A skier last year carves up a slope in Aspen. The Lakewood-based National Ski Areas Association calls the U.S. Forest Service’s new
A skier last year carves up a slope in Aspen. The Lakewood-based National Ski Areas Association calls the U.S. Forest Service's new permitting condition a federal takeover of private property that ski areas acquired legally through state water courts. (Provided by Colorado Ski Country USA)

Ski-area operators and their federal landlord faced off in federal court Thursday, arguing over ownership of the resorts' rights to water they use for snowmaking and other purposes.

Last year the Forest Service introduced a new rule in its ski-area permitting process that required ski areas to transfer some water rights to the federal government, arguing the water should stay connected to the publicly owned land. The Lakewood-based National Ski Areas Association — or NSAA — sued, calling the new permitting condition a federal takeover of private property that ski areas acquired legally through state water courts.

On Thursday, U.S. District Judge William Martinez entertained oral arguments from both sides in a case that could decide the fate of hundreds of millions of dollars worth of ski-area water rights.

Citing 140 years of federal laws and court decisions, NSAA lawyer Zeke Williams argued the agency overstepped its authority with the new directive, which he called a "sea change in agency law."

"The agency can point to no statute that authorizes it to condition use and occupancy permits on the permit holder assigning to the Forest Service property that is not federal property," Williams said.

The Forest Service says it changed the law to prevent ski areas from selling water rights connected to federal land.

"The worry here is that a permittee could cease using the area for permitted purposes and move the water somewhere else," said Department of Justice attorney Clay Samford.

Samford said ski areas regularly buy water rights and could be swayed to sell them if the price is right.

"It may not make sense now to sell those water rights, but it's a monetary calculation. As the value of these rights increases, it may make economic sense for ski areas to sell some rights off," Samford said.

Martinez appeared unsure.

"Why would a ski area sell off water rights and leave itself with insufficient water to operate a ski area?" he said. "Then you are not a ski area anymore."

Williams argued that the Forest Service rule was a "draconian and punitive solution to a hypothetical problem."

"Where are the examples of ski areas severing the water rights that they themselves acquired at great effort and expense?" he said. "It defies common sense that ski areas would cut their own throats by taking away their own water, yet that is the rationale identified by the Forest Service."

Williams on Thursday argued that the agency violated the Federal Administrative Procedural Act by not offering legal support for the rule and not soliciting public input on the new rule.

"The agency never asked for comments from the public, it never responded to comments, it never explained the rule it actually adopted," Williams said.

The Forest Service said the rule is simply a continuation of long-held water policy pre-dating a 2004 adjustment that had ski areas and the government sharing water rights.

"In the history of this policy, it is very clear that we are not deviating from the overall history of the policy," Samford said. "If you have a federal permit on federal land and you want water rights in service of that permit you need to claim them in the name of the United States."

The NSAA is asking the judge to vacate the 2012 directive so it has no legal impact. Martinez in October 2011 ordered the U.S. Department of Energy to stop permitting uranium mining and milling at 31 leased sites in western Colorado, ruling the agency failed to properly examine environmental and human impacts when it issued leases for 31 tracts to uranium companies in 2008.

Jason Blevins: 303-954-1374, jblevins@denverpost.com or twitter.com/jasontblevins