White Jankowski Lawyers

Colorado Supreme Court issues opinion in Gallegos II

July 27, 2017

Gallegos sought to de-designate a portion of the Upper Crow Creek Designated Ground Water Basin (Basin) and redraw the Basin boundaries to exclude 25 wells, with the hope that the State Engineer would be able to curtail these junior groundwater rights in favor of Gallegos’ senior surface water rights on Crow Creek.  Gallegos Family Properties, LLC v. Colo. Groundwater Comm’n, 2017 CO 73 (June 19, 2017).

In 1983, after surface use and pumping increased in Colorado and Wyoming, water users “turned from increasingly unreliable surface rights to pumping from the aquifers underlying Crow Creek.”  Id. at 7.  In response, a group that included Gallegos’ predecessor in interest petitioned the Colorado Groundwater Commission (Commission) to designate the Basin.  Id.  In 1987, the Commission designated the Basin, and no party appealed.  Id. at 8.

In 1999, Gallegos purchased the water rights and leased them out “until 2002, when the tenant farmer’s alfalfa crop failed because insufficient surface flows precluded irrigation.”  Id.  “Gallegos petitioned the State Engineer to curtail the Well Owners’ pumping, claiming [injury].”  Id.  “[T]he State Engineer denied the request for lack of jurisdiction over designated groundwater basins,” and Gallegos ultimately appealed to the Colorado Supreme Court.  Id. at 8-9 For a detailed history of this litigation see: Gallegos v. Colo. Ground Water Comm’n (“Gallegos I”), 147 P.3d 20 (Colo. 2006).  The Colorado Supreme Court remanded the case to determine whether Gallegos could present new evidence to the Commission establishing connectivity and injury.  Id. at 9.

On remand, the hearing officer determined that Gallegos had failed to meet its burden of producing new evidence and therefore denied its petition.  Id. at 10.  Gallegos appealed the hearing officer’s determination, but the groundwater court affirmed the conclusion that Gallegos had failed to present new evidence or to prove injury.  Id. at 12.  The court also awarded costs to the Well Owners.  Id. at 13. Gallegos appealed to the Colorado Supreme Court.  Id.

On appeal, the Colorado Supreme Court declined to assess whether Gallegos suffered injury, focusing only on whether Gallegos proved by evidence not before the 1987 Commission that the factual data justified de-designating a portion of the Basin.  Id. at 13-14.  The Court concluded that Gallegos failed to meet this burden and that the “groundwater court did not abuse its discretion” in awarding costs to Well Owners. Id. at 14.

Regarding connectivity, the parties did “not dispute that groundwater in the Basin is connected to the surface water that would feed the Larson rights.”  Id. at 17.  Rather, the dispute hinged on “whether Gallegos proved by new evidence not before the 1987 Commission that future conditions and factual data justify de-designating a portion of the Basin because the Basin waters are connected to the waters that feed Gallegos’s surface water rights.”  Id.  Gallegos submitted written evidence and expert testimony alleging that the alluvium is connected to the surface flows of Crow Creek; however, the Colorado Supreme Court determined such showings to be inadequate, “because they do not consist of evidence of conditions newly discovered or occurring after the original basin designation date sufficient to justify the modification of a basin boundary.”  Id. at 21.  The Court noted that “Gallegos has merely shown that the groundwater and Crow Creek were connected when the Basin was designated and are still connected today,” but such evidence “does not constitute a showing of either a condition arising since 1987 or a condition newly discovered since 1987,” as required by the statute.  Id.  Accordingly, the Court held that claim preclusion applied because connectivity could have been litigated in the designation proceedings.  Id. at 22.

Moreover, the Colorado Supreme Court held that the designated groundwater court did not abuse its discretion in awarding costs to Well Owners.  Id. at 24.  The Court noted “that Gallegos failed to raise a timely objection to the designated groundwater court’s decision to award costs.”  Id.  The Court concluded that Well Owners were the prevailing parties, and that they were necessary parties to the litigation, despite not being named as defendants by Gallegos in the initial complaint.  Id. at 27.  The Court further concluded that Well Owners’ costs were reasonable and necessary for the litigation.  Id.  Thus, the Court upheld the groundwater court’s award of costs.  Id. at 28.

This case reaffirms the strict requirements to justify de-designation of a groundwater basin.  In order to support such de-designation, a party must establish through new evidence that water conditions have changed since the original designation and that the change has caused injury.  Parties should be prepared to present to the court new evidence of changed conditions since the designation in order to prevail.

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