Journal of Energy Law and Policy Vol. 06 1985

Table of Contents: A Primer of Utah Water Law: Part II; An Assessment of Conservation Easements: One Method of Protecting Utah's Landscape; Implementing PURPA: The Selection of an Appropriate Methodology for Determining Avoided Costs in Utah; The Natural Gas Regulatory Dilemma: A Market Solution, Another Complex Compromise, or the Status Quo?; An Explanation of Louisiana Mineral Law and the Doctrine of Liberative Prescription: Policy Considerations for Common Law Jurisdictions?; Revenue Ruling 83-46: Draining the Pool-of Capital Doctrine; Bennion v. Utah State Board of Oil, Gas & Mining: Interpreting the Pooling Provisions of Utah's Oil and Gas Conservation Act; Summa Corp. v. California es rel. State Lands Commission: A New Limitation on Public Trust Easements; Silva v. Township of Ada: An Old Idea Whose Time has Come and Gone; Kearns-Tribune Corp. v. Public Service Commission: Tag-Line...You're Not It; Silkwood v. Kerr-McGee Corp.: Unpredicted Fallout; Uncertainty and Risk: A Public Policy Approach to Acid Rain; Behind the Acid Rain Facade; Acid Deposition Control Benefits as Problematic; Acid Rain: Corroding United States-Canadian Relations; Who'll Stop the Rain? One Solution to the Acid Rain Problem: An Analysis of Senate Bill 768; Using the Interstate Compact to Control Acid Deposition; Altruism, Politicians, and Polluters; Acid Deposition and H.R. 3400, Exercise in Funding and Futility

>^V"^ ARTICLES A Primer of Utah Water Law: Part II <f-^ Robert W. Swenson Air Assessment of Conservation Easements: j \ „.~ One Method of Protecting Utah's Landscape Judith S.H> Atherton Implementing PlJRPAi The Selection of an Appropriate Methodology for Determining Avoided Costs in Utah v The Natural Gas Regulatory Dilemma: A Market Solution, Another Complex Compromise, or the Status Quo? An Explanation of Louisiana Mineral Law and the Doctrine of Liberative Prescription: Policy , Considerations for Common Law Jurisdictions? -..X' •: -, , COMMENT ^ ^ Arine'-M. Stirba Kevin C. Higgins Scott A. Gutting Al H. Ringleb Debra Dobray ReDenue Ruting 83-46: Draining - the Pool-of-Capital Doctrine Annjanirie Freeman Livsey Is NOTES / / V w-£'. -> Vol. 6, No. 1 ., 1985 University of Utah College of Law We have a handle on America's energy needs. Northwest Energy Company, headquartered^ in Salt Lake City, Utah, is committed to helping the nation meet Its increasing energy requirements. Northwest Energy's largest subsidiary is Northwest Pipeline Corporation which owns and .,- operates a 6QQQ>mile transmission and gathering system thaf ._-, supplies natural gasib seven western states. _~-.^. Other Northwest^Energy subsidiaries are involved in exploringJor natural gas and oil in the western^states, and re­constructing/ a system to transport natural gas from JUaska's North .Slope. \r' \ /• _ Through all these efforts, Northwest Energy is making clear its. commitment to help the nation reach its energy goats. NORTHWEST ENERGY COMPANY ^P.O. BOX 1526 SALT LAKE CITY, UTAH 84110 UNIVERSITY OF UTAH COLLEGE OF LAW LL.M Energy Law Degree In 1981 the University of Utah 3oard of Regents approved the Col-ege of Law's request to offer an .L.M. - Energy Law Degree. This specialized post-graduate degree is he first of its kind in the United itates. Admission to the degree •rogram is open only to persons /ho will have received their first law legree (normally the J.D. Degree) at he time they start the program. The L.M. - Energy Law Degree is pri-larily a research degree designed >r the student with substantial ex-erience in energy, resources or en-ironment. The major requirement f the LL.M. program is completion f an original thesis in an area of the tudent's interest. Students may Iso take up to twelve credits of lassroom work in the Law School r other university departments, mere appropriate, students may articipate in research and teaching stivity at the Energy Law Center, he Judge Rulon W. Clark Fellow-lip offers substantial financial as-stance to selected LL.M. candi-ates. Information about the LL.M. ogram can be obtained by writing ie Energy Law Center, College of aw, University of Utah, Salt Lake ity, Utah 84112. ENERGY LAW CENTER '/••/ fa JOURNAL OF ENERGY LAW AND POLICY VOLUME 6 NO. 1 1985 The Journal of Energy Law and Policy is published semi-annually at the University of Utah College of Law, Salt Lake City, Utah, 84112. Views expressed are to be attributed to their authors and not to the Jour­nal, its editors, or the University of Utah. Copyright ® 1985 by the Journal of Energy Law and Policy. The owner of the copyright of each article published in this issue, unless expressly noted, grants permission for copies of that article to be made and used for educa­tional purposes by nonprofit educational institutions, provided that author and journal are identified, that proper notice of copyright is affixed to each copy of the article and that copies are distributed at or below cost. Other uses of articles or any use of items other than articles published in this is­sue, unless such use is granted by law, are subject to the copyright owner's rights and interests. Permission for these uses must be obtained from the copyright owner. ACKNOWLEDGEMENTS We give our sincere thanks to the University of Utah College of Law for its continued support. We also express our appreciation for the efforts of Professor Donald N. Zillman, Professor Frederick R. Anderson and the other members of the Law School Staff and Faculty who aided in providing the technical support to make the Journal possible. We would especially like to thank Mark Attwood, Editor-in-Chief of the Journal of Contemporary Law, and Kyle Treadway, Articles Editor of the Journal of Contemporary Law for their help and support. Printed in the United States of America by Darby Printing Co. n JOURNAL OF ENERGY LAW AND POLICY VOLUME 6 NO. 1 1985 The Journal of Energy Law and Policy welcomes submission of manu­scripts, notes of interest and other material. In addition to articles and notes, the Journal carefully considers such submissions as book reviews, in­cluding reviews of currently used casebooks; responses to controversial arti­cles appearing in the Journal and other legal periodicals; and any other written communication form that might be of interest to the readers of an energy law journal. Manuscripts, including footnotes, must be typed triple-spaced and sent to: Articles Editor, Journal of Energy Law and Policy, University of Utah College of Law, Salt Lake City, Utah 84112. Unsolicited manuscripts should be accompanied by a postage-prepaid, return-addressed envelope. All manu­scripts should conform to the UNIFORM SYSTEM OF CITATION (13th Ed.). SUBSCRIPTIONS Prices: United States and Possessions, $10.00 per year; foreign, $15.00 (postage included). If a subscription is to be discontinued at expiration, no­tice should be sent; otherwise, it will be renewed on an annual basis. Single issues may be obtained for $5.00 per copy; foreign $7.50. Reprints of articles are available. The Journal of Contemporary Law is also available from this office. Prices: United States and possessions, $10.00 per year; foreign, $15.00 per year. Make checks payable to Journal of Energy Law and Policy. in JOURNAL OF ENERGY LAW AND POLICY VOLUME 6 NO. 1 1985 1984-85 EDITORIAL BOARD EDITOR-IN-CHIEF Robert L. Tamietti MANAGING EDITOR J. Bryan Jackson ARTICLES EDITOR Karin Stone Hobbs ADMINISTRATIVE EDITOR Harry J. Ford III NOTE & COMMENT EDITORS Randall K. Gaylord Joe Hillegas Annjanine Freeman Livsey John H. Mabey, Jr. Leslie V.F. Silvestrini ASSOCIATE EDITORS John Waller Andrews John W. Hiscock Don Henry Magee Ronald C. Wolthuis STAFF James Birch James C. Brockmann Charles Scott Brown Julie A. Bryan Scott B. Clark Russell D. Culbertson Frederick S. Etheridge Jennifer L. Falk Shawn C. Ferrin M. Taylor Florence ' Victoria Hales Jean P. Hendrickson Lincoln W. Hobbs Patricia Schmid Holt Karen C. Host Jeffrey Hunt Beth Kadlec Geoffrey W. Leonard Christopher P. Mancini Casey K. McGarvey Rex W. Olsen Jeff E. Parker Daniel V. Peterson Kris Cameron Rainey Jaryl Rencher Roberta Riley Gladys Ritter Steven P. Rowe Gregory M. Seeley Martha Smith Stonebrook E. Russell Vetter ADVISOR Donald N. Zillman MANUSCRIPT SECRETARY Delys Ostlund IV CIRCULATION SECRETARY Cari Inoway JOURNAL OF ENERGY LAW AND POLICY VOLUME 6 NO. 1 1985 CONTENTS ARTICLES A Primer of Utah Water Law: Part II Robert W. Swenson 1 An Assessment of Conservation Easements: One Method of Protecting Utah's Landscape Judith S.H. Atherton 55 Implementing PURPA: The Selection of an Appropriate Methodology for Determining Avoided Costs in Utah Anne M. Stirba 91 Kevin C. Higgins Scott A. Gutting The Natural Gas Regulatory Dilemma: A Market Solution, Another Complex Compromise, or the Status Quo? Al H. Ringleb 107 An Explanation of Louisiana Mineral Law and the Doctrine of Liberative Prescription: Policy Considerations for Common Law Jurisdictions? Debra Dobray 153 COMMENT Revenue Ruling 83-46: Draining the Pool-of-Capital Doctrine Annjanine Freeman Livsey 199 NOTES Bennion v. Utah State Board of Oil, Gas & Mining; Interpreting the Pooling Provisions of Utah's Oil and Gas Conservation Act Russell D. Culbertson 219 Summa Corp. v. California ex rel. State Lands Commission: A New Limitation on Public Trust Easements Frederick S. Etheridge 235 Silva v. Township of Ada: An Old Idea Whose Time has Come and Gone Rex W. Olsen 253 Kearns-Tribune Corp. v. Public Service Commission: Tag-Line . . . You're Not It Roberta Riley 269 Silkwood v. Kerr-McGee Corp.: Unpredicted Fallout Leslie V. F. Silvestrini 281 VI FOREWORD The pages of this journal are often filled with discussions of the cost of natural resource exploitation and conservation. Legal scholars, practitioners and law stu­dents write frequently of energy production in terms of incremental costs, operat­ing costs, administrative costs and avoided costs. But the true cost of energy pro­duction cannot be measured merely in economic terms. The tragic fire which occurred in the Wilberg Mine at Orangeville, Utah served as a poignant reminder of the human costs inherent in energy production. The Board and Staff of the Journal of Energy Law and Policy dedicate this issue to the memory of the 27 people who perished in the Wilberg Mine fire, December 18, 1984. James Hamlin, 37, Price, Utah David Bocook, 41, Price, Utah Alex Poulos, 33, Price, Utah Vic Singolani, 33, Huntington, Utah Leroy Hersh, 60, East Carbon, Utah James Bertuzzi, 37, Castle Dale, Utah Phillip Bell, 28, Orangeville, Utah Lester Walls, Jr., 23, Huntington, Utah Ricci Camberlango, 26, Price, Utah Robert Christensen, 32, Castle Dale, Utah Nannette Wheeler, 33, Castle Dale, Utah Bert Bennett, 37, Filmore, Utah Brian Howard, 23, Castle Dale, Utah Randy Curry, 31, Castle Dale, Utah Barry Jacobs, 27, Castle Dale, Utah Joel Nevitt, 33, Price, Utah Gordon Conover, 24, Ferron, Utah Robert Ellis, 28, Ferron, Utah Curtis Carter, 29, Huntington, Utah Owen Curtis, 31, Price, Utah Gary Jennings, 33, Huntington, Utah John Wilsey, 31, Orangeville, Utah Lee Johansen, 35, Ferron, Utah Kelly Riddle, 28, Ferron, Utah John Waldoch, 22, Huntington, Utah Ray Snow, 33, Ferron, Utah Lynn Robinson, 28, Ferron, Utah vn A PRIMER OF UTAH WATER LAW: PART II Robert W. Swenson* V. THE PERMIT SYSTEM The nineteenth century characterization of appropriative water rights as property interests which are acquired simply by diverting water and using it for a beneficial purpose was discussed in Part I of this article.1 As there indicated, these "diligence rights" still play a role in contemporary Utah water law. Their importance in the total scheme was drastically diminished, however, by legislation in 1903.2 In that year, the Utah legislature adopted a new approach to the ap­propriation of water which has been attributed to Elwood Mead who was a territorial engineer and later the state engineer of Wyoming after statehood in 1890. He eventually became the Commissioner of Reclamation, and the lake at Hoover Dam now bears his name.3 The 1903 act expanded the duties of the office of the state engineer, creat­ed first in 1897, to include "general supervision of the waters of the State." It also provided that in the future the exclusive method of acquiring an appropriative water right was through a permit from the state engineer. The application of the act to groundwater after 1935 will be discussed in Part VI, below. The creation of an administrative office to supervise the allocation of water in Utah was doubtless a bold experiment at the turn of the century. Today the state engineer is the chief officer of the Division of Water Rights in the Department of Natural Resources.4 Although many other state agencies in Utah have functions which relate to water resources, the state engineer alone possesses enormous power in states where the supply of water is limited.6 The office performs a variety of functions, but its work in connection with appropriation permits and in adjudication of water rights is of special interest to us. * James I. Fair Professor of Law, University of Utah College of Law. 1 Swenson, A Primer of Utah Water Law: Part I, 5 J. ENERGY L. & POL'Y 165 (1984). 2 1903 Utah Laws, ch. 100, § 1 et seq. 3 Elwood Mead's classic book is IRRIGATION INSTITUTIONS (1903) (Arno Press reprint 1972). * UTAH CODE ANN. § 73-2-1.2 (1980). 6 For an interesting description of the state engineer's job in a neighboring state, see Blun­dell, In New Mexico, Water Is Valuable Resource - And So Is Water Boss, Wall St. J., May 1, 1980, at 1, col. 1. 2 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 For the year ending June 30, 1983, the office processed 1727 appli­cations of various types. This represented a slight decrease from the previous year due in part to the lagging national economy and the abundant water supply in that year.6 The applications are primarily for new appropriations, for changes in the place of diversion, use or purpose for which the water is used, and for various time extensions. The chart in the footnote below demonstrates that in fairly recent times there have been more applications for new permits than for changes.7 An interview with Stanley Green, Directing Appropriations Engineer in the Water Rights Division, revealed that no data is avail­able on the number of applications on file which have never been approved or rejected or the number of applications which have been approved but not as yet perfected. However, he suggested that from five to ten percent of the applications for extensions are rejected. Also he observed that the office "fairly often" rejects an earlier appli­cation in favor of one filed later in order that domestic well users may be given preference over large industrial or agricultural users in specific water basins. Exact information on some of the above points may be available later when the computer can be used more effec­tively. The Water Rights Division is beginning to put all water rights information into its computer's data base and plans to use the com­puter as an appropriation tool in the future. Thus, when an original application is filed, the computer should eventually be able to pro­vide information, for example, on the amount of water already appro­priated in a particular area. As to the state engineer's role in adjudi­cations, for the year ending June 30, 1982, 414 protest hearings were held,8 only a small percentage of which apparently were appealed to 8 1982-83 UTAH NAT. RESOURCES & ENERGY ANN. REP. 53. 7 The following chart covering two four-year periods and showing the various types of appli­cations filed with the state engineer was prepared by the author's research assistant, John H. Mabey, Jr. He also conducted the interview described in the text following this note. Average Average Percentage 1966-69 1973-76 Differences Applications to Appropriate Change Applications Other Applications Total Applications Applications Approved Applications Rejected Extension of Time Requests Advertised Extension Requests Extension Request Hearings 8 1981-82 UTAH NAT. RESOURCES & ENERGY ANN. REP. 77 598 289 52 940 882 107 1154 89 887 1267 501 262 2031 1376 58 1206 139 160 + 669 + 212 + 210 + 1091 + 494 -49 + 52 + 50 -727 (112%) (73%) (404%) (116%) (56%) (46%) (4.5%) (56%) (82%) 1985] UTAH WATER LAW 3 the courts. From the brief summary above of the work of the state engineer, it is clear that his role is central in the allocation of water resources under the Utah permit system. That role can best be understood by considering the basic characteristics of the permit system as it has evolved over the years in this state. The material which follows will discuss: (A) the nature of approved permits; (B) the statutory guide­lines which limit the discretion of the state engineer in approving or rejecting new applications for permits, change applications, and ap­plications for time extensions for perfecting approved permits; and (C) judicial review of the decisions of the state engineer. A. The Nature of Approved Permits Assuming that an application for a permit has been approved by the state engineer, exactly what does the holder of the permit have? The answer to that question is found in a rather surprising interpre­tation of our statutes by the Utah Supreme Court. To explain this observation, we must take a close look at the principal case, Little Cottonwood Water Co. v. Kimball,9 decided in 1930. There Kimball filed two applications with the state engineer: (1) for permission to appropriate 10 c.f.s.10 of water from Little Cottonwood Creek in Salt Lake County and (2) for permission to turn into the creek a similar amount of water which he proposed to bring from Utah Lake and also for permission to divert the same amount of water at a point above. The water company, a prior appropriator, protested both ap­plications on the ground that, as to the first, there was no unappro­priated water in the creek and that approval of the second applica­tion would deteriorate the quality of the water in the creek. The state engineer approved both applications, and the water company brought suit to review the decision in the district court pursuant to the statu­tory provision for judicial review.11 After the trial judge disapproved both applications, Kimball appealed to the Utah Supreme Court. The decision of the trial court to reject the second application to exchange water was upheld on the ground that it would violate the statute authorizing such exchanges because there was evidence that the quality of the water would deteriorate. The Utah Supreme Court reversed the trial court's decision on the first application to appropri­ate. This portion of the opinion is more important for our purposes. 9 76 Utah 243, 289 P. 116 (1930). 10 C.f.s. means cubic feet per second, which is a standard measure for the flow of water. See UTAH CODE ANN. § 73-1-2 (1980). 11 UTAH CODE ANN. § 73-3-14 (1980). 4 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 The 1919 statute contained a general mandate that the state engineer "shall approve all applications where the proposed use will not impair the value of existing rights, or will not interfere with the more beneficial use of said water . . . ."12 The last sentence in the section outlined in a very positive way when the state engineer must reject an application: Where there is no unappropriated water in the proposed source of supply, or where the proposed use will conflict with prior applica­tions or existing rights, or where the approval of such application would in the opinion of the State Engineer interfere with the more beneficial use for irrigation, domestic or culinary purposes, stock wa­tering, power or mining development, manufacturing, or would prove detrimental to the public welfare, it shall be the duty of the State Engineer to reject such application.13 The protester (a prior appropriator) claimed that in fact there was no unappropriated water at the source. The issue then was simply this: Must the state engineer make an affirmative, independent deter­mination that there is unappropriated water before he grants a per­mit? The majority of the court (two justices dissenting on this part of the opinion) felt that this need not be done. The approval of the ap­plication is merely a "preliminary step"; it gives the holder of the permit simply an inchoate right which he must then perfect and, if need be, he must fight it out with existing appropriators in the courts. Or, as one writer put it, he has merely a "hunting license."14 Over the years my students who have thought about the problem simply cannot comprehend why the court would reach this conclu­sion. Their argument is that the rationale encourages over-appropria­tion of an already scarce resource and that in view of the affirmative wording of the sentence quoted above, the decision is wrong as a mat­ter of statutory interpretation. Whether or not one agrees with the conclusion, Chief Justice Cher­ry's opinion for the majority was carefully drafted. He outlined the court's dilemma as follows: On the one hand, "owners of genuine es­tablished rights should not be harassed and disturbed in the enjoy­ment of their rights by groundless claims of later applicants." On the other hand, the statute "ought not to be a shield of protection to prior appropriators who divert water in excess of their reasonable ne- 12 1919 Utah Laws, ch. 67, § 48 at 191-92. 13 Id. 14 F. TRELEASE, WATER LAW CASES AND MATERIALS 140 (3d ed. 1979). 1985] UTAH WATER LAW 5 cessities. . . ."16 He felt also that the determination of existing rights is peculiarly a judicial rather than an administrative function. With that conclusion, some will disagree. He buttressed his conclusion by a number of specific reasons: (1) an approved permit gives the appli­cant standing to sue other appropriators; (2) junior appropriations should be encouraged because maximum use of this valuable resource is a desired goal; and (3) the office of the state engineer lacks the facilities necessary to determine the extent of existing rights except in a very general way. The last consideration was said to be particu­larly true in this case because variations in the flow of Little Cotton­wood Creek made predictions as to the amount of water available quite difficult.16 These were perhaps real considerations in 1930 when the case was decided. That the state engineer is not equipped to make these decisions now is not quite so clear. The Utah court has not, however, departed from the inchoate-right rationale of the per­mit, and, as will be noted below, that rationale has been an important consideration in the cases dealing with the scope of judicial review. B. Statutory Guidelines Limiting the Discretion of the State Engineer 1. New applications to appropriate-Section 73-3-8 of the Utah Code outlines the guidelines for the state engineer's approval or re­jection of an application to appropriate water. The 1919 statute, re­ferred to above in connection with the Kimball case, has been re­vised, and the guidelines are now listed as considerations requiring approval. An unusual proviso at the end of the paragraph relates to rejection of applications. Thus, it is now said that it shall be the duty of the state engineer to approve an application if: (a) There is unappropriated water in the proposed source.11 This must be read in light of Little Cottonwood Water Co. v. Kimball, discussed above.18 The state engineer need merely find that there are reasonable grounds for believing that there may be unappropriated water at the source. (b) The proposed use will not impair existing rights . . .19 (again, the state engineer may approve an application to appropriate water if there is a reasonable basis for believing that earlier appropriators will not be prejudiced) or interfere with the more beneficial use of the 16 289 P. at 117. 18 Id. at 118-19. 17 UTAH CODE ANN. § 73-3-8(1) (1980). 18 See supra note 9 and accompanying text. 19 UTAH CODE ANN. § 73-3-8(2) (1980). 6 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 water. . . 20 This provision will be discussed below in connection with Tanner v. Bacon.21 (c) The proposed plan is physically and economically feasible . . . and would not prove detrimental to the public welfare To the great amusement of some critics of federal reclamation, the require­ment of physical and economic feasibility is qualified by the following phrase: "unless the application is filed by the United States Bureau of Reclamation . . . ."23 In other words, Bureau projects cannot be expected to be economically feasible anyway? If this is the correct interpretation, why should a private investor be required to prove ec­onomic feasibility when the United States is not expected to do so? I have never seen a case which has questioned this uneven treatment until very recently.24 Under a New Mexico statute, an appropriator is required to obtain the permission of the state engineer for a change in the method of water storage. However, if a federal reclamation project is involved, the state engineer's approval is not required. This was claimed to be a denial of equal protection under the 14th amend­ment to the federal constitution to those appropriators who are not part of the federal reclamation project. The New Mexico Supreme Court, without much discussion, found that there was nothing arbi­trary or unreasonable in the different treatment.26 In one Utah case, the court considered the requirement of eco­nomic feasibility by a private appropriator.26 The state engineer testi­fied that he merely determined whether there was a reasonable probability that the proposed dam could be built, in which case it was deemed to be economically feasible. The state engineer need not purport to make a determination that the dam would be feasible. (d) The applicant has the financial ability to complete the pro­posed works and the application was filed in good faith and not for purposes of speculation or monopoly.27 The question whether an ap­plication is for purposes of speculation or monopoly has not come before the court very often. In one case, the Utah court found that there was no evidence that the application was for substantially more water than was essential for the purpose for which the water was to 20 Id. 21 See infra note 31 and accompanying text. 22 UTAH CODE ANN. § 73-3-8(3) (1980). 23 Id. 24 City of Raton v. Vermejo Conservancy Dist., 101 N.M. 95, 678 P.2d 1170 (1984). 25 Id. at 1174-75. 26 Bullock v. Hanks, 22 Utah 2d 308, 452 P.2d 866 (1969). 27 UTAH CODE ANN. § 73-3-8(4) (1980). 1985] UTAH WATER LAW 7 be used, a power plant.28 The court also held that the application was made in good faith, was not intended to benefit the applicant person­ally and was not, therefore, speculative. To summarize, if there is reason to believe that the above four pre­requisites are satisfied, the state engineer must approve the applica­tion. To this general mandate, however, the section adds a rather confusing proviso. The statute states that if, because of information in the state engineer's possession, obtained either by his own investi­gation or otherwise, he has reason to believe that certain circum­stances may exist, he must withhold his approval or rejection for fur­ther investigation. After investigation, he may decide to reject the application.29 Circumstances meriting rejection include a reason to believe that the application to appropriate will: (1) interfere with the water's more beneficial use for irrigation, domestic or culinary, stock watering, power or mining development, or manufacturing; (2) unrea­sonably affect public recreation or the natural stream environment; or (3) prove detrimental to the public welfare.30 The proviso raises the general problem of when the state engineer may reject an application if he feels that it would not be in the public interest to approve it. The leading case in the Western states is Tan­ner v. Bacon,31 in which the Utah court upheld the rejection of an application to appropriate filed by a private investor for power pur­poses in favor of an application filed eleven years later for the use of the water in connection with a federal reclamation project, Deer Creek reservoir. The court felt that the statute gives the state engi­neer this authority although it was obviously concerned about whether the order of filing gives the applicant some priority. The court felt that filing dates could be disregarded among competing ap­plications if the public welfare or interest required approval of a later application because it is for a "more beneficial" use. Moreover, pre­ferred beneficial uses are not necessarily to be ranked in the order 28 Whitmore v. Welch, 114 Utah 578, 201 P.2d 954 (1949); cf. State Road Comm'n v. Wil­liams, 22 Utah 2d 301, 452 P.2d 548 (1969) (In a condemnation proceeding, the jury was per­mitted to place a valuation on the land's potential for development through irrigation based on the fact that an application for a water permit had been filed and approved before the condem­nation. The court held that there was no evidence that the application was for speculation. It is interesting to note in this case that the state engineer testified that among applications tenta­tively designated for approval, only 1% were thereafter disapproved by his office). 29 UTAH CODE ANN. § 73-3-8 (1980). 30 Id. 31 103 Utah 494, 136 P.2d 957 (1943). In Clark v. Hansen, 631 P.2d 914 (Utah 1981), the question whether the state engineer must consider applications in the order of their filing was raised but not passed on by the court because the issue was premature in the context of that case. 8 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 stated in the proviso. Here, the use for reclamation was thought to be more beneficial than the use for power purposes by a private appro­priator. What is in the public interest is not otherwise spelled out, and the state engineer has considerable discretion in approving one use over another. He might, for example, decide to protect instream values or to prefer the use of the water for public recreation over a use for irrigation, power, etc. The adoption of specific rules for deter­mining what is in the public interest will be discussed below.32 An important caveat qualifying the Tanner decision was offered by Chief Justice Wolfe in his concurring opinion: I assume that the State Engineer could not reject an application on the ground that if approved it would 'prove detrimental to the pub­lic welfare' because in his mind he conceived some ultimate or re­mote public project which would need the water. A farsighted per­son with imagination and bold conceptions may visualize projects which in the future may be most beneficial to the state.33 Chief Justice Wolfe would categorically exclude the consideration of possible future uses as a basis for rejecting an application, at least in the absence of a showing that a state water plan for the future had been formulated by the agency. The Utah Supreme Court apparently has not sustained this position. In addition to the consideration of the "public interest" in approv­ing or rejecting applications for permits, it should be noted that in the future the Utah court may be influenced by California's broad acceptance of the "public trust" doctrine. One recent decision ac­knowledges that water in Utah is held by the state in trust for the public,34 and one of the earlier California cases is cited with ap­proval. 36 Briefly, the public trust doctrine means that the state has the power to exercise continuous supervision over navigable waters and the underlying lands. Originally it evolved as a basis for protect­ing lakes and their tributaries as well. The values protected under the doctrine include environmental and recreational values as well as the traditional beneficial uses of water. That there may be a collision with historic notions regarding appropriative water rights was appar- 32 See infra note 50 and accompanying text. 33 136 P.2d at 964. J.J.N.P. Co. v. State Div. of Wildlife Resources, 655 P.2d 1133, 1136 (Utah 1982)- -The State regulates the use of the water, in effect, as trustee for the benefit of the people . . . and the State must therefore assume the responsibility of allocating the use of water for the benefit and welfare of the people of the State as a whole." 38 Marks v. Whitney, 6 Cal. 3d 251, 98 Cal. Rptr. 790, 491 P 2d 374 (1971) 1985] UTAH WATER LAW 9 ent in a recent California case.36 There the City of Los Angeles had enjoyed since 1940 a permit to use for municipal purposes virtually the entire volume of four fresh-water streams which flowed into Mono Lake. Over the years, the lake level dropped, and the scenic beauty and the ecological values of the lake were drastically imper­iled. The National Audubon Society sued to enjoin these diversions. The court held that the public trust concept is not subsumed in the California system of water rights.37 Rather both concepts function as parts of an integrated system of water law. The result is that even vested appropriative water rights are subject to the public trust, and their allocation may be reconsidered in the light of their effect on the lake's environment.38 2. Change applications-The Utah statute39 dealing with "change applications" is not as explicit in setting up guidelines for the state engineer as is the section dealing with original applications to appropriate water. The application to change the place of diver­sion or use or to change the purpose for which the water is used can­not be approved if it impairs vested rights without just compensa­tion. No case appears to have considered the just compensation provision, and it is doubtful that the state engineer has ever ap­proved a change application on condition that specified compensation be paid to one whose water right has in some way been impaired. The statute does, however, expressly permit approval, if otherwise proper, on condition that conflicting rights be acquired. The important initial determination by the state engineer is thus whether there is reason to believe that vested rights will be impaired. He does not purport to adjudicate the existence or nonexistence of these vested rights.40 The 36 National Audubon Soc'y v. Superior Court of Alpine County, 33 Cal. 3d 419, 189 Cal. Rptr. 346, 658 P.2d 709 (1983), cert, denied 104 S. Ct. 413 (1983). See also Note, National Aubudon Society v. Superior Court: A Watershed Case Integrating the Public Trust Doctrine and Cali­fornia Water Law, 5 J. ENERGY L. POL'Y 121 (1983). 37 Had this been the case, the appropriation could have been attacked only by a showing that the use of the water by the city was no longer beneficial. That domestic or municipal uses are beneficial uses under the appropriation system was not doubted. 38 Much of the opinion is devoted to the plaintiff's remedies. It was held that the courts and the water resources board have concurrent jurisdiction to consider the reallocation question, although the courts may defer the matter to the board for an initial determination if this is desirable because of the complexity of the issues in the case. Recently it has been held that California may not assert a public trust easement in land patented by the federal government under an 1851 federal act which implemented the terms of the treaty of Guadalupe Hidalgo in 1848. No claim to such an easement had been made by California at the time the patent was issued. Summa Corp. v. California ex rel. State Lands Comm'n, 104 S. Ct. 1751 (1984). 39 UTAH CODE ANN. § 73-3-3 (1980). *° Whitmore v. Murray City, 107 Utah 445, 154 P.2d 748 (1944). 10 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 vested right which is alleged to be impaired could, of course, be the right of either a junior or senior appropriator. The principal Utah case on what constitutes an impairment is the East Bench case.41 In that case, upstream appropriators on a natural watercourse wished to change from direct irrigation techniques to the storage of water in a dam which they intended to construct. The court properly held that the upstream appropriators could not consume more water under the change application than they were actually entitled to under their appropriations. The case then dealt primarily with the actual scope of their water rights.42 Downstream water users were entitled to all the water over that amount - water which they had been customa­rily receiving over the years. A lesser amount would constitute an im­pairment. 43 In cases of this type, the function of the state engineer is simply to determine whether there is reason to believe that vested rights might be impaired. If none exists, he must grant the applica­tion. There are no other guidelines, and there is no indication in the statute that he must take into consideration the public interest before granting the application. In addition the rights of downstream appropriators were said to be matters of common law rather than de­rived solely from the change-application statute.44 Whether the com- 41 East Bench Irrigation Co. v. Deseret Irrigation Co., 2 Utah 2d 170, 271 P.2d 449 (1954), reh'g granted, 5 Utah 2d 235, 300 P.2d 603 (1956). 42 On the scope of the upstream appropriator's water rights, the court held: (1) The appli­cants are not absolutely entitled to the full amount of their decreed rights in a general adjudi­cation where the evidence showed that they were using less over the years. This point is dis­cussed, infra, note 140 and accompanying text; (2) The applicants are entitled to claim water which could be saved by eliminating winter-flooding and instead storing that amount for direct irrigation. In effect, the court sanctioned a wasteful use of water. This is discussed in Part I of this article supra note 1, at 180; and (3) The applicants were not entitled to claim a credit for "gratuitous" waters, i.e., water which they could have used under the original decree by plant­ing crops requiring more water, by using more water on irrigated land, or by cultivating land not presently being irrigated. On this point, the court distinguished earlier cases such as Lasson v. Seely, 120 Utah 679, 238 P.2d 418, 422 (1951), where it had been stated: "While the water is under his dominion and control, he is entitled to use it on his own land in such beneficial manner as he sees fit, or he may use it or any part thereof on other land under his control, or he may lease to others the right to use such water . . . " The Lasson case, it was said, did not deal with appropriators on a natural watercourse. East Bench, 271 P.2d at 456. In the latter situation, the lower user is entitled to rely upon water received over the years and acquires a vested right that upper users will not increase the amount of water actually used by making a change application. 43 A fact situation similar to East Bench went up again in Piute Res. & Irrigation Co. v. West Panguitch Irrigation & Res. Co., 13 Utah 2d 6, 367 P.2d 855 (1962). This time the court held that a change from winter flooding to storage in a reservoir would deprive lower users of some water, and the application was therefore denied. By way of dictum, it was suggested that even a de minimus reduction would impair vested rights. Piute Res., 367 P.2d at 858. Cf. American Fork Irrigation Co. v. Linke, 121 Utah 90, 239 P.2d 188 (1951). 44 East Bench, 271 P.2d at 455. 1985] UTAH WATER LAW 11 mon law rules would require a consideration of the public interest in the change was not indicated in the opinion. 3. Time extensions-The state engineer has statutory authority to grant a number of different kinds of time extensions. There are few statutory guidelines limiting his discretion to grant extensions. If an original application is granted, the state engineer fixes the time for completion of the proposed diversion, and the applicant is re­quired to proceed with diligence to perfect his appropriation. The ap­plication lapses if the appropriation is not perfected within the pre­scribed period.46 Extensions, not to exceed fifty years from the date the application was approved, may be granted on a showing of dili­gence or reasonable cause for delay.46 Municipalities or other public agencies meet the requirement of due diligence simply by showing that the approved application is being held for reasonable future re­quirements of the public.47 Where diversion facilities have been con­structed, extensions may be granted beyond the fifty-year period in order to prove the actual use of the water. Extensions may also be granted for term permits (for industrial, power, mining or manufac­turing purposes) on a showing that the purpose of the original appli­cation has not been satisfied and that the need for the extension is not the result of any default or neglect by the applicant.48 Time ex­tensions to resume the use of water in order to avoid forfeiture for non-use may be granted for periods no longer than five years.49 4. Administrative Rules to Supplement Statutory Guide­lines- Under his rule-making authority,60 the state engineer adopted in 1974 rules which were primarily procedural for handling and dis­posing of various agency proceedings. Shortly thereafter, a number of organizations and individuals interested primarily in environmental matters petitioned the state engineer to promulgate additional rules which, in a general way, would require him to give greater considera- 45 Mosby Irrigation Co. v. Criddle, 11 Utah 2d 41, 354 P.2d 848 (1960); UTAH CODE ANN. § 73-3-17 (1980). 46 UTAH CODE ANN. § 73-3-12(1) (1980). Financial inability to complete the project is not an excuse for delay. Carbon Canal Co. v. Sanpete Water Users Ass'n, 19 Utah 2d 6, 425 P.2d 405, 409-10 (1967). 47 UTAH CODE ANN. § 73-3-12(1) (1980). This is thought to be necessary because of the cost involved in large water projects financed by municipalities or other public agencies and because these projects could not be undertaken without some assurance that water would be available. 48 UTAH CODE ANN. § 73-3-8 (1980). 49 UTAH CODE ANN. § 73-1-4 (1980). 50 Utah Administrative Rule Making Act, UTAH CODE ANN. §§ 63-46-1 & 63-46-13 (1978 & Supp. 1983). The rules provide that a motion for a rehearing may be filed within twenty days after a decision by the state engineer. For good cause, the 20-day period may be extended. This rule was upheld in Clark v. Hansen, 631 P.2d 914 (Utah 1981). 12 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 tion to matters of public interest. These public interest considera­tions were to be applied not only to original applications to appropri­ate water but also to change applications, time extensions, and to the state engineer's discretionary decisions o'n due diligence in connec­tion with approved-but-unperfected applications. Space does not per­mit a detailed description of the proposed rules. They required the application of a broad range of environmental considerations; undue weight would not be given to priority of filing;61 and environmental matters would be placed on the same level as economic matters. The proposals would have required the state engineer to implement the statutory standards in allocating water resources by taking into ac­count policies and regulations of federal agencies and other state agencies which might be involved in a proposed use of water. For example, the state engineer would be required to consider federal air and water quality standards as well as other federal and state regula­tions relating to the environment. The petition was denied by the state engineer on April 4, 1983,62 in a lengthy opinion presumably prepared with the assistance of the at­torney general's office. The opinion rejected the proposed rules as to all of the types of proceedings mentioned above. As to original appli­cations under Section 78-3-8, the state engineer, although sympa­thetic to considering matters of public interest, felt that some of the proposed rules would enlarge the scope of the statute, a matter be­yond his authority. It was observed also that the state legislature had on four occasions refused to amend the statute to include public in­terest criteria in the statutory guidelines. Also, he felt that such ap­plications are best considered on a case-by-case basis and that it would be virtually impossible as an administrative matter to consider the entire range of problems, present and future, which might be in­volved in a particular application. As to the requirement of diligence in perfecting approved applications, the state engineer regarded this as primarily involving fact determinations which could not be effec­tively handled by administrative rules. As to change applications, it was pointed out that the sole question before the state engineer was the effect on existing vested rights which was primarily a hydrologic 51 See Tanner v. Bacon, supra note 31. 52 The opinion is filed in the state archives. It was criticized by columnist Joseph M. Bauman in Utah Water Politics Outdated, Deseret News, Apr. 29, 1983, at A5, col. 4. He observed: "To broaden the scope of the state engineer's ability to protect the environment would not be harm­ful. To narrowly define the regulations, ignoring the wider consequences of proposed uses, could eventually be disastrous . . . . After all, the streams and rivers belong to all citizens, not just a few ranchers, farmers and industrialists." Id. at A5, col. 6. 1985] UTAH WATER LAW 13 determination. Further, the statute on change applications does not authorize rejection of an application solely on the basis of public in­terest considerations. The opinion also contained a number of general observations justifying the decision. The state engineer felt that it was neither proper nor appropriate for his office, given its limited functions, to assure compliance with all applicable state and federal laws. He suggested that the division did not have the professional personnel required to implement all the proposed rules. To the ex­tent that the proposal called for more extensive rules on discovery and other pre-hearing matters, it was observed that any procedural irregularities could be effectively corrected in the de novo judicial re­view provided for in the Utah statutes.53 C. Judicial Review Any person aggrieved by a decision of the state engineer may within sixty days after receiving notice obtain plenary review of the decision by bringing a civil action in the district court.64 Venue is placed in the county where the stream or water source, or some part of it, is located. The effect of the review is to stay further proceedings before the state engineer. The statute expressly provides that the hearing in the district court shall proceed as a trial de novo and shall 63 Apparently some effort is currently being made to obtain rules and new legislation relating to instream values. See Bauman, Interruption of Stream Flows a Utah Environmental Hazard, Deseret News, July 19, 1984, at A l l , col. 3. Also, a study is currently underway on local ground­water pollution problems and on the possiblity of promulgating rules in this area. Woolf, Vitro Tailings Spawned State Groundwater Rules, Salt Lake Tribune, May 21, 1984, at Bl, col. 2. See also a series of articles by Bauman, Utah's Full of Potential for Poisoning Groundwater, Deseret News, July 30, 1984, at Bl, col. 6; Water Toxins Seeping into Dangerous Future, July 31, 1984, at Bl, col. 1; Water: Utah Needs to Protect Underground Resource, Aug. 1, 1984, at Bl, col. 1. M UTAH CODE ANN. § 73-3-14 (1980 & Supp. 1981). That the 60-day provision may operate rather harshly was evident in Provo City v. Lambert, 545 P. 2d 185 (Utah 1976). There the state engineer issued a certificate of appropriation in 1949 permitting Provo City to store 321.78 acre feet of water in a particular reservoir. Over the years, the Provo River commissioner (as agent of the state engineer) delivered for storage as much as 784 acre feet when available. In 1969 the state engineer reduced the amount to the City to the quantity specified in the certificate. Provo City then brought suit against the state engineer, claiming that the amount specified in the certificate was based upon a mutual mistake and that because it had been delivering a much larger quantity of water over the years, the state engineer should be estopped to invoke the terms of the certificate. The majority held that the statutorily authorized review is "the only method provided for by the legislature" and 23 years after the decision of the state engineer is too late to review his decision. Two dissenting judges felt, however, that the city should be given the opportunity to argue for reformation on the ground of mutual mistake. Id. at 187. Judicial review is premature where the state engineer has granted a motion for rehearing. Clark v. Hansen, 631 P.2d 914 (Utah 1981). 14 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 be tried to the court as other equitable actions.66 The action may be dismissed on grounds provided in Rule 41 of the Utah Rules of Civil Procedure66 as well as for failure to prosecute the action with diligence.67 The nature of the judicial trial de novo on appeal from a decision of the state engineer has been the subject of considerable litigation in Utah over the years. A trial de novo means essentially that the par­ties start anew. The record before the state engineer is not transmit­ted to the district court on appeal; the parties are not limited to the evidence presented to the state engineer;68 the court is restricted to a consideration of, and must make its own determination on, the issues which were or could have been determined under the Utah statutes by the state engineer.59 These observations do not, however, appear 66 UTAH CODE ANN. § 73-3-15 (1980). 68 UTAH CODE ANN. Vol. 9B, UTAH R. OF CIV. P., Rule 41(b) at 175 (1977 & Supp. 1983). 87 Under UTAH CODE ANN. § 73-3-15 (1980), the failure to prosecute the suit to final judg­ment within two years after filing (or within three years if an appeal is taken to the Supreme Court) shall constitute lack of diligence as a matter of law. In Provo City v. Hansen, 601 P.2d 141 (Utah 1979), the court held that dismissal after the two-year period expires is mandatory and must be made with prejudice. See also Dansie v. Lambert, 542 P.2d 742 (Utah 1975) (dis­missal on the motion of private defendants applies to the state engineer as well even though he did not formally join in the motion). In Provo City, two concurring judges felt, however, that there may be circumstances in which the delay would be beyond the control of the party and they were, therefore, reluctant to suggest that dismissal should be regarded as mandatory in all cases. They did not feel that such extenuating circumstances existed in this case. Provo City, 601 P.2d at 144. More recently, the court has held that failure to prosecute within the two-year period is not the sole ground for dismissal. In a proper case, the court may dismiss during the two-year period under Rule 41 of the Rules of Civil Procedure, and this is largely within the discretion of the court. Wilson v. Lambert, 613 P.2d 765 (Utah 1980). The court expressly re­frained from considering whether mandatory dismissal after the two-year period might be inva­lid on constitutional grounds. 08 Not very many cases have dealt with how the district court is to treat the evidence on appeal. That it is to make an independent determination on the evidence seems clear. In Shields v. Dry Creek Irrigation Co., 12 Utah 2d 98, 363 P.2d 82 (1961), it was stated that the court must hear "all pertinent evidence" to determine whether an applicant has complied with all the requirements of the statute in an original application to appropriate. It could, therefore, consider the requirement of economic feasibility even though this was not the basis for the' state engineer's decision. Id. at 84. Also in American Fork Irrigation Co. v. Linke, 121 Utah 90, 239 P.2d 188 (1951), the court pointed out that the judiciary is the sole arbiter of the law and the facts on appeal in water cases, and while great deference should be given to the state engi­neer's conclusions, the court is "bound neither by the nature, extent or content of his decision, nor as to the character, quantum or quality of proof, evidence or data adduced at hearings before him or accumulated independently by his office." American Fork, 239 P 2d at 191 6e What issues may be determined by the state engineer? Certainly he may determine all issues expressly delegated to him by statute. It is generally said that he may not determine the priorities among existing appropriators, for example. That is deemed to be a judicial question. In Proyo City Corp. v. Lambert, 28 Utah 2d 194, 499 P.2d 1296 (1972), the state engineer instructed a river commissioner to refuse to deliver water to the city until such time as it could be used for a non-consumptive purpose. The purpose for which the water was to be used was 1985] UTAH WATER LAW 15 to answer all questions. The whole area was reviewed recently by the Utah court in Crafts v. Hansen.60 Because two justices dissented on the ground that the court was making new law, it is perhaps proper to start with this decision rather than to examine in detail earlier cases. In Crafts, a number of appropriators filed change applications with the state engineer to obtain permission to use their water for indus­trial and power purposes rather than for its historical irrigation and stock watering use.61 Under Utah's change-application statute, the state engineer is merely required to determine whether vested rights might be affected by the change. He approved the applications sub­ject to certain conditions designed to protect these rights. At the trial on appeal, the protesters as well as the applicants submitted affida­vits by experts (water engineers) whose opinions were for the most part diametrically opposed on the effect of the changes on holders of vested rights. The trial court granted a summary judgment upholding the state engineer's ruling. The affidavits of the applicants alone were held sufficient to show that the state engineer's decision rested on reasonable grounds and that the changes could be made without im­pairing vested rights of other appropriators. The Supreme Court re­versed, holding that under established rules of procedure, a summary judgment should not be granted where a genuine issue of material fact is raised by the evidence. The court disclaimed any intention to overrule the "reason-to-believe" test advanced in many earlier cases.62 Instead, once the change applicants have made out a prima facie case based on presently existing evidence that there is reason to believe that the changes can be made, the protesters then have the burden of going forward with the evidence to show that vested rights would be impaired. The resulting factual dispute in this case pre­cluded the use of summary judgment by the trier of the facts. The majority also cautioned that its decision did not mean that "there claimed to have been specified in a general adjudication in 1921. The decree was, however, thought to be ambiguous, and the court remanded the case to the district court with the recom­mendation that the matter be referred to the state engineer for a determination of the purpose for which the water had been used over the years. Ellett, J., dissented on the ground that the state engineer had no statutory authority to determine the scope of adjudicated rights. Id. at 1298. 80 667 P.2d 1068 (Utah 1983). The cases have been settled. See E. Clyde, Current Develop­ment in Water Law, WATER LAW IN THE 80'S, Utah State Bar Continuing Legal Education 82 (1984). 81 The case involved a sale of water rights to the Intermountain Power Project. See Part I of this article, 5 J. ENERGY L. & POL'Y 165 n.2. 62 See infra note 65. 16 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 must be an indefinite delay of the determination of this matter until every conceivable piece of information and data is collected. Ine decision is correct if the appeal is to be truly a trial de novo. Justice Oaks, in his dissenting opinion,'felt that if the affidavits of the applicants alone indicated that there was reason to believe that vested rights might not be impaired, contradictory testimony from the affidavits of the protesters could be ignored, and the decision of the state engineer should be upheld. The only issue on appeal was whether the state engineer had reason to believe the change could be made.64 If the theory of the dissent was accepted, a protestor could not use the statutory right of appeal if any evidence existed which might justify the state engineer's decision. Instead, he would be com­pelled to wait until the proposed changes are made and then bring suit against the applicant to establish that his rights under the ap­propriation system of water law were being violated. The dissent clearly contemplates a second adversary proceeding for a final adjudi­cation of the case on the merits. In final analysis, it depends entirely on whether it is desirable to postpone any adjudication on the merits until the change has been perfected. It is true that it may be difficult for protesters to show damage until that time. The dissent correctly suggests that there are many Utah cases which lend themselves to this interpretation in other administrative determinations as well as change applications.65 Thus, in an initial application to appropriate water, the court, on ap­peal, would determine whether the state engineer had reason to be­lieve that there is unappropriated water at the source. If so, the deci­sion would be affirmed, and the parties would be left to fight it out later in a second adversary proceeding in the courts. This is the old "hunting license" approach advocated fifty-four years ago by the Utah Supreme Court. This has been discussed above,66 and it is im- 63 667 P.2d at 1081. 84 Id. at 1082 (Oaks, J., dissenting). 88 Among the cases relied upon by Justice Oaks is the first decision in United States v. Dist. Court of Fourth Judicial Dist., 121 Utah 1, 238 P.2d 1132, 1137 (1951), reh'g denied, 121 Utah 18, 242 P.2d 774 (1952), where Justice Wade stated that in change applications "the law pro­vides a period of experimentation during which ways and means may be sought to make benefi­cial use of more water under the application before the rights of the parties are finally adjudi­cated." A number of other cases adopt the same interpretation of the reason-to-believe rule. See, e.g., Eardley v. Terry, 94 Utah 367, 77 P.2d 362 (1938); Whitmore v. Murray City, 107 Utah 445, 154 P.2d 748 (1944); Lehi Irrigation Co. v. Jones, 115 Utah 136, 202 P.2d 892 (1949); Salt Lake City v. Boundary Springs Water Users Ass'n, 2 Utah 2d 141, 270 P.2d 453 (1954); Bullock v. Tracy, 4 Utah 2d 370, 294 P.2d 707 (1956); Piute Res. & Irrigation Co. v. West Panguitch Irrigation & Res. Co., 13 Utah 2d 6, 367 P.2d 855 (1962). 88 See supra note 14. 1985] UTAH WATER LAW 17 portant here only to observe that the inchoate-right concept has in­fluenced the Utah court's decisions on the scope of judicial review. The opinion in the Crafts case purported to deal only with the pro­cedure in the district court. The dissent felt that Crafts controls the procedure before the state engineer as well and that the case "telescopes an interlocutory administrative determination on a change application into a mini-adjudication of vested rights."67 But the answer again is: Should not the state engineer make his determi­nation on all the evidence if a protest is to have any meaning at all? Even assuming he is still not required to do so, that would not neces­sarily justify applying the same rule on appeal in a trial de novo. A ramification of this basic problem arose earlier in 1977 in Dan­iels Irrigation Co. v. Daniel Summit Co.™ There the plaintiffs insti­tuted suit to appeal a decision of the state engineer on a change ap­plication and to quiet title to certain irrigation rights. The first count was dismissed for failure to prosecute the suit to final judgment within two years. On the second count, the suit was viewed as an independent action to determine priorities among the appropriators, and the defendant countered that the state engineer's decision on the change application was res judicata, thus foreclosing the court from adjudicating the respective water rights of the parties. The Supreme Court in an opinion by Justice Hall held that the decision of the state engineer was purely administrative rather than judicial, and, there­fore, principles of res judicata could have no application. It would be monstrous to apply res judicata in this situation under either the ma­jority or the dissent in the Crafts case. Under the approach of the dissent, the state engineer may make a decision on the basis of the applicant's evidence alone. The protestor should not, therefore, be bound when his side of the case has not been considered. Under the majority in the Crafts case, the result would be the same since the state engineer does not seem to have primary jurisdiction under Utah statutes to make a final decision. If the matter has been previously adjudicated in a court proceeding, the decision is res judicata.69 VI. GROUNDWATER During the drought of 1977, editorials in local newspapers advo­cated general revision of Utah water laws and determination of the 67 667 P.2d at 1083 (Oaks, J., dissenting). 68 571 P.2d 1323 (Utah 1977). 89 See Provo River Water Users Ass'n v. Lambert, 642 P.2d 1219, 1229 (Utah 1982) (Stewart, J., dissenting); cf. Church v. Meadow Springs Ranch Corp., 659 P.2d 1045 (Utah 1983). 18 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 specific role groundwater would play in the future of the state.70 The existence of adequate groundwater reserves is important if the state's population dramatically increases before the turn of the century. Careful studies should be made by water experts of all principal aq­uifers in the state. The United States Geological Survey is con­ducting a number of surveys of groundwater in the Salt Lake Valley which will be completed within the next few years.71 Recently it pub­lished a study of Utah Valley which indicated that the water level in some northern Utah Valley wells had dropped substantially in recent years.72 This was due in part to increased groundwater withdrawals for public use. On a more optimistic note, it was reported that at least 3.5 m.a.f.73 of recoverable groundwater, suitable for most uses, is in storage and that there has been no evidence of any change in the water's chemical quality in the past twenty-five years. As far as Salt Lake Valley is concerned, the chief of the United States Geological Survey observed in 1977 that the basin underlying the valley was "full and overflowing," that about 60 m.a.f. are available for use, and that pumping 35,000 acre feet in addition to the annual recharge of the basin in a drought year would produce no ill effects.74 He favored 70 Drought Lesson for the West: Time to Review Water Law, Salt Lake Tribune, May 28, 1977, at A18, col. 1; Revising Utah Groundwater Law Proper Special Session Item, Salt Lake Tribune, June 22, 1977, at A14, col. 1; Ground Water: Time Gets Short for Determining its Role, Salt Lake Tribune, Nov. 5, 1980, at A14, col. 1. 71 One report published recently is R. Seiler & K. Waddell, RECONNAISSANCE OF THE SHAL-LOW- UNCONFINED AQUIFER IN SALT LAKE VALLEY, UTAH U.S. GEOLOGICAL SURVEY, U.S. DEP'T OF THE INTERIOR, WATER RESOURCES INVESTIGATIONS REP. 83-4272 (1984). 72 D. CLARK & C. APPEL, GROUND-WATER RESOURCES OF NORTHERN UTAH VALLEY, UTAH, U.S. DEP'T OF THE INTERIOR, U.S. GEOLOGICAL SURVEY, Open-File Rep. 84-455 (1984). 73 M.a.f. designates a million acre feet. An acre foot of water represents 325,851 gallons. C. MEYERS & D. TARLOCK, WATER RESOURCE MANAGEMENT 39 (1980). 74 UTAH CENTER FOR WATER ^RESOURCES RESEARCH, UTAH WATER RESEARCH LABORATORY, 8 Aquarius, No. 2, at 3, col. 1 (April-June 1977). Aquarius also commented on confusing articles in the Salt Lake Tribune which appeared in 1979 and 1980. The first article quoted the man­ager of the Salt Lake County Water Conservancy District (SLWCD) as saying, "We are running out of water . . . the water table in the district's 15 wells has dropped as much as 210 feet since 1963 . . . . " UTAH CENTER FOR WATER RESOURCES RESEARCH, UTAH WATER RESEARCH LABORA­TORY, 11 Aquarius, No. 2 at 2, col. 1. The other article quoted an official of the United States Geological Survey as saying that "water levels [in Salt Lake County] have been lowered only 25 feet since 1932 . . ." and that "there is an enormous 'overflowing' reservoir of underground water in Salt Lake Valley virtually inexhaustible and containing more than twice the volume of Lake Powell." Id. The comments were later clarified in 11 Aquarius No. 4, at 2, 4, col. 1, (August 1980), Utah Center of Water Resources Research, Utah Research Laboratory. The' latest study by the United States Geological Survey indicates that there are indeed 60 m.a.f. of groundwater in the Salt Lake County aquifers. The average annual recharge is about 367,000 acre-feet each year and about the same amount is discharged annually. Not all water in the aquifers is fresh nor is the supply inexhaustible, but the county is certainly a long way from running out of water. 1985] UTAH WATER LAW 19 in general exploitation of our groundwater reserves. At the present time, no overall plan for this has been devised, and some are not so optimistic about the future of groundwater in the Salt Lake area.76 These comments are offered only to indicate that in the future groundwater is likely to be used more extensively. The use of ground­water as a substitute for the Central Utah Project, which some have suggested,76 is doubtful. But with increased use, there will necessarily be more extensive state regulation. At the present time, we have rela­tively little groundwater legislation compared to other Western states like Arizona which is largely dependent upon groundwater for survival.77 Groundwater law in Utah is thus largely judicial. Before state groundwater law is discussed, however, it should be noted that the federal government may eventually play some role in the administra­tion of groundwater resources. For some time, we have known that federal reserved water rights may exist in groundwater as well as sur­face water.78 This is generally not thought to be a matter of major concern to the states, however.79 More important is the Sporhase case decided two years ago by the United States Supreme Court.80 During the period of 1932 to 1980, water levels in most of the wells in the valley either rose or declined less than ten feet. The 210 feet drop in water levels in the SLWCD's wells was a reporting error. It applied only to the SLWCD's wells and not to the entire Salt Lake Valley. Also optimistic is the League of Women Voters of Utah. Woolf, New Report Hopeful About Valley Water, Salt Lake Tribune, Mar. 25, 1982, at Bl. The League's studies entitled Chal­lenges to the Future for Utah's Water Policies were published in two parts in 1980. 76 See Utah Foundation, The Central Utah Project and Utah's Water Needs, Rep. No. 420 (Oct., 1981) at 45, states that the state engineer and other officials are cautious about stating the amount of water that can be practicably developed from the Salt Lake Valley aquifers. Apparently it is believed that only part is of high quality, that drawing down high-quality wells too far may induce in-migration of poor quality water, and that artificial recharging of aquifers with high-quality spring runoff from the mountains is not feasible at the present time for tech­nical reasons. On the possibility of a federally-funded project to investigate recharge of ground­water which might affect Utah, see Bill Advances to Recharge Groundwater, Salt Lake Trib­une, June 22, 1983. 78 See Bauman, Groundwater in S.L. Valley Could Be Alternative to CUP, Deseret News, Sept. 28, 1979, at B3, col. 1. 77 See ARIZ. REV. STAT. ANN. §§ 45-401 - 631 (Supp. 1983). The adoption of this "most com­prehensive groundwater code in the nation" is discussed in Connall, A History of the Arizona Groundwater Management Act, 1982 ARIZ. STATE L. J. 313. The statute was upheld in Town of Chino Valley v. City of Prescott, 131 Ariz. 78, 638 P.2d 1324 (1981). 78 See Cappaert v. United States, 426 U.S. 128 (1976). Groundwater is not a locatable min­eral under the federal mining statutes. Andrus v. Charlestone Stone Prods. Co., 436 U.S. 604 (1978). 79 But see the critical comment by Meyers, Federal Groundwater Rights: A Note on Cap­paert v. United States, 13 LAND & WATER L. REV. 377 (1978). 80 Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (1982). 20 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 That case received extensive coverage in the press,81 and the com­ments in the legal periodicals are legion.82 This is not the place for an analysis of Sporhase, but a brief summary of its holdings is perhaps in order. Nebraska sued to enjoin a farmer from exporting Nebraska groundwater into Colorado (where a portion of his farm was located) without obtaining a permit. A Nebraska statute conditioned the per­mit in part on a showing that the state to which the water was to be transported granted reciprocal rights to transport its groundwater for use in Nebraska. The Ogallala aquifer from which the water in this case was probably withdrawn underlies the states of Colorado and Nebraska as well as parts of four other states. There is nothing in the Supreme Court's opinion which necessarily restricts its holding to in­terstate aquifers, however. Nor is there anything in the opinion which limits the decision to groundwater. The Supreme Court held: (1) Water is an article of commerce, and Congress could under the com­merce clause of the federal constitution legislate in this area if it chooses to do so; and (2) Although a state's interest in its natural resources might justify a ban on exportation of water under some cir­cumstances, the reciprocity provision here is not narrowly tailored to any local interest in conservation or preservation and therefore con­stitutes an impermissible burden on interstate commerce in ground­water. 83 The Court also found that Congress has not granted to the states permission to engage in groundwater regulation that would otherwise be impermissible. For present purposes, it should be emphasized that Congress has not exercised its power to legislate with respect to interstate com­merce in water, and it is unlikely that it will do so very soon.84 In any event, Sporhase probably will not have a great impact in Utah where water problems are largely internal. On the question of state restric- 81 See, e.g., Russakoff, Wheat Farmer Stuns the West With Water Suit, Washington Post, Sept. 12, 1982, at Al. On page A-8, col. 1, the caption read "Farmer and 'Country Hick' Lawyer Upset Decades of Water Law." In fairness, it should be noted that the lawyer for the Nebraska farmer described himself in this fashion. 82 See Corker, Sporhase v. Nebraska Ex Rel. Douglas: Does the Dormant Commerce Clause Really Limit the Power of a State to Forbid (1) The Export of Water and (2) The Creation of a Water Right for Use in Another State?, 54 U. COLO. L. REV. 393 (1983); Tarlock, So Its Not "Ours" Why Can't We Still Keep It? A First Look at Sporhase v. Nebraska, 18 LAND & WATER L. REV. 137 (1983); Clyde, State Prohibitions on Interstate Exportation of Scarce Water Resources, 53 U. COLO. L. REV. 529 (1982). 83 See more recently City of El Paso v. Reynolds, 563 F. Supp. 379 (D. N.M. 1983). 84 Also, national standards for monitoring groundwater pollution by the Environmental Pro­tection Agency are not expected for some time. See Shabecoff, Study Finds E.P.A. Not Pro­tecting Ground Water, N.Y. Times, Apr. 7, 1984, at 9, col. 1; N.Y. Times, Apr. 15, 1984, at 4E, col. 2. 1985] UTAH WATER LAW 21 tions on exportation of water resources, our present statute autho­rizes the state engineer after a public hearing to grant applications to export water to other states from any source after an evaluation of the advantages to the state in exporting the water.86 He may also, with the consent of the governor, enter into agreements with water officials in other states with respect to the supervision and control of exported water. A reciprocity provision similar to Nebraska's was re­moved from the statute in 1979, and in its present form, the statute is probably valid under Sporhase. The state engineer has announced that the first application to export water under the present statute was approved in the 1982-83 fiscal year. That application was for a small amount of water, much of it waste water, to be used in a slurry line to transport phosphate products from Vernal, Utah, to Rock Springs, Wyoming.86 A. The Legal Status of Groundwater in Utah A few early Utah cases held that "percolating waters"87 were part 88 UTAH CODE ANN. § 73-2-8 (1980 & Supp. 1981). Although a number of states have at­tempted to restrict exportation of water, there has been at least one notable exception in recent years. In 1982, South Dakota entered into an agreement with a private energy firm for a 50-year permit to transport annually 50,000 acre-feet of water from a Missouri River basin reservoir near Pierre, S.D., to Wyoming where the water would be mixed with crushed coal to form slurry. The slurry would then be pumped about 3,000 miles in a private pipeline to power plants in Arkansas and Louisiana. It is estimated that if the agreement is carried out it will bring "hundreds of millions'' of dollars to South Dakota. Nine other states in the lower Mis­souri River basin might be affected. Nebraska and Missouri particularly are concerned about the proposal's effect on the historical flow of the river which they rely upon. See Sheppard, Decision to Sell River's Water Angers Missouri Basin States, N.Y. Times, June 1, 1982, at Al, col. 1. To make matters worse, Montana is apparently considering a similar project which would intercept the water of the Missouri River before it reaches South Dakota. Schmidt, Of Water Wars, Tax Cuts, Foreclosures and the Pesky Balmy Weather, N.Y. Times, Feb. 18, 1983, at 12, col. 1. The entire matter is certain to be in litigation for years to come on the question of equitable apportionment of the river. Earlier proposals to divert water from the Columbia River in the Pacific Northwest to south­ern California and Arizona seem to have been abandoned. Hill, California Agency Yields Northwest Water Fight, N.Y. Times, Jan. 27, 1978, at A16, col. 1. States in the Great Lakes area are resisting pressure to export fresh water from the lakes to Midwestern and Southwestern states. Malcolm, Great Lakes States Seek to Keep Their Water, N.Y. Times, June 13, 1982, at 30, col. 1. Recently Governor Scott M. Matheson of Utah an­nounced at an international water conference that any such plan is not likely to be considered seriously by the federal government for years to come because of the enormous cost. Matheson Diverts Water Plan, Deseret News, June 14, 1984, at Bl, col. 1. Legal problems involved in exporting water from the Great Lakes to other parts of the United States are discussed in Note, The Great Lakes as a Water Resource: Questions of Ownership and Control, 59 IND. L.J. 463 (1984). 88 1982-83 UTAH NAT. RESOURCES & ENERGY ANN. Rep. 53. 87 "Percolating water" is a legal term which is not used in the scientific community. To law­yers it generally means water beneath the surface of the earth which does not flow in a defined 22 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 of the soil (at least if they did not constitute the source of supply of a natural surface stream) and were not, therefore, subject to appropria­tion. 88 This concept was not regarded as changed by the 1903 legisla­tion which adopted the permit system in Utah. That statute defined "public waters" subject to appropriation as "the water of all streams and other sources in this State, whether flowing above or under­ground, in known or defined channels . . ." (emphasis added).89 By 1921, the court held that water in subterranean and artesian basins was also percolating water and therefore outside the appropriation system. But to settle conflicting claims among surface landowners in such basins, a new approach known as the rule of reasonable use and correlative rights was adopted, i.e., surface owners in the artesian dis­trict were entitled only to proportionate shares based upon the amount of land they owned.90 channel like an underground stream. An underground stream like the River Styx is indeed rare. In many of the Eastern states, percolating water was the subject of private ownership, whereas the riparian or appropriation system of water law was said to apply to underground streams. Whether the counterpart of percolating water is what hydrologists would call water in the zone of aeration or in the zone of saturation is not always clear in court decisions. Groundwater in these scientific categories is in a constant state of movement which is often very slow. In the zone of aeration, it is pulled down into the earth by gravity; in the zone of saturation, it flows horizontally and may eventually surface in the beds of streams or lakes found at a lower eleva­tion. Groundwater is generally defined to mean water in the zone of saturation. Artesian basins are bodies of subsurface water trapped by overlying and underlying strata of impermeable rock. The above comments are an over-simplification of the nature of groundwater. For a more com­plete description, the reader may wish to consult C. MEYERS & D. TARLOCK, WATER RESOURCE MANAGEMENT 641-53 (2d ed. 1980) for a reprint of portions of a brochure on groundwater pub­lished by the Department of Agriculture in 1951; and F. TRELEASE, WATER LAW CASES MATERI­ALS 438 (3d ed. 1979) reproducing portions of CROSBY, A LAYMAN'S GUIDE TO GROUNDWATER HYDROLOGY. If hydrology does not help you find a place to drill a well, you may wish to consult a water witch (dowser). See Lobb, Well, I'll Be Switched, The Water's Witched, Salt Lake Tribune, Mar., 19, 1972, at A27, col. 1. That the United States Geological Survey does not recommend this goes without saying. That lawyers are not expected to be completely oblivious to the nature of groundwater is evident in an opinion by Justice Wade in which he observed: " . counsel repeatedly says that there is no evidence that this water is moving. He seems to contend that the same water re­mains in this ground from year to year. Such a claim is so far from known facts of the nature of water and its reactions in the soil that we cannot believe that it is made seriously." Riordan v. Westwood, 115 Utah 215, 203 P.2d 922, 929 (1949). In that case, the court found an exception to public ownership of subsurface water where water is sufficiently close to the surface of the earth to support plant life. See infra note 105 and accompanying text. Clearly this would be water in the zone of aeration. 88 Willow Creek Irrigation Co. v. Michaelson, 21 Utah 248, 60 P. 943 (1900); see also Sullivan v. Northern Spy Mining Co., 11 Utah 438, 40 P. 709 (1895) and Crescent Mining Co. v. Silver King Mining Co., 17 Utah 444, 54 P. 244 (1898). 89 1903 Utah Laws, ch. 100 § 47. 90 Home v. Utah Oil Ref. Co., 59 Utah 279, 202 P. 815 (1921); Glover v. Utah Oil Ref. Co., 62 Utah 174, 218 P. 955 (1923). 1985] UTAH WATER LAW 23 This was all changed in 1935 in two decisions, the opinions of which covered nearly 140 pages in the official state reporter.91 These cases applied the appropriation system to artesian basins for the first time, and at the suggestion of several members of the court, the legis­lature in the same year responded by enacting a concise, new defini­tion of public water which is still in our statutes: "All waters in this state, whether above or under the ground are hereby declared to be the property of the public, subject to all existing rights to the use thereof."92 Clearly, after 1935 the permit system was the exclusive method of acquiring an appropriative right to groundwater as well as to surface water. Legal problems resulting from the "new concepts" continued to plague the court for a number of years. First, how could the legisla­ture constitutionally change private water into public water without running afoul of due process? Perhaps there is no ready answer, and the court merely suggested that its concept of private-public waters had changed over the years and that "we must treat the question as though our concepts and standards had always been as they are now"93: No police-power rationale - just simply "We were wrong." Second, it would be manifestly unjust to say that all groundwater appropriations before 1935 were invalid for lack of a permit. During that period, no one (including lawyers) thought a permit was re­quired in order to drill a well. Again, the court responded by saying that the 1935 act impliedly recognized the validity of all prior diver­sions of groundwater for a beneficial use.94 This response was based in part on the fact that the 1935 act permitted a previous appropria­tor to bypass the permit procedure by simply filing a notice of his claim within one year. The failure to do so was regarded as prima facie evidence of an intention to abandon his claim.95 The filing pro­vision was repealed in 1955, and these claims are now required to be filed under another statute which makes filing prima facie evidence of validity.96 91 Wrathall v. Johnson, 86 Utah 50, 40 P.2d 755 (1935); see also Justesen v. Olsen, 86 Utah 158, 40 P.2d 802 (1935). 92 1935 Utah Laws, ch. 105 § 100-1-1. UTAH CODE ANN. § 73-1-1 (1980). Percolating waters are owned by the state. Branch v. Western Petroleum, Inc., 657 P.2d 267, 272 (Utah 1982). 93 Riordan v. Westwood, 115 Utah 215, 203 P.2d 922, 927 (1949). 94 Hanson v. Salt Lake City, 115 Utah 404, 205 P.2d 255, 260 (1949). 95 1935 Utah Laws, ch. 105 § 100-5-12. 98 1955 Utah Laws, ch. 160 § 73-3-17. In Dalton v. Wadley, 11 Utah 2d 84, 355 P.2d 69 (I960), a pre-1935 groundwater appropriation was upheld. There is no indication in the opinion that a notice to preserve the diligence right as provided by the 1935 statute was filed with the state engineer. The notice was not mandatory but merely created the presumption against 24 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 Thus, groundwater "diligence rights" acquired prior to 1935 are still part of the contemporary Utah water law.97 In a rare case it may be necessary to determine whether a pre-1935 appropriation was of groundwater or surface water. Only the surface water required a per­mit. The Utah court held that the point at which the water is di­verted determines whether it is ground or surface water.98 In that case, water which originated in a well was allowed to run down a nat­ural ravine through another spring area where it was appropriated by a different water user. At that point, it was surface water, and a per­mit was required. Another Utah case dealt with the scope of ground­water diligence rights. The court limited these rights to the amount of water actually beneficially used prior to the effective date of the 1935 act.99 A water user could not intitiate a diversion prior to 1935 abandonment, and in this case, there was every indication that the claim had not been aban­doned. Pre-1935 diligence rights may now be filed under UTAH CODE ANN. § 73-5-13 (1980). 97 Bullock v. Tracy, 4 Utah 2d 370, 294 P.2d 707 (1956). 98 Fairfield Irrigation Co. v. Carson, 122 Utah 225, 247 P.2d 1004 (1952), noted in 3 UTAH L. REV. 391-92 (1953). The case neatly illustrates why dates are important in Utah water law. In 1900, D drilled two artesian wells high in the foothills northwest of the City of Fairfield and piped the water to a mining company several miles away. The pumping operation was discon­tinued in 1905, and from that time until 1933, the wells overflowed and the water ran down a ravine into a spring area below where it was used by P. From 1933 to 1937, the original pump­ing operations were resumed, and D again piped the water to a mining operation a considerable distance away. During that period no water ran down the ravine. From 1937 until 1949, the well water was again permitted to run down the ravine into P's canal. In 1949, the well water was again diverted by D. At that point, P brought the present action to establish his right to use the well water from the ravine. (Although the Utah Supreme Court did not so indicate, the wells and the springs through which the ravine ran apparently did not take water from the same source.) The court held: (1) Although D acquired a diligence right to underground water, that right was lost by abandonment during the period 1905-1933 when pumping operations were discon­tinued; (2) During that period, P could not acquire a groundwater diligence right because at the point where he diverted the water from the ravine, it was surface rather than groundwater. Since he had no permit for surface water under the 1903 statute, he had no appropriative right; (3) From 1933 to 1937, D again acquired a diligence right to groundwater by resuming pumping operations. No permit was required at that time. (Actually he also filed for a permit after 1935); and (4) From 1937 to 1949, D did not lose his diligence right because (a) there was no evidence of intent to abandon and (b) there was no forfeiture for non-user because the five-year forfei­ture statute did not apply to groundwater diligence rights until 1945. D resumed operations within four years after that date. Fairfield, 247 P.2d at 1008-10. In a recent unpublished decision, the plaintiff claimed a right to appropriate water from a spring area on the defendant's land. The court seemed to overlook the fact that the plaintiff's claim may have been valid as a pre-1935 groundwater diversion if the water had been diverted below the surface of the ground in the spring area. The nature of the diversion is not indicated in the per curiam opinion. Hadden v. Farr Constr. Co., No. 80-16811, Utah, filed Nov. 18, 1980. 99 In re General Determination of Water Rights in the Escalante Valley Drainage Area (Goodwin v. Tracy), 6 Utah 2d 1, 304 P.2d 964 (1956). Justice Henroid contrasted the 1935 act with the provision in the 1903 act which allowed one who had initiated a right prior to 1903 to perfect it after the effective date of the statute. 1903 Utah Laws, ch. 100, § 72. He was justified 1985] UTAH WATER LAW 25 and perfect it thereafter. In the post-1935 era, a groundwater appro­priation need not be used for the benefit of the overlying land,100 as would have been required under the earlier correlative rights test. Also, the statutory provision relating to forfeiture of water rights for non-user was not amended to apply to groundwater until 1945.101 The 1935 definition of public water is so broad that it is no longer necessary to categorize the water as diffused, seeping and percolating, as water in subterranean basins, or as flowing or stagnant waters,102 or, perhaps, even whether it is in the air or on the ground.103 How­ever, there may be one exception to this broad definition. The Utah court held in one case that water in the soil near the surface which is necessary to sustain plant life on the owner's land and the flow of which cannot be traced into any watercourse is to be classified as private rather than public water.104 Whether this is still a viable ex­ception is not clear.106 Most writers, however, do not feel that this exception constitutes a significant problem in the administration of water resources.106 Two interesting Utah cases raise the question whether a prior ap­propriator from an artesian basin has a vested right as against a sub­sequent appropriator in the same basin to continue to receive water by artesian pressure. In the first decision, Current Creek101 a later appropriator drilled a well which lowered the water table and re­duced the flow in an older well by diminishing the hydrostatic pres­sure. In an opinion by Justice Wade, the court held that the later in refusing to read such a provision into the 1935 act because by the later date, the legislature was presumably more aware of the importance of water in an arid community and did not intend to validate more groundwater diligence rights than absolutely necessary. 100 In the Carson case, supra note 81, the court emphasized that after 1935, groundwater appropriations need not be used for the benefit of overlying land. 247 P.2d at 1009. 101 Id. at 1009-10. In re Escalante Valley Drainage Area (Cook v. Tracy), 6 Utah 2d 344, 313 P.2d 803 (1957) indicates that abandonment might not apply prior to 1935 also. This is difficult to reconcile with the Carson case. See supra note 98. 102 See McNaughton v. Eaton, 121 Utah 394, 242 P.2d 570 (1952). 103 Id. at 575 (Wolfe, C.J., concurring). 104 Riordan v. Westwood, 115 Utah 215, 203 P.2d 922 (1949); Melville v. Salt Lake County, 570 P.2d 687 (Utah 1977). 108 In Weber Basin Water Conservancy Dist. v. Gailey, 8 Utah 2d 55, 328 P.2d 175 (1958), Justice Crockett, in referring to Riordan, stated: "It is true that there is indication in that opinion that underground water diffused through the soil is subject to private ownership by the owner of the land. It is to be noted that there is some difficulty encountered in reconciling that concept with Sec. 73-1-1, U.C.A. 1953 . . . . We do not deal with that conflict because it is not presented in this case." Id. at 178. joe NATUR A L WATER COMM'N, A SUMMARY-DIGEST OF STATE WATER LAWS 732 (Dewsnup & Jensen eds. 1973). ,07 Current Creek Irrigation Co. v. Andrews, 9 Utah 2d 324, 344 P.2d 528 (1959); cf. Hanson v. Salt Lake City, 115 Utah 404, 205 P.2d 255 (1949). 26 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 appropriator must restore the pressure or bear the expense of install­ing pumping devices for the first well. The court relied primarily on a section of the 1935 act which granted a right of replacement to a jun­ior appropriator whose well diminished the quantity or^affected the quality of the water in the senior appropriated well.108 It is difficult to construe the statute to protect the means of diversion as well as the quantity and quality of the water available to the senior appro­priator But the court also relied upon three equitable considerations: (1) there was no showing that more water would be beneficially used if each well owner in the vicinity were required to bring the water to the surface at his own expense; (2) the junior appropriator was in fact wasting about 52 percent of the water at his well; and (3) there was no showing that the cost of replacing water by pumping was prohibi­tive to the junior appropriator.109 There was a vigorous dissenting opinion by Chief Justice Crockett who felt the decision would inhibit maximum utilization of water if later appropriators were required to modernize older and probably antiquated wells by paying the cost of pumping devices. He also felt that if the replacement statute applied, it was qualified by a phrase making replacement subject to the rules and regulations prescribed by the state engineer.110 Ten years later the court appeared to change its approach in the Wayman case.111 During that period, the composition of the court had substantially changed, and Chief Justice Crockett now wrote the opinion of the court. There was one curious twist, however. Without explanation, the other four justices merely concurred in the result. This diminishes the effect of Wayman as a precedent. In the Wayman decision, the defendant Murray City had seven permits to appropriate water from an artesian basin. Some of these were prior to plaintiff's rights in the same basin. The city's old wells were inefficient, and it filed with the state engineer a change applica­tion to drill a new well to withdraw the same amount of water. (Its 108 The present statute is UTAH CODE ANN. § 73-3-23 (1980) which provides: "In all cases of appropriation of underground water the right of replacement is hereby granted to any junior appropriator whose appropriation may diminish the quantity or injuriously affect the quality of appropriated underground water in which the right to the use thereof has been established as provided by law. No replacement may be made until application in writing has been made to and approved by the state engineer. In all cases replacement shall be at the sole cost and ex­pense of the applicant and subject to such rules and regulations as the state engineer may prescribe. The right of eminent domain is hereby granted to any applicant for the purpose of replacement as provided herein." 109 Current Creek, 344 P.2d at 532. 110 Id. at 535-37 (Crockett, J., dissenting). 1,1 Wayman v. Murray City Corp., 23 Utah 2d 97, 458 P.2d 861 (1969). 1985] UTAH WATER LAW 27 established priorities, it should be noted, would be transferred to its new wells.) The change application was approved after the new well was drilled and found to be more productive, and the old wells were then permanently capped. The plaintiffs were owners of a number of small domestic wells and claimed that the amount of water they could now pump was diminished because of reduced pressure. The basin clearly contained enough water for all appropriators. The court distinguished Current Creek on the ground that in that case a new application was involved, and here there was merely a change application designed to improve the means of diversion. This distinction is not persuasive because in either case the question ulti­mately is whether senior appropriators have a vested right to the ar­tesian pressure. The court held that the lower court's decree requir­ing the city permanently to replace at its sole cost the loss of water to the plaintiffs was in any event incorrect. Conditions in the aquifer may change, and the plaintiffs are not entitled to a guarantee of a specific amount of water in perpetuity. The court also held that a "rule of reasonableness" should be applied in the allocation of these groundwater resources which would take into consideration the quan­tity of water available, the annual recharge in the basin, and the ex­isting rights and priorities. This standard of reasonableness can best be applied by the state engineer who has the necessary expertise. Thus, there is no absolute right to hydrostatic pressure, and each case should be determined on its own facts by balancing the right of a senior appropriator against the interests of others in the basin in order to achieve the state's objective of maximum utilization of water resources. To this end, all appropriators are required to maintain rea­sonably efficient means of diversion. The Wayman decision is an inspired step in the right direction.112 It may be that we are back again to a correlative-rights approach so far as artesian pressure is concerned. One can easily imagine a variety of fact situations which would make it appropriate to protect an ear­lier means of diversion, and on remand it would be possible to reach that conclusion in this case. The senior appropriator is still clearly entitled to the full amount of water under his permit where it is not a question of diminishing artesian pressure.113 112 It has been suggested that legislation would be desirable to iron out whatever differences there may be in the two approaches in Current Creek and Wayman. See Group Urges Clarifi­cation of Water Laws, Deseret News, June 20, 1977, at B9, col. 6. 1,3 See Fairfield Irrigation Co. v. White, 18 Utah 2d 93, 416 P.2d 641, 646 (1966): "There is one issue on which the decree is deficient. It appears without dispute that the operation of the church cooperative wells, junior in right to defendant White's stock-watering well, diminished 28 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 B. A Collision of Two Regimes The body of law relating to rights of landowners to deal with dif­fused surface waters114 and subsurface water may occasionally con­flict with the traditional characterization of appropriative rights as property interests. An unusual Utah case on this problem has been overlooked by writers.115 In the Long case, a residential developer, owning swampy land near Salt Lake City, decided to reclaim it by draining diffused surface water and subsurface percolating water from the land by means of underground pipes. The whole operation lowered the water table and interfered with the natural drainage pat­tern of these waters into a pond on adjoining property. The plaintiff had an ancient diligence right to use the water in the pond for propa­gating fish and for recreational purposes. If the developer had claimed a right to use the water after it had been drained from his land, he would have been liable for interfering with the source of a prior appropriator's water.116 Here, however, instead of claiming a right to use the water, he wanted to get rid of it in order to enhance the value of his land. Could he do so without incurring liablity to one who has a valid appropriative right and who admittedly has been injured? Here again Justices Wade and Crockett found themselves in disa­greement, as they had in the cases dealing with preserving artesian pressure for a prior appropriator. Justice Crockett, for the majority, felt that the developer had incurred no liability. His reasoning merits close scrutiny: As populations continue to increase and society becomes more complex, pressures increase in connection with the use of land and resources. The consequence of this is greater necessity for restric­tions upon the manner in which property rights may be exercised. Just as the right to hold, use and enjoy property is by the collective consent of society, as represented by the law, the law within its proper limits may also impose such controls thereon as are necessary in the interest of the common welfare.117 the water in the latter. It follows that upon remand of this case some appropriate adjustment should be made with respect to that situation." The case went up again in Fairfield Irrigation Co. v. White, 28 Utah 2d 414, 503 P.2d 853 (1972). 114 Conflicts between adjoining landowners over unwanted diffused surface waters are re­solved in Utah by applying a reasonable use test. See Sanford v. Univ. of Utah, 26 Utah 2d 285, 488 P.2d 741 (1971). 118 N.M. Long & Co. v. Cannon-Papanikolas Constr. Co., 9 Utah 2d 307, 343 P.2d 1100 (1959). 116 Stubbs v. Ercanbrack, 13 Utah 2d 45, 368 P.2d 461, 464 (1962). 117 Long, 343 P.2d at 1102. 1985] UTAH WATER LAW 29 The above analysis seems to be the antithesis of our concept of private ownership, viz., that property privately owned may not be ap­propriated by another, or by society for that matter, without just compensation even though it is assumed to be taken for the common welfare. It is difficult to justify the Long decision if we concede that ownership of an appropriative water right carries with it legal protec­tion of the source of his water. Justice Wade, dissenting, felt quite correctly that even though the developer's land had already been re­claimed, the appropriator should be entitled to damages for interfer­ence with his water right.118 The Utah court's earlier description of the scope of an appropriative water right is instructive.119 VII. GENERAL ADJUDICATIONS A system for obtaining a final adjudication in a single law suit of all claims of water users on a particular stream system or other water source was devised around the turn of the century by Morris Bien of the United States Reclamation Service. The objective of the so-called Bien Code is to avoid the obvious shortcomings of piecemeal litiga­tion over water titles in private suits. Although the statutes in the Western states vary considerably in the way in which this is achieved,120 their common goal is to record all water claims from a particular source which subsequent appropriators can rely upon before making their investments. Utah's statute in 1919 came rather late.121 By 1922 all streams in Wyoming had been adjudicated.122 A brief description of the procedure under Utah's statutes is in or­der. The statutes must be carefully consulted for details. The state engineer may institute a suit in the district court after he has ap­proved a verified petition signed by five or more or a majority of the 1,8 Id. at 1105 (Wade, J., dissenting). 119 In a different context, the Utah court in Richlands Irrigation Co. v. Westview Irrigation Co., 96 Utah 403, 80 P.2d 458 (1938), stated: We must know judicially that the water in a river between any two points is not accumulated there solely from the contributions thereto from marginal sources, but that the major portion thereof comes by natural flow from upstream sources which have fed the channel itself, step by step, clear back to its ultimate source or sources . Any appropriator of water from the central channel is entitled to rely and de­pend upon all the sources which feed the main stream above his own diversion point, clear back to the farthest limits of the watershed. Id. at 465. 120 See Stone, Montana Water Rights - A New Opportunity, 34 MONT. L. REV. 57, 71 (1973), for a chart summarizing the systems in the various Western states. Montana later adopted a general adjudication procedure. MONT. CODE ANN. §§ 85-2-101 to -123 (1979). 121 1919 Utah Laws, ch. 67, §§ 20-40. 122 F. TRELEASE, WATER LAW CASES AND MATERIALS, 180 (3d ed. 1979). 30 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 water users on a particular water source. Whether circumstances jus­tify such a determination is a matter within his discretion.123 A pri­vate individual also may institute a suit in the district court if the determination will affect the major part of the water or the rights of ten or more claimants in a particular water course.124 If a general ad­judication is pending in one district court, it is not mandatory that a subsequent private water suit between some of the same parties in another district be abated, but, of course, any judgment entered will be subject to any final decree in the general adjudication.126 The dis­trict court under Utah's statutes also has discretion to convert a pri­vate suit into a general determination,126 in which case the state must be joined as a necessary party.127 After the suit has been filed, the procedure under Utah's statutes can best be described in terms of the various stages of the litigation. The first stage involves a formal determination of water users who are to become parties to the suit. The state engineer first gives pub­lished notice to all claimants, describing the nature of the suit and requesting them to file their names and addresses within ninety days. After that period, the state engineer prepares a list of all claimants based on the records in his office and the names and addresses filed in response to the published notice. After service of summons in the suit, any further notice in the proceedings may be served by mail on listed claimants or by publication on unknown claimants. The state engineer then begins a hydrographic survey of the water source.128 Notice of completion of the survey is then given by registered mail or personal service to all listed claimants129 who are required to file summaries of their claims within ninety days.130 Any summons in the suit is served as in other civil actions, but published notice of the summons is permitted for unknown claimants.131 The second stage is the filing of summaries of the various claims with the clerk of the court. Failure to file a claim results in forfeiture of the water right. Special permission to file late claims is given to persons who have been notified only by publication and who had no 123 UTAH CODE ANN. § 73-4-1 (1980). 124 Id. § 73-4-3. 128 Mitchell v. Spanish Fork W. Field Irrigation Co., 1 Utah 2d 313, 265 P.2d 1016, 1019 (1954); UTAH CODE ANN. § 73-4-24 (1980). 128 Watson v. Dist. Court, 109 Utah 20, 163 P.2d 322 (1945). 127 UTAH CODE ANN. § 73-4-18 (1980). 128 UTAH CODE ANN. § 73-4-3 (1980). 129 Id. § 73-4-3. 130 Id. § 73-4-5. 131 Id. § 73-4-4. 1985] UTAH WATER LAW 31 actual notice of the pendency of the suit.132 The third stage in the proceeding is a report by the state engineer to a court called a "pro­posed determination of all rights to the use of the water."133 Objec­tions may be filed by claimants. The fourth stage is adjudication, final judgment and appeal. If there are no objections to the report of the state engineer, the court is required to enter a judgment in accor­dance with the proposed determination.134 In the event of a contest, the statutes provide for a hearing with the claimants' statements con­stituting the pleadings.136 The state engineer may be called to give expert testimony, and the court may appoint referees, masters, engi­neers, soil specialists, etc. to make investigations.136 The final decree is recorded in all counties in which the water is diverted, and there is appellate review by the Utah Supreme Court. Surveys made by the state engineer and other costs of the determination are paid out of an adjudication fund set up by the legislature, and these costs are not assessable against the water users.137 In 1982, the state engineer an­nounced that he was working on adjudications on eight stream sys­tems138 which were expected to be completed within a few years. The general adjudication statute has served a useful purpose, but it is not a panacea for all problems. One writer has found that in Wyo­ming there is an enormous difference between the "paper rights" in final decrees and the amount of land actually being irrigated.139 This is probably true also in Utah. A casual reading of the Utah cases sug­gests that many of the early decrees were more than generous in the amount of water awarded. It is likely that there will be continuing litigation over the scope and durability of these early paper adjudications. The Utah court has held that an appropriator is not absolutely en­titled to the full amount awarded under a decree, but instead will be limited to the amount beneficially and non-wastefully used over the years.140 Whether this is called partial forfeiture and is simply a rec- 132 Id. § 73-4-9. 133 Id. § 73-4-11. 134 Id. § 73-4-12. 135 Id. §§ 73-4-13, -14. 138 Id. § 73-4-14. 137 Id. §§ 73-4-15 to -16. 138 1981-82 UTAH NAT. RES. & ENERGY ANN. REP. 77. 139 Mclntire, The Disparity Between State Water Rights Records and Actual Water Use Patterns, 5 LAND & WATER L. REV. 23 (1970). 140 In East Bench Irrigation Co. v. Deseret Irrigation Co., 2 Utah 2d 170, 271 P.2d 449 (1954), reh'g granted, 5 Utah 2d 235, 300 P.2d 603 (1956), the plaintiffs filed a change application for permission to store in a new reservoir water which they had been diverting and using by direct irrigation (which included winter flooding). It was held that the plaintiffs were entitled to claim 32 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 ognition that beneficial use is an inherent limitation on water rights in Utah is not important. There has also been considerable litigation over the meaning of many of the early decrees. The Utah Supreme Court has shown enor­mous patience in reviewing the endless squabbles over ambiguities in some of these decrees. Occasionally the decisions become quite com­plicated. 141 An amusing headnote to one such case illustrates this complexity and is probably unintelligible to most readers.142 In addition to the above reasons for continual litigation over gen­eral adjudication decrees, there have been a number of special legal problems arising in connection with these proceedings. First, for many years, it was uncertain whether the United States had relin­quished its sovereign immunity so that the general adjudication could determine the scope of federal and Indian reserved water rights as well as the validity of other federal water rights for which permits had been granted by the state engineer.143 The United States Su­preme Court eventually decided144 that the sovereign immunity de­fense had been relinquished under the McCarran Act Amendment.145 This has prompted in several Western states a rash of general adjudi­cations in order that these federal reserved rights particularly may now be quantified in the state court proceeding. A second problem has involved the validity of published notice under the due process clause of the fourteenth amendment to the some water which was saved by the change, but they had no absolute right to "the full quantity of water awarded them in the Cox Decree if it is available . . ." if lower users received less than they had been receiving over the years. 271 P.2d at 453. 141 See, e.g., Provo River Water Users Ass'n v. Lambert, 642 P.2d 1219 (Utah 1982). 142 In Salina Creek Irrigation Co. v. Utah, 14 Utah 2d 146, 379 P.2d 376 (1963), the headnote reads: "Maximum and minimum right" within Cox Water Rights Decree meant that user having maximum and minimum right was entitled to use its minimum right before subsequent appropriators having either maximum-minimum rights or one-flow rights were satisfied and that after minimum rights of subsequent maximum-minimum right ' holders and requirements of subsequent one-flow right holders were met, prior appro­priators could use water above minimum right until maximum was reached. Id. at 376. 143 Under the conformity clause of the Federal Reclamation Act of 1902, 43 U.S.C.A. § 371 et seq. (1982), the United States is required to proceed under state permit statutes to obtain water approprations for federal reclamation projects. See United States v. Gerlach Live Stock Co., 339 U.S. 725, 734 (1950); 43 U.S.C. § 383 (1982). 144 United States v. Dist. Court, 401 U.S. 520 (1971); Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) referred to in Part I of this article, 5 J. ENERGY L. & POL'Y 165, 177 (1984). This result was anticipated in Utah in In re Green River Adjudication v. United States, 17 Utah 2d 50, 404 P.2d 251 (1965). 148 43 U.S.C.A. § 666(a) (1982). 1985] UTAH WATER LAW 33 federal constitution.146 Since the United States Supreme Court deci­sion in Mullane v. Central Hanover Bank & Trust Co.147 published notice, with or without posted notice, has been suspect when used in several different types of special proceedings.148 The provisions in the Utah statutes for published notice are probably valid because they are used only for claimants who cannot reasonably be discovered. Also, special provision is made for extending the time to file claims by water users notified only by publication.149 A recent Washington decision upheld the validity of personal service on special entities. These entities distributed water under contracts to the actual appro­priators who were not individually notified and who were not by stat­ute necessary parties to the litigation.150 A third area of special problems involves the res judicata effect of general adjudication decrees. First, under general principles of final­ity, the general adjudication decree should be binding on the parties and their successors.151 Whether an exception to this general rule ex­ists in Utah is not entirely clear since the decision in Orderville Irri­gation Co. v. Glendale Irrigation Co.162 That case involved a contest between the original parties over priorities designated in the general adjudication decree. An early adjudication in a private water suit listed no priority dates. After the 1919 statute was enacted,153 a gen­eral adjudication suit was initiated to determine all water rights in the Virgin River system. In the final Cox Decree in 1931, the dates of origin of the two appropriators involved in this case were listed. The defendant was given a priority date of 1865; the plaintiff's appropria­tion was listed at 1871. The evidence in the present litigation indi­cated, however, that the parties (mutual irrigation companies) had 148 U.S. Const, amend. XIV, § 1, cl. 3. 147 339 U.S. 306 (1950). 148 In Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983), a notice of a tax sale posted in the county courthouse and published once a week for three weeks was held invalid. Other cases have invalidated newspaper and posted notice in condemnation cases where the owner's address was known. Schroeder v. City of New York, 371 U.S. 208 (1962); Walker v. City of Hutchinson, 352 U.S. 112 (1956). 149 UTAH CODE ANN. § 73-4-9 (1980). 180 In re Rights to Use Waters of Yakima River, 100 Wash. 2d 651, 674 P.2d 160 (1983). The trial court noted that over 40,000 additional notices would have to be served if all water users receiving water under contract with the water distribution entities were necessary parties to the proceeding. Id. at 163. 181 See 6 E. CLYDE, WATERS AND WATER RIGHTS (Clark ed. 1972 & Supp. 1978) § 532.1 on the effect of the judgment on claimants who were omitted as parties. 182 17 Utah 2d 282, 409 P.2d 616 (1965), discussed in Note, Water Rights - Finality of General Adjudication Proceedings in the Seventeen Western States, 1966 UTAH L. REV. 152, 175-76 (1966). 183 1919 Utah Laws, ch. 67, §§ 20-40. 34 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 shared the water on a basis proportional to their shares from before 1900 up to 1960. After the last date, there was apparently a severe shortage of water in the system, and the state engineer ordered dis­tribution on the basis of priorities listed in the final decree. This meant that there was nothing left for the plaintiff after the defendant received its full share of the water. The issue of finality was thus clearly raised. The court held that the water should be distributed on a proportionate basis according to the number of shares of each party, rather than according to the listed priorities. The court observed that the principle of res judicata does not ap­ply because this is not "the usual type of judgment."164 Instead it was said to be an equity decree in which the court has continuing juris­diction. How this is relevant is not clear. Nothing is gained by label­ling it an "equity decree." It is a statutory procedure, and the judg­ment entered is based entirely on the statute.156 If it were a matter of altering terms of the decree based on changed circumstances, the eq­uity label might have some significance. The court felt that the gen­eral designation of priorities was ambiguous because the final decree dealt with three classes of water rights and in one class only (which did not involve the water rights in this case) did the decree specifi­cally repeat that water was to be distributed according to the desig­nated priorities. Thus the court concluded that the 1865 and 1871 designation was probably not intended to apply to the water in the class involved in the present litigation.166 Extraneous evidence was held to be admissible to resolve the ambiguity, and it was felt that the proffered evidence did exactly that.157 To permit the parties to collaterally attack the decree is a very serious matter, and it can only undermine the whole general adjudication process to permit them to do so. A later case distinguished Orderville on the ground that there the Cox Decree was facially ambiguous.168 The res judicata effect of a final decree is also raised in connection with later appropriators who could not have been made parties to the litigation. As indicated earlier, a new appropriator could show that a water right awarded to a party to the decree has been abandoned or 184 409 P.2d at 619. 158 The Utah statutes contain no provision relating to the finality of the general adjudication decree. 159 409 P.2d 619. 157 Id. at 620. 108 Meridian Ditch Co. v. Koosharem Irrigation Co., 660 P.2d 217, 223 (Utah 1983) referred to in Part I of this article, 5 J. ENERGY L. & POL'Y 165, 194 n.171 (1984). 1985] UTAH WATER LAW 35 forfeited, and that unappropriated water is now available.169 Appar­ently that approach was not taken in Orderville because there was ample water for all appropriators up to the time of litigation. Can a new appropriator also show that more water was awarded than was actually needed? He should be able to do so, although one water law expert reaches the opposite conclusion.160 It will not do to say that the proceeding is in rem as in a quiet title suit involving title to land. A final decree in a general adjudication involving running water is not "set in concrete," to borrow the words of Justice Crockett in an­other context.161 Certainly a basic principle of the law of appropria­tion is that beneficial use is the basis, the measure and the limit of all water rights.162 Given the tendency to award more water than nec­essary in early decrees and the acknowledged public interest in maxi­mizing the use of this valuable resource, a later claimant should be able to show that the earlier award was excessive. This should be an exception to the salutary goal of putting an end to litigation. VIII. WATER DISTRIBUTION ORGANIZATIONS163 A. Private Organizations Irrigators often agree to operate and maintain a ditch, canal or lat­eral for their mutual benefit, sharing the water according to their in­dividual water rights. These private arrangements are often referred to as joint or common ditches, and the resolution of the problem of dividing the cost of maintenance generally depends upon the terms of their agreement or upon applicable property principles if they are re­garded as tenants in common of the ditch. Where there is no agree­ment, a Utah statute gives a joint owner who has incurred the cost of maintenance a right of contribution from other joint owners for "rea­sonable" expenses.164 One Utah case held that only charges which bear a reasonable relationship to the cost of distributing the water of the joint owner can be the basis for contribution.166 Often an irrigator 159 See supra note 140 and accompanying text. 160 E. CLYDE, supra note 151, § 532.2 at 534. 181 Wayman v. Murray City Corp., 23 Utah 2d 97, 458 P.2d 861, 864 (1969). 182 UTAH CODE ANN. § 73-1-3 (1980). 163 Much of the material in this section is discussed in the author's chapter on Water Distri­bution Agencies in 4 WATERS AND WATER RIGHTS 367-470 (Clark ed. 1970 & Supp. 1978). 184 UTAH CODE ANN. § 73-1-9 (1980). Any agreement between joint owners on the division of the costs of maintenance is, of course, controlling. West Union Canal Co. v. Thornley, 64 Utah 77, 228 P. 199 (1924); see also Hodges Irrigation Co. v. Swan Creek Canal Co., I l l Utah 405, 181 P.2d 217 (1947). 188 Under this test, the following charges were held unreasonable in one case: legal fees for 36 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 may use only a segment of an established ditch in order to convey his water. This may occur where he wishes to drain swampy land and convey the salvaged water a short distance in an already established ditch owned by another farmer. In Utah he has the power of private eminent domain to enlarge the existing ditch by paying compensa­tion, and he is required thereafter also to pay his "equitable" propor­tion of the cost of maintenance.166 Assuming, then, that an irrigator in a joint ditch uses only a por­tion of the entire canal, what mathematical formula should be em­ployed to determine the amount he must contribute for the cost of maintenance? Our statute simply states that he must contribute "in proportion to the share in the use or ownership of the water to which he is entitled."167 In one case, a joint owner used only six miles of a fifteen-mile canal. The court held that the right of contribution is based upon the uuse or ownership of the water and not upon the proportion of the canal used."168 Any other formula, it was suggested, would impose an impossible administrative burden on those who are responsible for making the apportionment. This would especially be true where, as is often the case, one joint owner may decide to sell his water to other users along the canal. One justice, dissenting in part, felt that it might be equitable in some circumstances to consider as one element of the apportionment the length of the canal actually used. His hypothetical illustration did not seem to vary essentially from the formula employed by the majority, however.169 filing a protest against a well application made by another irrigator in the vicinity; interest on a bank note; and fees paid to the state engineer for reasons not disclosed. On the other hand, costs in connection with meetings of joint users and costs incurred in projecting future canal improvements were held to be reasonable. Gunnison-Fayette Canal Co. v. Roberts, 12 Utah 2d 153, 364 P.2d 103, 107 (1961). In a more recent case, there was no evidence of actual expenses, and it was held that it was unreasonable simply to ask joint owners for estimates of costs and then to average these figures. Swasey v. Rocky Point Ditch Co., 617 P.2d 375, 380 (Utah 1980). The above cases involved mutual water companies. The plaintiffs, however, were not suing as stockholders. Instead, as to the particular water rights involved, they were regarded as joint owners of the ditch with the corporation. In Hodges, supra note 164, two separate mutual irri­gation companies were joint ditch operators and, therefore, the contribution statute applied. 186 UTAH CODE ANN. § 73-1-7 (1980). On the application of this section, see Peterson v. Sevier Valley Canal Co., 107 Utah 45, 151 P.2d 477 (1944); Nielson v. Sandberg, 105 Utah 93, 141 P.2d 696 (1943); Tanner v. Provo Bench Canal & Irrigation Co., 40 Utah 105, 121 P. 584 (1911), aff'd 239 U.S. 323 (1915). 187 UTAH CODE ANN. § 73-1-9 (1980). 198 Gunnison-Fayette Canal Co., supra note 165, 364 P.2d at 106. 189 "[I]f B has one-half of the water in the canal for only one mile and A has all of the water for 49 miles, plus one-half for one mile, the sharing in the expense would not be 50-50 based on the one mile segment. But it should be proportional to the water each owns in the canal along its entire length. Then they would be responsible in the ratio of 49 Va miles for A and Vi mile for B." Id. at 108 (Crockett, J., concurring dissenting in part). Assuming that it would be 1985] UTAH WATER LAW 37 Owners of joint ditches often incorporate in order to facilitate the administration of their common enterprise. Organized under the non­profit corporation statutes,170 mutual water companies, as they are generally called,171 are common in Utah. Their origins in the nine­teenth century were discussed in Part I of this article.172 Unlike a corporation organized for profit, the mutual water company's certifi­cate of stock is really "an undivided part ownership in a certain water supply."173 Whether the corporation has the legal title and the stockholders the equitable title to the appropriative water rights174 or whether the stockholders are regarded as the owners is probably not important for most purposes. Despite occasional differences in the way the corporation is initially set up, the purpose of the mutual company is always to facilitate the distribution of the water by re­lieving individual joint owners of the responsibility of management. The number of shares issued to a particular stockholder usually de­pends upon the amount of land to be irrigated, and often one certifi­cate of stock will entitle the stockholder to irrigate one acre of land.176 The corporation's sole source of income is from the levy of assessments on the stock, and in Utah the articles of incorporation may authorize assessments on other than a pro rata basis.176 "Pro possible to allocate the expenditures so that each mile of the ditch contributed equally, then A would be charged with 99 percent and B 1 percent of the cost of maintenance. This would seem to be the same as the test in the majority opinion. 170 UTAH CODE ANN. §§ 16-6-18 to 16-6-53 (1953 & Supp. 1983). Stockholders who have not abandoned their water rights may continue to receive their proportionate share of the water even though the corporate charter may have lapsed. St. George City v. Kirkland, 17 Utah 2d 292, 409 P.2d 970 (1966). On the right of an irrigation company to sue in its own name under the statute, see Gunnison-Fayette Canal Co. v. Gunnison Irrigation Co., 22 Utah 2d 45, 448 P.2d 707 (1968). 171 In Colorado, these organizations are called "mutual ditch corporations." A recent case deals with responsibilities of a stockholder to other stockholders in the corporation when the former proposes a change in the use of the water he is entitled to receive. Great Western Sugar v. Jackson Lake Res., 681 P.2d 484 (Colo. 1984). 172 5 J. ENERGY L. & POL'Y 165, 166-74 (1984). 173 See Genola Town v. Santaquin City, 96 Utah 88, 80 P.2d 930, 936 (1938), reh'g denied, 96 Utah 104, 85 P.2d 790 (1938). Compare George v. Robison, 23 Utah 79, 63 P. 819 (1901). 174 See Holliday Water Co. v. Lambourne, 24 Utah 2d 97, 466 P.2d 371, 374 (1970). This case also held that irrigation and culinary water companies may be treated differently for tax ex­emption purposes. 178 Mutual water companies are often organized to distribute culinary water to their stock­holders in which case the stock may be issued on a different basis. See Nielson v. Central Waterworks Co., 645 P.2d 48, 49 (Utah 1982). 178 UTAH CODE ANN. § 16-4-24 (1953). This section applies also to a water company which may be required to levy assessments on other than a pro rata basis under a contract with the United States Bureau of Reclamation. It may do so even though the articles contain no such provision. Occasionally a water company may be organized as a non-stock, non-profit cooperative corpo- 38 JOURNAL OF ENERGY LAW AND POLICY [Vol. 6 rata" means proportionately according to an exactly calculable factor, such as the amount of stock owned. The purpose of the Utah statute is certainly not clear. It may simply mean that particular costs for which an assessment is levied need not actually benefit the particular land owned by the stockholder. The most interesting legal problem involving the mutual company is whether a water right evidenced by a share of stock is or can be appurtenant to particular land. This problem was discussed in Part I of this article.177 The Utah court has also recently discussed the question of tort liability of mutual water companies.178 Private corporations organized to distribute water for profit, al­though common in many Western states, seem to be rare in Utah.179 Elsewhere they are referred to as "carrier ditch companies," and liti­gation has dealt primarily with the relationship between the company and the consumer, and the regulation of their rates as public utilities.180 B. Public Agencies The proliferation of special purpose districts is a phenomenon in modern local government law. These districts exercise limited func­tions and operate quite apart from the more familiar units of local government such as the city or the county. The territorial jurisdiction of these units of local government often overlap, creating difficult problems particularly in metropolitan areas. A 1981 study by the Utah Foundation reports that special purpose districts of all types increased in this state by 547 percent