A trial that began this week in Clark County could decide whether Nevada's water regulators can limit groundwater pumping without exposing the state to liability.
The case centers on Coyote Springs, a long-planned Southern Nevada community. The project's developers assert that their water rights are property under the Nevada Constitution and that the state's pumping restrictions amount to an uncompensated taking. They are seeking damages plus interest and attorney's fees, with a jury to determine the final amount if the developers prevail.
Hutchison & Steffen founding partner Mark A. Hutchison represents the developers. "We are laser-focused on proving that our case is clearly a situation where we have property interest in our water rights," Hutchison told the Las Vegas Review-Journal. "Those rights have been taken by the state, and the state needs to pay us hundreds of millions of dollars in just compensation."
The outcome could reach well beyond Coyote Springs. Nevada water law runs on prior appropriation: rights are ranked by seniority, and junior rights holders are the first cut off when supply runs short. Water attorneys who spoke with the Review-Journal say a ruling for the developers could call that entire framework into question, since any curtailed junior appropriator could then argue the state owes them compensation too.
Hutchison anticipates exactly that pushback. "I know the State Engineer is going to scream that the sky is going to fall if this happens," he said. "What the State Engineer has done has never happened before. If he continues to engage in this kind of activity, where he's going to reorder people's priority rights, as he has here, then maybe he's got to consider precedent-setting issues."
The non-jury portion of the trial before District Judge Mark Denton is expected to run 30 to 40 days of testimony and argument. On Friday, the Nevada Supreme Court declined the state's request to intervene before trial.
This article is for general information only and does not constitute legal advice. Nevada businesses and property owners with questions about water rights or takings claims can contact Hutchison & Steffen at 702.385.2500.