In re In re Gen. Adjudication of All Rights to United Statese Water in the Little Colo. River Sys.

• Decision Date: 12 September 2012
• Docket Number: No. WC–11–0001–IR.,WC–11–0001–IR.
• Citation: 289 P.3d 936,231 Ariz. 8
• Parties: In re GENERAL ADJUDICATION OF ALL RIGHTS TO USE WATER IN THE GILA RIVER SYSTEM AND SOURCE. In re General Adjudication of all Rights to use Water in the Little Colorado River System and Source.
• Court: Arizona Supreme Court

231 Ariz. 8

289 P.3d 936

In re GENERAL ADJUDICATION OF ALL RIGHTS TO USE WATER IN THE GILA RIVER SYSTEM AND SOURCE.

In re General Adjudication of all Rights to use Water in the Little Colorado River System and Source.

No. WC–11–0001–IR.

Supreme Court of Arizona, En Banc.

Sept. 12, 2012.

Thomas C. Horne, Arizona Attorney General By Thomas C. Horne, Attorney General, Theresa M. Craig, Assistant Attorney General, Phoenix, Attorneys for the State of Arizona.

The Sparks Law Firm PC By Joe P. Sparks, Laurel A. Herrmann, Scottsdale, Attorneys for the San Carlos Apache Tribe and Tonto Apache Tribe.

Salmon Lewis & Weldon PLC By M. Byron Lewis, John B. Weldon, Jr., Mark A. McGinnis, Phoenix, Attorneys for Salt River Project Agricultural Improvement and Power District and Salt River Valley Water Users' Association.

Salmon Lewis & Weldon PLC By Paul R. Orme, Phoenix, Attorney for Central Arizona Irrigation and Drainage District and Maricopa–Stanfield Irrigation & Drainage District.

Snell & Wilmer LLP By L. William Staudenmaier, III, Andrew M. Jacobs, Phoenix, Attorneys for Arizona Public Service Company, Freeport—McMoran Corporation, Roosevelt Water Conservation District.

Polsinelli Shughart PC By Lucas J. Narducci, Margaret LaBianca, Phoenix, Attorneys for BHP Copper Inc.

Engelman Berger PC By William H. Anger, Phoenix, Attorney for City of Avondale, City of Chandler, City of Glendale, City of Mesa, City of Scottsdale.

Brown & Brown Law Offices PC By David Albert Brown, Douglas E. Brown, St. Johns Eagar, Attorneys for City of Cottonwood, City of Show Low, Franklin Irrigation District, Aztec Land and Cattle Company Ltd.

Ballard Spahr LLP By Lee A. Storey, Sara V. Ransom, Phoenix, Attorneys for City of Flagstaff.

Gary Verburg, Phoenix City Attorney By Gary Verburg, City Attorney Cynthia S. Campbell, Assistant City Attorney, Daniel L. Brown, Assistant City Attorney, Phoenix, Attorneys for City of Phoenix.

Moyes Sellers & Hendricks By Steven L. Wene, Phoenix, Attorney for City of Safford.

Gila River Indian Community By Linus Everling, Thomas L. Murphy, Sr., Sacaton, Attorneys for Gila River Indian Community.

Fennemore Craig PC By Lauren J. Caster, Gregory Loyd Adams, Phoenix, Attorneys for Asarco LLC and Catalyst Paper (Snowflake) Inc.

Law Office of L. Anthony Fines PC By L. Anthony Fines, Tucson, Attorney for Gila Valley Irrigation District.

Navajo Nation Department of Justice By Stanley M. Pollack, Window Rock, and McElroy Meyer Walker & Condon PC By Scott McElroy, Boulder, CO, Attorneys for Navajo Nation.

Montgomery & Interpreter PLC, By Susan B. Montgomery, Robyn L. Interpreter, Scottsdale, Attorneys for Yavapai–Apache Nation.

United States Department of Justice By Robert G. Dreher, Acting Assistant Attorney General, F. Patrick Barry, Mary Gabrielle Sprague, Washington, DC, Attorneys for United States of America.

Arizona Department of Water Resources By Kenneth C. Slowinski, David S. Johnson, Phoenix, Attorneys for Amicus Arizona Department of Water Resources.

OPINION

PELANDER

, Justice.

¶ 1 The State of Arizona filed an interlocutory appeal from an order issued in the general stream adjudications of the Gila River System and Source and the Little Colorado River System and Source. At issue is whether federal water rights were impliedly reserved on lands granted by the United States government to the State of Arizona to support education and other public institutions (“State Trust Lands”). We accepted review and now affirm the superior court's ruling that there are no implied federal reserved water rights for State Trust Lands.

I. HISTORICAL BACKGROUND

¶ 2 In 1787, the federal government established a policy to support public schools in new territories. See Northwest Ordinance, Act of Aug. 7, 1789, ch. 8, 1 Stat. 50, 51–52 n.(a) (affirming the 1787 Act of the Continental Congress). Congress furthered this policy by granting land from the public domain to new territories and states to be used for educational purposes. See Lassen v. Arizona ex rel. Ariz. Highway Dep't, 385 U.S. 458, 460, 87 S.Ct. 584, 17 L.Ed.2d 515 (1967)

. When Congress established the New Mexico Territory, which included the present State of Arizona, it “reserved for the purpose of being applied to schools” township sections sixteen and thirty-six. Act of Sept. 9, 1850, ch. 49, § 15, 9 Stat. 446, 452 (“Organic Act”). Four years later, Congress “reserved for the establishment of a University” a grant of land equal to two townships. Act of July 22, 1854, ch. 103, § 6, 10 Stat. 308, 309.

¶ 3 Congress gave these land grants to Arizona when it separated the Arizona Territory from the New Mexico Territory. Act of Feb. 24, 1863, ch. 56, 12 Stat. 664, 665. In 1881, Congress provided the Arizona Territory with another grant of seventy-two sections of land, “withdrawn from sale,” to support a university. Act of Feb. 18, 1881, ch. 61, 21 Stat. 326.

¶ 4 In 1910, Congress passed the Arizona–New Mexico Enabling Act (“Enabling Act”), which set forth the requirements for the two territories to become states. Act of June 20, 1910, ch. 310, 36 Stat. 557. The Enabling Act confirmed the prior land grants and also granted sections two and thirty-two in every township to support the common schools. Id. § 24, 36 Stat. at 572. It also provided “bulk” grants consisting of a set number of acres for other specific purposes, including universities; government buildings; prisons; insane asylums; a school for the deaf and blind; normal schools; charitable, penal, and reform institutions; agricultural and mechanical colleges; a school of mines; military institutes; and the payment of certain bonds. Id. § 25, 36 Stat. at 573.

¶ 5 In some instances, the particular sections granted to support common schools (“section-in-place grants”) were no longer available when the townships were finally surveyed because those sections had been settled, reserved for Indian tribes, or otherwise reserved or disposed of under federal law. See Report of the State Land Commission of Arizona 16, 41–42, 67 (1912–1914) [hereinafter Land Comm'n Report ]. To indemnify the state for these preempted sections, Congress appropriated lands of like quantity (“indemnity-in-lieu selections”) and authorized the state to select and receive such lands. Act of Feb. 28, 1891, ch. 384, 26 Stat. 796, 796–97; Act of Feb. 26, 1859, ch. 58, 11 Stat. 385. The state acquired a fee interest in the State Trust Lands upon completion of a survey for section-in-place grants, and upon selection and approval by the Secretary of the Interior (“Secretary”) for the bulk-grant and indemnity-in-lieu selections. Enabling Act, §§ 24, 29, 36 Stat. at 572–74, 575–76; see Andrus v. Utah ( Andrus), 446 U.S. 500, 506–07, 100 S.Ct. 1803, 64 L.Ed.2d 458 (1980)

; Land Comm'n Report at 13–14.

¶ 6 The Enabling Act required Arizona to hold granted lands in trust:

[A]ll lands hereby granted, including those which, having been heretofore granted to the said Territory, are hereby expressly transferred and confirmed to the said State, shall be by the said State held in trust, to be disposed of in whole or in part only in manner as herein provided and for the several objects specified in the respective granting and confirmatory provisions, and that the natural products and money proceeds of any of said lands shall be subject to the same trusts as the lands producing the same.

§ 28, 36 Stat. at 574. The Act set forth lease and sale requirements that may be enforced by the federal government, the state, or any Arizona citizen. Id. § 28, 36 Stat. at 574–75. The state, however, was given exclusive control of the beneficiary schools, colleges, and universities subject to the condition that trust proceeds support only non-sectarian and non-denominational institutions. Id. § 26, 36 Stat. at 573–74.

¶ 7 At statehood, Arizona consented to the terms and conditions of the Enabling Act, Ariz. Const. art. 10, § 1

, art. 20, ¶ 12, and eventually received almost eleven million acres of State Trust Lands for the benefit of public institutions, Lassen, 385 U.S. at 460, 87 S.Ct. 584. Congress expected the grants to produce a fund through sale and use of the lands. Lassen, 385 U.S. at 463, 87 S.Ct. 584.

¶ 8 The state currently manages more than 9.2 million acres of State Trust Lands, with approximately 1.4 million acres in the Little Colorado River Basin and approximately 5.1 million acres in the Gila River Basin. Although adjudication of claims for waters in those two river systems continues, it is well known that “the amount of surface water available [in Arizona] is insufficient to satisfy all needs.” United States v. Superior Court, 144 Ariz. 265, 270, 697 P.2d 658, 663 (1985)

.

II. PROCEDURAL BACKGROUND

¶ 9 These consolidated cases originated in proceedings initiated by water rights claimants who filed with the Arizona State Land Department (ASLD) in the 1970s, under then-existing statutory adjudication procedures. See A.R.S. §§ 45–231

to–245, repealed by 1979 Ariz. Sess. Laws, ch. 139, § 38, eff. Apr. 24, 1979. Much has occurred since then. Now, a single water judge presides over both adjudications. Ariz. Sup.Ct. Order (Jan. 17, 2002); Ariz. Sup.Ct. Order (Dec. 19, 2000). A special master initially conducts hearings and files reports with the court. A.R.S. § 45–257 (2012). To date, more than 14,000 and 82,000 claims have been made in the Little Colorado and Gila River adjudications respectively.^FN1

¶ 10 The State moved for partial summary judgment in the Little Colorado and Gila River adjudications to recognize federal reserved water rights for State Trust Lands.^FN2

After briefing and oral argument, the special master concluded that federal reserved water rights do not apply to such lands. He submitted a report to the superior court, which adopted the master's findings and conclusions that support the court's ruling that the reserved water rights doctrine is inapplicable to State Trust Lands. The court therefore denied the State's motion and granted the other claimants' cross-motions on that ground.

¶ 11 ...