## Facts

- The United States, through the Bureau of Land Management (BLM) and the United States Forest Service (USFS), filed applications to appropriate surface water on federal lands in Nevada to provide water for livestock and wildlife.
- Some applications sought to maintain water in place (including a right to Blue Lake “in situ”) rather than diverting water through ditches, pipes, or other structures.
- Ranching and agricultural interests, including the State of Nevada and the Nevada State Board of Agriculture, protested, asserting Nevada appropriation law requires a physical diversion to create a valid water right.
- On July 26, 1985, the Nevada State Engineer granted a number of the federal applications and overruled protests.
- The district court affirmed the State Engineer’s approval of the Blue Lake in-place right, but reversed approval of other federal applications, reasoning that the federal agencies could not be “appropriators” because they did not own or directly control the livestock or wildlife using the water.
- The State and Board of Agriculture appealed the Blue Lake affirmance; the State Engineer, the United States, and environmental organizations cross-appealed the reversal of the other federal applications.

## Issues

1. Whether Nevada law requires a physical diversion from a natural watercourse as a prerequisite to perfecting an appropriative surface water right.
2. Whether federal land management agencies may be the appropriators and holders of Nevada water rights for beneficial uses on public lands, including watering livestock and wildlife, even if they do not own the animals that consume the water.
3. Whether the district court erred by narrowly reading earlier precedent to bar federal appropriations and by reversing the State Engineer’s rulings.

## Decision

- The Supreme Court of Nevada affirmed the district court’s order upholding the State Engineer’s grant of the Blue Lake in-place appropriation.
- The court rejected the argument that Nevada law imposes an absolute, across-the-board physical diversion requirement for appropriative rights.
- The court reversed the district court’s order denying other BLM/USFS applications and held that federal agencies may be lawful appropriators under Nevada law for beneficial uses on public lands.
- The court remanded for proceedings consistent with its opinion, requiring the district court to apply the correct legal standards when reviewing the State Engineer’s grants.

## Legal Principles

- Under Nevada’s prior appropriation framework, beneficial use is the basis, measure, and limit of a water right; the controlling inquiry is whether the proposed use is legally cognizable and beneficial.
- A physical diversion is not an absolute prerequisite to an appropriative surface water right when the water is beneficially used in place and the appropriation is authorized through the statutory permitting process.
- The identity of the “appropriator” is not limited to the ultimate consumer of the water; an applicant may hold the right for recognized beneficial uses even if others (including wildlife or third-party livestock) directly drink the water.
- Earlier precedent identifying the user applying water to the soil as the “actual appropriator” does not categorically bar governmental entities from holding rights for beneficial uses administered on public lands.
- Courts reviewing State Engineer determinations should not substitute a narrower legal view for the agency’s decision absent legal error or action contrary to governing statutes.

## Conclusion

The court held that Nevada water law permits appropriative rights without a traditional physical diversion where water is beneficially used in place, and it further held that federal land management agencies may appropriate and hold Nevada water rights for livestock and wildlife uses on public lands.


State v. Morros, 104 Nev. 709, 766 P.2d 263 (Nev. 1988)