Chapter 5--Prior Appropriation
A. Roots and Evolution

State of Colorado, Department of Natural Resources, Division of Water Resources, State

Engineer, et al. v. Southwestern Colorado Water Conservation District, et al.

Supreme Court of Colorado, En Banc.

671 P.2d 1294 (1983).

Lohr, Justice.

This is an appeal from the judgment of the special water judge appointed by this court to decide questions of law common to numerous applications for determinations of conditional water rights in nontributary ground water outside the boundaries of designated ground water basins in all seven water divisions in the State of Colorado. We affirm in part, reverse in part, and remand the cases to the respective divisions in which they were filed, with directions.

* * *

1. Federal/State/Private Landowner Relationships

Colorado and the other western states derive their authority to develop a system of water law from the federal government, which once owned substantially all lands now within the boundaries of those states. In the latter half of the nineteenth century, the United States Congress enacted various public land laws for the purpose of encouraging settlement of the western frontier. These laws took many forms, but their common objective was to promote development of the agricultural and mineral resources of the west by granting public domain lands to those who should discover valuable minerals and to others who should settle the vast new country. Encouraged by these inducements, miners and other pioneers occupied parts of the arid lands west of the hundredth meridian of longitude before the formulation of federal law or policy concerning rights in water. Many of the mines and farms were remote from natural streams, and "the settlers in this new land quickly realized that the riparian doctrine of water rights that had served well in the humid *1305 regions of the East would not work in the arid lands of the West." California v. United States, 438 U.S. 645, 653, 98 S.Ct. 2985, 2990, 57 L.Ed.2d 1018 (1978); see generally California Oregon Power Co. v. Beaver Portland Cement Co., 295 U.S. 142, 55 S.Ct. 725, 79 L.Ed. 1356 (1935) (cited herein as California Oregon Power Co.); United States v. City and County of Denver, 656 P.2d 1 (Colo.1982); Coffin v. Left Hand Ditch Co., 6 Colo. 443 (1882). Spurred by the need to obtain water for domestic, irrigation and mining uses, the settlers did not await federal leadership, but instead developed their own laws, customs and judicial decisions recognizing priority of appropriation, linked to beneficial use of the water, as the basis for obtaining rights to this vital resource. See California v. United States, supra; California Oregon Power Co.; Jennison v. Kirk, 98 U.S. 453, 25 L.Ed. 240 (1879); United States v. City and County of Denver, supra; Coffin v. Left Hand Ditch Co., supra.

Prior to the enactment of the first mining laws in 1866, the federal government by silent acquiescence approved the rule--evidenced by local legislation, judicial decisions, and customary law and usage--"that the acquisition of water by prior appropriation for a beneficial use was entitled to protection...." California Oregon Power Co., 295 U.S. at 154, 55 S.Ct. at 727; see Broder v. Natoma Water and Mining Co., 101 U.S. 274, 25 L.Ed. 790 (1879); Basey v. Gallagher, 87 U.S. 670, 20 Wall. 670, 22 L.Ed. 452 (1875); Atchison v. Peterson, 87 U.S. 507, 20 Wall. 507, 22 L.Ed. 414 (1874); United States v. City and County of Denver, supra. Then, in a series of acts providing for disposition of parts of the public domain, Congress accorded formal recognition to water rights acquired through local laws and customs and "rejected the alternative of a general federal water law." United States v. City and County of Denver, supra, 656 P.2d at 7; see Act of July 26, 1866, ch. 262, § 9, 14 Stat. 251, 253 (codified at 30 U.S.C. § 51 (1976)); Act of July 9, 1870, ch. 235, § 17, 16 Stat. 217, 218 (codified at 30 U.S.C. § 52 (1976)); Desert Land Act of March 3, 1877, ch. 107, 19 Stat. 377 (codified as amended at 43 U.S.C. §§ 321 to 329 (1976)); Jennison v. Kirk, supra.

The 1866 and 1870 Acts were not limited to confirmation of appropriative water rights acquired prior to 1866, but "[t]hey reach into the future as well, and approve and confirm the policy of appropriation for a beneficial use, as recognized by local rules and customs, and the legislation and judicial decisions of the arid-land states, as the test and measure of private rights in and to the non-navigable waters on the public domain." California Oregon Power Co., 295 U.S. at 155, 55 S.Ct. at 728. The Desert Land Act of 1877 made the application of the policy to future appropriations even more explicit. California Oregon Power Co., 295 U.S. at 155-156, 55 S.Ct. at 728. In construing the Desert Land Act of 1877 long after it had been implemented by the patenting of large areas of federal lands, the United States Supreme Court noted that "[a]s the owner of the public domain, the government possessed the power to dispose of land and water thereon together, or to dispose of them separately" and held that "[t]he fair construction of the provision [of the Desert Land Act of 1877] now under review is that Congress intended to establish the rule that for the future the land should be patented separately; and that all non-navigable waters thereon should be reserved for the use of the public under the laws of the states and territories named." California Oregon Power Co., 295 U.S. at 162, 55 S.Ct. at 731. Accord, Ickes v. Fox, 300 U.S. 82, 57 S.Ct. 412, 81 L.Ed. 525 (1937). This rule extends to lands patented under the homestead and preemption laws as well as those disposed of under the Desert Land Act of 1877. California Oregon Power Co. Recently, the United States Supreme Court, in rejecting a claim that ground water is a "valuable mineral" locatable under the mining laws, again expressly recognized that the United States Congress established a "passive" water rights policy in the mining laws of 1866, 1870, and 1872 and by that legislation three times affirmed "the view that private water rights on federal lands were to be governed by state and local law and custom." Andrus v. Charlestone Stone Products Co., 436 U.S. 604, 614, 98 S.Ct. 2002, 2008, 56 L.Ed.2d 570 (1978). Moreover, in California v. United States, supra, the United States Supreme Court noted that through the history of the relationship between the federal government and the states in the reclamation of the arid lands of the western states "runs the consistent thread of purposeful and continued deference to state water law by Congress." 438 U.S. at 653, 98 S.Ct. at 2990.

Additional congressional recognition of state law as the source of rights to obtain and use water is to be found in the legislative history of the adoption of the McCarran Amendment. In 1952 Congress enacted that amendment, codified at 43 U.S.C. § 666 (1976), providing for the joinder of the United States in judicial proceedings for adjudication or administration of water rights under state law. The Senate Report on the McCarran Amendment recognizes that "[i]n the arid Western States, for more than 80 years, the law has been that the water above and beneath the surface of the ground belongs to the public, and the right to the use thereof is to be acquired from the State in which it is found, which State is vested with the primary control thereof." S.Rep. No. 755, 82d Cong., 1st Sess. 3, 6 (1951).

The United States Supreme Court, in California Oregon Power Co., made clear that each state affected by that decision is free to adopt such system for acquisition of water rights as it considers best:

Nothing we have said is meant to suggest that the [Desert Land Act of 1877], as we construe it, has the effect of curtailing the power of the states affected to legislate in respect of waters and water rights as they deem wise in the public interest. What we hold is that following the act of 1877, if not before, all non-navigable waters then a part of the public domain became publici juris, subject to the plenary control of the designated states, including those since created out of the territories named, with the right in each to determine for itself to what extent the rule of appropriation or the common-law rule in respect of riparian rights should obtain. For since "Congress cannot enforce either rule upon any state," Kansas v. Colorado, 206 U.S. 46, 94 [27 S.Ct. 655, 666, 51 L.Ed. 956], the full power of choice must remain with the state. The Desert Land Act does not bind or purport to bind the states to any policy. It simply recognizes and gives sanction, in so far as the United States and its future grantees are concerned, to the state and local doctrine of appropriation, and seeks to remove what otherwise might be an impediment to its full and successful operation. See Wyoming v. Colorado, 259 U.S. 419, 465 [42 S.Ct. 552, 557, 66 L.Ed. 999]. 295 U.S. at 163-164, 55 S.Ct. at 731-732. Recently, in California v. United States, supra, the United States Supreme Court reaffirmed that holding, quoting the above passage in full, except for the first sentence. 438 U.S. at 658, 98 S.Ct. at 2992.

The Congress of the United States authorized the admission of Colorado as a state of the Union in 1876. Enabling Act of Colorado, C.R.S.1973 (1980 Repl.Vol. 1A). The Enabling Act provided for admission of this new state upon "an equal footing with the original states," §§ 1, 5; required disclaimer of "all right and title to unappropriated public lands" in Colorado, § 4, see Hartman v. Tresise, 36 Colo. 146, 84 P. 685 (1906); but made no mention of waters.

As the foregoing discussion reflects, federal statutes, as interpreted by the United States Supreme Court, recognize Colorado's authority to adopt its own system for the use of all waters within the state in accordance with the needs of its citizens, subject to the prohibitions against interference with federal reserved rights, with interstate commerce, and with the navigability of any navigable waters. * * *