Water rights ruling could leave Ariz. communities parched

PHOENIX — A new Arizona Supreme Court ruling could pave the way for rich corporations to buy up water rights and leave communities in the state with no say in the matter, officials say.

Without dissent, the high court concluded Thursday that only “interested parties” have a right to protest the transfer of water and water rights from one area to another. The justices said the desire of cities and counties in preventing the transfer, whether to protect tax proceeds or ensure future water supplies, does not make them “interested parties” with the right to intercede.

Mohave County Supervisor Steven Moss said the ruling has significant implications that go far beyond his county’s legal fight.

“They stated that, under the statute, whether it’s in the ‘public interest’ or not, or whether it hurts the public or not, doesn’t matter,” he said of the ruling. “I really don’t think that is a decision that should make any resident of Arizona happy.”

Moss pointed out that Arizona remains deep in a multiyear drought.

“That means people are going to be looking to mine water,” Moss said. “They’re going to be looking for transfer from one point to the other.”

“And that means there are going to be winners and losers.”

Moss said the winners are likely to be those with money.

“A rule has been put in place which, if interpreted going forward, will have a hugely adverse impact on residents of Arizona compared to what multinational corporations might dare to do,” he said. “Residents are going to be on the short end of the stick because local governments cannot intervene now to protect them.”

But the Department of Water Resources, which fought Mohave County’s efforts to intercede in this case, had a different take.

“We are pleased with the Supreme Court’s decision upholding the department’s interpretation of Arizona state law regarding what types of objections may be raised,” said agency spokeswoman Michelle Moreno.

The case stems from a 2010 request by Freeport Minerals Corp. to transfer the water rights from the land within the Planet Ranch in Mohave County, east of Parker, along the Bill Williams River.

Those rights would be transferred to a well field near Wikieup, also in Mohave County, which, in turn, would be used at the Bagdad Mining Complex in Yavapai County for mining and municipal uses. The plan also involved moving rights to other areas within Planet Ranch for a conservation program.

No actual water would be moved. Instead, the transfers concern the “right” to use water for certain purposes.

As required by law, when Freeport applied for the transfer, the water agency published a notice saying “any interested person” could file written objections. Mohave County used that to raise its concerns that the transfer would result in lower tax proceeds and that the county has a “strained” water supply.

Maricopa County Superior Court Judge Crane McClennen ruled the Department of Water Resources had to consider the county’s objections.

“The action of ADWR was contrary to law, was arbitrary and capricious, and was an abuse of discretion,” he wrote.

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Thursday’s Supreme Court ruling overturns that decision

Chief Justice Scott Bales acknowledged the phrase “any interested person” is “ambiguous because it is not statutorily defined and is subject to more than one reasonable meaning.” But he rejected the county’s contention that it is broad enough to include anyone having an interest or concern about something.

“This argument effectively renders the word ‘interested’ meaningless, as it would result in reading the statutes as saying any person may file objections if so inclined,” Bales wrote. Instead, he said, the court is interpreting the phrase to mean objections can be filed only by those who have an actual legal interest in the water.

“The county acknowledges that it has no such rights,” the justice said.

Moss, who is an attorney, contends the court’s narrow interpretation is wrong.

He alleged the public interest was not served because Freeport is “selling something (to the government) they don’t have.”

Moss said Arizona law requires people who claim the right to surface water to essentially use it or lose it. And he said Freeport was not using it, meaning the rights belong to the public.

“And that’s not in the public interest,” Moss said.

Doug Dunham, a special assistant to the water agency’s director, acknowledged there is a general requirement to use water or lose rights. But Dunham said his agency determined that Freeport had not forfeited its rights.

Dunham also disputed the county’s contention that giving Freeport the right to pump water from the Wikieup field — all without transferring actual water to replenish it — means that other property owners in the area could end up having to cut back on their own pumping.

Dunham said Freeport has committed not to pump more water in the future than it is using now. What the agreement provides, Dunham said, is a more legally secure claim to the water.

Bales acknowledged that Thursday’s ruling was deliberately rushed.

The reason is that the approval of the transfer is a requirement of settlement agreements among Freeport, the Department of Interior, the state Game and Fish Department and the Hualapai Tribe.

Congress approved the deal last year. But the authorization was set to expire at the end of the year if certain conditions were not met by Dec. 15, including a final non-appealable decision to grant Freeport’s applications.

The 8,400-acre Planet Ranch and its water rights originally were acquired in 1984 by Scottsdale for $11.7 million in an effort by that city to ensure it had enough supply to meet future needs.

It even continued a money-losing alfalfa ranch on the property to preserve those rights while it sought a way of moving the water, potentially through the Central Arizona Project canal.

That plan never panned out. So in 2011, it sold the ranch to Freeport for about $10.1 million along with some rights to additional water through Salt River Project.