Water Dispute Boils Over
709 N.W.2d 174 (Mich. Ct. App. 2005).
Plett-Miyake, 3L, Vermont Law School
On November 29,
2005, the Michigan Court of Appeals decided a case brought by the Michigan
Citizens for Water Conservation (MCWC) against Nestlé Waters
North America, Inc. (Nestlé). The court, affirming in part, and
reversing in part, held that the reasonable use balancing
test should be applied to disputes between riparian and groundwater
users and that Nestlés proposed withdrawal of groundwater
for its bottling operations was unreasonable.
In December 2000, the defendants predecessor, Great Spring Waters
of America, a subsidiary of Perrier Group of America, began taking steps
to construct a bottling plant in Mecosta County, Michigan. Their first
step was to purchase groundwater rights to property located north of
the Osprey Lake impoundment known as Sanctuary Springs. Osprey Lake
impoundment is a man-made body of water that was originally created
by the damming of Dead Stream in 1953 and expanded in 1980. Four wells
were installed on the Sanctuary Springs site in 2001 to extract groundwater.
The defendants obtained permits from the Michigan Department of Environmental
Quality (DEQ) which allowed the defendants to pump at a combined maximum
pumping rate of 400 gallons per minute (gpm). The defendants began to
construct a bottling plant approximately twelve miles from Sanctuary
Springs in the summer of 2001.
In September 2001, MCWC filed a complaint requesting an injunction to
bar the defendant from constructing wells, wellhouses, and the water
extraction pipeline. MCWC alleged that defendants withdrawal of
water would not be lawful under the common law applicable to riparian
water rights and was unreasonable under the applicable groundwater common
law. On November 25, 2003, the trial court found that the defendants
actions had harmed and would continue to harm the plaintiffs riparian
interests. The court also found that the defendants water withdrawals
violated the Michigan Environmental Protection Act (MEPA) by unlawfully
diminishing an inland lake or stream and draining water from a wetland.
The trial court granted the plaintiffs requested injunction. The
defendants filed an appeal.
The defendant contended that the trial court erred when it determined
the pumping unlawfully interfered with the plaintiffs riparian
rights based on a hybrid rule of the courts own devising. The
Court of Appeals rejected the trial courts hybrid rule and held
that Michigan law requires the application of a reasonable use balancing
test to disputes between riparian owners and groundwater users.
Under the reasonable use doctrine, a riparian owner may make any
and all reasonable uses of the water, as long [as] they do not unreasonably
interfere with the other riparian owners opportunity for reasonable
use.1 What constitutes a reasonable use is determined
on a case-by-case basis. A similar doctrine has developed in Michigan
regarding groundwater rights. In Schenk v. City of Ann Arbor, 163 N.W.
109 (Mich. 1917), the Michigan Supreme Court adopted the rule
of reasonable user and stated the rule does prevent the
withdrawal of underground waters for distribution or sale for uses not
connected with any beneficial ownership or enjoyment of the land whence
they are taken, if it results therefrom that the owner of adjacent or
neighboring land is interfered with in his right to the reasonable use
of subsurface water upon his land, or if his wells, springs, or streams
are thereby materially diminished in flow, or his land is rendered so
arid as to be less valuable for agriculture, pasturage, or other legitimate
uses.2 Recognizing that a reasonable use standard
has developed for both riparian and groundwater uses, the court explicitly
adopted the reasonable use balancing test as the law applicable to disputes
between riparian and groundwater rights.
Under the reasonable use balancing test, courts must balance a number
of factors to determine whether the harm caused was unreasonable. These
factors include, but are not limited to, (1) the purpose of the use,
(2) the suitability of the use to the location, (3) the extent and amount
of the harm, (4) the benefits of the use, (5) the necessity of the amount
and manner of the water use, and (6) any other factor that may bear
on the reasonableness of the use.3
Applying the reasonable use balancing test to the facts of the case,
the court found that the MCWCs use of the stream for recreation
and aesthetic value was a reasonable use worthy of protection. The defendants
use of the disputed water, however, also serves a beneficial purpose
providing employment and water to the general public and is not inherently
unreasonable. Examining the location of the use, the court found that
Sanctuary Springs is not well suited for high-volume water extractions.
The reduction of flow due to the bottling operations would raise the
temperature of the stream resulting in the loss of habitat and recreational
values. Furthermore, the court found that the defendant could augment
its water supply from other sources and thereby reduce the impact on
the Dead Stream. Taking all factors into consideration, the court determined
that defendants proposed withdrawal of 400 gpm would be unreasonable.
The court, however, concluded that the facts in the record before it
were insufficient to determine a reasonable rate of pumping for the
defendant and remanded that issue to the trial court.
The defendant next claimed that the trial courts MEPA holding
was fundamentally in error and should be reversed. The court agreed.
First, the court found that the plaintiffs lacked standing to bring
MEPA claims for some of the waters in question, because any adverse
effect on those areas from defendants pumping activities does
not affect plaintiffs in a manner different from the citizenry at large.4 The court ruled that because the plaintiffs did not present any evidence
that they use Osprey Lake or the three wetlands in question, they had
failed to demonstrate that they would suffer a concrete and particularized
injury distinct from that of the public generally.5
The court then turned to the trial courts reliance on Inland Lakes
and Streams Act (ILSA) and Wetland Protection Act (WPA) violations to
establish a prima facie violation of MEPA. To establish a violation
under MEPA the plaintiff must show a detailed and specific finding that
the defendants conduct has polluted, impaired, or destroyed,
or is likely to pollute, impair, or destroy, the air, water, or other
natural resources or the court must find that the defendant
has violated an applicable pollution control standard.6 The court held that neither ILSA nor WPA violations may be used to establish
prima facie MEPA violations because those statutes do not contain pollution
control standards. Having made this finding, the court declined to consider
the defendants further MEPA claims on appeal, and remanded to
the trial court, which shall determine whether plaintiffs established
a prima facie violation of MEPA.7
The Michigan Court of Appeals found that under a reasonable use balancing
test, the defendants proposed groundwater withdrawal for its bottling
operations is unreasonable. In January, MCWC and Nestlé reached
a temporary compromise allowing Nestlé to extract 218 gpm from
the Sanctuary Springs site this year.8 MCWC, however,
has appealed the Court of Appeals ruling to the Michigan Supreme
1. Michigan Citizens for Water Conservation v. Nestlé
Waters North America, Inc., 709 N.W. 2d 174, 194-195 (Mich. Ct.
2. Id. at 198.
3. Id. at 203.
4. Id at 210..
5. Id. at 211.
Id. at 213.
7. Id. at 216.
8. Dawson Bell, Sides Agree in Water Dispute: Nestlé
to Continue Pumping, The Detroit Free Press (Jan. 27, 2006).