Exclusion of Anti-Speculation Doctrine in Augmentation Plan Amendments for Denver Basin Not-Nontributary Groundwater

Introduction

In Franktown Citizens Coalition II, Inc. & West Elbert County Well Users Association v. Independence Water & Sanitation District (2025 CO 5), the Colorado Supreme Court confronted whether a water court must apply the anti-speculation doctrine when reviewing an application to amend an existing augmentation plan for Denver Basin not-nontributary groundwater. Independence Water and Sanitation District (“Independence”), a quasi-municipal special district, sought to expand the uses (and locations) of 75 acre-feet per year of not-nontributary Upper Dawson groundwater originally decreed in a 2006 judgment. Opposers—Franktown Citizens Coalition II and West Elbert County Well Users Association—claimed that because Independence could not specify how much water would be dedicated to each new use or where off the Subject Property it would be used, the amendment was speculative and barred by Colorado’s anti-speculation doctrine. The water court disagreed and approved the amendment without performing an anti-speculation analysis. Opposers appealed.

Summary of the Judgment

The Supreme Court affirmed the water court’s decree, holding that:

Distinct Purposes: The anti-speculation doctrine and augmentation-plan review serve different ends. The former guards the integrity of prior appropriations by preventing hoarding and speculative rights; the latter authorizes out-of-priority diversions of already-appropriated water so long as replacement supplies prevent injury to senior rights.
Sole Inquiry—Injury: A water court’s review of an augmentation plan (or amendment) turns exclusively on whether the proposed plan will “injuriously affect” vested or decreed conditional water rights, per § 37-92-305(3)(a), C.R.S., rather than on the applicant’s specificity of future intent.
No Clear Error: The record demonstrated ample replacement water—via return flows and nontributary groundwater releases—to offset any depletions from the expanded uses, and the court’s no-injury finding was not clearly erroneous.

Consequently, the Supreme Court held that applying the anti-speculation doctrine in this context would frustrate augmentation-plan policy and affirmed the approval of the amendment.

Analysis

Precedents Cited

East Cherry Creek Valley Water & Sanitation District v. Rangeview Metropolitan District (109 P.3d 154, Colo. 2005): Held that water courts may not apply the anti-speculation doctrine when adjudicating Denver Basin nontributary groundwater rights, because the legislature delegated anti-speculation review to the State Engineer during well permitting.
Colorado Ground Water Commission v. North Kiowa-Bijou Groundwater Management District (77 P.3d 62, Colo. 2003): Explained that Denver Basin not-nontributary groundwater—though partially tributary—is administered like nontributary groundwater (i.e., on a land-ownership basis) so long as use is subject to augmentation.
Empire Lodge Homeowners’ Ass’n v. Moyer (39 P.3d 1139, Colo. 2001): Described augmentation plans as a mechanism to allow out-of-priority diversions without injury, weaving flexibility into prior appropriation.
Vidler Tunnel Water Co. v. Colo. River Water Conservation Dist. (594 P.2d 566, Colo. 1979): Articulated the anti-speculation doctrine in the conditional-right context, requiring specific plan and intent to put water to beneficial use.

Legal Reasoning

The Court’s reasoning unfolded in two steps:

Different Statutory Schemes:
- Anti-Speculation Doctrine: Embedded in § 37-92-103(3)(a), the doctrine obliges applicants for new appropriations or changes to show “a specific plan and intent to divert, store, or otherwise capture . . . a specific quantity of water for specific beneficial uses.” Its goal is to prevent water-right seekers from acquiring rights merely to speculate or resell.
- Augmentation Plans: Defined in § 37-92-103(9), an augmentation plan is “a detailed program . . . to increase the supply of water available for beneficial use,” by replacing out-of-priority depletions so that no injury occurs. Approval turns on the technical question of whether replacement supplies—return flows, direct releases, nontributary water—will offset the proposed depletions in time, quantity, and location.
The Court emphasized that augmentation plans operate outside the prior appropriation ladder: they make room for out-of-priority use only if injury is averted. By contrast, the anti-speculation doctrine preserves the ladder’s integrity by policing the speculative edges of new or amended appropriations.
Statutory Focus on Injury:
- Under § 37-92-305(3)(a), a water court “shall” approve an augmentation plan so long as it determines that the plan “will not injuriously affect” existing vested or decreed conditional rights.
- Even when amendment procedures mirror those for new plans (§ 37-92-305(8)(a)), the Court held that the sole relevant inquiry remains injury—there is no requirement that the applicant prove a non-speculative intent to use the augmented water.
Thus, the Court found no legal basis for grafting an anti-speculation threshold onto augmentation-plan review.

Impact

This decision clarifies that:

Water courts reviewing amendments to augmentation plans for Denver Basin not-nontributary groundwater will focus exclusively on the risk of injurious effect, rather than on speculative intent.
Landowners and special districts holding decreed not-nontributary rights can secure flexible amendments—e.g., adding new beneficial uses or off-property locations—without a separate anti-speculation showing, provided they demonstrate adequate replacement supplies.
The boundary between water-courts’ injury analysis and the State Engineer’s well-permit review is reinforced: tactical questions about well-construction and beneficial-use intent remain in the SEO’s permitting realm, while augmentation-plan injury issues remain in the water courts.

Future applicants may capitalize on this ruling by structuring amendments around engineering and hydrologic assurances of no injury, even when actual use patterns remain uncertain.

Complex Concepts Simplified

Prior Appropriation System: Colorado’s “first in time, first in right” doctrine allocating water by seniority of beneficial use, enforced by water courts to protect existing rights.
Nontributary vs. Not-Nontributary Groundwater:
- Nontributary groundwater (throughout Colorado) does not deplete any stream by more than 0.1% per year and is allocated on a land-ownership basis, not by prior appropriation.
- Not-nontributary groundwater (in the Denver Basin) does deplete streams above that threshold but is nevertheless managed like nontributary groundwater—i.e., by landowner rights—so long as users provide augmentation.
Augmentation Plan: A court-approved program under § 37-92-103(9) and § 37-92-305 that allows out-of-priority diversions of already-appropriated water in exchange for guaranteed replacement of depletions, thus avoiding injury to senior rights.
Anti-Speculation Doctrine: A common-law and statutory rule, codified at § 37-92-103(3)(a), forbidding applicants for new or changed water rights from claiming rights without a concrete plan to use them beneficially, thereby blocking market-driven hoarding or resale of unused water rights.

Conclusion

The Colorado Supreme Court’s decision in 2025 CO 5 establishes that when a Denver Basin landowner seeks to amend a judicially decreed augmentation plan for not-nontributary groundwater, the water court’s review is confined to the question whether the amended plan will cause injury to other water rights. The anti-speculation doctrine—designed to police speculative new appropriations—does not intrude on augmentation-plan amendments, whose statutory purpose is to enable out-of-priority use so long as replacement water safeguards existing rights. This delineation of functions preserves both the flexibility of augmentation plans and the integrity of the prior appropriation system.