Wolfe v. Sedalia Oral Arguments Wrap-Up

Background

In 1883, the Colorado water court first decreed the diversion from the West Plum creek in northeastern Colorado. An alternate diversion point was later decreed primarily for irrigation purposes from the Stephen Sump No. 1. In 1986, the Colorado water court held that Owens Brothers Concrete Co. (“Owens Concrete”) had a 27.1% interest in the combined Ball Ditch/Stephen Sump No. 1 Water Right (“water right”) for irrigation of 8.1 acres. The determined average historical consumptive use was 13 acre-feet of water per year. In addition, the court held that the purposes of use extended to municipal, industrial, commercial, and augmentation in addition to irrigation. Finally, the court approved Owens Concrete’s augmentation plan for depletions from an undeveloped well. However, the proposed well drill site ultimately provided less than the anticipated capacity for withdrawal of groundwater and Owens Concrete left the augmentation plan unused for approximately 40 years.

Sedalia Water and Sanitation District (“Sedalia”) later acquired the water right from Owens Concrete. Sedalia, a water provider to municipal and industrial customers, now seeks to utilize the Owens Concrete augmentation plan to replace out-of-priority depletions from its well pumping elsewhere. However, the Sedalia wells are located along a different section of Plum Creek from where the original augmentation plan anticipated a well.

Presently, Opposer-Appellants, the Colorado State and Division Engineers (“Engineers”), argue that Sedalia’s water right must be re-quantified to include over 40 years of non-use. They also argue that the junior appropriators using the same water supply have come to rely on the amounts available due to period of non-use. As a result, they contend that Sedalia’s impending use will severely disadvantage them.

Sedalia contends that the current case cannot be heard because this issue was already decided in a previous dispute. However, absent this bar on rehearing this issue, Sedalia contends that the non-use period of the water right should not bear on the current provisions of the water right.

The Colorado water court recently held that this case met all four issue preclusion factors set out in In re Water Rights of Elk Dance Colorado, LLC. See 139 P.3d 660, 667 (Colo. 2006). Accordingly, issue preclusion prevents the rehearing of this dispute as it relates to re-quantification of Sedalia’s water right because it has already been heard and decided. Moreover, the court held that the issue of non-use was not a proper inquiry in the scope of re-quantification. Instead, the court stated that the inquiry was relevant in the scope of abandonment.

Accordingly, the parties were instructed that the issue could be raised in the proper scope in oral arguments before the Colorado Supreme Court. Order Re: Sedalia’s Motion for Summary Judgment and the State and Division Engineers’ Cross Motion for Summary Judgment, Case No. 2010CW261.

Oral Arguments

In arguments before the Colorado Supreme Court, Engineers contended that Sedalia’s period of non-use warrants re-quantification of its historical consumptive use and that it is proper to include the 40-years of non-use in doing so. Failing to do so, the Engineers argued, would undermine the general policy goals of water rights — that is, promoting beneficial use of water under a water right.

Engineers contended that undermining this policy goal in two different, but similar situations would subject water rights holders to disparate treatments in which the full historical consumptive use is not utilized: instances of 1) some use and of 2) non-use. First, when a water right holder fails to use the full amount of its water right but does use some — no matter the amount — engineers argued the result would be a re-quantification of the historical consumptive use. Second, when a water right holder fails to utilize the water right entirely for a period of time, the result would be abandonment. The burden of proving abandonment, the Engineers noted, is necessarily a much higher bar requiring 1) proof of intent to abandon and 2) abandonment. Because this burden of proof is significantly more difficult to satisfy, according to Engineers, the full failure to use a water right would amount to a “free pass.” Ultimately this provides disincentives for putting the water right to any beneficial use.

In contrast, Sedalia contended that the 40 year period of non-use was not, in fact, non-use in light of the fact that the water was designated to fulfill an augmentation plan, which uses the water only on an as-needed basis. Sedalia argued that, during this 40-year period, the water was simply not needed. Accordingly, the water was still in use under the augmentation plan as it could have been drawn from at any moment, though circumstances never required doing so.

Regarding the concern raised by Engineers of junior water appropriators who have come to rely on the amount of water available through the 40-year non-use period, Sedalia emphasized the fact that this is the very nature of having ownership of a junior appropriation. The amount of water available to a junior appropriator is subject to the use or non-use of senior appropriators. Accordingly, to avoid a converse undermining of general water rights policy goals, Sedalia contended that the junior appropriators’ reliance on the additional water resulting from its non-use is not a sufficient justification for re-quantification.

At the close of arguments, the Court signaled that it would take both arguments into consideration and issue a ruling in accordance shortly.

 

The title image features West Plum Creek in Northeastern Colorado and is made available under the Creative Commons CCo 1.0 Universal Public Domain Dedication.

 

Comments:

  1. To clarify the above post, the period of nonuse to be considered in this case is 24 years, not 40. The 83CW364 decree, issued Dec. 1986, quantified the matured consumptive use value of the water right. Economic and other reasons prohibited the new owner (Owens) from using the water for some years and was finally able to market and sell the water right to Sedalia. Sedalia filed for a change of the same water right in 2010.

    2010 – 1986 = 24 years

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