United States v. Gila Valley Irrigation Dist , 859 F.3d 789 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, Nos. 14-16942
Plaintiff-Appellant/ 14-16943
Cross-Appellee, 14-16944
14-17047
and 14-17048
14-17185
GILA RIVER INDIAN COMMUNITY;
SAN CARLOS APACHE TRIBE OF D.C. Nos.
ARIZONA, 4:31-cv-00059-SRB
Intervenor-Plaintiffs- 4:31-cv-00061-SRB
Appellants/Cross-Appellees,
v. OPINION
GILA VALLEY IRRIGATION
DISTRICT; FRANKLIN IRRIGATION
DISTRICT; FREEPORT MINERALS
CORPORATION; LARRY W.
BARNEY; VIRI VIVA LUNT
REVOCABLE TRUST; TRP FAMILY
TRUST; RONALD HOWARD; JANICE
HOWARD; MYRNA CURTIS; JOE B.
TATUM; JUDY L. TATUM;
HARRINGTON RANCH AND FARM;
S&R DALEY, LP; STEVE DALEY;
ROSS AND FAWN BRYCE FAMILY
TRUST; HOUSEHOLDER FAMILY
2 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
LIMITED PARTNERSHIP; KENNETH
CLARIDGE,
Defendants-Appellees/
Cross-Appellants.
Appeal from the United States District Court
for the District of Arizona
Susan R. Bolton, District Judge, Presiding
Argued and Submitted December 15, 2016
San Francisco, California
Filed June 13, 2017
Before: Diarmuid F. O’Scannlain, Ronald M. Gould,
and Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge O’Scannlain
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 3
SUMMARY *
Water Rights
The panel affirmed in part, and reversed in part, the
district court’s September 4, 2014 judgment in these
consolidated appeals involving the Globe Equity Decree of
1935, and concerning whether landowners can transfer their
rights to divert water from the Gila River, which flows
through southern Arizona; and dismissed the cross appeals.
In 1935, the district court entered a consent decree, the
Globe Equity Decree, to govern the distribution of water
among the Gila River Indian Community, the San Carlos
Apache Tribe, and various other landowners. The district
court has continuing jurisdiction to enforce and interpret the
Decree.
In 2007, the Community, the San Carlos Irrigation and
Drainage District, the United States, and thousands of
individual landowners entered into the Upper Valley
Forbearance Agreement providing that the individual
landowners could sever and transfer certain water rights.
Pursuant to the Agreement, in 2008, fifty-nine sever and
transfer applications were filed by Freeport Minerals
Corporation, and the remaining parties filed objections. In a
Freeport sub-docket, the district court denied Freeport’s
initial ten applications. The district court then adjudicated
other sever and transfer applications filed in 2008, and
eventually resolved Freeport’s remaining applications. The
district court entered its final judgment with respect to all of
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
the 419 sever and transfer applications filed in 2008, and it
was applicable to both the main docket and the Freeport sub-
docket.
Turning to jurisdiction questions, the panel held that it
lacked jurisdiction over the applications and associated
objections of non-Freeport applicants because the
applications and accompanying objections filed by the non-
Freeport defendants were voluntarily withdrawn or
dismissed without prejudice. Additionally, concerning the
non-Freeport defendants, the panel held that because there
were ongoing sever and transfer applications being litigated
on the main docket, the district court should have complied
with Fed. R. Civ. P. 54(b). Because the district court did not
follow Rule 54(b), the panel held that its September 4, 2014
order was not properly appealable as it related to the main
docket. The panel held that no Rule 54(b) finding was
required for the Freeport sub-docket because no additional
applications remained pending, and concluded that appellate
jurisdiction over Freeport’s applications and accompanying
objections was proper.
Concerning further jurisdictional issues for the Freeport
sub-docket appeals, the panel held that jurisdiction was
proper over Applications 138, 150, and 162, together with
associated counterclaims, along with the counterclaim for
Application 147, and the additional fourteen applications
appealed by Freeport. The panel left it to the district court
to decide in the first instance whether the other six
applications and associated counterclaims were moot due to
the covenants Freeport entered under the Agreement.
Turning to the merits, the panel held that the district
court did not err in holding that Freeport failed to present a
prima facie case of no injury to other Decree parties. The
panel also held that the district court did not err in denying
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 5
Freeport’s Fed. R. Civ. P. 15(b)(1) motion to amend its
applications to conform to the revised maps it filed during
discovery. The panel held that allowing Freeport to amend
its applications during closing argument would have resulted
in prejudice to the objecting parties, and may have resulted
in prejudice to additional parties under the Decree; and such
material changes should be made by filing new sever and
transfer applications.
The panel held that the district court erred by considering
whether Arizona’s law of statutory forfeiture, Arizona
Revised Statutes § 45-141(C), applied to Freeport’s water
rights when it concluded that water rights which vested prior
to 1919 could not be lost through statutory forfeiture. The
panel held that this interpretation was foreclosed by the
Arizona Supreme Court’s holding in San Carlos Apache
Tribe v. Superior Court ex rel. Cty of Maricopa, 972 P.2d
179, 187, 204 (Ariz. 1999) (en banc) (holding that statutory
forfeiture applied to pre-1919 water rights); and, thus, there
was no need for the district court to evaluate further the 1919
water code. The panel left it to the district court on remand
to determine in the first instance how statutory forfeiture
applied to the remaining objections.
The panel held that the district court did not clearly err
in determining that Freeport had abandoned its water rights
in 1.4 acres of land that were part of the sever parcel in
Application 147 because the creation of (and failure to
remove) a road and canal demonstrated an intent to abandon,
and because Freeport failed to use its water rights in the land
covered by the canal for at least eleven years. The panel held
that the district court appropriately tailored its holding by
limiting its finding of abandonment to 1.4 acres out of the
15.5 acre parcel.
6 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
The panel declined to address in the first instance the
question of abandonment of water rights in land that had
become riverbed in certain applications.
COUNSEL
John L. Smeltzer (argued), Katherine J. Barton, F. Patrick
Barry, and Yosef Negose, Attorneys, and John C. Cruden,
Assistant Attorney General, Environment & Natural
Resources Division, United States Department of Justice,
Washington, D.C.; Scott Bergstrom and Andrew Engel,
Office of the Solicitor, United States Department of the
Interior, Washington, D.C.; for Plaintiff-Appellant/Cross-
Appellee United States.
Pratik A. Shah (argued), Merrill C. Godfrey, Hyland Hunt,
and Z.W. Julius Chen, Akin Gump Strauss Hauer & Feld
LLP, Washington, D.C.; Linus Everling and Thomas L.
Murphy, Gila River Indian Community, Pima Maricopa
Tribe Law Office, Sacaton, Arizona; for Intervenor-
Plaintiff-Appellant/Cross-Appellee Gila River Indian
Community.
Joe P. Sparks (argued) and Julia Rowen Kolsrud, The Sparks
Law Firm P.C., Scottsdale, Arizona, for Intervenor-Plaintiff-
Appellant/Cross-Appellee San Carlos Apache Tribe of
Arizona.
Sean T. Hood (argued) and Rhett Billingsley, Fennemore
Craig P.C., Phoenix, Arizona, for Defendant-
Appellee/Cross-Appellant Freeport Minerals Corporation.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 7
Paul F. Eckstein (argued) Shane R. Swindle, and Vidula U.
Patki, Perkins Coie LLP, Phoenix, Arizona; David A.
Brown, Brown & Brown, St. Johns, Arizona; for Defendant-
Appellee/Cross-Appellant Gila Valley Irrigation District and
Franklin Irrigation District.
Robert B. Hoffman, Somach Simmons & Dunn,
Sacramento, California; for Defendants-Appellees/Cross-
Appellants Larry W. Barney, Viri Viva Lunt Revocable
Trust, TRP Family Trust, Ronald Howard, Janice Howard,
Myrna Curtis, Joe B. Tatum, Judy L. Tatum, Harrington
Ranch And Farm, S&R Daley, LP, Steve Daley, Ross and
Fawn Bryce Family Trust, Householder Family Limited
Partnership, and Kenneth Claridge.
John B. Weldon, Jr., Mark A. McGinnis, Lisa M. McKnight,
and Scott M. Deeny, Salmon Lewis & Weldon P.L.C.,
Phoenix, Arizona, for Amici Curiae Salt River Valley Water
Users’ Association and Salt River Project Agricultural
Improvement and Power District.
OPINION
O’SCANNLAIN, Circuit Judge:
In these consolidated appeals involving the Globe Equity
Decree of 1935, we must decide whether landowners can
transfer their rights to divert water from the Gila River which
flows through southern Arizona.
8 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
I
A
These cases arise out of litigation that began over ninety
years ago. In 1925, the United States first brought suit on
behalf of the Gila River Indian Community (“Community”)
and the San Carlos Apache Tribe (“Tribe”), seeking to
adjudicate the water rights involving the Gila River. In 1935,
the district court entered a consent decree, known as the
Globe Equity Decree (“Decree”), to govern the distribution
of water among the Community, the Tribe, and various other
landowners. See United States v. Gila Valley Irrigation Dist.,
31 F.3d 1428, 1430 (9th Cir. 1994) (“GVID IV”). The district
court has continuing jurisdiction to enforce and to interpret
the Decree, which provides for the appointment of a Water
Commissioner for such enforcement purposes.
Parties to the Decree are entitled to divert water from the
River for the “beneficial use” and “irrigation” of land in
accordance with the specified priorities. The Community
and the Tribe have the senior-most water rights (the
Community’s date from time “immemorial” and the Tribe’s
date from 1846). Covered parcels of land are described in the
Decree by reference to the number of acres located in a
quarter-quarter section 1 of the Public Land Survey System.
Parties to the Decree are permitted “to change the point of
diversion and the places, means, manner or purpose of the
use of the waters to which they are so entitled or any part
thereof, so far as they may do so without injury to the rights
of other parties.”
1
A quarter-quarter section is approximately 40 acres.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 9
B
In 1993, the district court entered an order (the “Change
in Use Rule”) outlining the procedures for severing water
rights from one piece of property and transferring them to
another. Parties must file a sever and transfer application
with the Water Commissioner, who will publish notice of
such application. If there are objections filed by other parties
to the Decree, either the applicant or the objectors may
request an evidentiary hearing before the district court. “The
applicant shall have the burden of establishing a prima facie
case of no injury to the rights of other parties under the Gila
Decree and a right to transfer.”
In 1996, the district court entered a Water Quality
Injunction, which provides that if the water quality reaching
the Tribe deteriorates below certain thresholds, the Water
Commissioner is directed to take measures limiting the
diversions of water rights holders in the Safford Valley.
In 2001, the Community, the Tribe, the United States,
and the San Carlos Irrigation and Drainage District
(“SCIDD”) jointly filed a post-judgment complaint
(“Pumping Complaint”) asking the district court to enforce
the Decree against thousands of individual landowners
(“Upper Valley Defendants” or “UVDs”) who, they claimed,
were using wells to pump subflow of the river in excess of
their decreed rights. In 2007, the Community, the SCIDD,
the United States (as plaintiff, but not the Tribe or the United
States in its capacity as trustee for the Tribe), and the UVDs
entered into the Upper Valley Forbearance Agreement
(“UVFA”) by which they agreed to dismiss the Pumping
Complaint if the UVDs permanently reduced the number of
acres they were entitled to irrigate by 1000 acres.
10 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
In addition, the UVFA provided that UVDs could sever
and transfer water rights from decreed lands to certain “Hot
Lands,” which had been irrigated but were not covered by
the Decree. If property owners filed such good faith
applications within six months of the enforceability date of
the UVFA, they could continue to irrigate these Hot Lands
while their applications were pending. The plaintiffs agreed
not to object to properly filed applications.
C
Pursuant to the UVFA, a total of 419 sever and transfer
applications were filed in 2008. Fifty-nine of these were
from Freeport Minerals Corporation (“Freeport”), who had
begun acquiring decreed lands in 1997. Freeport purchased
farms for the express purpose of obtaining water rights,
required its tenants to maintain the water rights, and paid all
water-related assessments and fees.
The United States, the Tribe, and the Community
(“Plaintiffs”) filed objections to the sever and transfer
applications. 2 After receiving proposals from the interested
parties on the best way to manage so many applications, the
district court began by adjudicating Freeport’s applications
first. Accordingly, it created a sub-docket, No. 4:31-cv-
00061-SRB, to which it transferred Freeport’s fifty-nine
applications, while staying the proceedings on other parties’
applications. At the district court’s invitation, the parties
2
Although under the UVFA the United States and Community had
agreed not to object to properly filed applications, the Community
contended that the applications at issue did not conform to the Change in
Use Rule, making its objections appropriate, and the district court
accepted this assertion.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 11
selected ten of Freeport’s applications for initial
adjudication. 3
In its applications, Freeport described its parcels by
reference to the quarter-quarter section in which they fell but
did not indicate a more specific location for the lands to and
from which it was seeking to sever and to transfer water
rights. After a ruling by the district court that sever and
transfer applications should identify the “precise locations of
the parcels within the quarter-quarter section,” Freeport
hired a consultant to create more detailed maps and legal
descriptions of the lands at issue. Freeport disclosed these
revised maps and descriptions during discovery in
November 2009. The revisions affected the locations and
legal descriptions of multiple parcels, though each map
revision fell within the same overall quarter-quarter section
as its original application.
D
The district court held an evidentiary hearing (which the
parties refer to as a “trial”) on Freeport’s initial ten
applications from February 9–25, 2010 and denied them all
on August 3, 2010, granting the Tribe’s motion for judgment
as a matter of law. The court concluded that (1) Freeport had
failed to present a prima facie case of no injury to other
Decree parties, (2) Arizona’s statutory forfeiture law did not
apply, and (3) Freeport had partially abandoned the water
rights in one of its proposed sever parcels, and (4) it further
declined to amend Freeport’s applications to conform to its
revised maps.
3
Applications 2008-115, -118, -122, -133, -138, -147, -150, -151, -
162 and -166.
12 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
Freeport attempted to appeal the order, but we declined
jurisdiction because it was “neither a partial nor a final
judgment.” United States v. Sunset Ditch Co., 472 F. App’x
472, 474 (9th Cir. 2012). We instructed the district court that
it needed to “resolve issues related to Freeport’s other
applications, as well as issues related to other applicants.”
Id. at 473.
Thereafter, the district court proceeded to adjudicate
other sever and transfer applications filed in 2008. Freeport’s
remaining applications were either denied or withdrawn.
Pursuant to the UVFA, Freeport entered into covenants
agreeing “to retire certain decreed water rights and to refrain
from irrigating” the lands that were the subject of six of the
original ten applications first adjudicated by the district
court. 4 All of the remaining 2008 applications from non-
Freeport parties were eventually withdrawn.
E
On September 4, 2014, the district court entered “final
judgment with respect to, and in accordance with, all the
Court’s orders and proceedings on the 419 applications to
sever and transfer Decree water rights filed with the Water
Commissioner in 2008,” applicable both to the main docket,
No. 4:31-cv-00059-SRB, as well as the separate Freeport
sub-docket, No. 4:31-cv-00061-SRB. Nonetheless, there
have been new sever and transfer applications filed on the
main docket since 2008, and the district court continues to
4
These applications are 2008-115, -118, -122, -133, -151, and -166.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 13
adjudicate issues on such docket (but not the Freeport
docket). 5
The United States, the Community, and the Tribe timely
appealed, and Freeport, Gila Valley Irrigation District,
Franklin Irrigation District, Larry W. Barney, Viri Viva Lunt
Revocable Trust, TRP Family Trust., Ronald Howard,
Janice Howard, Myrna Curtis, Joe B. Tatum, Judy L. Tatum,
Harrington Ranch And Farm, S&R Daley, LP, and Steve
Daley, Ross and Fawn Bryce Family Trust, Householder
Family Limited Partnership, and Kenneth Claridge timely
cross-appealed.
II
Before reaching the merits, various jurisdictional
questions have been brought to our attention by the parties,
which must first be resolved. “We, of course, have
jurisdiction to determine our own jurisdiction.” Special
Invs., Inc. v. Aero Air, Inc., 360 F.3d 989, 992 (9th Cir.
2004).
A
As the parties explain, the sever and transfer applications
of all of the non-Freeport applicants that were filed in 2008
have been voluntarily withdrawn or dismissed without
prejudice, together with their accompanying objections.
5
We GRANT the motion of Gila Valley Irrigation District et al.
filed on February 9, 2017 to take judicial notice of the sever and transfer
applications filed with the Water Commissioner in 2014 by Ronald G.
and Janice A. Howard and S&R Daley LP, together with the
accompanying declaration of Herbert Dishlip. These applications are still
pending on the main docket.
14 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
“Article III’s ‘case-or-controversy’ requirement
precludes federal courts from deciding ‘questions that
cannot affect the rights of litigants in the case before them.’”
Protectmarriage.com-Yes on 8 v. Bowen, 752 F.3d 827, 834
(9th Cir. 2014) (quoting DeFunis v. Odegaard, 416 U.S.
312, 316 (1974) (per curiam)). Indeed, “the general rule in
this circuit” is that “voluntary dismissals without prejudice
do not create appealable, final judgments.” Romoland Sch.
Dist. v. Inland Empire Energy Ctr., LLC, 548 F.3d 738, 748
(9th Cir. 2008); see also Concha v. London, 62 F.3d 1493,
1507 (9th Cir. 1995). But see James v. Price Stern Sloan,
Inc., 283 F.3d 1064, 1070 (9th Cir. 2002) (carving out a
limited exception to this rule).
Because the applications and accompanying objections
filed by non-Freeport defendants have been voluntarily
withdrawn or dismissed without prejudice, any decision of
this court will affect the rights of these parties only
tangentially by outlining legal principles which could apply
to future applications. Thus, as counsel for the non-Freeport
defendants admitted at oral argument, this court lacks
jurisdiction over the applications and associated objections
of non-Freeport applicants.
B
1
There is a further reason to decline jurisdiction over the
appeals of non-Freeport defendants, as they also recognize.
“A district court order is . . . not appealable unless it disposes
of all claims as to all parties or unless judgment is entered in
compliance with Federal Rule of Civil Procedure 54(b).”
Romoland Sch. Dist., 548 F.3d at 747. Federal Rule of Civil
Procedure 54(b) provides:
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 15
When an action presents more than one claim
for relief—whether as a claim, counterclaim,
crossclaim, or third-party claim—or when
multiple parties are involved, the court may
direct entry of a final judgment as to one or
more, but fewer than all, claims or parties
only if the court expressly determines that
there is no just reason for delay. Otherwise,
any order or other decision, however
designated, that adjudicates fewer than all the
claims or the rights and liabilities of fewer
than all the parties does not end the action as
to any of the claims or parties and may be
revised at any time before the entry of a
judgment adjudicating all the claims and all
the parties’ rights and liabilities.
(emphasis added).
Thus, as Rule 54(b) makes plain, “[f]inality is achieved
only if the court takes each of two steps—it must make an
‘express determination that there is no just reason for delay’
and it also must make ‘an express direction for the entry of
judgment.’” 15A Charles Alan Wright, Arthur R. Miller &
Edward H. Cooper, Federal Practice and Procedure:
Jurisdiction and Related Matters § 3914.7 (2d ed. 1991).
Here the district stated that it was entering “final
judgment with respect to . . . the 419 applications . . . filed
. . . in 2008.” But it never made an “express determination”
that there was no need for further delay. One might argue
that the district court’s order of “final judgment” necessarily
means that the district court thought there was no reason to
delay appeal. Yet, “[i]nterpreting a judgment as a Rule 54(b)
determination without the required findings would
16 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
effectively read out those requirements from Rule 54(b).”
Am. States Ins. Co. v. Dastar Corp., 318 F.3d 881, 889 (9th
Cir. 2003).
The United States and Community contend that we have
jurisdiction “over any order that finally resolves all matters
in a post-judgment proceeding.” Indeed, “[t]he Supreme
Court has emphasized that the finality requirement is to be
given ‘a “practical rather than a technical construction.”’”
United States v. Ray, 375 F.3d 980, 985 (9th Cir. 2004)
(quoting Firestone Tire & Rubber Co. v. Risjord, 449 U.S.
368, 375 (1981)). Further, “when post-judgment orders are
involved[,] [t]he policy against and the probability of
piecemeal review [one of the major justifications for the
final order doctrine] is not as decisive a consideration after
judgment as before judgment since the underlying dispute is
already settled.” Id. at 986 (first and second alteration in
original) (quoting United States v. Washington, 761 F.2d
1404, 1406 (9th Cir. 1985)); see also Armstrong v.
Schwarzenegger, 622 F.3d 1058, 1064–65 (9th Cir. 2010).
Yet, such cases addressed whether post-judgment orders
could be final for purposes of 28 U.S.C. § 1291, rather than
discussing the procedural requirements needed to make an
order final under Rule 54(b). There is no question that a post-
judgment order can be treated as a final order, even if there
remain other, ongoing post-judgment proceedings. See Ray,
375 F.3d at 986. But this does not free the district court from
the strictures of Rule 54(b).
It is true that in the context of post-judgment proceedings
in Washington, 761 F.2d at 1406–07, we held that a district
court’s decision to adopt a five-year “interim” plan,
governing the number of fish permitted to escape certain
fisheries, was appealable as a final order, although the
district court did not certify it under Rule 54(b) or as an
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 17
interlocutory appeal under 28 U.S.C. § 1292(b). But we
never evaluated the application of Rule 54(b) in that case.
Thus, Washington explains why, in the context of district
court’s ongoing jurisdiction over a consent decree, it may be
sensible to treat certain orders resolving discrete issues as
“final,” but it does not explain why such orders should be
exempt from Rule 54(b).
Indeed, a Rule 54(b) explanation is especially helpful
where (as here) there are multiple parties litigating multiple
claims at differing stages, leading to the possibility of
confusion and overlap. It is undisputed that there are ongoing
sever and transfer applications being litigated on the main
docket (No. 4:31-cv-00059-SRB), which were filed in 2014.
While resolution of these applications need not affect the
disposition of the 419 applications from 2008, if the district
court wanted to evaluate sever and transfer applications in
discrete chronological chunks, it should have followed Rule
54(b), which governs a district court’s authority to enter final
judgment for some (rather than all) claims or parties.
Because the district court failed to find that there was no
need for further delay, its September 4, 2014 order was not
properly appealable, as it relates to the main docket, No.
4:31-cv-00059-SRB.
2
Unlike the main docket, however, the Freeport sub-
docket, 4:31-cv-00061-SRB, has no additional applications
that remain pending. Indeed, the September 4, 2014 order
conclusively resolved the claims of all parties on the
Freeport docket. Thus, no Rule 54(b) finding was required
for appeals from this docket, and jurisdiction over Freeport’s
applications and the accompanying objections is proper.
18 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
C
Nonetheless, there are further jurisdictional questions
surrounding the appeals from the Freeport docket.
1
Of the ten applications originally decided by the court in
August 2010, Freeport contends that six of them 6 have
become moot because it entered into covenants not to
exercise its water rights in the lands covered by these
applications pursuant to the UVFA. Freeport further
neglected to appeal a seventh application that was the subject
of the district court’s August 2010 order, Application 2008-
147. Nevertheless, Freeport now argues that we have
jurisdiction to review the district court’s finding of
abandonment in the transfer parcel that was the subject of
Application 147.
Notwithstanding the covenants, the Community, Tribe,
and United States maintain that their objections to all ten of
the applications decided by the district court in August 2010
remain pending. They observe that the district court chose to
treat their objections as counterclaims and ruled that
objections would remain pending even if the target
application was withdrawn. 7 With respect to the six
6
Applications 2008-115, -118, -122, -133, -151, -166.
7
The district court has broad discretion to enforce the Decree (under
its terms) and set the rules for how to adjudicate disputes in these post-
judgment proceedings. Nevertheless, while the district court was well
within its authority to construe the objections as counterclaims, the
constitutional floor of a case or controversy remains. See Timbisha
Shoshone Tribe v. U.S. Dep’t of Interior, 824 F.3d 807, 813–14 (9th Cir.
2016). Therefore, as the district court appears to have recognized, once
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 19
applications that Freeport maintains are moot, the Plaintiffs
argue that if the water rights covered by these applications
had already been forfeited or abandoned prior to Freeport’s
decision to enter into the covenants, these lands could not
have counted toward the reduction of irrigable acres that was
required by the UVFA. Thus, they contend that adjudication
of these six counterclaims will continue to have real-world
consequences for the parties, because a finding of forfeiture
would require the UVDs to identify additional acres not to
water in order to comply with the UVFA.
However, Plaintiffs made such point in a footnote in their
supplemental brief on jurisdiction, which was filed at our
request. The Plaintiffs do not provide sufficient background
on the UVFA, and the covenants made pursuant to it, to
enable us to decide whether this interpretation of the UVFA
is correct. Moreover, Freeport has not had an opportunity to
respond to this claim.
the underlying application is withdrawn, objections need to have
independent viability, rather than being based on procedural issues with
the application, to have continued force. In other words, such objections
must be proper counterclaims—such as a claim that Freeport has
forfeited or abandoned its water rights—rather than defenses to the
application—such as a claim that an application failed to present a prima
facie case of no injury or failed to specify with sufficient particularity
the property at issue. Cf. Cardinal Chem. Co. v. Morton Int’l, Inc.,
508 U.S. 83, 93–94 (1993) (“An unnecessary ruling on an affirmative
defense is not the same as the necessary resolution of a counterclaim for
a declaratory judgment.”). Thus, where Freeport’s underlying
applications have been withdrawn, we hold that only objections of
forfeiture or abandonment remain pending.
20 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
2
As a general rule, we will not consider arguments that
are raised for the first time on appeal.” Smith v. Marsh,
194 F.3d 1045, 1052 (9th Cir. 1999). Both Freeport’s claim
of mootness and the Plaintiffs’ response arose after the
district court’s August 2010 order. Because it was not
presented to the district court, we decline to address the issue
in the first instance.
There is no dispute that we have jurisdiction over the
three applications (and accompanying counterclaims) that
were covered by the district court’s August 2010 order and
have not been impacted by restrictive covenants. 8
Further, we agree with Freeport that we have jurisdiction
to review the district court’s finding of abandonment with
respect to the land that was at issue in Application 147.
Although Freeport did not appeal denial of Application 147,
it is possible for the issue to have independent viability apart
from the application because the district court treated
Plaintiffs’ objections of abandonment as counterclaims. 9 Cf.
Fed. R. Civ. P. 41(a)(2). Freeport vigorously contested the
finding of abandonment in its opening brief. Thus, we are
satisfied that Freeport has properly raised the issue on
appeal, notwithstanding its failure to appeal the denial of
Application 147 itself.
8
Applications 2008-138, -150, and -162.
9
Indeed, the district court issued a separate judgment regarding its
finding of abandonment for a portion of the land that was the subject of
Application 147, apart from its rejection of Freeport’s applications.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 21
3
Finally, there are Freeport’s remaining applications.
Prior to the district court’s August 2010 order, Freeport
withdrew seven of its original fifty-nine applications. After
the district court’s August 2010 order denied ten of
Freeport’s applications, Freeport voluntarily withdrew
another twenty-two applications, and the district court
denied the last twenty applications pursuant to the rulings in
its August 2010 order. Freeport appeals from the denial of
fourteen of these twenty applications. 10 Although we lack
jurisdiction over the applications (and objections) that were
voluntarily withdrawn, Romoland Sch. Dist., 548 F.3d at
748, because the non-withdrawn fourteen applications were
denied by the district court, jurisdiction is proper as to them.
4
Thus, we are satisfied that jurisdiction is proper over
Applications 138, 150, and 162, together with their
associated counterclaims, along with the counterclaim for
Application 147, and the additional fourteen applications
appealed by Freeport. Because these applications present the
forfeiture, abandonment, 11 prima facie case, and procedural
issues raised by the parties, there are no jurisdictional bars to
our review of these issues. We leave it to the district court to
decide in the first instance whether the other six applications
and associated counterclaims have become moot due to the
covenants Freeport has entered under the UVFA.
10
Applications 2008-114, -117, -121, -126, -131, -132, -134, -135,
-146, -148, -149, -153, -155, and -156.
11
In part. See infra Part III.E.
22 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
III
Turning to the merits, Freeport contends that the district
court erred by granting judgment as a matter of law to
Plaintiffs. 12
A
Freeport first disputes the district court’s holding that it
failed to present a prima facie case of no injury to other
Decree parties.
Article XI of the Decree provides that “any of the parties
to whom rights to water have been decreed herein shall be
entitled, in accord with applicable laws and legal principles,
to change the point of diversion . . . so far as they may do so
without injury to the rights of other parties.” (emphasis
added). Following this mandate, the Change in Use Rule,
issued by the district court, states: “[t]he applicant shall have
the burden of establishing a prima facie case of no injury to
the rights of other parties under the Gila Decree and a right
to transfer.” Once such prima facie case has been made, “the
burden of proof . . . shift[s] from the applicant to the
objecting party to demonstrate that injury will result from the
proposed change.”
In its applications, Freeport provided the following
paragraph in an attempt to fulfill its prima facie burden:
All that will be changed as a result of this
application will be the location of decreed
12
“In reviewing a judgment following a bench trial, this court
reviews the district court’s findings of fact for clear error and its legal
conclusions de novo.” Dubner v. City & Cty. of San Francisco, 266 F.3d
959, 964 (9th Cir. 2001).
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 23
rights and associated point of diversion under
the Globe Equity No. 59 Decree. The
priorities, volumes of water use and acreage
will not change. There will be no net increase
or decrease in decreed rights as a result of this
proposed severance and transfer.
Freeport relied on this statement at trial and thus did not
present any evidence regarding the absence of injury as part
of its case in chief, although it did offer expert testimony on
rebuttal.
The district court found that by making such generalized
assertions, Freeport failed to fulfill its prima facie burden.
Indeed, accepting such assertions would render the prima
facie burden a nullity, since under the Decree a party may
transfer no more water than it has a right to use, and priorities
will remain unchanged after transfer. Instead, the district
court held that Freeport needed to address issues of water
quantity (with particular attention to a section of the river
known as Cosper’s Crossing) and quality diminution, as well
as the cumulative impact of its proposed sever and transfer
applications.
We discuss each in turn. At the outset, we agree with the
district court that in order to make a prima facie case of no
injury, parties must do more than recite that the quantity of
water being diverted and the order of priorities remain the
same. Merely recapitulating the protections of the Decree
does not demonstrate that there will be no “injury to the
rights of other parties,” as the Decree requires.
“It is axiomatic in water law that the appropriator, be he
junior or be he senior, always has the burden of establishing
that a change in his diversion or in his use of water has not
affected the rights of other appropriators . . . .” Zannaras v.
24 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
Bagdad Copper Corp., 260 F.2d 575, 577 (9th Cir. 1958).
Possible injury should be “analyzed by comparing the
impact of a proposed change against a baseline of existing
conditions.” United States v. Orr Water Ditch Co., 309 F.
Supp. 2d 1245, 1253 (D. Nev. 2004), aff’d sub nom. United
States v. Truckee-Carson Irrigation Dist., 429 F.3d 902 (9th
Cir. 2005).
1
The Gila River has a unique feature known as “Cosper’s
Crossing,” a portion of the river that frequently runs dry
above ground. Under a previous arrangement, when
Cosper’s Crossing is dry, upstream water-users are
permitted to divert the entire flow of the river before it
reaches Cosper’s Crossing, in disregard of senior rights
downstream. See United States v. Gila Valley Irrigation
Dist., 920 F. Supp. 1444, 1462–66 (D. Ariz. 1996), aff’d,
117 F.3d 425 (9th Cir. 1997) (Mem.).
At least one of Freeport’s pending applications involved
a request to transfer water rights downstream from Cosper’s
Crossing to a location above Cosper’s Crossing. 13 It seems
likely that such a change could affect Cosper’s Crossing, as
the district court found. If these transfers caused Cosper’s
Crossing to run dry earlier, then the preexisting arrangement
allowing upstream users to divert the entire flow of the river
would be triggered, exacerbating the injury to the rights of
downstream owners like the Tribe.
Freeport contends that if such situation occurs, the Tribe
can issue a call which requires all diversions above Cosper’s
Crossing to cease. Indeed, Freeport makes a similar
13
Application 162.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 25
argument regarding any potential injury that results from
transferring the location of its water rights—the Tribe, as
senior appropriator, can make a call that requires the Upper
Valley rights holders to cease diverting water. While
Freeport is correct, such remedy operates only after a
violation of the Tribe’s rights has already occurred. It does
not prevent injury—the very thing that the Decree states
must be avoided.
Indeed, there is a delay between the time upstream
diversions cease and the time the Tribe actually receives
water. Such delays are inimical to the Tribe’s ability to grow
crops, which will die if they do not receive water at the
appropriate time. According to testimony from the Water
Commissioner, there is already insufficient water to meet the
Tribe’s demands. Anything that exacerbates these shortages
could detrimentally impact the Tribe’s rights.
2
More generally, changing the location of diversions has
the potential to affect the return flow of water into the river.
As the district court explained:
For example, if the distance from the
proposed diversion point to the proposed
place of use is much greater than the distance
from the existing diversion point to the
existing place of use, then more water will be
lost by evaporation in transport, thereby
decreasing the return flow from the proposed
water use. If the soil at the proposed place of
use causes greater consumptive use of water,
or the proposed ditch is less water efficient
than the existing ditch, then the return flow
also decreases. Likewise, if a portion of the
26 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
proposed ditch flows outside the Gila
subflow zone, then a portion of the return
flow does not end up in the Gila River for use
by other Decree water right holders.
While any impact from a particular transfer might be
minimal, this is for the applicant to demonstrate. Freeport
failed to address any of the preceding concerns in its case in
chief.
3
Changing the type of diversion can also impact water
quality. At least one of Freeport’s remaining applications
(Application 162) proposed changing a ground level
diversion to a pumping diversion (i.e. a well). Groundwater
pumped from a well is higher in salinity than surface flow;
thus, over time, pumping increases the level of salt in the
Gila River, which in turn negatively affects the Tribe, who
has already struggled with salty water that is unsuitable for
growing crops (hence the Water Quality Injunction). See
Gila Valley Irrigation Dist., 920 F. Supp. at 1449–51.
Freeport again argues that the Tribe can rely on the
Water Quality Injunction to stop such diversions if salinity
levels become too high, but, as discussed, such remedy
operates only if there has been an initial infringement of the
Tribe’s rights. Thus, the Injunction does not prevent injury
to the rights of other parties.
4
Freeport further argues that the district court erred by
requiring it to assess the cumulative impact of its sever and
transfer applications. Because each application is filed
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 27
individually, Freeport argues that they should be
individually analyzed.
Nonetheless, “[i]n an equitable proceeding such as this,
all . . . evidence is relevant to making an informed decision.”
GVID IV, 31 F.3d at 1433. There is no question that multiple
sever and transfer applications may cause significant
impacts upon the River, which would not result from a single
application. Since each party to the Decree is enjoined from
“in any manner . . . prevent[ing] or interfer[ing] with the
diversion, use or enjoyment of [the] waters by the owners of
prior or superior rights,” when a single party presents
multiple sever and transfer applications concurrently, it is
sensible to analyze their cumulative effect. 14
5
In sum, there are multiple issues of injury that Freeport
could have addressed, including the impact of its proposed
transfers on Cosper’s Crossing and the return flow and
salinity levels of the Gila River, both individually and
cumulatively. Instead, Freeport presented absolutely no
evidence in its case in chief regarding the impact of its
proposed transfers upon the rights of other parties to the
Decree. Given Freeport’s utter failure to meet its prima facie
burden, the district court did not err in rejecting Freeport’s
applications on this basis.
B
Freeport further contends that the district court erred by
denying its motion under Federal Rule of Civil Procedure
14
The same logic may not apply, however, when different parties
present sever and transfer applications in the same time period.
28 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
15(b)(1) to amend its applications to conform to the revised
maps it filed during discovery.
Rule 15(b)(1) provides:
If, at trial, a party objects that evidence is not
within the issues raised in the pleadings, the
court may permit the pleadings to be
amended. The court should freely permit an
amendment when doing so will aid in
presenting the merits and the objecting party
fails to satisfy the court that the evidence
would prejudice that party’s action or defense
on the merits.
Fed. R. Civ. P. 15(b)(1). We review a district court’s Rule
15(b) decisions for abuse of discretion. 15 Madeja v. Olympic
Packers, LLC, 310 F.3d 628, 635 (9th Cir. 2002).
1
There is a significant dispute with respect to whether
Freeport ever asked the district court to amend its
applications to conform to the revised legal descriptions
presented by the new maps. At the hearing, the district court
15
The government argues that Rule 15 does not apply because these
are post-judgment proceedings and the sever and transfer applications
are not, strictly speaking, pleadings. We agree with the government that
the district court has broad discretion to set the rules for adjudicating
sever and transfer applications. See supra note 7. Nevertheless, because
the district court ruled that the Federal Rules of Civil Procedure would
apply to these proceedings, and appears to have considered the
possibility of amendment under Rule 15, we evaluate the issue under the
Rule 15 framework.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 29
specifically asked Freeport about the significance of the
revised legal descriptions. 16 During closing argument,
Freeport informed the court that its answer was “it depends.”
When the district court noted that Freeport had not requested
a Rule 15 amendment, Freeport’s counsel stated “We’re not
going to ask.” Nevertheless, Freeport informed the court that
if it found the original descriptions insufficient, then
Freeport’s “alternative” would be to “go with the revised
legal descriptions[,] and that’s what [it] would request.”
Thus, rather than taking a firm position, Freeport attempted
to play both sides of the issue, which essentially amounted
to a request for the district court to rely on whichever maps
it preferred. 17
It is true that “Federal Rule of Civil Procedure 15(b)
embodies a liberal policy in favor of allowing pleading
amendments at any time during and even after trial.” Consol.
Data Terminals v. Applied Digital Data Sys., Inc., 708 F.2d
385, 396 (9th Cir. 1983). Indeed, under Rule 15, “leave to
amend ‘should be granted unless amendment would cause
prejudice to the opposing party, is sought in bad faith, is
futile, or creates undue delay.’” Madeja, 310 F.3d at 636(quoting Yakama Indian Nation v. Wash. Dep’t of Revenue,
176 F.3d 1241, 1246 (9th Cir. 1999)).
16
Prior to the hearing, Freeport had taken an ambiguous position,
contending that its original legal descriptions were sufficient, while
offering the revised descriptions in an attempt to resolve objections.
Notably, Freeport does not argue that it moved to amend its applications
when it submitted the revised maps before the hearing.
17
Indeed, the district court appears to have concluded that Freeport
never made a request for amendment. In its order, the district court
observed that “Freeport never filed the changes as application
amendments with the . . . Court.”
30 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
Thus, in the context of Rule 15(b)(2), we have found that
in the absence of a formal request for amendment, “a district
court may amend the pleadings merely by entering findings
on the unpleaded issues.” Galindo v. Stoody Co., 793 F.2d
1502, 1513 n.8 (9th Cir. 1986). But Rule 15(b)(2) states that
an issue “must be treated . . . as if raised in the pleadings”
when it “is tried by the parties’ express or implied consent.”
Fed R. Civ. P. 15(b)(2) (emphasis added).
Freeport is not arguing that the parties impliedly
consented to amendment of its applications under Rule
15(b)(2), however. Instead, its claim is based on Rule
15(b)(1), which states that a “court may permit the pleadings
to be amended” if “a party objects that evidence is not within
the issues raised in the pleadings.” Fed. R. Civ. P. 15(b)(1)
(emphasis added). Thus, under Rule 15(b)(1), the district
court certainly was not required to amend Freeport’s sever
and transfer applications in the absence of a formal request,
and even if Freeport made such a request, the district court
had discretion to deny it.
2
Regardless of whether Freeport properly moved for
amendment, the district court evaluated the issue. It
determined that the revised legal descriptions were “material
changes” to Freeport’s applications, and that “material
change[s]” could not be made after sever and transfer
applications have been published by the Water
Commissioner for other Decree parties to review. Freeport
contends that the district court’s ruling on material changes
is inconsistent with Rule 15(b)(1).
The district court was correct that the changes made by
the revised maps were significant. In some applications
Freeport wholly replaced the description of one parcel of
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 31
land with that of another. In other instances, the revised
descriptions changed the number of acres involved or the
shape of the parcel at issue. Such amendments raise issues
of notice.
Freeport contends that such notice concerns are
overblown. Parties to the litigation had notice once Freeport
submitted its revised maps as part of discovery. Yet, even
though they were aware of the revised descriptions, given
Freeport’s failure to move to amend its applications prior to
the hearing, and its (at best) half-hearted attempt to request
an amendment during closing argument, the objecting
parties could not be certain which legal descriptions (and
corresponding parcels) they needed to address. Knowing the
precise location of the sever and transfer parcels was crucial
to the parties’ ability to evaluate the impact of the proposed
transfers.
Apart from the parties to this suit, the district court also
observed that the revised descriptions created notice
problems for other landowners covered by the Decree.
Freeport argues that any concerns with notice for other
Decree parties not participating in this litigation are
irrelevant. According to Freeport, if it had submitted new
sever and transfer applications, the descriptions of the land
that would have been published by the Water Commissioner
would have listed the very same quarter-quarter sections as
its original applications, because the changes still involved
land located in the same quarter-quarter section. In other
words, the notices would be identical.
Nevertheless, as the Community observes, any Decree
party may request a mailed copy of the entire application,
which would have included the revised maps. Presumably,
any interested parties would make such request and then use
the application to evaluate whether to file an objection. Thus,
32 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
contrary to Freeport’s claim, amending sever and transfer
applications at the eleventh hour would have prejudiced
other Decree parties, who might have chosen to object.
Because allowing Freeport to amend its applications
during closing argument would have resulted in prejudice to
the objecting parties in this suit and may have resulted in
prejudice to additional parties under the Decree, as in
Madeja, 310 F.3d at 636, we conclude that the district court
did not abuse its discretion in rejecting any attempt by
Freeport to amend its applications. Where, as here, “material
changes” will prejudice parties by lack of notice, we agree
with the district court that such changes should be made by
filing new sever and transfer applications.
C
Finally, we turn to the question of whether Arizona’s law
of statutory forfeiture applies to Freeport’s water rights. 18
1
Under Arizona Revised Statutes § 45-141(C):
Except as otherwise provided in this title or
in title 48, when the owner of a right to the
use of water ceases or fails to use the water
appropriated for five successive years, the
right to the use shall cease, and the water shall
revert to the public and shall again be subject
to appropriation. This subsection or any other
18
Apart from the dismissal of Freeport’s applications, the remaining
objections to Applications 138, 150, and 162 (for which there are no
mootness concerns) present the forfeiture issue.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 33
statutory forfeiture by nonuse shall not apply
to a water right initiated before June 12, 1919.
This section was amended in 1995 to include the last
sentence prohibiting the application of forfeiture to water
rights which vested before 1919. See San Carlos Apache
Tribe v. Superior Court ex rel. Cty. of Maricopa, 972 P.2d
179, 187, 204 (Ariz. 1999) (en banc); 1995 Ariz. Sess. Laws
18. In San Carlos Apache Tribe, the Arizona Supreme Court
held that the last sentence violated the due process clause of
the Arizona Constitution by retroactively altering vested
rights, which may have already been forfeited to others.
972 P.2d at 189–90, 201. The Arizona Supreme Court
concluded that “[f]orfeiture and resultant changes in priority
must be determined under the law as it existed at the time of
the event alleged to have caused the forfeiture.” Id. at 190.
The district court decided to conduct an independent
analysis to determine whether Arizona’s 1919 water code
permitted the application of statutory forfeiture (which was
created by the code) to water rights which vested before the
passage of the code in 1919. In other words, the district court
asked whether Arizona’s water law provided an alternative
source for the rule contained in the offending clause of § 45-
141(C).
Based on a savings clause in the 1919 code, and Nevada
cases interpreting a similar clause in Nevada’s water code of
1913, the district court concluded that water rights which
vested prior to 1919 could not be lost through statutory
forfeiture. See Laws of Ariz., Ch. 164, § 1 (1919); United
States v. Orr Water Ditch Co., 256 F.3d 935, 941–43 (9th
Cir. 2001); In re Manse Spring & Its Tributaries, 108 P.2d
311, 315–16 (Nev. 1940). Thus, the district court held that
34 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
Arizona water law contained an almost identical rule prior to
the 1995 amendment.
2
Such interpretation was foreclosed, however, by the
Arizona Supreme Court’s holding in San Carlos Apache
Tribe. By finding § 45-141(C) unconstitutionally
retroactive, the Arizona Supreme Court necessarily held that
the 1995 amendment constituted a change in the law. See
San Carlos Apache Tribe, 972 P.2d at 189–90.
Indeed, the Arizona Supreme Court repeatedly
emphasized that retroactive statutes are problematic because
they change the law that applied to past events. Thus, the
Arizona Supreme Court explained that “[a] statute may not
. . . ‘attach[] new legal consequences to events completed
before its enactment.’” Id. at 189 (second alteration in
original) (quoting Landgraf v. USI Film Prods., 511 U.S.
244, 270 (1994)). It further observed that “legislation may
not disturb vested substantive rights by retroactively
changing the law that applies to completed events.” Id.Again, the court reiterated that “[t]he Legislature may not
. . . change the legal consequence of events completed before
the statute’s enactment.” Id. Therefore, “the Legislature
cannot revive rights that have been lost or terminated under
the law as it existed at the time of an event and that have
vested in otherwise junior appropriators.” Id.When evaluating § 45-141(C) specifically, the Arizona
Supreme Court held that the statute “create[d] a new and
unconstitutional protection for pre-1919 water rights that
may have been forfeited and vested in others under the law
existing prior to 1995.” Id. at 190 (emphasis added). In order
for this “new” provision to be unconstitutionally retroactive,
it must have changed the law. And if the 1995 amendment
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 35
to § 45-141(C) changed the law, prior to this point, water
rights which vested before 1919 were subject to statutory
forfeiture.
Thus, the district court erred. There was no need to
evaluate further the 1919 water code. The Arizona Supreme
Court is the final arbiter of Arizona law, and it had already
found that statutory forfeiture applies to pre-1919 water
rights. 19
Without the offending amendment, 20 § 45-141(C)
provides that when the owner of a water right fails to use the
19
Note that even if the Arizona Supreme Court had not decided this
question, there would still be good reason to reject the district court’s
interpretation of the 1919 water code. The savings clause upon which it
relied was deleted from later versions of the code, and forfeiture “must
be determined under the law as it existed at the time of the event alleged
to have caused the forfeiture.” San Carlos Apache Tribe, 972 P.2d at 190.
The extent to which the savings clause might survive in other portions of
the code is contested.
Further, the 1919 savings clause may be best read as a prohibition
against the retrospective application of statutory forfeiture. It provided
that “nothing herein contained shall be so construed as to take away or
impair the vested rights which any person, firm, corporation or
association may have . . . at the time of passage of this act.” Laws of
Ariz., Ch. 164, § 1 (1919) (emphasis added). Under such interpretation,
the forfeiture provision would not apply to a person who failed to use his
water right for five consecutive years preceding the enactment of the
code (i.e. before 1919), but could apply to someone who failed to use his
water rights for five years following enactment of the code (i.e. 1919
onward).
20
We assume that the statutory forfeiture provided for in § 45-
141(C) remains in force without the last sentence prohibiting its
application to water rights which vested before 1919. The Arizona
Supreme Court held that § 45-141(C) was unconstitutional insofar as it
“eliminate[ed] any possibility of forfeiture for rights initiated before June
36 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
right for five years, he loses that right. Because the district
court rejected statutory forfeiture, it did not consider how
forfeiture would affect the water rights at issue, and the
parties have provided little guidance on appeal. Therefore,
we leave it to the district court on remand to determine in the
first instance how statutory forfeiture applies to the
remaining objections. 21
D
Freeport also argues that the district court erred by
finding that it had abandoned its water rights in 1.4 acres of
land covered by a road and a canal that was at issue in
Application 147.
1
Under Arizona law, “[a]ny person who is entitled to
divert or withdraw public waters of the state . . . who
intentionally abandons its use relinquishes that right.” Ariz.
12, 1919.” San Carlos Apache Tribe, 972 P.2d at 201. Although the
Arizona Supreme Court did not explicitly address the severability of this
provision from the larger section, “[a]n entire statute need not be
declared unconstitutional if constitutional portions can be separated.”
Republic Inv. Fund I v. Town of Surprise, 800 P.2d 1251, 1259 (Ariz.
1990) (en banc). “The test for severability . . . [is] legislative intent.” Id.Since prior to 1995, subsection § 45-141(C) did not contain the
offending last sentence, we conclude that legislature intended this
sentence to be severable.
21
Because the remaining sever and transfer applications can be
dismissed on other grounds, there is no need to evaluate the application
of statutory forfeiture as to them.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 37
Rev. Stat. Ann. § 45-188(B). 22 Thus, “[a] water right is
deemed abandoned if the holder intends to abandon the right
and a period of non-use occurs.” Phelps Dodge Corp. v. Ariz.
Dep’t of Water Res., 118 P.3d 1110, 1115 (Ariz. Ct. App.
2005) (citing Gould v. Maricopa Canal Co., 76 P. 598, 601
(Ariz. Terr. 1904)). “[I]ntent may be manifested or inferred
from [an] act,” City of Tucson v. Koerber, 313 P.2d 411, 418
(Ariz. 1957).
Whether a party has abandoned a water right “depends
upon the facts and circumstances surrounding each
particular case.” Landers v. Joerger, 140 P. 209, 210 (Ariz.
1914) (internal quotation marks omitted). Therefore,
because “it is a question of fact,” id., we review a district
court’s finding of abandonment for clear error, Fed. R. Civ.
P. 52(a)(6).
2
Here the district court found that a “prolonged period of
non-use,” coupled with improvements to the property that
were “incompatible with irrigation” (the construction of the
road and canal), as well as Freeport’s failure to attempt to
transfer the water rights prior to 2008, provided sufficient
evidence that Freeport intended to abandon its water rights.
22
See also Ariz. Rev. Stat. Ann. § 45-188(A). Section 45-188(B)
covers water rights that vested before June 12, 1919, and § 45-188(A)
covers water rights that vested after June 12, 1919. Section 45-188 was
held to be unconstitutional in part by San Carlos Apache Tribe, 972 P.2d
at 191, 202, because the 1995 amendments to § 45-188 changed the law
to prohibit forfeiture from applying to water rights which vested before
1919. However, we again presume that the Arizona legislature intended
for unconstitutional aspects of this section to be severed. See Republic
Inv. Fund I, 800 P.2d at 1259. It is easy to separate abandonment, which
applies both to pre- and post-1919 water rights from the unconstitutional
restriction of forfeiture to water rights which vested after 1919.
38 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
Thus, the district court held that the 1.4 acres covered by a
road and canal, which were part of a larger 15.5 acre sever
parcel in Application 147, had been abandoned.
Freeport points to evidence that it contends undermines
the district court’s finding of intent to abandon: (1) it bought
the farmlands for the purpose of acquiring water rights; (2) it
required each lessee to maintain its water rights; (3) it
maintained all of its ditches and canals and paid taxes and
fees related to the water rights; and (4) it has engaged in
negotiations and litigation to resolve disputes about water
rights in the community (including the Pumping Complaint
and the UVFA).
3
We address each point in turn. First, buying lands with
the purpose of acquiring water rights is irrelevant if one does
not act to retain these rights after purchase (by removing
developments which are inconsistent with water usage), or if
the water rights have already been abandoned prior to
purchase.
Similarly, requiring lessees to maintain water rights in
general has little probative value if no one actually
addressed the issue of water rights appurtenant to the
1.4 acres of land covered by the road and canal. Freeport
presents no evidence that it (or its tenant) tried to remove
these improvements.
On the other hand, there is little doubt that maintaining
ditches and canals and paying taxes and fees certainly cuts
against an intent to abandon. Nonetheless, such actions are
not necessarily dispositive.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 39
As the district court observed, under Nevada law,
“[w]here there is evidence of both a substantial period of
nonuse, combined with evidence of an improvement which
is inconsistent with irrigation, the payment of taxes or
assessments, alone, will not defeat a claim of abandonment.”
Orr Water Ditch Co., 256 F.3d at 946 (quoting United States
v. Alpine Land & Reservoir Co., 27 F. Supp. 2d 1230, 1245
(D. Nev. 1998)). Unfortunately, there are few cases
evaluating abandonment under Arizona law. Nevertheless,
while “nearly all western states presume an intent to abandon
upon a showing of a prolonged period of non-use,” Nevada
permits only an “inference” that “a prolonged period of non-
use” may indicate abandonment. Id. at 945. Thus, if Nevada
has one of the most stringent tests for abandonment and
holds that payment of fees does not negate an abandonment
claim, it seems likely that Arizona law would reach a similar
conclusion. 23
In this case, the 1.4 acres that the district court found
abandoned were only a portion of the entire 15.5 acre parcel
at issue in Application 147. It appears that water taxes and
fees are assessed against an entire parcel. Thus, the payment
of taxes and fees does not necessarily indicate a lack of intent
to abandon the water rights in the land covered by the road
and canal; if Freeport wanted to retain its water rights in the
rest of the parcel, it would have had to pay these fees.
23
We need not decide whether Arizona permits a presumption of
abandonment upon a showing of nonuse like many western states or
whether it follows Nevada’s approach that a showing of nonuse creates
only an inference of abandonment. See Orr Water Ditch Co., 256 F.3d
at 945. Under either approach, because the road and canal presented
significant evidence of intent to abandon, see infra p. 42, we conclude
that the district court did not err.
40 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
Finally, engaging in litigation related to one’s water
rights certainly undermines a finding of intent to abandon as
Gila Water Co. v. Green, 232 P. 1016, 1019 (Ariz. 1925),
vacated on reh’g, 241 P. 307 (Ariz. 1925), illustrates. 24 In
that case, the Arizona Supreme Court observed that left
“unexplained,” a twenty-five year period of nonuse between
when a dam washed out and a new one was built “would be
very strong evidence of an intention to abandon.” Id.Nonetheless, the court held that there was a valid explanation
for the delay—litigation over the rights under the title. Id.Thus, Freeport is correct that its involvement in
negotiations and litigation over the water rights on the Gila
River could undermine a finding of intent to abandon.
However, as the district court noted, Freeport holds a
significant amount of property covered by the Decree, and
the litigation it references—the Pumping Complaint and
UVFA—involved issues of widespread concern to many
property owners. Unlike Green, which involved litigation
over a specific title, 232 P. at 1019, the litigation Freeport is
referencing does not involve the specific question of whether
Freeport held water rights to the sever parcel at issue in
Application 147, or more particularly, whether its water
rights included the land covered by a road and a canal. Thus,
Freeport’s involvement in prior negotiations and litigation
says little about its intent to abandon the water rights in the
1.4 acres covered by the road and canal.
24
While the Arizona Supreme Court vacated Green on rehearing, it
did so because it had declined to apply the doctrine of forfeiture in the
first instance, not because of any legal problems with its finding of
abandonment. See Green, 241 P. at 308 (adhering to its earlier rejection
of abandonment). Thus, we continue to consider such abandonment
analysis.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 41
In contrast to the limited probative value of the
assessments paid by Freeport or its involvement in the
Pumping Complaint, building a road and a canal is powerful
evidence that one will no longer need water rights for the
land covered by these improvements. 25 As the district court
found, such acts are “incompatible with irrigation,” and
provide far greater proof of an intent to abandon than mere
non-use. 26
Freeport argues that the district court erred by relying on
evidence of abandonment before 1997. 27 Yet, this point is
irrelevant. Even if we accepted Freeport’s claim that it could
not have had any intent to abandon until 1997, this was still
eleven years before Freeport filed its sever and transfer
applications in 2008. 28 As Phelps Dodge explains, “[f]ailure
to use a permitted instream flow right during the statutory
period may result in a finding of abandonment or forfeiture
as it would any other water right in Arizona.” 118 P.3d at
25
While one might argue that a canal is consistent with irrigation
because it is necessary for such irrigation, Freeport does not present this
contention. Further, there is no claim that crops are being grown in the
canal, and thus, no water rights are needed to irrigate the land actually
covered by the canal, which will carry water tied to other land.
26
The irrigation districts and non-Freeport applicants observe that
roads can be temporary, but Freeport provides no indication that the road
or canal at issue here actually was temporary.
27
Freeport contends that prior to this point, the Decree was
administered in such a way that parties were given the full amount of
water available to them, regardless of how many acres they were actually
irrigating in a given year.
28
Notably, Freeport does not argue that the district court erroneously
relied on outdated evidence of a road and canal which have since been
removed.
42 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
1115 (emphasis added). Because the statutory period for
forfeiture is five years, Phelps Dodge strongly suggests that
if one demonstrates an intent to abandon coupled with
nonuse for more than five years, he has abandoned his water
rights. See id. By waiting at least eleven years before filing
a sever and transfer application, Freeport has more than
doubled this period. Notably, Freeport does not claim that it
has in fact been using the water rights in question since 1997.
Thus, because the creation of (and failure to remove) the
road and canal demonstrates an intent to abandon, and
because Freeport failed to use its water rights in the land
covered by the canal for at least eleven years, we cannot
conclude that the district court clearly erred in determining
that Freeport had abandoned its water rights in 1.4 acres of
land that were part of the sever parcel in Application 147.
Instead, by limiting its finding of abandonment to 1.4 acres
out of the 15.5 acre parcel, the district court appropriately
tailored its holding. 29
E
While Plaintiffs contend that the district court erred by
rejecting their objections of abandonment of the water rights
in land that has become riverbed, there are serious questions
with respect to whether Application 151 and the
accompanying objections presenting this issue have become
moot. See supra Part II.C.
29
Because we conclude that the road and canal indicate
overwhelming evidence of intent to abandon, there is no need to evaluate
the district court’s holding that a clear and convincing evidence standard
applies to questions of abandonment under Arizona law, and we express
no opinion on such matter.
UNITED STATES V. GILA RIVER INDIAN COMMUNITY 43
Although there are no mootness concerns associated
with several other objections that allegedly involve land that
has become riverbed, 30 the district court either made no
particular findings of abandonment in regard to these
applications or otherwise dismissed the issue. 31 We decline
to address the question of abandonment of water rights in
land that has become riverbed in these applications in the
first instance. 32 See Smith, 194 F.3d at 1052.
IV
For the foregoing reasons, we AFFIRM the district
court’s denial of Freeport’s remaining applications and its
holding that Freeport abandoned 1.4 acres covered by a road
and canal in the sever parcel at issue in Application 147. We
REVERSE the district court’s ruling that Arizona’s law of
statutory forfeiture does not apply to Freeport’s water rights
and its denial of Plaintiffs’ objections on this basis. We
30
Applications 147, 150, and 162.
31
The district court made no findings whatsoever regarding the
abandonment of riverbed in Applications 147 and 162. In regard to
Application 150, although it did not specifically discuss the
abandonment of riverbed, the district court observed that it “appear[ed]”
that Freeport had “abandoned a portion of Sever Parcel 150” but found
it “inconclusive how many acres Freeport ha[d] abandoned because a
portion of Freeport’s legal description for Sever Parcel 150 l[ay] outside
the named Decree acres.” Thus, it declined to make a judgment on
abandonment. The parties do not address the question of whether the
land in Sever Parcel 150 is outside the Decree acreage on appeal.
32
We note, however, that where objections remain pending, and the
district court rejected claims of abandonment, statutory forfeiture may
nonetheless apply. We leave it to district court to evaluate the application
of forfeiture to these lands.
44 UNITED STATES V. GILA RIVER INDIAN COMMUNITY
REMAND the remaining objections filed by the United
States, the San Carlos Apache Tribe of Arizona, and the Gila
River Indian Community to the district court to assess issues
of mootness and the application of our holding that
Arizona’s law of statutory forfeiture applies to water rights
that vested before 1919.
We DISMISS the cross-appeal in No. 14-17048, brought
by Gila Valley Irrigation District and Franklin Irrigation
District, 33 and the cross-appeal in No. 14-17047, brought by
Larry W. Barney, Viri Viva Lunt Revocable Trust, TRP
Family Trust, Ronald Howard, Janice Howard, Myrna
Curtis, Joe B. Tatum, Judy L. Tatum, Harrington Ranch And
Farm, S&R Daley, LP, and Steve Daley, Ross and Fawn
Bryce Family Trust, Householder Family Limited
Partnership, and Kenneth Claridge. We GRANT their joint
motion to treat their joint opening brief as an amicus brief.
We DENY, however, their joint motion to file a second
amicus brief. See 9th Cir. R. 29-1.
Each party shall bear its own costs.
AFFIRMED in part, DISMISSED in part,
REVERSED in part, and REMANDED.
33
While Gila Valley Irrigation District and Franklin Irrigation
District cross-appealed from judgment on Freeport’s subdocket, 4:31-cv-
00061-SRB, in addition to appealing from the main docket, No. 4:31-cv-
00059-SRB, the irrigation districts considered themselves to be amici on
the subdocket, and the district court treated them accordingly. Thus,
notwithstanding our consideration of appeals from the Freeport
subdocket, it is appropriate to dismiss the cross-appeal of the irrigation
districts from 4:31-cv-00061-SRB.