Frees v. Tidd: Claiming the Benefit of the Bargain?

A recent water law ruling from the Colorado Supreme Court, Frees v. Tidd, 349 P.3d 259 (Colo. 2015), has raised eyebrows throughout the water bar about whether the decision condones the practice of a junior appropriator making a first use of the same physical supply of a senior water right.  Such a practice could turn the prior appropriation system on its head by, as argued by some commenters, no longer ascribing water diverted to the water right owner only.  In the worst case scenario, senior water rights could risk losing some aspect of control over their supply because it must first pass through another junior non-consumptive use – like the hydropower plant at issue in the Frees v. Tidd case.   However, I have a different take.  The Frees decision represents the enshrining of a benefit of the bargain made by the creators of the prior appropriation doctrine when Colorado was still a territory of the U.S.  

The major difference between the prior appropriation doctrine, founded first in California and then in Colorado, and the riparian doctrine from east of the 100th meridian is that appropriators in the arid west need not own land next to a waterway to own a water right.  Appropriators instead were allowed to carry water via ditches across the lands of others to lands that were susceptible to irrigation.   The easement rights of historic ditches in Colorado are second perhaps only to that of the railroads.  Those with water rights who constructed ditches across lands earned the right to do so through condemnation, operation of law, and federal and state statutes.

But Colorado also enshrined a basic right for those whose lands are burdened by a ditch.  The deal struck in Colorado statute was that a property should not be burdened by the more than one ditch.   And if one whose property is crossed by a ditch can appropriate water through that ditch, or if they help to construct a ditch than can do that, then Colorado law says that is necessary to promote the maximum utilization of waters of the state, one of the fundamental tenets of Colorado water law.

C.R.S. §37-86-105 provides that “[n]o tract or parcel of improved or occupied land ... shall be subjected to the burden of two or more ditches ... when the same object can feasibly and practicably be attained by uniting and conveying all the water necessary to be conveyed through such property through one ditch or other structure.” Further, a particular means or point of diversion of a water right may also serve as a point or means of diversion for another water right.  C.R.S. §37-92-305(2).   These statutes and related case law stand for the proposition that ditch owners cannot exclude the owners of the properties burdened by their ditch from using that ditch for their own purposes if it’s feasible to do so.

The Frees Court faced the facts of a ditch owner in the San Luis Valley with an 1890 appropriation for irrigation from a little creek known as Garner Creek – via the Garner Creek Ditch No. 1.   The Ditch No. 1 has the right to take the entire flow of Garner Creek, and the Ditch No. 1 passes across the Tidd’s land on the way to the Frees’ land where it is used for irrigation.   The Tidd’s claimed a new water right on Garner Creek, via the same Ditch No. 1.  This junior water right was to divert water for hydropower generation from the Ditch No. 1 and then return such water to the Ditch No. 1 and onto the Frees’ land.  The water used for hydropower would not be consumed, but passed on in full back to the Ditch No. 1

In Frees v. Tidd, the Colorado Supreme Court upheld the right of a property owner burdened by an irrigation ditch to make an appropriation from the respective creek, divert it through that ditch, and then take their water right out of the ditch, even though the property owner was not a ditch owner and the ditch owner did not want this to happen!  Further, in this case there were complicating factors: an over-appropriated stream meant there was little chance the new water right would ever be able to divert and the junior water right on its own could not divert sufficient water to affect its proposed hydroelectric appropriation.  These factors led to complications upon which the dissent capitalized.  However, in my opinion, this decision has its place firmly within the history of Colorado water law.

The Court held that the Applicant (the Tidd’s) had the right to make their junior appropriation via the Ditch No. 1, even with the complicating factor that their junior water right would almost never be in priority, so in effect they would be appropriating the senior water right of the Frees before delivering that right to the Frees without consuming any of it.  The Court posed the question as follows:

May the land owner whose property is burdened by an easement across his or her property for a water ditch obtain a junior conditional water right at the headgate of that ditch for non-consumptive hydropower use of water that the neighbor is diverting from the stream under a senior water right for irrigation use through that headgate?

The key piece of this question, which was answered in the affirmative, is that the premise is that the new, junior, appropriator must be the land owner whose property is burdened by the ditch in question.  Without that premise, there is no issue for the court to decide as it did, for the reasons the dissent cites.  The Court said that the Frees’ irrigation use did not preclude the Tidd’s non-consumptive hydropower use because the Frees did not have such an appropriation type and there were terms and conditions in the decree to protect the Frees’ amount and timing of water deliveries.  This non-injury standard is usually reserved for augmentation plans and not direct flow water rights.  But in Frees the non-injury standard actually related to the ditch easement more than the water right.  Under Roaring Fork Club, L.P. v. St. Jude’s Co., 36 P.3d 1229 (Colo. 2001), that upheld the right of a ditch company to not have its easement altered without its consent or a court decree.  If a court is called upon to decide such a ditch easement dispute, it must find that there will be no damage to the easement rights of the ditch.

There may be some confusion to this decision, as expressed by the dissent.  The dissent viewed the decision in favor of maximum utilization as potentially “trampling” the more fundamental prior appropriation tenets that a water right, once diverted and appropriated, is the property of the appropriator.   The precedent could affect the rights of the senior appropriator negatively, the dissent noted, based on the new appropriator’s rights.  The dissent also addressed the question of whether water is available for appropriation as being missed by the majority.

However, the reason why the dissent argument fails is the factual context of the appropriation.  Were it not a landowner burdened by the Garner Creek No. 1 Ditch, there would not have been this discussion.  A condition precedent to the case, and to the majority’s opinion, was that the landowners had the right to use this ditch if the water rights could be “united and conveyed.”  After that, the question did turn to the nature of the appropriation, but the threshold was whether this landowner could claim the benefit of the bargain of the earliest American settlers.  That deal was this:  a ditch can cross your ground now and you cannot stop that, but if you have a water use that can successfully leverage this ditch in the future, Colorado will allow that to happen.