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Whose Water Is It, Anyway?

Michigan Supreme Court May Decide

July 27, 2006 |
Great Lakes Bulletin News Service

Eartha Melzer/Snowball Media

Resistance to pumping and selling water from Mecosta County aquifers is fierce; several opponents have blockaded trucks attempting to ship water from the Nestle bottling plant, which is near Stanwood.

A small Mecosta County-based citizens group, which has for five years mounted legal challenges against the authority of the world’s largest food company to pump Michigan’s spring water and sell it anywhere, is awaiting word from the state Supreme Court on whether it will hear the group’s case. 

The David and Goliath legal battle has generated worldwide attention, influenced state legislation to prevent large diversions of Michigan’s fresh water, and prodded Great Lakes states to reconsider the vulnerability of their most important natural resource. At issue is this: Who has the authority—the state or private companies—to decide where and for what purpose Michigan’s fresh water is used?

Earlier this year the citizens group, Michigan Citizens for Water Conservation, asked Michigan’s seven Supreme Court justice to overturn last year’s state Appellate Court ruling that allowed Nestle Waters North America to continue pumping spring water, bottling it at the company’s Ice Mountain plant in Stanwood, and shipping much of it outside of the state.

If the Supreme Court takes up the case, say legal experts on both sides of the issue, the ramifications could be very significant. The case could determine if the State of Michigan has oversight of Michigan’s abundant supply of fresh water, a natural resource becoming ever scarcer globally and already more valuable than oil. The high court is expected to announce its decision in the fall.

A state Supreme Court ruling could also shed more light on public interest decisions by the Appellate Court. That court in recent years has often favored business profitability and property rights over public interest concerns. In 2004, for example, a three-judge Appellate panel, in a property dispute along Lake Huron, ruled against citizens seeking the right to walk on Great Lakes beaches. The Supreme Court reversed that decision unanimously a year later.

Although property owners and the public are on the same side in the Mecosta citizens’ appeal, a state Supreme Court ruling could still make some important decisions about the extent of private rights both for businesses and property owners.

“I’d be surprised if they didn’t take this case,” said Clifford Bloom, an attorney associated with the Michigan Lake and Stream Associations, which filed a friend of the court brief with the Supreme Court on behalf of the citizen organization. “The issues it’s dealing with are so important to this state.”

The lead lawyer for the citizens group, Traverse City attorney Jim Olson, agreed.

“Our understanding of the issues has evolved and become clearer,” said Mr. Olson. “If the Court of Appeals decision stands, we will be in a crisis over trying to maintain the legal rights of the public and private landowners in our lakes and streams against private diversions and exports of water from our watersheds.”

Executives at Nestle Waters North America declined to respond to repeated requests for an interview by the Great Lakes Bulletin News Service. Following the Appellate decision last November, the company issued this statement: “The court’s ruling supported Nestle Waters’ legal arguments in upholding Michigan’s historic water use laws, which allow for the balanced and reasonable use of water by all parties.”

A Big Case Over a Small Spring
Michigan Citizens For Water Conservation vs. Nestle Waters North America began making its way through the state judiciary in June 2001, when the organization filed a lawsuit to stop Nestle from pumping groundwater from Sanctuary Springs in Mecosta County and selling it throughout the Midwest and beyond as Ice Mountain bottled water.

In November 2003, after a 19-day trial, Circuit Court Judge Lawrence Root ruled in the citizen’s favor. Judge Root determined that Nestle did not have the right to pump drinking water and then sell it outside of its natural basin. The judge also ruled that the Nestle wells clearly violated three state environmental laws because they were draining a system of lakes, streams, and wetlands, unreasonably harming landowners, and harming the environment.

Judge Root ordered Nestle Waters to shut down the spring water wells, which are located 12 miles north of the plant, a decision that reverberated across Michigan’s business community and compelled Democratic Governor Jennifer M. Granholm to intervene on the company’s behalf, keeping the plant open and its 120 jobs intact while Nestle appealed.

So far, the appeal has gone well for Swiss-based Nestle. The Appellate panel, in a ruling November 29, 2005, explicitly provided the company the right to withdraw Michigan’s groundwater to bottle and export. The Appeals Court also clarified the standards and circumstances under which the state can regulate the trade in water.

The Core Issues
There are two core issues at the heart of the citizens’ request to the state Supreme Court to hear the case. The first involves deciding which legal test is appropriate for water use decisions when there are competing claims. The citizens group argues that the rights of people who live along streams cannot be legally diminished by business interests that seek to divert water out of the watershed that feeds the stream.

Nestle argues that all users deserve to participate regardless of how they use water, so long as the use is reasonable. The company says it is not depleting the resource—although the Circuit Court and Court of Appeals disagreed—and that, in addition, its economic use by the company creates jobs and wealth that outweigh any harm.

The second issue is defining which water resources—lakes, groundwater, tributaries, streams, and rivers—are public and require state oversight. Historically, Michigan statutes have defined most waters as a public resource, with added protection for those which are navigable. The principle of navigability was developed in the 19th century when logging companies floated timber to sawmills. A waterway is considered navigable and thus public if 20 to 40 foot logs can be floated on it.

Michigan Citizens for Water Conservation contends in its appeal that if waters are navigable and “public,” the state has the obligation and duty to safeguard them for the citizens as a “public trust.” The group contends that the spring Nestle is tapping for its bottled water is at the headwaters of a small stream along which some of its members live, and which the public uses for canoeing and fishing. The citizen group contends that the stream is navigable and therefore subject to public trust protections by the state.  It also contends that even if a stream is not navigable, if its use harms downstream public trust waters, then the public trust has been harmed.

The Court of Appeals, however, did not agree. It held that small tributaries and groundwater are not navigable, therefore not public, and not included in public trust protections, a view shared by Circuit Judge Root in an early decision in the case.

If it takes up the case, the Supreme Court is likely to sort out this issue. “To say that a navigable stream is protected by the public trust, but a tributary or groundwater that feeds it isn’t, really creates a judicial loophole in the public trust doctrine,” said Noah Hall, a longtime advocate for water protection and an assistant professor of law at Wayne State University Law School in Detroit.

Mr. Hall, an expert in water law, added: “If the Supreme Court takes the case, I’d like to see it add all waters connected to navigable waters to the public trust doctrine. It doesn’t make any sense not to. It’s an outdated legal view in terms of groundwater science.”

Appeals Court Differs from Circuit Court
The Mecosta case marks the first time the Michigan Appellate Court considered how groundwater pumping for bottled water affected surface waters. Judge Root ruled three years ago that owners of land along streams have legal standing superior to those who use groundwater to bottle and sell out of the Great Lakes basin.

But the Appellate panel reversed Judge Root on this point. The panel determined that people who use groundwater, regardless of its destination, have legal standing equal to so-called riparian owners.

The Appellate ruling also bolstered the water company’s assertion that it is foolish to regulate bottled water on the basis of where it is eventually sold. Nestle asserts it has the same rights as anybody else to use Michigan’s fresh water and that where it is sold is inconsequential.

Chris Shafer, a professor of law at Cooley Law School in Lansing and one of the citizen group’s attorneys, contends the Appellate court set a new standard that treats as equal the rights of groundwater users like Nestle, who want to divert fresh water in bottles out of state, and those who live along streams.

“The Court of Appeals decision is essentially making some significant new law in reference to water law,” said Mr. Shafer. “If that’s the direction the state is heading in, and we hope it is not, then we believe that decision should be made by the Supreme Court.”

Nestle, though, contends the Appeals Court did not set a new standard and, in fact, issued a ruling that is consistent with previous precedents.  

The Appeals Court did, however, warn against allowing Nestle to pump spring water at the level the company proposes in order to operate the plant at full capacity. The court said that would give Nestle “more than a fair participation” in the use of water, and cause too much harm to streamside owners. Nestle is appealing this facet of the Appellate decision.

Earlier this year, Governor Granholm and the Republican-led Legislature reached agreement on a fresh water security statute that establishes a permit system for using large quantities of groundwater. The law also prohibits bulk diversions of fresh water from the Great Lakes basin, except when water is contained in containers less than 5.7 gallons, or if water is contained in a product like beer or canned vegetables. The exception enabled Nestle and other bottled water companies to continue their operations without needing permits for water diversion.

“What the Michigan Citizens for Water Conservation is saying is that the state and its citizens and businesses need to make sure we retain public control of our water, always,” said Mr. Olson, the group’s lead lawyer. “Michigan is not being a protectionist, it’s being a steward.”

Laura Bishop, a student at the University of Chicago, is a Jeff Metcalf Fellow who is reporting and writing this summer on the Michigan Land Use Institute’s news desk. This is her first article for the Great Lakes Bulletin News Service. Reach her at laurab@mlui.org.

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