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Law in The West

Henry Miller and James Ben Ali Haggin: Star-Crossed Fortune Seekers

In 1849, German immigrant Henry Miller set sail from New York for California. While crossing the isthmus he contracted Panama fever, delaying his arrival in San Francisco until 1850. It's possible that, while lying sick in Panama, he met James Ben Ali Haggin. Haggin, a Kentucky lawyer, was also on his way to California through Panama when he caught yellow fever. Bedridden for weeks, he did not reach San Francisco until 1850.

Miller and Haggin had more in common than being near death in Panama. Both realized that California offered more than gold; in fact, both set out intending to mine the greater profits lying on the periphery of the gold fields by selling supplies and services to the miners in the hills. Nor would this be the last time their paths crossed. In 1877, Miller and Haggin began a ten-year legal battle over California's most valuable resource that ended with a critical innovation in western resource law.

Miller and Lux: Meat Moguls

Henry Miller was born Heinrich Alfred Kreiser in 1827 on a small farm in Germany. At fourteen he left home, lived briefly in England and Holland, and then sailed for America in 1844. In New York, he apprenticed himself to a butcher, and within two years he owned his own shop. Yet, like thousands of other fortune seekers, he decided to sail for California in 1949. He bought a "non-transferable" ticket from a young shoe-salesman named Henry Miller, and with this new name set off for gold country. In San Francisco, Miller found work as a butcher. Within a year, he had his own shop. Within three years, he had the second largest meat business in the city.

Miller's rival, Charles Lux, had an eerily similar story. Born in Alsace in 1823, he left home at age ten and immigrated to America at age 16. In New York, he worked as a butcher's helper until the promise of a more prosperous life led him to California. Like Miller, he built a thriving meat business in San Francisco.

In 1858, however, the two immigrant butchers decided that together they could build an empire, so they formed a partnership and began buying cattle and grazing land. Over the next three decades, they accumulated more than a million acres throughout California, Nevada, and Oregon. Central to their success were 160,000 acres in the heart of California's San Joaquin Valley. Miller and Lux begin buying up the swampy Buena Vista Slough, stretching between Tulare Lake and Buena Vista Lake, during the 1870s. This flood plain for the Kern River was something of a no-man's land, but Miller and Lux realized that the land could be reclaimed by constructing canals and levees. If the water was channeled into a series of holding reservoirs, the fifty-mile swamp could be turned into a rich cattle pasture with ready access to water.

Reclaiming the Buena Vista Slough

By 1877, Miller and Lux had purchased close to 80,000 acres in the slough and they began their reclamation project. Employing up to 300 recently laid-off workers from the Southern Pacific Railroad, they built a massive system of canals and levees. The centerpiece was a 250 foot wide canal stretching 21 miles down the heart of the Buena Vista Slough, twelve feet deep and buttressed by twelve foot levee walls.

It was a masterful piece of engineering, but their timing could not have been worse. A terrible drought plagued California from 1877 to 1879, reducing the run-off from the Sierra Nevada mountain range and turning the mighty Kern River into a creek. Miller and Lux lost more than 10,000 head of cattle to starvation and dehydration during the first year of drought. They realized, however, that the drought was not entirely to blame for their problems; they also had a competitor upstream for the water of the Kern River.

James Haggin: "Grand Khan of the Kern"

James Ben Ali Haggin left an affluent family and legal practice in Kentucky to come to California in 1850. Unlike Miller and Lux, he did not rise from rags to riches in the golden state, but like them, he did come for the opportunities lying away from the gold fields. He opened a legal practice upon arrival, but soon invested in a wide range of enterprises, including banking, transportation, and manufacturing. Anaconda Copper, Homestake Mining, and Wells Fargo were among his major holdings. In addition, he took advantage of federal land policies to accumulate an enormous amount of real estate.

From the railroads, Haggin purchased 60,000 acres. Still, he realized an even bigger bonanza with the passage of the Desert Lands Act in 1877. In an effort to lure settlers to arid regions of the West, the federal government offered 640 acres for only $1.25 per acre if the buyer agreed to place the land under irrigation. Haggin bought his 640 acres, then he used dummy filers to accumulate several hundred thousand more – 100,000 of them in the immediate watershed of the Kern River. Then, to complete his stranglehold on the water flowing from the Sierras down the Kern River, he purchased the water rights and private canals from the landowners adjacent to his own vast holdings.

Lux v. Haggin

Despite all their business and engineering acumen, Miller and Lux largely ignored Haggin's real estate grab, until they realized that he was diverting a large part of the Kern River's upstream run-off for irrigation. So in 1879, they took Haggin to court arguing that by diverting water upstream Haggin was infringing upon their "riparian rights."

American water law originated in the English common law. One of the fundamental principles within this ancient code was that land owners adjacent to a watercourse possessed a right to make use of the water from that stream. But these riparian rights were not unqualified; the land owner could not excessively impede the flow of the stream or interfere with the water rights possessed by land owners downstream.

During the first half of the nineteenth century, American courts amended water law in order to accommodate the needs of new industries. Mills and manufacturers using water to power their machinery needed to dam streams and divert rivers from their natural beds. If traditional riparian rights were enforced, these industries could not operate. Therefore, the courts introduced rights of "appropriation"; a river could be dammed if doing so served some larger beneficial purpose; the riparian rights of landowners downstream could be circumscribed in order to advance "the natural rights of all."35

The primary question before the California court in Lux v. Haggin was whether traditional riparian rights applied, as Miller and Lux argued, or whether this newer concept of appropriation, worked out to advance eastern industrial development, applied to western farming, as Haggin argued. Still, before this issue could be addressed, Miller and Lux had to fend off Haggin's assertion that a "slough" was not a river. Did Miller and Lux own an amorphous swamp unrecognized by water law or did they own a legally recognized "watercourse" with "bed, banks, and water."36

After two years of arguments, Bakersfield Judge Benjamin Brundage ruled that the Buena Vista Slough possessed "no continuous or defined channel." It was little more than a swamp, and therefore Miller and Lux possessed no riparian rights. Moreover, the judge continued, even if a river did run through their land any unqualified invocation of riparian right would "condemn to perpetual barrenness" the majority of California's central valley. Appropriation rights, previously awarded to industry, must be to granted to farmers; without irrigation, "widespread disaster and ruin" would befall California's burgeoning agricultural economy.37

The California Doctrine

Miller and Lux had lost, but they were wealthy men, and a critical piece of their cattle empire hinged on securing the water rights to their Buena Vista holdings. Therefore, they appealed the decision of the state district court, and in 1884, the California State Supreme Court agreed to hear their case. This time the Court was swayed by the ranchers' demand that the Court employ a more flexible definition of a watercourse. Moreover, the Court suggested that California's water law must reflect the diverse needs of the state. Riparian rights must be respected; this fundamental common law protection for the reasonable use of the water flowing through an individual's land must be preserved. But the state's economic development also demanded that major concessions to this principle be made. Therefore, the Court established something of a dual water law. Eventually known as the California Doctrine, the Court held that landowners possessed riparian rights but farmers and factory owners could claim rights of appropriation if their use served a beneficial purpose and if their use pre-dated the use of riparian claimants downstream.

Miller and Lux, as the users "first in time," prevailed in this instance. But the Court's flexible delineation of water law enabled future "appropriators" legal protection if they built their canals, dams, or irrigation ditches prior to the initiation of riparian use downstream. Even Haggin, although the loser on appeal, did not suffer for long. Miller and Lux now held the right to the uninterrupted flow of the Kern River to their Buena Vista lands, but this brought them more water than they really wanted. Built during the dry years of 1877-1879, their system of reservoirs and canals simply could not handle the run-off during wet years. Therefore they struck a deal with Haggin: the ranchers would retain exclusive riparian rights to the waters of the Kern River from September through February, but from March through August, Haggin and the farmers upstream could draw off up to two-thirds of the river's water.

The emergence of the California Doctrine provided state courts with a flexible tool in arbitrating water disputes. The deal worked out by Miller and Haggin following the trial provided an example of the sort of collaborative solutions that might be reached through the political process. In 1887, the state legislature passed the Wright Act authorizing communities to form irrigation districts to manage local water needs. These districts were empowered to impose taxes, sell bonds, acquire land through eminent domain, and develop irrigation projects. It would be another twenty years before these irrigation districts would embark on a state-changing program of irrigation development. But with the Wright Act and Lux v. Haggin on the books, California was politically and legally prepared to deal with the water challenges of the twentieth century.

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