U.S. v. Pend Oreille Public Utility Dist. No. 1, s. 88-3617

• Decision Date: 14 July 1994
• Docket Number: Nos. 88-3617,s. 88-3617
• Citation: 28 F.3d 1544
• Parties: , 24 Envtl. L. Rep. 21,275 UNITED STATES of America, as trustee for the Kalispel Indian Tribe and individual allottees, Plaintiff-Appellee, and Kalispel Indian Tribe, Intervening-Plaintiff, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal corp., Defendant, and Department of Natural Resources, State of Washington, Defendant-Intervenor-Appellant. UNITED STATES of America, as trustee for the Kalispel Indian Tribe and individual allottees, Plaintiff-Appellee, and Kalispel Indian Tribe, Intervening-Plaintiff, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal corp., Defendant-Appellant, and Department of Natural Resources, State of Washington, Defendant-Intervenor. UNITED STATES of America, as trustee for the Kalispel Indian Tribe and individual allottees, Plaintiff-Appellant, and Kalispel Indian Tribe, Intervening-Plaintiff, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal corp., Defendant-Appellee, and Department of Natural Resources, State of Washington, Defendant-Intervenor. UNITED STATES of America, as trustee for the Kalispel Indian Tribe and individual allottees, Plaintiff, and Kalispel Indian Tribe, Intervening Plaintiff-Appellant, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal corp., Defendant-Appellee, and Department of Natural Resources, State of Washington, Defendant-Intervenor-Appellee. UNITED STATES of America, Plaintiff, and Kalispel Indian Tribe, Plaintiff-Intervenor-Appellant, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal corp., Defendant-Appellee, and Department of Natural Resources, State of Washington, Defendant-Intervenor-Appellee. through 88-3619, 88-3669, 92-35504.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1544

28 F.3d 1544

29 Fed.R.Serv.3d 733, 24 Envtl. L. Rep. 21,275

UNITED STATES of America, as trustee for the Kalispel Indian

Tribe and individual allottees, Plaintiff-Appellee, and Kalispel Indian Tribe, Intervening-Plaintiff, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal

corp., Defendant,

and

Department of Natural Resources, State of Washington,

Defendant-Intervenor-Appellant.

UNITED STATES of America, as trustee for the Kalispel Indian

Tribe and individual allottees, Plaintiff-Appellee, and Kalispel Indian Tribe, Intervening-Plaintiff, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal

corp., Defendant-Appellant,

and

Department of Natural Resources, State of Washington,

Defendant-Intervenor.

UNITED STATES of America, as trustee for the Kalispel Indian

Tribe and individual allottees, Plaintiff-Appellant, and Kalispel Indian Tribe, Intervening-Plaintiff, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal

corp., Defendant-Appellee,

and

Department of Natural Resources, State of Washington,

Defendant-Intervenor.

UNITED STATES of America, as trustee for the Kalispel Indian

Tribe and individual allottees, Plaintiff, and Kalispel Indian Tribe, Intervening Plaintiff-Appellant, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal

corp., Defendant-Appellee,

and

Department of Natural Resources, State of Washington,

Defendant-Intervenor-Appellee.

UNITED STATES of America, Plaintiff, and Kalispel Indian Tribe, Plaintiff-Intervenor-Appellant, v. PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal

corp., Defendant-Appellee,

and

Department of Natural Resources, State of Washington,

Defendant-Intervenor-Appellee.

Nos. 88-3617 through 88-3619, 88-3669, 92-35504.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 12, 1993.

Decided July 14, 1994.

Elizabeth Ann Peterson, U.S. Dept. of Justice, Washington, DC, for plaintiff-appellee-appellant.

Allen H. Sanders, Evergreen Legal Services, Seattle, WA, for plaintiff-intervenor-appellant.

Jerry K. Boyd, Spokane, WA, for defendant-appellant-appellee.

J. Lawrence Coniff, Asst. Atty. Gen., Olympia, WA, for defendant-intervenor-appellant-appellee.

Appeals from the United States District Court for the Eastern District of Washington.

Before: BROWNING, SCHROEDER, and FLETCHER, Circuit Judges.

JAMES R. BROWNING, Circuit Judge:

This is the second opinion of this court dealing with issues arising out of a judgment entered by the district court in an action brought by the United States on behalf of the Kalispel Indians against the Public Utility District No. 1 of Pend Oreille County, Washington. The Federal Power Commission issued a license to the Utility to build and operate the Box Canyon Dam on the Pend Oreille River, which forms the western boundary of the Kalispel Indian Reservation in northeastern Washington. ¹ The United States filed suit alleging the Utility had flooded Reservation land and seeking damages and injunctive relief. The Kalispel Indian Tribe and the State of Washington intervened. The Tribe joined the trespass claims advanced by the United States on its behalf. Both the Tribe and the State claimed title to the riverbed.

The district court divided the trial into three phases. In the first two phases, the court considered whether the Utility had flooded Reservation land and whether the Tribe or the State owned the bed of the river. In our first opinion, reported at 926 F.2d 1502, we sustained the district court's holdings that the Utility had trespassed upon the Reservation by raising the level of the river and that the State, rather than the Tribe, owned the bed of the river.

In the final phase of the trial, the district court considered the remedy for the Utility's trespass. On this appeal, the Utility repeats its contention that the district court erred in concluding the Utility had trespassed on Reservation land. The Utility also contends the court erred in dismissing its counterclaim in condemnation against the United States and the Tribe, refusing to grant declaratory relief regarding the calculation of future damages, and awarding prejudgment interest on the damage award. The Tribe and the United States argue the district court erred in failing to include the value of the land as part of the power project in determining the amount of damages, refusing to grant injunctive relief, and denying the Tribe leave to amend its complaint to allege a claim for water and fishing rights.

We adhere to our determination that the Utility trespassed on the Tribe's lands; we affirm the denial of the Utility's motion for declaratory relief and the Tribe's motion to amend its complaint; and we reverse the damage and prejudgment interest awards and the denial of injunctive relief.

I. LIABILITY FOR TRESPASS

The Utility argues there was no trespass because Article 33 of the project license authorizes the Utility to flood Reservation land and compensate the Tribe at the rate the Utility pays private land owners--the rental value of the land as grazing land. It is too late for the Utility to challenge the existence of a trespass. That question was resolved against its position by the district court, and we affirmed the district court's conclusion in our first opinion. During phase three of the trial, the district court found the Utility knew it had no right to flood Reservation land, but flooded it anyway, a finding supported by substantial evidence. ²

In any event, the Utility's interpretation of Article 33 is without merit. The language of Article 33 neither authorizes the Utility to flood Reservation land, nor specifies the amount of damages the Utility would owe the Kalispel Indians if it did. The first clause requires the Utility to operate the Dam in such "a manner as not to interfere with or damage Indian land of the [K]alispel Indian Reservation." ³ The second clause provides an administrative procedure for compensating the Indians if the Utility breaches the prohibition against flooding Reservation land: "[I]n the case such damage should occur as a result of the operation of the project, the Indians shall be compensated in the manner and amount as determined by the Secretary, after consultation with the [K]alispel Indian Community Council and Licensee." Nothing indicates creation of this administrative remedy was intended to affect the rights of the Tribe and the United States if they choose instead to file a trespass action in federal court, as they did.

If read as the Utility suggests, Article 33 would authorize the taking of Reservation land by inverse condemnation in violation of federal law and the use of such land in a manner contrary to the provisions of the Federal Power Act. The Utility may not condemn tribal lands embraced in a reservation under the Power Act or any other federal statute, Escondido Mut. Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765, 786 n. 29, 104 S.Ct. 2105, 2117 n. 29, 80 L.Ed.2d 753 (1984); FPC v. Tuscarora Indian Nation, 362 U.S. 99, 113-14, 80 S.Ct. 543, 551-52, 4 L.Ed.2d 584 (1960), and may not take the land of individual Indian allottees through inverse condemnation, United States v. Clarke, 445 U.S. 253, 100 S.Ct. 1127, 63 L.Ed.2d 373 (1980). Section Sec. 4(e) of the Power Act prohibits the use of reservation lands for power production unless the Commission finds "that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired" and the Secretary of the Interior imposes "such conditions as the Secretary ... shall deem necessary for the adequate protection and utilization of such reservation." 16 U.S.C. Sec. 797(e). Section 10(e)(1) of the Power Act prohibits the use of tribal lands embraced within a reservation unless the Commission fixes a "reasonable annual charge" for the use of the lands and the Indian tribe approves the charge. 16 U.S.C. Sec. 803(e)(1). None of these conditions were met. Neither the Commission nor the Secretary approved the flooding of the Reservation; the Commission did not find the Reservation could be flooded without interfering with the purpose for which the Reservation was created; the Secretary did not determine what conditions might be necessary for the protection and utilization of the Reservation; the Commission did not fix an annual charge for use of Reservation land, and the Tribe was not asked to approve such a charge.

These omissions apparently resulted from the failure of the Utility to disclose that Reservation land would be flooded by the project. The application and the license itself indicated the project would be so constructed and maintained that the Reservation would not be affected. The license stated the water level would be higher in normal flows "for possibly 24 miles upstream." The reservation is located 30 miles upstream. The license also incorporated a map locating the project boundary six miles downstream from the Reservation. ⁴

Based on the language of Article 33, the statutory scheme governing the use of Indian reservation lands, and the other evidence in the record, we conclude the project was to be operated in such a way as not to flood Reservation land, and that Article 33 was intended to reinforce that prohibition and provide a remedy for its violation, rather than to confer blanket authority upon the Utility to trespass on Reservation land. ⁵

II. DAMAGES

A. Primary Jurisdiction.

The Tribe contends the Secretary of the Interior has primary jurisdiction to determine questions relating to damage to Reservation land due to operation of the Dam by virtue of Article 33 of the license, ⁶ and asks that these proceedings be stayed to allow the Secretary to exercise that jurisdiction. ⁷ The doctrine of primary jurisdiction is inapplicable. The Secretary's authority to pass on damage issues arises from Article 33 of the project license, not from a grant of jurisdiction by Congress pursuant to a comprehensive regulatory scheme. United States...