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Both the United States Constitution and the Colorado Constitution prohibit the taking of private property for public use without just compensation, U.S. Const. Amend. V; Colo. Const. art. II, § 15. A property owner may bring an "inverse condemnation" claim when state action has the effect of substantially depriving the property owner of the use and enjoyment of the property, but the State has not formally brought condemnation proceedings. To prove an inverse condemnation claim, the property owner must establish: (1) that there has been a taking or damaging of a property interest; (2) for a public purpose without just compensation; (3) by a governmental or public entity that has the power of eminent domain but which has refused to exercise it.
The well owners own farmland and irrigation wells in Morgan County near the South Platte River. Collectively, they own thirteen decreed irrigation wells with dates of appropriation between March 1945 and December 1966. In June 2006, the well owners received cease and desist letters from Water Division No. 1 of the Office of the State Engineer. The letters noted that the wells were part of the Central Colorado Water Conservancy District Well Augmentation Subdistrict ("Central WAS") plan for augmentation in water court Case No. 03CW099. The letters informed the well owners that, pursuant to an order of the water court, "Central WAS wells may not pump until the court has entered a decreed plan for augmentation." The cease and desist orders did not prevent Central WAS wells from pumping in accordance with other approved decreed plans for augmentation or substitute water supply plans. However, based on Division of Water Resources records, the well owners' wells were not members of any other approved plan. Consequently, the Division Engineer ordered the well owners to immediately cease and desist using their wells to divert water. The well owners have complied with the orders and have neither pumped water from the wells nor irrigated the farmlands associated with the wells. Their inability to use the irrigation wells has rendered their farms and farming improvements essentially useless. In June 2007, the well owners brought an inverse condemnation complaint against the State in Morgan County District Court. The district court dismissed the complaint because it concluded that the well owners' takings claims involved water matters over which the water court had exclusive jurisdiction. The court of appeals affirmed, holding that the well owners' claims concerned the right to use water, not the ownership of water rights, and therefore were water matters within the exclusive jurisdiction of the water court. Consequently, the well owners brought this action in the water court. They again asserted that the State's action amounted to an unconstitutional taking of vested property rights in their wells, water, farmlands, and improvements, in violation of article II, section 15 of the Colorado Constitution and the Fifth and Fourteenth Amendments to the U.S. Constitution. The well owners therefore sought just compensation for the damage to their property. The water court dismissed the well owners' complaint under C.R.C.P. 12(b)(5). The court held that although the well owners owned the right to use the tributary groundwater decreed to their individual wells, this right was limited by the well owners' dates of priority: "While the Colorado Constitution protects [the well owners'] water rights and their attendant priority dates, [they] never had a right to use water outside the priority system or to cause injury to . . . other vested water rights."
Did the State’s curtailment of the well owners’ use of water in their decreed wells constitute a taking in violation of the Colorado and US Constitution?
The well owners raise two arguments to support their claims that the State's action amounts to an unconstitutional taking. First, they contend that the underground water appropriations here were made before the 1969 Water Right Determination and Administration Act ("1969 Act"), section 37-92-101 et seq., C.R.S. (2010), at a time when tributary groundwater in wells was not administered by the State. The well owners characterize these pre-1969 appropriations as akin to vested property rights in "unappropriated, nontributary groundwater" that have been taken by the State. Second, the well owners contend that the cease and desist orders amount to a regulatory taking because the State Engineer only recently acted to enforce changes in the regulatory scheme after decades of allowing the well owners to pump out of priority. Both of the well owners' contentions fail because they fundamentally misapprehend the nature and scope of the water "right" allegedly taken. Although their wells were decreed with dates of appropriation before the 1969 Act, the well owners do not own an unqualified right to use the water in the wells. Rather, the well owners' right to use the water in their decreed wells has always been subject to the constitutional prior appropriation doctrine, which prohibits the use of water to the injury of senior water rights. Here, the State's action, albeit belated, merely enforced Colorado's long-standing doctrine in order to address the injurious effects of South Platte alluvial wells pumping out of priority. In short, the well owners have no constitutionally protected property interest in the unfettered use of the water in their wells; consequently, they cannot show that the State has "taken" their property by curtailing the out-of-priority use of their wells. The water court therefore correctly dismissed the well owners' takings claims.