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One of the most controversial issues in natural resources law is whether interests in water are property. In the western United States, water is typically viewed by appropriators as a form of private property, while in the East it is not. In either case, the law is surprisingly unsettled, notwithstanding the important consequences that follow, particularly under constitutional takings jurisprudence.
Treating water as property has significant implications for investment, conservation and environmental protection as well. Establishing secure property rights can foster stewardship and wise investment of labor and capital. By the same token, the absence of property ownership can result in a “tragedy of the commons,” where a common resource is plundered as each selfish, yet economically rational, actor takes steps to promote self-interest with little regard for externalities that deplete the resource. On the other hand, public ownership of water is deeply embedded in western legal traditions, in recognition that water is essential to all life and must be safeguarded to prevent depletion and ensure satisfaction of a broad range of public needs.
This brief essay considers whether interests in surface water are property. Just over a year ago, in Spear T. Ranch v. Knaub, the Nebraska Supreme Court held “no,” but provided scant analysis in support of its conclusion.We assess both the nature of property and the nature of water, and then turn to the implications of treating water as property (or not) in Nebraska. These topics are the subject of a longer article in progress, which looks at water rights nationwide.