Background: 

ROSEMONT WELL PROBLEM

Under current Arizona law, when someone drills a new well next to an existing well, there is apparently no protection for the existing well as to the depth to groundwater that existing well owner can expect.

Thus, a new well can lower the water table with negative consequences to the neighboring well owner, without liability.

The following article summarizes a 2005 United States Court of Appeals for the 9th Circuit decision:

Court: Groundwater Pumper not Liable for Neighbors’ Loss  (2006 article)

(Brady v Abbott 9th Circuit # 04-15257)

In a decision that may not surprise those well versed in Arizona groundwater law, a court recently ruled against pecan farmers who sued a nearby landowner whose groundwater pumping caused a significant drop in the water table resulting in a loss of their orchards.

Abbott Laboratories, a neighboring landowner of the pecan farmers, two Casa Grande married couples, pumped groundwater to build a storage basement under its facility. In its application to the Arizona Department of Water Resources, Abbott, which is an Illinois corporation, stated it would pump the groundwater into an on-site retention basin so that it would sink back into the aquifer. ADWR required that Abbott annually report its dewatering activity to the agency. ADWR issued the corporation an emergency de-watering permit for 2.07 acre feet.

Encountering much more water than anticipated, Abbott increased its pumping to drain the construction project, with the result that 122 acre feet of groundwater was eventually pumped. Abbott did not seek a permit to pump the additional groundwater.

The increased pumping caused the retention basin to fill to capacity; Abbott channeled the excess groundwater to flow off the property. Pumping ended about March 1998.

Meanwhile the pecan farmers’ water table, which was 16 feet below the surface prior to Abbott’s pumping, dropped to 32 feet, the depth of the basement on the Abbott property. Their trees died, and the farmers sued Abbott on grounds of negligence and nuisance. A district court awarded the farmers $1.2 million, a ruling that was overturned by a federal Appeals Court .

The three-judge panel referred to a 1957 Arizona Supreme Court ruling that stated that common law doctrine in Arizona allows groundwater pumping if the water is extracted for a reasonable use on the property from which it is taken. If such terms are met, the pumper incurs no liability to adjoining landowners for damages resulting from groundwater depletion on their lands.

That some of the groundwater was channeled off the property was immaterial to the court. It stated that according to Arizona law withdrawn water does not have to be used so long as it is extracted for a reasonable beneficial use.

Abbot acknowledged that its removal of excess water violated the permit’s conditions and that the required annual reports were not properly filed. Abbott agreed to pay a $6,508 fine to the state.

In his concurrence, Judge Jerome Ferris stated, “If we were not bound to follow the Arizona Supreme Court, I would urge that Arizona’s reasonable use doctrine no longer depend solely upon whether the use of the water benefits the property from which it is extracted. Accounting for the amount of water used, considering the utility of competing waters uses, and acknowledging the rights of adjacent water users seems especially important in an arid, rapidly growing state like Arizona.”

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In the court case, one of the judges noted that:

“In authorizing strict water permit restrictions as well as public notice and the opportunity for administrative hearings on proposed water permits, the Arizona legislature has indi­cated that Arizona water users must consider the rights of adjacent property-holders. Ariz. Rev. Stat. §§ 45-518(A)(4), 45-523 (2005). Unfortunately for the Bradys and other Ari­zona water plaintiffs, the Arizona legislature has not provided an express private cause of action, nor has the Arizona Supreme Court had occasion to imply one, against those who, for the benefit of their own property, unreasonably and ille­gally interfere with the water rights of their neighbors.”

* * * *

With regards to Rosemont, it is assumed the wells they are drilling will ultimately be used to withdraw groundwater pursuant to ARS 45-514 or 515 which states:

45-514. Mineral extraction and metallurgical processing permit; conditions for issuance; duration of permit

A. Except as provided in subsection D of this section, a person who is engaged in or proposes to engage in the extraction and processing of minerals shall be issued a permit to withdraw groundwater in the required amount, if all of the following apply:

1. The amount of groundwater available for mineral extraction, metallurgical processing and compliance with applicable environmental controls under a dewatering permit is insufficient.

2. Uncommitted municipal and industrial central Arizona project water is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost which does not exceed the current municipal and industrial central Arizona project delivery rates.

3. Other surface water of adequate quality or effluent of adequate quality is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost, including treatment costs, which does not exceed by twenty-five per cent the cost the operator would otherwise incur in withdrawing groundwater.

4. The applicant does not own or lease type 2 non-irrigation grandfathered rights originally based on withdrawals of groundwater for the extraction or processing of minerals that the applicant is not using or leasing and that can be used at the proposed location without imposing an unreasonable economic burden on the applicant.

B. A permit issued pursuant to this section shall be granted for a period of up to fifty years, subject to renewal under the same criteria used in granting the original permit.

C. If, during the duration of a mineral extraction and metallurgical processing permit, the director determines that uncommitted municipal and industrial central Arizona project water is available or surface water of adequate quality or effluent of adequate quality is available to the permittee at a cost comparable to groundwater, the director may require the permittee to use such water in lieu of groundwater.

D. Beginning January 1 of the calendar year following the year in which a groundwater replenishment district is required to submit its preliminary plan pursuant to section 45-576.02, subsection A, paragraph 1, and except for an application to renew a mineral extraction and metallurgical processing permit, on receiving a permit application the director shall not issue a permit for a well in the district unless at the time the application is filed:

1. The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.

2. The master replenishment account, as established in section 45-858.01, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, subsection A, paragraph 3.

45-515. General industrial use permits; conditions for issuance; duration of permit

A. Except as provided in subsection D of this section, the director shall issue a permit to withdraw groundwater from a point outside of the exterior boundaries of the service area of a city, town or private water company for a general industrial use outside of the exterior boundaries of such service area if the director determines that all of the following apply:

1. Uncommitted municipal and industrial central Arizona project water is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost which does not exceed the current municipal and industrial central Arizona project rates.

2. Other surface water of adequate quality or effluent of adequate quality is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost, including treatment costs, which does not exceed by twenty-five per cent the cost the operator would otherwise incur in withdrawing groundwater.

3. Irrigation grandfathered rights appurtenant to acres of land in reasonable proximity to the intended general industrial use are not available for purchase at a reasonable price or cannot be acquired by eminent domain and the applicant does not own or lease grandfathered rights that the applicant is not using or leasing, that may be used for the intended general industrial use and that can be used for the intended general industrial use without imposing an unreasonable economic burden on the applicant.

4. The intended general industrial use, if located within three miles of the exterior boundaries of the service area of a city, town or private water company, has been denied service by the city, town or private water company at the customary rate in the customary manner. The requirement of this paragraph does not apply to an expanded animal industry use.

5. The management plan for the active management area can be adjusted to accommodate the intended general industrial use consistent with the achievement of the management goal for the active management area.

6. There is an assured water supply for the intended use at the intended point of withdrawal. The director may waive this requirement if the director is unable to determine if there is an assured water supply because of hydrogeologic conditions underlying the point of withdrawal. For purposes of this section, "assured water supply" means that sufficient groundwater of adequate quality will be available to the applicant to satisfy the projected general industrial use for the duration of the permit.

7. If a new well or replacement well at a new location is to be constructed, a permit for the well has been issued pursuant to section 45-599.

B. A permit issued pursuant to this section shall be granted for a period of up to fifty years, subject to renewal under the same criteria used in granting the original permit.

C. If, during the life of the permit, the director determines that uncommitted municipal and industrial central Arizona project water is available or other water or effluent of adequate quality is available at a cost comparable to groundwater, the director may require the permittee to use such water in lieu of groundwater.

D. Beginning January 1 of the calendar year following the year in which a groundwater replenishment district is required to submit its preliminary plan pursuant to section 45-576.02, subsection A, paragraph 1, and except for an application to renew a general industrial use permit, on receiving a permit application the director shall not issue a permit for a well in the district unless at the time the application is filed:

1. The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.

2. The master replenishment account, as established in section 45-676, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, paragraph 3.

Note that there is nothing in either statute that addresses the lowering of water tables impacting adjacent wells.

What an adjacent well owner can do is file a protest under 45-523 and have a hearing.

45-523. Notice; objections; hearing

A. Except as provided in section 45-518, subsection D and section 45-519.01, subsection F, when the permit application is determined complete and correct, the director shall, within fifteen days of such determination, give notice of the application once each week for two consecutive weeks in a newspaper of general circulation in the county or counties in which the active management area in which the applicant proposes to withdraw groundwater is located.

B. Notice pursuant to subsection A of this section shall state that objections to the issuance of the permit may be filed, by persons residing in the active management area, in writing, with the director within fifteen days after the last publication of notice and that objections are limited to whether the permit application meets the criteria for issuance of a permit as set forth in this article. An objection shall state the name and mailing address of the objector, be signed by the objector, the objector's agent or the objector's attorney and clearly set forth reasons why the permit should not be issued.

C. In appropriate cases, including cases where a proper written objection to the permit application has been filed, an administrative hearing may be held before the director's decision on the application if the director deems a hearing necessary. The director shall, thirty days prior to the date of the hearing, give notice to the applicant and to any person who filed a proper written objection to the issuance of the permit. The hearing shall be scheduled for not less than sixty days nor more than ninety days after the expiration of the time in which to file objections.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.

But there is no authority allowing the Arizona Department of Water Resources to require any mitigation of the impact of lowering the water level that affects adjacent wells.