Response to Applicants' Joint Motion for Costs and Fees

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On November 15, 2001, the State filed a motion to stay trial pending the Supreme Court's decision in Case No. 01SA252. The Applicants offered to agree to a continuance only if the State would agree to a condition requiring the State to drop all opposition to the Applicants' claims if the State did not "prevail" on appeal. Because this condition would make the status of the State's opposition uncertain if the Court issued a ruling partly in favor of the State, or ruled on only some of the issues appealed, the State could not agree to this acceptance. The State remained very interested in'continuing trial without such a condition. The Applicants refused such a continuance. I was also involved in the settlement negotiations between the parties. These negotiations were initiated on the part of the CWCB, not the Applicants. See December 17, 2001. During these negotiations, CWCB representatives Rod Kuharich, Ted Kowalski, and I proposed possible flow rates as a basis for a settlement. These terms were not a settlement offer, but were conditioned upon final acceptance by the CWCB. informed the Applicants, and the Applicants were aware, that these terms required final approval by the CWCB. Glenn Porzak, as counsel for the Applicants, forwarded to me proposed decrees incorporating the CWCB's proposed flow rates. These decrees, while including the proposed flow rates, also included language the CWCB found objectionable. Such language included provisions defining control, beneficial use, and waste in a manner favorable to future whitewater appropriations, requiring the State engineer to administer the rights based upon existing gauges, characterizing the whitewater course structures as dams, tying the amounts of water claimed to economic benefits, and predicting continued increases in those benefits at higher flow rates. The CWCB was concerned this language would create unacceptable legal precedent for future whitewater boating applications, and would allow the Applicants to return to court at a later time to obtain water rights in excess of those discussed in the settlement. This language was one of the factors that resulted in the State refusing to agree to the proposed decrees.. I also was involved in the discussions regarding stipulated facts between the parties. It is my opinion and belief that Applicants did not make a serious attempt to narrow the factual issues for trial, but rather used the negotiations over stipulated facts in an attempt to obtain admissions from the State regarding contested legal issues. This opinion is based upon the following facts. On or about April 10, 2002, counsel for the Applicants, Fritz Holleman, proposed to the State a limited number of stipulated facts in the above - captioned case. The stipulated facts proposed by Mr. Holleman are attached hereto as Exhibits E and G. These facts were the only stipulated facts proposed to the State by the Applicants. These facts did not contain certain suggestions previously made by the undersigned, such as that the parties agree that the proposed whitewater course has some economic benefit. Moreover, these stipulated facts included "facts" that contained legal conclusions. For example, the Applicants proposed that the State agree that the Applicants had satisfied the elements of the "can and will" requirement of Section 37- 92-305(9)(b), C.R.S. As the Applicants were aware, the "can and will" statute