolve conflicts. Put simply, the Legislature is the only appropriate branch of Government to properly address the policy and management of ground water and surface water in Nebraska.

It is generally recognized that neither local management nor a workable long-term state water plan can be evolved by the process of private litigation which offers only a narrow perspective of problems throughout an area. Courts have neither the staff nor the expertise to formulate a scientifically sound water plan, and they have relatively few methods of initiating procedures to assure effective development or management. Courts can only react to cases before them. In short, the matter has passed beyond the competence of courts and future guidance must come from legislative leadership.

Harnsberger, et al., Groundwater: From Windmills to Comprehensive Public Management, 52 Neb. L. Rev. 179,240 (1973) (emphasis added). That leadership is being provided.

Major steps have been taken by the Department and NRDs to implement the Legislature's water policies, as set forth in the GWMPA, LB108 and LB962. The Department recently made preliminary and final determinations that portions of the Platte River Basin and the Republican River Basin are either fully or over-appropriated. Based upon these determinations, stays have been put in place on the drilling of new ground water wells and the issuance of new surface water appropriations. The Department and affected NRDs are currently in the process of creating Integrated Management Plans to jointly address conflicts between ground water and surface water and to provide for the proper regulation of the States water resources. In fact, the Department and one of the NRDs have already completed their Integrated Management Plan. The Legislature's water policies, as set forth by State statute, are being actively implemented by the Department and NRDs across the State.

It is not for the Department, or the Courts, to create water policy in Nebraska. It is the Department's responsibility to implement the laws that the Legislature enacts. Court decisions on interstate compact accounting do not alter Nebraska's water laws or the State's ability to grant, and limit, the jurisdiction of the Department. The Department does not have the authority to regulate ground water. The Court should therefore uphold the decision of the Director of the Department of Natural Resources in dismissing Central's Amended Complaint for lack of jurisdiction to grant the relief requested by Central.

CONCLUSION

Based on the above, the Department respectfully requests that the Court uphold the Department's Order dismissing Central's Amended Complaint for lack of jurisdiction to grant the relief requested.

NEBRASKA DEPARTMENT OF NATURAL RESOURCES, Appellee.
BY: JON BRUNING, #20351 Attorney General
BY: David D. Cookson, #18681
Justin D. Lavene, #22178
Assistant Attorney General
2115 State Capitol
Lincoln, NE 68509-8920
Tel: (402) 471-2682
dcookson@notes.state.ne.us
jlavene@notes.state.ne.us
Attorneys for Ap~ellee. Nebraska Department of Natural Resources.

PROOF OF SERVICE

STATE OF NEBRASKA        )
                                                ) ss.
COUNTY OF LANCASTER )

I, JUSTIN D. LAVENE, being first duly sworn, depose and state that two copies of the brief in the above-entitled case were served upon the parties by depositing said copies in the United States Mail, first class postage prepaid, addressed to counsel as follows:

Michael C. Klein
Anderson Klein Peterson and Swan
417 East Avenue
P.O. Box 133
Holdrege, Nebraska 68949

DATED this 17th day of December, 2004.