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South West Sand & Gravel, Inc. v. Central Arizona Water Conservation District - 11/10/2008

Arizona Court of Appeals Division One Holds That Land Owner Does Not Have Taking or Tort Claims Where Increase of River’s Water Levels Interfered with Mining Operation.


Pursuant to permits issued by the Arizona Department of Water Resources, the Central Arizona Water Conservation District (“District”) diverted water from a Central Arizona Project canal into the Agua Fria River so that surplus water could flow downstream for storage in an underground storage facility.  As a result of the diverted water, the water table beneath South West Sand & Gravel’s (“South West”) property elevated and interfered with the company’s mining business.  After South West sued on various tort theories and for a taking without compensation, the superior court granted summary judgment against South West.  This appeal followed.

Judge Thompson, writing for a unanimous panel, held that summary judgment was appropriate.  The court explained that Arizona has long recognized a right to use a natural stream to move and store water, and that A.R.S. § 45-173 (1994) expressly authorizes the use of a natural channel to deliver water to an underground storage facility.  Relying on West Maricopa Combine, Inc. v. Arizona Department of Water Resources, 200 Ariz. 400, 26 P.3d 1171 (Ariz. App. 2001), the court held that such use of a natural channel could not constitute a taking because South West’s ownership was always subject to Arizona’s reservation of natural channels to move and store water, and therefore the District’s actions under the permits did not alter South West’s pre-existing rights.

Turning to the tort claims, the court held that there could be no action for trespass because, although its property is in and around the natural water channel, South West had no right to exclude others from using the river.  Under West Maricopa Combine, the right to use natural water channels is not limited to natural water flow, and South West had no entitlement to a fixed water table level. 

Finally, the court held that the Arizona Department of Water Resources did not have to consider non-existing future uses in determining whether unreasonable harm would result from the issuance of a permit like the one the District received.

Judge Thompson authored the opinion; Judges Johnsen and Timmer concurred.

Posted On: 11/13/2008