State v. Morros

The Bureau of Land Management and U.S. Forest Service (defendants) applied for state water permits to provide water to livestock and wildlife on federal land surrounding Blue Lake, Nevada, and the state engineer granted the permits. Various state entities challenged the grant, arguing federal ownership of the water rights would harm the public interest by reducing water available for other future uses. The district court reversed the permits, relying on a 1914 Nevada precedent (Prosole) holding that the party who applies water to the soil for a beneficial purpose — not merely diverts it — is the true appropriator, and reasoning the federal agencies didn't own the livestock or wildlife that would use the water.