The Colorado Supreme Court confirmed on Monday that water-related enterprises have the legal authority to exercise the governmental power of eminent domain over private property.

An enterprise is a government-owned business that provides fee-based services. In 1993, lawmakers authorized the creation of “water activity enterprises” to provide a secure water supply for residents. The enterprises may be part of existing water conservancy districts and, among other things, may “exercise the district’s legal authority relating to water activities.“

In response to a challenge from a private property owner in Weld County, the Supreme Court concluded that state law unambiguously allows an enterprise created by a conservancy district to condemn private property for water-related activities.

Lawmakers “expressly granted water conservancy districts the power of eminent domain to take private property when necessary,” wrote Justice Richard L. Gabriel in the May 4 opinion. “Moreover, the General Assembly expressly authorized the governing body of each water activity enterprise to exercise its parent district’s legal authority relating to water activities.”

In 2024, the Northern Integrated Supply Project Water Activity Enterprise sought a court order in Weld County condemning a portion of VIMA Partners, LLC’s property in exchange for compensation. The enterprise is owned by the Northern Colorado Water Conservancy District, or Northern Water.

As described, the purpose of the eminent domain action was to complete “a complex regional water supply and distribution project” to provide 40,000 acre-feet of water each year within Northern Water’s boundaries. VIMA Partners’ property was needed for a pipeline.

District Court Judge Kimberly B. Schutt concluded the NISP Enterprise had the authority to condemn the disputed parcel. She rejected the argument that if anyone had eminent domain power, it was the water district itself, and not the enterprise it owned.

“Northern Water’s Board of Directors controls and directs NISP Enterprise and may exercise its legal authority through NISP Enterprise to accomplish NISP Enterprise’s stated purpose,” Schutt wrote.

VIMA Partners appealed to the Supreme Court, arguing its intervention was necessary to prevent the unlawful taking of property. Several outside entities wrote to the court to warn that VIMA Partners’ argument would hamper the established framework for water-related projects.

“It has long been understood as a practical matter that the development of water resources in Colorado requires transporting water from the natural streambed across the property of others to its place of use,” wrote the Pueblo-based Southeastern Colorado Water Conservancy District. “Knowing this, the General Assembly would not have empowered water activity enterprises to pursue water activities, including delivery and distribution of water, while simultaneously depriving enterprises of the authority to obtain rights-of-way by which they may actually develop such distribution systems.”

Although VIMA Partners argued that the legislature needed to be explicit if it intended to give enterprises the authority to take private property, the Supreme Court concluded that the legislature had explicitly done so.

“Because NISP Enterprise is a water activity enterprise and its parent district is Northern Water,” wrote Gabriel, the law “allows NISP Enterprise to exercise Northern Water’s legal authority, including the power of eminent domain, provided that this authority is exercised in relation to ‘water activities.'”

He added that the pipeline in question is related to water activities.

The case is Northern Integrated Supply Project Water Activity Enterprise v. VIMA Partners, LLC et al.