Unbundling Property in Water

Sandi Zellmer, University of Nebraska Lincoln
Jessica Harder, University of Nebraska

Abstract

Attempts to privatize water resources have triggered a “morality play of rights versus markets, human need versus corporate greed.” Salzman (2006). The controversy is not limited to the developing world. One of the most divisive issues in contemporary natural resources law in the United States is whether interests in water are property. According to the Restatement of Property, the term “property” describes “legal relations between persons with respect to a thing.” Of course, not all economic relationships give rise to property rights. The common metaphor for property, a bundle of rights, does little to illuminate defining characteristics of property or to resolve disputes over whether constitutional or common law claims involve property.

Judicial treatment of water is all over the map. The Court of Federal Claims awarded California irrigators millions of dollars as compensation for a taking of their property rights when flows were curtailed to protect endangered salmon, but other federal and state courts have found just the opposite. To unbundle the concept of property, this article critiques the conflicting approaches for water and proposes an alternative means of identifying tangible and intangible things as property. We use a web of interests as a strong yet flexible metaphor for property, complemented by a patterning definition representing elemental strands of the web. If the interest in question is not an irrevocable interest in the exclusive possession and use of a discrete, marketable asset, it is not “takings property.” Merrill 2000. Viewed through this lens, it becomes clear that interests in water in most jurisdictions are not takings property, although they may be a limited form of property for purposes of due process or common law claims.