Telluride scores water rights in lawsuit with Idarado

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Here’s a recap of District Court Judge James W. Schrum’s decision in the lawsuit between the town of Telluride and Idarado Mining Company, from Karen James writing for the Telluride Watch. From the article:

“We are extremely pleased that we were able to secure the water we need to have,” said Mayor Stu Fraser. “If there was one thing we needed to win it was the water.”[…]

But while the town prevailed on what officials here considered the most important element of the case, it did not win the damages it sought to compensate for higher construction costs resulting from delaying the project while the lawsuit ensued. Instead the Schrum awarded Idarado certain trial costs and damages that the town will be obligated to pay. Neither party was awarded the attorney fees each sought…

The damages the town owes are related to a countersuit filed by Idarado in which it alleged that after authorizing the town to enter its property to replace portions of the pipeline from Blue Lake, the town undertook some unauthorized work and damaged the property in the process. The court awarded Idarado only a portion of the damages it sought, however, and a jury will determine the amount of that award. Geiger declined to speculate on how much it might be stating a desire to not prejudice the potential jury pool.

The genesis of the lawsuit dates to the late 1980s when the town discovered that the Town Park water supply it sought to develop for municipal use had been contaminated with hexavalent chromium by Idarado’s mining operations. In 1992 the parties began discussing the provision of water rights in Bridal Veil Basin to the town by Idarado because of the contamination. Eventually they agreed upon a settlement in which the town would receive water from Blue Lake; however, Idarado retained certain “callback” water rights. The thrust of the lawsuit, heard in Montrose for two weeks beginning on Jan. 5, centered on the extent of those callback rights, and whether or not the mining company also had an interest in the structures and treatment plant that the town planned to build. Idarado maintained that it had an interest in those structures, while the town maintained that it did not. The court sided with Idarado…

Although the voters authorized the financing needed to pay for the project by means of a $10 million bond approved in 2005, the town did not break ground on the project because it worried that Idarado could take back the water rights and leave the town with a treatment plant but nothing to treat, according to Town Manager Frank Bell. Although Idarado has 45 days from the date of the decision to file an appeal, “Our immediate strategy is to move ahead and build the water plant,” said Bell

More Coyote Gulch coverage here.

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