By Guest commentary Friday, January 29th, 2016

Russell McGlothlin

As a water lawyer, I am frequently asked, “Who owns the water in California?” In jest, I sometimes respond, “Is that a trick question?”

The question is often a charged one that is underlain by personal views that there is either too much or too little government control over water use. The political adage that observes that “where you stand depends on where you sit” is applicable.

However, there is a fundamental policy issue reflected in this question. It is what rights can proprietary water users — cities, agriculture, industry, etc. — claim and what powers may the government employ to manage water resources for broader social welfare. The answer depends not so much on whether the government can control water use but rather how it does so. The state may exercise inherent police powers to regulate water use but it must be mindful of how the burdens of regulation are distributed among water users.

This can be understood in relation to two core principles applicable to water management in California. The first is the overarching state policy that the water resources must be managed to achieve maximum beneficial use and prevention of water waste. This requires that the state manage water for optimal social welfare through a “triple bottom line” balancing of social, economic and environmental interests.

This first principle can be thought of as the sizing of the “pie.” Government acts squarely within its sanctioned regulatory authority when it establishes how much of the natural water supply must be set aside for environmental, recreational and other uses and what residual quantity is available for consumptive human uses.

The second core principle is that, when dividing the consumptive use portion among competing water users, all branches of government must give due regard to water right priorities formulated from well over a century of the state’s common law. In legal parlance, the California Supreme Court has explained that water management must “preserve water right priorities to the extent those priorities do not lead to unreasonable use.” This means that adherence to water rights should not be elevated to such a position that the first principle — optimal social welfare — is lost, but that government must seek to adhere to the water rights regime to the extent it may feasibly do so without compromising the overarching public interest.

This duality of state control over the total scope of use coupled with the principle that water allocations among consumptive users must abide by water right priorities provides a helpful framework to analyze many perplexing water management issues and controversies. These include the tension between “public” and “private” interests affected by water management; balancing the countervailing interests of adaptable water management on the one hand, and water supply reliability and legal certainty on the other; the demarcation between reasonable water regulations and a taking of a water right; and the dual roles of the courts to both adjudicate the rights of the litigants and advance implicated social welfare interests affected by water management. This policy duality will also establish the scope and limits of new local regulatory powers that local governments may apply to manage groundwater pursuant to the recently enacted Sustainable Groundwater Management Act.

The overarching policy of maximum beneficial use of water and due regard for water right priorities may also be understood as complementary ideals. So long as the state is empowered to establish a cap on total water use so that it may balance and protect diverse public interests, the goal of achieving maximum benefit from water resources is fostered by the adherence to water right priorities. Dependable water rights afford greater legal certainty to consumptive users. This, in turn, promotes efficient and accurate water supply planning across variable hydrologic periods to support public water supply, well-planned agriculture, “smart” development and so on. When water rights are fixed, water markets can also flourish to allow discrete and quantified water rights to be transferred on a short-term or permanent basis.

The development of water markets allows the available supply to move from lower- to higher-valued uses; reveals the “true cost” of water; and incentivizes conservation by those who can invest in water-saving efforts, transfer conserved water supplies and apply revenue from the transfer to offset the cost of conservation.

Inherent in this policy duality is the notion of balanced management that protects and promotes the reasonable expectations concerning water held by the public and proprietary users. This balance should be embraced and promoted in our quest to achieve maximum welfare from our limited water resources.

• Russell McGlothlin is a water attorney and shareholder with Brownstein Hyatt Farber Schreck, LLP. The law and policy issues addressed in this editorial are discussed in further detail in a recent law review article authored by Russell and his colleague Jena Shoaf Acos, titled “The Golden Rule of Water Management,” published in the Golden Gate University Environmental Law Journal, Fall 2015.