Thursday, September 27, 2012

Taking Snow?

In recent decades, the federal lands have generated a whole bunch of water rights cases.  The usual fact pattern involves a private party that leases federal lands, and that uses water on those lands.  Under well-established principles of western water law, leaseholders may develop private water rights to water flowing across their leaseholds, and that those rights are defined by state, not federal, law.  That raises issues when the federal government attempts to restrict the leaseholder’s activities, or denies renewal of the lease.  According to at least some leaseholders, such a restriction or denial constitutes an unconstitutional taking of the private water rights.

ISS018-E-005353Most of the cases to raise this issue have involved grazing leases.  However, a federal district court in Colorado is now considering a new variation of this dispute.  National Ski Areas Association v. United States Forest Service involves, as its name suggests, ski areas on federal land. In 2012, the Forest Service issued a guidance document that either (a) clarified that ski areas’ water rights are jointly held with the Forest Service (that’s the Forest Service version); or (b)compelled ski areas to transfer some existing rights into joint ownership, and compelled forest managers to exact joint ownership of other water rights as a condition for future renewal of leases (that’s the ski area version).   The National Ski Areas Association sued, opposing what they described, in a press release, as “this outright taking of private property by the U.S. Government.”

So will this be the next major water rights/takings case?  Probably not.  The ski areas’ primary argument is a classic procedural administrative law claim; the association argues that the guidance document was actually a legislative rule that should have gone through notice and comment.  The ski areas also bring several other administrative law arguments, but the takings claim, though central to their political and public relations offensives, appears nowhere in the their brief.  That doesn’t mean the issue is just rhetorical fluff; the ski areas may have just decided that a facial administrative law challenge has better prospects than a facial takings challenge, and may well be reserving the legal takings arguments for a later case (if this initial one fails).  And no matter how the court (and, probably, the 10th Circuit) resolves the case, it will need to answer some questions about the water rights at issue.  Still, in this round, at least, the takings issue won’t be squarely presented.

Nevertheless, this is a case to watch.  There are a lot of federal leaseholders with water rights, and whatever the district court says will be of great interest not just to ski areas and cattle ranchers, but also to holders of oil and gas leases, to miners, and, of course, to environmentalists.  So stay tuned.

- Dave Owen

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