Summary of a Recent
Judicial Development in
Water Law

Oklahoma Supreme Court Upholds the Constitutionality of Moratorium
on Out-of-Basin Transfers from Sole Source Aquifers

L. Paul Goeringer
National AgLaw Center Research Associate

Summary of Decision

In Jacobs Ranch, L.L.C. v. Smith, 148 P.3d 842 (Okla. 2006), the Oklahoma Supreme Court held that a moratorium on temporary permits for out-of-basin transfers for municipal or public uses of sensitive sole source aquifers was not an unconstitutional special law. The court also held that the moratorium was not an unconstitutional taking of private property for a public use, and was not a violation of the Equal Protection Clause or Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. The court affirmed the granting of summary judgment in favor of the state of Oklahoma by the trial court.

Background

The Arbuckle-Simpson aquifer (aquifer) is a major groundwater basin located within five counties in Oklahoma. Id. at 846. The aquifer was designated a "sole source aquifer" by the U.S. Environmental Protection Agency (EPA). Id. at 847. Under the Oklahoma Groundwater Law, the Oklahoma Water Resources Board (OWRB) is required to determine the maximum yield on each aquifer in the state. Id. In 1990, the Oklahoma Geological Society and the U.S. Geological Society issued a report on the aquifer, but the OWRB had delayed making a determination of the maximum yield of the aquifer until a sufficient hydrological study to determine the maximum annual yield could be completed in 2008. Id. Plaintiff Jacobs Ranch was issued a temporary permit in 1985 for public and municipal water use. Id. The temporary permit was revalidated annually until 2003, when protestors objected to the revalidation of the permit. Id. In 2003, Jacobs Ranch proposed selling the water withdrawn under its permit to municipalities in a county not overlying the aquifer. Id. at 847-48. Plaintiffs Roos Ranch and Roos Resources also owned land overlying the aquifer and were issued temporary permits. Id. In 2003, Senate Bill No. 288 was signed into law and established a moratorium on the issuance of out-of-basin transfers of groundwater from sensitive sole source aquifers. Id. at 848. The aquifer was only sensitive sole source aquifer in Oklahoma. Id. Plaintiffs filed this action seeking to declare the moratorium unconstitutional. Id. The district court granted summary judgment in favor of the state, and this appeal followed. Id.

Arguments

The plaintiffs argued that the moratorium was a special law and violated the Oklahoma Constitution, article 5, section 59. Id. at 850. The plaintiffs asserted, "the classification of 'sensitive sole source groundwater basin' is invalid because it is not reasonably related to a valid legislative objective . . . ." Id. at 850. Also, the plaintiffs argued that the moratorium was a special law that regulated municipal and county affairs in violation of the Oklahoma Constitution, article 5, section 46. Id. at 854. "They argue[d] that the moratorium regulates municipal and county affairs because it impacts the ability of out-of-basin municipalities and counties to enter into contracts for their public water supplies." Id. at 854-55. The plaintiffs also argued that the moratorium was an unconstitutional taking under the Oklahoma Constitution and the U.S. Constitution. Id. at 855. Finally, the plaintiffs argued that the moratorium violated the Equal Protection Clause and the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. Id. at 856.

The state of Oklahoma argued that the moratorium was constitutional because the measure was a valid use of the police power to regulate the state's water resources by the state legislature. Id. at 849.

Analysis and Holdings

The court first clarified that the state could exercise police power to regulate groundwater. Id. at 849. The court found that "[f]or the health, welfare and safety of its citizens, the Legislature may regulate a landowner's use and enjoyment of water resources to prevent waste and infringement on the rights of others." Id. at 850.

The court then turned to the question of whether the law was a special law or a general law. Looking at treatises from when the state constitution was ratified, the court explained that

[a] "general law" related to a subject of common interest to the whole state and embraced the whole subject or a whole class related to the subject. Although it might have related to a subject of common interest to the whole state, a "special law" embraced particular persons or things of a class but not the whole subject or whole class. A law had "uniform operation" throughout a state when it related to a subject of common interest to the whole state and the Legislature did not apply it to particular localities or prohibit its operation in particular locations, even though it did not practically operate in every part of the state.
Id. at 851 (citations omitted).

After examining prior decisions, the court explained that to determine whether a law is a special law, the court considers the nature of the legislation, the legislative classification, and the uniformity of the law's operation. Id. at 853.

The court found that the nature of the legislation was to ensure safe drinking water, and that concern was a common interest to everyone in the state. Id. As a result, the court found that "[t]he sensitive sole source groundwater basin legislation is a law of a general nature." Id.

Turning to the legislative classification, the court had to decide whether sensitive sole source groundwater basins were different from other groundwater basins located in Oklahoma. Id. The court determined that the designation was based on the EPA's Sole Source Aquifer designation and was "a substantial and reasonable distinction that makes the 'sensitive sole source groundwater basin' class different from other major groundwater basins" in Oklahoma. Id.

The court then addressed whether the classification was rationally related to its purpose. The court determined that it was reasonable to treat out-of-basin uses differently than in-basin uses. Id. The court stated,

The bases for the EPA designation are that the drinking water in the designated sole source aquifer area is provided by the Arbuckle-Simpson aquifer and that there are no existing alternative drinking water sources nor cost-effective sources capable of supplying the drinking water demands for the designated area. The distinction between in-basin use and out-of-basin use has a rational relation to the purpose of the legislation. We conclude that the classification of groundwater basins designated by the EPA as "Sole Source Aquifers" is rationally related to the conservation of safe drinking water for use in the overlying area.
Id. at 853-54 (citations omitted).

Having determined that the classification was reasonable, the court turned to the law's application.

The plaintiffs argued that the classification was not uniform, because it would not apply to new sole source aquifers that the EPA may designate in the future after the effective date of the moratorium. Id. at 854. The court disagreed, and found no intent to limit the moratorium's impact on future designated sole source aquifers. Id. The court concluded, "the sensitive sole source groundwater basin legislation operates uniformly throughout the state upon all major groundwater basins designated as sole source aquifers before and after its effective date and all persons brought within the circumstances provided by it." Id. The court found that the moratorium was a general law, rather than a special law, under the Oklahoma Constitution. Id.

Next, the court looked at the argument that the moratorium violated the Oklahoma Constitution, article 5, section 46. Id. Having already rejected the plaintiffs' arguments that the moratorium was a special law, the court quickly rejected any argument that the moratorium was a special law regulating municipals and county affairs. Id. at 855.

The court then turned to the plaintiffs' argument that the moratorium was an uncompensated taking in violation of the Oklahoma Constitution and the U.S. Constitution. Id. Concluding that the moratorium was a proper use of the state's police power, the court determined the moratorium was not an unconstitutional taking. Id. at 856. The court concluded, "the temporary moratorium on [plaintiffs'] proposed use of water from the sensitive sole source aquifer and the additional permit requirement do not constitute a taking of private property for public use . . . ." Id. The court upheld the granting of summary judgment on this issue. Id.

Finally, the court addressed the plaintiffs' argument that the moratorium was a violation of Fourteenth Amendment to the U.S. Constitution. After determining that the moratorium did not relate to a fundamental right, the court used the rational basis test rather than strict scrutiny. Id. at 857. Already concluding that the moratorium was rationally related to its purpose, the court upheld the granting of summary judgment on this issue. Id. The court affirmed the district court's granting of summary judgment in favor of the state. Id.

The case was decided on May 23, 2006.