Tidal and Navigability Tests for State Navigability

Many cases instead apply a ‘navigability in fact’ test, and this conflict of tests was the basis of the dispute in Phillips Petroleum Co. v. Mississippi, supra, which cites the authorities on both sides. Of course, in tidal waters under the navigability test, title extends to the mean high water mark as well, but only so far as the water body or course is navigable, so the ebb and flood may be more extensive than the navigability in fact. On the other hand, the United States has vast water resources in the Great Lakes and river systems that are unaffected by the tides, but are plainly navigable.³³ So the tests may have differing outcomes depending on the circumstances. “When viewed in their proper historical perspective, the navigability and tidal tests are clearly separate criteria.” City of Newark v. Natural Resource Council, 82 N.J. 530 at 543, 414A.2d 1304 at 1310 (1980).

Which of the two applies under ‘equal footing?’ Phillips Petroleum ruled that the states themselves could choose, and a state might choose both. In addition, applying one test in a court decision does not foreclose the applicability of the other in that state as well.

This Court’s decisions in The Genesee Chief and Barney v. Keokuk extended admiralty jurisdiction and public trust doctrine to navigable freshwaters and the lands beneath them. But we do not read those cases as simultaneously withdrawing from public trust coverage those lands which had been consistently recognized in this Court’s cases as being within that doctrine’s scope: all lands beneath waters influenced by the ebb and flow of the tide. (Citation omitted). 484 U.S. at 479 -80, 108 S.Ct. at 797.

The State of Mississippi defined its ‘toothpick sailboat’ tidal test in Cinque Bambini Partnership v. State, 491 So.2d 508 at 515 (Miss. 1987):

Yet so long as by unbroken water course - when the level of the waters is at mean high water mark - one may hoist a sail upon a toothpick and without interruption navigate from the navigable channel/area to land, always afloat, the waters traversed and the lands beneath them are within the inland boundaries we consider the United States set for the properties granted the State in trust.

Although the Supreme Court in Appalachian Electric Power, supra, at p. 2, determined that the often boisterous New River was navigable despite its rapids, in PPL Montana, LLC v. Montana, 132 S. Ct. 1215, 182 L.Ed.2d 77 (2012) the court faced almost the reverse facts, but ruled against the state, again. PPL Montana is an electricity utility that operates ten hydroelectric facilities on Missouri River, the Madison River, and the Clark Fork River. The dams are licensed by the Federal Energy Regulatory Commission and had been in existence for many decades, when the State of Montana decided to assert ownership of the river bottoms under equal footing. Montana Courts awarded the state forty one million dollars in rent for the riverbeds just for the period from 2000 to 2007. The Montana Supreme Court found that certain stretches of the river were not navigable in fact, but rejected consideration of the river in segments, so the interruptions did not affect navigability of the rivers as a whole because they can be circumvented by portage.

The utility appealed, and the Supreme Court decided that the navigability test must consider the river in segments, and determine its status as of the entry of the State into the union. The Court ruled that “any ensuing questions of navigability for determining state riverbed title are governed by federal law,”³⁴ so it appears that state law may control state ownership if the waters are tidal under Phillips Petroleum, but not for non-tidal waters.

The title consequences of the equal-footing doctrine can be stated in summary form: Upon statehood, the State gains title within its borders to the beds of waters then navigable (or tidally influenced . . .), although that is not relevant in this case). It may allocate and govern those lands according to state law subject only to “the paramount power of the United States to control such waters for purposes of navigation in interstate and foreign commerce.” . . . . The United States retains any title vested in it before statehood to any land beneath waters not then navigable (and not tidally influenced), to be transferred or licensed if and as it chooses. (Citations omitted).³⁵

Also, the finding by the Montana Supreme Court that evidence of current recreational use of the river is not relevant to the equal footing doctrine because “the evidence must be confined to that which shows the river could sustain the kinds of commercial use that, as a realistic matter, might have occurred at the time of statehood.”³⁶

The Court in PPL Montana, LLC dismissed the state’s argument that a finding for the utilities would undermine the public trust:

Under accepted principles of federalism, the States retain residual power to determine the scope of the public trust over waters within their borders, while federal law determines riverbed title under the equal-footing doctrine.³⁷

One must be careful when relying on a finding of navigability because it may not be relevant to title in some contexts. For example, a State’s title to land beneath water under equal footing only applies if the waters were navigable, or if the waters could be improved artificially to make them navigable, at statehood.³⁸ However, if the finding is in the context of an admiralty suit, jurisdiction under the Clean Water Act, 33 U.S.C. § 1311, or other regulation like the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. § 403, there is no requirement for navigability at statehood.

7. 
   Riparian Rights
   

The owner of a riparian lot has riparian rights to the abutting waters and the abutting bottom of the body of water.⁴⁰ That makes sense even if the waters are tidal or navigable because the land seaward of the mean high water mark (if that is the boundary) is public trust land, so the riparian owner has a right, in common with everyone else, to use it. Remote owners do not have riparian rights to use the water or to cross the land of a riparian owner to access it.⁴¹

Generally speaking, the riparian rights to the water include the right to swim or boat in the water, and the right to take and use water. There are two variations, the natural flow doctrine and the reasonable use doctrine. Under the older natural flow doctrine that originated in English law, each owner is entitled to receive an undiminished quality and quantity of water. Quoting Stoebuck & Whitman, The Law of Property (3d ed), the Court of Appeals of Michigan said:

The [natural flow] doctrine permits every owner to consume as much water as needed for “domestic” purposes, which generally means for personal human consumption, drinking, bathing, etc., and for watering domestic animals. Beyond this, the owner may use the water for “reasonable” artificial or commercial purposes, subject to the very large proviso that he may not substantially or materially diminish the quantity or quality of water. Certainly no water may be transported to land beyond the riparian land.⁴²

Under the reasonable use doctrine first introduced in the nineteenth century, “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.” ⁴³ Reasonable use varies from state to state, but domestic use still takes precedence as a reasonable use.⁴⁴ For example, Oklahoma has adopted a form of the California Doctrine of stream water rights (a prior appropriation system) but its supreme court decided that a riparian owner could not be limited to domestic use of the water only, denying all other uses without compensation, unless the riparian owner voluntarily relinquished its rights when seeking an appropriation of stream water.⁴⁵

Michigan originally adopted the reasonable use doctrine because the natural flow rule would give a lower riparian owner a superior advantage over an upper riparian owner, “and in many cases give him in effect a monopoly of the stream.”⁴⁶ However, it modified it to a ‘reasonable use balancing test,’ combining rules from riparian and groundwater decisions to recognize the interconnected nature of water sources and fully integrate the law applicable to water disputes.⁴⁷ In this case the court carefully balanced the competing interests to the ground water flowing into a stream named the Dead Stream of the Dead Stream riparian owners and Nestlé and decided an injunction to limit Nestlé’s use of the ground water was the proper remedy.

Many of the reasonable use disputes arise over impounding waters behind a dam to the detriment of lower riparian owners. For example, the City of Akron, Ohio suffered an extensive fire in 1909, and sought legislation to dam the Cuyahoga River⁴⁸ to meet its water needs. It developed its water resources over the years, but its population began to recede in the last part of the twentieth century and some downstream riparian communities sued Akron for its unreasonable share of the river based on its declining population. The court remanded for a declaratory judgment to increase the flow from Akron’s reservoir back into the river.⁴⁹

In addition to balancing the rights among riparian owners, riparian rights may also be limited by governmental regulations. That seems obvious if the water is navigable and impressed with the navigational servitude and public trust. But it can also apply to a municipal prohibition of seaplane operations on a non-navigable lake. Gustafson v. City of Lake Angelus, 76 F.3d 778 (1996).

With respect to the land flooded by riparian waters, the disputes frequently involve the placement and use of docks, piers and wharves, or access to beachgoers. If the water is navigable or tidal, and the state owns the bottom, a riparian owner has a qualified riparian right to build a dock, pier or wharf. See, e.g. Appleby, supra, note 31. The right is qualified because the riparian owner must get permission from the state and U.S Army Corps of Engineers⁵⁰ before building the dock, pier or wharf. If the water is not navigable or tidal, so the riparian owners also own the bottom, a dock, pier or wharf that might occupy a neighboring riparian owner’s lake bottom, gives the neighboring owner standing to object to the placement of the structure.⁵¹ If the structure was built on dry land, that should be the end of it, but water is different. In 5F,LLC v. Dresing, 142 So.3d 936 (Fla 2014), Dresing received permission from Lee County to build a pier from his riparian property onto submerged land that Florida had conveyed to a predecessor of 5F, LLC. Seven months after completion, 5F,LLC objected to the pier and sued. The court determined that riparian owners in Florida have a qualified right to build a pier out to navigability if the state owns the bottom. It also found that the title of 5F, LLC was still burdened by the public trust, so Dresing still had the right to build the pier. This Florida court also mentioned that an ‘unobstructed view’ can be a riparian right.⁵²

It is often difficult to determine underwater property boundaries because the property lines can terminate at the ‘thread’ or ‘thalweg’ (defined as the middle of the shipping channel) or, instead, at the geometric middle of the stream.⁵³ A circular lake or pond may be relatively easy, but an oddly shaped lake or pond can pose even more difficulties than a meandering river.⁵⁴ If a dock, pier or wharf might intrude on a neighbors non-navigable lake bottom, so may boats, but there may be limits with boats as there are with docks, piers and wharves. So, in West Michigan Dock & Market Corp. v. Lakeland Investments, 210 Mich.App. 505, 534 N.W.2d 212 (1995), a riparian neighbor was limited in the time it could dock vessels in West Michigan’s commercial slip to no more than one week, and it was not allowed to anchor boats in the slip.

Non-riparian parties can also get rights to the bottom of navigable water bodies like oyster beds granted in leases and permits. See, Lankford v. Nuttal, 186 Va. 532, 43 S.E.2d 37 (1947) and Commission of Fisheries v. Hampton Roads Oyster Packers & Planters’ Ass’n., 109 Va. 565, 64 S.E. 1041 (1909). Oil and gas exploration and extraction and electrical production facilities like wind farms are located beyond the shore. Some of these, like the Cape Wind wind farm to be located in Nantucket Sound involve complex title issues involving federal leases beyond the three mile limit and access rights for facilities from the state for the waters within three miles from the shore.⁵⁵ The Cape Wind project is opposed by many landowners along the shores of Nantucket, Martha’s Vineyard and Cape Cod, raising an echo of the unobstructed view right mentioned in 5F,LLC v. Dresing, supra.

8. 
   State Land Claims
   

If, in the course of a state’s history, some tidelands were filled, developed and occupied for a long period of time without the approval of a state, does the state lose its title derived from equal footing or the Submerged Lands Act? New Jersey, for one, decided that it still holds title. In N.J.S.A. 13:1B-13.1 et seq. the State of New Jersey directed its Natural Resource Council to study and determine which portions of the state’s meadowlands were subject to the public trust doctrine and were still state owned lands. It was responding to an ‘exhortation’ by its supreme court in O’Neill v. State Highway Dept., 50 N.J. 307, 235 A.2d 1(1967) to catalogue its tidelands holdings.⁵⁶ The Natural Resource Council compared aerial photography with historic maps to determine where meadowlands had been filled and developed since statehood. The Council then adopted maps of sovereign ownership claims threatening titles to real estate in 17 of New Jersey’s 21 Counties. They are notice to purchasers of those lands that the state could assert a sovereign claim.

However, those maps cannot be said to constitute a disclaimer of title. They merely catalogue lands available for riparian grants and are not statements of ownership. The statutory dedication of monies received from the sale of “lands belonging to this state now or formerly lying under water” to the support of public schools, N.J.S.A. 18A:56-5, and the constitutional prohibition of the use of that money for any other purpose, N.J.Const. (1947), Art. VIII, s IV, par. 2, further militate against interpreting the State’s cataloguing of riparian grants as a disclaimer of title.⁵⁷

New Jersey title examiners study the sovereign ownership maps to determine if the state is asserting a claim to a property, and if it is, title insurance policies on the property will include an exception to the state’s claim unless the landowner settles the claim with the state. A landowner may seek relief by an application for a riparian grant of title or a lease by the state, an application for a statement of ‘no interest’ from the state, or by filing a quiet title suit against the state to clear the title of the exception.

In PPL Montana, supra, at page 11, the court described an effort by the State of Montana to assert ownership of the Missouri, Madison, and Clark Fork Rivers, so it could charge for rents for use of the riverbeds going back decades against the utility operating ten hydroelectric dams with generation stations on the rivers. The utility had been paying rents to the U.S. instead. Despite current evidence of pleasure boating on the rivers, the court found the rivers non-navigable at statehood, so the state did not have title under equal footing

9. 
   Title Insurance
   

It has issued the ALTA® 41 series Water Endorsements that insure against loss or damage caused by the enforced removal or alteration of any Improvement resulting from the future exercise of any right by another to use the surface of the land described in Schedule A of the policy for the extraction or development of water. A copy of the ALTA® 41-06 is attached as Exhibit A.⁵⁹ But these four endorsements insure against loss caused by the exercise of rights belonging to somebody else. They do not insure rights held by the policyholder.

The State of Florida, which promulgates title insuring forms for use by the title insurance companies operating in the state, has promulgated a Navigational Servitude endorsement that gives similar coverage against the exercise of the navigational servitude by the federal government. It is just one paragraph long and provides:

The Company hereby insures the insured against loss or damage, not exceeding the amount of insurance stated in Schedule A, and costs and attorneys' fees and expenses which the Company may become obligated to pay hereunder, sustained or incurred by the insured by reason of forced removal pursuant to a final judgment of a court of competent jurisdiction in favor of the United States Government requiring the removal of any improvements located on the land at date of policy resulting from the exercise of the rights of the United States Government with respect to control over navigable waters, or lands which formerly constituted navigable waters, for purposes of navigation and commerce.

The Navigational Servitude endorsement is only available in Florida, but another endorsement has been used in Massachusetts, although it has not been promulgated by the state⁶⁰ or adopted by any title insurance trade group. A copy is attached as Exhibit B.

If a title involves a riparian grant to use the water from a water course for a purpose like diverting the water to drive a water wheel or turbine before the water is returned to its course, that grant may be insurable if there is sufficient evidence of the grant. There was a flurry of hydroelectric facility development in the 1980s and 1990s in the northeast, and many of the policies insured the water rights in Schedule A of the policy.

In cases involving a dam to impound water for driving a turbine, properties surrounding the impoundment may have been burdened with flowage easements that gave the dam owner rights to flood portions of those properties. The flowage easement should be an easement appurtenant to the fee under the dam, and insurable. On the other hand, one owning the servient properties for the flowage easement should expect an exception in Schedule B. See, Lawyers Title Insurance Corporation v. Doubletree Partners, L.P., 739 F.3d 848 (5^th Cir. 2014).

What about the dam that impounds water in a river subject to equal footing? Can the title insurer insure title to the dam? It can if the dam is built on a Federal Energy Regulatory Commission license or permit that has enough of the characteristics of a lease or usufruct. The insurance underwriting decision must be based on quality of the rights granted.

10. 
    Glossary: