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October 4, 2023  |  Written by Ryan J. Mitchell

You Have a Water Right, but You're Far from the River...

In conjunction with America’s early westward expansion and the development of the prior appropriation doctrine, Western states developed specific private rights of condemnation for water conveyance structures (also known as private ways of necessity). Even if a property is not adjacent to a source of water, the owner may obtain a right-of-way across intervening lands to convey water to the property. Colorado provides a good example of a private right of condemnation, which is enshrined in article XVI, section 7 (Section 7), of the Colorado Constitution:

    • All persons and corporations shall have the right-of-way across public, private and corporate lands for the construction of ditches, canals and flumes for the purpose of conveying water for domestic purposes, for the irrigation of agricultural lands, and for mining and manufacturing purposes, and for drainage, upon payment of just compensation.

Through procedures developed to implement Section 7, farmers, cities, industry, and other developers have made otherwise dry land economically productive with water rights transported through miles of condemned rights-of-way.

However, Section 7 is not without limitations. For example, a condemned right-of-way must be the shortest and most direct route practicable. Moreover, where a property is already burdened by a condemned right-of-way, subsequent rights-of-way cannot be condemned if use of the existing right-of-way is a feasible alternative. Most recently, in CAW Equities, L.L.C. v. City of Greenwood Vill., 2018 COA 42M, 425 P.3d 1197 (CAW Equities), a Colorado court of appeals found that Section 7 is limited when the proposed servient land has a prior public use.

The new Section 7 limitation reflects the transition from an era where economic growth and natural resource development were considered critical public goods and an era where recreation and conservation take priority. The CAW Equities court answered whether CAW could condemn a city-owned public trail and construct in its place a ditch to the southern end of its property. For the first time, a court applied the “prior public use” doctrine to Section 7. Previously, the doctrine was limited to municipalities’ home rule authority under Colorado Constitution article XX, section 1, and the private right to condemn lands for storage structures under Colorado Constitution article II, section 14. Now, too, a Section 7 condemnation cannot extinguish an existing public use. Further, the court held that Section 7 is subject to reasonable legislative regulations that do not unnecessarily limit or curtail the constitutional right. Accordingly, CAW Equities may present potential condemners with a sense of urgency as courts and legislatures may restrain and limit private rights of condemnation, including those for water conveyance structures. Similarly, entities may begin to raise the “prior public use” doctrine in more aggressive ways when defending against a condemnation proceeding.

Illustration of a Condemnation Proceeding in Colorado – CAW Equities

Section 7 is implemented and controlled by statute. When a landowner refuses to grant a right-of-way, the condemner may initiate condemnation proceedings under Colorado’s eminent domain statute. Colo. Rev. Stat. § 37-86-104(1). The key questions under the eminent domain statute are whether: (1) the proper procedures were followed; (2) the condemner is authorized to condemn the property pursuant to statute; and (3) the condemned property is necessary for public use. Colo. Rev. Stat. §§ 38-1-102(1), 37-86-103; see also Forest View Co. v. Town of Monument, 2020 CO 52, *P28, 464 P.3d 774, 780-81. While the CAW Equities court ultimately dismissed CAW’s condemnation action, the case provides a helpful illustration of what can go wrong in a condemnation proceeding.

CAW sought to irrigate its western tract with a water right in the Highline Canal, which was several miles away. CAW asserted that the only practicable way to convey water to the western tract was over a city-owned public trail. CAW gave the City a written offer to purchase the public trail for $85,300, and the City counteroffered with several alternatives. Negotiations ultimately failed, and CAW proceeded with a private right of condemnation.

However, CAW erred in several ways. First, at least 30 days prior to petitioning for condemnation CAW was required to provide a Notice of Intent to any interest holder of record declaring CAW’s intention to condemn a right-of-way. Colo. Rev. Stat. § 38-1-121(1). Second, after providing the Notice of Intent, CAW and the City were required to assess and negotiate the fair market value of a right-of-way, during which CAW was required to provide a written, good faith offer. Colo. Rev. Stat. § 38-1-121(1), (2), (6). If the two parties failed to agree on a fair price, CAW could have requested an Immediate Possession Hearing, where a court will hear the condemnation action, much like a trial. Colo. Rev. Stat. § 38-1-102. But CAW failed to follow these procedures, and instead went straight to requesting an Immediate Possession Hearing.

Further, and as discussed above, the court found that CAW did not have authority to condemn property where a public use already existed. Similarly, the court was skeptical of whether it was necessary for CAW to condemn the proposed right-of-way; the City’s expert provided substantial evidence that alternative routes were viable and efficient. Thus, CAW Equities suggested that any potential condemner needs to provide compelling evidence that the proposed property is the most efficient and cost-effective route for the conveyance structure.

Colorado’s statutory condemnation procedure is unique, and in a different state CAW would likely have had to follow different steps to seek condemnation. But no matter what state you are in, private or public condemnation proceedings can quickly become mired in legal issues related to authority and valuation. Having the right counsel to parse out the various considerations is imperative to nailing down a favorable outcome. At Somach Simmons & Dunn, our team is prepared to help you smoothly navigate such water right proceedings and protect your rights.

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