First in Time, First in Right, and How Western Water Law Really Works

Tell an Eastern dinner party that you would rather own the ditch than the land and you will get a polite laugh and a refill. Say it in a Western feed store and you will get nods. To a man from Virginia it sounds like a guy who bought the plumbing and forgot the house. To a rancher in the Rockies it is the sound of somebody who has read the fine print.

Water in the American West is not a gift of nature. It is a piece of property, with a deed, a date and a place in line, and that line decides who grows alfalfa this summer and who watches a field turn to dust. If you want to understand why Western politicians get so heated about rivers, you have to understand one rule that fits on a bumper sticker: first in time, first in right. Let's take it apart.

Two ways to own a river

America has two big systems for deciding who gets to use water, and the dividing line follows the rainfall.

Riparian rights came over from English common law, and they rule most of the East. If your land touches a stream or lake, you have the right to make reasonable use of the water, and so does every other owner along the bank. Nobody has a better claim than anybody else because nobody is first. If the stream runs low, everybody is supposed to share the shortage, and courts argue about what "reasonable" means. In a place that gets plenty of rain, that works fine. There is usually enough water to go around, and what you fight about is somebody dumping something upstream.

Prior appropriation is the Western system, and it does not care whether your land touches the river. Its rules are simple, and they are rough:

1. Whoever first takes water from a stream and puts it to a useful purpose gets a right to keep taking that amount.
2. The right has a priority date, the day the use began (or the day the claim was filed under the state's system).
3. In a shortage, the oldest priority date gets all of its water first, then the next oldest, and so on down the line until the river is used up. The junior users go dry.
4. The right depends on beneficial use. You own what you actually use for a recognised purpose such as irrigation, livestock, a town's supply or industry, not what you merely hope to use someday.

That is the whole machine. There is no sharing the pain. In a drought, riparian law spreads the shortage across everybody; prior appropriation hands one man a full ditch and hands his neighbor a dry one, purely because of the date on a piece of paper.

Why the West chose such a hard rule

It was not designed in a law school. It grew out of the California gold camps around 1849, where miners needed water to wash gravel, often miles from the creek. The English rule would have said you can only use water on land touching the stream, which made no sense when the claim was up a dry hillside. So miners made up their own customs: the first man to divert water and use it had the better right, and everybody else waited. Courts and legislatures later took those mining-camp customs and wrote them into law.

Farmers adopted the same idea for a good reason. A person who spends a year digging a ditch and builds a farm on the strength of that ditch needs to know that a latecomer upstream cannot take the water and ruin the investment. Certainty is what makes people build things in a dry country. Property rights, in other words, are doing in the desert exactly what conservatives say property rights do everywhere: giving a person a reason to invest because the payoff is protected.

Colorado went furthest. In 1882 the Colorado Supreme Court, in Coffin v. Left Hand Ditch Co., held that riparian rights did not apply in the state's arid conditions and that priority of appropriation governed. Lawyers call this the Colorado doctrine, and a long list of Western states adopted all or most of it. Some states along the Pacific, such as California, kept a mixed system for a while, but the principle of first in time dominates the dry interior.

Use it or lose it

Here is where the system bites the unwary. Because the right depends on beneficial use, a right that goes unused can be lost. State laws vary on the details, but the idea is the same everywhere: if you stop using the water for a stated period without a good legal reason, a court or state water official can find the right abandoned or forfeited, and the water slides back to the stream and to whoever is next in line.

Think about what that does to behavior. A farmer who could save water by fallowing a field or switching to a more efficient system is nervous about doing it, because a smaller use today may be read as a smaller right tomorrow. Critics call that "use it or lose it" and say it rewards waste. Defenders say you cannot hold a share of a scarce public resource and sit on it while someone else would use it productively. Both arguments have force, and several states have passed laws to protect people who conserve water from losing the saved portion, which tells you the critics landed a punch.

What counts as a beneficial use also changes over time. Irrigation and mining were the early champions. Cities, power plants and industry came later. In many states, leaving water in a stream to protect fish or recreation was once not considered a beneficial use at all, and states have changed their laws in recent decades to allow limited instream rights. If you want to see lawmakers argue about an old rule meeting a new value, this is the place.

Why a water right can be worth more than the land

Now we come back to the ditch. Picture a hypothetical valley with two farms of identical size and soil, side by side. Call them the Old Farm and the New Farm. Both irrigate from the same river.

The Old Farm's water right dates to 1885. The New Farm's dates to 1955. In a wet year the river carries enough water for both, and nobody can tell the difference. In a dry year the river drops. Somebody downstream of everyone, say a town with a very old right, places a "call" on the river, which is the legal way of saying "my senior right is not being satisfied." The state water official starts shutting off headgates from the newest priority up. The New Farm's headgate is closed. The Old Farm irrigates a full crop. Same soil, same sunshine, same taxes, but one farm is a going business and the other is a very nice pasture of dry weeds.

Now ask a banker which is worth more. A parcel with a senior water right that can reliably irrigate is a different asset from the same parcel with a junior right or none. In many Western valleys the value of the land is largely the value of the water attached to it, and the water right is a separate piece of property that can sometimes be sold, leased or moved, subject to state approval and to the rule that other users cannot be harmed. That is why cities buy up farms to get their water, and why a farmer might be tempted to sell the right and keep the land, or the reverse.

That also tells you why a family farm's most valuable heirloom may be a decree in a courthouse drawer, and why Four Farm Families, Four Ways to Hand the Land to the Next Generation spends so much time on what happens when the next generation inherits the dirt but not the date. (It is also a reminder that "the land" in a Western estate is often really "the land plus a paper." If you run the numbers in Does Your Farm Owe Estate Tax? A Worksheet You Can Run at the Kitchen Table, include the water.)

The federal government gets a place in line: Winters

Then there is Washington. Prior appropriation works neatly when everyone files a claim and gets a date. It gets messy when somebody has a claim that was never filed.

In 1908 the Supreme Court decided Winters v. United States, a case from Montana. The Fort Belknap Reservation had been set aside for the Gros Ventre and Assiniboine peoples, and non-Indian settlers upstream on the Milk River were taking the water. The Court held that when the government set aside the reservation, it implicitly reserved enough water to fulfil the purpose of the reservation, and that the right dated from the creation of the reservation, not from the date anyone started using the water. In other words, those rights could carry a priority date that is far older than the settlers' claims, and they are not lost by simply not using them.

You can see the problem for the junior farmer. Many tribal and federal reserved rights have not yet been fully quantified, which means that in some basins nobody can tell exactly how much water the oldest claim in line is entitled to. That is a huge unknown for a farm planning its next twenty years. Whatever you think about the policy, the conservative principles of clarity, finality and the rule of law say the same thing: fix a number, in a court or a settlement, and let everyone plan around it. Many Western states have pursued negotiated settlements precisely for that reason.

Dividing a river between states: the Colorado River Compact

Prior appropriation works inside a state. But a river does not respect lines on a map, and the Colorado River runs through seven states. A first-in-time system across state lines would have let fast-growing California claim the river before the upper states had a chance to develop, and the upstream states knew it.

So in 1922 representatives of the seven basin states, with a federal representative chairing the talks, signed the Colorado River Compact at Santa Fe. The compact divided the basin into two halves. The Upper Basin (Colorado, New Mexico, Utah and Wyoming) and the Lower Basin (Arizona, California and Nevada) each received the right to use 7.5 million acre-feet of water a year. An acre-foot is the amount of water that would cover an acre of land a foot deep, which is about 326,000 gallons. Add the two halves and you get 15 million acre-feet a year, the number built into the deal.

The thing that every Western water reporter eventually says is that the compact was negotiated in a period that turned out to be wetter than the river's long-run average. The negotiators assumed a flow that later records did not always deliver. Add the 1944 treaty with Mexico, which committed additional water to Mexico, and you get a river that has been promised more water, on paper, than often flows. That mismatch is the root of the long-running arguments between the states. I am not going to predict how those arguments end. I will only note that a compact is a contract between sovereigns, approved by Congress, and the Supreme Court has been the referee when the states could not agree (the major example is Arizona v. California in 1963).

The best argument against all of this, and an answer

The strongest critique of prior appropriation goes like this. It locks in decisions made in the nineteenth century, it rewards the first arrivals regardless of how efficiently they use the water, it makes it hard to shift water to higher-value uses such as growing cities, and it shortchanges the environment. Why should an 1885 ditch trump a 2026 town, or a trout stream? Shouldn't government simply reallocate the water to whoever values it most?

It is a serious point, and part of it is true: the system does have rigidity, and its transfer rules can be slow and expensive. But the answer is that the cure for rigid property is not no property. Consider what happens when a government decides to reallocate water by decree. Every farmer who invested on the strength of a water right now holds a piece of paper that is only as good as the next committee vote. The thing that made investment possible in a dry land is the promise that your claim will be honored. Break that promise and you do not get a smarter allocation; you get a stampede of lobbyists and a lot of lawsuits.

The better approach, and the one many Western states have moved toward, is to make it easier to trade water voluntarily. A city that needs more water can lease it from a farmer in a dry year, with the farmer paid and the land kept in the family. Water banks, option contracts and leasing arrangements let a senior right-holder profit from conservation without surrendering the right. Markets work in the desert too; they just need clear titles first. (That principle, that voluntary exchange backed by firm rights beats top-down control, runs through Who Owns the Oil Under Your Farm, and Why America Answers Differently as well, where the same kind of question about mineral rights gets a different American answer.)

When Washington redraws the map of the water

One more wrinkle. Federal regulation of water quality, as distinct from water quantity, is a different branch of the law. The Clean Water Act governs what you can put in "waters of the United States," not who owns the right to use them. Farmers confuse the two all the time, and the confusion is understandable, because both involve a federal agency, a form and a ditch. If you want the story of how far the federal reach went and where the Supreme Court pulled it back, How a Backyard Lot and a Farm Pond Became Federal Waters, Then Didn't has the dates. And for the property-rights questions that arise when government changes the rules on land you already own, The Takings Clause in Four Cases Every Landowner Should Know is worth a read.

What to do if your livelihood depends on a ditch

If you own Western farmland, or you are thinking of buying some, here is a short checklist.

1. Ask what water comes with the land, in writing. Request the water right's decree number, priority date, amount and place of use. Do not take a seller's word.
2. Check whether the right has been used. Ask for records of diversion and irrigation. A right that has gone unused for years may be at risk.
3. Learn who is senior and junior to you. Your state's water agency, often called the state engineer or the department of water resources, can tell you where you sit in line.
4. Do not move or change a right without approval. Changing the point of diversion, the place of use or the type of use usually needs a state process, and can be challenged by neighbors who fear harm.
5. Hire a water lawyer for any sale, lease or transfer. This is one of the clearest cases where an hour of expert advice can save a fortune. Rules differ in every state, so check your own state's water code.

The bottom line

• In the West, water is property, and the date on the right is everything. First in time, first in right is not a slogan; it is the rule that decides who farms in a drought.
• A senior water right can be worth as much as the dirt it irrigates, or more. Anyone buying, inheriting or selling Western land should treat the water as a separate asset and get it in writing.
• Property rights are what make dry-country investment possible. The case for protecting senior rights is the same as the case for protecting any other property: people build when the payoff is safe.
• The fix for rigidity is voluntary trading, not confiscation. Leases, banks and clear titles let water move to its best use without breaking the promise that made the farms possible.
• Check your own state's water code before you act. The rules differ from Colorado to California, and an hour with the state's water agency or a water lawyer is cheaper than a lost crop.