More rights than water: a groundwater-surface water connection case
A groundwater-dependent tributary to the Colorado River.
Good morning, and back today with a new edition of Invisible Waters. I wanted to first start by sharing a couple of thoughts on a lawsuit in Nevada that centers around the Muddy River, and reflects some of the challenges in recognizing physical connections between groundwater and surface water within a legal structure that historically ignored them.
Back as a reporter in 2019, learning more about the hydrology of this area of Nevada was a big part of what got me interested in groundwater-surface water interactions, a big theme of my book and what still motivates some of the quesitons I’m looking into today. As always, let me know if you have any thoughts, feedbacks, or ideas for future posts. — Daniel
An important water case is underway in Nevada that is fundamentally about the ability of regulators to reconcile the overallocation of legal rights to use water (a common issue in many watersheds) with the realities of supply.
The case background: For years, Coyote Springs Investment, LLC wanted to pump groundwater for a new town (think thousands of homes, shops and schools) in the desert outside of Las Vegas. For years, there had been questions about groundwater availability in the area and a need for more information about aquifer dynamics. In 2020, based on the available data, Nevada regulators reduced the limits for how much water was available to sustainably pump in the area, effectively cutting the developers off from their ability to access groundwater they once counted on for the new town.
The developer sued the state for $1.5 billion, claiming a taking of its property without compensation. Six years after the lawsuit was filed, it is now going to trial. It’s a major case because a decision in favor of Coyote Springs could constrain the state’s ability to limit overuse in similar situations where there are more rights to use water than there is water available. As attorney Debbie Leonard told the Review Journal, “it’s going to be a free-for-all in terms of payouts from the state, and the state can’t afford to pay.”1
In all the discussion though, it’s worth considering why regulators reduced the limits on pumping to begin with, because it speaks to the difficulty of updating water rights to reflect scientific knowledge. Importantly, the decision did not come from nowhere. It was driven by the impacts to water rights and access on the other side of pumping.
To understand those impacts though, we have to talk about the unique hydrology of a little-discussed tributary of the Colorado River, the spring-dependent Muddy River.
The Muddy River is fed by a series of springs, which emerge from a complex regional groundwater flow system that spans roughly 50,000 acres and supports habitat for the endangered Moapa dace. The water that discharges from the springs is also valuable for where it ends up: in the Muddy River. The Muddy River flows to Lake Mead, and adds to the Colorado River, the main drinking supply for Las Vegas. As a result, the Southern Nevada Water Authority, which serves water to Las Vegas, bought priority senior water rights on the Muddy River to supplement its Colorado River allocation.2
Because the aquifer is connected to the Muddy River through the springs, excessive groundwater pumping threatens to reduce spring flow, thereby impairing habitat for the rare fish and depleting flows of the Muddy River, including those priority senior rights. So, “cutting” one right, not in use, was seen as a way to protect existing rights.
On the other side of groundwater pumping were potential cuts to senior water users, a curtailment not by regulation, but the physics of how the aquifer and river connect.
Since state water law is meant to protects existing rights, “first in right, first in time,” the state modified its sustainable limit in 2020 to protect the springs and senior rights.
The state’s goal was to bring a disconnected water law in line with physical realities based on the best-available science, evaluated through expert testimony and technical reports.3 But in making that modification, the state also functionally changed the way rights may be prioritized, ordered, and managed in the groundwater system, known as the Lower White River Flow System. And a value of water rights comes from how they are ordered and prioritized. Overall, changes to the limit meant there were far more water rights on paper to pump groundwater than there was actually water available.
The legality of the ruling, upheld by the Supreme Court in 2024, effectively halted Coyote Springs’ plans to pump, and its development plans.4 Coyote Springs accused the state of an unconstitutional taking of its property and filed suit shortly after.5
Now the case is going to trial. The case could have broad implications because so many similar situations exist in Nevada and the West, particularly as states seek to apply science as a guide to recognize groundwater and surface water as connected.
Beyond the politics of the case — and this development has a long, winding backstory — the dispute reflects how practically challenging it is to deal with overallocation when water rights are so imbalanced with actual supply, when those once promised water rights have power, money, resources, and legal arguments to fight in the courts.
What happens when scientific understanding evolves and improves?
Can state regulators limit water rights when there are undesirable results?
These are all important questions in the Muddy River. Importantly, in Nevada (like in many Western states), all water belongs to the public, and “administers water rights on the public's behalf.” In this case, it is not only the public’s interest that is at stake, but, on the other side of groundwater pumping, the senior rights of another user.
I’ve emphasized the connection to the Colorado River here because this conflict has echoes of what is facing the basin at large. Not necessarily the takings part. But the reality is that there are more rights to use the Colorado River than there is water to go around, pitting existing uses against efforts to use water rights promised on paper. We now recognize that supply is less than what was once estimated, an issue made worse by climate change. But that recognition is only a first step. The hard part are the cuts. Yet cuts are coming, whether they are forced by physics, regulators, or are negotiated.
There is a similar physical reality to the nature of cuts on the Colorado River. Even as the seven states in the basin — who have failed to negotiate cuts — await regulatory action from the federal government, physical constraints with balancing two record low reservoirs not built for these conditions are revealing themselves as additional players how water could be distributed across the basin, with many uncertainties.6
The Muddy River, with the Virgin River, flows into Lake Mead’s Overton Arm, which has shrunk as a result of an imbalance between supply and use. It is a fitting name for the lake feature. As journalist and author Zak Podmore wrote a few months ago, “the Overton Window that frames what’s permissible in the discourse around Colorado River management has not shifted as rapidly as the Overton Arm of Lake Mead, even as recognition spreads that the river is headed into a new phase of crisis in 2026.”7
A few other stories I’m watching:
Forget Western water war: Local managers choose partnership: Circle of Blue’s Brett Walton sees how communities are adapting to water cuts on the local level — where the risk is often concentrated — and finds a story that complicates the narrative of everyone in conflict with everyone else.
“At the local level, water managers are collaborating to ensure residents and businesses have adequate water supplies. They are signing multiparty deals and pursuing joint projects to share resources and keep water flowing to homes and businesses. Such dealmaking is not a remedy to all that ails the basin. But it is viewed as essential in a time of deep climate uncertainty and anxiety.”
‘Fiscal cliff’ for drinking water fixes: Californians with bad tap water could have a longer wait. The L.A. Times’ Ian James reports on major cuts in funding for a program meant to pay for interim solutions to provide clean, accessible, and affordable drinking water.
“At a meeting in Sacramento last week, state officials presented estimates that grant money to help communities get clean drinking water, including by drilling new wells or connecting to nearby water systems, could fall from $941 million in the current fiscal year to about $103 million in 2027-28.”
Bulk water hauling for residential uses on the rise in Santa Fe County. “Data from the Santa Fe County Utilities Division — assembled by an incoming doctoral student at Stanford University who grew up in Santa Fe County — shows monthly residential use at the county’s water filling station near the jail has spiked over the last decade. Water hauling for residential uses hit just over 800,000 gallons in July of 2024 and 2025 respectively, up from roughly 300,000 gallons used that month in 2011.” More from the Santa Few New Mexican’s Cormac Dodd.
Thousands of native cutthroat trout return to Lake Tahoe waters, from Eli Ramos at Abridged. The Washoe Tribe partnered with the U.S. Fish and Wildlife Service to re-introduce 2,000 native Lahontan cutthroat trout into Lake Tahoe, part of broad decadeslong recovery efforts for a species that was extirpated from the Truckee River watershed in the first half of the 20th Century. Thanks to Amanda Royal over at Earth Hope for flagging this story.
Arizona regulators are approving an application to increase contaminant limits for a uranium mine near the Grand Canyon, despite increases in arsenic levels and concerns about the regional aquifer, Inside Climate News’ Wyatt Myskow and Maya McDaniel report.
What would you give for rain? New Mexico author and journalist Laura Paskus writes about all that’s left in her reach of the Rio Grande — with an important call to action for us to think about how we prioritize and manage water. “I know we can do more than expect wildlife to live on the dregs of what we think we deserve. We can pay attention to what’s happening and hold elected leaders and institutions accountable. We can make changes — including big changes.”
“This lawsuit could upend Nevada water regulation — and cost taxpayers billions,” Las Vegas Review-Journal, 2026.
“The SNWA is allowed to develop the portion of its Muddy and Virgin River surface water rights with a priority date that precedes the [Boulder Canyon Project Act] (pre-1929 rights) as Tributary Conservation ICS.” Water Resources Plan, Southern Nevada Water Authority, 2026.
See Nevada State Engineer Order 1309, 2020.
Sullivan v. Lincoln Cnty. Water Dist., 140 Nev. Adv. Op. 4 (Jan. 25, 2024).
“Coyote Springs developer sues state for ‘unconstitutional taking’ of water rights,” The Nevada Independent, 2020.
“A Significant Moment in the Colorado River Water Supply Crisis,” Colorado River Research Group, 2026; “Glen Canyon Faces Its Existential Moment,” Circle of Blue, 2026.
We’re dealing with this in Idaho right now. I’ve been arguing—for two decades—that ‘paper water’ exceeds ‘wet water’…to no avail. It’s all now coming to a head as Idaho is on the radar as an alternative to Jackson and Aspen. Development pressures, annexations, a state that’s given out water rights like candy in overallocated basins, failings in water law, and now unprecedented drought are stacking up to create one big disaster-in-the-making. Thanks for your reporting.
As this case goes to trial, do you have an idea if there will be a scientific argument that the sustainable limit was set too low? No doubt it's well researched and documented but just the amount of uncertainty inherent in the calculations makes me wonder how that would play out in court.