## Facts

- Spear T Ranch, Inc. held prior Nebraska appropriations to divert surface water from Pumpkin Creek for irrigation and livestock watering.
- Neighboring landowners operated high-capacity groundwater wells in an aquifer alleged to be hydrologically connected to Pumpkin Creek.
- Spear T alleged the defendants’ pumping directly reduced creek flows, leaving insufficient water to satisfy Spear T’s appropriations and causing agricultural losses.
- Spear T sought injunctive relief to limit pumping and damages for past interference, asserting tort, statutory, and constitutional/property-based theories.
- The district court dismissed the complaint with prejudice, citing lack of subject-matter jurisdiction, failure to state a claim, failure to join necessary parties, primary jurisdiction, and preemption by the Nebraska Ground Water Management and Protection Act (GWMPA).
- Spear T appealed from the dismissal; no trial on liability had occurred.

## Issues

1. Whether Nebraska common law recognizes a cause of action by a surface-water appropriator against a groundwater user for depletions of a hydrologically connected stream.
2. Whether the GWMPA expressly or impliedly abrogates such common-law claims or commits the dispute exclusively to administrative processes.
3. Whether a surface-water appropriator may assert conversion, trespass, or similar property theories based on alleged ownership of the stream’s water.
4. Whether dismissal was proper based on primary jurisdiction, exhaustion, or failure to join necessary parties.

## Decision

- The Supreme Court of Nebraska reversed the dismissal in part and remanded for further proceedings.
- The court recognized a limited common-law claim for interference with surface-water use by a groundwater user and adopted Restatement (Second) of Torts § 858 to govern conflicts involving hydrologically connected groundwater and surface water.
- The court held the GWMPA did not expressly or impliedly abrogate a surface appropriator’s common-law claim for unreasonable interference.
- The court rejected Spear T’s conversion and trespass-based theories because an appropriator has a right to use water, not ownership of the water itself.
- The court concluded primary jurisdiction and exclusive administrative jurisdiction did not bar the action, because the threshold questions were legal and within judicial competence.
- The court ruled that dismissal with prejudice was improper; Spear T was entitled to proceed on (and, if needed, amend to plead) a claim consistent with § 858, while certain other theories were not viable.

## Legal Principles

- A groundwater user may be liable to a surface-water user when groundwater withdrawals have a direct and substantial effect on a watercourse and unreasonably cause harm to a person entitled to use that surface water. (Restatement (Second) of Torts § 858, adopted as Nebraska law.)
- Nebraska surface-water appropriations confer a usufructuary right to use water, not ownership of the corpus of the water; property torts premised on ownership of the water (e.g., conversion or trespass to chattels) are not available on that theory.
- Statutes are not presumed to abrogate common law absent clear legislative intent; the GWMPA did not clearly eliminate common-law remedies for surface/groundwater interference.
- Primary jurisdiction does not require dismissal where the dispute turns on legal questions appropriate for judicial determination rather than issues needing initial agency resolution.
- When a court recognizes a newly articulated governing standard, dismissal with prejudice is generally inappropriate if the pleadings could support a claim under that standard or could be amended to do so.

## Conclusion

The Nebraska Supreme Court held that a surface-water appropriator may sue groundwater pumpers for unreasonable interference when pumping directly and substantially affects a connected stream, adopted Restatement § 858 as the governing standard, rejected ownership-based conversion and trespass theories, and ruled that the GWMPA and primary-jurisdiction doctrines did not bar the common-law claim, requiring remand for further proceedings.


Spear T Ranch, Inc. v. Knaub, 269 Neb. 177, 691 N.W.2d 116 (Neb. 2005)