South West v. District

Decision Date10 November 2008
Docket NumberNo. 1 CA-CV 07-0435.,1 CA-CV 07-0435.
Citation221 Ariz. 309,212 P.3d 1
PartiesSOUTH WEST SAND & GRAVEL, INC., an Arizona corporation, Plaintiff/Appellant, v. CENTRAL ARIZONA WATER CONSERVATION DISTRICT, an Arizona municipal corporation, Defendant/Appellee.
CourtArizona Court of Appeals

W. Patrick Schiffer, Chief Counsel, Arizona Department of Water Resources By Gregg A. Houtz, Deputy Counsel, Phoenix, Attorneys for Amicus Curiae Arizona Department of Water Resources.

Stephen M. Kemp, Acting City Attorney, Peoria City Attorney's Office By Cynthia Odom, Assistant City Attorney, Peoria, Attorneys for Amicus Curiae City of Peoria.

Sacks Tierney P.A. By Marvin S. Cohen, Scottsdale, Attorneys for Amicus Curiae City of Tucson.

Gallagher & Kennedy, P.A. By Mark A. Fuller, Phoenix, Attorneys for Amici Curiae Arizona Rock Products Association and Arizona Mining Association.



¶ 1 South West Sand & Gravel, Inc. (South West) appeals from a grant of summary judgment on its taking and tort claims against the Central Arizona Water Conservation District (the District). Based on our decision in West Maricopa Combine, Inc. v. Arizona Department of Water Resources, 200 Ariz. 400, 26 P.3d 1171 (App.2001), Arizona Revised Statutes (A.R.S.) section 45-173 (1994), and Arizona's historic encouragement of the full use of scarce water resources in our arid climate, we affirm the grant of summary judgment.


¶ 2 The District manages the Central Arizona Project (CAP) and promotes water conservation in an area encompassing Maricopa, Pima, and Pinal Counties. Pursuant to A.R.S. § 45-891.01(3) (1994), the Arizona Legislature has authorized the District to operate taxpayer-funded underground storage facilities (USFs), also known as "state demonstration projects," to store CAP water when there is no immediate demand for it.

¶ 3 The District applied to the Arizona Department of Water Resources (ADWR) for permits to operate the Agua Fria Recharge Project (the Project), a state demonstration project within a four-mile reach of the Agua Fria River south of the New Waddell Dam. The Project consists of: (1) a managed underground storage facility, from which water is diverted from the CAP canal into the Agua Fria River's channel so it may infiltrate the aquifer underlying the river; and (2) a constructed underground facility, where water is conveyed downstream as surface flow after the aquifer becomes saturated. Both facilities are located near the Agua Fria River's natural channel. South West owns properties near the Project. Its South Property is located in the bed of the Agua Fria River, and its North Property is on the river's west bank, at an elevation higher than the streambed.

¶ 4 The Department issued the permits to the District on May 4, 1999, authorizing the District to store 100,000 acre-feet of water each year for twenty years in the Project. The permits authorize the District to conduct recharge into the Agua Fria River but also require the District to observe operational limits that maintain groundwater levels below the depth of South West's sand and gravel pits as they existed when the permits were issued.

¶ 5 Pursuant to the permits, the District began diverting CAP water into the Agua Fria River in 1999. As a result, the aquifer underneath and adjacent to the Agua Fria River filled with water, thereby raising the water table beneath South West's property to a level that interfered with its sand and gravel mining business.

¶ 6 It is undisputed that the groundwater reaches South West's property through a natural hydrologic connection between the surface of the riverbed and the underlying aquifer. Prior to the construction of the Waddell Dam in the 1920s, the water levels in the aquifer beneath and adjacent to the Agua Fria River would have been at or near the surface. In conducting recharge into the river, the District has raised water levels in the river's aquifer, but the District contends that those levels remain below what they would have been under the river's natural flow.

¶ 7 South West sued the District in Maricopa County Superior Court, alleging negligence, negligence per se, trespass, nuisance, and inverse condemnation. South West moved for partial summary judgment, and the District moved for summary judgment on the North and South Properties. The trial court granted the District's motion and denied South West's motion as to the South Property. Because the record was not clear as to whether the water table beneath the North Property had risen to a level exceeding the aquifer's natural capacity, the trial court denied both summary judgment motions as to the North Property.

¶ 8 South West filed a motion for reconsideration/clarification. The trial court then granted summary judgment to the District for the North Property as well based upon the record and concessions made in the motion for reconsideration. This appeal followed.

A. As a Matter of Law, South West Has No Cognizable Taking Claim

¶ 9 On appeal from a grant of summary judgment, we determine de novo whether any genuine issues of material fact exist and whether the trial court correctly applied the substantive law to those facts. United Dairymen of Ariz. v. Schugg, 212 Ariz. 133, 140, ¶ 26, 128 P.3d 756, 763 (App. 2006). Summary judgment is warranted "if the facts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced by the proponent of the claim or defense." Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). Our review of the trial court's construction of the relevant statutes, a determination of law, is de novo. Ariz. Dep't of Revenue v. Blue Line Distrib., Inc., 202 Ariz. 266, 266, ¶ 4, 43 P.3d 214, 214 (App.2002).

¶ 10 Arizona law has historically recognized that the owner of stored waters has the right to use a natural stream to move and store water. Rev. Stat. of Ariz. Terr. §§ 4202-03 (1901). The intention of our early statutes was "to make the use of water, as much so as practicable, within the reach of all, and to guard it against monopoly by private ownership on the one hand, and against being hemmed in by the ownership of the adjacent land, liable to be acquired and held by speculators, on the other hand." Oury v. Goodwin, 3 Ariz. 255, 275-76, 26 P. 376, 383 (1891).

¶ 11 In 1986, the Arizona Legislature adopted a comprehensive water storage and recovery program. W. Maricopa Combine, 200 Ariz. at 405, ¶ 22, 26 P.3d at 1176 (citing Sec. 14, Chap. 289, Laws of 1986). Providing for water storage in Arizona's natural watercourses supports the twin policies of preserving groundwater and utilizing Colorado River water. Id. (citing A.R.S. §§ 45-801, -895 (1994), 45-1701, -1722 (1994)). The water at issue in this case comes from the CAP. We have recognized that the CAP "is indispensable for the maintenance of life and prosperity" in Arizona. Taft v. Ball, Ball & Brosamer, Inc., 169 Ariz. 173, 175, 818 P.2d 158, 160 (App.1991) (citation omitted).

¶ 12 While Arizona was developing its statutes and policies on water storage, it decided to deviate from the riparian law of water rights enacted in most states. The Arizona Constitution repudiates the concept of riparian water rights and follows the law of prior appropriation. See Ariz. Const. art. 17, § 1. In Arizona, like California and Nevada, "`the right to running water exists without private ownership of the soil. ...'" Hill v. Lenormand, 2 Ariz. 354, 357, 16 P. 266, 268 (1888) (quotation omitted). Thus, "when a person acquires land he takes it subject to any water rights which might have been initiated according to the law." England v. Hing, 8 Ariz.App. 374, 378, 446 P.2d 480, 484 (1968), vacated on other grounds, 105 Ariz. 65, 459 P.2d 498 (1969).

¶ 13 The Arizona Legislature recognizes a right to locate an underground storage facility (USF) in a natural stream:

Although the waters which naturally flow in the natural channel of a stream have been previously appropriated and put to beneficial use by others, the channel may be used to carry water of another or used for the location of an underground storage facility pursuant to chapter 3.1 of this title, if such use can be made without diminishing the quantity of water which naturally flows therein the use of which has been appropriated.

A.R.S. § 45-173(A). Nevertheless, South West contends that the District's use of an Arizona riverbed to transport and store water may give the owner of the riverbed and adjacent land a cause of action for a governmental taking and trespass.1

¶ 14 Our main goal in construing this statute is to "discern and give effect to legislative intent." People's Choice TV Corp. v. City of Tucson, 202 Ariz. 401, 403, ¶ 7, 46 P.3d 412, 414 (2002). We "construe the statute as a whole, and consider its context, language, subject matter, historical background, effects and consequences, and its spirit and purpose." Id. (citations omitted).

¶ 15 In West Maricopa Combine, we concluded that A.R.S. § 45-173(A) allows a party to use another's real property to run water down the naturally existing Hassayampa riverbed. 200 Ariz. at 402-04, ¶¶ 1-15, 26 P.3d at 1173-75. Like South West, the landowner contended that the proposed action constituted a governmental taking and a trespass. Id. at 409-10, ¶¶ 42-47,...

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