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Home My WebLink About2023SA258 - City v. Lazy D Grazing Association, et al. - 13 - Opposers Sterling Fort Collins Joint Reply Brief Colorado Supreme Court 2 East 14th Avenue Denver, CO 80203 Appeal from the District Court Water Division 1, 2020CW3113 In Re the Application for Water Rights of Lazy D Grazing Association, in Weld County Opposers-Appellants: City of Sterling and City of Fort Collins v. Applicant-Appellee: Lazy D Grazing Association, and Opposers-Appellants: Basin Lands, LLC; Bijou Irrigation Company; Bijou Irrigation District; Cache La Poudre Water Users Association; City of Boulder; City of Englewood; City of Greeley, acting by and through its Water and Sewer Board; City of Thornton; L.G. Everist, Inc.; Northern Colorado Water Conservancy District; Mary Estabrook; State Engineer and Division Engineer for Water Division No. 1; and United Water and Sanitation District. Attorneys for City of Sterling, Colorado: Alan E. Curtis, #34571 Nicoli R. Bowley, #58709 CURTIS, JUSTUS, & ZAHEDI, LLC 1333 W. 120th Ave., Suite 302 Westminster, Colorado 80234 Phone: (303) 595-9441 Email: alanc@white-jankowski.com nicolib@white-jankowski.com Attorney for the City of Fort Collins, Colorado: FORT COLLINS CITY ATTORNEY’S OFFICE Eric R. Potyondy, #38243 300 LaPorte Avenue Fort Collins, Colorado 80521 Phone: (970) 416-2126 Email: epotyondy@fcgov.com Supreme Court Case No.: 2023SA258 OPPOSERS-APPELLANTS CITY OF STERLING AND CITY OF FORT COLLINS’ JOINT REPLY BRIEF DATE FILED: March 5, 2024 1:37 PM FILING ID: D17898E64659D CASE NUMBER: 2023SA258 Opposers-Appellants the City of Sterling and the City of Fort Collins (the Cities) file their reply brief. Opposers-Appellants the City of Sterling and the City of Fort Collins (the Cities) file their reply brief. CERTIFICATE OF COMPLIANCE The undersigned certify this brief complies with all requirements of C.A.R. 28 and C.A.R. 32, including all formatting requirements set forth in these rules. Specifically, the undersigned certify: The brief complies with C.A.R. 28(g). It contains 5,548 words, which is less than the 5,700-word limit. Per C.A.R. 28(c), this brief also complies with C.A.R. 28(a)(1-3). The undersigned acknowledge that the brief may be stricken if it fails to comply with any of the requirements of C.A.R. 28 and C.A.R. 32. WHITE & JANKOWSKI LLC By: ______________________________ *Alan E. Curtis, #34571 Nicoli R. Bowley, #58709 ATTORNEYS FOR CITY OF STERLING FORT COLLINS CITY ATTORNEY’S OFFICE By: ______________________________ Eric R. Potyondy, #38243 ATTORNEY FOR CITY OF FORT COLLINS i TABLE OF CONTENTS SUMMARY OF ARGUMENT ............................................................................... 1 ARGUMENT ............................................................................................................ 3 1. Subsection 305(6)(b) Does Not Give the State Engineer Authority to Determine Groundwater Is Nontributary. ............................................................ 3 a. Approval of Lazy D’s nontributary claim removes water from the constitutional prior appropriation system. .............................................................. 3 b. Subsection 305(6)(b) is a narrow grant of authority authorizing the State Engineer to make certain, limited factual findings................................................. 5 c. The State Engineer’s authority to make factual findings does not include providing expert opinions or legal conclusions that groundwater is nontributary. 6 d. The State Engineer’s Determination of Facts in this case exceeded his authority. ................................................................................................................. 8 e. The Water Court’s reliance on the State Engineer’s legal conclusion violates due process. ............................................................................................................ 9 f. The Water Court’s error was not harmless. .....................................................11 2. The Water Court Erred in Shifting the Burden of Proof from Lazy D Having to Prove Its Nontributary Claim to the Cities Having to Prove the Subject Groundwater Is Tributary. .....................................................................12 a. The Water Court shifted the burden by requiring the Cities to prove a hydraulic connection sufficient to demonstrate the Subject Groundwater was tributary.................................................................................................................12 b. The Cities rebutted all factual findings properly included in the State Engineer’s Determination of Facts. ......................................................................15 c. The Cities’ expert performed his own independent analyses but did not and was not required to prove the Subject Groundwater is tributary. ........................16 3. The Water Court Erred by Applying the Wrong Standard to the Cities’ Rebuttal of the State Engineer’s Determination of Facts. .................................18 a. CWCB provides the correct standard for evaluating the Cities’ rebuttal evidence. ...............................................................................................................18 ii b. The Water Court failed to apply the correct standard to the Cities’ rebuttal evidence. ...............................................................................................................18 4. The Water Court Erred by Speculating and Relying on Personal Knowledge and Information Not in Evidence. ....................................................19 a. The Water Court performed independent research that was improperly relied upon in this case to help determine disputed facts. ..............................................19 b. Trial courts, like the Water Court, cannot unilaterally supplement evidence admitted at trial. ....................................................................................................19 c. Appellate courts referencing materials outside of evidence do not adjudicate disputed facts. .......................................................................................................21 d. The Water Court did not and should not have taken judicial notice of information relied on in the Order that was not in evidence. ...............................22 e. The Water Court relied on information not in the record in its Order. ...........23 5. The Water Court’s Determination that the Subject Groundwater Is Nontributary Was Based on Faulty Legal Premises and Is Erroneous. ...........24 CONCLUSION .......................................................................................................26 iii TABLE OF AUTHORITIES Cases Bayou Land Co. v. Talley, 924 P.2d 136 (Colo. 1996) ..........................................4, 7 Bayou Land Co. v. Talley, No. 95CA346, 1996 WL 33489177 (Colo. Feb. 27, 1996) ....................................................................................................................... 4 Chatfield E. Well Co. v. Chatfield E. Prop. Owners Ass’n, 956 P.2d 1260 (Colo. 1998) ....................................................................................................................... 8 City of Aurora ex rel. Util. Enter. v. Simpson, 105 P.3d 595 (Colo. 2005) ............... 3 Colo. Ground Water Comm’n. v. N. Kiowa-Bijou Groundwater Mgmt. Dist., 77 P.3d 62 (Colo. 2003).................................................................................... 3, 4, 17 Colo. Water Conservation Bd. v. City of Central, 125 P.3d 424 (Colo. 2005) ......... 6 Colo. Water Conservation Bd. v. Upper Gunnison River Water Conservancy Dist. (CWCB), 109 P.3d 585 (Colo. 2005) ....................................................... 15, 18, 19 Empire Lodge Homeowners’ Ass’n v. Moyer, 39 P.3d 1139 (Colo. 2001) ...........8, 9 Krueger v. Ary, 205 P.3d 1150 (Colo. 2009) ...........................................................15 People v. Morales, 298 P. 3d 1000 (Colo. App. 2012) ............................................21 Prestige Homes, Inc. v. Legouffe, 658 P.2d 850 (Colo. 1983) ................................23 Quintana v. City of Westminster, 8 P.3d 527 (Colo. App. 2000) ............................11 Safranek v. Town of Limon, 228 P.2d 975 (Colo. 1951) ........................................... 3 Santa Fe Trail Ranches Prop. Owners Ass’n v. Simpson, 990 P.2d 46 (Colo. 1999) ................................................................................................................................ 8 Simpson v. Bijou Irrigation Co., 69 P.3d 50 (Colo. 2003) ........................................ 3 Stonewall Estates v. CF&I Steel Corp., 592 P.2d 1318 (Colo. 1979). ...................... 3 Todd v. Bear Valley Vill. Apartments, 980 P.2d 973 (Colo. 1999) .........................10 V Bar Ranch LLC v. Cotton, 233 P.3d 1200 (Colo. 2010) ........................................ 7 Statutes C.R.S. § 37-90-103(10.5) ........................................................................ 3, 12, 13, 16 C.R.S. § 37-90-137(4) ............................................................................................6, 7 C.R.S. § 37-90-137(7)(c) ........................................................................................... 7 C.R.S. § 37-90-137(9)(a-d) ........................................................................................ 7 C.R.S. § 37-92-302(2)(a) ........................................................................................... 5 C.R.S. § 37-92-305(6)(a) ........................................................................................... 6 C.R.S. § 37-92-305(6)(b) ................................................................................. passim iv Rules C.R.C.P. 26 ..............................................................................................................21 C.R.C.P. 26(a)(2) .....................................................................................................10 C.R.E. 201(b) ...........................................................................................................23 Colo. Code. Jud. Cond. Rule 2.9(C) (2024) ............................................................21 Rule 11, Uniform Local Rules for All State Water Court Divisions ................ 10, 21 1 SUMMARY OF ARGUMENT Water in Colorado is presumed tributary unless proven otherwise by clear and convincing evidence. Such determinations are water matters within the exclusive jurisdiction of the Colorado water courts, except where the Colorado Legislature has expressly delegated such authority to the Colorado State Engineer (State Engineer). The State Engineer’s Determination of Facts, dated March 31, 2021 (State Engineer’s Determination of Facts), the rulings of the District Court for Water Division 1 (Water Court), and the arguments of the Lazy D Grazing Association (Lazy D) conflict with these bedrock principles of Colorado law. C.R.S. § 37-92-305(6)(b) (Subsection 305(6)(b)) allows the State Engineer to make limited factual findings regarding groundwater but does not grant the State Engineer authority to determine whether groundwater is nontributary in Water Court proceedings. Nonetheless, the Water Court’s rulings in this case and Lazy D’s arguments in this appeal assume such authority exists. This erroneous interpretation of Subsection 305(6)(b) led the Water Court to shift the burden to the Cities, as parties opposing Lazy D’s nontributary claims, to prove the groundwater at issue (Subject Groundwater) was tributary not once, but twice by being required to disprove both the State Engineer’s and Lazy D’s nontributary theories. The Water Court did not mitigate its errors by applying the 2 correct standard to the Cities’ rebuttal evidence that should have made all presumptions cease upon the Cities’ presentation of relevant evidence on the presumed facts. This is contrary to Colorado law. Colorado law requires relevant information and expert opinions to be properly disclosed prior to trial. At trial, evidence is only included in the record after it has been presented and the Court determines all requirements necessary for admission are met. Only then can the Court use facts in the record to resolve disputed issues. Judicial notice provides a narrow exception to these requirements for facts that are common knowledge and not subject to reasonable dispute. The Water Court ignored these requirements and erred in relying on scientific and technical information outside the trial record in resolving disputed issues. The Cities and Lazy D agree this case is significant to pending and future claims for nontributary groundwater. This Court should apply bedrock principles of Colorado law to ensure nontributary claims are only approved based on clear an d convincing evidence presented by the proponent of the nontributary claim. 3 ARGUMENT 1. Subsection 305(6)(b) Does Not Give the State Engineer Authority to Determine Groundwater Is Nontributary. a. Approval of Lazy D’s nontributary claim removes water from the constitutional prior appropriation system. “All ground water in Colorado . . . is presumed to be tributary absent clear and convincing evidence to the contrary.” Colo. Ground Water Comm’n. v. N. Kiowa- Bijou Groundwater Mgmt. Dist., 77 P.3d 62, 70 (Colo. 2003). See, e.g., Simpson v. Bijou Irrigation Co., 69 P.3d 50, 59 n.7 (Colo. 2003); Safranek v. Town of Limon, 228 P.2d 975, 977 (Colo. 1951). “If one assumes that water judicially declared to be non-tributary is in fact tributary, the effect upon earlier decreed tributary priorities can be marked, if not devastating.” Stonewall Estates v. CF&I Steel Corp., 592 P.2d 1318, 1320 (Colo. 1979). This is especially true in over-appropriated basins, like the South Platte River Basin, where groundwater pumping is presumed injurious to other water users. See City of Aurora ex rel. Util. Enter. v. Simpson, 105 P.3d 595, 607 (Colo. 2005). This explains both the high burden of proof under C.R.S. § 37-90-103(10.5) and the high clear and convincing standard of proof for nontributary claims. Despite this, Lazy D argues the Subject Groundwater is not being removed from the constitutional prior appropriation system because it “was not part of that 4 system to begin with.” Answer Brief at 18. In other arguments, Lazy D assumes the Subject Groundwater was already nontributary, which calls into question why Lazy D filed a Water Court application and went to trial to prove what it assumes did not need to be proven at all. See, e.g., id. at 19. Lazy D relies on cases including Colorado Ground Water Commission, 77 P.3d 62 and Bayou Land Company v. Talley, 924 P.2d 136 (Colo. 1996) as supporting this position. However, in both cases, the groundwater at issue had already been determined to be nontributary and the State Engineer was simply issuing permits in connection with those pre-existing determinations. See Colo. Ground Water Comm’n, 77 P.3d at 72 (confirming the water at issue was Denver Basin groundwater for which “the legislature intended to provide for specific rules governing withdrawal”). See also Appellant’s Opening Brief, Bayou Land Co. v. Talley, No. 95CA346, 1996 WL 33489177, at *3 (Colo. Feb. 27, 1996) (confirming the nontributary groundwater at issue in Bayou Land Company was Denver Basin groundwater “in the Lower Dawson, Denver, Arapahoe, and Laramie-Fox Hills aquifers.”). Both the Water Court’s and Lazy D’s presumption the Subject Groundwater was nontributary based on the State Engineer’s Determination of Facts violated Colorado law by shifting the burden from Lazy D to prove nontributariness to 5 requiring the Cities to prove what is already presumed under Colorado law, that the Subject Groundwater is tributary. b. Subsection 305(6)(b) is a narrow grant of authority authorizing the State Engineer to make certain, limited factual findings. Lazy D argues Subsection 305(6)(b) and the referenced C.R.S. § 37-92- 302(2)(a) (Subsection 302(2)(a)) broadly authorize the State Engineer to make determinations of facts regarding nontributary groundwater applications. Answer Brief at 21-22. However, Lazy D’s argument disregards the statutory context and case law. Subsection 305(6)(b) states: In the case of wells described in section 37 -90-137(4), the referee or water judge shall consider the state engineer’s determination as to such groundwater as described in section 37 -92-302(2) in lieu of findings made pursuant to section 37 -90-137, and shall require evidence of compliance with the provisions of section 37 -92-302(2) regarding notice to persons with recorded interests in the overlying land. The state engineer’s findings of fact contained within such determination shall be presumptive as to such facts, subject to rebuttal by any party. In relevant part, Subsection 302(2)(a) states: In the case of applications for determinations of rights to groundwater from wells described in section 37 -90-137(4), the application shall be supplemented by evidence that the state engineer has issued or failed to issue, within four months of the filing of the application in water court, a determination as to the facts of such application. As discussed in the Opening Brief on pages 7-8, Subsection 305(6)(b) requires the Water Court to consider factual findings “in lieu of findings made pursuant to 6 [C.R.S. § 37-90-137(4)],” concerning permits to construct wells and the amount of groundwater available. Lazy D argues the reference in Subsection 305(6)(b) to findings “in lieu of findings made pursuant to section 37 -90-137” refers to the completely separate C.R.S. § 37-92-305(6)(a). Answer Brief at 21. However, that argument finds no textual basis, including the lack of a cross reference. See Colo. Water Conservation Bd. v. City of Central, 125 P.3d 424, 434 (Colo. 2005) (“To determine legislative intent, ‘we look first to the language of the statute and apply its plain and ordinary meaning, if possible.’”). As indicated by the numerous express cross references in C.R.S. § 37-92-305, the Legislature would have expressly stated such a reference if that had been the intent. c. The State Engineer’s authority to make factual findings does not include providing expert opinions or legal conclusions that groundwater is nontributary. Lazy D argues it is “inescapable” that the State Engineer is authorized to make a determination of facts. Answer Brief at 22. However, the question is not whether the State Engineer can determine facts under Subsection 305(6)(b). Instead, the question is what facts he may determine.1 Subsection 305(6)(b) is a narrow 1Lazy D argues this Court has previously interpreted Subsection 305(6)(b). Answer Brief at 28. The two cases Lazy D cites make at most passing references to Subsection 305(6)(b) and do not address disputed issues in this appeal. 7 authorization for the State Engineer to make certain, limited factual findings “in lieu of findings made pursuant to section 37-90-137” regarding well permitting and the amount of groundwater. See Opening Brief at 7-9. See also Bayou Land Co., 924 P.2d at 147 (emphasis added) (confirming C.R.S. § 37-90-137(4) directs “the state engineer, in issuing well permits to withdraw nontributary ground water, to consider ‘only that quantity of water underlying the land owned by the applicant or by the owners of the area, by their consent’ to be available for withdrawal”). The Legislature has chosen to “delegate certain administrative actions involving ‘water matters’ to the State Engineer.” V Bar Ranch LLC v. Cotton, 233 P.3d 1200, 1206 (Colo. 2010). Current statutes authorize the State Engineer to make nontributary determinations through: (1) rulemaking and adjudicatory procedures authorized under C.R.S. § 37-90-137(7)(c) (regarding produced nontributary groundwater); and (2) C.R.S. § 37-90-137(9)(a-d) (regarding Denver Basin aquifers) (collectively, Statutorily Authorized Nontributary Rulemaking). There is no statutory authority for the State Engineer to make nontributary determinations except through Statutorily Authorized Nontributary Rulemaking , and allowing the State Engineer to do so intrudes on the Water Court’s exclusive jurisdiction. “[W]hen the General Assembly so intends, the statutory language 8 creating such authority appears expressly.” Empire Lodge Homeowners’ Ass’n v. Moyer, 39 P.3d 1139, 1154 (Colo. 2001) (emphasis added). The statutory language Lazy D relies on does not give the State Engineer authority to make nontributary determinations or provide expert opinions or legal conclusions regarding the mixed factual and legal question of nontributariness. See Chatfield E. Well Co. v. Chatfield E. Prop. Owners Ass’n, 956 P.2d 1260, 1272 (Colo. 1998). Lazy D’s interpretation would conflict with Colorado’s long-standing allocation of roles and responsibilities between the State Engineer and the courts. See, e.g., Santa Fe Trail Ranches Prop. Owners Ass’n v. Simpson , 990 P.2d 46, 58 (Colo. 1999) (“Our state legislature and courts, however, have never accepted the proposition that water officials may determine the water rights of citizens; this is a judicial function under the adjudication statutes.”). This Court should not endorse an interpretation of Subsection 305(6)(b) that conflicts with such basic principles of Colorado law. d. The State Engineer’s Determination of Facts in this case exceeded his authority. Lazy D argues the State Engineer made appropriate legal conclusions in the State Engineer’s Determination of Facts, purportedly because determinations groundwater is nontributary are mixed questions of law and fact and authority to do 9 so is implied in the statutes. See Answer Brief at 20-24. As discussed above, State Engineer authority does not exist unless “statutory language creating such authority appears expressly.” Empire Lodge, 39 P.3d at 1154.2 The statutory authority for the State Engineer to make nontributary determinations outside of Statutorily Authorized Nontributary Rulemaking relied on by the Water Court and Lazy D does not exist. e. The Water Court’s reliance on the State Engineer’s legal conclusion violates due process. Lazy D argues the State Engineer’s Determination of Facts was properly disclosed. Answer Brief at 6-8. Lazy D then confuses the Cities’ due process arguments as being based solely on a lack of disclosure. Answer Brief at 24. However, Lazy D’s arguments fail to respond to the due process issues identified in the Opening Brief on pages 9-13. The State Engineer’s Determination of Facts was filed on March 31, 2021, approximately four months after the amended application was filed and before Lazy D first circulated an engineering report to the Cities and other parties on April 30, 2021. Court File (CF) 131, 145-152. The Cities and other parties had no opportunity to provide comments or opinions addressing the analyses in the State 2The State Engineer is a party to this case and has not filed a brief in this appeal addressing this or any other issue. 10 Engineer’s Determination of Facts. This stands in contrast to the procedural protections in Statutorily Authorized Nontributary Rulemaking . It is undisputed the State Engineer’s Determination of Facts was provided to the Cities and other parties. However, the State Engineer’s Determination of Facts contains expert opinions regarding the claimed nontributariness of the Subject Groundwater. See State Engineer’s Determination of Facts, CF 14 6-149, items 4-8. These opinions were not properly disclosed as expert opinion evidence under C.R.C.P. 26(a)(2) and Rule 11 of the Uniform Local Rules for All State Water Court Divisions (Water Court Rules), which prevented the Cities from preparing to address this evidence at trial. See Todd v. Bear Valley Vill. Apartments , 980 P.2d 973, 979 (Colo. 1999). The Water Court then relied on both the improperly disclosed expert opinions and the ultra vires legal conclusions in the State Engineer’s Determination of Facts regarding nontributariness. The Determination of Facts was then admitted into evidence over the Cities’ objection that it included legal conclusions that are not subject to judicial notice, with the Water Court determining: “Well, I’m admitting it because the statute says I have to determine it. I don’t know why [counsel for Lazy D] is admitting it.” CF 1481, TR 4/10/2023, 190:22-24. 11 “Although opinion testimony is not objectionable merely because it embraces an ultimate issue of fact, C.R.E. 704, an expert may not usurp the function of the court by expressing an opinion of the applicable law or legal standards.” Quintana v. City of Westminster, 8 P.3d 527, 530 (Colo. App. 2000) (citation omitted). Despite this, the Water Court then used these improperly disclosed expert opinions and ultra vires legal conclusions to shift the burden to the Cities to prove the Subject Groundwater was tributary, even though Colorado law presumes all water is tributary absent clear and convincing evidence to the contrary. f. The Water Court’s error was not harmless. Lazy D argues the Water Court did not rely on the State Engineer’s Determination of Facts, but independently found the Subject Groundwater is nontributary. Answer Brief at 24-25. However, as discussed in the Opening Brief on pages 37-38 and summarized below, the Water Court misinterpreted the purpose and legal effect of the State Engineer’s Determination of Facts and Subsection 305(6)(b) as creating a presumption the Subject Groundwater was nontributary. For the reasons discussed below, the erroneous legal approach in the Water Court’s August 18, 2023 Findings of Fact and Conclusions of Law (Order) treated the Cities as the proponents of a tributary claim that had to be proven not once, but twice, by overcoming both the State Engineer’s and Lazy D’s separate nontributary 12 theories. See Opening Brief at 11-12; 22-23. These errors pervade the Water Court’s analysis and Order such that findings of nontributariness of the Subject Groundwater cannot stand independently. 2. The Water Court Erred in Shifting the Burden of Proof from Lazy D Having to Prove Its Nontributary Claim to the Cities Having to Prove the Subject Groundwater Is Tributary. a. The Water Court shifted the burden by requiring the Cities to prove a hydraulic connection sufficient to demonstrate the Subject Groundwater was tributary. Lazy D argues the Water Court did not shift the burden to the Cities because the Water Court “merely looked for evidence of a hydraulic connection between the [Upper Laramie Aquifer] and any overlying streams or alluvium, which would rebut the [State Engineer’s] finding of hydraulic disconnection.” Answer Brief at 30. This argument confirms that the burden did shift to the Cities because, as discussed further below, the Water Court was improperly requiring the Cities to disprove presumed facts. Lazy D also argues the Water Court did not require the Cities to prove the Subject Groundwater was tributary because that would require a “quantification analysis to determine whether movement of water upon withdrawal would deplete the natural stream in an amount greater than what is allowed under the definition of nontributary groundwater found in §37 -90-103(10.5).” Answer Brief at 30. 13 Nevertheless, in this case, the Water Court based its Order in significant part on the Cities’ failing to prove that the Subject Groundwater was tributary. See CF 2761 (Order at 8); CF 2774 (Order at 21); Opening Brief at 12. Lazy D’s argument related to a quantification analysis is particularly unpersuasive because of Lazy D’s theory of the case. Answer Brief at 30. Lazy D’s theory at trial was that the Subject Groundwater was completely hydraulically disconnected from all natural streams. E.g., CF 2021-2022, TR 4/12/2023, 63:6- 64:17. Lazy D did not quantify depletions from proposed pumping. See C.R.S. § 37- 90-103(10.5). Lazy D’s burden was thus to prove by clear and convincing evidence the Subject Groundwater was completely hydraulically disconnected from all natural streams. As a result, Lazy D’s nontributary claim would be defeated either: (1) by failure to prove complete disconnection by clear and convincing evidence or (2) by proof of any hydraulic connection between the Subject Groundwater and any natural stream, including its underflow and tributary waters. The Water Court’s reliance on the Cities’ lack of a quantification analysis has no basis in Colorado law or Lazy D’s theory of the case. To the contrary, it illustrates the Water Court placed an unfounded burden on the Cities to disprove Lazy D’s nontributary claim. This required the Cities to overcome two separate nontributary 14 theories. The first was presented in the State Engineer’s Determination of Facts, and the second by Lazy D at trial. The nontributary theory relied on in the State Engineer’s Determination of Facts relied in significant part on “[t]he Glover analytical model . . . to determine depletion to a stream from a well pumping groundwater from the stream’s adjacent alluvium.” CF 147 (emphasis added). The Water Court improperly found the Cities must rebut the State Engineer’s unauthorized determination that the Subject Groundwater was nontributary based in large part on this stream depletion approach before Lazy D had any burden to support its own nontributary claim. See CF 2157, TR 4/12/23, 199:12-24; CF 2685, TR 4/25/23, 130:5-8. Conversely, Lazy D’s nontributary theory was based solely on a claim the Subject Groundwater was hydraulically disconnected from all natural streams and would cause no stream depletion at all. See CF 4-13, 98-107, 2761. When the Cities demonstrated there was a hydraulic connection, the Water Court disallowed this evidence because the Cities did not demonstrate the hydraulic connection was sufficient to demonstrate the Subject Groundwater was tributary. See CF 2761 (Order at 8). In so doing, the Water Court applied the erroneous presumption accorded to the State Engineer’s Determination of Facts in determining whether Lazy D 15 presented clear and convincing evidence supporting its nontributary claims. U nder the erroneous burden shifting employed by the Water Court, the Cities’ failure to rebut the State Engineer’s Determination of Facts would have resulted in dismissal of the Cities’ opposition and approval of Lazy D’s nontributary claim without Lazy D presenting any evidence at all. b. The Cities rebutted all factual finding s properly included in the State Engineer’s Determination of Facts. Where there is a statutory presumption and a burden of going forward with the evidence, that burden is met by presenting relevant evidence on relevant facts. See Colo. Water Conservation Bd. v. Upper Gunnison River Water Conservancy Dist. (CWCB), 109 P.3d 585, 596-97 (Colo. 2005). See Opening Brief at 21 (quoting CWCB, 109 P.3d at 596) (emphasis added): “should any party present evidence on the statutory factors, the presumptive effect of the [agency’s] findings has been rebutted, and the water court must then weigh the evidence before it .”. To be successfully rebutted, the presumed facts do not need to be disproven. Once the initial burden of going forward with the evidence is met, any associated presumptions “do not continue in the case.” Krueger v. Ary, 205 P.3d 1150, 1158 (Colo. 2009). Any facts included in the State Engineer’s Determination of Facts were rebutted by the Cities through their relevant evidence on the relevant facts. See 16 Opening Brief at 24-27 (detailing the Cities’ extensive rebuttal evidence related to factual findings in the State Engineer’s Determination of Facts). The Cities thus: (1) met the burden of going forward with the evidence , and (2) the presumption should have had no further effect, with Lazy D being required to prove by clear and convincing evidence the Subject Groundwater is hydraulically disconnected from all natural streams. As discussed above, this did not occur. Instead, despite the fact the Cities presented relevant evidence on the relevant facts, and even went further to prove the Subject Groundwater is hydraulically connected to the natural stream, the Water Court continued to apply the improper presumption from the State Engineer’s Determination of Facts that the Subject Groundwater was nontributary unless the Cities proved otherwise by demonstrating withdrawals of the Subject Groundwater would deplete the natural stream by more than the nontributary standard of C.R.S. § 37-90-103(10.5). This Court should clarify the standards to be applied and correct the Water Court’s errors in this case. c. The Cities’ expert performed his own independent analyses but did not and was not required to prove the Subject Groundwater is tributary. Lazy D asserts the Cities’ expert “did not perform any independent analysis, but relied on (and interpreted differently) documents and evidence developed by Lazy D’s expert.” Answer Brief at 4. However, this is a misstatement. 17 The Cities’ expert (Mr. Crawford) performed his own independent analyses of Lazy D’s claims and the facts related to this matter. Mr. Crawford’s analyses were documented and properly disclosed in numerous expert reports and were the subject of Mr. Crawford’s expert testimony at trial. CF 416-455, 547-584, 684-696, 800- 812, 2244-2653 (Tim Crawford’s testimony). This included analyses and opinions based on Mr. Crawford’s personal experience drilling wells in and around the outcrops of the Upper Laramie Aquifer. E.g., CF 2254-2255, TR 4/24/2023, 32:2-33:9; CF 2270-2271, TR 4/24/2023, 48:2- 49:19. Although Mr. Crawford demonstrated that the Subject Groundwater is hydraulically connected to the natural stream, he did not seek to prove that the Subject Groundwater is tributary, as that was not the Cities’ burden. Colorado law presumes all water is tributary until it is proven otherwise by clear and convincing evidence. See, e.g., Colo. Ground Water Comm’n, 77 P.3d at 70. There can be no claim that water is tributary because Colorado law already presumes this is the case. There is only a claim to attempt to overcome the preexisting legal presumption of tributariness, with parties opposing a nontributary claim seeking to uphold the status quo. 18 3. The Water Court Erred by Applying the Wrong Standard to the Cities’ Rebuttal of the State Engineer’s Determination of Facts. a. CWCB provides the correct standard for evaluating the Cities’ rebuttal evidence. Lazy D argues the Cities “never argue about, identify or articulate the correct standard” to apply to the Cities’ rebuttal evidence. Answer Brief at 31. In the Opening Brief at 20-21, 24-25, and 27, the Cities discuss CWCB, 109 P.3d at 596-97, as being the appropriate standard, the same standard the Cities argued to the Water Court. CF 1271-1272 (the Cities’ proposed findings at 7-8). In the Opening Brief, the Cities explain in detail how the Water Court failed to apply this standard and how the result would have differed had it been applied and applied properly. Opening Brief at 20-21, 24-25, and 27. Rather than address CWCB, 109 P.3d at 596-97, as the controlling law on this issue, Lazy D ignores it. This Court should not do the same. b. The Water Court failed to apply the correct standard to the Cities’ rebuttal evidence. Lazy D argues the Cities are not really challenging the standard the Water Court applied to the Cities’ rebuttal evidence, but instead, are seeking “to challenge the evidence supporting the water court’s determination that the presumption was not rebutted.” Answer Brief at 31. The Order did not identify any legal standard by which the Cities’ rebuttal evidence was to be evaluated. See CF 2781, 2784; (Order 19 at 28, 31). The Water Court instead made a conclusory ruling without citing any standard or providing any analysis. Contrary to Lazy D’s argument, it is not the Cities’ fault the Water Court took this erroneous approach. See Answer Brief at 31. As discussed in the Opening Brief on pages 20-21, 24-25 and 27 and above, the Water Court would and should have reached a different result had CWCB, 109 P.3d at 596-97, been identified and applied as the proper legal standard. 4. The Water Court Erred by Speculating and Relying on Personal Knowledge and Information Not in Evidence. a. The Water Court performed independent research that was improperly relied upon in this case to help determine disputed facts. Lazy D concedes before entering the Order the Water Court “performed some independent judicial research,” but then attempts to excuse the Water Court’s actions. See Answer Brief at 4-5. None of Lazy D’s arguments justify the Water Court’s reliance on information not in evidence. b. Trial courts, like the Water Court, cannot unilaterally supplement evidence admitted at trial. Lazy D argues water courts are allowed and should be encouraged to perform independent judicial research on scientific matters. Answer Brief at 35 -38. The Cities do not object to water judges bringing their experience and knowledge to bear in assessing evidence admitted at trial. Indeed, all judges bring their own experiences 20 and knowledge to cases on their docket. That is also an important aspect of specialized courts like the Water Court. Likewise, the Cities do not object to having water judges educate themselves in groundwater and other technical matters, through judicial conferences and other training. This benefits the water courts and the parties appearing in those courts. However, that is not the issue in this case. The Water Court in this case went beyond educating itself generally regarding technical groundwater matters, and instead specifically researched matters associated with disputed factual issues. The Water Court then relied on information it specifically researched outside of the judicial process in connection with these disputed factual matters to make the determinations in the Order. This introduced additional evidence in support of one party (Lazy D) that the Cities had no opportunity to address through their own evidence, including direct testimony and cross-examination at trial. The only legal support Lazy D proposes as supporting the proposition trial courts may perform such research and rely on such non-evidence is a 38-year-old case from the Federal 11th Circuit Court of Appeals. Answer Brief at 35. See also Answer Brief at 40 (citing no authority for the proposition that a judge may perform their own independent research related to expert testimony). 21 However, as discussed in the Opening Brief, the Water Court’s actions bypass the detailed and necessary procedural protections embodied in the Colorado Rules of Evidence, Colorado Rules of Civil Procedure, and Water Court Rules in a manner not permitted under Colorado law: “A judge shall not investigate facts in a matter independently, and shall consider only the evidence presented and any facts that may properly be judicially noticed.” Colo. Code. Jud. Cond. Rule 2.9(C) (2024). c. Appellate courts referencing materials outside of evidence do not adjudicate disputed facts. Lazy D argues the Water Court was justified in relying on information not in evidence because this Court and other appellate courts occasionally cite scholarly or other scientific materials. Answer Brief at 17 n.2, 39. Lazy D’s argument ignores the distinction between trial courts, like the Water Court, and appellate courts, like this Court. Trial courts cannot rely on information outside of evidence because they are determining disputed facts. As discussed in the Opening Brief on pages 28-31, Colorado law includes detailed requirements regarding how information and opinions must be disclosed and presented at trial . See C.R.C.P. 26; Water Court Rule 11. Conversely, appellate courts are not finders of fact. See generally, e.g., People v. Morales, 298 P. 3d 1000, 1008 (Colo. App. 2012) (“An appellate court is not permitted to act as a fact finder . . . .”). Instead, their role is to review the actions of 22 the trial courts and to rule upon the law. See Colorado Appellate Rules. Therefore, an appellate court may refer to information not in evidence in making its legal rulings. However, this does not mean trial courts can evade the detailed and necessary procedural protections embodied in the Colorado Rules of Evidence, Colorado Rules of Civil Procedure, and Water Court Rules. d. The Water Court did not and should not have taken judicial notice of information relied on in the Order that was not in evidence. Lazy D argues the Water Court took judicial notice of the information not in evidence. Answer Brief at 34, 40, 42-43. This argument has no support in the record or Colorado law. The Water Court did not indicate at trial or in the Order that it was taking judicial notice of information not in evidence or in the record. By contrast, at trial, the Water Court expressly indicated when it was or was not taking judicial notice of information. CF 1305, TR 4/10/2023, 14:10-12; CF 1437-1438, TR 4/10/2023, 146:22-147:16; CF 1439, TR 4/10/2023, 148:10-16; CF 1446-1447, TR 4/10/2023, 155:7-156:18; CF 2007-2008, TR 4/12/2023, 49:21-50:2; CF 2009, TR 4/12/2023, 51:15-25; CF 2012, TR 4/12/2023, 54:16-19; CF 2027-2028, TR 4/12/2023, 69:15-70:9; CF 2050, TR 4/12/2023, 92:8-11; CF 2373, TR 4/24/2023, 151:16-24. Had the Water Court intended to take judicial notice of information not in evidence, it would have done so. 23 Even if the Water Court had intended to take judicial notice of information not in evidence and relied on in the Order, the information at issue is not appropriate for judicial notice. A trial court may take judicial notice of a fact that has not been formally supported by evidence and therefore assume its truth for purposes of the pending case, but only if the fact is one that is “not subject to reasonable dispute.” C.R.E. 201(b). A fact is “not subject to reasonable dispute” if it is “generally known within the territorial jurisdiction of the trial court” or “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Id. Detailed scientific and technical information regarding groundwater and hydrogeology are not the type of information of which judicial notice can be taken to avoid the normal evidential process. See Prestige Homes, Inc. v. Legouffe, 658 P.2d 850, 854 (Colo. 1983). e. The Water Court relied on information not in the record in its Order. Lazy D asserts “[n]one of the citations or quotes were relied upon to decide a disputed adjudicative fact.” Answer Brief at 5. However, as detailed in the Opening Brief on pages 31-34, the Water Court cited, discussed, and relied upon sources and information that were not in the record in the Order in ten separate instances to resolve disputed factual issues. If these extra-record sources were not relevant to the 24 Order, it begs the question of why they were included at all. Moreover, with so many and such extended reliance on sources that were not in evidence, they cannot simply be disregarded or extracted after-the-fact from the Order. 5. The Water Court’s Determination that the Subject Groundwater Is Nontributary Was Based on Faulty Legal Premises and Is Erroneous . Lazy D devotes a significant portion of its Answer Brief to a lengthy “statement of facts,” based on various citations to evidence presented at trial but in no way limited to the Water Court’s findings of fact in the Order. Answer Brief at 8-14. Many of the citations and statements concern disputed factual issues that were the subject of extensive expert testimony and cross-examination. See CF at 1264- 1287 (Cities’ proposed post-trial findings, setting forth the Cities’ view of the facts). This portion of Lazy D’s Answer Brief is argument and should be treated as such. Despite Lazy D’s attempts to justify the result, the Water Court’s determination the Subject Groundwater is nontributary resulted from the series of errors discussed in the Opening Brief and in this Reply Brief. The Water Court applied incorrect legal standards when it misinterpreted and misapplied the State Engineer’s Determination of Facts and Subsection 305(6)(b), which resulted in an unauthorized grant of authority to the State Engineer to determine whether groundwater is nontributary. The Water Court compounded this initial error by also 25 failing to apply the correct legal standard to the Cities’ rebuttal evidence regarding the State Engineer’s Determination of Facts. These errors shifted the burden of proof from Lazy D to the Cities contrary to Colorado law, creating the erroneous presumption that groundwater is nontributary unless proven otherwise. This Court should afford no deference to the Water Court’s determination the Subject Groundwater is nontributary, since the Water Court based its determination on factual findings that are erroneous and not supported by the record. As discussed above, the sole issue before the Water Court at trial was whether Lazy D demonstrated, based on clear and convincing evidence, that the Subject Groundwater was completely disconnected from the natural stream. The Cities demonstrated there was a connection and were not required to quantify that connection to prove what is always presumed under Colorado law, that all water is tributary. Based on the Water Court’s factual finding this connection was shown, Lazy D’s nontributary claims should have been denied. Consequently, this Court should, upon de novo review, find the Water Court’s determination that the Subject Groundwater is nontributary is erroneous and must be reversed . 26 CONCLUSION Based on the foregoing, the Cities respectfully request this Court reverse the relevant rulings of the Water Court and remand the case for further proceedings consistent with the opinion of this Court. Respectfully submitted March 5, 2024. CURTIS, JUSTUS, & ZAHEDI, LLC By: ______________________________ *Alan E. Curtis, #34571 Nicoli R. Bowley, #58709 ATTORNEYS FOR CITY OF STERLING FORT COLLINS CITY ATTORNEY’S OFFICE By: ______________________________ Eric R. Potyondy, #38243 ATTORNEY FOR CITY OF FORT COLLINS 27 CERTIFICATE OF SERVICE I certify that on March 5, 2024, a true and correct copy of OPPOSERS- APPELLANTS CITY OF STERLING AND CITY OF FORT COLLINS’ JOINT REPLY BRIEF for Case No. 23SA258 was served by e-filing via Colorado Courts E-filing System to the parties listed below: ______________________________________ Andrea Browne, Legal Administrative Assistant Party Name Party Type Attorney Name/Organization Basin Lands LLC Opposer MATTHEW MACHADO (Lyons Gaddis PC) Bijou Irrigation Company Opposer BRADLEY NEIL KERSHAW (Vranesh and Raisch) STUART B CORBRIDGE (Vranesh and Raisch) Bijou Irrigation District Opposer BRADLEY NEIL KERSHAW (Vranesh and Raisch) STUART B CORBRIDGE (Vranesh and Raisch) Cache La Poudre Water Users Association Opposer DANIEL KENNETH BROWN (Fischer Brown Bartlett Larsen and Irby PC) WHITNEY PHILLIPS COULTER (Fischer Brown Bartlett Larsen and Irby PC) City of Boulder Opposer JESSICA LYNN PAULT-ATIASE (Boulder City Attorney’s Office) LISA M THOMPSON (Trout Raley) MICHAEL A KOPP (Trout Raley) 28 Party Name Party Type Attorney Name/Organization City of Englewood Opposer GEOFFREY M WILLIAMSON (Berg Hill Greenleaf & Ruscitti LLP) MEGAN CHRISTENSEN (Berg Hill Greenleaf & Ruscitti LLP) PATRICK MICHAEL HAINES (Berg Hill Greenleaf & Ruscitti LLP) PETER D NICHOLS (Berg Hill Greenleaf & Ruscitti LLP) City of Fort Collins Opposer ERIC RYAN POTYONDY (City Attorney’s Office) City of Greeley Acting By And Through Opposer CAROLYN F BURR (Welborn Sullivan Meck & Tooley, P.C.) DANIEL JAMES BIWER (City of Greeley) JAMES MERLE NOBLE (Welborn Sullivan Meck & Tooley, P.C.) City of Thornton Opposer KARA NICOLE GODBEHERE (City of Thornton) Division 1 Engineer Division Engineer DIVISION 1 WATER ENGINEER (State of Colorado DWR Division 1) Lazy D Grazing Assoc Applicant BRADLEY CHARLES GRASMICK (Lawrence Custer Grasmick Jones and Donovan LLP) RICHARD T LI PUMA (Lawrence Custer Grasmick Jones and Donovan LLP) RYAN MATTHEW DONOVAN (Lawrence Custer Grasmick Jones and Donovan LLP) WESLEY SAGE KNOLL (Lawrence Custer Grasmick Jones and Donovan LLP) Lg Everist Inc Opposer MATTHEW LAKE MERRILL (MERRILL LAW LLC) Mary Estabrook Opposer 1903 S Greeley Hwy 110, Cheyenne, WY 82007, United States (Regular Mail) 29 Party Name Party Type Attorney Name/Organization Northern Colorado Water Conservancy District Opposer BENNETT WILLIAM RALEY (Trout Raley) LISA M THOMPSON (Trout Raley) MICHAEL A KOPP (Trout Raley) State Engineer State Engineer COLORADO DIVISION OF WATER RESOURCES (State of Colorado - Division of Water Resources) State Engineer And Water Div 1 Engineer Opposer EMILIE BLAKE POLLEY (CO Attorney General) United Water And Sanitation District Opposer ANN MARIE RHODES (The Law Office of Tod J Smith) TOD JAY SMITH (The Law Office of Tod J Smith)