City of Mesa v. Salt River Project Agr. Imp. and Power Dist.

• Decision Date: 01 July 1966
• Docket Number: No. 8200,8200
• Citation: 416 P.2d 187,101 Ariz. 74
• Parties: CITY OF MESA, a municipal corporation, Appellant, v. SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district, Appellee.
• Court: Arizona Supreme Court

Page 187

416 P.2d 187

101 Ariz. 74

CITY OF MESA, a municipal corporation, Appellant, v. SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district, Appellee.

No. 8200.

Supreme Court of Arizona, In Banc.

July 1, 1966.

Rehearing Denied Sept. 20, 1966.

J. LaMar Shelley, Mesa, for appellant.

Jennings, Strouss, Salmon & Trask, Irving A. Jennings, Phoenix, for appellee.

Ramsey Clark, Asst. Atty. Gen., Charles A. Muecke, U.S. Atty., Arthur E. Ross, Asst. U.S. Atty., Phoenix, Roger P. Marquis, Atty., Dept. of Justice, Washington D.C., amici curiae United States of America.

McFARLAND, Justice.

The City of Mesa, a municipal corporation, the appellant--hereinafter designated the plaintiff--brought an action in eminent domain to condemn a portion of the electrical plant and system of the Salt River Project Agricultural Improvement and Power District, an agricultural improvement district--hereinafter designated the defendant--located at the Bayless Shopping Center on East Main Street in Mesa, Arizona.

Defendant filed a motion to dismiss the action on the ground that the United States of America is an indispensable party to the action, and therefore the court lacks jurisdiction. The United States of America filed an amicus curiae brief claiming the United States government was an indispensable party to the suit in that the property sought to be condemned is an integral part of an important vital federal reclamation project.

The lower court entered the following judgment October 15, 1963:

'It is the opinion of this Court that the U.S. of America is an indispensable party in this action, and that therefore this Court lacks jurisdiction over the action.

'IT IS HEREBY ORDERED that the Complaint herein be dismissed and that each party shall bear their own costs.'

From this judgment plaintiff appealed.

In City of Mesa v. Salt River Project Agricultural Improvement and Power District, 92 Ariz. 91, 373 P.2d 722, plaintiff brought an action against defendant for a declaratory judgment to determine the respective rights of the parties to serve electrical energy in certain areas within its corporate limits, including the Bayless Shopping Center. It is the contention of plaintiff that in this decision this court gave plaintiff the right to condemn the property involved in this action.

This court has had occasion to set forth the history of the Salt River Valley Project and the Salt River Valley Project Agricultural Improvement and Power District in other cases ¹, the latest being Uhlmann v. Wren, 97 Ariz. 366, 401 P.2d 113. A large portion of the Salt River Valley was irrigated and cultivated in prehistoric times, but had been largely abandoned when white settlers began to arrive about 1867. Adjacent to what is now the Salt River Project were found the Mohave, Apache, Pima, and Maricopa Indians. While their reservations covered many thousands of acres, the irrigated lands consisted of only 4,713 acres, which lay along and close to the Salt and Verde Rivers.

When the white settlers came, they found it desirable and necessary to form canal companies. They soon found, however, that the flow of the river varied, and that during the years of drought the supply of water at low-river stages was inadequate for the land they had placed in cultivation. Maintenance of the brush and rock diversion dams became a problem, for such dams were often washed out at the beginning of the flood. It was soon determined that a permanent dam, or dams, and a canal system were needed. Private capital was not available, so, in order to accomplish their objectives, when the Reclamation Act of June 17, 1902, 32 Statute 388, known as the Reclamation Act, now codified as 43 U.S.C.A. § 371 et seq., became effective, application was made for a federal reclamation project under the Act. ²

The Salt River Valley Water Users Association was incorporated under the laws of Arizona February 9, 1903, and a written agreement for the construction of the Project was entered into on June 25, 1904, between the Association and the United States of America. Title to Project property, under the authority of the Reclamation Act was retained in the United States government. The agreement was signed by the Secretary of the Interior on behalf of the United States, and by the Association president and secretary on behalf of the Association. This agreement resulted in the construction of what is now known as the Theodore Roosevelt Dam, and the Project soon expanded to include the construction of the canal system and the power facilities. By 1907 the United States had purchased the various canals and acquired the distribution system in the Valley. In 1910 a contract was entered into between the Association and the United States for the construction of certain additional canals and electric power plants, the immediate cost to be borne by the Association.

During the entire period prior to 1917 the Project was under the operation and control of the United States Reclamation Service. Although the Roosevelt Dam had not been actually completed until 1911, the first distribution of water stored behind the same was made in 1910.

On September 6, 1917, the Association made a supplemental contract with the United States (by the Secretary of the Interior), in which the United States turned over to the Association the care, operation, and maintenance of the Salt River Project. This included power plants, power houses, and transmission lines as well as all of the irrigation facilities.

In 1937 the Association, by agreement, transferred--subject to the rights of the United States of America--to the District all of its properties, including all water and power rights, franchises and privileges. The agreement recited the various contracts and obligations thereunder between the Association and the United States government in regard to the construction, operation, and maintenance of the Salt River Project, in which the District assumed the obligations thereunder. This contract was approved by the Secretary of the Interior, subject to all of the provisions of the contracts between the United States and the Association in existence as of the date of its approval, and the Salt River Project Agricultural Improvement and Power District expressly stated approval was made without waiver, modification, or abridgment of any of the terms or provisions of the contracts in existence at the time. Approval further provided that any remedy available to the United States against the Association by virtue of any contracts mentioned would be enforceable against the District. ³

Both defendant and the United States, in their briefs, contend that the United States government is the owner of the project facilities sought to be condemned, and the United States of America is an indispensable party to this action.

In the case of Carr v. United States, 98 U.S. 433, 25 L.Ed. 209, the court held:

'* * * We consider it to be a fundamental principle that the Government cannot be sued except by its own consent; and certainly no State can pass a law which would have any validity, for making the Government suable in its courts. * * *' 98 U.S. at 437, 25 L.Ed. at 211.

It has been held to be elemental that the United States government is an indispensable party in an action against property in which the United States has an interest.

This principle of law was well set forth in the case of Public Utility District No. 1 of Pend Oreille County v. Inland Power & Light Company, 64 Wash.2d 122, 390 P.2d 690, and supporting authorities. We do not deem it necessary to add to the decisions cited therein. The property sought to be condemned was all of the electrical works, lines, plants, facilities, and electrical properties owned and operated by the Inland Power & Light Company, which, being a non-profit membership corporation organized under the laws of the State of Washington, was financed in its operation by the Rural Electrification Administration, an agency of the United States Department of Agriculture. The questions presented in Inland Power & Light Company, supra, are the same as in the instant case--that is, did the court lack jurisdiction for the reason that the United States government was an indispensable party to the action? The court held:

'It is elemental that an action against property in which the United States has an interest is a suit against the United States. In United v. Brosnan, 363 U.S. 237, 250, 80 S.Ct. 1108, 4 L.Ed.2d 1192 (1960), the court said:

"* * * Under the decisions of this Court, a judicial proceeding against property in which the Government has an interest is a suit against the United States which cannot be maintained without its consent. The Siren, 7 Wall. 152, 19 L.Ed. 129; State of Minnesota v. United States, 305 U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235; United States v. State of Alabama, 313 U.S. 274, 61 S.Ct. 1011, 85 L.Ed. 1327. It has been suggested that this principle applies only where the Government holds a fee interest or such other interest in the property as to render it an indispensable party under state law. See United States v. Cless, 3 Cir., 254 F.2d 590, 592. That, however, seems a dubious distinction since whether or not the United States is an indispensable party to a judicial proceeding cannot depend on state law. See State of Minnesota v. United States, supra, 305 U.S. at page 386, 59 S.Ct. at page 294, 83 L.Ed. 235.'

'It is urged that the United States (being fully aware of what is happening, it having appeared as amicus curiae in this court) may make an appearance in the condemnation proceeding at any stage it wishes.

'The rule of law is to the contrary.

"* * * Where jurisdiction has not been conferred by Congress, no officer of the United States has power to give to any court jurisdiction of a suit against the United States. Compare Case v. Terrell, 11 Wall. 199, 202, 20 L.Ed. 134; Carr v. United States, 98 U.S. 433, 435--439,...