Save the Colorado v. Graham Jr.

Nos. 25-1137, 25-1231 & 25-1299. 9/15/2026. D.Colo. Judge Tymkovich. Municipal Water Utility—Army Corps of Engineers—Section 404(b) Permit—Clean Water Act—National Environmental Protection Act—Remedies—Constitutional Mootness—Administrative Procedure Act—Deference to Agency Decisions—Arbitrary and Capricious Standard.

September 15, 2026

Denver Water is a municipal water utility with infrastructure comprising two nonconnected delivery systems: the North System (the Moffat System) and the South System. The Moffat System serves 10% of Denver Water’s customers and the South System serves 90%. In 2002, based on a consulting group’s report that predicted a water shortage by 2016, Denver Water proposed the Moffat Collection System Project to increase the holding capacity of the Gross Reservoir by raising the height of the Gross Dam. Denver Water’s project has two underlying purposes—to increase water supply and to correct its overreliance on its South System. In 2003, because the proposal would affect wetlands at the base of the dam structure, Denver Water applied for the required wetlands permit under 33 USC § 1344(b), known as a § 404(b) permit (the permit), from the Army Corps of Engineers (the Corps). The Corps engaged in an extensive multistep analysis, explaining its decision at each step. Throughout the process, various environmental groups (collectively, petitioners) challenged the Corps’s analysis of the alternatives to Denver Water’s proposed project. The Corps published its Record of Decision (ROD) in 2017, concluding that the environmental impact statement (EIS) satisfied the National Environmental Policy Act (NEPA) and incorporating the EIS’s findings. The ROD also found that Denver Water’s proposed project was the least environmentally damaging practicable alternative (LEDPA). The Corps issued the permit in 2017.

Petitioners sued the Corps in December 2018, and Denver Water intervened a few months later. Petitioners alleged that the Corps violated the Clean Water Act (CWA) by issuing the permit without clearly demonstrating that Denver Water’s proposed project was the LEDPA.Petitioners alleged that the Corps (1) defined the project’s purpose too narrowly, resulting in the exclusion of otherwise practicable alternatives; (2) used a cost methodology that was not particularized to each project; and (3) failed to sufficiently evaluate the effects of climate change on stream flows. Petitioners also similarly alleged NEPA violations, asserting that the Corps acted arbitrarily by (1) defining the EIS’s purpose-and-need statement too narrowly, (2) not accurately estimating project costs, and (3) not conducting a quantitative analysis of climate change’s effects on stream flow. Petitioners sought declaratory and injunctive relief but did not seek a temporary restraining order or other emergency or interim relief. The district court decided for petitioners on the merits but postponed ruling on the remedy. The court’s subsequent first remedy ordered vacatur and remand of the Final EIS, the ROD, and Denver Water’s § 404(b) permit and permanently enjoined “enlargement of the Gross Reservoir, including tree removal, water diversion, and impacts to wildlife.” And because dam construction was partially complete at the time, the court preliminarily enjoined further construction of the dam pending a hearing on what additional construction would be necessary to ensure the dam’s structural integrity. The court’s second remedies order concluded that public safety required Denver Water to finish constructing the dam, so it vacated its preliminary injunction against further dam construction, but it left intact its prior permanent injunction and remand with vacatur. In 2026, Denver Water completed a $600 million construction project that raised the Gross Dam 131 feet; the Reservoir is now able to hold an additional 77,000 acre-feet of water. But Denver Water cannot fill the reservoir because it is enjoined from diverting water to the reservoir. Denver Water appealed from the first remedies order and the court’s final judgment, and the Corps appealed from the final judgment.

On appeal, Denver Water argued that this case is both constitutionally and prudentially moot because the activity that the permit authorizes—discharging fill at the foot of the dam—is complete, so this court lacks power to remedy the environmental groups’ injuries. The Tenth Circuit found that this case is not constitutionally moot because a remand to the Corps could partially remedy petitioners’ injuries were the Corps to impose additional mitigation or other special conditions. The Tenth Circuit did not address prudential mootness because it found that petitioners’ claims fail on the merits, as discussed below.

On the merits, the Corps and Denver Water contended that the district court erred by finding CWA and NEPA violations based on the alleged above deficiencies. Petitioners brought their claims under the Administrative Procedure Act (APA), alleging the Corps’s permit decision was arbitrary and violated the CWA and NEPA. Accordingly, the Tenth Circuit reviewed under the APA’s deferential arbitrary-and-capricious standard. In the context of a CWA claim where, as here, the non-water-dependent presumption applies, the issue is whether it was arbitrary and capricious for the Corps to find that it had clearly shown that Denver Water’s proposed project was the LEDPA. To clearly demonstrate an alternative should be excluded, the Corps is required to only look hard at the proposals to arrive at a meaningful conclusion based on the evidence. In the NEPA context, arbitrary-and-capricious review requires substantial deference to the agency when reviewing for NEPA compliance.

First, as to the project’s purpose, the key § 404(b) regulation here is 40 CFR § 230.10, which allows the permit to issue only if the proposed action is the LEDPA. Petitioners argued that because the Corps defined the Moffat Project’s basic purpose as increasing water supply, it had to define the project’s overall project purposes as increasing water supply and could not define them according to Denver Water’s two underlying purposes of increasing water supply and correcting overreliance on the South System. Section 230.0(a) unambiguously allows the Corps to assess a project’s multiple, related goals, not just the project’s most general purpose. The Tenth Circuit concluded that § 230.10(a)(2) unambiguously permits the Corps to define overall project purposes with more specific reference to the applicant’s multiple, related purposes. Here, the Corps’s definition of the Moffat Project’s overall project purposes rested on a sound interpretation of § 230.10(a)(2). Accordingly, that definition was not arbitrary, capricious, or otherwise contrary to law. Further, deference is owed to the Corps’s determination to address both purposes in a single project, and its explanation for doing so shows that the Corps did not completely fail to consider an important aspect of the problem. And the record shows that the Corps’s definition did not predetermine the alternatives analysis by defining the project to preclude the existence of all other practicable alternatives. The Corps thus did not act arbitrarily or otherwise contrary to law by screening out proposed alternatives that could not increase water supply to the Moffat Treatment Plant.

As to the Corps’s analysis of the alternatives’ costs and climate change’s effects on feasibility, the Corps’s decisions to use a 50% multiplier and not to quantitatively analyze climate change’s effects was rationally based and considered appropriate factors. The Corps adequately considered cost and climate change and sufficiently explained its decision and therefore did not act arbitrarily or capriciously when evaluating the alternatives’ costs and feasibility. Petitioners’ CWA and NEPA challenges therefore fail.

The orders were reversed, the permanent injunction was vacated, and the case was remanded with instructions to enter judgment against petitioners.