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'Ghost claims' of dead pioneers haunt South Dakota water rights

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The state wants to cancel a water right near this section of Rapid Creek east of Farmingdale that dates back to 1896.

It’s a safe bet that neither John P. Plunkett nor Edward Lynch will show up to defend their water rights when a state board considers terminating them later this year.

That’s because Plunkett and Lynch are dead — and have been for a long time.

Yet their joint rights to divert water from Rapid Creek live on, because they obtained the rights in 1896, more than a decade before the government of South Dakota began regulating the use of water.

The grandfathered status of the old Plunkett-Lynch water rights means they are still technically in force, as are 437 other sets of water rights filed prior to the adoption of state water-use laws in 1907. Many of the rights are for large amounts of water, and some are attached to famous names like Seth Bullock, the legendary lawman of the Deadwood gold-rush era who still technically owns a water right on the Redwater River in Butte County.

One modern expert refers to the pre-regulatory water rights as “ghost claims,” and their potential to haunt modern water management is highlighted by the Plunkett-Lynch case. The case could soon be the subject of an adversarial hearing involving state regulators who want to cancel the water rights and a local rancher, Richard Rausch, who wants to keep the rights attached to the land he leases.

If Rausch can prove his claim to the water rights, he could gain access to a volume of water that is greater than the entire flow of the creek in some dry years. And the water right's effective date of 1896 would put Rausch at the front of the priority line, ahead of later rights issued to other users, during periods of low water.

'Absurd and speculative claims'

It was 1891, just two years after South Dakota statehood, when Plunkett and Lynch first filed their water-rights claim on Rapid Creek about 20 miles southeast of Rapid City. Some errors in the language of the original document led them to refile it in 1896.

In that 1896 document, which was recorded by the Pennington County Register of Deeds, Plunkett and Lynch formalized their intention to dig a ditch and divert water for “milling, manufacturing, irrigating, domestic and other useful purposes.”

The two men must have liked what they saw in the clear and cool waters of Rapid Creek, which tumbles out of the Black Hills, runs onto the plains and dumps into the Cheyenne River near the edge of the Badlands.

Plunkett and Lynch laid claim to 1,000 miner’s inches of water, which equates to nearly 9,000 gallons per minute. That’s about half the entire flow of the creek in a typical year, according to modern data collected from less than a mile upstream.

By the time the Legislature passed laws in 1907 requiring state-issued permits for future water rights, there were already hundreds of locally recorded rights in county courthouses. Most were in the West River region, where farmers needed irrigation to overcome a dearth of rain and prospectors searched for gold in streams.

The job of sorting through those pre-existing water-rights fell to the newly created position of state engineer, filled by Samuel Lea. He began collecting documents from county officials, and he went out to inspect local water-rights claims and found many were for huge amounts of water.

“The natural tendency was to make the claim large enough to cover all possible requirements, and in most cases greater than there was any expectation of using,” Lea wrote in a 1908 report. “This resulted in many instances in absurd and speculative claims, and the records show numerous cases where each of a number of claims to the water of a stream, filed in accordance with the former statutes, involved a larger quantity of water than had ever flowed in it, even during flood periods.”

Lea suspected many of the old claims were abandoned and could be legally terminated.

“In this way the records show a large number of appropriations of water which are no longer valid,” Lea wrote, “but which will require careful investigation to separate from those remaining in full force and effect.”

Lea got busy with other duties that fell to his new and growing office, and much of the careful investigation of old water rights that he proposed apparently never occurred.

Eric Gronlund, who works in the modern Water Rights Program of the state Department of Environment and Natural Resources, said his office tries to chip away at the ghost claims when it can. But the office has an even bigger backlog of modern permits, which constitute permission for an applicant to develop a water right. If development occurs, the state is supposed to conduct a re-inspection for the potential issuance of a water license.

There are now nearly 2,000 permits lingering in the state water-rights database, including modern permits and the pre-regulatory ghost claims. Gronlund said the state has hired two water-rights inspectors to attack the backlog.

“The last two or three years, we have been making a concerted effort to get on that list and work toward reducing it,” Gronlund said.

Old claim unearthed

It was that effort to attack the permit backlog that resurrected the names of Plunkett and Lynch. The dead pioneers’ water rights are located on land alongside Rapid Creek that was acquired decades later by Victor Bollmann, of Wisconsin. He leased the land to local rancher Richard Rausch.

Bollmann obtained his own Rapid Creek water-use permit from the state in 1975, and the state conducted a licensing inspection last month. The state inspector learned that Victor had died and passed the land to his sons, Richard and Robert, also of Wisconsin. So, the inspector sent the Bollmanns a letter advising them to file an ownership-change document so the licensing of their water permit could proceed.

Meanwhile, the state inspector discovered the old Plunkett-Lynch water rights assigned to the Bollmanns’ land. The inspector determined that the ancient water rights were never developed or were abandoned long ago.

An old newspaper legal advertisement indicates that financial problems might have prevented Plunkett and Lynch from digging or maintaining their proposed irrigation ditch. The pair took on several loans from Illinois lenders in 1893 and eventually defaulted; by 1906, the loans were foreclosed and some Rapid City real estate used as collateral was put up for sale to cover the debts.

All of that water had long since gone under the proverbial bridge by the time a state water-rights inspector visited Rausch in August to talk about the Plunkett-Lynch water rights. According to the inspector’s written report, Rausch, who’s rented land from the Bollmann family since 1982, was not aware of the old water rights and consented to their cancellation. A state Water Management Board hearing for that purpose was scheduled for Oct. 8.

Then, on Sept. 8, Rausch notified the state’s Water Rights Program that he had changed his mind.

“If given the chance,” wrote Rausch, who declined an interview request from the Journal, “we would do what is required to keep the 1896 water rights in place.”

Rausch’s change of heart triggered an automatic postponement of the hearing until November or December. In the meantime, if he hopes to keep the Plunkett-Lynch water rights, he has some work to do.

David Ganje, a local attorney who specializes in natural-resource cases but is not involved in the Plunkett-Lynch matter, said Rausch will have to show a chain of land ownership stretching from the Bollmanns back to Plunkett and Lynch. Rausch must also produce evidence from the past that he intended to keep the old water rights — proof of digging or piping projects, letters of inquiry to engineers about potential irrigation work, etc.

Experts urges caution by state

Given Rausch’s reported admission that he was not aware of the old water rights until the state brought them to his attention, he could face long odds. State regulators, meanwhile, are getting a preview of the legal thicket that could await them if they try to purge other ghost claims.

Ganje used the phrase “ghost claims” to describe pre-1907 water rights. He said state regulators should be careful about how they treat the old claims, because water rights are property rights, and anyone with a claim to property is entitled to certain constitutional protections.

In a ghost-claim case, Ganje said, the passage of so many decades makes it possible that people unknown to state regulators could have a claim to the water rights. If those people are not properly notified, they could eventually claim their property rights were violated.

Ganje noted that the state very nearly canceled the Plunkett-Lynch water rights after limited communication with a few people and a notice published in a newspaper. Instead, Ganje proposed, the state should work through the courts to serve formal notices on people potentially affected by a water-rights cancellation.

Doing otherwise, Ganje said, could put state regulators at risk of improperly taking someone’s property.

“They have a tendency to short-circuit the process sometimes, and that likely happens if the state continues to do more of these ancient water-rights claim recoveries, most of which are probably abandoned,” Ganje said. “I accept that most of them are probably abandoned, but I don’t accept that all of them are.”

It’s not only the potential owners of ghost claims that could be affected. Applications for new water rights could also be affected, because state regulators have to determine how much unclaimed water is available before issuing new permits. If a large amount of water is tied up in a ghost claim, the state might have to go through the process of canceling the ghost claim, and the new applicant could be made to wait while that happens.

“So there is an incentive to clean up these old claims and recover them,” Ganje said. “But I just want it done right.”

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Enterprise Reporter

Enterprise reporter for the Rapid City Journal.