Tag: adverse possession

Court’s Denial of Zoning Permit for Nestlé Pump Station Exposes Achilles Heel of Private Bottled Water Industry

Bottled water

By Jim Olson

Jim Olson is FLOW’s Founder, President, and Legal Advisor

On December 3, the Michigan Court of Appeals released an opinion nullifying a lower court order that had allowed the water-bottling giant Nestlé to build an industrial booster pump facility to transport 210 million gallons per year of groundwater that feeds headwater creeks in Osceola Township, just north of Evart. 

In one sense, the decision was narrow. The Court simply interpreted and applied zoning law and the language of the township’s zoning ordinance, and concluded that the industrial-sized pump facility was not authorized as a listed use or “essential public service” in a long-established agricultural district. 

In another sense, the decision exposes the Achilles heel of the private bottled water industry’s water withdrawals, diversions, and sales throughout Michigan and the country.

No matter what arguments Nestlé threw at the appeals court—and there were many—the court rejected them. Nestlé tried to convince the court to allow the booster pump to expand its water diversion to Evart and then down U.S. 131 by truck to its plant in Stanwood by claiming, alternatively, that it was engaged in an essential public service, a public service, a public necessity, or a public water supply. 

But Michigan’s second highest court found that, no matter how you pump it, the removal of 576,000 gallons per day, seven days a week, of public water for private bottled water sales was not public, not essential, not necessary, not a public service, and not a public water supply. In other words, bottled water diversion and export operations can no longer be paraded as public. The bottled water industry has only one purpose—maximum profit from the sale of packaged public water.

At its core, the conversion of Michigan’s sovereign water into a product and revenue does not square with our laws and customs that view water as “a commons” for reasonable use to serve the needs of landowners, communities, and the public. Water has been considered public for more than 1,500 years. Until the last 30 years, our common law never contemplated the sale of massive quantities of water to consumers living outside a river’s or lake’s watershed, or outside the Great Lakes Basin.

It is a frequent misconception that landowners own the groundwater beneath their feet or the stream passing by the shore. Landowners or occupants of land do not own the water passing under or through their land; they have only a right of reasonable use, and may use it in connection with their land in some beneficial way, so long as the use does not interfere or diminish the water or their neighbor’s reasonable use in connection with the overlying land. 

Lower Court Decision

Along with gaining state approval to pump 400 gallons per minute, Nestlé leased farmland and filed an application for a zoning permit with Osceola Township to locate an industrial-size booster pump in the A-1 Agricultural District to expand capacity of a pipeline that runs to a truck transfer-station located two miles south of Evart. The industrial use did not appear eligible as a use in the farming district. The Planning Commission noted, however, that it might qualify as an “essential service” if Nestlé could show that the private facility constituted a “public convenience and necessity,” but ultimately denied the request because it did not meet that standard.

Nestlé appealed to the county circuit court, ruling that the proposed pump facility constituted an “essential public service,” which was exempt from the ordinance. The court reasoned that, from Nestlé’s viewpoint, the facility was an essential service, and that, because it satisfied a general public demand for consuming bottled water, it was public. 

Court of Appeals Decision

The Township then filed an appeal with the Michigan Court of Appeals. After briefing and oral arguments, the appeals court on December 3 reversed the lower court’s ruling that the pump station qualified as an “essential public service.”

Nestlé also submitted several alternative claims and arguments that its booster pump station qualified for approval under the zoning ordinance. In every instance the Court completely rejected Nestlé’s arguments.

First, Nestlé argued that its pumping station was an “essential public service.” The Court acknowledged that “water is essential” to life—sustenance, health, farming, industry, electricity, recreation, and other human needs—but rejected the argument that selling bottled water to consumers at a profit somehow constitutes a “public service.” The Court found that “public service” means supplying water as a service to the general public or community through public waterworks, in the same way as any public utility, such as for the delivery of gas or electricity; the appeals court concluded that bottled water sales are a convenience, and sometimes are a help consumers in an emergency—but not a service that’s essential to the public.

Second, as a backup claim, Nestlé argued that its pump facility qualified as an “essential public service” because the large-volume water well permit constituted a “public water supply” under Michigan’s Safe Drinking Water Act (“SDWA”). However, the appeals court determined that the private sale of bottled water was not in the nature of a public utility subject to the Michigan Public Service Commission. Moreover, in a latter section of its decision, the appeals court noted that under the SDWA a “community supply” and “non-community supply” refer to a public water supply that provides year-round service to living units of residents, places of employment, schools, or daycare centers. The Court concluded that bottled water sales to consumers do not meet the definition of a public water supply.

Third, the company argued that the pump station qualified as an agricultural use. But the appeals court pointed to the definition in the zoning ordinance, finding that farming uses included growing, irrigation, food storage, or distribution facilities for agricultural products, and concluded that the industrial pump facility did not qualify as an agricultural use. Water is not “something produced,” the appeals court stated. Water used for farming is not, in itself, a farm product.

Fourth, Nestlé argued that its pump station qualified as an “extraction” of natural resources like sand and gravel under a special use permit provision in the ordinance. But once more the appeals court rejected the company’s argument because extraction or mining of a natural resource is not the same as the removal of water that continually moves through subsurface soils to replenish a stream, lake, or wetland, or provide a source of water for overlying landowners. In other words, water is not owned and extracted, water is a common resource reasonably used by others as it moves through the watershed. The sale of water permanently removed or severed from the water cycle by its nature does not replenish a shared common resource, it irretrievably depletes the resource: “… [E]xtracting water and sending it to other places where it cannot return to the water table… faster than the aquifer can replenish is an ‘irretrievable’ depletion,” the appeals court ruled. The court’s reasoning is entirely in accord with the common law rule in Michigan that water cannot be diverted off-tract or out of a watershed for sale in distant places if it diminishes other uses of water in connection with land in the watershed, the level of a marsh, lake, or stream. A large-volume pump diverting water from the land used by others for farming purposes is not compatible with farming or agricultural use.

Fifth, Nestlé argued that Michigan’s 2008 Water Withdrawal Act preempted local zoning ordinances that restricted the withdrawal of water: “[A] local unit of government shall not enact or enforce an ordinance that regulates a large quantity withdrawal,” stipulated the act. But the appeals court distinguished the regulation of groundwater withdrawal from the regulation of allowable land uses under a zoning ordinance, and concluded that the zoning ordinance “does not have the effect of regulating… the removal of water.”

Finally, Nestlé argued that its pumping station was an inextricable part of its large-volume water well that had been permitted by the State as a “public water supply” under the SDWA. However, the appeals court, again, ruled that water withdrawn for sale as bottled water for private gain did not fit the definition of a “public water supply,” emphasizing that the 2008 amendments to the SDWA created an entirely new classification for permitting bottled water operations, completely apart from sections of the SDWA that governed permits for a public water supply.

Future of Free Public Water for Private Bottling, Sale, and Profit

As a result of the court of appeals decision, for Nestlé to locate an industrial pumping station in Osceola Township, it will have to convince the Township’s board to amend the zoning ordinance. But the ruling goes far beyond zoning law.

In its broadest sense, the Osceola Township case could mean a lot more. Over the past two decades, bottled water has represented a battleground in many locations, including Maine and Vermont, Maryland and Florida, Texas and California, and across the border in Hamilton, Ontario. 

There are three fundamental issues in play: First, as seen by the court findings in the 2005 Nestlé case in Mecosta County, Michigan, groundwater withdrawals diverted for bottled water on a permanent basis cause substantial local impacts to fish, canoeing, kayaking, wildlife, and habitat in tributary creeks, lakes, and wetlands. Second, the removal of water for sale out of a watershed is not a use of water like farming or manufacturing in connection with land and returned to the watershed; it is a diversion and sale or export. Third, almost no one—regardless of their political persuasions—warms to the notion that someone can withdraw water, bottle it, and then claim it as its own to sell and profit without paying a penny for it. The public, in effect, subsidizes the company’s profit, without ever authorizing the company to sell the water.

Private large-volume groundwater operations like Nestlé’s in Michigan aren’t the only threat. Many water bottlers like Dasani and Aquafina hook up to a public water supply, package it, and convert it into a product to sell after paying a tiny fraction of a penny per gallon to the local municipality. In these cases, the corporations do not need a groundwater permit. They simply convert a public water service based on a nonprofit rate structure—spread across all those using the service—into profit. Like Nestlé, water bottlers who convert a public water supply into a package to sell at lucrative prices are subsidized by the other ratepayers and the public water supply service.

How can a bottled water company pay only an infinitesimal fraction of a penny for a gallon of water—based on a pro-rated cost of the municipal operation spread across all ratepayers—package, or bottle it, and convert it into a product or export t for sale for its own profit without authorization to sell or profit from the sale of a public water service?

The Court of Appeals decision in Osceola Township is a significant victory for local communities, water users, and citizens of Michigan who so often struggle to combat large, exploitive operations such as high-volume bottled water exports, Confined Animal Feeding Operations (CAFOs), fracking, and mining extraction. Just because a company thinks it can withdraw water and sell it because it holds a permit that says the withdrawal doesn’t violate impact standards, doesn’t mean the extraction is authorized or lawful under zoning laws, water rights law, or the sovereign state and public trust interest in water for the benefit of all citizens. Corporate water bottling is a private use, bent on convenience and profit. Even in humanitarian situations, like supplying bottled water in Flint, the water withdrawal still benefits the company. 

The answer to the larger question, “Who owns the groundwater?” is that, “No one owns the water.” Not the landowners, not bottled water companies, not even the local public water works. Groundwater is public water held by the State for the benefit of its citizens’ health, safety, and wellbeing. Michigan water is for use here in our local watersheds and the Great Lakes Basin, not for sale in some distant land.

Whose waterfront is it anyway?

Whose waterfront is it anyway?

An important court case in Wisconsin will offer one answer to that question – – and it could have important implications for public access and open space in the redevelopment of Michigan’s and Great Lakes’ shorelines. 

The case, which is on appeal from a trial court that sided with the public’s interests, involves a developer’s proposal to build a hotel on the shores of Sturgeon Bay, on land that was formerly submerged and belonging to the state and citizens before being unlawfully filled in during the last century.

Some community officials back the development as economic development that benefits the city. But a group of concerned citizens and public trust defenders, called Friends of Sturgeon Bay, has sued the city to block the developers’ attempt to lock up shoreline. They pose the question: why would rare public filled land be privately developed, when private land can be acquired for the development on adjacent private lands, and the open space can be preserved? Wisconsin citizens asked FLOW’s founder, Jim Olson, to file an amicus brief on their side. We posed questions to Jim about the case and why FLOW has chosen to get involved.


How did your brief come to be?

An attorney from Madison, Wisconsin, contacted me by phone in early June to ask me if I would be willing to write an amicus brief for FLOW to submit to the Court of Appeals in Wisconsin. Because of FLOW’s mission to protect citizens’ rights in our lands and waters protected by the 150-year-old public trust in the Great Lakes basin, she asked us to support the trial court decision blocking the City of Sturgeon Bay’s sale of historically filled bottomlands of Lake Michigan. It’s in the middle of the waterfront in Sturgeon Bay, Wisconsin, which is a popular tourist destination on the Door Peninsula.

What is the fundamental public trust issue at stake in the Sturgeon Bay litigation?

The fundamental issue for the citizens of Sturgeon Bay is the loss of a state-owned bottomlands parcel on the city’s waterfront. The city picked the parcel up from a foreclosure sale, packaged it with a redevelopment project, and entered into an agreement to sell it to a private developer. The rub? There is no legislative grant or disposition from the state to the city or any of the previous owners, as required by public trust common law.

Under the common law, states on behalf of citizens are the sovereign owner of the bottomlands and waters of the Great Lakes. Under this principle, state sovereign bottomlands cannot be transferred for purely private purposes. This is because there are certain commons like the Great Lakes that are not property. Government can’t sell off Great Lakes bottomlands for private gain, because it violates the limitations conferred by people on government under our state constitutions. Just because owners of adjacent private land fill up the Great Lakes over decades doesn’t change the constitutional and public trust limitation.

The City claims it had been filled for so long when it acquired the property, it took the title of the previous owner who the city claims acquired title by adverse possession (known colloquially as “squatter’s rights”) as the result of a fill and use that went on for more than 50 years. Under public trust law, filled or unfilled bottomlands below the Ordinary High Water Mark of the Great Lakes cannot be conveyed by the state or anyone for a private purpose or development. All a state can convey is occupancy to use, subject to reservation of state title, public trust and control, and revocation in the future. Private “squatters” can’t claim ownership over public trust bottomlands that the state can’t convey in the first place.

The fundamental legal question is whether a private person or the city can acquire filled bottomlands based on the legal doctrine of adverse possession. Can someone squat, in this case fill, state sovereign land for several decades, and claim ownership while no one was looking? This is the question I was asked to brief under public trust law, because if the state can’t convey public trust bottomlands, filled or otherwise, to a private or even public corporation, how can a title be acquired by adverse possession?

The answer is: “it can’t.” A landowner might drive over his neighbor’s side yard to get to the back forty for several decades in full view while the neighbor sits on his or her hands, and claim adverse possession, because state laws authorizes a court to grant relief as a result of the open trespass and inaction on the part of the neighbor. In effect, the legislature has declared that the neighbor has consented to a conveyance of the driveway because of the inaction. But when it comes to state public trust bottomlands of the Great Lakes, it can’t be done. Why? Because if the legislature doesn’t have the power to convey these public trust lands outright, it can’t pass a law that would authorize someone to own public trust land by walking through the back-door over a period of years.

What are the implications outside of Sturgeon Bay – in Michigan, for example?

The question is critical for citizens in states with hundreds of towns and cities, like Sturgeon Bay, on lakeshores and harbors of the Great Lakes. There are around 175 such communities in Michigan alone. If historically filled bottomlands can be taken by adverse possession, hundreds if not thousands of parcels owned by the states for the benefit of citizens could be up for grabs, at a time when public access, recreation, boating, navigation, open space, are more critical than ever for communities recovering from the taint of the rust-belt era. This is an opportunity for rust-belt communities to embrace their best public asset and become water-belt communities.

Why does it merit FLOW’s participation?

FLOW must participate to make sure the public trust doctrine is not distorted to justify loss of state public trust bottomlands to private control and ownership. One of our areas of concern has been to help cities and towns on the Great Lakes preserve public access, open space, and recreation and parkland along their waterfronts. With our expertise on public trust law, we determined that in most states, there is no adverse possession of public trust bottomlands, because it circumvents– end-runs –the rule that only a legislature can transfer within a very narrow range bottomlands to private or public entities, like a city, and it must be for a public trust use, like navigation, open space, recreation, boating, fishing; but the legislature has no power to convey its sovereign state title for purely private purpose development. We must make sure cities and developers don’t take public trust lands in which the whole people have a legal right of public access, use, and enjoyment by adverse possession.

I noticed in the brief you cite a recent Michigan court decision regarding Mackinac Island, a case in which you were involved. How does it relate to this case?

It’s directly relevant, because a private corporation bought a commercial docking operation, partly on top of historical fill dating back into the 1800s, and claimed it owned the filled land and dock on state public trust bottomlands based on adverse possession. The Court of Appeals, sitting as court of claims, granted summary disposition to the state, and tossed the private corporation’s claim out of court. The Court in effect declared, “These filled bottomlands cannot be owned privately by any one, because they rightly still belong to the state as trustees for the benefit of current and future generations.” States and citizens must vigilantly maintain and protect these public sovereign trust lands and waters, because they support the values important to all, including long-term quality of life and economic prosperity. There is a private market for private property, and that is for private development, not the Great Lakes.