Tuesday, November 29, 2016

GHOST RIGHTS TO WATER CAN BE SPOOKY

In 1948, the classic song "Ghost Riders in the Sky" was published. Depicting a haunting cowboy legend, it became popular first in 1949 by the deep voice of Vaughn Monroe, but subsequently recorded by over 50 performers.

Now, it appears that there may be ghost water rights in rivers and lakes on earth. In the 1600s, colonists in America began to use water from rivers to power their mills. In doing so, they also assumed rights to use water for these purposes. The formation of states, and the United States, occurred some 100 years later, and the formal regulation of water rights even later.

A recent news story focuses on a thorny issue: do pre-regulation water rights, sometimes called "ghost water rights", survive subsequent governmental regulation of water rights?* According to the article, two pioneer landowners in the Black Hills of South Dakota obtained water rights in 1896 to divert substantial flow from Rapid Creek. The then stated purpose of the water diversion was "for milling, manufacturing, irrigating, domestic and other useful purposes." These water rights were recorded prior to the the adoption in 1907 of state water use laws providing for regulation and permitting of water rights. According to the article, there were hundreds of water rights recorded prior to state regulation.

The article states that the subject water rights, if exercised, would divert almost one-half of the entire flow of the Creek in a typical year. In 1908, a state engineer surveyed pre-existing water rights and found that they claimed large amounts of water. He wrote "the natural tendency was to make the claim large enough to cover all possible requirements, and in most cases greater than there was any expectation of using...This resulted in many instances in absurd and speculative claims, and the records show numerous cases where each of a number of claims to the water of a stream, filed in accordance with the former statutes, involved a larger quantity of water than had ever flowed in it, even during flood periods."

Now, the state board regulating water rights is considering termination of ghost water rights. However, such termination presents several potential issues. For example, do pre-existing water rights ever expire or can they be terminated? If water rights were never used, do they still exist? Do they run with the land benefited from the water rights? Can water rights be abandoned, and if so, what evidence establishes abandonment? If a water right is used partially, does the unused balance still exist? Can a pre-exisist water right be reduced in scope?

Another issue may be Constitutional. If a state terminates or reduces a pre-existing water right, is this a taking under the Fifth and Fourteenth Amendments, requiring compensation?

Ghost water rights appear to be both daunting and haunting. Allocation of the rights to divert water from rivers and lakes can be a complex and contentious exercise. Indeed, to reference the song, ghost rights in the water can be spooky.

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*Tupper,"'Ghost Claims'Haunt SD Waters,"
Rapid City Journal, September 25, 2016,
page A1

© Daniel J. Kucera 2016

Monday, November 14, 2016

REGULATION AND AN ARCHIMEDES' MOMENT

Shortly before this month's presidential election, a Wall Street Journal article discussed impacts of excessive regulation upon economic growth.* Citing Brexit and G-20 leaders, it stated "Recent developments suggest a new recognition by voters and governments that excessive regulation is responsible for the slow economic growth of the past eight years." The article concluded "There is solid evidence that excessive regulation since the financial crisis has kept the U.S. and other developed economies from growing faster."

Since the dramatic results of the election, media sources have hastened to speculate over actions the new federal administration may take to mitigate or rescind perceived excessive regulation , not only in the financial arena but also particularly in environmental and energy related matters. Rulemaking in such areas obviously can have impacts on manufacturing, job loss and creation, wage growth, etc.

Moreover, aside from economic impacts, recent regulatory developments have extended federal reach to minutia of daily personal living. For example, there now are rules governing who can use what gender of public bathroom, the type of toilet one can have in a home, the kind of faucets and shower heads one can have, the kind of light bulbs to turn on in a bathroom, the amount of water a toilet can flush, etc. One can expect that a federal rule may be proposed governing the type and amount of toilet paper that can be used.

In addition to potential negative impacts on the economy, excessive regulation can distort the federalism structure inherent in the U.S. Constitution. As a reminder, the 10th Amendment states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved by it to the States respectively, or to the people." So, for example, should any regulation of bathroom usage be a federal or state issue?

Regulation can also become "excessive" when, under the guise of legitimate rule making it has a hidden agenda such as wealth redistribution or other social engineering. Or, it may become abusive when enacted by fiat without due process benefits of notice, opportunity to be heard, and balancing of costs and benefits.

The result of the recent election, to reference Archimedes' discovery, is a "Eureka!" moment. It has created a timely opportunity to review the current regulatory patterns and to modify rules which may be suffocating economic growth on both national and personal levels. One of the drivers of this country's exceptionalism in the past has been the freedom of ingenuity and hard work to rise above the common denominator. Excessive regulation can be a damper and limiting factor which create only negative inertia. Some positive inertia now is in order and welcomed.

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*Wallison, "The Regulatory Tide Recedes",
Wall Street Journal, October 10, 2016,
Page A15

© Daniel J. Kucera 2016

Wednesday, November 2, 2016

BEARING AND BARING AT THE BAR

In our recent western states drive, we visited several towns dating to the 1880s. Each had a saloon of the same vintage begging to quench thirst--they were the sort of establishments where one could expect to encounter Doc Holliday coughing away at the far end of the bar, Wyatt Erp keeping the peace at the near end, and Marshall Dillon chattering with Miss Kitty in the middle.

Each saloon had an atmosphere that just screamed THE OLD WEST--you know, dark wood wall paneling accented by mounts of buffalo, deer, elk, antelope, moose and what not; dark wood beams hugging embossed tin ceiling tiles; a bar surface whose finish diappeared years ago; a back bar wall lined with a waterfall of half empty bottles and keynoted by the obligatory painting of a Victorian naked damsel.

We became like characters in an old western movie, it seemed. But, we quickly learned that something was unexpected and different. The stereotype image of a bar typically includes a male bartender who becomes a confidant of patrons, listening to them pouring out their problems and troubles to him, and occasionally offering advice in return.

In the saloons we visited, however, the complete reverse became apparent. Each had a female bartender who poured out her problems and troubles to us. As patrons, we became their confidants.

Collectively, these women appeared to have one problem in common: overwhelming personal anxieties. Their anxiety tended to be over such issues as job, financial security, family, self fulfillment, location, etc. None of the issues they cited were the national and international issues discussed in the media and by politicians, although their personal issues may have resulted in part from the more global concerns.

It was sobering to experience this small sample of anxieties on the local level. One wonders how pervasive are these personal issues and whether they in turn are adversely affecting resolution of national issues such as the economy, security, job growth and civil unrest. With all the political noise on the national level, one wonders what is happening below the surface. To paraphrase Benjamin Franklin's words at the completion of the US Constitution, are we still looking at a rising sun?