KVIG Informative

A trial that began this week in a Las Vegas courtroom could cost Nevada taxpayers billions of dollars — and reshape how the state’s driest resource gets regulated for good.

California developers behind the failed Coyote Springs master-planned community are seeking at least $1.5 billion, plus interest and attorneys’ fees, from the state of Nevada, according to court documents. The nonjury trial, which began Wednesday before Clark County District Judge Mark Denton, is expected to run roughly 30 days and could take months to resolve, according to Nevada Public Radio, a nonprofit member-supported broadcaster covering the case.

Coyote Springs Investment LLC, owned by the Seeno family of California, argues Nevada’s state engineer effectively took the water rights the company needs to build homes on the property — a claim the company says amounts to an unconstitutional taking under the Nevada Constitution’s property clause.

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The dispute traces back decades. Nevada’s state engineer determined years ago that the aquifer beneath Coyote Springs, roughly 50 miles northeast of Las Vegas, does not hold enough groundwater to support the master-planned city developers once envisioned — a project pitched as twice the size of Summerlin, complete with golf courses and hotel-casinos. The Nevada Supreme Court upheld the state’s broad authority to regulate connected groundwater basins in a unanimous ruling, according to the nonprofit Nevada Independent.

Not a single home has been built at Coyote Springs. State officials argue every restriction placed on the developer’s water rights was backed by science and aimed at protecting the public, including the Muddy River and the endangered Moapa dace, a fish found nowhere else on Earth.

If Judge Denton rules for the developers, a second trial phase would ask a jury to set the payout — a sum attorneys say could reach into the billions and would come directly out of the state’s coffers.

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The case tests Nevada’s system of prior appropriation, the century-old doctrine that ranks water rights by seniority and allows the state to cut off junior rights holders first during shortages. A ruling for the developers could open the door for any water user whose rights get curtailed to sue the state for compensation — a scenario water attorneys warn Nevada’s budget could not sustain.

Judge Denton is set to retire at the start of next year. Whatever he decides in the coming months may be his final word on a case attorneys on both sides agree could determine whether Nevada’s state engineer ever again says no to a developer without fear of the bill that follows.