## Facts

- The City of Rawlins held water rights dating from 1900 and imported essentially all municipal water from the North Platte River system, including Sage Creek.
- After municipal use, the City historically discharged treated wastewater (effluent) into Sugar Creek at a point upstream of several private diversion points.
- The defendants held certificates of appropriation with priorities dating from 1914 to divert water from Sugar Creek downstream of the City’s discharge for irrigation, stock water, and related uses.
- State and federal water-quality requirements obligated the City to meet minimum treatment standards before discharging into Sugar Creek.
- To comply, the City proposed an aerated lagoon system that would cause the purified effluent to reach Sugar Creek at a point below the defendants’ diversion points, effectively eliminating their access to that effluent.
- The City sought a declaratory judgment that it would owe no compensation to the defendants if it changed the treatment system and discharge location; the district court ruled for the City.

## Issues

1. Whether downstream appropriators of municipal effluent were entitled to compensation when the City changed its treatment system and discharge location so the effluent no longer reached their diversion points.
2. Whether long-standing discharge of imported municipal effluent into Sugar Creek converted the effluent-augmented flow into a “natural stream” flow that gave downstream appropriators vested, compensable rights against the City.

## Decision

- The Wyoming Supreme Court affirmed the declaratory judgment for the City.
- The court held the defendants were not entitled to compensation for loss of access to the City’s effluent resulting from the City’s compliance-driven change in treatment and discharge location.
- The court rejected the argument that the City’s historical effluent discharge transformed the flow into a natural stream flow that limited the City’s control over the imported water and its effluent.

## Legal Principles

- An importer and original appropriator of municipal water retains superior control over the disposition of imported water, including reuse, recapture, and changes in the point or manner of discharge of resulting effluent, absent a legally recognized surrender of that control.
- Downstream users who appropriate return flows or municipal effluent take such water subject to the superior rights of the importer/original appropriator and generally cannot require continuation of a particular discharge practice.
- Long-standing reliance by downstream appropriators on a municipality’s discharge of imported-water effluent does not, by itself, create a compensable property right against the municipality when the municipality alters discharge to meet lawful water-quality requirements.

## Conclusion

The court held that the City could modify its sewage treatment and change where its imported-water effluent entered Sugar Creek to comply with water-quality laws without paying compensation to downstream appropriators whose diversions depended on the former discharge location.


Thayer v. City of Rawlins, 594 P.2d 951 (Wyo. 1979)