## Facts

- Black Canyon of the Gunnison was reserved as a national monument in 1933 (later a national park), giving rise to federal reserved water rights with a 1933 priority date to secure flows needed for park purposes.
- Upstream dams and reservoirs altered the Gunnison River’s natural flow regime.
- In Colorado water court, the United States obtained a decree recognizing a combination of conditional and absolute rights for direct flow, storage, and instream flow, with an expectation that conditional rights would later be finally quantified.
- In 2001, the United States sought to quantify the Black Canyon reserved right as a year-round base instream flow plus higher seasonal “peak” and “shoulder” flows, all with the 1933 priority date; hundreds of parties opposed.
- In 2003, DOI/NPS and Colorado’s Colorado Water Conservation Board (CWCB) executed two settlement agreements (April and July Agreements).
- Under the agreements, NPS relinquished its claimed 1933-priority peak and shoulder flows and retained only a reduced 1933-priority base instream flow.
- The agreements provided for additional instream-flow rights to be held/managed by CWCB with later priority dates, with Colorado taking primary responsibility for managing those flows.
- Environmental organizations sued under the APA, alleging (among other claims) that entering the agreements required NEPA review, unlawfully delegated federal responsibilities, and disposed of valuable federal property without congressional authorization.

## Issues

1. Whether entering the April and July Agreements was a “major Federal action” requiring NEPA analysis before execution.
2. Whether the agreements unlawfully delegated federal duties to protect national park resources and manage reserved water rights to Colorado entities.
3. Whether relinquishing components of a 1933-priority reserved water right constituted an unauthorized disposal of federal property absent congressional authorization.
4. Whether DOI/NPS violated statutory duties (including under the National Park Service Organic Act and park-specific legislation) to conserve park resources unimpaired for future generations.
5. Whether plaintiffs had standing and whether the challenge was ripe and reviewable as “final agency action” under the APA.

## Decision

- The court denied the federal defendants’ motion to dismiss, finding the dispute justiciable and reviewable under the APA.
- The court granted plaintiffs’ motion to set aside agency action and set aside DOI/NPS entry into the April and July Agreements.
- The court held NEPA applied because the settlement materially altered the quantity, timing, and priority of water dedicated to the park and had significant environmental consequences; the agencies violated NEPA by completing no EA or EIS before committing to the settlement.
- The court held the agreements unlawfully shifted effective control over flows necessary for park protection to state entities, inconsistent with federal statutory responsibilities.
- The court held the relinquishment of senior components of the reserved right functioned as a disposal of federal property beyond the agencies’ authority without congressional approval.
- The court held the settlement was inconsistent with NPS’s statutory conservation mandate and was unlawful under the APA.

## Legal Principles

- Agency execution of a settlement that materially changes environmental conditions can constitute “major Federal action” requiring NEPA review before the agency makes an irreversible commitment.
- A settlement agreement may be “final agency action” when it fixes the agency’s position and has immediate legal consequences, even if related proceedings continue elsewhere.
- Federal land-management statutes imposing affirmative conservation duties can limit an agency’s discretion to compromise resource-protection tools essential to fulfilling park purposes.
- Federal agencies may not relinquish or dispose of valuable federal property interests absent congressional authorization.
- Under the APA, courts must set aside agency action that is not in accordance with law, exceeds statutory authority, or is arbitrary and capricious.

## Conclusion

The district court set aside DOI/NPS’s 2003 water-rights settlement for Black Canyon because the agencies committed to a reduced reserved right without NEPA review, impermissibly ceded control over key flows to the state, exceeded their authority by relinquishing a valuable senior water interest without congressional authorization, and acted inconsistently with NPS’s statutory duty to protect park resources unimpaired.


High Country Citizens’ Alliance v. Norton, 448 F. Supp. 2d 1235 (D. Colo. 2006)