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.