Hill v. State
296 Neb. 10
| Neb. | 2017Background
- Nebraska DNR issued "Compact Call" orders and closing notices for surface-water natural flow and storage in the Republican River Basin for the 2013 and 2014 crop years after forecasts showed Nebraska would exceed its Compact allocation.
- Plaintiffs (FCID appropriators) alleged they held prior appropriation surface-water rights and that DNR actions diverted water away from them to satisfy Nebraska's Compact obligations to Kansas, causing crop losses.
- Plaintiffs sued the State and DNR for inverse condemnation and sought class relief for FCID water users who received less than full allocation.
- District court consolidated the 2013 and 2014 claims, dismissed both counts, and denied leave to amend; plaintiffs appealed.
- Supreme Court of Nebraska affirmed, holding (1) the Republican River Compact (as federal law) supersedes appropriators' water-use rights and (2) DNR has no duty or jurisdiction to directly regulate groundwater pumping (natural resources districts regulate groundwater), so DNR's alleged failure to curtail groundwater is not a takings claim basis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DNR streamflow administration under the Compact constituted a taking under Neb. Const. art. I, § 21 and art. XV, § 6 | Appropriators: their prior appropriation rights are vested and superior to the Compact; DNR's orders permanently diverted/appropriated their water, amounting to a taking and permanent physical invasion | State/DNR: Compact (federal law) governs allocations; permits are subject to statutes and reasonable regulation to ensure Compact compliance; no physical appropriation by DNR | Held: No compensable taking. Appropriators' use-rights are subject to Compact and statutory limitations; DNR's allocation reductions were lawful exercises of police power and not a permanent taking |
| Whether DNR's regulation deprived plaintiffs of all economically beneficial use of their land | Appropriators: decreased allocations prevented irrigation and caused total loss of beneficial use (conversion to dryland) | State/DNR: Plaintiffs still produced crops; inability to irrigate fully does not equal total loss of economic use | Held: Not all beneficial use was lost; allegations do not show total deprivation required for categorical taking |
| Whether DNR's streamflow administration amounted to a physical appropriation of plaintiffs' water rights (per se taking) | Appropriators: DNR actively diverted and appropriated water for Compact compliance, triggering per se rule (e.g., Casitas) | State/DNR: DNR did not physically appropriate water; it enforced Compact-based allocations which limit permit use | Held: No per se physical taking; cases like Casitas inapplicable where interstate compact governs allocations |
| Whether DNR had a duty/authority to curtail groundwater pumping that reduces streamflow and thereby caused a taking | Appropriators: DNR must count and curtail groundwater pumping that depletes streams; failure to do so caused a taking | State/DNR: DNR lacks jurisdiction to regulate groundwater; natural resources districts regulate groundwater; DNR's duty pertains to surface water and Compact compliance accounting | Held: DNR has no authority to directly regulate groundwater; alleged failure to exercise nonexistent duty cannot support inverse condemnation |
Key Cases Cited
- Hinderlider v. La Plata Co., 304 U.S. 92 (1938) (compact apportionment binds state citizens and limits adjudicated water rights to each state's share)
- Kansas v. Nebraska, 135 S. Ct. 1042 (2015) (describing the Republican River Compact, FSS procedures, and that the Compact is federal law)
- Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (no compensation owed where state decree merely clarifies background property principles)
- Casitas Mun. Water Dist. v. United States, 543 F.3d 1276 (Fed. Cir. 2008) (government-caused diversion that physically appropriates water can be a per se taking)
- Bamford v. Upper Republican Nat. Resources Dist., 245 Neb. 299 (1994) (groundwater is public; limiting withdrawals during shortage is valid exercise of police power)
- Spear T Ranch v. Knaub, 269 Neb. 177 (2005) (DNR has no duty to regulate groundwater to protect surface-water appropriations)
- Badgley v. City of New York, 606 F.2d 358 (2d Cir. 1979) (state administration to comply with interstate apportionment precludes damage claims that would undermine compact/decree)