Ski Resorts Say Uncle Sam Stole Their Water

DENVER (CN) - The National Ski Areas Association claims the U.S. Forest Service illegally seized privately owned water rights without compensation from 121 resorts on federal lands, via a "stunning and unprecedented directive."

U.S. ski resorts generated $2.6 billion in revenue in 2009, according to IbisWorld, a market research group.

In its federal complaint, National Ski Areas Association says the Forest Service and Department of Agriculture have no authority to demand water rights that resorts must acquire under state laws "at great expense and effort."

The Lakewood, Colo.-based trade association, established in 1962 "to foster, stimulate and promote growth in the industry," represents 321 resorts, which account for more than 90 percent of annual ski and snowboard visits nationwide. Of its members, 121 must periodically obtain special use permits to operate on National Forest System lands, according to the organization's website.

The Forest Service directive, issued in 2011, added a 7-page clause - Clause D-30 - to its handbook and "dramatically alters the settled legal regime governing water rights at ski areas on National Forest System lands," according to the complaint.

The directive forces ski area permit holders to assign permanently or quit claim to privately owned water rights without payment; prohibits resort operators from selling their water rights to anyone except a future resort operator; and significantly reduces the economic value of water rights that the owners acquire, the association says.

It also forces permit holders to grant the Forest Service power of attorney so that the agency can execute documents to seize, control, and transfer the permit holders' water rights, and requires permit holders to waive any legal claim for compensation from Uncle Sam.

The directive, the nonprofit ski association says, was adopted without public notice and violates the Administrative Procedures Act, the National Forest Management Act and the 5th Amendment.

"No legislation authorizes the Forest Service to use its ski area special use permit authority to exercise dominion and control over water rights arising under state law," the association says.

Special use permits, generally issued for 40-year terms, terminate automatically upon a change in resort ownership.

Winter Park Resort and Steamboat Ski Resort in Colorado, Brighton Ski Resort in Utah, Sierra-at-Tahoe Snowsports Resort in California and others will be hurt by the directive, the complaint states.

"[T]he Forest Service may purchase water rights from their owner if the Forest Service wants to obtain them for use on National Forest Systems lands," the association says.

This winter, lack of snowfall has forced resorts across the county to rely heavily on what they are able to produce.

The association seeks a nationwide injunction to enjoin the Forest Service's application of the directive.

It is represented by Exekiel Williams with Ducker, Montgomery, Lewis & Bess.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit