St. Jude’s v. Roaring Fork

The Colorado Supreme Court’s June 29, 2015, opinion in St. Jude’s Co. v. Roaring Fork Club, L.L.C. (2015 CO 51), has significant ramifications for many Colorado water right owners. Specifically, despite the existence of numerous prior decreed water rights for such purposes throughout Colorado, a 5-2 majority of the Court held that the diversion of water from a stream for off-channel direct flow use for aesthetic, recreation and piscatorial purposes does not constitute a beneficial use of water for which an appropriative right may be decreed.

The complete opinion is available at: St. Jude’s v. Roaring Fork opinion

The present case arose following a history of litigation between two neighboring landowners. Roaring Fork Club owns and operates a private golf and fishing resort near Basalt, Colorado, along the Roaring Fork River. St. Jude’s own a contiguous parcel down-gradient of the Club’s property. Certain ditch structures cross the Club property, delivering water diverted from the Roaring Fork for use on both properties. In 2007, the Club filed an application in the Division 5 Water Court seeking to confirm an appropriation of 21 c.f.s. from the Roaring Fork River, for diversions into the RFC Ditch for aesthetic, recreation and piscatorial uses. This new appropriation was in addition to other water rights existing in the RFC Ditch, including irrigation water rights.

Following a trial on the Club’s application, and additional claims, the court approved the application and entered a decree awarding an absolute water right for the aesthetic, recreation and piscatorial uses. The Water Judge found that, beginning in June of 1999, the Club had diverted water through the RFC Ditch, which was used by Club members as a visual aesthetic amenity, in addition to facilitating fishing in the Ditch.

An appeal ensued, and, following briefing and oral argument, the Colorado Supreme Court requested supplemental briefing to address the issue of whether diversions for direct flow aesthetic, recreation and piscatorial purposes constitute a beneficial use of water. A number of parties filed amicus briefs concerning the supplemental issue, including a collective of private land owners located throughout Colorado with existing decreed water rights for such purposes.

Justice Coats wrote the opinion for the majority, reversing the decree for aesthetic, recreation and piscatorial uses. In doing so, the majority found that the Colorado Constitution guarantees “the right to divert the unappropriated waters of any natural stream to beneficial uses,” but does not define beneficial use. Therefore, Colorado’s legislature has the authority to define and expand the concept of beneficial use. The majority next concluded that the current statutory definition of beneficial use merely defines the characteristics necessary to qualify as a beneficial use, while providing three specific examples (including storage of water for purposes including recreational and fishery purposes). Upon determining that the Club’s claimed aesthetic, recreation and piscatorial purposes did not comport with any of the express statutory examples (as the appropriation at issue did not involve the storage of water), Justice Coats further concluded that such purposes also do not satisfy the characteristics of beneficial use. In particular, the majority held that diversions of water for aesthetic, recreation and piscatorial purposes are too “passive” and “subjective” to constitute an actual beneficial use.

Justice Marquez and Justice Hood dissented on the issue of beneficial use, stating that the majority mistakenly characterized recreational and fishery uses as purely “passive” uses of water. The dissent also took issue with the majority’s apparent creation of a requirement that a water right is valid only if the intended use is achieved through an “objectively-active” means of production. Finally, the dissent noted the many existing water rights decrees for such purposes, the prior certainty of which is now called into question by the majority opinion.

 

 

2014 Law of the Rio Grande Conference

David Hayes will be among the speakers at the 14th annual Law of the Rio Grande conference, April 10-11, 2014, in Santa Fe, New Mexico.  David will be providing an update on water-related legislative and litigation issues in Colorado.  Additional information about the conference can be found at:  http://www.cle.com/product.php?proid=1445&src=Featured&page=Law_of_the_Rio_Grande

Bill Proposes to Limit Irrigation of Lawn Grass

A bill was recently introduced in the Colorado Legislature which would limit lawn irrigation that relies on water that is changed from agricultural irrigation.  Senate Bill 17 would prohibit a local government from approving a development permit application unless the local government approving the application has adopted an enforceable resolution or ordinance that limits the amount of irrigated grass on residential lots in the proposed development to no more than 15% of the total aggregate area of all residential lots in the development.  The bill would apply only if any part of the water supply for the development is changed from agricultural irrigation use on or after January 1, 2016, and would not apply to irrigation with raw water.  Senate Bill 17 was introduced by Senators Ellen Roberts, R-Durango, and Mary Hodge, D-Brighton, and is being sponsored in the House by Representatives Ed Vigil, D-Fort Garland, and Don Coram, R-Montrose.  According to Senator Roberts, the bill was “developed to address the widespread concern that our state is rapidly losing land in agricultural production due to municipalities buying the water rights for their growth.”

COLORADO WATER PLAN

COLORADO WATER PLAN

 

On May 14, 2013, Colorado Governor John Hickenlooper issued Executive Order D2013-005, directing the Colorado Water Conservation Board to commence work on the Colorado Water Plan.  Governor Hickenlooper’s announcement indicates that Colorado “deserves a plan for its water future use that aligns the state’s many and varied water efforts and streamlines the regulatory processes” and that builds on prior collaborative efforts.

Previous Studies and Planning Efforts.

In 2003, the Colorado legislature commissioned the Colorado Water Conservation Board (“CWCB”) to undertake the Statewide Water Supply Initiative (“SWSI”), an 18-month study to examine existing water supplies in each of Colorado’s water basins, existing and projected demands through the year 2030, and a range of potential options to meet that demand.  The CWCB published a report of its findings in 2004.  Several additional reports have been undertaken by the CWCB as part of the SWSI effort, including the Phase II report in 2007 entitled “Colorado’s Water Supply Future,” which confirmed and updated the CWCB’s analysis of the state’s water supply needs and recommended implementation measures.

In 2006, the Colorado legislature enacted HB-1177, the Water for the 21st Century Act (the “Act”).  The Act created an Interbasin Compact Committee (the “IBCC”), a 27-member committee established to facilitate conversations between water basins and to address statewide water issues.  The Act also created a Basin Roundtable process to facilitate discussions on water supply, demand, and management issues within each of the state’s major river basins.  Each of the nine Basin Roundtables was required to develop a basin-wide water needs assessment describing consumptive water needs, nonconsumptive water needs, available water supplies, and proposed projects or methods to meet the identified water needs and achieve water supply sustainability.

In January of 2011, an update to the Colorado’s Water Supply Future report was prepared for the CWCB, including an analysis of the water supply demands to 2050, an analysis of consumptive and nonconsumptive needs in each basin, an analysis of water availability in the basins, possible water conservation measures and development opportunities for new water supplies, and the costs to implement possible water supply strategies.  Of particular significance is the report’s conclusion that the “gap” between water supplies and anticipated demands could exceed 500,000 acre-feet by 2050.

Each water basin in Colorado has a gap between its water supplies and anticipated 2050 demand.  Accordingly, each Basin Roundtable was tasked with promulgating a Basin Implementation Plan analyzing and proposing implementation of projects to address the gap in that basin.  The Basin Implementation Plans are to describe specific projects and methods to meet consumptive and nonconsumptive municipal, industrial, agricultural, environmental, and recreational water needs.  The plans are also to identify specific implementation strategies that will be needed to fully implement currently planned and new projects, operational agreements, flow protections, or other methods to address the basin gap.  The Basin Roundtables have begun drafting the Basin Implementation Plans.

The Colorado Water Plan.

The Colorado Water Plan (“CWP”) is intended to build on the work of the IBCC and Basin Roundtables and is expected to rely heavily on the Basin Implementation Plans.  One of the main purposes of the CWP is to address the gap between water supplies and anticipated demands identified during the Basin Roundtable process and the SWSI.  Other significant purposes of the CWP identified by Governor Hickenlooper include: assessing the impact of drought conditions; reducing the transfer of water rights from agricultural irrigation to other uses and the consequent dry-up of irrigated land (commonly known as “buy and dry”); researching mechanisms to conjunctively address water quantity and quality issues; and protecting Colorado’s rights under interstate water compacts and equitable apportionment decrees.

Governor Hickenlooper’s Executive Order includes several specific directives to meet these goals, including:

1.  The CWP must incorporate and reflect the following values:

a.  A productive economy that supports vibrant and sustainable cities, viable and productive agriculture, and a robust skiing, recreation, and tourism industry;

b.  Efficient and effective water infrastructure promoting smart land use; and

c.  A strong environment that includes healthy watersheds, rivers and streams, and wildlife.

2.   The CWCB, as the main drafter of the CWP, is to:

 a.  Align state water projects, studies, funding, and other efforts to the greatest extent possible;

b.  Streamline the state’s role in the approval and regulatory processes regarding water projects;

c.  Place an emphasis on expediting permitting processes for projects that stress conservation, innovation, collaboration, and other criteria that promote efficient infrastructure, smart land use, healthy watersheds and smart water conservation practices; and

d.  Assemble ad-hoc panels of Coloradans and inter-agency working groups to develop recommendations regarding specific topics.

 3.  The CWP is to reaffirm the Colorado Constitution’s recognition of priority of appropriation while offering recommendations to the Governor for legislation that will improve coordination, streamline processes, and align state efforts.

The CWCB must submit a draft CWP for review by the Governor’s Office no later than December 10, 2014, and complete the final plan no later than December 10, 2015.  To meet those deadlines, the CWCB has released a draft framework of the CWP and answers to frequently asked questions about the plan.  Among the most important functions of the Plan will be the establishment of criteria against which future water projects and programs will be evaluated in considering the extent to which the state will provide “support.”  Those criteria will certainly influence future decisions about state funding of water projects.  The extent to which they will also be relevant in permit decisions under existing state and federal law, or other policy actions such as the position taken by state agencies in water court proceedings, is an issue that has not yet been determined.

While it is expected that there will be several opportunities for the public to provide input on the CWP process, water users should closely monitor the development of the Basin Implementation Plan in their river basin and participate in both that local planning process and the discussion of relevant elements of the CWP.  The CWCB’s draft guidance document provides useful information on the expected contents of these plans.  The basin plans will, among other things, identify future water supply projects and methods that are needed to meet consumptive and non-consumptive needs in the basin.  The CWCB’s FAQ guidance notes that inclusion of a project or method in a basin plan “is likely a good indicator of a project that will meet the water plan’s criteria, but does not necessarily guarantee that the project will ultimately receive state support,” which “will hinge on whether or not a project meets criteria set forth in Colorado’s Water Plan.” Significantly, “if a currently-contemplated project were not included in the basin’s plan, state support would be unlikely.”  Therefore, water providers and other water users who are contemplating projects or programs are well advised to participate in the development of their local Basin Implementation Plans.

 

 

 

Concerning the Application for Water Rights of Raftopoulos Brothers in Moffat County

On June 24, 2013 the Colorado Supreme Court issued a single opinion addressing three separate applications determined by the Division No. 6 Water Court.  The three applications involve competing efforts to develop water rights on Talamantes Creek in Moffat County, including claims for new conditional water storage rights for industrial and commercial uses.  The Supreme Court vacated the Division 6 Water Judge’s grant of conditional water rights for industrial and commercial uses, and, in doing so, re-emphasized several important principles concerning both the “anti-speculation” and “can and will” doctrines.  A complete copy of the opinion is available at: http://www.cobar.org/opinions/opinion.cfm?opinionid=8995&courtid=2

Raftopoulos Application.

The first matter (11SA86) considered in the June 24th opinion involves an application filed by Raftopoulos Brothers in Case No. 08CW89, seeking both a conditional 1440 acre-foot storage water right and a change of direct flow water rights for the Yarnell Ditch No. 1 and Rouff Ditch No. 1.  The Division 6 Water Judge granted the Raftopoulos application, over the objections of a neighboring landowner, Vermillion Ranch Limited Partnership.  Vermillion appealed, challenging: (1) the Water Judge’s determination that the phrase “all other beneficial purposes” in the original adjudication of the Yarnell and Rouff Ditches included industrial and commercial uses, and (2) the Water Judge’s grant of conditional water storage rights for industrial and commercial uses (the Water Judge’s grant of conditional storage rights for other beneficial uses was not contested in the appeal).

The Supreme Court vacated the Water Judge’s determination that industrial and commercial uses were included among the original decreed uses of the Yarnell and Rouff Ditches, because the change sought for the Ditches by Raftopoulos was limited solely to irrigation.  Accordingly, the Water Judge lacked jurisdiction to interpret the original decree as to uses other than irrigation.  The Supreme Court also vacated the decree granting the Raftopoulos claims for conditional water storage rights for industrial and commercial uses, holding that Raftopoulos failed to establish the claimed water rights were non-speculative.  At trial, Raftopoulos provided testimony as to water demands associated with potential future oil and gas development in the region, and presented a contract with Moffat County for dust suppression water on county roads.  However, in vacating the decree, Justice Marquez holds that such evidence was inadequate to demonstrate a non-speculative need for water, in part because the contract with Moffat County was entered into subsequent to filing the Raftopoulos water court application.

Vermillion Applications.

The second matter (11SA124) considered in the Supreme Court’s June 24th opinion involves two applications filed by Vermillion, requesting a finding of diligence for existing conditional storage rights and a claim for new, additional conditional storage water rights, including for industrial and commercial purposes.  After initially denying these claims, the Division 6 Water Judge entered a decree granting the Vermillion applications.  Raftopoulos appealed, contending that Vermillion failed to satisfy its burden of establishing that the claimed reservoirs “can and will” be completed.

The Supreme Court vacated the Water Judge’s determination as to the Vermillion applications.  In doing so, the Court determined that Vermillion failed to establish a “substantial probability that within a reasonable time the facilities necessary to effect the appropriation can and will be completed with diligence.”  2013 CO 41, ¶45.  Specifically, evidence in the record indicated potential soil stability problems, and evidence concerning economic feasibility was lacking from the record.  Justice Marquez’s opinion reaffirms the principle that satisfying can and will requirement is a balancing test with several possible considerations, including, but not limited to, economic feasibility, technical feasibility, land acquisition, and governmental permits or approvals.

 

PPL Montana, LLC v. Montana

On February 22, 2012, the United States Supreme Court announced its unanimous opinion in PPL Montana, LLC v. Montana, in which it reversed the Montana Supreme Court’s decision that the State of Montana had acquired ownership and control over certain riverbed land. Petros & White filed an amicus brief on behalf of The Creekside Coalition, Colorado Cattlemen’s Association, Colorado Farm Bureau, and Dude Ranchers’ Association. The following is a brief summary of the opinion.

1. Issue: The central issue in the case was whether the Montana Supreme Court correctly determined that the State of Montana owns and can charge rent for the use of certain sections of the beds of the Missouri, Clark Fork, and Madison Rivers.

2. Legal framework: The holding turns on whether, at the time of statehood, the rivers in question were “navigable in fact,” meaning that they were “used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.” Two specific aspects of this legal standard were at issue in this case:

(a) Whether navigability in fact is to be determined on a on a segment‐by‐segment basis or, as asserted by the Montana courts, by looking at the “river as a whole” and ignoring “merely short interruptions” that had to be portaged; and

(b) The extent to which evidence of modern‐day recreational boating is relevant to determining whether a river was used, or susceptible of being used, as a highway for commerce at the time of statehood.

3. Holding: The Court reversed the Montana Supreme Court’s ruling that Montana owns and may charge for the occupancy and use of the riverbeds at issue.

(a) The Court specifically held that the Great Falls reach of the Missouri River is not navigable for title purposes and is therefore not owned by the State of Montana.

(b) The Court stated that “there is a significant likelihood that some of the other river stretches in dispute also fail the federal test of navigability for the purpose of determining title,” but remanded the case to the Montana courts to assess the relevant evidence in light of the principles discussed in the opinion.

(c) The Court held that the Montana courts erred as a matter of law in relying on evidence of present‐day, primarily recreational use of the Madison River to determine navigability at statehood because they did not make the required findings that: “(1) the watercraft are meaningfully similar to those in customary use for trade and travel at the time of statehood; and (2) the river’s post‐statehood condition is not materially different from its physical condition at statehood.”

4. Basis for holding: Several aspects of the Court’s holding are particularly relevant to rivers in Colorado and other western states:

(a) The segment‐by‐segment analysis of navigability is appropriate because “physical conditions that affect navigability often vary significantly over the length of a river. This is particularly true with longer rivers, which can traverse vastly different terrain and the flow of which can be affected by varying local climates.” “These shifts in physical conditions provide a means to determine appropriate start points and end points for the segment in question. Topographical and geographical indicators may assist.” The Court cited cases involving gradient changes and the location of a tributary providing additional flow as examples of these physical parameters.

(b) The Court set a high standard for disregarding nonnavigable segments. “Even if the law might find some nonnavigable segments so minimal that they would merit treatment as part of a longer, navigable reach for purposes of title under the equal footing doctrine, it is doubtful that any of the segments in this case would meet that standard, and one—the Great Falls reach—certainly would not.

As an initial matter, the kinds of considerations that would define a de minimis exception to the segment‐by‐segment approach would be those related to principles of ownership and title, such as inadministrability of parcels of exceedingly small size, or worthlessness of the parcels due to overdivision.”

(c) With respect to river segments requiring portage, the Court observed that: “[e]ven if portage were to take travelers only one day, its significance is the same: it demonstrates the need to bypass the river segment, all because that part of the river is nonnavigable.”

(d) The Court made several significant statements concerning evidence of present‐day recreational use:

“Mere use by initial explorers or trappers, who may have dragged their boats in or alongside the river despite its nonnavigability in order to avoid getting lost, or to provide water for their horses and themselves, is not itself enough.”

“At a minimum, therefore, the party seeking to use present‐day evidence for title purposes must show: (1) the watercraft are meaningfully similar to those in customary use for trade and travel at the time of statehood; and (2) the river’s post‐statehood condition is not materially different from its physical condition at statehood.”

“If modern watercraft permit navigability where the historical watercraft would not, or if the river has changed in ways that substantially improve its navigability, then the evidence of present‐day use has little or no bearing on navigability at statehood.”

“Modern recreational fishing boats, including inflatable rafts and lightweight canoes or kayaks, may be able to navigate waters much more shallow or with rockier beds than the boats customarily used for trade and travel at statehood.”

In regard to changes in the condition of the river, the Court specifically observed that the evidence offered by PPL “at least suggests that as a result of PPL’s dams, the river has become ‘less torrential’ in high flow periods and less shallow in low flow periods. Thus, the river may well be easier to navigate now than at statehood.”

With respect to seasonal variations in flow, the Court held that “[w]hile the Montana court was correct that a river need not be susceptible of navigation at every point during the year, neither can that susceptibility be so brief that it is not a commercial reality.”

5. Other aspects: Several other elements of the Court’s holding are significant:

(a) The Court forcefully rejected Montana’s reliance on the standard of navigability that has been applied in cases such as The Montello, which did not seek to determine whether the river in question was navigable for title purposes, but instead whether it was navigable for purposes of determining whether boats upon it could be regulated by the federal government. The primary focus in The Montello was not upon navigability in fact but upon whether the river was a “navigable water of the United States.” “The latter inquiry is doctrinally distinct. It turns upon whether the river ‘forms by itself, or by its connection with other waters, a continued highway over which commerce is, or may be, carried with other States or foreign countries in the customary modes in which such commerce is conducted by water.’”

This aspect of the opinion makes it clear that navigability for title purposes is not to be determined by the same standards that are used in different legal contexts, including the scope of admiralty jurisdiction, the constitutional limits of the federal Commerce Clause power, and the reach of statutes such as the Clean Water Act and Federal Power Act. “Indeed, ‘[e]ach application of [the Daniel Ball] test . . . is apt to uncover variations and refinements which require further elaboration.’”

(b) The Court rejected Montana’s suggestion that denying the State title to the disputed riverbeds will undermine the public trust doctrine.

(c) The Court’s opinion includes a recognition that the failure of a state to claim ownership of riverbeds for many years after statehood, and the reliance by private parties on established land titles, are relevant to the analysis of navigability for title:

As the litigation history of this case shows, Montana filed its claim for riverbed rent over a century after the first of the dams was built upon the riverbeds. Montana had not sought compensation before then, despite its full awareness of PPL’s hydroelectric projects and despite the State’s own participation in the projects’ federal licensing process. While this Court does not reach the question, it may be that by virtue of the State’s sovereignty, neither laches nor estoppel could apply in a strict sense to bar the State’s much belated claim. Still, the reliance by PPL and its predecessors in title upon the State’s long failure to assert title is some evidence to support the conclusion that the river segments were nonnavigable for purposes of the equal footing doctrine.

The Montana Supreme Court’s ruling that Montana owns and may charge for use of riverbeds across the State was based upon an infirm legal understanding of this Court’s rules of navigability for title under the equal footing doctrine. As the Court said in Brewer‐Elliott, “It is not for a State by courts or legislature, in dealing with the general subject of beds or streams, to adopt a retroactive rule for determining navigability which . . . would enlarge what actually passed to the State, at the time of her admission, under the constitutional rule of equality here invoked.” 260 U. S., at 88.

Snowpack Update

The National Resources Conservation Service May 14, 2013 Snowpack Update lists the Colorado statewide snowpack at 83% of average.  The South Platte basin has the State’s highest snowpack at 119% of average, while the Upper Rio Grande basin has the lowest snowpack at 28% of average.  Some water providers in the South Platte and Colorado River basins remain cautious despite increases in snowpack caused by spring snows, and Denver Water has continued its Stage 2 drought restrictions declared on April 1, 2013.

Concerning the Application for Water Rights of Ginn Battle South, LLC

In Concerning the Application for Water Rights of Ginn Battle South, LLC, No. 11SA169, the Colorado Supreme Court found that the Division 5 Water Court’s did not abuse its discretion when it issued corrected decrees after errors in monthly limitations were discovered in the original decrees.  The Court found that C.R.S. § 37-92-304(10) allows a petitioner to correct substantive errors as well as clerical errors so long as the conditions set forth in the statute, such as a showing of mistake, inadvertence, or excusable neglect are met.  The Colorado Supreme Court also agreed with the Water Court’s finding that the corrections to the original decree did not make the decree any less restrictive on the applicant than the limitations contained in the Original Decree such that they were consistent with decrees attached to stipulations with an opposer.  The Court’s opinion is available at http://www.cobar.org/opinions/opinion.cfm?opinionid=8807&courtid=2

 

Archuleta v. Gomez

In Archuleta v. Gomez, No. 12SA47, the Colorado Supreme Court was presented with an adverse possession dispute over legal interests in water and an easement rights associated with ditches.  The Court affirmed its previous precedent that the requirement to prove exclusive and continuous use in an irrigation right adverse possession case “necessitate both (1) intercepting water within the ditch that belongs to another person’s right, at times and in amounts the adverse possessor’s crop production requires and (2) placing the intercepted water to an actual beneficial use that results in water consumption for crop production.”  However, the Court also held that not every drop of water needs to be consumed, and that a court is to examine all relevant circumstances, including crop efficiency, in determining whether exclusive and continuous use of the irrigation water has been made.  The Court’s opinion is available at: http://www.cobar.org/opinions/opinion.cfm?opinionid=8769&courtid=2