Colorado Supreme Court Issues Important Water Rights Opinion in Wolfe v. Sedalia Water & Sanitation District.

The Colorado Supreme Court has now determined the standard for quantifying water rights that have already changed from one use to another in a prior case. This is an issue that has been very unclear for some time, and many water users have been uncertain about how this issue would be addressed, until now.

In this case, the Court considered an appeal from an application to change the use of a water right that had originally been decreed for irrigation purposes, with an 1872 priority date. In 1986, the owner of the water right had obtained a water court decree, changing the use of the water right from irrigation uses to replacement purposes for an augmentation plan. In the 1986 case, the water right was quantified with an annual average of 13 acre feet per year for augmentation purposes, based on the long-standing principle that water rights will be limited to their historical beneficial use amount when they are changed to new uses.

The new owner of the water right, a water and sanitation district, acquired this water right, and sought to change it again, from augmentation purposes to municipal purposes. The central issue in the case was whether the applicant was entitled to rely on the previous quantification of the water right from 1986, or whether the court would need to consider the use of the water right since the last quantification and re-quantify the water right based on average historical use, including those years. This would have been a real problem for the applicant, because the water right had not been used at all since it was originally changed to a new use in 1986. Thus, if the water right needed to be requantified again based on a historical use study including those years, the yield of the water right likely would have been reduced substantially.

The Colorado Supreme Court ruled that the doctrine of “issue preclusion” (also known as collateral estoppel) will prevent relitigation of the historical beneficial use of previously changed water rights in many cases. However, in a subsequent change of water rights case, the court should take into evidence any periods of nonuse of the water right since the previous change case. If the water court determines that there has been “prolonged and unjustified nonuse” of the water right, since it was changed the last time, then this will be a legal basis to determine that “changed circumstances” have occurred. In that event, the water court should consider the nonuse of the water right since the last change decree, and requantify the water right based on a new historical use analysis.

While this decision provides some guidance to those seeking to change their water rights that may have been changed once before, it still leaves open some uncertainty. Subsequent cases will need to address what qualifies as “prolonged and unjustified nonuse” of a water right, thereby triggering a new historical use analysis. Also, a bill is currently pending in the Colorado Senate, SB 15-183, which would remove the “prolonged and unjustified nonuse” exception. If this bill passes, then prior quantifications of changed water rights will be preclusive, regardless of whether the water rights have been used since the first quantification. The bill does not address abandonment of water rights due to non-use, however. Therefore, water rights that have been previously changed but not used for an unreasonable length of time since then may still be susceptible to claims that they have been abandoned and are therefore no longer valid.