In Re: Gila River System ( 2010 )

SUPREME COURT OF ARIZONA
En Banc
IN RE )
)
THE GENERAL ADJUDICATION OF ALL ) Arizona Supreme Court
RIGHTS TO USE WATER IN THE GILA ) Nos. WC-07-0001-IR and
RIVER SYSTEM AND SOURCE ) WC-07-0003-IR
)
) Maricopa County
) Superior Court
) Nos. W-1, W-2, W-3, W-4
) (Consolidated)
)
) (Contested Case
) No. W1-207)
)
) O P I N I O N
_________________________________ )
Interlocutory Appeal from the Superior Court in Maricopa County
The Honorable Eddward P. Ballinger, Jr., Judge
AFFIRMED
________________________________________________________________
LAW OFFICE OF DOUGLAS C. NELSON, P.C. Phoenix
By Douglas C. Nelson
Attorney for Lower Gila Water Users, Town of Gila Bend,
Arlington Canal Company, Enterprise Ranch, Paloma Irrigation
& Drainage District and Various Individuals
THE SPARKS LAW FIRM, P.C. Scottsdale
By Joe P. Sparks
Laurel A. Herrmann
Attorneys for the San Carlos Apache Tribe and Tonto Apache Tribe
MONTGOMERY & INTERPRETER, P.L.C. Phoenix
By Susan B. Montgomery
Robyn L. Interpreter
Attorneys for Yavapai-Apache Nation
GILA RIVER INDIAN COMMUNITY Sacaton
By Jennifer K. Giff
Rodney B. Lewis
Timothy L. Pierson
Ruth E. Koester
Ann Marie Chischilly
John T. Hestand Chandler
And
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. Washington, DC
By Donald R. Pongrace
Attorneys for Gila River Indian Community
SALMON, LEWIS & WELDON, P.L.C. Phoenix
By John B. Weldon, Jr.
Lisa M. McKnight
M. Byron Lewis
Attorneys for Salt River Project, Salt River Project
Agricultural Improvement & Power District, and Salt River Valley
Water Users Association
SALMON, LEWIS & WELDON, P.L.C. Phoenix
By Riney B. Salmon, II
Attorneys for the San Carlos Irrigation & Drainage District
SALMON, LEWIS & WELDON, P.L.C. Phoenix
By Mark A. McGinnis
Attorneys for Maricopa-Stanfield Irrigation & Drainage District,
Central Arizona Water Conservation District, and Central Arizona
Irrigation and Drainage District
ENGELMAN BERGER, P.C. Phoenix
By William H. Anger
And
CRAIG D. TINDALL, GLENDALE CITY ATTORNEY Glendale
By Kent Russell Romney, Assistant City Attorney
Attorneys for City of Chandler, City of Glendale, City of
Scottsdale, and City of Mesa
BROWN & BROWN LAW OFFICES, P.C. Saint Johns
By David A. Brown
Attorneys for Franklin Irrigation District
LAW OFFICE OF L. ANTHONY FINES, P.C. Tucson
By L. Anthony Fines
Attorney for Gila Valley Irrigation District
2
RYLEY CARLOCK & APPLEWHITE PA Phoenix
By Cynthia M. Chandley
John C. Lemaster
L. William Staudenmaier, III
Rhett A. Billingsley
Sean T. Hood
Attorneys for Freeport-McMoRan Corporation and Roosevelt Water
Conservation District
UNITED STATES DEPARTMENT OF JUSTICE Washington, DC
By John L. Smeltzer
F. Patrick Barry
Attorneys for United States of America
NAVAJO NATION DEPARTMENT OF JUSTICE Window Rock
By Stanley M. Pollack
And
MCELROY MEYER WALKER & CONDON PC Boulder, CO
By Scott McElroy
Alice E. Walker
Attorneys for the Navajo Nation
MAGUIRE & PEARCE, P.L.L.C. Phoenix
By Michael J. Pearce
Attorneys for ASARCO LLC
MOYES SELLERS & SIMS LTD Phoenix
By Steven L. Wene
Attorneys for City of Safford
CURTIS, GOODWIN, SULLIVAN, UDALL & SCHWAB, P.L.C. Phoenix
By William P. Sullivan
Attorneys for Town of Gilbert
BROENING, OBERG, WOODS & WILSON, P.C. Phoenix
By Marilyn D. Cage
Attorneys for City of Goodyear
STEPHEN M. KEMP, PEORIA CITY ATTORNEY Peoria
By Stephen J. Burg
Attorneys for City of Peoria
GARY VERBURG, PHOENIX CITY ATTORNEY Phoenix
By M. James Callahan, Assistant City Attorney
Attorneys for City of Phoenix
3
ANDREW B. CHING, TEMPE CITY ATTORNEY Tempe
By Charlotte Benson
Attorneys for City of Tempe
________________________________________________________________
P E L A N D E R, Justice
¶1 As part of the ongoing adjudication of rights to use
water in the Gila River System and Source,1 the superior court
approved the settlement agreement of the Gila River Indian
Community (“GRIC”).2 We accepted interlocutory review and now
affirm the judgment and decree of the adjudication court.
Background
¶2 In 2004, Congress enacted the Arizona Water
1
The background facts and procedural history of the Gila
River general stream adjudication are provided in several cases,
including San Carlos Apache Tribe v. Superior Court, 193 Ariz.
195, 202 ¶¶ 2-3, 972 P.2d 179, 186 (1999), and In re Rights to
the Use of the Gila River (Gila River I), 171 Ariz. 230, 232-33,
830 P.2d 442, 444-45 (1992).
2
In addition to GRIC, the settling parties include the
United States; the State of Arizona; the Salt River Project
Agricultural Improvement and Power District; the Salt River
Valley Water Users’ Association; the Roosevelt Irrigation
District; the Roosevelt Water Conservation District; Arizona
Water Company; the cities of Casa Grande, Chandler, Coolidge,
Glendale, Goodyear, Mesa, Peoria, Phoenix, Safford, Scottsdale,
and Tempe; the towns of Florence, Mammoth, Kearny, Duncan, and
Gilbert; the Maricopa-Stanfield Irrigation & Drainage District;
the Central Arizona Irrigation and Drainage District; Franklin
Irrigation District; Gila Valley Irrigation District; the San
Carlos Irrigation and Drainage District; the Hohokam Irrigation
and Drainage District; the Buckeye Irrigation Company; the
Buckeye Water Conservation and Drainage District; Central
Arizona Water Conservation District; Phelps Dodge Corporation;
and the Arizona Game and Fish Commission. Agreement at 4.
4
Settlements Act (“AWSA”), Pub. L. No. 108-451, 118 Stat. 3478(2004), as “part of a broader effort by federal, state, and
tribal entities to resolve water rights issues” in this state.
In re Gen. Adjudication of All Rights to Use Water in the Gila
River Sys. and Source (Gila River VII), 217 Ariz. 276, 278 ¶ 3,
173 P.3d 440, 442 (2007). Title II of the AWSA authorizes
settlement of GRIC’s federal water rights claims.3 Under the
settlement at issue here, GRIC will receive 653,500 acre-feet of
water per year (“AFY”) from a combination of sources, in return
for which GRIC and the United States on GRIC’s behalf waive
claims to greater diversion rights, damages to water resources,
and the right to contest certain uses of Gila River water.
¶3 In May 2006, the settling parties applied for approval
of the GRIC settlement agreement with the adjudication court.
The court ordered the Arizona Department of Water Resources
(“ADWR”) to prepare a factual and technical assessment of the
settlement. ADWR submitted its assessment in August 2006.
¶4 The San Carlos Apache Tribe, Tonto Apache Tribe, and
Yavapai-Apache Nation (collectively, the “Apache Tribes”)
objected on multiple grounds to the settlement agreement. The
3
“The [Gila River Indian Reservation] covers about 580
square miles or approximately 373,000 acres . . . and is located
in Central Arizona, just south of the Phoenix metropolitan area
in Maricopa and Pinal Counties.” Ariz. Dep’t of Water
Resources, Technical Assessment of the Gila River Indian
Community Water Rights Settlement (“Assessment”) at 2-1 (2006).
5
Lower Gila Water Users (“LGWUs”), consisting of the Town of Gila
Bend, Arlington Canal Company, Enterprise Ranch, Paloma
Irrigation & Drainage District, and various individual
appropriators of Gila River water, also objected, as did ASARCO
LLC. In November 2006, the settling parties responded to the
objections and moved for summary disposition. The Apache
Tribes, the LGWUs, and ASARCO each responded to that motion, and
the Apache Tribes and ASARCO cross-moved for summary
disposition.
¶5 The adjudication court limited its inquiry to matters
specified in this Court’s 1991 Special Procedural Order
Providing for the Approval of Federal Water Rights Settlements,
Including Those of Indian Tribes (“Special Order”). The court
determined that the Apache Tribes had no viable objections
because the agreement did not affect their water rights. The
court denied ASARCO’s cross-motion and granted summary
disposition against both ASARCO and the LGWUs on all their
objections except claims pertaining to the quantity of water
GRIC would receive under the settlement agreement. Those
parties later stipulated that the water quantity was not more
extensive than GRIC could show at trial.
¶6 Based on the parties’ submissions of stipulated facts
and exhibits, and confining its review to those matters
prescribed in the Special Order, the adjudication court entered
6
a judgment and decree approving GRIC’s settlement agreement.
This Court granted the request of the Apache Tribes, the LGWUs,
and ASARCO for interlocutory review. We have jurisdiction under
Article 6, Section 5(3) of the Arizona Constitution. Motions
for summary disposition of objections are considered under
Arizona Rule of Civil Procedure 56. See Special Order § (D)(2).
This Court reviews de novo the interpretation and application of
the Special Order vis-à-vis settlement agreements as well as the
adjudication court’s grant of summary disposition. See In re
Gen. Adjudication of all Rights to Use Water in the Gila River
Sys. and Source (Gila River VI), 212 Ariz. 64, 69 ¶ 12, 127 P.3d
882, 887 (2006); Andrews v. Blake, 205 Ariz. 236, 240 ¶ 12, 69
P.3d 7, 11 (2003).
¶7 The Special Order governs approval of settlement
agreements involving the claims of Indian tribes to use water in
the Gila River system and source. Special Order §§ (A)-(D); see
Gila River VII, 217 Ariz. at 278-79 ¶ 10, 173 P.3d at 442-43.
Under the Special Order, any claimant may file an objection
asserting that (1) approval of the settlement agreement would
cause material injury to its claimed water rights; (2) the
conditions warranting the initiation of special proceedings have
not been satisfied; or (3) the settlement agreement establishes
water rights in the Gila River mainstem that are more extensive
than the Indian tribe or federal agency would have been able to
7
prove at trial. Special Order § (C)(1). The adjudication court
then resolves any motions for summary disposition of objections,
considers discovery requests, and hears objections on matters
for which summary disposition was not granted. Id. § (D)(1).
¶8 The Special Order requires the court to approve the
settlement agreement if it finds by a preponderance of the
evidence that there is a reasonable basis to conclude that the
water rights granted in the agreement are no more extensive than
the Indian tribe or federal agency could have proven at trial,
the objector’s claimed water rights are not materially injured
or are preserved under the express terms of the settlement
agreement, and the settlement agreement was reached in good
faith. Id. § (D)(6); see Gila River VII, 217 Ariz. at 279 ¶ 12,
173 P.3d at 443.
¶9 This Court recently addressed the application of the
Special Order in Gila River VII. There we noted:
The balance struck by the Special Order
seeks to prevent any tribe from using a
settlement to gain additional rights to
water while protecting other parties whose
own rights would be injured by the
settlement. At the same time, the Special
Order provides for judicial approval when
the settling tribe has taken steps to
preserve other claimants’ rights and
remedies. Put simply, the expectation under
the Special Order is that a settlement will
be approved if the settling tribe is no
better off than it would be after the final
adjudication of all claims, and the
settlement preserves the remedies of the
8
non-settling claimants.
217 Ariz. at 279 ¶ 13, 173 P.3d at 443. We concluded that the
adjudication court is limited to considering the objections
provided in the Special Order when deciding whether to approve a
settlement agreement. Id. at 280-81 ¶¶ 16-20, 173 P.3d at 444-
45. We reaffirm that conclusion.
Objections
¶10 The Apache Tribes, the LGWUs, and ASARCO largely
complain that the limited scope of settlement review provided in
the Special Order unfairly prevents them from challenging
settlements on constitutional and other grounds and from
protecting their own claimed water rights. We disagree and find
that the Special Order serves several important purposes.
¶11 The “size and complexity” of this general stream
adjudication, initiated in 1974, are well documented. Joseph M.
Feller, The Adjudication That Ate Arizona Water Law, 49 Ariz. L.
Rev. 405, 407 (2007); see also Gila River I, 171 Ariz. at 232,
830 P.2d at 444 (noting, eighteen years ago, “[t]he procedural
history of this adjudication is already complex”). Much of the
adjudication has necessarily centered on the claims of Indian
tribes, in part because of the “now well-established” principle
that “the government, in establishing Indian or other federal
reservations, impliedly reserves enough water to fulfill the
purposes of each such reservation.” In re Gen. Adjudication of
9
All Rights to Use Water in the Gila River Sys. and Source (Gila
River V), 201 Ariz. 307, 311 ¶ 9, 35 P.3d 68, 72 (2001)
(discussing Winters v. United States, 207 U.S. 564 (1908)); see
also United States v. Superior Court, 144 Ariz. 265, 270, 697
P.2d 658, 663 (1985) (“In the scheme of priorities, the claims
. . . of the Indians rank high.”).
¶12 “[M]uch of Arizona is arid desert land without
sufficient water to meet all demands.” United States, 144 Ariz.
at 269, 697 P.2d at 662. “The problem, therefore, is clear.”
Id. at 270, 697 P.2d at 663. As this Court observed a quarter
century ago:
[T]he current state of our water supply is
critical. . . . Since the amount of surface
water available is insufficient to satisfy
all needs, and since Arizona follows the
doctrine of prior appropriation, it is
unavoidable that the priority claims of
large users will reduce, if not eliminate,
the amount of water available to some of
those with lower priority.
Id. (citations omitted).
¶13 Those words still ring true today. Viewed with those
considerations in mind, the Special Order neither arbitrarily
nor unfairly limits the scope of review of Indian tribe water
settlements. Indian tribes alone originally claimed more water
than is available in the Gila River system. Therefore, when
Indian claims are settled and such settlements meet the
conditions of the Special Order, it not only significantly
10
advances this adjudication but also benefits other non-settling
parties, Indian and non-Indian alike, by reducing the claimed
AFY of any one tribe to an amount below that which it could have
proven at trial. The Special Order preserves the objecting
parties’ ability to assert their various claims but defers
consideration of some of them by the adjudication court and on
appeal, a procedure consistent with this Court’s general
practice of avoiding interlocutory appeals. Accordingly, we
reject the broad challenges of the objecting parties to the
Special Order and turn to the specific objections raised to the
GRIC settlement.
The Apache Tribes
¶14 The Apache Tribes first argue that, notwithstanding
the Special Order, the adjudication court had an inherent duty
to consider the constitutionality, legality, and fairness of the
settlement agreement. We rejected this argument in Gila River
VII. 217 Ariz. at 279-80 ¶¶ 15-20, 173 P.3d at 443-44.4 These
objections “fall outside the narrow scope of review mandated by
the Special Order . . . [and] can be addressed at a later date
4
The Apache Tribes intervened in Gila River VII and joined
with the Pascua Yaqui Tribe in making the same arguments the
Apache Tribes urge here. 217 Ariz. at 279-80 n.6, ¶ 15, 173
P.3d at 443-44 n.6 (noting that “the Apache Tribes’ objection to
the adjudication court’s interpretation of the Special Order [in
this case] mirrors the one raised” in Gila River VII and that
the issue raised in both cases “is the same”).
11
without any injury to the Tribe[s] from delay.” Id. at 280
¶ 17, 173 P.3d at 444 (internal citation, quotation marks, and
ellipses omitted).
¶15 Nonetheless, in support of their argument, the Apache
Tribes rely on San Carlos Apache Tribe v. Superior Court, 193
Ariz. 195, 972 P.2d 179 (1999). In that case, this Court
considered the constitutionality of two legislative measures
that revised several statutes addressing surface water rights
and the adjudication process. Id. at 203 ¶ 4, 972 P.2d at 187.
One statute required courts to decree settlement agreements but
did not authorize judicial review of the agreements. Id. at 213
¶ 43, 972 P.2d at 197. That statute, we held, violated the
separation of powers doctrine because, “[i]n an inter sese
proceeding such as this adjudication, a court cannot be required
[by the legislature] to incorporate an agreement that may affect
the availability of water for other claimants or interfere with
senior rights.” Id.¶16 Here, the adjudication court applied the Special
Order, not a statute enacted by the legislature. Thus, there is
no separation of powers issue, and because the Special Order
expressly provides the terms under which we review Indian water
rights settlements, the analysis in San Carlos Apache Tribe is
12
not applicable.5 See Gila River VII, 217 Ariz. at 281-82 ¶¶ 25-
27, 173 P.3d at 445-46.
¶17 The Apache Tribes further assert the adjudication
court erred as a matter of law in ruling that they lacked
standing to claim material injury. They argue that approval of
the settlement agreement will adversely affect the water rights
of the San Carlos Apache Tribe and may negatively impact the
water rights of the Yavapai-Apache Nation in the future.
¶18 The adjudication court did not expressly state that
the Apache Tribes lacked standing to contest the settlement.6
5
The Apache Tribes also ask us to address and resolve the
differences between the procedural orders this Court entered in
the Gila River and the Little Colorado River adjudications.
Although the Little Colorado River Administrative Order permits
the adjudication court to consider whether a settlement
agreement “is fair, adequate, reasonable, and consistent with
applicable law,” that order is not before us, and we again
“decline to revisit the Special Order” that has controlled this
adjudication for almost two decades. Gila River VII, 217 Ariz.
at 280 n.8, ¶ 16, 173 P.3d at 444 n.8.
6
The adjudication court stated that
[its] limited review of the proposed
settlement mandates a finding that the
Apache Tribes, like the Navajo Nation,
cannot put forth a viable objection in this
special proceeding. This is true because
approval of the settlement agreement and the
proposed judgment and decree cannot affect
the Apache Tribes’ water rights, claims or
entitlements to water.
Minute Entry, Mar. 7, 2007. Using that same language a month
earlier, the adjudication court ruled that the Navajo Nation
“lacks standing to object” to the approval of the GRIC
13
Rather, the court correctly ruled that their objections fell
outside the limited scope of review prescribed by the Special
Order. A settlement agreement will be approved if the
adjudication court determines, among other things, that the
objector’s water rights are not materially injured or are
preserved “under the express terms of the settlement agreement.”
Special Order § (D)(6)(b). Because those two conditions are
disjunctive, the adjudication court must approve the settlement
agreement as long as the agreement expressly states that the
objector is not bound and is free to pursue its claims in the
general adjudication. See Gila River VII, 217 Ariz. at 279 ¶ 13,
173 P.3d at 443.
¶19 The “express terms” of the GRIC settlement agreement
provide that “[n]othing in this Agreement shall be construed to
quantify or otherwise affect the Water Rights, claims or
entitlements to Water of any tribe, band or community other than
[GRIC].” Agreement ¶ 30.22. Similar language appears in
paragraph 23 of the adjudication court’s judgment and decree.
Indeed, the AWSA itself prohibits the agreement from affecting
the water rights of any other Indian tribe. AWSA §§ 213(b),
401. Because the Apache Tribes “retain all remedies available
settlement agreement. Minute Entry, Feb. 23, 2007. No claims,
objections, or rulings relating to the Navajo Nation are before
us in this proceeding.
14
before approval of the settlement necessary to protect their
rights in the general adjudication[,]” approval of the
settlement agreement did not hinge on absence of any material
injury to the Apache Tribes. Gila River VII, 217 Ariz. at 281
¶ 22, 173 P.3d at 445. And, in any event, because the
settlement agreement does not affect their rights or remedies,
it cannot materially injure them. See id.¶20 The Apache Tribes next claim that ADWR did not comply
with the adjudication court’s order requiring it to factually
and technically assess the proposed settlement. Therefore, they
assert, the court did not have an informed basis on which to
determine whether the settlement agreement adversely affected
their water rights. The Apache Tribes further argue they were
entitled to a hearing on the merits of their material-injury
objection.
¶21 Pursuant to the court’s order, ADWR produced a
technical assessment that included a chapter addressing the
“probable impacts of the settlement agreement” on both water
resources and other claimants. Assessment at ch. 7. Nothing in
the court’s order required ADWR to specifically consider the
impact of the settlement agreement on the Apache Tribes.
Furthermore, an assessment of their rights (by either a
technical analysis or a hearing on the merits) is irrelevant to
a finding of material injury because the Apache Tribes are not
15
bound by the settlement agreement. See Gila River VII, 217
Ariz. at 282 ¶ 30, 173 P.3d at 446.
¶22 The Apache Tribes also contend the adjudication court
never saw the executed version of the settlement agreement. But
the judgment and decree expressly states that the court
considered “the Amended and Restated Settlement Agreement dated
October 21, 2005.” And in the original application for special
proceedings, the settling parties stated that copies of the
agreement were available for inspection at ADWR as well as every
county’s superior court clerk’s office. Application at 4 ¶ 3.7
Therefore, we find no merit to this argument.
¶23 Finally, the Apache Tribes assert that GRIC will
receive more water by settlement than it could have established
at trial. The settlement agreement provides GRIC with 653,500
AFY, which includes 328,800 AFY of Central Arizona Project
(“CAP”) water, 156,700 AFY of underground water, 155,400 AFY of
surface water,8 and 12,600 AFY of reclaimed water. Agreement
¶ 4.1. Because CAP water is not from the Gila River system and
7
The application is available at http://www.azwater.gov/
AzDWR/StatewidePlanning/Adjudications/AZWaterSettlements.htm
(last visited Feb. 17, 2010).
8
The surface water is composed of 125,000 AFY under the 1935
Globe Equity Decree; 5,900 AFY furnished by the Salt River
Project in lieu and satisfaction of GRIC’s rights under the 1903
Haggard Decree; 4,500 AFY of water from Roosevelt Water
Conservation District; and 20,000 AFY of Salt River Project
stored water. Assessment at 3-2, 3-8 to 3-11.
16
source and is outside the adjudication court’s jurisdiction, we
exclude that water from our analysis.
¶24 In the adjudication, GRIC claimed aboriginal rights of
934,805 AFY, federal reserved rights of almost 2.5 million AFY,
and prior appropriative rights of 2.7 million AFY. The United
States on GRIC’s behalf also asserted a right to more than 1.5
million AFY. Assessment at 4-4 to 4-9. In addition, according
to ADWR, the total average water use on the GRIC reservation for
both agricultural and non-agricultural purposes is between
760,586 and 1,347,500 AFY. Id. at 8-4.
¶25 The settlement plainly provides for fewer AFY than
GRIC was allocated under the Globe Equity Decree (“Decree”).9
GRIC is entitled to at least 967,215 AFY under that Decree,10
consisting of (1) 303,276 AFY (210,000 AFY with a time
immemorial priority and 93,276 AFY with a 1924 priority) from
the Gila River mainstem for 50,546 acres of GRIC’s reservation,
Decree, Articles V, VI(1)-(4); (2) 17,950 AFY of natural flow
9
The Globe Equity Decree, which is under the jurisdiction of
the federal district court, “defines and adjudicates the claims
and rights of the parties [in that case to the use of the Gila
River mainstem] by listing the dates of priority and amounts of
water to which each is entitled. The Decree also specifies the
places at which the parties may divert water.” Gila River VI,
212 Ariz. at 67 ¶¶ 6-7, 127 P.3d at 885 (internal quotation
marks omitted).
10
Although not binding on the Apache Tribes, the LGWUs
stipulated that the total quantity of existing water rights held
17
water rights ranging in priority from 1873-1903 for 2,992.5
acres, id. Article VI(6); (3) 645,989 AFY of stored water with a
1924 priority date for 50,546 acres, which is GRIC’s pro rata
allocation of the San Carlos Irrigation Project’s right to
1,285,000 AFY stored in the San Carlos Reservoir, id. Article
VI(5); and (4) an unspecified amount of pumped groundwater, id.Article VII.
¶26 In sum, the water claimed on behalf of GRIC, its
current water use, and GRIC’s Globe Equity Decree rights are
each considerably greater than the amount allocated to it under
the settlement agreement. Accordingly, the adjudication court
had “a reasonable basis to conclude that [GRIC’s] water rights
. . . established in the settlement agreement . . . are no more
extensive than [GRIC] would have been able to prove at trial.”
Special Order § (D)(6)(a).
¶27 To the extent the Apache Tribes argue the GRIC
settlement adversely affects the quality of their water, we
conclude that the determination whether an Indian tribe receives
more water by settlement than it could have shown at trial is
limited to an analysis of water quantity. Settlement approval
does not hinge on a finding that the quality of other claimants’
water is unaffected. This limitation is necessary because of
by GRIC and the United States on GRIC’s behalf under the Globe
Equity Decree was at least 967,215 AFY.
18
the nature of the adjudication proceedings, in which parties are
settling disputes over water rights at different times and with
different parties. The consideration of any factors relating to
water quality is not encompassed by the Special Order, would be
fraught with speculation, and would unduly hinder and delay
settlements.
¶28 Although water quality is not a necessary or
appropriate consideration under the Special Order, claimants may
still assert their rights to a higher quality of water in the
general stream adjudication, unless prohibited by agreements,
prior decrees, or court rulings. The Apache Tribes’ objection
about the quality of their water fails here, however, because it
falls outside the Special Order’s scope of review.
The LGWUs
¶29 The LGWUs first argue material injury because the lack
of priority dates and other attributes for the sources of water
in the agreement makes it impossible to tell if water will be
available to fulfill their water rights.11 But the water from
the Gila River system allocated to GRIC under the settlement
agreement retains all its pre-existing attributes and, as noted
below, the LGWUs are not bound by the settlement. Thus, if the
11
In oral argument, the LGWUs claimed that seventy-two
percent of GRIC’s reservation was created after they first
diverted water from the Gila River.
19
LGWUs are unable to obtain sufficient water to satisfy their
claimed entitlement, they remain free to assert their rights in
the general stream adjudication. That GRIC’s settlement means
it no longer will serve in its traditional adversarial role
against various upstream water users does not establish material
injury to the LGWUs.
¶30 The LGWUs also contend that applying the Special Order
to preclude them from litigating their objections to this
settlement violates their procedural and substantive due process
rights. Specifically, the LGWUs argue that the settlement
agreement results in a taking of their vested property rights by
preventing them from making calls on the river, confirming water
rights among the settling parties, requiring parties whose
claims have not been adjudicated to contribute water to GRIC,
and granting to other users (via the settlement agreement’s
“safe harbor” provisions) water rights that displace their
senior rights. The Special Order, the LGWUs assert, prevents
them from pursuing and establishing those claims.
¶31 In upholding the Special Order’s application in Gila
River VII, however, we stated that, “[t]hrough the Special
Order, this Court sought to balance the rights of Indian tribes
to seek settlement of their claims against the rights of other
claimants.” 217 Ariz. at 279 ¶ 11, 173 P.3d at 443. For the
reasons discussed earlier, supra ¶¶ 10-13, we are not inclined
20
to overturn or deviate from the Special Order at this late date,
particularly when doing so would frustrate or unduly delay good-
faith settlements. Therefore, the adjudication court correctly
rejected the LGWUs’ broad challenge to the Special Order itself
and, instead, properly focused on whether any of their
objections fell within the Special Order’s limited scope.
¶32 The LGWUs next assert that the adjudication court’s
judgment and decree unlawfully binds them because the settlement
agreement does not expressly provide otherwise. The LGWUs are
not bound by the settlement or judgment, however, because they
are not settling parties and did not sign either the settlement
agreement or the proposed Paloma Agreement.12 See Martin v.
Wilks, 490 U.S. 755, 762 (1989) (“A judgment or decree among
parties to a lawsuit resolves issues as among them, but it does
not conclude the rights of strangers to those proceedings.”),
superseded by statute on other grounds, 42 U.S.C. § 2000e-2(n)
(1991); see also Gila River VII, 217 Ariz. at 281 ¶ 22, 173 P.3d
at 445.
¶33 Paragraph 24 of the judgment and decree provides:
Nothing in the Settlement Agreement shall
12
The Paloma Agreement was offered for the LGWUs’ acceptance
until the enforceability date of the settlement agreement. The
Paloma Agreement provided that GRIC and the United States would
not challenge the LGWUs’ water claims, and in return the LGWUs
would refrain from objecting to GRIC’s use of water in
accordance with the settlement agreement.
21
affect the right of any Party, other than
the Community and the United States, on
behalf of the Community, Members and
Allottees, to assert any priority date or
quantity of water for Water Rights claimed
by such Party in the Gila River Adjudication
or other court of competent jurisdiction.
In a footnote, the judgment and decree states that
“[c]apitalized terms used [therein] shall be as defined in the
Settlement Agreement.” And the settlement agreement states the
term “‘Party’ shall mean an entity represented by a signatory to
this Agreement.” Agreement ¶ 2.129.
¶34 Nonetheless, in accordance with the clear intent of
the adjudication court, the understanding of the settling
parties, applicable legal principles, and common sense, we
interpret “Party” in the judgment and decree as including all
parties in the general stream adjudication. Based on this
interpretation of the judgment and decree, with which GRIC and
the United States agreed at oral argument in this Court, neither
the LGWUs nor any other non-settling claimants (such as ASARCO)
in the adjudication are bound by the terms of the settlement
agreement or otherwise prevented from asserting their rights to
Gila River water.
¶35 Although the GRIC settlement agreement provides, with
certain exceptions pertaining to Indian tribes, that the Globe
Equity Decree “shall be binding upon all parties” to these
proceedings, the adjudication court omitted that provision from
22
its judgment and decree. As that court pointed out, however,
Arizona Revised Statutes (A.R.S.) § 45-257(B)(1) (2003) requires
the adjudication court to accept the determination of water
rights and the appropriation dates in prior decrees unless such
rights have been abandoned.13 Id. Thus, although the LGWUs may
argue they have higher priority rights, they cannot deny that
GRIC and the United States on GRIC’s behalf possess the rights
and priority dates set forth in prior decrees, absent
abandonment.
¶36 Among other constitutional challenges, the LGWUs argue
the settlement agreement’s safe harbor provisions create an
unconstitutional riparian system of water allocation. Under
those provisions, GRIC, the San Carlos Irrigation & Drainage
District, and the United States agreed not to challenge, object
to, or call on qualified users that were not parties to the
Globe Equity Decree as long as their water use complied with
stated conditions. Agreement ¶¶ 26.8.1, 26.8.2.1, 26.8.2.3.
The LGWUs also claim the settlement agreement violates Arizona’s
severance and transfer of water rights statute, see A.R.S. § 45-
13
The Globe Equity Decree, see supra note 9, is discussed in
Gila River VI, 212 Ariz. at 67 ¶¶ 4-7, 127 P.3d at 885.
According to ADWR’s technical assessment of the GRIC settlement,
the 1903 Haggard Decree, entered in an action the United States
filed, “recognized the rights of [GRIC] lands and established
the number of acres and associated priority dates ranging from
pre-1894 through 1901.” Assessment at 3-10, n.9.
23
172(A)(5), because the Paloma Irrigation & Drainage District did
not approve any changes in the points of diversion or places of
use for the water sources in the agreement.
¶37 As did many of the objections raised in Gila River
VII, however, the LGWUs’ constitutional and statutory arguments
fall outside the Special Order’s limited scope of review and can
be addressed at a later date without injury to the LGWUs.14 217
Ariz. at 280 ¶ 17, 173 P.3d at 444. In any event, the safe
harbor provisions do not change the system for allocating water
– they simply protect eligible users with junior water rights
from receiving a call from GRIC to satisfy its senior rights.
The provisions also do not prevent any other party from
asserting its priority water rights. In addition, because the
LGWUs are not bound by the settlement agreement, they may seek
relief if the safe harbor provisions ultimately result in an
adverse impact on their water rights. See Gila River VII, 217
Ariz. at 280 ¶ 19, 173 P.3d at 444. Likewise, the Paloma
Irrigation & Drainage District may bring a claim later if it
determines that water is being contributed to GRIC in violation
of A.R.S. § 45-172(A)(5).
14
For that same reason, we do not address the Apache Tribes’
challenges to the safe harbor provisions on constitutional
grounds, first raised belatedly in their reply brief. See
Webster v. Culbertson, 158 Ariz. 159, 163, 761 P.2d 1063, 1067
(1988) (issue not raised and argued in opening brief is waived).
24
¶38 The LGWUs next assert the adjudication court should
have included CAP and Blue Ridge stored water when it considered
the quantity of water GRIC obtained by settlement. In its
assessment, however, ADWR excluded only CAP and reclaimed water
from its determination whether GRIC settled for less water than
it could have proven at trial.15 Assessment at 8-4 to 8-5. CAP
water is delivered pursuant to contract with the federal
government and is not subject to appropriation under state law.
Maricopa-Stanfield Irrigation & Drainage Dist. v. United States,
158 F.3d 428, 431 (9th Cir. 1998). Therefore, CAP water, which
is outside the jurisdiction of the adjudication court, was
properly excluded from ADWR’s analysis. See Gila River VII, 217
Ariz. at 283 ¶¶ 31-32, 173 P.3d at 447.
¶39 Finally, the LGWUs claim that the settlement agreement
breaches the 1945 Arlington Agreement, in which GRIC and the
United States agreed to restrict their water use on the
reservation so that Arlington Canal Company would continue to
receive water flows. The settlement agreement, however, does
not alter Arlington’s rights under the Arlington Agreement or
prevent Arlington from asserting such rights. In addition, as
15
ADWR included Blue Ridge stored water (an average of 500
AFY) in its analysis because, when this water is provided under
certain conditions, the amount of underground water specified in
the agreement was reduced by an equivalent amount. Agreement
¶ 4.1, n.2.
25
noted above, we interpret the judgment and decree to preserve
the rights of all non-settling parties in the adjudication.16 In
sum, the adjudication court did not err in rejecting the LGWUs’
objections to the settlement.
ASARCO
¶40 ASARCO is a successor in interest to Kennecott Copper
Corporation, which was a party to the Globe Equity Decree. The
Decree allows ASARCO to withdraw up to 16,221 AFY from the Gila
River mainstem.
¶41 ASARCO first argues the GRIC settlement agreement
breaches the 1977 Water Rights Settlement and Exchange Agreement
(“1977 Agreement”), in which ASARCO agreed that it would either
pay for or provide an equivalent amount of CAP water to GRIC in
exchange for any water diverted from the Gila River. The 1977
Agreement also gives ASARCO priority over Gila River water
received in exchange for CAP water.
¶42 This contract claim falls outside the scope of review
allowed by the Special Order. See Gila River VII, 217 Ariz. at
280 ¶ 17, 173 P.3d at 444. Moreover, the 1977 Agreement (¶ 35)
states that “all actions for the enforcement . . . of this
16
The LGWUs also argue that ADWR failed to obey the
adjudication court’s order to analyze the impact of the
settlement agreement on other claimants’ water rights. We have
considered and rejected the same objection made by the Apache
Tribes. See supra ¶¶ 20-21.
26
AGREEMENT shall be brought in courts of the United States.”
Thus, if the GRIC settlement causes a breach of the 1977
Agreement, ASARCO may assert its rights under that agreement in
federal court.
¶43 ASARCO next asserts that it is materially injured
because the settlement, through the operation of A.R.S. § 45-
257(B)(1), improperly extends the reach of the Globe Equity
Decree to Gila River tributaries. Specifically, the settlement
agreement provides that GRIC shall have the right to 653,500 AFY
from several water sources, including a variable quantity of
water diverted pursuant to GRIC’s Globe Equity Decree rights
with time immemorial priority. ASARCO contends that users of
the San Pedro River are now arguably bound by GRIC’s time
immemorial priority on that tributary, even though the relative
priority of rights must still be determined in the adjudication.
¶44 ASARCO’s claims to the San Pedro are unaffected.
“[T]he [Globe Equity] Decree adjudicated only claims to the Gila
River mainstem and not to its tributaries. The Decree therefore
has no preclusive effect as to the tributaries.” Gila River VI,
212 Ariz. at 76 ¶ 38, 127 P.3d at 894. ASARCO remains free to
assert its claim of senior rights to the San Pedro River when
the relative water rights of that tributary are determined in
27
the general stream adjudication.17
¶45 ASARCO further contends the settlement agreement’s
safe harbor provisions deny it equal protection and confer
special benefits to GRIC in violation of the Arizona
Constitution. Specifically, ASARCO asserts the Upper Gila River
Watershed Maintenance Program, described below, uses state
legislation to implement protections against certain new water
uses and to regulate existing uses, but permits the settling
parties to decide independently who benefits from these
protections. ASARCO claims that, were it not expressly excluded
by name in the agreement, it would have qualified for protection
under the safe harbor provisions.
¶46 The adjudication court, however, correctly declined to
address ASARCO’s safe-harbor argument as outside the scope of
the Special Order. Gila River VII, 217 Ariz. at 280 ¶ 17, 173
P.3d at 444. ASARCO’s claim is flawed for other reasons. In
the settlement agreement, ¶ 26.8.1, the settling parties agreed
to establish the Upper Gila River Watershed Maintenance Program
17
Because the judgment and decree provides GRIC with the
right to divert water from the Gila River mainstem, however, the
water users of the tributaries may be affected due to the
limited amount of available Gila River water. “[P]rior
appropriations of the water of the main stream include the right
to the waters of the tributaries, above the points of diversion,
to the full extent of those prior appropriations.” Clesson S.
Kinney, A Treatise on the Law of Irrigation and Water Rights,
§ 649, at 1137 (2d ed. 1912).
28
(“Program”). The Program was enacted by the legislature,
codified in A.R.S. §§ 45-2601 to 45-2654, and created the Gila
River Maintenance Area. Subject to specified exceptions, the
Program prohibits the construction of new dams, the enlargement
of existing dams, and new irrigation of lands within this area.18
A.R.S. §§ 45-2631, 45-2641; Assessment at 3-14. The Program
applies to all persons who contemplate performing any of these
acts in the maintenance area.
¶47 As discussed above, the settlement agreement’s safe
harbor provisions restrict the ability of GRIC, the San Carlos
Irrigation & Drainage District, and the United States to
challenge, object to, or call on specified users provided they
meet certain conditions and the Program remains in effect.
Agreement ¶¶ 26.8.1, 26.8.2.1, 26.8.2.3; Assessment at 3-14 to
3-15. The specified users primarily consist of those “persons,
entities, corporations, or municipal corporations [and their
successors] . . . in the Gila River Watershed above Ashurst-
Hayden Diversion Dam . . ., [whose] Diversion is not
specifically authorized by the Globe Equity Decree.” Agreement
¶ 2.124B. ASARCO and some others are expressly excluded from
this definition. Id.
18
The irrigation of land in the maintenance area is
prohibited unless the land was being irrigated between January
1, 2000 and August 12, 2005. Assessment at 3-14.
29
¶48 Although the Program was enacted by the legislature,
the safe harbor provisions were not statutorily prescribed but
rather are merely part of the settlement agreement among the
parties. The settling parties were entitled within their
agreement to treat certain water users differently based on
their past relationship with them. See Goodman v. Newzona Inv.
Co., 101 Ariz. 470, 474, 421 P.2d 318, 322 (1966) (“[E]quity
respects and upholds the fundamental right of the individual to
complete freedom to contract or decline to do so, as he
conceives to be for his best interests, so long as his contract
is not illegal or against public policy.” (quoting McCall v.
Carlson, 172 P.2d 171, 187-88 (Nev. 1946))). ASARCO differs
from the water users who qualified for the safe harbor because
it is a party to the Globe Equity Decree, is in a contractual
relationship with a settling party (the 1977 Agreement), and was
in the process of negotiating another exchange agreement with
GRIC.19 Regardless of its treatment within the settlement
agreement, ASARCO remains subject to the statutory provisions of
the Program, as do all other entities in the region. Therefore,
the agreement neither violates ASARCO’s equal protection rights
nor confers special benefits to GRIC.
19
According to ASARCO, negotiations for the new exchange
agreement were part of the overall settlement process but failed
to result in a new agreement.
30
¶49 ASARCO also argues that the safe harbor provisions
confer benefits on GRIC that are qualitatively greater than it
would otherwise have been able to prove at trial. Specifically,
ASARCO claims that the safe harbor provisions provide GRIC with
“selective call” in that GRIC, unlike other downstream
appropriators, can pick and choose which upstream users will be
called to fulfill its senior water rights.
¶50 Again, the determination whether an Indian tribe has
received more water than it could have established at trial is
limited to consideration of water quantity. Thus, as with the
Apache Tribes’ quality-related arguments, we conclude that
qualitative factors pertaining to water rights accorded to GRIC
under the settlement are outside the Special Order’s scope of
review. Thus, ASARCO’s objection is without merit.
¶51 Finally, ASARCO contends it is materially injured
because the agreement’s safe harbor provisions increase the risk
of “rebound call.” A “rebound call” occurs when an upstream
user increases its water use, thereby decreasing the flow to a
downstream user, which in turn causes the downstream user to
call on other upstream users for water who had not caused its
depletion.
¶52 This argument is premature and speculative, as ASARCO
did not present any evidence that the settlement agreement has
caused an increased incidence of such calls. In any event, if
31
the safe harbor provisions result in GRIC increasing the calls
on ASARCO, ASARCO can assert in federal court its Globe Equity
Decree rights to Gila River water. In addition, although GRIC
must refrain from calling on certain qualified junior users
under those provisions, ASARCO can still call on such users in
accordance with its higher priority rights.
Disposition
¶53 For the reasons stated above, we affirm the judgment
and decree of the adjudication court.
_____________________________________
A. John Pelander, Justice
CONCURRING:
_____________________________________
Rebecca White Berch, Chief Justice
_____________________________________
Andrew D. Hurwitz, Vice Chief Justice
_____________________________________
Michael D. Ryan, Justice
_____________________________________
Ann A. Scott Timmer, Judge*
*
Justice W. Scott Bales has recused himself from this case.
Pursuant to Article 6, Section 3 of the Arizona Constitution,
the Honorable Ann A. Scott Timmer, Chief Judge of the Arizona
Court of Appeals, Division One, was designated to sit in this
matter.
32