CHAPTER 3.  TENNESSEE RIPARIAN LAW PRINCIPLES - SIGNIFICANCE FOR WATER CONFLICTS

 

3.1 Introduction

Six states sharing common borders with Tennessee follow riparian law: Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia.  Each is a "regulated riparian" state.  Tennessee is, to some extent, a regulated riparian state.  The degree of regulation found in Tennessee is significantly less than that of these surrounding states because the state has had the good fortune to avoid the conflicts over water that led to increased regulation in surrounding states.  Thus, the law governing water withdrawals in Tennessee is almost entirely common law.  There has been very little legislation regarding water use in the state.  In fact, there is very little common law specific to Tennessee because disputes have been infrequent.  Conflicts that have reached the appellate courts have most often been about too much water rather than too little.

Many of the potential conflicts that can be expected to arise in the next decade or so in Tennessee have never been adjudicated in state courts.  The legal issues raised by our two case studies have never been considered with any specificity in Tennessee courts.  This chapter examines the principles of riparian law practiced in Tennessee in order to provide a basis for understanding these disputes.

3.2 Tennessee’s Water Law Principles

Overall it can be said that water rights in Tennessee depend upon the location of the water and whether it is confined.¹  Slightly different rules are applied to surface and groundwater.  If groundwater can be proven to flow in an underground stream channel, then surface water rules are applied to it.  It is usually difficult to prove that an underground stream exists.  Thus, most groundwater is treated as diffuse unless there are clear surface indications of its underground course.  Diffuse groundwater can be confined in an aquifer or flow (percolate) through the ground.  Diffuse surface water is, basically, runoff from precipitation.  Any person can capture precipitation and runoff.  The main legal issues with runoff arise when one landowner diverts or channels it from his land in a manner that causes damage to another's land.²

The foundation case for surface water law in Tennessee is Webster v. Fleming,³ which states: "It is firmly established in Tennessee that allocation of water in watercourses and lakes is based upon the doctrine of riparian rights."  This quotation from the 1841 case begins almost every discussion of water law in the state. The court goes on to say,

One riparian proprietor has no right to drain the stream or reduce it below its natural level, whether it be navigable or nonnavigable, if it impairs or destroys the interest and use of another riparian owner.  The riparian owner may by injunction in chancery protect his riparian rights, and prevent the draining of the stream or its impairment.⁴  

Rights to use water in Tennessee, as in other riparian states, are acquired by ownership of property touching on a watercourse or overlying an aquifer.  Property can be acquired by adverse possession; thus, riparian rights can be acquired by adverse possession of riparian land.  It is not clear if water rights can be acquired by prescription separately from land.  One case prevented a downstream riparian from enjoining a long standing diversion where the water was used on non-riparian land on the grounds that failure to previously complain that the diversion damaged his rights stopped him from lodging a later complaint.⁵

The legislature has given to municipalities, counties, water companies, watershed districts, charitable institutions, water treatment authorities, utility districts, the Department of Conservation (for parks), and the University of Tennessee powers to condemn riparian land and water rights by eminent domain.  Under these statutes, the rights of downstream riparians may be acquired by condemnation.⁶  "The use of this power will be narrowly and strictly construed within the terms of the delegation and must be limited to a public purpose."⁷  It is unclear if water rights may be condemned for municipal purposes if the diversion unreasonably injures lower riparians.  It is clear that a diversion that interferes with navigation is not permitted.⁸  However, there is no cause of action for interference with navigation for a private individual or riparian unless s/he suffers a "special injury."⁹  Protection of navigation is a state and federal power.

The Supreme Court has held that the power of eminent domain, having been given by the state, is within the power of the state to limit or revoke.  Further, "a revocation of that privilege is but a recall of a part of its sovereign power for which no price may be exacted."¹⁰

Several legal scholars suggest that a municipality may possess rights that are superior to a riparian's rights.¹¹  The theory is that the municipality is acting for the public; thus, the public has rights in all waters of the state and the municipality would not be limited to sharing among riparians.¹²  This has considerable implications for water withdrawal rights in the state.

Complicating the picture even further is the problem of allocating water among competing condemners.  An example would be when two adjacent municipalities along a watercourse both withdraw water for public purposes.  If the combined withdrawals would degrade the watercourse, the issue arises as to which municipality's right to withdraw water must be curtailed.  The legislature has not acted to clarify this problem.  The courts appear to have adopted a "first in time, first in right" approach to resolve claims among competing public users.¹³ This is not an adequate solution, especially in a time when public withdrawals are increasing statewide.  In a case that was settled before reaching the appellate court, a conflict arose between the cities of Gatlinburg and Sevierville over a proposed withdrawal from the Little Pigeon River by the former.  Sevierville claimed this would damage its use of the river for its citizens.  A compromise was reached whereby Gatlinburg's withdrawal was returned to the stream bed after use, leaving Sevierville unharmed.  Such compromises fail to solve conflicts where withdrawals result in consumptive uses so great that return flow is inadequate to protect the downstream public user.

Every riparian has an equal right to use the water in a stream.  No riparian has the right to use water in a manner that damages other riparians without their consent.  Some uses of water are considered preferred uses that take precedence over other uses. Two priority water uses seem to be recognized in Tennessee: water withdrawals for domestic use and instream water for navigation.  In American Association v. Eastern Kentucky Land Co. the court found that a riparian has an absolute right to take water for domestic use, even if it exhausts the stream.¹⁴  On the other hand, if a stream is navigable in any sense, the riparian must make allowances for, or yield to, the public interest in navigation.¹⁵  Ordinarily, domestic preference is not available to municipalities and water supply companies, despite the fact that they provide water for drinking and washing.  However, as mentioned above, municipalities may be able to rely upon their status as instrumentalities of the state to assert greater water rights than other riparians.  On navigable streams, although there are no Tennessee cases on this, it is fair to assume that navigation might trump municipal uses where the two uses come into conflict.¹⁶

In deciding between two competing uses of water, one might ask if it makes a difference that one owner has used the water for a long time whereas the other owner has only recently begun to use it.  Under riparian law, generally not however, ["I]f none of the other factors provides a basis for preferring one riparian use over another, the courts typically protect the earlier user."¹⁷

3.3 Reasonable Use Issues

Tennessee follows the "reasonable use doctrine" for surface water.  Under this doctrine, each riparian owner has the right to make a reasonable use of the water passing by his land.  Generally, the definition of "reasonable" is limited to uses on or for the benefit of the riparian land itself.  Clearly, municipalities and water companies often withdraw water from streams for uses on land not considered "riparian."  In Tennessee, the courts have permitted nonriparian uses by customers of municipalities that are riparians.¹⁸ The reasonable use rule imposes reciprocal duties on both upper and lower riparians.  Lower landowners have a duty to take reasonable mitigation steps to avoid damage from actions taken by upper landowners.¹⁹

Nonriparian use is different from interbasin transfer.  The latter involves withdrawing water from a watercourse in one drainage and transferring it for use on land that is not part of the drainage of the watercourse from which the water was withdrawn.  While nonriparian use by a municipality may be reasonable under Tennessee law, interbasin transfers are considered per se unreasonable under riparian law if a lower riparian complains, and probably would be deemed so under Tennessee law.  There are no cases published in Tennessee that touch on this point.  The definition of "basin" is particularly important here.  It is fairly common for municipalities and water supply companies to withdraw water from one stream and discharge effluent into another that flows into the same larger watercourse some distance downstream.  There is no guidance from the courts as to what is permissible in this situation if a downstream riparian situated between the withdrawal and the discharge complains of damage.  There is one case where the court did not stop the removal of water out of a watershed.²⁰  However, the issue of interbasin transfer was not raised in this lawsuit and thus, no precedent was established.  The legality of interbasin transfers is likely to come before Tennessee courts in the future.  The legislature could act to provide needed standards for diversions before problems become acute.

The riparian prohibition against nonriparian uses and interbasin transfers assures that water is returned to the source from which it was withdrawn.  This preserves stream flow, aquifer recharge, and prevents damage to downstream riparians.²¹  The fact that the rule is often ignored is not a problem when there are ample supplies of water.  In times of drought or where development causes over-subscription of a water source, off-site and out-of-basin uses may be a problem. 

In Tennessee as in other riparian states, a riparian does not have a fixed, permanent right to an exact quantity of water.  The amount of water to which a riparian has rights varies depending upon the actual flow in the watercourse and the needs of other riparians along the watercourse at any given time.  Riparian rights cannot be lost because they are unused.  However, another user can obtain rights against a riparian by prescription or adverse possession.

3.4 Groundwater-Surface Water Management

Tennessee does not manage surface water and groundwater conjunctively.  Conjunctive management is the development and management of all water resources, both surface and groundwater, in a manner that recognizes their interrelationship in the hydrological cycle.²² Since ground and surface waters impact one another, depletion or pollution of one source would ultimately, if not immediately, affect other sources.²³  Statutory law in Tennessee has modified this non-conjunctive management pattern to some extent.  In the Water Quality Control Act of 1977, for example, Tennessee purports to own and exercise a public trust over all waters of the state - waters being defined as "any and all water, public or private, on or beneath the surface of the ground, which are contained within, flow through, or border upon the state of Tennessee or any portion thereof.” ²⁴  The only exception from regulation and state ownership are bodies of water confined to and retained within the limits of private property in single ownership which do not combine or effect a junction with natural surface or underground waters.  For pollution control purposes, Tennessee has enabled (although not actively promoted) conjunctive management of ground and surface waters.²⁵

Because surface waters in watercourses have been more accessible and visible, they have also been subject to greater use as a water source, particularly by municipalities.  There has been greater competition for surface water among users.  The impacts from use (e.g., consumption leading to depletion of flow and pollution) are more obvious.  Thus, more frequent disputes have arisen over surface waters, there is more case law, and more statutory regulation of water use.  Diffuse surface waters have also received substantial attention because actions by one landowner to divert or channel runoff from his property often causes flooding and damage to another's.²⁶

Groundwater, on the other hand, has been considerably less regulated, in part because the need to do so was not apparent.  Groundwater is presumed to be percolating water unless proven to be an underground stream.  Since this is usually expensive and difficult to prove, most groundwater is dealt with as if it were percolating.

The entire basis for groundwater law in Tennessee is a single case:²⁷ Nashville, C. & St. L. Ry. v. Rickert²⁸ involved a landowner who drilled a well near a sinkhole and pumped the sinkhole dry causing a spring on adjacent land to dry up.  The landowner had sold the adjacent land to a railroad which purchased it in order to use the spring for its business.  The holding of the case for purposes of defining Tennessee groundwater law is complicated by the landowner's duplicity in depriving the railroad of the object of their purchase after he completed the sale of the land.  Nevertheless, the Rickert case has been interpreted as holding that in Tennessee groundwater rights are correlative to the rights of other landowner's reasonable use of the same aquifer. 

Generally, under the correlative rights doctrine, there is no quantification of water rights, no priority of uses, and no lawful uses of water off overlying land or outside the recharge basin.²⁹ These issues were not raised in Rickert and remain undecided in Tennessee.  Vincent Sikora suggests that the case could stand for the proposition that an overlying owner does not have a right to a certain water level or pressure if another owner is using water from the aquifer for reasonable purposes.³⁰

While it is assumed by most legal scholars that Tennessee follows the correlative rights doctrine of groundwater law, there are few to no cases that provide legal precedent - for what this is worth.  It is in looking to the court decisions in nearby riparian law states and in looking at the Restatement of Law that the factors determining the balancing test to be followed are found.³¹  Moreover, consideration of the totality of the situation, and examining the facts on a case-by-case basis characterize the deliberations of state and federal courts as well as the Supreme Court on water rights matters.  

3.4.1 Timing of Lawsuits  

Riparian law is tort law.  Ordinarily, unless one can prove damage to one's water rights, there is no cause for action against another riparian who uses the same water source even if their actions may damage the planned uses of one’s riparian property.  There are no cases in Tennessee that decide the issue of the timing of a lawsuit for damage to water rights.  "Whether an injury occurs to a riparian whenever there is an unlawful diversion or only where there is damage, remains unclear.³²

3.5 Water Supply Legislation

There has been very little legislation affecting water rights in Tennessee.  Two statutes, however, should be noted.  They are:  

The Watershed District Act of 1955, which authorized the establishment of watershed districts with the power, including eminent domain, to develop their water resources.³³

The Water Quality Control Act of 1977, which imposes specific controls over a user's right to pollute the waters of the state.³⁴  Included in the statute is the assertion that the waters of Tennessee are the property of the state and held in public trust for the use of the people of the state.  The statute requires that a permit be obtained before a party carries out any activities that may result in the "alteration of the physical, chemical, radiological, biological, or bacteriological properties of any waters of the State.  The definition of "activities" includes water withdrawals.³⁵

Section 69-8-105 of the Water Quality Act as codified requires that "any person now withdrawing" over 50,000 gallons of water per day register with the Division of Water Supply of TDEC.  The wording of the registration provision is unclear.  No cases have applied it or interpreted it.  No regulations have been promulgated under it.  Legal scholars find the word "now" in the statute ambiguous.  "'Now' may refer to 1963 when the section was passed which excludes all subsequent withdrawals, or to the present as a continuing registration requirement."  The section also requires notice to the division by anyone "who renews a withdrawal" which ceased during the last three years, or anyone who is "currently" withdrawing 50,000 gallons per day and increases "withdrawal capacity" by 10 percent or more.  The provision only pertains to "withdrawal capacity" and not actual withdrawals or use.  Neither provision is regulatory.  They are merely informational since the Division of Water Supply was given no authority to control withdrawals and notice may occur up to 30 days after operation.  Failure to register as required by the law is a Class C misdemeanor.

To some extent, the Division of Water Pollution Control regulates water use and withdrawal by control of any activity that may in any way alter the "physical, chemical, radiological, biological, or bacteriological properties of any water of the state in any manner not already lawfully authorized under section 69-3-108(b).”  The Division requires an "Aquatic Resource Alteration Permit" (ARAP) before the activity may take place.  These rules encompass granting permits before engaging in any construction, installation, extension, or modification of water withdrawals which would alter the physical properties of any state waters, and grants to TDEC authority to consider the rate of flow of state waters and loss of stream length or water levels.

The Division currently has proposed rules out for comment that prescribe the procedures for these permits.  The rules include water withdrawals as one of the activities subject to permitting if alteration of any water would result.  Permits can be denied if there is "a significant change of the physical condition(s) of the site or the waters" among other things.  The proposed rules state: "In order to uphold the public trust and protect all present and future uses of waters, the following factors, in addition to all other requirements of this rule, shall be considered in making determinations concerning permit issuance: . . . direct loss of stream . . .waters due to the proposed activity, . . . reasonably likely cumulative or secondary impacts attributable to the proposed activity, . . hydrologic modifications resulting from the proposed activity, . . . and any other relevant factors."  It is unlawful for any person to carry out the above mentioned activities except in accordance with the conditions of a valid permit.³⁶

The State of Tennessee has powers to regulate water withdrawals that may affect public health or navigation under its fiduciary responsibilities.  The State may also act under its police powers in time of emergency such as drought.  In addition, any significant withdrawals probably must be registered with the state, any increases of capacity of more than 10 per cent where current withdrawals are 50,000 gallons or more per day must be reported to the State, and the State can require that an ARAP be obtained before withdrawals be carried out where there are relevant factors making such a permit appropriate.  Because the State can deny an ARAP where a withdrawal will cause inappropriate alteration of state waters, withdrawals that would have that effect can be prohibited.

The Division of Water Pollution Control also requires permits for discharges of pollutants into streams.  The division may attach conditions to a permit that direct the amount and location of water returned to a stream.  By controlling the flow in this manner, the Division affects the amount of water available to other users.  The Water Quality Control Act empowers the Director of the . . . Division to "implement the basic water resource policy of the state by creating and defining the rights of respective competing users of the water resources of the state" among other powers.³⁷  

3.6 Federal Agency Powers

No evaluation of water rights in Tennessee is complete without reference to federal water rights and powers in the state.  Two federal agencies have major presence in Tennessee.

The Tennessee Valley Authority has statutory authority to manage the entire multi-state basin of the Tennessee River and its tributaries for flood control, power production and navigation.  The TVA Act of 1933 gives great authority to the agency to oversee and manage most aspects of the flow of water in the Valley.  Allocation of water for off stream use is left to the riparian state system.  However, with regard to surface water withdrawals, TVA has sufficient power to have noticeable effect on the state's practices.  Under Section 26a of the TVA Act, the agency has authority to approve construction of any structures on, in, or along the Tennessee River or its tributaries that could affect navigation or flood control or that could be hazardous to health or otherwise interfere with TVA operations - including water supply or intake lines.³⁸

The powers of the U.S. Army Corps of Engineers extend to navigation and flood control.  The powers granted the Corps of Engineers over the navigable waters in Tennessee are not as broad as those for TVA.  Both agencies share the purpose of facilitating navigation for commerce and controlling floods.  Managing rivers with dams and locks to carry out this purpose, as both agencies do, also allows the Corps a role in power production through the installation of hydroelectric generators at several of its dams.  Control of flooding through channelization projects is a common Corps activity in the flatter, sandy land of west Tennessee.  Recently, the Corps has considered charging for water withdrawn from the Cumberland River system - a new policy development. 

State law generally controls the allocation of water and, for the most part, the federal government defers to the law of the state.  There are major exceptions to this deference, however.  The Constitution confers the complete authority to regulate commerce and navigation on Congress.  And, federal water resource agencies (e.g., the Corps and TVA) allocate water from their impoundments according to statutory mandates.  In addition, where Congress has articulated a federal purpose, such as preventing pollution of interstate waters, federal law has supremacy over state law and states can only regulate the federal government’s actions if Congress waives sovereign immunity.  Where federal lands have been reserved for a particular purpose, or where land has been acquired for a federal project, the federal government may carry out the federal mandate, even if doing so would bring the federal government into conflict with state water law.

There are numerous federal statutes that affect water rights by mandating or forbidding activities that have an impact on water or water rights.  Most of these statutes are considered "environmental law."  Federal environmental law affects state water rights by requiring permits before certain actions can be carried out and by attaching conditions to the permits.  The following comprise the most significant federal statutes that may override or modify supremacy state water law:

  ·                     The National Environmental Policy Act (NEPA) ³⁹  - If a federal project or the granting of a federal permit is "a major federal action significantly affecting the quality of the human environment" then an environmental impact statement must be prepared which sets out what the proposed action will do to the environment and identifies any alternatives to the action.  NEPA is essentially procedural.  It does not mandate a particular outcome rather it requires proof that environmental effects have been given adequate consideration before a project goes forward or a permit is issued.

  ·                     The Clean Water Act (CWA) ⁴⁰–This is the principal environmental law that affects state water law.  Whenever a federal license is required for a project that may result in a "discharge of pollutants" to the waters of the United States, the project proponent must obtain a "401 certification" from the state.  Under Section 401, the certification must contain any requirements necessary to ensure that permitted actions do not cause a violation of Tennessee water quality standards, and these requirements become conditions of the federal license. 

The Section 401 requirement (of the CWA) gives a state the power to veto a federal license or, alternatively, to impose requirements to protect water quality or aquatic habitats.⁴¹ The Supreme Court has held that under Section 401, a state has the power to require that minimum stream flows be maintained.⁴² The Clean Water Act requires that states maintain in-stream water quality standards.  The Supreme Court has also held that the required minimum stream flow is an "appropriate requirement of State law."  A water quality standard has both a "use" (for example, protection of fish and wildlife habitat) and a "criterion", which can be a numerical limit of a particular substance per quantity of water.  The Supreme Court also held that a state may require a permit applicant to comply with the use independently of any criterion.  In addition to water quality standards, every state is required to have an anti-degradation policy to protect waters that are cleaner than the water quality standards require.  To accomplish the goals of the Clean Water Act, many states have begun basin-wide permitting and planning.  Because much of the State of Tennessee is drained by the Tennessee River and its tributaries which are the subject of basin-wide management by TVA, this broader view is already practiced.

Section 404 of the CWA requires a permit from the U.S. Army Corps of Engineers before dredged or fill material can be deposited in the "waters of the United States" which includes wetlands.   

·                     The Endangered Species Act (ESA) ⁴³- If a water supply project will affect endangered or threatened species, it may be restricted or prevented by the ESA.  Section 7 requires that actions of federal agencies not jeopardize endangered species or destroy or seriously alter the species’ habitats.  Section 9 applies to any person subject to the jurisdiction of the United States and makes it a crime to "take" or "harm" an endangered species of fish or wildlife.  The Fish and Wildlife Service, which has authority for ensuring compliance with the Act, has defined "harm" to include "significant habitat modification or degradation."  The ESA is subject to reauthorization and, because it is controversial, standards may change.

·                     The Rivers and Harbors Appropriation Act ⁴⁴- passed in 1899, requires a permit from the Corps of Engineers to place any structure in a waterway that might affect navigation (Section 10).  For the Tennessee River, Section 26a of the TVA act serves the same purpose.  Such structures include intake and discharge pipes for water withdrawals and replacement of effluent.

·                     The Tennessee Valley Authority Act – created TVA and granted it broad powers to manage the entire watershed of the Tennessee River and its tributaries for flood control, power production and navigation.  In addition, TVA is empowered to manage the waters of the Tennessee Valley to ensure the protection of the environment and to promote recreation and economic development. 

·                     The Wild and Scenic Rivers Act ⁴⁵- is designed to preserve certain outstanding rivers in free-flowing condition and to protect these rivers and their immediate environments.  The State of Tennessee also has a Wild and Scenic Rivers act.

3.7 Summary

Riparian law is flexible and reflects the experience of people living in relatively abundant moisture.  Many commentators have stated that it is inadequate when water shortages are the norm.  Most states faced with chronic water shortages have taken steps to more securely vest water use rights through some statutory modifications of the common law.  The adequacy of riparian law for Tennessee under new demands on its waters is difficult to assess since the case law is scant.  The following are issues in Tennessee water law not yet addressed by the courts, and for which greater attention may need to be paid in reform efforts (e.g., see chapter 7):  

(1) Reasonable use – In riparian law, the definition of "reasonable" is subject to revision based on changed circumstances.  It is unclear if, for example, off-basin sale to a reliant municipality would be held by the courts to be reasonable if it adversely affected agricultural use on riparian land.

(2) Acquisition of rights by prescription.

(3) Unreasonable use/damage – The difficulty of proving damage from one particular use in a large artificially controlled and generally well watered system such as the Tennessee River is the issue.

(4) Correlative rights – What water level and pressure can co-users of an aquifer be required to preserve and what do they have the right to expect?

(5) Domestic preference – This once meant use by the riparian's household.  Because many households today rely on municipal water, this term can be seen as referring to a shift in preference from agricultural and riparian use to off-site municipal use for households. 

In the future, it appears that the General Assembly may need to address the following issues:

·                     Case by case resolution of disputes – This is always an appropriate strategy in riparian law and should probably continue to be the case.  However, it is expensive, time consuming and the outcome is always uncertain.  The last, in particular, has economic implications for development.  A more comprehensive and consistent set of state standards for water supply could be useful to industry, government and the courts. 

·                     The use of permits to solve conflicts among riparians - This is a change to law often recommended in times of water shortage.  The state of Mississippi made this change after suffering an extended drought.  The change came after state-wide consultation with affected interests coordinated by the Agricultural Bureau.

·                     Prohibition on some inter-basin transfers/permission for others - Under what circumstances will these be allowed and how far out of a given drainage (distance from point of diversion can affect likelihood of return flows)?

·                     Maintenance of minimum flows/instream flow.

·                     Eminent domain power granted to competing water districts.

·                     Nonconjunctive management of water sources.

Endnotes to Chapter 3