Empire Water & Power Co. v. Cascade Town Co.
205 F. 123 (1913)
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Rule of Law:
Under Colorado's doctrine of prior appropriation, water rights are based on application to a beneficial use, which must be utilitarian and not unnecessarily wasteful; appropriation for purely aesthetic purposes, such as preserving the scenic beauty of a waterfall, is not a valid beneficial use.
Facts:
- The Cascade Town Company (Cascade) owned land in Colorado through which a stream with waterfalls flowed.
- Cascade developed its property into a summer resort town with hotels, cottages, and parks, attracting 12,000 to 15,000 visitors annually.
- The company's business relied on the stream's natural flow for the scenic beauty of the waterfalls, which was a primary attraction.
- Cascade also relied on the mist and spray from the falls to sustain the trees, shrubs, and other vegetation on its grounds.
- The defendants intended to divert water from the stream upstream of Cascade's property for a manufacturing purpose.
- Cascade's predecessors in title received the land via patents from the United States government between 1880 and 1890.
Procedural Posture:
- The Cascade Town Company filed a suit in the trial court seeking an injunction to stop the defendants' planned diversion of water.
- The trial court found in favor of the Cascade Town Company and granted the injunction.
- The defendants, enjoined by the trial court's decree, appealed the decision to the Circuit Court of Appeals.
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Issue:
Does a landowner in Colorado have a right to the continued natural flow of a stream for the purpose of preserving the scenic beauty of its waterfalls and providing moisture to adjacent vegetation, as against an up-stream user who seeks to divert the water for a manufacturing purpose?
Opinions:
Majority - Hook, Circuit Judge
No. A landowner is not entitled to the continued flow of a stream solely for its scenic beauty, as Colorado water law is based on utilitarian, non-wasteful beneficial uses. While maintaining a resort is a beneficial use, and a landowner may utilize a natural application of water like mist from falls, that use must be efficient and not wastefully excessive when compared to customary methods of application. The court reasoned that federal land patents are subject to state water law, and Colorado has firmly rejected common-law riparian rights in favor of the prior appropriation doctrine, which is designed to prevent waste of a scarce resource. The court found that the term 'beneficial use' in the state constitution is adaptable and includes modern recreational purposes like a health resort. However, the core of the state's water law is utility. Therefore, appropriating an entire stream's flow merely to preserve an aesthetic view is inconsistent with this principle. While the moisture from the falls nourishing vegetation could be a valid appropriation, the trial court erred by focusing on the artistic value of the falls instead of determining whether this natural method was an efficient and non-wasteful use of water compared to traditional irrigation.
Analysis:
This decision solidifies the supremacy of the prior appropriation doctrine over common-law riparian rights in arid Western states like Colorado. It establishes the important precedent that 'beneficial use,' while an evolving concept that can include recreation, is fundamentally utilitarian and does not extend to purely aesthetic purposes. The ruling forces courts to scrutinize water use claims for efficiency and wastefulness, particularly those relying on natural processes. This creates a high bar for environmental or aesthetic water claims, prioritizing economic and consumptive uses over in-stream flows for scenic value, a principle that continues to shape water law and environmental policy in the West.
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