Spear T Ranch, Inc. v. Knaub

This appeal presents the question whether a surface water appropriator has a claim against a ground water user for interference with a surface water users’ appropriation.

Spear T Ranch, Inc. (Spear T), a surface water appropriator, appeals a district court order dismissing with prejudice its complaint seeking an injunction and damages for the loss of surface water from Pumpkin Creek. The appellees are ground water irrigators in the Pumpkin Creek basin.

On appeal, Spear T argues that it has stated a claim for conversion, injunction, or trespass. The appellees, however, argue that any common-law claims are abrogated by the Nebraska Ground Water Management and Protection Act (GWMPA), Neb. Rev. Stat. §§ 46-656.01 through 46-656.67 (Reissue 1998 & Cum. Supp. 2002) (now found at Neb. Rev. Stat. §§ 46-701 through 46-753 (Reissue 2004)). In the alternative, they argue that the issues should be determined by the North Platte Natural Resources District under the doctrine of primary jurisdiction.

I. BACKGROUND

Spear T filed a complaint alleging that it has surface water appropriations on Pumpkin Creek, which runs through Banner and Morrill Counties. The appellees own real property in the Pumpkin Creek basin and have irrigation wells within the boundaries of the basin. The complaint alleged that the ground water irrigation wells are hydrologically connected to Pumpkin Creek. According to Spear T, the appellees’ pumping of ground water over the 4 years preceding the complaint drained water from Pumpkin Creek and deprived Spear T of its surface water appropriations; the complaint alleged that the appellees have continued to pump ground water and that Spear T has been unable to irrigate crops and provide water for livestock. Spear T alleged that the appellees converted its surface water rights to their own use without compensating Spear T and that it would be irreparably harmed if the appellees continued to use their ground water irrigation wells. The complaint sought compensation for the value of the surface water appropriations taken by the appellees or, in the alternative, special damages for the value of the water rights and other damages; it also sought an injunction.

*182 The appellees moved under Neb. Ct. R. of Pldg. in Civ. Actions 12(b) (rev. 2003) to dismiss, alleging that (1) the court lacked subject-matter jurisdiction, (2) the complaint failed to state a claim upon which relief could be granted, and (3) the complaint failed to join necessary parties. Without giving its reasoning, the court dismissed the complaint with prejudice on all three grounds. Spear T appealed.

We initially heard oral arguments in March 2004. After arguments, the appellees moved for additional briefing and reargument to address the primary jurisdiction issue. Also after arguments, 2004 Neb. Laws, L.B. 962, was passed, which changed provisions of the GWMPA. We granted the motion and ordered additional briefing and argument on the following issues: (1) primary jurisdiction; (2) primary jurisdiction because of L.B. 962; (3) the effect of L.B. 962, if any, on the appeal; and (4) whether the GWMPA or L.B. 962 has abrogated any common-law remedies that Spear T might have.

II. ASSIGNMENTS OF ERROR Spear T assigns that the district court erred when it dismissed its complaint for lack of subject-matter jurisdiction, failure to state a claim, and failure to join necessary parties.

III. STANDARD OF REVIEW This action involves a rule 12 motion to dismiss for failure to state a claim and a rule 12 motion to dismiss for failure to join indispensable parties. In 2003, the Nebraska rules of pleading were changed to reflect the federal rules. Thus, we apply the new rules for notice pleading. See Neb. Ct. R. of Pldg. in Civ. Actions 1 (rev. 2004).

A district court’s grant of a motion to dismiss is reviewed de novo. Weeder v. Central Comm. College, ante p. 114, 691 N.W.2d 508 (2005). Complaints should be liberally construed in the plaintiff’s favor and should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff cannot prove any set of facts in support of the claim that would entitle him or her to relief. Kellogg v. Nebraska Dept. of Corr. Servs., ante p. 40, 690 N.W.2d 574 (2005).

The federal courts have made it clear that a complaint should not be dismissed merely because it does not state with *183 precision all elements that give rise to a legal basis for recovery. Schmedding v. Tnemec Co., Inc., 187 F.3d 862 (8th Cir. 1999). As a practical matter, dismissal under rule 12(b)(6) should be granted only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief. See id.

IV. ANALYSIS

The term “surface water” encompasses all waters found on the earth’s surface. Richard S. Harnsberger & Norman W. Thorson, Nebraska Water Law & Administration § 1.04 at 9-10 (Butterworth Legal Publishers 1984). Here, the surface water is the stream on which Spear T has water appropriations. In contrast, ground water is defined as “ ‘that water which occurs or moves, seeps, filters, or percolates through the ground under the surface of the land.’ ” Id. at 12. Accord Neb. Rev. Stat. § 46-635 (Reissue 2004).

Hydrologically, ground water and surface water are inextricably related. Ground water pumping can cause diminished stream-flows. Streamflow can support the potential for subirrigation. Seepage from surface water supplies canals, and deep percolation of applied irrigation water from surface projects can recharge ground water aquifers. Harnsberger & Thorson, supra, § 5.30. Water law commentators have colorfully described this phenomenon: “[A]ll water is interrelated and interdependent. If groundwater were red, most streams would be various shades of pink; if groundwater were poisoned, the streams would also be poisoned.” Richard S. Harnsberger et al., Groundwater: From Windmills to Comprehensive Public Management, 52 Neb. L. Rev. 179, 183 (1973).

But Nebraska water law ignores the hydrological fact that ground water and surface water are inextricably linked. Instead of an integrated system, we have two separate systems, one allocating streamflows and the other allocating ground water. Under constitutional and statutory provisions, streamflows are allocated by priority in time. See Neb. Const, art. XV, § 6. Ground water, in contrast, is governed by a common-law rule of reasonableness and the GWMPA. Moreover, the lack of an integrated system is reinforced by the fact that different agencies regulate *184 ground water and surface water. The Department of Natural Resources regulates surface water appropriations. See Neb. Rev. Stat. § 61-201 et seq. (Reissue 2003 & Cum. Supp. 2004). In contrast, under the GWMPA, ground water is statutorily regulated by each Natural Resources District (NRD).

The tension between the two systems has long been recognized by commentators. See Hamsberger et al., supra at 182 (“[g]round and stream diverters in Nebraska are on a collision course which may occur sooner than most people think”). That day has arrived.

1. Does Spear T Have Common-Law Claim Against Appellees?

We begin by determining whether Spear T has stated a claim. Spear T argues that it has stated a claim based either on the statutory rule of prior appropriation of surface water or on the tort of conversion; we reject these arguments. But as we explain below, we determine that the common law does recognize a tort claim by a surface water appropriator against a ground water user and that Spear T’s complaint could be amended to state a claim.

(a) Prior Appropriation

As noted, under constitutional and statutory provisions, streamflows are allocated by priority in time. In its first attempt to state a claim, Spear T relies on prior appropriation. Spear T argues that because the water is hydrologically connected and because it has a prior surface water appropriation, it has priority to the water. According to Spear T, the water is all one “stream” and, as such, Spear T’s prior appropriation takes priority over other users of the water, including those who withdraw the water from under its lands. Thus, Spear T essentially asks this court to apply legislatively created surface water priorities to ground water use without considering existing common-law rules. We decline to adopt this approach for several reasons.

First, an application of surface water priorities to ground water requires this court to agree with a legal fiction that considers the ground water to be an “underground stream.” We take as true that the water is hydrologically connected, but water rarely runs in a true underground stream. See Richard S. Harnsberger & Norman W. Thorson, Nebraska Water Law & Administration § 1.07 at *185 13-14 (Butterworth Legal Publishers 1984). Adherence to such a view ignores reality.

Second, no statutory or case law authority supports applying surface water appropriations to ground water. We recognize that most legislatures in western states have developed comprehensive appropriation systems overseen by administrative agencies. See Restatement (Second) of Torts, ch. 41, topic 4 (1979). But in Nebraska, the Legislature has not developed an appropriation system that addresses direct conflicts between users of surface and ground water that is hydrologically connected.

Finally, the prior appropriation rule that Spear T advocates would give first-in-time surface water appropriators the right to use whatever water they want to the exclusion of later-in-time ground water users. This could have the effect of shutting down all wells in any area where surface water appropriations are hydrologically connected to ground water. Richard S. Harnsberger et al., Groundwater: From Windmills to Comprehensive Public Management, 52 Neb. L. Rev. 179, 248 (1973) (“[i]f the doctrine of prior appropriation [was] carried to [its] logical conclusion, all Nebraska wells would be shut down”). This would unreasonably deprive many ground water users. Accordingly, we decline to apply the statutory surface water appropriation rules to conflicts between surface and ground water users.

(b) Conversion

Next, Spear T contends that it has stated a claim for conversion. Tortious conversion is any distinct act of dominion wrongfully asserted over another’s property in denial of or inconsistent with that person’s rights. Baye v. Airlite Plastics Co., 260 Neb. 385, 618 N.W.2d 145 (2000).

A right to appropriate surface water however, is not an ownership of property. Instead, the water is viewed as a public want and the appropriation is a right to. use the water. As one article has stated in reference to ground water: “Trespass is unavailable in a typical well interference case because a physical invasion of the plaintiff’s property is lacking. Similarly, an action in conversion is unavailable, since the plaintiff has no private property interest in groundwater, at least not prior to capture.” Harnsberger *186 & Thorson, supra, § 5.27 at 266-67, citing State ex rel. Douglas v. Sporhase, 208 Neb. 703, 305 N.W.2d 614 (1981), reversed on other grounds 458 U.S. 941, 102 S. Ct. 3456, 73 L. Ed. 2d 1254 (1982). Because Spear T does not have a property interest in its surface water appropriation and only has a right to use, it cannot state a claim for conversion or trespass.

(c) Has Spear T Stated Claim Under Other Common-Law Doctrines or, Alternatively, Should It Be Given Leave to Amend?

Although Spear T cannot state a claim under the statutory surface water appropriation rules or for the tort of conversion, this does not end our analysis. The question remains whether it has stated a claim under other common-law principles or if it should be allowed leave to amend to state such a claim.

(i) Review of Common-Law Rules

We begin by reviewing common-law rules that courts have employed to adjudicate disputes between water users.

a. English Rule

Under the English rule of water law — also referred to as the absolute ownership rule — a landowner had absolute ownership of the waters under his or her land. Therefore, the owner could withdraw any quantity of water for any purpose without liability, even though the result was to drain water from beneath surrounding lands. Prather v. Eisenmann, 200 Neb. 1, 261 N.W.2d 766 (1978). See, also, Cline v. American Aggregates, 15 Ohio St. 3d 384, 474 N.E.2d 324 (1984).

The English rule was predicated on protection for the property rights of landowners whose activities resulted in ground water diversion. See, Cline v. American Aggregates, supra, Restatement (Second) of Torts § 858 (1979) (describing English rule). The basis for the rule has also been described as a “feeling that the ways of underground water were too mysterious and unpredictable to allow the establishment of adequate and fair rules for regulation of competing rights to such water.” State v. Michels Pipeline Construction, Inc., 63 Wis. 2d 278, 290-91, 217 N.W.2d 339, 344 (1974). Thus, the English courts adopted the position *187 that everyone was permitted to take and use all the ground water of which they could get possession. Id.

Most American courts, however, have criticized the English rule, recognizing that the rule protected landowners from liability even when water was diverted for malicious purposes. Maerz v U S Steel Corp, 116 Mich. App. 710, 323 N.W.2d 524 (1982), citing Huber v. Merkel, 117 Wis. 355, 94 N.W. 354 (1903). The rule has also been criticized because, although a landowner theoretically had a property right in waters beneath his or her land, the overlying owner with the deepest well or largest pump could control water that would otherwise be available to all. Maerz v U S Steel Corp, supra. See, also, Cline v. American Aggregates, supra; Meeker v. East Orange, 77 N.J.L. 623, 74 A. 379 (1909).

An extreme minority of jurisdictions still adheres to the English rule or a rule that has the same effect as the English rule. See, Maddocks v. Giles, 728 A.2d 150 (Me. 1999); Sipriano v. Great Spring Waters of America, 1 S.W.3d 75 (Tex. 1999). These jurisdictions refuse to apply to ground water the rules applicable to surface water and treat ground water as an entirely separate and unconnected resource that may be used at will by the owner of the overlying land. In each case, the court recognized problems with the reasoning behind the English rule, but in Maddocks, the court deferred to the legislature, which was already taking some action. Likewise, in Sipriano, a constitutional amendment placed the regulation of water in the legislature’s hands.

b. American Rule

Because of disagreement with the English rule, American courts have modified it in different ways. Under what is termed the “American rule” of water law, the owner of the land is entitled to appropriate subterranean or other waters accumulating on the land, but cannot extract and appropriate them in excess of a reasonable and beneficial use of land, especially if the exercise of such use is injurious to others. Prather v. Eisenmann, supra.

Under the American rule, the term “reasonable use” relates to the manner in which water is used upon the appropriator’s land. The adjacent landowners’ interests are in issue only when the appropriator uses water in excess of the reasonable and beneficial use of it upon his or her land and that excess use is *188 injurious to the adjacent landowner. Prather v. Eisenmann, 200 Neb. 1, 261 N.W.2d 766 (1978). The American rule has at times also been referred to as a rule of “reasonable use,” although it does not consider a balancing of the parties’ interests. Thus, one court has stated:

This [reasonable use] designation is unfortunate and in no small measure responsible for the confusion concerning the rule. If applied to this rule, the words reasonable use cannot be given their inherent broad meaning of a use reasonable under all the circumstances. Instead, the words must be given the contrived meaning of a use reasonably related to' enjoyment of the land from which the waters are taken.

Maerz v U S Steel Corp, 116 Mich. App. at 715 n.2, 323 N.W.2d at 527 n.2.

Under the American rule, a person who is deprived of surface water because of the use of ground water by a nearby landowner will recover only when the water was not used for a beneficial purpose on the ground water user’s land.

c. Correlative Rights

The correlative rights rule of water law originated in California and provides that the rights of all landowners over a common aquifer are coequal or correlative and that one cannot extract more than his or her share of the water even for use on his or her own land if other’s rights are injured by the withdrawal. Prather v. Eisenmann, supra. The rule first arose in Katz v. Walkinshaw, 141 Cal. 116, 70 P. 663 (1902). Under the rule, the overlying landowners have no proprietary interest in the water under their ground and each owner over a common pool has a correlative right to make a beneficial use of the water on his or her land. Priority of use is irrelevant because in times of shortage, the common supply is apportioned among the landowners based on their reasonable needs. Richard S. Harnsberger et al., Groundwater: From Windmills to Comprehensive Public Management, 52 Neb. L. Rev. 179 (1973) (describing correlative rights rule).

The principal difficulty with the correlative rights rule is how to allocate the water, and courts have approached the question in different ways. See id. For example, some courts interpret the *189 correlative rights rule as essentially the same as the Restatement view described below. See Maddocks v. Giles, 728 A.2d 150 (Me. 1999). Others view the rule as providing apportionment in times only when there is an insufficient supply for all users. See State v. Michels Pipeline Construction, Inc., 63 Wis. 2d 278, 217 N.W.2d 339 (1974).

Some courts, however, have adopted a reasonable use rule that combines the American rule and correlative rights rule. Under such rules, reasonableness is determined by both the use of the water and the rights of other landowners. Such cases still refer to correlative rights, but differ from the California doctrine. See id.

d. Restatement

The Restatement (Second) of Torts § 858 (1979) essentially adopts a correlative rights rule that allows for a balancing of many factors to determine reasonableness. Although the rule is initially stated in terms of “reasonable use” similar to the American rule, it adds exceptions that draw on principles of correlative rights. The Restatement rule finds its support in principles of nuisance law and has been suggested as the basic framework for well interference cases. See Richard S. Hamsberger & Norman W. Thorson, Nebraska Water Law & Administration § 5.27 (Butterworth Legal Publishers 1984).

The Restatement, § 858 at 258, states in part as follows:

(1) A proprietor of land or his grantee who withdraws ground water from the land and uses it for a beneficial purpose is not subject to liability for interference with the use of water by another, unless

(a) the withdrawal of ground water unreasonably causes harm to a proprietor of neighboring land through lowering the water table or reducing artesian pressure,

(b) the withdrawal of ground water exceeds the proprietor’s reasonable share of the annual supply or total store of ground water, or

(c) the withdrawal of the ground water has a direct and substantial effect upon a watercourse or lake and unreasonably causes harm to a person entitled to the use of its water.

Although § 858 is under chapter 41, topic 4, entitled “Interference With the Use of Water,” id. at 253, a note on that *190 topic’s scope shows that it is intended to apply to water that is hydrologically connected to ground water. The note states in part: “This Topic covers the rights and liabilities of possessors of land and others withdrawing ground water. It also states the rules governing the rights and liabilities of persons using water where ground water is interconnected with the water of watercourses and lakes.” Id. Several courts have adopted the Restatement approach. Cline v. American Aggregates, 15 Ohio St. 3d 384, 474 N.E.2d 324 (1984); State v. Michels Pipeline Construction, Inc., supra; Maerz v U S Steel Corp, 116 Mich. App. 710, 323 N.W.2d 524 (1982).

In addition, the Restatement keeps older definitions of ground water and surface water, but abandons any common-law distinctions between underground watercourses and percolating water. Ground water is defined as “water that naturally lies or flows under the surface of the earth.” Restatement, supra, § 845 at 198. See, also, Maddocks v. Giles, 728 A.2d 150 (Me. 1999). Comment b. of the Restatement, supra, recognizes that ground water may be connected to other forms of water. The comment states: “Most ground water is moving in the hydrologic cycle. It originates from infiltration of precipitation and inflow of streams; it discharges into springs, streams, lakes and oceans. Some ground water is sidetracked from the cycle in closed basins where geologic formations isolate it from recharge or discharge.” Id. at 199.

Although the Restatement rule is derived from principles of reasonable use, the rule differs from the American rule because it balances the equities and hardships between competing users. Maddocks v. Giles, supra. The Restatement (Second) of Torts § 858, comment b. at 259 (1979), notes in part:

The general rule is phrased in terms of nonliability in order to carry forward the policy of encouraging ground water use by permitting more or less unrestricted development of the resource by those who have access to it. The policy and the rule are justified by the fact that since most ground water basins are very large and contain vast quantities of water, it is usually impossible for a single water user to capture the entire supply and leave no water for others.

Comment c. at 259-60 provides:

*191 Exceptions to the general rale are stated in Clauses (a), (b), and (c) of Subsection (1). They incorporate all grounds of liability for use of ground water recognized by the common law but remove some of the restrictions contained in those rales of liability. The majority “American rale of reasonable use” . . . was phrased in terms of the overlying landowner’s right to capture ground water, limited by restrictions on the place of use of the water. In operation this protected small wells for domestic and agricultural uses from the harmful effects of large wells for municipal and industrial supply. The first exception to nonliability, contained in Clause (l)(a), continues this protection but follows a modem tendency to extend similar protection to cases of harm done by unreasonably large withdrawals for operations conducted on overlying lands.

The second exception, Clause (l)(b), imposes liability upon a landowner who withdraws more than his reasonable share of the common supply. This has always been a possible outcome of a controversy concerning ground water if the source could be classified as an underground stream or if the rule of correlative rights were applied. The concept of underground streams was unscientific and its application could be quite arbitrary and the applicability of the rale of correlative rights was in doubt in many states. This exception merges the two rales and makes it possible to apportion shares of the water in the source to the owners of overlying land whenever total withdrawals reach such magnitude that it is necessary to protect the share of an individual landowner from appropriation by others.

The last exception, Clause (l)(c), restates the conditions for recognizing that ground water and surface water are often closely interrelated and should be treated as a single source. In the past this took many forms. Withdrawals of ground water have been called unreasonable when they reduced the flow of springs. A variant of the underground stream concept has enabled the courts to regulate some ground water as the underground segment of a surface stream. The part of an aquifer in contact with the bed and banks of a stream has been called the underflow of the stream and treated as part of *192 it. This Section substitutes a pragmatic test for determining the interconnection instead of employing these doubtful and unscientific categorizations.

Thus, under the Restatement, reasonableness of use is determined on a case-by-case basis and many factors can be considered; the test is flexible. The test for reasonableness is provided in the Restatement:

The determination of the reasonableness of a use of water depends upon a consideration of the interests of the riparian proprietor making the use, of any riparian proprietor harmed by it and of society as a whole. Factors that affect the determination include the following:

(a) The purpose of the use,

(b) the suitability of the use to the watercourse or lake,

(c) the economic value of the use,

(d) the social value of the use,

(e) the extent and amount of harm it causes,

(f) the practicality of avoiding the harm by adjusting the use or method of use of one proprietor or the other,

(g) the practicality of adjusting the quantity of water used by each proprietor,

(h) the protection of existing values of water uses, land, investments and enterprises, and

(i) the justice of requiring the user causing harm to bear the loss.

Restatement (Second) of Torts § 850A at 220 (1979).

e. Common-Law Claims in Disputes Between Ground Water Users in Nebraska

We have never been confronted with whether a surface water appropriator may bring a common-law claim against the user of hydrologically connected ground water. We have, however, recognized that a ground water user may bring a common-law claim against another ground water user. We generally have stated the common law in a manner consistent with the American rule blended with a rule of correlative rights. For example, we have stated:

[T]he owner of land is entitled to appropriate subterranean waters found under his land, but he cannot extract and appropriate them in excess of a reasonable and beneficial use upon *193 the land which he owns, especially if such use is injurious to others who have substantial rights to the waters, and if the natural underground supply is insufficient for all owners, each is entitled to a reasonable proportion of the whole, and while a lesser number of states have adopted this rule, it is in our opinion, supported by the better reasoning.

Olson v. City of Wahoo, 124 Neb, 802, 811, 248 N.W. 304, 308 (1933). See, also, Metropolitan Utilities Dist. v. Merritt Beach Co., 179 Neb. 783, 140 N.W.2d 626 (1966); Luchsinger v. Loup River Public Power District, 140 Neb. 179, 299 N.W. 549 (1941); Osterman v. Central Nebraska Public Power and Irrigation District, 131 Neb. 356, 268 N.W. 334 (1936), overruled on other grounds, Wasserburger v. Coffee, 180 Neb. 149, 141 N.W.2d 738 (1966). We have also discussed, but never applied, the Restatement, supra. Prather v. Eisenmann, 200 Neb. 1, 261 N.W.2d 766 (1978).

(ii) Adoption of Restatement for Disputes Between Surface Water Users and Ground Water Users

Having reviewed the common-law rules, we now consider whether we will recognize a common-law claim for interference with surface water by the user of hydrologically connected ground water.

Initially, we reject a rule that would bar a surface water appropriator from recovering in all'situations. Such a rule would ignore the hydrological fact that a ground water user’s actions may have significant, negative consequences for surface water appropriated.

Instead, the common law should acknowledge and attempt to balance the competing equities of ground water users and surface water appropriated; the Restatement approach best accomplishes this. The Restatement recognizes that ground water and surface water are interconnected and that in determining the rights and liabilities of competing users, the fact finder needs broad discretion. Thus, when applying the Restatement, the fact finder has flexibility to consider many factors such as those listed in § 850A, along with other factors that could affect a determination of reasonable use.

Adoption of the Restatement is the modern trend. See, Cline v. American Aggregates, 15 Ohio St. 3d 384, 474 N.E.2d 324 *194 (1984); State v. Michels Pipeline Construction, Inc., 63 Wis. 2d 278, 217 N.W.2d 339 (1974); Maerz v U S Steel Corp, 116 Mich. App. 710, 323 N.W.2d 524 (1982). Further, commentators have recommended the adoption of the Restatement to both this court and the Legislature. See Richard S. Harnsberger et al., Groundwater: From Windmills to Comprehensive Public Management, 52 Neb. L. Rev. 179 (1973).

Accordingly, we adopt the Restatement to govern conflicts between users of hydrologically connected surface water and ground water. Specifically, we hold:

A proprietor of land or his [or her] grantee who withdraws ground water from the land and uses it for a beneficial purpose is not subject to liability for interference with the use of water of another, unless ... the withdrawal of the ground water has a direct and substantial effect upon a watercourse or lake and unreasonably causes harm to a person entitled to the use of its water.

Restatement (Second) of Torts § 858(l)(c) at 258 (1979). Whether a ground water user has unreasonably caused harm to a surface water user is decided on a case-by-case basis. In making the reasonableness determination, the Restatement, supra, § 850A, provides a valuable guide, but we emphasize that the test is flexible and that a trial court should consider any factors it deems relevant.

We digress momentarily to offer a word of caution. Although the issue of available remedies is not yet before us, courts should be cautious when considering remedies for interference with surface water. For example, because the recharge of a stream that has dried up because of well pumping could take years, an injunction against pumping might only serve to deprive everyone in a water basin. Such a remedy would be unreasonable and inequitable. Likewise, a court can consider a surface water appropriator’s ability to obtain an exception to stays on drilling new wells, or any additional programs that might provide relief.

(iii) Has Spear T Stated Claim Under Restatement?

Having adopted the Restatement approach, we next consider whether Spear T has stated a claim upon which relief can be granted. Our review of Spear T’s complaint shows that it did allege — although not precisely — that the appellees’ withdrawal of *195 ground water has directly and substantially affected Pumpkin Creek. However, although Spear T alleged that it has suffered harm, it did not allege that the appellees have unreasonably caused that harm. Thus, Spear T has failed to state a claim upon which relief can be granted.

We determine, however, that Spear T should be allowed to amend its complaint. Leave to amend should be granted liberally when justice so requires. Frey v. City of Herculaneum, 44 F.3d 667 (8th Cir. 1995). Accordingly, we determine that the district court erred when it dismissed Spear T’s complaint with prejudice for failure to state a claim.

2. Abrogation

Having concluded that a common-law claim exists and that Spear T could amend its claim, we turn to the appellees’ contention that by passing the GWMPA, the Legislature has abrogated the common-law claim. We have also asked the parties to brief whether 2004 Neb. Laws, L.B. 962, has abrogated any common-law claim.

(a) GWMPA

The Legislature is free to create and abolish rights as long as no vested right is disturbed. Colton v. Dewey, 212 Neb. 126, 321 N.W.2d 913 (1982). But statutes which change or take away a common-law right must be strictly