U.S. v. Alpine Land & Reservoir Co.

• Decision Date: 07 July 1989
• Docket Number: 87-1747,Nos. 87-1746,s. 87-1746
• Parties: UNITED STATES of America, Plaintiff, v. ALPINE LAND & RESERVOIR COMPANY, a corporation, Defendant, Pyramid Lake Paiute Tribe of Indians, Applicant-Appellant/Cross-Applicant-Appellee, Truckee-Carson Irrigation District; Water Right Transfer Applicants, Applicants-Appellees/Cross-Applicants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1217

878 F.2d 1217

UNITED STATES of America, Plaintiff, v. ALPINE LAND & RESERVOIR COMPANY, a corporation, Defendant,

Pyramid Lake Paiute Tribe of Indians,

Applicant-Appellant/Cross-Applicant-Appellee,

Truckee-Carson Irrigation District; Water Right Transfer

Applicants,

Applicants-Appellees/Cross-Applicants-Appellants.

Nos. 87-1746, 87-1747.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 15, 1988.

Decided July 7, 1989.

Robert S. Pelcyger, Fredericks & Pelcyger, Boulder, Colo., for defendant-appellant.

Frederick G. Girard, Kronick, Moskovitz, Tiedemann & Girard, Sacramento, Cal., for defendant-appellee.

Fred R. Disheroon, Atty., Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the District of Nevada.

Before HALL, KOZINSKI and NOONAN, Circuit Judges.

CYNTHIA HOLCOMB HALL, Circuit Judge:

The Pyramid Lake Paiute Tribe of Indians (the Tribe) appeals the district court's decision to uphold the Nevada State Engineer's (the Engineer) approval of 129 applications for the transfer of water rights within the Newlands Reclamation Project in Nevada (the Project). The applications seek the transfer of water rights from Project properties that generally are not under irrigation to properties lacking water rights but which long have been irrigated with Project water. The Tribe's central contention on appeal is that the transferor properties have abandoned or forfeited their water rights under Nevada law. The district court held, however, that Nevada law was inapplicable to the validity of these transfer applications, and, alternatively, that the issues of forfeiture or abandonment were raised improperly before the Engineer.

We find that the Tribe is precluded in this appeal from challenging the forfeiture or abandonment of water rights for 104 of the subject applications because it failed to protest the transfers before the Engineer on this basis. ¹ For the remaining twenty-five transfer applications, however, we reject the district court's holding that Nevada law is inapplicable and its conclusion that the issues of forfeiture or abandonment were raised improperly before the Engineer. ²

I

Pyramid Lake is the Tribe's aboriginal home. It is a desert lake, and the Truckee River is its only source of water. The Project is supplied with water from both the Truckee River and the Carson River, although only the Carson River flows directly into the Project. Water is diverted from the Truckee River at the Derby Dam, where it flows through the Truckee Canal to the Carson River for Project use.

The Supreme Court has acknowledged that Pyramid Lake is " 'widely considered the most beautiful desert lake in North America [and that its] fishery [has] brought it worldwide fame.' " Nevada v. United States, 463 U.S. 110, 114, 103 S.Ct. 2906, 2910, 77 L.Ed.2d 509 (1983) (quoting S. Wheeler, The Desert Lake 90-92 (1967)). The Court also noted that the first recorded sighting of Pyramid Lake by non-Indians occurred in January 1844 by Captain John C. Fremont. Id. (citing 1 The Expeditions of John Charles Fremont 604-605 (D. Jackson & M. Spence eds. 1970)). Upon discovering Pyramid Lake, Captain Fremont exclaimed that it "broke upon our eyes like the ocean" and was "set like a gem in the mountains." Id.

Two actions of the federal government have had a lasting historical impact on the lake. In 1859, the Department of the Interior set aside nearly half a million acres in Western Nevada as a reservation for the Tribe. In 1874, President Ulysses S. Grant confirmed the withdrawal of this acreage as the Pyramid Lake Indian Reservation. "The Reservation includes Pyramid Lake, the land surrounding it, the lower reaches of the Truckee River, and the bottom land alongside the lower Truckee." Id. at 115, 103 S.Ct. at 2910. Members of the Tribe have always lived on the lake's shores and fished its waters. Pyramid Lake Paiute Tribe of Indians v. Morton, 354 F.Supp. 252, 254 (D.D.C.1973).

Upon the passage of the Reclamation Act of 1902, the Secretary of the Interior (Secretary) withdrew 232,800 acres in western Nevada, which ultimately became the Project. The Project was designed to irrigate a substantial amount of this land with water from the Truckee and Carson Rivers, thereby turning wasteland into farmland. ³

Unfortunately, Pyramid Lake has suffered environmental setbacks as a result of the Project's use of waters from the Truckee River. While the lake was 50 miles long and 12 miles wide when viewed by Captain Fremont, by 1983 the lake's surface area had decreased by about 31 square miles. Nevada v. United States, 463 U.S. at 115, 103 S.Ct. at 2910. This decrease in surface area drove the fish indigenous to the lake, the Lahontan cutthroat trout and the cui-ui sucker, to near extinction. The greatly decreased water acreage caused a delta to form near the mouth of the Truckee River that prevented the fish from reaching their spawning grounds in the river. ⁴

II

The parties to this litigation or their predecessors in interest have been before courts and other adjudicative bodies since 1913 in an attempt to settle the water rights dispute between the Tribe and the Project landowners. In that year, the United States initiated what became known as the Orr Ditch ⁵ litigation in an attempt to settle the competing claims to the waters of Truckee River. The Orr Ditch district court entered a final decree in 1944, but that litigation was not ultimately put to rest until the Supreme Court rejected a collateral attack by the United States in the Nevada v. United States case.

The United States initiated a separate litigation to adjudicate claims to the waters of the Carson River, which concluded with the entry of a final decree in 1980. See United States v. Alpine Land & Reservation Co., 503 F.Supp. 877 (D.Nev.1980), substantially aff'd, 697 F.2d 851 (9th Cir.), cert. denied, 464 U.S. 863, 104 S.Ct. 193, 78 L.Ed.2d 170 (1983). The Alpine decree also established the scheme for transferring all water rights within the Project. The transfer applications in this case are the first ones to have been filed with the Engineer pursuant to the Alpine decree.

The Alpine and Orr Ditch decrees established the water duties that particular types of properties are entitled to receive. A water duty is the maximum amount of water that a property is entitled to receive from the Project, expressed in terms of acre feet per acre (afa). Properties classified as bench lands are entitled to receive 4.5 afa, while bottom land properties are entitled to 3.5 afa. ⁶

The governing decrees resulting from these proceedings deal with the Project as a whole. While these previous proceedings have settled many issues, they have not determined whether the particular Project properties involved in this case are entitled to receive Project water. The rights of particular properties to receive Project water are based on contracts and certificates issued by either the Secretary or the Truckee-Carson Irrigation District (TCID). ⁷

Some Project properties are presently under irrigation although they are not entitled to receive Project water by contract or certificate. Indeed, most of the properties in this case to which appellees seek to transfer water rights are examples of these improperly irrigated properties. The Tribe contends that appellees' proposed transfers of water rights to these heretofore improperly irrigated properties violate various aspects of Nevada law. The result of nullifying these proposed transfers, according to the Tribe, is that the Project's net consumption of water from the Truckee River will decrease, thereby increasing the water flowing onwards to Pyramid Lake. Given this perspective, the transfer applications involved in this case are not merely footnotes to this ongoing water rights dispute; they raise significant legal issues not previously settled by the courts.

III

The Alpine decree provides that "[a]pplications for changes in the place of diversion, place of use or manner of use as to Nevada shall be directed to the State Engineer." Pursuant to this arrangement, appellees filed three different groups of applications to change the place of use of water rights within the Project. The first group consisted of fifty-eight applications, the second of fourty-four, and the third of twenty-seven. A single application may seek to transfer water rights from several, or even a couple dozen, properties. In other words, an application may combine the water rights held by many small properties and transfer them to a single site.

The Tribe filed timely protests under the terms of the governing decrees and Nevada law. ⁸ Nev.Rev.Stat. Sec. 533.365 provides that an interested party may file a protest to a proposed water rights transfer before the Engineer. The Tribe objected to the first two groups of transfers on a variety of grounds; namely, that the transfers threatened to conflict with and impair the Tribe's existing water rights, that they threatened to detrimentally affect the public interest, and that they would increase the net consumptive use of water by the Project. ⁹ The Tribe asserted that it has a "reserved right" to the waters of the Truckee River that are not subject to bona fide claims by Project landowners.

The Tribe protested the third group of applications on the same grounds, and in addition, twenty-five out of twenty-seven applications on a variety of additional grounds. For the first time, the Tribe alleged that the transferor landowners had failed to perfect, abandoned, or forfeited their water rights under Nevada law. Furthermore, the Tribe argued that the records maintained by TCID did not accurately reflect the true state of Project water rights. The Tribe also argued that the proposed transfers were invalid because it was not impracticable to use the water rights on the transferor properties, and because the transferee properties had been improperly...