Provenance & Applicability Of Nestlé SB Mountain H2O Claims Dubious

By Amanda Frye and Mark Gutglueck
The water rights the Nestlé Corporation cites as the basis of its claim to the more than 35 million gallons of water it pumps annually from a remote canyon in the San Bernardino Mountains and markets as its Arrowhead brand do not pertain to either the aquifer or the location from which that water is being taken, an examination of the historical record shows.
In 2015, Nestlé withdrew 36 million gallons from remote Strawberry Canyon located at the approximate 5,200-foot elevation level in the San Bernardino Mountains by means of a series of tunnels, boreholes and horizontal wells. Nestlé did so under the aegis of a permit that expired 28 years ago, but which it has extended by continuing to pay the U.S. Government the $524 per year standard permitting fee for such uses in all National Forests. Forest Service officials say permits remain in effect until they are renewed or denied.
Nestlé of North America, a corporate subsidiary of the Swiss-owned Nestlé Corporation, acquired the expired permit from Perrier when it bought out that entity in 1992.
Perrier had acquired the permit when it purchased the BCI -Arrowhead Drinking Water Co. in 1987, at which time the permit was yet active. That permit allowed the holder to extract water from a significant below-ground source in the San Bernardino Mountains. The Arrowhead Springs Company formed in 1909, drawing surface water from Coldwater Canyon near the old Arrowhead Resort at approximately 2,000 feet and later from Waterman Canyon. In the 1930s, the Arrowhead Drinking Water Company obtained a special use permit from the Forest Service, and tunnels, boreholes and horizontal wells were placed at the higher elevation of 5,200 feet at the headwaters to Strawberry Creek.
The Arrowhead Springs Company merged with the Los Angeles-based Puritas Water Company in 1929 under the corporate parenthood of Consolidated Water. In 1978, Arrowhead Puritas renewed its permit for harvesting water from Strawberry Canyon by means of boreholes and horizontal wells, for which it paid the U.S. Government $524 per year, a standard fee for such uses in all National Forests. That permit expired 28 years ago, but the company continues to pay the miniscule fees associated with that permit and utilizes for commercial purposes water thousands of times in excess of that used by local domestic users who even before California Governor Jerry Brown’s executive order limiting water use statewide had their access to mountain water cut off.
During the early and middle part of the 20th Century, the Arrowhead Puritas Water Company enlarged the pipes used to tap into the aquifer below and around Strawberry Creek and over the years built the company into the largest purveyor of bottled water on the West Coast based upon the quality of that water.
According to industry analysts, Perrier, which was then a privately-held company, paid over $400 million to acquire the Arrowhead Puritas operation 29 years ago. Many at that time considered the French company’s investment to be an ill-advised one, given that the permit on the Strawberry Canyon spring water was due to expire the following year.
The U.S. Forest Service, however, did not bring the curtain down on Perrier’s continued drafting from the source. Perrier started operating under  “Arrowhead Mountain Spring Water Company,” which is not registered with the Secretary of State nor as a fictitious business name in San Bernardino County. Furthermore, the Forest Service did not undertake a review of the permit. Rather, the company simply stayed current on its permit fee and neither the Forest Service nor any other arm of the federal government interfered with the operation, which entailed Nestle/Arrowhead continuing to have free rein over the Strawberry Canyon water. Following the elapsing of the permit in 1988, Perrier and then Nestlé continued to pay the $524 annual fee attached to the permit, and continued to extract water unabated from Strawberry Springs, conveying the water away in a stainless steel pipeline. When Nestlé purchased Perrier in 1992 for $2.6 billion, it subsumed the Arrowhead operation.
When Nestlé inherited the operation in Strawberry Canyon from Perrier in 1992, it continued to operated under the “Arrowhead Mountain Spring Water Company” shell and the United States Forest Service allowed Nestlé to continue to utilize the expired permit, sending its invoices for the $524 annual charge to use the “irrigation” transmission pipeline to the Arrowhead Mountain Spring Water Company.
For the next 23 years, Nestlé’s use of the water from Strawberry Canyon went unchallenged, as all parties accepted the status quo. No effort by the United States Forest Service was made to terminate the permit. Nor, however, was the permit renewed.
Last October, with California in the midst of what scientists characterized as the most severe drought the state has suffered in 1,200 years and following the governor’s executive order severely curtailing the amount of water people can use in virtually every part of the state, a coalition of environmental groups filed suit against the United States Forest Service, essentially accusing it of according Nestlé favorable treatment by allowing that company to continue to use the expired permit to draw millions of gallons of water it is not entitled to. According to the suit, the overdraft of water in Strawberry Canyon has compromised the ecosystem supporting endangered and threatened species.
In responding to the suit, Nestlé has marshaled a chain of possession that delineates what it has claimed are water rights of its corporate predecessors extending back to the 1800s. Research by the Sentinel, however, casts the provenance of those rights and their applicability to Strawberry Canyon in doubt.
Nestlé Waters of North America, Inc. has made claims about pre-1914 water rights citing a possessory claim and land patent. Those claims exist in three documents available to the Sentinel.
On March 30, 2015, in a letter to United States Department of Agriculture Office of General Counsel Joshua Rider, Nestlé Waters of North America’s attorney states “Nestle’s rights to the spring waters in Strawberry Canyon trace back to a possessory claim by David Noble Smith recorded on March 21, 1865 (Book “A” of Possessory Claims, p. 75), and a subsequent patent from the United States to Mr. Smith dated February 1, 1882 (Book “B” of Patents, p. 91).”
On May 2, 2016 Nestle’s submitted National Environmental Protection Act special use permit comments, stating, “Nestlé Waters of North America’s ownership of and rights to the waters of Strawberry Canyon derive from California state law. Nestlé Waters of North America’s water rights date back to a possessory claim recorded in 1865, and a subsequent land patent from the United States recorded in 1882.”
On May 6, 2016 the Nestlé Waters of North America amicus curiae brief filed in federal court stated that “Nestlé Waters of North America’s senior appropriative rights to these spring waters traces back over 150 years to a possessory claim recorded in 1865, a United States patent recorded 1882…”
The ultimate authority as to the validity of these claims exists in the historical public record in San Bernardino County. Recently, the Sentinel has found information in that public record which contradicts Nestlé Waters of North America’s recent possessory pre-1914 water rights claims to “spring” water in the San Bernardino National Forest Strawberry Canyon.
On April 19, 2016, the Sentinel sought and obtained access to San Bernardino County Archives to review the cited original possessory claim and land patent. A review of relevant documents demonstrated that Nestlé Waters of North America’s cited possessory claim and land patent by David Noble Smith were for 160 acres located at the “foot” of the mountain (“Ace of Spades” now referred to as the “Arrowhead”) located in Township 1 North Range 4 West in the San Bernardino Meridian (T1N R4W SBM). The Strawberry Canyon wells/tunnels/ “springs” are located in Township 2 N Range 3W SBM (T2N R3W SBM). The possessory claim and land patent is over two miles away and a different township and range than the Strawberry Creek headwater wells/tunnels/“springs.”
Nestlé Waters of North America has cited a possessory claim and land patent that has no water rights claim in T2N R3W SBM.  Furthermore, Nestlé Waters of North America has no pre-1914 water rights claims for the springs in Strawberry Canyon headwaters. The recordation of the David Noble Smith estate to Darby et al. October 12, 1886 is for T1N R4W SBM, which further indicates that there was no claim to the Strawberry Creek headwater springs in T2N R3W SBM. Forest Service Quadrangle maps, state well numbers., and expired permit all show Nestlé Waters of North America wells/tunnels/“springs” in Strawberry Canyon are in T2N R3W, not the location of Nestlé Waters of North America’s cited possessory claim T1N R4W.
The connection between Strawberry Canyon headwaters rights and the possessory claim do not hold water when original documents are examined. Nestlé Waters of North America’s claim to Strawberry Canyon headwater spring rights by possessory claim appears to be erroneously based, as the possessory claim, subsequent land patent and next owner real estate transfer clearly document a different township and range than Nestlé Waters of North America’s Strawberry Creek headwater well/tunnel/“spring” locations.
It thus appears that Nestlé Waters of North America has made a false claim to the United States Forest Service by citing Strawberry Creek headwater springs as “pre-1914 rights” from a possessory claim and patent that are located in a different township and range with no mention of Strawberry Creek headwater springs or water rights anywhere in the original historical record.
Jane Lazgin, director of media and public relations for Nestlé Waters of North America told the Sentinel she did not have access to the referenced documents but that “Arrowhead has vested, senior water rights and has demonstrated continuous beneficial use of those rights since the late 1800s. In California, “pre-1914” water rights are, by law, the most senior water rights in the state. In fact, our water rights pre-date the creation of the San Bernardino National Forest.”
Lazgin continued, “Nestlé Waters pays the United States Forest Service for the use of a narrow, five-foot wide right-of-way on which we maintain a four-inch diameter, stainless steel pipeline. The fee for this right-of-way is established by a schedule of fees set by regulations adopted by the U.S. Forest Service, which is applied to all special use permit holders on United States Forest Service land. Nestlé Waters has been reporting its water use to the State Water Resources Control Board since 1947, through the reporting program specifically established under California law. Nestlé complies with all reporting requirements and continues to report its water use from this spring as mandated by California law.”
Noting that “The State Water Resources Control Board has asked Nestlé Waters for information pertaining to our water rights in the San Bernardino National Forest,” Lazgin said, “We appreciate the opportunity to meet with them on June 16th and to provide any information the board may need. We look forward to a productive conversation but cannot comment further given the pending review.”
In April 2015, after Governor Jerry Brown’s water use reduction mandate was issued, an online community group calling itself the Courage Campaign collected more than 135,000 signatures endorsing a demand that Nestlé discontinue its Southern California bottling operations which utilize water drafted from public lands for which it does not have a current permit. The Courage Campaign petitioned the State Water Resources Control Board to utilize its authority in shuttering those operations.
In the face of that request, Nestlé’s water drafting in Strawberry Canyon continued unabated.
In reaction to the Courage Campaign’s action, as well as the lawsuit filed in October 2015, the San Bernardino National Forest initiated a National Environmental Policy Act analysis to determine if the Nestlé Waters North America Special Use Permit should be extended. That permit, if granted, would allow Nestlé to continue to with the extraction and transmission of water using existing improvements in the Strawberry Creek watershed. In addition to authorizing the existing improvements, the permit would require Nestlé to conduct hydrologic and riparian area studies and to modify operations under an adaptive management plan if monitoring showed that water extraction was impacting surface water flow and riparian dependent resources within the National Forest.
When the US. Forest Service announced in March that it would undertake the National Environmental Protection Act study, it said that it would take as long as five years to complete and that in the meantime, that is, for the five year duration, Nestlé would be able to continue to operate under the auspices of its expired special use permit. This was met with protests from environmentalists who maintain the continued water drafting from Strawberry Canyon represents will further perpetuate ecological havoc that has already gone on too long.
For its part, Nestlé disputes that the United States Forest Service has the authority to stop its San Bernardino Mountain water use, citing what it claims are inviolate water rights. Still, the company indicated it would cooperate with the Forest Service in carrying out its survey, though it is not legally bound to do so. “Nestlé Waters North America will commit to adhere to an objective and scientifically sound adaptive management plan, but must do so voluntarily in order to comply with the law,” Nestlé stated in comments regarding the proposed permit renewal process the company submitted to the United States Forest Service on May 2, 2016.

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