U.S. Water News Online
DENVER -- The Colorado Supreme Court ruled that a nearly
130-year-old contract prevents water designated for agriculture to be
converted to drinking water for new houses in fast-growing Fort
In a ruling that could affect similar cases statewide, the court
said East Ridge of Fort Collins LLC, which bought 160 acres northeast
of the city for its proposed development, had to comply with the
original 1878 water-use contracts that were attached to the land.
The ruling drew a strongly worded dissent from Justice Gregory
Hobbs, a water-law expert, who called it "shocking" and
"unconscionable" and said it could set a dangerous precedent that
denies rights to holders of such contracts.
East Ridge's contracts stemmed from a ditch dug in 1864 to
irrigate farmland from the Cache la Poudre River. The ditch's
original operators specified that the water was to be used only for
In 1878, the original operators agreed to turn over all their
shares in the ditch and its water to a larger irrigation company, and
in return they got delivery rights -- rights to receive the water,
even though they did not own it. The contract specified that the
original operators' delivery rights were senior to the new owners'
water rights, meaning that in a dry year, the owners of the delivery
rights got their water first.
East Ridge now owns the senior delivery rights, and the Larimer
and Weld Irrigation Co. owns the junior water rights.
The irrigation company sued to block East Ridge from using the
water for homes, citing the 1878 contract the said the water must be
used for irrigation.
A state Water Court judge sided with the irrigation company in an
October 2003 ruling, and the Supreme Court upheld that ruling.
In his dissent, Hobbs said it makes no sense to restrict East
Ridge, which owns the senior delivery rights, but not restrict the
irrigation company, which owns the junior rights.
"This result is shocking, unconscionable, and contrary to Colorado
law, in my view," Hobbs wrote. "While all others on the ditch are
free to realize modern-day market value of their water, the owners of
first priority are made to be last in realizing that value."
Alan Hill, an attorney who represents East Ridge, said there are
many similar water-delivery contracts around the state that could be
affected by the ruling, but noted the language in each contract is
He said East Ridge is still planning the development, and the
ruling means the company will have to look elsewhere for water to
supply a treatment plant to help meet additional demand from the
"Particularly with Colorado having all the water issues they have
now, we thought it was appropriate that the policy be maximum
utilization of water -- and it is -- and this water won't be used the
best way it could be used for this property based on this decision,"
If East Ridge builds the development, water it would have
converted to municipal use would be allocated among other irrigation
company shareholders, company attorney Tim Dow said.
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