In the Matter of Water Rights

In the Matter of Water Rights, 361 P.3d 392 (Colo. 2015) (holding that: (i) the Colorado Ground Water Commission had jurisdiction to make the initial determination of whether the water at issue was designated ground water; and (ii) a portion of the storm runoff water at issue was “designated ground water” under the Groundwater Management Act, rather than surface water).

The Colorado Ground Water Commission (“Commission”) held hearings in 1967 and 1968 in order to resolve the proper designation of a ground water basin in the Upper Black Squirrel Creek Basin (“Basin”). It found that “‘virtually all’ of the water in the basin was underground water, and water flowed on the surface only ‘during and immediately following’ periods of heavy rainfall from summer storms.” The water was also not adjacent to a continuously flowing natural stream and would never reach a tributary system. As such, the Commission determined that the Basin qualified as a designated ground water basin, and entered its findings in a final order (the “1968 Order”).

The Meridian Service Metropolitan District (“Meridian”) proposed a development in the Basin area. Its development would result in an increase in surface water runoff due to the creation of impermeable surfaces. In 2011, Meridian filed an application for such surface water rights in the District Court for Water Division No. 2 (“Water Court”). In its application, Meridian sought conditional rights to divert and store runoff water from an unspecified Upper Black Squirrel Creek tributary. Opposers challenged the Water Court’s jurisdiction to hear the matter because while Meridian characterized the water in its application as “storm run-off,” the water directly recharges the Basin and is therefore designated ground water subject to the Commission’s administration. The Water Court agreed that Meridian’s application presented a jurisdictional question, and the Water Court and stayed its proceedings while Meridian initiated a case before the Commission.

A hearing officer for the Commission concluded that the water Meridian sought to appropriate was designated ground water and not surface water. The hearing officer reasoned that, except for Meridian’s development of impermeable surfaces, falling precipitation in the Basin would either recharge the aquifer, evaporate, or hydrate plants. The Commission affirmed the hearing officer’s conclusion, and Meridian appealed to the El Paso County District Court (“District Court”). The District Court agreed with the Commission and concluded that naturally falling precipitation would not reach a tributary system, and as such, the surface streams are “‘only streams because they are man-made.’” Therefore, the District Court denied Meridian’s application for surface water rights.

On appeal, Meridian made four arguments before the Supreme Court of Colorado (“Court”). It argued: (i) the Commission did not have subject matter jurisdiction to hear the case; (ii) the Commission improperly classified the storm runoff as designated groundwater water; (iii) claim preclusion barred the Commission from finding that a portion of water was designated ground water; and (iv) public policy concerns weighed in its favor.

The Court first addressed Meridian’s jurisdictional-based argument in which Meridian argued that the Water Court, not the Commission, had jurisdiction over the case because the issues involved conditional rights and surface water. In support of this argument, Meridian referenced The Water Right Determination and Administration Act of 1969 (“1969 Act”), which grants water courts jurisdiction over “water matters” in the state. The 1969 Act, however, “applies only to the administration of surface and underground water that is in or tributary to natural streams.” In contrast, The Colorado Groundwater Management Act (“Management Act”) grants the Commission jurisdiction over designated ground water issues. More importantly, in the case of a jurisdictional conflict between the deciding bodies, jurisdiction vests with the Commission to initially determine if designated ground water was at issue. The water court only obtains jurisdiction if the Commission concludes that the contested water is not designated ground water. Accordingly, because this case involved a jurisdictional issue, the Court rejected Meridian’s argument and found that the Commission had jurisdiction to make an initial determination.

Next, the Court turned to the issue of classification. Meridian contended that the District Court erred by finding that the water at issue was designated ground water, and not surface water. In making a determination, the Court first looked at the Management Act, which defines “designated ground water” as “ground water which in its natural course would not be available to and required for the fulfillment of decreed surface rights.” The Management Act also defines “ground water” as “any water not visible on the surface of the ground under natural conditions.” Considering these definitions and the record, the Court upheld the District Court’s finding that the water Meridian sought to divert was not simply surface water. The Court found ample support in the record to conclude that a portion of the water Meridian sought to appropriate was the result of man-made impermeable surfaces and did not occur naturally, except during heavy rain events. The Court also rejected Meridian’s definitional arguments based on case law because the facts of the cases were too dissimilar.

The Court then turned to Meridian’s argument that claim preclusion prevented the Commission from finding that a portion of the water at issue was designated ground water. Meridian contended that claim preclusion occurred because the Commission stated in its 1968 Order that only water in the Basin was designated ground water. The Court found that claim preclusion did not apply because the earlier and present proceedings did not involve identical claims for relief. Additionally, the runoff water at issue in this case, created in part by Meridian’s development, could not have been a part of a lawsuit in 1968.

Finally, the Court addressed Meridian’s public policy argument and held that the District Court’s reasoning, and not Meridian’s, was consistent with public policy for three reasons. First, the Court reasoned that allowing people to own a previously untapped water supply, resulting from development that replaced natural land conditions, would be contrary to public policy. Second, the Court found that it could not condone Meridian’s application because doing so would result in a type of unprecedented “‘super decree’” that would allow Meridian access to the water “free from both the call of the Arkansas River and the Commission’s oversight.” Third, even though only four percent of precipitation recharges the aquifer, the Court found that granting Meridian’s application would have resulted in an overall reduced rate of recharge, which would harm senior designated ground water users.

Accordingly, the Court affirmed the District Court’s holding on all four issues.

The featured image is of the Adur Flood Plain in the United Kingdom.  Bob Embleton holds the copyright to this image and its use is not his endorsement of the Water Law Review.