A water right in Colorado is a right to use water, not a requirement. The old adage “use it or lose it” isn’t entirely accurate: a water right can only be lost through nonuse if the nonuse evidences (and proves) intent to abandon the water right. Or at least that’s what we all thought.

There are several pending court cases in which the Colorado State Engineer is asserting, essentially, that any periods of voluntary nonuse can be used to automatically reduce the amount of water the water right entitles its owner to. For example, if the water right historically yielded 10 acre-feet, and the water right was not exercised for a number of years, the limit on the water right can be reduce to, say, 9 acre-feet.

One troubling aspect of this, among many, is that water providers across the State acquire water rights in anticipation of future demands. The water rights that are acquired may not be used for some period of time until growth in demand requires their use. Under the State Engineer’s interpretation of the law, if the water provider does not immediately proceed to court to change the water right following acquisition, the water right will slowly erode over time, yield less, and, thus, require the water provider to go out and acquire more water rights to compensate (think, more “buy and dry”).

The leading cases working though courts include the following:

  • 14SA12 (Application of Sedalia Water and Sanitation District) – This case is currently on appeal to the Colorado Supreme Court, the issue being whether periods of nonuse under a change decree should be counted as “zeros” in a subsequent change case. Briefing in the case will be completed on or around June 20th, 2014. Oral argument will probably be later this fall with a decision before next Spring. Notably, nearly 20 parties filed amicus briefs in support of the applicant in this case.
  • 06CW040 (Application of Colorado Water Network) – This case is currently on appeal to the Colorado Supreme Court. This case is similar to the Sedalia case, but (essentially) addresses the issues in the context of a previous ditch-wide change case. Briefing will commence in this case in a couple months.
  • 09CW142 (Application of Busk-Ivanhoe) – Recent Water Court decision out of Water Division 2 in the same vein of the Sedalia and CWN cases. This may be appealed to the Colorado Supreme Court on the issue of whether undecreed use should be counted as “zeros” to reduce the future yield of the water right.
  • 12CW303 (Application of the City of Black Hawk) – Trial in this case was scheduled to commence on June 30th, 2014. Due to a recent decision from the water court, the trial may be vacated, and the case will essentially go into a holding pattern pending resolution of the issues in the above case.

Those are just the cases that are teed up for decision in the near future. As far as we can tell, the State Engineer is taking consistent positions in all pending change cases. To be clear, this is only coming up in the context of applications for changes of water rights, but the effects apply to all water rights in the State because all water rights may be transferred and the decreed use changed at some point in the future. I would also note that the State Engineer is suggesting some exceptions to this rule, for example, for “calamities” such as nonuse due to flooding, but those circumstances are not at issue in these cases and, therefore, will not be decided upon, leaving some uncertainty for the unfortunate water users that have had significant issues due to the recent flooding.

These issues are significant, and go to the very heart of what a “water right” is under Colorado law. The Sedalia case should give us some pretty good guidance on the law in the next six months or so, though we expect these issues to continue to percolate for the next year or two until the dust settles.

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